UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-23124
Franklin Templeton ETF Trust
(Exact name of registrant as specified in charter)
One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant’s telephone number, including area code: 650 312-2000
Date of fiscal year end: 3/31
Date of reporting period: 09/30/20
Item 1. | Reports to Stockholders. |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2020
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Equity ETF | |
Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ International Equity Hedged ETF |
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
Visit franklintempleton.com/investor/ investments-and-solutions/investment-options/etfs/ for fund updates and documents.
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
1 | Semiannual Report | franklintempleton.com |
SEMIANNUAL REPORT
Global developed and emerging market equities, as measured by the MSCI All Country World Index, advanced strongly during the six months under review. Despite the onset of a significant global recession following the stringent social distancing measures imposed to slow the spread of the novel coronavirus (COVID-19), equities in all major regions of the world posted sizable gains. A gradual easing of restrictions and massive government stimulus drove a resumption of economic activity, leading stocks higher throughout most of the period. Optimism about the development of treatments and vaccines for COVID-19 further supported the recovery in equity prices. However, geopolitical tensions, rising infection rates and the possibility of renewed restrictions pressured global markets in September.
In the U.S., pandemic-related restrictions caused stiff economic headwinds that included mass layoffs that drove the unemployment rate to 14.7% in April 2020.1 The longest U.S. economic expansion in history ended in February (prior to the beginning of the period), according to the National Bureau of Economic Research, and the country slipped into a deep recession. The federal government’s stimulus measures, along with declining jobless claims and unemployment rate, rising retail sales, and optimism about treatments and potential vaccines for COVID-19, drove a sharp equity rally through much of the reporting period. Despite a record decline in second-quarter gross domestic product (GDP), resilient consumer spending and optimism about an economic rebound supported stock prices throughout much of the summer, particularly in the consumer staples, health care and information technology sectors. Economic growth resumed in the third quarter at the fastest annualized rate on record as many businesses reopened, but the GDP remained below its pre-pandemic level. However, concerns about high infection rates and the unlikely passage of additional stimulus ahead of the U.S. presidential election hindered equities in September.
The U.S. Federal Reserve (Fed) continued its significant efforts to support the U.S. economy by maintaining the federal funds target rate range at 0.00%–0.25% and expanding quantitative easing measures aimed at ensuring credit flows to
borrowers and supporting credit markets with unlimited amounts of bond purchasing. The Fed also announced a shift in inflation policy that could potentially retain ultra-low interest rates, even amid declining unemployment and rising inflation.
In the eurozone, the pandemic’s economic disruption resulted in a recession, with second-quarter 2020 GDP growth contracting at a record rate compared to the prior quarter. However, the economy grew at a record rate in the third quarter amid the reopening of many businesses, relaxation of some social distancing restrictions and continued stimulus measures. In this environment, European developed market equities, as measured by the MSCI Europe Index, advanced throughout most of the reporting period. Although stock prices declined in September as rising infection rates heightened concerns that the nascent economic revival could stall, European developed market equities, as measured by the MSCI Europe Index, ended the period with strong gains.
Asian developed and emerging market equities also advanced, as measured by the MSCI All Country Asia Index. China’s second- and third-quarter economic recovery, a key driver of the region’s economic activity, supported the stock rebound. Government stimulus measures, economic reopenings and ongoing development of COVID-19 vaccines also buoyed investor sentiment. However, renewed tensions between China and the U.S., heightened regional conflicts and concerns about the economic impact of a resurgence of infections pressured Asian stocks near period-end.
Emerging market stocks, as measured by the MSCI Emerging Markets Index, also posted significant gains. Improving economic activity, higher oil prices and U.S. dollar weakness led emerging markets equities higher, despite investor concerns in September 2020 about surging COVID-19 cases in some emerging market countries.
The foregoing information reflects our analysis and opinions as of September 30, 2020. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
1. Source: U.S. Bureau of Labor Statistics.
See www.franklintempletondatasources.com for additional data provider information.
2 | Semiannual Report | franklintempleton.com |
Franklin LibertyQ Emerging Markets ETF
This semiannual report for Franklin LibertyQ Emerging Markets ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Emerging Markets (EM) Index (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 includes stocks from emerging market countries that have favorable exposure to four investment-style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI EM Index over the long term by selecting equity securities from the MSCI EM Index that have exposure to these investment-style factors.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +17.94% based on market price and +16.55% based on net asset value (NAV). In comparison, the LibertyQ EM Index-NR posted a +17.04% total return for the same period, while the MSCI EM Index-NR posted a +29.37% total return.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
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.
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees
Geographic Composition* | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Asia | 68.1% | |||
Europe | 12.2% | |||
Middle East & Africa | 11.3% | |||
Latin America & Caribbean | 8.2% | |||
Short-Term Investments & Other Net Assets | 0.2% |
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors.
and expenses, to the performance of the LibertyQ EM Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. The LibertyQ EM Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI EM Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI EM Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of emerging markets.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 24.
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FRANKLIN LIBERTYQ EMERGING MARKETS ETF
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 12.9% | |||
Oil, Gas & Consumable Fuels | 10.7% | |||
Metals & Mining | 7.4% | |||
Wireless Telecommunication Services | 5.7% | |||
IT Services | 4.8% | |||
Diversified Telecommunication Services | 4.5% | |||
Food Products | 4.1% | |||
Semiconductors & Semiconductor Equipment | 3.4% | |||
Beverages | 3.2% | |||
Chemicals | 3.2% |
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Infosys Ltd. IT Services, India | 1.5% | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | 1.4% | |||
HCL Technologies Ltd. IT Services, India | 1.4% | |||
Tata Consultancy Services Ltd. IT Services, India | 1.2% | |||
Kweichow Moutai Co. Ltd., A Beverages, China | 1.2% | |||
KB Financial Group Inc. Banks, South Korea | 1.2% | |||
Longfor Group Holdings Ltd., 144A, Reg S Real Estate Management & Development, China | 1.2% | |||
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea | 1.1% | |||
Al-Rajhi Bank Banks, Saudi Arabia | 1.1% | |||
NetEase Inc., ADR Entertainment, China | 1.1% |
Top 10 Countries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
China | 27.1% | |||
India | 13.3% | |||
Taiwan | 11.3% | |||
Russia | 10.2% | |||
South Korea | 8.7% | |||
Brazil | 4.6% | |||
Saudi Arabia | 3.9% | |||
South Africa | 3.2% | |||
Indonesia | 2.6% | |||
Mexico | 2.4% |
Thank you for your participation in Franklin LibertyQ Emerging Markets ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Louis Hsu, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
CFA® is a trademark owned by CFA Institute.
4 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ EMERGING MARKETS ETF
Performance Summary as of September 30, 2020
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 of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month5 | +16.55% | +17.94% | +16.55% | +17.94% | ||||||||||||
1-Year | -6.09% | -5.70% | -6.09% | -5.70% | ||||||||||||
3-Year | -8.28% | -8.36% | -2.84% | -2.87% | ||||||||||||
Since Inception (6/1/16) | +14.74% | +15.01% | +3.22% | +3.28% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 6 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ EMERGING MARKETS ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.043025 |
Total Annual Operating Expenses6
0.45% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. The Fund is designed for the aggressive portion of a well-diversified portfolio. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Total return information is based on net asset values calculated for shareholder transactions. Certain adjustments were made to the net assets of the Fund at 9/30/20 for financial reporting purposes, and as a result, the total returns based on those net asset values differ from the adjusted total returns reported in the Financial Highlights.
6. 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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional provider information.
6 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ EMERGING MARKETS 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,169.10 | $ | 2.45 | $ | 1,022.81 | $ | 2.28 | 0.45 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
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Franklin LibertyQ Global Dividend ETF
This semiannual report for Franklin LibertyQ Global Dividend ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Global Dividend Index (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 includes stocks from developed and emerging market countries with high and persistent dividend income that have favorable exposure to a quality investment-style factor, subject to a maximum 2% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI All Country World Index (ACWI) ex REITs Index over the long term by applying dividend persistence and yield screens and the quality factor selection process.
Performance Overview
For the six-month period, the Fund posted cumulative total returns of +21.68% based on market price and +21.58% based on net asset value (NAV). In comparison, the LibertyQ Global Dividend Index-NR posted a +21.54% total return for the same period, while the MSCI ACWI ex REITs Index-NR posted a +29.22% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 10.
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.
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees
Geographic Composition* | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
North America | 48.3% | |||
Europe | 21.7% | |||
Asia | 15.1% | |||
Australia & New Zealand | 9.0% | |||
Middle East & Africa | 4.0% | |||
Latin America & Caribbean | 1.4% | |||
Short-Term Investments & Other Net Assets | 0.5% |
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors.
and expenses, to the performance of the LibertyQ Global Dividend Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. The LibertyQ Global Dividend Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI ACWI ex REITs Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI ACWI ex REITs Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding REIT securities.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 34.
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FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 16.6% | |||
Semiconductors & Semiconductor Equipment | 8.8% | |||
Pharmaceuticals | 8.7% | |||
Insurance | 7.2% | |||
Hotels, Restaurants & Leisure | 5.3% | |||
Personal Products | 4.3% | |||
Household Products | 4.1% | |||
IT Services | 3.8% | |||
Tobacco | 3.7% | |||
Machinery | 3.7% |
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
United Parcel Service Inc., B Air Freight & Logistics, United States | 3.0% | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | 2.7% | |||
QUALCOMM Inc. Semiconductors & Semiconductor Equipment, United States | 2.6% | |||
NTT DOCOMO Inc. Wireless Telecommunication Services, Japan | 2.3% | |||
Target Corp. Multiline Retail, United States | 2.2% | |||
Unilever NV Personal Products, United Kingdom | 2.2% | |||
The Procter & Gamble Co. Household Products, United States | 2.2% | |||
Unilever PLC Personal Products, United Kingdom | 2.1% | |||
McDonald’s Corp. Hotels, Restaurants & Leisure, United States | 2.1% | |||
Westpac Banking Corp. Banks, Australia | 2.1% |
Top 10 Countries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
United States | 42.0% | |||
Australia | 8.6% | |||
United Kingdom | 8.5% | |||
Japan | 7.0% | |||
Switzerland | 6.2% | |||
Canada | 6.2% | |||
Taiwan | 3.4% | |||
Finland | 2.6% | |||
Germany | 2.6% | |||
Qatar | 2.1% |
Thank you for your participation in Franklin LibertyQ Global Dividend ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Louis Hsu, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
Performance Summary as of September 30, 2020
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 of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +21.58% | +21.68% | +21.58% | +21.68% | ||||||||||||
1-Year | -1.14% | -0.99% | -1.14% | -0.99% | ||||||||||||
3-Year | +9.50% | +9.17% | +3.07% | +2.97% | ||||||||||||
Since Inception (6/1/16) | +26.54% | +26.68% | +5.58% | +5.61% |
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 11 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.560164 |
Total Annual Operating Expenses5
0.45% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Companies that have historically paid regular dividends to shareholders may decrease or eliminate dividend payments in the future. A decrease in dividend payments by an issuer may result in a decrease in the value of the issuer’s stock and less available income for the Fund. There can be no assurance that the Fund’s quality factor stock selection process and dividend screens of the Underlying Index will enhance performance. Exposure to investment factors and the use of dividend screens may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional provider information.
franklintempleton.com | Semiannual Report | 11 |
FRANKLIN LIBERTYQ GLOBAL DIVIDEND 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,215.80 | $ | 2.50 | $ | 1,022.81 | $ | 2.28 | 0.45 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
12 | Semiannual Report | franklintempleton.com |
Franklin LibertyQ Global Equity ETF
This semiannual report for Franklin LibertyQ Global Equity ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Global Equity Index (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 includes stocks from developed and emerging market countries that have favorable exposure to four investment-style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI All Country World Index (ACWI) over the long term by selecting equity securities from the MSCI ACWI that have exposure to these investment-style factors.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +25.07% based on market price and +24.11% based on net asset value (NAV). In comparison, the LibertyQ Global Equity Index-NR posted a +23.99% total return for the same period, while the MSCI ACWI-NR posted a +28.91% total return.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 15.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees
Geographic Composition* | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
North America | 58.8% | |||
Europe | 17.0% | |||
Asia | 16.6% | |||
Australia & New Zealand | 5.1% | |||
Middle East & Africa | 1.1% | |||
Latin America & Caribbean | 1.0% | |||
Short-Term Investments & Other Net Assets | 0.4% |
*Figures are stated as percentage of total and may not equal 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors.
and expenses, to the performance of the LibertyQ Global Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. The LibertyQ Global Equity Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI ACWI using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI ACWI is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 39.
franklintempleton.com | Semiannual Report | 13 |
FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 8.6% | |||
Semiconductors & Semiconductor Equipment | 7.9% | |||
Biotechnology | 5.0% | |||
Metals & Mining | 4.8% | |||
Software | 4.6% | |||
IT Services | 4.5% | |||
Diversified Telecommunication Services | 3.6% | |||
Tobacco | 3.0% | |||
Technology Hardware, Storage & Peripherals | 3.0% | |||
Specialty Retail | 2.9% |
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | 1.4% | |||
NVIDIA Corp. Semiconductors & Semiconductor Equipment, United States | 1.4% | |||
Apple Inc. Technology Hardware, Storage & Peripherals, United States | 1.3% | |||
iShares MSCI India ETF Diversified Financial Services, India | 1.2% | |||
NIKE Inc., B Textiles, Apparel & Luxury Goods, United States | 1.2% | |||
Texas Instruments Inc. Semiconductors & Semiconductor Equipment, United States | 1.1% | |||
The Procter & Gamble Co. Household Products, United States | 1.1% | |||
Lowe’s Cos. Inc. Specialty Retail, United States | 1.1% | |||
Accenture PLC, A IT Services, United States | 1.1% | |||
United Parcel Service Inc. Health Care Technology, United Kingdom | 1.1% |
Top 10 Countries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
United States | 56.2% | |||
United Kingdom | 6.3% | |||
Japan | 5.7% | |||
Australia | 4.9% | |||
China | 3.7% | |||
Switzerland | 3.3% | |||
Canada | 2.6% | |||
Taiwan | 2.3% | |||
South Korea | 1.8% | |||
India | 1.6% |
Thank you for your participation in Franklin LibertyQ Global Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Louis Hsu, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
14 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
Performance Summary as of September 30, 2020
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 of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +24.11% | +25.07% | +24.11% | +25.07% | ||||||||||||
1-Year | +7.08% | +7.35% | +7.08% | +7.35% | ||||||||||||
3-Year | +22.71% | +22.78% | +7.06% | +7.08% | ||||||||||||
Since Inception (6/1/16) | +46.63% | +47.24% | +9.24% | +9.34% |
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 16 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.426346 |
Total Annual Operating Expenses5
0.35% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional provider information.
16 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ GLOBAL EQUITY 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,241.10 | $ | 1.97 | $ | 1,023.31 | $ | 1.78 | 0.35 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 17 |
Franklin LibertyQ International Equity Hedged ETF
This semiannual report for Franklin LibertyQ International Equity Hedged ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ International Equity Hedged Index (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 includes stocks from developed market countries in Europe, Australasia and the Far East (EAFE) that have favorable exposure to four investment-style factors: quality, value, momentum and low volatility, subject to a maximum 2% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI EAFE Index over the long term by selecting equity securities from the MSCI EAFE Index that have exposure to these investment-style factors. The Underlying 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 Underlying Index.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +11.48% based on market price and +10.46% based on net asset value (NAV). In comparison, LibertyQ International Equity Hedged Index-NR posted a +10.71% total return for the same period, while the MSCI EAFE 100% Hedged to USD Index-NR posted a +14.41% total return.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
Geographic Composition* | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Europe | 55.5% | |||
Asia | 27.9% | |||
Australia & New Zealand | 16.0% | |||
Middle East & Africa | 0.7% | |||
Short-Term Investments & Other Net Assets | -0.1% |
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors.
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ International Equity Hedged Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. The LibertyQ International Equity Hedged Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI EAFE Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI EAFE Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 54.
18 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 11.9% | |||
Metals & Mining | 9.7% | |||
Personal Products | 5.6% | |||
Electric Utilities | 4.4% | |||
Diversified Telecommunication Services | 4.1% | |||
Wireless Telecommunication Services | 4.0% | |||
Automobiles | 3.9% | |||
Health Care Equipment & Supplies | 3.6% | |||
Food & Staples Retailing | 3.4% | |||
Tobacco | 3.4% |
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Unilever NV Personal Products, United Kingdom | 2.3% | |||
Unilever PLC Personal Products, United Kingdom | 2.2% | |||
Rio Tinto PLC Metals & Mining, Australia | 2.1% | |||
Toyota Motor Corp. Automobiles, Japan | 2.1% | |||
BHP Group Ltd. Metals & Mining, Australia | 2.0% | |||
Nestle SA Food Products, Switzerland | 2.0% | |||
Novo Nordisk AS, B Pharmaceuticals, Denmark | 2.0% | |||
Sanofi Pharmaceuticals, France | 1.9% | |||
CSL Ltd. Biotechnology, Australia | 1.9% | |||
NTT DOCOMO Inc. Wireless Telecommunication Services, Japan | 1.9% |
Top 10 Countries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Japan | 25.2% | |||
United Kingdom | 24.4% | |||
Australia | 15.2% | |||
Switzerland | 8.4% | |||
Spain | 4.6% | |||
Denmark | 3.7% | |||
France | 3.6% | |||
Italy | 3.2% | |||
Sweden | 2.5% | |||
Finland | 1.8% |
Thank you for your participation in Franklin LibertyQ International Equity Hedged ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Louis Hsu, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
Performance Summary as of September 30, 2020
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 of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +10.46% | +11.48% | +10.46% | +11.48% | ||||||||||||
1-Year | -3.31% | -3.32% | -3.31% | -3.32% | ||||||||||||
3-Year | +8.98% | +9.60% | +2.91% | +3.10% | ||||||||||||
Since Inception (6/1/16) | +23.65% | +24.45% | +5.02% | +5.18% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 21 for Performance Summary footnotes.
20 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.910024 |
Total Annual Operating Expenses5
0.40% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. The Fund will attempt to hedge the currency exposure of non-U.S. dollar denominated securities held in its portfolio by investing in foreign currency forward contracts. Foreign currency forward contracts do not eliminate movements in the value of non-U.S. currencies and securities but rather allow the Fund to establish a fixed rate of exchange for a future point in time. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. Currency management strategies could result in losses to the Fund if currencies do not perform as the investment manager expects. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional provider information.
franklintempleton.com | Semiannual Report | 21 |
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,104.60 | $ | 2.11 | $ | 1,023.06 | $ | 2.03 | 0.40 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
22 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Franklin LibertyQ Emerging Markets ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 22.20 | $ | 29.70 | $ | 33.41 | $ | 29.29 | $ | 25.66 | ||||||||||
|
| |||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.53 | 1.24 | 1.14 | 0.83 | 0.47 | |||||||||||||||
Net realized and unrealized gains (losses) | 3.22 | (6.96 | ) | (3.76 | ) | 4.15 | 3.25 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 3.75 | (5.72 | ) | (2.62 | ) | 4.98 | 3.72 | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.04 | ) | (1.78 | ) | (1.09 | ) | (0.86 | ) | (0.09 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 25.91 | $ | 22.20 | $ | 29.70 | $ | 33.41 | $ | 29.29 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 16.91% | (20.55)% | (7.70)% | 17.20% | 14.55% | |||||||||||||||
Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.45% | 0.49% | 0.55% | 0.69% | f | 0.75% | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.45% | 0.49% | 0.55% | 0.54% | f | 0.55% | ||||||||||||||
Net investment income | 4.20% | 4.26% | 3.75% | 2.61% | 2.09% | |||||||||||||||
Supplemental data |
| |||||||||||||||||||
Net assets, end of period (000’s) | $20,731 | $57,711 | $344,484 | $400,908 | $328,086 | |||||||||||||||
Portfolio turnover rateg | 23.72% | h | 44.11% | h | 52.42% | 32.87% | 31.66% |
aFor the period June 1, 2016 (commencement of operations) to March 31, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 19.42% | 41.78% | —% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 23 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin LibertyQ Emerging Markets ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 97.2% | ||||||||||||||
Brazil 3.1% | ||||||||||||||
Ambev SA | Beverages | 81,200 | $ | 180,654 | ||||||||||
BB Seguridade Participacoes SA | Insurance | 26,000 | 111,953 | |||||||||||
Cielo SA | IT Services | 30,000 | 20,917 | |||||||||||
Engie Brasil Energia SA | Independent Power and Renewable Electricity Producers | 6,000 | 42,953 | |||||||||||
Porto Seguro SA | Insurance | 2,000 | 17,121 | |||||||||||
TIM Participacoes SA | Wireless Telecommunication Services | 19,200 | 44,488 | |||||||||||
Vale SA | Metals & Mining | 21,280 | 223,165 | |||||||||||
|
| |||||||||||||
641,251 | ||||||||||||||
|
| |||||||||||||
Chile 0.9% | ||||||||||||||
Aguas Andinas SA, A | Water Utilities | 65,736 | 18,357 | |||||||||||
Colbun SA | Independent Power and Renewable Electricity Producers | 165,164 | 26,604 | |||||||||||
Compania Cervecerias Unidas SA | Beverages | 3,368 | 21,676 | |||||||||||
Enel Americas SA | Electric Utilities | 611,332 | 79,150 | |||||||||||
Enel Chile SA | Electric Utilities | 704,764 | 49,291 | |||||||||||
|
| |||||||||||||
195,078 | ||||||||||||||
|
| |||||||||||||
China 27.1% | ||||||||||||||
A-Living Services Co. Ltd., H | Commercial Services & Supplies | 5,500 | 27,819 | |||||||||||
Agricultural Bank of China Ltd., A | Banks | 50,000 | 23,356 | |||||||||||
Agricultural Bank of China Ltd., H | Banks | 420,000 | 131,148 | |||||||||||
a | AK Medical Holdings Ltd., Reg S | Health Care Equipment & Supplies | 4,800 | 12,251 | ||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 4,000 | 32,572 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 21,230 | 146,008 | |||||||||||
Anhui Kouzi Distillery Co. Ltd., A | Beverages | 400 | 2,990 | |||||||||||
Apeloa Pharmaceutical Co. Ltd., A | Pharmaceuticals | 800 | 2,810 | |||||||||||
Asymchem Laboratories Tianjin Co. Ltd., A | Pharmaceuticals | 200 | 7,765 | |||||||||||
Autobio Diagnostics Co. Ltd., A | Health Care Equipment & Supplies | 300 | 7,131 | |||||||||||
BAIC Motor Corp. Ltd., H | Automobiles | 22,000 | 8,942 | |||||||||||
Bank of Beijing Co. Ltd., A | Banks | 24,300 | 16,758 | |||||||||||
Bank of China Ltd., A | Banks | 12,000 | 5,658 | |||||||||||
Bank of China Ltd., H | Banks | 504,000 | 156,077 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 48,200 | 32,246 | |||||||||||
Bank of Communications Co. Ltd., H | Banks | 223,400 | 107,232 | |||||||||||
Bank of Hangzhou Co. Ltd. | Banks | 5,700 | 9,894 | |||||||||||
Bank of Nanjing Co. Ltd., A | Banks | 10,400 | 12,091 | |||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 22,800 | 16,765 | |||||||||||
Beijing Capital Development Co. Ltd., A | Real Estate Management & Development | 2,000 | 1,972 | |||||||||||
Beijing Kunlun Tech Co. Ltd. | Entertainment | 800 | 3,071 | |||||||||||
Brilliance China Automotive Holdings Ltd. | Automobiles | 46,000 | 43,151 | |||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 208,000 | 38,916 | |||||||||||
China CITIC Bank Corp. Ltd., A | Banks | 6,800 | 5,060 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 260,000 | 100,310 | |||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 39,200 | 181,585 | |||||||||||
China Construction Bank Corp., H | Banks | 240,000 | 155,458 | |||||||||||
China Everbright Bank Co. Ltd., A | Banks | 43,900 | 23,612 | |||||||||||
China Everbright Bank Co. Ltd., H | Banks | 84,000 | 26,446 | |||||||||||
a,b | China Feihe Ltd., 144A, Reg S | Food Products | 11,000 | 25,520 | ||||||||||
China Hongqiao Group Ltd. | Metals & Mining | 24,000 | 14,957 | |||||||||||
China Lesso Group Holdings Ltd. | Building Products | 22,000 | 39,515 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 36,000 | 39,623 | |||||||||||
China Merchants Port Holdings Co. Ltd. | Transportation Infrastructure | 18,000 | 18,302 | |||||||||||
China Minsheng Banking Corp. Ltd., A | Banks | 42,800 | 33,426 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 170,000 | 89,058 | |||||||||||
China Mobile Ltd. | Wireless Telecommunication Services | 26,190 | 167,109 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 48,000 | 60,573 |
24 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
China Overseas Property Holdings Ltd. | Real Estate Management & Development | 17,000 | $ | 13,863 | ||||||||||
China Pacific Insurance Group Co. Ltd., A | Insurance | 4,400 | 20,236 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 32,800 | 92,686 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 20,400 | 11,754 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 376,000 | 150,885 | |||||||||||
China Reinsurance Group Corp., H | Insurance | 72,000 | 6,596 | |||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 61,000 | 83,275 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 6,800 | 16,503 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 99,120 | 177,777 | |||||||||||
China South Publishing & Media Group Co. Ltd., A | Media | 2,000 | 3,201 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 20,000 | 30,400 | |||||||||||
China Telecom Corp. Ltd., H | Diversified Telecommunication Services | 256,000 | 76,635 | |||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 24,400 | 68,782 | |||||||||||
Chinese Universe Publishing and Media Group Co. Ltd., A | Media | 1,600 | 2,751 | |||||||||||
Chongqing Brewery Co. Ltd., A | Beverages | 400 | 6,082 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., H | Banks | 60,000 | 22,065 | |||||||||||
CNOOC Ltd. | Oil, Gas & Consumable Fuels | 160,000 | 153,806 | |||||||||||
Country Garden Services Holdings Co. Ltd. | Commercial Services & Supplies | 31,400 | 201,973 | |||||||||||
Da An Gene Co. Ltd. of Sun Yat-Sen University | Biotechnology | 450 | 2,322 | |||||||||||
Dali Foods Group Co. Ltd. | Food Products | 57,500 | 35,094 | |||||||||||
Daqin Railway Co. Ltd., A | Road & Rail | 21,200 | 19,900 | |||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 74,000 | 45,928 | |||||||||||
East Money Information Co. Ltd. | Capital Markets | 5,600 | 19,796 | |||||||||||
Far East Horizon Ltd. | Diversified Financial Services | 24,000 | 19,448 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 16,800 | 19,978 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 3,800 | 90,768 | |||||||||||
Fujian Sunner Development Co. Ltd. | Food Products | 2,000 | 6,448 | |||||||||||
Fuyao Glass Industry Group Co. Ltd., A | Auto Components | 2,400 | 11,455 | |||||||||||
G-bits Network Technology Xiamen Co. Ltd., A | Entertainment | 100 | 9,179 | |||||||||||
Gree Electric Appliances Inc. of Zhuhai | Household Durables | 3,200 | 25,133 | |||||||||||
c,d | GSX Techedu Inc., ADR | Diversified Consumer Services | 980 | 88,308 | ||||||||||
Guangdong Haid Group Co. Ltd. | Food Products | 1,200 | 10,845 | |||||||||||
Guangzhou Automobile Group Co. Ltd., H | Automobiles | 71,000 | 59,090 | |||||||||||
Guangzhou Shiyuan Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 800 | 11,483 | |||||||||||
Guangzhou Wondfo Biotech Co. Ltd., A | Health Care Equipment & Supplies | 300 | 3,671 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 1,200 | 5,780 | |||||||||||
Hefei Meiya Optoelectronic Technology Inc., A | Machinery | 800 | 5,653 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 2,000 | 5,452 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 3,900 | 30,418 | |||||||||||
Hithink RoyalFlush Information Network Co. Ltd. | Capital Markets | 400 | 9,423 | |||||||||||
Hualan Biological Engineering Inc. | Biotechnology | 2,100 | 17,635 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 2,000 | 7,406 | |||||||||||
Huayu Automotive Systems Co. Ltd. | Auto Components | 3,600 | 13,209 | |||||||||||
Hubei Jumpcan Pharmaceutical Co. Ltd., A | Pharmaceuticals | 1,200 | 3,917 | |||||||||||
Hunan Valin Steel Co. Ltd. | Metals & Mining | 5,200 | 3,862 |
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 9,200 | $ | 6,670 | ||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 288,000 | 149,388 | |||||||||||
Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., A | Chemicals | 9,600 | 10,214 | |||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 5,200 | 29,501 | |||||||||||
Jafron Biomedical Co. Ltd., A | Health Care Equipment & Supplies | 870 | 9,109 | |||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 29,000 | 29,187 | |||||||||||
Jiangsu Yanghe Brewery JST Co. Ltd., A | Beverages | 1,100 | 20,260 | |||||||||||
Jiangsu Yangnong Chemical Co. Ltd., A | Chemicals | 200 | 2,585 | |||||||||||
Jiangsu Zhongtian Technology Co. Ltd., A | Electrical Equipment | 2,000 | 3,089 | |||||||||||
Jiangxi Zhengbang Technology Co. Ltd., A | Food Products | 2,000 | 5,358 | |||||||||||
Juewei Food Co. Ltd., A | Food Products | 400 | 4,834 | |||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 1,000 | 245,863 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 36,000 | 26,013 | |||||||||||
Lomon Billions Group Co. Ltd. | Chemicals | 2,000 | 6,864 | |||||||||||
a,b | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 42,220 | 236,977 | ||||||||||
Luenmei Quantum Co. Ltd., A | Water Utilities | 1,200 | 2,283 | |||||||||||
Luzhou Laojiao Co. Ltd., A | Beverages | 1,700 | 35,960 | |||||||||||
Maanshan Iron & Steel Co. Ltd., A | Metals & Mining | 7,700 | 3,030 | |||||||||||
Muyuan Foods Co. Ltd. | Food Products | 2,800 | 30,532 | |||||||||||
NanJi E-Commerce Co. Ltd. | Media | 2,000 | 5,087 | |||||||||||
NetEase Inc., ADR | Entertainment | 492 | 223,698 | |||||||||||
New Hope Liuhe Co. Ltd. | Food Products | 3,200 | 13,062 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 37,000 | 46,405 | |||||||||||
Offcn Education Technology Co. Ltd., A | Diversified Consumer Services | 1,200 | 5,770 | |||||||||||
Ovctek China Inc., A | Health Care Equipment & Supplies | 850 | 7,793 | |||||||||||
Perfect World Co. Ltd. | Entertainment | 1,200 | 5,888 | |||||||||||
Postal Savings Bank of China Co. Ltd., H | Banks | 124,000 | 52,000 | |||||||||||
RiseSun Real Estate Development Co. Ltd. | Real Estate Management & Development | 4,800 | 5,397 | |||||||||||
SAIC Motor Corp Ltd. | Automobiles | 8,000 | 22,551 | |||||||||||
Sansteel Minguang Co. Ltd. | Metals & Mining | 4,000 | 3,861 | |||||||||||
Sany Heavy Industry Co. Ltd., A | Machinery | 8,500 | 31,175 | |||||||||||
Seazen Holdings Co. Ltd., A | Real Estate Management & Development | 2,000 | 10,303 | |||||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 11,300 | 13,970 | |||||||||||
Shandong Buchang Pharmaceuticals Co. Ltd., A | Pharmaceuticals | 1,200 | 4,403 | |||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 2,000 | 7,220 | |||||||||||
Shandong Sun Paper Industry JSC Ltd. | Paper & Forest Products | 2,000 | 4,155 | |||||||||||
Shanghai Industrial Holdings Ltd. | Industrial Conglomerates | 4,000 | 5,316 | |||||||||||
Shanghai Industrial Urban Development Group Ltd. | Real Estate Management & Development | 800 | 76 | |||||||||||
Shanghai International Airport Co. Ltd., A | Transportation Infrastructure | 1,200 | 12,162 | |||||||||||
Shanghai M&G Stationery Inc., A | Commercial Services & Supplies | 800 | 8,006 | |||||||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 3,600 | 3,236 | |||||||||||
Shanxi Xishan Coal & Electricity Power Co. Ltd. | Oil, Gas & Consumable Fuels | 3,050 | 1,955 | |||||||||||
Shengyi Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,600 | 5,498 | |||||||||||
Shenzhen Expressway Co. Ltd., H | Transportation Infrastructure | 12,000 | 10,421 | |||||||||||
Shenzhen Goodix Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 600 | 13,907 | |||||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | Health Care Equipment & Supplies | 973 | 49,895 | |||||||||||
Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 1,200 | 6,097 | |||||||||||
Sichuan Chuantou Energy Co Ltd. | Independent Power and Renewable Electricity Producers | 4,400 | 6,360 |
26 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Sichuan Swellfun Co. Ltd., A | Beverages | 400 | $ | 3,802 | ||||||||||
Sino-Ocean Land Holdings Ltd. | Real Estate Management & Development | 36,000 | 7,246 | |||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., A | Chemicals | 7,600 | 3,729 | |||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., H | Chemicals | 104,000 | 18,921 | |||||||||||
Suofeiya Home Collection Co. Ltd. | Household Durables | 800 | 3,107 | |||||||||||
Tangshan Jidong Cement Co. Ltd. | Construction Materials | 1,200 | 2,743 | |||||||||||
Toly Bread Co. Ltd., A | Food Products | 400 | 3,512 | |||||||||||
Tongkun Group Co. Ltd., A | Chemicals | 1,200 | 2,446 | |||||||||||
c | Topchoice Medical Investment Corp., A | Health Care Providers & Services | 300 | 9,447 | ||||||||||
Wanhua Chemical Group Co. Ltd., A | Chemicals | 3,600 | 36,762 | |||||||||||
Weichai Power Co. Ltd., A | Machinery | 6,300 | 14,018 | |||||||||||
Weifu High-Technology Group Co. Ltd., A | Auto Components | 1,200 | 4,438 | |||||||||||
Weihai Guangwei Composites Co. Ltd., A | Chemicals | 400 | 4,204 | |||||||||||
Wens Foodstuffs Group Co. Ltd. | Food Products | 4,800 | 13,821 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 3,200 | 18,715 | |||||||||||
Wuliangye Yibin Co. Ltd., A | Beverages | 3,800 | 123,749 | |||||||||||
Xiamen C & D Inc., A | Trading Companies & Distributors | 2,000 | 2,523 | |||||||||||
Yanzhou Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 2,000 | 2,729 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 32,000 | 23,783 | |||||||||||
Yealink Network Technology Corp. Ltd. | Communications Equipment | 1,000 | 8,887 | |||||||||||
Yihai International Holding Ltd. | Food Products | 6,000 | 93,600 | |||||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 128,000 | 24,939 | |||||||||||
Yunda Holding Co. Ltd. | Air Freight & Logistics | 2,650 | 7,314 | |||||||||||
Yuzhou Group Holdings Co. Ltd. | Real Estate Management & Development | 36,000 | 14,214 | |||||||||||
Zhejiang Juhua Co. Ltd., A | Chemicals | 3,200 | 3,221 | |||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 2,400 | 10,535 | |||||||||||
Zhejiang Semir Garment Co. Ltd. | Textiles, Apparel & Luxury Goods | 2,400 | 2,840 | |||||||||||
Zhejiang Supor Co. Ltd. | Household Durables | 800 | 9,313 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd. | Building Products | 2,000 | 4,712 | |||||||||||
Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., A | Pharmaceuticals | 800 | 6,628 | |||||||||||
ZTO Express Cayman Inc., ADR | Air Freight & Logistics | 4,580 | 137,034 | |||||||||||
|
| |||||||||||||
5,614,364 | ||||||||||||||
|
| |||||||||||||
Colombia 0.3% | ||||||||||||||
Ecopetrol SA | Oil, Gas & Consumable Fuels | 110,312 | 54,235 | |||||||||||
|
| |||||||||||||
Egypt 0.7% | ||||||||||||||
Commercial International Bank Egypt SAE | Banks | 26,272 | 110,956 | |||||||||||
Eastern Co. SAE | Tobacco | 34,556 | 26,421 | |||||||||||
ElSewedy Electric Co. | Electrical Equipment | 24,172 | 10,522 | |||||||||||
|
| |||||||||||||
147,899 | ||||||||||||||
|
| |||||||||||||
Greece 0.2% | ||||||||||||||
Motor Oil (Hellas) Corinth Refineries SA | Oil, Gas & Consumable Fuels | 1,484 | 17,489 | |||||||||||
OPAP SA | Hotels, Restaurants & Leisure | 3,304 | 31,383 | |||||||||||
|
| |||||||||||||
48,872 | ||||||||||||||
|
| |||||||||||||
Hong Kong 0.3% | ||||||||||||||
Kingboard Laminates Holdings Ltd. | Chemicals | 28,000 | 38,297 | |||||||||||
The Wharf Holdings Ltd. | Real Estate Management & Development | 16,000 | 31,835 | |||||||||||
|
| |||||||||||||
70,132 | ||||||||||||||
|
| |||||||||||||
India 13.3% | ||||||||||||||
Asian Paints Ltd. | Chemicals | 4,768 | 128,370 | |||||||||||
Bajaj Auto Ltd. | Automobiles | 2,064 | 80,599 | |||||||||||
Bharat Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 16,616 | 79,510 | |||||||||||
Bharti Infratel Ltd. | Diversified Telecommunication Services | 8,232 | 19,559 | |||||||||||
Britannia Industries Ltd. | Food Products | 1,348 | 69,394 |
franklintempleton.com | Semiannual Report | 27 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
India (continued) | ||||||||||||||
Coal India Ltd. | Oil, Gas & Consumable Fuels | 42,120 | $ | 66,223 | ||||||||||
Colgate-Palmolive (India) Ltd. | Personal Products | 1,560 | 30,310 | |||||||||||
Dabur India Ltd. | Personal Products | 13,056 | 90,346 | |||||||||||
Eicher Motors Ltd. | Automobiles | 3,236 | 96,615 | |||||||||||
GAIL India Ltd. | Gas Utilities | 34,912 | 41,073 | |||||||||||
HCL Technologies Ltd. | IT Services | 27,132 | 298,459 | |||||||||||
a,b | HDFC Asset Management Co. Ltd., 144A, Reg S | Capital Markets | 1,044 | 32,119 | ||||||||||
Hero Motocorp Ltd. | Automobiles | 2,216 | 94,530 | |||||||||||
Hindustan Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 18,968 | 46,443 | |||||||||||
Hindustan Unilever Ltd. | Household Products | 7,448 | 208,787 | |||||||||||
Indian Oil Corp. Ltd. | Oil, Gas & Consumable Fuels | 47,764 | 47,842 | |||||||||||
Indraprastha Gas Ltd. | Gas Utilities | 2,620 | 13,736 | |||||||||||
Infosys Ltd. | IT Services | 22,004 | 300,698 | |||||||||||
ITC Ltd. | Tobacco | 86,164 | 200,520 | |||||||||||
Jubilant Foodworks Ltd. | Hotels, Restaurants & Leisure | 880 | 27,962 | |||||||||||
Marico Ltd. | Personal Products | 11,896 | 58,529 | |||||||||||
Nestle India Ltd. | Food Products | 700 | 151,031 | |||||||||||
Oil & Natural Gas Corp. Ltd. | Oil, Gas & Consumable Fuels | 58,912 | 55,295 | |||||||||||
Page Industries Ltd. | Textiles, Apparel & Luxury Goods | 132 | 38,172 | |||||||||||
Petronet LNG Ltd. | Oil, Gas & Consumable Fuels | 13,112 | 39,213 | |||||||||||
Pidilite Industries Ltd. | Chemicals | 2,900 | 56,375 | |||||||||||
REC Ltd. | Diversified Financial Services | 13,396 | 17,993 | |||||||||||
Tata Consultancy Services Ltd. | IT Services | 7,552 | 255,108 | |||||||||||
Tech Mahindra Ltd. | IT Services | 10,996 | 118,001 | |||||||||||
|
| |||||||||||||
2,762,812 | ||||||||||||||
|
| |||||||||||||
Indonesia 2.6% | ||||||||||||||
Adaro Energy Tbk PT | Oil, Gas & Consumable Fuels | 377,200 | 28,772 | |||||||||||
Charoen Pokphand Indonesia Tbk PT | Food Products | 140,000 | 53,394 | |||||||||||
c | Gudang Garam Tbk PT | Tobacco | 10,800 | 29,069 | ||||||||||
Hanjaya Mandala Sampoerna Tbk PT | Tobacco | 323,600 | 30,446 | |||||||||||
Indofood CBP Sukses Makmur Tbk PT | Food Products | 49,600 | 33,583 | |||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | Diversified Telecommunication Services | 879,200 | 151,260 | |||||||||||
Unilever Indonesia Tbk PT | Household Products | 242,000 | 131,734 | |||||||||||
United Tractors Tbk PT | Oil, Gas & Consumable Fuels | 48,000 | 73,548 | |||||||||||
|
| |||||||||||||
531,806 | ||||||||||||||
|
| |||||||||||||
Malaysia 2.1% | ||||||||||||||
Carlsberg Brewery Malaysia Bhd | Beverages | 2,800 | 13,948 | |||||||||||
Digi.com Bhd. | Wireless Telecommunication Services | 92,800 | 89,997 | |||||||||||
Hartalega Holdings Bhd. | Health Care Equipment & Supplies | 41,200 | 160,616 | |||||||||||
Nestle (Malaysia) Bhd. | Food Products | 2,100 | 71,457 | |||||||||||
Petronas Dagangan Bhd. | Oil, Gas & Consumable Fuels | 4,000 | 19,001 | |||||||||||
Petronas Gas Bhd. | Gas Utilities | 15,200 | 60,061 | |||||||||||
Westports Holdings Bhd. | Transportation Infrastructure | 22,800 | 21,179 | |||||||||||
|
| |||||||||||||
436,259 | ||||||||||||||
|
| |||||||||||||
Mexico 2.4% | ||||||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 64,868 | 51,393 | ||||||||||
Grupo Aeroportuario del Pacifico SAB de CV | Transportation Infrastructure | 9,236 | 74,258 | |||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 37,552 | 95,684 | |||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 41,316 | 65,692 | |||||||||||
Megacable Holdings SAB de CV | Media | 6,932 | 19,980 | |||||||||||
Wal-Mart de Mexico SAB de CV, V | Food & Staples Retailing | 81,312 | 195,400 | |||||||||||
|
| |||||||||||||
502,407 | ||||||||||||||
|
|
28 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Pakistan 0.1% | ||||||||||||||
MCB Bank Ltd. | Banks | 10,473 | $ | 10,983 | ||||||||||
Oil & Gas Development Co. Ltd. | Oil, Gas & Consumable Fuels | 22,032 | 13,771 | |||||||||||
|
| |||||||||||||
24,754 | ||||||||||||||
|
| |||||||||||||
Philippines 0.6% | ||||||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 920 | 39,472 | |||||||||||
Manila Electric Co. | Electric Utilities | 6,080 | 33,986 | |||||||||||
Metro Pacific Investments Corp. | Diversified Financial Services | 172,000 | 12,382 | |||||||||||
PLDT Inc. | Wireless Telecommunication Services | 1,060 | 29,277 | |||||||||||
|
| |||||||||||||
115,117 | ||||||||||||||
|
| |||||||||||||
Poland 0.2% | ||||||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 3,788 | 44,921 | |||||||||||
|
| |||||||||||||
Qatar 2.0% | ||||||||||||||
Industries Qatar QSC | Industrial Conglomerates | 46,136 | 124,812 | |||||||||||
Masraf Al Rayan QSC | Banks | 74,088 | 84,649 | |||||||||||
Mesaieed Petrochemical Holding Co. | Chemicals | 90,328 | 51,577 | |||||||||||
Qatar Electricity & Water Co. QSC | Multi-Utilities | 13,560 | 62,902 | |||||||||||
Qatar Fuel QSC | Oil, Gas & Consumable Fuels | 10,812 | 52,560 | |||||||||||
Qatar International Islamic Bank QSC | Banks | 12,220 | 28,159 | |||||||||||
|
| |||||||||||||
404,659 | ||||||||||||||
|
| |||||||||||||
Russia 9.7% | ||||||||||||||
Alrosa PJSC | Metals & Mining | 93,848 | 89,215 | |||||||||||
Gazprom PJSC | Oil, Gas & Consumable Fuels | 72,412 | 159,519 | |||||||||||
Inter RAO UES PJSC | Electric Utilities | 1,258,932 | 91,012 | |||||||||||
LUKOIL PJSC | Oil, Gas & Consumable Fuels | 2,668 | 154,095 | |||||||||||
Magnitogorsk Iron & Steel Works | Metals & Mining | 74,120 | 36,873 | |||||||||||
MMC Norilsk Nickel PJSC | Metals & Mining | 640 | 155,115 | |||||||||||
Mobile TeleSystems PJSC, ADR | Wireless Telecommunication Services | 15,180 | 132,521 | |||||||||||
Moscow Exchange MICEX | Capital Markets | 29,240 | 55,152 | |||||||||||
NLMK PJSC | Metals & Mining | 43,188 | 95,558 | |||||||||||
a | Novatek PJSC, GDR, Reg S | Oil, Gas & Consumable Fuels | 1,304 | 178,648 | ||||||||||
a | PhosAgro PJSC, GDR, Reg S | Chemicals | 3,928 | 47,293 | ||||||||||
Polymetal International PLC | Metals & Mining | 6,076 | 133,090 | |||||||||||
Polyus Gold OJSC | Metals & Mining | 964 | 201,865 | |||||||||||
Rosneft PJSC | Oil, Gas & Consumable Fuels | 29,076 | 143,654 | |||||||||||
Severstal PAO | Metals & Mining | 8,968 | 114,548 | |||||||||||
Surgutneftegas PJSC | Oil, Gas & Consumable Fuels | 168,884 | 75,366 | |||||||||||
Tatneft PAO | Oil, Gas & Consumable Fuels | 25,592 | 152,362 | |||||||||||
|
| |||||||||||||
2,015,886 | ||||||||||||||
|
| |||||||||||||
Saudi Arabia 3.9% | ||||||||||||||
Abdullah Al Othaim Markets Co. | Food & Staples Retailing | 592 | 20,455 | |||||||||||
Advanced Petrochemical Co. | Chemicals | 2,540 | 40,021 | |||||||||||
Al-Rajhi Bank | Banks | 12,884 | 225,674 | |||||||||||
c | Bupa Arabia for Cooperative Insurance Co. | Insurance | 948 | 31,036 | ||||||||||
Jarir Marketing Co. | Specialty Retail | 1,520 | 75,941 | |||||||||||
Saudi Airlines Catering Co. | Hotels, Restaurants & Leisure | 1,072 | 23,607 | |||||||||||
Saudi Arabian Fertilizer Co. | Chemicals | 4,064 | 88,736 | |||||||||||
Saudi Cement Co. | Construction Materials | 1,496 | 23,173 | |||||||||||
Saudi Telecom Co. | Diversified Telecommunication Services | 7,352 | 196,790 | |||||||||||
Yanbu National Petrochemical Co. | Chemicals | 4,760 | 74,492 | |||||||||||
|
| |||||||||||||
799,925 | ||||||||||||||
|
| |||||||||||||
South Africa 3.2% | ||||||||||||||
AngloGold Ashanti Ltd. | Metals & Mining | 6,748 | 175,213 | |||||||||||
Clicks Group Ltd. | Food & Staples Retailing | 6,404 | 85,360 | |||||||||||
Exxaro Resources Ltd. | Oil, Gas & Consumable Fuels | 8,204 | 61,225 |
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
South Africa (continued) | ||||||||||||||
Kumba Iron Ore Ltd. | Metals & Mining | 2,524 | $ | 75,000 | ||||||||||
Mr. Price Group Ltd. | Specialty Retail | 8,004 | 63,346 | |||||||||||
Tiger Brands Ltd. | Food Products | 3,916 | 44,787 | |||||||||||
Vodacom Group Ltd. | Wireless Telecommunication Services | 17,760 | 131,252 | |||||||||||
Woolworths Holdings Ltd. | Multiline Retail | 17,176 | 36,298 | |||||||||||
|
| |||||||||||||
672,481 | ||||||||||||||
|
| |||||||||||||
South Korea 8.5% | ||||||||||||||
BGF Retail Co. Ltd. | Food & Staples Retailing | 156 | 16,474 | |||||||||||
BNK Financial Group Inc. | Banks | 7,268 | 31,446 | |||||||||||
Coway Co. Ltd. | Household Durables | 1,424 | 96,557 | |||||||||||
Daelim Industrial Co. Ltd. | Construction & Engineering | 580 | 38,386 | |||||||||||
Hana Financial Group Inc. | Banks | 8,344 | 200,484 | |||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | Insurance | 1,472 | 28,131 | |||||||||||
Industrial Bank of Korea | Banks | 7,496 | 51,341 | |||||||||||
KB Financial Group Inc. | Banks | 7,460 | 239,524 | |||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 160 | 51,509 | |||||||||||
KT&G Corp. | Tobacco | 3,032 | 213,627 | |||||||||||
Kumho Petrochemical Co. Ltd. | Chemicals | 368 | 34,613 | |||||||||||
NCSoft Corp. | Entertainment | 324 | 223,295 | |||||||||||
c | PearlAbyss Corp. | Entertainment | 132 | 22,822 | ||||||||||
S-1 Corp. | Commercial Services & Supplies | 408 | 30,526 | |||||||||||
Samsung Card Co. Ltd. | Consumer Finance | 597 | 14,395 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 4,096 | 203,837 | |||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 7,828 | 184,740 | |||||||||||
Woori Financial Group Inc. | Banks | 10,564 | 77,502 | |||||||||||
|
| |||||||||||||
1,759,209 | ||||||||||||||
|
| |||||||||||||
Taiwan 11.3% | ||||||||||||||
Accton Technology Corp. | Communications Equipment | 10,260 | 78,822 | |||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 7,435 | 74,704 | |||||||||||
Asia Cement Corp. | Construction Materials | 28,000 | 40,122 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 8,000 | 70,023 | |||||||||||
Catcher Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 15,280 | 95,757 | |||||||||||
Chicony Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 15,860 | 46,054 | |||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 51,880 | 191,670 | |||||||||||
Eclat Textile Co. Ltd. | Textiles, Apparel & Luxury Goods | 3,800 | 47,103 | |||||||||||
Far EasTone Telecommunications Co. Ltd. | Wireless Telecommunication Services | 36,000 | 75,823 | |||||||||||
Feng Tay Enterprise Co. Ltd. | Textiles, Apparel & Luxury Goods | 11,076 | 66,352 | |||||||||||
Globalwafers Co. Ltd. | Semiconductors & Semiconductor Equipment | 4,980 | 66,029 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 1,500 | 174,021 | |||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 44,000 | 70,037 | |||||||||||
Micro-Star International Co. Ltd. | Technology Hardware, Storage & Peripherals | 8,000 | 36,738 | |||||||||||
Nanya Technology Corp. | Semiconductors & Semiconductor Equipment | 32,210 | 63,948 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 4,500 | 53,372 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 15,200 | 139,341 | |||||||||||
Powertech Technology Inc. | Semiconductors & Semiconductor Equipment | 16,000 | 47,676 | |||||||||||
President Chain Store Corp. | Food & Staples Retailing | 13,460 | 122,228 | |||||||||||
Ruentex Development Co. Ltd. | Real Estate Management & Development | 16,000 | 21,490 | |||||||||||
Standard Foods Corp. | Food Products | 10,690 | 22,442 | |||||||||||
Synnex Technology International Corp. | Electronic Equipment, Instruments & Components | 16,000 | 22,816 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 92,201 | 131,798 | |||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 41,400 | 138,086 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 20,000 | 299,013 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 24,000 | 79,635 | |||||||||||
Walsin Technology Corp. | Electronic Equipment, Instruments & Components | 7,200 | 38,409 | |||||||||||
Wiwynn Corp. | Technology Hardware, Storage & Peripherals | 960 | 21,645 | |||||||||||
|
| |||||||||||||
2,335,154 | ||||||||||||||
|
|
30 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Thailand 1.8% | ||||||||||||||
Advanced Info Service PCL | Wireless Telecommunication Services | 32,800 | $ | 177,004 | ||||||||||
Bumrungrad Hospital PCL | Health Care Providers & Services | 10,400 | 31,262 | |||||||||||
Home Product Center PCL, NVDR | Specialty Retail | 95,600 | 43,444 | |||||||||||
Intouch Holdings PCL | Wireless Telecommunication Services | 62,000 | 100,276 | |||||||||||
Osotspa PCL, NVDR | Beverages | 14,000 | 15,463 | |||||||||||
|
| |||||||||||||
367,449 | ||||||||||||||
|
| |||||||||||||
Turkey 1.5% | ||||||||||||||
Aselsan Elektronik Sanayi ve Ticaret AS | Aerospace & Defense | 8,404 | 21,075 | |||||||||||
BIM Birlesik Magazalar AS | Food & Staples Retailing | 12,928 | 116,793 | |||||||||||
Eregli Demir ve Celik Fabrikalari AS | Metals & Mining | 44,636 | 54,809 | |||||||||||
Ford Otomotiv Sanayi AS | Automobiles | 2,320 | 26,349 | |||||||||||
Haci Omer Sabanci Holding AS | Diversified Financial Services | 12,624 | 13,633 | |||||||||||
Turkcell Iletisim Hizmetleri AS | Wireless Telecommunication Services | 28,252 | 55,740 | |||||||||||
c | Turkiye Is Bankasi AS, C | Banks | 38,608 | 26,811 | ||||||||||
|
| |||||||||||||
315,210 | ||||||||||||||
|
| |||||||||||||
United Arab Emirates 1.4% | ||||||||||||||
Aldar Properties PJSC | Real Estate Management & Development | 88,512 | 48,435 | |||||||||||
Dubai Islamic Bank PJSC | Banks | 42,400 | 49,867 | |||||||||||
Emirates Telecommunications Group Co. PJSC | Diversified Telecommunication Services | 44,624 | 202,397 | |||||||||||
|
| |||||||||||||
300,699 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $20,397,052) | 20,160,579 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 2.2% | ||||||||||||||
Brazil 1.5% | ||||||||||||||
e | Itausa SA, 3.443%, pfd. | Banks | 128,000 | 199,842 | ||||||||||
e | Telefonica Brasil SA, 7.759%, pfd. | Diversified Telecommunication Services | 12,809 | 98,673 | ||||||||||
|
| |||||||||||||
298,515 | ||||||||||||||
|
| |||||||||||||
Russia 0.5% | ||||||||||||||
e | Surgutneftegas PJSC, 2.469%, pfd. | Oil, Gas & Consumable Fuels | 200,072 | 101,298 | ||||||||||
|
| |||||||||||||
South Korea 0.2% | ||||||||||||||
e | LG Household & Health Care Ltd., 1.561%, pfd. | Personal Products | 28 | 16,951 | ||||||||||
e | Samsung Electronics Co. Ltd., 2.105%, pfd. | Technology Hardware, Storage & Peripherals | 752 | 32,472 | ||||||||||
|
| |||||||||||||
49,423 | ||||||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $553,090) | 449,236 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $20,950,142) | 20,609,815 | |||||||||||||
|
| |||||||||||||
Short Term Investments (Cost $67,200) 0.3% | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.3% | ||||||||||||||
Money Market Funds 0.3% | ||||||||||||||
f,g | Institutional Fiduciary Trust Money Market Portfolio, 0.00% | Money Market Funds | 67,200 | 67,200 | ||||||||||
|
| |||||||||||||
Total Investments | 20,677,015 | |||||||||||||
Other Assets, less Liabilities 0.3% | 54,343 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 20,731,358 | ||||||||||||
|
|
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Emerging Markets ETF (continued)
aSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $532,808, representing 2.6% of net assets.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $294,616, representing 1.4% of net assets.
cNon-income producing.
dA portion or all of the security is on loan at September 30, 2020.
eVariable rate security. The rate shown represents the yield at period end.
fSee Note 3(c) regarding investments in affiliated management investment companies.
gThe rate shown is the annualized seven-day effective yield at period end.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Index Contracts | ||||||||||||||||||||
MSCI Emerging Markets Index | Long | 1 | $ | 54,425 | 12/18/20 | $ | (497 | ) |
*As of period end.
See Abbreviations on Page 77.
32 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ Global Dividend ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 23.32 | $ | 28.20 | $ | 28.22 | $ | 27.31 | $ | 25.43 | ||||||||||
|
| |||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.47 | 1.04 | 0.95 | 0.86 | 0.67 | |||||||||||||||
Net realized and unrealized gains (losses) | 4.56 | (4.90 | ) | (0.02 | ) | 1.03 | 1.79 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 5.03 | (3.86 | ) | 0.93 | 1.89 | 2.46 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.56 | ) | (1.02 | ) | (0.95 | ) | (0.98 | ) | (0.58 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 27.79 | $ | 23.32 | $ | 28.20 | $ | 28.22 | $ | 27.31 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 21.58% | (14.34)% | 3.51% | 6.91% | 9.79% | |||||||||||||||
Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.45% | 0.45% | 0.45% | 0.75% | f | 0.98% | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.45% | 0.45% | 0.45% | 0.45% | f | 0.45% | ||||||||||||||
Net investment income | 3.56% | 3.60% | 3.43% | 3.05% | 3.11% | |||||||||||||||
Supplemental data |
| |||||||||||||||||||
Net assets, end of period (000’s) | $22,230 | $18,653 | $16,920 | $16,933 | $27,306 | |||||||||||||||
Portfolio turnover rateg | 20.98% | h | 19.79% | h | 25.75% | 43.32% | 13.38% |
aFor the period June 1, 2016 (commencement of operations) to March 31, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 20.98% | 17.48% | —% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 33 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin LibertyQ Global Dividend ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 98.2% | ||||||||||||||
Australia 8.6% | ||||||||||||||
Australian Stock Exchange Ltd. | Capital Markets | 2,708 | $ | 157,256 | ||||||||||
Commonwealth Bank of Australia | Banks | 9,944 | 453,371 | |||||||||||
Macquarie Group Ltd. | Capital Markets | 4,924 | 421,996 | |||||||||||
National Australia Bank Ltd. | Banks | 31,540 | 401,262 | |||||||||||
Westpac Banking Corp. | Banks | 38,904 | 469,574 | |||||||||||
|
| |||||||||||||
1,903,459 | ||||||||||||||
|
| |||||||||||||
Belgium 0.2% | ||||||||||||||
Proximus SADP | Diversified Telecommunication Services | 2,224 | 40,619 | |||||||||||
|
| |||||||||||||
Canada 6.2% | ||||||||||||||
Canadian Imperial Bank of Commerce | Banks | 4,884 | 363,919 | |||||||||||
IGM Financial Inc. | Capital Markets | 1,660 | 37,941 | |||||||||||
Royal Bank of Canada | Banks | 6,448 | 451,300 | |||||||||||
TELUS Corp. | Diversified Telecommunication Services | 4,164 | 73,039 | |||||||||||
The Toronto-Dominion Bank | Banks | 9,644 | 445,108 | |||||||||||
|
| |||||||||||||
1,371,307 | ||||||||||||||
|
| |||||||||||||
China 1.3% | ||||||||||||||
China Vanke Co. Ltd., A | Real Estate Management & Development | 6,400 | 26,425 | |||||||||||
China Vanke Co. Ltd., H | Real Estate Management & Development | 20,000 | 61,032 | |||||||||||
Far East Horizon Ltd. | Diversified Financial Services | 17,000 | 13,776 | |||||||||||
a,b | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 32,500 | 182,419 | ||||||||||
|
| |||||||||||||
283,652 | ||||||||||||||
|
| |||||||||||||
Denmark 0.4% | ||||||||||||||
Tryg AS | Insurance | 2,652 | 83,724 | |||||||||||
|
| |||||||||||||
Finland 2.6% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 2,164 | 127,591 | |||||||||||
Kone OYJ, B | Machinery | 5,040 | 443,617 | |||||||||||
|
| |||||||||||||
571,208 | ||||||||||||||
|
| |||||||||||||
Germany 2.6% | ||||||||||||||
Allianz SE | Insurance | 2,264 | 434,392 | |||||||||||
Hannover Rueck SE | Insurance | 880 | 136,421 | |||||||||||
|
| |||||||||||||
570,813 | ||||||||||||||
|
| |||||||||||||
Hong Kong 0.1% | ||||||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 22,000 | 25,548 | |||||||||||
|
| |||||||||||||
Indonesia 0.6% | ||||||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | Diversified Telecommunication Services | 710,000 | 122,151 | |||||||||||
|
| |||||||||||||
Japan 7.0% | ||||||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 1,700 | 150,137 | |||||||||||
KDDI Corp. | Wireless Telecommunication Services | 11,400 | 286,917 | |||||||||||
Lawson Inc. | Food & Staples Retailing | 530 | 25,212 | |||||||||||
MS&AD Insurance Group Holdings Inc. | Insurance | 4,200 | 112,393 | |||||||||||
Nomura Real Estate Holdings Inc. | Real Estate Management & Development | 800 | 15,116 | |||||||||||
NTT DOCOMO Inc. | Wireless Telecommunication Services | 13,700 | 504,354 | |||||||||||
ORIX Corp. | Diversified Financial Services | 15,100 | 186,729 | |||||||||||
Sekisui House Ltd. | Household Durables | 4,200 | 73,927 | |||||||||||
Tokio Marine Holdings Inc. | Insurance | 4,500 | 196,153 | |||||||||||
|
| |||||||||||||
1,550,938 | ||||||||||||||
|
| |||||||||||||
Macau 0.9% | ||||||||||||||
Sands China Ltd. | Hotels, Restaurants & Leisure | 54,000 | 207,987 | |||||||||||
|
|
34 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Dividend ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Mexico 0.1% | ||||||||||||||
Grupo Aeroportuario del Pacifico SAB de CV | Transportation Infrastructure | 2,752 | $ | 22,126 | ||||||||||
|
| |||||||||||||
New Zealand 0.4% | ||||||||||||||
Spark New Zealand Ltd. | Diversified Telecommunication Services | 28,568 | 88,752 | |||||||||||
|
| |||||||||||||
Philippines 0.0%† | ||||||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 220 | 9,439 | |||||||||||
|
| |||||||||||||
Qatar 2.1% | ||||||||||||||
Masraf Al Rayan QSC | Banks | 38,588 | 44,088 | |||||||||||
Qatar Islamic Bank SAQ | Banks | 14,936 | 67,686 | |||||||||||
Qatar National Bank SAQ | Banks | 71,736 | 358,582 | |||||||||||
|
| |||||||||||||
470,356 | ||||||||||||||
|
| |||||||||||||
Russia 0.7% | ||||||||||||||
NLMK PJSC | Metals & Mining | 16,516 | 36,543 | |||||||||||
Tatneft PAO | Oil, Gas & Consumable Fuels | 19,728 | 117,451 | |||||||||||
|
| |||||||||||||
153,994 | ||||||||||||||
|
| |||||||||||||
Saudi Arabia 0.6% | ||||||||||||||
Advanced Petrochemical Co. | Chemicals | 848 | 13,361 | |||||||||||
Jarir Marketing Co. | Specialty Retail | 576 | 28,778 | |||||||||||
National Commercial Bank | Banks | 9,952 | 98,567 | |||||||||||
|
| |||||||||||||
140,706 | ||||||||||||||
|
| |||||||||||||
Singapore 1.7% | ||||||||||||||
DBS Group Holdings Ltd. | Banks | 11,400 | 166,269 | |||||||||||
Singapore Telecommunications Ltd. | Diversified Telecommunication Services | 106,400 | 165,239 | |||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 3,600 | 50,739 | |||||||||||
|
| |||||||||||||
382,247 | ||||||||||||||
|
| |||||||||||||
South Africa 1.3% | ||||||||||||||
Absa Group Ltd. | Banks | 7,404 | 39,648 | |||||||||||
FirstRand Ltd. | Diversified Financial Services | 74,764 | 184,803 | |||||||||||
Mr. Price Group Ltd. | Specialty Retail | 4,972 | 39,350 | |||||||||||
Rand Merchant Investment Holdings Ltd. | Insurance | 11,396 | 19,834 | |||||||||||
|
| |||||||||||||
283,635 | ||||||||||||||
|
| |||||||||||||
South Korea 0.2% | ||||||||||||||
Coway Co. Ltd. | Household Durables | 508 | 34,446 | |||||||||||
|
| |||||||||||||
Spain 0.5% | ||||||||||||||
Bankinter SA | Banks | 7,960 | 34,322 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 4,640 | 87,139 | |||||||||||
|
| |||||||||||||
121,461 | ||||||||||||||
|
| |||||||||||||
Switzerland 6.2% | ||||||||||||||
Novartis AG | Pharmaceuticals | 4,568 | 397,310 | |||||||||||
Roche Holding AG | Pharmaceuticals | 1,084 | 371,834 | |||||||||||
SGS SA | Professional Services | 85 | 228,425 | |||||||||||
Zurich Insurance Group AG | Insurance | 1,108 | 386,760 | |||||||||||
|
| |||||||||||||
1,384,329 | ||||||||||||||
|
| |||||||||||||
Taiwan 3.4% | ||||||||||||||
Chailease Holding Co. Ltd. | Diversified Financial Services | 14,778 | 66,843 | |||||||||||
Feng Tay Enterprise Co. Ltd. | Textiles, Apparel & Luxury Goods | 7,032 | 42,126 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 40,000 | 598,025 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 13,000 | 43,136 | |||||||||||
|
| |||||||||||||
750,130 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Dividend ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Turkey 0.0%† | ||||||||||||||
Ford Otomotiv Sanayi AS | Automobiles | 841 | $ | 9,552 | ||||||||||
|
| |||||||||||||
United Kingdom 8.5% | ||||||||||||||
Barratt Developments PLC | Household Durables | 10,092 | 62,077 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 19,156 | 359,586 | |||||||||||
Kingfisher PLC | Specialty Retail | 19,620 | 75,257 | |||||||||||
Legal & General Group PLC | Insurance | 79,580 | 193,776 | |||||||||||
Schroders PLC | Capital Markets | 1,340 | 46,687 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 4,404 | 78,286 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | 4,360 | 52,477 | |||||||||||
Taylor Wimpey PLC | Household Durables | 45,616 | 63,956 | |||||||||||
Unilever NV | Personal Products | 8,024 | 484,581 | |||||||||||
Unilever PLC | Personal Products | 7,712 | 476,171 | |||||||||||
|
| |||||||||||||
1,892,854 | ||||||||||||||
|
| |||||||||||||
United States 42.0% | ||||||||||||||
Altria Group Inc. | Tobacco | 10,520 | 406,493 | |||||||||||
American Financial Group Inc. | Insurance | 480 | 32,150 | |||||||||||
Cisco Systems Inc. | Communications Equipment | 8,720 | 343,481 | |||||||||||
Cummins Inc. | Machinery | 1,804 | 380,933 | |||||||||||
Darden Restaurants Inc. | Hotels, Restaurants & Leisure | 2,284 | 230,090 | |||||||||||
Emerson Electric Co. | Electrical Equipment | 6,988 | 458,203 | |||||||||||
Garmin Ltd. | Household Durables | 2,460 | 233,356 | |||||||||||
Intel Corp. | Semiconductors & Semiconductor Equipment | 6,460 | 334,499 | |||||||||||
International Business Machines Corp. | IT Services | 3,236 | 393,724 | |||||||||||
Johnson & Johnson | Pharmaceuticals | 2,612 | 388,875 | |||||||||||
Kimberly-Clark Corp. | Household Products | 2,880 | 425,261 | |||||||||||
Las Vegas Sands Corp. | Hotels, Restaurants & Leisure | 5,520 | 257,563 | |||||||||||
LyondellBasell Industries NV, A | Chemicals | 4,680 | 329,893 | |||||||||||
Maxim Integrated Products Inc. | Semiconductors & Semiconductor Equipment | 5,756 | 389,163 | |||||||||||
McDonald’s Corp. | Hotels, Restaurants & Leisure | 2,168 | 475,854 | |||||||||||
Merck & Co. Inc. | Pharmaceuticals | 5,020 | 416,409 | |||||||||||
Packaging Corp. of America | Containers & Packaging | 660 | 71,973 | |||||||||||
Paychex Inc. | IT Services | 5,792 | 462,028 | |||||||||||
Philip Morris International Inc. | Tobacco | 5,688 | 426,543 | |||||||||||
QUALCOMM Inc. | Semiconductors & Semiconductor Equipment | 4,984 | 586,517 | |||||||||||
Seagate Technology PLC | Technology Hardware, Storage & Peripherals | 4,392 | 216,394 | |||||||||||
Target Corp. | Multiline Retail | 3,160 | 497,447 | |||||||||||
The Coca-Cola Co. | Beverages | 8,740 | 431,494 | |||||||||||
The Procter & Gamble Co. | Household Products | 3,460 | 480,905 | |||||||||||
United Parcel Service Inc., B | Air Freight & Logistics | 4,040 | 673,185 | |||||||||||
|
| |||||||||||||
9,342,433 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $22,460,383) | 21,817,866 | |||||||||||||
|
| |||||||||||||
Preferred Stocks (Cost $428,377) 1.3% | ||||||||||||||
Brazil 1.3% | ||||||||||||||
c | Itau Unibanco Holding SA, 5.676%, pfd. | Banks | 73,600 | 293,802 | ||||||||||
|
| |||||||||||||
Total Investments | 22,111,668 | |||||||||||||
Other Assets, less Liabilities 0.5% | 118,121 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 22,229,789 | ||||||||||||
|
|
36 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Dividend ETF (continued)
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $182,419, representing 0.8% of net assets.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $182,419, representing 0.8% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
MSCI All Country World Index | Long | 2 | $ | 57,530 | 12/18/20 | $ | (1,348 | ) |
*As of period end.
See Abbreviations on Page 77.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 37 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ Global Equity ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 26.77 | $ | 30.90 | $ | 30.14 | $ | 27.18 | $ | 25.32 | ||||||||||
|
| |||||||||||||||||||
Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.41 | 0.90 | 0.89 | 0.74 | 0.56 | |||||||||||||||
Net realized and unrealized gains (losses) | 6.01 | (4.00 | ) | 0.67 | 3.01 | 1.92 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 6.42 | (3.10 | ) | 1.56 | 3.75 | 2.48 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.43 | ) | (1.03 | ) | (0.80 | ) | (0.79 | ) | (0.62 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 32.76 | $ | 26.77 | $ | 30.90 | $ | 30.14 | $ | 27.18 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 24.11% | (10.53)% | 5.44% | 13.91% | 9.95% | |||||||||||||||
Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.35% | 0.35% | 0.35% | 0.90% | f | 1.04% | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.34% | 0.34% | 0.34% | 0.35% | f | 0.35% | ||||||||||||||
Net investment income | 2.63% | 2.86% | 2.99% | 2.53% | 2.60% | |||||||||||||||
Supplemental data |
| |||||||||||||||||||
Net assets, end of period (000’s) | $13,105 | $16,059 | $24,721 | $18,082 | $21,744 | |||||||||||||||
Portfolio turnover rateg | 19.01% | h | 27.85% | h | 34.99% | 35.01% | 13.84% |
aFor the period June 1, 2016 (commencement of operations) to March 31, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 19.01% | 27.85% | —% | —% | —% |
38 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin LibertyQ Global Equity ETF
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests 97.8% | ||||||||||||||
Australia 4.9% | ||||||||||||||
AGL Energy Ltd. | Multi-Utilities | 770 | $ | 7,517 | ||||||||||
Aurizon Holdings Ltd. | Road & Rail | 2,360 | 7,189 | |||||||||||
BHP Group Ltd. | Metals & Mining | 4,042 | 103,137 | |||||||||||
Bluescope Steel Ltd. | Metals & Mining | 540 | 4,915 | |||||||||||
Brambles Ltd. | Commercial Services & Supplies | 1,870 | 14,060 | |||||||||||
a | Cimic Group Ltd. | Construction & Engineering | 98 | 1,303 | ||||||||||
Coca-Cola Amatil Ltd. | Beverages | 556 | 3,786 | |||||||||||
Cochlear Ltd. | Health Care Equipment & Supplies | 90 | 12,773 | |||||||||||
Coles Group Ltd. | Food & Staples Retailing | 1,582 | 19,276 | |||||||||||
Crown Resorts Ltd. | Hotels, Restaurants & Leisure | 502 | 3,163 | |||||||||||
CSL Ltd. | Biotechnology | 580 | 119,310 | |||||||||||
Evolution Mining Ltd. | Metals & Mining | 1,120 | 4,616 | |||||||||||
Fortescue Metals Group Ltd. | Metals & Mining | 3,312 | 38,694 | |||||||||||
Magellan Financial Group Ltd. | Capital Markets | 154 | 6,252 | |||||||||||
Medibank Private Ltd. | Insurance | 4,264 | 7,671 | |||||||||||
Newcrest Mining Ltd. | Metals & Mining | 622 | 13,927 | |||||||||||
Northern Star Resources Ltd. | Metals & Mining | 498 | 4,869 | |||||||||||
a | Qantas Airways Ltd. | Airlines | 610 | 1,771 | ||||||||||
REA Group Ltd. | Interactive Media & Services | 76 | 5,990 | |||||||||||
Rio Tinto Ltd. | Metals & Mining | 600 | 40,562 | |||||||||||
Rio Tinto PLC | Metals & Mining | 1,708 | 102,798 | |||||||||||
Sonic Healthcare Ltd. | Health Care Providers & Services | 494 | 11,741 | |||||||||||
Telstra Corp. Ltd. | Diversified Telecommunication Services | 5,554 | 11,067 | |||||||||||
Wesfarmers Ltd. | Multiline Retail | 1,568 | 49,922 | |||||||||||
Woolworths Group Ltd. | Food & Staples Retailing | 1,650 | 43,084 | |||||||||||
|
| |||||||||||||
639,393 | ||||||||||||||
|
| |||||||||||||
Belgium 0.1% | ||||||||||||||
Colruyt SA | Food & Staples Retailing | 82 | 5,323 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 224 | 4,091 | |||||||||||
|
| |||||||||||||
9,414 | ||||||||||||||
|
| |||||||||||||
Brazil 0.4% | ||||||||||||||
Ambev SA | Beverages | 4,400 | 9,789 | |||||||||||
BB Seguridade Participacoes SA | Insurance | 1,600 | 6,889 | |||||||||||
Cielo SA | IT Services | 1,400 | 976 | |||||||||||
Engie Brasil Energia SA | Independent Power and Renewable Electricity Producers | 200 | 1,432 | |||||||||||
Hypera SA | Pharmaceuticals | 400 | 2,116 | |||||||||||
TIM Participacoes SA | Wireless Telecommunication Services | 1,200 | 2,781 | |||||||||||
Vale SA | Metals & Mining | 3,200 | 33,559 | |||||||||||
|
| |||||||||||||
57,542 | ||||||||||||||
|
| |||||||||||||
Canada 2.6% | ||||||||||||||
Algonquin Power & Utilities Corp. | Multi-Utilities | 524 | 7,587 | |||||||||||
B2Gold Corp. | Metals & Mining | 750 | 4,868 | |||||||||||
BCE Inc. | Diversified Telecommunication Services | 194 | 8,020 | |||||||||||
Canadian Apartment Properties REIT | Equity Real Estate Investment Trusts (REITs | ) | 68 | 2,365 | ||||||||||
Canadian National Railway Co. | Road & Rail | 810 | 85,994 | |||||||||||
a | CGI Inc., A | IT Services | 242 | 16,374 | ||||||||||
CI Financial Corp. | Capital Markets | 250 | 3,161 | |||||||||||
Constellation Software Inc. | Software | 26 | 28,801 | |||||||||||
Empire Co. Ltd., A | Food & Staples Retailing | 186 | 5,382 | |||||||||||
First Capital Real Estate Investment Trust | Equity Real Estate Investment Trusts (REITs | ) | 140 | 1,358 | ||||||||||
Franco-Nevada Corp. | Metals & Mining | 180 | 25,074 | |||||||||||
Gildan Activewear Inc. | Textiles, Apparel & Luxury Goods | 218 | 4,283 | |||||||||||
Hydro One Ltd. | Electric Utilities | 346 | 7,310 | |||||||||||
IGM Financial Inc. | Capital Markets | 60 | 1,371 | |||||||||||
Keyera Corp. | Oil, Gas & Consumable Fuels | 126 | 1,896 |
franklintempleton.com | Semiannual Report | 39 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Canada (continued) | ||||||||||||||
Kirkland Lake Gold Ltd. | Metals & Mining | 314 | $ | 15,280 | ||||||||||
Magna International Inc. | Auto Components | 418 | 19,067 | |||||||||||
Metro Inc., A | Food & Staples Retailing | 352 | 16,836 | |||||||||||
Power Corp. of Canada | Insurance | 524 | 10,235 | |||||||||||
Quebecor Inc., B | Media | 154 | 3,840 | |||||||||||
RioCan Real Estate Investment Trust | Equity Real Estate Investment Trusts (REITs | ) | 170 | 1,789 | ||||||||||
Rogers Communications Inc., B | Wireless Telecommunication Services | 376 | 14,868 | |||||||||||
Saputo Inc. | Food Products | 274 | 6,851 | |||||||||||
Shaw Communications Inc., B | Media | 346 | 6,294 | |||||||||||
SmartCentres Real Estate Investment Trust | Equity Real Estate Investment Trusts (REITs | ) | 76 | 1,138 | ||||||||||
Teck Resources Ltd., B | Metals & Mining | 500 | 6,940 | |||||||||||
TELUS Corp. | Diversified Telecommunication Services | 434 | 7,613 | |||||||||||
Wheaton Precious Metals Corp. | Metals & Mining | 388 | 18,977 | |||||||||||
|
| |||||||||||||
333,572 | ||||||||||||||
|
| |||||||||||||
Chile 0.1% | ||||||||||||||
Aguas Andinas SA, A | Water Utilities | 2,260 | 631 | |||||||||||
Colbun SA | Independent Power and Renewable Electricity Producers | 8,182 | 1,318 | |||||||||||
Compania Cervecerias Unidas SA | Beverages | 304 | 1,957 | |||||||||||
Enel Americas SA | Electric Utilities | 33,256 | 4,306 | |||||||||||
Enel Chile SA | Electric Utilities | 32,890 | 2,300 | |||||||||||
|
| |||||||||||||
10,512 | ||||||||||||||
|
| |||||||||||||
China 3.7% | ||||||||||||||
Agricultural Bank of China Ltd., H | Banks | 40,000 | 12,490 | |||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 400 | 3,257 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 1,670 | 11,485 | |||||||||||
BAIC Motor Corp. Ltd., H | Automobiles | 4,000 | 1,626 | |||||||||||
Bank of China Ltd., A | Banks | 3,200 | 1,509 | |||||||||||
Bank of China Ltd., H | Banks | 108,000 | 33,445 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 2,000 | 1,338 | |||||||||||
Bank of Communications Co. Ltd., H | Banks | 12,000 | 5,760 | |||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 800 | 588 | |||||||||||
Chaozhou Three-Circle Group Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 851 | |||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 12,000 | 2,245 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 14,000 | 5,401 | |||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 2,000 | 9,264 | |||||||||||
China Construction Bank Corp., H | Banks | 100,000 | 64,774 | |||||||||||
China Everbright Bank Co. Ltd., H | Banks | 8,000 | 2,519 | |||||||||||
China Hongqiao Group Ltd. | Metals & Mining | 2,000 | 1,246 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 2,000 | 2,201 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 10,000 | 5,239 | |||||||||||
China Mobile Ltd. | Wireless Telecommunication Services | 7,840 | 50,024 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 2,000 | 2,524 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 2,000 | 5,652 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 1,400 | 807 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 28,000 | 11,236 | |||||||||||
China Railway Group Ltd., H | Construction & Engineering | 2,000 | 939 | |||||||||||
China Reinsurance Group Corp., H | Insurance | 8,000 | 733 | |||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 4,000 | 5,461 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 400 | 971 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 5,000 | 8,968 | |||||||||||
China South Publishing & Media Group Co. Ltd., A | Media | 200 | 320 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 1,600 | 2,432 |
40 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
China Telecom Corp. Ltd., H | Diversified Telecommunication Services | 12,000 | $ | 3,592 | ||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 2,000 | 5,638 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., H | Banks | 4,000 | 1,471 | |||||||||||
CNOOC Ltd. | Oil, Gas & Consumable Fuels | 18,000 | 17,303 | |||||||||||
Country Garden Services Holdings Co. Ltd. | Commercial Services & Supplies | 1,000 | 6,432 | |||||||||||
Dali Foods Group Co. Ltd. | Food Products | 6,000 | 3,662 | |||||||||||
Daqin Railway Co. Ltd., A | Road & Rail | 2,200 | 2,065 | |||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 4,000 | 2,483 | |||||||||||
East Money Information Co. Ltd. | Capital Markets | 400 | 1,414 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 2,060 | 2,450 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 240 | 5,733 | |||||||||||
Fujian Sunner Development Co. Ltd. | Food Products | 400 | 1,290 | |||||||||||
Fuyao Group Glass Industries Co. Ltd., H | Auto Components | 800 | 2,932 | |||||||||||
Great Wall Motor Co. Ltd., H | Automobiles | 2,000 | 2,537 | |||||||||||
Gree Electric Appliances Inc. of Zhuhai | Household Durables | 200 | 1,571 | |||||||||||
a | GSX Techedu Inc., ADR | Diversified Consumer Services | 52 | 4,686 | ||||||||||
Guangdong Investment Ltd. | Water Utilities | 4,000 | 6,328 | |||||||||||
Guangzhou Automobile Group Co. Ltd., H | Automobiles | 4,000 | 3,329 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 400 | 1,927 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 400 | 1,090 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 400 | 3,120 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 200 | 741 | |||||||||||
Huayu Automotive Systems Co. Ltd. | Auto Components | 200 | 734 | |||||||||||
Hubei Jumpcan Pharmaceutical Co. Ltd., A | Pharmaceuticals | 200 | 653 | |||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 400 | 290 | |||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 66,000 | 34,235 | |||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 400 | 2,269 | |||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 2,000 | 2,013 | |||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 67 | 16,473 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 2,000 | 1,445 | |||||||||||
Lomon Billions Group Co. Ltd. | Chemicals | 600 | 2,059 | |||||||||||
b,c | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 2,000 | 11,226 | ||||||||||
Luenmei Quantum Co. Ltd., A | Water Utilities | 600 | 1,141 | |||||||||||
Luzhou Laojiao Co. Ltd., A | Beverages | 200 | 4,231 | |||||||||||
Muyuan Foods Co. Ltd. | Food Products | 170 | 1,854 | |||||||||||
NanJi E-Commerce Co. Ltd. | Media | 400 | 1,017 | |||||||||||
NetEase Inc., ADR | Entertainment | 38 | 17,277 | |||||||||||
New Hope Liuhe Co. Ltd. | Food Products | 400 | 1,633 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 2,000 | 2,508 | |||||||||||
Postal Savings Bank of China Co. Ltd., H | Banks | 8,000 | 3,355 | |||||||||||
SAIC Motor Corp Ltd. | Automobiles | 400 | 1,127 | |||||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 800 | 989 | |||||||||||
Shandong Buchang Pharmaceuticals Co. Ltd., A | Pharmaceuticals | 400 | 1,468 | |||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 200 | 722 | |||||||||||
Shengyi Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 200 | 687 | |||||||||||
Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 400 | 2,032 | |||||||||||
Sichuan Chuantou Energy Co Ltd. | Independent Power and Renewable Electricity Producers | 600 | 867 | |||||||||||
Sino-Ocean Land Holdings Ltd. | Real Estate Management & Development | 6,000 | 1,208 |
franklintempleton.com | Semiannual Report | 41 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., A | Chemicals | 1,200 | $ | 589 | ||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., H | Chemicals | 8,000 | 1,455 | |||||||||||
Wanhua Chemical Group Co. Ltd., A | Chemicals | 200 | 2,042 | |||||||||||
Weichai Power Co. Ltd., A | Machinery | 400 | 890 | |||||||||||
Wens Foodstuffs Group Co. Ltd. | Food Products | 720 | 2,073 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 200 | 1,170 | |||||||||||
Wuliangye Yibin Co. Ltd., A | Beverages | 200 | 6,513 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 4,000 | 2,973 | |||||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 8,000 | 1,559 | |||||||||||
Yunda Holding Co. Ltd. | Air Freight & Logistics | 260 | 718 | |||||||||||
Yuzhou Group Holdings Co. Ltd. | Real Estate Management & Development | 4,000 | 1,579 | |||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 400 | 1,756 | |||||||||||
Zhejiang Semir Garment Co. Ltd. | Textiles, Apparel & Luxury Goods | 600 | 710 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd. | Building Products | 400 | 942 | |||||||||||
ZTO Express Cayman Inc., ADR | Air Freight & Logistics | 200 | 5,984 | |||||||||||
|
| |||||||||||||
481,565 | ||||||||||||||
|
| |||||||||||||
Colombia 0.0%† | ||||||||||||||
Ecopetrol SA | Oil, Gas & Consumable Fuels | 5,880 | 2,891 | |||||||||||
|
| |||||||||||||
Denmark 1.4% | ||||||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 208 | 32,882 | |||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 1,790 | 123,892 | |||||||||||
Novozymes AS | Chemicals | 116 | 7,308 | |||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 190 | 13,700 | |||||||||||
Tryg AS | Insurance | 92 | 2,904 | |||||||||||
�� |
|
| ||||||||||||
180,686 | ||||||||||||||
|
| |||||||||||||
Egypt 0.1% | ||||||||||||||
Commercial International Bank Egypt SAE | Banks | 1,196 | 5,051 | |||||||||||
Eastern Co. SAE | Tobacco | 1,924 | 1,471 | |||||||||||
ElSewedy Electric Co. | Electrical Equipment | 1,834 | 798 | |||||||||||
|
| |||||||||||||
7,320 | ||||||||||||||
|
| |||||||||||||
Finland 0.3% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 190 | 11,203 | |||||||||||
Kone OYJ, B | Machinery | 186 | 16,371 | |||||||||||
Orion OYJ | Pharmaceuticals | 148 | 6,711 | |||||||||||
UPM-Kymmene OYJ | Paper & Forest Products | 260 | 7,924 | |||||||||||
|
| |||||||||||||
42,209 | ||||||||||||||
|
| |||||||||||||
France 0.5% | ||||||||||||||
Biomerieux | Health Care Equipment & Supplies | 26 | 4,079 | |||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 42 | 36,259 | |||||||||||
a | Peugeot SA | Automobiles | 700 | 12,723 | ||||||||||
Publicis Groupe | Media | 113 | 3,655 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 16 | 5,527 | |||||||||||
Unibail-Rodamco-Westfield | Equity Real Estate Investment Trusts (REITs | ) | 70 | 2,586 | ||||||||||
|
| |||||||||||||
64,829 | ||||||||||||||
|
| |||||||||||||
Germany 0.0%† | ||||||||||||||
Hochtief AG | Construction & Engineering | 6 | 468 | |||||||||||
|
| |||||||||||||
Greece 0.1% | ||||||||||||||
Hellenic Telecommunications Organization SA | Diversified Telecommunication Services | 140 | 2,021 | |||||||||||
JUMBO SA | Specialty Retail | 132 | 2,322 | |||||||||||
Motor Oil (Hellas) Corinth Refineries SA | Oil, Gas & Consumable Fuels | 52 | 613 |
42 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Greece (continued) | ||||||||||||||
OPAP SA | Hotels, Restaurants & Leisure | 190 | $ | 1,804 | ||||||||||
|
| |||||||||||||
6,760 | ||||||||||||||
|
| |||||||||||||
Hong Kong 0.3% | ||||||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 2,000 | 9,742 | |||||||||||
HKT Trust and HKT Ltd. | Diversified Telecommunication Services | 4,000 | 5,295 | |||||||||||
Jardine Matheson Holdings Ltd. | Industrial Conglomerates | 200 | 7,936 | |||||||||||
Kerry Properties Ltd. | Real Estate Management & Development | 2,000 | 5,104 | |||||||||||
Kingboard Laminates Holdings Ltd. | Chemicals | 3,000 | 4,103 | |||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 1,000 | 5,239 | |||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 2,000 | 2,323 | |||||||||||
|
| |||||||||||||
39,742 | ||||||||||||||
|
| |||||||||||||
India 0.4% | ||||||||||||||
Infosys Ltd., ADR | IT Services | 3,468 | 47,893 | |||||||||||
|
| |||||||||||||
Indonesia 0.2% | ||||||||||||||
Adaro Energy Tbk PT | Oil, Gas & Consumable Fuels | 12,800 | 976 | |||||||||||
Charoen Pokphand Indonesia Tbk PT | Food Products | 7,600 | 2,899 | |||||||||||
a | Gudang Garam Tbk PT | Tobacco | 400 | 1,077 | ||||||||||
Hanjaya Mandala Sampoerna Tbk PT | Tobacco | 16,600 | 1,562 | |||||||||||
Indofood CBP Sukses Makmur Tbk PT | Food Products | 2,200 | 1,490 | |||||||||||
Indofood Sukses Makmur Tbk PT | Food Products | 2,200 | 1,057 | |||||||||||
Kalbe Farma Tbk PT | Pharmaceuticals | 20,000 | 2,083 | |||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | Diversified Telecommunication Services | 62,200 | 10,701 | |||||||||||
Unilever Indonesia Tbk PT | Household Products | 12,000 | 6,532 | |||||||||||
United Tractors Tbk PT | Oil, Gas & Consumable Fuels | 1,800 | 2,758 | |||||||||||
|
| |||||||||||||
31,135 | ||||||||||||||
|
| |||||||||||||
Israel 0.2% | ||||||||||||||
Azrieli Group Ltd. | Real Estate Management & Development | 44 | 1,968 | |||||||||||
a | Check Point Software Technologies Ltd. | Software | 160 | 19,255 | ||||||||||
ICL Group Ltd. | Chemicals | 848 | 3,005 | |||||||||||
|
| |||||||||||||
24,228 | ||||||||||||||
|
| |||||||||||||
Italy 0.9% | ||||||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 22 | 4,435 | |||||||||||
Enel SpA | Electric Utilities | 7,820 | 68,024 | |||||||||||
Ferrari NV | Automobiles | 118 | 21,676 | |||||||||||
b | Infrastrutture Wireless Italiane SpA, Reg S | Diversified Telecommunication Services | 126 | 1,395 | ||||||||||
a | Moncler SpA | Textiles, Apparel & Luxury Goods | 242 | 9,927 | ||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 120 | 6,155 | |||||||||||
Snam SpA | Gas Utilities | 1,960 | 10,087 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 1,042 | 421 | |||||||||||
|
| |||||||||||||
122,120 | ||||||||||||||
|
| |||||||||||||
Japan 5.7% | ||||||||||||||
ABC-Mart Inc. | Specialty Retail | 50 | 2,592 | |||||||||||
Advantest Corp. | Semiconductors & Semiconductor Equipment | 200 | 9,647 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 2,400 | 35,637 | |||||||||||
Bandai Namco Holdings Inc. | Leisure Products | 200 | 14,572 | |||||||||||
Bridgestone Corp. | Auto Components | 700 | 22,002 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 420 | 18,765 | |||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 100 | 8,832 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 600 | 15,337 | |||||||||||
Hitachi Ltd. | Electronic Equipment, Instruments & Components | 600 | 20,144 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 470 | 52,821 | |||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 1,800 | 45,797 |
franklintempleton.com | Semiannual Report | 43 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
a | Japan Airlines Co. Ltd. | Airlines | 200 | $ | 3,726 | |||||||||
Japan Post Bank Co. Ltd. | Banks | 600 | 4,668 | |||||||||||
Japan Tobacco Inc. | Tobacco | 1,600 | 29,110 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 200 | 5,244 | |||||||||||
KAO Corp. | Personal Products | 507 | 37,892 | |||||||||||
KDDI Corp. | Wireless Telecommunication Services | 2,500 | 62,921 | |||||||||||
Marubeni Corp. | Trading Companies & Distributors | 1,600 | 9,014 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 200 | 3,688 | |||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 100 | 4,946 | |||||||||||
MS&AD Insurance Group Holdings Inc. | Insurance | 200 | 5,352 | |||||||||||
Nexon Co. Ltd. | Entertainment | 600 | 14,908 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 60 | 33,920 | |||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 2,000 | 40,747 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 40 | 8,282 | |||||||||||
NTT DOCOMO Inc. | Wireless Telecommunication Services | 2,000 | 73,628 | |||||||||||
Obayashi Corp. | Construction & Engineering | 800 | 7,240 | |||||||||||
OBIC Co. Ltd. | IT Services | 40 | 6,989 | |||||||||||
Oracle Corp. Japan | Software | 50 | 5,363 | |||||||||||
Sekisui House Ltd. | Household Durables | 800 | 14,081 | |||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 300 | 16,002 | |||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 400 | 3,730 | |||||||||||
Showa Denko K.K. | Chemicals | 100 | 1,821 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 1,800 | 20,084 | |||||||||||
Subaru Corp. | Automobiles | 800 | 15,404 | |||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 180 | 46,616 | |||||||||||
Tosoh Corp. | Chemicals | 400 | 6,463 | |||||||||||
Tsuruha Holdings Inc. | Food & Staples Retailing | 20 | 2,826 | |||||||||||
USS Co. Ltd. | Specialty Retail | 200 | 3,561 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 200 | 5,549 | |||||||||||
|
| |||||||||||||
739,921 | ||||||||||||||
|
| |||||||||||||
Macau 0.2% | ||||||||||||||
Galaxy Entertainment Group Ltd. | Hotels, Restaurants & Leisure | 2,000 | 13,407 | |||||||||||
Sands China Ltd. | Hotels, Restaurants & Leisure | 3,200 | 12,325 | |||||||||||
|
| |||||||||||||
25,732 | ||||||||||||||
|
| |||||||||||||
Malaysia 0.3% | ||||||||||||||
Digi.com Bhd. | Wireless Telecommunication Services | 4,800 | 4,655 | |||||||||||
Fraser & Neave Holdings Bhd. | Beverages | 400 | 3,090 | |||||||||||
Hartalega Holdings Bhd. | Health Care Equipment & Supplies | 2,000 | 7,797 | |||||||||||
Nestle (Malaysia) Bhd. | Food Products | 140 | 4,764 | |||||||||||
Petronas Chemicals Group Bhd. | Chemicals | 3,200 | 4,320 | |||||||||||
Petronas Dagangan Bhd. | Oil, Gas & Consumable Fuels | 200 | 950 | |||||||||||
Petronas Gas Bhd. | Gas Utilities | 800 | 3,161 | |||||||||||
Top Glove Corp. Bhd. | Health Care Equipment & Supplies | 2,400 | 4,794 | |||||||||||
Westports Holdings Bhd. | Transportation Infrastructure | 1,800 | 1,672 | |||||||||||
|
| |||||||||||||
35,203 | ||||||||||||||
|
| |||||||||||||
Mexico 0.2% | ||||||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 3,432 | 2,719 | ||||||||||
Grupo Aeroportuario del Pacifico SAB de CV | Transportation Infrastructure | 436 | 3,505 | |||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 1,672 | 4,260 | |||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 1,818 | 2,891 | |||||||||||
Megacable Holdings SAB de CV | Media | 290 | 836 | |||||||||||
Wal-Mart de Mexico SAB de CV, V | Food & Staples Retailing | 6,706 | 16,115 | |||||||||||
|
| |||||||||||||
30,326 | ||||||||||||||
|
|
44 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Netherlands 0.4% | ||||||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 1,334 | $ | 39,499 | ||||||||||
Koninklijke Vopak NV | Oil, Gas & Consumable Fuels | 40 | 2,254 | |||||||||||
NN Group NV | Insurance | 108 | 4,059 | |||||||||||
45,812 | ||||||||||||||
New Zealand 0.2% | ||||||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | Health Care Equipment & Supplies | 822 | 18,077 | |||||||||||
Spark New Zealand Ltd. | Diversified Telecommunication Services | 2,950 | 9,165 | |||||||||||
a | The a2 Milk Co Ltd. | Food Products | 444 | 4,502 | ||||||||||
|
| |||||||||||||
31,744 | ||||||||||||||
|
| |||||||||||||
Norway 0.2% | ||||||||||||||
Mowi ASA | Food Products | 532 | 9,430 | |||||||||||
Orkla ASA | Food Products | 732 | 7,384 | |||||||||||
Telenor ASA | Diversified Telecommunication Services | 822 | 13,744 | |||||||||||
|
| |||||||||||||
30,558 | ||||||||||||||
|
| |||||||||||||
Pakistan 0.0%† | ||||||||||||||
Oil & Gas Development Co. Ltd. | Oil, Gas & Consumable Fuels | 1,400 | 875 | |||||||||||
|
| |||||||||||||
Philippines 0.0%† | ||||||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 50 | 2,145 | |||||||||||
Manila Electric Co. | Electric Utilities | 420 | 2,348 | |||||||||||
PLDT Inc. | Wireless Telecommunication Services | 40 | 1,105 | |||||||||||
|
| |||||||||||||
5,598 | ||||||||||||||
|
| |||||||||||||
Poland 0.0%† | ||||||||||||||
a | PGE Polska Grupa Energetyczna SA | Electric Utilities | 386 | 641 | ||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 180 | 2,135 | |||||||||||
|
| |||||||||||||
2,776 | ||||||||||||||
|
| |||||||||||||
Portugal 0.0%† | ||||||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 300 | 4,821 | |||||||||||
|
| |||||||||||||
Qatar 0.2% | ||||||||||||||
Industries Qatar QSC | Industrial Conglomerates | 2,394 | 6,476 | |||||||||||
Masraf Al Rayan QSC | Banks | 2,934 | 3,352 | |||||||||||
Mesaieed Petrochemical Holding Co. | Chemicals | 4,942 | 2,822 | |||||||||||
Qatar Electricity & Water Co. QSC | Multi-Utilities | 690 | 3,201 | |||||||||||
Qatar Fuel QSC | Oil, Gas & Consumable Fuels | 600 | 2,917 | |||||||||||
Qatar International Islamic Bank QSC | Banks | 280 | 645 | |||||||||||
|
| |||||||||||||
19,413 | ||||||||||||||
|
| |||||||||||||
Russia 1.5% | ||||||||||||||
Alrosa PJSC | Metals & Mining | 4,724 | 4,491 | |||||||||||
Evraz PLC | Metals & Mining | 742 | 3,306 | |||||||||||
Gazprom PJSC | Oil, Gas & Consumable Fuels | 17,972 | 39,591 | |||||||||||
Inter RAO UES PJSC | Electric Utilities | 67,068 | 4,848 | |||||||||||
LUKOIL PJSC | Oil, Gas & Consumable Fuels | 678 | 39,159 | |||||||||||
Magnitogorsk Iron & Steel Works | Metals & Mining | 3,628 | 1,805 | |||||||||||
MMC Norilsk Nickel PJSC | Metals & Mining | 120 | 29,084 | |||||||||||
Mobile TeleSystems PJSC, ADR | Wireless Telecommunication Services | 694 | 6,059 | |||||||||||
Moscow Exchange MICEX | Capital Markets | 556 | 1,049 | |||||||||||
NLMK PJSC | Metals & Mining | 2,104 | 4,655 | |||||||||||
b | Novatek PJSC, GDR, Reg S | Oil, Gas & Consumable Fuels | 118 | 16,166 | ||||||||||
b | PhosAgro PJSC, GDR, Reg S | Chemicals | 146 | 1,758 | ||||||||||
Polymetal International PLC | Metals & Mining | 292 | 6,396 | |||||||||||
Polyus Gold OJSC | Metals & Mining | 46 | 9,632 | |||||||||||
Rosneft PJSC | Oil, Gas & Consumable Fuels | 1,300 | 6,423 | |||||||||||
Severstal PAO | Metals & Mining | 424 | 5,416 |
franklintempleton.com | Semiannual Report | 45 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Russia (continued) | ||||||||||||||
Surgutneftegas PJSC | Oil, Gas & Consumable Fuels | 11,054 | $ | 4,933 | ||||||||||
Tatneft PAO | Oil, Gas & Consumable Fuels | 2,682 | 15,967 | |||||||||||
|
| |||||||||||||
200,738 | ||||||||||||||
|
| |||||||||||||
Saudi Arabia 0.4% | ||||||||||||||
Abdullah Al Othaim Markets Co. | Food & Staples Retailing | 26 | 898 | |||||||||||
Advanced Petrochemical Co. | Chemicals | 122 | 1,922 | |||||||||||
Al-Rajhi Bank | Banks | 1,076 | 18,847 | |||||||||||
a | Bupa Arabia for Cooperative Insurance Co. | Insurance | 40 | 1,310 | ||||||||||
Jarir Marketing Co. | Specialty Retail | 76 | 3,797 | |||||||||||
Saudi Airlines Catering Co. | Hotels, Restaurants & Leisure | 30 | 661 | |||||||||||
Saudi Arabian Fertilizer Co. | Chemicals | 208 | 4,542 | |||||||||||
Saudi Cement Co. | Construction Materials | 78 | 1,208 | |||||||||||
Saudi Telecom Co. | Diversified Telecommunication Services | 496 | 13,276 | |||||||||||
Yanbu National Petrochemical Co. | Chemicals | 224 | 3,506 | |||||||||||
|
| |||||||||||||
49,967 | ||||||||||||||
|
| |||||||||||||
Singapore 0.3% | ||||||||||||||
Mapletree Commercial Trust | Equity Real Estate Investment Trusts (REITs | ) | 2,600 | 3,695 | ||||||||||
Singapore Exchange Ltd. | Capital Markets | 1,600 | 10,725 | |||||||||||
Singapore Telecommunications Ltd. | Diversified Telecommunication Services | 9,800 | 15,219 | |||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 200 | 2,819 | |||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | Machinery | 4,000 | 2,901 | |||||||||||
|
| |||||||||||||
35,359 | ||||||||||||||
|
| |||||||||||||
South Africa 0.2% | ||||||||||||||
AngloGold Ashanti Ltd. | Metals & Mining | 326 | 8,465 | |||||||||||
Clicks Group Ltd. | Food & Staples Retailing | 334 | 4,452 | |||||||||||
Exxaro Resources Ltd. | Oil, Gas & Consumable Fuels | 366 | 2,731 | |||||||||||
Kumba Iron Ore Ltd. | Metals & Mining | 144 | 4,279 | |||||||||||
Mr. Price Group Ltd. | Specialty Retail | 326 | 2,580 | |||||||||||
Nedbank Group Ltd. | Banks | 46 | 278 | |||||||||||
Tiger Brands Ltd. | Food Products | 178 | 2,036 | |||||||||||
Vodacom Group Ltd. | Wireless Telecommunication Services | 894 | 6,607 | |||||||||||
|
| |||||||||||||
31,428 | ||||||||||||||
|
| |||||||||||||
South Korea 1.6% | ||||||||||||||
BGF Retail Co. Ltd. | Food & Staples Retailing | 12 | 1,267 | |||||||||||
Coway Co. Ltd. | Household Durables | 82 | 5,560 | |||||||||||
Daelim Industrial Co. Ltd. | Construction & Engineering | 32 | 2,118 | |||||||||||
Hana Financial Group Inc. | Banks | 348 | 8,362 | |||||||||||
Hankook Tire & Technology Co. Ltd. | Auto Components | 104 | 2,801 | |||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | Insurance | 68 | 1,300 | |||||||||||
Industrial Bank of Korea | Banks | 322 | 2,205 | |||||||||||
KB Financial Group Inc. | Banks | 462 | 14,834 | |||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 12 | 3,863 | |||||||||||
KT&G Corp. | Tobacco | 164 | 11,555 | |||||||||||
Kumho Petrochemical Co. Ltd. | Chemicals | 30 | 2,822 | |||||||||||
NCSoft Corp. | Entertainment | 16 | 11,027 | |||||||||||
a | PearlAbyss Corp. | Entertainment | 6 | 1,037 | ||||||||||
S-1 Corp. | Commercial Services & Supplies | 34 | 2,544 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,490 | 123,914 | |||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 422 | 9,959 | |||||||||||
Woori Financial Group Inc. | Banks | 488 | 3,580 | |||||||||||
|
| |||||||||||||
208,748 | ||||||||||||||
|
| |||||||||||||
Spain 1.3% | ||||||||||||||
a | Banco Santander SA | Banks | 9,000 | 16,882 |
46 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Spain (continued) | ||||||||||||||
Bankinter SA | Banks | 56 | $ | 241 | ||||||||||
Enagas SA | Gas Utilities | 226 | 5,219 | |||||||||||
Endesa SA | Electric Utilities | 428 | 11,458 | |||||||||||
Iberdrola SA | Electric Utilities | 5,710 | 70,373 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 1,478 | 41,250 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 502 | 9,428 | |||||||||||
Repsol SA | Oil, Gas & Consumable Fuels | 1,807 | 12,125 | |||||||||||
Telefonica SA | Diversified Telecommunication Services | 2,535 | 8,731 | |||||||||||
|
| |||||||||||||
175,707 | ||||||||||||||
|
| |||||||||||||
Sweden 0.4% | ||||||||||||||
Boliden AB | Metals & Mining | 274 | 8,165 | |||||||||||
Epiroc AB, B | Machinery | 218 | 3,037 | |||||||||||
b,c | Evolution Gaming Group AB, 144A, Reg S | Hotels, Restaurants & Leisure | 102 | 6,779 | ||||||||||
Hennes & Mauritz AB, B | Specialty Retail | 1,044 | 18,051 | |||||||||||
ICA Gruppen AB | Food & Staples Retailing | 80 | 4,070 | |||||||||||
a | Svenska Cellulosa AB, B | Paper & Forest Products | 314 | 4,317 | ||||||||||
Swedish Match AB | Tobacco | 96 | 7,860 | |||||||||||
|
| |||||||||||||
52,279 | ||||||||||||||
|
| |||||||||||||
Switzerland 3.3% | ||||||||||||||
EMS-Chemie Holding AG | Chemicals | 12 | 10,795 | |||||||||||
Geberit AG | Building Products | 38 | 22,574 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 104 | 8,114 | |||||||||||
Nestle SA | Food Products | 1,084 | 129,006 | |||||||||||
Novartis AG | Pharmaceuticals | 1,136 | 98,806 | |||||||||||
Partners Group Holding AG | Capital Markets | 28 | 25,832 | |||||||||||
Roche Holding AG | Pharmaceuticals | 328 | 112,511 | |||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 26 | 2,366 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 30 | 15,954 | |||||||||||
|
| |||||||||||||
425,958 | ||||||||||||||
|
| |||||||||||||
Taiwan 2.3% | ||||||||||||||
Accton Technology Corp. | Communications Equipment | 400 | 3,073 | |||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 373 | 3,748 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 400 | 3,501 | |||||||||||
Catcher Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 670 | 4,199 | |||||||||||
Chicony Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 1,345 | 3,905 | |||||||||||
China Development Financial Holding Corp. | Insurance | 12,000 | 3,526 | |||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 4,000 | 14,778 | |||||||||||
Far EasTone Telecommunications Co. Ltd. | Wireless Telecommunication Services | 4,000 | 8,425 | |||||||||||
Feng Tay Enterprise Co. Ltd. | Textiles, Apparel & Luxury Goods | 666 | 3,990 | |||||||||||
Formosa Chemicals & Fibre Corp. | Chemicals | 4,000 | 9,350 | |||||||||||
Formosa Taffeta Co. Ltd. | Textiles, Apparel & Luxury Goods | 2,000 | 2,158 | |||||||||||
Globalwafers Co. Ltd. | Semiconductors & Semiconductor Equipment | 200 | 2,652 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 120 | 13,922 | |||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 4,000 | 6,367 | |||||||||||
Nanya Technology Corp. | Semiconductors & Semiconductor Equipment | 2,000 | 3,971 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 670 | 6,142 | |||||||||||
Powertech Technology Inc. | Semiconductors & Semiconductor Equipment | 700 | 2,086 | |||||||||||
Standard Foods Corp. | Food Products | 2,000 | 4,198 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 6,300 | 9,005 | |||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 2,000 | 6,671 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 12,340 | 184,491 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 1,000 | 3,318 | |||||||||||
Walsin Technology Corp. | Electronic Equipment, Instruments & Components | 400 | 2,134 | |||||||||||
|
| |||||||||||||
305,610 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 47 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Thailand 0.2% | ||||||||||||||
Advanced Info Service PCL | Wireless Telecommunication Services | 1,600 | $ | 8,634 | ||||||||||
Bumrungrad Hospital PCL | Health Care Providers & Services | 400 | 1,202 | |||||||||||
Home Product Center PCL, NVDR | Specialty Retail | 7,800 | 3,545 | |||||||||||
Intouch Holdings PCL | Wireless Telecommunication Services | 3,200 | 5,176 | |||||||||||
Osotspa PCL, NVDR | Beverages | 1,600 | 1,767 | |||||||||||
PTT Exploration and Production PCL, NVDR | Oil, Gas & Consumable Fuels | 1,200 | 2,992 | |||||||||||
The Siam Cement PCL | Construction Materials | 600 | 6,097 | |||||||||||
|
| |||||||||||||
29,413 | ||||||||||||||
|
| |||||||||||||
Turkey 0.1% | ||||||||||||||
Aselsan Elektronik Sanayi ve Ticaret AS | Aerospace & Defense | 692 | 1,735 | |||||||||||
BIM Birlesik Magazalar AS | Food & Staples Retailing | 632 | 5,710 | |||||||||||
Eregli Demir ve Celik Fabrikalari AS | Metals & Mining | 2,640 | 3,242 | |||||||||||
Ford Otomotiv Sanayi AS | Automobiles | 184 | 2,090 | |||||||||||
Turkcell Iletisim Hizmetleri AS | Wireless Telecommunication Services | 1,580 | 3,117 | |||||||||||
|
| |||||||||||||
15,894 | ||||||||||||||
|
| |||||||||||||
United Arab Emirates 0.1% | ||||||||||||||
Aldar Properties PJSC | Real Estate Management & Development | 4,402 | 2,409 | |||||||||||
Dubai Islamic Bank PJSC | Banks | 1,666 | 1,959 | |||||||||||
Emirates Telecommunications Group Co. PJSC | Diversified Telecommunication Services | 2,118 | 9,607 | |||||||||||
|
| |||||||||||||
13,975 | ||||||||||||||
|
| |||||||||||||
United Kingdom 6.3% | ||||||||||||||
Admiral Group PLC | Insurance | 310 | 10,464 | |||||||||||
Anglo American PLC | Metals & Mining | 1,384 | 33,562 | |||||||||||
Auto Trader Group PLC | Interactive Media & Services | 1,216 | 8,851 | |||||||||||
Barratt Developments PLC | Household Durables | 1,456 | 8,956 | |||||||||||
BHP Group PLC | Metals & Mining | 2,650 | 56,658 | |||||||||||
British American Tobacco PLC | Tobacco | 2,098 | 75,334 | |||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 1,122 | 4,894 | ||||||||||
BT Group PLC | Diversified Telecommunication Services | 12,454 | 15,840 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 514 | 10,326 | |||||||||||
Croda International PLC | Chemicals | 72 | 5,818 | |||||||||||
Direct Line Insurance Group PLC | Insurance | 1,576 | 5,489 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 180 | 18,179 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 5,768 | 108,274 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 478 | 9,653 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 82 | 2,750 | |||||||||||
Imperial Brands PLC | Tobacco | 1,520 | 26,872 | |||||||||||
Intertek Group PLC | Professional Services | 184 | 15,067 | |||||||||||
J Sainsbury PLC | Food & Staples Retailing | 994 | 2,454 | |||||||||||
Kingfisher PLC | Specialty Retail | 2,344 | 8,991 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 752 | 5,080 | ||||||||||
M&G PLC | Diversified Financial Services | 2,554 | 5,266 | |||||||||||
Mondi PLC | Paper & Forest Products | 570 | 12,081 | |||||||||||
Next PLC | Multiline Retail | 194 | 14,923 | |||||||||||
Persimmon PLC | Household Durables | 502 | 16,049 | |||||||||||
Prudential PLC | Insurance | 1,348 | 19,326 | |||||||||||
RELX PLC | Professional Services | 2,512 | 56,052 | |||||||||||
Royal Dutch Shell PLC, A | Oil, Gas & Consumable Fuels | 3,986 | 49,671 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 712 | 13,959 | |||||||||||
Taylor Wimpey PLC | Household Durables | 4,852 | 6,803 | |||||||||||
The Berkeley Group Holdings PLC | Household Durables | 158 | 8,636 | |||||||||||
Unilever NV | Personal Products | 1,710 | 103,269 | |||||||||||
Unilever PLC | Personal Products | 1,434 | 88,541 | |||||||||||
William Morrison Supermarkets PLC | Food & Staples Retailing | 1,326 | 2,917 | |||||||||||
|
| |||||||||||||
831,005 | ||||||||||||||
|
|
48 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
United States 56.2% | ||||||||||||||
3M Co. | Industrial Conglomerates | 306 | $ | 49,015 | ||||||||||
A O Smith Corp. | Building Products | 70 | 3,696 | |||||||||||
AbbVie Inc. | Biotechnology | 1,280 | 112,115 | |||||||||||
a | ABIOMED Inc. | Health Care Equipment & Supplies | 26 | 7,204 | ||||||||||
Accenture PLC, A | IT Services | 626 | 141,470 | |||||||||||
a | Adobe Inc. | Software | 282 | 138,301 | ||||||||||
Air Products and Chemicals Inc. | Chemicals | 220 | 65,529 | |||||||||||
a | Alexion Pharmaceuticals Inc. | Biotechnology | 134 | 15,334 | ||||||||||
a | Alphabet Inc., A | Interactive Media & Services | 42 | 61,555 | ||||||||||
a | Alphabet Inc., C | Interactive Media & Services | 42 | 61,723 | ||||||||||
Altria Group Inc. | Tobacco | 2,952 | 114,065 | |||||||||||
d | American Tower Corp. | Equity Real Estate Investment Trusts (REITs | ) | 464 | 112,163 | |||||||||
Amgen Inc. | Biotechnology | 512 | 130,130 | |||||||||||
Apollo Global Management Inc., A | Capital Markets | 84 | 3,759 | |||||||||||
Apple Inc. | Technology Hardware, Storage & Peripherals | 1,488 | 172,325 | |||||||||||
Applied Materials Inc. | Semiconductors & Semiconductor Equipment | 1,150 | 68,368 | |||||||||||
a | Arista Networks Inc. | Communications Equipment | 34 | 7,036 | ||||||||||
AT&T Inc. | Diversified Telecommunication Services | 4,030 | 114,895 | |||||||||||
Best Buy Co. Inc. | Specialty Retail | 304 | 33,832 | |||||||||||
a | Biogen Inc. | Biotechnology | 278 | 78,863 | ||||||||||
a | Booking Holdings Inc. | Internet & Direct Marketing Retail | 34 | 58,163 | ||||||||||
BorgWarner Inc. | Auto Components | 186 | 7,206 | |||||||||||
Bristol-Myers Squibb Co. | Pharmaceuticals | 1,848 | 111,416 | |||||||||||
Broadridge Financial Solutions Inc. | IT Services | 128 | 16,896 | |||||||||||
C.H. Robinson Worldwide Inc. | Air Freight & Logistics | 162 | 16,555 | |||||||||||
Cabot Oil & Gas Corp., A | Oil, Gas & Consumable Fuels | 476 | 8,263 | |||||||||||
a | Cadence Design Systems Inc. | Software | 310 | 33,055 | ||||||||||
Campbell Soup Co. | Food Products | 200 | 9,674 | |||||||||||
Cardinal Health Inc. | Health Care Providers & Services | 194 | 9,108 | |||||||||||
Carrier Global Corp. | Building Products | 550 | 16,797 | |||||||||||
Celanese Corp. | Chemicals | 108 | 11,605 | |||||||||||
Cerner Corp. | Health Care Technology | 180 | 13,012 | |||||||||||
Church & Dwight Co. Inc. | Household Products | 242 | 22,678 | |||||||||||
Cisco Systems Inc. | Communications Equipment | 2,624 | 103,359 | |||||||||||
Citrix Systems Inc. | Software | 144 | 19,830 | |||||||||||
Clorox Co. | Household Products | 200 | 42,034 | |||||||||||
Cognizant Technology Solutions Corp., A | IT Services | 618 | 42,902 | |||||||||||
Colgate-Palmolive Co. | Household Products | 560 | 43,204 | |||||||||||
a | Copart Inc. | Commercial Services & Supplies | 262 | 27,552 | ||||||||||
Cummins Inc. | Machinery | 192 | 40,543 | |||||||||||
D.R. Horton Inc. | Household Durables | 334 | 25,260 | |||||||||||
Dollar General Corp. | Multiline Retail | 292 | 61,209 | |||||||||||
Domino’s Pizza Inc. | Hotels, Restaurants & Leisure | 20 | 8,506 | |||||||||||
eBay Inc. | Internet & Direct Marketing Retail | 454 | 23,653 | |||||||||||
a | Electronic Arts Inc. | Entertainment | 166 | 21,648 | ||||||||||
Eli Lilly and Co. | Pharmaceuticals | 742 | 109,831 | |||||||||||
Equity LifeStyle Properties Inc. | Equity Real Estate Investment Trusts (REITs | ) | 160 | 9,808 | ||||||||||
Erie Indemnity Co., A | Insurance | 28 | 5,888 | |||||||||||
Estee Lauder Companies Inc., A | Personal Products | 260 | 56,745 | |||||||||||
Expeditors International of Washington Inc. | Air Freight & Logistics | 224 | 20,276 | |||||||||||
Extra Space Storage Inc. | Equity Real Estate Investment Trusts (REITs | ) | 124 | 13,267 | ||||||||||
a | F5 Networks Inc. | Communications Equipment | 74 | 9,085 | ||||||||||
a | Facebook Inc., A | Interactive Media & Services | 534 | 139,855 | ||||||||||
FactSet Research Systems Inc. | Capital Markets | 44 | 14,735 | |||||||||||
Fastenal Co. | Trading Companies & Distributors | 766 | 34,539 | |||||||||||
Fox Corp., A | Media | 304 | 8,460 | |||||||||||
a | Fox Corp., B | Media | 202 | 5,650 | ||||||||||
Garmin Ltd. | Household Durables | 194 | 18,403 |
franklintempleton.com | Semiannual Report | 49 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
United States (continued) | ||||||||||||||
General Mills Inc. | Food Products | 726 | $ | 44,780 | ||||||||||
Gilead Sciences Inc. | Biotechnology | 1,612 | 101,862 | |||||||||||
Hormel Foods Corp. | Food Products | 400 | 19,556 | |||||||||||
Host Hotels & Resorts Inc. | Equity Real Estate Investment Trusts (REITs | ) | 390 | 4,208 | ||||||||||
HP Inc. | Technology Hardware, Storage & Peripherals | 820 | 15,572 | |||||||||||
a | IDEXX Laboratories Inc. | Health Care Equipment & Supplies | 74 | 29,090 | ||||||||||
Illinois Tool Works Inc. | Machinery | 342 | 66,078 | |||||||||||
Ingredion Inc. | Food Products | 76 | 5,752 | |||||||||||
Intel Corp. | Semiconductors & Semiconductor Equipment | 1,940 | 100,453 | |||||||||||
International Business Machines Corp. | IT Services | 978 | 118,993 | |||||||||||
Intuit Inc. | Software | 354 | 115,478 | |||||||||||
Invesco Ltd. | Capital Markets | 412 | 4,701 | |||||||||||
Jack Henry & Associates Inc. | IT Services | 94 | 15,283 | |||||||||||
a | Jazz Pharmaceuticals PLC | Pharmaceuticals | 44 | 6,274 | ||||||||||
JB Hunt Transport Services Inc. | Road & Rail | 92 | 11,627 | |||||||||||
Johnson & Johnson | Pharmaceuticals | 786 | 117,020 | |||||||||||
Kellogg Co. | Food Products | 264 | 17,052 | |||||||||||
Kimberly-Clark Corp. | Household Products | 406 | 59,950 | |||||||||||
KLA Corp. | Semiconductors & Semiconductor Equipment | 192 | 37,198 | |||||||||||
Lam Research Corp. | Semiconductors & Semiconductor Equipment | 178 | 59,052 | |||||||||||
Lamb Weston Holdings Inc. | Food Products | 126 | 8,350 | |||||||||||
Lockheed Martin Corp. | Aerospace & Defense | 314 | 120,350 | |||||||||||
Lowe’s Cos. Inc. | Specialty Retail | 872 | 144,630 | |||||||||||
a | Lululemon Athletica Inc. | Textiles, Apparel & Luxury Goods | 136 | 44,794 | ||||||||||
LyondellBasell Industries NV, A | Chemicals | 410 | 28,901 | |||||||||||
MarketAxess Holdings Inc. | Capital Markets | 46 | 22,153 | |||||||||||
a | Masimo Corp. | Health Care Equipment & Supplies | 32 | 7,554 | ||||||||||
Mastercard Inc., A | IT Services | 408 | 137,973 | |||||||||||
a | Match Group Inc. | Interactive Media & Services | 49 | 5,422 | ||||||||||
Maxim Integrated Products Inc. | Semiconductors & Semiconductor Equipment | 368 | 24,881 | |||||||||||
Merck & Co. Inc. | Pharmaceuticals | 1,508 | 125,089 | |||||||||||
a | Mettler-Toledo International Inc. | Life Sciences Tools & Services | 28 | 27,041 | ||||||||||
Microsoft Corp. | Software | 644 | 135,453 | |||||||||||
a | Monster Beverage Corp. | Beverages | 432 | 34,646 | ||||||||||
Moody’s Corp. | Capital Markets | 192 | 55,651 | |||||||||||
NetApp Inc. | Technology Hardware, Storage & Peripherals | 270 | 11,837 | |||||||||||
NIKE Inc., B | Textiles, Apparel & Luxury Goods | 1,282 | 160,942 | |||||||||||
Nucor Corp. | Metals & Mining | 296 | 13,279 | |||||||||||
NVIDIA Corp. | Semiconductors & Semiconductor Equipment | 328 | 177,520 | |||||||||||
a | NVR Inc. | Household Durables | 4 | 16,332 | ||||||||||
a | O’Reilly Automotive Inc. | Specialty Retail | 94 | 43,342 | ||||||||||
Old Dominion Freight Line Inc. | Road & Rail | 130 | 23,520 | |||||||||||
Omnicom Group Inc. | Media | 236 | 11,682 | |||||||||||
Oracle Corp. | Software | 1,282 | 76,535 | |||||||||||
PACCAR Inc. | Machinery | 352 | 30,019 | |||||||||||
Packaging Corp. of America | Containers & Packaging | 98 | 10,687 | |||||||||||
Paychex Inc. | IT Services | 394 | 31,429 | |||||||||||
PepsiCo Inc. | Beverages | 890 | 123,354 | |||||||||||
Pfizer Inc. | Pharmaceuticals | 3,090 | 113,403 | |||||||||||
Philip Morris International Inc. | Tobacco | 1,712 | 128,383 | |||||||||||
PPL Corp. | Electric Utilities | 670 | 18,231 | |||||||||||
Public Storage | Equity Real Estate Investment Trusts (REITs | ) | 238 | 53,007 | ||||||||||
PulteGroup Inc. | Household Durables | 296 | 13,702 | |||||||||||
QUALCOMM Inc. | Semiconductors & Semiconductor Equipment | 742 | 87,319 | |||||||||||
Ralph Lauren Corp. | Textiles, Apparel & Luxury Goods | 60 | 4,078 | |||||||||||
a | Regeneron Pharmaceuticals Inc. | Biotechnology | 98 | 54,858 | ||||||||||
Robert Half International Inc. | Professional Services | 168 | 8,894 | |||||||||||
Rockwell Automation Inc. | Electrical Equipment | 122 | 26,923 |
50 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
United States (continued) | ||||||||||||||
Rollins Inc. | Commercial Services & Supplies | 178 | $ | 9,646 | ||||||||||
Ross Stores Inc. | Specialty Retail | 484 | 45,167 | |||||||||||
Royal Caribbean Cruises Ltd. | Hotels, Restaurants & Leisure | 98 | 6,344 | |||||||||||
S&P Global Inc. | Capital Markets | 334 | 120,440 | |||||||||||
Seagate Technology PLC | Technology Hardware, Storage & Peripherals | 408 | 20,102 | |||||||||||
SEI Investments Co. | Capital Markets | 78 | 3,956 | |||||||||||
Simon Property Group Inc. | Equity Real Estate Investment Trusts (REITs | ) | 442 | 28,589 | ||||||||||
Skyworks Solutions Inc. | Semiconductors & Semiconductor Equipment | 250 | 36,375 | |||||||||||
Snap-on Inc. | Machinery | 60 | 8,828 | |||||||||||
Steel Dynamics Inc. | Metals & Mining | 216 | 6,184 | |||||||||||
T. Rowe Price Group Inc. | Capital Markets | 210 | 26,926 | |||||||||||
a | Take-Two Interactive Software Inc. | Entertainment | 68 | 11,235 | ||||||||||
Target Corp. | Multiline Retail | 638 | 100,434 | |||||||||||
TD Ameritrade Holding Corp. | Capital Markets | 136 | 5,324 | |||||||||||
TE Connectivity Ltd. | Electronic Equipment, Instruments & Components | 332 | 32,450 | |||||||||||
Teradyne Inc. | Semiconductors & Semiconductor Equipment | 106 | 8,423 | |||||||||||
Texas Instruments Inc. | Semiconductors & Semiconductor Equipment | 1,042 | 148,787 | |||||||||||
The Hershey Co. | Food Products | 206 | 29,528 | |||||||||||
The J.M. Smucker Co. | Food Products | 62 | 7,162 | |||||||||||
The Kroger Co. | Food & Staples Retailing | 940 | 31,875 | |||||||||||
The Procter & Gamble Co. | Household Products | 1,046 | 145,384 | |||||||||||
The Progressive Corp. | Insurance | 340 | 32,188 | |||||||||||
Tractor Supply Co. | Specialty Retail | 138 | 19,781 | |||||||||||
Tyson Foods Inc. | Food Products | 342 | 20,342 | |||||||||||
United Parcel Service Inc., B | Air Freight & Logistics | 840 | 139,969 | |||||||||||
a | Veeva Systems Inc. | Health Care Technology | 70 | 19,683 | ||||||||||
�� | Verizon Communications Inc. | Diversified Telecommunication Services | 2,156 | 128,260 | ||||||||||
a | Vertex Pharmaceuticals Inc. | Biotechnology | 162 | 44,083 | ||||||||||
VF Corp. | Textiles, Apparel & Luxury Goods | 364 | 25,571 | |||||||||||
ViacomCBS Inc., B | Media | 542 | 15,181 | |||||||||||
W.W. Grainger Inc. | Trading Companies & Distributors | 58 | 20,693 | |||||||||||
Walgreens Boots Alliance Inc. | Food & Staples Retailing | 908 | 32,615 | |||||||||||
Walmart Inc. | Food & Staples Retailing | 784 | 109,689 | |||||||||||
West Pharmaceutical Services Inc. | Health Care Equipment & Supplies | 42 | 11,546 | |||||||||||
Western Union Co. | IT Services | 348 | 7,458 | |||||||||||
Whirlpool Corp. | Household Durables | 36 | 6,620 | |||||||||||
Xilinx Inc. | Semiconductors & Semiconductor Equipment | 254 | 26,477 | |||||||||||
a | Zoom Video Communications Inc., A | Software | 58 | 27,266 | ||||||||||
|
| |||||||||||||
7,364,772 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $11,878,876) | 12,815,911 | |||||||||||||
|
| |||||||||||||
Management Investment Companies (Cost $158,211) 1.2% | ||||||||||||||
India 1.2% | ||||||||||||||
d | iShares MSCI India ETF | Diversified Financial Services | 4,806 | 162,731 | ||||||||||
|
| |||||||||||||
Preferred Stocks 0.6% | ||||||||||||||
Brazil 0.2% | ||||||||||||||
e | Itau Unibanco Holding SA, 5.676%, pfd. | Banks | 4,200 | 16,766 | ||||||||||
e | Itausa SA, 3.443%, pfd. | Banks | 6,800 | 10,616 | ||||||||||
e | Telefonica Brasil SA, 7.759%, pfd. | Diversified Telecommunication Services | 600 | 4,622 | ||||||||||
|
| |||||||||||||
32,004 | ||||||||||||||
|
| |||||||||||||
Germany 0.1% | ||||||||||||||
e | Fuchs Petrolub SE, 2.236%, pfd. | Chemicals | 56 | 2,849 |
franklintempleton.com | Semiannual Report | 51 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ Global Equity ETF (continued)
Industry | Shares | Value | ||||||||||||
Preferred Stocks (continued) | ||||||||||||||
Germany (continued) | ||||||||||||||
a | Porsche Automobil Holding SE, pfd. | Automobiles | 188 | $ | 11,221 | |||||||||
|
| |||||||||||||
14,070 | ||||||||||||||
|
| |||||||||||||
Russia 0.1% | ||||||||||||||
e | Surgutneftegas PJSC, 2.469%, pfd. | Oil, Gas & Consumable Fuels | 12,784 | 6,473 | ||||||||||
|
| |||||||||||||
South Korea 0.2% | ||||||||||||||
e | LG Household & Health Care Ltd., 1.561%, pfd. | Personal Products | 4 | 2,422 | ||||||||||
e | Samsung Electronics Co. Ltd., 2.105%, pfd. | Technology Hardware, Storage & Peripherals | 484 | 20,899 | ||||||||||
|
| |||||||||||||
23,321 | ||||||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $88,122) | 75,868 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 13,054,510 | |||||||||||||
|
| |||||||||||||
Short Term Investments (Cost $124,200) 1.0% | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 1.0% | ||||||||||||||
Money Market Funds 1.0% | ||||||||||||||
f,g | Institutional Fiduciary Trust Money Market Portfolio, 0.00% | 124,200 | 124,200 | |||||||||||
|
| |||||||||||||
Total Investments | 13,178,710 | |||||||||||||
Other Assets, less Liabilities (0.6)% | (74,117 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 13,104,593 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $37,324, representing 0.3% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $18,005, representing 0.1% of net assets.
dA portion or all of the security is on loan at September 30, 2020. See Note 1(d).
eVariable rate security. The rate shown represents the yield at period end.
fSee Note 3(c) regarding investments in affiliated management investment companies.
gThe rate shown is the annualized seven-day effective yield at period end.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Index Contracts | ||||||||||||||||||||
MSCI All Country World Index | Long | 1 | $ | 28,765 | 12/18/20 | $ | (681 | ) |
*As of Period ended.
See Abbreviations on Page 77.
52 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ International Equity Hedged ETF
Six Months Ended September 30, 2020 | Year Ended March 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||||||
Net asset value, beginning of period | $ | 22.55 | $ | 24.70 | $ | 24.25 | $ | 24.70 | $ | 25.45 | ||||||||||
|
| |||||||||||||||||||
Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.31 | 0.89 | 0.93 | 0.77 | 0.52 | |||||||||||||||
Net realized and unrealized gains (losses) | 2.05 | (2.61 | ) | 0.79 | 0.10 | 1.45 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.36 | (1.72 | ) | 1.72 | 0.87 | 1.97 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income and net foreign currency gains | (0.91 | ) | (0.19 | ) | (0.30 | ) | (1.32 | ) | (2.72 | ) | ||||||||||
Net realized gains | — | (0.24 | ) | (0.97 | ) | — | — | |||||||||||||
|
| |||||||||||||||||||
Total Distributions | (0.91 | ) | (0.43 | ) | (1.27 | ) | (1.32 | ) | (2.72 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 24.00 | $ | 22.55 | $ | 24.70 | $ | 24.25 | $ | 24.70 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 10.46% | (7.12)% | 7.53% | 3.47% | 8.30% | |||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.40% | 0.40% | 0.40% | 1.42% | f | 1.25% | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.40% | 0.40% | 0.40% | 0.40% | f | 0.40% | ||||||||||||||
Net investment income | 2.58% | 3.44% | 3.75% | 3.07% | 2.47% | |||||||||||||||
Supplemental data |
| |||||||||||||||||||
Net assets, end of period (000’s) | $9,601 | $9,021 | $7,410 | $9,702 | $9,880 | |||||||||||||||
Portfolio turnover rateg | 22.84% | h | 26.82% | h | 39.24% | 32.55% | 19.09% |
aFor the period June 1, 2016 (commencement of operations) to March 31, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 22.84% | 26.82% | —% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 53 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin LibertyQ International Equity Hedged ETF
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests 99.7% | ||||||||||||||
Australia 15.2% | ||||||||||||||
AGL Energy Ltd. | Multi-Utilities | 2,120 | $ | 20,696 | ||||||||||
Aristocrat Leisure Ltd. | Hotels, Restaurants & Leisure | 1,636 | 35,143 | |||||||||||
Aurizon Holdings Ltd. | Road & Rail | 6,176 | 18,813 | |||||||||||
Australian Stock Exchange Ltd. | Capital Markets | 500 | 29,035 | |||||||||||
BHP Group Ltd. | Metals & Mining | 7,656 | 195,353 | |||||||||||
Bluescope Steel Ltd. | Metals & Mining | 1,524 | 13,873 | |||||||||||
Brambles Ltd. | Commercial Services & Supplies | 4,896 | 36,812 | |||||||||||
a | Cimic Group Ltd. | Construction & Engineering | 296 | 3,936 | ||||||||||
Coca-Cola Amatil Ltd. | Beverages | 1,640 | 11,167 | |||||||||||
Cochlear Ltd. | Health Care Equipment & Supplies | 212 | 30,086 | |||||||||||
Coles Group Ltd. | Food & Staples Retailing | 3,884 | 47,326 | |||||||||||
Crown Resorts Ltd. | Hotels, Restaurants & Leisure | 1,024 | 6,451 | |||||||||||
CSL Ltd. | Biotechnology | 884 | 181,845 | |||||||||||
Evolution Mining Ltd. | Metals & Mining | 2,656 | 10,946 | |||||||||||
Fortescue Metals Group Ltd. | Metals & Mining | 8,432 | 98,511 | |||||||||||
Magellan Financial Group Ltd. | Capital Markets | 340 | 13,803 | |||||||||||
Medibank Private Ltd. | Insurance | 10,088 | 18,149 | |||||||||||
Newcrest Mining Ltd. | Metals & Mining | 1,536 | 34,393 | |||||||||||
Northern Star Resources Ltd. | Metals & Mining | 1,172 | 11,458 | |||||||||||
a | Qantas Airways Ltd. | Airlines | 1,728 | 5,016 | ||||||||||
REA Group Ltd. | Interactive Media & Services | 172 | 13,557 | |||||||||||
Rio Tinto Ltd. | Metals & Mining | 1,568 | 106,003 | |||||||||||
Rio Tinto PLC | Metals & Mining | 3,368 | 202,707 | |||||||||||
Scentre Group | Equity Real Estate Investment Trusts (REITs | ) | 13,288 | 20,953 | ||||||||||
Sonic Healthcare Ltd. | Health Care Providers & Services | 1,212 | 28,806 | |||||||||||
Telstra Corp. Ltd. | Diversified Telecommunication Services | 14,284 | 28,462 | |||||||||||
Wesfarmers Ltd. | Multiline Retail | 3,884 | 123,659 | |||||||||||
Woolworths Group Ltd. | Food & Staples Retailing | 4,140 | 108,100 | |||||||||||
|
| |||||||||||||
1,455,059 | ||||||||||||||
|
| |||||||||||||
Belgium 0.2% | ||||||||||||||
Colruyt SA | Food & Staples Retailing | 184 | 11,945 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 528 | 9,643 | |||||||||||
|
| |||||||||||||
21,588 | ||||||||||||||
|
| |||||||||||||
Denmark 3.7% | ||||||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 508 | 80,309 | |||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 2,700 | 186,876 | |||||||||||
Novozymes AS | Chemicals | 584 | 36,791 | |||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 480 | 34,610 | |||||||||||
Tryg AS | Insurance | 364 | 11,492 | |||||||||||
|
| |||||||||||||
350,078 | ||||||||||||||
|
| |||||||||||||
Finland 1.8% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 488 | 28,773 | |||||||||||
Kone OYJ, B | Machinery | 972 | 85,554 | |||||||||||
Orion OYJ | Pharmaceuticals | 360 | 16,325 | |||||||||||
UPM-Kymmene OYJ | Paper & Forest Products | 1,420 | 43,278 | |||||||||||
|
| |||||||||||||
173,930 | ||||||||||||||
|
| |||||||||||||
France 3.6% | ||||||||||||||
Biomerieux | Health Care Equipment & Supplies | 56 | 8,786 | |||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 100 | 86,331 | |||||||||||
a | Peugeot SA | Automobiles | 1,888 | 34,316 | ||||||||||
Publicis Groupe | Media | 288 | 9,314 | |||||||||||
Sanofi | Pharmaceuticals | 1,852 | 185,315 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 40 | 13,819 |
54 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ International Equity Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
France (continued) | ||||||||||||||
Unibail-Rodamco-Westfield | Equity Real Estate Investment Trusts (REITs | ) | 184 | $ | 6,797 | |||||||||
|
| |||||||||||||
344,678 | ||||||||||||||
|
| |||||||||||||
Germany 0.1% | ||||||||||||||
Hochtief AG | Construction & Engineering | 36 | 2,805 | |||||||||||
Knorr-Bremse AG | Machinery | 64 | 7,553 | |||||||||||
|
| |||||||||||||
10,358 | ||||||||||||||
|
| |||||||||||||
Hong Kong 1.0% | ||||||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 3,500 | 17,048 | |||||||||||
CK Infrastructure Holdings Ltd. | Electric Utilities | 2,000 | 9,329 | |||||||||||
HKT Trust and HKT Ltd. | Diversified Telecommunication Services | 11,000 | 14,563 | |||||||||||
Jardine Matheson Holdings Ltd. | Industrial Conglomerates | 580 | 23,014 | |||||||||||
Kerry Properties Ltd. | Real Estate Management & Development | 2,500 | 6,381 | |||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 3,500 | 18,336 | |||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 8,000 | 9,290 | |||||||||||
|
| |||||||||||||
97,961 | ||||||||||||||
|
| |||||||||||||
Israel 0.7% | ||||||||||||||
Azrieli Group Ltd. | Real Estate Management & Development | 52 | 2,326 | |||||||||||
Bank Leumi Le-Israel BM | Banks | 3,772 | 16,631 | |||||||||||
a | Check Point Software Technologies Ltd. | Software | 372 | 44,766 | ||||||||||
ICL Group Ltd. | Chemicals | 1,812 | 6,421 | |||||||||||
|
| |||||||||||||
70,144 | ||||||||||||||
|
| |||||||||||||
Italy 3.2% | ||||||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 48 | 9,676 | |||||||||||
Enel SpA | Electric Utilities | 19,564 | 170,182 | |||||||||||
Ferrari NV | Automobiles | 300 | 55,109 | |||||||||||
b | Infrastrutture Wireless Italiane SpA, Reg S | Diversified Telecommunication Services | 296 | 3,276 | ||||||||||
a | Moncler SpA | Textiles, Apparel & Luxury Goods | 576 | 23,627 | ||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 292 | 14,977 | |||||||||||
Snam SpA | Gas Utilities | 4,804 | 24,725 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 7,516 | 3,039 | |||||||||||
|
| |||||||||||||
304,611 | ||||||||||||||
|
| |||||||||||||
Japan 25.2% | ||||||||||||||
ABC-Mart Inc. | Specialty Retail | 92 | 4,769 | |||||||||||
Advantest Corp. | Semiconductors & Semiconductor Equipment | 500 | 24,116 | |||||||||||
AEON Mall Co. Ltd. | Real Estate Management & Development | 200 | 2,797 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 6,000 | 89,093 | |||||||||||
Bandai Namco Holdings Inc. | Leisure Products | 600 | 43,717 | |||||||||||
Bridgestone Corp. | Auto Components | 1,800 | 56,577 | |||||||||||
Calbee Inc. | Food Products | 100 | 3,283 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 1,610 | 71,934 | |||||||||||
Cosmos Pharmaceutical Corp. | Food & Staples Retailing | 30 | 5,217 | |||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 240 | 21,196 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 1,600 | 40,898 | |||||||||||
Hitachi Ltd. | Electronic Equipment, Instruments & Components | 1,300 | 43,645 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 1,250 | 140,481 | |||||||||||
Iida Group Holdings Co. Ltd. | Household Durables | 400 | 8,047 | |||||||||||
Isuzu Motors Ltd. | Automobiles | 1,400 | 12,171 | |||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 4,400 | 111,949 | |||||||||||
a | Japan Airlines Co. Ltd. | Airlines | 400 | 7,452 | ||||||||||
Japan Post Bank Co. Ltd. | Banks | 1,200 | 9,336 | |||||||||||
Japan Tobacco Inc. | Tobacco | 3,900 | 70,956 | |||||||||||
Kajima Corp. | Construction & Engineering | 1,200 | 14,350 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 500 | 13,110 |
franklintempleton.com | Semiannual Report | 55 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ International Equity Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
KAO Corp. | Personal Products | 1,350 | $ | 100,895 | ||||||||||
KDDI Corp. | Wireless Telecommunication Services | 5,800 | 145,976 | |||||||||||
Kobe Bussan Co. Ltd. | Food & Staples Retailing | 100 | 5,477 | |||||||||||
Koito Manufacturing Co. Ltd. | Auto Components | 260 | 13,181 | |||||||||||
Marubeni Corp. | Trading Companies & Distributors | 4,400 | 24,787 | |||||||||||
McDonald’s Holdings Co. Japan Ltd. | Hotels, Restaurants & Leisure | 100 | 4,852 | |||||||||||
Mebuki Financial Group Inc. | Banks | 1,200 | 2,706 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 500 | 9,220 | |||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 200 | 9,893 | |||||||||||
MS&AD Insurance Group Holdings Inc. | Insurance | 1,200 | 32,112 | |||||||||||
Nexon Co. Ltd. | Entertainment | 1,300 | 32,300 | |||||||||||
Nihon M&A Center Inc. | Professional Services | 200 | 11,333 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 150 | 84,801 | |||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 4,400 | 89,643 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 100 | 20,705 | |||||||||||
Nomura Research Institute Ltd. | IT Services | 400 | 11,731 | |||||||||||
NTT DOCOMO Inc. | Wireless Telecommunication Services | 4,900 | 180,390 | |||||||||||
Obayashi Corp. | Construction & Engineering | 1,900 | 17,194 | |||||||||||
OBIC Co. Ltd. | IT Services | 100 | 17,474 | |||||||||||
Ono Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 12,524 | |||||||||||
Oracle Corp. Japan | Software | 133 | 14,267 | |||||||||||
ORIX Corp. | Diversified Financial Services | 3,400 | 42,045 | |||||||||||
Otsuka Corp. | IT Services | 100 | 5,098 | |||||||||||
Pigeon Corp. | Household Products | 300 | 13,361 | |||||||||||
Sekisui House Ltd. | Household Durables | 2,000 | 35,203 | |||||||||||
SG Holdings Co. Ltd. | Air Freight & Logistics | 200 | 10,329 | |||||||||||
Shin-Etsu Chemical Co. Ltd. | Chemicals | 700 | 90,775 | |||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 900 | 48,006 | |||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 800 | 7,460 | |||||||||||
Showa Denko K.K. | Chemicals | 300 | 5,464 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 5,200 | 58,021 | |||||||||||
Subaru Corp. | Automobiles | 1,800 | 34,659 | |||||||||||
Sumitomo Corp. | Trading Companies & Distributors | 2,300 | 27,429 | |||||||||||
Sundrug Co. Ltd. | Food & Staples Retailing | 100 | 3,757 | |||||||||||
Taisei Corp. | Construction & Engineering | 500 | 16,820 | |||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 480 | 124,310 | |||||||||||
Tosoh Corp. | Chemicals | 800 | 12,925 | |||||||||||
Toyota Motor Corp. | Automobiles | 3,000 | 197,063 | |||||||||||
Tsuruha Holdings Inc. | Food & Staples Retailing | 50 | 7,064 | |||||||||||
USS Co. Ltd. | Specialty Retail | 600 | 10,683 | |||||||||||
Welcia Holdings Co. Ltd. | Food & Staples Retailing | 150 | 6,574 | |||||||||||
Yamaha Motor Co. Ltd. | Automobiles | 800 | 11,538 | |||||||||||
Yokohama Rubber Co. Ltd. | Auto Components | 100 | 1,413 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 400 | 11,098 | |||||||||||
|
| |||||||||||||
2,417,650 | ||||||||||||||
|
| |||||||||||||
Macau 0.8% | ||||||||||||||
Galaxy Entertainment Group Ltd. | Hotels, Restaurants & Leisure | 6,000 | 40,219 | |||||||||||
Sands China Ltd. | Hotels, Restaurants & Leisure | 8,400 | 32,354 | |||||||||||
a | Wynn Macau Ltd. | Hotels, Restaurants & Leisure | 3,600 | 5,741 | ||||||||||
|
| |||||||||||||
78,314 | ||||||||||||||
|
| |||||||||||||
Netherlands 1.3% | ||||||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 3,268 | 96,764 | |||||||||||
Koninklijke KPN NV | Diversified Telecommunication Services | 4,564 | 10,741 | |||||||||||
Koninklijke Vopak NV | Oil, Gas & Consumable Fuels | 92 | 5,185 | |||||||||||
NN Group NV | Insurance | 416 | 15,635 | |||||||||||
|
| |||||||||||||
128,325 | ||||||||||||||
|
|
56 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ International Equity Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
New Zealand 0.8% | ||||||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | Health Care Equipment & Supplies | 2,072 | $ | 45,566 | ||||||||||
Spark New Zealand Ltd. | Diversified Telecommunication Services | 7,288 | 22,642 | |||||||||||
a | The a2 Milk Co Ltd. | Food Products | 1,084 | 10,992 | ||||||||||
|
| |||||||||||||
79,200 | ||||||||||||||
|
| |||||||||||||
Norway 1.1% | ||||||||||||||
Equinor ASA | Oil, Gas & Consumable Fuels | 1,912 | 27,137 | |||||||||||
Mowi ASA | Food Products | 1,396 | 24,745 | |||||||||||
Orkla ASA | Food Products | 2,164 | 21,828 | |||||||||||
Telenor ASA | Diversified Telecommunication Services | 2,168 | 36,251 | |||||||||||
|
| |||||||||||||
109,961 | ||||||||||||||
|
| |||||||||||||
Portugal 0.1% | ||||||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 668 | 10,736 | |||||||||||
|
| |||||||||||||
Russia 0.1% | ||||||||||||||
Evraz PLC | Metals & Mining | 1,956 | 8,714 | |||||||||||
|
| |||||||||||||
Singapore 0.9% | ||||||||||||||
Mapletree Commercial Trust | Equity Real Estate Investment Trusts (REITs | ) | 4,000 | 5,685 | ||||||||||
Singapore Exchange Ltd. | Capital Markets | 3,700 | 24,800 | |||||||||||
Singapore Telecommunications Ltd. | Diversified Telecommunication Services | 24,800 | 38,514 | |||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 700 | 9,866 | |||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | Machinery | 8,800 | 6,382 | |||||||||||
|
| |||||||||||||
85,247 | ||||||||||||||
|
| |||||||||||||
Spain 4.6% | ||||||||||||||
a | Banco Santander SA | Banks | 21,136 | 39,646 | ||||||||||
Bankinter SA | Banks | 844 | 3,639 | |||||||||||
Enagas SA | Gas Utilities | 624 | 14,411 | |||||||||||
Endesa SA | Electric Utilities | 984 | 26,343 | |||||||||||
Iberdrola SA | Electric Utilities | 14,132 | 174,171 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 3,644 | 101,701 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 1,300 | 24,414 | |||||||||||
Repsol SA | Oil, Gas & Consumable Fuels | 4,416 | 29,631 | |||||||||||
Telefonica SA | Diversified Telecommunication Services | 6,728 | 23,172 | |||||||||||
|
| |||||||||||||
437,128 | ||||||||||||||
|
| |||||||||||||
Sweden 2.5% | ||||||||||||||
Atlas Copco AB | Machinery | 1,096 | 45,946 | |||||||||||
Atlas Copco AB, A | Machinery | 844 | 40,437 | |||||||||||
Boliden AB | Metals & Mining | 808 | 24,077 | |||||||||||
Epiroc AB, A | Machinery | 876 | 12,739 | |||||||||||
Epiroc AB, B | Machinery | 504 | 7,022 | |||||||||||
b,c | Evolution Gaming Group AB, 144A, Reg S | Hotels, Restaurants & Leisure | 244 | 16,216 | ||||||||||
Hennes & Mauritz AB, B | Specialty Retail | 2,516 | 43,503 | |||||||||||
ICA Gruppen AB | Food & Staples Retailing | 256 | 13,023 | |||||||||||
a | L E Lundbergforetagen AB, B | Diversified Financial Services | 92 | 4,566 | ||||||||||
a | Svenska Cellulosa AB, B | Paper & Forest Products | 808 | 11,109 | ||||||||||
Swedish Match AB | Tobacco | 228 | 18,668 | |||||||||||
|
| |||||||||||||
237,306 | ||||||||||||||
|
| |||||||||||||
Switzerland 8.4% | ||||||||||||||
EMS-Chemie Holding AG | Chemicals | 28 | 25,189 | |||||||||||
Geberit AG | Building Products | 116 | 68,912 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 228 | 17,788 | |||||||||||
Nestle SA | Food Products | 1,624 | 193,272 | |||||||||||
Novartis AG | Pharmaceuticals | 2,068 | 179,868 | |||||||||||
Partners Group Holding AG | Capital Markets | 72 | 66,424 |
franklintempleton.com | Semiannual Report | 57 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ International Equity Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Switzerland (continued) | ||||||||||||||
Roche Holding AG | Pharmaceuticals | 492 | $ | 168,766 | ||||||||||
SGS SA | Professional Services | 12 | 32,248 | |||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 96 | 8,735 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 80 | 42,545 | |||||||||||
|
| |||||||||||||
803,747 | ||||||||||||||
|
| |||||||||||||
United Kingdom 24.4% | ||||||||||||||
Admiral Group PLC | Insurance | 796 | 26,869 | |||||||||||
Anglo American PLC | Metals & Mining | 3,444 | 83,518 | |||||||||||
Auto Trader Group PLC | Interactive Media & Services | 2,912 | 21,195 | |||||||||||
BAE Systems PLC | Aerospace & Defense | 8,744 | 54,486 | |||||||||||
Barratt Developments PLC | Household Durables | 3,656 | 22,489 | |||||||||||
BHP Group PLC | Metals & Mining | 6,604 | 141,196 | |||||||||||
British American Tobacco PLC | Tobacco | 4,724 | 169,627 | |||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 2,860 | 12,475 | ||||||||||
BT Group PLC | Diversified Telecommunication Services | 31,612 | 40,206 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 1,260 | 25,313 | |||||||||||
Compass Group PLC | Hotels, Restaurants & Leisure | 4,536 | 68,552 | |||||||||||
Croda International PLC | Chemicals | 180 | 14,544 | |||||||||||
Diageo PLC | Beverages | 5,064 | 173,489 | |||||||||||
Direct Line Insurance Group PLC | Insurance | 4,080 | 14,210 | |||||||||||
Experian PLC | Professional Services | 2,400 | 90,599 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 436 | 44,033 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 8,660 | 162,561 | |||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 476 | 14,430 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 1,156 | 23,344 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 212 | 7,109 | |||||||||||
Imperial Brands PLC | Tobacco | 3,908 | 69,090 | |||||||||||
Intertek Group PLC | Professional Services | 480 | 39,305 | |||||||||||
J Sainsbury PLC | Food & Staples Retailing | 2,376 | 5,865 | |||||||||||
Kingfisher PLC | Specialty Retail | 5,864 | 22,493 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 2,020 | 13,645 | ||||||||||
M&G PLC | Diversified Financial Services | 6,672 | 13,758 | |||||||||||
Mondi PLC | Paper & Forest Products | 1,392 | 29,504 | |||||||||||
Next PLC | Multiline Retail | 492 | 37,845 | |||||||||||
Pearson PLC | Media | 2,016 | 14,314 | |||||||||||
Persimmon PLC | Household Durables | 1,244 | 39,772 | |||||||||||
Prudential PLC | Insurance | 3,388 | 48,574 | |||||||||||
RELX PLC | Professional Services | 6,292 | 140,398 | |||||||||||
Royal Dutch Shell PLC, A | Oil, Gas & Consumable Fuels | 10,668 | 132,937 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 1,728 | 33,878 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 96 | 13,733 | |||||||||||
Taylor Wimpey PLC | Household Durables | 12,292 | 17,234 | |||||||||||
The Berkeley Group Holdings PLC | Household Durables | 412 | 22,520 | |||||||||||
Unilever NV | Personal Products | 3,632 | 219,342 | |||||||||||
Unilever PLC | Personal Products | 3,484 | 215,116 | |||||||||||
William Morrison Supermarkets PLC | Food & Staples Retailing | 3,020 | 6,643 | |||||||||||
|
| |||||||||||||
2,346,211 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $8,837,141) | 9,570,946 | |||||||||||||
|
|
58 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ International Equity Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Preferred Stocks 0.4% | ||||||||||||||
Germany 0.4% | ||||||||||||||
d | Fuchs Petrolub SE, 2.236%, pfd. | Chemicals | 188 | $ | 9,564 | |||||||||
a | Porsche Automobil Holding SE, pfd. | Automobiles | 448 | 26,740 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $37,179) | 36,304 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $8,874,320) 100.1% | 9,607,250 | |||||||||||||
Other Assets, less Liabilities (0.1)% | (6,417 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 9,600,833 | ||||||||||||
|
|
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $19,492, representing 0.2% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $16,216, representing 0.2% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
At September 30, 2020 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
Forward Exchange Contracts | ||||||||||||||||||||||||||||
Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Australian Dollar | DBAB | Buy | 1,790,800 | $ | 1,283,556 | 10/02/20 | $ | — | $ | — | ||||||||||||||||||
Australian Dollar | DBAB | Sell | 1,790,800 | 1,324,512 | 10/02/20 | 40,956 | — | |||||||||||||||||||||
Danish Krone | BOFA | Buy | 2,086,300 | 328,663 | 10/02/20 | 5 | — | |||||||||||||||||||||
Danish Krone | BOFA | Sell | 2,086,300 | 335,326 | 10/02/20 | 6,658 | — | |||||||||||||||||||||
Euro | BOFA | Buy | 1,413,200 | 1,657,165 | 10/02/20 | 25 | — | |||||||||||||||||||||
Euro | BOFA | Sell | 1,413,200 | 1,691,223 | 10/02/20 | 34,033 | — | |||||||||||||||||||||
Great British Pound | BOFA | Buy | 585,881 | 757,416 | 10/02/20 | 11 | — | |||||||||||||||||||||
Great British Pound | HSBK | Buy | 585,881 | 757,416 | 10/02/20 | 11 | — | |||||||||||||||||||||
Great British Pound | UBSW | Buy | 585,881 | 757,412 | 10/02/20 | 15 | — | |||||||||||||||||||||
Great British Pound | BOFA | Sell | 585,881 | 784,629 | 10/02/20 | 27,203 | — | |||||||||||||||||||||
Great British Pound | HSBK | Sell | 585,881 | 784,641 | 10/02/20 | 27,214 | — | |||||||||||||||||||||
Great British Pound | UBSW | Sell | 585,881 | 784,633 | 10/02/20 | 27,206 | — | |||||||||||||||||||||
Israeli Shekel | BOFA | Buy | 96,500 | 28,214 | 10/02/20 | — | (1 | ) | ||||||||||||||||||||
Israeli Shekel | BOFA | Sell | 96,500 | 28,798 | 10/02/20 | 584 | — | |||||||||||||||||||||
Japanese Yen | BOFA | Buy | 251,244,700 | 2,380,755 | 10/02/20 | 34 | — | |||||||||||||||||||||
Japanese Yen | BOFA | Sell | 251,244,700 | 2,370,132 | 10/02/20 | — | (10,657 | ) | ||||||||||||||||||||
New Zealand Dollar | BOFA | Buy | 131,200 | 86,724 | 10/02/20 | — | (1 | ) | ||||||||||||||||||||
New Zealand Dollar | BOFA | Sell | 131,200 | 88,670 | 10/02/20 | 1,947 | — | |||||||||||||||||||||
Norwegian Krone | BOFA | Buy | 983,700 | 105,133 | 10/02/20 | 2 | — | |||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 983,700 | 113,376 | 10/02/20 | 8,242 | — | |||||||||||||||||||||
Singapore Dollar | BOFA | Buy | 118,800 | 87,025 | 10/02/20 | 2 | — | |||||||||||||||||||||
Singapore Dollar | BOFA | Sell | 118,800 | 87,379 | 10/02/20 | 352 | — | |||||||||||||||||||||
Swedish Krona | BOFA | Buy | 1,949,800 | 217,851 | 10/02/20 | 3 | — | |||||||||||||||||||||
Swedish Krona | BOFA | Sell | 1,949,800 | 226,132 | 10/02/20 | 8,277 | — | |||||||||||||||||||||
Swiss Franc | MSCO | Buy | 714,000 | 777,143 | 10/02/20 | — | — | |||||||||||||||||||||
Swiss Franc | MSCO | Sell | 714,000 | 793,655 | 10/02/20 | 16,512 | — | |||||||||||||||||||||
Hong Kong Dollar | MSCO | Buy | 1,313,300 | 169,458 | 10/06/20 | — | — | |||||||||||||||||||||
Hong Kong Dollar | MSCO | Sell | 1,313,300 | 169,433 | 10/06/20 | — | (25 | ) | ||||||||||||||||||||
Australian Dollar | DBAB | Sell | 1,788,500 | 1,281,977 | 11/03/20 | — | (22 | ) | ||||||||||||||||||||
Danish Krone | BOFA | Sell | 2,256,800 | 355,678 | 11/03/20 | — | (33 | ) | ||||||||||||||||||||
Euro | BOFA | Sell | 1,451,200 | 1,702,828 | 11/03/20 | — | (46 | ) | ||||||||||||||||||||
Great British Pound | BOFA | Sell | 606,575 | 784,284 | 11/03/20 | — | (27 | ) | ||||||||||||||||||||
Great British Pound | HSBK | Sell | 606,575 | 784,290 | 11/03/20 | — | (21 | ) | ||||||||||||||||||||
Great British Pound | UBSW | Sell | 606,575 | 784,288 | 11/03/20 | — | (23 | ) |
franklintempleton.com | Semiannual Report | 59 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ International Equity Hedged ETF (continued)
Forward Exchange Contracts (continued) | ||||||||||||||||||||||||||||
Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
OTC Forward Exchange Contracts (continued) | ||||||||||||||||||||||||||||
Hong Kong Dollar | MSCO | Sell | 1,198,800 | $ | 154,650 | 11/03/20 | $ | — | $ | (15 | ) | |||||||||||||||||
Israeli Shekel | BOFA | Sell | 86,500 | 25,298 | 11/03/20 | — | (1 | ) | ||||||||||||||||||||
New Zealand Dollar | BOFA | Sell | 120,700 | 79,780 | 11/03/20 | — | (2 | ) | ||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 1,022,700 | 109,302 | 11/03/20 | — | (4 | ) | ||||||||||||||||||||
Singapore Dollar | BOFA | Sell | 118,900 | 87,098 | 11/03/20 | — | (5 | ) | ||||||||||||||||||||
Swedish Krona | BOFA | Sell | 2,177,000 | 243,312 | 11/03/20 | — | (9 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Sell | 744,800 | 811,381 | 11/03/20 | — | (6 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Sell | 744,800 | 811,379 | 11/03/20 | — | (7 | ) | ||||||||||||||||||||
Japanese Yen | BOFA | Sell | 257,678,800 | 2,442,581 | 11/04/20 | — | (57 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 199,292 | $ | (10,962 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | 188,330 | |||||||||||||||||||||||||
|
|
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
See Abbreviations on page 77.
60 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2020 (unaudited)
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Assets: |
| |||||||||||||||
Investments in securities: |
| |||||||||||||||
Cost – Unaffiliated issuers | $ | 20,950,142 | $ | 22,888,760 | $ | 12,125,209 | $ | 8,874,320 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | 67,200 | — | 124,200 | — | ||||||||||||
|
| |||||||||||||||
Value – Unaffiliated issuers | $ | 20,609,815 | $ | 22,111,668 | $ | 13,054,510 | $ | 9,607,250 | ||||||||
Value – Non-controlled affiliates (Note 3c) | 67,200 | — | 124,200 | — | ||||||||||||
Cash | 4,385 | 2,035 | 13,368 | — | ||||||||||||
Foreign currency, at value (cost $28,462, $21,436, $29,503 and $7,262) | 28,526 | 21,368 | 29,480 | 7,289 | ||||||||||||
Receivables: |
| |||||||||||||||
Dividends and interest | 64,076 | 95,976 | 33,436 | 47,205 | ||||||||||||
Variation margin on futures contracts | 1,400 | 479 | 253 | — | ||||||||||||
Receivable for tax refund | 67,200 | — | — | — | ||||||||||||
Deposits with brokers for: |
| |||||||||||||||
Futures contracts | 4,770 | 6,579 | 3,289 | — | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | — | — | 199,292 | ||||||||||||
|
| |||||||||||||||
Total assets | 20,847,372 | 22,238,105 | 13,258,536 | 9,861,036 | ||||||||||||
|
| |||||||||||||||
Liabilities: |
| |||||||||||||||
Payables: |
| |||||||||||||||
Management fees | 7,789 | 8,316 | 3,667 | 3,169 | ||||||||||||
Investment securities purchased | 81 | — | 26,076 | 224,957 | ||||||||||||
Funds advanced by custodian | — | — | — | 21,115 | ||||||||||||
Deferred tax | 40,944 | — | — | — | ||||||||||||
Payable upon return of securities loaned | 67,200 | — | 124,200 | — | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | — | — | 10,962 | ||||||||||||
|
| |||||||||||||||
Total liabilities | 116,014 | 8,316 | 153,943 | 260,203 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 20,731,358 | $ | 22,229,789 | $ | 13,104,593 | $ | 9,600,833 | ||||||||
|
| |||||||||||||||
Net assets consist of: |
| |||||||||||||||
Paid-in capital | $ | 55,661,723 | $ | 24,735,248 | $ | 13,048,833 | $ | 9,786,556 | ||||||||
Total distributable earnings (loss) | (34,930,365 | ) | (2,505,459 | ) | 55,760 | (185,723 | ) | |||||||||
|
| |||||||||||||||
Net assets, at value | $ | 20,731,358 | $ | 22,229,789 | $ | 13,104,593 | $ | 9,600,833 | ||||||||
|
| |||||||||||||||
Shares outstanding | 800,000 | 800,000 | 400,000 | 400,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 25.91 | $ | 27.79 | $ | 32.76 | $ | 24.00 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 61 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2020 (unaudited)
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 626,441 | $ | 373,563 | $ | 191,857 | $ | 134,809 | ||||||||
Non-cash dividends | — | 53,883 | — | 8,146 | ||||||||||||
Income from securities loaned: (Note 1d) | ||||||||||||||||
Unaffiliated issuers (net of fees and rebates) | — | — | 2 | (8 | ) | |||||||||||
Non-Controlled affiliates (Note 3c) | 211 | — | 42 | 8 | ||||||||||||
|
| |||||||||||||||
Total investment income | 626,652 | 427,446 | 191,901 | 142,955 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 60,675 | 47,909 | 22,623 | 19,159 | ||||||||||||
Other | 110 | 55 | 82 | — | ||||||||||||
|
| |||||||||||||||
Total expenses | 60,785 | 47,964 | 22,705 | 19,159 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (15 | ) | (1 | ) | (790 | ) | — | |||||||||
|
| |||||||||||||||
Net expenses | 60,770 | 47,963 | 21,915 | 19,159 | ||||||||||||
|
| |||||||||||||||
Net investment income | 565,882 | 379,483 | 169,986 | 123,796 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (2,979,338 | ) | (1,152,772 | ) | (491,823 | ) | (816,361 | ) | ||||||||
In-kind redemptions | (3,767,280 | ) | — | (48,113 | ) | — | ||||||||||
Foreign currency transactions | (119,731 | ) | 2,072 | (1,452 | ) | (286 | ) | |||||||||
Forward exchange contracts | — | — | — | (563,725 | ) | |||||||||||
Futures contracts | 137,556 | 16,959 | 12,722 | 10,420 | ||||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (6,728,793 | ) | (1,133,741 | ) | (528,666 | ) | (1,369,952 | ) | ||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 11,259,848 | 4,782,463 | 3,234,966 | 2,217,244 | ||||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 76,233 | 1,557 | 1,566 | 1,102 | ||||||||||||
Futures contracts | (51,333 | ) | (5,200 | ) | (4,533 | ) | (3,852 | ) | ||||||||
Forward exchange contracts | — | — | — | (24,833 | ) | |||||||||||
Change in deferred taxes on unrealized appreciation | (40,944 | ) | — | — | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | 11,243,804 | 4,778,820 | 3,231,999 | 2,189,661 | ||||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | 4,515,011 | 3,645,079 | 2,703,333 | 819,709 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 5,080,893 | $ | 4,024,562 | $ | 2,873,319 | $ | 943,505 | ||||||||
|
|
aForeign taxes withheld on dividends | $79,148 | $23,768 | $11,348 | $11,210 | ||||||||||||
|
|
62 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 565,882 | $ | 11,640,469 | $ | 379,483 | $ | 719,261 | ||||||||
Net realized gain (loss) | (6,728,793 | ) | (7,582,437 | ) | (1,133,741 | ) | 1,622,691 | |||||||||
Net change in unrealized appreciation (depreciation) | 11,243,804 | (22,115,336 | ) | 4,778,820 | (6,642,585 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 5,080,893 | (18,057,304 | ) | 4,024,562 | (4,300,633 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders | (43,025 | ) | (13,252,802 | ) | (448,131 | ) | (632,323 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (42,017,238 | ) | (255,463,490 | ) | — | 6,666,193 | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (36,979,370 | ) | (286,773,596 | ) | 3,576,431 | 1,733,237 | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 57,710,728 | 344,484,324 | 18,653,358 | 16,920,121 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 20,731,358 | $ | 57,710,728 | $ | 22,229,789 | $ | 18,653,358 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 63 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 169,986 | $ | 575,032 | $ | 123,796 | $ | 313,525 | ||||||||
Net realized gain (loss) | (528,666 | ) | 1,745,461 | (1,369,952 | ) | 374,263 | ||||||||||
Net change in unrealized appreciation (depreciation) | 3,231,999 | (4,248,435 | ) | 2,189,661 | (1,517,636 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 2,873,319 | (1,927,942 | ) | 943,505 | (829,848 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders | (170,538 | ) | (618,417 | ) | (364,010 | ) | (155,010 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (5,657,629 | ) | (6,115,499 | ) | — | 2,596,506 | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (2,954,848 | ) | (8,661,858 | ) | 579,495 | 1,611,648 | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 16,059,441 | 24,721,299 | 9,021,338 | 7,409,690 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 13,104,593 | $ | 16,059,441 | $ | 9,600,833 | $ | 9,021,338 | ||||||||
|
|
64 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-four separate funds, four of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of each Fund’s corresponding underlying index.
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities, exchange traded funds and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Funds’ pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Funds’ net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
franklintempleton.com | Semiannual Report | 65 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
66 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
Certain or all Funds entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.
See Note 8 regarding other derivative information.
d. Securities Lending
Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. At September 30, 2020, the Funds had no securities on loan.
e. Income and Deferred Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is
determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2020, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
f. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest Income and estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense. These expenses are paid by the Funds or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
g. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
franklintempleton.com | Semiannual Report | 67 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
h. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on
behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At September 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin LibertyQ Emerging Markets ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | 34,086 | 400,000 | $ | 12,375,393 | ||||||||||||||
Shares redeemed | (1,800,000 | ) | (42,051,324 | ) | (9,400,000 | ) | (267,838,883 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (1,800,000 | ) | $ | (42,017,238 | ) | (9,000,000 | ) | $ | (255,463,490 | ) | ||||||||||
|
| |||||||||||||||||||
Franklin LibertyQ Global Dividend ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 800,000 | $ | 23,907,607 | ||||||||||||||
Shares redeemed | — | — | (600,000 | ) | (17,241,414 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | 200,000 | $ | 6,666,193 | ||||||||||||||
|
|
68 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin LibertyQ Global Equity ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | 1,310 | 200,000 | $ | 6,595,214 | ||||||||||||||
Shares redeemed | (200,000 | ) | (5,658,939 | ) | (400,000 | ) | (12,710,713 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (200,000 | ) | $ | (5,657,629 | ) | (200,000 | ) | $ | (6,115,499 | ) | ||||||||||
|
| |||||||||||||||||||
Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 100,000 | $ | 2,596,506 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | 100,000 | $ | 2,596,506 | ||||||||||||||
|
|
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc (Advisers) | Investment manager | |
Franklin Advisory Services, LLC (FASL) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
a. Management Fees
The Funds pay a unified management fee to Advisors whereby Advisors has agreed to reimburse the Funds’ acquired fund fee and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fees are based on the daily net assets of each of the Funds as follows:
Annualized Fee Rate | ||
Franklin LibertyQ Emerging Markets ETF | 0.45% | |
Franklin LibertyQ Global Dividend ETF | 0.45% | |
Franklin LibertyQ Global Equity ETF | 0.35% | |
Franklin LibertyQ International Equity Hedged ETF | 0.40% |
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
c. Investments in Affiliated Management Investment Companies
Certain or all Funds invest in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended September 30, 2020, investments in affiliated management investment companies were as follows:
Value at Year | Purchases | Sales | Realized Gain | Net Change (Depreciation) | Value at End of | Number of Shares Held at End of Year | Investment Income | |||||||||||||||||||||||||
Franklin LibertyQ Emerging Markets ETF | Income from Securities loaned | |||||||||||||||||||||||||||||||
Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 203,119 | $ | (135,919 | ) | $ | — | $ | — | $ | 67,200 | 67,200 | $ | 211 | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Franklin LibertyQ Global Dividend ETF | Income from Securities loaned | |||||||||||||||||||||||||||||||
Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 100,850 | $ | (100,850 | ) | $ | — | $ | — | $ | — | — | $ | — | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Franklin LibertyQ Global Equity ETF | Income from Securities loaned | |||||||||||||||||||||||||||||||
Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 1,504,265 | $ | (1,380,065 | ) | $ | — | $ | — | $ | 124,200 | 124,200 | $ | 42 | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Franklin LibertyQ International Equity Hedged ETF | Income from Securities loaned | |||||||||||||||||||||||||||||||
Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 14,850 | $ | (14,850 | ) | $ | — | $ | — | $ | — | — | $ | 8 | ||||||||||||||||
|
|
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2020, the capital loss carryforwards were as follows:
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Short term | $ | 14,909,865 | $ | 132,428 | $ | 274,474 | $ | — | ||||||||
Long term | 11,615,623 | 477,064 | 151,477 | — | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 26,525,488 | $ | 609,492 | $ | 425,951 | $ | — | ||||||||
|
|
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
At September 30, 2020, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Cost of investments | $ | 20,950,142 | $ | 22,888,760 | $ | 12,249,409 | $ | 8,874,320 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 3,098,055 | $ | 1,822,404 | $ | 1,954,822 | $ | 1,389,585 | ||||||||
Unrealized depreciation | (3,438,382 | ) | (2,599,496 | ) | (1,025,521 | ) | (656,655 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (340,327 | ) | $ | (777,092 | ) | $ | 929,301 | $ | 732,930 | ||||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions, passive foreign investment company shares and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2020, were as follows:
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Purchases | $ | 6,501,712 | $ | 4,409,481 | $ | 2,478,553 | $ | 2,160,837 | ||||||||
Sales | $ | 28,900,790 | $ | 4,525,040 | $ | 2,923,534 | $ | 2,885,343 |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2020, were as follows:
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Cost of Securities Received | $ | — | $ | — | $ | — | $ | — | ||||||||
Value of Securities Delivereda | $ | 18,261,944 | $ | — | $ | 5,180,438 | $ | — |
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.
The United States and other nations have imposed and could impose additional sanctions on certain issuers in Russia due to regional conflicts. These sanctions could result in the devaluation of Russia’s currency, a downgrade in Russian issuers’ credit ratings, or a decline in the value and liquidity of Russian stocks or other securities. Such sanctions could also adversely affect Russia’s economy. Certain or all Funds may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, if the Fund holds the securities of an issuer that is subject to such sanctions, an immediate freeze of that issuer’s securities could result, impairing the ability of the Fund to buy, sell, receive or deliver those securities. There is also
franklintempleton.com | Semiannual Report | 71 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
6. Concentration of Risk (continued)
the risk that countermeasures could be taken by Russia’s government, which could involve the seizure of the Fund’s assets. These risks could affect the value of the Funds’ portfolio. While the Funds hold securities of certain issuers impacted by the sanctions, existing investments do not presently violate the applicable terms and conditions of the sanctions. The sanctions currently do not affect the Fund’s ability to sell these securities. At September 30, 2020, Franklin LibertyQ Emerging Markets ETF had 10.3% of its net assets invested in Russia. The remaining Funds in the Trust did not have significant investment in Russia.
7. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
8. Other Derivative Information
At September 30, 2020, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
Franklin LibertyQ Emerging Markets ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 497 | a | |||||
|
|
|
| |||||||||
Franklin LibertyQ Global Dividend ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 1,348 | a | |||||
|
|
|
| |||||||||
Franklin LibertyQ Global Equity ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 681 | a | |||||
|
|
|
| |||||||||
Franklin LibertyQ International Equity Hedged ETF | ||||||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 199,292 | Unrealized depreciation on OTC forward exchange contracts | $ | 10,962 | ||||||
|
|
|
|
aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
For the period ended September 30, 2020, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
Franklin LibertyQ Emerging Markets ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity Contract | Futures contracts | $ | 137,556 | Futures contracts | $ | (51,333 | ) | |||||
|
|
|
| |||||||||
Franklin LibertyQ Global Dividend ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity Contract | Futures contracts | $ | 16,959 | Futures contracts | $ | (5,200 | ) | |||||
|
|
|
| |||||||||
Franklin LibertyQ Global Equity ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity Contract | Futures contracts | $ | 12,722 | Futures contracts | $ | (4,533 | ) | |||||
|
|
|
| |||||||||
Franklin LibertyQ International Equity Hedged ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity Contract | Futures contracts | $ | 10,420 | Futures contracts | $ | (3,852 | ) | |||||
Foreign exchange contracts | Forward exchange contracts | (563,725 | ) | Forward exchange contracts | (24,833 | ) | ||||||
|
|
|
| |||||||||
Totals | $ | (553,305 | ) | $ | (28,685 | ) | ||||||
|
|
|
|
For the period ended September 30, 2020, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Futures contracts | $ | 278,862 | $ | 52,829 | $ | 33,009 | $ | 20,727 | ||||||||
Forward exchange contracts | $ | — | $ | — | $ | — | $ | 29,469,392 |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
At September 30, 2020, the Funds’ OTC derivative assets and liabilities are as follows:
Gross and Net Amounts of Assets and Liabilities Presented in the Statements of Assets and Liabilities | ||||||||
Assetsa | Liabilitiesa | |||||||
Franklin LibertyQ International Equity Hedged ETF | ||||||||
Forward exchange contracts | $ | 199,292 | $ | 10,962 | ||||
|
|
aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
At September 30, 2020, the Funds’ OTC derivative assets, which may be offset against the Funds’ OTC derivative liabilities and collateral received from the counterparty, are as follows:
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Receiveda | Cash Collateral Receiveda | Net Amount (Not less than zero) | ||||||||||||||||
Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
BOFA | $ | 87,378 | $ | (10,843 | ) | $ | — | $ | — | $ | 76,535 | |||||||||
DBAB | 40,956 | (22 | ) | — | — | 40,934 | ||||||||||||||
HSBK | 54,431 | (21 | ) | — | — | 54,410 | ||||||||||||||
MSCO | 16,512 | (53 | ) | — | — | 16,459 | ||||||||||||||
UBS AG | 15 | (15 | ) | — | — | — | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 199,292 | $ | (10,954 | ) | $ | — | $ | — | $ | 188,338 | |||||||||
|
|
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
At September 30, 2020, the Funds’ OTC derivative liabilities, which may be offset against the Funds’ OTC derivative assets and collateral pledged to the counterparty, are as follows:
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero) | ||||||||||||||||
Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
BOFA | $ | 10,843 | $ | (10,843 | ) | $ | — | $ | — | $ | — | |||||||||
DBAB | 22 | (22 | ) | — | — | — | ||||||||||||||
HSBK | 21 | (21 | ) | — | — | — | ||||||||||||||
MSCO | 53 | (53 | ) | — | — | — | ||||||||||||||
UBS AG | 23 | (15 | ) | — | — | 8 | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 10,962 | $ | (10,954 | ) | $ | — | $ | — | $ | 8 | |||||||||
|
|
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
See Note 1(c) regarding derivative financial instruments.
See abbreviations on page 77
9. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
franklintempleton.com | Semiannual Report | 75 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
A summary of inputs used as of September 30, 2020, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin LibertyQ Emerging Markets ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 20,606,595 | $ | 3,220 | $ | — | $ | 20,609,815 | ||||||||
Short-Term Investments | 67,200 | — | — | 67,200 | ||||||||||||
|
| |||||||||||||||
$ | 20,673,795 | $ | 3,220 | $ | — | $ | 20,677,015 | |||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 497 | $ | — | $ | — | $ | 497 | ||||||||
|
| |||||||||||||||
Franklin LibertyQ Global Dividend ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 22,111,668 | $ | — | $ | — | $ | 22,111,668 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 1,348 | $ | — | $ | — | $ | 1,348 | ||||||||
|
| |||||||||||||||
Franklin LibertyQ Global Equity ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 13,042,385 | $ | 12,125 | $ | — | $ | 13,054,510 | ||||||||
Short-Term Investments | 124,200 | — | — | 124,200 | ||||||||||||
|
| |||||||||||||||
$ | 13,166,585 | $ | 12,125 | $ | — | $ | 13,178,710 | |||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 681 | $ | — | $ | — | $ | 681 | ||||||||
|
| |||||||||||||||
Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 9,577,619 | $ | 29,631 | $ | — | $ | 9,607,250 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 199,292 | $ | — | $ | 199,292 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 10,962 | $ | — | $ | 10,962 | ||||||||
|
|
aFor detailed categories, see the accompanying Statement of Investments.
bIncludes common and preferred stocks.
76 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
10. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Selected Portfolio | Counterparty | |||||
ADR | American Depositary Receipt | BOFA | Bank of America Corp. | |||
ETF | Exchange Traded Fund | HSBK | HSBC Bank PLC | |||
GDR | Global Depositary Receipt | IDR | International Depository Receipt | |||
IDR | International Depositary Receipt | MSCO | Morgan Stanley | |||
NVDR | Non-Voting Depositary Receipt | UBSW | UBS AG | |||
REIT | Real Estate Investment Trust |
franklintempleton.com | Semiannual Report | 77 |
FRANKLIN TEMPLETON ETF TRUST
Tax Information (unaudited)
At March 31, 2020, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Funds on these investments. As shown in the table below, the Funds hereby reports to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 12, 2020, to treat their proportionate share of foreign taxes paid by the Funds as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.
The following tables provides a detailed analysis of foreign tax paid, foreign source income, and foreign source qualified dividends as reported by the Funds to shareholders of record.
Fund Name | Adjusted Foreign Tax Paid per Share | Foreign Source Income per share | Foreign Source Qualified Dividend per share | |||||||||
Franklin LibertyQ Emerging Markets ETF | $ | 1.5967 | $ | 12.8988 | $ | 9.4184 | ||||||
Franklin LibertyQ Global Dividend ETF | $ | 0.0553 | $ | 0.6883 | $ | 0.6883 | ||||||
Franklin LibertyQ INTL Equity Hedged ETF | $ | 0.0580 | $ | 0.8583 | $ | 0.4681 |
Foreign Tax Paid Per Share is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.
Foreign Source Income Per Share is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.1
Foreign Source Qualified Dividends Per Share is the amount per share of foreign source qualified dividends plus any foreign taxes withheld on these dividends. These amounts represent the portion of the Foreign Source Income Per Share that were derived from qualified foreign securities held by the Fund.1
By mid-February 2021, shareholders will receive Form 1099-DIV which will include their share of taxes paid and foreign source income distributed during the calendar year 2020. The Foreign Source Income reported on Form 1099-DIV has not been adjusted for the rate differential on foreign source qualified dividend income. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
1. Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to Form 1116 for more information.
78 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin LibertyQ Emerging Markets ETF
Franklin LibertyQ Global Dividend ETF
Franklin LibertyQ Global Equity ETF
Franklin LibertyQ International Equity Hedged ETF
(each a Fund)
At a meeting held on May 14, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from the Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of each Fund, as well as each Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent
to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the effectiveness of those plans during the pandemic, and developing strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity and liquidity risk management. The Board further noted its ongoing engagement with management, the Funds’ auditor and State Street Bank and Trust Company, the Funds’ custodian, about their responses to the pandemic and the pandemic’s impact on their operating continuity, as well as the impact on the Funds (especially with respect to valuation and liquidity).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT
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organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions currently provided by FT or an affiliate to other funds in the complex, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. Specifically, the Board discussed with management the expected impact of the Legg Mason acquisition on FT and the Funds, including management’s expectations with respect to the integration of Legg Mason’s exchange-traded funds into the FT family of funds. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, in her role as President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for the one-year period ended February 29, 2020. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with the Manager about the performance of the Funds to date, particularly as compared to peers, and referenced earlier discussions with the Manager on matters related to, among other things, the importance of performance to asset growth and growth of market share, the comparability of peer data, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding the Manager’s strategy behind the overall product line-up, the sources of asset growth, the nature of the Manager’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted the Manager’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
Franklin LibertyQ Emerging Markets ETF – The Performance Universe for the Fund included the Fund and all retail and
institutional emerging markets funds and exchange-traded funds. The Fund commenced operations on June 1, 2016, and thus has been in operation for less than five years. The Board noted that the Fund’s annualized total return for the one- and three-year periods was below the median and in the fifth quintile (worst) of its Performance Universe. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 29, 2020, the Fund’s tracking error was within the tolerance anticipated for the Fund. The Board concluded that the Fund’s performance was satisfactory.
Franklin LibertyQ Global Dividend ETF and Franklin LibertyQ International Equity Hedged ETF – The Performance Universe for the Franklin LibertyQ Global Dividend ETF included the Fund and all retail and institutional global equity income funds and exchange-traded funds. The Performance Universe for the Franklin LibertyQ International Equity Hedged ETF included the Fund and all retail and institutional international multi-cap growth funds and exchange-traded funds. The Funds commenced operations on June 1, 2016, and thus have been in operation for less than five years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians of their respective Performance Universes, but for the three-year period were below the medians of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board noted that for the one-year period ended February 29, 2020, each Fund’s tracking error was within the tolerance anticipated for such Fund. The Board concluded that the Funds’ performance was satisfactory.
Franklin LibertyQ Global Equity ETF – The Performance Universe for the Fund included the Fund and all retail and institutional global multi-cap core funds and exchange-traded funds. The Fund commenced operations on June 1, 2016, and thus has been in operation for less than five years. The Board noted that the Fund’s annualized total return for the one- and three-year periods was above the median of its Performance Universe. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 29, 2020, the Fund’s tracking error was within the tolerance anticipated
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for the Fund. The Board concluded that the Fund’s performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin LibertyQ Emerging Markets ETF – The Expense Group for the Fund was comprised of pure-index and strategic beta exchange-traded funds, which included the Fund and eight other emerging markets funds. The Board noted that the Management Rate for the Fund was below the median of its Expense Group, and the actual total expense ratio for the Fund was equal to the median of its Expense Group. The Board further noted that effective December 1, 2017, the Fund implemented a unified management fee (Unified Fee). The Board also noted that pursuant to the Unified Fee arrangement the Manager reimburses the Fund for all of its acquired fund fees and expenses (if any) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s investment management fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses, (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the
Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (Unified Fee Arrangement). The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin LibertyQ Global Dividend ETF – The Expense Group for the Fund was comprised of pure-index and strategic beta exchange-traded funds, which included the Fund and five other global equity income funds. The Board noted that the Management Rate and the actual total expense ratio for the Fund were below the medians and in the first quintile (least expensive) of its Expense Group. The Board further noted that effective December 1, 2017, the Fund implemented a Unified Fee. The Board also noted the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin LibertyQ Global Equity ETF – The Expense Group for the Fund was comprised of pure-index and strategic beta exchange-traded funds, which included the Fund and three other global multi-cap core funds. The Board noted that the Management Rate for the Fund was equal to and the actual total expense ratio for the Fund was below the medians of its Expense Group. The Board also noted the small size of the Expense Group. The Board further noted that effective December 1, 2017, the Fund implemented a Unified Fee. The Board also noted the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin LibertyQ International Equity Hedged ETF – The Expense Group for the Fund was comprised of pure-index and strategic beta exchange-traded funds, which included the Fund and five other international multi-cap growth funds. The Board noted that the Management Rate for the Fund was slightly above and the actual total expense ratio for the Fund was below the medians of its Expense Group. The Board further noted that effective December 1, 2017, the Fund implemented a Unified Fee. The Board also noted the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most
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recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged to review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up-front expenditures by the Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements, notably in the area of cybersecurity protections.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that each Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is
not anticipated that any of the Funds will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board also considered the Manager’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board also noted that the Funds commenced operations on June 1, 2016 and that, as of December 31, 2019, each Fund’s net assets were $25 million or below, except for those of the Franklin LibertyQ Emerging Markets ETF, which were approximately $197 million. The Board recognized that there would not likely be any economies of scale for these Funds until each Fund’s assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program – Non-In-Kind ETF
Franklin LibertyQ Emerging Markets ETF
Franklin LibertyQ Global Dividend ETF
Franklin LibertyQ Global Equity ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis)
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and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the
program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Liquidity Risk Management Program – In-Kind ETF
Franklin LibertyQ International Equity Hedged ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management
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for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report Franklin Templeton ETF Trust | ||||||
Investment Manager | Distributor | Investor Services | ||||
Franklin Advisory Services, LLC | Franklin Templeton Distributors, Inc. (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
© 2020 Franklin Templeton Investments. All rights reserved. | ETF S 11/20 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2020
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S. Low Volatility ETF | |
Franklin Liberty Ultra Short Bond ETF | Franklin Liberty U.S. Treasury Bond ETF | |
Franklin Liberty U.S. Core Bond ETF |
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
Visit franklintempleton.com/investor/investments-and-solutions/investment-options/etfs/ for fund updates and documents.
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
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SEMIANNUAL REPORT
Franklin Liberty Investment Grade Corporate ETF
This semiannual report for Franklin Liberty Investment Grade Corporate ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks a high level of current income as is consistent with prudent investing, while seeking preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate debt securities and investments.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +12.47% based on market price and +11.86% based on net asset value (NAV).1 In comparison, the Bloomberg Barclays U.S. Corporate Investment Grade Index posted a +10.66% total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, advanced during the six-month period as markets adjusted to the disruption created by the novel coronavirus (COVID-19). Before the beginning of the period, investor flight to safety had driven Treasury yields (which are inverse to prices) near record lows, while corporate bond yields increased, reflecting increased credit risk amid widespread economic disruption. Throughout the reporting period, however, U.S. Federal Reserve (Fed) support and the gradual reopening of the economy diminished investors’ concerns about solvency, and corporate bonds rebounded significantly. This advance was tempered somewhat in August 2020, as a change in long-standing inflation policy at the Fed led yields on most bonds to rise.
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Oil, Gas & Consumable Fuels | 13.9% | |||
Banks | 13.2% | |||
Electric Utilities | 7.8% | |||
Insurance | 5.9% | |||
Energy Equipment & Services | 3.6% | |||
Health Care Providers & Services | 3.5% | |||
Diversified Telecommunication Services | 3.4% | |||
Biotechnology | 2.9% | |||
Tobacco | 2.8% | |||
Internet & Direct Marketing Retail | 2.3% |
The U.S. Federal Reserve (Fed), which had already lowered the federal funds target rate to a range of 0.00%–0.25%, implemented unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning, significantly expanding its balance sheet. In August 2020, the Fed announced that future interest rates would remain low, even if inflation persistently exceeded the Fed’s 2% target. The announcement was a major change in inflation policy that affirmed the Fed’s commitment to providing economic stimulus until the economy establishes a strong growth trend.
U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, rose only slightly during the reporting period. Yields on 10-year Treasuries remained at historically low levels throughout the period despite the widening U.S. federal budget deficit and a massive increase in issuance. Mortgage-backed securities (MBS), as measured by the Bloomberg Barclays MBS Index, also posted modestly positive returns, aided by the Fed’s decision to purchase agency MBS.
U.S. corporate bond performance varied somewhat based on credit rating, reflecting the recovery of credit markets following the initial COVID-19 shock. As Fed support tempered investors’ concerns over credit quality, prices for corporate bonds rebounded, particularly for the lower-rated segment of the market. Consequently, high-yield corporate bonds, as
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 31.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
represented by the Bloomberg Barclays U.S. Corporate High Yield Bond Index, advanced significantly. Investment-grade corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate Bond Index, also posted a strong performance.
Investment Strategy
The Fund invests primarily in U.S. dollar-denominated corporate debt securities issued by U.S. and foreign companies. The Fund may invest in debt securities of any maturity or duration.
The Fund’s focus on the credit quality of its portfolio is intended to reduce credit risk and help to preserve the Fund’s capital. The Fund may also invest a portion of its assets in convertible securities, preferred securities and U.S. Treasury securities, and generally expects to invest a portion of its assets in cash, cash equivalents and high quality money market securities, including short-term U.S. government securities, commercial paper, repurchase agreements and affiliated or unaffiliated money market funds. The Fund may invest up to 40% of its net assets in foreign securities, including those in developing markets, and up to 15% of its net assets in non-U.S. dollar-denominated securities. The Fund may enter into certain derivative transactions to seek to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. The Fund’s portfolio is constructed by taking into account our desired duration and yield curve exposure, total return potential, as well as the appropriate diversification and risk profile at the issue, company and industry level.
Manager’s Discussion
U.S. financial markets staged an impressive rebound over the six-month period as support from massive government fiscal stimulus and aggressive Fed interventions helped reverse the pandemic-induced March selloff. Optimism was bolstered by the reopening of parts of the global economy, as well as hopes that a vaccine for COVID-19 would be developed by the end of the year.
Investment-grade (IG) corporate bond spreads rallied during the period, rebounding from wide levels seen in March, when
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
U.S. Treasury 30 Yr. Bond 12/21/2020 | 1.7% | |||
Total Capital International SA, senior note, | 1.6% | |||
Prudential PLC, senior note, 3.125%, 4/14/30 | 1.6% | |||
AON Corp., senior note, 2.80%, 5/15/30 | 1.6% | |||
HSBC Holdings PLC, senior note, | 1.6% | |||
Fiserv Inc., senior bond, 3.50%, 7/01/29 | 1.5% | |||
Enel Finance International NV, senior note, 144A, 3.625%, 5/25/27 | 1.5% | |||
Enterprise Products Operating LLC, senior bond, 4.15%, 10/16/28 | 1.4% | |||
AT&T Inc., senior note, 3.80%, 2/15/27 | 1.3% | |||
Energy Transfer Operating LP, senior note, | 1.3% |
dislocations in the market drove spreads beyond typical recession levels. In response, the Fed pledged to support the IG market through purchases of exchange-traded funds, purchases of IG bonds in the secondary market, and offering direct lending to higher-quality companies. As a result, market function improved, lowering bid/ask spreads and attracting funds back into the sector. Strong demand supported the market as the period progressed despite heavy new issue supply, as investors looked to IG bonds as a relative safe source of yield.
Meanwhile, economic data such as non-farm payrolls and manufacturing sentiment continued to improve during the period. Standard & Poor’s® 500 Index corporate earnings were weaker versus the prior year, although investors mostly looked through what they perceived as the short-term influence of the economic shutdowns. Government bond yields were stable during the period.
Lower government bond yields globally helped demand for IG corporate bonds, a higher yielding alternative. Corporate bond issuance levels set records for five of the six months during the period, as IG companies sought to improve cash liquidity or pay down short-term borrowings.
The Fund outperformed its benchmark on a net basis for the period. Quality allocation was a major positive performance driver, as well as industry allocation and yield curve positioning. Security selection was a slight detractor.
The Fund’s overweight position in BBB rated bonds helped performance, as lower quality bonds outperformed in the recovery from March’s market selloff. We had retained this
franklintempleton.com | Semiannual Report | 3 |
FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
position based on our view that the Fund’s individual holdings were well placed to withstand the economic slowdown caused by the pandemic.
Industry allocations that contributed to performance included an overweight in the energy sector and underweights in the banking and consumer non-cyclical sectors. We kept the Fund’s duration positioning close to neutral relative to the benchmark for most of the period. Contributors on an individual company basis included Truist Financial, Aflac and Devon Energy. Detractors included Valero Energy, Schlumberger and Waste Management.
The Fund held primarily cash bonds during the period, but used credit index derivatives to gain market exposure on a temporary, tactical basis. The Fund also used interest rate futures contracts to manage duration exposure.
Thank you for your participation in Franklin Liberty Investment Grade Corporate ETF. We look forward to serving your future investment needs.
Marc Kremer, CFA
Shawn Lyons, CFA
Thomas Runkel, CFA
Pururav Thoutireddy, Ph.D.
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
CFA® is a trademark owned by CFA Institute.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (10/5/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +11.86% | +12.47% | +11.86% | +12.47% | ||||||||||||
1-Year | +7.86% | +7.60% | +7.86% | +7.60% | ||||||||||||
3-Year | +19.91% | +19.52% | +6.24% | +6.12% | ||||||||||||
Since Inception (10/3/16) | +22.16% | +22.06% | +5.14% | +5.12% |
30 Day Standardized Yield6 | ||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | ||||||
2.93% | 1.69% | 1.55% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 6 for Performance Summary footnotes.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.443417 |
Total Annual Operating Expenses7
With Fee Waiver | Without Fee Waiver | |||
0.35% | 0.58% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s investments in foreign securities involve certain risks including currency fluctuations, and economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,118.60 | $ | 1.86 | $ | 1,023.31 | $ | 1.78 | 0.35 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
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Franklin Liberty Ultra Short Bond ETF
This semiannual report for Franklin Liberty Ultra Short Bond ETF covers the period since the Fund’s inception on July 14, 2020, through September 30, 2020.
Your Fund’s Goal and Main Investments
A high level of current income as is consistent with prudent investing, while seeking preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and investments that provide exposure to bonds.
Performance Overview
For the period since inception on July 14, 2020, through September 30, 2020, the Fund posted cumulative total returns of +0.42% based on market price and +0.38% based on net asset value (NAV). In comparison, the ICE BofA U.S. 3-Month Treasury Bill Index, which tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months, posted a +0.03% total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 11.
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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, had a slight negative return during the period since the Fund’s inception on July 14, 2020, through September 30, 2020, as markets adjusted to the disruption created by the novel coronavirus (COVID-19). Before the beginning of the period, investor flight to perceived safety had driven Treasury yields (which are inverse to prices) near record lows, while corporate bond yields increased, reflecting increased credit risk amid widespread economic disruption. Throughout the reporting period, however, U.S. Federal Reserve (Fed) support and the gradual reopening of the economy diminished many investors’ concerns about solvency, and corporate bonds seemed to
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 18.2% | |||
Capital Markets | 8.0% | |||
Health Care Providers & Services | 6.2% | |||
Energy Equipment & Services | 4.2% | |||
Biotechnology | 4.1% | |||
Pharmaceuticals | 4.1% | |||
Consumer Finance | 4.0% | |||
Beverages | 4.0% | |||
Oil, Gas & Consumable Fuels | 4.0% | |||
Chemicals | 2.2% |
stabilize. The corporate bond market’s recovery was somewhat tempered in August 2020, as a change in long-standing inflation policy at the Fed led yields on most bonds to rise.
The Fed maintained the federal funds target rate at a range of 0.00%–0.25% and continued its program of unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning, significantly expanding its balance sheet. In August 2020, the Fed announced that future interest rates would potentially remain low, even if inflation persistently exceeded the Fed’s 2% target. The announcement was a major change in inflation policy that affirmed the Fed’s commitment to providing economic stimulus until the economy establishes a strong growth trend.
U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, declined slightly during the reporting period. Yields on 10-year Treasuries remained at historically low levels throughout the period despite the widening U.S. federal budget deficit and a massive increase in issuance. Mortgage-backed securities (MBS), as measured by the Bloomberg Barclays MBS Index, posted slightly positive total returns, aided by the Fed’s program to purchase agency MBS.
U.S. corporate bond performance varied somewhat based on credit rating, reflecting the recovery of credit markets following the initial COVID-19 shock. As Fed support tempered
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 54.
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FRANKLIN LIBERTY ULTRA SHORT BOND ETF
many investors’ concerns over credit quality, prices for corporate bonds rebounded, particularly for the lower-rated segment of the market. Consequently, high-yield corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate High Yield Bond Index, advanced. In contrast, investment-grade corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate Bond Index, posted a slight negative return.
Investment Strategy
The Fund targets securities with an estimated average portfolio duration of one year or less. The Fund invests predominantly in U.S. dollar denominated, investment-grade debt securities and investments. The Fund generally expects to invest a substantial portion of its assets in cash, cash equivalents and high-quality money market securities, including commercial paper, certificates of deposit, repurchase agreements and affiliated or unaffiliated money market funds. The Fund may invest in securities issued or guaranteed by the U.S. government or by non-U.S. governments or their respective agencies or instrumentalities, including mortgage-backed securities and inflation-indexed securities issued by the U.S. Treasury. The Fund may also invest in mortgage dollar rolls, asset-backed securities and U.S. dollar denominated foreign securities
The Fund may enter into certain interest rate-related derivatives to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. The Fund’s portfolio is constructed by taking into account our desired duration and yield curve exposure, total return potential, as well as the appropriate diversification and risk profile at the issue, company and industry level.
Manager’s Discussion
Government and Fed stimulus efforts have helped fuel a rebound in the U.S. economy and financial markets in the third quarter. Consumer confidence rebounded in September to a post-pandemic high as Americans became more confident about both the current and near-term outlooks. Retail sales and existing home sales also posted gains from the
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
JPMorgan Chase & Co., senior note, FRN thereafter, 2.056%, 4/25/23 | 4.0% | |||
Discover Card Execution Note Trust, Series 2017-A5, Class A5, A5, FRN thereafter, 0.785%, 12/15/26 | 4.0% | |||
Citibank Credit Card Issuance Trust, Series 2017-A5, Class A5, A5, FRN thereafter, 0.81%, 4/22/26 | 4.0% | |||
The Walt Disney Co. | 4.0% | |||
HSBC USA Inc. 1/04/21 | 4.0% | |||
LYB International Finance BV, senior note, | 2.2% | |||
Healthcare Realty Trust Inc., senior bond, | 2.1% | |||
CVS Health Corp., senior note, 3.70%, 3/09/23 | 2.1% | |||
Liberty Mutual Group Inc., senior note, 144A, | 2.1% | |||
Capital One Financial Corp., senior note, 144A, | 2.1% |
depressed levels in the second quarter. The upturn in the U.S. and global manufacturing sector gathered steam as the Institute for Supply Management’s manufacturing survey remained comfortably above its neutral expansion/contraction threshold throughout the period. While still well below February’s pre-pandemic highs, U.S. employment levels have increased sharply, and the nation’s unemployment rate fell beginning in June through period-end.
With the federal funds target rate anchored at 0.00%–0.25%, short-term government bond yields remained stable during the period, with the two-year U.S. Treasury yield moving from 0.16% in mid-July to 0.13% at period-end. Lower government bond yields globally helped demand for investment grade (IG) corporate bonds, a higher yielding alternative. As a result, IG corporate bond spreads rallied during the period, aided by the Fed’s pledge to support the IG market particularly on the short end of the yield curve. Most high quality short-term fixed income sectors posted modestly positive returns for the period with spread sectors outperforming government sectors.
Our overweighting to corporate credit was a major contributor to relative performance as tighter spreads and Fed support helped IG credit outperform short-term Treasuries. Industry allocations that contributed to performance included overweighted positions in banking, energy and real estate investment trusts. Individual contributors included Canadian Imperial Bank, Bank of Montreal and MPLX, while detractors included Bank of NY Mellon, American Express Credit Account Master Trust and Woodside Finance. Duration positioning had minimal impact on relative performance.
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FRANKLIN LIBERTY ULTRA SHORT BOND ETF
While the Fund has the ability to invest in derivative securities, it held no derivatives during the period under review.
Thank you for your participation in Franklin Liberty Ultra Short Bond ETF. We look forward to serving your future investment needs.
David Yuen, CFA, FRM
Shawn Lyons, CFA
Thomas Runkel, CFA
Kent Burns, CFA
Johnson Ng, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
10 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY ULTRA SHORT BOND ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (7/16/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
Since Inception (7/14/20) | +0.38% | +0.42% | +1.79% | +1.97% |
30 Day Standardized Yield6 | ||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | ||||||
2.05% | 0.49% | -2.91% |
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 12 for Performance Summary footnotes.
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FRANKLIN LIBERTY ULTRA SHORT BOND ETF
PERFORMANCE SUMMARY
Distributions (7/14/20–9/30/20)
Net Investment Income |
$0.094651 |
Total Annual Operating Expenses7
With Fee Waiver | Without Fee Waiver | |||
0.15% | 0.75% |
All investments involve risk, including possible loss of principal. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s focus on the credit quality of its portfolio is intended to reduce credit risk and help to preserve the Fund’s capital. The Fund is not a money market fund and does not seek to maintain a stable net value of $1.00 per share. Interest rate movements, unanticipated changes in mortgage prepayment rates and other risk factors will affect the Fund’s share price and yield. Bond prices, and thus a Fund’s share price, generally move in opposite direction of interest rates. Therefore, as the price of bonds in the Fund adjust to rise in interest rates, the Fund’s share price may decline. By focusing its investments in financials related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wide variety of industries. Because the Fund concentrates in a specific industry or group of industries, there is also the risk that the Fund will perform poorly during a slump in demand for securities of companies and such industries. The Fund’s investment in foreign securities involve certain risks including currency fluctuations, and economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities involves special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
12 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY ULTRA SHORT BOND ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 x $ 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 7/14/201 | Ending Account Value 9/30/20 | Expenses Paid During Period 7/14/20–9/30/202,3 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/202,3 | Net Annualized Expense Ratio3 | |||||||||||||||||
$1,000.00 | $ | 1,003.80 | $ | 0.32 | $ | 1,010.36 | $ | 0.32 | 0.15 | % |
1. 7/14/20 for Actual; 4/1/20 for Hypothetical.
2. 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. For Actual expenses, the multiplier is 79/366 to reflect the number of days since commencement of operations.
3. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 13 |
Franklin Liberty U.S. Core Bond ETF
This semiannual report for Franklin Liberty U.S. Core Bond ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks total return. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds of U.S. issuers.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +4.50% based on market price and +4.42% based on net asset value (NAV). In comparison, the Bloomberg Barclays U.S. Aggregate Bond Index, which tracks the U.S. investment-grade, taxable bond market, posted a +3.53% total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 16.
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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, advanced during the six-month period as markets adjusted to the disruption created by the novel coronavirus (COVID-19). Before the beginning of the period, investor flight to safety had driven Treasury yields (which are inverse to prices) near record lows, while corporate bond yields increased, reflecting increased credit risk amid widespread economic disruption. Throughout the reporting period, however, U.S. Federal Reserve (Fed) support and the gradual reopening of the economy diminished investors’ concerns about solvency, and corporate bonds rebounded significantly. This advance was tempered somewhat in August 2020, as a change in long-standing inflation policy at the Fed led yields on most bonds to rise.
The U.S. Federal Reserve (Fed), which had already lowered the federal funds target rate to a range of 0.00%–0.25%,
Portfolio Composition | ||||
Based on Total Net Assets as of 9/30/20 | ||||
U.S. Government & Agency Securities | 33.7% | |||
Corporate Bonds & Notes | 31.8% | |||
Mortgage-Backed Securities | 26.7% | |||
Foreign Government and Agency Securities | 2.9% | |||
Municipal Bonds | 2.2% | |||
Long Futures | 1.7% | |||
Asset-Backed Securities | 1.3% | |||
Investments from Cash Collateral Received for Loaned Securities | 0.9% | |||
Short Futures | (4.0)% |
implemented unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning, significantly expanding its balance sheet. In August 2020, the Fed announced that future interest rates would remain low, even if inflation persistently exceeded the Fed’s 2% target. The announcement was a major change in inflation policy that affirmed the Fed’s commitment to providing economic stimulus until the economy establishes a strong growth trend.
U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, rose only slightly during the reporting period. Yields on 10-year Treasuries remained at historically low levels throughout the period despite the widening U.S. federal budget deficit and a massive increase in issuance. Mortgage-backed securities (MBS), as measured by the Bloomberg Barclays MBS Index, also posted modestly positive returns, aided by the Fed’s decision to purchase agency MBS.
U.S. corporate bond performance varied somewhat based on credit rating, reflecting the recovery of credit markets following the initial COVID-19 shock. As Fed support tempered investors’ concerns over credit quality, prices for corporate bonds rebounded, particularly for the lower-rated segment of the market. Consequently, high-yield corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate High Yield Bond Index, advanced significantly. Investment-grade corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate Bond Index, also posted a strong performance.
1. Source: Factset.
The index is unmanaged and includes reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 38.
14 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY U.S. CORE BOND ETF
Investment Strategy
The Fund invests predominantly in investment-grade bonds of U.S. issuers, including government, corporate-debt, mortgage-backed and asset-backed securities. The Fund’s investments in mortgage-backed securities include securities that are issued or guaranteed by the U.S. government, its agencies or instrumentalities, and private issuers, including commercial mortgage-backed securities. Under normal market conditions, the Fund is generally expected to have sector, credit and duration exposures comparable to its benchmark index. However, we make investment decisions based upon our own fundamental analysis, which affects the Fund’s sector, credit and duration exposures so that they may vary from the benchmark index.
In addition, the Fund may purchase or sell mortgage-backed securities on a delayed delivery or forward commitment basis through the to-be-announced (TBA) market. With TBA transactions, the particular securities to be delivered must meet specified terms and conditions.
For purposes of pursuing its investment goal, the Fund may enter into various interest-rate and credit-related derivatives, principally U.S. Treasury futures, interest-rate swaps and credit default swaps. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select interest rates, durations or credit risks. The Fund may enter into certain derivative transactions to seek to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. We may consider selling a security when we believe the security has become fully valued due to either its price appreciation or changes in the issuer’s fundamentals, or when we believe another security is a more attractive investment opportunity.
Manager’s Discussion
During the six-month period, the Fund outperformed its benchmark. In terms of drivers of return relative to the benchmark, our overweighted allocation to the investment-grade corporate credit sector as well as security selection within the sector was a major contributor to returns. Our allocation to sovereign emerging markets debt also enhanced results, although this effect was partially offset by negative
Top 10 Holdings | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
U.S Treasure Note, 2.125%, 2/29/24 | 6.1% | |||
U.S. Treasury Note, 1.875%, 9/30/22 | 4.2% | |||
U.S. Treasury Note, 1.375%, 8/31/23 | 4.0% | |||
U.S. Treasury Note, 0.50%, 3/31/25 | 3.2% | |||
U.S. Treasury Bond, 3.50%, 2/15/39 | 2.4% | |||
Federal National Mortgage Association, 2.50%,8/1/50 | 2.3% | |||
Federal National Mortgage Association, 3.00%,8/1/50 | 2.2% | |||
U.S. Treasury Bond, 2.25%, 8/15/46 | 2.1% | |||
U.S. Treasury Note, 1.50%, 3/31/23 | 1.9% | |||
Federal National Mortgage Association, 3.00%, 3/1/50 | 1.9% |
security selection within the sector. Additionally, security selection within the fixed-rate agency MBS sector also contributed to returns. In contrast, our underweighted positioning in commercial MBS weighed on returns over the period. Although the Fund maintained a duration similar to that of the benchmark, yield curve positioning marginally detracted from performance.
Thank you for your participation in Franklin Liberty U.S. Core Bond ETF. We look forward to serving your future investment needs.
David Yuen, CFA, FRM
Patrick Klein, Ph.D.
Tina Chou
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN LIBERTY U.S. CORE BOND ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/19/19), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative��Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +4.42% | +4.50% | +4.42% | +4.50% | ||||||||||||
1-Year | +6.90% | +6.85% | +6.90% | +6.85% | ||||||||||||
Since Inception (9/17/19) | +7.68% | +7.76% | +7.41% | +7.48% |
30 Day Standardized Yield6 | ||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | ||||||
2.49% | 1.22% | 1.21% |
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 17 for Performance Summary footnotes.
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FRANKLIN LIBERTY U.S. CORE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.341680 |
Total Annual Operating Expenses7
With Fee Waiver | Without Fee Waiver | |||
0.15% | 0.19% |
All investments involve risks, including possible loss of principal. Interest rate movements, unscheduled mortgage prepayments and other risk factors will affect the Fund’s share price and yield. Bond prices, and thus a Fund’s share price, generally move in the opposite direction of interest rates. Therefore, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN LIBERTY U.S. CORE BOND ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 x $ 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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,044.20 | $ | 0.77 | $ | 1,024.32 | $ | 0.76 | 0.15 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
18 | Semiannual Report | franklintempleton.com |
Franklin Liberty U.S. Low Volatility ETF
This semiannual report for Franklin Liberty U.S. Low Volatility ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation with an emphasis on lower volatility. Under normal market conditions, the Fund invests at least 80% of its net assets in U.S. investments.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +26.69% based on market price and +26.43% based on net asset value (NAV). In comparison, the Russell 1000® Index posted a +33.36% total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 22.
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.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), advanced significantly during the six months under review, as markets began to recover from the disruption created by the novel coronavirus (COVID-19). Before the period began, equity prices declined significantly due to the impact of the virus and related restrictions on travel, gatherings and economic activity. However, a steady equity market recovery amid unprecedented monetary and fiscal support led stocks, as measured by the S&P 500, to reach all-time price highs in early September 2020. Nonetheless, several risks tempered investors’ enthusiasm in the period’s final month, including persistent COVID-19 infection rates, fading hopes for additional stimulus, and uncertainties surrounding the upcoming presidential election.
Shortly before the beginning of the reporting period, the U.S. Federal Reserve (Fed) lowered the federal funds target rate to a range of 0.00%–0.25% and implemented a policy of
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Information Technology | 26.5% | |||
Health Care | 14.2% | |||
Consumer Discretionary | 12.4% | |||
Communication Services | 10.1% | |||
Financials | 9.8% | |||
Industrials | 8.7% | |||
Consumer Staples | 6.6% | |||
Real Estate | 3.2% | |||
Utilities | 2.9% | |||
Materials | 2.8% |
unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning. Additionally, the Fed announced in August 2020 that future interest rates could potentially remain low, even if inflation persistently exceeded the Fed’s 2% target. During the period, the federal government also passed several rounds of fiscal stimulus, providing aid to businesses, state and local governments and individuals.
The monetary and fiscal stimulus measures helped equities gain substantially for the period’s first five months, even as the economy struggled. The longest U.S. economic expansion in history ended in February (before the beginning of the period), according to the National Bureau of Economic Research, and the country slipped into a deep recession with second-quarter 2020 gross domestic product (GDP) declining at a record pace. Social distancing requirements weighed on businesses that require in-person contact, particularly brick-and-mortar retailers and travel and leisure companies. As a result, the unemployment rate surged to 14.7% in April as many businesses announced mass layoffs, but conditions began to improve as stimulus measures helped support consumer spending, and unemployment fell to 7.9% by period-end.2 Economic growth resumed in the third quarter at the fastest annualized rate on record as many businesses reopened, but the GDP remained below its pre-pandemic level.
1. Source: Morningstar. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
2. Source: Bureau of Labor Statistics.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 47.
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FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
The improving economic conditions buoyed stocks, and many investors were optimistic the economy would continue to improve as restrictions eased and potential COVID-19 vaccines and treatments were developed. Late in the period, however, some signs emerged that the economic recovery was stalling, including persistently high unemployment claims and low consumer confidence, leading stocks to reverse some of their earlier gains.
Investment Strategy
The Fund invests primarily in equity securities (principally common stocks) of U.S. companies.3 The Fund seeks capital appreciation, while providing a lower level of volatility than the broader equity market as measured by the Russell 1000® Index, meaning the Fund seeks returns that fluctuate less than the returns of the Russell 1000® Index. We apply a fundamentally driven “bottom-up” research process to create a starting universe of eligible securities across a large number of sectors derived from the holdings of a number of Franklin Templeton equity funds. The investment manager screens that universe on a quarterly basis in order to identify those securities with the lowest realized volatility relative to their corresponding sectors. The Fund’s sector weightings generally are based on the current sector weightings within the Russell 1000® Index. Individual securities in the Fund’s portfolio are generally weighted equally within each sector. The investment manager may, from time to time, make adjustments to the Fund’s portfolio as a result of corporate actions, changes to the volatility profile of the Fund’s holdings, or for risk management related purposes.
Manager’s Discussion
The Fund generated strong positive absolute returns but underperformed its benchmark, the Russell 1000® Index, for the six-month period. Stock selection in the information technology sector was a significant detractor from relative performance during the period. While our holding in Apple delivered absolute gains, its underweighting resulted in negative relative performance. A position in Automatic Data Processing was another key detractor from relative returns. The provider of human resources management software faced significant headwinds related to COVID-19 with the destabilization of the job market. In contrast, an investment in chipmaker Synopsys added to the Fund’s results.
Security selection and an underweighting in Amazon.com detracted from relative performance in the consumer
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
Apple Inc. Information Technology | 1.6% | |||
Intuit Inc. Information Technology | 1.6% | |||
Microsoft Corp. Information Technology | 1.6% | |||
Synopsys Inc. Information Technology | 1.6% | |||
Automatic Data Processing Inc. Information Technology | 1.5% | |||
Texas Instruments Inc. Information Technology | 1.5% | |||
Black Knight Inc. Information Technology | 1.5% | |||
Analog Devices Inc. Information Technology | 1.5% | |||
Mastercard Inc., A Information Technology | 1.5% | |||
Oracle Corp. Information Technology | 1.4% |
discretionary sector. The e-commerce giant saw high demand for its retail, entertainment and cloud services as COVID-19 stay-at-home orders were extended. Nearly every major business operated by the company is becoming more relevant as a result of the pandemic crisis and the broader digital transformation opportunity. Conversely, the consumer discretionary sector included several top contributors, including Tractor Supply, Target and NVR. Both Tractor Supply and Target have benefited from early designations as essential retailers during the pandemic, while low interest rates and high demand for new construction lifted the shares of homebuilder NVR.
Low oil prices and refining margins along with a slowdown in energy demand have been a drag on the shares of oil companies, including our holding in Royal Dutch Shell. Elsewhere, Baxter International was a drag on relative returns in the health care sector. The company primarily focuses on products to treat hemophilia, kidney disease, immune disorders and other chronic and acute medical conditions. In contrast, a position in United Parcel Service was a leading contributor in the industrials sector. The package delivery company has profited from the boom in e-commerce as a result of COVID-19.
3. “U.S. companies” are those that (i) are organized under the laws of, or have a principal office in, or for whose securities the principal trading market is, the U.S.; (ii) derive 50% or more of their total revenue or profit from either goods or services produced, or sales made, in the U.S.; or (iii) have 50% or more of their assets in the U.S.
See www.franklintempletondatasources.com for additional data provider information.
20 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
Thank you for your participation in Franklin Liberty U.S. Low Volatility ETF. We look forward to serving your future investment needs.
Todd Brighton, CFA
Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 21 |
FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/22/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +26.43% | +26.69% | +26.43% | +26.69% | ||||||||||||
1-Year | +7.67% | +7.83% | +7.67% | +7.83% | ||||||||||||
3-Year | +44.24% | +45.00% | +12.99% | +13.18% | ||||||||||||
Since Inception (9/20/16) | +66.19% | +66.54% | +13.44% | +13.50% |
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 23 for Performance Summary footnotes.
22 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.288658 |
Total Annual Operating Expenses5
With Fee Waiver | Without Fee Waiver | |||
0.29% | 0.53% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. There can be no guarantee that the Fund’s volatility strategy will be successful, and achieving the Fund’s volatility strategy does not mean the Fund will achieve a positive or competitive return. The volatility strategy can also be expected to limit the Fund’s participation in market price appreciation when compared to similar funds that do not attempt this strategy. Smaller and midsize-company stocks have historically experienced more price volatility than larger company stocks, especially over the short term. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 x $ 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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,264.30 | $ | 1.65 | $ | 1,023.61 | $ | 1.47 | 0.29 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
24 | Semiannual Report | franklintempleton.com |
Franklin Liberty U.S. Treasury Bond ETF
This semiannual report for Franklin Liberty U.S. Treasury Bond ETF covers the period since the Fund’s inception on June 9, 2020, through September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks income. Under normal market conditions, the Fund invests at least 80% of its net assets in direct obligations of the U.S. Treasury.
Performance Overview
For the period since inception on June 9, 2020, through September 30, 2020, the Fund posted cumulative total returns of +1.43% based on market price and +1.31% based on net asset value (NAV). In comparison, the Bloomberg Barclays U.S. Treasury Index, which measures the performance of U.S. Treasury bills, posted a +1.26% total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 27.
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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, advanced during the period since the Fund’s inception on June 9, 2020, through September 30, 2020, as markets adjusted to the disruption created by the novel coronavirus (COVID-19). Before the beginning of the period, investor flight to perceived safety had driven Treasury yields (which are inverse to prices) near record lows, while corporate bond yields increased, reflecting increased credit risk amid widespread economic disruption. Throughout the reporting period, however, U.S. Federal Reserve (Fed) support and the gradual reopening of the economy diminished many investors’ concerns about solvency, and corporate bonds rebounded. This advance was tempered somewhat in August 2020, as a change in long-standing inflation policy at the Fed led yields on most bonds to rise.
Portfolio Composition | ||||
Based on Total Net Assets as of 9/30/20 | ||||
U.S. Government & Agency Securities | 96.5% | |||
Mortgage-Backed Securities | 2.4% | |||
Short-Term Investments & Other Net Assets | 1.1% |
The Fed maintained the federal funds target rate at a range of 0.00%–0.25% and continued its program of unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning, significantly expanding its balance sheet. In August 2020, the Fed announced that future interest rates would potentially remain low, even if inflation persistently exceeded the Fed’s 2% target. The announcement was a major change in inflation policy that affirmed the Fed’s commitment to providing economic stimulus until the economy establishes a strong growth trend.
U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, rose slightly during the reporting period. Yields on 10-year Treasuries remained at historically low levels throughout the period despite the widening U.S. federal budget deficit and a massive increase in issuance. Mortgage-backed securities (MBS), as measured by the Bloomberg Barclays MBS Index, also posted slightly positive total returns, aided by the Fed’s program to purchase agency MBS.
U.S. corporate bond performance varied somewhat based on credit rating, reflecting the recovery of credit markets following the initial COVID-19 shock. As Fed support tempered many investors’ concerns over credit quality, prices for corporate bonds rebounded, particularly for the lower-rated segment of the market. Consequently, high-yield corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate High Yield Bond Index, advanced. Investment-grade corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate Bond Index, also posted a positive performance.
Investment Strategy
The Fund invests at least 80% of its net assets in direct obligations of the U.S. Treasury, including Treasury bonds, bills and notes and investments that provide exposure to direct
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 51.
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN LIBERTY U.S. TREASURY BOND ETF
obligations of the U.S. Treasury. The Fund may also invest in securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities, including government sponsored entities and mortgage-backed securities (MBS).
In addition, the Fund may purchase or sell MBS on a delayed delivery or forward commitment basis through the to-be-announced (TBA) market. With TBA transactions, the particular securities to be delivered must meet specified terms and conditions.
To pursue its investment goal, the Fund may enter into certain interest rate-related derivative transactions, principally interest rate/bond futures contracts and interest rate swaps. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select interest rates or durations. These derivatives may be used to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. We may consider selling a security when we believe the security has become fully valued due to either its price appreciation or changes in the issuer’s fundamentals, or when we believe another security is a more attractive investment opportunity.
Manager’s Discussion
During the period since the Fund’s inception on June 9, 2020, through September 30, 2020, the Fund posted a positive return, outperforming the benchmark Bloomberg Barclays U.S. Treasury Index.
Our non-benchmark allocation to Treasury Inflation-Protected Securities as well as security selection within the fixed-rate agency MBS sector were the primary contributors to relative performance. In contrast, our overall duration positioning detracted from relative returns over the period.
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
U.S. Treasury Note , 2.50%, 5/15/24 | 3.6% | |||
U.S. Treasury Note , 2.125%, 3/31/24 | 3.3% | |||
U.S. Treasury Note , 1.50%, 8/31/21 | 3.2% | |||
U.S. Treasury Note , 2.00%, 4/30/24 | 3.2% | |||
U.S. Treasury Note , 2.875%, 11/30/23 | 3.1% | |||
U.S. Treasury Note , 2.375%, 8/15/24 | 3.1% | |||
U.S. Treasury Note , 0.25%, 8/31/25 | 3.0% | |||
U.S. Treasury Note , 2.375%, 2/29/24 | 3.0% | |||
U.S. Treasury Note , 1.625%, 5/15/26 | 3.0% | |||
U.S. Treasury Note , 2.50%, 2/15/22 | 2.9% |
Thank you for your participation in Franklin Liberty U.S. Treasury Bond ETF. We look forward to serving your future investment needs.
Warren Keyser
Patrick Klein, Ph.D.
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
26 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY U.S. TREASURY BOND ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/11/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
Since Inception (6/9/20) | +1.31% | +1.43% | +4.30% | +4.70% |
30 Day Standardized Yield6 | ||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | ||||||
1.98% | 0.74% | 0.37% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 28 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 27 |
FRANKLIN LIBERTY U.S. TREASURY BOND ETF
PERFORMANCE SUMMARY
Distributions (6/9/20–9/30/20)
Net Investment Income |
$0.128580 |
Total Annual Operating Expenses7
With Fee Waiver | Without Fee Waiver | |||
0.09% | 0.59% |
All investments involve risks, including possible loss of principal. Notional exposure figures are intended to estimate the portfolio’s exposure, including any hedged or increased exposure through certain derivatives held in the portfolio (or their underlying reference assets). Average duration and average weighted maturity reflect certain derivatives held in the portfolio (or their underlying reference assets). Portfolio composition percentages may not total 100% and may be negative due to rounding, use of any derivatives, unsettled trades or other factors. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
28 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY U.S. TREASURY BOND ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 x $ 7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||||||
Beginning Account Value 6/9/201 | Ending Account Value 9/30/20 | Expenses Paid During Period 6/9/20–9/30/202,3 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/202,3 | Net Annualized Expense Ratio3 | |||||||||||||||||
$1,000.00 | $ | 1,013.10 | $ | 0.28 | $ | 1,015.20 | $ | 0.28 | 0.09 | % |
1. 6/9/20 for Actual; 4/1/20 for Hypothetical.
2. 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. For Actual expenses, the multiplier is 114/366 to reflect the number of days since commencement of operations.
3. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty Investment Grade Corporate ETF
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 24.22 | $ | 24.09 | $ | 23.97 | $ | 24.21 | $ | 25.00 | ||||||||||
|
| |||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.32 | 0.73 | 0.82 | 0.80 | 0.32 | |||||||||||||||
Net realized and unrealized gains (losses) | 2.54 | 0.27 | 0.21 | (0.22 | ) | (0.78 | ) | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.86 | 1.00 | 1.03 | 0.58 | (0.46 | ) | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.44 | ) | (0.81 | ) | (0.91 | ) | (0.82 | ) | (0.33 | ) | ||||||||||
Net realized gains | — | (0.06 | ) | — | — | — | ||||||||||||||
|
| |||||||||||||||||||
Total Distributions | (0.44 | ) | (0.87 | ) | (0.91 | ) | (0.82 | ) | (0.33 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 26.64 | $ | 24.22 | $ | 24.09 | $ | 23.97 | $ | 24.21 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 11.86% | 4.02% | 4.46% | 2.38% | (1.83)% | |||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.50% | 0.58% | 1.07% | 1.04% | 1.06% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.35% | 0.35% | 0.35% | 0.37% | 0.40% | |||||||||||||||
Net investment income | 2.39% | 2.86% | 3.49% | 3.27% | 2.76% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s) | $1,029,827 | $553,338 | $18,065 | $39,554 | $53,268 | |||||||||||||||
Portfolio turnover ratef | 34.64%g | 52.17%g | 22.02% | 63.14% | 17.85% |
aFor the period October 3, 2016 (commencement of operations) to March 31, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 34.64% | 52.17% | —% | —% | —% |
30 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty Investment Grade Corporate ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 98.7% | ||||||||||||||
Aerospace & Defense 1.2% | ||||||||||||||
Lockheed Martin Corp., senior note, 4.07%, 12/15/42 | United States | 4,100,000 | $ | 5,127,628 | ||||||||||
Northrop Grumman Corp., senior bond, 5.25%, 5/01/50 | United States | 5,000,000 | 7,193,448 | |||||||||||
|
| |||||||||||||
12,321,076 | ||||||||||||||
|
| |||||||||||||
Air Freight & Logistics 0.6% | ||||||||||||||
FedEx Corp., senior bond, 4.75%, 11/15/45 | United States | 5,400,000 | 6,688,807 | |||||||||||
|
| |||||||||||||
Airlines 0.5% | ||||||||||||||
a | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 10/20/25 | United States | 5,000,000 | 5,135,578 | ||||||||||
|
| |||||||||||||
Banks 13.2% | ||||||||||||||
Bancolombia SA, senior note, 3.00%, 1/29/25 | Colombia | 6,200,000 | 6,215,872 | |||||||||||
Bank of America Corp., | United States | 4,300,000 | 4,552,328 | |||||||||||
sub. bond, 4.183%, 11/25/27 | United States | 10,150,000 | 11,659,849 | |||||||||||
a | BNP Paribas SA, senior note, 144A, 4.705% to 1/10/24, FRN thereafter, 1/10/25 | France | 11,900,000 | 13,184,802 | ||||||||||
a | BPCE SA, senior note, 144A, 5.70%, 10/22/23 | France | 11,700,000 | 13,120,489 | ||||||||||
Citigroup Inc., | United States | 6,600,000 | 7,417,340 | |||||||||||
senior note, 2.876% to 07/24/22, FRN thereafter, 7/24/23 | United States | 1,500,000 | 1,557,230 | |||||||||||
HSBC Holdings PLC, | United Kingdom | 3,000,000 | 3,111,922 | |||||||||||
senior note, 1.645% to 4/18/25, FRN thereafter, 4/18/26 | United Kingdom | 16,500,000 | 16,471,438 | |||||||||||
JPMorgan Chase & Co., | United States | 8,000,000 | 8,536,922 | |||||||||||
sub. bond, 4.25%, 10/01/27 | United States | 7,100,000 | 8,273,507 | |||||||||||
a | National Australia Bank Ltd., sub. note, 144A, 2.332%, 8/21/30 | Australia | 12,000,000 | 11,887,710 | ||||||||||
SVB Financial Group, senior note, 3.125%, 6/05/30 | United States | 2,100,000 | 2,349,978 | |||||||||||
Truist Bank, sub. note, 3.30%, 5/15/26 | United States | 6,800,000 | 7,635,846 | |||||||||||
Truist Financial Corp., sub. bond, 3.875%, 3/19/29 | United States | 7,300,000 | 8,382,886 | |||||||||||
Wachovia Corp., Subordinated, 5.50%, 8/01/35 | United States | 3,600,000 | 4,789,989 | |||||||||||
Wells Fargo & Co., sub. bond, 4.75%, 12/07/46 | United States | 5,185,000 | 6,488,583 | |||||||||||
|
| |||||||||||||
135,636,691 | ||||||||||||||
|
| |||||||||||||
Beverages 1.4% | ||||||||||||||
Anheuser-Busch InBev Worldwide Inc., | Belgium | 9,000,000 | 10,257,718 | |||||||||||
senior bond, 5.80%, 1/23/59 | Belgium | 3,000,000 | 4,290,075 | |||||||||||
|
| |||||||||||||
14,547,793 | ||||||||||||||
|
| |||||||||||||
Biotechnology 2.9% | ||||||||||||||
AbbVie Inc., | United States | 3,000,000 | 3,562,158 | |||||||||||
a senior note, 144A, 2.95%, 11/21/26 | United States | 12,000,000 | 13,089,950 | |||||||||||
Amgen Inc., senior note, 2.45%, 2/21/30 | United States | 10,000,000 | 10,618,310 | |||||||||||
Gilead Sciences Inc., senior bond, 4.80%, 4/01/44 | United States | 1,800,000 | 2,320,801 | |||||||||||
|
| |||||||||||||
29,591,219 | ||||||||||||||
|
| |||||||||||||
Building Products 0.9% | ||||||||||||||
a | Carrier Global Corp., senior note, 144A, 3.577%, 4/05/50 | United States | 8,500,000 | 9,017,681 | ||||||||||
|
| |||||||||||||
Capital Markets 2.0% | ||||||||||||||
Brixmor Operating Partnership LP, senior bond, 4.125%, 5/15/29 | United States | 3,200,000 | 3,475,785 | |||||||||||
Credit Suisse Group AG, | Switzerland | 3,900,000 | 4,353,091 | |||||||||||
a senior note, 144A, 2.997% to 12/14/22, FRN thereafter, 12/14/23 | Switzerland | 6,400,000 | 6,666,399 | |||||||||||
Morgan Stanley, senior note, 2.188% to 4/28/25, FRN thereafter, 4/28/26 | United States | 1,000,000 | �� | 1,048,374 |
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Capital Markets (continued) | ||||||||||||||
The Goldman Sachs Group Inc., | United States | 3,200,000 | $ | 3,315,559 | ||||||||||
sub. note, 4.25%, 10/21/25 | United States | 1,475,000 | 1,677,662 | |||||||||||
|
| |||||||||||||
20,536,870 | ||||||||||||||
|
| |||||||||||||
Chemicals 1.0% | ||||||||||||||
EI du Pont de Nemours and Co., senior note, 1.70%, 7/15/25 | United States | 1,500,000 | 1,557,220 | |||||||||||
The Sherwin-Williams Co., senior bond, 2.30%, 5/15/30 | United States | 8,400,000 | 8,788,134 | |||||||||||
|
| |||||||||||||
10,345,354 | ||||||||||||||
|
| |||||||||||||
Commercial Services & Supplies 0.2% | ||||||||||||||
a | Ashtead Capital Inc., secured note, second lien, 144A, 4.125%, 8/15/25 | United Kingdom | 1,770,000 | 1,821,025 | ||||||||||
|
| |||||||||||||
Consumer Finance 1.8% | ||||||||||||||
Capital One Financial Corp., | ||||||||||||||
senior bond, 3.80%, 1/31/28 | United States | 10,500,000 | 11,743,821 | |||||||||||
senior note, 3.20%, 1/30/23 | United States | 2,900,000 | 3,063,299 | |||||||||||
a | Credit Agricole SA, senior note, 144A, 1.907% to 6/16/25, FRN thereafter, 6/16/26 | France | 4,000,000 | 4,096,380 | ||||||||||
|
| |||||||||||||
18,903,500 | ||||||||||||||
|
| |||||||||||||
Containers & Packaging 0.9% | ||||||||||||||
WRKCo Inc., | ||||||||||||||
senior bond, 4.90%, 3/15/29 | United States | 6,300,000 | 7,774,501 | |||||||||||
senior note, 3.90%, 6/01/28 | United States | 1,000,000 | 1,145,119 | |||||||||||
|
| |||||||||||||
8,919,620 | ||||||||||||||
|
| |||||||||||||
Diversified Financial Services 1.6% | ||||||||||||||
AON Corp., senior note, 2.80%, 5/15/30 | United States | 15,400,000 | 16,667,672 | |||||||||||
|
| |||||||||||||
Diversified Telecommunication Services 3.4% | ||||||||||||||
AT&T Inc., | United States | 3,000,000 | 3,557,327 | |||||||||||
senior note, 3.80%, 2/15/27 | United States | 11,800,000 | 13,320,482 | |||||||||||
Bell Canada Inc., senior bond, 4.30%, 7/29/49 | Canada | 6,000,000 | 7,398,857 | |||||||||||
France Telecom SA, senior bond, 9.00%, 3/01/31 | France | 6,600,000 | 10,772,570 | |||||||||||
|
| |||||||||||||
35,049,236 | ||||||||||||||
|
| |||||||||||||
Electric Utilities 7.8% | ||||||||||||||
Commonwealth Edison Co., first mortgage, Secured, 4.00%, 3/01/48 | United States | 3,500,000 | 4,303,831 | |||||||||||
Duke Energy Corp., senior bond, 4.80%, 12/15/45 | United States | 2,565,000 | 3,262,489 | |||||||||||
Duke Energy Progress LLC, senior bond, 2.50%, 8/15/50 | United States | 5,000,000 | 4,849,926 | |||||||||||
a | EDP Finance BV, senior note, 144A, 1.71%, 1/24/28 | Portugal | 8,000,000 | 7,963,514 | ||||||||||
a | Electricite de France SA, senior note, 144A, 4.50%, 9/21/28 | France | 2,200,000 | 2,616,831 | ||||||||||
Enel Finance International NV, | Italy | 1,300,000 | 1,611,644 | |||||||||||
a senior note, 144A, 3.625%, 5/25/27 | Italy | 13,500,000 | 15,026,566 | |||||||||||
Exelon Corp., senior bond, 4.05%, 4/15/30 | United States | 10,000,000 | 11,723,092 | |||||||||||
Georgia Power Co., | United States | 3,545,000 | 4,247,596 | |||||||||||
senior bond, 4.75%, 9/01/40 | United States | 2,950,000 | 3,635,245 | |||||||||||
PSEG Power LLC, senior note, 3.85%, 6/01/23 | United States | 4,100,000 | 4,414,180 | |||||||||||
a | Saudi Electricity Global Sukuk Co. 2, senior bond, 144A, 5.06%, 4/08/43 | Saudi Arabia | 300,000 | 360,698 | ||||||||||
Virginia Electric and Power Co., senior note, 3.50%, 3/15/27 | United States | 7,200,000 | 8,202,217 | |||||||||||
a | Vistra Operations Co. LLC, senior secured note, first lien, 144A, 3.55%, 7/15/24 | United States | 7,400,000 | 7,886,713 | ||||||||||
|
| |||||||||||||
80,104,542 | ||||||||||||||
|
|
32 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Electronic Equipment, Instruments & Components 2.0% | ||||||||||||||
Flex Ltd., senior note, 3.75%, 2/01/26 | Singapore | 5,300,000 | $ | 5,795,778 | ||||||||||
FLIR Systems Inc., senior note, 2.50%, 8/01/30 | United States | 9,700,000 | 9,940,347 | |||||||||||
Jabil Inc., senior note, 3.60%, 1/15/30 | United States | 5,000,000 | 5,325,775 | |||||||||||
|
| |||||||||||||
21,061,900 | ||||||||||||||
|
| |||||||||||||
Energy Equipment & Services 3.6% | ||||||||||||||
Baker Hughes a GE Co. LLC/Baker Hughes Co-Obligor Inc., | United States | 6,800,000 | 7,227,156 | |||||||||||
senior bond, 4.08%, 12/15/47 | United States | 2,485,000 | 2,487,601 | |||||||||||
Schlumberger Holdings Corp., | ||||||||||||||
a senior bond, 144A, 4.30%, 5/01/29 | United States | 6,500,000 | 7,222,146 | |||||||||||
a senior note, 144A, 3.75%, 5/01/24 | United States | 2,600,000 | 2,824,798 | |||||||||||
Total Capital International SA, senior note, 3.455%, 2/19/29 | France | 14,700,000 | 16,911,807 | |||||||||||
|
| |||||||||||||
36,673,508 | ||||||||||||||
|
| |||||||||||||
Entertainment 0.9% | ||||||||||||||
The Walt Disney Co., | United States | 4,300,000 | 6,338,896 | |||||||||||
senior note, 1.75%, 1/13/26 | United States | 2,400,000 | 2,496,512 | |||||||||||
|
| |||||||||||||
8,835,408 | ||||||||||||||
|
| |||||||||||||
Equity Real Estate Investment Trusts (REITs) 1.7% | ||||||||||||||
Essex Portfolio LP, senior bond, 2.65%, 3/15/32 | United States | 7,000,000 | 7,404,083 | |||||||||||
Simon Property Group LP, senior note, 3.375%, 12/01/27 | United States | 9,000,000 | 9,632,696 | |||||||||||
|
| |||||||||||||
17,036,779 | ||||||||||||||
|
| |||||||||||||
Food & Staples Retailing 0.8% | ||||||||||||||
Walmart Inc., senior bond, 3.95%, 6/28/38 | United States | 7,000,000 | 8,782,431 | |||||||||||
|
| |||||||||||||
Gas Utilities 0.3% | ||||||||||||||
Dominion Energy Gas Holdings LLC, senior bond, 3.90%, 11/15/49 | United States | 3,000,000 | 3,505,105 | |||||||||||
|
| |||||||||||||
Health Care Providers & Services 3.5% | ||||||||||||||
Anthem Inc, Sr. Unsecured, 3.50%, 8/15/24 | United States | 4,000,000 | 4,376,180 | |||||||||||
Anthem Inc., senior bond, 3.70%, 9/15/49 | United States | 1,000,000 | 1,116,207 | |||||||||||
Cigna Corp., | United States | 5,450,000 | 7,113,979 | |||||||||||
senior note, 4.50%, 2/25/26 | United States | 6,500,000 | 7,584,953 | |||||||||||
CVS Health Corp., senior bond, 5.30%, 12/05/43 | United States | 8,300,000 | 10,610,592 | |||||||||||
HCA Inc., senior secured bond, first lien, 4.50%, 2/15/27 | United States | 5,100,000 | 5,733,296 | |||||||||||
|
| |||||||||||||
36,535,207 | ||||||||||||||
|
| |||||||||||||
Hotels, Restaurants & Leisure 0.4% | ||||||||||||||
Marriott International Inc., senior bond, 3.125%, 6/15/26 | United States | 4,700,000 | 4,676,717 | |||||||||||
|
| |||||||||||||
Household Durables 0.6% | ||||||||||||||
Mohawk Industries Inc., senior bond, 3.625%, 5/15/30 | United States | 5,500,000 | 6,033,180 | |||||||||||
|
| |||||||||||||
Household Products 2.1% | ||||||||||||||
a | Kimberly-Clark de Mexico SAB de CV, senior bond, 144A, 2.431%, 7/01/31 | Mexico | 10,100,000 | 10,298,415 | ||||||||||
The Procter & Gamble Co., senior bond, 3.00%, 3/25/30 | United States | 10,000,000 | 11,617,607 | |||||||||||
|
| |||||||||||||
21,916,022 | ||||||||||||||
|
| |||||||||||||
Industrial Conglomerates 0.7% | ||||||||||||||
Honeywell International Inc., senior bond, 1.95%, 6/01/30 | United States | 7,000,000 | 7,376,771 | |||||||||||
|
| |||||||||||||
Insurance 5.9% | ||||||||||||||
Aflac Inc., senior bond, 4.75%, 1/15/49 | United States | 4,750,000 | 6,122,413 | |||||||||||
Arch Capital Group Ltd., senior bond, 3.635%, 6/30/50 | United States | 5,900,000 | 6,363,179 | |||||||||||
AXA SA 8.60%, 12/15/30 | France | 8,100,000 | 12,394,925 | |||||||||||
Marsh & McLennan Cos. Inc., senior bond, 4.90%, 3/15/49 | United States | 5,700,000 | 7,968,988 | |||||||||||
MetLife Inc., junior sub. bond, 6.40%, 12/15/66 | United States | 4,910,000 | 6,115,447 |
franklintempleton.com | Semiannual Report | 33 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Insurance (continued) | ||||||||||||||
Prudential PLC, senior note, 3.125%, 4/14/30 | United Kingdom | 15,100,000 | $ | 16,836,695 | ||||||||||
The Allstate Corp., senior bond, 4.20%, 12/15/46 | United States | 4,000,000 | 5,001,288 | |||||||||||
|
| |||||||||||||
60,802,935 | ||||||||||||||
|
| |||||||||||||
Interactive Media & Services 1.3% | ||||||||||||||
a | Tencent Holdings Ltd., senior note, 144A, 3.595%, 1/19/28 | China | 12,000,000 | 13,222,794 | ||||||||||
|
| |||||||||||||
Internet & Direct Marketing Retail 2.3% | ||||||||||||||
Alibaba Group Holding Ltd., | China | 5,800,000 | 5,952,718 | |||||||||||
senior note, 3.40%, 12/06/27 | China | 9,700,000 | 10,877,176 | |||||||||||
Amazon.com Inc., senior bond, 2.70%, 6/03/60 | United States | 6,400,000 | 6,620,880 | |||||||||||
|
| |||||||||||||
23,450,774 | ||||||||||||||
|
| |||||||||||||
IT Services 1.5% | ||||||||||||||
Fiserv Inc., senior bond, 3.50%, 7/01/29 | United States | 13,800,000 | 15,747,196 | |||||||||||
|
| |||||||||||||
Machinery 0.8% | ||||||||||||||
Caterpillar Inc., senior note, 2.60%, 4/09/30 | United States | 7,400,000 | 8,136,444 | |||||||||||
|
| |||||||||||||
Media 2.0% | ||||||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, | United States | 6,000,000 | 6,242,811 | |||||||||||
senior secured note, first lien, 4.50%, 2/01/24 | United States | 1,500,000 | 1,664,000 | |||||||||||
Comcast Corp., senior bond, 4.95%, 10/15/58 | United States | 5,900,000 | 8,488,190 | |||||||||||
Fox Corp., senior bond, 5.476%, 1/25/39 | United States | 3,000,000 | 4,016,581 | |||||||||||
|
| |||||||||||||
20,411,582 | ||||||||||||||
|
| |||||||||||||
Multi-Utilities 0.9% | ||||||||||||||
Berkshire Hathaway Energy Co., | United States | 5,800,000 | 6,739,304 | |||||||||||
Sr. Unsecured, 5.15%, 11/15/43 | United States | 1,900,000 | 2,612,897 | |||||||||||
|
| |||||||||||||
9,352,201 | ||||||||||||||
|
| |||||||||||||
Multiline Retail 1.2% | ||||||||||||||
Dollar Tree Inc., | United States | 5,050,000 | 5,433,661 | |||||||||||
senior note, 4.00%, 5/15/25 | United States | 6,100,000 | 6,889,426 | |||||||||||
|
| |||||||||||||
12,323,087 | ||||||||||||||
|
| |||||||||||||
Oil, Gas & Consumable Fuels 13.9% | ||||||||||||||
Aker BP ASA, | Norway | 3,350,000 | 3,310,311 | |||||||||||
a senior note, 144A, 3.75%, 1/15/30 | Norway | 5,000,000 | 4,868,547 | |||||||||||
Canadian Natural Resources Ltd., senior bond, 3.85%, 6/01/27 | Canada | 7,700,000 | 8,311,436 | |||||||||||
Cheniere Corpus Christi Holdings LLC, senior secured note, first lien, 5.875%, 3/31/25 | United States | 6,700,000 | 7,642,586 | |||||||||||
Chevron Corp., senior bond, 3.078%, 5/11/50 | United States | 4,200,000 | 4,511,131 | |||||||||||
Devon Energy Corp., Sr. Unsecured, 4.75%, 5/15/42 | United States | 2,700,000 | 2,510,481 | |||||||||||
Energy Transfer Operating LP, | ||||||||||||||
senior bond, 6.05%, 6/01/41 | United States | 1,100,000 | 1,106,037 | |||||||||||
senior note, 4.50%, 4/15/24 | United States | 12,500,000 | 13,253,303 | |||||||||||
Enterprise Products Operating LLC, | United States | 12,200,000 | 14,271,059 | |||||||||||
senior bond, 5.10%, 2/15/45 | United States | 1,970,000 | 2,293,218 | |||||||||||
Exxon Mobil Corp., | United States | 7,800,000 | 8,435,165 | |||||||||||
senior bond, 3.567%, 3/06/45 | United States | 5,000,000 | 5,510,395 |
34 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||||||||
Kinder Morgan Inc., | United States | 2,100,000 | $ | 2,503,337 | ||||||||||
senior note, 4.30%, 3/01/28 | United States | 11,500,000 | 13,098,701 | |||||||||||
MPLX LP, | United States | 1,775,000 | 1,989,160 | |||||||||||
senior note, 4.875%, 12/01/24 | United States | 5,000,000 | 5,587,999 | |||||||||||
senior note, 4.875%, 6/01/25 | United States | 8,000,000 | 9,080,734 | |||||||||||
Shell International Finance BV, senior bond, 3.25%, 4/06/50 | Netherlands | 7,000,000 | 7,382,108 | |||||||||||
The Williams Companies Inc., senior note, 4.30%, 3/04/24 | United States | 2,200,000 | 2,409,202 | |||||||||||
The Williams Cos. Inc., senior bond, 4.85%, 3/01/48 | United States | 1,900,000 | 2,136,007 | |||||||||||
TransCanada PipeLines Ltd., | Canada | 8,200,000 | 9,480,699 | |||||||||||
senior note, 6.10%, 6/01/40 | Canada | 3,400,000 | 4,518,177 | |||||||||||
Valero Energy Corp., senior note, 4.35%, 6/01/28 | United States | 8,000,000 | 8,994,649 | |||||||||||
|
| |||||||||||||
143,204,442 | ||||||||||||||
|
| |||||||||||||
Paper & Forest Products 0.5% | ||||||||||||||
Suzano Austria GmbH, senior bond, 3.75%, 1/15/31 | Brazil | 5,000,000 | 5,018,500 | |||||||||||
|
| |||||||||||||
Pharmaceuticals 2.1% | ||||||||||||||
Bristol-Myers Squibb Co., | ||||||||||||||
senior bond, 4.125%, 6/15/39 | United States | 2,700,000 | 3,406,029 | |||||||||||
senior bond, 5.00%, 8/15/45 | United States | 4,200,000 | 5,882,299 | |||||||||||
Royalty Pharma PLC, senior secured note, 1.75%, 9/02/27 | Unted States | 2,200,000 | 2,201,654 | |||||||||||
Takeda Pharmaceutical Co. Ltd. 3.175%, 7/09/50 | Japan | 10,200,000 | 10,500,818 | |||||||||||
|
| |||||||||||||
21,990,800 | ||||||||||||||
|
| |||||||||||||
Real Estate Management & Development 0.6% | ||||||||||||||
ERP Operating LP, senior bond, 4.50%, 7/01/44 | United States | 3,500,000 | 4,496,743 | |||||||||||
Healthcare Trust of America Holdings LP, senior bond, 3.75%, 7/01/27 | United States | 1,300,000 | 1,447,537 | |||||||||||
|
| |||||||||||||
5,944,280 | ||||||||||||||
|
| |||||||||||||
Road & Rail 1.3% | ||||||||||||||
Burlington Northern Santa Fe LLC, Sr. Unsecured, 5.75%, 5/01/40 | United States | 3,700,000 | 5,308,737 | |||||||||||
CSX Corp., | ||||||||||||||
senior bond, 4.25%, 3/15/29 | United States | 4,600,000 | 5,546,430 | |||||||||||
senior bond, 4.25%, 11/01/66 | United States | 1,800,000 | 2,239,631 | |||||||||||
|
| |||||||||||||
13,094,798 | ||||||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 1.1% | ||||||||||||||
Intel Corp., senior note, 3.70%, 7/29/25 | United States | 5,000,000 | 5,690,172 | |||||||||||
Maxim Integrated Products Inc., senior note, 3.375%, 3/15/23 | United States | 2,900,000 | 3,089,660 | |||||||||||
Micron Technology Inc., senior note, 2.497%, 4/24/23 | United States | 2,100,000 | 2,182,448 | |||||||||||
|
| |||||||||||||
10,962,280 | ||||||||||||||
|
| |||||||||||||
Software 1.6% | ||||||||||||||
Microsoft Corp., | ||||||||||||||
senior bond, 2.675%, 6/01/60 | United States | 3,600,000 | 3,797,453 | |||||||||||
senior note, 2.65%, 11/03/22 | United States | 2,500,000 | 2,616,253 | |||||||||||
ServiceNow Inc., senior bond, 1.40%, 9/01/30 | United States | 10,300,000 | 10,038,147 | |||||||||||
|
| |||||||||||||
16,451,853 | ||||||||||||||
|
| |||||||||||||
Specialty Retail 1.0% | ||||||||||||||
AutoZone Inc., | ||||||||||||||
senior bond, 1.65%, 1/15/31 | United States | 7,000,000 | 6,891,463 | |||||||||||
senior note, 3.75%, 4/18/29 | United States | 3,300,000 | 3,819,773 | |||||||||||
|
| |||||||||||||
10,711,236 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Tobacco 2.8% | ||||||||||||||
a | BAT International Finance PLC, senior note, 144A, 3.95%, 6/15/25 | United Kingdom | 6,500,000 | $ | 7,233,225 | |||||||||
Imperial Brands Finance PLC, | ||||||||||||||
a senior bond, 144A, 3.875%, 7/26/29 | United Kingdom | 3,400,000 | 3,694,120 | |||||||||||
a senior note, 144A, 4.25%, 7/21/25 | United Kingdom | 11,765,000 | 13,030,882 | |||||||||||
Reynolds American Inc., senior bond, 5.85%, 8/15/45 | United Kingdom | 3,705,000 | 4,509,658 | |||||||||||
|
| |||||||||||||
28,467,885 | ||||||||||||||
|
| |||||||||||||
Wireless Telecommunication Services 1.9% | ||||||||||||||
a | Sprint Spectrum Co. LLC, senior secured bond, first lien, 144A, | United States | 5,500,000 | 6,493,437 | ||||||||||
a | Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC/Sprint Spectrum Co. | |||||||||||||
III LLC, first lien, 144A, 3.36%, 3/20/23 | United States | 1,950,000 | 1,974,892 | |||||||||||
T-Mobile USA Inc., | ||||||||||||||
a senior note, 144A, 2.05%, 2/15/28 | United States | 3,550,000 | 3,632,680 | |||||||||||
a senior note, 144A, 3.75%, 4/15/27 | United States | 7,000,000 | 7,843,780 | |||||||||||
|
| |||||||||||||
19,944,789 | ||||||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $983,972,625) | 1,016,957,568 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $983,972,625) | 1,016,957,568 | |||||||||||||
|
| |||||||||||||
Short Term Investments 0.8% | ||||||||||||||
U.S. Government & Agency Securities (Cost $8,180,000) 0.8% | ||||||||||||||
b | FHLB, 10/01/20 | United States | 8,180,000 | 8,180,000 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $992,152,625) 99.5% | 1,025,137,568 | |||||||||||||
Other Assets, less Liabilities 0.5% | 4,689,651 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 1,029,827,219 | ||||||||||||
|
|
See Abbreviations on page 76.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $207,051,256, representing 20.1% of net assets.
bThe security was issued on a discount basis with no stated coupon rate.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Index Contracts | ||||||||||||||||||||
U.S. Treasury 30 Yr. Bond | Long | 102 | $ | 17,980,688 | 12/21/20 | $ | (6,520 | ) | ||||||||||||
CME Ultra Long Term U.S. Treasury Bond | Short | 14 | 3,105,375 | 12/21/20 | (42,458 | ) | ||||||||||||||
Ultra 10 Yr. U.S. Treasury Note | Short | 64 | 10,235,000 | 12/21/20 | (70,127 | ) | ||||||||||||||
U.S. Treasury 5 Yr. Note | Short | 116 | 14,619,625 | 12/31/20 | (29,147 | ) | ||||||||||||||
U.S. Treasury 10 Yr. Note | Short | 124 | 17,301,875 | 12/21/20 | (69,444 | ) | ||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts | $ | (217,696 | ) | |||||||||||||||||
|
|
*As of period end.
36 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty U.S. Core Bond ETF
Six Months Ended September 30, 2020 (unaudited) | ||||||||
Year Ended March 31, 2020a | ||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $ | 25.44 | $ | 25.00 | ||||
|
| |||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.22 | 0.29 | ||||||
Net realized and unrealized gains (losses) | 0.90 | 0.49 | ||||||
|
| |||||||
Total from investment operations | 1.12 | 0.78 | ||||||
|
| |||||||
Less distributions from: | ||||||||
Net investment income | (0.34 | ) | (0.31 | ) | ||||
Net realized gains | — | (0.03 | ) | |||||
|
| |||||||
Total Distributions | (0.34 | ) | (0.34 | ) | ||||
|
| |||||||
Net asset value, end of period | $ | 26.22 | $ | 25.44 | ||||
|
| |||||||
Total returnd | 4.42% | 3.12% | ||||||
Ratios to average net assetse | ||||||||
Expenses before waiver and payments by affiliates | 0.16% | 0.19% | ||||||
Expenses net of waiver and payments by affiliates | 0.15% | 0.15% | ||||||
Net investment income | 1.98% | 2.14% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $1,655,910 | $853,532 | ||||||
Portfolio turnover ratef | 65.37%g | 65.93%g |
aFor the period September 17, 2019 (commencement of operations) to March 31, 2020.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 65.37% | 65.93% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 37 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty U.S. Core Bond ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 31.8% | ||||||||||||||
Aerospace & Defense 0.3% | ||||||||||||||
Lockheed Martin Corp., senior bond, 4.09%, 9/15/52 | United States | 1,600,000 | $ | 2,063,109 | ||||||||||
Northrop Grumman Corp., senior bond, 5.25%, 5/01/50 | United States | 2,300,000 | 3,308,986 | |||||||||||
|
| |||||||||||||
5,372,095 | ||||||||||||||
|
| |||||||||||||
Air Freight & Logistics 0.5% | ||||||||||||||
FedEx Corp., | ||||||||||||||
senior bond, 4.05%, 2/15/48 | United States | 2,000,000 | 2,311,784 | |||||||||||
senior note, 3.80%, 5/15/25 | United States | 2,050,000 | 2,318,944 | |||||||||||
United Parcel Service Inc., senior bond, 5.30%, 4/01/50 | United States | 2,800,000 | 4,141,846 | |||||||||||
|
| |||||||||||||
8,772,574 | ||||||||||||||
|
| |||||||||||||
Airlines 0.5% | ||||||||||||||
a | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 10/20/25 | United States | 7,700,000 | 7,908,790 | ||||||||||
|
| |||||||||||||
Banks 2.2% | ||||||||||||||
Bancolombia SA, senior note, 3.00%, 1/29/25 | Colombia | 1,100,000 | 1,102,816 | |||||||||||
Bank of America Corp., senior note, 2.881% to 4/24/22, FRN thereafter, 4/24/23 | United States | 1,000,000 | 1,034,315 | |||||||||||
a | BNP Paribas SA, senior note, 144A, 4.705% to 1/10/24, FRN thereafter, 1/10/25 | France | 5,150,000 | 5,706,028 | ||||||||||
a | BPCE SA, sub. Note, 144A, 4.875%, 4/01/26 | France | 1,800,000 | 2,051,814 | ||||||||||
Citigroup Inc., | ||||||||||||||
senior bond, 5.875%, 1/30/42 | United States | 1,100,000 | 1,613,228 | |||||||||||
sub. bond, 4.45%, 9/29/27 | United States | 1,500,000 | 1,739,605 | |||||||||||
HSBC Holdings PLC, | ||||||||||||||
senior note, FRN thereafter, 2.013%, 9/22/28 | United Kingdom | 4,100,000 | 4,060,092 | |||||||||||
senior note, FRN thereafter, 2.357%, 8/18/31 | United Kingdom | 1,300,000 | 1,290,612 | |||||||||||
Industrial & Commercial Bank of China Ltd., senior note, 3.538%, 11/08/27 | China | 1,200,000 | 1,338,086 | |||||||||||
JPMorgan Chase & Co., | ||||||||||||||
senior bond, 2.522% to 4/22/30, FRN thereafter, 4/22/31 | United States | 2,000,000 | 2,134,231 | |||||||||||
sub. bond, 3.625%, 12/01/27 | United States | 2,100,000 | 2,352,120 | |||||||||||
Merrill Lynch & Co. Inc., sub. bond, 7.75%, 5/14/38 | United States | 1,000,000 | 1,657,807 | |||||||||||
Truist Bank, sub. Bond, 2.25%, 3/11/30 | United States | 4,300,000 | 4,435,704 | |||||||||||
Wells Fargo & Co., | ||||||||||||||
senior bond, 2.879% to 10/30/29, FRN thereafter, 10/30/30 | United States | 3,700,000 | 3,952,789 | |||||||||||
senior note, 2.188% to 4/30/25, FRN thereafter, 4/30/26 | United States | 2,000,000 | 2,080,298 | |||||||||||
|
| |||||||||||||
36,549,545 | ||||||||||||||
|
| |||||||||||||
Beverages 0.5% | ||||||||||||||
Anheuser-Busch InBev Worldwide Inc., | ||||||||||||||
senior bond, 3.50%, 6/01/30 | United States | 6,000,000 | 6,838,479 | |||||||||||
senior bond, 5.55%, 1/23/49 | United States | 1,200,000 | 1,633,736 | |||||||||||
|
| |||||||||||||
8,472,215 | ||||||||||||||
|
| |||||||||||||
Biotechnology 0.4% | ||||||||||||||
AbbVie Inc., | ||||||||||||||
a senior note, 144A, 2.95%, 11/21/26 | United States | 5,300,000 | 5,781,395 | |||||||||||
a Sr Unsecured, 144A, 4.75%, 3/15/45 | United States | 1,400,000 | 1,694,730 | |||||||||||
|
| |||||||||||||
7,476,125 | ||||||||||||||
|
| |||||||||||||
Building Products 0.3% | ||||||||||||||
a | Carrier Global Corp., senior note, 144A, 3.577%, 4/05/50 | United States | 3,000,000 | 3,182,711 | ||||||||||
CRH America Finance Inc., senior note, 3.40%, 5/09/27 | Ireland | 1,850,000 | 2,015,289 | |||||||||||
|
| |||||||||||||
5,198,000 | ||||||||||||||
|
| |||||||||||||
Capital Markets 1.1% | ||||||||||||||
a | Credit Suisse Group AG, senior note, 144A, 2.997% to 12/14/22, FRN therafter, 12/14/23 | Switzerland | 3,750,000 | 3,906,093 |
38 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Capital Markets (continued) | ||||||||||||||
Morgan Stanley, | United States | 2,700,000 | $ | 3,090,400 | ||||||||||
sub. bond, 3.95%, 4/23/27 | United States | 3,600,000 | 4,072,912 | |||||||||||
The Goldman Sachs Group Inc., | United States | 2,500,000 | 2,806,199 | |||||||||||
senior bond, 3.81% to 4/23/28, FRN thereafter, 4/23/29 | United States | 3,600,000 | 4,102,963 | |||||||||||
|
| |||||||||||||
17,978,567 | ||||||||||||||
|
| |||||||||||||
Chemicals 1.2% | ||||||||||||||
b | CNAC HK Finbridge Co. Ltd., senior note, Reg S, 4.875%, 3/14/25 | Hong Kong | 5,200,000 | 5,751,637 | ||||||||||
EI du Pont de Nemours and Co., senior bond, 2.30%, 7/15/30 | United States | 6,000,000 | 6,374,786 | |||||||||||
The Sherwin-Williams Co., | ||||||||||||||
senior bond, 2.30%, 5/15/30 | United States | 1,600,000 | 1,673,930 | |||||||||||
senior note, 2.95%, 8/15/29 | United States | 4,900,000 | 5,399,872 | |||||||||||
|
| |||||||||||||
19,200,225 | ||||||||||||||
|
| |||||||||||||
Commercial Services & Supplies 0.3% | ||||||||||||||
Boardwalk Pipelines LP, senior note, 4.80%, 5/03/29 | United States | 3,950,000 | 4,307,914 | |||||||||||
|
| |||||||||||||
Consumer Finance 0.5% | ||||||||||||||
Capital One Financial Corp., | ||||||||||||||
senior note, 3.75%, 3/09/27 | United States | 4,850,000 | 5,390,326 | |||||||||||
senior sub. note, 4.20%, 10/29/25 | United States | 2,000,000 | 2,219,351 | |||||||||||
|
| |||||||||||||
7,609,677 | ||||||||||||||
|
| |||||||||||||
Containers & Packaging 0.1% | ||||||||||||||
Bemis Co. Inc., senior note, 2.63%, 6/19/30 | United States | 1,000,000 | 1,069,477 | |||||||||||
WRKCo Inc., Sr. Unsecured, 4.00%, 3/15/28 | United States | 1,100,000 | 1,264,118 | |||||||||||
|
| |||||||||||||
2,333,595 | ||||||||||||||
|
| |||||||||||||
Diversified Financial Services 0.9% | ||||||||||||||
AON Corp., senior note, 2.80%, 5/15/30 | United States | 7,200,000 | 7,792,678 | |||||||||||
Unilever Capital Corp. 5.90%, 11/15/32 | United Kingdom | 4,700,000 | 6,917,030 | |||||||||||
|
| |||||||||||||
14,709,708 | ||||||||||||||
|
| |||||||||||||
Diversified Telecommunication Services 1.1% | ||||||||||||||
AT&T Inc., senior note, 3.80%, 2/15/27 | United States | 6,100,000 | 6,886,012 | |||||||||||
Bell Canada Inc., senior bond, 4.464%, 4/01/48 | Canada | 3,000,000 | 3,703,115 | |||||||||||
France Telecom SA, 0, 9.00%, 3/01/31 | France | 4,300,000 | 7,018,493 | |||||||||||
|
| |||||||||||||
17,607,620 | ||||||||||||||
|
| |||||||||||||
Education Services 0.5% | ||||||||||||||
Rockefeller University, Series 2020, 3.75%, 7/01/51 | United States | 7,000,000 | 8,278,164 | |||||||||||
|
| |||||||||||||
Electric Utilities 2.2% | ||||||||||||||
Baltimore Gas & Electric Co., senior bond, 3.50%, 8/15/46 | United States | 1,400,000 | 1,597,415 | |||||||||||
Duke Energy Corp., senior bond, 3.75%, 9/01/46 | United States | 6,400,000 | 7,295,908 | |||||||||||
a | EDP Finance BV, senior note, 144A, 1.71%, 1/24/28 | Netherlands | 3,500,000 | 3,484,037 | ||||||||||
Enel Finance International NV, | ||||||||||||||
a senior bond, 144A, 3.50%, 4/06/28 | Netherlands | 2,700,000 | 3,013,033 | |||||||||||
a senior note, 144A, 3.625%, 5/25/27 | Netherlands | 3,500,000 | 3,895,776 | |||||||||||
Exelon Corp., senior bond, 4.05%, 4/15/30 | United States | 3,000,000 | 3,516,928 | |||||||||||
Georgia Power Co., senior bond, 4.75%, 9/01/40 | United States | 1,400,000 | 1,725,201 | |||||||||||
MidAmerican Energy Co., secured bond, 3.65%, 8/01/48 | United States | 1,100,000 | 1,300,788 | |||||||||||
Public Service Electric & Gas Co., secured bond, 3.80%, 3/01/46 | United States | 1,100,000 | 1,335,448 | |||||||||||
a | State Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27 | China | 2,300,000 | 2,575,590 | ||||||||||
The Southern Co., senior bond, 3.70%, 4/30/30 | United States | 4,000,000 | 4,574,241 | |||||||||||
Virginia Electric & Power Co., senior bond, 3.80%, 9/15/47 | United States | 1,100,000 | 1,336,460 | |||||||||||
|
| |||||||||||||
35,650,825 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 39 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Electronic Equipment, Instruments & Components 0.8% | ||||||||||||||
Flex Ltd., senior note, 4.875%, 5/12/30 | Singapore | 4,800,000 | $ | 5,488,783 | ||||||||||
FLIR Systems Inc., senior note, 2.50%, 8/01/30 | United States | 6,000,000 | 6,148,668 | |||||||||||
Keysight Technologies Inc., senior note, 4.60%, 4/06/27 | United States | 1,100,000 | 1,285,905 | |||||||||||
|
| |||||||||||||
12,923,356 | ||||||||||||||
|
| |||||||||||||
Energy Equipment & Services 0.9% | ||||||||||||||
Baker Hughes a GE Co. LLC/Baker Hughes Co-Obligor Inc., senior bond, 4.08%, 12/15/47 | United States | 1,400,000 | 1,401,466 | |||||||||||
a | Schlumberger Holdings Corp., senior note, 144A, 3.90%, 5/17/28 | United States | 5,950,000 | 6,413,824 | ||||||||||
Total Capital International SA, senior note, 3.455%, 2/19/29 | France | 6,900,000 | 7,938,195 | |||||||||||
|
| |||||||||||||
15,753,485 | ||||||||||||||
|
| |||||||||||||
Entertainment 0.3% | ||||||||||||||
The Walt Disney Co., Sr Unsecured, 2.20%, 1/13/28 | United States | 5,000,000 | 5,265,352 | |||||||||||
|
| |||||||||||||
Equity Real Estate Investment Trusts (REITs) 0.6% | ||||||||||||||
AvalonBay Communities Inc., senior bond, 2.45%, 1/15/31 | United States | 1,900,000 | 2,034,533 | |||||||||||
Kimco Realty Corp., Sr. Unsecured, 4.25%, 4/01/45 | United States | 750,000 | 796,894 | |||||||||||
Simon Property Group LP, senior note, 3.375%, 12/01/27 | United States | 6,000,000 | 6,421,798 | |||||||||||
|
| |||||||||||||
9,253,225 | ||||||||||||||
|
| |||||||||||||
Food & Staples Retailing 0.3% | ||||||||||||||
Walmart Inc., senior bond, 2.95%, 9/24/49 | United States | 5,100,000 | 5,751,915 | |||||||||||
|
| |||||||||||||
Food Products 0.3% | ||||||||||||||
BAT Capital Corp., senior bond, 4.54%, 8/15/47 | United Kingdom | 750,000 | 804,069 | |||||||||||
Kraft Heinz Foods Co., senior bond, 3.00%, 6/01/26 | United States | 4,100,000 | 4,226,873 | |||||||||||
|
| |||||||||||||
5,030,942 | ||||||||||||||
|
| |||||||||||||
Health Care Providers & Services 2.0% | ||||||||||||||
Anthem Inc., | United States | 2,000,000 | 2,665,961 | |||||||||||
senior note, 4.101%, 3/01/28 | United States | 1,200,000 | 1,396,524 | |||||||||||
Cigna Corp., | United States | 4,900,000 | 5,502,604 | |||||||||||
senior note, 4.375%, 10/15/28 | United States | 2,300,000 | 2,735,281 | |||||||||||
CVS Health Corp., | United States | 5,100,000 | 5,973,627 | |||||||||||
senior bond, 4.875%, 7/20/35 | United States | 1,400,000 | 1,782,188 | |||||||||||
HCA Inc., | United States | 4,100,000 | 4,609,120 | |||||||||||
senior secured bond, first lien, 5.50%, 6/15/47 | United States | 900,000 | 1,126,435 | |||||||||||
Quest Diagnostics Inc., senior bond, 2.80%, 6/30/31 | United States | 6,800,000 | 7,348,539 | |||||||||||
|
| |||||||||||||
33,140,279 | ||||||||||||||
|
| |||||||||||||
Household Durables 0.4% | ||||||||||||||
Mohawk Industries Inc., senior bond, 3.625%, 5/15/30 | United States | 6,200,000 | 6,801,039 | |||||||||||
|
| |||||||||||||
Independent Power Producers & Energy Traders 0.4% | ||||||||||||||
a | Colbun SA, senior note, 144A, 3.95%, 10/11/27 | Chile | 5,550,000 | 6,256,820 | ||||||||||
|
| |||||||||||||
Industrial Conglomerates 0.2% | ||||||||||||||
Honeywell International Inc., senior bond, 1.95%, 6/01/30 | United States | 2,900,000 | 3,056,091 | |||||||||||
|
| |||||||||||||
Insurance 2.2% | ||||||||||||||
Arch Capital Group Ltd., senior bond, 3.635%, 6/30/50 | United States | 1,700,000 | 1,833,458 | |||||||||||
AXA SA 8.60%, 12/15/30 | France | 3,600,000 | 5,508,856 | |||||||||||
a | Five Corners Funding Trust II, senior note, 144A, 2.85%, 5/15/30 | United States | 4,000,000 | 4,319,789 | ||||||||||
Marsh & McLennan Cos. Inc., senior bond, 4.90%, 3/15/49 | United States | 3,000,000 | 4,194,204 | |||||||||||
Metlife Inc., senior bond, 5.875%, 2/06/41 | United States | 1,100,000 | 1,601,902 | |||||||||||
a | Metropolitan Life Global Funding I, senior note, 144A, 2.95%, 4/09/30 | United States | 6,700,000 | 7,524,445 | ||||||||||
Prudential PLC, senior note, 3.125%, 4/14/30 | United Kingdom | 5,000,000 | 5,575,065 |
40 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Insurance (continued) | ||||||||||||||
Reinsurance Group of America Inc, Sr. Unsecured, 3.90%, 5/15/29 | United States | 2,250,000 | $ | 2,568,899 | ||||||||||
The Allstate Corp., senior bond, 5.55%, 5/09/35 | United States | 1,800,000 | 2,629,829 | |||||||||||
|
| |||||||||||||
35,756,447 | ||||||||||||||
|
| |||||||||||||
Interactive Media & Services 0.4% | ||||||||||||||
Tencent Holdings Ltd., | China | 1,250,000 | 1,332,925 | |||||||||||
a Sr Unsecured, 144A, 3.28%, 4/11/24 | China | 5,200,000 | 5,544,968 | |||||||||||
|
| |||||||||||||
6,877,893 | ||||||||||||||
|
| |||||||||||||
Internet & Direct Marketing Retail 0.8% | ||||||||||||||
Alibaba Group Holding Ltd., senior note, 3.40%, 12/06/27 | China | 6,700,000 | 7,513,101 | |||||||||||
Amazon.com Inc., senior bond, 4.25%, 8/22/57 | United States | 4,000,000 | 5,469,296 | |||||||||||
|
| |||||||||||||
12,982,397 | ||||||||||||||
|
| |||||||||||||
IT Services 0.5% | ||||||||||||||
Fiserv Inc., | United States | 4,700,000 | 5,066,825 | |||||||||||
senior bond, 4.40%, 7/01/49 | United States | 2,400,000 | 3,009,691 | |||||||||||
|
| |||||||||||||
8,076,516 | ||||||||||||||
|
| |||||||||||||
Machinery 0.1% | ||||||||||||||
Caterpillar Inc., senior note, 2.60%, 4/09/30 | United States | 1,000,000 | 1,099,519 | |||||||||||
|
| |||||||||||||
Media 0.6% | ||||||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, senior bond, 2.80%, 4/01/31 | United States | 5,000,000 | 5,202,342 | |||||||||||
Comcast Corp., senior bond, 4.25%, 1/15/33 | United States | 2,000,000 | 2,492,847 | |||||||||||
FOX Corp., senior bond, 5.576%, 1/25/49 | United States | 1,200,000 | 1,663,539 | |||||||||||
NBCUniversal Media LLC, senior bond, 4.45%, 1/15/43 | United States | 1,100,000 | 1,389,741 | |||||||||||
|
| |||||||||||||
10,748,469 | ||||||||||||||
|
| |||||||||||||
Multi-Utilities 0.3% | ||||||||||||||
a | Berkshire Hathaway Energy Co., Sr Unsecured, 144A, 3.70%, 7/15/30 | United States | 4,800,000 | 5,656,850 | ||||||||||
|
| |||||||||||||
Multiline Retail 0.4% | ||||||||||||||
Dollar Tree Inc., senior bond, 4.20%, 5/15/28 | United States | 5,100,000 | 6,016,043 | |||||||||||
|
| |||||||||||||
Oil, Gas & Consumable Fuels 3.7% | ||||||||||||||
BP Capital Markets America Inc., senior note, 3.633%, 4/06/30 | United States | 7,100,000 | 8,170,240 | |||||||||||
Canadian Natural Resources Ltd., senior bond, 3.85%, 6/01/27 | Canada | 3,000,000 | 3,238,222 | |||||||||||
Cheniere Corpus Christi Holdings LLC, senior secured note, first lien, 5.875%, 3/31/25 | United States | 3,400,000 | 3,878,327 | |||||||||||
Chevron Corp., senior note, 2.236%, 5/11/30 | United States | 7,400,000 | 7,863,712 | |||||||||||
Ecopetrol SA, senior bond, 4.125%, 1/16/25 | Colombia | 6,200,000 | 6,510,062 | |||||||||||
Enable Midstream Partners LP, senior note, 3.90%, 5/15/24 | United States | 2,650,000 | 2,610,156 | |||||||||||
Energy Transfer Operating LP, senior bond, 5.15%, 3/15/45 | United States | 850,000 | 771,857 | |||||||||||
Enterprise Products Operating LLC, senior bond, 4.25%, 2/15/48 | United States | 1,150,000 | 1,225,284 | |||||||||||
Equinor ASA, senior note, 2.375%, 5/22/30 | Norway | 3,000,000 | 3,174,384 | |||||||||||
Exxon Mobil Corp., senior bond, 2.61%, 10/15/30 | United States | 5,000,000 | 5,407,157 | |||||||||||
MPLX LP, senior bond, 4.70%, 4/15/48 | United States | 1,250,000 | 1,268,005 | |||||||||||
Sabine Pass Liquefaction LLC, senior secured bond, first lien, 4.20%, 3/15/28 | United States | 4,000,000 | 4,344,804 | |||||||||||
Shell International Finance B.V., senior note, 6.375%, 12/15/38 | Netherlands | 3,000,000 | 4,464,447 | |||||||||||
TC PipeLines LP, senior note, 3.90%, 5/25/27 | United States | 2,550,000 | 2,735,760 | |||||||||||
The Williams Cos. Inc., | United States | 1,000,000 | 1,089,341 | |||||||||||
senior bond, 5.10%, 9/15/45 | United States | 700,000 | 788,415 | |||||||||||
TransCanada PipeLines Ltd., senior bond, 4.875%, 5/15/48 | Canada | 1,200,000 | 1,489,637 | |||||||||||
Valero Energy Corp., | United States | 500,000 | 549,495 |
franklintempleton.com | Semiannual Report | 41 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||||||||
senior note, 4.35%, 6/01/28 | United States | 1,500,000 | $ | 1,686,497 | ||||||||||
|
| |||||||||||||
61,265,802 | ||||||||||||||
|
| |||||||||||||
Pharmaceuticals 1.4% | ||||||||||||||
AstraZeneca PLC, senior bond, 4.00%, 9/18/42 | United Kingdom | 3,300,000 | 4,038,974 | |||||||||||
Bristol-Myers Squibb Co., senior bond, 4.125%, 6/15/39 | United States | 3,200,000 | 4,036,775 | |||||||||||
GlaxoSmithKline Capital Inc., senior bond, 6.375%, 5/15/38 | United States | 3,600,000 | 5,557,934 | |||||||||||
Royalty Pharma PLC, senior secured note, 1.75%, 9/02/27 | United Kingdom | 1,300,000 | 1,300,977 | |||||||||||
Shire Acquisitions Investments Ireland Designated Activity Co., senior note, 2.875%, 9/23/23 | United States | 4,600,000 | 4,885,244 | |||||||||||
Takeda Pharmaceutical Co. Ltd., senior note, 5.00%, 11/26/28 | Japan | 2,700,000 | 3,354,480 | |||||||||||
|
| |||||||||||||
23,174,384 | ||||||||||||||
|
| |||||||||||||
Real Estate Management & Development 0.3% | ||||||||||||||
b | China Overseas Finance Cayman VI Ltd., senior note, Reg S, 5.95%, 5/08/24 | China | 5,000,000 | 5,744,684 | ||||||||||
|
| |||||||||||||
Road & Rail 0.3% | ||||||||||||||
Burlington Northern Santa Fe LLC, | ||||||||||||||
senior bond, 4.15%, 4/01/45 | United States | 2,300,000 | 2,886,725 | |||||||||||
senior bond, 4.90%, 4/01/44 | United States | 1,100,000 | 1,496,462 | |||||||||||
CSX Corp., senior bond, 4.25%, 11/01/66 | United States | 750,000 | 933,180 | |||||||||||
|
| |||||||||||||
5,316,367 | ||||||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||||||||
Intel Corp., senior bond, 4.95%, 3/25/60 | United States | 2,200,000 | 3,221,463 | |||||||||||
Maxim Integrated Products Inc., senior note, 3.45%, 6/15/27 | United States | 2,450,000 | 2,733,134 | |||||||||||
|
| |||||||||||||
5,954,597 | ||||||||||||||
|
| |||||||||||||
Software 0.1% | ||||||||||||||
Microsoft Corp., senior bond, 2.675%, 6/01/60 | United States | 1,660,000 | 1,751,048 | |||||||||||
|
| |||||||||||||
Tobacco 1.0% | ||||||||||||||
Altria Group Inc., senior note, 3.40%, 5/06/30 | United States | 6,600,000 | 7,200,246 | |||||||||||
a | BAT International Finance PLC, senior note, 144A, 3.95%, 6/15/25 | United Kingdom | 2,600,000 | 2,893,290 | ||||||||||
a | Imperial Brands Finance PLC, senior note, 144A, 3.50%, 7/26/26 | United Kingdom | 6,000,000 | 6,499,503 | ||||||||||
|
| |||||||||||||
16,593,039 | ||||||||||||||
|
| |||||||||||||
Wireless Telecommunication Services 0.5% | ||||||||||||||
T-Mobile USA Inc., | ||||||||||||||
a senior bond, 144A, 3.30%, 2/15/51 | United States | 2,000,000 | 1,976,300 | |||||||||||
a senior note, 144A, 3.75%, 4/15/27 | United States | 5,000,000 | 5,602,700 | |||||||||||
a senior secured bond, 144A, 3.875%, 4/15/30 | United States | 1,000,000 | 1,138,280 | |||||||||||
|
| |||||||||||||
8,717,280 | ||||||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes | 526,389,478 | |||||||||||||
|
| |||||||||||||
U.S. Government & Agency Securities 33.7% | ||||||||||||||
U.S. Treasury Bond, | ||||||||||||||
1.25%, 5/15/50 | United States | 2,065,000 | 1,957,394 | |||||||||||
2.00%, 2/15/50 | United States | 18,450,000 | 20,873,004 | |||||||||||
2.25%, 8/15/46 | United States | 28,770,000 | 33,983,439 | |||||||||||
2.25%, 8/15/49 | United States | 2,350,000 | 2,795,307 | |||||||||||
2.75%, 8/15/42 | United States | 4,740,000 | 6,075,347 | |||||||||||
2.75%, 11/15/42 | United States | 15,410,000 | 19,737,441 | |||||||||||
3.00%, 11/15/44 | United States | 12,700,000 | 16,972,855 | |||||||||||
3.00%, 2/15/49 | United States | 2,275,000 | 3,110,529 | |||||||||||
3.50%, 2/15/39 | United States | 28,020,000 | 39,341,831 |
42 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
U.S. Government & Agency Securities (continued) | ||||||||||||||
U.S. Treasury Note, | ||||||||||||||
0.25%, 6/30/25 | United States | 21,850,000 | $ | 21,838,051 | ||||||||||
0.25%, 9/30/25 | United States | 21,900,000 | 21,871,770 | |||||||||||
0.50%, 3/31/25 | United States | 51,900,000 | 52,496,039 | |||||||||||
1.375%, 8/31/23 | United States | 64,750,000 | 67,046,602 | |||||||||||
1.50%, 3/31/23 | United States | 30,273,000 | 31,293,531 | |||||||||||
1.50%, 9/30/24 | United States | 9,050,000 | 9,513,813 | |||||||||||
1.50%, 10/31/24 | United States | 5,750,000 | 6,049,180 | |||||||||||
1.875%, 9/30/22 | United States | 68,000,000 | 70,364,062 | |||||||||||
1.875%, 8/31/24 | United States | 5,150,000 | 5,484,750 | |||||||||||
2.125%, 2/29/24 | United States | 94,165,000 | 100,410,787 | |||||||||||
2.125%, 3/31/24 | United States | 11,000,000 | 11,744,863 | |||||||||||
2.75%, 9/15/21 | United States | 15,300,000 | 15,678,012 | |||||||||||
|
| |||||||||||||
Total U.S. Government & Agency Securities | 558,638,607 | |||||||||||||
|
| |||||||||||||
Municipal Bonds 2.2% | ||||||||||||||
Alabama 0.3% | ||||||||||||||
Southeast Alabama Gas Supply Dist., Revenue, Libor-Project #2, Series, 0.954%, 6/01/49 | 5,000,000 | 4,986,450 | ||||||||||||
|
| |||||||||||||
California 0.9% | ||||||||||||||
California State GO, Various Purpose, 4.00%, 3/01/46 | 2,500,000 | 2,915,350 | ||||||||||||
Contra Costa Community College Dist., Refunding, 2.926%, 8/01/38 | 4,000,000 | 4,217,200 | ||||||||||||
Whittier City School District GO, Refunding, 3.306%, 8/01/43 | 7,500,000 | 7,904,025 | ||||||||||||
|
| |||||||||||||
15,036,575 | ||||||||||||||
|
| |||||||||||||
New York 0.5% | ||||||||||||||
Metropolitan Transportation Auth., Refunding, Series B, 5.00%, 11/15/52 | 7,255,000 | 7,654,605 | ||||||||||||
|
| |||||||||||||
Pennsylvania 0.2% | ||||||||||||||
Pennsylvania State University, Refunding, Series B, 2.888%, 9/01/50 | 3,500,000 | 3,641,960 | ||||||||||||
|
| |||||||||||||
Texas 0.3% | ||||||||||||||
Texas Water Dev. Board, State Water Implementation Fund, Master Trust, Series A, 4.00%, 10/15/44 | 3,750,000 | 4,450,200 | ||||||||||||
|
| |||||||||||||
Total Municipals (Cost $35,859,741) | 35,769,790 | |||||||||||||
|
| |||||||||||||
Mortgage-Backed Securities 26.7% | ||||||||||||||
Fannie Mae 7.0% | ||||||||||||||
Federal Home Loan Mortgage Corp., | United States | 5,796,091 | 6,093,229 | |||||||||||
3.00%, 3/01/50 | United States | 29,021,436 | 30,801,588 | |||||||||||
3.00%, 3/01/50 | United States | 10,941,328 | 11,677,788 | |||||||||||
3.50%, 2/01/47 | United States | 4,059,783 | 4,340,418 | |||||||||||
3.50%, 2/01/47 | United States | 5,993,940 | 6,505,137 | |||||||||||
3.50%, 3/01/48 | United States | 18,444,388 | 19,804,488 | |||||||||||
4.00%, 6/01/48 | United States | 12,848,906 | 14,066,157 | |||||||||||
4.00%, 3/01/49 | United States | 5,528,169 | 6,001,263 | |||||||||||
4.00%, 5/01/50 | United States | 14,396,707 | 15,686,647 | |||||||||||
|
| |||||||||||||
114,976,715 | ||||||||||||||
|
| |||||||||||||
Freddie Mac 19.7% | ||||||||||||||
Federal National Mortgage Association, | United States | 8,862,002 | 9,216,276 | |||||||||||
2.00%, 10/01/35 | United States | 15,998,000 | 16,637,836 | |||||||||||
2.00%, 8/01/50 | United States | 3,970,265 | 4,106,274 | |||||||||||
2.00%, 10/01/50 | United States | 24,247,000 | 25,077,628 | |||||||||||
2.50%, 5/01/35 | United States | 5,624,887 | 5,876,368 | |||||||||||
2.50%, 8/01/35 | United States | 23,750,008 | 24,879,281 |
franklintempleton.com | Semiannual Report | 43 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Mortgage-Backed Securities (continued) | ||||||||||||||
Freddie Mac (continued) | ||||||||||||||
2.50%, 10/01/35 | United States | 10,441,000 | $ | 10,955,243 | ||||||||||
2.50%, 5/01/50 | United States | 8,706,317 | 9,141,385 | |||||||||||
2.50%, 8/01/50 | United States | 36,814,438 | 38,654,112 | |||||||||||
2.50%, 10/01/50 | United States | 15,997,000 | 16,796,395 | |||||||||||
3.00%, 5/01/50 | United States | 23,426,004 | 24,547,393 | |||||||||||
3.00%, 8/01/50 | United States | 34,438,211 | 36,227,625 | |||||||||||
3.50%, 11/01/48 | United States | 17,419,907 | 19,128,412 | |||||||||||
3.50%, 8/01/49 | United States | 23,034,738 | 24,777,008 | |||||||||||
4.00%, 9/01/48 | United States | 14,204,769 | 15,486,584 | |||||||||||
4.50%, 7/01/47 | United States | 12,331,063 | 13,772,280 | |||||||||||
4.50%, 5/01/48 | United States | 6,708,391 | 7,464,671 | |||||||||||
4.50%, 12/01/48 | United States | 9,859,186 | 10,916,234 | |||||||||||
4.50%, 2/01/50 | United States | 11,677,287 | 12,837,031 | |||||||||||
|
| |||||||||||||
326,498,036 | ||||||||||||||
|
| |||||||||||||
Total Mortgage-Backed Securities | 441,474,751 | |||||||||||||
|
| |||||||||||||
Foreign Government and Agency Securities 2.9% | ||||||||||||||
Colombia 0.4% | ||||||||||||||
Government of Colombia, | ||||||||||||||
senior bond, 4.375%, 7/12/21 | 3,400,000 | 3,497,869 | ||||||||||||
senior bond, 5.00%, 6/15/45 | 3,250,000 | 3,798,438 | ||||||||||||
|
| |||||||||||||
7,296,307 | ||||||||||||||
|
| |||||||||||||
Indonesia 0.4% | ||||||||||||||
a | Government of Indonesia, senior bond, 144A | 3,150,000 | 3,616,625 | |||||||||||
a | Indonesia Government International Bond, senior note, 144A | 3,500,000 | 3,914,089 | |||||||||||
|
| |||||||||||||
7,530,714 | ||||||||||||||
|
| |||||||||||||
Mexico 0.5% | ||||||||||||||
Government of Mexico, | 2,700,000 | 2,911,032 | ||||||||||||
senior note, 4.15%, 3/28/27 | 4,500,000 | 5,007,937 | ||||||||||||
|
| |||||||||||||
7,918,969 | ||||||||||||||
|
| |||||||||||||
Panama 0.4% | ||||||||||||||
a | Panama Notas del Tesoro, senior note, 144A | 5,950,000 | 6,374,027 | |||||||||||
|
| |||||||||||||
Peru 0.4% | ||||||||||||||
Peruvian Government International Bond, senior bond | 5,850,000 | 6,345,846 | ||||||||||||
|
| |||||||||||||
Supranational 0.4% | ||||||||||||||
a | The African Export-Import Bank, senior bond, 144A | 6,100,000 | 6,306,790 | |||||||||||
|
| |||||||||||||
Uruguay 0.4% | ||||||||||||||
Government of Uruguay, senior bond | 3,875,000 | 4,617,314 | ||||||||||||
Uruguay Government International Bond, senior bond | 1,400,000 | 1,532,853 | ||||||||||||
|
| |||||||||||||
6,150,167 | ||||||||||||||
|
| |||||||||||||
Total Foreign Government and Agency Securities | 47,922,820 | |||||||||||||
|
| |||||||||||||
Asset-Backed Securities 1.3% | ||||||||||||||
American Express Credit Account Master Trust, Series 2019-1, Class A, ABS, 2.87%, 10/15/24 | United States | 1,500,000 | 1,559,549 | |||||||||||
a | BX Commercial Mortgage Trust, Series 2020-BXLP, Class A, 144A, FRN thereafter, 0.952%, 12/15/36 | United States | 3,087,174 | 3,091,231 |
44 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Asset-Backed Securities (continued) | ||||||||||||||
Capital One Multi-Asset Execution Trust, | ||||||||||||||
Series 2019-A1, Class A1, 2.84%, 12/15/24 | United States | 4,460,000 | $ | 4,617,629 | ||||||||||
Series 2019-A2, Class A2, 1.72%, 8/15/24 | United States | 5,510,000 | 5,661,442 | |||||||||||
a | CF Hippolyta LLC, Series 2020-1, Class A1, ABS, 144A, 1.69%, 7/15/60 | United States | 2,170,000 | 2,200,298 | ||||||||||
Citibank Credit Card Issuance Trust, Series 2017-A7 , Class A7, FRN thereafter, 0.524%, 8/08/24 | United States | 2,000,000 | 2,010,021 | |||||||||||
Discover Card Execution Note Trust, Series 2019-A3, Class A, 1.89%, 10/15/24 | United States | 3,220,000 | 3,327,982 | |||||||||||
|
| |||||||||||||
Total Asset-Backed Securities | 22,468,152 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 1,632,663,598 | |||||||||||||
|
| |||||||||||||
Short Term Investments | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.9% | ||||||||||||||
Money Market Funds 0.9% | ||||||||||||||
c,d | Institutional Fiduciary Trust Portfolio 0.00% | United States | 14,871,142 | 14,871,142 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $1,607,342,204) 99.5% | 1,647,534,740 | |||||||||||||
Other Assets, less Liabilities 0.5% | 8,375,370 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 1,655,910,110 | ||||||||||||
|
|
See Abbreviation on Page 76.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $122,529,826, representing 7.4% of net assets.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $12,829,246, representing 0.8% of net assets.
cSee Note 3(c) regarding investments in affiliated management investment companies.
dThe rate shown is the annualized seven-day effective yield at period end.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation | |||||||||||||||
Index Contracts | ||||||||||||||||||||
U.S. Treasury 5 Yr. Note | Long | 219 | $ | 27,600,844 | 12/31/20 | $ | 54,471 | |||||||||||||
Ultra 10 Yr. U.S. Treasury Note | Short | 418 | (66,847,344 | ) | 12/21/20 | (340,447 | ) | |||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts | $ | (285,976 | ) | |||||||||||||||||
|
|
*As of period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 45 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty U.S. Low Volatility ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 30.93 | $ | 33.61 | $ | 30.03 | $ | 26.97 | $ | 25.05 | ||||||||||
|
| |||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.32 | 0.64 | 0.52 | 0.45 | 0.23 | |||||||||||||||
Net realized and unrealized gains (losses) | 7.85 | (2.84 | ) | 3.88 | 3.06 | 1.87 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 8.17 | (2.20 | ) | 4.40 | 3.51 | 2.10 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.29 | ) | (0.48 | ) | (0.47 | ) | (0.45 | ) | (0.18 | ) | ||||||||||
|
| |||||||||||||||||||
Net realized gains | — | — | (0.35 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net asset value, end of period | $ | 38.81 | $ | 30.93 | $ | 33.61 | $ | 30.03 | $ | 26.97 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 26.43% | (6.74)% | 14.98% | 13.08% | 8.40% | |||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||
Expenses before of waiver and payments by affiliates | 0.36% | 0.57% | 1.12% | 2.11% | 2.96% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.29% | 0.33% | 0.50% | 0.50% | 0.50% | |||||||||||||||
Net investment income | 1.73% | 1.75% | 1.64% | 1.56% | 1.69% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s) | $116,438 | $74,223 | $13,443 | $ 6,005 | $5,393 | |||||||||||||||
Portfolio turnover ratef | 22.38%g | 32.61%g | 46.90% | 65.68% | 12.55% |
aFor the period September 20, 2016 (commencement of operations) to March 31, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 22.38% | 32.61% | —% | —% | —% |
46 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty U.S. Low Volatility ETF
Shares | Value | |||||||||||||
Common Stocks 99.1% | ||||||||||||||
Communication Services 10.1% | ||||||||||||||
a | Alphabet Inc., A | 1,022 | $ | 1,497,843 | ||||||||||
AT&T Inc. | 51,285 | 1,462,135 | ||||||||||||
a | Charter Communications Inc., A | 2,373 | 1,481,559 | |||||||||||
Comcast Corp., A | 32,781 | 1,516,449 | ||||||||||||
a | Liberty Broadband Corp., C | 10,477 | 1,496,849 | |||||||||||
TELUS Corp. | 83,119 | 1,463,725 | ||||||||||||
The Walt Disney Co. | 11,534 | 1,431,139 | ||||||||||||
Verizon Communications Inc. | 24,585 | 1,462,562 | ||||||||||||
|
| |||||||||||||
11,812,261 | ||||||||||||||
|
| |||||||||||||
Consumer Discretionary 12.4% | ||||||||||||||
a | Amazon.com Inc. | 475 | 1,495,646 | |||||||||||
Dollar General Corp. | 6,740 | 1,412,839 | ||||||||||||
McDonald’s Corp. | 6,367 | 1,397,493 | ||||||||||||
NIKE Inc., B | 12,233 | 1,535,731 | ||||||||||||
a | NVR Inc. | 348 | 1,420,926 | |||||||||||
a | O’Reilly Automotive Inc. | 3,023 | 1,393,845 | |||||||||||
Ross Stores Inc. | 15,200 | 1,418,464 | ||||||||||||
Target Corp. | 9,424 | 1,483,526 | ||||||||||||
The Home Depot Inc. | 5,097 | 1,415,488 | ||||||||||||
Tractor Supply Co. | 10,155 | 1,455,617 | ||||||||||||
|
| |||||||||||||
14,429,575 | ||||||||||||||
|
| |||||||||||||
Consumer Staples 6.6% | ||||||||||||||
McCormick & Co. Inc. | 7,932 | 1,539,601 | ||||||||||||
PepsiCo Inc. | 11,461 | 1,588,495 | ||||||||||||
The Coca-Cola Co. | 29,869 | 1,474,632 | ||||||||||||
The Procter & Gamble Co. | 10,970 | 1,524,720 | ||||||||||||
Walmart Inc. | 11,138 | 1,558,318 | ||||||||||||
|
| |||||||||||||
7,685,766 | ||||||||||||||
|
| |||||||||||||
Energy 1.9% | ||||||||||||||
Chevron Corp. | 15,562 | 1,120,464 | ||||||||||||
Exxon Mobil Corp. | 32,726 | 1,123,484 | ||||||||||||
|
| |||||||||||||
2,243,948 | ||||||||||||||
|
| |||||||||||||
Financials 9.8% | ||||||||||||||
Aflac Inc. | 27,904 | 1,014,310 | ||||||||||||
Arthur J. Gallagher & Co. | 10,122 | 1,068,681 | ||||||||||||
BlackRock Inc. | 1,894 | 1,067,364 | ||||||||||||
Intercontinental Exchange Inc. | 10,632 | 1,063,732 | ||||||||||||
JPMorgan Chase & Co. | 10,725 | 1,032,496 | ||||||||||||
Nasdaq Inc. | 8,614 | 1,057,024 | ||||||||||||
S&P Global Inc. | 3,005 | 1,083,603 | ||||||||||||
The Progressive Corp. | 10,890 | 1,030,956 | ||||||||||||
The Travelers Cos. Inc. | 9,451 | 1,022,504 | ||||||||||||
U.S. Bancorp | 28,038 | 1,005,162 | ||||||||||||
W. R. Berkley Corp. | 16,837 | 1,029,582 | ||||||||||||
|
| |||||||||||||
11,475,414 | ||||||||||||||
|
| |||||||||||||
Health Care 14.2% | ||||||||||||||
Abbott Laboratories | 14,101 | 1,534,612 | ||||||||||||
AbbVie Inc. | 16,723 | 1,464,767 | ||||||||||||
Baxter International Inc. | 18,162 | 1,460,588 | ||||||||||||
Becton Dickinson and Co. | 6,498 | 1,511,955 | ||||||||||||
Bristol-Myers Squibb Co. | 25,424 | 1,532,813 | ||||||||||||
Danaher Corp. | 7,304 | 1,572,770 | ||||||||||||
Johnson & Johnson | 10,101 | 1,503,837 | ||||||||||||
Medtronic PLC | 14,004 | 1,455,296 |
franklintempleton.com | Semiannual Report | 47 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Low Volatility ETF (continued)
Shares | Value | |||||||||||||
Common Stocks (continued) | ||||||||||||||
Health Care (continued) | ||||||||||||||
Merck & Co. Inc. | 17,561 | $ | 1,456,685 | |||||||||||
Pfizer Inc. | 41,138 | 1,509,765 | ||||||||||||
Quest Diagnostics Inc. | 13,233 | 1,515,046 | ||||||||||||
|
| |||||||||||||
16,518,134 | ||||||||||||||
|
| |||||||||||||
Industrials 8.7% | ||||||||||||||
BWX Technologies Inc. | 19,172 | 1,079,575 | ||||||||||||
General Dynamics Corp. | 7,944 | 1,099,688 | ||||||||||||
Honeywell International Inc. | 6,733 | 1,108,319 | ||||||||||||
JB Hunt Transport Services Inc. | 8,631 | 1,090,786 | ||||||||||||
Lockheed Martin Corp. | 2,875 | 1,101,930 | ||||||||||||
Republic Services Inc. | 11,860 | 1,107,131 | ||||||||||||
Roper Technologies Inc. | 2,902 | 1,146,609 | ||||||||||||
United Parcel Service Inc., B | 7,115 | 1,185,573 | ||||||||||||
Verisk Analytics Inc. | 6,256 | 1,159,299 | ||||||||||||
|
| |||||||||||||
10,078,910 | ||||||||||||||
|
| |||||||||||||
Information Technology 26.5% | ||||||||||||||
Accenture PLC, A | 7,116 | 1,608,145 | ||||||||||||
Amphenol Corp., A | 15,438 | 1,671,472 | ||||||||||||
Analog Devices Inc. | 14,627 | 1,707,556 | ||||||||||||
Apple Inc. | 16,273 | 1,884,576 | ||||||||||||
Automatic Data Processing Inc. | 12,441 | 1,735,395 | ||||||||||||
a | Black Knight Inc. | 19,679 | 1,713,057 | |||||||||||
Booz Allen Hamilton Holding Corp. | 19,856 | 1,647,651 | ||||||||||||
Cisco Systems Inc. | 42,219 | 1,663,006 | ||||||||||||
a | Fiserv Inc. | 16,239 | 1,673,429 | |||||||||||
International Business Machines Corp. | 13,691 | 1,665,784 | ||||||||||||
Intuit Inc. | 5,600 | 1,826,776 | ||||||||||||
Mastercard Inc., A | 5,013 | 1,695,246 | ||||||||||||
Microsoft Corp. | 8,677 | 1,825,034 | ||||||||||||
Motorola Solutions Inc. | 10,684 | 1,675,358 | ||||||||||||
Oracle Corp. | 28,130 | 1,679,361 | ||||||||||||
a | Synopsys Inc. | 8,492 | 1,817,118 | |||||||||||
Texas Instruments Inc. | 12,121 | 1,730,758 | ||||||||||||
Visa Inc., A | 8,295 | 1,658,751 | ||||||||||||
|
| |||||||||||||
30,878,473 | ||||||||||||||
|
| |||||||||||||
Materials 2.8% | ||||||||||||||
Air Products and Chemicals Inc. | 3,683 | 1,097,018 | ||||||||||||
Ecolab Inc. | 5,340 | 1,067,146 | ||||||||||||
Linde PLC | 4,428 | 1,054,440 | ||||||||||||
|
| |||||||||||||
3,218,604 | ||||||||||||||
|
| |||||||||||||
Real Estate 3.2% | ||||||||||||||
Crown Castle International Corp. | 7,622 | 1,269,063 | ||||||||||||
Equinix Inc. | 1,619 | 1,230,651 | ||||||||||||
Public Storage | 5,507 | 1,226,519 | ||||||||||||
|
| |||||||||||||
3,726,233 | ||||||||||||||
|
| |||||||||||||
Utilities 2.9% | ||||||||||||||
American Electric Power Co. Inc. | 10,300 | 841,819 | ||||||||||||
Dominion Energy Inc. | 10,408 | 821,504 | ||||||||||||
Duke Energy Corp. | 9,781 | 866,205 | ||||||||||||
Xcel Energy Inc. | 12,128 | 836,953 | ||||||||||||
|
| |||||||||||||
3,366,481 | ||||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 115,433,799 | |||||||||||||
|
|
48 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Low Volatility ETF (continued)
Shares | Value | |||||||||||||
Short Term Investments 0.7% | ||||||||||||||
U.S. Government & Agency Securities 0.7% | ||||||||||||||
b | FHLB | United States | 790,000 | $ | 790,000 | |||||||||
|
| |||||||||||||
Total Short-Term Investments (Cost $790,000) | 790,000 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $106,965,511) 99.8% | 116,223,799 | |||||||||||||
Other Assets, less Liabilities 0.2% | 214,549 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 116,438,348 | ||||||||||||
|
|
See Abbreviations on page 76.
aNon-income producing.
bThe security was issued on a discount basis with no stated coupon rate.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 49 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty U.S. Treasury Bond ETF
Six Months Ended September 30, 2020 (unaudited)a | ||||
Per share operating performance (for a share outstanding throughout the period) | ||||
Net asset value, beginning of period | $ | 25.00 | ||
|
| |||
Income from investment operationsb: | ||||
Net investment incomec | 0.05 | |||
Net realized and unrealized gains (losses) | 0.28 | |||
|
| |||
Total from investment operations | 0.33 | |||
|
| |||
Less distributions from net investment income | (0.13 | ) | ||
|
| |||
Net asset value, end of period | $ | 25.20 | ||
|
| |||
Total returnd | 1.31% | |||
Ratios to average net assetse | ||||
Expenses before waiver and payments by affiliates | 0.47% | |||
Expenses net of waiver and payments by affiliates | 0.09% | |||
Net investment income | 0.61% | |||
Supplemental data | ||||
Net assets, end of period (000’s) | $424,619 | |||
Portfolio turnover ratef | 14.21%g |
aFor the period June 9, 2020 (commencement of operations) to September 30, 2020.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: 14.21%
50 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty U.S. Treasury Bond ETF
Country | Principal Amount* | Value | ||||||||||||
U.S. Government & Agency Securities 96.5% | ||||||||||||||
U.S. Treasury Bond, | United States | 8,384,000 | $ | 8,254,310 | ||||||||||
1.125%, 8/15/40 | United States | 1,900,000 | 1,864,820 | |||||||||||
1.25%, 5/15/50 | United States | 8,300,000 | 7,867,492 | |||||||||||
2.375%, 11/15/49 | United States | 8,786,000 | 10,729,559 | |||||||||||
2.50%, 2/15/45 | United States | 8,932,000 | 10,995,781 | |||||||||||
2.875%, 5/15/43 | United States | 6,745,000 | 8,809,075 | |||||||||||
3.00%, 5/15/45 | United States | 8,768,000 | 11,741,585 | |||||||||||
3.00%, 5/15/47 | United States | 8,481,000 | 11,492,086 | |||||||||||
3.625%, 2/15/44 | United States | 8,066,000 | 11,788,648 | |||||||||||
4.375%, 5/15/40 | United States | 470,000 | 737,918 | |||||||||||
4.625%, 2/15/40 | United States | 650,000 | 1,046,830 | |||||||||||
U.S. Treasury Note, | United States | 8,554,000 | 8,548,988 | |||||||||||
0.125%, 8/15/23 | United States | 5,500,000 | 5,495,059 | |||||||||||
0.25%, 6/15/23 | United States | 1,518,000 | 1,521,973 | |||||||||||
0.25%, 5/31/25 | United States | 5,899,000 | 5,898,539 | |||||||||||
0.25%, 6/30/25 | United States | 1,144,000 | 1,143,374 | |||||||||||
0.25%, 8/31/25 | United States | 12,950,000 | 12,938,365 | |||||||||||
0.375%, 3/31/22 | United States | 60,000 | 60,213 | |||||||||||
0.50%, 8/31/27 | United States | 10,350,000 | 10,375,875 | |||||||||||
0.625%, 5/15/30 | United States | 534,000 | 532,164 | |||||||||||
0.625%, 8/15/30 | United States | 8,500,000 | 8,451,524 | |||||||||||
1.375%, 1/31/22 | United States | 730,000 | 742,062 | |||||||||||
1.50%, 8/31/21 | United States | 13,524,000 | 13,691,656 | |||||||||||
1.50%, 11/30/24 | United States | 8,689,000 | 9,148,567 | |||||||||||
1.625%, 11/15/22 | United States | 5,794,000 | 5,976,421 | |||||||||||
1.625%, 5/15/26 | United States | 11,807,000 | 12,650,324 | |||||||||||
1.625%, 8/15/29 | United States | 4,312,000 | 4,694,016 | |||||||||||
1.75%, 11/30/21 | United States | 30,000 | 30,563 | |||||||||||
1.75%, 5/15/23 | United States | 5,092,000 | 5,305,824 | |||||||||||
2.00%, 8/31/21 | United States | 30,000 | 30,504 | |||||||||||
2.00%, 11/15/21 | United States | 5,591,000 | 5,707,406 | |||||||||||
2.00%, 12/31/21 | United States | 4,639,000 | 4,746,367 | |||||||||||
2.00%, 11/30/22 | United States | 6,385,000 | 6,641,897 | |||||||||||
2.00%, 4/30/24 | United States | 12,569,000 | 13,381,075 | |||||||||||
2.125%, 12/31/22 | United States | 3,310,000 | 3,457,528 | |||||||||||
2.125%, 3/31/24 | United States | 13,131,000 | 14,020,164 | |||||||||||
2.25%, 2/15/27 | United States | 8,811,000 | 9,837,000 | |||||||||||
2.375%, 3/15/22 | United States | 9,823,000 | 10,143,207 | |||||||||||
2.375%, 2/29/24 | United States | 11,908,000 | 12,797,844 | |||||||||||
2.375%, 8/15/24 | United States | 12,210,000 | 13,233,541 | |||||||||||
2.375%, 5/15/29 | United States | 5,087,000 | 5,853,826 | |||||||||||
2.50%, 1/15/22 | United States | 9,155,000 | 9,433,941 | |||||||||||
2.50%, 2/15/22 | United States | 11,901,000 | 12,287,085 | |||||||||||
2.50%, 8/15/23 | United States | 6,690,000 | 7,140,530 | |||||||||||
2.50%, 5/15/24 | United States | 14,085,000 | 15,260,767 | |||||||||||
2.75%, 2/15/28 | United States | 7,443,000 | 8,659,175 | |||||||||||
2.875%, 11/30/23 | United States | 12,249,000 | 13,294,950 | |||||||||||
2.875%, 5/15/28 | United States | 7,241,000 | 8,520,338 | |||||||||||
2.875%, 8/15/28 | United States | 7,764,000 | 9,165,766 | |||||||||||
3.125%, 11/15/28 | United States | 7,527,000 | 9,067,683 | |||||||||||
United States Treasury Inflation Protected Security, | United States | 5,014,650 | 5,338,268 | |||||||||||
0.125%, 1/15/30 | United States | 10,261,216 | 11,342,227 | |||||||||||
0.375%, 1/15/27 | United States | 7,238,970 | 7,967,667 | |||||||||||
|
| |||||||||||||
Total U.S. Government & Agency Securities | 409,862,367 | |||||||||||||
|
|
franklintempleton.com | Semiannual Report | 51 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty U.S. Treasury Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Mortgage-Backed Securities 2.4% | ||||||||||||||
Fannie Mae 0.8% | ||||||||||||||
Federal National Mortgage Association 2.50%, 7/01/50 | United States | 3,202,184 | $ | 3,362,203 | ||||||||||
|
| |||||||||||||
Ginnie Mae 1.6% | ||||||||||||||
Government National Mortgage Association, | United States | 3,200,033 | 3,364,064 | |||||||||||
3.00%, 6/20/50 | United States | 3,219,911 | 3,391,907 | |||||||||||
|
| |||||||||||||
6,755,971 | ||||||||||||||
|
| |||||||||||||
Total Mortgage-Backed Securities (Cost $10,128,646) | 10,118,174 | |||||||||||||
|
| |||||||||||||
Short Term Investments (Cost $3,649,239) 0.9% | ||||||||||||||
Money Market Funds 0.9% | ||||||||||||||
a,b | Institutional Fiduciary Trust Portfolio 0.00% | United States | 3,649,239 | 3,649,239 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $421,801,882) 99.8% | 423,629,780 | |||||||||||||
Other Assets, less Liabilities 0.2% | 989,124 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 424,618,904 | ||||||||||||
|
|
See Abbreviations on page 76.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSee Note 5 regarding investments in affiliated management investment companies
bThe rate shown is the annualized seven-day effective yield at period end.
52 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty Ultra Short Bond ETF
Six Months Ended September 30, 2020 (unaudited)a | ||||
Per share operating performance (for a share outstanding throughout the period) | ||||
Net asset value, beginning of period | $ | 25.00 | ||
|
| |||
Income from investment operationsb: | ||||
Net investment incomec | 0.03 | |||
Net realized and unrealized gains (losses) | 0.06 | |||
|
| |||
Total from investment operations | 0.09 | |||
|
| |||
Less distributions from net investment income | (0.09 | ) | ||
|
| |||
Net asset value, end of period | $ | 25.00 | ||
|
| |||
Total returnd | 0.38% | |||
Ratios to average net assetse | ||||
Expenses before waiver and payments by affiliates | 3.61% | |||
Expenses net of waiver and payments by affiliates | 0.15% | |||
Net investment income | 0.55% | |||
Supplemental data | ||||
Net assets, end of period (000’s) | $2,500 | |||
Portfolio turnover ratef | 34.61%g |
aFor the period July 14, 2020 (commencement of operations) to September 30, 2020.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: 34.61%
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 53 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty Ultra Short Bond ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 83.9% | ||||||||||||||
Aerospace & Defense 2.1% | ||||||||||||||
Textron Inc., senior note, 5.95%, 9/21/21 | United States | 50,000 | $ | 51,921 | ||||||||||
|
| |||||||||||||
Automobiles 2.0% | ||||||||||||||
a | Hyundai Capital America, senior note, 144A, 3.45%, 3/12/21 | United States | 50,000 | 50,586 | ||||||||||
|
| |||||||||||||
Banks 18.2% | ||||||||||||||
Bank of America Corp., senior note, FRN thereafter, 2.313%, 4/24/23 | United States | 50,000 | 50,506 | |||||||||||
Bank of Montreal, senior note, FRN thereafter, 0.789%, 3/10/23 | Canada | 50,000 | 50,264 | |||||||||||
Canadian Imperial Bank of Commerce, senior note, FRN thereafter, | Canada | 50,000 | 50,395 | |||||||||||
a | Citigroup Inc., senior note, 144A, FRN thereafter, 2.632%, 9/01/23 | United States | 50,000 | 50,852 | ||||||||||
JPMorgan Chase & Co., senior note, FRN thereafter, 2.056%, 4/25/23 | United States | 100,000 | 100,848 | |||||||||||
M&T Bank Corp., senior note, FRN thereafter, 1.671%, 7/26/23 | United States | 50,000 | 50,443 | |||||||||||
Sumitomo Mitsui Financial Group Inc., senior note, FRN thereafter, | Japan | 50,000 | 50,242 | |||||||||||
Wells Fargo & Co., senior note, FRN thereafter, 2.851%, 1/24/23 | United States | 50,000 | 50,388 | |||||||||||
|
| |||||||||||||
453,938 | ||||||||||||||
|
| |||||||||||||
Beverages 4.0% | ||||||||||||||
Coca Cola Co., senior note, 3.15%, 11/15/20 | United States | 50,000 | 50,174 | |||||||||||
PepsiCo Inc., senior note, 1.70%, 10/06/21 | United States | 50,000 | 50,623 | |||||||||||
|
| |||||||||||||
100,797 | ||||||||||||||
|
| |||||||||||||
Biotechnology 4.1% | ||||||||||||||
a | AbbVie Inc., senior note, 144A, FRN thereafter, 2.56%, 11/21/22 | United States | 50,000 | 50,262 | ||||||||||
Gilead Sciences Inc., senior note, 4.40%, 12/01/21 | United States | 50,000 | 51,858 | |||||||||||
|
| |||||||||||||
102,120 | ||||||||||||||
|
| |||||||||||||
Capital Markets 8.0% | ||||||||||||||
Deutsche Bank AG, senior note, 3.375%, 5/12/21 | Germany | 50,000 | 50,585 | |||||||||||
Goldman Sachs Group Inc., senior note, FRN thereafter, 2.557%, 2/23/23 | United States | 50,000 | 50,192 | |||||||||||
Morgan Stanley, Sr Unsecured, GMTN, FRN thereafter, 0.756%, 1/20/23 | United States | 50,000 | 50,146 | |||||||||||
The Bank of New York Mellon Corp., senior note, 2.05%, 5/03/21 | United States | 50,000 | 50,461 | |||||||||||
|
| |||||||||||||
201,384 | ||||||||||||||
|
| |||||||||||||
Chemicals 2.2% | ||||||||||||||
LYB International Finance BV, senior note, 4.00%, 7/15/23 | United States | 50,000 | 54,221 | |||||||||||
|
| |||||||||||||
Consumer Finance 4.1% | ||||||||||||||
American Express Credit Corp., senior note, 2.25%, 5/05/21 | United States | 50,000 | 50,503 | |||||||||||
a | Capital One Financial Corp., senior note, 144A, 2.60%, 5/11/23 | United States | 50,000 | 52,355 | ||||||||||
|
| |||||||||||||
102,858 | ||||||||||||||
|
| |||||||||||||
Energy Equipment & Services 4.2% | ||||||||||||||
Baker Hughes a GE Co. LLC/Baker Hughes Co-Obligor Inc., senior note, 2.773%, 12/15/22 | United States | 50,000 | 52,315 | |||||||||||
a | Schlumberger Finance Canada Ltd., senior note, 144A, 2.65%, 11/20/22 | Canada | 50,000 | 51,867 | ||||||||||
|
| |||||||||||||
104,182 | ||||||||||||||
|
| |||||||||||||
Equity Real Estate Investment Trusts (REITs) 2.1% | ||||||||||||||
Healthcare Realty Trust Inc., senior bond, 3.75%, 4/15/23 | United States | 50,000 | 53,700 | |||||||||||
|
| |||||||||||||
Food Products 2.1% | ||||||||||||||
BAT Capital Corp., senior note, 2.764%, 8/15/22 | United States | 50,000 | 51,842 | |||||||||||
|
| |||||||||||||
Health Care Providers & Services 6.2% | ||||||||||||||
Cigna Corp., Sr Unsecured, FRN thereafter, 1.165%, 7/15/23 | United States | 50,000 | 50,544 | |||||||||||
CVS Health Corp., senior note, 3.70%, 3/09/23 | United States | 50,000 | 53,576 | |||||||||||
UnitedHealth Group Inc., senior note, 3.15%, 6/15/21 | United States | 50,000 | 51,031 | |||||||||||
|
| |||||||||||||
155,151 | ||||||||||||||
|
|
54 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Ultra Short Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Household Products 2.0% | ||||||||||||||
The Procter & Gamble Co., senior note, 1.70%, 11/03/21 | United States | 50,000 | $ | 50,785 | ||||||||||
|
| |||||||||||||
Insurance 2.1% | ||||||||||||||
a | Liberty Mutual Group Inc., senior note, 144A, 4.95%, 5/01/22 | United States | 50,000 | 53,288 | ||||||||||
|
| |||||||||||||
Machinery 2.0% | ||||||||||||||
a | Caterpillar Financial Services Corp., senior note, 144A, FRN thereafter, 2.355%, 3/15/21 | United States | 50,000 | 50,042 | ||||||||||
|
| |||||||||||||
Metals & Mining 2.1% | ||||||||||||||
a | Glencore Finance Canada Ltd., senior bond, 144A, 4.95%, 11/15/21 | Canada | 50,000 | 52,215 | ||||||||||
|
| |||||||||||||
Multiline Retail 2.0% | ||||||||||||||
Family Dollar Stores Inc., senior bond, first lien, 5.00%, 2/01/21 | United States | 50,000 | 50,696 | |||||||||||
|
| |||||||||||||
Oil, Gas & Consumable Fuels 4.0% | ||||||||||||||
MPLX LP, senior note, FRN thereafter, 1.413%, 9/09/22 | United States | 50,000 | 50,003 | |||||||||||
a | Woodside Finance Ltd., senior note, 144A, 4.60%, 5/10/21 | Australia | 50,000 | 50,613 | ||||||||||
|
| |||||||||||||
100,616 | ||||||||||||||
|
| |||||||||||||
Pharmaceuticals 4.1% | ||||||||||||||
a | Bristol-Myers Squibb Co., senior note, 144A, 2.60%, 5/16/22 | United States | 50,000 | 51,890 | ||||||||||
GlaxoSmithKline Capital PLC, senior note, 0.534%, 10/01/23 | United Kingdom | 50,000 | 50,052 | |||||||||||
|
| |||||||||||||
101,942 | ||||||||||||||
|
| |||||||||||||
Road & Rail 2.1% | ||||||||||||||
a | Penske Truck Leasing Co. LP/PTL Finance Corp., senior note, 144A, 2.70%, 3/14/23 | United States | 50,000 | 52,083 | ||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 2.1% | ||||||||||||||
Intel Corp., senior note, 3.30%, 10/01/21 | United States | 50,000 | 51,496 | |||||||||||
|
| |||||||||||||
Software 2.1% | ||||||||||||||
Oracle Corp., senior note, 2.50%, 5/15/22 | United States | 50,000 | 51,582 | |||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $2,091,595) | 2,097,445 | |||||||||||||
|
| |||||||||||||
Asset-Backed Securities 8.0% | ||||||||||||||
Citibank Credit Card Issuance Trust, Series 2017-A5, Class A5, A5, FRN thereafter, 0.81%, 4/22/26 | United States | 100,000 | 100,767 | |||||||||||
Discover Card Execution Note Trust, Series 2017-A5, Class A5, A5, FRN thereafter, 0.785%, 12/15/26 | United States | 100,000 | 100,801 | |||||||||||
|
| |||||||||||||
Total Asset-Backed Securities (Cost $200,922) | 201,568 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 2,299,013 | |||||||||||||
|
| |||||||||||||
Short Term Investments 10.1% | ||||||||||||||
Money Market Funds 2.1% | ||||||||||||||
b,c | Institutional Fiduciary Trust Portfolio, 0.00% | United States | 52,042 | 52,042 | ||||||||||
|
| |||||||||||||
Commercial Paper 8.0% | ||||||||||||||
HSBC USA Inc. 1/04/21 | United States | 100,000 | 99,960 | |||||||||||
The Walt Disney Co. | United States | 100,000 | 99,996 | |||||||||||
|
| |||||||||||||
199,956 | ||||||||||||||
|
| |||||||||||||
Total Short Term Investments (Cost $251,904) | 259,998 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $2,544,421) 102.0% | 2,551,011 | |||||||||||||
Other Assets, less Liabilities (2.0)% | (50,926 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 2,500,085 | ||||||||||||
|
|
franklintempleton.com | Semiannual Report | 55 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Ultra Short Bond ETF (continued)
See Abbreviations on page 76.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $566,053, representing 23% of net assets.
bSee Note 3(c) regarding investments in affiliated management investment companies.
cThe rate shown is the annualized seven-day effective yield at period end.
56 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2020 (unaudited)
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty Bond ETF | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost – Unaffiliated issuers | $ | 992,152,625 | $ | 106,965,511 | $ | 1,592,471,062 | ||||||
Cost – Non-controlled affiliates (Note 3d) | — | — | 14,871,142 | |||||||||
|
| |||||||||||
Value – Unaffiliated issuers | $ | 1,025,137,568 | $ | 116,223,799 | $ | 1,632,663,598 | ||||||
Value – Non-controlled affiliates (Note 3d) | — | — | 14,871,142 | |||||||||
Cash | 1,784,882 | 177,039 | 19,312,075 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | — | — | 18,898,211 | |||||||||
Dividend and Interest | 9,172,287 | 108,754 | 7,739,457 | |||||||||
Deposits with brokers for: | ||||||||||||
Futures contracts | 241,608 | — | 948,202 | |||||||||
Swap contracts | 31,711 | — | 382,570 | |||||||||
Variation margin on futures contracts | 5,133 | — | 173,698 | |||||||||
|
| |||||||||||
Total assets | 1,036,373,189 | 116,509,592 | 1,694,988,953 | |||||||||
|
| |||||||||||
Liabilities: | ||||||||||||
Cash deposit due to broker for centrally cleared swaps | 16,886 | — | 108,573 | |||||||||
Payables: | ||||||||||||
Investment securities purchased | 3,665,014 | — | 35,325,662 | |||||||||
Management fees | 281,759 | 25,707 | 170,547 | |||||||||
Transfer agent fees | 9,121 | 9,121 | 9,117 | |||||||||
Distributions to shareholders | 2,513,062 | — | 3,436,560 | |||||||||
Custodian fees | 11,269 | 642 | 5,116 | |||||||||
Professional fees | 38,792 | 29,953 | 15,243 | |||||||||
Reports to shareholders | 2,354 | 1,752 | 514 | |||||||||
Registration and filing fees | — | 699 | — | |||||||||
Accrued expenses and other liabilities | 7,713 | 3,370 | 7,511 | |||||||||
|
| |||||||||||
Total liabilities | 6,545,970 | 71,244 | 39,078,843 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 1,029,827,219 | $ | 116,438,348 | $ | 1,655,910,110 | ||||||
|
| |||||||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 991,403,776 | $ | 107,921,488 | $ | 1,607,940,992 | ||||||
Total distributable earnings (loss) | 38,423,443 | 8,516,860 | 47,969,118 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 1,029,827,219 | $ | 116,438,348 | $ | 1,655,910,110 | ||||||
|
| |||||||||||
Shares outstanding | 38,650,000 | 3,000,000 | 63,150,000 | |||||||||
|
| |||||||||||
Net asset value per share | $ | 26.64 | $ | 38.81 | $ | 26.22 | ||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 57 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2020 (unaudited)
Franklin Liberty Bond ETF | Franklin Liberty Bond ETF | |||||||
Assets: | ||||||||
Investments in securities: | ||||||||
Cost – Unaffiliated issuers | $ | 418,152,643 | $ | 2,492,379 | ||||
Cost – Non-controlled affiliates (Note 3d) | 3,649,239 | 52,042 | ||||||
|
| |||||||
Value – Unaffiliated issuers | $ | 419,980,541 | $ | 2,498,969 | ||||
Value – Non-controlled affiliates (Note 3d) | 3,649,239 | 52,042 | ||||||
Receivables: | ||||||||
Interest | 1,733,533 | 13,534 | ||||||
Affiliates | — | 5,871 | ||||||
|
| |||||||
Total assets | 425,363,313 | 2,570,416 | ||||||
|
| |||||||
Liabilities: | ||||||||
Payables: | ||||||||
Investment securities purchased | — | 50,000 | ||||||
Management fees | 21,729 | — | ||||||
Transfer agent fees | 4,830 | 3,334 | ||||||
Trustees’ fees and expenses | 854 | 440 | ||||||
Distributions to shareholders | 701,920 | 4,264 | ||||||
Custodian fees | 449 | 310 | ||||||
Professional fees | 9,190 | 7,068 | ||||||
Reports to shareholders | 1,722 | 1,282 | ||||||
Registration and filing fees | — | 1,069 | ||||||
Accrued expenses and other liabilities | 3,715 | 2,564 | ||||||
|
| |||||||
Total liabilities | 744,409 | 70,331 | ||||||
|
| |||||||
Net assets, at value | $ | 424,618,904 | $ | 2,500,085 | ||||
|
| |||||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 424,095,716 | $ | 2,500,000 | ||||
Total distributable earnings (loss) | 523,188 | 85 | ||||||
|
| |||||||
Net assets, at value | $ | 424,618,904 | $ | 2,500,085 | ||||
|
| |||||||
Shares outstanding | 16,850,000 | 100,000 | ||||||
|
| |||||||
Net asset value per share | $ | 25.20 | $ | 25.00 | ||||
|
|
58 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2020 (unaudited)
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty Bond ETF | ||||||||||
Investment income: | ||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||
Unaffiliated issuers | $ | — | $ | 1,053,477 | $ | — | ||||||
Interest: | ||||||||||||
Unaffiliated issuers | 11,239,296 | — | 14,323,158 | |||||||||
|
| |||||||||||
Total investment income | 11,239,296 | 1,053,477 | 14,323,158 | |||||||||
|
| |||||||||||
Expenses: | ||||||||||||
Management fees (Note 3a) | 1,972,693 | 151,122 | 1,166,624 | |||||||||
Transfer agent fees | 7,821 | 7,821 | 7,824 | |||||||||
Custodian fees | 10,879 | 684 | 4,150 | |||||||||
Reports to shareholders | 5,098 | 4,822 | 3,009 | |||||||||
Registration and filing fees | 2,237 | 2,614 | 11,108 | |||||||||
Professional fees | 30,664 | 17,220 | 31,283 | |||||||||
Trustees’ fees and expenses | 23,541 | 3,262 | 43,492 | |||||||||
Other | 6,154 | 2,320 | 5,869 | |||||||||
|
| |||||||||||
Total expenses | 2,059,087 | 189,865 | 1,273,359 | |||||||||
Expenses waived/paid by affiliates (Note 3c) | (622,259 | ) | (38,743 | ) | (106,735 | ) | ||||||
|
| |||||||||||
Net expenses | 1,436,828 | 151,122 | 1,166,624 | |||||||||
|
| |||||||||||
Net investment income | 9,802,468 | 902,355 | 13,156,534 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 10,835,375 | (1,531,314 | ) | 12,592,366 | ||||||||
In-kind redemptions | — | 3,718,067 | — | |||||||||
Foreign currency transactions | — | (574 | ) | (859 | ) | |||||||
Futures contracts | (151,219 | ) | — | 289,590 | ||||||||
Swap contracts | 16,070 | — | 36,269 | |||||||||
|
| |||||||||||
Net realized gain (loss) | 10,700,226 | 2,186,179 | 12,917,366 | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 52,603,828 | 18,514,668 | 31,424,947 | |||||||||
Translation of other assets and liabilities denominated in foreign currencies | — | 160 | — | |||||||||
Futures contracts | (149,937 | ) | — | (673,581 | ) | |||||||
Swap contracts | — | — | 575,441 | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) | 52,453,891 | 18,514,828 | 31,326,807 | |||||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 63,154,117 | 20,701,007 | 44,244,173 | |||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 72,956,585 | $ | 21,603,362 | $ | 57,400,707 | ||||||
|
|
aForeign taxes withheld on dividends | $ | 2,858 | ||||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 59 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2020 (unaudited)
Franklin Liberty Bond ETFa | Franklin Liberty Bond ETFb | |||||||
Investment income: | ||||||||
Interest: | ||||||||
Unaffiliated issuers | $ | 740,715 | $ | 3,763 | ||||
|
| |||||||
Total investment income | 740,715 | 3,763 | ||||||
|
| |||||||
Expenses: | ||||||||
Management fees (Note 3a) | 480,230 | 3,263 | ||||||
Transfer agent fees | 4,830 | 3,334 | ||||||
Custodian fees | 449 | 310 | ||||||
Reports to shareholders | 1,858 | 1,282 | ||||||
Registration and filing fees | 5,127 | 1,069 | ||||||
Professional fees | 9,190 | 7,068 | ||||||
Trustees’ fees and expenses | 854 | 440 | ||||||
Other | 3,715 | 2,565 | ||||||
|
| |||||||
Total expenses | 506,253 | 19,331 | ||||||
Expenses waived/paid by affiliates (Note 3c) | (410,207 | ) | (18,528 | ) | ||||
|
| |||||||
Net expenses | 96,046 | 803 | ||||||
|
| |||||||
Net investment income | 644,669 | 2,960 | ||||||
|
| |||||||
Realized and unrealized gains (losses): | ||||||||
Net realized gain (loss) from: | ||||||||
Investments: | ||||||||
Unaffiliated issuers | 11 | — | ||||||
|
| |||||||
Net realized gain (loss) | 11 | — | ||||||
|
| |||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments: | ||||||||
Unaffiliated issuers | 1,827,898 | 6,590 | ||||||
|
| |||||||
Net change in unrealized appreciation (depreciation) | 1,827,898 | 6,590 | ||||||
|
| |||||||
Net realized and unrealized gain (loss) | 1,827,909 | 6,590 | ||||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | $ | 2,472,578 | $ | 9,550 | ||||
|
|
aFor the period June 9, 2020 (commencement of operations) to September 30, 2020.
bFor the period July 14, 2020 (commencement of operations) to September 30, 2020
60 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S. Low Volatility ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 9,802,468 | $ | 9,749,119 | $ | 902,355 | $ | 758,854 | ||||||||
Net realized gain (loss) | 10,700,226 | 3,290,963 | 2,186,179 | (2,881,061 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) | 52,453,891 | (19,848,085 | ) | 18,514,828 | (11,385,777 | ) | ||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 72,956,585 | (6,808,003 | ) | 21,603,362 | (13,507,984 | ) | ||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders | (14,111,746 | ) | (12,798,430 | ) | (884,597 | ) | (613,357 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 417,644,665 | 554,879,195 | 21,496,993 | 74,900,836 | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 476,489,504 | 535,272,762 | 42,215,758 | 60,779,495 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 553,337,715 | 18,064,953 | 74,222,590 | 13,443,095 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 1,029,827,219 | $ | 553,337,715 | $ | 116,438,348 | $ | 74,222,590 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 61 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Liberty U.S. Core Bond ETF | Franklin Liberty U.S. Treasury Bond ETF | |||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | Six Months Ended September 30, 2020 (unaudited)a | ||||||||||
Increase (decrease) in net assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 13,156,534 | $ | 9,777,030 | $ | 644,669 | ||||||
Net realized gain (loss) | 12,917,366 | 5,129,841 | 11 | |||||||||
Net change in unrealized appreciation (depreciation) | 31,326,807 | 8,579,753 | 1,827,898 | |||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 57,400,707 | 23,486,624 | 2,472,578 | |||||||||
|
|
|
| |||||||||
Distributions to shareholders | (20,977,825 | ) | (12,075,002 | ) | (1,949,390 | ) | ||||||
|
|
|
| |||||||||
Capital share transactions: (Note 2) | 765,955,457 | 842,120,149 | 424,095,716 | |||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets | 802,378,339 | 853,531,771 | 424,618,904 | |||||||||
Net assets: | ||||||||||||
Beginning of period | 853,531,771 | — | — | |||||||||
|
|
|
| |||||||||
End of Period | $ | 1,655,910,110 | $ | 853,531,771 | $ | 424,618,904 | ||||||
|
|
|
|
aFor the period September 17, 2019 (commencement of operations) to March 31, 2020.
62 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Liberty Ultra Short Bond ETF | ||||
Six Months Ended September 30, 2020 (unaudited)a | ||||
Increase (decrease) in net assets: | ||||
Operations: | ||||
Net investment income | $ | 2,960 | ||
Net change in unrealized appreciation (depreciation) | 6,590 | |||
|
| |||
Net increase (decrease) in net assets resulting from operations | 9,550 | |||
|
| |||
Distributions to shareholders | (9,465 | ) | ||
|
| |||
Capital share transactions: (Note 2) | 2,500,000 | |||
|
| |||
Net increase (decrease) in net assets | 2,500,085 | |||
Net assets: | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 2,500,085 | ||
|
|
aFor the period July 14, 2020 (commencement of operations) to September 30, 2020.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 63 |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-four separate funds, five of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and are actively managed, thus they are not designed to track an index. The Trust began offering shares of The Franklin Liberty U.S. Treasury Bond ETF Fund commenced operations on June 9, 2020 & The Franklin Liberty Ultra Short Bond ETF Fund commenced operations on July 14, 2020.
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities and exchange traded funds listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued
based upon fundamental characteristics or relationships to similar securities.
Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Funds’ pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price
64 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of
dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination.
Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
The Funds entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit
protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statements of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statements of Operations.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional
collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
See Note 8 regarding other derivative information.
d. Income and Deferred Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2020, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax
66 | Semiannual Report | franklintempleton.com |
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
d. Income and Deferred Taxes (continued)
years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
e. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and capital gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets
or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense.
f. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specific number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
At September 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Liberty Investment Grade Corporate ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 17,200,000 | $ | 453,841,966 | 22,100,000 | $ | 554,879,195 | ||||||||||||||
Shares redeemed | (1,400,000 | ) | (36,197,301 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 15,800,000 | $ | 417,644,665 | 22,100,000 | $ | 554,879,195 | ||||||||||||||
|
| |||||||||||||||||||
Franklin Liberty U.S. Low Volatility ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 950,000 | $ | 34,749,424 | 2,050,000 | $ | 76,346,270 | ||||||||||||||
Shares redeemed | (350,000 | ) | (13,252,431 | ) | (50,000 | ) | (1,445,434 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 600,000 | $ | 21,496,993 | 2,000,000 | $ | 74,900,836 | ||||||||||||||
|
| |||||||||||||||||||
Franklin Liberty U.S. Core Bond ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020a | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 33,150,000 | $ | 858,429,152 | 38,500,001 | $ | 968,931,821 | ||||||||||||||
Shares redeemed | (3,550,000 | ) | (92,473,695 | ) | (4,950,001 | ) | (126,811,672 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 29,600,000 | $ | 765,955,457 | 33,550,000 | $ | 842,120,149 | ||||||||||||||
|
| |||||||||||||||||||
Franklin Liberty U.S. Treasury Bond ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020b | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 16,850,001 | $ | 424,095,741 | — | $ | — | ||||||||||||||
Shares redeemed | (1 | ) | (25 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 16,850,000 | $ | 424,095,716 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020c | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,001 | $ | 2,500,025 | — | $ | — | ||||||||||||||
Shares redeemed | (1 | ) | (25 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 100,000 | $ | 2,500,000 | — | $ | — | ||||||||||||||
|
|
aFor the period September 17, 2019 (commencement of operations) to March 31, 2020.
bFor the period June 09, 2020 (commencement of operations) to September 30, 2020.
cFor the period July 14, 2020 (commencement of operations) to September 30, 2020.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Templeton Institutional, LLC (FT Institutional) | Investment manager | |
Franklin Templeton Investimentos (Brasil) Ltda. (FTI Brasil) | Investment manager | |
Franklin Templeton Investment Management Limited (FTIML) | Investment manager | |
Franklin Templeton Investment Trust Management Co., Ltd. (FT Korea) | Investment manager | |
Franklin Templeton Investments (ME) Limited (FTIME) | Investment manager | |
Franklin Templeton Investments Corp. (FTIC) | Investment manager | |
Templeton Asset Management Ltd. (TAML) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
a. Management Fees
Franklin Liberty U.S. Low Volatility ETF, Franklin Liberty U.S. Core Bond ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF pay an investment management fee to Advisers of 0.290%, 0.150%, 0.450% and 0.610%, respectively, per year of the average daily net assets of each of the Funds.
Franklin Liberty Investment Grade Corporate ETF pays an investment management fee to Advisers based on the average daily net assets of the fund as follows:
Annualized Fee Rate | Net Assets | |
0.625% | Up to and including $100 million | |
0.500% | Over $100 million, up to and including $250 million | |
0.450% | Over $250 million, up to and including $7.5 billion | |
0.440% | Over $7.5 billion, up to and including $10 billion | |
0.430% | Over $10 billion, up to and including $12.5 billion | |
0.420% | Over $12.5 billion, up to and including $15 billion | |
0.400% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | Over $20 billion, up to and including $35 billion | |
0.355% | Over $35 billion, up to and including $50 billion | |
0.350% | In excess of $50 billion |
For the period ended September 30, 2020, the gross effective investment management fee rate was 0.481% of the Franklin Liberty Investment Grade Corporate ETF’s average daily net assets.
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
franklintempleton.com | Semiannual Report | 69 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
c. Waiver and Expense Reimbursements
Advisers has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by Franklin Liberty Investment Grade Corporate ETF, Franklin Liberty U.S. Low Volatility ETF, Franklin Liberty U.S. Core Bond ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF so that the expenses (including acquired fund fees and expenses) of the Funds do not exceed 0.35%, 0.29%, 0.15%, 0.09% and 0.15%, respectively, based on the average net assets (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until July 31, 2021. Total expenses waived or paid are not subject to recapture subsequent to the Funds’ fiscal year end.
d. Investments in Affiliated Management Investment Companies
Value at Beginning of Period | Purchases | Sales | Realized Gain (Loss) | Net Change in Appreciation (Depreciation) | Value at End of | Number of Shares of Period | Investment Income | |||||||||||||||||||||||||
Franklin Liberty U.S. Core Bond ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 351,382,628 | $ | (336,511,486 | ) | $ | — | $ | — | $ | 14,871,142 | 14,871,142 | $ | — | ||||||||||||||||
Franklin Liberty U.S. Treasury Bond ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 55,621,015 | $ | (51,971,776 | ) | $ | — | $ | — | $ | 3,649,239 | 3,649,239 | $ | — | ||||||||||||||||
Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 712,771 | $ | (660,728 | ) | $ | — | $ | — | $ | 52,042 | 52,042 | $ | — |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
e. Other Affiliated Transactions
At September 30, 2020, the shares of the funds were owned by the following investment companies:
Funds | Shares | Percentage of Outstanding Sharesa | ||||||
Franklin Liberty Investment Grade Corporate ETF | ||||||||
Franklin Conservative Allocation Fund | 1,963,175 | 5.1% | ||||||
Franklin Moderate Allocation Fund | 1,963,200 | 5.1% | ||||||
Franklin Total Return Fund | 18,335,000 | 47.4% | ||||||
Franklin 529 Portfolios | 11,277,775 | 29.2% | ||||||
|
| |||||||
33,539,150 | 86.8% | |||||||
|
| |||||||
Franklin Liberty U.S. Low Volatility ETF | ||||||||
Franklin Managed Income Fund | 1,000,000 | 33.3% | ||||||
|
| |||||||
Franklin Liberty U.S Core Bond ETF | ||||||||
Franklin Conservative Allocation Fund | 11,633,575 | 18.4% | ||||||
Franklin Moderate Allocation Fund | 12,307,198 | 19.5% | ||||||
Franklin Growth Allocation Fund | 3,926,075 | 6.2% | ||||||
Franklin 529 Portfolios | 25,657,025 | 40.6% | ||||||
|
| |||||||
53,523,873 | 84.7% | |||||||
|
| |||||||
Franklin Liberty U.S. Treasury Bond ETF | ||||||||
Franklin Conservative Allocation Fund | 2,598,900 | 15.4% | ||||||
Franklin Moderate Allocation Fund | 2,611,075 | 15.5% | ||||||
Franklin 529 Portfolios | 9,646,325 | 57.2% | ||||||
|
| |||||||
14,856,300 | 88.1% | |||||||
|
| |||||||
Franklin Liberty Ultra Short Bond ETF | ||||||||
Franklin Resources Inc. | 50,000 | 50.0% | ||||||
|
| |||||||
50,000 | 50.0% | |||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2020, the capital loss carryforwards were as follows:
Franklin Liberty U.S. Low Volatility ETF | ||||
Capital loss carryforwards not subject to expiration: | ||||
Short term | $ | 2,874,568 | ||
|
|
franklintempleton.com | Semiannual Report | 71 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
During the year ended March 31, 2020, FTLG utilized $909,692 as capital loss carryforward.
The tax character of distributions paid during the years ended March 31, 2020 and 2019, were as follows:
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S Low Volatility ETF | Franklin Liberty U.S Core Bond ETF | ||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||
Distributions paid from: | ||||||||||||||||||||||||||||||||
Ordinary income | $ | 12,798,430 | $ | 1,010,692 | $ | 613,357 | $ | 186,923 | $ | 11,995,769 | $ | — | ||||||||||||||||||||
Long-term Capital Gain | — | — | — | 134,100 | 79,233 | — | ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Total | $ | 12,798,430 | $ | 1,010,692 | $ | 613,357 | $ | 321,023 | $ | 12,075,002 | $ | — | ||||||||||||||||||||
|
|
At September 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Core Bond ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||
Cost of investments | $ | 992,152,625 | $ | 106,965,511 | $ | 1,607,342,204 | $ | 421,801,882 | $ | 2,544,421 | ||||||||||
|
| |||||||||||||||||||
Unrealized appreciation | $ | 35,860,948 | 12,801,033 | $ | 44,073,547 | $ | 2,693,896 | $ | 11,667 | |||||||||||
Unrealized depreciation | (2,876,005 | ) | (3,542,745 | ) | (3,881,011 | ) | (765,998 | ) | (5,077 | ) | ||||||||||
|
| |||||||||||||||||||
Net unrealized appreciation (depreciation) | $ | 32,984,943 | 9,258,288 | $ | 40,192,536 | $ | 1,827,898 | $ | 6,590 | |||||||||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions, passive foreign investment company shares and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2020, were as follows:
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Volatility ETF | Franklin Liberty Bond ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||
Purchases | $ | 698,634,106 | $ | 23,101,634 | $ | 1,814,642,164 | $ | 475,134,703 | $ | 2,555,306 | ||||||||||
Sales | $ | 282,930,075 | $ | 22,883,004 | $ | 1,023,319,523 | $ | 52,131,686 | $ | 660,728 |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2020, were as follows:
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty Bond ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||
Cost of Securities Received | $ | — | $ | 34,164,231 | $ | — | $ | — | $ | — | ||||||||||
Value of Securities Delivered | $ | — | $ | 13,049,702 | $ | — | $ | — | $ | — |
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
6. Concentration of Risk (continued)
increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.
7. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
8. Other Derivative Information
At September 30, 2020, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
Franklin Liberty Investment Grade Corporate ETF | ||||||||||||
Interest Rate Contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 217,696a | ||||||
|
|
|
| |||||||||
Franklin Liberty U.S. Core Bond ETF | ||||||||||||
Interest Rate Contracts | Variation margin on futures contracts | $ | 54,471 | a | Variation margin on futures contracts | $ | 340,447a | |||||
|
|
|
|
aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
For the period ended September 30, 2020, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in for the Period | ||||||||
Franklin Liberty Investment Grade Corporate ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Interest Rate Contracts | Futures contracts | $ | (151,219 | ) | Futures contracts | $ | (149,937 | ) | ||||
Credit Default Contracts | Swap contracts | 16,070 | Swap contracts | — | ||||||||
|
|
|
| |||||||||
Totals | $ | (135,149 | ) | $ | (149,937 | ) | ||||||
|
|
|
| |||||||||
Franklin Liberty U.S. Core Bond ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Interest Rate Contracts | Futures contracts | $ | 289,590 | Futures contracts | $ | (673,581 | ) | |||||
Credit Default Contracts | Swap contracts | 36,269 | Swap contracts | 575,441 | ||||||||
|
|
|
| |||||||||
Totals | $ | 325,859 | $ | (98,140 | ) | |||||||
|
|
|
|
franklintempleton.com | Semiannual Report | 73 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
For the period ended September 30, 2020, the average month end notional amount of futures and swaps contracts were as follows:
Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Core Bond ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||
Futures contracts | $ | 64,878,684 | $ | — | $ | 80,293,509 | $ | — | $ | — | ||||||||||
Credit Default Contracts | $ | 3,571,429 | $ | — | $ | 5,839,286 | $ | — | $ | — |
See Note 1(c) regarding derivative financial instruments.
9. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
A summary of inputs used as of September 30, 2020, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Liberty Investment Grade Corporate ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 1,016,957,568 | $ | — | $ | 1,016,957,568 | ||||||||
Short-Term Investments | — | 8,180,000 | — | 8,180,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | — | $ | 1,025,137,568 | $ | — | $ | 1,025,137,568 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 217,696 | $ | — | $ | — | $ | 217,696 | ||||||||
|
| |||||||||||||||
Franklin Liberty U.S. Low Volatility ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments | $ | 115,433,799 | $ | — | $ | — | $ | 115,433,799 | ||||||||
Short-Term Investments | — | 790,000 | — | 790,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 115,433,799 | $ | 790,000 | $ | — | $ | 116,223,799 | ||||||||
|
|
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Liberty U.S. Core Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities: a | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 526,389,478 | $ | — | $ | 526,389,478 | ||||||||
U.S. Government & Agency Securities | — | 558,638,607 | — | 558,638,607 | ||||||||||||
Municipal Bonds | — | 35,769,790 | — | 35,769,790 | ||||||||||||
Mortgage-Backed Securities | — | 441,474,751 | — | 441,474,751 | ||||||||||||
Foreign Government and Agency Securities | — | 47,922,820 | — | 47,922,820 | ||||||||||||
Asset-Backed Securities | — | 22,468,152 | — | 22,468,152 | ||||||||||||
Short-Term Investments | 14,871,142 | — | — | 14,871,142 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 14,871,142 | $ | 1,632,663,598 | $ | — | $ | 1,647,534,740 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 54,471 | $ | — | $ | — | $ | 54,471 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 340,447 | $ | — | $ | — | $ | 340,447 | ||||||||
|
| |||||||||||||||
Franklin Liberty U.S. Treasury Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
U.S. Government and Agency Securities | $ | — | $ | 409,862,367 | $ | — | $ | 409,862,367 | ||||||||
Mortgage-Backed Securities | — | 10,118,174 | — | 10,118,174 | ||||||||||||
Short-Term Investments | 3,649,239 | — | — | 3,649,239 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 3,649,239 | $ | 419,980,541 | $ | — | $ | 423,629,780 | ||||||||
|
| |||||||||||||||
Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 2,097,445 | $ | — | $ | 2,097,445 | ||||||||
Asset-Backed Securities | — | 201,568 | — | 201,568 | ||||||||||||
Short-Term Investments | 52,042 | 199,956 | — | 251,998 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 52,042 | $ | 2,498,969 | $ | — | $ | 2,551,011 | ||||||||
|
|
aFor detailed categories, see the accompanying Statement of Investments.
10. New Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the financial statements.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
11. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Abbreviations
Selected Portfolio | ||
FHLB | Federal Home Loan Bank | |
FRN | Floating Rate Note | |
REIT | Real Estate Investment Trust | |
ADR | American Depositary Receipt+ | |
GO | General Obligation | |
MTA | Metropolitan Transit Authority | |
REIT | Real Estate Investment Trust |
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Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty Investment Grade Corporate ETF
Franklin Liberty U.S. Low Volatility ETF
(each a Fund)
At a meeting held on May 14, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisers, Inc. (FAI) and the Trust, on behalf of each Fund, and the investment sub-advisory agreement between FAI and Franklin Templeton Institutional, LLC (Sub-Adviser), an affiliate of FAI, on behalf of the Franklin Liberty Investment Grade Corporate ETF (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate. FAI and the Sub-Adviser are each referred to herein as a Manager.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by each Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to each Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from each Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by each Manager; (ii) the investment performance of each Fund; (iii) the costs of the services provided and profits realized by
each Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by each Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of each Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by each Manager and its affiliates; and management fees charged by each Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the effectiveness of those plans during the pandemic, and developing strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity and liquidity risk management. The Board further noted its ongoing engagement with management, the Funds’ auditor and State Street Bank and Trust Company, the Funds’ custodian, about their responses to the pandemic and the pandemic’s impact on their operating continuity, as well as the impact on the Funds (especially with respect to valuation and liquidity).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Managers’ parent, and its commitment to the registered fund business as evidenced by its continued introduction of
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new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions currently provided by FT or an affiliate to other funds in the complex, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. Specifically, the Board discussed with management the expected impact of the Legg Mason acquisition on FT and the Funds, including management’s expectations with respect to the integration of Legg Mason’s exchange-traded funds into the FT family of funds. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, in her role as President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by each Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for the one-year period ended February 29, 2020. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with the Manager about the performance of the Funds to date, particularly as compared to peers, and referenced earlier discussions with the Manager on matters related to, among other things, the importance of performance to asset growth and growth of market share, the comparability of peer data, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding the Manager’s strategy behind the overall product line-up, the sources of asset growth, the nature of the Manager’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted the Manager’s high level of client engagement
and the strength of its compliance program. A summary of each Fund’s performance results is below.
Franklin Liberty Investment Grade Corporate ETF – The Performance Universe for the Fund included the Fund and all retail and institutional BBB-rated corporate debt funds and exchange-traded funds. The Fund commenced operations on October 3, 2016, and thus has been in operation for less than five years. The Board noted that the Fund’s annualized total return for the one-year and three-year periods were above the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.
Franklin Liberty U.S. Low Volatility ETF – The Performance Universe for the Fund included the Fund and all retail and institutional large-cap core funds and exchange-traded funds. The Fund commenced operations on September 20, 2016, and thus has been in operation for less than five years. The Board noted that the Fund’s annualized total return for the one-year and three-year periods were above the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
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Franklin Liberty Investment Grade Corporate ETF – The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund, three other BBB-rated corporate debt funds, and one A-rated corporate debt fund. The Board noted that the Management Rate for the Fund was above the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board also noted the small size of the Expense Group and that the Fund’s actual total expense ratio reflected a fee waiver from management. The Board further noted that the Sub-Adviser to the Fund is paid by FAI out of the management fee FAI receives from the Fund. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin Liberty U.S. Low Volatility ETF – The Expense Group for the Fund was comprised of pure index exchange-traded funds, which included the Fund, one multi-cap core fund and two multi-cap value funds. The Board noted that the Management Rate and actual total expense ratio for the Fund were below the medians of its Expense Group. The Board also noted the small size of the Fund’s Expense Group and that the Fund’s actual total expense ratio reflected a fee waiver from management. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by each Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged to review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by each Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level
of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up-front expenditures by each Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements, notably in the area of cybersecurity protections.
The Board also considered the extent to which each Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by each Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which each Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints for the Franklin Liberty Investment Grade Corporate ETF, which operates generally to share any economies of scale with the Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Managers incur across the FT family of funds as a whole. The Board concluded that to the extent economies of scale may be realized by a Manager and its affiliates, the Franklin Liberty Investment Grade Corporate ETF’s management fee structure provided a sharing of benefits with the Fund and its shareholders as the Fund grows. The Board noted that as of December 31, 2019, the net assets of the Franklin Liberty Investment Grade Corporate ETF were approximately $579 million and the net assets of the Franklin Liberty U.S. Low Volatility ETF were
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SHAREHOLDER INFORMATION
approximately $69 million. The Board recognized that there would not likely be any economies of scale until these Funds’ assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty Ultra Short Bond ETF
(Fund)
At an in-person meeting held on February 18, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved an investment management agreement between Franklin Advisers, Inc. (Manager) and the Trust, on behalf of the Fund (Management Agreement) for an initial two-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the Management Agreement.
In considering the approval of the Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board reviewed and considered all of the factors it deemed relevant in approving the Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by the Manager; (ii) the costs of the services to be provided by the Manager; and (iii) the extent to which economies of scale may be realized as the Fund grows. The Board also reviewed and considered the form of Management Agreement and the terms of the Management Agreement which were explained at the Meeting, noting that the form of Management Agreement was substantially the same as the standard forms of investment management agreement (that include administration services) for the other funds in the Franklin Templeton (FT) family of funds, including other series of the Trust.
In approving the Management Agreement, the Board, including a majority of the Independent Trustees, determined that
the terms of the proposed Management Agreement are fair and reasonable and that such Management Agreement is in the interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by the Manager and its affiliates to the Fund and its shareholders. This information included, among other things, the Fund’s proposed investment strategies and the ability of the Manager to implement such investment strategies; the qualifications, background and experience of the investment personnel that will be responsible for the day-to-day portfolio management of the Fund; the Manager’s experience as the manager of other funds and accounts, including other series of the Trust and other funds in the FT family of funds; the Manager’s strength and reputation within the industry; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of the Manager; and the Manager’s compliance capabilities, as demonstrated by, among other things, its policies and procedures reasonably designed to prevent violations of the Federal Securities Laws (as defined in Rule 38a-1 of the Investment Company Act of 1940). Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by the Manager and its affiliates to the Fund and its shareholders.
Fund Performance
The Board noted that, as the Fund had not yet commenced investment operations, there was no investment performance for the Fund. The Board also considered the proposed performance benchmark for the Fund and how such benchmark would be utilized to measure performance of the Manager.
Comparative Fees and Expenses
The Board reviewed and considered information regarding the Fund’s proposed total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the proposed total expense ratio and, separately, the proposed contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a
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similar expense structure as the Fund (Expense Group) as selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent organization. Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report (excluding the Fund), which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and eight other ultra-short obligation funds. The Board noted that the proposed Management Rate was above the median of its respective Expense Group. The Board also noted that the total expense ratio for the Fund was below the median and in the first quintile (least expensive) of its respective Expense Group. The Board concluded that the Management Rate to be charged to the Fund is reasonable. In doing so, the Board noted the Fund’s proposed total expense ratio reflected a fee waiver from management.
Profitability
The Board then noted that the Manager (and its affiliates) could not report any financial results from their relationships with the Fund because the Fund has not yet commenced investment operations, and thus, the Board could not evaluate the Manager’s (or its affiliates’) profitability with respect to the Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale in the future, the Board noted that it is not anticipated that the Fund will generate significant, if any, profit for the Manager and/or its affiliates for some time.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved
the Management Agreement for the Fund for an initial two-year period.
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty U.S. Treasury Bond ETF
(Fund)
At a meeting held on May 14, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved an investment management agreement between Franklin Advisers, Inc. (FAI) and the Trust and an investment sub-advisory agreement between FAI and Franklin Templeton Institutional, LLC (Sub-Adviser), an affiliate of FAI, on behalf of the Fund (each a Management Agreement) for an initial two-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve each Management Agreement. FAI and the Sub-Adviser are each referred to herein as a Manager.
In considering the approval of each Management Agreement, the Board reviewed and considered information provided by each Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board reviewed and considered all of the factors it deemed relevant in approving each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by each Manager; (ii) the costs of the services to be provided by each Manager; and (iii) the extent to which economies of scale may be realized as the Fund grows. The Board also reviewed and considered the form of each Management Agreement and the terms of each Management Agreement which were explained at the Meeting, noting that the form of each Management Agreement was substantially the same as the standard forms of investment management agreement (that include administration services) and investment sub-advisory agreement, as applicable, for the other actively managed exchange-traded funds that are series of the Trust.
In approving each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each proposed Management Agreement are fair and reasonable and that such Management Agreement is in the interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
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SHAREHOLDER INFORMATION
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by each Manager and its affiliates to the Fund and its shareholders. This information included, among other things, the Fund’s proposed investment strategies and the ability of each Manager to implement such investment strategies; the qualifications, background and experience of the investment personnel that will be responsible for the day-to-day portfolio management of the Fund; each Manager’s experience as the manager of other funds and accounts, including other series of the Trust and other funds in the FT family of funds; each Manager’s strength and reputation within the industry; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of each Manager; and each Manager’s compliance capabilities, as demonstrated by, among other things, its policies and procedures reasonably designed to prevent violations of the Federal Securities Laws (as defined in Rule 38a-1 of the Investment Company Act of 1940). Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by each Manager and its affiliates to the Fund and its shareholders.
Fund Performance
The Board noted that, as the Fund had not yet commenced investment operations, there was no investment performance for the Fund. The Board also considered the proposed performance benchmark for the Fund and how such benchmark would be utilized to measure performance of each Manager.
Comparative Fees and Expenses
The Board reviewed and considered information regarding the Fund’s proposed total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the proposed total expense ratio and, separately, the proposed contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other funds deemed comparable to and with a similar expense structure as the Fund (Expense Group) as selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent organization. Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report (excluding the Fund), which reflects historical asset levels that may be quite different from those currently
existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the funds included in the Expense Group.
The Expense Group for the Fund was comprised of institutional funds and actively managed exchange-traded funds, which included the Fund and four general US government funds. The Board noted that the proposed Management Rate was equal to the median of its Expense Group. The Board also noted that the estimated total expense ratio for the Fund was below the median of its Expense Group. The Board concluded that the Management Rate to be charged to the Fund is reasonable. In doing so, the Board noted the Fund’s estimated total expense ratio reflected a fee waiver from management. The Board further noted that the Sub-Adviser to the Fund will be paid by FAI out of the management fee FAI receives from the Fund.
Profitability
The Board then noted that the Managers (and their affiliates) could not report any financial results from their relationships with the Fund because the Fund has not yet commenced investment operations, and thus, the Board could not evaluate the Managers’ (or their affiliates’) profitability with respect to the Fund.
Economies of Scale
The Board reviewed and considered the extent to which each Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale in the future, the Board noted that it is not anticipated that the Fund will generate significant, if any, profit for the Managers and/or their affiliates for some time.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved each Management Agreement for the Fund for an initial two-year period.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Liquidity Risk Management Program – Non-In-Kind ETFs
Franklin Liberty Investment Grade Corporate ETF
Franklin Liberty Ultra Short Bond ETF
Franklin Liberty U.S. Core Bond ETF
Franklin Liberty U.S. Treasury Bond ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Liquidity Risk Management Program – In-Kind ETF
Franklin Liberty U.S. Low Volatility ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line
of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report Franklin Templeton ETF Trust | ||||||
Investment Manager | Distributor | Investor Services | ||||
Franklin Advisers, Inc. | Franklin Templeton Distributors, Inc. (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
© 2020 Franklin Templeton Investments. All rights reserved. | ETF2 S 11/20 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2020
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | |
Franklin LibertyQ U.S. Mid Cap Equity ETF |
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
Visit franklintempleton.com/investor/investments-and-solutions/investment-options/etfs/ for fund updates and documents.
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
franklintempleton.com | Semiannual Report | 1 |
SEMIANNUAL REPORT
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), advanced significantly during the six months under review, as markets began to recover from the disruption created by the novel coronavirus (COVID-19). Before the period began, equity prices declined significantly due to the impact of the virus and related restrictions on travel, gatherings and economic activity. However, a steady equity market recovery amid unprecedented monetary and fiscal support led stocks, as measured by the S&P 500, to reach all-time price highs in early September 2020. Nonetheless, several risks tempered investors’ enthusiasm in the period’s final month, including persistent COVID-19 infection rates, fading hopes for additional stimulus, and uncertainties surrounding the upcoming presidential election.
Shortly before the beginning of the reporting period, the U.S. Federal Reserve (Fed) lowered the federal funds target rate to a range of 0.00%–0.25% and implemented a policy of unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning. Additionally, the Fed announced in August 2020 that future interest rates could potentially remain low, even if inflation persistently exceeded the Fed’s 2% target. During the period, the federal government also passed several rounds of fiscal stimulus, providing aid to businesses, state and local governments and individuals.
The monetary and fiscal stimulus measures helped equities gain substantially for the period’s first five months, even as the economy struggled. The longest U.S. economic expansion in history ended in February (before the beginning of
the period), according to the National Bureau of Economic Research, and the country slipped into a deep recession with second-quarter 2020 gross domestic product (GDP) declining at a record pace. Social distancing requirements weighed on businesses that require in-person contact, particularly brick-and-mortar retailers and travel and leisure companies. As a result, the unemployment rate surged to 14.7% in April as many businesses announced mass layoffs, but conditions began to improve as stimulus measures helped support consumer spending, and unemployment fell to 7.9% by period-end.1 Economic growth resumed in the third quarter at the fastest annualized rate on record as many businesses reopened, but the GDP remained below its pre-pandemic level.
The improving economic conditions buoyed stocks, and many investors were optimistic the economy would continue to improve as restrictions eased and potential COVID-19 vaccines and treatments were developed. Late in the period, however, some signs emerged that the economic recovery was stalling, including persistently high unemployment claims and low consumer confidence, leading stocks to reverse some of their earlier gains.
The foregoing information reflects our analysis and opinions as of September 30, 2020. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
1. Source: Bureau of Labor Statistics.
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Franklin LibertyQ U.S. Equity ETF
This semiannual report for Franklin LibertyQ U.S. Equity ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Large Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000® Index that have favorable exposure to four investment style factors: quality, value, momentum and low volatility.
Performance Overview
For the six months under review, the Fund posted cumulative total returns of +27.43% based on market price and +27.14% based on net asset value (NAV). In comparison, the LibertyQ U.S. Large Cap Equity Index posted a +27.21% total return for the same period, while the Russell 1000® Index posted a +33.36% total return.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Information Technology | 24.1% | |||
Consumer Discretionary | 14.9% | |||
Consumer Staples | 14.9% | |||
Industrials | 13.5% | |||
Health Care | 12.2% | |||
Utilities | 5.8% | |||
Communication Services | 5.4% | |||
Financials | 3.4% | |||
Real Estate | 3.0% | |||
Materials | 2.5% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Large Cap Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. The LibertyQ U.S. Large Cap Equity Index is a systematic, rules-based proprietary index maintained and calculated by FTSE Russell (Russell) based on the Russell 1000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell 1000® Index is market capitalization weighted and measures performance of the largest companies in the Russell 3000® Index, which represents the majority of the U.S. market’s total capitalization.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 19.
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FRANKLIN LIBERTYQ U.S. EQUITY ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
NVIDIA Corp. Information Technology | 1.4% | |||
United Parcel Service Inc., B Industrials | 1.4% | |||
Apple Inc. Information Technology | 1.3% | |||
QUALCOMM Inc. Information Technology | 1.2% | |||
Target Corp. Consumer Discretionary | 1.2% | |||
NIKE Inc., B Consumer Discretionary | 1.2% | |||
Texas Instruments Inc. Information Technology | 1.1% | |||
Adobe Inc. Information Technology | 1.1% | |||
The Procter & Gamble Co. Consumer Staples | 1.1% | |||
McDonald’s Corp. Consumer Discretionary | 1.1% |
Thank you for your participation in Franklin LibertyQ U.S. Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris |
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
CFA® is a trademark owned by CFA Institute.
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FRANKLIN LIBERTYQ U.S. EQUITY ETF
Performance Summary as of September 30, 2020
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 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 (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +27.14% | +27.43% | +27.14% | +27.43% | ||||||||||||
1-Year | +7.59% | +7.70% | +7.59% | +7.70% | ||||||||||||
3-Year | +37.34% | +37.75% | +11.15% | +11.27% | ||||||||||||
Since Inception (4/26/17) | +45.41% | +45.75% | +11.53% | +11.61% |
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 6 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ U.S. EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.411335 |
Total Annual Operating Expenses5
0.15% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. To the extent the Fund concentrates in a specific industry or group of industries, the Fund will carry much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries; there is also the risk that the Fund will perform poorly during a slump in demand for securities of companies in such industries. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN LIBERTYQ U.S. EQUITY 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20-9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20-9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,271.40 | $ | 0.85 | $ | 1,024.32 | $ | 0.76 | 0.15 | % |
1 Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2 Reflects expenses after fee waivers and expense reimbursements.
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Franklin LibertyQ U.S. Mid Cap Equity ETF
This semiannual report for Franklin LibertyQ U.S. Mid Cap Equity ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Mid Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell Midcap® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell Midcap® Index that have favorable exposure to four investment style factors: quality, value, momentum and low volatility.
Performance Overview
For the six months under review, the Fund posted cumulative total returns of +33.71% based on market price and +33.20% based on net asset value (NAV). In comparison, the LibertyQ U.S. Mid Cap Equity Index posted a +33.38% total return for the same period, while the Russell Midcap® Index posted a +33.90% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 10.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Industrials | 21.4% | |||
Consumer Discretionary | 18.6% | |||
Information Technology | 17.0% | |||
Health Care | 11.0% | |||
Financials | 10.4% | |||
Consumer Staples | 9.0% | |||
Real Estate | 5.5% | |||
Utilities | 3.5% | |||
Materials | 2.1% | |||
Communication Services | 1.5% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Mid Cap Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. The LibertyQ U.S. Mid Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell). It is based on the Russell Midcap® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell Midcap® Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000® Index, which represents a modest amount of the Russell 1000® Index’s total market capitalization.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 26.
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FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
Best Buy Co. Inc. Consumer Discretionary | 1.3% | |||
Cintas Corp. Industrials | 1.2% | |||
Align Technology Inc. Health Care | 1.2% | |||
Trane Technologies PLC Industrials | 1.2% | |||
IDEXX Laboratories Inc. Health Care | 1.2% | |||
Church & Dwight Co. Inc. Consumer Staples | 1.1% | |||
Cummins Inc. Industrials | 1.1% | |||
Mettler-Toledo International Inc. Health Care | 1.1% | |||
Synopsys Inc. Information Technology | 1.1% | |||
Tractor Supply Co. Consumer Discretionary | 1.1% |
Thank you for your participation in Franklin LibertyQ U.S. Mid Cap Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris |
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 9 |
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
Performance Summary as of September 30, 2020
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 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 (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +33.20% | +33.71% | +33.20% | +33.71% | ||||||||||||
1-Year | +6.51% | +6.60% | +6.51% | +6.60% | ||||||||||||
3-Year | +33.39% | +33.51% | +10.08% | +10.11% | ||||||||||||
Since Inception (4/26/17) | +35.81% | +36.09% | +9.33% | +9.40% |
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 11 for Performance Summary footnotes.
10 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.183536 |
Total Annual Operating Expenses5
0.30% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Historically, mid-size company securities have been more volatile in price than larger company securities, especially over the short term. Mid-size companies may be more susceptible to particular economic events or competitive factors than are larger, more broadly diversified companies. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 11 |
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Period | Ending Account Value 9/30/20 | Expenses Period | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,332.00 | $ | 1.75 | $ | 1,023.56 | $ | 1.52 | 0.30 | % |
1 Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2 Reflects expenses after fee waivers and expense reimbursements.
12 | Semiannual Report | franklintempleton.com |
Franklin LibertyQ U.S. Small Cap Equity ETF
This semiannual report for Franklin LibertyQ U.S. Small Cap Equity ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Small Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 2000® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 2000® Index that have favorable exposure to four investment style factors: quality, value, momentum and low volatility.
Performance Overview
For the six-month period, the Fund posted cumulative total returns of +27.17% based on market price and +26.57% based on net asset value (NAV). In comparison, the LibertyQ U.S. Small Cap Equity Index posted a +26.86% total return for the same period, while the Russell 2000® Index posted a +31.60% total return.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 15.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Consumer Discretionary | 24.6% | |||
Industrials | 20.2% | |||
Information Technology | 13.3% | |||
Health Care | 10.6% | |||
Financials | 8.1% | |||
Consumer Staples | 6.4% | |||
Utilities | 5.7% | |||
Real Estate | 5.6% | |||
Communication Services | 2.7% | |||
Materials | 2.0% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Small Cap Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. The LibertyQ U.S. Small Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell). It is based on the Russell 2000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell 2000® Index is market capitalization weighted and measures performance of the approximately 2,000 smallest companies in the Russell 3000® Index, which represent a small amount of the total market capitalization of the Russell 3000® Index.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 32.
franklintempleton.com | Semiannual Report | 13 |
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
LHC Group Inc. Health Care | 1.3% | |||
Lithia Motors Inc. Consumer Discretionary | 1.2% | |||
Deckers Outdoor Corp. Consumer Discretionary | 1.2% | |||
Texas Roadhouse Inc., A Consumer Discretionary | 1.0% | |||
Helen of Troy Ltd. Consumer Discretionary | 1.0% | |||
Simpson Manufacturing Co. Inc. Industrials | 0.9% | |||
Exponent Inc. Industrials | 0.9% | |||
Silicon Laboratories Inc. Information Technology | 0.9% | |||
Stamps.com Inc. Consumer Discretionary | 0.9% | |||
SAIA Inc. Industrials | 0.8% |
Thank you for your participation in Franklin LibertyQ U.S. Small Cap Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris |
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
14 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
Performance Summary as of September 30, 2020
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 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 (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +26.57% | +27.17% | +26.57% | +27.17% | ||||||||||||
1-Year | -5.87% | -6.08% | -5.87% | -6.08% | ||||||||||||
3-Year | +4.36% | +7.69% | +1.43% | +2.50% | ||||||||||||
Since Inception (4/26/17) | +6.27% | +6.15% | +1.79% | +1.76% |
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 16 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.202951 |
Total Annual Operating Expenses5
0.35% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Smaller, mid-sized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger company stocks, especially over the short term. Smaller companies may be more susceptible to particular events or economic conditions, less certain growth prospects, lack of depth of management and funds for growth and development and limited or less developed product lines and markets. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
16 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Period | Ending Account Value 9/30/20 | Expenses Period | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,265.70 | $ | 1.99 | $ | 1,023.31 | $ | 1.78 | 0.35 | % |
1 Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2 Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN TEMPLETON ETF TRUST
Franklin LibertyQ U.S. Equity ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 27.61 | $ | 31.41 | $ | 28.51 | $ | 25.44 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.35 | 0.76 | 0.66 | 0.53 | ||||||||||||
Net realized and unrealized gains (losses) | 7.13 | (3.89 | ) | 2.71 | 2.98 | |||||||||||
|
| |||||||||||||||
Total from investment operations | 7.48 | (3.13 | ) | 3.37 | 3.51 | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.41 | ) | (0.67 | ) | (0.47 | ) | (0.44 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 34.68 | $ | 27.61 | $ | 31.41 | $ | 28.51 | ||||||||
|
| |||||||||||||||
Total returnd | 27.14% | (10.27)% | 11.97% | 13.84% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.15% | 0.18% | 0.25% | 0.32% | f | |||||||||||
Expenses net of waiver and payments by affiliates | 0.15% | 0.18% | 0.25% | 0.25% | f | |||||||||||
Net investment income | 2.17% | 2.32% | 2.20% | 2.10% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $1,238,155 | $1,311,583 | $1,008,255 | $108,326 | ||||||||||||
Portfolio turnover rateg | 16.09% | h | 19.44% | h | 18.04% | 20.80% |
aFor the period April 26, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 16.09% | 19.44% | —% | —% |
18 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin LibertyQ U.S. Equity ETF
Shares | Value | |||||||||
Common Stocks 99.8% | ||||||||||
Communication Services 5.4% | ||||||||||
Activision Blizzard Inc. | 41,412 | $ | 3,352,301 | |||||||
a | Alphabet Inc., A | 4,010 | 5,877,056 | |||||||
AT&T Inc. | 368,424 | 10,503,768 | ||||||||
Cable One Inc. | 724 | 1,365,051 | ||||||||
Comcast Corp., A | 286,314 | 13,244,886 | ||||||||
a | Electronic Arts Inc. | 17,136 | 2,234,706 | |||||||
a | Facebook Inc., A | 50,694 | 13,276,759 | |||||||
a | Match Group Inc. | 11,829 | 1,308,879 | |||||||
Omnicom Group Inc. | 51,408 | 2,544,696 | ||||||||
The Interpublic Group of Cos. Inc. | 68,544 | 1,142,629 | ||||||||
Verizon Communications Inc. | 197,778 | 11,765,813 | ||||||||
|
| |||||||||
66,616,544 | ||||||||||
|
| |||||||||
Consumer Discretionary 14.9% | ||||||||||
a | AutoZone Inc. | 4,898 | 5,768,081 | |||||||
Best Buy Co. Inc. | 60,690 | 6,754,190 | ||||||||
a | Booking Holdings Inc. | 4,146 | 7,092,479 | |||||||
Carter’s Inc. | 10,710 | 927,272 | ||||||||
D.R. Horton Inc. | 32,130 | 2,429,992 | ||||||||
Darden Restaurants Inc. | 32,130 | 3,236,776 | ||||||||
Dollar General Corp. | 56,406 | 11,823,826 | ||||||||
Domino’s Pizza Inc. | 10,710 | 4,554,749 | ||||||||
Foot Locker Inc. | 32,130 | 1,061,254 | ||||||||
Garmin Ltd. | 34,272 | 3,251,042 | ||||||||
Gentex Corp. | 66,402 | 1,709,851 | ||||||||
a | Grand Canyon Education Inc. | 2,856 | 228,309 | |||||||
H&R Block Inc. | 54,264 | 883,960 | ||||||||
Hanesbrands Inc. | 45,696 | 719,712 | ||||||||
Las Vegas Sands Corp. | 69,258 | 3,231,578 | ||||||||
a | Lululemon Athletica Inc. | 27,846 | 9,171,637 | |||||||
McDonald’s Corp. | 60,690 | 13,320,848 | ||||||||
NIKE Inc., B | 114,954 | 14,431,325 | ||||||||
b | Nordstrom Inc. | 25,704 | 306,392 | |||||||
a | NVR Inc. | 775 | 3,164,418 | |||||||
a | O’Reilly Automotive Inc. | 18,564 | 8,559,489 | |||||||
Pool Corp. | 9,282 | 3,105,200 | ||||||||
PulteGroup Inc. | 37,128 | 1,718,655 | ||||||||
Ross Stores Inc. | 97,818 | 9,128,376 | ||||||||
Starbucks Corp. | 127,092 | 10,919,745 | ||||||||
Target Corp. | 93,534 | 14,724,122 | ||||||||
The Gap Inc. | 57,120 | 972,754 | ||||||||
The Home Depot Inc. | 45,696 | 12,690,236 | ||||||||
The TJX Cos. Inc. | 208,488 | 11,602,357 | ||||||||
Tractor Supply Co. | 29,988 | 4,298,480 | ||||||||
a | Ulta Beauty Inc. | 14,280 | 3,198,434 | |||||||
Williams-Sonoma Inc. | 21,420 | 1,937,225 | ||||||||
Yum! Brands Inc. | 84,252 | 7,692,208 | ||||||||
|
| |||||||||
184,614,972 | ||||||||||
|
| |||||||||
Consumer Staples 14.9% | ||||||||||
Altria Group Inc. | 277,032 | 10,704,516 | ||||||||
a | Boston Beer Inc., A | 714 | 630,719 | |||||||
Brown-Forman Corp., A | 12,138 | 833,638 | ||||||||
Brown-Forman Corp., B | 18,564 | 1,398,240 | ||||||||
Campbell Soup Co. | 9,996 | 483,507 | ||||||||
Casey’s General Stores Inc. | 7,854 | 1,395,263 | ||||||||
Church & Dwight Co. Inc. | 59,262 | 5,553,442 | ||||||||
Clorox Co. | 35,700 | 7,503,069 |
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Consumer Staples (continued) | ||||||||||
Colgate-Palmolive Co. | 156,366 | $ | 12,063,637 | |||||||
Costco Wholesale Corp. | 37,128 | 13,180,440 | ||||||||
Estee Lauder Companies Inc., A | 54,978 | 11,998,948 | ||||||||
Flowers Foods Inc. | 44,268 | 1,077,040 | ||||||||
General Mills Inc. | 150,654 | 9,292,339 | ||||||||
Hormel Foods Corp. | 71,400 | 3,490,746 | ||||||||
Ingredion Inc. | 14,994 | 1,134,746 | ||||||||
Kellogg Co. | 40,698 | 2,628,684 | ||||||||
Kimberly-Clark Corp. | 64,974 | 9,594,061 | ||||||||
a | Monster Beverage Corp. | 79,968 | 6,413,434 | |||||||
Nu Skin Enterprises Inc., A | 11,424 | 572,228 | ||||||||
PepsiCo Inc. | 86,394 | 11,974,208 | ||||||||
Philip Morris International Inc. | 154,224 | 11,565,258 | ||||||||
a | Sprouts Farmers Market Inc. | 22,134 | 463,265 | |||||||
The Coca-Cola Co. | 242,760 | 11,985,061 | ||||||||
The Hershey Co. | 41,412 | 5,935,996 | ||||||||
The J.M. Smucker Co. | 19,992 | 2,309,476 | ||||||||
The Kroger Co. | 132,090 | 4,479,172 | ||||||||
The Procter & Gamble Co. | 97,818 | 13,595,724 | ||||||||
Tyson Foods Inc. | 66,402 | 3,949,591 | ||||||||
Walgreens Boots Alliance Inc. | 152,796 | 5,488,432 | ||||||||
Walmart Inc. | 91,392 | 12,786,655 | ||||||||
|
| |||||||||
184,481,535 | ||||||||||
|
| |||||||||
Energy 0.1% | ||||||||||
Cabot Oil & Gas Corp., A | 61,404 | 1,065,973 | ||||||||
|
| |||||||||
Financials 3.4% | ||||||||||
American National Group Inc. | 1,428 | 96,433 | ||||||||
Equitable Holdings Inc. | 22,848 | 416,747 | ||||||||
Erie Indemnity Co., A | 1,428 | 300,280 | ||||||||
Evercore Inc. | 2,142 | 140,215 | ||||||||
FactSet Research Systems Inc. | 9,282 | 3,108,356 | ||||||||
Invesco Ltd. | 66,402 | 757,647 | ||||||||
Jefferies Financial Group Inc. | 12,138 | 218,484 | ||||||||
Lazard Ltd., A | 27,132 | 896,713 | ||||||||
MarketAxess Holdings Inc. | 9,282 | 4,470,118 | ||||||||
Moody’s Corp. | 24,276 | 7,036,399 | ||||||||
Morningstar Inc. | 4,284 | 688,053 | ||||||||
MSCI Inc. | 19,278 | 6,878,005 | ||||||||
S&P Global Inc. | 24,990 | 9,011,394 | ||||||||
Santander Consumer USA Holdings Inc. | 22,848 | 415,605 | ||||||||
SEI Investments Co. | 24,990 | 1,267,493 | ||||||||
T. Rowe Price Group Inc. | 23,562 | 3,021,120 | ||||||||
The Progressive Corp. | 32,130 | 3,041,747 | ||||||||
|
| |||||||||
41,764,809 | ||||||||||
|
| |||||||||
Health Care 12.2% | ||||||||||
AbbVie Inc. | 122,094 | 10,694,213 | ||||||||
a | ABIOMED Inc. | 2,142 | 593,462 | |||||||
a | Align Technology Inc. | 4,998 | 1,636,145 | |||||||
Amgen Inc. | 49,266 | 12,521,447 | ||||||||
a | Biogen Inc. | 37,128 | 10,532,471 | |||||||
Bristol-Myers Squibb Co. | 191,352 | 11,536,612 | ||||||||
Cerner Corp. | 63,546 | 4,593,740 | ||||||||
Chemed Corp. | 3,306 | 1,588,037 | ||||||||
Eli Lilly and Co. | 53,550 | 7,926,471 | ||||||||
a | Exelixis Inc. | 62,832 | 1,536,242 |
20 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Health Care (continued) | ||||||||||
Gilead Sciences Inc. | 145,656 | $ | 9,204,003 | |||||||
a | Horizon Therapeutics Plc | 9,996 | 776,489 | |||||||
Humana Inc. | 7,140 | 2,955,175 | ||||||||
Johnson & Johnson | 75,684 | 11,267,834 | ||||||||
Merck & Co. Inc. | 141,372 | 11,726,807 | ||||||||
a | Mettler-Toledo International Inc. | 5,954 | 5,750,075 | |||||||
Pfizer Inc. | 297,024 | 10,900,781 | ||||||||
Premier Inc., A | 7,854 | 257,847 | ||||||||
a | Regeneron Pharmaceuticals Inc. | 9,996 | 5,595,561 | |||||||
ResMed Inc. | 32,844 | 5,630,447 | ||||||||
UnitedHealth Group Inc. | 37,128 | 11,575,397 | ||||||||
a | Veeva Systems Inc. | 7,140 | 2,007,697 | |||||||
a | Vertex Pharmaceuticals Inc. | 15,708 | 4,274,461 | |||||||
a | Waters Corp. | 3,570 | 698,578 | |||||||
West Pharmaceutical Services Inc. | 4,284 | 1,177,672 | ||||||||
Zoetis Inc. | 26,418 | 4,368,745 | ||||||||
|
| |||||||||
151,326,409 | ||||||||||
|
| |||||||||
Industrials 13.5% | ||||||||||
3M Co. | 72,828 | 11,665,589 | ||||||||
A O Smith Corp. | 7,140 | 376,992 | ||||||||
Allegion PLC | 9,282 | 918,083 | ||||||||
Allison Transmission Holdings Inc. | 19,992 | 702,519 | ||||||||
BWX Technologies Inc. | 5,712 | 321,643 | ||||||||
C.H. Robinson Worldwide Inc. | 35,700 | 3,648,183 | ||||||||
Cintas Corp. | 19,278 | 6,416,297 | ||||||||
a | Copart Inc. | 48,552 | 5,105,728 | |||||||
Cummins Inc. | 36,414 | 7,689,180 | ||||||||
Emerson Electric Co. | 140,658 | 9,222,945 | ||||||||
Expeditors International of Washington Inc. | 41,412 | 3,748,614 | ||||||||
Fastenal Co. | 150,654 | 6,792,989 | ||||||||
a | FTI Consulting Inc. | 2,142 | 226,988 | |||||||
a | Generac Holdings Inc. | 3,570 | 691,295 | |||||||
Graco Inc. | 38,556 | 2,365,411 | ||||||||
GrafTech International Ltd. | 8,568 | 58,605 | ||||||||
Honeywell International Inc. | 77,112 | 12,693,406 | ||||||||
Huntington Ingalls Industries Inc. | 9,282 | 1,306,441 | ||||||||
a | IAA Inc. | 13,566 | 706,382 | |||||||
Illinois Tool Works Inc. | 47,838 | 9,242,780 | ||||||||
JB Hunt Transport Services Inc. | 21,420 | 2,707,059 | ||||||||
Landstar System Inc. | 9,282 | 1,164,798 | ||||||||
Lennox International Inc. | 4,998 | 1,362,505 | ||||||||
Lincoln Electric Holdings Inc. | 2,856 | 262,866 | ||||||||
Lockheed Martin Corp. | 29,274 | 11,220,139 | ||||||||
Masco Corp. | 27,846 | 1,535,150 | ||||||||
MSC Industrial Direct Co. Inc., A | 9,996 | 632,547 | ||||||||
Northrop Grumman Corp. | 15,708 | 4,955,717 | ||||||||
Old Dominion Freight Line Inc. | 10,710 | 1,937,653 | ||||||||
Otis Worldwide Corp. | 22,134 | 1,381,604 | ||||||||
PACCAR Inc. | 47,124 | 4,018,735 | ||||||||
Robert Half International Inc. | 32,844 | 1,738,761 | ||||||||
Rockwell Automation Inc. | 28,560 | 6,302,621 | ||||||||
Rollins Inc. | 37,128 | 2,011,966 | ||||||||
Schneider National Inc., B | 3,570 | 88,286 | ||||||||
Snap-on Inc. | 9,282 | 1,365,661 | ||||||||
Toro Co. | 27,846 | 2,337,672 | ||||||||
a | Trex Co. Inc. | 7,140 | 511,224 | |||||||
Union Pacific Corp. | 67,116 | 13,213,127 |
franklintempleton.com | Semiannual Report | 21 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Industrials (continued) | ||||||||||
United Parcel Service Inc., B | 104,244 | $ | 17,370,178 | |||||||
Verisk Analytics Inc. | 8,568 | 1,587,736 | ||||||||
W.W. Grainger Inc. | 11,424 | 4,075,740 | ||||||||
Watsco Inc. | 7,140 | 1,662,835 | ||||||||
|
| |||||||||
167,344,650 | ||||||||||
|
| |||||||||
Information Technology 24.1% | ||||||||||
Accenture PLC, A | 56,406 | 12,747,192 | ||||||||
a | Adobe Inc. | 27,846 | 13,656,514 | |||||||
a | Akamai Technologies Inc. | 8,568 | 947,107 | |||||||
a | Alphabet Inc., C | 3,954 | 5,810,798 | |||||||
Amdocs Ltd. | 33,558 | 1,926,565 | ||||||||
Apple Inc. | 142,800 | 16,537,668 | ||||||||
Applied Materials Inc. | 202,776 | 12,055,033 | ||||||||
a | Arista Networks Inc. | 3,570 | 738,740 | |||||||
a | Aspen Technology Inc. | 12,138 | 1,536,549 | |||||||
Automatic Data Processing Inc. | 74,970 | 10,457,565 | ||||||||
Booz Allen Hamilton Holding Corp. | 19,992 | 1,658,936 | ||||||||
Broadridge Financial Solutions Inc. | 28,560 | 3,769,920 | ||||||||
a | Cadence Design Systems Inc. | 42,840 | 4,568,029 | |||||||
a | Ciena Corp. | 8,568 | 340,064 | |||||||
a | Cirrus Logic Inc. | 2,856 | 192,637 | |||||||
Cisco Systems Inc. | 237,762 | 9,365,445 | ||||||||
Citrix Systems Inc. | 19,992 | 2,753,098 | ||||||||
Cognizant Technology Solutions Corp., A | 99,960 | 6,939,223 | ||||||||
a | Enphase Energy Inc. | 5,712 | 471,754 | |||||||
a | F5 Networks Inc. | 15,708 | 1,928,471 | |||||||
a | Fair Isaac Corp. | 1,428 | 607,443 | |||||||
a | Fortinet Inc. | 7,854 | 925,280 | |||||||
HP Inc. | 393,414 | 7,470,932 | ||||||||
Intel Corp. | 179,928 | 9,316,672 | ||||||||
International Business Machines Corp. | 91,392 | 11,119,665 | ||||||||
Intuit Inc. | 39,270 | 12,810,267 | ||||||||
Jack Henry & Associates Inc. | 19,278 | 3,134,410 | ||||||||
KLA Corp. | 36,414 | 7,054,848 | ||||||||
Lam Research Corp. | 33,558 | 11,132,866 | ||||||||
Mastercard Inc., A | 37,842 | 12,797,029 | ||||||||
Maxim Integrated Products Inc. | 65,688 | 4,441,166 | ||||||||
Microsoft Corp. | 62,118 | 13,065,279 | ||||||||
Monolithic Power Systems | 2,142 | 598,925 | ||||||||
Motorola Solutions Inc. | 36,414 | 5,710,079 | ||||||||
NetApp Inc. | 54,264 | 2,378,934 | ||||||||
NVIDIA Corp. | 32,130 | 17,389,398 | ||||||||
Oracle Corp. | 108,528 | 6,479,122 | ||||||||
Paychex Inc. | 84,966 | 6,777,738 | ||||||||
QUALCOMM Inc. | 131,376 | 15,460,328 | ||||||||
Skyworks Solutions Inc. | 47,124 | 6,856,542 | ||||||||
a | SolarEdge Technologies Inc. | 2,856 | 680,728 | |||||||
Texas Instruments Inc. | 95,676 | 13,661,576 | ||||||||
a | Tyler Technologies Inc. | 2,142 | 746,615 | |||||||
Ubiquiti Inc. | 2,142 | 356,986 | ||||||||
Visa Inc., A | 57,834 | 11,565,065 | ||||||||
a,b | VMware Inc., A | 4,284 | 615,482 | |||||||
Xerox Holdings Corp. | 9,282 | 174,223 | ||||||||
Xilinx Inc. | 60,690 | 6,326,326 | ||||||||
|
| |||||||||
298,055,232 | ||||||||||
|
|
22 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Materials 2.5% | ||||||||||
Air Products and Chemicals Inc. | 32,130 | $ | 9,570,242 | |||||||
Avery Dennison Corp. | 4,284 | 547,667 | ||||||||
Celanese Corp. | 16,422 | 1,764,544 | ||||||||
Eastman Chemical Co. | 24,276 | 1,896,441 | ||||||||
Huntsman Corp. | 10,710 | 237,869 | ||||||||
LyondellBasell Industries NV, A | 81,396 | 5,737,604 | ||||||||
NewMarket Corp. | 2,142 | 733,250 | ||||||||
Newmont Corp. | 44,982 | 2,854,108 | ||||||||
Nucor Corp. | 40,698 | 1,825,712 | ||||||||
Packaging Corp. of America | 19,278 | 2,102,266 | ||||||||
Reliance Steel & Aluminum Co. | 6,426 | 655,709 | ||||||||
Royal Gold Inc. | 6,426 | 772,212 | ||||||||
Sonoco Products Co. | 23,562 | 1,203,311 | ||||||||
Steel Dynamics Inc. | 34,986 | 1,001,649 | ||||||||
Valvoline Inc. | 22,848 | 435,026 | ||||||||
|
| |||||||||
31,337,610 | ||||||||||
|
| |||||||||
Real Estate 3.0% | ||||||||||
American Tower Corp. | 44,268 | 10,700,904 | ||||||||
Coresite Realty Corp. | 2,142 | 254,641 | ||||||||
EPR Properties | 17,850 | 490,875 | ||||||||
Gaming and Leisure Properties Inc. | 43,317 | 1,599,697 | ||||||||
Kimco Realty Corp. | 84,966 | 956,717 | ||||||||
National Retail Properties Inc. | 41,412 | 1,429,128 | ||||||||
Public Storage | 42,126 | 9,382,303 | ||||||||
Realty Income Corp. | 74,970 | 4,554,427 | ||||||||
Simon Property Group Inc. | 60,690 | 3,925,429 | ||||||||
Spirit Realty Capital Inc. | 24,276 | 819,315 | ||||||||
STORE Capital Corp. | 47,124 | 1,292,611 | ||||||||
WP Carey Inc. | 32,844 | 2,140,115 | ||||||||
|
| |||||||||
37,546,162 | ||||||||||
|
| |||||||||
Utilities 5.8% | ||||||||||
Alliant Energy Corp. | 51,408 | 2,655,223 | ||||||||
Ameren Corp. | 39,984 | 3,161,935 | ||||||||
American Electric Power Co. Inc. | 47,124 | 3,851,444 | ||||||||
Atmos Energy Corp. | 24,990 | 2,388,794 | ||||||||
Consolidated Edison Inc. | 70,686 | 5,499,371 | ||||||||
Dominion Energy Inc. | 113,526 | 8,960,607 | ||||||||
Evergy Inc. | 37,128 | 1,886,845 | ||||||||
Eversource Energy | 64,974 | 5,428,578 | ||||||||
Hawaiian Electric Industries Inc. | 24,276 | 806,934 | ||||||||
NextEra Energy Inc. | 44,268 | 12,287,026 | ||||||||
PPL Corp. | 124,236 | 3,380,462 | ||||||||
Public Service Enterprise Group Inc. | 121,380 | 6,664,976 | ||||||||
The Southern Co. | 172,788 | 9,368,565 | ||||||||
WEC Energy Group Inc. | 16,422 | 1,591,292 | ||||||||
Xcel Energy Inc. | 51,408 | 3,547,666 | ||||||||
|
| |||||||||
71,479,718 | ||||||||||
|
| |||||||||
Total Investments before Short Term Investments | 1,235,633,614 | |||||||||
|
|
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Equity ETF (continued)
Shares | Value | |||||||||
Short Term Investments (Cost $711,145) 0.1% | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.1% | ||||||||||
Money Market Funds 0.1% | ||||||||||
c,d | Institutional Fiduciary Trust Portfolio, 0.00% | 711,145 | $ | 711,145 | ||||||
|
| |||||||||
Total Investments (Cost $1,128,215,370) 99.9% | 1,236,344,759 | |||||||||
Other Assets, less Liabilities 0.1% | 1,810,098 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 1,238,154,857 | ||||||||
|
|
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2020. See Note (1c).
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(b).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Index Contracts | ||||||||||||||||||||
S&P 500 E-Mini | Long | 14 | $ | 2,346,400 | 12/18/20 | $ | 11,421 |
*As of period end.
See note 7 regarding other derivative information.
24 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ U.S. Mid Cap Equity ETF
Six Months Ended September 30, 2020 | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 24.94 | $ | 30.32 | $ | 27.70 | $ | 25.51 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.22 | 0.50 | 0.47 | 0.38 | ||||||||||||
Net realized and unrealized gains (losses) | 8.05 | (5.41 | ) | 2.53 | 2.18 | |||||||||||
|
| |||||||||||||||
Total from investment operations | 8.27 | (4.91 | ) | 3.00 | 2.56 | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.18 | ) | (0.47 | ) | (0.38 | ) | (0.37 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 33.03 | $ | 24.94 | $ | 30.32 | $ | 27.70 | ||||||||
|
| |||||||||||||||
Total returnd | 33.20% | (16.50)% | 10.92% | 10.09% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.99% | f | |||||||||||
Expenses net of waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.30% | f | |||||||||||
Net investment income | 1.45% | 1.60% | 1.65% | 1.58% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $24,776 | $13,718 | $10,612 | $2,770 | ||||||||||||
Portfolio turnover rateg | 16.42% | h | 24.20% | h | 23.49% | 36.21% |
aFor the period April 26, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 16.42% | 24.20% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 25 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin LibertyQ U.S. Mid Cap Equity ETF
Shares | Value | |||||||||
Common Stocks 99.9% | ||||||||||
Communication Services 1.5% | ||||||||||
CenturyLink Inc. | 7,110 | $ | 71,740 | |||||||
John Wiley & Sons Inc., A | 630 | 19,977 | ||||||||
a | Match Group Inc. | 975 | 107,884 | |||||||
Omnicom Group Inc. | 3,105 | 153,697 | ||||||||
Telephone and Data Systems Inc. | 615 | 11,341 | ||||||||
World Wrestling Entertainment Inc. | 285 | 11,534 | ||||||||
|
| |||||||||
376,173 | ||||||||||
|
| |||||||||
Consumer Discretionary 18.6% | ||||||||||
a | AutoZone Inc. | 200 | 235,528 | |||||||
Best Buy Co. Inc. | 2,910 | 323,854 | ||||||||
BorgWarner Inc. | 2,940 | 113,896 | ||||||||
a | Burlington Stores Inc. | 1,005 | 207,120 | |||||||
a | Capri Holdings Ltd. | 2,100 | 37,800 | |||||||
Carter’s Inc. | 690 | 59,740 | ||||||||
Columbia Sportswear Co. | 255 | 22,180 | ||||||||
Dick’s Sporting Goods Inc. | 1,020 | 59,038 | ||||||||
Domino’s Pizza Inc. | 270 | 114,826 | ||||||||
Foot Locker Inc. | 1,785 | 58,959 | ||||||||
Garmin Ltd. | 1,950 | 184,977 | ||||||||
Gentex Corp. | 2,880 | 74,160 | ||||||||
Genuine Parts Co. | 2,025 | 192,719 | ||||||||
H&R Block Inc. | 3,045 | 49,603 | ||||||||
Hanesbrands Inc. | 5,430 | 85,522 | ||||||||
Hasbro Inc. | 1,680 | 138,970 | ||||||||
Kohl’s Corp. | 2,520 | 46,696 | ||||||||
L Brands Inc. | 3,600 | 114,516 | ||||||||
a | Lululemon Athletica Inc. | 750 | 247,027 | |||||||
b | Nordstrom Inc. | 2,115 | 25,211 | |||||||
a | NVR Inc. | 45 | 183,740 | |||||||
a | O’Reilly Automotive Inc. | 540 | 248,983 | |||||||
a | Ollie’s Bargain Outlet Holdings Inc. | 585 | 51,100 | |||||||
Penske Automotive Group Inc. | 510 | 24,307 | ||||||||
Pool Corp. | 780 | 260,941 | ||||||||
Ralph Lauren Corp. | 690 | 46,899 | ||||||||
a | Skechers USA Inc., A | 1,815 | 54,849 | |||||||
Tapestry Inc. | 4,590 | 71,742 | ||||||||
a | Tempur Sealy International Inc. | 615 | 54,852 | |||||||
The Gap Inc. | 3,630 | 61,819 | ||||||||
Tiffany & Co. | 1,770 | 205,054 | ||||||||
Tractor Supply Co. | 1,860 | 266,612 | ||||||||
a | Ulta Beauty Inc. | 825 | 184,783 | |||||||
Whirlpool Corp. | 600 | 110,334 | ||||||||
Williams-Sonoma Inc. | 1,365 | 123,451 | ||||||||
Yum China Holdings Inc. | 4,905 | 259,720 | ||||||||
|
| |||||||||
4,601,528 | ||||||||||
|
| |||||||||
Consumer Staples 9.0% | ||||||||||
a | Boston Beer Inc., A | 60 | 53,002 | |||||||
Brown-Forman Corp., A | 690 | 47,389 | ||||||||
Brown-Forman Corp., B | 2,820 | 212,403 | ||||||||
Campbell Soup Co. | 2,400 | 116,088 | ||||||||
Church & Dwight Co. Inc. | 3,030 | 283,941 | ||||||||
Clorox Co. | 1,095 | 230,136 | ||||||||
Flowers Foods Inc. | 3,675 | 89,413 | ||||||||
a | Herbalife Ltd. | 1,545 | 72,074 | |||||||
Kellogg Co. | 3,480 | 224,773 | ||||||||
McCormick & Co. Inc. | 1,290 | 250,389 |
26 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Consumer Staples (continued) | ||||||||||
Nu Skin Enterprises Inc., A | 855 | $ | 42,827 | |||||||
a | Sprouts Farmers Market Inc. | 2,010 | 42,069 | |||||||
The Hershey Co. | 1,680 | 240,811 | ||||||||
The J.M. Smucker Co. | 825 | 95,304 | ||||||||
The Kroger Co. | 6,945 | 235,505 | ||||||||
|
| |||||||||
2,236,124 | ||||||||||
|
| |||||||||
Financials 10.4% | ||||||||||
Affiliated Managers Group Inc. | 315 | 21,540 | ||||||||
Ally Financial Inc. | 4,905 | 122,968 | ||||||||
American National Group Inc. | 120 | 8,104 | ||||||||
Apollo Global Management Inc., A | 1,275 | 57,056 | ||||||||
Brown & Brown Inc. | 3,360 | 152,107 | ||||||||
Cincinnati Financial Corp. | 2,430 | 189,467 | ||||||||
Citizens Financial Group Inc. | 2,640 | 66,739 | ||||||||
CNA Financial Corp. | 405 | 12,146 | ||||||||
a,b | Credit Acceptance Corp. | 170 | 57,569 | |||||||
Discover Financial Services | 3,510 | 202,808 | ||||||||
Erie Indemnity Co., A | 180 | 37,850 | ||||||||
Evercore Inc. | 510 | 33,385 | ||||||||
FactSet Research Systems Inc. | 540 | 180,835 | ||||||||
First American Financial Corp. | 1,470 | 74,838 | ||||||||
Globe Life Inc. | 1,410 | 112,659 | ||||||||
Invesco Ltd. | 2,490 | 28,411 | ||||||||
Lazard Ltd., A | 1,395 | 46,105 | ||||||||
MarketAxess Holdings Inc. | 450 | 216,715 | ||||||||
Mercury General Corp. | 375 | 15,514 | ||||||||
MSCI Inc. | 690 | 246,178 | ||||||||
Nasdaq Inc. | 1,815 | 222,719 | ||||||||
PacWest Bancorp | 1,140 | 19,471 | ||||||||
Prosperity Bancshares Inc. | 1,110 | 57,531 | ||||||||
Santander Consumer USA Holdings Inc. | 1,470 | 26,739 | ||||||||
SEI Investments Co. | 2,250 | 114,120 | ||||||||
Synchrony Financial | 7,470 | 195,490 | ||||||||
Unum Group | 2,955 | 49,733 | ||||||||
|
| |||||||||
2,568,797 | ||||||||||
|
| |||||||||
Health Care 11.0% | ||||||||||
a | ABIOMED Inc. | 300 | 83,118 | |||||||
a | Acadia Healthcare Co. Inc. | 1,260 | 37,145 | |||||||
a | Align Technology Inc. | 930 | 304,445 | |||||||
a | Amedisys Inc. | 225 | 53,197 | |||||||
a | Bio-Rad Laboratories Inc., A | 125 | 64,433 | |||||||
Bio-Techne Corp. | 240 | 59,455 | ||||||||
Cerner Corp. | 3,120 | 225,545 | ||||||||
a | Change Healthcare Inc. | 1,455 | 21,112 | |||||||
Chemed Corp. | 150 | 72,052 | ||||||||
Encompass Health Corp. | 1,575 | 102,343 | ||||||||
a | Exelixis Inc. | 3,375 | 82,519 | |||||||
a | Globus Medical Inc., A | 510 | 25,255 | |||||||
a | Henry Schein Inc. | 1,950 | 114,621 | |||||||
a | IDEXX Laboratories Inc. | 735 | 288,936 | |||||||
a | Ionis Pharmaceuticals Inc. | 825 | 39,146 | |||||||
a | Masimo Corp. | 675 | 159,340 | |||||||
a | Mettler-Toledo International Inc. | 285 | 275,239 | |||||||
a | Molina Healthcare Inc. | 780 | 142,771 | |||||||
a | Neurocrine Biosciences Inc. | 555 | 53,369 | |||||||
Premier Inc., A | 585 | 19,206 |
franklintempleton.com | Semiannual Report | 27 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Health Care (continued) | ||||||||||
a | United Therapeutics Corp. | 285 | $ | 28,785 | ||||||
Universal Health Services Inc., B | 1,200 | 128,424 | ||||||||
a | Waters Corp. | 1,125 | 220,140 | |||||||
West Pharmaceutical Services Inc. | 465 | 127,828 | ||||||||
|
| |||||||||
2,728,424 | ||||||||||
|
| |||||||||
Industrials 21.4% | ||||||||||
Allegion PLC | 1,410 | 139,463 | ||||||||
Allison Transmission Holdings Inc. | 1,650 | 57,981 | ||||||||
BWX Technologies Inc. | 1,335 | 75,174 | ||||||||
C.H. Robinson Worldwide Inc. | 2,070 | 211,533 | ||||||||
Carrier Global Corp. | 5,925 | 180,950 | ||||||||
Cintas Corp. | 915 | 304,540 | ||||||||
Copa Holdings SA | 420 | 21,143 | ||||||||
a | Copart Inc. | 1,875 | 197,175 | |||||||
Cummins Inc. | 1,335 | 281,899 | ||||||||
Curtiss-Wright Corp. | 255 | 23,781 | ||||||||
Donaldson Co. Inc. | 1,860 | 86,341 | ||||||||
Dover Corp. | 1,005 | 108,882 | ||||||||
Expeditors International of Washington Inc. | 2,550 | 230,826 | ||||||||
Fastenal Co. | 5,520 | 248,897 | ||||||||
Graco Inc. | 2,775 | 170,246 | ||||||||
GrafTech International Ltd. | 975 | 6,669 | ||||||||
Hubbell Inc., B | 690 | 94,420 | ||||||||
Landstar System Inc. | 525 | 65,882 | ||||||||
Lennox International Inc. | 465 | 126,764 | ||||||||
Lincoln Electric Holdings Inc. | 720 | 66,269 | ||||||||
ManpowerGroup Inc. | 870 | 63,797 | ||||||||
MSA Safety Inc. | 255 | 34,213 | ||||||||
MSC Industrial Direct Co. Inc., A | 705 | 44,612 | ||||||||
Nordson Corp. | 765 | 146,742 | ||||||||
Old Dominion Freight Line Inc. | 1,320 | 238,814 | ||||||||
Otis Worldwide Corp. | 2,730 | 170,407 | ||||||||
Robert Half International Inc. | 2,085 | 110,380 | ||||||||
Rockwell Automation Inc. | 1,050 | 231,714 | ||||||||
Rollins Inc. | 2,595 | 140,623 | ||||||||
Schneider National Inc., B | 855 | 21,144 | ||||||||
Snap-on Inc. | 675 | 99,313 | ||||||||
Southwest Airlines Co. | 3,690 | 138,375 | ||||||||
a | Teledyne Technologies Inc. | 390 | 120,982 | |||||||
Toro Co. | 1,590 | 133,481 | ||||||||
Trane Technologies PLC | 2,505 | 303,731 | ||||||||
W.W. Grainger Inc. | 720 | 256,874 | ||||||||
Watsco Inc. | 570 | 132,747 | ||||||||
Xylem Inc. | 2,535 | 213,244 | ||||||||
|
| |||||||||
5,300,028 | ||||||||||
|
| |||||||||
Information Technology 17.0% | ||||||||||
Amdocs Ltd. | 1,245 | 71,475 | ||||||||
a | Arista Networks Inc. | 420 | 86,911 | |||||||
a | Aspen Technology Inc. | 1,080 | 136,717 | |||||||
Booz Allen Hamilton Holding Corp. | 2,580 | 214,088 | ||||||||
Broadridge Financial Solutions Inc. | 750 | 99,000 | ||||||||
a | CACI International Inc., A | 240 | 51,158 | |||||||
a | Cadence Design Systems Inc. | 2,490 | 265,509 | |||||||
CDW Corp. | 2,040 | 243,841 | ||||||||
a | Ciena Corp. | 1,125 | 44,651 | |||||||
Citrix Systems Inc. | 1,530 | 210,696 |
28 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Information Technology (continued) | ||||||||||
a | Enphase Energy Inc. | 645 | $ | 53,271 | ||||||
a | F5 Networks Inc. | 1,065 | 130,750 | |||||||
a | Fair Isaac Corp. | 420 | 178,660 | |||||||
a | Fortinet Inc. | 870 | 102,495 | |||||||
a | GrubHub Inc. | 600 | 43,398 | |||||||
HP Inc. | 8,805 | 167,207 | ||||||||
Juniper Networks Inc. | 4,230 | 90,945 | ||||||||
KLA Corp. | 1,290 | 249,925 | ||||||||
a | Manhattan Associates Inc. | 1,050 | 100,264 | |||||||
Monolithic Power Systems | 300 | 83,883 | ||||||||
National Instruments Corp. | 2,130 | 76,041 | ||||||||
NetApp Inc. | 3,930 | 172,291 | ||||||||
Paychex Inc. | 3,135 | 250,079 | ||||||||
a | Paycom Software Inc. | 315 | 98,060 | |||||||
a | Synopsys Inc. | 1,260 | 269,615 | |||||||
a | Tyler Technologies Inc. | 270 | 94,111 | |||||||
Ubiquiti Inc. | 135 | 22,499 | ||||||||
a | VeriSign Inc. | 1,035 | 212,020 | |||||||
Western Union Co. | 6,120 | 131,152 | ||||||||
Xilinx Inc. | 2,475 | 257,994 | ||||||||
|
| |||||||||
4,208,706 | ||||||||||
|
| |||||||||
Materials 2.1% | ||||||||||
Avery Dennison Corp. | 1,260 | 161,079 | ||||||||
NewMarket Corp. | 60 | 20,539 | ||||||||
Reliance Steel & Aluminum Co. | 585 | 59,693 | ||||||||
RPM International Inc. | 1,830 | 151,597 | ||||||||
Sonoco Products Co. | 1,095 | 55,922 | ||||||||
The Scotts Miracle-Gro Co., A | 405 | 61,929 | ||||||||
|
| |||||||||
510,759 | ||||||||||
|
| |||||||||
Real Estate 5.5% | ||||||||||
Apple Hospitality REIT Inc. | 3,405 | 32,722 | ||||||||
AvalonBay Communities Inc. | 885 | 132,166 | ||||||||
Brixmor Property Group Inc. | 1,905 | 22,269 | ||||||||
Camden Property Trust | 1,125 | 100,102 | ||||||||
Coresite Realty Corp. | 570 | 67,762 | ||||||||
CubeSmart | 1,200 | 38,772 | ||||||||
Duke Realty Corp. | 2,235 | 82,472 | ||||||||
EPR Properties | 1,065 | 29,288 | ||||||||
First Industrial Realty Trust Inc. | 780 | 31,044 | ||||||||
Highwoods Properties Inc. | 1,380 | 46,327 | ||||||||
Host Hotels & Resorts Inc. | 10,965 | 118,312 | ||||||||
Lamar Advertising Co., A | 1,260 | 83,374 | ||||||||
National Retail Properties Inc. | 2,715 | 93,695 | ||||||||
Realty Income Corp. | 4,110 | 249,682 | ||||||||
STORE Capital Corp. | 1,380 | 37,853 | ||||||||
Ventas Inc. | 4,905 | 205,814 | ||||||||
|
| |||||||||
1,371,654 | ||||||||||
|
| |||||||||
Utilities 3.4% | ||||||||||
Ameren Corp. | 3,045 | 240,798 | ||||||||
American Water Works Co. Inc. | 1,095 | 158,644 | ||||||||
Consolidated Edison Inc. | 3,030 | 235,734 | ||||||||
PPL Corp. | 8,115 | 220,809 | ||||||||
|
| |||||||||
855,985 | ||||||||||
|
| |||||||||
Total Investments before Short Term Investments | 24,758,178 | |||||||||
|
|
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
Shares | Value | |||||||||
Short Term Investments (Cost $53,386) 0.2% | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.2% | ||||||||||
Money Market Funds 0.2% | ||||||||||
c,d | Institutional Fiduciary Trust Portfolio, 0.00% | 53,386 | $ | 53,386 | ||||||
|
| |||||||||
Total Investments (Cost $22,608,737) 100.1% | 24,811,564 | |||||||||
Other Assets, less Liabilities (0.1)% | (35,597 | ) | ||||||||
|
| |||||||||
Net Assets 100.0% | $ | 24,775,967 | ||||||||
|
|
See Abbreviations on page 53.
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2020. See Note 1(c).
cSee Note 3(c) regarding investments in affiliated management investment companies.
dThe rate shown is the annualized seven-day effective yield at period end.
30 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ U.S. Small Cap Equity ETF
Six Months Ended September 30, 2020 | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 20.48 | $ | 27.66 | $ | 26.66 | $ | 25.36 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.14 | 0.39 | 0.47 | 0.33 | ||||||||||||
Net realized and unrealized gains (losses) | 5.30 | (7.15 | ) | 0.87 | 1.27 | |||||||||||
|
| |||||||||||||||
Total from investment operations | 5.44 | (6.76 | ) | 1.34 | 1.60 | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.20 | ) | (0.42 | ) | (0.34 | ) | (0.30 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 25.72 | $ | 20.48 | $ | 27.66 | $ | 26.66 | ||||||||
|
| |||||||||||||||
Total returnd | 26.57% | (24.83)% | 5.05% | 6.34% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.35% | 0.35% | 0.35% | 1.15% | f | |||||||||||
Expenses net of waiver and payments by affiliates | 0.35% | 0.35% | 0.35% | 0.35% | f | |||||||||||
Net investment income | 1.16% | 1.41% | 1.69% | 1.40% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $11,576 | $13,310 | $17,979 | $2,666 | ||||||||||||
Portfolio turnover rateg | 24.03% | h | 23.83% | h | 22.17% | 23.99% |
aFor the period April 26, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 24.03% | 23.83% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 31 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin LibertyQ U.S. Small Cap Equity ETF
Shares | Value | |||||||||
Common Stocks 99.9% | ||||||||||
Communication Services 2.7% | ||||||||||
Alaska Communications Systems Group Inc. | 639 | $ | 1,278 | |||||||
a,b | AMC Networks Inc., A | 450 | 11,119 | |||||||
a | CarGurus Inc. | 1,062 | 22,971 | |||||||
b | Cinemark Holdings Inc. | 1,431 | 14,310 | |||||||
Cogent Communications Holdings Inc. | 1,053 | 63,233 | ||||||||
a | Consolidated Communications Holdings Inc. | 855 | 4,865 | |||||||
a | Glu Mobile Inc. | 1,557 | 11,950 | |||||||
a | Liberty Latin America Ltd. | 2,547 | 20,733 | |||||||
a | Liberty Latin America Ltd., A | 1,017 | 8,390 | |||||||
Meredith Corp. | 981 | 12,871 | ||||||||
Scholastic Corp. | 756 | 15,868 | ||||||||
Spok Holdings Inc. | 405 | 3,852 | ||||||||
a | TechTarget Inc. | 414 | 18,199 | |||||||
TEGNA Inc. | 3,933 | 46,213 | ||||||||
Tribune Publishing Co. | 252 | 2,938 | ||||||||
a | TrueCar Inc. | 2,547 | 12,735 | |||||||
a | WideOpenWest Inc. | 1,008 | 5,232 | |||||||
a | Yelp Inc. | 1,845 | 37,066 | |||||||
|
| |||||||||
313,823 | ||||||||||
|
| |||||||||
Consumer Discretionary 24.6% | ||||||||||
a | 1-800-FLOWERS.Com Inc. | 720 | 17,957 | |||||||
Abercrombie & Fitch Co., A | 1,908 | 26,578 | ||||||||
Acushnet Holdings Corp. | 954 | 32,064 | ||||||||
a | America’s Car-Mart Inc. | 162 | 13,751 | |||||||
American Eagle Outfitters Inc. | 4,167 | 61,713 | ||||||||
a | American Public Education Inc. | 351 | 9,895 | |||||||
a | Asbury Automotive Group Inc. | 567 | 55,254 | |||||||
Big Lots Inc. | 1,296 | 57,802 | ||||||||
Bloomin’ Brands Inc. | 2,763 | 42,191 | ||||||||
Buckle Inc. | 882 | 17,984 | ||||||||
Caleres Inc. | 1,080 | 10,325 | ||||||||
a | Chuy’s Holdings Inc. | 441 | 8,635 | |||||||
Citi Trends Inc. | 333 | 8,318 | ||||||||
Collectors Universe Inc. | 234 | 11,581 | ||||||||
Core-Mark Holding Co. Inc. | 954 | 27,599 | ||||||||
Cracker Barrel Old Country Store Inc. | 702 | 80,491 | ||||||||
a | Crocs Inc. | 1,710 | 73,068 | |||||||
b | Dave & Buster’s Entertainment Inc. | 1,206 | 18,283 | |||||||
a | Deckers Outdoor Corp. | 612 | 134,646 | |||||||
a | Del Taco Restaurants Inc. | 612 | 5,018 | |||||||
Designer Brands Inc., A | 1,818 | 9,872 | ||||||||
Dillard’s Inc., A | 234 | 8,546 | ||||||||
a | Dorman Products Inc. | 648 | 58,566 | |||||||
a,b | Duluth Holdings Inc. | 261 | 3,189 | |||||||
a | Envela Corp. | 90 | 386 | |||||||
Escalade Inc. | 252 | 4,609 | ||||||||
Ethan Allen Interiors Inc. | 774 | 10,480 | ||||||||
a | Fiesta Restaurant Group Inc. | 558 | 5,229 | |||||||
a,b | GameStop Corp., A | 675 | 6,885 | |||||||
a | Genesco Inc. | 423 | 9,111 | |||||||
Group 1 Automotive Inc. | 477 | 42,162 | ||||||||
Guess? Inc. | 1,251 | 14,537 | ||||||||
Hamilton Beach Brands Holding Co., A | 180 | 3,501 | ||||||||
Haverty Furniture Cos. Inc. | 585 | 12,250 | ||||||||
a | Helen of Troy Ltd. | 612 | 118,434 | |||||||
a | Hibbett Sports Inc. | 405 | 15,884 |
32 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Consumer Discretionary (continued) | ||||||||||
Hooker Furniture Corp. | 252 | $ | 6,509 | |||||||
a | Installed Building Products Inc. | 369 | 37,546 | |||||||
a,b | iRobot Corp. | 639 | 48,500 | |||||||
Jack in the Box Inc. | 576 | 45,683 | ||||||||
Johnson Outdoors Inc., A | 126 | 10,318 | ||||||||
a | K12 Inc. | 900 | 23,706 | |||||||
a | Kontoor Brands Inc. | 1,206 | 29,185 | |||||||
La-Z-Boy Inc. | 1,152 | 36,438 | ||||||||
a | Lakeland Industries Inc. | 90 | 1,782 | |||||||
LCI Industries | 558 | 59,310 | ||||||||
a | LGI Homes Inc. | 459 | 53,322 | |||||||
Lifetime Brands Inc. | 315 | 2,977 | ||||||||
Lithia Motors Inc. | 612 | 139,499 | ||||||||
b | Macy’s Inc. | 3,690 | 21,033 | |||||||
a | Malibu Boats Inc., A | 234 | 11,597 | |||||||
Marine Products Corp. | 189 | 2,956 | ||||||||
Monro Inc. | 792 | 32,131 | ||||||||
Movado Group Inc. | 486 | 4,831 | ||||||||
a | Murphy USA Inc. | 504 | 64,648 | |||||||
a | National Vision Holdings Inc. | 918 | 35,104 | |||||||
a | OneWater Marine Inc., A | 54 | 1,106 | |||||||
Oxford Industries Inc. | 513 | 20,705 | ||||||||
Papa John’s International Inc. | 639 | 52,577 | ||||||||
a | Perdoceo Education Corp. | 1,827 | 22,363 | |||||||
b | PetMed Express Inc. | 567 | 17,929 | |||||||
Rent-A-Center Inc. | 1,494 | 44,656 | ||||||||
Rocky Brands Inc. | 162 | 4,022 | ||||||||
Ruth’s Hospitality Group Inc. | 666 | 7,366 | ||||||||
a | Sally Beauty Holdings Inc. | 3,141 | 27,295 | |||||||
Shoe Carnival Inc. | 270 | 9,067 | ||||||||
Shutterstock Inc. | 486 | 25,291 | ||||||||
Signet Jewelers Ltd. | 1,332 | 24,908 | ||||||||
a | Sleep Number Corp. | 720 | 35,215 | |||||||
Sonic Automotive Inc. | 657 | 26,385 | ||||||||
a | Sonos Inc. | 1,521 | 23,089 | |||||||
a | Sportsman’s Warehouse Holdings Inc. | 1,278 | 18,288 | |||||||
a | Stamps.com Inc. | 414 | 99,753 | |||||||
Standard Motor Products Inc. | 540 | 24,111 | ||||||||
Steven Madden Ltd. | 2,151 | 41,945 | ||||||||
a,b | Stitch Fix Inc., A | 1,134 | 30,765 | |||||||
Strategic Education Inc. | 501 | 45,827 | ||||||||
Sturm Ruger & Co. Inc. | 405 | 24,770 | ||||||||
Superior Group of Cos. Inc. | 261 | 6,063 | ||||||||
Texas Roadhouse Inc., A | 1,989 | 120,911 | ||||||||
The Cato Corp., A | 585 | 4,575 | ||||||||
b | The Cheesecake Factory Inc. | 1,314 | 36,450 | |||||||
b | The Children’s Place Inc. | 396 | 11,227 | |||||||
a | The Container Store Group Inc. | 441 | 2,739 | |||||||
a,b | The Lovesac Co. | 162 | 4,489 | |||||||
a,b | The Michaels Cos. Inc. | 1,692 | 16,336 | |||||||
The ODP Corp. | 1,449 | 28,183 | ||||||||
Tilly’s Inc., A | 639 | 3,853 | ||||||||
Tupperware Brands Corp. | 1,557 | 31,389 | ||||||||
a | Universal Technical Institute Inc. | 459 | 2,332 | |||||||
a | Vera Bradley Inc. | 522 | 3,189 | |||||||
Weyco Group Inc. | 162 | 2,620 | ||||||||
Wingstop Inc. | 711 | 97,158 |
franklintempleton.com | Semiannual Report | 33 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Consumer Discretionary (continued) | ||||||||||
Winmark Corp. | 63 | $ | 10,847 | |||||||
Wolverine World Wide Inc. | 2,043 | 52,791 | ||||||||
a | WW International Inc. | 747 | 14,096 | |||||||
a,b | XPEL Inc. | 207 | 5,399 | |||||||
a | YETI Holdings Inc. | 1,089 | 49,354 | |||||||
a | Zumiez Inc. | 495 | 13,771 | |||||||
|
| |||||||||
2,849,074 | ||||||||||
|
| |||||||||
Consumer Staples 6.4% | ||||||||||
b | B&G Foods Inc., A | 1,467 | 40,739 | |||||||
a | BellRing Brands Inc., A | 612 | 12,693 | |||||||
a | Bridgford Foods Corp. | 36 | 659 | |||||||
a | Celsius Holdings Inc. | 414 | 9,402 | |||||||
a | Central Garden & Pet Co. | 252 | 10,062 | |||||||
a | Central Garden & Pet Co., A | 1,026 | 37,080 | |||||||
Coca-Cola Consolidated Inc. | 108 | 25,993 | ||||||||
a | Freshpet Inc. | 774 | 86,417 | |||||||
Ingles Markets Inc., A | 423 | 16,091 | ||||||||
Inter Parfums Inc. | 459 | 17,144 | ||||||||
J & J Snack Foods Corp. | 387 | 50,461 | ||||||||
John B. Sanfilippo & Son Inc. | 234 | 17,639 | ||||||||
Lancaster Colony Corp. | 450 | 80,460 | ||||||||
a | Lifevantage Corp. | 315 | 3,802 | |||||||
Medifast Inc. | 333 | 54,762 | ||||||||
a | National Beverage Corp. | 324 | 22,035 | |||||||
Natural Grocers by Vitamin Cottage Inc. | 234 | 2,307 | ||||||||
a | Natures Sunshine Products Inc. | 243 | 2,812 | |||||||
Oil-Dri Corp. of America | 63 | 2,254 | ||||||||
PriceSmart Inc. | 630 | 41,864 | ||||||||
SpartanNash Co. | 900 | 14,715 | ||||||||
a | The Chefs’ Warehouse Inc. | 639 | 9,291 | |||||||
Tootsie Roll Industries Inc. | 369 | 11,402 | ||||||||
Universal Corp. | 630 | 26,384 | ||||||||
a | USANA Health Sciences Inc. | 153 | 11,268 | |||||||
Vector Group Ltd. | 3,204 | 31,047 | ||||||||
Village Super Market Inc., A | 279 | 6,866 | ||||||||
WD-40 Co. | 414 | 78,374 | ||||||||
Weis Markets Inc. | 297 | 14,256 | ||||||||
|
| |||||||||
738,279 | ||||||||||
|
| |||||||||
Energy 0.7% | ||||||||||
Arch Resources Inc. | 324 | 13,764 | ||||||||
Berry Corp. | 1,089 | 3,452 | ||||||||
a | CONSOL Energy Inc. | 711 | 3,150 | |||||||
CVR Energy Inc. | 576 | 7,131 | ||||||||
DHT Holdings Inc. | 1,431 | 7,384 | ||||||||
Evolution Petroleum Corp. | 459 | 1,028 | ||||||||
b | Frontline Ltd. | 1,467 | 9,535 | |||||||
a,b | Penn Virginia Corp. | 243 | 2,394 | |||||||
a | Renewable Energy Group Inc. | 513 | 27,404 | |||||||
Solaris Oilfield Infrastructure Inc. | 513 | 3,252 | ||||||||
|
| |||||||||
78,494 | ||||||||||
|
| |||||||||
Financials 8.1% | ||||||||||
1st Source Corp. | 333 | 10,270 | ||||||||
a | Amerant Bancorp Inc. | 378 | 3,519 | |||||||
Amerisafe Inc. | 369 | 21,166 | ||||||||
Ames National Corp. | 216 | 3,648 |
34 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Financials (continued) | ||||||||||
Arrow Financial Corp. | 305 | $ | 7,652 | |||||||
Banco Latinoamericano de Comercio Exterior SA | 684 | 8,311 | ||||||||
BanCorpSouth Bank | 1,116 | 21,628 | ||||||||
Bar Harbor Bankshares | 315 | 6,473 | ||||||||
Berkshire Hills Bancorp Inc. | 585 | 5,914 | ||||||||
Cadence Bancorp | 2,745 | 23,580 | ||||||||
a | California Bancorp Inc. | 99 | 1,122 | |||||||
Carter Bank & Trust | 252 | 1,676 | ||||||||
Central Pacific Financial Corp. | 513 | 6,961 | ||||||||
Citizens & Northern Corp. | 279 | 4,531 | ||||||||
Citizens Holding Company | 63 | 1,412 | ||||||||
Codorus Valley Bancorp Inc. | 198 | 2,594 | ||||||||
Cohen & Steers Inc. | 585 | 32,608 | ||||||||
Community Trust Bancorp Inc. | 180 | 5,087 | ||||||||
Donegal Group Inc. | 279 | 3,926 | ||||||||
Enterprise Bancorp Inc. | 99 | 2,081 | ||||||||
ESSA Bancorp Inc. | 207 | 2,552 | ||||||||
Essent Group Ltd. | 2,547 | 94,264 | ||||||||
a | EZCORP Inc., A | 1,242 | 6,247 | |||||||
FBL Financial Group Inc., A | 126 | 6,073 | ||||||||
Federated Hermes Inc., B | 2,367 | 50,914 | ||||||||
Financial Institutions Inc. | 387 | 5,960 | ||||||||
First Bancorp Inc. | 225 | 4,743 | ||||||||
First Bancorp Puerto Rico | 4,113 | 21,470 | ||||||||
First Business Financial Services Inc. | 108 | 1,543 | ||||||||
a | Genworth Financial Inc., A | 12,168 | 40,763 | |||||||
German American Bancorp Inc. | 288 | 7,816 | ||||||||
Great Western Bancorp Inc. | 675 | 8,404 | ||||||||
Greene County Bancorp Inc. | 72 | 1,562 | ||||||||
Hamilton Lane Inc., A | 306 | 19,765 | ||||||||
Hanmi Financial Corp. | 369 | 3,029 | ||||||||
Hawthorn Bancshares Inc. | 121 | 2,292 | ||||||||
Heritage Financial Corp. | 846 | 15,558 | ||||||||
Houlihan Lokey Inc. | 522 | 30,824 | ||||||||
Invesco Mortgage Capital | 3,231 | 8,756 | ||||||||
James River Group Holdings Ltd. | 702 | 31,260 | ||||||||
Kinsale Capital Group Inc. | 270 | 51,349 | ||||||||
LCNB Corp. | 297 | 4,054 | ||||||||
a | MainStreet Bancshares Inc. | 90 | 1,102 | |||||||
Middlefield Banc Corp. | 72 | 1,390 | ||||||||
Midwestone Financial Group Inc. | 342 | 6,112 | ||||||||
Moelis & Co., A | 684 | 24,036 | ||||||||
National Western Life Group Inc., A | 72 | 13,159 | ||||||||
NBT Bancorp Inc. | 522 | 14,000 | ||||||||
Nelnet Inc., A | 432 | 26,028 | ||||||||
Northfield Bancorp Inc. | 1,152 | 10,506 | ||||||||
Northwest Bancshares Inc. | 2,700 | 24,840 | ||||||||
Norwood Financial Corp. | 126 | 3,064 | ||||||||
Ohio Valley Banc Corp. | 45 | 930 | ||||||||
a | Oportun Financial Corp. | 234 | 2,759 | |||||||
Penns Woods Bancorp Inc. | 162 | 3,216 | ||||||||
Peoples Bancorp Inc. | 234 | 4,467 | ||||||||
Peoples Financial Services Corp. | 162 | 5,631 | ||||||||
PJT Partners Inc., A | 315 | 19,092 | ||||||||
Premier Financial Bancorp Inc. | 324 | 3,499 | ||||||||
ProAssurance Corp. | 756 | 11,824 | ||||||||
Protective Insurance Corp., B | 216 | 2,836 |
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Financials (continued) | ||||||||||
Provident Financial Services Inc. | 1,512 | $ | 18,446 | |||||||
Pzena Investment Management Inc., A | 387 | 2,074 | ||||||||
RBB Bancorp | 198 | 2,245 | ||||||||
Red River Bancshares Inc. | 90 | 3,870 | ||||||||
Salisbury Bancorp Inc. | 27 | 853 | ||||||||
Silvercrest Asset Management Group Inc., A | 225 | 2,353 | ||||||||
Southern Missouri Bancorp Inc. | 162 | 3,820 | ||||||||
Stewart Information Services Corp. | 495 | 21,646 | ||||||||
a | SWK Holdings Corp. | 45 | 630 | |||||||
The Bank of Princeton | 99 | 1,799 | ||||||||
Tompkins Financial Corp. | 369 | 20,963 | ||||||||
TrustCo Bank Corp. NY | 2,412 | 12,591 | ||||||||
United Fire Group Inc. | 459 | 9,327 | ||||||||
United Security Bancshares | 261 | 1,595 | ||||||||
Value Line Inc. | 27 | 667 | ||||||||
Waddell & Reed Financial Inc., A | 1,449 | 21,518 | ||||||||
Washington Trust Bancorp Inc. | 207 | 6,347 | ||||||||
a | Watford Holdings Ltd. | 369 | 8,465 | |||||||
West Bancorp Inc. | 378 | 5,988 | ||||||||
Westamerica BanCorp | 315 | 17,120 | ||||||||
Westwood Holdings Group Inc. | 216 | 2,406 | ||||||||
|
| |||||||||
936,571 | ||||||||||
|
| |||||||||
Health Care 10.6% | ||||||||||
a | Addus Homecare Corp. | 324 | 30,621 | |||||||
a | AMN Healthcare Services Inc. | 1,224 | 71,555 | |||||||
a | AtriCure Inc. | 954 | 38,065 | |||||||
Atrion Corp. | 36 | 22,536 | ||||||||
a | Axogen Inc. | 432 | 5,024 | |||||||
a | Biospecifics Technologies Corp. | 144 | 7,608 | |||||||
a | Cardiovascular Systems Inc. | 963 | 37,894 | |||||||
a | Catalyst Pharmaceuticals Inc. | 1,296 | 3,849 | |||||||
a | Champions Oncology Inc. | 90 | 833 | |||||||
a | Coherus Biosciences Inc. | 666 | 12,214 | |||||||
a | Community Health Systems Inc. | 2,079 | 8,773 | |||||||
CONMED Corp. | 621 | 48,854 | ||||||||
a | Corcept Therapeutics Inc. | 2,637 | 45,897 | |||||||
a | CorVel Corp. | 207 | 17,684 | |||||||
a | Cross Country Healthcare Inc. | 756 | 4,906 | |||||||
a | Eagle Pharmaceuticals Inc. | 225 | 9,558 | |||||||
a | Electromed Inc. | 90 | 937 | |||||||
a | Emergent BioSolutions Inc. | 513 | 53,008 | |||||||
a | Enanta Pharmaceuticals Inc. | 459 | 21,013 | |||||||
a | Fonar Corp. | 72 | 1,503 | |||||||
a | Hanger Inc. | 882 | 13,953 | |||||||
a | InfuSystem Holdings Inc. | 171 | 2,192 | |||||||
a | Inogen Inc. | 405 | 11,745 | |||||||
Invacare Corp. | 549 | 4,129 | ||||||||
a | iRadimed Corp. | 117 | 2,501 | |||||||
a | Ironwood Pharmaceuticals Inc. | 2,079 | 18,701 | |||||||
a | Jounce Therapeutics Inc. | 198 | 1,616 | |||||||
a | Lantheus Holdings Inc. | 747 | 9,465 | |||||||
LeMaitre Vascular Inc. | 432 | 14,053 | ||||||||
a | Lexicon Pharmaceuticals Inc. | 495 | 713 | |||||||
a | LHC Group Inc. | 684 | 145,391 | |||||||
Luminex Corp. | 486 | 12,758 | ||||||||
a | Meridian Bioscience Inc. | 1,152 | 19,561 | |||||||
a | Merit Medical Systems Inc. | 1,350 | 58,725 |
36 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Health Care (continued) | ||||||||||
Mesa Laboratories Inc. | 72 | $ | 18,343 | |||||||
a | Milestone Scientific Inc. | 405 | 563 | |||||||
a | Misonix Inc. | 243 | 2,850 | |||||||
a | Myriad Genetics Inc. | 1,593 | 20,773 | |||||||
National Healthcare Corp. | 351 | 21,871 | ||||||||
National Research Corp., A | 342 | 16,830 | ||||||||
a | Neogen Corp. | 621 | 48,593 | |||||||
a | NuVasive Inc. | 1,116 | 54,204 | |||||||
a | Omeros Corp. | 594 | 6,002 | |||||||
a | OraSure Technologies Inc. | 738 | 8,982 | |||||||
a | Orthofix International Nv | 450 | 14,013 | |||||||
Patterson Cos. Inc. | 1,944 | 46,860 | ||||||||
Phibro Animal Health Corp. | 558 | 9,709 | ||||||||
a | Prestige Consumer Healthcare Inc. | 1,197 | 43,595 | |||||||
a | Repro-Med Systems Inc. | 324 | 2,339 | |||||||
a | Sharps Compliance Corp. | 171 | 1,072 | |||||||
Simulations Plus Inc. | 342 | 25,773 | ||||||||
a | STAAR Surgical Co. | 540 | 30,542 | |||||||
a | Supernus Pharmaceuticals Inc. | 1,350 | 28,134 | |||||||
a | Surmodics Inc. | 153 | 5,953 | |||||||
a | Tactile Systems Technology Inc. | 495 | 18,112 | |||||||
a | The Joint Corp. | 279 | 4,852 | |||||||
Utah Medical Products Inc. | 90 | 7,188 | ||||||||
a | Viemed Healthcare Inc. | 405 | 3,499 | |||||||
a | Vocera Communications Inc. | 720 | 20,938 | |||||||
a,b | Zynex Inc. | 198 | 3,455 | |||||||
|
| |||||||||
1,222,880 | ||||||||||
|
| |||||||||
Industrials 20.2% | ||||||||||
ABM Industries Inc. | 1,611 | 59,059 | ||||||||
Acco Brands Corp. | 2,007 | 11,641 | ||||||||
a | Advanced Disposal Services Inc. | 1,908 | 57,679 | |||||||
a | Aegion Corp. | 540 | 7,630 | |||||||
a | Air Transport Services Group Inc. | 684 | 17,141 | |||||||
Alamo Group Inc. | 216 | 23,335 | ||||||||
Allegiant Travel Co. | 306 | 36,659 | ||||||||
Allied Motion Technologies Inc. | 180 | 7,430 | ||||||||
a,b | Alpha Pro Tech Ltd. | 144 | 2,128 | |||||||
Applied Industrial Technologies Inc. | 1,080 | 59,508 | ||||||||
BG Staffing Inc. | 252 | 2,134 | ||||||||
a | BMC Stock Holdings Inc. | 1,404 | 60,133 | |||||||
Brady Corp., A | 1,323 | 52,946 | ||||||||
a | Builders FirstSource Inc. | 2,430 | 79,267 | |||||||
a | Casella Waste Systems Inc., A | 855 | 47,752 | |||||||
a | Cimpress PLC | 459 | 34,498 | |||||||
CompX International Inc. | 36 | 538 | ||||||||
Costamare Inc. | 837 | 5,081 | ||||||||
a | Covenant Logistics Group Inc. | 315 | 5,509 | |||||||
CRA International Inc. | 126 | 4,721 | ||||||||
CSW Industrials Inc. | 297 | 22,943 | ||||||||
Deluxe Corp. | 1,152 | 29,641 | ||||||||
Douglas Dynamics Inc. | 486 | 16,621 | ||||||||
Ennis Inc. | 648 | 11,301 | ||||||||
Exponent Inc. | 1,494 | 107,613 | ||||||||
Forward Air Corp. | 756 | 43,379 | ||||||||
a | Foundation Building Materials Inc. | 441 | 6,933 | |||||||
a | Franklin Covey Co. | 261 | 4,630 | |||||||
Franklin Electric Co. Inc. | 810 | 47,652 |
franklintempleton.com | Semiannual Report | 37 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Industrials (continued) | ||||||||||
a | GMS Inc. | 657 | $ | 15,834 | ||||||
H&E Equipment Services Inc. | 639 | 12,563 | ||||||||
Healthcare Services Group Inc. | 1,701 | 36,623 | ||||||||
Heartland Express Inc. | 1,224 | 22,766 | ||||||||
Heidrick & Struggles International Inc. | 585 | 11,495 | ||||||||
a | Heritage-Crystal Clean Inc. | 459 | 6,128 | |||||||
Herman Miller Inc. | 1,593 | 48,045 | ||||||||
Hillenbrand Inc. | 1,557 | 44,157 | ||||||||
HNI Corp. | 1,188 | 37,279 | ||||||||
Hurco Cos. Inc. | 126 | 3,578 | ||||||||
Hyster-Yale Materials Handling Inc. | 225 | 8,359 | ||||||||
ICF International Inc. | 459 | 28,242 | ||||||||
a | IES Holdings Inc. | 99 | 3,145 | |||||||
Insperity Inc. | 900 | 58,941 | ||||||||
Interface Inc. | 1,287 | 7,876 | ||||||||
John Bean Technologies Corp. | 594 | 54,583 | ||||||||
Kadant Inc. | 279 | 30,584 | ||||||||
KAR Auction Services Inc. | 1,593 | 22,939 | ||||||||
Kelly Services Inc., A | 801 | 13,649 | ||||||||
Kforce Inc. | 630 | 20,267 | ||||||||
Kimball International Inc., B | 990 | 10,435 | ||||||||
Knoll Inc. | 1,305 | 15,738 | ||||||||
Korn Ferry | 1,620 | 46,980 | ||||||||
a | Lawson Products Inc. | 126 | 5,170 | |||||||
LSI Industries Inc. | 297 | 2,005 | ||||||||
Marten Transport Ltd. | 796 | 12,991 | ||||||||
a | Mastech Digital Inc. | 45 | 810 | |||||||
McGrath RentCorp | 567 | 33,788 | ||||||||
Miller Industries Inc. | 261 | 7,979 | ||||||||
Moog Inc., A | 729 | 46,313 | ||||||||
National Presto Industries Inc. | 117 | 9,578 | ||||||||
Omega Flex Inc. | 81 | 12,694 | ||||||||
a | P.A.M. Transportation Services Inc. | 45 | 1,692 | |||||||
Park-Ohio Holdings Corp. | 99 | 1,591 | ||||||||
Preformed Line Products Co. | 63 | 3,069 | ||||||||
a | Radiant Logistics Inc. | 882 | 4,534 | |||||||
Rush Enterprises Inc., B | 99 | 4,386 | ||||||||
a | SAIA Inc. | 774 | 97,632 | |||||||
Simpson Manufacturing Co. Inc. | 1,116 | 108,431 | ||||||||
a | SiteOne Landscape Supply Inc. | 738 | 89,999 | |||||||
Standex International Corp. | 279 | 16,517 | ||||||||
Steelcase Inc., A | 2,403 | 24,294 | ||||||||
Systemax Inc. | 306 | 7,326 | ||||||||
Tennant Co. | 432 | 26,076 | ||||||||
Tetra Tech Inc. | 891 | 85,091 | ||||||||
a | Transcat Inc. | 162 | 4,747 | |||||||
UFP Industries Inc. | 1,026 | 57,979 | ||||||||
UniFirst Corp. | 351 | 66,469 | ||||||||
Universal Logistics Holdings Inc. | 189 | 3,943 | ||||||||
a | US Xpress Enterprises Inc., A | 531 | 4,386 | |||||||
a | Vectrus Inc. | 135 | 5,130 | |||||||
a | Vicor Corp. | 414 | 32,180 | |||||||
Watts Water Technologies Inc., A | 621 | 62,193 | ||||||||
Werner Enterprises Inc. | 1,656 | 69,535 | ||||||||
2,334,236 | ||||||||||
Information Technology 13.3% | ||||||||||
a | A10 Networks Inc. | 1,431 | 9,115 | |||||||
a | Alarm.com Holdings Inc. | 1,053 | 58,178 |
38 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Information Technology (continued) | ||||||||||
a | Altair Engineering Inc. | 909 | $ | 38,160 | ||||||
American Software Inc., A | 711 | 9,982 | ||||||||
a | Appfolio Inc. | 288 | 40,841 | |||||||
a | Avid Technology Inc. | 765 | 6,548 | |||||||
Badger Meter Inc. | 702 | 45,890 | ||||||||
a | Calix Inc. | 567 | 10,081 | |||||||
a | CEVA Inc. | 522 | 20,551 | |||||||
a | ChannelAdvisor Corp. | 657 | 9,507 | |||||||
a | CommVault Systems Inc. | 1,017 | 41,494 | |||||||
CSG Systems International Inc. | 891 | 36,486 | ||||||||
a | CyberOptics Corp. | 90 | 2,866 | |||||||
Daktronics Inc. | 864 | 3,421 | ||||||||
a | Digi International Inc. | 450 | 7,034 | |||||||
a | eGain Corp. | 477 | 6,759 | |||||||
a | ePlus Inc. | 297 | 21,740 | |||||||
EVERTEC Inc. | 1,341 | 46,546 | ||||||||
a | Genasys Inc. | 396 | 2,435 | |||||||
Hackett Group Inc. | 621 | 6,943 | ||||||||
a | Information Services Group Inc. | 765 | 1,614 | |||||||
a | Insight Enterprises Inc. | 855 | 48,376 | |||||||
a | Intelligent Systems Corp. | 117 | 4,561 | |||||||
a | Iteris Inc. | 954 | 3,911 | |||||||
a | J2 Global Inc. | 1,323 | 91,578 | |||||||
a | Lattice Semiconductor Corp. | 1,566 | 45,351 | |||||||
ManTech International Corp., A | 675 | 46,494 | ||||||||
MAXIMUS Inc. | 1,296 | 88,659 | ||||||||
Methode Electronics Inc. | 423 | 12,056 | ||||||||
a | MicroStrategy Inc. | 207 | 31,166 | |||||||
a | Mimecast Ltd. | 648 | 30,404 | |||||||
a | MobileIron Inc. | 1,908 | 13,375 | |||||||
a | Napco Security Technologies Inc. | 297 | 6,980 | |||||||
NIC Inc. | 1,773 | 34,928 | ||||||||
a | Novanta Inc. | 828 | 87,222 | |||||||
NVE Corp. | 117 | 5,742 | ||||||||
a | OSI Systems Inc. | 315 | 24,447 | |||||||
PC Connection Inc. | 270 | 11,086 | ||||||||
PCTEL Inc. | 198 | 1,121 | ||||||||
a | Ping Identity Holding Corp. | 189 | 5,899 | |||||||
Power Integrations Inc. | 783 | 43,378 | ||||||||
Progress Software Corp. | 945 | 34,663 | ||||||||
QAD Inc., A | 252 | 10,634 | ||||||||
a | Qualys Inc. | 909 | 89,091 | |||||||
a | Quantum Corp. | 360 | 1,656 | |||||||
a | Rimini Street Inc. | 306 | 985 | |||||||
a | Rosetta Stone Inc. | 522 | 15,650 | |||||||
a | Semtech Corp. | 1,278 | 67,683 | |||||||
a | Silicon Laboratories Inc. | 1,044 | 102,155 | |||||||
a | Smith Micro Software Inc. | 423 | 1,578 | |||||||
a | SPS Commerce Inc. | 909 | 70,784 | |||||||
a | Sykes Enterprises Inc. | 693 | 23,708 | |||||||
Vishay Intertechnology Inc. | 2,736 | 42,600 | ||||||||
Xperi Holding Corp. | 1,593 | 18,304 | ||||||||
|
| |||||||||
1,542,416 | ||||||||||
|
| |||||||||
Materials 2.0% | ||||||||||
Advanced Emissions Solutions Inc. | 360 | 1,462 | ||||||||
Caledonia Mining Corp PLC | 144 | 2,446 | ||||||||
FutureFuel Corp. | 297 | 3,377 |
franklintempleton.com | Semiannual Report | 39 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Materials (continued) | ||||||||||
Greif Inc., A | 630 | $ | 22,812 | |||||||
Greif Inc., B | 144 | 5,685 | ||||||||
Myers Industries Inc. | 846 | 11,193 | ||||||||
Orion Engineered Carbons SA | 1,071 | 13,398 | ||||||||
Quaker Chemical Corp. | 261 | 46,904 | ||||||||
Schweitzer-Mauduit International Inc. | 756 | 22,975 | ||||||||
Sensient Technologies Corp. | 972 | 56,123 | ||||||||
Stepan Co. | 252 | 27,468 | ||||||||
Warrior Met Coal Inc. | 1,134 | 19,369 | ||||||||
|
| |||||||||
233,212 | ||||||||||
|
| |||||||||
Professional Services 0.1% | ||||||||||
Resources Connection Inc. | 918 | 10,603 | ||||||||
|
| |||||||||
Real Estate 5.6% | ||||||||||
Agree Realty Corp. | 1,035 | 65,867 | ||||||||
American Assets Trust Inc. | 990 | 23,849 | ||||||||
CoreCivic Inc. | 2,799 | 22,392 | ||||||||
CorePoint Lodging Inc. | 522 | 2,845 | ||||||||
DiamondRock Hospitality Co. | 4,068 | 20,625 | ||||||||
Diversified Healthcare Trust | 2,781 | 9,789 | ||||||||
Franklin Street Properties Corp. | 2,385 | 8,729 | ||||||||
Healthcare Realty Trust Inc. | 1,566 | 47,168 | ||||||||
Kite Realty Group Trust | 1,017 | 11,777 | ||||||||
Lexington Realty Trust | 6,372 | 66,587 | ||||||||
Monmouth Real Estate Investment Corp., A | 1,980 | 27,423 | ||||||||
Newmark Group Inc. | 1,656 | 7,154 | ||||||||
Piedmont Office Realty Trust Inc., A | 1,449 | 19,663 | ||||||||
Preferred Apartment Communities Inc., A | 1,278 | 6,901 | ||||||||
PS Business Parks Inc. | 549 | 67,192 | ||||||||
QTS Realty Trust Inc., A | 1,323 | 83,375 | ||||||||
RE/MAX Holdings Inc., A | 468 | 15,318 | ||||||||
Realogy Holdings Corp. | 2,421 | 22,854 | ||||||||
Retail Properties of America Inc., A | 2,592 | 15,060 | ||||||||
Retail Value Inc. | 207 | 2,602 | ||||||||
RPT Realty | 1,971 | 10,722 | ||||||||
Summit Hotel Properties Inc. | 2,061 | 10,676 | ||||||||
b | Tanger Factory Outlet Centers Inc. | 2,052 | 12,374 | |||||||
The RMR Group Inc., A | 189 | 5,192 | ||||||||
Uniti Group Inc. | 2,259 | 23,799 | ||||||||
Universal Health Realty Income Trust | 297 | 16,926 | ||||||||
Urstadt Biddle Properties, A | 711 | 6,541 | ||||||||
Whitestone REIT | 855 | 5,130 | ||||||||
Xenia Hotels & Resorts Inc. | 1,404 | 12,327 | ||||||||
|
| |||||||||
650,857 | ||||||||||
|
| |||||||||
Utilities 5.6% | ||||||||||
American States Water Co. | 954 | 71,502 | ||||||||
Artesian Resources Corp., A | 180 | 6,205 | ||||||||
Avista Corp. | 1,548 | 52,818 | ||||||||
Black Hills Corp. | 1,377 | 73,656 | ||||||||
California Water Service Group | 1,206 | 52,401 | ||||||||
Clearway Energy Inc., A | 819 | 20,229 | ||||||||
Clearway Energy Inc., C | 1,737 | 46,829 | ||||||||
Consolidated Water Co. Ltd. | 243 | 2,530 | ||||||||
Genie Energy Ltd., B | 306 | 2,448 | ||||||||
Global Water Resources Inc. | 261 | 2,813 | ||||||||
MGE Energy Inc. | 846 | 53,010 |
40 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Utilities (continued) | ||||||||||
NorthWestern Corp. | 1,053 | $ | 51,218 | |||||||
PNM Resources Inc. | 1,791 | 74,022 | ||||||||
SJW Group | 594 | 36,151 | ||||||||
Southwest Gas Holdings Inc. | 1,278 | 80,642 | ||||||||
Spark Energy Inc., A | 297 | 2,471 | ||||||||
Unitil Corp. | 333 | 12,867 | ||||||||
York Water Co. | 315 | 13,315 | ||||||||
|
| |||||||||
655,127 | ||||||||||
|
| |||||||||
Total Investments before Short Term Investments | 11,565,572 | |||||||||
|
| |||||||||
Short Term Investments (Cost $224,519) 2.0% | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 2.0% | ||||||||||
Money Market Funds 2.0% | ||||||||||
c,d | Institutional Fiduciary Trust Portfolio, 0.00% | 224,519 | 224,519 | |||||||
|
| |||||||||
Total Investments (Cost $13,185,316) 101.9% | 11,790,091 | |||||||||
Other Assets, less Liabilities (1.9)% | (214,327 | ) | ||||||||
|
| |||||||||
Net Assets 100.0% | $ | 11,575,764 | ||||||||
|
|
See Abbreviations on page 53.
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2020. See Note 1(c).
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 41 |
FRANKLIN TEMPLETON ETF TRUST
Statements of Assets and Liabilities
September 30, 2020 (unaudited)
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost – Unaffiliated issuers | $ | 1,127,504,225 | $ | 22,555,351 | $ | 12,960,797 | ||||||
Cost – Non-controlled affiliates (Note 3c) | 711,145 | 53,386 | 224,519 | |||||||||
|
| |||||||||||
Value – Unaffiliated issuers+ | $ | 1,235,633,614 | $ | 24,758,178 | $ | 11,565,572 | ||||||
Value – Non-controlled affiliates (Note 3c) | 711,145 | 53,386 | 224,519 | |||||||||
Cash | 2,237,030 | — | 5,922 | |||||||||
Receivables: | ||||||||||||
Dividends | 1,467,582 | 25,193 | 7,612 | |||||||||
Variation margin on futures contracts | 12,798 | — | — | |||||||||
Deposits with brokers for: | ||||||||||||
Futures contracts | 168,000 | — | — | |||||||||
|
| |||||||||||
Total assets | 1,240,230,169 | 24,836,757 | 11,803,625 | |||||||||
|
| |||||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 1,209,690 | — | — | |||||||||
Management fees | 154,477 | 6,090 | 3,342 | |||||||||
Funds advanced by custodian | — | 1,314 | — | |||||||||
Payable upon return of securities loaned | 711,145 | 53,386 | 224,519 | |||||||||
|
| |||||||||||
Total liabilities | 2,075,312 | 60,790 | 227,861 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 1,238,154,857 | $ | 24,775,967 | $ | 11,575,764 | ||||||
|
| |||||||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 1,172,940,658 | $ | 23,106,320 | $ | 14,329,952 | ||||||
Total distributable earnings (loss) | 65,214,199 | 1,669,647 | (2,754,188 | ) | ||||||||
|
| |||||||||||
Net assets, at value | $ | 1,238,154,857 | $ | 24,775,967 | $ | 11,575,764 | ||||||
|
| |||||||||||
Shares outstanding | 35,700,000 | 750,000 | 450,000 | |||||||||
|
| |||||||||||
Net asset value per share | $ | 34.68 | $ | 33.03 | $ | 25.72 | ||||||
|
| |||||||||||
+Includes securities loaned | 692,736 | 51,999 | 218,508 |
42 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2020 (unaudited)
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Investment income: | ||||||||||||
Dividends: | ||||||||||||
Unaffiliated issuers | $ | 15,157,080 | $ | 165,255 | $ | 100,920 | ||||||
Interest from securities loaned: | ||||||||||||
Unaffiliated issuers (net of fees and rebates) | (187 | ) | (5 | ) | (41 | ) | ||||||
Non-Controlled affiliates (Note 3c) | 40,184 | 1,358 | 2,691 | |||||||||
|
| |||||||||||
Total investment income | 15,197,077 | 166,608 | 103,570 | |||||||||
|
| |||||||||||
Expenses: | ||||||||||||
Management fees (Note 3a) | 982,828 | 28,601 | 24,059 | |||||||||
|
| |||||||||||
Total expenses | 982,828 | 28,601 | 24,059 | |||||||||
Expenses waived/paid by affiliates (Note 3c) | (2,403 | ) | (95 | ) | (267 | ) | ||||||
|
| |||||||||||
Net expenses | 980,425 | 28,506 | 23,792 | |||||||||
|
| |||||||||||
Net investment income | 14,216,652 | 138,102 | 79,778 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | (73,989,313 | ) | (398,928 | ) | (446,071 | ) | ||||||
In-kind redemptions | 47,229,494 | — | 116,240 | |||||||||
Futures contracts | 679,806 | — | — | |||||||||
|
| |||||||||||
Net realized gain (loss) | (26,080,013 | ) | (398,928 | ) | (329,831 | ) | ||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 325,756,295 | 5,033,337 | 3,463,311 | |||||||||
Futures contracts | 122,463 | — | — | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) | 325,878,758 | 5,033,337 | 3,463,311 | |||||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 299,798,745 | 4,634,409 | 3,133,480 | |||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 314,015,397 | $ | 4,772,511 | $ | 3,213,258 | ||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 43 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 14,216,652 | $ | 29,448,084 | $ | 138,102 | $ | 212,642 | ||||||||
Net realized gain (loss) | (26,080,013 | ) | 56,693,326 | (398,928 | ) | 534,820 | ||||||||||
Net change in unrealized appreciation (depreciation) | 325,878,758 | (258,171,969 | ) | 5,033,337 | (3,745,164 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 314,015,397 | (172,030,559 | ) | 4,772,511 | (2,997,702 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (15,629,739 | ) | (26,642,033 | ) | (127,028 | ) | (202,973 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (371,814,126 | ) | 502,001,368 | 6,412,288 | 6,306,864 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (73,428,468 | ) | 303,328,776 | 11,057,771 | 3,106,189 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 1,311,583,325 | 1,008,254,549 | 13,718,196 | 10,612,007 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 1,238,154,857 | $ | 1,311,583,325 | $ | 24,775,967 | $ | 13,718,196 | ||||||||
|
|
44 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||
Increase (decrease) in net assets: |
| |||||||
Operations: |
| |||||||
Net investment income | $ | 79,778 | $ | 291,733 | ||||
Net realized gain (loss) | (329,831 | ) | 76,852 | |||||
Net change in unrealized appreciation (depreciation) | 3,463,311 | (5,286,481 | ) | |||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 3,213,258 | (4,917,896 | ) | |||||
|
| |||||||
Distributions to shareholders: | (96,301 | ) | (314,153 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | (4,850,869 | ) | 562,588 | |||||
|
| |||||||
Net increase (decrease) in net assets | (1,733,912 | ) | (4,669,461 | ) | ||||
Net assets: |
| |||||||
Beginning of period | 13,309,676 | 17,979,137 | ||||||
|
| |||||||
End of period | $ | 11,575,764 | $ | 13,309,676 | ||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 45 |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-four separate funds, three of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of each Fund’s corresponding underlying index.
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Funds’ pricing services use various techniques including industry standard option pricing
models and proprietary discounted cash flow models to determine the fair value of those instruments. The Funds’ net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the
46 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes
b. Derivative Financial Instruments
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty.
Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. Early termination by the counterparty
may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
See Note 7 regarding other derivative information.
c. Securities Lending
Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Funds.
franklintempleton.com | Semiannual Report | 47 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Securities Lending (continued)
The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.
d. Income Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2020, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
e. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications
have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense. These expenses are paid by the Funds or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
f. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same
48 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be
charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At September 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin LibertyQ U.S. Equity ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 2,000,000 | $ | 63,297,855 | 25,800,000 | $ | 846,426,405 | ||||||||||||||
Shares redeemed | (13,800,000 | ) | (435,111,981 | ) | (10,400,000 | ) | (344,425,037 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (11,800,000 | ) | $ | (371,814,126 | ) | 15,400,000 | $ | 502,001,368 | ||||||||||||
|
| |||||||||||||||||||
Franklin LibertyQ U.S. Mid Cap Equity ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 200,000 | $ | 6,412,288 | 300,000 | $ | 9,365,575 | ||||||||||||||
Shares redeemed | — | — | (100,000 | ) | (3,058,711 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 200,000 | $ | 6,412,288 | 200,000 | $ | 6,306,864 | ||||||||||||||
|
| |||||||||||||||||||
Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 50,000 | $ | 1,120,243 | 250,000 | $ | 6,943,400 | ||||||||||||||
Shares redeemed | (250,000 | ) | (5,971,112 | ) | (250,000 | ) | (6,380,812 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (200,000 | ) | $ | (4,850,869 | ) | — | $ | 562,588 | ||||||||||||
|
|
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Advisory Services, LLC (FASL) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
a. Management Fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non routine or extraordinary expenses. The fees are based on the average daily net assets of each of the Funds as follows:
Annualized Fee Rate | ||
Franklin LibertyQ U.S. Equity ETF | 0.15% | |
Franklin LibertyQ U.S. Mid Cap Equity ETF | 0.30% | |
Franklin LibertyQ U.S. Small Cap Equity ETF | 0.35% |
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Investments in Affiliated Management Investment Companies
Certain or all Funds invest in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended September 30, 2020, investments in affiliated management investment companies were as follows:
Value at Beginning of Year | Purchases | Sales | Realized Gain (Loss) | Net Change In (Depreciation) | Value at End of Year | Number of Shares Held at End of Year | Investment Income | |||||||||||||||||||||||||
Franklin LibertyQ U.S. Equity ETF | Income from Securities loaned | |||||||||||||||||||||||||||||||
Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | 911,900 | $ | 14,892,853 | $ | (15,093,608 | ) | $ | — | $ | — | $ | 711,145 | 711,145 | $ | 40,184 | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Franklin LibertyQ U.S. Mid Cap Equity ETF | Income from | |||||||||||||||||||||||||||||||
Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | 75,900 | $ | 630,844 | $ | (653,358 | ) | $ | — | $ | — | $ | 53,386 | 53,386 | $ | 1,358 | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Franklin LibertyQ U.S. Small Cap Equity ETF | Income from | |||||||||||||||||||||||||||||||
Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | 131,291 | $ | 1,521,691 | $ | (1,428,463 | ) | $ | — | $ | — | $ | 224,519 | 224,519 | $ | 2,691 | ||||||||||||||||
|
|
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
d. Other Affiliated Transactions
At September 30, 2020, the shares of Franklin LibertyQ U.S. Equity ETF were owned by the following entities:
Funds | Shares | Percentage of Outstanding Sharesa | ||||||
Franklin LibertyQ U.S. Equity ETF | ||||||||
Franklin Conservative Allocation Fund | 1,845,170 | 5.2% | ||||||
Franklin Moderate Allocation Fund | 4,178,780 | 11.7% | ||||||
Franklin Growth Allocation Fund | 3,649,614 | 10.2% | ||||||
Franklin 529 Portfolios | 11,520,095 | 32.3% | ||||||
|
| |||||||
21,193,659 | 59.4% | |||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2020, the capital loss carryforwards were as follows:
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||
Short term | $ | 11,114,119 | $ | 35,294 | $ | 518,055 | ||||||
Long term | 7,023,123 | 120,561 | 476,044 | |||||||||
|
| |||||||||||
Total capital loss carryforwards | $ | 18,137,242 | $ | 155,855 | $ | 994,099 | ||||||
|
|
At September 30, 2020, the cost of investments and net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Cost of investments | $ | 1,128,215,370 | $ | 22,608,737 | $ | 13,185,316 | ||||||
|
| |||||||||||
Unrealized appreciation | $ | 166,945,397 | $ | 3,274,172 | $ | 1,039,517 | ||||||
Unrealized depreciation | (58,816,008 | ) | (1,071,345 | ) | (2,434,742 | ) | ||||||
|
| |||||||||||
Net unrealized appreciation (depreciation) | $ | 108,129,389 | $ | 2,202,827 | $ | (1,395,225 | ) | |||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions, passive foreign investment company shares and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2020, were as follows:
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Purchases | $ | 206,833,501 | $ | 3,171,574 | $ | 3,296,755 | ||||||
Sales | $ | 206,612,037 | $ | 3,133,594 | $ | 3,293,496 |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions (continued)
In-kind transactions associated with creation and redemptions for the period ended September 30, 2020, were as follows:
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Cost of Securities Received | $ | 51,803,662 | $ | 6,409,827 | $ | 1,118,932 | ||||||
Value of Securities Delivered | $ | 421,395,212 | $ | — | $ | 5,961,497 |
At September 30, 2020, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Securities lending transactionsa: | ||||||||||||
Equity investmentsb | $ | 711,145 | $ | 53,386 | $ | 224,519 | ||||||
|
|
aThe agreements can be terminated at any time.
bThe gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statements of Assets and Liabilities.
6. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
7. Other Derivative Information
At September 30, 2020, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
Franklin LibertyQ U.S. Equity ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 11,421 | Variation margin on futures contracts | $ | — | ||||||
|
|
|
| |||||||||
Totals | $ | 11,421 | $ | — | ||||||||
|
|
|
|
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
7. Other Derivative Information (continued)
For the period ended September 30, 2020, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
Franklin LibertyQ U.S. Equity ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity Contracts | Future Contracts | $ | 679,806 | Future Contracts | $ | 122,463 | ||||||
|
|
|
|
For the period ended September 30, 2020, the average month end notional amount of futures contracts was $2,853,846
See Note 1(b) regarding derivative financial instruments.
8. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
At September 30, 2020, all of the Funds’ investments in financial instruments carried at fair value were valued using Level 1 inputs.
9. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Selected Portfolio | ||
REIT | Real Estate Investment Trust |
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Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin LibertyQ U.S. Equity ETF
Franklin LibertyQ U.S. Mid Cap Equity ETF
Franklin LibertyQ U.S. Small Cap Equity ETF
(each a Fund)
At a meeting held on May 14, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from the Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of each Fund and each Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and
(v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the effectiveness of those plans during the pandemic, and developing strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity and liquidity risk management. The Board further noted its ongoing engagement with management, the Funds’ auditor and State Street Bank and Trust Company, the Funds’ custodian, about their responses to the pandemic and the pandemic’s impact on their operating continuity, as well as the impact on the Funds (especially with respect to valuation and liquidity).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by
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SHAREHOLDER INFORMATION
the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions currently provided by FT or an affiliate to other funds in the complex, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. Specifically, the Board discussed with management the expected impact of the Legg Mason acquisition on FT and the Funds, including management’s expectations with respect to the integration of Legg Mason’s exchange-traded funds into the FT family of funds. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, in her role as President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for the one-year period ended February 29, 2020. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also considered the performance returns for the Franklin LibertyQ U.S. Mid Cap Equity ETF in comparison to the performance returns of a customized peer group (Performance Customized Peer Group) selected by the Manager. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with the Manager about the performance of the Funds to date, particularly as compared to peers, and referenced earlier discussions with the Manager on matters related to, among other things, the importance of performance to asset growth and growth of market share, the comparability of peer data, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding the Manager’s strategy behind the overall product line-up, the sources of asset growth, the nature of the Manager’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the
Board noted the Manager’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
Franklin LibertyQ U.S. Equity ETF – The Performance Universe for the Fund included the Fund and all retail and institutional multi-cap core funds and exchange-traded funds. The Fund commenced operations on April 26, 2017. The Board noted that the Fund’s annualized total return for the one-year period was above the median of its Performance Universe. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 29, 2020, the Fund’s tracking error was within the tolerance anticipated for the Fund. The Board concluded that the Fund’s performance was satisfactory.
Franklin LibertyQ U.S. Mid Cap Equity ETF – The Performance Universe for the Fund included the Fund and all retail and institutional mid-cap growth funds and exchange-traded funds. The Performance Customized Peer Group for the Fund consisted of the Fund and all retail and institutional mid-cap core funds. The Fund commenced operations on April 26, 2017. The Board noted that the Fund’s annualized total return for the one-year period was below the median of its Performance Universe, but above the median and in the second quintile of its Performance Customized Peer Group. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 29, 2020, the Fund’s tracking error was within the tolerance anticipated for the Fund. The Board concluded that the Fund’s performance was satisfactory.
Franklin LibertyQ U.S. Small Cap Equity ETF – The Performance Universe for the Fund included the Fund and all retail and institutional small-cap core funds and exchange-traded funds. The Fund commenced operations on April 26, 2017. The Board noted that the Fund’s annualized total return for the one-year period was 0.43% below the median of its Performance Universe. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 29, 2020, the Fund’s tracking error was within the tolerance anticipated for the Fund. The Board concluded that the Fund’s performance was satisfactory.
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SHAREHOLDER INFORMATION
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin LibertyQ U.S. Equity ETF – The Expense Group for the Fund was comprised of pure-index and strategic beta exchange-traded funds, which included the Fund and twelve other multi-cap core funds. The Board noted that the Management Rate and the actual total expense ratio for the Fund were below the medians of its Expense Group. The Board also noted that effective December 1, 2017, the Fund implemented a unified management fee (Unified Fee). The Board further noted that pursuant to the Unified Fee arrangement the Manager reimburses the Fund for all of its acquired fund fees and expenses (if any) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s investment management fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses, (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (Unified Fee Arrangement). The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin LibertyQ U.S. Mid Cap Equity ETF – The Expense Group for the Fund was comprised of pure-index and strategic beta exchange-traded funds, which included the Fund and six other mid-cap growth funds. The Board noted that the Management Rate and actual total expense ratio for the Fund were below the medians and in the first quintile (least expensive) of its Expense Group. The Board also noted that effective December 1, 2017, the Fund implemented a Unified Fee. The Board further noted the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin LibertyQ U.S. Small Cap Equity ETF – The Expense Group for the Fund was comprised of pure-index and strategic beta exchange-traded funds, which included the Fund and eight other small-cap core funds. The Board noted that the Management Rate for the Fund was equal to and the actual total expense ratio for the Fund was less than one basis point above the medians of its Expense Group. The Board also noted that effective December 1, 2017, the Fund implemented a Unified Fee. The Board further noted the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged to review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of
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SHAREHOLDER INFORMATION
this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up-front expenditures by the Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements, notably in the area of cybersecurity protections.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that each Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that any of the Funds will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board also considered the Manager’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board also noted that the Funds commenced operations on April 26, 2017 and that, as of December 31, 2019, the net assets of the Franklin LibertyQ U.S. Mid Cap Equity ETF and the Franklin LibertyQ U.S. Small Cap Equity ETF were $23 million or below, while the net assets of the Franklin LibertyQ U.S. Equity ETF were approximately $1.4 billion. The Board recognized that there would not likely be any economies of scale for these Funds until the Funds’ assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program
In-Kind ETFs
Franklin LibertyQ U.S. Equity ETF
Franklin LibertyQ U.S. Mid Cap Equity ETF
Franklin LibertyQ U.S. Small Cap Equity ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
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SHAREHOLDER INFORMATION
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report Franklin Templeton ETF Trust | ||||||
Investment Manager | Distributor | Investor Services | ||||
Franklin Advisory Services, LLC | Franklin Templeton Distributors, Inc. (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
© 2020 Franklin Templeton Investments. All rights reserved. | ETF3 S 11/20 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2020
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF |
Formerly, Franklin Liberty Intermediate Municipal Opportunities ETF |
Franklin Liberty Federal Tax-Free Bond ETF |
Formerly, Franklin Liberty Municipal Bond ETF |
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
Visit franklintempleton.com/investor/investments-and-solutions/investment-options/etfs/ for fund updates and documents.
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
franklintempleton.com | Semiannual Report | 1 |
SEMIANNUAL REPORT
Municipal Bond Market Overview
Moving into April 2020 and continuing through September 2020, municipal bond market technical conditions improved from the market disruptions that resulted from the partial economic shutdown due to novel coronavirus (COVID-19)-related social-distancing orders. Investor funds that flowed into the market were met with negative net supply of tax-exempt bonds. As a result, ratios of municipal bond versus U.S. Treasury (UST) yields continued to tighten but remained significantly wider than at the beginning of 2020. Municipal issuers projected large deficits reaching into 2021 as revenues from tax receipts and usage fees fall while costs of services increase.
In the six months ending in September, revenue bonds outperformed general obligation securities and lower-quality investment-grade issues outperformed their higher-rated counterparts. Within the revenue bond segments, industrial and hospital bonds were the best performers, while resource recovery and special tax segments lagged.
The Investment Company Institute (ICI) reported net inflows of approximately $6 billion into municipal bond retail vehicles in September 2020. There have been strong inflows of funds into the sector after reporting record outflows in March 2020. For the six-month period, municipal bond retail vehicles had approximately $39 billion of net inflows, according to the ICI.
For the six-month period, investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, posted a +3.99% total return, while USTs, as measured by the Bloomberg Barclays U.S. Treasury Index, posted a +0.65% total return, and investment-grade corporate bonds, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, posted a +10.66% total return.1 All three of these fixed income sectors underperformed U.S. stocks, as measured by the Standard & Poor’s® 500 Index, which posted a +31.31% total return for the period.1
Although the municipal bond market has seen a strong recovery since March, we believe strong technical support should continue as funds flow into the market, with negative net issuance supporting valuations. It is our view that despite the ongoing pandemic and its resulting economic downturn, a second pandemic-related market disruption is unlikely to unfold in the municipal bond market. Most municipalities were in good financial shape entering the COVID-19 shock and backed their municipal bond borrowings with very high security. Additionally, most governments with outstanding
debt have a large variety of revenue sources that enhance the likelihood of meeting their financial obligations. We retain a cautionary stance toward municipal bond credit, where strong ongoing credit research will be critical for those looking to continue capitalizing on opportunities caused by market disruptions, including in sectors that have lagged during the recovery.
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
See www.franklintempletondatasources.com for additional data provider information.
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Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF
Formerly, Franklin Liberty Intermediate Municipal Opportunities ETF
This semiannual report for Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide a high level of current income that is exempt from federal income taxes, including the federal alternative minimum tax, by normally investing at least 80% of its net assets in municipal securities that pay interest free from such taxes.1 The Fund seeks to maintain a dollar-weighted average portfolio maturity (the time in which the debt must be repaid) of three to 10 years, and may invest in municipal securities in any rating category by U.S. nationally recognized rating services (or comparable unrated or short-term rated securities).
Credit Quality Composition* | ||||
9/30/2020 | ||||
Ratings | % of Total Investments | |||
AAA | 5.18% | |||
AA | 16.21% | |||
A | 19.57% | |||
BB | 21.64% | |||
Not Rated | 37.40% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated below BBB-. The Refunded category generally consists of refunded bonds secured by US government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
For the six months under review, the Fund posted cumulative total returns of +4.66% based on market price and net asset value (NAV). In comparison, the Bloomberg Barclays
Municipal 1-15 Year Index posted a +3.87% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
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.
Investment Strategy
We select securities that we believe will provide the best balance between risk and return within the Fund’s range of allowable investments and we typically use a buy-and-hold strategy. The Fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index.
Portfolio Composition | ||||
9/30/2020 | ||||
% of Total Investments* | ||||
Tax Supported Debt | 35.34% | |||
Hospital & Health Care | 19.07% | |||
General Obligation Bonds | 9.67% | |||
Transportation | 7.64% | |||
Utilities | 7.56% | |||
Higher Education | 6.39% | |||
Other Revenue Bonds | 5.12% | |||
Subject to Government Approp. | 4.95% | |||
Housing | 3.83% | |||
Corporate Backed | 0.43% |
*Does not include cash and cash equivalents.
1. Dividends are generally subject to state and local taxes, if any. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.
2. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 14.
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FRANKLIN LIBERTY FEDERAL INTERMEDIATE TAX-FREE BOND OPPORTUNITIES ETF
Manager’s Discussion
The Fund grew significantly during the six-month period, with total assets of $29 million at period-end, while also outperforming its benchmark index. During the period, we found value in securities in the eight- to 15-year maturity range. Given the Fund’s average maturity cannot exceed 10 years, this represented the longer end of our target universe. The average maturity stood at 9.15 years at period end.
We were also able to find attractive opportunities in the high-yield space, so we selectively added higher-yielding securities to the portfolio while selling existing positions with lower yields. The Fund is overweight in BBB rated and below investment-grade securities relative to the benchmark. This positioning was the primary driver of the Fund’s outperformance versus its benchmark, as lower-quality credits significantly outperformed higher-quality credits throughout the period. Credit spreads have consistently tightened after the severe market dislocation and credit spread widening experienced at the end of March.
Given the mandate of the Fund, we will continue to look for opportunities to add high-yielding securities with a focus on the seven- to 15-year part of the yield curve. The Fund does not use leverage or derivatives. We believe our consistent, disciplined strategy can help our investors achieve high, tax-free income over the long term.
Thank you for your participation in Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN LIBERTY FEDERAL INTERMEDIATE TAX-FREE BOND OPPORTUNITIES ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/5/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +4.66% | +4.66% | +4.66% | +4.66% | ||||||||||||
1-Year | +2.44% | +2.24% | +2.44% | +2.24% | ||||||||||||
3-Year | +10.43% | +9.94% | +3.36% | +3.21% | ||||||||||||
Since Inception (8/31/17) | +9.94% | +9.85% | +3.12% | +3.10% |
30-Day Standardized Yield6 | Taxable Equivalent 30-Day Standardized Yield7 | |||||||||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | (with fee waiver) | (without fee waiver) | ||||||||||||
1.92% | 1.84% | 1.23% | 3.11% | 2.08% |
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 6 for Performance Summary footnotes.
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FRANKLIN LIBERTY FEDERAL INTERMEDIATE TAX-FREE BOND OPPORTUNITIES ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.266123 |
Total Annual Operating Expenses8
With Waiver | Without Waiver | |||
0.30% | 1.46% |
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest-rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. The Fund may invest in lower-rated bonds which include higher risk of default and loss of principal. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Taxable equivalent yield assumes the 2020 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN LIBERTY FEDERAL INTERMEDIATE TAX-FREE BOND OPPORTUNITIES 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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,046.60 | $ | 1.54 | $ | 1,023.56 | $ | 1.52 | 0.30 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 7 |
Franklin Liberty Federal Tax-Free Bond ETF
Formerly, Franklin Liberty Municipal Bond ETF
This semiannual report for Franklin Liberty Federal Tax-Free Bond ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide a high level of current income that is exempt from federal income taxes, including the federal alternative minimum tax, by normally investing at least 80% of its net assets in municipal securities that pay interest free from such taxes.1 The Fund seeks to maintain a dollar-weighted average portfolio maturity (the time in which the debt must be repaid) of five to 15 years, and only buys securities rated, at the time of purchase, in one of the top four ratings categories by one or more U.S. nationally recognized rating services (or comparable unrated or short-term rated securities).
Credit Quality Composition* | ||||
9/30/2020 | ||||
Ratings | % of Total Investments | |||
AAA | 25.00% | |||
AA | 58.17% | |||
A | 15.74% | |||
Not Rated | 1.09% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated below BBB-. The Refunded category generally consists of refunded bonds secured by US government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
For the six months under review, the Fund posted cumulative total returns of +3.81% based on market price and +4.05% based on net asset value (NAV). In comparison, the Bloomberg Barclays Municipal Bond Index posted a +3.99% total return for the same period.2 You can find more of the
Fund’s performance data in the Performance Summary beginning on page 10.
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.
Investment Strategy
We select securities that we believe will provide the best balance between risk and return within the Fund’s range of allowable investments and we typically use a buy-and-hold strategy. The Fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index.
Portfolio Composition | ||||
9/30/2020 | ||||
% of Total Investments* | ||||
General Obligation Bonds | 28.68% | |||
Utilities | 22.86% | |||
Tax Supported Debt | 12.46% | |||
Transportation | 10.73% | |||
Higher Education | 8.82% | |||
Hospital & Health Care | 7.01% | |||
Housing | 6.23% | |||
Other Revenue Bonds | 2.42% | |||
Subject to Government Approp. | 0.79% |
*Does not include cash and cash equivalents.
Manager’s Discussion
During the six-month reporting period, the Fund maintained its average maturity near 13 years, on the longer end of the target 5- to 15-year range. The municipal yield curve remains positively sloped and we believe focusing on longer maturities within that range provides us with the best opportunities
1. Dividends are generally subject to state and local taxes, if any. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.
2. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 22.
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FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
to maximize both after-tax income and total return potential. The Fund is highly diversified across multiple metrics, including by individual issuer, sector, state, term structure, and coupon rate. We selectively added high-quality names at attractive spreads as the Fund continued to grow over the six-month period. At period-end, the Fund had grown to $53 million in total assets, which we feel provides exciting momentum for continued asset growth moving forward.
Security selection was a key contributor to the performance of the Fund, which performed in line with its benchmark, and being overweight in bonds with maturities between 12 and 17 years also contributed positively to relative performance. We will continue to look for opportunities to add high quality names at attractive prices with a focus on all parts of the yield curve, while striving to maintain a portfolio average maturity of close to 13 years. The Fund does not use leverage or derivatives. We believe our consistent, disciplined strategy can help our investors achieve high, tax-free income over the long term.
Thank you for your participation in Franklin Liberty Federal Tax-Free Bond ETF. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/5/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +4.05% | +3.81% | +4.05% | +3.81% | ||||||||||||
1-Year | +5.18% | +5.22% | +5.18% | +5.22% | ||||||||||||
3-Year | +16.14% | +15.98% | +5.11% | +5.07% | ||||||||||||
Since Inception (8/31/17) | +15.54% | +15.62% | +4.80% | +4.82% |
30-Day Standardized Yield6 | Taxable Equivalent 30-Day Standardized Yield7 | |||||||||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | (with fee waiver) | (without fee waiver) | ||||||||||||
2.12% | 0.99% | 0.53% | 1.67% | 0.90% |
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 11 for Performance Summary footnotes.
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FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.311475 |
Total Annual Operating Expenses8
With Waiver | Without Waiver | |||
0.30% | 1.00% |
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest-rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Taxable equivalent yield assumes the 2020 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 11 |
FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,040.50 | $ | 1.53 | $ | 1,023.56 | $ | 1.52 | 0.30 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
12 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETFa
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018b | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 24.72 | $ | 24.97 | $ | 24.40 | $ | 25.00 | ||||||||
|
| |||||||||||||||
Income from investment operationsc: | ||||||||||||||||
Net investment incomed | 0.26 | 0.58 | 0.63 | 0.22 | ||||||||||||
Net realized and unrealized gains (losses) | 0.89 | (0.17 | ) | 0.57 | (0.60 | ) | ||||||||||
|
| |||||||||||||||
Total from investment operations | 1.15 | 0.41 | 1.20 | (0.38 | ) | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.27 | ) | (0.66 | ) | (0.63 | ) | (0.22 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 25.60 | $ | 24.72 | $ | 24.97 | $ | 24.40 | ||||||||
|
| |||||||||||||||
Total returne | 4.66% | 1.61% | 4.99% | (1.53)% | ||||||||||||
Ratios to average net assetsf | ||||||||||||||||
Expenses before waiver and payments by affiliates | 1.07% | 1.46% | 2.15% | 1.71% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.30% | ||||||||||||
Net investment income | 2.05% | 2.29% | 2.57% | 1.55% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $29,442 | $12,362 | $7,490 | $7,319 | ||||||||||||
Portfolio turnover rateg | 15.66% | h | 35.28% | h | 35.63% | 17.49% |
aEffective September 14, 2020, Franklin Liberty Intermediate Municipal Opportunities ETF was renamed Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF.
bFor the period August 31, 2017 (commencement of operations) to March 31, 2018.
cThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
dBased on average daily shares outstanding.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 15.66% | 35.28% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 13 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF
Principal Amount* | Value | |||||||||
Municipal Bonds 91.2% | ||||||||||
Alabama 0.4% | ||||||||||
Homewood Educational Building Authority Revenue, Educational Facilities, Samford University, Refunding, Series A, 4.00%, 12/01/33 | 100,000 | $ | 111,014 | |||||||
|
| |||||||||
Alaska 1.0% | ||||||||||
Alaska St Indl Dev & Export Auth Revenue, 4.00%, 4/01/32 | 100,000 | 116,363 | ||||||||
Matanuska-Susitna Borough Lease Revenue, Goose Creek Correctional Center Project, Refunding, 4.00%, 9/01/30 | 150,000 | 165,285 | ||||||||
|
| |||||||||
281,648 | ||||||||||
|
| |||||||||
Arizona 1.9% | ||||||||||
La Paz County IDA Education Facility Lease Revenue, Chartere School Solutions-Harmony Public Schools Project, Series A, 5.00%, 2/15/28 | 100,000 | 113,299 | ||||||||
Maricopa County UHSD No. 210 Phoenix, GO, Series C, 5.00%, 7/01/31 | 170,000 | 224,516 | ||||||||
Phoenix Civic Improvement Corp. Wastewater System Revenue, junior lien, Series A, | 100,000 | 121,771 | ||||||||
Phoenix IDA Student Housing Revenue, Downtown Phoenix Student Housing II LLC, Arizona State University Project, Series A, 5.00%, 7/01/31 | 100,000 | 110,105 | ||||||||
|
| |||||||||
569,691 | ||||||||||
|
| |||||||||
Arkansas 0.8% | ||||||||||
Arkansas Development Finance Authority Healthcare Revenue, Baptist Health, | 100,000 | 116,045 | ||||||||
Arkansas Development Financing Authority Healthcare Revenue, Bapist Memorial Health care Corporation, Refunding, Series B-1, 5.00%, 9/01/32 | 100,000 | 123,863 | ||||||||
|
| |||||||||
239,908 | ||||||||||
|
| |||||||||
California 12.4% | ||||||||||
California School Finance Authority Charter School Revenue, Summit Public Schools-Obligated Group, 5.00%, 6/01/27 | 100,000 | 119,324 | ||||||||
California ST Sch Fin Auth Chrt Sch Revenue, 3.00%, 10/01/30 | 215,000 | 220,235 | ||||||||
California St Stwd Cmntys Dev Auth Spl Tax Revenue, | 110,000 | 123,688 | ||||||||
4.00%, 9/01/30 | 150,000 | 167,101 | ||||||||
4.00%, 9/01/30 | 130,000 | 142,331 | ||||||||
California St Stwd Cmntys Dev Auth Stwd Revenue, 4.00%, 9/02/30 | 250,000 | 273,515 | ||||||||
California State Municipal Finance Authority Revenue, Biola University, Refunding, | 100,000 | 115,933 | ||||||||
a | California State PCFA Solid Waste Disposal Revenue, CalPlant I Projects, Green Bonds, | 250,000 | 163,125 | |||||||
b | California Statewide CDA Revenue, California Baptist University, Refunding, Series A, | 100,000 | 100,127 | |||||||
b | California Statewide CDA Special Tax Revenue, CFD No. 2015-01, Improvement Area No. 2, University District, 5.00%, 9/01/27 | 85,000 | 96,801 | |||||||
Calimesa Ca Spl Tax, 4.00%, 9/01/33 | 150,000 | 167,512 | ||||||||
b | Chino Ca Cmnty Facs Dist Spl Tax, 4.00%, 9/01/30 | 150,000 | 166,212 | |||||||
Corona-Norco Ca Unif Sch Dist Spl Tax, 4.00%, 9/01/34 | 105,000 | 117,196 | ||||||||
Irvine Inified School District Special Tax, Series A, 5.00%, 9/01/32 | 250,000 | 323,525 | ||||||||
Marina Ca Redev Agy Successor Agy Tax Allocation, 4.00%, 9/01/32 | 135,000 | 147,068 | ||||||||
Orange County CFD No. 2017-1 Special Tax, Esencia Village Improvement Area No. 1, Series A, 5.00%, 8/15/28 | 100,000 | 124,065 | ||||||||
Perris Joint Powers Authority Local Agency Revenue, CFD No. 2001-1, Improvement Area Nos. 4 and 5, CFD No. 2005-1, Improvement Area 4, Refunding, Series B, 5.00%, 9/01/25 | 100,000 | 118,439 | ||||||||
Poway USD Special Tax, CFD No. 16, Del Sur East II, Improvement Area A, AGMC Insured, | 250,000 | 325,110 | ||||||||
b | Romoland Ca Sch Dist Spl Tax, 4.00%, 9/01/33 | 140,000 | 156,894 | |||||||
Sacramento Municipal Utility District Revenue, Electric Revenue, Refunding, Series H, | 250,000 | 349,487 | ||||||||
Sierra View Ca Local Hlth Care Dist, 5.00%, 7/01/30 | 100,000 | 124,858 | ||||||||
|
| |||||||||
3,642,546 | ||||||||||
|
|
14 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Colorado 3.9% | ||||||||||
Colorado Health Facilities Authority Revenue, CommonSpirit Health, Refunding, Series A-1, | 160,000 | $ | 198,658 | |||||||
Colorado St Hlth Facs Auth Hosp Revenue, 5.00%, 10/01/32 | 150,000 | 191,645 | ||||||||
Colorado State Health Facilities Authority Hospital Revenue, Christian Living Communities, Refunding and Improvement, 4.00%, 1/01/29 | 100,000 | 107,174 | ||||||||
Denver City and County Co Board of Water Commissioners Water Revenue, Refunding, Series B, 4.00%, 9/15/33 | 250,000 | 311,507 | ||||||||
Regional Transportation District Sales Tax Revenue, FasTracks Project, Refunding, Series A, 5.00%, 11/01/27 | 100,000 | 128,584 | ||||||||
Southglenn Metropolitan District Special Revenue, In the City of Centennial Colorado, Refunding, 5.00%, 12/01/30 | 100,000 | 103,512 | ||||||||
Southlands Metropolitan District No. 1 GO, Aurora, Arapahoe County, Refunding, Series A-1, 3.50%, 12/01/27 | 100,000 | 102,399 | ||||||||
|
| |||||||||
1,143,479 | ||||||||||
|
| |||||||||
Connecticut 1.1% | ||||||||||
Connecticut St Hlth & Eductnl Facs Auth Revenue, Series A, 5.00%, 1/01/30 | 150,000 | 165,231 | ||||||||
Connecticut State HFA Housing Mortgage Finance Program Revnue, Series A, Subseries A-1, 2.875%, 11/15/30 | 150,000 | 159,245 | ||||||||
|
| |||||||||
324,476 | ||||||||||
|
| |||||||||
Delaware 0.3% | ||||||||||
Kent County Student Housing and Dining Facility Revenue, CHF-Dover LLC- Delaware State University Project, Series A, 5.00%, 7/01/29 | 100,000 | 103,431 | ||||||||
|
| |||||||||
Florida 12.6% | ||||||||||
Astonia Cmnty Dev Dist Fl Spl Assmnt, 3.375%, 5/01/30 | 150,000 | 150,701 | ||||||||
Babcock Ranch Cmnty Iep Spl Dist Fl Spl Assmn, 3.00%, 5/01/30 | 50,000 | 50,067 | ||||||||
Babcock Ranch Cmnty Indep Spl Dist FL Spl, 3.00%, 5/01/30 | 145,000 | 145,193 | ||||||||
Belmond Reserve Cdd Fl Spl Assmnt, 3.25%, 5/01/30 | 100,000 | 100,000 | ||||||||
Capital Trust Agy Fl Eductnl Facs Revenue, 4.00%, 8/01/30 | 100,000 | 113,049 | ||||||||
Coral Keys Homes Cmnty Dev Dist Fl Spl Assmnt, 3.125%, 5/01/30 | 165,000 | 166,181 | ||||||||
b | Crestview Fl Ii Cdd Spl Assmnt, 4.00%, 5/01/31 | 126,000 | 137,998 | |||||||
Cypress Bluff Cdd Fl Spl Assmnt, 3.125%, 5/01/30 | 60,000 | 60,344 | ||||||||
Forest Lake Cmnty Dev Dist Fl Spl Assmnt, 3.25%, 5/01/30 | 150,000 | 150,704 | ||||||||
Grand Oaks Cdd Fl Spl Assmnt Revenue, 4.00%, 5/01/30 | 150,000 | 153,780 | ||||||||
Hammock Reserve Cdd Fl Spl Assmnt Revenue, 3.25%, 5/01/30 | 100,000 | 100,000 | ||||||||
Herons Glen Fl Recreation Dist Spl Assmnt, 3.00%, 5/01/32 | 100,000 | 106,760 | ||||||||
Hills Minneola Cmnty Dev Dist Fl Spl Assmnt Revenue, 3.50%, 5/01/31 | 100,000 | 102,432 | ||||||||
Holly Hill Road East CDD Special Assessment, Assessment Area 3 Project, 4.00%, 11/01/25 | 110,000 | 112,273 | ||||||||
Jacksonville Health Care Facilities Revenue, Brooks Rehabilitation, Genesis Health Inc., Obligated Group, Refunding, 5.00%, 11/01/27 | 100,000 | 124,307 | ||||||||
Kindred Fl Cdd Ii Spl Assmnt Revenue, 3.00%, 5/01/30 | 155,000 | 154,997 | ||||||||
Kingman Gate Cdd Special Assessment, 3.125%, 6/15/30 | 110,000 | 112,446 | ||||||||
Lakewood Ranch Fl Stewardship Dist Spl Assmnt Revenue, | 60,000 | 60,222 | ||||||||
3.20%, 5/01/30 | 175,000 | 176,060 | ||||||||
b | Magnolia Park Fl Cdd Spl Assmnt, 4.00%, 5/01/31 | 47,000 | 51,473 | |||||||
Miami Health Facilities Authority Revenue, Miami Jewish Health Systems Inc. Project, Refunding, 5.00%, 7/01/28 | 150,000 | 139,830 | ||||||||
b | Old Hickory Cdd Fl Spl Assmnt Spl Asmt, 3.00%, 6/15/30 | 100,000 | 99,997 | |||||||
Osceola County Transportation Revenue, CABS, Refunding, Series A-2, 10/01/32 | 150,000 | 105,986 | ||||||||
Pine Ridge Plantation Fl Cdd Capital Impt Revenue, 3.30%, 5/01/30 | 150,000 | 151,108 | ||||||||
River Hall Fl Cdd Capital Impt Revenue, 3.25%, 5/01/31 | 100,000 | 100,858 | ||||||||
b | Saddle Creek Preserve Of Polk Cnty Cdd Fl Spl Assmnt, 3.00%, 6/15/30 | 80,000 | 79,598 | |||||||
Sandmine Road Cdd Fl Spl Assmnt, 3.125%, 5/01/30 | 100,000 | 100,676 | ||||||||
b | Sarasota National Fl Cdd Spl Assmnt, 3.50%, 5/01/31 | 100,000 | 104,413 | |||||||
Tampa Capital Important Cigarette Tax Allocation Revenue, CABS, Series A, 9/01/34 | 150,000 | 100,590 | ||||||||
Timber Creek Southwest Cdd Fl Spl Assmnt, 3.00%, 6/15/30 | 150,000 | 150,513 |
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Florida (continued) | ||||||||||
V-dana Cdd Fl Spl Assmnt, 3.50%, 5/01/31 | 150,000 | $ | 152,455 | |||||||
Village CDD No. 13 Special Assessment Revenue, 3.00%, 5/01/29 | 100,000 | 103,590 | ||||||||
|
| |||||||||
3,718,601 | ||||||||||
|
| |||||||||
Georgia 1.2% | ||||||||||
Athens-Clarke County Unified Government Development Authority Revenue, University of Georgia Athletic Assn. Project, Series B, Daily VRDN and Put, 0.09%, 7/01/35 | 100,000 | 100,000 | ||||||||
Georgia Municipal Electric Authority Revenue, Project One, Subordinated, Refunding, Series A, 5.00%, 1/01/33 | 100,000 | 126,874 | ||||||||
Main Street Natural Gas Inc. Gas Supply Revenue, Series A, 5.00%, 5/15/29 | 100,000 | 124,991 | ||||||||
|
| |||||||||
351,865 | ||||||||||
|
| |||||||||
Guam 0.5% | ||||||||||
Guam Govt Wtrwks Auth Wtr & Wstwtr Sys Revenue, 5.00%, 7/01/30 | 125,000 | 149,444 | ||||||||
|
| |||||||||
Illinois 4.0% | ||||||||||
b | Chicago Il Park Dist, Series F-2, 5.00%, 1/01/31 | 100,000 | 121,800 | |||||||
Hillside Tax Increment Revenue, Cook County, Refunding, 5.00%, 1/01/24 | 100,000 | 102,196 | ||||||||
Illinois St, 5.00%, 11/01/29 | 200,000 | 213,236 | ||||||||
Illinois St Fin Auth Revenue, 4.75%, 10/15/40 | 150,000 | 152,705 | ||||||||
Illinois State Finance Authority MFHR, | 100,000 | 60,000 | ||||||||
Better Housing Foundation ERNST Portfolio Project, Series A-1, 4.375%, 12/01/28 | 100,000 | 27,500 | ||||||||
Met Pier & Exposition Auth Il Dedicated St Tax Revenue, | 100,000 | 81,672 | ||||||||
Zero cpn., 12/15/32 | 85,000 | 57,099 | ||||||||
Railsplitter Tobacco Settlement Authority Revenue, 5.00%, 6/01/27 | 100,000 | 121,610 | ||||||||
Southwestern Illinois Development Authority Revenue, Capital Appreciation, Local Government Program, AGMC Insured, zero cpn., 12/01/24 | 245,000 | 233,122 | ||||||||
|
| |||||||||
1,170,940 | ||||||||||
|
| |||||||||
Indiana 0.5% | ||||||||||
Indiana Fin Auth Midwestern Disaster Relief Revenue, 3.00%, 11/01/30 | 150,000 | 149,661 | ||||||||
|
| |||||||||
Kentucky 0.7% | ||||||||||
County of Owen Water Facilities Revenue, Kentucky-American Water Co. Project, Refunding, | 100,000 | 107,617 | ||||||||
Louisville/Jefferson County Metro Government Revenue, College, Bellarmine University Project, Refunding and Improvement, Series A, 4.00%, 5/01/29 | 100,000 | 101,993 | ||||||||
|
| |||||||||
209,610 | ||||||||||
|
| |||||||||
Louisiana 0.8% | ||||||||||
Louisiana Local Government Environmental Facilities and CDA Revenue, Student Housing, Provident Group - ULM Properties LLC - University of Louisiana at Monroe Project, Series A, 5.00%, 7/01/29 | 100,000 | 106,727 | ||||||||
Port New Orleans La Brd Of Commi, Series E, AMT, 5.00%, 4/01/34 | 100,000 | 122,623 | ||||||||
|
| |||||||||
229,350 | ||||||||||
|
| |||||||||
Maryland 1.2% | ||||||||||
Baltimore Special Obligation Revenue, Mayor and City Council of Baltimore, Harbor Point Project, Senior Lien, Refunding, Series A, 3.25%, 6/01/31 | 100,000 | 96,661 | ||||||||
Frederick County Tax Increment and Special Tax B, Limited Obligation, Oakdale-Lake Linganore Project, Refunding, 3.25%, 7/01/29 | 140,000 | 137,326 | ||||||||
Maryland EDC Revenue, Economic Development, Transportation Facilities Project, Refunding, | 100,000 | 116,464 | ||||||||
|
| |||||||||
350,451 | ||||||||||
|
| |||||||||
Massachusetts 1.3% | ||||||||||
Massachusetts St Dev Fin Agy Revenue, 5.00%, 10/01/30 | 200,000 | 265,208 |
16 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Massachusetts (continued) | ||||||||||
Massachusetts State Development Finance Agency Revenue, Foxborough Regional Charter, | 100,000 | $ | 113,161 | |||||||
|
| |||||||||
378,369 | ||||||||||
|
| |||||||||
Michigan 0.3% | ||||||||||
Grand Rapids EDC, EDR, Beacon Hill Eastgate Project, Refunding, Series A, 4.00%, 11/01/27 | 100,000 | 100,488 | ||||||||
|
| |||||||||
Minnesota 1.7% | ||||||||||
Eagan GO, Series A, 4.00%, 2/01/26 | 100,000 | 118,204 | ||||||||
Mille Lacs County GO, Capital Improvement Plan, Series A, 3.00%, 2/01/24 | 135,000 | 146,528 | ||||||||
Northern Municipal Power Agency Electric System Revenue, Refunding, 5.00%, 1/01/36 | 100,000 | 119,400 | ||||||||
St. Louis Park Public Schools ISD No. 283 GO, School Building, Minnesota School District Credit Enhancement Program, Series A, 5.00%, 2/01/25 | 100,000 | 120,211 | ||||||||
|
| |||||||||
504,343 | ||||||||||
|
| |||||||||
Missouri 2.4% | ||||||||||
Cape Girardeau Cnty Mo Indl Dev Auth, 5.00%, 3/01/29 | 130,000 | 144,334 | ||||||||
Curators of the University of Missouri System Facilities Revenue, Series B, 5.00%, 11/01/30 | 250,000 | 343,475 | ||||||||
Maryland Heights Mo Tax Incr & Spl Dist Revenue, 3.625%, 11/01/31 | 100,000 | 100,113 | ||||||||
St. Louis County IDA Senior Living Facilities Revenue, Friendship Village, St. Louis Obligated Group, Refunding, 5.00%, 9/01/27 | 100,000 | 110,300 | ||||||||
|
| |||||||||
698,222 | ||||||||||
|
| |||||||||
Montana 0.4% | ||||||||||
Cascade County High School District No. 1 Great Falls GO, School Building, 5.00%, 7/01/25 | 100,000 | 120,983 | ||||||||
|
| |||||||||
Nevada 1.2% | ||||||||||
Carson City Hospital Revenue, Carson Tahoe Regional Healthcare Project, Refunding, | 115,000 | 138,962 | ||||||||
Las Vegas Special ID No. 812 Special Assessment, Local Improvement, Summerlin Village 24, | 95,000 | 97,609 | ||||||||
Washoe County School District GO, School Improvement, | 100,000 | 123,753 | ||||||||
|
| |||||||||
360,324 | ||||||||||
|
| |||||||||
New Hampshire 0.4% | ||||||||||
New Hampshire State Health and Education Facilities Authority Revenue, University System of New Hampshire Issue, Refunding, Series A, 5.00%, 7/01/27 | 100,000 | 126,277 | ||||||||
|
| |||||||||
New Jersey 4.4% | ||||||||||
New Jersey EDA Revenue, Provident Group-Kean Properties LLC, Kean University Student Housing Project, Series A, 5.00%, 7/01/32 | 100,000 | 97,735 | ||||||||
New Jersey EDA Water Facilities Revenue, American Water Co. Inc., Project, Refunding, | 100,000 | 105,855 | ||||||||
New Jersey St Eductnl Facs Auth Revenue, | 240,000 | 271,226 | ||||||||
New Jersey St Transprtn Trust Fund Auth, | 720,000 | 537,509 | ||||||||
Zero cpn., 12/15/31 | 50,000 | 35,829 | ||||||||
New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, Refunding, Series A, 5.00%, 12/15/28 | 100,000 | 120,506 | ||||||||
Pinelands Regional School District GO, Refunding, AGMC Insured, 3.00%, 8/01/27 | 100,000 | 112,497 | ||||||||
|
| |||||||||
1,281,157 | ||||||||||
|
| |||||||||
New Mexico 1.1% | ||||||||||
Las Cruces School District No. 2 GO, Refunding, 5.00%, 8/01/28 | 250,000 | 319,035 | ||||||||
|
| |||||||||
New York 4.7% | ||||||||||
Met Transprtn Auth Ny Revenue, 5.00%, 11/15/28 | 270,000 | 289,402 |
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
New York (continued) | ||||||||||
MTA Revenue, Transportation, Green Bonds, Climate Bond Certified, | 115,000 | $ | 122,450 | |||||||
Refunding, Series B, 5.00%, 11/15/28 | 400,000 | 430,240 | ||||||||
New York St Transprtn Dev Corpspl Fac Revenue, | 125,000 | 128,005 | ||||||||
5.00%, 7/01/30 | 100,000 | 109,682 | ||||||||
New York State Transportation Development Corpspecial Facilities Revenue, John F. Kennedy International Airport Project, Refunding, 5.25%, 8/01/31 | 100,000 | 103,363 | ||||||||
Triborough Bridge and Tunnel Authority Revenue, General, MTA Bridges and Tunnels, Refunding, Series C, Daily VRDN and Put, 0.12%, 1/01/32 | 200,000 | 200,000 | ||||||||
|
| |||||||||
1,383,142 | ||||||||||
|
| |||||||||
North Carolina 0.4% | ||||||||||
North Carolina State Medical Care Commission Retirement Facilities Revenue, The United Methodist Retirement Homes, first mortgage, Refunding, Series A, 5.00%, 10/01/27 | 100,000 | 109,256 | ||||||||
|
| |||||||||
Ohio 3.4% | ||||||||||
b | Akron Bath Copley Jt Twp Oh Hosp Dist, 4.00%, 11/15/33 | 150,000 | 171,568 | |||||||
Franklin County Convention Facilities Authority Hotel Project Revenue, GRTR Columbus Convention Center Hotel Expense Project, 5.00%, 12/01/30 | 100,000 | 100,048 | ||||||||
Franklin County Hospital Facilities Revenue, Nationwide Children’s Hospital Project, Refunding, Series A, 5.00%, 11/01/28 | 100,000 | 126,564 | ||||||||
Franklin County Revenue, Trinity Health Credit Group, Refunding, Series A, 5.00%, 12/01/31 | 100,000 | 130,127 | ||||||||
Hamilton County Hospital Facilities Revenue, UC Health, 5.00%, 9/15/33 | 100,000 | 125,234 | ||||||||
Ohio St Hosp Revenue, 5.00%, 11/15/33 | 200,000 | 242,914 | ||||||||
Ohio State Air Quality Development Authority Exempt Facilities Revenue, Pratt Paper LLC Project, 3.75%, 1/15/28 | 100,000 | 109,348 | ||||||||
|
| |||||||||
1,005,803 | ||||||||||
|
| |||||||||
Oregon 1.9% | ||||||||||
Medford Or Hosp Facs Auth Revenue, Series A, 5.00%, 8/15/33 | 200,000 | 260,492 | ||||||||
Oregon State Facilities Authority Revenue, PeaceHealth, Refunding, Series B, Daily VRDN and Put, 0.11%, 8/01/34 | 200,000 | 200,000 | ||||||||
Polk Cnty Or Hosp Fac Auth Revenue, 4.00%, 7/01/24 | 100,000 | 100,257 | ||||||||
|
| |||||||||
560,749 | ||||||||||
|
| |||||||||
Pennsylvania 2.6% | ||||||||||
Allegheny County Higher Education Building Authority University Revenue, Robert Morris University, UPMC Events Center Project, 5.00%, 10/15/26 | 100,000 | 108,829 | ||||||||
Allentown Neighborhood Improvement Zone Development Authority Tax Revenue, City Center Project, 5.00%, 5/01/28 | 100,000 | 111,246 | ||||||||
Franklin County IDAR, Menno Haven Inc. Project, Refunding, 5.00%, 12/01/28 | 100,000 | 111,431 | ||||||||
Luzerne County IDA Revenue, Pennsylvania-American Water Co. Project, Refunding, | 100,000 | 108,556 | ||||||||
Pennsylvania State Economic Development Financing Authority Revenue, UPMC, | 125,000 | 134,481 | ||||||||
Philadelphia Pa Auth For Indl Dev Chrt Sch Revenue, 5.00%, 8/01/30 | 150,000 | 179,211 | ||||||||
|
| |||||||||
753,754 | ||||||||||
|
| |||||||||
Puerto Rico 4.1% | ||||||||||
Puerto Rico Infrastructure Fing Auth Spl Tax Revenue, | 320,000 | 216,845 | ||||||||
5.50%, 7/01/27 | 100,000 | 109,117 | ||||||||
Puerto Rico Sales Tax FICO Sales Tax Revenue, Restructured, Series A-1, 0.01%, 7/01/31 | 1,202,000 | 878,938 | ||||||||
|
| |||||||||
1,204,900 | ||||||||||
|
| |||||||||
South Carolina 0.4% | ||||||||||
Patriots Energy Group Revenue, Gas System Improvement, Refunding, 4.00%, 6/01/33 | 100,000 | 114,300 | ||||||||
|
|
18 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Tennessee 1.2% | ||||||||||
Lawrenceburg GO, Refunding, 2.50%, 6/01/27 | 100,000 | $ | 104,475 | |||||||
Metropolitan Government of Nashville and Davidson County GO, Improvement, Refunding, 4.00%, 7/01/29 | 100,000 | 120,096 | ||||||||
Metropolitan Nashville Airport Authority Revenue, Subordinate, Series B, 5.00%, 7/01/30 | 100,000 | 127,686 | ||||||||
|
| |||||||||
352,257 | ||||||||||
|
| |||||||||
Texas 8.9% | ||||||||||
Arlington Higher Education Finance Corp. Education Revenue, Riverwalk Education Foundation Inc., PSF Guarantee, 4.00%, 8/15/33 | 100,000 | 120,284 | ||||||||
Cedar Park GO, Williamson and Travis Counties, Refunding and Improvement, 5.00%, 2/15/24 | 100,000 | 115,787 | ||||||||
Celina Tx Spl Assessment Revenue, | 150,000 | 150,516 | ||||||||
3.625%, 9/01/30 | 125,000 | 125,715 | ||||||||
4.00%, 9/01/30 | 190,000 | 213,942 | ||||||||
Ector Cnty Tx Hosp Dist, 5.00%, 9/15/31 | 100,000 | 123,754 | ||||||||
Garland GO, Dallas Collin and Rockwall Counties, Refunding, 5.00%, 2/15/27 | 100,000 | 127,033 | ||||||||
Horseshoe Bay Tx Sp Assmnt Revenue, 3.00%, 10/01/30 | 140,000 | 140,598 | ||||||||
Lago Vista Tex Spl Assmt Rev, | 130,000 | 131,773 | ||||||||
5.00%, 9/01/30 | 140,000 | 139,345 | ||||||||
Leander Tx Spl Assmnt Revenue, 3.25%, 9/01/32 | 100,000 | 104,111 | ||||||||
b | Liberty Hill Tx Spl Assmnt Revenue, 3.125%, 9/01/30 | 75,000 | 75,315 | |||||||
New Hope Cultural Edu Facs Fin Corp Tx Student Hsg Rev., | 80,000 | 78,420 | ||||||||
5.00%, 4/01/31 | 30,000 | 28,859 | ||||||||
New Hope Cultural Education Facilities Finance Corp. Retirement Facility Revenue, Wesleyan Homes Inc. Project, Refunding, 4.00%, 1/01/29 | 100,000 | 98,613 | ||||||||
New Hope Cultural Education Facilities Finance Corp. Student Housing Revenue, | 100,000 | 98,934 | ||||||||
CHF-Collegiate Housing College Station I LLC, Texas A&M University Project, Series A, 5.00%, 4/01/29 | 100,000 | 101,053 | ||||||||
Port Freeport Revenue, Brazoria County, senior lien, Series A, 5.00%, 6/01/31 | 100,000 | 126,558 | ||||||||
Princeton Special Assessment Revenue, Winchester Public Improvement District Phase 1 and 2 Project, 3.25%, 9/01/30 | 100,000 | 103,925 | ||||||||
Royse City Tx Spl Assmnt Revenue, 3.125%, 9/15/25 | 150,000 | 151,245 | ||||||||
Tomball Tx Spl Assmnt Revenue, 3.375%, 9/15/30 | 100,000 | 100,275 | ||||||||
Viridian Tx Muni Mgmt Dist Assmnt Revenue, | 65,000 | 64,902 | ||||||||
2.875%, 12/01/30 | 100,000 | 100,142 | ||||||||
|
| |||||||||
2,621,099 | ||||||||||
|
| |||||||||
Utah 0.7% | ||||||||||
Provo GO, Refunding, 4.00%, 1/01/23 | 100,000 | 108,664 | ||||||||
Utah State Building Ownership Authority Lease Revenue, State Facilities Master Lease Program, 2.50%, 5/15/27 | 100,000 | 107,062 | ||||||||
|
| |||||||||
215,726 | ||||||||||
|
| |||||||||
Vermont 0.4% | ||||||||||
Vermont State Public Power Supply Authority Revenue, Swanton Peaking Facility Project, Refunding, Series A, 5.00%, 7/01/28 | 100,000 | 122,585 | ||||||||
|
| |||||||||
Virginia 0.3% | ||||||||||
Peninsula Town Center CDA Special Obligation Revenue, Refunding, 4.50%, 9/01/28 | 100,000 | 102,971 | ||||||||
|
| |||||||||
Washington 2.4% | ||||||||||
Seattle Drainage and Wastewater System Revenue, Improvement and Refunding, | 100,000 | 121,408 |
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Washington (continued) | ||||||||||
Skagit County Public Hospital District No. 1 Revenue, Improvement, Skagit Regional Health, Refunding, 5.00%, 12/01/29 | 100,000 | $ | 115,382 | |||||||
Spokane County School District No. 356 Central Valley GO, 5.00%, 12/01/26 | 100,000 | 127,161 | ||||||||
University of Washington Revenue, General, Refunding, Series A, 5.00%, 12/01/26 | 100,000 | 126,744 | ||||||||
Washington St Hsg Fin Commission, 5.00%, 1/01/32 | 100,000 | 105,574 | ||||||||
b | Washington State Housing Finance Commission Revenue, Nonprofit Housing, Presbyterian Retirement Communities Northwest Project, Refunding, Series A, 5.00%, 1/01/34 | 100,000 | 108,447 | |||||||
|
| |||||||||
704,716 | ||||||||||
|
| |||||||||
Wisconsin 3.3% | ||||||||||
Brookfield GO, Waukesha County, Refunding, 3.00%, 12/01/25 | 115,000 | 129,953 | ||||||||
PFA Retirement Facilities Revenue, Whitestone Retirement Facilities, first mortgage, Refunding, 4.00%, 3/01/27 | 75,000 | 77,354 | ||||||||
PFAR, Retirement Facilities, Friends Homes, Refunding, 4.00%, 9/01/29 | 100,000 | 111,613 | ||||||||
PFAR, Ultimate Medical Academy Project, Refunding, Series A, 5.00%, 10/01/29 | 100,000 | 109,551 | ||||||||
Public Fin Auth Wi Hlthcare Facs Revenue, 5.00%, 1/01/30 | 250,000 | 321,175 | ||||||||
Public Fin Auth Wi Revenue, 5.00%, 10/01/24 | 100,000 | 106,588 | ||||||||
Wisconsin Health and Educational Facilities Authority Revenue, St. Johns Communities Inc. Project, Series A, 4.00%, 9/15/27 | 100,000 | 103,148 | ||||||||
|
| |||||||||
959,382 | ||||||||||
|
| |||||||||
Total Investments (Cost $26,396,908) 91.2% | 26,845,953 | |||||||||
Other Assets, less Liabilities 8.8% | 2,596,144 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 29,442,097 | ||||||||
|
|
See Abbreviations on page 37.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSee Note 7 regarding defaulted securities.
bSecurity purchased on a when-issued basis. See Note 1(b)
20 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty Federal Tax-Free Bond ETFa
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018b | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 26.07 | $ | 25.20 | $ | 24.34 | $ | 25.00 | ||||||||
|
| |||||||||||||||
Income from investment operationsc: | ||||||||||||||||
Net investment incomed | 0.23 | 0.46 | 0.67 | 0.30 | ||||||||||||
Net realized and unrealized gains (losses) | 0.82 | 1.02 | 0.85 | (0.66 | ) | |||||||||||
|
| |||||||||||||||
Total from investment operations | 1.05 | 1.48 | 1.52 | (0.36 | ) | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.31 | ) | (0.61 | ) | (0.66 | ) | (0.30 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 26.81 | $ | 26.07 | $ | 25.20 | $ | 24.34 | ||||||||
|
| |||||||||||||||
Total returne | 4.05% | 5.92% | 6.38% | (1.45)% | ||||||||||||
Ratios to average net assetsf | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.82% | 1.00% | 2.05% | 1.71% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.30% | ||||||||||||
Net investment income | 1.70% | 1.77% | 2.74% | 2.11% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $52,282 | $28,674 | $8,820 | $7,302 | ||||||||||||
Portfolio turnover rateg | 2.83% | h | 17.21% | h | 21.21% | 5.00% |
aEffective September 14, 2020, Franklin Liberty Municipal Bond ETF was renamed Franklin Liberty Federal Tax-Free Bond ETF.
bFor the period August 31, 2017 (commencement of operations) to March 31, 2018.
cThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
dBased on average daily shares outstanding.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 2.83% | 17.21% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 21 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty Federal Tax-Free Bond ETF
Principal Amount* | Value | |||||||||
Municipal Bonds 99.2% | ||||||||||
Alabama 0.6% | ||||||||||
Huntsville GO, wts., Series A, 5.00%, 5/01/37 | 250,000 | $ | 323,190 | |||||||
|
| |||||||||
Alaska 1.4% | ||||||||||
Alaska State Municipal Bond Bank Authority Revenue, Refunding One, 5.00%, 12/01/31 | 425,000 | 554,323 | ||||||||
Matanuska-Susitna Borough Lease Revenue, Goose Creek Correctional Center Project, Refunding, 4.00%, 9/01/30 | 150,000 | 165,285 | ||||||||
|
| |||||||||
719,608 | ||||||||||
|
| |||||||||
Arizona 3.5% | ||||||||||
Arizona Board of Regents University of Arizona System Revenue, Refunding, 5.00%, 6/01/37 | 545,000 | 650,637 | ||||||||
Maricopa County UHSD No. 210 Phoenix, GO, Series C, 4.00%, 7/01/36 | 455,000 | 543,357 | ||||||||
Phoenix Civic Improvement Corp. Wastewater System Revenue, junior lien, Series A, | 100,000 | 121,771 | ||||||||
Salt River Project Agricultural Improvement and Power District Electric System Revenue, Salt River Project, Refunding, Series A, 5.00%, 1/01/39 | 315,000 | 393,791 | ||||||||
Scottsdale Municipal Property Corp. Excise Tax Revenue, | 100,000 | 141,273 | ||||||||
|
| |||||||||
1,850,829 | ||||||||||
|
| |||||||||
California 6.9% | ||||||||||
Burbank RDA Successor Agency Tax Allocation Revenue, Los Angeles County, | 100,000 | 107,234 | ||||||||
California State GO, Various Purpose, Refunding, 3.00%, 10/01/37 | 1,000,000 | 1,093,140 | ||||||||
Clovis USD, GO, Capital Appreciation, Refunding, zero cpn., 8/01/35 | 200,000 | 131,046 | ||||||||
Konocti USD, GO, Capital Appreciation, Election of 2004, Series C, AGMC Insured, | 150,000 | 128,344 | ||||||||
Los Angeles Department of Water and Power Revenue, Power System, Refunding, Series D, 5.00%, 7/01/31 | 400,000 | 522,880 | ||||||||
Perris Joint Powers Authority Local Agency Revenue, CFD No. 2001-1, Improvement Area Nos. 4 and 5, CFD No. 2005-1, Improvement Area 4, Refunding, Series B, 5.00%, 9/01/37 | 100,000 | 115,942 | ||||||||
Sacramento Muni Utility District, Electric Revenue, Refunding, Series H, 5.00%, 8/15/38 | 500,000 | 666,585 | ||||||||
Sierra View Local Health Care District, 4.00%, 7/01/26 | 500,000 | 570,145 | ||||||||
South Tahoe Joint Powers Financing Authority Lease Revenue, Redevelopment Project Area No. 1, Series A, BAM Insured, 5.00%, 10/01/30 | 100,000 | 124,447 | ||||||||
University of California Revenue, Limited Project, Series M, 5.00%, 5/15/34 | 100,000 | 124,360 | ||||||||
|
| |||||||||
3,584,123 | ||||||||||
|
| |||||||||
Colorado 2.1% | ||||||||||
Adams and Weld Counties School District No. 27J Brighton GO, The City and County of Broomfield, 5.00%, 12/01/42 | 100,000 | 124,460 | ||||||||
Cherry Creek School District No. 5 GO, Arapahoe County, Refunding, Series C, 5.00%, 12/15/35 | 100,000 | 126,306 | ||||||||
Colorado Springs Utilities System Revenue, Refunding, Series A, 4.00%, 11/15/33 | 100,000 | 118,472 | ||||||||
Colorado State Board of Governors University Enterprise System Revenue, Refunding, Series A, 4.00%, 3/01/35 | 115,000 | 132,805 | ||||||||
Colorado Water Resources and Power Development Authority State Revolving Fund Revenue, Series A, 4.00%, 9/01/31 | 150,000 | 187,548 | ||||||||
Greeley Water Revenue, Water Enterprise, 4.00%, 8/01/31 | 100,000 | 120,913 | ||||||||
Westminster Water and Wstwtr Utility Enterprise Revenue, Refunding, 5.00%, 12/01/30 | 200,000 | 274,752 | ||||||||
|
| |||||||||
1,085,256 | ||||||||||
|
| |||||||||
Connecticut 1.6% | ||||||||||
Connecticut State Health and Educational Facilities Authority Revenue, | ||||||||||
Yale New Haven Health Issue, Series B, 1.80%, 7/01/49 | 225,000 | 234,032 | ||||||||
Yale University Issue, Series V-2, Daily VRDN and Put, .05%, 7/01/36 | 200,000 | 200,000 | ||||||||
Connecticut State Special Tax Obligation Revenue, Series A, 5.00%, 8/01/31 | 320,000 | 380,454 | ||||||||
|
| |||||||||
814,486 | ||||||||||
|
|
22 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Tax-Free Bond ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Delaware 1.5% | ||||||||||
Delaware Transportation Auth. Sys. Revenue, 4.00%, 7/01/37 | 365,000 | $ | 443,796 | |||||||
University of Delaware Revenue, 5.00%, 11/01/37 | 250,000 | 321,268 | ||||||||
|
| |||||||||
765,064 | ||||||||||
|
| |||||||||
District of Columbia 1.3% | ||||||||||
District of Columbia Income Tax Secured Revenue, Series A, 5.00%, 3/01/33 | 500,000 | 660,560 | ||||||||
|
| |||||||||
Florida 6.5% | ||||||||||
Florida State Turnpike Authority Revenue, Refunding, Series A, 3.00%, 7/01/36 | 650,000 | 725,549 | ||||||||
Fort Myers Utility System Revenue, Refunding, Series A, 4.00%, 10/01/34 | 500,000 | 597,660 | ||||||||
Gainesville Utilities System Revenue, Series A, 5.00%, 10/01/36 | 250,000 | 310,823 | ||||||||
Miami-Dade County Transit System Sales Surtax Revenue, Refunding, 4.00%, 7/01/36 | 600,000 | 712,212 | ||||||||
Pasco County GO, Fire-Rescue Projects Improvements, Series B, 5.00%, 10/01/36 | 455,000 | 590,112 | ||||||||
Sarasota County Capital Import, Revenue, 5.00%, 10/01/34 | 250,000 | 324,390 | ||||||||
Sarasota County Utility System Revenue, Refunding, Series A, 5.00%, 10/01/34 | 100,000 | 129,778 | ||||||||
|
| |||||||||
3,390,524 | ||||||||||
|
| |||||||||
Georgia 3.1% | ||||||||||
Atlanta Airport Revenue, General, Series A, 5.00%, 7/01/34 | 175,000 | 223,552 | ||||||||
Cobb Cnty. Kennestone Hospital Auth., 3.00%, 4/01/37 | 710,000 | 749,221 | ||||||||
Coweta County Water and Sewage Authority Revenue, Refunding, 4.00%, 6/01/35 | 100,000 | 119,808 | ||||||||
Main Street Natural Gas Inc. Gas Supply Revenue, | ||||||||||
Series A, 4.00%, 4/01/48 | 100,000 | 109,411 | ||||||||
Sub-series B, Monthly VRDN and Put, .854%, 4/01/48 | 425,000 | 424,647 | ||||||||
|
| |||||||||
1,626,639 | ||||||||||
|
| |||||||||
Hawaii 0.5% | ||||||||||
Hawaii State Highway Revenue, Refunding, Series B, 5.00%, 1/01/29 | 210,000 | 259,883 | ||||||||
|
| |||||||||
Illinois 0.6% | ||||||||||
Illinois State Finance Authority Revenue, Field Museum of Natural History, Refunding, Mandatory Put, 0.606%, 11/01/34 | 295,000 | 291,838 | ||||||||
|
| |||||||||
Indiana 0.6% | ||||||||||
East Allen Multi School Building Corp. Revenue, Allen County, Ad Valorem Property Tax, first mortgage, 5.00%, 1/15/38 | 250,000 | 304,040 | ||||||||
|
| |||||||||
Kansas 0.2% | ||||||||||
Douglas County USD No. 497 GO, Series A, 3.50%, 9/01/32 | 100,000 | 111,868 | ||||||||
|
| |||||||||
Louisiana 3.4% | ||||||||||
Consolidated Govt of City of Baton Rouge & Parish of E Baton Rouge Sales Tax, 5.00%, 8/01/30 | 250,000 | 334,410 | ||||||||
Louisiana GO, Series B, 4.00%, 10/01/34 | 240,000 | 279,214 | ||||||||
Terrebonne Levee & Conservation Dist., 4.00%, 6/01/39 | 1,000,000 | 1,141,860 | ||||||||
|
| |||||||||
1,755,484 | ||||||||||
|
| |||||||||
Maine 1.4% | ||||||||||
Maine Municipal Bond Bank Revenue, Series C, 5.00%, 11/01/31 | 135,000 | 171,873 | ||||||||
Maine State Housing Authority Mortgage Purchase Revenue, Series F, 3.85%, 11/15/33 | 500,000 | 564,035 | ||||||||
|
| |||||||||
735,908 | ||||||||||
|
| |||||||||
Maryland 2.1% | ||||||||||
Maryland State GO, State and Local Facilities Loan, First Series, 5.00%, 3/15/32 | 135,000 | 178,396 | ||||||||
Prince George’s County GO, Consolidated Public Improvement, Series A, 3.00%, 9/15/32 | 100,000 | 111,627 | ||||||||
State of Maryland, 5.00%, 8/01/28 | 600,000 | 797,214 | ||||||||
|
| |||||||||
1,087,237 | ||||||||||
|
| |||||||||
Massachusetts 7.8% | ||||||||||
Braintree GO, municipal Purpose Loan of 2019, Refunding, 4.00%, 6/01/32 | 250,000 | 302,715 | ||||||||
Massachusetts Bay Transportation Authority Sales Tax Revenue, Sustainability Bonds, Subordinate, Series A, Subseries A-1, 5.00%, 7/01/33 | 100,000 | 124,811 |
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Tax-Free Bond ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Massachusetts (continued) | ||||||||||
Massachusetts Dev. Finance Agcy. Revenue, 5.00%, 7/01/34 | 490,000 | $ | 578,175 | |||||||
Massachusetts State Development Finance Agency Revenue, Worcester Polytechnic Institute Issue, | 400,000 | 443,204 | ||||||||
Massachusetts State GO, | 550,000 | 713,883 | ||||||||
Series G, 5.00%, 7/01/37 | 350,000 | 463,334 | ||||||||
Massachusetts Water Res. Auth., 5.00%, 8/01/36 | 1,000,000 | 1,340,880 | ||||||||
University of Massachusetts Building Authority Revenue, Refunding, | 100,000 | 131,420 | ||||||||
|
| |||||||||
4,098,422 | ||||||||||
|
| |||||||||
Michigan 3.2% | ||||||||||
Lansing Board of Water and Light Utility System Revenue, Series A, 5.00%, 7/01/35 | 225,000 | 293,339 | ||||||||
State of Michigan Trunk Line, 5.00%, 11/15/32 | 1,000,000 | 1,358,640 | ||||||||
|
| |||||||||
1,651,979 | ||||||||||
|
| |||||||||
Minnesota 6.3% | ||||||||||
Center City Health Care Facilities Revenue, Hazelden Betty Ford Foundation Project, Refunding, 4.00%, 11/01/34 | 125,000 | 139,782 | ||||||||
Dakota Cnty. Community Dev. Agcy., 5.00%, 1/01/28 | 1,000,000 | 1,302,850 | ||||||||
Minnesota Housing Finance Agcy., 4.00%, 8/01/29 | 500,000 | 624,625 | ||||||||
Minnesota State HFAR, State Appropriation Bonds, Housing Infrastructure, | 250,000 | 300,985 | ||||||||
Minnesota State Higher Education Facilities Authority Revenue, Macalester College, Refunding, 3.00%, 3/01/35 | 500,000 | 535,145 | ||||||||
Northern Municipal Power Agency Electric System Revenue, Refunding, 5.00%, 1/01/36 | 100,000 | 119,400 | ||||||||
Southern Minnesota Municipal Power Agency Power Supply System Revenue, 5.00%, 1/01/31 | 100,000 | 125,911 | ||||||||
University of Minnesota GO, Series A, 5.00%, 9/01/42 | 100,000 | 121,495 | ||||||||
|
| |||||||||
3,270,193 | ||||||||||
|
| |||||||||
Missouri 3.2% | ||||||||||
Curators of the University of Missouri System Facilities Revenue, Series B, 5.00%, 11/01/30 | 500,000 | 686,950 | ||||||||
Missouri State Health and Educational Facilities Authority Health Facilities Revenue, St. Luke’s Episcopal- Presbyterian Hospitals, 4.00%, 12/01/35 | 755,000 | 866,325 | ||||||||
Platte County School District Park Hill GO, Direct Deposit Program, 3.00%, 3/01/33 | 100,000 | 107,869 | ||||||||
|
| |||||||||
1,661,144 | ||||||||||
|
| |||||||||
Montana 0.2% | ||||||||||
Cascade County High School District No. 1 Great Falls GO, School Building, 5.00%, 7/01/25 | 100,000 | 120,983 | ||||||||
|
| |||||||||
Nevada 1.3% | ||||||||||
Clark County School District GO, Building, Refunding, Series A, 5.00%, 6/15/26 | 100,000 | 121,923 | ||||||||
Las Vegas GO, Limited Tax, Various Purpose, Refunding, Series C, 4.00%, 6/01/32 | 500,000 | 573,140 | ||||||||
|
| |||||||||
695,063 | ||||||||||
|
| |||||||||
New Hampshire 0.2% | ||||||||||
New Hampshire State Health and Education Facilities Authority Revenue, University System of New Hampshire Issue, Refunding, Series A, 5.00%, 7/01/27 | 100,000 | 126,277 | ||||||||
|
| |||||||||
New Jersey 1.5% | ||||||||||
New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, Capital Appreciation, Series C, AGMC Insured, zero cpn., 12/15/29 | 870,000 | 693,355 | ||||||||
Pinelands Regional School District GO, Refunding, AGMC Insured, 3.00%, 8/01/27 | 100,000 | 112,497 | ||||||||
|
| |||||||||
805,852 | ||||||||||
|
| |||||||||
New Mexico 0.2% | ||||||||||
Santa Fe Net Wastewater Utility System/ Environmental Services Gross Receipts Tax Improvement Revenue, Climate Bond Certified, Green Bonds, BAM Insured, 4.00%, 6/01/35 | 100,000 | 116,867 | ||||||||
|
|
24 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Tax-Free Bond ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
New York 6.4% | ||||||||||
City of New York NY, 5.00%, 4/01/37 | 500,000 | $ | 603,650 | |||||||
Long Island Power Authority Electric System Revenue, General, Series A, 5.00%, 9/01/28 | 300,000 | 394,206 | ||||||||
MTA Revenue, Transportation, Green Bonds, Climate Bond Certified, Refunding, | 100,000 | 107,560 | ||||||||
New York City GO, Fiscal 2018, Series B, Subseries B-1, 4.00%, 10/01/36 | 100,000 | 113,242 | ||||||||
New York City Transitional Finance Authority Revenue, Future Tax Secured, Subordinate, Fiscal 2018, Series B, Subseries B-1, 5.00%, 8/01/34 | 100,000 | 124,308 | ||||||||
New York State Dormitory Authority Revenues, Rochester Institute of Technology, | 300,000 | 377,547 | ||||||||
New York State Dormitory Authority Revenues, Non-State Supported Debt, School Districts, Financing Program, Refunding, Series G, BAM Insured, 3.00%, 10/01/33 | 100,000 | 105,144 | ||||||||
New York State Dormitory Authority Sales Tax Revenue, Series A, 5.00%, 3/15/33 | 670,000 | 838,264 | ||||||||
New York State Urban Dev. Corp., 5.00%, 3/15/31 | 630,000 | 698,330 | ||||||||
|
| |||||||||
3,362,251 | ||||||||||
|
| |||||||||
North Carolina 0.4% | ||||||||||
University of North Carolina at Charlotte Revenue,, General, Board of Governors | 100,000 | 115,764 | ||||||||
Winston-Salem City Water and Sewer System Revenue, 4.00%, 6/01/33 | 100,000 | 118,235 | ||||||||
|
| |||||||||
233,999 | ||||||||||
|
| |||||||||
Ohio 4.6% | ||||||||||
American Municipal Power Inc. Revenue, Prairie State Energy Campus Project, Refunding, 5.00%, 2/15/33 | 400,000 | 525,240 | ||||||||
Columbus GO, Series A, 3.00%, 4/01/28 | 100,000 | 113,980 | ||||||||
Franklin County Hospital Facilities Revenue, Nationwide Children’s Hospital Project, | 50,000 | 54,435 | ||||||||
Franklin County Sales Tax Revenue, Various Purpose, | 450,000 | 560,223 | ||||||||
Hudson City School District GO, School Improvement, | 100,000 | 115,149 | ||||||||
Licking Heights Local School District GO, School Facilities Construction and Improvement, | 100,000 | 125,205 | ||||||||
Northeast Regional Sewer District Revenue, | 500,000 | 562,575 | ||||||||
Wastewater Improvement, Refunding, 4.00%, 11/15/34 | 100,000 | 118,599 | ||||||||
Ohio State GO, Highway Capital Improvements, Full Faith and Credit/Highway User Receipts, | 100,000 | 112,526 | ||||||||
Ohio State Water Development Authority Revenue, Community Assistance, | 100,000 | 128,451 | ||||||||
|
| |||||||||
2,416,383 | ||||||||||
|
| |||||||||
Oklahoma 1.9% | ||||||||||
Oklahoma City GO, | 500,000 | 585,100 | ||||||||
Oklahoma State Water Resources Board Loan Program Revnue, | 400,000 | 401,960 | ||||||||
|
| |||||||||
987,060 | ||||||||||
|
| |||||||||
Oregon 4.0% | ||||||||||
City of Beaverton Water Revenue, | 500,000 | 662,645 | ||||||||
Clackamas County School District No. 7J Lake Oswego GO, Multnomah and Washington Counties, | 310,000 | 394,472 | ||||||||
Marion and Polk Countys or School District No. 24J Salem, | 500,000 | 614,580 | ||||||||
Oregon State Housing and Community Services Department Mortgage Revenue, | 90,000 | 97,541 |
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Tax-Free Bond ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Oregon (continued) | ||||||||||
Portland Community College District GO, Multnomah Washington Yamhill Clackamas and Columbia Counties, Refunding, 5.00%, 6/15/25 | 100,000 | $ | 121,846 | |||||||
Washington County GO, Full Faith and Credit Obligations, Series B, 5.00%, 3/01/25 | 175,000 | 211,080 | ||||||||
|
| |||||||||
2,102,164 | ||||||||||
|
| |||||||||
Pennsylvania 0.9% | ||||||||||
Pennsylvania State Economic Development Financing Authority Revenue, UPMC, Refunding, Series A, 3.375%, 11/15/33 | 125,000 | 134,481 | ||||||||
Pennsylvania State University Revenue, | 250,000 | 322,278 | ||||||||
|
| |||||||||
456,759 | ||||||||||
|
| |||||||||
Tennessee 2.2% | ||||||||||
Chattanooga Health Educational and Housing Facility Board Revenue, Commonspirit Health, Refunding, Series A-1, 5.00%, 8/01/25 | 250,000 | 295,415 | ||||||||
Kingsport GO, Series B, 3.00%, 3/01/35 | 130,000 | 137,251 | ||||||||
Lawrenceburg GO, Refunding, 2.50%, 6/01/27 | 100,000 | 104,475 | ||||||||
Metropolitan Government of Nashville and Davidson County GO, Improvement, Refunding, 4.00%, 7/01/29 | 100,000 | 120,096 | ||||||||
Metropolitan Government of Nashville and Davidson County Water and Sewer Revenue, Green Bonds, Subordinate, Refunding, Series A, 5.00%, 7/01/36 | 100,000 | 123,383 | ||||||||
Tennessee HDA Residential Finance Program Revenue, Issue 2019-2, Refunding, 1.95%, 1/01/26 | 250,000 | 263,150 | ||||||||
Tennessee State School Bond Authority Revenue, Higher Educational Facilities Second Program, Series A, 5.00%, 11/01/37 | 100,000 | 124,613 | ||||||||
|
| |||||||||
1,168,383 | ||||||||||
|
| |||||||||
Texas 9.1% | ||||||||||
Central Texas Regional Mobility Auth. Revenue, 5.00%, 1/01/33 | 400,000 | 508,180 | ||||||||
Cypress-Fairbanks Independent School Dist., 4.00%, 2/15/34 | 750,000 | 932,835 | ||||||||
El Paso Water and Sewer Revenue, Refunding and Improvement, 4.00%, 3/01/33 | 100,000 | 116,016 | ||||||||
Fort Worth Water and Sewer Revenue, System, 5.00%, 2/15/32 | 295,000 | 377,105 | ||||||||
Lamar Consolidated ISD, GO, Fort Bend County, School House, PSF Guarantee, 4.00%, 2/15/30 | 600,000 | 748,200 | ||||||||
Lewisville Independance School District GO, Refunding, 5.00%, 8/15/32 | 750,000 | 997,215 | ||||||||
Pflugerville ISD, GO, Series A, PSF Guarantee, 5.00%, 2/15/29 | 100,000 | 130,267 | ||||||||
Round Rock Utility Revenue, Refunding, 2.75%, 8/01/29 | 100,000 | 108,534 | ||||||||
Texas A&M University System Board of Regents Revenue, Financing System, Refunding, Series C, 5.00%, 5/15/33 | 100,000 | 125,147 | ||||||||
Texas State Water Development Board Revenue, | 500,000 | 593,085 | ||||||||
State Water Implementation Fund, Master Trust, Series A, 4.00%, 10/15/33 | 115,000 | 137,227 | ||||||||
|
| |||||||||
4,773,811 | ||||||||||
|
| |||||||||
Utah 2.9% | ||||||||||
Provo GO, Refunding, 4.00%, 1/01/23 | 100,000 | 108,664 | ||||||||
South Jordan Sales Tax Revenue, Refunding, 5.00%, 8/15/38 | 325,000 | 418,889 | ||||||||
Utah State Building Ownership Authority Lease Revenue, State Facilities Master Lease Program, | 100,000 | 107,062 | ||||||||
Utah State Water Finance Agency Revenue, Loan Financing Program, | 200,000 | 255,350 | ||||||||
Utah Transit Auth., Sales Tax Revenue, 5.00%, 6/15/29 | 500,000 | 600,410 | ||||||||
|
| |||||||||
1,490,375 | ||||||||||
|
| |||||||||
Virginia 2.0% | ||||||||||
Arlington County GO, Public Improvement, 4.00%, 6/15/35 | 500,000 | 611,180 | ||||||||
Henrico County Water and Sewer System Revenue, Refunding, 4.00%, 5/01/32 | 250,000 | 307,070 |
26 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Federal Tax-Free Bond ETF (continued)
Principal Amount* | Value | |||||||||
Municipal Bonds (continued) | ||||||||||
Virginia (continued) | ||||||||||
Virginia College Building Authority Educational Facilities Revenue, Public Higher Education Financing Program, Series A, 5.00%, 9/01/32 | 100,000 | $ | 129,790 | |||||||
|
| |||||||||
1,048,040 | ||||||||||
|
| |||||||||
Washington 3.4% | ||||||||||
King and Snohomish Counties School District No 417 Northshore GO, 5.00%, 12/01/31 | 100,000 | 129,667 | ||||||||
Seattle Drainage and Wastewater Revenue, Refunding, 4.00%, 4/01/31 | 125,000 | 145,603 | ||||||||
Seattle Municipal Light and Power Revenue, Improvement and Refunding, Series C, | 700,000 | 818,895 | ||||||||
Spokane County School District No. 356 Central Valley GO, | 100,000 | 127,161 | ||||||||
5.00%, 12/01/28 | 310,000 | 401,506 | ||||||||
Washington Health Care Facilities Authority Revenue, MultiCare Health System, Refunding, Series B, 5.00%, 8/15/29 | 125,000 | 156,580 | ||||||||
|
| |||||||||
1,779,412 | ||||||||||
|
| |||||||||
Wisconsin 0.2% | ||||||||||
Brookfield GO, Waukesha County, Refunding, 3.00%, 12/01/25 | 100,000 | 113,003 | ||||||||
|
| |||||||||
Variable Rate Demand Notes 0.2% | ||||||||||
North Carolina 0.2% | ||||||||||
The Charlotte-Mecklenburg Hospital Authority Revenue, Carolinas HealthCare System, Refunding, Series C, Daily VRDN and Put, 0.11%, 1/15/37 | 100,000 | 100,000 | ||||||||
|
| |||||||||
Total Investments (Cost $49,919,637) 99.4% | 51,944,957 | |||||||||
Other Assets, less Liabilities 0.6% | 336,974 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 52,281,931 | ||||||||
|
|
See Abbreviations on page 37.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 27 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2020 (unaudited)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | Franklin Liberty Federal Tax- Free Bond ETF | |||||||
Assets: | ||||||||
Investments in securities: | ||||||||
Cost — Unaffiliated issuers | $ | 26,396,908 | $ | 49,919,637 | ||||
|
| |||||||
Value — Unaffiliated issuers | $ | 26,845,953 | $ | 51,944,957 | ||||
Cash | 86,406 | 68,486 | ||||||
Receivables: | ||||||||
Capital shares sold | 5,135,261 | — | ||||||
Interest | 186,628 | 408,967 | ||||||
|
| |||||||
Total assets | 32,254,248 | 52,422,410 | ||||||
|
| |||||||
Liabilities: | ||||||||
Payables: | ||||||||
Investment securities purchased | 2,723,874 | — | ||||||
Management fees | 20 | 6,972 | ||||||
Transfer agent fees | 9,121 | 9,121 | ||||||
Trustees’ fees and expenses | 34 | 20 | ||||||
Distributions to shareholders | 47,064 | 92,399 | ||||||
Custodian fees | 717 | 690 | ||||||
Professional fees | 21,580 | 22,187 | ||||||
Reports to shareholders | 1,683 | 1,391 | ||||||
Registration and filing fees | 2,976 | 2,599 | ||||||
Accrued expenses and other liabilities | 5,082 | 5,100 | ||||||
|
| |||||||
Total liabilities | 2,812,151 | 140,479 | ||||||
|
| |||||||
Net assets, at value | $ | 29,442,097 | $ | 52,281,931 | ||||
|
| |||||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 29,164,019 | $ | 50,829,849 | ||||
Total distributable earnings (loss) | 278,078 | 1,452,082 | ||||||
|
| |||||||
Net assets, at value | $ | 29,442,097 | $ | 52,281,931 | ||||
|
| |||||||
Shares outstanding | 1,150,000 | 1,950,000 | ||||||
|
| |||||||
Net asset value per share | $ | 25.60 | $ | 26.81 | ||||
|
|
28 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2020 (unaudited)
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | Franklin Liberty Federal Tax- Free Bond ETF | |||||||
Investment income: |
| |||||||
Interest: |
| |||||||
Unaffiliated issuers | $ | 203,412 | $ | 403,781 | ||||
|
| |||||||
Total investment income | 203,412 | 403,781 | ||||||
|
| |||||||
Expenses: |
| |||||||
Management fees (Note 3a) | 53,993 | 126,354 | ||||||
Transfer agent fees | 7,821 | 7,821 | ||||||
Custodian fees | 622 | 651 | ||||||
Reports to shareholders | 3,907 | 4,020 | ||||||
Registration and filing fees | 4,718 | 4,364 | ||||||
Professional fees | 16,886 | 17,095 | ||||||
Trustee fees (Note 3a) | 509 | 1,219 | ||||||
Other | 3,754 | 3,776 | ||||||
|
| |||||||
Total expenses | 92,210 | 165,300 | ||||||
Expenses waived/paid by affiliates (Note 3c) | (66,293 | ) | (104,650 | ) | ||||
|
| |||||||
Net expenses | 25,917 | 60,650 | ||||||
|
| |||||||
Net investment income | 177,495 | 343,131 | ||||||
|
| |||||||
Realized and unrealized gains (losses): |
| |||||||
Net realized gain (loss) from: |
| |||||||
Investments: |
| |||||||
Unaffiliated issuers | 8,791 | (10,022 | ) | |||||
|
| |||||||
Net realized gain (loss) | 8,791 | (10,022 | ) | |||||
|
| |||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||
Investments: |
| |||||||
Unaffiliated issuers | 554,180 | 1,191,101 | ||||||
|
| |||||||
Net change in unrealized appreciation (depreciation) | 554,180 | 1,191,101 | ||||||
|
| |||||||
Net realized and unrealized gain (loss) | 562,971 | 1,181,079 | ||||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | $ | 740,466 | $ | 1,524,210 | ||||
|
|
franklintempletonx.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 29 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | Franklin Liberty Federal Tax-Free Bond ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 177,495 | $ | 210,664 | $ | 343,131 | $ | 383,073 | ||||||||
Net realized gain (loss) | 8,791 | (14,462 | ) | (10,022 | ) | (195,163 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 554,180 | (215,491 | ) | 1,191,101 | 681,191 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 740,466 | (19,289 | ) | 1,524,210 | 869,101 | |||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (192,407 | ) | (240,496 | ) | (486,081 | ) | (528,067 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 16,531,721 | 5,132,298 | 22,569,661 | 19,513,471 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 17,079,780 | 4,872,513 | 23,607,790 | 19,854,505 | ||||||||||||
|
| |||||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 12,362,317 | 7,489,804 | 28,674,141 | 8,819,636 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 29,442,097 | $ | 12,362,317 | $ | 52,281,931 | $ | 28,674,141 | ||||||||
|
|
30 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-four separate funds, two of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and are actively managed, thus they are not designed to track an index.
Effective 09/14/2020, the following name changes occurred:
Old name
* | Franklin Liberty Intermediate Municipal Opportunities ETF |
* | Franklin Liberty Municipal Bond ETF |
New name
* | Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF |
* | Franklin Liberty Federal Tax-Free Bond ETF |
The following summarizes the Fund’s significant accounting policies.
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC).
The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Funds’ pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity
exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
b. Securities Purchased on a When-Issued Basis
Certain or all Funds purchase securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Funds will generally purchase these securities with the intention of holding the securities, they may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
c. Income Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Income Taxes (continued)
tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2020, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
d. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense.
e. Insurance
The scheduled payments of interest and principal for each insured municipal security in the Trust are insured by either a new issue insurance policy or a secondary insurance policy. Some municipal securities in the Funds are secured by collateral guaranteed by an agency of the U.S. government. Depending on the type of coverage, premiums for insurance are either added the cost basis of the security or paid by a third party.
Insurance companies typically insure municipal bonds that tend to be of very high quality, with the majority of underlying municipal bonds rated A or better. However, an event involving an insurer could have an adverse effect on the value of the securities insured by that insurance company. There can be no assurance the insurer will be able to fulfill its obligations under the terms of the policy.
f. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specific number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities). For the period ended September 30, 2020, all Creation Unit transactions were made in cash.
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At September 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 650,000 | $ | 16,531,721 | 250,000 | $ | 6,287,252 | ||||||||||||||
Shares redeemed | — | — | (50,000 | ) | (1,154,954 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 650,000 | $ | 16,531,721 | 200,000 | $ | 5,132,298 | ||||||||||||||
|
| |||||||||||||||||||
Franklin Liberty Federal Tax-Free Bond ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 850,000 | $ | 22,569,661 | 800,000 | $ | 20,827,910 | ||||||||||||||
Shares redeemed | — | — | (50,000 | ) | (1,314,439 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 850,000 | $ | 22,569,661 | 750,000 | $ | 19,513,471 | ||||||||||||||
|
|
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers. Any one to be used- and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal Underwriter |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
a. Management Fees
The Funds pay an investment management fee to Advisers based on the daily net assets of each of the Funds as follows:
Annualized Fee Rate | Net Assets | |
0.625% | Up to and including $100 million | |
0.500% | Over $100 million, up to and including $250 million | |
0.450% | Over $250 million, up to and including $7.5 billion | |
0.440% | Over $7.5 billion, up to and including $10 billion | |
0.430% | Over $10 billion, up to and including $12.5 billion | |
0.420% | Over $12.5 billion, up to and including $15 billion | |
0.400% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | In excess of $20 billion |
For the period ended September 30, 2020, each Fund’s gross effective investment management fee rate based on average daily net assets was as follows:
Annualized Fee Rate | ||
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | 0.625% | |
Franklin Liberty Federal Tax-Free Bond ETF | 0.625% |
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Waiver and Expense Reimbursements
Advisers have contractually agreed in advance to waive or limit its fees and to assume as their own expense certain expenses otherwise payable by the Funds so that the expenses (including acquired fund fees and expenses) for each of the Funds does not exceed 0.30%, based on the average net assets (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until July 31, 2021. Total expenses waived or paid are not subject to recapture subsequent to the Funds’ fiscal year end.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
d. Other Affiliated Transactions
At September 30, 2020, the shares of the Funds were owned by the following entities:
Funds | Shares | Percentage of Outstanding Sharesa | ||||||
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | ||||||||
Franklin High Yield Tax-Free Income | 750,000 | 65.2% | ||||||
|
| |||||||
750,000 | 65.2% | |||||||
Franklin Liberty Federal Tax-Free Bond ETF | ||||||||
Franklin Federal Limited-Term Tax-Free Fund | 1,065,000 | 54.6% | ||||||
Franklin Federal Intermediate-Term Tax-Free Income Fund | 365,000 | 18.7% | ||||||
|
| |||||||
1,430,000 | 73.3% | |||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. At March 31, 2020, the capital loss carryforwards were as follows:
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | Franklin Liberty Federal Tax-Free Bond ETF | |||||||
Capital loss carryforwards not subject to expiration: | ||||||||
Short term | $ | 64,623 | $ | 217,482 | ||||
Long term | 71,840 | 65,114 | ||||||
|
| |||||||
Total capital loss carryforwards | $ | 136,463 | $ | 282,596 | ||||
|
|
At September 30, 2020, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | Franklin Liberty Federal Tax-Free Bond ETF | |||||||
Cost Investments | $ | 26,417,628 | $ | 50,142,214 | ||||
|
| |||||||
Unrealized appreciation | $ | 709,964 | $ | 1,875,363 | ||||
Unrealized depreciation | (281,639 | ) | (72,620 | ) | ||||
|
| |||||||
Net unrealized appreciation (depreciation) | $ | 428,325 | $ | 1,802,743 | ||||
|
|
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2020, were as follows:
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF | Franklin Liberty Federal Tax-Free Bond ETF | |||||||
Purchases | $ | 18,627,718 | $ | 23,791,230 | ||||
Sales | $ | 2,614,429 | $ | 1,137,040 |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
6. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
7. Credit Risk and Defaulted Securities
At September 30, 2020, Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF and Franklin Liberty Federal Tax-Free Bond ETF had 42.92% and 0.80% of its portfolio invested in high yield securities, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.
The Fund may purchase the pre-default or defaulted debt of distressed companies. Distressed companies are financially troubled and could be or are already involved in financial restructuring or bankruptcy. Risks associated with purchasing these securities include the possibility that the bankruptcy or other restructuring process takes longer than expected, or that distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the Fund. If it becomes probable that the income on debt securities, including those distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest. At September 30, 2020, the aggregate long value of distressed company securities for which interest recognition has been discontinued representing 0.85% of the Fund’s net assets. For information as to specific securities, see the accompanying Statement of Investments.
8. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
At September 30, 2020, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.
9. New Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the financial statements.
10. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Selected Portfolio | ||
AGMC | Assured Guaranty Municipal Corp. | |
BAM | Build America Mutual Assurance Co. | |
CDA | Community Development Authority/Agency | |
CFD | Community Facilities District | |
EDC | Economic Development Corp. | |
EDR | Economic Development Revenue | |
GO | General Obligation | |
ID | Improvement District | |
IDA | Industrial Development Authority/Agency | |
IDAR | Industrial Development Authority Revenue | |
ISD | Independent School District | |
MFHR | Multi-Family Housing Revenue | |
MTA | Metropolitan Transit Authority | |
PFA | Public Financing Authority | |
PSF | Permanent School Fund | |
RDA | Redevelopment Agency/Authority | |
USD | Unified/Union School District |
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Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty Intermediate Municipal Opportunities ETF
Franklin Liberty Municipal Bond ETF
(each a Fund)
At a meeting held on May 14, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisers, Inc. (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from the Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of each Fund; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the effectiveness of those plans during the pandemic, and developing strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity and liquidity risk management. The Board further noted its ongoing engagement with management, the Funds’ auditor and State Street Bank and Trust Company, the Funds’ custodian, about their responses to the pandemic and the pandemic’s impact on their operating continuity, as well as the impact on the Funds (especially with respect to valuation and liquidity).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative
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SHAREHOLDER INFORMATION
functions currently provided by FT or an affiliate to other funds in the complex, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. Specifically, the Board discussed with management the expected impact of the Legg Mason acquisition on FT and the Funds, including management’s expectations with respect to the integration of Legg Mason’s exchange-traded funds into the FT family of funds. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, in her role as President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for the one-year period ended February 29, 2020. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with the Manager about the performance of the Funds to date, particularly as compared to peers, and referenced earlier discussions with the Manager on matters related to, among other things, the importance of performance to asset growth and growth of market share, the comparability of peer data, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding the Manager’s strategy behind the overall product line-up, the sources of asset growth, the nature of the Manager’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted the Manager’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
The Performance Universe for the Franklin Liberty Intermediate Municipal Opportunities ETF included the Fund and all retail and institutional intermediate municipal debt funds and
exchange-traded funds. The Performance Universe for the Franklin Liberty Municipal Bond ETF included the Fund and all retail and institutional general and insured municipal debt funds and exchange-traded funds. The Funds commenced operations on August 31, 2017, and thus have been in operation for less than three years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians and in the first (best) and second quintiles of their respective Performance Universes. The Board concluded that the Funds’ performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin Liberty Intermediate Municipal Opportunities ETF – The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and four other intermediate municipal debt funds. The Board noted that the Management Rate for the Fund was above the median of its Expense Group, but its actual total expense ratio was equal to the median of its Expense Group. The Board also noted the small size of the Expense Group and that the Fund’s actual total expense ratio reflected a fee waiver from management. The Board concluded that the Management Rate charged to the Fund is reasonable.
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SHAREHOLDER INFORMATION
Franklin Liberty Municipal Bond ETF – The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and four other general and insured municipal debt funds. The Board noted that the Management Rate for the Fund was above the median of its Expense Group, but the Fund’s actual total expense ratio was equal to the median of its Expense Group. The Board also noted the small size of the Expense Group and that the Fund’s actual total expense ratio reflected a fee waiver from management. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged to review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up-front expenditures by the Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements, notably in the area of cybersecurity protections.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints, which operate generally to share any economies of scale with each Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered the Manager’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board noted that the Franklin Liberty Intermediate Municipal Opportunities ETF and Franklin Liberty Municipal Bond ETF commenced operations on August 31, 2017 and that, as of December 31, 2019, each Fund’s net assets were less than $28 million. The Board recognized that there would not likely be any economies of scale until each Fund’s assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program Non-In-Kind ETFs
Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF
Franklin Liberty Federal Tax-Free Bond ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as
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SHAREHOLDER INFORMATION
required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the
effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
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SHAREHOLDER INFORMATION
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report Franklin Templeton ETF Trust | ||||||
Investment Manager | Distributor | Investor Services | ||||
Franklin Advisers, Inc. | Franklin Templeton Distributors, Inc. (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
© 2020 Franklin Templeton Investments. All rights reserved. | ETF4 S 11/20 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2020
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Japan ETF | |
Franklin FTSE Australia ETF | Franklin FTSE Japan Hedged ETF | |
Franklin FTSE Brazil ETF | Franklin FTSE Latin America ETF | |
Franklin FTSE Canada ETF | Franklin FTSE Mexico ETF | |
Franklin FTSE China ETF | Franklin FTSE Russia ETF | |
Franklin FTSE Europe ETF | Franklin FTSE Saudi Arabia ETF | |
Franklin FTSE Europe Hedged ETF | Franklin FTSE South Africa ETF | |
Franklin FTSE France ETF | Franklin FTSE South Korea ETF | |
Franklin FTSE Germany ETF | Franklin FTSE Switzerland ETF | |
Franklin FTSE Hong Kong ETF | Franklin FTSE Taiwan ETF | |
Franklin FTSE India ETF | Franklin FTSE United Kingdom ETF | |
Franklin FTSE Italy ETF |
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
Visit franklintempleton.com/investor/investments-and-solutions/investment-options/etfs/ for fund updates and documents.
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
franklintempleton.com | Semiannual Report | 1 |
SEMIANNUAL REPORT
Global developed and emerging market equities, as measured by the FTSE All World Index, advanced strongly during the six months under review. Despite the onset of a significant global recession following the stringent social distancing measures imposed to slow the spread of the novel coronavirus (COVID-19), equities in all major regions of the world posted sizable gains. A gradual easing of restrictions and massive government stimulus drove a resumption of economic activity, leading stocks higher throughout most of the period. Optimism about the development of treatments and vaccines for COVID-19 further supported the recovery in equity prices. However, geopolitical tensions, rising infection rates and the possibility of renewed restrictions pressured global markets in September.
In the U.S., pandemic-related restrictions caused stiff economic headwinds that included mass layoffs that drove the unemployment rate to 14.7% in April 2020.1 The longest U.S. economic expansion in history ended in February (prior to the beginning of the period), according to the National Bureau of Economic Research, and the country slipped into a deep recession. The federal government’s stimulus measures, along with declining jobless claims and unemployment rate, rising retail sales, and optimism about treatments and potential vaccines for COVID-19, drove a sharp equity rally through much of the reporting period. Despite a record decline in second-quarter gross domestic product (GDP), resilient consumer spending and optimism about an economic rebound supported stock prices throughout much of the summer, particularly in the consumer staples, health care and information technology sectors. Economic growth resumed in the third quarter at the fastest annualized rate on record as many businesses reopened, but the GDP remained below its pre-pandemic level. However, concerns about high infection rates and the unlikely passage of additional stimulus ahead of the U.S. presidential election hindered equities in September.
The U.S. Federal Reserve (Fed) continued its significant efforts to support the U.S. economy by maintaining the federal funds target rate range at 0.00%–0.25% and expanding quantitative easing measures aimed at ensuring credit flows to borrowers and supporting credit markets with unlimited amounts of bond purchasing. The Fed also announced a
shift in inflation policy that could potentially retain ultra-low interest rates, even amid declining unemployment and rising inflation.
In the eurozone, the pandemic’s economic disruption resulted in a recession, with second-quarter 2020 GDP growth contracting at a record rate compared to the prior quarter. However, the economy grew at a record rate in the third quarter amid the reopening of many businesses, relaxation of some social distancing restrictions and continued stimulus measures. In this environment, European developed market equities, as measured by the FTSE Developed Europe Index, advanced throughout most of the reporting period. Although stock prices declined in September as rising infection rates heightened concerns that the nascent economic revival could stall, European developed market equities, as measured by the FTSE Developed Europe Index, ended the period with strong gains.
Asian developed and emerging market equities also advanced, as measured by the FTSE All World Asia Pacific Index. China’s second- and third-quarter economic growth, a key driver of the region’s economic activity, supported the stock rebound. Government stimulus measures, economic reopenings and ongoing development of COVID-19 vaccines also buoyed investor sentiment. However, renewed tensions between China and the U.S., heightened regional conflicts and concerns about the economic impact of a resurgence of infections pressured Asian stocks near period-end.
Emerging market stocks, as measured by the FTSE Emerging Index, also posted significant gains. Improving economic activity, higher oil prices and U.S. dollar weakness led emerging markets equities higher, despite investor concerns in September 2020 about surging COVID-19 cases in some emerging market countries.
The foregoing information reflects our analysis and opinions as of September 30, 2020. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
1. Source: U.S. Bureau of Labor Statistics.
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Franklin FTSE Asia ex Japan ETF
This semiannual report for Franklin FTSE Asia ex Japan ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +31.04% based on market price and +29.28% based on net asset value. In comparison, the FTSE Asia ex Japan Capped Index posted a +29.60% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Asia ex Japan Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation.
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Internet & Direct Marketing Retail | 12.5% | |||
Banks | 9.0% | |||
Semiconductors & Semiconductor Equipment | 8.6% | |||
Interactive Media & Services | 8.1% | |||
Technology Hardware, Storage & Peripherals | 6.0% | |||
Insurance | 4.9% | |||
Real Estate Management & Development | 3.8% | |||
Oil, Gas & Consumable Fuels | 3.3% | |||
Electronic Equipment, Instruments & Components | 2.7% | |||
Automobiles | 2.2% |
Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Asia ex Japan 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 Asia ex Japan Capped Index 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 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.
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 Statement of Investments (SOI). The SOI begins on page 119.
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FRANKLIN FTSE ASIA EX JAPAN ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Alibaba Group Holding Ltd., ADR Internet & Direct Marketing Retail, China | 8.7% | |||
Tencent Holdings Ltd. Interactive Media & Services, China | 6.4% | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | 6.0% | |||
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea | 4.5% | |||
AIA Group Ltd. Insurance, Hong Kong | 2.0% | |||
Meituan Dianping, B, Reg S Internet & Direct Marketing Retail, China | 1.9% | |||
Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India | 1.6% | |||
JD.com Inc., ADR Internet & Direct Marketing Retail, China | 1.2% | |||
China Construction Bank Corp., A, H Banks, China | 1.0% | |||
Hong Kong Exchanges and Clearing Ltd. Capital Markets, Hong Kong | 1.0% |
Top 10 Countries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
China | 45.5% | |||
Taiwan | 14.0% | |||
South Korea | 12.8% | |||
India | 10.2% | |||
Hong Kong | 7.4% | |||
Singapore | 2.8% | |||
Thailand | 2.2% | |||
Malaysia | 2.1% | |||
Indonesia | 1.4% | |||
Philippines | 0.9% |
Thank you for your participation in Franklin FTSE Asia ex Japan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
CFA® is a trademark owned by CFA Institute.
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FRANKLIN FTSE ASIA EX JAPAN ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +29.28% | +31.04% | +29,28% | +31.04% | ||||||||||||
1-Year | +17.28% | +18.37% | +17.28% | +18.37% | ||||||||||||
Since Inception (2/6/18) | +5.33% | +6.00% | +1.98% | +2.23% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 6 for Performance Summary footnotes.
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FRANKLIN FTSE ASIA EX JAPAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.075786 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Asian issuers involve risks that are specific to Asia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
6 | Semiannual Report | franklintempleton.com |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,292.80 | $ | 1.09 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
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This semiannual report for Franklin FTSE Australia ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +33.04% based on market price and +35.32% based on net asset value. In comparison, the FTSE Australia Capped Index posted a +35.22% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 10.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Australia Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 20.1% | |||
Metals & Mining | 17.4% | |||
Biotechnology | 9.1% | |||
Equity Real Estate Investment Trusts (REITs) | 6.4% | |||
Food & Staples Retailing | 4.9% | |||
Capital Markets | 4.7% | |||
Transportation Infrastructure | 3.9% | |||
Multiline Retail | 3.7% | |||
Oil, Gas & Consumable Fuels | 3.5% | |||
Insurance | 2.8% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Australia 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 Australia Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 153.
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FRANKLIN FTSE AUSTRALIA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
CSL Ltd. Biotechnology, Australia | 9.1% | |||
Commonwealth Bank of Australia Banks, Australia | 7.9% | |||
BHP Group Ltd. Metals & Mining, Australia | 7.4% | |||
Westpac Banking Corp. Banks, Australia | 4.3% | |||
National Australia Bank Ltd. Banks, Australia | 4.1% | |||
Wesfarmers Ltd. Multiline Retail, Australia | 3.5% | |||
Australia & New Zealand Banking Group Ltd. Banks, Australia | 3.4% | |||
Woolworths Group Ltd. Food & Staples Retailing, Australia | 3.2% | |||
Macquarie Group Ltd. Capital Markets, Australia | 2.7% | |||
Transurban Group Transportation Infrastructure, Australia | 2.7% |
Thank you for your participation in Franklin FTSE Australia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 9 |
FRANKLIN FTSE AUSTRALIA ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +35.32% | +33.04% | +35.32% | +33.04% | ||||||||||||
1-Year | -5.44% | -5.46% | -5.44% | -5.46% | ||||||||||||
Since Inception (11/2/17) | +1.70% | +2.27% | +0.58% | +0.77% |
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 11 for Performance Summary footnotes.
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FRANKLIN FTSE AUSTRALIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.321721 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Australian issuers involve risks that are specific to Australia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 11 |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,353.20 | $ | 0.53 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
12 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin FTSE Brazil ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +19.98% based on market price and +19.16% based on net asset value. In comparison, the FTSE Brazil Capped Index posted a +19.24% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 15.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Brazil Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 17.4% | |||
Metals & Mining | 13.7% | |||
Oil, Gas & Consumable Fuels | 10.7% | |||
Capital Markets | 7.4% | |||
Multiline Retail | 6.8% | |||
Electric Utilities | 5.1% | |||
Road & Rail | 3.7% | |||
Health Care Providers & Services | 3.5% | |||
Beverages | 3.1% | |||
Electrical Equipment | 2.8% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Brazil 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 Brazil Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 157.
franklintempleton.com | Semiannual Report | 13 |
FRANKLIN FTSE BRAZIL ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Vale SA Metals & Mining, Brazil | 11.0% | |||
Petroleo Brasileiro SA Oil, Gas & Consumable Fuels, Brazil | 9.2% | |||
Itau Unibanco Holding SA Banks, Brazil | 6.6% | |||
B3 SA – Brasil Bolsa Balcao Capital Markets, Brazil | 6.4% | |||
Banco Bradesco SA Banks, Brazil | 6.0% | |||
Magazine Luiza SA Multiline Retail, Brazil | 3.3% | |||
Ambev SA Beverages, Brazil | 3.1% | |||
WEG SA Electrical Equipment, Brazil | 2.8% | |||
Itausa SA Banks, Brazil | 2.2% | |||
Natura & Co Holding SA Personal Products, Brazil | 2.2% |
Thank you for your participation in Franklin FTSE Brazil ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
14 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE BRAZIL ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +19.16% | +19.98% | +19.16% | +19.98% | ||||||||||||
1-Year | -32.33% | -31.98% | -32.33% | -31.98% | ||||||||||||
Since Inception (11/3/17) | -23.37% | -22.72% | -8.75% | -8.49% |
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 16 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN FTSE BRAZIL ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.260662 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sector, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. The Brazilian economy has experienced in the past, and may continue to experience, periods of high inflation rates and political unrest. Investments in securities of Brazilian issuers involve risks that are specific to Brazil, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
16 | Semiannual Report | franklintempleton.com |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,191.60 | $ | 1.04 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 17 |
This semiannual report for Franklin FTSE Canada ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +26.41% based on market price and +26.72% based on net asset value. In comparison, the FTSE Canada Capped Index posted a +26.56% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Canada Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 25.7% | |||
Oil, Gas & Consumable Fuels | 12.3% | |||
IT Services | 10.1% | |||
Metals & Mining | 9.9% | |||
Road & Rail | 9.4% | |||
Insurance | 7.2% | |||
Food & Staples Retailing | 4.4% | |||
Capital Markets | 3.8% | |||
Commercial Services & Supplies | 2.2% | |||
Electric Utilities | 2.0% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Canada 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 Canada Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 161.
18 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE CANADA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Shopify Inc., A IT Services, Canada | 8.8% | |||
Royal Bank of Canada Banks, Canada | 8.0% | |||
The Toronto-Dominion Bank Banks, Canada | 6.7% | |||
Canadian National Railway Co. Road & Rail, Canada | 6.1% | |||
Enbridge Inc. Oil, Gas & Consumable Fuels, Canada | 4.7% | |||
The Bank of Nova Scotia Banks, Canada | 4.0% | |||
Barrick Gold Corp. Metals & Mining, Canada | 4.0% | |||
Brookfield Asset Management Inc., A Capital Markets, Canada | 3.7% | |||
Canadian Pacific Railway Ltd. Road & Rail, Canada | 3.3% | |||
TC Energy Corp. Oil, Gas & Consumable Fuels, Canada | 3.2% |
Thank you for your participation in Franklin FTSE Canada ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN FTSE CANADA ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +26.72% | +26.41% | +26.72% | +26.41% | ||||||||||||
1-Year | -2.15% | -2.02% | -2.15% | -2.02% | ||||||||||||
Since Inception (11/2/17) | +5.12% | +5.49% | +1.73% | +1.85% |
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 21 for Performance Summary footnotes.
20 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE CANADA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.258835 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Canadian issuers involve risks that are specific to Canada, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 21 |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,267.20 | $ | 0.51 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
22 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin FTSE China ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +31.56% based on market price and +30.10% based on net asset value. In comparison, the FTSE China Capped Index posted a +30.53% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 25.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE China Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Internet & Direct Marketing Retail | 27.6% | |||
Interactive Media & Services | 15.9% | |||
Banks | 7.8% | |||
Real Estate Management & Development | 4.3% | |||
Insurance | 4.1% | |||
Entertainment | 2.2% | |||
Automobiles | 2.2% | |||
Beverages | 2.2% | |||
Diversified Consumer Services | 2.1% | |||
Pharmaceuticals | 2.0% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE China 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 China Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 164.
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN FTSE CHINA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Alibaba Group Holding Ltd., ADR Internet & Direct Marketing Retail, China | 19.2% | |||
Tencent Holdings Ltd. Interactive Media & Services, China | 14.1% | |||
Meituan Dianping, B, Reg S Internet & Direct Marketing Retail, China | 4.2% | |||
JD.com Inc., ADR Internet & Direct Marketing Retail, China | 2.6% | |||
China Construction Bank Corp., A, H Banks, China | 2.3% | |||
Ping An Insurance (Group) Co. of China Ltd., H Insurance, China | 2.1% | |||
Industrial and Commercial Bank of China Ltd., H Banks, China | 1.7% | |||
NetEase Inc., ADR Entertainment, China | 1.3% | |||
Baidu Inc., ADR Interactive Media & Services, China | 1.3% | |||
China Mobile Ltd. Wireless Telecommunication Services, China | 1.3% |
Thank you for your participation in Franklin FTSE China ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
24 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE CHINA ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +30.10% | +31.56% | +30.10% | +31.56% | ||||||||||||
1-Year | +34.29% | +36.35% | +34.29% | +36.35% | ||||||||||||
Since Inception (11/2/17) | +20.29% | +21.42% | +6.56% | +6.90% |
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 26 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN FTSE CHINA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.042233 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. China may be subject to considerable degrees of economic, political and social instability. Investments in securities of Chinese issuers involve risks that are specific to China, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
26 | Semiannual Report | franklintempleton.com |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,301.00 | $ | 1.10 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 27 |
This semiannual report for Franklin FTSE Europe ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +21.03% based on market price and +21.42% based on net asset value. In comparison, the FTSE Developed Europe Capped Index posted a +21.25% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 30.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation.
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 11.5% | |||
Banks | 5.5% | |||
Food Products | 5.1% | |||
Insurance | 5.0% | |||
Chemicals | 4.2% | |||
Textiles, Apparel & Luxury Goods | 4.2% | |||
Oil, Gas & Consumable Fuels | 3.7% | |||
Machinery | 3.1% | |||
Electric Utilities | 2.8% | |||
Personal Products | 2.8% |
Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Developed Europe 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 Developed Europe Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 184.
28 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE EUROPE ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Nestle SA Food Products, Switzerland | 3.8% | |||
Roche Holding AG Pharmaceuticals, Switzerland | 2.8% | |||
Novartis AG Pharmaceuticals, Switzerland | 2.1% | |||
SAP SE Software, Germany | 2.0% | |||
ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands | 1.7% | |||
AstraZeneca PLC Pharmaceuticals, United Kingdom | 1.6% | |||
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | 1.3% | |||
Novo Nordisk AS, B Pharmaceuticals, Denmark | 1.3% | |||
Sanofi Pharmaceuticals, France | 1.2% | |||
Siemens AG Industrial Conglomerates, Germany | 1.1% |
Top 10 Countries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
United Kingdom | 21.7% | |||
Switzerland | 16.3% | |||
France | 15.8% | |||
Germany | 15.3% | |||
Netherlands | 5.9% | |||
Sweden | 5.5% | |||
Denmark | 3.9% | |||
Spain | 3.6% | |||
Italy | 3.3% | |||
Finland | 2.3% |
Thank you for your participation in Franklin FTSE Europe ETF. We look forward to serving your future investment needs.
Dina Ting, CFA | ||
Louis Hsu, CFA | ||
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN FTSE EUROPE ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +21.42% | +21.03% | +21.42% | +21.03% | ||||||||||||
1-Year | +0.03% | +0.08% | +0.03% | +0.08% | ||||||||||||
Since Inception (11/2/17) | -1.37% | -1.48% | -0.47% | -0.51% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 31 for Performance Summary footnotes.
30 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE EUROPE ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.197684 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of European issuers involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 31 |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,214.20 | $ | 0.50 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
32 | Semiannual Report | franklintempleton.com |
Franklin FTSE Europe Hedged ETF
This semiannual report for Franklin FTSE Europe Hedged ETF covers the period ended September 30, 2020.
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 Hedged to USD Index (the FTSE Developed Europe Capped Hedged 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 Developed Europe Capped Hedged Index and in depositary receipts representing such securities, including indirectly through Franklin FTSE Europe ETF (Underlying Fund).
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +16.35% based on market price and +14.82% based on net asset value. In comparison, the FTSE Developed Europe Capped Hedged Index posted a +14.65% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 35.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe Capped Hedged Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 11.5% | |||
Banks | 5.5% | |||
Food Products | 5.1% | |||
Insurance | 5.0% | |||
Chemicals | 4.2% | |||
Textiles, Apparel & Luxury Goods | 4.2% | |||
Oil, Gas & Consumable Fuels | 3.7% | |||
Machinery | 3.1% | |||
Electric Utilities | 2.8% | |||
Personal Products | 2.8% |
Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. We intend to enter into monthly foreign currency forward contracts and/or currency futures contracts designed to offset the Fund’s exposure to the component currencies, in order to replicate the hedge impact incorporated in the calculation of the Underlying Index. The
1. The FTSE Developed Europe Capped Hedged 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 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.
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.
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 Statement of Investments (SOI). The SOI begins on page 198.
franklintempleton.com | Semiannual Report | 33 |
FRANKLIN FTSE EUROPE HEDGED ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Nestle SA Food Products, Switzerland | 3.7% | |||
Roche Holding AG Pharmaceuticals, Switzerland | 2.8% | |||
Novartis AG Pharmaceuticals, Switzerland | 2.1% | |||
SAP SE Software, Germany | 2.0% | |||
ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands | 1.7% | |||
AstraZeneca PLC Pharmaceuticals, United Kingdom | 1.6% | |||
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | 1.3% | |||
Novo Nordisk AS, B Pharmaceuticals, Denmark | 1.3% | |||
Sanofi Pharmaceuticals, France | 1.2% | |||
Siemens AG Industrial Conglomerates, Germany | 1.1% |
Fund’s exposure to foreign currency forward contracts and currency futures contracts is based on the aggregate exposure of the Fund to the component currencies. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
Top 10 Countries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
United Kingdom | 21.5% | |||
Switzerland | 16.2% | |||
France | 15.8% | |||
Germany | 15.2% | |||
Netherlands | 5.9% | |||
Sweden | 5.5% | |||
Denmark | 3.9% | |||
Spain | 3.6% | |||
Italy | 3.3% | |||
Finland | 2.3% |
Thank you for your participation in Franklin FTSE Europe Hedged ETF. We look forward to serving your future investment needs.
Dina Ting, CFA | ||
Louis Hsu, CFA | ||
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
34 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE EUROPE HEDGED ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +14.82% | +16.35% | +14.82% | +16.35% | ||||||||||||
1-Year | -4.82% | -4.18% | -4.82% | -4.18% | ||||||||||||
Since Inception (11/2/17) | +4.67% | +5.04% | +1.58% | +1.70% |
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 36 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN FTSE EUROPE HEDGED ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.146595 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of European issuers involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the Fund to participate in losses on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. While the Fund’s use of foreign currency forward contracts and/or currency futures contracts is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Fund’s exposure to the component currencies. The return of these currency hedging instruments will not perfectly offset the actual fluctuations between the component currencies and the U.S. dollar. Currency hedges are sometimes subject to imperfect matching between the derivative instruments and the currencies that the derivative instruments intend to hedge, and there can be no assurance that the Fund’s hedging transactions will be effective. The Fund’s exposure to the component currencies may not be fully hedged at all times. Because the Fund’s currency hedge is generally reset on a monthly basis, currency risk can develop or increase intra-month. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
36 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE EUROPE HEDGED 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,148.20 | $ | 0.48 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 37 |
This semiannual report for Franklin FTSE France ETF covers the period ended September 30, 2020.
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.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +21.37% based on market price and +20.00% based on net asset value. In comparison, the FTSE France Capped Index posted a +19.78% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 40.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE France Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Textiles, Apparel & Luxury Goods | 16.4% | |||
Pharmaceuticals | 7.9% | |||
Electrical Equipment | 6.1% | |||
Oil, Gas & Consumable Fuels | 5.9% | |||
Aerospace & Defense | 5.8% | |||
Chemicals | 5.7% | |||
Personal Products | 5.5% | |||
Banks | 4.2% | |||
Construction & Engineering | 3.7% | |||
IT Services | 3.6% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
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 measure 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.
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 Statement of Investments (SOI). The SOI begins on page 212.
38 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE FRANCE ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | 8.3% | |||
Sanofi Pharmaceuticals, France | 7.7% | |||
Total SE Oil, Gas & Consumable Fuels, France | 5.9% | |||
L’Oreal SA Personal Products, France | 5.5% | |||
Air Liquide SA Chemicals, France | 5.2% | |||
Schneider Electric SE Electrical Equipment, France | 4.6% | |||
Kering SA Textiles, Apparel & Luxury Goods, France | 3.5% | |||
Airbus SE Aerospace & Defense, France | 2.9% | |||
EssilorLuxottica SA Textiles, Apparel & Luxury Goods, France | 2.8% | |||
BNP Paribas SA Banks, France | 2.8% |
Thank you for your participation in Franklin FTSE France ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 39 |
FRANKLIN FTSE FRANCE ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +20.00% | +21.37% | +20.00% | +21.37% | ||||||||||||
1-Year | -5.70% | -5.76% | -5.70% | -5.76% | ||||||||||||
Since Inception (11/2/17) | -3.30% | -3.18% | -1.15% | -1.11% |
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 41 for Performance Summary footnotes.
40 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE FRANCE ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.170641 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of French issuers involve risks that are specific to France, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 41 |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,200.00 | $ | 0.50 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
42 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin FTSE Germany ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +38.90% based on market price and +37.63% based on net asset value. In comparison, the FTSE Germany Capped Index posted a +37.31% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 45.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Germany Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Software | 13.6% | |||
Insurance | 9.3% | |||
Automobiles | 8.4% | |||
Industrial Conglomerates | 7.4% | |||
Chemicals | 7.2% | |||
Pharmaceuticals | 5.9% | |||
Real Estate Management & Development | 5.3% | |||
Textiles, Apparel & Luxury Goods | 5.1% | |||
Diversified Telecommunication Services | 4.4% | |||
Capital Markets | 3.7% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Germany 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 Germany Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 215.
franklintempleton.com | Semiannual Report | 43 |
FRANKLIN FTSE GERMANY ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
SAP SE Software, Germany | 12.9% | |||
Siemens AG Industrial Conglomerates, Germany | 7.1% | |||
Allianz SE Insurance, Germany | 5.9% | |||
Adidas AG Textiles, Apparel & Luxury Goods, Germany | 4.6% | |||
Bayer AG Pharmaceuticals, Germany | 4.5% | |||
BASF SE Chemicals, Germany | 4.1% | |||
Deutsche Telekom AG Diversified Telecommunication Services, Germany | 4.0% | |||
Deutsche Post AG Air Freight & Logistics, Germany | 3.3% | |||
Daimler AG Automobiles, Germany | 3.2% | |||
Vonovia SE Real Estate Management & Development, Germany | 2.9% |
Thank you for your participation in Franklin FTSE Germany ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
44 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE GERMANY ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +37.63% | +38.90% | +37.63% | +38.90% | ||||||||||||
1-Year | +10.53% | +10.70% | +10.53% | +10.70% | ||||||||||||
Since Inception (11/2/17) | -5.11% | -4.93% | -1.79% | -1.72% |
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 46 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 45 |
FRANKLIN FTSE GERMANY ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.242567 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of German issuers involve risks that are specific to Germany, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
46 | Semiannual Report | franklintempleton.com |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,376.30 | $ | 0.54 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 47 |
This semiannual report for Franklin FTSE Hong Kong ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +13.38% based on market price and +12.09% based on net asset value. In comparison, the FTSE Hong Kong Capped Index posted a +12.16% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 50.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Hong Kong Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Insurance | 19.5% | |||
Real Estate Management & Development | 17.2% | |||
Capital Markets | 12.6% | |||
Hotels, Restaurants & Leisure | 7.2% | |||
Industrial Conglomerates | 6.0% | |||
Electric Utilities | 5.4% | |||
Banks | 4.8% | |||
Food Products | 3.8% | |||
Equity Real Estate Investment Trusts (REITs) | 3.7% | |||
Machinery | 3.4% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Hong Kong 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 Hong Kong Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 218.
48 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE HONG KONG ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
AIA Group Ltd. Insurance, Hong Kong | 19.6% | |||
Hong Kong Exchanges and Clearing Ltd. Capital Markets, Hong Kong | 12.4% | |||
Sun Hung Kai Properties Ltd. Real Estate Management & Development, Hong Kong | 3.8% | |||
Link REIT Equity Real Estate Investment Trusts (REITs), Hong Kong | 3.5% | |||
Techtronic Industries Co. Ltd. Machinery, Hong Kong | 3.5% | |||
CK Hutchison Holdings Ltd. Industrial Conglomerates, Hong Kong | 3.3% | |||
CLP Holdings Ltd. Electric Utilities, Hong Kong | 3.3% | |||
Hong Kong and China Gas Co. Ltd. Gas Utilities, Hong Kong | 3.1% | |||
Galaxy Entertainment Group Ltd. Hotels, Restaurants & Leisure, Macau | 3.0% | |||
CK Asset Holdings Ltd. Real Estate Management & Development, Hong Kong | 2.8% |
Thank you for your participation in Franklin FTSE Hong Kong ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 49 |
FRANKLIN FTSE HONG KONG ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +12.09% | +13.38% | +12.09% | +13.38% | ||||||||||||
1-Year | -0.80% | -0.08% | -0.80% | -0.08% | ||||||||||||
Since Inception (11/2/17) | -3.48% | -2.68% | -1.21% | -0.93% |
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 51 for Performance Summary footnotes.
50 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE HONG KONG ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.251955 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Hong Kong issuers involve risks that are specific to Hong Kong, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 51 |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,120.90 | $ | 0.48 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
52 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin FTSE India ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +41.88% based on market price and +39.01% based on net asset value. In comparison, the FTSE India Capped Index posted a +40.19% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 55.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE India Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Oil, Gas & Consumable Fuels | 18.3% | |||
IT Services | 17.7% | |||
Thrifts & Mortgage Finance | 7.1% | |||
Banks | 5.7% | |||
Pharmaceuticals | 5.4% | |||
Automobiles | 5.3% | |||
Household Products | 4.1% | |||
Chemicals | 3.8% | |||
Insurance | 2.9% | |||
Construction Materials | 2.6% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE India 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 India Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 222.
franklintempleton.com | Semiannual Report | 53 |
FRANKLIN FTSE INDIA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India | 15.7% | |||
Infosys Ltd. IT Services, India | 8.2% | |||
Housing Development Finance Corp. Ltd. Thrifts & Mortgage Finance, India | 6.8% | |||
Tata Consultancy Services Ltd. IT Services, India | 5.3% | |||
Hindustan Unilever Ltd. Household Products, India | 4.1% | |||
Axis Bank Ltd. Banks, India | 2.2% | |||
HCL Technologies Ltd. IT Services, India | 2.0% | |||
Maruti Suzuki India Ltd. Automobiles, India | 1.9% | |||
Bharti Airtel Ltd. Wireless Telecommunication Services, India | 1.6% | |||
Asian Paints Ltd. Chemicals, India | 1.5% |
Thank you for your participation in Franklin FTSE India ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
54 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE INDIA ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +39.01% | +41.88% | +39.01% | +41.88% | ||||||||||||
1-Year | +1.35% | +1.46% | +1.35% | +1.46% | ||||||||||||
Since Inception (2/6/18) | -4.65% | -3.72% | -1.78% | -1.42% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 56 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 55 |
FRANKLIN FTSE INDIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.121088 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. There are special risks associated with investments in India, including exposure to currency fluctuations, less liquidity, expropriation, confiscatory taxation, and exchange control regulations (including currency blockage). Investments in securities of Indian issuers involve risks that are specific to India, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
56 | Semiannual Report | franklintempleton.com |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,390.10 | $ | 1.14 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 57 |
This semiannual report for Franklin FTSE Italy ETF covers the period ended September 30, 2020.
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.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +20.38% based on market price and +19.81% based on net asset value. In comparison, the FTSE Italy Capped Index posted a +19.65% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 60.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Italy Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Electric Utilities | 23.1% | |||
Banks | 19.2% | |||
Automobiles | 10.7% | |||
Insurance | 6.3% | |||
Oil, Gas & Consumable Fuels | 5.8% | |||
Gas Utilities | 4.5% | |||
Diversified Telecommunication Services | 3.6% | |||
Textiles, Apparel & Luxury Goods | 2.7% | |||
Transportation Infrastructure | 2.7% | |||
Machinery | 2.7% |
intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
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.
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 Statement of Investments (SOI). The SOI begins on page 227.
58 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE ITALY ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Enel SpA Electric Utilities, Italy | 19.9% | |||
Intesa Sanpaolo SpA Banks, Italy | 8.8% | |||
Ferrari NV Automobiles, Italy | 6.8% | |||
Eni SpA Oil, Gas & Consumable Fuels, Italy | 5.8% | |||
UniCredit SpA Banks, Italy | 5.4% | |||
Assicurazioni Generali SpA Insurance, Italy | 4.4% | |||
Fiat Chrysler Automobiles NV Automobiles, United Kingdom | 3.9% | |||
Snam SpA Gas Utilities, Italy | 3.4% | |||
Terna Rete Elettrica Nazionale SpA Electric Utilities, Italy | 3.2% | |||
FinecoBank Banca Fineco SpA Banks, Italy | 2.9% |
Thank you for your participation in Franklin FTSE Italy ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 59 |
FRANKLIN FTSE ITALY ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +19.81% | +20.38% | +19.81% | +20.38% | ||||||||||||
1-Year | -7.94% | -7.81% | -7.94% | -7.81% | ||||||||||||
Since Inception (11/2/17) | -11.60% | -11.49% | -4.15% | -4.11% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 61 for Performance Summary footnotes.
60 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE ITALY ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.401001 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Italian issuers involve risks that are specific to Italy, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 61 |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,198.10 | $ | 0.50 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
62 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin FTSE Japan ETF covers the period ended September 30, 2020.
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 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 and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +21.42% based on market price and +19.65% based on net asset value. In comparison, the FTSE Japan Capped Index posted a +19.69% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 65.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Japan Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 7.1% | |||
Automobiles | 6.5% | |||
Electronic Equipment, Instruments & Components | 6.3% | |||
Machinery | 5.4% | |||
Wireless Telecommunication Services | 5.3% | |||
Banks | 4.6% | |||
Chemicals | 4.5% | |||
Household Durables | 3.8% | |||
Road & Rail | 3.4% | |||
Trading Companies & Distributors | 3.3% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Japan 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 Japan Capped Index 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.
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 Statement of Investments (SOI). The SOI begins on page 229.
franklintempleton.com | Semiannual Report | 63 |
FRANKLIN FTSE JAPAN ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Toyota Motor Corp. Automobiles, Japan | 4.2% | |||
Sony Corp. Household Durables, Japan | 2.4% | |||
SoftBank Group Corp. Wireless Telecommunication Services, Japan | | 2.3% | | |
Keyence Corp. Electronic Equipment, Instruments & Components, Japan | 2.2% | |||
Nintendo Co. Ltd. Entertainment, Japan | 1.6% | |||
Daiichi Sankyo Co. Ltd. Pharmaceuticals, Japan | 1.5% | |||
Takeda Pharmaceutical Co. Ltd. Pharmaceuticals, Japan | 1.4% | |||
Shin-Etsu Chemical Co. Ltd. Chemicals, Japan | 1.3% | |||
Recruit Holdings Co. Ltd. Professional Services, Japan | 1.3% | |||
Mitsubishi UFJ Financial Group Inc. Banks, Japan | 1.3% |
Thank you for your participation in Franklin FTSE Japan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
64 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE JAPAN ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +19.65% | +21.42% | +19.65% | +21.42% | ||||||||||||
1-Year | +7.22% | +7.04% | +7.22% | +7.04% | ||||||||||||
Since Inception (11/2/17) | +5.27% | +5.90% | +1.78% | +1.99% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 66 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 65 |
FRANKLIN FTSE JAPAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.211054 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Japanese issuers involve risks that are specific to Japan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
66 | Semiannual Report | franklintempleton.com |
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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,196.50 | $ | 0.50 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 67 |
Franklin FTSE Japan Hedged ETF
This semiannual report for Franklin FTSE Japan Hedged ETF covers the period ended September 30, 2020.
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 Hedged to USD Index (the FTSE Japan Capped Hedged 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 Japan Capped Hedged Index and in depositary receipts representing such securities, including indirectly through Franklin FTSE Japan ETF (Underlying Fund).
Performance Overview
During the six-month, the Fund posted cumulative total returns of +19.50% based on market price and +17.14% based on net asset value. In comparison, the FTSE Japan Capped Hedged Index posted a +17.28% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 70.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Japan Capped Hedged Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 7.0% | |||
Automobiles | 6.5% | |||
Electronic Equipment, Instruments & Components | 6.2% | |||
Machinery | 5.3% | |||
Wireless Telecommunication Services | 5.3% | |||
Banks | 4.5% | |||
Chemicals | 4.4% | |||
Household Durables | 3.8% | |||
Road & Rail | 3.4% | |||
Trading Companies & Distributors | 3.3% |
Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. We intend to enter into monthly foreign currency forward contracts and/or currency futures contracts designed to offset the Fund’s exposure to the Japanese yen, in order to replicate the hedge impact incorporated in the calculation of the Underlying Index. The Fund’s exposure to foreign currency forward contracts and currency futures contracts is based on the aggregate exposure of the Fund to the Japanese yen. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Japan Capped Hedged 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 Japan Capped Hedged Index is based on the FTSE Japan Hedged to USD Index and is designed to measure the performance of Japanese large- and mid-capitalization stocks. The FTSE Japan Capped Hedged Index incorporates a hedge against fluctuations of the Japanese yen by reflecting the impact of rolling monthly currency forward contracts on the Japanese yen.
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.
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 Statement of Investments (SOI). The SOI begins on page 240.
68 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE JAPAN HEDGED ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Toyota Motor Corp. Automobiles, Japan | 4.1% | |||
Sony Corp. Household Durables, Japan | 2.4% | |||
SoftBank Group Corp. Wireless Telecommunication Services, Japan | 2.3% | |||
Keyence Corp. Electronic Equipment, Instruments & Components, Japan | 2.1% | |||
Nintendo Co. Ltd. Entertainment, Japan | 1.5% | |||
Daiichi Sankyo Co. Ltd. Pharmaceuticals, Japan | 1.5% | |||
Takeda Pharmaceutical Co. Ltd. Pharmaceuticals, Japan | 1.4% | |||
Shin-Etsu Chemical Co. Ltd. Chemicals, Japan | 1.3% | |||
Recruit Holdings Co. Ltd. Professional Services, Japan | 1.3% | |||
Mitsubishi UFJ Financial Group Inc. Banks, Japan | 1.3% |
Thank you for your participation in Franklin FTSE Japan Hedged ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 69 |
FRANKLIN FTSE JAPAN HEDGED ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +17.14% | +19.50% | +17.14% | +19.50% | ||||||||||||
1-Year | +5.88% | +5.62% | +5.88% | +5.62% | ||||||||||||
Since Inception (11/2/17) | +2.17% | +2.93% | +0.74% | +1.00% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 71 for Performance Summary footnotes.
70 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE JAPAN HEDGED ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Japanese issuers involve risks that are specific to Japan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio, which may result in significant volatility and cause the Fund to participate in losses on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. While the Fund’s use of foreign currency forward contracts and/or currency futures contracts is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Fund’s exposure to the Japanese yen. The return of these currency hedging instruments will not perfectly offset the actual fluctuations between the Japanese yen and the U.S. dollar. Currency hedges are sometimes subject to imperfect matching between the derivative instruments and the currencies that the derivative instruments intend to hedge, and there can be no assurance that the Fund’s hedging transactions will be effective. The Fund’s exposure to the Japanese yen may not be fully hedged at all times. Because the Fund’s currency hedge is generally reset on a monthly basis, currency risk can develop or increase intra-month. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 71 |
FRANKLIN FTSE JAPAN HEDGED 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,171.40 | $ | 0.49 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
72 | Semiannual Report | franklintempleton.com |
Franklin FTSE Latin America ETF
This semiannual report for Franklin FTSE Latin America ETF covers the period ended September 30, 2020.
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 Latin America RIC Capped Index (the FTSE Latin America 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 Latin America Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +18.38% based on market price and +17.76% based on net asset value. In comparison, the FTSE Latin America Capped Index posted a +17.86% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 75.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Latin America Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 17.6% | |||
Metals & Mining | 11.2% | |||
Oil, Gas & Consumable Fuels | 8.4% | |||
Beverages | 5.6% | |||
Electric Utilities | 5.2% | |||
Multiline Retail | 5.1% | |||
Capital Markets | 4.9% | |||
Food & Staples Retailing | 4.8% | |||
Wireless Telecommunication Services | 4.6% | |||
Food Products | 3.0% |
Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Latin America 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 Latin America Capped Index is based on the FTSE Latin America Index and is designed to measure the performance of Latin American 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.
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 Statement of Investments (SOI). The SOI begins on page 251.
franklintempleton.com | Semiannual Report | 73 |
FRANKLIN FTSE LATIN AMERICA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Vale SA Metals & Mining, Brazil | 7.3% | |||
Petroleo Brasileiro SA Oil, Gas & Consumable Fuels, Brazil | 6.2% | |||
Itau Unibanco Holding SA Banks, Brazil | 4.5% | |||
B3 SA – Brasil Bolsa Balcao Capital Markets, Brazil | 4.2% | |||
America Movil SAB de CV, L Wireless Telecommunication Services, Mexico | 4.0% | |||
Banco Bradesco SA Banks, Brazil | 3.9% | |||
Wal-Mart de Mexico SAB de CV, V Food & Staples Retailing, Mexico | 2.6% | |||
Magazine Luiza SA Multiline Retail, Brazil | 2.2% | |||
Fomento Economico Mexicano SAB de CV Beverages, Mexico | 2.2% | |||
Grupo Financiero Banorte SAB de CV Banks, Mexico | 2.1% |
Thank you for your participation in Franklin FTSE Latin America ETF. We look forward to serving your future investment needs.
Country Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Brazil | 64.9% | |||
Mexico | 23.6% | |||
Chile | 7.3% | |||
Colombia | 3.4% | |||
United States | 0.8% |
Dina Ting, CFA | ||
Louis Hsu, CFA | ||
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
74 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE LATIN AMERICA ETF
Performance Summary as of September 30, 2020
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 (10/11/18), 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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +17.76% | +18.38% | +17.76% | +18.38% | ||||||||||||
1-Year | -29.99%% | -29.51% | -29.99% | -29.51% | ||||||||||||
Since Inception (10/9/18) | -28.93% | -28.14% | -15.87% | -15.41% |
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 76 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 75 |
FRANKLIN FTSE LATIN AMERICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.162375 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Latin American issuers involve risks that are specific to Latin America, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
76 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE LATIN AMERICA 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,177.60 | $ | 1.04 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 77 |
This semiannual report for Franklin FTSE Mexico ETF covers the period ended September 30, 2020.
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 Mexico RIC Capped Index (the FTSE Mexico 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 Mexico Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +17.32% based on market price and +16.27% based on net asset value. In comparison, the FTSE Mexico Capped Index posted a +16.27% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 80.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Mexico Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Wireless Telecommunication Services | 14.7% | |||
Beverages | 13.9% | |||
Banks | 13.5% | |||
Food & Staples Retailing | 9.9% | |||
Metals & Mining | 8.8% | |||
Transportation Infrastructure | 8.5% | |||
Food Products | 7.2% | |||
Construction Materials | 4.5% | |||
Media | 3.7% | |||
Industrial Conglomerates | 3.0% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Mexico 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 Mexico Capped Index is based on the FTSE Mexico Index and is designed to measure the performance of Mexican 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.
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 Statement of Investments (SOI). The SOI begins on page 256.
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FRANKLIN FTSE MEXICO ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
America Movil SAB de CV, L Wireless Telecommunication Services, Mexico | 14.7% | |||
Wal-Mart de Mexico SAB de CV, V Food & Staples Retailing, Mexico | 9.9% | |||
Fomento Economico Mexicano SAB de CV Beverages, Mexico | 8.4% | |||
Grupo Financiero Banorte SAB de CV Banks, Mexico | 8.1% | |||
Grupo Mexico SAB de CV, B Metals & Mining, Mexico | 6.6% | |||
Cemex SAB de CV Construction Materials, Mexico | 4.5% | |||
Grupo Bimbo SAB de CV, A Food Products, Mexico | 3.7% | |||
Grupo Elektra SAB de CV Banks, Mexico | 3.2% | |||
Grupo Aeroportuario del Pacifico SAB de CV Transportation Infrastructure, Mexico | 3.2% | |||
Grupo Televisa SA Media, Mexico | 2.8% |
Thank you for your participation in Franklin FTSE Mexico ETF. We look forward to serving your future investment needs.
Dina Ting, CFA | ||
Louis Hsu, CFA | ||
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 79 |
FRANKLIN FTSE MEXICO ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +16.27% | +17.32% | +16.27% | +17.32% | ||||||||||||
1-Year | -21.90% | -22.05% | -21.90% | -22.05% | ||||||||||||
Since Inception (11/3/17) | -29.03% | -28.94% | -11.13% | -11.09% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 81 for Performance Summary footnotes.
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FRANKLIN FTSE MEXICO ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.129923 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risk related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Mexican issuers involve risks that are specific to Mexico, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 81 |
FRANKLIN FTSE MEXICO 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,162.70 | $ | 1.03 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
82 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin FTSE Russia ETF covers the period ended September 30, 2020.
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 Russia RIC Capped Index (the FTSE Russia 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 Russia Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +17.77% based on market price and +14.86% based on net asset value. In comparison, the FTSE Russia Capped Index posted a +14.79% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 85.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Russia Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Oil, Gas & Consumable Fuels | 45.3% | |||
Banks | 18.1% | |||
Metals & Mining | 17.4% | |||
Electric Utilities | 5.6% | |||
Wireless Telecommunication Services | 3.8% | |||
Food & Staples Retailing | 3.0% | |||
Capital Markets | 2.7% | |||
Chemicals | 1.5% | |||
Diversified Telecommunication Services | 1.4% | |||
Airlines | 0.6% |
intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Russia 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 Russia Capped Index is based on the FTSE Russia Index and is designed to measure the performance of Russian 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.
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 Statement of Investments (SOI). The SOI begins on page 258.
franklintempleton.com | Semiannual Report | 83 |
FRANKLIN FTSE RUSSIA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Sberbank of Russia PJSC Banks, Russia | 15.7% | |||
Gazprom PJSC Oil, Gas & Consumable Fuels, Russia | 12.2% | |||
LUKOIL PJSC Oil, Gas & Consumable Fuels, Russia | 11.7% | |||
Novatek PJSC Oil, Gas & Consumable Fuels, Russia | 8.0% | |||
MMC Norilsk Nickel PJSC Metals & Mining, Russia | 4.4% | |||
Surgutneftegas PJSC Oil, Gas & Consumable Fuels, Russia | 3.5% | |||
Tatneft PAO Oil, Gas & Consumable Fuels, Russia | 3.3% | |||
Rosneft PJSC Oil, Gas & Consumable Fuels, Russia | 3.2% | |||
Polyus Gold OJSC Metals & Mining, Russia | 3.1% | |||
Magnit PJSC Food & Staples Retailing, Russia | 3.1% |
Thank you for your participation in Franklin FTSE Russia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
84 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE RUSSIA ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +14.86% | +17.77% | +14.86% | +17.77% | ||||||||||||
1-Year | -13.71% | -13.42% | -13.71% | -13.42% | ||||||||||||
Since Inception (2/6/18) | -0.33% | -0.04% | -0.12% | -0.01% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 86 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 85 |
FRANKLIN FTSE RUSSIA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Russian issuers involve significant risks that are specific to Russia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
86 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE RUSSIA 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,148.60 | $ | 1.02 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 87 |
Franklin FTSE Saudi Arabia ETF
This semiannual report for Franklin FTSE Saudi Arabia ETF covers the period ended September 30, 2020.
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 Saudi Arabia RIC Capped Index (the FTSE Saudi Arabia 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 Saudi Arabia Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +24.98% based on market price and +25.89% based on net asset value. In comparison, the FTSE Saudi Arabia Capped Index posted a +26.17% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 90.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Saudi Arabia Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Banks | 38.2% | |||
Chemicals | 19.3% | |||
Oil, Gas & Consumable Fuels | 12.4% | |||
Diversified Telecommunication Services | 8.0% | |||
Food Products | 4.0% | |||
Metals & Mining | 2.3% | |||
Health Care Providers & Services | 2.1% | |||
Construction Materials | 2.1% | |||
Wireless Telecommunication Services | 2.0% | |||
Real Estate Management & Development | 1.9% |
intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Saudi Arabia 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 Saudi Arabia Capped Index is based on the FTSE Saudi Arabia Index and is designed to measure the performance of Saudi Arabian 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.
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 Statement of Investments (SOI). The SOI begins on page 260.
88 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE SAUDI ARABIA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Saudi Arabian Oil Co., 144A, Reg S Oil, Gas & Consumable Fuels, Saudi Arabia | 12.0% | |||
Al-Rajhi Bank Banks, Saudi Arabia | 10.6% | |||
Saudi Basic Industries Corp. Chemicals, Saudi Arabia | 10.4% | |||
Saudi Telecom Co. Diversified Telecommunication Services, Saudi Arabia | 8.0% | |||
National Commercial Bank Banks, Saudi Arabia | 6.7% | |||
Riyad Bank Banks, Saudi Arabia | 4.4% | |||
Samba Financial Group Banks, Saudi Arabia | 4.2% | |||
Saudi British Bank Banks, Saudi Arabia | 3.8% | |||
Banque Saudi Fransi Banks, Saudi Arabia | 2.6% | |||
Saudi Arabian Mining Co. Metals & Mining, Saudi Arabia | 2.3% |
Thank you for your participation in Franklin FTSE Saudi Arabia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 89 |
FRANKLIN FTSE SAUDI ARABIA ETF
Performance Summary as of September 30, 2020
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 (10/11/18), 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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +25.89% | +24.98% | +25.89% | +24.98% | ||||||||||||
1-Year | +0.51% | +0.83% | +0.51% | +0.83% | ||||||||||||
Since Inception (10/9/18) | +5.85% | +6.87% | +2.92% | +3.42% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 91 for Performance Summary footnotes.
90 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE SAUDI ARABIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.394125 |
Total Annual Operating Expenses4
0.39% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Saudi Arabian issuers involve risks that are specific to Saudi Arabia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 91 |
FRANKLIN FTSE SAUDI ARABIA 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/202 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,258.90 | $ | 2.21 | $ | 1,023.11 | $ | 1.98 | 0.39 | % |
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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
92 | Semiannual Report | franklintempleton.com |
Franklin FTSE South Africa ETF
This semiannual report for Franklin FTSE South Africa ETF covers the period ended September 30, 2020.
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/JSE South Africa RIC Capped Index (the FTSE/JSE South Africa 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/JSE South Africa Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +35.23% based on market price and +33.76% based on net asset value. In comparison, the FTSE/JSE South Africa Capped Index posted a +33.81% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 95.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE/JSE South Africa Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation.
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Metals & Mining | 23.6% | |||
Internet & Direct Marketing Retail | 21.0% | |||
Banks | 9.2% | |||
Food & Staples Retailing | 7.7% | |||
Diversified Financial Services | 6.9% | |||
Insurance | 6.8% | |||
Wireless Telecommunication Services | 5.1% | |||
Specialty Retail | 2.4% | |||
Equity Real Estate Investment Trusts (REITs) | 2.3% | |||
Chemicals | 2.1% |
Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE/JSE South Africa 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/JSE South Africa Capped Index is based on the FTSE South Africa Index and is designed to measure the performance of South African 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.
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 Statement of Investments (SOI). The SOI begins on page 263.
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FRANKLIN FTSE SOUTH AFRICA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Naspers Ltd., N Internet & Direct Marketing Retail, South Africa | 21.0% | |||
FirstRand Ltd. Diversified Financial Services, South Africa | 5.6% | |||
AngloGold Ashanti Ltd. Metals & Mining, South Africa | 5.3% | |||
Gold Fields Ltd. Metals & Mining, South Africa | 5.1% | |||
Standard Bank Group Ltd. Banks, South Africa | 4.0% | |||
Sibanye Stillwater Ltd. Metals & Mining, South Africa | 3.6% | |||
Impala Platinum Holdings Ltd. Metals & Mining, South Africa | 3.1% | |||
MTN Group Ltd. Wireless Telecommunication Services, South Africa | 2.9% | |||
Sanlam Ltd. Insurance, South Africa | 2.5% | |||
Bid Corp. Ltd. Food & Staples Retailing, South Africa | 2.5% |
Thank you for your participation in Franklin FTSE South Africa ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
94 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE SOUTH AFRICA ETF
Performance Summary as of September 30, 2020
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 (10/11/18), 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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +33.76% | +35.23% | +33.76% | +35.23% | ||||||||||||
1-Year | -11.96% | -12.14% | -11.96% | -12.14% | ||||||||||||
Since Inception (10/10/18) | -10.06% | -10.21% | -5.23% | -5.31% |
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 96 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 95 |
FRANKLIN FTSE SOUTH AFRICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.390893 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of South African issuers involve risks that are specific to South Africa, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
96 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE SOUTH AFRICA 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,337.60 | $ | 1.11 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 97 |
This semiannual report for Franklin FTSE South Korea ETF covers the period ended September 30, 2020.
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 South Korea RIC Capped Index (the FTSE South Korea 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 South Korea Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +39.90% based on market price and +37.41% based on net asset value. In comparison, the FTSE South Korea Capped Index posted a +37.45% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 100.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE South Korea Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Technology Hardware, Storage & Peripherals | 20.1% | |||
Interactive Media & Services | 8.1% | |||
Chemicals | 6.1% | |||
Banks | 6.1% | |||
Semiconductors & Semiconductor Equipment | 6.0% | |||
Automobiles | 5.8% | |||
Electronic Equipment, Instruments & Components | 5.0% | |||
Biotechnology | 4.4% | |||
Industrial Conglomerates | 3.4% | |||
Personal Products | 2.9% |
intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE South Korea 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 South Korea Capped Index is based on the FTSE South Korea Index and is designed to measure the performance of South Korean 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.
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 Statement of Investments (SOI). The SOI begins on page 266.
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FRANKLIN FTSE SOUTH KOREA ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea | 20.2% | |||
SK Hynix Inc. Semiconductors & Semiconductor Equipment, South Korea | 6.0% | |||
Naver Corp. Interactive Media & Services, South Korea | 5.4% | |||
LG Chem Ltd. Chemicals, South Korea | 4.4% | |||
Hyundai Motor Co. Automobiles, South Korea | 4.1% | |||
Celltrion Inc. Biotechnology, South Korea | 3.7% | |||
Samsung SDI Co. Ltd. Electronic Equipment, Instruments & Components, South Korea | 3.1% | |||
Kakao Corp. Interactive Media & Services, South Korea | 2.7% | |||
Hyundai Mobis Co. Ltd. Auto Components, South Korea | 2.0% | |||
KB Financial Group Inc. Banks, South Korea | 2.0% |
Thank you for your participation in Franklin FTSE South Korea ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 99 |
FRANKLIN FTSE SOUTH KOREA ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +37.41% | +39.90% | +37.41% | +39.90% | ||||||||||||
1-Year | +17.99% | +20.49% | +17.99% | +20.49% | ||||||||||||
Since Inception (11/2/17) | -7.17% | -5.39% | -2.53% | -1.89%% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 101 for Performance Summary footnotes.
100 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE SOUTH KOREA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of South Korean issuers involve risks that are specific to South Korea, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 101 |
FRANKLIN FTSE SOUTH KOREA 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,374.10 | $ | 0.54 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
102 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin FTSE Switzerland ETF covers the period ended September 30, 2020.
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 Switzerland RIC Capped Index (the FTSE Switzerland 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 Switzerland Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +18.70% based on market price and +18.23% based on net asset value. In comparison, the FTSE Switzerland Capped Index posted a +17.84% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 105.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Switzerland Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 27.8% | |||
Food Products | 22.0% | |||
Insurance | 7.6% | |||
Capital Markets | 6.8% | |||
Chemicals | 6.8% | |||
Health Care Equipment & Supplies | 3.9% | |||
Life Sciences Tools & Services | 3.7% | |||
Electrical Equipment | 3.7% | |||
Textiles, Apparel & Luxury Goods | 3.4% | |||
Machinery | 2.3% |
intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Switzerland 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 Switzerland Capped Index is based on the FTSE Switzerland Index and is designed to measure the performance of Swiss 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.
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 Statement of Investments (SOI). The SOI begins on page 271.
franklintempleton.com | Semiannual Report | 103 |
FRANKLIN FTSE SWITZERLAND ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Nestle SA Food Products, Switzerland | 20.1% | |||
Roche Holding AG Pharmaceuticals, Switzerland | 15.5% | |||
Novartis AG Pharmaceuticals, Switzerland | 11.8% | |||
Zurich Insurance Group AG Insurance, Switzerland | 4.3% | |||
Lonza Group AG Life Sciences Tools & Services, Switzerland | 3.7% | |||
ABB Ltd. Electrical Equipment, Switzerland | 3.7% | |||
Givaudan AG Chemicals, Switzerland | 3.2% | |||
UBS Group AG Capital Markets, Switzerland | 3.0% | |||
Cie Financiere Richemont SA Textiles, Apparel & Luxury Goods, Switzerland | 2.7% | |||
Sika AG Chemicals, Switzerland | 2.7% |
Thank you for your participation in Franklin FTSE Switzerland ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
104 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE SWITZERLAND ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +18.23% | +18.70% | +18.23% | +18.70% | ||||||||||||
1-Year | +12.77% | +12.44% | +12.77% | +12.44% | ||||||||||||
Since Inception (2/6/18) | +27.64% | +27.56% | +9.66% | +9.63% |
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 106 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 105 |
FRANKLIN FTSE SWITZERLAND ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.640628 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Swiss issuers involve risks that are specific to Switzerland, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
106 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE SWITZERLAND 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,182.30 | $ | 0.49 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 107 |
This semiannual report for Franklin FTSE Taiwan ETF covers the period ended September 30, 2020.
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 Taiwan RIC Capped Index (the FTSE Taiwan 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 Taiwan Capped Index and in depositary receipts representing such securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +35.21% based on market price and +34.17% based on net asset value. In comparison, the FTSE Taiwan Capped Index posted a +34.37% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 110.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Taiwan Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Semiconductors & Semiconductor Equipment | 35.4% | |||
Electronic Equipment, Instruments & Components | 12.1% | |||
Banks | 11.8% | |||
Technology Hardware, Storage & Peripherals | 8.0% | |||
Insurance | 5.1% | |||
Chemicals | 5.1% | |||
Diversified Telecommunication Services | 2.4% | |||
Diversified Financial Services | 2.2% | |||
Construction Materials | 1.8% | |||
Food Products | 1.7% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Taiwan 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 Taiwan Capped Index is based on the FTSE Taiwan Index and is designed to measure the performance of Taiwanese 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.
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 Statement of Investments (SOI). The SOI begins on page 274.
108 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE TAIWAN ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | 21.7% | |||
MediaTek Inc. Semiconductors & Semiconductor Equipment, Taiwan | 5.1% | |||
Hon Hai Precision Industry Co. Ltd. Electronic Equipment, Instruments & Components, Taiwan | 4.3% | |||
Chunghwa Telecom Co. Ltd. Diversified Telecommunication Services, Taiwan | 2.4% | |||
Delta Electronics Inc. Electronic Equipment, Instruments & Components, Taiwan | 2.3% | |||
Formosa Plastics Corp. Chemicals, Taiwan | 2.2% | |||
Nan Ya Plastics Corp. Chemicals, Taiwan | 1.9% | |||
CTBC Financial Holding Co. Ltd. Banks, Taiwan | 1.9% | |||
United Microelectronics Corp. Semiconductors & Semiconductor Equipment, Taiwan | 1.9% | |||
Cathay Financial Holding Co. Ltd. Insurance, Taiwan | 1.8% |
Thank you for your participation in Franklin FTSE Taiwan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 109 |
FRANKLIN FTSE TAIWAN ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +34.17% | +35.21% | +34.17% | +35.21% | ||||||||||||
1-Year | +24.61% | +24.76% | +24.61% | +24.76% | ||||||||||||
Since Inception (11/2/17) | +26.68% | +27.46% | +8.47% | +8.70% |
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 111 for Performance Summary footnotes.
110 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE TAIWAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.018938 |
Total Annual Operating Expenses4
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Taiwanese issuers involve risks that are specific to Taiwan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a Fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 111 |
FRANKLIN FTSE TAIWAN 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,341.70 | $ | 1.12 | $ | 1,024.12 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
112 | Semiannual Report | franklintempleton.com |
Franklin FTSE United Kingdom ETF
This semiannual report for Franklin FTSE United Kingdom ETF covers the period ended September 30, 2020.
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 UK RIC Capped Index (the FTSE UK 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 UK Capped Index and in depositary receipts representing such securities.
Performance Overview
For the six-month period, the Fund posted cumulative total returns of +10.33% based on market price and +9.39% based on net asset value. In comparison, the FTSE UK Capped Index posted a +9.31% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 115.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE UK Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 12.2% | |||
Metals & Mining | 9.1% | |||
Oil, Gas & Consumable Fuels | 7.8% | |||
Banks | 7.2% | |||
Tobacco | 5.0% | |||
Insurance | 4.7% | |||
Professional Services | 4.5% | |||
Beverages | 4.2% | |||
Capital Markets | 4.1% | |||
Hotels, Restaurants & Leisure | 3.5% |
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE UK 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 UK Capped Index is based on the FTSE UK Index and is designed to measure the performance of U.K. 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.
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 Statement of Investments (SOI). The SOI begins on page 278.
franklintempleton.com | Semiannual Report | 113 |
FRANKLIN FTSE UNITED KINGDOM ETF
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
AstraZeneca PLC Pharmaceuticals, United Kingdom | 7.3% | |||
Royal Dutch Shell PLC, A, B Oil, Gas & Consumable Fuels, United Kingdom | 4.9% | |||
GlaxoSmithKline PLC Pharmaceuticals, United Kingdom | 4.7% | |||
British American Tobacco PLC Tobacco, United Kingdom | 4.1% | |||
HSBC Holdings PLC Banks, United Kingdom | 4.0% | |||
Diageo PLC Beverages, United Kingdom | 4.0% | |||
Unilever PLC Personal Products, United Kingdom | 3.4% | |||
Rio Tinto PLC Metals & Mining, Australia | 3.3% | |||
Reckitt Benckiser Group PLC Household Products, United Kingdom | 3.1% | |||
BP PLC Oil, Gas & Consumable Fuels, United Kingdom | 2.9% |
Thank you for your participation in Franklin FTSE United Kingdom ETF. We look forward to serving your future investment needs.
Dina Ting, CFA |
Louis Hsu, CFA |
Hailey Harris | ||
Portfolio Management Team |
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
114 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE UNITED KINGDOM ETF
Performance Summary as of September 30, 2020
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 9/30/20
Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
6-Month | +9.39% | +10.33% | +9.39% | +10.33% | ||||||||||||
1-Year | -14.08% | -14.53% | -14.08% | -14.53% | ||||||||||||
Since Inception (11/2/17) | -14.04% | -14.43% | -5.07% | -5.21% |
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 116 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 115 |
FRANKLIN FTSE UNITED KINGDOM ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.318590 |
Total Annual Operating Expenses4
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of issuers in U.K. countries involve risks that are specific to the U.K., including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
116 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE UNITED KINGDOM 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,093.90 | $ | 0.47 | $ | 1,024.62 | $ | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 117 |
FRANKLIN TEMPLETON ETF TRUST
Franklin FTSE Asia ex Japan ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 18.39 | $ | 21.86 | $ | 23.63 | $ | 23.64 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.33 | 0.49 | 0.51 | 0.04 | ||||||||||||
Net realized and unrealized gains (losses) | 5.05 | (3.46 | ) | (1.82 | ) | (0.05 | ) | |||||||||
|
| |||||||||||||||
Total from investment operations | 5.38 | (2.97 | ) | (1.31 | ) | (0.01 | ) | |||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.08 | ) | (0.50 | ) | (0.46 | ) | — | |||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 23.69 | $ | 18.39 | $ | 21.86 | $ | 23.63 | ||||||||
|
| |||||||||||||||
Total returnd | 29.28% | (13.88)% | (5.34)% | (0.04)% | ||||||||||||
Ratios to average net assetse |
| |||||||||||||||
Expenses before waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | 0.19% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.19% | 0.19% | —% | —% | ||||||||||||
Net investment income | 3.00% | 2.32% | 2.34% | 1.06% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $18,951 | $14,712 | $17,488 | $9,451 | ||||||||||||
Portfolio turnover ratef | 5.73% | g | 11.42% | g | 7.11% | 0.96% |
aFor the period February 6, 2018 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 5.73% | 11.42% | —% | —% |
118 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Asia ex Japan ETF
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests 99.1% | ||||||||||||||
Cambodia 0.0%† | ||||||||||||||
NagaCorp Ltd. | Hotels, Restaurants & Leisure | 4,000 | $ | 4,753 | ||||||||||
|
| |||||||||||||
China 45.5% | ||||||||||||||
360 Security Technology Inc., A | Software | 600 | 1,463 | |||||||||||
a | 3SBio Inc. | Biotechnology | 4,000 | 4,501 | ||||||||||
a | 51job Inc., ADR | Professional Services | 80 | 6,239 | ||||||||||
A-Living Services Co. Ltd., H | Commercial Services & Supplies | 1,000 | 5,058 | |||||||||||
AAC Technologies Holdings Inc. | Electronic Equipment, Instruments & Components | 2,000 | 10,774 | |||||||||||
AECC Aero-Engine Control Co. Ltd. | Aerospace & Defense | 200 | 580 | |||||||||||
AECC Aviation Power Co. Ltd., A | Aerospace & Defense | 400 | 2,431 | |||||||||||
Agile Group Holdings Ltd. | Real Estate Management & Development | 4,000 | 5,223 | |||||||||||
Agricultural Bank of China Ltd., A | Banks | 28,400 | 13,266 | |||||||||||
Agricultural Bank of China Ltd., H | Banks | 102,000 | 31,850 | |||||||||||
Aier Eye Hospital Group Co. Ltd. | Health Care Providers & Services | 880 | 6,668 | |||||||||||
Air China Ltd., A | Airlines | 2,200 | 2,298 | |||||||||||
Air China Ltd., H | Airlines | 4,000 | 2,617 | |||||||||||
Airtac International Group | Machinery | 480 | 10,789 | |||||||||||
Aisino Co. Ltd., A | Software | 600 | 1,394 | |||||||||||
a | Alibaba Group Holding Ltd., ADR | Internet & Direct Marketing Retail | 5,610 | 1,649,228 | ||||||||||
a | Alibaba Health Information Technology Ltd. | Health Care Technology | 14,000 | 34,106 | ||||||||||
a | Alpha Group | Leisure Products | 200 | 200 | ||||||||||
a | Aluminum Corp. of China Ltd., A | Metals & Mining | 1,800 | 772 | ||||||||||
a | Aluminum Corp. of China Ltd., H | Metals & Mining | 16,000 | 3,262 | ||||||||||
An Hui Wenergy Co. Ltd. | Independent Power and Renewable Electricity Producers | 600 | 366 | |||||||||||
Angang Steel Co. Ltd. | Metals & Mining | 1,000 | 382 | |||||||||||
Angang Steel Co. Ltd., H | Metals & Mining | 4,000 | 1,068 | |||||||||||
Angel Yeast Co. Ltd., A | Food Products | 200 | 1,797 | |||||||||||
Anhui Anke Biotechnology Group Co. Ltd. | Biotechnology | 260 | 621 | |||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 1,000 | 8,143 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 4,000 | 27,510 | |||||||||||
Anhui Expressway Co. Ltd., A | Transportation Infrastructure | 1,600 | 1,221 | |||||||||||
Anhui Gujing Distillery Co. Ltd., A | Beverages | 100 | 3,194 | |||||||||||
Anhui Gujing Distillery Co. Ltd., B | Beverages | 400 | 4,440 | |||||||||||
Anhui Xinhua Media Co. Ltd., A | Distributors | 200 | 156 | |||||||||||
Anhui Zhongding Sealing Parts Co. Ltd. | Auto Components | 200 | 306 | |||||||||||
Anta Sports Products Ltd. | Textiles, Apparel & Luxury Goods | 4,000 | 41,342 | |||||||||||
Autohome Inc., ADR | Interactive Media & Services | 194 | 18,624 | |||||||||||
Avary Holding Shenzhen Co. Ltd., A | Electronic Equipment, Instruments & Components | 200 | 1,685 | |||||||||||
AVIC Aircraft Co. Ltd. | Aerospace & Defense | 1,000 | 3,392 | |||||||||||
Avic Capital Co. Ltd., A | Diversified Financial Services | 3,400 | 2,199 | |||||||||||
AVIC Electromechanical Systems Co. Ltd. | Aerospace & Defense | 600 | 1,014 | |||||||||||
Avic Heavy Machinery Co. Ltd., A | Machinery | 200 | 412 | |||||||||||
AVIC Jonhon OptronicTechnology Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 1,365 | |||||||||||
AVIC Shenyang Aircraft Co. Ltd., A | Aerospace & Defense | 200 | 1,688 | |||||||||||
AviChina Industry & Technology Co. Ltd., H | Aerospace & Defense | 8,000 | 4,552 | |||||||||||
BAIC Motor Corp. Ltd., H | Automobiles | 8,000 | 3,252 | |||||||||||
a | Baidu Inc., ADR | Interactive Media & Services | 868 | 109,880 | ||||||||||
Bank of Beijing Co. Ltd., A | Banks | 4,800 | 3,310 | |||||||||||
Bank of Changsha Co. Ltd., A | Banks | 600 | 780 | |||||||||||
Bank of Chengdu Co. Ltd., A | Banks | 200 | 291 | |||||||||||
Bank of China Ltd., A | Banks | 16,000 | 7,545 | |||||||||||
Bank of China Ltd., H | Banks | 242,000 | 74,942 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 8,000 | 5,352 |
franklintempleton.com | Semiannual Report | 119 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Bank of Communications Co. Ltd., H | Banks | 24,000 | $ | 11,520 | ||||||||||
Bank of Hangzhou Co. Ltd. | Banks | 1,400 | 2,430 | |||||||||||
Bank of Jiangsu Co. Ltd., A | Banks | 600 | 538 | |||||||||||
�� | Bank of Nanjing Co. Ltd., A | Banks | 2,200 | 2,558 | ||||||||||
Bank of Ningbo Co. Ltd., A | Banks | 1,200 | 5,567 | |||||||||||
Bank of Qingdao Co. Ltd., A | Banks | 200 | 149 | |||||||||||
Bank of Shanghai Co. Ltd., A | Banks | 3,080 | 3,694 | |||||||||||
Bank of Zhengzhou Co. Ltd. | Banks | 440 | 243 | |||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 4,000 | 2,941 | |||||||||||
BBMG Corp., A | Construction Materials | 3,800 | 1,719 | |||||||||||
BBMG Corp., H | Construction Materials | 8,000 | 1,476 | |||||||||||
Beijing Capital Co. Ltd., A | Water Utilities | 2,800 | 1,197 | |||||||||||
Beijing Capital Development Co. Ltd., A | Real Estate Management & Development | 400 | 394 | |||||||||||
Beijing Capital International Airport Co. Ltd. | Transportation Infrastructure | 4,000 | 2,400 | |||||||||||
Beijing Dabeinong Technology Group Co. Ltd. | Food Products | 600 | 791 | |||||||||||
Beijing Enlight Media Co. Ltd. | Entertainment | 400 | 982 | |||||||||||
Beijing Enterprises Holdings Ltd. | Gas Utilities | 2,000 | 6,000 | |||||||||||
Beijing Enterprises Water Group Ltd. | Water Utilities | 20,000 | 7,742 | |||||||||||
Beijing Jingneng Clean Energy Co. Ltd., H | Independent Power and Renewable Electricity Producers | 4,000 | 1,017 | |||||||||||
Beijing Kunlun Tech Co. Ltd. | Entertainment | 400 | 1,535 | |||||||||||
Beijing New Building Materials PLC | Building Products | 400 | 1,821 | |||||||||||
Beijing North Star Co. Ltd., A | Real Estate Management & Development | 400 | 153 | |||||||||||
Beijing North Star Co. Ltd., H | Real Estate Management & Development | 4,000 | 748 | |||||||||||
Beijing Orient National Communication Science &Technology Co. Ltd. | Software | 200 | 385 | |||||||||||
Beijing Oriental Yuhong Waterproof Technology Co. Ltd. | Construction Materials | 400 | 3,177 | |||||||||||
Beijing Originwater Technology Co. Ltd. | Commercial Services & Supplies | 400 | 513 | |||||||||||
Beijing Sanju Environmental Protection and New Material Co. Ltd. | Chemicals | 200 | 196 | |||||||||||
Beijing Shiji Information Technology Co. Ltd. | Software | 400 | 2,258 | |||||||||||
Beijing Shunxin Agriculture Co. Ltd., A | Beverages | 200 | 1,773 | |||||||||||
Beijing Sinnet Technology Co. Ltd., A | IT Services | 400 | 1,318 | |||||||||||
Beijing SL Pharmaceutical Co. Ltd. | Biotechnology | 200 | 344 | |||||||||||
Beijing Tiantan Biological Products Corp. Ltd., A | Biotechnology | 240 | 1,406 | |||||||||||
Beijing Tongrentang Co. Ltd., A | Pharmaceuticals | 200 | 795 | |||||||||||
a | Beijing Ultrapower Software Co. Ltd. | IT Services | 400 | 327 | ||||||||||
Beijing Yanjing Brewery Co. Ltd. | Beverages | 400 | 497 | |||||||||||
Beijing Zhong Ke San Huan High-Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 271 | |||||||||||
Beijing-Shanghai High Speed Railway Co. Ltd. | Road & Rail | 2,000 | 1,724 | |||||||||||
Better Life Commercial Chain Share Co. Ltd. | Food & Staples Retailing | 200 | 315 | |||||||||||
a | Bilibili Inc., ADR | Entertainment | 462 | 19,219 | ||||||||||
a | Bluefocus Intelligent Communications Group Co. Ltd. | Media | 400 | 432 | ||||||||||
Bluestar Adisseo Co., A | Chemicals | 200 | 376 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 2,800 | 1,087 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 7,800 | 5,643 | |||||||||||
Bosideng International Holdings Ltd. | Textiles, Apparel & Luxury Goods | 8,000 | 2,477 | |||||||||||
Boya Bio-pharmaceutical Group Co. Ltd. | Biotechnology | 400 | 2,372 |
120 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Bright Dairy & Food Co. Ltd., A | Food Products | 200 | $ | 493 | ||||||||||
Brilliance China Automotive Holdings Ltd. | Automobiles | 8,000 | 7,505 | |||||||||||
BTG Hotels Group Co. Ltd., A | Hotels, Restaurants & Leisure | 200 | 523 | |||||||||||
Budweiser Brewing Co. APAC Ltd. | Beverages | 5,400 | 15,677 | |||||||||||
By-health Co. Ltd., A | Personal Products | 400 | 1,238 | |||||||||||
BYD Co. Ltd. | Automobiles | 400 | 6,851 | |||||||||||
BYD Co. Ltd., H | Automobiles | 2,000 | 31,329 | |||||||||||
BYD Electronic International Co. Ltd. | Communications Equipment | 2,500 | 12,565 | |||||||||||
Caitong Securities Co. Ltd., A | Capital Markets | 200 | 421 | |||||||||||
Camel Group Co. Ltd., A | Electrical Equipment | 260 | 293 | |||||||||||
a,b,c | CanSino Biologics Inc., 144A, Reg S | Pharmaceuticals | 200 | 4,243 | ||||||||||
CECEP Solar Energy Co. Ltd. | Independent Power and Renewable Electricity Producers | 800 | 546 | |||||||||||
CECEP Wind-Power Corp | Independent Power and Renewable Electricity Producers | 400 | 163 | |||||||||||
Central China Securities Co. Ltd., A | Capital Markets | 600 | 477 | |||||||||||
Central China Securities Co. Ltd., H | Capital Markets | 2,000 | 364 | |||||||||||
Centre Testing International Group Co. Ltd., A | Professional Services | 400 | 1,440 | |||||||||||
CGN Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 2,400 | 1,015 | |||||||||||
CGN Power Co. Ltd., H | Independent Power and Renewable Electricity Producers | 38,000 | 7,796 | |||||||||||
Changchun High & New Technology Industry Group Inc. | Pharmaceuticals | 100 | 5,447 | |||||||||||
Changjiang Securities Co. Ltd. | Capital Markets | 2,000 | 2,364 | |||||||||||
Changzhou Xingyu Automotive Lighting Systems Co. Ltd., A | Auto Components | 100 | 2,206 | |||||||||||
Chaozhou Three-Circle Group Co. Ltd. | Electronic Equipment, Instruments & Components | 600 | 2,553 | |||||||||||
Chengdu Xingrong Environment Co. Ltd. | Water Utilities | 800 | 601 | |||||||||||
China Aerospace Times Electronics Co. Ltd., A | Aerospace & Defense | 400 | 415 | |||||||||||
China Aoyuan Group Ltd. | Real Estate Management & Development | 4,000 | 4,083 | |||||||||||
China Avic Avionics Equipment Co. Ltd., A | Aerospace & Defense | 200 | 502 | |||||||||||
China Baoan Group Co. Ltd. | Industrial Conglomerates | 200 | 206 | |||||||||||
a | China Biologic Products Holdings Inc. | Biotechnology | 78 | 8,669 | ||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 32,000 | 5,987 | |||||||||||
China CITIC Bank Corp. Ltd., A | Banks | 2,200 | 1,637 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 30,000 | 11,574 | |||||||||||
China Coal Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 600 | 347 | |||||||||||
China Coal Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 8,000 | 1,951 | |||||||||||
China Communications Construction Co. Ltd., A | Construction & Engineering | 800 | 876 | |||||||||||
China Communications Construction Co. Ltd., H | Construction & Engineering | 16,000 | 8,361 | |||||||||||
China Communications Services Corp. Ltd. | Construction & Engineering | 8,000 | 4,686 | |||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 5,000 | 23,161 | |||||||||||
China Construction Bank Corp., A | Banks | 1,600 | 1,450 | |||||||||||
China Construction Bank Corp., H | Banks | 298,000 | 193,027 | |||||||||||
a | China COSCO Holdings Co. Ltd., A | Marine | 3,200 | 2,702 | ||||||||||
a | China CSSC Holdings Ltd., A | Machinery | 600 | 1,632 | ||||||||||
China CYTS Tours Holding Co. Ltd., A | Hotels, Restaurants & Leisure | 200 | 324 | |||||||||||
b,c | China East Education Holdings Ltd., 144A, Reg S | Diversified Consumer Services | 1,000 | 2,165 | ||||||||||
China Eastern Airlines Corp. Ltd., A | Airlines | 1,200 | 874 | |||||||||||
China Eastern Airlines Corp. Ltd., H | Airlines | 4,000 | 1,708 | |||||||||||
China Enterprise Co. Ltd., A | Real Estate Management & Development | 600 | 345 | |||||||||||
China Everbright Bank Co. Ltd., A | Banks | 8,600 | 4,626 |
franklintempleton.com | Semiannual Report | 121 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
China Everbright Bank Co. Ltd., H | Banks | 10,000 | $ | 3,148 | ||||||||||
China Everbright Environment Group Ltd. | Commercial Services & Supplies | 10,503 | 5,963 | |||||||||||
China Everbright Ltd. | Capital Markets | 2,000 | 2,668 | |||||||||||
China Evergrande Group | Real Estate Management & Development | 6,000 | 15,252 | |||||||||||
b,c | China Feihe Ltd., 144A, Reg S | Food Products | 8,000 | 18,560 | ||||||||||
China Film Co. Ltd., A | Entertainment | 200 | 415 | |||||||||||
China Fortune Land Development Co. Ltd., A | Real Estate Management & Development | 1,040 | 2,325 | |||||||||||
China Galaxy Securities Co. Ltd., A | Capital Markets | 400 | 748 | |||||||||||
China Galaxy Securities Co. Ltd., H | Capital Markets | 12,000 | 6,736 | |||||||||||
China Gas Holdings Ltd. | Gas Utilities | 8,000 | 22,710 | |||||||||||
China Gezhouba Group Co. Ltd., A | Construction & Engineering | 800 | 700 | |||||||||||
China Great Wall Securities Co. Ltd., A | Capital Markets | 400 | 769 | |||||||||||
China Greatwall Technology Group Co. Ltd. | Technology Hardware, Storage & Peripherals | 400 | 945 | |||||||||||
China Hongqiao Group Ltd. | Metals & Mining | 9,000 | 5,609 | |||||||||||
China Huarong Asset Management Co. Ltd., H | Capital Markets | 36,000 | 3,809 | |||||||||||
a | China International Capital Corp. Ltd., H | Capital Markets | 4,000 | 9,218 | ||||||||||
China International Marine Containers (Group) Co. Ltd., H | Machinery | 1,400 | 1,512 | |||||||||||
China International Marine Containers Group Co. Ltd. | Machinery | 600 | 792 | |||||||||||
China Jinmao Holdings Group Ltd. | Real Estate Management & Development | 20,000 | 11,019 | |||||||||||
China Jushi Co. Ltd., A | Construction Materials | 600 | 1,277 | |||||||||||
China Lesso Group Holdings Ltd. | Building Products | 3,000 | 5,388 | |||||||||||
China Life Insurance Co. Ltd., A | Insurance | 1,200 | 7,856 | |||||||||||
China Life Insurance Co. Ltd., H | Insurance | 24,000 | 53,698 | |||||||||||
a | China Literature Ltd. | Media | 800 | 5,982 | ||||||||||
China Lodging Group Ltd., ADR | Hotels, Restaurants & Leisure | 460 | 19,890 | |||||||||||
China Longyuan Power Group Corp. | Independent Power and Renewable Electricity Producers | 12,000 | 7,494 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 4,000 | 4,403 | |||||||||||
China Meheco Co. Ltd., A | Trading Companies & Distributors | 200 | 434 | |||||||||||
China Mengniu Dairy Co. Ltd. | Food Products | 8,000 | 37,471 | |||||||||||
China Merchants Bank Co. Ltd., A | Banks | 4,600 | 24,402 | |||||||||||
China Merchants Bank Co. Ltd., H | Banks | 12,000 | 56,594 | |||||||||||
China Merchants Energy Shipping Co. Ltd., A | Oil, Gas & Consumable Fuels | 2,400 | 2,037 | |||||||||||
China Merchants Expressway Network & Technology Holdings Co. Ltd. | Transportation Infrastructure | 200 | 196 | |||||||||||
China Merchants Port Holdings Co. Ltd. | Transportation Infrastructure | 4,000 | 4,067 | |||||||||||
a | China Merchants Securities Co. Ltd. | Capital Markets | 3,600 | 4,274 | ||||||||||
a | China Merchants Securities Co. Ltd., A | Capital Markets | 1,820 | 5,796 | ||||||||||
China Merchants Shekou Industrial Zone Holdings Co. Ltd., A | Real Estate Management & Development | 1,800 | 4,018 | |||||||||||
China Minsheng Banking Corp. Ltd., A | Banks | 6,400 | 4,998 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 21,000 | 11,001 | |||||||||||
China Mobile Ltd. | Wireless Telecommunication Services | 17,000 | 108,471 | |||||||||||
China Molybdenum Co. Ltd., A | Metals & Mining | 3,600 | 1,973 | |||||||||||
China Molybdenum Co. Ltd., H | Metals & Mining | 12,000 | 4,243 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 12,000 | 15,143 | |||||||||||
China National Chemical Engineering Co. Ltd., A | Construction & Engineering | 1,600 | 1,268 | |||||||||||
China National Medicines Corp. Ltd., A | Health Care Providers & Services | 200 | 1,284 | |||||||||||
China National Nuclear Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 3,800 | 2,458 |
122 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
China National Software & Service Co. Ltd., A | Software | 200 | $ | 2,447 | ||||||||||
a | China Nonferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd. | Metals & Mining | 400 | 265 | ||||||||||
a | China Northern Rare Earth Group High-Tech Co. Ltd., A | Metals & Mining | 600 | 950 | ||||||||||
China Oilfield Services Ltd., A | Energy Equipment & Services | 400 | 683 | |||||||||||
China Oilfield Services Ltd., H | Energy Equipment & Services | 4,000 | 2,777 | |||||||||||
China Orient Securities Co. Ltd., A | Capital Markets | 1,400 | 2,275 | |||||||||||
China Overseas Land & Investment Ltd. | Real Estate Management & Development | 12,000 | 30,039 | |||||||||||
China Pacific Insurance Group Co. Ltd., A | Insurance | 1,400 | 6,439 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 8,400 | 23,737 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 8,800 | 5,070 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 80,000 | 32,103 | |||||||||||
China Power International Development Ltd. | Independent Power and Renewable Electricity Producers | 16,000 | 2,952 | |||||||||||
China Railway Construction Corp. Ltd., A | Construction & Engineering | 2,600 | 3,176 | |||||||||||
China Railway Construction Corp. Ltd., H | Construction & Engineering | 7,000 | 4,814 | |||||||||||
China Railway Group Ltd., A | Construction & Engineering | 4,400 | 3,495 | |||||||||||
China Railway Group Ltd., H | Construction & Engineering | 14,000 | 6,576 | |||||||||||
c | China Railway Signal & Communication Corp. Ltd., H, Reg S | Electronic Equipment, Instruments & Components | 6,000 | 1,966 | ||||||||||
China Railway Tielong Container Logistics Co. Ltd., A | Road & Rail | 400 | 304 | |||||||||||
China Reinsurance Group Corp., H | Insurance | 22,000 | 2,015 | |||||||||||
China Resources Beer Holdings Co. Ltd. | Beverages | 5,200 | 31,804 | |||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 8,000 | 10,921 | |||||||||||
China Resources Double Crane Pharmaceutical Co. Ltd., A | Pharmaceuticals | 200 | 373 | |||||||||||
China Resources Gas Group Ltd. | Gas Utilities | 3,000 | 13,394 | |||||||||||
China Resources Land Ltd. | Real Estate Management & Development | 9,000 | 40,529 | |||||||||||
China Resources Pharmaceutical Group Ltd. | Pharmaceuticals | 6,000 | 3,081 | |||||||||||
China Resources Power Holdings Co. Ltd. | Independent Power and Renewable Electricity Producers | 7,000 | 7,723 | |||||||||||
China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. | Pharmaceuticals | 200 | 754 | |||||||||||
China Satellite Communications Co. Ltd., A | Media | 600 | 1,714 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 1,400 | 3,398 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 11,000 | 19,729 | |||||||||||
a | China Shipbuilding Industry Co. Ltd., A | Machinery | 5,600 | 3,581 | ||||||||||
China Shipping Container Lines Co. Ltd., A | Trading Companies & Distributors | 600 | 184 | |||||||||||
China Shipping Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 400 | 417 | |||||||||||
China South Publishing & Media Group Co. Ltd., A | Media | 400 | 640 | |||||||||||
a | China Southern Airlines Co. Ltd., A | Airlines | 2,800 | 2,393 | ||||||||||
a | China Southern Airlines Co. Ltd., H | Airlines | 4,000 | 2,157 | ||||||||||
China Spacesat Co. Ltd., A | Aerospace & Defense | 200 | 980 | |||||||||||
China State Construction Engineering Corp. Ltd., A | Construction & Engineering | 9,000 | 6,737 | |||||||||||
China State Construction International Holdings Ltd. | Construction & Engineering | 4,000 | 2,606 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 4,800 | 7,296 | |||||||||||
China Telecom Corp. Ltd., H | Diversified Telecommunication Services | 44,000 | 13,172 |
franklintempleton.com | Semiannual Report | 123 |
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STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
China Tourism Group Duty Free Corp. Ltd., A | Specialty Retail | 400 | $ | 13,141 | ||||||||||
b,c | China Tower Corp. Ltd., H, 144A, Reg S | Diversified Telecommunication Services | 152,000 | 26,281 | ||||||||||
China Traditional Chinese Medicine Co. Ltd. | Pharmaceuticals | 8,000 | 3,345 | |||||||||||
China TransInfo Technology Co. Ltd. | IT Services | 600 | 1,942 | |||||||||||
a | China Travel International Investment Hong Kong Ltd. | Hotels, Restaurants & Leisure | 8,000 | 1,125 | ||||||||||
China Unicom (Hong Kong) Ltd. | Diversified Telecommunication Services | 20,000 | 13,032 | |||||||||||
China United Network Communications Ltd., A | Wireless Telecommunication Services | 7,200 | 5,146 | |||||||||||
China Vanke Co. Ltd., A | Real Estate Management & Development | 2,200 | 9,084 | |||||||||||
China Vanke Co. Ltd., H | Real Estate Management & Development | 6,000 | 18,310 | |||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 3,000 | 8,457 | |||||||||||
China Zheshang Bank Co. Ltd., A | Banks | 2,200 | 1,368 | |||||||||||
a | China Zhongwang Holdings Ltd. | Metals & Mining | 4,800 | 811 | ||||||||||
Chinese Universe Publishing and Media Group Co. Ltd., A | Media | 200 | 344 | |||||||||||
Chongqing Brewery Co. Ltd., A | Beverages | 200 | 3,041 | |||||||||||
a | Chongqing Changan Automobile Co. Ltd. | Automobiles | 1,400 | 2,771 | ||||||||||
a | Chongqing Changan Automobile Co. Ltd., B | Automobiles | 2,600 | 1,476 | ||||||||||
Chongqing Fuling Zhacai Group Co. Ltd., A | Food Products | 200 | 1,387 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., A | Banks | 1,800 | 1,324 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., H | Banks | 8,000 | 2,942 | |||||||||||
Chongqing Water Group Co. Ltd., A | Water Utilities | 200 | 153 | |||||||||||
Chongqing Zhifei Biological Products Co. Ltd. | Biotechnology | 300 | 6,158 | |||||||||||
Chow Tai Fook Jewellery Group Ltd. | Specialty Retail | 5,600 | 7,298 | |||||||||||
CIFI Holdings Group Co. Ltd. | Real Estate Management & Development | 12,000 | 8,826 | |||||||||||
Cinda Real Estate Co. Ltd., A | Real Estate Management & Development | 400 | 262 | |||||||||||
a | CITIC Guoan Information Industry Co. Ltd. | Media | 400 | 150 | ||||||||||
Citic Pacific Ltd. | Industrial Conglomerates | 16,000 | 11,747 | |||||||||||
Citic Pacific Special Steel Group Co. Ltd., A | Metals & Mining | 1,080 | 2,629 | |||||||||||
CITIC Securities Co. Ltd., A | Capital Markets | 2,200 | 9,735 | |||||||||||
CITIC Securities Co. Ltd., H | Capital Markets | 7,000 | 15,554 | |||||||||||
a | CMST Development Co. Ltd., A | Air Freight & Logistics | 200 | 136 | ||||||||||
CNOOC Energy Technology & Services Ltd. | Energy Equipment & Services | 3,800 | 1,310 | |||||||||||
CNOOC Ltd. | Oil, Gas & Consumable Fuels | 51,000 | 49,026 | |||||||||||
Contemporary Amperex Technology Co. Ltd. | Electrical Equipment | 200 | 6,165 | |||||||||||
COSCO SHIPPING Development Co. Ltd., H | Trading Companies & Distributors | 16,000 | 1,610 | |||||||||||
COSCO SHIPPING Energy Transportation Co. Ltd., H | Oil, Gas & Consumable Fuels | 4,000 | 1,652 | |||||||||||
a | COSCO Shipping Holdings Co. Ltd. | Marine | 8,000 | 3,912 | ||||||||||
COSCO SHIPPING Ports Ltd. | Transportation Infrastructure | 4,000 | 2,281 | |||||||||||
Country Garden Holdings Co. Ltd. | Real Estate Management & Development | 24,000 | 29,357 | |||||||||||
Country Garden Services Holdings Co. Ltd. | Commercial Services & Supplies | 4,000 | 25,729 | |||||||||||
CRRC Corp. Ltd., A | Machinery | 5,400 | 4,369 |
124 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
CRRC Corp. Ltd., H | Machinery | 14,000 | $ | 5,564 | ||||||||||
CSC Financial Co. Ltd., A | Capital Markets | 200 | 1,468 | |||||||||||
CSC Financial Co. Ltd., H | Capital Markets | 3,000 | 4,196 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 3,101 | 924 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 400 | 331 | |||||||||||
CSPC Pharmaceutical Group Ltd. | Pharmaceuticals | 16,000 | 30,968 | |||||||||||
a | CSSC Offshore and Marine Engineering Group Co. Ltd., A | Machinery | 200 | 876 | ||||||||||
a | CSSC Offshore and Marine Engineering Group Co., Ltd. | Machinery | 2,000 | 2,129 | ||||||||||
Da An Gene Co. Ltd. of Sun Yat-Sen University | Biotechnology | 220 | 1,135 | |||||||||||
Dali Foods Group Co. Ltd. | Food Products | 7,000 | 4,272 | |||||||||||
Dalian Port PDA Co. Ltd., A | Transportation Infrastructure | 1,400 | 404 | |||||||||||
Daqin Railway Co. Ltd., A | Road & Rail | 2,400 | 2,253 | |||||||||||
Datang International Power Generation Co. Ltd., H | Independent Power and Renewable Electricity Producers | 16,000 | 2,003 | |||||||||||
Dawning Information Industry Co. Ltd., A | Technology Hardware, Storage & Peripherals | 280 | 1,556 | |||||||||||
Dazhong Transportation (Group) Co. Ltd., B | Road & Rail | 2,400 | 794 | |||||||||||
Dazhong Transportation Group Co. Ltd., A | Road & Rail | 800 | 428 | |||||||||||
DHC Software Co. Ltd. | IT Services | 600 | 901 | |||||||||||
Digital China Information Service Co. Ltd. | IT Services | 200 | 480 | |||||||||||
Dong-E-E-Jiao Co. Ltd., A | Pharmaceuticals | 200 | 1,170 | |||||||||||
Dongfang Electric Corp. Ltd., A | Electrical Equipment | 400 | 599 | |||||||||||
Dongfang Electric Corp. Ltd., H | Electrical Equipment | 800 | 595 | |||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 8,000 | 4,965 | |||||||||||
Dongxing Securities Co. Ltd., A | Capital Markets | 400 | 756 | |||||||||||
a | Doushen Beijing Education & Technology Inc. | IT Services | 200 | 543 | ||||||||||
East Money Information Co. Ltd. | Capital Markets | 1,800 | 6,363 | |||||||||||
ENN Ecological Holdings Co. Ltd., A | Chemicals | 200 | 330 | |||||||||||
ENN Energy Holdings Ltd. | Gas Utilities | 2,400 | 26,137 | |||||||||||
Eternal Asia Supply Chain Management Ltd. | Commercial Services & Supplies | 200 | 145 | |||||||||||
Eve Energy Co. Ltd. | Electrical Equipment | 380 | 2,772 | |||||||||||
Everbright Securities Co. Ltd., A | Capital Markets | 1,200 | 3,881 | |||||||||||
Everbright Securities Co. Ltd., H | Capital Markets | 400 | 385 | |||||||||||
a | Fangda Carbon New Material Co. Ltd. | Electrical Equipment | 560 | 503 | ||||||||||
Far East Horizon Ltd. | Diversified Financial Services | 8,000 | 6,483 | |||||||||||
a | Faw Jiefang Group Co. Ltd. | Automobiles | 200 | 356 | ||||||||||
Fiberhome Telecommunication Technologies Co. Ltd., A | Communications Equipment | 400 | 1,400 | |||||||||||
a | FIH Mobile Ltd. | Electronic Equipment, Instruments & Components | 10,000 | 1,419 | ||||||||||
Financial Street Holdings Co. Ltd. | Real Estate Management & Development | 600 | 576 | |||||||||||
First Capital Securities Co. Ltd. | Capital Markets | 800 | 1,310 | |||||||||||
Flat Glass Group Co. Ltd., H | Semiconductors & Semiconductor Equipment | 2,000 | 5,303 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 3,800 | 4,519 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 240 | 5,733 | |||||||||||
Fosun International Ltd. | Industrial Conglomerates | 8,000 | 9,290 | |||||||||||
a | Founder Securities Co. Ltd., A | Capital Markets | 2,400 | 2,971 | ||||||||||
Foxconn Industrial Internet Co. Ltd., A | Electronic Equipment, Instruments & Components | 600 | 1,202 | |||||||||||
Fujian Funeng Co. Ltd., A | Independent Power and Renewable Electricity Producers | 200 | 234 | |||||||||||
Fujian Longking Co. Ltd., A | Machinery | 200 | 280 |
franklintempleton.com | Semiannual Report | 125 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Fujian Sunner Development Co. Ltd. | Food Products | 200 | $ | 645 | ||||||||||
Fuyao Glass Industry Group Co. Ltd., A | Auto Components | 400 | 1,909 | |||||||||||
Fuyao Group Glass Industries Co. Ltd., H | Auto Components | 1,600 | 5,863 | |||||||||||
Ganfeng Lithium Co. Ltd. | Metals & Mining | 400 | 3,194 | |||||||||||
Ganfeng Lithium Co. Ltd., H | Metals & Mining | 400 | 1,948 | |||||||||||
a | GCL System Integration Technology Co. Ltd. | Semiconductors & Semiconductor Equipment | 800 | 446 | ||||||||||
GD Power Development Co. Ltd., A | Independent Power and Renewable Electricity Producers | 3,800 | 1,131 | |||||||||||
a | GDS Holdings Ltd., ADR | IT Services | 288 | 23,567 | ||||||||||
Geely Automobile Holdings Ltd. | Automobiles | 16,000 | 31,794 | |||||||||||
GEM Co. Ltd. | Metals & Mining | 800 | 555 | |||||||||||
Gemdale Corp., A | Real Estate Management & Development | 1,400 | 3,002 | |||||||||||
a | Genscript Biotech Corp. | Life Sciences Tools & Services | 3,000 | 4,908 | ||||||||||
GF Securities Co. Ltd. | Capital Markets | 1,600 | 3,720 | |||||||||||
GF Securities Co. Ltd., H | Capital Markets | 5,200 | 6,555 | |||||||||||
Gigadevice Semiconductor Beijing Inc., A | Semiconductors & Semiconductor Equipment | 100 | 2,551 | |||||||||||
a | Global Top E-Commerce Co. Ltd. | Internet & Direct Marketing Retail | 200 | 182 | ||||||||||
Glodon Co. Ltd. | Software | 400 | 4,300 | |||||||||||
GoerTek Inc. | Electronic Equipment, Instruments & Components | 800 | 4,766 | |||||||||||
a | GOME Retail Holdings Ltd. | Specialty Retail | 30,000 | 3,948 | ||||||||||
a | Gosuncn Technology Group Co. Ltd. | Communications Equipment | 200 | 147 | ||||||||||
Grandjoy Holdings Group Co. Ltd., A | Real Estate Management & Development | 400 | 274 | |||||||||||
Great Wall Motor Co. Ltd., A | Automobiles | 400 | 1,127 | |||||||||||
Great Wall Motor Co. Ltd., H | Automobiles | 11,000 | 13,952 | |||||||||||
Greattown Holdings Ltd., A | Real Estate Management & Development | 200 | 170 | |||||||||||
Gree Electric Appliances Inc. of Zhuhai | Household Durables | 1,400 | 10,996 | |||||||||||
Greendland Holdings Corp. Ltd., A | Real Estate Management & Development | 2,200 | 2,065 | |||||||||||
Greentown China Holdings Ltd. | Real Estate Management & Development | 3,000 | 4,661 | |||||||||||
GRG Banking Equipment Co. Ltd. | Technology Hardware, Storage & Peripherals | 400 | 716 | |||||||||||
a | GSX Techedu Inc., ADR | Diversified Consumer Services | 152 | 13,697 | ||||||||||
Guangdong Baolihua New Energy Stock Co. Ltd. | Independent Power and Renewable Electricity Producers | 600 | 566 | |||||||||||
Guangdong Electric Power Development Co. Ltd., B | Independent Power and Renewable Electricity Producers | 4,000 | 1,099 | |||||||||||
Guangdong Ellington Electronics Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 200 | 258 | |||||||||||
a | Guangdong Golden Dragon Development Inc. | Capital Markets | 200 | 434 | ||||||||||
Guangdong Haid Group Co. Ltd. | Food Products | 400 | 3,615 | |||||||||||
a | Guangdong HEC Technology Holding Co. Ltd., A | Metals & Mining | 400 | 365 | ||||||||||
Guangdong Investment Ltd. | Water Utilities | 8,000 | 12,656 | |||||||||||
Guangdong LY Intelligent Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 1,600 | 2,638 | |||||||||||
Guangdong Xinbao Electrical Appliances Holdings Co. Ltd. | Household Durables | 200 | 1,220 | |||||||||||
a | Guanghui Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 1,200 | 502 | ||||||||||
Guangshen Railway Co. Ltd., H | Road & Rail | 8,000 | 1,352 | |||||||||||
Guangxi Guiguan Electric Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 600 | 424 | |||||||||||
Guangxi Liugong Machinery Co. Ltd. | Machinery | 800 | 832 | |||||||||||
Guangxi Wuzhou Zhongheng Group Co. Ltd., A | Pharmaceuticals | 1,000 | 476 | |||||||||||
Guangzhou Automobile Group Co. Ltd., A | Automobiles | 200 | 281 | |||||||||||
Guangzhou Automobile Group Co. Ltd., H | Automobiles | 12,000 | 9,987 |
126 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Guangzhou Baiyun International Airport Co. Ltd., A | Transportation Infrastructure | 200 | $ | 401 | ||||||||||
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., A | Pharmaceuticals | 600 | 2,669 | |||||||||||
Guangzhou Baiyunshan Pharmceutical Holdings Co. Ltd. | Pharmaceuticals | 600 | 1,497 | |||||||||||
Guangzhou Haige Communications Group Inc. Co. | Communications Equipment | 400 | 690 | |||||||||||
Guangzhou R&F Properties Co. Ltd., H | Real Estate Management & Development | 3,200 | 4,113 | |||||||||||
Guangzhou Zhujiang Brewery Co. Ltd. | Beverages | 200 | 292 | |||||||||||
Guizhou Panjiang Refined Coal Co. Ltd., A | Oil, Gas & Consumable Fuels | 800 | 694 | |||||||||||
a | Guizhou Xinbang Pharmaceutical Co. Ltd. | Pharmaceuticals | 200 | 202 | ||||||||||
Guosen Securities Co. Ltd. | Capital Markets | 1,400 | 2,775 | |||||||||||
a | Guosheng Financial Holding Inc. | Electrical Equipment | 200 | 282 | ||||||||||
Guotai Junan Securities Co. Ltd. | Capital Markets | 3,200 | 4,435 | |||||||||||
Guotai Junan Securities Co. Ltd., A | Capital Markets | 1,600 | 4,300 | |||||||||||
a | Guoxuan High-Tech Co. Ltd. | Electrical Equipment | 200 | 701 | ||||||||||
Guoyuan Securities Co. Ltd. | Capital Markets | 400 | 707 | |||||||||||
b,c | Haidilao International Holding Ltd., 144A, Reg S | Hotels, Restaurants & Leisure | 3,000 | 21,581 | ||||||||||
Haier Electronics Group Co. Ltd. | Household Durables | 4,000 | 14,452 | |||||||||||
Haier Smart Home Co. Ltd., A | Household Durables | 1,400 | 4,501 | |||||||||||
Haitian International Holdings Ltd. | Machinery | 2,000 | 4,645 | |||||||||||
a | Haitong Securities Co. Ltd., A | Capital Markets | 1,800 | 3,753 | ||||||||||
a | Haitong Securities Co. Ltd., H | Capital Markets | 11,200 | 9,480 | ||||||||||
Han’s Laser Technology Industry Group Co. Ltd., A | Machinery | 200 | 970 | |||||||||||
a | Hang Zhou Great Star Industrial Co. Ltd. | Household Durables | 200 | 583 | ||||||||||
Hangzhou Binjiang Real Estate Group Co. Ltd. | Real Estate Management & Development | 400 | 281 | |||||||||||
Hangzhou Century Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 347 | |||||||||||
Hangzhou First Applied Material Co. Ltd., A | Semiconductors & Semiconductor Equipment | 200 | 2,154 | |||||||||||
Hangzhou Hikvision Digital Technology Co. Ltd., A | | Electronic Equipment, Instruments & Components | | 2,000 | 11,231 | |||||||||
Hangzhou Oxygen Plant Group Co. Ltd. | Machinery | 200 | 663 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 200 | 963 | |||||||||||
Hangzhou Shunwang Technology Co. Ltd. | Entertainment | 200 | 522 | |||||||||||
Hangzhou Tigermed Consulting Co. Ltd. | Life Sciences Tools & Services | 200 | 3,034 | |||||||||||
a | Hansoh Pharmaceutical Group Co. Ltd. | Pharmaceuticals | 3,000 | 14,574 | ||||||||||
Health & Happiness H&H International Holdings Ltd. | Food Products | 500 | 2,152 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 400 | 1,090 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 800 | 6,240 | |||||||||||
Henan Zhongyuan Expressway Co. Ltd., A | Transportation Infrastructure | 400 | 203 | |||||||||||
Hengan International Group Co. Ltd. | Personal Products | 2,000 | 14,516 | |||||||||||
Hengdian Group DMEGC Magnetics Co. Ltd. | Electronic Equipment, Instruments & Components | 400 | 749 | |||||||||||
Hengli Petrochemical Co. Ltd., A | Chemicals | 960 | 2,626 | |||||||||||
a | HengTen Networks Group Ltd. | Internet & Direct Marketing Retail | 48,000 | 1,796 | ||||||||||
Hengtong Optic-electric Co. Ltd., A | Communications Equipment | 600 | 1,275 | |||||||||||
Hengyi Petrochemical Co. Ltd., A | Chemicals | 600 | 918 | |||||||||||
a | Hesteel Co. Ltd. | Metals & Mining | 1,400 | 437 | ||||||||||
Hithink RoyalFlush Information Network Co. Ltd. | Capital Markets | 200 | 4,712 | |||||||||||
Holitech Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 400 | 296 | |||||||||||
Hongfa Technology Co. Ltd., A | Electrical Equipment | 200 | 1,347 | |||||||||||
Hongta Securities Co. Ltd., A | Capital Markets | 400 | 1,078 | |||||||||||
Hopson Development Holdings Ltd. | Real Estate Management & Development | 2,000 | 4,717 | |||||||||||
a,c | Hua Hong Semiconductor Ltd., Reg S | Semiconductors & Semiconductor Equipment | 1,000 | 3,813 | ||||||||||
Huaan Securities Co. Ltd., A | Capital Markets | 400 | 517 |
franklintempleton.com | Semiannual Report | 127 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Huabao Flavours & Fragrances Co. Ltd. | Chemicals | 200 | $ | 1,489 | ||||||||||
Huadian Power International Corp. Ltd., A | Independent Power and Renewable Electricity Producers | 600 | 315 | |||||||||||
Huadian Power International Corp. Ltd., H | Independent Power and Renewable Electricity Producers | 8,000 | 2,054 | |||||||||||
Huadong Medicine Co. Ltd., A | Health Care Providers & Services | 200 | 728 | |||||||||||
Huafa Industrial Co. Ltd. Zhuhai, A | Real Estate Management & Development | 400 | 388 | |||||||||||
Huagong Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 673 | |||||||||||
Hualan Biological Engineering Inc. | Biotechnology | 520 | 4,367 | |||||||||||
Huaneng Power International Inc., A | Independent Power and Renewable Electricity Producers | 800 | 638 | |||||||||||
Huaneng Power International Inc., H | Independent Power and Renewable Electricity Producers | 16,000 | 6,173 | |||||||||||
Huapont Life Sciences Co. Ltd. | Chemicals | 600 | 442 | |||||||||||
Huatai Securities Co. Ltd., A | Capital Markets | 1,400 | 4,235 | |||||||||||
Huatai Securities Co. Ltd., H | Capital Markets | 5,200 | 8,494 | |||||||||||
Huaxi Securities Co. Ltd. | Capital Markets | 400 | 706 | |||||||||||
Huaxia Bank Co. Ltd., A | Banks | 3,400 | 3,071 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 200 | 741 | |||||||||||
Huaxin Cement Co. Ltd., B | Construction Materials | 1,000 | 2,267 | |||||||||||
Huayu Automotive Systems Co. Ltd. | Auto Components | 800 | 2,935 | |||||||||||
Hubei Biocause Pharmaceutical Co. Ltd. | Insurance | 1,400 | 1,089 | |||||||||||
Hubei Energy Group Co. Ltd. | Independent Power and Renewable Electricity Producers | 800 | 437 | |||||||||||
Hubei Xinyangfeng Fertilizer Co. Ltd. | Chemicals | 400 | 698 | |||||||||||
Huizhou Desay Sv Automotive Co. Ltd. | Household Durables | 100 | 1,047 | |||||||||||
Humanwell Healthcare Group Co. Ltd., A | Pharmaceuticals | 200 | 950 | |||||||||||
Hunan Gold Corp. Ltd. | Metals & Mining | 200 | 251 | |||||||||||
Hunan Valin Steel Co. Ltd. | Metals & Mining | 600 | 446 | |||||||||||
Hundsun Technologies Inc., A | Software | 200 | 2,906 | |||||||||||
Huolinhe Opencut Coal Industry Corp. Ltd. of Inner Mongolia | Oil, Gas & Consumable Fuels | 200 | 286 | |||||||||||
a | Hytera Communications Corp. Ltd., A | Communications Equipment | 200 | 219 | ||||||||||
a | HyUnion Holding Co. Ltd. | Auto Components | 200 | 209 | ||||||||||
Iflytek Co. Ltd. | Software | 400 | 2,020 | |||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 16,800 | 12,180 | |||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 252,000 | 130,715 | |||||||||||
Industrial Bank Co. Ltd., A | Banks | 4,600 | 10,934 | |||||||||||
Industrial Securities Co. Ltd., A | Capital Markets | 2,400 | 2,928 | |||||||||||
a | Inner Mongolia BaoTou Steel Union Co. Ltd., A | Metals & Mining | 12,200 | 2,067 | ||||||||||
Inner Mongolia First Machinery Group Co. Ltd., A | Machinery | 200 | 329 | |||||||||||
Inner Mongolia MengDian HuaNeng Thermal Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 1,200 | 453 | |||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 1,200 | 6,808 | |||||||||||
Inner Mongolia Yitai Coal Co. Ltd., B | Oil, Gas & Consumable Fuels | 2,400 | 1,649 | |||||||||||
a | Innovent Biologics Inc. | Biotechnology | 4,000 | 29,626 | ||||||||||
Inspur Electronic Information Industry Co. Ltd. | Technology Hardware, Storage & Peripherals | 424 | 1,899 | |||||||||||
a,d | Iqiyi Inc., ADR | Entertainment | 714 | 16,122 | ||||||||||
Jafron Biomedical Co. Ltd., A | Health Care Equipment & Supplies | 200 | 2,094 | |||||||||||
Jason Furniture Hangzhou Co. Ltd., A | Household Durables | 200 | 1,777 | |||||||||||
a | JD.com Inc., ADR | Internet & Direct Marketing Retail | 2,800 | 217,308 | ||||||||||
Jiangsu Expressway Co. Ltd., A | Transportation Infrastructure | 200 | 280 | |||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 4,000 | 4,026 | |||||||||||
Jiangsu Hengli Hydraulic Co. Ltd., A | Machinery | 296 | 3,114 |
128 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Jiangsu Hengrui Medicine Co. Ltd., A | Pharmaceuticals | 1,260 | $ | 16,677 | ||||||||||
Jiangsu King’s Luck Brewery JSC Ltd. | Beverages | 200 | 1,309 | |||||||||||
Jiangsu Yanghe Brewery JST Co. Ltd., A | Beverages | 400 | 7,367 | |||||||||||
Jiangsu Yuyue Medical Equipment & Supply Co. Ltd. | Health Care Equipment & Supplies | 200 | 967 | |||||||||||
Jiangsu Zhangjiagang Rural Commercial Bank Co. Ltd. | Banks | 200 | 172 | |||||||||||
Jiangsu Zhongnan Construction Group Co. Ltd. | Real Estate Management & Development | 400 | 541 | |||||||||||
Jiangsu Zhongtian Technology Co. Ltd., A | Electrical Equipment | 400 | 618 | |||||||||||
a | Jiangsu Zijin Rural Commercial Bank Co. Ltd., A | Banks | 200 | 120 | ||||||||||
Jiangxi Copper Co. Ltd., A | Metals & Mining | 400 | 835 | |||||||||||
Jiangxi Copper Co. Ltd., H | Metals & Mining | 4,000 | 4,465 | |||||||||||
Jiangxi Zhengbang Technology Co. Ltd., A | Food Products | 400 | 1,072 | |||||||||||
Jiayuan International Group Ltd. | Real Estate Management & Development | 4,000 | 1,667 | |||||||||||
Jilin Aodong Pharmaceutical Group Co. Ltd. | Pharmaceuticals | 400 | 986 | |||||||||||
Jinduicheng Molybdenum Co. Ltd., A | Metals & Mining | 600 | 524 | |||||||||||
Jinke Properties Group Co. Ltd. | Real Estate Management & Development | 800 | 1,067 | |||||||||||
b,c | Jinxin Fertility Group Ltd., 144A, Reg S | Health Care Providers & Services | 4,000 | 5,037 | ||||||||||
Jinyu Bio-Technology Co. Ltd., A | Biotechnology | 600 | 2,387 | |||||||||||
Jiuzhitang Co. Ltd. | Pharmaceuticals | 200 | 256 | |||||||||||
Jizhong Energy Resources Co. Ltd. | Oil, Gas & Consumable Fuels | 1,000 | 563 | |||||||||||
Joincare Pharmaceutical Group Industry Co. Ltd., A | Pharmaceuticals | 400 | 1,004 | |||||||||||
Jointo Energy Investment Co. Ltd. | Independent Power and Renewable Electricity Producers | 200 | 147 | |||||||||||
a | Jointown Pharmaceutical Group Co. Ltd., A | Health Care Providers & Services | 200 | 498 | ||||||||||
Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., A | Food Products | 200 | 1,930 | |||||||||||
Joyoung Co. Ltd. | Household Durables | 200 | 1,194 | |||||||||||
JOYY Inc., ADR | Interactive Media & Services | 166 | 13,391 | |||||||||||
a | KE Holdings Inc., ADR | Real Estate Management & Development | 340 | 20,842 | ||||||||||
Kerry Logistics Network Ltd. | Air Freight & Logistics | 2,000 | 3,603 | |||||||||||
Kingboard Holdings Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 6,581 | |||||||||||
Kingdee International Software Group Co. Ltd. | Software | 7,000 | 18,065 | |||||||||||
Kingfa Sci & Tech Co. Ltd. | Chemicals | 600 | 1,391 | |||||||||||
Kingsoft Corp. Ltd. | Software | 3,000 | 14,961 | |||||||||||
a | Kuang-Chi Technologies Co. Ltd. | Auto Components | 400 | 1,285 | ||||||||||
Kunlun Energy Co. Ltd. | Gas Utilities | 8,000 | 5,244 | |||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 300 | 73,759 | |||||||||||
KWG Group Holdings Ltd. | Real Estate Management & Development | 4,000 | 6,823 | |||||||||||
Lakala Payment Co. Ltd., A | IT Services | 200 | 1,125 | |||||||||||
Lao Feng Xiang Co. Ltd., B | Textiles, Apparel & Luxury Goods | 600 | 1,783 | |||||||||||
Laobaixing Pharmacy Chain JSC | Food & Staples Retailing | 200 | 2,446 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 6,000 | 4,336 | |||||||||||
Legend Holdings Corp., H | Technology Hardware, Storage & Peripherals | 1,800 | 2,188 | |||||||||||
Legend Holdings Corp., rts., 2/20/49 | Technology Hardware, Storage & Peripherals | 123 | — | |||||||||||
Lenovo Group Ltd. | Technology Hardware, Storage & Peripherals | 24,000 | 15,825 | |||||||||||
Lens Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 947 | |||||||||||
Leo Group Co. Ltd. | Media | 1,200 | 511 | |||||||||||
Lepu Medical Technology Beijing Co. Ltd. | Health Care Equipment & Supplies | 400 | 1,987 | |||||||||||
Leyard Optoelectronic Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 227 | |||||||||||
Li Ning Co. Ltd. | Textiles, Apparel & Luxury Goods | 6,000 | 27,871 |
franklintempleton.com | Semiannual Report | 129 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Liaoning Cheng Da Co. Ltd., A | Distributors | 400 | $ | 1,372 | ||||||||||
Liuzhou Iron & Steel Co. Ltd., A | Metals & Mining | 200 | 134 | |||||||||||
Livzon Pharmaceutical Group Inc., H | Pharmaceuticals | 600 | 2,741 | |||||||||||
Logan Group Co. Ltd. | Real Estate Management & Development | 4,000 | 6,307 | |||||||||||
Lomon Billions Group Co. Ltd. | Chemicals | 200 | 686 | |||||||||||
Loncin Motor Co. Ltd., A | Automobiles | 400 | 221 | |||||||||||
b,c | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 5,500 | 30,871 | ||||||||||
LONGi Green Energy Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 800 | 8,843 | |||||||||||
Luxi Chemical Group Co. Ltd. | Chemicals | 400 | 531 | |||||||||||
Luxshare Precision Industry Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,595 | 13,427 | |||||||||||
Luye Pharma Group Ltd. | Pharmaceuticals | 6,000 | 3,484 | |||||||||||
Luzhou Laojiao Co. Ltd., A | Beverages | 400 | 8,461 | |||||||||||
Maanshan Iron & Steel Co. Ltd., A | Metals & Mining | 800 | 315 | |||||||||||
Maanshan Iron & Steel Co. Ltd., H | Metals & Mining | 4,000 | 924 | |||||||||||
Mango Excellent Media Co. Ltd. | Entertainment | 540 | 5,363 | |||||||||||
a | Meinian Onehealth Healthcare Holdings Co. Ltd. | Health Care Providers & Services | 520 | 1,087 | ||||||||||
a,c | Meituan Dianping, B, Reg S | Internet & Direct Marketing Retail | 11,400 | 355,680 | ||||||||||
Metallurgical Corp. of China Ltd. | Construction & Engineering | 10,000 | 1,600 | |||||||||||
Metallurgical Corp. of China Ltd., A | Construction & Engineering | 2,800 | 1,093 | |||||||||||
Microport Scientific Corp. | Health Care Equipment & Supplies | 2,000 | 7,936 | |||||||||||
Minth Group Ltd. | Auto Components | 2,000 | 8,684 | |||||||||||
a | MMG Ltd. | Metals & Mining | 8,000 | 1,992 | ||||||||||
Momo Inc., ADR | Interactive Media & Services | 456 | 6,275 | |||||||||||
a | Montnets Rongxin Technology Group Co. Ltd. | Software | 200 | 472 | ||||||||||
Muyuan Foods Co. Ltd. | Food Products | 740 | 8,069 | |||||||||||
NanJi E-Commerce Co. Ltd. | Media | 400 | 1,017 | |||||||||||
Nanjing Iron & Steel Co. Ltd., A | Metals & Mining | 600 | 270 | |||||||||||
Nanjing Securities Co. Ltd., A | Capital Markets | 200 | 416 | |||||||||||
Nari Technology Development Co. Ltd., A | Electrical Equipment | 1,000 | 2,906 | |||||||||||
NAURA Technology Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 100 | 2,344 | |||||||||||
NavInfo Co. Ltd. | Household Durables | 200 | 433 | |||||||||||
NetEase Inc., ADR | Entertainment | 242 | 110,030 | |||||||||||
New China Life Insurance Co. Ltd., A | Insurance | 600 | 5,489 | |||||||||||
New China Life Insurance Co. Ltd., H | Insurance | 3,000 | 11,168 | |||||||||||
New Hope Liuhe Co. Ltd. | Food Products | 1,000 | 4,082 | |||||||||||
a | New Oriental Education & Technology Group Inc., ADR | Diversified Consumer Services | 438 | 65,481 | ||||||||||
Newland Digital Technology Co. Ltd. | Software | 200 | 466 | |||||||||||
Nexteer Automotive Group Ltd. | Auto Components | 4,000 | 2,772 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 6,000 | 7,525 | |||||||||||
Ninestar Corp. | Technology Hardware, Storage & Peripherals | 400 | 1,680 | |||||||||||
Ningbo Joyson Electronic Corp. | Auto Components | 600 | 1,958 | |||||||||||
Ningbo Sanxing Medical Electric Co. Ltd., A | Electrical Equipment | 200 | 194 | |||||||||||
Ningbo Tuopu Group Co. Ltd., A | Auto Components | 200 | 1,179 | |||||||||||
Ningbo Zhoushan Port Co. Ltd., A | Transportation Infrastructure | 3,200 | 1,759 | |||||||||||
Ningxia Baofeng Energy Group Co. Ltd. | Chemicals | 1,000 | 1,503 | |||||||||||
a,d | NIO Inc., ADR | Automobiles | 3,054 | 64,806 | ||||||||||
North Huajin Chemical Industries Co. Ltd. | Chemicals | 800 | 566 | |||||||||||
Northeast Securities Co. Ltd. | Capital Markets | 400 | 582 | |||||||||||
NSFOCUS Information Technology Co. Ltd. | Software | 200 | 567 | |||||||||||
Oceanwide Holdings Co. Ltd. | Diversified Financial Services | 400 | 249 | |||||||||||
Offcn Education Technology Co. Ltd., A | Diversified Consumer Services | 400 | 1,923 | |||||||||||
Offshore Oil Engineering Co. Ltd., A | Energy Equipment & Services | 1,000 | 665 | |||||||||||
OFILM Group Co. Ltd. | Electronic Equipment, Instruments & Components | 400 | 849 | |||||||||||
a | OneConnect Financial Technology Co. Ltd., ADR | Software | 160 | 3,408 | ||||||||||
Oppein Home Group Inc., A | Household Durables | 200 | 3,176 | |||||||||||
ORG Technology Co. Ltd. | Containers & Packaging | 400 | 321 |
130 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Orient Securities Co. Ltd. of China, H | Capital Markets | 3,200 | $ | 2,122 | ||||||||||
Oriental Pearl Group Co. Ltd., A | Media | 1,400 | 1,999 | |||||||||||
a | Ourpalm Co. Ltd. | Entertainment | 800 | 804 | ||||||||||
a | Pangang Group Vanadium Titanium & Resources Co. Ltd., A | Metals & Mining | 1,400 | 425 | ||||||||||
Perfect World Co. Ltd. | Entertainment | 400 | 1,963 | |||||||||||
PetroChina Co. Ltd., H | Oil, Gas & Consumable Fuels | 68,000 | 19,917 | |||||||||||
b,c | Pharmaron Beijing Co. Ltd., H, 144A, Reg S | Life Sciences Tools & Services | 400 | 4,976 | ||||||||||
PICC Property and Casualty Co. Ltd., H | Insurance | 20,000 | 13,910 | |||||||||||
a | Pinduoduo Inc., ADR | Internet & Direct Marketing Retail | 882 | 65,400 | ||||||||||
Ping An Bank Co. Ltd., A | Banks | 4,200 | 9,389 | |||||||||||
a,c | Ping An Healthcare and Technology Co. Ltd., Reg S | Health Care Technology | 1,200 | 15,368 | ||||||||||
Ping An Insurance (Group) Co. of China Ltd., H | Insurance | 17,500 | 179,516 | |||||||||||
Ping An Insurance Group Co. of China Ltd., A | Insurance | 2,400 | 26,970 | |||||||||||
Pingdingshan Tianan Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 600 | 492 | |||||||||||
Poly Developments and Holdings Group Co. Ltd., A | Real Estate Management & Development | 3,000 | 7,024 | |||||||||||
Poly Property Group Co. Ltd. | Real Estate Management & Development | 4,000 | 1,110 | |||||||||||
Poly Property Services Co. Ltd., H | Real Estate Management & Development | 400 | 3,102 | |||||||||||
Postal Savings Bank of China Co. Ltd., H | Banks | 32,000 | 13,419 | |||||||||||
Power Construction Corp. of China Ltd. | Construction & Engineering | 2,600 | 1,444 | |||||||||||
Qingdao Port International Co. Ltd., A | Transportation Infrastructure | 200 | 168 | |||||||||||
c | Qingdao Port International Co. Ltd., H, Reg S | Transportation Infrastructure | 4,000 | 2,323 | ||||||||||
Qingdao TGOOD Electric Co. Ltd. | Electrical Equipment | 200 | 520 | |||||||||||
Qinhuangdao Port Co. Ltd., A | Transportation Infrastructure | 3,200 | 1,217 | |||||||||||
Rainbow Departmental Store Co. Ltd. | Multiline Retail | 200 | 265 | |||||||||||
a | Realcan Pharmaceutical Group Co. Ltd. | Health Care Providers & Services | 200 | 164 | ||||||||||
Red Star Macalline Group Corp. Ltd. | Real Estate Management & Development | 2,000 | 1,190 | |||||||||||
Red Star Macalline Group Corp. Ltd., A | Real Estate Management & Development | 220 | 311 | |||||||||||
RiseSun Real Estate Development Co. Ltd. | Real Estate Management & Development | 600 | 675 | |||||||||||
Rongsheng Petro Chemical Co. Ltd. | Chemicals | 200 | 553 | |||||||||||
SAIC Motor Corp Ltd | Automobiles | 2,400 | 6,765 | |||||||||||
Sanan Optoelectronics Co. Ltd., A | Semiconductors & Semiconductor Equipment | 1,000 | 3,600 | |||||||||||
Sansteel Minguang Co. Ltd. | Metals & Mining | 400 | 386 | |||||||||||
Sany Heavy Industry Co. Ltd., A | Machinery | 1,800 | 6,602 | |||||||||||
SDIC Capital Co. Ltd., A | Capital Markets | 400 | 902 | |||||||||||
SDIC Power Holdings Co. Ltd., A | Independent Power and Renewable Electricity Producers | 1,000 | 1,329 | |||||||||||
Sealand Securities Co. Ltd. | Capital Markets | 780 | 613 | |||||||||||
Seazen Group Ltd. | Real Estate Management & Development | 8,000 | 6,792 | |||||||||||
Seazen Holdings Co. Ltd., A | Real Estate Management & Development | 600 | 3,091 | |||||||||||
a | Semiconductor Manufacturing International Corp. | Semiconductors & Semiconductor Equipment | 13,000 | 30,395 | ||||||||||
SF Holding Co. Ltd. | Air Freight & Logistics | 600 | 7,179 | |||||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 1,000 | 1,236 | |||||||||||
Shaanxi International Trust Co. Ltd. | Capital Markets | 400 | 224 | |||||||||||
Shandong Chenming Paper Holdings Ltd. | Paper & Forest Products | 1,000 | 765 | |||||||||||
Shandong Chenming Paper Holdings Ltd., B | Paper & Forest Products | 2,800 | 975 | |||||||||||
Shandong Chenming Paper Holdings Ltd., H | Paper & Forest Products | 1,000 | 441 |
franklintempleton.com | Semiannual Report | 131 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
b,c | Shandong Gold Mining Co. Ltd., 144A, Reg S | Metals & Mining | 1,500 | $ | 3,693 | |||||||||
Shandong Gold Mining Co. Ltd., A | Metals & Mining | 1,120 | 4,209 | |||||||||||
Shandong Hi-speed Co. Ltd., A | Transportation Infrastructure | 600 | 499 | |||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 200 | 722 | |||||||||||
Shandong Humon Smelting Co. Ltd. | Metals & Mining | 200 | 416 | |||||||||||
Shandong Linglong Tyre Co. Ltd., A | Auto Components | 200 | 861 | |||||||||||
Shandong Nanshan Aluminum Co. Ltd., A | Metals & Mining | 2,800 | 941 | |||||||||||
Shandong Publishing & Media Co. Ltd., A | Media | 400 | 364 | |||||||||||
Shandong Sinocera Functional Material Co. Ltd., A | Chemicals | 200 | 1,095 | |||||||||||
Shandong Sun Paper Industry JSC Ltd. | Paper & Forest Products | 400 | 831 | |||||||||||
Shandong Weigao Group Medical Polymer Co. Ltd., H | Health Care Equipment & Supplies | 8,000 | 15,938 | |||||||||||
a | Shandong Xinchao Energy Corp. Ltd., A | Oil, Gas & Consumable Fuels | 400 | 98 | ||||||||||
Shanghai 2345 Network Holding Group Co. Ltd. | Software | 600 | 251 | |||||||||||
Shanghai AJ Group Co. Ltd., A | Diversified Financial Services | 200 | 244 | |||||||||||
Shanghai Baosight Software Co. Ltd., A | Software | 200 | 2,132 | |||||||||||
Shanghai Baosight Software Co. Ltd., B | Software | 1,200 | 4,218 | |||||||||||
Shanghai Construction Group Co. Ltd., A | Construction & Engineering | 1,400 | 637 | |||||||||||
Shanghai Dazhong Public Utilities Group Co. Ltd., A | Gas Utilities | 400 | 252 | |||||||||||
a | Shanghai Electric Group Co. Ltd., A | Electrical Equipment | 1,000 | 740 | ||||||||||
a | Shanghai Electric Group Co. Ltd., H | Electrical Equipment | 12,000 | 3,236 | ||||||||||
Shanghai Electric Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 200 | 221 | |||||||||||
Shanghai Environment Group Co. Ltd., A | Commercial Services & Supplies | 200 | 339 | |||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., A | Pharmaceuticals | 400 | 2,895 | |||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., H | Pharmaceuticals | 2,000 | 8,297 | |||||||||||
Shanghai Huayi Group Co. Ltd., B | Chemicals | 1,200 | 611 | |||||||||||
Shanghai Industrial Development Co. Ltd., A | Real Estate Management & Development | 200 | 165 | |||||||||||
Shanghai Industrial Holdings Ltd. | Industrial Conglomerates | 2,000 | 2,658 | |||||||||||
Shanghai Industrial Urban Development Group Ltd. | Real Estate Management & Development | 400 | 38 | |||||||||||
Shanghai International Airport Co. Ltd., A | Transportation Infrastructure | 400 | 4,054 | |||||||||||
Shanghai International Port Group Co. Ltd., A | Transportation Infrastructure | 3,400 | 2,094 | |||||||||||
Shanghai Jahwa United Co. Ltd., A | Personal Products | 400 | 2,222 | |||||||||||
Shanghai Jinjiang International Hotels Co. Ltd. | Hotels, Restaurants & Leisure | 600 | 993 | |||||||||||
a,b,c | Shanghai Junshi Biosciences Co. Ltd., H, 144A, Reg S | Biotechnology | 400 | 2,480 | ||||||||||
Shanghai Lingang Holdings Corp. Ltd. | Real Estate Management & Development | 400 | 1,316 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B | Real Estate Management & Development | 4,280 | 3,578 | |||||||||||
Shanghai M&G Stationery Inc., A | Commercial Services & Supplies | 200 | 2,001 | |||||||||||
Shanghai Mechanical and Electrical Industry Co. Ltd., A | Machinery | 200 | 490 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., A | Health Care Providers & Services | 400 | 1,197 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., H | Health Care Providers & Services | 3,000 | 5,017 | |||||||||||
Shanghai Pudong Development Bank Co. Ltd., A | Banks | 6,000 | 8,302 |
132 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Shanghai Putailai New Energy Technology Co. Ltd., A | Chemicals | 200 | $ | 3,200 | ||||||||||
Shanghai RAAS Blood Products Co. Ltd., A | Biotechnology | 1,000 | 1,211 | |||||||||||
Shanghai Shibei Hi-Tech Co. Ltd., B | Real Estate Management & Development | 1,800 | 677 | |||||||||||
Shanghai Shimao Co. Ltd., A | Real Estate Management & Development | 800 | 726 | |||||||||||
Shanghai Tunnel Engineering Co. Ltd., A | Construction & Engineering | 800 | 663 | |||||||||||
Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd. | Trading Companies & Distributors | 800 | 774 | |||||||||||
Shanghai Yuyuan Tourist Mart Group Co. Ltd., A | Specialty Retail | 600 | 781 | |||||||||||
Shanghai Zhangjiang High-Tech Park Development Co. Ltd., A | Real Estate Management & Development | 200 | 559 | |||||||||||
Shanghai Zhenhua Port Machinery Co. Ltd., B | Machinery | 4,080 | 1,032 | |||||||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 400 | 360 | |||||||||||
Shanxi Securities Co. Ltd. | Capital Markets | 520 | 609 | |||||||||||
Shanxi Xinghuacun Fen Wine Factory Co. Ltd., A | Beverages | 200 | 5,841 | |||||||||||
Shanxi Xishan Coal & Electricity Power Co. Ltd. | Oil, Gas & Consumable Fuels | 780 | 500 | |||||||||||
a | Shanying International Holding Co. Ltd., A | Paper & Forest Products | 600 | 272 | ||||||||||
a | Shenghe Resources Holding Co. Ltd., A | Metals & Mining | 200 | 203 | ||||||||||
Shengyi Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 800 | 2,749 | |||||||||||
Shenwan Hongyuan Group Co. Ltd. | Capital Markets | 4,400 | 3,443 | |||||||||||
b,c | Shenwan Hongyuan Group Co. Ltd., 144A, Reg S | Capital Markets | 9,600 | 2,552 | ||||||||||
Shenzhen Accord Pharmaceutical Co. Ltd., B | Health Care Providers & Services | 600 | 1,733 | |||||||||||
Shenzhen Agricultural Products Group Co. Ltd. | Food & Staples Retailing | 200 | 213 | |||||||||||
Shenzhen Airport Co. Ltd. | Transportation Infrastructure | 400 | 503 | |||||||||||
Shenzhen Aisidi Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 240 | |||||||||||
Shenzhen Energy Group Co. Ltd. | Independent Power and Renewable Electricity Producers | 480 | 379 | |||||||||||
Shenzhen Everwin Precision Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 703 | |||||||||||
Shenzhen Expressway Co. Ltd., H | Transportation Infrastructure | 4,000 | 3,474 | |||||||||||
Shenzhen Gas Corp. Ltd., A | Gas Utilities | 600 | 607 | |||||||||||
Shenzhen Huaqiang Industry Co. Ltd. | Real Estate Management & Development | 200 | 397 | |||||||||||
Shenzhen Inovance Technology Co. Ltd. | Machinery | 400 | 3,413 | |||||||||||
Shenzhen International Holdings Ltd. | Transportation Infrastructure | 3,000 | 4,754 | |||||||||||
Shenzhen Investment Ltd. | Real Estate Management & Development | 12,000 | 3,499 | |||||||||||
Shenzhen Jinjia Group Co. Ltd. | Containers & Packaging | 200 | 266 | |||||||||||
Shenzhen Kaifa Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 200 | 608 | |||||||||||
Shenzhen Kangtai Biological Products Co. Ltd. | Biotechnology | 200 | 5,364 | |||||||||||
Shenzhen Kingdom Sci-Tech Co. Ltd., A | Software | 200 | 532 | |||||||||||
Shenzhen Kinwong Electronic Co. Ltd., A | Electronic Equipment, Instruments & Components | 400 | 1,966 | |||||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | Health Care Equipment & Supplies | 200 | 10,256 | |||||||||||
a | Shenzhen MTC Co. Ltd. | Household Durables | 400 | 364 | ||||||||||
Shenzhen Overseas Chinese Town Co. Ltd. | Hotels, Restaurants & Leisure | 1,400 | 1,399 | |||||||||||
Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 200 | 1,016 | |||||||||||
Shenzhen Sunway Communication Co. Ltd. | Communications Equipment | 200 | 1,606 |
franklintempleton.com | Semiannual Report | 133 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., A | Metals & Mining | 600 | $ | 363 | ||||||||||
Shenzhou International Group Holdings Ltd. | Textiles, Apparel & Luxury Goods | 2,200 | 37,045 | |||||||||||
a | Shijiazhuang Changshan BeiMing Technology Co. Ltd. | Textiles, Apparel & Luxury Goods | 200 | 223 | ||||||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd. | Pharmaceuticals | 200 | 795 | |||||||||||
Shimao Group Holdings Ltd. | Real Estate Management & Development | 4,500 | 18,581 | |||||||||||
Shougang Fushan Resources Group Ltd. | Metals & Mining | 12,000 | 2,570 | |||||||||||
Shui On Land Ltd. | Real Estate Management & Development | 13,000 | 1,644 | |||||||||||
a | Siasun Robot & Automation Co. Ltd. | Machinery | 200 | 426 | ||||||||||
Sichuan Chuantou Energy Co Ltd | Independent Power and Renewable Electricity Producers | 800 | 1,156 | |||||||||||
Sichuan Expressway Co. Ltd., A | Transportation Infrastructure | 2,400 | 1,248 | |||||||||||
a | Sichuan Hebang Biotechnology Co. Ltd., A | Chemicals | 1,200 | 248 | ||||||||||
Sichuan Kelun Pharmaceutical Co. Ltd. | Pharmaceuticals | 600 | 1,965 | |||||||||||
Sichuan Languang Development Co. Ltd., A | Real Estate Management & Development | 200 | 148 | |||||||||||
Sichuan Road & Bridge Co. Ltd., A | Construction & Engineering | 1,000 | 631 | |||||||||||
Sichuan Swellfun Co. Ltd., A | Beverages | 200 | 1,901 | |||||||||||
Sieyuan Electric Co. Ltd. | Electrical Equipment | 200 | 701 | |||||||||||
Silergy Corp. | Semiconductors & Semiconductor Equipment | 200 | 11,774 | |||||||||||
a | SINA Corp. | Interactive Media & Services | 180 | 7,670 | ||||||||||
Sino-Ocean Land Holdings Ltd. | Real Estate Management & Development | 10,000 | 2,013 | |||||||||||
Sinochem International Corp., A | Trading Companies & Distributors | 600 | 454 | |||||||||||
Sinolink Securities Co. Ltd., A | Capital Markets | 400 | 901 | |||||||||||
Sinoma International Engineering Co. | Construction & Engineering | 600 | 622 | |||||||||||
Sinoma Science & Technology Co. Ltd. | Chemicals | 200 | 589 | |||||||||||
Sinopec Engineering Group Co. Ltd. | Construction & Engineering | 5,000 | 1,845 | |||||||||||
a | Sinopec Oilfield Service Corp. | Energy Equipment & Services | 8,000 | 511 | ||||||||||
a | Sinopec Oilfield Service Corp., A | Energy Equipment & Services | 600 | 160 | ||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., A | Chemicals | 600 | 294 | |||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., H | Chemicals | 12,000 | 2,183 | |||||||||||
Sinopharm Group Co. Ltd., H | Health Care Providers & Services | 4,000 | 8,392 | |||||||||||
Sinotrans Ltd., A | Air Freight & Logistics | 3,400 | 1,839 | |||||||||||
Sinotrans Ltd., H | Air Freight & Logistics | 6,000 | 1,432 | |||||||||||
Sinotruk Hong Kong Ltd. | Machinery | 2,000 | 5,125 | |||||||||||
SITC International Holdings Co. Ltd. | Marine | 4,000 | 5,523 | |||||||||||
a | Soho China Ltd. | Real Estate Management & Development | 7,000 | 1,888 | ||||||||||
Songcheng Performance Development Co. Ltd. | Hotels, Restaurants & Leisure | 360 | 968 | |||||||||||
SooChow Securities Co. Ltd., A | Capital Markets | 520 | 818 | |||||||||||
Southwest Securities Co. Ltd., A | Capital Markets | 800 | 620 | |||||||||||
Spring Airlines Co. Ltd., A | Airlines | 200 | 1,326 | |||||||||||
STO Express Co. Ltd. | Air Freight & Logistics | 200 | 444 | |||||||||||
Sun Art Retail Group Ltd. | Food & Staples Retailing | 7,000 | 7,723 | |||||||||||
Sunac China Holdings Ltd. | Real Estate Management & Development | 8,000 | 31,174 | |||||||||||
Sungrow Power Supply Co. Ltd. | Electrical Equipment | 200 | 810 | |||||||||||
Suning Universal Co. Ltd. | Real Estate Management & Development | 1,000 | 463 | |||||||||||
Suning.com Co. Ltd. | Specialty Retail | 2,400 | 3,218 | |||||||||||
Sunny Optical Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 30,529 | |||||||||||
Sunwoda Electronic Co. Ltd., A | Electrical Equipment | 200 | 798 | |||||||||||
Suofeiya Home Collection Co. Ltd. | Household Durables | 200 | 777 | |||||||||||
Suzhou Dongshan Precision Manufacturing Co. Ltd., A | Electronic Equipment, Instruments & Components | 400 | 1,556 |
134 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Suzhou Gold Mantis Construction Decoration Co. Ltd. | Construction & Engineering | 400 | $ | 570 | ||||||||||
a | Tahoe Group Co. Ltd. | Real Estate Management & Development | 200 | 127 | ||||||||||
a | TAL Education Group, ADR | Diversified Consumer Services | 1,240 | 94,290 | ||||||||||
Tangshan Jidong Cement Co. Ltd. | Construction Materials | 200 | 457 | |||||||||||
TangShan Port Group Co. Ltd., A | Transportation Infrastructure | 800 | 294 | |||||||||||
Tangshan Sanyou Chemical Industries Co. Ltd., A | Chemicals | 400 | 390 | |||||||||||
TBEA Co. Ltd., A | Electrical Equipment | 1,400 | 1,811 | |||||||||||
TCL Corp. | Household Durables | 3,600 | 3,262 | |||||||||||
Tencent Holdings Ltd. | Interactive Media & Services | 18,200 | 1,201,200 | |||||||||||
a | Tencent Music Entertainment Group, ADR | Entertainment | 1,508 | 22,273 | ||||||||||
a | The China Pacific Securities Co. Ltd., A | Capital Markets | 1,000 | 600 | ||||||||||
The People’s Insurance Co. Group of China Ltd., H | Insurance | 28,000 | 8,274 | |||||||||||
Thunder Software Technology Co. Ltd. | Software | 200 | 2,539 | |||||||||||
Tian Di Science & Technology Co. Ltd., A | Machinery | 800 | 358 | |||||||||||
Tianfeng Securities Co. Ltd., A | Capital Markets | 1,040 | 992 | |||||||||||
Tianjin Capital Environmental Protection Group Co. Ltd., A | Commercial Services & Supplies | 200 | 194 | |||||||||||
Tianjin Chase Sun Pharmaceutical Co. Ltd. | Pharmaceuticals | 1,000 | 800 | |||||||||||
Tianjin Zhonghuan Semiconductor Co. Ltd. | Semiconductors & Semiconductor Equipment | 1,000 | 3,264 | |||||||||||
Tianma Microelectronics Co. Ltd. | Electronic Equipment, Instruments & Components | 800 | 1,741 | |||||||||||
a | Tianqi Lithium Corp. | Chemicals | 260 | 762 | ||||||||||
Tianshui Huatian Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 600 | 1,211 | |||||||||||
Times China Holdings Ltd. | Real Estate Management & Development | 2,000 | 2,766 | |||||||||||
Times Neighborhood Holdings Ltd. | Commercial Services & Supplies | 2,000 | 2,643 | |||||||||||
Tingyi Cayman Islands Holding Corp. | Food Products | 6,000 | 10,576 | |||||||||||
a,c | Tongcheng-Elong Holdings Ltd., Reg S | Internet & Direct Marketing Retail | 2,400 | 4,366 | ||||||||||
Tonghua Dongbao Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 802 | |||||||||||
Tongkun Group Co. Ltd., A | Chemicals | 200 | 408 | |||||||||||
Tongling Nonferrous Metals Group Co. Ltd. | Metals & Mining | 1,400 | 460 | |||||||||||
Tongwei Co. Ltd., A | Food Products | 800 | 3,133 | |||||||||||
a | Topchoice Medical Investment Corp., A | Health Care Providers & Services | 100 | 3,149 | ||||||||||
Topsports International Holdings Ltd. | Specialty Retail | 4,000 | 5,523 | |||||||||||
Towngas China Co. Ltd. | Gas Utilities | 4,000 | 1,646 | |||||||||||
TravelSky Technology Ltd., H | IT Services | 3,000 | 6,403 | |||||||||||
a | Trip.com Group Ltd., ADR | Internet & Direct Marketing Retail | 1,498 | 46,648 | ||||||||||
Tsingtao Brewery Co. Ltd., A | Beverages | 200 | 2,214 | |||||||||||
Tsingtao Brewery Co. Ltd., H | Beverages | 1,400 | 11,390 | |||||||||||
a | Tunghsu Optoelectronic Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 600 | 268 | ||||||||||
a | Tus-Sound Environmental Resources Co. Ltd. | Commercial Services & Supplies | 200 | 230 | ||||||||||
Uni-President China Holdings Ltd. | Food Products | 4,000 | 3,654 | |||||||||||
Unigroup Guoxin Microelectronics Co. Ltd. | Semiconductors & Semiconductor Equipment | 200 | 3,501 | |||||||||||
Unisplendour Corp. Ltd. | Electronic Equipment, Instruments & Components | 560 | 2,098 | |||||||||||
Universal Scientific Industrial Shanghai Co. Ltd., A | Electronic Equipment, Instruments & Components | 200 | 752 | |||||||||||
Venustech Group Inc. | Software | 200 | 1,018 | |||||||||||
a | Vipshop Holdings Ltd., ADR | Internet & Direct Marketing Retail | 1,364 | 21,333 | ||||||||||
Walvax Biotechnology Co. Ltd. | Biotechnology | 400 | 2,999 | |||||||||||
a | Wanda Film Holding Co. Ltd., A | Entertainment | 600 | 1,574 | ||||||||||
Wangfujing Group Co. Ltd., A | Multiline Retail | 200 | 1,416 | |||||||||||
Wangsu Science & Technology Co. Ltd. | IT Services | 400 | 474 | |||||||||||
Wanhua Chemical Group Co. Ltd., A | Chemicals | 800 | 8,169 | |||||||||||
Want Want China Holdings Ltd. | Food Products | 18,000 | 12,496 | |||||||||||
Wanxiang Qianchao Co. Ltd. | Auto Components | 2,000 | 1,724 | |||||||||||
a | Weibo Corp., ADR | Interactive Media & Services | 182 | 6,630 |
franklintempleton.com | Semiannual Report | 135 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Weichai Power Co. Ltd., A | Machinery | 1,800 | $ | 4,005 | ||||||||||
Weichai Power Co. Ltd., H | Machinery | 6,000 | 12,016 | |||||||||||
Weifu High-Technology Co. Ltd., B | Auto Components | 600 | 1,036 | |||||||||||
Weihai Guangwei Composites Co. Ltd., A | Chemicals | 200 | 2,102 | |||||||||||
Wens Foodstuffs Group Co. Ltd. | Food Products | 720 | 2,073 | |||||||||||
Western Securities Co. Ltd. | Capital Markets | 600 | 840 | |||||||||||
Westone Information Industry Inc. | Electronic Equipment, Instruments & Components | 200 | 545 | |||||||||||
Will Semiconductor Ltd., A | Semiconductors & Semiconductor Equipment | 200 | 5,227 | |||||||||||
Wilmar International Ltd. | Food Products | 6,600 | 21,273 | |||||||||||
Wingtech Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 300 | 5,166 | |||||||||||
Winning Health Technology Group Co. Ltd. | Health Care Technology | 780 | 2,234 | |||||||||||
Wolong Electric Group Co. Ltd., A | Electrical Equipment | 200 | 358 | |||||||||||
a | Wonders Information Co. Ltd. | IT Services | 200 | 704 | ||||||||||
Wuchan Zhongda Group Co. Ltd., A | Distributors | 600 | 408 | |||||||||||
Wuhan Guide Infrared Co. Ltd. | Electronic Equipment, Instruments & Components | 340 | 1,732 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 400 | 2,339 | |||||||||||
Wuliangye Yibin Co. Ltd., A | Beverages | 800 | 26,053 | |||||||||||
WUS Printed Circuit Kunshan Co. Ltd. | Electronic Equipment, Instruments & Components | 600 | 1,661 | |||||||||||
WuXi AppTec Co. Ltd., A | Life Sciences Tools & Services | 200 | 2,991 | |||||||||||
WuXi AppTec Co. Ltd., H | Life Sciences Tools & Services | 800 | 11,489 | |||||||||||
a | WuXi Biologics (Cayman) Inc. | Life Sciences Tools & Services | 3,000 | 73,006 | ||||||||||
Wuxi Lead Intelligent Equipment Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 1,426 | |||||||||||
XCMG Construction Machinery Co. Ltd. | Machinery | 1,400 | 1,145 | |||||||||||
Xiamen C & D Inc., A | Trading Companies & Distributors | 600 | 757 | |||||||||||
Xiamen ITG Group Corp. Ltd., A | Trading Companies & Distributors | 400 | 398 | |||||||||||
Xiamen Meiya Pico Information Co. Ltd. | Electronic Equipment, Instruments & Components | 200 | 586 | |||||||||||
Xiamen Tungsten Co. Ltd., A | Metals & Mining | 200 | 395 | |||||||||||
a | Xiaomi Corp., B | Technology Hardware, Storage & Peripherals | 38,800 | 102,382 | ||||||||||
Xinhu Zhongbao Co. Ltd., A | Real Estate Management & Development | 1,200 | 596 | |||||||||||
Xinhua Winshare Publishing and Media Co. Ltd., H | Distributors | 2,000 | 1,262 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd. | Electrical Equipment | 600 | 904 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd., H | Electrical Equipment | 2,000 | 1,745 | |||||||||||
Xinjiang Zhongtai Chemical Co. Ltd. | Chemicals | 200 | 150 | |||||||||||
Xinyi Solar Holdings Ltd. | Semiconductors & Semiconductor Equipment | 12,000 | 19,014 | |||||||||||
Yang Quan Coal Industry Group Co. Ltd., A | Oil, Gas & Consumable Fuels | 600 | 424 | |||||||||||
Yango Group Co. Ltd. | Real Estate Management & Development | 400 | 431 | |||||||||||
c | Yangtze Optical Fibre and Cable Joint Stock Ltd. Co., H, Reg S | Communications Equipment | 1,000 | 1,535 | ||||||||||
Yantai Changyu Pioneer Wine Co. Ltd., B | Beverages | 800 | 1,545 | |||||||||||
Yantai Eddie Precision Machinery Co. Ltd., A | Machinery | 100 | 866 | |||||||||||
Yantai Jereh Oilfield Services Group Co. Ltd. | Energy Equipment & Services | 200 | 878 | |||||||||||
Yanzhou Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 1,200 | 1,637 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 4,000 | 2,973 | |||||||||||
Yealink Network Technology Corp. Ltd. | Communications Equipment | 200 | 1,777 | |||||||||||
Yifan Pharmaceutical Co. Ltd. | Pharmaceuticals | 200 | 737 | |||||||||||
Yifeng Pharmacy Chain Co. Ltd. | Food & Staples Retailing | 100 | 1,463 | |||||||||||
Yihai International Holding Ltd. | Food Products | 1,600 | 24,960 | |||||||||||
Yintai Gold Co. Ltd. | Metals & Mining | 280 | 432 | |||||||||||
Yonghui Superstores Co. Ltd., A | Food & Staples Retailing | 2,000 | 2,308 | |||||||||||
Yonyou Network Technology Co. Ltd., A | Software | 780 | 4,392 | |||||||||||
Yotrio Group Co. Ltd. | Leisure Products | 400 | 254 | |||||||||||
Youngor Group Co. Ltd., A | Real Estate Management & Development | 1,400 | 1,407 | |||||||||||
YTO Express Group Co. Ltd., A | Air Freight & Logistics | 600 | 1,236 |
136 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
a | Yuan Longping High-tech Agriculture Co. Ltd. | Food Products | 200 | $ | 540 | |||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 24,000 | 4,676 | |||||||||||
Yunda Holding Co. Ltd. | Air Freight & Logistics | 400 | 1,104 | |||||||||||
a | Yunnan Aluminium Co. Ltd. | Metals & Mining | 600 | 439 | ||||||||||
Yunnan Baiyao Group Co. Ltd. | Pharmaceuticals | 200 | 3,005 | |||||||||||
a | Yunnan Copper Co. Ltd. | Metals & Mining | 200 | 403 | ||||||||||
Yunnan Energy New Material Co. Ltd. | Containers & Packaging | 200 | 2,696 | |||||||||||
a | Yunnan Tin Co. Ltd. | Metals & Mining | 200 | 263 | ||||||||||
a | Zai Lab Ltd., ADR | Biotechnology | 184 | 15,303 | ||||||||||
Zhangzhou Pientzehuang Pharmaceutical Co. Ltd., A | Pharmaceuticals | 100 | 3,585 | |||||||||||
Zhaojin Mining Industry Co. Ltd., H | Metals & Mining | 3,000 | 3,654 | |||||||||||
a | Zhefu Holding Group Co. Ltd. | Electrical Equipment | 400 | 289 | ||||||||||
a | Zhejiang Century Huatong Group Co. Ltd., A | Entertainment | 1,600 | 2,245 | ||||||||||
Zhejiang Chint Electrics Co. Ltd., A | Electrical Equipment | 200 | 892 | |||||||||||
a | Zhejiang Conba Pharmaceutical Co. Ltd., A | Pharmaceuticals | 400 | 307 | ||||||||||
Zhejiang Crystal-Optech Co. Ltd. | Electronic Equipment, Instruments & Components | 180 | 360 | |||||||||||
Zhejiang Dahua Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 400 | 1,208 | |||||||||||
Zhejiang Dingli Machinery Co. Ltd. | Machinery | 100 | 1,461 | |||||||||||
Zhejiang Expressway Co. Ltd., H | Transportation Infrastructure | 4,000 | 2,885 | |||||||||||
Zhejiang Hailiang Co. Ltd. | Metals & Mining | 200 | 225 | |||||||||||
Zhejiang Hisoar Pharmaceutical Co. Ltd. | Pharmaceuticals | 200 | 230 | |||||||||||
Zhejiang Huace Film & TV Co. Ltd., A | Entertainment | 200 | 225 | |||||||||||
Zhejiang Huahai Pharmaceutical Co. Ltd., A | Pharmaceuticals | 460 | 2,174 | |||||||||||
a | Zhejiang Huayou Cobalt Co. Ltd., A | Metals & Mining | 400 | 2,045 | ||||||||||
Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., A | Semiconductors & Semiconductor Equipment | 200 | 903 | |||||||||||
Zhejiang Juhua Co. Ltd., A | Chemicals | 400 | 403 | |||||||||||
Zhejiang Longsheng Group Co. Ltd., A | Chemicals | 400 | 801 | |||||||||||
Zhejiang Medicine Co. Ltd., A | Pharmaceuticals | 200 | 439 | |||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 400 | 1,756 | |||||||||||
Zhejiang Runtu Co. Ltd. | Chemicals | 200 | 268 | |||||||||||
Zhejiang Sanhua Intelligent Controls Co. Ltd. | Machinery | 1,040 | 3,402 | |||||||||||
Zhejiang Semir Garment Co. Ltd. | Textiles, Apparel & Luxury Goods | 200 | 237 | |||||||||||
Zhejiang Supor Co. Ltd. | Household Durables | 200 | 2,328 | |||||||||||
Zhejiang Wanfeng Auto Wheel Co. Ltd. | Auto Components | 200 | 200 | |||||||||||
Zhejiang Wanliyang Co. Ltd. | Machinery | 200 | 281 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd. | Building Products | 200 | 471 | |||||||||||
Zhejiang Yasha Decoration Co. Ltd. | Diversified Consumer Services | 600 | 879 | |||||||||||
Zhengzhou Coal Mining Machinery Group Co. Ltd., A | Machinery | 200 | 276 | |||||||||||
Zhengzhou Yutong Bus Co. Ltd., A | Machinery | 400 | 927 | |||||||||||
Zheshang Securities Co. Ltd., A | Capital Markets | 200 | 522 | |||||||||||
a,c | ZhongAn Online P&C Insurance Co. Ltd., Reg S | Insurance | 1,200 | 5,930 | ||||||||||
Zhongji Innolight Co. Ltd. | Communications Equipment | 200 | 1,482 | |||||||||||
Zhongjin Gold Corp. Ltd., A | Metals & Mining | 1,200 | 1,777 | |||||||||||
Zhongshan Public Utilities Group Co. Ltd. | Water Utilities | 400 | 488 | |||||||||||
Zhongsheng Group Holdings Ltd. | Specialty Retail | 2,000 | 12,477 | |||||||||||
Zhuzhou CRRC Times Electric Co. Ltd., H | Electrical Equipment | 1,400 | 4,679 | |||||||||||
Zijin Mining Group Co. Ltd., A | Metals & Mining | 4,800 | 4,350 | |||||||||||
Zijin Mining Group Co. Ltd., H | Metals & Mining | 16,000 | 10,116 | |||||||||||
a | Zoomlion Heavy Industry Science and Technology Co. Ltd. | Machinery | 1,200 | 1,434 | ||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. | Machinery | 4,400 | 4,224 | |||||||||||
ZTE Corp. | Communications Equipment | 1,000 | 4,877 |
franklintempleton.com | Semiannual Report | 137 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
China (continued) | ||||||||||||||
ZTE Corp., H | Communications Equipment | 2,400 | $ | 5,710 | ||||||||||
ZTO Express Cayman Inc., ADR | Air Freight & Logistics | 1,236 | 36,981 | |||||||||||
|
| |||||||||||||
8,631,332 | ||||||||||||||
|
| |||||||||||||
Hong Kong 7.4% | ||||||||||||||
AIA Group Ltd. | Insurance | 38,400 | 376,072 | |||||||||||
a | Alibaba Pictures Group Ltd. | Entertainment | 40,000 | 5,935 | ||||||||||
ASM Pacific Technology Ltd. | Semiconductors & Semiconductor Equipment | 1,000 | 10,168 | |||||||||||
BOC Hong Kong (Holdings) Ltd. | Banks | 12,000 | 31,587 | |||||||||||
Cafe de Coral Holdings Ltd. | Hotels, Restaurants & Leisure | 2,000 | 4,212 | |||||||||||
a | Cathay Pacific Airways Ltd. | Airlines | 2,000 | 1,381 | ||||||||||
Champion REIT | Equity Real Estate Investment Trusts (REITs | ) | 6,000 | 2,973 | ||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 8,600 | 41,890 | |||||||||||
CK Hutchison Holdings Ltd. | Industrial Conglomerates | 8,500 | 51,110 | |||||||||||
CK Infrastructure Holdings Ltd. | Electric Utilities | 2,000 | 9,329 | |||||||||||
CLP Holdings Ltd. | Electric Utilities | 5,200 | 48,310 | |||||||||||
Dah Sing Banking Group Ltd. | Banks | 1,600 | 1,385 | |||||||||||
Dah Sing Financial Group | Banks | 800 | 1,922 | |||||||||||
Dairy Farm International Holdings Ltd. | Food & Staples Retailing | 1,000 | 3,770 | |||||||||||
a,b,c | ESR Cayman Ltd., Reg S, 144A | Real Estate Management & Development | 3,600 | 11,172 | ||||||||||
Guotai Junan International holdings Ltd. | Capital Markets | 10,000 | 1,329 | |||||||||||
Haitong International Securities Group Ltd. | Capital Markets | 10,000 | 2,387 | |||||||||||
Hang Lung Group Ltd. | Real Estate Management & Development | 2,000 | 4,547 | |||||||||||
Hang Lung Properties Ltd. | Real Estate Management & Development | 6,000 | 15,159 | |||||||||||
Hang Seng Bank Ltd. | Banks | 2,400 | 35,334 | |||||||||||
Henderson Land Development Co. Ltd. | Real Estate Management & Development | 4,000 | 14,735 | |||||||||||
Hong Kong and China Gas Co. Ltd. | Gas Utilities | 32,000 | 45,832 | |||||||||||
Hong Kong Exchanges and Clearing Ltd. | Capital Markets | 4,000 | 186,735 | |||||||||||
Hongkong Land Holdings Ltd. | Real Estate Management & Development | 3,600 | 13,356 | |||||||||||
Huabao International Holdings Ltd. | Chemicals | 2,000 | 1,809 | |||||||||||
Hysan Development Co. Ltd. | Real Estate Management & Development | 2,000 | 5,974 | |||||||||||
Jardine Matheson Holdings Ltd. | Industrial Conglomerates | 700 | 27,776 | |||||||||||
Jardine Strategic Holdings Ltd. | Industrial Conglomerates | 600 | 11,886 | |||||||||||
Johnson Electric Holdings Ltd. | Auto Components | 1,000 | 2,170 | |||||||||||
JS Global Lifestyle Co. Ltd. | Household Durables | 3,000 | 5,381 | |||||||||||
Kerry Properties Ltd. | Real Estate Management & Development | 2,000 | 5,104 | |||||||||||
Kingboard Laminates Holdings Ltd. | Chemicals | 4,000 | 5,471 | |||||||||||
a | Lifestyle International Holdings Ltd. | Multiline Retail | 2,000 | 1,631 | ||||||||||
Link REIT | Equity Real Estate Investment Trusts (REITs | ) | 6,600 | 53,652 | ||||||||||
Man Wah Holdings Ltd. | Household Durables | 4,800 | 6,355 | |||||||||||
Melco International Development Ltd. | Hotels, Restaurants & Leisure | 2,000 | 3,499 | |||||||||||
MTR Corp. Ltd. | Road & Rail | 4,500 | 22,210 | |||||||||||
New World Development Co. Ltd. | Real Estate Management & Development | 4,500 | 21,774 | |||||||||||
NWS Holdings Ltd. | Industrial Conglomerates | 4,000 | 3,040 | |||||||||||
a | Pacific Century Premium Developments Ltd. | Real Estate Management & Development | 1,512 | 396 | ||||||||||
PCCW Ltd. | Diversified Telecommunication Services | 14,000 | 8,346 | |||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 4,500 | 23,574 | |||||||||||
a | Sa Sa International Holdings Ltd. | Specialty Retail | 4,000 | 692 | ||||||||||
a | Samsonite International SA | Textiles, Apparel & Luxury Goods | 4,200 | 4,227 | ||||||||||
a | Shangri-La Asia Ltd. | Hotels, Restaurants & Leisure | 4,000 | 3,272 | ||||||||||
Shun Tak Holdings Ltd. | Industrial Conglomerates | 4,000 | 1,280 | |||||||||||
Sino Biopharmaceutical Ltd. | Pharmaceuticals | 32,000 | 34,849 | |||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 10,000 | 11,613 | |||||||||||
Sun Hung Kai Properties Ltd. | Real Estate Management & Development | 4,500 | 57,368 | |||||||||||
Swire Pacific Ltd., A | Real Estate Management & Development | 1,500 | 7,200 | |||||||||||
Swire Pacific Ltd., B | Real Estate Management & Development | 2,500 | 2,071 | |||||||||||
Swire Properties Ltd. | Real Estate Management & Development | 3,600 | 9,476 | |||||||||||
Techtronic Industries Co. Ltd. | Machinery | 4,000 | 52,439 |
138 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Hong Kong (continued) | ||||||||||||||
The Bank of East Asia Ltd. | Banks | 3,600 | $ | 6,615 | ||||||||||
The Wharf Holdings Ltd. | Real Estate Management & Development | 4,000 | 7,959 | |||||||||||
United Energy Group Ltd. | Oil, Gas & Consumable Fuels | 28,000 | 3,974 | |||||||||||
Vinda International Holdings Ltd. | Household Products | 1,000 | 3,277 | |||||||||||
Vitasoy International Holdings Ltd. | Food Products | 2,000 | 7,755 | |||||||||||
VTech Holdings Ltd. | Communications Equipment | 600 | 3,732 | |||||||||||
c | WH Group Ltd., Reg S | Food Products | 27,000 | 21,879 | ||||||||||
Wharf Real Estate Investment Co. Ltd. | Real Estate Management & Development | 5,000 | 20,322 | |||||||||||
Xinyi Glass Holdings Ltd. | Auto Components | 6,000 | 12,062 | |||||||||||
Yue Yuen Industrial Holdings Ltd. | Textiles, Apparel & Luxury Goods | 2,000 | 3,231 | |||||||||||
|
| |||||||||||||
1,405,971 | ||||||||||||||
|
| |||||||||||||
India 10.2% | ||||||||||||||
a | 3M India Ltd. | Industrial Conglomerates | 6 | 1,489 | ||||||||||
ABB India Ltd. | Electrical Equipment | 170 | 1,980 | |||||||||||
ACC Ltd. | Construction Materials | 144 | 2,720 | |||||||||||
Adani Enterprises Ltd. | Trading Companies & Distributors | 1,018 | 4,099 | |||||||||||
a | Adani Green Energy Ltd. | Independent Power and Renewable Electricity Producers | 1,250 | 12,497 | ||||||||||
Adani Ports And Special Economic Zone Ltd. | Transportation Infrastructure | 2,378 | 11,015 | |||||||||||
a | Adani Power Ltd. | Independent Power and Renewable Electricity Producers | 3,204 | 1,602 | ||||||||||
a | Aditya Birla Capital Ltd. | Diversified Financial Services | 1,764 | 1,487 | ||||||||||
Alkem Laboratories Ltd. | Pharmaceuticals | 86 | 3,238 | |||||||||||
Ambuja Cements Ltd. | Construction Materials | 2,124 | 6,247 | |||||||||||
Ashok Leyland Ltd. | Machinery | 4,202 | 4,237 | |||||||||||
Asian Paints Ltd. | Chemicals | 1,046 | 28,162 | |||||||||||
a | AU Small Finance Bank Ltd. | Banks | 470 | 4,168 | ||||||||||
Aurobindo Pharma Ltd. | Pharmaceuticals | 810 | 8,744 | |||||||||||
a | Avenue Supermarts Ltd. | Food & Staples Retailing | 478 | 14,274 | ||||||||||
a | Axis Bank Ltd. | Banks | 7,224 | 41,579 | ||||||||||
Bajaj Auto Ltd. | Automobiles | 266 | 10,387 | |||||||||||
Bajaj Finance Ltd. | Consumer Finance | 602 | 26,751 | |||||||||||
Bajaj Finserv Ltd. | Insurance | 114 | 9,043 | |||||||||||
Bajaj Holdings & Investment Ltd. | Diversified Financial Services | 90 | 2,945 | |||||||||||
Balkrishna Industries Ltd. | Auto Components | 250 | 5,005 | |||||||||||
a | Bandhan Bank Ltd. | Banks | 2,526 | 9,347 | ||||||||||
a | Bank of Baroda | Banks | 2,666 | 1,483 | ||||||||||
a | Bank of India | Banks | 972 | 536 | ||||||||||
Bata India Ltd. | Textiles, Apparel & Luxury Goods | 64 | 1,144 | |||||||||||
Bayer Cropscience Ltd. | Chemicals | 36 | 2,875 | |||||||||||
Berger Paints India Ltd. | Chemicals | 830 | 6,566 | |||||||||||
Bharat Electronics Ltd. | Aerospace & Defense | 2,016 | 2,616 | |||||||||||
Bharat Forge Ltd. | Auto Components | 668 | 4,052 | |||||||||||
Bharat Heavy Electricals Ltd. | Electrical Equipment | 2,868 | 1,137 | |||||||||||
Bharat Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 3,238 | 15,494 | |||||||||||
Bharti Airtel Ltd. | Wireless Telecommunication Services | 5,496 | 31,357 | |||||||||||
Bharti Infratel Ltd. | Diversified Telecommunication Services | 2,614 | 6,211 | |||||||||||
a | Biocon Ltd. | Biotechnology | 984 | 5,971 | ||||||||||
Bosch Ltd. | Auto Components | 24 | 4,466 | |||||||||||
Britannia Industries Ltd. | Food Products | 232 | 11,943 | |||||||||||
Cadila Healthcare Ltd. | Pharmaceuticals | 816 | 4,369 | |||||||||||
a | Canara Bank Ltd. | Banks | 546 | 658 | ||||||||||
Castrol India Ltd. | Chemicals | 1,746 | 2,588 | |||||||||||
Cholamandalam Investment and Finance Co. Ltd. | Consumer Finance | 652 | 2,202 | |||||||||||
Cipla Ltd. | Pharmaceuticals | 1,174 | 12,327 | |||||||||||
Coal India Ltd. | Oil, Gas & Consumable Fuels | 4,968 | 7,811 | |||||||||||
Colgate-Palmolive (India) Ltd. | Personal Products | 242 | 4,702 |
franklintempleton.com | Semiannual Report | 139 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
India (continued) | ||||||||||||||
Container Corp. of India Ltd. | Road & Rail | 734 | $ | 3,631 | ||||||||||
Coromandel International Ltd. | Chemicals | 250 | 2,619 | |||||||||||
Cummins India Ltd. | Machinery | 256 | 1,545 | |||||||||||
Dabur India Ltd. | Personal Products | 1,662 | 11,501 | |||||||||||
a | Dalmia Bharat Ltd. | Construction Materials | 142 | 1,504 | ||||||||||
Divi’s Laboratories Ltd. | Life Sciences Tools & Services | 290 | 11,980 | |||||||||||
DLF Ltd. | Real Estate Management & Development | 2,114 | 4,374 | |||||||||||
Dr Reddy’s Laboratories Ltd. | Pharmaceuticals | 290 | 20,391 | |||||||||||
Eicher Motors Ltd. | Automobiles | 428 | 12,778 | |||||||||||
Emami Ltd. | Personal Products | 420 | 2,000 | |||||||||||
Embassy Office Parks REIT | Equity Real Estate Investment Trusts (REITs | ) | 800 | 3,912 | ||||||||||
Exide Industries Ltd. | Auto Components | 786 | 1,757 | |||||||||||
a | Federal Bank Ltd. | Banks | 4,584 | 3,020 | ||||||||||
a | Future Retail Ltd. | Multiline Retail | 696 | 850 | ||||||||||
GAIL India Ltd. | Gas Utilities | 3,600 | 4,235 | |||||||||||
Gillette India Ltd. | Personal Products | 28 | 2,027 | |||||||||||
GlaxoSmithKline Pharmaceuticals Ltd. | Pharmaceuticals | 134 | 2,861 | |||||||||||
Glenmark Pharmaceuticals Ltd. | Pharmaceuticals | 474 | 3,101 | |||||||||||
a | GMR Infrastructure Ltd. | Transportation Infrastructure | 5,980 | 1,868 | ||||||||||
Godrej Consumer Products Ltd. | Personal Products | 1,138 | 11,182 | |||||||||||
a | Godrej Industries Ltd. | Industrial Conglomerates | 230 | 1,283 | ||||||||||
a | Godrej Properties Ltd. | Real Estate Management & Development | 208 | 2,426 | ||||||||||
Grasim Industries Ltd. | Construction Materials | 1,106 | 11,156 | |||||||||||
Gujarat Gas Ltd. | Gas Utilities | 550 | 2,299 | |||||||||||
Havell’s India Ltd. | Electrical Equipment | 642 | 5,898 | |||||||||||
HCL Technologies Ltd. | IT Services | 3,496 | 38,457 | |||||||||||
b,c | HDFC Asset Management Co. Ltd., 144A, Reg S | Capital Markets | 134 | 4,123 | ||||||||||
a | HDFC Life Insurance Co. Ltd. | Insurance | 2,086 | 15,816 | ||||||||||
a,e | Hemisphere Properties India Ltd. | Diversified Telecommunication Services | 262 | 592 | ||||||||||
Hero Motocorp Ltd. | Automobiles | 336 | 14,333 | |||||||||||
Hindalco Industries Ltd. | Metals & Mining | 3,164 | 7,515 | |||||||||||
Hindustan Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 1,990 | 4,872 | |||||||||||
Hindustan Unilever Ltd. | Household Products | 2,828 | 79,276 | |||||||||||
Hindustan Zinc Ltd. | Metals & Mining | 690 | 1,963 | |||||||||||
Housing Development Finance Corp. Ltd. | Thrifts & Mortgage Finance | 5,532 | 130,468 | |||||||||||
a | ICICI Bank Ltd. | Banks | 4,900 | 23,560 | ||||||||||
b,c | ICICI Lombard General Insurance Co. Ltd., 144A, Reg S | Insurance | 618 | 10,885 | ||||||||||
c | ICICI Prudential Life Insurance Co. Ltd., Reg S | Insurance | 1,046 | 5,967 | ||||||||||
a | IDFC First Bank Ltd. | Banks | 7,850 | 3,187 | ||||||||||
Indiabulls Housing Finance Ltd. | Thrifts & Mortgage Finance | 1,154 | 2,458 | |||||||||||
Indian Oil Corp. Ltd. | Oil, Gas & Consumable Fuels | 6,880 | 6,891 | |||||||||||
Indian Railway Catering and Tourism Corp. Ltd. | Commercial Services & Supplies | 62 | 1,163 | |||||||||||
Indraprastha Gas Ltd. | Gas Utilities | 1,110 | 5,819 | |||||||||||
Info Edge India Ltd. | Interactive Media & Services | 214 | 10,542 | |||||||||||
Infosys Ltd. | IT Services | 11,496 | 157,100 | |||||||||||
a,c | InterGlobe Aviation Ltd., Reg S | Airlines | 326 | 5,519 | ||||||||||
IPCA Laboratories Ltd. | Pharmaceuticals | 158 | 4,639 | |||||||||||
ITC Ltd. | Tobacco | 9,706 | 22,588 | |||||||||||
a | Jindal Steel & Power Ltd. | Metals & Mining | 1,410 | 3,571 | ||||||||||
JSW Energy Ltd. | Independent Power and Renewable Electricity Producers | 1,352 | 1,034 | |||||||||||
JSW Steel Ltd. | Metals & Mining | 3,346 | 12,596 | |||||||||||
Jubilant Foodworks Ltd. | Hotels, Restaurants & Leisure | 206 | 6,546 | |||||||||||
Kansai Nerolac Paints Ltd. | Chemicals | 428 | 2,905 |
140 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
India (continued) | ||||||||||||||
L&T Finance Holdings Ltd. | Diversified Financial Services | 1,686 | $ | 1,419 | ||||||||||
c | Larsen & Toubro Infotech Ltd., Reg S | IT Services | 114 | 3,930 | ||||||||||
Larsen & Toubro Ltd. | Construction & Engineering | 1,342 | 16,399 | |||||||||||
LIC Housing Finance Ltd. | Thrifts & Mortgage Finance | 886 | 3,312 | |||||||||||
Lupin Ltd. | Pharmaceuticals | 772 | 10,541 | |||||||||||
a | Mahindra & Mahindra Financial Services Ltd. | Consumer Finance | 2,104 | 3,510 | ||||||||||
Mahindra & Mahindra Ltd. | Automobiles | 2,122 | 17,484 | |||||||||||
a | Mangalore Refinery and Petrochemicals Ltd. | Oil, Gas & Consumable Fuels | 446 | 155 | ||||||||||
Marico Ltd. | Personal Products | 1,620 | 7,970 | |||||||||||
Maruti Suzuki India Ltd. | Automobiles | 386 | 35,280 | |||||||||||
Motherson Sumi Systems Ltd. | Auto Components | 3,296 | 5,131 | |||||||||||
Mphasis Ltd. | IT Services | 270 | 5,063 | |||||||||||
MRF Ltd. | Auto Components | 6 | 4,845 | |||||||||||
Muthoot Finance Ltd. | Consumer Finance | 354 | 5,432 | |||||||||||
Nestle India Ltd. | Food Products | 84 | 18,124 | |||||||||||
NHPC Ltd. | Independent Power and Renewable Electricity Producers | 4,608 | 1,262 | |||||||||||
Nippon Life India Asset Management Ltd. | Capital Markets | 414 | 1,471 | |||||||||||
NMDC Ltd. | Metals & Mining | 2,568 | 2,863 | |||||||||||
NTPC Ltd. | Independent Power and Renewable Electricity Producers | 9,246 | 10,665 | |||||||||||
a | Oberoi Realty Ltd. | Real Estate Management & Development | 290 | 1,549 | ||||||||||
Oil & Natural Gas Corp. Ltd. | Oil, Gas & Consumable Fuels | 9,702 | 9,106 | |||||||||||
Oil India Ltd. | Oil, Gas & Consumable Fuels | 1,078 | 1,305 | |||||||||||
Oracle Financial Services Software Ltd. | Software | 76 | 3,165 | |||||||||||
Page Industries Ltd. | Textiles, Apparel & Luxury Goods | 12 | 3,470 | |||||||||||
Petronet LNG Ltd. | Oil, Gas & Consumable Fuels | 1,836 | 5,491 | |||||||||||
PI Industries Ltd. | Chemicals | 202 | 5,398 | |||||||||||
Pidilite Industries Ltd. | Chemicals | 426 | 8,281 | |||||||||||
Piramal Enterprises Ltd. | Pharmaceuticals | 366 | 6,218 | |||||||||||
Power Finance Corp. Ltd. | Diversified Financial Services | 2,200 | 2,570 | |||||||||||
Power Grid Corp. of India Ltd. | Electric Utilities | 5,952 | 13,105 | |||||||||||
a | Punjab National Bank Ltd. | Banks | 3,206 | 1,241 | ||||||||||
Rajesh Exports Ltd. | Textiles, Apparel & Luxury Goods | 478 | 2,896 | |||||||||||
c | RBL Bank Ltd., Reg S | Banks | 1,086 | 2,501 | ||||||||||
REC Ltd. | Diversified Financial Services | 1,786 | 2,399 | |||||||||||
Reliance Industries Ltd. | Oil, Gas & Consumable Fuels | 9,902 | 299,872 | |||||||||||
SBI Cards & Payment Services Ltd. | Consumer Finance | 434 | 4,986 | |||||||||||
a | SBI Life Insurance Co. Ltd. | Insurance | 1,122 | 12,340 | ||||||||||
Shree Cement Ltd. | Construction Materials | 30 | 8,237 | |||||||||||
Shriram Transport Finance Co. Ltd. | Consumer Finance | 646 | 5,423 | |||||||||||
Siemens Ltd. | Industrial Conglomerates | 294 | 5,039 | |||||||||||
SRF Ltd. | Chemicals | 54 | 3,023 | |||||||||||
a | State Bank of India | Banks | 5,990 | 15,052 | ||||||||||
a | Steel Authority of India Ltd. | Metals & Mining | 3,318 | 1,518 | ||||||||||
Sun Pharmaceutical Industries Ltd. | Pharmaceuticals | 3,484 | 23,632 | |||||||||||
Sun TV Network Ltd. | Media | 194 | 1,224 | |||||||||||
Tata Communications Ltd. | Diversified Telecommunication Services | 216 | 2,481 | |||||||||||
Tata Consultancy Services Ltd. | IT Services | 2,992 | 101,070 | |||||||||||
Tata Consumer Products Ltd. | Food Products | 1,250 | 8,470 | |||||||||||
a | Tata Motors Ltd. | Automobiles | 3,508 | 6,338 | ||||||||||
a | Tata Motors Ltd., A | Automobiles | 1,030 | 877 | ||||||||||
Tata Power Co. Ltd. | Electric Utilities | 3,270 | 2,362 | |||||||||||
Tata Steel Ltd. | Metals & Mining | 1,236 | 6,027 | |||||||||||
Tech Mahindra Ltd. | IT Services | 1,576 | 16,912 | |||||||||||
Titan Co. Ltd. | Textiles, Apparel & Luxury Goods | 1,040 | 16,934 | |||||||||||
Torrent Pharmaceuticals Ltd. | Pharmaceuticals | 144 | 5,465 |
franklintempleton.com | Semiannual Report | 141 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
India (continued) | ||||||||||||||
Torrent Power Ltd. | Electric Utilities | 444 | $ | 1,886 | ||||||||||
Trent Ltd. | Multiline Retail | 576 | 5,245 | |||||||||||
TVS Motor Co. Ltd. | Automobiles | 390 | 2,475 | |||||||||||
UltraTech Cement Ltd. | Construction Materials | 356 | 19,540 | |||||||||||
a | Union Bank of India Ltd. | Banks | 1,284 | 424 | ||||||||||
United Breweries Ltd. | Beverages | 234 | 3,033 | |||||||||||
a | United Spirits Ltd. | Beverages | 888 | 6,209 | ||||||||||
UPL Ltd. | Chemicals | 1,634 | 11,138 | |||||||||||
Vedanta Ltd. | Metals & Mining | 4,972 | 9,226 | |||||||||||
a | Vodafone Idea Ltd. | Wireless Telecommunication Services | 24,740 | 3,202 | ||||||||||
Voltas Ltd. | Construction & Engineering | 384 | 3,541 | |||||||||||
Whirlpool of India Ltd. | Household Durables | 102 | 3,037 | |||||||||||
Wipro Ltd. | IT Services | 4,294 | 18,249 | |||||||||||
a | Yes Bank Ltd. | Banks | 4,442 | 792 | ||||||||||
Zee Entertainment Enterprises Ltd. | Media | 2,886 | 8,171 | |||||||||||
|
| |||||||||||||
1,923,108 | ||||||||||||||
|
| |||||||||||||
Indonesia 1.4% | ||||||||||||||
Adaro Energy Tbk PT | Oil, Gas & Consumable Fuels | 44,600 | 3,402 | |||||||||||
Astra Agro Lestari Tbk PT | Food Products | 1,400 | 957 | |||||||||||
Astra International Tbk PT | Automobiles | 63,800 | 19,123 | |||||||||||
Bank Central Asia Tbk PT | Banks | 30,800 | 56,094 | |||||||||||
e | Bank Danamon Indonesia Tbk PT | Banks | 2,400 | 350 | ||||||||||
Bank Mandiri Persero Tbk PT | Banks | 57,000 | 19,000 | |||||||||||
Bank Negara Indonesia Persero Tbk PT | Banks | 24,000 | 7,161 | |||||||||||
Bank Rakyat Indonesia Persero Tbk PT | Banks | 168,400 | 34,404 | |||||||||||
a | Barito Pacific Tbk | Chemicals | 63,800 | 3,387 | ||||||||||
Bukit Asam Tbk PT | Oil, Gas & Consumable Fuels | 15,600 | 2,065 | |||||||||||
a | Bumi Serpong Damai Tbk PT | Real Estate Management & Development | 25,200 | 1,253 | ||||||||||
Charoen Pokphand Indonesia Tbk PT | Food Products | 22,000 | 8,391 | |||||||||||
First Pacific Co. Ltd. | Diversified Financial Services | 8,000 | 2,168 | |||||||||||
Golden Agri-Resources Ltd. | Food Products | 21,200 | 2,205 | |||||||||||
a | Gudang Garam Tbk PT | Tobacco | 1,600 | 4,307 | ||||||||||
Hanjaya Mandala Sampoerna Tbk PT | Tobacco | 28,400 | 2,672 | |||||||||||
Indah Kiat Pulp & Paper Corp. Tbk PT | Paper & Forest Products | 9,000 | 5,429 | |||||||||||
Indocement Tunggal Prakarsa Tbk PT | Construction Materials | 4,400 | 3,075 | |||||||||||
Indofood CBP Sukses Makmur Tbk PT | Food Products | 7,800 | 5,281 | |||||||||||
Indofood Sukses Makmur Tbk PT | Food Products | 14,400 | 6,919 | |||||||||||
Jasa Marga Persero Tbk PT | Transportation Infrastructure | 8,000 | 1,941 | |||||||||||
Kalbe Farma Tbk PT | Pharmaceuticals | 64,600 | 6,729 | |||||||||||
a | Media Nusantara Citra Tbk PT | Media | 19,000 | 919 | ||||||||||
Perusahaan Gas Negara Tbk PT | Gas Utilities | 31,800 | 1,977 | |||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | Diversified Telecommunication Services | 147,800 | 25,428 | |||||||||||
Sarana Menara Nusantara Tbk PT | Diversified Telecommunication Services | 80,400 | 5,592 | |||||||||||
Semen Indonesia (Persero) Tbk PT | Construction Materials | 10,000 | 6,166 | |||||||||||
a | Smartfren Telecom Tbk PT | Wireless Telecommunication Services | 130,200 | 656 | ||||||||||
Surya Citra Media Tbk PT | Media | 22,000 | 1,797 | |||||||||||
Tower Bersama Infrastructure Tbk PT | Diversified Telecommunication Services | 36,000 | 3,230 | |||||||||||
Unilever Indonesia Tbk PT | Household Products | 19,000 | 10,343 | |||||||||||
United Tractors Tbk PT | Oil, Gas & Consumable Fuels | 4,800 | 7,355 | |||||||||||
a | Vale Indonesia Tbk PT | Metals & Mining | 7,000 | 1,675 | ||||||||||
XL Axiata Tbk | Wireless Telecommunication Services | 12,800 | 1,746 | |||||||||||
|
| |||||||||||||
263,197 | ||||||||||||||
|
| |||||||||||||
Italy 0.0%† | ||||||||||||||
a | Prada SpA | Textiles, Apparel & Luxury Goods | 1,600 | 6,235 | ||||||||||
|
|
142 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Luxembourg 0.0%† | ||||||||||||||
L’Occitane International SA | Personal Products | 1,500 | $ | 2,613 | ||||||||||
|
| |||||||||||||
Macau 0.5% | ||||||||||||||
Galaxy Entertainment Group Ltd. | Hotels, Restaurants & Leisure | 7,000 | 46,923 | |||||||||||
a | Macau Legend Development Ltd. | Hotels, Restaurants & Leisure | 4,000 | 542 | ||||||||||
MGM China Holdings Ltd. | Hotels, Restaurants & Leisure | 2,400 | 2,976 | |||||||||||
Sands China Ltd. | Hotels, Restaurants & Leisure | 7,600 | 29,272 | |||||||||||
SJM Holdings Ltd. | Hotels, Restaurants & Leisure | 6,000 | 7,068 | |||||||||||
a | Wynn Macau Ltd. | Hotels, Restaurants & Leisure | 4,800 | 7,655 | ||||||||||
|
| |||||||||||||
94,436 | ||||||||||||||
|
| |||||||||||||
Malaysia 2.1% | ||||||||||||||
a | AirAsia Group Bhd | Airlines | 5,800 | 935 | ||||||||||
Alliance Bank Malaysia Bhd. | Banks | 2,800 | 1,476 | |||||||||||
AMMB Holdings Bhd. | Banks | 6,000 | 4,332 | |||||||||||
Astro Malaysia Holdings Bhd. | Media | 5,400 | 1,001 | |||||||||||
Axiata Group Bhd. | Wireless Telecommunication Services | 14,400 | 10,223 | |||||||||||
British American Tobacco Malaysia Bhd. | Tobacco | 400 | 965 | |||||||||||
CIMB Group Holdings Bhd. | Banks | 22,200 | 16,454 | |||||||||||
Dialog Group Bhd. | Energy Equipment & Services | 15,200 | 13,936 | |||||||||||
Digi.com Bhd. | Wireless Telecommunication Services | 11,800 | 11,444 | |||||||||||
FGV Holdings Bhd. | Food Products | 7,200 | 1,993 | |||||||||||
Fraser & Neave Holdings Bhd. | Beverages | 200 | 1,545 | |||||||||||
Gamuda Bhd. | Construction & Engineering | 7,600 | 6,383 | |||||||||||
Genting Bhd. | Hotels, Restaurants & Leisure | 7,400 | 5,663 | |||||||||||
Genting Malaysia Bhd. | Hotels, Restaurants & Leisure | 9,800 | 4,905 | |||||||||||
HAP Seng Consolidated Bhd. | Industrial Conglomerates | 2,400 | 4,124 | |||||||||||
Hartalega Holdings Bhd. | Health Care Equipment & Supplies | 4,400 | 17,153 | |||||||||||
Hong Leong Bank Bhd. | Banks | 1,800 | 6,515 | |||||||||||
Hong Leong Financial Group Bhd. | Banks | 800 | 2,749 | |||||||||||
IHH Healthcare Bhd. | Health Care Providers & Services | 9,600 | 12,013 | |||||||||||
IJM Corp. Bhd. | Construction & Engineering | 10,600 | 3,673 | |||||||||||
IOI Corp. Bhd. | Food Products | 9,600 | 10,303 | |||||||||||
IOI Properties Group Bhd. | Real Estate Management & Development | 6,600 | 1,437 | |||||||||||
Kuala Lumpur Kepong Bhd. | Food Products | 1,600 | 8,779 | |||||||||||
Malayan Banking Bhd. | Banks | 19,200 | 33,359 | |||||||||||
Malaysia Airports Holdings Bhd. | Transportation Infrastructure | 3,200 | 3,650 | |||||||||||
Maxis Bhd. | Wireless Telecommunication Services | 9,200 | 11,247 | |||||||||||
MISC Bhd. | Marine | 4,800 | 8,663 | |||||||||||
Nestle (Malaysia) Bhd. | Food Products | 200 | 6,805 | |||||||||||
Petronas Chemicals Group Bhd. | Chemicals | 8,800 | 11,880 | |||||||||||
Petronas Dagangan Bhd. | Oil, Gas & Consumable Fuels | 1,000 | 4,750 | |||||||||||
Petronas Gas Bhd. | Gas Utilities | 1,800 | 7,112 | |||||||||||
PPB Group Bhd. | Food Products | 2,000 | 9,145 | |||||||||||
Press Metal Aluminium Holdings Bhd. | Metals & Mining | 6,200 | 7,669 | |||||||||||
Public Bank Bhd. | Banks | 10,000 | 37,781 | |||||||||||
QL Resources Bhd. | Food Products | 2,200 | 5,199 | |||||||||||
RHB Bank Bhd. | Banks | 5,000 | 5,499 | |||||||||||
Sime Darby Bhd. | Industrial Conglomerates | 11,200 | 6,711 | |||||||||||
Sime Darby Plantation Bhd. | Food Products | 11,400 | 13,854 | |||||||||||
Sime Darby Property Bhd. | Real Estate Management & Development | 13,600 | 1,898 | |||||||||||
Telekom Malaysia Bhd. | Diversified Telecommunication Services | 3,800 | 3,777 | |||||||||||
Tenaga Nasional Bhd. | Electric Utilities | 12,400 | 31,332 | |||||||||||
Top Glove Corp. Bhd. | Health Care Equipment & Supplies | 16,200 | 32,357 | |||||||||||
Westports Holdings Bhd. | Transportation Infrastructure | 3,800 | 3,530 | |||||||||||
Wing Tai Holdings Ltd. | Real Estate Management & Development | 1,600 | 2,039 | |||||||||||
YTL Corp. Bhd. | Multi-Utilities | 15,400 | 2,501 | |||||||||||
|
| |||||||||||||
398,759 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 143 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Pakistan 0.0%† | ||||||||||||||
Fauji Fertilizer Co. Ltd. | Chemicals | 2,000 | $ | 1,303 | ||||||||||
Habib Bank Ltd. | Banks | 2,000 | 1,578 | |||||||||||
Oil & Gas Development Co. Ltd. | Oil, Gas & Consumable Fuels | 2,000 | 1,250 | |||||||||||
Pakistan Petroleum Ltd. | Oil, Gas & Consumable Fuels | 2,004 | 1,113 | |||||||||||
|
| |||||||||||||
5,244 | ||||||||||||||
|
| |||||||||||||
Philippines 0.9% | ||||||||||||||
Aboitiz Power Corp. | Independent Power and Renewable Electricity Producers | 5,200 | 2,741 | |||||||||||
a | Alliance Global Group Inc. | Industrial Conglomerates | 15,000 | 2,166 | ||||||||||
Ayala Corp. | Industrial Conglomerates | 1,020 | 14,496 | |||||||||||
Ayala Land Inc. | Real Estate Management & Development | 24,800 | 15,193 | |||||||||||
Bank of the Philippine Islands | Banks | 5,700 | 7,525 | |||||||||||
BDO Unibank Inc. | Banks | 5,980 | 10,639 | |||||||||||
Bloomberry Resorts Corp. | Hotels, Restaurants & Leisure | 11,800 | 1,779 | |||||||||||
DMCI Holdings Inc. | Industrial Conglomerates | 14,000 | 1,155 | |||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 100 | 4,290 | |||||||||||
GT Capital Holdings Inc. | Industrial Conglomerates | 320 | 2,550 | |||||||||||
International Container Terminal Services Inc. | Transportation Infrastructure | 3,420 | 7,739 | |||||||||||
JG Summit Holdings Inc. | Industrial Conglomerates | 9,200 | 11,424 | |||||||||||
Jollibee Foods Corp. | Hotels, Restaurants & Leisure | 1,420 | 4,247 | |||||||||||
LT Group Inc. | Industrial Conglomerates | 9,000 | 1,671 | |||||||||||
Manila Electric Co. | Electric Utilities | 920 | 5,143 | |||||||||||
a | Megaworld Corp. | Real Estate Management & Development | 36,000 | 2,198 | ||||||||||
Metro Pacific Investments Corp. | Diversified Financial Services | 50,000 | 3,599 | |||||||||||
Metropolitan Bank & Trust Co. | Banks | 5,800 | 4,570 | |||||||||||
PLDT Inc. | Wireless Telecommunication Services | 290 | 8,010 | |||||||||||
Puregold Price Club Inc. | Food & Staples Retailing | 3,060 | 3,093 | |||||||||||
San Miguel Corp. | Industrial Conglomerates | 1,240 | 2,530 | |||||||||||
San Miguel Pure Foods Co. Inc. | Food Products | 2,200 | 2,882 | |||||||||||
Semirara Mining and Power Corp. | Oil, Gas & Consumable Fuels | 4,000 | 823 | |||||||||||
SM Investments Corp. | Industrial Conglomerates | 1,540 | 27,954 | |||||||||||
SM Prime Holdings Inc. | Real Estate Management & Development | 27,600 | 16,738 | |||||||||||
Universal Robina Corp. | Food Products | 2,800 | 7,739 | |||||||||||
|
| |||||||||||||
172,894 | ||||||||||||||
|
| |||||||||||||
Singapore 2.8% | ||||||||||||||
Ascendas REIT | Equity Real Estate Investment Trusts (REITs | ) | 9,400 | 22,310 | ||||||||||
Ascott Residence Trust | Equity Real Estate Investment Trusts (REITs | ) | 5,200 | 3,390 | ||||||||||
BOC Aviation Ltd. | Trading Companies & Distributors | 600 | 4,080 | |||||||||||
CapitaLand Commercial Trust | Equity Real Estate Investment Trusts (REITs | ) | 8,800 | 10,572 | ||||||||||
CapitaLand Ltd. | Real Estate Management & Development | 8,000 | 15,882 | |||||||||||
CapitaLand Mall Trust | Equity Real Estate Investment Trusts (REITs | ) | 7,600 | 10,745 | ||||||||||
City Developments Ltd. | Real Estate Management & Development | 1,600 | 8,920 | |||||||||||
ComfortDelGro Corp. Ltd. | Road & Rail | 6,600 | 6,817 | |||||||||||
DBS Group Holdings Ltd. | Banks | 5,800 | 84,593 | |||||||||||
Frasers Logistics & Commercial Trust | Equity Real Estate Investment Trusts (REITs | ) | 7,800 | 7,942 | ||||||||||
Frasers Property Ltd. | Real Estate Management & Development | 600 | 510 | |||||||||||
Genting Singapore Ltd. | Hotels, Restaurants & Leisure | 18,200 | 8,933 | |||||||||||
Hutchison Port Holdings Trust | Transportation Infrastructure | 18,800 | 3,083 | |||||||||||
Jardine Cycle & Carriage Ltd. | Distributors | 400 | 5,271 | |||||||||||
Keppel Corp. Ltd. | Industrial Conglomerates | 4,400 | 14,343 | |||||||||||
Keppel DC REIT | Equity Real Estate Investment Trusts (REITs | ) | 3,800 | 8,101 | ||||||||||
Keppel REIT | Equity Real Estate Investment Trusts (REITs | ) | 6,400 | 5,016 | ||||||||||
Mapletree Commercial Trust | Equity Real Estate Investment Trusts (REITs | ) | 7,000 | 9,948 | ||||||||||
c | Mapletree Greater China Commercial Trust, Reg S | Equity Real Estate Investment Trusts (REITs | ) | 7,800 | 5,342 | |||||||||
Mapletree Industrial Trust | Equity Real Estate Investment Trusts (REITs | ) | 5,200 | 12,228 |
144 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Singapore (continued) | ||||||||||||||
Mapletree Logistics Trust | Equity Real Estate Investment Trusts (REITs | ) | 8,200 | $ | 12,254 | |||||||||
c | NetLink NBN Trust, Reg S | Diversified Telecommunication Services | 9,200 | 6,571 | ||||||||||
Olam International Ltd. | Food & Staples Retailing | 1,800 | 1,661 | |||||||||||
Oversea-Chinese Banking Corp. Ltd. | Banks | 11,000 | 67,849 | |||||||||||
SATS Ltd. | Transportation Infrastructure | 2,200 | 4,561 | |||||||||||
SembCorp Industries Ltd. | Industrial Conglomerates | 3,200 | 3,141 | |||||||||||
a | SembCorp Marine Ltd. | Machinery | 18,715 | 2,002 | ||||||||||
SIA Engineering Co. Ltd. | Transportation Infrastructure | 800 | 979 | |||||||||||
Singapore Airlines Ltd. | Airlines | 4,000 | 10,168 | |||||||||||
Singapore Exchange Ltd. | Capital Markets | 2,600 | 17,427 | |||||||||||
Singapore Post Ltd. | Air Freight & Logistics | 5,200 | 2,457 | |||||||||||
Singapore Press Holdings Ltd. | Media | 5,400 | 4,114 | |||||||||||
Singapore Technologies Engineering Ltd. | Aerospace & Defense | 5,000 | 12,673 | |||||||||||
Singapore Telecommunications Ltd. | Diversified Telecommunication Services | 23,800 | 36,961 | |||||||||||
StarHub Ltd. | Wireless Telecommunication Services | 2,200 | 1,934 | |||||||||||
Suntec REIT | Equity Real Estate Investment Trusts (REITs | ) | 6,800 | 7,223 | ||||||||||
United Overseas Bank Ltd. | Banks | 4,000 | 55,762 | |||||||||||
UOL Group Ltd. | Real Estate Management & Development | 1,600 | 7,794 | |||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 800 | 11,275 | |||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | Machinery | 7,200 | 5,222 | |||||||||||
Yanlord Land Group Ltd. | Real Estate Management & Development | 2,200 | 1,821 | |||||||||||
|
| |||||||||||||
521,875 | ||||||||||||||
|
| |||||||||||||
South Korea 12.1% | ||||||||||||||
a | Alteogen Inc. | Biotechnology | 58 | 8,942 | ||||||||||
Amorepacific Corp. | Personal Products | 100 | 14,023 | |||||||||||
AmorePacific Group | Personal Products | 96 | 4,014 | |||||||||||
BGF Retail Co. Ltd. | Food & Staples Retailing | 20 | 2,112 | |||||||||||
BNK Financial Group Inc. | Banks | 934 | 4,041 | |||||||||||
a | Celltrion Healthcare Co. Ltd. | Health Care Providers & Services | 224 | 16,798 | ||||||||||
a | Celltrion Inc. | Biotechnology | 330 | 72,659 | ||||||||||
a | Celltrion Pharm Inc. | Pharmaceuticals | 58 | 5,624 | ||||||||||
Cheil Worldwide Inc. | Media | 246 | 4,407 | |||||||||||
CJ CheilJedang Corp. | Food Products | 22 | 7,431 | |||||||||||
CJ Corp. | Industrial Conglomerates | 40 | 2,777 | |||||||||||
CJ ENM Co. Ltd. | Internet & Direct Marketing Retail | 34 | 4,137 | |||||||||||
a | CJ Logistics Corp. | Road & Rail | 24 | 3,643 | ||||||||||
Coway Co. Ltd. | Household Durables | 170 | 11,527 | |||||||||||
Daelim Industrial Co. Ltd. | Construction & Engineering | 92 | 6,089 | |||||||||||
a | Daewoo Engineering & Construction Co. Ltd. | Construction & Engineering | 558 | 1,329 | ||||||||||
a | Daewoo Shipbuilding & Marine Engineering Co. Ltd. | Machinery | 166 | 3,378 | ||||||||||
DB Insurance Co. Ltd. | Insurance | 140 | 5,411 | |||||||||||
DGB Financial Group Inc. | Banks | 530 | 2,488 | |||||||||||
Dongsuh Cos. Inc. | Food & Staples Retailing | 118 | 2,992 | |||||||||||
Doosan Bobcat Inc. | Machinery | 86 | 1,978 | |||||||||||
a | Doosan Heavy Industries and Construction Co. Ltd. | Electrical Equipment | 416 | 4,731 | ||||||||||
a | Doosan Infracore Co. Ltd. | Machinery | 342 | 2,565 | ||||||||||
a | Doosan Solus Co. Ltd. | Electronic Equipment, Instruments & Components | 36 | 1,216 | ||||||||||
E-MART Inc. | Food & Staples Retailing | 62 | 7,501 | |||||||||||
Fila Holdings Corp. | Textiles, Apparel & Luxury Goods | 180 | 5,641 | |||||||||||
GS Engineering & Construction Corp. | Construction & Engineering | 202 | 4,171 | |||||||||||
GS Holdings Corp. | Oil, Gas & Consumable Fuels | 154 | 4,082 | |||||||||||
GS Retail Co. Ltd. | Food & Staples Retailing | 88 | 2,521 | |||||||||||
Hana Financial Group Inc. | Banks | 936 | 22,490 | |||||||||||
Hanjin Kal Corp. | Airlines | 94 | 5,514 | |||||||||||
Hankook Tire & Technology Co. Ltd. | Auto Components | 254 | 6,841 |
franklintempleton.com | Semiannual Report | 145 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
South Korea (continued) | ||||||||||||||
Hanmi Pharm Co. Ltd. | Pharmaceuticals | 24 | $ | 5,613 | ||||||||||
Hanmi Science Co. Ltd. | Pharmaceuticals | 44 | 2,212 | |||||||||||
Hanon Systems | Auto Components | 548 | 5,787 | |||||||||||
Hanssem Co. Ltd. | Household Durables | 30 | 2,745 | |||||||||||
a | Hanwha Aerospace Co. Ltd. | Aerospace & Defense | 118 | 2,563 | ||||||||||
Hanwha Corp. | Industrial Conglomerates | 120 | 2,581 | |||||||||||
Hanwha Corp. | Industrial Conglomerates | 80 | 882 | |||||||||||
Hanwha Life Insurance Co. Ltd. | Insurance | 940 | 1,226 | |||||||||||
Hanwha Solutions Corp. | Chemicals | 266 | 8,745 | |||||||||||
HDC Hyundai Development Co-Engineering & Construction | Construction & Engineering | 146 | 2,653 | |||||||||||
a | Helixmith Co. Ltd. | Biotechnology | 78 | 2,364 | ||||||||||
Hite Jinro Co. Ltd. | Beverages | 80 | 2,480 | |||||||||||
a | HLB Inc. | Leisure Products | 138 | 12,236 | ||||||||||
Hotel Shilla Co. Ltd. | Specialty Retail | 96 | 6,247 | |||||||||||
Hyundai Department Store Co. Ltd. | Multiline Retail | 40 | 1,926 | |||||||||||
Hyundai Engineering & Construction Co. Ltd. | Construction & Engineering | 230 | 5,988 | |||||||||||
Hyundai Glovis Co. Ltd. | Air Freight & Logistics | 62 | 7,634 | |||||||||||
Hyundai Heavy Industries Holdings Co. Ltd. | Machinery | 32 | 5,965 | |||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | Insurance | 206 | 3,937 | |||||||||||
Hyundai Mipo Dockyard Co. Ltd. | Machinery | 76 | 1,930 | |||||||||||
Hyundai Mobis Co. Ltd. | Auto Components | 206 | 40,513 | |||||||||||
Hyundai Motor Co. | Automobiles | 442 | 67,462 | |||||||||||
Hyundai Steel Co. | Metals & Mining | 250 | 5,259 | |||||||||||
Hyundai Wia Corp. | Auto Components | 54 | 1,870 | |||||||||||
Industrial Bank of Korea | Banks | 834 | 5,712 | |||||||||||
Kakao Corp. | Interactive Media & Services | 172 | 53,607 | |||||||||||
Kangwon Land Inc. | Hotels, Restaurants & Leisure | 334 | 6,140 | |||||||||||
KB Financial Group Inc. | Banks | 1,230 | 39,492 | |||||||||||
KCC Corp. | Chemicals | 16 | 1,997 | |||||||||||
KEPCO Plant Service and Engineering Co. Ltd. | Commercial Services & Supplies | 82 | 1,897 | |||||||||||
Kia Motors Corp. | Automobiles | 804 | 32,242 | |||||||||||
Korea Aerospace Industries Ltd. | Aerospace & Defense | 220 | 4,289 | |||||||||||
a | Korea Electric Power Corp. | Electric Utilities | 800 | 13,955 | ||||||||||
Korea Gas Corp. | Gas Utilities | 76 | 1,602 | |||||||||||
Korea Investment Holdings Co. Ltd. | Capital Markets | 120 | 7,439 | |||||||||||
a | Korea Shipbuilding & Offshore Engineering Co. Ltd. | Machinery | 136 | 9,617 | ||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 30 | 9,658 | |||||||||||
a | Korean Air Lines Co. Ltd. | Airlines | 278 | 4,481 | ||||||||||
KT&G Corp. | Tobacco | 356 | 25,083 | |||||||||||
Kumho Petrochemical Co. Ltd. | Chemicals | 60 | 5,643 | |||||||||||
LG Chem Ltd. | Chemicals | 144 | 80,527 | |||||||||||
LG Corp. | Industrial Conglomerates | 286 | 18,121 | |||||||||||
a | LG Display Co. Ltd. | Electronic Equipment, Instruments & Components | 710 | 9,319 | ||||||||||
LG Electronics Inc. | Household Durables | 334 | 26,189 | |||||||||||
LG Household & Health Care Ltd. | Personal Products | 28 | 34,668 | |||||||||||
LG Innotek Co. Ltd. | Electronic Equipment, Instruments & Components | 44 | 5,832 | |||||||||||
LG Uplus Corp. | Diversified Telecommunication Services | 606 | 5,959 | |||||||||||
Lotte Chemical Corp. | Chemicals | 46 | 7,729 | |||||||||||
Lotte Chilsung Beverage Co. Ltd. | Beverages | 12 | 923 | |||||||||||
Lotte Corp. | Industrial Conglomerates | 76 | 1,859 | |||||||||||
LOTTE Fine Chemical Co. Ltd. | Chemicals | 54 | 2,292 | |||||||||||
Lotte Shopping Co. Ltd. | Multiline Retail | 30 | 2,014 | |||||||||||
LS Corp. | Electrical Equipment | 44 | 1,975 | |||||||||||
Mando Corp. | Auto Components | 114 | 3,475 | |||||||||||
a | Medytox Inc. | Biotechnology | 14 | 2,526 |
146 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
South Korea (continued) | ||||||||||||||
a | Medytox Inc., rts., 10/15/20 | Biotechnology | 2 | $ | 50 | |||||||||
Mirae Asset Daewoo Co. Ltd. | Capital Markets | 1,232 | 8,933 | |||||||||||
Mirae Asset Daewoo Co. Ltd. | Capital Markets | 202 | 758 | |||||||||||
Naver Corp. | Interactive Media & Services | 420 | 106,481 | |||||||||||
NCSoft Corp. | Entertainment | 52 | 35,838 | |||||||||||
a | Netmarble Corp | Entertainment | 54 | 7,665 | ||||||||||
NH Investment & Securities Co. Ltd. | Capital Markets | 388 | 3,032 | |||||||||||
a | NHN Corp. | Entertainment | 30 | 1,908 | ||||||||||
Nongshim Co. Ltd. | Food Products | 10 | 2,685 | |||||||||||
a | OCI Co. Ltd. | Chemicals | 66 | 3,217 | ||||||||||
Orion Corp. | Food Products | 68 | 7,617 | |||||||||||
Ottogi Corp. | Food Products | 4 | 1,943 | |||||||||||
Paradise Co. Ltd. | Hotels, Restaurants & Leisure | 174 | 2,046 | |||||||||||
POSCO | Metals & Mining | 216 | 36,200 | |||||||||||
POSCO Chemical Co. Ltd. | Construction Materials | 68 | 4,872 | |||||||||||
Posco International Corp. | Trading Companies & Distributors | 168 | 1,925 | |||||||||||
S-1 Corp. | Commercial Services & Supplies | 64 | 4,788 | |||||||||||
S-Oil Corp. | Oil, Gas & Consumable Fuels | 140 | 6,177 | |||||||||||
a | Samsung Biologics Co. Ltd. | Life Sciences Tools & Services | 42 | 24,780 | ||||||||||
Samsung C&T Corp. | Industrial Conglomerates | 268 | 24,062 | |||||||||||
Samsung Card Co. Ltd. | Consumer Finance | 106 | 2,556 | |||||||||||
Samsung Electro-Mechanics Co. Ltd. | Electronic Equipment, Instruments & Components | 174 | 20,681 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 14,972 | 745,079 | |||||||||||
a | Samsung Engineering Co. Ltd. | Construction & Engineering | 546 | 4,925 | ||||||||||
Samsung Fire & Marine Insurance Co. Ltd. | Insurance | 102 | 15,873 | |||||||||||
a | Samsung Heavy Industries Co. Ltd. | Machinery | 1,286 | 5,861 | ||||||||||
Samsung Life Insurance Co. Ltd. | Insurance | 202 | 10,536 | |||||||||||
Samsung SDI Co. Ltd. | Electronic Equipment, Instruments & Components | 168 | 62,273 | |||||||||||
Samsung SDS Co. Ltd. | IT Services | 100 | 14,493 | |||||||||||
Samsung Securities Co. Ltd. | Capital Markets | 200 | 5,233 | |||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 1,462 | 34,503 | |||||||||||
Shinsegae Co. Ltd. | Multiline Retail | 24 | 4,361 | |||||||||||
a | SillaJen Inc. | Biotechnology | 196 | 2,028 | ||||||||||
SK Holdings Co. Ltd. | Industrial Conglomerates | 98 | 16,634 | |||||||||||
SK Hynix Inc. | Semiconductors & Semiconductor Equipment | 1,648 | 118,368 | |||||||||||
SK Innovation Co. Ltd. | Oil, Gas & Consumable Fuels | 172 | 20,443 | |||||||||||
SK Networks Co. Ltd. | Trading Companies & Distributors | 538 | 2,187 | |||||||||||
SK Telecom Co. Ltd. | Wireless Telecommunication Services | 74 | 15,059 | |||||||||||
SKC Co. Ltd. | Chemicals | 60 | 4,258 | |||||||||||
Ssangyong Cement Industrial Co. Ltd. | Construction Materials | 372 | 1,867 | |||||||||||
Woori Financial Group Inc. | Banks | 1,720 | 12,619 | |||||||||||
Yuhan Corp. | Pharmaceuticals | 146 | 8,015 | |||||||||||
|
| |||||||||||||
2,292,982 | ||||||||||||||
|
| |||||||||||||
Taiwan 14.0% | ||||||||||||||
Accton Technology Corp. | Communications Equipment | 2,000 | 15,365 | |||||||||||
a | Acer Inc. | Technology Hardware, Storage & Peripherals | 8,000 | 6,850 | ||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 1,300 | 13,062 | |||||||||||
ASE Industrial Holding Co. Ltd. | Semiconductors & Semiconductor Equipment | 10,000 | 20,441 | |||||||||||
Asia Cement Corp. | Construction Materials | 8,000 | 11,463 | |||||||||||
ASMedia Technology Inc. | Semiconductors & Semiconductor Equipment | 100 | 5,024 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 2,000 | 17,506 | |||||||||||
a | AU Optronics Corp. | Electronic Equipment, Instruments & Components | 28,000 | 10,828 | ||||||||||
Capital Securities Corp. | Capital Markets | 6,000 | 2,227 | |||||||||||
Catcher Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,480 | 15,542 | |||||||||||
Cathay Financial Holding Co. Ltd. | Insurance | 26,000 | 34,652 | |||||||||||
Chailease Holding Co. Ltd. | Diversified Financial Services | 4,000 | 18,093 | |||||||||||
Chang Hwa Commercial Bank Ltd. | Banks | 22,000 | 13,179 |
franklintempleton.com | Semiannual Report | 147 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Taiwan (continued) | ||||||||||||||
Cheng Shin Rubber Industry Co. Ltd. | Auto Components | 6,000 | $ | 7,644 | ||||||||||
Chicony Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,000 | 5,808 | |||||||||||
a | China Airlines Ltd. | Airlines | 8,000 | 2,287 | ||||||||||
China Development Financial Holding Corp. | Insurance | 44,000 | 12,929 | |||||||||||
China Life Insurance Co. Ltd. | Insurance | 10,000 | 6,854 | |||||||||||
a,e | China Motor Corp. | Automobiles | 800 | 1,160 | ||||||||||
China Steel Corp. | Metals & Mining | 40,000 | 28,244 | |||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 12,000 | 44,334 | |||||||||||
Compal Electronics Inc. | Technology Hardware, Storage & Peripherals | 12,000 | 7,893 | |||||||||||
CTBC Financial Holding Co. Ltd. | Banks | 58,000 | 36,848 | |||||||||||
Delta Electronics Inc. | Electronic Equipment, Instruments & Components | 7,000 | 45,681 | |||||||||||
E.Sun Financial Holding Co. Ltd. | Banks | 38,000 | 33,589 | |||||||||||
Eclat Textile Co. Ltd. | Textiles, Apparel & Luxury Goods | 640 | 7,933 | |||||||||||
a | Epistar Corp. | Semiconductors & Semiconductor Equipment | 4,000 | 4,882 | ||||||||||
Eternal Materials Co. Ltd. | Chemicals | 2,000 | 2,262 | |||||||||||
EVA Airways Corp. | Airlines | 8,000 | 2,942 | |||||||||||
a | Evergreen Marine Corp. Taiwan Ltd. | Marine | 8,000 | 4,378 | ||||||||||
Far Eastern International Bank | Banks | 10,000 | 3,539 | |||||||||||
Far Eastern New Century Corp. | Industrial Conglomerates | 12,000 | 10,483 | |||||||||||
Far EasTone Telecommunications Co. Ltd. | Wireless Telecommunication Services | 5,000 | 10,531 | |||||||||||
Feng Tay Enterprise Co. Ltd. | Textiles, Apparel & Luxury Goods | 1,320 | 7,908 | |||||||||||
First Financial Holding Co. Ltd. | Banks | 33,020 | 23,429 | |||||||||||
a | FIT Hon Teng Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 777 | ||||||||||
Formosa Chemicals & Fibre Corp. | Chemicals | 11,000 | 25,713 | |||||||||||
Formosa Petrochemical Corp. | Oil, Gas & Consumable Fuels | 4,000 | 11,049 | |||||||||||
Formosa Plastics Corp. | Chemicals | 16,000 | 43,422 | |||||||||||
Formosa Taffeta Co. Ltd. | Textiles, Apparel & Luxury Goods | 4,000 | 4,316 | |||||||||||
Foxconn Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 4,000 | 7,113 | |||||||||||
Fubon Financial Holding Co. Ltd. | Insurance | 24,000 | 34,721 | |||||||||||
Genius Electronic Optical Co. Ltd. | Electronic Equipment, Instruments & Components | 260 | 5,261 | |||||||||||
Giant Manufacturing Co. Ltd. | Leisure Products | 1,000 | 9,409 | |||||||||||
Globalwafers Co. Ltd. | Semiconductors & Semiconductor Equipment | 700 | 9,281 | |||||||||||
Hiwin Technologies Corp. | Machinery | 800 | 7,872 | |||||||||||
Hon Hai Precision Industry Co. Ltd. | Electronic Equipment, Instruments & Components | 38,000 | 101,554 | |||||||||||
Hotai Motor Co. Ltd. | Specialty Retail | 1,000 | 22,202 | |||||||||||
HTC Corp. | Technology Hardware, Storage & Peripherals | 2,000 | 1,975 | |||||||||||
Hua Nan Financial Holdings Co. Ltd. | Banks | 30,000 | 18,283 | |||||||||||
a | Innolux Corp. | Electronic Equipment, Instruments & Components | 24,000 | 7,765 | ||||||||||
Inventec Corp. | Technology Hardware, Storage & Peripherals | 10,000 | 7,752 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 320 | 37,125 | |||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 6,000 | 9,550 | |||||||||||
MediaTek Inc. | Semiconductors & Semiconductor Equipment | 4,800 | 100,601 | |||||||||||
Mega Financial Holding Co. Ltd. | Banks | 34,000 | 32,636 | |||||||||||
Micro-Star International Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,000 | 9,184 | |||||||||||
momo.com Inc. | Internet & Direct Marketing Retail | 140 | 3,398 | |||||||||||
Nan Ya Plastics Corp. | Chemicals | 18,000 | 36,979 | |||||||||||
Nanya Technology Corp. | Semiconductors & Semiconductor Equipment | 2,000 | 3,971 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 440 | 5,219 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 2,000 | 18,334 | |||||||||||
a | Oneness Biotech Co. Ltd. | Pharmaceuticals | 800 | 9,447 | ||||||||||
Parade Technologies Ltd. | Semiconductors & Semiconductor Equipment | 218 | 7,903 | |||||||||||
Pegatron Corp. | Technology Hardware, Storage & Peripherals | 6,000 | 13,217 | |||||||||||
Pou Chen Corp. | Textiles, Apparel & Luxury Goods | 8,000 | 7,223 | |||||||||||
Powertech Technology Inc. | Semiconductors & Semiconductor Equipment | 2,000 | 5,960 | |||||||||||
President Chain Store Corp. | Food & Staples Retailing | 2,000 | 18,162 | |||||||||||
Quanta Computer Inc. | Technology Hardware, Storage & Peripherals | 8,000 | 20,883 | |||||||||||
Realtek Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 1,600 | 20,358 |
148 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Taiwan (continued) | ||||||||||||||
Shin Kong Financial Holding Co. Ltd. | Insurance | 38,000 | $ | 10,549 | ||||||||||
SinoPac Financial Holdings Co. Ltd. | Banks | 34,000 | 12,737 | |||||||||||
Synnex Technology International Corp. | Electronic Equipment, Instruments & Components | 4,000 | 5,704 | |||||||||||
Taishin Financial Holding Co. Ltd. | Banks | 34,000 | 15,027 | |||||||||||
Taiwan Business Bank | Banks | 18,000 | 5,929 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 16,000 | 22,871 | |||||||||||
Taiwan Cooperative Financial Holding Co. Ltd. | Banks | 30,000 | 20,199 | |||||||||||
Taiwan Fertilizer Co. Ltd. | Chemicals | 2,000 | 3,501 | |||||||||||
a | Taiwan Glass Industry Corp. | Building Products | 4,000 | 1,678 | ||||||||||
Taiwan High Speed Rail Corp. | Transportation Infrastructure | 6,000 | 6,557 | |||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 5,000 | 16,677 | |||||||||||
Taiwan Secom Co. Ltd. | Commercial Services & Supplies | 1,000 | 2,907 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 76,500 | 1,143,723 | |||||||||||
Teco Electric & Machinery Co. Ltd. | Electrical Equipment | 6,000 | 6,184 | |||||||||||
The Shanghai Commercial & Savings Bank Ltd. | Banks | 10,000 | 13,414 | |||||||||||
a | TPK Holding Co. Ltd. | Electronic Equipment, Instruments & Components | 1,000 | 1,695 | ||||||||||
Transcend Information Inc. | Technology Hardware, Storage & Peripherals | 1,000 | 2,168 | |||||||||||
U-Ming Marine Transport Corp. | Marine | 2,000 | 2,068 | |||||||||||
Uni-President Enterprises Corp. | Food Products | 16,000 | 34,528 | |||||||||||
Unimicron Technology Corp. | Electronic Equipment, Instruments & Components | 4,000 | 10,276 | |||||||||||
United Microelectronics Corp. | Semiconductors & Semiconductor Equipment | 36,000 | 35,488 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 3,000 | 9,954 | |||||||||||
Walsin Lihwa Corp. | Electrical Equipment | 10,000 | 5,542 | |||||||||||
Walsin Technology Corp. | Electronic Equipment, Instruments & Components | 2,000 | 10,669 | |||||||||||
Wan Hai Lines Ltd. | Marine | 2,000 | 1,467 | |||||||||||
Win Semiconductors Corp. | Semiconductors & Semiconductor Equipment | 1,280 | 12,662 | |||||||||||
Wistron Corp. | Technology Hardware, Storage & Peripherals | 8,000 | 8,231 | |||||||||||
Wiwynn Corp. | Technology Hardware, Storage & Peripherals | 260 | 5,862 | |||||||||||
Yageo Corp. | Electronic Equipment, Instruments & Components | 1,400 | 16,991 | |||||||||||
Yuanta Financial Holding Co. Ltd. | Diversified Financial Services | 38,000 | 23,355 | |||||||||||
a | Yulon Motor Co. Ltd. | Automobiles | 2,000 | 1,585 | ||||||||||
Zhen Ding Technology Holding Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 8,701 | |||||||||||
|
| |||||||||||||
2,653,304 | ||||||||||||||
|
| |||||||||||||
Thailand 2.2% | ||||||||||||||
Advanced Info Service PCL | Wireless Telecommunication Services | 3,600 | 19,427 | |||||||||||
Airports of Thailand Public Co. Ltd., NVDR | Transportation Infrastructure | 13,600 | 24,249 | |||||||||||
Asset World Corp. PCL | Hotels, Restaurants & Leisure | 24,000 | 2,651 | |||||||||||
B Grimm Power PCL, NVDR | Independent Power and Renewable Electricity Producers | 2,000 | 2,667 | |||||||||||
Bangkok Bank PCL, fgn. | Banks | 1,600 | 4,847 | |||||||||||
Bangkok Bank PCL, NVDR | Banks | 2,000 | 6,059 | |||||||||||
Bangkok Dusit Medical Services PCL | Health Care Providers & Services | 28,600 | 17,510 | |||||||||||
Bangkok Expressway and Metro PCL, NVDR | Transportation Infrastructure | 25,800 | 6,961 | |||||||||||
a | Bangkok Life Assurance PCL, NVDR | Insurance | 1,400 | 778 | ||||||||||
Banpu PCL, NVDR | Oil, Gas & Consumable Fuels | 15,200 | 2,782 | |||||||||||
Berli Jucker PCL, NVDR | Food & Staples Retailing | 3,400 | 3,943 | |||||||||||
BTS Group Holdings PCL, NVDR | Road & Rail | 27,600 | 8,275 | |||||||||||
Bumrungrad Hospital PCL | Health Care Providers & Services | 1,200 | 3,607 | |||||||||||
Carabao Group PCL | Beverages | 800 | 2,954 | |||||||||||
Central Pattana PCL | Real Estate Management & Development | 8,000 | 10,730 | |||||||||||
a | Central Retail Corp. PCL | Multiline Retail | 8,400 | 6,892 | ||||||||||
Charoen Pokphand Foods PCL, NVDR | Food Products | 11,400 | 10,073 |
franklintempleton.com | Semiannual Report | 149 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Thailand (continued) | ||||||||||||||
a | CP ALL PCL | Food & Staples Retailing | 16,600 | $ | 31,563 | |||||||||
Delta Electronics Thailand PCL | Electronic Equipment, Instruments & Components | 1,400 | 6,914 | |||||||||||
Digital Telecommunications Infrastructure Fund, fgn. | Diversified Financial Services | 17,000 | 7,350 | |||||||||||
Electricity Generating PCL | Independent Power and Renewable Electricity Producers | 800 | 4,721 | |||||||||||
Energy Absolute PCL, NVDR | Independent Power and Renewable Electricity Producers | 5,600 | 6,936 | |||||||||||
Global Power Synergy PCL | Independent Power and Renewable Electricity Producers | 2,000 | 3,629 | |||||||||||
Gulf Energy Development PCL, NVDR | Independent Power and Renewable Electricity Producers | 11,800 | 11,358 | |||||||||||
Home Product Center PCL, NVDR | Specialty Retail | 18,000 | 8,180 | |||||||||||
Indorama Ventures PCL, NVDR | Chemicals | 6,400 | 4,262 | |||||||||||
Intouch Holdings PCL | Wireless Telecommunication Services | 6,800 | 10,998 | |||||||||||
IRPC PCL | Oil, Gas & Consumable Fuels | 36,400 | 2,206 | |||||||||||
Kasikornbank PCL, fgn. | Banks | 3,800 | 9,204 | |||||||||||
Kasikornbank PCL, NVDR | Banks | 2,000 | 4,860 | |||||||||||
Krung Thai Bank PCL | Banks | 18,000 | 5,027 | |||||||||||
Krungthai Card PCL, NVDR | Consumer Finance | 4,600 | 5,045 | |||||||||||
Land and Houses PCL, NVDR | Real Estate Management & Development | 22,000 | 4,721 | |||||||||||
a | Minor International PCL | Hotels, Restaurants & Leisure | 12,800 | 8,079 | ||||||||||
a | Muangthai Capital PCL | Consumer Finance | 2,400 | 3,730 | ||||||||||
Osotspa PCL, NVDR | Beverages | 3,200 | 3,535 | |||||||||||
PTT Exploration and Production PCL, NVDR | Oil, Gas & Consumable Fuels | 4,200 | 10,471 | |||||||||||
PTT Global Chemical PCL, NVDR | Chemicals | 6,800 | 8,423 | |||||||||||
PTT PCL | Oil, Gas & Consumable Fuels | 45,600 | 46,050 | |||||||||||
Ratch Group PCL, NVDR | Independent Power and Renewable Electricity Producers | 2,800 | 4,440 | |||||||||||
Siam City Cement PCL, NVDR | Construction Materials | 200 | 754 | |||||||||||
Siam Commercial Bank PCL | Banks | 7,600 | 15,590 | |||||||||||
Siam Makro Public Company Ltd. | Food & Staples Retailing | 400 | 543 | |||||||||||
Srisawad Corp. PCL | Consumer Finance | 1,800 | 2,769 | |||||||||||
Thai Oil PCL | Oil, Gas & Consumable Fuels | 3,600 | 3,635 | |||||||||||
Thai Union Group PCL | Food Products | 10,000 | 4,418 | |||||||||||
The Siam Cement PCL | Construction Materials | 2,600 | 26,420 | |||||||||||
TMB Bank PCL | Banks | 148,000 | 4,157 | |||||||||||
Total Access Communication PCL | Wireless Telecommunication Services | 2,400 | 2,443 | |||||||||||
True Corp. PCL, NVDR | Diversified Telecommunication Services | 36,600 | 3,581 | |||||||||||
|
| |||||||||||||
410,417 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests | 18,787,120 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 0.7% | ||||||||||||||
South Korea 0.7% | ||||||||||||||
f | Amorepacific Corp., 1.736%, pfd. | Personal Products | 30 | 1,485 | ||||||||||
f | CJ CheilJedang Corp., 2.261%, pfd. | Food Products | 4 | 537 | ||||||||||
f | Hyundai Motor Co., 3.614%, pfd. | Automobiles | 76 | 5,485 | ||||||||||
f | Hyundai Motor Co., 3.515%, pfd., 2 | Automobiles | 110 | 8,296 | ||||||||||
f | LG Chem Ltd., 0.640%, pfd. | Chemicals | 24 | 6,577 | ||||||||||
f | LG Electronics Inc., 2.356%, pfd. | Household Durables | 66 | 1,916 | ||||||||||
f | LG Household & Health Care Ltd., 1.561%, pfd. | Personal Products | 6 | 3,632 | ||||||||||
f | Samsung Electronics Co. Ltd., 2.105%, pfd. | Technology Hardware, Storage & Peripherals | 2,628 | 113,479 | ||||||||||
f | Samsung Fire & Marine Insurance Co. Ltd., 6.141%, pfd. | Insurance | 8 | 948 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks | 142,355 | |||||||||||||
|
|
150 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Warrants (Cost $—) 0.0%† | ||||||||||||||
Thailand 0.0%† | ||||||||||||||
a | Minor International PCL, wts., 7/31/23 | Hotels, Restaurants & Leisure | 582 | $ | 137 | |||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 18,929,612 | |||||||||||||
|
| |||||||||||||
Short Term Investments 0.1% | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.1% | ||||||||||||||
United States 0.1% | ||||||||||||||
g,h | Institutional Fiduciary Trust Portfolio, 0.00% | Money Market Funds | 11,650 | 11,650 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $18,342,378) 99.9% | 18,941,262 | |||||||||||||
Other Assets, less Liabilities 0.1% | 9,485 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 18,950,747 | ||||||||||||
|
|
See Abbreviations on page 331.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $148,619, representing 0.8% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $591,309, representing 3.1% of net assets.
dA portion or all of the security is on loan at September 30, 2020. See Note 1(d).
eFair valued using significant unobservable inputs. See Note 8 regarding fair value measurements.
fVariable rate security. The rate shown represents the yield at period end.
gSee Note 3(c) regarding investments in affiliated management investment companies.
hThe rate shown is the annualized seven-day effective yield at period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 151 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Australia ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 17.38 | $ | 24.63 | $ | 24.67 | $ | 25.23 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.31 | 1.07 | 1.29 | 0.52 | ||||||||||||
Net realized and unrealized gains (losses) | 5.82 | (7.18 | ) | (0.37 | ) | (1.03 | ) | |||||||||
|
| |||||||||||||||
Total from investment operations | 6.13 | (6.11 | ) | 0.92 | (0.51 | ) | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.32 | ) | (1.14 | ) | (0.96 | ) | (0.05 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 23.19 | $ | 17.38 | $ | 24.63 | $ | 24.67 | ||||||||
|
| |||||||||||||||
Total returnd | 35.32% | (26.23)% | 4.00% | (2.05)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 2.82% | 4.28% | 5.30% | 4.96% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $13,914 | $7,820 | $7,389 | $2,467 | ||||||||||||
Portfolio turnover ratef | 5.09% | g | 8.16% | g | 4.56% | 1.63% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 5.09% | 8.16% | —% | —% |
152 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN FTSE AUSTRALIA ETF
Statement of Investments, September 30, 2020 (unaudited)
Industry | Shares | Value | ||||||||||||
Common Stocks 99.8% | ||||||||||||||
Australia 97.3% | ||||||||||||||
Adbri Ltd. | Construction Materials | 6,084 | $ | 12,428 | ||||||||||
a | Afterpay Ltd. | IT Services | 2,940 | 168,558 | ||||||||||
AGL Energy Ltd. | Multi-Utilities | 8,568 | 83,642 | |||||||||||
ALS Ltd. | Professional Services | 6,540 | 43,172 | |||||||||||
Altium Ltd. | Software | 1,476 | 38,001 | |||||||||||
Alumina Ltd. | Metals & Mining | 34,080 | 33,587 | |||||||||||
AMP Ltd. | Diversified Financial Services | 46,812 | 43,786 | |||||||||||
Ampol Ltd. | Oil, Gas & Consumable Fuels | 3,396 | 58,296 | |||||||||||
Ansell Ltd. | Health Care Equipment & Supplies | 1,752 | 46,588 | |||||||||||
Apa Group | Gas Utilities | 16,080 | 119,057 | |||||||||||
Appen Ltd. | IT Services | 1,476 | 36,054 | |||||||||||
Aristocrat Leisure Ltd. | Hotels, Restaurants & Leisure | 8,688 | 186,627 | |||||||||||
Atlas Arteria Ltd. | Transportation Infrastructure | 12,984 | 56,489 | |||||||||||
Aurizon Holdings Ltd. | Road & Rail | 25,056 | 76,325 | |||||||||||
AusNet Services | Electric Utilities | 24,708 | 33,294 | |||||||||||
Australia & New Zealand Banking Group Ltd. | Banks | 38,628 | 476,763 | |||||||||||
Australian Stock Exchange Ltd. | Capital Markets | 2,640 | 153,308 | |||||||||||
Bank of Queensland Ltd. | Banks | 6,120 | 25,135 | |||||||||||
Beach Energy Ltd. | Oil, Gas & Consumable Fuels | 23,736 | 22,457 | |||||||||||
Bendigo & Adelaide Bank Ltd. | Banks | 7,140 | 30,910 | |||||||||||
BHP Group Ltd. | Metals & Mining | 40,116 | 1,023,612 | |||||||||||
Bluescope Steel Ltd. | Metals & Mining | 6,840 | 62,263 | |||||||||||
Boral Ltd. | Construction Materials | 16,620 | 54,320 | |||||||||||
Brambles Ltd. | Commercial Services & Supplies | 20,496 | 154,103 | |||||||||||
carsales.com Ltd. | Interactive Media & Services | 2,916 | 43,201 | |||||||||||
Challenger Ltd. | Diversified Financial Services | 9,132 | 25,069 | |||||||||||
Charter Hall Group | Equity Real Estate Investment Trusts (REITs | ) | 6,324 | 56,342 | ||||||||||
a | Cimic Group Ltd. | Construction & Engineering | 1,320 | 17,550 | ||||||||||
Cleanaway Waste Management Ltd. | Commercial Services & Supplies | 18,432 | 27,611 | |||||||||||
Coca-Cola Amatil Ltd. | Beverages | 6,972 | 47,473 | |||||||||||
Cochlear Ltd. | Health Care Equipment & Supplies | 876 | 124,319 | |||||||||||
Coles Group Ltd. | Food & Staples Retailing | 17,268 | 210,406 | |||||||||||
Commonwealth Bank of Australia | Banks | 24,108 | 1,099,143 | |||||||||||
Computershare Ltd. | IT Services | 6,552 | 57,387 | |||||||||||
Crown Resorts Ltd. | Hotels, Restaurants & Leisure | 4,704 | 29,636 | |||||||||||
CSL Ltd. | Biotechnology | 6,168 | 1,268,802 | |||||||||||
CSR Ltd. | Construction Materials | 6,660 | 20,383 | |||||||||||
Dexus | Equity Real Estate Investment Trusts (REITs | ) | 14,868 | 94,737 | ||||||||||
Domain Holdings Australia Ltd. | Interactive Media & Services | 3,252 | 8,624 | |||||||||||
Domino’s Pizza Enterprises Ltd. | Hotels, Restaurants & Leisure | 840 | 47,696 | |||||||||||
Downer EDI Ltd. | Commercial Services & Supplies | 9,468 | 29,859 | |||||||||||
Evolution Mining Ltd. | Metals & Mining | 21,840 | 90,009 | |||||||||||
a | Flight Centre Travel Group Ltd. | Hotels, Restaurants & Leisure | 1,980 | 19,542 | ||||||||||
Fortescue Metals Group Ltd. | Metals & Mining | 21,648 | 252,914 | |||||||||||
Goodman Group | Equity Real Estate Investment Trusts (REITs | ) | 24,432 | 314,159 | ||||||||||
GPT Group | Equity Real Estate Investment Trusts (REITs | ) | 26,544 | 74,199 | ||||||||||
Harvey Norman Holdings Ltd. | Multiline Retail | 7,968 | 25,871 | |||||||||||
IDP Education Ltd. | Diversified Consumer Services | 1,908 | 25,997 | |||||||||||
Iluka Resources Ltd. | Metals & Mining | 5,808 | 37,549 | |||||||||||
Incitec Pivot Ltd. | Chemicals | 26,364 | 38,360 | |||||||||||
Insurance Australia Group Ltd. | Insurance | 31,464 | 98,777 | |||||||||||
IOOF Holdings Ltd. | Capital Markets | 8,604 | 18,994 | |||||||||||
James Hardie Industries PLC, CDI | Construction Materials | 6,024 | 143,089 | |||||||||||
JB Hi-Fi Ltd. | Specialty Retail | 1,536 | 51,810 | |||||||||||
Lendlease Corp. Ltd. | Real Estate Management & Development | 9,360 | 73,998 | |||||||||||
Macquarie Group Ltd. | Capital Markets | 4,452 | 381,544 | |||||||||||
Magellan Financial Group Ltd. | Capital Markets | 1,860 | 75,510 |
franklintempleton.com | Semiannual Report | 153 |
FRANKLIN FTSE AUSTRALIA ETF
STATEMENT OF INVESTMENTS
Franklin FTSE Australia ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Australia (continued) | ||||||||||||||
Medibank Pvt Ltd. | Insurance | 37,524 | $ | 67,507 | ||||||||||
Metcash Ltd. | Food & Staples Retailing | 13,728 | 27,157 | |||||||||||
Mineral Resources Ltd. | Metals & Mining | 1,896 | 33,852 | |||||||||||
Mirvac Group | Equity Real Estate Investment Trusts (REITs | ) | 53,568 | 83,701 | ||||||||||
National Australia Bank Ltd. | Banks | 44,796 | 569,909 | |||||||||||
Newcrest Mining Ltd. | Metals & Mining | 10,992 | 246,125 | |||||||||||
a | NEXTDC Ltd. | IT Services | 6,156 | 54,183 | ||||||||||
Northern Star Resources Ltd. | Metals & Mining | 9,744 | 95,262 | |||||||||||
a | Nufarm Ltd. | Chemicals | 4,248 | 11,722 | ||||||||||
Oil Search Ltd. | Oil, Gas & Consumable Fuels | 28,260 | 53,474 | |||||||||||
Orica Ltd. | Chemicals | 5,520 | 61,048 | |||||||||||
Origin Energy Ltd. | Oil, Gas & Consumable Fuels | 23,928 | 73,747 | |||||||||||
Orora Ltd. | Containers & Packaging | 13,478 | 23,185 | |||||||||||
OZ Minerals Ltd. | Metals & Mining | 4,320 | 43,380 | |||||||||||
Perpetual Ltd. | Capital Markets | 696 | 13,953 | |||||||||||
Platinum Asset Management Ltd. | Capital Markets | 4,236 | 9,321 | |||||||||||
a | Qantas Airways Ltd. | Airlines | 10,176 | 29,539 | ||||||||||
QBE Insurance Group Ltd. | Insurance | 19,824 | 122,338 | |||||||||||
Qube Logistics Holdings Ltd. | Transportation Infrastructure | 19,776 | 35,578 | |||||||||||
Ramsay Health Care Ltd. | Health Care Providers & Services | 2,376 | 112,534 | |||||||||||
REA Group Ltd. | Interactive Media & Services | 684 | 53,914 | |||||||||||
Rio Tinto Ltd. | Metals & Mining | 5,052 | 341,535 | |||||||||||
Santos Ltd. | Oil, Gas & Consumable Fuels | 24,096 | 84,282 | |||||||||||
a | Saracen Mineral Holdings Ltd. | Metals & Mining | 14,940 | 55,362 | ||||||||||
Scentre Group | Equity Real Estate Investment Trusts (REITs | ) | 70,644 | 111,395 | ||||||||||
Seek Ltd. | Interactive Media & Services | 4,740 | 72,331 | |||||||||||
Seven Group Holdings Ltd. | Trading Companies & Distributors | 1,824 | 23,428 | |||||||||||
Shopping Centres Australasia Property Group | Equity Real Estate Investment Trusts (REITs | ) | 14,628 | 22,437 | ||||||||||
Sonic Healthcare Ltd. | Health Care Providers & Services | 6,468 | 153,728 | |||||||||||
South32 Ltd. | Metals & Mining | 66,000 | 96,503 | |||||||||||
Stockland | Equity Real Estate Investment Trusts (REITs | ) | 32,460 | 87,944 | ||||||||||
Suncorp-Metway Ltd. | Insurance | 17,424 | 105,529 | |||||||||||
Sydney Airport | Transportation Infrastructure | 18,012 | 75,653 | |||||||||||
Tabcorp Holdings Ltd. | Hotels, Restaurants & Leisure | 28,284 | 67,710 | |||||||||||
Telstra Corp. Ltd. | Diversified Telecommunication Services | 56,700 | 112,978 | |||||||||||
The Star Entertainment Group Ltd. | Hotels, Restaurants & Leisure | 11,472 | 25,161 | |||||||||||
a | TPG Telecom Ltd. | Diversified Telecommunication Services | 5,064 | 26,496 | ||||||||||
Transurban Group | Transportation Infrastructure | 37,224 | 376,459 | |||||||||||
Treasury Wine Estates Ltd. | Beverages | 9,816 | 62,898 | |||||||||||
a | Tuas Ltd. | Diversified Telecommunication Services | 2,532 | 971 | ||||||||||
Vicinity Centres | Equity Real Estate Investment Trusts (REITs | ) | 51,060 | 50,321 | ||||||||||
a | Vocus Group Ltd. | Diversified Telecommunication Services | 7,992 | 20,393 | ||||||||||
Washington H. Soul Pattinson & Co. Ltd. | Oil, Gas & Consumable Fuels | 1,224 | 20,625 | |||||||||||
Wesfarmers Ltd. | Multiline Retail | 15,408 | 490,560 | |||||||||||
Westpac Banking Corp. | Banks | 49,176 | 593,558 | |||||||||||
Whitehaven Coal Ltd. | Oil, Gas & Consumable Fuels | 12,108 | 9,069 | |||||||||||
Wisetech Global Ltd. | Software | 1,152 | 21,295 | |||||||||||
Woodside Petroleum Ltd. | Oil, Gas & Consumable Fuels | 12,960 | 163,302 | |||||||||||
Woolworths Group Ltd. | Food & Staples Retailing | 17,196 | 449,008 | |||||||||||
Worley Ltd. | Energy Equipment & Services | 4,368 | 29,899 | |||||||||||
|
| |||||||||||||
13,541,594 | ||||||||||||||
|
| |||||||||||||
New Zealand 0.7% | ||||||||||||||
a | Xero Ltd. | Software | 1,272 | 91,855 | ||||||||||
|
|
154 | Semiannual Report | franklintempleton.com |
FRANKLIN FTSE AUSTRALIA ETF
STATEMENT OF INVESTMENTS
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United States 1.8% | ||||||||||||||
Amcor PLC, IDR | Containers & Packaging | 21,312 | $ | 234,171 | ||||||||||
Sims Ltd. | Metals & Mining | 2,304 | 12,518 | |||||||||||
|
| |||||||||||||
246,689 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $14,634,853) 99.8% | 13,880,138 | |||||||||||||
Other Assets, less Liabilities 0.2% | 34,252 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 13,914,390 | ||||||||||||
|
|
See Abrreviations on page 331.
aNon-income producing.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 155 |
Franklin FTSE Australia ETF (continued)
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Brazil ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 14.46 | $ | 25.72 | $ | 27.87 | $ | 24.37 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.17 | 1.07 | 0.80 | 0.50 | ||||||||||||
Net realized and unrealized gains (losses) | 2.63 | (11.33 | ) | (2.07 | ) | 3.11 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 2.80 | (10.26 | ) | (1.27 | ) | 3.61 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.26 | ) | (1.00 | ) | (0.88 | ) | (0.11 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 17.00 | $ | 14.46 | $ | 25.72 | $ | 27.87 | ||||||||
|
| |||||||||||||||
Total returnd | 19.16% | (41.69)% | (3.98)% | 14.86% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.19% | 0.23% | 0.19% | 0.19% | ||||||||||||
Net investment income | 1.98% | 4.26% | 3.37% | 4.53% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $88,400 | $102,700 | $20,579 | $44,593 | ||||||||||||
Portfolio turnover ratef | 5.01% | g | 36.07% | g | 39.76% | 4.79% |
aFor the period November 3, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 5.01% | 17.47% | —% | —% |
156 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Industry | Shares | Value | ||||||||||||
Common Stocks 73.5% | ||||||||||||||
Brazil 72.3% | ||||||||||||||
a | Aliansce Sonae Shopping Centers SA | Real Estate Management & Development | 36,400 | $ | 153,183 | |||||||||
Ambev SA | Beverages | 1,227,220 | 2,730,325 | |||||||||||
Atacadao Distribuicao Comercio e Industria Ltd. | Food & Staples Retailing | 109,200 | 396,971 | |||||||||||
a | Azul SA | Airlines | 78,000 | 337,383 | ||||||||||
a | B2W Cia Digital | Internet & Direct Marketing Retail | 58,679 | 936,749 | ||||||||||
B3 SA – Brasil Bolsa Balcao | Capital Markets | 577,200 | 5,633,293 | |||||||||||
Banco Bradesco SA | Banks | 353,600 | 1,130,476 | |||||||||||
Banco BTG Pactual SA | Capital Markets | 70,000 | 904,736 | |||||||||||
Banco do Brasil SA | Banks | 239,204 | 1,257,036 | |||||||||||
Banco Inter SA | Banks | 31,200 | 93,825 | |||||||||||
Banco Santander Brasil SA | Banks | 104,000 | 515,899 | |||||||||||
BB Seguridade Participacoes SA | Insurance | 187,200 | 806,065 | |||||||||||
a | BR Malls Paricipacoes SA | Real Estate Management & Development | 218,400 | 324,707 | ||||||||||
a | BRF SA | Food Products | 176,800 | 576,530 | ||||||||||
CCR SA | Transportation Infrastructure | 317,200 | 713,024 | |||||||||||
Centrais Eletricas Brasileiras SA | Electric Utilities | 114,400 | 615,389 | |||||||||||
Cia Brasileira de Distribuicao | Food & Staples Retailing | 46,877 | 580,011 | |||||||||||
Cia de Saneamento do Parana | Water Utilities | 68,800 | 310,527 | |||||||||||
Cia Siderurgica Nacional SA | Metals & Mining | 182,000 | 532,782 | |||||||||||
Cielo SA | IT Services | 317,200 | 221,167 | |||||||||||
Cogna Educacao | Diversified Consumer Services | 525,200 | 482,668 | |||||||||||
Companhia de Locacao das Americas | Road & Rail | 93,600 | 394,397 | |||||||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | Water Utilities | 96,100 | 797,928 | |||||||||||
Companhia Energetica de Minas Gerais | Electric Utilities | 54,138 | 102,773 | |||||||||||
Companhia Paranaense de Energia-Copel | Electric Utilities | 5,200 | 53,324 | |||||||||||
a | Cosan Logistica SA | Road & Rail | 36,400 | 114,306 | ||||||||||
Cosan SA | Oil, Gas & Consumable Fuels | 42,700 | 517,647 | |||||||||||
CPFL Energia SA | Electric Utilities | 52,000 | 254,259 | |||||||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | Household Durables | 78,000 | 321,607 | |||||||||||
Duratex SA | Paper & Forest Products | 83,200 | 264,666 | |||||||||||
EDP-Energias do Brasil SA | Electric Utilities | 83,200 | 256,990 | |||||||||||
a | Embraer SA | Aerospace & Defense | 208,000 | 230,273 | ||||||||||
Energisa SA | Electric Utilities | 41,680 | 304,071 | |||||||||||
a | Eneva SA | Independent Power and Renewable Electricity Producers | 46,800 | 399,379 | ||||||||||
Engie Brasil Energia SA | Independent Power and Renewable Electricity Producers | 46,800 | 335,030 | |||||||||||
Equatorial Energia SA | Electric Utilities | 254,800 | 957,458 | |||||||||||
EZ Tec Empreendimentos e Participacoes SA | Household Durables | 26,000 | 162,556 | |||||||||||
Fleury SA | Health Care Providers & Services | 67,600 | 317,584 | |||||||||||
Grendene SA | Textiles, Apparel & Luxury Goods | 78,000 | 106,141 | |||||||||||
Guararapes Confeccoes SA | Textiles, Apparel & Luxury Goods | 26,000 | 64,303 | |||||||||||
b,c | Hapvida Participacoes e Investimentos SA, 144A, Reg S | Health Care Providers & Services | 60,900 | 671,402 | ||||||||||
Hypera SA | Pharmaceuticals | 114,400 | 605,241 | |||||||||||
IRB Brasil Resseguros SA | Insurance | 320,033 | 425,276 | |||||||||||
Itau Unibanco Holding SA | Banks | 124,800 | 473,387 | |||||||||||
Klabin SA | Containers & Packaging | 83,200 | 351,313 | |||||||||||
Localiza Rent a Car SA | Road & Rail | 156,040 | 1,568,858 | |||||||||||
Lojas Americanas SA | Multiline Retail | 78,081 | 338,010 | |||||||||||
Lojas Renner SA | Multiline Retail | 224,230 | 1,577,362 | |||||||||||
M Dias Branco SA | Food Products | 26,000 | 157,574 | |||||||||||
Magazine Luiza SA | Multiline Retail | 187,240 | 2,963,179 |
franklintempleton.com | Semiannual Report | 157 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Franklin FTSE Brazil ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Brazil (continued) | ||||||||||||||
Multiplan Empreendimentos Imobiliarios SA | Real Estate Management & Development | 78,000 | $ | 268,882 | ||||||||||
Natura & Co Holding SA | Personal Products | 213,216 | 1,934,149 | |||||||||||
Neoenergia SA | Electric Utilities | 67,600 | 203,647 | |||||||||||
Notre Dame Intermedica Participacoes SA | Health Care Providers & Services | 130,000 | 1,500,554 | |||||||||||
Odontoprev SA | Health Care Providers & Services | 72,800 | 154,991 | |||||||||||
Petrobras Distribuidora SA | Specialty Retail | 202,800 | 724,999 | |||||||||||
Petroleo Brasileiro SA | Oil, Gas & Consumable Fuels | 1,045,240 | 3,666,207 | |||||||||||
Porto Seguro SA | Insurance | 26,000 | 222,569 | |||||||||||
Qualicorp Consultoria E Corretora de Seguros SA | Health Care Providers & Services | 67,600 | 407,654 | |||||||||||
Raia Drogasil SA | Food & Staples Retailing | 325,115 | 1,350,885 | |||||||||||
a | Rumo SA | Road & Rail | 353,660 | 1,195,923 | ||||||||||
Sao Martinho SA | Food Products | 46,800 | 180,841 | |||||||||||
Sul America SA | Insurance | 78,000 | 548,420 | |||||||||||
a | Suzano SA | Paper & Forest Products | 161,772 | 1,307,333 | ||||||||||
Telefonica Brasil SA | Diversified Telecommunication Services | 7,800 | 61,042 | |||||||||||
TIM Participacoes SA | Wireless Telecommunication Services | 228,800 | 530,144 | |||||||||||
Totvs SA | Software | 135,200 | 650,040 | |||||||||||
Transmissora Alianca de Energia Eletrica SA | Electric Utilities | 62,400 | 309,540 | |||||||||||
Ultrapar Participacoes SA | Oil, Gas & Consumable Fuels | 218,400 | 746,670 | |||||||||||
Vale SA | Metals & Mining | 930,800 | 9,761,390 | |||||||||||
a | Via Varejo SA | Specialty Retail | 327,600 | 1,008,411 | ||||||||||
WEG SA | Electrical Equipment | 209,300 | 2,439,658 | |||||||||||
YDUQS Participacoes SA | Diversified Consumer Services | 83,200 | 404,601 | |||||||||||
|
| |||||||||||||
63,917,590 | ||||||||||||||
|
| |||||||||||||
United States 1.2% | ||||||||||||||
JBS SA | Food Products | 280,800 | 1,029,751 | |||||||||||
|
| |||||||||||||
Total Common Stocks | 64,947,341 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 25.4% | ||||||||||||||
Brazil 25.4% | ||||||||||||||
d | Alpargatas SA, 0.144%, pfd. | Textiles, Apparel & Luxury Goods | 46,800 | 317,178 | ||||||||||
d | Banco Bradesco SA, 8.892%, pfd. | Banks | 1,201,238 | 4,136,652 | ||||||||||
d | Banco do Estado do Rio Grande do Sul SA, 5.767%, pfd., B | Banks | 57,200 | 121,068 | ||||||||||
a | Banco Inter SA, pfd. | Banks | 67,600 | 223,916 | ||||||||||
d | Bradespar SA, 1.780%, pfd. | Metals & Mining | 62,400 | 496,968 | ||||||||||
d | Braskem SA, 4.036%, pfd., A | Chemicals | 52,000 | 191,802 | ||||||||||
a | Centrais Eletricas Brasileiras SA, 5.733%, pfd., B | Electric Utilities | 78,000 | 431,623 | ||||||||||
d | Cia de Transmissao de Energia Eletrica Paulista, 6.095%, pfd. | Electric Utilities | 52,000 | 201,027 | ||||||||||
d | Cia Energetica de Sao Paulo, 6.549%, pfd., B | Independent Power and Renewable Electricity Producers | 52,000 | 260,625 | ||||||||||
d | Companhia Energetica de Minas Gerais, 5.762%, pfd. | Electric Utilities | 286,080 | 512,629 | ||||||||||
d | Companhia Paranaense de Energia, 3.978%, pfd., B | Electric Utilities | 30,100 | 331,148 | ||||||||||
d | Gerdau SA, 0.673%, pfd. | Metals & Mining | 301,600 | 1,112,984 | ||||||||||
d | Itau Unibanco Holding SA, 5.676%, pfd. | Banks | 1,357,200 | 5,417,772 | ||||||||||
d | Itausa SA, 3.443%, pfd. | Banks | 1,268,860 | 1,981,029 | ||||||||||
d | Lojas Americanas SA, 0.641%, pfd. | Multiline Retail | 223,669 | 1,126,589 |
158 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Industry | Shares | Value | ||||||||||||
Preferred Stocks (continued) | ||||||||||||||
Brazil (continued) | ||||||||||||||
d | Petroleo Brasileiro SA, 3.182%, pfd. | Oil, Gas & Consumable Fuels | 1,289,640 | $ | 4,486,838 | |||||||||
d | Telefonica Brasil SA, 7.759%, pfd. | Diversified Telecommunication Services | 117,000 | 901,301 | ||||||||||
d | Usinas Siderurgicas de Minas Gerais SA Usiminas, 0.429%, pfd., A | Metals & Mining | 114,400 | 203,574 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $43,802,382) | 22,454,723 | |||||||||||||
|
| |||||||||||||
Total Investments | 87,402,064 | |||||||||||||
Other Assets, less Liabilities 1.1% | 997,457 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 88,399,521 | ||||||||||||
|
|
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $671,402, representing 0.8% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $671,402, representing 0.8% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
Mini Bovespa Index | Long | 305 | $ | 1,023,593 | 10/14/20 | $ | (57,168 | ) |
*As of period end.
See Abbreviations on page 331.
See Note 8 regarding other derivative information.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 159 |
Franklin FTSE Brazil ETF (continued)
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Canada ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 19.50 | $ | 24.13 | $ | 23.77 | $ | 24.80 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.33 | 0.69 | 0.67 | 0.24 | ||||||||||||
Net realized and unrealized gains (losses) | 4.86 | (4.72 | ) | 0.33 | (1.25 | ) | ||||||||||
|
| |||||||||||||||
Total from investment operations | 5.19 | (4.03 | ) | 1.00 | (1.01 | ) | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.26 | ) | (0.60 | ) | (0.64 | ) | (0.02 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 24.43 | $ | 19.50 | $ | 24.13 | $ | 23.77 | ||||||||
|
| |||||||||||||||
Total returnd | 26.72% | (17.25)% | 4.48% | (4.06)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 2.87% | 2.73% | 2.79% | 2.39% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $6,108 | $4,876 | $4,827 | $2,377 | ||||||||||||
Portfolio turnover ratef | 2.30%g | 4.57%g | 6.95% | 1.26% |
a For the period November 2, 2017 (commencement of operations) to March 31, 2018.
b The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
c Based on average daily shares outstanding.
d Total return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
e Ratios are annualized for periods less than one year.
f Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 2.30% | 4.57% | —% | —% |
160 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Industry | Shares | Value | ||||||||||||
Common Stocks 99.9% | ||||||||||||||
Canada 97.3% | ||||||||||||||
Agnico Eagle Mines Ltd. | Metals & Mining | 1,180 | $ | 93,720 | ||||||||||
Alimentation Couche-Tard Inc., B | Food & Staples Retailing | 4,085 | 141,809 | |||||||||||
Bank of Montreal | Banks | 3,135 | 182,690 | |||||||||||
Barrick Gold Corp. | Metals & Mining | 8,655 | 242,334 | |||||||||||
BCE Inc. | Diversified Telecommunication Services | 1,475 | 60,977 | |||||||||||
Brookfield Asset Management Inc., A | Capital Markets | 6,805 | 224,464 | |||||||||||
Canadian Imperial Bank of Commerce | Banks | 2,180 | 162,437 | |||||||||||
Canadian National Railway Co. | Road & Rail | 3,485 | 369,985 | |||||||||||
Canadian Natural Resources Ltd. | Oil, Gas & Consumable Fuels | 5,660 | 90,424 | |||||||||||
Canadian Pacific Railway Ltd. | Road & Rail | 665 | 201,653 | |||||||||||
Canadian Tire Corp. Ltd., A | Multiline Retail | 280 | 28,114 | |||||||||||
Canadian Utilities Ltd., A | Multi-Utilities | 605 | 14,385 | |||||||||||
a | Canopy Growth Corp. | Pharmaceuticals | 1,120 | 16,007 | ||||||||||
Cenovus Energy Inc. | Oil, Gas & Consumable Fuels | 4,995 | 19,408 | |||||||||||
a | CGI Inc., A | IT Services | 1,125 | 76,120 | ||||||||||
Constellation Software Inc. | Software | 93 | 103,018 | |||||||||||
Dollarama Inc. | Multiline Retail | 1,415 | 54,068 | |||||||||||
Enbridge Inc. | Oil, Gas & Consumable Fuels | 9,915 | 288,747 | |||||||||||
Fairfax Financial Holdings Ltd. | Insurance | 135 | 39,628 | |||||||||||
Fortis Inc. | Electric Utilities | 2,265 | 92,313 | |||||||||||
Franco-Nevada Corp. | Metals & Mining | 915 | 127,460 | |||||||||||
George Weston Ltd. | Food & Staples Retailing | 355 | 26,021 | |||||||||||
Great-West Lifeco Inc. | Insurance | 1,320 | 25,713 | |||||||||||
Hydro One Ltd. | Electric Utilities | 1,545 | 32,641 | |||||||||||
IGM Financial Inc. | Capital Markets | 395 | 9,028 | |||||||||||
Imperial Oil Ltd. | Oil, Gas & Consumable Fuels | 1,090 | 13,007 | |||||||||||
Intact Financial Corp. | Insurance | 700 | 74,719 | |||||||||||
Loblaw Cos. Ltd. | Food & Staples Retailing | 820 | 42,806 | |||||||||||
Magna International Inc. | Auto Components | 1,350 | 61,580 | |||||||||||
Manulife Financial Corp. | Insurance | 9,490 | 131,578 | |||||||||||
Metro Inc., A | Food & Staples Retailing | 1,230 | 58,832 | |||||||||||
National Bank of Canada | Banks | 1,645 | 81,453 | |||||||||||
Nutrien Ltd. | Chemicals | 2,785 | 108,856 | |||||||||||
Pembina Pipeline Corp. | Oil, Gas & Consumable Fuels | 2,690 | 56,911 | |||||||||||
Power Corp. of Canada | Insurance | 2,670 | 52,151 | |||||||||||
Restaurant Brands International Inc. | Hotels, Restaurants & Leisure | 1,425 | 81,590 | |||||||||||
Rogers Communications Inc., B | Wireless Telecommunication Services | 1,715 | 67,817 | |||||||||||
Royal Bank of Canada | Banks | 6,980 | 488,535 | |||||||||||
Saputo Inc. | Food Products | 1,145 | 28,630 | |||||||||||
Shaw Communications Inc., B | Media | 2,240 | 40,750 | |||||||||||
a | Shopify Inc., A | IT Services | 529 | 539,273 | ||||||||||
Sun Life Financial Inc. | Insurance | 2,865 | 116,380 | |||||||||||
Suncor Energy Inc. | Oil, Gas & Consumable Fuels | 7,475 | 90,993 | |||||||||||
TC Energy Corp. | Oil, Gas & Consumable Fuels | 4,605 | 192,715 | |||||||||||
Teck Resources Ltd., B | Metals & Mining | 2,260 | 31,369 | |||||||||||
TELUS Corp. | Diversified Telecommunication Services | 2,075 | 36,397 | |||||||||||
The Bank of Nova Scotia | Banks | 5,920 | 245,177 | |||||||||||
The Toronto-Dominion Bank | Banks | 8,860 | 408,923 | |||||||||||
Thomson Reuters Corp. | Professional Services | 825 | 65,629 | |||||||||||
Wheaton Precious Metals Corp. | Metals & Mining | 2,195 | 107,355 | |||||||||||
|
| |||||||||||||
5,946,590 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 161 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United States 2.6% | ||||||||||||||
a | Bausch Health Cos. Inc. | Pharmaceuticals | 1,520 | $ | 23,555 | |||||||||
Waste Connections Inc. | Commercial Services & Supplies | 1,290 | 133,660 | |||||||||||
|
| |||||||||||||
157,215 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $6,324,195) 99.9% | 6,103,805 | |||||||||||||
Other Assets, less Liabilities 0.1% | 4,443 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 6,108,248 | ||||||||||||
|
|
See Abbreviations on page 331.
aNon-income producing.
162 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
Franklin FTSE Canada ETF (continued)
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE China ETF
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 22.19 | $ | 24.01 | $ | 25.99 | $ | 24.95 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment income (loss)c | 0.41 | 0.45 | 0.40 | (0.01 | ) | |||||||||||
Net realized and unrealized gains (losses) | 6.26 | (1.78 | ) | (1.99 | ) | 1.05 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 6.67 | (1.33 | ) | (1.59 | ) | 1.04 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.04 | ) | (0.49 | ) | (0.39 | ) | — | d | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 28.82 | $ | 22.19 | $ | 24.01 | $ | 25.99 | ||||||||
|
| |||||||||||||||
Total returne | 30.10% | (5.64)% | (5.94)% | 4.17% | ||||||||||||
Ratios to average net assetsf | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | 0.19% | ||||||||||||
Expenses net of waiver and payments by affiliates | —% | 0.19% | —% | —% | ||||||||||||
Net investment income (loss) | 3.11% | 1.94% | 1.70% | (0.12)% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $57,641 | $48,807 | $43,220 | $31,191 | ||||||||||||
Portfolio turnover rateg | 9.74% | h | 32.47% | h | 7.21% | 2.71% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 9.74% | 32.47% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 163 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Industry | Shares | Value | ||||||||||||
Common Stocks 99.8% | ||||||||||||||
China 99.1% | ||||||||||||||
360 Security Technology Inc., A | Software | 2,000 | $ | 4,877 | ||||||||||
a | 3SBio Inc. | Biotechnology | 25,000 | 28,129 | ||||||||||
a | 51job Inc., ADR | Professional Services | 610 | 47,574 | ||||||||||
A-Living Services Co. Ltd., H | Commercial Services & Supplies | 7,500 | 37,935 | |||||||||||
AECC Aviation Power Co. Ltd., A | Aerospace & Defense | 3,000 | 18,235 | |||||||||||
Agile Group Holdings Ltd. | Real Estate Management & Development | 30,000 | 39,174 | |||||||||||
Agricultural Bank of China Ltd., A | Banks | 209,000 | 97,628 | |||||||||||
Agricultural Bank of China Ltd., H | Banks | 662,000 | 206,715 | |||||||||||
Aier Eye Hospital Group Co. Ltd. | Health Care Providers & Services | 5,990 | 45,386 | |||||||||||
Air China Ltd., A | Airlines | 8,000 | 8,358 | |||||||||||
Air China Ltd., H | Airlines | 40,000 | 26,168 | |||||||||||
Aisino Co. Ltd., A | Software | 2,000 | 4,648 | |||||||||||
a | Alibaba Group Holding Ltd., ADR | Internet & Direct Marketing Retail | 37,710 | 11,085,986 | ||||||||||
a | Alibaba Health Information Technology Ltd. | Health Care Technology | 92,000 | 224,124 | ||||||||||
a | Aluminum Corp. of China Ltd., A | Metals & Mining | 25,000 | 10,720 | ||||||||||
a | Aluminum Corp. of China Ltd., H | Metals & Mining | 80,000 | 16,310 | ||||||||||
Angang Steel Co. Ltd., H | Metals & Mining | 20,000 | 5,342 | |||||||||||
Angel Yeast Co. Ltd., A | Food Products | 1,000 | 8,987 | |||||||||||
Anhui Anke Biotechnology Group Co. Ltd. | Biotechnology | 2,330 | 5,566 | |||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 6,000 | 48,857 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 25,000 | 171,935 | |||||||||||
Anhui Expressway Co. Ltd., H | Transportation Infrastructure | 20,000 | 9,935 | |||||||||||
Anhui Gujing Distillery Co. Ltd., A | Beverages | 1,000 | 31,944 | |||||||||||
Anhui Gujing Distillery Co. Ltd., B | Beverages | 3,000 | 33,298 | |||||||||||
Anta Sports Products Ltd. | Textiles, Apparel & Luxury Goods | 26,000 | 268,723 | |||||||||||
Asymchem Laboratories Tianjin Co. Ltd., A | Pharmaceuticals | 200 | 7,765 | |||||||||||
Autohome Inc., ADR | Interactive Media & Services | 1,220 | 117,120 | |||||||||||
Avary Holding Shenzhen Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,000 | 8,427 | |||||||||||
AVIC Aircraft Co. Ltd. | Aerospace & Defense | 4,000 | 13,569 | |||||||||||
Avic Capital Co. Ltd., A | Diversified Financial Services | 13,000 | 8,410 | |||||||||||
AVIC Electromechanical Systems Co. Ltd. | Aerospace & Defense | 6,000 | 10,141 | |||||||||||
Avic Heavy Machinery Co. Ltd., A | Machinery | 2,000 | 4,117 | |||||||||||
AVIC Jonhon OptronicTechnology Co. Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 13,645 | |||||||||||
AVIC Shenyang Aircraft Co. Ltd., A | Aerospace & Defense | 2,000 | 16,884 | |||||||||||
AviChina Industry & Technology Co. Ltd., H | Aerospace & Defense | 60,000 | 34,142 | |||||||||||
AVICOPTER Plc, A | Aerospace & Defense | 1,000 | 8,253 | |||||||||||
BAIC Motor Corp. Ltd., H | Automobiles | 50,000 | 20,323 | |||||||||||
a | Baidu Inc., ADR | Interactive Media & Services | 5,840 | 739,286 | ||||||||||
Bank of Beijing Co. Ltd., A | Banks | 32,000 | 22,068 | |||||||||||
Bank of Changsha Co. Ltd., A | Banks | 5,000 | 6,498 | |||||||||||
Bank of China Ltd., A | Banks | 114,000 | 53,755 | |||||||||||
Bank of China Ltd., H | Banks | 1,640,000 | 507,871 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 58,000 | 38,802 | |||||||||||
Bank of Communications Co. Ltd., H | Banks | 160,000 | 76,800 | |||||||||||
Bank of Hangzhou Co. Ltd. | Banks | 9,000 | 15,623 | |||||||||||
Bank of Jiangsu Co. Ltd., A | Banks | 5,000 | 4,480 | |||||||||||
Bank of Nanjing Co. Ltd., A | Banks | 15,000 | 17,440 | |||||||||||
Bank of Ningbo Co. Ltd., A | Banks | 9,000 | 41,749 | |||||||||||
Bank of Shanghai Co. Ltd., A | Banks | 22,000 | 26,388 | |||||||||||
Bank of Xi’an Co. Ltd., A | Banks | 3,000 | 2,321 | |||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 27,000 | 19,853 | |||||||||||
BBMG Corp., A | Construction Materials | 15,000 | 6,786 | |||||||||||
BBMG Corp., H | Construction Materials | 50,000 | 9,226 | |||||||||||
Beijing Capital Co. Ltd., A | Water Utilities | 10,000 | 4,273 | |||||||||||
Beijing Capital Development Co. Ltd., A | Real Estate Management & Development | 3,000 | 2,957 | |||||||||||
Beijing Capital International Airport Co. Ltd. | Transportation Infrastructure | 40,000 | 24,000 | |||||||||||
Beijing Dabeinong Technology Group Co. Ltd. | Food Products | 7,000 | 9,232 |
164 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Beijing E-Hualu Information Technology Co. Ltd., A | Software | 1,000 | $ | 5,135 | ||||||||||
Beijing Enlight Media Co. Ltd. | Entertainment | 4,000 | 9,820 | |||||||||||
Beijing Enterprises Holdings Ltd. | Gas Utilities | 10,000 | 30,000 | |||||||||||
Beijing Enterprises Water Group Ltd. | Water Utilities | 120,000 | 46,452 | |||||||||||
a | Beijing Jetsen Technology Co. Ltd. | Software | 5,000 | 4,318 | ||||||||||
Beijing Jingneng Clean Energy Co. Ltd., H | Independent Power and Renewable Electricity Producers | 40,000 | 10,168 | |||||||||||
Beijing Kunlun Tech Co. Ltd. | Entertainment | 2,000 | 7,677 | |||||||||||
Beijing New Building Materials PLC | Building Products | 2,000 | 9,107 | |||||||||||
Beijing North Star Co. Ltd., H | Real Estate Management & Development | 20,000 | 3,742 | |||||||||||
Beijing Orient National Communication Science &Technology Co. Ltd. | Software | 2,000 | 3,855 | |||||||||||
Beijing Oriental Yuhong Waterproof Technology Co. Ltd. | Construction Materials | 3,000 | 23,827 | |||||||||||
Beijing Originwater Technology Co. Ltd. | Commercial Services & Supplies | 5,000 | 6,410 | |||||||||||
Beijing Shiji Information Technology Co. Ltd. | Software | 2,000 | 11,287 | |||||||||||
a | Beijing Shougang Co. Ltd. | Metals & Mining | 8,000 | 4,303 | ||||||||||
Beijing Shunxin Agriculture Co. Ltd., A | Beverages | 1,000 | 8,865 | |||||||||||
Beijing Sinnet Technology Co. Ltd., A | IT Services | 2,200 | 7,249 | |||||||||||
Beijing Tiantan Biological Products Corp. Ltd., A | Biotechnology | 1,400 | 8,200 | |||||||||||
Beijing Tongrentang Co. Ltd., A | Pharmaceuticals | 2,000 | 7,951 | |||||||||||
a | Beijing Ultrapower Software Co. Ltd. | IT Services | 3,000 | 2,453 | ||||||||||
Beijing Yanjing Brewery Co. Ltd. | Beverages | 4,000 | 4,969 | |||||||||||
Beijing Zhong Ke San Huan High-Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 1,000 | 1,353 | |||||||||||
Beijing-Shanghai High Speed Railway Co. Ltd. | Road & Rail | 14,000 | 12,068 | |||||||||||
a | Bilibili Inc., ADR | Entertainment | 3,030 | 126,048 | ||||||||||
a | Bluefocus Intelligent Communications Group Co. Ltd. | Media | 4,000 | 4,320 | ||||||||||
Bluestar Adisseo Co., A | Chemicals | 2,000 | 3,763 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 21,000 | 8,156 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 52,000 | 37,623 | |||||||||||
Bosideng International Holdings Ltd. | Textiles, Apparel & Luxury Goods | 60,000 | 18,581 | |||||||||||
Boya Bio-pharmaceutical Group Co. Ltd. | Biotechnology | 1,000 | 5,931 | |||||||||||
Brilliance China Automotive Holdings Ltd. | Automobiles | 60,000 | 56,284 | |||||||||||
By-health Co. Ltd., A | Personal Products | 3,000 | 9,288 | |||||||||||
BYD Co. Ltd. | Automobiles | 3,000 | 51,386 | |||||||||||
BYD Co. Ltd., H | Automobiles | 15,000 | 234,968 | |||||||||||
BYD Electronic International Co. Ltd. | Communications Equipment | 15,000 | 75,387 | |||||||||||
C&S Paper Co. Ltd., A | Household Products | 2,000 | 6,319 | |||||||||||
Caitong Securities Co. Ltd., A | Capital Markets | 2,000 | 4,214 | |||||||||||
a,b,c | CanSino Biologics Inc., 144A, Reg S | Pharmaceuticals | 1,600 | 33,941 | ||||||||||
CECEP Solar Energy Co. Ltd. | Independent Power and Renewable Electricity Producers | 4,000 | 2,729 | |||||||||||
CECEP Wind-Power Corp | Independent Power and Renewable Electricity Producers | 5,000 | 2,041 | |||||||||||
Central China Securities Co. Ltd., A | Capital Markets | 7,000 | 5,560 | |||||||||||
Central China Securities Co. Ltd., H | Capital Markets | 20,000 | 3,639 | |||||||||||
Centre Testing International Group Co. Ltd., A | Professional Services | 3,000 | 10,800 | |||||||||||
CGN Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 10,000 | 4,229 | |||||||||||
CGN Power Co. Ltd., H | Independent Power and Renewable Electricity Producers | 240,000 | 49,239 | |||||||||||
Changchun High & New Technology Industry Group Inc. | Pharmaceuticals | 700 | 38,128 | |||||||||||
Changjiang Securities Co. Ltd. | Capital Markets | 8,000 | 9,454 |
franklintempleton.com | Semiannual Report | 165 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Changsha Jingjia Microelectronics Co. Ltd. | Semiconductors & Semiconductor Equipment | 1,000 | $ | 9,303 | ||||||||||
Changzhou Xingyu Automotive Lighting Systems Co. Ltd., A | Auto Components | 1,000 | 22,064 | |||||||||||
Chaozhou Three-Circle Group Co. Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 8,508 | |||||||||||
China Aerospace Times Electronics Co. Ltd., A | Aerospace & Defense | 3,000 | 3,112 | |||||||||||
China Aoyuan Group Ltd. | Real Estate Management & Development | 30,000 | 30,619 | |||||||||||
China Avic Avionics Equipment Co. Ltd., A | Aerospace & Defense | 2,000 | 5,022 | |||||||||||
China Baoan Group Co. Ltd. | Industrial Conglomerates | 5,000 | 5,157 | |||||||||||
a | China Biologic Products Holdings Inc. | Biotechnology | 490 | 54,459 | ||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 180,000 | 33,677 | |||||||||||
China CITIC Bank Corp. Ltd., A | Banks | 14,000 | 10,418 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 200,000 | 77,161 | |||||||||||
China Coal Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 10,000 | 5,791 | |||||||||||
China Coal Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 50,000 | 12,194 | |||||||||||
China Communications Construction Co. Ltd., A | Construction & Engineering | 7,000 | 7,664 | |||||||||||
China Communications Construction Co. Ltd., H | Construction & Engineering | 90,000 | 47,032 | |||||||||||
China Communications Services Corp. Ltd. | Construction & Engineering | 60,000 | 35,148 | |||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 35,000 | 162,129 | |||||||||||
China Construction Bank Corp., A | Banks | 13,000 | 11,781 | |||||||||||
China Construction Bank Corp., H | Banks | 2,010,000 | 1,301,961 | |||||||||||
a | China COSCO Holdings Co. Ltd., A | Marine | 18,000 | 15,198 | ||||||||||
a | China CSSC Holdings Ltd., A | Machinery | 3,000 | 8,161 | ||||||||||
b,c | China East Education Holdings Ltd., 144A, Reg S | Diversified Consumer Services | 10,000 | 21,652 | ||||||||||
China Eastern Airlines Corp. Ltd., A | Airlines | 15,000 | 10,919 | |||||||||||
China Eastern Airlines Corp. Ltd., H | Airlines | 40,000 | 17,084 | |||||||||||
China Enterprise Co. Ltd., A | Real Estate Management & Development | 11,000 | 6,322 | |||||||||||
China Everbright Bank Co. Ltd., A | Banks | 57,000 | 30,657 | |||||||||||
China Everbright Bank Co. Ltd., H | Banks | 70,000 | 22,039 | |||||||||||
China Everbright Environment Group Ltd. | Commercial Services & Supplies | 80,000 | 45,419 | |||||||||||
China Everbright Ltd. | Capital Markets | 20,000 | 26,684 | |||||||||||
China Evergrande Group | Real Estate Management & Development | 40,000 | 101,677 | |||||||||||
b,c | China Feihe Ltd., 144A, Reg S | Food Products | 55,000 | 127,600 | ||||||||||
China Film Co. Ltd., A | Entertainment | 3,000 | 6,229 | |||||||||||
China Foods Ltd. | Food Products | 20,000 | 6,529 | |||||||||||
China Fortune Land Development Co. Ltd., A | Real Estate Management & Development | 5,200 | 11,624 | |||||||||||
China Galaxy Securities Co. Ltd., A | Capital Markets | �� | 3,000 | 5,610 | ||||||||||
China Galaxy Securities Co. Ltd., H | Capital Markets | 80,000 | 44,903 | |||||||||||
China Gas Holdings Ltd. | Gas Utilities | 56,000 | 158,968 | |||||||||||
China Gezhouba Group Co. Ltd., A | Construction & Engineering | 8,000 | 7,002 | |||||||||||
China Great Wall Securities Co. Ltd., A | Capital Markets | 3,000 | 5,769 | |||||||||||
China Greatwall Technology Group Co. Ltd. | Technology Hardware, Storage & Peripherals | 4,000 | 9,454 | |||||||||||
China Hongqiao Group Ltd. | Metals & Mining | 60,000 | 37,394 | |||||||||||
China Huarong Asset Management Co. Ltd., H | Capital Markets | 230,000 | 24,335 | |||||||||||
a | China International Capital Corp. Ltd., H | Capital Markets | 24,000 | 55,308 | ||||||||||
China International Marine Containers (Group) Co. Ltd., H | Machinery | 10,000 | 10,800 | |||||||||||
China Jinmao Holdings Group Ltd. | Real Estate Management & Development | 140,000 | 77,135 | |||||||||||
China Jushi Co. Ltd., A | Construction Materials | 5,000 | 10,639 | |||||||||||
China Lesso Group Holdings Ltd. | Building Products | 20,000 | 35,923 | |||||||||||
China Life Insurance Co. Ltd., A | Insurance | 8,000 | 52,376 | |||||||||||
China Life Insurance Co. Ltd., H | Insurance | 160,000 | 357,987 | |||||||||||
a | China Literature Ltd. | Media | 4,000 | 29,910 | ||||||||||
d | China Lodging Group Ltd., ADR | Hotels, Restaurants & Leisure | 3,550 | 153,502 |
166 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
China Longyuan Power Group Corp. | Independent Power and Renewable Electricity Producers | 70,000 | $ | 43,716 | ||||||||||
China Machinery Engineering Corp., H | Construction & Engineering | 20,000 | 4,103 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 30,000 | 33,019 | |||||||||||
China Meheco Co. Ltd., A | Trading Companies & Distributors | 2,000 | 4,341 | |||||||||||
China Mengniu Dairy Co. Ltd. | Food Products | 55,000 | 257,613 | |||||||||||
China Merchants Bank Co. Ltd., A | Banks | 31,000 | 164,449 | |||||||||||
China Merchants Bank Co. Ltd., H | Banks | 80,000 | 377,290 | |||||||||||
China Merchants Energy Shipping Co. Ltd., A | Oil, Gas & Consumable Fuels | 11,000 | 9,336 | |||||||||||
China Merchants Port Holdings Co. Ltd. | Transportation Infrastructure | 30,000 | 30,503 | |||||||||||
China Merchants Property Operation & Service Co. Ltd., A | Real Estate Management & Development | 2,000 | 7,766 | |||||||||||
a | China Merchants Securities Co. Ltd. | Capital Markets | 26,000 | 30,865 | ||||||||||
a | China Merchants Securities Co. Ltd., A | Capital Markets | 11,400 | 36,302 | ||||||||||
China Merchants Shekou Industrial Zone Holdings Co. Ltd., A | Real Estate Management & Development | 11,000 | 24,557 | |||||||||||
China Minsheng Banking Corp. Ltd., A | Banks | 54,000 | 42,173 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 135,000 | 70,723 | |||||||||||
China Mobile Ltd. | Wireless Telecommunication Services | 115,040 | 734,029 | |||||||||||
China Molybdenum Co. Ltd., A | Metals & Mining | 16,000 | 8,771 | |||||||||||
China Molybdenum Co. Ltd., H | Metals & Mining | 90,000 | 31,819 | |||||||||||
China National Accord Medicines Corp. Ltd. | Health Care Providers & Services | 1,000 | 6,808 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 80,000 | 100,955 | |||||||||||
China National Chemical Engineering Co. Ltd., A | Construction & Engineering | 8,000 | 6,342 | |||||||||||
China National Medicines Corp. Ltd., A | Health Care Providers & Services | 1,000 | 6,422 | |||||||||||
China National Nuclear Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 21,000 | 13,585 | |||||||||||
China National Software & Service Co. Ltd., A | Software | 800 | 9,788 | |||||||||||
a | China Northern Rare Earth Group High-Tech Co. Ltd., A | Metals & Mining | 6,000 | 9,496 | ||||||||||
China Oilfield Services Ltd., A | Energy Equipment & Services | 3,000 | 5,124 | |||||||||||
China Oilfield Services Ltd., H | Energy Equipment & Services | 40,000 | 27,768 | |||||||||||
China Orient Securities Co. Ltd., A | Capital Markets | 9,000 | 14,628 | |||||||||||
China Overseas Land & Investment Ltd. | Real Estate Management & Development | 84,500 | 211,523 | |||||||||||
China Pacific Insurance Group Co. Ltd., A | Insurance | 10,000 | 45,990 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 54,000 | 152,594 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 52,000 | 29,960 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 540,000 | 216,697 | |||||||||||
China Power International Development Ltd. | Independent Power and Renewable Electricity Producers | 100,000 | 18,452 | |||||||||||
China Railway Construction Corp. Ltd., A | Construction & Engineering | 18,000 | 21,988 | |||||||||||
China Railway Construction Corp. Ltd., H | Construction & Engineering | 40,000 | 27,510 | |||||||||||
China Railway Group Ltd., A | Construction & Engineering | 30,000 | 23,827 | |||||||||||
China Railway Group Ltd., H | Construction & Engineering | 80,000 | 37,574 | |||||||||||
b | China Railway Signal & Communication Corp. Ltd., H, Reg S | Electronic Equipment, Instruments & Components | 30,000 | 9,832 | ||||||||||
China Reinsurance Group Corp., H | Insurance | 130,000 | 11,910 | |||||||||||
China Resources Beer Holdings Co. Ltd. | Beverages | 34,000 | 207,948 | |||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 50,000 | 68,258 | |||||||||||
China Resources Gas Group Ltd. | Gas Utilities | 20,000 | 89,290 | |||||||||||
China Resources Land Ltd. | Real Estate Management & Development | 61,000 | 274,697 | |||||||||||
China Resources Pharmaceutical Group Ltd. | Pharmaceuticals | 40,000 | 20,542 |
franklintempleton.com | Semiannual Report | 167 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
China Resources Power Holdings Co. Ltd. | Independent Power and Renewable Electricity Producers | 39,000 | $ | 43,026 | ||||||||||
China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,000 | 7,539 | |||||||||||
China Satellite Communications Co. Ltd., A | Media | 2,000 | 5,714 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 11,000 | 26,696 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 75,000 | 134,516 | |||||||||||
a | China Shipbuilding Industry Co. Ltd., A | Machinery | 37,000 | 23,662 | ||||||||||
China Shipping Container Lines Co. Ltd., A | Trading Companies & Distributors | 16,000 | 4,904 | |||||||||||
China Shipping Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 6,000 | 6,251 | |||||||||||
China South Publishing & Media Group Co. Ltd., A | Media | 3,000 | 4,801 | |||||||||||
a | China Southern Airlines Co. Ltd., A | Airlines | 16,000 | 13,675 | ||||||||||
a | China Southern Airlines Co. Ltd., H | Airlines | 40,000 | 21,574 | ||||||||||
China Spacesat Co. Ltd., A | Aerospace & Defense | 2,000 | 9,799 | |||||||||||
China State Construction Engineering Corp. Ltd., A | Construction & Engineering | 65,000 | 48,657 | |||||||||||
China State Construction International Holdings Ltd. | Construction & Engineering | 40,000 | 26,065 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 32,000 | 48,640 | |||||||||||
China Telecom Corp. Ltd., H | Diversified Telecommunication Services | 300,000 | 89,806 | |||||||||||
China Tourism Group Duty Free Corp. Ltd., A | Specialty Retail | 3,000 | 98,554 | |||||||||||
b,c | China Tower Corp. Ltd., H, 144A, Reg S | Diversified Telecommunication Services | 1,000,000 | 172,903 | ||||||||||
China Traditional Chinese Medicine Co. Ltd. | Pharmaceuticals | 60,000 | 25,084 | |||||||||||
China TransInfo Technology Co. Ltd. | IT Services | 1,000 | 3,237 | |||||||||||
China Unicom (Hong Kong) Ltd. | Diversified Telecommunication Services | 120,000 | 78,194 | |||||||||||
China United Network Communications Ltd., A | Wireless Telecommunication Services | 39,000 | 27,872 | |||||||||||
China Vanke Co. Ltd., A | Real Estate Management & Development | 15,000 | 61,934 | |||||||||||
China Vanke Co. Ltd., H | Real Estate Management & Development | 41,000 | 125,116 | |||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 21,000 | 59,197 | |||||||||||
China Zheshang Bank Co. Ltd., A | Banks | 9,000 | 5,597 | |||||||||||
a | China Zhongwang Holdings Ltd. | Metals & Mining | 32,000 | 5,409 | ||||||||||
Chinese Universe Publishing and Media Group Co. Ltd., A | Media | 3,000 | 5,159 | |||||||||||
Chongqing Brewery Co. Ltd., A | Beverages | 1,000 | 15,206 | |||||||||||
a | Chongqing Changan Automobile Co. Ltd. | Automobiles | 6,000 | 11,874 | ||||||||||
a | Chongqing Changan Automobile Co. Ltd., B | Automobiles | 15,000 | 8,516 | ||||||||||
Chongqing Fuling Zhacai Group Co. Ltd., A | Food Products | 1,000 | 6,935 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., A | Banks | 6,000 | 4,412 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., H | Banks | 50,000 | 18,387 | |||||||||||
Chongqing Zhifei Biological Products Co. Ltd. | Biotechnology | 2,000 | 41,056 | |||||||||||
CIFI Holdings Group Co. Ltd. | Real Estate Management & Development | 80,000 | 58,839 | |||||||||||
Cinda Real Estate Co. Ltd., A | Real Estate Management & Development | 4,000 | 2,617 |
168 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Citic Pacific Ltd. | Industrial Conglomerates | 110,000 | $ | 80,761 | ||||||||||
Citic Pacific Special Steel Group Co. Ltd., A | Metals & Mining | 7,880 | 19,182 | |||||||||||
CITIC Securities Co. Ltd., A | Capital Markets | 16,000 | 70,801 | |||||||||||
CITIC Securities Co. Ltd., H | Capital Markets | 50,000 | 111,097 | |||||||||||
CNOOC Energy Technology & Services Ltd. | Energy Equipment & Services | 5,000 | 1,724 | |||||||||||
CNOOC Ltd. | Oil, Gas & Consumable Fuels | 340,000 | 326,839 | |||||||||||
Contemporary Amperex Technology Co. Ltd. | Electrical Equipment | 1,200 | 36,992 | |||||||||||
COSCO SHIPPING Development Co. Ltd., H | Trading Companies & Distributors | 90,000 | 9,058 | |||||||||||
COSCO SHIPPING Energy Transportation Co. Ltd., H | Oil, Gas & Consumable Fuels | 32,000 | 13,213 | |||||||||||
a | COSCO Shipping Holdings Co. Ltd. | Marine | 55,000 | 26,897 | ||||||||||
COSCO SHIPPING Ports Ltd. | Transportation Infrastructure | 40,000 | 22,813 | |||||||||||
Country Garden Holdings Co. Ltd. | Real Estate Management & Development | 160,000 | 195,716 | |||||||||||
Country Garden Services Holdings Co. Ltd. | Commercial Services & Supplies | 27,000 | 173,671 | |||||||||||
CRRC Corp. Ltd., A | Machinery | 38,000 | 30,741 | |||||||||||
CRRC Corp. Ltd., H | Machinery | 80,000 | 31,794 | |||||||||||
CSC Financial Co. Ltd., A | Capital Markets | 2,000 | 14,683 | |||||||||||
CSC Financial Co. Ltd., H | Capital Markets | 20,000 | 27,974 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 29,000 | 8,644 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 1,000 | 828 | |||||||||||
CSPC Pharmaceutical Group Ltd. | Pharmaceuticals | 114,800 | 222,194 | |||||||||||
a | CSSC Offshore and Marine Engineering Group Co. Ltd., A | Machinery | 1,000 | 4,379 | ||||||||||
a | CSSC Offshore and Marine Engineering Group Co., Ltd. | Machinery | 6,000 | 6,387 | ||||||||||
Da An Gene Co. Ltd. of Sun Yat-Sen University | Biotechnology | 1,100 | 5,675 | |||||||||||
Dali Foods Group Co. Ltd. | Food Products | 45,000 | 27,465 | |||||||||||
Daqin Railway Co. Ltd., A | Road & Rail | 23,000 | 21,589 | |||||||||||
Datang International Power Generation Co. Ltd., A | Independent Power and Renewable Electricity Producers | 12,000 | 4,014 | |||||||||||
Datang International Power Generation Co. Ltd., H | Independent Power and Renewable Electricity Producers | 60,000 | 7,510 | |||||||||||
Dawning Information Industry Co. Ltd., A | Technology Hardware, Storage & Peripherals | 2,040 | 11,339 | |||||||||||
Dazhong Transportation (Group) Co. Ltd., B | Road & Rail | 21,000 | 6,951 | |||||||||||
DHC Software Co. Ltd. | IT Services | 5,000 | 7,508 | |||||||||||
Dian Diagnostics Group Co. Ltd. | Health Care Providers & Services | 1,000 | 5,846 | |||||||||||
Dong-E-E-Jiao Co. Ltd., A | Pharmaceuticals | 1,000 | 5,851 | |||||||||||
Dongfang Electric Corp. Ltd., A | Electrical Equipment | 4,000 | 5,989 | |||||||||||
Dongfang Electric Corp. Ltd., H | Electrical Equipment | 8,000 | 5,946 | |||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 60,000 | 37,239 | |||||||||||
Dongxing Securities Co. Ltd., A | Capital Markets | 3,000 | 5,672 | |||||||||||
East Group Co. Ltd., A | Electrical Equipment | 2,000 | 2,705 | |||||||||||
East Money Information Co. Ltd. | Capital Markets | 11,880 | 41,997 | |||||||||||
ENN Energy Holdings Ltd. | Gas Utilities | 16,000 | 174,245 | |||||||||||
Eve Energy Co. Ltd. | Electrical Equipment | 3,000 | 21,882 | |||||||||||
Everbright Securities Co. Ltd., A | Capital Markets | 6,000 | 19,407 | |||||||||||
Everbright Securities Co. Ltd., H | Capital Markets | 6,000 | 5,775 | |||||||||||
a | Fangda Carbon New Material Co. Ltd. | Electrical Equipment | 7,000 | 6,292 | ||||||||||
Far East Horizon Ltd. | Diversified Financial Services | 50,000 | 40,516 | |||||||||||
a | Faw Jiefang Group Co. Ltd. | Automobiles | 4,000 | 7,120 |
franklintempleton.com | Semiannual Report | 169 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Fiberhome Telecommunication Technologies Co. Ltd., A | Communications Equipment | 2,000 | $ | 7,002 | ||||||||||
Financial Street Holdings Co. Ltd. | Real Estate Management & Development | 3,000 | 2,882 | |||||||||||
First Capital Securities Co. Ltd. | Capital Markets | 6,000 | 9,823 | |||||||||||
Flat Glass Group Co. Ltd., H | Semiconductors & Semiconductor Equipment | 10,000 | 26,516 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 23,000 | 27,351 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 2,020 | 48,250 | |||||||||||
Fosun International Ltd. | Industrial Conglomerates | 50,000 | 58,065 | |||||||||||
a | Founder Securities Co. Ltd., A | Capital Markets | 13,000 | 16,091 | ||||||||||
Foxconn Industrial Internet Co. Ltd., A | Electronic Equipment, Instruments & Components | 6,000 | 12,015 | |||||||||||
Fujian Sunner Development Co. Ltd. | Food Products | 2,000 | 6,448 | |||||||||||
Fuyao Glass Industry Group Co. Ltd., A | Auto Components | 3,000 | 14,319 | |||||||||||
Fuyao Group Glass Industries Co. Ltd., H | Auto Components | 12,000 | 43,974 | |||||||||||
G-bits Network Technology Xiamen Co. Ltd., A | Entertainment | 100 | 9,179 | |||||||||||
Ganfeng Lithium Co. Ltd. | Metals & Mining | 2,000 | 15,970 | |||||||||||
Ganfeng Lithium Co. Ltd., H | Metals & Mining | 4,000 | 19,484 | |||||||||||
a | GCL System Integration Technology Co. Ltd. | Semiconductors & Semiconductor Equipment | 10,000 | 5,570 | ||||||||||
GD Power Development Co. Ltd., A | Independent Power and Renewable Electricity Producers | 32,000 | 9,525 | |||||||||||
a,d | GDS Holdings Ltd., ADR | IT Services | 1,950 | 159,568 | ||||||||||
Geely Automobile Holdings Ltd. | Automobiles | 110,000 | 218,581 | |||||||||||
GEM Co. Ltd. | Metals & Mining | 7,000 | 4,858 | |||||||||||
Gemdale Corp., A | Real Estate Management & Development | 7,000 | 15,008 | |||||||||||
Genimous Technology Co. Ltd. | Software | 3,000 | 3,161 | |||||||||||
a | Genscript Biotech Corp. | Life Sciences Tools & Services | 20,000 | 32,723 | ||||||||||
GF Securities Co. Ltd. | Capital Markets | 9,000 | 20,927 | |||||||||||
GF Securities Co. Ltd., H | Capital Markets | 34,000 | 42,862 | |||||||||||
Gigadevice Semiconductor Beijing Inc., A | Semiconductors & Semiconductor Equipment | 820 | 20,917 | |||||||||||
a | Global Top E-Commerce Co. Ltd. | Internet & Direct Marketing Retail | 2,000 | 1,818 | ||||||||||
Glodon Co. Ltd. | Software | 2,000 | 21,499 | |||||||||||
GoerTek Inc. | Electronic Equipment, Instruments & Components | 5,000 | 29,788 | |||||||||||
a | GOME Retail Holdings Ltd. | Specialty Retail | 240,000 | 31,587 | ||||||||||
a | Gosuncn Technology Group Co. Ltd. | Communications Equipment | 4,000 | 2,947 | ||||||||||
Grandjoy Holdings Group Co. Ltd., A | Real Estate Management & Development | 7,000 | 4,786 | |||||||||||
Great Wall Motor Co. Ltd., A | Automobiles | 5,000 | 14,087 | |||||||||||
Great Wall Motor Co. Ltd., H | Automobiles | 65,000 | 82,445 | |||||||||||
Gree Electric Appliances Inc. of Zhuhai | Household Durables | 9,000 | 70,687 | |||||||||||
Greendland Holdings Corp. Ltd., A | Real Estate Management & Development | 9,000 | 8,448 | |||||||||||
Greentown China Holdings Ltd. | Real Estate Management & Development | 15,000 | 23,303 | |||||||||||
GRG Banking Equipment Co. Ltd. | Technology Hardware, Storage & Peripherals | 4,000 | 7,161 | |||||||||||
a | GSX Techedu Inc., ADR | Diversified Consumer Services | 970 | 87,407 | ||||||||||
Guangdong Electric Power Development Co. Ltd., B | Independent Power and Renewable Electricity Producers | 14,000 | 3,848 | |||||||||||
a | Guangdong Golden Dragon Development Inc. | Capital Markets | 1,000 | 2,169 | ||||||||||
Guangdong Haid Group Co. Ltd. | Food Products | 2,000 | 18,075 | |||||||||||
a | Guangdong HEC Technology Holding Co. Ltd., A | Metals & Mining | 6,000 | 5,473 | ||||||||||
Guangdong Investment Ltd. | Water Utilities | 67,300 | 106,464 | |||||||||||
Guangdong Kinlong Hardware Products Co. Ltd., A | Building Products | 400 | 7,621 | |||||||||||
Guangdong LY Intelligent Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 10,000 | 16,489 | |||||||||||
Guangdong Xinbao Electrical Appliances Holdings Co. Ltd. | Household Durables | 1,000 | 6,101 |
170 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Guangshen Railway Co. Ltd., H | Road & Rail | 40,000 | $ | 6,761 | ||||||||||
Guangxi Liugong Machinery Co. Ltd. | Machinery | 4,000 | 4,161 | |||||||||||
Guangzhou Automobile Group Co. Ltd., A | Automobiles | 4,000 | 5,611 | |||||||||||
Guangzhou Automobile Group Co. Ltd., H | Automobiles | 60,000 | 49,935 | |||||||||||
Guangzhou Baiyun International Airport Co. Ltd., A | Transportation Infrastructure | 3,000 | 6,017 | |||||||||||
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., A | Pharmaceuticals | 2,000 | 8,897 | |||||||||||
Guangzhou Baiyunshan Pharmceutical Holdings Co. Ltd. | Pharmaceuticals | 6,000 | 14,973 | |||||||||||
Guangzhou Haige Communications Group Inc. Co. | Communications Equipment | 3,000 | 5,172 | |||||||||||
Guangzhou Kingmed Diagnostics Group Co. Ltd., A | Health Care Providers & Services | 1,000 | 15,072 | |||||||||||
Guangzhou R&F Properties Co. Ltd., H | Real Estate Management & Development | 24,000 | 30,844 | |||||||||||
Guangzhou Shiyuan Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,000 | 14,354 | |||||||||||
Guangzhou TInc.i Materials Technology Co. Ltd. | Chemicals | 1,000 | 7,618 | |||||||||||
Guangzhou Wondfo Biotech Co. Ltd., A | Health Care Equipment & Supplies | 1,000 | 12,238 | |||||||||||
Guangzhou Yuexiu Financial Holdings Group Co. Ltd., A | Capital Markets | 2,000 | 5,010 | |||||||||||
Guizhou Bailing Group Pharmaceutical Co. Ltd., A | Pharmaceuticals | 3,000 | 3,722 | |||||||||||
Guosen Securities Co. Ltd. | Capital Markets | 7,000 | 13,874 | |||||||||||
a | Guosheng Financial Holding Inc. | Electrical Equipment | 2,000 | 2,823 | ||||||||||
Guotai Junan Securities Co. Ltd. | Capital Markets | 16,000 | 22,173 | |||||||||||
Guotai Junan Securities Co. Ltd., A | Capital Markets | 11,000 | 29,565 | |||||||||||
a | Guoxuan High-Tech Co. Ltd. | Electrical Equipment | 2,000 | 7,014 | ||||||||||
Guoyuan Securities Co. Ltd. | Capital Markets | 4,000 | 7,067 | |||||||||||
b,c | Haidilao International Holding Ltd., 144A, Reg S | Hotels, Restaurants & Leisure | 17,000 | 122,290 | ||||||||||
Haier Electronics Group Co. Ltd. | Household Durables | 30,000 | 108,387 | |||||||||||
Haier Smart Home Co. Ltd., A | Household Durables | 10,000 | 32,153 | |||||||||||
Haitian International Holdings Ltd. | Machinery | 10,000 | 23,226 | |||||||||||
a | Haitong Securities Co. Ltd., A | Capital Markets | 15,000 | 31,276 | ||||||||||
a | Haitong Securities Co. Ltd., H | Capital Markets | 72,000 | 60,945 | ||||||||||
Han’s Laser Technology Industry Group Co. Ltd., A | Machinery | 1,000 | 4,848 | |||||||||||
a | Hang Zhou Great Star Industrial Co. Ltd. | Household Durables | 2,000 | 5,829 | ||||||||||
Hangzhou Binjiang Real Estate Group Co. Ltd. | Real Estate Management & Development | 6,000 | 4,208 | |||||||||||
Hangzhou Hikvision Digital Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 14,000 | 78,620 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 2,000 | 9,634 | |||||||||||
Hangzhou Shunwang Technology Co. Ltd. | Entertainment | 1,000 | 2,610 | |||||||||||
Hangzhou Tigermed Consulting Co. Ltd. | Life Sciences Tools & Services | 1,000 | 15,170 | |||||||||||
a | Hansoh Pharmaceutical Group Co. Ltd. | Pharmaceuticals | 20,000 | 97,161 | ||||||||||
Harbin Boshi Automation Co. Ltd. | Machinery | 2,000 | 3,666 | |||||||||||
Health & Happiness H&H International Holdings Ltd. | Food Products | 3,400 | 14,631 | |||||||||||
Hefei Meiya Optoelectronic Technology Inc., A | Machinery | 1,000 | 7,066 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 3,000 | 8,178 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 5,000 | 38,998 | |||||||||||
Hengan International Group Co. Ltd. | Personal Products | 16,000 | 116,129 | |||||||||||
Hengdian Group DMEGC Magnetics Co. Ltd. | Electronic Equipment, Instruments & Components | 3,000 | 5,619 | |||||||||||
Hengli Petrochemical Co. Ltd., A | Chemicals | 5,000 | 13,675 | |||||||||||
a | HengTen Networks Group Ltd. | Internet & Direct Marketing Retail | 400,000 | 14,968 |
franklintempleton.com | Semiannual Report | 171 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Hengtong Optic-electric Co. Ltd., A | Communications Equipment | 3,000 | $ | 6,375 | ||||||||||
Hengyi Petrochemical Co. Ltd., A | Chemicals | 5,000 | 7,648 | |||||||||||
a | Hesteel Co. Ltd. | Metals & Mining | 11,000 | 3,436 | ||||||||||
Hithink RoyalFlush Information Network Co. Ltd. | Capital Markets | 800 | 18,846 | |||||||||||
Holitech Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 6,000 | 4,438 | |||||||||||
Hongfa Technology Co. Ltd., A | Electrical Equipment | 1,000 | 6,733 | |||||||||||
Hongta Securities Co. Ltd., A | Capital Markets | 2,000 | 5,390 | |||||||||||
Hopson Development Holdings Ltd. | Real Estate Management & Development | 10,000 | 23,587 | |||||||||||
a,b | Hua Hong Semiconductor Ltd., Reg S | Semiconductors & Semiconductor Equipment | 10,000 | 38,129 | ||||||||||
Huaan Securities Co. Ltd., A | Capital Markets | 4,000 | 5,169 | |||||||||||
Huadian Power International Corp. Ltd., A | | Independent Power and Renewable Electricity Producers | | 11,000 | 5,770 | |||||||||
Huadian Power International Corp. Ltd., H | | Independent Power and Renewable Electricity Producers | | 40,000 | 10,271 | |||||||||
Huadong Medicine Co. Ltd., A | Health Care Providers & Services | 3,000 | 10,919 | |||||||||||
Huagong Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 6,725 | |||||||||||
Huaibei Mining Holdings Co. Ltd., A | Metals & Mining | 4,000 | 5,717 | |||||||||||
Hualan Biological Engineering Inc. | Biotechnology | 2,660 | 22,338 | |||||||||||
Huaneng Power International Inc., A | | Independent Power and Renewable Electricity Producers | | 11,000 | 8,769 | |||||||||
Huaneng Power International Inc., H | | Independent Power and Renewable Electricity Producers | | 100,000 | 38,581 | |||||||||
Huapont Life Sciences Co. Ltd. | Chemicals | 2,000 | 1,474 | |||||||||||
Huatai Securities Co. Ltd., A | Capital Markets | 11,000 | 33,277 | |||||||||||
Huatai Securities Co. Ltd., H | Capital Markets | 34,000 | 55,541 | |||||||||||
Huaxi Securities Co. Ltd. | Capital Markets | 2,000 | 3,531 | |||||||||||
Huaxia Bank Co. Ltd., A | Banks | 24,000 | 21,679 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 2,000 | 7,406 | |||||||||||
Huaxin Cement Co. Ltd., B | Construction Materials | 7,000 | 15,869 | |||||||||||
Huayu Automotive Systems Co. Ltd. | Auto Components | 5,000 | 18,346 | |||||||||||
Hubei Biocause Pharmaceutical Co. Ltd. | Insurance | 9,000 | 7,002 | |||||||||||
Hubei Energy Group Co. Ltd. | | Independent Power and Renewable Electricity Producers | | 8,000 | 4,374 | |||||||||
Huizhou Desay Sv Automotive Co. Ltd. | Household Durables | 1,000 | 10,470 | |||||||||||
Humanwell Healthcare Group Co. Ltd., A | Pharmaceuticals | 2,000 | 9,496 | |||||||||||
Hunan Valin Steel Co. Ltd. | Metals & Mining | 10,000 | 7,427 | |||||||||||
Hundsun Technologies Inc., A | Software | 1,500 | 21,792 | |||||||||||
Huolinhe Opencut Coal Industry Corp. Ltd. of Inner Mongolia | Oil, Gas & Consumable Fuels | 2,000 | 2,859 | |||||||||||
a | HyUnion Holding Co. Ltd. | Auto Components | 3,000 | 3,134 | ||||||||||
Iflytek Co. Ltd. | Software | 3,000 | 15,150 | |||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 114,000 | 82,649 | |||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 1,690,000 | 876,619 | |||||||||||
Industrial Bank Co. Ltd., A | Banks | 31,000 | 73,682 | |||||||||||
Industrial Securities Co. Ltd., A | Capital Markets | 10,000 | 12,201 | |||||||||||
a | Inner Mongolia BaoTou Steel Union Co. Ltd., A | Metals & Mining | 55,000 | 9,320 | ||||||||||
Inner Mongolia First Machinery Group Co. Ltd., A | Machinery | 1,000 | 1,643 | |||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 9,000 | 51,059 | |||||||||||
Inner Mongolia Yitai Coal Co. Ltd., B | Oil, Gas & Consumable Fuels | 21,000 | 14,427 | |||||||||||
a | Innovent Biologics Inc. | Biotechnology | 27,500 | 203,677 | ||||||||||
Inspur Electronic Information Industry Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,108 | 9,440 | |||||||||||
Intco Medical Technology Co. Ltd., A | Health Care Equipment & Supplies | 300 | 6,666 | |||||||||||
a,d | Iqiyi Inc., ADR | Entertainment | 5,000 | 112,900 |
172 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Jafron Biomedical Co. Ltd., A | Health Care Equipment & Supplies | 1,000 | $ | 10,470 | ||||||||||
Jason Furniture Hangzhou Co. Ltd., A | Household Durables | 1,000 | 8,886 | |||||||||||
a | JD.com Inc., ADR | Internet & Direct Marketing Retail | 18,880 | 1,465,277 | ||||||||||
Jiangsu Eastern Shenghong Co. Ltd. | Chemicals | 4,000 | 3,595 | |||||||||||
Jiangsu Expressway Co. Ltd., A | Transportation Infrastructure | 3,000 | 4,195 | |||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 30,000 | 30,194 | |||||||||||
Jiangsu Hengli Hydraulic Co. Ltd., A | Machinery | 1,480 | 15,571 | |||||||||||
Jiangsu Hengrui Medicine Co. Ltd., A | Pharmaceuticals | 8,000 | 105,884 | |||||||||||
Jiangsu King’s Luck Brewery JSC Ltd. | Beverages | 2,000 | 13,091 | |||||||||||
Jiangsu Yanghe Brewery JST Co. Ltd., A | Beverages | 3,000 | 55,254 | |||||||||||
Jiangsu Yuyue Medical Equipment & Supply Co. Ltd. | Health Care Equipment & Supplies | 1,000 | 4,833 | |||||||||||
Jiangsu Zhongnan Construction Group Co. Ltd. | Real Estate Management & Development | 6,000 | 8,108 | |||||||||||
Jiangsu Zhongtian Technology Co. Ltd., A | Electrical Equipment | 6,000 | 9,266 | |||||||||||
Jiangxi Copper Co. Ltd., A | Metals & Mining | 3,000 | 6,264 | |||||||||||
Jiangxi Copper Co. Ltd., H | Metals & Mining | 30,000 | 33,484 | |||||||||||
Jiangxi Zhengbang Technology Co. Ltd., A | Food Products | 4,000 | 10,716 | |||||||||||
Jiayuan International Group Ltd. | Real Estate Management & Development | 20,000 | 8,335 | |||||||||||
Jilin Aodong Pharmaceutical Group Co. Ltd. | Pharmaceuticals | 1,000 | 2,465 | |||||||||||
Jinduicheng Molybdenum Co. Ltd., A | Metals & Mining | 3,000 | 2,621 | |||||||||||
Jinke Properties Group Co. Ltd. | Real Estate Management & Development | 8,000 | 10,669 | |||||||||||
b,c | Jinxin Fertility Group Ltd., 144A, Reg S | Health Care Providers & Services | 20,000 | 25,187 | ||||||||||
Jinyu Bio-Technology Co. Ltd., A | Biotechnology | 2,000 | 7,957 | |||||||||||
Joincare Pharmaceutical Group Industry Co. Ltd., A | Pharmaceuticals | 3,000 | 7,528 | |||||||||||
a | Jointown Pharmaceutical Group Co. Ltd., A | Health Care Providers & Services | 3,000 | 7,471 | ||||||||||
Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., A | Food Products | 1,000 | 9,652 | |||||||||||
Joyoung Co. Ltd. | Household Durables | 1,000 | 5,972 | |||||||||||
JOYY Inc., ADR | Interactive Media & Services | 1,180 | 95,191 | |||||||||||
a | KE Holdings Inc., ADR | Real Estate Management & Development | 2,300 | 140,990 | ||||||||||
Kingboard Holdings Ltd. | Electronic Equipment, Instruments & Components | 15,000 | 49,355 | |||||||||||
Kingdee International Software Group Co. Ltd. | Software | 45,000 | 116,129 | |||||||||||
Kingfa Sci & Tech Co. Ltd. | Chemicals | 4,000 | 9,272 | |||||||||||
Kingsoft Corp. Ltd. | Software | 18,000 | 89,768 | |||||||||||
a | Kuang-Chi Technologies Co. Ltd. | Auto Components | 3,000 | 9,637 | ||||||||||
Kunlun Energy Co. Ltd. | Gas Utilities | 72,000 | 47,195 | |||||||||||
a | Kunwu Jiuding Investment Holdings Co. Ltd., A | Capital Markets | 1,000 | 3,556 | ||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 1,900 | 467,140 | |||||||||||
KWG Group Holdings Ltd. | Real Estate Management & Development | 25,000 | 42,645 | |||||||||||
Lakala Payment Co. Ltd., A | IT Services | 1,000 | 5,623 | |||||||||||
Lao Feng Xiang Co. Ltd., B | Textiles, Apparel & Luxury Goods | 4,000 | 11,884 | |||||||||||
Laobaixing Pharmacy Chain JSC | Food & Staples Retailing | 1,000 | 12,228 | |||||||||||
Legend Holdings Corp., H | Technology Hardware, Storage & Peripherals | 12,000 | 14,586 | |||||||||||
Lens Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 3,000 | 14,199 | |||||||||||
Leo Group Co. Ltd. | Media | 11,000 | 4,684 | |||||||||||
Lepu Medical Technology Beijing Co. Ltd. | Health Care Equipment & Supplies | 3,000 | 14,902 | |||||||||||
Leyard Optoelectronic Co. Ltd. | Electronic Equipment, Instruments & Components | 3,000 | 3,399 | |||||||||||
Li Ning Co. Ltd. | Textiles, Apparel & Luxury Goods | 40,000 | 185,806 | |||||||||||
LianChuang Electronic Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 2,660 | 4,241 | |||||||||||
Lianhe Chemical Technology Co. Ltd., A | Chemicals | 1,000 | 3,638 | |||||||||||
Liaoning Cheng Da Co. Ltd., A | Distributors | 2,000 | 6,861 | |||||||||||
Livzon Pharmaceutical Group Inc. | Pharmaceuticals | 1,000 | 7,251 | |||||||||||
Livzon Pharmaceutical Group Inc., H | Pharmaceuticals | 4,000 | 18,271 | |||||||||||
Logan Group Co. Ltd. | Real Estate Management & Development | 20,000 | 31,535 | |||||||||||
Lomon Billions Group Co. Ltd. | Chemicals | 3,000 | 10,296 | |||||||||||
b,c | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 40,000 | 224,516 |
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FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
LONGi Green Energy Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 6,000 | $ | 66,319 | ||||||||||
Luenmei Quantum Co. Ltd., A | Water Utilities | 2,000 | 3,805 | |||||||||||
Luxshare Precision Industry Co. Ltd., A | Electronic Equipment, Instruments & Components | 10,099 | 85,018 | |||||||||||
Luye Pharma Group Ltd. | Pharmaceuticals | 35,000 | 20,323 | |||||||||||
Luzhou Laojiao Co. Ltd., A | Beverages | 3,000 | 63,459 | |||||||||||
Maanshan Iron & Steel Co. Ltd., A | Metals & Mining | 21,000 | 8,262 | |||||||||||
Maanshan Iron & Steel Co. Ltd., H | Metals & Mining | 20,000 | 4,619 | |||||||||||
Maccura Biotechnology Co. Ltd. | Life Sciences Tools & Services | 1,000 | 7,807 | |||||||||||
Mango Excellent Media Co. Ltd. | Entertainment | 3,030 | 30,093 | |||||||||||
Maxscend Microelectronics Co. Ltd., A | Electronic Equipment, Instruments & Components | 300 | 16,701 | |||||||||||
a | Meinian Onehealth Healthcare Holdings Co. Ltd. | Health Care Providers & Services | 6,000 | 12,537 | ||||||||||
a,b | Meituan Dianping, B, Reg S | Internet & Direct Marketing Retail | 77,000 | 2,402,400 | ||||||||||
Metallurgical Corp. of China Ltd. | Construction & Engineering | 70,000 | 11,200 | |||||||||||
Metallurgical Corp. of China Ltd., A | Construction & Engineering | �� | 22,000 | 8,591 | ||||||||||
Momo Inc., ADR | Interactive Media & Services | 3,330 | 45,821 | |||||||||||
Muyuan Foods Co. Ltd. | Food Products | 5,400 | 58,883 | |||||||||||
NanJi E-Commerce Co. Ltd. | Media | 4,000 | 10,173 | |||||||||||
Nanjing Iron & Steel Co. Ltd., A | Metals & Mining | 10,000 | 4,494 | |||||||||||
Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd. | Pharmaceuticals | 1,300 | 8,584 | |||||||||||
Nanjing Securities Co. Ltd., A | Capital Markets | 2,000 | 4,161 | |||||||||||
a | Nanyang Topsec Technologies Group Inc., A | Electrical Equipment | 2,000 | 6,772 | ||||||||||
Nari Technology Development Co. Ltd., A | Electrical Equipment | 7,000 | 20,341 | |||||||||||
NAURA Technology Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 800 | 18,751 | |||||||||||
NavInfo Co. Ltd. | Household Durables | 3,000 | 6,498 | |||||||||||
NetEase Inc., ADR | Entertainment | 1,630 | 741,112 | |||||||||||
New China Life Insurance Co. Ltd., A | Insurance | 3,000 | 27,444 | |||||||||||
New China Life Insurance Co. Ltd., H | Insurance | 19,000 | 70,729 | |||||||||||
New Hope Liuhe Co. Ltd. | Food Products | 6,000 | 24,491 | |||||||||||
a | New Oriental Education & Technology Group Inc., ADR | Diversified Consumer Services | 2,900 | 433,550 | ||||||||||
Newland Digital Technology Co. Ltd. | Software | 2,000 | 4,656 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 40,000 | 50,168 | |||||||||||
Ninestar Corp. | Technology Hardware, Storage & Peripherals | 1,000 | 4,200 | |||||||||||
Ningbo Joyson Electronic Corp. | Auto Components | 2,000 | 6,528 | |||||||||||
Ningbo Tuopu Group Co. Ltd., A | Auto Components | 1,000 | 5,894 | |||||||||||
Ningbo Zhoushan Port Co. Ltd., A | Transportation Infrastructure | 12,000 | 6,596 | |||||||||||
Ningxia Baofeng Energy Group Co. Ltd. | Chemicals | 3,000 | 4,509 | |||||||||||
a | NIO Inc., ADR | Automobiles | 20,590 | 436,920 | ||||||||||
Northeast Securities Co. Ltd. | Capital Markets | 3,000 | 4,368 | |||||||||||
NSFOCUS Information Technology Co. Ltd. | Software | 1,000 | 2,834 | |||||||||||
Oceanwide Holdings Co. Ltd. | Diversified Financial Services | 8,000 | 4,975 | |||||||||||
Offcn Education Technology Co. Ltd., A | Diversified Consumer Services | 3,000 | 14,425 | |||||||||||
Offshore Oil Engineering Co. Ltd., A | Energy Equipment & Services | 8,000 | 5,317 | |||||||||||
OFILM Group Co. Ltd. | Electronic Equipment, Instruments & Components | 4,000 | 8,494 | |||||||||||
a | OneConnect Financial Technology Co. Ltd., ADR | Software | 1,090 | 23,217 | ||||||||||
Orient Securities Co. Ltd. of China, H | Capital Markets | 16,000 | 10,612 | |||||||||||
Oriental Pearl Group Co. Ltd., A | Media | 6,000 | 8,567 | |||||||||||
a | Ourpalm Co. Ltd. | Entertainment | 5,000 | 5,025 | ||||||||||
Ovctek China Inc., A | Health Care Equipment & Supplies | 1,000 | 9,168 | |||||||||||
People.cn Co. Ltd., A | Media | 1,000 | 2,732 | |||||||||||
Perfect World Co. Ltd. | Entertainment | 1,500 | 7,360 | |||||||||||
PetroChina Co. Ltd., H | Oil, Gas & Consumable Fuels | 440,000 | 128,877 | |||||||||||
Pharmaron Beijing Co. Ltd., A | Life Sciences Tools & Services | 1,000 | 15,325 | |||||||||||
b,c | Pharmaron Beijing Co. Ltd., H, 144A, Reg S | Life Sciences Tools & Services | 3,000 | 37,316 | ||||||||||
PICC Property and Casualty Co. Ltd., H | Insurance | 140,000 | 97,368 |
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FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
a | Pinduoduo Inc., ADR | Internet & Direct Marketing Retail | 5,920 | $ | 438,968 | |||||||||
Ping An Bank Co. Ltd., A | Banks | 29,000 | 64,826 | |||||||||||
a,b | Ping An Healthcare and Technology Co. Ltd., Reg S | Health Care Technology | 8,000 | 102,452 | ||||||||||
Ping An Insurance (Group) Co. of China Ltd., H | Insurance | 117,000 | 1,200,194 | |||||||||||
Ping An Insurance Group Co. of China Ltd., A | Insurance | 16,000 | 179,798 | |||||||||||
Poly Developments and Holdings Group Co. Ltd., A | Real Estate Management & Development | 18,000 | 42,147 | |||||||||||
Poly Property Group Co. Ltd. | Real Estate Management & Development | 40,000 | 11,097 | |||||||||||
Poly Property Services Co. Ltd., H | Real Estate Management & Development | 3,000 | 23,265 | |||||||||||
Postal Savings Bank of China Co. Ltd., H | Banks | 200,000 | 83,871 | |||||||||||
Power Construction Corp. of China Ltd. | Construction & Engineering | 18,000 | 10,000 | |||||||||||
Proya Cosmetics Co. Ltd., A | Personal Products | 300 | 6,368 | |||||||||||
b | Qingdao Port International Co. Ltd., H, Reg S | Transportation Infrastructure | 20,000 | 11,613 | ||||||||||
Qingdao TGOOD Electric Co. Ltd. | Electrical Equipment | 1,000 | 2,601 | |||||||||||
Red Star Macalline Group Corp. Ltd. | Real Estate Management & Development | 13,200 | 7,852 | |||||||||||
Red Star Macalline Group Corp. Ltd., A | Real Estate Management & Development | 2,200 | 3,112 | |||||||||||
RiseSun Real Estate Development Co. Ltd. | Real Estate Management & Development | 5,000 | 5,622 | |||||||||||
Rongsheng Petro Chemical Co. Ltd. | Chemicals | 4,000 | 11,058 | |||||||||||
SAIC Motor Corp Ltd | Automobiles | 15,000 | 42,284 | |||||||||||
Sanan Optoelectronics Co. Ltd., A | Semiconductors & Semiconductor Equipment | 7,000 | 25,199 | |||||||||||
Sangfor Technologies Inc., A | Software | 300 | 9,361 | |||||||||||
Sansteel Minguang Co. Ltd. | Metals & Mining | 5,000 | 4,826 | |||||||||||
Sany Heavy Industry Co. Ltd., A | Machinery | 13,000 | 47,680 | |||||||||||
SDIC Capital Co. Ltd., A | Capital Markets | 5,000 | 11,273 | |||||||||||
SDIC Power Holdings Co. Ltd., A | Independent Power and Renewable Electricity Producers | 10,000 | 13,291 | |||||||||||
Sealand Securities Co. Ltd. | Capital Markets | 6,640 | 5,215 | |||||||||||
Seazen Group Ltd. | Real Estate Management & Development | 40,000 | 33,961 | |||||||||||
Seazen Holdings Co. Ltd., A | Real Estate Management & Development | 3,000 | 15,455 | |||||||||||
a,c | Semiconductor Manufacturing International Corp. | Semiconductors & Semiconductor Equipment | 90,000 | 210,426 | ||||||||||
SF Holding Co. Ltd. | Air Freight & Logistics | 4,000 | 47,861 | |||||||||||
SG Micro Corp., A | Semiconductors & Semiconductor Equipment | 300 | 13,233 | |||||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 11,000 | 13,599 | |||||||||||
Shaanxi International Trust Co. Ltd. | Capital Markets | 7,000 | 3,920 | |||||||||||
Shandong Chenming Paper Holdings Ltd., B | Paper & Forest Products | 17,000 | 5,923 | |||||||||||
Shandong Chenming Paper Holdings Ltd., H | Paper & Forest Products | 10,000 | 4,413 | |||||||||||
Shandong Denghai Seeds Co. Ltd., A | Food Products | 1,000 | 2,499 | |||||||||||
b,c | Shandong Gold Mining Co. Ltd., 144A, Reg S | Metals & Mining | 10,500 | 25,850 | ||||||||||
Shandong Gold Mining Co. Ltd., A | Metals & Mining | 5,684 | 21,358 | |||||||||||
a | Shandong Himile Mechanical Science & Technology Co. Ltd., A | Machinery | 1,000 | 3,945 | ||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 3,000 | 10,831 | |||||||||||
Shandong Nanshan Aluminum Co. Ltd., A | Metals & Mining | 22,000 | 7,391 | |||||||||||
Shandong Pharmaceutical Glass Co. Ltd., A | Health Care Equipment & Supplies | 1,000 | 6,649 | |||||||||||
Shandong Sinocera Functional Material Co. Ltd., A | Chemicals | 2,000 | 10,949 |
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FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Shandong Sun Paper Industry JSC Ltd. | Paper & Forest Products | 4,000 | $ | 8,311 | ||||||||||
Shandong Weigao Group Medical Polymer Co. Ltd., H | Health Care Equipment & Supplies | 49,700 | 99,015 | |||||||||||
Shanghai 2345 Network Holding Group Co. Ltd. | Software | 3,000 | 1,255 | |||||||||||
Shanghai AJ Group Co. Ltd., A | Diversified Financial Services | 4,000 | 4,886 | |||||||||||
Shanghai Bairun Investment Holding Group Co. Ltd., A | Beverages | 1,000 | 9,412 | |||||||||||
Shanghai Baosight Software Co. Ltd., A | Software | 1,000 | 10,660 | |||||||||||
Shanghai Baosight Software Co. Ltd., B | Software | 7,020 | 24,675 | |||||||||||
Shanghai Construction Group Co. Ltd., A | Construction & Engineering | 12,000 | 5,464 | |||||||||||
Shanghai Dazhong Public Utilities Group Co. Ltd., A | Gas Utilities | 3,000 | 1,892 | |||||||||||
a | Shanghai Electric Group Co. Ltd., A | Electrical Equipment | 12,000 | 8,877 | ||||||||||
a | Shanghai Electric Group Co. Ltd., H | Electrical Equipment | 60,000 | 16,181 | ||||||||||
Shanghai Electric Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 5,000 | 5,533 | |||||||||||
Shanghai Environment Group Co. Ltd., A | Commercial Services & Supplies | 2,000 | 3,389 | |||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., A | Pharmaceuticals | 3,000 | 21,710 | |||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., H | Pharmaceuticals | 10,000 | 41,484 | |||||||||||
Shanghai Industrial Holdings Ltd. | Industrial Conglomerates | 10,000 | 13,290 | |||||||||||
Shanghai Industrial Urban Development Group Ltd. | Real Estate Management & Development | 2,000 | 191 | |||||||||||
Shanghai International Airport Co. Ltd., A | Transportation Infrastructure | 3,000 | 30,405 | |||||||||||
Shanghai International Port Group Co. Ltd., A | Transportation Infrastructure | 17,000 | 10,471 | |||||||||||
Shanghai Jahwa United Co. Ltd., A | Personal Products | 1,000 | 5,555 | |||||||||||
Shanghai Jinjiang International Hotels Co. Ltd. | Hotels, Restaurants & Leisure | 4,000 | 6,620 | |||||||||||
Shanghai Jinjiang International Hotels Co. Ltd., A | Hotels, Restaurants & Leisure | 1,000 | 6,008 | |||||||||||
Shanghai Jinqiao Export Processing Zone Development Co. Ltd., B | Real Estate Management & Development | 4,000 | 3,856 | |||||||||||
a,b,c | Shanghai Junshi Biosciences Co. Ltd., H, 144A, Reg S | Biotechnology | 4,000 | 24,800 | ||||||||||
Shanghai Lingang Holdings Corp. Ltd. | Real Estate Management & Development | 2,000 | 6,581 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., A | Real Estate Management & Development | 3,000 | 5,066 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B | Real Estate Management & Development | 23,000 | 19,228 | |||||||||||
Shanghai M&G Stationery Inc., A | Commercial Services & Supplies | 1,000 | 10,007 | |||||||||||
Shanghai Mechanical and Electrical Industry Co. Ltd., B | Machinery | 7,000 | 8,582 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., A | Health Care Providers & Services | 3,000 | 8,978 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., H | Health Care Providers & Services | 20,000 | 33,445 | |||||||||||
Shanghai Pudong Development Bank Co. Ltd., A | Banks | 45,000 | 62,265 | |||||||||||
Shanghai Putailai New Energy Technology Co. Ltd., A | Chemicals | 1,000 | 16,001 | |||||||||||
Shanghai RAAS Blood Products Co. Ltd., A | Biotechnology | 9,000 | 10,901 | |||||||||||
Shanghai Shibei Hi-Tech Co. Ltd., B | Real Estate Management & Development | 11,000 | 4,136 | |||||||||||
Shanghai Shimao Co. Ltd., A | Real Estate Management & Development | 10,000 | 9,077 | |||||||||||
Shanghai Tunnel Engineering Co. Ltd., A | Construction & Engineering | 6,000 | 4,969 |
176 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd. | Trading Companies & Distributors | 3,000 | $ | 2,901 | ||||||||||
Shanghai Yuyuan Tourist Mart Group Co. Ltd., A | Specialty Retail | 6,000 | 7,807 | |||||||||||
Shanghai Zhangjiang High-Tech Park Development Co. Ltd., A | Real Estate Management & Development | 2,000 | 5,591 | |||||||||||
Shanghai Zhenhua Port Machinery Co. Ltd., B | Machinery | 22,000 | 5,566 | |||||||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 6,000 | 5,393 | |||||||||||
Shanxi Securities Co. Ltd. | Capital Markets | 5,200 | 6,092 | |||||||||||
Shanxi Xinghuacun Fen Wine Factory Co. Ltd., A | Beverages | 1,300 | 37,966 | |||||||||||
Shenergy Co. Ltd., A | Independent Power and Renewable Electricity Producers | 9,000 | 7,294 | |||||||||||
Shengyi Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 4,000 | 13,745 | |||||||||||
Shennan Circuits Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,000 | 17,167 | |||||||||||
Shenwan Hongyuan Group Co. Ltd. | Capital Markets | 33,000 | 25,821 | |||||||||||
b,c | Shenwan Hongyuan Group Co. Ltd., 144A, Reg S | Capital Markets | 40,000 | 10,632 | ||||||||||
Shenzhen Agricultural Products Group Co. Ltd. | Food & Staples Retailing | 4,000 | 4,262 | |||||||||||
Shenzhen Airport Co. Ltd. | Transportation Infrastructure | 4,000 | 5,034 | |||||||||||
Shenzhen Energy Group Co. Ltd. | Independent Power and Renewable Electricity Producers | 8,000 | 6,319 | |||||||||||
Shenzhen Everwin Precision Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 1,000 | 3,514 | |||||||||||
Shenzhen Expressway Co. Ltd., H | Transportation Infrastructure | 20,000 | 17,368 | |||||||||||
Shenzhen Goodix Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 200 | 4,636 | |||||||||||
Shenzhen Hepalink Pharmaceutical Group Co. Ltd., A | Pharmaceuticals | 1,000 | 3,345 | |||||||||||
Shenzhen Huaqiang Industry Co. Ltd. | Real Estate Management & Development | 2,000 | 3,970 | |||||||||||
a | Shenzhen Infogem Technologies Co. Ltd., A | Software | 1,000 | 3,404 | ||||||||||
Shenzhen Inovance Technology Co. Ltd. | Machinery | 3,000 | 25,596 | |||||||||||
Shenzhen International Holdings Ltd. | Transportation Infrastructure | 20,000 | 31,690 | |||||||||||
Shenzhen Investment Ltd. | Real Estate Management & Development | 80,000 | 23,329 | |||||||||||
Shenzhen Kaifa Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,000 | 6,083 | |||||||||||
Shenzhen Kangtai Biological Products Co. Ltd. | Biotechnology | 1,000 | 26,820 | |||||||||||
Shenzhen Kingdom Sci-Tech Co. Ltd., A | Software | 1,000 | 2,660 | |||||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | Health Care Equipment & Supplies | 1,400 | 71,792 | |||||||||||
a | Shenzhen MTC Co. Ltd. | Household Durables | 8,000 | 7,285 | ||||||||||
a | Shenzhen Neptunus Bioengineering Co. Ltd. | Health Care Providers & Services | 6,000 | 3,625 | ||||||||||
Shenzhen Overseas Chinese Town Co. Ltd. | Hotels, Restaurants & Leisure | 11,000 | 10,990 | |||||||||||
Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 1,000 | 5,081 | |||||||||||
Shenzhen SC New Energy Technology Corp., A | Semiconductors & Semiconductor Equipment | 500 | 7,742 | |||||||||||
Shenzhen Sunway Communication Co. Ltd. | Communications Equipment | 2,000 | 16,065 | |||||||||||
Shenzhen YUTO Packaging Technology Co. Ltd., A | Containers & Packaging | 1,000 | 4,679 | |||||||||||
Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., A | Metals & Mining | 5,000 | 3,021 | |||||||||||
Shenzhou International Group Holdings Ltd. | Textiles, Apparel & Luxury Goods | 15,000 | 252,581 |
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FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
a | Shijiazhuang Changshan BeiMing Technology Co. Ltd. | Textiles, Apparel & Luxury Goods | 3,000 | $ | 3,351 | |||||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd. | Pharmaceuticals | 1,000 | 3,974 | |||||||||||
Shimao Group Holdings Ltd. | Real Estate Management & Development | 30,000 | 123,871 | |||||||||||
Shougang Fushan Resources Group Ltd. | Metals & Mining | 80,000 | 17,135 | |||||||||||
a | Siasun Robot & Automation Co. Ltd. | Machinery | 2,000 | 4,264 | ||||||||||
Sichuan Chuantou Energy Co Ltd | Independent Power and Renewable Electricity Producers | 6,000 | 8,673 | |||||||||||
Sichuan Expressway Co. Ltd., A | Transportation Infrastructure | 9,000 | 4,681 | |||||||||||
Sichuan Expressway Co. Ltd., H | Transportation Infrastructure | 20,000 | 4,619 | |||||||||||
Sichuan Kelun Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,000 | 6,548 | |||||||||||
Sichuan Swellfun Co. Ltd., A | Beverages | 1,000 | 9,504 | |||||||||||
Sieyuan Electric Co. Ltd. | Electrical Equipment | 1,000 | 3,507 | |||||||||||
a | SINA Corp. | Interactive Media & Services | 1,220 | 51,984 | ||||||||||
Sino-Ocean Land Holdings Ltd. | Real Estate Management & Development | 55,000 | 11,071 | |||||||||||
Sinochem International Corp., A | Trading Companies & Distributors | 6,000 | 4,536 | |||||||||||
Sinolink Securities Co. Ltd., A | Capital Markets | 5,000 | 11,265 | |||||||||||
Sinoma Science & Technology Co. Ltd. | Chemicals | 3,000 | 8,837 | |||||||||||
Sinopec Engineering Group Co. Ltd. | Construction & Engineering | 30,000 | 11,071 | |||||||||||
a | Sinopec Oilfield Service Corp. | Energy Equipment & Services | 40,000 | 2,555 | ||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., A | Chemicals | 5,000 | 2,453 | |||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., H | Chemicals | 80,000 | 14,555 | |||||||||||
Sinopharm Group Co. Ltd., H | Health Care Providers & Services | 28,000 | 58,746 | |||||||||||
Sinotrans Ltd., A | Air Freight & Logistics | 8,000 | 4,326 | |||||||||||
Sinotrans Ltd., H | Air Freight & Logistics | 50,000 | 11,935 | |||||||||||
Sinotruk Hong Kong Ltd. | Machinery | 15,000 | 38,439 | |||||||||||
a | Soho China Ltd. | Real Estate Management & Development | 35,000 | 9,439 | ||||||||||
Songcheng Performance Development Co. Ltd. | Hotels, Restaurants & Leisure | 3,660 | 9,837 | |||||||||||
SooChow Securities Co. Ltd., A | Capital Markets | 5,080 | 7,987 | |||||||||||
Southwest Securities Co. Ltd., A | Capital Markets | 11,000 | 8,526 | |||||||||||
Spring Airlines Co. Ltd., A | Airlines | 1,000 | 6,631 | |||||||||||
STO Express Co. Ltd. | Air Freight & Logistics | 2,000 | 4,441 | |||||||||||
Sunac China Holdings Ltd. | Real Estate Management & Development | 54,000 | 210,426 | |||||||||||
Sungrow Power Supply Co. Ltd. | Electrical Equipment | 2,000 | 8,102 | |||||||||||
Suning.com Co. Ltd. | Specialty Retail | 15,000 | 20,114 | |||||||||||
Sunny Optical Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 14,000 | 213,703 | |||||||||||
Sunwoda Electronic Co. Ltd., A | Electrical Equipment | 2,000 | 7,984 | �� | ||||||||||
Suofeiya Home Collection Co. Ltd. | Household Durables | 1,000 | 3,884 | |||||||||||
a | Suzhou Anjie Technology Co. Ltd., A | Electrical Equipment | 1,000 | 3,234 | ||||||||||
Suzhou Dongshan Precision Manufacturing Co. Ltd., A | Electronic Equipment, Instruments & Components | 2,000 | 7,780 | |||||||||||
Suzhou Gold Mantis Construction Decoration Co. Ltd. | Construction & Engineering | 3,000 | 4,275 | |||||||||||
a | Tahoe Group Co. Ltd. | Real Estate Management & Development | 5,000 | 3,183 | ||||||||||
Taiji Computer Corp. Ltd. | IT Services | 1,000 | 4,176 | |||||||||||
a | TAL Education Group, ADR | Diversified Consumer Services | 8,330 | 633,413 | ||||||||||
Tangshan Jidong Cement Co. Ltd. | Construction Materials | 3,000 | 6,856 | |||||||||||
TangShan Port Group Co. Ltd., A | Transportation Infrastructure | 7,000 | 2,568 | |||||||||||
TBEA Co. Ltd., A | Electrical Equipment | 8,000 | 10,350 | |||||||||||
TCL Corp. | Household Durables | 20,000 | 18,125 | |||||||||||
Tencent Holdings Ltd. | Interactive Media & Services | 122,700 | 8,098,200 | |||||||||||
a | Tencent Music Entertainment Group, ADR | Entertainment | 10,110 | 149,325 |
178 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
a | The China Pacific Securities Co. Ltd., A | Capital Markets | 10,000 | $ | 5,997 | |||||||||
The People’s Insurance Co. Group of China Ltd., H | Insurance | 180,000 | 53,187 | |||||||||||
Thunder Software Technology Co. Ltd. | Software | 1,000 | 12,696 | |||||||||||
Tian Di Science & Technology Co. Ltd., A | Machinery | 2,000 | 896 | |||||||||||
Tianfeng Securities Co. Ltd., A | Capital Markets | 11,250 | 10,726 | |||||||||||
Tianjin Chase Sun Pharmaceutical Co. Ltd. | Pharmaceuticals | 6,000 | 4,801 | |||||||||||
Tianjin Zhonghuan Semiconductor Co. Ltd. | Semiconductors & Semiconductor Equipment | 5,000 | 16,320 | |||||||||||
Tianma Microelectronics Co. Ltd. | Electronic Equipment, Instruments & Components | 3,000 | 6,529 | |||||||||||
a | Tianqi Lithium Corp. | Chemicals | 2,480 | 7,265 | ||||||||||
Tianshui Huatian Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 4,000 | 8,075 | |||||||||||
Times China Holdings Ltd. | Real Estate Management & Development | 20,000 | 27,665 | |||||||||||
Times Neighborhood Holdings Ltd. | Commercial Services & Supplies | 6,153 | 8,130 | |||||||||||
a,b | Tongcheng-Elong Holdings Ltd., Reg S | Internet & Direct Marketing Retail | 20,000 | 36,387 | ||||||||||
a | TongFu Microelectronics Co. Ltd., A | Semiconductors & Semiconductor Equipment | 2,000 | 6,746 | ||||||||||
Tonghua Dongbao Pharmaceutical Co. Ltd. | Pharmaceuticals | 4,000 | 8,022 | |||||||||||
Tongkun Group Co. Ltd., A | Chemicals | 3,000 | 6,114 | |||||||||||
Tongling Nonferrous Metals Group Co. Ltd. | Metals & Mining | 20,000 | 6,572 | |||||||||||
Tongwei Co. Ltd., A | Food Products | 7,000 | 27,417 | |||||||||||
a | Topchoice Medical Investment Corp., A | Health Care Providers & Services | 500 | 15,745 | ||||||||||
Topsports International Holdings Ltd. | Specialty Retail | 30,000 | 41,419 | |||||||||||
TravelSky Technology Ltd., H | IT Services | 20,000 | 42,684 | |||||||||||
a | Trip.com Group Ltd., ADR | Internet & Direct Marketing Retail | 10,350 | 322,299 | ||||||||||
Tsingtao Brewery Co. Ltd., A | Beverages | 1,000 | 11,068 | |||||||||||
Tsingtao Brewery Co. Ltd., H | Beverages | 9,000 | 73,219 | |||||||||||
a | Tunghsu Optoelectronic Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 10,000 | 4,465 | ||||||||||
Unigroup Guoxin Microelectronics Co. Ltd. | Semiconductors & Semiconductor Equipment | 1,000 | 17,503 | |||||||||||
Unisplendour Corp. Ltd. | Electronic Equipment, Instruments & Components | 1,800 | 6,745 | |||||||||||
Universal Scientific Industrial Shanghai Co. Ltd., A | Electronic Equipment, Instruments & Components | 2,000 | 7,521 | |||||||||||
Valiant Co. Ltd. | Chemicals | 2,000 | 5,340 | |||||||||||
Venustech Group Inc. | Software | 1,000 | 5,088 | |||||||||||
a | Vipshop Holdings Ltd., ADR | Internet & Direct Marketing Retail | 9,180 | 143,575 | ||||||||||
Walvax Biotechnology Co. Ltd. | Biotechnology | 2,000 | 14,995 | |||||||||||
a | Wanda Film Holding Co. Ltd., A | Entertainment | 3,000 | 7,869 | ||||||||||
Wangfujing Group Co. Ltd., A | Multiline Retail | 1,000 | 7,080 | |||||||||||
Wangsu Science & Technology Co. Ltd. | IT Services | 4,000 | 4,739 | |||||||||||
Wanhua Chemical Group Co. Ltd., A | Chemicals | 5,000 | 51,059 | |||||||||||
Wanxiang Qianchao Co. Ltd. | Auto Components | 5,000 | 4,310 | |||||||||||
a | Weibo Corp., ADR | Interactive Media & Services | 1,220 | 44,445 | ||||||||||
Weichai Power Co. Ltd., A | Machinery | 9,000 | 20,026 | |||||||||||
Weichai Power Co. Ltd., H | Machinery | 40,000 | 80,103 | |||||||||||
Weifu High-Technology Co. Ltd., B | Auto Components | 4,000 | 6,906 | |||||||||||
Weihai Guangwei Composites Co. Ltd., A | Chemicals | 1,000 | 10,511 | |||||||||||
Wens Foodstuffs Group Co. Ltd. | Food Products | 2,400 | 6,910 | |||||||||||
Western Securities Co. Ltd. | Capital Markets | 6,000 | 8,399 | |||||||||||
Westone Information Industry Inc. | Electronic Equipment, Instruments & Components | 1,000 | 2,725 | |||||||||||
Will Semiconductor Ltd., A | Semiconductors & Semiconductor Equipment | 1,000 | 26,136 | |||||||||||
Wingtech Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 2,000 | 34,440 | |||||||||||
Winning Health Technology Group Co. Ltd. | Health Care Technology | 3,900 | 11,172 | |||||||||||
Wolong Electric Group Co. Ltd., A | Electrical Equipment | 2,000 | 3,581 | |||||||||||
a | Wonders Information Co. Ltd. | IT Services | 2,000 | 7,038 | ||||||||||
Wuchan Zhongda Group Co. Ltd., A | Distributors | 8,000 | 5,446 | |||||||||||
Wuhan Guide Infrared Co. Ltd. | Electronic Equipment, Instruments & Components | 3,070 | 15,639 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 2,000 | 11,697 | |||||||||||
Wuliangye Yibin Co. Ltd., A | Beverages | 6,000 | 195,394 |
franklintempleton.com | Semiannual Report | 179 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
WUS Printed Circuit Kunshan Co. Ltd. | Electronic Equipment, Instruments & Components | 4,000 | $ | 11,075 | ||||||||||
WuXi AppTec Co. Ltd., A | Life Sciences Tools & Services | 1,400 | 20,939 | |||||||||||
WuXi AppTec Co. Ltd., H | Life Sciences Tools & Services | 6,000 | 86,168 | |||||||||||
a | WuXi Biologics (Cayman) Inc. | Life Sciences Tools & Services | 20,500 | 498,877 | ||||||||||
Wuxi Lead Intelligent Equipment Co. Ltd. | Electronic Equipment, Instruments & Components | 1,000 | 7,131 | |||||||||||
XCMG Construction Machinery Co. Ltd. | Machinery | 13,000 | 10,632 | |||||||||||
Xiamen C & D Inc., A | Trading Companies & Distributors | 5,000 | 6,307 | |||||||||||
Xiamen ITG Group Corp. Ltd., A | Trading Companies & Distributors | 4,000 | 3,979 | |||||||||||
Xiamen Meiya Pico Information Co. Ltd. | Electronic Equipment, Instruments & Components | 1,000 | 2,931 | |||||||||||
Xiamen Tungsten Co. Ltd., A | Metals & Mining | 2,000 | 3,946 | |||||||||||
a | Xiaomi Corp., B | Technology Hardware, Storage & Peripherals | 260,000 | 686,065 | ||||||||||
Xinhu Zhongbao Co. Ltd., A | Real Estate Management & Development | 13,000 | 6,456 | |||||||||||
Xinhua Winshare Publishing and Media Co. Ltd., H | Distributors | 10,000 | 6,310 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd. | Electrical Equipment | 5,000 | 7,537 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd., H | Electrical Equipment | 14,000 | 12,212 | |||||||||||
Xinxing Ductile Iron Pipes Co. Ltd. | Metals & Mining | 7,000 | 3,703 | |||||||||||
Xinyi Solar Holdings Ltd. | Semiconductors & Semiconductor Equipment | 80,000 | 126,761 | |||||||||||
Xuji Electric Co. Ltd. | Electrical Equipment | 2,000 | 4,061 | |||||||||||
Yango Group Co. Ltd. | Real Estate Management & Development | 7,000 | 7,540 | |||||||||||
b | Yangtze Optical Fibre and Cable Joint Stock Ltd. Co., H, Reg S | Communications Equipment | 5,000 | 7,677 | ||||||||||
Yantai Changyu Pioneer Wine Co. Ltd., B | Beverages | 4,000 | 7,726 | |||||||||||
Yantai Eddie Precision Machinery Co. Ltd., A | Machinery | 900 | 7,797 | |||||||||||
Yantai Jereh Oilfield Services Group Co. Ltd. | Energy Equipment & Services | 2,000 | 8,777 | |||||||||||
Yanzhou Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 4,000 | 5,458 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 40,000 | 29,729 | |||||||||||
Yealink Network Technology Corp. Ltd. | Communications Equipment | 1,600 | 14,219 | |||||||||||
Yifan Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,000 | 7,368 | |||||||||||
Yifeng Pharmacy Chain Co. Ltd. | Food & Staples Retailing | 800 | 11,706 | |||||||||||
Yihai International Holding Ltd. | Food Products | 10,000 | 156,000 | |||||||||||
Yintai Gold Co. Ltd. | Metals & Mining | 4,200 | 6,486 | |||||||||||
Yonghui Superstores Co. Ltd., A | Food & Staples Retailing | 14,000 | 16,153 | |||||||||||
Yonyou Network Technology Co. Ltd., A | Software | 4,990 | 28,096 | |||||||||||
Yotrio Group Co. Ltd. | Leisure Products | 2,000 | 1,270 | |||||||||||
Youngor Group Co. Ltd., A | Real Estate Management & Development | 8,000 | 8,040 | |||||||||||
a | Youzu Interactive Co. Ltd. | Entertainment | 1,000 | 2,576 | ||||||||||
YTO Express Group Co. Ltd., A | Air Freight & Logistics | 4,000 | 8,240 | |||||||||||
a | Yuan Longping High-tech Agriculture Co. Ltd. | Food Products | 2,000 | 5,396 | ||||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 140,000 | 27,277 | |||||||||||
Yunda Holding Co. Ltd. | Air Freight & Logistics | 2,300 | 6,348 | |||||||||||
a | Yunnan Aluminium Co. Ltd. | Metals & Mining | 3,000 | 2,193 | ||||||||||
Yunnan Baiyao Group Co. Ltd. | Pharmaceuticals | 2,000 | 30,049 | |||||||||||
a | Yunnan Copper Co. Ltd. | Metals & Mining | 3,000 | 6,039 | ||||||||||
Yunnan Energy New Material Co. Ltd. | Containers & Packaging | 1,000 | 13,479 | |||||||||||
Yunnan Hongxiang Yixintang Pharmaceutical Co. Ltd. | Food & Staples Retailing | 1,000 | 5,770 | |||||||||||
a | Zai Lab Ltd., ADR | Biotechnology | 1,250 | 103,962 | ||||||||||
Zhangzhou Pientzehuang Pharmaceutical Co. Ltd., A | Pharmaceuticals | 1,000 | 35,855 | |||||||||||
Zhaojin Mining Industry Co. Ltd., H | Metals & Mining | 20,000 | 24,361 | |||||||||||
a | Zhefu Holding Group Co. Ltd. | Electrical Equipment | 8,000 | 5,776 | ||||||||||
a | Zhejiang Century Huatong Group Co. Ltd., A | Entertainment | 11,000 | 15,431 | ||||||||||
Zhejiang Chint Electrics Co. Ltd., A | Electrical Equipment | 2,000 | 8,921 | |||||||||||
a | Zhejiang Conba Pharmaceutical Co. Ltd., A | Pharmaceuticals | 6,000 | 4,606 |
180 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Zhejiang Crystal-Optech Co. Ltd. | Electronic Equipment, Instruments & Components | 2,000 | $ | 4,005 | ||||||||||
Zhejiang Dahua Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 5,000 | 15,104 | |||||||||||
Zhejiang Dingli Machinery Co. Ltd. | Machinery | 1,000 | 14,610 | |||||||||||
Zhejiang Expressway Co. Ltd., H | Transportation Infrastructure | 40,000 | 28,852 | |||||||||||
Zhejiang Huahai Pharmaceutical Co. Ltd., A | Pharmaceuticals | 2,200 | 10,397 | |||||||||||
a | Zhejiang Huayou Cobalt Co. Ltd., A | Metals & Mining | 2,000 | 10,224 | ||||||||||
Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., A | Semiconductors & Semiconductor Equipment | 1,900 | 8,581 | |||||||||||
Zhejiang Juhua Co. Ltd., A | Chemicals | 3,000 | 3,019 | |||||||||||
Zhejiang Longsheng Group Co. Ltd., A | Chemicals | 6,000 | 12,015 | |||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 3,000 | 13,169 | |||||||||||
Zhejiang Sanhua Intelligent Controls Co. Ltd. | Machinery | 5,000 | 16,356 | |||||||||||
Zhejiang Satellite Petrochemical Co. Ltd. | Chemicals | 2,000 | 5,974 | |||||||||||
Zhejiang Supor Co. Ltd. | Household Durables | 400 | 4,656 | |||||||||||
Zhejiang Wanfeng Auto Wheel Co. Ltd. | Auto Components | 4,000 | 3,996 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd. | Building Products | 2,000 | 4,712 | |||||||||||
Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., A | Pharmaceuticals | 1,000 | 8,284 | |||||||||||
Zhejiang Yasha Decoration Co. Ltd. | Diversified Consumer Services | 3,000 | 4,394 | |||||||||||
Zhejiang Yongtai Technology Co. Ltd. | Chemicals | 2,000 | 3,100 | |||||||||||
Zhengzhou Yutong Bus Co. Ltd., A | Machinery | 3,000 | 6,949 | |||||||||||
Zheshang Securities Co. Ltd., A | Capital Markets | 2,000 | 5,219 | |||||||||||
a,b | ZhongAn Online P&C Insurance Co. Ltd., Reg S | Insurance | 7,000 | 34,594 | ||||||||||
Zhongji Innolight Co. Ltd. | Communications Equipment | 1,000 | 7,412 | |||||||||||
Zhongjin Gold Corp. Ltd., A | Metals & Mining | 7,000 | 10,366 | |||||||||||
Zhongsheng Group Holdings Ltd. | Specialty Retail | 13,000 | 81,103 | |||||||||||
Zhuzhou CRRC Times Electric Co. Ltd., H | Electrical Equipment | 12,000 | 40,103 | |||||||||||
Zijin Mining Group Co. Ltd., A | Metals & Mining | 28,000 | 25,375 | |||||||||||
Zijin Mining Group Co. Ltd., H | Metals & Mining | 130,000 | 82,194 | |||||||||||
a | Zoomlion Heavy Industry Science and Technology Co. Ltd. | Machinery | 10,000 | 11,951 | ||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. | Machinery | 28,000 | 26,880 | |||||||||||
ZTE Corp. | Communications Equipment | 6,000 | 29,265 | |||||||||||
ZTE Corp., H | Communications Equipment | 16,000 | 38,070 | |||||||||||
ZTO Express Cayman Inc., ADR | Air Freight & Logistics | 8,800 | 263,296 | |||||||||||
|
| |||||||||||||
57,135,983 | ||||||||||||||
|
| |||||||||||||
Hong Kong 0.6% | ||||||||||||||
a | Alibaba Pictures Group Ltd. | Entertainment | 300,000 | 44,516 | ||||||||||
Kingboard Laminates Holdings Ltd. | Chemicals | 25,000 | 34,194 | |||||||||||
Sino Biopharmaceutical Ltd. | Pharmaceuticals | 210,000 | 228,697 | |||||||||||
|
| |||||||||||||
307,407 | ||||||||||||||
|
| |||||||||||||
Singapore 0.1% | ||||||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | Machinery | 51,000 | 36,986 | |||||||||||
Yanlord Land Group Ltd. | Real Estate Management & Development | 13,000 | 10,761 | |||||||||||
|
| |||||||||||||
47,747 | ||||||||||||||
|
| |||||||||||||
United States 0.0% | ||||||||||||||
e | Legend Holdings Corp., rts., 2/20/49 | Technology Hardware, Storage & Peripherals | 830 | — | ||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $47,346,097) | 57,491,137 | |||||||||||||
|
|
franklintempleton.com | Semiannual Report | 181 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
Industry | Shares | Value | ||||||||||||
Short Term Investments 0.3% | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.3% | ||||||||||||||
United States 0.3% | ||||||||||||||
f,g | Institutional Fiduciary Trust Portfolio, 0.00% | Money Market Funds | 188,560 | $ | 188,560 | |||||||||
|
| |||||||||||||
Total Investments (Cost $47,534,657) 100.1% | 57,679,697 | |||||||||||||
Other Assets, less Liabilities (0.1)% | (38,771 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 57,640,926 | ||||||||||||
|
|
See Abbreviation on page 331.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $3,469,771, representing 6.0% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $1,037,113, representing 1.8% of net assets.
dA portion or all of the security is on loan at September 30, 2020 Note 1(d).
eFair valued using significant unobservable inputs. See Note 8 regarding fair value measurements.
fThe rate shown is the annualized seven-day effective yield at period end.
gSee Note 3(c) regarding investments in affiliated management investment companies.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
MSCI Emerging Markets Index | Long | 2 | $ | 107,160 | 12/18/20 | $ | 1,957 |
*As of period end.
See Note 8 regarding other derivative information.
182 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 19.03 | $ | 23.24 | $ | 24.98 | $ | 25.05 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.34 | 0.76 | 0.86 | 0.24 | ||||||||||||
Net realized and unrealized gains (losses) | 3.74 | (4.21 | ) | (1.79 | ) | (0.30 | ) | |||||||||
|
| |||||||||||||||
Total from investment operations | 4.08 | (3.45 | ) | (0.93 | ) | (0.06 | ) | |||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.20 | ) | (0.76 | ) | (0.81 | ) | (0.01 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 22.91 | $ | 19.03 | $ | 23.24 | $ | 24.98 | ||||||||
|
| |||||||||||||||
Total returnd | 21.42% | (15.44)% | (3.69)% | (0.26)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Expenses net of waiver and payments by affiliates | —% | 0.09% | —% | —% | ||||||||||||
Net investment income | 3.13% | 3.23% | 3.61% | 2.35% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $210,807 | $91,356 | $74,359 | $104,911 | ||||||||||||
Portfolio turnover ratef | 2.60% | g | 4.47% | g | 5.81% | 0.96% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 2.55% | 4.47% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 183 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests 98.7% | ||||||||||||||
Australia 1.0% | ||||||||||||||
a | Glencore PLC | Metals & Mining | 257,554 | $ | 535,942 | |||||||||
Rio Tinto PLC | Metals & Mining | 25,898 | 1,558,704 | |||||||||||
|
| |||||||||||||
2,094,646 | ||||||||||||||
|
| |||||||||||||
Austria 0.2% | ||||||||||||||
Andritz AG | Machinery | 1,702 | 52,611 | |||||||||||
a | Erste Group Bank AG | Banks | 6,854 | 143,668 | ||||||||||
a | OMV AG | Oil, Gas & Consumable Fuels | 3,404 | 93,406 | ||||||||||
a | Raiffeisen Bank International AG | Banks | 3,128 | 47,941 | ||||||||||
Telekom Austria AG | Diversified Telecommunication Services | 3,312 | 23,419 | |||||||||||
Verbund AG | Electric Utilities | 1,564 | 85,612 | |||||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | Insurance | 920 | 20,476 | |||||||||||
Voestalpine AG | Metals & Mining | 2,714 | 71,608 | |||||||||||
|
| |||||||||||||
538,741 | ||||||||||||||
|
| |||||||||||||
Belgium 1.5% | ||||||||||||||
a | Ackermans & van Haaren NV | Diversified Financial Services | 552 | 71,657 | ||||||||||
Ageas SA/NV | Insurance | 4,324 | 176,759 | |||||||||||
Anheuser-Busch InBev SA/NV | Beverages | 19,872 | 1,077,177 | |||||||||||
Colruyt SA | Food & Staples Retailing | 1,288 | 83,614 | |||||||||||
Elia Group SA/NV | Electric Utilities | 828 | 82,725 | |||||||||||
a | Galapagos NV | Biotechnology | 1,150 | 163,444 | ||||||||||
Groupe Bruxelles Lambert SA | Diversified Financial Services | 2,576 | 232,537 | |||||||||||
KBC Groep NV | Banks | 6,578 | 330,069 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 3,358 | 61,331 | |||||||||||
Sofina SA | Diversified Financial Services | 368 | 100,548 | |||||||||||
Solvay SA | Chemicals | 1,656 | 142,653 | |||||||||||
Telenet Group Holding NV | Media | 1,104 | 42,903 | |||||||||||
UCB SA | Pharmaceuticals | 2,852 | 324,407 | |||||||||||
Umicore SA | Chemicals | 4,876 | 203,269 | |||||||||||
|
| |||||||||||||
3,093,093 | ||||||||||||||
|
| |||||||||||||
China 0.4% | ||||||||||||||
a | Prosus NV | Internet & Direct Marketing Retail | 10,304 | 950,931 | ||||||||||
|
| |||||||||||||
Denmark 3.9% | ||||||||||||||
A.P. Moeller-Maersk AS, A | Marine | 92 | 135,295 | |||||||||||
Ambu AS, B | Health Care Equipment & Supplies | 4,002 | 113,483 | |||||||||||
AP Moeller-Maersk A/S, B | Marine | 138 | 219,139 | |||||||||||
Carlsberg AS, B | Beverages | 2,392 | 322,563 | |||||||||||
Chr. Hansen Holding AS | Chemicals | 2,438 | 271,079 | |||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 3,174 | 501,770 | |||||||||||
a | Danske Bank AS | Banks | 15,824 | 214,635 | ||||||||||
DSV Panalpina A/S | Air Freight & Logistics | 4,830 | 789,433 | |||||||||||
a | Genmab A/S | Biotechnology | 1,426 | 516,687 | ||||||||||
GN Store Nord AS | Health Care Equipment & Supplies | 3,082 | 233,441 | |||||||||||
H. Lundbeck AS | Pharmaceuticals | 1,426 | 47,063 | |||||||||||
a | ISS AS | Commercial Services & Supplies | 4,600 | 60,799 | ||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 38,594 | 2,671,226 | |||||||||||
Novozymes AS | Chemicals | 4,876 | 307,182 | |||||||||||
Orsted AS | Electric Utilities | 4,508 | 621,685 | |||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 2,162 | 155,889 | |||||||||||
Rockwool International AS, B | Building Products | 138 | 53,046 | |||||||||||
Tryg AS | Insurance | 2,898 | 91,491 | |||||||||||
Vestas Wind Systems AS | Electrical Equipment | 4,692 | 761,334 |
184 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Denmark (continued) | ||||||||||||||
a | William Demant Holding AS | Health Care Equipment & Supplies | 2,576 | $ | 80,960 | |||||||||
|
| |||||||||||||
8,168,200 | ||||||||||||||
|
| |||||||||||||
Finland 2.3% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 3,404 | 200,703 | |||||||||||
b | Fortum OYJ, Reg S | Electric Utilities | 10,396 | 210,597 | ||||||||||
Huhtamaki OYJ | Containers & Packaging | 2,254 | 111,488 | |||||||||||
Kesko OYJ | Food & Staples Retailing | 6,440 | 166,141 | |||||||||||
Kojamo Oyj | Real Estate Management & Development | 4,324 | 92,994 | |||||||||||
Kone OYJ, B | Machinery | 9,384 | 825,972 | |||||||||||
Metso Outotec Oyj | Machinery | 14,422 | 101,387 | |||||||||||
Neles Oyj | Machinery | 2,530 | 34,281 | |||||||||||
Neste Oil OYJ | Oil, Gas & Consumable Fuels | 9,890 | 521,540 | |||||||||||
a | Nokia OYJ, A | Communications Equipment | 133,998 | 526,395 | ||||||||||
Nokian Renkaat OYJ | Auto Components | 3,220 | 91,189 | |||||||||||
a | Nordea Bank Abp | Banks | 77,142 | 586,818 | ||||||||||
Orion OYJ | Pharmaceuticals | 2,438 | 110,555 | |||||||||||
Sampo Oyj, A | Insurance | 12,098 | 479,370 | |||||||||||
Stora Enso OYJ, R | Paper & Forest Products | 13,754 | 215,721 | |||||||||||
UPM-Kymmene OYJ | Paper & Forest Products | 12,742 | 388,340 | |||||||||||
Wartsila OYJ ABP | Machinery | 11,730 | 92,407 | |||||||||||
|
| |||||||||||||
4,755,898 | ||||||||||||||
|
| |||||||||||||
France 15.8% | ||||||||||||||
a | Accor SA | Hotels, Restaurants & Leisure | 4,462 | 125,577 | ||||||||||
a | Adevinta ASA, B | Interactive Media & Services | 5,520 | 94,570 | ||||||||||
Aeroports de Paris SA | Transportation Infrastructure | 690 | 69,059 | |||||||||||
Air Liquide SA | Chemicals | 11,132 | 1,768,810 | |||||||||||
a | Airbus SE | Aerospace & Defense | 13,248 | 964,274 | ||||||||||
c | ALD SA, 144A | Road & Rail | 2,070 | 19,225 | ||||||||||
a | Alstom SA | Machinery | 4,462 | 222,480 | ||||||||||
a | Amundi SA | Capital Markets | 1,334 | 94,172 | ||||||||||
a | ArcelorMittal SA | Metals & Mining | 16,928 | 225,980 | ||||||||||
Arkema SA | Chemicals | 1,610 | 171,088 | |||||||||||
a | Atos SE | IT Services | 2,254 | 181,849 | ||||||||||
AXA SA | Insurance | 45,954 | 850,137 | |||||||||||
Biomerieux | Health Care Equipment & Supplies | 1,012 | 158,783 | |||||||||||
a | BNP Paribas SA | Banks | 25,852 | 939,018 | ||||||||||
Bollore | Entertainment | 23,046 | 86,155 | |||||||||||
Bouygues SA | Construction & Engineering | 5,060 | 175,754 | |||||||||||
a | Bureau Veritas SA | Professional Services | 6,532 | 147,527 | ||||||||||
Capgemini SE | IT Services | 3,772 | 485,450 | |||||||||||
Carrefour SA | Food & Staples Retailing | 13,878 | 222,385 | |||||||||||
a | Casino Guichard-Perrachon SA | Food & Staples Retailing | 1,334 | 32,460 | ||||||||||
Cie Generale des Etablissements Michelin SCA | Auto Components | 4,186 | 450,227 | |||||||||||
a | CNP Assurances | Insurance | 3,542 | 44,360 | ||||||||||
a | Compagnie de Saint-Gobain | Building Products | 11,638 | 491,440 | ||||||||||
Covivio | Equity Real Estate Investment Trusts (REITs | ) | 1,196 | 84,290 | ||||||||||
a | Credit Agricole SA | Banks | 27,646 | 242,235 | ||||||||||
Danone SA | Food Products | 14,398 | 932,325 | |||||||||||
a | Dassault Aviation SA | Aerospace & Defense | 46 | 39,108 | ||||||||||
Dassault Systemes | Software | 3,128 | 585,971 | |||||||||||
Edenred | IT Services | 5,934 | 267,207 | |||||||||||
EDF SA | Electric Utilities | 12,339 | 130,600 | |||||||||||
a | Eiffage SA | Construction & Engineering | 1,840 | 150,649 | ||||||||||
a | Engie SA | Multi-Utilities | 39,606 | 530,390 |
franklintempleton.com | Semiannual Report | 185 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
France (continued) | ||||||||||||||
a | EssilorLuxottica SA | Textiles, Apparel & Luxury Goods | 7,038 | $ | 958,599 | |||||||||
a | Eurazeo SE | Diversified Financial Services | 1,064 | 57,644 | ||||||||||
a | Faurecia SE | Auto Components | 1,794 | 77,670 | ||||||||||
Gecina SA | Equity Real Estate Investment Trusts (REITs | ) | 1,242 | 164,140 | ||||||||||
a | Getlink SE | Transportation Infrastructure | 10,902 | 148,297 | ||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 736 | 635,393 | |||||||||||
ICADE | Equity Real Estate Investment Trusts (REITs | ) | 736 | 41,358 | ||||||||||
Iliad SA | Diversified Telecommunication Services | 368 | 67,773 | |||||||||||
Imerys SA | Construction Materials | 874 | 32,551 | |||||||||||
a | Ingenico Group SA | Electronic Equipment, Instruments & Components | 1,472 | 228,369 | ||||||||||
Ipsen SA | Pharmaceuticals | 828 | 86,949 | |||||||||||
a | JCDecaux SA | Media | 1,748 | 30,275 | ||||||||||
Kering SA | Textiles, Apparel & Luxury Goods | 1,794 | 1,194,080 | |||||||||||
Klepierre SA | Equity Real Estate Investment Trusts (REITs | ) | 4,600 | 64,649 | ||||||||||
L’Oreal SA | Personal Products | 5,750 | 1,871,785 | |||||||||||
La Francaise des Jeux SAEM | Hotels, Restaurants & Leisure | 2,116 | 77,963 | |||||||||||
Legrand SA | Electrical Equipment | 6,394 | 511,209 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | Textiles, Apparel & Luxury Goods | 5,934 | 2,779,228 | |||||||||||
a | Natixis SA | Capital Markets | 20,102 | 45,318 | ||||||||||
Orange SA | Diversified Telecommunication Services | 45,678 | 475,866 | |||||||||||
a | Orpea | Health Care Providers & Services | 1,150 | 130,890 | ||||||||||
Pernod Ricard SA | Beverages | 5,014 | 800,517 | |||||||||||
a | Peugeot SA | Automobiles | 13,064 | 237,452 | ||||||||||
Plastic Omnium SA | Auto Components | 1,288 | 34,074 | |||||||||||
Publicis Groupe | Media | 5,356 | 173,222 | |||||||||||
Remy Cointreau SA | Beverages | 598 | 109,254 | |||||||||||
a | Renault SA | Automobiles | 4,416 | 114,935 | ||||||||||
a | Rexel SA | Trading Companies & Distributors | 7,268 | 91,535 | ||||||||||
Rubis SCA | Gas Utilities | 2,213 | 88,855 | |||||||||||
a | Safran SA | Aerospace & Defense | 7,682 | 760,661 | ||||||||||
Sanofi | Pharmaceuticals | 25,990 | 2,600,618 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 552 | 190,696 | |||||||||||
Schneider Electric SE | Electrical Equipment | 12,558 | 1,561,708 | |||||||||||
a | SCOR SE | Insurance | 3,680 | 102,101 | ||||||||||
SEB SA | Household Durables | 644 | 104,895 | |||||||||||
a | Societe Generale SA | Banks | 18,538 | 246,037 | ||||||||||
Sodexo SA | Hotels, Restaurants & Leisure | 2,070 | 148,119 | |||||||||||
Suez SA | Multi-Utilities | 9,016 | 167,100 | |||||||||||
Teleperformance | Professional Services | 1,380 | 426,573 | |||||||||||
Thales SA | Aerospace & Defense | 2,392 | 179,968 | |||||||||||
Total SE | Oil, Gas & Consumable Fuels | 57,868 | 1,981,481 | |||||||||||
a | Ubisoft Entertainment SA | Entertainment | 2,208 | 199,525 | ||||||||||
Unibail-Rodamco-Westfield | Equity Real Estate Investment Trusts (REITs | ) | 3,220 | 118,942 | ||||||||||
Valeo SA | Auto Components | 5,750 | 176,997 | |||||||||||
Veolia Environnement SA | Multi-Utilities | 12,052 | 260,326 | |||||||||||
Vinci SA | Construction & Engineering | 11,086 | 929,760 | |||||||||||
Vivendi SA | Entertainment | 19,182 | 535,352 | |||||||||||
Wendel SE | Diversified Financial Services | 644 | 58,489 | |||||||||||
a,b | Worldline SA, Reg S | IT Services | 3,496 | 287,463 | ||||||||||
|
| |||||||||||||
33,350,216 | ||||||||||||||
|
| |||||||||||||
Germany 14.4% | ||||||||||||||
1&1 Drillisch AG | Wireless Telecommunication Services | 1,150 | 25,508 | |||||||||||
a | Adidas AG | Textiles, Apparel & Luxury Goods | 4,600 | 1,489,337 | ||||||||||
Allianz SE | Insurance | 9,936 | 1,906,411 | |||||||||||
a | Aroundtown SA | Real Estate Management & Development | 28,566 | 143,706 |
186 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Germany (continued) | ||||||||||||||
BASF SE | Chemicals | 21,850 | $ | 1,331,853 | ||||||||||
Bayer AG | Pharmaceuticals | 23,506 | 1,469,454 | |||||||||||
Bayerische Motoren Werke AG | Automobiles | 7,682 | 558,425 | |||||||||||
Bechtle AG | IT Services | 644 | 130,572 | |||||||||||
Beiersdorf AG | Personal Products | 2,392 | 272,083 | |||||||||||
Brenntag AG | Trading Companies & Distributors | 3,726 | 237,253 | |||||||||||
Carl Zeiss Meditec AG | Health Care Equipment & Supplies | 874 | 110,689 | |||||||||||
a | Commerzbank AG | Banks | 25,116 | 123,494 | ||||||||||
Continental AG | Auto Components | 2,622 | 284,347 | |||||||||||
Covestro AG | Chemicals | 4,094 | 203,315 | |||||||||||
a | CTS Eventim AG & Co. KGaA | Entertainment | 1,426 | 69,028 | ||||||||||
Daimler AG | Automobiles | 19,320 | 1,042,951 | |||||||||||
a | Delivery Hero SE | Internet & Direct Marketing Retail | 3,358 | 386,373 | ||||||||||
a | Deutsche Bank AG | Capital Markets | 49,266 | 415,379 | ||||||||||
Deutsche Boerse AG | Capital Markets | 4,416 | 775,728 | |||||||||||
a | Deutsche Lufthansa AG | Airlines | 7,176 | 61,934 | ||||||||||
Deutsche Post AG | Air Freight & Logistics | 23,368 | 1,065,957 | |||||||||||
Deutsche Telekom AG | Diversified Telecommunication Services | 77,142 | 1,292,682 | |||||||||||
Deutsche Wohnen AG | Real Estate Management & Development | 8,326 | 416,803 | |||||||||||
a,c | DWS Group GmbH & Co. KGaA, 144A | Capital Markets | 828 | 28,541 | ||||||||||
E.ON SE | Multi-Utilities | 51,612 | 570,609 | |||||||||||
Evonik Industries AG | Chemicals | 4,508 | 116,828 | |||||||||||
a | Fielmann AG | Specialty Retail | 552 | 44,340 | ||||||||||
a | Fraport AG Frankfurt Airport Services Worldwide | Transportation Infrastructure | 828 | 32,799 | ||||||||||
Fresenius Medical Care AG & Co. KGaA | Health Care Providers & Services | 4,876 | 411,799 | |||||||||||
Fresenius SE and Co. KGaA | Health Care Providers & Services | 9,706 | 441,953 | |||||||||||
Fuchs Petrolub SE | Chemicals | 782 | 29,344 | |||||||||||
GEA Group AG | Machinery | 3,910 | 137,598 | |||||||||||
Grenkeleasing AG | Consumer Finance | 644 | 23,819 | |||||||||||
Hannover Rueck SE | Insurance | 1,426 | 221,065 | |||||||||||
HeidelbergCement AG | Construction Materials | 3,588 | 220,135 | |||||||||||
a | Hella GmbH & Co. KGaA | Auto Components | 1,058 | 53,373 | ||||||||||
a | HelloFresh SE | Internet & Direct Marketing Retail | 3,404 | 189,925 | ||||||||||
Henkel AG & Co. KGaA | Household Products | 2,438 | 228,428 | |||||||||||
Hochtief AG | Construction & Engineering | 460 | 35,845 | |||||||||||
Infineon Technologies AG | Semiconductors & Semiconductor Equipment | 31,050 | 878,046 | |||||||||||
KION Group AG | Machinery | 1,702 | 146,056 | |||||||||||
Knorr-Bremse AG | Machinery | 1,564 | 184,576 | |||||||||||
Lanxess AG | Chemicals | 2,024 | 116,180 | |||||||||||
LEG Immobilien AG | Real Estate Management & Development | 1,656 | 236,525 | |||||||||||
Merck KGaA | Pharmaceuticals | 3,082 | 450,137 | |||||||||||
METRO AG | Food & Staples Retailing | 4,094 | 40,903 | |||||||||||
MTU Aero Engines AG | Aerospace & Defense | 1,242 | 206,813 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | Insurance | 3,358 | 852,919 | |||||||||||
Nemetschek AG | Software | 1,288 | 94,398 | |||||||||||
a | Osram Licht AG | Electrical Equipment | 690 | 41,136 | ||||||||||
a | ProSiebenSat.1 Media SE | Media | 3,680 | 48,354 | ||||||||||
a | Puma SE | Textiles, Apparel & Luxury Goods | 1,978 | 178,277 | ||||||||||
Rational AG | Machinery | 92 | 72,174 | |||||||||||
Rheinmetall AG | Industrial Conglomerates | 1,058 | 95,233 | |||||||||||
RWE AG | Multi-Utilities | 15,042 | 564,096 | |||||||||||
SAP SE | Software | 26,818 | 4,175,055 | |||||||||||
b | Scout24 AG, Reg S | Interactive Media & Services | 2,438 | 212,990 | ||||||||||
Siemens AG | Industrial Conglomerates | 18,262 | 2,310,244 | |||||||||||
a | Siemens Energy AG | Electrical Equipment | 9,131 | 246,272 |
franklintempleton.com | Semiannual Report | 187 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Germany (continued) | ||||||||||||||
Siemens Healthineers AG | Health Care Equipment & Supplies | 3,358 | $ | 150,816 | ||||||||||
Suedzucker AG | Food Products | 1,886 | 36,492 | |||||||||||
Symrise AG | Chemicals | 3,036 | 420,100 | |||||||||||
a | Talanx AG | Insurance | 1,288 | 41,566 | ||||||||||
a | TeamViewer AG | Software | 2,944 | 145,410 | ||||||||||
Telefonica Deutschland Holding AG | Diversified Telecommunication Services | 16,146 | 41,446 | |||||||||||
a | thyssenkrupp AG | Metals & Mining | 11,224 | 56,754 | ||||||||||
Traton SE | Machinery | 1,150 | 22,898 | |||||||||||
TUI AG | Hotels, Restaurants & Leisure | 10,488 | 39,714 | |||||||||||
Uniper SE | Independent Power and Renewable Electricity Producers | 2,668 | 86,225 | |||||||||||
United Internet AG | Diversified Telecommunication Services | 2,622 | 100,450 | |||||||||||
a | Varta AG | Electrical Equipment | 322 | 45,236 | ||||||||||
a | Volkswagen AG | Automobiles | 782 | 136,818 | ||||||||||
Vonovia SE | Real Estate Management & Development | 13,524 | 929,016 | |||||||||||
Wacker Chemie AG | Chemicals | 368 | 35,774 | |||||||||||
a | Zalando SE | Internet & Direct Marketing Retail | 3,864 | 362,037 | ||||||||||
|
| |||||||||||||
30,400,819 | ||||||||||||||
|
| |||||||||||||
Ireland 1.1% | ||||||||||||||
a | AIB Group PLC | Banks | 18,124 | 18,618 | ||||||||||
CRH PLC | Construction Materials | 18,768 | 678,401 | |||||||||||
a | Flutter Entertainment PLC | Hotels, Restaurants & Leisure | 2,898 | 458,950 | ||||||||||
Glanbia PLC | Food Products | 4,692 | 48,473 | |||||||||||
Kerry Group | Food Products | 3,680 | 472,531 | |||||||||||
a | Kingspan Group PLC | Building Products | 3,588 | 326,921 | ||||||||||
Smurfit Kappa Group PLC | Containers & Packaging | 5,704 | 224,174 | |||||||||||
|
| |||||||||||||
2,228,068 | ||||||||||||||
|
| |||||||||||||
Italy 3.3% | ||||||||||||||
A2A SpA | Multi-Utilities | 37,168 | 54,045 | |||||||||||
a | Amplifon SpA | Health Care Providers & Services | 2,944 | 105,467 | ||||||||||
Assicurazioni Generali SpA | Insurance | 30,222 | 426,164 | |||||||||||
a | Atlantia SpA | Transportation Infrastructure | 11,822 | 186,181 | ||||||||||
Banca Mediolanum SpA | Diversified Financial Services | 6,072 | 43,790 | |||||||||||
Buzzi Unicem SpA, di Risp | Construction Materials | 1,794 | 41,833 | |||||||||||
Buzzi Unicem SpA, di Risp | Construction Materials | 1,012 | 13,315 | |||||||||||
Davide Campari-Milano NV | Beverages | 13,478 | 147,287 | |||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 552 | 111,271 | |||||||||||
Enel SpA | Electric Utilities | 185,242 | 1,611,368 | |||||||||||
Eni SpA | Oil, Gas & Consumable Fuels | 58,190 | 456,366 | |||||||||||
Ferrari NV | Automobiles | 2,898 | 532,350 | |||||||||||
a | FinecoBank Banca Fineco SpA | Banks | 14,628 | 201,640 | ||||||||||
Hera SpA | Multi-Utilities | 16,468 | 60,869 | |||||||||||
b | Infrastrutture Wireless Italiane SpA, Reg S | Diversified Telecommunication Services | 7,866 | 87,075 | ||||||||||
a | Intesa Sanpaolo SpA | Banks | 370,916 | 697,233 | ||||||||||
Italgas Reti SpA | Gas Utilities | 11,638 | 73,491 | |||||||||||
Leonardo SpA | Aerospace & Defense | 9,338 | 54,751 | |||||||||||
Mediobanca Banca di Credito Finanziario SpA | Banks | 18,492 | 145,244 | |||||||||||
a | Moncler SpA | Textiles, Apparel & Luxury Goods | 4,646 | 190,576 | ||||||||||
a | Nexi SpA | IT Services | 6,992 | 140,370 | ||||||||||
a | Pirelli & C SpA | Auto Components | 9,292 | 39,902 | ||||||||||
b | Poste Italiane SpA, Reg S | Insurance | 10,626 | 94,302 | ||||||||||
Prysmian SpA | Electrical Equipment | 5,704 | 166,150 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 2,300 | 117,971 |
188 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Italy (continued) | ||||||||||||||
Snam SpA | Gas Utilities | 52,164 | $ | 268,476 | ||||||||||
Telecom Italia SpA/Milano | Diversified Telecommunication Services | 253,046 | 101,483 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 141,450 | 57,192 | |||||||||||
Tenaris SA | Energy Equipment & Services | 11,178 | 55,853 | |||||||||||
Terna Rete Elettrica Nazionale SpA | Electric Utilities | 33,258 | 232,986 | |||||||||||
a | UniCredit SpA | Banks | 51,106 | 422,203 | ||||||||||
UnipolSai Assicurazioni SpA | Insurance | 12,144 | 31,700 | |||||||||||
|
| |||||||||||||
6,968,904 | ||||||||||||||
|
| |||||||||||||
Kazakhstan 0.0%† | ||||||||||||||
KAZ Minerals PLC | Metals & Mining | 5,152 | 34,901 | |||||||||||
|
| |||||||||||||
Luxembourg 0.1% | ||||||||||||||
a | Eurofins Scientific SE | Life Sciences Tools & Services | 276 | 218,594 | ||||||||||
a | RTL Group SA | Media | 966 | 38,084 | ||||||||||
|
| |||||||||||||
256,678 | ||||||||||||||
|
| |||||||||||||
Netherlands 5.9% | ||||||||||||||
Aalberts NV | Machinery | 2,300 | 83,124 | |||||||||||
ABN AMRO Bank NV, GDR | Banks | 9,982 | 83,717 | |||||||||||
a | Adyen NV | IT Services | 644 | 1,187,531 | ||||||||||
Aegon NV | Insurance | 43,358 | 112,873 | |||||||||||
Akzo Nobel NV | Chemicals | 4,600 | 466,166 | |||||||||||
a | Altice Europe NV, A | Diversified Telecommunication Services | 13,018 | 62,467 | ||||||||||
a | Altice Europe NV, B | Diversified Telecommunication Services | 1,012 | 4,866 | ||||||||||
a | Argenx SE | Biotechnology | 1,008 | 265,957 | ||||||||||
a | Argenx SE | Biotechnology | 96 | 25,329 | ||||||||||
ASM International NV | Semiconductors & Semiconductor Equipment | 1,104 | 158,395 | |||||||||||
ASML Holding NV | Semiconductors & Semiconductor Equipment | 9,522 | 3,513,933 | |||||||||||
ASR Nederland NV | Insurance | 3,358 | 113,014 | |||||||||||
b | Euronext NV, Reg S | Capital Markets | 1,472 | 184,525 | ||||||||||
EXOR NV | Diversified Financial Services | 2,484 | 135,390 | |||||||||||
a | Grandvision NV | Specialty Retail | 1,196 | 33,449 | ||||||||||
Heineken Holding NV | Beverages | 2,530 | 197,144 | |||||||||||
Heineken NV | Beverages | 5,704 | 507,546 | |||||||||||
IMCD Group NV | Trading Companies & Distributors | 1,242 | 147,973 | |||||||||||
a | ING Groep NV | Banks | 93,288 | 662,601 | ||||||||||
a | JDE Peet’s BV | Beverages | 1,472 | 59,949 | ||||||||||
a,b,c | Just Eat Takeaway.com NV, 144A, Reg S | Internet & Direct Marketing Retail | 2,806 | 315,311 | ||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 25,668 | 760,015 | |||||||||||
Koninklijke DSM NV | Chemicals | 4,140 | 682,581 | |||||||||||
Koninklijke KPN NV | Diversified Telecommunication Services | 79,396 | 186,859 | |||||||||||
a | Koninklijke Philips NV | Health Care Equipment & Supplies | 21,730 | 1,024,364 | ||||||||||
Koninklijke Vopak NV | Oil, Gas & Consumable Fuels | 1,610 | 90,736 | |||||||||||
NN Group NV | Insurance | 7,452 | 280,072 | |||||||||||
a | QIAGEN NV | Life Sciences Tools & Services | 5,290 | 274,807 | ||||||||||
a | Randstad NV | Professional Services | 2,668 | 139,318 | ||||||||||
a | Signify NV | Electrical Equipment | 2,990 | 110,727 | ||||||||||
Wolters Kluwer NV | Professional Services | 6,394 | 546,149 | |||||||||||
|
| |||||||||||||
12,416,888 | ||||||||||||||
|
| |||||||||||||
Norway 1.0% | ||||||||||||||
Aker ASA | Diversified Financial Services | 598 | 25,744 | |||||||||||
Aker BP ASA | Oil, Gas & Consumable Fuels | 2,484 | 38,734 | |||||||||||
a | DNB ASA | Banks | 24,840 | 343,267 | ||||||||||
Equinor ASA | Oil, Gas & Consumable Fuels | 23,046 | 327,096 | |||||||||||
Gjensidige Forsikring ASA | Insurance | 4,002 | 81,010 |
franklintempleton.com | Semiannual Report | 189 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Norway (continued) | ||||||||||||||
Leroy Seafood Group ASA | Food Products | 6,072 | $ | 34,784 | ||||||||||
Mowi ASA | Food Products | 10,304 | 182,643 | |||||||||||
a | Norsk Hydro ASA | Metals & Mining | 31,464 | 86,557 | ||||||||||
Orkla ASA | Food Products | 18,446 | 186,065 | |||||||||||
a | Salmar ASA | Food Products | 1,242 | 70,220 | ||||||||||
a | Schibsted ASA, A | Media | 1,932 | 85,382 | ||||||||||
a | Schibsted ASA, B | Media | 2,300 | 91,689 | ||||||||||
Telenor ASA | Diversified Telecommunication Services | 14,996 | 250,745 | |||||||||||
a | Tomra Systems ASA | Commercial Services & Supplies | 2,806 | 120,588 | ||||||||||
Yara International ASA | Chemicals | 4,048 | 155,533 | |||||||||||
|
| |||||||||||||
2,080,057 | ||||||||||||||
|
| |||||||||||||
Poland 0.4% | ||||||||||||||
a | Bank Pekao SA | Banks | 3,772 | 49,092 | ||||||||||
a | CD Projekt SA | Entertainment | 1,518 | 164,271 | ||||||||||
a | Cyfrowy Polsat SA | Media | 6,716 | 46,935 | ||||||||||
a | Dino Polska SA | Food & Staples Retailing | 1,150 | 67,756 | ||||||||||
Grupa Lotos SA | Oil, Gas & Consumable Fuels | 2,392 | 21,338 | |||||||||||
a | KGHM Polska Miedz SA | Metals & Mining | 3,312 | 101,081 | ||||||||||
a | LPP SA | Textiles, Apparel & Luxury Goods | 20 | 33,986 | ||||||||||
a | PGE Polska Grupa Energetyczna SA | Electric Utilities | 17,526 | 29,102 | ||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 7,360 | 87,280 | |||||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | Oil, Gas & Consumable Fuels | 40,710 | 53,152 | |||||||||||
a | Powszechna Kasa Oszczednosci Bank Polski SA | Banks | 20,286 | 111,285 | ||||||||||
a | Powszechny Zaklad Ubezpieczen SA | Insurance | 13,202 | 84,648 | ||||||||||
a | Santander Bank Polska SA | Banks | 690 | 25,449 | ||||||||||
|
| |||||||||||||
875,375 | ||||||||||||||
|
| |||||||||||||
Portugal 0.2% | ||||||||||||||
EDP- Energias de Portugal SA | Electric Utilities | 67,181 | 330,481 | |||||||||||
Galp Energia SGPS SA, B | Oil, Gas & Consumable Fuels | 12,374 | 114,806 | |||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 5,842 | 93,888 | |||||||||||
|
| |||||||||||||
539,175 | ||||||||||||||
|
| |||||||||||||
Russian Federation 0.1% | ||||||||||||||
Evraz PLC | Metals & Mining | 13,110 | 58,405 | |||||||||||
Polymetal International PLC | Metals & Mining | 8,142 | 177,836 | |||||||||||
|
| |||||||||||||
236,241 | ||||||||||||||
|
| |||||||||||||
Spain 3.6% | ||||||||||||||
Acciona SA | Electric Utilities | 506 | 55,064 | |||||||||||
ACS Actividades de Construccion y Servicios SA | Construction & Engineering | 5,566 | 126,395 | |||||||||||
a | Aena SME SA | Transportation Infrastructure | 1,702 | 238,105 | ||||||||||
Amadeus IT Group SA | IT Services | 10,166 | 567,328 | |||||||||||
Banco Bilbao Vizcaya Argentaria SA | Banks | 158,930 | 442,068 | |||||||||||
a | Banco Santander SA | Banks | 390,494 | 732,478 | ||||||||||
Bankia SA | Banks | 29,532 | 42,994 | |||||||||||
Bankinter SA | Banks | 16,514 | 71,206 | |||||||||||
CaixaBank SA | Banks | 85,330 | 181,413 | |||||||||||
Cellnex Telecom SA | Diversified Telecommunication Services | 8,188 | 499,286 | |||||||||||
Corporacion Mapfre SA | Insurance | 23,782 | 37,286 | |||||||||||
EDP Renovaveis SA | Independent Power and Renewable Electricity Producers | 3,680 | 61,019 | |||||||||||
Enagas SA | Gas Utilities | 5,888 | 135,985 | |||||||||||
Endesa SA | Electric Utilities | 7,590 | 203,197 |
190 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Spain (continued) | ||||||||||||||
Ferrovial SA | Construction & Engineering | 11,500 | $ | 279,824 | ||||||||||
Grifols SA | Biotechnology | 7,912 | 228,146 | |||||||||||
Iberdrola SA | Electric Utilities | 143,442 | 1,767,859 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 25,254 | 704,816 | |||||||||||
Inmobiliaria Colonial SA | Equity Real Estate Investment Trusts (REITs | ) | 7,682 | 63,554 | ||||||||||
Merlin Properties Socimi SA | Equity Real Estate Investment Trusts (REITs | ) | 7,728 | 64,568 | ||||||||||
Naturgy Energy Group SA | Gas Utilities | 7,176 | 144,064 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 10,350 | 194,373 | |||||||||||
Repsol SA | Oil, Gas & Consumable Fuels | 34,358 | 230,539 | |||||||||||
Siemens Gamesa Renewable Energy SA | Electrical Equipment | 5,382 | 145,726 | |||||||||||
Telefonica SA | Diversified Telecommunication Services | 112,510 | 387,493 | |||||||||||
Zardoya Otis SA | Machinery | 4,278 | 26,136 | |||||||||||
|
| |||||||||||||
7,630,922 | ||||||||||||||
|
| |||||||||||||
Sweden 5.5% | ||||||||||||||
a | Alfa Laval AB | Machinery | 7,544 | 167,570 | ||||||||||
Assa Abloy AB, B | Building Products | 21,942 | 515,085 | |||||||||||
�� | Atlas Copco AB | Machinery | 9,062 | 379,895 | ||||||||||
Atlas Copco AB, A | Machinery | 15,088 | 722,875 | |||||||||||
Boliden AB | Metals & Mining | 6,578 | 196,017 | |||||||||||
Castellum AB | Real Estate Management & Development | 6,394 | 145,740 | |||||||||||
Electrolux AB, B | Household Durables | 5,428 | 126,997 | |||||||||||
Elekta AB, B | Health Care Equipment & Supplies | 8,418 | 106,330 | |||||||||||
Epiroc AB, A | Machinery | 15,042 | 218,739 | |||||||||||
Epiroc AB, B | Machinery | 9,108 | 126,901 | |||||||||||
EQT AB | Capital Markets | 4,830 | 94,010 | |||||||||||
Ericsson, B | Communications Equipment | 71,668 | 786,987 | |||||||||||
a | Essity AB, B | Household Products | 14,582 | 493,344 | ||||||||||
b,c | Evolution Gaming Group AB, 144A, Reg S | Hotels, Restaurants & Leisure | 3,174 | 210,938 | ||||||||||
a | Fastighets AB Balder, B | Real Estate Management & Development | 2,300 | 116,979 | ||||||||||
Hennes & Mauritz AB, B | Specialty Retail | 20,838 | 360,300 | |||||||||||
a | Hexagon AB, B | Electronic Equipment, Instruments & Components | 6,072 | 459,844 | ||||||||||
Holmen AB, B | Paper & Forest Products | 2,300 | 85,575 | |||||||||||
Husqvarna AB, B | Household Durables | 9,890 | 109,088 | |||||||||||
ICA Gruppen AB | Food & Staples Retailing | 1,886 | 95,944 | |||||||||||
a | Industrivarden AB, A | Diversified Financial Services | 4,922 | 133,526 | ||||||||||
a | Industrivarden AB, C | Diversified Financial Services | 3,956 | 105,597 | ||||||||||
Investment AB Latour, B | Industrial Conglomerates | 2,898 | 68,257 | |||||||||||
Investor AB, A | Diversified Financial Services | 3,174 | 206,399 | |||||||||||
Investor AB, B | Diversified Financial Services | 10,856 | 712,008 | |||||||||||
Kinnevik AB, B | Diversified Financial Services | 5,750 | 234,272 | |||||||||||
a | L E Lundbergforetagen AB, B | Diversified Financial Services | 1,748 | 86,756 | ||||||||||
Lifco AB, B | Industrial Conglomerates | 1,104 | 85,791 | |||||||||||
Lundin Energy AB | Oil, Gas & Consumable Fuels | 4,508 | 89,908 | |||||||||||
a | Nibe Industrier AB | Building Products | 7,222 | 186,481 | ||||||||||
a | Saab AB, B | Aerospace & Defense | 2,208 | 65,253 | ||||||||||
a | Sandvik AB | Machinery | 25,760 | 506,278 | ||||||||||
a | Securitas AB, B | Commercial Services & Supplies | 7,360 | 112,867 | ||||||||||
a,b | Sinch AB, Reg S | Software | 966 | 79,115 | ||||||||||
a | Skandinaviska Enskilda Banken AB, A | Banks | 34,362 | 305,764 | ||||||||||
a | Skandinaviska Enskilda Banken AB, C | Banks | 506 | 4,987 | ||||||||||
a | Skanska AB, B | Construction & Engineering | 8,556 | 181,445 | ||||||||||
SKF AB, B | Machinery | 9,154 | 189,933 | |||||||||||
a | Svenska Cellulosa AB, A | Paper & Forest Products | 552 | 8,117 | ||||||||||
a | Svenska Cellulosa AB, B | Paper & Forest Products | 14,260 | 196,055 | ||||||||||
a | Svenska Handelsbanken AB, A | Banks | 35,282 | 296,921 |
franklintempleton.com | Semiannual Report | 191 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Sweden (continued) | ||||||||||||||
a | Svenska Handelsbanken AB, B | Banks | 874 | $ | 8,691 | |||||||||
SWECO AB, B | Construction & Engineering | 1,610 | 89,548 | |||||||||||
a | Swedbank AB, A | Banks | 23,966 | 376,869 | ||||||||||
Swedish Match AB | Tobacco | 3,634 | 297,541 | |||||||||||
a | Swedish Orphan Biovitrum AB | Biotechnology | 4,140 | 100,239 | ||||||||||
Tele2 AB, B | Wireless Telecommunication Services | 12,834 | 181,827 | |||||||||||
Telefonaktiebolaget LM Ericsson, A | Communications Equipment | 874 | 10,429 | |||||||||||
Telia Co. AB | Diversified Telecommunication Services | 61,824 | 254,549 | |||||||||||
a | Trelleborg AB, B | Machinery | 5,842 | 103,948 | ||||||||||
a | Volvo AB, A | Machinery | 4,784 | 92,900 | ||||||||||
a | Volvo AB, B | Machinery | 35,880 | 693,747 | ||||||||||
|
| |||||||||||||
11,585,176 | ||||||||||||||
|
| |||||||||||||
Switzerland 16.3% | ||||||||||||||
ABB Ltd. | Electrical Equipment | 42,734 | 1,090,735 | |||||||||||
Adecco Group AG | Professional Services | 3,726 | 197,422 | |||||||||||
a | Alcon Inc. | Health Care Equipment & Supplies | 10,994 | 625,835 | ||||||||||
Baloise Holding AG | Insurance | 1,104 | 162,821 | |||||||||||
Banque Cantonale Vaudoise | Banks | 690 | 70,296 | |||||||||||
Barry Callebaut AG | Food Products | 73 | 162,725 | |||||||||||
Chocoladefabriken Lindt & Spruengli AG | Food Products | 46 | 389,279 | |||||||||||
Cie Financiere Richemont SA | Textiles, Apparel & Luxury Goods | 12,190 | 818,637 | |||||||||||
Clariant AG | Chemicals | 4,830 | 95,470 | |||||||||||
Coca-Cola HBC AG | Beverages | 4,692 | 115,978 | |||||||||||
Credit Suisse Group AG | Capital Markets | 55,844 | 561,874 | |||||||||||
DKSH Holding AG | Professional Services | 874 | 61,121 | |||||||||||
EMS-Chemie Holding AG | Chemicals | 184 | 165,525 | |||||||||||
a | Flughafen Zurich AG | Transportation Infrastructure | 460 | 63,386 | ||||||||||
Geberit AG | Building Products | 828 | 491,888 | |||||||||||
Georg Fischer AG | Machinery | 92 | 96,030 | |||||||||||
Givaudan AG | Chemicals | 222 | 959,282 | |||||||||||
Helvetia Holding AG | Insurance | 782 | 66,646 | |||||||||||
Julius Baer Group Ltd. | Capital Markets | 5,198 | 222,177 | |||||||||||
Kuehne + Nagel International AG | Marine | 1,196 | 233,407 | |||||||||||
LafargeHolcim Ltd., B | Construction Materials | 12,236 | 559,227 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 3,496 | 272,755 | |||||||||||
Lonza Group AG | Life Sciences Tools & Services | 1,794 | 1,110,279 | |||||||||||
Nestle SA | Food Products | 66,654 | 7,932,461 | |||||||||||
Novartis AG | Pharmaceuticals | 51,382 | 4,469,046 | |||||||||||
OC Oerlikon Corp. AG | Machinery | 4,554 | 36,432 | |||||||||||
Partners Group Holding AG | Capital Markets | 414 | 381,939 | |||||||||||
PSP Swiss Property AG | Real Estate Management & Development | 1,012 | 122,817 | |||||||||||
Roche Holding AG | Pharmaceuticals | 644 | 221,641 | |||||||||||
Roche Holding AG | Pharmaceuticals | 16,652 | 5,711,976 | |||||||||||
Schindler Holding AG | Machinery | 460 | 125,470 | |||||||||||
Schindler Holding AG, PC | Machinery | 966 | 264,434 | |||||||||||
SGS SA | Professional Services | 138 | 370,854 | |||||||||||
SIG Combibloc Group AG | Containers & Packaging | 6,854 | 137,938 | |||||||||||
Sika AG | Chemicals | 3,312 | 815,788 | |||||||||||
a | Sonova Holding AG | Health Care Equipment & Supplies | 1,242 | 315,789 | ||||||||||
STMicroelectronics NV | Semiconductors & Semiconductor Equipment | 15,180 | 467,450 | |||||||||||
Straumann Holding AG | Health Care Equipment & Supplies | 230 | 232,816 | |||||||||||
Sulzer AG | Machinery | 414 | 33,368 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 690 | 161,394 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 1,058 | 47,675 | |||||||||||
Swiss Life Holding AG | Insurance | 736 | 279,179 |
192 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Switzerland (continued) | ||||||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 1,794 | $ | 163,242 | ||||||||||
Swiss Re AG | Insurance | 6,716 | 499,122 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 598 | 318,022 | |||||||||||
Temenos AG | Software | 1,426 | 192,539 | |||||||||||
UBS Group AG | Capital Markets | 80,132 | 898,351 | |||||||||||
b | VAT Group AG, Reg S | Machinery | 598 | 114,621 | ||||||||||
Vifor Pharma AG | Pharmaceuticals | 1,242 | 169,520 | |||||||||||
Zurich Insurance Group AG | Insurance | 3,542 | 1,236,375 | |||||||||||
|
| |||||||||||||
34,313,054 | ||||||||||||||
|
| |||||||||||||
United Arab Emirates 0.0%† | ||||||||||||||
a,d | NMC Health PLC | Health Care Providers & Services | 1,159 | — | ||||||||||
|
| |||||||||||||
United Kingdom 21.7% | ||||||||||||||
3i Group PLC | Capital Markets | 22,770 | 293,370 | |||||||||||
Admiral Group PLC | Insurance | 5,014 | 169,248 | |||||||||||
Anglo American PLC | Metals & Mining | 29,440 | 713,930 | |||||||||||
Antofagasta PLC | Metals & Mining | 8,464 | 111,994 | |||||||||||
Ashmore Group PLC | Capital Markets | 10,718 | 49,633 | |||||||||||
Ashtead Group PLC | Trading Companies & Distributors | 10,672 | 386,309 | |||||||||||
Associated British Foods PLC | Food Products | 8,372 | 202,125 | |||||||||||
AstraZeneca PLC | Pharmaceuticals | 31,418 | 3,434,995 | |||||||||||
Auto Trader Group PLC | Interactive Media & Services | 22,540 | 164,057 | |||||||||||
Avast PLC | Software | 13,110 | 89,319 | |||||||||||
AVEVA Group PLC | Software | 1,518 | 93,924 | |||||||||||
Aviva PLC | Insurance | 93,656 | 345,921 | |||||||||||
B&M European Value Retail SA | Multiline Retail | 20,056 | 128,268 | |||||||||||
BAE Systems PLC | Aerospace & Defense | 76,820 | 478,688 | |||||||||||
a | Barclays PLC | Banks | 412,666 | 520,744 | ||||||||||
Barratt Developments PLC | Household Durables | 24,518 | 150,814 | |||||||||||
Bellway PLC | Household Durables | 2,990 | 90,877 | |||||||||||
BHP Group PLC | Metals & Mining | 49,726 | 1,063,158 | |||||||||||
BP PLC | Oil, Gas & Consumable Fuels | 474,628 | 1,381,825 | |||||||||||
British American Tobacco PLC | Tobacco | 54,556 | 1,958,970 | |||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 22,126 | 96,512 | ||||||||||
BT Group PLC | Diversified Telecommunication Services | 207,368 | 263,742 | |||||||||||
Bunzl PLC | Trading Companies & Distributors | 8,050 | 260,904 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 9,660 | 194,070 | |||||||||||
Centrica PLC | Multi-Utilities | 139,334 | 72,215 | |||||||||||
a | CNH Industrial NV | Machinery | 23,460 | 182,889 | ||||||||||
Compass Group PLC | Hotels, Restaurants & Leisure | 42,596 | 643,746 | |||||||||||
ConvaTec Group PLC | Health Care Equipment & Supplies | 38,272 | 88,467 | |||||||||||
Croda International PLC | Chemicals | 2,990 | 241,592 | |||||||||||
DCC PLC | Industrial Conglomerates | 2,346 | 182,217 | |||||||||||
Derwent London PLC | Equity Real Estate Investment Trusts (REITs | ) | 2,392 | 79,474 | ||||||||||
Diageo PLC | Beverages | 54,832 | 1,878,500 | |||||||||||
Direct Line Insurance Group PLC | Insurance | 32,614 | 113,588 | |||||||||||
DS Smith PLC | Containers & Packaging | 30,314 | 115,493 | |||||||||||
easyJet PLC | Airlines | 5,520 | 35,795 | |||||||||||
Experian PLC | Professional Services | 21,666 | 817,886 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 5,382 | 543,547 | |||||||||||
a | Fiat Chrysler Automobiles NV | Automobiles | 26,358 | 323,552 | ||||||||||
Fresnillo PLC | Metals & Mining | 4,462 | 69,049 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 117,852 | 2,212,253 | |||||||||||
a | GVC Holdings PLC | Hotels, Restaurants & Leisure | 14,030 | 176,664 | ||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 9,062 | 274,725 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 8,602 | 173,705 |
franklintempleton.com | Semiannual Report | 193 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 4,048 | $ | 135,751 | ||||||||||
a | Hiscox Ltd. | Insurance | 8,050 | 92,976 | ||||||||||
HomeServe PLC | Commercial Services & Supplies | 6,578 | 105,110 | |||||||||||
Howden Joinery Group PLC | Trading Companies & Distributors | 13,662 | 104,313 | |||||||||||
HSBC Holdings PLC | Banks | 486,772 | 1,897,336 | |||||||||||
IMI PLC | Machinery | 6,440 | 87,419 | |||||||||||
Imperial Brands PLC | Tobacco | 22,540 | 398,485 | |||||||||||
a | Informa PLC | Media | 36,018 | 175,314 | ||||||||||
a | InterContinental Hotels Group PLC | Hotels, Restaurants & Leisure | 4,324 | 228,857 | ||||||||||
Intermediate Capital Group PLC | Capital Markets | 6,578 | 101,453 | |||||||||||
International Consolidated Airlines Group SA | Airlines | 16,920 | 20,785 | |||||||||||
International Consolidated Airlines Group SA | Airlines | 10,810 | 13,279 | |||||||||||
Intertek Group PLC | Professional Services | 3,864 | 316,407 | |||||||||||
ITV PLC | Media | 89,700 | 78,415 | |||||||||||
J Sainsbury PLC | Food & Staples Retailing | 38,778 | 95,727 | |||||||||||
JD Sports Fashion PLC | Specialty Retail | 10,212 | 106,858 | |||||||||||
Johnson Matthey PLC | Chemicals | 4,554 | 138,766 | |||||||||||
Kingfisher PLC | Specialty Retail | 50,876 | 195,147 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 16,882 | 114,036 | ||||||||||
Legal & General Group PLC | Insurance | 141,634 | 344,877 | |||||||||||
a | Lloyds Banking Group PLC | Banks | 1,679,184 | 572,127 | ||||||||||
London Stock Exchange Group PLC | Capital Markets | 7,544 | 865,666 | |||||||||||
M&G PLC | Diversified Financial Services | 61,640 | 127,103 | |||||||||||
Meggitt PLC | Aerospace & Defense | 18,630 | 62,019 | |||||||||||
a | Melrose Industries PLC | Electrical Equipment | 114,770 | 171,373 | ||||||||||
Mondi PLC | Paper & Forest Products | 11,638 | 246,673 | |||||||||||
National Grid PLC | Multi-Utilities | 83,858 | 964,646 | |||||||||||
a | Natwest Group PLC | Banks | 108,146 | 148,270 | ||||||||||
Next PLC | Multiline Retail | 3,082 | 237,072 | |||||||||||
a | Ocado Group PLC | Internet & Direct Marketing Retail | 11,638 | 412,851 | ||||||||||
Pearson PLC | Media | 18,308 | 129,988 | |||||||||||
Pennon Group PLC | Water Utilities | 10,028 | 133,661 | |||||||||||
Persimmon PLC | Household Durables | 7,590 | 242,659 | |||||||||||
Phoenix Group Holdings PLC | Insurance | 13,248 | 117,868 | |||||||||||
Prudential PLC | Insurance | 62,330 | 893,635 | |||||||||||
Quilter PLC | Capital Markets | 43,792 | 72,580 | |||||||||||
Reckitt Benckiser Group PLC | Household Products | 15,088 | 1,474,636 | |||||||||||
RELX PLC | Professional Services | 44,482 | 992,559 | |||||||||||
a | Renishaw PLC | Electronic Equipment, Instruments & Components | 828 | 60,159 | ||||||||||
a | Rentokil Initial PLC | Commercial Services & Supplies | 44,298 | 306,730 | ||||||||||
Rightmove PLC | Interactive Media & Services | 20,700 | 167,738 | |||||||||||
Rolls-Royce Holdings PLC | Aerospace & Defense | 41,216 | 69,269 | |||||||||||
Royal Dutch Shell PLC, A | Oil, Gas & Consumable Fuels | 98,210 | 1,223,824 | |||||||||||
Royal Dutch Shell PLC, B | Oil, Gas & Consumable Fuels | 88,734 | 1,078,553 | |||||||||||
RSA Insurance Group PLC | Insurance | 24,518 | 143,175 | |||||||||||
Schroders PLC | Capital Markets | 2,714 | 94,558 | |||||||||||
Segro PLC | Equity Real Estate Investment Trusts (REITs | ) | 28,428 | 342,673 | ||||||||||
Severn Trent PLC | Water Utilities | 5,704 | 179,855 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 20,930 | 410,339 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 9,522 | 169,263 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 1,748 | 250,048 | |||||||||||
SSE PLC | Electric Utilities | 24,794 | 387,208 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | �� | 12,558 | 151,148 | ||||||||||
a | Standard Chartered PLC | Banks | 61,732 | 284,193 | ||||||||||
Standard Life Aberdeen PLC | Capital Markets | 54,004 | 157,785 | |||||||||||
Tate & Lyle PLC | Food Products | 11,178 | 96,127 |
194 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
Taylor Wimpey PLC | Household Durables | 86,250 | $ | 120,926 | ||||||||||
TechnipFMC PLC | Energy Equipment & Services | 10,994 | 70,443 | |||||||||||
Tesco PLC | Food & Staples Retailing | 232,392 | 638,427 | |||||||||||
The Berkeley Group Holdings PLC | Household Durables | 2,806 | 153,375 | |||||||||||
The Sage Group PLC | Software | 26,036 | 242,616 | |||||||||||
Travis Perkins PLC | Trading Companies & Distributors | 6,072 | 85,250 | |||||||||||
Unilever NV | Personal Products | 34,730 | 2,097,397 | |||||||||||
Unilever PLC | Personal Products | 26,036 | 1,607,570 | |||||||||||
United Utilities Group PLC | Water Utilities | 16,330 | 180,672 | |||||||||||
Vodafone Group PLC | Wireless Telecommunication Services | 640,320 | 849,991 | |||||||||||
Weir Group PLC | Machinery | 6,256 | 101,299 | |||||||||||
a | Whitbread PLC | Hotels, Restaurants & Leisure | 4,784 | 131,426 | ||||||||||
William Morrison Supermarkets PLC | Food & Staples Retailing | 53,406 | 117,477 | |||||||||||
WPP PLC | Media | 28,428 | 223,450 | |||||||||||
|
| |||||||||||||
45,678,415 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $200,028,994) | 208,196,398 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 0.9% | ||||||||||||||
Germany 0.9% | ||||||||||||||
e | Bayerische Motoren Werke AG, 5.396%, pfd. | Automobiles | 1,380 | 75,573 | ||||||||||
e | Fuchs Petrolub SE, 2.236%, pfd. | Chemicals | 1,702 | 86,580 | ||||||||||
e | Henkel AG & Co. KGaA, 2.071%, pfd. | Household Products | 4,186 | 438,446 | ||||||||||
a | Porsche Automobil Holding SE, pfd. | Automobiles | 3,634 | 216,906 | ||||||||||
e | Sartorius AG, 0.103%, pfd. | Health Care Equipment & Supplies | 828 | 340,222 | ||||||||||
a | Volkswagen AG, pfd. | Automobiles | 4,370 | 704,104 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $1,661,181) | 1,861,831 | |||||||||||||
|
| |||||||||||||
Total Investments | 210,058,229 | |||||||||||||
Other Assets, less Liabilities 0.4% | 748,919 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 210,807,148 | ||||||||||||
|
|
See Abrreviations on page 331.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $1,796,937, representing 0.9% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $574,015, representing 0.3% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eVariable rate security. The rate shown represents the yield at period end.
franklintempleton.com | Semiannual Report | 195 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
EURO STOXX 50 Index | Long | 12 | $ | 449,453 | 12/18/20 | $ | (17,852 | ) | ||||||||||||
FTSE 100 Index | Long | 4 | 302,076 | 12/18/20 | (11,304 | ) | ||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts | $ | (29,156 | ) | |||||||||||||||||
|
|
*As of period end.
See Note 8 regarding other derivative information.
196 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe Hedged ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 19.15 | $ | 22.81 | $ | 23.88 | $ | 25.05 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.33 | 0.73 | 0.79 | 0.25 | ||||||||||||
Net realized and unrealized gains (losses) | 2.53 | (2.92 | ) | 0.62 | (1.40 | ) | ||||||||||
|
| |||||||||||||||
Total from investment operations | 2.86 | (2.19 | ) | 1.41 | (1.15 | ) | ||||||||||
|
| |||||||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.15 | ) | (1.47 | ) | (0.38 | ) | (0.02 | ) | ||||||||
Net realized gains | — | — | (2.10 | ) | — | d | ||||||||||
|
| |||||||||||||||
Total Distributions | (0.15 | ) | (1.47 | ) | (2.48 | ) | (0.02 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 21.86 | $ | 19.15 | $ | 22.81 | $ | 23.88 | ||||||||
|
| |||||||||||||||
Total returne | 14.82% | (10.67)% | 6.98% | (4.61)% | ||||||||||||
Ratios to average net assetsf | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | —% | ||||||||||||
Net investment income | 3.05% | 3.10% | 3.28% | 2.47% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $4,371 | $3,831 | $4,563 | $33,428 | ||||||||||||
Portfolio turnover rateg | 6.44% | h | 14.81% | h | 26.81% | 5.33% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.001 per share.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 6.44% | 14.81% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 197 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Europe Hedged ETF
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests 98.3% | ||||||||||||||
Australia 1.0% | ||||||||||||||
a | Glencore PLC | Metals & Mining | 5,344 | $ | 11,120 | |||||||||
Rio Tinto PLC | Metals & Mining | 537 | 32,320 | |||||||||||
|
| |||||||||||||
43,440 | ||||||||||||||
|
| |||||||||||||
Austria 0.2% | ||||||||||||||
Andritz AG | Machinery | 34 | 1,051 | |||||||||||
a | Erste Group Bank AG | Banks | 137 | 2,872 | ||||||||||
a | OMV AG | Oil, Gas & Consumable Fuels | 69 | 1,893 | ||||||||||
a | Raiffeisen Bank International AG | Banks | 65 | 996 | ||||||||||
Telekom Austria AG | Diversified Telecommunication Services | 74 | 523 | |||||||||||
Verbund AG | Electric Utilities | 32 | 1,752 | |||||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | Insurance | 22 | 490 | |||||||||||
Voestalpine AG | Metals & Mining | 55 | 1,451 | |||||||||||
|
| |||||||||||||
11,028 | ||||||||||||||
|
| |||||||||||||
Belgium 1.5% | ||||||||||||||
a | Ackermans & van Haaren NV | Diversified Financial Services | 10 | 1,298 | ||||||||||
Ageas SA/NV | Insurance | 89 | 3,638 | |||||||||||
Anheuser-Busch InBev SA/NV | Beverages | 410 | 22,224 | |||||||||||
Colruyt SA | Food & Staples Retailing | 25 | 1,623 | |||||||||||
Elia Group SA/NV | Electric Utilities | 18 | 1,798 | |||||||||||
a | Galapagos NV | Biotechnology | 24 | 3,411 | ||||||||||
Groupe Bruxelles Lambert SA | Diversified Financial Services | 52 | 4,694 | |||||||||||
KBC Groep NV | Banks | 135 | 6,774 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 74 | 1,352 | |||||||||||
Sofina SA | Diversified Financial Services | 8 | 2,186 | |||||||||||
Solvay SA | Chemicals | 34 | 2,929 | |||||||||||
Telenet Group Holding NV | Media | 26 | 1,011 | |||||||||||
UCB SA | Pharmaceuticals | 59 | 6,711 | |||||||||||
Umicore SA | Chemicals | 100 | 4,169 | |||||||||||
|
| |||||||||||||
63,818 | ||||||||||||||
|
| |||||||||||||
China 0.4% | ||||||||||||||
a | Prosus NV | Internet & Direct Marketing Retail | 213 | 19,657 | ||||||||||
|
| |||||||||||||
Denmark 3.9% | ||||||||||||||
A.P. Moeller-Maersk AS, A | Marine | 2 | 2,941 | |||||||||||
Ambu AS, B | Health Care Equipment & Supplies | 83 | 2,354 | |||||||||||
AP Moeller-Maersk A/S, B | Marine | 3 | 4,764 | |||||||||||
Carlsberg AS, B | Beverages | 49 | 6,608 | |||||||||||
Chr. Hansen Holding AS | Chemicals | 50 | 5,559 | |||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 66 | 10,434 | |||||||||||
a | Danske Bank AS | Banks | 319 | 4,327 | ||||||||||
DSV Panalpina A/S | Air Freight & Logistics | 99 | 16,181 | |||||||||||
a | Genmab A/S | Biotechnology | 29 | 10,508 | ||||||||||
GN Store Nord AS | Health Care Equipment & Supplies | 64 | 4,848 | |||||||||||
H. Lundbeck AS | Pharmaceuticals | 32 | 1,056 | |||||||||||
a | ISS AS | Commercial Services & Supplies | 90 | 1,189 | ||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 798 | 55,232 | |||||||||||
Novozymes AS | Chemicals | 99 | 6,237 | |||||||||||
Orsted AS | Electric Utilities | 93 | 12,825 | |||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 45 | 3,245 | |||||||||||
Rockwool International AS, B | Building Products | 3 | 1,153 | |||||||||||
Tryg AS | Insurance | 59 | 1,863 | |||||||||||
Vestas Wind Systems AS | Electrical Equipment | 97 | 15,739 | |||||||||||
a | William Demant Holding AS | Health Care Equipment & Supplies | 50 | 1,571 | ||||||||||
|
| |||||||||||||
168,634 | ||||||||||||||
|
|
198 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Finland 2.2% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 71 | $ | 4,186 | ||||||||||
b | Fortum OYJ, Reg S | Electric Utilities | 216 | 4,376 | ||||||||||
Huhtamaki OYJ | Containers & Packaging | 45 | 2,226 | |||||||||||
Kesko OYJ | Food & Staples Retailing | 135 | 3,483 | |||||||||||
Kojamo Oyj | Real Estate Management & Development | 95 | 2,043 | |||||||||||
Kone OYJ, B | Machinery | 194 | 17,076 | |||||||||||
Metso Outotec Oyj | Machinery | 299 | 2,102 | |||||||||||
Neles Oyj | Machinery | 56 | 759 | |||||||||||
Neste Oil OYJ | Oil, Gas & Consumable Fuels | 205 | 10,810 | |||||||||||
a | Nokia OYJ, A | Communications Equipment | 2,779 | 10,917 | ||||||||||
Nokian Renkaat OYJ | Auto Components | 65 | 1,841 | |||||||||||
a | Nordea Bank Abp | Banks | 1,587 | 12,072 | ||||||||||
Orion OYJ | Pharmaceuticals | 51 | 2,313 | |||||||||||
Sampo Oyj, A | Insurance | 250 | 9,906 | |||||||||||
Stora Enso OYJ, R | Paper & Forest Products | 283 | 4,438 | |||||||||||
UPM-Kymmene OYJ | Paper & Forest Products | 263 | 8,015 | |||||||||||
Wartsila OYJ ABP | Machinery | 231 | 1,820 | |||||||||||
|
| |||||||||||||
98,383 | ||||||||||||||
|
| |||||||||||||
France 15.8% | ||||||||||||||
a | Accor SA | Hotels, Restaurants & Leisure | 88 | 2,477 | ||||||||||
a | Adevinta ASA, B | Interactive Media & Services | 112 | 1,919 | ||||||||||
Aeroports de Paris SA | Transportation Infrastructure | 14 | 1,401 | |||||||||||
Air Liquide SA | Chemicals | 229 | 36,387 | |||||||||||
a | Airbus SE | Aerospace & Defense | 274 | 19,944 | ||||||||||
c | ALD SA, 144A | Road & Rail | 46 | 427 | ||||||||||
a | Alstom SA | Machinery | 92 | 4,587 | ||||||||||
a | Amundi SA | Capital Markets | 28 | 1,977 | ||||||||||
a | ArcelorMittal SA | Metals & Mining | 345 | 4,606 | ||||||||||
Arkema SA | Chemicals | 33 | 3,507 | |||||||||||
a | Atos SE | IT Services | 46 | 3,711 | ||||||||||
AXA SA | Insurance | 949 | 17,556 | |||||||||||
Biomerieux | Health Care Equipment & Supplies | 21 | 3,295 | |||||||||||
a | BNP Paribas SA | Banks | 536 | 19,469 | ||||||||||
Bollore | Entertainment | 497 | 1,858 | |||||||||||
Bouygues SA | Construction & Engineering | 104 | 3,612 | |||||||||||
a | Bureau Veritas SA | Professional Services | 132 | 2,981 | ||||||||||
Capgemini SE | IT Services | 77 | 9,910 | |||||||||||
Carrefour SA | Food & Staples Retailing | 286 | 4,583 | |||||||||||
a | Casino Guichard-Perrachon SA | Food & Staples Retailing | 28 | 681 | ||||||||||
Cie Generale des Etablissements Michelin SCA | Auto Components | 86 | 9,250 | |||||||||||
a | CNP Assurances | Insurance | 74 | 927 | ||||||||||
a | Compagnie de Saint-Gobain | Building Products | 239 | 10,092 | ||||||||||
Covivio | Equity Real Estate Investment Trusts (REITs | ) | 25 | 1,762 | ||||||||||
a | Credit Agricole SA | Banks | 575 | 5,038 | ||||||||||
Danone SA | Food Products | 296 | 19,167 | |||||||||||
a | Dassault Aviation SA | Aerospace & Defense | 1 | 850 | ||||||||||
Dassault Systemes | Software | 65 | 12,177 | |||||||||||
Edenred | IT Services | 121 | 5,449 | |||||||||||
EDF SA | Electric Utilities | 253 | 2,678 | |||||||||||
a | Eiffage SA | Construction & Engineering | 38 | 3,111 | ||||||||||
a | Engie SA | Multi-Utilities | 818 | 10,954 | ||||||||||
a | EssilorLuxottica SA | Textiles, Apparel & Luxury Goods | 145 | 19,750 | ||||||||||
a | Eurazeo SE | Diversified Financial Services | 22 | 1,192 | ||||||||||
a | Faurecia SE | Auto Components | 37 | 1,602 | ||||||||||
Gecina SA | Equity Real Estate Investment Trusts (REITs | ) | 25 | 3,304 |
franklintempleton.com | Semiannual Report | 199 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
France (continued) | ||||||||||||||
a | Getlink SE | Transportation Infrastructure | 221 | $ | 3,006 | |||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 15 | 12,950 | |||||||||||
ICADE | Equity Real Estate Investment Trusts (REITs | ) | 17 | 955 | ||||||||||
Iliad SA | Diversified Telecommunication Services | 8 | 1,473 | |||||||||||
Imerys SA | Construction Materials | 20 | 745 | |||||||||||
a | Ingenico Group SA | Electronic Equipment, Instruments & Components | 31 | 4,809 | ||||||||||
Ipsen SA | Pharmaceuticals | 17 | 1,785 | |||||||||||
a | JCDecaux SA | Media | 35 | 606 | ||||||||||
Kering SA | Textiles, Apparel & Luxury Goods | 37 | 24,627 | |||||||||||
Klepierre SA | Equity Real Estate Investment Trusts (REITs | ) | 93 | 1,307 | ||||||||||
L’Oreal SA | Personal Products | 119 | 38,738 | |||||||||||
La Francaise des Jeux SAEM | Hotels, Restaurants & Leisure | 41 | 1,511 | |||||||||||
Legrand SA | Electrical Equipment | 131 | 10,474 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | Textiles, Apparel & Luxury Goods | 123 | 57,608 | |||||||||||
a | Natixis SA | Capital Markets | 414 | 933 | ||||||||||
Orange SA | Diversified Telecommunication Services | 949 | 9,887 | |||||||||||
a | Orpea | Health Care Providers & Services | 24 | 2,732 | ||||||||||
Pernod Ricard SA | Beverages | 102 | 16,285 | |||||||||||
a | Peugeot SA | Automobiles | 275 | 4,998 | ||||||||||
Plastic Omnium SA | Auto Components | 29 | 767 | |||||||||||
Publicis Groupe | Media | 110 | 3,558 | |||||||||||
Remy Cointreau SA | Beverages | 12 | 2,192 | |||||||||||
a | Renault SA | Automobiles | 90 | 2,342 | ||||||||||
a | Rexel SA | Trading Companies & Distributors | 151 | 1,902 | ||||||||||
Rubis SCA | Gas Utilities | 45 | 1,807 | |||||||||||
a | Safran SA | Aerospace & Defense | 159 | 15,744 | ||||||||||
Sanofi | Pharmaceuticals | 538 | 53,834 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 12 | 4,146 | |||||||||||
Schneider Electric SE | Electrical Equipment | 259 | 32,209 | |||||||||||
a | SCOR SE | Insurance | 77 | 2,136 | ||||||||||
SEB SA | Household Durables | 13 | 2,117 | |||||||||||
a | Societe Generale SA | Banks | 384 | 5,096 | ||||||||||
Sodexo SA | Hotels, Restaurants & Leisure | 42 | 3,005 | |||||||||||
Suez SA | Multi-Utilities | 184 | 3,410 | |||||||||||
Teleperformance | Professional Services | 29 | 8,964 | |||||||||||
Thales SA | Aerospace & Defense | 50 | 3,762 | |||||||||||
Total SE | Oil, Gas & Consumable Fuels | 1,197 | 40,987 | |||||||||||
a | Ubisoft Entertainment SA | Entertainment | 47 | 4,247 | ||||||||||
Unibail-Rodamco-Westfield | Equity Real Estate Investment Trusts (REITs | ) | 67 | 2,475 | ||||||||||
Valeo SA | Auto Components | 118 | 3,632 | |||||||||||
Veolia Environnement SA | Multi-Utilities | 249 | 5,378 | |||||||||||
Vinci SA | Construction & Engineering | 229 | 19,206 | |||||||||||
Vivendi SA | Entertainment | 394 | 10,996 | |||||||||||
Wendel SE | Diversified Financial Services | 14 | 1,272 | |||||||||||
a,b | Worldline SA, Reg S | IT Services | 71 | 5,838 | ||||||||||
|
| |||||||||||||
688,642 | ||||||||||||||
|
| |||||||||||||
Germany 14.3% | ||||||||||||||
1&1 Drillisch AG | Wireless Telecommunication Services | 23 | 510 | |||||||||||
a | Adidas AG | Textiles, Apparel & Luxury Goods | 95 | 30,758 | ||||||||||
Allianz SE | Insurance | 205 | 39,333 | |||||||||||
a | Aroundtown SA | Real Estate Management & Development | 596 | 2,998 | ||||||||||
BASF SE | Chemicals | 452 | 27,551 | |||||||||||
Bayer AG | Pharmaceuticals | 485 | 30,319 | |||||||||||
Bayerische Motoren Werke AG | Automobiles | 158 | 11,485 | |||||||||||
Bechtle AG | IT Services | 13 | 2,636 |
200 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Germany (continued) | ||||||||||||||
Beiersdorf AG | Personal Products | 49 | $ | 5,574 | ||||||||||
Brenntag AG | Trading Companies & Distributors | 75 | 4,776 | |||||||||||
Carl Zeiss Meditec AG | Health Care Equipment & Supplies | 18 | 2,280 | |||||||||||
a | Commerzbank AG | Banks | 509 | 2,503 | ||||||||||
Continental AG | Auto Components | 53 | 5,748 | |||||||||||
Covestro AG | Chemicals | 83 | 4,122 | |||||||||||
a | CTS Eventim AG & Co. KGaA | Entertainment | 30 | 1,452 | ||||||||||
Daimler AG | Automobiles | 399 | 21,539 | |||||||||||
a | Delivery Hero SE | Internet & Direct Marketing Retail | 70 | 8,054 | ||||||||||
a | Deutsche Bank AG | Capital Markets | 1,001 | 8,440 | ||||||||||
Deutsche Boerse AG | Capital Markets | 91 | 15,985 | |||||||||||
a | Deutsche Lufthansa AG | Airlines | 145 | 1,251 | ||||||||||
Deutsche Post AG | Air Freight & Logistics | 483 | 22,033 | |||||||||||
Deutsche Telekom AG | Diversified Telecommunication Services | 1,599 | 26,795 | |||||||||||
Deutsche Wohnen AG | Real Estate Management & Development | 170 | 8,510 | |||||||||||
a,c | DWS Group GmbH & Co. KGaA, 144A | Capital Markets | 17 | 586 | ||||||||||
E.ON SE | Multi-Utilities | 1,080 | 11,940 | |||||||||||
Evonik Industries AG | Chemicals | 95 | 2,462 | |||||||||||
a | Fielmann AG | Specialty Retail | 12 | 964 | ||||||||||
a | Fraport AG Frankfurt Airport Services Worldwide | Transportation Infrastructure | 19 | 753 | ||||||||||
Fresenius Medical Care AG & Co. KGaA | Health Care Providers & Services | 100 | 8,445 | |||||||||||
Fresenius SE and Co. KGaA | Health Care Providers & Services | 198 | 9,016 | |||||||||||
Fuchs Petrolub SE | Chemicals | 17 | 638 | |||||||||||
GEA Group AG | Machinery | 81 | 2,851 | |||||||||||
Grenkeleasing AG | Consumer Finance | 14 | 518 | |||||||||||
Hannover Rueck SE | Insurance | 29 | 4,496 | |||||||||||
HeidelbergCement AG | Construction Materials | 74 | 4,540 | |||||||||||
a | Hella GmbH & Co. KGaA | Auto Components | 22 | 1,110 | ||||||||||
a | HelloFresh SE | Internet & Direct Marketing Retail | 70 | 3,906 | ||||||||||
Henkel AG & Co. KGaA | Household Products | 50 | 4,685 | |||||||||||
Hochtief AG | Construction & Engineering | 10 | 779 | |||||||||||
Infineon Technologies AG | Semiconductors & Semiconductor Equipment | 640 | 18,098 | |||||||||||
KION Group AG | Machinery | 34 | 2,918 | |||||||||||
Knorr-Bremse AG | Machinery | 33 | 3,895 | |||||||||||
Lanxess AG | Chemicals | 41 | 2,353 | |||||||||||
LEG Immobilien AG | Real Estate Management & Development | 34 | 4,856 | |||||||||||
Merck KGaA | Pharmaceuticals | 63 | 9,201 | |||||||||||
METRO AG | Food & Staples Retailing | 86 | 859 | |||||||||||
MTU Aero Engines AG | Aerospace & Defense | 26 | 4,329 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | Insurance | 69 | 17,526 | |||||||||||
Nemetschek AG | Software | 27 | 1,979 | |||||||||||
a | Osram Licht AG | Electrical Equipment | 15 | 894 | ||||||||||
a | ProSiebenSat.1 Media SE | Media | 76 | 999 | ||||||||||
a | Puma SE | Textiles, Apparel & Luxury Goods | 41 | 3,695 | ||||||||||
Rational AG | Machinery | 2 | 1,569 | |||||||||||
Rheinmetall AG | Industrial Conglomerates | 21 | 1,890 | |||||||||||
RWE AG | Multi-Utilities | 312 | 11,700 | |||||||||||
SAP SE | Software | 554 | 86,247 | |||||||||||
b | Scout24 AG, Reg S | Interactive Media & Services | 52 | 4,543 | ||||||||||
Siemens AG | Industrial Conglomerates | 377 | 47,693 | |||||||||||
a | Siemens Energy AG | Electrical Equipment | 190 | 5,111 | ||||||||||
Siemens Healthineers AG | Health Care Equipment & Supplies | 69 | 3,099 | |||||||||||
Suedzucker AG | Food Products | 42 | 813 | |||||||||||
Symrise AG | Chemicals | 62 | 8,579 | |||||||||||
a | Talanx AG | Insurance | 26 | 839 |
franklintempleton.com | Semiannual Report | 201 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Germany (continued) | ||||||||||||||
a | TeamViewer AG | Software | 60 | $ | 2,964 | |||||||||
Telefonica Deutschland Holding AG | Diversified Telecommunication Services | 351 | 901 | |||||||||||
a | thyssenkrupp AG | Metals & Mining | 217 | 1,097 | ||||||||||
Traton SE | Machinery | 26 | 518 | |||||||||||
TUI AG | Hotels, Restaurants & Leisure | 216 | 818 | |||||||||||
Uniper SE | Independent Power and Renewable Electricity Producers | 56 | 1,810 | |||||||||||
United Internet AG | Diversified Telecommunication Services | 53 | 2,030 | |||||||||||
a | Varta AG | Electrical Equipment | 7 | 983 | ||||||||||
a | Volkswagen AG | Automobiles | 17 | 2,974 | ||||||||||
Vonovia SE | Real Estate Management & Development | 278 | 19,097 | |||||||||||
Wacker Chemie AG | Chemicals | 8 | 778 | |||||||||||
a | Zalando SE | Internet & Direct Marketing Retail | 79 | 7,402 | ||||||||||
|
| |||||||||||||
627,398 | ||||||||||||||
|
| |||||||||||||
Ireland 1.1% | ||||||||||||||
a | AIB Group PLC | Banks | 402 | 413 | ||||||||||
CRH PLC | Construction Materials | 389 | 14,061 | |||||||||||
a | Flutter Entertainment PLC | Hotels, Restaurants & Leisure | 60 | 9,502 | ||||||||||
Glanbia PLC | Food Products | 99 | 1,023 | |||||||||||
Kerry Group | Food Products | 76 | 9,759 | |||||||||||
a | Kingspan Group PLC | Building Products | 74 | 6,742 | ||||||||||
Smurfit Kappa Group PLC | Containers & Packaging | 119 | 4,677 | |||||||||||
|
| |||||||||||||
46,177 | ||||||||||||||
|
| |||||||||||||
Italy 3.3% | ||||||||||||||
A2A SpA | Multi-Utilities | 806 | 1,172 | |||||||||||
a | Amplifon SpA | Health Care Providers & Services | 60 | 2,149 | ||||||||||
Assicurazioni Generali SpA | Insurance | 623 | 8,785 | |||||||||||
a | Atlantia SpA | Transportation Infrastructure | 245 | 3,858 | ||||||||||
Banca Mediolanum SpA | Diversified Financial Services | 123 | 887 | |||||||||||
Buzzi Unicem SpA | Construction Materials | 33 | 769 | |||||||||||
Buzzi Unicem SpA, di Risp | Construction Materials | 23 | 303 | |||||||||||
Davide Campari-Milano NV | Beverages | 267 | 2,918 | |||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 11 | 2,217 | |||||||||||
Enel SpA | Electric Utilities | 3,841 | 33,412 | |||||||||||
Eni SpA | Oil, Gas & Consumable Fuels | 1,198 | 9,395 | |||||||||||
Ferrari NV | Automobiles | 60 | 11,022 | |||||||||||
a | FinecoBank Banca Fineco SpA | Banks | 297 | 4,094 | ||||||||||
Hera SpA | Multi-Utilities | 362 | 1,338 | |||||||||||
b | Infrastrutture Wireless Italiane SpA, Reg S | Diversified Telecommunication Services | 158 | 1,749 | ||||||||||
a | Intesa Sanpaolo SpA | Banks | 7,670 | 14,418 | ||||||||||
Italgas Reti SpA | Gas Utilities | 241 | 1,522 | |||||||||||
Leonardo SpA | Aerospace & Defense | 200 | 1,173 | |||||||||||
Mediobanca Banca di Credito Finanziario SpA | Banks | 374 | 2,938 | |||||||||||
a | Moncler SpA | Textiles, Apparel & Luxury Goods | 94 | 3,856 | ||||||||||
a | Nexi SpA | IT Services | 144 | 2,891 | ||||||||||
a | Pirelli & C SpA | Auto Components | 191 | 820 | ||||||||||
b | Poste Italiane SpA, Reg S | Insurance | 220 | 1,952 | ||||||||||
Prysmian SpA | Electrical Equipment | 117 | 3,408 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 47 | 2,411 | |||||||||||
Snam SpA | Gas Utilities | 1,071 | 5,512 | |||||||||||
Telecom Italia SpA/Milano | Diversified Telecommunication Services | 5,454 | 2,187 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 2,841 | 1,149 | |||||||||||
Tenaris SA | Energy Equipment & Services | 238 | 1,189 | |||||||||||
Terna Rete Elettrica Nazionale SpA | Electric Utilities | 679 | 4,757 |
202 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Italy (continued) | ||||||||||||||
a | UniCredit SpA | Banks | 1,045 | $ | 8,633 | |||||||||
UnipolSai Assicurazioni SpA | Insurance | 239 | 624 | |||||||||||
|
| |||||||||||||
143,508 | ||||||||||||||
|
| |||||||||||||
Kazakhstan 0.0%† | ||||||||||||||
KAZ Minerals PLC | Metals & Mining | 108 | 732 | |||||||||||
|
| |||||||||||||
Luxembourg 0.1% | ||||||||||||||
a | Eurofins Scientific SE | Life Sciences Tools & Services | 6 | 4,752 | ||||||||||
a | RTL Group SA | Media | 18 | 710 | ||||||||||
|
| |||||||||||||
5,462 | ||||||||||||||
|
| |||||||||||||
Netherlands 5.9% | ||||||||||||||
Aalberts NV | Machinery | 47 | 1,699 | |||||||||||
ABN AMRO Bank NV, GDR | Banks | 194 | 1,627 | |||||||||||
a | Adyen NV | IT Services | 13 | 23,972 | ||||||||||
Aegon NV | Insurance | 878 | 2,286 | |||||||||||
Akzo Nobel NV | Chemicals | 94 | 9,526 | |||||||||||
a | Altice Europe NV, A | Diversified Telecommunication Services | 279 | 1,339 | ||||||||||
a | Altice Europe NV, B | Diversified Telecommunication Services | 5 | 24 | ||||||||||
a | Argenx SE | Biotechnology | 3 | 791 | ||||||||||
a | Argenx SE | Biotechnology | 20 | 5,277 | ||||||||||
ASM International NV | Semiconductors & Semiconductor Equipment | 23 | 3,300 | |||||||||||
ASML Holding NV | Semiconductors & Semiconductor Equipment | 197 | 72,699 | |||||||||||
ASR Nederland NV | Insurance | 66 | 2,221 | |||||||||||
b | Euronext NV, Reg S | Capital Markets | 30 | 3,761 | ||||||||||
EXOR NV | Diversified Financial Services | 52 | 2,834 | |||||||||||
a | Grandvision NV | Specialty Retail | 27 | 755 | ||||||||||
Heineken Holding NV | Beverages | 53 | 4,130 | |||||||||||
Heineken NV | Beverages | 117 | 10,411 | |||||||||||
IMCD Group NV | Trading Companies & Distributors | 27 | 3,217 | |||||||||||
a | ING Groep NV | Banks | 1,923 | 13,659 | ||||||||||
a | JDE Peet’s BV | Beverages | 32 | 1,303 | ||||||||||
a,b,c | Just Eat Takeaway.com NV, 144A, Reg S | Internet & Direct Marketing Retail | 59 | 6,630 | ||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 532 | 15,752 | |||||||||||
Koninklijke DSM NV | Chemicals | 85 | 14,014 | |||||||||||
Koninklijke KPN NV | Diversified Telecommunication Services | 1,646 | 3,874 | |||||||||||
a | Koninklijke Philips NV | Health Care Equipment & Supplies | 448 | 21,119 | ||||||||||
Koninklijke Vopak NV | Oil, Gas & Consumable Fuels | 33 | 1,860 | |||||||||||
NN Group NV | Insurance | 154 | 5,788 | |||||||||||
a | QIAGEN NV | Life Sciences Tools & Services | 109 | 5,662 | ||||||||||
a | Randstad NV | Professional Services | 54 | 2,820 | ||||||||||
a | Signify NV | Electrical Equipment | 63 | 2,333 | ||||||||||
Wolters Kluwer NV | Professional Services | 132 | 11,275 | |||||||||||
|
| |||||||||||||
255,958 | ||||||||||||||
|
| |||||||||||||
Norway 1.0% | ||||||||||||||
Aker ASA | Diversified Financial Services | 10 | 430 | |||||||||||
Aker BP ASA | Oil, Gas & Consumable Fuels | 55 | 858 | |||||||||||
a | DNB ASA | Banks | 508 | 7,020 | ||||||||||
Equinor ASA | Oil, Gas & Consumable Fuels | 474 | 6,728 | |||||||||||
Gjensidige Forsikring ASA | Insurance | 84 | 1,700 | |||||||||||
Leroy Seafood Group ASA | Food Products | 140 | 802 | |||||||||||
Mowi ASA | Food Products | 209 | 3,705 | |||||||||||
a | Norsk Hydro ASA | Metals & Mining | 667 | 1,835 | ||||||||||
Orkla ASA | Food Products | 372 | 3,752 | |||||||||||
a | Salmar ASA | Food Products | 26 | 1,470 |
franklintempleton.com | Semiannual Report | 203 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Norway (continued) | ||||||||||||||
a | Schibsted ASA, A | Media | 39 | $ | 1,724 | |||||||||
a | Schibsted ASA, B | Media | 50 | 1,993 | ||||||||||
Telenor ASA | Diversified Telecommunication Services | 307 | 5,133 | |||||||||||
a | Tomra Systems ASA | Commercial Services & Supplies | 57 | 2,450 | ||||||||||
Yara International ASA | Chemicals | 86 | 3,304 | |||||||||||
|
| |||||||||||||
42,904 | ||||||||||||||
|
| |||||||||||||
Poland 0.4% | ||||||||||||||
a | Bank Pekao SA | Banks | 73 | 950 | ||||||||||
a | CD Projekt SA | Entertainment | 31 | 3,355 | ||||||||||
a | Cyfrowy Polsat SA | Media | 138 | 964 | ||||||||||
a | Dino Polska SA | Food & Staples Retailing | 25 | 1,473 | ||||||||||
Grupa Lotos SA | Oil, Gas & Consumable Fuels | 52 | 464 | |||||||||||
a | KGHM Polska Miedz SA | Metals & Mining | 65 | 1,984 | ||||||||||
a | PGE Polska Grupa Energetyczna SA | Electric Utilities | 353 | 586 | ||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 155 | 1,838 | |||||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | Oil, Gas & Consumable Fuels | 897 | 1,171 | |||||||||||
a | Powszechna Kasa Oszczednosci Bank Polski SA | Banks | 405 | 2,222 | ||||||||||
a | Powszechny Zaklad Ubezpieczen SA | Insurance | 270 | 1,731 | ||||||||||
a | Santander Bank Polska SA | Banks | 16 | 590 | ||||||||||
|
| |||||||||||||
17,328 | ||||||||||||||
|
| |||||||||||||
Portugal 0.3% | ||||||||||||||
EDP- Energias de Portugal SA | Electric Utilities | 1,373 | 6,754 | |||||||||||
Galp Energia SGPS SA, B | Oil, Gas & Consumable Fuels | 258 | 2,394 | |||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 121 | 1,945 | |||||||||||
|
| |||||||||||||
11,093 | ||||||||||||||
|
| |||||||||||||
Russian Federation 0.1% | ||||||||||||||
Evraz PLC | Metals & Mining | 281 | 1,252 | |||||||||||
Polymetal International PLC | Metals & Mining | 167 | 3,647 | |||||||||||
|
| |||||||||||||
4,899 | ||||||||||||||
|
| |||||||||||||
Spain 3.6% | ||||||||||||||
Acciona SA | Electric Utilities | 10 | 1,088 | |||||||||||
ACS Actividades de Construccion y Servicios SA | Construction & Engineering | 116 | 2,634 | |||||||||||
a | Aena SME SA | Transportation Infrastructure | 34 | 4,757 | ||||||||||
Amadeus IT Group SA | IT Services | 210 | 11,719 | |||||||||||
Banco Bilbao Vizcaya Argentaria SA | Banks | 3,292 | 9,157 | |||||||||||
a | Banco Santander SA | Banks | 8,098 | 15,190 | ||||||||||
Bankia SA | Banks | 600 | 874 | |||||||||||
Bankinter SA | Banks | 325 | 1,401 | |||||||||||
CaixaBank SA | Banks | 1,752 | 3,725 | |||||||||||
Cellnex Telecom SA | Diversified Telecommunication Services | 169 | 10,305 | |||||||||||
Corporacion Mapfre SA | Insurance | 505 | 792 | |||||||||||
EDP Renovaveis SA | | Independent Power and Renewable Electricity Producers | | 81 | 1,343 | |||||||||
Enagas SA | Gas Utilities | 120 | 2,772 | |||||||||||
Endesa SA | Electric Utilities | 157 | 4,203 | |||||||||||
Ferrovial SA | Construction & Engineering | 234 | 5,694 | |||||||||||
Grifols SA | Biotechnology | 163 | 4,700 | |||||||||||
Iberdrola SA | Electric Utilities | 2,934 | 36,160 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 520 | 14,513 | |||||||||||
Inmobiliaria Colonial SA | Equity Real Estate Investment Trusts (REITs | ) | 160 | 1,324 | ||||||||||
Merlin Properties Socimi SA | Equity Real Estate Investment Trusts (REITs | ) | 164 | 1,370 | ||||||||||
Naturgy Energy Group SA | Gas Utilities | 150 | 3,011 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 210 | 3,944 |
204 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Spain (continued) | ||||||||||||||
Repsol SA | Oil, Gas & Consumable Fuels | 700 | $ | 4,697 | ||||||||||
Siemens Gamesa Renewable Energy SA | Electrical Equipment | 108 | 2,924 | |||||||||||
Telefonica SA | Diversified Telecommunication Services | 2,349 | 8,090 | |||||||||||
Zardoya Otis SA | Machinery | 92 | 562 | |||||||||||
|
| |||||||||||||
156,949 | ||||||||||||||
|
| |||||||||||||
Sweden 5.5% | ||||||||||||||
a | Alfa Laval AB | Machinery | 150 | 3,332 | ||||||||||
Assa Abloy AB, B | Building Products | 452 | 10,611 | |||||||||||
Atlas Copco AB | Machinery | 185 | 7,756 | |||||||||||
Atlas Copco AB, A | Machinery | 311 | 14,900 | |||||||||||
Boliden AB | Metals & Mining | 133 | 3,963 | |||||||||||
Castellum AB | Real Estate Management & Development | 130 | 2,963 | |||||||||||
Electrolux AB, B | Household Durables | 112 | 2,620 | |||||||||||
Elekta AB, B | Health Care Equipment & Supplies | 176 | 2,223 | |||||||||||
Epiroc AB, A | Machinery | 305 | 4,435 | |||||||||||
Epiroc AB, B | Machinery | 189 | 2,633 | |||||||||||
EQT AB | Capital Markets | 102 | 1,985 | |||||||||||
Ericsson, B | Communications Equipment | 1,479 | 16,241 | |||||||||||
a | Essity AB, B | Household Products | 301 | 10,184 | ||||||||||
b,c | Evolution Gaming Group AB, 144A, Reg S | Hotels, Restaurants & Leisure | 66 | 4,386 | ||||||||||
a | Fastighets AB Balder, B | Real Estate Management & Development | 48 | 2,441 | ||||||||||
Hennes & Mauritz AB, B | Specialty Retail | 434 | 7,504 | |||||||||||
a | Hexagon AB, B | Electronic Equipment, Instruments & Components | 126 | 9,542 | ||||||||||
Holmen AB, B | Paper & Forest Products | 46 | 1,712 | |||||||||||
Husqvarna AB, B | Household Durables | 195 | 2,151 | |||||||||||
ICA Gruppen AB | Food & Staples Retailing | 38 | 1,933 | |||||||||||
a | Industrivarden AB, A | Diversified Financial Services | 105 | 2,848 | ||||||||||
a | Industrivarden AB, C | Diversified Financial Services | 80 | 2,135 | ||||||||||
Investment AB Latour, B | Industrial Conglomerates | 61 | 1,437 | |||||||||||
Investor AB, A | Diversified Financial Services | 74 | 4,812 | |||||||||||
Investor AB, B | Diversified Financial Services | 224 | 14,691 | |||||||||||
Kinnevik AB, B | Diversified Financial Services | 118 | 4,808 | |||||||||||
a | L E Lundbergforetagen AB, B | Diversified Financial Services | 35 | 1,737 | ||||||||||
Lifco AB, B | Industrial Conglomerates | 22 | 1,710 | |||||||||||
Lundin Energy AB | Oil, Gas & Consumable Fuels | 94 | 1,875 | |||||||||||
a | Nibe Industrier AB | Building Products | 147 | 3,796 | ||||||||||
a | Saab AB, B | Aerospace & Defense | 45 | 1,330 | ||||||||||
a | Sandvik AB | Machinery | 532 | 10,456 | ||||||||||
a | Securitas AB, B | Commercial Services & Supplies | 152 | 2,331 | ||||||||||
a,b | Sinch AB, Reg S | Software | 20 | 1,638 | ||||||||||
a | Skandinaviska Enskilda Banken AB, A | Banks | 702 | 6,247 | ||||||||||
a | Skandinaviska Enskilda Banken AB, C | Banks | 12 | 118 | ||||||||||
a | Skanska AB, B | Construction & Engineering | 173 | 3,669 | ||||||||||
SKF AB, B | Machinery | 188 | 3,901 | |||||||||||
a | Svenska Cellulosa AB, A | Paper & Forest Products | 12 | 176 | ||||||||||
a | Svenska Cellulosa AB, B | Paper & Forest Products | 287 | 3,946 | ||||||||||
a | Svenska Handelsbanken AB, A | Banks | 733 | 6,169 | ||||||||||
a | Svenska Handelsbanken AB, B | Banks | 18 | 179 | ||||||||||
SWECO AB, B | Construction & Engineering | 33 | 1,835 | |||||||||||
a | Swedbank AB, A | Banks | 493 | 7,753 | ||||||||||
Swedish Match AB | Tobacco | 76 | 6,223 | |||||||||||
a | Swedish Orphan Biovitrum AB | Biotechnology | 86 | 2,082 | ||||||||||
Tele2 AB, B | Wireless Telecommunication Services | 265 | 3,754 | |||||||||||
Telefonaktiebolaget LM Ericsson, A | Communications Equipment | 26 | 310 | |||||||||||
Telia Co. AB | Diversified Telecommunication Services | 1,280 | 5,270 |
franklintempleton.com | Semiannual Report | 205 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Sweden (continued) | ||||||||||||||
a | Trelleborg AB, B | Machinery | 117 | $ | 2,082 | |||||||||
a | Volvo AB, A | Machinery | 110 | 2,136 | ||||||||||
a | Volvo AB, B | Machinery | 740 | 14,308 | ||||||||||
|
| |||||||||||||
239,277 | ||||||||||||||
|
| |||||||||||||
Switzerland 16.2% | ||||||||||||||
ABB Ltd. | Electrical Equipment | 875 | 22,333 | |||||||||||
Adecco Group AG | Professional Services | 76 | 4,027 | |||||||||||
a | Alcon Inc. | Health Care Equipment & Supplies | 226 | 12,865 | ||||||||||
Baloise Holding AG | Insurance | 22 | 3,245 | |||||||||||
Banque Cantonale Vaudoise | Banks | 13 | 1,324 | |||||||||||
Barry Callebaut AG | Food Products | 1 | 2,229 | |||||||||||
Chocoladefabriken Lindt & Spruengli AG | Food Products | 1 | 8,463 | |||||||||||
Cie Financiere Richemont SA | Textiles, Apparel & Luxury Goods | 251 | 16,856 | |||||||||||
Clariant AG | Chemicals | 96 | 1,897 | |||||||||||
Coca-Cola HBC AG | Beverages | 96 | 2,373 | |||||||||||
Credit Suisse Group AG | Capital Markets | 1,159 | 11,661 | |||||||||||
DKSH Holding AG | Professional Services | 18 | 1,259 | |||||||||||
EMS-Chemie Holding AG | Chemicals | 4 | 3,598 | |||||||||||
a | Flughafen Zurich AG | Transportation Infrastructure | 9 | 1,240 | ||||||||||
Geberit AG | Building Products | 17 | 10,099 | |||||||||||
Georg Fischer AG | Machinery | 2 | 2,088 | |||||||||||
Givaudan AG | Chemicals | 5 | 21,605 | |||||||||||
Helvetia Holding AG | Insurance | 17 | 1,449 | |||||||||||
Julius Baer Group Ltd. | Capital Markets | 106 | 4,531 | |||||||||||
Kuehne + Nagel International AG | Marine | 25 | 4,879 | |||||||||||
LafargeHolcim Ltd., B | Construction Materials | 254 | 11,609 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 72 | 5,617 | |||||||||||
Lonza Group AG | Life Sciences Tools & Services | 37 | 22,899 | |||||||||||
Nestle SA | Food Products | 1,376 | 163,757 | |||||||||||
Novartis AG | Pharmaceuticals | 1,062 | 92,369 | |||||||||||
OC Oerlikon Corp. AG | Machinery | 103 | 824 | |||||||||||
Partners Group Holding AG | Capital Markets | 8 | 7,380 | |||||||||||
PSP Swiss Property AG | Real Estate Management & Development | 21 | 2,549 | |||||||||||
Roche Holding AG | Pharmaceuticals | 14 | 4,818 | |||||||||||
Roche Holding AG | Pharmaceuticals | 343 | 117,656 | |||||||||||
Schindler Holding AG | Machinery | 9 | 2,455 | |||||||||||
Schindler Holding AG, PC | Machinery | 20 | 5,475 | |||||||||||
SGS SA | Professional Services | 3 | 8,062 | |||||||||||
SIG Combibloc Group AG | Containers & Packaging | 141 | 2,838 | |||||||||||
Sika AG | Chemicals | 68 | 16,749 | |||||||||||
a | Sonova Holding AG | Health Care Equipment & Supplies | 26 | 6,611 | ||||||||||
STMicroelectronics NV | Semiconductors & Semiconductor Equipment | 314 | 9,669 | |||||||||||
Straumann Holding AG | Health Care Equipment & Supplies | 5 | 5,061 | |||||||||||
Sulzer AG | Machinery | 8 | 645 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 14 | 3,275 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 21 | 946 | |||||||||||
Swiss Life Holding AG | Insurance | 16 | 6,069 | |||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 37 | 3,367 | |||||||||||
Swiss Re AG | Insurance | 140 | 10,405 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 12 | 6,382 | |||||||||||
Temenos AG | Software | 30 | 4,051 | |||||||||||
UBS Group AG | Capital Markets | 1,653 | 18,532 | |||||||||||
b | VAT Group AG, Reg S | Machinery | 13 | 2,492 | ||||||||||
Vifor Pharma AG | Pharmaceuticals | 25 | 3,412 |
206 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
Switzerland (continued) | ||||||||||||||
Zurich Insurance Group AG | Insurance | 74 | �� | $ | 25,830 | |||||||||
|
| |||||||||||||
709,825 | ||||||||||||||
|
| |||||||||||||
United Arab Emirates 0.0%† | ||||||||||||||
a | NMC Health PLC | Health Care Providers & Services | 60 | — | ||||||||||
|
| |||||||||||||
United Kingdom 21.5% | ||||||||||||||
3i Group PLC | Capital Markets | 476 | 6,133 | |||||||||||
Admiral Group PLC | Insurance | 102 | 3,443 | |||||||||||
Anglo American PLC | Metals & Mining | 609 | 14,769 | |||||||||||
Antofagasta PLC | Metals & Mining | 168 | 2,223 | |||||||||||
Ashmore Group PLC | Capital Markets | 219 | 1,014 | |||||||||||
Ashtead Group PLC | Trading Companies & Distributors | 222 | 8,036 | |||||||||||
Associated British Foods PLC | Food Products | 170 | 4,104 | |||||||||||
AstraZeneca PLC | Pharmaceuticals | 649 | 70,957 | |||||||||||
Auto Trader Group PLC | Interactive Media & Services | 445 | 3,239 | |||||||||||
Avast PLC | Software | 274 | 1,867 | |||||||||||
AVEVA Group PLC | Software | 31 | 1,918 | |||||||||||
Aviva PLC | Insurance | 1,945 | 7,184 | |||||||||||
B&M European Value Retail SA | Multiline Retail | 425 | 2,718 | |||||||||||
BAE Systems PLC | Aerospace & Defense | 1,588 | 9,895 | |||||||||||
a | Barclays PLC | Banks | 8,553 | 10,793 | ||||||||||
Barratt Developments PLC | Household Durables | 495 | 3,045 | |||||||||||
Bellway PLC | Household Durables | 59 | 1,793 | |||||||||||
BHP Group PLC | Metals & Mining | 1,028 | 21,979 | |||||||||||
BP PLC | Oil, Gas & Consumable Fuels | 9,816 | 28,578 | |||||||||||
British American Tobacco PLC | Tobacco | 1,128 | 40,504 | |||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 443 | 1,932 | ||||||||||
BT Group PLC | Diversified Telecommunication Services | 4,301 | 5,470 | |||||||||||
Bunzl PLC | Trading Companies & Distributors | 165 | 5,348 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 198 | 3,978 | |||||||||||
Centrica PLC | Multi-Utilities | 2,883 | 1,494 | |||||||||||
a | CNH Industrial NV | Machinery | 484 | 3,773 | ||||||||||
Compass Group PLC | Hotels, Restaurants & Leisure | 879 | 13,284 | |||||||||||
ConvaTec Group PLC | Health Care Equipment & Supplies | 790 | 1,826 | |||||||||||
Croda International PLC | Chemicals | 60 | 4,848 | |||||||||||
DCC PLC | Industrial Conglomerates | 48 | 3,728 | |||||||||||
Derwent London PLC | Equity Real Estate Investment Trusts (REITs | ) | 48 | 1,595 | ||||||||||
Diageo PLC | Beverages | 1,132 | 38,781 | |||||||||||
Direct Line Insurance Group PLC | Insurance | 671 | 2,337 | |||||||||||
DS Smith PLC | Containers & Packaging | 633 | 2,412 | |||||||||||
easyJet PLC | Airlines | 115 | 746 | |||||||||||
Experian PLC | Professional Services | 447 | 16,874 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 111 | 11,210 | |||||||||||
a | Fiat Chrysler Automobiles NV | Automobiles | 547 | 6,715 | ||||||||||
Fresnillo PLC | Metals & Mining | 93 | 1,439 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 2,439 | 45,784 | |||||||||||
a | GVC Holdings PLC | Hotels, Restaurants & Leisure | 287 | 3,614 | ||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 186 | 5,639 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 174 | 3,514 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 83 | 2,783 | |||||||||||
a | Hiscox Ltd. | Insurance | 166 | 1,917 | ||||||||||
HomeServe PLC | Commercial Services & Supplies | 132 | 2,109 | |||||||||||
Howden Joinery Group PLC | Trading Companies & Distributors | 269 | 2,054 | |||||||||||
HSBC Holdings PLC | Banks | 10,069 | 39,247 | |||||||||||
IMI PLC | Machinery | 136 | 1,846 | |||||||||||
Imperial Brands PLC | Tobacco | 467 | 8,256 |
franklintempleton.com | Semiannual Report | 207 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
a | Informa PLC | Media | 729 | $ | 3,548 | |||||||||
a | InterContinental Hotels Group PLC | Hotels, Restaurants & Leisure | 89 | 4,711 | ||||||||||
Intermediate Capital Group PLC | Capital Markets | 139 | 2,144 | |||||||||||
International Consolidated Airlines Group SA | Airlines | 258 | 317 | |||||||||||
International Consolidated Airlines Group SA | Airlines | 267 | 328 | |||||||||||
Intertek Group PLC | Professional Services | 80 | 6,551 | |||||||||||
ITV PLC | Media | 1,805 | 1,578 | |||||||||||
J Sainsbury PLC | Food & Staples Retailing | 801 | 1,977 | |||||||||||
JD Sports Fashion PLC | Specialty Retail | 212 | 2,218 | |||||||||||
Johnson Matthey PLC | Chemicals | 93 | 2,834 | |||||||||||
Kingfisher PLC | Specialty Retail | 1,036 | 3,974 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 350 | 2,364 | ||||||||||
Legal & General Group PLC | Insurance | 2,934 | 7,144 | |||||||||||
a | Lloyds Banking Group PLC | Banks | 34,814 | 11,862 | ||||||||||
London Stock Exchange Group PLC | Capital Markets | 155 | 17,786 | |||||||||||
M&G PLC | Diversified Financial Services | 1,294 | 2,668 | |||||||||||
Meggitt PLC | Aerospace & Defense | 374 | 1,245 | |||||||||||
a | Melrose Industries PLC | Electrical Equipment | 2,388 | 3,566 | ||||||||||
Mondi PLC | Paper & Forest Products | 238 | 5,045 | |||||||||||
National Grid PLC | Multi-Utilities | 1,735 | 19,958 | |||||||||||
a | Natwest Group PLC | Banks | 2,258 | 3,096 | ||||||||||
Next PLC | Multiline Retail | 62 | 4,769 | |||||||||||
a | Ocado Group PLC | Internet & Direct Marketing Retail | 240 | 8,514 | ||||||||||
Pearson PLC | Media | 369 | 2,620 | |||||||||||
Pennon Group PLC | Water Utilities | 202 | 2,692 | |||||||||||
Persimmon PLC | Household Durables | 156 | 4,988 | |||||||||||
Phoenix Group Holdings PLC | Insurance | 281 | 2,500 | |||||||||||
Prudential PLC | Insurance | 1,283 | 18,395 | |||||||||||
Quilter PLC | Capital Markets | 878 | 1,455 | |||||||||||
Reckitt Benckiser Group PLC | Household Products | 311 | 30,396 | |||||||||||
RELX PLC | Professional Services | 918 | 20,484 | |||||||||||
a | Renishaw PLC | Electronic Equipment, Instruments & Components | 17 | 1,235 | ||||||||||
a | Rentokil Initial PLC | Commercial Services & Supplies | 921 | 6,377 | ||||||||||
Rightmove PLC | Interactive Media & Services | 428 | 3,468 | |||||||||||
Rolls-Royce Holdings PLC | Aerospace & Defense | 849 | 1,427 | |||||||||||
Royal Dutch Shell PLC, A | Oil, Gas & Consumable Fuels | 2,023 | 25,209 | |||||||||||
Royal Dutch Shell PLC, B | Oil, Gas & Consumable Fuels | 1,838 | 22,341 | |||||||||||
RSA Insurance Group PLC | Insurance | 507 | 2,961 | |||||||||||
Schroders PLC | Capital Markets | 55 | 1,916 | |||||||||||
Segro PLC | Equity Real Estate Investment Trusts (REITs | ) | 579 | 6,979 | ||||||||||
Severn Trent PLC | Water Utilities | 117 | 3,689 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 433 | 8,489 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 197 | 3,502 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 36 | 5,150 | |||||||||||
SSE PLC | Electric Utilities | 512 | 7,996 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | 262 | 3,153 | |||||||||||
a | Standard Chartered PLC | Banks | 1,288 | 5,930 | ||||||||||
Standard Life Aberdeen PLC | Capital Markets | 1,094 | 3,196 | |||||||||||
Tate & Lyle PLC | Food Products | 235 | 2,021 | |||||||||||
Taylor Wimpey PLC | Household Durables | 1,759 | 2,466 | |||||||||||
TechnipFMC PLC | Energy Equipment & Services | 232 | 1,487 | |||||||||||
Tesco PLC | Food & Staples Retailing | 4,748 | 13,044 | |||||||||||
The Berkeley Group Holdings PLC | Household Durables | 58 | 3,170 | |||||||||||
The Sage Group PLC | Software | 538 | 5,013 | |||||||||||
Travis Perkins PLC | Trading Companies & Distributors | 123 | 1,727 | |||||||||||
Unilever NV | Personal Products | 717 | 43,301 |
208 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks and Other Equity Interests (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
Unilever PLC | Personal Products | 539 | $ | 33,280 | ||||||||||
United Utilities Group PLC | Water Utilities | 335 | 3,706 | |||||||||||
Vodafone Group PLC | Wireless Telecommunication Services | 13,302 | 17,658 | |||||||||||
Weir Group PLC | Machinery | 127 | 2,056 | |||||||||||
a | Whitbread PLC | Hotels, Restaurants & Leisure | 98 | 2,692 | ||||||||||
William Morrison Supermarkets PLC | Food & Staples Retailing | 1,078 | 2,371 | |||||||||||
WPP PLC | Media | 578 | 4,543 | |||||||||||
|
| |||||||||||||
942,025 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $4,866,560) | 4,297,137 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 0.9% | ||||||||||||||
Germany 0.9% | ||||||||||||||
d | Bayerische Motoren Werke AG, 5.396%, pfd. | Automobiles | 28 | 1,533 | ||||||||||
d | Fuchs Petrolub SE, 2.236%, pfd. | Chemicals | 32 | 1,628 | ||||||||||
d | Henkel AG & Co. KGaA, 2.071%, pfd. | Household Products | 85 | 8,903 | ||||||||||
a | Porsche Automobil Holding SE, pfd. | Automobiles | 77 | 4,596 | ||||||||||
d | Sartorius AG, 0.103%, pfd. | Health Care Equipment & Supplies | 17 | 6,985 | ||||||||||
a | Volkswagen AG, pfd. | Automobiles | 90 | 14,501 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $43,855) | 38,146 | |||||||||||||
|
| |||||||||||||
Short Term Investments 0.2% | ||||||||||||||
United States 0.2% | ||||||||||||||
e,f | Institutional Fiduciary Trust Portfolio, 0.00% | Money Market Funds | 11,429 | 11,429 | ||||||||||
�� |
|
| ||||||||||||
Total Investments (Cost $4,921,844) 99.4% | 4,346,712 | |||||||||||||
Other Assets, less Liabilities 0.6% | 24,752 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 4,371,464 | ||||||||||||
|
|
See Abbreviations on page 331.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $37,365, representing 0.9% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $12,029, representing 0.3% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
eSee Note 3(c) regarding investments in affiliated management investment companies.
fThe rate shown is the annualized seven-day effective yield at period end.
franklintempleton.com | Semiannual Report | 209 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
At September 30, 2020 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
Forward Exchange Contracts | ||||||||||||||||||||||||||||
Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Danish Krone | BOFA | Buy | 1,017,800 | $ | 160,338 | 10/02/20 | $ | 2 | $ | — | ||||||||||||||||||
Danish Krone | BOFA | Sell | 1,017,800 | 163,589 | 10/02/20 | 3,248 | — | |||||||||||||||||||||
Euro | BOFA | Buy | 631,933 | 741,022 | 10/02/20 | 15 | — | |||||||||||||||||||||
Euro | BOFA | Buy | 631,933 | 741,026 | 10/02/20 | 11 | — | |||||||||||||||||||||
Euro | HSBK | Buy | 631,933 | 741,025 | 10/02/20 | 12 | — | |||||||||||||||||||||
Euro | BOFA | Sell | 631,933 | 756,255 | 10/02/20 | 15,219 | — | |||||||||||||||||||||
Euro | HSBK | Sell | 631,933 | 756,254 | 10/02/20 | 15,218 | — | |||||||||||||||||||||
Euro | UBSW | Sell | 631,933 | 756,247 | 10/02/20 | 15,210 | — | |||||||||||||||||||||
Great British Pound | DBAB | Buy | 762,900 | 986,277 | 10/02/20 | — | — | |||||||||||||||||||||
Great British Pound | DBAB | Sell | 762,900 | 1,021,699 | 10/02/20 | 35,422 | — | |||||||||||||||||||||
Norwegian Krone | BOFA | Buy | 405,500 | 43,338 | 10/02/20 | 1 | — | |||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 405,500 | 46,736 | 10/02/20 | 3,397 | — | |||||||||||||||||||||
Polish Zloty | BOFA | Buy | 75,500 | 19,528 | 10/02/20 | — | (1 | ) | ||||||||||||||||||||
Polish Zloty | BOFA | Sell | 75,500 | 20,583 | 10/02/20 | 1,055 | — | |||||||||||||||||||||
Swedish Krona | BOFA | Buy | 1,930,800 | 215,729 | 10/02/20 | 3 | — | |||||||||||||||||||||
Swedish Krona | BOFA | Sell | 1,930,800 | 223,928 | 10/02/20 | 8,197 | — | |||||||||||||||||||||
Swiss Franc | MSCO | Buy | 631,300 | 687,129 | 10/02/20 | — | — | |||||||||||||||||||||
Swiss Franc | MSCO | Sell | 631,300 | 701,729 | 10/02/20 | 14,600 | — | |||||||||||||||||||||
Danish Krone | BOFA | Sell | 1,089,800 | 171,755 | 11/03/20 | — | (16 | ) | ||||||||||||||||||||
Euro | BOFA | Sell | 633,900 | 743,814 | 11/03/20 | — | (20 | ) | ||||||||||||||||||||
Euro | HSBK | Sell | 633,900 | 743,820 | 11/03/20 | — | (14 | ) | ||||||||||||||||||||
Euro | UBSW | Sell | 633,900 | 743,814 | 11/03/20 | — | (20 | ) | ||||||||||||||||||||
Great British Pound | DBAB | Sell | 764,000 | 987,855 | 11/03/20 | — | (9 | ) | ||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 423,200 | 45,230 | 11/03/20 | — | (2 | ) | ||||||||||||||||||||
Polish Zloty | BOFA | Sell | 71,100 | 18,391 | 11/03/20 | — | — | |||||||||||||||||||||
Swedish Krona | BOFA | Sell | 2,184,000 | 244,094 | 11/03/20 | — | (9 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Sell | 650,800 | 708,976 | 11/03/20 | — | (7 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 111,610 | $ | (98 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | 111,512 | |||||||||||||||||||||||||
|
|
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
EURO STOXX 50 Index | Long | 1 | $ | 37,454 | 12/18/20 | $ | (1,496 | ) |
*As of period end.
See Note 8 regarding other derivative information.
210 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE France ETF
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 19.34 | $ | 23.86 | $ | 25.33 | $ | 25.32 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: |
| |||||||||||||||
Net investment incomec | 0.28 | 0.52 | 0.70 | 0.08 | ||||||||||||
Net realized and unrealized gains (losses) | 3.58 | (4.47 | ) | (1.48 | ) | (0.01 | ) | |||||||||
|
| |||||||||||||||
Total from investment operations | 3.86 | (3.95 | ) | (0.78 | ) | 0.07 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.17 | ) | (0.57 | ) | (0.69 | ) | (0.06 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 23.03 | $ | 19.34 | $ | 23.86 | $ | 25.33 | ||||||||
|
| |||||||||||||||
Total returnd | 20.00% | (17.08)% | (3.07)% | 0.26% | ||||||||||||
Ratios to average net assetse |
| |||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 2.54% | 2.14% | 2.90% | 0.78% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $5,758 | $8,702 | $2,386 | $2,533 | ||||||||||||
Portfolio turnover ratef | 1.57% | g | 2.60% | g | 5.80% | 1.90% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 1.57% | 2.60% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 211 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE France ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 100.0% | ||||||||||||||
France 97.2% | ||||||||||||||
a | Accor SA | Hotels, Restaurants & Leisure | 740 | $ | 20,826 | |||||||||
Aeroports de Paris SA | Transportation Infrastructure | 115 | 11,510 | |||||||||||
Air Liquide SA | Chemicals | 1,890 | 300,310 | |||||||||||
a | Airbus SE | Aerospace & Defense | 2,255 | 164,133 | ||||||||||
b | ALD SA, 144A | Road & Rail | 330 | 3,065 | ||||||||||
a | Alstom SA | Machinery | 755 | 37,645 | ||||||||||
a | Amundi SA | Capital Markets | 230 | 16,237 | ||||||||||
Arkema SA | Chemicals | 270 | 28,692 | |||||||||||
a | Atos SE | IT Services | 385 | 31,061 | ||||||||||
AXA SA | Insurance | 7,810 | 144,483 | |||||||||||
Biomerieux | Health Care Equipment & Supplies | 175 | 27,458 | |||||||||||
a | BNP Paribas SA | Banks | 4,395 | 159,639 | ||||||||||
Bollore | Entertainment | 4,005 | 14,972 | |||||||||||
Bouygues SA | Construction & Engineering | 860 | 29,871 | |||||||||||
a | Bureau Veritas SA | Professional Services | 1,120 | 25,296 | ||||||||||
Capgemini SE | IT Services | 640 | 82,367 | |||||||||||
Carrefour SA | Food & Staples Retailing | 2,364 | 37,881 | |||||||||||
a | Casino Guichard-Perrachon SA | Food & Staples Retailing | 220 | 5,353 | ||||||||||
Cie Generale des Etablissements Michelin SCA | Auto Components | 710 | 76,364 | |||||||||||
a | CNP Assurances | Insurance | 605 | 7,577 | ||||||||||
a | Compagnie de Saint-Gobain | Building Products | 1,980 | 83,610 | ||||||||||
Covivio | Equity Real Estate Investment Trusts (REITs | ) | 205 | 14,448 | ||||||||||
a | Credit Agricole SA | Banks | 4,685 | 41,050 | ||||||||||
Danone SA | Food Products | 2,435 | 157,675 | |||||||||||
a | Dassault Aviation SA | Aerospace & Defense | 10 | 8,502 | ||||||||||
Dassault Systemes | Software | 535 | 100,222 | |||||||||||
Edenred | IT Services | 1,000 | 45,030 | |||||||||||
EDF SA | Electric Utilities | 2,070 | 21,910 | |||||||||||
a | Eiffage SA | Construction & Engineering | 315 | 25,790 | ||||||||||
a | Engie SA | Multi-Utilities | 6,725 | 90,059 | ||||||||||
a | EssilorLuxottica SA | Textiles, Apparel & Luxury Goods | 1,195 | 162,763 | ||||||||||
a | Eurazeo SE | Diversified Financial Services | 185 | 10,023 | ||||||||||
a | Faurecia SE | Auto Components | 300 | 12,988 | ||||||||||
Gecina SA | Equity Real Estate Investment Trusts (REITs | ) | 210 | 27,753 | ||||||||||
a | Getlink SE | Transportation Infrastructure | 1,845 | 25,097 | ||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 125 | 107,913 | |||||||||||
ICADE | Equity Real Estate Investment Trusts (REITs | ) | 130 | 7,305 | ||||||||||
Iliad SA | Diversified Telecommunication Services | 60 | 11,050 | |||||||||||
Imerys SA | Construction Materials | 160 | 5,959 | |||||||||||
a | Ingenico Group SA | Electronic Equipment, Instruments & Components | 250 | 38,785 | ||||||||||
Ipsen SA | Pharmaceuticals | 140 | 14,702 | |||||||||||
a | JCDecaux SA | Media | 300 | 5,196 | ||||||||||
Kering SA | Textiles, Apparel & Luxury Goods | 300 | 199,679 | |||||||||||
Klepierre SA | Equity Real Estate Investment Trusts (REITs | ) | 765 | 10,752 | ||||||||||
L’Oreal SA | Personal Products | 975 | 317,390 | |||||||||||
La Francaise des Jeux SAEM | Hotels, Restaurants & Leisure | 355 | 13,080 | |||||||||||
Legrand SA | Electrical Equipment | 1,085 | 86,747 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | Textiles, Apparel & Luxury Goods | 1,015 | 475,382 | |||||||||||
a | Natixis SA | Capital Markets | 3,370 | 7,597 | ||||||||||
Orange SA | Diversified Telecommunication Services | 7,760 | 80,842 | |||||||||||
a | Orpea | Health Care Providers & Services | 200 | 22,764 | ||||||||||
Pernod Ricard SA | Beverages | 840 | 134,111 | |||||||||||
a | Peugeot SA | Automobiles | 2,210 | 40,169 | ||||||||||
Plastic Omnium SA | Auto Components | 225 | 5,952 | |||||||||||
Publicis Groupe | Media | 923 | 29,851 | |||||||||||
Remy Cointreau SA | Beverages | 100 | 18,270 | |||||||||||
a | Renault SA | Automobiles | 745 | 19,390 |
212 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE France ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
France (continued) | ||||||||||||||
a | Rexel SA | Trading Companies & Distributors | 1,220 | $ | 15,365 | |||||||||
Rubis SCA | Gas Utilities | 385 | 15,458 | |||||||||||
a | Safran SA | Aerospace & Defense | 1,305 | 129,219 | ||||||||||
Sanofi | Pharmaceuticals | 4,420 | 442,275 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 100 | 34,546 | |||||||||||
Schneider Electric SE | Electrical Equipment | 2,135 | 265,508 | |||||||||||
a | SCOR SE | Insurance | 635 | 17,618 | ||||||||||
SEB SA | Household Durables | 110 | 17,917 | |||||||||||
a | Societe Generale SA | Banks | 3,145 | 41,741 | ||||||||||
Sodexo SA | Hotels, Restaurants & Leisure | 355 | 25,402 | |||||||||||
Suez SA | Multi-Utilities | 1,505 | 27,893 | |||||||||||
Teleperformance | Professional Services | 235 | 72,641 | |||||||||||
Thales SA | Aerospace & Defense | 405 | 30,471 | |||||||||||
Total SE | Oil, Gas & Consumable Fuels | 9,860 | 337,620 | |||||||||||
a | Ubisoft Entertainment SA | Entertainment | 380 | 34,339 | ||||||||||
Valeo SA | Auto Components | 970 | 29,859 | |||||||||||
Veolia Environnement SA | Multi-Utilities | 2,040 | 44,065 | |||||||||||
Vinci SA | Construction & Engineering | 1,885 | 158,091 | |||||||||||
Vivendi SA | Entertainment | 3,250 | 90,705 | |||||||||||
Wendel SE | Diversified Financial Services | 110 | 9,990 | |||||||||||
a,c | Worldline SA, Reg S | IT Services | 595 | 48,925 | ||||||||||
|
| |||||||||||||
5,594,194 | ||||||||||||||
|
| |||||||||||||
Luxembourg 0.7% | ||||||||||||||
a | Eurofins Scientific SE | Life Sciences Tools & Services | 50 | 39,600 | ||||||||||
|
| |||||||||||||
Netherlands 0.5% | ||||||||||||||
c | Euronext NV, Reg S | Capital Markets | 250 | 31,339 | ||||||||||
|
| |||||||||||||
Switzerland 1.4% | ||||||||||||||
STMicroelectronics NV | Semiconductors & Semiconductor Equipment | 2,580 | 79,448 | |||||||||||
|
| |||||||||||||
United Kingdom 0.2% | ||||||||||||||
TechnipFMC PLC | Energy Equipment & Services | 1,845 | 11,822 | |||||||||||
|
| |||||||||||||
Total Investments | 5,756,403 | |||||||||||||
Other Assets, less Liabilities 0.0%† | 1,134 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 5,757,537 | ||||||||||||
|
|
See Abbreviations on page 331.
†Rounds to less than 0.1% of net assets.
a Non-income producing.
b Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. This security has been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At September 30, 2020, the value of this security was $3,065, representing 0.1% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $80,264, representing 1.4% of net assets.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 213 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Germany ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 16.73 | $ | 20.70 | $ | 24.60 | $ | 25.55 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.57 | 0.52 | 0.53 | 0.05 | ||||||||||||
Net realized and unrealized gains (losses) | 5.70 | (3.92 | ) | (3.83 | ) | (1.00 | ) | |||||||||
|
| |||||||||||||||
Total from investment operations | 6.27 | (3.40 | ) | (3.30 | ) | (0.95 | ) | |||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.24 | ) | (0.57 | ) | (0.60 | ) | — | |||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 22.76 | $ | 16.73 | $ | 20.70 | $ | 24.60 | ||||||||
|
| |||||||||||||||
Total returnd | 37.63% | (17.00)% | (13.72)% | (3.72)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 5.44% | 2.46% | 2.44% | 0.52% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $7,967 | $4,182 | $4,140 | $2,460 | ||||||||||||
Portfolio turnover ratef | 3.41% | g | 5.74% | g | 10.75% | 1.75% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 3.41% | 5.74% | —% | —% |
214 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Germany ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 94.3% | ||||||||||||||
Germany 93.3% | ||||||||||||||
1&1 Drillisch AG | Wireless Telecommunication Services | 259 | $ | 5,745 | ||||||||||
a | Adidas AG | Textiles, Apparel & Luxury Goods | 1,127 | 364,887 | ||||||||||
Allianz SE | Insurance | 2,436 | 467,393 | |||||||||||
a | Aroundtown SA | Real Estate Management & Development | 7,014 | 35,285 | ||||||||||
BASF SE | Chemicals | 5,362 | 326,837 | |||||||||||
Bayer AG | Pharmaceuticals | 5,761 | 360,143 | |||||||||||
Bayerische Motoren Werke AG | Automobiles | 1,883 | 136,880 | |||||||||||
Bechtle AG | IT Services | 161 | 32,643 | |||||||||||
Beiersdorf AG | Personal Products | 588 | 66,883 | |||||||||||
Brenntag AG | Trading Companies & Distributors | 910 | 57,944 | |||||||||||
Carl Zeiss Meditec AG | Health Care Equipment & Supplies | 217 | 27,482 | |||||||||||
a | Commerzbank AG | Banks | 6,083 | 29,910 | ||||||||||
Continental AG | Auto Components | 637 | 69,081 | |||||||||||
Covestro AG | Chemicals | 1,001 | 49,711 | |||||||||||
a | CTS Eventim AG & Co. KGaA | Entertainment | 343 | 16,604 | ||||||||||
Daimler AG | Automobiles | 4,725 | 255,069 | |||||||||||
a | Delivery Hero SE | Internet & Direct Marketing Retail | 826 | 95,040 | ||||||||||
a | Deutsche Bank AG | Capital Markets | 11,991 | 101,100 | ||||||||||
Deutsche Boerse AG | Capital Markets | 1,078 | 189,365 | |||||||||||
a | Deutsche Lufthansa AG | Airlines | 1,757 | 15,164 | ||||||||||
Deutsche Post AG | Air Freight & Logistics | 5,719 | 260,878 | |||||||||||
Deutsche Telekom AG | Diversified Telecommunication Services | 18,928 | 317,180 | |||||||||||
Deutsche Wohnen AG | Real Estate Management & Development | 2,030 | 101,623 | |||||||||||
a,b | DWS Group GmbH & Co. KGaA, 144A | Capital Markets | 203 | 6,997 | ||||||||||
E.ON SE | Multi-Utilities | 12,698 | 140,386 | |||||||||||
Evonik Industries AG | Chemicals | 1,113 | 28,844 | |||||||||||
a | Fielmann AG | Specialty Retail | 140 | 11,246 | ||||||||||
a | Fraport AG Frankfurt Airport Services Worldwide | Transportation Infrastructure | 210 | 8,319 | ||||||||||
Fresenius Medical Care AG & Co. KGaA | Health Care Providers & Services | 1,190 | 100,501 | |||||||||||
Fresenius SE and Co. KGaA | Health Care Providers & Services | 2,359 | 107,415 | |||||||||||
Fuchs Petrolub SE | Chemicals | 189 | 7,092 | |||||||||||
GEA Group AG | Machinery | 973 | 34,241 | |||||||||||
Grenkeleasing AG | Consumer Finance | 154 | 5,696 | |||||||||||
Hannover Rueck SE | Insurance | 350 | 54,259 | |||||||||||
HeidelbergCement AG | Construction Materials | 875 | 53,684 | |||||||||||
a | Hella GmbH & Co. KGaA | Auto Components | 259 | 13,066 | ||||||||||
a | HelloFresh SE | Internet & Direct Marketing Retail | 826 | 46,086 | ||||||||||
Henkel AG & Co. KGaA | Household Products | 595 | 55,748 | |||||||||||
Hochtief AG | Construction & Engineering | 112 | 8,727 | |||||||||||
Infineon Technologies AG | Semiconductors & Semiconductor Equipment | 7,623 | 215,567 | |||||||||||
KION Group AG | Machinery | 413 | 35,441 | |||||||||||
Knorr-Bremse AG | Machinery | 385 | 45,436 | |||||||||||
Lanxess AG | Chemicals | 490 | 28,127 | |||||||||||
LEG Immobilien AG | Real Estate Management & Development | 406 | 57,988 | |||||||||||
Merck KGaA | Pharmaceuticals | 756 | 110,417 | |||||||||||
METRO AG | Food & Staples Retailing | 987 | 9,861 | |||||||||||
MTU Aero Engines AG | Aerospace & Defense | 308 | 51,287 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | Insurance | 819 | 208,023 | |||||||||||
Nemetschek AG | Software | 315 | 23,087 | |||||||||||
a | Osram Licht AG | Electrical Equipment | 168 | 10,016 | ||||||||||
a | ProSiebenSat.1 Media SE | Media | 917 | 12,049 | ||||||||||
a | Puma SE | Textiles, Apparel & Luxury Goods | 476 | 42,902 | ||||||||||
Rational AG | Machinery | 19 | 14,906 | |||||||||||
Rheinmetall AG | Industrial Conglomerates | 252 | 22,683 | |||||||||||
RWE AG | Multi-Utilities | 3,689 | 138,343 | |||||||||||
SAP SE | Software | 6,580 | 1,024,381 |
franklintempleton.com | Semiannual Report | 215 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Germany ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Germany (continued) | ||||||||||||||
c | Scout24 AG, Reg S | Interactive Media & Services | 602 | $ | 52,592 | |||||||||
Siemens AG | Industrial Conglomerates | 4,480 | 566,745 | |||||||||||
a | Siemens Energy AG | Electrical Equipment | 2,240 | 60,415 | ||||||||||
Siemens Healthineers AG | Health Care Equipment & Supplies | 819 | 36,783 | |||||||||||
Suedzucker AG | Food Products | 441 | 8,533 | |||||||||||
Symrise AG | Chemicals | 742 | 102,673 | |||||||||||
a | Talanx AG | Insurance | 308 | 9,940 | ||||||||||
a | TeamViewer AG | Software | 714 | 35,266 | ||||||||||
Telefonica Deutschland Holding AG | Diversified Telecommunication Services | 3,892 | 9,990 | |||||||||||
a | thyssenkrupp AG | Metals & Mining | 2,702 | 13,663 | ||||||||||
Traton SE | Machinery | 280 | 5,575 | |||||||||||
Uniper SE | Independent Power and Renewable Electricity Producers | 644 | 20,813 | |||||||||||
United Internet AG | Diversified Telecommunication Services | 630 | 24,136 | |||||||||||
a | Varta AG | Electrical Equipment | 84 | 11,801 | ||||||||||
a | Volkswagen AG | Automobiles | 189 | 33,067 | ||||||||||
Vonovia SE | Real Estate Management & Development | 3,318 | 227,926 | |||||||||||
Wacker Chemie AG | Chemicals | 91 | 8,846 | |||||||||||
a | Zalando SE | Internet & Direct Marketing Retail | 938 | 87,886 | ||||||||||
|
| |||||||||||||
7,432,318 | ||||||||||||||
|
| |||||||||||||
Luxembourg 0.1% | ||||||||||||||
a | RTL Group SA | Media | 217 | 8,555 | ||||||||||
|
| |||||||||||||
Netherlands 0.9% | ||||||||||||||
a | QIAGEN NV | Life Sciences Tools & Services | 1,295 | 67,273 | ||||||||||
|
| |||||||||||||
Total Common Stocks | 7,508,146 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 5.7% | ||||||||||||||
Germany 5.7% | ||||||||||||||
d | Bayerische Motoren Werke AG, 5.396%, pfd. | Automobiles | 336 | 18,400 | ||||||||||
d | Fuchs Petrolub SE, 2.236%, pfd. | Chemicals | 406 | 20,653 | ||||||||||
d | Henkel AG & Co. KGaA, 2.071%, pfd. | Household Products | 1,022 | 107,046 | ||||||||||
a | Porsche Automobil Holding SE | Automobiles | 896 | 53,480 | ||||||||||
d | Sartorius AG, 0.103%, pfd. | Health Care Equipment & Supplies | 201 | 82,590 | ||||||||||
a | Volkswagen AG | Automobiles | 1,071 | 172,562 | ||||||||||
Total Preferred Stocks | 454,731 | |||||||||||||
|
| |||||||||||||
Total Investments | 7,962,877 | |||||||||||||
Other Assets, less Liabilities 0.0%† | 3,674 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 7,966,551 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $6,997, representing 0.1% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $52,592, representing 0.7% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
216 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Hong Kong ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 20.58 | $ | 26.82 | $ | 26.17 | $ | 25.30 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.50 | 0.77 | 0.66 | 0.16 | ||||||||||||
Net realized and unrealized gains (losses) | 1.98 | (6.25 | ) | 0.59 | 0.78 | |||||||||||
|
| |||||||||||||||
Total from investment operations | 2.48 | (5.48 | ) | 1.25 | 0.94 | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.25 | ) | (0.76 | ) | (0.60 | ) | (0.07 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 22.81 | $ | 20.58 | $ | 26.82 | $ | 26.17 | ||||||||
|
| |||||||||||||||
Total returnd | 12.09% | (20.90)% | 4.97% | 3.70% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 4.39% | 3.10% | 2.67% | 1.49% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $17,109 | $15,433 | $20,118 | $7,852 | ||||||||||||
Portfolio turnover ratef | 10.37% | g | 5.99% | g | 5.33% | 0.93% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 10.37% | 5.99% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 217 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Hong Kong ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.3% | ||||||||||||||
Cambodia 0.4% |
| |||||||||||||
NagaCorp Ltd. | Hotels, Restaurants & Leisure | 56,000 | $ | 66,550 | ||||||||||
|
| |||||||||||||
China 7.5% | ||||||||||||||
AAC Technologies Holdings, Inc. | Electronic Equipment, Instruments & Components | 14,000 | 75,419 | |||||||||||
Budweiser Brewing Co. APAC Ltd. | Beverages | 61,000 | 177,097 | |||||||||||
a | China Travel International Investment Hong Kong Ltd. | Hotels, Restaurants & Leisure | 90,000 | 12,658 | ||||||||||
Chow Tai Fook Jewellery Group Ltd. | Specialty Retail | 63,000 | 82,103 | |||||||||||
a | FIH Mobile Ltd. | Electronic Equipment, Instruments & Components | 105,000 | 14,903 | ||||||||||
Kerry Logistics Network Ltd. | Air Freight & Logistics | 21,000 | 37,827 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 50,000 | 36,129 | |||||||||||
Lenovo Group Ltd. | Technology Hardware, Storage & Peripherals | 270,000 | 178,026 | |||||||||||
Microport Scientific Corp. | Health Care Equipment & Supplies | 17,000 | 67,452 | |||||||||||
Minth Group Ltd. | Auto Components | 25,050 | 108,765 | |||||||||||
a | MMG Ltd. | Metals & Mining | 80,000 | 19,923 | ||||||||||
Shui On Land Ltd. | Real Estate Management & Development | 125,000 | 15,806 | |||||||||||
SITC International Holdings Co. Ltd. | Marine | 45,000 | 62,129 | |||||||||||
Sun Art Retail Group Ltd. | Food & Staples Retailing | 80,000 | 88,258 | |||||||||||
Tingyi Cayman Islands Holding Corp. | Food Products | 70,000 | 123,381 | |||||||||||
Towngas China Co. Ltd. | Gas Utilities | 40,000 | 16,465 | |||||||||||
Uni-President China Holdings Ltd. | Food Products | 40,000 | 36,542 | |||||||||||
Want Want China Holdings Ltd. | Food Products | 195,000 | 135,368 | |||||||||||
|
| |||||||||||||
1,288,251 | ||||||||||||||
|
| |||||||||||||
Hong Kong 84.2% | ||||||||||||||
AIA Group Ltd. | Insurance | 341,400 | 3,343,517 | |||||||||||
ASM Pacific Technology Ltd. | Semiconductors & Semiconductor Equipment | 11,000 | 111,845 | |||||||||||
BOC Hong Kong (Holdings) Ltd. | Banks | 130,000 | 342,194 | |||||||||||
Cafe de Coral Holdings Ltd. | Hotels, Restaurants & Leisure | 12,000 | 25,270 | |||||||||||
a | Cathay Pacific Airways Ltd. | Airlines | 35,000 | 24,161 | ||||||||||
Champion REIT | Equity Real Estate Investment Trusts (REITs | ) | 70,000 | 34,684 | ||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 97,500 | 474,919 | |||||||||||
CK Hutchison Holdings Ltd. | Industrial Conglomerates | 95,000 | 571,226 | |||||||||||
CK Infrastructure Holdings Ltd. | Electric Utilities | 23,500 | 109,616 | |||||||||||
CLP Holdings Ltd. | Electric Utilities | 60,000 | 557,419 | |||||||||||
Dah Sing Financial Group | Banks | 6,000 | 14,415 | |||||||||||
a,b,c | ESR Cayman Ltd., Reg S, 144A | Real Estate Management & Development | 46,000 | 142,748 | ||||||||||
Guotai Junan International Holdings Ltd. | Capital Markets | 90,000 | 11,961 | |||||||||||
Haitong International Securities Group Ltd. | Capital Markets | 90,000 | 21,484 | |||||||||||
Hang Lung Group Ltd. | Real Estate Management & Development | 32,000 | 72,754 | |||||||||||
Hang Lung Properties Ltd. | Real Estate Management & Development | 72,000 | 181,905 | |||||||||||
Hang Seng Bank Ltd. | Banks | 26,000 | 382,787 | |||||||||||
Henderson Land Development Co. Ltd. | Real Estate Management & Development | 50,000 | 184,194 | |||||||||||
Hong Kong and China Gas Co. Ltd. | Gas Utilities | 374,550 | 536,452 | |||||||||||
Hong Kong Exchanges and Clearing Ltd. | Capital Markets | 45,500 | 2,124,116 | |||||||||||
Hongkong Land Holdings Ltd. | Real Estate Management & Development | 42,000 | 155,820 | |||||||||||
Huabao International Holdings Ltd. | Chemicals | 30,000 | 27,135 | |||||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | Wireless Telecommunication Services | 40,000 | 6,142 | |||||||||||
Hysan Development Co. Ltd. | Real Estate Management & Development | 23,000 | 68,703 | |||||||||||
Jardine Matheson Holdings Ltd. | Industrial Conglomerates | 7,500 | 297,600 | |||||||||||
Jardine Strategic Holdings Ltd. | Industrial Conglomerates | 6,500 | 128,765 | |||||||||||
Johnson Electric Holdings Ltd. | Auto Components | 12,500 | 27,129 | |||||||||||
JS Global Lifestyle Co. Ltd. | Household Durables | 32,500 | 58,290 | |||||||||||
Kerry Properties Ltd. | Real Estate Management & Development | 22,500 | 57,426 | |||||||||||
a | Lifestyle International Holdings Ltd. | Multiline Retail | 17,500 | 14,271 | ||||||||||
Link REIT | Equity Real Estate Investment Trusts (REITs | ) | 74,000 | 601,548 | ||||||||||
Man Wah Holdings Ltd. | Household Durables | 52,000 | 68,841 | |||||||||||
Melco International Development Ltd. | Hotels, Restaurants & Leisure | 29,000 | 50,741 |
218 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Hong Kong ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Hong Kong (continued) | ||||||||||||||
MTR Corp. Ltd. | Road & Rail | 52,500 | $ | 259,113 | ||||||||||
New World Development Co. Ltd. | Real Estate Management & Development | 55,000 | 266,129 | |||||||||||
a | Pacific Century Premium Developments Ltd. | Real Estate Management & Development | 15,120 | 3,960 | ||||||||||
PCCW Ltd. | Diversified Telecommunication Services | 150,000 | 89,419 | |||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 49,000 | 256,697 | |||||||||||
a | Sa Sa International Holdings Ltd. | Specialty Retail | 40,000 | 6,916 | ||||||||||
a | Shangri-La Asia Ltd. | Hotels, Restaurants & Leisure | 40,000 | 32,723 | ||||||||||
Shun Tak Holdings Ltd. | Industrial Conglomerates | 70,000 | 22,400 | |||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 120,000 | 139,355 | |||||||||||
Sun Hung Kai Properties Ltd. | Real Estate Management & Development | 50,500 | 643,794 | |||||||||||
Swire Pacific Ltd., A | Real Estate Management & Development | 18,000 | 86,400 | |||||||||||
Swire Properties Ltd. | Real Estate Management & Development | 38,000 | 100,026 | |||||||||||
Techtronic Industries Co. Ltd. | Machinery | 45,000 | 589,936 | |||||||||||
The Bank of East Asia Ltd. | Banks | 46,000 | 84,521 | |||||||||||
The Wharf Holdings Ltd. | Real Estate Management & Development | 55,000 | 109,432 | |||||||||||
United Energy Group Ltd. | Oil, Gas & Consumable Fuels | 270,000 | 38,323 | |||||||||||
Vinda International Holdings Ltd. | Household Products | 9,000 | 29,497 | |||||||||||
Vitasoy International Holdings Ltd. | Food Products | 30,000 | 116,323 | |||||||||||
c | WH Group Ltd., Reg S | Food Products | 302,500 | 245,123 | ||||||||||
Wharf Real Estate Investment Co. Ltd. | Real Estate Management & Development | 60,000 | 243,871 | |||||||||||
Xinyi Glass Holdings Ltd. | Auto Components | 80,000 | 160,826 | |||||||||||
Yue Yuen Industrial Holdings Ltd. | Textiles, Apparel & Luxury Goods | 25,000 | 40,387 | |||||||||||
|
| |||||||||||||
14,395,249 | ||||||||||||||
|
| |||||||||||||
Indonesia 0.1% | ||||||||||||||
First Pacific Co. Ltd. | Diversified Financial Services | 80,000 | 21,677 | |||||||||||
|
| |||||||||||||
Italy 0.4% | ||||||||||||||
a | PRADA SpA | Textiles, Apparel & Luxury Goods | 18,500 | 72,090 | ||||||||||
|
| |||||||||||||
Luxembourg 0.2% | ||||||||||||||
L’Occitane International SA | Personal Products | 16,250 | 28,306 | |||||||||||
|
| |||||||||||||
Macau 6.1% | ||||||||||||||
Galaxy Entertainment Group Ltd. | Hotels, Restaurants & Leisure | 77,000 | 516,148 | |||||||||||
a | Macau Legend Development Ltd. | Hotels, Restaurants & Leisure | 50,000 | 6,774 | ||||||||||
MGM China Holdings Ltd. | Hotels, Restaurants & Leisure | 26,000 | 32,240 | |||||||||||
Sands China Ltd. | Hotels, Restaurants & Leisure | 86,000 | 331,239 | |||||||||||
SJM Holdings Ltd. | Hotels, Restaurants & Leisure | 65,000 | 76,574 | |||||||||||
a | Wynn Macau Ltd. | Hotels, Restaurants & Leisure | 52,000 | 82,932 | ||||||||||
|
| |||||||||||||
1,045,907 | ||||||||||||||
|
| |||||||||||||
Singapore 0.3% | ||||||||||||||
BOC Aviation Ltd. | Trading Companies & Distributors | 7,500 | 51,000 | |||||||||||
|
| |||||||||||||
Taiwan 0.1% | ||||||||||||||
a | FIT Hon Teng Ltd. | Electronic Equipment, Instruments & Components | 35,000 | 13,594 | ||||||||||
|
| |||||||||||||
Total Investments | 16,982,624 | |||||||||||||
Other Assets, less Liabilities 0.7% | 126,001 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 17,108,625 | ||||||||||||
|
|
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $142,748, representing 0.8% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $387,871, representing 2.3% of net assets.
franklintempleton.com | Semiannual Report | 219 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Hong Kong ETF (continued)
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
HKG Mini Hang Seng Index | Long | 4 | $ | 120,852 | 12/30/20 | $ | (284 | ) |
*As of period end.
See Note 8 regarding other derivative information.
220 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE India ETF
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 15.98 | $ | 23.36 | $ | 22.74 | $ | 23.72 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.09 | 0.26 | 0.29 | 0.09 | ||||||||||||
Net realized and unrealized gains (losses) | 6.12 | (7.43 | ) | 0.53 | (1.07 | ) | ||||||||||
|
| |||||||||||||||
Total from investment operations | 6.21 | (7.17 | ) | 0.82 | (0.98 | ) | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.12 | ) | (0.21 | ) | (0.20 | ) | — | |||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 22.07 | $ | 15.98 | $ | 23.36 | $ | 22.74 | ||||||||
|
| |||||||||||||||
Total returnd | 39.01% | (30.98)% | 3.66% | (4.13)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.19% | 0.19% | 0.19% | 0.19% | ||||||||||||
Net investment income | 0.88% | 1.20% | 1.33% | 2.78% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $12,141 | $ 8,790 | $7,007 | $ 2,274 | ||||||||||||
Portfolio turnover ratef | 18.16% | g | 36.55% | g | 8.03% | 1.59% |
aFor the period February 6, 2018 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 9.72% | 3.83% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 221 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE India ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 100.7% | ||||||||||||||
India 100.7% | ||||||||||||||
a | 3M India Ltd. | Industrial Conglomerates | 44 | $ | 10,918 | |||||||||
ABB India Ltd. | Electrical Equipment | 1,034 | 12,046 | |||||||||||
ACC Ltd. | Construction Materials | 1,111 | 20,983 | |||||||||||
Adani Enterprises Ltd. | Trading Companies & Distributors | 5,313 | 21,395 | |||||||||||
a | Adani Green Energy Ltd. | Independent Power and Renewable Electricity Producers | 7,931 | 79,288 | ||||||||||
Adani Ports And Special Economic Zone Ltd. | Transportation Infrastructure | 15,378 | 71,231 | |||||||||||
a | Adani Power Ltd. | Independent Power and Renewable Electricity Producers | 18,546 | 9,276 | ||||||||||
a | Aditya Birla Capital Ltd. | Diversified Financial Services | 11,110 | 9,366 | ||||||||||
Alkem Laboratories Ltd. | Pharmaceuticals | 495 | 18,638 | |||||||||||
Ambuja Cements Ltd. | Construction Materials | 13,871 | 40,797 | |||||||||||
Ashok Leyland Ltd. | Machinery | 24,948 | 25,158 | |||||||||||
Asian Paints Ltd. | Chemicals | 6,644 | 178,878 | |||||||||||
a | AU Small Finance Bank Ltd. | Banks | 3,025 | 26,829 | ||||||||||
Aurobindo Pharma Ltd. | Pharmaceuticals | 5,357 | 57,832 | |||||||||||
a | Avenue Supermarts Ltd. | Food & Staples Retailing | 3,003 | 89,673 | ||||||||||
a | Axis Bank Ltd. | Banks | 45,760 | 263,377 | ||||||||||
Bajaj Auto Ltd. | Automobiles | 1,672 | 65,291 | |||||||||||
Bajaj Finance Ltd. | Consumer Finance | 3,905 | 173,528 | |||||||||||
Bajaj Finserv Ltd. | Insurance | 770 | 61,078 | |||||||||||
Bajaj Holdings & Investment Ltd. | Diversified Financial Services | 539 | 17,635 | |||||||||||
Balkrishna Industries Ltd. | Auto Components | 1,628 | 32,591 | |||||||||||
a | Bandhan Bank Ltd. | Banks | 15,939 | 58,977 | ||||||||||
a | Bank of Baroda | Banks | 18,689 | 10,398 | ||||||||||
a | Bank of India | Banks | 6,809 | 3,751 | ||||||||||
Bata India Ltd. | Textiles, Apparel & Luxury Goods | 770 | 13,759 | |||||||||||
Bayer Cropscience Ltd. | Chemicals | 231 | 18,445 | |||||||||||
Berger Paints India Ltd. | Chemicals | 4,708 | 37,247 | |||||||||||
Bharat Electronics Ltd. | Aerospace & Defense | 14,377 | 18,658 | |||||||||||
Bharat Forge Ltd. | Auto Components | 4,037 | 24,488 | |||||||||||
Bharat Heavy Electricals Ltd. | Electrical Equipment | 18,216 | 7,222 | |||||||||||
Bharat Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 20,240 | 96,852 | |||||||||||
Bharti Airtel Ltd. | Wireless Telecommunication Services | 34,815 | 198,636 | |||||||||||
Bharti Infratel Ltd. | Diversified Telecommunication Services | 17,358 | 41,242 | |||||||||||
a | Biocon Ltd. | Biotechnology | 6,589 | 39,982 | ||||||||||
Bosch Ltd. | Auto Components | 154 | 28,659 | |||||||||||
Britannia Industries Ltd. | Food Products | 1,474 | 75,881 | |||||||||||
Cadila Healthcare Ltd. | Pharmaceuticals | 4,972 | 26,622 | |||||||||||
a | Canara Bank Ltd. | Banks | 5,841 | 7,034 | ||||||||||
Castrol India Ltd. | Chemicals | 9,801 | 14,526 | |||||||||||
Cholamandalam Investment and Finance Co. Ltd. | Consumer Finance | 5,005 | 16,902 | |||||||||||
Cipla Ltd. | Pharmaceuticals | 7,469 | 78,425 | |||||||||||
Coal India Ltd. | Oil, Gas & Consumable Fuels | 31,306 | 49,221 | |||||||||||
Colgate-Palmolive India Ltd. | Personal Products | 1,661 | 32,272 | |||||||||||
Container Corp. of India Ltd. | Road & Rail | 4,488 | 22,200 | |||||||||||
Coromandel International Ltd. | Chemicals | 1,617 | 16,938 | |||||||||||
Cummins India Ltd. | Machinery | 1,694 | 10,222 | |||||||||||
Dabur India Ltd. | Personal Products | 10,714 | 74,140 | |||||||||||
a | Dalmia Bharat Ltd. | Construction Materials | 913 | 9,670 | ||||||||||
Divi’s Laboratories Ltd. | Life Sciences Tools & Services | 1,848 | 76,343 | |||||||||||
DLF Ltd. | Real Estate Management & Development | 12,012 | 24,853 | |||||||||||
Dr Reddy’s Laboratories Ltd. | Pharmaceuticals | 1,837 | 129,168 | |||||||||||
Eicher Motors Ltd. | Automobiles | 2,706 | 80,791 | |||||||||||
Emami Ltd. | Personal Products | 2,684 | 12,780 | |||||||||||
Embassy Office Parks REIT | Equity Real Estate Investment Trusts (REITs | ) | 6,000 | 29,340 | ||||||||||
Exide Industries Ltd. | Auto Components | 5,423 | 12,121 | |||||||||||
a | Federal Bank Ltd. | Banks | 29,821 | 19,644 |
222 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE India ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
India (continued) | ||||||||||||||
a | Future Retail Ltd. | Multiline Retail | 4,774 | $ | 5,830 | |||||||||
GAIL India Ltd. | Gas Utilities | 25,542 | 30,049 | |||||||||||
Gillette India Ltd. | Personal Products | 154 | 11,147 | |||||||||||
GlaxoSmithKline Pharmaceuticals Ltd. | Pharmaceuticals | 858 | 18,318 | |||||||||||
Glenmark Pharmaceuticals Ltd. | Pharmaceuticals | 2,860 | 18,709 | |||||||||||
a | GMR Infrastructure Ltd. | Transportation Infrastructure | 31,416 | 9,815 | ||||||||||
Godrej Consumer Products Ltd. | Personal Products | 7,370 | 72,416 | |||||||||||
a | Godrej Industries Ltd. | Industrial Conglomerates | 1,485 | 8,281 | ||||||||||
a | Godrej Properties Ltd. | Real Estate Management & Development | 1,309 | 15,266 | ||||||||||
Grasim Industries Ltd. | Construction Materials | 6,809 | 68,681 | |||||||||||
Gujarat Gas Ltd. | Gas Utilities | 3,520 | 14,714 | |||||||||||
Havell’s India Ltd. | Electrical Equipment | 4,851 | 44,568 | |||||||||||
HCL Technologies Ltd. | IT Services | 21,923 | 241,159 | |||||||||||
b,c | HDFC Asset Management Co. Ltd., 144A, | Capital Markets | 968 | 29,781 | ||||||||||
a | HDFC Life Insurance Co. Ltd. | Insurance | 13,046 | 98,915 | ||||||||||
a,d | Hemisphere Properties India Ltd. | Diversified Telecommunication Services | 2,002 | 4,526 | ||||||||||
Hero Motocorp Ltd. | Automobiles | 2,145 | 91,501 | |||||||||||
Hindalco Industries Ltd. | Metals & Mining | 20,702 | 49,174 | |||||||||||
Hindustan Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 12,925 | 31,647 | |||||||||||
Hindustan Unilever Ltd. | Household Products | 17,908 | 502,009 | |||||||||||
Hindustan Zinc Ltd. | Metals & Mining | 4,697 | 13,366 | |||||||||||
Housing Development Finance Corp. Ltd. | Thrifts & Mortgage Finance | 34,947 | 824,201 | |||||||||||
a | ICICI Bank Ltd. | Banks | 31,350 | 150,737 | ||||||||||
b,c | ICICI Lombard General Insurance Co. Ltd., 144A, Reg S | Insurance | 4,048 | 71,298 | ||||||||||
c | ICICI Prudential Life Insurance Co. Ltd., Reg S | Insurance | 6,446 | 36,773 | ||||||||||
a | IDFC First Bank Ltd. | Banks | 56,177 | 22,804 | ||||||||||
Indiabulls Housing Finance Ltd. | Thrifts & Mortgage Finance | 6,534 | 13,917 | |||||||||||
Indian Oil Corp. Ltd. | Oil, Gas & Consumable Fuels | 45,815 | 45,890 | |||||||||||
Indian Railway Catering and Tourism Corp. Ltd. | Commercial Services & Supplies | 396 | 7,428 | |||||||||||
Indraprastha Gas Ltd. | Gas Utilities | 7,073 | 37,081 | |||||||||||
Info Edge India Ltd. | Interactive Media & Services | 1,353 | 66,654 | |||||||||||
Infosys Ltd. | IT Services | 72,578 | 991,824 | |||||||||||
a,c | InterGlobe Aviation Ltd., Reg S | Airlines | 1,947 | 32,963 | ||||||||||
IPCA Laboratories Ltd. | Pharmaceuticals | 1,012 | 29,716 | |||||||||||
ITC Ltd. | Tobacco | 59,620 | 138,747 | |||||||||||
a | Jindal Steel & Power Ltd. | Metals & Mining | 7,986 | 20,225 | ||||||||||
JSW Energy Ltd. | | Independent Power and Renewable Electricity Producers | | 7,425 | 5,676 | |||||||||
JSW Steel Ltd. | Metals & Mining | 20,163 | 75,905 | |||||||||||
Jubilant Foodworks Ltd. | Hotels, Restaurants & Leisure | 1,463 | 46,487 | |||||||||||
Kansai Nerolac Paints Ltd. | Chemicals | 2,618 | 17,769 | |||||||||||
L&T Finance Holdings Ltd. | Diversified Financial Services | 10,406 | 8,759 | |||||||||||
c | Larsen & Toubro Infotech Ltd., Reg S | IT Services | 660 | 22,753 | ||||||||||
Larsen & Toubro Ltd. | Construction & Engineering | 8,580 | 104,849 | |||||||||||
LIC Housing Finance Ltd. | Thrifts & Mortgage Finance | 5,192 | 19,408 | |||||||||||
Lupin Ltd. | Pharmaceuticals | 4,576 | 62,481 | |||||||||||
a | Mahindra & Mahindra Financial Services Ltd. | Consumer Finance | 11,935 | 19,913 | ||||||||||
Mahindra & Mahindra Ltd. | Automobiles | 13,475 | 111,025 | |||||||||||
a | Mangalore Refinery and Petrochemicals Ltd. | Oil, Gas & Consumable Fuels | 4,070 | 1,418 | ||||||||||
Marico Ltd. | Personal Products | 9,460 | 46,543 | |||||||||||
Maruti Suzuki India Ltd. | Automobiles | 2,497 | 228,224 | |||||||||||
Motherson Sumi Systems Ltd. | Auto Components | 20,504 | 31,918 | |||||||||||
Mphasis Ltd. | IT Services | 1,562 | 29,289 | |||||||||||
MRF Ltd. | Auto Components | 33 | 26,645 | |||||||||||
Muthoot Finance Ltd. | Consumer Finance | 1,947 | 29,875 | |||||||||||
Nestle India Ltd. | Food Products | 528 | 113,920 |
franklintempleton.com | Semiannual Report | 223 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE India ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
India (continued) | ||||||||||||||
NHPC Ltd. | Independent Power and Renewable Electricity Producers | 46,233 | $ | 12,658 | ||||||||||
Nippon Life India Asset Management Ltd. | Capital Markets | 2,970 | 10,551 | |||||||||||
NMDC Ltd. | Metals & Mining | 15,851 | 17,671 | |||||||||||
NTPC Ltd. | Independent Power and Renewable Electricity Producers | 58,850 | 67,879 | |||||||||||
a | Oberoi Realty Ltd. | Real Estate Management & Development | 1,903 | 10,168 | ||||||||||
Oil & Natural Gas Corp. Ltd. | Oil, Gas & Consumable Fuels | 61,017 | 57,271 | |||||||||||
Oil India Ltd. | Oil, Gas & Consumable Fuels | 5,654 | 6,843 | |||||||||||
Oracle Financial Services Software Ltd. | Software | 462 | 19,240 | |||||||||||
Page Industries Ltd. | Textiles, Apparel & Luxury Goods | 99 | 28,629 | |||||||||||
Petronet LNG Ltd. | Oil, Gas & Consumable Fuels | 11,759 | 35,167 | |||||||||||
PI Industries Ltd. | Chemicals | 1,287 | 34,390 | |||||||||||
Pidilite Industries Ltd. | Chemicals | 2,629 | 51,107 | |||||||||||
Piramal Enterprises Ltd. | Pharmaceuticals | 2,189 | 37,190 | |||||||||||
Power Finance Corp. Ltd. | Diversified Financial Services | 15,488 | 18,095 | |||||||||||
Power Grid Corp. of India Ltd. | Electric Utilities | 39,611 | 87,216 | |||||||||||
a | Punjab National Bank Ltd. | Banks | 19,327 | 7,479 | ||||||||||
Rajesh Exports Ltd. | Textiles, Apparel & Luxury Goods | 2,750 | 16,663 | |||||||||||
c | RBL Bank Ltd., Reg S | Banks | 7,612 | 17,529 | ||||||||||
REC Ltd. | Diversified Financial Services | 14,990 | 20,134 | |||||||||||
Reliance Industries Ltd. | Oil, Gas & Consumable Fuels | 62,766 | 1,900,803 | |||||||||||
SBI Cards & Payment Services Ltd. | Consumer Finance | 2,772 | 31,845 | |||||||||||
a | SBI Life Insurance Co. Ltd. | Insurance | 7,150 | 78,637 | ||||||||||
Shree Cement Ltd. | Construction Materials | 198 | 54,363 | |||||||||||
Shriram Transport Finance Co. Ltd. | Consumer Finance | 3,773 | 31,673 | |||||||||||
Siemens Ltd. | Industrial Conglomerates | 1,727 | 29,599 | |||||||||||
SRF Ltd. | Chemicals | 352 | 19,704 | |||||||||||
a | State Bank of India | Banks | 36,069 | 90,637 | ||||||||||
a | Steel Authority of India Ltd. | Metals & Mining | 20,020 | 9,158 | ||||||||||
Sun Pharmaceutical Industries Ltd. | Pharmaceuticals | 21,967 | 149,002 | |||||||||||
Sun TV Network Ltd. | Media | 1,738 | 10,969 | |||||||||||
Tata Communications Ltd. | Diversified Telecommunication Services | 1,375 | 15,793 | |||||||||||
Tata Consultancy Services Ltd. | IT Services | 18,931 | 639,492 | |||||||||||
Tata Consumer Products Ltd. | Food Products | 7,942 | 53,817 | |||||||||||
a | Tata Motors Ltd. | Automobiles | 25,135 | 45,412 | ||||||||||
a | Tata Motors Ltd., A | Automobiles | 7,458 | 6,348 | ||||||||||
Tata Power Co. Ltd. | Electric Utilities | 23,023 | 16,632 | |||||||||||
Tata Steel Ltd. | Metals & Mining | 7,887 | 38,457 | |||||||||||
Tech Mahindra Ltd. | IT Services | 9,999 | 107,302 | |||||||||||
Titan Co. Ltd. | Textiles, Apparel & Luxury Goods | 6,809 | 110,870 | |||||||||||
Torrent Pharmaceuticals Ltd. | Pharmaceuticals | 858 | 32,561 | |||||||||||
Torrent Power Ltd. | Electric Utilities | 2,849 | 12,100 | |||||||||||
Trent Ltd. | Multiline Retail | 3,663 | 33,358 | |||||||||||
TVS Motor Co. Ltd. | Automobiles | 2,739 | 17,385 | |||||||||||
UltraTech Cement Ltd. | Construction Materials | 2,310 | 126,789 | |||||||||||
a | Union Bank of India Ltd. | Banks | 10,505 | 3,467 | ||||||||||
United Breweries Ltd. | Beverages | 1,397 | 18,107 | |||||||||||
a | United Spirits Ltd. | Beverages | 5,830 | 40,762 | ||||||||||
UPL Ltd. | Chemicals | 10,835 | 73,854 | |||||||||||
Vedanta Ltd. | Metals & Mining | 32,384 | 60,089 | |||||||||||
a | Vodafone Idea Ltd. | Wireless Telecommunication Services | 162,250 | 21,001 | ||||||||||
Voltas Ltd. | Construction & Engineering | 2,662 | 24,547 | |||||||||||
Whirlpool of India Ltd. | Household Durables | 616 | 18,341 | |||||||||||
Wipro Ltd. | IT Services | 26,554 | 112,849 | |||||||||||
a | Yes Bank Ltd. | Banks | 31,573 | 5,627 | ||||||||||
Zee Entertainment Enterprises Ltd. | Media | 16,764 | 47,465 | |||||||||||
|
| |||||||||||||
Total Investments | 12,220,899 | |||||||||||||
Other Assets, less Liabilities (0.7)% | (79,934 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 12,140,965 | ||||||||||||
|
|
224 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE India ETF (continued)
See Abbreviations on page 331.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $101,079, representing 0.8% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $211,097, representing 1.7% of net assets.
dFair valued using significant unobservable inputs. See Note 6 regarding fair value measurements.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 225 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Italy ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 17.61 | $ | 23.13 | $ | 26.27 | $ | 25.51 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: |
| |||||||||||||||
Net investment incomec | 0.31 | 0.90 | 0.46 | 0.11 | ||||||||||||
Net realized and unrealized gains (losses) | 3.16 | (5.52 | ) | (2.99 | ) | 0.70 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 3.47 | (4.62 | ) | (2.53 | ) | 0.81 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.40 | ) | (0.90 | ) | (0.61 | ) | (0.05 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 20.68 | $ | 17.61 | $ | 23.13 | $ | 26.27 | ||||||||
|
| |||||||||||||||
Total returnd | 19.81% | (20.84)% | (9.67)% | 3.19% | ||||||||||||
Ratios to average net assetse |
| |||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 3.07% | 3.85% | 2.05% | 1.01% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $3,101 | $2,641 | $10,410 | $2,627 | ||||||||||||
Portfolio turnover ratef | 7.50% | g | 9.89% | g | 16.67% | 3.09% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 7.50% | 9.89% | —% | —% |
226 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Italy ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.9% | ||||||||||||||
Italy 91.4% | ||||||||||||||
A2A SpA | Multi-Utilities | 16,704 | $ | 24,289 | ||||||||||
a | Amplifon SpA | Health Care Providers & Services | 1,314 | 47,073 | ||||||||||
Assicurazioni Generali SpA | Insurance | 9,681 | 136,513 | |||||||||||
a | Atlantia SpA | Transportation Infrastructure | 5,319 | 83,767 | ||||||||||
Banca Mediolanum SpA | Diversified Financial Services | 2,781 | 20,056 | |||||||||||
Buzzi Unicem SpA | Construction Materials | 777 | 18,118 | |||||||||||
Buzzi Unicem SpA, di Risp | Construction Materials | 435 | 5,723 | |||||||||||
Davide Campari-Milano NV | Beverages | 6,039 | 65,994 | |||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 242 | 48,782 | |||||||||||
Enel SpA | Electric Utilities | 70,959 | 617,253 | |||||||||||
Eni SpA | Oil, Gas & Consumable Fuels | 23,106 | 181,213 | |||||||||||
Ferrari NV | Automobiles | 1,149 | 211,066 | |||||||||||
a | FinecoBank Banca Fineco SpA | Banks | 6,483 | 89,365 | ||||||||||
Hera SpA | Multi-Utilities | 7,629 | 28,198 | |||||||||||
b | Infrastrutture Wireless Italiane SpA, Reg S | Diversified Telecommunication Services | 3,522 | 38,988 | ||||||||||
a | Intesa Sanpaolo SpA | Banks | 144,525 | 271,672 | ||||||||||
Italgas Reti SpA | Gas Utilities | 5,337 | 33,702 | |||||||||||
Leonardo SpA | Aerospace & Defense | 4,293 | 25,171 | |||||||||||
Mediobanca Banca di Credito Finanziario SpA | Banks | 8,319 | 65,341 | |||||||||||
a | Moncler SpA | Textiles, Apparel & Luxury Goods | 2,076 | 85,156 | ||||||||||
a | Nexi SpA | IT Services | 3,132 | 62,877 | ||||||||||
a | Pirelli & C SpA | Auto Components | 4,269 | 18,332 | ||||||||||
b | Poste Italiane SpA, Reg S | Insurance | 4,929 | 43,743 | ||||||||||
Prysmian SpA | Electrical Equipment | 2,586 | 75,327 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 1,044 | 53,549 | |||||||||||
Snam SpA | Gas Utilities | 20,418 | 105,087 | |||||||||||
Telecom Italia SpA/Milano | Diversified Telecommunication Services | 115,128 | 46,172 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 65,198 | 26,362 | |||||||||||
Tenaris SA | Energy Equipment & Services | 5,052 | 25,243 | |||||||||||
Terna Rete Elettrica Nazionale SpA | Electric Utilities | 13,968 | 97,852 | |||||||||||
a | UniCredit SpA | Banks | 20,367 | 168,258 | ||||||||||
UnipolSai Assicurazioni SpA | Insurance | 5,433 | 14,182 | |||||||||||
|
| |||||||||||||
2,834,424 | ||||||||||||||
|
| |||||||||||||
Netherlands 2.0% | ||||||||||||||
EXOR NV | Diversified Financial Services | 1,125 | 61,318 | |||||||||||
|
| |||||||||||||
United Kingdom 6.5% | ||||||||||||||
a | CNH Industrial NV | Machinery | 10,638 | 82,931 | ||||||||||
a | Fiat Chrysler Automobiles NV | Automobiles | 9,795 | 120,237 | ||||||||||
|
| |||||||||||||
203,168 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $3,422,976) 99.9% | 3,098,910 | |||||||||||||
Other Assets, less Liabilities 0.1% | 2,499 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 3,101,409 | ||||||||||||
|
|
See Abbreviaitions on page 331.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $82,731, representing 2.7% of net assets.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 227 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan ETF
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 21.93 | $ | 24.18 | $ | 26.69 | $ | 25.91 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: |
| |||||||||||||||
Net investment incomec | 0.22 | 0.56 | 0.59 | 0.44 | ||||||||||||
Net realized and unrealized gains (losses) | 4.09 | (2.22 | ) | (2.76 | ) | 0.37 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 4.31 | (1.66 | ) | (2.17 | ) | 0.81 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.21 | ) | (0.59 | ) | (0.34 | ) | (0.03 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 26.03 | $ | 21.93 | $ | 24.18 | $ | 26.69 | ||||||||
|
| |||||||||||||||
Total returnd | 19.65% | (7.15 | )% | (8.10 | )% | 3.11% | ||||||||||
Ratios to average net assetse |
| |||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | —% | ||||||||||||
Net investment income | 1.78% | 2.30% | 2.39% | 4.07% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $452,844 | $315,851 | $290,205 | $96,082 | ||||||||||||
Portfolio turnover ratef | 3.64% | g | 4.59% | g | 4.35% | 0.93% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 3.64% | 4.59% | —% | —% |
228 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Japan ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.1% | ||||||||||||||
Japan 99.1% | ||||||||||||||
ABC-Mart Inc. | Specialty Retail | 2,900 | $ | 150,317 | ||||||||||
Acom Co. Ltd. | Consumer Finance | 43,500 | 187,553 | |||||||||||
Activia Properties Inc. | Equity Real Estate Investment Trusts (REITs | ) | 29 | 109,784 | ||||||||||
Advance Residence Investment | Equity Real Estate Investment Trusts (REITs | ) | 29 | 85,464 | ||||||||||
Advantest Corp. | Semiconductors & Semiconductor Equipment | 23,200 | 1,118,999 | |||||||||||
AEON Co. Ltd. | Food & Staples Retailing | 81,200 | 2,174,464 | |||||||||||
AEON Financial Service Co. Ltd. | Consumer Finance | 14,500 | 130,944 | |||||||||||
AEON Mall Co. Ltd. | Real Estate Management & Development | 14,500 | 202,805 | |||||||||||
AGC Inc. | Building Products | 20,300 | 590,552 | |||||||||||
Aica Kogyo Co. Ltd. | Building Products | 5,800 | 205,003 | |||||||||||
AIN Holdings Inc. | Food & Staples Retailing | 2,900 | 202,255 | |||||||||||
Air Water Inc. | Chemicals | 20,300 | 273,155 | |||||||||||
Aisin Seiki Co. Ltd. | Auto Components | 20,300 | 644,414 | |||||||||||
Ajinomoto Co. Inc. | Food Products | 58,000 | 1,186,601 | |||||||||||
Alfresa Holdings Corp. | Health Care Providers & Services | 20,300 | 442,049 | |||||||||||
Alps Alpine Co. Ltd. | Electronic Equipment, Instruments & Components | 23,200 | 309,539 | |||||||||||
Amada Co. Ltd. | Machinery | 37,700 | 350,814 | |||||||||||
Amano Corp. | Electronic Equipment, Instruments & Components | 8,700 | 201,568 | |||||||||||
a | ANA Holdings Inc. | Airlines | 11,600 | 267,109 | ||||||||||
Anritsu Corp. | Electronic Equipment, Instruments & Components | 17,400 | 394,563 | |||||||||||
Aozora Bank Ltd. | Banks | 14,500 | 239,491 | |||||||||||
Ariake Japan Co. Ltd. | Food Products | 2,100 | 141,884 | |||||||||||
As One Corp. | Health Care Providers & Services | 1,500 | 214,489 | |||||||||||
Asahi Group Holdings Ltd. | Beverages | 49,300 | 1,707,958 | |||||||||||
Asahi Intecc Co. Ltd. | Health Care Equipment & Supplies | 23,200 | 725,481 | |||||||||||
Asahi Kasei Corp. | Chemicals | 145,000 | 1,256,813 | |||||||||||
Asics Corp. | Textiles, Apparel & Luxury Goods | 20,300 | 281,618 | |||||||||||
ASKUL Corp. | Internet & Direct Marketing Retail | 2,900 | 117,753 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 214,600 | 3,186,565 | |||||||||||
Azbil Corp. | Electronic Equipment, Instruments & Components | 14,500 | 538,615 | |||||||||||
Bandai Namco Holdings Inc. | Leisure Products | 23,200 | 1,690,370 | |||||||||||
Benefit One Inc. | Professional Services | 5,800 | 145,756 | |||||||||||
Benesse Holdings Inc. | Diversified Consumer Services | 8,700 | 223,003 | |||||||||||
BIC CAMERA Inc. | Specialty Retail | 17,400 | 192,088 | |||||||||||
Bridgestone Corp. | Auto Components | 66,700 | 2,096,502 | |||||||||||
Brother Industries Ltd. | Technology Hardware, Storage & Peripherals | 29,000 | 457,822 | |||||||||||
Calbee Inc. | Food Products | 8,700 | 285,658 | |||||||||||
CANON Inc. | Technology Hardware, Storage & Peripherals | 116,000 | 1,919,776 | |||||||||||
Canon Marketing Japan Inc. | Electronic Equipment, Instruments & Components | 5,800 | 115,527 | |||||||||||
Capcom Co. Ltd. | Entertainment | 11,600 | 644,139 | |||||||||||
Casio Computer Co. Ltd. | Household Durables | 26,100 | 418,965 | |||||||||||
Central Japan Railway Co. | Road & Rail | 20,800 | 2,974,244 | |||||||||||
Chubu Electric Power Co. Inc. | Electric Utilities | 81,200 | 985,665 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 75,720 | 3,383,112 | |||||||||||
Chuo Mitsui Trust Holdings Inc. | Banks | 43,500 | 1,151,083 | |||||||||||
Coca-Cola Bottlers Japan Holdings Inc. | Beverages | 17,400 | 290,027 | |||||||||||
COMSYS Holdings Corp. | Construction & Engineering | 14,500 | 401,350 | |||||||||||
Concordia Financial Group Ltd. | Banks | 127,600 | 441,334 | |||||||||||
Cosmo Energy Holdings Co. Ltd. | Oil, Gas & Consumable Fuels | 5,800 | 82,496 | |||||||||||
Cosmos Pharmaceutical Corp. | Food & Staples Retailing | 2,050 | 356,463 | |||||||||||
Credit Saison Co. Ltd. | Consumer Finance | 17,400 | 183,349 | |||||||||||
CyberAgent Inc. | Media | 11,600 | 711,191 | |||||||||||
Dai Nippon Printing Co. Ltd. | Commercial Services & Supplies | 31,900 | 642,655 | |||||||||||
Daicel Corp. | Chemicals | 31,900 | 228,829 | |||||||||||
Daido Steel Co. Ltd. | Metals & Mining | 2,900 | 89,586 | |||||||||||
Daifuku Co. Ltd. | Machinery | 11,600 | 1,162,968 | |||||||||||
Daiichi Sankyo Co. Ltd. | Pharmaceuticals | 221,400 | 6,774,383 |
franklintempleton.com | Semiannual Report | 229 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Daiichikosho Co. Ltd. | Entertainment | 5,800 | $ | 185,492 | ||||||||||
Daikin Industries Ltd. | Building Products | 30,977 | 5,665,271 | |||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 7,668 | 677,208 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 75,400 | 1,927,333 | |||||||||||
Daiwa House Residential Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 58 | 147,844 | ||||||||||
Daiwa Office Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 10 | 57,235 | ||||||||||
Daiwa Securities Group Inc. | Capital Markets | 174,000 | 726,635 | |||||||||||
DeNA Co. Ltd. | Entertainment | 11,600 | 212,368 | |||||||||||
Denka Co. Ltd. | Chemicals | 8,700 | 263,399 | |||||||||||
Denso Corp. | Auto Components | 52,200 | 2,273,888 | |||||||||||
Dentsu Group Inc. | Media | 26,100 | 765,465 | |||||||||||
DIC Corp. | Chemicals | 8,700 | 215,831 | |||||||||||
Disco Corp. | Semiconductors & Semiconductor Equipment | 3,232 | 778,216 | |||||||||||
DMG Mori Co. Ltd. | Machinery | 11,600 | 159,606 | |||||||||||
Dowa Holdings Co. Ltd. | Metals & Mining | 5,800 | 169,279 | |||||||||||
East Japan Railway Co. | Road & Rail | 41,400 | 2,542,140 | |||||||||||
EBARA Corp. | Machinery | 11,600 | 312,506 | |||||||||||
Eisai Co. Ltd. | Pharmaceuticals | 30,400 | 2,760,860 | |||||||||||
Elecom Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,900 | 141,799 | |||||||||||
Electric Power Development Co. Ltd. | Independent Power and Renewable Electricity Producers | 20,300 | 312,204 | |||||||||||
ENEOS Holdings Inc. | Oil, Gas & Consumable Fuels | 350,900 | 1,246,920 | |||||||||||
Ezaki Glico Co. Ltd. | Food Products | 5,800 | 259,140 | |||||||||||
Fancl Corp. | Personal Products | 8,700 | 282,360 | |||||||||||
FANUC Corp. | Machinery | 22,500 | 4,289,775 | |||||||||||
Fast Retailing Co. Ltd. | Specialty Retail | 6,000 | 3,744,528 | |||||||||||
FP Corp. | Containers & Packaging | 5,800 | 243,476 | |||||||||||
Fuji Electric Co. Ltd. | Electrical Equipment | 14,500 | 454,800 | |||||||||||
Fuji Media Holdings Inc. | Media | 5,800 | 55,565 | |||||||||||
Fuji Oil Holdings Inc. | Food Products | 5,800 | 181,920 | |||||||||||
Fuji Seal International Inc. | Containers & Packaging | 5,800 | 111,185 | |||||||||||
FUJIFILM Holdings Corp. | Technology Hardware, Storage & Peripherals | 40,600 | 1,994,798 | |||||||||||
Fujitsu General Ltd. | Household Durables | 5,800 | 167,630 | |||||||||||
Fujitsu Ltd. | IT Services | 21,900 | 2,975,893 | |||||||||||
Fukuoka Financial Group Inc. | Banks | 20,300 | 339,327 | |||||||||||
Fukuyama Transporting Co. Ltd. | Road & Rail | 2,900 | 140,425 | |||||||||||
Furukawa Electric Co. Ltd. | Electrical Equipment | 5,800 | 137,512 | |||||||||||
Fuyo General Lease Co. Ltd. | Diversified Financial Services | 2,900 | 178,622 | |||||||||||
Glory Ltd. | Machinery | 5,800 | 129,048 | |||||||||||
GLP J-REIT | Equity Real Estate Investment Trusts (REITs | ) | 116 | 178,952 | ||||||||||
GMO Internet Inc. | IT Services | 5,800 | 150,647 | |||||||||||
GMO Payment Gateway Inc. | IT Services | 4,500 | 479,295 | |||||||||||
Goldwin Inc. | Textiles, Apparel & Luxury Goods | 4,100 | 324,022 | |||||||||||
GS Yuasa Corp. | Electrical Equipment | 8,700 | 149,053 | |||||||||||
GungHo Online Entertainment Inc. | Entertainment | 2,900 | 62,023 | |||||||||||
Gunma Bank Ltd. | Banks | 46,400 | 153,890 | |||||||||||
Hachijuni Bank Ltd. | Banks | 52,200 | 204,289 | |||||||||||
Hakuhodo DY Holdings Inc. | Media | 26,100 | 335,123 | |||||||||||
Hamamatsu Photonics K.K. | Electronic Equipment, Instruments & Components | 14,500 | 726,855 | |||||||||||
Hankyu Hanshin Holdings Inc. | Road & Rail | 26,100 | 835,952 | |||||||||||
Haseko Corp. | Household Durables | 31,900 | 417,151 | |||||||||||
Heiwa Corp. | Leisure Equipment & Products | 5,800 | 95,082 | |||||||||||
Hikari Tsushin Inc. | Specialty Retail | 2,900 | 686,459 | |||||||||||
Hino Motors Ltd. | Machinery | 31,900 | 205,251 | |||||||||||
Hirose Electric Co. Ltd. | Electronic Equipment, Instruments & Components | 3,700 | 474,377 | |||||||||||
Hisamitsu Pharmaceutical Co. Inc. | Pharmaceuticals | 8,700 | 442,708 | |||||||||||
Hitachi Capital Corp. | Consumer Finance | 5,800 | 135,368 |
230 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Hitachi Construction Machinery Co. Ltd. | Machinery | 11,600 | $ | 417,701 | ||||||||||
Hitachi Ltd. | Electronic Equipment, Instruments & Components | 107,300 | 3,602,425 | |||||||||||
Hitachi Metals Ltd. | Metals & Mining | 23,200 | 355,046 | |||||||||||
Hitachi Transport System Ltd. | Road & Rail | 5,800 | 182,744 | |||||||||||
Hokugin Financial Group Inc. | Banks | 14,500 | 145,234 | |||||||||||
Hokuriku Electric Power Co. | Electric Utilities | 20,300 | 151,774 | |||||||||||
Honda Motor Co. Ltd. | Automobiles | 200,100 | 4,690,110 | |||||||||||
HORIBA Ltd. | Electronic Equipment, Instruments & Components | 4,000 | 207,713 | |||||||||||
Hoshizaki Corp. | Machinery | 5,800 | 460,570 | |||||||||||
House Foods Group Inc. | Food Products | 8,700 | 308,329 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 42,420 | 4,767,376 | |||||||||||
Ibiden Co. Ltd. | Electronic Equipment, Instruments & Components | 11,600 | 390,221 | |||||||||||
Ichigo Inc. | Real Estate Management & Development | 23,200 | 67,052 | |||||||||||
Idemitsu Kosan Co. Ltd. | Oil, Gas & Consumable Fuels | 26,100 | 554,498 | |||||||||||
IHI Corp. | Machinery | 14,500 | 191,675 | |||||||||||
Iida Group Holdings Co. Ltd. | Household Durables | 17,400 | 350,045 | |||||||||||
Industrial & Infrastructure Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 58 | 99,094 | ||||||||||
INPEX Corp. | Oil, Gas & Consumable Fuels | 107,300 | 572,951 | |||||||||||
Isetan Mitsukoshi Holdings Ltd. | Multiline Retail | 40,600 | 213,907 | |||||||||||
Isuzu Motors Ltd. | Automobiles | 60,900 | 529,420 | |||||||||||
Ito En Ltd. | Beverages | 5,800 | 412,755 | |||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 159,500 | 4,058,159 | |||||||||||
ITOCHU Techno-Solutions Corp. | IT Services | 11,600 | 438,037 | |||||||||||
Itoham Yonekyu Holdings Inc. | Food Products | 14,500 | 103,463 | |||||||||||
Izumi Co. Ltd. | Multiline Retail | 5,800 | 210,225 | |||||||||||
J Front Retailing Co. Ltd. | Multiline Retail | 29,000 | 208,301 | |||||||||||
a | Japan Airlines Co. Ltd. | Airlines | 14,500 | 270,132 | ||||||||||
Japan Airport Terminal Co. Ltd. | Transportation Infrastructure | 5,800 | 254,468 | |||||||||||
Japan Aviatn Elect | Electronic Equipment, Instruments & Components | 5,800 | 79,253 | |||||||||||
Japan Exchange Group Inc. | Capital Markets | 63,800 | 1,776,219 | |||||||||||
Japan Logistics Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 29 | 82,853 | ||||||||||
Japan Post Bank Co. Ltd. | Banks | 46,400 | 360,982 | |||||||||||
Japan Post Holdings Co. Ltd. | Insurance | 153,700 | 1,042,533 | |||||||||||
Japan Post Insurance Co. Ltd. | Insurance | 20,300 | 317,590 | |||||||||||
Japan Prime Realty Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 29 | 89,723 | ||||||||||
Japan Real Estate Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 29 | 147,844 | ||||||||||
Japan Retail Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 87 | 133,884 | ||||||||||
Japan Tobacco Inc. | Tobacco | 139,200 | 2,532,588 | |||||||||||
JCR Pharmaceuticals Co. Ltd. | Pharmaceuticals | 6,800 | 197,821 | |||||||||||
a | JFE Holdings Inc. | Metals & Mining | 60,900 | 422,428 | ||||||||||
JGC Holdings Corp. | Construction & Engineering | 26,100 | 269,087 | |||||||||||
JSR Corp. | Chemicals | 20,300 | 478,790 | |||||||||||
JTEKT Corp. | Auto Components | 26,100 | 202,805 | |||||||||||
Justsystems Corp. | Software | 2,900 | 204,179 | |||||||||||
K’s Holdings Corp. | Specialty Retail | 20,300 | 273,155 | |||||||||||
Kagome Co. Ltd. | Food Products | 8,700 | 303,383 | |||||||||||
Kajima Corp. | Construction & Engineering | 52,200 | 624,243 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 14,500 | 380,190 | |||||||||||
Kaken Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,900 | 132,455 | |||||||||||
Kamigumi Co. Ltd. | Transportation Infrastructure | 11,600 | 227,317 | |||||||||||
Kandenko Co. Ltd. | Construction & Engineering | 11,600 | 94,532 | |||||||||||
Kaneka Corp. | Chemicals | 5,800 | 161,859 | |||||||||||
Kansai Electric Power Co. Inc. | Electric Utilities | 84,100 | 812,868 | |||||||||||
Kansai Mirai Financial Group Inc. | Banks | 20,300 | 82,908 | |||||||||||
Kansai Paint Co. Ltd. | Chemicals | 23,200 | 573,350 | |||||||||||
KAO Corp. | Personal Products | 55,100 | 4,118,011 | |||||||||||
a | Kawasaki Heavy Industries Ltd. | Machinery | 17,400 | 233,638 |
franklintempleton.com | Semiannual Report | 231 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
KDDI Corp. | Wireless Telecommunication Services | 197,200 | $ | 4,963,169 | ||||||||||
Keihan Holdings Co. Ltd. | Industrial Conglomerates | 11,600 | 479,257 | |||||||||||
Keikyu Corp. | Road & Rail | 29,000 | 443,533 | |||||||||||
Keio Corp. | Road & Rail | 14,500 | 893,111 | |||||||||||
Keisei Electric Railway Co. Ltd. | Road & Rail | 17,400 | 489,535 | |||||||||||
Kenedix Office Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 15 | 89,406 | ||||||||||
Kewpie Corp. | Food Products | 11,600 | 238,090 | |||||||||||
Keyence Corp. | Electronic Equipment, Instruments & Components | 21,144 | 9,813,637 | |||||||||||
Kikkoman Corp. | Food Products | 20,300 | 1,119,549 | |||||||||||
Kinden Corp. | Construction & Engineering | 14,500 | 254,605 | |||||||||||
Kintetsu Group Holdings Co. Ltd. | Road & Rail | 20,300 | 862,745 | |||||||||||
Kirin Holdings Co. Ltd. | Beverages | 89,900 | 1,681,206 | |||||||||||
Kissei Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,900 | 65,156 | |||||||||||
Kobayashi Pharmaceutical Co. Ltd. | Personal Products | 7,100 | 684,232 | |||||||||||
Kobe Bussan Co. Ltd. | Food & Staples Retailing | 3,100 | 169,791 | |||||||||||
a | Kobe Steel Ltd. | Metals & Mining | 34,800 | 131,576 | ||||||||||
Koei Tecmo Holdings Co. Ltd. | Entertainment | 5,800 | 278,101 | |||||||||||
Koito Manufacturing Co. Ltd. | Auto Components | 14,500 | 735,099 | |||||||||||
Kokuyo Co. Ltd. | Commercial Services & Supplies | 8,700 | 108,822 | |||||||||||
Komatsu Ltd. | Machinery | 107,300 | 2,348,744 | |||||||||||
Konami Holdings Corp. | Entertainment | 11,600 | 499,043 | |||||||||||
Konica Minolta Inc. | Technology Hardware, Storage & Peripherals | 52,200 | 146,415 | |||||||||||
KOSE Corp. | Personal Products | 2,900 | 353,122 | |||||||||||
Kotobuki Spirits Co. Ltd. | Food Products | 2,900 | 148,119 | |||||||||||
Kubota Corp. | Machinery | 127,600 | 2,270,151 | |||||||||||
Kuraray Co. Ltd. | Chemicals | 40,600 | 391,650 | |||||||||||
Kurita Water Industries Ltd. | Machinery | 11,600 | 380,328 | |||||||||||
Kusuri No Aoki Holdings Co. Ltd. | Food & Staples Retailing | 1,700 | 138,217 | |||||||||||
Kyocera Corp. | Electronic Equipment, Instruments & Components | 34,800 | 1,977,595 | |||||||||||
Kyoritsu Maintenance Co. Ltd. | Hotels, Restaurants & Leisure | 2,900 | 107,036 | |||||||||||
Kyowa Exeo Corp. | Construction & Engineering | 11,600 | 301,404 | |||||||||||
Kyowa Kirin Co. Ltd. | Pharmaceuticals | 29,000 | 820,563 | |||||||||||
Kyudenko Corp. | Construction & Engineering | 5,800 | 166,806 | |||||||||||
Kyushu Electric Power Co. Inc. | Electric Utilities | 55,100 | 499,675 | |||||||||||
Kyushu Financial Group Inc. | Banks | 43,500 | 203,217 | |||||||||||
Kyushu Railway Co. | Road & Rail | 17,400 | 370,490 | |||||||||||
LaSalle Logiport REIT | Equity Real Estate Investment Trusts (REITs | ) | 58 | 96,841 | ||||||||||
Lasertec Corp. | Semiconductors & Semiconductor Equipment | 8,700 | 709,817 | |||||||||||
Lawson Inc. | Food & Staples Retailing | 5,800 | 275,903 | |||||||||||
a | Line Corp. | Interactive Media & Services | 2,900 | 147,295 | ||||||||||
LINTEC Corp. | Chemicals | 5,800 | 134,324 | |||||||||||
Lion Corp. | Household Products | 29,000 | 594,400 | |||||||||||
LIXIL Group Corp. | Building Products | 31,900 | 637,819 | |||||||||||
M3 Inc. | Health Care Technology | 49,300 | 3,036,577 | |||||||||||
Mabuchi Motor Co. Ltd. | Electrical Equipment | 5,800 | 223,965 | |||||||||||
Maeda Corp. | Construction & Engineering | 14,500 | 105,662 | |||||||||||
Maeda Road Construction Co. Ltd. | Construction & Engineering | 2,900 | 52,790 | |||||||||||
Makita Corp. | Machinery | 29,000 | 1,379,513 | |||||||||||
Mani Inc. | Health Care Equipment & Supplies | 5,800 | 157,572 | |||||||||||
Marubeni Corp. | Trading Companies & Distributors | 182,700 | 1,029,235 | |||||||||||
Marui Group Co. Ltd. | Multiline Retail | 23,200 | 442,104 | |||||||||||
Maruichi Steel Tube Ltd. | Metals & Mining | 5,800 | 144,327 | |||||||||||
Matsui Securities Co. Ltd. | Capital Markets | 11,600 | 103,546 | |||||||||||
Matsumotokiyoshi Holdings Co. Ltd. | Food & Staples Retailing | 8,700 | 316,573 | |||||||||||
Mazda Motor Corp. | Automobiles | 66,700 | 386,181 | |||||||||||
Mebuki Financial Group Inc. | Banks | 116,000 | 261,613 | |||||||||||
Medipal Holdings Corp. | Health Care Providers & Services | 17,400 | 347,077 |
232 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Megmilk Snow Brand Co. Ltd. | Food Products | 5,800 | $ | 140,095 | ||||||||||
Meiji Holdings Co. Ltd. | Food Products | 15,800 | 1,203,752 | |||||||||||
Minebea Mitsumi Inc. | Machinery | 46,400 | 874,974 | |||||||||||
Miraca Holdings Inc. | Health Care Providers & Services | 5,800 | 154,549 | |||||||||||
MISUMI Group Inc. | Machinery | 31,900 | 887,203 | |||||||||||
Mitsubishi Chemical Holdings Corp. | Chemicals | 147,900 | 848,887 | |||||||||||
Mitsubishi Corp. | Trading Companies & Distributors | 139,200 | 3,314,129 | |||||||||||
Mitsubishi Electric Corp. | Electrical Equipment | 229,100 | 3,086,001 | |||||||||||
Mitsubishi Estate Co. Ltd. | Real Estate Management & Development | 133,400 | 2,006,120 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 20,300 | 374,337 | |||||||||||
Mitsubishi Heavy Industries Ltd. | Machinery | 31,900 | 704,472 | |||||||||||
Mitsubishi Logistics Corp. | Transportation Infrastructure | 8,700 | 246,334 | |||||||||||
Mitsubishi Materials Corp. | Metals & Mining | 14,500 | 284,421 | |||||||||||
a | Mitsubishi Motors Corp. | Automobiles | 72,500 | 158,699 | ||||||||||
Mitsubishi Shokuhin Co. Ltd. | Food & Staples Retailing | 2,900 | 76,148 | |||||||||||
Mitsubishi UFJ Financial Group Inc. | Banks | 1,455,800 | 5,740,153 | |||||||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | Diversified Financial Services | 52,200 | 239,903 | |||||||||||
Mitsui & Co. Ltd. | Trading Companies & Distributors | 191,400 | 3,270,105 | |||||||||||
Mitsui Chemicals Inc. | Chemicals | 20,300 | 487,831 | |||||||||||
Mitsui Fudosan Co. Ltd. | Real Estate Management & Development | 107,300 | 1,857,135 | |||||||||||
Mitsui Mining and Smelting Co. Ltd. | Metals & Mining | 5,800 | 139,875 | |||||||||||
Mitsui O.S.K. Lines Ltd. | Marine | 11,600 | 226,218 | |||||||||||
Miura Co. Ltd. | Machinery | 11,600 | 564,996 | |||||||||||
Mizuho Financial Group Inc. | Banks | 296,670 | 3,684,128 | |||||||||||
Mochida Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,900 | 114,181 | |||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 14,500 | 717,237 | |||||||||||
Mori Hills REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 58 | 75,241 | ||||||||||
Morinaga & Co. Ltd. | Food Products | 5,800 | 227,812 | |||||||||||
Morinaga Milk Industry Co. Ltd. | Food Products | 5,800 | 304,482 | |||||||||||
MS&AD Insurance Group Holdings Inc. | Insurance | 55,100 | 1,474,485 | |||||||||||
Murata Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 66,700 | 4,280,859 | |||||||||||
Nabtesco Corp. | Machinery | 14,500 | 524,187 | |||||||||||
Nagase & Co. Ltd. | Trading Companies & Distributors | 11,600 | 161,365 | |||||||||||
Nagoya Railroad Co. Ltd. | Road & Rail | 23,200 | 633,587 | |||||||||||
Nankai Electric Railway Co. Ltd. | Road & Rail | 11,600 | 256,117 | |||||||||||
NEC Corp. | IT Services | 31,900 | 1,856,022 | |||||||||||
NEC System Integration & Construction Ltd. | IT Services | 8,700 | 165,954 | |||||||||||
Net One Systems Co. Ltd. | IT Services | 8,700 | 394,068 | |||||||||||
Nexon Co. Ltd. | Entertainment | 46,400 | 1,152,855 | |||||||||||
NGK Insulators Ltd. | Machinery | 29,000 | 410,831 | |||||||||||
NGK Spark Plug Co. Ltd. | Auto Components | 23,200 | 402,312 | |||||||||||
NH Foods Ltd. | Food Products | 11,600 | 515,531 | |||||||||||
NHK Spring Co. Ltd. | Auto Components | 17,400 | 110,636 | |||||||||||
Nichirei Corp. | Food Products | 11,600 | 305,911 | |||||||||||
Nidec Corp. | Electrical Equipment | 53,600 | 4,980,081 | |||||||||||
Nifco Inc. | Auto Components | 8,700 | 235,946 | |||||||||||
Nihon Kohden Corp. | Health Care Equipment & Supplies | 8,700 | 285,246 | |||||||||||
Nihon M&A Center Inc. | Professional Services | 14,500 | 821,662 | |||||||||||
Nihon Unisys Ltd. | IT Services | 8,700 | 272,055 | |||||||||||
Nikon Corp. | Household Durables | 37,700 | 252,929 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 12,458 | 7,042,967 | |||||||||||
Nippo Corp. | Construction & Engineering | 5,800 | 159,606 | |||||||||||
Nippon Accommodations Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 15 | 86,279 | ||||||||||
Nippon Building Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 29 | 163,783 | ||||||||||
Nippon Electric Glass Co. Ltd. | Electronic Equipment, Instruments & Components | 8,700 | 161,419 | |||||||||||
Nippon Express Co. Ltd. | Road & Rail | 8,700 | 506,188 | |||||||||||
Nippon Kayaku Co. Ltd. | Chemicals | 20,300 | 178,512 |
franklintempleton.com | Semiannual Report | 233 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Nippon Paint Holdings Co. Ltd. | Chemicals | 17,400 | $ | 1,782,375 | ||||||||||
Nippon Paper Industries Co. Ltd. | Paper & Forest Products | 11,600 | 143,228 | |||||||||||
Nippon Prologis REIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 58 | 195,385 | ||||||||||
Nippon Sanso Holdings Corp. | Chemicals | 17,400 | 266,284 | |||||||||||
Nippon Shinyaku Co. Ltd. | Pharmaceuticals | 5,800 | 474,860 | |||||||||||
Nippon Shobukai Co. Ltd. | Chemicals | 2,900 | 153,890 | |||||||||||
a | Nippon Steel Corp. | Metals & Mining | 95,700 | 897,329 | ||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 145,000 | 2,954,136 | |||||||||||
Nippon Television Holdings Inc. | Media | 2,900 | 31,025 | |||||||||||
Nippon Yusen KK | Marine | 17,400 | 299,591 | |||||||||||
Nipro Corp. | Health Care Equipment & Supplies | 14,500 | 168,317 | |||||||||||
Nishi-Nippon Railroad Co. Ltd. | Road & Rail | 8,700 | 251,033 | |||||||||||
Nissan Chemical Corp. | Chemicals | 17,400 | 923,339 | |||||||||||
a | Nissan Motor Co. Ltd. | Automobiles | 226,200 | 796,941 | ||||||||||
Nissan Shatai Co. Ltd. | Automobiles | 8,700 | 75,846 | |||||||||||
Nisshin Seifun Group Inc. | Food Products | 29,000 | 458,097 | |||||||||||
Nisshinbo Holdings Inc. | Industrial Conglomerates | 17,400 | 117,891 | |||||||||||
Nissin Foods Holdings Co. Ltd. | Food Products | 8,700 | 816,166 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 8,700 | 1,801,336 | |||||||||||
Nitto Denko Corp. | Chemicals | 17,400 | 1,127,793 | |||||||||||
Noevir Holdings Co. Ltd. | Personal Products | 2,900 | 135,203 | |||||||||||
NOF Corp. | Chemicals | 8,700 | 341,306 | |||||||||||
NOK Corp. | Auto Components | 14,500 | 149,905 | |||||||||||
Nomura Holdings Inc. | Capital Markets | 350,900 | 1,591,403 | |||||||||||
Nomura Real Estate Holdings Inc. | Real Estate Management & Development | 14,500 | 273,979 | |||||||||||
Nomura Real Estate Master Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 116 | 145,096 | ||||||||||
Nomura Research Institute Ltd. | IT Services | 29,000 | 850,516 | |||||||||||
NS Solutions Corp. | IT Services | 2,900 | �� | 89,036 | ||||||||||
NSK Ltd. | Machinery | 52,200 | 396,211 | |||||||||||
NTT Data Corp. | IT Services | 72,500 | 921,965 | |||||||||||
NTT DOCOMO Inc. | Wireless Telecommunication Services | 130,500 | 4,804,250 | |||||||||||
Obayashi Corp. | Construction & Engineering | 78,300 | 708,580 | |||||||||||
OBIC Business Consultants Co. Ltd. | Software | 2,900 | 167,630 | |||||||||||
OBIC Co. Ltd. | IT Services | 7,620 | 1,331,496 | |||||||||||
Odakyu Electric Railway Co. Ltd. | Road & Rail | 34,800 | 871,896 | |||||||||||
Oji Holdings Corp. | Paper & Forest Products | 104,400 | 476,839 | |||||||||||
Okuma Corp. | Machinery | 2,900 | 135,066 | |||||||||||
Olympus Corp. | Health Care Equipment & Supplies | 121,800 | 2,518,408 | |||||||||||
Omron Corp. | Electronic Equipment, Instruments & Components | 21,400 | 1,658,789 | |||||||||||
Ono Pharmaceutical Co. Ltd. | Pharmaceuticals | 49,300 | 1,543,516 | |||||||||||
Open House Co. Ltd. | Real Estate Management & Development | 8,700 | 313,276 | |||||||||||
Oracle Corp. Japan | Software | 3,920 | 420,491 | |||||||||||
Orient Corp. | Consumer Finance | 63,800 | 68,316 | |||||||||||
Oriental Land Co. Ltd. | Hotels, Restaurants & Leisure | 21,900 | 3,058,903 | |||||||||||
ORIX Corp. | Diversified Financial Services | 145,000 | 1,793,092 | |||||||||||
ORIX JREIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 87 | 132,977 | ||||||||||
Osaka Gas Co. Ltd. | Gas Utilities | 46,400 | 901,355 | |||||||||||
OSG Corp. | Machinery | 8,700 | 138,913 | |||||||||||
Otsuka Corp. | IT Services | 11,600 | 591,377 | |||||||||||
Otsuka Holdings Co. Ltd. | Pharmaceuticals | 49,300 | 2,077,953 | |||||||||||
Paltac Corp. | Distributors | 2,900 | 145,921 | |||||||||||
Pan Pacific International Holdings Corp. | Multiline Retail | 58,000 | 1,346,537 | |||||||||||
Panasonic Corp. | Household Durables | 249,400 | 2,100,509 | |||||||||||
Park24 Co. Ltd. | Commercial Services & Supplies | 11,600 | 186,537 | |||||||||||
Penta-Ocean Construction Co. Ltd. | Construction & Engineering | 31,900 | 207,669 | |||||||||||
a | PeptiDream Inc. | Biotechnology | 8,700 | 405,610 | ||||||||||
Persol Holdings Co. Ltd. | Professional Services | 20,300 | 327,593 |
234 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Pigeon Corp. | Household Products | 11,600 | $ | 516,630 | ||||||||||
Pilot Corp. | Commercial Services & Supplies | 2,900 | 84,914 | |||||||||||
Pola Orbis Holdings Inc. | Personal Products | 8,700 | 163,481 | |||||||||||
Rakuten Inc. | Internet & Direct Marketing Retail | 92,800 | 995,448 | |||||||||||
Recruit Holdings Co. Ltd. | Professional Services | 147,900 | 5,830,228 | |||||||||||
Relo Group Inc. | Real Estate Management & Development | 11,600 | 276,562 | |||||||||||
a | Renesas Electronics Corp. | Semiconductors & Semiconductor Equipment | 81,200 | 588,629 | ||||||||||
Rengo Co. Ltd. | Containers & Packaging | 23,200 | 174,555 | |||||||||||
Resona Holdings Inc. | Banks | 252,300 | 854,946 | |||||||||||
Resorttrust Inc. | Hotels, Restaurants & Leisure | 5,800 | 88,047 | |||||||||||
Ricoh Co. Ltd. | Technology Hardware, Storage & Peripherals | 78,300 | 523,830 | |||||||||||
Rinnai Corp. | Household Durables | 4,300 | 417,654 | |||||||||||
Rohm Co. Ltd. | Semiconductors & Semiconductor Equipment | 9,500 | 729,177 | |||||||||||
Rohto Pharmaceutical Co. Ltd. | Personal Products | 11,600 | 379,778 | |||||||||||
Ryohin Keikaku Co. Ltd. | Multiline Retail | 26,100 | 430,342 | |||||||||||
Sankyo Co. Ltd. | Leisure Products | 5,800 | 151,417 | |||||||||||
Sankyu Inc. | Road & Rail | 5,800 | 227,262 | |||||||||||
Sanrio Co. Ltd. | Specialty Retail | 5,800 | 104,096 | |||||||||||
Santen Pharmaceutical Co. Ltd. | Pharmaceuticals | 40,600 | 826,773 | |||||||||||
Sanwa Holdings Corp. | Building Products | 23,200 | 244,245 | |||||||||||
Sapporo Holdings Ltd. | Beverages | 8,700 | 155,566 | |||||||||||
Sawai Pharmaceutical Co. Ltd. | Pharmaceuticals | 5,800 | 291,841 | |||||||||||
SBI Holdings Inc. | Capital Markets | 26,100 | 670,987 | |||||||||||
SCREEN Holdings Co. Ltd. | Semiconductors & Semiconductor Equipment | 4,200 | 221,681 | |||||||||||
SCSK Corp. | IT Services | 5,800 | 322,619 | |||||||||||
Secom Co. Ltd. | Commercial Services & Supplies | 22,400 | 2,038,988 | |||||||||||
Sega Sammy Holdings Inc. | Leisure Products | 23,200 | 280,959 | |||||||||||
Seibu Holdings Inc. | Road & Rail | 23,200 | 248,422 | |||||||||||
Seiko Epson Corp. | Technology Hardware, Storage & Peripherals | 31,900 | 364,252 | |||||||||||
Seino Holdings Co. Ltd. | Road & Rail | 14,500 | 209,675 | |||||||||||
Sekisui Chemical Co. Ltd. | Household Durables | 40,600 | 645,183 | |||||||||||
Sekisui House Ltd. | Household Durables | 66,700 | 1,174,029 | |||||||||||
Sekisui House Reit Inc. | Equity Real Estate Investment Trusts (REITs | ) | 116 | 85,299 | ||||||||||
Seven & i Holdings Co. Ltd. | Food & Staples Retailing | 89,900 | 2,768,644 | |||||||||||
Seven Bank Ltd. | Banks | 75,400 | 182,195 | |||||||||||
SG Holdings Co. Ltd. | Air Freight & Logistics | 26,100 | 1,347,911 | |||||||||||
Sharp Corp. | Household Durables | 17,400 | 214,017 | |||||||||||
Shikoku Electric Power Co. Inc. | Electric Utilities | 17,400 | 132,565 | |||||||||||
Shimadzu Corp. | Electronic Equipment, Instruments & Components | 31,900 | 964,285 | |||||||||||
Shimamura Co. Ltd. | Specialty Retail | 2,900 | 281,124 | |||||||||||
SHIMANO Inc. | Leisure Products | 8,700 | 1,708,178 | |||||||||||
Shimizu Corp. | Construction & Engineering | 63,800 | 477,004 | |||||||||||
Shin-Etsu Chemical Co. Ltd. | Chemicals | 46,400 | 6,017,095 | |||||||||||
Shinsei Bank Ltd. | Banks | 20,300 | 248,917 | |||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 31,900 | 1,701,555 | |||||||||||
Ship Healthcare Holdings Inc. | Health Care Providers & Services | 5,800 | 281,948 | |||||||||||
Shiseido Co. Ltd. | Personal Products | 45,400 | 2,596,314 | |||||||||||
SHO-BOND Holdings Co. Ltd. | Construction & Engineering | 5,800 | 286,895 | |||||||||||
Shochiku Co. Ltd. | Entertainment | 1,020 | 148,559 | |||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 43,500 | 405,610 | |||||||||||
Showa Denko K.K. | Chemicals | 17,400 | 316,903 | |||||||||||
Sky Perfect JSAT Holdings Inc. | Media | 14,500 | 63,067 | |||||||||||
Skylark Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 20,300 | 288,544 | |||||||||||
SMC Corp. | Machinery | 6,648 | 3,682,764 | |||||||||||
SMS Co. Ltd. | Professional Services | 5,800 | 167,080 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 321,900 | 3,591,749 | |||||||||||
SoftBank Group Corp. | Wireless Telecommunication Services | 171,100 | 10,488,448 |
franklintempleton.com | Semiannual Report | 235 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Sohgo Security Services Co. Ltd. | Commercial Services & Supplies | 8,700 | $ | 412,205 | ||||||||||
Sojitz Corp. | Trading Companies & Distributors | 142,100 | 320,476 | |||||||||||
Sompo Holdings Inc. | Insurance | 40,600 | 1,396,166 | |||||||||||
Sony Corp. | Household Durables | 142,100 | 10,815,381 | |||||||||||
Sotetsu Holdings Inc. | Road & Rail | 8,700 | 233,720 | |||||||||||
Square Enix Holdings Co. Ltd. | Entertainment | 8,700 | 573,789 | |||||||||||
Stanley Electric Co. Ltd. | Auto Components | 17,400 | 497,119 | |||||||||||
Subaru Corp. | Automobiles | 69,600 | 1,340,161 | |||||||||||
Sugi Pharmacy Co. Ltd. | Food & Staples Retailing | 2,900 | 204,454 | |||||||||||
Sumco Corp. | Semiconductors & Semiconductor Equipment | 26,100 | 364,801 | |||||||||||
Sumitomo Bakelite Co. Ltd. | Chemicals | 2,900 | 79,198 | |||||||||||
Sumitomo Chemical Co. Ltd. | Chemicals | 176,900 | 581,676 | |||||||||||
Sumitomo Corp. | Trading Companies & Distributors | 130,500 | 1,556,280 | |||||||||||
Sumitomo Dainippon Pharma Co. Ltd. | Pharmaceuticals | 20,300 | 266,037 | |||||||||||
Sumitomo Electric Industries Ltd. | Auto Components | 87,000 | 971,980 | |||||||||||
Sumitomo Forestry Co. Ltd. | Household Durables | 14,500 | 229,461 | |||||||||||
Sumitomo Heavy Industries Ltd. | Machinery | 14,500 | 335,535 | |||||||||||
Sumitomo Metal Mining Co. Ltd. | Metals & Mining | 29,000 | 891,737 | |||||||||||
Sumitomo Mitsui Financial Group Inc. | Banks | 150,800 | 4,169,042 | |||||||||||
Sumitomo Osaka Cement Co. Ltd. | Construction Materials | 2,900 | 93,296 | |||||||||||
Sumitomo Realty & Development Co. Ltd. | Real Estate Management & Development | 46,400 | 1,363,904 | |||||||||||
Sumitomo Rubber Industries Ltd. | Auto Components | 20,300 | 187,169 | |||||||||||
Sundrug Co. Ltd. | Food & Staples Retailing | 8,700 | 326,879 | |||||||||||
Suntory Beverage & Food Ltd. | Beverages | 14,500 | 542,737 | |||||||||||
Sushiro Global Holdings Ltd | Hotels, Restaurants & Leisure | 11,600 | 291,072 | |||||||||||
Suzuken Co. Ltd. | Health Care Providers & Services | 8,700 | 330,176 | |||||||||||
Suzuki Motor Corp. | Automobiles | 52,200 | 2,217,498 | |||||||||||
Sysmex Corp. | Health Care Equipment & Supplies | 21,900 | 2,081,465 | |||||||||||
T&D Holdings Inc. | Insurance | 63,800 | 623,914 | |||||||||||
Taiheiyo Cement Corp. | Construction Materials | 14,500 | 367,412 | |||||||||||
Taisei Corp. | Construction & Engineering | 23,200 | 780,442 | |||||||||||
Taisho Pharmaceutical Holdings Co. Ltd. | Pharmaceuticals | 5,800 | 380,328 | |||||||||||
Taiyo Yuden Co. Ltd. | Electronic Equipment, Instruments & Components | 14,500 | 452,052 | |||||||||||
Takara Bio Inc. | Biotechnology | 5,800 | 156,968 | |||||||||||
Takara Holdings Inc. | Beverages | 20,300 | 224,294 | |||||||||||
Takashimaya Co. Ltd. | Multiline Retail | 17,400 | 137,017 | |||||||||||
Takeda Pharmaceutical Co. Ltd. | Pharmaceuticals | 176,900 | 6,276,069 | |||||||||||
TBS Holdings Inc. | Media | 2,900 | 49,629 | |||||||||||
TDK Corp. | Electronic Equipment, Instruments & Components | 14,500 | 1,567,753 | |||||||||||
TechnoPro Holdings Inc. | Professional Services | 2,900 | 179,172 | |||||||||||
Teijin Ltd. | Chemicals | 20,300 | 313,358 | |||||||||||
Terumo Corp. | Health Care Equipment & Supplies | 75,400 | 2,986,563 | |||||||||||
The 77 Bank Ltd. | Banks | 8,700 | 133,554 | |||||||||||
The Bank of Kyoto Ltd. | Banks | 8,700 | 417,976 | |||||||||||
The Chiba Bank Ltd. | Banks | 72,500 | 397,778 | |||||||||||
The Chugoku Bank Ltd. | Banks | 20,300 | 193,709 | |||||||||||
The Chugoku Electric Power Co. Inc. | Electric Utilities | 34,800 | 434,959 | |||||||||||
The Dai-ichi Life Holdings Inc. | Insurance | 124,700 | 1,745,304 | |||||||||||
a | The Hiroshima Bank Ltd. | Banks | 34,800 | 201,816 | ||||||||||
The Iyo Bank Ltd. | Banks | 31,900 | 210,389 | |||||||||||
The Shiga Bank Ltd. | Banks | 5,800 | 135,313 | |||||||||||
The Shizuoka Bank Ltd. | Banks | 58,000 | 399,014 | |||||||||||
THK Co. Ltd. | Machinery | 14,500 | 361,229 | |||||||||||
TIS Inc. | IT Services | 29,000 | 612,262 | |||||||||||
Tobu Railway Co. Ltd. | Road & Rail | 23,200 | 713,390 | |||||||||||
Toda Corp. | Construction & Engineering | 26,100 | 178,073 | |||||||||||
Toho Co. Ltd. | Entertainment | 14,500 | 595,636 |
236 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Toho Gas Co. Ltd. | Gas Utilities | 11,600 | $ | 573,789 | ||||||||||
Tohoku Electric Power Co. Inc. | Electric Utilities | 55,100 | 551,365 | |||||||||||
Tokai Carbon Co. Ltd. | Chemicals | 23,200 | 246,663 | |||||||||||
Tokai Rika Co. Ltd. | Auto Components | 5,800 | 86,013 | |||||||||||
Tokio Marine Holdings Inc. | Insurance | 75,400 | 3,286,648 | |||||||||||
Tokuyama Corp. | Chemicals | 8,700 | 208,081 | |||||||||||
Tokyo Century Corp. | Diversified Financial Services | 5,800 | 313,825 | |||||||||||
a | Tokyo Electric Power Co. Holdings Inc. | Electric Utilities | 179,800 | 492,393 | ||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 17,400 | 4,506,226 | |||||||||||
Tokyo Gas Co. Ltd. | Gas Utilities | 49,300 | 1,124,001 | |||||||||||
Tokyo Ohka Kogyo Co. Ltd. | Chemicals | 2,900 | 149,218 | |||||||||||
Tokyo Tatemono Co. Ltd. | Real Estate Management & Development | 23,200 | 282,058 | |||||||||||
TOKYU Corp. | Road & Rail | 55,100 | 711,658 | |||||||||||
Tokyu Fudosan Holdings Corp. | Real Estate Management & Development | 69,600 | 297,447 | |||||||||||
Toppan Printing Co. Ltd. | Commercial Services & Supplies | 31,900 | 446,775 | |||||||||||
Toray Industries Inc. | Chemicals | 176,900 | 803,451 | |||||||||||
Toshiba Corp. | Industrial Conglomerates | 52,200 | 1,321,200 | |||||||||||
Toshiba Tec Corp. | Technology Hardware, Storage & Peripherals | 2,900 | 120,776 | |||||||||||
Tosoh Corp. | Chemicals | 31,900 | 515,394 | |||||||||||
TOTO Ltd. | Building Products | 17,400 | 795,556 | |||||||||||
Toyo Seikan Group Holdings Ltd. | Containers & Packaging | 17,400 | 171,807 | |||||||||||
Toyo Suisan Kaisha Ltd. | Food Products | 11,600 | 611,163 | |||||||||||
Toyo Tire Corp. | Auto Components | 11,600 | 185,987 | |||||||||||
Toyobo Co. Ltd. | Chemicals | 8,700 | 119,292 | |||||||||||
Toyoda Gosei Co. Ltd. | Auto Components | 8,700 | 198,271 | |||||||||||
Toyota Boshoku Corp. | �� | Auto Components | 5,800 | 81,617 | ||||||||||
Toyota Industries Corp. | Auto Components | 17,400 | 1,094,817 | |||||||||||
Toyota Motor Corp. | Automobiles | 287,100 | 18,858,876 | |||||||||||
Toyota Tsusho Corp. | Trading Companies & Distributors | 26,100 | 727,624 | |||||||||||
Trend Micro Inc. | Software | 14,500 | 880,745 | |||||||||||
TS TECH Co. Ltd. | Auto Components | 5,800 | 162,848 | |||||||||||
Tsumura & Co. | Pharmaceuticals | 8,700 | 269,994 | |||||||||||
Tsuruha Holdings Inc. | Food & Staples Retailing | 4,080 | 576,450 | |||||||||||
TV Asahi Holdings Corp. | Media | 2,900 | 45,782 | |||||||||||
Ube Industries Ltd. | Chemicals | 11,600 | 194,671 | |||||||||||
Ulvac Inc. | Semiconductors & Semiconductor Equipment | 5,800 | 209,125 | |||||||||||
Unicharm Corp. | Household Products | 46,400 | 2,071,798 | |||||||||||
United Urban Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 87 | 96,209 | ||||||||||
Ushio Inc. | Electrical Equipment | 11,600 | 146,855 | |||||||||||
USS Co. Ltd. | Specialty Retail | 23,200 | 413,084 | |||||||||||
Wacoal Corp. | Textiles, Apparel & Luxury Goods | 5,800 | 109,207 | |||||||||||
Welcia Holdings Co. Ltd. | Food & Staples Retailing | 11,600 | 508,386 | |||||||||||
West Japan Railway Co. | Road & Rail | 20,300 | 998,553 | |||||||||||
Yakult Honsha Co. Ltd. | Food Products | 14,500 | 803,800 | |||||||||||
Yamada Holdings Co. Ltd. | Specialty Retail | 89,900 | 446,391 | |||||||||||
Yamaguchi Financial Group Inc. | Banks | 26,100 | 168,922 | |||||||||||
Yamaha Corp. | Leisure Equipment & Products | 17,400 | 827,708 | |||||||||||
Yamaha Motor Co. Ltd. | Automobiles | 31,900 | 460,076 | |||||||||||
Yamato Holdings Co. Ltd. | Air Freight & Logistics | 40,600 | 1,062,225 | |||||||||||
Yamato Kogyo Co. Ltd. | Metals & Mining | 2,900 | 70,487 | |||||||||||
Yamazaki Baking Co. Ltd. | Food Products | 14,500 | 252,682 | |||||||||||
Yaoko Co. Ltd. | Food & Staples Retailing | 2,900 | 214,621 | |||||||||||
YASKAWA Electric Corp. | Machinery | 29,000 | 1,125,320 | |||||||||||
Yokogawa Electric Corp. | Electronic Equipment, Instruments & Components | 29,000 | 457,548 | |||||||||||
Yokohama Rubber Co. Ltd. | Auto Components | 11,600 | 163,893 | |||||||||||
Z Holdings Corp. | Interactive Media & Services | 301,600 | 1,997,711 | |||||||||||
Zenkoku Hosho Co. Ltd. | Diversified Financial Services | 5,800 | 227,262 |
franklintempleton.com | Semiannual Report | 237 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Zensho Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 11,600 | $ | 272,715 | ||||||||||
Zeon Corp. | Chemicals | 17,400 | 181,535 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 11,600 | 321,850 | |||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 448,809,111 | |||||||||||||
|
| |||||||||||||
Short Term Investment (Cost $340,643) 0.1% | ||||||||||||||
United States 0.1% | ||||||||||||||
b,c | Institutional Fiduciary Trust Portfolio, 0.00% | Money Market Funds | 340,643 | 340,643 | ||||||||||
|
| |||||||||||||
Total Investments | 449,149,754 | |||||||||||||
Other Assets, less Liabilities 0.8% | 3,694,298 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 452,844,052 | ||||||||||||
|
|
See Abbreviations on page 331.
aNon-income producing.
bSee Note 3(c) regarding investments in affiliated management investment companies.
cThe rate shown is the annualized seven-day effective yield at period end.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/ Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
Nikkei 225 Mini | Long | 156 | $ | 3,428,068 | 12/10/20 | $ | (20,588 | ) |
*As of period end.
See Note 8 regarding other derivative information.
238 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan Hedged ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 21.35 | $ | 23.12 | $ | 25.11 | $ | 25.91 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.20 | 0.38 | 0.38 | 0.32 | ||||||||||||
Net realized and unrealized gains (losses) | 3.46 | (2.15 | ) | (1.11 | ) | (1.11 | ) | |||||||||
|
| |||||||||||||||
Total from investment operations | 3.66 | (1.77 | ) | (0.73 | ) | (0.79 | ) | |||||||||
|
| |||||||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | — | — | (0.01 | ) | (0.01 | ) | ||||||||||
Net realized gains | — | — | (1.25 | ) | —d | |||||||||||
|
| |||||||||||||||
Total Distributions | — | — | (1.26 | ) | (0.01 | ) | ||||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 25.01 | $ | 21.35 | $ | 23.12 | $ | 25.11 | ||||||||
|
| |||||||||||||||
Total returne | 17.14% | (7.66)% | (2.59)% | (3.04)% | ||||||||||||
Ratios to average net assetsf | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | —% | ||||||||||||
Net investment income | 1.66% | 1.59% | 1.51% | 3.10% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $5,003 | $4,269 | $13,870 | $45,197 | ||||||||||||
Portfolio turnover rateg | 4.68% | h | 10.06% | h | 19.78% | 1.92% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repur
chases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.001 per share.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 4.68% | 10.06% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 239 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Japan Hedged ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 98.6% | ||||||||||||||
Japan 98.6% | ||||||||||||||
ABC-Mart Inc. | Specialty Retail | 34 | $ | 1,762 | ||||||||||
Acom Co. Ltd. | Consumer Finance | 468 | 2,018 | |||||||||||
Advance Residence Investment | Equity Real Estate Investment Trusts (REITs | ) | 1 | 2,947 | ||||||||||
Advantest Corp. | Semiconductors & Semiconductor Equipment | 250 | 12,058 | |||||||||||
AEON Co. Ltd. | Food & Staples Retailing | 868 | 23,244 | |||||||||||
AEON Financial Service Co. Ltd. | Consumer Finance | 134 | 1,210 | |||||||||||
AEON Mall Co. Ltd. | Real Estate Management & Development | 168 | 2,350 | |||||||||||
AGC Inc. | Building Products | 234 | 6,807 | |||||||||||
Aica Kogyo Co. Ltd. | Building Products | 68 | 2,403 | |||||||||||
AIN Holdings Inc. | Food & Staples Retailing | 34 | 2,371 | |||||||||||
Air Water Inc. | Chemicals | 200 | 2,691 | |||||||||||
Aisin Seiki Co. Ltd. | Auto Components | 214 | 6,793 | |||||||||||
Ajinomoto Co. Inc. | Food Products | 614 | 12,562 | |||||||||||
Alfresa Holdings Corp. | Health Care Providers & Services | 200 | 4,355 | |||||||||||
Alps Alpine Co. Ltd. | Electronic Equipment, Instruments & Components | 268 | 3,576 | |||||||||||
Amada Co. Ltd. | Machinery | 434 | 4,039 | |||||||||||
Amano Corp. | Electronic Equipment, Instruments & Components | 100 | 2,317 | |||||||||||
a | ANA Holdings Inc. | Airlines | 142 | 3,270 | ||||||||||
Anritsu Corp. | Electronic Equipment, Instruments & Components | 150 | 3,401 | |||||||||||
Aozora Bank Ltd. | Banks | 168 | 2,775 | |||||||||||
Ariake Japan Co. Ltd. | Food Products | 24 | 1,622 | |||||||||||
As One Corp. | Health Care Providers & Services | 16 | 2,288 | |||||||||||
Asahi Group Holdings Ltd. | Beverages | 531 | 18,396 | |||||||||||
Asahi Intecc Co. Ltd. | Health Care Equipment & Supplies | 240 | 7,505 | |||||||||||
Asahi Kasei Corp. | Chemicals | 1,561 | 13,530 | |||||||||||
Asics Corp. | Textiles, Apparel & Luxury Goods | 200 | 2,775 | |||||||||||
ASKUL Corp. | Internet & Direct Marketing Retail | 34 | 1,381 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 2,400 | 35,637 | |||||||||||
Azbil Corp. | Electronic Equipment, Instruments & Components | 168 | 6,241 | |||||||||||
Bandai Namco Holdings Inc. | Leisure Products | 245 | 17,851 | |||||||||||
Benefit One Inc. | Professional Services | 68 | 1,709 | |||||||||||
Benesse Holdings Inc. | Diversified Consumer Services | 100 | 2,563 | |||||||||||
BIC CAMERA Inc. | Specialty Retail | 168 | 1,855 | |||||||||||
Bridgestone Corp. | Auto Components | 746 | 23,448 | |||||||||||
Brother Industries Ltd. | Technology Hardware, Storage & Peripherals | 300 | 4,736 | |||||||||||
Calbee Inc. | Food Products | 100 | 3,283 | |||||||||||
CANON Inc. | Technology Hardware, Storage & Peripherals | 1,300 | 21,515 | |||||||||||
Canon Marketing Japan Inc. | Electronic Equipment, Instruments & Components | 68 | 1,354 | |||||||||||
Capcom Co. Ltd. | Entertainment | 113 | 6,275 | |||||||||||
Casio Computer Co. Ltd. | Household Durables | 268 | 4,302 | |||||||||||
Central Japan Railway Co. | Road & Rail | 223 | 31,887 | |||||||||||
Chubu Electric Power Co. Inc. | Electric Utilities | 885 | 10,743 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 849 | 37,933 | |||||||||||
Chuo Mitsui Trust Holdings Inc. | Banks | 468 | 12,384 | |||||||||||
Coca-Cola Bottlers Japan Holdings Inc. | Beverages | 168 | 2,800 | |||||||||||
COMSYS Holdings Corp. | Construction & Engineering | 134 | 3,709 | |||||||||||
Concordia Financial Group Ltd. | Banks | 1,468 | 5,077 | |||||||||||
Cosmo Energy Holdings Co. Ltd. | Oil, Gas & Consumable Fuels | 80 | 1,138 | |||||||||||
Cosmos Pharmaceutical Corp. | Food & Staples Retailing | 22 | 3,825 | |||||||||||
Credit Saison Co. Ltd. | Consumer Finance | 200 | 2,107 | |||||||||||
CyberAgent Inc. | Media | 124 | 7,602 | |||||||||||
Dai Nippon Printing Co. Ltd. | Commercial Services & Supplies | 368 | 7,414 | |||||||||||
Daicel Corp. | Chemicals | 368 | 2,640 | |||||||||||
Daido Steel Co. Ltd. | Metals & Mining | 42 | 1,297 | |||||||||||
Daifuku Co. Ltd. | Machinery | 120 | 12,031 | |||||||||||
Daiichi Sankyo Co. Ltd. | Pharmaceuticals | 2,400 | 73,435 | |||||||||||
Daiichikosho Co. Ltd. | Entertainment | 60 | 1,919 |
240 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Daikin Industries Ltd. | Building Products | 341 | $ | 62,364 | ||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 86 | 7,595 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 818 | 20,909 | |||||||||||
Daiwa House Residential Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 1 | 2,549 | ||||||||||
Daiwa Securities Group Inc. | Capital Markets | 1,934 | 8,077 | |||||||||||
DeNA Co. Ltd. | Entertainment | 134 | 2,453 | |||||||||||
Denka Co. Ltd. | Chemicals | 100 | 3,028 | |||||||||||
Denso Corp. | Auto Components | 600 | 26,137 | |||||||||||
Dentsu Group Inc. | Media | 275 | 8,065 | |||||||||||
DIC Corp. | Chemicals | 100 | 2,481 | |||||||||||
Disco Corp. | Semiconductors & Semiconductor Equipment | 34 | 8,187 | |||||||||||
DMG Mori Co. Ltd. | Machinery | 134 | 1,844 | |||||||||||
Dowa Holdings Co. Ltd. | Metals & Mining | 68 | 1,985 | |||||||||||
East Japan Railway Co. | Road & Rail | 472 | 28,983 | |||||||||||
EBARA Corp. | Machinery | 134 | 3,610 | |||||||||||
Eisai Co. Ltd. | Pharmaceuticals | 332 | 30,152 | |||||||||||
Elecom Co. Ltd. | Technology Hardware, Storage & Peripherals | 20 | 978 | |||||||||||
Electric Power Development Co. Ltd. | Independent Power and Renewable Electricity Producers | 200 | 3,076 | |||||||||||
ENEOS Holdings Inc. | Oil, Gas & Consumable Fuels | 3,816 | 13,560 | |||||||||||
Ezaki Glico Co. Ltd. | Food Products | 68 | 3,038 | |||||||||||
Fancl Corp. | Personal Products | 83 | 2,694 | |||||||||||
FANUC Corp. | Machinery | 245 | 46,711 | |||||||||||
Fast Retailing Co. Ltd. | Specialty Retail | 65 | 40,566 | |||||||||||
FP Corp. | Containers & Packaging | 68 | 2,855 | |||||||||||
Fuji Electric Co. Ltd. | Electrical Equipment | 168 | 5,269 | |||||||||||
Fuji Media Holdings Inc. | Media | 68 | 651 | |||||||||||
Fuji Oil Holdings Inc. | Food Products | 68 | 2,133 | |||||||||||
Fuji Seal International Inc. | Containers & Packaging | 68 | 1,304 | |||||||||||
FUJIFILM Holdings Corp. | Technology Hardware, Storage & Peripherals | 456 | 22,405 | |||||||||||
Fujitsu General Ltd. | Household Durables | 68 | 1,965 | |||||||||||
Fujitsu Ltd. | IT Services | 240 | 32,613 | |||||||||||
Fukuoka Financial Group Inc. | Banks | 200 | 3,343 | |||||||||||
Fukuyama Transporting Co. Ltd. | Road & Rail | 34 | 1,646 | |||||||||||
Furukawa Electric Co. Ltd. | Electrical Equipment | 78 | 1,849 | |||||||||||
Fuyo General Lease Co. Ltd. | Diversified Financial Services | 25 | 1,540 | |||||||||||
Glory Ltd. | Machinery | 68 | 1,513 | |||||||||||
GLP J-REIT | Equity Real Estate Investment Trusts (REITs | ) | 1 | 1,543 | ||||||||||
GMO Internet Inc. | IT Services | 100 | 2,597 | |||||||||||
GMO Payment Gateway Inc. | IT Services | 52 | 5,539 | |||||||||||
Goldwin Inc. | Textiles, Apparel & Luxury Goods | 44 | 3,477 | |||||||||||
GS Yuasa Corp. | Electrical Equipment | 100 | 1,713 | |||||||||||
GungHo Online Entertainment Inc. | Entertainment | 50 | 1,069 | |||||||||||
Gunma Bank Ltd. | Banks | 534 | 1,771 | |||||||||||
Hachijuni Bank Ltd. | Banks | 568 | 2,223 | |||||||||||
Hakuhodo DY Holdings Inc. | Media | 300 | 3,852 | |||||||||||
Hamamatsu Photonics K.K. | Electronic Equipment, Instruments & Components | 168 | 8,421 | |||||||||||
Hankyu Hanshin Holdings Inc. | Road & Rail | 275 | 8,808 | |||||||||||
Haseko Corp. | Household Durables | 368 | 4,812 | |||||||||||
Heiwa Corp. | Leisure Equipment & Products | 68 | 1,115 | |||||||||||
Hikari Tsushin Inc. | Specialty Retail | 29 | 6,865 | |||||||||||
Hino Motors Ltd. | Machinery | 368 | 2,368 | |||||||||||
Hirose Electric Co. Ltd. | Electronic Equipment, Instruments & Components | 42 | 5,385 | |||||||||||
Hisamitsu Pharmaceutical Co. Inc. | Pharmaceuticals | 100 | 5,089 | |||||||||||
Hitachi Capital Corp. | Consumer Finance | 68 | 1,587 | |||||||||||
Hitachi Construction Machinery Co. Ltd. | Machinery | 134 | 4,825 | |||||||||||
Hitachi Ltd. | Electronic Equipment, Instruments & Components | 1,200 | 40,288 | |||||||||||
Hitachi Metals Ltd. | Metals & Mining | 268 | 4,101 |
franklintempleton.com | Semiannual Report | 241 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Hitachi Transport System Ltd. | Road & Rail | 52 | $ | 1,638 | ||||||||||
Hokugin Financial Group Inc. | Banks | 134 | 1,342 | |||||||||||
Hokuriku Electric Power Co. | Electric Utilities | 200 | 1,495 | |||||||||||
Honda Motor Co. Ltd. | Automobiles | 2,200 | 51,565 | |||||||||||
HORIBA Ltd. | Electronic Equipment, Instruments & Components | 46 | 2,389 | |||||||||||
Hoshizaki Corp. | Machinery | 68 | 5,400 | |||||||||||
House Foods Group Inc. | Food Products | 100 | 3,544 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 471 | 52,933 | |||||||||||
Ibiden Co. Ltd. | Electronic Equipment, Instruments & Components | 134 | 4,508 | |||||||||||
Ichigo Inc. | Real Estate Management & Development | 300 | 867 | |||||||||||
Idemitsu Kosan Co. Ltd. | Oil, Gas & Consumable Fuels | 297 | 6,310 | |||||||||||
IHI Corp. | Machinery | 168 | 2,221 | |||||||||||
Iida Group Holdings Co. Ltd. | Household Durables | 168 | 3,380 | |||||||||||
Industrial & Infrastructure Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 1 | 1,709 | ||||||||||
INPEX Corp. | Oil, Gas & Consumable Fuels | 1,160 | 6,194 | |||||||||||
Isetan Mitsukoshi Holdings Ltd. | Multiline Retail | 434 | 2,287 | |||||||||||
Isuzu Motors Ltd. | Automobiles | 634 | 5,512 | |||||||||||
Ito En Ltd. | Beverages | 68 | 4,839 | |||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 1,738 | 44,220 | |||||||||||
ITOCHU Techno-Solutions Corp. | IT Services | 150 | 5,664 | |||||||||||
Itoham Yonekyu Holdings Inc. | Food Products | 168 | 1,199 | |||||||||||
Izumi Co. Ltd. | Multiline Retail | 52 | 1,885 | |||||||||||
J Front Retailing Co. Ltd. | Multiline Retail | 300 | 2,155 | |||||||||||
a | Japan Airlines Co. Ltd. | Airlines | 146 | 2,720 | ||||||||||
Japan Airport Terminal Co. Ltd. | Transportation Infrastructure | 68 | 2,983 | |||||||||||
Japan Aviatn Elect | Electronic Equipment, Instruments & Components | 68 | 929 | |||||||||||
Japan Exchange Group Inc. | Capital Markets | 668 | 18,597 | |||||||||||
Japan Post Bank Co. Ltd. | Banks | 525 | 4,084 | |||||||||||
Japan Post Holdings Co. Ltd. | Insurance | 1,734 | 11,762 | |||||||||||
Japan Post Insurance Co. Ltd. | Insurance | 249 | 3,896 | |||||||||||
Japan Retail Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 1 | 1,539 | ||||||||||
Japan Tobacco Inc. | Tobacco | 1,500 | 27,291 | |||||||||||
JCR Pharmaceuticals Co. Ltd. | Pharmaceuticals | 100 | 2,909 | |||||||||||
a | JFE Holdings Inc. | Metals & Mining | 653 | 4,529 | ||||||||||
JGC Holdings Corp. | Construction & Engineering | 268 | 2,763 | |||||||||||
JSR Corp. | Chemicals | 234 | 5,519 | |||||||||||
JTEKT Corp. | Auto Components | 300 | 2,331 | |||||||||||
Justsystems Corp. | Software | 50 | 3,520 | |||||||||||
K’s Holdings Corp. | Specialty Retail | 234 | 3,149 | |||||||||||
Kagome Co. Ltd. | Food Products | 100 | 3,487 | |||||||||||
Kajima Corp. | Construction & Engineering | 568 | 6,793 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 168 | 4,405 | |||||||||||
Kaken Pharmaceutical Co. Ltd. | Pharmaceuticals | 40 | 1,827 | |||||||||||
Kamigumi Co. Ltd. | Transportation Infrastructure | 134 | 2,626 | |||||||||||
Kandenko Co. Ltd. | Construction & Engineering | 134 | 1,092 | |||||||||||
Kaneka Corp. | Chemicals | 68 | 1,898 | |||||||||||
Kansai Electric Power Co. Inc. | Electric Utilities | 920 | 8,892 | |||||||||||
Kansai Mirai Financial Group Inc. | Banks | 200 | 817 | |||||||||||
Kansai Paint Co. Ltd. | Chemicals | 247 | 6,104 | |||||||||||
KAO Corp. | Personal Products | 606 | 45,291 | |||||||||||
a | Kawasaki Heavy Industries Ltd. | Machinery | 178 | 2,390 | ||||||||||
KDDI Corp. | Wireless Telecommunication Services | 2,169 | 54,590 | |||||||||||
Keihan Holdings Co. Ltd. | Industrial Conglomerates | 123 | 5,082 | |||||||||||
Keikyu Corp. | Road & Rail | 300 | 4,588 | |||||||||||
Keio Corp. | Road & Rail | 145 | 8,931 | |||||||||||
Keisei Electric Railway Co. Ltd. | Road & Rail | 176 | 4,952 | |||||||||||
Kewpie Corp. | Food Products | 134 | 2,750 |
242 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Keyence Corp. | Electronic Equipment, Instruments & Components | 228 | $ | 105,822 | ||||||||||
Kikkoman Corp. | Food Products | 234 | 12,905 | |||||||||||
Kinden Corp. | Construction & Engineering | 168 | 2,950 | |||||||||||
Kintetsu Group Holdings Co. Ltd. | Road & Rail | 224 | 9,520 | |||||||||||
Kirin Holdings Co. Ltd. | Beverages | 1,016 | 19,000 | |||||||||||
Kissei Pharmaceutical Co. Ltd. | Pharmaceuticals | 34 | 764 | |||||||||||
Kobayashi Pharmaceutical Co. Ltd. | Personal Products | 76 | 7,324 | |||||||||||
Kobe Bussan Co. Ltd. | Food & Staples Retailing | 25 | 1,369 | |||||||||||
a | Kobe Steel Ltd. | Metals & Mining | 400 | 1,512 | ||||||||||
Koei Tecmo Holdings Co. Ltd. | Entertainment | 84 | 4,028 | |||||||||||
Koito Manufacturing Co. Ltd. | Auto Components | 142 | 7,199 | |||||||||||
Kokuyo Co. Ltd. | Commercial Services & Supplies | 100 | 1,251 | |||||||||||
Komatsu Ltd. | Machinery | 1,149 | 25,151 | |||||||||||
Konami Holdings Corp. | Entertainment | 119 | 5,119 | |||||||||||
Konica Minolta Inc. | Technology Hardware, Storage & Peripherals | 568 | 1,593 | |||||||||||
KOSE Corp. | Personal Products | 36 | 4,384 | |||||||||||
Kotobuki Spirits Co. Ltd. | Food Products | 25 | 1,277 | |||||||||||
Kubota Corp. | Machinery | 1,396 | 24,836 | |||||||||||
Kuraray Co. Ltd. | Chemicals | 434 | 4,187 | |||||||||||
Kurita Water Industries Ltd. | Machinery | 134 | 4,393 | |||||||||||
Kusuri No Aoki Holdings Co. Ltd. | Food & Staples Retailing | 20 | 1,626 | |||||||||||
Kyocera Corp. | Electronic Equipment, Instruments & Components | 386 | 21,935 | |||||||||||
Kyoritsu Maintenance Co. Ltd. | Hotels, Restaurants & Leisure | 34 | 1,255 | |||||||||||
Kyowa Exeo Corp. | Construction & Engineering | 134 | 3,482 | |||||||||||
Kyowa Kirin Co. Ltd. | Pharmaceuticals | 284 | 8,036 | |||||||||||
Kyudenko Corp. | Construction & Engineering | 45 | 1,294 | |||||||||||
Kyushu Electric Power Co. Inc. | Electric Utilities | 568 | 5,151 | |||||||||||
Kyushu Financial Group Inc. | Banks | 468 | 2,186 | |||||||||||
Kyushu Railway Co. | Road & Rail | 200 | 4,259 | |||||||||||
LaSalle Logiport REIT | Equity Real Estate Investment Trusts (REITs | ) | 1 | 1,670 | ||||||||||
Lasertec Corp. | Semiconductors & Semiconductor Equipment | 100 | 8,159 | |||||||||||
Lawson Inc. | Food & Staples Retailing | 68 | 3,235 | |||||||||||
a | Line Corp. | Interactive Media & Services | 30 | 1,524 | ||||||||||
LINTEC Corp. | Chemicals | 68 | 1,575 | |||||||||||
Lion Corp. | Household Products | 314 | 6,436 | |||||||||||
LIXIL Group Corp. | Building Products | 334 | 6,678 | |||||||||||
M3 Inc. | Health Care Technology | 527 | 32,460 | |||||||||||
Mabuchi Motor Co. Ltd. | Electrical Equipment | 68 | 2,626 | |||||||||||
Maeda Corp. | Construction & Engineering | 168 | 1,224 | |||||||||||
Maeda Road Construction Co. Ltd. | Construction & Engineering | 68 | 1,238 | |||||||||||
Makita Corp. | Machinery | 307 | 14,604 | |||||||||||
Mani Inc. | Health Care Equipment & Supplies | 100 | 2,717 | |||||||||||
Marubeni Corp. | Trading Companies & Distributors | 1,968 | 11,087 | |||||||||||
Marui Group Co. Ltd. | Multiline Retail | 268 | 5,107 | |||||||||||
Maruichi Steel Tube Ltd. | Metals & Mining | 78 | 1,941 | |||||||||||
Matsui Securities Co. Ltd. | Capital Markets | 134 | 1,196 | |||||||||||
Matsumotokiyoshi Holdings Co. Ltd. | Food & Staples Retailing | 100 | 3,639 | |||||||||||
Mazda Motor Corp. | Automobiles | 724 | 4,192 | |||||||||||
Mebuki Financial Group Inc. | Banks | 1,268 | 2,860 | |||||||||||
Medipal Holdings Corp. | Health Care Providers & Services | 200 | 3,989 | |||||||||||
Megmilk Snow Brand Co. Ltd. | Food Products | 46 | 1,111 | |||||||||||
Meiji Holdings Co. Ltd. | Food Products | 168 | 12,799 | |||||||||||
Minebea Mitsumi Inc. | Machinery | 534 | 10,070 | |||||||||||
Miraca Holdings Inc. | Health Care Providers & Services | 68 | 1,812 | |||||||||||
MISUMI Group Inc. | Machinery | 345 | 9,595 | |||||||||||
Mitsubishi Chemical Holdings Corp. | Chemicals | 1,700 | 9,757 | |||||||||||
Mitsubishi Corp. | Trading Companies & Distributors | 1,526 | 36,332 |
franklintempleton.com | Semiannual Report | 243 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Mitsubishi Electric Corp. | Electrical Equipment | 2,487 | $ | 33,500 | ||||||||||
Mitsubishi Estate Co. Ltd. | Real Estate Management & Development | 1,488 | 22,377 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 234 | 4,315 | |||||||||||
Mitsubishi Heavy Industries Ltd. | Machinery | 360 | 7,950 | |||||||||||
Mitsubishi Logistics Corp. | Transportation Infrastructure | 81 | 2,293 | |||||||||||
Mitsubishi Materials Corp. | Metals & Mining | 168 | 3,295 | |||||||||||
a | Mitsubishi Motors Corp. | Automobiles | 800 | 1,751 | ||||||||||
Mitsubishi Shokuhin Co. Ltd. | Food & Staples Retailing | 34 | 893 | |||||||||||
Mitsubishi UFJ Financial Group Inc. | Banks | 16,000 | 63,087 | |||||||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | Diversified Financial Services | 534 | 2,454 | |||||||||||
Mitsui & Co. Ltd. | Trading Companies & Distributors | 2,137 | 36,511 | |||||||||||
Mitsui Chemicals Inc. | Chemicals | 234 | 5,623 | |||||||||||
Mitsui Fudosan Co. Ltd. | Real Estate Management & Development | 1,181 | 20,441 | |||||||||||
Mitsui Mining and Smelting Co. Ltd. | Metals & Mining | 68 | 1,640 | |||||||||||
Mitsui O.S.K. Lines Ltd. | Marine | 134 | 2,613 | |||||||||||
Miura Co. Ltd. | Machinery | 134 | 6,527 | |||||||||||
Mizuho Financial Group Inc. | Banks | 3,310 | 41,104 | |||||||||||
Mochida Pharmaceutical Co. Ltd. | Pharmaceuticals | 34 | 1,339 | |||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 145 | 7,172 | |||||||||||
Mori Hills REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 1 | 1,297 | ||||||||||
Morinaga & Co. Ltd. | Food Products | 51 | 2,003 | |||||||||||
Morinaga Milk Industry Co. Ltd. | Food Products | 52 | 2,730 | |||||||||||
MS&AD Insurance Group Holdings Inc. | Insurance | 618 | 16,538 | |||||||||||
Murata Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 738 | 47,365 | |||||||||||
Nabtesco Corp. | Machinery | 144 | 5,206 | |||||||||||
Nagase & Co. Ltd. | Trading Companies & Distributors | 134 | 1,864 | |||||||||||
Nagoya Railroad Co. Ltd. | Road & Rail | 244 | 6,664 | |||||||||||
Nankai Electric Railway Co. Ltd. | Road & Rail | 134 | 2,959 | |||||||||||
NEC Corp. | IT Services | 340 | 19,782 | |||||||||||
NEC System Integration & Construction Ltd. | IT Services | 100 | 1,908 | |||||||||||
Net One Systems Co. Ltd. | IT Services | 100 | 4,530 | |||||||||||
Nexon Co. Ltd. | Entertainment | 518 | 12,870 | |||||||||||
NGK Insulators Ltd. | Machinery | 368 | 5,213 | |||||||||||
NGK Spark Plug Co. Ltd. | Auto Components | 247 | 4,283 | |||||||||||
NH Foods Ltd. | Food Products | 134 | 5,955 | |||||||||||
NHK Spring Co. Ltd. | Auto Components | 200 | 1,272 | |||||||||||
Nichirei Corp. | Food Products | 134 | 3,534 | |||||||||||
Nidec Corp. | Electrical Equipment | 600 | 55,747 | |||||||||||
Nifco Inc. | Auto Components | 100 | 2,712 | |||||||||||
Nihon Kohden Corp. | Health Care Equipment & Supplies | 100 | 3,279 | |||||||||||
Nihon M&A Center Inc. | Professional Services | 168 | 9,520 | |||||||||||
Nihon Unisys Ltd. | IT Services | 78 | 2,439 | |||||||||||
Nikon Corp. | Household Durables | 434 | 2,912 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 136 | 76,886 | |||||||||||
Nippo Corp. | Construction & Engineering | 68 | 1,871 | |||||||||||
Nippon Electric Glass Co. Ltd. | Electronic Equipment, Instruments & Components | 100 | 1,855 | |||||||||||
Nippon Express Co. Ltd. | Road & Rail | 100 | 5,818 | |||||||||||
Nippon Kayaku Co. Ltd. | Chemicals | 200 | 1,759 | |||||||||||
Nippon Paint Holdings Co. Ltd. | Chemicals | 200 | 20,487 | |||||||||||
Nippon Paper Industries Co. Ltd. | Paper & Forest Products | 114 | 1,408 | |||||||||||
Nippon Prologis REIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 1 | 3,369 | ||||||||||
Nippon Sanso Holdings Corp. | Chemicals | 181 | 2,770 | |||||||||||
Nippon Shinyaku Co. Ltd. | Pharmaceuticals | 64 | 5,240 | |||||||||||
Nippon Shobukai Co. Ltd. | Chemicals | 39 | 2,070 | |||||||||||
a | Nippon Steel Corp. | Metals & Mining | 1,025 | 9,611 | ||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 1,600 | 32,597 | |||||||||||
Nippon Television Holdings Inc. | Media | 68 | 727 |
244 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Nippon Yusen KK | Marine | 200 | $ | 3,444 | ||||||||||
Nipro Corp. | Health Care Equipment & Supplies | 134 | 1,555 | |||||||||||
Nishi-Nippon Railroad Co. Ltd. | Road & Rail | 100 | 2,885 | |||||||||||
Nissan Chemical Corp. | Chemicals | 168 | 8,915 | |||||||||||
a | Nissan Motor Co. Ltd. | Automobiles | 2,446 | 8,618 | ||||||||||
Nissan Shatai Co. Ltd. | Automobiles | 68 | 593 | |||||||||||
Nisshin Seifun Group Inc. | Food Products | 316 | 4,992 | |||||||||||
Nisshinbo Holdings Inc. | Industrial Conglomerates | 168 | 1,138 | |||||||||||
Nissin Foods Holdings Co. Ltd. | Food Products | 88 | 8,255 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 93 | 19,256 | |||||||||||
Nitto Denko Corp. | Chemicals | 195 | 12,639 | |||||||||||
Noevir Holdings Co. Ltd. | Personal Products | 23 | 1,072 | |||||||||||
NOF Corp. | Chemicals | 100 | 3,923 | |||||||||||
NOK Corp. | Auto Components | 168 | 1,737 | |||||||||||
Nomura Holdings Inc. | Capital Markets | 3,900 | 17,687 | |||||||||||
Nomura Real Estate Holdings Inc. | Real Estate Management & Development | 134 | 2,532 | |||||||||||
Nomura Real Estate Master Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 2 | 2,502 | ||||||||||
Nomura Research Institute Ltd. | IT Services | 335 | 9,825 | |||||||||||
NS Solutions Corp. | IT Services | �� | 34 | 1,044 | ||||||||||
NSK Ltd. | Machinery | 568 | 4,311 | |||||||||||
NTT Data Corp. | IT Services | 800 | 10,173 | |||||||||||
NTT DOCOMO Inc. | Wireless Telecommunication Services | 1,467 | 54,006 | |||||||||||
Obayashi Corp. | Construction & Engineering | 868 | 7,855 | |||||||||||
OBIC Business Consultants Co. Ltd. | Software | 21 | 1,214 | |||||||||||
OBIC Co. Ltd. | IT Services | 83 | 14,503 | |||||||||||
Odakyu Electric Railway Co. Ltd. | Road & Rail | 380 | 9,521 | |||||||||||
Oji Holdings Corp. | Paper & Forest Products | 1,100 | 5,024 | |||||||||||
Okuma Corp. | Machinery | 34 | 1,584 | |||||||||||
Olympus Corp. | Health Care Equipment & Supplies | 1,312 | 27,128 | |||||||||||
Omron Corp. | Electronic Equipment, Instruments & Components | 234 | 18,138 | |||||||||||
Ono Pharmaceutical Co. Ltd. | Pharmaceuticals | 551 | 17,251 | |||||||||||
Open House Co. Ltd. | Real Estate Management & Development | 100 | 3,601 | |||||||||||
Oracle Corp. Japan | Software | 40 | 4,291 | |||||||||||
Orient Corp. | Consumer Finance | 700 | 750 | |||||||||||
Oriental Land Co. Ltd. | Hotels, Restaurants & Leisure | 245 | 34,221 | |||||||||||
ORIX Corp. | Diversified Financial Services | 1,617 | 19,996 | |||||||||||
ORIX JREIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 1 | 1,528 | ||||||||||
Osaka Gas Co. Ltd. | Gas Utilities | 500 | 9,713 | |||||||||||
OSG Corp. | Machinery | 100 | 1,597 | |||||||||||
Otsuka Corp. | IT Services | 134 | 6,831 | |||||||||||
Otsuka Holdings Co. Ltd. | Pharmaceuticals | 526 | 22,170 | |||||||||||
Paltac Corp. | Distributors | 40 | 2,013 | |||||||||||
Pan Pacific International Holdings Corp. | Multiline Retail | 632 | 14,673 | |||||||||||
Panasonic Corp. | Household Durables | 2,800 | 23,582 | |||||||||||
Park24 Co. Ltd. | Commercial Services & Supplies | 143 | 2,300 | |||||||||||
Penta-Ocean Construction Co. Ltd. | Construction & Engineering | 334 | 2,174 | |||||||||||
a | PeptiDream Inc. | Biotechnology | 105 | 4,895 | ||||||||||
Persol Holdings Co. Ltd. | Professional Services | 210 | 3,389 | |||||||||||
Pigeon Corp. | Household Products | 134 | 5,968 | |||||||||||
Pilot Corp. | Commercial Services & Supplies | 41 | 1,201 | |||||||||||
Pola Orbis Holdings Inc. | Personal Products | 100 | 1,879 | |||||||||||
Rakuten Inc. | Internet & Direct Marketing Retail | 993 | 10,652 | |||||||||||
Recruit Holdings Co. Ltd. | Professional Services | 1,621 | 63,900 | |||||||||||
Relo Group Inc. | Real Estate Management & Development | 134 | 3,195 | |||||||||||
a | Renesas Electronics Corp. | Semiconductors & Semiconductor Equipment | 900 | 6,524 | ||||||||||
Rengo Co. Ltd. | Containers & Packaging | 268 | 2,016 | |||||||||||
Resona Holdings Inc. | Banks | 2,734 | 9,264 |
franklintempleton.com | Semiannual Report | 245 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Resorttrust Inc. | Hotels, Restaurants & Leisure | 68 | $ | 1,032 | ||||||||||
Ricoh Co. Ltd. | Technology Hardware, Storage & Peripherals | 859 | 5,747 | |||||||||||
Rinnai Corp. | Household Durables | 44 | 4,274 | |||||||||||
Rohm Co. Ltd. | Semiconductors & Semiconductor Equipment | 109 | 8,366 | |||||||||||
Rohto Pharmaceutical Co. Ltd. | Personal Products | 134 | 4,387 | |||||||||||
Ryohin Keikaku Co. Ltd. | Multiline Retail | 300 | 4,946 | |||||||||||
Sankyo Co. Ltd. | Leisure Products | 68 | 1,775 | |||||||||||
Sankyu Inc. | Road & Rail | 68 | 2,664 | |||||||||||
Sanrio Co. Ltd. | Specialty Retail | 68 | 1,220 | |||||||||||
Santen Pharmaceutical Co. Ltd. | Pharmaceuticals | 448 | 9,123 | |||||||||||
Sanwa Holdings Corp. | Building Products | 234 | 2,464 | |||||||||||
Sapporo Holdings Ltd. | Beverages | 68 | 1,216 | |||||||||||
Sawai Pharmaceutical Co. Ltd. | Pharmaceuticals | 47 | 2,365 | |||||||||||
SBI Holdings Inc. | Capital Markets | 278 | 7,147 | |||||||||||
SCREEN Holdings Co. Ltd. | Semiconductors & Semiconductor Equipment | 48 | 2,534 | |||||||||||
SCSK Corp. | IT Services | 56 | 3,115 | |||||||||||
Secom Co. Ltd. | Commercial Services & Supplies | 244 | 22,210 | |||||||||||
Sega Sammy Holdings Inc. | Leisure Products | 234 | 2,834 | |||||||||||
Seibu Holdings Inc. | Road & Rail | 268 | 2,870 | |||||||||||
Seiko Epson Corp. | Technology Hardware, Storage & Peripherals | 334 | 3,814 | |||||||||||
Seino Holdings Co. Ltd. | Road & Rail | 200 | 2,892 | |||||||||||
Sekisui Chemical Co. Ltd. | Household Durables | 468 | 7,437 | |||||||||||
Sekisui House Ltd. | Household Durables | 700 | 12,321 | |||||||||||
Sekisui House Reit Inc. | Equity Real Estate Investment Trusts (REITs | ) | 2 | 1,471 | ||||||||||
Seven & i Holdings Co. Ltd. | Food & Staples Retailing | 1,008 | 31,043 | |||||||||||
Seven Bank Ltd. | Banks | 868 | 2,097 | |||||||||||
SG Holdings Co. Ltd. | Air Freight & Logistics | 268 | 13,841 | |||||||||||
Sharp Corp. | Household Durables | 200 | 2,460 | |||||||||||
Shikoku Electric Power Co. Inc. | Electric Utilities | 200 | 1,524 | |||||||||||
Shimadzu Corp. | Electronic Equipment, Instruments & Components | 334 | 10,096 | |||||||||||
Shimamura Co. Ltd. | Specialty Retail | 34 | 3,296 | |||||||||||
SHIMANO Inc. | Leisure Products | 100 | 19,634 | |||||||||||
Shimizu Corp. | Construction & Engineering | 734 | 5,488 | |||||||||||
Shin-Etsu Chemical Co. Ltd. | Chemicals | 500 | 64,839 | |||||||||||
Shinsei Bank Ltd. | Banks | 200 | 2,452 | |||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 353 | 18,829 | |||||||||||
Ship Healthcare Holdings Inc. | Health Care Providers & Services | 50 | 2,431 | |||||||||||
Shiseido Co. Ltd. | Personal Products | 502 | 28,708 | |||||||||||
SHO-BOND Holdings Co. Ltd. | Construction & Engineering | 68 | 3,364 | |||||||||||
Shochiku Co. Ltd. | Entertainment | 14 | 2,039 | |||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 434 | 4,047 | |||||||||||
Showa Denko K.K. | Chemicals | 178 | 3,242 | |||||||||||
Sky Perfect JSAT Holdings Inc. | Media | 168 | 731 | |||||||||||
Skylark Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 234 | 3,326 | |||||||||||
SMC Corp. | Machinery | 73 | 40,439 | |||||||||||
SMS Co. Ltd. | Professional Services | 100 | 2,881 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 3,500 | 39,053 | |||||||||||
SoftBank Group Corp. | Wireless Telecommunication Services | 1,888 | 115,735 | |||||||||||
Sohgo Security Services Co. Ltd. | Commercial Services & Supplies | 82 | 3,885 | |||||||||||
Sojitz Corp. | Trading Companies & Distributors | 1,568 | 3,536 | |||||||||||
Sompo Holdings Inc. | Insurance | 434 | 14,925 | |||||||||||
Sony Corp. | Household Durables | 1,568 | 119,342 | |||||||||||
Sotetsu Holdings Inc. | Road & Rail | 100 | 2,686 | |||||||||||
Square Enix Holdings Co. Ltd. | Entertainment | 100 | 6,595 | |||||||||||
Stanley Electric Co. Ltd. | Auto Components | 179 | 5,114 | |||||||||||
Subaru Corp. | Automobiles | 803 | 15,462 | |||||||||||
Sugi Pharmacy Co. Ltd. | Food & Staples Retailing | 41 | 2,891 |
246 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Sumco Corp. | Semiconductors & Semiconductor Equipment | 250 | $ | 3,494 | ||||||||||
Sumitomo Bakelite Co. Ltd. | Chemicals | 34 | 929 | |||||||||||
Sumitomo Chemical Co. Ltd. | Chemicals | 1,900 | 6,248 | |||||||||||
Sumitomo Corp. | Trading Companies & Distributors | 1,400 | 16,696 | |||||||||||
Sumitomo Dainippon Pharma Co. Ltd. | Pharmaceuticals | 200 | 2,621 | |||||||||||
Sumitomo Electric Industries Ltd. | Auto Components | 934 | 10,435 | |||||||||||
Sumitomo Forestry Co. Ltd. | Household Durables | 168 | 2,659 | |||||||||||
Sumitomo Heavy Industries Ltd. | Machinery | 134 | 3,101 | |||||||||||
Sumitomo Metal Mining Co. Ltd. | Metals & Mining | 300 | 9,225 | |||||||||||
Sumitomo Mitsui Financial Group Inc. | Banks | 1,672 | 46,224 | |||||||||||
Sumitomo Osaka Cement Co. Ltd. | Construction Materials | 41 | 1,319 | |||||||||||
Sumitomo Realty & Development Co. Ltd. | Real Estate Management & Development | 495 | 14,550 | |||||||||||
Sumitomo Rubber Industries Ltd. | Auto Components | 234 | 2,158 | |||||||||||
Sundrug Co. Ltd. | Food & Staples Retailing | 77 | 2,893 | |||||||||||
Suntory Beverage & Food Ltd. | Beverages | 183 | 6,850 | |||||||||||
Sushiro Global Holdings Ltd | Hotels, Restaurants & Leisure | 140 | 3,513 | |||||||||||
Suzuken Co. Ltd. | Health Care Providers & Services | 100 | 3,795 | |||||||||||
Suzuki Motor Corp. | Automobiles | 583 | 24,766 | |||||||||||
Sysmex Corp. | Health Care Equipment & Supplies | 238 | 22,620 | |||||||||||
T&D Holdings Inc. | Insurance | 700 | 6,845 | |||||||||||
Taiheiyo Cement Corp. | Construction Materials | 145 | 3,674 | |||||||||||
Taisei Corp. | Construction & Engineering | 268 | 9,015 | |||||||||||
Taisho Pharmaceutical Holdings Co. Ltd. | Pharmaceuticals | 54 | 3,541 | |||||||||||
Taiyo Yuden Co. Ltd. | Electronic Equipment, Instruments & Components | 168 | 5,238 | |||||||||||
Takara Bio Inc. | Biotechnology | 68 | 1,840 | |||||||||||
Takara Holdings Inc. | Beverages | 200 | 2,210 | |||||||||||
Takashimaya Co. Ltd. | Multiline Retail | 168 | 1,323 | |||||||||||
Takeda Pharmaceutical Co. Ltd. | Pharmaceuticals | 1,974 | 70,034 | |||||||||||
TBS Holdings Inc. | Media | 68 | 1,164 | |||||||||||
TDK Corp. | Electronic Equipment, Instruments & Components | 155 | 16,759 | |||||||||||
TechnoPro Holdings Inc. | Professional Services | 44 | 2,718 | |||||||||||
Teijin Ltd. | Chemicals | 234 | 3,612 | |||||||||||
Terumo Corp. | Health Care Equipment & Supplies | 864 | 34,223 | |||||||||||
The 77 Bank Ltd. | Banks | 84 | 1,289 | |||||||||||
The Bank of Kyoto Ltd. | Banks | 100 | 4,804 | |||||||||||
The Chiba Bank Ltd. | Banks | 800 | 4,389 | |||||||||||
The Chugoku Bank Ltd. | Banks | 200 | 1,908 | |||||||||||
The Chugoku Electric Power Co. Inc. | Electric Utilities | 368 | 4,600 | |||||||||||
The Dai-ichi Life Holdings Inc. | Insurance | 1,368 | 19,147 | |||||||||||
a | The Hiroshima Bank Ltd. | Banks | 368 | 2,134 | ||||||||||
The Iyo Bank Ltd. | Banks | 334 | 2,203 | |||||||||||
The Shiga Bank Ltd. | Banks | 68 | 1,586 | |||||||||||
The Shizuoka Bank Ltd. | Banks | 634 | 4,362 | |||||||||||
THK Co. Ltd. | Machinery | 145 | 3,612 | |||||||||||
TIS Inc. | IT Services | 300 | 6,334 | |||||||||||
Tobu Railway Co. Ltd. | Road & Rail | 268 | 8,241 | |||||||||||
Toda Corp. | Construction & Engineering | 300 | 2,047 | |||||||||||
Toho Co. Ltd. | Entertainment | 140 | 5,751 | |||||||||||
Toho Gas Co. Ltd. | Gas Utilities | 109 | 5,392 | |||||||||||
Tohoku Electric Power Co. Inc. | Electric Utilities | 700 | 7,005 | |||||||||||
Tokai Carbon Co. Ltd. | Chemicals | 234 | 2,488 | |||||||||||
Tokai Rika Co. Ltd. | Auto Components | 68 | 1,008 | |||||||||||
Tokio Marine Holdings Inc. | Insurance | 832 | 36,266 | |||||||||||
Tokuyama Corp. | Chemicals | 100 | 2,392 | |||||||||||
Tokyo Century Corp. | Diversified Financial Services | 68 | 3,679 | |||||||||||
a | Tokyo Electric Power Co. Holdings Inc. | Electric Utilities | 2,000 | 5,477 | ||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 191 | 49,465 |
franklintempleton.com | Semiannual Report | 247 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Tokyo Gas Co. Ltd. | Gas Utilities | 544 | $ | 12,403 | ||||||||||
Tokyo Ohka Kogyo Co. Ltd. | Chemicals | 48 | 2,470 | |||||||||||
Tokyo Tatemono Co. Ltd. | Real Estate Management & Development | 268 | 3,258 | |||||||||||
TOKYU Corp. | Road & Rail | 616 | 7,956 | |||||||||||
Tokyu Fudosan Holdings Corp. | Real Estate Management & Development | 768 | 3,282 | |||||||||||
Toppan Printing Co. Ltd. | Commercial Services & Supplies | 384 | 5,378 | |||||||||||
Toray Industries Inc. | Chemicals | 1,900 | 8,629 | |||||||||||
Toshiba Corp. | Industrial Conglomerates | 591 | 14,958 | |||||||||||
Toshiba Tec Corp. | Technology Hardware, Storage & Peripherals | 50 | 2,082 | |||||||||||
Tosoh Corp. | Chemicals | 368 | 5,946 | |||||||||||
TOTO Ltd. | Building Products | 179 | 8,184 | |||||||||||
Toyo Seikan Group Holdings Ltd. | Containers & Packaging | 200 | 1,975 | |||||||||||
Toyo Suisan Kaisha Ltd. | Food Products | 111 | 5,848 | |||||||||||
Toyo Tire Corp. | Auto Components | 134 | 2,148 | |||||||||||
Toyobo Co. Ltd. | Chemicals | 100 | 1,371 | |||||||||||
Toyoda Gosei Co. Ltd. | Auto Components | 100 | 2,279 | |||||||||||
Toyota Boshoku Corp. | Auto Components | 68 | 957 | |||||||||||
Toyota Industries Corp. | Auto Components | 200 | 12,584 | |||||||||||
Toyota Motor Corp. | Automobiles | 3,150 | 206,916 | |||||||||||
Toyota Tsusho Corp. | Trading Companies & Distributors | 300 | 8,364 | |||||||||||
Trend Micro Inc. | Software | 142 | 8,625 | |||||||||||
TS TECH Co. Ltd. | Auto Components | 100 | 2,808 | |||||||||||
Tsumura & Co. | Pharmaceuticals | 100 | 3,103 | |||||||||||
Tsuruha Holdings Inc. | Food & Staples Retailing | 46 | 6,499 | |||||||||||
TV Asahi Holdings Corp. | Media | 34 | 537 | |||||||||||
Ube Industries Ltd. | Chemicals | 134 | 2,249 | |||||||||||
Ulvac Inc. | Semiconductors & Semiconductor Equipment | 68 | 2,452 | |||||||||||
Unicharm Corp. | Household Products | 500 | 22,325 | |||||||||||
United Urban Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 2 | 2,212 | ||||||||||
Ushio Inc. | Electrical Equipment | 134 | 1,696 | |||||||||||
USS Co. Ltd. | Specialty Retail | 268 | 4,772 | |||||||||||
Wacoal Corp. | Textiles, Apparel & Luxury Goods | 68 | 1,280 | |||||||||||
Welcia Holdings Co. Ltd. | Food & Staples Retailing | 136 | 5,960 | |||||||||||
West Japan Railway Co. | Road & Rail | 230 | 11,314 | |||||||||||
Yakult Honsha Co. Ltd. | Food Products | 153 | 8,481 | |||||||||||
Yamada Holdings Co. Ltd. | Specialty Retail | 900 | 4,469 | |||||||||||
Yamaguchi Financial Group Inc. | Banks | 268 | 1,735 | |||||||||||
Yamaha Corp. | Leisure Equipment & Products | 200 | 9,514 | |||||||||||
Yamaha Motor Co. Ltd. | Automobiles | 349 | 5,033 | |||||||||||
Yamato Holdings Co. Ltd. | Air Freight & Logistics | 446 | 11,669 | |||||||||||
Yamato Kogyo Co. Ltd. | Metals & Mining | 34 | 826 | |||||||||||
Yamazaki Baking Co. Ltd. | Food Products | 168 | 2,928 | |||||||||||
Yaoko Co. Ltd. | Food & Staples Retailing | 34 | 2,516 | |||||||||||
YASKAWA Electric Corp. | Machinery | 300 | 11,641 | |||||||||||
Yokogawa Electric Corp. | Electronic Equipment, Instruments & Components | 300 | 4,733 | |||||||||||
Yokohama Rubber Co. Ltd. | Auto Components | 134 | 1,893 | |||||||||||
Z Holdings Corp. | Interactive Media & Services | 3,334 | 22,083 | |||||||||||
Zenkoku Hosho Co. Ltd. | Diversified Financial Services | 68 | 2,664 | |||||||||||
Zensho Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 113 | 2,657 | |||||||||||
Zeon Corp. | Chemicals | 168 | 1,753 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 134 | 3,718 | |||||||||||
Total Common Stocks | 4,933,302 | |||||||||||||
|
|
248 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
Industry | Shares | Value | ||||||||||||
Short Term Investments (Cost $49,950) 1.0% | ||||||||||||||
United States 1.0% | ||||||||||||||
b,c | Institutional Fiduciary Trust – Money Market Portfolio, 0.00% | Money Market Funds | 49,950 | $ | 49,950 | |||||||||
|
| |||||||||||||
Total Investments | 4,983,252 | |||||||||||||
Other Assets, less Liabilities 0.4% | 19,539 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 5,002,791 | ||||||||||||
|
|
See Abbreviations on page 331.
aNon-income producing.
bSee Note 3(c) regarding investments in affiliated management investment companies.
cThe rate shown is the annualized seven-day effective yield at period end.
At September 30, 2020 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
Forward Exchange Contracts | ||||||||||||||||||||||||||||
Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Japanese Yen | DBAB | Buy | 155,492,000 | $ | 1,473,468 | 10/02/20 | $ | — | $ | (29 | ) | |||||||||||||||||
Japanese Yen | HSBK | Buy | 155,492,000 | 1,473,461 | 10/02/20 | — | (22 | ) | ||||||||||||||||||||
Japanese Yen | MSCO | Buy | 155,492,000 | 1,473,439 | 10/02/20 | — | — | |||||||||||||||||||||
Japanese Yen | UBSW | Buy | 63,610,000 | 602,767 | 10/02/20 | — | — | |||||||||||||||||||||
Japanese Yen | DBAB | Sell | 155,492,000 | 1,466,828 | 10/02/20 | — | (6,611 | ) | ||||||||||||||||||||
Japanese Yen | HSBC | Sell | 155,492,000 | 1,466,838 | 10/02/20 | — | (6,601 | ) | ||||||||||||||||||||
Japanese Yen | MSCO | Sell | 155,492,000 | 1,466,878 | 10/02/20 | — | (6,561 | ) | ||||||||||||||||||||
Japanese Yen | UBSW | Sell | 63,610,000 | 600,082 | 10/02/20 | — | (2,685 | ) | ||||||||||||||||||||
Japanese Yen | DBAB | Sell | 155,172,000 | 1,470,954 | 11/04/20 | 19 | — | |||||||||||||||||||||
Japanese Yen | HSBK | Sell | 155,172,000 | 1,470,903 | 11/04/20 | — | (33 | ) | ||||||||||||||||||||
Japanese Yen | MSCO | Sell | 155,172,000 | 1,470,932 | 11/04/20 | — | (3 | ) | ||||||||||||||||||||
Japanese Yen | UBSW | Sell | 63,479,000 | 601,738 | 11/04/20 | — | (4 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 19 | $ | (22,549 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | (22,530 | ) | ||||||||||||||||||||||||
|
|
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
Nikkei 225 Mini | Long | 4 | $ | 87,899 | 12/10/20 | $ | 291 |
*As of period end.
See Note 8 regarding other derivative information.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 249 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Latin America ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||
2020 | 2019 | |||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $ | 15.20 | $ | 26.41 | $ | 26.17 | ||||||
|
| |||||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.21 | 0.77 | 0.38 | |||||||||
Net realized and unrealized gains (losses) | 2.50 | (11.08 | ) | (0.02 | ) | |||||||
|
| |||||||||||
Total from investment operations | 2.71 | (10.31 | ) | 0.36 | ||||||||
|
| |||||||||||
Less distributions from net investment income | (0.16 | ) | (0.90 | ) | (0.12 | ) | ||||||
|
| |||||||||||
Net asset value, end of period | $ | 17.75 | $ | 15.20 | $ | 26.41 | ||||||
|
| |||||||||||
Total returnd | 17.76% | (40.49)% | 1.42% | |||||||||
Ratios to average net assetse | ||||||||||||
Total expenses | 0.19% | 0.21% | 0.19% | |||||||||
Net investment income | 2.32% | 2.97% | 3.08% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $1,775 | $1,520 | $2,641 | |||||||||
Portfolio turnover ratef | 5.70% | g | 12.74% | g | 4.08% |
aFor the period October 9, 2018 (commencement of operations) to March 31, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 5.70% | 12.74% | —% |
250 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Latin America ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 81.4% | ||||||||||||||
Brazil 48.2% | ||||||||||||||
a | Aliansce Sonae Shopping Centers S A | Real Estate Management & Development | 500 | $ | 2,104 | |||||||||
Ambev SA | Beverages | 16,400 | 36,487 | |||||||||||
Atacadao Distribuicao Comercio e Industria Ltd. | Food & Staples Retailing | 1,500 | 5,453 | |||||||||||
a | Azul SA | Airlines | 1,000 | 4,325 | ||||||||||
a | B2W Cia Digital | Internet & Direct Marketing Retail | 783 | 12,500 | ||||||||||
B3 SA – Brasil Bolsa Balcao | Capital Markets | 7,700 | 75,150 | |||||||||||
Banco Bradesco SA | Banks | 4,690 | 14,994 | |||||||||||
Banco BTG Pactual SA | Capital Markets | 900 | 11,632 | |||||||||||
Banco do Brasil SA | Banks | 3,200 | 16,816 | |||||||||||
Banco Inter SA | Banks | 400 | 1,203 | |||||||||||
Banco Inter SA | Banks | 900 | 2,981 | |||||||||||
Banco Santander Brasil SA | Banks | 1,400 | 6,945 | |||||||||||
BB Seguridade Participacoes SA | Insurance | 2,600 | 11,195 | |||||||||||
a | BR Malls Paricipacoes SA | Real Estate Management & Development | 2,900 | 4,312 | ||||||||||
a | BRF SA | Food Products | 2,400 | 7,826 | ||||||||||
CCR SA | Transportation Infrastructure | 4,200 | 9,441 | |||||||||||
Centrais Eletricas Brasileiras SA | Electric Utilities | 1,500 | 8,069 | |||||||||||
Cia Brasileira de Distribuicao | Food & Staples Retailing | 600 | 7,424 | |||||||||||
Cia de Saneamento do Parana | Water Utilities | 950 | 4,288 | |||||||||||
Cia Siderurgica Nacional SA | Metals & Mining | 2,400 | 7,026 | |||||||||||
Cielo SA | IT Services | 4,200 | 2,928 | |||||||||||
Cogna Educacao | Diversified Consumer Services | 7,000 | 6,433 | |||||||||||
Companhia de Locacao das Americas | Road & Rail | 1,300 | 5,478 | |||||||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | Water Utilities | 1,300 | 10,794 | |||||||||||
Companhia Energetica de Minas Gerais | Electric Utilities | 728 | 1,382 | |||||||||||
Companhia Paranaense de Energia-Copel | Electric Utilities | 100 | 1,026 | |||||||||||
a | Cosan Logistica SA | Road & Rail | 500 | 1,570 | ||||||||||
Cosan SA | Oil, Gas & Consumable Fuels | 600 | 7,274 | |||||||||||
CPFL Energia SA | Electric Utilities | 700 | 3,423 | |||||||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | Household Durables | 1,100 | 4,536 | |||||||||||
Duratex SA | Paper & Forest Products | 1,100 | 3,499 | |||||||||||
EDP-Energias do Brasil SA | Electric Utilities | 1,100 | 3,398 | |||||||||||
a | Embraer SA | Aerospace & Defense | 2,800 | 3,100 | ||||||||||
Energisa SA | Electric Utilities | 600 | 4,377 | |||||||||||
a | Eneva SA | | Independent Power and Renewable Electricity Producers | | 600 | 5,120 | ||||||||
Engie Brasil Energia SA | | Independent Power and Renewable Electricity Producers | | 600 | 4,295 | |||||||||
Equatorial Energia SA | Electric Utilities | 3,400 | 12,776 | |||||||||||
EZ Tec Empreendimentos e Participacoes SA | Household Durables | 400 | 2,501 | |||||||||||
Fleury SA | Health Care Providers & Services | 900 | 4,228 | |||||||||||
Grendene SA | Textiles, Apparel & Luxury Goods | 1,000 | 1,361 | |||||||||||
Guararapes Confeccoes SA | Textiles, Apparel & Luxury Goods | 400 | 989 | |||||||||||
b,c | Hapvida Participacoes e Investimentos SA, 144A, Reg S | Health Care Providers & Services | 800 | 8,820 | ||||||||||
Hypera SA | Pharmaceuticals | 1,500 | 7,936 | |||||||||||
IRB Brasil Resseguros SA | Insurance | 4,337 | 5,763 | |||||||||||
Itau Unibanco Holding SA | Banks | 1,700 | 6,448 | |||||||||||
Klabin SA | Containers & Packaging | 1,200 | 5,067 | |||||||||||
Localiza Rent a Car SA | Road & Rail | 2,105 | 21,164 | |||||||||||
Lojas Americanas SA | Multiline Retail | 1,108 | 4,797 | |||||||||||
Lojas Renner SA | Multiline Retail | 2,980 | 20,963 | |||||||||||
M Dias Branco SA | Food Products | 300 | 1,818 | |||||||||||
Magazine Luiza SA | Multiline Retail | 2,478 | 39,216 | |||||||||||
Multiplan Empreendimentos Imobiliarios SA | Real Estate Management & Development | 1,000 | 3,447 | |||||||||||
Natura & Co Holding SA | Personal Products | 2,831 | 25,681 | |||||||||||
Neoenergia SA | Electric Utilities | 900 | 2,711 | |||||||||||
Notre Dame Intermedica Participacoes SA | Health Care Providers & Services | 1,700 | 19,623 | |||||||||||
Odontoprev SA | Health Care Providers & Services | 1,000 | 2,129 | |||||||||||
Petrobras Distribuidora SA | Specialty Retail | 2,700 | 9,652 |
franklintempleton.com | Semiannual Report | 251 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Latin America ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Brazil (continued) | ||||||||||||||
Petroleo Brasileiro SA | Oil, Gas & Consumable Fuels | 13,900 | $ | 48,755 | ||||||||||
Porto Seguro SA | Insurance | 300 | 2,568 | |||||||||||
Qualicorp Consultoria E Corretora de Seguros SA | Health Care Providers & Services | 900 | 5,427 | |||||||||||
Raia Drogasil SA | Food & Staples Retailing | 4,300 | 17,867 | |||||||||||
a | Rumo SA | Road & Rail | 4,700 | 15,893 | ||||||||||
Sao Martinho SA | Food Products | 600 | 2,319 | |||||||||||
Sul America SA | Insurance | 1,100 | 7,734 | |||||||||||
a | Suzano SA | Paper & Forest Products | 2,119 | 17,124 | ||||||||||
Telefonica Brasil SA | Diversified Telecommunication Services | 100 | 783 | |||||||||||
TIM Participacoes SA | Wireless Telecommunication Services | 3,000 | 6,951 | |||||||||||
Totvs SA | Software | 1,800 | 8,654 | |||||||||||
Transmissora Alianca de Energia Eletrica SA | Electric Utilities | 800 | 3,968 | |||||||||||
Ultrapar Participacoes SA | Oil, Gas & Consumable Fuels | 2,964 | 10,133 | |||||||||||
Vale SA | Metals & Mining | 12,400 | 130,040 | |||||||||||
a | Via Varejo SA | Specialty Retail | 4,400 | 13,544 | ||||||||||
WEG SA | Electrical Equipment | 2,800 | 32,638 | |||||||||||
YDUQS Participacoes SA | Diversified Consumer Services | 1,100 | 5,349 | |||||||||||
|
| |||||||||||||
855,641 | ||||||||||||||
|
| |||||||||||||
Chile 6.4% | ||||||||||||||
AES Gener SA | | Independent Power and Renewable Electricity Producers | | 10,618 | 1,631 | |||||||||
Aguas Andinas SA, A | Water Utilities | 10,336 | 2,886 | |||||||||||
Banco de Chile | Banks | 163,906 | 12,473 | |||||||||||
Banco de Credito e Inversiones SA | Banks | 179 | 5,635 | |||||||||||
Banco Santander Chile | Banks | 232,671 | 8,063 | |||||||||||
Cencosud SA | Food & Staples Retailing | 5,029 | 7,341 | |||||||||||
Cencosud Shopping SA | Real Estate Management & Development | 1,819 | 2,597 | |||||||||||
Cia Cervecerias Unidas SA | Beverages | 558 | 3,591 | |||||||||||
Colbun SA | | Independent Power and Renewable Electricity Producers | | 27,380 | 4,410 | |||||||||
E CL SA | Electric Utilities | 1,869 | 2,318 | |||||||||||
Empresa Nacional de Telecomunicaciones SA | Wireless Telecommunication Services | 510 | 3,164 | |||||||||||
Empresas CMPC SA | Paper & Forest Products | 4,504 | 9,433 | |||||||||||
Empresas COPEC SA | Oil, Gas & Consumable Fuels | 1,830 | 13,677 | |||||||||||
Enel Americas SA | Electric Utilities | 110,084 | 14,253 | |||||||||||
Enel Chile SA | Electric Utilities | 99,062 | 6,928 | |||||||||||
Falabella SA | Multiline Retail | 2,981 | 8,703 | |||||||||||
Itau CorpBanca Chile SA | Banks | 648,427 | 1,716 | |||||||||||
Parque Arauco SA | Real Estate Management & Development | 2,250 | 3,139 | |||||||||||
Plaza SA | Real Estate Management & Development | 1,114 | 1,555 | |||||||||||
|
| |||||||||||||
113,513 | ||||||||||||||
|
| |||||||||||||
Colombia 2.5% | ||||||||||||||
Bancolombia SA | Banks | 1,032 | 6,501 | |||||||||||
Cementos Argos SA | Construction Materials | 1,808 | 2,172 | |||||||||||
a | Corporacion Financiera Colombiana SA | Diversified Financial Services | 464 | 3,202 | ||||||||||
Ecopetrol SA | Oil, Gas & Consumable Fuels | 17,806 | 8,754 | |||||||||||
Empresa De Energia De Bogota Sa | Gas Utilities | 10,065 | 6,398 | |||||||||||
Grupo Argos SA | Construction Materials | 1,120 | 3,371 | |||||||||||
Grupo de Inversiones Suramericana SA | Diversified Financial Services | 941 | 5,034 | |||||||||||
Interconexion Electrica SA ESP | Electric Utilities | 1,657 | 8,761 | |||||||||||
|
| |||||||||||||
44,193 | ||||||||||||||
|
| |||||||||||||
Mexico 23.6% | ||||||||||||||
Alfa SAB de CV | Industrial Conglomerates | 11,165 | 6,934 | |||||||||||
Alpek SAB de CV | Chemicals | 1,454 | 1,014 | |||||||||||
America Movil SAB de CV, L | Wireless Telecommunication Services | 113,197 | 71,172 | |||||||||||
Arca Continental SAB de CV | Beverages | 1,660 | 7,201 |
252 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Latin America ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Mexico (continued) | ||||||||||||||
Banco Santander (Mexico), S.A., Institucion de Banca Multiple, Grupo Financiero Santander, B | Banks | 2,163 | $ | 1,379 | ||||||||||
Becle SAB de CV | Beverages | 2,059 | 4,209 | |||||||||||
Cemex SAB de CV | Construction Materials | 56,943 | 21,616 | |||||||||||
Coca-Cola FEMSA SA de CV | Beverages | 1,976 | 8,073 | |||||||||||
Concentradora Fibra Danhos SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 883 | 810 | ||||||||||
El Puerto de Liverpool SAB de CV | Multiline Retail | 743 | 2,116 | |||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 11,059 | 8,762 | ||||||||||
Fomento Economico Mexicano SAB de CV | Beverages | 6,853 | 38,680 | |||||||||||
b | GMexico Transportes SAB de CV, 144A | Road & Rail | 4,632 | 5,957 | ||||||||||
Gruma SAB de CV | Food Products | 803 | 8,914 | |||||||||||
a | Grupo Aeroportuario del Centro Norte SAB de CV | Transportation Infrastructure | 1,258 | 5,787 | ||||||||||
Grupo Aeroportuario del Pacifico SAB de CV | Transportation Infrastructure | 1,423 | 11,441 | |||||||||||
a | Grupo Aeroportuario del Sureste SAB de CV, B | Transportation Infrastructure | 615 | 7,154 | ||||||||||
Grupo Bimbo SAB de CV, A | Food Products | 8,517 | 15,961 | |||||||||||
Grupo Carso SAB de CV | Industrial Conglomerates | 1,701 | 3,500 | |||||||||||
Grupo Elektra SAB de CV | Banks | 239 | 12,980 | |||||||||||
a | Grupo Financiero Banorte SAB de CV | Banks | 10,847 | 37,647 | ||||||||||
a | Grupo Financiero Inbursa SAB de CV | Banks | 8,051 | 6,284 | ||||||||||
Grupo Lala SAB de CV | Food Products | 2,214 | 1,351 | |||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 11,871 | 30,248 | |||||||||||
a | Grupo Televisa SA | Media | 8,078 | 9,997 | ||||||||||
Industrias Bachoco SAB de CV, B | Food Products | 602 | 1,910 | |||||||||||
Industrias Penoles SA | Metals & Mining | 467 | 7,558 | |||||||||||
Infraestructura Energetica Nova SAB de CV | Gas Utilities | 1,927 | 5,816 | |||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 3,140 | 4,992 | |||||||||||
Megacable Holdings SAB de CV | Media | 1,131 | 3,260 | |||||||||||
Orbia Advance Corp. SAB de CV | Chemicals | 3,812 | 6,690 | |||||||||||
a | Promotora y Operadora de Infraestructura SAB de CV | Transportation Infrastructure | 822 | 5,822 | ||||||||||
Qualitas Controladora SAB de CV | Insurance | 660 | 2,493 | |||||||||||
a | Telesites SAB de CV | Diversified Telecommunication Services | 4,676 | 4,215 | ||||||||||
Wal-Mart de Mexico SAB de CV, V | Food & Staples Retailing | 19,371 | 46,550 | |||||||||||
|
| |||||||||||||
418,493 | ||||||||||||||
|
| |||||||||||||
United States 0.7% | ||||||||||||||
JBS SA | Food Products | 3,700 | 13,569 | |||||||||||
|
| |||||||||||||
Total Common Stocks | 1,445,409 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 18.5% |
| |||||||||||||
Brazil 16.7% |
| |||||||||||||
d | Alpargatas SA, 0.144%, pfd. | Textiles, Apparel & Luxury Goods | 650 | 4,405 | ||||||||||
d | Banco Bradesco SA, 8.892%, pfd. | Banks | 16,042 | 55,243 | ||||||||||
d | Banco do Estado do Rio Grande do Sul SA, | Banks | 800 | 1,693 | ||||||||||
d | Bradespar SA, 1.780%, pfd. | Metals & Mining | 800 | 6,371 | ||||||||||
d | Braskem SA, 4.036%, pfd., A | Chemicals | 700 | 2,582 | ||||||||||
d | Centrais Eletricas Brasileiras SA, 5.733%, pfd., B | Electric Utilities | 1,000 | 5,534 | ||||||||||
d | Cia de Transmissao de Energia Eletrica Paulista, 6.095%, pfd. | Electric Utilities | 700 | 2,706 | ||||||||||
d | Cia Energetica de Sao Paulo, 6.549%, pfd., B | | Independent Power and Renewable Electricity Producers | | 700 | 3,509 | ||||||||
d | Companhia Energetica de Minas Gerais, 5.762%, pfd. | Electric Utilities | 3,735 | 6,693 | ||||||||||
d | Companhia Paranaense de Energia, 3.978%, pfd., B | Electric Utilities | 400 | 4,401 | ||||||||||
d | Gerdau SA, 0.673%, pfd. | Metals & Mining | 4,000 | 14,761 | ||||||||||
d | Itau Unibanco Holding SA, 5.676%, pfd. | Banks | 18,100 | 72,253 | ||||||||||
d | Itausa SA, 3.443%, pfd. | Banks | 16,900 | 26,385 | ||||||||||
d | Lojas Americanas SA, 0.641%, pfd. | Multiline Retail | 2,928 | 14,748 |
franklintempleton.com | Semiannual Report | 253 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Latin America ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Brazil (continued) | ||||||||||||||
d | Petroleo Brasileiro SA, 3.182%, pfd. | Oil, Gas & Consumable Fuels | 17,200 | $ | 59,841 | |||||||||
d | Telefonica Brasil SA, 7.759%, pfd. | Diversified Telecommunication Services | 1,600 | 12,326 | ||||||||||
d | Usinas Siderurgicas de Minas Gerais SA Usiminas, 0.429%, pfd., A | Metals & Mining | 1,500 | 2,669 | ||||||||||
|
| |||||||||||||
296,120 | ||||||||||||||
|
| |||||||||||||
Chile 0.9% | ||||||||||||||
d | Embotelladora Andina SA, 6.093%, pfd., B | Beverages | 706 | 1,555 | ||||||||||
d | Sociedad Quimica y Minera de Chile SA, | Chemicals | 449 | 14,533 | ||||||||||
|
| |||||||||||||
16,088 | ||||||||||||||
|
| |||||||||||||
Colombia 0.9% | ||||||||||||||
d | Bancolombia SA, 6.555%, pfd. | Banks | 1,685 | 10,798 | ||||||||||
d | Grupo Aval Acciones y Valores SA, 6.682%, pfd. | Banks | 15,299 | 3,564 | ||||||||||
d | Grupo de Inversiones Suramericana SA, 3.382%, pfd. | Diversified Financial Services | 291 | 1,397 | ||||||||||
|
| |||||||||||||
15,759 | ||||||||||||||
|
| |||||||||||||
Total Preferred Stocks | 327,967 | |||||||||||||
|
| |||||||||||||
Total Investments | 1,773,376 | |||||||||||||
Other Assets, less Liabilities 0.1% | 1,416 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $1,774,792 | |||||||||||||
|
|
See Abbreviations on page 331.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $14,777, representing 0.8% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $8,820, representing 0.5% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
254 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Mexico ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 14.35 | $ | 22.11 | $ | 24.98 | $ | 24.90 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.13 | 0.64 | 0.51 | 0.12 | ||||||||||||
Net realized and unrealized gains (losses) | 2.20 | (7.73 | ) | (2.86 | ) | 0.04 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 2.33 | (7.09 | ) | (2.35 | ) | 0.16 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.13 | ) | (0.67 | ) | (0.52 | ) | (0.08 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 16.55 | $ | 14.35 | $ | 22.11 | $ | 24.98 | ||||||||
|
| |||||||||||||||
Total returnd | 16.27% | (33.13)% | (9.28)% | 0.63% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total Expenses | 0.19% | 0.19% | 0.19% | 0.19% | ||||||||||||
Net investment income | 1.69% | 2.93% | 2.21% | 1.18% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $4,137 | $2,871 | $4,422 | $2,498 | ||||||||||||
Portfolio turnover ratef | 11.49% | g | 19.32% | g | 10.31% | 9.64% |
aFor the period November 3, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 11.49% | 19.32% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 255 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Mexico ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.9% | ||||||||||||||
Mexico 99.9% | ||||||||||||||
Alfa SAB de CV | Industrial Conglomerates | 131,755 | $ 81,826 | |||||||||||
Alpek SAB de CV | Chemicals | 16,550 | 11,545 | |||||||||||
America Movil SAB de CV, L | Wireless Telecommunication Services | 964,200 | 606,235 | |||||||||||
Arca Continental SAB de CV | Beverages | 19,545 | 84,791 | |||||||||||
Banco Santander (Mexico), S.A., Institucion de Banca Multiple, Grupo Financiero Santander, B | Banks | 25,090 | 15,991 | |||||||||||
Becle SAB de CV | Beverages | 24,255 | 49,585 | |||||||||||
Cemex SAB de CV | Construction Materials | 495,705 | 188,171 | |||||||||||
Coca-Cola FEMSA SA de CV | Beverages | 23,275 | 95,089 | |||||||||||
Concentradora Fibra Danhos SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 10,140 | 9,306 | ||||||||||
El Puerto de Liverpool SAB de CV | Multiline Retail | 8,735 | 24,873 | |||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 130,490 | 103,384 | ||||||||||
Fomento Economico Mexicano SAB de CV | Beverages | 61,230 | 345,594 | |||||||||||
a | GMexico Transportes SAB de CV, 144A | Road & Rail | 54,615 | 70,236 | ||||||||||
Gruma SAB de CV | Food Products | 9,465 | 105,065 | |||||||||||
b | Grupo Aeroportuario del Centro Norte SAB de CV | Transportation Infrastructure | 14,860 | 68,357 | ||||||||||
Grupo Aeroportuario del Pacifico SAB de CV | Transportation Infrastructure | 16,420 | 132,018 | |||||||||||
b | Grupo Aeroportuario del Sureste SAB de CV, B | Transportation Infrastructure | 7,250 | 84,334 | ||||||||||
Grupo Bimbo SAB de CV, A | Food Products | 82,285 | 154,202 | |||||||||||
Grupo Carso SAB de CV | Industrial Conglomerates | 20,165 | 41,498 | |||||||||||
Grupo Elektra SAB de CV | Banks | 2,470 | 134,142 | |||||||||||
b | Grupo Financiero Banorte SAB de CV | Banks | 96,940 | 336,457 | ||||||||||
b | Grupo Financiero Inbursa SAB de CV | Banks | 94,480 | 73,741 | ||||||||||
Grupo Lala SAB de CV | Food Products | 25,965 | 15,843 | |||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 107,800 | 274,679 | |||||||||||
b | Grupo Televisa SA | Media | 92,815 | 114,864 | ||||||||||
Industrias Bachoco SAB de CV, B | Food Products | 7,100 | 22,523 | |||||||||||
Industrias Penoles SA | Metals & Mining | 5,495 | 88,935 | |||||||||||
Infraestructura Energetica Nova SAB de CV | Gas Utilities | 22,655 | 68,378 | |||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 36,870 | 58,623 | |||||||||||
Megacable Holdings SAB de CV | Media | 13,260 | 38,220 | |||||||||||
Orbia Advance Corp. SAB de CV | Chemicals | 44,905 | 78,802 | |||||||||||
b | Promotora y Operadora de Infraestructura SAB de CV | Transportation Infrastructure | 9,685 | 68,602 | ||||||||||
Qualitas Controladora SAB de CV | Insurance | 7,800 | 29,464 | |||||||||||
b | Telesites SAB de CV | Diversified Telecommunication Services | 55,420 | 49,958 | ||||||||||
Wal-Mart de Mexico SAB de CV, V | Food & Staples Retailing | 170,135 | 408,850 | |||||||||||
|
| |||||||||||||
Total Investments (Cost $5,083,152) 99.9% | 4,134,181 | |||||||||||||
Other Assets, less Liabilities 0.1% | 3,038 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $4,137,219 | |||||||||||||
|
|
See Abbreviations on page 331.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $70,236, representing 1.7% of net assets.
bNon-income producing.
256 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Russia ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 18.91 | $ | 23.37 | $ | 24.24 | $ | 23.90 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: |
| |||||||||||||||
Net investment income (loss)c | 0.86 | 1.73 | 1.03 | (0.00 | )d | |||||||||||
Net realized and unrealized gains (losses) | 1.95 | (4.44 | ) | (1.26 | ) | 0.34 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 2.81 | (2.71 | ) | (0.23 | ) | 0.34 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | — | (1.75 | ) | (0.64 | ) | — | ||||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 21.72 | $ | 18.91 | $ | 23.37 | $ | 24.24 | ||||||||
|
| |||||||||||||||
Total returne | 14.86% | (13.90)% | (0.63)% | 1.42% | ||||||||||||
Ratios to average net assetsf |
| |||||||||||||||
Expenses before waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | 0.19% | ||||||||||||
Expenses net waiver and payments by affiliates | 0.19% | 0.19% | —% | —% | ||||||||||||
Net investment income (loss) | 7.62% | 6.49% | 4.57% | (0.13)% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $6,515 | $13,240 | $11,683 | $2,424 | ||||||||||||
Portfolio turnover rateg | 7.05% | h | 15.74% | h | 31.57% | 7.58% |
aFor the period February 6, 2018 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 7.05% | 15.74% | —% | —% |
libertyshares.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 257 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Russia ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 94.6% | ||||||||||||||
Russia 94.6% | ||||||||||||||
a | Aeroflot – Russian Airlines PJSC | Airlines | 40,098 | $ | 38,185 | |||||||||
Alrosa PJSC | Metals & Mining | 171,054 | 162,609 | |||||||||||
Federal Grid Co. Unified Energy System PJSC | Electric Utilities | 19,936,134 | 50,713 | |||||||||||
Federal Hydrogenerating Co. | Electric Utilities | 8,773,200 | 85,944 | |||||||||||
Gazprom PJSC | Oil, Gas & Consumable Fuels | 360,918 | 795,077 | |||||||||||
Inter RAO UES PJSC | Electric Utilities | 2,306,952 | 166,776 | |||||||||||
LUKOIL PJSC | Oil, Gas & Consumable Fuels | 13,182 | 761,350 | |||||||||||
Magnit PJSC | Food & Staples Retailing | 3,102 | 198,669 | |||||||||||
Magnitogorsk Iron & Steel Works | Metals & Mining | 135,360 | 67,339 | |||||||||||
MMC Norilsk Nickel PJSC | Metals & Mining | 1,182 | 286,478 | |||||||||||
Mobile TeleSystems PJSC | Wireless Telecommunication Services | 42,714 | 186,898 | |||||||||||
Moscow Exchange MICEX | Capital Markets | 93,714 | 176,762 | |||||||||||
Mosenergo PAO | Electric Utilities | 612,744 | 16,155 | |||||||||||
NLMK PJSC | Metals & Mining | 76,764 | 169,848 | |||||||||||
Novatek PJSC | Oil, Gas & Consumable Fuels | 38,028 | 521,112 | |||||||||||
PhosAgro PJSC | Chemicals | 2,694 | 99,426 | |||||||||||
Polyus Gold OJSC | Metals & Mining | 954 | 199,771 | |||||||||||
Rosneft PJSC | Oil, Gas & Consumable Fuels | 42,594 | 210,442 | |||||||||||
Rosseti PJSC | Electric Utilities | 2,257,842 | 42,901 | |||||||||||
Rostelecom PJSC | Diversified Telecommunication Services | 73,530 | 93,304 | |||||||||||
a | Sberbank of Russia PJSC | Banks | 347,988 | 1,022,422 | ||||||||||
Severstal PAO | Metals & Mining | 13,164 | 168,144 | |||||||||||
Sistema PJSFC | Wireless Telecommunication Services | 219,540 | 59,694 | |||||||||||
Surgutneftegas PJSC | Oil, Gas & Consumable Fuels | 227,142 | 101,363 | |||||||||||
Tatneft PAO | Oil, Gas & Consumable Fuels | 36,228 | 215,684 | |||||||||||
Unipro PJSC | | Independent Power and Renewable Electricity Producers | | 790,290 | 28,281 | |||||||||
a | United Co. RUSAL International PJSC | Metals & Mining | 194,682 | 78,862 | ||||||||||
a | VTB Bank PJSC | Banks | 358,996,218 | 159,441 | ||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $7,157,236) | 6,163,650 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 5.4% | ||||||||||||||
Russia 5.4% | ||||||||||||||
b | Bashneft PJSC, 8.733%, pfd. | Oil, Gas & Consumable Fuels | 1,470 | 23,385 | ||||||||||
b | Surgutneftegas PJSC, 2.469%, pfd. | Oil, Gas & Consumable Fuels | 245,808 | 124,454 | ||||||||||
b | Tatneft PJSC, pfd., 3, 11.441%, pfd. | Oil, Gas & Consumable Fuels | 3,576 | 20,428 | ||||||||||
a | Transneft PJSC | Oil, Gas & Consumable Fuels | 95 | 180,816 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $452,393) | 349,083 | |||||||||||||
|
| |||||||||||||
Total Investments | 6,512,733 | |||||||||||||
Other Assets, less Liabilities 0.0%† | 1,862 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 6,514,595 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bVariable rate security. The rate shown represents the yield at period end.
258 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Saudi Arabia ETF
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||
2020 | 2019a | |||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||
Net asset value, beginning of period | $ | 20.15 | $ | 27.89 | $ | 24.71 | ||||||
|
| |||||||||||
Income from investment operationsb: |
| |||||||||||
Net investment incomec | 0.38 | 0.89 | 0.11 | |||||||||
Net realized and unrealized gains (losses) | 4.80 | (7.80 | ) | 3.07 | ||||||||
|
| |||||||||||
Total from investment operations | 5.18 | (6.91 | ) | 3.18 | ||||||||
|
| |||||||||||
Less distributions from net investment income | (0.39 | ) | (0.83 | ) | — | |||||||
|
| |||||||||||
Net asset value, end of period | $ | 24.94 | $ | 20.15 | $ | 27.89 | ||||||
|
| |||||||||||
Total returnd | 25.89% | (25.51)% | 12.87% | |||||||||
Ratios to average net assetse |
| |||||||||||
Total expenses | 0.39% | 0.39% | 0.39% | |||||||||
Net investment income | 3.31% | 3.46% | 0.93% | |||||||||
Supplemental data |
| |||||||||||
Net assets, end of period (000’s) | $ 2,494 | $ 2,015 | $ 2,789 | |||||||||
Portfolio turnover ratef | 12.15% | g | 32.37% | g | 12.41% |
aFor the period October 9, 2018 (commencement of operations) to March 31, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 12.15% | 32.37% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 259 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Saudi Arabia ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.9% | ||||||||||||||
Saudi Arabia 99.9% | ||||||||||||||
Abdullah Al Othaim Markets Co. | Food & Staples Retailing | 568 | $ | 19,625 | ||||||||||
Advanced Petrochemical Co. | Chemicals | 1,366 | 21,523 | |||||||||||
Al-Rajhi Bank | Banks | 15,048 | 263,578 | |||||||||||
a | Alinma Bank | Banks | 12,628 | 55,011 | ||||||||||
Almarai Co. JSC | Food Products | 3,246 | 45,779 | |||||||||||
Arab National Bank | Banks | 8,278 | 44,712 | |||||||||||
Arabian Centres Co. Ltd. | Real Estate Management & Development | 2,108 | 14,949 | |||||||||||
Bank Al-Jazira | Banks | 5,178 | 19,354 | |||||||||||
Bank Albilad | Banks | 4,736 | 30,480 | |||||||||||
Banque Saudi Fransi | Banks | 7,572 | 65,204 | |||||||||||
a | Bupa Arabia for Cooperative Insurance Co. | Insurance | 736 | 24,096 | ||||||||||
Dallah Healthcare Co. | Health Care Providers & Services | 442 | 5,562 | |||||||||||
a | Dar Al Arkan Real Estate Development Co. | Real Estate Management & Development | 6,820 | 17,037 | ||||||||||
Dr Sulaiman Al Habib Medical Services Group Co. | Health Care Providers & Services | 1,066 | 27,397 | |||||||||||
a | Emaar Economic City | Real Estate Management & Development | 5,368 | 14,397 | ||||||||||
a | Etihad Etisalat Co. | Wireless Telecommunication Services | 4,862 | 37,007 | ||||||||||
a | Fawaz Abdulaziz Al Hokair & Co. | Specialty Retail | 834 | 5,154 | ||||||||||
Jarir Marketing Co. | Specialty Retail | 758 | 37,871 | |||||||||||
a | Mobile Telecommunications Co. | Wireless Telecommunication Services | 3,686 | 13,325 | ||||||||||
Mouwasat Medical Services Co. | Health Care Providers & Services | 612 | 20,395 | |||||||||||
National Commercial Bank | Banks | 16,896 | 167,343 | |||||||||||
a | National Industrialization Co. | Chemicals | 4,224 | 14,932 | ||||||||||
National Petrochemical Co. | Chemicals | 1,548 | 12,278 | |||||||||||
a | Rabigh Refining and Petrochemical Co. | Oil, Gas & Consumable Fuels | 2,822 | 11,767 | ||||||||||
Riyad Bank | Banks | 22,110 | 109,875 | |||||||||||
Sahara International Petrochemical Co. | Chemicals | 4,630 | 20,392 | |||||||||||
Samba Financial Group | Banks | 14,476 | 103,816 | |||||||||||
Saudi Airlines Catering Co. | Hotels, Restaurants & Leisure | 490 | 10,790 | |||||||||||
Saudi Arabian Fertilizer Co. | Chemicals | 2,586 | 56,465 | |||||||||||
a | Saudi Arabian Mining Co. | Metals & Mining | 5,204 | 57,924 | ||||||||||
b,c | Saudi Arabian Oil Co., 144A, Reg S | Oil, Gas & Consumable Fuels | 31,180 | 298,425 | ||||||||||
Saudi Basic Industries Corp. | Chemicals | 11,064 | 260,753 | |||||||||||
Saudi British Bank | Banks | 14,000 | 94,431 | |||||||||||
Saudi Cement Co. | Construction Materials | 966 | 14,963 | |||||||||||
Saudi Dairy & Foodstuff Co. | Food Products | 202 | 9,823 | |||||||||||
Saudi Electricity Co. | Electric Utilities | 10,084 | 46,295 | |||||||||||
Saudi Ground Services Co. | Transportation Infrastructure | 1,150 | 9,366 | |||||||||||
Saudi Industrial Investment Group | Chemicals | 2,842 | 17,609 | |||||||||||
a | Saudi Kayan Petrochemical Co. | Chemicals | 9,472 | 29,495 | ||||||||||
a | Saudi Research And Marketing Group | Media | 414 | 8,664 | ||||||||||
Saudi Telecom Co. | Diversified Telecommunication Services | 7,448 | 199,360 | |||||||||||
Savola Al-Azizia United Co. | Food Products | 3,372 | 43,151 | |||||||||||
a | Seera Group Holding | Hotels, Restaurants & Leisure | 1,894 | 9,655 | ||||||||||
Southern Province Cement Co. | Construction Materials | 884 | 16,215 | |||||||||||
a | The Company for Cooperative Insurance | Insurance | 790 | 18,303 | ||||||||||
The Qassim Cement | Construction Materials | 568 | 11,191 | |||||||||||
Yanbu Cement | Construction Materials | 994 | 9,567 | |||||||||||
Yanbu National Petrochemical Co. | Chemicals | 2,998 | 46,917 | |||||||||||
|
| |||||||||||||
Total Investments | 2,492,221 | |||||||||||||
Other Assets, less Liabilities 0.1% | 1,871 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 2,494,092 | ||||||||||||
|
|
260 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Saudi Arabia ETF (continued)
See Abbreviations on page 331.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $298,425, representing 12.0% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $298,425, representing 12.0% of net assets.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 261 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Africa ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||
2020 | 2019a | |||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||
Net asset value, beginning of period | $ | 14.81 | $ | 26.62 | $ | 24.42 | ||||||
|
| |||||||||||
Income from investment operationsb: |
| |||||||||||
Net investment incomec | 0.79 | 2.65 | 0.22 | |||||||||
Net realized and unrealized gains (losses) | 4.19 | (11.76 | ) | 2.04 | ||||||||
|
| |||||||||||
Total from investment operations | 4.98 | (9.11 | ) | 2.26 | ||||||||
|
| |||||||||||
Less distributions from net investment income | (0.39 | ) | (2.70 | ) | (0.06 | ) | ||||||
|
| |||||||||||
Net asset value, end of period | $ | 19.40 | $ | 14.81 | $ | 26.62 | ||||||
|
| |||||||||||
Total returnd | 33.76% | (38.46)% | 9.26% | |||||||||
Ratios to average net assetse |
| |||||||||||
Total expenses | 0.19% | 0.19% | 0.19% | |||||||||
Net investment income | 8.63% | 10.42% | 1.75% | |||||||||
Supplemental data |
| |||||||||||
Net assets, end of period (000’s) | $1,940 | $1,481 | $2,662 | |||||||||
Portfolio turnover ratef | 8.27% | g | 21.44% | g | 7.12% |
aFor the period October 10, 2018 (commencement of operations) to March 31, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 8.27% | 21.44% | —% |
262 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE South Africa ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.9% | ||||||||||||||
Luxembourg 1.3% | ||||||||||||||
Reinet Investments SCA | Capital Markets | 1,390 | $ | 24,208 | ||||||||||
|
| |||||||||||||
Romania 0.7% | ||||||||||||||
NEPI Rockcastle PLC | Real Estate Management & Development | 3,334 | 13,792 | |||||||||||
|
| |||||||||||||
South Africa 97.9% | ||||||||||||||
Absa Group Ltd. | Banks | 6,780 | 36,306 | |||||||||||
African Rainbow Minerals Ltd. | Metals & Mining | 998 | 11,578 | |||||||||||
Anglo American Platinum Ltd. | Metals & Mining | 578 | 40,302 | |||||||||||
AngloGold Ashanti Ltd. | Metals & Mining | 3,930 | 102,043 | |||||||||||
a | Aspen Pharmacare Holdings Ltd. | Pharmaceuticals | 3,598 | 25,730 | ||||||||||
AVI Ltd. | Food Products | 2,944 | 13,116 | |||||||||||
Barloworld Ltd. | Trading Companies & Distributors | 1,838 | 6,772 | |||||||||||
Bid Corp. Ltd. | Food & Staples Retailing | 3,138 | 48,588 | |||||||||||
Bidvest Group Ltd. | Industrial Conglomerates | 3,198 | 26,479 | |||||||||||
Capitec Bank Holdings Ltd. | Banks | 718 | 44,655 | |||||||||||
Clicks Group Ltd. | Food & Staples Retailing | 2,254 | 30,044 | |||||||||||
Coronation Fund Managers Ltd. | Capital Markets | 2,426 | 5,864 | |||||||||||
b | Dis-Chem Pharmacies Ltd., Reg S | Food & Staples Retailing | 3,272 | 3,378 | ||||||||||
Discovery Ltd. | Insurance | 3,430 | 26,305 | |||||||||||
Distell Group Holdings Ltd. | Beverages | 780 | 3,437 | |||||||||||
Exxaro Resources Ltd. | Oil, Gas & Consumable Fuels | 2,364 | 17,642 | |||||||||||
FirstRand Ltd. | Diversified Financial Services | 43,662 | 107,925 | |||||||||||
Fortress REIT Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 8,332 | 749 | ||||||||||
Fortress REIT Ltd., A | Equity Real Estate Investment Trusts (REITs | ) | 11,060 | 8,653 | ||||||||||
Gold Fields Ltd. | Metals & Mining | 8,176 | 99,641 | |||||||||||
Growthpoint Properties Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 27,780 | 20,402 | ||||||||||
a | Harmony Gold Mining Co. Ltd. | Metals & Mining | 4,824 | 25,780 | ||||||||||
Impala Platinum Holdings Ltd. | Metals & Mining | 6,970 | 60,787 | |||||||||||
Investec Ltd. | Capital Markets | 2,686 | 5,081 | |||||||||||
Kumba Iron Ore Ltd. | Metals & Mining | 512 | 15,214 | |||||||||||
Liberty Holdings Ltd. | Insurance | 1,118 | 3,806 | |||||||||||
Life Healthcare Group Holdings Ltd. | Health Care Providers & Services | 12,958 | 13,253 | |||||||||||
Momentum Metropolitan Holdings | Insurance | 9,254 | 8,599 | |||||||||||
Mr. Price Group Ltd. | Specialty Retail | 2,424 | 19,184 | |||||||||||
MTN Group Ltd. | Wireless Telecommunication Services | 16,986 | 57,170 | |||||||||||
MultiChoice Group Ltd. | Media | 4,180 | 24,276 | |||||||||||
Naspers Ltd., N | Internet & Direct Marketing Retail | 2,292 | 406,734 | |||||||||||
Nedbank Group Ltd. | Banks | 3,300 | 19,936 | |||||||||||
Netcare Ltd. | Health Care Providers & Services | 13,574 | 10,514 | |||||||||||
a | Ninety One Ltd. | Capital Markets | 1,504 | 3,967 | ||||||||||
a | Northam Platinum Ltd. | Metals & Mining | 3,250 | 33,170 | ||||||||||
Old Mutual Ltd. | Insurance | 43,136 | 26,792 | |||||||||||
b,c | Pepkor Holdings Ltd., 144A, Reg S | Specialty Retail | 6,988 | 4,667 | ||||||||||
Pick ‘N Pay Stores Ltd. | Food & Staples Retailing | 3,236 | 9,109 | |||||||||||
PSG Group Ltd. | Industrial Conglomerates | 1,538 | 4,240 | |||||||||||
Rand Merchant Investment Holdings Ltd. | Insurance | 7,068 | 12,301 | |||||||||||
Redefine Properties Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 53,474 | 7,726 | ||||||||||
Remgro Ltd. | Diversified Financial Services | 4,766 | 26,864 | |||||||||||
Resilient REIT Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 2,956 | 6,534 | ||||||||||
Sanlam Ltd. | Insurance | 15,746 | 49,079 | |||||||||||
Santam Ltd. | Insurance | 392 | 5,711 | |||||||||||
a | Sappi Ltd. | Paper & Forest Products | 5,148 | 8,191 | ||||||||||
a | Sasol Ltd. | Chemicals | 5,242 | 40,720 | ||||||||||
Shoprite Holdings Ltd. | Food & Staples Retailing | 4,634 | 37,964 | |||||||||||
Sibanye Stillwater Ltd. | Metals & Mining | 25,012 | 69,458 | |||||||||||
Standard Bank Group Ltd. | Banks | 12,078 | 78,232 | |||||||||||
Telkom SA SOC Ltd. | Diversified Telecommunication Services | 2,732 | 4,296 | |||||||||||
The Foschini Group Ltd. | Specialty Retail | 3,054 | 15,014 | |||||||||||
The SPAR Group Ltd. | Food & Staples Retailing | 1,818 | 20,670 |
franklintempleton.com | Semiannual Report | 263 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Africa ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
South Africa (continued) | ||||||||||||||
Tiger Brands Ltd. | Food Products | 1,564 | $ | 17,888 | ||||||||||
Truworths International Ltd. | Specialty Retail | 4,000 | 7,475 | |||||||||||
Vodacom Group Ltd. | Wireless Telecommunication Services | 5,626 | 41,578 | |||||||||||
Woolworths Holdings Ltd. | Multiline Retail | 8,226 | 17,384 | |||||||||||
|
| |||||||||||||
1,898,973 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $2,277,211) 99.9% | 1,936,973 | |||||||||||||
Other Assets, less Liabilities 0.1% | 2,823 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 1,939,796 | ||||||||||||
|
|
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the aggregate value of these securities was $8,045, representing 0.4% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $4,667, representing 0.2% of net assets.
264 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Korea ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 16.52 | $ | 21.19 | $ | 25.98 | $ | 25.75 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: |
| |||||||||||||||
Net investment incomec | 0.05 | 0.36 | 0.40 | 0.10 | ||||||||||||
Net realized and unrealized gains (losses) | 6.13 | (4.58 | ) | (4.81 | ) | 0.40 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 6.18 | (4.22 | ) | (4.41 | ) | 0.50 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | — | (0.45 | ) | (0.38 | ) | (0.27 | ) | |||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 22.70 | $ | 16.52 | $ | 21.19 | $ | 25.98 | ||||||||
|
| |||||||||||||||
Total returnd | 37.41% | (20.24)% | (16.92)% | 1.95% | ||||||||||||
Ratios to average net assetse |
| |||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Expenses net waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | —% | ||||||||||||
Net investment income | 0.52% | 1.78% | 1.74% | 0.94% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $22,698 | $11,562 | $16,948 | $25,981 | ||||||||||||
Portfolio turnover ratef | 4.16% | g | 21.72% | g | 5.21% | 3.85% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 4.16% | 21.72% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 265 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE South Korea ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 95.5% | ||||||||||||||
South Korea 95.5% | ||||||||||||||
a | Alteogen Inc. | Biotechnology | 670 | $ | 103,293 | |||||||||
Amorepacific Corp. | Personal Products | 1,140 | 159,863 | |||||||||||
AmorePacific Group | Personal Products | 1,010 | 42,231 | |||||||||||
BGF Retail Co. Ltd. | Food & Staples Retailing | 230 | 24,288 | |||||||||||
BNK Financial Group Inc. | Banks | 10,610 | 45,906 | |||||||||||
a | Celltrion Healthcare Co. Ltd. | Health Care Providers & Services | 2,570 | 192,722 | ||||||||||
a | Celltrion Inc. | Biotechnology | 3,770 | 830,077 | ||||||||||
a | Celltrion Pharm Inc. | Pharmaceuticals | 660 | 63,997 | ||||||||||
Cheil Worldwide Inc. | Media | 2,510 | 44,963 | |||||||||||
CJ CheilJedang Corp. | Food Products | 290 | 97,948 | |||||||||||
CJ Corp. | Industrial Conglomerates | 470 | 32,633 | |||||||||||
CJ ENM Co. Ltd. | Internet & Direct Marketing Retail | 350 | 42,587 | |||||||||||
a | CJ Logistics Corp. | Road & Rail | 270 | 40,979 | ||||||||||
Coway Co. Ltd. | Household Durables | 2,040 | 138,326 | |||||||||||
Daelim Industrial Co. Ltd. | Construction & Engineering | 990 | 65,520 | |||||||||||
a | Daewoo Engineering & Construction Co. Ltd. | Construction & Engineering | 6,530 | 15,550 | ||||||||||
a | Daewoo Shipbuilding & Marine Engineering Co. Ltd. | Machinery | 1,720 | 35,003 | ||||||||||
DB Insurance Co. Ltd. | Insurance | 1,620 | 62,611 | |||||||||||
DGB Financial Group Inc. | Banks | 5,560 | 26,100 | |||||||||||
Dongsuh Cos. Inc. | Food & Staples Retailing | 1,110 | 28,141 | |||||||||||
Doosan Bobcat Inc. | Machinery | 890 | 20,471 | |||||||||||
a | Doosan Heavy Industries and Construction Co. Ltd. | Electrical Equipment | 5,040 | 57,317 | ||||||||||
a | Doosan Infracore Co. Ltd. | Machinery | 4,840 | 36,295 | ||||||||||
a | Doosan Solus Co. Ltd. | Electronic Equipment, Instruments & Components | 420 | 14,186 | ||||||||||
E-MART Inc. | Food & Staples Retailing | 710 | 85,904 | |||||||||||
Fila Holdings Corp. | Textiles, Apparel & Luxury Goods | 1,890 | 59,229 | |||||||||||
GS Engineering & Construction Corp. | Construction & Engineering | 2,130 | 43,984 | |||||||||||
GS Holdings Corp. | Oil, Gas & Consumable Fuels | 1,850 | 49,038 | |||||||||||
GS Retail Co. Ltd. | Food & Staples Retailing | 960 | 27,499 | |||||||||||
Hana Financial Group Inc. | Banks | 10,480 | 251,807 | |||||||||||
Hanjin Kal Corp. | Airlines | 1,090 | 63,937 | |||||||||||
Hankook Tire & Technology Co. Ltd. | Auto Components | 2,710 | 72,993 | |||||||||||
Hanmi Pharm Co. Ltd. | Pharmaceuticals | 260 | 60,804 | |||||||||||
Hanmi Science Co. Ltd. | Pharmaceuticals | 500 | 25,139 | |||||||||||
Hanon Systems | Auto Components | 5,860 | 61,882 | |||||||||||
Hanssem Co. Ltd. | Household Durables | 350 | 32,022 | |||||||||||
a | Hanwha Aerospace Co. Ltd. | Aerospace & Defense | 1,270 | 27,583 | ||||||||||
Hanwha Corp. | Industrial Conglomerates | 820 | 9,045 | |||||||||||
Hanwha Corp. | Industrial Conglomerates | 1,550 | 33,333 | |||||||||||
Hanwha Life Insurance Co. Ltd. | Insurance | 10,140 | 13,222 | |||||||||||
Hanwha Solutions Corp. | Chemicals | 2,910 | 95,673 | |||||||||||
HDC Hyundai Development Co-Engineering & Construction | Construction & Engineering | 1,670 | 30,344 | |||||||||||
a | Helixmith Co. Ltd. | Biotechnology | 840 | 25,462 | ||||||||||
Hite Jinro Co. Ltd. | Beverages | 1,100 | 34,096 | |||||||||||
a | HLB Inc. | Leisure Products | 1,600 | 141,873 | ||||||||||
Hotel Shilla Co. Ltd. | Specialty Retail | 1,130 | 73,530 | |||||||||||
Hyundai Department Store Co. Ltd. | Multiline Retail | 540 | 25,996 | |||||||||||
Hyundai Engineering & Construction Co. Ltd. | Construction & Engineering | 2,640 | 68,737 | |||||||||||
Hyundai Glovis Co. Ltd. | Air Freight & Logistics | 670 | 82,497 | |||||||||||
Hyundai Heavy Industries Holdings Co. Ltd. | Machinery | 370 | 68,970 | |||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | Insurance | 2,200 | 42,044 | |||||||||||
Hyundai Mipo Dockyard Co. Ltd. | Machinery | 740 | 18,793 | |||||||||||
Hyundai Mobis Co. Ltd. | Auto Components | 2,350 | 462,163 | |||||||||||
Hyundai Motor Co. | Automobiles | 5,100 | 778,410 |
266 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Korea ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
South Korea (continued) | ||||||||||||||
Hyundai Steel Co. | Metals & Mining | 2,720 | $ | 57,214 | ||||||||||
Hyundai Wia Corp. | Auto Components | 560 | 19,393 | |||||||||||
Industrial Bank of Korea | Banks | 9,240 | 63,285 | |||||||||||
Kakao Corp. | Interactive Media & Services | 1,970 | 613,993 | |||||||||||
Kangwon Land Inc. | Hotels, Restaurants & Leisure | 3,870 | 71,146 | |||||||||||
KB Financial Group Inc. | Banks | 14,120 | 453,361 | |||||||||||
KCC Corp. | Chemicals | 174 | 21,722 | |||||||||||
KEPCO Plant Service and Engineering Co. Ltd. | Commercial Services & Supplies | 780 | 18,041 | |||||||||||
Kia Motors Corp. | Automobiles | 9,370 | 375,761 | |||||||||||
Korea Aerospace Industries Ltd. | Aerospace & Defense | 2,350 | 45,814 | |||||||||||
a | Korea Electric Power Corp. | Electric Utilities | 9,300 | 162,223 | ||||||||||
Korea Gas Corp. | Gas Utilities | 950 | 20,023 | |||||||||||
Korea Investment Holdings Co. Ltd. | Capital Markets | 1,380 | 85,549 | |||||||||||
a | Korea Shipbuilding & Offshore Engineering Co. Ltd. | Machinery | 1,560 | 110,314 | ||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 360 | 115,896 | |||||||||||
a | Korean Air Lines Co. Ltd. | Airlines | 3,190 | 51,416 | ||||||||||
KT&G Corp. | Tobacco | 4,030 | 283,944 | |||||||||||
Kumho Petrochemical Co. Ltd. | Chemicals | 640 | 60,197 | |||||||||||
LG Chem Ltd. | Chemicals | 1,660 | 928,294 | |||||||||||
LG Corp. | Industrial Conglomerates | 3,270 | 207,189 | |||||||||||
a | LG Display Co. Ltd. | Electronic Equipment, Instruments & Components | 8,190 | 107,496 | ||||||||||
LG Electronics Inc. | Household Durables | 3,920 | 307,365 | |||||||||||
LG Household & Health Care Ltd. | Personal Products | 320 | 396,203 | |||||||||||
LG Innotek Co. Ltd. | Electronic Equipment, Instruments & Components | 510 | 67,593 | |||||||||||
LG Uplus Corp. | Diversified Telecommunication Services | 7,020 | 69,029 | |||||||||||
Lotte Chemical Corp. | Chemicals | 540 | 90,731 | |||||||||||
Lotte Chilsung Beverage Co. Ltd. | Beverages | 130 | 10,004 | |||||||||||
Lotte Corp. | Industrial Conglomerates | 940 | 22,988 | |||||||||||
LOTTE Fine Chemical Co. Ltd. | Chemicals | 640 | 27,171 | |||||||||||
Lotte Shopping Co. Ltd. | Multiline Retail | 410 | 27,520 | |||||||||||
LS Corp. | Electrical Equipment | 630 | 28,281 | |||||||||||
Mando Corp. | Auto Components | 1,190 | 36,275 | |||||||||||
a | Medytox Inc. | Biotechnology | 152 | 27,424 | ||||||||||
a | Medytox Inc., rts., 10/15/20 | Biotechnology | 25 | 622 | ||||||||||
Mirae Asset Daewoo Co. Ltd. | Capital Markets | 5,070 | 19,031 | |||||||||||
Mirae Asset Daewoo Co. Ltd. | Capital Markets | 13,820 | 100,208 | |||||||||||
Naver Corp. | Interactive Media & Services | 4,820 | 1,222,001 | |||||||||||
NCSoft Corp. | Entertainment | 610 | 420,402 | |||||||||||
a | Netmarble Corp | Entertainment | 620 | 88,003 | ||||||||||
NH Investment & Securities Co. Ltd. | Capital Markets | 4,660 | 36,419 | |||||||||||
a | NHN Corp. | Entertainment | 350 | 22,266 | ||||||||||
Nongshim Co. Ltd. | Food Products | 120 | 32,219 | |||||||||||
a | OCI Co. Ltd. | Chemicals | 660 | 32,168 | ||||||||||
Orion Corp. | Food Products | 780 | 87,371 | |||||||||||
Ottogi Corp. | Food Products | 50 | 24,284 | |||||||||||
Paradise Co. Ltd. | Hotels, Restaurants & Leisure | 1,650 | 19,399 | |||||||||||
POSCO | Metals & Mining | 2,490 | 417,306 | |||||||||||
POSCO Chemical Co. Ltd. | Construction Materials | 780 | 55,891 | |||||||||||
Posco International Corp. | Trading Companies & Distributors | 1,810 | 20,739 | |||||||||||
S-1 Corp. | Commercial Services & Supplies | 690 | 51,625 | |||||||||||
S-Oil Corp. | Oil, Gas & Consumable Fuels | 1,490 | 65,741 | |||||||||||
a | Samsung Biologics Co. Ltd. | Life Sciences Tools & Services | 490 | 289,098 | ||||||||||
Samsung C&T Corp. | Industrial Conglomerates | 3,050 | 273,835 | |||||||||||
Samsung Card Co. Ltd. | Consumer Finance | 1,100 | 26,524 | |||||||||||
Samsung Electro-Mechanics Co. Ltd. | Electronic Equipment, Instruments & Components | 2,020 | 240,085 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 79,680 | 3,965,264 |
franklintempleton.com | Semiannual Report | 267 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Korea ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
South Korea (continued) | ||||||||||||||
a | Samsung Engineering Co. Ltd. | Construction & Engineering | 5,760 | $ | 51,961 | |||||||||
Samsung Fire & Marine Insurance Co. Ltd. | Insurance | 1,190 | 185,190 | |||||||||||
a | Samsung Heavy Industries Co. Ltd. | Machinery | 15,900 | 72,464 | ||||||||||
Samsung Life Insurance Co. Ltd. | Insurance | 2,320 | 121,009 | |||||||||||
Samsung SDI Co. Ltd. | Electronic Equipment, Instruments & Components | 1,910 | 707,982 | |||||||||||
Samsung SDS Co. Ltd. | IT Services | 1,160 | 168,123 | |||||||||||
Samsung Securities Co. Ltd. | Capital Markets | 2,300 | 60,180 | |||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 16,750 | 395,297 | |||||||||||
Shinsegae Co. Ltd. | Multiline Retail | 250 | 45,425 | |||||||||||
a | SillaJen Inc. | Biotechnology | 1,616 | 16,720 | ||||||||||
SK Holdings Co. Ltd. | Industrial Conglomerates | 1,130 | 191,796 | |||||||||||
SK Hynix Inc. | Semiconductors & Semiconductor Equipment | 18,870 | 1,355,348 | |||||||||||
SK Innovation Co. Ltd. | Oil, Gas & Consumable Fuels | 1,970 | 234,143 | |||||||||||
SK Networks Co. Ltd. | Trading Companies & Distributors | 4,860 | 19,760 | |||||||||||
SK Telecom Co. Ltd. | Wireless Telecommunication Services | 860 | 175,015 | |||||||||||
SKC Co. Ltd. | Chemicals | 690 | 48,970 | |||||||||||
Ssangyong Cement Industrial Co. Ltd. | Construction Materials | 3,810 | 19,123 | |||||||||||
Woori Financial Group Inc. | Banks | 19,820 | 145,409 | |||||||||||
Yuhan Corp. | Pharmaceuticals | 1,660 | 91,126 | |||||||||||
|
| |||||||||||||
Total Common Stocks | 21,685,413 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 4.2% | ||||||||||||||
South Korea 4.2% | ||||||||||||||
b | Amorepacific Corp., 1.736%, pfd. | Personal Products | 390 | 19,308 | ||||||||||
b | CJ CheilJedang Corp., 2.261%, pfd. | Food Products | 50 | 6,712 | ||||||||||
b | Hyundai Motor Co., 3.614%, pfd. | Automobiles | 810 | 58,456 | ||||||||||
b | Hyundai Motor Co., 3.515%, pfd., 2 | Automobiles | 1,290 | 97,288 | ||||||||||
b | LG Chem Ltd., 0.640%, pfd. | Chemicals | 280 | 76,734 | ||||||||||
b | LG Electronics Inc., 2.356%, pfd. | Household Durables | 630 | 18,288 | ||||||||||
b | LG Household & Health Care Ltd., 1.561%, pfd. | Personal Products | 80 | 48,431 | ||||||||||
b | Samsung Electronics Co. Ltd., 2.105%, pfd. | Technology Hardware, Storage & Peripherals | 13,980 | 603,668 | ||||||||||
b | Samsung Fire & Marine Insurance Co. Ltd., 6.141%, pfd. | Insurance | 100 | 11,843 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks | 940,728 | |||||||||||||
|
| |||||||||||||
Total Investments | 22,626,141 | |||||||||||||
Other Assets, less Liabilities 0.3% | 72,298 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 22,698,439 | ||||||||||||
|
|
aNon-income producing.
bVariable rate security. The rate shown represents the yield at period end.
268 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Korea ETF (continued)
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Equity Contracts | ||||||||||||||||||||
Kospi 200 Mini | Long | 2 | $ | 26,493 | 10/08/20 | $ | (369 | ) |
*As of period end.
See Note 8 regarding other derivative information.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 269 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Switzerland ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $ | 24.44 | $ | 23.86 | $ | 23.11 | $ | 23.56 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.43 | 1.06 | 0.53 | 0.22 | ||||||||||||
Net realized and unrealized gains (losses) | 3.97 | (0.16 | ) | 0.83 | (0.67 | ) | ||||||||||
|
| |||||||||||||||
Total from investment operations | 4.40 | 0.90 | 1.36 | (0.45 | ) | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.64 | ) | (0.32 | ) | (0.61 | ) | — | |||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 28.20 | $ | 24.44 | $ | 23.86 | $ | 23.11 | ||||||||
|
| |||||||||||||||
Total returnd | 18.23% | 3.70% | 6.13% | (1.91)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 3.16% | 4.12% | 2.35% | 6.54% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $16,920 | $34,213 | $2,386 | $2,311 | ||||||||||||
Portfolio turnover ratef | 3.70% | g | 16.25% | g | 14.06% | 2.72% |
aFor the period February 6, 2018 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 3.70% | 16.25% | —% | —% |
270 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Switzerland ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 98.8% | ||||||||||||||
Switzerland 98.8% | ||||||||||||||
ABB Ltd. | Electrical Equipment | 24,498 | $ | 625,282 | ||||||||||
Adecco Group AG | Professional Services | 2,052 | 108,725 | |||||||||||
a | Alcon Inc. | Health Care Equipment & Supplies | 6,132 | 349,065 | ||||||||||
Baloise Holding AG | Insurance | 600 | 88,490 | |||||||||||
Banque Cantonale Vaudoise | Banks | 372 | 37,899 | |||||||||||
Barry Callebaut AG | Food Products | 42 | 93,623 | |||||||||||
Chocoladefabriken Lindt & Spruengli AG | Food Products | 27 | 228,490 | |||||||||||
Cie Financiere Richemont SA | Textiles, Apparel & Luxury Goods | 6,918 | 464,588 | |||||||||||
Clariant AG | Chemicals | 2,664 | 52,657 | |||||||||||
Credit Suisse Group AG | Capital Markets | 31,122 | 313,134 | |||||||||||
DKSH Holding AG | Professional Services | 474 | 33,148 | |||||||||||
EMS-Chemie Holding AG | Chemicals | 96 | 86,361 | |||||||||||
a | Flughafen Zurich AG | Transportation Infrastructure | 252 | 34,725 | ||||||||||
Geberit AG | Building Products | 474 | 281,588 | |||||||||||
Georg Fischer AG | Machinery | 54 | 56,366 | |||||||||||
Givaudan AG | Chemicals | 126 | 544,457 | |||||||||||
Helvetia Holding AG | Insurance | 462 | 39,374 | |||||||||||
Julius Baer Group Ltd. | Capital Markets | 2,892 | 123,612 | |||||||||||
Kuehne + Nagel International AG | Marine | 672 | 131,145 | |||||||||||
LafargeHolcim Ltd., B | Construction Materials | 6,834 | 312,337 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 1,962 | 153,073 | |||||||||||
Lonza Group AG | Life Sciences Tools & Services | 1,014 | 627,549 | |||||||||||
Nestle SA | Food Products | 28,506 | 3,392,486 | |||||||||||
Novartis AG | Pharmaceuticals | 22,980 | 1,998,729 | |||||||||||
OC Oerlikon Corp. AG | Machinery | 2,694 | 21,552 | |||||||||||
Partners Group Holding AG | Capital Markets | 222 | 204,808 | |||||||||||
PSP Swiss Property AG | Real Estate Management & Development | 576 | 69,904 | |||||||||||
Roche Holding AG | Pharmaceuticals | 282 | 97,054 | |||||||||||
Roche Holding AG | Pharmaceuticals | 7,338 | 2,517,084 | |||||||||||
Schindler Holding AG | Machinery | 252 | 68,736 | |||||||||||
Schindler Holding AG, PC | Machinery | 546 | 149,463 | |||||||||||
SGS SA | Professional Services | 78 | 209,613 | |||||||||||
SIG Combibloc Group AG | Containers & Packaging | 3,810 | 76,677 | |||||||||||
Sika AG | Chemicals | 1,872 | 461,098 | |||||||||||
a | Sonova Holding AG | Health Care Equipment & Supplies | 700 | 177,981 | ||||||||||
Straumann Holding AG | Health Care Equipment & Supplies | 132 | 133,616 | |||||||||||
Sulzer AG | Machinery | 246 | 19,827 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 384 | 89,819 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 594 | 26,766 | |||||||||||
Swiss Life Holding AG | Insurance | 420 | 159,314 | |||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 996 | 90,629 | |||||||||||
Swiss Re AG | Insurance | 3,750 | 278,694 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 342 | 181,879 | |||||||||||
Temenos AG | Software | 804 | 108,556 | |||||||||||
UBS Group AG | Capital Markets | 45,702 | 512,360 | |||||||||||
b | VAT Group AG, Reg S | Machinery | 348 | 66,702 | ||||||||||
Vifor Pharma AG | Pharmaceuticals | 684 | 93,359 | |||||||||||
Zurich Insurance Group AG | Insurance | 2,064 | 720,462 | |||||||||||
|
| |||||||||||||
Total Investments | 16,712,856 | |||||||||||||
Other Assets, less Liabilities 1.2% | 207,264 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 16,920,120 | ||||||||||||
|
|
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $66,702, representing 0.4% of net assets.
franklintempleton.com | Semiannual Report | 271 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Switzerland ETF (continued)
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||
Index Contracts | ||||||||||||||||||
Swiss Mid Cap | Long | 7 | $ | 199,390 | 12/18/20 | $ | (92 | ) |
*As of period end.
See Note 8 regarding other derivative information.
272 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Taiwan ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 23.18 | $ | 24.72 | $ | 26.34 | $ | 25.59 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: |
| |||||||||||||||
Net investment income (loss)c | 0.74 | 0.89 | 0.47 | (0.02 | ) | |||||||||||
Net realized and unrealized gains (losses) | 7.18 | (1.56 | ) | (1.85 | ) | 0.77 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 7.92 | (0.67 | ) | (1.38 | ) | 0.75 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.02 | ) | (0.87 | ) | (0.24 | ) | (— | )d | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 31.08 | $ | 23.18 | $ | 24.72 | $ | 26.34 | ||||||||
|
| |||||||||||||||
Total returne | 34.17% | (3.29)% | (5.15)% | 2.93% | ||||||||||||
Ratios to average net assetsf |
| |||||||||||||||
Total expenses | 0.19% | 0.19% | 0.19% | 0.19% | ||||||||||||
Net investment income (loss) | 5.22% | 3.39% | 1.96% | (0.19)% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $18,646 | $13,906 | $14,834 | $5,268 | ||||||||||||
Portfolio turnover rateg | 7.39% | h | 12.57% | h | 8.71% | 3.63% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.001 per share.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 7.39% | 12.57% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 273 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE Taiwan ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.0% | ||||||||||||||
China 1.1% | ||||||||||||||
Airtac International Group | Machinery | 4,500 | $ | 101,150 | ||||||||||
Silergy Corp. | Semiconductors & Semiconductor Equipment | 1,900 | 111,853 | |||||||||||
|
| |||||||||||||
213,003 | ||||||||||||||
|
| |||||||||||||
Taiwan 97.9% | ||||||||||||||
Accton Technology Corp. | Communications Equipment | 16,000 | 122,920 | |||||||||||
a | Acer Inc. | Technology Hardware, Storage & Peripherals | 90,000 | 77,066 | ||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 12,098 | 121,556 | |||||||||||
ASE Industrial Holding Co. Ltd. | Semiconductors & Semiconductor Equipment | 105,000 | 214,626 | |||||||||||
Asia Cement Corp. | Construction Materials | 72,000 | 103,170 | |||||||||||
ASMedia Technology Inc. | Semiconductors & Semiconductor Equipment | 1,200 | 60,286 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 22,000 | 192,563 | |||||||||||
a | AU Optronics Corp. | Electronic Equipment, Instruments & Components | 273,000 | 105,573 | ||||||||||
Capital Securities Corp. | Capital Markets | 66,000 | 24,498 | |||||||||||
Catcher Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 22,000 | 137,870 | |||||||||||
Cathay Financial Holding Co. Ltd. | Insurance | 255,000 | 339,859 | |||||||||||
Chailease Holding Co. Ltd. | Diversified Financial Services | 40,523 | 183,292 | |||||||||||
Chang Hwa Commercial Bank Ltd. | Banks | 199,560 | 119,549 | |||||||||||
Cheng Shin Rubber Industry Co. Ltd. | Auto Components | 57,000 | 72,623 | |||||||||||
Chicony Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 20,030 | 58,163 | |||||||||||
a | China Airlines Ltd. | Airlines | 81,000 | 23,157 | ||||||||||
China Development Financial Holding Corp. | Insurance | 429,000 | 126,054 | |||||||||||
China Life Insurance Co. Ltd. | Insurance | 90,000 | 61,684 | |||||||||||
a | China Motor Corp. | Automobiles | 9,000 | 13,052 | ||||||||||
China Steel Corp. | Metals & Mining | 384,000 | 271,141 | |||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 120,000 | 443,340 | |||||||||||
Compal Electronics Inc. | Technology Hardware, Storage & Peripherals | 126,000 | 82,878 | |||||||||||
CTBC Financial Holding Co. Ltd. | Banks | 561,000 | 356,412 | |||||||||||
Delta Electronics Inc. | Electronic Equipment, Instruments & Components | 66,000 | 430,702 | |||||||||||
E.Sun Financial Holding Co. Ltd. | Banks | 368,298 | 325,545 | |||||||||||
Eclat Textile Co. Ltd. | Textiles, Apparel & Luxury Goods | 6,000 | 74,373 | |||||||||||
a | Epistar Corp. | Semiconductors & Semiconductor Equipment | 30,000 | 36,617 | ||||||||||
Eternal Materials Co. Ltd. | Chemicals | 30,630 | 34,636 | |||||||||||
EVA Airways Corp. | Airlines | 72,000 | 26,476 | |||||||||||
a | Evergreen Marine Corp. Taiwan Ltd. | Marine | 78,035 | 42,706 | ||||||||||
Far Eastern International Bank | Banks | 64,732 | 22,909 | |||||||||||
Far Eastern New Century Corp. | Industrial Conglomerates | 123,000 | 107,448 | |||||||||||
Far EasTone Telecommunications Co. Ltd. | Wireless Telecommunication Services | 51,000 | 107,417 | |||||||||||
Feng Tay Enterprise Co. Ltd. | Textiles, Apparel & Luxury Goods | 13,200 | 79,076 | |||||||||||
First Financial Holding Co. Ltd. | Banks | 314,910 | 223,444 | |||||||||||
Formosa Chemicals & Fibre Corp. | Chemicals | 45,000 | 105,190 | |||||||||||
Formosa Petrochemical Corp. | Oil, Gas & Consumable Fuels | 42,000 | 116,014 | |||||||||||
Formosa Plastics Corp. | Chemicals | 153,000 | 415,227 | |||||||||||
Formosa Taffeta Co. Ltd. | Textiles, Apparel & Luxury Goods | 36,000 | 38,844 | |||||||||||
Foxconn Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 34,000 | 60,459 | |||||||||||
Fubon Financial Holding Co. Ltd. | Insurance | 228,000 | 329,853 | |||||||||||
Genius Electronic Optical Co. Ltd. | Electronic Equipment, Instruments & Components | 2,700 | 54,630 | |||||||||||
Giant Manufacturing Co. Ltd. | Leisure Products | 9,000 | 84,680 | |||||||||||
Globalwafers Co. Ltd. | Semiconductors & Semiconductor Equipment | 6,300 | 83,530 | |||||||||||
Hiwin Technologies Corp. | Machinery | 8,000 | 78,724 | |||||||||||
Hon Hai Precision Industry Co. Ltd. | Electronic Equipment, Instruments & Components | 299,000 | 799,068 | |||||||||||
Hotai Motor Co. Ltd. | Specialty Retail | 9,780 | 217,131 | |||||||||||
HTC Corp. | Technology Hardware, Storage & Peripherals | 24,000 | 23,700 | |||||||||||
Hua Nan Financial Holdings Co. Ltd. | Banks | 294,464 | 179,452 | |||||||||||
a | Innolux Corp. | Electronic Equipment, Instruments & Components | 261,000 | 84,441 | ||||||||||
Inventec Corp. | Technology Hardware, Storage & Peripherals | 93,000 | 72,089 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 2,320 | 269,153 |
274 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Taiwan ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Taiwan (continued) | ||||||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 67,000 | $ | 106,647 | ||||||||||
MediaTek Inc. | Semiconductors & Semiconductor Equipment | 45,600 | 955,707 | |||||||||||
Mega Financial Holding Co. Ltd. | Banks | 339,000 | 325,399 | |||||||||||
Micro-Star International Co. Ltd. | Technology Hardware, Storage & Peripherals | 21,000 | 96,437 | |||||||||||
momo.com Inc. | Internet & Direct Marketing Retail | 1,500 | 36,410 | |||||||||||
Nan Ya Plastics Corp. | Chemicals | 174,000 | 357,468 | |||||||||||
Nanya Technology Corp. | Semiconductors & Semiconductor Equipment | 27,000 | 53,605 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 4,000 | 47,441 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 18,000 | 165,009 | |||||||||||
a | OBI Pharma Inc. | Biotechnology | 4,194 | 16,219 | ||||||||||
a | Oneness Biotech Co. Ltd. | Pharmaceuticals | 8,500 | 100,373 | ||||||||||
Parade Technologies Ltd. | Semiconductors & Semiconductor Equipment | 2,100 | 76,134 | |||||||||||
Pegatron Corp. | Technology Hardware, Storage & Peripherals | 63,000 | 138,782 | |||||||||||
Pou Chen Corp. | Textiles, Apparel & Luxury Goods | 81,000 | 73,135 | |||||||||||
Powertech Technology Inc. | Semiconductors & Semiconductor Equipment | 21,000 | 62,575 | |||||||||||
President Chain Store Corp. | Food & Staples Retailing | 17,600 | 159,823 | |||||||||||
Quanta Computer Inc. | Technology Hardware, Storage & Peripherals | 84,000 | 219,267 | |||||||||||
Realtek Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 15,000 | 190,854 | |||||||||||
Shin Kong Financial Holding Co. Ltd. | Insurance | 366,530 | 101,751 | |||||||||||
SinoPac Financial Holdings Co. Ltd. | Banks | 327,040 | 122,519 | |||||||||||
Synnex Technology International Corp. | Electronic Equipment, Instruments & Components | 42,000 | 59,892 | |||||||||||
Taishin Financial Holding Co. Ltd. | Banks | 322,195 | 142,397 | |||||||||||
Taiwan Business Bank | Banks | 154,050 | 50,744 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 160,352 | 229,217 | |||||||||||
Taiwan Cooperative Financial Holding Co. Ltd. | Banks | 296,460 | 199,605 | |||||||||||
Taiwan Fertilizer Co. Ltd. | Chemicals | 24,000 | 42,014 | |||||||||||
a | Taiwan Glass Industry Corp. | Building Products | 51,000 | 21,395 | ||||||||||
Taiwan High Speed Rail Corp. | Transportation Infrastructure | 63,000 | 68,847 | |||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 50,000 | 166,770 | |||||||||||
Taiwan Secom Co. Ltd. | Commercial Services & Supplies | 9,000 | 26,165 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 270,000 | 4,036,669 | |||||||||||
Teco Electric & Machinery Co. Ltd. | Electrical Equipment | 54,000 | 55,656 | |||||||||||
The Shanghai Commercial & Savings Bank Ltd. | Banks | 102,000 | 136,824 | |||||||||||
a | TPK Holding Co. Ltd. | Electronic Equipment, Instruments & Components | 10,000 | 16,953 | ||||||||||
Transcend Information Inc. | Technology Hardware, Storage & Peripherals | 9,000 | 19,515 | |||||||||||
U-Ming Marine Transport Corp. | Marine | 12,000 | 12,409 | |||||||||||
Uni-President Enterprises Corp. | Food Products | 150,000 | 323,700 | |||||||||||
Unimicron Technology Corp. | Electronic Equipment, Instruments & Components | 39,000 | 100,186 | |||||||||||
United Microelectronics Corp. | Semiconductors & Semiconductor Equipment | 354,000 | 348,964 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 27,000 | 89,590 | |||||||||||
Walsin Lihwa Corp. | Electrical Equipment | 96,000 | 53,201 | |||||||||||
Walsin Technology Corp. | Electronic Equipment, Instruments & Components | 15,000 | 80,019 | |||||||||||
Wan Hai Lines Ltd. | Marine | 24,000 | 17,609 | |||||||||||
Win Semiconductors Corp. | Semiconductors & Semiconductor Equipment | 12,000 | 118,707 | |||||||||||
Wistron Corp. | Technology Hardware, Storage & Peripherals | 87,000 | 89,517 | |||||||||||
Wiwynn Corp. | Technology Hardware, Storage & Peripherals | 2,500 | 56,367 | |||||||||||
Yageo Corp. | Electronic Equipment, Instruments & Components | 9,500 | 115,298 | |||||||||||
Yuanta Financial Holding Co. Ltd. | Diversified Financial Services | 361,560 | 222,214 | |||||||||||
a | Yulon Motor Co. Ltd. | Automobiles | 27,000 | 21,395 | ||||||||||
Yulon Nissan Motor Co. Ltd. | Automobiles | 1,000 | 8,425 | |||||||||||
Zhen Ding Technology Holding Ltd. | Electronic Equipment, Instruments & Components | 18,000 | 78,309 | |||||||||||
|
| |||||||||||||
18,248,994 | ||||||||||||||
|
| |||||||||||||
Total Investments | 18,461,997 | |||||||||||||
|
| |||||||||||||
Other Assets, less Liabilities 1.0% | 184,248 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% |
| $ | 18,646,245 | |||||||||||
|
|
aNon-income producing.
franklintempleton.com | Semiannual Report | 275 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE Taiwan ETF (continued)
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Index Contracts | ||||||||||||||||||||
FTSE Taiwan Index | Long | 4 | $ | 174,520 | 10/29/20 | $ | 2,477 |
*As of period end.
See Note 8 regarding other derivative information.
276 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE United Kingdom ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, | |||||||||||||||
2020 | 2019 | 2018a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
| |||||||||||||||
Net asset value, beginning of period | $ | 17.92 | $ | 24.23 | $ | 25.23 | $ | 24.89 | ||||||||
|
| |||||||||||||||
Income from investment operationsb: |
| |||||||||||||||
Net investment incomec | 0.31 | 1.08 | 1.05 | 0.38 | ||||||||||||
Net realized and unrealized gains (losses) | 1.43 | (6.30 | ) | (1.21 | ) | 0.07 | ||||||||||
|
| |||||||||||||||
Total from investment operations | 1.74 | (5.22 | ) | (0.16 | ) | 0.45 | ||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.32 | ) | (1.09 | ) | (0.84 | ) | (0.11 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of period | $ | 19.34 | $ | 17.92 | $ | 24.23 | $ | 25.23 | ||||||||
|
| |||||||||||||||
Total returnd | 9.39% | (22.42)% | (0.51)% | 1.80% | ||||||||||||
Ratios to average net assetse |
| |||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | ||||||||||||
Net investment income | 3.20% | 4.84% | 4.46% | 3.68% | ||||||||||||
Supplemental data |
| |||||||||||||||
Net assets, end of period (000’s) | $77,354 | $89,624 | $29,076 | $2,523 | ||||||||||||
Portfolio turnover ratef | 2.74% | g | 4.41% | g | 10.10% | 1.61% |
aFor the period November 2, 2017 (commencement of operations) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 2.74% | 4.41% | —% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 277 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin FTSE United Kingdom ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.7% | ||||||||||||||
Australia 4.4% | ||||||||||||||
a | Glencore PLC | Metals & Mining | 421,520 | $ | 877,137 | |||||||||
Rio Tinto PLC | Metals & Mining | 42,400 | 2,551,899 | |||||||||||
|
| |||||||||||||
3,429,036 | ||||||||||||||
|
| |||||||||||||
Germany 0.1% | ||||||||||||||
b | TUI AG | Hotels, Restaurants & Leisure | 16,880 | 63,918 | ||||||||||
|
| |||||||||||||
Ireland 2.9% | ||||||||||||||
CRH PLC | Construction Materials | 30,720 | 1,110,426 | |||||||||||
a | Flutter Entertainment PLC | Hotels, Restaurants & Leisure | 4,720 | 747,497 | ||||||||||
Smurfit Kappa Group PLC | Containers & Packaging | 9,280 | 364,714 | |||||||||||
|
| |||||||||||||
2,222,637 | ||||||||||||||
|
| |||||||||||||
Kazakhstan 0.1% | ||||||||||||||
KAZ Minerals PLC | Metals & Mining | 8,720 | 59,072 | |||||||||||
|
| |||||||||||||
Netherlands 0.7% | ||||||||||||||
a,c,d | Just Eat Takeaway.com NV, 144A, Reg S | Internet & Direct Marketing Retail | 4,640 | 521,397 | ||||||||||
|
| |||||||||||||
Russia 0.5% | ||||||||||||||
Evraz PLC | Metals & Mining | 22,560 | 100,505 | |||||||||||
Polymetal International PLC | Metals & Mining | 13,200 | 288,312 | |||||||||||
|
| |||||||||||||
388,817 | ||||||||||||||
|
| |||||||||||||
Switzerland 0.2% | ||||||||||||||
Coca-Cola HBC AG | Beverages | 7,520 | 185,882 | |||||||||||
|
| |||||||||||||
United Arab Emirates 0.0%† | ||||||||||||||
a | NMC Health PLC | Health Care Providers & Services | 3,705 | — | ||||||||||
|
| |||||||||||||
United Kingdom 90.8% | ||||||||||||||
3i Group PLC | Capital Markets | 37,280 | 480,317 | |||||||||||
Admiral Group PLC | Insurance | 8,160 | 275,441 | |||||||||||
Anglo American PLC | Metals & Mining | 47,920 | 1,162,076 | |||||||||||
Antofagasta PLC | Metals & Mining | 13,600 | 179,952 | |||||||||||
Ashmore Group PLC | Capital Markets | 17,680 | 81,873 | |||||||||||
Ashtead Group PLC | Trading Companies & Distributors | 17,520 | 634,196 | |||||||||||
Associated British Foods PLC | Food Products | 13,600 | 328,345 | |||||||||||
AstraZeneca PLC | Pharmaceuticals | 51,280 | 5,606,549 | |||||||||||
Auto Trader Group PLC | Interactive Media & Services | 36,880 | 268,430 | |||||||||||
Avast PLC | Software | 21,520 | 146,617 | |||||||||||
AVEVA Group PLC | Software | 2,480 | 153,446 | |||||||||||
Aviva PLC | Insurance | 153,120 | 565,553 | |||||||||||
B&M European Value Retail SA | Multiline Retail | 33,280 | 212,842 | |||||||||||
BAE Systems PLC | Aerospace & Defense | 125,600 | 782,651 | |||||||||||
a | Barclays PLC | Banks | 675,520 | 852,440 | ||||||||||
Barratt Developments PLC | Household Durables | 39,600 | 243,585 | |||||||||||
Bellway PLC | Household Durables | 4,880 | 148,321 | |||||||||||
BHP Group PLC | Metals & Mining | 81,280 | 1,737,793 | |||||||||||
BP PLC | Oil, Gas & Consumable Fuels | 775,200 | 2,256,906 | |||||||||||
British American Tobacco PLC | Tobacco | 89,280 | 3,205,823 | |||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 36,080 | 157,378 | ||||||||||
BT Group PLC | Diversified Telecommunication Services | 340,080 | 432,533 | |||||||||||
Bunzl PLC | Trading Companies & Distributors | 13,120 | 425,226 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 15,760 | 316,620 | |||||||||||
Centrica PLC | Multi-Utilities | 225,920 | 117,091 | |||||||||||
Compass Group PLC | Hotels, Restaurants & Leisure | 69,680 | 1,053,062 | |||||||||||
ConvaTec Group PLC | Health Care Equipment & Supplies | 61,920 | 143,130 | |||||||||||
Croda International PLC | Chemicals | 4,880 | 394,304 | |||||||||||
DCC PLC | Industrial Conglomerates | 3,840 | 298,258 | |||||||||||
Derwent London PLC | Equity Real Estate Investment Trusts (REITs | ) | 3,920 | 130,242 |
franklintempleton.com | Semiannual Report | 278 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE United Kingdom ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
Diageo PLC | Beverages | 89,680 | $ | 3,072,364 | ||||||||||
Direct Line Insurance Group PLC | Insurance | 53,520 | 186,400 | |||||||||||
DS Smith PLC | Containers & Packaging | 49,840 | 189,884 | |||||||||||
easyJet PLC | Airlines | 8,720 | 56,546 | |||||||||||
Experian PLC | Professional Services | 35,440 | 1,337,851 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 8,800 | 888,743 | |||||||||||
Fresnillo PLC | Metals & Mining | 7,280 | 112,657 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 192,640 | 3,616,133 | |||||||||||
a | GVC Holdings PLC | Hotels, Restaurants & Leisure | 22,640 | 285,080 | ||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 14,800 | 448,679 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 14,000 | 282,709 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 6,640 | 222,674 | |||||||||||
a | Hiscox Ltd. | Insurance | 13,040 | 150,610 | ||||||||||
HomeServe PLC | Commercial Services & Supplies | 10,800 | 172,573 | |||||||||||
Howden Joinery Group PLC | Trading Companies & Distributors | 22,320 | 170,419 | |||||||||||
HSBC Holdings PLC | Banks | 795,760 | 3,101,706 | |||||||||||
IMI PLC | Machinery | 10,400 | 141,174 | |||||||||||
Imperial Brands PLC | Tobacco | 36,800 | 650,588 | |||||||||||
a | Informa PLC | Media | 58,480 | 284,645 | ||||||||||
a | InterContinental Hotels Group PLC | Hotels, Restaurants & Leisure | 7,120 | 376,842 | ||||||||||
Intermediate Capital Group PLC | Capital Markets | 10,800 | 166,569 | |||||||||||
International Consolidated Airlines Group SA | Airlines | 26,691 | 32,788 | |||||||||||
International Consolidated Airlines Group SA | Airlines | 16,710 | 20,527 | |||||||||||
Intertek Group PLC | Professional Services | 6,320 | 517,519 | |||||||||||
ITV PLC | Media | 145,600 | 127,282 | |||||||||||
J Sainsbury PLC | Food & Staples Retailing | 63,520 | 156,805 | |||||||||||
JD Sports Fashion PLC | Specialty Retail | 16,880 | 176,631 | |||||||||||
Johnson Matthey PLC | Chemicals | 7,440 | 226,706 | |||||||||||
Kingfisher PLC | Specialty Retail | 82,480 | 316,372 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 27,920 | 188,596 | ||||||||||
Legal & General Group PLC | Insurance | 231,600 | 563,943 | |||||||||||
a | Lloyds Banking Group PLC | Banks | 2,748,720 | 936,537 | ||||||||||
London Stock Exchange Group PLC | Capital Markets | 12,320 | 1,413,706 | |||||||||||
M&G PLC | Diversified Financial Services | 101,840 | 209,996 | |||||||||||
Meggitt PLC | Aerospace & Defense | 30,080 | 100,135 | |||||||||||
a | Melrose Industries PLC | Electrical Equipment | 187,840 | 280,480 | ||||||||||
Mondi PLC | Paper & Forest Products | 18,960 | 401,866 | |||||||||||
National Grid PLC | Multi-Utilities | 136,960 | 1,575,496 | |||||||||||
a | Natwest Group PLC | Banks | 177,840 | 243,821 | ||||||||||
Next PLC | Multiline Retail | 4,960 | 381,531 | |||||||||||
a | Ocado Group PLC | Internet & Direct Marketing Retail | 18,960 | 672,595 | ||||||||||
Pearson PLC | Media | 29,360 | 208,458 | |||||||||||
Pennon Group PLC | Water Utilities | 16,480 | 219,658 | |||||||||||
Persimmon PLC | Household Durables | 12,400 | 396,440 | |||||||||||
Phoenix Group Holdings PLC | Insurance | 21,200 | 188,617 | |||||||||||
Prudential PLC | Insurance | 102,000 | 1,462,389 | |||||||||||
Quilter PLC | Capital Markets | 70,240 | 116,414 | |||||||||||
Reckitt Benckiser Group PLC | Household Products | 24,640 | 2,408,207 | |||||||||||
RELX PLC | Professional Services | 72,640 | 1,620,869 | |||||||||||
a | Renishaw PLC | Electronic Equipment, Instruments & Components | 1,360 | 98,811 | ||||||||||
a | Rentokil Initial PLC | Commercial Services & Supplies | 72,160 | 499,653 | ||||||||||
Rightmove PLC | Interactive Media & Services | 33,840 | 274,215 | |||||||||||
Rolls-Royce Holdings PLC | Aerospace & Defense | 66,880 | 112,401 | |||||||||||
Royal Dutch Shell PLC, A | Oil, Gas & Consumable Fuels | 160,320 | 1,997,795 | |||||||||||
Royal Dutch Shell PLC, B | Oil, Gas & Consumable Fuels | 144,960 | 1,761,975 | |||||||||||
RSA Insurance Group PLC | Insurance | 40,400 | 235,919 | |||||||||||
Schroders PLC | Capital Markets | 4,400 | 153,300 |
franklintempleton.com | Semiannual Report | 279 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE United Kingdom ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
Segro PLC | Equity Real Estate Investment Trusts (REITs | ) | 46,480 | $ | 560,273 | |||||||||
Severn Trent PLC | Water Utilities | 9,360 | 295,134 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 34,240 | 671,286 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 15,520 | 275,883 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 2,880 | 411,979 | |||||||||||
SSE PLC | Electric Utilities | 40,640 | 634,676 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | 20,720 | 249,385 | |||||||||||
a | Standard Chartered PLC | Banks | 100,400 | 462,207 | ||||||||||
Standard Life Aberdeen PLC | Capital Markets | 86,560 | 252,905 | |||||||||||
Tate & Lyle PLC | Food Products | 18,000 | 154,795 | |||||||||||
Taylor Wimpey PLC | Household Durables | 139,360 | 195,388 | |||||||||||
Tesco PLC | Food & Staples Retailing | 378,080 | 1,038,661 | |||||||||||
The Berkeley Group Holdings PLC | Household Durables | 4,560 | 249,248 | |||||||||||
The Sage Group PLC | Software | 42,640 | 397,341 | |||||||||||
Travis Perkins PLC | Trading Companies & Distributors | 9,920 | 139,275 | |||||||||||
Unilever PLC | Personal Products | 42,640 | 2,632,769 | |||||||||||
United Utilities Group PLC | Water Utilities | 26,640 | 294,739 | |||||||||||
Vodafone Group PLC | Wireless Telecommunication Services | 1,047,040 | 1,389,890 | |||||||||||
Weir Group PLC | Machinery | 10,000 | 161,923 | |||||||||||
a | Whitbread PLC | Hotels, Restaurants & Leisure | 7,920 | 217,578 | ||||||||||
William Morrison Supermarkets PLC | Food & Staples Retailing | 87,120 | 191,638 | |||||||||||
WPP PLC | Media | 46,240 | 363,457 | |||||||||||
|
| |||||||||||||
70,244,729 | ||||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $97,112,679) | 77,115,488 | |||||||||||||
|
| |||||||||||||
Short Term Investments 0.1% | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.1% | ||||||||||||||
United States 0.1% | ||||||||||||||
e,f | Institutional Fiduciary Trust Portfolio, 0.00% | Money Market Funds | 49,020 | 49,020 | ||||||||||
|
| |||||||||||||
Total Investments | 77,164,508 | |||||||||||||
Other Assets, less Liabilities 0.2% | 189,415 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 77,353,923 | ||||||||||||
|
|
See Abbreviations on page 331.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2020. See Note 1(d).
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $521,397, representing 0.7% of net assets.
dSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $521,397, representing 0.7% of net assets.
eThe rate shown is the annualized seven-day effective yield at period end.
fSee Note 3(c) regarding investments in affiliated management investment companies.
280 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin FTSE United Kingdom ETF (continued)
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||
Equity Contracts | ||||||||||||||||||
FTSE 100 Index | Long | 3 | $ | 226,557 | 12/18/20 | $ | (8,497 | ) |
*As of period end.
See Note 8 regarding other derivative information.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 281 |
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2020 (unaudited)
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 18,330,728 | $ | 14,634,853 | $ | 138,266,801 | $ | 6,324,195 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | 11,650 | — | — | — | ||||||||||||
|
| |||||||||||||||
Value – Unaffiliated issuers+ | $ | 18,929,612 | $ | 13,880,138 | $ | 87,402,064 | $ | 6,103,805 | ||||||||
Value – Non-controlled affiliates (Note 3c) | 11,650 | — | — | — | ||||||||||||
Cash | — | — | 1,005 | — | ||||||||||||
Foreign currency, at value (cost $10,626, $27,253, $447,150 and $4,232, respectively) | 10,609 | 27,275 | 438,803 | 4,248 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 3,871 | — | 7,112 | — | ||||||||||||
Dividends and interest | 28,019 | 54,013 | 390,092 | 12,363 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | — | 232,449 | — | ||||||||||||
|
| |||||||||||||||
Total assets | 18,983,761 | 13,961,426 | 88,471,525 | 6,120,416 | ||||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 40 | — | — | — | ||||||||||||
Management fees | 2,966 | 1,056 | 15,074 | 459 | ||||||||||||
Variation margin on futures contracts | — | — | 56,930 | — | ||||||||||||
Funds advanced by custodian | 7,221 | 45,980 | — | 11,709 | ||||||||||||
Deferred tax | 11,137 | — | — | — | ||||||||||||
Payable upon return of securities loaned | 11,650 | — | — | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 33,014 | 47,036 | 72,004 | 12,168 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 18,950,747 | $ | 13,914,390 | $ | 88,399,521 | $ | 6,108,248 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 18,898,409 | $ | 14,486,189 | $ | 175,527,826 | $ | 6,459,960 | ||||||||
Total distributable earnings (loss) | 52,338 | (571,799 | ) | (87,128,305 | ) | (351,712 | ) | |||||||||
|
| |||||||||||||||
Net assets, at value | $ | 18,950,747 | $ | 13,914,390 | $ | 88,399,521 | $ | 6,108,248 | ||||||||
|
| |||||||||||||||
Shares outstanding | 800,000 | 600,000 | 5,200,000 | 250,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 23.69 | $ | 23.19 | $ | 17.00 | $ | 24.43 | ||||||||
|
| |||||||||||||||
+Includes securities loaned | 11,400 | — | — | — |
282 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2020 (unaudited)
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 47,346,097 | $ | 201,690,175 | $ | 4,910,415 | $ | 6,769,283 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | 188,560 | — | 11,429 | — | ||||||||||||
|
| |||||||||||||||
Value – Unaffiliated issuers+ | $ | 57,491,137 | $ | 210,058,229 | $ | 4,335,283 | $ | 5,756,403 | ||||||||
Value – Non-controlled affiliates (Note 3c) | 188,560 | — | 11,429 | — | ||||||||||||
Cash | 39,714 | 54,916 | — | — | ||||||||||||
Foreign currency, at value (cost $52,089, $278,272, $13,922 and $133, respectively) | 52,090 | 281,165 | 13,969 | 132 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 19,355 | — | — | — | ||||||||||||
Dividends and interest++ | 61,975 | 575,311 | 19,126 | 7,393 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | 11,306 | 91,944 | 4,862 | — | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | — | 111,610 | — | ||||||||||||
|
| |||||||||||||||
Total assets | 57,864,137 | 211,061,565 | 4,496,279 | 5,763,928 | ||||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 19,145 | 235,671 | 124,304 | — | ||||||||||||
Management fees | 8,982 | 16,334 | 326 | 492 | ||||||||||||
Variation margin on futures contracts | 6,524 | 2,412 | 87 | — | ||||||||||||
Funds advanced by custodian | — | — | — | 5,899 | ||||||||||||
Payable upon return of securities loaned | 188,560 | — | — | — | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | — | 98 | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 223,211 | 254,417 | 124,815 | 6,391 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 57,640,926 | $ | 210,807,148 | $ | 4,371,464 | $ | 5,757,537 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 50,764,317 | $ | 199,759,054 | $ | 5,713,922 | $ | 7,448,714 | ||||||||
Total distributable earnings (loss) | 6,876,609 | 11,048,094 | (1,342,458 | ) | (1,691,177 | ) | ||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 57,640,926 | $ | 210,807,148 | $ | 4,371,464 | $ | 5,757,537 | ||||||||
|
| |||||||||||||||
Shares outstanding | 2,000,000 | 9,200,000 | 200,000 | 250,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 28.82 | $ | 22.91 | $ | 21.86 | $ | 23.03 | ||||||||
|
| |||||||||||||||
+Includes securities loaned | 184,456 | — | — | — | ||||||||||||
++Includes European Union tax reclaims | — | 198,515 | 11,095 | 820 |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 283 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2020 (unaudited)
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 7,914,280 | $ | 18,713,220 | $ | 11,121,725 | $ | 3,422,976 | ||||||||
|
| |||||||||||||||
Value – Unaffiliated issuers | $ | 7,962,877 | $ | 16,982,624 | $ | 12,220,899 | $ | 3,098,910 | ||||||||
Cash | 453 | 6,944 | 726 | 300 | ||||||||||||
Foreign currency, at value (cost $3,810, $90,819, $908 and $1,981, respectively) | 3,819 | 90,821 | 909 | 1,985 | ||||||||||||
Receivables: | ||||||||||||||||
Dividends and interest | 57,814 | 17,304 | 4,904 | 450 | ||||||||||||
Variation margin on futures contracts | — | 858 | — | — | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | 11,382 | — | — | ||||||||||||
|
| |||||||||||||||
Total assets | �� | 8,024,963 | 17,109,933 | 12,227,438 | 3,101,645 | |||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 57,814 | — | — | — | ||||||||||||
Management fees | 598 | 1,308 | 1,908 | 236 | ||||||||||||
Deferred tax | — | — | 84,565 | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 58,412 | 1,308 | 86,473 | 236 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 7,966,551 | $ | 17,108,625 | $ | 12,140,965 | $ | 3,101,409 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 8,053,448 | $ | 18,826,786 | $ | 12,239,884 | $ | 3,728,641 | ||||||||
Total distributable earnings (loss) | (86,897 | ) | (1,718,161 | ) | (98,919 | ) | (627,232 | ) | ||||||||
|
| |||||||||||||||
Net assets, at value | $ | 7,966,551 | $ | 17,108,625 | $ | 12,140,965 | $ | 3,101,409 | ||||||||
|
| |||||||||||||||
Shares outstanding | 350,000 | 750,000 | 550,000 | 150,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 22.76 | $ | 22.81 | $ | 22.07 | $ | 20.68 | ||||||||
|
|
284 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2020 (unaudited)
Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 461,293,129 | $ | 5,283,904 | $ | 2,513,429 | $ | 5,083,152 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | 340,642 | 49,950 | — | — | ||||||||||||
|
| |||||||||||||||
Value – Unaffiliated issuers | $ | 448,809,112 | $ | 4,933,302 | $ | 1,773,376 | $ | 4,134,181 | ||||||||
Value – Non-controlled affiliates (Note 3c) | 340,642 | 49,950 | — | — | ||||||||||||
Cash | — | — | — | 32 | ||||||||||||
Foreign currency, at value (cost $303,122, $1,976, $6,050 and $3,090, respectively) | 303,206 | 1,975 | 6,049 | 3,045 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 57,036 | 1,492 | 70 | — | ||||||||||||
Dividends and interest | 3,204,621 | 35,662 | 4,913 | 601 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | 177,499 | 4,551 | — | — | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | 19 | — | — | ||||||||||||
|
| |||||||||||||||
Total assets | 452,892,116 | 5,026,951 | 1,784,408 | 4,137,859 | ||||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Management fees | 33,268 | 353 | 295 | 640 | ||||||||||||
Variation margin on futures contracts | 14,796 | 1,258 | — | — | ||||||||||||
Funds advanced by custodian | — | — | 9,321 | — | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | 22,549 | — | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 48,064 | 24,160 | 9,616 | 640 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 452,844,052 | $ | 5,002,791 | $ | 1,774,792 | $ | 4,137,219 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 467,626,887 | $ | 6,975,249 | $ | 2,619,441 | $ | 5,725,011 | ||||||||
Total distributable earnings (loss) | (14,782,835 | ) | (1,972,458 | ) | (844,649 | ) | (1,587,792 | ) | ||||||||
|
| |||||||||||||||
Net assets, at value | $ | 452,844,052 | $ | 5,002,791 | $ | 1,774,792 | $ | 4,137,219 | ||||||||
|
| |||||||||||||||
Shares outstanding | 17,400,000 | 200,000 | 100,000 | 250,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 26.03 | $ | 25.01 | $ | 17.75 | $ | 16.55 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 285 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2020 (unaudited)
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 7,609,629 | $ | 2,431,390 | $ | 2,277,211 | $ | 23,290,082 | ||||||||
|
| |||||||||||||||
Value – Unaffiliated issuers | $ | 6,512,733 | $ | 2,492,221 | $ | 1,936,973 | $ | 22,626,141 | ||||||||
Cash | 86,917 | 539 | — | 19,132 | ||||||||||||
Foreign currency, at value (cost $-, $1,887, $3,310 and $23,782, respectively) | — | 1,887 | 3,391 | 23,842 | ||||||||||||
Receivables: | ||||||||||||||||
Dividends and interest | 3,544 | 242 | 892 | 27,963 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | — | — | 2,937 | ||||||||||||
|
| |||||||||||||||
Total assets | 6,603,194 | 2,494,889 | 1,941,256 | 22,700,015 | ||||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 87,530 | — | — | — | ||||||||||||
Management fees | 1,069 | 797 | 305 | 1,553 | ||||||||||||
Variation margin on futures contracts | — | — | — | 23 | ||||||||||||
Funds advanced by custodian | — | — | 1,155 | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 88,599 | 797 | 1,460 | 1,576 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 6,514,595 | $ | 2,494,092 | $ | 1,939,796 | $ | 22,698,439 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 6,721,507 | $ | 2,482,525 | $ | 2,441,624 | $ | 27,283,362 | ||||||||
Total distributable earnings (loss) | (206,912 | ) | 11,567 | (501,828 | ) | (4,584,923 | ) | |||||||||
|
| |||||||||||||||
Net assets, at value | $ | 6,514,595 | $ | 2,494,092 | $ | 1,939,796 | $ | 22,698,439 | ||||||||
|
| |||||||||||||||
Shares outstanding | 300,000 | 100,000 | 100,000 | 1,000,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 21.72 | $ | 24.94 | $ | 19.40 | $ | 22.70 | ||||||||
|
|
286 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2020 (unaudited)
Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost – Unaffiliated issuers | $ | 16,754,277 | $ | 14,527,298 | $ | 97,112,679 | ||||||
Cost – Non-controlled affiliates (Note 3c) | — | — | 49,020 | |||||||||
|
| |||||||||||
Value – Unaffiliated issuers+ | $ | 16,712,856 | $ | 18,461,997 | $ | 77,115,488 | ||||||
Value – Non-controlled affiliates (Note 3c) | — | — | 49,020 | |||||||||
Cash | — | 7,640 | 4,510 | |||||||||
Foreign currency, at value (cost $39,558, $136,525 and $77,354, respectively) | 39,709 | 136,753 | 78,482 | |||||||||
Receivables: | ||||||||||||
Dividends and interest | 226,481 | 32,356 | 139,214 | |||||||||
Variation margin on futures contracts | 1,094 | 724 | — | |||||||||
Deposits with brokers for: | ||||||||||||
Futures contracts | 20,928 | 9,680 | 25,206 | |||||||||
|
| |||||||||||
Total assets | 17,001,068 | 18,649,150 | 77,411,920 | |||||||||
|
| |||||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 38,561 | — | 1,966 | |||||||||
Management fees | 1,441 | 2,905 | 5,869 | |||||||||
Variation margin on futures contracts | — | — | 1,142 | |||||||||
Funds advanced by custodian | 40,946 | — | — | |||||||||
Payable upon return of securities loaned | — | — | 49,020 | |||||||||
|
| |||||||||||
Total liabilities | 80,948 | 2,905 | 57,997 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 16,920,120 | $ | 18,646,245 | $ | 77,353,923 | ||||||
|
| |||||||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 15,166,526 | $ | 14,383,078 | $ | 101,016,674 | ||||||
Total distributable earnings (loss) | 1,753,594 | 4,263,167 | (23,662,751 | ) | ||||||||
|
| |||||||||||
Net assets, at value | $ | 16,920,120 | $ | 18,646,245 | $ | 77,353,923 | ||||||
|
| |||||||||||
Shares outstanding | 600,000 | 600,000 | 4,000,000 | |||||||||
|
| |||||||||||
Net asset value per share | $ | 28.20 | $ | 31.08 | $ | 19.34 | ||||||
|
|
+Includes securities loaned | — | — | 46,380 |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 287 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2020 (unaudited)
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 278,508 | $ | 189,682 | $ | 1,191,307 | $ | 86,000 | ||||||||
Interest from securities loaned: (Note 1d) | ||||||||||||||||
Unaffiliated issuers (net of fees and rebates) | (3 | ) | — | — | — | |||||||||||
Non-Controlled affiliates (Note 3c) | 44 | — | — | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 278,549 | 189,682 | 1,191,307 | 86,000 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 16,577 | 5,867 | 104,399 | 2,616 | ||||||||||||
|
| |||||||||||||||
Total expenses | 16,577 | 5,867 | 104,399 | 2,616 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (85 | ) | — | — | — | |||||||||||
|
| |||||||||||||||
Net investment income | 262,057 | 183,815 | 1,086,908 | 83,384 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (105,492 | ) | (260,853 | ) | (20,719,454 | ) | (69,016 | ) | ||||||||
In-kind redemptions | — | 450,803 | — | — | ||||||||||||
Foreign currency transactions | (1,973 | ) | (990 | ) | (203,322 | ) | 1,587 | |||||||||
Futures contracts | — | — | 134,052 | — | ||||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (107,465 | ) | 188,960 | (20,788,724 | ) | (67,429 | ) | |||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 4,154,405 | 3,208,729 | 43,521,258 | 1,281,048 | ||||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 1,480 | 1,795 | 125,066 | (65 | ) | |||||||||||
Futures contracts | — | — | (47,735 | ) | — | |||||||||||
Change in deferred taxes on unrealized depreciation | (11,137 | ) | — | — | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | 4,144,748 | 3,210,524 | 43,598,589 | 1,280,983 | ||||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | 4,037,283 | 3,399,484 | 22,809,865 | 1,213,554 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 4,299,340 | $ | 3,583,299 | $ | 23,896,773 | $ | 1,296,938 | ||||||||
|
|
aForeign taxes withheld on dividends | $ | 32,402 | $ | 3,756 | $ | 67,599 | $ | 15,176 | ||||||||
|
|
288 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2020 (unaudited)
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 893,164 | $ | 2,994,740 | $ | 62,322 | $ | 74,793 | ||||||||
Non-cash dividends | — | 252,040 | 4,998 | 15,150 | ||||||||||||
Interest from securities loaned: (Note 1d) | ||||||||||||||||
Unaffiliated issuers (net of fees and rebates) | (13 | ) | — | — | — | |||||||||||
Non-Controlled affiliates (Note 3c) | 364 | 1,868 | — | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 893,515 | 3,248,648 | 67,320 | 89,943 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 51,409 | 90,826 | 1,928 | 3,076 | ||||||||||||
Other | — | 236 | 28 | — | ||||||||||||
|
| |||||||||||||||
Total expenses | 51,409 | 91,062 | 1,956 | 3,076 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (190 | ) | (86 | ) | (6 | ) | — | |||||||||
|
| |||||||||||||||
Net investment income | 842,296 | 3,157,672 | 65,370 | 86,867 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (565,738 | ) | (1,978,723 | ) | (125,348 | ) | (50,514 | ) | ||||||||
In-kind redemptions | 1,044,767 | 3,784,594 | — | (632,310 | ) | |||||||||||
Foreign currency transactions | (3,191 | ) | 49,641 | 7,060 | 1,039 | |||||||||||
Futures contracts | 5,757 | 156,099 | 14,092 | — | ||||||||||||
Forwards exchange contracts | — | — | (311,460 | ) | — | |||||||||||
|
| |||||||||||||||
Net realized gain (loss) | 481,595 | 2,011,611 | (415,656 | ) | (681,785 | ) | ||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 12,497,222 | 31,599,754 | 863,648 | 1,757,600 | ||||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 8 | 12,719 | 824 | 69 | ||||||||||||
Futures contracts | 1,957 | (65,679 | ) | (5,049 | ) | — | ||||||||||
Forward exchange contracts | — | — | 60,661 | — | ||||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | 12,499,187 | 31,546,794 | 920,084 | 1,757,669 | ||||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | 12,980,782 | 33,558,405 | 504,428 | 1,075,884 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 13,823,078 | $ | 36,716,077 | $ | 569,798 | $ | 1,162,751 | ||||||||
|
|
aForeign taxes withheld on dividends | $ | 73,018 | $ | 336,402 | $ | 8,379 | $ | 15,686 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 289 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2020 (unaudited)
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 164,016 | $ | 379,330 | $ | 55,949 | $ | 47,518 | ||||||||
|
| |||||||||||||||
Total investment income | 164,016 | 379,330 | 55,949 | 47,518 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 2,670 | 7,625 | 9,895 | 1,355 | ||||||||||||
|
| |||||||||||||||
Total expenses | 2,670 | 7,625 | 9,895 | 1,355 | ||||||||||||
|
| |||||||||||||||
Net investment income | 161,346 | 371,705 | 46,054 | 46,163 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (126,837 | ) | (80,302 | ) | (495,468 | ) | (84,212 | ) | ||||||||
Foreign currency transactions | 525 | 85 | (9,204 | ) | (196 | ) | ||||||||||
Futures contracts | — | 3,473 | 8,412 | — | ||||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (126,312 | ) | (76,744 | ) | (496,260 | ) | (84,408 | ) | ||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 1,551,048 | 1,575,323 | 3,761,386 | 558,465 | ||||||||||||
Translation of other assets and liabilities denominated in foreign currencies | (29 | ) | (58 | ) | 74 | 19 | ||||||||||
Futures contracts | — | (5,952 | ) | (1,682 | ) | — | ||||||||||
Change in deferred taxes on unrealized appreciation | — | — | (84,565 | ) | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | 1,551,019 | 1,569,313 | 3,675,213 | 558,484 | ||||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | 1,424,707 | 1,492,569 | 3,178,953 | 474,076 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 1,586,053 | $ | 1,864,274 | $ | 3,225,007 | $ | 520,239 | ||||||||
|
|
aForeign taxes withheld on dividends | $ | 15,442 | $ | — | $ | 15,120 | $ | 8,128 | ||||||||
|
|
290 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2020 (unaudited)
Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 3,693,207 | $ | 41,322 | $ | 22,594 | $ | 34,465 | ||||||||
Non-controlled affiliates (Note 3c) | (246 | ) | — | — | — | |||||||||||
Interest from securities loaned: (Note 1d) | ||||||||||||||||
Unaffiliated issuers (net of fees and rebates) | (105 | ) | — | — | — | |||||||||||
Non-Controlled affiliates (Note 3c) | 571 | — | — | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 3,693,427 | 41,322 | 22,594 | 34,465 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 177,752 | 2,131 | 1,709 | 3,489 | ||||||||||||
Other | 1,382 | — | — | — | ||||||||||||
|
| |||||||||||||||
Total expenses | 179,134 | 2,131 | 1,709 | 3,489 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (441 | ) | (75 | ) | — | — | ||||||||||
|
| |||||||||||||||
Net investment income | 3,514,734 | 39,266 | 20,885 | 30,976 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (2,453,522 | ) | (47,904 | ) | (52,776 | ) | (253,215 | ) | ||||||||
Foreign currency transactions | 70,241 | 1,754 | (2,363 | ) | 199 | |||||||||||
Futures contracts | 575,834 | 12,720 | (1,187 | ) | — | |||||||||||
Forwards exchange contracts | — | (60,247 | ) | — | — | |||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (1,807,447 | ) | (93,677 | ) | (56,326 | ) | (253,016 | ) | ||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 67,011,040 | 821,064 | 303,176 | 632,565 | ||||||||||||
Translation of other assets and liabilities denominated in foreign currencies | (8,289 | ) | (197 | ) | 1,622 | (130 | ) | |||||||||
Futures contracts | 42,109 | 405 | 1,305 | — | ||||||||||||
Forward exchange contracts | — | (33,464 | ) | — | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | 67,044,860 | 787,808 | 306,103 | 632,435 | ||||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | 65,237,413 | 694,131 | 249,777 | 379,419 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 68,752,147 | $ | 733,397 | $ | 270,662 | $ | 410,395 | ||||||||
|
|
aForeign taxes withheld on dividends | $413,248 | $4,588 | $2,320 | $1,075 | ||||||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 291 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2020 (unaudited)
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 471,828 | $ | 42,461 | $ | 25,535 | $ | 50,401 | ||||||||
Non-cash dividends | — | — | 55,586 | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 471,828 | 42,461 | 81,121 | 50,401 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 11,474 | 4,481 | 1,748 | 7,475 | ||||||||||||
Other | — | — | — | 12 | ||||||||||||
|
| |||||||||||||||
Total expenses | 11,474 | 4,481 | 1,748 | 7,487 | ||||||||||||
|
| |||||||||||||||
Net investment income | 460,354 | 37,980 | 79,373 | 42,914 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (186,151 | ) | (862 | ) | (123,680 | ) | (278,277 | ) | ||||||||
In-kind redemptions | 1,040,188 | — | — | — | ||||||||||||
Foreign currency transactions | (7,165 | ) | 6 | (22 | ) | (9,393 | ) | |||||||||
Futures contracts | — | — | — | 7,325 | ||||||||||||
Forwards exchange contracts | — | (56 | ) | — | — | |||||||||||
|
| |||||||||||||||
Net realized gain (loss) | 846,872 | (912 | ) | (123,702 | ) | (280,345 | ) | |||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 1,452,851 | 481,356 | 541,999 | 5,110,031 | ||||||||||||
Translation of other assets and liabilities denominated in foreign currencies | — | 4 | (89 | ) | 7,318 | |||||||||||
Futures contracts | — | — | — | 17,416 | ||||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | 1,452,851 | 481,360 | 541,910 | 5,134,765 | ||||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | 2,299,723 | 480,448 | 418,208 | 4,854,420 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 2,760,077 | $ | 518,428 | $ | 497,581 | $ | 4,897,334 | ||||||||
|
|
aForeign taxes withheld on dividends | $ | 52,425 | $ | 1,446 | $ | 5,516 | $ | 9,842 | ||||||||
|
|
292 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2020 (unaudited)
Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||
Investment income: | ||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||
Unaffiliated issuers | $ | 562,897 | $ | 462,419 | $ | 1,342,070 | ||||||
Income from securities loaned: (Note 1d) | ||||||||||||
Unaffiliated issuers (net of fees and rebates) | — | — | 359 | |||||||||
|
| |||||||||||
Total investment income | 562,897 | 462,419 | 1,342,429 | |||||||||
|
| |||||||||||
Expenses: | ||||||||||||
Management fees (Note 3a) | 15,576 | 16,241 | 36,740 | |||||||||
|
| |||||||||||
Total expenses | 15,576 | 16,241 | 36,740 | |||||||||
|
| |||||||||||
Expenses waived/paid by affiliates (Note 3c) | — | — | (3 | ) | ||||||||
|
| |||||||||||
Net investment income | 547,321 | 446,178 | 1,305,692 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | (211,129 | ) | 15,465 | (1,476,252 | ) | |||||||
In-kind redemptions | 2,126,580 | — | (2,220,792 | ) | ||||||||
Foreign currency transactions | 3,058 | 4,139 | 2,829 | |||||||||
Futures contracts | 62,712 | 25,033 | 107,914 | |||||||||
|
| |||||||||||
Net realized gain (loss) | 1,981,221 | 44,637 | (3,586,301 | ) | ||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 4,277,176 | 4,258,162 | 9,890,265 | |||||||||
Translation of other assets and liabilities denominated in foreign currencies | 4,634 | 324 | 4,470 | |||||||||
Futures contracts | (19,009 | ) | 2,477 | (85,767 | ) | |||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) | 4,262,801 | 4,260,963 | 9,808,968 | |||||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 6,244,022 | 4,305,600 | 6,222,667 | |||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 6,791,343 | $ | 4,751,778 | $ | 7,528,359 | ||||||
|
|
aForeign taxes withheld on dividends | $ | 81,595 | $ | 126,529 | $ | 9,327 | ||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 293 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 262,057 | $ | 395,662 | $ | 183,815 | $ | 468,776 | ||||||||
Net realized gain (loss) | (107,465 | ) | (413,776 | ) | 188,960 | 203,043 | ||||||||||
Net change in unrealized appreciation (depreciation) | 4,144,748 | (2,354,251 | ) | 3,210,524 | (3,514,826 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 4,299,340 | (2,372,365 | ) | 3,583,299 | (2,843,007 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (60,629 | ) | (403,670 | ) | (193,033 | ) | (500,460 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | — | — | 2,703,848 | 3,774,628 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 4,238,711 | (2,776,035 | ) | 6,094,114 | 431,161 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 14,712,036 | 17,488,071 | 7,820,276 | 7,389,115 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 18,950,747 | $ | 14,712,036 | $ | 13,914,390 | $ | 7,820,276 | ||||||||
|
|
294 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 1,086,908 | $ | 2,779,622 | $ | 83,384 | $ | 152,979 | ||||||||
Net realized gain (loss) | (20,788,724 | ) | (6,535,713 | ) | (67,429 | ) | 34,521 | |||||||||
Net change in unrealized appreciation (depreciation) | 43,598,589 | (95,581,334 | ) | 1,280,983 | (1,426,829 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 23,896,773 | (99,337,425 | ) | 1,296,938 | (1,239,329 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (1,850,700 | ) | (1,076,875 | ) | (64,709 | ) | (139,563 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (36,346,096 | ) | 182,535,019 | — | 1,428,015 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (14,300,023 | ) | 82,120,719 | 1,232,229 | 49,123 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 102,699,544 | 20,578,825 | 4,876,019 | 4,826,896 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 88,399,521 | $ | 102,699,544 | $ | 6,108,248 | $ | 4,876,019 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 295 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE China ETF | Franklin FTSE Europe ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 842,296 | $ | 786,891 | $ | 3,157,672 | $ | 2,748,144 | ||||||||
Net realized gain (loss) | 481,595 | (3,851,985 | ) | 2,011,611 | 1,544,533 | |||||||||||
Net change in unrealized appreciation (depreciation) | 12,499,187 | 686,253 | 31,546,794 | (16,683,190 | ) | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 13,823,078 | (2,378,841 | ) | 36,716,077 | (12,390,513 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (84,466 | ) | (787,837 | ) | (1,897,766 | ) | (2,821,950 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (4,904,805 | ) | 8,753,375 | 84,632,603 | 32,209,377 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 8,833,807 | 5,586,697 | 119,450,914 | 16,996,914 | ||||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 48,807,119 | 43,220,422 | 91,356,234 | 74,359,320 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 57,640,926 | $ | 48,807,119 | $ | 210,807,148 | $ | 91,356,234 | ||||||||
|
|
296 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 65,370 | $ | 146,166 | $ | 86,867 | $ | 100,467 | ||||||||
Net realized gain (loss) | (415,656 | ) | 315,995 | (681,785 | ) | (36,345 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 920,084 | (899,755 | ) | 1,757,669 | (2,635,032 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 569,798 | (437,594 | ) | 1,162,751 | (2,570,910 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (29,319 | ) | (294,228 | ) | (51,192 | ) | (86,176 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | — | — | (4,055,531 | ) | 8,972,173 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 540,479 | (731,822 | ) | (2,943,972 | ) | 6,315,087 | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 3,830,985 | 4,562,807 | 8,701,509 | 2,386,422 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 4,371,464 | $ | 3,830,985 | $ | 5,757,537 | $ | 8,701,509 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 297 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 161,346 | $ | 108,392 | $ | 371,705 | $ | 561,766 | ||||||||
Net realized gain (loss) | (126,312 | ) | (95,320 | ) | (76,744 | ) | 347,250 | |||||||||
Net change in unrealized appreciation (depreciation) | 1,551,019 | (983,793 | ) | 1,569,313 | (5,052,670 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,586,053 | (970,721 | ) | 1,864,274 | (4,143,654 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (60,642 | ) | (114,909 | ) | (188,966 | ) | (569,121 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 2,259,040 | 1,127,565 | — | 28,395 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 3,784,451 | 41,935 | 1,675,308 | (4,684,380 | ) | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 4,182,100 | 4,140,165 | 15,433,317 | 20,117,697 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 7,966,551 | $ | 4,182,100 | $ | 17,108,625 | $ | 15,433,317 | ||||||||
|
|
298 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 46,054 | $ | 142,242 | $ | 46,163 | $ | 422,097 | ||||||||
Net realized gain (loss) | (496,260 | ) | (604,754 | ) | (84,408 | ) | (1,684,080 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 3,675,213 | (2,727,721 | ) | 558,484 | (1,387,475 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 3,225,007 | (3,190,233 | ) | 520,239 | (2,649,458 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (60,544 | ) | (83,995 | ) | (60,150 | ) | (414,228 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 186,548 | 5,057,008 | — | (4,705,377 | ) | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 3,351,011 | 1,782,780 | 460,089 | (7,769,063 | ) | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 8,789,954 | 7,007,174 | 2,641,320 | 10,410,383 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 12,140,965 | $ | 8,789,954 | $ | 3,101,409 | $ | 2,641,320 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 299 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 3,514,734 | $ | 5,988,980 | $ | 39,266 | $ | 104,775 | ||||||||
Net realized gain (loss) | (1,807,447 | ) | (93,823 | ) | (93,677 | ) | (1,599,327 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 67,044,860 | (46,840,847 | ) | 787,808 | 1,013,532 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 68,752,147 | (40,945,690 | ) | 733,397 | (481,020 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders | (3,419,075 | ) | (5,496,937 | ) | — | — | ||||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 71,660,324 | 72,087,879 | — | (9,119,221 | ) | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 136,993,396 | 25,645,252 | 733,397 | (9,600,241 | ) | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 315,850,656 | 290,205,404 | 4,269,394 | 13,869,635 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 452,844,052 | $ | 315,850,656 | $ | 5,002,791 | $ | 4,269,394 | ||||||||
|
|
300 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 20,885 | $ | 77,224 | $ | 30,976 | $ | 128,515 | ||||||||
Net realized gain (loss) | (56,326 | ) | (60,001 | ) | (253,016 | ) | (297,482 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 306,103 | (1,047,301 | ) | 632,435 | (1,247,853 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 270,662 | (1,030,078 | ) | 410,395 | (1,416,820 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (16,238 | ) | (90,264 | ) | (32,481 | ) | (134,178 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | — | — | 888,685 | — | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 254,424 | (1,120,342 | ) | 1,266,599 | (1,550,998 | ) | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 1,520,368 | 2,640,710 | 2,870,620 | 4,421,618 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 1,774,792 | $ | 1,520,368 | $ | 4,137,219 | $ | 2,870,620 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 301 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 460,354 | $ | 1,025,691 | $ | 37,980 | $ | 89,405 | ||||||||
Net realized gain (loss) | 846,872 | (217,317 | ) | (912 | ) | (62,860 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 1,452,851 | (3,085,622 | ) | 481,360 | (717,507 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 2,760,077 | (2,277,248 | ) | 518,428 | (690,962 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | — | (1,112,109 | ) | (39,413 | ) | (82,840 | ) | |||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (9,485,177 | ) | 4,946,037 | — | — | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (6,725,100 | ) | 1,556,680 | 479,015 | (773,802 | ) | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 13,239,695 | 11,683,015 | 2,015,077 | 2,788,879 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 6,514,595 | $ | 13,239,695 | $ | 2,494,092 | $ | 2,015,077 | ||||||||
|
|
302 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 79,373 | $ | 265,425 | $ | 42,914 | $ | 262,645 | ||||||||
Net realized gain (loss) | (123,702 | ) | (85,547 | ) | (280,345 | ) | (2,031,597 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 541,910 | (1,090,870 | ) | 5,134,765 | (1,659,724 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 497,581 | (910,992 | ) | 4,897,334 | (3,428,676 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (39,089 | ) | (269,501 | ) | — | (322,884 | ) | |||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | — | — | 6,238,834 | (1,634,635 | ) | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 458,492 | (1,180,493 | ) | 11,136,168 | (5,386,195 | ) | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 1,481,304 | 2,661,797 | 11,562,271 | 16,948,466 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 1,939,796 | $ | 1,481,304 | $ | 22,698,439 | $ | 11,562,271 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 303 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 547,321 | $ | 433,186 | $ | 446,178 | $ | 531,999 | ||||||||
Net realized gain (loss) | 1,981,221 | (145,095 | ) | 44,637 | (67,049 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | 4,262,801 | (4,242,900 | ) | 4,260,963 | (872,010 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 6,791,343 | (3,954,809 | ) | 4,751,778 | (407,060 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders: | (896,879 | ) | (65,702 | ) | (11,363 | ) | (520,726 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (23,186,877 | ) | 35,847,030 | — | — | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (17,292,413 | ) | 31,826,519 | 4,740,415 | (927,786 | ) | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of period | 34,212,533 | 2,386,014 | 13,905,830 | 14,833,616 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 16,920,120 | $ | 34,212,533 | $ | 18,646,245 | $ | 13,905,830 | ||||||||
|
|
304 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin FTSE United Kingdom ETF | ||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020 | |||||||
Increase (decrease) in net assets: |
| |||||||
Operations: |
| |||||||
Net investment income | $ | 1,305,692 | $ | 1,830,118 | ||||
Net realized gain (loss) | (3,586,301 | ) | (1,808,811 | ) | ||||
Net change in unrealized appreciation (depreciation) | 9,808,968 | (29,641,625 | ) | |||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 7,528,359 | (29,620,318 | ) | |||||
|
| |||||||
Distributions to shareholders: | (1,290,290 | ) | (1,337,064 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | (18,508,330 | ) | 91,505,345 | |||||
|
| |||||||
Net increase (decrease) in net assets | (12,270,261 | ) | 60,547,963 | |||||
Net assets: |
| |||||||
Beginning of period | 89,624,184 | 29,076,221 | ||||||
|
| |||||||
End of period | $ | 77,353,923 | $ | 89,624,184 | ||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 305 |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-four separate funds, twenty-three of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of each Fund’s corresponding underlying index.
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Funds’ pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Funds’ net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
306 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives
franklintempleton.com | Semiannual Report | 307 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
Certain or all Funds entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.
See Note 8 regarding other derivative information.
d. Securities Lending
Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund
managed by Franklin Advisers, Inc., an affiliate of the Funds. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.
e. Income and Deferred Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2020, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
f. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are
308 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
f. Security Transactions, Investment Income, Expenses and Distributions (continued)
determined on a specific identification basis. Interest Income and estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that
incurred the expense. These expenses are paid by the Funds or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
g. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
h. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
franklintempleton.com | Semiannual Report | 309 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
At September 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin FTSE Australia ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 250,000 | $ | 4,935,974 | 250,000 | $ | 6,380,606 | ||||||||||||||
Shares redeemed | (100,000 | ) | (2,232,126 | ) | (100,000 | ) | (2,605,978 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 150,000 | $ | 2,703,848 | 150,000 | $ | 3,774,628 | ||||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Brazil ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 6,800,000 | $ | 194,991,129 | ||||||||||||||
Shares redeemed | (1,900,000 | ) | (36,346,096 | ) | (500,000 | ) | (12,456,110 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (1,900,000 | ) | $ | (36,346,096 | ) | 6,300,000 | $ | 182,535,019 | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Canada ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 100,000 | $ | 2,645,197 | ||||||||||||||
Shares redeemed | — | — | (50,000 | ) | (1,217,182 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | 50,000 | $ | 1,428,015 | ||||||||||||||
|
| |||||||||||||||||||
Franklin FTSE China ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 600,000 | $ | 13,290,874 | ||||||||||||||
Shares redeemed | (200,000 | ) | (4,904,805 | ) | (200,000 | ) | (4,537,499 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (200,000 | ) | $ | (4,904,805 | ) | 400,000 | $ | 8,753,375 | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Europe ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 5,200,000 | $ | 101,611,433 | 3,600,000 | $ | 79,020,679 | ||||||||||||||
Shares redeemed | (800,000 | ) | (16,978,830 | ) | (2,000,000 | ) | (46,811,302 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 4,400,000 | $ | 84,632,603 | 1,600,000 | $ | 32,209,377 | ||||||||||||||
|
|
310 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin FTSE France ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 350,000 | $ | 8,972,173 | ||||||||||||||
Shares redeemed | (200,000 | ) | (4,055,531 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (200,000 | ) | $ | (4,055,531 | ) | 350,000 | $ | 8,972,173 | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Germany ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,000 | $ | 2,259,040 | 50,000 | $ | 1,127,565 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 100,000 | $ | 2,259,040 | 50,000 | $ | 1,127,565 | ||||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Hong Kong ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 300,000 | $ | 7,218,089 | ||||||||||||||
Shares redeemed | — | — | (300,000 | ) | (7,189,694 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | — | $ | 28,395 | ||||||||||||||
|
| |||||||||||||||||||
Franklin FTSE India ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 50,000 | $ | 1,078,399 | 400,000 | $ | 8,528,590 | ||||||||||||||
Shares redeemed | (50,000 | ) | (891,851 | ) | (150,000 | ) | (3,471,582 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | 186,548 | 250,000 | $ | 5,057,008 | ||||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Italy ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 50,000 | $ | 1,118,853 | ||||||||||||||
Shares redeemed | — | — | (350,000 | ) | (5,824,230 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | (300,000 | ) | $ | (4,705,377 | ) | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Japan ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 3,000,000 | $ | 71,660,324 | 7,800,000 | $ | 202,804,002 | ||||||||||||||
Shares redeemed | — | — | (5,400,000 | ) | (130,716,123 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 3,000,000 | $ | 71,660,324 | 2,400,000 | $ | 72,087,879 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 311 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares redeemed | — | $ | — | (400,000 | ) | $ | (9,119,221 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | (400,000 | ) | $ | (9,119,221 | ) | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Mexico ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 50,000 | $ | 888,685 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 50,000 | $ | 888,685 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Russia ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 200,000 | $ | 4,946,037 | ||||||||||||||
Shares redeemed | (400,000 | ) | (9,485,177 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (400,000 | ) | $ | (9,485,177 | ) | 200,000 | $ | 4,946,037 | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE South Korea ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 300,000 | $ | 6,238,834 | 100,000 | $ | 2,002,593 | ||||||||||||||
Shares redeemed | — | — | (200,000 | ) | (3,637,228 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 300,000 | $ | 6,238,834 | (100,000 | ) | $ | (1,634,635 | ) | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE Switzerland ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 1,400,000 | $ | 37,960,491 | ||||||||||||||
Shares redeemed | (800,000 | ) | (23,186,877 | ) | (100,000 | ) | (2,113,461 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (800,000 | ) | $ | (23,186,877 | ) | 1,300,000 | $ | 35,847,030 | ||||||||||||
|
| |||||||||||||||||||
Franklin FTSE United Kingdom ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,000 | $ | 1,915,121 | 4,800,000 | $ | 111,979,995 | ||||||||||||||
Shares redeemed | (1,100,000 | ) | (20,423,451 | ) | (1,000,000 | ) | (20,474,650 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (1,000,000 | ) | $ | (18,508,330 | ) | 3,800,000 | $ | 91,505,345 | ||||||||||||
|
|
312 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc (Advisers) | Investment manager | |
Franklin Advisory Services, LLC (FASL) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
a. Management Fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fee and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fees are based on the daily net assets of each of the Funds as follows:
Annualized Fee Rate | ||
Franklin FTSE Asia ex Japan ETF | 0.19% | |
Franklin FTSE Australia ETF | 0.09% | |
Franklin FTSE Brazil ETF | 0.19% | |
Franklin FTSE Canada ETF | 0.09% | |
Franklin FTSE China ETF | 0.19% | |
Franklin FTSE Europe ETF | 0.09% | |
Franklin FTSE Europe Hedged ETF | 0.09% | |
Franklin FTSE France ETF | 0.09% | |
Franklin FTSE Germany ETF | 0.09% | |
Franklin FTSE Hong Kong ETF | 0.09% | |
Franklin FTSE India ETF | 0.19% | |
Franklin FTSE Italy ETF | 0.09% | |
Franklin FTSE Japan ETF | 0.09% | |
Franklin FTSE Japan Hedged ETF | 0.09% | |
Franklin FTSE Latin America ETF | 0.19% | |
Franklin FTSE Mexico ETF | 0.19% | |
Franklin FTSE Russia ETF | 0.19% | |
Franklin FTSE Saudi Arabia ETF | 0.39% | |
Franklin FTSE South Africa ETF | 0.19% | |
Franklin FTSE South Korea ETF | 0.09% | |
Franklin FTSE Switzerland ETF | 0.09% | |
Franklin FTSE Taiwan ETF | 0.19% | |
Franklin FTSE United Kingdom ETF | 0.09% |
franklintempleton.com | Semiannual Report | 313 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Investments in Affiliated Management Investment Companies
Certain or all Funds invest in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended September 30, 2020, investments in affiliated management investment companies were as follows:
Value at Beginning of Period | Purchases | Sales | Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Value at End of Period | Number of Shares Held at End of Period | Investment Income | |||||||||||||||||||||||||
Franklin FTSE Asia ex Japan ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | | Income from Securities loaned | | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | 5,040 | $ | 284,680 | $ | (278,070 | ) | $ | — | $ | — | $ | 11,650 | 11,650 | $ | 44 | ||||||||||||||||
Franklin FTSE China ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | Income from Securities loaned | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | 29,400 | $ | 4,781,670 | $ | (4,555,310 | ) | $ | — | $ | — | $ | 255,760 | 255,760 | $ | 364 | ||||||||||||||||
Franklin FTSE Europe ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | | Income from Securities loaned | | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 405,745 | $ | (405,745 | ) | $ | — | $ | — | $ | — | — | $ | 1,868 | ||||||||||||||||
Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | | Dividend Income | | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | 1 | $ | 58,118 | $ | (46,691 | ) | $ | — | $ | — | $ | 11,428 | 11,428 | $ | — | ||||||||||||||||
Franklin FTSE Japan ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | | Dividend Income | | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | 124,941 | $ | 4,129,441 | $ | (3,913,740 | ) | $ | — | $ | — | $ | 340,642 | 340,642 | $ | — | ||||||||||||||||
Non-Controlled Affiliates | Income from Securities loaned | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 794,570 | $ | (794,570 | ) | $ | — | $ | — | $ | — | — | $ | 571 | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Total Affiliated Securities | $ | 124,941 | $ | 4,924,011 | $ | (4,708,310 | ) | $ | — | $ | — | $ | 340,642 | 340,642 | $ | 571 | ||||||||||||||||
|
|
314 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
c. Investments in Affiliated Management Investment Companies (continued)
Value at Beginning of Period | Purchases | Sales | Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Value at End of Period | Number of Shares Held at End of Period | Investment Income | |||||||||||||||||||||||||
Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | | Dividend Income | | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 88,139 | $ | (38,190 | ) | $ | — | $ | — | $ | 49,950 | 49,950 | $ | — | ||||||||||||||||
Franklin FTSE United Kingdom ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | | Income from securities loaned | | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.00% | $ | — | $ | 78,690 | $ | (29,670 | ) | $ | — | $ | — | $ | 49,020 | 49,020 | $ | 359 |
d. Other Affiliated Transactions
At September 30, 2020, the shares of the Funds were owned by the following entities:
Funds | Shares | Percentage of Outstanding Sharesa | ||||||
Franklin FTSE Europe ETF | ||||||||
Franklin Conservative Allocation Fund | 503,218 | 5.5% | ||||||
Franklin Moderate Allocation Fund | 1,241,021 | 13.5% | ||||||
Franklin Growth Allocation Fund | 1,188,362 | 12.9% | ||||||
Franklin LifeSmart™ 2020 – 2055 Retirement Target Funds | 557,195 | 6.1% | ||||||
Franklin 529 Portfolios | 5,203,325 | 56.6% | ||||||
|
| |||||||
8,693,121 | 94.5% | |||||||
|
| |||||||
Franklin FTSE Taiwan ETF | ||||||||
Franklin Resources Inc. | 65,000 | 10.8% | ||||||
|
| |||||||
Franklin FTSE Europe Hedged ETF | ||||||||
Franklin Resources Inc | 30,000 | 15.0% | ||||||
|
| |||||||
Franklin FTSE Japan ETF | ||||||||
Franklin 529 Portfolios | 2,326,811 | 13.4% | ||||||
|
| |||||||
Franklin FTSE Japan Hedge ETF | ||||||||
Franklin Resources Inc | 75,000 | 37.5% | ||||||
|
| |||||||
Franklin FTSE Latin America ETF | ||||||||
Franklin Resource Inc. | 26,000 | 26.0% | ||||||
|
| |||||||
Franklin FTSE Russia ETF | ||||||||
Franklin Resources Inc. | 20,000 | 6.7% | ||||||
|
| |||||||
Franklin FTSE Saudi Arabia ETF | ||||||||
Franklin Resources Inc. | 46,000 | 46.0% | ||||||
|
| |||||||
Franklin FTSE South Africa ETF | ||||||||
Franklin Resources Inc. | 31,000 | 31.0% | ||||||
|
| |||||||
Franklin FTSE United Kingdom ETF | ||||||||
Franklin Managed Income Fund | 2,000,000 | 50.0% | ||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
franklintempleton.com | Semiannual Report | 315 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. At March 31, 2020, the capital loss carryforwards were as follows:
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 430,651 | $ | 66,544 | $ | 1,261,450 | $ | 74,271 | ||||||||
Short term | 174,730 | 28,847 | 14,433,121 | 40,746 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 605,381 | $ | 95,391 | $ | 15,694,571 | $ | 115,017 | ||||||||
|
| |||||||||||||||
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 3,409,806 | $ | 694,903 | $ | 141,696 | $ | 25,552 | ||||||||
Short term | 634,115 | 202,195 | 275,648 | 19,947 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 4,043,921 | $ | 897,098 | $ | 417,344 | $ | 45,499 | ||||||||
|
| |||||||||||||||
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 69,418 | $ | 45,269 | $ | 531,381 | $ | 159,490 | ||||||||
Short term | 27,546 | 68,066 | — | 12,639 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 96,964 | $ | 113,335 | $ | 531,381 | $ | 172,129 | ||||||||
|
| |||||||||||||||
Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 1,925,069 | $ | 566,970 | $ | 33,641 | $ | 289,134 | ||||||||
Short term | 1,768,589 | 923,873 | 9,886 | 53,017 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 3,693,658 | $ | 1,490,843 | $ | 43,527 | $ | 342,151 | ||||||||
|
| |||||||||||||||
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 158,259 | $ | 42,547 | $ | 63,669 | $ | 1,672,354 | ||||||||
Short term | 56,094 | 15,417 | 25,690 | 906,331 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 214,353 | $ | 57,964 | $ | 89,359 | $ | 2,578,685 | ||||||||
|
|
316 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 36,215 | $ | 54,844 | $ | 395,355 | ||||||||||
Short term | 163,488 | 44,305 | 164,474 | |||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 199,703 | $ | 99,149 | $ | 559,829 | ||||||||||
|
|
For tax purposes, the Funds may elect to defer any portion of a post-October capital loss or late-year ordinary loss to the first day of the following fiscal year. At March 31, 2020, the deferred losses were as follows:
Franklin FTSE Russia ETF | Franklin FTSE South Korea ETF | |||||||
Late-year ordinary losses | $ | (63,961 | ) | $ | 636 |
At September 30, 2020, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Cost of investments | $ | 18,342,378 | $ | 14,634,853 | $ | 138,266,801 | $ | 6,324,195 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 3,877,678 | $ | 1,154,833 | $ | 2,810,204 | $ | 847,413 | ||||||||
Unrealized depreciation | (3,278,794 | ) | (1,909,548 | ) | (53,674,941 | ) | (1,067,803 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 598,884 | $ | (754,715 | ) | $ | (50,864,737 | ) | $ | (220,390 | ) | |||||
|
| |||||||||||||||
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Cost of investments | $ | 47,534,657 | $ | 201,690,175 | $ | 4,921,844 | $ | 6,769,283 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 15,160,138 | $ | 26,053,310 | $ | 597,034 | $ | 290137 | ||||||||
Unrealized depreciation | (5,015,098 | ) | (17,685,256 | ) | (1,172,166 | ) | (1,303,017 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 10,145,040 | $ | 8,368,054 | $ | (575,132 | ) | $ | (1,012,880 | ) | ||||||
|
| |||||||||||||||
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Cost of investments | $ | 7,914,280 | $ | 18,713,220 | $ | 11,121,725 | $ | 3,422,976 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 747,003 | $ | 1,400,782 | $ | 2,121,642 | $ | 375,674 | ||||||||
Unrealized depreciation | (698,406 | ) | (3,131,378 | ) | (1,022,468 | ) | (699,740 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 48,597 | $ | (1,730,596 | ) | $ | 1,099,174 | $ | (324,066 | ) | ||||||
|
|
franklintempleton.com | Semiannual Report | 317 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
Franklin FTSE Japan ETF | Franklin FTSE | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Cost of investments | $ | 461,633,771 | $ | 5,333,854 | $ | 2,513,429 | $ | 5,083,152 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 44,846,524 | $ | 681,463 | $ | 135,910 | $ | 68,362 | ||||||||
Unrealized depreciation | (57,330,541 | ) | (1,032,065 | ) | (875,963 | ) | (1,017,333 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (12,484,017 | ) | $ | (350,602 | ) | $ | (740,053 | ) | $ | (948,971 | ) | ||||
|
| |||||||||||||||
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Cost of investments | $ | 7,609,629 | $ | 2,431,390 | $ | 2,277,211 | $ | 23,290,082 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 277,622 | $ | 222,473 | $ | 316,935 | $ | 2,517,922 | ||||||||
Unrealized depreciation | (1,374,518 | ) | (161,642 | ) | (657,173 | ) | (3,181,863 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (1,096,896 | ) | $ | 60,831 | $ | (340,238 | ) | $ | (663,941 | ) | |||||
|
| |||||||||||||||
Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||||||
Cost of investments | $ | 16,754,277 | $ | 14,527,298 | $ | 97,161,699 | ||||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 962,493 | $ | 4,558,201 | $ | 3,503,045 | ||||||||||
Unrealized depreciation | (1,003,914 | ) | (623,502 | ) | (23,500,236 | ) | ||||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (41,421 | ) | $ | 3,934,699 | $ | (19,997,191 | ) | ||||||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of foreign currency transactions, financial futures transactions, passive foreign investment company shares and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2020, were as follows:
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Purchases | $ | 1,212,008 | $ | 646,545 | $ | 5,258,617 | $ | 160,073 | ||||||||
Sales | $ | 985,408 | $ | 677,489 | $ | 43,088,376 | $ | 131,999 | ||||||||
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Purchases | $ | 5,306,501 | $ | 107,838,121 | $ | 268,516 | $ | 155,325 | ||||||||
Sales | $ | 5,224,537 | $ | 21,959,868 | $ | 419,377 | $ | 107,139 |
318 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions (continued)
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Purchases | $ | 301,198 | $ | 1,891,325 | $ | 2,111,067 | $ | 222,637 | ||||||||
Sales | $ | 198,024 | $ | 1,713,208 | $ | 1,913,089 | $ | 230,640 | ||||||||
Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Purchases | $ | 16,679,881 | $ | 224,421 | $ | 110,472 | $ | 415,084 | ||||||||
Sales | $ | 14,114,686 | $ | 217,276 | $ | 99,793 | $ | 414,880 | ||||||||
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Purchases | $ | 1,328,716 | $ | 312,194 | $ | 165,670 | $ | 7,125,708 | ||||||||
Sales | $ | 809,166 | $ | 315,493 | $ | 181,131 | $ | 690,721 | ||||||||
Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||||||
Purchases | $ | 1,263,172 | $ | 1,566,731 | $ | 2,788,100 | ||||||||||
Sales | $ | 1,672,512 | $ | 1,239,668 | $ | 2,206,789 |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2020, were as follows:
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Cost of Securities Received | $ | — | $ | 4,931,288 | $ | — | $ | — | ||||||||
Value of Securities Delivered | $ | — | $ | 2,230,275 | $ | — | $ | — | ||||||||
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Cost of Securities Received | $ | — | $ | 101,027,432 | $ | — | $ | — | ||||||||
Value of Securities Delivered | $ | 4,347,962 | $ | 16,797,941 | $ | — | $ | 4,050,708 | ||||||||
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Cost of Securities Received | $ | 2,255,700 | $ | — | $ | — | $ | — | ||||||||
Value of Securities Delivered | $ | — | $ | — | $ | — | $ | — |
franklintempleton.com | Semiannual Report | 319 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions (continued)
Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Cost of Securities Received | $ | 70,326,775 | $ | — | $ | — | $ | 888,730 | ||||||||
Value of Securities Delivered | $ | — | $ | — | $ | — | $ | — | ||||||||
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Cost of Securities Received | $ | — | $ | — | $ | — | $ | — | ||||||||
Value of Securities Delivered | $ | 9,462,392 | $ | — | $ | — | $ | — | ||||||||
Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||||||
Cost of Securities Received | $ | — | $ | — | $ | 1,908,904 | ||||||||||
Value of Securities Delivered | $ | 22,984,869 | $ | — | $ | 20,286,730 |
At September 30, 2020, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
Franklin FTSE Asia ex Japan ETF | Franklin FTSE China ETF | Franklin FTSE United Kingdom ETF | ||||||||||
Securities lending transactionsa: | ||||||||||||
Equity investmentsb | $ | 11,650 | $ | 188,560 | $ | 49,020 | ||||||
|
|
aThe agreements can be terminated at any time.
bThe gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statements of Assets and Liabilities.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.
The United States and other nations have imposed and could impose additional sanctions on certain issuers in Russia due to regional conflicts. These sanctions could result in the devaluation of Russia’s currency, a downgrade in Russian issuers’ credit ratings, or a decline in the value and liquidity of Russian stocks or other securities. Such sanctions could also adversely affect Russia’s economy. Certain or all Funds may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, if the Fund holds the securities of an issuer that is subject to such sanctions, an immediate freeze of that issuer’s securities could result, impairing the ability of the Fund to buy, sell, receive or deliver those securities. There is also the risk that countermeasures could be taken by Russia’s government, which could involve the seizure of the Fund’s assets. These risks could affect the value of the Funds’ portfolio. While the Funds hold securities of certain issuers recently impacted by the sanctions, existing investments do not presently violate the applicable terms and conditions of the sanctions. The sanctions currently do not affect the Funds’ ability to sell these securities. At September 30, 2020, Franklin FTSE Russia ETF had 99.9% of its net assets invested in Russia. The remaining Funds in the Trust did not have significant investment in Russia.
320 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
7. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
8. Other Derivative Information
At September 30, 2020, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
Franklin FTSE Brazil ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 57,168 | a | |||||
|
|
|
| |||||||||
Totals | $ | — | $ | 57,168 | ||||||||
|
|
|
| |||||||||
Franklin FTSE China ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 1,957 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 1,957 | $ | — | ||||||||
|
|
|
| |||||||||
Franklin FTSE Europe ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 29,156 | a | |||||
|
|
|
| |||||||||
Totals | $ | — | $ | 29,156 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Europe Hedged ETF | ||||||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 111,610 | Unrealized depreciation on OTC forward exchange contracts | $ | 98 | ||||||
Equity contracts | Variation margin on futures contracts | — | Variation margin on futures contracts | 1,496 | a | |||||||
|
|
|
| |||||||||
Totals | $ | 111,610 | $ | 1,594 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Hong Kong ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 284 | a | |||||
|
|
|
| |||||||||
Totals | $ | — | $ | 284 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Japan ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 20,588 | a | |||||
|
|
|
| |||||||||
Totals | $ | — | $ | 20,588 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Japan Hedged ETF | ||||||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 19 | Unrealized depreciation on OTC forward exchange contracts | $ | 22,549 | ||||||
Equity contracts | Variation margin on futures contracts | 228 | a | Variation margin on futures contracts | — | |||||||
|
|
|
| |||||||||
Totals | $ | 247 | $ | 22,549 | ||||||||
|
|
|
|
franklintempleton.com | Semiannual Report | 321 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
Asset Derivatives | Liability Derivatives | |||||||||||
Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
Franklin FTSE South Korea ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 369 | a | |||||
|
|
|
| |||||||||
Totals | $ | — | $ | 369 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Switzerland ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 92 | a | |||||
|
|
|
| |||||||||
Totals | $ | — | $ | 92 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Taiwan ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 2,477 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 2,477 | $ | — | ||||||||
|
|
|
| |||||||||
Franklin FTSE United Kingdom ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | 8,497 | a | |||||
|
|
|
| |||||||||
Totals | $ | — | $ | 8,497 | ||||||||
|
|
|
|
aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
For the period ended September 30, 2020, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
Franklin FTSE Brazil ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 134,052 | Futures contracts | $ | (47,735 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 134,052 | $ | (47,735 | ) | |||||||
|
|
|
| |||||||||
Franklin FTSE China ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 5,757 | Futures contracts | $ | 1,957 | ||||||
|
|
|
| |||||||||
Totals | $ | 5,757 | $ | 1,957 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Europe ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 156,099 | Futures contracts | $ | (65,679 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 156,099 | $ | (65,679 | ) | |||||||
|
|
|
|
322 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
Franklin FTSE Europe Hedged ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity contracts | Futures contracts | $ | 14,092 | Futures contracts | $ | (5,049 | ) | |||||
Forward exchange contracts | (311,460 | ) | Translation of other assets and liabilities denominated in foreign currencies | 60,661 | ||||||||
|
|
|
| |||||||||
Totals | $ | (297,368 | ) | $ | 55,612 | |||||||
|
|
|
| |||||||||
Franklin FTSE Hong Kong ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity contracts | Futures contracts | $ | 3,473 | Futures contracts | $ | (5,952 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 3,473 | $ | (5,952 | ) | |||||||
|
|
|
| |||||||||
Franklin FTSE India ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity contracts | Futures contracts | $ | 8,412 | Futures contracts | $ | (1,682 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 8,412 | $ | (1,682 | ) | |||||||
|
|
|
| |||||||||
Franklin FTSE Japan ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 575,834 | Futures contracts | $ | 42,109 | ||||||
|
|
|
| |||||||||
Totals | $ | 575,834 | $ | 42,109 | ||||||||
|
|
|
| |||||||||
Franklin FTSE Japan Hedged ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 12,720 | Futures contracts | $ | 405 | ||||||
Forward exchange contracts | (60,247 | ) | Translation of other assets and liabilities denominated in foreign currencies | (33,464 | ) | |||||||
|
|
|
| |||||||||
Totals | $ | (47,527 | ) | $ | (33,059 | ) | ||||||
|
|
|
| |||||||||
Franklin FTSE Latin America ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | (1,187 | ) | Futures contracts | $ | 1,305 | |||||
|
|
|
| |||||||||
Totals | $ | (1,187 | ) | $ | 1,305 | |||||||
|
|
|
| |||||||||
Franklin FTSE South Korea ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | (7,325 | ) | Futures contracts | $ | (17,416 | ) | ||||
|
|
|
| |||||||||
Totals | $ | (7,325 | ) | $ | (17,416 | ) | ||||||
|
|
|
|
franklintempleton.com | Semiannual Report | 323 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
Franklin FTSE Switzerland ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 62,712 | Futures contracts | $ | (19,009 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 62,712 | $ | (19,009 | ) | |||||||
|
|
|
| |||||||||
Franklin FTSE Taiwan ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 25,033 | Futures contracts | $ | 2,477 | ||||||
|
|
|
| |||||||||
Totals | $ | 25,033 | $ | 2,477 | ||||||||
|
|
|
| |||||||||
Franklin FTSE United Kingdom ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 107,914 | Futures contracts | $ | (85,767 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 107,914 | $ | (85,767 | ) | |||||||
|
|
|
|
For the period ended September 30, 2020, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
Franklin FTSE Brazil ETF | Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | |||||||||||||
Futures contracts | $ | 562,135 | $ | 137,280 | $ | 686,516 | $ | 43,964 | ||||||||
Foreign exchange contracts | $ | — | $ | — | $ | — | $ | 13,760,939 | ||||||||
Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | |||||||||||||
Futures contracts | $ | 70,211 | $ | 13,399 | $ | 2,684,478 | $ | 66,712 | ||||||||
Foreign exchange contracts | $ | — | $ | — | $ | — | $ | 14,368,755 | ||||||||
Franklin FTSE Latin America ETF | Franklin FTSE South Korea ETF | Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | |||||||||||||
Futures contracts | $ | 798 | $ | 86,698 | $ | 204,200 | $ | 94,224 | ||||||||
Franklin FTSE United Kingdom ETF | ||||||||||||||||
Futures contracts | $ | 414,165 |
324 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
At September 30, 2020, the Funds’ OTC derivative assets and liabilities are as follows:
Gross and Net Amounts of Assets and Liabilities Presented in the Statements of Assets and Liabilities | ||||||||
Assetsa | Liabilitiesa | |||||||
Franklin FTSE Europe Hedged ETF | ||||||||
Foreign exchange contracts | $ | 111,610 | $ | 98 | ||||
|
| |||||||
Franklin FTSE Japan Hedged ETF | ||||||||
Foreign exchange contracts | $ | 19 | $ | 22,549 | ||||
|
|
aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
At September 30, 2020, the Funds’ OTC derivative assets, which may be offset against the Funds’ OTC derivative liabilities and collateral received from the counterparty, are as follows:
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Receiveda | Cash Collateral Receiveda | Net Amount (Not less than zero) | ||||||||||||||||
Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
BOFA | $ | 31,148 | $ | (48 | ) | $ | — | $ | — | $ | 31,100 | |||||||||
DBAB | 35,422 | (9 | ) | — | — | 35,413 | ||||||||||||||
HSBK | 15,230 | (14 | ) | — | — | 15,216 | ||||||||||||||
MSCO | 14,600 | (7 | ) | — | — | 14,593 | ||||||||||||||
UBSW | 15,210 | (20 | ) | — | — | 15,190 | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 111,610 | $ | (98 | ) | $ | — | $ | — | $ | 111,512 | |||||||||
|
|
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero) | ||||||||||||||||
Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
BOFA | $ | 48 | $ | (48 | ) | $ | — | $ | — | $ | — | |||||||||
DBAB | 9 | (9 | ) | — | — | — | ||||||||||||||
HSBK | 14 | (14 | ) | — | — | — | ||||||||||||||
MSCO | 7 | (7 | ) | — | — | — | ||||||||||||||
UBSW | 20 | (20 | ) | — | — | — | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 98 | $ | (98 | ) | $ | — | $ | — | $ | — | |||||||||
|
|
franklintempleton.com | Semiannual Report | 325 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
At September 30, 2020, the Funds’ OTC derivative liabilities, which may be offset against the Funds’ OTC derivative assets and collateral pledged to the counterparty, are as follows:
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Receiveda | Cash Collateral Receiveda | Net Amount (Not less than zero) | ||||||||||||||||
Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
DBAB | $ | 19 | $ | (19 | ) | $ | — | $ | — | $ | — | |||||||||
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
DBAB | 6,640 | (19 | ) | — | — | 6,621 | ||||||||||||||
HSBC | 6,601 | — | — | — | 6,601 | |||||||||||||||
HSBK | 55 | — | — | — | 55 | |||||||||||||||
MSCO | 6,564 | — | — | — | 6,564 | |||||||||||||||
UBSW | 2,689 | — | — | — | 2,689 | |||||||||||||||
|
| |||||||||||||||||||
Total | $ | 22,549 | $ | (19 | ) | $ | — | $ | — | $ | 22,530 | |||||||||
|
|
See Note 1(c) regarding derivative financial instruments.
9. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
326 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
A summary of inputs used as of September 30, 2020, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin FTSE Asia ex Japan ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | ||||||||||||||||
China | $ | 8,617,566 | c | $ | 11,578 | $ | 2,188 | $ | 8,631,332 | |||||||
India | 1,922,516 | — | 592 | 1,923,108 | ||||||||||||
South Korea | 2,433,309 | — | 2,028 | 2,435,337 | ||||||||||||
Other Equity Investments | 5,939,835 | — | — | 5,939,835 | ||||||||||||
Short-Term Investments | 11,650 | — | — | 11,650 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 18,924,876 | $ | 11,578 | $ | 4,808 | $ | 18,941,262 | ||||||||
|
| |||||||||||||||
Franklin FTSE Australia ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 13,880,138 | $ | — | $ | — | $ | 13,880,138 | ||||||||
|
| |||||||||||||||
Franklin FTSE Brazil ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 87,402,064 | $ | — | $ | — | $ | 87,402,064 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 57,168 | $ | — | $ | — | $ | 57,168 | ||||||||
|
| |||||||||||||||
Franklin FTSE Canada ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 6,103,805 | $ | — | $ | — | $ | 6,103,805 | ||||||||
|
| |||||||||||||||
Franklin FTSE China ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | ||||||||||||||||
China | $ | 57,053,974 | $ | 67,423 | $ | 14,586 | $ | 57,135,983 | ||||||||
Other Equity Investments | 355,154 | — | — | 355,154 | ||||||||||||
Short-Term Investments | 188,560 | — | — | 188,560 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 57,597,688 | $ | 67,423 | $ | 14,586 | $ | 57,679,697 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 1,957 | $ | — | $ | — | $ | 1,957 | ||||||||
|
|
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin FTSE Europe ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:b | ||||||||||||||||
Equity Investments:b | ||||||||||||||||
Spain | $ | 7,400,383 | $ | 230,539 | $ | — | $ | 7,630,922 | ||||||||
United Arab Emirates | — | — | — | c | — | |||||||||||
Other Equity Investments | 202,427,307 | — | — | 202,427,307 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 209,827,690 | $ | 230,539 | $ | — | $ | 210,058,229 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 29,156 | $ | — | $ | — | $ | 29,156 | ||||||||
|
| |||||||||||||||
Franklin FTSE Europe Hedged ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | ||||||||||||||||
Spain | $ | 152,252 | $ | 4,697 | $ | — | $ | 156,949 | ||||||||
United Arab Emirates | — | — | — | c | — | |||||||||||
Other Equity Investments | 4,178,334 | — | — | 4,178,334 | ||||||||||||
Short-Term Investments | 11,429 | — | — | 11,429 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 4,342,015 | $ | 4,697 | $ | — | $ | 4,346,712 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 111,610 | $ | — | $ | 111,610 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 98 | $ | — | $ | 98 | ||||||||
Futures Contracts | 1,496 | — | — | 1,496 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 1,496 | $ | 98 | $ | — | $ | 1,594 | ||||||||
|
| |||||||||||||||
Franklin FTSE France ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 5,756,403 | $ | — | $ | — | $ | 5,756,403 | ||||||||
|
| |||||||||||||||
Franklin FTSE Germany ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 7,962,877 | $ | — | $ | — | $ | 7,962,877 | ||||||||
|
| |||||||||||||||
Franklin FTSE Hong Kong ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 16,982,624 | $ | — | $ | — | $ | 16,982,624 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 284 | $ | — | $ | — | $ | 284 | ||||||||
|
|
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin FTSE India ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | ||||||||||||||||
India | $ | 12,216,373 | $ | — | $ | 4,526 | $ | 12,220,899 | ||||||||
|
| |||||||||||||||
Franklin FTSE Italy ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 3,098,910 | $ | — | $ | — | $ | 3,098,910 | ||||||||
|
| |||||||||||||||
Franklin FTSE Japan ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 448,607,295 | $ | 201,816 | $ | — | $ | 448,809,111 | ||||||||
Short-Term Investments | 340,643 | — | — | 340,643 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 448,947,938 | $ | 201,816 | $ | — | $ | 449,149,754 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 20,588 | $ | — | $ | — | $ | 20,588 | ||||||||
|
| |||||||||||||||
Franklin FTSE Japan Hedged ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 4,931,168 | $ | 2,134 | $ | — | $ | 4,933,302 | ||||||||
Short-Term Investments | 49,950 | — | — | 49,950 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 4,981,118 | $ | 2,134 | $ | — | $ | 4,983,252 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 19 | $ | — | $ | 19 | ||||||||
Futures Contracts | 228 | — | — | 228 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 228 | $ | 19 | $ | — | $ | 247 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 22,549 | $ | — | $ | 22,549 | ||||||||
|
| |||||||||||||||
Franklin FTSE Latin America ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 1,773,376 | $ | — | $ | — | $ | 1,773,376 | ||||||||
|
| |||||||||||||||
Franklin FTSE Mexico ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 4,134,181 | $ | — | $ | — | $ | 4,134,181 | ||||||||
|
| |||||||||||||||
Franklin FTSE Russia ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 6,512,733 | $ | — | $ | — | $ | 6,512,733 | ||||||||
|
|
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin FTSE Saudi Arabia ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 2,492,221 | $ | — | $ | — | $ | 2,492,221 | ||||||||
|
| |||||||||||||||
Franklin FTSE South Africa ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 1,936,973 | $ | — | $ | — | $ | 1,936,973 | ||||||||
|
| |||||||||||||||
Franklin FTSE South Korea ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | ||||||||||||||||
South Korea | $ | 22,609,421 | $ | — | $ | 16,720 | $ | 22,626,141 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 369 | $ | — | $ | — | $ | 369 | ||||||||
|
| |||||||||||||||
Franklin FTSE Switzerland ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 16,712,856 | $ | — | $ | — | $ | 16,712,856 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 92 | $ | — | $ | — | $ | 92 | ||||||||
|
| |||||||||||||||
Franklin FTSE Taiwan ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 18,461,997 | $ | — | $ | — | $ | 18,461,997 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 2,477 | $ | — | $ | — | $ | 2,477 | ||||||||
|
| |||||||||||||||
Franklin FTSE United Kingdom ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | ||||||||||||||||
United Arab Emirates | $ | — | $ | — | $ | — | c | $ | — | |||||||
Other Equity Investments | 77,115,488 | — | — | 77,115,488 | ||||||||||||
Short-Term Investments | 49,020 | — | — | 49,020 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 77,164,508 | $ | — | $ | — | $ | 77,164,508 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 8,497 | $ | — | $ | — | $ | 8,497 | ||||||||
|
|
aFor detailed categories, see the accompanying Statement of Investments.
bIncludes common and convertible preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at September 30, 2020.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
10. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Selected Portfolio | ||
ADR | American Depositary Receipt | |
CDI | Clearing House Electronic Subregister System Depositary Interest | |
GDR | Global Depositary Receipt | |
IDR | International Depositary Receipt | |
NVDR | Non-Voting Depositary Receipt | |
REIT | Real Estate Investment Trust | |
SF | Single Family | |
Counterparty | ||
BOFA | Bank of America Corp. | |
DBAB | Deutsche Bank AG | |
HSBC | HSBC Bank USA, N.A. | |
HSBK | HSBC Bank PLC | |
MSCO | Morgan Stanley | |
UBSW | UBS AG |
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FRANKLIN TEMPLETON ETF TRUST
At March 31, 2020, more than 50% of the Funds’ total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Funds on these investments. As shown in the table below, the Funds hereby report to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 12, 2020, to treat their proportionate share of foreign taxes paid by the Funds as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.
The following table provides a detailed analysis of foreign tax paid, foreign source income, and foreign source qualified dividends as reported by the Funds to shareholders of record.
Fund | Foreign Tax Paid Per Share | Foreign Source Income Per Share | Foreign Source Qualified Dividends Per Share | |||||||||
Franklin FTSE Asia ex Japan ETF | $ | 0.0586 | $ | 0.5518 | $ | 0.2790 | ||||||
Franklin FTSE Australia ETF | $ | 0.0138 | $ | 0.7953 | $ | 0.7359 | ||||||
Franklin FTSE Brazil ETF | $ | 0.0446 | $ | 0.4295 | $ | 0.0000 | ||||||
Franklin FTSE Canada ETF | $ | 0.1111 | $ | 0.7225 | $ | 0.7225 | ||||||
Franklin FTSE China ETF | $ | 0.0344 | $ | 0.4277 | $ | 0.3491 | ||||||
Franklin FTSE Europe ETF | $ | 0.0287 | $ | 0.3150 | $ | 0.3150 | ||||||
Franklin FTSE Europe Hedged ETF | $ | 0.0821 | $ | 0.8123 | $ | 0.7639 | ||||||
Franklin FTSE France ETF | $ | 0.0591 | $ | 0.3940 | $ | 0.3940 | ||||||
Franklin FTSE Germany ETF | $ | 0.0712 | $ | 0.5047 | $ | 0.5047 | ||||||
Franklin FTSE Hong Kong ETF | $ | 0.0005 | $ | 0.7494 | $ | 0.0067 | ||||||
Franklin FTSE India ETF | $ | 0.0000 | $ | 0.2605 | $ | 0.1916 | ||||||
Franklin FTSE Italy ETF | $ | 0.4141 | $ | 3.2278 | $ | 3.2278 | ||||||
Franklin FTSE Japan ETF | $ | 0.0426 | $ | 0.4119 | $ | 0.3854 | ||||||
Franklin FTSE Japan Hedged ETF | $ | 0.0616 | $ | 0.6128 | $ | 0.0000 | ||||||
Franklin FTSE Latin America | $ | 0.0755 | $ | 0.8442 | $ | 0.1889 | ||||||
Franklin FTSE Mexico ETF | $ | 0.0277 | $ | 0.5419 | $ | 0.5419 | ||||||
Franklin FTSE Russia ETF | $ | 0.2158 | $ | 2.0822 | $ | 1.9514 | ||||||
Franklin FTSE Saudi Arabia | $ | 0.0382 | $ | 0.9322 | $ | 0.0000 | ||||||
Franklin FTSE South Africa | $ | 0.1191 | $ | 2.7752 | $ | 0.9018 | ||||||
Franklin FTSE South Korea ETF | $ | 0.0663 | $ | 0.3898 | $ | 0.3898 | ||||||
Franklin FTSE Switzerland ETF | $ | 0.0552 | $ | 0.3645 | $ | 0.1395 | ||||||
Franklin FTSE Taiwan ETF | $ | 0.2513 | $ | 1.1373 | $ | 0.0000 | ||||||
Franklin FTSE United Kingdom ETF | $ | 0.0055 | $ | 0.4575 | $ | 0.3507 |
Foreign Tax Paid Per Share is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.
Foreign Source Income Per Share is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.1
Foreign Source Qualified Dividends Per Share is the amount per share of foreign source qualified dividends, plus any foreign taxes withheld on these dividends. These amounts represent the portion of the Foreign Source Income reported to you in column 2 that were derived from qualified foreign securities held by the Fund.1
By mid-February 2021, shareholders will receive Form 1099-DIV which will include their share of taxes paid and foreign source income distributed during the prior calendar year 2020. The Foreign Source Income reported on Form 1099-DIV has not been adjusted for the rate differential on foreign source qualified dividend income. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
1. Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to Form 1116 for more information.
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FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin FTSE Asia ex Japan ETF
Franklin FTSE Australia ETF
Franklin FTSE Brazil ETF
Franklin FTSE Canada ETF
Franklin FTSE China ETF
Franklin FTSE Europe ETF
Franklin FTSE Europe Hedged ETF
Franklin FTSE France ETF
Franklin FTSE Germany ETF
Franklin FTSE Hong Kong ETF
Franklin FTSE India ETF
Franklin FTSE Italy ETF
Franklin FTSE Japan ETF
Franklin FTSE Japan Hedged ETF
Franklin FTSE Latin America ETF
Franklin FTSE Mexico ETF
Franklin FTSE Russia ETF
Franklin FTSE Saudi Arabia ETF
Franklin FTSE South Africa ETF
Franklin FTSE South Korea ETF
Franklin FTSE Switzerland ETF
Franklin FTSE Taiwan ETF
Franklin FTSE United Kingdom ETF
(each a Fund)
At a meeting held on May 14, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board
also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from the Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) each Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the
franklintempleton.com | Semiannual Report | 333 |
FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
effectiveness of those plans during the pandemic, and devel oping strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity and liquidity risk management. The Board further noted its ongoing engagement with management, the Funds’ auditor and State Street Bank and Trust Company, the Funds’ custodian, about their responses to the pandemic and the pandemic’s impact on their operating continuity, as well as the impact on the Funds (especially with respect to valuation and liquidity).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions currently provided by FT or an affiliate to other funds in the complex, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. Specifically, the Board discussed with management the expected impact of the Legg Mason acquisition on FT and the Funds, including management’s expectations with respect to the integration of Legg Mason’s exchange-traded funds into the FT family of funds. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, in her role as President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board also noted that management did not provide peer fund performance analyses typically prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data, as the Funds’ are pure-index exchange-traded funds as opposed to active or smart beta funds. The Board referenced earlier discussions with the Manager on matters related to, among other things, the importance of performance to asset growth and
growth of market share, the comparability of peer data, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding the Manager’s strategy behind the overall product line-up, the sources of asset growth, the nature of the Manager’s research, potential use of innovative data and technology, and investments in marketing and distribution. The Board noted the Manager’s high level of client engagement and the strength of its compliance program. The Board then noted that for the one-year period ended February 29, 2020, each Fund’s tracking error was within the tolerance anticipated for such Fund, except that the tracking error for the Franklin FTSE France ETF was 6 basis points above the tolerance anticipated for this Fund, for the Franklin FTSE India ETF was 6 basis points below the tolerance anticipated for this Fund and for the Franklin FTSE Switzerland ETF was 7.2 basis points above the tolerance for this Fund.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group. The Expense Group for each Fund was as follows:
• | The Expense Group for the Franklin FTSE Asia Ex Japan ETF was comprised of pure-index exchange-traded funds, which included the Fund and two other Pacific ex-Japan funds. |
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
• | The Expense Group for the Franklin FTSE Australia ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other Pacific region fund. |
• | The Expense Group for the Franklin FTSE Brazil ETF was comprised of pure-index exchange-traded funds, which included the Fund and two other Latin American funds. |
• | The Expense Group for the Franklin FTSE Canada ETF was comprised of pure-index exchange-traded funds, which included the Fund and two other international large-cap core funds. |
• | The Expense Group for the Franklin FTSE China ETF was comprised of pure-index exchange-traded funds, which included the Fund and nine other China region funds. |
• | The Expense Group for the Franklin FTSE Europe ETF was comprised of pure-index exchange-traded funds, which included the Fund and six other European region funds. |
• | The Expense Group for the Franklin FTSE Europe Hedged ETF was comprised of pure-index exchange-traded funds, which included the Fund and four other European region funds. |
• | The Expense Group for the Franklin FTSE France ETF was comprised of pure-index exchange-traded funds, which included the Fund and four other European region funds. |
• | The Expense Group for the Franklin FTSE Germany ETF was comprised of pure-index exchange-traded funds, which included the Fund and three other European region funds. |
• | The Expense Group for the Franklin FTSE Hong Kong ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other China region fund. |
• | The Expense Group for the Franklin FTSE India ETF was comprised of pure-index exchange-traded funds, which included the Fund and four other India region funds. |
• | The Expense Group for the Franklin FTSE Italy ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other European region fund. |
• | The Expense Group for the Franklin FTSE Japan ETF was comprised of pure-index exchange-traded funds, which included the Fund and three other Japanese funds. |
• | The Expense Group for the Franklin FTSE Japan Hedged ETF was comprised of pure-index exchange-traded funds, which included the Fund and four other Japanese funds. |
• | The Expense Group for the Franklin FTSE Latin America ETF was comprised of pure-index exchange-traded funds, which included the Fund and two other Latin American funds. |
• | The Expense Group for the Franklin FTSE Mexico ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other Latin American fund. |
• | The Expense Group for the Franklin FTSE Russia ETF was comprised of pure-index exchange-traded funds, which included the Fund and two other emerging markets funds. |
• | The Expense Group for the Franklin FTSE Saudi Arabia ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other emerging markets fund. |
• | The Expense Group for the Franklin FTSE South Africa ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other emerging markets fund. |
• | The Expense Group for the Franklin FTSE South Korea ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other Pacific ex-Japan fund. |
• | The Expense Group for the Franklin FTSE Switzerland ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other European region fund. |
• | The Expense Group for the Franklin FTSE Taiwan ETF was comprised of pure-index exchange-traded funds, which included the Fund and one other China region fund. |
• | The Expense Group for the Franklin FTSE United Kingdom ETF was comprised of pure-index exchange-traded funds, which included the Fund and two other European region funds. |
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
The Board noted that the Management Rates and actual total expense ratios for the Funds were below the medians of their respective Expense Groups, except that the actual total expense ratio for the Franklin FTSE Asia ex Japan ETF was equal to the median of its Expense Group. The Board also noted the small size of each Fund’s Expense Group, except for the Franklin FTSE China ETF which had nine peers in its Expense Group and the Franklin FTSE Europe ETF which had six peers in its Expense Group. The Board further noted each Fund’s unified management fee (Unified Fee). The Board also noted that pursuant to the Unified Fee arrangement the Manager reimburses the Fund for all of its acquired fund fees and expenses (if any) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s investment management fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses, (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses. The Board concluded that the Management Rate charged to each Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost sav-
ings and efficiencies initiated by management. As part of this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up-front expenditures by the Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements, notably in the area of cybersecurity protections.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that each Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that any of the Funds will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board considered the Manager’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board noted that at the end of 2019, the net assets of each Fund were less than $71 million (and in most cases much less), except for the Franklin FTSE Brazil ETF which had assets of approximately $216 million and the Franklin FTSE Japan ETF which had assets of approximately $221 million. The Board recognized that there would not likely be any economies of scale until these Funds’ assets grow.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program – In-Kind ETFs
Franklin FTSE Australia ETF
Franklin FTSE Canada ETF
Franklin FTSE Europe ETF
Franklin FTSE Europe Hedged ETF
Franklin FTSE France ETF
Franklin FTSE Germany ETF
Franklin FTSE Hong Kong ETF
Franklin FTSE Italy ETF
Franklin FTSE Japan ETF
Franklin FTSE Japan Hedged ETF
Franklin FTSE Mexico ETF
Franklin FTSE Russia ETF
Franklin FTSE South Africa ETF
Franklin FTSE Switzerland ETF
Franklin FTSE United Kingdom ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Liquidity Risk Management Program – Non-In-Kind ETFs
Franklin FTSE Asia ex Japan ETF
Franklin FTSE Brazil ETF
Franklin FTSE China ETF
Franklin FTSE India ETF
Franklin FTSE Latin America ETF
Franklin FTSE Saudi Arabia ETF
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Franklin FTSE South Korea ETF
Franklin FTSE Taiwan ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio
liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report Franklin Templeton ETF Trust | ||||||
Investment Manager | Distributor | Investor Services | ||||
Franklin Advisory Services, LLC | Franklin Templeton Distributors, Inc. (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
© 2020 Franklin Templeton Investments. All rights reserved. | ETF5 S 11/20 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2020
Franklin Liberty High Yield Corporate ETF | Franklin Liberty Senior Loan ETF | |
Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Systematic Style Premia ETF |
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
Visit franklintempleton.com/investor/investments-and-solutions/investment-options/etfs/ for fund updates and documents.
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
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SEMIANNUAL REPORT
The U.S. bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, advanced during the six-month period as markets adjusted to the disruption created by the novel coronavirus (COVID-19). Before the beginning of the period, investor flight to safety had driven Treasury yields (which are inverse to prices) near record lows, while corporate bond yields increased, reflecting increased credit risk amid widespread economic disruption. Throughout the reporting period, however, U.S. Federal Reserve (Fed) support and the gradual reopening of the economy diminished investors’ concerns about solvency, and corporate bonds rebounded significantly. This advance was tempered somewhat in August 2020, as a change in long-standing inflation policy at the Fed led yields on most bonds to rise.
The U.S. Federal Reserve (Fed), which had already lowered the federal funds target rate to a range of 0.00%–0.25%, implemented unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning, significantly expanding its balance sheet. In August 2020, the Fed announced that future interest rates would remain low, even if inflation persistently exceeded the Fed’s 2% target. The announcement was a major change in inflation policy that affirmed the Fed’s commitment to providing economic stimulus until the economy establishes a strong growth trend.
U.S. Treasury bonds, as measured by the Bloomberg Barclays U.S. Treasury Index, rose only slightly during the reporting period. Yields on 10-year Treasuries remained at historically low levels throughout the period despite the widening U.S. federal budget deficit and a massive increase in issuance. Mortgage-backed securities (MBS), as measured by the Bloomberg Barclays MBS Index, also posted modestly positive returns, aided by the Fed’s decision to purchase agency MBS.
U.S. corporate bond performance varied somewhat based on credit rating, reflecting the recovery of credit markets following the initial COVID-19 shock. As Fed support tempered investors’ concerns over credit quality, prices for corporate bonds rebounded, particularly for the lower-rated segment of the market. Consequently, high-yield corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate High Yield Bond Index, advanced significantly. Investment-grade corporate bonds, as represented by the Bloomberg Barclays U.S. Corporate Bond Index, also posted a strong performance.
Global aggregate bond markets posted positive returns over the six-month period. In April, the U.S. government announced three new packages of economic relief, which brought total fiscal stimulus since the start of the COVID-19 outbreak to around US$3 trillion. In May, Fed Chair Jerome Powell stated that the U.S. economy’s recovery from the coronavirus crisis would probably be slow, and the central bank soon initiated some of the measures announced in March by beginning to purchase investment-grade corporate bonds. According to the U.S. Bureau of Economic Analysis, U.S. gross domestic product (GDP) had fallen at an annualized rate of -31.4% in the second quarter, the most significant single-quarter contraction on record for the world’s largest economy. After a lengthy review of its policy framework, the Fed also announced that it would tolerate inflation moving above its longer-term goal of 2% to help boost the U.S. economy. This announcement precipitated a sell-off in bonds, especially in longer-dated Treasuries, with a subsequent sharp steepening of the U.S. yield curve. In September, the Fed kept its policy largely unchanged but announced that it would consider extending the restrictions on dividends and share buybacks for large banks. Mr. Powell commented that economic activity, led by increased household spending and an improving U.S. housing market, had been resilient. Indeed, the central bank revised upward its projection for 2020 GDP growth, although it also highlighted the need for Congress to agree on additional fiscal stimulus. Against this backdrop, benchmark U.S. Treasury yields rose slightly over the six-month period.
In Europe, the European Central Bank (ECB) decided at its end-of-April meeting not to expand its asset purchase program, a sign that major central banks were taking stock of the considerable measures launched in response to the COVID-19 crisis. Nonetheless, the ECB did expand its program of loans to banks at record-low rates. In May, the European Commission proposed a further €750 billion recovery package, including the issuance of new bonds, to help member states of the European Union (EU) combat the economic impact of the virus. Macroeconomic data released towards the end of the second quarter was upbeat and the outlook for the eurozone was bolstered considerably in July when EU leaders finally reached an agreement on the rescue plan put forward in May. August saw signs of recovery, although headline consumer inflation in the eurozone fell from 0.4% in July to -0.2% in August, the first time in four years that the eurozone had entered a period of deflation. In September, the ECB stated that, like the Fed, it would consider allowing
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eurozone inflation to overshoot its target. The ECB also urged the EU to contemplate making its pandemic recovery fund permanent. In this environment, benchmark yields on German bunds were broadly flat for the period, though they remained well in negative territory at the end of September.
The foregoing information reflects our analysis and opinions as of September 30, 2020. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
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Franklin Liberty High Yield Corporate ETF
This semiannual report for Franklin Liberty High Yield Corporate ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to earn a high level of current income. Its secondary goal is to seek capital appreciation to the extent it is possible and consistent with the Fund’s principal goal. The Fund invests at least 80% of its net assets in high yield corporate debt securities and investments that provide exposure to high yield corporate debt securities, including fixed or floating-rate corporate loans and corporate debt securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +16.17% based on market price and +15.10% based on net asset value (NAV). In comparison, the ICE BofA U.S. High Yield Constrained Index posted a +14.69% total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 7.
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.
Investment Strategy
The Fund may invest up to 100% of its total assets in high yield debt securities. The Fund may buy both rated and unrated debt securities, including securities rated below B by Moody’s or Standard & Poor’s® (or deemed comparable by the Fund’s investment manager). The Fund may invest in fixed or floating rate corporate loans and corporate debt securities. The Fund may also invest in defaulted debt securities. The Fund may invest in debt securities of any maturity or duration.
The Fund may invest in debt securities of U.S. and foreign issuers, including those in developing or emerging markets. The Fund may enter into certain derivative transactions,
Portfolio Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Quasi-Sovereign and Corporate Bonds | 96.4% | |||
Short-Term Investments & Other Net Assets | 3.6% |
principally currency and cross currency forwards; and swap agreements, including interest rate and credit default swaps (including credit default index swaps). The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select currencies, interest rates, countries, durations or credit risks.
We are research driven, fundamental investors who rely on our team of analysts to provide in-depth industry expertise and use qualitative and quantitative analysis to evaluate companies. As bottom-up investors, we focus primarily on individual securities but consider sectors when choosing investments. In selecting securities, we do not rely principally on the ratings assigned by rating agencies, but perform our own independent investment analysis to evaluate the creditworthiness of the issuer. We consider a variety of factors, including the issuer’s experience and managerial strength, its sensitivity to economic conditions, and its current and prospective financial condition.
Manager’s Discussion
High yield (HY) corporate bonds posted a strong recovery from the COVID-19-induced sell-off in March by registering positive returns from April to August; the benchmark ICE BofA U.S. High Yield Constrained Index posted a positive return for the six-month period under review.
After a historic decline from late February through late March, financial markets began to recover in April amid unprecedented fiscal and monetary measures. Governments around the world acted with seldom seen speed to provide trillions of dollars in fiscal spending to buffer the impact of mandated shutdowns of economic activity. The Fed supplied significant support through lowering the federal funds rate to the zero lower bound in March. Declining U.S. Treasury yields across the curve along with lower government bond yields globally
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 28.
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FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
Top 10 Sector/Industries | ||||
9/30/2020 | ||||
% of Total Net Assets | ||||
Media & Entertainment | 14.5% | |||
Energy | 12.1% | |||
Materials | 11.3% | |||
Capital Goods | 8.3% | |||
Diversified Financials | 6.5% | |||
Health Care Equipment & Services | 5.3% | |||
Pharmaceuticals, Biotechnology & Life Sciences | 4.5% | |||
Food, Beverage & Tobacco | 4.4% | |||
Telecommunication Services | 4.2% | |||
Utilities | 3.8% |
helped to support demand for high yield corporate bonds. Furthermore, the Fed’s commitment to and execution of direct and indirect purchases of investment-grade and HY corporate securities lowered the cost of capital for companies and provided additional liquidity to financial market participants. These actions combined to support a quick turnaround in investor sentiment. The commitment to provide liquidity to businesses and financial markets helped drive HY performance for much of the period despite the fact that the economic fallout from the COVID-19 outbreak still presents what we consider major economic unknowns.
Based on benchmark index data, HY spreads ended the period under review at 542 basis points (bps), representing a narrowing of 335 bps for the six-month period overall. Most segments of the HY market posted positive absolute returns for the period under review, and CCC rated bonds led the way with a return of 19.01%, compared to returns of 14.35% and 14.29% for BB and B rated segments, respectively. From an industry standpoint, energy stood out as a key performer that had recovered strongly from March lows. Other sectors that had also staged robust recoveries included gaming and leisure, manufacturing and retail.
The Fund outperformed its benchmark as well as its Morningstar high-yield category average.
A number of positive factors contributed to the Fund’s relative outperformance for the period. Security selection was a major contributor to results, led by selection in the energy, metals and mining and health care industries. Conversely, selection in the building/construction, utility, gaming and food
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
FHLB, 0.01%, 10/01/2020 Bank | 2.6% | |||
CCO Holdings LLC/CCO Holdings Capital Corp., 144A, senior bond, 144A, senior bond, 144A, 5.375%, 6/01/2029 Media & Entertainment | 2.1% | |||
Gray Escrow Inc., senior note, 144A, 7.00%, 5/15/2027 Media & Entertainment | 1.8% | |||
JBS USA LUX SA/JBS USA Food Co./JBS USA Finance Inc., senior bond, 144A, 5.50%, 1/15/2030 Food, Beverage & Tobacco | 1.7% | |||
CSC Holdings LLC, senior note, 144A, 7.50%, 4/01/2028 Media & Entertainment | 1.6% | |||
Ashton Woods USA LLC/Ashton Woods Finance Co., senior note, 144A, 9.875%, 4/01/2027 Consumer Durables & Apparel | 1.6% | |||
NCI Building Systems Inc., senior secured note, 144A, 8.00%, 4/15/2026 Capital Goods | 1.6% | |||
Cheniere Energy Partners LP, senior note, senior secured note, first lien, 5.25%, 10/01/2025 Energy | 1.6% | |||
Altice France Holding SA, senior note, 144A, 10.50%, 5/15/2027 Telecommunication Services | 1.5% | |||
Altice France SA, senior note, first lien, 144A, 8.125%, 2/01/2027 Telecommunication Services | 1.5% |
and beverage sectors hindered results. The Fund’s ratings-quality tilt also benefited performance, led by exposures to the BB and CCC segments of the market. Conversely, positioning in the B segment underperformed relative to the market during the period.
The Fund’s industry allocation hurt results, led by an underweighted position in the energy sector and overweighted position in the packaging and media non-cable industries. Conversely, an underweighted position in the transportation, technology and finance sectors contributed favorably to performance.
The Fund held mostly cash bonds during the period under review and also held a small position in high yield CDX that was put in place to help manage exposure following a large inflow. The Fund had no exposure to derivatives at the end of the review period.
franklintempleton.com | Semiannual Report | 5 |
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
Thank you for your participation in Franklin Liberty High Yield Corporate ETF. We look forward to serving your future investment needs.
Glenn I. Voyles, CFA®
Patricia O’Connor, CFA
Jonathan G. Belk, CFA
Thomas Runkel, CFA
Pururav Thoutireddy, Ph.D
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
CFA® is a trademark owned by CFA Institute.
6 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +15.10% | +16.17% | +15.10% | +16.17% | ||||||||||||
1-Year | +4.57% | +4.38% | +4.57% | +4.38% | ||||||||||||
Since Inception (5/30/18) | +16.93% | +17.20% | +6.92% | +7.03% |
30-Day Standardized Yield6 | ||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | ||||||
5.92% | 4.86% | 4.63% |
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 8 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 7 |
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.829484 |
Total Annual Operating Expenses7
With Fee Waiver | Without Fee Waiver | |||
0.40% | 0.86% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. The high-yield corporate debt securities and instruments in which the Fund invests tend to be rated below investment grade. Investing in higher-yielding, lower-rated corporate debt securities and instruments involves greater risk of default, which could result in loss of principal—a risk that may be heightened in a slowing economy. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response to a specific market event. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
8 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 × $ 7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different ETFs. 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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,151.00 | $ | 2.16 | $ | 1,023.06 | $ | 2.03 | 0.40 | % |
1 . Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements .
franklintempleton.com | Semiannual Report | 9 |
Franklin Liberty International Aggregate Bond ETF
This semiannual report for Franklin Liberty International Aggregate Bond ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks total investment return, consistent with prudent investing, consisting of a combination of interest income and capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and investments that provide exposure to bonds.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +1.44% based on market price and +1.97% based on net asset value (NAV). In comparison, the Fund’s new benchmark, the Bloomberg Barclays Global Aggregate ex-USD Index (100% Hedged to USD), posted a +2.45% total return.1 The Fund’s old benchmark, the Bloomberg Barclays Global Aggregate ex-USD Index posted a +7.66% total return for the same period.1 We believe the new benchmark’s composition more accurately reflects the Fund’s holdings. You can find more of the Fund’s performance data in the Performance Summary beginning on page 13.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund invests predominantly in fixed and floating-rate bonds issued by governments, government agencies and governmental-related or corporate issuers located outside the U.S. The Fund may also invest in securities or structured products that are linked to or derive their value from another security, asset or currency of any nation. In addition, the Fund’s assets are invested in issuers located in at least three countries (excluding the U.S.).
The Fund may invest in debt securities of any maturity or duration, and the average maturity or duration of debt securities in the Fund’s portfolio will fluctuate depending on the investment manager’s outlook on changing market, economic and political conditions.
Geographic Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Europe | 56.0% | |||
Asia | 22.1% | |||
North America | 7.4% | |||
Australia & New Zealand | 3.1% | |||
Supranationals | 2.0% | |||
Middle East & Africa | 1.0% | |||
Latin America & Caribbean | 0.2% | |||
Short-Term Investments & Other Net Assets | 8.2% |
The Fund is a “non-diversified” fund, which means it generally invests a greater portion of its assets in the securities of one or more issuers and invests overall in a smaller number of issuers than a diversified fund.
When choosing investments for the Fund, we allocate the Fund’s assets based upon our assessment of changing market, political and economic conditions. We consider various factors, including evaluation of interest rates, currency exchange rate changes and credit risks. We may consider selling a security when we believe the security has become fully valued due to either its price appreciation or changes in the issuer’s fundamentals, or when we believe another security is a more attractive investment opportunity.
We seek to hedge substantially all of the Fund’s foreign currency exposure using currency related derivatives, including currency and cross currency forwards and currency futures contracts. We expect to maintain extensive positions in currency related derivative instruments as a hedging technique or to implement a currency investment strategy, which exposes a large amount of the Fund’s assets to obligations under these instruments. The results of such transactions may represent, from time to time, a large component of the Fund’s investment returns. The use of these derivative transactions may allow the fund to obtain net long or net negative (short) exposure to selected currencies. The Fund may also enter into various other transactions involving derivatives, including interest rate/bond futures contracts and interest rate swap agreements. These derivative instruments may be
1. Source: Morningstar.
The indexes are unmanaged and includes reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 28.
10 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
Portfolio Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Foreign Government and Agency Securities | 87.3% | |||
Corporate Bonds & Notes | 4.5% | |||
Short-Term Investments & Other Net Assets | 8.2% |
used for hedging purposes. Derivatives that provide exposure to bonds may be used to satisfy the Fund’s 80% policy.
Manager’s Discussion
The Fund’s sector allocation and security selection detracted from relative returns. An overweight allocation to German bunds and positioning in Italian government bonds hurt relative performance. Positioning in corporate investment-grade financial and industrial issues also weighed on relative results.
In contrast, the Fund’s local market allocation bolstered relative returns, notably an underweight exposure to the Chinese market and overweight position in the eurozone market. However, overweight exposure to the underperforming U.S. market countered this to some degree.
The Fund’s duration and yield-curve positioning also helped relative performance, notably duration stances on eurozone and Japanese bonds. However, duration positions in Canadian and U.K. issues had a slight detrimental bearing on relative results.
The Fund’s currency positioning further added to relative returns, helped by an allocation to the onshore Chinese renminbi, although this was offset by the negative impact of exposure to the offshore equivalent.
Over the period, the only derivatives used were foreign-exchange forward contracts to hedge back to the U.S. dollar, which is the fully hedged benchmark’s currency.
Thank you for your participation in Franklin Liberty International Aggregate Bond ETF. We look forward to serving your future investment needs.
John Beck
Co-Lead Portfolio Manager
Sonal Desai, Ph.D.
Co-Lead Portfolio Manager
David Zahn, CFA
Portfolio Manager
Patrick Klein, Ph.D.
Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 11 |
FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +1.97% | +1.44% | +1.97% | +1.44% | ||||||||||||
1-Year | +1.03% | +0.63% | +1.03% | +0.63% | ||||||||||||
Since Inception (5/30/18) | +6.10% | +5.88% | +2.57% | +2.48% |
30-Day Standardized Yield6 | ||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | ||||||
1.01% | 0.08% | -0.20% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 13 for Performance Summary footnotes.
12 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.111049 |
Total Annual Operating Expenses7
With Fee Waiver | Without Fee Waiver | |||
0.25% | 3.23% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates and a rise in interest rates may cause the Fund’s share price to decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s investments in foreign securities involve certain risks including economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks, including counterparty risk, and as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 13 |
FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,019.70 | $ | 1.27 | $ | 1,023.82 | $ | 1.27 | 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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
14 | Semiannual Report | franklintempleton.com |
Franklin Liberty Senior Loan ETF
This semiannual report for Franklin Liberty Senior Loan ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide a high level of current income. A secondary goal is preservation of capital. The Fund invests at least 80% of its net assets in senior loans and investments that provide exposure to senior loans.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +9.18% based on market price and +7.28% based on net asset value (NAV). In comparison, the Fund’s benchmark, the S&P/LSTA U.S. Leveraged Loan 100 Index, posted a +10.37% total return for the same period.1 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.
Investment Strategy
The Fund invests predominantly in income-producing senior floating interest rate corporate loans made to or issued by U.S. companies, non-U.S. entities and U.S. subsidiaries of non-U.S. entities. Floating interest rates vary with and are periodically adjusted to a generally recognized base interest rate such as the London Interbank Offered Rate (LIBOR) or the Prime Rate. The Fund may invest in companies whose financial condition is troubled or uncertain and that may be involved in bankruptcy proceedings, reorganizations or financial restructurings.
Senior loans generally have credit ratings below investment grade and may be subject to restrictions on resale. Under normal market conditions, the Fund invests at least 75% of its net assets in senior loans that are rated B- or higher at the time of purchase by a nationally recognized statistical rating
Portfolio Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Senior Floating Rate Interests | 87.8% | |||
Asset-Backed Securities | 5.2% | |||
Quasi-Sovereign and Corporate Bonds | 2.7% | |||
Short-Term Investments & Other Net Assets | 4.3% |
organization (NRSRO) or, if unrated, are determined to be of comparable quality by the Fund’s investment manager. Under normal market conditions, the Fund may invest up to 25% of its net assets in senior loans that are rated below B- by an NRSRO or, if unrated, are determined to be of comparable quality by the investment manager.
Manager’s Discussion
The loan market rallied at the beginning of the period due to improved investor sentiment and technical conditions, as severe outflows subsided and modest collateralized loan obligation (CLO) activity resumed. Gains were initially led by higher rated loans and those in industries perceived to be less impacted by the crisis, but eventually spread to lower rated loans as investors searched for principal appreciation and higher income amid a low-rate environment. While the recovery rally was uneven as investor optimism of a strong and sharp rebound remained subdued due to COVID-19 infection spikes, the loan market retraced a majority of spread widening from the prior period, returning to levels from early March. As demand improved, primary market activity picked up and included opportunistic transactions to finance acquisitions or dividends. However, net issuance remained at relatively low levels, and robust demand in the high yield bond market led to more issuers issuing bonds to pay down loans.
During the period, the Fund underperformed its benchmark, the S&P/LSTA U.S. Leveraged Loan 100 Index. While the Fund had outperformed the index in the previous period amid market dislocation, loans in the index that had traded off more significantly subsequently had stronger returns as the market rebounded. Relative to the benchmark, the Fund maintained
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 28.
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN LIBERTY SENIOR LOAN ETF
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Media | 11.9% | |||
Software | 8.1% | |||
Hotels Restaurants & Leisure | 5.5% | |||
Containers & Packaging | 4.5% | |||
Diversified Financial Services | 4.4% | |||
Health Care Providers & Services | 4.4% | |||
Chemicals | 4.3% | |||
Pharmaceuticals | 4.2% | |||
Specialty Retail | 2.3% | |||
Insurance | 3.8% |
its overweight in higher rated loans, which also underperformed, as lower priced lower rated loans rallied more. Upper-tier loans (BB rated) in the index returned +9.43%, middle-tier loans (B rated) returned +15.38%, and lower-tier loans (CCC rated and below) returned +16.82%. As of period-end, the Fund had approximately 38% of its portfolio in the upper tier and 49% in the middle tier, compared to the index, which had 34% in the upper tier and 64% in the middle tier.
Among individual positions, the top contributors to performance included issuers that had traded lower among volatility and perceived sensitivity to COVID-19-related shutdowns and declines in demand. Caesars Resort Collection (a gaming company) contributed to performance as the loan price of this issuer in a highly COVID-19-sensitive sector recovered from the bottom in response to a gradual reopening of its casinos, which enabled it to raise additional debt, and build liquidity prior to its acquisition by Eldorado Resorts. Additionally, the Fund’s holdings in A rated CLOs contributed to performance as the market rebounded and investors searched for income in CLO tranches that were higher in the capital stack, but offered higher spreads than the most senior loan tranches. The Fund has held CLO vehicles for exposure to credit, in addition to improved settlement liquidity versus loans. However, American Airlines (a global airline operator) continued to detract from performance due to ongoing weakness in air travel.
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
FHLB, 0.01%, 10/01/2020, Bank | 6.2% | |||
CommScope Inc., Initial Term Loans, 3.406%, 3.397%, 4/06/2026 Technology Hardware & Equipment | 2.8% | |||
Clarios Global LP (Power Solutions), Initial Dollar Term Loan, 3.658%, 3.647%, 4/30/2026 Auto Components | 2.8% | |||
Nexstar Broadcasting Inc., Term B-4 Loan, 2.905%, 2.905%, 9/18/2026 Media | 2.7% | |||
Asurion LLC, Replacement B-6 Term Loans, 3.156%, 3.147%, 11/03/2023 Commercial & Professional Services | 2.7% | |||
Prime Security Services Borrower LLC, Term B-1 Facility, 4.250%, 4.25%, 9/23/2026 Commercial & Professional Services | 2.6% | |||
1011778 B.C. ULC, Term B-4 Loan, 1.906%, 1.897%, 11/19/2026 Consumer Services | 2.5% | |||
Sunshine Luxembourg VII SARL (Nestle Skin Health), Facility B1 Commitments, 5.322%, 5.25%, 10/01/2026 Personal Products | 2.5% | |||
Nielsen Finance LLC (VNU Inc.), Dollar Term B-5 Loan, 4.750%, Class B-4 Term Loans, 2.154%, 2.154%, 10/04/2023 Professional Services | 2.3% | |||
Grifols Worldwide Operations USA Inc., Dollar Tranche B Term Loan, 2.106%, 2.10%, 11/15/2027 Pharmaceuticals | 2.3% |
16 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY SENIOR LOAN ETF
Thank you for your participation in Franklin Liberty Senior loan ETF. We look forward to serving your future investment needs.
Reema Agarwal, CFA
Co-Lead Portfolio Manager
Justin Ma, CFA
Co-Lead Portfolio Manager
Margaret Chiu, CFA, FRM
Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN LIBERTY SENIOR LOAN ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +7.28% | +9.18% | +7.28% | +9.18% | ||||||||||||
1-Year | +0.42% | +0.18% | +0.42% | +0.18% | ||||||||||||
Since Inception (5/30/18) | +5.59% | +5.79% | +2.35% | +2.44% |
30-Day Standardized Yield6 | ||||||||
Distribution Rate5 | (with fee waiver) | (without fee waiver) | ||||||
3.07% | 3.28% | 2.83% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 19 for Performance Summary footnotes.
18 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY SENIOR LOAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.366530 |
Total Annual Operating Expenses7
With Fee Waiver | Without Fee Waiver | |||
0.45% | 0.97% |
All investments involve risks, including possible loss of principal. Investors should be aware that the Fund’s share price and yield will fluctuate with market conditions. The senior loans and debt securities in which the Fund invests tend to be rated below investment grade. Investing in higher-yielding, lower-rated, senior loans and debt securities involves greater risk of default, which could result in loss of principal—a risk that may be heightened in a slowing economy. Interest earned on senior loans varies with changes in prevailing interest rates. Therefore, while senior loans offer higher interest income when interest rates rise, they will also generate less income when interest rates decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response to a specific market event. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/20.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN LIBERTY SENIOR LOAN ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,072.80 | $ | 2.34 | $ | 1,022.81 | $ | 2.28 | 0.45 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
20 | Semiannual Report | franklintempleton.com |
Franklin Liberty Systematic Style Premia ETF
This semiannual report for Franklin Liberty Systematic Style Premia ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks to provide absolute return. The Fund seeks to achieve its investment goal by allocating its assets across two underlying alternative investment strategies, which represent top-down and bottom-up approaches to capturing factor-based risk premia. The strategies consist of a top-down risk premia strategy and a bottom-up long/short equity strategy.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -2.88% based on market price and -3.32% based on net asset value (NAV). In comparison, the ICE BofA U.S. 3-Month Treasury Bill Index posted a +0.06% total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 25.
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.
Investment Strategy
The Fund’s top-down risk premia strategy focuses on value, momentum and carry factors in taking both long and short positions across equity, fixed income, commodity and currency asset classes.
The Fund’s bottom-up long/short equity strategy focuses on quality, value and momentum factors in determining whether to hold long or short positions in individual equity securities. Long/short equity strategies generally seek to produce returns from investments in the equity markets by taking long and short positions in stocks and stock indices (through the use of derivatives or through a short position in an exchange-traded fund). Long positions benefit from an increase in the price of the underlying instrument, while short positions benefit from a decrease in that price.
Portfolio Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Common Stocks | 75.8% | |||
Preferred Stocks | 0.2% | |||
Other Net Assets | 24.0% |
Under normal market conditions, the top-down risk premia strategy invests primarily in equity, interest rate/bond and commodity index futures; equity and commodity-linked total return swaps; and currency forwards. Under normal market conditions, the bottom-up long/short equity strategy invests primarily in equity securities and equity total return swaps, with equity total return swaps being used to obtain short exposures.
Under normal market conditions, we seek to allocate assets between the two factor-based risk premia alternative investment strategies described above according to each strategy’s estimated risk, as measured by historical returns based risk models. The allocation to each strategy is driven by the estimated risk contribution of each individual strategy to the Fund’s overall investment strategy, which the investment manager seeks to keep within certain pre-determined bounds.
Through the two strategies, we invest the Fund’s assets based on a systematic investment process for securities selection and asset allocation by utilizing quantitative trading models. By employing these two approaches, we seek to provide positive absolute return over time while maintaining a relatively low correlation with traditional markets. The exposure to individual factors may vary based on the market opportunity of the individual factors.
The Fund may use derivatives for both hedging and non-hedging (investment) purposes. The Fund’s derivative investments may include, among other instruments: (i) futures contracts, including futures on equity, interest rate/bond and commodity indices; (ii) swaps, including equity and commodity-linked total return swaps; and (iii) currency forward contracts. These derivatives may be used to enhance Fund returns, increase liquidity, gain long or short exposure to certain instruments, markets or factors in a more efficient
1. Source: Factset.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 28.
franklintempleton.com | Semiannual Report | 21 |
FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
Top 10 Sectors/Industries | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Software | 6.1% | |||
Capital Markets | 4.5% | |||
Specialty Retail | 3.6% | |||
Pharmaceuticals | 3.4% | |||
Biotechnology | 3.2% | |||
Interactive Media & Services | 3.0% | |||
Oil, Gas & Consumable Fuels | 2.9% | |||
Semiconductors & Semiconductor Equipment | 2.8% | |||
IT Services | 2.7% | |||
Electric Utilities | 2.3% |
or less expensive way and/or hedge risks associated with its other portfolio investments. The results of such transactions are expected to represent a material component of the Fund’s investment returns.
Manager’s Discussion
Fund performance during the period was negative. We maintained risk from the second quarter of 2020 in our long/short equities and macro book. In our long/short equities, we increased our long to short ratios to further increase risk contribution from our long/short relative to macro strategies.
Quarter-to-date, both macro strategies and long/short equities detracted from Fund performance.
After a positive second quarter of 2020, commodities had a relatively flat quarter. Our natural gas short positions hurt results in July and August, but we saw some reversal in September.
On a relative basis, equity indices had the best performance this quarter compared to all other asset class bets we had in our strategy with flat performance. Short positions in Spain and France helped Fund performance, as well as long positions in Mexico and Japan.
Our foreign currency exchange and fixed income strategies hindered Fund results during the third quarter of 2020. The foreign currency exchange strategy was the worst performer among macro asset classes, especially our long positions in the Turkish lira and Brazilian real, which hurt Fund results in the third quarter of 2020 as both currencies weakened against the USD in the third quarter of 2020. The Fund’s fixed income strategy suffered because of countertrends with
Top 10 Long Positions | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
FLSP Holdings Corp. Diversified Financial Services, Cayman Islands | 3.5% | |||
Intel Corp. Semiconductors & Semiconductor Equipment, United States | 1.0% | |||
Texas Instruments Inc. Semiconductors & Semiconductor Equipment, United States | 1.0% | |||
Adobe Inc. Software, United States | 1.0% | |||
Novo Nordisk AS, B Pharmaceuticals, Denmark | 1.0% | |||
Microsoft Corp. Software, United States | 1.0% | |||
Lowe’s Cos. Inc. Specialty Retail, United States | 1.0% | |||
Amazon.com Inc. Internet & Direct Marketing Retail, United States | 1.0% | |||
The Home Depot Inc. Specialty Retail, United States | 1.0% | |||
Accenture PLC IT Services, United States | 1.0% |
Top 10 Short Holdings | ||||
9/30/20 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
ACS Actividades de Construccion y Servicios Capital Goods, Spain | | 0.0% | | |
Rolls-Royce Holdings PLC Capital Goods, United Kingdom | -0.1% | |||
Orica Ltd Materials, Australia | -0.1% | |||
Woolworths Group Ltd Food & Staples Retailing, Australia | -0.1% | |||
Ricoh Co Ltd Technology Hardware & Equipment, Japan | -0.1% | |||
Treasury Wine Estates Ltd Food, Beverage & Tobacco, Australia | -0.1% | |||
Axalta Coating Systems Ltd Materials, United States | -0.1% | |||
Delta Air Lines Inc Transportation, United States | -0.1% | |||
Temenos AG Software & Services, Switzerland | | -0.1% | | |
Nielsen Holdings PLC Commercial & Professional Services, United States | -0.1% |
22 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
our short positions in German bunds performing poorly as German yields went further into negative yield territory, while our long positions in U.S. Treasury bonds fell as yields inched up during the quarter.
In our long/short equity component, the quality and momentum factors of our multifactor process continued to contribute, but the value factor detracted on aggregate. Equity markets were up in the third quarter of 2020 and our long book contributed while our short book detracted. Our net spread was negative between the long book and short book, thereby detracting from Fund performance. We saw some factor volatility and market volatility during the quarter which affected Fund performance, particularly in September. We observed that higher risk stocks outperformed lower risk stocks in the last quarter and this detracted from performance as well. We continue to see a drop in estimated risks in the equity market and we are calibrating our portfolio accordingly to efficiently capture factor style premia.
Thank you for your participation in Franklin Liberty Systematic Style Premia ETF. We look forward to serving your future investment needs.
Chandra Seethamraju, Ph.D.
Sundaram Chettiappan, CFA
Vaneet Chadha, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
Performance Summary as of September 30, 2020
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (12/20/19), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | -3.32% | -2.88% | -3.32% | -2.88% | ||||||||||||
Since Inception (12/18/19) | -10.42% | -9.66% | -10.42% | -9.66% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 25 for Performance Summary footnotes.
24 | Semiannual Report | franklintempleton.com |
FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/20–9/30/20)
Net Investment Income |
$0.051081 |
Total Annual Operating Expenses5
With Fee Waiver | Without Fee Waiver | |||
0.65% | 1.16% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies particular industries or sectors, or general market conditions. The Fund is actively managed and could experience losses if the manager’s judgment about particular investments, or its evaluation of the risks, potential returns and correlation properties of the various risk premia in which the Fund invests, prove to be incorrect. The manager’s allocation of Fund assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Trading models used by the manager for securities selection and asset allocation may become outdated and the historical patterns upon which the models are based may weaken or disappear. There can be no assurance that the factor-based risk premia investment strategies utilized by the manager will enhance Fund performance, reduce volatility or reduce potential loss. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. Certain derivatives have the potential for unlimited loss. Investing in derivatives and the use of foreign currency techniques involve special risks and may not achieve the anticipated benefits and/or may result in losses to the Fund. Other risks include illiquidity, mispricing or improper valuation of the derivative, and imperfect correlation between the value of the derivative and the underlying instrument. The Fund may realize losses when a counterparty fails to perform as promised. Currency management strategies could result in losses to the Fund if currencies do not perform as the manager expects. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in an issuer’s financial strength or in a security’s credit rating may affect its value. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they’ve been valued. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks or adverse developments in such areas of focus than a Fund that invests in a wider variety of countries, regions, industries or sectors or investments. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the period 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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 × $ 7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different ETFs. 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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20-9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20-9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 966.80 | $ | 3.30 | $ | 1,021.71 | $ | 3.40 | 0.61 | % |
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 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
26 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty High Yield Corporate ETF
Six Months Ended (unaudited) | Year ended March 31, | |||||||||||
2020 | 2019a | |||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $ | 22.67 | $ | 25.45 | $ | 25.00 | ||||||
|
| |||||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.63 | 1.33 | 1.21 | |||||||||
Net realized and unrealized gains (losses) | 2.76 | (2.51 | ) | 0.49 | ||||||||
|
| |||||||||||
Total from investment operations | 3.39 | (1.18 | ) | 1.70 | ||||||||
|
| |||||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.83 | ) | (1.56 | ) | (1.23 | ) | ||||||
Net realized gains | — | (0.04 | ) | (0.02 | ) | |||||||
|
| |||||||||||
Total Distributions | (0.83 | ) | (1.60 | ) | (1.25 | ) | ||||||
|
| |||||||||||
Net asset value, end of period | $ | 25.23 | $ | 22.67 | $ | 25.45 | ||||||
|
| |||||||||||
Total returnd | 15.10% | (5.12)% | 7.07% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.64% | 0.86% | 1.54% | |||||||||
Expenses net of waiver and payments by affiliates | 0.40% | 0.40% | 0.40% | |||||||||
Net investment income | 5.08% | 5.29% | 5.80% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $165,228 | $130,362 | $10,181 | |||||||||
Portfolio turnover ratef | 34.78% | g | 129.98% | g | 23.57% |
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 34.78% | 129.98% | —% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 27 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty High Yield Corporate ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 96.4% | ||||||||||||||
Airlines 1.1% | ||||||||||||||
a | Delta Air Lines Inc./SkyMiles IP Ltd., senior secured note, 144A, 4.75%, 10/20/28 | United States | 1,200,000 | $ | 1,246,780 | |||||||||
a | Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., senior secured note, first lien, 144A, 6.50%, 6/20/27 | United States | 500,000 | 521,875 | ||||||||||
|
| |||||||||||||
1,768,655 | ||||||||||||||
|
| |||||||||||||
Automobiles & Components 3.4% | ||||||||||||||
Adient U.S. LLC, | ||||||||||||||
a senior secured note, 144A, 7.00%, 5/15/26 | United States | 1,200,000 | 1,287,144 | |||||||||||
a senior note, 144A, 9.00%, 4/15/25 | United States | 600,000 | 662,625 | |||||||||||
Dana Inc., senior note, 5.625%, 6/15/28 | United States | 1,400,000 | 1,447,789 | |||||||||||
a | Navistar International Corp., senior note, 144A, 6.625%, 11/01/25 | United States | 600,000 | 616,875 | ||||||||||
The Goodyear Tire and Rubber Co., senior note, 9.50%, 5/31/25 | United States | 1,500,000 | 1,630,358 | |||||||||||
|
| |||||||||||||
5,644,791 | ||||||||||||||
|
| |||||||||||||
Capital Goods 8.3% | ||||||||||||||
a | Beacon Roofing Supply Inc., senior note, 144A, 4.875%, 11/01/25 | United States | 2,000,000 | 1,963,630 | ||||||||||
a | Cemex SAB de CV, senior secured note, 5.200%, 5.20%, 9/17/30 | Mexico | 1,200,000 | 1,207,380 | ||||||||||
a | Cloud Crane LLC, secured note, second lien, 144A, 10.125%, 8/01/24 | United States | 700,000 | 711,448 | ||||||||||
a | Harsco Corp., senior note, 144A, 5.75%, 7/31/27 | United States | 1,100,000 | 1,117,187 | ||||||||||
Jeld-Wen Inc., | ||||||||||||||
a senior bond, 144A, 4.875%, 12/15/27 | United States | 1,600,000 | 1,637,080 | |||||||||||
a senior note, 144A, 4.625%, 12/15/25 | United States | 500,000 | 504,323 | |||||||||||
a | NCI Building Systems Inc., senior secured note, 144A, 8.00%, 4/15/26 | United States | 2,500,000 | 2,631,250 | ||||||||||
a | Summit Materials LLC/Summit Materials Finance Corp., senior note, 144A, 5.25%, 1/15/29 | United States | 900,000 | 938,812 | ||||||||||
a | The Manitowoc Co. Inc., secured note, second lien, 144A, 9.00%, 4/01/26 | United States | 400,000 | 414,000 | ||||||||||
a | TransDigm Inc., senior secured note, 144A, 6.25%, 3/15/26 | United States | 600,000 | 629,883 | ||||||||||
a | Vertical Holdco GmbH, 144A, 7.625%, 7/15/28 | Germany | 300,000 | 317,625 | ||||||||||
a | Vertical U.S. Newco Inc., senior note, 144A, 5.25%, 7/15/27 | Germany | 600,000 | 624,684 | ||||||||||
WESCO Distribution Inc., | ||||||||||||||
a senior note, 144A, 7.125%, 6/15/25 | United States | 500,000 | 545,313 | |||||||||||
a senior note, 144A, 7.25%, 6/15/28 | United States | 400,000 | 438,832 | |||||||||||
|
| |||||||||||||
13,681,447 | ||||||||||||||
|
| |||||||||||||
Commercial & Professional Services 2.8% | ||||||||||||||
a | Ahern Rentals Inc., second note, senior lien, 144A, 7.375%, 5/15/23 | United States | 1,500,000 | 800,625 | ||||||||||
H&E Equipment Services Inc., senior note, 5.625%, 9/01/25 | United States | 1,500,000 | 1,565,625 | |||||||||||
a | Herc Holdings Inc., senior note, 144A, 5.50%, 7/15/27 | United States | 1,600,000 | 1,658,440 | ||||||||||
a | Prime Security Services Borrower LLC/Prime Finance Inc., senior secured note, first lien, 144A, 3.375%, 8/31/27 | United States | 600,000 | 577,875 | ||||||||||
|
| |||||||||||||
4,602,565 | ||||||||||||||
|
| |||||||||||||
Consumer Durables & Apparel 1.8% | ||||||||||||||
a | Ashton Woods USA LLC/Ashton Woods Finance Co., senior note, 144A, 9.875%, 4/01/27 | United States | 2,400,000 | 2,648,544 | ||||||||||
a | Williams Scotsman International Inc., senior secured note, 144A, 4.625%, 8/15/28 | United States | 400,000 | 402,366 | ||||||||||
|
| |||||||||||||
3,050,910 | ||||||||||||||
|
| |||||||||||||
Consumer Services 3.4% | ||||||||||||||
a,b | 24 Hour Holdings III LLC, senior note, 144A, 8.00%, 6/01/22 | United States | 800,000 | 2,500 | ||||||||||
a | Boyd Gaming Corp., senior note, 144A, 8.625%, 6/01/25 | United States | 1,200,000 | 1,317,036 | ||||||||||
a | Downstream Development Authority of Quapaw Tribe of the Oklahoma, secured note, 144A, 10.50%, 2/15/23 | United States | 100,000 | 92,365 | ||||||||||
a | Golden Nugget Inc., senior note, 144A, 6.75%, 10/15/24 | United States | 400,000 | 334,500 | ||||||||||
a | International Game Technology PLC, senior secured note, first lien, 144A, 5.25%, 1/15/29 | United States | 400,000 | 405,142 |
28 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Consumer Services (continued) | ||||||||||||||
a | Melco Resorts Finance Ltd., senior note, 144A, 5.75%, 7/21/28 | Hong Kong | 1,200,000 | $ | 1,223,749 | |||||||||
a | Vail Resorts Inc., senior note, 144A, 6.25%, 5/15/25 | United States | 800,000 | 850,000 | ||||||||||
a | Wynn Resorts Finance LLC/Wynn Resorts Capital Corp., senior note, 144A, 7.75%, 4/15/25 | United States | 1,300,000 | 1,378,390 | ||||||||||
|
| |||||||||||||
5,603,682 | ||||||||||||||
|
| |||||||||||||
Diversified Financials 6.5% | ||||||||||||||
a | Five Point Operating Co. LP/Five Point Capital Corp., senior note, 144A, 7.875%, 11/15/25 | United States | 2,000,000 | 2,004,000 | ||||||||||
HAT Holdings I LLC/HAT Holdings II LLC, | ||||||||||||||
a senior note, 144A, 6.00%, 4/15/25 | United States | 700,000 | 746,585 | |||||||||||
a senior note, 144A, 5.25%, 7/15/24 | United States | 600,000 | 626,430 | |||||||||||
MPT Operating Partnership LP/MPT Finance Corp., senior bond, 5.00%, 10/15/27 | United States | 1,400,000 | 1,462,265 | |||||||||||
a | Park Intermediate Holdings LLC/PK Domestic Property LLC/PK Finance Co-Issuer, senior note, 144A, 5.875%, 10/01/28 | United States | 500,000 | 502,500 | ||||||||||
a | PennyMac Financial Services Inc., senior note, 144A, 5.375%, 10/15/25 | United States | 1,200,000 | 1,216,500 | ||||||||||
a | Quicken Loans LLC/Quicken Loans Co-Issuer Inc., senior note, 144A, 3.625%, 3/01/29 | United States | 600,000 | 595,875 | ||||||||||
a | Quicken Loans LLC/Quicken Loans Co.-Issuer Inc., senior bond, 144A, 3.875%, 3/01/31 | United States | 900,000 | 891,000 | ||||||||||
Springleaf Finance Corp., | ||||||||||||||
senior bond, 5.375%, 11/15/29 | United States | 1,100,000 | 1,146,750 | |||||||||||
senior note, 6.625%, 1/15/28 | United States | 900,000 | 1,000,341 | |||||||||||
a | The Howard Hughes Corp., senior note, 144A, 5.375%, 8/01/28 | United States | 500,000 | 499,600 | ||||||||||
|
| |||||||||||||
10,691,846 | ||||||||||||||
|
| |||||||||||||
Energy 12.1% | ||||||||||||||
Apache Corp., senior note, 4.625%, 11/15/25 | United States | 400,000 | 382,000 | |||||||||||
Cenovus Energy Inc., | ||||||||||||||
senior bond, 5.40%, 6/15/47 | Canada | 100,000 | 84,455 | |||||||||||
senior bond, 6.75%, 11/15/39 | Canada | 1,100,000 | 1,105,430 | |||||||||||
senior note, 5.375%, 7/15/25 | Canada | 400,000 | 385,458 | |||||||||||
Cheniere Energy Inc. 4.625%, 10/15/28 | United States | 900,000 | 925,312 | |||||||||||
Cheniere Energy Partners LP, | ||||||||||||||
senior note, 4.50%, 10/01/29 | United States | 1,900,000 | 1,951,281 | |||||||||||
senior secured note, first lien, 5.25%, 10/01/25 | United States | 600,000 | 614,400 | |||||||||||
Comstock Resources Inc., senior note, 9.75%, 8/15/26 | United States | 600,000 | 616,245 | |||||||||||
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp., | ||||||||||||||
a senior note, 144A, 5.625%, 5/01/27 | United States | 1,600,000 | 1,433,232 | |||||||||||
senior note, 5.75%, 4/01/25 | United States | 600,000 | 547,500 | |||||||||||
a | CSI Compressco LP/CSI Compressco Finance Inc., senior secured note, first lien, 144A, 7.50%, 4/01/25 | United States | 1,100,000 | 971,316 | ||||||||||
a | CVR Energy Inc., senior note, 144A, 5.25%, 2/15/25 | United States | 2,500,000 | 2,182,812 | ||||||||||
Endeavor Energy Resources LP/EER Finance Inc., | ||||||||||||||
a senior bond, 144A, 5.75%, 1/30/28 | United States | 1,000,000 | 1,006,875 | |||||||||||
a senior note, 144A, 6.625%, 7/15/25 | United States | 500,000 | 514,530 | |||||||||||
EnLink Midstream LLC, senior bond, 5.375%, 6/01/29 | United States | 1,100,000 | 893,750 | |||||||||||
EnLink Midstream Partners LP, senior note, 4.15%, 6/01/25 | United States | 1,900,000 | 1,640,707 | |||||||||||
Martin Midstream Partners LP, | ||||||||||||||
a senior note, second lien, 144A, 11.50%, 2/28/25 | United States | 86,248 | 78,486 | |||||||||||
a senior secured note, 144A, 10.00%, 2/15/21 | United States | 18,992 | 19,752 | |||||||||||
a | Nabors Industries Ltd., senior note, 144A, 7.25%, 1/15/26 | United States | 1,100,000 | 545,875 | ||||||||||
Occidental Petroleum Corp., | ||||||||||||||
senior bond, 6.45%, 9/15/36 | United States | 300,000 | 255,569 | |||||||||||
senior bond, 6.625%, 9/01/30 | United States | 200,000 | 184,875 | |||||||||||
senior bond, 8.875%, 7/15/30 | United States | 900,000 | 928,687 | |||||||||||
senior note, FRN, 3.142%, 8/15/22 | United States | 100,000 | 91,292 | |||||||||||
senior note, 5.55%, 3/15/26 | United States | 1,000,000 | 907,330 |
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Energy (continued) | ||||||||||||||
QEP Resources Inc., senior note, 5.625%, 3/01/26 | United States | 500,000 | $ | 285,000 | ||||||||||
a | Seven Generations Energy Ltd., senior note, 144A, 5.375%, 9/30/25 | Canada | 800,000 | 759,508 | ||||||||||
Sunoco LP/Sunoco Finance Corp., senior note, 6.00%, 4/15/27 | United States | 500,000 | 514,688 | |||||||||||
a | Viper Energy Partners LP, senior note, 144A, 5.375%, 11/01/27 | United States | 200,000 | 197,338 | ||||||||||
|
| |||||||||||||
20,023,703 | ||||||||||||||
|
| |||||||||||||
Food, Beverage & Tobacco 4.4% | ||||||||||||||
B&G Foods Inc., senior note, 5.25%, 4/01/25 | United States | 2,100,000 | 2,159,850 | |||||||||||
a | JBS USA LUX SA/JBS USA Food Co./JBS USA Finance Inc., senior bond, 144A, 5.50%, 1/15/30 | United States | 2,600,000 | 2,837,250 | ||||||||||
Kraft Heinz Foods Co., | ||||||||||||||
a senior bond, 144A, 4.25%, 3/01/31 | United States | 500,000 | 549,571 | |||||||||||
a senior note, 144A, 3.875%, 5/15/27 | United States | 300,000 | 320,193 | |||||||||||
a | Post Holdings Inc., senior bond, 144A, 4.625%, 4/15/30 | United States | 1,300,000 | 1,339,000 | ||||||||||
|
| |||||||||||||
7,205,864 | ||||||||||||||
|
| |||||||||||||
Health Care Equipment & Services 5.3% | ||||||||||||||
Centene Corp., senior note, 4.25%, 12/15/27 | United States | 1,700,000 | 1,782,866 | |||||||||||
CHS/Community Health Systems Inc., senior secured note, first lien, 6.25%, 3/31/23 | United States | 1,600,000 | 1,566,000 | |||||||||||
HCA Inc., senior bond, 3.50%, 9/01/30 | United States | 2,300,000 | 2,346,567 | |||||||||||
a | MEDNAX Inc., senior note, 144A, 6.25%, 1/15/27 | United States | 600,000 | 623,238 | ||||||||||
a | MPH Acquisition Holdings LLC, senior note, 144A, 7.125%, 6/01/24 | United States | 1,400,000 | 1,440,250 | ||||||||||
a | Tenet Healthcare Corp., senior note, 144A, 6.125%, 10/01/28 | United States | 1,000,000 | 975,625 | ||||||||||
|
| |||||||||||||
8,734,546 | ||||||||||||||
|
| |||||||||||||
Household & Personal Products 0.9% | ||||||||||||||
Weekley Homes LLC/Weekley Finance Corp., senior note, 4.875%, 9/15/28 | United States | 1,500,000 | 1,518,750 | |||||||||||
|
| |||||||||||||
Insurance 2.5% | ||||||||||||||
a | Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, senior note, 144A, 6.75%, 10/15/27 | United States | 1,000,000 | 1,050,810 | ||||||||||
MGIC Investment Corp., senior note, 5.25%, 8/15/28 | United States | 500,000 | 518,288 | |||||||||||
a | NMI Holdings Inc., secured note, 144A, 7.375%, 6/01/25 | United States | 1,200,000 | 1,284,234 | ||||||||||
Radian Group Inc., senior note, 6.625%, 3/15/25 | United States | 1,200,000 | 1,268,250 | |||||||||||
|
| |||||||||||||
4,121,582 | ||||||||||||||
|
| |||||||||||||
Materials 11.3% | ||||||||||||||
a,c | Anagram International Inc., second lien, 144A, PIK, 10.00%, 8/15/26 | United States | 58,825 | 50,590 | ||||||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA Inc., | ||||||||||||||
a senior note, 144A, 5.25%, 8/15/27 | Luxembourg | 700,000 | 714,000 | |||||||||||
a senior secured note, first lien, 144A, 5.25%, 4/30/25 | Mult | 400,000 | 418,538 | |||||||||||
a | Element Solutions Inc., senior note, 144A, 3.875%, 9/01/28 | United States | 800,000 | 786,500 | ||||||||||
a | Gates Global LLC/Gates Corp., senior note, 144A, 6.25%, 1/15/26 | United States | 1,800,000 | 1,852,506 | ||||||||||
a | Illuminate Buyer LLC/Illuminate Holdings IV Inc., senior note, 144A, 9.00%, 7/01/28 | United States | 1,000,000 | 1,073,750 | ||||||||||
a | Joseph T Ryerson & Son Inc., senior secured note, 144A, 8.50%, 8/01/28 | United States | 1,200,000 | 1,266,000 | ||||||||||
Mauser Packaging Solutions Holding Co., | ||||||||||||||
a senior note, 144A, 7.25%, 4/15/25 | United States | 1,700,000 | 1,602,250 | |||||||||||
a senior note, 144A, 8.50%, 4/15/24 | United States | 500,000 | 520,000 | |||||||||||
a | Neon Holdings Inc., senior note, 144A, 10.125%, 4/01/26 | United States | 150,000 | 159,000 | ||||||||||
a | Novelis Corp., senior bond, 144A, 4.75%, 1/30/30 | United States | 400,000 | 391,194 | ||||||||||
a | Owens-Brockway Glass Container Inc., senior note, 144A, 5.875%, 8/15/23 | United States | 2,000,000 | 2,105,000 | ||||||||||
a | Plastipak Holdings Inc., senior note, 144A, 6.25%, 10/15/25 | United States | 500,000 | 500,937 | ||||||||||
a | Rain CII Carbon LLC/CII Carbon Corp., senior note, second lien, 144A, 7.25%, 4/01/25 | United States | 400,000 | 391,246 |
30 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Materials (continued) | ||||||||||||||
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA, senior secured note, 4.000%, 4.00%, 10/15/27 | United States | 1,300,000 | $ | 1,310,010 | ||||||||||
a | Sealed Air Corp., senior bond, 144A, 5.125%, 12/01/24 | United States | 1,400,000 | 1,520,750 | ||||||||||
a | Standard Industries Inc., senior bond, 144A, 5.00%, 2/15/27 | United States | 1,000,000 | 1,042,905 | ||||||||||
a | SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., | United States | 300,000 | 271,356 | ||||||||||
a | TPC Group Inc., secured note, 144A, 10.50%, 8/01/24 | United States | 600,000 | 505,188 | ||||||||||
a | Trivium Packaging Finance BV, senior secured note, 144A, 5.50%, 8/15/26 | Netherlands | 2,100,000 | 2,179,747 | ||||||||||
|
| |||||||||||||
18,661,467 | ||||||||||||||
|
| |||||||||||||
Media & Entertainment 14.5% | ||||||||||||||
a | Banijay Entertainment SASU, senior note, 144A, 5.375%, 3/01/25 | France | 1,200,000 | 1,211,250 | ||||||||||
a | Cablevision Lightpath LLC, senior note, 144A, 3.875%, 9/15/27 | United States | 700,000 | 701,313 | ||||||||||
a | Caesars Entertainment Inc., senior secured note, 144A, 6.25%, 7/01/25 | United States | 900,000 | 939,379 | ||||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., | ||||||||||||||
a 144A, 4.25%, 2/01/31 | United States | 200,000 | 207,590 | |||||||||||
a senior bond, 144A, 4.50%, 8/15/30 | United States | 2,000,000 | 2,102,600 | |||||||||||
a senior bond, 144A, 5.375%, 6/01/29 | United States | 1,000,000 | 1,084,890 | |||||||||||
a | Clear Channel International BV, senior secured note, first lien, 144A, 6.625%, 8/01/25 | United States | 500,000 | 512,975 | ||||||||||
a | Clear Channel Worldwide Holdings Inc., senior secured note, first lien, 144A, 5.125%, 8/15/27 | United States | 700,000 | 673,050 | ||||||||||
a | Colt Merger Sub Inc., first lien, 144A, 5.75%, 7/01/25 | United States | 400,000 | 413,000 | ||||||||||
a | CSC Holdings LLC, senior note, 144A, 7.50%, 4/01/28 | United States | 2,400,000 | 2,654,676 | ||||||||||
a | Diamond Sports Group LLC/Diamond Sports Finance Co., senior note, 144A, 6.625%, 8/15/27 | United States | 600,000 | 312,750 | ||||||||||
DISH Network Corp., | ||||||||||||||
senior bond, 5.875%, 7/15/22 | United States | 1,300,000 | 1,353,300 | |||||||||||
a senior note, 144A, 7.375%, 7/01/28 | United States | 500,000 | 515,625 | |||||||||||
a | Gray Escrow Inc., senior note, 144A, 7.00%, 5/15/27 | United States | 2,700,000 | 2,930,546 | ||||||||||
a | LCPR Senior Secured Financing DAC, senior secured note, first lien, 144A, 6.75%, 10/15/27 | United States | 1,800,000 | 1,883,250 | ||||||||||
Netflix Inc., | ||||||||||||||
senior bond, 5.75%, 3/01/24 | United States | 1,100,000 | 1,214,812 | |||||||||||
senior bond, 5.875%, 2/15/25 | United States | 300,000 | 338,807 | |||||||||||
Nexstar Broadcasting Inc., | ||||||||||||||
a senior note, 144A, 4.75%, 11/01/28 | United States | 300,000 | 306,750 | |||||||||||
a senior note, 144A, 5.625%, 7/15/27 | United States | 600,000 | 630,309 | |||||||||||
a | Sinclair Television Group Inc., senior bond, 144A, 5.50%, 3/01/30 | United States | 900,000 | 836,271 | ||||||||||
a | Six Flags Theme Parks Inc., senior secured note, first lien, 144A, 7.00%, 7/01/25 | United States | 400,000 | 426,250 | ||||||||||
a | Univision Communications Inc., senior note, 144A, 6.625%, 6/01/27 | United States | 1,500,000 | 1,468,125 | ||||||||||
a | Virgin Media Secured Finance PLC, senior secured bond, 144A, 4.50%, 8/15/30 | United Kingdom | 1,300,000 | 1,336,972 | ||||||||||
|
| |||||||||||||
24,054,490 | ||||||||||||||
|
| |||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 4.5% | ||||||||||||||
a | Bausch Health Americas Inc., senior note, 144A, 9.25%, 4/01/26 | United States | 2,000,000 | 2,202,600 | ||||||||||
a | Catalent Pharma Solutions Inc., senior note, 144A, 5.00%, 7/15/27 | United States | 1,400,000 | 1,458,366 | ||||||||||
a | Emergent BioSolutions Inc., senior note, 144A, 3.875%, 8/15/28 | United States | 900,000 | 905,787 | ||||||||||
a | Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27 | United States | 1,000,000 | 1,048,990 | ||||||||||
Teva Pharmaceutical Finance Netherlands III BV, senior bond, 3.15%, 10/01/26 | Israel | 2,000,000 | 1,768,750 | |||||||||||
|
| |||||||||||||
7,384,493 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Real Estate 0.4% | ||||||||||||||
a | SBA Communications Corp., senior note, 144A, 3.875%, 2/15/27 | United States | 600,000 | $ | 609,750 | |||||||||
|
| |||||||||||||
Retailing 1.8% | ||||||||||||||
a | FirstCash Inc., senior note, 144A, 4.625%, 9/01/28 | United States | 700,000 | 717,062 | ||||||||||
a | L Brands Inc., senior bond, 144A, 6.625%, 10/01/30 | United States | 500,000 | 510,000 | ||||||||||
Lithia Motors Inc., | ||||||||||||||
a senior note, 144A, 4.625%, 1/15/31 | United States | 300,000 | 300,000 | |||||||||||
a senior note, 144A, 4.625%, 12/15/27 | United States | 1,300,000 | 1,345,500 | |||||||||||
Party City Holdings Inc. 5.75%, 7/15/25 | United States | 108,825 | 81,619 | |||||||||||
|
| |||||||||||||
2,954,181 | ||||||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||||||||
a | Amkor Technology Inc., senior note, 144A, 6.625%, 9/15/27 | United States | 700,000 | 752,630 | ||||||||||
|
| |||||||||||||
Software & Services 0.8% | ||||||||||||||
a | Blackboard Inc., secured note, second lien, 144A, 10.375%, 11/15/24 | United States | 500,000 | 502,812 | ||||||||||
Gartner Inc., | ||||||||||||||
a senior bond, 144A, 3.75%, 10/01/30 | United States | 300,000 | 304,028 | |||||||||||
a senior note, 144A, 4.50%, 7/01/28 | United States | 500,000 | 524,475 | |||||||||||
|
| |||||||||||||
1,331,315 | ||||||||||||||
|
| |||||||||||||
Technology Hardware & Equipment 1.8% | ||||||||||||||
a | CommScope Inc., senior secured note, 144A, 7.125%, 7/01/28 | United States | 800,000 | 823,056 | ||||||||||
a | CommScope Technologies LLC, senior bond, 144A, 6.00%, 6/15/25 | United States | 467,000 | 473,958 | ||||||||||
a | Presidio Holdings Inc., senior note, 144A, 8.25%, 2/01/28 | United States | 100,000 | 105,063 | ||||||||||
Tempo Acquisition LLC/Tempo Acquisition Finance Corp., | ||||||||||||||
a senior note, 144A, 5.75%, 6/01/25 | United States | 600,000 | 630,750 | |||||||||||
a senior note, 144A, 6.75%, 6/01/25 | United States | 1,000,000 | 1,022,485 | |||||||||||
|
| |||||||||||||
3,055,312 | ||||||||||||||
|
| |||||||||||||
Telecommunication Services 4.2% | ||||||||||||||
a | Altice France Holding SA, senior note, 144A, 10.50%, 5/15/27 | Luxembourg | 2,300,000 | 2,560,187 | ||||||||||
a | Altice France SA, senior note, first lien, 144A, 8.125%, 2/01/27 | France | 2,300,000 | 2,508,966 | ||||||||||
Sprint Corp., senior note, 7.625%, 2/15/25 | United States | 700,000 | 820,313 | |||||||||||
a | Vmed O2 UK Financing I PLC, senior secured bod, 4.25%, 4.25%, 1/31/31 | United Kingdom | 500,000 | 510,938 | ||||||||||
a | Zayo Group Holdings Inc., senior note, 144A, 4.00%, 3/01/27 | United States | 500,000 | 492,765 | ||||||||||
|
| |||||||||||||
6,893,169 | ||||||||||||||
|
| |||||||||||||
Transportation 0.4% | ||||||||||||||
a | DAE Funding LLC, senior note, 144A, 5.75%, 11/15/23 | United Arab Emirates | 600,000 | 606,750 | ||||||||||
|
| |||||||||||||
Utilities 3.8% | ||||||||||||||
Calpine Corp., | ||||||||||||||
a first lien, 144A, 4.50%, 2/15/28 | United States | 300,000 | 307,746 | |||||||||||
a senior note, 144A, 5.125%, 3/15/28 | United States | 700,000 | 725,490 | |||||||||||
Clearway Energy Operating LLC, senior bond, 5.00%, 9/15/26 | United States | 1,600,000 | 1,669,696 | |||||||||||
Talen Energy Supply LLC, | ||||||||||||||
senior note, 6.50%, 6/01/25 | United States | 500,000 | 328,700 | |||||||||||
a senior note, 144A, 7.625%, 6/01/28 | United States | 1,200,000 | 1,202,250 | |||||||||||
a | Vistra Operations Co. LLC, senior note, 144A, 5.50%, 9/01/26 | United States | 2,000,000 | 2,090,000 | ||||||||||
|
| |||||||||||||
6,323,882 | ||||||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $158,841,106) | 159,275,780 | |||||||||||||
|
|
32 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Common Stocks 0.0%† | ||||||||||||||
Retailing 0.0%† | ||||||||||||||
d | Party City Holdco Inc. | United States | 11,074 | $ | 28,792 | |||||||||
|
| |||||||||||||
Total Common Stocks (Cost $18,161) | 28,792 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 159,304,572 | |||||||||||||
|
| |||||||||||||
Short Term Investments 2.6% | ||||||||||||||
U.S. Government & Agency Securities (Cost $4,330,000) 2.6% | ||||||||||||||
e | FHLB, 10/01/20 | 4,330,000 | 4,330,000 | |||||||||||
|
| |||||||||||||
Total Investments (Cost $163,189,267) 99.0% | 163,634,572 | |||||||||||||
Other Assets, less Liabilities 1.0% | 1,593,706 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 165,228,278 | ||||||||||||
|
|
See Abbreviations on Page 80.
†Rounds to less than 0.1% of net assets.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $117,672,512, representing 71.2% of net assets.
bDefaulted Securities.
cIncome may be received in additional securities and/or cash.
dNon-income producing.
eThe security was issued on a discount basis with no stated coupon rate.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 33 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty International Aggregate Bond ETF
Six Months Ended (unaudited) | Year Ended March 31, | |||||||||||
2020 | 2019a | |||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $ | 24.95 | $ | 24.56 | $ | 25.00 | ||||||
|
| |||||||||||
Income from investment operationsb: | ||||||||||||
Net investment income (loss)c | (0.01 | ) | 0.22 | 0.39 | ||||||||
Net realized and unrealized gains (losses) | 0.50 | 0.78 | (0.40 | ) | ||||||||
|
| |||||||||||
Total from investment operations | 0.49 | 1.00 | (0.01 | ) | ||||||||
|
| |||||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.11 | ) | (0.09 | ) | (0.43 | ) | ||||||
Net realized gains | — | (0.52 | ) | — | ||||||||
|
| |||||||||||
Total Distributions | (0.11 | ) | (0.61 | ) | (0.43 | ) | ||||||
|
| |||||||||||
Net asset value, end of period | $ | 25.33 | $ | 24.95 | $ | 24.56 | ||||||
|
| |||||||||||
Total returnd | 1.97% | 4.05% | 0.00% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.54% | 3.23% | 2.32% | |||||||||
Expenses net of waiver and payments by affiliates | 0.25% | 0.28% | 0.35% | |||||||||
Net investment income (loss) | (0.08)% | 0.87% | 1.91% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $229,266 | $4,989 | $4,912 | |||||||||
Portfolio turnover ratef | 10.44% | g | 66.78% | g | 50.32% |
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 10.44% | 66.78% | —% |
34 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty International Aggregate Bond ETF
Principal Amount* | Value | |||||||||||||
Foreign Government and Agency Securities 87.3% | ||||||||||||||
Australia 3.1% | ||||||||||||||
a | Australia Government Bond, senior bond, Reg S, 2.75%, 6/21/35 | 1,800,000 | AUD | $ | 1,574,954 | |||||||||
Government of Australia, | ||||||||||||||
a senior bond, 137, Reg S, 2.75%, 4/21/24 | 1,800,000 | AUD | 1,406,269 | |||||||||||
a senior bond, 149, Reg S, 2.25%, 5/21/28 | 1,800,000 | AUD | 1,446,100 | |||||||||||
a | New South Wales Treasury Corp., senior bond, Reg S, 3.00%, 5/20/27 | 1,100,000 | AUD | 906,074 | ||||||||||
a,b | Queensland Treasury Corp., senior bond, 144A, Reg S, 3.25%, 8/21/29 | 1,100,000 | AUD | 936,876 | ||||||||||
a | Western Australian Treasury Corp., senior note, 26, Reg S, 3.00%, 10/21/26 | 1,100,000 | AUD | 902,739 | ||||||||||
|
| |||||||||||||
7,173,012 | ||||||||||||||
|
| |||||||||||||
Austria 1.4% | ||||||||||||||
Government of Austria, | ||||||||||||||
a,b 144A, Reg S, 1.20%, 10/20/25 | 1,100,000 | EUR | 1,411,507 | |||||||||||
a,b senior bond, 144A, Reg S, 1.50%, 2/20/47 | 1,100,000 | EUR | 1,754,890 | |||||||||||
|
| |||||||||||||
3,166,397 | ||||||||||||||
|
| |||||||||||||
Belgium 1.8% | ||||||||||||||
a | Government of Belgium, Reg S, 1.25%, 4/22/33 | 3,000,000 | EUR | 4,147,025 | ||||||||||
|
| |||||||||||||
Canada 4.6% | ||||||||||||||
Government of Canada, | ||||||||||||||
1.25%, 3/01/25 | 3,400,000 | CAD | 2,658,769 | |||||||||||
1.25%, 6/01/30 | 600,000 | CAD | 480,343 | |||||||||||
2.75%, 6/01/22 | 4,820,000 | CAD | 3,774,192 | |||||||||||
5.00%, 6/01/37 | 2,100,000 | CAD | 2,596,316 | |||||||||||
senior bond, 2.00%, 12/01/51 | 1,050,000 | CAD | 976,254 | |||||||||||
|
| |||||||||||||
10,485,874 | ||||||||||||||
|
| |||||||||||||
China 1.7% | ||||||||||||||
China Development Bank, | ||||||||||||||
senior note, 2003, 3.23%, 1/10/25 | 13,000,000 | CNY | 1,896,302 | |||||||||||
senior note, 2004, 3.43%, 1/14/27 | 13,000,000 | CNY | 1,897,604 | |||||||||||
|
| |||||||||||||
3,793,906 | ||||||||||||||
|
| |||||||||||||
Cyprus 1.0% | ||||||||||||||
a | Government of Cyprus, Reg S, 1.50%, 4/16/27 | 1,800,000 | EUR | 2,278,001 | ||||||||||
|
| |||||||||||||
France 4.4% | ||||||||||||||
French Republic Government Bond OAT, | ||||||||||||||
a,b 144A, Reg S, 1.50%, 5/25/50 | 900,000 | EUR | 1,384,880 | |||||||||||
a Reg S, 11/25/29 | 2,600,000 | EUR | 3,138,385 | |||||||||||
Government of France, | ||||||||||||||
a,b 144A, Reg S, .75%, 5/25/52 | 900,000 | EUR | 1,153,578 | |||||||||||
a Reg S, 1.00%, 11/25/25 | 3,000,000 | EUR | 3,809,866 | |||||||||||
a,c senior note, Reg S, 5/25/22 | 600,000 | EUR | 711,140 | |||||||||||
|
| |||||||||||||
10,197,849 | ||||||||||||||
|
| |||||||||||||
Germany 21.4% | ||||||||||||||
a,c | Bundesobligation, Reg S, 4/11/25 | 12,500,000 | EUR | 15,145,941 | ||||||||||
Government of Germany, | ||||||||||||||
a Reg S, 1.50%, 9/04/22 | 17,170,000 | EUR | 20,997,261 | |||||||||||
a Reg S, 4.25%, 7/04/39 | 1,950,000 | EUR | 4,302,904 | |||||||||||
a Reg S, 5.50%, 1/04/31 | 1,010,000 | EUR | 1,941,143 | |||||||||||
a Strip, Reg S, 10/08/21 | 3,100,000 | EUR | 3,658,819 | |||||||||||
KFW, senior note, 2.05%, 2/16/26 | 290,000,000 | JPY | 3,098,933 | |||||||||||
|
| |||||||||||||
49,145,001 | ||||||||||||||
|
| |||||||||||||
Hungary 0.3% | ||||||||||||||
Government of Hungary, 6.75%,10/22/28 | 170,000,000 | HUF | 744,650 | |||||||||||
|
| |||||||||||||
Indonesia 0.1% | ||||||||||||||
Indonesia Treasury Bond, senior bond, 8.25%, 5/15/36 | 3,500,000,000 | IDR | 249,634 | |||||||||||
|
|
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty International Aggregate Bond ETF (continued)
Principal Amount* | Value | |||||||||||||
Foreign Government and Agency Securities (continued) | ||||||||||||||
Ireland 2.0% | ||||||||||||||
a | Government of Ireland, Reg S, 1.50%, 5/15/50 | 3,000,000 | EUR | $ | 4,550,543 | |||||||||
|
| |||||||||||||
Italy 4.4% | ||||||||||||||
a,b | Italy Buoni Poliennali Del Tesoro, senior bond, 144A, Reg S, 2.45%, 9/01/50 | 970,000 | EUR | 1,323,026 | ||||||||||
Italy Treasury Bond, | ||||||||||||||
senior bond, 1.25%, 12/01/26 | 1,550,000 | EUR | 1,908,429 | |||||||||||
a,bsenior bond, 144A, Reg S, 4.00%, 2/01/37 | 1,380,000 | EUR | 2,250,584 | |||||||||||
senior note, 1.20%, 4/01/22 | 3,800,000 | EUR | 4,550,742 | |||||||||||
|
| |||||||||||||
10,032,781 | ||||||||||||||
|
| |||||||||||||
Japan 20.4% | ||||||||||||||
Development Bank of Japan, senior bond, 2.30%, 3/19/26 | 950,000,000 | JPY | 10,116,673 | |||||||||||
Government of Japan, | ||||||||||||||
senior bond, 1.00%, 12/20/35 | 1,700,000,000 | JPY | 17,904,744 | |||||||||||
senior bond, 1.50%, 3/20/33 | 250,000,000 | JPY | 2,767,723 | |||||||||||
Japan Government Thirty Year Bond, senior bond, 0.40%, 12/20/49 | 500,000,000 | JPY | 4,510,624 | |||||||||||
Japan Government Two Year Bond, senior bond, 0.10%, 4/01/22 | 1,200,000,000 | JPY | 11,427,852 | |||||||||||
|
| |||||||||||||
46,727,616 | ||||||||||||||
|
| |||||||||||||
Mexico 0.2% | ||||||||||||||
Government of Mexico, senior bond, M, 7.50%, 6/03/27 | 7,000,000 | dMXN | 352,196 | |||||||||||
|
| |||||||||||||
Netherlands 3.7% | ||||||||||||||
Government of Netherlands, | ||||||||||||||
aReg S, 0.50%, 7/15/26 | 2,500,000 | EUR | 3,125,285 | |||||||||||
a,bsenior bond, 144A, Reg S, 0.50%, 1/15/40 | 4,000,000 | EUR | 5,283,851 | |||||||||||
|
| |||||||||||||
8,409,136 | ||||||||||||||
|
| |||||||||||||
Poland 1.7% | ||||||||||||||
Government of Poland, | ||||||||||||||
2.50%, 7/25/27 | 6,000,000 | PLN | 1,708,457 | |||||||||||
5.75%, 4/25/29 | 6,000,000 | PLN | 2,136,183 | |||||||||||
|
| |||||||||||||
3,844,640 | ||||||||||||||
|
| |||||||||||||
Portugal 0.6% | ||||||||||||||
a,b | Portugal Obrigacoes do Tesouro OT, 144A, Reg S, 0.90%, 10/12/35 | 1,200,000 | EUR | 1,464,963 | ||||||||||
|
| |||||||||||||
Romania 1.0% | ||||||||||||||
a | Government of Romania, senior bond, Reg S, 2.00%, 1/28/32 | 2,000,000 | EUR | 2,317,752 | ||||||||||
|
| |||||||||||||
Slovenia 1.5% | ||||||||||||||
a | Slovenia Government Bond, senior bond, Reg S, 0.875%, 7/15/30 | 2,700,000 | EUR | 3,428,408 | ||||||||||
|
| |||||||||||||
South Africa 0.0%† | ||||||||||||||
Government of South Africa, senior bond, 7.00%, 2/28/31 | 500,000 | ZAR | 24,290 | |||||||||||
|
| |||||||||||||
Spain 3.5% | ||||||||||||||
Government of Spain, | ||||||||||||||
senior bond, 0.40%, 4/30/22 | 1,900,000 | EUR | 2,259,811 | |||||||||||
a,bsenior bond, 144A, Reg S, 1.85%, 7/30/35 | 2,460,000 | EUR | 3,413,796 | |||||||||||
a,bsenior bond, 144A, Reg S, 2.70%, 10/31/48 | 130,000 | EUR | 215,456 | |||||||||||
senior note, 1/31/25 | 1,900,000 | EUR | 2,256,356 | |||||||||||
|
| |||||||||||||
8,145,419 | ||||||||||||||
|
| |||||||||||||
e | Supranational 2.0% | |||||||||||||
Asian Development Bank, senior bond, 339-00-1, 2.35%, 6/21/27 | 120,000,000 | JPY | 1,335,935 | |||||||||||
a | European Investment Bank, senior bond, Reg S, 1.90%, 1/26/26 | 310,000,000 | JPY | 3,272,131 | ||||||||||
|
| |||||||||||||
4,608,066 | ||||||||||||||
|
|
36 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty International Aggregate Bond ETF (continued)
Principal Amount* | Value | |||||||||||||
Foreign Government and Agency Securities (continued) | ||||||||||||||
Sweden 1.5% | ||||||||||||||
Government of Sweden, | ||||||||||||||
a,b144A, Reg S, 1.50%, 11/13/23 | 10,000,000 | SEK | $ | 1,181,940 | ||||||||||
a,bsenior bond, 144A, Reg S, 0.125%, 5/12/31 | 10,000,000 | SEK | 1,132,885 | |||||||||||
Sweden Government Bond, senior bond, 0.75%, 5/12/28 | 10,000,000 | SEK | 1,198,266 | |||||||||||
|
| |||||||||||||
3,513,091 | ||||||||||||||
|
| |||||||||||||
United Kingdom 5.0% | ||||||||||||||
United Kingdom Treasury Bond, | ||||||||||||||
a Reg S, 1.75%, 9/07/37 | 1,925,000 | GBP | 2,932,515 | |||||||||||
a Reg S, 2.75%, 9/07/24 | 1,000,000 | GBP | 1,434,521 | |||||||||||
a Reg S, 3.50%, 7/22/68 | 685,000 | GBP | 1,893,821 | |||||||||||
a Reg S, 4.25%, 12/07/46 | 1,180,000 | GBP | 2,783,898 | |||||||||||
a Reg S, 4.75%, 12/07/30 | 1,300,000 | GBP | 2,441,818 | |||||||||||
|
| |||||||||||||
11,486,573 | ||||||||||||||
|
| |||||||||||||
Total Foreign Government and Agency Securities | 200,286,823 | |||||||||||||
|
| |||||||||||||
Corporate Bonds & Notes 4.5% | ||||||||||||||
Belgium 0.0%† | ||||||||||||||
a | Anheuser Busch Inbev SA/NV, senior note, Reg S, 1.50%, 3/17/25 | 60,000 | EUR | 75,133 | ||||||||||
|
| |||||||||||||
Czech Republic 0.1% | ||||||||||||||
a | Energo-Pro AS, senior note, Reg S, 4.00%, 12/07/22 | 200,000 | EUR | 225,395 | ||||||||||
|
| |||||||||||||
Denmark 0.2% | ||||||||||||||
a | Nordea Kredit Realkreditaktieselskab, secured bond, Reg S, 1.00%, 10/01/50 | 1,167,582 | DKK | 185,216 | ||||||||||
a | Nykredit Realkredit A/S, secured bond, Reg S, 1.00%, 10/01/50 | 1,156,021 | DKK | 183,146 | ||||||||||
|
| |||||||||||||
368,362 | ||||||||||||||
|
| |||||||||||||
France 0.6% | ||||||||||||||
a | Air Liquide Finance SA, senior note, Reg S, 1.375%, 4/02/30 | 500,000 | EUR | 653,627 | ||||||||||
a | Orange SA, senior note, Reg S, 1.375%, 3/20/28 | 500,000 | EUR | 635,829 | ||||||||||
|
| |||||||||||||
1,289,456 | ||||||||||||||
|
| |||||||||||||
Germany 0.9% | ||||||||||||||
a | Aroundtown SA, senior note, Reg S, 1.625%, 1/31/28 | 300,000 | EUR | 362,722 | ||||||||||
a | Bertelsmann SE & Co. KGaA, senior note, Reg S, 1.25%, 9/29/25 | 500,000 | EUR | 622,975 | ||||||||||
a | Deutsche Telekom AG, senior note, Reg S, 0.875%, 3/25/26 | 500,000 | EUR | 611,537 | ||||||||||
a,c | Siemens Financieringsmaatschappij NV, senior note, Reg S, 2/20/26 | 500,000 | EUR | 588,192 | ||||||||||
|
| |||||||||||||
2,185,426 | ||||||||||||||
|
| |||||||||||||
Romania 0.1% | ||||||||||||||
a | Globalworth Real Estate Investments Ltd., senior note, Reg S, 3.00%, 3/29/25 | 300,000 | EUR | 353,978 | ||||||||||
|
| |||||||||||||
United Kingdom 0.3% | ||||||||||||||
a | RELX Finance BV, senior note, Reg S, 0.50%, 3/10/28 | 500,000 | EUR | 588,721 | ||||||||||
|
| |||||||||||||
United States 2.3% | ||||||||||||||
AbbVie Inc., senior note, 1.375%, 5/17/24 | 500,000 | EUR | 610,286 | |||||||||||
Air Products and Chemicals Inc., senior note, 0.50%, 5/05/28 | 300,000 | EUR | 357,518 | |||||||||||
Apple Inc., senior bond, 1.625%, 11/10/26 | 500,000 | EUR | 646,763 | |||||||||||
AT&T Inc., senior note, 0.25%, 3/04/26 | 500,000 | EUR | 582,418 | |||||||||||
DH Europe Finance II Sarl, senior note, 0.20%, 3/18/26 | 500,000 | EUR | 584,974 | |||||||||||
Procter & Gamble Co., senior note, 0.50%, 10/25/24 | 500,000 | EUR | 604,398 | |||||||||||
a | Schlumberger Finance France SAS, senior note, Reg S, 1.00%, 2/18/26 | 500,000 | EUR | 603,360 | ||||||||||
Stryker Corp., senior note, 0.25%, 12/03/24 | 500,000 | EUR | 589,866 | |||||||||||
Verizon Communications Inc., senior note, 0.875%, 4/02/25 | 500,000 | EUR | 607,209 | |||||||||||
|
| |||||||||||||
5,186,792 | ||||||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $9,275,177) | 10,273,263 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 210,560,086 | |||||||||||||
|
|
franklintempleton.com | Semiannual Report | 37 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty International Aggregate Bond ETF (continued)
Principal Amount* | Value | |||||||||
Short Term Investments 5.2% | ||||||||||
U.S. Government & Agency Securities (Cost $11,835,000) 5.2% | ||||||||||
c | FHLB, 10/01/20 | 11,835,000 | $ | 11,835,000 | ||||||
|
| |||||||||
Total Investments (Cost $210,459,796) 97.0% | 222,395,086 | |||||||||
Other Assets, less Liabilities 3.0% | 6,870,995 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 229,266,081 | ||||||||
|
|
See Abbreviations on Page 80.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. At September 30, 2020, the aggregate value of these securities was $123,145,376, representing 53.7% of net assets.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $22,908,232, representing 10.0% of net assets.
cThe security was issued on a discount basis with no stated coupon rate.
dPrincipal amount is stated in 100 Mexican Peso Units.
eA supranational organization is an entity formed by two or more central governments through international treaties.
At September 30, 2020 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
Forward Exchange Contracts | ||||||||||||||||||||||||||||
Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Australian Dollar | CITI | Sell | 175,000 | $ | 106,158 | 10/06/20 | $ | — | $ | (19,160 | ) | |||||||||||||||||
Australian Dollar | CITI | Sell | 1,000,000 | 631,499 | 10/06/20 | — | (84,607 | ) | ||||||||||||||||||||
Australian Dollar | CITI | Sell | 1,000,000 | 639,060 | 10/06/20 | — | (77,046 | ) | ||||||||||||||||||||
Australian Dollar | CITI | Sell | 340,000 | 216,136 | 10/06/20 | — | (27,340 | ) | ||||||||||||||||||||
Australian Dollar | CITI | Sell | 1,200,000 | 769,110 | 10/06/20 | — | (90,217 | ) | ||||||||||||||||||||
Australian Dollar | CITI | Sell | 6,200,000 | 4,467,485 | 10/06/20 | 27,630 | — | |||||||||||||||||||||
Canadian Dollar | CITI | Sell | 330,000 | 234,885 | 10/06/20 | — | (12,792 | ) | ||||||||||||||||||||
Canadian Dollar | CITI | Sell | 2,000,000 | 1,421,197 | 10/06/20 | — | (79,877 | ) | ||||||||||||||||||||
Canadian Dollar | CITI | Sell | 2,200,000 | 1,554,990 | 10/06/20 | — | (96,192 | ) | ||||||||||||||||||||
Canadian Dollar | CITI | Sell | 640,000 | 454,745 | 10/06/20 | — | (25,599 | ) | ||||||||||||||||||||
Canadian Dollar | CITI | Sell | 9,000,000 | 6,388,683 | 10/06/20 | — | (366,154 | ) | ||||||||||||||||||||
Danish Krone | CITI | Sell | 341,000 | 50,661 | 10/06/20 | — | (3,043 | ) | ||||||||||||||||||||
Danish Krone | CITI | Sell | 2,000,000 | 293,158 | 10/06/20 | — | (21,823 | ) | ||||||||||||||||||||
Euro | CITI | Buy | 51,506 | 18,300,000 | 10/06/20 | 1,342 | — | |||||||||||||||||||||
Euro | CITI | Sell | 2,200,000 | 2,438,931 | 10/06/20 | — | (140,451 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 8,200,000 | 8,960,140 | 10/06/20 | — | (653,922 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 9,250,000 | 10,105,274 | 10/06/20 | — | (739,857 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 2,000,000 | 2,163,734 | 10/06/20 | — | (181,159 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 24,800,000 | 27,139,384 | 10/06/20 | — | (1,937,291 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 34,000,000 | 36,975,510 | 10/06/20 | — | (2,887,673 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 3,500,000 | 3,789,041 | 10/06/20 | — | (314,523 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 1,000,000 | 1,083,415 | 10/06/20 | — | (89,032 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 2,500,000 | 2,716,125 | 10/06/20 | — | (214,991 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 2,750,000 | 3,095,648 | 10/06/20 | — | (128,581 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 1,100,000 | 1,240,372 | 10/06/20 | — | (49,319 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 3,000,000 | 3,374,873 | 10/06/20 | — | (142,467 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 1,000,000 | 1,125,161 | 10/06/20 | — | (47,285 | ) | ||||||||||||||||||||
Euro | CITI | Sell | 4,000,000 | 4,698,566 | 10/06/20 | 8,780 | — | |||||||||||||||||||||
Great British Pound | CITI | Buy | 2,800,000 | 3,675,306 | 10/06/20 | — | (58,624 | ) | ||||||||||||||||||||
Great British Pound | CITI | Buy | 1,577,844 | 2,063,924 | 10/06/20 | — | (25,868 | ) |
38 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty International Aggregate Bond ETF (continued)
Forward Exchange Contracts (continued) | ||||||||||||||||||||||||||||
Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
OTC Forward Exchange Contracts (continued) | ||||||||||||||||||||||||||||
Great British Pound | CITI | Buy | 522,156 | $ | 683,015 | 10/06/20 | $ | — | $ | (8,560 | ) | |||||||||||||||||
Great British Pound | CITI | Sell | 350,000 | 429,097 | 10/06/20 | — | (22,989 | ) | ||||||||||||||||||||
Great British Pound | CITI | Sell | 2,177,844 | 2,725,356 | 10/06/20 | — | (87,704 | ) | ||||||||||||||||||||
Great British Pound | CITI | Sell | 2,200,000 | 2,747,378 | 10/06/20 | — | (94,301 | ) | ||||||||||||||||||||
Great British Pound | CITI | Sell | 750,000 | 926,265 | 10/06/20 | — | (42,489 | ) | ||||||||||||||||||||
Great British Pound | CITI | Sell | 8,600,000 | 10,693,128 | 10/06/20 | — | (415,252 | ) | ||||||||||||||||||||
Hungarian Forint | CITI | Sell | 83,796,714 | 259,398 | 10/06/20 | — | (10,980 | ) | ||||||||||||||||||||
Hungarian Forint | CITI | Sell | 105,000,000 | 322,789 | 10/06/20 | — | (16,003 | ) | ||||||||||||||||||||
Hungarian Forint | CITI | Sell | 30,500,000 | 92,955 | 10/06/20 | — | (5,456 | ) | ||||||||||||||||||||
Indonesian Rupiah | CITI | Sell | 3,500,000,000 | 217,498 | 10/06/20 | — | (17,632 | ) | ||||||||||||||||||||
Japanese Yen | CITI | Sell | 165,000,000 | 1,533,450 | 10/06/20 | — | (29,042 | ) | ||||||||||||||||||||
Japanese Yen | CITI | Sell | 780,000,000 | 7,282,233 | 10/06/20 | — | (104,092 | ) | ||||||||||||||||||||
Japanese Yen | CITI | Sell | 800,000,000 | 7,457,650 | 10/06/20 | — | (118,069 | ) | ||||||||||||||||||||
Japanese Yen | CITI | Sell | 34,000,000 | 316,692 | 10/06/20 | — | (5,276 | ) | ||||||||||||||||||||
Japanese Yen | CITI | Sell | 190,000,000 | 1,774,074 | 10/06/20 | — | (25,159 | ) | ||||||||||||||||||||
Japanese Yen | CITI | Sell | 3,800,000,000 | 35,807,169 | 10/06/20 | — | (177,495 | ) | ||||||||||||||||||||
Mexican Peso | CITI | Sell | 1,100,000 | 45,831 | 10/06/20 | — | (3,920 | ) | ||||||||||||||||||||
Mexican Peso | CITI | Sell | 6,500,000 | 261,552 | 10/06/20 | — | (32,431 | ) | ||||||||||||||||||||
Polish Zloty | CITI | Sell | 500,000 | 121,424 | 10/06/20 | — | (7,980 | ) | ||||||||||||||||||||
Polish Zloty | CITI | Sell | 1,350,000 | 323,493 | 10/06/20 | — | (25,897 | ) | ||||||||||||||||||||
Polish Zloty | CITI | Sell | 1,700,000 | 405,619 | 10/06/20 | — | (34,355 | ) | ||||||||||||||||||||
Polish Zloty | CITI | Sell | 3,000,000 | 721,674 | 10/06/20 | — | (54,788 | ) | ||||||||||||||||||||
Polish Zloty | CITI | Sell | 1,000,000 | 239,502 | 10/06/20 | — | (19,306 | ) | ||||||||||||||||||||
Polish Zloty | CITI | Sell | 7,400,000 | 1,771,094 | 10/06/20 | — | (144,084 | ) | ||||||||||||||||||||
South African Rand | CITI | Sell | 470,000 | 26,209 | 10/06/20 | — | (1,924 | ) | ||||||||||||||||||||
Swedish Krona | CITI | Sell | 31,500,000 | 3,595,333 | 10/06/20 | 80,827 | — | |||||||||||||||||||||
Chinese Yuan Renminbi | CITI | Sell | 13,800,000 | 1,930,051 | 10/13/20 | — | (103,158 | ) | ||||||||||||||||||||
Chinese Yuan Renminbi | CITI | Sell | 13,800,000 | 1,911,095 | 10/13/20 | — | (122,114 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 118,578 | $ | (10,245,309 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | (10,126,731 | ) | ||||||||||||||||||||||||
|
|
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 39 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty Senior Loan ETF
Six Months Ended (unaudited) | Year ended March 31, | |||||||||||
2020 | 2019a | |||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $ | 22.85 | $ | 24.85 | $ | 25.00 | ||||||
|
| |||||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.36 | 0.99 | 0.81 | |||||||||
Net realized and unrealized gains (losses) | 1.30 | (1.90 | ) | (0.21 | ) | |||||||
|
| |||||||||||
Total from investment operations | 1.66 | (0.91 | ) | 0.60 | ||||||||
|
| |||||||||||
Less distributions from net investment income | (0.37 | ) | (1.09 | ) | (0.75 | ) | ||||||
|
| |||||||||||
Net asset value, end of period | $ | 24.14 | $ | 22.85 | $ | 24.85 | ||||||
|
| |||||||||||
Total returnd | 7.28% | (3.92)% | 2.44% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.91% | 0.97% | 1.00% | |||||||||
Expenses net of waiver and payments by affiliates | 0.45% | 0.45% | 0.45% | |||||||||
Net investment income | 3.05% | 4.02% | 3.90% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $55,519 | $54,833 | $57,165 | |||||||||
Portfolio turnover ratef | 25.22% | g | 51.48% | g | 10.62% |
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 25.22% | 51.48% | —% |
40 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty Senior Loan ETF
Country | Principal Amount* | Value | ||||||||||||
* | Corporate Bonds & Notes 2.7% | |||||||||||||
Airlines 0.4% | ||||||||||||||
a | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 10/20/25 | United States | 250,000 | $ | 256,779 | |||||||||
|
| |||||||||||||
Construction Materials 0.7% | ||||||||||||||
a | Cemex SAB de CV, senior secured note, 144A, 9/17/30 | Mexico | 375,000 | 377,306 | ||||||||||
|
| |||||||||||||
Containers & Packaging 0.7% | ||||||||||||||
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA, senior secured note, 10/15/27 | United States | 400,000 | 403,080 | |||||||||||
|
| |||||||||||||
Diversified Financial Services 0.4% | ||||||||||||||
a | Vmed O2 UK Financing I PLC, senior secured bond, 1/31/31 | United Kingdom | 210,000 | 214,594 | ||||||||||
|
| |||||||||||||
Media 0.2% | ||||||||||||||
a | Diamond Sports Group LLC / Diamond Sports Finance Co., first lien, 144A, 5.375%, 8/15/26 | United States | 160,000 | 113,586 | ||||||||||
|
| |||||||||||||
Oil, Gas & Consumable Fuels 0.3% | ||||||||||||||
Cheniere Energy Inc., 10/15/28 | United States | 150,000 | 154,219 | |||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $1,499,821) | 1,519,564 | |||||||||||||
|
| |||||||||||||
b | Senior Floating Rate Interests 87.8% | |||||||||||||
Aerospace & Defense 2.0% | ||||||||||||||
Dynasty Acquisition Co. Inc., | United States | 810,248 | 719,240 | |||||||||||
Initial Term B-2 Loan (CAD), 3.807%, 4/06/26 | United States | 435,617 | 386,688 | |||||||||||
|
| |||||||||||||
1,105,928 | ||||||||||||||
|
| |||||||||||||
Airlines 1.7% | ||||||||||||||
American Airlines Inc., 2018 Replacement Term Loan, 3.542%, 6/27/25 | United States | 759,451 | 472,336 | |||||||||||
Delta Air Lines Inc., | United States | 319,671 | 319,634 | |||||||||||
2020 1st Lien Term Loan B, 9/16/27 | United States | 136,597 | 137,942 | |||||||||||
|
| |||||||||||||
929,912 | ||||||||||||||
|
| |||||||||||||
Application Software 1.8% | ||||||||||||||
Epicor Software Corporation, Term B Loans, 5.250%, 7/30/27 | United States | 337,025 | 336,224 | |||||||||||
Tibco Software Inc., Term B-3 Loans, 3.910%, 6/30/26 | United States | 698,250 | 682,540 | |||||||||||
|
| |||||||||||||
1,018,764 | ||||||||||||||
|
| |||||||||||||
Auto Components 2.8% | ||||||||||||||
Clarios Global LP (Power Solutions), Initial Dollar Term Loan, 3.658%, 4/30/26 | United States | 1,584,000 | 1,546,380 | |||||||||||
|
| |||||||||||||
Chemicals 4.3% | ||||||||||||||
Axalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan, 2.057%, 6/01/24 | United States | 467,508 | 457,339 | |||||||||||
Nouryon USA LLC, Term Loan B, 3.151%, 10/01/25 | Netherlands | 797,146 | 773,232 | |||||||||||
Univar Solutions USA Inc., first lien, Term B-5 Loans, 2.156%, 7/01/26 | United States | 72,718 | 71,173 | |||||||||||
Univar USA Inc., Term B-3 Loans, 2.406%, 7/01/24 | United States | 1,098,071 | 1,085,718 | |||||||||||
|
| |||||||||||||
2,387,462 | ||||||||||||||
|
| |||||||||||||
Commercial Services & Supplies 3.0% | ||||||||||||||
Intrado Corp., Term B Loans, 5.00%, 10/10/24 | United States | 246,052 | 225,050 | |||||||||||
Prime Security Services Borrower LLC, Term B-1 Facility, 4.250%, 9/23/26 | United States | 1,425,981 | 1,414,904 | |||||||||||
|
| |||||||||||||
1,639,954 | ||||||||||||||
|
| |||||||||||||
Communications Equipment 2.8% | ||||||||||||||
CommScope Inc., Initial Term Loans, 3.406%, 4/06/26 | United States | 1,584,000 | 1,547,370 | |||||||||||
|
|
franklintempleton.com | Semiannual Report | 41 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
b | Senior Floating Rate Interests (continued) | |||||||||||||
Containers & Packaging 3.8% | ||||||||||||||
Berry Global Inc., Term Y Loans, 2.155%, 7/01/26 | United States | 1,159,718 | $ | 1,126,778 | ||||||||||
Reynolds Group Holdings Inc., U.S. Term Loans, 2.906%, 2/05/23 | United States | 979,840 | 971,879 | |||||||||||
|
| |||||||||||||
2,098,657 | ||||||||||||||
|
| |||||||||||||
Diversified Financial Services 4.0% | ||||||||||||||
Asurion LLC, Replacement B-6 Term Loans, 3.156%, 11/03/23 | United States | 1,522,661 | 1,502,403 | |||||||||||
Trans Union LLC, 2019 Replacement Term B-5 Loans, 1.906%, 11/16/26 | United States | 708,429 | 692,995 | |||||||||||
|
| |||||||||||||
2,195,398 | ||||||||||||||
|
| |||||||||||||
Diversified Telecommunication Services 2.1% | ||||||||||||||
Zayo Group Holdings Inc, (Front Range BidCo.), Initial Dollar Term Loan, 3.156%, 3/09/27 | United States | 1,170,819 | 1,139,185 | |||||||||||
|
| |||||||||||||
Electric Utilities 1.3% | ||||||||||||||
c | Brookfield WEC Holdings Inc., Initial Term Loans, TBD, 8/01/25 | United States | 724,470 | 707,910 | ||||||||||
|
| |||||||||||||
Food & Staples Retailing 1.2% | ||||||||||||||
Aramark Corp., U.S. Term B-3 Loan, 3.353%, 3/11/25 | United States | 697,750 | 671,512 | |||||||||||
|
| |||||||||||||
Food Products 1.2% | ||||||||||||||
JBS USA Lux SA, Initial Term Loans, 3.072%, 5/01/26 | United States | 662,944 | 648,442 | |||||||||||
|
| |||||||||||||
Health Care Providers & Services 4.4% | ||||||||||||||
Air Medical Group Holdings Inc., 2018 New Term Loans, 5.250%, 3/14/25 | United States | 362,119 | 350,954 | |||||||||||
DaVita Inc., Tranche B-1 Term Loan, 1.906%, 8/12/26 | United States | 1,085,286 | 1,068,668 | |||||||||||
Gentiva Health Services Inc., Term B Loans, 3.437%, 7/02/25 | United States | 447,750 | 439,355 | |||||||||||
c | Milano Acquisition Corp, Term Loan B, TBD, 8/13/27 | United States | 589,007 | 584,221 | ||||||||||
|
| |||||||||||||
2,443,198 | ||||||||||||||
|
| |||||||||||||
Hotels Restaurants & Leisure 5.5% | ||||||||||||||
1011778 B.C. ULC, Term B-4 Loan, 1.906%, 11/19/26 | Canada | 1,454,739 | 1,401,096 | |||||||||||
Aristocrat Technologies Inc., Term B-3 Loans, 2.021%, 10/19/24 | United States | 773,993 | 755,450 | |||||||||||
Caesars Resort Collection LLC, | United States | 129,540 | 125,746 | |||||||||||
Term B Loans, 2.906%, 12/23/24 | United States | 797,784 | 749,584 | |||||||||||
|
| |||||||||||||
3,031,876 | ||||||||||||||
|
| |||||||||||||
Insurance 3.8% | ||||||||||||||
Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, Initial Term Loan, 2.906%, 5/09/25 | United States | 446,574 | 434,544 | |||||||||||
AssuredPartners Capital Inc., June Incremental Term Loan, 5.500%, 2/12/27 | United States | 363,688 | 363,688 | |||||||||||
AssuredPartners Inc., 2020 February Refinancing Term Loans, 3.656%, 2/12/27 | United States | 498,744 | 485,153 | |||||||||||
Sedgwick Claims Management Services Inc., Initial Term Loans, 3.406%, 12/31/25 | United States | 847,843 | 820,136 | |||||||||||
|
| |||||||||||||
2,103,521 | ||||||||||||||
|
| |||||||||||||
Interactive Media & Services 0.5% | ||||||||||||||
MH Sub I, LLC, Initial Term Loans, 4.572%, 9/13/24 | United States | 299,229 | 292,987 | |||||||||||
|
| |||||||||||||
IT Services 0.8% | ||||||||||||||
Verscend Holding Corp., Term B Loans, 4.656%, 8/27/25 | United States | 468,804 | 466,265 | |||||||||||
|
| |||||||||||||
Leisure Equipment & Products 1.5% | ||||||||||||||
Playtika Holding Corp., Term B Loans, 7.072%, 12/10/24 | United States | 856,625 | 859,730 | |||||||||||
|
| |||||||||||||
Machinery 1.5% | ||||||||||||||
Vertical US Newco Inc. (thyssenkrupp Elevator), Term Loan B, 4.566%, 7/30/27 | United States | 859,477 | 854,181 | |||||||||||
|
|
42 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
b | Senior Floating Rate Interests (continued) | |||||||||||||
Media 11.7% | ||||||||||||||
Charter Communications Operating LLC (CCO Safari III LLC), Term B-2 | ||||||||||||||
Loan, 1.910%, 2/01/27 | United States | 525,347 | $ | 514,950 | ||||||||||
c | Clear Channel Outdoor Holdings Inc., Term B Loan, TBD, 8/21/26 | United States | 299,244 | 273,488 | ||||||||||
CSC Holdings LLC, March 2017 Incremental Term Loans, 2.402%, 7/17/25 | United States | 1,260,372 | 1,222,246 | |||||||||||
Diamond Sports Group LLC, Term Loan, 3.430%, 8/24/26 | United States | 545,037 | 425,129 | |||||||||||
d | Nexstar Broadcasting Inc., Term B-4 Loan, 2.905%, 9/18/26 | United States | 1,537,000 | 1,508,181 | ||||||||||
Nielsen Finance LLC (VNU Inc.), Dollar Term B-5 Loan, 4.750%, 6/04/25 | United States | 105,795 | 105,795 | |||||||||||
c | Radiate Holdco, LLC, Term Loan, TBD, 9/25/26 | United States | 143,871 | 141,635 | ||||||||||
Sinclair Television Group Inc., Tranche B Term Loans, 2.410%, 1/03/24 | United States | 519,511 | 507,390 | |||||||||||
Univision Communications Inc., 2020 Replacement New First-Lien Term Loans, 4.750%, 3/13/26 | United States | 746,278 | 727,807 | |||||||||||
WideOpenWest Finance LLC, Term B Loan, 4.25%, 8/18/23 | United States | 1,101,483 | 1,087,944 | |||||||||||
|
| |||||||||||||
6,514,565 | ||||||||||||||
|
| |||||||||||||
Oil, Gas & Consumable Fuels 2.6% | ||||||||||||||
c | Blackstone CQP Holdco LP, Initial Term Loans, TBD, 9/30/24 | United States | 299,242 | 293,351 | ||||||||||
Buckeye Partners LP, Initial Term Loans, 2.905%, 11/01/26 | United States | 1,194,000 | 1,174,597 | |||||||||||
|
| |||||||||||||
1,467,948 | ||||||||||||||
|
| |||||||||||||
Personal Products 2.5% | ||||||||||||||
Sunshine Luxembourg VII SARL (Nestle Skin Health), Facility B1 Commitments, 5.322%, 10/01/26 | Luxembourg | 1,389,500 | 1,384,413 | |||||||||||
|
| |||||||||||||
Pharmaceuticals 4.2% | ||||||||||||||
Endo Luxembourg Finance Co. I S.A.R.L. and Endo LLC, Initial Term Loans, 4/29/24 | United States | — | ||||||||||||
Grifols Worldwide Operations USA Inc., Dollar Tranche B Term Loan, 2.106%, 11/15/27 | United States | 1,283,588 | 1,259,921 | |||||||||||
Valeant Pharmaceuticals International, Initial Term Loans, , 3.183%, 6/02/25 | United States | 1,101,902 | 1,082,159 | |||||||||||
|
| |||||||||||||
2,342,080 | ||||||||||||||
|
| |||||||||||||
Professional Services 2.1% | ||||||||||||||
Nielsen Finance LLC (VNU Inc.), Class B-4 Term Loans, 2.154%, 10/04/23 | United States | 1,175,545 | 1,154,892 | |||||||||||
|
| |||||||||||||
Real Estate Management & Development 1.3% | ||||||||||||||
Cushman & Wakefield U.S. Borrower LLC, Replacement Term Loan, 2.906%, 8/21/25 | United States | 729,003 | 705,007 | |||||||||||
|
| |||||||||||||
Road & Rail 0.8% | ||||||||||||||
Genesee & Wyoming Inc., Initial Term Loan, 2.307%, 12/30/26 | United States | 475,231 | 468,429 | |||||||||||
|
| |||||||||||||
Software 8.1% | ||||||||||||||
Athenahealth Inc. (VVC Holding Corp.), Term B Loans, 4.749%, 2/11/26 | United States | 547,978 | 541,813 | |||||||||||
Finastra USA Inc., Dollar Term Loan, 4.500%, 6/13/24 | United States | 902,899 | 848,499 | |||||||||||
Go Daddy Operating Co. LLC, Tranche B-2 Term Loan, 1.906%, 2/15/24 | United States | 415,820 | 407,763 | |||||||||||
Hyland Software Inc., Refinancing Loans, 3.250%, 7/01/24 | United States | 1,060,445 | 1,056,303 | |||||||||||
LogMeIn Inc., Initial Term Loans. 4.905%, 8/31/27 | United States | 580,302 | 561,926 | |||||||||||
C | MA Finance Co. LLC, Tranche B-4 Term Loans, TBD, 6/05/25 | United States | 450,664 | 449,255 | ||||||||||
C | SS&C European Holdings Sarl, Term B-4 Loan, TBD, 4/16/25 | Luxembourg | 193,526 | 187,882 | ||||||||||
C | SS&C Technologies Inc., Term B-3 Loans, TBD, 4/16/25 | United States | 275,455 | 267,421 | ||||||||||
The Ultimate Software Group Inc., 2020 Incremental Term Loan, 4.750%, 5/04/26 | United States | 190,901 | 190,648 | |||||||||||
|
| |||||||||||||
4,511,510 | ||||||||||||||
|
| |||||||||||||
Specialty Retail 4.0% | ||||||||||||||
Bass Pro Group LLC, Initial Term Loans, 6.072%, 9/25/24 | United States | 595,396 | 591,935 | |||||||||||
C | EG America LLC, Additional Facility Loan, TBD, 2/07/25 | United States | 432,625 | 423,072 | ||||||||||
Harbor Freight Tools USA Inc., Refinancing Loans, 3.250%, 8/18/23 | United States | 295,462 | 291,861 | |||||||||||
Michaels Stores Inc., 2018 New Replacement Term B Loan, 3.533%, 1/30/23 | United States | 362,852 | 362,580 |
franklintempleton.com | Semiannual Report | 43 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
b | Senior Floating Rate Interests (continued) | |||||||||||||
Specialty Retail (continued) | ||||||||||||||
Staples Inc., 2019 Refinancing Term B-1 Loans, 5.251%, 4/16/26 | United States | 582,856 | $ | 541,223 | ||||||||||
|
| |||||||||||||
2,210,671 | ||||||||||||||
|
| |||||||||||||
Technology Hardware, Storage & Peripherals 0.1% | ||||||||||||||
c | Sophia, LP, Closing Date Term Loans, TBD, 9/22/27 | United States | 81,220 | 80,826 | ||||||||||
|
| |||||||||||||
Wireless Telecommunication Services 0.4% | ||||||||||||||
T-Mobile USA Inc., Term Loan, 3.1560%, 4/01/27 | United States | 223,248 | 223,348 | |||||||||||
|
| |||||||||||||
Total Floating Rate Loans (Cost $49,820,805) | 48,752,321 | |||||||||||||
|
| |||||||||||||
Asset-Backed Securities 5.2% | ||||||||||||||
a,e | AMMC CLO 15 Ltd., 2014-15A, CRR, 144A, 2.575%, 3,01/15/2032 | United States | 1,000,000 | 975,746 | ||||||||||
a,e | BlueMountain CLO Ltd., 2018-3A, C, 144A, 2.444%, 2,10/25/2030 | United States | 1,000,000 | 980,316 | ||||||||||
a,e | LCM XVIII LP, 2018A, CR, 144A, 2.121%, 2,04/20/2031 | United States | 1,000,000 | 954,314 | ||||||||||
|
| |||||||||||||
Total Asset-Backed Securities (Cost $2,996,875) | 2,910,376 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $54,317,501) | 53,182,261 | |||||||||||||
|
| |||||||||||||
Short Term Investments 6.3% | ||||||||||||||
U.S. Government & Agency Securities (Cost $3,470,000) 6.3% | ||||||||||||||
F | FHLB,10/01/20 | United States | 3,470,000 | 3,470,000 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $57,787,501) 102.0% | 56,652,261 | |||||||||||||
Other Assets, less Liabilities (2.0)% | (1,133,500 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 55,518,761 | ||||||||||||
|
|
See abbreviations on page 80.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the aggregate value of these securities was $3,872,641 representing 7.0% of net assets.
bThe coupon rate shown represents the rate at period end.
cA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.
dA portion or all of the security purchased on a delayed delivery basis.
eThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.
fThe security was issued on a discount basis with no stated coupon rate.
44 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Consolidated Financial Highlights
Franklin Liberty Systematic Style Premia ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | |||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $23.16 | $25.00 | ||||||
|
| |||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.17 | 0.11 | ||||||
Net realized and unrealized gains (losses) | 0.94 | (1.94 | ) | |||||
|
| |||||||
Total from investment operations | (0.77 | ) | (1.83 | ) | ||||
|
| |||||||
Less distributions from net investment income | (0.05 | ) | (0.01 | ) | ||||
|
| |||||||
Net asset value, end of period | $22.34 | $23.16 | ||||||
|
| |||||||
Total returnd | (3.32)% | (7.34)% | ||||||
Ratios to average net assetse | ||||||||
Total expenses | 0.94% | 1.11% | ||||||
Expenses net of waiver and payments by affiliates | 0.61% | 0.65% | ||||||
Net investment income | 1.47% | 1.67% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $53,628 | $50,948 | ||||||
Portfolio turnover ratef | 56.06% | g | 60.95% | g |
aFor the period December 18, 2019 (commencement of operations) to March 31, 2020.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 56.06% | 60.95% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 45 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty Systematic Style Premia ETF
Country | Shares | Value | ||||||||||||
Common Stocks 75.8% | ||||||||||||||
Aerospace & Defense 0.7% | ||||||||||||||
Lockheed Martin Corp. | United States | 1,014 | $ | 388,646 | ||||||||||
|
| |||||||||||||
Air Freight & Logistics 1.6% | ||||||||||||||
C.H. Robinson Worldwide Inc. | United States | 771 | 78,788 | |||||||||||
Deutsche Post AG | Germany | 5,675 | 258,871 | |||||||||||
Expeditors International of Washington Inc. | United States | 936 | 84,727 | |||||||||||
SG Holdings Co. Ltd. | Japan | 900 | 46,480 | |||||||||||
United Parcel Service Inc., B | United States | 2,320 | 386,582 | |||||||||||
|
| |||||||||||||
855,448 | ||||||||||||||
|
| |||||||||||||
Auto Components 0.2% | ||||||||||||||
Bridgestone Corp. | Japan | 2,900 | 91,152 | |||||||||||
|
| |||||||||||||
Automobiles 0.1% | ||||||||||||||
a | Peugeot SA | France | 3,323 | 60,399 | ||||||||||
|
| |||||||||||||
Banks 2.2% | ||||||||||||||
a | BNP Paribas SA | France | 6,526 | 237,043 | ||||||||||
BOC Hong Kong (Holdings) Ltd. | Hong Kong | 21,000 | 55,277 | |||||||||||
Canadian Imperial Bank of Commerce | Canada | 2,300 | 171,379 | |||||||||||
a | Credit Agricole SA | France | 6,650 | 58,268 | ||||||||||
DBS Group Holdings Ltd. | Singapore | 10,200 | 148,767 | |||||||||||
Hang Seng Bank Ltd. | Hong Kong | 4,300 | 63,307 | |||||||||||
a | ING Groep NV | Netherlands | 22,198 | 157,667 | ||||||||||
a | Swedbank AB, A | Sweden | 4,906 | 77,147 | ||||||||||
The Toronto-Dominion Bank | Canada | 4,700 | 216,923 | |||||||||||
|
| |||||||||||||
1,185,778 | ||||||||||||||
|
| |||||||||||||
Beverages 0.3% | ||||||||||||||
a | Monster Beverage Corp. | United States | 2,277 | 182,615 | ||||||||||
|
| |||||||||||||
Biotechnology 3.2% | ||||||||||||||
a | Alexion Pharmaceuticals Inc. | United States | 1,274 | 145,784 | ||||||||||
a | Biogen Inc. | United States | 923 | 261,837 | ||||||||||
a | Genmab A/S | Denmark | 369 | 133,701 | ||||||||||
Gilead Sciences Inc. | United States | 6,994 | 441,951 | |||||||||||
a | Regeneron Pharmaceuticals Inc. | United States | 583 | 326,352 | ||||||||||
a | Vertex Pharmaceuticals Inc. | United States | 1,472 | 400,560 | ||||||||||
|
| |||||||||||||
1,710,185 | ||||||||||||||
|
| |||||||||||||
Building Products 0.7% | ||||||||||||||
A O Smith Corp. | United States | 769 | 40,603 | |||||||||||
Geberit AG | Switzerland | 210 | 124,754 | |||||||||||
a | Kingspan Group PLC | Ireland | 853 | 77,721 | ||||||||||
Lennox International Inc. | United States | 195 | 53,159 | |||||||||||
Masco Corp. | United States | 1,491 | 82,199 | |||||||||||
|
| |||||||||||||
378,436 | ||||||||||||||
|
| |||||||||||||
Capital Markets 4.5% | ||||||||||||||
a | Amundi SA | France | 352 | 24,849 | ||||||||||
BlackRock Inc. | United States | 183 | 103,130 | |||||||||||
FactSet Research Systems Inc. | United States | 215 | 71,999 | |||||||||||
Hargreaves Lansdown PLC | United Kingdom | 1,918 | 38,731 | |||||||||||
Hong Kong Exchanges and Clearing Ltd. | Hong Kong | 6,700 | 312,782 | |||||||||||
Magellan Financial Group Ltd. | Australia | 741 | 30,082 | |||||||||||
MarketAxess Holdings Inc. | United States | 216 | 104,023 | |||||||||||
Moody’s Corp. | United States | 963 | 279,126 | |||||||||||
MSCI Inc. | United States | 491 | 175,179 | |||||||||||
Partners Group Holding AG | Switzerland | 106 | 97,791 | |||||||||||
S&P Global Inc. | United States | 1,364 | 491,858 |
46 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Capital Markets (continued) | ||||||||||||||
SEI Investments Co. | United States | 720 | $ | 36,518 | ||||||||||
Singapore Exchange Ltd. | Singapore | 4,500 | 30,163 | |||||||||||
State Street Corp. | United States | 1,997 | 118,482 | |||||||||||
T. Rowe Price Group Inc. | United States | 1,303 | 167,071 | |||||||||||
The Bank of New York Mellon Corp. | United States | 4,232 | 145,327 | |||||||||||
UBS Group AG | Switzerland | 14,362 | 161,011 | |||||||||||
|
| |||||||||||||
2,388,122 | ||||||||||||||
|
| |||||||||||||
Chemicals 2.2% | ||||||||||||||
Air Liquide SA | France | 2,355 | 374,196 | |||||||||||
Akzo Nobel NV | Netherlands | 978 | 99,111 | |||||||||||
Chr. Hansen Holding AS | Denmark | 601 | 66,825 | |||||||||||
Croda International PLC | United Kingdom | 729 | 58,903 | |||||||||||
EMS-Chemie Holding AG | Switzerland | 45 | 40,482 | |||||||||||
Evonik Industries AG | Germany | 1,210 | 31,358 | |||||||||||
Givaudan AG | Switzerland | 52 | 224,697 | |||||||||||
Nissan Chemical Corp. | Japan | 700 | 37,146 | |||||||||||
Nitto Denko Corp. | Japan | 800 | 51,852 | |||||||||||
Novozymes AS | Denmark | 1,170 | 73,708 | |||||||||||
Symrise AG | Germany | 682 | 94,370 | |||||||||||
|
| |||||||||||||
1,152,648 | ||||||||||||||
|
| |||||||||||||
Commercial Services & Supplies 0.3% | ||||||||||||||
Rollins Inc. | United States | 845 | 45,791 | |||||||||||
Secom Co. Ltd. | Japan | 1,000 | 91,026 | |||||||||||
|
| |||||||||||||
136,817 | ||||||||||||||
|
| |||||||||||||
Communications Equipment 0.1% | ||||||||||||||
a | F5 Networks Inc. | United States | 349 | 42,847 | ||||||||||
Motorola Solutions Inc. | United States | 212 | 33,243 | |||||||||||
|
| |||||||||||||
76,090 | ||||||||||||||
|
| |||||||||||||
Construction & Engineering 0.1% | ||||||||||||||
Obayashi Corp. | Japan | 3,600 | 32,578 | |||||||||||
|
| |||||||||||||
Construction Materials 0.1% | ||||||||||||||
HeidelbergCement AG | Germany | 849 | 52,089 | |||||||||||
|
| |||||||||||||
Containers & Packaging 0.1% | ||||||||||||||
Sealed Air Corp. | United States | 883 | 34,269 | |||||||||||
|
| |||||||||||||
Diversified Financial Services 0.4% | ||||||||||||||
Investor AB, B | Sweden | 2,615 | 171,509 | |||||||||||
M&G PLC | United Kingdom | 15,432 | 31,821 | |||||||||||
|
| |||||||||||||
203,330 | ||||||||||||||
| �� | |||||||||||||
Diversified Telecommunication Services 0.8% | ||||||||||||||
BT Group PLC | United Kingdom | 39,495 | 50,232 | |||||||||||
Elisa OYJ | Finland | 825 | 48,643 | |||||||||||
Nippon Telegraph & Telephone Corp. | Japan | 7,400 | 150,763 | |||||||||||
Orange SA | France | 9,636 | 100,386 | |||||||||||
Swisscom AG | Switzerland | 150 | 79,771 | |||||||||||
United Internet AG | Germany | 612 | 23,446 | |||||||||||
|
| |||||||||||||
453,241 | ||||||||||||||
|
| |||||||||||||
Electric Utilities 2.3% | ||||||||||||||
CLP Holdings Ltd. | Hong Kong | 9,000 | 83,613 | |||||||||||
EDF SA | France | 3,539 | 37,458 | |||||||||||
Endesa SA | Spain | 1,828 | 48,939 | |||||||||||
Enel SpA | Italy | 45,366 | 394,626 |
franklintempleton.com | Semiannual Report | 47 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Electric Utilities (continued) | ||||||||||||||
Hydro One Ltd. | Canada | 1,800 | $ | 38,028 | ||||||||||
Iberdrola SA | Spain | 34,255 | 422,178 | |||||||||||
Kansai Electric Power Co. Inc. | Japan | 3,800 | 36,729 | |||||||||||
NRG Energy Inc. | United States | 1,391 | 42,759 | |||||||||||
Power Assets Holdings Ltd. | Hong Kong | 7,500 | 39,290 | |||||||||||
Red Electrica Corp. SA | Spain | 2,503 | 47,006 | |||||||||||
Terna Rete Elettrica Nazionale SpA | Italy | 8,044 | 56,352 | |||||||||||
|
| |||||||||||||
1,246,978 | ||||||||||||||
|
| |||||||||||||
Electrical Equipment 0.7% | ||||||||||||||
Legrand SA | France | 1,216 | 97,221 | |||||||||||
Mitsubishi Electric Corp. | Japan | 10,100 | 136,048 | |||||||||||
Rockwell Automation Inc. | United States | 656 | 144,766 | |||||||||||
|
| |||||||||||||
378,035 | ||||||||||||||
|
| |||||||||||||
Electronic Equipment, Instruments & Components 0.4% | ||||||||||||||
Murata Manufacturing Co. Ltd. | Japan | 3,200 | 205,379 | |||||||||||
|
| |||||||||||||
Entertainment 2.1% | ||||||||||||||
Activision Blizzard Inc. | United States | 4,482 | 362,818 | |||||||||||
a | Electronic Arts Inc. | United States | 1,672 | 218,045 | ||||||||||
Nexon Co. Ltd. | Japan | 2,800 | 69,569 | |||||||||||
Nintendo Co. Ltd. | Japan | 600 | 339,202 | |||||||||||
Square Enix Holdings Co. Ltd. | Japan | 500 | 32,976 | |||||||||||
a | Take-Two Interactive Software Inc. | United States | 657 | 108,550 | ||||||||||
|
| |||||||||||||
1,131,160 | ||||||||||||||
|
| |||||||||||||
Equity Real Estate Investment Trusts (REITs) 2.0% | ||||||||||||||
American Tower Corp. | United States | 1,976 | 477,659 | |||||||||||
Ascendas REIT | Singapore | 17,700 | 42,010 | |||||||||||
Dexus | Australia | 6,296 | 40,118 | |||||||||||
Gecina SA | France | 262 | 34,625 | |||||||||||
Goodman Group | Australia | 9,398 | 120,844 | |||||||||||
Public Storage | United States | 892 | 198,666 | |||||||||||
Segro PLC | United Kingdom | 6,821 | 82,221 | |||||||||||
Simon Property Group Inc. | United States | 852 | 55,107 | |||||||||||
Unibail-Rodamco-Westfield | France | 782 | 28,886 | |||||||||||
|
| |||||||||||||
1,080,136 | ||||||||||||||
|
| |||||||||||||
Food & Staples Retailing 1.3% | ||||||||||||||
Koninklijke Ahold Delhaize NV | Netherlands | 6,267 | 185,562 | |||||||||||
The Kroger Co. | United States | 4,556 | 154,494 | |||||||||||
Tsuruha Holdings Inc. | Japan | 100 | 14,129 | |||||||||||
Walmart Inc. | United States | 2,476 | 346,417 | |||||||||||
|
| |||||||||||||
700,602 | ||||||||||||||
|
| |||||||||||||
Food Products 0.4% | ||||||||||||||
Meiji Holdings Co. Ltd. | Japan | 600 | 45,712 | |||||||||||
a | The a2 Milk Co Ltd. | New Zealand | 4,255 | 43,145 | ||||||||||
Toyo Suisan Kaisha Ltd. | Japan | 500 | 26,343 | |||||||||||
b | WH Group Ltd., Reg S | Hong Kong | 53,000 | 42,947 | ||||||||||
Wilmar International Ltd. | China | 10,900 | 35,133 | |||||||||||
|
| |||||||||||||
193,280 | ||||||||||||||
|
| |||||||||||||
Gas Utilities 0.6% | ||||||||||||||
Enagas SA | Spain | 1,431 | 33,049 | |||||||||||
Hong Kong and China Gas Co. Ltd. | Hong Kong | 61,200 | 87,654 | |||||||||||
Osaka Gas Co. Ltd. | Japan | 2,000 | 38,852 | |||||||||||
Snam SpA | Italy | 11,588 | 59,641 |
48 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Gas Utilities (continued) | ||||||||||||||
Tokyo Gas Co. Ltd. | Japan | 2,000 | $ | 45,598 | ||||||||||
UGI Corp. | United States | 1,195 | 39,411 | |||||||||||
|
| |||||||||||||
304,205 | ||||||||||||||
|
| |||||||||||||
Health Care Equipment & Supplies 1.4% | ||||||||||||||
a | ABIOMED Inc. | United States | 163 | 45,161 | ||||||||||
Biomerieux | France | 233 | 36,558 | |||||||||||
Coloplast AS, B | Denmark | 689 | 108,922 | |||||||||||
DiaSorin SpA | Italy | 140 | 28,221 | |||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | New Zealand | 3,315 | 72,902 | |||||||||||
Hoya Corp. | Japan | 2,000 | 224,770 | |||||||||||
Siemens Healthineers AG | Germany | 727 | 32,651 | |||||||||||
a | Sonova Holding AG | Switzerland | 307 | 78,057 | ||||||||||
West Pharmaceutical Services Inc. | United States | 426 | 117,108 | |||||||||||
|
| |||||||||||||
744,350 | ||||||||||||||
|
| |||||||||||||
Health Care Providers & Services 0.3% | ||||||||||||||
HCA Healthcare Inc. | United States | 1,492 | 186,023 | |||||||||||
|
| |||||||||||||
Health Care Technology 0.9% | ||||||||||||||
Cerner Corp. | United States | 1,731 | 125,134 | |||||||||||
M3 Inc. | Japan | 2,600 | 160,144 | |||||||||||
a | Veeva Systems Inc. | United States | 781 | 219,609 | ||||||||||
|
| |||||||||||||
504,887 | ||||||||||||||
|
| |||||||||||||
Hotels, Restaurants & Leisure 1.6% | ||||||||||||||
Domino’s Pizza Inc. | United States | 220 | 93,562 | |||||||||||
b,c | Evolution Gaming Group AB, 144A, Reg S | Sweden | 712 | 47,318 | ||||||||||
Galaxy Entertainment Group Ltd. | Macau | 11,000 | 73,736 | |||||||||||
McDonald’s Corp. | United States | 2,105 | 462,026 | |||||||||||
Sodexo SA | France | 504 | 36,064 | |||||||||||
Yum! Brands Inc. | United States | 1,727 | 157,675 | |||||||||||
|
| |||||||||||||
870,381 | ||||||||||||||
|
| |||||||||||||
Household Durables 0.1% | ||||||||||||||
Sekisui House Ltd. | Japan | 3,600 | 63,366 | |||||||||||
|
| |||||||||||||
Household Products 1.8% | ||||||||||||||
Clorox Co. | United States | 725 | 152,373 | |||||||||||
Colgate-Palmolive Co. | United States | 4,645 | 358,362 | |||||||||||
Henkel AG & Co. KGaA | Germany | 594 | 55,655 | |||||||||||
Kimberly-Clark Corp. | United States | 1,948 | 287,641 | |||||||||||
Lion Corp. | Japan | 1,200 | 24,596 | |||||||||||
Unicharm Corp. | Japan | 2,100 | 93,767 | |||||||||||
|
| |||||||||||||
972,394 | ||||||||||||||
|
| |||||||||||||
Independent Power and Renewable Electricity Producers 0.2% | ||||||||||||||
Uniper SE | Germany | 1,120 | 36,196 | |||||||||||
Vistra Corp. | United States | 2,465 | 46,490 | |||||||||||
|
| |||||||||||||
82,686 | ||||||||||||||
|
| |||||||||||||
Industrial Conglomerates 0.3% | ||||||||||||||
CK Hutchison Holdings Ltd. | Hong Kong | 15,000 | 90,194 | |||||||||||
Jardine Matheson Holdings Ltd. | Hong Kong | 1,200 | 47,616 | |||||||||||
|
| |||||||||||||
137,810 | ||||||||||||||
|
| |||||||||||||
Insurance 0.4% | ||||||||||||||
Admiral Group PLC | United Kingdom | 1,079 | 36,422 | |||||||||||
Erie Indemnity Co., A | United States | 145 | 30,491 |
franklintempleton.com | Semiannual Report | 49 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Insurance (continued) | ||||||||||||||
NN Group NV | Netherlands | 1,653 | $ | 62,125 | ||||||||||
Sun Life Financial Inc. | Canada | 1,800 | 73,118 | |||||||||||
T&D Holdings Inc. | Japan | 2,900 | 28,360 | |||||||||||
|
| |||||||||||||
230,516 | ||||||||||||||
|
| |||||||||||||
Interactive Media & Services 3.0% | ||||||||||||||
a | Alphabet Inc., A | United States | 340 | 498,304 | ||||||||||
a | Alphabet Inc., C | United States | 338 | 496,725 | ||||||||||
Auto Trader Group PLC | United Kingdom | 5,533 | 40,272 | |||||||||||
a | Facebook Inc., A | United States | 1,934 | 506,514 | ||||||||||
b | Scout24 AG, Reg S | Germany | 617 | 53,903 | ||||||||||
|
| |||||||||||||
1,595,718 | ||||||||||||||
|
| |||||||||||||
Internet & Direct Marketing Retail 1.5% | ||||||||||||||
a | Amazon.com Inc. | United States | 165 | 519,540 | ||||||||||
eBay Inc. | United States | 3,995 | 208,140 | |||||||||||
a | Zalando SE | Germany | 873 | 81,796 | ||||||||||
|
| |||||||||||||
809,476 | ||||||||||||||
|
| |||||||||||||
IT Services 2.7% | ||||||||||||||
Accenture PLC, A | United States | 2,278 | 514,805 | |||||||||||
a | Akamai Technologies Inc. | United States | 602 | 66,545 | ||||||||||
a | Atos SE | France | 565 | 45,583 | ||||||||||
Capgemini SE | France | 658 | 84,684 | |||||||||||
Cognizant Technology Solutions Corp., A | United States | 2,981 | 206,941 | |||||||||||
Fujitsu Ltd. | Japan | 1,100 | 149,474 | |||||||||||
Jack Henry & Associates Inc. | United States | 272 | 44,225 | |||||||||||
NEC Corp. | Japan | 1,300 | 75,637 | |||||||||||
Nomura Research Institute Ltd. | Japan | 1,700 | 49,858 | |||||||||||
Otsuka Corp. | Japan | 500 | 25,490 | |||||||||||
a | VeriSign Inc. | United States | 596 | 122,091 | ||||||||||
Western Union Co. | United States | 1,856 | 39,774 | |||||||||||
|
| |||||||||||||
1,425,107 | ||||||||||||||
|
| |||||||||||||
Leisure Products 0.1% | ||||||||||||||
SHIMANO Inc. | Japan | 400 | 78,537 | |||||||||||
|
| |||||||||||||
Life Sciences Tools & Services 0.7% | ||||||||||||||
Lonza Group AG | Switzerland | 175 | 108,305 | |||||||||||
a | Mettler-Toledo International Inc. | United States | 135 | 130,376 | ||||||||||
Sartorius Stedim Biotech | France | 156 | 53,892 | |||||||||||
a | Waters Corp. | United States | 355 | 69,467 | ||||||||||
|
| |||||||||||||
362,040 | ||||||||||||||
|
| |||||||||||||
Machinery 2.0% | ||||||||||||||
Atlas Copco AB | Sweden | 2,251 | 94,366 | |||||||||||
Atlas Copco AB, A | Sweden | 3,851 | 184,504 | |||||||||||
Cummins Inc. | United States | 843 | 178,008 | |||||||||||
Epiroc AB, A | Sweden | 3,803 | 55,303 | |||||||||||
Epiroc AB, B | Sweden | 2,246 | 31,293 | |||||||||||
Knorr-Bremse AG | Germany | 298 | 35,169 | |||||||||||
Kone OYJ, B | Finland | 1,961 | 172,605 | |||||||||||
Otis Worldwide Corp. | United States | 2,349 | 146,625 | |||||||||||
Schindler Holding AG | Switzerland | 116 | 31,640 | |||||||||||
Schindler Holding AG, PC | Switzerland | 233 | 63,782 | |||||||||||
Techtronic Industries Co. Ltd. | Hong Kong | 7,000 | 91,768 | |||||||||||
|
| |||||||||||||
1,085,063 | ||||||||||||||
|
|
50 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Marine 0.1% | ||||||||||||||
Kuehne + Nagel International AG | Switzerland | 307 | $ | 59,913 | ||||||||||
|
| |||||||||||||
Metals & Mining 2.1% | ||||||||||||||
B2Gold Corp. | Canada | 6,100 | 39,594 | |||||||||||
BHP Group PLC | United Kingdom | 11,405 | 243,843 | |||||||||||
Boliden AB | Sweden | 1,577 | 46,993 | |||||||||||
Evolution Mining Ltd. | Australia | 8,452 | 34,833 | |||||||||||
Fortescue Metals Group Ltd. | Australia | 9,802 | 114,517 | |||||||||||
Franco-Nevada Corp. | Canada | 500 | 69,650 | |||||||||||
Kirkland Lake Gold Ltd. | Canada | 700 | 34,063 | |||||||||||
Rio Tinto Ltd. | Australia | 2,059 | 139,196 | |||||||||||
Rio Tinto PLC | Australia | 6,148 | 370,025 | |||||||||||
Steel Dynamics Inc. | United States | 1,196 | 34,242 | |||||||||||
|
| |||||||||||||
1,126,956 | ||||||||||||||
|
| |||||||||||||
Multi-Utilities 0.4% | ||||||||||||||
AGL Energy Ltd. | Australia | 3,642 | 35,554 | |||||||||||
Public Service Enterprise Group Inc. | United States | 2,277 | 125,030 | |||||||||||
Veolia Environnement SA | France | 3,123 | 67,457 | |||||||||||
|
| |||||||||||||
228,041 | ||||||||||||||
|
| |||||||||||||
Multiline Retail 1.6% | ||||||||||||||
Dollar General Corp. | United States | 1,419 | 297,451 | |||||||||||
Dollarama Inc. | Canada | 1,500 | 57,316 | |||||||||||
Next PLC | United Kingdom | 750 | 57,691 | |||||||||||
Target Corp. | United States | 2,836 | 446,443 | |||||||||||
|
| |||||||||||||
858,901 | ||||||||||||||
|
| |||||||||||||
Oil, Gas & Consumable Fuels 2.9% | ||||||||||||||
Cabot Oil & Gas Corp., A | United States | 2,282 | 39,615 | |||||||||||
ENEOS Holdings Inc. | Japan | 17,500 | 62,186 | |||||||||||
EOG Resources Inc. | United States | 3,247 | 116,697 | |||||||||||
Exxon Mobil Corp. | United States | 12,091 | 415,084 | |||||||||||
Neste Oil OYJ | Finland | 2,428 | 128,038 | |||||||||||
a | OMV AG | Austria | 856 | 23,489 | ||||||||||
Pioneer Natural Resources Co. | United States | 939 | 80,745 | |||||||||||
Royal Dutch Shell PLC, A | United Kingdom | 13,215 | 164,676 | |||||||||||
Total SE | France | 13,429 | 459,828 | |||||||||||
Valero Energy Corp. | United States | 1,747 | 75,680 | |||||||||||
|
| |||||||||||||
1,566,038 | ||||||||||||||
|
| |||||||||||||
Personal Products 1.4% | ||||||||||||||
Beiersdorf AG | Germany | 481 | 54,713 | |||||||||||
L’Oreal SA | France | 1,253 | 407,886 | |||||||||||
Unilever NV | United Kingdom | 4,831 | 291,751 | |||||||||||
|
| |||||||||||||
754,350 | ||||||||||||||
|
| |||||||||||||
Pharmaceuticals 3.4% | ||||||||||||||
Astellas Pharma Inc. | Japan | 10,500 | 155,913 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Japan | 3,900 | 174,249 | |||||||||||
a | Jazz Pharmaceuticals PLC | United States | 160 | 22,814 | ||||||||||
Novartis AG | Switzerland | 2,682 | 233,272 | |||||||||||
Novo Nordisk AS, B | Denmark | 7,707 | 533,429 | |||||||||||
Ono Pharmaceutical Co. Ltd. | Japan | 2,000 | 62,617 | |||||||||||
Orion OYJ | Finland | 602 | 27,299 | |||||||||||
Otsuka Holdings Co. Ltd. | Japan | 2,100 | 88,513 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Italy | 586 | 30,057 | |||||||||||
Roche Holding AG | Switzerland | 1,416 | 485,717 | |||||||||||
|
| |||||||||||||
1,813,880 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 51 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Professional Services 0.7% | ||||||||||||||
Adecco Group AG | Switzerland | 860 | $ | 45,567 | ||||||||||
Nihon M&A Center Inc. | Japan | 800 | 45,333 | |||||||||||
a | Randstad NV | Netherlands | 666 | 34,777 | ||||||||||
Robert Half International Inc. | United States | 647 | 34,252 | |||||||||||
SGS SA | Switzerland | 34 | 91,370 | |||||||||||
Wolters Kluwer NV | Netherlands | 1,570 | 134,103 | |||||||||||
|
| |||||||||||||
385,402 | ||||||||||||||
|
| |||||||||||||
Real Estate Management & Development 1.4% | ||||||||||||||
CapitaLand Ltd. | Singapore | 14,700 | 29,182 | |||||||||||
CK Asset Holdings Ltd. | Hong Kong | 15,000 | 73,065 | |||||||||||
Daito Trust Construction Co. Ltd. | Japan | 300 | 26,495 | |||||||||||
Deutsche Wohnen AG | Germany | 1,972 | 98,719 | |||||||||||
Hang Lung Properties Ltd. | Hong Kong | 11,000 | 27,791 | |||||||||||
Henderson Land Development Co. Ltd. | Hong Kong | 8,000 | 29,471 | |||||||||||
LEG Immobilien AG | Germany | 395 | 56,417 | |||||||||||
New World Development Co. Ltd. | Hong Kong | 8,500 | 41,129 | |||||||||||
Sun Hung Kai Properties Ltd. | Hong Kong | 7,000 | 89,239 | |||||||||||
Swiss Prime Site AG | Switzerland | 432 | 39,309 | |||||||||||
Vonovia SE | Germany | 2,922 | 200,723 | |||||||||||
Wharf Real Estate Investment Co. Ltd. | Hong Kong | 9,000 | 36,581 | |||||||||||
|
| |||||||||||||
748,121 | ||||||||||||||
|
| |||||||||||||
Road & Rail 1.6% | ||||||||||||||
Canadian National Railway Co. | Canada | 4,000 | 424,660 | |||||||||||
Canadian Pacific Railway Ltd. | Canada | 700 | 212,267 | |||||||||||
JB Hunt Transport Services Inc. | United States | 487 | 61,547 | |||||||||||
Knight-Swift Transportation Holdings Inc. | United States | 739 | 30,077 | |||||||||||
MTR Corp. Ltd. | Hong Kong | 8,500 | 41,952 | |||||||||||
Old Dominion Freight Line Inc. | United States | 538 | 97,335 | |||||||||||
|
| |||||||||||||
867,838 | ||||||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 2.8% | ||||||||||||||
Intel Corp. | United States | 10,467 | 541,981 | |||||||||||
Maxim Integrated Products Inc. | United States | 1,537 | 103,917 | |||||||||||
Skyworks Solutions Inc. | United States | 950 | 138,225 | |||||||||||
Texas Instruments Inc. | United States | 3,782 | 540,032 | |||||||||||
Tokyo Electron Ltd. | Japan | 700 | 181,285 | |||||||||||
|
| |||||||||||||
1,505,440 | ||||||||||||||
|
| |||||||||||||
Software 6.1% | ||||||||||||||
a | Adobe Inc. | United States | 1,093 | 536,040 | ||||||||||
a | Autodesk Inc. | United States | 1,241 | 286,683 | ||||||||||
a | Cadence Design Systems Inc. | United States | 1,612 | 171,888 | ||||||||||
a | Check Point Software Technologies Ltd. | Israel | 655 | 78,823 | ||||||||||
Citrix Systems Inc. | United States | 685 | 94,331 | |||||||||||
Constellation Software Inc. | Canada | 100 | 110,771 | |||||||||||
a | Fortinet Inc. | United States | 799 | 94,130 | ||||||||||
Intuit Inc. | United States | 1,520 | 495,839 | |||||||||||
Microsoft Corp. | United States | 2,529 | 531,925 | |||||||||||
a | Nice Ltd. | Israel | 344 | 77,836 | ||||||||||
SAP SE | Germany | 3,206 | 499,114 | |||||||||||
a | Synopsys Inc. | United States | 877 | 187,660 | ||||||||||
The Sage Group PLC | United Kingdom | 6,277 | 58,492 | |||||||||||
Trend Micro Inc. | Japan | 700 | 42,519 | |||||||||||
|
| |||||||||||||
3,266,051 | ||||||||||||||
|
|
52 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Specialty Retail 3.6% | ||||||||||||||
a | AutoZone Inc. | United States | 131 | $ | 154,271 | |||||||||
Best Buy Co. Inc. | United States | 1,337 | 148,795 | |||||||||||
Industria de Diseno Textil SA | Spain | 6,403 | 178,702 | |||||||||||
Kingfisher PLC | United Kingdom | 11,996 | 46,013 | |||||||||||
Lowe’s Cos. Inc. | United States | 3,186 | 528,430 | |||||||||||
Nitori Holdings Co. Ltd. | Japan | 400 | 82,820 | |||||||||||
a | O’Reilly Automotive Inc. | United States | 419 | 193,192 | ||||||||||
The Home Depot Inc. | United States | 1,866 | 518,207 | |||||||||||
Tractor Supply Co. | United States | 664 | 95,178 | |||||||||||
|
| |||||||||||||
1,945,608 | ||||||||||||||
|
| |||||||||||||
Technology Hardware, Storage & Peripherals 0.4% | ||||||||||||||
HP Inc. | United States | 7,952 | 151,008 | |||||||||||
Logitech International SA | Switzerland | 929 | 72,480 | |||||||||||
|
| |||||||||||||
223,488 | ||||||||||||||
|
| |||||||||||||
Textiles, Apparel & Luxury Goods 0.4% | ||||||||||||||
Hermes International | France | 179 | 154,531 | |||||||||||
Pandora AS | Denmark | 582 | 41,965 | |||||||||||
|
| |||||||||||||
196,496 | ||||||||||||||
|
| |||||||||||||
Tobacco 0.7% | ||||||||||||||
Philip Morris International Inc. | United States | 3,689 | 276,638 | |||||||||||
Swedish Match AB | Sweden | 925 | 75,736 | |||||||||||
|
| |||||||||||||
352,374 | ||||||||||||||
|
| |||||||||||||
Trading Companies & Distributors 0.6% | ||||||||||||||
Brenntag AG | Germany | 876 | 55,779 | |||||||||||
Fastenal Co. | United States | 3,280 | 147,895 | |||||||||||
Ferguson PLC | United Kingdom | 1,035 | 104,528 | |||||||||||
Monotaro Co. Ltd. | Japan | 600 | 29,679 | |||||||||||
|
| |||||||||||||
337,881 | ||||||||||||||
|
| |||||||||||||
Water Utilities 0.1% | ||||||||||||||
United Utilities Group PLC | United Kingdom | 3,885 | 42,983 | |||||||||||
|
| |||||||||||||
Wireless Telecommunication Services 1.1% | ||||||||||||||
KDDI Corp. | Japan | 9,500 | 239,098 | |||||||||||
NTT DOCOMO Inc. | Japan | 6,600 | 242,973 | |||||||||||
Softbank Corp. | Japan | 11,400 | 127,201 | |||||||||||
|
| |||||||||||||
609,272 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $38,821,456) | 40,659,005 | |||||||||||||
|
| |||||||||||||
Preferred Stocks 0.2% | ||||||||||||||
Germany 0.2% | ||||||||||||||
d | Henkel AG & Co. KGaA, 2.071%, pfd. | Germany | 1,002 | 104,951 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $38,920,367) 76% | 40,763,956 | |||||||||||||
Other Assets, less Liabilities 24% | 12,863,894 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 53,627,850 | ||||||||||||
|
|
See abbreviations on page 80.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption
franklintempleton.com | Semiannual Report | 53 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
from registration. These securities have been deemed liquid under guildelines approved by the Fund’s Board of Trustees. At September 30, 2020, the value of these securities was $144,168, representing 0.3% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2020, the value of this security was $47,318, representing 0.1% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
A supranational organization is an entity formed by two or more central governments through international treaties.
At September 30, 2020, the Fund had the following total return equity swap contracts outstanding. See Note 1(c).
Swaps | ||||||||||||||||||||
Description | Financing Rate | Payment Frequency | Counterparty | Maturity Date | Notional Amount (000)s | Unrealized Appreciation (Depreciation) | ||||||||||||||
OTC Swap Contracts Short | ||||||||||||||||||||
MSFTLSSP | 1-month USD LIBOR | At Maturity | MSCS | 10/21/20 | (257,781 | ) | 441,004 |
At September 30, 2020 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
Forward Exchange Contracts | ||||||||||||||||||||||||||||
Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Australian Dollar | MSCO | Buy | 549,000 | $ | 401,862 | 12/16/20 | $ | — | $ | (8,292 | ) | |||||||||||||||||
Australian Dollar | MSCO | Sell | 1,530,000 | 1,119,850 | 12/16/20 | 23,011 | — | |||||||||||||||||||||
Brazilian Real | MSCO | Buy | 3,422,000 | 646,918 | 12/16/20 | — | (41,056 | ) | ||||||||||||||||||||
Brazilian Real | MSCO | Sell | 143,000 | 27,208 | 12/16/20 | 1,890 | — | |||||||||||||||||||||
Czech Koruna | MSCO | Sell | 14,590,000 | 653,270 | 12/16/20 | 21,189 | — | |||||||||||||||||||||
Czech Koruna | MSCO | Sell | 15,915,000 | 705,523 | 12/16/20 | 16,040 | — | |||||||||||||||||||||
Euro | MSCO | Sell | 284,000 | 338,639 | 12/16/20 | 5,047 | — | |||||||||||||||||||||
Euro | MSCO | Sell | 70,000 | 83,159 | 12/16/20 | 936 | — | |||||||||||||||||||||
Israeli Shekel | MSCO | Sell | 1,766,000 | 516,176 | 12/16/20 | — | (770 | ) | ||||||||||||||||||||
Israeli Shekel | MSCO | Sell | 11,738,000 | 3,443,961 | 12/16/20 | 7,997 | — | |||||||||||||||||||||
Japanese Yen | MSCO | Buy | 97,535,000 | 920,263 | 12/16/20 | 4,913 | — | |||||||||||||||||||||
Japanese Yen | MSCO | Sell | 8,069,000 | 76,705 | 12/16/20 | 166 | — | |||||||||||||||||||||
Mexican Peso | MSCO | Buy | 1,959,000 | 92,054 | 12/16/20 | — | (4,072 | ) | ||||||||||||||||||||
Mexican Peso | MSCO | Buy | 17,234,000 | 803,358 | 12/16/20 | — | (29,351 | ) | ||||||||||||||||||||
New Turkish Lira | MSCO | Buy | 10,206,000 | 1,333,175 | 12/16/20 | — | (36,867 | ) | ||||||||||||||||||||
New Turkish Lira | MSCO | Buy | 2,088,000 | 273,923 | 12/16/20 | — | (8,717 | ) | ||||||||||||||||||||
New Zealand Dollar | MSCO | Sell | 1,775,000 | 1,188,570 | 12/16/20 | 15,370 | — | |||||||||||||||||||||
New Zealand Dollar | MSCO | Sell | 56,000 | 37,674 | 12/16/20 | 660 | — | |||||||||||||||||||||
Polish Zloty | MSCO | Buy | 1,986,000 | 531,747 | 12/16/20 | — | (17,975 | ) | ||||||||||||||||||||
Polish Zloty | MSCO | Buy | 121,000 | 32,238 | 12/16/20 | — | (936 | ) | ||||||||||||||||||||
Russian Ruble | MSCO | Buy | 11,647,000 | 154,335 | 12/16/20 | — | (5,414 | ) | ||||||||||||||||||||
Russian Ruble | MSCO | Buy | 2,361,000 | 31,565 | 12/16/20 | — | (1,377 | ) | ||||||||||||||||||||
Swedish Krona | MSCO | Buy | 630,000 | 71,817 | 12/16/20 | — | (1,360 | ) | ||||||||||||||||||||
Swedish Krona | MSCO | Buy | 9,088,000 | 1,045,808 | 12/16/20 | — | (29,441 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Sell | 98,000 | 108,323 | 12/16/20 | 1,417 | — | |||||||||||||||||||||
Swiss Franc | MSCO | Sell | 2,188,000 | 2,420,780 | 12/16/20 | 33,934 | — | |||||||||||||||||||||
South African Rand | MSCO | Buy | 245,000 | 14,765 | 12/17/20 | — | (208 | ) | ||||||||||||||||||||
South African Rand | MSCO | Buy | 2,340,000 | 137,304 | 12/17/20 | 1,729 | — | |||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 134,299 | $ | (185,836 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | (51,537 | ) | ||||||||||||||||||||||||
|
|
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
54 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
At September 30, 2020, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Index Contracts | ||||||||||||||||||||
Long Gilt | Long | 62 | $ | 10,909,704 | 12/29/20 | $ | 20,372 | |||||||||||||
U.S. Treasury 10 Yr. Note | Long | 50 | 6,976,562 | 12/21/20 | 9,427 | |||||||||||||||
Canada 10 Yr. Bond | Long | 49 | 5,568,924 | 12/18/20 | 15,682 | |||||||||||||||
Australian 10 Yr. Bond | Long | 47 | 5,032,632 | 12/15/20 | 32,550 | |||||||||||||||
S&P/TSX 60 Index | Long | 12 | 1,727,569 | 12/17/20 | (22,886 | ) | ||||||||||||||
Nikkei 225 Mini | Long | 5 | 1,098,740 | 12/10/20 | 2,056 | |||||||||||||||
FTSE 100 Index | Long | 10 | 755,189 | 12/18/20 | (27,485 | ) | ||||||||||||||
S&P 500 E-Mini | Long | 4 | 670,400 | 12/18/20 | (8,843 | ) | ||||||||||||||
Euro-BTP | Long | 3 | 519,179 | 12/08/20 | 4,723 | |||||||||||||||
FTSE/JSE Africa Top40 Index | Long | 16 | 483,281 | 12/17/20 | (20,470 | ) | ||||||||||||||
NASDAQ 100 E-Mini | Long | 2 | 456,290 | 12/18/20 | (1,731 | ) | ||||||||||||||
Hang Seng Index | Long | 3 | 453,484 | 10/29/20 | (4,037 | ) | ||||||||||||||
SPI 200 Index | Long | 1 | 103,964 | 12/17/20 | (2,654 | ) | ||||||||||||||
EURO STOXX 50 Index | Short | 1 | (37,455 | ) | 12/18/20 | 1,512 | ||||||||||||||
OMXS30 Index | Short | 14 | (286,453 | ) | 10/16/20 | (277 | ) | |||||||||||||
Mex Bolsa Index | Short | 31 | (526,076 | ) | 12/18/20 | (14,116 | ) | |||||||||||||
DAX Index | Short | 2 | (749,265 | ) | 12/18/20 | 25,693 | ||||||||||||||
CAC 40 10 Euro | Short | 16 | (900,783 | ) | 10/16/20 | 47,754 | ||||||||||||||
SGX Nifty 50 | Short | 45 | (1,012,860 | ) | 10/29/20 | (4,823 | ) | |||||||||||||
IBEX 35 Index | Short | 16 | (1,262,785 | ) | 10/16/20 | 56,351 | ||||||||||||||
Euro-Bund | Short | 52 | (10,641,850 | ) | 12/08/20 | (83,749 | ) | |||||||||||||
Euro-OAT | Short | 55 | (10,870,763 | ) | 12/08/20 | (48,549 | ) | |||||||||||||
Commodity Contracts | ||||||||||||||||||||
Cocoa, December | Long | 33 | 840,180 | 12/15/20 | 28,666 | |||||||||||||||
Gold 100 Ounce, December | Long | 4 | 758,200 | 12/29/20 | 4,943 | |||||||||||||||
Corn, July | Long | 28 | 556,150 | 7/14/21 | 15,271 | |||||||||||||||
Wheat, May | Long | 16 | 469,000 | 5/14/21 | 26,442 | |||||||||||||||
Soybean, November | Long | 7 | 358,225 | 11/13/20 | 6,904 | |||||||||||||||
Soybean Meal, December | Long | 9 | 308,520 | 12/14/20 | 16,070 | |||||||||||||||
Copper, December | Long | 3 | 227,438 | 12/29/20 | 11,293 | |||||||||||||||
Wheat, December | Long | 7 | 202,300 | 12/14/20 | 27,368 | |||||||||||||||
Cotton No. 2, December | Long | 6 | 197,370 | 12/08/20 | 5,757 | |||||||||||||||
Live Cattle, December | Long | 4 | 179,760 | 12/31/20 | 4,240 | |||||||||||||||
Sugar No. 11, February | Long | 11 | 166,443 | 2/26/21 | 9,146 | |||||||||||||||
Coffee ‘C’, December | Long | 3 | 124,819 | 12/18/20 | (9,144 | ) | ||||||||||||||
Silver, December | Long | 1 | 117,470 | 12/29/20 | (23,132 | ) | ||||||||||||||
Platinum, January | Long | 2 | 90,920 | 1/27/21 | (343 | ) | ||||||||||||||
Gasoline Rbob, October | Long | 1 | 49,627 | 10/30/20 | 3,404 | |||||||||||||||
Brent Crude, October | Short | 2 | (84,600 | ) | 10/30/20 | (1,623 | ) | |||||||||||||
NY Harbor ULSD, October | Short | 2 | (96,785 | ) | 10/30/20 | (2,810 | ) | |||||||||||||
Low Sulphur Gasoil, November | Short | 3 | (100,125 | ) | 11/12/20 | (680 | ) | |||||||||||||
WTI Crude, October | Short | 4 | (160,880 | ) | 10/20/20 | (4,540 | ) | |||||||||||||
Soybean Oil, December | Short | 10 | (198,780 | ) | 12/14/20 | (25,348 | ) | |||||||||||||
Corn, December | Short | 12 | (227,400 | ) | 12/14/20 | (33,784 | ) | |||||||||||||
Low Sulphur Gasoil, April | Short | 7 | (247,800 | ) | 4/12/21 | 813 | ||||||||||||||
Brent Crude, March | Short | 6 | (264,540 | ) | 3/31/21 | 580 | ||||||||||||||
Lean Hog, December | Short | 12 | (302,880 | ) | 12/14/20 | (19,795 | ) | |||||||||||||
Natural Gas, October | Short | 13 | (328,510 | ) | 10/28/20 | 43,770 | ||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts | $ | 59,968 | ||||||||||||||||||
|
|
*As of period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 55 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Liberty Systematic Style Premia ETF
The following table represents the individual short positions and related values of the equity securities underlying the total return swap with Morgan Stanley Capital Services LLC as of September 30, 2020 , expiration date 10/21/20:
Country | Shares | Value | ||||||||||||
Reference Entity – Short 100.00% | ||||||||||||||
Automobiles & Components 4.97% | ||||||||||||||
Aptiv PLC | United States | (1,557 | ) | $ | (142,746 | ) | ||||||||
Bayerische Motoren Werke AG | Germany | (1,845 | ) | (134,118 | ) | |||||||||
Daimler AG | Germany | (4,813 | ) | (259,820 | ) | |||||||||
Ford Motor Co | United States | (22,505 | ) | (149,883 | ) | |||||||||
General Motors Co | United States | (6,338 | ) | (187,541 | ) | |||||||||
Tesla Inc | United States | (501 | ) | (214,934 | ) | |||||||||
Valeo SA | France | (1,282 | ) | (39,462 | ) | |||||||||
Volkswagen AG | Germany | (980 | ) | (157,900 | ) | |||||||||
|
| |||||||||||||
(1,286,404 | ) | |||||||||||||
|
| |||||||||||||
Banks 1.91% | ||||||||||||||
Barclays PLC | United Kingdom | (92,551 | ) | (116,790 | ) | |||||||||
Citigroup Inc | United States | (3,250 | ) | (140,107 | ) | |||||||||
DNB ASA ORD NOK10 | Norway | (4,909 | ) | (67,838 | ) | |||||||||
ROYAL BANK OF SCOTLAND GROUP PLC ORD GBP1 | United Kingdom | (28,499 | ) | (39,073 | ) | |||||||||
Societe Generale SA | France | (4,395 | ) | (58,331 | ) | |||||||||
SVB Financial Group | United States | (300 | ) | (72,186 | ) | |||||||||
|
| |||||||||||||
(494,325 | ) | |||||||||||||
|
| |||||||||||||
Capital Goods 9.34% | ||||||||||||||
ACS Actividades de Construccion y Servicios SA | Spain | (97 | ) | (2,203 | ) | |||||||||
Airbus SE | France | (3,546 | ) | (258,100 | ) | |||||||||
Boeing Co/The | United States | (2,085 | ) | (344,567 | ) | |||||||||
Caterpillar Inc | United States | (2,147 | ) | (320,225 | ) | |||||||||
Ferrovial SA | Spain | (2,820 | ) | (68,618 | ) | |||||||||
General Electric Co | United States | (51,479 | ) | (320,714 | ) | |||||||||
Howmet Aerospace Inc | United States | (2,186 | ) | (36,550 | ) | |||||||||
Ingersoll Rand Inc | United States | (2,013 | ) | (71,663 | ) | |||||||||
Jacobs Engineering Group Inc | United States | (747 | ) | (69,299 | ) | |||||||||
Melrose Industries PLC | United Kingdom | (27,858 | ) | (41,597 | ) | |||||||||
MTU Aero Engines AG | Germany | (276 | ) | (45,958 | ) | |||||||||
Raytheon Technologies Corp | United States | (5,038 | ) | (289,887 | ) | |||||||||
Rolls-Royce Holdings PLC | United Kingdom | (11,147 | ) | (18,734 | ) | |||||||||
Safran SA | France | (1,935 | ) | (191,601 | ) | |||||||||
Sumitomo Corp | Japan | (7,000 | ) | (83,479 | ) | |||||||||
TransDigm Group Inc | United States | (184 | ) | (87,422 | ) | |||||||||
Westinghouse Air Brake Technologies Corp | United States | (1,053 | ) | (65,160 | ) | |||||||||
WSP Global Inc | Canada | (700 | ) | (45,823 | ) | |||||||||
Yaskawa Electric Corp | Japan | (1,500 | ) | (58,206 | ) | |||||||||
|
| |||||||||||||
(2,419,806 | ) | |||||||||||||
|
| |||||||||||||
Commercial & Professional Services 1.33% | ||||||||||||||
Brambles Ltd | Australia | (8,718 | ) | (65,548 | ) | |||||||||
Equifax Inc | United States | (239 | ) | (37,499 | ) | |||||||||
Nielsen Holdings PLC | United States | (2,070 | ) | (29,353 | ) | |||||||||
Recruit Holdings Co Ltd | Japan | (5,400 | ) | (212,868 | ) | |||||||||
|
| |||||||||||||
(345,268 | ) | |||||||||||||
|
| |||||||||||||
Consumer Durables & Apparel 1.55% | ||||||||||||||
DR Horton Inc | United States | (1,771 | ) | (133,941 | ) | |||||||||
Hasbro Inc | United States | (541 | ) | (44,751 | ) | |||||||||
Newell Brands Inc | United States | (2,320 | ) | (39,811 | ) | |||||||||
Peloton Interactive Inc., A | United States | (1,194 | ) | (118,493 | ) | |||||||||
Whirlpool Corp | United States | (357 | ) | (65,649 | ) | |||||||||
|
| |||||||||||||
(402,645 | ) | |||||||||||||
|
|
56 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Reference Entity – Short (continued) | ||||||||||||||
Consumer Services 2.99% | ||||||||||||||
Accor SA | France | (1,084 | ) | $ | (30,508 | ) | ||||||||
Aramark | United States | (1,340 | ) | (35,443 | ) | |||||||||
Aristocrat Leisure Ltd | Australia | (3,290 | ) | (70,672 | ) | |||||||||
Carnival Corp | United States | (2,831 | ) | (42,975 | ) | |||||||||
Darden Restaurants Inc | United States | (786 | ) | (79,182 | ) | |||||||||
GVC Holdings PLC | United Kingdom | (3,326 | ) | (41,880 | ) | |||||||||
InterContinental Hotels Group PLC | United Kingdom | (1,011 | ) | (53,509 | ) | |||||||||
Las Vegas Sands Corp | United States | (1,064 | ) | (49,646 | ) | |||||||||
Marriott International Inc/MD | United States | (765 | ) | (70,824 | ) | |||||||||
MGM Resorts International | United States | (2,749 | ) | (59,791 | ) | |||||||||
Restaurant Brands International Inc | Canada | (1,700 | ) | (97,336 | ) | |||||||||
Royal Caribbean Cruises Ltd | United States | (1,052 | ) | (68,096 | ) | |||||||||
Tabcorp Holdings Ltd | Australia | (14,071 | ) | (33,685 | ) | |||||||||
Wynn Resorts Ltd | United States | (576 | ) | (41,362 | ) | |||||||||
|
| |||||||||||||
(774,909 | ) | |||||||||||||
|
| |||||||||||||
Diversified Financials 5.55% | ||||||||||||||
AGNC Investment Corp | United States | (3,058 | ) | (42,537 | ) | |||||||||
Ally Financial Inc Com | United States | (2,154 | ) | (54,001 | ) | |||||||||
Annaly Capital Management Inc | United States | (8,260 | ) | (58,811 | ) | |||||||||
Apollo Global Management Inc | United States | (1,009 | ) | (45,153 | ) | |||||||||
Blackstone Group Inc/The | United States | (3,907 | ) | (203,945 | ) | |||||||||
Capital One Financial Corp | United States | (2,287 | ) | (164,344 | ) | |||||||||
Charles Schwab Corp/The | United States | (6,544 | ) | (237,089 | ) | |||||||||
Deutsche Bank AG | Germany | (10,992 | ) | (92,677 | ) | |||||||||
Discover Financial Services | United States | (1,767 | ) | (102,097 | ) | |||||||||
Equitable Holdings Inc | United States | (2,326 | ) | (42,426 | ) | |||||||||
Groupe Bruxelles Lambert SA | Belgium | (457 | ) | (41,254 | ) | |||||||||
KKR & Co Inc | United States | (2,938 | ) | (100,891 | ) | |||||||||
Macquarie Group Ltd | Australia | (2,081 | ) | (178,346 | ) | |||||||||
Standard Life Aberdeen PLC | United Kingdom | (13,487 | ) | (39,405 | ) | |||||||||
Voya Financial Inc | United States | (726 | ) | (34,797 | ) | |||||||||
|
| |||||||||||||
(1,437,773 | ) | |||||||||||||
|
| |||||||||||||
Energy 1.46% | ||||||||||||||
Equinor ASA | Norway | (3,313 | ) | (47,022 | ) | |||||||||
Halliburton Co | United States | (4,427 | ) | (53,345 | ) | |||||||||
Hess Corp | United States | (1,608 | ) | (65,815 | ) | |||||||||
Occidental Petroleum Corp | United States | (4,646 | ) | (46,507 | ) | |||||||||
SCHLUMBERGER LTD ORD USD0.01 | United States | (6,493 | ) | (101,031 | ) | |||||||||
Suncor Energy Inc | Canada | (5,400 | ) | (65,734 | ) | |||||||||
|
| |||||||||||||
(379,454 | ) | |||||||||||||
|
| |||||||||||||
Food & Staples Retailing 1.31% | ||||||||||||||
Aeon Co Ltd | Japan | (3,800 | ) | (101,761 | ) | |||||||||
George Weston Ltd | Canada | (500 | ) | (36,650 | ) | |||||||||
Sysco Corp | United States | (2,792 | ) | (173,718 | ) | |||||||||
Woolworths Group Ltd | Australia | (1,010 | ) | (26,372 | ) | |||||||||
|
| |||||||||||||
(338,501 | ) | |||||||||||||
|
| |||||||||||||
Food, Beverage & Tobacco 4.59% | ||||||||||||||
Anheuser-Busch InBev SA/NV | Belgium | (3,880 | ) | (210,318 | ) | |||||||||
Bunge Ltd | United States | (827 | ) | (37,794 | ) | |||||||||
Coca-Cola Co/The | United States | (1,812 | ) | (89,458 | ) | |||||||||
Conagra Brands Inc | United States | (2,863 | ) | (102,238 | ) | |||||||||
Constellation Brands Inc | United States | (992 | ) | (187,994 | ) | |||||||||
Heineken NV | Netherlands | (1,495 | ) | (133,026 | ) | |||||||||
Kerry Group PLC | Ireland | (903 | ) | (115,950 | ) |
franklintempleton.com | Semiannual Report | 57 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Reference Entity – Short (continued) | ||||||||||||||
Food, Beverage & Tobacco (continued) | ||||||||||||||
Lamb Weston Holdings Inc | United States | (835 | ) | $ | (55,335 | ) | ||||||||
McCormick & Co Inc/MD | United States | (720 | ) | (139,752 | ) | |||||||||
Mowi ASA | Norway | (2,555 | ) | (45,289 | ) | |||||||||
Orkla ASA | Norway | (4,333 | ) | (43,707 | ) | |||||||||
Treasury Wine Estates Ltd | Australia | (4,204 | ) | (26,938 | ) | |||||||||
|
| |||||||||||||
(1,187,799 | ) | |||||||||||||
|
| |||||||||||||
Health Care Equipment & Services 6.24% | ||||||||||||||
Boston Scientific Corp | United States | (8,362 | ) | (319,512 | ) | |||||||||
Cardinal Health Inc | United States | (1,710 | ) | (80,284 | ) | |||||||||
Centene Corp | United States | (3,459 | ) | (201,763 | ) | |||||||||
Cochlear Ltd | Australia | (375 | ) | (53,219 | ) | |||||||||
DexCom Inc | United States | (435 | ) | (179,320 | ) | |||||||||
Fresenius SE & Co KGaA | Germany | (2,435 | ) | (110,875 | ) | |||||||||
Hologic Inc | United States | (1,457 | ) | (96,847 | ) | |||||||||
Insulet Corp | United States | (384 | ) | (90,851 | ) | |||||||||
Laboratory Corp of America Holdings | United States | (569 | ) | (107,126 | ) | |||||||||
Molina Healthcare Inc | United States | (352 | ) | (64,430 | ) | |||||||||
Orpea | France | (307 | ) | (34,942 | ) | |||||||||
Ramsay Health Care Ltd | Australia | (1,056 | ) | (50,015 | ) | |||||||||
Sonic Healthcare Ltd | Australia | (2,586 | ) | (61,463 | ) | |||||||||
Teladoc Health Inc | United States | (343 | ) | (75,199 | ) | |||||||||
Zimmer Biomet Holdings Inc Com | United States | (667 | ) | (90,805 | ) | |||||||||
|
| |||||||||||||
(1,616,651 | ) | |||||||||||||
|
| |||||||||||||
Household & Personal Products 2.11% | ||||||||||||||
Essity AB | Sweden | (3,547 | ) | (120,004 | ) | |||||||||
Estee Lauder Cos Inc/The | United States | (1,320 | ) | (288,090 | ) | |||||||||
Shiseido Co Ltd | Japan | (2,400 | ) | (137,250 | ) | |||||||||
|
| |||||||||||||
(545,344 | ) | |||||||||||||
|
| |||||||||||||
Insurance 3.43% | ||||||||||||||
Alleghany Corp | United States | (82 | ) | (42,677 | ) | |||||||||
American Financial Group Inc/OH | United States | (441 | ) | (29,538 | ) | |||||||||
American International Group Inc | United States | (4,985 | ) | (137,237 | ) | |||||||||
Cincinnati Financial Corp | United States | (848 | ) | (66,119 | ) | |||||||||
Lincoln National Corp | United States | (1,119 | ) | (35,058 | ) | |||||||||
Markel Corp | United States | (79 | ) | (76,923 | ) | |||||||||
Prudential Financial Inc | United States | (2,156 | ) | (136,949 | ) | |||||||||
Prudential PLC | United Kingdom | (8,667 | ) | (124,260 | ) | |||||||||
QBE Insurance Group Ltd | Australia | (8,825 | ) | (54,461 | ) | |||||||||
Reinsurance Group of America Inc | United States | (401 | ) | (38,171 | ) | |||||||||
RenaissanceRe Holdings Ltd | United States | (296 | ) | (50,243 | ) | |||||||||
Sampo Oyj | Finland | (2,473 | ) | (97,990 | ) | |||||||||
|
| |||||||||||||
(889,626 | ) | |||||||||||||
|
| |||||||||||||
Materials 4.56% | ||||||||||||||
Agnico Eagle Mines Ltd | Canada | (1,400 | ) | (111,193 | ) | |||||||||
Albemarle Corp | United States | (612 | ) | (54,639 | ) | |||||||||
ArcelorMittal SA | France | (4,190 | ) | (55,934 | ) | |||||||||
Axalta Coating Systems Ltd | United States | (1,218 | ) | (27,003 | ) | |||||||||
Ball Corp | United States | (1,888 | ) | (156,931 | ) | |||||||||
Dow Inc | United States | (4,334 | ) | (203,915 | ) | |||||||||
First Quantum Minerals Ltd | Zambia | (3,600 | ) | (31,991 | ) | |||||||||
Freeport-McMoRan Inc | United States | (8,215 | ) | (128,483 | ) | |||||||||
Glencore PLC | Switzerland | (56,046 | ) | (116,626 | ) | |||||||||
Nippon Steel Corp | Japan | (3,200 | ) | (30,005 | ) | |||||||||
Nutrien Ltd | Canada | (3,200 | ) | (125,077 | ) |
58 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Reference Entity – Short (continued) | ||||||||||||||
Materials (continued) | ||||||||||||||
Orica Ltd | Australia | (2,347 | ) | $ | (25,956 | ) | ||||||||
Solvay SA | Belgium | (426 | ) | (36,697 | ) | |||||||||
South32 Ltd | Australia | (27,874 | ) | (40,756 | ) | |||||||||
Teck Resources Ltd | Canada | (2,600 | ) | (36,088 | ) | |||||||||
|
| |||||||||||||
(1,181,294 | ) | |||||||||||||
|
| |||||||||||||
Media & Entertainment 5.49% | ||||||||||||||
Altice USA Inc | United States | (1,832 | ) | (47,632 | ) | |||||||||
Charter Communications Inc Com Usd.001 Cl A | United States | (319 | ) | (199,164 | ) | |||||||||
DISH Network Corp | United States | (1,411 | ) | (40,961 | ) | |||||||||
IAC/InterActiveCorp | United States | (468 | ) | (56,057 | ) | |||||||||
Liberty Broadband Corp | United States | (626 | ) | (89,437 | ) | |||||||||
Liberty Media Group Trak Usd Npv Cl C | United States | (1,193 | ) | (43,270 | ) | |||||||||
Live Nation Entertainment Inc | United States | (940 | ) | (50,647 | ) | |||||||||
Match Group Inc | United States | (900 | ) | (99,585 | ) | |||||||||
Netflix Inc | United States | (194 | ) | (97,006 | ) | |||||||||
Pinterest Inc | United States | (1,728 | ) | (71,729 | ) | |||||||||
Roku Inc | United States | (495 | ) | (93,456 | ) | |||||||||
SEEK Ltd | Australia | (1,931 | ) | (29,466 | ) | |||||||||
Snap Inc | United States | (5,014 | ) | (130,916 | ) | |||||||||
Twitter Inc | United States | (4,558 | ) | (202,831 | ) | |||||||||
ViacomCBS Inc | United States | (3,159 | ) | (88,484 | ) | |||||||||
Zillow Group Inc | United States | (791 | ) | (80,358 | ) | |||||||||
|
| |||||||||||||
(1,420,999 | ) | |||||||||||||
|
| |||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.66% | ||||||||||||||
Alnylam Pharmaceuticals Inc | United States | (665 | ) | (96,824 | ) | |||||||||
Argenx SE | Netherlands | (244 | ) | (64,379 | ) | |||||||||
Bausch Health Cos Inc | United States | (2,000 | ) | (30,994 | ) | |||||||||
BioMarin Pharmaceutical Inc | United States | (957 | ) | (72,809 | ) | |||||||||
Catalent Inc | United States | (918 | ) | (78,636 | ) | |||||||||
Eisai Co Ltd | Japan | (1,300 | ) | (118,063 | ) | |||||||||
Elanco Animal Health Inc | United States | (2,341 | ) | (65,384 | ) | |||||||||
Exact Sciences Corp | United States | (849 | ) | (86,556 | ) | |||||||||
Grifols SA | Spain | (1,700 | ) | (49,020 | ) | |||||||||
Illumina Inc | United States | (879 | ) | (271,681 | ) | |||||||||
Ionis Pharmaceuticals Inc | United States | (767 | ) | (36,394 | ) | |||||||||
IQVIA Holdings Inc | United States | (1,156 | ) | (182,220 | ) | |||||||||
Moderna Inc | United States | (1,427 | ) | (100,960 | ) | |||||||||
Perrigo Co PLC | United States | (800 | ) | (36,728 | ) | |||||||||
Sarepta Therapeutics Inc | United States | (422 | ) | (59,262 | ) | |||||||||
Seattle Genetics Inc | United States | (431 | ) | (84,342 | ) | |||||||||
Takeda Pharmaceutical Co Ltd | Japan | (8,200 | ) | (290,920 | ) | |||||||||
|
| |||||||||||||
(1,725,172 | ) | |||||||||||||
|
| |||||||||||||
Real Estate 2.40% | ||||||||||||||
GPT Group/The | Australia | (11,273 | ) | (31,512 | ) | |||||||||
Lendlease Group | Australia | (3,766 | ) | (29,773 | ) | |||||||||
SBA Communications Corp | United States | (605 | ) | (192,680 | ) | |||||||||
Stockland | Australia | (13,906 | ) | (37,676 | ) | |||||||||
Ventas Inc | United States | (1,714 | ) | (71,920 | ) | |||||||||
VEREIT Inc | United States | (6,338 | ) | (41,197 | ) | |||||||||
VICI Properties Inc | United States | (2,701 | ) | (63,122 | ) | |||||||||
Welltower Inc | United States | (754 | ) | (41,538 | ) | |||||||||
Weyerhaeuser Co | United States | (3,891 | ) | (110,971 | ) | |||||||||
|
| |||||||||||||
(620,389 | ) | |||||||||||||
|
|
franklintempleton.com | Semiannual Report | 59 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Reference Entity – Short (continued) | ||||||||||||||
Retailing 3.72% | ||||||||||||||
Burlington Stores Inc | United States | (388 | ) | $ | (79,963 | ) | ||||||||
CarMax Inc | United States | (959 | ) | (88,142 | ) | |||||||||
Delivery Hero SE | Germany | (683 | ) | (78,586 | ) | |||||||||
Expedia Group Inc | United States | (813 | ) | (74,544 | ) | |||||||||
MercadoLibre Inc | Argentina | (180 | ) | (194,846 | ) | |||||||||
Ocado Group PLC | United Kingdom | (2,608 | ) | (92,517 | ) | |||||||||
Prosus NV | China | (2,131 | ) | (196,665 | ) | |||||||||
Rakuten Inc | Japan | (4,700 | ) | (50,416 | ) | |||||||||
Wayfair Inc | United States | (373 | ) | (108,547 | ) | |||||||||
|
| |||||||||||||
(964,226 | ) | |||||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 5.72% | ||||||||||||||
Advanced Micro Devices Inc | United States | (3,767 | ) | (308,856 | ) | |||||||||
Broadcom Inc | United States | (820 | ) | (298,742 | ) | |||||||||
Lam Research Corp | United States | (858 | ) | (284,642 | ) | |||||||||
Marvell Technology Group Ltd | Bermuda | (3,859 | ) | (153,202 | ) | |||||||||
Microchip Technology Inc | United States | (1,431 | ) | (147,050 | ) | |||||||||
NXP Semiconductors NV | Netherlands | (1,643 | ) | (205,063 | ) | |||||||||
ON Semiconductor Corp | United States | (2,388 | ) | (51,796 | ) | |||||||||
Renesas Electronics Corp | Japan | (4,600 | ) | (33,346 | ) | |||||||||
|
| |||||||||||||
(1,482,697 | ) | |||||||||||||
|
| |||||||||||||
Software & Services 14.53% | ||||||||||||||
Adyen NV | Netherlands | (63 | ) | (116,171 | ) | |||||||||
Afterpay Ltd | Australia | (1,300 | ) | (74,533 | ) | |||||||||
Amadeus IT Group SA | Spain | (2,317 | ) | (129,303 | ) | |||||||||
Coupa Software Inc | United States | (407 | ) | (111,616 | ) | |||||||||
Datadog Inc | United States | (774 | ) | (79,072 | ) | |||||||||
DocuSign Inc | United States | (709 | ) | (152,605 | ) | |||||||||
Dynatrace Inc | United States | (1,066 | ) | (43,727 | ) | |||||||||
Fidelity National Information Services Inc | United States | (2,221 | ) | (326,953 | ) | |||||||||
Fiserv Inc | United States | (2,662 | ) | (274,319 | ) | |||||||||
Global Payments Inc | United States | (1,736 | ) | (308,279 | ) | |||||||||
GoDaddy Inc | United States | (975 | ) | (74,071 | ) | |||||||||
Guidewire Software Inc | United States | (499 | ) | (52,031 | ) | |||||||||
MongoDB Inc | United States | (283 | ) | (65,517 | ) | |||||||||
Nexi SpA | Italy | (2,202 | ) | (44,207 | ) | |||||||||
Okta Inc | United States | (695 | ) | (148,626 | ) | |||||||||
Paycom Software Inc | United States | (301 | ) | (93,701 | ) | |||||||||
PTC Inc | United States | (654 | ) | (54,099 | ) | |||||||||
RingCentral Inc | United States | (285 | ) | (78,264 | ) | |||||||||
salesforce.com Inc | United States | (1,293 | ) | (324,957 | ) | |||||||||
Slack Technologies Inc | United States | (2,257 | ) | (60,623 | ) | |||||||||
Splunk Inc | United States | (958 | ) | (180,229 | ) | |||||||||
Square Inc | United States | (2,175 | ) | (353,546 | ) | |||||||||
Temenos AG | Switzerland | (214 | ) | (28,894 | ) | |||||||||
Trade Desk Inc/The | United States | (244 | ) | (126,582 | ) | |||||||||
Twilio Inc | United States | (735 | ) | (181,611 | ) | |||||||||
Workday Inc | United States | (1,021 | ) | (219,648 | ) | |||||||||
Zscaler Inc | United States | (433 | ) | (60,919 | ) | |||||||||
|
| |||||||||||||
(3,764,103 | ) | |||||||||||||
|
| |||||||||||||
Technology Hardware & Equipment 1.82% | ||||||||||||||
Corning Inc | United States | (4,434 | ) | (143,706 | ) | |||||||||
Hewlett Packard Enterprise Co | United States | (7,467 | ) | (69,966 | ) | |||||||||
NetApp Inc | United States | (1,300 | ) | (56,992 | ) | |||||||||
Nokia Oyj | Finland | (28,395 | ) | (111,546 | ) | |||||||||
Ricoh Co Ltd | Japan | (4,000 | ) | (26,760 | ) |
60 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Liberty Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Reference Entity – Short (continued) | ||||||||||||||
Technology Hardware & Equipment (continued) | ||||||||||||||
Western Digital Corp | United States | (1,698 | ) | $ | (62,062 | ) | ||||||||
|
| |||||||||||||
(471,032 | ) | |||||||||||||
|
| |||||||||||||
Telecommunication Services 2.49% | ||||||||||||||
Cellnex Telecom SA | Spain | (1,929 | ) | (117,626 | ) | |||||||||
SoftBank Group Corp | Japan | (4,500 | ) | (275,850 | ) | |||||||||
Tele2 AB | Sweden | (2,911 | ) | (41,242 | ) | |||||||||
Telefonica SA | Spain | (27,740 | ) | (95,539 | ) | |||||||||
Telenor ASA | Norway | (4,247 | ) | (71,013 | ) | |||||||||
TELUS Corp | Canada | (2,500 | ) | (43,852 | ) | |||||||||
|
| |||||||||||||
(645,122 | ) | |||||||||||||
|
| |||||||||||||
Transportation 3.18% | ||||||||||||||
Aurizon Holdings Ltd | Australia | (11,101 | ) | (33,816 | ) | |||||||||
Delta Air Lines Inc | United States | (934 | ) | (28,562 | ) | |||||||||
FedEx Corp | United States | (1,400 | ) | (352,128 | ) | |||||||||
Transurban Group | Australia | (15,601 | ) | (157,778 | ) | |||||||||
Uber Technologies Inc | United States | (5,694 | ) | (207,717 | ) | |||||||||
XPO Logistics Inc | United States | (523 | ) | (44,277 | ) | |||||||||
|
| |||||||||||||
(824,278 | ) | |||||||||||||
|
| |||||||||||||
Utilities 2.65% | ||||||||||||||
AES Corp/VA | United States | (3,501 | ) | (63,403 | ) | |||||||||
Algonquin Power & Utilities Corp | Canada | (3,500 | ) | (50,676 | ) | |||||||||
APA Group | Australia | (6,539 | ) | (48,415 | ) | |||||||||
CenterPoint Energy Inc | United States | (2,935 | ) | (56,792 | ) | |||||||||
E.ON SE | Germany | (9,071 | ) | (100,287 | ) | |||||||||
Edison International | United States | (814 | ) | (41,384 | ) | |||||||||
Essential Utilities Inc | United States | (1,339 | ) | (53,895 | ) | |||||||||
Southern Co/The | United States | (4,997 | ) | (270,937 | ) | |||||||||
|
| |||||||||||||
(685,789 | ) | |||||||||||||
|
| |||||||||||||
Total Value of Reference Entity – Morgan Stanley Capital Services LLC | $ | (25,903,606 | ) | |||||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 61 |
FRANKLIN TEMPLETON ETF TRUST
Statements of Assets and Liabilities
September 30, 2020 (unaudited)
Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETFa | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 163,189,267 | $ | 210,459,796 | $ | 57,787,501 | $ | 38,920,367 | ||||||||
|
| |||||||||||||||
Value – Unaffiliated issuers | $ | 163,634,572 | $ | 222,395,086 | $ | 56,652,261 | $ | 40,763,956 | ||||||||
Cash | 943,975 | 3,354,942 | 796,932 | 9,460,795 | ||||||||||||
Restricted cash for OTC derivative contracts | — | 9,960,000 | — | — | ||||||||||||
Foreign currency, at value (cost $–, $280,927, $– and $13,035, respectively) | — | 3,055,568 | — | 12,461 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 999,149 | — | 387,687 | — | ||||||||||||
Interest | 2,665,761 | 895,738 | 216,374 | 104,753 | ||||||||||||
Affiliates | — | — | — | 4,400 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | — | — | 2,271,132 | ||||||||||||
Swap contracts | 2,191 | — | — | 680,000 | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | 118,578 | — | 134,299 | ||||||||||||
Unrealized appreciation on OTC swap contracts | — | — | — | 441,004 | ||||||||||||
|
| |||||||||||||||
Total assets | 168,245,648 | 239,779,912 | 58,053,254 | 53,872,800 | ||||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Management fees | 45,912 | 31,888 | 9,188 | — | ||||||||||||
Investment securities purchased | 2,109,219 | — | 2,304,692 | — | ||||||||||||
Transfer agent fees | 9,122 | 9,122 | 9,122 | 18,736 | ||||||||||||
Trustees’ fees and expenses | — | — | 1,063 | 724 | ||||||||||||
Distributions to shareholders | 815,259 | 193,543 | 142,248 | — | ||||||||||||
Custodian fees | 2,723 | 3,183 | 28,402 | 1,837 | ||||||||||||
Professional fees | 23,403 | 15,017 | 28,832 | 10,550 | ||||||||||||
Reports to shareholders | 1,975 | 2,191 | 2,159 | 1,182 | ||||||||||||
Variation margin on futures contracts | — | — | — | 18,009 | ||||||||||||
Registration and filing fees | 3,060 | 5,960 | 1,930 | — | ||||||||||||
Deferred tax | — | 1,084 | — | — | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | 10,245,309 | — | 185,836 | ||||||||||||
Accrued expenses and other liabilities | 6,697 | 6,534 | 6,857 | 8,075 | ||||||||||||
|
| |||||||||||||||
Total liabilities | 3,017,370 | 10,513,831 | 2,534,493 | 244,950 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 165,228,278 | $ | 229,266,081 | $ | 55,518,761 | $ | 53,627,850 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 168,228,031 | $ | 227,375,890 | $ | 58,035,195 | $ | 58,895,666 | ||||||||
Total distributable earnings (loss) | (2,999,753 | ) | 1,890,191 | (2,516,434 | ) | (5,267,816 | ) | |||||||||
|
| |||||||||||||||
Net assets, at value | $ | 165,228,278 | $ | 229,266,081 | $ | 55,518,761 | $ | 53,627,850 | ||||||||
|
| |||||||||||||||
Shares outstanding | 6,550,000 | 9,050,000 | 2,300,000 | 2,400,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 25.23 | $ | 25.33 | $ | 24.14 | $ | 22.34 | ||||||||
|
|
aConsolidated financial statements. See Notes 12.
62 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2020 (unaudited)
Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETFa | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: | ||||||||||||||||
Unaffiliated issuers | $ | — | $ | — | $ | — | $ | 535,824 | ||||||||
Interest: (net of foreign taxes)b | ||||||||||||||||
Unaffiliated issuers | 4,323,741 | 158,387 | 975,646 | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 4,323,741 | 158,387 | 975,646 | 535,824 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 457,382 | 408,632 | 181,305 | 173,975 | ||||||||||||
Transfer agent fees | 7,821 | 7,821 | 7,821 | 15,622 | ||||||||||||
Custodian fees | 2,482 | 2,881 | 24,335 | 2,871 | ||||||||||||
Reports to shareholders | 4,017 | 3,945 | 4,033 | 1,494 | ||||||||||||
Registration and filing fees | 1,017 | 13,414 | 1,949 | 15,482 | ||||||||||||
Professional fees | 20,737 | 44,849 | 25,417 | 40,952 | ||||||||||||
Trustee fees and expenses | 5,894 | 2,746 | 3,253 | 2,652 | ||||||||||||
Other | 6,077 | 5,901 | 6,252 | 5,502 | ||||||||||||
|
| |||||||||||||||
Total expenses | 505,427 | 490,189 | 254,365 | 258,549 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (189,658 | ) | (263,171 | ) | (128,847 | ) | (86,029 | ) | ||||||||
|
| |||||||||||||||
Net expenses | 315,769 | 227,018 | 125,518 | 172,520 | ||||||||||||
|
| |||||||||||||||
Net investment income | 4,007,972 | (68,631 | ) | 850,128 | 363,304 | |||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (2,234,589 | ) | 188,594 | (534,975 | ) | (9,920,649 | ) | |||||||||
Foreign currency transactions | — | 870,479 | — | 285,921 | ||||||||||||
Forwards exchange contracts | — | 78,844 | — | (687,951 | ) | |||||||||||
Futures contracts | — | — | — | (959,831 | ) | |||||||||||
Swap contracts | 31,079 | — | — | — | ||||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (2,203,510 | ) | 1,137,917 | (534,975 | ) | (11,282,510 | ) | |||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 18,881,461 | 11,970,504 | 3,608,914 | 8,055,862 | ||||||||||||
Translation of other assets and liabilities denominated in foreign currencies | — | 7,379 | — | 17,267 | ||||||||||||
Futures contracts | — | — | — | 337,356 | ||||||||||||
Swap contracts | 513,520 | — | — | 441,004 | ||||||||||||
Forward exchange contracts | — | (10,189,027 | ) | — | 340,527 | |||||||||||
Change in deferred taxes on unrealized appreciation | — | (1,084 | ) | — | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | 19,394,981 | 1,787,772 | 3,608,914 | 9,192,016 | ||||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | 17,191,471 | 2,925,689 | 3,073,939 | (2,090,494 | ) | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 21,199,443 | $ | 2,857,058 | $ | 3,924,067 | $ | (1,727,190 | ) | |||||||
|
|
aConsolidated financial statements. See Notes 12.
bForeign taxes withheld on interest | $ | 119 | $ | 883 | $ | 37 | $ | 45,023 |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 63 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||||
Six Months Ended (unaudited) | Year Ended March 31, 2020 | Six Months Ended (unaudited) | Year Ended March 31, 2020 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 4,007,972 | $ | 2,697,766 | $ | (68,631 | ) | $ | 44,263 | |||||||
Net realized gain (loss) | (2,203,510 | ) | (26,694 | ) | 1,137,917 | 95,271 | ||||||||||
Net change in unrealized appreciation (depreciation) | 19,394,981 | (19,083,696 | ) | 1,787,772 | 59,318 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 21,199,443 | (16,412,624 | ) | 2,857,058 | 198,852 | |||||||||||
|
| |||||||||||||||
Distributions to shareholders | (5,305,451 | ) | (3,146,157 | ) | (951,028 | ) | (121,439 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 18,972,256 | 139,740,070 | 222,370,890 | — | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 34,866,248 | 120,181,289 | 224,276,920 | 77,413 | ||||||||||||
Net assets: |
|
| ||||||||||||||
Beginning of period | 130,362,030 | 10,180,741 | 4,989,161 | 4,911,748 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 165,228,278 | $ | 130,362,030 | $ | 229,266,081 | $ | 4,989,161 | ||||||||
|
|
64 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETFa | |||||||||||||||
Six Months Ended (unaudited) | Year Ended March 31, 2020 | Six Months Ended (unaudited) | Year Ended March 31, 2020b | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 850,128 | $ | 2,324,737 | $ | 363,304 | $ | 131,888 | ||||||||
Net realized gain (loss) | (534,975 | ) | (592,448 | ) | (11,282,510 | ) | 1,956,418 | |||||||||
Net change in unrealized appreciation (depreciation) | 3,608,914 | (4,015,523 | ) | 9,192,016 | (6,861,598 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 3,924,067 | (2,283,234 | ) | (1,727,190 | ) | (4,773,292 | ) | |||||||||
|
| |||||||||||||||
Distributions to shareholders | (855,962 | ) | (2,537,917 | ) | (117,486 | ) | (2,008 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (2,382,509 | ) | 2,489,243 | 4,524,461 | 55,723,365 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 685,596 | (2,331,908 | ) | 2,679,785 | 50,948,065 | |||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 54,833,165 | 57,165,073 | 50,948,065 | — | ||||||||||||
|
| |||||||||||||||
End of period | $ | 55,518,761 | $ | 54,833,165 | $ | 53,627,850 | $ | 50,948,065 | ||||||||
|
|
aConsolidated financial statements. See Note 12.
bFor the period December 18, 2019 (commencement of operations) to March 31, 2020.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 65 |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-four separate funds, four of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and are actively managed, thus they are not designed to track an index. The Trust began offering shares of Franklin Liberty High Yield Corporate ETF, Franklin Liberty International Aggregate Bond ETF, Franklin Liberty Senior Loan ETF and Franklin Liberty Systematic Style Premia ETF.
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) open for trading. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Funds’ pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securi-
ties denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net
settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination.
Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
The Funds entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net
franklintempleton.com | Semiannual Report | 67 |
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statements of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statements of Operations.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged
by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
See Note 10 regarding other derivative information.
d. Securities Purchased on a Delayed Delivery Basis
Certain or all Funds purchase securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Funds will generally purchase these securities with the intention of holding the securities, they may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
e. Senior Floating Rate Interests
Certain or all Funds invest in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Funds invest are generally readily marketable, but may be subject to certain restrictions on resale. On July 27, 2017, the United Kingdom Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.
f. Income and Deferred Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are
68 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2020, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years).
g. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital
accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense. These expenses are paid by the Fund or by investment manager, as applicable, according to the terms of the unified management fee agreement.
h. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
i. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specific number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities). For the period ended September 30, 2020, all Creation Unit transactions were made in cash.
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
franklintempleton.com | Semiannual Report | 69 |
1. Organization and Significant Accounting Policies (continued)
f. Income and Deferred Taxes (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
At September 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Liberty High Yield Corporate ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 800,000 | $ | 18,972,256 | 6,900,000 | $ | 179,541,274 | ||||||||||||||
Shares redeemed | — | — | (1,550,000 | ) | (39,801,204 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 800,000 | $ | 18,972,256 | 5,350,000 | $ | 139,740,070 | ||||||||||||||
|
| |||||||||||||||||||
Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 8,850,000 | $ | 222,370,890 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 8,850,000 | $ | 222,370,890 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
Franklin Liberty Senior Loan ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020 | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 50,000 | $ | 1,235,771 | 100,000 | $ | 2,489,243 | ||||||||||||||
Shares redeemed | (150,000 | ) | (3,618,280 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (100,000 | ) | $ | (2,382,509 | ) | 100,000 | $ | 2,489,243 | ||||||||||||
|
| |||||||||||||||||||
Franklin Liberty Systematic Style Premia ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020a | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 200,000 | $ | 4,524,461 | 2,200,001 | $ | 55,723,390 | ||||||||||||||
Shares redeemed | — | — | (1 | ) | (25 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 200,000 | $ | 4,524,461 | 2,200,000 | $ | 55,723,365 | ||||||||||||||
|
|
a For the period December 18, 2019 (commencement of operations) to March 31, 2020.
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Templeton Investment Management Limited (FTIML) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
a. Management Fees
Franklin Liberty High Yield Corporate ETF pays an investment management fee to Advisers based on the average daily net assets of the fund as follows:
Annualized Fee Rate | Net Assets | |
0.625% | Up to and including $100 million | |
0.500% | Over $100 million, up to and including $250 million | |
0.450% | Over $250 million, up to and including $7.5 billion | |
0.440% | Over $7.5 billion, up to and including $10 billion | |
0.430% | Over $10 billion, up to and including $12.5 billion | |
0.420% | Over $12.5 billion, up to and including $15 billion | |
0.400% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | Over $20 billion, up to and including $35 billion | |
0.355% | Over $35 billion, up to and including $50 billion | |
0.350% | In excess of $50 billion |
Franklin Liberty International Aggregate Bond ETF pays an investment management fee to FTIML based on the average daily net assets of the fund as follows:
Annualized Fee Rate | Net Assets | |
0.450% | Up to and including $1 billion | |
0.400% | Over $1 billion, up to and including $5 billion | |
0.350% | Over $5 billion, up to and including $10 billion | |
0.345% | Over $10 billion, up to and including $15 billion | |
0.340% | Over $15 billion, up to and including $20 billion | |
0.335% | In excess of $20 billion |
Franklin Liberty Senior Loan ETF pays an investment management fee to Advisers based on the average daily net assets of the fund as follows:
Annualized Fee Rate | Net Assets | |
0.650% | Up to and including $500 million | |
0.550% | Over $500 million, up to and including $1 billion | |
0.500% | Over $1 billion, up to and including $1.5 billion | |
0.450% | Over $1.5 billion, up to and including $6.5 billion | |
0.425% | Over $6.5 billion, up to and including $11.5 billion | |
0.400% | Over $11.5 billion, up to and including $16.5 billion | |
0.390% | Over $16.5 billion, up to and including $19 billion | |
0.380% | Over $19 billion, up to and including $21.5 billion | |
0.370% | In excess of $21.5 billion |
Franklin Liberty Systematic Style Premia ETF pays an investment management fees to Advisors based on a fee equal to an annual rate of 0.61% the average daily net assets of the Fund.
franklintempleton.com | Semiannual Report | 71 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
a. Management Fees (continued)
For the period ended September 30, 2020, each Fund’s annualized effective investment management fee rate based on daily net assets was as follows:
Annualized Fee Rate | ||
Franklin Liberty High Yield Corporate ETF | 0.579% | |
Franklin Liberty International Aggregate Bond ETF | 0.450% | |
Franklin Liberty Senior Loan ETF | 0.650% | |
Franklin Liberty Systematic Style Premia ETF | 0.650% |
Effective March 1, 2019, under a subadvisory agreement, FTIML, an affiliate of Advisers, provides subadvisory services to Franklin Liberty International Aggregate Bond ETF. The subadvisory fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
b. Administrative Fees
Under an agreement with Advisers, and FTIML, FT Services provides administrative services to the Funds. The fee is paid by Advisers, and FTIML, based on each of the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Waiver and Expense Reimbursements
Advisers have contractually agreed in advance to waive or limit its fees and to assume as their own expense certain expenses otherwise payable by Franklin Liberty High Yield Corporate ETF and Franklin Liberty Senior Loan ETF so that the expenses (including acquired fund fees and expenses) for each of the Funds do not exceed 0.40% and 0.45%, respectively, based on the average net assets (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until July 31, 2021. FTIML has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by Franklin Liberty International Aggregate Bond ETF so that the expenses (including acquired fund fees and expenses) of the Fund do not exceed 0.25% based on the average net assets (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until July 31, 2021. Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end. For Franklin Liberty Systematic Style Premia ETF, the investment manager has contractually agreed to waive the management fee it receives from the Fund in an amount equal to the management fee paid by a Cayman Islands-based company that is wholly-owned by the Fund (Subsidiary). The waiver may not be terminated and will remain in effect for as long as the investment manager’s contract with the Subsidiary is in place. Additionally, the investment manager has contractually agreed to waive or assume certain expenses so that total annual Fund operating expenses (including acquired fund fees and expenses, but excluding certain non-routine expenses) for the Fund do not exceed 0.61% until July 31, 2021. Contractual fee waiver and/or expense reimbursement agreements may not be changed or terminated during the time period set forth above.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
d. Other Affiliated Transactions
At September 30, 2020, the shares of the Funds were owned by the following entities.
Fund | Shares | Percentage of Outstanding Sharesa | ||||||
Franklin Liberty High Yield Corporate ETF | ||||||||
Franklin Conservative Allocation Fund | 744,689 | 11.4% | ||||||
Franklin Moderate Allocation Fund | 762,426 | 11.6% | ||||||
Franklin Total Return Fund | 3,830,000 | 58.5% | ||||||
|
| |||||||
5,337,115 | 81.5% | |||||||
|
| |||||||
Franklin Liberty International Aggregate Bond ETF | ||||||||
Franklin Conservative Allocation Fund | 2,455,700 | 27.1% | ||||||
Franklin Moderate Allocation Fund | 2,433,575 | 26.9% | ||||||
Franklin Growth Allocation Fund | 744,475 | 8.2% | ||||||
Franklin 529 Portfolios | 2,674,725 | 29.6% | ||||||
|
| |||||||
8,308,475 | 91.8% | |||||||
|
| |||||||
Franklin Liberty Senior Loan ETF | ||||||||
Franklin Total Return Fund | 914,900 | 39.8% | ||||||
Franklin Floating Rate Master Trust | 957,785 | 41.6% | ||||||
|
| |||||||
1,872,685 | 81.4% | |||||||
|
| |||||||
Franklin Liberty Systematic Style Premia ETF | ||||||||
Franklin Conservative Allocation Fund | 268,450 | 11.2% | ||||||
Franklin Moderate Allocation Fund | 421,300 | 17.6% | ||||||
Franklin Growth Allocation Fund | 286,300 | 11.9% | ||||||
Franklin Managed Income Fund | 1,175,000 | 49.0% | ||||||
Franklin LifeSmart™ 2020 – 2055 Retirement Target Funds | 130,325 | 5.4% | ||||||
|
| |||||||
2,281,375 | 95.1% | |||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2020, the capital loss carryforwards were as follows:
Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | |||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | — | $ | — | $ | 367,180 | $ | — | ||||||||
Short term | — | — | 290,092 | — | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | — | $ | — | $ | 657,272 | $ | — | ||||||||
|
|
For tax purposes, the Funds may elect to defer any portion of Post October Capital loss to the first day of the following fiscal year. At March 31, 2020, Franklin Liberty High Yield Corporate ETF deferred Post October Capital loss of $271,097.
franklintempleton.com | Semiannual Report | 73 |
3. Transactions with Affiliates (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
At September 30, 2020, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | |||||||||||||
Cost of investments | $ | 163,189,267 | $ | 210,459,796 | $ | 57,787,501 | $ | 38,920,367 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 4,415,728 | $ | 12,234,266 | $ | 155,641 | $ | 3,261,432 | ||||||||
Unrealized depreciation | (3,970,423 | ) | (298,976 | ) | (1,290,881 | ) | (1,417,843 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 445,305 | $ | 11,935,290 | $ | (1,135,240 | ) | $ | 1,843,589 | |||||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of bond discounts and premiums.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2020, were as follows:
Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | |||||||||||||
Purchases | $ | 67,109,351 | $ | 210,336,088 | $ | 13,323,973 | $ | 30,778,582 | ||||||||
Sales | $ | 52,750,211 | $ | 16,089,348 | $ | 15,114,389 | $ | 21,935,586 |
6. Credit Risk
At September 30, 2020, Franklin Liberty High Yield Corporate ETF, Franklin Liberty International Aggregate Bond ETF, Franklin Liberty Senior Loan ETF and Franklin Liberty Systematic Style Premia ETF had 96.11%, 0.11%, 87.93% and 0.00%, respectively, of their portfolio invested in high yield securities, senior secured floating rate notes, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.
7. Global Credit Facility
The Funds, Franklin Liberty High Yield Corporate ETF, Franklin Liberty Senior Loan ETF together with other U.S. registered and foreign investment funds (collectively Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 5, 2021. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.
Under the terms of the Global Credit Facility, the Funds shall, in addition to interest charged on any borrowings made by the Funds and other costs incurred by the Funds, pay their share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon their relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the reporting period, the Funds did not use the Global Credit Facility.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.
9. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
10. Other Derivative Information
At September 30, 2020, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
Franklin Liberty International Aggregate Bond ETF | ||||||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 118,578 | Unrealized depreciation on OTC forward exchange contracts | $ | 10,245,309 | ||||||
|
|
|
| |||||||||
Totals | $ | 118,578 | $ | 10,245,309 | ||||||||
|
|
|
| |||||||||
Franklin Liberty Liberty Systematic Style ETF | ||||||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 134,299 | Unrealized depreciation on OTC forward exchange contracts | $ | 185,836 | ||||||
Interest rate contracts | Swap contracts | 441,004 | Swap contracts | — | ||||||||
Equity contracts | Variation margin on futures contracts | 420,797 | a | Variation margin on futures contracts | 360,819 | a | ||||||
|
|
|
| |||||||||
Totals | $ | 996,100 | $ | 546,655 | ||||||||
|
|
|
|
a This amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
10. Other Derivative Information (continued)
For the period ended September 30, 2020, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
Franklin Liberty High Yield Corporate ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Swap contracts | Swap contracts | $ | 31,079 | Swap contracts | $ | 513,520 | ||||||
|
|
|
| |||||||||
Totals | $ | 31,079 | $ | 513,520 | ||||||||
|
|
|
| |||||||||
Franklin Liberty International Aggregate Bond ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Foreign exchange contracts | Forward exchange contracts | $ | 78,844 | Forward exchange contracts | $ | (10,189,027 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 78,844 | $ | (10,189,027 | ) | |||||||
|
|
|
| |||||||||
Franklin Liberty Systematic Style Premia ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Index contracts | Futures contracts | $ | (959,831 | ) | Futures contracts | $ | 337,356 | |||||
Interest rate contracts | Swap contracts | — | Swap contracts | 441,004 | ||||||||
Foreign exchange contracts | Forward exchange contracts | (687,951 | ) | Forward exchange contracts | 340,527 | |||||||
|
|
|
| |||||||||
Totals | $ | (1,647,782 | ) | $ | 1,118,887 | |||||||
|
|
|
|
For the period ended September 30, 2020, the average month end notional amount of futures and swap contracts and average month end contract value for forward exchange contracts were as follows:
Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Systematic Style Premia ETF | ||||||||||
Credit default swap contracts | $ | 990,000 | $ | — | $ | — | ||||||
Futures contracts | $ | — | $ | — | $ | 36,867,616 | ||||||
Forward exchange contracts | $ | — | $ | 160,853,372 | $ | 55,206,953 | ||||||
Interest rate contracts | $ | — | $ | — | $ | 27,546,901 |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
10. Other Derivative Information (continued)
At September 30, 2020, the Funds’ OTC derivative assets and liabilities are as follows:
Gross and Net Amounts of Assets and Liabilities Presented in the Statements of Assets and Liabilities | ||||||||
Assetsa | Liabilitiesa | |||||||
Franklin Liberty International Aggregate Bond ETF | ||||||||
Forward exchange contracts | $ | 118,578 | $ | 10,245,309 | ||||
|
| |||||||
Franklin Liberty Systematic Style Premia ETF | ||||||||
Forward exchange contracts | $ | 134,299 | $ | 185,836 | ||||
Interest rate contracts | $ | 441,004 | $ | — | ||||
|
|
aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
At September 30, 2020, the Funds’ OTC derivative assets, which may be offset against the Funds’ OTC derivative liabilities and collateral received from the counterparty, are as follows:
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Receiveda | Cash Collateral Receiveda | Net Amount (Not less than zero) | ||||||||||||||||
Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
CITI | $ | 118,578 | $ | (118,578 | ) | $ | — | $ | — | $ | — | |||||||||
|
| |||||||||||||||||||
Franklin Liberty Systematic Style Premia ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
MSCO | $ | 134,299 | $ | (134,299 | ) | $ | — | $ | — | $ | — | |||||||||
MSCS | 441,004 | — | — | — | 441,004 | |||||||||||||||
|
| |||||||||||||||||||
Total | $ | 575,303 | $ | (134,299 | ) | $ | — | $ | — | $ | 441,004 | |||||||||
|
|
a In some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of over collateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
10. Other Derivative Information (continued)
At September 30, 2020, the Funds’ OTC derivative liabilities, which may be offset against the Funds’ OTC derivative assets and collateral pledged to the counterparty, are as follows:
Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero) | ||||||||||||||||
Franklin Liberty International Aggregate Bond ETF Counterparty | ||||||||||||||||||||
CITI | $ | 10,245,309 | $ | (118,578 | ) | $ | — | $ | — | $ | 10,126,731 | |||||||||
|
| |||||||||||||||||||
Franklin Liberty Systematic Style Premia ETF Counterparty | ||||||||||||||||||||
MSCO | $ | 185,836 | $ | (134,299 | ) | $ | — | $ | — | $ | 51,537 | |||||||||
|
|
a In some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of over collateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
11. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
A summary of inputs used as of September 30, 2020, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Liberty High Yield Corporate ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 159,273,280 | $ | 2,500 | $ | 159,275,780 | ||||||||
Equity Investments | 28,792 | — | — | 28,792 | ||||||||||||
Short-Term Investments | — | 4,330,000 | — | 4,330,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 28,792 | $ | 163,603,280 | $ | 2,500 | $ | 163,634,572 | ||||||||
|
|
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
11. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Foreign Government and Agency Securities | $ | — | $ | 200,286,823 | $ | — | $ | 200,286,823 | ||||||||
Corporate Bonds & Notes | — | 10,273,263 | — | 10,273,263 | ||||||||||||
Short-Term Investments | — | 11,835,000 | — | 11,835,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | — | $ | 222,395,086 | $ | — | $ | 222,395,086 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 118,578 | $ | — | $ | 118,578 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 10,245,309 | $ | — | $ | 10,245,309 | ||||||||
|
| |||||||||||||||
Franklin Liberty Senior Loan ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 1,519,564 | $ | — | $ | 1,519,564 | ||||||||
Senior Floating Rate Interests | — | 48,752,321 | — | 48,752,321 | ||||||||||||
Asset-Backed Securities | — | 2,910,376 | — | 2,910,376 | ||||||||||||
Short-Term Investments | — | 3,470,000 | — | 3,470,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | — | $ | 56,652,261 | $ | — | $ | 56,652,261 | ||||||||
|
| |||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 40,763,956 | $ | — | $ | — | $ | 40,763,956 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 134,299 | $ | — | $ | 134,299 | ||||||||
Futures Contracts | 420,797 | — | — | 420,797 | ||||||||||||
Swap Contracts | — | 441,004 | — | 441,004 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 420,797 | $ | 578,303 | $ | — | $ | 996,100 | ||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 185,836 | $ | — | $ | 185,836 | ||||||||
Futures Contracts | 360,819 | — | — | 360,819 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 360,819 | $ | 185,836 | $ | — | $ | 546,655 | ||||||||
|
|
a For detailed categories, see the accompanying Statement of Investments.
bIncludes common and preferred stocks.
12. Investments in FLSP Holdings Corporation
Franklin Liberty Systematic Style Premia ETF, (the “Fund”), invests in certain financial instruments and commodities/or commodity-linked derivative investments. The FLSP Holdings Corporation is a Cayman Islands exempted company with limited liability, is a wholly-owned subsidiary of the Fund, and is able to invest in certain financial instruments and/or commodity-linked derivative investments consistent with the investment objective of the Fund. At September 30, 2020, the Franklin Liberty Systematic Style Premia ETF investment(s) FLSP Holdings Corporation is reflected in the Fund’s Consolidated Statement of
Investments. At September 30, 2020, the net assets of the FLSP Holdings Corporation were $1,857,420, representing 3.46% of the Fund’s consolidated net assets. The Fund’s investment (s) in the FLSP Holdings Corporation is limited to 25% of consolidated assets.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
13. New Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the financial statements.
14. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Selected Portfolio | Currency | |||||
FHLB | Federal Home Loan Bank Rate | AUD | Australian Dollar | |||
NCI | National Median Cost of Funds Index | CAD | Canadian Dollar | |||
PIK | Payment-In-Kind | DKK | Danish Krone | |||
USD | Unified/Union School District | EUR | Euro | |||
CAC | Cotation Assistée en Continu | HUF | Hungary | |||
FRN | Floating Rate Note | IDR | Indonesian Rupiah | |||
TBD | To be determined | JPY | Japanese Yen | |||
MXN | Mexican Peso | |||||
USD | United States Dollar |
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FRANKLIN TEMPLETON ETF TRUST
At March 31, 2020, more than 50% of the Funds’ total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Funds on these investments. As shown in the table below, the Funds hereby report to shareholders the foreign source income and foreign taxes paid, pursuant to Section 853 of the Internal Revenue Code. This written statement will allow shareholders of record on June 12, 2020, to treat their proportionate share of foreign taxes paid by the Funds as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.
The following table provides a detailed analysis of foreign tax paid, foreign source income, and foreign source qualified dividends as reported by the Funds to shareholders of record.
MCH Number | Fund Name | Adjusted Foreign Tax Paid Per Share | Foreign Source Income Per Share | Foreign Source Qualified Dividend Per Share | ||||||||||
FT7A | Franklin Liberty International Aggregate Bond ETF | $ | 0.0003 | $ | 0.0299 | $ | 0.0000 |
Foreign Tax Paid Per Share is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.
Foreign Source Income Per Share is the amount per share of income dividends attributable to foreign securities held by the Fund, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.1
Foreign Source Qualified Dividends Per Share is the amount per share of foreign source qualified dividends, plus any foreign taxes withheld on these dividends. These amounts represent the portion of the Foreign Source Income reported to you in column 2 that were derived from qualified foreign securities held by the Fund.1
By mid-February 2021, shareholders will receive Form 1099-DIV which will include their share of taxes paid and foreign source income distributed during the calendar year 2020. The Foreign Source Income reported on Form 1099-DIV has not been adjusted for the rate differential on foreign source qualified dividend income. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.
1. Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to Form 1116 for more information.
franklintempleton.com | Semiannual Report | 81 |
FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Liberty High Yield Corporate ETF
Franklin Liberty International Aggregate Bond ETF
Franklin Liberty Senior Loan ETF
(each a Fund)
At a meeting held on May 14, 2020 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisers, Inc. (FAI) and the Trust, on behalf of the Franklin Liberty High Yield Corporate ETF and the Franklin Liberty Senior Loan ETF, an investment management agreement between Franklin Templeton Investment Management Limited (FTIML) and the Trust, on behalf of the Franklin Liberty International Aggregate Bond ETF and an investment sub-advisory agreement between FTIML and FAI, on behalf of the Franklin Liberty International Aggregate Bond ETF (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate. FAI and FTIML are each referred to herein as a Manager.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by each Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to each Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from each Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to:
(i) the nature, extent and quality of the services provided by each Manager; (ii) the investment performance of each Fund; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by each Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of each Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by each Manager and its affiliates; and management fees charged by each Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the effectiveness of those plans during the pandemic, and developing strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity and liquidity risk management. The Board further noted its ongoing engagement with management, the Funds’ auditor and State Street Bank and Trust Company, the Funds’ custodian, about their responses to the pandemic and the pandemic’s impact on their operating continuity, as well as the impact on the Funds (especially with respect to valuation and liquidity).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Managers’ parent, and its commitment to the registered
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions currently provided by FT or an affiliate to other funds in the complex, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. Specifically, the Board discussed with management the expected impact of the Legg Mason acquisition on FT and the Funds, including management’s expectations with respect to the integration of Legg Mason’s exchange-traded funds into the FT family of funds. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, in her role as President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by each Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for the one-year period ended February 29, 2020. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with each Manager about the performance of the Funds to date, particularly as compared to peers, and referenced earlier discussions with each Manager on matters related to, among other things, the importance of performance to asset growth and growth of market share, the comparability of peer data, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding each Manager’s strategy behind the overall product line-up, the sources of asset growth, the nature of each Manager’s research, potential use of innovative data and technology,
and investments in marketing and distribution. Finally, the Board noted each Manager’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
The Performance Universe for the Franklin Liberty High Yield Corporate ETF included the Fund and all retail and institutional high yield funds and exchange-traded funds. The Performance Universe for the Franklin Liberty International Aggregate Bond ETF included the Fund and all retail and institutional international income funds and exchange-traded funds. The Performance Universe for the Franklin Liberty Senior Loan ETF included the Fund and all retail and institutional loan participation funds and exchange-traded funds. The Funds commenced operations on May 30, 2018, and thus have been in operation for less than three years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians of their respective Performance Universes. The Board concluded that the Funds’ performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by
Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin Liberty High Yield Corporate ETF – The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and five
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
other high yield funds. The Board noted that the Management Rate for the Fund was above the median of its Expense Group, but its actual total expense ratio was below the median and in the first quintile (least expensive) of its Expense Group. The Board also noted that the Fund’s actual total expense ratio reflected a fee waiver from management and its one-year annualized total return also fell in the first quintile (best) of its Performance Universe. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin Liberty International Aggregate Bond ETF and Franklin Liberty Senior Loan ETF – The Expense Group for the Franklin Liberty International Aggregate Bond ETF was comprised of actively managed exchange-traded funds, which included the Fund and two emerging markets hard currency debt funds. The Expense Group for the Franklin Liberty Senior Loan ETF was comprised of actively managed exchange-traded funds, which included the Fund and three other loan participation funds. The Board noted that the Management Rate and actual total expense ratio for each Fund were below the median of its respective Expense Group. The Board also noted the small size of each Expense Group and that each Fund’s actual total expense ratio reflected a fee waiver from management. The Board concluded that the Management Rates charged to the Funds are reasonable. In doing so, the Board noted that FAI is paid by FTIML out of the management fee FTIML receives from the Franklin Liberty International Aggregate Bond ETF.
Profitability
The Board reviewed and considered information regarding the profits realized by each Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged to review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund
operations conducted by each Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up-front expenditures by each Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements, notably in the area of cybersecurity protections.
The Board also considered the extent to which each Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by each Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which each Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints for each Fund, which operate generally to share any economies of scale with the Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Managers incur across the FT family of funds as a whole. The Board concluded that to the extent economies of scale may be realized by a Manager and its affiliates, each Fund’s management fee structure provided a sharing of benefits with the Fund and its shareholders as the Fund grows. The Board noted that as of December 31, 2019, the net assets of each Fund were less than $61 million. The Board recognized that there would not likely be any economies of scale until these Funds’ assets grow.
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SHAREHOLDER INFORMATION
Conclusion Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program – Non-In-Kind ETFs
Franklin Liberty High Yield Corporate ETF
Franklin Liberty International Aggregate Bond ETF
Franklin Liberty Systematic Style Premia ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global
Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Liquidity Risk Management Program – Bank Loan ETF
Franklin Liberty Senior Loan ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding
sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds investments where the time required to settle a sale of the investment may exceed 7 calendar days and are classified as “Less Liquid Investments”. Less liquid Investments are defined as any investment reasonably expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, but where the sale or disposition is reasonably expected to settle in more than seven calendar days. The Fund established and maintained a HLIM. During the reporting period, the Fund maintained the necessary level of Highly Liquid Investments and did not experience any HLIM shortfalls.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”), was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
at libertyshares.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at libertyshares.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report Franklin Templeton ETF Trust | ||||||
Investment Managers | Distributor | Investor Services | ||||
Franklin Advisers, Inc. Franklin Templeton Investment Management Limited | Franklin Templeton Distributors, Inc. (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
© 2020 Franklin Templeton Investments. All rights reserved. | ETF6 S 11/20 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2020
Franklin Disruptive Commerce ETF | Franklin Intelligent Machines ETF | |
Franklin Genomic Advancements ETF |
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
Visit franklintempleton.com/investor/investments-and-solutions/investment-options/etfs/ for fund updates and documents.
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
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SEMIANNUAL REPORT
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), advanced significantly during the six months under review, as markets began to recover from the disruption created by the novel coronavirus (COVID-19). Before the period began, equity prices declined significantly due to the impact of the virus and related restrictions on travel, gatherings and economic activity. However, a steady equity market recovery amid unprecedented monetary and fiscal support led stocks, as measured by the S&P 500, to reach all-time price highs in early September 2020. Nonetheless, several risks tempered investors’ enthusiasm in the period’s final month, including persistent COVID-19 infection rates, fading hopes for additional stimulus, and uncertainties surrounding the upcoming presidential election.
Shortly before the beginning of the reporting period, the U.S. Federal Reserve (Fed) lowered the federal funds target rate to a range of 0.00%–0.25% and implemented a policy of unlimited, open-ended purchasing of government-backed and corporate bonds to help keep markets functioning. Additionally, the Fed announced in August 2020 that future interest rates could potentially remain low, even if inflation persistently exceeded the Fed’s 2% target. During the period, the federal government also passed several rounds of fiscal stimulus, providing aid to businesses, state and local governments and individuals.
The monetary and fiscal stimulus measures helped equities gain substantially for the period’s first five months, even as the economy struggled. The longest U.S. economic expansion in history ended in February (before the beginning of the period), according to the National Bureau of Economic Research, and the country slipped into a deep recession with second-quarter 2020 gross domestic product (GDP) declining at a record pace. Social distancing requirements weighed on businesses that require in-person contact, particularly brick-and-mortar retailers and travel and leisure companies. As a result, the unemployment rate surged to 14.7% in April as many businesses announced mass layoffs, but conditions began to improve as stimulus measures helped support consumer spending, and unemployment fell to 7.9% by period-end.1 Economic growth resumed in the third quarter at the fastest annualized rate on record as many businesses reopened, but the GDP remained below its pre-pandemic level.
The improving economic conditions buoyed stocks, and many investors were optimistic the economy would continue to improve as restrictions eased and potential COVID-19 vaccines and treatments were developed. Late in the period, however, some signs emerged that the economic recovery was stalling, including persistently high unemployment claims and low consumer confidence, leading stocks to reverse some of their earlier gains.
The foregoing information reflects our analysis and opinions as of September 30, 2020. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
1. Source: Bureau of Labor Statistics
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Franklin Disruptive Commerce ETF
This semiannual report for Franklin Disruptive Commerce ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. The Fund invests at least 80% of its net assets in equity securities of companies that are relevant to the Fund’s investment theme of disruptive commerce. These companies include those that are focused on or stand to benefit from electronic commerce, auctions, the sharing economy, electronic payments, drop shipping, direct marketing, significant decreases in transport and delivery costs and other activities or developments outlined in more detail in the Prospectus.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +98.60% based on market price and +99.25% based on net asset value (NAV). In comparison, the Russell 3000® Index posted a +33.26% total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
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.
Investment Strategy
We use fundamental, bottom-up research analysis to identify companies positioned to capitalize on disruptive innovation
Portfolio Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Internet & Direct Marketing Retail | 31.5% | |||
IT Services | 24.7% | |||
Software | 14.2% | |||
Entertainment | 11.3% | |||
Interactive Media & Services | 3.9% | |||
Diversified Consumer Services | 2.3% | |||
Health Care Technology | 2.2% | |||
Other | 9.1% | |||
Short-Term Investments & Other Net Assets | 0.8% |
or are enabling the further development of the disruptive commerce themes in the markets in which they operate. We evaluate market segments, products, services and business models positioned to benefit significantly from disruptive innovations in commerce relative to broad securities markets, and seek to identify the primary beneficiaries of new trends or developments in commerce. We may invest in companies in any economic sector or of any market capitalization and may invest in companies both inside and outside of the U.S. Although we search for investments across a large number of sectors, we expect to concentrate our investments in consumer discretionary-related industries.
1. Source: FactSet. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
The index is unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 19.
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FRANKLIN DISRUPTIVE COMMERCE ETF
Manager’s Discussion
During the reporting period, the information technology sector aided absolute performance, supported by the contributions of cloud-based commerce platform Shopify and digital payment company PayPal Holdings. In the consumer discretionary sector, online marketplace provider Fiverr International and online retail shopping firm Amazon.com helped results. Communication services also aided performance, led by a contribution from online gaming services company Sea.
During the reporting period, no sectors detracted from the Fund’s absolute performance. The top individual detractors were express delivery and logistical services firm ZTO Express Cayman, internet-based mailing and shipping firm Stamps.com, technology-enabled payment solutions company Network International Holdings, point of sale software provider Lightspeed POS and digital music service Spotify Technology.
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
Sea Ltd., ADR Entertainment | 7.0% | |||
Shopify Inc., A IT Services | 5.7% | |||
Amazon.com Inc. Internet & Direct Marketing Retail | 5.6% | |||
Fiverr International Ltd. Internet & Direct Marketing Retail | 5.1% | |||
Alibaba Group Holding Ltd., ADR Internet & Direct Marketing Retail | 5.0% | |||
MercadoLibre Inc. Internet & Direct Marketing Retail | 3.7% | |||
PayPal Holdings Inc. IT Services | 3.3% | |||
Coupa Software Inc. Software | 3.2% | |||
DocuSign Inc. Software | 3.2% | |||
Square Inc., A IT Services | 3.0% |
Thank you for your participation in Franklin Disruptive Commerce ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Joyce Lin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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CFA® is a trademark owned by CFA Institute.
FRANKLIN DISRUPTIVE COMMERCE ETF
Performance Summary as of September 30, 2020
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 of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +99.25% | +98.60% | +99.25% | +98.60% | ||||||||||||
Since Inception (2/25/20) | +69.92% | +70.00% | +69.92% | +70.00% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 6 for Performance Summary footnotes.
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FRANKLIN DISRUPTIVE COMMERCE ETF
Total Annual Operating Expenses5
With Fee Waiver | Without Fee Waiver | |||
0.50% | 3.23% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in consumer discretionary related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. Companies operating within consumer discretionary related industries could be affected by, among other things, overall economic conditions, interest rates, disposable income, fluctuating consumer confidence and consumer demand. Many of these companies compete aggressively on price, potentially affecting their long run profitability. Companies within consumer discretionary related industries may have extensive online operations, which could make these companies particularly vulnerable to cyber security risk. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the period 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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
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FRANKLIN DISRUPTIVE COMMERCE ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 × $ 7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different ETFs. 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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During | Ending Account Value 9/30/20 | Expenses Paid During | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,992.50 | $ | 3.75 | $ | 1,022.56 | $ | 2.54 | 0.50 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 7 |
This semiannual report for Franklin Genomic Advances ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. The Fund invests at least 80% of its net assets in equity securities of companies that are relevant to the Fund’s investment theme of genomic advancements. These companies are focused on, or stand to benefit from, extending and enhancing the quality of human and animal life through technological or scientific advancements in such areas as genetic engineering, gene therapy, genome analysis and other uses outlined in more detail in the Prospectus.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +56.95% based on market price and +55.05% based on net asset value (NAV). In comparison, the Russell 3000® Index posted a +33.26% total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 10.
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.
Investment Strategy
We use fundamental, bottom-up research analysis to identify companies positioned to capitalize on disruptive innovation or
Portfolio Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Life Sciences Tools & Services | 46.3% | |||
Biotechnology | 27.6% | |||
Health Care Technology | 11.3% | |||
Health Care Equipment & Supplies | 5.7% | |||
Pharmaceuticals | 3.6% | |||
Semiconductors & Semiconductor Equipment | 2.6% | |||
Health Care Providers & Services | 2.0% | |||
Software | 1.0% | |||
Short-Term Investments & Other Net Assets | -0.1% |
are enabling the further development of the genomic advancements theme in the markets in which they operate. We evaluate market segments, products, services and business models positioned to benefit significantly from advancements in genomics relative to broad securities markets, and seek to identify the primary beneficiaries of new trends or developments in genomics. We may invest in companies in any economic sector or of any market capitalization and may invest in companies both inside and outside of the U.S. Although we search for investments across a large number of sectors, we expect to concentrate our investments in health care-related industries.
1. Source: FactSet. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
The index is unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 22.
8 | Semiannual Report | franklintempleton.com |
FRANKLIN GENOMIC ADVANCES ETF
Manager’s Discussion
During the reporting period, the health care sector supported absolute performance. Within the sector, consumer digital health platform provider Livongo Health, biopharmaceutical development technology platform company Wuxi Biologics Cayman, genome-editing technology firm CRISPR Therapeutics and cloud-based life sciences software solutions company Veeva Systems were leading contributors. The information technology sector also helped absolute results. Leading contributors included computer graphics processor manufacturer NVIDIA and revenue management software company Model N.
No sectors detracted from absolute performance. Individual holdings that detracted included rare disease technology platform developer Homology Medicines, biological testing technology company Luminex, telemedicine platform operator GoodRx Holdings, and medical and pharmaceutical technology firm QIAGEN.
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
WuXi Biologics (Cayman) Inc. Life Sciences Tools & Services | 5.6% | |||
Illumina Inc. Life Sciences Tools & Services | 4.4% | |||
Lonza Group AG Life Sciences Tools & Services | 4.3% | |||
Repligen Corp. Life Sciences Tools & Services | 4.2% | |||
Natera Inc. Biotechnology | 4.1% | |||
Veeva Systems Inc. Health Care Technology | 4.1% | |||
CRISPR Therapeutics AG Biotechnology | 3.6% | |||
Catalent Inc. Pharmaceuticals | 3.0% | |||
Thermo Fisher Scientific Inc. Life Sciences Tools & Services | 2.7% | |||
Teladoc Inc. Health Care Technology | 2.7% |
Thank you for your participation in Franklin Genomic Advances ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Joyce Lin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 9 |
FRANKLIN GENOMIC ADVANCES ETF
Performance Summary as of September 30, 2020
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 of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +55.05% | +56.95% | +55.05% | +56.95% | ||||||||||||
Since Inception (2/25/20) | +40.04% | +40.44% | +40.04% | +40.44% |
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.
See page 11 for Performance Summary footnotes.
10 | Semiannual Report | franklintempleton.com |
FRANKLIN GENOMIC ADVANCES ETF
Total Annual Operating Expenses5
With Fee Waiver | Without Fee Waiver | |||
0.50% | 3.14% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in health care related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. Companies operating within health care related industries face intense competition and potentially rapid product obsolescence. These companies are also heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. These companies typically engage in significant amounts of spending on research and development, and there is no guarantee that the products or services produced by these companies will be successful, or that competitors will not develop technology that is substantially similar or superior to such companies’ technology. The field of genomic science could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the period 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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
franklintempleton.com | Semiannual Report | 11 |
FRANKLIN GENOMIC ADVANCES 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 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Ending Account Value 9/30/20 | Expenses Paid During Period 4/1/20–9/30/201,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,550.50 | $ | 3.20 | $ | 1,022.56 | $ | 2.54 | 0.50 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
12 | Semiannual Report | franklintempleton.com |
Franklin Intelligent Machines ETF
This semiannual report for Franklin Intelligent Machines ETF covers the period ended September 30, 2020.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. The Fund invests at least 80% of its net assets in equity securities of companies that are relevant to the Fund’s investment theme of intelligent machines. These companies include those that are focused on, or stand to benefit from, the ongoing technology-driven transformation of products, software, systems and machinery as well as product design, manufacture, logistics, distribution and maintenance, including through developments in artificial intelligence. More details can be found in the Prospectus.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +65.71% based on market price and +64.83% based on net asset value (NAV). In comparison, the Russell 3000® Index posted a +33.26% total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 15.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
We use fundamental, bottom-up research analysis to identify companies positioned to capitalize on disruptive innovation in
Portfolio Composition | ||||
9/30/20 | ||||
% of Total Net Assets | ||||
Software | 20.0% | |||
Health Care Equipment & Supplies | 19.6% | |||
Semiconductors & Semiconductor Equipment | 16.9% | |||
Automobiles | 10.5% | |||
Electronic Equipment, Instruments & Components | 7.8% | |||
Technology Hardware, Storage & Peripherals | 5.1% | |||
Health Care Technology | 4.5% | |||
Aerospace & Defense | 4.0% | |||
Machinery | 3.6% | |||
Electrical Equipment | 2.7% | |||
Other | 3.3% | |||
Short-Term Investments & Other Net Assets | 2.0% |
or are enabling the further development of the intelligent machines theme in the markets in which they operate. We evaluate market segments, products, services and business models positioned to benefit significantly from disruptive innovations in intelligent products, design, manufacturing and/or predictive maintenance relative to broad securities markets, and seek to identify the primary beneficiaries of new trends or developments in physical applications of these innovations. We may invest in companies in any economic sector or of any market capitalization and may invest in companies both inside and outside of the U.S. Although we search for investments across a large number of sectors, we expect to have significant investments in particular sectors, including technology.
1. Source: FactSet. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
The index is unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
See www.franklintempletondatasources.com for additional data provider information
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 25.
franklintempleton.com | Semiannual Report | 13 |
FRANKLIN INTELLIGENT MACHINES ETF
Manager’s Discussion
During the reporting period, the sectors that contributed the most to the Fund’s absolute performance included information technology (IT), health care and consumer discretionary. In IT, leading contributors included consumer technology firm Apple, graphics processing unit designer NVIDIA and software designer Autodesk. From the health care sector, consumer digital health platform provider Livongo Health and digital health care company iRhythm Technologies supported results. Electric car maker Tesla lifted performance in the consumer discretionary sector.
No sectors detracted from absolute performance. Individual detractors included aerospace and defense systems provider Raytheon Technologies, telecommunications equipment firm Motorola Solutions, composite materials maker Hexcel, 3D printing and production systems company Stratasys and express delivery and logistical services firm ZTO Express Cayman.
Top 10 Holdings | ||||
9/30/20 | ||||
Company Sector/Industry | % of Total Net Assets | |||
Tesla Inc. Automobiles | 10.5% | |||
Apple Inc. Technology Hardware, Storage & Peripherals | 4.8% | |||
Intuitive Surgical Inc. Health Care Equipment & Supplies | 4.6% | |||
Autodesk Inc. Software | 3.6% | |||
NVIDIA Corp. Semiconductors & Semiconductor Equipment | 3.5% | |||
iRhythm Technologies Inc. Health Care Equipment & Supplies | 3.4% | |||
Livongo Health Inc. Health Care Technology | 3.3% | |||
ANSYS Inc. Software | 3.3% | |||
Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR Semiconductors & Semiconductor Equipment | 3.0% | |||
US DOLLAR | 2.9% |
Thank you for your participation in Franklin Intelligent Machines ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Joyce Lin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2020, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
14 | Semiannual Report | franklintempleton.com |
FRANKLIN INTELLIGENT MACHINES ETF
Performance Summary as of September 30, 2020
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 of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/201
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
6-Month | +64.83% | +65.71% | +64.83% | +65.71% | ||||||||||||
Since Inception (2/25/20) | +36.28% | +36.68% | +36.28% | +36.68% |
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 16 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN INTELLIGENT MACHINES ETF
Total Annual Operating Expenses5
With Fee Waiver | Without Fee Waiver | |||
0.50% | 3.30% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. The Fund has significant exposure to the technology sector. Companies operating within the technology sector may be affected by worldwide technological developments, the success of their products and services (which may be outdated quickly), anticipated products or services that are delayed or cancelled, and investor perception of the company and/or its products or services. In addition, companies operating within the technology sector may develop and/or utilize artificial intelligence. Artificial intelligence technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks.
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 Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the period 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. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
16 | Semiannual Report | franklintempleton.com |
FRANKLIN INTELLIGENT MACHINES ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $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 4/1/20 | Ending Account Value 9/30/20 | Expenses Paid During | Ending Account Value 9/30/20 | Expenses Paid During | Net Annualized Expense Ratio2 | |||||||||||||||||
$1,000.00 | $ | 1,648.30 | $ | 3.32 | $ | 1,022.56 | $ | 2.54 | 0.50 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN TEMPLETON ETF TRUST
Franklin Disruptive Commerce ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | |||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $ | 21.32 | $ | 25.00 | ||||
|
| |||||||
Income from investment operationsb: | ||||||||
Net investment lossc | (0.08 | ) | (0.01 | ) | ||||
Net realized and unrealized gains (losses) | 21.24 | (3.67 | ) | |||||
|
| |||||||
Total from investment operations | 21.16 | (3.68 | ) | |||||
|
| |||||||
Net asset value, end of period | $ | 42.48 | $ | 21.32 | ||||
|
| |||||||
Total returnd | 99.25% | (14.72)% | ||||||
Ratios to average net assetse | ||||||||
Expenses before waiver and payments by affiliates | 1.23% | 12.59% | ||||||
Expenses net of waiver and payments by affiliates | 0.50% | 0.50% | ||||||
Net investment loss | (0.43)% | (0.32)% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $23,363 | $2,132 | ||||||
Portfolio turnover ratef | 8.07% | g | 0.94% | g |
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 8.07% | 0.94% |
18 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Disruptive Commerce ETF
Country | Shares | Value | ||||||||||||
Common Stocks 99.2% | ||||||||||||||
Aerospace & Defense 0.7% | ||||||||||||||
a | Kratos Defence & Security Solutions Inc. | United States | 8,481 | $ | 163,514 | |||||||||
|
| |||||||||||||
Air Freight & Logistics 0.6% | ||||||||||||||
ZTO Express Cayman Inc., ADR | China | 4,753 | 142,210 | |||||||||||
|
| |||||||||||||
Capital Markets 0.3% | ||||||||||||||
a | XP Inc., A | Brazil | 1,892 | 78,878 | ||||||||||
|
| |||||||||||||
Diversified Consumer Services 2.3% | ||||||||||||||
a | Chegg Inc. | United States | 5,248 | 374,917 | ||||||||||
a | New Oriental Education & Technology Group Inc., ADR | China | 1,034 | 154,583 | ||||||||||
|
| |||||||||||||
529,500 | ||||||||||||||
|
| |||||||||||||
Entertainment 11.3% | ||||||||||||||
Activision Blizzard Inc. | United States | 2,310 | 186,995 | |||||||||||
a | Electronic Arts Inc. | United States | 1,089 | 142,017 | ||||||||||
a | Netflix Inc. | United States | 363 | 181,511 | ||||||||||
Nintendo Co. Ltd. | Japan | 224 | 126,635 | |||||||||||
a | Sea Ltd., ADR | Taiwan | 10,605 | 1,633,594 | ||||||||||
a | Spotify Technology SA | United States | 869 | 210,793 | ||||||||||
a | Zynga Inc. | United States | 16,677 | 152,094 | ||||||||||
|
| |||||||||||||
2,633,639 | ||||||||||||||
|
| |||||||||||||
Equity Real Estate Investment Trusts (REITs) 0.6% | ||||||||||||||
Prologis Inc. | United States | 1,474 | 148,314 | |||||||||||
|
| |||||||||||||
Health Care Technology 2.2% | ||||||||||||||
a | Livongo Health Inc. | United States | 1,837 | 257,272 | ||||||||||
a | Teladoc Inc. | United States | 1,147 | 251,468 | ||||||||||
|
| |||||||||||||
508,740 | ||||||||||||||
|
| |||||||||||||
Interactive Media & Services 3.9% | ||||||||||||||
a | Facebook Inc., A | United States | 760 | 199,044 | ||||||||||
a | Match Group Inc. | United States | 1,882 | 208,243 | ||||||||||
Tencent Holdings Ltd. | China | 7,761 | 512,226 | |||||||||||
|
| |||||||||||||
919,513 | ||||||||||||||
|
| |||||||||||||
Internet & Direct Marketing Retail 31.5% | ||||||||||||||
a | Alibaba Group Holding Ltd., ADR | China | 3,939 | 1,157,987 | ||||||||||
a | Amazon.com Inc. | United States | 419 | 1,319,318 | ||||||||||
a | Chewy Inc., A | United States | 6,348 | 348,061 | ||||||||||
a | Delivery Hero SE | Germany | 1,563 | 179,840 | ||||||||||
a | Etsy Inc. | United States | 2,610 | 317,454 | ||||||||||
a | Fiverr International Ltd. | Israel | 8,603 | 1,195,645 | ||||||||||
a | JD.com Inc., ADR | China | 6,876 | 533,646 | ||||||||||
a,b | Meituan Dianping, B, Reg S | China | 10,008 | 312,250 | ||||||||||
a | MercadoLibre Inc. | Argentina | 803 | 869,231 | ||||||||||
a | Ocado Group PLC | United Kingdom | 6,876 | 243,922 | ||||||||||
a | Pinduoduo Inc., ADR | China | 3,972 | 294,524 | ||||||||||
a | Stamps.com Inc. | United States | 793 | 191,073 | ||||||||||
a | Zalando SE | Germany | 2,783 | 260,753 | ||||||||||
Zozo Inc. | Japan | 4,620 | 128,185 | |||||||||||
|
| |||||||||||||
7,351,889 | ||||||||||||||
|
| |||||||||||||
IT Services 24.7% | ||||||||||||||
a | Adyen NV, ADR | Netherlands | 15,181 | 562,456 | ||||||||||
a | Afterpay Ltd. | Australia | 3,708 | 212,590 | ||||||||||
Jack Henry & Associates Inc. | United States | 737 | 119,829 | |||||||||||
Mastercard Inc., A | United States | 1,123 | 379,765 | |||||||||||
a | Okta Inc., A | United States | 1,859 | 397,547 |
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Disruptive Commerce ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
IT Services (continued) | ||||||||||||||
a | PagSeguro Digital Ltd., A | Brazil | 1,981 | $ | 74,703 | |||||||||
a | PayPal Holdings Inc. | United States | 3,927 | 773,737 | ||||||||||
a | Shopify Inc., A | Canada | 1,309 | 1,339,068 | ||||||||||
a | Square Inc., A | United States | 4,268 | 693,763 | ||||||||||
a | Twilio Inc., A | United States | 1,276 | 315,287 | ||||||||||
Visa Inc., A | United States | 1,705 | 340,949 | |||||||||||
a | Wix.com Ltd. | Israel | 2,178 | 555,063 | ||||||||||
|
| |||||||||||||
5,764,757 | ||||||||||||||
|
| |||||||||||||
Leisure Equipment & Products 1.8% | ||||||||||||||
a | Peloton Interactive Inc., A | United States | 4,159 | 412,739 | ||||||||||
|
| |||||||||||||
Professional Services 0.7% | ||||||||||||||
a | CoStar Group Inc. | United States | 210 | 178,187 | ||||||||||
|
| |||||||||||||
Real Estate Management & Development 0.7% | ||||||||||||||
a | Redfin Corp. | United States | 3,223 | 160,924 | ||||||||||
|
| |||||||||||||
Road & Rail 1.4% | ||||||||||||||
a | Lyft Inc., A | United States | 2,365 | 65,156 | ||||||||||
a | Uber Technologies Inc. | United States | 7,241 | 264,151 | ||||||||||
|
| |||||||||||||
329,307 | ||||||||||||||
|
| |||||||||||||
Software 14.2% | ||||||||||||||
a | Avalara Inc. | United States | 4,962 | 631,861 | ||||||||||
a | Bill.com Holdings, Inc. | United States | 2,387 | 239,440 | ||||||||||
a | Coupa Software Inc. | United States | 2,718 | 745,384 | ||||||||||
a | Crowdstrike Holdings Inc., A | United States | 2,057 | 282,467 | ||||||||||
a | DocuSign Inc. | United States | 3,422 | 736,551 | ||||||||||
a | Manhattan Associates Inc. | United States | 2,024 | 193,272 | ||||||||||
a | Q2 Holdings Inc. | United States | 1,826 | 166,641 | ||||||||||
a | salesforce.com Inc. | United States | 892 | 224,178 | ||||||||||
a | Zendesk Inc. | United States | 1,012 | 104,155 | ||||||||||
|
| |||||||||||||
3,323,949 | ||||||||||||||
|
| |||||||||||||
Specialty Retail 1.7% | ||||||||||||||
a | Carvana Co. | United States | 1,760 | 392,586 | ||||||||||
|
| |||||||||||||
Textiles, Apparel & Luxury Goods 0.6% | ||||||||||||||
NIKE Inc., B | United States | 1,050 | 131,817 | |||||||||||
|
| |||||||||||||
Total Investments (Cost $19,712,195) 99.2% | 23,170,463 | |||||||||||||
Other Assets, less Liabilities 0.8% | 192,299 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 23,362,762 | ||||||||||||
|
|
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2020, the value of this security was $312,250, representing 1.3% of net assets.
20 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Genomic Advancements ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | |||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $ | 22.58 | $ | 25.00 | ||||
|
| |||||||
Income from investment operationsb: | ||||||||
Net investment lossc | (0.06 | ) | (0.01 | ) | ||||
Net realized and unrealized gains (losses) | 12.49 | (2.41 | ) | |||||
|
| |||||||
Total from investment operations | 12.43 | (2.42 | ) | |||||
|
| |||||||
Net asset value, end of period | $ | 35.01 | $ | 22.58 | ||||
|
| |||||||
Total returnd | 55.05% | (9.68)% | ||||||
Ratios to average net assetse | ||||||||
Expenses before waiver and payments by affiliates | 2.80% | 12.22% | ||||||
Expenses net of waiver and payments by affiliates | 0.50% | 0.50% | ||||||
Net investment loss | (0.38)% | (0.37)% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $3,501 | $2,258 | ||||||
Portfolio turnover ratef | 23.88% | g | 2.20% | g |
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 23.88% | 2.20% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 21 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Genomic Advancements ETF
Country | Shares | Value | ||||||||||||
Common Stocks 100.1% | ||||||||||||||
Biotechnology 27.6% | ||||||||||||||
a | Alnylam Pharmaceuticals Inc. | United States | 249 | $ | 36,254 | |||||||||
a | Amicus Therapeutics Inc. | United States | 2,527 | 35,681 | ||||||||||
a | BioNTech SE, ADR | Germany | 634 | 43,892 | ||||||||||
a | Cellectis SA, ADR | France | 1,007 | 18,630 | ||||||||||
a | CRISPR Therapeutics AG | Switzerland | 1,511 | 126,380 | ||||||||||
a | Editas Medicine Inc. | United States | 2,221 | 62,321 | ||||||||||
a | Exact Sciences Corp. | United States | 693 | 70,651 | ||||||||||
a | Fate Therapeutics Inc. | United States | 859 | 34,334 | ||||||||||
a | Intellia Therapeutics Inc. | United States | 4,049 | 80,494 | ||||||||||
a | Invitae Corp. | United States | 793 | 34,377 | ||||||||||
a | Ionis Pharmaceuticals Inc. | United States | 470 | 22,302 | ||||||||||
a | Iovance Biotherapeutics Inc. | United States | 1,446 | 47,602 | ||||||||||
a | Natera Inc. | United States | 1,988 | 143,613 | ||||||||||
a | Rocket Pharmaceuticals Inc. | United States | 803 | 18,357 | ||||||||||
a | Sarepta Therapeutics Inc. | United States | 109 | 15,307 | ||||||||||
a | Ultragenyx Pharmaceutical Inc. | United States | 223 | 18,328 | ||||||||||
a | uniQure NV | Netherlands | 478 | 17,605 | ||||||||||
a | Veracyte Inc. | United States | 2,140 | 69,529 | ||||||||||
a | Vertex Pharmaceuticals Inc. | United States | 260 | 70,751 | ||||||||||
|
| |||||||||||||
966,408 | ||||||||||||||
|
| |||||||||||||
Health Care Equipment & Supplies 5.7% | ||||||||||||||
Biomerieux | France | 443 | 69,507 | |||||||||||
a | CryoPort Inc. | United States | 1,475 | 69,915 | ||||||||||
a | Quidel Corp. | United States | 280 | 61,426 | ||||||||||
|
| |||||||||||||
200,848 | ||||||||||||||
|
| |||||||||||||
Health Care Providers & Services 2.0% | ||||||||||||||
a | Guardant Health Inc. | United States | 610 | 68,186 | ||||||||||
|
| |||||||||||||
Health Care Technology 11.3% | ||||||||||||||
a | American Well Corp., A | United States | 1,230 | 36,457 | ||||||||||
a | GoodRx Holdings Inc., A | United States | 613 | 34,083 | ||||||||||
a | Livongo Health Inc. | United States | 633 | 88,652 | ||||||||||
a | Teladoc Inc. | United States | 426 | 93,396 | ||||||||||
a | Veeva Systems Inc. | United States | 506 | 142,282 | ||||||||||
|
| |||||||||||||
394,870 | ||||||||||||||
|
| |||||||||||||
Life Sciences Tools & Services 46.3% | ||||||||||||||
a | 10X Genomics Inc., A | United States | 558 | 69,571 | ||||||||||
Agilent Technologies Inc. | United States | 699 | 70,557 | |||||||||||
a | Berkeley Lights Inc. | United States | 992 | 75,749 | ||||||||||
Bio-Techne Corp. | United States | 104 | 25,764 | |||||||||||
Bruker Corp. | United States | 1,077 | 42,811 | |||||||||||
a | Charles River Laboratories International Inc. | United States | 357 | 80,843 | ||||||||||
a | Compugen Ltd. | Israel | 3,208 | 53,209 | ||||||||||
a | Evotec SE | Germany | 2,989 | 79,109 | ||||||||||
a | ICON PLC | Ireland | 311 | 59,429 | ||||||||||
a | Illumina Inc. | United States | 501 | 154,849 | ||||||||||
a | IQVIA Holdings Inc. | United States | 196 | 30,895 | ||||||||||
Lonza Group AG | Switzerland | 245 | 151,627 | |||||||||||
a | Medpace Holdings Inc. | United States | 272 | 30,396 | ||||||||||
a | NanoString Technologies Inc. | United States | 759 | 33,927 | ||||||||||
a | NeoGenomics Inc. | United States | 1,770 | 65,295 | ||||||||||
a | Pacific Biosciences of California Inc. | United States | 4,041 | 39,885 | ||||||||||
PerkinElmer Inc. | United States | 309 | 38,782 | |||||||||||
a | PRA Health Sciences Inc. | United States | 456 | 46,257 | ||||||||||
a | QIAGEN NV | Netherlands | 680 | 35,537 |
22 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Life Sciences Tools & Services (continued) | ||||||||||||||
a | Repligen Corp. | United States | 994 | $ | 146,655 | |||||||||
Thermo Fisher Scientific Inc. | United States | 218 | 96,251 | |||||||||||
a | WuXi Biologics (Cayman) Inc. | China | 8,000 | 194,684 | ||||||||||
|
| |||||||||||||
1,622,082 | ||||||||||||||
|
| |||||||||||||
Pharmaceuticals 3.6% | ||||||||||||||
Bayer AG | Germany | 304 | 19,004 | |||||||||||
a | Catalent Inc. | United States | 1,242 | 106,390 | ||||||||||
|
| |||||||||||||
125,394 | ||||||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||||||||
NVIDIA Corp. | United States | 166 | 89,843 | |||||||||||
|
| |||||||||||||
Software 1.0% | ||||||||||||||
a | Model N Inc. | United States | 1,016 | 35,844 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $2,510,337) 100.1% | 3,503,475 | |||||||||||||
Other Assets, less Liabilities (0.1)% | (2,130 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 3,501,345 | ||||||||||||
|
|
aNon-income producing.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 23 |
Franklin Genomic Advancements ETF (continued)
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Intelligent Machines ETF
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | |||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $ | 20.67 | $ | 25.00 | ||||
|
| |||||||
Income from investment operationsb: | ||||||||
Net investment lossc | (0.01 | ) | — | |||||
Net realized and unrealized gains (losses) | 13.41 | (4.33 | ) | |||||
|
| |||||||
Total from investment operations | 13.40 | (4.33 | ) | |||||
|
| |||||||
Net asset value, end of period | $ | 34.07 | $ | 20.67 | ||||
|
| |||||||
Total returnd | 64.83% | (17.32)% | ||||||
Ratios to average net assetse | ||||||||
Expenses before waiver and payments by affiliates | 2.98% | 12.91% | ||||||
Expenses net of waiver and payments by affiliates | 0.50% | 0.50% | ||||||
Net investment loss | (0.08)% | 0.20% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $3,407 | $2,067 | ||||||
Portfolio turnover ratef | 14.77% | g | —% | g |
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 14.77% | —% |
24 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2020 (unaudited)
Franklin Intelligent Machines ETF
Country | Shares | Value | ||||||||||||
Common Stocks 98.0% | ||||||||||||||
Aerospace & Defense 4.0% | ||||||||||||||
a | Aerovironment Inc. | United States | 382 | $ | 22,924 | |||||||||
a | Axon Enterprise Inc. | United States | 934 | 84,714 | ||||||||||
a | Kratos Defence & Security Solutions Inc. | United States | 1,543 | 29,749 | ||||||||||
|
| |||||||||||||
137,387 | ||||||||||||||
|
| |||||||||||||
Air Freight & Logistics 1.4% | ||||||||||||||
a | XPO Logistics Inc. | United States | 300 | 25,398 | ||||||||||
ZTO Express Cayman Inc., ADR | China | 743 | 22,231 | |||||||||||
|
| |||||||||||||
47,629 | ||||||||||||||
|
| |||||||||||||
Auto Components 0.5% | ||||||||||||||
Aptiv PLC | United States | 194 | 17,786 | |||||||||||
|
| |||||||||||||
Automobiles 10.5% | ||||||||||||||
a | Tesla Inc. | United States | 835 | 358,223 | ||||||||||
|
| |||||||||||||
Building Products 0.5% | ||||||||||||||
Johnson Controls International PLC | United States | 430 | 17,565 | |||||||||||
|
| |||||||||||||
Electrical Equipment 2.7% | ||||||||||||||
Eaton Corp., PLC | United States | 164 | 16,733 | |||||||||||
Rockwell Automation Inc. | United States | 140 | 30,895 | |||||||||||
Schneider Electric SE | France | 234 | 29,100 | |||||||||||
a | Sensata Technologies Holding PLC | United States | 370 | 15,962 | ||||||||||
|
| |||||||||||||
92,690 | ||||||||||||||
|
| |||||||||||||
Electronic Equipment, Instruments & Components 7.8% | ||||||||||||||
Amphenol Corp., A | United States | 261 | 28,259 | |||||||||||
Cognex Corp. | United States | 267 | 17,382 | |||||||||||
Keyence Corp. | Japan | 142 | 65,907 | |||||||||||
a | Keysight Technologies Inc. | United States | 512 | 50,575 | ||||||||||
TE Connectivity Ltd. | United States | 289 | 28,247 | |||||||||||
a | Zebra Technologies Corp., A | United States | 292 | 73,718 | ||||||||||
|
| |||||||||||||
264,088 | ||||||||||||||
|
| |||||||||||||
Health Care Equipment & Supplies 19.6% | ||||||||||||||
a | Align Technology Inc. | United States | 61 | 19,969 | ||||||||||
a | DexCom Inc. | United States | 179 | 73,789 | ||||||||||
a | Insulet Corp. | United States | 277 | 65,536 | ||||||||||
a | Intuitive Surgical Inc. | United States | 223 | 158,228 | ||||||||||
a | iRhythm Technologies Inc. | United States | 491 | 116,912 | ||||||||||
a | Masimo Corp. | United States | 237 | 55,946 | ||||||||||
a | Nevro Corp. | United States | 201 | 27,999 | ||||||||||
a | Novocure Ltd. | United States | 655 | 72,908 | ||||||||||
ResMed Inc. | United States | 287 | 49,200 | |||||||||||
Stryker Corp. | United States | 126 | 26,255 | |||||||||||
|
| |||||||||||||
666,742 | ||||||||||||||
|
| |||||||||||||
Health Care Technology 4.5% | ||||||||||||||
a | Inspire Medical Systems Inc. | United States | 311 | 40,134 | ||||||||||
a | Livongo Health Inc. | United States | 814 | 114,001 | ||||||||||
|
| |||||||||||||
154,135 | ||||||||||||||
|
| |||||||||||||
Industrial Conglomerates 0.9% | ||||||||||||||
Roper Technologies Inc. | United States | 73 | 28,843 | |||||||||||
|
| |||||||||||||
Machinery 3.6% | ||||||||||||||
Fortive Corp. | United States | 176 | 13,413 | |||||||||||
Harmonic Drive Systems Inc. | Japan | 300 | 19,160 | |||||||||||
Otis Worldwide Corp. | United States | 45 | 2,809 |
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Intelligent Machines ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Machinery (continued) | ||||||||||||||
a | Proto Labs Inc. | United States | 558 | $ | 72,261 | |||||||||
YASKAWA Electric Corp. | Japan | 400 | 15,522 | |||||||||||
|
| |||||||||||||
123,165 | ||||||||||||||
|
| |||||||||||||
Semiconductors & Semiconductor Equipment 16.9% | ||||||||||||||
Analog Devices Inc. | United States | 217 | 25,333 | |||||||||||
Applied Materials Inc. | United States | 417 | 24,791 | |||||||||||
ASML Holding N.V. | Netherlands | 87 | 32,126 | |||||||||||
Brooks Automation Inc. | United States | 714 | 33,030 | |||||||||||
Entegris Inc. | United States | 471 | 35,014 | |||||||||||
Infineon Technologies AG | Germany | 1,317 | 37,243 | |||||||||||
KLA Corp. | United States | 169 | 32,742 | |||||||||||
Lam Research Corp. | United States | 84 | 27,867 | |||||||||||
MKS Instruments Inc. | United States | 121 | 13,217 | |||||||||||
NVIDIA Corp. | United States | 220 | 119,068 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR | Taiwan | 1,248 | 101,175 | |||||||||||
Teradyne Inc. | United States | 813 | 64,601 | |||||||||||
Texas Instruments Inc. | United States | 210 | 29,986 | |||||||||||
|
| |||||||||||||
576,193 | ||||||||||||||
|
| |||||||||||||
Software 20.0% | ||||||||||||||
a | Altair Engineering Inc. | United States | 1,435 | 60,241 | ||||||||||
a | ANSYS Inc. | United States | 340 | 111,258 | ||||||||||
a | Aspen Technology Inc. | United States | 118 | 14,938 | ||||||||||
a | Atlassian Corp. PLC | United States | 155 | 28,177 | ||||||||||
a | Autodesk Inc. | United States | 524 | 121,049 | ||||||||||
a | Cadence Design Systems Inc. | United States | 654 | 69,736 | ||||||||||
Dassault Systemes | France | 317 | 59,384 | |||||||||||
a | PTC Inc. | United States | 533 | 44,090 | ||||||||||
a | Slack Technologies Inc. | United States | 844 | 22,670 | ||||||||||
a | Synopsys Inc. | United States | 382 | 81,740 | ||||||||||
a | The Descartes Systems Group Inc. | Canada | 1,194 | 67,801 | ||||||||||
|
| |||||||||||||
681,084 | ||||||||||||||
|
| |||||||||||||
Technology Hardware, Storage & Peripherals 5.1% | ||||||||||||||
Apple Inc. | United States | 1,416 | 163,987 | |||||||||||
a | Stratasys Ltd. | United States | 716 | 8,928 | ||||||||||
|
| |||||||||||||
172,915 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $2,380,564) 98.0% | 3,338,445 | |||||||||||||
Other Assets, less Liabilities 2.0% | 68,619 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 3,407,064 | ||||||||||||
|
|
aNon-income producing.
26 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2020 (unaudited)
Franklin Disruptive Commerce ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost – Unaffiliated issuers | $ | 19,712,195 | $ | 2,510,337 | $ | 2,380,564 | ||||||
|
| |||||||||||
Value – Unaffiliated issuers | $ | 23,170,463 | $ | 3,503,475 | $ | 3,338,445 | ||||||
Cash | 228,692 | 17,169 | 97,285 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | — | 235,627 | — | |||||||||
Dividends | 802 | 48 | 967 | |||||||||
Affiliates | — | 3,915 | 3,945 | |||||||||
|
| |||||||||||
Total assets | 23,399,957 | 3,760,234 | 3,440,642 | |||||||||
|
| |||||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Management fees | 3,712 | — | — | |||||||||
Investment securities purchased | — | 225,253 | — | |||||||||
Transfer agent fees | 9,134 | 9,134 | 9,134 | |||||||||
Trustees’ fees and expenses | 661 | 682 | 687 | |||||||||
Custodian fees | 777 | 776 | 777 | |||||||||
Professional fees | 13,490 | 13,490 | 13,491 | |||||||||
Reports to shareholders | 1,317 | 1,508 | 1,443 | |||||||||
Registration and filing fees | 940 | 882 | 882 | |||||||||
Accrued expenses and other liabilities | 7,164 | 7,164 | 7,164 | |||||||||
|
| |||||||||||
Total liabilities | 37,195 | 258,889 | 33,578 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 23,362,762 | $ | 3,501,345 | $ | 3,407,064 | ||||||
|
| |||||||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 20,026,235 | $ | 2,499,274 | $ | 2,500,000 | ||||||
Total distributable earnings (loss) | 3,336,527 | 1,002,071 | 907,064 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 23,362,762 | $ | 3,501,345 | $ | 3,407,064 | ||||||
|
| |||||||||||
Shares outstanding | 550,000 | 100,000 | 100,000 | |||||||||
|
| |||||||||||
Net asset value per share | $ | 42.48 | $ | 35.01 | $ | 34.07 | ||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 27 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2020 (unaudited)
Franklin Disruptive Commerce ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | ||||||||||
Investment income: | ||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||
Unaffiliated issuers | $ | 3,642 | $ | 1,855 | $ | 5,943 | ||||||
|
| |||||||||||
Total investment income | 3,642 | 1,855 | 5,943 | |||||||||
|
| |||||||||||
Expenses: | ||||||||||||
Management fees (Note 3a) | 24,350 | 7,697 | 7,121 | |||||||||
Transfer agent fees | 7,821 | 7,821 | 7,821 | |||||||||
Custodian fees | 664 | 664 | 664 | |||||||||
Reports to shareholders | 3,009 | 3,009 | 3,009 | |||||||||
Registration and filing fees | 4,688 | 4,630 | 4,630 | |||||||||
Professional fees | 12,683 | 12,683 | 12,683 | |||||||||
Trustee fees and expenses (Note 3a) | 562 | 562 | 562 | |||||||||
Other | 6,018 | 6,018 | 6,018 | |||||||||
|
| |||||||||||
Total expenses | 59,795 | 43,084 | 42,508 | |||||||||
Expenses waived/paid by affiliates (Note 3c) | (35,445 | ) | (35,387 | ) | (35,387 | ) | ||||||
|
| |||||||||||
Net expenses | 24,350 | 7,697 | 7,121 | |||||||||
|
| |||||||||||
Net investment loss | (20,708 | ) | (5,842 | ) | (1,178 | ) | ||||||
|
| |||||||||||
Realized and unrealized gains (losses): | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | (96,749 | ) | 16,384 | (49,945 | ) | |||||||
Foreign currency transactions | (53 | ) | (25 | ) | (125 | ) | ||||||
|
| |||||||||||
Net realized gain (loss) | (96,802 | ) | 16,359 | (50,070 | ) | |||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 3,821,340 | 1,232,640 | 1,391,487 | |||||||||
Translation of other assets and liabilities denominated in foreign currencies | 1 | — | (3 | ) | ||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) | 3,821,341 | 1,232,640 | 1,391,484 | |||||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 3,724,539 | 1,248,999 | 1,341,414 | |||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 3,703,831 | $ | 1,243,157 | $ | 1,340,236 | ||||||
|
|
aForeign taxes withheld on dividends | $ | 74 | $ | 393 | $ | 494 | ||||||
|
|
28 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Disruptive Commerce ETF | Franklin Genomic Advancements ETF | |||||||||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment loss | $ | (20,708 | ) | $ | (672 | ) | $ | (5,842 | ) | $ | (798 | ) | ||||
Net realized gain (loss) | (96,802 | ) | (4,283 | ) | 16,359 | (1,512 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 3,821,341 | (363,072 | ) | 1,232,640 | (239,502 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations (Note 1e) | 3,703,831 | (368,027 | ) | 1,243,157 | (241,812 | ) | ||||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 17,526,958 | 2,500,000 | — | 2,500,000 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 21,230,789 | 2,131,973 | 1,243,157 | 2,258,188 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 2,131,973 | — | 2,258,188 | — | ||||||||||||
|
| |||||||||||||||
End of period | $ | 23,362,762 | $ | 2,131,973 | $ | 3,501,345 | $ | 2,258,188 | ||||||||
|
|
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 29 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Intelligent Machines ETF | ||||||||
Six Months Ended September 30, 2020 (unaudited) | Year Ended March 31, 2020a | |||||||
Increase (decrease) in net assets: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | (1,178 | ) | $ | 413 | |||
Net realized gain (loss) | (50,070 | ) | 19 | |||||
Net change in unrealized appreciation (depreciation) | 1,391,484 | (433,604 | ) | |||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations (Note 1e) | 1,340,236 | (433,172 | ) | |||||
|
| |||||||
Capital share transactions: (Note 2) | — | 2,500,000 | ||||||
|
| |||||||
Net increase (decrease) in net assets | 1,340,236 | 2,066,828 | ||||||
Net assets: | ||||||||
Beginning of period | 2,066,828 | — | ||||||
|
| |||||||
End of period | $ | 3,407,064 | $ | 2,066,828 | ||||
|
|
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
30 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-four separate funds, three of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and are actively managed, thus they are not designed to track an index.
The Funds commenced operations on February 25, 2020.
The following summarizes the Funds’ significant accounting policies
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Income and Deferred Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are
recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2020, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
d. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense. These expenses are paid by the Funds or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
e. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the
32 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
e. Accounting Estimates (continued)
amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
f. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities
arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At September 30, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Disruptive Commerce ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020a | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 450,000 | $ | 17,526,958 | 100,001 | $ | 2,500,025 | ||||||||||||||
Shares redeemed | — | — | (1 | ) | (25 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 450,000 | $ | 17,526,958 | 100,000 | $ | 2,500,000 | ||||||||||||||
|
| |||||||||||||||||||
Franklin Genomic Advancements ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020a | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 100,001 | $ | 2,500,025 | ||||||||||||||
Shares redeemed | — | — | (1 | ) | (25 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | 100,000 | $ | 2,500,000 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 33 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin Intelligent Machines ETF | ||||||||||||||||||||
Six Months Ended September 30, 2020 | Year Ended March 31, 2020a | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 100,001 | $ | 2,500,025 | ||||||||||||||
Shares redeemed | — | — | (1 | ) | (25 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | 100,000 | $ | 2,500,000 | ||||||||||||||
|
|
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Advisory Services, LLC (FASL) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
a. Management Fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fee and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other nonroutine or extraordinary expenses. The fees are based on the average daily net assets of each of the Funds as follows:
Annualized Fee Rate | ||
Franklin Disruptive Commerce ETF | 0.50% | |
Franklin Genomic Advancements ETF | 0.50% | |
Franklin Intelligent Machines ETF | 0.50% |
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Waiver and Expense Reimbursements
The Adviser has contractually agreed to waive or assume certain expenses so that total annual Fund operating expenses (including acquired fund fees and expenses, but excluding certain non-routine expenses) for the Fund do not exceed 0.50% until July 31, 2021. Contractual fee waiver and/or expense reimbursement agreements may not be changed or terminated during the time period set forth above.
34 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
d. Investments in Affiliated Management Investment Companies
Certain or all Funds invest in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate.
e. Other Affiliated Transactions
At September 30, 2020, the shares of Franklin Disruptive Commerce ETF, Franklin Genomic Advancements ETF and Franklin Intelligent Machine ETF were owned by the following entities:
Funds | Shares | Percentage of Outstanding Sharesa | ||||||
Franklin Disruptive Commerce ETF | ||||||||
Franklin Resources Inc. | 0.00 | — | ||||||
|
| |||||||
Franklin Genomic Advancements ETF | ||||||||
Franklin Resources Inc. | 10,000.00 | 10.0% | ||||||
|
| |||||||
Franklin Intelligent Machines ETF | ||||||||
Franklin Resources Inc. | 45,000.00 | 45.0% | ||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2020, the capital loss carryforwards were as follows:
Franklin Disruptive Commerce ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | ||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||
Short term | $ | 4,232 | $ | 1,584 | $ | — | ||||||
|
| |||||||||||
Total capital loss carryforwards | $ | 4,232 | $ | 1,584 | $ | — | ||||||
|
|
At September 30, 2020, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
Franklin Disruptive Commerce ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | ||||||||||
Cost of investments | $ | 19,712,195 | $ | 2,510,337 | $ | 2,380,564 | ||||||
|
| |||||||||||
Unrealized appreciation | $ | 3,549,015 | $ | 1,027,988 | $ | 966,918 | ||||||
Unrealized depreciation | (90,747 | ) | (34,850 | ) | (9,037 | ) | ||||||
|
| |||||||||||
Net unrealized appreciation (depreciation) | $ | 3,458,268 | $ | 993,138 | $ | 957,881 | ||||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions, passive foreign investment company shares and wash sales.
franklintempleton.com | Semiannual Report | 35 |
3. Transactions with Affiliates (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2020, were as follows:
Franklin Disruptive Commerce ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | ||||||||||
Purchases | $ | 18,152,254 | $ | 742,874 | $ | 418,808 | ||||||
Sales | $ | 819,099 | $ | 725,657 | $ | 483,060 |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2020, were as follows:
Franklin Disruptive Commerce ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | ||||||||||
Cost of Securities Received | $ | 17,440,148 | $ | — | $ | — | ||||||
Value of Securities Delivereda | $ | — | $ | — | $ | — |
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Current political and financial uncertainty surrounding the European Union may increase market volatility and the economic risk of investing in securities in Europe. In addition, certain foreign securities may not be as liquid as U.S. securities.
7. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
8. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
At September 30, 2020, all of the Funds’ investments in financial instruments carried at fair value were valued using Level 1 inputs.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Selected Portfolio | ||
ADR | American Depositary Receipt | |
REIT | Real Estate Investment Trust |
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FRANKLIN TEMPLETON ETF TRUST
Liquidity Risk Management Program – Non-In-Kind ETFs
Franklin Disruptive Commerce ETF
Franklin Genomic Advancements ETF
Franklin Intelligent Machines ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee and Product Management groups.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable
stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2020, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program during the period December 1, 2018 to December 31, 2019. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund. At the same time, the Program Administrator also presented the Fund Board of Trustees an update on liquidity during the first quarter of 2020 in relation to the COVID-19 pandemic.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at libertyshares.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at libertyshares.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report Franklin Templeton ETF Trust | ||||||
Investment Manager | Distributor | Investor Services | ||||
Franklin Advisors, Inc. | Franklin Templeton Distributors, Inc. (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
© 2020 Franklin Templeton Investments. All rights reserved. | ETF7 S 11/20 |
Item 2. | Code of Ethics. |
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
Item 3. | Audit Committee Financial Expert. |
(a) (1) The Registrant has an audit committee financial expert serving on its audit committee.
(2) The audit committee financial expert is Rohit Baghat and he is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. | Principal Accountant Fees and Services. N/A |
Item 5. | Audit Committee of Listed Registrants. N/A |
Item 6. | Schedule of Investments. N/A |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A |
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. N/A |
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A |
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.
Item 11. | Controls and Procedures. |
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A |
Item 13. | Exhibits. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FRANKLIN TEMPLETON ETF TRUST | ||
By | /s/ Matthew T. Hinkle | |
Matthew T. Hinkle | ||
Chief Executive Officer – Finance and Administration | ||
Date | November 25, 2020 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By | /s/ Matthew T. Hinkle | |
Matthew T. Hinkle | ||
Chief Executive Officer – Finance and Administration | ||
Date | November 25, 2020 | |
By | /s/ Vivek Pai | |
Vivek Pai | ||
Chief Financial Officer and Chief Accounting Officer | ||
Date | November 25, 2020 |