Risk Table - Franklin Dividend Growth ETF
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Risk [Text Block] |
| Principal Risks |
Principal
Risks You
could lose money by investing in the Fund. ETF shares are not deposits or obligations of, or guaranteed
or endorsed by, any bank, and are not insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency of the U.S. government. The Fund is subject to the principal risks
noted below, any of which may adversely affect the Fund’s net asset value (NAV), trading price, yield,
total return and ability to meet its investment goal. Unlike many ETFs, the Fund is not an index-based
ETF.
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| Risk Lose Money [Member] |
You
could lose money by investing in the Fund.
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| Market |
Market:
The
market values of securities or other investments owned by the Fund will go up or down, sometimes rapidly
or unpredictably. The market value of a
security
or other investment may be reduced by market activity or other results of supply and demand unrelated
to the issuer. This is a basic risk associated with all investments. When there are more sellers than
buyers, prices tend to fall. Likewise, when there are more buyers than sellers, prices tend to rise.
In addition, the value of the Fund’s investments may go up or down due to general market or other conditions
that are not specifically related to a particular issuer, such as: real or perceived adverse economic
changes, including widespread liquidity issues and defaults in one or more industries; changes in interest,
inflation or exchange rates; unexpected natural and man-made world events, such as diseases or disasters;
financial, political or social disruptions, including terrorism and war; and U.S. trade disputes or other
disputes with specific countries that could result in additional tariffs, trade barriers and/or investment
restrictions in certain securities in those countries. Any of these conditions can adversely affect the
economic prospects of many companies, sectors, nations, regions and the market in general, in ways that
cannot necessarily be foreseen. Stock prices tend to go up and down more dramatically than
those of debt securities. A slower-growth or recessionary economic environment could have an adverse
effect on the prices of the various stocks held by the Fund.
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| Dividend-Oriented Companies |
Dividend-Oriented Companies:
Companies
that have historically paid regular dividends to shareholders may decrease or eliminate dividend payments
in the future. A decrease in dividend payments by an issuer may result in a decrease in the value of
the issuer's stock and less available income for the Fund.
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| Large Capitalization Companies |
Large Capitalization Companies:
Large
capitalization companies may fall out of favor with investors based on market and economic conditions.
Large capitalization companies may underperform relative to small and mid capitalization companies because
they may be unable to respond quickly to new competitive challenges, such as changes in technology and
consumer tastes, and may not be able to attain the high growth rate of successful smaller companies,
especially during extended periods of economic expansion.
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| Small and Mid Capitalization Companies |
Small and Mid Capitalization
Companies: Securities issued by small and mid capitalization companies may be more volatile
in price than those of larger companies and may involve substantial risks. Such risks may include greater
sensitivity to economic conditions, less certain growth prospects, lack of depth of management and funds
for growth and development, and limited or less developed product lines and markets. In addition, small
and mid capitalization companies may be particularly affected by interest rate increases, as they may
find it more difficult to borrow money to continue or expand operations, or may have difficulty in repaying
any loans. The markets for securities issued by small and mid capitalization companies also tend to be
less liquid than the markets for securities issued by larger companies.
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| Focus |
Focus:
To the extent that the Fund focuses on particular countries, regions, industries, sectors or types of
investments from time to time, the Fund may be subject to greater risks of adverse developments in such
areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors
or investments.
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| Technology companies |
Technology companies:
Companies
in the technology sector have historically been volatile due to the rapid pace of product change and
development within the sector. For example, their products and services may not prove commercially successful
or may become obsolete quickly. In addition, delays in or cancellation of the release of anticipated
products or services may also affect the price of a technology company’s stock. Technology companies
are subject to significant competitive pressures, such as new market entrants, aggressive pricing and
tight profit margins. The activities of these companies may also be adversely affected by changes in
government regulations, worldwide technological developments or investor perception of a company and/or
its products or services. The stock prices of companies operating within this sector may be subject to
abrupt or erratic movements.
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| Industrials companies |
Industrials companies: The stock prices of
companies in the industrials sector are affected by supply and demand both for their specific product
or service and for industrials sector products in general. Companies in the industrials sector may be
adversely affected by changes in government regulation, world events and economic conditions. In addition,
these companies are at risk for environmental damage and product liability claims. Companies in this
sector could be adversely affected by commodity price volatility, changes in exchange rates, imposition
of export or import controls, increased competition, depletion of resources, technological developments
and labor relations.
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| Healthcare companies |
Healthcare companies: The activities of
healthcare companies may be funded or subsidized by federal and state governments. If government funding
and subsidies are reduced or discontinued, the profitability of these companies could be adversely affected.
Healthcare companies may also be affected by government policies on healthcare reimbursements, regulatory
approval for new drugs and medical products, and similar matters. They are also subject to legislative
risk, i.e., the risks associated with the reform of the healthcare system through legislation.
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| Foreign Securities (non-U.S.) |
Foreign
Securities (non-U.S.): Investing in foreign securities typically involves different risks than investing
in U.S. securities, and includes risks associated with: (i) internal and external political and economic
developments – e.g., the political, economic and social policies and structures of some foreign countries
may be less stable and more volatile than those in the U.S. or some foreign countries may be subject
to trading restrictions or economic sanctions; diplomatic and political developments could affect the
economies, industries, and securities and currency markets of the countries in which the Fund is invested,
which can include rapid and
adverse
political changes; social instability; regional conflicts; sanctions imposed by the United States, other
nations or other governmental entities, including supranational entities; terrorism; and war; (ii) trading
practices – e.g., government supervision and regulation of foreign securities and currency markets,
trading systems and brokers may be less than in the U.S.; (iii) availability of information – e.g.,
foreign issuers may not be subject to the same disclosure, accounting and financial reporting standards
and practices as U.S. issuers; (iv) limited markets – e.g., the securities of certain foreign issuers
may be less liquid (harder to sell) and more volatile; and (v) currency exchange rate fluctuations and
policies – e.g., fluctuations may negatively affect investments denominated in foreign currencies and
any income received or expenses paid by the Fund in that foreign currency.
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| Depositary Receipts |
Depositary
Receipts: Depositary receipts are subject to many of the risks of the underlying security.
For some depositary receipts, the custodian or similar financial institution that holds the issuer's
shares in a trust account is located in the issuer's home country. The Fund could be exposed to the credit
risk of the custodian or financial institution, and in cases where the issuer’s home country does not
have developed financial markets, greater market risk. In addition, the depository institution may not
have physical custody of the underlying securities at all times and may charge fees for various services,
including forwarding dividends and interest and corporate actions. The Fund would be expected to pay
a share of the additional fees, which it would not pay if investing directly in the foreign securities.
The Fund may experience delays in receiving its dividend and interest payments or exercising rights as
a shareholder. There may be an increased possibility of untimely responses to certain corporate actions
of the issuer in an unsponsored depositary receipt program. Accordingly, there may be less information
available regarding issuers of securities underlying unsponsored programs and there may not be a correlation
between this information and the market value of the depositary receipts.
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| Management |
Management:
The Fund is subject to management risk because it is an actively managed ETF. The Fund's investment
manager applies investment techniques and risk analyses in making investment decisions for the Fund,
but there can be no guarantee that these decisions will produce the desired results.
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| Cybersecurity |
Cybersecurity:
Cybersecurity incidents, both intentional and unintentional, may allow an unauthorized party to gain
access to Fund assets, Fund or customer data (including private shareholder information), or proprietary
information, cause the Fund, the investment manager, authorized participants, or index providers (as
applicable) and listing exchanges, and/or their service providers (including, but not limited to, Fund
accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data
breaches, data corruption or loss of operational functionality or prevent Fund investors from purchasing,
redeeming shares or receiving distributions. The investment manager has limited ability to prevent
or mitigate cybersecurity incidents affecting third party service providers, and such third party service
providers may have limited indemnification obligations to the Fund or the investment manager. Cybersecurity
incidents may result in financial losses to the Fund and its shareholders, and substantial costs may
be incurred in an effort to prevent or mitigate future cybersecurity incidents. Issuers of securities
in which the Fund invests are also subject to cybersecurity risks, and the value of these securities
could decline if the issuers experience cybersecurity incidents. Because technology is frequently changing,
new ways to carry out cyber attacks are always developing. Therefore, there is a chance that some risks
have not been identified or prepared for, or that an attack may not be detected, which puts limitations
on the Fund's ability to plan for or respond to a cyber attack. Like other funds and business enterprises,
the Fund, the investment manager, and their service providers are subject to the risk of cyber incidents
occurring from time to time.
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| Market Trading |
Market Trading: The Fund faces numerous market trading
risks, including the potential lack of an active market for Fund shares, losses from trading in secondary
markets, periods of high volatility and disruption in the creation/redemption process of the Fund. Any
of these factors, among others, may lead to the Fund’s shares trading at a premium or discount to NAV.
Thus, you may pay more (or less) than NAV when you buy shares of the Fund in the secondary market, and
you may receive less (or more) than NAV when you sell those shares in the secondary market. The investment
manager cannot predict whether shares will trade above (premium), below (discount) or at NAV. To
the extent that the underlying securities held by the Fund trade on an exchange that is closed when the
securities exchange on which the Fund shares list and trade is open, there may be market uncertainty
about the stale security pricing (i.e., the last quote from its closed foreign market) resulting in premiums
or discounts to NAV that may be greater than those experienced by other ETFs.
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| Authorized Participant Concentration |
Authorized
Participant Concentration: Only an Authorized Participant may engage in creation or
redemption transactions directly with the Fund. "Authorized Participants" are broker-dealers that are
permitted to create and redeem shares directly with the Fund and who have entered into agreements with
the Fund’s distributor. The Fund has a limited number of institutions that act as Authorized Participants.
To the extent that these institutions exit the business or are unable to proceed with creation and/or
redemption orders with respect to the Fund and no other Authorized Participant is able to step forward
to create or redeem Creation Units (as defined below), Fund shares may trade at a discount to NAV and
possibly face trading halts and/or delisting. This risk may be more pronounced in volatile markets, potentially
where there are significant redemptions in ETFs generally.
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| New Fund |
New
Fund:
The Fund is newly or recently established and has no performance history as of the date of this Prospectus.
There can be no assurance that the Fund will grow to or maintain an economically viable size, which could
result in the Fund being liquidated at any time without shareholder approval and at a time that may not
be favorable for all shareholders. If the Fund does not attract additional assets, the Fund’s expenses
will continue to be spread over a small asset base.
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| Large Shareholder |
Large Shareholder:
Certain large shareholders, including other funds or accounts advised by the investment manager or an
affiliate of the investment manager, may from time to time own a substantial amount of the Fund’s shares.
In addition, a third-party investor, the investment manager or an affiliate of the investment manager,
an authorized participant, a lead market maker, or another entity may invest in the Fund and hold its
investment for a limited period of time solely to facilitate commencement of the Fund or to facilitate
the Fund’s achieving a specified size or scale. There can be no assurance that any large shareholder
would not redeem its investment, that the size of the Fund would be maintained at such levels or that
the Fund would continue to meet applicable listing requirements. Redemptions by large shareholders could
have a significant negative impact on the Fund. In addition, transactions by large shareholders may account
for a large percentage of the trading volume on the listing exchange and may, therefore, have a material
upward or downward effect on the market price of the shares.
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