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Franklin Templeton ETF Trust – ‘N-CSRS’ for 9/30/17

On:  Friday, 12/1/17, at 5:14pm ET   ·   Effective:  12/1/17   ·   For:  9/30/17   ·   Accession #:  1193125-17-359111   ·   File #:  811-23124

Previous ‘N-CSRS’:  ‘N-CSRS’ on 12/2/16 for 9/30/16   ·   Next & Latest:  ‘N-CSRS’ on 12/4/18 for 9/30/18

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/01/17  Franklin Templeton ETF Trust      N-CSRS      9/30/17    4:5.3M                                   Donnelley...Solutions/FAFranklin Liberty Intermediate Municipal Opportunities ETFFranklin Liberty International Opportunities ETFFranklin Liberty Investment Grade Corporate ETFFranklin Liberty Municipal Bond ETFFranklin Liberty U.S. Low Volatility ETFFranklin LibertyQ Emerging Markets ETFFranklin LibertyQ Global Dividend ETFFranklin LibertyQ Global Equity ETFFranklin LibertyQ International Equity Hedged ETFFranklin LibertyQ U.S. Equity ETFFranklin LibertyQ U.S. Mid Cap Equity ETFFranklin LibertyQ U.S. Small Cap Equity ETF

Certified Semi-Annual Shareholder Report by a Management Investment Company   —   Form N-CSR
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-CSRS      Franklin Templeton Etf Trust                        HTML   2.74M 
 4: EX-99.906CE  906 Certifications                                 HTML      7K 
 3: EX-99.CERT  302 Certifications                                  HTML     12K 
 2: EX-99.CODE  Code of Ethics                                      HTML     43K 


N-CSRS   —   Franklin Templeton Etf Trust
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"Economic and Market Overview
"Franklin LibertyQ Emerging Markets ETF
"Franklin LibertyQ Global Dividend ETF
"Franklin LibertyQ Global Equity ETF
"Franklin LibertyQ International Equity Hedged ETF
"Financial Highlights and Statements of Investments
"Financial Statements
"Notes to Financial Statements
"Tax Information
"Shareholder Information
"Franklin LibertyQ U.S. Equity ETF
"Franklin LibertyQ U.S. Mid Cap Equity ETF
"Franklin LibertyQ U.S. Small Cap Equity ETF
"Franklin Liberty International Opportunities ETF
"Franklin Liberty Investment Grade Corporate ETF
"Franklin Liberty U.S. Low Volatility ETF
"Municipal Bond Market Overview
"Franklin Liberty Intermediate Municipal Opportunities ETF
"Franklin Liberty Municipal Bond ETF

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  FRANKLIN TEMPLETON ETF TRUST  

 

 

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: 9/30/17

 

 

 


Item 1. Reports to Stockholders.

 


LOGO

 

LOGO

 

LOGO

 

Franklin Templeton

ETF Trust

Semiannual Report

September 30, 2017

 

Franklin LibertyQ Emerging Markets ETF

Franklin LibertyQ Global Dividend ETF

Franklin LibertyQ Global Equity ETF

Franklin LibertyQ International Equity Hedged ETF


FRANKLIN TEMPLETON INVESTMENTS

Gain From Our Perspective®

At Franklin Templeton Investments, we’re dedicated to one goal: delivering exceptional asset management for our clients. By bringing together multiple, world-class investment teams in a single firm, we’re able to offer specialized expertise across styles and asset classes, all supported by the strength and resources of one of the world’s largest asset managers. This has helped us to become a trusted partner to individual and institutional investors across the globe.

Contents        
Semiannual Report       
Economic and Market Overview      2  
Franklin LibertyQ Emerging Markets ETF      3  
Franklin LibertyQ Global Dividend ETF      8  
Franklin LibertyQ Global Equity ETF      13  
Franklin LibertyQ International Equity Hedged ETF      18  
Financial Highlights and Statements of Investments      24  
Financial Statements      56  
Notes to Financial Statements      60  
Tax Information      70  
Shareholder Information      71  

 

 

Visit libertyshares.com for fund updates and documents.

 

 

Not FDIC Insured   |   May Lose Value   |   No Bank Guarantee

 

libertyshares.com   Not part of the semiannual report      1  


SEMIANNUAL REPORT

Economic and Market Overview

 

The global economy generally expanded during the six-month period under review. In this environment, global developed and emerging market stocks rose, as measured by the MSCI All Country World Index. Global markets were aided by generally upbeat economic data across regions, Emmanuel Macron’s election as France’s president, encouraging corporate earnings reports, and the tax reform plan under the Trump administration toward period-end.

However, investors expressed concerns about political uncertainty in the US and the European Union, geopolitical tensions in the Korean peninsula and other regions, global oil oversupply despite a pact by major oil-producing countries to extend production cuts, and hawkish comments from key central bankers around the world.

The US economy strengthened in 2017’s second and third quarters, largely due to growth in consumer spending, business investment, exports and federal government spending. The unemployment rate decreased from 4.5% in March 2017 to 4.2% at period-end.1 Annual inflation, as measured by the Consumer Price Index, decreased from 2.4% in March 2017 to 2.2% at period-end.1 At its June meeting, the US Federal Reserve (Fed) raised its target range for the federal funds rate by 0.25% to 1.00%–1.25%, amid signs of a growing US economy, strengthening labor market and improving business spending. At its July and September 2017 meetings, the Fed kept its target range unchanged. However, in September the Fed mentioned that it would begin implementing its balance sheet reduction in October, and most committee members indicated a likelihood of one more rate hike during 2017.

In Europe, the UK’s economy grew faster in 2017’s third quarter over the previous quarter. The Bank of England kept its key policy rate unchanged during the period but indicated in September that it expected a rate hike to be soon so that

inflation could return to target levels. The eurozone’s growth increased in 2017’s second quarter over the previous quarter. The bloc’s annual inflation rate fluctuated during the reporting period and ended the period where it began. The European Central Bank (ECB) kept its key policy rates unchanged during the period. However, at its September meeting, ECB President Mario Draghi signaled that the bank would reassess its policy stance on quantitative easing in October 2017.

In Asia, Japan’s quarterly gross domestic product (GDP) grew for the sixth consecutive quarter, in 2017’s second quarter, driven by household spending, capital expenditure and government spending. In July 2017, the Bank of Japan marginally raised its GDP forecasts for fiscal years 2017 and 2018, but lowered its inflation forecasts for the same period.

In emerging markets, Brazil’s quarterly GDP grew compared to the previous quarter. The country’s central bank cut its benchmark interest rate four times during the period to spur economic growth. Russia’s GDP grew in 2017’s second quarter compared to the prior-year period amid the Bank of Russia’s continued policy support. China’s economic growth accelerated in 2017’s second and third quarters compared to the prior-year periods, largely driven by higher government spending. The People’s Bank of China left its benchmark interest rate unchanged during the period. Overall, emerging market stocks, as measured by the MSCI Emerging Markets Index, rose during the period.

 

 

The foregoing information reflects our analysis and opinions as of September 30, 2017. 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.

 

2    Semiannual Report   libertyshares.com


Franklin LibertyQ Emerging Markets ETF

 

This semiannual report for Franklin LibertyQ Emerging Markets ETF covers the period ended September 30, 2017.

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.1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the index and in depositary receipts representing such securities. The 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 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 +9.00% based on market price and +9.21% based on net asset value (NAV).2 In comparison, the LibertyQ EM Index generated a +9.76% total return for the same period, while the MSCI EM Index (Net Returns) produced a +14.66% total return.3 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 libertyshares.com or call (800) 342-5236.

 

Geographic Composition
Based on Total Net Assets as of 9/30/17
LOGO
 

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 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 index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s intention is to replicate the component securities of the index as closely as possible. However, under various circumstances, it may not be possible or practicable to purchase all of the component securities in their respective weightings in the index. In these circumstances, the Fund may use a “representative sampling” strategy whereby the Fund would invest in what it believes to be a representative sample of the component securities of the index, but may not track the index with the same degree of accuracy as would an investment vehicle replicating the entire index. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the 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 index that is designed to measure the equity market performance of emerging markets.

2. 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.

3. 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 25.

 

libertyshares.com   Semiannual Report      3  


FRANKLIN LIBERTYQ EMERGING MARKETS ETF

 

Top 10 Sectors/Industries       
9/30/17       
     

% of Total

Net Assets

 
Oil, Gas & Consumable Fuels      12.0%  
Wireless Telecommunication Services      7.7%  
Banks      5.7%  
Automobiles      5.7%  
Electronic Equipment, Instruments & Components      5.6%  
Semiconductors & Semiconductor Equipment      4.6%  
IT Services      4.2%  
Real Estate Management & Development      4.2%  
Technology Hardware, Storage & Peripherals      4.0%  
Metals & Mining      3.6%  
Top 10 Countries       
9/30/17       
     

% of Total

Net Assets

 
China      15.7%  
South Korea      15.6%  
India      13.1%  
Taiwan      13.0%  
Russia      10.7%  
Brazil      5.0%  
South Africa      3.8%  
Indonesia      3.5%  
Thailand      3.4%  
Malaysia      2.9%  
 

 

Top 10 Holdings       
9/30/17       
Company
Sector/Industry, Country
  

% of Total

Net Assets

 

iShares MSCI India ETF

Diversified Financial Services, India

     1.6%  

SK Hynix Inc.

Semiconductors & Semiconductor Equipment, South Korea

     1.4%  

AAC Technologies Holdings Inc.

Electronic Equipment, Instruments & Components, China

     1.3%  

Sunac China Holdings Ltd.

Real Estate Management & Development, China

     1.3%  

Sunny Optical Technology Group Co. Ltd.

Electronic Equipment, Instruments & Components, China

     1.3%  

WisdomTree India Earnings ETF

Diversified Financial Services, India

     1.2%  

Hon Hai Precision Industry Co. Ltd.

Electronic Equipment, Instruments & Components, Taiwan

     1.2%  

Advanced Info Service PCL, NVDR

Wireless Telecommunication Services, Thailand

     1.1%  

Ambev SA

Beverages, Brazil

     1.1%  

MMC Norilsk Nickel PJSC

Metals & Mining, Russia

     1.1%  

Thank you for your participation in Franklin LibertyQ Emerging Markets ETF. We look forward to serving your future investment needs.

 

LOGO   

LOGO

Dina Ting, CFA

   Portfolio Manager

 

 

The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2017, 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.

 

4    Semiannual Report   libertyshares.com


FRANKLIN LIBERTYQ EMERGING MARKETS ETF

 

Performance Summary as of September 30, 2017

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 9/30/171

 

     Cumulative Total Return2      Average Annual Total Return2  
     

Based on

NAV3

    

Based on

market price4

    

Based on

NAV3

    

Based on

market price4

 

6-Month

     +9.21%        +9.00%        +9.21%        +9.00%  

Since Inception (6/1/16)

     +25.10%        +25.50%        +18.31%        +18.60%  

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 libertyshares.com or call (800) 342-5236.

See page 6 for Performance Summary footnotes.

 

libertyshares.com   Semiannual Report     5  


FRANKLIN LIBERTYQ EMERGING MARKETS ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/179/30/17)

Net Investment
Income
$0.289255

Total Annual Operating Expenses5

With Waiver   Without Waiver  
0.55%     0.79%  

All investments involve risks, including possible loss of principal. 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. 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 an expense reduction contractually guaranteed through 7/31/18. 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.

 

6    Semiannual Report   libertyshares.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 4/1/17
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Net Annualized
Expense Ratio2
 
  $1,000.00     $ 1,092.10     $ 2.83     $ 1,022.36     $ 2.74       0.54

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.

 

libertyshares.com   Semiannual Report     7  


Franklin LibertyQ Global Dividend ETF

 

This semiannual report for Franklin LibertyQ Global Dividend ETF covers the period ended September 30, 2017.

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.1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the index and in depositary receipts representing such securities. The 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 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 +5.12% based on market price and +5.25% based on net asset value (NAV).2 In comparison, the LibertyQ Global Dividend Index delivered a +5.25% total return for the same period, while the MSCI ACWI ex REITs Index (Net Returns) produced a +9.82% total return for the same period.3 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 libertyshares.com or call (800) 342-5236.

 

Geographic Composition
Based on Total Net Assets as of 9/30/17
LOGO
 

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 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 index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s intention is to replicate the component securities of the index as closely as possible. However, under various circumstances, it may not be possible or practicable to purchase all of the component securities in their respective weightings in the index. In these circumstances, the Fund may use a “representative sampling” strategy whereby the Fund would invest in what it believes to be a representative sample of the component securities of the index, but may not track the index with the same degree of accuracy as would an investment vehicle replicating the entire index. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the 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 index that is designed to measure the equity market performance of developed and emerging markets, excluding REIT securities.

2. 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.

3. 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 31.

 

8    Semiannual Report   libertyshares.com


FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF

 

Top 10 Sectors/Industries       
9/30/17       
     

% of Total

Net Assets

 
Banks      17.6%  
Pharmaceuticals      16.2%  
Household Products      5.4%  
Tobacco      5.4%  
Diversified Telecommunication Services      4.6%  
Semiconductors & Semiconductor Equipment      4.3%  
Hotels, Restaurants & Leisure      4.3%  
Personal Products      4.3%  
Food & Staples Retailing      4.0%  
Aerospace & Defense      3.6%  
Top 10 Countries       
9/30/17       
     

% of Total

Net Assets

 
US      36.3%  
UK      14.1%  
Canada      10.0%  
Australia      9.5%  
Switzerland      5.5%  
Brazil      4.8%  
Japan      4.0%  
Sweden      3.7%  
South Africa      2.2%  
France      2.1%  
 

 

Top 10 Holdings       
9/30/17       

Company

Sector/Industry, Country

  

% of Total

Net Assets

 

Itau Unibanco Holding SA

Banks, Brazil

     2.5%  

Westpac Banking Corp.

Banks, Australia

     2.4%  

The Toronto-Dominion Bank

Banks, Canada

     2.4%  

Bristol-Myers Squibb Co.

Pharmaceuticals, US

     2.3%  

Ambev SA

Beverages, Brazil

     2.3%  

Bank of Nova Scotia

Banks, Canada

     2.2%  

Lockheed Martin Corp.

Aerospace & Defense, US

     2.2%  

Royal Bank of Canada

Banks, Canada

     2.2%  

Canadian Imperial Bank of Commerce

Banks, Canada

     2.2%  

Commonwealth Bank of Australia

Banks, Australia

     2.2%  

Thank you for your participation in Franklin LibertyQ Global Dividend ETF. We look forward to serving your future investment needs.

 

LOGO   

LOGO

Dina Ting, CFA

   Portfolio Manager

 

 

The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2017, 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.

 

 

libertyshares.com   Semiannual Report     9  


FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF

 

Performance Summary as of September 30, 2017

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 (6/3/16), 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 9/30/171

 

     Cumulative Total Return2      Average Annual Total Return2  
     

Based on

NAV3

    

Based on

market price4

    

Based on

NAV3

    

Based on

market price4

 

6-Month

     +5.25%        +5.12%        +5.25%        +5.12%  

Since Inception (6/1/16)

     +15.56%        +16.04%        +11.47%        +11.82%  

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 libertyshares.com or call (800) 342-5236.

See page 11 for Performance Summary footnotes.

 

10    Semiannual Report   libertyshares.com


FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/179/30/17)

Net Investment
Income
$0.621895

Total Annual Operating Expenses5

With Waiver   Without Waiver  
0.45%     0.98%  

All investments involve risks, including possible loss of principal. 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 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. 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 an expense reduction contractually guaranteed through 7/31/18. 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.

 

libertyshares.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 4/1/17
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Net Annualized
Expense Ratio2
 
  $1,000.00     $ 1,052.50     $ 2.32     $ 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   libertyshares.com


Franklin LibertyQ Global Equity ETF

 

This semiannual report for Franklin LibertyQ Global Equity ETF covers the period ended September 30, 2017.

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.1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the index and in depositary receipts representing such securities. The 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 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 +8.52% based on market price and +8.68% based on net asset value (NAV).2 In comparison, the LibertyQ Global Equity Index delivered a +8.71% total return for the same period, while the MSCI ACWI (Net Returns) produced a +9.68% total return.3 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 libertyshares.com or call (800) 342-5236.

 

Geographic Composition
Based on Total Net Assets as of 9/30/17
LOGO
 

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 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 index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s intention is to replicate the component securities of the index as closely as possible. However, under various circumstances, it may not be possible or practicable to purchase all of the component securities in their respective weightings in the index. In these circumstances, the Fund may use a “representative sampling” strategy whereby the Fund would invest in what it believes to be a representative sample of the component securities of the index, but may not track the index with the same degree of accuracy as would an investment vehicle replicating the entire index. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the 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 index that is designed to measure the equity market performance of developed and emerging markets.

2. 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.

3. 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 35.

 

libertyshares.com   Semiannual Report      13  


FRANKLIN LIBERTYQ GLOBAL EQUITY ETF

 

Top 10 Sectors/Industries       
9/30/17       
     

% of Total

Net Assets

 
Pharmaceuticals      8.8%  
Banks      5.8%  
Semiconductors & Semiconductor Equipment      5.7%  
Aerospace & Defense      4.4%  
Specialty Retail      4.2%  
Diversified Telecommunication Services      4.2%  
IT Services      4.1%  
Biotechnology      3.8%  
Hotels, Restaurants & Leisure      3.3%  
Technology Hardware, Storage & Peripherals      3.2%  
Top 10 Countries       
9/30/17       
     

% of Total

Net Assets

 
US      54.6%  
UK      9.4%  
Japan      4.2%  
Australia      4.1%  
Canada      3.8%  
China      3.5%  
South Korea      2.9%  
Taiwan      2.5%  
Switzerland      2.0%  
Russia      1.3%  
 

 

Top 10 Holdings       
9/30/17       

Company

Sector/Industry, Country

  

% of Total

Net Assets

 

The Boeing Co.

Aerospace & Defense, US

    
1.3%
 

AbbVie Inc.

Biotechnology, US

    
1.3%
 

Mastercard Inc., A

IT Services, US

    
1.2%
 

Gilead Sciences Inc.

Biotechnology, US

    
1.2%
 

Novo Nordisk AS, B

Pharmaceuticals, Denmark

    
1.1%
 

Taiwan Semiconductor Manufacturing Co. Ltd.

Semiconductors & Semiconductor Equipment, Taiwan

    
1.1%
 

Microsoft Corp.

Software, US

    
1.1%
 

HSBC Holdings PLC

Banks, UK

    
1.1%
 

UnitedHealth Group Inc.

Health Care Providers & Services, US

    
1.1%
 

Accenture PLC, A

IT Services, US

     1.1%  

Thank you for your participation in Franklin LibertyQ Global Equity ETF. We look forward to serving your future investment needs.

 

LOGO   

LOGO

Dina Ting, CFA

   Portfolio Manager

 

 

The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2017, 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   libertyshares.com


FRANKLIN LIBERTYQ GLOBAL EQUITY ETF

 

Performance Summary as of September 30, 2017

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 9/30/171

 

     Cumulative Total Return2      Average Annual Total Return2  
      Based on
NAV3
     Based on
market price4
     Based on
NAV3
    

Based on

market price4

 

6-Month

     +8.68%        +8.52%        +8.68%        +8.52%  

Since Inception (6/1/16)

     +19.49%        +19.92%        +14.31%        +14.62%  

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

See page 16 for Performance Summary footnotes.

 

libertyshares.com   Semiannual Report     15  


FRANKLIN LIBERTYQ GLOBAL EQUITY ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/17–9/30/17)

Net Investment
Income
$0.324710

Total Annual Operating Expenses5

With Waiver      Without Waiver  
0.35%        1.05%  

All investments involve risks, including possible loss of principal. 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. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. There can be no assurance that the 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. 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 an expense reduction contractually guaranteed through 7/31/18. 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.

 

16    Semiannual Report   libertyshares.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 4/1/17
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Net Annualized
Expense Ratio2
 
  $1,000.00     $ 1,086.80     $ 1.83     $ 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.

 

libertyshares.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, 2017.

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.1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the index and in depositary receipts representing such securities. The index includes stocks from developed market countries in Europe, Australasia and the Far East that have favorable exposure to four investment-style factors: quality, value, momentum and low volatility, subject to a maximum 2% per company weighting. The 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 index incorporates a hedge against non-US currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the index. In order to replicate the hedge impact incorporated in the calculation of the index, the Fund intends to enter into monthly foreign currency forward contracts designed to offset the Fund’s exposure to the component currencies of the index.

 

What is a currency forward contract?

A currency forward contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date.

 

Geographic Composition*
Based on Total Net Assets as of 9/30/17
LOGO

*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.

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of +3.94% based on market price and +4.78% based on net asset value (NAV).2 In comparison, the LibertyQ International Equity Hedged Index had a +4.93% total return for the same period, while the MSCI EAFE 100% Hedged to USD Index (Net Returns) produced a +6.95% total return.3 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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 libertyshares.com or call (800) 342-5236.

 

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 index that is designed to measure the equity market performance of developed markets, excluding the US and Canada.

2. 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.

3. 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.

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 48.

 

18    Semiannual Report   libertyshares.com


FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF

 

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 index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s intention is to replicate the component securities of the index as closely as possible. However, under various circumstances, it may not be possible or practicable to purchase all of the component securities in their respective weightings in the index. In these circumstances, the Fund may use a “representative sampling” strategy whereby the Fund would invest in what it believes to be a representative sample of the component securities of the index, but may not track the index with the same degree of accuracy as would an investment vehicle replicating the entire index. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the index.

 

Top 10 Sectors/Industries       
9/30/17       
     

% of Total

Net Assets

 
Banks      11.4%  
Pharmaceuticals      9.8%  
Insurance      5.6%  
Diversified Telecommunication Services      5.3%  
Personal Products      5.0%  
Tobacco      4.2%  
Automobiles      4.1%  
Specialty Retail      3.0%  
Professional Services      2.9%  
Chemicals      2.9%  
Top 10 Countries       
9/30/17       
     

% of Total

Net Assets

 
UK      28.1%  
Japan      20.6%  
Australia      17.1%  
Switzerland      6.8%  
France      4.3%  
Denmark      3.8%  
Hong Kong      3.7%  
Sweden      3.3%  
Spain      2.7%  
Singapore      2.2%  

 

Top 10 Holdings       
9/30/17       
Company
Sector/Industry, Country
   % of Total
Net Assets
 

Novo Nordisk AS, B

Pharmaceuticals, Denmark

    
2.3%
 

HSBC Holding PLC

Banks, UK

    
2.2%
 

Toyota Motor Corp.

Automobiles, Japan

    
2.2%
 

Westpac Banking Corp.

Banks, Australia

    
2.1%
 

Unilever NV

Personal Products, UK

    
2.1%
 

Unilever PLC

Personal Products, UK

    
2.1%
 

AstraZeneca PLC

Pharmaceuticals, UK

    
1.9%
 

CSL Ltd.

Biotechnology, Australia

    
1.9%
 

Roche Holding AG

Pharmaceuticals, Switzerland

    
1.8%
 

GlaxoSmithKline PLC

Pharmaceuticals, UK

    
1.8%
 
 

 

libertyshares.com   Semiannual Report     19  


FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF

 

Thank you for your participation in Franklin LibertyQ International Equity Hedged ETF. We look forward to serving your future investment needs.

 

LOGO   

LOGO

Dina Ting, CFA

   Portfolio Manager

 

 

The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2017, 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.

 

 

 

20    Semiannual Report   libertyshares.com


FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF

 

Performance Summary as of September 30, 2017

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 9/30/171

 

     Cumulative Total Return2      Average Annual Total Return2  
      Based on
NAV3
     Based on
market price4
     Based on
NAV3
    

Based on

market price4

 

6-Month

     +4.78%        +3.94%        +4.78%        +3.94%  

Since Inception (6/1/16)

     +13.47%        +13.55%        +9.95%        +10.01  

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 libertyshares.com or call (800) 342-5236.

See page 22 for Performance Summary footnotes.

 

libertyshares.com   Semiannual Report     21  


FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/17–9/30/17)

Net Investment

Income

$1.297820

Total Annual Operating Expenses5

With Waiver      Without Waiver  
0.40%        1.25%  

All investments involve risks, including possible loss of principal. 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-US 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-US 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. 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 an expense reduction contractually guaranteed through 7/31/18. 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.

 

22    Semiannual Report   libertyshares.com


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 4/1/17
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Ending
Account
Value 9/30/17
    Expenses
Paid During
Period
4/1/17–9/30/171,2
    Net Annualized
Expense Ratio2
 
  $1,000.00     $ 1,047.80     $ 2.05     $ 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.

 

libertyshares.com   Semiannual Report     23  


FRANKLIN TEMPLETON ETF TRUST

 

Financial Highlights

 

Franklin LibertyQ Emerging Markets ETF

 

     Six Months Ended
September 30, 2017
(unaudited)
     Year Ended
March 31, 2017a
 
Per share operating performance
(for a share outstanding throughout the period)
 

Net asset value, beginning of period

  $ 29.29      $ 25.66  
 

 

 

 
Income from investment operationsb:  

Net investment incomec

    0.55        0.47  

Net realized and unrealized gains (losses)

    2.16        3.25  
 

 

 

 

Total from investment operations

    2.71        3.72  
 

 

 

 

Less distributions from net investment income

    (0.29      (0.09
 

 

 

 

Net asset value, end of period

  $ 31.71      $ 29.29  
 

 

 

 

Total returnd

    9.32%        14.55%  
Ratios to average net assetse  

Expenses before waiver and payments by affiliates

    0.71%        0.75%  

Expenses net of waiver and payments by affiliates

    0.54%        0.55%  

Net investment income

    3.56%        2.09%  
Supplemental data  

Net assets, end of period (000’s)

    $405,902        $328,086  

Portfolio turnover ratef

    13.95%        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 of 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 excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any.

 

24    Semiannual Report   |    The accompanying notes are an integral part of these financial statements.   libertyshares.com


FRANKLIN TEMPLETON ETF TRUST

 

Statement of Investments, September 30, 2017 (unaudited)

 

Franklin LibertyQ Emerging Markets ETF

 

      Industry        Shares        Value  
    Common Stocks 94.8%  
    Brazil 5.0%  
 

Ambev SA

     Beverages          678,408        $ 4,512,497  
 

BB Seguridade Participacoes SA

     Insurance          435,208          3,939,113  
 

Cielo SA

     IT Services          556,816          3,869,186  
 

Companhia de Saneamento Basico do Estado de Sao Paulo

     Water Utilities          96,000          1,010,031  
 

EDP-Energias do Brasil SA

     Electric Utilities          195,808          937,209  
 

Engie Brasil SA

     Independent Power and Renewable Electricity Producers          121,688          1,394,556  
 

Fibria Celulose SA

     Paper & Forest Products          115,252          1,561,275  
 

M Dias Branco SA

     Food Products          25,600          402,232  
 

Odontoprev SA

     Health Care Providers & Services          205,528          1,002,576  
 

Qualicorp SA

     Health Care Providers & Services          108,888          1,304,666  
 

Transmissora Alianca de Energia Eletrica SA

     Electric Utilities          76,800          540,221  
              

 

 

 
                 20,473,562  
              

 

 

 
    Chile 0.7%  
 

Aguas Andinas SA, A

     Water Utilities          2,015,872          1,284,439  
 

Enel Chile SA

     Electric Utilities          5,304,128          647,653  
 

Enel Generacion Chile SA

     Independent Power and Renewable Electricity Producers          994,944          869,955  
              

 

 

 
                 2,802,047  
              

 

 

 
    China 15.7%  
 

AAC Technologies Holdings Inc.

     Electronic Equipment, Instruments & Components          320,000          5,375,190  
 

Agricultural Bank of China Ltd., H

     Banks          7,980,000          3,575,864  
 

Anta Sports Products Ltd.

     Textiles, Apparel & Luxury Goods          704,000          2,960,861  
 

China Everbright Bank Co. Ltd., H

     Banks          1,792,000          828,238  
 

China Mobile Ltd.

     Wireless Telecommunication Services          352,000          3,567,004  
 

Chongqing Changan Automobile Co. Ltd., B

     Automobiles          627,110          829,381  
 

Chongqing Rural Commercial Bank Co. Ltd., H

     Banks          1,408,000          892,314  
 

Country Garden Holdings Co. Ltd.

     Real Estate Management & Development          2,624,000          4,172,492  
 

CSPC Pharmaceutical Group Ltd.

     Pharmaceuticals          1,280,000          2,143,521  
 

Dongfeng Motor Group Co. Ltd., H

     Automobiles          1,920,000          2,536,828  
 

Great Wall Motor Co. Ltd., H

     Automobiles          2,144,000          2,635,154  
 

Guangdong Investment Ltd.

     Water Utilities          1,792,000          2,555,838  
 

Guangzhou Automobile Group Co. Ltd., H

     Automobiles          896,000          2,074,037  
 

Huaneng Power International Inc., H

     Independent Power and Renewable Electricity Producers          2,176,000          1,345,600  
 

Jiangsu Expressway Co. Ltd., H

     Transportation Infrastructure          768,000          1,175,987  
 

Longfor Properties Co. Ltd.

     Real Estate Management & Development          864,000          2,179,164  
 

NetEase Inc., ADR

     Internet Software & Services          13,824          3,646,909  
 

Shenzhou International Group Holdings Ltd.

     Textiles, Apparel & Luxury Goods          384,000          3,008,796  
 

Sihuan Pharmaceutical Holdings Group Ltd.

     Pharmaceuticals          1,216,000          442,142  
 

Sino-Ocean Land Holdings Ltd.

     Real Estate Management & Development          1,056,000          704,388  
 

Sinopec Engineering Group Co. Ltd.

     Construction & Engineering          832,000          733,927  
 

Sinopec Shanghai Petrochemical Co. Ltd., H

     Chemicals          1,792,000          1,066,844  
 

Sunac China Holdings Ltd.

     Real Estate Management & Development          1,152,000          5,272,767  
 

Sunny Optical Technology Group Co. Ltd.

     Electronic Equipment, Instruments & Components          320,000          5,088,404  
a  

Yum China Holdings Inc.

     Hotels, Restaurants & Leisure          104,448          4,174,787  
a  

YY Inc., ADR

     Internet Software & Services          9,664          838,642  
              

 

 

 
                 63,825,079  
              

 

 

 
    Colombia 0.3%  
 

Grupo Inversiones Suramericcana SA.

     Diversified Financial Services          76,800          1,069,073  
              

 

 

 

 

libertyshares.com   Semiannual Report     25  


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Emerging Markets ETF (continued)

 

      Industry        Shares        Value  
    Common Stocks (continued)  
    Czech Republic 0.4%  
 

Moneta Money Bank AS

     Banks          204,608        $ 720,316  
 

O2 Czech Republic AS

     Diversified Telecommunication Services          62,848          771,818  
              

 

 

 
                 1,492,134  
              

 

 

 
    Hungary 0.7%  
 

MOL Hungarian Oil and Gas PLC

     Oil, Gas & Consumable Fuels          264,704          3,021,950  
              

 

 

 
    India 10.3%  
 

Asian Paints Ltd.

     Chemicals          141,888          2,458,277  
 

Bajaj Auto Ltd.

     Automobiles          33,280          1,584,214  
 

Bharat Petroleum Corp. Ltd.

     Oil, Gas & Consumable Fuels          425,292          3,068,587  
 

Coal India Ltd.

     Oil, Gas & Consumable Fuels          348,672          1,445,772  
 

Dabur India Ltd.

     Personal Products          210,624          983,471  
 

Eicher Motors Ltd.

     Machinery          5,628          2,689,352  
 

HCL Technologies Ltd.

     IT Services          253,760          3,398,488  
 

Hero Motocorp Ltd.

     Automobiles          28,608          1,653,128  
 

Hindustan Petroleum Corp. Ltd.

     Oil, Gas & Consumable Fuels          300,416          1,962,914  
 

Hindustan Unilever Ltd.

     Household Products          214,336          3,851,945  
 

Indian Oil Corp. Ltd.

     Oil, Gas & Consumable Fuels          134,592          825,231  
 

Infosys Ltd.

     IT Services          199,668          2,750,784  
 

ITC Ltd.

     Tobacco          730,176          2,887,392  
 

Marico Ltd.

     Personal Products          222,464          1,058,339  
 

Maruti Suzuki India Ltd.

     Automobiles          32,384          3,955,389  
 

Rural Electrification Corp. Ltd.

     Diversified Financial Services          56,000          131,084  
 

Tata Consultancy Services Ltd.

     IT Services          81,024          3,021,592  
 

Tech Mahindra Ltd.

     IT Services          218,944          1,534,653  
 

Wipro Ltd.

     IT Services          601,408          2,580,291  
              

 

 

 
                 41,840,903  
              

 

 

 
    Indonesia 3.5%  
 

Hanjaya Mandala Sampoerna Tbk PT

     Tobacco          6,009,600          1,722,255  
 

Matahari Department Store Tbk PT

     Multiline Retail          1,894,400          1,304,519  
 

PT Telekom Indonesia (Persero) Tbk

     Diversified Telecommunication Services          11,078,400          3,849,351  
 

Surya Citra Media Tbk PT

     Media          4,320,000          702,413  
 

Unilever Indonesia Tbk PT

     Household Products          1,126,400          4,095,734  
 

United Tractors Tbk PT

     Oil, Gas & Consumable Fuels          1,011,200          2,402,435  
              

 

 

 
                 14,076,707  
              

 

 

 
    Malaysia 2.9%  
 

AirAsia Bhd.

     Airlines          403,200          329,435  
 

Astro Malaysia Holdings Bhd.

     Media          1,126,400          752,267  
 

British American Tobacco Malaysia Bhd.

     Tobacco          134,400          1,392,222  
 

Digi.com Bhd.

     Wireless Telecommunication Services          2,976,000          3,453,499  
 

Hartalega Holdings Bhd.

     Health Care Equipment & Supplies          377,600          622,403  
 

Maxis Bhd.

     Wireless Telecommunication Services          1,171,200          1,608,753  
 

Petronas Chemicals Group Bhd.

     Chemicals          1,484,800          2,563,456  
 

Petronas Dagangan Bhd.

     Oil, Gas & Consumable Fuels          76,800          442,339  
 

Westports Holdings Bhd.

     Transportation Infrastructure          723,200          652,550  
              

 

 

 
                 11,816,924  
              

 

 

 
    Mexico 2.5%  
 

Gruma SAB de CV

     Food Products          120,512          1,766,808  
 

Grupo Aeroportuario del Pacifico SAB de CV

     Transportation Infrastructure          219,456          2,252,659  
 

Kimberly-Clark de Mexico SAB de CV, A

     Household Products          1,047,744          2,137,694  
 

Wal-Mart de Mexico SAB de CV, V

     Food & Staples Retailing          1,753,984          4,027,762  
              

 

 

 
                 10,184,923  
              

 

 

 
    Pakistan 0.4%  
 

Engro Corp. Ltd.

     Chemicals          83,200          239,422  
 

Habib Bank Ltd.

     Banks          172,800          296,561  

 

26    Semiannual Report   libertyshares.com


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Emerging Markets ETF (continued)

 

      Industry      Shares        Value  
    Common Stocks (continued)  
    Pakistan (continued)  
 

Lucky Cement Ltd.

     Construction Materials        44,800        $ 240,323  
 

MCB Bank Ltd.

     Banks        128,000          251,552  
 

Oil & Gas Development Co. Ltd.

     Oil, Gas & Consumable Fuels        224,000          315,397  
 

United Bank Ltd.

     Banks        134,400          239,897  
            

 

 

 
               1,583,152  
            

 

 

 
    Philippines 0.2%  
 

DMCI Holdings Inc.

     Industrial Conglomerates        755,200          231,914  
 

Globe Telecom Inc.

     Wireless Telecommunication Services        17,920          723,157  
            

 

 

 
               955,071  
            

 

 

 
    Poland 1.5%  
a  

PGE Polska Grupa Energetyczna SA

     Electric Utilities        608,000          2,219,130  
 

Polski Koncern Naftowy Orlen SA

     Oil, Gas & Consumable Fuels        100,800          3,366,501  
a  

Tauron Polska Energia SA

     Electric Utilities        557,184          573,400  
            

 

 

 
               6,159,031  
            

 

 

 
    Qatar 1.0%  
a  

The Commercial Bank QSC

     Banks        742          5,933  
 

Doha Bank QSC

     Banks        97,377          775,646  
 

Industries Qatar QSC

     Industrial Conglomerates        94,400          2,377,405  
 

Qatar Electricity & Water Co. QSC

     Multi-Utilities        20,992          1,007,870  
            

 

 

 
               4,166,854  
            

 

 

 
    Russia 9.9%  
 

Alrosa PJSC

     Metals & Mining        2,352,896          3,338,183  
 

Federal Hydrogenerating Co.

     Electric Utilities        51,377,216          767,210  
 

Gazprom PJSC

     Oil, Gas & Consumable Fuels        1,708,224          3,616,927  
 

Inter RAO UES PJSC

     Electric Utilities        19,866,560          1,289,001  
 

LUKOIL PJSC

     Oil, Gas & Consumable Fuels        75,456          4,010,904  
 

MMC Norilsk Nickel PJSC

     Metals & Mining        25,728          4,442,698  
 

Mobile TeleSystems PJSC, ADR

     Wireless Telecommunication Services        416,384          4,347,049  
 

NLMK PJSC

     Metals & Mining        486,144          1,113,974  
b  

Novatek PJSC, GDR, Reg S

     Oil, Gas & Consumable Fuels        29,376          3,445,805  
b  

PhosAgro PJSC, GDR, Reg S

     Chemicals        101,568          1,447,344  
 

Rosneft PJSC

     Oil, Gas & Consumable Fuels        742,720          4,118,301  
 

Severstal PJSC

     Metals & Mining        164,416          2,485,200  
 

Surgutneftegas OAO

     Oil, Gas & Consumable Fuels        3,492,608          1,784,305  
 

Tatneft PAO

     Oil, Gas & Consumable Fuels        556,160          3,951,555  
            

 

 

 
               40,158,456  
            

 

 

 
    South Africa 3.8%  
 

Bidvest Group Ltd.

     Industrial Conglomerates        146,112          1,868,372  
 

Fortress Income Fund Ltd., A

     Equity Real Estate Investment Trusts (REITs      499,904          638,648  
 

Mr. Price Group Ltd.

     Specialty Retail        186,048          2,480,732  
 

Pick ‘N Pay Stores Ltd.

     Food & Staples Retailing        192,448          821,102  
 

Sibanye-Stillwater

     Metals & Mining        1,070,720          1,206,914  
 

Tiger Brands Ltd.

     Food Products        85,120          2,378,821  
 

Truworths International Ltd.

     Specialty Retail        330,496          1,890,822  
 

Vodacom Group Ltd.

     Wireless Telecommunication Services        328,448          3,919,727  
            

 

 

 
               15,205,138  
            

 

 

 
    South Korea 14.5%  
 

BGF Retail Co. Ltd.

     Food & Staples Retailing        10,688          774,527  
 

BNK Financial Group Inc.

     Banks        75,264          657,127  
 

Coway Co. Ltd.

     Household Durables        40,000          3,282,839  
 

DGB Financial Group Inc.

     Banks        81,920          751,002  
 

Hana Financial Group Inc.

     Banks        105,984          4,381,492  
 

Hankook Tire Co. Ltd.

     Auto Components        43,840          2,304,246  
 

Hanon Systems

     Auto Components        121,152          1,332,794  
 

Hanssem Co. Ltd.

     Household Durables        5,888          778,829  

 

libertyshares.com   Semiannual Report     27  


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Emerging Markets ETF (continued)

 

      Industry        Shares        Value  
    Common Stocks (continued)  
    South Korea (continued)  
 

Hanwha Life Insurance Co. Ltd.

     Insurance          103,680        $ 620,079  
 

Hyundai Marine & Fire Insurance Co. Ltd.

     Insurance          36,160          1,430,172  
 

Hyundai Mobis Co. Ltd.

     Auto Components          16,576          3,473,384  
 

Industrial Bank of Korea

     Banks          132,032          1,659,982  
 

Kangwon Land Inc.

     Hotels, Restaurants & Leisure          76,160          2,327,324  
 

KB Financial Group Inc.

     Banks          86,144          4,219,390  
 

Kia Motors Corp.

     Automobiles          111,872          3,091,412  
 

KT&G Corp.

     Tobacco          41,536          3,825,947  
 

LG Display Co. Ltd.

     Electronic Equipment, Instruments & Components          68,096          1,816,329  
 

Lotte Chemical Corp.

     Chemicals          9,280          3,062,680  
 

Naver Corp.

     Internet Software & Services          5,120          3,330,336  
 

S-1 Corp.

     Commercial Services & Supplies          13,568          1,056,677  
 

S-Oil Corp.

     Oil, Gas & Consumable Fuels          14,016          1,560,257  
 

Samsung Electronics Co. Ltd.

     Technology Hardware, Storage & Peripherals          1,856          4,154,873  
 

SK Hynix Inc.

     Semiconductors & Semiconductor Equipment          80,640          5,836,693  
 

SK Telecom Co. Ltd.

     Wireless Telecommunication Services          13,120          2,921,028  
              

 

 

 
                 58,649,419  
              

 

 

 
    Taiwan 13.0%  
 

Advantech Co. Ltd.

     Technology Hardware, Storage & Peripherals          208,194          1,462,384  
 

Asustek Computer Inc.

     Technology Hardware, Storage & Peripherals          384,000          3,140,483  
 

Catcher Technology Co. Ltd.

     Technology Hardware, Storage & Peripherals          384,000          3,735,655  
 

Chicony Electronics Co. Ltd.

     Technology Hardware, Storage & Peripherals          385,770          915,956  
 

Chunghwa Telecom Co. Ltd.

     Diversified Telecommunication Services          1,024,000          3,528,822  
 

Eclat Textile Co. Ltd.

     Textiles, Apparel & Luxury Goods          128,280          1,592,713  
 

Far EasTone Telecommunications Co. Ltd.

     Wireless Telecommunication Services          1,088,000          2,604,828  
 

Feng Tay Enterprise Co. Ltd.

     Textiles, Apparel & Luxury Goods          256,800          1,168,658  
 

Formosa Petrochemical Corp.

     Oil, Gas & Consumable Fuels          576,000          2,013,455  
 

Foxconn Technology Co. Ltd.

     Technology Hardware, Storage & Peripherals          448,200          1,308,063  
 

Highwealth Construction Corp.

     Real Estate Management & Development          576,000          780,689  
 

Hon Hai Precision Industry Co. Ltd.

     Electronic Equipment, Instruments & Components          1,344,000          4,742,382  
 

Largan Precision Co. Ltd.

     Electronic Equipment, Instruments & Components          24,000          4,254,056  
 

Micro-Star International Co. Ltd.

     Technology Hardware, Storage & Peripherals          256,000          553,806  
 

Nanya Technology Corp.

     Semiconductors & Semiconductor Equipment          384,000          1,092,837  
 

Nien Made Enterprise Co. Ltd.

     Household Durables          64,000          656,378  
 

Novatek Microelectronics Corp. Ltd.

     Semiconductors & Semiconductor Equipment          448,000          1,691,597  
 

Phison Electronics Corp.

     Semiconductors & Semiconductor Equipment          128,000          1,519,588  
 

President Chain Store Corp.

     Food & Staples Retailing          384,000          3,222,794  
 

Realtek Semiconductor Corp.

     Semiconductors & Semiconductor Equipment          256,000          899,090  
 

Ruentex Industries Ltd.

     Textiles, Apparel & Luxury Goods          320,000          478,037  
 

Siliconware Precision Industries Co.

     Semiconductors & Semiconductor Equipment          1,536,000          2,454,135  
 

Taiwan Mobile Co. Ltd.

     Wireless Telecommunication Services          960,000          3,434,903  
 

Taiwan Semiconductor Manufacturing Co. Ltd.

     Semiconductors & Semiconductor Equipment          576,000          4,112,386  
 

Transcend Information Inc.

     Technology Hardware, Storage & Peripherals          192,000          548,318  
 

Vanguard International Semiconductor Corp.

     Semiconductors & Semiconductor Equipment          640,000          1,105,923  
              

 

 

 
                 53,017,936  
              

 

 

 
    Thailand 3.4%  
 

Advanced Info Service PCL, NVDR

     Wireless Telecommunication Services          806,400          4,618,363  
 

BEC World PCL, NVDR

     Media          800,000          391,004  
 

Bumrungrad Hospital PCL, NVDR

     Health Care Providers & Services          204,800          1,320,300  
 

Central Pattana PCL, NVDR

     Real Estate Management & Development          742,400          1,736,348  
 

Delta Electronics Thailand PCL, NVDR

     Electronic Equipment, Instruments & Components          371,200          971,130  
 

Glow Energy PCL, NVDR

     Independent Power and Renewable Electricity Producers          140,800          376,804  
 

KCE Electronics PCL, NVDR

     Electronic Equipment, Instruments & Components          128,000          383,808  
 

The Siam Cement PCL, NVDR

     Construction Materials          185,600          2,782,609  
 

Thai Oil PCL, NVDR

     Oil, Gas & Consumable Fuels          441,600          1,224,827  
              

 

 

 
                 13,805,193  
              

 

 

 

 

28    Semiannual Report   libertyshares.com


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Emerging Markets ETF (continued)

 

      Industry        Shares        Value  
    Common Stocks (continued)  
    Turkey 2.9%  
 

Aselsan Elektronik Sanayi ve Ticaret AS

     Aerospace & Defense          61,696        $ 456,288  
 

BIM Birlesik Magazalar AS

     Food & Staples Retailing          151,680          3,167,020  
 

Eregli Demir ve Celik Fabrikalari AS

     Metals & Mining          946,816          2,058,122  
 

Ford Otomotiv Sanayi AS

     Automobiles          49,472          634,381  
 

Petkim Petrokimya Holding AS

     Chemicals          308,160          518,207  
 

TAV Havalimanlari Holding AS

     Transportation Infrastructure          113,472          563,196  
 

Tofas Turk Otomobil Fabrikasi AS

     Automobiles          81,728          709,699  
 

Tupras-Turkiye Petrol Rafinerileri AS

     Oil, Gas & Consumable Fuels          84,352          2,884,397  
 

Turkiye Is Bankasi, C

     Banks          402,688          767,758  
              

 

 

 
                 11,759,068  
              

 

 

 
    United Arab Emirates 2.2%  
 

Aldar Properties PJSC

     Real Estate Management & Development          2,084,992          1,322,759  
 

Damac Properties Dubai Co. PJSC

     Real Estate Management & Development          792,832          820,324  
 

Dubai Islamic Bank PJSC

     Banks          414,784          683,279  
 

Emirates Telecommunications Group Co. PJSC

     Diversified Telecommunication Services          787,840          3,711,116  
 

First Abu Dhabi Bank PJSC

     Banks          870,382          2,417,300  
              

 

 

 
                 8,954,778  
              

 

 

 
 

Total Common Stocks
(Cost $342,496,542)

               385,017,398  
              

 

 

 
    Management Investment Companies 2.8%                    
    India 2.8%  
 

iShares MSCI India ETF

     Diversified Financial Services          198,080          6,506,928  
 

WisdomTree India Earnings ETF

     Diversified Financial Services          196,672          4,950,234  
              

 

 

 
 

Total Management Investment Companies
(Cost $9,975,650)

               11,457,162  
              

 

 

 
    Preferred Stocks 2.0%  
    Colombia 0.1%  
c  

Grupo de Inversiones Surameric SA, 1.498%, pfd.

     Diversified Financial Services          26,496          362,515  
              

 

 

 
    Russia 0.8%  
 

Surgutneftegas OAO, 2.029%, pfd.

     Oil, Gas & Consumable Fuels          4,127,168          2,119,962  
 

Transneft PJSC, 4.604%, pfd.

     Oil, Gas & Consumable Fuels          320          986,839  
              

 

 

 
                 3,106,801  
              

 

 

 
    South Korea 1.1%  
c  

Hyundai Motor Co., 4.327%, pfd.

     Automobiles          14,912          1,218,635  
c  

Hyundai Motor Co., 4.000%, pfd., 2

     Automobiles          23,936          2,142,087  
 

LG Chem Ltd., 1.992%, pfd.

     Chemicals          3,200          708,255  
c  

Samsung Electronics Co., Ltd., 2.015%, pfd.

     Technology Hardware, Storage & Peripherals          256          460,883  
              

 

 

 
                 4,529,860  
              

 

 

 
 

Total Preferred Stocks (Cost $7,347,505)

               7,999,176  
              

 

 

 
 

Total Investments
(Cost $359,819,697) 99.6%

               404,473,736  
 

Other Assets, less Liabilities 0.4%

               1,428,318  
              

 

 

 
 

Net Assets 100.0%

             $ 405,902,054  
              

 

 

 

See Abbreviations on page 69.

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 registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. At September 30, 2017, the aggregate value of these securities was $4,893,149, representing 1.2% of net assets.

cVariable rate securities. The rate shown represents the yield at period end.

 

libertyshares.com   The accompanying notes are an integral part of these financial statements.    |   Semiannual Report     29  


FRANKLIN TEMPLETON ETF TRUST

 

Financial Highlights

 

Franklin LibertyQ Global Dividend ETF

 

     Six Months Ended
September 30, 2017
(unaudited)
     Year Ended
March 31, 2017a
 
Per share operating performance
(for a share outstanding throughout the period)
 

Net asset value, beginning of period

  $ 27.31      $ 25.43  
 

 

 

 
Income from investment operationsb:  

Net investment incomec

    0.44        0.67  

Net realized and unrealized gains (losses)

    0.99        1.79  
 

 

 

 

Total from investment operations

    1.43        2.46  
 

 

 

 

Less distributions from net investment income

    (0.62      (0.58
 

 

 

 

Net asset value, end of period

  $ 28.12      $ 27.31  
 

 

 

 

Total returnd

    5.25%        9.79%  
Ratios to average net assetse  

Expenses before waiver and payments by affiliates

    0.97%        0.98%  

Expenses net of waiver and payments by affiliates

    0.45%        0.45%  

Net investment income

    3.16%        3.11%  
Supplemental data  

Net assets, end of period (000’s)

    $16,870        $27,306  

Portfolio turnover ratef

    23.62%        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 of 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 excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any.

 

30    Semiannual Report   |    The accompanying notes are an integral part of these financial statements.   libertyshares.com


FRANKLIN TEMPLETON ETF TRUST

 

Statement of Investments, September 30, 2017 (unaudited)

 

Franklin LibertyQ Global Dividend ETF

 

           Industry        Shares        Value  
    Common Stocks 97.0%  
    Australia 9.5%  
 

Amcor Ltd.

     Containers & Packaging          14,124        $ 168,563  
 

Challenger Ltd.

     Diversified Financial Services          7,275          71,069  
 

Commonwealth Bank of Australia

     Banks          6,264          369,857  
 

Flight Centre Travel Group Ltd.

     Hotels, Restaurants & Leisure          795          28,077  
 

Macquarie Group Ltd.

     Capital Markets          2,889          206,102  
 

Wesfarmers Ltd.

     Food & Staples Retailing          11,205          363,374  
 

Westpac Banking Corp.

     Banks          15,867          397,405  
              

 

 

 
                 1,604,447  
              

 

 

 
    Belgium 0.4%  
 

Proximus SADP

     Diversified Telecommunication Services          2,103          72,484  
              

 

 

 
    Brazil 2.3%  
 

Ambev SA

     Beverages          58,280          387,655  
              

 

 

 
    Canada 10.0%  
 

Bank of Nova Scotia

     Banks          5,925          379,950  
 

Canadian Imperial Bank of Commerce

     Banks          4,245          370,548  
 

IGM Financial Inc.

     Capital Markets          1,335          44,769  
 

Royal Bank of Canada

     Banks          4,809          371,216  
 

TELUS Corp.

     Diversified Telecommunication Services          2,058          73,852  
 

The Toronto-Dominion Bank

     Banks          7,071          397,184  
 

Vermilion Energy Inc.

     Oil, Gas & Consumable Fuels          1,551          55,001  
              

 

 

 
                 1,692,520  
              

 

 

 
    Denmark 0.2%  
 

Tryg AS

     Insurance          1,164          26,887  
              

 

 

 
    Finland 1.4%  
 

Elisa OYJ

     Diversified Telecommunication Services          1,278          55,025  
 

Kone OYJ, B

     Machinery          2,316          122,661  
 

Nokian Renkaat OYJ

     Auto Components          1,437          63,927  
              

 

 

 
                 241,613  
              

 

 

 
    France 2.1%  
 

CNP Assurances

     Insurance          1,335          31,296  
 

Sanofi

     Pharmaceuticals          3,336          331,320  
              

 

 

 
                 362,616  
              

 

 

 
    Germany 1.9%  
 

Deutsche Boerse AG

     Capital Markets          1,590          172,387  
 

Hannover Rueck SE

     Insurance          450          54,236  
 

Hugo Boss AG

     Textiles, Apparel & Luxury Goods          1,023          90,209  
              

 

 

 
                 316,832  
              

 

 

 
    Hong Kong 0.4%  
 

Sands China Ltd.

     Hotels, Restaurants & Leisure          13,200          68,698  
              

 

 

 
    Japan 4.0%  
 

Daito Trust Construction Co. Ltd.

     Real Estate Management & Development          1,400          254,963  
 

NTT DoCoMo Inc.

     Wireless Telecommunication Services          13,500          308,282  
 

Resona Holdings Inc.

     Banks          22,200          113,993  
              

 

 

 
                 677,238  
              

 

 

 
    Qatar 0.5%  
 

Qatar National Bank SAQ

     Banks          2,544          85,248  
              

 

 

 
    Singapore 1.6%  
 

SATS Ltd.

     Transportation Infrastructure          6,900          23,424  
 

Singapore Telecommunications Ltd.

     Diversified Telecommunication Services          87,900          238,140  
              

 

 

 
                 261,564  
              

 

 

 

 

libertyshares.com   Semiannual Report     31  


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Global Dividend ETF (continued)

 

           Industry        Shares        Value  
    Common Stocks (continued)  
    South Africa 2.2%  
 

Barclays Africa Group Ltd.

     Banks          5,022        $ 51,698  
 

FirstRand Ltd.

     Diversified Financial Services          33,579          129,392  
 

Rand Merchant Investment Holdings Ltd.

     Insurance          3,984          12,236  
 

RMB Holdings Ltd.

     Diversified Financial Services          9,813          46,149  
 

Sanlam Ltd.

     Insurance          12,201          61,138  
 

The Spar Group Ltd.

     Food & Staples Retailing          2,604          32,222  
 

Truworths International Ltd.

     Specialty Retail          6,672          38,172  
              

 

 

 
                 371,007  
              

 

 

 
    Spain 0.5%  
 

Red Electrica Corp. SA

     Electric Utilities          3,699          77,751  
              

 

 

 
    Sweden 3.7%  
 

Atlas Copco AB

     Machinery          5,013          193,952  
 

Hennes & Mauritz AB, B

     Specialty Retail          13,479          348,438  
 

Skanska AB, B

     Construction & Engineering          3,705          85,653  
              

 

 

 
                 628,043  
              

 

 

 
    Switzerland 5.5%  
 

Novartis AG

     Pharmaceuticals          4,074          349,044  
 

Roche Holding AG

     Pharmaceuticals          1,200          306,573  
 

Zurich Insurance Group AG

     Insurance          879          268,351  
              

 

 

 
                 923,968  
              

 

 

 
    Taiwan 0.3%  
 

Feng Tay Enterprise Co. Ltd.

     Textiles, Apparel & Luxury Goods          6,600          30,036  
 

Phison Electronics Corp.

     Semiconductors & Semiconductor Equipment          1,000          11,872  
 

Vanguard International Semiconductor Corp.

     Semiconductors & Semiconductor Equipment          9,000          15,522  
              

 

 

 
                 57,430  
              

 

 

 
    United Arab Emirates 0.1%  
 

Aldar Properties PJSC

     Real Estate Management & Development          32,058          20,338  
              

 

 

 
    United Kingdom 14.1%  
 

BAE Systems PLC

     Aerospace & Defense          26,754          226,674  
 

British American Tobacco PLC

     Tobacco          4,689          293,915  
 

BT Group PLC

     Diversified Telecommunication Services          85,524          325,756  
 

GlaxoSmithKline PLC

     Pharmaceuticals          15,372          306,986  
 

IMI PLC

     Machinery          3,153          52,582  
 

Marks & Spencer Group PLC

     Multiline Retail          17,340          82,216  
 

Relx NV

     Professional Services          12,717          270,763  
 

Smiths Group PLC

     Industrial Conglomerates          3,471          73,439  
 

Tate & Lyle PLC

     Food Products          3,681          32,027  
 

Unilever NV, IDR

     Personal Products          5,985          354,056  
 

Unilever PLC

     Personal Products          6,123          354,802  
              

 

 

 
                 2,373,216  
              

 

 

 
    United States 36.3%  
 

Altria Group Inc.

     Tobacco          4,644          294,523  
 

Bristol-Myers Squibb Co.

     Pharmaceuticals          6,123          390,280  
 

Cincinnati Financial Corp.

     Insurance          1,116          85,452  
 

Clorox Co.

     Household Products          1,908          251,684  
 

Darden Restaurants Inc.

     Hotels, Restaurants & Leisure          1,395          109,898  
 

Eli Lilly & Co.

     Pharmaceuticals          4,248          363,374  
 

Garmin Ltd.

     Household Durables          984          53,107  
 

General Mills Inc.

     Food Products          3,579          185,249  
 

H&R Block Inc.

     Diversified Consumer Services          2,130          56,402  
 

Hasbro Inc.

     Leisure Equipment & Products          1,227          119,841  
 

Intel Corp.

     Semiconductors & Semiconductor Equipment          9,510          362,141  

 

32    Semiannual Report   libertyshares.com


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Global Dividend ETF (continued)

 

           Industry        Shares        Value  
    Common Stocks (continued)  
    United States (continued)  
 

Johnson & Johnson

     Pharmaceuticals          2,595        $ 337,376  
 

Kimberly-Clark Corp.

     Household Products          2,631          309,616  
 

Las Vegas Sands Corp.

     Hotels, Restaurants & Leisure          2,487          159,566  
 

Leggett & Platt Inc.

     Household Durables          2,079          99,231  
 

Lockheed Martin Corp.

     Aerospace & Defense          1,209          375,141  
 

LyondellBasell Industries NV, A

     Chemicals          3,177          314,682  
 

Maxim Integrated Products Inc.

     Semiconductors & Semiconductor Equipment          3,657          174,475  
 

McDonald’s Corp.

     Hotels, Restaurants & Leisure          2,229          349,240  
 

Merck & Co. Inc.

     Pharmaceuticals          5,181          331,739  
 

Microchip Technology Inc.

     Semiconductors & Semiconductor Equipment          1,689          151,638  
 

Paychex Inc.

     IT Services          4,893          293,384  
 

Philip Morris International Inc.

     Tobacco          2,868          318,377  
 

The Procter & Gamble Co.

     Household Products          3,813          346,907  
 

Seagate Technology PLC

     Technology Hardware, Storage & Peripherals          442          14,661  
 

Sysco Corp.

     Food & Staples Retailing          4,959          267,538  
              

 

 

 
                 6,115,522  
              

 

 

 
 

Total Common Stocks (Cost $14,962,667)

               16,365,077  
              

 

 

 
    Preferred Stocks 2.5%  
    Brazil 2.5%  
a  

Itau Unibanco Holding SA, 4.208%, pfd.

     Banks          30,600          419,364  
              

 

 

 
 

Total Investments (Cost $15,190,315) 99.5%

               16,784,441  
 

Other Assets, less Liabilities 0.5%

               85,707  
              

 

 

 
 

Net Assets 100.0%

             $ 16,870,148  
              

 

 

 

 

 

See Abbreviations on page 69.

aVariable rate security. The rate shown represents the yield at period end.

 

libertyshares.com   The accompanying notes are an integral part of these financial statements.    |   Semiannual Report     33  


FRANKLIN TEMPLETON ETF TRUST

 

Financial Highlights

 

Franklin LibertyQ Global Equity ETF

 

     Six Months Ended
September 30, 2017
(unaudited)
     Year Ended
March 31, 2017a
 
Per share operating performance
(for a share outstanding throughout the period)
 

Net asset value, beginning of period

  $ 27.18      $ 25.32  
 

 

 

 
Income from investment operationsb:  

Net investment incomec

    0.41        0.56  

Net realized and unrealized gains (losses)

    1.93        1.92  
 

 

 

 

Total from investment operations

    2.34        2.48  
 

 

 

 

Less distributions from net investment income

    (0.32      (0.62
 

 

 

 

Net asset value, end of period

  $ 29.20      $ 27.18  
 

 

 

 

Total returnd

    8.68%        9.95%  
Ratios to average net assetse  

Expenses before waiver and payments by affiliates

    1.25%        1.04%  

Expenses net of waiver and payments by affiliates

    0.35%        0.35%  

Net investment income

    2.94%        2.60%  
Supplemental data  

Net assets, end of period (000’s)

    $17,522        $21,744  

Portfolio turnover ratef

    15.09%        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 of 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 excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any.

 

34    Semiannual Report   |    The accompanying notes are an integral part of these financial statements.   libertyshares.com


FRANKLIN TEMPLETON ETF TRUST

 

Statement of Investments, September 30, 2017 (unaudited)

 

Franklin LibertyQ Global Equity ETF

 

           Industry      Shares        Value  
    Common Stocks and Other Equity Interests 98.1%  
    Australia 4.1%  
 

AGL Energy Ltd.

     Multi-Utilities        1,206        $ 22,115  
 

Amcor Ltd.

     Containers & Packaging        2,325          27,748  
 

Aristocrat Leisure Ltd.

     Hotels, Restaurants & Leisure        1,116          18,389  
 

Aurizon Holdings Ltd.

     Road & Rail        3,441          13,230  
 

Australia & New Zealand Banking Group Ltd.

     Banks        3,339          77,550  
 

Bluescope Steel Ltd.

     Metals & Mining        633          5,449  
 

Caltex Australia Ltd.

     Oil, Gas & Consumable Fuels        498          12,543  
 

Cimic Group Ltd.

     Construction & Engineering        162          5,620  
 

Cochlear Ltd.

     Health Care Equipment & Supplies        156          19,488  
 

Crown Resorts Ltd.

     Hotels, Restaurants & Leisure        519          4,606  
 

CSL Ltd.

     Biotechnology        1,017          106,899  
 

Dexus

     Equity Real Estate Investment Trusts (REITs      2,784          20,752  
 

Flight Centre Travel Group Ltd.

     Hotels, Restaurants & Leisure        117          4,132  
 

Fortescue Metals Group Ltd.

     Metals & Mining        2,421          9,764  
 

Goodman Group

     Equity Real Estate Investment Trusts (REITs      2,889          18,679  
 

GPT Group

     Equity Real Estate Investment Trusts (REITs      6,474          25,196  
 

Harvey Norman Holdings Ltd.

     Multiline Retail        1,728          5,261  
 

James Hardie Industries PLC, CDI

     Construction Materials        513          7,133  
 

Macquarie Group Ltd.

     Capital Markets        429          30,605  
 

Medibank Private Ltd.

     Insurance        6,564          15,039  
 

Mirvac Group

     Equity Real Estate Investment Trusts (REITs      9,396          16,883  
 

National Australia Bank Ltd.

     Banks        2,262          55,909  
 

Newcrest Mining Ltd.

     Metals & Mining        957          15,784  
 

Qantas Airways Ltd.

     Airlines        1,086          4,968  
 

REA Group Ltd.

     Media        117          6,151  
 

Sonic Healthcare Ltd.

     Health Care Providers & Services        696          11,419  
 

Tabcorp Holdings Ltd.

     Hotels, Restaurants & Leisure        1,512          5,066  
 

Tatts Group Ltd.

     Hotels, Restaurants & Leisure        2,868          8,956  
 

TPG Telecom Ltd.

     Diversified Telecommunication Services        1,626          6,213  
 

Vicinity Centres

     Equity Real Estate Investment Trusts (REITs      12,333          25,741  
 

Wesfarmers Ltd.

     Food & Staples Retailing        2,148          69,659  
 

Woolworths Ltd.

     Food & Staples Retailing        2,334          46,169  
            

 

 

 
               723,116  
            

 

 

 
    Austria 0.1%  
 

OMV AG

     Oil, Gas & Consumable Fuels        243          14,160  
            

 

 

 
    Belgium 0.1%  
 

Colruyt SA

     Food & Staples Retailing        153          7,838  
 

Proximus SADP

     Diversified Telecommunication Services        312          10,754  
            

 

 

 
               18,592  
            

 

 

 
    Bermuda 0.1%  
 

Axis Capital Holdings Ltd.

     Insurance        195          11,175  
            

 

 

 
    Brazil 0.7%  
 

Ambev SA

     Beverages        9,300          61,860  
 

BB Seguridade Participacoes SA

     Insurance        1,614          14,609  
 

Cielo SA

     IT Services        2,152          14,954  
 

Companhia de Saneamento Basico do Estado de Sao Paulo

     Water Utilities        300          3,156  
 

EDP-Energias do Brasil SA

     Electric Utilities        621          2,972  
 

Engie Brasil SA

     Independent Power and Renewable Electricity Producers        309          3,541  
 

Fibria Celulose SA

     Paper & Forest Products        325          4,403  
 

Odontoprev SA

     Health Care Providers & Services        516          2,517  
 

Qualicorp SA

     Health Care Providers & Services        362          4,337  
 

Transmissora Alianca de Energia Eletrica SA

     Electric Utilities        300          2,110  
            

 

 

 
               114,459  
            

 

 

 

 

libertyshares.com   Semiannual Report     35  


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 3.8%  
 

Agrium Inc.

     Chemicals        228        $ 24,378  
 

Alimentation Couche-Tard Inc., B

     Food & Staples Retailing        750          34,122  
 

BCE Inc.

     Diversified Telecommunication Services        303          14,163  
 

Canadian Imperial Bank of Commerce

     Banks        597          52,112  
 

Canadian National Railway Co.

     Road & Rail        1,275          105,393  
 

CCL Industries Inc., B

     Containers & Packaging        270          13,035  
 

CI Financial Corp.

     Capital Markets        456          9,950  
 

Constellation Software Inc.

     Software        48          26,127  
 

Dollarama Inc.

     Multiline Retail        243          26,528  
 

First Capital Realty Inc.

     Real Estate Management & Development        198          3,116  
 

Gildan Activewear Inc.

     Textiles, Apparel & Luxury Goods        453          14,123  
 

H&R Real Estate Investment Trust

     Equity Real Estate Investment Trusts (REITs      1,053          18,136  
 

The Jean Coutu Group (PJC) Inc.

     Food & Staples Retailing        156          3,031  
 

Linamar Corp.

     Auto Components        93          5,662  
 

Magna International Inc.

     Auto Components        789          42,010  
 

Metro Inc., A

     Food & Staples Retailing        456          15,645  
 

RioCan REIT

     Equity Real Estate Investment Trusts (REITs      1,314          25,142  
 

Rogers Communications Inc., B

     Wireless Telecommunication Services        666          34,262  
 

Saputo Inc.

     Food Products        471          16,265  
 

Shaw Communications Inc.

     Media        762          17,499  
 

Smart REIT

     Equity Real Estate Investment Trusts (REITs      924          21,751  
 

TELUS Corp.

     Diversified Telecommunication Services        396          14,211  
 

The Toronto-Dominion Bank

     Banks        2,160          121,329  
            

 

 

 
               657,990  
            

 

 

 
    Chile 0.1%  
 

Aguas Andinas SA, A

     Water Utilities        6,588          4,197  
 

Enel Americas SA

     Electric Utilities        51,675          10,596  
 

Enel Chile SA

     Electric Utilities        35,553          4,341  
 

Enel Generacion Chile SA

     Independent Power and Renewable Electricity Producers        3,927          3,434  
            

 

 

 
               22,568  
            

 

 

 
    China 3.5%  
 

AAC Technologies Holdings Inc.

     Electronic Equipment, Instruments & Components        1,500          25,196  
 

Agricultural Bank of China Ltd., H

     Banks        42,000          18,820  
 

Bank of China Ltd., H

     Banks        135,000          66,543  
 

Bank of Communications Co. Ltd.

     Banks        9,000          6,568  
 

China Construction Bank Corp., H

     Banks        144,000          119,467  
 

China Everbright Bank Co. Ltd., H

     Banks        9,000          4,160  
 

China Mobile Ltd.

     Wireless Telecommunication Services        10,500          106,402  
 

China Resources Power Holdings Co. Ltd.

     Independent Power and Renewable Electricity Producers        6,000          10,831  
 

Chongqing Changan Automobile Co. Ltd., B

     Automobiles        3,000          3,968  
 

Chongqing Rural Commercial Bank Co. Ltd., H

     Banks        9,000          5,704  
 

Country Garden Holdings Co. Ltd.

     Real Estate Management & Development        9,000          14,311  
 

Dongfeng Motor Group Co. Ltd., H

     Automobiles        6,000          7,928  
 

Fuyao Group Glass Industries Co. Ltd., H

     Auto Components        1,200          4,356  
 

Great Wall Motor Co. Ltd., H

     Automobiles        6,000          7,375  
 

Guangdong Investment Ltd.

     Water Utilities        6,000          8,557  
 

Huaneng Power International Inc., H

     Independent Power and Renewable Electricity Producers        6,000          3,710  
 

Industrial and Commercial Bank of China Ltd., H

     Banks        126,000          93,564  
 

Longfor Properties Co. Ltd.

     Real Estate Management & Development        4,500          11,350  
 

NetEase Inc., ADR

     Internet Software & Services        120          31,657  
 

Sino-Ocean Land Holdings Ltd.

     Real Estate Management & Development        10,500          7,004  
 

Sinopec Engineering Group Co. Ltd.

     Construction & Engineering        3,000          2,646  
 

Sinopec Shanghai Petrochemical Co. Ltd., H

     Chemicals        6,000          3,572  

 

36    Semiannual Report   libertyshares.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)  
 

Sunac China Holdings Ltd.

     Real Estate Management & Development        3,000        $ 13,731  
 

Sunny Optical Technology Group Co. Ltd.

     Electronic Equipment, Instruments & Components        1,000          15,901  
a  

Yum China Holdings Inc.

     Hotels, Restaurants & Leisure        405          16,188  
a  

YY Inc., ADR

     Internet Software & Services        42          3,645  
            

 

 

 
               613,154  
            

 

 

 
    Colombia 0.0%  
 

Grupo Inversiones Suramericcana SA.

     Diversified Financial Services        99          1,378  
            

 

 

 
    Czech Republic 0.0%  
 

Moneta Money Bank AS

     Banks        236          831  
 

O2 Czech Republic AS

     Diversified Telecommunication Services        249          3,058  
            

 

 

 
               3,889  
            

 

 

 
    Denmark 1.2%  
 

Coloplast AS, B

     Health Care Equipment & Supplies        291          23,623  
 

Novo Nordisk AS, B

     Pharmaceuticals        4,080          195,094  
            

 

 

 
               218,717  
            

 

 

 
    Finland 0.4%  
 

Elisa OYJ

     Diversified Telecommunication Services        252          10,850  
 

Kone OYJ, B

     Machinery        618          32,731  
 

Neste Oil OYJ

     Oil, Gas & Consumable Fuels        201          8,780  
 

Nokian Renkaat OYJ

     Auto Components        285          12,679  
 

Orion OYJ

     Pharmaceuticals        288          13,367  
            

 

 

 
               78,407  
            

 

 

 
    France 0.7%  
 

Cie Generale des Etablissements Michelin, B

     Auto Components        321          46,867  
 

CNP Assurances

     Insurance        312          7,314  
 

Hermes International

     Textiles, Apparel & Luxury Goods        45          22,692  
 

SCOR SE

     Insurance        288          12,078  
 

Unibail-Rodamco SE

     Equity Real Estate Investment Trusts (REITs      117          28,459  
            

 

 

 
               117,410  
            

 

 

 
    Germany 0.3%  
b  

Covestro AG, 144A

     Chemicals        180          15,481  
 

Deutsche Lufthansa AG

     Airlines        447          12,424  
 

Hugo Boss AG

     Textiles, Apparel & Luxury Goods        135          11,904  
 

TUI AG

     Hotels, Restaurants & Leisure        396          6,726  
            

 

 

 
               46,535  
            

 

 

 
    Hong Kong 1.0%  
 

ASM Pacific Technology Ltd.

     Semiconductors & Semiconductor Equipment        300          4,321  
 

CK Infrastructure Holdings Ltd.

     Electric Utilities        1,500          12,905  
 

CLP Holdings Ltd.

     Electric Utilities        3,000          30,746  
 

Hongkong Land Holdings Ltd.

     Real Estate Management & Development        1,500          10,800  
 

Hysan Development Co. Ltd.

     Real Estate Management & Development        3,000          14,115  
a  

I-CABLE Communications Ltd.

     Media        831          27  
 

Kerry Properties Ltd.

     Real Estate Management & Development        1,500          6,213  
 

Link REIT

     Equity Real Estate Investment Trusts (REITs      3,000          24,313  
 

MGM China Holdings Ltd.

     Hotels, Restaurants & Leisure        2,400          5,752  
 

NWS Holdings Ltd.

     Industrial Conglomerates        3,000          5,846  
 

Sands China Ltd.

     Hotels, Restaurants & Leisure        4,800          24,981  
 

Sino Land Co. Ltd.

     Real Estate Management & Development        6,000          10,539  
 

The Wharf Holdings Ltd.

     Real Estate Management & Development        3,000          26,733  
 

Yue Yuen Industrial Holdings Ltd.

     Textiles, Apparel & Luxury Goods        1,500          5,704  
            

 

 

 
               182,995  
            

 

 

 

 

libertyshares.com   Semiannual Report     37  


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Global Equity ETF (continued)

 

           Industry        Shares        Value  
    Common Stocks and Other Equity Interests (continued)  
    Hungary 0.1%  
 

MOL Hungarian Oil and Gas PLC

     Oil, Gas & Consumable Fuels          672        $ 7,672  
 

Richter Gedeon Nyrt

     Pharmaceuticals          228          5,683  
              

 

 

 
                 13,355  
              

 

 

 
    Indonesia 0.4%  
 

Hanjaya Mandala Sampoerna Tbk PT

     Tobacco          37,200          10,661  
 

PT Telekom Indonesia (Persero) Tbk

     Diversified Telecommunication Services          102,600          35,650  
 

Unilever Indonesia Tbk PT

     Household Products          3,300          11,999  
 

United Tractors Tbk PT

     Oil, Gas & Consumable Fuels          3,300          7,840  
              

 

 

 
                 66,150  
              

 

 

 
    Israel 0.1%  
 

Azrieli Group Ltd.

     Real Estate Management & Development          69          3,832  
a  

Check Point Software Technologies Ltd.

     Software          141          16,077  
 

Mizrahi Tefahot Bank Ltd.

     Banks          255          4,572  
              

 

 

 
                 24,481  
              

 

 

 
    Italy 0.3%  
 

Ferrari NV

     Automobiles          114          12,601  
c  

Poste Italiane SpA, Reg S

     Insurance          1,218          8,971  
 

Recordati SpA

     Pharmaceuticals          96          4,426  
 

Snam SpA

     Oil, Gas & Consumable Fuels          4,050          19,515  
              

 

 

 
                 45,513  
              

 

 

 
    Japan 4.2%  
 

ABC-Mart Inc.

     Specialty Retail          300          15,831  
 

Astellas Pharma Inc.

     Pharmaceuticals          4,500          57,227  
 

Bandai Namco Holdings Inc.

     Leisure Equipment & Products          300          10,287  
 

Bridgestone Corp.

     Auto Components          1,200          54,433  
 

CANON Inc.

     Technology Hardware, Storage & Peripherals          1,800          61,485  
 

Concordia Financial Group Ltd.

     Banks          1,500          7,410  
 

Daito Trust Construction Co. Ltd.

     Real Estate Management & Development          200          36,423  
 

Fuji Heavy Industries Ltd.

     Automobiles          1,500          54,102  
 

Hitachi Chemical Co. Ltd.

     Chemicals          300          8,222  
 

Hoya Corp.

     Health Care Equipment & Supplies          600          32,381  
 

Iida Group Holdings Co. Ltd.

     Household Durables          300          5,346  
 

Isuzu Motors Ltd.

     Automobiles          1,200          15,895  
 

Japan Airlines Co. Ltd.

     Airlines          300          10,149  
 

KDDI Corp.

     Wireless Telecommunication Services          3,300          86,982  
 

Kuraray Co. Ltd.

     Chemicals          900          16,822  
 

Lawson Inc.

     Food & Staples Retailing          300          19,855  
 

Mitsubishi Gas Chemical Co. Inc.

     Chemicals          300          7,028  
 

Nippon Telegraph & Telephone Corp.

     Diversified Telecommunication Services          1,200          54,976  
 

Nitori Co. Ltd.

     Specialty Retail          100          14,294  
 

Nitto Denko Corp.

     Chemicals          300          25,004  
 

NTT DoCoMo Inc.

     Wireless Telecommunication Services          3,000          68,507  
 

Obayashi Corp.

     Construction & Engineering          1,200          14,381  
 

Resona Holdings Inc.

     Banks          4,500          23,107  
 

Start Today Co. Ltd.

     Internet & Direct Marketing Retail          300          9,501  
 

Sumitomo Rubber Industries Ltd.

     Auto Components          600          10,991  
 

Sundrug Co. Ltd.

     Food & Staples Retailing          300          12,420  
              

 

 

 
                 733,059  
              

 

 

 
    Malaysia 0.3%  
 

AirAsia Bhd.

     Airlines          1,500          1,225  
 

Astro Malaysia Holdings Bhd.

     Media          5,100          3,406  
 

Digi.com Bhd.

     Wireless Telecommunication Services          8,100          9,400  
 

Hartalega Holdings Bhd.

     Health Care Equipment & Supplies          1,500          2,472  

 

38    Semiannual Report   libertyshares.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)  
    Malaysia (continued)  
 

Malayan Banking Bhd.

     Banks          3,600        $ 8,125  
 

Maxis Bhd.

     Wireless Telecommunication Services          2,400          3,297  
 

Petronas Chemicals Group Bhd.

     Chemicals          5,100          8,805  
 

Petronas Dagangan Bhd.

     Oil, Gas & Consumable Fuels          600          3,456  
 

Westports Holdings Bhd.

     Transportation Infrastructure          4,800          4,331  
              

 

 

 
                 44,517  
              

 

 

 
    Mexico 0.2%  
 

Gruma SAB de CV

     Food Products          651          9,544  
 

Grupo Aeroportuario del Pacifico SAB de CV

     Transportation Infrastructure          633          6,498  
 

Wal-Mart de Mexico SAB de CV, V

     Food & Staples Retailing          8,787          20,178  
              

 

 

 
                 36,220  
              

 

 

 
    Netherlands 0.1%  
 

Aegon NV

     Insurance          2,760          16,079  
              

 

 

 
    New Zealand 0.1%  
 

Fletcher Building Ltd.

     Construction Materials          1,254          7,243  
 

Spark New Zealand Ltd.

     Diversified Telecommunication Services          5,160          13,615  
              

 

 

 
                 20,858  
              

 

 

 
    Norway 0.3%  
a  

Marine Harvest ASA

     Food Products          600          11,871  
 

Telenor ASA

     Diversified Telecommunication Services          1,173          24,815  
 

Yara International ASA

     Chemicals          306          13,712  
              

 

 

 
                 50,398  
              

 

 

 
    Pakistan 0.0%  
 

MCB Bank Ltd.

     Banks          1,800          3,538  
 

Oil & Gas Development Co. Ltd.

     Oil, Gas & Consumable Fuels          3,000          4,224  
              

 

 

 
                 7,762  
              

 

 

 
    Philippines 0.0%  
 

DMCI Holdings Inc.

     Industrial Conglomerates          6,300          1,935  
 

Globe Telecom Inc.

     Wireless Telecommunication Services          60          2,421  
              

 

 

 
                 4,356  
              

 

 

 
    Poland 0.2%  
a  

PGE Polska Grupa Energetyczna SA

     Electric Utilities          1,788          6,526  
 

Polski Koncern Naftowy Orlen SA

     Oil, Gas & Consumable Fuels          567          18,937  
 

Polskie Gornictwo Naftowe i Gazownictwo SA

     Oil, Gas & Consumable Fuels          1,647          3,069  
a  

Tauron Polska Energia SA

     Electric Utilities          1,482          1,525  
              

 

 

 
                 30,057  
              

 

 

 
    Qatar 0.1%  
 

Barwa Real Estate Co.

     Real Estate Management & Development          99          872  
a  

The Commercial Bank QSC

     Banks          2          19  
 

Doha Bank QSC

     Banks          380          3,027  
 

Industries Qatar QSC

     Industrial Conglomerates          345          8,688  
 

Qatar Electricity & Water Co. QSC

     Multi-Utilities          90          4,321  
              

 

 

 
                 16,927  
              

 

 

 
    Russia 1.3%  
 

Alrosa PJSC

     Metals & Mining          9,384          13,314  
 

Federal Hydrogenerating Co.

     Electric Utilities          350,562          5,235  
 

Gazprom PJSC

     Oil, Gas & Consumable Fuels          21,822          46,205  
 

Inter RAO UES PJSC

     Electric Utilities          77,838          5,051  
 

LUKOIL PJSC

     Oil, Gas & Consumable Fuels          921          48,956  
 

MMC Norilsk Nickel PJSC

     Metals & Mining          126          21,758  

 

libertyshares.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)  
    Russia (continued)  
 

Mobile TeleSystems PJSC, ADR

     Wireless Telecommunication Services        1,287        $ 13,436  
 

NLMK PJSC

     Metals & Mining        1,764          4,042  
c  

Novatek PJSC, GDR, Reg S

     Oil, Gas & Consumable Fuels        156          18,299  
c  

PhosAgro PJSC, GDR, Reg S

     Chemicals        357          5,087  
 

Rosneft PJSC

     Oil, Gas & Consumable Fuels        2,280          12,642  
 

Severstal PJSC

     Metals & Mining        432          6,530  
 

Surgutneftegas OAO

     Oil, Gas & Consumable Fuels        23,730          12,123  
 

Tatneft PAO

     Oil, Gas & Consumable Fuels        2,970          21,102  
            

 

 

 
               233,780  
            

 

 

 
    Singapore 0.5%  
 

CapitaLand Commercial Trust

     Equity Real Estate Investment Trusts (REITs      3,900          4,753  
a  

CapitaLand Commercial Trust, rts., 10/19/17

     Equity Real Estate investment Trusts (REITs      647          139  
 

CapitaLand Mall Trust

     Equity Real Estate Investment Trusts (REITs      4,500          6,628  
 

SATS Ltd.

     Transportation Infrastructure        1,500          5,092  
 

Singapore Airlines Ltd.

     Airlines        900          6,654  
 

Singapore Exchange Ltd.

     Capital Markets        2,100          11,428  
 

Singapore Technologies Engineering Ltd.

     Aerospace & Defense        2,700          6,840  
 

Singapore Telecommunications Ltd.

     Diversified Telecommunication Services        15,600          42,275  
 

StarHub Ltd.

     Wireless Telecommunication Services        2,700          5,170  
 

Yangzijiang Shipbuilding Holdings Ltd.

     Machinery        5,100          5,371  
            

 

 

 
               94,350  
            

 

 

 
    South Africa 0.3%  
 

Bidvest Group Ltd.

     Industrial Conglomerates        510          6,522  
 

Fortress Income Fund Ltd., A

     Equity Real Estate Investment Trusts (REITs      2,358          3,012  
 

Mr. Price Group Ltd.

     Specialty Retail        609          8,120  
 

Pick ‘N Pay Stores Ltd.

     Food & Staples Retailing        921          3,930  
 

Tiger Brands Ltd.

     Food Products        234          6,540  
 

Truworths International Ltd.

     Specialty Retail        1,290          7,380  
 

Vodacom Group Ltd.

     Wireless Telecommunication Services        927          11,063  
            

 

 

 
               46,567  
            

 

 

 
    South Korea 2.7%  
 

BNK Financial Group Inc.

     Banks        192          1,676  
 

Coway Co. Ltd.

     Household Durables        129          10,587  
 

DGB Financial Group Inc.

     Banks        318          2,915  
 

Dongbu Insurance Co. Ltd.

     Insurance        81          5,163  
 

Hana Financial Group Inc.

     Banks        432          17,859  
 

Hankook Tire Co. Ltd.

     Auto Components        138          7,253  
 

Hanon Systems

     Auto Components        504          5,545  
 

Hanssem Co. Ltd.

     Household Durables        36          4,762  
 

Hanwha Life Insurance Co. Ltd.

     Insurance        288          1,722  
 

Hyundai Marine & Fire Insurance Co. Ltd.

     Insurance        114          4,509  
 

Hyundai Mobis Co. Ltd.

     Auto Components        135          28,288  
 

Industrial Bank of Korea

     Banks        285          3,583  
 

Kangwon Land Inc.

     Hotels, Restaurants & Leisure        225          6,876  
 

KB Financial Group Inc.

     Banks        606          29,682  
 

KT&G Corp.

     Tobacco        273          25,146  
 

LG Display Co. Ltd.

     Electronic Equipment, Instruments & Components        258          6,882  
 

LG Uplus Corp.

     Diversified Telecommunication Services        123          1,434  
 

Lotte Chemical Corp.

     Chemicals        24          7,921  
 

Naver Corp.

     Internet Software & Services        36          23,416  
 

S-1 Corp.

     Commercial Services & Supplies        54          4,206  
 

S-Oil Corp.

     Oil, Gas & Consumable Fuels        90          10,019  
 

Samsung Electronics Co. Ltd.

     Technology Hardware, Storage & Peripherals        75          167,896  
 

SK Hynix Inc.

     Semiconductors & Semiconductor Equipment        1,182          85,553  
 

SK Telecom Co. Ltd.

     Wireless Telecommunication Services        36          8,015  
            

 

 

 
               470,908  
            

 

 

 

 

40    Semiannual Report   libertyshares.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 0.8%  
 

Amadeus IT Group SA, A

     IT Services          645        $ 41,931  
 

Distribuidora Internacional de Alimentacion SA

     Food & Staples Retailing          2,286          13,337  
 

Endesa SA

     Electric Utilities          597          13,463  
 

Industria de Diseno Textil SA

     Specialty Retail          1,965          74,069  
              

 

 

 
                 142,800  
              

 

 

 
    Sweden 0.9%  
 

Electrolux AB, B

     Household Durables          186          6,303  
 

Hennes & Mauritz AB, B

     Specialty Retail          2,241          57,931  
 

ICA Gruppen AB

     Food & Staples Retailing          132          4,950  
 

L E Lundbergforetagen AB, B

     Diversified Financial Services          45          3,589  
 

Nordea Bank AB

     Banks          3,483          47,109  
 

Skanska AB, B

     Construction & Engineering          816          18,865  
 

Swedish Match AB

     Tobacco          573          20,056  
              

 

 

 
                 158,803  
              

 

 

 
    Switzerland 2.0%  
 

EMS-Chemie Holding AG

     Chemicals          24          15,974  
 

Geberit AG

     Building Products          66          31,247  
 

Kuehne + Nagel International AG

     Marine          84          15,566  
 

Partners Group Holding AG

     Capital Markets          39          26,481  
 

Roche Holding AG

     Pharmaceuticals          621          158,651  
 

Straumann Holding AG

     Health Care Equipment & Supplies          9          5,785  
a  

Swiss Life Holding AG

     Insurance          60          21,151  
 

Swiss Re AG

     Insurance          579          52,479  
 

Swisscom AG

     Diversified Telecommunication Services          45          23,077  
              

 

 

 
                 350,411  
              

 

 

 
    Taiwan 2.5%  
 

Asustek Computer Inc.

     Technology Hardware, Storage & Peripherals          1,000          8,228  
 

Catcher Technology Co. Ltd.

     Technology Hardware, Storage & Peripherals          1,000          9,316  
 

Chicony Electronics Co. Ltd.

     Technology Hardware, Storage & Peripherals          3,040          7,218  
 

Chunghwa Telecom Co. Ltd.

     Diversified Telecommunication Services          9,000          31,015  
 

Far EasTone Telecommunications Co. Ltd.

     Wireless Telecommunication Services          3,000          7,133  
 

First Financial Holding Co. Ltd.

     Banks          12,060          7,735  
 

Formosa Petrochemical Corp.

     Oil, Gas & Consumable Fuels          3,000          10,338  
 

Foxconn Technology Co. Ltd.

     Technology Hardware, Storage & Peripherals          3,050          8,801  
 

Hon Hai Precision Industry Co. Ltd.

     Electronic Equipment, Instruments & Components          30,000          103,878  
 

Lite-On Technology Corp.

     Technology Hardware, Storage & Peripherals          6,049          8,638  
 

Ruentex Industries Ltd.

     Textiles, Apparel & Luxury Goods          3,000          4,442  
 

Siliconware Precision Industries Co.

     Semiconductors & Semiconductor Equipment          6,000          9,596  
 

Taiwan Mobile Co. Ltd.

     Wireless Telecommunication Services          6,000          21,369  
 

Taiwan Semiconductor Manufacturing Co. Ltd.

     Semiconductors & Semiconductor Equipment          27,000          192,768  
 

Transcend Information Inc.

     Technology Hardware, Storage & Peripherals          3,000          8,479  
 

Vanguard International Semiconductor Corp.

     Semiconductors & Semiconductor Equipment          3,000          5,174  
              

 

 

 
                 444,128  
              

 

 

 
    Thailand 0.2%  
 

Advanced Info Service PCL, NVDR

     Wireless Telecommunication Services          2,400          13,745  
 

Bumrungrad Hospital PCL, NVDR

     Health Care Providers & Services          600          3,868  
 

Central Pattana PCL, NVDR

     Real Estate Management & Development          2,700          6,315  
 

Delta Electronics Thailand PCL, NVDR

     Electronic Equipment, Instruments & Components          1,800          4,709  
 

Glow Energy PCL, NVDR

     Independent Power and Renewable Electricity Producers          600          1,606  
 

Home Product Center PCL, NVDR

     Specialty Retail          5,700          2,085  
 

IRPC PCL, NVDR

     Oil, Gas & Consumable Fuels          11,100          2,097  

 

libertyshares.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)  
    Thailand (continued)  
 

The Siam Cement PCL, NVDR

     Construction Materials          300        $ 4,498  
 

Thai Oil PCL, NVDR

     Oil, Gas & Consumable Fuels          1,500          4,160  
              

 

 

 
                 43,083  
              

 

 

 
    Turkey 0.2%  
 

Aselsan Elektronik Sanayi ve Ticaret AS

     Aerospace & Defense          282          2,086  
 

BIM Birlesik Magazalar AS

     Food & Staples Retailing          396          8,268  
 

Eregli Demir ve Celik Fabrikalari AS

     Metals & Mining          3,327          7,232  
 

Ford Otomotiv Sanayi AS

     Automobiles          90          1,154  
 

Petkim Petrokimya Holding AS

     Chemicals          1,407          2,366  
 

TAV Havalimanlari Holding AS

     Transportation Infrastructure          282          1,400  
 

Tofas Turk Otomobil Fabrikasi AS

     Automobiles          225          1,954  
 

Tupras-Turkiye Petrol Rafinerileri AS

     Oil, Gas & Consumable Fuels          285          9,745  
 

Turkiye Is Bankasi, C

     Banks          600          1,144  
              

 

 

 
                 35,349  
              

 

 

 
    United Arab Emirates 0.2%  
 

Damac Properties Dubai Co. PJSC

     Real Estate Management & Development          2,124          2,198  
 

Dubai Islamic Bank PJSC

     Banks          1,059          1,744  
 

Emirates Telecommunications Group Co. PJSC

     Diversified Telecommunication Services          2,982          14,047  
 

First Abu Dhabi Bank PJSC

     Banks          2,886          8,015  
              

 

 

 
                 26,004  
              

 

 

 
    United Kingdom 9.4%  
 

3i Group PLC

     Capital Markets          1,371          16,794  
 

Admiral Group PLC

     Insurance          573          13,969  
 

AstraZeneca PLC

     Pharmaceuticals          2,229          148,181  
 

BAE Systems PLC

     Aerospace & Defense          5,721          48,471  
 

Barratt Developments PLC

     Household Durables          1,593          13,133  
 

The Berkeley Group Holdings PLC

     Household Durables          309          15,410  
 

British American Tobacco PLC

     Tobacco          2,511          157,394  
 

BT Group PLC

     Diversified Telecommunication Services          17,364          66,139  
 

Burberry Group PLC

     Textiles, Apparel & Luxury Goods          819          19,339  
 

Capita PLC

     Professional Services          1,062          8,050  
 

Compass Group PLC

     Hotels, Restaurants & Leisure          2,082          44,218  
 

Croda International PLC

     Chemicals          252          12,824  
 

Direct Line Insurance Group PLC

     Insurance          2,733          13,332  
 

easyJet PLC

     Airlines          348          5,682  
 

Experian PLC

     Professional Services          1,290          25,944  
 

GKN PLC

     Auto Components          1,848          8,579  
 

GlaxoSmithKline PLC

     Pharmaceuticals          7,740          154,571  
 

Hargreaves Lansdown PLC

     Capital Markets          537          10,663  
 

HSBC Holdings PLC

     Banks          19,194          189,815  
 

IMI PLC

     Machinery          192          3,202  
 

International Consolidated Airlines Group SA

     Airlines          1,062          8,462  
 

Intertek Group PLC

     Professional Services          255          17,044  
 

Johnson Matthey PLC

     Chemicals          294          13,490  
 

Marks & Spencer Group PLC

     Multiline Retail          3,771          17,880  
 

Mondi PLC

     Paper & Forest Products          462          12,428  
 

Next PLC

     Multiline Retail          426          30,063  
 

Persimmon PLC

     Household Durables          762          26,397  
 

Reckitt Benckiser Group PLC

     Household Products          1,110          101,461  
 

Relx NV

     Professional Services          2,040          43,435  
 

RELX PLC

     Professional Services          2,232          49,021  
 

SSE PLC

     Electric Utilities          2,001          37,504  
 

Tate & Lyle PLC

     Food Products          1,557          13,547  
 

Taylor Wimpey PLC

     Household Durables          3,450          9,049  
 

Unilever NV, IDR

     Personal Products          2,673          158,127  

 

42    Semiannual Report   libertyshares.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 Kingdom (continued)  
 

Unilever PLC

     Personal Products        2,271        $ 131,595  
            

 

 

 
               1,645,213  
            

 

 

 
    United States 54.6%  
 

3M Co.

     Industrial Conglomerates        855          179,464  
 

AbbVie Inc.

     Biotechnology        2,535          225,260  
 

Accenture PLC, A

     IT Services        1,395          188,423  
 

AGNC Investment Corp.

     Mortgage Real Estate Investment Trusts (REITs      726          15,740  
 

Altria Group Inc.

     Tobacco        2,691          170,663  
 

American Airlines Group Inc.

     Airlines        192          9,118  
 

American Electric Power Co. Inc.

     Electric Utilities        723          50,784  
 

AmerisourceBergen Corp.

     Health Care Providers & Services        243          20,108  
 

Annaly Capital Management Inc.

     Mortgage Real Estate Investment Trusts (REITs      2,241          27,318  
 

Apple Inc.

     Technology Hardware, Storage & Peripherals        1,113          171,536  
 

Applied Materials Inc.

     Semiconductors & Semiconductor Equipment        1,149          59,851  
 

AT&T Inc.

     Diversified Telecommunication Services        4,476          175,325  
 

Atmos Energy Corp.

     Gas Utilities        135          11,318  
 

Avery Dennison Corp.

     Containers & Packaging        141          13,866  
 

Baxter International Inc.

     Health Care Equipment & Supplies        525          32,944  
 

Best Buy Co. Inc.

     Specialty Retail        594          33,834  
a  

Biogen Inc.

     Biotechnology        342          107,087  
 

The Boeing Co.

     Aerospace & Defense        921          234,127  
 

Broadridge Financial Solutions Inc.

     IT Services        243          19,639  
 

C.H. Robinson Worldwide Inc.

     Air Freight & Logistics        318          24,200  
 

CA Inc.

     Software        609          20,328  
a  

Cadence Design Systems Inc.

     Software        309          12,196  
 

Carnival Corp.

     Hotels, Restaurants & Leisure        297          19,177  
 

CBOE Holdings Inc.

     Capital Markets        84          9,041  
 

Celanese Corp., A

     Chemicals        108          11,261  
 

Church & Dwight Co. Inc.

     Household Products        528          25,582  
 

Cisco Systems Inc.

     Communications Equipment        5,409          181,905  
 

Clorox Co.

     Household Products        318          41,947  
 

Coach Inc.

     Textiles, Apparel & Luxury Goods        570          22,960  
 

The Coca-Cola Co.

     Beverages        3,987          179,455  
 

Colgate-Palmolive Co.

     Household Products        1,518          110,586  
 

Colony NorthStar Inc., A

     Equity Real Estate Investment Trusts (REITs      1,251          15,713  
 

Consolidated Edison Inc.

     Multi-Utilities        459          37,032  
 

Corning Inc.

     Electronic Equipment, Instruments & Components        870          26,030  
 

Cummins Inc.

     Machinery        255          42,848  
 

Darden Restaurants Inc.

     Hotels, Restaurants & Leisure        231          18,198  
a  

Dell Technologies Inc., V

     Software        234          18,067  
 

Delphi Automotive PLC

     Auto Components        462          45,461  
 

Delta Air Lines Inc.

     Airlines        321          15,479  
 

Dollar General Corp.

     Multiline Retail        414          33,555  
 

Dominos Pizza Inc.

     Hotels, Restaurants & Leisure        60          11,913  
 

DowDuPont Inc.

     Chemicals        1,416          98,030  
 

Dr. Pepper Snapple Group Inc.

     Beverages        513          45,385  
 

Eli Lilly & Co.

     Pharmaceuticals        1,662          142,167  
 

Emerson Electric Co.

     Electrical Equipment        1,092          68,621  
 

Estee Lauder Cos. Inc., A

     Personal Products        360          38,822  
 

Everest Re Group Ltd.

     Insurance        78          17,814  
 

Expeditors International of Washington Inc.

     Air Freight & Logistics        336          20,113  
a  

F5 Networks Inc.

     Communications Equipment        150          18,084  
 

Fastenal Co.

     Trading Companies & Distributors        594          27,075  
 

FirstEnergy Corp.

     Electric Utilities        375          11,561  
 

The Gap Inc.

     Specialty Retail        576          17,009  
 

Garmin Ltd.

     Household Durables        231          12,467  
a  

Gartner Inc., A

     IT Services        90          11,197  

 

libertyshares.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)  
    United States (continued)  
 

General Dynamics Corp.

     Aerospace & Defense          450        $ 92,511  
 

General Motors Co.

     Automobiles          2,382          96,185  
 

Gilead Sciences Inc.

     Biotechnology          2,577          208,789  
 

The Goodyear Tire & Rubber Co.

     Auto Components          357          11,870  
 

H&R Block Inc.

     Diversified Consumer Services          423          11,201  
 

Hasbro Inc.

     Leisure Equipment & Products          192          18,753  
 

The Hershey Co.

     Food Products          429          46,834  
 

The Home Depot Inc.

     Specialty Retail          1,074          175,663  
 

Hormel Foods Corp.

     Food Products          849          27,287  
 

HP Inc.

     Technology Hardware, Storage & Peripherals          2,931          58,503  
 

Huntington Ingalls Industries Inc.

     Aerospace & Defense          60          13,586  
 

Illinois Tool Works Inc.

     Machinery          489          72,352  
 

Ingredion Inc.

     Food Products          159          19,182  
 

Intel Corp.

     Semiconductors & Semiconductor Equipment          4,653          177,186  
 

International Business Machines Corp.

     IT Services          1,200          174,096  
 

International Flavors & Fragrances Inc.

     Chemicals          123          17,578  
 

Intuit Inc.

     Software          573          81,446  
a  

Intuitive Surgical Inc.

     Health Care Equipment & Supplies          63          65,890  
 

J.B. Hunt Transport Services Inc.

     Road & Rail          150          16,662  
 

Jack Henry & Associates Inc.

     IT Services          108          11,101  
 

Johnson & Johnson

     Pharmaceuticals          1,308          170,053  
 

Kimberly-Clark Corp.

     Household Products          750          88,260  
 

KLA-Tencor Corp.

     Semiconductors & Semiconductor Equipment          330          34,980  
 

Kohl’s Corp.

     Multiline Retail          414          18,899  
 

Las Vegas Sands Corp.

     Hotels, Restaurants & Leisure          684          43,885  
 

Lear Corp.

     Auto Components          96          16,616  
 

Lennox International Inc.

     Building Products          48          8,591  
 

Lockheed Martin Corp.

     Aerospace & Defense          528          163,833  
 

Lowe’s Cos. Inc.

     Specialty Retail          1,482          118,471  
 

LyondellBasell Industries NV, A

     Chemicals          828          82,013  
 

Macy’s Inc.

     Multiline Retail          636          13,878  
 

Marsh & McLennan Cos. Inc.

     Insurance          807          67,635  
 

Mastercard Inc., A

     IT Services          1,500          211,800  
 

Maxim Integrated Products Inc.

     Semiconductors & Semiconductor Equipment          546          26,050  
 

McCormick & Co. Inc.

     Food Products          273          28,021  
 

McDonald’s Corp.

     Hotels, Restaurants & Leisure          1,131          177,205  
 

Merck & Co. Inc.

     Pharmaceuticals          2,586          165,582  
a  

Mettler-Toledo International Inc.

     Life Sciences Tools & Services          48          30,056  
a  

Michael Kors Holdings Ltd.

     Textiles, Apparel & Luxury Goods          465          22,250  
 

Microsoft Corp.

     Software          2,586          192,631  
 

MSCI Inc.

     Capital Markets          81          9,469  
 

Nordstrom Inc.

     Multiline Retail          297          14,004  
 

Northrop Grumman Corp.

     Aerospace & Defense          297          85,453  
a  

NVR Inc.

     Household Durables          3          8,565  
 

Packaging Corp. of America

     Containers & Packaging          108          12,385  
 

Paychex Inc.

     IT Services          708          42,452  
 

PepsiCo Inc.

     Beverages          1,620          180,517  
 

Pfizer Inc.

     Pharmaceuticals          4,992          178,214  
 

Philip Morris International Inc.

     Tobacco          1,461          162,186  
 

Pinnacle West Capital Corp.

     Electric Utilities          183          15,474  
 

Polaris Industries Inc.

     Leisure Equipment & Products          138          14,439  
 

The Procter & Gamble Co.

     Household Products          1,893          172,225  
 

Public Service Enterprise Group Inc.

     Multi-Utilities          927          42,874  
 

QUALCOMM Inc.

     Semiconductors & Semiconductor Equipment          2,784          144,323  
 

Raytheon Co.

     Aerospace & Defense          504          94,036  
 

Reinsurance Group of America Inc.

     Insurance          57          7,953  
 

ResMed Inc.

     Health Care Equipment & Supplies          255          19,625  

 

44    Semiannual Report   libertyshares.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)  
 

Robert Half International Inc.

     Professional Services        327        $ 16,461  
 

Rockwell Automation Inc.

     Electrical Equipment        198          35,286  
 

Rockwell Collins Inc.

     Aerospace & Defense        144          18,822  
 

Rollins Inc.

     Commercial Services & Supplies        102          4,706  
 

Ross Stores Inc.

     Specialty Retail        957          61,793  
 

Scripps Networks Interactive Inc., A

     Media        201          17,264  
 

Seagate Technology PLC

     Technology Hardware, Storage & Peripherals        774          25,674  
 

SEI Investments Co.

     Capital Markets        234          14,288  
 

The Sherwin-Williams Co.

     Chemicals        165          59,077  
 

Skyworks Solutions Inc.

     Semiconductors & Semiconductor Equipment        363          36,990  
 

Southwest Airlines Co.

     Airlines        282          15,786  
 

Starbucks Corp.

     Hotels, Restaurants & Leisure        2,760          148,240  
 

Sysco Corp.

     Food & Staples Retailing        975          52,601  
 

Target Corp.

     Multiline Retail        978          57,712  
 

TE Connectivity Ltd.

     Electronic Equipment, Instruments & Components        315          26,164  
 

Texas Instruments Inc.

     Semiconductors & Semiconductor Equipment        2,076          186,093  
 

The TJX Cos. Inc.

     Specialty Retail        1,548          114,134  
 

Tractor Supply Co.

     Specialty Retail        207          13,101  
 

Tyson Foods Inc.

     Food Products        504          35,507  
a  

Ulta Beauty Inc.

     Specialty Retail        108          24,414  
 

Union Pacific Corp.

     Road & Rail        711          82,455  
a  

United Continental Holdings Inc.

     Airlines        132          8,036  
 

United Parcel Service Inc., B

     Air Freight & Logistics        1,350          162,122  
a  

United Therapeutics Corp.

     Biotechnology        108          12,657  
 

UnitedHealth Group Inc.

     Health Care Providers & Services        969          189,779  
 

Vail Resorts Inc.

     Hotels, Restaurants & Leisure        36          8,212  
 

Valero Energy Corp.

     Oil, Gas & Consumable Fuels        858          66,006  
 

VEREIT Inc.

     Equity Real Estate Investment Trusts (REITs      4,890          40,538  
 

Verizon Communications Inc.

     Diversified Telecommunication Services        3,765          186,330  
 

VF Corp.

     Textiles, Apparel & Luxury Goods        672          42,719  
a  

VMware Inc., A

     Software        81          8,844  
 

Wal-Mart Stores Inc.

     Food & Staples Retailing        2,121          165,735  
 

Waste Management Inc.

     Commercial Services & Supplies        609          47,666  
 

WEC Energy Group Inc.

     Multi-Utilities        531          33,336  
 

Wyndham Worldwide Corp.

     Hotels, Restaurants & Leisure        84          8,854  
 

Xcel Energy Inc.

     Electric Utilities        732          34,638  
 

Xilinx Inc.

     Semiconductors & Semiconductor Equipment        438          31,024  
            

 

 

 
               9,572,326  
            

 

 

 
 

Total Common Stocks and Other Equity Interests
(Cost $15,282,821)

             17,197,999  
            

 

 

 
    Management Investment Companies
(Cost $157,005) 1.0%
                      
    India 1.0%  
 

iShares MSCI India ETF

     Diversified Financial Services        5,415          177,883  
            

 

 

 
    Preferred Stocks 0.4%  
    Brazil 0.1%  
d  

Itausa-Investimentos Itau SA, 5.257%, pfd.

     Banks        5,770          20,120  
            

 

 

 
    Colombia 0.0%  
d  

Grupo de Inversiones Surameric SA, 1.498%, pfd.

     Diversified Financial Services        291          3,981  
            

 

 

 
    Germany 0.1%  
 

Fuchs Petrolub SE, 1.777%, pfd.

     Chemicals        132          7,817  
            

 

 

 

 

libertyshares.com   Semiannual Report     45  


FRANKLIN TEMPLETON ETF TRUST

STATEMENT OF INVESTMENTS (UNAUDITED)

 

Franklin LibertyQ Global Equity ETF (continued)

 

           Industry        Shares        Value  
    Preferred Stocks (continued)  
    South Korea 0.2%  
d  

Hyundai Motor Co., 4.327%, pfd.

     Automobiles          45        $ 3,677  
d  

Hyundai Motor Co., 4.000%, pfd., 2

     Automobiles          66          5,907  
 

LG Chem Ltd., 1.992%, pfd.

     Chemicals          15          3,320  
d  

Samsung Electronics Co., Ltd., 2.015%, pfd.

     Technology Hardware, Storage & Peripherals          12          21,604  
              

 

 

 
                 34,508  
              

 

 

 
 

Total Preferred Stocks (Cost $44,931)

               66,426  
              

 

 

 
 

Total Investments (Cost $15,484,757) 99.5%

               17,442,308  
 

Other Assets, less Liabilities 0.5%

               79,812  
              

 

 

 
 

Net Assets 100.0%

             $ 17,522,120  
              

 

 

 

 

 

See Abbreviations on page 69.

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. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At September 30, 2017, the aggregate value of these securities was $15,481, 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 registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. At September 30, 2017, the aggregate value of these securities was $32,357, representing 0.2% of net assets.

dVariable rate security. The rate shown represents the yield at period end.

 

46    Semiannual Report   |    The accompanying notes are an integral part of these financial statements.   libertyshares.com


FRANKLIN TEMPLETON ETF TRUST

 

Financial Highlights

 

Franklin LibertyQ International Equity Hedged ETF

 

     Six Months Ended
September 30, 2017
(unaudited)
     Year Ended
March 31, 2017a
 
Per share operating performance
(for a share outstanding throughout the period)
 

Net asset value, beginning of period

  $ 24.70      $ 25.45  
 

 

 

 
Income from investment operationsb:  

Net investment incomec

    0.44        0.52  

Net realized and unrealized gains (losses)

    0.74        1.45  
 

 

 

 

Total from investment operations

    1.18        1.97  
 

 

 

 

Less distributions from net investment income and net foreign currency gains

    (1.30      (2.72
 

 

 

 

Net asset value, end of period

  $ 24.58      $ 24.70  
 

 

 

 

Total returnd

    4.78%        8.30%  
Ratios to average net assetse  

Expenses before waiver and payments by affiliates

    2.22%        1.25%  

Expenses net of waiver and payments by affiliates

    0.40%        0.40%  

Net investment income

    3.52%        2.47%  
Supplemental data  

Net assets, end of period (000’s)

  $ 9,832      $ 9,880  

Portfolio turnover ratef

    13.37%        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 of 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 excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any.

 

libertyshares.com   The accompanying notes are an integral part of these financial statements.    |   Semiannual Report     47  


FRANKLIN TEMPLETON ETF TRUST

 

Statement of Investments, September 30, 2017 (unaudited)

 

Franklin LibertyQ International Equity Hedged ETF

 

           Industry      Shares        Value  
    Common Stocks and Other Equity Interests 99.4%  
    Australia 17.1%  
 

AGL Energy Ltd.

     Multi-Utilities        2,040        $ 37,408  
 

Amcor Ltd.

     Containers & Packaging        3,836          45,781  
 

Aristocrat Leisure Ltd.

     Hotels, Restaurants & Leisure        1,936          31,901  
 

Aurizon Holdings Ltd.

     Road & Rail        6,190          23,799  
 

Australia & New Zealand Banking Group Ltd.

     Banks        5,986          139,029  
 

Australian Stock Exchange Ltd.

     Capital Markets        402          16,538  
 

Bluescope Steel Ltd.

     Metals & Mining        888          7,644  
 

Brambles Ltd.

     Commercial Services & Supplies        4,744          33,501  
 

Caltex Australia Ltd.

     Oil, Gas & Consumable Fuels        806          20,301  
 

Challenger Ltd.

     Diversified Financial Services        1,202          11,742  
 

Cimic Group Ltd.

     Construction & Engineering        274          9,505  
 

Coca-Cola Amatil Ltd.

     Beverages        1,650          10,008  
 

Cochlear Ltd.

     Health Care Equipment & Supplies        256          31,981  
 

Commonwealth Bank of Australia

     Banks        2,328          137,456  
 

Computershare Ltd.

     IT Services        682          7,743  
 

Crown Resorts Ltd.

     Hotels, Restaurants & Leisure        822          7,295  
 

CSL Ltd.

     Biotechnology        1,786          187,729  
 

Dexus

     Equity Real Estate Investment Trusts (REITs      3,322          24,763  
 

Flight Centre Travel Group Ltd.

     Hotels, Restaurants & Leisure        210          7,417  
 

Fortescue Metals Group Ltd.

     Metals & Mining        4,414          17,802  
 

Goodman Group

     Equity Real Estate Investment Trusts (REITs      5,104          33,000  
 

GPT Group

     Equity Real Estate Investment Trusts (REITs      5,746          22,363  
 

Harvey Norman Holdings Ltd.

     Multiline Retail        2,200          6,698  
 

James Hardie Industries PLC, CDI

     Construction Materials        1,264          17,575  
 

Macquarie Group Ltd.

     Capital Markets        782          55,788  
 

Medibank Private Ltd.

     Insurance        11,136          25,515  
 

Mirvac Group

     Equity Real Estate Investment Trusts (REITs      9,534          17,131  
 

National Australia Bank Ltd.

     Banks        3,982          98,421  
 

Newcrest Mining Ltd.

     Metals & Mining        1,600          26,389  
 

Qantas Airways Ltd.

     Airlines        1,916          8,765  
 

REA Group Ltd.

     Media        200          10,514  
 

Rio Tinto Ltd.

     Metals & Mining        594          31,008  
 

Sonic Healthcare Ltd.

     Health Care Providers & Services        1,250          20,509  
 

Tabcorp Holdings Ltd.

     Hotels, Restaurants & Leisure        2,654          8,892  
 

Tatts Group Ltd.

     Hotels, Restaurants & Leisure        3,958          12,360  
 

Telstra Corp. Ltd.

     Diversified Telecommunication Services        18,696          51,198  
 

TPG Telecom Ltd.

     Diversified Telecommunication Services        1,066          4,073  
 

Vicinity Centres

     Equity Real Estate Investment Trusts (REITs      9,476          19,778  
 

Wesfarmers Ltd.

     Food & Staples Retailing        3,700          119,989  
 

Westpac Banking Corp.

     Banks        8,350          209,134  
 

Woolworths Ltd.

     Food & Staples Retailing        3,918          77,502  
            

 

 

 
               1,685,945  
            

 

 

 
    Austria 0.3%  
 

OMV AG

     Oil, Gas & Consumable Fuels        428          24,940  
            

 

 

 
    Belgium 0.3%  
 

Colruyt SA

     Food & Staples Retailing        220          11,271  
 

Proximus SADP

     Diversified Telecommunication Services        524          18,060  
            

 

 

 
               29,331  
            

 

 

 
    Denmark 3.8%  
 

Coloplast AS, B

     Health Care Equipment & Supplies        494          40,102  
 

Danske Bank AS

     Banks        1,522          60,882  
 

Novo Nordisk AS, B

     Pharmaceuticals        4,678          223,689  
 

Pandora AS

     Textiles, Apparel & Luxury Goods        456          45,022  
 

Tryg AS

     Insurance        312          7,207  
            

 

 

 
               376,902  
            

 

 

 

 

48    Semiannual Report   libertyshares.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)  
    Finland 1.3%  
 

Elisa OYJ

     Diversified Telecommunication Services        422        $ 18,170  
 

Kone OYJ, B

     Machinery        1,080          57,200  
 

Neste Oil OYJ

     Oil, Gas & Consumable Fuels        352          15,376  
 

Nokian Renkaat OYJ

     Auto Components        340          15,125  
 

Orion OYJ

     Pharmaceuticals        400          18,565  
            

 

 

 
               124,436  
            

 

 

 
    France 4.3%  
 

AXA SA

     Insurance        5,116          154,772  
 

Cie Generale des Etablissements Michelin, B

     Auto Components        552          80,593  
 

CNP Assurances

     Insurance        492          11,534  
 

Hermes International

     Textiles, Apparel & Luxury Goods        76          38,324  
 

Ipsen SA

     Pharmaceuticals        50          6,647  
 

Peugeot SA

     Automobiles        702          16,722  
 

SCOR SE

     Insurance        488          20,466  
 

Societe BIC SA

     Commercial Services & Supplies        80          9,590  
 

Thales SA

     Aerospace & Defense        246          27,855  
 

Unibail-Rodamco SE

     Equity Real Estate Investment Trusts (REITs      218          53,026  
            

 

 

 
               419,529  
            

 

 

 
    Germany 1.5%  
 

Continental AG

     Auto Components        152          38,589  
a  

Covestro AG, 144A

     Chemicals        342          29,414  
 

Deutsche Lufthansa AG

     Airlines        700          19,455  
 

Hugo Boss AG

     Textiles, Apparel & Luxury Goods        238          20,987  
 

ProSiebenSat.1 Media SE

     Media        754          25,703  
 

TUI AG

     Hotels, Restaurants & Leisure        662          11,244  
            

 

 

 
               145,392  
            

 

 

 
    Hong Kong 3.7%  
 

ASM Pacific Technology Ltd.

     Semiconductors & Semiconductor Equipment        400          5,761  
 

CK Infrastructure Holdings Ltd.

     Electric Utilities        2,000          17,207  
 

CLP Holdings Ltd.

     Electric Utilities        4,500          46,119  
 

HKT Trust and HKT Ltd.

     Diversified Telecommunication Services        12,000          14,580  
 

Hongkong Land Holdings Ltd.

     Real Estate Management & Development        3,200          23,040  
 

Hysan Development Co. Ltd.

     Real Estate Management & Development        2,000          9,410  
b  

I-CABLE Communications Ltd.

     Media        1,109          36  
 

Kerry Properties Ltd.

     Real Estate Management & Development        2,000          8,284  
 

Link REIT

     Equity Real Estate Investment Trusts (REITs      7,000          56,730  
 

MGM China Holdings Ltd.

     Hotels, Restaurants & Leisure        3,200          7,670  
 

New World Development Co. Ltd.

     Real Estate Management & Development        16,000          22,984  
 

NWS Holdings Ltd.

     Industrial Conglomerates        6,000          11,692  
 

PCCW Ltd.

     Diversified Telecommunication Services        12,000          6,499  
 

Sands China Ltd.

     Hotels, Restaurants & Leisure        8,000          41,635  
 

Sino Land Co. Ltd.

     Real Estate Management & Development        8,000          14,053  
 

Swire Properties Ltd.

     Real Estate Management & Development        3,200          10,857  
 

Techtronic Industries Co. Ltd.

     Household Durables        2,000          10,678  
c  

WH Group Ltd., Reg S

     Food Products        11,000          11,689  
 

The Wharf Holdings Ltd.

     Real Estate Management & Development        4,000          35,643  
 

Yue Yuen Industrial Holdings Ltd.

     Textiles, Apparel & Luxury Goods        3,000          11,407  
            

 

 

 
               365,974  
            

 

 

 
    Ireland 0.1%  
b  

Ryanair Holdings PLC

     Airlines        420          8,103  
            

 

 

 
    Israel 0.8%  
 

Azrieli Group Ltd.

     Real Estate Management & Development        148          8,220  
 

Bank Hapoalim BM

     Banks        2,824          19,769  

 

libertyshares.com   Semiannual Report     49  


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)  
    Israel (continued)  
 

Bezeq Israeli Telecommunication Corp. Ltd.

     Diversified Telecommunication Services          8,822        $ 12,614  
b  

Check Point Software Technologies Ltd.

     Software          206          23,488  
 

Mizrahi Tefahot Bank Ltd.

     Banks          370          6,633  
b  

Taro Pharmaceutical Industries Ltd.

     Pharmaceuticals          40          4,508  
              

 

 

 
                 75,232  
              

 

 

 
    Italy 0.7%  
 

Ferrari NV

     Automobiles          188          20,781  
 

Intesa Sanpaolo SpA, di Risp

     Banks          1,320          4,369  
c  

Poste Italiane SpA, Reg S

     Insurance          758          5,583  
 

Recordati SpA

     Pharmaceuticals          202          9,313  
 

Snam SpA

     Oil, Gas & Consumable Fuels          6,388          30,782  
              

 

 

 
                 70,828  
              

 

 

 
    Japan 20.6%  
 

ABC-Mart Inc.

     Specialty Retail          100          5,277  
 

Asahi Kasei Corp.

     Chemicals          4,000          49,216  
 

Ashikaga Holdings Co. Ltd.

     Banks          2,000          7,729  
 

Astellas Pharma Inc.

     Pharmaceuticals          7,200          91,563  
 

Bandai Namco Holdings Inc.

     Leisure Equipment & Products          400          13,716  
 

Bridgestone Corp.

     Auto Components          2,000          90,721  
 

CANON Inc.

     Technology Hardware, Storage & Peripherals          3,200          109,306  
 

Concordia Financial Group Ltd.

     Banks          1,600          7,904  
 

Daito Trust Construction Co. Ltd.

     Real Estate Management & Development          300          54,635  
 

Fuji Heavy Industries Ltd.

     Automobiles          2,600          93,777  
 

Hitachi Chemical Co. Ltd.

     Chemicals          200          5,481  
 

Hoya Corp.

     Health Care Equipment & Supplies          1,200          64,763  
 

Idemitsu Kosan Co. Ltd.

     Oil, Gas & Consumable Fuels          200          5,641  
 

Iida Group Holdings Co. Ltd.

     Household Durables          200          3,564  
 

Isuzu Motors Ltd.

     Automobiles          1,800          23,842  
 

Japan Airlines Co. Ltd.

     Airlines          600          20,298  
 

Japan Post Bank Co. Ltd.

     Banks          1,000          12,348  
 

Japan Tobacco Inc.

     Tobacco          3,000          98,290  
 

Kajima Corp.

     Construction & Engineering          2,000          19,864  
 

Kakaku.com Inc.

     Internet Software & Services          600          7,644  
 

Kansai Electric Power Co. Inc.

     Electric Utilities          1,000          12,788  
 

KAO Corp.

     Personal Products          1,400          82,335  
 

KDDI Corp.

     Wireless Telecommunication Services          6,000          158,149  
 

Konami Holdings Corp.

     Software          200          9,612  
 

Kuraray Co. Ltd.

     Chemicals          800          14,953  
 

Lawson Inc.

     Food & Staples Retailing          200          13,237  
 

Mitsubishi Gas Chemical Co. Inc.

     Chemicals          600          14,056  
 

Mitsubishi Tanabe Pharma Corp.

     Pharmaceuticals          600          13,752  
 

mixi, Inc.

     Internet Software & Services          200          9,648  
 

Murata Manufacturing Co. Ltd.

     Electronic Equipment, Instruments & Components          600          88,162  
 

Nippon Telegraph & Telephone Corp.

     Diversified Telecommunication Services          2,200          100,790  
 

Nissan Motor Co. Ltd.

     Automobiles          3,200          31,683  
 

Nitori Co. Ltd.

     Specialty Retail          200          28,588  
 

Nitto Denko Corp.

     Chemicals          400          33,339  
 

NTT DoCoMo Inc.

     Wireless Telecommunication Services          5,000          114,178  
 

Obayashi Corp.

     Construction & Engineering          1,600          19,175  
 

Oracle Corp. Japan

     Software          200          15,706  
 

Otsuka Corp.

     IT Services          200          12,810  
 

Park24 Co. Ltd.

     Commercial Services & Supplies          400          9,737  
 

Recruit Holdings Co. Ltd.

     Professional Services          1,600          34,639  
 

Resona Holdings Inc.

     Banks          5,600          28,755  
 

Sekisui House Ltd.

     Household Durables          1,000          16,848  
 

Shionogi & Co. Ltd.

     Pharmaceuticals          800          43,715  

 

50    Semiannual Report   libertyshares.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)  
    Japan (continued)  
 

Start Today Co. Ltd.

     Internet & Direct Marketing Retail        600        $ 19,002  
 

Sumitomo Rubber Industries Ltd.

     Auto Components        600          10,991  
 

Sundrug Co. Ltd.

     Food & Staples Retailing        200          8,280  
 

Taisei Corp.

     Construction & Engineering      400          20,966  
 

Tokyo Electron Ltd.

     Semiconductors & Semiconductor Equipment        200          30,702  
 

Tosoh Corp.

     Chemicals        500          11,265  
 

Toyota Motor Corp.

     Automobiles        3,600          214,596  
 

Trend Micro Inc.

     Software        100          4,922  
 

USS Co. Ltd.

     Specialty Retail        800          16,133  
            

 

 

 
               2,029,091  
            

 

 

 
    Luxembourg 0.1%  
 

RTL Group SA

     Media        138          10,448  
            

 

 

 
    Netherlands 0.3%  
 

Aegon NV

     Insurance        4,842          28,209  
            

 

 

 
    New Zealand 0.4%  
 

Fletcher Building Ltd.

     Construction Materials        2,126          12,280  
 

Ryman Healthcare Ltd.

     Health Care Providers & Services        1,030          6,902  
 

Spark New Zealand Ltd.

     Diversified Telecommunication Services        7,962          21,008  
            

 

 

 
               40,190  
            

 

 

 
    Norway 0.9%  
b  

Marine Harvest ASA

     Food Products        1,048          20,736  
 

Telenor ASA

     Diversified Telecommunication Services        2,208          46,710  
 

Yara International ASA

     Chemicals        582          26,079  
            

 

 

 
               93,525  
            

 

 

 
    Portugal 0.1%  
 

Jeronimo Martins SGPS SA

     Food & Staples Retailing        738          14,561  
            

 

 

 
    Singapore 2.2%  
 

CapitaLand Commercial Trust

     Equity Real Estate Investment Trusts (REITs      5,800          7,069  
b  

CapitaLand Commercial Trust, rts., 10/19/17

     Equity Real Estate Investment Trusts (REITs      963          207  
 

CapitaLand Mall Trust

     Equity Real Estate Investment Trusts (REITs      6,800          10,015  
 

ComfortDelGro Corp. Ltd.

     Road & Rail        7,200          11,028  
 

DBS Group Holdings Ltd.

     Banks        2,400          36,797  
 

Jardine Cycle & Carriage Ltd.

     Distributors        200          5,794  
 

SATS Ltd.

     Transportation Infrastructure        2,000          6,790  
 

Singapore Airlines Ltd.

     Airlines        1,400          10,351  
 

Singapore Exchange Ltd.

     Capital Markets        3,400          18,503  
 

Singapore Technologies Engineering Ltd.

     Aerospace & Defense        4,800          12,159  
 

Singapore Telecommunications Ltd.

     Diversified Telecommunication Services        27,400          74,249  
 

StarHub Ltd.

     Wireless Telecommunication Services        2,600          4,978  
 

Suntec REIT

     Equity Real Estate Investment Trusts (REITs      6,600          9,064  
 

Yangzijiang Shipbuilding Holdings Ltd.

     Machinery        7,800          8,214  
            

 

 

 
               215,218  
            

 

 

 
    Spain 2.7%  
 

Amadeus IT Group SA, A

     IT Services        1,194          77,621  
 

Distribuidora Internacional de Alimentacion SA

     Food & Staples Retailing        1,978          11,540  
 

Endesa SA

     Electric Utilities        1,016          22,911  
 

Industria de Diseno Textil SA

     Specialty Retail        3,424          129,066  
 

Red Electrica Corp. SA

     Electric Utilities        1,188          24,971  
            

 

 

 
               266,109  
            

 

 

 
    Sweden 3.3%  
 

Atlas Copco AB

     Machinery        1,114          43,100  
 

Electrolux AB, B

     Household Durables        344          11,657  
 

Hennes & Mauritz AB, B

     Specialty Retail        3,506          90,632  

 

libertyshares.com   Semiannual Report     51  


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)  
    Sweden (continued)  
 

ICA Gruppen AB

     Food & Staples Retailing        240        $ 9,000  
 

L E Lundbergforetagen AB, B

     Diversified Financial Services        70          5,583  
 

Nordea Bank AB

     Banks        6,448          87,213  
 

Skandinaviska Enskilda Banken AB, A

     Banks        2,942          38,675  
 

Skanska AB, B

     Construction & Engineering        842          19,466  
 

Swedish Match AB

     Tobacco        594          20,791  
            

 

 

 
               326,117  
            

 

 

 
    Switzerland 6.8%  
 

EMS-Chemie Holding AG

     Chemicals        28          18,636  
 

Geberit AG

     Building Products        116          54,919  
 

Kuehne + Nagel International AG

     Marine        164          30,390  
 

Partners Group Holding AG

     Capital Markets        72          48,888  
 

Roche Holding AG

     Pharmaceuticals        700          178,834  
 

Sika AG

     Chemicals        4          29,785  
 

Straumann Holding AG

     Health Care Equipment & Supplies        14          9,000  
b  

Swiss Life Holding AG

     Insurance        92          32,432  
 

Swiss Re AG

     Insurance        1,010          91,543  
 

Swisscom AG

     Diversified Telecommunication Services        74          37,948  
 

Zurich Insurance Group AG

     Insurance        432          131,886  
            

 

 

 
               664,261  
            

 

 

 
    United Kingdom 28.1%  
 

3i Group PLC

     Capital Markets        2,390          29,276  
 

Admiral Group PLC

     Insurance        894          21,794  
 

AstraZeneca PLC

     Pharmaceuticals        2,874          191,060  
 

BAE Systems PLC

     Aerospace & Defense        9,892          83,810  
 

Barratt Developments PLC

     Household Durables        3,370          27,784  
 

The Berkeley Group Holdings PLC

     Household Durables        490          24,436  
 

British American Tobacco PLC

     Tobacco        2,738          171,623  
 

BT Group PLC

     Diversified Telecommunication Services        28,416          108,235  
 

Burberry Group PLC

     Textiles, Apparel & Luxury Goods        1,412          33,342  
 

Capita PLC

     Professional Services        1,598          12,113  
 

Compass Group PLC

     Hotels, Restaurants & Leisure        4,816          102,284  
 

Croda International PLC

     Chemicals        416          21,170  
 

Direct Line Insurance Group PLC

     Insurance        4,360          21,269  
 

Dixons Carphone PLC

     Specialty Retail        1,382          3,586  
 

easyJet PLC

     Airlines        588          9,601  
 

Experian PLC

     Professional Services        2,856          57,438  
 

GKN PLC

     Auto Components        4,606          21,382  
 

GlaxoSmithKline PLC

     Pharmaceuticals        8,928          178,296  
 

Hargreaves Lansdown PLC

     Capital Markets        948          18,824  
 

HSBC Holdings PLC

     Banks        22,056          218,118  
 

IMI PLC

     Machinery        800          13,341  
 

Imperial Brands PLC

     Tobacco        2,740          117,048  
 

International Consolidated Airlines Group SA

     Airlines        1,874          14,932  
 

Intertek Group PLC

     Professional Services        462          30,880  
 

ITV PLC

     Media        16,258          38,106  
 

Johnson Matthey PLC

     Chemicals        416          19,088  
 

Kingfisher PLC

     Specialty Retail        6,140          24,590  
 

Land Securities Group PLC

     Equity Real Estate Investment Trusts (REITs      1,027          13,400  
 

Marks & Spencer Group PLC

     Multiline Retail        5,392          25,566  
 

Mondi PLC

     Paper & Forest Products        1,012          27,223  
 

Next PLC

     Multiline Retail        660          46,577  
 

Persimmon PLC

     Household Durables        1,294          44,826  
 

Randgold Resources Ltd.

     Metals & Mining        222          21,787  
 

Reckitt Benckiser Group PLC

     Household Products        1,922          175,683  
 

Relx NV

     Professional Services        3,162          67,323  

 

52    Semiannual Report   libertyshares.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)  
    United Kingdom (continued)  
 

RELX PLC

     Professional Services          3,840        $ 84,337  
 

Rio Tinto PLC

     Metals & Mining          1,732          80,703  
 

Royal Mail PLC

     Air Freight & Logistics          3,024          15,588  
 

SSE PLC

     Electric Utilities          2,958          55,441  
 

Tate & Lyle PLC

     Food Products          1,380          12,007  
 

Taylor Wimpey PLC

     Household Durables          9,352          24,530  
 

The Sage Group PLC

     Software          3,074          28,808  
 

Unilever NV, IDR

     Personal Products          3,478          205,749  
 

Unilever PLC

     Personal Products          3,538          205,012  
 

Whitbread PLC

     Hotels, Restaurants & Leisure          268          13,541  
              

 

 

 
                 2,761,527  
              

 

 

 
 

Total Common Stocks and Other Equity Interests
(Cost $8,942,296)

               9,775,868  
              

 

 

 
    Preferred Stocks 0.2%  
    Germany 0.2%  
 

Fuchs Petrolub SE, 1.777%, pfd.

     Chemicals          210          12,435  
 

Schaeffler AG, 3.663%, pfd.

     Auto Components          380          6,132  
              

 

 

 
 

Total Preferred Stocks (Cost $14,770)

               18,567  
              

 

 

 
 

Total Investments
(Cost $8,957,066) 99.6%

               9,794,435  
 

Other Assets, less Liabilities 0.4%

               37,256  
              

 

 

 
 

Net Assets 100.0%

             $ 9,831,691  
              

 

 

 

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. This security has been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At September 30, 2017, the value of this security was $29,414, representing 0.3% of net assets.

bNon-income producing.

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 registration. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. At September 30, 2017, the aggregate value of these securities was $17,272, representing 0.2% of net assets.

At September 30, 2017 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

     GSCO        Buy        1,064,882      $ 835,560        10/03/17      $      $  

Australian Dollar

     GSCO        Sell        1,064,882        844,339        10/03/17        8,779         

Australian Dollar

     MSCO        Buy        1,064,882        835,560        10/03/17                

Australian Dollar

     MSCO        Sell        1,064,882        844,337        10/03/17        8,778         

Danish Krone

     GSCO        Buy        1,144,292        181,784        10/03/17                

Danish Krone

     GSCO        Sell        1,144,292        183,201        10/03/17        1,418         

Danish Krone

     MSCO        Buy        1,144,292        181,784        10/03/17                

Danish Krone

     MSCO        Sell        1,144,292        183,202        10/03/17        1,418         

Euro

     GSCO        Buy        588,463        695,681        10/03/17                

Euro

     GSCO        Sell        588,463        700,682        10/03/17        5,001         

 

libertyshares.com   Semiannual Report     53  


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)  

Euro

     MSCO        Buy        588,463      $ 695,681        10/03/17      $      $  

Euro

     MSCO        Sell        588,463        700,683        10/03/17        5,002         

Great British Pound

     GSCO        Buy        922,096        1,237,130        10/03/17                

Great British Pound

     GSCO        Sell        922,096        1,189,338        10/03/17               (47,792

Great British Pound

     MSCO        Buy        922,096        1,237,130        10/03/17                

Great British Pound

     MSCO        Sell        922,096        1,189,323        10/03/17               (47,807

Hong Kong Dollar

     GSCO        Sell        1,314,717        168,119        10/03/17               (204

Hong Kong Dollar

     MSCO        Buy        1,314,717        168,323        10/03/17                

Hong Kong Dollar

     MSCO        Sell        1,314,717        168,118        10/03/17               (205

Israeli Shekel

     GSCO        Sell        84,208        23,500        10/03/17               (338

Israeli Shekel

     MSCO        Buy        84,208        23,837        10/03/17                

Israeli Shekel

     MSCO        Sell        84,208        23,499        10/03/17               (338

Japanese Yen

     GSCO        Buy        110,731,140        983,708        10/03/17                

Japanese Yen

     GSCO        Sell        110,731,140        1,007,432        10/03/17        23,724         

Japanese Yen

     MSCO        Buy        110,731,140        983,708        10/03/17                

Japanese Yen

     MSCO        Sell        110,731,140        1,007,422        10/03/17        23,713         

New Zealand Dollar

     GSCO        Buy        28,599        20,674        10/03/17                

New Zealand Dollar

     GSCO        Sell        28,599        20,472        10/03/17               (203

New Zealand Dollar

     MSCO        Buy        28,599        20,674        10/03/17                

New Zealand Dollar

     MSCO        Sell        28,599        20,471        10/03/17               (203

Norwegian Krone

     GSCO        Buy        335,885        42,195        10/03/17                

Norwegian Krone

     GSCO        Sell        335,885        43,201        10/03/17        1,006         

Norwegian Krone

     MSCO