Franklin FTSE China ETF

Franklin FTSE China ETF (FLCH) is an index fund that tracks the FTSE China RIC Capped Index. The index holds more than 1,000 large and mid-sized Chinese companies listed in Hong Kong, mainland China and the US. What sets it apart is cost. Its yearly expense ratio is 0.19%, compared with 0.59% for iShares MSCI China ETF and a 0.61% average for similar China funds. The trade-offs are a smaller fund and the sharp swings of a single emerging market.

• Over the year to Oct 27, 2026, FLCH returned -22.9%, 3rd of 8 among similar funds.
• Its 5-year annualized return was -4.3%.
• In the 2020 COVID crash it fell 20% and regained its old high 2.8 months after the low.
• Its worst full calendar year was 2022 (-22.8%); its best was 2025 (+32.5%).
• The deepest fall in its price history was 62.1% (Feb 17, 2021 to Oct 31, 2022), not yet recovered.

As of Jun 30, 2026, the fund held 1,046 securities; the ten largest made up 36.4% of assets.

• Over the three months to Jun 30, 2026, investors withdrew a net $4.3M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +3.83%, -3.34%, -6.75%.

FLCH is passively managed. It doesn't pick stocks. Instead, it tries to match the FTSE China RIC Capped Index, before fees. FTSE Russell builds that index from the broader FTSE China Index. It weights companies by free-float market value, meaning the value of shares actually available to trade. Each quarter a cap applies: no single company can exceed 25% of the index, and companies above 5% can't add up to more than 50% combined. As of June 30, 2026, Tencent (12.4%) and Alibaba (7.9%) were the largest holdings, and the top 10 made up 36.4% of the fund.

The index mixes several kinds of Chinese shares. H-Shares trade in Hong Kong. A-Shares trade in renminbi in Shanghai and Shenzhen, and the fund buys them through Stock Connect, a trading link with Hong Kong. The index also includes China-based companies incorporated offshore and listed in Hong Kong, New York or Singapore, such as PDD Holdings. That is why about 44% of assets were listed under the Cayman Islands as of June 30, 2026.

The fund keeps 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 can use stock index futures and total return swaps to put spare cash to work, and currency contracts to help settle trades. Portfolio turnover was 7%, which means little trading.

• FLCH charges 0.19% a year, versus an average of 0.61% for the similar funds below (1st of 8, 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).

FLCH is a single-country emerging-market stock fund that once fell 62.1% from peak to trough, so it fits a small, higher-risk slice of a portfolio better than its foundation.

FLCH adds Chinese companies that US-focused funds mostly leave out, and it does so cheaply: 0.19% a year. In the SEC's standard example, $10,000 growing 5% a year costs $19 in the first year and $241 over 10 years. The fund launched in 2017, so it has no 2008 record. In the 2020 crash it fell 20% and recovered in under three months. In 2022 it lost 36.8% and took 34 months to recover. Its worst calendar year was 2022, at -22.25%. From February 2021 to October 2022 it fell 62.1%, and it had not regained that peak as of October 27, 2026. Anyone forced to sell in a slump like that would lock in deep losses. The trailing yield was 2.61% as of October 27, 2026, paid twice a year. 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.