Franklin FTSE Asia ex Japan ETF

Franklin FTSE Asia ex Japan ETF (FLAX) is an index fund that tracks the FTSE Asia ex Japan Capped Index, which holds large and mid-size stocks across Asia outside Japan, Australia and New Zealand. Its 0.19% expense ratio is far below the 0.72% charged by iShares MSCI All Country Asia ex-Japan ETF (AAXJ), its closest match. The trade-offs: a heavy tilt to chip makers and net assets of about $51 million as of June 30, 2026.

• Over the year to Oct 27, 2026, FLAX returned +15.2%, 4th of 6 among similar funds.
• Its 5-year annualized return was +7.3%.
• In the 2020 COVID crash it fell 26.3% and regained its old high 3.4 months after the low.
• Its worst full calendar year was 2022 (-18.9%); its best was 2025 (+33.7%).
• The deepest fall in its price history was 42.5% (Feb 17, 2021 to Oct 24, 2022), recovered by Sep 11, 2025.

As of Jun 30, 2026, the fund held 1,615 securities; the ten largest made up 40.7% of assets.

• Over the three months to Jun 30, 2026, investors added a net $0.00 (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +15.40%, +10.60%, -1.52%.

FLAX follows the FTSE Asia ex Japan Capped Index, built by FTSE Russell. The index starts from the FTSE Asia Pacific ex Japan, Australia and New Zealand Index. It covers large and mid-size companies in both developed and emerging Asian markets. FTSE Russell decides which companies qualify using tests such as where a company is incorporated, listed and headquartered. As of May 31, 2026, the index held 1,599 securities, ranging from $383 million to $1.95 trillion in market value.

Stocks are weighted by free float-adjusted market capitalization. That means bigger companies count for more, based only on the shares available to public investors. Each quarter, a cap limits any one company to 25% of the index. It also keeps all companies above 5% from adding up to more than 50%. The cap still allows a lot of concentration. As of June 30, 2026, Taiwan Semiconductor Manufacturing made up 15.1% of the fund, Samsung Electronics 8.2% and SK Hynix 7.8%. As of May 31, 2026, the index was concentrated in semiconductor stocks.

The fund must keep at least 80% of its assets in index stocks or depositary receipts, which are certificates that represent foreign shares. It may hold every stock in the index or a representative sample. It may also use futures, total return swaps and currency contracts to invest spare cash or to track the index more closely. As of June 30, 2026, it reported no derivatives and 0.43% in cash. Portfolio turnover was 7%.

• FLAX charges 0.19% a year, versus an average of 0.45% for the similar funds below (2nd of 6, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $19 in the first year and $241 over 10 years (assuming a 5% annual return).

FLAX is a single-region stock fund with heavy chip-maker concentration, a beta of 1.46 and a 42.5% peak-to-trough loss, so it fits best as a smaller holding next to broader funds.

FLAX could add Asian stocks that a US-focused portfolio may lack, and it costs 0.19% a year. On $10,000, the SEC's standard example works out to about $19 in the first year and $241 over 10 years. The fund pays dividends twice a year. Its trailing yield was 2.16% as of October 27, 2026. FLAX launched in 2018, so it has no record from 2008. In the 2020 COVID crash, it fell 26.3% and recovered in about 3.4 months. The 2022 bear market hit harder: a 31.4% drop that took 23.7 months to recover. Its deepest decline, 42.5% from February 2021 to October 2022, took 34.6 months to recover. Its worst calendar year was 2022, with a 19.0% loss. Anyone forced to sell during a stretch like that would lock in losses. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.