Franklin FTSE China ETF

The fund seeks to replicate the total return performance of the benchmark index, before fees and expenses, by investing in companies outside the United States.

The investment process starts with a list of companies in the benchmark index and the research team utilizes quantitative techniques and fundamental analysis to identify investment opportunities.

As part of its strategy, the fund employs a passive or indexing investment approach to replicate the performance of the Index.

Next, the research team invests significantly in the component securities of the Index and in depositary receipts representing such securities.

The Index is designed to measure the performance of Chinese large- and mid-capitalization stocks, as represented by H-Shares, B-Shares and A-Shares.

Then the manager constructs a portfolio of stocks from a list of companies favored by the research team and allocates capital based on its conviction level.

The fund seeks to replicate the composition of the benchmark index, holding each security in approximately the same proportion as its weighting in the Index.

Or, the fund employs a representative sampling strategy to invest in a representative sample of securities that collectively have an investment profile similar to that of the Index.

The fund will concentrate its investments in a particular industry or group of industries to approximately the same extent that the Index is concentrated.

In addition, the fund is a non-diversified fund, which means it generally invests a greater proportion of its assets in the securities of one or more issuers and invests overall in a smaller number of issuers than a diversified fund.

The fund invests in eligible China A-Shares listed and traded on the Shanghai stock exchange through the Shanghai – Hong Kong Stock Connect program and in eligible China A-Shares listed and traded on the Shenzhen stock exchange through the Shenzhen – Hong Kong Stock Connect program.

Also, the fund may invest in China A-Shares acquired through any other means permitted by applicable law or regulation.