Franklin FTSE Switzerland ETF (FLSW US) – Portfolio Construction Methodology

The underlying FTSE Switzerland RIC Capped Index provides Swiss large- and mid-cap exposure, derived from the FTSE Switzerland Index within the FTSE Global Equity Index Series. It includes Swiss companies that pass FTSE’s investability and liquidity screens and fall in the large- and mid-cap segments, which together typically cover about the first mid-80s percent of Switzerland’s free-float investable market cap. Eligible securities are weighted by free-float-adjusted market cap, using the most liquid line where multiple share classes or listings exist. To maintain U.S. RIC compliance and limit issuer concentration, a quarterly capping process constrains any single stock to 25% and ensures the aggregate weight of all constituents above 5% does not exceed 50%. The underlying large-/mid-cap universe is refreshed at semi-annual reviews, with capping and free-float updates applied more frequently to control drift.

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