Fund Description: Legg Mason Small-Cap Quality Value ETF is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the Legg Mason ETF Equity Trust, an open-end investment management company. INVESTMENT OBJECTIVE: The Legg Mason Small-Cap Quality Value ETF seeks to provide investment returns that closely correspond to the price and yield performance of the Royce Small-Cap Quality Value Index . INDEX DESCRIPTION: The Royce Small-Cap Quality Value Index utilizes a proprietary methodology created and sponsored by Royce & Associates, LP, the fund’s subadviser. The Index is composed of equity securities that meet certain criteria. Using Royce’s methodology, the Index will generally favor stocks with lower than average valuation, higher than average profitability, and higher than average debt coverage (i.e., available cash flow to pay current debt obligations) as compared with other stocks included in the investment universe while maintaining a comparable risk profile. The investment universe includes common stocks of U.S. headquartered companies listed on U.S. exchanges to include stocks with market capitalizations that are between the 1001st and 3000th largest companies based on descending market capitalization at time of rebalance. For quality factors, the Index focuses on a company’s profitability (as measured by return on invested capital), the historic stability of its profitability (as measured by variance of return on assets), and debt coverage (as measured by cash flow relative to debt). For value factors, the Index focuses on the free cash flow of a company compared to its enterprise value. After the securities are scored by quality and value factors, each security’s momentum score, which is based on the price performance over the most recent 30 days, is used to determine the timing of the addition or deletion of the security into the Index. By using fundamental factors to weight stocks rather than market capitalization, the Index seeks to have lower exposure to overvalued companies, while still maintaining broad diversification. The Index’s constituents are reconstituted quarterly. FUND STRATEGY: The Fund uses a passive or indexing investment approach to achieve its investment objective. Unlike many investment companies, the fund does not try to outperform its Index and does not seek temporary defensive positions when markets decline or appear overvalued. Indexing may eliminate the chance that the fund will substantially outperform the Index and also may reduce some of the risks of active management, such as poor security selection. Indexing seeks to achieve lower costs and better after-tax performance by keeping portfolio turnover low in comparison to actively managed investment companies. The fund may invest up to 20% of its net assets in cash and cash equivalents; other investment companies, including exchange-traded funds; exchange-traded notes; depository receipts; and in securities and other instruments not included in its Index. FUND MANAGEMENT: Legg Mason Partners Fund Advisor, LLC (LMPFA) serves as the investment manager and Royce & Associates, LP serves as the sub-adviser to the Fund.