Form N-CSR Legg Mason ETF Investmen For: Mar 31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-23096
(Exact name of registrant as specified in charter)
One Madison Avenue, 17th Floor, New York, NY 10010
(Address of principal executive offices) (Zip code)
Harris Goldblat
Franklin Templeton
100 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-877-721-1926
Date of fiscal year end: March 31
Date of reporting period:
| ITEM 1. | REPORT TO STOCKHOLDERS |
(a) The Report to Shareholders is filed herewith
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Annual Shareholder Report |
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This report describes changes to the Fund that occurred during the reporting period.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
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Fund Name
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Costs of a $10,000 investment
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Costs paid as a percentage of a $10,000 investment
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Franklin ClearBridge Enhanced Income ETF
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$
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|
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended March 31, 2026, Franklin ClearBridge Enhanced Income ETF returned 11.64%. The Fund compares its performance to the S&P 500 Index and the CBOE S&P 500 BuyWrite Index, which returned 17.80% and 11.35%, respectively, for the same period.
PERFORMANCE HIGHLIGHTS
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Top contributors to performance:
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↑
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ExxonMobil, in the energy sector, is an oil and gas exploration and production company which outperformed amid a rotation into the energy sector in the first quarter and higher oil prices due to the war in the Middle East in March 2026.
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↑
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Oracle, in the information technology (IT) sector, is the world’s third-largest supplier of enterprise software and cloud services. The company saw its share price lifted amid a combination of strong quarterly earnings, surging cloud and artificial intelligence (AI) momentum and news of a significant new cloud service contract to begin implementation in 2028.
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↑
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Williams Companies, in the energy sector, is a natural-gas-focused midstream energy company. Shares were higher as it continued to perform well in a strengthening market for natural gas. Shares also strengthened due to positive sentiment on the AI growth opportunity for natural gas pipeline companies; in 2026, the company announced several new projects including another behind-the-meter power project, serving data centers.
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Top detractors from performance:
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↓
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Nvidia, a semiconductor company in the IT sector, performed well on surging AI demand; the stock does not meet the Fund’s requirements for dividend-paying companies and is not eligible for ownership in the Strategy.
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↓
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An underweight to Alphabet, in the communication services sector, was a relative headwind. Alphabet’s success with its Google Gemini chatbot and TPU chips for AI workloads boosted its shares in 2025, while the Department of Justice antitrust case concluded with less onerous penalties than feared, lifting sentiment.
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↓
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Increasing competitive dynamics in the wireless industry weighed on T-Mobile, the largest U.S. wireless carrier, in the communication services sector.
|
| Franklin ClearBridge Enhanced Income ETF | PAGE 1 | YLDE-ATSR-0526 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
VALUE OF A $10,000 INVESTMENT – Franklin ClearBridge Enhanced Income ETF 5/22/2017 — 3/31/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended March 31, 2026
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1 Year
|
5 Year
|
Since Inception
(5/22/2017) |
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Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
Effective February 28, 2025, the Fund changed its name and adopted the Fund’s current investment strategies.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/exchange-traded-funds.
https://www.franklintempleton.com/investments/options/exchange-traded-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of March 31, 2026)
|
Total Net Assets
|
$
|
|
Total Number of Portfolio Holdings (excludes derivatives, except purchased options, if any)
|
|
|
Total Management Fee Paid (based on a unitary fee)
|
$
|
|
Portfolio Turnover Rate
|
|
| Franklin ClearBridge Enhanced Income ETF | PAGE 2 | YLDE-ATSR-0526 |
| * | Does not include derivatives, except purchased options, if any. |
HOW HAS THE FUND CHANGED?
 |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
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| Franklin ClearBridge Enhanced Income ETF | PAGE 3 | YLDE-ATSR-0526 |
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 |
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|
|
|
|
Annual Shareholder Report |
|
|
|
|
This report describes changes to the Fund that occurred during the reporting period.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
ClearBridge Large Cap Growth Select ETF
|
$
|
|
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended March 31, 2026, ClearBridge Large Cap Growth Select ETF returned 8.14%. The Fund compares its performance to the Russell 1000 Growth Index, which returned 18.81% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
ASML, in the information technology sector (IT), is a designer of extreme ultraviolet lithography equipment for advanced semiconductor manufacturing. ASML’s stock was up significantly in the reporting period due to the massive, ongoing demand for advanced artificial intelligence (AI) chips, and improved demand environment for DRAM (memory).
|
|
↑
|
Taiwan Semiconductor Manufacturing Co., Ltd., in the IT sector, is the world’s largest contract manufacturer of semiconductors and holds a near monopoly in high-end chips. Shares were lifted as the company projected annual revenue growth of nearly 30%, surpassing analyst estimates and announced a large capital expenditure budget, signaling high confidence in sustained demand from the global AI boom.
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↑
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Eaton, in the industrials sector, is a critical player in supporting the increasing electrification of the global economy. Positive performance was driven by a rotation into industrials during the period, continued positive demand for AI and the company’s improvements in getting capacity online.
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Top detractors from performance:
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↓
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UnitedHealth Group, in the health care sector, offers health insurance through its UnitedHealthcare segment and health services through its Optum division. The company’s stock was pressured by weak operating results due to a number of challenges in its Medicare and Optum health businesses, cost pressures and regulatory concerns.
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↓
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Oracle Corp., in the IT sector, is a database software provider that has transitioned into a provider of cloud services to support AI computing needs. The stock faced continued downward pressure driven by mounting investor concerns over the financing required for its aggressive AI infrastructure push and its high exposure to ChatGPT operator OpenAI.
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↓
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Meta Platforms, in the communication services sector, is a leading digital advertiser and developer of cloud services to support AI computing. Despite generally solid financial results, the stock was pressured by its plans to ramp up spending on AI infrastructure to stay competitive in the fast-growing AI market.
|
| ClearBridge Large Cap Growth Select ETF | PAGE 1 | LRGE-ATSR-0526 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
VALUE OF A $10,000 INVESTMENT – ClearBridge Large Cap Growth Select ETF 5/22/2017 — 3/31/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended March 31, 2026
|
|
1 Year
|
5 Year
|
Since Inception
(5/22/2017) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
Effective August 1, 2025, the Fund changed its name and adopted the Fund’s current investment strategy.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/exchange-traded-funds.
https://www.franklintempleton.com/investments/options/exchange-traded-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of March 31, 2026)
|
Total Net Assets
|
$
|
|
Total Number of Portfolio Holdings
|
|
|
Total Management Fee Paid (based on a unitary fee)
|
$
|
|
Portfolio Turnover Rate
|
|
| ClearBridge Large Cap Growth Select ETF | PAGE 2 | LRGE-ATSR-0526 |
| * | Does not include derivatives, except purchased options, if any. |
HOW HAS THE FUND CHANGED?
|
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
| ClearBridge Large Cap Growth Select ETF | PAGE 3 | LRGE-ATSR-0526 |
(b) Not applicable
| ITEM 2. | CODE OF ETHICS. |
(a) The Registrant has adopted a code of ethics that applies to its principal executive officer and principal financial officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 19(a) (1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officer and principal financial officer.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
The Board of Trustees of the Registrant has determined that Deborah D. McWhinney, possesses the technical attributes identified in Item 3 to Form N-CSR to qualify as an “audit committee financial expert,” and has designated Deborah D. McWhinney as the Audit Committee’s financial expert. Deborah D. McWhinney is an “independent” Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
a) Audit Fees. The aggregate fees billed in the last two fiscal years ending March 31, 2025 and March 31, 2026 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $145,352 in March 31, 2025 and $94,119 in March 31, 2026.
b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in March 31, 2025 and $0 in March 31, 2026.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $72,000 in March 31, 2025 and $50,000 in March 31, 2026. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.
There were no fees billed for tax services by the Auditors to the Registrant’s investment manager and any entity controlling, controlled by, or under common control with the investment manager that provides ongoing services to the Registrant (“Service Affiliates”) during the Reporting Periods that required pre-approval by the Audit Committee.
d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant, other than the services reported in paragraphs (a) through (c) of this item, were $0 in March 31, 2025 and $0 in March 31, 2026.
There were no other non-audit services rendered by the Auditor to the Service Affiliates requiring pre-approval by the Audit Committee in the Reporting Periods.
(e) Audit Committee’s pre–approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
(1) The Charter for the Audit Committee (the “Committee”) of the Board of each registered investment company (the “Fund”) advised by the Registrant’s investment manager or one of their affiliates (each, an “Adviser”) requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to the Adviser and any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered Service Providers”) if the engagement relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which such services are approved other than by the full Committee.
The Committee shall not approve non-audit services that the Committee believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit services include any professional services (including tax services), that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and the Covered Service Providers constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.
(2) None of the services described in paragraphs (b) through (d) of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Non-audit fees billed by the Auditor for services rendered to the Registrant and the Service Affiliates during the reporting period were $1,315,528 in March 31, 2025 and $2,444,477 in March 31, 2026.
(h) Yes. The Registrant’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor’s independence. All services provided by the Auditor to the Registrant or to the Service Affiliates, which were required to be pre-approved, were pre-approved as required.
(i) Not applicable.
(j) Not applicable.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| ITEM 6. | SCHEDULE OF INVESTMENTS. |
| (a) | Please see schedule of investments contained in the Financial Statements and Financial Highlights included under Item 7 of this Form N-CSR. |
| (b) | Not applicable. |
| ITEM 7. | FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
ClearBridge ETFs
Financial Statements and Other Important Information
Annual | March
31, 2026
Franklin ClearBridge Enhanced Income ETF
ClearBridge Large Cap Growth Select ETF
If you need assistance accessing this content,
please reach out to your sales representative or send an email to [email protected].
Table of Contents
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franklintempleton.com
Financial
Statements and Other Important Information — Annual
Schedules
of Investments
March 31, 2026
Franklin
ClearBridge Enhanced Income ETF
(Percentages
shown based on Fund net assets)
|
Security
|
|
|
|
Shares
|
Value
|
|
Common
Stocks — 99.1% | |||||
|
Communication
Services — 9.9% | |||||
|
Diversified
Telecommunication Services — 2.3% | |||||
|
Comcast
Corp., Class A Shares |
|
116,905
|
$3,356,343
| ||
|
Entertainment
— 0.7% | |||||
|
Walt
Disney Co. |
|
10,275
|
990,304
| ||
|
Interactive
Media & Services — 4.7% | |||||
|
Alphabet
Inc., Class A Shares |
|
14,839
|
4,267,103
| ||
|
Meta
Platforms Inc., Class A Shares |
|
4,252
|
2,432,697
| ||
|
Total
Interactive Media & Services |
6,699,800
| ||||
|
Wireless
Telecommunication Services — 2.2% | |||||
|
T-Mobile
US Inc. |
|
14,648
|
3,076,519
| ||
|
| |||||
|
Total
Communication Services |
14,122,966
| ||||
|
Consumer
Discretionary — 2.9% | |||||
|
Specialty
Retail — 2.9% | |||||
|
Home
Depot Inc. |
|
5,794
|
1,905,589
| ||
|
Industria
de Diseno Textil SA, ADR |
|
159,921
|
2,301,263
| ||
|
| |||||
|
Total
Consumer Discretionary |
4,206,852
| ||||
|
Consumer
Staples — 8.5% | |||||
|
Beverages
— 2.5% | |||||
|
Coca-Cola
Co. |
|
36,315
|
2,761,756
| ||
|
Diageo
PLC, ADR |
|
10,070
|
749,711
| ||
|
Total
Beverages |
3,511,467
| ||||
|
Food
Products — 2.9% | |||||
|
Nestle
SA, ADR |
|
42,207
|
4,182,714
| ||
|
Household
Products — 1.1% | |||||
|
Procter
& Gamble Co. |
|
11,190
|
1,616,283
| ||
|
Personal
Care Products — 2.0% | |||||
|
Unilever
PLC, ADR |
|
49,176
|
2,801,557
| ||
|
| |||||
|
Total
Consumer Staples |
12,112,021
| ||||
|
Energy
— 8.4% | |||||
|
Oil,
Gas & Consumable Fuels — 8.4% | |||||
|
Exxon
Mobil Corp. |
|
31,960
|
5,422,334
| ||
|
Williams
Cos. Inc. |
|
91,790
|
6,680,477
| ||
|
| |||||
|
Total
Energy |
12,102,811
| ||||
|
Financials
— 16.5% | |||||
|
Banks
— 3.8% | |||||
|
JPMorgan
Chase & Co. |
|
11,292
|
3,321,655
| ||
|
PNC
Financial Services Group Inc. |
|
9,962
|
2,072,992
| ||
|
Total
Banks |
5,394,647
| ||||
|
Capital
Markets — 1.5% | |||||
|
Blackstone
Inc. |
|
19,268
|
2,215,627
| ||
|
Consumer
Finance — 1.3% | |||||
|
Capital
One Financial Corp. |
|
9,858
|
1,798,395
| ||
|
Financial
Services — 4.3% | |||||
|
Apollo
Global Management Inc. |
|
34,576
|
3,852,458
| ||
|
Visa
Inc., Class A Shares |
|
7,832
|
2,367,144
| ||
|
Total
Financial Services |
6,219,602
| ||||
See
Notes to Financial Statements.
1
ClearBridge
ETFs 2026 Annual Report
Schedules
of Investments (cont’d)
March 31, 2026
Franklin
ClearBridge Enhanced Income ETF
(Percentages
shown based on Fund net assets)
|
Security
|
|
|
|
Shares
|
Value
|
|
| |||||
|
Insurance
— 5.6% | |||||
|
Marsh
& McLennan Cos. Inc. |
|
17,781
|
$3,084,114
| ||
|
MetLife
Inc. |
|
34,125
|
2,413,320
| ||
|
Travelers
Cos. Inc. |
|
8,620
|
2,514,282
| ||
|
Total
Insurance |
8,011,716
| ||||
|
| |||||
|
Total
Financials |
23,639,987
| ||||
|
Health
Care — 12.2% | |||||
|
Health
Care Equipment & Supplies — 2.2% | |||||
|
Becton
Dickinson & Co. |
|
20,184
|
3,173,530
| ||
|
Health
Care Providers & Services — 2.3% | |||||
|
CVS
Health Corp. |
|
33,123
|
2,378,894
| ||
|
UnitedHealth
Group Inc. |
|
3,294
|
891,323
| ||
|
Total
Health Care Providers & Services |
3,270,217
| ||||
|
Life
Sciences Tools & Services — 0.6% | |||||
|
Waters
Corp. |
|
2,736
|
814,781
*
| ||
|
Pharmaceuticals
— 7.1% | |||||
|
AstraZeneca
PLC |
|
10,512
|
2,073,177
| ||
|
Haleon
PLC, ADR |
|
285,125
|
2,854,101
| ||
|
Johnson
& Johnson |
|
11,512
|
2,813,993
| ||
|
Roche
Holding AG, ADR |
|
48,760
|
2,423,860
| ||
|
Total
Pharmaceuticals |
10,165,131
| ||||
|
| |||||
|
Total
Health Care |
17,423,659
| ||||
|
Industrials
— 11.9% | |||||
|
Aerospace
& Defense — 2.4% | |||||
|
L3Harris
Technologies Inc. |
|
5,824
|
2,010,154
| ||
|
RTX
Corp. |
|
7,741
|
1,493,239
| ||
|
Total
Aerospace & Defense |
3,503,393
| ||||
|
Commercial
Services & Supplies — 1.7% | |||||
|
Waste
Management Inc. |
|
10,451
|
2,401,535
| ||
|
Ground
Transportation — 3.6% | |||||
|
Old
Dominion Freight Line Inc. |
|
9,613
|
1,878,380
| ||
|
Union
Pacific Corp. |
|
13,250
|
3,214,715
| ||
|
Total
Ground Transportation |
5,093,095
| ||||
|
Industrial
Conglomerates — 1.3% | |||||
|
Honeywell
International Inc. |
|
8,272
|
1,869,720
| ||
|
Machinery
— 1.0% | |||||
|
Otis
Worldwide Corp. |
|
17,820
|
1,373,566
| ||
|
Professional
Services — 1.9% | |||||
|
Automatic
Data Processing Inc. |
|
13,456
|
2,733,990
| ||
|
| |||||
|
Total
Industrials |
16,975,299
| ||||
|
Information
Technology — 13.7% | |||||
|
Electronic
Equipment, Instruments & Components — 1.4% | |||||
|
TE
Connectivity PLC |
|
9,558
|
1,997,813
| ||
|
Semiconductors
& Semiconductor Equipment — 6.9% | |||||
|
Broadcom
Inc. |
|
13,347
|
4,131,030
| ||
|
Taiwan
Semiconductor Manufacturing Co. Ltd., ADR |
|
4,344
|
1,468,055
| ||
|
Texas
Instruments Inc. |
|
21,980
|
4,267,197
| ||
|
Total
Semiconductors & Semiconductor Equipment |
9,866,282
| ||||
See
Notes to Financial Statements.
2
ClearBridge
ETFs 2026 Annual Report
Franklin
ClearBridge Enhanced Income ETF
(Percentages
shown based on Fund net assets)
|
Security
|
|
|
|
Shares
|
Value
|
|
| |||||
|
Software
— 3.7% | |||||
|
Microsoft
Corp. |
|
14,137
|
$5,233,093
| ||
|
Technology
Hardware, Storage & Peripherals — 1.7% | |||||
|
Apple
Inc. |
|
9,684
|
2,457,703
| ||
|
| |||||
|
Total
Information Technology |
19,554,891
| ||||
|
Materials
— 7.4% | |||||
|
Chemicals
— 4.9% | |||||
|
Air
Products & Chemicals Inc. |
|
14,221
|
4,131,058
| ||
|
Linde
PLC |
|
5,840
|
2,895,239
| ||
|
Total
Chemicals |
7,026,297
| ||||
|
Construction
Materials — 1.6% | |||||
|
Vulcan
Materials Co. |
|
8,578
|
2,335,789
| ||
|
Metals
& Mining — 0.9% | |||||
|
Freeport-McMoRan
Inc. |
|
22,051
|
1,296,158
| ||
|
| |||||
|
Total
Materials |
10,658,244
| ||||
|
Real
Estate — 3.8% | |||||
|
Specialized
REITs — 3.8% | |||||
|
American
Tower Corp. |
|
13,058
|
2,253,549
| ||
|
Public
Storage |
|
11,968
|
3,241,892
| ||
|
| |||||
|
Total
Real Estate |
5,495,441
| ||||
|
Utilities
— 3.9% | |||||
|
Electric
Utilities — 1.1% | |||||
|
PG&E
Corp. |
|
85,929
|
1,509,773
| ||
|
Multi-Utilities
— 2.8% | |||||
|
DTE
Energy Co. |
|
7,694
|
1,125,017
| ||
|
Sempra
|
|
30,315
|
2,945,708
| ||
|
Total
Multi-Utilities |
4,070,725
| ||||
|
| |||||
|
Total
Utilities |
5,580,498
| ||||
|
Total
Investments before Short-Term Investments (Cost — $130,095,981) |
141,872,669
| ||||
|
|
|
Rate
|
|
|
|
|
Short-Term
Investments — 0.9% | |||||
|
JPMorgan
100% U.S. Treasury Securities Money Market Fund, Institutional Class
(Cost
— $1,315,210)
|
3.508%
|
|
1,315,210
|
1,315,210
(a)
| |
|
Total
Investments — 100.0% (Cost — $131,411,191) |
143,187,879
| ||||
|
Liabilities
in Excess of Other Assets — (0.0)%†† |
(69,146
) | ||||
|
Total
Net Assets — 100.0% |
$143,118,733
| ||||
|
††
|
Represents
less than 0.1%. |
|
*
|
Non-income
producing security. |
|
(a)
|
Rate
shown is one-day yield as of the end of the reporting period.
|
|
Abbreviation(s)
used in this schedule: | ||
|
ADR
|
—
|
American
Depositary Receipts |
See
Notes to Financial Statements.
3
ClearBridge
ETFs 2026 Annual Report
Schedules
of Investments (cont’d)
March 31, 2026
Franklin
ClearBridge Enhanced Income ETF
At March 31, 2026,
the Fund had the following open written options contracts:
|
Exchange-Traded
Written Options | ||||||
|
Security
|
|
Expiration
Date
|
Strike
Price
|
Contracts
|
Notional
Amount
|
Value
|
|
S&P
500 Index, Call |
4/2/26
|
$7,140.000
|
28
|
$18,279,856
|
$(0)(a)
| |
|
S&P
500 Index, Call |
4/10/26
|
7,030.000
|
36
|
23,502,672
|
(1,512)
| |
|
S&P
500 Index, Call |
4/17/26
|
7,005.000
|
36
|
23,502,672
|
(4,140)
| |
|
S&P
500 Index, Call |
4/24/26
|
6,890.000
|
37
|
24,155,524
|
(41,699)
| |
|
S&P
500 Index, Call |
5/1/26
|
6,810.000
|
37
|
24,155,524
|
(142,561)
| |
|
Total
Exchange-Traded Written Options (Premiums received — $513,003) |
$(189,912)
| |||||
|
(a)
|
Value
is less than $1. |
See
Notes to Financial Statements.
4
ClearBridge
ETFs 2026 Annual Report
ClearBridge
Large Cap Growth Select ETF
(Percentages
shown based on Fund net assets)
|
Security
|
|
|
|
Shares
|
Value
|
|
Common
Stocks — 98.2% | |||||
|
Communication
Services — 11.9% | |||||
|
Entertainment
— 4.5% | |||||
|
Netflix
Inc. |
|
186,853
|
$17,965,916
*
| ||
|
Interactive
Media & Services — 7.4% | |||||
|
Meta
Platforms Inc., Class A Shares |
|
51,961
|
29,728,447
| ||
|
| |||||
|
Total
Communication Services |
47,694,363
| ||||
|
Consumer
Discretionary — 17.5% | |||||
|
Automobiles
— 4.8% | |||||
|
Tesla
Inc. |
|
51,112
|
19,000,886
*
| ||
|
Broadline
Retail — 8.0% | |||||
|
Amazon.com
Inc. |
|
153,439
|
31,956,741
*
| ||
|
Hotels,
Restaurants & Leisure — 4.7% | |||||
|
Airbnb
Inc., Class A Shares |
|
94,678
|
11,955,938
*
| ||
|
Chipotle
Mexican Grill Inc. |
|
217,042
|
6,947,514
*
| ||
|
Total
Hotels, Restaurants & Leisure |
18,903,452
| ||||
|
| |||||
|
Total
Consumer Discretionary |
69,861,079
| ||||
|
Consumer
Staples — 1.9% | |||||
|
Beverages
— 1.9% | |||||
|
Monster
Beverage Corp. |
|
105,089
|
7,614,749
*
| ||
|
| |||||
|
Financials
— 7.8% | |||||
|
Capital
Markets — 1.2% | |||||
|
Blackstone
Inc. |
|
43,244
|
4,972,628
| ||
|
Financial
Services — 4.4% | |||||
|
Visa
Inc., Class A Shares |
|
58,171
|
17,581,603
| ||
|
Insurance
— 2.2% | |||||
|
Marsh
& McLennan Cos. Inc. |
|
50,876
|
8,824,442
| ||
|
| |||||
|
Total
Financials |
31,378,673
| ||||
|
Health
Care — 7.1% | |||||
|
Biotechnology
— 1.8% | |||||
|
Vertex
Pharmaceuticals Inc. |
|
16,000
|
7,144,640
*
| ||
|
Health
Care Equipment & Supplies — 2.8% | |||||
|
Intuitive
Surgical Inc. |
|
24,646
|
11,361,559
*
| ||
|
Life
Sciences Tools & Services — 2.5% | |||||
|
Thermo
Fisher Scientific Inc. |
|
19,960
|
9,810,939
| ||
|
| |||||
|
Total
Health Care |
28,317,138
| ||||
|
Industrials
— 5.2% | |||||
|
Electrical
Equipment — 3.4% | |||||
|
Eaton
Corp. PLC |
|
37,450
|
13,394,742
| ||
|
Machinery
— 1.8% | |||||
|
Parker-Hannifin
Corp. |
|
8,067
|
7,221,901
| ||
|
| |||||
|
Total
Industrials |
20,616,643
| ||||
|
Information
Technology — 43.8% | |||||
|
Semiconductors
& Semiconductor Equipment — 22.5% | |||||
|
ASML
Holding NV, Registered Shares |
|
9,237
|
12,200,507
| ||
|
NVIDIA
Corp. |
|
374,697
|
65,347,158
| ||
|
Taiwan
Semiconductor Manufacturing Co. Ltd., ADR |
|
36,596
|
12,367,618
| ||
|
Total
Semiconductors & Semiconductor Equipment |
89,915,283
| ||||
See
Notes to Financial Statements.
5
ClearBridge
ETFs 2026 Annual Report
Schedules
of Investments (cont’d)
March 31, 2026
ClearBridge
Large Cap Growth Select ETF
(Percentages
shown based on Fund net assets)
|
Security
|
|
|
|
Shares
|
Value
|
|
| |||||
|
Software
— 12.1% | |||||
|
Datadog
Inc., Class A Shares |
|
32,395
|
$3,824,229
*
| ||
|
Intuit
Inc. |
|
17,600
|
7,609,888
| ||
|
Oracle
Corp. |
|
71,989
|
10,590,302
| ||
|
Palo
Alto Networks Inc. |
|
80,222
|
12,861,191
*
| ||
|
ServiceNow
Inc. |
|
52,282
|
5,466,083
*
| ||
|
Synopsys
Inc. |
|
20,531
|
8,140,131
*
| ||
|
Total
Software |
48,491,824
| ||||
|
Technology
Hardware, Storage & Peripherals — 9.2% | |||||
|
Apple
Inc. |
|
145,375
|
36,894,721
| ||
|
| |||||
|
Total
Information Technology |
175,301,828
| ||||
|
Materials
— 3.0% | |||||
|
Chemicals
— 3.0% | |||||
|
Linde
PLC |
|
8,076
|
4,003,758
| ||
|
Sherwin-Williams
Co. |
|
25,283
|
8,104,465
| ||
|
| |||||
|
Total
Materials |
12,108,223
| ||||
|
Total
Investments before Short-Term Investments (Cost — $318,448,886) |
392,892,696
| ||||
|
|
|
Rate
|
|
|
|
|
Short-Term
Investments — 1.9% | |||||
|
JPMorgan
100% U.S. Treasury Securities Money Market Fund, Institutional Class
(Cost
— $7,375,639)
|
3.508%
|
|
7,375,639
|
7,375,639
(a)
| |
|
Total
Investments — 100.1% (Cost — $325,824,525) |
400,268,335
| ||||
|
Liabilities
in Excess of Other Assets — (0.1)% |
(269,627
) | ||||
|
Total
Net Assets — 100.0% |
$399,998,708
| ||||
|
*
|
Non-income
producing security. |
|
(a)
|
Rate
shown is one-day yield as of the end of the reporting period.
|
|
Abbreviation(s)
used in this schedule: | ||
|
ADR
|
—
|
American
Depositary Receipts |
See
Notes to Financial Statements.
6
ClearBridge
ETFs 2026 Annual Report
Statements
of Assets and Liabilities
March 31, 2026
|
|
Franklin
ClearBridge
Enhanced
Income ETF |
ClearBridge
Large
Cap Growth Select ETF |
|
Assets:
|
|
|
|
Investments,
at value (Cost — $131,411,191 and $325,824,525, respectively) |
$143,187,879
|
$400,268,335
|
|
Dividends
receivable |
175,932
|
75,522
|
|
Receivable
for securities sold
|
—
|
9,297,167
|
|
Total
Assets |
143,363,811
|
409,641,024
|
|
Liabilities:
|
|
|
|
Written
options, at value (premiums received — $513,003 and 0, respectively) |
189,912
|
—
|
|
Investment
management fee payable |
55,166
|
161,673
|
|
Payable
for securities purchased |
—
|
9,480,643
|
|
Total
Liabilities |
245,078
|
9,642,316
|
|
Total
Net Assets |
$143,118,733
|
$399,998,708
|
|
Net
Assets: |
|
|
|
Par
value (Note
5) |
$27
|
$53
|
|
Paid-in capital
|
131,764,119
|
350,015,232
|
|
Total
distributable earnings (loss)
|
11,354,587
|
49,983,423
|
|
Total
Net Assets |
$143,118,733
|
$399,998,708
|
|
Shares
Outstanding |
2,650,000
|
5,313,748
|
|
Net
Asset Value |
$54.01
|
$75.28
|
See
Notes to Financial Statements.
7
ClearBridge
ETFs 2026 Annual Report
Statements
of Operations
For the Year
Ended March 31, 2026
|
|
Franklin
ClearBridge
Enhanced
Income ETF |
ClearBridge
Large
Cap Growth Select ETF |
|
Investment
Income: |
|
|
|
Dividends
|
$2,558,253
|
$1,976,179
|
|
Less:
Foreign taxes withheld |
(58,893)
|
(43,660)
|
|
Total
Investment Income |
2,499,360
|
1,932,519
|
|
Expenses:
|
|
|
|
Investment
management fee (Note
2) |
526,549
|
1,982,786
|
|
Total
Expenses |
526,549
|
1,982,786
|
|
Net
Investment Income (Loss) |
1,972,811
|
(50,267)
|
|
Realized
and Unrealized Gain (Loss) on Investments, Written Options and Foreign Currency Transactions
(Notes
1, 3 and 4): | ||
|
Net
Realized Gain (Loss) From: |
|
|
|
Investment
transactions |
6,430,437
|
45,068,500
|
|
Written
options |
(158,671)
|
—
|
|
Foreign
currency transactions |
896
|
—
|
|
Net
Realized Gain
|
6,272,662
|
45,068,500
|
|
Change
in Net Unrealized Appreciation (Depreciation) From: |
|
|
|
Investments
|
2,310,971
|
(12,118,659
) |
|
Written
options |
114,802
|
—
|
|
Foreign
currencies |
(76)
|
—
|
|
Change
in Net Unrealized Appreciation (Depreciation)
|
2,425,697
|
(12,118,659)
|
|
Net
Gain on Investments, Written Options and Foreign Currency
Transactions
|
8,698,359
|
32,949,841
|
|
Increase
in Net Assets From Operations |
$10,671,170
|
$32,899,574
|
See
Notes to Financial Statements.
8
ClearBridge
ETFs 2026 Annual Report
Statements
of Changes in Net Assets
Franklin ClearBridge
Enhanced Income ETF
|
For
the Years Ended March 31, |
2026
|
2025
|
|
Operations:
|
|
|
|
Net
investment income
|
$1,972,811
|
$915,288
|
|
Net
realized gain
|
6,272,662
|
2,129,448
|
|
Change
in net unrealized appreciation (depreciation)
|
2,425,697
|
3,526,478
|
|
Increase
in Net Assets From Operations |
10,671,170
|
6,571,214
|
|
Distributions
to Shareholders From (Note
1): |
|
|
|
Total
distributable earnings |
(7,330,888)
|
(762,989)
|
|
Decrease
in Net Assets From Distributions to Shareholders |
(7,330,888)
|
(762,989)
|
|
Fund
Share Transactions (Note
5): |
|
|
|
Net
proceeds from sale of shares (800,000 and 1,200,000 shares issued, respectively)
|
44,427,351
|
60,515,382
|
|
Cost
of shares repurchased (150,000 and 150,000 shares repurchased, respectively)
|
(8,035,790
) |
(7,780,136
) |
|
Increase
in Net Assets From Fund Share Transactions |
36,391,561
|
52,735,246
|
|
Increase
in Net Assets |
39,731,843
|
58,543,471
|
|
Net
Assets: |
|
|
|
Beginning
of year |
103,386,890
|
44,843,419
|
|
End
of year |
$143,118,733
|
$103,386,890
|
See
Notes to Financial Statements.
9
ClearBridge
ETFs 2026 Annual Report
Statements
of Changes in Net Assets (cont’d)
ClearBridge Large
Cap Growth Select ETF
|
For
the Years Ended March 31, |
2026
|
2025
|
|
Operations:
|
|
|
|
Net
investment income (loss)
|
$(50,267)
|
$1,029,471
|
|
Net
realized gain (loss)
|
45,068,500
|
(3,223,923)
|
|
Change
in net unrealized appreciation (depreciation)
|
(12,118,659)
|
11,383,255
|
|
Increase
in Net Assets From Operations |
32,899,574
|
9,188,803
|
|
Distributions
to Shareholders From (Note
1): |
|
|
|
Total
distributable earnings |
(550,009)
|
(700,001)
|
|
Decrease
in Net Assets From Distributions to Shareholders |
(550,009)
|
(700,001)
|
|
Fund
Share Transactions (Note
5): |
|
|
|
Net
proceeds from sale of shares (2,050,000 and 500,000 shares issued, respectively)
|
161,007,196
|
36,056,914
|
|
Cost
of shares repurchased (2,200,000 and 200,133 shares repurchased, respectively)
|
(174,208,143
) |
(14,367,182
) |
|
Net
assets of shares issued in connection with merger (0 and 1,813,881 shares issued, respectively)
(Note
6)
|
—
|
125,493,889
|
|
Increase
(Decrease) in Net Assets From Fund Share Transactions |
(13,200,947)
|
147,183,621
|
|
Increase
in Net Assets |
19,148,618
|
155,672,423
|
|
Net
Assets: |
|
|
|
Beginning
of year |
380,850,090
|
225,177,667
|
|
End
of year |
$399,998,708
|
$380,850,090
|
See
Notes to Financial Statements.
10
ClearBridge
ETFs 2026 Annual Report
Financial
Highlights
Franklin
ClearBridge Enhanced Income ETF
|
For
a share of beneficial interest outstanding throughout each year ended March 31, unless otherwise noted: | ||||||
|
|
20261
|
20251
|
20241
|
20231
|
20221,2
|
20211,3
|
|
Net
asset value, beginning of year |
$51.69
|
$47.20
|
$39.71
|
$42.27
|
$41.01
|
$34.97
|
|
Income
(loss) from operations: | ||||||
|
Net
investment income |
0.94
|
0.88
|
0.79
|
0.75
|
0.24
|
0.44
|
|
Net
realized and unrealized gain (loss) |
4.94
|
4.38
|
7.44
|
(2.60
) |
1.30
|
6.06
|
|
Total
income (loss) from operations |
5.88
|
5.26
|
8.23
|
(1.85)
|
1.54
|
6.50
|
|
Less
distributions from: |
|
|
|
|
|
|
|
Net
investment income |
(3.56
) |
(0.77
) |
(0.74
) |
(0.71
) |
(0.28
) |
(0.46
) |
|
Total
distributions
|
(3.56
) |
(0.77
) |
(0.74
) |
(0.71
) |
(0.28
) |
(0.46
) |
|
Net
asset value, end of year |
$54.01
|
$51.69
|
$47.20
|
$39.71
|
$42.27
|
$41.01
|
|
Total
return, based on NAV4
|
11.64
% |
11.20
% |
20.95
% |
(4.27
)% |
3.75
% |
18.69
% |
|
Net
assets, end of year (000s) |
$143,119
|
$103,387
|
$44,843
|
$29,782
|
$21,133
|
$20,504
|
|
Ratios
to average net assets: | ||||||
|
Gross
expenses |
0.47
% |
0.47
% |
0.58
%5
|
0.59
% |
0.59
%6
|
0.59
% |
|
Net
expenses |
0.47
|
0.47
|
0.58
5
|
0.59
|
0.59
6
|
0.59
|
|
Net
investment income |
1.76
|
1.78
|
1.86
|
1.92
|
1.75
6
|
1.12
|
|
Portfolio
turnover rate7
|
40
% |
45
% |
17
% |
18
% |
6
% |
9
% |
|
1
|
Per
share amounts have been calculated using the average shares method. |
|
2
|
For
the period December 1, 2021 through March 31, 2022. |
|
3
|
For
the year ended November 30. |
|
4
|
Performance
figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total
return
would have been lower. The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee
of future
results.
Total returns for periods of less than one year are not annualized. |
|
5
|
Effective
March 1, 2024, the Fund’s management fee was reduced to 0.47%. Prior to March 1, 2024, the Fund paid a fee equal to an annual rate
of 0.59% of
the
value of the average daily net assets of the Fund. |
|
6
|
Annualized.
|
|
7
|
Portfolio
turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions.
|
See
Notes to Financial Statements.
11
ClearBridge
ETFs 2026 Annual Report
Financial
Highlights (cont’d)
ClearBridge
Large Cap Growth Select ETF
|
For
a share of beneficial interest outstanding throughout each year ended March 31, unless otherwise noted: | ||||||
|
|
20261
|
20251
|
20241
|
20231
|
20221,2
|
20211,3
|
|
Net
asset value, beginning of year |
$69.70
|
$67.22
|
$47.67
|
$53.73
|
$60.55
|
$48.84
|
|
Income
(loss) from operations: | ||||||
|
Net
investment income (loss) |
(0.01
) |
0.21
|
0.11
|
0.08
|
0.00
4
|
0.04
|
|
Net
realized and unrealized gain (loss) |
5.69
|
2.40
|
19.50
|
(5.32
) |
(6.09
) |
11.85
|
|
Total
income (loss) from operations |
5.68
|
2.61
|
19.61
|
(5.24)
|
(6.09)
|
11.89
|
|
Less
distributions from: |
|
|
|
|
|
|
|
Net
investment income |
(0.10
) |
(0.13
) |
(0.06
) |
(0.07
) |
(0.01
) |
(0.18
) |
|
Net
realized gains |
—
|
—
|
—
|
(0.75
) |
(0.72
) |
—
|
|
Total
distributions
|
(0.10
) |
(0.13
) |
(0.06
) |
(0.82
) |
(0.73
) |
(0.18
) |
|
Net
asset value, end of year |
$75.28
|
$69.70
|
$67.22
|
$47.67
|
$53.73
|
$60.55
|
|
Total
return, based on NAV5
|
8.14
% |
3.87
% |
41.17
% |
(9.48
)% |
(10.21
)% |
24.44
% |
|
Net
assets, end of year (millions) |
$400
|
$381
|
$225
|
$131
|
$223
|
$182
|
|
Ratios
to average net assets: | ||||||
|
Gross
expenses |
0.47
% |
0.48
%6
|
0.58
%6,7
|
0.59
% |
0.59
%8
|
0.59
% |
|
Net
expenses |
0.47
|
0.48
6
|
0.58
6,7
|
0.59
|
0.59
8
|
0.59
|
|
Net
investment income (loss) |
(0.01
) |
0.29
|
0.20
|
0.19
|
0.02
8
|
0.07
|
|
Portfolio
turnover rate9
|
38
% |
18
% |
12
% |
17
% |
9
% |
18
% |
|
1
|
Per
share amounts have been calculated using the average shares method. |
|
2
|
For
the period December 1, 2021 through March 31, 2022. |
|
3
|
For
the year ended November 30. |
|
4
|
Amount
represents less than $0.005 or greater than $(0.005) per share. |
|
5
|
Performance
figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total
return
would have been lower. The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee
of future
results.
Total returns for periods of less than one year are not annualized. |
|
6
|
Expense
ratios are including reorganization expenses that were incurred by the Fund during the period. Without these fees, the gross and net expense
ratios
would have been 0.47% and 0.47%, respectively, for the year ended March 31, 2025, and 0.57% and 0.57%, respectively, for the year ended
March
31, 2024. |
|
7
|
Effective
March 1, 2024, the Fund’s management fee was reduced to 0.47%. Prior to March 1, 2024, the Fund paid a fee equal to an annual rate
of 0.59% of
the
value of the average daily net assets of the Fund. |
|
8
|
Annualized.
|
|
9
|
Portfolio
turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions.
|
See
Notes to Financial Statements.
12
ClearBridge
ETFs 2026 Annual Report
Notes
to Financial Statements
1. Organization
and significant accounting policies
Franklin ClearBridge Enhanced Income
ETF (“Enhanced Income ETF’’) and ClearBridge Large Cap Growth Select ETF (“Large Cap
Growth Select ETF”) (formerly ClearBridge Large Cap Growth ESG ETF) (the “Funds”) are separate investment series of
Legg Mason ETF Investment Trust (the “Trust”). Enhanced Income ETF is a separate diversified investment series of the Trust.
Large Cap Growth Select ETF is a separate non-diversified
investment series of the Trust. The Trust, a Maryland statutory trust,
is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment
company.
The Funds are actively managed exchange-traded
funds (“ETFs”). ETFs are funds that trade like other publicly-traded securities. Unlike
shares of a mutual fund, which can be bought from and redeemed by the issuing fund by all shareholders at a price based
on net asset value (“NAV”), shares of the Funds may be directly purchased from and redeemed by the Funds at NAV solely
by certain large institutional investors who have entered into agreements with the Funds’ distributor (“Authorized Participants”).
Also unlike shares of a mutual fund, shares of the Funds are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.
Shares of the Funds are listed and
traded at market prices on NASDAQ. The market price for a Fund’s shares may be different from
a Fund’s NAV. The Funds issue and redeem shares at NAV only in blocks of a specified number of shares or multiples thereof
(“Creation Units”). Only Authorized Participants may purchase or redeem Creation Units directly with the Funds at NAV. Creation
Units are created and redeemed principally in-kind (although under some circumstances its shares are created and
redeemed partially for cash). Except when aggregated in Creation Units, shares of the Funds are not redeemable securities.
Shareholders who are not Authorized Participants may not redeem shares directly from the Funds at NAV.
The Funds follow the accounting
and reporting guidance in Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification Topic 946, Financial
Services – Investment Companies (“ASC
946”).
The following are significant accounting policies consistently
followed by the Funds and are in conformity with U.S. generally accepted accounting principles (“GAAP”),
including, but not limited to, ASC 946. Estimates and assumptions are required to be made regarding assets, liabilities
and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining these estimates could cause actual results
to differ. Subsequent events have been evaluated through the date the financial statements were issued.
(a) Investment
valuation. Equity
securities for which market quotations are available are valued at the last reported sales price
or official closing price on the primary market or exchange on which they trade. The valuations for fixed income securities
(which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage
obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent
third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques
and methodologies. The independent third party pricing services typically use inputs that are observable such as issuer
details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar
securities. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of
valuation. When the Funds hold securities or other assets that are denominated in a foreign currency, the Funds will use
the currency exchange rates, generally determined as of 4:00 p.m. (London Time). If independent third party pricing services are
unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the
market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction
price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing
broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected
by events after the close of the exchange or market on which the security is principally traded, but before each Fund
calculate its net asset value, the Funds value these securities as determined in accordance with procedures approved by
the Funds’ Board of Trustees (the “Board”).
Pursuant to policies adopted by
the Board, the Funds’ manager has been designated as the valuation designee and is responsible
for the oversight of the daily valuation process. The Funds’ manager is assisted by the Global Fund Valuation Committee
(the “Valuation
Committee”).
The Valuation Committee is responsible for making fair value determinations, evaluating the
effectiveness of the Funds’ pricing policies, and reporting to the Funds’ manager and the Board. When determining the
reliability of third party pricing information for investments owned by the Funds, the Valuation Committee, among other things,
conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among
market participants.
The Valuation Committee will consider
pricing methodologies it deems relevant and appropriate when making fair value determinations.
Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of
a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis;
yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems
relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not
13
ClearBridge
ETFs 2026 Annual Report
Notes
to Financial Statements (cont’d)
limited to,
the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value
of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions;
information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender
offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies;
and the existence of a shelf registration for restricted securities.
For each portfolio security that
has been fair valued pursuant to the policies adopted by the Board, the fair value price is compared
against the last available and next available market quotations. The Valuation Committee reviews the results of such
back testing monthly and fair valuation occurrences are reported to the Board quarterly.
The Funds use valuation techniques
to measure fair value that are consistent with the market approach and/or income approach,
depending on the type of security and the particular circumstance. The market approach uses prices and other relevant
information generated by market transactions involving identical or comparable securities. The income approach uses valuation
techniques to discount estimated future cash flows to present value.
GAAP establishes a disclosure hierarchy
that categorizes the inputs to valuation techniques used to value assets and liabilities
at measurement date. These inputs are summarized in the three broad levels listed below:
•
Level
1 — unadjusted quoted prices in active markets for identical investments
•
Level
2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds,
credit risk, etc.)
•
Level
3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)
The inputs or methodologies used
to value securities are not necessarily an indication of the risk associated with investing in
those securities.
The following is a summary of the
inputs used in valuing the Funds’ assets carried at fair value:
Enhanced Income ETF
|
ASSETS
| ||||
|
Description
|
Quoted
Prices
(Level
1) |
Other
Significant
Observable
Inputs
(Level
2) |
Significant
Unobservable
Inputs
(Level
3) |
Total
|
|
Common
Stocks† |
$141,872,669
|
—
|
—
|
$141,872,669
|
|
Short-Term
Investments† |
1,315,210
|
—
|
—
|
1,315,210
|
|
Total
Investments |
$143,187,879
|
—
|
—
|
$143,187,879
|
|
LIABILITIES
| ||||
|
Description
|
Quoted
Prices
(Level
1) |
Other
Significant
Observable
Inputs
(Level
2) |
Significant
Unobservable
Inputs
(Level
3) |
Total
|
|
Other
Financial Instruments: |
|
|
|
|
|
Written
Options: |
$189,912
|
—
|
—
|
$189,912
|
|
†
|
See
Schedules of Investments for additional detailed categorizations. |
Large Cap Growth Select ETF
|
ASSETS
| ||||
|
Description
|
Quoted
Prices
(Level
1) |
Other
Significant
Observable
Inputs
(Level
2) |
Significant
Unobservable
Inputs
(Level
3) |
Total
|
|
Common
Stocks† |
$392,892,696
|
—
|
—
|
$392,892,696
|
|
Short-Term
Investments† |
7,375,639
|
—
|
—
|
7,375,639
|
|
Total
Investments |
$400,268,335
|
—
|
—
|
$400,268,335
|
|
†
|
See
Schedules of Investments for additional detailed categorizations. |
14
ClearBridge
ETFs 2026 Annual Report
(b) Written
options. The
Fund may write option contracts generally to gain or reduce exposure to certain types of investments or
market factors or as a means of attempting to enhance returns. When the Fund writes an option, an amount equal to the
premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market
value of the option written. If the option expires, the premium received is recorded as a realized gain. When a written
call option is exercised, the difference between the premium received plus the option exercise price and the Fund’s basis
in the underlying security (in the case of a covered written call option), or the cost to purchase the underlying security
(in the case of an uncovered written call option), including brokerage commission, is recognized as a realized gain or loss.
When a written put option is exercised, the amount of the premium received is subtracted from the cost of the security purchased
by the Fund from the exercise of the written put option to form the Fund’s basis in the underlying security purchased. The
writer or buyer of an option traded on an exchange can liquidate the position before the exercise of the option by entering
into a closing transaction. The cost of a closing transaction is deducted from the original premium received resulting in
a realized gain or loss to the Fund.
The risk in writing a covered call
option is that the Fund may forego the opportunity of profit if the market price of the underlying
security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the
market price of the underlying security decreases and the option is exercised. The risk in writing an uncovered call option
is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. In addition, there is
the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.
(c) Foreign
currency translation. Investment
securities and other assets and liabilities denominated in foreign currencies are
translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales
of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts
based upon prevailing exchange rates on the respective dates of such transactions.
The Funds do not isolate that
portion of the results of operations resulting from fluctuations in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the
net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains
or losses arise from sales of foreign currencies, including gains and losses on forward foreign
currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions,
and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’
books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains
and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of
valuation, resulting from changes in exchange rates.
Foreign security and currency transactions
may involve certain considerations and risks not typically associated with those of
U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision
and regulation of foreign securities markets and the possibility of political or economic instability.
(d) Foreign
investment risks. The
Funds’ investments in foreign securities may involve risks not present in domestic investments.
Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or may pay
interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can
significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the Funds to
foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all
of which affect the market and/or credit risk of the investments.
(e) Security
transactions and investment income. Security
transactions are accounted for on a trade date basis. Interest
income (including interest income from payment-in-kind securities) is recorded on the accrual basis. Amortization of premiums
and accretion of discounts on debt securities are recorded to interest income over the lives of the respective securities,
except for premiums on certain callable debt securities, which are amortized to the earliest call date. Dividend income
is recorded on the ex-dividend date for dividends received in cash and/or securities. Foreign dividend income is recorded on
the ex-dividend date or as soon as practicable after the Funds determine the existence of a dividend declaration after exercising
reasonable due diligence. The cost of investments sold is determined by use of the specific identification method. To
the extent any issuer defaults or a credit event occurs that impacts the issuer, the Funds may halt any additional interest income
accruals and consider the realizability of interest accrued up to the date of default or credit event.
(f) REIT
distributions. The
character of distributions received from Real Estate Investment Trusts (‘‘REITs’’) held by the Funds
is generally comprised of net investment income, capital gains, and return of capital. It is the policy of the Funds to estimate
the character of distributions received from underlying REITs based on historical data provided by the REITs. After each
calendar year end, REITs report the actual tax character of these distributions. Differences between the estimated and
actual amounts reported by the REITs are reflected in the Funds’ records in the year in which they are reported by the REITs by
adjusting related investment cost basis, capital gains and income, as necessary.
15
ClearBridge
ETFs 2026 Annual Report
Notes
to Financial Statements (cont’d)
(g) Distributions
to shareholders. Large
Cap Growth Select ETF distributions from net investment income and distributions of
net realized gains, if any, are declared at least annually. For Enhanced Income ETF, distributions from net investment income
of the Fund, if any, are declared and paid on a monthly basis and distributions of net realized gains, if any, are declared at
least annually. Distributions to shareholders of the Funds are recorded on the ex-dividend date and are determined in accordance
with income tax regulations, which may differ from GAAP.
(h) Federal
and other taxes. It
is the Funds’ policy to comply with the federal income and excise tax requirements of the Internal
Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the
Funds intend to distribute their taxable income and net realized gains, if any, to shareholders in accordance with timing
requirements imposed by the Code. Therefore, no federal
or state income tax provision is required in the Funds’ financial statements.
Management has analyzed the Funds’
tax positions taken on income tax returns for all open tax years and has concluded that
as of March 31, 2026, no provision for income tax is required in the Funds’ financial statements. The Funds’ federal and state
income and federal excise tax returns for the prior three fiscal years are subject to examination by the Internal Revenue
Service and state departments of revenue.
Under the applicable foreign tax
laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.
In some cases, the Funds may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any,
are reflected as a dividend receivable in the Statements of Assets and Liabilities and dividend income in the Statements of
Operations. In many cases, however, the Funds may not receive such amounts for an extended period of time, depending on
the country of investment.
(i) Reclassification. GAAP
requires that certain components of net assets be reclassified to
reflect permanent differences between financial and tax
reporting. These reclassifications have no effect on net assets or net asset value per share. During
the current year, the following reclassifications have been made:
|
|
Total
Distributable
Earnings
(Loss) |
Paid-in
Capital
|
|
Enhanced
Income ETF(a)
|
$(1,259,068
) |
$1,259,068
|
|
Large
Cap Growth Select ETF(b)
|
(45,115,872
) |
45,115,872
|
(a)
Reclassifications
are due to book/tax differences in the treatment of an in-kind distribution of securities, a taxable overdistribution, and book/tax differences
in the treatment of various items.
(b)
Reclassifications
are due to a book/tax differences in the treatment of an in-kind distribution of securities.
2. Investment
management agreement and other transactions with affiliates
Franklin Templeton Fund Adviser,
LLC (“FTFA”) is each Fund’s investment manager and ClearBridge Investments, LLC (“ClearBridge”)
is each Fund’s subadviser. Western Asset Management Company, LLC (“Western Asset”) manages the portion of
each Fund’s cash and short-term instruments allocated to it. FTFA, ClearBridge and Western Asset are indirect, wholly-owned
subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).
Effective February 28, 2025, pursuant
to a new sub-advisory agreement, Franklin Managed Options Strategies, LLC (“Franklin MOST”)
became a subadviser to Enhanced Income ETF, providing the day-to-day portfolio management of the options overlay
portion of the portfolio. Franklin MOST is an indirect, wholly owned subsidiary of Franklin Resources.
On December 31, 2025, the investment
management services provided by Franklin MOST, and the personnel of Franklin MOST
who provided such services to Enhanced Income ETF, were transferred to O’Shaughnessy Asset Management, LLC (“OSAM”),
also an indirect, wholly owned subsidiary of Franklin Resources. OSAM assumed the duties and obligations of Franklin
MOST under the sub-advisory agreement between FTFA and Franklin MOST with respect to Enhanced Income ETF.
FTFA provides administrative and
certain oversight services to the Funds. FTFA delegates to the subadviser the day-to-day portfolio
management of the Funds. Each Fund is responsible for paying interest expenses, taxes, brokerage expenses, future 12b-1
fees (if any), acquired fund fees and expenses, extraordinary expenses and the management fee payable to FTFA under
the investment management agreement.
Under the investment management
agreement and subject to the general supervision of the Funds’ Board, FTFA as to each Fund
provides or causes to be furnished all investment management, supervisory, administrative and other services reasonably
necessary for the operation of the Fund, including certain distribution services (provided pursuant to a separate distribution
agreement) and investment advisory services (provided pursuant to separate subadvisory agreements) under a
unitary fee structure.
16
ClearBridge
ETFs 2026 Annual Report
Each Fund pays
an investment management fee, calculated daily and paid monthly, at an annual rate of the Fund’s average daily
net assets as follows:
|
|
Annualized
Fee Rate |
|
Enhanced
Income ETF |
0.47%
|
|
Large
Cap Growth Select ETF |
0.47%
|
FTFA pays ClearBridge and OSAM each
a fee monthly as compensation for their subadvisory services to Enhanced Income ETF.
With respect to Large Cap Growth Select ETF, FTFA pays to ClearBridge a fee monthly as compensation for subadvisory services
equal to 70% of the management fee paid to FTFA by Large Cap Growth Select ETF, net of (i) all fees and expenses incurred
by FTFA under the investment management agreement (including without limitation any subadvisory fee paid to another
subadviser to Large Cap Growth Select ETF) and (ii) expense waivers, if any, and reimbursements. In no event shall
the subadvisory fee be less than zero. FTFA also pays Western Asset 0.02% of the portion of each Fund’s respective average
daily net assets that are allocated to Western Asset by FTFA, net of expense waivers, if any, and reimbursements.
Franklin Distributors, LLC (“Franklin
Distributors”) serves as the distributor of Creation Units for the Funds on an agency basis.
Franklin Distributors is an indirect, wholly-owned broker-dealer subsidiary of Franklin Resources.
The Board has adopted a Rule 12b-1
shareholder services and distribution plan and under that plan, each Fund is authorized to
pay service and/or distribution fees calculated at an annual rate of up to 0.25% of its average daily net assets. No service
and/or distribution fees are currently paid by the Funds, and there are no current plans to impose these fees.
All officers and one Trustee of
the Trust are employees of Franklin Resources or its affiliates and do not receive compensation from
the Trust.
3. Investments
During the year ended March
31, 2026, the aggregate cost of purchases and proceeds from sales of investments (excluding in-kind
transactions and short-term investments) were as follows:
|
|
Purchases
|
Sales
|
|
Enhanced
Income ETF |
$44,624,806
|
$48,678,959
|
|
Large
Cap Growth Select ETF |
283,032,067
|
156,596,680
|
During the year ended March 31,
2026, in-kind transactions (Note 5)
were as follows:
|
|
Contributions
|
Redemptions
|
Realized
Gain (Loss)* |
|
Enhanced
Income ETF |
$43,033,067
|
$7,780,479
|
$2,130,526
|
|
Large
Cap Growth Select ETF |
31,779,546
|
164,371,157
|
45,995,645
|
|
*
|
Net
realized gains on redemptions in-kind are not taxable to the remaining shareholders of the Fund. |
The in-kind contributions and in-kind
redemptions shown in this table may not agree with the Funds’ Share Transactions on the
Statements of Changes in Net Assets. This table represents the accumulation of each Fund’s daily net shareholder transactions
while the Statements of Changes in Net Assets reflects gross shareholder transactions including any cash component
of the transactions.
At March 31, 2026, the aggregate
cost of investments and the aggregate gross unrealized appreciation and depreciation of investments
for federal income tax purposes were as follows:
|
|
Enhanced
Income ETF | |||
|
|
Cost/Premiums
Paid
(Received) |
Gross
Unrealized
Appreciation
|
Gross
Unrealized
Depreciation
|
Net
Unrealized
Appreciation
|
|
Securities
|
$131,833,216
|
$15,954,233
|
$(4,599,570
) |
$11,354,663
|
|
Written
options |
(513,003
) |
330,627
|
(7,536
) |
323,091
|
|
|
Large
Cap Growth Select ETF | |||
|
|
Cost
|
Gross
Unrealized
Appreciation
|
Gross
Unrealized
Depreciation
|
Net
Unrealized
Appreciation
|
|
Securities
|
$327,510,030
|
$94,306,012
|
$(21,547,707
) |
$72,758,305
|
17
ClearBridge
ETFs 2026 Annual Report
Notes
to Financial Statements (cont’d)
4. Derivative
instruments and hedging activities
Enhanced Income ETF
Below is a table, grouped by derivative
type, that provides information about the fair value and the location of derivatives within
the Statements of Assets and Liabilities at March 31, 2026.
|
LIABILITY
DERIVATIVES1
| |
|
|
Equity
Risk
|
|
Written
options |
$189,912
|
|
1
|
Generally,
the balance sheet location for asset derivatives is receivables/net unrealized appreciation and for liability derivatives is payables/net
unrealized
depreciation. |
The following tables provide information
about the effect of derivatives and hedging activities on the Fund’s Statement of Operations
for the year ended March 31, 2026. The first table provides additional detail about the amounts and sources of gains
(losses) realized on derivatives during the period. The second table provides additional information about the change in
net unrealized appreciation (depreciation) resulting from the Fund’s derivatives and hedging activities during the period.
|
AMOUNT
OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED | |
|
|
Equity
Risk
|
|
Written
options |
$(158,671
) |
|
CHANGE
IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED | |
|
|
Equity
Risk
|
|
Written
options |
$114,802
|
During the year ended March 31,
2026, the volume of derivative activity for the Fund was as follows:
|
|
Average
Market
Value*
|
|
Written
options |
$251,038
|
|
*
|
Based
on the average of the market values at each month-end during the period. |
Large Cap Growth Select ETF
During the year ended March 31,
2026, the Fund did not invest in derivative instruments.
5. Fund
share transactions
At March 31, 2026, the Trust had
an unlimited number of shares of beneficial interest authorized with a par value of $0.00001 per
share. Each Fund’s shares are issued and redeemed by the Funds only in Creation Units or Creation Unit aggregations, where
50,000 shares of each Fund constitute a Creation Unit. Such transactions are generally on an in-kind basis, with a separate
cash payment, which is a balancing cash component to equate the transaction to the net asset value per share of
each Fund on the transaction date. Transactions in capital shares of the Funds are disclosed in detail in the Statements of Changes
in Net Assets. Authorized Participants are subject to standard creation and redemption transaction fees to offset transfer
and other transaction costs associated with the issuance and redemption of Creation Units. Such transactions fees are treated
as increases in capital and are disclosed in the Funds’ Statements of Changes in Net Assets. Creations and redemptions
for cash (when cash creations and redemptions are available or specified) may be subject to an additional variable fee.
6. Transfer
of net assets
On June 14, 2024, Large Cap Growth
Select ETF acquired the assets and liabilities of ClearBridge All Cap Growth ESG ETF (the
“Acquired Fund”), pursuant to a plan of reorganization approved by the Board of both the Acquired Fund and Large Cap Growth
Select ETF. Total shares issued by Large Cap Growth Select ETF and the total net assets of the Acquired Fund and Large
Cap Growth Select ETF on the date of the transfer were as follows:
|
Acquired
Fund |
Shares
Issued
by
the Fund |
Total
Net Assets of the
Acquired
Fund |
Total
Net Assets
of
the Fund |
|
ClearBridge
All Cap Growth ESG ETF |
1,813,881
|
$125,493,889
|
$242,148,585
|
18
ClearBridge
ETFs 2026 Annual Report
As part of the
reorganization, for each common share they held, shareholders of the Acquired Fund received 0.771864 common
shares of Large Cap Growth Select ETF. Large Cap Growth Select ETF did not issue any fractional shares to shareholders
of the Acquired Fund. In lieu thereof, Large Cap Growth Select ETF purchased all fractional shares at the current net
asset value of the shares and remitted the cash proceeds to former shareholders of the Acquired Fund in proportion to their
fractional shares.
The total net assets of the Acquired
Fund before the acquisition included unrealized appreciation of $33,607,978, accumulated net
realized gain of $5,611,751 and overdistributed net investment income of $(62,976). Total net assets of Large Cap Growth
Select ETF immediately after the transfer were $367,642,474. The transaction was structured to qualify as a tax-free reorganization
under the Internal Revenue Code of 1986, as amended.
Proforma results of operations of
the combined entity for the entire year ended March 31, 2025, as though the acquisition had
occurred as of the beginning of the period (rather than on the actual acquisition date), are as follows:
|
|
Unaudited
|
|
Net
investment income |
$1,048,904
|
|
Net
realized gain |
3,605,036
|
|
Change
in net unrealized appreciation |
7,856,807
|
|
Increase
in net assets from operations |
$12,510,747
|
Because the combined investment
portfolios have been managed as a single portfolio since the acquisition was completed, it
is not practicable to separate the amounts of revenue and earnings of the Acquired Fund that have been included in Large
Cap Growth Select ETF’s accompanying Statement of Operations since the close of business on June 14, 2024.
7. Income
tax information and distributions to shareholders
The tax character of distributions
paid during the fiscal year ended March 31, 2026 was as follows:
|
|
Enhanced
Income ETF |
Large
Cap Growth Select ETF |
|
Distributions
paid from: |
|
|
|
Ordinary
income |
$6,671,582
|
$550,009
|
|
Net
long-term capital gains |
659,306
|
—
|
|
Total
distributions paid |
$7,330,888
|
$550,009
|
The tax character of distributions
paid during the fiscal period ended March 31, 2025 was as follows:
|
|
Enhanced
Income ETF |
Large
Cap Growth Select ETF |
|
Distributions
paid from: |
|
|
|
Ordinary
income |
$762,989
|
$700,001
|
As of March 31, 2026, the components
of distributable earnings (loss) on a tax basis were as follows:
|
|
Enhanced
Income ETF |
Large
Cap Growth Select ETF |
|
Deferred
capital losses*
|
—
|
$(22,719,089
) |
|
Other
book/tax temporary differences |
$(323,089
)(a)
|
(55,793
)(b)
|
|
Unrealized
appreciation (depreciation)(c)
|
11,677,676
|
72,758,305
|
|
Total
distributable earnings (loss) — net |
$11,354,587
|
$49,983,423
|
|
*
|
These
capital losses have been deferred in the current year as either short-term or long-term losses. The losses will be deemed to occur on
the first day
of
the next taxable year in the same character as they were originally deferred and will be available to offset future taxable capital gains.
|
|
(a)
|
Other
book/tax temporary differences are attributable to the realization for tax purposes of unrealized gains (losses) on options contracts.
|
|
(b)
|
Other
book/tax temporary differences are attributable to the deferral of certain late year losses for tax purposes. |
|
(c)
|
The
difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable to the tax deferral of losses on wash
sales. |
8. Operating segments
Each Fund operates as a single operating
segment, which is an investment portfolio. A management group assigned to the Funds
within the Funds’ investment manager serves as the Chief Operating Decision Maker (“CODM”) and is responsible for
evaluating the Funds’ operating results and allocating resources in accordance with the Funds’ investment strategy. Internal
reporting provided to the CODM aligns with the accounting
policies and measurement principles used in the financial statements.
For information regarding segment
assets, segment profit or loss, and significant expenses, refer to the Statements of Assets
and Liabilities and the Statements of Operations, along with the related Notes to Financial Statements. The Funds’
19
ClearBridge
ETFs 2026 Annual Report
Notes
to Financial Statements (cont’d)
Schedules of
Investments provides details of the Funds’ investments that generate returns such as interest, dividends, and realized
and unrealized gains or losses. Performance metrics, including portfolio turnover and expense ratios, are disclosed
in the Financial Highlights.
20
ClearBridge
ETFs 2026 Annual Report
Report
of Independent Registered Public Accounting
Firm
To the Board of Trustees of
Legg Mason ETF Investment Trust and Shareholders of Franklin ClearBridge Enhanced Income
ETF and ClearBridge Large Cap Growth Select ETF
Opinions on the Financial Statements
We have audited the accompanying
statements of assets and liabilities, including the schedules of investments, of Franklin ClearBridge
Enhanced Income ETF and ClearBridge Large Cap Growth Select ETF (two of the funds constituting Legg Mason
ETF Investment Trust, hereafter collectively referred to as the “Funds”)
as of March 31, 2026, the related statements of operations
for the year ended March 31, 2026, the statements of changes in net assets for each of the two years in the
period ended March 31, 2026, including the related notes, and the financial highlights for each of the four years in the period
ended March 31, 2026, the period December 1, 2021 through March 31, 2022 and the year ended November 30, 2021 (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of each of the Funds as of March 31, 2026, the results of each of their operations for the year then
ended, the changes in each of their net assets for each of the two years in the period ended March 31, 2026 and each
of the financial highlights for each of the four years in the period ended March 31, 2026, the period December 1, 2021 through
March 31, 2022 and the year ended November 30, 2021 in conformity with accounting principles generally accepted
in the United States of America.
Basis for Opinions
These financial statements are the
responsibility of the Funds’ management. Our responsibility is to express an opinion on the
Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation
of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2026 by correspondence
with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures.
We believe that our audits provide a reasonable basis for our opinions.
/s/ PricewaterhouseCoopers LLP
San
Francisco, California
May 28, 2026
May 28, 2026
We have served as the auditor of
one or more investment companies in the Franklin Templeton Group of Funds since 1948.
21
ClearBridge
ETFs 2026 Annual Report
Important
Tax Information (unaudited)
By mid-February,
tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar
year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related
to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors
for further information on the treatment of these amounts on their tax returns.
The following tax information for
the Funds is required to be furnished to shareholders with respect to income earned and distributions
paid during its fiscal year.
The Funds hereby reports the following
amounts, or if subsequently determined to be different, the maximum allowable amounts,
for the fiscal year ended March 31, 2026:
|
|
Pursuant
to: |
Enhanced
Income ETF |
Large
Cap Growth Select ETF |
|
Long-Term
Capital Gain Dividends Distributed |
§852(b)(3)(C)
|
$659,306
|
—
|
|
Income
Eligible for Dividends Received Deduction (DRD) |
§854(b)(1)(A)
|
$1,691,727
|
$1,153,510
|
|
Qualified
Dividend Income Earned (QDI) |
§854(b)(1)(B)
|
$2,270,728
|
$1,418,326
|
|
Qualified
Net Interest Income (QII) |
§871(k)(1)(C)
|
$5
|
$31
|
|
Qualified
Business Income Dividends Earned |
§199A
|
$165,156
|
$36,043
|
|
Section
163(j) Interest Earned |
§163(j)
|
$5
|
$47
|
22
ClearBridge
ETFs
|
Changes
in and Disagreements with Accountants |
For
the period covered by this report |
|
Not
applicable. |
|
|
Results
of Meeting(s) of Shareholders |
For
the period covered by this report |
|
Not
applicable. |
|
|
Remuneration
Paid to Directors, Officers and Others |
For
the period covered by this report |
|
Not
applicable. Remuneration paid to directors, officers, and others is included as part of the all-inclusive management fee and not paid
directly by the
Fund.
| |
23
ClearBridge
ETFs
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page intentionally left blank.)
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page intentionally left blank.)
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page intentionally left blank.)
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page intentionally left blank.)
(This
page intentionally left blank.)
ClearBridge
ETFs
Trustees
Alison J. Baumann
Rohit
Bhagat
Chair
Chair
Deborah D. McWhinney
Patrick O’Connor
Anantha K. Pradeep
Investment manager
Franklin Templeton Fund Adviser,
LLC
Subadvisers
ClearBridge Investments, LLC
O’Shaughnessy Asset Management,
LLC†
Custodian
The Bank of New York Mellon
Transfer agent
The
Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
240 Greenwich Street
New York, NY 10286
Independent registered public accounting
firm
PricewaterhouseCoopers
LLP
San Francisco, CA
San Francisco, CA
†
Effective
December 31, 2025, investment management services provided by Franklin Managed Options Strategies, LLC were transferred to O’Shaughnessy
Asset Management, LLC.
ClearBridge
ETFs
Franklin ClearBridge Enhanced Income ETF
ClearBridge Large Cap Growth Select ETF
Franklin ClearBridge Enhanced Income ETF
ClearBridge Large Cap Growth Select ETF
The Funds are separate investment
series of Legg Mason ETF Investment Trust, a Maryland statutory trust.
ClearBridge
ETFs
Legg Mason Funds
One Madison Avenue, 17th Floor
New York, NY 10010
Legg Mason Funds
One Madison Avenue, 17th Floor
New York, NY 10010
The Funds file
their complete schedule of portfolio holdings with the
Securities and Exchange Commission (“SEC”) for
the first and third quarters of each fiscal year as an exhibit to
their reports on Form N-PORT. The Funds’ Forms N-PORT are
available on the SEC’s website at www.sec.gov. To obtain information
on Form N-PORT, shareholders can call the Funds at (800)
DIAL BEN/342-5236.
Information
on how the Funds voted proxies relating to portfolio securities
during the prior 12-month period ended June 30th of each
year and a description of the policies and procedures
that the Funds use to determine how to vote proxies related
to portfolio transactions are available (1) without charge,
upon request, by calling the Funds at (800) DIAL BEN/342-5236,
(2) at www.franklintempleton.com and (3) on the SEC’s
website at www.sec.gov.
This report is submitted for the
general information of the shareholders of Franklin ClearBridge Enhanced Income ETF and ClearBridge
Large Cap Growth Select ETF. This report is not authorized for distribution to prospective investors in the Funds unless
preceded or accompanied by a current prospectus.
Investors should consider each Fund’s investment
objectives, risks, charges and expenses carefully before investing.
Each prospectus contains this and other important information about the Funds.
Please read the prospectuses carefully before investing.
www.franklintempleton.com
© 2026 Franklin Distributors,
LLC, Member FINRA/SIPC. All rights reserved.
CBETF-AFSOI 5/26
©
2026 Franklin Templeton. All rights reserved.
| ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 9. | PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 10. | REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 11. | STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR, as applicable.
| ITEM 12. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 13. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 14. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 15. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.
| ITEM 16. | CONTROLS AND PROCEDURES. |
| (a) | The Registrants acknowledge the Staff’s comment. In future filings on Form N-CSR, the certifications required by Rule 30a-2 and Item 19(a)(3) will include the designations “principal executive officer” and “principal financial officer” in the signature blocks, reflecting the capacity in which each signatory executes the certification, in conformity with the language of the Rule and Form N-CSR. The Registrants may also include each signatory’s actual title with respect to the Funds alongside the required designation. |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected or are likely to materially affect the Registrant’s internal control over financial reporting. |
| ITEM 17. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 18. | RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION. |
| (a) | Not applicable. |
| (b) | Not applicable. |
| ITEM 19. | EXHIBITS. |
(a) (1) Code of Ethics attached hereto.
Exhibit 99.CODE ETH
(a) (3) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.CERT
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.
| Legg Mason ETF Investment Trust | ||
| By: | /s/ Christopher Kings | |
| Christopher Kings | ||
| Chief Executive Officer – Finance and Administration | ||
| Date: | June 03, 2026 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Christopher Kings | |
| Christopher Kings | ||
|
Chief Executive Officer – Finance and Administration |
||
| Date: | June 03, 2026 |
| By: | /s/ Jeffrey White | |
| Jeffrey White | ||
|
Chief Financial Officer, Chief Accounting Officer and Treasurer |
||
| Date: | June 03, 2026 |
ATTACHMENTS / EXHIBITS
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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