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    SEMIANNUAL REPORT FRANKLIN TEMPLETON ETF TRUST September 30, 2019 Franklin Liberty International Opportunities ETF Franklin Liberty U.S. Core Bond ETF Franklin Liberty Investment Grade Corporate ETF Franklin Liberty U.S. Low Volatility ETF


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    Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary. You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.


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    Franklin Templeton Investments Successful investing begins with ambition. And achievement only comes when you reach for it. That’s why we continually strive to deliver better outcomes for investors. No matter what your goals are, our deep, global investment expertise allows us to offer solutions that can help. During our more than 70 years of experience, we’ve managed through all kinds of markets— up, down and those in between. We’re always preparing for what may come next. It’s because of this, combined with our strength as one of the world’s largest asset managers that we’ve earned the trust of millions of investors around the world. Contents Semiannual Report Franklin Liberty International Opportunities ETF . . . . . . . . 2 Franklin Liberty Investment Grade Corporate ETF . . . . . . 9 Franklin Liberty U.S. Core Bond ETF . . . . . . . . . . . . . . . . . . 15 Franklin Liberty U.S. Low Volatility ETF . . . . . . . . . . . . . . . . 21 Financial Highlights and Statements of Investments . . . . . 27 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 54 Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Visit franklintempleton.com/investor/ investments-and-solutions/ investment-options/etfs/ for fund updates and documents. Not FDIC Insured | May Lose Value | No Bank Guarantee franklintempleton.com Not part of the semiannual report 1


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    SEMIANNUAL REPORT Franklin Liberty International Opportunities ETF This semiannual report for Franklin Liberty International Geographic Composition Based on Total Net Assets as of 9/30/19 Opportunities ETF covers the period ended September 30, 2019. Asia 41.7% Your Fund’s Goal and Main Investments The Fund seeks long-term capital appreciation. Under normal Europe 41.3% market conditions, the Fund invests predominantly in equity securities in developed, developing and frontier markets out- North America 7.8% side of the U.S. across the entire market capitalization spectrum, including small- and mid-capitalization companies. Latin America & Caribbean 3.3% Performance Overview Australia & New Zealand 2.8% During the six-month period, the Fund posted cumulative Middle East & Africa 2.3% total returns of -0.36% based on market price and -0.36% based on net asset value (NAV). In comparison, the MSCI All Short-Term Investments & 0.8% Country World Index (ACWI) ex USA Index, which measures Other Net Assets stock performance in global developed and emerging mar- kets excluding the U.S., posted a +1.47% total return for the the eurozone and other regions, and the impact of U.S. trade same period.1 You can find more of the Fund’s performance disputes with China and other trading partners on global data in the Performance Summary beginning on page 6. growth and corporate earnings. In this environment, global Performance data represent past performance, which does developed and emerging market stocks, as measured by the not guarantee future results. Investment return and principal MSCI All Country World Index, posted a +3.91% total return value will fluctuate, and you may have a gain or loss when for the six months under review.1 you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go The U.S. economy grew during the six-month period. How- to franklintempleton.com or call (800) 342-5236. ever, the economy moderated in 2019’s second and third quarters, due partly to weakness in inventory and business Economic and Market Overview investment. The manufacturing sector expanded during the period’s first four months, but contracted in August and The global economy expanded during the six months ended September 2019. The services sector continued to expand September 30, 2019, despite weakness in certain regions. throughout the period, although the rate of expansion slowed Global stocks were aided by upbeat economic data in some in September. The unemployment rate decreased from 3.8% regions, encouraging corporate earnings reports, periods of in March 2019 to 3.5% at period-end.2 The annual inflation optimism about a potential U.S.-China trade deal and monetary rate, as measured by the Consumer Price Index, decreased policy easing by major central banks. The U.S. Federal Reser- from 1.9% in March 2019 to 1.7% at period-end.2 ve’s (Fed’s) patient approach to its monetary policy early in the period, rate cuts in July and September, and indications it will At its July 2019 meeting, the Fed lowered its target range for act appropriately to sustain U.S. economic expansion and the federal funds rate for the first time since December 2008, achieve its inflation objective aided market sentiment. to 2.00%–2.25%, citing muted inflation pressures and the potential effects of global trade tensions on economic growth. However, markets also reflected concerns about political Furthermore, the Fed ended its balance sheet normalization uncertainties in the U.S. (including the impeachment inquiry into U.S. President Donald Trump), geopolitical tensions in 1. Source: Morningstar. The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. 2. Source: U.S. Bureau of Labor Statistics. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 28. 2 Semiannual Report franklintempleton.com


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    FRANKLIN LIBERTY INTERNATIONAL OPPORTUNITIES ETF program earlier than previously indicated. In September, the Top 10 Countries 9/30/19 Fed further lowered the federal funds target rate range to 1.75%–2.00%, reiterating the rationale cited at the July % of Total Net Assets 2019 meeting. Japan 13.7% In Europe, the U.K.’s quarterly gross domestic product (GDP) China 12.7% growth contracted in 2019’s second quarter, as Brexit uncer- United Kingdom 12.5% tainties weighed on business sentiment. The Bank of England Canada 6.6% kept its key policy rate unchanged during the six-month period Spain 5.2% and lowered its GDP forecasts for 2019 and 2020. The euro- zone’s quarterly GDP growth moderated in 2019’s second Switzerland 4.7% quarter and stabilized in the third quarter. The bloc’s annual Italy 4.5% inflation rate ended the period lower. The European Central India 4.3% Bank (ECB) kept its benchmark interest rate unchanged dur- Germany 3.1% ing the period. In September, the ECB announced it will start Australia 2.8% a new bond-buying program in November in an effort to boost the economy and increase inflation. investment manager retains the sole discretion with respect In Asia, Japan’s quarterly GDP growth moderated in 2019’s sec- to portfolio security selection. The Fund may enter into cer- ond quarter. The Bank of Japan (BOJ) left its benchmark interest tain derivative transactions to seek to enhance Fund returns, rate unchanged and continued its stimulus measures during the increase liquidity, gain exposure to certain instruments or six-month period. At its July and September meetings, the BOJ markets in a more efficient or less expensive way and/or expressed its openness to increase stimulus in an effort to hedge risks associated with its other portfolio investments. sustain economic growth and achieve its inflation goal. When choosing equity investments for the Fund, we apply a In larger emerging markets, Brazil’s quarterly GDP growth research-driven, bottom-up, fundamental long-term approach, accelerated in 2019’s second quarter. The Central Bank of focusing on the market price of a company’s securities rela- Brazil lowered its benchmark interest rate twice during the tive to our evaluation of the company’s long-term earnings, six-month period. Russia’s annual GDP growth accelerated asset value and cash flow potential. We seek to invest in com- in 2019’s second quarter. The Bank of Russia cut its key panies that we consider to be financially strong with favorable interest rate three times during the period. China’s annual growth potential and sustainable competitive advantages. We GDP growth moderated in 2019’s second and third quarters. may also consider, among other factors, a company’s price/ The People’s Bank of China implemented an interest-rate earnings ratio, profit margins and liquidation value. reform in August, designating the loan prime rate as the new benchmark for household and business loans, effectively lowering interest rates in August and September. Overall, Manager’s Discussion global emerging market stocks, as measured by the MSCI During the reporting period, the Fund underperformed its Emerging Markets Index, posted a -3.40% total return during benchmark, the MSCI ACWI ex USA Index, as stock selec- the six months under review.1 tion in the consumer staples and consumer discretionary sectors detracted from relative results. Security selection in Investment Strategy the energy and financials sectors contributed. The Fund’s individual country and sector weightings may In the consumer staples sector, Ireland-based nutritional sup- vary significantly from its benchmark index, and investments plement manufacturer Glanbia was weak, after reporting will not necessarily be in the securities that comprise its disappointing first-half earnings, largely in its non-U.S. perfor- benchmark index. The Fund’s exposure to various regions mance nutrition business. The company also cut its full-year and markets will vary from time to time according to the guidance following the results. The U.S. business remains investment manager’s opinions as to the prevailing condi- strong, however, and its SlimFast product continues to show tions and prospects for these markets. In seeking to strong momentum. outperform the relevant market of each region, the investment manager consults with various local asset Several China-based internet stocks detracted from relative per- managers based in certain regions around the world formance during the period. Detractors included travel service (Sub-Advisors). Although the Sub-Advisors assist the invest- provider CTrip.com International, which has seen slower use of ment manager in the selection of local securities, the its travel services, given the greater economic uncertainty. franklintempleton.com Semiannual Report 3


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    FRANKLIN LIBERTY INTERNATIONAL OPPORTUNITIES ETF Top 10 Sectors/Industries Top 10 Holdings 9/30/19 9/30/19 % of Total Company % of Total Net Assets Sector/Industry, Country Net Assets Banks 12.4% Alibaba Group Holding Ltd., ADR 2.9% Internet & Direct Marketing Retail, China Pharmaceuticals 6.1% Roche Holding AG 2.4% Internet & Direct Marketing Retail 5.5% Pharmaceuticals, Switzerland Insurance 5.0% Taiwan Semiconductor Manufacturing Co. Ltd. 2.4% Auto Components 4.0% Semiconductors & Semiconductor Equipment, Taiwan Interactive Media & Services 3.9% Tencent Holdings Ltd. 2.2% Semiconductors & Semiconductor Equipment 3.7% Interactive Media & Services, China Trading Companies & Distributors 2.9% Novartis AG 2.0% Pharmaceuticals, Switzerland Oil, Gas & Consumable Fuels 2.8% AIA Group Ltd. 1.5% Capital Markets 2.6% Insurance, Hong Kong Ping An Insurance (Group) Co. of China Ltd., H 1.5% Insurance, China Italian multi-channel lender FinecoBank detracted, as political concerns in Italy and general worries about the regional Vinci SA 1.5% Construction & Engineering, France economy weighed on the bank. Additionally, Italian bank Unicredit (not a Fund holding) sold a large stake in Fineco- Silergy Corp. 1.3% Semiconductors & Semiconductor Equipment, China Bank and took additional steps to make FinecoBank fully Brookfield Asset Management Inc., A 1.3% independent. Elsewhere in the sector, Norwegian online bank Capital Markets, Canada Sbanken hurt relative performance due to a selloff in European bank stocks amid concerns about the impact the low or negative interest-rate environment will have on the In the industrials sector, Italy-based electric cable manufac- industry. Concerns about a slowdown in Sbanken’s loan turer Prysmian bolstered relative returns after winning a large growth also weighed on the stock following weaker mortgage contract and as earnings growth has been robust in recent lending in recent quarters. quarters. Prysmian has continued to see solid demand for its undersea electrical and telecommunications cables. Further- In contrast, in the information technology sector, Taiwan- more, we believe Prysmian could benefit from long-term listed integrated circuit manufacturer Silergy and chip foundry secular trends such as the growing use of alternative energy Taiwan Semiconductor Manufacturing contributed to relative sources and smart grid adoption. returns. Silergy has reported robust results recently, based on improving demand from its industrial and consumer end The ETF did not use derivatives during the period. markets. Taiwan Semiconductor has also seen improving demand in recent quarters, which we believe could feed through to faster earnings growth. Italy-based wealth manager Banca Generali contributed to relative returns as political uncertainties in Italy eased during the third calendar quarter and as it continues to take busi- ness away from structurally challenged Italian banks. The company has reported solid inflows in recent quarters, as more Italians look to generate higher investment returns in a low or negative interest-rate environment. 4 Semiannual Report franklintempleton.com


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    FRANKLIN LIBERTY INTERNATIONAL OPPORTUNITIES ETF Thank you for your participation in Franklin Liberty International Opportunities ETF. We look forward to serving your future investment needs. Purav A. Jhaveri, CFA,® FRM Portfolio Manager The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic condi- tions. 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, coun- try, 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 complete- ness 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. franklintempleton.com Semiannual Report 5


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    FRANKLIN LIBERTY INTERNATIONAL OPPORTUNITIES ETF Performance Summary as of September 30, 2019 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 per- formance 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 incep- tion, for the period from inception to the first day of secondary trading (1/27/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 9/30/191 Cumulative Total Return2 Average Annual Total Return2 Based on Based on Based on Based on NAV3 market price4 NAV3 market price4 6-Month -0.36% -0.36% -0.36% -0.36% 1-Year -3.14% -3.26% -3.14% -3.26% Since Inception (1/25/17) +16.50% +16.23% +5.87% +5.77% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 7 for Performance Summary footnotes. 6 Semiannual Report franklintempleton.com


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    FRANKLIN LIBERTY INTERNATIONAL OPPORTUNITIES ETF PERFORMANCE SUMMARY Distributions (4/1/19–9/30/19) Net Investment Income $0.425161 Total Annual Operating Expenses5 With Waiver Without Waiver 0.60% 2.34% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. Investments in develop- ing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. 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 or adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries or sectors, or investments. Smaller and midsize-company stocks have historically experienced more price volatility than larger-company stocks, especially over the short term. Investments in deriva- tives 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. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. The Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/20. 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. franklintempleton.com Semiannual Report 7


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    FRANKLIN LIBERTY INTERNATIONAL OPPORTUNITIES ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 invest- ment 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 “End- ing Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $ 7.50, then 8.6 × $ 7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50. Hypothetical Example for Comparison with Other Funds Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, com- pare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different ETFs. In addition, if transactional costs were included, your total costs would have been higher. Actual Hypothetical (actual return after expenses) (5% annual return before expenses) Expenses Expenses Beginning Ending Paid During Ending Paid During Account Account Period Account Period Net Annualized Value 4/1/19 Value 9/30/19 4/1/19–9/30/191,2 Value 9/30/19 4/1/19–9/30/191,2 Expense Ratio2 $1,000.00 $996.40 $2.99 $1,022.00 $3.03 0.60% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 8 Semiannual Report franklintempleton.com


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    Franklin Liberty Investment Grade Corporate ETF This semiannual report for Franklin Liberty Investment Grade Top 10 Sectors/Industries 9/30/19 Corporate ETF covers the period ended September 30, 2019. % of Total Net Assets Your Fund’s Goal and Main Investments Banks 25.0% The Fund seeks a high level of current income as is consis- Electric Utilities 7.0% tent with prudent investing, while seeking preservation of Oil, Gas & Consumable Fuels 5.9% capital. Under normal market conditions, the Fund invests at Insurance 5.3% least 80% of its net assets in investment-grade corporate Health Care Providers & Services 4.9% debt securities and investments. Pharmaceuticals 2.8% Beverages 2.6% Performance Overview Media 2.4% During the six-month period, the Fund posted cumulative Food Products 2.3% total returns of +7.92% based on market price and +7.88% Biotechnology 2.2% based on net asset value (NAV).1 In comparison, the Bloomberg Barclays U.S. Corporate Investment Grade Index posted a +7.66% total return for the same period.1 You can At its July 2019 meeting, the U.S. Federal Reserve (Fed) lowered its target range for the federal funds rate for the first find more of the Fund’s performance data in the Performance time since December 2008, to 2.00%–2.25%, citing muted Summary beginning on page 12. inflation pressures and the potential effects of global trade Performance data represent past performance, which does tensions on economic growth. Furthermore, the Fed ended not guarantee future results. Investment return and principal its balance sheet normalization program earlier than previ- value will fluctuate, and you may have a gain or loss when ously indicated. In September, the Fed further lowered the you sell your shares. Current performance may differ from federal funds target rate range to 1.75%–2.00%, reiterating figures shown. For most recent month-end performance, go the rationale cited at the July 2019 meeting. to franklintempleton.com or call (800) 342-5236. The 10-year Treasury yield, which moves inversely to its price, decreased during the period. The yield rose briefly at Economic and Market Overview the start of the period, but fell to multi-year lows in 2019’s The U.S. economy expanded during the six months ended third quarter. Political uncertainties in the U.S. (including the September 30, 2019. However, the economy moderated in impeachment inquiry into U.S. President Donald Trump), 2019’s second and third quarters, due partly to weakness in geopolitical tensions in certain regions, slower domestic and inventory and business investment. The manufacturing sec- global economic growth, the Fed’s more accommodative tor expanded during the period’s first four months, but monetary policy stance and expectations of more stimulus contracted in August and September 2019. The services sec- from global central banks weighed on the Treasury yield at tor continued to expand throughout the period, although the certain points during the period. However, several better- rate of expansion slowed in September. The unemployment than-expected U.S. economic reports and periods of rate decreased from 3.8% in March 2019 to 3.5% at optimism about a potential U.S.-China trade deal supported period-end.2 The annual inflation rate, as measured by the the yield. The 10-year yield persistently fell below certain short-term yields due to weaker economic data, escalating Consumer Price Index, decreased from 1.9% in March 2019 U.S. trade tensions with China and other trading partners, to 1.7% at period-end.2 and the Fed’s recent monetary policy easing. Overall, the 10-year Treasury yield declined from 2.41% at the beginning of the period to 1.68% at period-end. 1. Source: Morningstar. The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. 2. Source: Bureau of Labor Statistics. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 34. franklintempleton.com Semiannual Report 9


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    FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF Top 10 Holdings Investment Strategy 9/30/19 The Fund invests primarily in U.S. dollar-denominated corpo- % of Total rate debt securities issued by U.S. and foreign companies. The Net Assets Fund may invest in debt securities of any maturity or duration. U.S. Treasury 30 Yr. Bond, 12/19/2019 7.1% Government Bonds The Fund’s focus on the credit quality of its portfolio is Bank of America Corp., sub. bond, 3.0% intended to reduce credit risk and help to preserve the Fund’s 4.183%, 11/25/2027 capital. The Fund may also invest a portion of its assets in Banks convertible securities, preferred securities and U.S. Treasury Citigroup Inc., senior note, FRN, sub. note, 2.7% securities, and generally expects to invest a portion of its 4.05%, 7/30/2022 Banks assets in cash, cash equivalents and high quality money market securities, including commercial paper, repurchase Morgan Stanley, senior bond, FRN thereafter, 2.7% 3.591%, 7/22/2028 agreements and affiliated or unaffiliated money market funds. Capital Markets The Fund may invest up to 40% of its net assets in foreign Credit Suisse Group Funding Guernsey Ltd., 2.6% securities, including those in developing markets, and up to senior note, 3.80%, 9/15/2022 15% of its net assets in non-U.S. dollar-denominated securi- Banks ties. The Fund may enter into certain derivative transactions HSBC Holdings PLC, senior note, 4.30%, 3/08/2026 2.5% to seek to enhance Fund returns, increase liquidity, gain Banks exposure to certain instruments or markets in a more efficient Marsh & McLennan Cos. Inc., senior bond, 2.5% or less expensive way and/or hedge risks associated with its senior note, 3.875%, 3/15/2024 other portfolio investments. Insurance BB&T Corp., sub. bond, 3.875%, 3/19/2029 2.5% In choosing investments, we select securities in various mar- Banks ket sectors based on our assessment of changing economic, JPMorgan Chase & Co., senior bond, FRN thereafter, 2.1% market, industry and issuer conditions. We use a top-down sub. note, 3.375%, 5/01/2023 analysis of macroeconomic trends, combined with a Banks bottom-up fundamental analysis of market sectors, industries Standard Chartered PLC, senior note, 144A, FRN 2.0% and issuers, to try to take advantage of varying sector reac- thereafter, 3.885%, 3/15/2024 Banks tions to economic events. The Fund’s portfolio is constructed by taking into account our desired duration and yield curve exposure, total return potential, as well as the appropriate Lower government bond yields globally increased demand diversification and risk profile at the issue, company and for investment-grade corporate bonds, a higher yielding alter- industry level. We may utilize quantitative models to identify native. Corporate issuance remained below last year’s level, investment opportunities in order to construct a portfolio of despite some companies taking advantage of low overall investments for the Fund. Quantitative trading models are financing costs. proprietary systems that rely on mathematical computations to identify trading opportunities. The Fund outperformed its benchmark on a net basis for the period. The Fund’s security selection was a major contributor to positive Fund performance, with quality and industry allo- Manager’s Discussion cations also boosting results. In contrast, yield curve The investment-grade corporate bond market performed well positioning was a slight detractor. during the period, driven mostly by lower U.S. Treasury The Fund’s industry outperformance was driven by our hold- yields. Corporate bond spreads ended slightly tighter than ings of government-related bonds. Major contributors on an their ending levels in March, but there was significant volatil- individual company basis included AB Inbev, Enel and ity within the period. Verizon Communications. Detractors included Caterpillar, Slowing economic data, increasingly accommodative central Duke Energy and British American Tobacco. banks and headlines about global trade disputes drove the News stories continued to create volatility for the bond prices market. S&P 500 corporate earnings were weaker compared of some individual issuers held in the Fund. For example, to the previous year, but corporate credit metrics remained news about fundamental developments and the reduction of broadly stable. Government bond yields fell during the debt by selling assets at companies including General period, with the 10-year U.S. Treasury yield decreasing from 2.41% to 1.68%. 10 Semiannual Report franklintempleton.com


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    FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF Electric, Kraft Heinz Foods and AB Inbev caused significant Thank you for your participation in Franklin Liberty spread movements during the period. Investment Grade Corporate ETF. We look forward to serv- ing your future investment needs. The Fund’s overweight position in BBB-rated bonds helped performance. This position was based on our view that these bonds offered what we considered attractive yields based on current valuations and economic conditions. We kept the Fund’s duration positioning close to neutral relative to the benchmark for most of the period. What is the yield curve? Marc Kremer, CFA The yield curve is a line that plots the interest rates, at a set point Co-Lead Portfolio Manager in time, of bonds having equal credit quality but differing maturity dates. The most frequently reported yield curve compares three- month, two-year and 30-year U.S. Treasury debt. What is duration? Duration is a measure of a bond’s price sensitivity to interest-rate changes. In general, a portfolio of securities with a lower duration Shawn Lyons, CFA can be expected to be less sensitive to interest-rate changes than Co-Lead Portfolio Manager a portfolio with a higher duration. The Fund held primarily cash bonds during the period, but The foregoing information reflects our analysis, opinions and used credit index derivatives to gain market exposure on a portfolio holdings as of September 30, 2019, the end of the temporary, tactical basis. The Fund also used interest rate reporting period. The way we implement our main investment futures contracts to manage duration exposure. strategies and the resulting portfolio holdings may change depending on factors such as market and economic condi- Effective October 15, 2019, after period-end, Thomas Run- tions. These opinions may not be relied upon as investment kel, CFA, and Pururav Thoutireddy, Ph.D., were added as advice or an offer for a particular security. The information is co-lead portfolio managers, joining current co-lead portfolio not a complete analysis of every aspect of any market, coun- managers Marc Kremer, CFA, and Shawn Lyons, CFA. try, 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 complete- ness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. franklintempleton.com Semiannual Report 11


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    FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF Performance Summary as of September 30, 2019 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 per- formance 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 incep- tion, for the period from inception to the first day of secondary trading (10/5/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 9/30/191 Cumulative Total Return2 Average Annual Total Return2 Based on Based on Based on Based on NAV3 market price4 NAV3 market price4 6-Month +7.88% +7.92% +7.88% +7.92% 1-Year +12.54% +12.77% +12.54% +12.77% Since Inception (10/3/16) +13.26% +13.43% +4.25% +4.30% 30 Day Standardized Yield6 Distribution Rate5 (with fee waiver) (without fee waiver) 3.17% 2.70% 2.44% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 13 for Performance Summary footnotes. 12 Semiannual Report franklintempleton.com


  • Page 15

    FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF PERFORMANCE SUMMARY Distributions (4/1/19–9/30/19) Net Investment Income $0.407158 Total Annual Operating Expenses7 With Without Fee Waiver Fee Waiver 0.35% 1.07% All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s investments in foreign securities involve certain risks including currency fluctuations, and economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. The Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/20. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower. 2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 3. Assumes reinvestment of distributions based on net asset value. 4. Assumes reinvestment of distributions based on market price. 5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/19. 6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders. 7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. franklintempleton.com Semiannual Report 13


  • Page 16

    FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 invest- ment 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 “End- ing 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, com- pare 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 Hypothetical (actual return after expenses) (5% annual return before expenses) Expenses Expenses Beginning Ending Paid During Ending Paid During Account Account Period Account Period Net Annualized Value 4/1/19 Value 9/30/19 4/1/19–9/30/191,2 Value 9/30/19 4/1/19–9/30/191,2 Expense Ratio2 $1,000.00 $1,078.80 $1.82 $1,023.25 $1.77 0.35% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 14 Semiannual Report franklintempleton.com


  • Page 17

    Franklin Liberty U.S. Core Bond ETF This semiannual report for Franklin Liberty U.S. Core Bond Portfolio Composition Based on Total Net Assets as of 9/30/19 ETF covers the period since the Fund’s inception on September 17, 2019, through September 30, 2019. U.S. Government & Agency Securities 31.3% Corporate Bonds & Notes 29.0% Your Fund’s Goal and Main Investments Mortgage-Backed Securities 25.0% The Fund seeks total return. Under normal market condi- Municipal Bonds 4.4% tions, the Fund invests at least 80% of its net assets in bonds Long Futures 2.3% of U.S. issuers. Foreign Government and Agency Securities 0.9% Performance Overview Investment Strategy For the period since inception on September 17, 2019, The Fund invests predominantly in investment-grade bonds through September 30, 2019, the Fund posted cumulative of U.S. issuers, including government, corporate-debt, total returns of +0.86% based on market price and +0.74% mortgage-backed and asset-backed securities. The Fund’s based on net asset value (NAV). In comparison, the investments in mortgage-backed securities include securities Bloomberg Barclays U.S. Aggregate Bond Index, which that are issued or guaranteed by the U.S. government, its tracks the U.S. investment-grade, taxable bond market, agencies or instrumentalities, and private issuers, including posted a +0.97% total return.1 You can find more of the commercial mortgage-backed securities. Under normal mar- Fund’s performance data in the Performance Summary ket conditions, the Fund is generally expected to have sector, beginning on page 18. credit and duration exposures comparable to its benchmark index. However, we make investment decisions based upon Performance data represent past performance, which does our own fundamental analysis, which affects the Fund’s sec- not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when tor, credit and duration exposures so that they may vary from you sell your shares. Current performance may differ from the benchmark index. figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. In addition, the Fund may purchase or sell mortgage-backed securities on a delayed delivery or forward commitment basis through the to-be-announced (TBA) market. With TBA trans- Economic and Market Overview actions, the particular securities to be delivered must meet The U.S. economy expanded at a moderate pace during the specified terms and conditions. period since the Fund’s inception. The unemployment rate For purposes of pursuing its investment goal, the Fund may and the annual inflation rate, as measured by the Consumer enter into various interest-rate and credit-related derivatives, Price Index, were 3.5% and 1.7% at period-end, principally U.S. Treasury futures, interest-rate swaps and credit respectively.2 At its September 2019 meeting, the U.S. default swaps. The use of these derivative transactions may Federal Reserve lowered its target range from 2.00%–2.25% allow the Fund to obtain net long or short exposures to select to 1.75%–2.00%, citing muted inflation pressures and the interest rates, durations or credit risks. The Fund may enter into potential effects of global trade tensions on economic growth. certain derivative transactions to seek to enhance Fund returns, The 10-year Treasury yield, which moves inversely to its increase liquidity, gain exposure to certain instruments or mar- price, decreased during the period from 1.81% to 1.68%. kets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments. 1. Source: Morningstar. 2. Source: Bureau of Labor Statistics. The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 45. franklintempleton.com Semiannual Report 15


  • Page 18

    FRANKLIN LIBERTY U.S. CORE BOND ETF In choosing investments, we select securities in various mar- Top 10 Fund Holdings ket sectors based on our assessment of changing economic, 9/30/19 market, industry and issuer conditions. We use a top-down % of Total Net Assets analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries U.S. Treasury Note , 2.75%, 9/15/2021 25.4% and issuers, to try to take advantage of varying sector reac- Federal National Mortgage Association , tions to economic events. We may consider selling a security 4.50%, 10/01/2049 24.5% when we believe the security has become fully valued due to U.S. Treasury Bond , 2.75%, 11/15/2042 5.9% either its price appreciation or changes in the issuer’s funda- U.S. Treasury 5 Yr. Note , 12/31/2019 2.3% mentals, or when we believe another security is a more Contra Costa Community College District GO, attractive investment opportunity. Refunding, 2.926%, 8/01/2038 1.8% S E Alabama State Gas Supply District Gas Supply, Revenue, Libor-Project #2, Series B, Manager’s Discussion 2.25%, 6/01/2049 0.9% During the short period since the Fund’s inception on California State GO, Various Purpose, September 17, 2019, through September 30, 2019, the port- 3.00%, 10/01/2037 0.9% folio slightly underperformed the benchmark Bloomberg Texas State Water Development Board Revenue, Barclays U.S. Aggregate Bond Index. We invested the portfo- State Water Implementation Fund, Master Trust, lio during a period of inflows, and the major detractor was our Series A, 4.00%, 10/15/2044 0.8% slightly underweighted duration positioning in a declining rate Capital One Financial Corp., senior bond, senior note, environment. In contrast, security selection within our 3.75%, 3/09/2027 0.7% investment-grade corporate credit exposure contributed to Bank of America Corp., senior note, senior sub. bond, performance, although this effect was slightly offset by 4.25%, 10/22/2026 0.6% negative security selection within our fixed-rate agency mortgage-backed securities bucket. In terms of derivatives, we utilized Treasury futures for dura- tion management of the portfolio. 16 Semiannual Report franklintempleton.com


  • Page 19

    FRANKLIN LIBERTY U.S. CORE BOND ETF Thank you for your participation in Franklin Liberty U.S. Core Bond ETF. We look forward to serving your future investment needs. David Yuen, CFA, FRM Co-Lead Portfolio Manager Amy Cooper, CFA Co-Lead Portfolio Manager Patrick Klein, Ph.D. Co-Lead Portfolio Manager Tina Chou Co-Lead Portfolio Manager The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic condi- tions. 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, coun- try, 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 complete- ness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. franklintempleton.com Semiannual Report 17


  • Page 20

    FRANKLIN LIBERTY U.S. CORE BOND ETF Performance Summary as of September 30, 2019 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 per- formance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares. Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s incep- tion, for the period from inception to the first day of secondary trading (9/19/19), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 9/30/191 Cumulative Total Return2 Average Annual Total Return2 Based on Based on Based on Based on NAV3 market price4 NAV3 market price4 Since Inception (9/17/19) +0.74% +0.86% +0.74% +0.86% 30 Day Standardized Yield6 Distribution Rate5 (with fee waiver) (without fee waiver) 0.00%7 — — Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 19 for Performance Summary footnotes. 18 Semiannual Report franklintempleton.com


  • Page 21

    FRANKLIN LIBERTY U.S. CORE BOND ETF PERFORMANCE SUMMARY Distributions (9/17/19–9/30/19) Net Investment Income $0.003862 Total Annual Operating Expenses8 With Without Fee Waiver Fee Waiver 0.15% 0.19% All investments involve risks, including possible loss of principal. Interest rate movements, unscheduled mortgage prepayments and other risk factors will affect the Fund’s share price and yield. Bond prices, and thus a Fund’s share price, generally move in the opposite direction of interest rates. Therefore, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. The Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/21. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower. 2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 3. Assumes reinvestment of distributions based on net asset value. 4. Assumes reinvestment of distributions based on market price. 5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/19. 6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders. The Fund launched on 9/17/19 and yields cannot be produced until the Fund has been in existence for 30 days. This value will not be calculated until 10/31/19. 7. Amount rounds to less than 0.01% per share. 8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. franklintempleton.com Semiannual Report 19


  • Page 22

    FRANKLIN LIBERTY U.S. CORE BOND ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 invest- ment 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 “End- ing 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, com- pare 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 Hypothetical (actual return after expenses) (5% annual return before expenses) Expenses Expenses Beginning Ending Paid During Ending Paid During Account Account Period Account Period Net Annualized Value1 Value 9/30/19 9/17/19–9/30/192,3 Value 9/30/19 4/1/19–9/30/192,3 Expense Ratio3 $1,000.00 $1,007.40 $0.05 $1,024.25 $0.76 0.15% 1. 9/17/19 for Actual; 4/1/19 for Hypothetical. 2. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. For Actual expenses, the mutliplier is 13/366 to reflect the number of days since commencement of operations. 3. Reflects expenses after fee waivers and expense reimbursements. 20 Semiannual Report franklintempleton.com


  • Page 23

    Franklin Liberty U.S. Low Volatility ETF This semiannual report for Franklin Liberty U.S. Low Volatility Top 10 Sectors/Industries 9/30/19 ETF covers the period ended September 30, 2019. % of Total Net Assets Your Fund’s Goal and Main Investments Information Technology 21.8% The Fund seeks capital appreciation with an emphasis on Health Care 13.2% lower volatility. Under normal market conditions, the Fund Financials 13.0% invests at least 80% of its net assets in U.S. investments. Consumer Discretionary 10.7% Communication Services 9.9% Performance Overview Industrials 9.6% During the six-month period, the Fund posted cumulative Consumer Staples 7.1% total returns of +9.42% based on market price and +9.52% Energy 4.1% based on net asset value (NAV). In comparison, the Russell Real Estate 4.0% 1000® Index posted a +5.73% total return for the same Utilities 3.3% period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 24. tensions on economic growth. Furthermore, the Fed ended Performance data represent past performance, which does its balance sheet normalization program earlier than previ- not guarantee future results. Investment return and principal ously indicated. In September, the Fed further lowered the value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from federal funds target rate range to 1.75%–2.00%, reiterating figures shown. For most recent month-end performance, go the rationale cited at the July 2019 meeting. to franklintempleton.com or call (800) 342-5236. U.S. equity markets overall rose during the period, benefiting from upbeat economic data and U.S. corporate earnings, the Economic and Market Overview Fed’s rate cuts and investor optimism about further monetary The U.S. economy expanded during the six months ended easing. However, markets reflected concerns about political September 30, 2019. However, the economy moderated in uncertainties in the U.S. (including the impeachment inquiry 2019’s second and third quarters, due partly to weakness in into U.S. President Donald Trump), geopolitical tensions in inventory investment and business investment. The manufac- certain regions, and the impact of U.S. trade disputes with turing sector expanded during the period’s first four months, China and other trading partners on global growth and corpo- but contracted in August and September 2019. The services rate earnings. These concerns were partly alleviated at sector continued to expand throughout the period, although certain points during the period by easing trade tensions and the rate of expansion slowed in September. The unemploy- optimism about a potential U.S.-China trade deal. The broad ment rate decreased from 3.8% in March 2019 to 3.5% at U.S. stock market, as measured by the Standard & Poor’s® period-end.2 The annual inflation rate, as measured by the 500 Index (S&P 500®), generally trended higher in the peri- Consumer Price Index, decreased from 1.9% in March 2019 od’s first four months, reaching a new all-time high in July. to 1.7% at period-end.2 Stocks retreated in August, due to escalating trade tensions and heightened concerns about U.S. and global economic At its July 2019 meeting, the U.S. Federal Reserve (Fed) growth, but recovered in September amid easing trade ten- lowered its target range for the federal funds rate for the first sions and investor optimism about the upcoming U.S.-China time since December 2008, to 2.00%–2.25%, citing muted trade negotiations in October 2019. Overall, the S&P 500 inflation pressures and the potential effects of global trade posted a +6.08% total return for the six-month period.3 1. Source: Morningstar. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trade- mark of Frank Russell Company. The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. 2. Source: Bureau of Labor Statistics. 3. Source: Morningstar. 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 41. franklintempleton.com Semiannual Report 21


  • Page 24

    FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF Top 10 Holdings Investment Strategy 9/30/19 The Fund invests primarily in equity securities (principally Company % of Total common stocks) of U.S. companies.4 The Fund seeks capital Sector/Industry Net Assets appreciation, while providing a lower level of volatility than Oracle Corp. 1.5% the broader equity market as measured by the Russell 1000® Information Technology Index, meaning the Fund seeks returns that fluctuate less Amphenol Corp., A 1.5% than the returns of the Russell 1000® Index. We apply a fun- Information Technology damentally driven “bottom-up” research process to create a International Business Machines Corp. 1.5% starting universe of eligible securities across a large number Information Technology of sectors derived from the holdings of a number of Franklin Automatic Data Processing Inc. 1.5% Templeton equity funds. The investment manager screens Information Technology that universe on a quarterly basis in order to identify those Apple Inc. 1.5% securities with the lowest realized volatility relative to their Information Technology corresponding sectors. The Fund’s sector weightings gener- Cisco Systems Inc. 1.5% Information Technology ally are based on the current sector weightings within the Russell 1000® Index. Individual securities in the Fund’s port- AT&T Inc. 1.4% Communication Services folio are generally weighted equally within each sector. The investment manager may, from time to time, make adjust- Texas Instruments Inc. 1.5% Information Technology ments to the Fund’s portfolio as a result of corporate actions, changes to the volatility profile of the Fund’s holdings, or for Synopsys Inc. 1.5% Information Technology risk management related purposes. Verizon Communications Inc. 1.4% Communication Services Manager’s Discussion During the period, the Fund outperformed the Russell 1000® Higher revenue from strong volume growth lifted the shares of Index benchmark. Most sectors contributed to relative perfor- diagnostic testing company Quest Diagnostics and boosted mance with key contributors in the information technology results in the health care sector. In the financials sector, insur- (IT), health care and financials sectors. Conversely, the ance company W.R. Berkley contributed to returns. A major energy sector was a detractor during the period. contributor in the industrials sector was Lockheed Martin. The defense contractor has been a beneficiary of strong defense In the IT sector, electronic payment processor Total System spending. In contrast, diversified industrial conglomerate For- Services was a major contributor. Shares of the company tive struggled with slower sales and lowered its guidance. The appreciated following its acquisition by a global payments company announced its intention to separate into two compa- provider. Strong sales growth and raised guidance was a nies, which could help increase its strategic focus. Despite boost for the shares of Synopsys, a software provider to the stock weakness, we continue to view Fortive as a high-quality semiconductor industry. We believe the company is uniquely business. Elsewhere, concerns about slowing global growth positioned to address the growing need and demand for and its impact on energy demands pressured the energy sec- complex chip designs. Semiconductor manufacturer Texas tor and our positions in Occidental Petroleum, Schlumberger Instruments reported financial results over the period that and EOG Resources. were solidly ahead of consensus estimates. We believe ana- log is the most attractive product segment in the semiconductor industry, and Texas Instruments is a leading market share analog semiconductor company. In contrast, underweightings in strong performing shares of Microsoft and Apple dampened relative returns. 4. “U.S. companies” are those that (i) are organized under the laws of, or have a principal office in, or for whose securities the principal trading market is, the U.S.; (ii) derive 50% or more of their total revenue or profit from either goods or services produced, or sales made, in the U.S.; or (iii) have 50% or more of their assets in the U.S. See www.franklintempletondatasources.com for additional data provider information. 22 Semiannual Report franklintempleton.com


  • Page 25

    FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF Thank you for your participation in Franklin Liberty U.S. Low Volatility ETF. We look forward to serving your future investment needs. Todd Brighton, CFA Portfolio Manager The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic condi- tions. 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, coun- try, 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 complete- ness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. franklintempleton.com Semiannual Report 23


  • Page 26

    FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF Performance Summary as of September 30, 2019 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 per- formance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares. Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s incep- tion, for the period from inception to the first day of secondary trading (9/22/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 9/30/191 Cumulative Total Return2 Average Annual Total Return2 Based on Based on Based on Based on NAV3 market price4 NAV3 market price4 6-Month +9.52% +9.42% +9.52% +9.42% 1-Year +13.55% +13.69% +13.55% +13.69% 3-Year +52.71% +53.65% +15.16% +15.39% Since Inception (9/20/16) +54.36% +54.45% +15.42% +15.44% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 25 for Performance Summary footnotes. 24 Semiannual Report franklintempleton.com


  • Page 27

    FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF PERFORMANCE SUMMARY Distributions (4/1/19–9/30/19) Net Investment Income $0.217401 Total Annual Operating Expenses5 With Waiver Without Waiver 0.50% 1.12% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. There can be no guarantee that the Fund’s volatility strategy will be successful, and achieving the Fund’s volatility strategy does not mean the Fund will achieve a positive or competitive return. The volatility strategy can also be expected to limit the Fund’s participation in market price appreciation when compared to similar funds that do not attempt this strategy. Smaller and midsize-company stocks have historically experienced more price volatility than larger company stocks, especially over the short term. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. The Fund has a fee waiver and/or expense reimbursement contractually guaranteed through 7/31/20. 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. franklintempleton.com Semiannual Report 25


  • Page 28

    FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 invest- ment 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 “End- ing 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, com- pare 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 Hypothetical (actual return after expenses) (5% annual return before expenses) Expenses Expenses Beginning Ending Paid During Ending Paid During Account Account Period Account Period Net Annualized Value 4/1/19 Value 9/30/19 4/1/19–9/30/191,2 Value 9/30/19 4/1/19–9/30/191,2 Expense Ratio2 $1,000.00 $1,095.20 $2.62 $1,022.50 $2.53 0.50% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 26 Semiannual Report franklintempleton.com


  • Page 29

    FRANKLIN TEMPLETON ETF TRUST Financial Highlights Franklin Liberty International Opportunities ETF Six Months Ended Year Ended March 31, September 30, 2019 (unaudited) 2019 2018 2017a Per share operating performance (for a share outstanding throughout the period) Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27.09 $28.89 $25.58 $24.50 Income from investment operationsb: Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.47 0.51 0.45 0.09 Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.56) (1.89) 4.00 0.99 Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.09) (1.38) 4.45 1.08 Less distributions from: Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.43) (0.24) (0.74) — Net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.18) (0.40) — Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.43) (0.42) (1.14) — Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.57 $27.09 $28.89 $25.58 Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.36)% (4.70)% 17.50% 4.41% Ratios to average net assetse Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 2.34% 2.34% 3.38% 8.50% Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60% 0.60% 0.59% 0.60% Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.52% 1.89% 1.60% 1.98% Supplemental data Net assets, end of period (000’s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,299 $9,480 $5,778 $5,116 Portfolio turnover ratef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.90% 20.83% 34.08% 2.32% Portfolio turnover rate excluding portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely or in part for cashf,g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.90% —% —% —% aFor the period January 25, 2017 (commencement of operations) to March 31, 2017. bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. cBased on average daily shares outstanding. dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. eRatios are annualized for periods less than one year. fPortfolio turnover rate excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any. gEffective September 30, 2019. franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report 27


  • Page 30

    FRANKLIN TEMPLETON ETF TRUST Statement of Investments, September 30, 2019 (unaudited) Franklin Liberty International Opportunities ETF Industry Shares Value Common Stocks 98.5% Australia 2.8% BHP Group Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Metals & Mining 798 $ 19,763 Commonwealth Bank of Australia . . . . . . . . . . . . . . . . . . Banks 425 23,169 CSL Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Biotechnology 753 118,682 Ramsay Health Care Ltd. . . . . . . . . . . . . . . . . . . . . . . . . Health Care Providers & Services 684 29,926 Rio Tinto Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Metals & Mining 1,171 73,189 264,729 Austria 0.5% Lenzing AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chemicals 443 42,669 Brazil 1.4% Ambev SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beverages 2,500 11,554 a Azul SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Airlines 1,000 11,934 a B2W Cia Digital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Internet & Direct Marketing Retail 800 9,286 a B2W Cia Digital, SCR . . . . . . . . . . . . . . . . . . . . . . . . . . . Internet & Direct Marketing Retail 112 1,288 B3 SA-Brasil Bolsa Balcao . . . . . . . . . . . . . . . . . . . . . . . Capital Markets 2,500 26,186 CCR SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transportation Infrastructure 4,900 20,292 Companhia Energetica de Minas Gerais . . . . . . . . . . . . Electric Utilities 4,600 17,559 Energisa SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electric Utilities 900 10,792 a Vale SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Metals & Mining 2,100 24,073 132,964 Canada 6.6% Alimentation Couche-Tard Inc., B . . . . . . . . . . . . . . . . . . Food & Staples Retailing 2,150 65,929 Brookfield Asset Management Inc., A . . . . . . . . . . . . . . . Capital Markets 2,282 121,253 Canadian National Railway Co. . . . . . . . . . . . . . . . . . . . Road & Rail 1,025 92,095 Dollarama Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Multiline Retail 963 34,498 Enbridge Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oil, Gas & Consumable Fuels 1,575 55,315 Nutrien Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chemicals 700 34,894 Peyto Exploration & Development Corp. . . . . . . . . . . . . Oil, Gas & Consumable Fuels 2,975 7,505 Royal Bank of Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 1,105 89,694 TELUS Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diversified Telecommunication Services 1,338 47,660 The Toronto-Dominion Bank . . . . . . . . . . . . . . . . . . . . . . Banks 1,192 69,548 618,391 China 12.7% a Alibaba Group Holding Ltd., ADR . . . . . . . . . . . . . . . . . . Internet & Direct Marketing Retail 1,593 266,398 Bank of Ningbo Co. Ltd., A . . . . . . . . . . . . . . . . . . . . . . . Banks 17,500 61,779 Brilliance China Automotive Holdings Ltd. . . . . . . . . . . . Automobiles 48,000 51,555 China Merchants Bank Co. Ltd., A . . . . . . . . . . . . . . . . . Banks 6,700 32,603 China Merchants Bank Co. Ltd., H . . . . . . . . . . . . . . . . . Banks 15,500 73,749 a Ctrip.com International Ltd., ADR . . . . . . . . . . . . . . . . . . Internet & Direct Marketing Retail 2,870 84,062 Kweichow Moutai Co. Ltd., A . . . . . . . . . . . . . . . . . . . . . Beverages 100 16,104 a New Oriental Education & Technology Group Inc., ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diversified Consumer Services 175 19,383 Ping An Insurance (Group) Co. of China Ltd., H . . . . . . Insurance 12,000 137,842 a Prosus NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Internet & Direct Marketing Retail 560 41,118 Silergy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Semiconductors & Semiconductor Equipment 5,000 123,934 Sunny Optical Technology Group Co. Ltd. . . . . . . . . . . . Electronic Equipment, Instruments & Components 1,800 26,451 Tencent Holdings Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . Interactive Media & Services 4,800 202,179 Yum China Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . . . Hotels, Restaurants & Leisure 900 40,887 1,178,044 Denmark 0.7% ISS AS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commercial Services & Supplies 2,756 68,210 Egypt 0.2% a Ezz Steel Co. SAE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Metals & Mining 37,815 21,946 28 Semiannual Report franklintempleton.com


  • Page 31

    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty International Opportunities ETF (continued) Industry Shares Value Common Stocks (continued) Finland 0.7% Tieto OYJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IT Services 2,703 $ 69,250 France 2.6% Maisons du Monde SA . . . . . . . . . . . . . . . . . . . . . . . . . . . Specialty Retail 3,406 53,842 Schneider Electric SE . . . . . . . . . . . . . . . . . . . . . . . . . . . Electrical Equipment 584 51,252 Vinci SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction & Engineering 1,258 135,529 240,623 Germany 3.1% 1&1 Drillisch AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wireless Telecommunication Services 2,414 75,268 GEA Group AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Machinery 3,600 97,215 Hella GmbH & Co. KGaA . . . . . . . . . . . . . . . . . . . . . . . . . Auto Components 2,052 91,765 Rational AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Machinery 39 27,977 292,225 Hong Kong 2.4% AIA Group Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance 15,200 143,577 IMAX China Holding Inc. . . . . . . . . . . . . . . . . . . . . . . . . . Entertainment 14,000 33,038 Samsonite International SA . . . . . . . . . . . . . . . . . . . . . . . Textiles, Apparel & Luxury Goods 23,100 48,915 225,530 India 4.3% Bharti Airtel Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wireless Telecommunication Services 8,965 46,432 HDFC Bank Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 6,954 120,443 ICICI Bank Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 7,364 45,066 Infosys Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IT Services 4,055 46,098 Kotak Mahindra Bank Ltd. . . . . . . . . . . . . . . . . . . . . . . . . Banks 3,418 79,312 a MakeMyTrip Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Internet & Direct Marketing Retail 1,225 27,795 UltraTech Cement Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction Materials 554 33,937 399,083 Indonesia 0.7% ACE Hardware Indonesia Tbk PT . . . . . . . . . . . . . . . . . . Specialty Retail 87,800 10,948 Bank Central Asia Tbk PT . . . . . . . . . . . . . . . . . . . . . . . . Banks 24,800 53,024 63,972 Ireland 0.8% Glanbia PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Food Products 6,036 75,017 Italy 4.5% Banca Generali SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital Markets 3,111 95,982 FinecoBank Banca Fineco SpA . . . . . . . . . . . . . . . . . . . . Banks 8,380 88,728 Freni Brembo SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Auto Components 8,325 81,139 Prysmian SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electrical Equipment 3,883 83,395 Technogym SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leisure Equipment & Products 6,147 68,355 417,599 Japan 13.7% Aica Kogyo Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building Products 900 26,482 Central Japan Railway Co. . . . . . . . . . . . . . . . . . . . . . . . Road & Rail 200 41,120 COMSYS Holdings Corp. . . . . . . . . . . . . . . . . . . . . . . . . . Construction & Engineering 1,900 53,796 Daikin Industries Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building Products 600 78,723 Denso Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Auto Components 1,900 83,489 Fast Retailing Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . Specialty Retail 100 59,412 Hoya Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Health Care Equipment & Supplies 700 57,121 Idemitsu Kosan Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . Oil, Gas & Consumable Fuels 1,200 33,921 Japan Airlines Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . Airlines 800 23,776 Keyence Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electronic Equipment, Instruments & Components 100 61,901 Mitsubishi Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trading Companies & Distributors 1,700 41,700 franklintempleton.com Semiannual Report 29


  • Page 32

    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty International Opportunities ETF (continued) Industry Shares Value Common Stocks (continued) Japan (continued) Mitsubishi UFJ Financial Group Inc. . . . . . . . . . . . . . . . . Banks 10,100 $ 51,250 Mitsui Fudosan Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . Real Estate Management & Development 1,300 32,225 Murata Manufacturing Co. Ltd. . . . . . . . . . . . . . . . . . . . . Electronic Equipment, Instruments & Components 1,200 57,571 Nidec Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electrical Equipment 600 80,611 Nintendo Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Entertainment 100 37,030 Nippon Telegraph & Telephone Corp. . . . . . . . . . . . . . . Diversified Telecommunication Services 1,600 76,332 Pola Orbis Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . . . Personal Products 2,600 58,195 Shimadzu Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electronic Equipment, Instruments & Components 1,300 32,814 Sony Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Household Durables 1,100 64,600 Taiyo Nippon Sanso Corp. . . . . . . . . . . . . . . . . . . . . . . . Chemicals 2,200 44,438 Takeda Pharmaceutical Co. Ltd. . . . . . . . . . . . . . . . . . . . Pharmaceuticals 2,200 75,114 The Dai-ichi Life Holdings Inc. . . . . . . . . . . . . . . . . . . . . . Insurance 700 10,551 Toyota Motor Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Automobiles 800 53,415 Z Holdings Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interactive Media & Services 12,200 34,317 1,269,904 Mexico 1.2% America Movil SAB de CV, L . . . . . . . . . . . . . . . . . . . . . . Wireless Telecommunication Services 70,000 51,904 Fomento Economico Mexicano SAB de CV . . . . . . . . . . Beverages 6,650 60,980 112,884 Netherlands 0.9% ASR Nederland NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance 2,392 88,325 Norway 1.9% Atea ASA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IT Services 6,216 80,043 Sbanken ASA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 13,020 94,147 174,190 Philippines 0.7% BDO Unibank Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 11,730 32,363 Security Bank Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 8,680 32,992 65,355 Portugal 0.9% Corticeira Amorim SGPS SA . . . . . . . . . . . . . . . . . . . . . . Containers & Packaging 7,654 83,194 Russia 1.3% Gazprom PJSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oil, Gas & Consumable Fuels 20,720 72,140 a Yandex NV, A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interactive Media & Services 1,400 49,014 121,154 Singapore 0.5% DBS Group Holdings Ltd. . . . . . . . . . . . . . . . . . . . . . . . . Banks 2,500 45,195 South Africa 1.1% a MultiChoice Group Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . Media 560 4,357 Naspers Ltd., N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Internet & Direct Marketing Retail 560 84,764 Redefine Properties Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . Equity Real Estate Investment Trusts (REITs) 21,308 11,003 100,124 South Korea 2.7% Lotte Chemical Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chemicals 298 58,795 Naver Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interactive Media & Services 578 75,865 Samsung Electronics Co. Ltd. . . . . . . . . . . . . . . . . . . . . . Technology Hardware, Storage & Peripherals 2,800 114,819 249,479 Spain 5.2% Applus Services SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Professional Services 8,866 115,022 Cia de Distribucion Integral Logista Holdings SA . . . . . Air Freight & Logistics 4,961 96,704 30 Semiannual Report franklintempleton.com


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty International Opportunities ETF (continued) Industry Shares Value Common Stocks (continued) Spain (continued) Ebro Foods SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Food Products 4,691 $ 93,793 Merlin Properties Socimi SA . . . . . . . . . . . . . . . . . . . . . . . . . . Equity Real Estate Investment Trusts (REITs) 7,339 102,492 a Tecnicas Reunidas SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Energy Equipment & Services 2,472 60,745 Viscofan SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Food Products 257 12,048 480,804 Sweden 1.0% Dometic Group AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Auto Components 11,438 89,832 Switzerland 4.7% a Alcon Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Health Care Equipment & Supplies 440 25,681 Novartis AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pharmaceuticals 2,202 191,106 Roche Holding AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pharmaceuticals 754 219,625 436,412 Taiwan 2.7% Ennoconn Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Technology Hardware, Storage & Peripherals 4,000 28,300 Taiwan Semiconductor Manufacturing Co. Ltd. . . . . . . . . . . Semiconductors & Semiconductor Equipment 25,000 219,182 247,482 Thailand 1.3% Kasikornbank PCL, fgn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 5,000 25,666 Minor International PCL, fgn. . . . . . . . . . . . . . . . . . . . . . . . . . Hotels, Restaurants & Leisure 38,500 47,204 The Siam Cement PCL, fgn. . . . . . . . . . . . . . . . . . . . . . . . . . . Construction Materials 3,300 44,022 116,892 United Arab Emirates 1.0% Emirates NBD PJSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 27,076 95,459 United Kingdom 12.5% Associated British Foods PLC . . . . . . . . . . . . . . . . . . . . . . . . Food Products 2,013 57,129 AstraZeneca PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pharmaceuticals 910 81,424 Bodycote PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Machinery 9,157 80,851 BP PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oil, Gas & Consumable Fuels 11,103 70,573 British American Tobacco PLC . . . . . . . . . . . . . . . . . . . . . . . . Tobacco 2,704 100,214 Bunzl PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trading Companies & Distributors 3,519 92,150 Derwent London PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity Real Estate Investment Trusts (REITs) 1,628 67,608 DS Smith PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Containers & Packaging 13,231 58,762 Ferguson PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trading Companies & Distributors 802 58,745 Howden Joinery Group PLC . . . . . . . . . . . . . . . . . . . . . . . . . . Trading Companies & Distributors 11,593 80,059 b Ibstock PLC, Reg S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction Materials 18,347 53,403 Imperial Brands PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tobacco 31 698 National Grid PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Multi-Utilities 9,087 98,754 Prudential PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance 4,448 80,849 Reckitt Benckiser Group PLC . . . . . . . . . . . . . . . . . . . . . . . . . Household Products 578 45,186 RELX PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Professional Services 2,779 66,180 Restore PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commercial Services & Supplies 73 367 Smith & Nephew PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Health Care Equipment & Supplies 3,042 73,436 1,166,388 United States 1.2% Amcor PLC, IDR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Containers & Packaging 8,567 82,337 Autoliv Inc., SDR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Auto Components 355 27,693 110,030 Total Common Stocks (Cost $9,371,858) .... 9,163,355 franklintempleton.com Semiannual Report 31


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty International Opportunities ETF (continued) Industry Shares Value Preferred Stocks 0.7% Brazil 0.7% c Banco Bradesco SA, 2.969%, pfd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 3,180 $ 25,896 c Itau Unibanco Holding SA, 4.930%, pfd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks 2,000 16,819 c Petroleo Brasileiro SA, 4.123%, pfd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oil, Gas & Consumable Fuels 2,900 19,181 Total Preferred Stocks (Cost $53,847) .................... 61,896 Warrants (Cost $—) 0.0%† Thailand 0.0%† a Minor International PCL, wts., 9/30/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hotels, Restaurants & Leisure 1,925 251 Total Investments (Cost $9,425,705) 99.2% . . . . . . . . . . . . . . . 9,225,502 Other Assets, less Liabilities 0.8% . . . . . . . . . . . . . . . . . . . . . . . . 73,843 Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,299,345 See Abbreviations on page 63. †Rounds to less than 0.1% of net assets. aNon-income producing. bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. This security has been deemed liquid under guidelines approved by the Fund’s Board of Trustees. At September 30, 2019, the value of this security was $53,403, representing 0.6% of net assets. cVariable rate security. The rate shown represents the yield at period end. 32 Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com


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    FRANKLIN TEMPLETON ETF TRUST Financial Highlights Franklin Liberty Investment Grade Corporate ETF Six Months Ended Year Ended March 31, September 30, 2019 (unaudited) 2019 2018 2017a Per share operating performance (for a share outstanding throughout the period) Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24.09 $23.97 $24.21 $25.00 Income from investment operationsb: Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.38 0.82 0.80 0.32 Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.51 0.21 (0.22) (0.78) Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.89 1.03 0.58 (0.46) Less distributions from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.41) (0.91) (0.82) (0.33) Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25.57 $24.09 $23.97 $24.21 Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.88% 4.46% 2.38% (1.83)% Ratios to average net assetse Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . 0.65% 1.07% 1.04% 1.06% Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . 0.35% 0.35% 0.37% 0.40% Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08% 3.49% 3.27% 2.76% Supplemental data Net assets, end of period (000’s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $232,717 $18,065 $39,554 $53,268 Portfolio turnover ratef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.70% 22.02% 63.14% 17.85% Portfolio turnover rate excluding portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely or in part for cashf,g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.70% —% —% —% aFor the period October 3, 2016 (commencement of operations) to March 31, 2017. bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. cBased on average daily shares outstanding. dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. eRatios are annualized for periods less than one year. fPortfolio turnover rate excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any. gEffective September 30, 2019. franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report 33


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    FRANKLIN TEMPLETON ETF TRUST Statement of Investments, September 30, 2019 (unaudited) Franklin Liberty Investment Grade Corporate ETF Country Principal Amount* Value Corporate Bonds & Notes 97.2% Aerospace & Defense 1.8% a L3Harris Technologies Inc., senior note, 144A, 3.85%, 6/15/23 . . . . . . . . . . United States 500,000 $ 527,118 Lockheed Martin Corp., senior bond, 3.55%, 1/15/26 . . . . . . . . . . . . . . . . . . . United States 2,300,000 2,467,772 United Technologies Corp., senior bond, 4.50%, 6/01/42 . . . . . . . . . . . . . . . . United States 1,000,000 1,199,700 4,194,590 Air Freight & Logistics 0.6% FedEx Corp., senior bond, 4.75%, 11/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 800,000 862,097 senior bond, 5.10%, 1/15/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 500,000 560,812 1,422,909 Banks 25.0% a ANZ New Zealand International Ltd. of London, senior note, 144A, 2.875%, 1/25/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New Zealand 200,000 203,216 Bank of America Corp., sub. bond, 4.183%, 11/25/27 . . . . . . . . . . . . . . . . . . United States 6,350,000 6,860,244 Barclays PLC, senior note, 4.375%, 1/12/26 . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom 1,400,000 1,480,410 BB&T Corp., sub. bond, 3.875%, 3/19/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 5,300,000 5,748,846 a BPCE SA, sub note, 144A, 5.15%, 7/21/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . France 1,800,000 1,972,276 Citigroup Inc., senior note, FRN, 3.352%, 4/24/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 5,700,000 5,909,818 sub. note, 4.05%, 7/30/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 345,000 361,437 a Commonwealth Bank of Australia, sub. note, 144A, 4.50%, 12/09/25 . . . . . . Australia 390,000 421,439 Credit Suisse Group Funding Guernsey Ltd., senior note, 3.80%, 9/15/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Switzerland 5,900,000 6,137,430 Danske Bank A/S, senior note, FRN, 3.244%, 12/20/24 . . . . . . . . . . . . . . . . . Denmark 2,600,000 2,622,768 HSBC Holdings PLC, senior note, 4.30%, 3/08/26 . . . . . . . . . . . . . . . . . . . . . United Kingdom 5,400,000 5,836,962 JPMorgan Chase & Co., senior bond, 3.54% to 5/01/27, FRN thereafter, 5/01/28, 3.54%, 5/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 4,150,000 4,379,518 sub. note, 3.375%, 5/01/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 425,000 439,828 Regions Financial Corp., senior note, 3.80%, 8/14/23 . . . . . . . . . . . . . . . . . . United States 2,900,000 3,058,584 Santander UK Group Holdings PLC, senior note, 2.875%, 8/05/21 . . . . . . . . United Kingdom 230,000 231,066 a Standard Chartered PLC, senior note, 144A, 3.885% to 3/15/23, FRN thereafter, 3/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom 4,425,000 4,570,271 Sumitomo Mitsui Banking Corp., senior note, 2.514%, 1/17/20 . . . . . . . . . . . Japan 450,000 450,493 SunTrust Bank, sub. note, 3.30%, 5/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,500,000 1,557,712 The Toronto-Dominion Bank, Sr. Unsecured, GMTN, 3.25%, 3/11/24 . . . . . Canada 3,200,000 3,346,481 Wells Fargo & Co., sub. bond, 4.75%, 12/07/46 . . . . . . . . . . . . . . . . . . . . . . . United States 185,000 218,722 Wells Fargo Bank NA, senior note, FRN, 2.082%, 9/09/22 . . . . . . . . . . . . . . United States 2,300,000 2,295,353 58,102,874 Beverages 2.6% Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide Inc., senior bond, 4.70%, 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Belgium 340,000 393,344 Anheuser-Busch InBev Worldwide Inc., senior bond, 5.80%, 1/23/59 . . . . . . Belgium 2,000,000 2,704,565 Coca-Cola Femsa SAB de CV, senior note, 3.875%, 11/26/23 . . . . . . . . . . . Mexico 2,700,000 2,857,480 5,955,389 Biotechnology 2.3% Biogen Inc., senior bond, 5.20%, 9/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,685,000 2,000,516 Celgene Corp., senior bond, 5.00%, 8/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,000,000 1,255,668 Gilead Sciences Inc., senior bond, 4.80%, 4/01/44 . . . . . . . . . . . . . . . . . . . . . United States 1,700,000 2,036,052 5,292,236 Building Products 0.5% a CRH America Finance Inc., senior note, 144A, 3.95%, 4/04/28 . . . . . . . . . . . United States 1,000,000 1,070,151 34 Semiannual Report franklintempleton.com


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty Investment Grade Corporate ETF (continued) Country Principal Amount* Value Corporate Bonds & Notes (continued) Capital Markets 4.9% Morgan Stanley, senior bond, 3.591% to 7/22/27, FRN thereafter, 3.591%, 7/22/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 5,880,000 $ 6,203,404 The Goldman Sachs Group Inc., senior note, 3.50%, 1/23/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,500,000 2,607,830 sub. note, 4.25%, 10/21/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,475,000 1,579,668 a UBS Group Funding Switzerland AG, senior note, 144A, 4.125%, 9/24/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Switzerland 1,000,000 1,081,201 11,472,103 Chemicals 1.3% LYB International Finance BV, senior note, 4.00%, 7/15/23 . . . . . . . . . . . . . . United States 2,900,000 3,068,355 Communications Equipment 0.8% Juniper Networks Inc., senior bond, 4.50%, 3/15/24 . . . . . . . . . . . . . . . . . . . . United States 1,800,000 1,934,091 Consumer Finance 1.3% Capital One Financial Corp., senior bond, 3.80%, 1/31/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,478,290 senior note, 3.30%, 10/30/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,450,000 1,501,765 2,980,055 Containers & Packaging 1.1% International Paper Co., senior bond, 3.80%, 1/15/26 . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,488,310 WRKCo. Inc., senior note, 3.90%, 6/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,000,000 1,056,034 2,544,344 Diversified Financial Services 1.1% a Ashtead Capital Inc., second lien, 144A, 4.125%, 8/15/25 . . . . . . . . . . . . . . . United Kingdom 1,770,000 1,809,825 GE Capital International Funding Co., senior bond, 4.418%, 11/15/35 . . . . . United States 825,000 864,829 2,674,654 Diversified Telecommunication Services 1.7% AT&T Inc., senior note, 3.60%, 7/15/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 225,000 237,149 Koninklijke KPN NV, 8.375%, 10/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Netherlands 700,000 957,766 Telefonica Emisiones SA, senior bond, 5.52%, 3/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spain 1,650,000 2,011,734 senior bond, 7.045%, 6/20/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spain 185,000 255,747 Verizon Communications Inc., senior bond, 5.50%, 3/16/47 . . . . . . . . . . . . . United States 355,000 469,168 3,931,564 Electric Utilities 7.0% Duke Energy Corp., senior bond, 4.80%, 12/15/45 . . . . . . . . . . . . . . . . . . . . . United States 2,565,000 3,079,359 a Electricite de France SA, senior note, 144A, 4.50%, 9/21/28 . . . . . . . . . . . . . France 2,200,000 2,458,385 a Enel Finance International NV, senior note, 144A, 4.25%, 9/14/23 . . . . . . . . Italy 3,300,000 3,506,954 Georgia Power Co., senior bond, 4.30%, 3/15/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 245,000 269,832 senior bond, 4.75%, 9/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,950,000 2,264,876 PSEG Power LLC, senior note, 3.85%, 6/01/23 . . . . . . . . . . . . . . . . . . . . . . . United States 4,100,000 4,333,566 a Saudi Electricity Global Sukuk Co. 2, senior bond, 144A, 5.06%, 4/08/43 . . Saudi Arabia 300,000 341,164 16,254,136 Electronic Equipment, Instruments & Components 0.8% Tech Data Corp., senior bond, 4.95%, 2/15/27 . . . . . . . . . . . . . . . . . . . . . . . . United States 1,700,000 1,826,005 Energy Equipment & Services 2.2% Baker Hughes a GE Co. LLC/Baker Hughes Co-obligator Inc., senior bond, 4.08%, 12/15/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,485,000 2,505,342 a Schlumberger Holdings Corp., senior note, 144A, 3.75%, 5/01/24 . . . . . . . . United States 2,400,000 2,529,155 5,034,497 franklintempleton.com Semiannual Report 35


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty Investment Grade Corporate ETF (continued) Country Principal Amount* Value Corporate Bonds & Notes (continued) Entertainment 2.4% a Tencent Holdings Ltd., senior note, 144A, 3.595%, 1/19/28 . . . . . . . . . . . . . . . . . China 3,200,000 $ 3,343,590 a TWDC Holdco 613 Corp., senior bond, 144A, 6.40%, 12/15/35 . . . . . . . . . . . . . . United States 1,603,000 2,312,291 5,655,881 Equity Real Estate Investment Trusts (REITs) 1.6% American Tower Corp., senior bond, 3.55%, 7/15/27 . . . . . . . . . . . . . . . . . . . . . . United States 3,300,000 3,477,924 Realty Income Corp., senior bond, 3.00%, 1/15/27 . . . . . . . . . . . . . . . . . . . . . . . . United States 250,000 257,818 3,735,742 Food & Staples Retailing 2.1% a CK Hutchison International 19 Ltd., senior note, 144A, 3.25%, 4/11/24 . . . . . . . Hong Kong 1,725,000 1,779,265 The Kroger Co., senior bond, 3.50%, 2/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,100,000 2,189,862 senior bond, 5.40%, 1/15/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 700,000 829,823 4,798,950 Food Products 2.3% Bunge Ltd. Finance Corp., senior note, 4.35%, 3/15/24 . . . . . . . . . . . . . . . . . . . . United States 1,700,000 1,791,835 Kraft Heinz Foods Co., senior bond, 5.20%, 7/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 185,000 194,790 senior bond, 6.50%, 2/09/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 1,304,161 Tyson Foods Inc., senior bond, 5.10%, 9/28/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,680,000 2,044,197 5,334,983 Health Care Equipment & Supplies 0.7% Abbott Laboratories, senior bond, 3.75%, 11/30/26 . . . . . . . . . . . . . . . . . . . . . . . . United States 1,500,000 1,635,466 Health Care Providers & Services 2.8% Anthem Inc., senior bond, 5.10%, 1/15/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 570,000 664,865 senior note, 4.101%, 3/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,085,000 1,172,849 Cigna Corp., senior bond, 4.90%, 12/15/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,750,000 2,010,281 CVS Health Corp., senior bond, 5.30%, 12/05/43 . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,300,000 2,682,288 6,530,283 Hotels, Restaurants & Leisure 0.6% Marriott International Inc., senior note, 3.60%, 4/15/24 . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,469,973 Household Products 0.1% Kimberly-Clark Corp., senior bond, 3.95%, 11/01/28 . . . . . . . . . . . . . . . . . . . . . . United States 290,000 329,387 Industrial Conglomerates 0.8% General Electric Capital Corp., senior note, A, 6.15%, 8/07/37 . . . . . . . . . . . . . . United States 1,500,000 1,849,349 Insurance 5.3% Aflac Inc., senior bond, 4.75%, 1/15/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,250,000 1,528,722 AXA SA, 8.60%, 12/15/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France 1,000,000 1,445,900 Marsh & McLennan Cos. Inc., senior bond, 3.50%, 3/10/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 3,100,000 3,279,306 senior note, 3.875%, 3/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,400,000 2,557,390 MetLife Inc., junior sub. bond, 6.40%, 12/15/66 . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,710,000 2,030,625 Prudential Financial Inc., junior sub. bond, 5.20% to 3/15/24, FRN thereafter, 3/15/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 230,000 240,527 The Allstate Corp., senior bond, 4.20%, 12/15/46 . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,000,000 1,163,008 12,245,478 Internet & Direct Marketing Retail 1.3% Alibaba Group Holding Ltd., senior note, 2.50%, 11/28/19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 615,000 615,111 senior note, 3.125%, 11/28/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 2,300,000 2,336,699 2,951,810 36 Semiannual Report franklintempleton.com


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty Investment Grade Corporate ETF (continued) Country Principal Amount* Value Corporate Bonds & Notes (continued) Machinery 0.5% Caterpillar Inc., senior bond, 4.75%, 5/15/64 . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,000,000 $ 1,260,099 Media 2.3% Charter Communications Operating LLC / Charter Communications Operating Capital, senior bond, first lien, 4.50%, 2/01/24 . . . . . . . . . . . . . United States 1,500,000 1,612,516 Charter Communications Operating LLC/Charter Communications Operating Capital Corp., senior secured note, first lien, 4.464%, 7/23/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 170,000 179,038 Comcast Corp., senior bond, 4.95%, 10/15/58 . . . . . . . . . . . . . . . . . . . . . . . . United States 2,900,000 3,691,148 5,482,702 Metals & Mining 1.7% Glencore Funding LLC, a senior note, 144A, 4.125%, 5/30/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,925,000 2,015,847 a senior note, 144A, 4.625%, 4/29/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,800,000 1,927,365 3,943,212 Multi-Utilities 0.9% Dominion Energy Inc., senior note, 4.25%, 6/01/28 . . . . . . . . . . . . . . . . . . . . United States 1,800,000 1,994,553 Multiline Retail 1.0% Dollar General Corp., senior bond, 3.875%, 4/15/27 . . . . . . . . . . . . . . . . . . . . United States 900,000 965,409 Dollar Tree Inc., senior note, 3.70%, 5/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 150,000 155,663 senior note, 4.00%, 5/15/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 1,166,445 2,287,517 Oil, Gas & Consumable Fuels 5.9% Canadian Natural Resources Ltd., senior bond, 3.90%, 2/01/25 . . . . . . . . . . Canada 1,450,000 1,529,215 Chevron Corp., senior note, 2.954%, 5/16/26 . . . . . . . . . . . . . . . . . . . . . . . . . United States 545,000 570,366 Ecopetrol SA, senior bond, 5.875%, 5/28/45 . . . . . . . . . . . . . . . . . . . . . . . . . . Colombia 135,000 157,951 Energy Transfer Operating LP, senior bond, 6.05%, 6/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 1,259,842 senior bond, 6.50%, 2/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 150,000 180,227 Enterprise Products Operating LLC, senior bond, 5.10%, 2/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,270,000 1,497,324 senior bond, 6.125%, 10/15/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 700,000 910,460 Kinder Morgan Inc., senior bond, 5.55%, 6/01/45 . . . . . . . . . . . . . . . . . . . . . . United States 2,100,000 2,478,874 MPLX LP, senior bond, 5.50%, 2/15/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,175,000 1,364,666 Occidental Petroleum Corp., senior note, 2.60%, 8/13/21 . . . . . . . . . . . . . . . United States 1,700,000 1,711,693 Shell International Finance BV, senior note, 2.125%, 5/11/20 . . . . . . . . . . . . Netherlands 500,000 501,284 TC PipeLines LP, senior note, 3.90%, 5/25/27 . . . . . . . . . . . . . . . . . . . . . . . . United States 400,000 417,388 Valero Energy Corp., senior note, 4.35%, 6/01/28 . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 1,195,035 13,774,325 Pharmaceuticals 2.7% AstraZeneca PLC, senior bond, 4.375%, 11/16/45 . . . . . . . . . . . . . . . . . . . . . United Kingdom 2,900,000 3,412,260 Shire Acquisitions Investments Ireland Designated Activity Co., senior note, 3.20%, 9/23/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ireland 2,900,000 2,994,650 6,406,910 Professional Services 0.2% IHS Markit Ltd., senior bond, 4.125%, 8/01/23 . . . . . . . . . . . . . . . . . . . . . . . . Bermuda 500,000 526,775 Real Estate Management & Development 0.6% Healthcare Trust of America Holdings LP, senior bond, 3.75%, 7/01/27 . . . . United States 1,300,000 1,362,129 Road & Rail 0.9% Burlington Northern Santa Fe LLC, senior bond, 3.25%, 6/15/27 . . . . . . . . . United States 235,000 250,820 franklintempleton.com Semiannual Report 37


  • Page 40

    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty Investment Grade Corporate ETF (continued) Country Principal Amount* Value Corporate Bonds & Notes (continued) Road & Rail (continued) CSX Corp., senior bond, 4.25%, 11/01/66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,800,000 $ 1,912,706 2,163,526 Semiconductors & Semiconductor Equipment 1.3% Maxim Integrated Products Inc., senior note, 3.375%, 3/15/23 . . . . . . . . . . . United States 2,900,000 2,987,065 Software 1.1% Microsoft Corp., senior note, 2.65%, 11/03/22 . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,500,000 2,564,230 Specialty Retail 0.7% AutoZone Inc., senior note, 3.75%, 4/18/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,300,000 1,395,117 a Michael Kors USA Inc., senior note, 144A, 4.00%, 11/01/24 . . . . . . . . . . . . . United States 190,000 194,475 1,589,592 Textiles, Apparel & Luxury Goods 0.1% NIKE Inc., senior bond, 3.875%, 11/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 225,000 257,534 Tobacco 1.1% a Imperial Brands Finance PLC, senior note, 144A, 4.25%, 7/21/25 . . . . . . . . United Kingdom 1,065,000 1,116,440 Reynolds American Inc., senior bond, 5.85%, 8/15/45 . . . . . . . . . . . . . . . . . . United Kingdom 1,305,000 1,446,269 2,562,709 Trading Companies & Distributors 0.7% Aircastle Ltd., senior note, 4.25%, 6/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bermuda 1,500,000 1,538,737 Wireless Telecommunication Services 0.5% a Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC, first lien,144A, 3.36%, 3/20/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,250,000 1,257,813 Total Corporate Bonds & Notes (Cost $215,792,979) . . . . . 226,254,683 U.S. Government & Agency Securities 1.0% U.S. Treasury Bond, 3.75%, 8/15/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,800,000 2,346,258 Total U.S. Government & Agency Securities (Cost $2,387,538) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,346,258 Total Investments before Short Term Investments (Cost $218,180,517) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,600,941 Short Term Investments 1.0% U.S. Government & Agency Securities (Cost $2,340,000) 1.0% b FHLB, 1.602%, 10/01/19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,340,000 2,340,000 Total Short-Term Investment (Cost $2,340,000) .......... 2,340,000 Total Investments (Cost $220,520,517) 99.2% . . . . . . . . . . . . 230,940,941 Other Assets, less Liabilities 0.8% . . . . . . . . . . . . . . . . . . . . . . . . 1,776,216 Net Assets 100.0% .......................................... $232,717,157 See Abbreviations on page 63. *The principal amount is stated in U.S. dollars unless otherwise indicated. aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Fund’s Board of Trustees. At September 30, 2019, the aggregate value of these securities was $34,438,241, representing 14.8% of net assets. bThe security was issued on a discount basis with no stated coupon rate. 38 Semiannual Report franklintempleton.com


  • Page 41

    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty Investment Grade Corporate ETF (continued) At September 30, 2019, the Fund had the following futures contracts outstanding. See Note 1(c). Futures Contracts Value/Unrealized Number of Notional Expiration Appreciation Description Type Contracts Amount* Date (Depreciation) Index Contracts U.S. Treasury 30 Yr. Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Long 102 $ 16,555,875 12/19/19 $(278,254) U.S. Treasury 5 Yr. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short (22) (2,621,266) 12/31/19 24,206 CME Ultra Long Term U.S. Treasury Bond . . . . . . . . . . . . . . . . . . . . . . Short (15) (2,878,594) 12/19/19 95,603 Ultra 10 Yr. U.S. Treasury Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short (38) (5,411,438) 12/19/19 94,770 U.S. Treasury 10 Yr. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short (124) (16,158,750) 12/19/19 230,393 Total Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 166,718 *As of period end. See Abbreviations on page 63. franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report 39


  • Page 42

    FRANKLIN TEMPLETON ETF TRUST Financial Highlights Franklin Liberty U.S. Low Volatility ETF Six Months Ended Year Ended March 31, September 30, 2019 (unaudited) 2019 2018 2017a Per share operating performance (for a share outstanding throughout the period) Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33.61 $30.03 $26.97 $25.05 Income from investment operationsb: Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 0.52 0.45 0.23 Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.92 3.88 3.06 1.87 Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 4.40 3.51 2.10 Less distributions from: Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.22) (0.47) (0.45) (0.18) Net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.35) — — Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.22) (0.82) (0.45) (0.18) Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36.59 $33.61 $30.03 $26.97 Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.52% 14.98% 13.08% 8.40% Ratios to average net assetse Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 0.99% 1.12% 2.11% 2.96% Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 0.50% 0.50% 0.50% 0.50% Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.61% 1.64% 1.56% 1.69% Supplemental data Net assets, end of period (000’s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $56,716 $13,443 $6,005 $5,393 Portfolio turnover ratef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.67% 46.90% 65.68% 12.55% Portfolio turnover rate excluding portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely or in part for cashf,g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.67% —% —% —% aFor the period September 20, 2016 (commencement of operations) to March 31, 2017. bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. cBased on average daily shares outstanding. dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. eRatios are annualized for periods less than one year. fPortfolio turnover rate excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any. gEffective September 30, 2019. 40 Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com


  • Page 43

    FRANKLIN TEMPLETON ETF TRUST Statement of Investments, September 30, 2019 (unaudited) Franklin Liberty U.S. Low Volatility ETF Shares Value Common Stocks 99.4% Communication Services 9.8% a Alphabet Inc., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 653 $ 797,405 AT&T Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,895 828,507 a Charter Communications Inc., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,895 780,967 Comcast Corp., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,428 785,654 TELUS Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,140 788,627 The Walt Disney Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,107 795,864 Verizon Communications Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,555 818,180 5,595,204 Consumer Discretionary 10.7% Lowe’s Cos. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,703 737,062 Marriott International Inc., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,798 721,097 McDonald’s Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,566 765,656 NIKE Inc., B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,558 803,767 a O’Reilly Automotive Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,923 766,335 Ross Stores Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,915 759,613 The Home Depot Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,288 762,882 Tractor Supply Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,155 737,538 6,053,950 Consumer Staples 7.1% Mondelez International Inc., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,478 800,923 PepsiCo Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,866 804,229 The Coca-Cola Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,635 796,729 The Procter & Gamble Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,519 810,833 Walmart Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,822 809,635 4,022,349 Energy 4.1% Chevron Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,944 467,759 Exxon Mobil Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,761 477,394 Kinder Morgan Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,657 487,571 Occidental Petroleum Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,673 474,628 Schlumberger Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,961 442,877 2,350,229 Financials 13.0% Aflac Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,775 668,388 Arthur J. 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Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,190 689,434 franklintempleton.com Semiannual Report 41


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty U.S. Low Volatility ETF (continued) Shares Value Common Stocks (continued) Health Care (continued) Pfizer Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,854 $ 677,424 Quest Diagnostics Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,512 696,979 Stryker Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,105 671,611 UnitedHealth Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,949 640,877 7,471,314 Industrials 9.6% General Dynamics Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,228 589,852 Honeywell International Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,635 615,042 Ingersoll-Rand PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,903 604,099 Lockheed Martin Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,528 596,012 Raytheon Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,043 597,006 Republic Services Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,072 612,081 Roper Technologies Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,706 608,360 United Technologies Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,410 602,053 Verisk Analytics Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,821 604,253 5,428,758 Information Technology 21.8% Accenture PLC, A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,224 812,486 Amphenol Corp., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,747 844,086 Apple Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,725 834,288 Automatic Data Processing Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,178 835,833 Cisco Systems Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,774 828,803 a Fiserv Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,851 813,285 Global Payments Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,060 804,540 International Business Machines Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,768 838,783 Intuit Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,044 809,521 Mastercard Inc., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,981 809,550 Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,835 811,240 Oracle Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,447 850,049 a Synopsys Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,016 825,696 Texas Instruments Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,393 826,231 Visa Inc., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,684 805,695 12,350,086 Materials 2.8% Air Products and Chemicals Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,364 524,477 Ecolab Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,675 529,757 Linde PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,706 524,206 1,578,440 Real Estate 4.0% Alexandria Real Estate Equities Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,691 568,562 American Tower Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,488 550,171 Equity Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,641 572,853 UDR Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,788 571,482 2,263,068 Utilities 3.3% Dominion Energy Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,767 467,358 DTE Energy Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,536 470,146 Duke Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,960 475,465 Xcel Energy Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,257 470,907 1,883,876 Total Investments before Short Term Investments (Cost $53,052,223) .............. 56,358,961 42 Semiannual Report franklintempleton.com


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty U.S. Low Volatility ETF (continued) Shares Value Short Term Investments 0.5% U.S. Government & Agency Securities 0.5% b FHLB,1.602%, 10/01/19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,000 $ 295,000 Total Short-Term Investment (Cost $295,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,000 Total Investments (Cost $53,347,223) 99.9% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,653,961 Other Assets, less Liabilities 0.1% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,092 Net Assets 100.0% ...................................................................... $56,716,053 See Abbreviations on page 63. aNon-income producing. bThe security was issued on a discount basis with no stated coupon rate. franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report 43


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    FRANKLIN TEMPLETON ETF TRUST Financial Highlights Franklin Liberty U.S. Core Bond ETF Period ending September 30, 2019 (unaudited)a Per share operating performance (for a share outstanding throughout the period) Net asset value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25.00 Income from investment operationsb: Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.02 Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.16 Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.18 Less distributions from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00d Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25.18 Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.74% Ratios to average net assetsf Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20% Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15% Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.70% Supplemental data Net assets, end of period (000’s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $538,905 Portfolio turnover rateg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.99% Portfolio turnover rate excluding portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely or in part for cashg,h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.99% aFor the period September 17, 2019 (commencement of operations) to September 30, 2019. bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. cBased on average daily shares outstanding. dAmount rounds to less than $0.01 per share. eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. fRatios are annualized for periods less than one year. gPortfolio turnover rate excludes the value of portfolio securities received or delivered as a result of processing capital share transactions in Creation Units, if any. hEffective September 30, 2019. 44 Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com


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    FRANKLIN TEMPLETON ETF TRUST Statement of Investments, September 30, 2019 (unaudited) Franklin Liberty U.S. Core Bond ETF Country Principal Amount* Value Corporate Bonds & Notes 29.0% Aerospace & Defense 0.5% Lockheed Martin Corp., senior bond, 4.09%, 9/15/52 . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 $ 1,295,715 United Technologies Corp., senior bond, 3.75%, 11/01/46 . . . . . . . . . . . . . . . . . United States 1,300,000 1,432,835 2,728,550 Air Freight & Logistics 0.3% FedEx Corp., senior bond, 4.05%, 2/15/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,375,425 Banks 4.2% Bank of America Corp., senior note, 2.881%, 4/24/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,000,000 1,015,120 senior sub. bond, 4.25%, 10/22/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,250,000 2,431,417 BB&T Corp., sub. bond, 3.875%, 3/19/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,250,000 2,440,548 a BNP Paribas SA, senior note, FRN thereafter, 144A, 4.705%, 1/10/25 . . . . . . . France 3,050,000 3,298,708 BPCE SA, a 144A, 4.875%, 4/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France 1,800,000 1,960,767 a senior note, 144A, 5.70%, 10/22/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France 1,100,000 1,213,594 Branch Banking & Trust Co., sub. note, 3.625%, 9/16/25 . . . . . . . . . . . . . . . . . . France 800,000 850,973 Citigroup Inc., senior note, 2.876%, 7/24/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 3,100,000 3,141,058 Subordinated, 3.875%, 3/26/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100,000 105,299 JPMorgan Chase & Co., sub. note, 3.375%, 5/01/23 . . . . . . . . . . . . . . . . . . . . . United States 3,100,000 3,208,156 SunTrust Bank Atlanta GA, senior note, 2.75%, 5/01/23 . . . . . . . . . . . . . . . . . . United States 3,100,000 3,156,866 22,822,506 Biotechnology 0.9% Biogen Inc., senior note, 3.625%, 9/15/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,650,000 2,756,229 senior note, 4.05%, 9/15/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 500,000 542,075 Gilead Sciences Inc., senior bond, 4.15%, 3/01/47 . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,559,986 4,858,290 Building Products 0.4% CRH America Finance Inc., senior note, 3.40%, 5/09/27 . . . . . . . . . . . . . . . . . . Ireland 1,850,000 1,912,454 Capital Markets 1.8% a Credit Suisse Group AG, senior note, FRN thereafter, 144A, 2.997%, 12/14/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Switzerland 3,350,000 3,385,557 Morgan Stanley, senior note, 2.625%, 11/17/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 200,000 201,971 senior note, 3.70%, 10/23/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 800,000 847,644 sub. bond, 3.95%, 4/23/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,000,000 2,117,281 The Goldman Sachs Group Inc., senior bond, 4.411%, 4/23/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,583,957 senior note, 2.908%, 6/05/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,418,795 9,555,205 Chemicals 0.6% LYB International Finance II BV, senior note, 3.50%, 3/02/27 . . . . . . . . . . . . . . United States 3,300,000 3,402,305 Commercial Services & Supplies 0.3% Boardwalk Pipelines LP, senior note, 4.80%, 5/03/29 . . . . . . . . . . . . . . . . . . . . . United States 1,450,000 1,541,273 Construction Materials 0.1% a CRH America Inc., senior note, 144A, 3.875%, 5/18/25 . . . . . . . . . . . . . . . . . . . Ireland 500,000 528,932 Consumer Finance 0.7% Capital One Financial Corp., senior bond, 3.50%, 6/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,450,000 1,511,096 senior note, 3.75%, 3/09/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,050,000 2,153,744 3,664,840 franklintempleton.com Semiannual Report 45


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty U.S. Core Bond ETF (continued) Country Principal Amount* Value Corporate Bonds & Notes (continued) Containers & Packaging 0.2% WRKCo Inc., Sr. Unsecured, 4.00%, 3/15/28 . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 $ 1,172,517 Diversified Telecommunication Services 0.9% AT&T Inc., senior note, 3.875%, 1/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,050,000 2,176,545 Sr. Unsecured, 3.80%, 2/15/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,000,000 1,059,986 Telefonica Emisiones SA, senior bond, 4.895%, 3/06/48 . . . . . . . . . . . . . . . . Spain 900,000 1,006,341 Time Warner Entertainment Co. LP, senior bond, 8.375%, 3/15/23 . . . . . . . United States 700,000 829,234 5,072,106 Electric Utilities 2.0% Alabama Power Co., senior note, 2.45%, 3/30/22 . . . . . . . . . . . . . . . . . . . . . . United States 300,000 303,190 Baltimore Gas & Electric Co., senior bond, 3.50%, 8/15/46 . . . . . . . . . . . . . . United States 1,400,000 1,456,006 Duke Energy Carolinas LLC, secured bond, 3.70%, 12/01/47 . . . . . . . . . . . . United States 1,400,000 1,522,290 Georgia Power Co., senior bond, 4.75%, 9/01/40 . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,626,065 MidAmerican Energy Co., secured bond, 3.65%, 8/01/48 . . . . . . . . . . . . . . . United States 1,100,000 1,200,773 PSEG Power LLC, senior note, 3.85%, 6/01/23 . . . . . . . . . . . . . . . . . . . . . . . United States 300,000 317,090 Public Service Electric & Gas Co., secured bond, 3.80%, 3/01/46 . . . . . . . . United States 1,100,000 1,228,715 a State Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 1,700,000 1,796,442 Virginia Electric & Power Co., Sr. Unsecured, B, 3.80%, 9/15/47 . . . . . . . . . United States 1,100,000 1,192,754 10,643,325 Electronic Equipment, Instruments & Components 0.8% Keysight Technologies Inc., senior note, 4.60%, 4/06/27 . . . . . . . . . . . . . . . . United States 1,100,000 1,211,445 Tech Data Corp., senior note, 3.70%, 2/15/22 . . . . . . . . . . . . . . . . . . . . . . . . . United States 3,100,000 3,170,553 4,381,998 Energy Equipment & Services 0.8% Baker Hughes a GE Co. LLC/Baker Hughes Co-obligator Inc., senior bond, 4.08%, 12/15/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 1,109,005 a Schlumberger Holdings Corp., Sr. Unsecured, 144A, 3.90%, 5/17/28 . . . . . United States 2,750,000 2,913,318 Total Capital International SA, Sr. Unsecured, 3.461%, 7/12/49 . . . . . . . . . . France 400,000 422,823 4,445,146 Equity Real Estate Investment Trusts (REITs) 1.0% Essex Portfolio LP, Sr. Unsecured, 4.00%, 3/01/29 . . . . . . . . . . . . . . . . . . . . United States 2,250,000 2,459,079 Kimco Realty Corp., senior note, 3.30%, 2/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,250,000 2,322,035 Sr. Unsecured, 4.25%, 4/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 750,000 809,171 5,590,285 Food & Staples Retailing 0.4% The Kroger Co., senior bond, 4.45%, 2/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . United States 950,000 981,622 Walgreens Boots Alliance Inc., senior note, 3.45%, 6/01/26 . . . . . . . . . . . . . United States 800,000 826,816 Walgreens Boots Alliance, Inc., senior bond, 4.80%, 11/18/44 . . . . . . . . . . . United States 400,000 423,109 2,231,547 Food Products 0.6% BAT Capital Corp., senior bond, 4.54%, 8/15/47 . . . . . . . . . . . . . . . . . . . . . . . United Kingdom 750,000 720,223 Bunge Ltd. Finance Corp., senior note, 3.75%, 9/25/27 . . . . . . . . . . . . . . . . . United States 1,450,000 1,488,193 Kraft Heinz Foods Co., senior bond, 4.375%, 6/01/46 . . . . . . . . . . . . . . . . . . United States 950,000 908,607 3,117,023 Health Care Providers & Services 1.3% Anthem Inc., senior bond, 3.65%, 12/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,250,000 2,366,305 senior note, 4.101%, 3/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 800,000 864,774 46 Semiannual Report franklintempleton.com


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty U.S. Core Bond ETF (continued) Country Principal Amount* Value Corporate Bonds & Notes (continued) Health Care Providers & Services (continued) Cigna Corp., senior bond, 3.875%, 10/15/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 $ 1,387,121 CVS Health Corp., senior bond, 4.875%, 7/20/35 . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,561,970 HCA Inc., senior secured bond, first lien, 5.50%, 6/15/47 . . . . . . . . . . . . . . . . . . United States 900,000 1,013,353 7,193,523 Industrial Conglomerates 0.6% General Electric Co., senior bond, 3.10%, 1/09/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 3,000,000 3,041,632 senior bond, 4.125%, 10/09/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 200,000 200,555 3,242,187 Insurance 2.1% Aflac Inc., senior bond, 4.75%, 1/15/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 400,000 489,191 MetLife Inc., senior bond, 5.875%, 2/06/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,100,000 1,501,202 a Metropolitan Life Global Funding I, secured note, 144A, 2.40%, 6/17/22 . . . . . United States 1,100,000 1,109,688 Reinsurance Group of America Inc., Sr. Unsecured, 3.90%, 5/15/29 . . . . . . . . United States 2,250,000 2,396,090 a Swiss Re Treasury US Corp., senior bond, 144A, 4.25%, 12/06/42 . . . . . . . . . Switzerland 750,000 862,731 The Allstate Corp., senior bond, 5.55%, 5/09/35 . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,800,000 2,335,599 Willis North America Inc., Sr. Unsecured, 3.60%, 5/15/24 . . . . . . . . . . . . . . . . . United States 2,250,000 2,339,587 11,034,088 Internet & Direct Marketing Retail 0.6% Alibaba Group Holding Ltd., senior note, 3.125%, 11/28/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 2,050,000 2,082,710 senior note, 3.40%, 12/06/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 1,100,000 1,145,881 3,228,591 Interactive Media & Services 0.2% b Tencent Holdings Ltd., senior note, Reg S, 3.28%, 4/11/24 . . . . . . . . . . . . . . . . China 1,250,000 1,285,342 IT Services 0.3% Fiserv Inc., senior bond, 4.40%, 7/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,568,844 Media 0.5% Charter Communications Operating LLC / Charter Communications Operating Capital, senior bond, first lien, 4.50%, 2/01/24 . . . . . . . . . . . . . . . . . . . . . . . . United States 800,000 860,009 Comcast Corp., senior bond, 3.30%, 2/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 300,000 317,192 NBCUniversal Media LLC, senior bond, 4.45%, 1/15/43 . . . . . . . . . . . . . . . . . . United States 1,100,000 1,277,573 2,454,774 Metals & Mining 1.3% ArcelorMittal, senior note, 4.55%, 3/11/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France 2,500,000 2,617,873 Reliance Steel & Aluminum Co., senior note, 4.50%, 4/15/23 . . . . . . . . . . . . . . United States 3,000,000 3,171,114 Southern Copper Corp., senior bond, 5.25%, 11/08/42 . . . . . . . . . . . . . . . . . . . Mexico 1,000,000 1,130,552 6,919,539 Oil, Gas & Consumable Fuels 2.2% Enable Midstream Partners LP, senior note, 3.90%, 5/15/24 . . . . . . . . . . . . . . . United States 2,650,000 2,702,957 Energy Transfer Operating LP, senior bond, 5.15%, 3/15/45 . . . . . . . . . . . . . . . United States 850,000 893,558 Enterprise Products Operating LLC, senior bond, 4.25%, 2/15/48 . . . . . . . . . . . United States 650,000 703,581 Kinder Morgan Inc., Sr. Unsecured, 4.30%, 3/01/28 . . . . . . . . . . . . . . . . . . . . . . United States 3,000,000 3,256,239 MPLX LP, senior bond, 4.70%, 4/15/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 950,000 993,174 Sabine Pass Liquefaction LLC, senior secured bond, first lien, 4.20%, 3/15/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 400,000 423,588 TC PipeLines LP, senior note, 3.90%, 5/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,550,000 2,660,848 11,633,945 Pharmaceuticals 1.2% Activas Funding SCS, senior bond, 4.75%, 3/15/45 . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,485,697 franklintempleton.com Semiannual Report 47


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    FRANKLIN TEMPLETON ETF TRUST STATEMENT OF INVESTMENTS (UNAUDITED) Franklin Liberty U.S. Core Bond ETF (continued) Country Principal Amount* Value Corporate Bonds & Notes (continued) Pharmaceuticals (continued) Bristol-Myers Squibb Co., senior bond, 3.25%, 8/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 $ 1,419,220 a sr. Unsecured, 144A, 3.20%, 6/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100,000 104,995 Shire Acquisitions Investments Ireland Designated Activity Co., senior note, 3.20%, 9/23/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ireland 200,000 206,528 a Takeda Pharmaceutical Co. Ltd., senior note, 144A, 2.45%, 1/18/22 . . . . . . Japan 3,100,000 3,108,634 6,325,074 Real Estate Management & Development 0.1% Healthcare Trust of America Holdings LP, senior bond, 3.75%, 7/01/27 . . . United States 650,000 681,065 Road & Rail 0.2% CSX Corp., senior bond, 4.25%, 11/01/66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 750,000 796,961 Semiconductors & Semiconductor Equipment 0.9% Maxim Integrated Products Inc., senior note, 3.375%, 3/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 800,000 824,018 senior note, 3.45%, 6/15/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,450,000 2,533,628 Xilinx Inc., senior note, 2.95%, 6/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 1,400,000 1,438,800 4,796,446 Software 0.6% VMware Inc., senior note, 2.95%, 8/21/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 3,100,000 3,144,514 Sr. Unsecured, 3.90%, 8/21/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 100,000 102,936 3,247,450 Tobacco 0.0%c† a BAT International Finance PLC, Sr. Unsecured, 144A, 3.95%, 6/15/25 . . . . United Kingdom 200,000 208,374 Trading Companies & Distributors 0.4% Aircastle Ltd., senior note, 4.25%, 6/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 2,250,000 2,308,105 Total Corporate Bonds & Notes (Cost $155,579,161) . . . . . 155,968,035 U.S. Government & Agency Securities 31.3% U.S. Treasury Bond, 2.25%, 8/15/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 14,500,000 14,872,979 2.25%, 8/15/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 500,000 514,346 2.50%, 2/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 3,800,000 4,089,973 2.75%, 11/15/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 10,650,000 11,954,625 U.S. Treasury Note, 1.375%, 8/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 92,500,000 91,831,583 1.50%, 3/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 22,000,000 21,953,164 1.625%, 8/15/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 9,800,000 9,755,976 1.875%, 6/30/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 5,200,000 5,286,328 2.75%, 9/15/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States 8,100,000 8,274,498 Total U.S. Government & Agency Securities (Cost $167,791,690) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,533,472 Municipal Bonds 4.4% Alabama 0.9% S E Alabama State Gas Supply District Gas Supply, Revenue, Libor- Project #2, Series, 2.25%, 6/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 4,970,250 California 2.7% California State GO, Various Purpose, 3.00%, 10/01/37 . . . . . . . . . . . . . . . . 4,500,000 4,720,050 Contra Costa Community College District GO, Refunding, 2.926%, 8/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,899,400 14,619,450 48 Semiannual Report franklintempleton.com

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