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    ANNUAL REPORT FRANKLIN TEMPLETON ETF TRUST March 31, 2020 Franklin FTSE Asia ex Japan ETF Franklin FTSE Japan ETF Franklin FTSE Australia ETF Franklin FTSE Japan Hedged ETF Franklin FTSE Brazil ETF Franklin FTSE Latin America ETF Franklin FTSE Canada ETF Franklin FTSE Mexico ETF Franklin FTSE China ETF Franklin FTSE Russia ETF Franklin FTSE Europe ETF Franklin FTSE Saudi Arabia ETF Franklin FTSE Europe Hedged ETF Franklin FTSE South Africa ETF Franklin FTSE France ETF Franklin FTSE South Korea ETF Franklin FTSE Germany ETF Franklin FTSE Switzerland ETF Franklin FTSE Hong Kong ETF Franklin FTSE Taiwan ETF Franklin FTSE India ETF Franklin FTSE United Kingdom ETF Franklin FTSE Italy ETF


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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 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 Annual Report Economic and Market Overview . . . . . . . . . . . . . . . . . . . . . . . 2 Franklin FTSE Mexico ETF . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Franklin FTSE Asia ex Japan ETF . . . . . . . . . . . . . . . . . . . . . 3 Franklin FTSE Russia ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Franklin FTSE Australia ETF . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Franklin FTSE Saudi Arabia ETF . . . . . . . . . . . . . . . . . . . . . 105 Franklin FTSE Brazil ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Franklin FTSE South Africa ETF . . . . . . . . . . . . . . . . . . . . . . 111 Franklin FTSE Canada ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Franklin FTSE South Korea ETF . . . . . . . . . . . . . . . . . . . . . 117 Franklin FTSE China ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Franklin FTSE Switzerland ETF . . . . . . . . . . . . . . . . . . . . . . 123 Franklin FTSE Europe ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Franklin FTSE Taiwan ETF . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Franklin FTSE Europe Hedged ETF . . . . . . . . . . . . . . . . . . . 39 Franklin FTSE United Kingdom ETF . . . . . . . . . . . . . . . . . . 135 Franklin FTSE France ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Financial Highlights and Statements of Investments . . . 141 Franklin FTSE Germany ETF . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 Franklin FTSE Hong Kong ETF . . . . . . . . . . . . . . . . . . . . . . . . 57 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 322 Franklin FTSE India ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 Franklin FTSE Italy ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Franklin FTSE Japan ETF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 75 Franklin FTSE Japan Hedged ETF . . . . . . . . . . . . . . . . . . . . Board Members and Officers . . . . . . . . . . . . . . . . . . . . . . . . . 356 81 Franklin FTSE Latin America ETF . . . . . . . . . . . . . . . . . . . . . Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 87 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 annual report 1


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    ANNUAL REPORT Economic and Market Overview Global developed and emerging market equities, as mea- the verge of a recession. As the magnitude of the disruption sured by the FTSE All-World Index, declined significantly caused by the COVID-19 pandemic became apparent, some during the 12 months under review. Stocks generally rose analysts forecasted a deep economic contraction in 2020’s during the period’s first nine months, but fell sharply in the first and second quarters. Several European countries were first three months of 2020 as countries around the world impacted substantially by the pandemic, particularly Italy and imposed lockdowns and stay-at-home measures, which Spain. European developed market equities, as measured by impacted many businesses, in an effort to slow the spread of the FTSE Developed Europe Index, declined significantly for the novel coronavirus (COVID-19). Concerns about global the period, as gains resulting from easing trade tensions and supply chain disruptions, business and personal restrictions, a Brexit agreement were more than offset by the market and subdued consumer spending drove many investors to downturn in 2020’s first quarter. sell equity holdings in favor of perceived safe investments such as government bonds and cash. Asia Pacific developed and emerging market equities, as measured by the FTSE Asia Pacific Index, also declined sig- In the U.S., economic growth was relatively steady through nificantly during the 12-month period. Before the pandemic, February 2020, supported by a strong labor market and solid Asian stocks advanced, aided by easing trade tensions and consumer spending growth. However, stay-at-home orders, the eventual U.S.-China phase one trade agreement. How- which included business closures and restrictions, issued by ever, following the onset of the pandemic, economic activity many state and local governments in an effort to mitigate the in Asia slowed dramatically as many businesses temporarily COVID-19 pandemic severely impacted the U.S. economy halted operations in heavily affected countries and manufac- beginning in March 2020. The unemployment rate surged turing activity plummeted in the region’s major economies, from a 50-year low of 3.5% in February 2020 to 4.4% at notably China, South Korea and Japan. In addition, export- period-end, as many businesses, particularly those involved focused Asia Pacific economies were hurt by a contraction in in hospitality, retail and travel, began mass layoffs.1 Further- demand from other parts of the world. more, consumer spending, a major economic growth engine through most of the reporting period, declined substantially in Emerging market stocks, as measured by the FTSE Emerg- March. As a result, the economy contracted in the first quar- ing Index, rose for the period’s first nine months, but declined ter, following an expansion that lasted more than a decade. substantially during the rest of the 12-month period in the wake of the COVID-19 pandemic. A sharp decline in prices The U.S. Federal Reserve (Fed) made efforts to support the for oil and other natural resources also hurt emerging market U.S. economy both before and during the pandemic. The Fed economies reliant on these exports. cut the federal funds target rate three times in 2019, lowering it to a range of 1.50%–1.75%. In March 2020, as the pan- demic began to severely impact the economy and financial The foregoing information reflects our analysis and opinions markets, the Fed implemented two emergency rate cuts, low- as of March 31, 2020. The information is not a complete ering the federal funds target rate to a range of analysis of every aspect of any market, country, industry, 0.00%–0.25%. In addition, the Fed announced an emergency security or fund. Statements of fact are from sources plan to purchase government, government-backed and cor- considered reliable. porate bonds to help keep markets functioning during the economic downturn. In the eurozone, economic growth had slowed considerably by the end of 2019, raising concerns that the region was on 1. Source: U.S. Bureau of Labor Statistics. 2 Annual Report franklintempleton.com


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    Franklin FTSE Asia ex Japan ETF This annual report for Franklin FTSE Asia ex Japan ETF cov- Top 10 Sectors/Industries 3/31/20 ers the fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Banks 12.2% The Fund seeks to provide investment results that closely Internet & Direct Marketing Retail 9.9% correspond, before fees and expenses, to the performance of Interactive Media & Services 8.0% the FTSE Asia ex Japan RIC Capped Index (the FTSE Asia Semiconductors & Semiconductor Equipment 7.0% ex Japan Capped Index or the Underlying Index).1 Under Technology Hardware, Storage & Peripherals 6.1% normal market conditions, the Fund invests at least 80% of Insurance 5.9% its assets in the component securities of the FTSE Asia ex Japan Capped Index and in depositary receipts representing Real Estate Management & Development 4.7% such securities. Oil, Gas & Consumable Fuels 3.4% Electronic Equipment, Instruments & Components 2.6% Food Products 2.2% Performance Overview During the 12-month period, the Fund posted cumulative total returns of -14.85% based on market price and -13.88% intention is to replicate the component securities of the based on net asset value. In comparison, the FTSE Asia ex Underlying Index as closely as possible (i.e., invest in all of Japan Capped Index posted a -13.87% total return for the the component securities in their respective weightings in the same period.2 You can find more of the Fund’s performance Underlying Index). However, under various circumstances, it data in the Performance Summary beginning on page 5. may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative Performance data represent past performance, which does sampling” strategy whereby we would invest in what we not guarantee future results. Investment return and principal believe to be a representative sample of the component value will fluctuate, and you may have a gain or loss when securities of the Underlying Index, but may not track the you sell your shares. Current performance may differ from Underlying Index with the same degree of accuracy as would figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar Investment Strategy to that of the Underlying Index, including securities that The Fund, using a “passive” or indexing investment resemble those included in the Underlying Index in terms of approach, seeks investment results that closely correspond, risk factors, performance attributes and other characteristics, before fees and expenses, to the performance of the FTSE such as market capitalization and industry weightings. The Asia ex Japan Capped Index. We seek to achieve, over time, Fund will concentrate its investments (i.e., hold 25% or more a correlation between the Fund’s performance, before fees of its net assets) in a particular industry or group of industries and expenses, and that of the Underlying Index of 0.95 or to approximately the same extent that the Underlying Index better. A figure of 1.00 would indicate perfect correlation. Our is concentrated. 1. The FTSE Asia ex Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodol- ogy applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Asia ex Japan Capped Index is based on the FTSE Asia ex Japan Index and is designed to measure the performance of large- and mid-capitalization stocks from developed and emerging Asian countries, excluding Japan. The Chinese constituents in the FTSE Asia ex Japan Capped Index are repre- sented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 142. franklintempleton.com Annual Report 3


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    FRANKLIN FTSE ASIA EX JAPAN ETF Top 10 Holdings Top 10 Countries 3/31/20 3/31/20 Company % of Total % of Total Sector/Industry, Country Net Assets Net Assets Alibaba Group Holding Ltd., ADR 7.8% China 43.6% Internet & Direct Marketing Retail, China Taiwan 13.3% Tencent Holdings Ltd. 6.4% South Korea 12.7% Interactive Media & Services, China Hong Kong 9.3% Taiwan Semiconductor Manufacturing Co. Ltd. 4.9% Semiconductors & Semiconductor Equipment, Taiwan India 9.0% Samsung Electronics Co. Ltd. 4.8% Singapore 3.4% Technology Hardware, Storage & Peripherals, Thailand 2.6% South Korea Malaysia 2.4% AIA Group Ltd. 2.5% Insurance, Hong Kong Indonesia 1.6% China Construction Bank Corp., A, H 1.7% Philippines 1.0% Banks, China Ping An Insurance (Group) Co. of China Ltd., H 1.2% Insurance, China Industrial & Commercial Bank of China Ltd., H 1.2% Banks, China Reliance Industries Ltd. 1.0% Oil, Gas & Consumable Fuels, India Meituan Dianping, B, Reg S 1.0% Internet & Direct Marketing Retail, China Dina Ting, CFA Manager’s Discussion For the fiscal year ended March 31, 2020, the only sector that contributed to the Fund’s absolute performance was information technology. Individual holdings that lifted the Fund’s absolute return included Taiwan Semiconductor Man- ufacturing, Alibaba Group Holding and Meituan Dianping. Louis Hsu, CFA For the same period, the sectors that detracted most from the Hailey Harris Fund’s absolute performance were financials, industrials and real estate. Individual holdings that hindered the Fund’s absolute return included Baidu, Axis Bank and Housing Portfolio Management Team Development Finance. Thank you for your participation in Franklin FTSE Asia ex The foregoing information reflects our analysis, opinions and Japan ETF. We look forward to serving your future portfolio holdings as of March 31, 2020, the end of the report- investment needs. ing period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. CFA® is a trademark owned by CFA Institute. 4 Annual Report franklintempleton.com


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    FRANKLIN FTSE ASIA EX JAPAN ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (2/9/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -13.88% -14.85% -13.88% -14.85% Since Inception (2/6/18) -18.52% -19.11% -9.11% -9.41% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 7 for Performance Summary footnotes. franklintempleton.com Annual Report 5


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    FRANKLIN FTSE ASIA EX JAPAN ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 2/6/18–3/31/20 $11,000 $10,000 $9,000 $8,181 $8,000 $8,148 2/18 3/18 3/19 3/20 Franklin FTSE Asia ex Japan ETF FTSE Asia ex Japan Capped Index4 See page 7 for Performance Summary footnotes. 6 Annual Report franklintempleton.com


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    FRANKLIN FTSE ASIA EX JAPAN ETF PERFORMANCE SUMMARY Distributions (4/1/19–3/31/20) Net Investment Income $0.504588 Total Annual Operating Expenses5 0.19% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Asian issuers involve risks that are specific to Asia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; finan- cial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 2. Assumes reinvestment of distributions based on net asset value. 3. Assumes reinvestment of distributions based on market price. 4. Source: FactSet. The FTSE Asia ex Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Asia ex Japan Capped Index is based on the FTSE Asia ex Japan Index and is designed to measure the perfor- mance of large- and mid-capitalization stocks from developed and emerging Asian countries, excluding Japan. The Chinese constituents in the FTSE Asia ex Japan Capped Index are represented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips. 5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 7


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    FRANKLIN FTSE ASIA EX JAPAN ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 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, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher. Actual 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 10/1/19 Value 3/31/20 10/1/19–3/31/201,2 Value 3/31/20 10/1/19–3/31/201,2 Expense Ratio2 $1,000.00 $907.20 $0.91 $1,024.05 $0.96 0.19% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 8 Annual Report franklintempleton.com


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    Franklin FTSE Australia ETF This annual report for Franklin FTSE Australia ETF covers Top 10 Sectors/Industries 3/31/20 the fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Banks 22.5% The Fund seeks to provide investment results that closely Metals & Mining 15.4% correspond, before fees and expenses, to the performance of Biotechnology 11.1% the FTSE Australia RIC Capped Index (the FTSE Australia Equity Real Estate Investment Trusts (REITs) 5.8% Capped Index or the Underlying Index).1 Under normal mar- Food & Staples Retailing 5.4% ket conditions, the Fund invests at least 80% of its assets in Capital Markets 4.3% the component securities of the FTSE Australia Capped Index and in depositary receipts representing such securities. Transportation Infrastructure 3.9% Oil, Gas & Consumable Fuels 3.7% Insurance 3.7% Performance Overview Multiline Retail 3.4% During the 12-month period, the Fund posted cumulative total returns of -24.87% based on market price and -26.23% based on net asset value. In comparison, the FTSE Australia Index as closely as possible (i.e., invest in all of the compo- Capped Index posted a -26.24% total return for the same nent securities in their respective weightings in the period.2 You can find more of the Fund’s performance data in Underlying Index). However, under various circumstances, it the Performance Summary beginning on page 11. may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative Performance data represent past performance, which does not guarantee future results. Investment return and principal sampling” strategy whereby we would invest in what we value will fluctuate, and you may have a gain or loss when believe to be a representative sample of the component you sell your shares. Current performance may differ from securities of the Underlying Index, but may not track the figures shown. For most recent month-end performance, go Underlying Index with the same degree of accuracy as would to franklintempleton.com or call (800) 342-5236. an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select Investment Strategy securities that collectively have an investment profile similar to that of the Underlying Index, including securities that The Fund, using a “passive” or indexing investment resemble those included in the Underlying Index in terms of approach, seeks investment results that closely correspond, risk factors, performance attributes and other characteristics, before fees and expenses, to the performance of the FTSE such as market capitalization and industry weightings. The Australia Capped Index. We seek to achieve, over time, a Fund will concentrate its investments (i.e., hold 25% or more correlation between the Fund’s performance, before fees and of its net assets) in a particular industry or group of industries expenses, and that of the Underlying Index of 0.95 or better. to approximately the same extent that the Underlying Index A figure of 1.00 would indicate perfect correlation. Our inten- is concentrated. tion is to replicate the component securities of the Underlying 1. The FTSE Australia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Australia Capped Index is based on the FTSE Australia Index and is designed to measure the performance of Australian large- and mid-capitalization stocks. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 174. franklintempleton.com Annual Report 9


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    FRANKLIN FTSE AUSTRALIA ETF Top 10 Holdings 3/31/20 Company % of Total Sector/Industry, Country Net Assets CSL Ltd. 11.1% Biotechnology, Australia Commonwealth Bank of Australia 9.1% Banks, Australia Dina Ting, CFA BHP Group Ltd. 7.1% Metals & Mining, Australia Westpac Banking Corp. 4.9% Banks, Australia National Australia Bank Ltd. 4.1% Banks, Australia Australia & New Zealand Banking Group Ltd. 4.0% Banks, Australia Louis Hsu, CFA Woolworths Group Ltd. 3.7% Food & Staples Retailing, Australia Hailey Harris Wesfarmers Ltd. 3.2% Multiline Retail, Australia Transurban Group 2.7% Portfolio Management Team Transportation Infrastructure, Australia Rio Tinto Ltd. 2.6% Metals & Mining, Australia The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2020, the end of the report- Manager’s Discussion ing period. These opinions may not be relied upon as investment advice or an offer for a particular security. The For the fiscal year ended March 31, 2020, the only sector information is not a complete analysis of every aspect of any that contributed to the Fund’s absolute performance was market, country, industry, security or the Fund. Statements of health care. Individual holdings that lifted the Fund’s absolute fact are from sources considered reliable, but the investment return included CSL, Fortescue Metals Group and ASX. manager makes no representation or warranty as to their completeness or accuracy. Although historical performance For the same period, the sectors that detracted most from the is no guarantee of future results, these insights may help you Fund’s absolute performance were financials, materials and understand our investment management philosophy. real estate. Individual holdings that hindered the Fund’s abso- lute return included Westpac Banking, Commonwealth Bank of Australia and Australia & New Zealand Banking Group. Thank you for your participation in Franklin FTSE Australia ETF. We look forward to serving your future investment needs. 10 Annual Report franklintempleton.com


  • Page 13

    FRANKLIN FTSE AUSTRALIA ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -26.23% -24,87% -26.23% -24.87% Since Inception (11/2/17) -24.85% -23.13% -11.18% -10.35% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 13 for Performance Summary footnotes. franklintempleton.com Annual Report 11


  • Page 14

    FRANKLIN FTSE AUSTRALIA ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 11/2/17–3/31/20 $12,000 $11,000 $10,000 $9,000 $8,000 $7,515 $7,505 $7,000 11/17 3/18 3/19 3/20 Franklin FTSE Australia ETF FTSE Australia Capped Index4 See page 13 for Performance Summary footnotes. 12 Annual Report franklintempleton.com


  • Page 15

    FRANKLIN FTSE AUSTRALIA ETF PERFORMANCE SUMMARY Distributions (4/1/19–3/31/20) Net Investment Income $1.138785 Total Annual Operating Expenses5 0.09% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Australian issuers involve risks that are specific to Australia, including certain legal, regulatory, political and economic risks. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 2. Assumes reinvestment of distributions based on net asset value. 3. Assumes reinvestment of distributions based on market price. 4. Source: FactSet. The FTSE Australia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Australia Capped Index is based on the FTSE Australia Index and is designed to measure the performance of Australian large- and mid-capitalization stocks 5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 13


  • Page 16

    FRANKLIN FTSE AUSTRALIA ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 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 10/1/19 Value 3/31/20 10/1/19–3/31/201,2 Value 3/31/20 10/1/19–3/31/201,2 Expense Ratio2 $1,000.00 $698.70 $0.38 $1,024.55 $0.46 0.09% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 14 Annual Report franklintempleton.com


  • Page 17

    Franklin FTSE Brazil ETF This annual report for Franklin FTSE Brazil ETF covers the Top 10 Sectors/Industries 3/31/20 fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Banks 22.3% The Fund seeks to provide investment results that closely Metals & Mining 12.8% correspond, before fees and expenses, to the performance of Oil, Gas & Consumable Fuels 10.3% the FTSE Brazil RIC Capped Index (the FTSE Brazil Capped Capital Markets 5.9% Index or the Underlying Index).1 Under normal market condi- Electric Utilities 5.9% tions, the Fund invests at least 80% of its assets in the Multiline Retail 5.1% component securities of the FTSE Brazil Capped Index and in depositary receipts representing such securities. Beverages 3.9% Road & Rail 3.1% Food & Staples Retailing 3.0% Performance Overview Health Care Providers & Services 3.0% During the 12-month period, the Fund posted cumulative total returns of -40.94% based on market price and -41.69% based on net asset value. In comparison, the FTSE Brazil Underlying Index as closely as possible (i.e., invest in all of Capped Index posted a -41.54% total return for the same the component securities in their respective weightings in the period.2 You can find more of the Fund’s performance data in Underlying Index). However, under various circumstances, it the Performance Summary beginning on page 17. may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative Performance data represent past performance, which does sampling” strategy whereby we would invest in what we not guarantee future results. Investment return and principal believe to be a representative sample of the component value will fluctuate, and you may have a gain or loss when securities of the Underlying Index, but may not track the you sell your shares. Current performance may differ from Underlying Index with the same degree of accuracy as would figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar Investment Strategy to that of the Underlying Index, including securities that The Fund, using a “passive” or indexing investment resemble those included in the Underlying Index in terms of approach, seeks investment results that closely correspond, risk factors, performance attributes and other characteristics, before fees and expenses, to the performance of the FTSE such as market capitalization and industry weightings. The Brazil Capped Index. We seek to achieve, over time, a corre- Fund will concentrate its investments (i.e., hold 25% or more lation between the Fund’s performance, before fees and of its net assets) in a particular industry or group of industries expenses, and that of the Underlying Index of 0.95 or better. to approximately the same extent that the Underlying Index A figure of 1.00 would indicate perfect correlation. Our is concentrated. intention is to replicate the component securities of the 1. The FTSE Brazil Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Brazil Capped Index is based on the FTSE Brazil Index and is designed to measure the performance of Brazilian large- and mid-capitalization stocks. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 177. franklintempleton.com Annual Report 15


  • Page 18

    FRANKLIN FTSE BRAZIL ETF Top 10 Holdings 3/31/20 Company % of Total Sector/Industry, Country Net Assets Vale SA 11.1% Metals & Mining, Brazil Itau Unibanco Holding SA 9.0% Banks, Brazil Dina Ting, CFA Petroleo Brasileiro SA 8.8% Oil, Gas & Consumable Fuels, Brazil Banco Bradesco SA 7.7% Banks, Brazil B3 SA – Brasil Bolsa Balcao 5.3% Capital Markets, Brazil Ambev SA 3.9% Beverages, Brazil Louis Hsu, CFA Itausa – Investimentos Itau SA 2.9% Banks, Brazil Hailey Harris Suzano SA 2.1% Paper & Forest Products, Brazil Lojas Renner SA 2.0% Portfolio Management Team Multiline Retail, Brazil Magazine Luiza SA 1.9% Multiline Retail, Brazil The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2020, the end of the report- Manager’s Discussion ing period. These opinions may not be relied upon as investment advice or an offer for a particular security. The For the fiscal year ended March 31, 2020, no sectors contrib- information is not a complete analysis of every aspect of any uted to the Fund’s absolute performance. Individual holdings market, country, industry, security or the Fund. Statements of that lifted the Fund’s absolute return included GOL Linhas fact are from sources considered reliable, but the investment Aereas Inteligentes, TOTVS and Eneva. manager makes no representation or warranty as to their completeness or accuracy. Although historical performance For the same period, the sectors that detracted most from the is no guarantee of future results, these insights may help you Fund’s absolute performance were financials, energy and understand our investment management philosophy. materials. Individual holdings that hindered the Fund’s abso- lute return included Petrobras Brasileiro, Banco Bradesco and Itau Unibanco Holding. Thank you for your participation in Franklin FTSE Brazil ETF. We look forward to serving your future investment needs. 16 Annual Report franklintempleton.com


  • Page 19

    FRANKLIN FTSE BRAZIL ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (11/7/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -41.69% -40.94% -41.69% -40.94% Since Inception (11/3/17) -35.69% -35.59% -16.77% -16.71% 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. franklintempleton.com Annual Report 17


  • Page 20

    FRANKLIN FTSE BRAZIL ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 11/3/17–3/31/20 $14,000 $12,000 $10,000 $8,000 $6,471 $6,000 $6,431 11/17 3/18 3/19 3/20 Franklin FTSE Brazil ETF FTSE Brazil Capped Index4 See page 19 for Performance Summary footnotes. 18 Annual Report franklintempleton.com


  • Page 21

    FRANKLIN FTSE BRAZIL ETF PERFORMANCE SUMMARY Distributions (4/1/19–3/31/20) Net Investment Income $1.000788 Total Annual Operating Expenses5 0.19% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sector, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, eco- nomic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Brazilian issuers involve risks that are specific to Brazil, including certain legal, regulatory, political and economic risks. The Brazilian economy has experienced in the past, and may continue to experience, periods of high inflation rates and political unrest. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geo- graphically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; finan- cial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 2. Assumes reinvestment of distributions based on net asset value. 3. Assumes reinvestment of distributions based on market price. 4. Source: FactSet. The FTSE Brazil Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumu- latively exceed 50% of the index’s weight. The FTSE Brazil Capped Index is based on the FTSE Brazil Index and is designed to measure the performance of Brazilian large- and mid-capitalization stocks. 5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 19


  • Page 22

    FRANKLIN FTSE BRAZIL ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 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, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you com- pare 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 10/1/19 Value 3/31/20 10/1/19–3/31/201,2 Value 3/31/20 10/1/19–3/31/201,2 Expense Ratio2 $1,000.00 $567.90 $0.94 $1,023.80 $1.21 0.24% 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. 20 Annual Report franklintempleton.com


  • Page 23

    Franklin FTSE Canada ETF This annual report for Franklin FTSE Canada ETF covers the Top 10 Sectors/Industries 3/31/20 fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Banks 28.3% The Fund seeks to provide investment results that closely Oil, Gas & Consumable Fuels 15.5% correspond, before fees and expenses, to the performance of Road & Rail 8.5% the FTSE Canada RIC Capped Index (the FTSE Canada Insurance 7.7% Capped Index or the Underlying Index).1 Under normal mar- Metals & Mining 7.5% ket conditions, the Fund invests at least 80% of its assets in IT Services 5.4% the component securities of the FTSE Canada Capped Index and in depositary receipts representing such securities. Food & Staples Retailing 4.3% Capital Markets 4.1% Electric Utilities 2.3% Performance Overview Commercial Services & Supplies 2.0% During the 12-month period, the Fund posted cumulative total returns of -16.87% based on market price and -17.25% based on net asset value. In comparison, the FTSE Canada Index as closely as possible (i.e., invest in all of the compo- Capped Index posted a -17.45% total return for the same nent securities in their respective weightings in the period.2 You can find more of the Fund’s performance data in Underlying Index). However, under various circumstances, it the Performance Summary beginning on page 23. may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative Performance data represent past performance, which does sampling” strategy whereby we would invest in what we not guarantee future results. Investment return and principal believe to be a representative sample of the component value will fluctuate, and you may have a gain or loss when securities of the Underlying Index, but may not track the you sell your shares. Current performance may differ from Underlying Index with the same degree of accuracy as would figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. an investment vehicle replicating the entire Underlying index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar Investment Strategy to that of the Underlying Index, including securities that The Fund, using a “passive” or indexing investment resemble those included in the Underlying Index in terms of approach, seeks investment results that closely correspond, risk factors, performance attributes and other characteristics, before fees and expenses, to the performance of the FTSE such as market capitalization and industry weightings. The Canada Capped Index. We seek to achieve, over time, a cor- Fund will concentrate its investments (i.e., hold 25% or more relation between the Fund’s performance, before fees and of its net assets) in a particular industry or group of industries expenses, and that of the Underlying Index of 0.95 or better. to approximately the same extent that the Underlying Index A figure of 1.00 would indicate perfect correlation. Our inten- is concentrated. tion is to replicate the component securities of the Underlying 1. The FTSE Canada Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Canada Capped Index is based on the FTSE Canada Index and is designed to measure the performance of Canadian large- and mid-capitalization stocks. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 181. franklintempleton.com Annual Report 21


  • Page 24

    FRANKLIN FTSE CANADA ETF Top 10 Holdings 3/31/20 Company % of Total Sector/Industry, Country Net Assets Royal Bank of Canada 8.8% Banks, Canada The Toronto-Dominion Bank 7.6% Banks, Canada Dina Ting, CFA Enbridge, Inc. 5.7% Oil, Gas & Consumable Fuels, Canada Canadian National Railway Co. 5.5% Road & Rail, Canada Bank of Nova Scotia 4.9% Banks, Canada Shopify, Inc., A 4.1% IT Services, Canada Louis Hsu, CFA TC Energy Corp. 4.1% Oil, Gas & Consumable Fuels, Canada Hailey Harris Brookfield Asset Management, Inc., A 3.9% Capital Markets, Canada Barrick Gold Corp. 3.2% Portfolio Management Team Metals & Mining, Canada Bank of Montreal 3.2% Banks, Canada The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2020, the end of the report- Manager’s Discussion ing period. These opinions may not be relied upon as investment advice or an offer for a particular security. The For the fiscal year ended March 31, 2020, the only sector information is not a complete analysis of every aspect of any that contributed to the Fund’s absolute performance was market, country, industry, security or the Fund. Statements of information technology. Individual holdings that lifted the fact are from sources considered reliable, but the investment Fund’s absolute return included Shopify, Barrick Gold and manager makes no representation or warranty as to their Franco-Nevada. completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you For the same period, the sectors that detracted most from the understand our investment management philosophy. Fund’s absolute performance were financials, energy and consumer discretionary. Individual holdings that hindered the Fund’s absolute return included Suncor Energy, Royal Bank of Canada and Toronto Dominion Bank. Thank you for your participation in Franklin FTSE Canada ETF. We look forward to serving your future investment needs. 22 Annual Report franklintempleton.com


  • Page 25

    FRANKLIN FTSE CANADA ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -17.25% -16.87% -17.25% -16.87% Since Inception (11/2/17) -17.05% -16.55% -7.47% -7.24% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 25 for Performance Summary footnotes. franklintempleton.com Annual Report 23


  • Page 26

    FRANKLIN FTSE CANADA ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 11/2/17–3/31/20 $12,000 $11,000 $10,000 $9,000 $8,295 $8,000 $8,252 11/17 3/18 3/19 3/20 Franklin FTSE Canada ETF FTSE Canada Capped Index4 See page 25 for Performance Summary footnotes. 24 Annual Report franklintempleton.com


  • Page 27

    FRANKLIN FTSE CANADA ETF PERFORMANCE SUMMARY Distributions (4/1/19–3/31/20) Net Investment Income $0.604562 Total Annual Operating Expenses5 0.09% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Canadian issuers involve risks that are specific to Canada, including certain legal, regulatory, political and economic risks. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 2. Assumes reinvestment of distributions based on net asset value. 3. Assumes reinvestment of distributions based on market price. 4. Source: FactSet. The FTSE Canada Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumu- latively exceed 50% of the index’s weight. The FTSE Canada Capped Index is based on the FTSE Canada Index and is designed to measure the performance of Canadian large- and mid-capitalization stocks. 5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 25


  • Page 28

    FRANKLIN FTSE CANADA ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 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, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher. Actual 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 10/1/19 Value 3/31/20 10/1/19–3/31/201,2 Value 3/31/20 10/1/19–3/31/201,2 Expense Ratio2 $1,000.00 $772.10 $0.40 $1,024.55 $0.46 0.09% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 26 Annual Report franklintempleton.com


  • Page 29

    Franklin FTSE China ETF This annual report for Franklin FTSE China ETF covers the Top 10 Sectors/Industries 3/31/20 fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Internet & Direct Marketing Retail 23.2% The Fund seeks to provide investment results that closely Interactive Media & Services 17.2% correspond, before fees and expenses, to the performance of Banks 12.5% the FTSE China RIC Capped Index (the FTSE China Capped Insurance 5.3% Index or the Underlying Index).1 Under normal market condi- Real Estate Management & Development 5.3% tions, the Fund invests at least 80% of its assets in the Oil, Gas & Consumable Fuels 2.6% component securities of the FTSE China Capped Index and in depositary receipts representing such securities. Wireless Telecommunication Services 2.1% Pharmaceuticals 2.1% Capital Markets 2.0% Performance Overview Diversified Consumer Services 1.9% During the 12-month period, the Fund posted cumulative total returns of -6.55% based on market price and -5.64% based on net asset value. In comparison, the FTSE China Capped Underlying Index as closely as possible (i.e., invest in all of Index posted a -5.42% total return for the same period.2 You the component securities in their respective weightings in the can find more of the Fund’s performance data in the Perfor- Underlying Index). However, under various circumstances, it mance Summary beginning on page 29. may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative Performance data represent past performance, which does sampling” strategy whereby we would invest in what we not guarantee future results. Investment return and principal believe to be a representative sample of the component value will fluctuate, and you may have a gain or loss when securities of the Underlying Index, but may not track the you sell your shares. Current performance may differ from Underlying Index with the same degree of accuracy as would figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar Investment Strategy to that of the Underlying Index, including securities that The Fund, using a “passive” or indexing investment resemble those included in the Underlying Index in terms of approach, seeks investment results that closely correspond, risk factors, performance attributes and other characteristics, before fees and expenses, to the performance of the FTSE such as market capitalization and industry weightings. The China Capped Index. We seek to achieve, over time, a corre- Fund will concentrate its investments (i.e., hold 25% or more lation between the Fund’s performance, before fees and of its net assets) in a particular industry or group of industries expenses, and that of the Underlying Index of 0.95 or better. to approximately the same extent that the Underlying Index A figure of 1.00 would indicate perfect correlation. Our is concentrated. intention is to replicate the component securities of the 1. The FTSE China Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE China Capped Index is based on the FTSE China Index and is designed to measure the performance of Chinese large- and mid-capitalization stocks, as represented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 184. franklintempleton.com Annual Report 27


  • Page 30

    FRANKLIN FTSE CHINA ETF Top 10 Holdings 3/31/20 Company % of Total Sector/Industry, Country Net Assets Alibaba Group Holding Ltd., ADR 18.1% Internet & Direct Marketing Retail, China Tencent Holdings Ltd. 14.8% Interactive Media & Services, China Dina Ting, CFA China Construction Bank Corp., A, H 4.0% Banks, China Ping An Insurance (Group) Co. of China Ltd., H 2.9% Insurance, China Industrial & Commercial Bank of China Ltd., H 2.8% Banks, China Meituan Dianping, B, Reg S 2.2% Internet & Direct Marketing Retail, China Louis Hsu, CFA China Mobile Ltd. 2.1% Wireless Telecommunication Services, China Hailey Harris JD.com Inc., ADR 1.7% Internet & Direct Marketing Retail, China Bank of China Ltd., A, H 1.7% Portfolio Management Team Banks, China Baidu Inc., ADR 1.5% Interactive Media & Services, China The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2020, the end of the report- Manager’s Discussion ing period. These opinions may not be relied upon as investment advice or an offer for a particular security. The For the fiscal year ended March 31, 2020, the sectors that information is not a complete analysis of every aspect of any contributed most to the Fund’s absolute performance were market, country, industry, security or the Fund. Statements of consumer discretionary, health care and consumer staples. fact are from sources considered reliable, but the investment Individual holdings that lifted the Fund’s absolute return manager makes no representation or warranty as to their included Alibaba Group Holding, Meituan Dianping completeness or accuracy. Although historical performance and JD.com. is no guarantee of future results, these insights may help you understand our investment management philosophy. For the same period, the sectors that detracted most from the Fund’s absolute performance were financials, communication services and energy. Individual holdings that hindered the Fund’s absolute return included Baidu, China Mobile and CNOOC. Thank you for your participation in Franklin FTSE China ETF. We look forward to serving your future investment needs. 28 Annual Report franklintempleton.com


  • Page 31

    FRANKLIN FTSE CHINA ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -5.64% -6.55% -5.64% -6.55% Since Inception (11/2/17) -7.54% -7.71% -3.20% -3.28% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 31 for Performance Summary footnotes. franklintempleton.com Annual Report 29


  • Page 32

    FRANKLIN FTSE CHINA ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 11/2/17–3/31/20 $12,000 $11,000 $10,000 $9,289 $9,000 $9,246 $8,000 11/17 3/18 3/19 3/20 Franklin FTSE China ETF FTSE China Capped Index4 See page 31 for Performance Summary footnotes. 30 Annual Report franklintempleton.com


  • Page 33

    FRANKLIN FTSE CHINA ETF PERFORMANCE SUMMARY Distributions (4/1/19–3/31/20) Net Investment Income $0.488601 Total Annual Operating Expenses5 0.19% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Chinese issuers involve risks that are specific to China, including certain legal, regulatory, political and economic risks. China may be subject to considerable degrees of economic, political and social instability. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to its portfolio securities. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 2. Assumes reinvestment of distributions based on net asset value. 3. Assumes reinvestment of distributions based on market price. 4. Source: FactSet. The FTSE China Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumu- latively exceed 50% of the index’s weight. The FTSE China Capped Index is based on the FTSE China Index and is designed to measure the performance of Chinese large- and mid-capitalization stocks, as represented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips. 5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 31


  • Page 34

    FRANKLIN FTSE CHINA ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 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, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher. Actual 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 10/1/19 Value 3/31/20 10/1/19–3/31/201,2 Value 3/31/20 10/1/19–3/31/201,2 Expense Ratio2 $1,000.00 $1,032.20 $0.97 $1,024.05 $0.96 0.19% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 32 Annual Report franklintempleton.com


  • Page 35

    Franklin FTSE Europe ETF This annual report for Franklin FTSE Europe ETF covers the Top 10 Sectors/Industries 3/31/20 fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Pharmaceuticals 12.5% The Fund seeks to provide investment results that closely Banks 6.8% correspond, before fees and expenses, to the performance of Food Products 5.5% the FTSE Developed Europe RIC Capped Index (the FTSE Oil, Gas & Consumable Fuels 5.5% Developed Europe Capped Index or the Underlying Index).1 Insurance 5.5% Under normal market conditions, the Fund invests at least Textiles, Apparel & Luxury Goods 3.9% 80% of its assets in the component securities of the FTSE Developed Europe Capped Index and in depositary receipts Chemicals 3.8% representing such securities. Electric Utilities 2.7% Personal Products 2.7% Capital Markets 2.6% Performance Overview During the 12-month period, the Fund posted cumulative total returns of -15.34% based on market price and -15.44% based Our intention is to replicate the component securities of the on net asset value. In comparison, the FTSE Developed Underlying Index as closely as possible (i.e., invest in all of Europe Capped Index posted a -15.61% total return for the the component securities in their respective weightings in the same period.2 You can find more of the Fund’s performance Underlying Index). However, under various circumstances, it data in the Performance Summary beginning on page 35. may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative Performance data represent past performance, which does sampling” strategy whereby we would invest in what we not guarantee future results. Investment return and principal believe to be a representative sample of the component value will fluctuate, and you may have a gain or loss when securities of the Underlying Index, but may not track the you sell your shares. Current performance may differ from Underlying Index with the same degree of accuracy as would figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar Investment Strategy to that of the Underlying Index, including securities that The Fund, using a “passive” or indexing investment resemble those included in the Underlying Index in terms of approach, seeks investment results that closely correspond, risk factors, performance attributes and other characteristics, before fees and expenses, to the performance of the FTSE such as market capitalization and industry weightings. The Developed Europe Capped Index. We seek to achieve, over Fund will concentrate its investments (i.e., hold 25% or more time, a correlation between the Fund’s performance, before of its net assets) in a particular industry or group of industries fees and expenses, and that of the Underlying Index of 0.95 to approximately the same extent that the Underlying Index or better. A figure of 1.00 would indicate perfect correlation. is concentrated. 1. The FTSE Developed Europe Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping meth- odology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Index is based on the FTSE Developed Europe Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 202. franklintempleton.com Annual Report 33


  • Page 36

    FRANKLIN FTSE EUROPE ETF Top 10 Holdings Top 10 Countries 3/31/20 3/31/20 Company % of Total % of Total Sector/Industry, Country Net Assets Net Assets Nestle SA 4.1% United Kingdom 24.3% Food Products, Switzerland Switzerland 17.2% Roche Holding AG 3.2% France 16.1% Pharmaceuticals, Switzerland Germany 13.3% Novartis AG 2.4% Pharmaceuticals, Switzerland Netherlands 5.1% Royal Dutch Shell PLC, A, B 1.9% Sweden 4.5% Oil, Gas & Consumable Fuels, United Kingdom Spain 4.1% AstraZeneca PLC 1.6% Italy 3.6% Pharmaceuticals, United Kingdom Denmark 3.4% HSBC Holdings PLC 1.6% Banks, United Kingdom Finland 1.9% SAP SE 1.5% Software, Germany ASML Holding NV 1.5% Semiconductors & Semiconductor Equipment, Netherlands Novo Nordisk AS, B 1.4% Pharmaceuticals, Denmark Sanofi 1.3% Pharmaceuticals, France Dina Ting, CFA Manager’s Discussion For the fiscal year ended March 31, 2020, the only sector that contributed to the Fund’s absolute performance was health care. Individual holdings that lifted the Fund’s absolute return included Roche Holding, ASML Holding and Nestle. Louis Hsu, CFA For the same period, the sectors that detracted most from the Fund’s absolute performance were financials, industrials and Hailey Harris energy. Individual holdings that hindered the Fund’s absolute return included Royal Dutch Shell, Airbus and BP. Portfolio Management Team Thank you for your participation in Franklin FTSE Europe ETF. We look forward to serving your future investment needs. The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2020, the end of the report- ing period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. 34 Annual Report franklintempleton.com


  • Page 37

    FRANKLIN FTSE EUROPE ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -15.44% -15.34% -15.44% -15.34% Since Inception (11/2/17) -18.77% -18.60% -8.27% -8.19% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 37 for Performance Summary footnotes. franklintempleton.com Annual Report 35


  • Page 38

    FRANKLIN FTSE EUROPE ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 11/2/17–3/31/20 $11,000 $10,000 $9,000 $8,123 $8,000 $8,092 11/17 3/18 3/19 3/20 Franklin FTSE Europe ETF FTSE Developed Europe Capped Index4 See page 37 for Performance Summary footnotes. 36 Annual Report franklintempleton.com


  • Page 39

    FRANKLIN FTSE EUROPE ETF PERFORMANCE SUMMARY Distributions (4/1/19–3/31/20) Net Investment Income $0.762795 Total Annual Operating Expenses5 0.09% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of European issuers involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experi- ence greater volatility than a fund that is more broadly diversified geographically. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 2. Assumes reinvestment of distributions based on net asset value. 3. Assumes reinvestment of distributions based on market price. 4. Source: FactSet. The FTSE Developed Europe Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Index is based on the FTSE Developed Europe Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. 5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 37


  • Page 40

    FRANKLIN FTSE EUROPE ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 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, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher. Actual 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 10/1/19 Value 3/31/20 10/1/19–3/31/201,2 Value 3/31/20 10/1/19–3/31/201,2 Expense Ratio2 $1,000.00 $823.90 $0.41 $1,024.55 $0.46 0.09% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 38 Annual Report franklintempleton.com


  • Page 41

    Franklin FTSE Europe Hedged ETF This annual report for Franklin FTSE Europe Hedged ETF Top 10 Sectors/Industries 3/31/20 covers the fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Pharmaceuticals 12.3% The Fund seeks to provide investment results that closely Banks 6.8% correspond, before fees and expenses, to the performance of Food Products 5.5% the FTSE Developed Europe RIC Capped Hedged to USD Oil, Gas & Consumable Fuels 5.4% Index (the FTSE Developed Europe Capped Hedged Index Insurance 5.4% or the Underlying Index).1 Under normal market conditions, Textiles, Apparel & Luxury Goods 3.8% the Fund invests at least 80% of its assets in the component securities of the FTSE Developed Europe Capped Hedged Chemicals 3.7% Index and in depositary receipts representing such securities, Electric Utilities 2.7% including indirectly through Franklin FTSE Europe ETF Personal Products 2.6% (Underlying Fund). Capital Markets 2.6% Performance Overview correlation. Our intention is to replicate the component secu- During the 12-month period, the Fund posted cumulative total rities of the Underlying Index as closely as possible (i.e., returns of -11.43% based on market price and -10.67% invest in all of the component securities in their respective based on net asset value. In comparison, the FTSE Devel- weightings in the Underlying Index). However, under various oped Europe Capped Hedged Index posted a -10.81% total circumstances, it may not be possible or practicable to repli- return for the same period.2 You can find more of the Fund’s cate the Underlying Index. In these circumstances, we may performance data in the Performance Summary beginning use a “representative sampling” strategy whereby we would on page 41. invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may Performance data represent past performance, which does not track the Underlying Index with the same degree of accu- not guarantee future results. Investment return and principal racy as would an investment vehicle replicating the entire value will fluctuate, and you may have a gain or loss when Underlying Index. Under the representative sampling tech- you sell your shares. Current performance may differ from nique, we will select securities that collectively have an figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attrib- Investment Strategy utes and other characteristics, such as market capitalization The Fund, using a “passive” or indexing investment and industry weightings. We intend to enter into monthly for- approach, seeks investment results that closely correspond, eign currency forward contracts and/or currency futures before fees and expenses, to the performance of the FTSE contracts designed to offset the Fund’s exposure to the com- Developed Europe Capped Hedged Index. We seek to ponent currencies, in order to replicate the hedge impact achieve, over time, a correlation between the Fund’s perfor- incorporated in the calculation of the Underlying Index. The mance, before fees and expenses, and that of the Underlying Fund’s exposure to foreign currency forward contracts and Index of 0.95 or better. A figure of 1.00 would indicate perfect currency futures contracts is based on the aggregate 1. The FTSE Developed Europe Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumu- latively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Hedged Index is based on the FTSE Developed Europe Hedged to USD Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. The FTSE Developed Europe Capped Hedged Index incor- porates a hedge against non-U.S. currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the FTSE Developed Europe Capped Hedged Index. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 216. franklintempleton.com Annual Report 39


  • Page 42

    FRANKLIN FTSE EUROPE HEDGED ETF Top 10 Holdings Top 10 Countries 3/31/20 3/31/20 Company % of Total % of Total Sector/Industry, Country Net Assets Net Assets Nestle SA 4.0% United Kingdom 24.0% Food Products, Switzerland Switzerland 17.0% Roche Holding AG 3.1% Pharmaceuticals, Switzerland France 15.9% Novartis AG 2.4% Germany 13.2% Pharmaceuticals, Switzerland Netherlands 5.1% Royal Dutch Shell PLC, A, B 1.8% Oil, Gas & Consumable Fuels, United Kingdom Sweden 4.5% AstraZeneca PLC 1.6% Spain 4.1% Pharmaceuticals, United Kingdom Italy 3.5% HSBC Holdings PLC 1.5% Banks, United Kingdom Denmark 3.4% SAP SE 1.5% Finland 1.9% Software, Germany ASML Holding NV 1.4% Thank you for your participation in Franklin FTSE Europe Semiconductors & Semiconductor Equipment, Netherlands Hedged ETF. We look forward to serving your future Novo Nordisk AS, B 1.3% investment needs. Pharmaceuticals, Denmark Sanofi 1.3% Pharmaceuticals, France exposure of the Fund to the component currencies. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approxi- mately the same extent that the Underlying Index is concentrated. Dina Ting, CFA What is a currency forward contract? A currency forward contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency in exchange for another currency at a specific exchange rate on a future date. Currency forward contracts are privately traded in the interbank market, not on a centralized exchange. What is a futures contract? A futures contract is an agreement between the Fund and a counter- Louis Hsu, CFA party made through a U.S. or foreign futures exchange to buy or sell an underlying instrument or asset at a specific price on a future date. Hailey Harris Manager’s Discussion Portfolio Management Team For the fiscal year ended March 31, 2020, the only sector that contributed to the Fund’s absolute performance was health care. Individual holdings that lifted the Fund’s absolute return The foregoing information reflects our analysis, opinions and included Roche Holding, ASML Holding and Nestle. The Fund’s portfolio holdings as of March 31, 2020, the end of the report- use of currency forward contracts—designed to offset the ing period. These opinions may not be relied upon as Fund’s exposure to the component currencies and to replicate investment advice or an offer for a particular security. The the hedge impact incorporated in the calculation of the Underly- information is not a complete analysis of every aspect of any ing Index—also contributed to the Fund’s absolute performance. market, country, industry, security or the Fund. Statements of However, one cannot expect the same result in future periods. fact are from sources considered reliable, but the investment For the same period, the sectors that detracted most from the manager makes no representation or warranty as to their Fund’s absolute performance were financials, industrials and completeness or accuracy. Although historical performance energy. Individual holdings that hindered the Fund’s absolute is no guarantee of future results, these insights may help you return included Royal Dutch Shell, BP and Airbus. understand our investment management philosophy. 40 Annual Report franklintempleton.com


  • Page 43

    FRANKLIN FTSE EUROPE HEDGED ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -10.67% -11.43% -10.67% -11.43% Since Inception (11/2/17) -8.84% -9.72% -3.77% -4.16% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 43 for Performance Summary footnotes. franklintempleton.com Annual Report 41


  • Page 44

    FRANKLIN FTSE EUROPE HEDGED ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 11/2/17–3/31/20 $12,000 $11,000 $10,000 $9,116 $9,000 $9,109 11/17 3/18 3/19 3/20 Franklin FTSE Europe Hedged ETF FTSE Developed Europe Capped Hedged Index4 See page 43 for Performance Summary footnotes. 42 Annual Report franklintempleton.com


  • Page 45

    FRANKLIN FTSE EUROPE HEDGED ETF PERFORMANCE SUMMARY Distributions (4/1/19–3/31/20) Net Investment Income $1.471139 Total Annual Operating Expenses5 0.09% All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of European issuers involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experi- ence greater volatility than a fund that is more broadly diversified geographically. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the Fund to participate in losses on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. While the Fund’s use of foreign currency forward contracts and/or currency futures contracts is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Fund’s exposure to the component currencies. The return of these currency hedging instruments will not perfectly offset the actual fluctuations between the component currencies and the U.S. dollar. Currency hedges are sometimes subject to imperfect matching between the derivative instruments and the currencies that the derivative instruments intend to hedge, and there can be no assurance that the Fund’s hedging transactions will be effec- tive. The Fund’s exposure to the component currencies may not be fully hedged at all times. Because the Fund’s currency hedge is generally reset on a monthly basis, currency risk can develop or increase intra-month. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund’s prospectus also includes a description of the main investment risks. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns. 1. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 2. Assumes reinvestment of distributions based on net asset value. 3. Assumes reinvestment of distributions based on market price. 4. Source: FactSet. The FTSE Developed Europe Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Hedged Index is based on the FTSE Developed Europe Hedged to USD Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. The FTSE Developed Europe Capped Hedged Index incorporates a hedge against non-U.S. currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the FTSE Developed Europe Capped Hedged Index. 5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 43


  • Page 46

    FRANKLIN FTSE EUROPE HEDGED ETF Your Fund’s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 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, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you com- pare 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 10/1/19 Value 3/31/20 10/1/19–3/31/201,2 Value 3/31/20 10/1/19–3/31/201,2 Expense Ratio2 $1,000.00 $829.00 $0.41 $1,024.55 $0.46 0.09% 1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period. 2. Reflects expenses after fee waivers and expense reimbursements. 44 Annual Report franklintempleton.com


  • Page 47

    Franklin FTSE France ETF This annual report for Franklin FTSE France ETF covers the Top 10 Sectors/Industries 3/31/20 fiscal year ended March 31, 2020. % of Total Net Assets Your Fund’s Goal and Main Investments Textiles, Apparel & Luxury Goods 15.4% The Fund seeks to provide investment results that closely Pharmaceuticals 8.1% correspond, before fees and expenses, to the performance of Oil, Gas & Consumable Fuels 7.7% the FTSE France RIC Capped Index (the FTSE France Aerospace & Defense 6.2% Capped Index or the Underlying Index).1 Under normal mar- Chemicals 5.4% ket conditions, the Fund invests at least 80% of its assets in Personal Products 5.3% the component securities of the FTSE France Capped Index and in depositary receipts representing such securities. Electrical Equipment 5.2% Banks 4.5% Construction & Engineering 4.2% Performance Overview Food Products 3.2% During the 12-month period, the Fund posted cumulative total returns of -18.28% based on market price and -17.08% based on net asset value. In comparison, the FTSE France Index as closely as possible (i.e., invest in all of the compo- Capped Index posted a -17.46% total return for the same nent securities in their respective weightings in the period.2 You can find more of the Fund’s performance data in Underlying Index). However, under various circumstances, it the Performance Summary beginning on page 47. may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative Performance data represent past performance, which does sampling” strategy whereby we would invest in what we not guarantee future results. Investment return and principal believe to be a representative sample of the component value will fluctuate, and you may have a gain or loss when securities of the Underlying Index, but may not track the you sell your shares. Current performance may differ from Underlying Index with the same degree of accuracy as would figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar Investment Strategy to that of the Underlying Index, including securities that The Fund, using a “passive” or indexing investment resemble those included in the Underlying Index in terms of approach, seeks investment results that closely correspond, risk factors, performance attributes and other characteristics, before fees and expenses, to the performance of the FTSE such as market capitalization and industry weightings. The France Capped Index. We seek to achieve, over time, a cor- Fund will concentrate its investments (i.e., hold 25% or more relation between the Fund’s performance, before fees and of its net assets) in a particular industry or group of industries expenses, and that of the Underlying Index of 0.95 or better. to approximately the same extent that the Underlying Index A figure of 1.00 would indicate perfect correlation. Our inten- is concentrated. tion is to replicate the component securities of the Underlying 1. The FTSE France Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE France Capped Index is based on the FTSE France Index and is designed to measure the performance of French large- and mid-capitalization stocks. 2. Source: FactSet. The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 230. franklintempleton.com Annual Report 45


  • Page 48

    FRANKLIN FTSE FRANCE ETF Top 10 Holdings 3/31/20 Company % of Total Sector/Industry, Country Net Assets Sanofi 8.0% Pharmaceuticals, France Total SA 7.7% Oil, Gas & Consumable Fuels, France Dina Ting, CFA LVMH Moet Hennessy Louis Vuitton SE 7.7% Textiles, Apparel & Luxury Goods, France L’Oreal SA 5.3% Personal Products, France Air Liquide SA 4.9% Chemicals, France Schneider Electric SE 3.8% Electrical Equipment, France Louis Hsu, CFA Kering SA 3.2% Textiles, Apparel & Luxury Goods, France Vinci SA 3.2% Hailey Harris Construction & Engineering, France Danone SA 3.2% Food Products, France Portfolio Management Team Airbus SE 3.0% Aerospace & Defense, France The foregoing information reflects our analysis, opinions and Manager’s Discussion portfolio holdings as of March 31, 2020, the end of the report- ing period. These opinions may not be relied upon as For the fiscal year ended March 31, 2020, the only sector investment advice or an offer for a particular security. The that contributed to the Fund’s absolute performance was information is not a complete analysis of every aspect of any materials. Individual holdings that lifted the Fund’s absolute market, country, industry, security or the Fund. Statements of return included Air Liquide, LVMH Moet Hennessy Louis fact are from sources considered reliable, but the investment Vuitton and STMicroelectronics. manager makes no representation or warranty as to their completeness or accuracy. Although historical performance For the same period, the sectors that detracted most from the is no guarantee of future results, these insights may help you understand our investment management philosophy. Fund’s absolute performance were industrials, financials and energy. Individual holdings that hindered the Fund’s absolute return included Airbus, Total and BNP Paribas. Thank you for your participation in Franklin FTSE France ETF. We look forward to serving your future investment needs. 46 Annual Report franklintempleton.com


  • Page 49

    FRANKLIN FTSE FRANCE ETF Performance Summary as of March 31, 2020 Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance table and graph 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 (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 3/31/20 Cumulative Total Return1 Average Annual Total Return1 Based on Based on Based on Based on NAV2 market price3 NAV2 market price3 1-Year -17.08% -18.28% -17.08% -18.28% Since Inception (11/2/17) -19.42% -20.23% -8.57% -8.96% 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 49 for Performance Summary footnotes. franklintempleton.com Annual Report 47


  • Page 50

    FRANKLIN FTSE FRANCE ETF PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index. 11/2/17–3/31/20 $12,000 $11,000 $10,000 $9,000 $8,058 $8,000 $7,995 $7,000 11/17 3/18 3/19 3/20 Franklin FTSE France ETF FTSE France Capped Index4 See page 49 for Performance Summary footnotes. 48 Annual Report franklintempleton.com

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