Franklin Rising Dividends Fund Semiannual Report

Franklin Rising Dividends Fund

MARCH 31, 2011

SEMIANNUAL REPORTAND SHAREHOLDER LETTER

A series of Franklin Managed Trust

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Franklin Templeton InvestmentsGain From Our Perspective®

Franklin Templeton’s distinct multi-manager structure combines thespecialized expertise of three world-class investment management groups—Franklin, Templeton and Mutual Series.

Each of our portfolio management groups operates autonomously, relying on its own research and staying true to the unique investment disciplines that underlie its success.

Franklin. Founded in 1947, Franklin is a recognized leader in fixed income investingand also brings expertise in growth- and value-style U.S. equity investing.

Templeton. Founded in 1940, Templeton pioneered international investing and, in 1954, launched what has become the industry’s oldest global fund. Today, withoffices in over 25 countries, Templeton offers investors a truly global perspective.

Mutual Series. Founded in 1949, Mutual Series is dedicated to a unique style of value investing, searching aggressively for opportunity among what it believes are undervalued stocks, as well as arbitrage situations and distressed securities.

Because our management groups work independently and adhere to differentinvestment approaches, Franklin, Templeton and Mutual Series funds typicallyhave distinct portfolios. That’s why our funds can be used to build trulydiversified allocation plans covering every major asset class.

At Franklin Templeton Investments, we seek to consistently provide investors with exceptional risk-adjusted returns over the long term, as well as the reliable,accurate and personal service that has helped us become one of the most trustednames in financial services.

TRUE DIVERSIFICATION

RELIABILITY YOU CAN TRUST

SPECIALIZED EXPERTISE

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

Not part of the semiannual report

Not part of the semiannual report | 1

Semiannual Report

Franklin Rising Dividends Fund . . . . . . . . . . 3

Performance Summary . . . . . . . . . . . . . . . . 7

Your Fund’s Expenses . . . . . . . . . . . . . . . . . . 10

Financial Highlights and Statement of Investments . . . . . . . . . . . . . . 12

Financial Statements . . . . . . . . . . . . . . . . . 20

Notes to Financial Statements . . . . . . . . . . 24

Shareholder Information . . . . . . . . . . . . . . . 32

Shareholder Letter . . . . . . . . . . . . . . . . . . . 1

Contents

Shareholder Letter

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEENOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEENOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Dear Shareholder:

During the six months ended March 31, 2011, we welcomed steady, increas-ingly convincing signs of economic improvement both in the U.S. and abroad.Companies generally reported strong profit growth, and momentum pickedup for productivity, manufacturing, foreign trade and consumer spending. Ascredit conditions improved, banks increased lending to businesses. The U.S.economic recovery, however, continued to be uncertain in light of high unem-ployment, continued housing market losses, and rising budget deficits at thefederal, state and local levels. To promote the pace of recovery, the FederalReserve Board kept interest rates at a historically low level during the six-month period and implemented another monetary stimulus plan. Encouragedby the favorable developments, many investors reentered the stock markets,which posted solid gains for the period under review. However, towardperiod-end, rising global inflation in some regions, the spread of geopoliticalinstability in North Africa and the Middle East, and Japan’s devastatingearthquake and tsunami pressured equity markets worldwide.

In the enclosed semiannual report for Franklin Rising Dividends Fund, DonTaylor, the lead portfolio manager, discusses market conditions, investmentdecisions and Fund performance during the period under review. The reportcontains additional performance data and financial information. Our website,franklintempleton.com, offers more timely discussions, daily prices, portfolioholdings and other information. We encourage you to discuss your goals withyour financial advisor, who can review your overall portfolio, reassess yourgoals and help you stay focused on the long term. As times like these illustrate,all securities markets fluctuate, as do mutual fund share prices.

We are grateful for the trust you have placed in Franklin Rising DividendsFund and remain focused on serving your investment needs.

Sincerely,

William J. LippmanPresident and Chief Executive Officer – Investment ManagementFranklin Managed Trust

This letter reflects our analysis and opinions as of March 31, 2011. The information is not a complete analysis ofevery aspect of any market, country, industry, security or fund. Statements of fact are from sources consideredreliable.

2 | Not part of the semiannual report

This semiannual report for Franklin Rising Dividends Fund covers the periodended March 31, 2011.

Performance Overview

For the six months under review, Franklin Rising Dividends Fund – Class Adelivered a cumulative total return of +11.77%. The Fund underperformedU.S. equities as measured by its benchmark, the Standard & Poor’s 500Index (S&P 500), which rose 17.31% for the same period.1 You can find theFund’s long-term performance data in the Performance Summary beginningon page 7.

Economic and Market Overview

During the six-month period ended March 31, 2011, the U.S. economic recoveryretained its momentum, supported by increased business activity, a strong risein job creation, and consumer spending that recovered to pre-recession levels.The U.S. has been a key engine in an ongoing global manufacturing rebound,which accelerated in 2011’s first quarter and helped spur U.S. economic output.

Unemployment and underemployment eased as job creation began to gainsome traction and the U.S. jobless rate declined to 8.8% in March.2 Consumerspending rose for the eighth consecutive month in March, but rising gasolineand food prices set off a sharp drop in consumer confidence. The banking

Semiannual Report

Franklin Rising Dividends FundYour Fund’s Goal and Main Investments: Franklin Rising Dividends Fund seeks long-

term capital appreciation. Preservation of capital, while not a goal, is also an important consideration.

The Fund invests at least 80% of its net assets in companies that have paid consistently rising dividends.

1. Source: © 2011 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstarand/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete ortimely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use ofthis information. STANDARD & POOR’S®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s FinancialServices LLC. Standard & Poor’s does not sponsor, endorse, sell or promote any S&P index-based product. The index isunmanaged and includes reinvested dividends. One cannot invest directly in an index, and an index is not representa-tive of the Fund’s portfolio.

2. Source: Bureau of Labor Statistics.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in theFund’s Statement of Investments (SOI). The SOI begins on page 17.

Performance data represent past

performance, which does not

guarantee future results.

Investment return and principal

value will fluctuate, and you may

have a gain or loss when you sell

your shares. Current performance

may differ from figures shown.

Please visit franklintempleton.com

or call (800) 342-5236 for most

recent month-end performance.

Semiannual Report | 3

4 | Semiannual Report

sector appeared to be closer to a full recovery although challenges dealing withmassive debt still faced the U.S. at period-end.

Inflation at the consumer, producer and trade levels rose across much of theworld, but in the U.S. it remained relatively contained. The Federal OpenMarket Committee (FOMC) kept monetary policy unchanged while continuingits second round of quantitative easing, scheduled to terminate in June.

Investor confidence shifted with each release of encouraging or discouragingeconomic, regulatory and geopolitical news, causing equity market volatility toincrease globally. U.S. investors weathered international events that includedrevolutions and ongoing civil unrest across the Middle East and North Africa,sovereign debt worries and credit downgrades in Europe, and the multiplecrises triggered by Japan’s earthquake and tsunami. Ultimately, stock indexesexperienced solid gains during the six months under review as domestic andglobal equity markets rose amid generally improving economic signs and risingconsumer spending.

Investment Strategy

We base our investment strategy on our belief that companies with consistentlyrising dividends should, over time, also realize stock price appreciation. Weselect portfolio securities based on several criteria. To be eligible for purchase,stocks generally will pass certain screens, requiring consistent and substantialdividend increases, strong balance sheets, and relatively low price/earningsratios. We seek fundamentally sound companies that meet our standards andattempt to acquire them at what we believe are attractive prices, often whenthey are out of favor with other investors.

Manager’s Discussion

During the six months under review, three holdings that helped Fund perform-ance were Roper Industries, International Business Machines (IBM) and FamilyDollar Stores. Shares of Roper Industries, a producer of industrial analyticalinstrumentation products, performed well after the Fed began expanding itsbalance sheet by buying Treasury securities, beginning in November 2010, to


spur economic growth. The company, which has 18 consecutive years of dividend increases, reported strong quarterly operating results during theperiod. Investors gained confidence in IBM’s ability to meet its long-termearnings-per-share target after the company reported strong growth in newservice contracts. The company has 15 years of dividend increases. Discountretailer Family Dollar Stores announced a significant new share repurchaseprogram early in the period. In addition, the company reported record quar-terly earnings and increased its dividend for the 35th consecutive year duringthe period.

Most of the Fund’s holdings helped the Fund’s absolute performance during theperiod; however, there were some positions that hindered results. Detractorsfrom performance included Abbott Laboratories, Hudson City Bancorp andOld Republic International. Shares of health care products manufacturerAbbott declined in value as investors became concerned that the company’smarket-leading rheumatology drug, Humira, would face significant competitionwithin several years. Hudson City disclosed declining net interest margin wouldcause it to restructure its balance sheet. In our view, prospective net interestmargin will be much higher after the company reduces its high-cost borrowingsand low-yielding securities. Old Republic shares have been pressured by contin-uing underwriting losses in its mortgage insurance business.

During the six months under review, we initiated six new positions: large inte-grated energy company Chevron (23 years of dividend increases), insurerChubb (46 years), consumer products manufacturer and marketer Colgate-Palmolive (48 years), memorialization and related products manufacturerMatthews International (16 years), restaurant operator McDonald’s (34 years)and global athletic footwear and apparel maker Nike (9 years). We made sig-nificant additions to holdings of global snacks and beverages manufacturerPepsiCo, therapeutic and diagnostic products manufacturer Medtronic, healthcare products manufacturer Abbott Laboratories, and personal care productsmaker The Procter & Gamble Co. We liquidated our positions in BeckmanCoulter, Nordson and Sally Beauty Holdings.

Our 10 largest positions on March 31, 2011, represented 44.2% of the Fund’stotal net assets. It is interesting to note how these 10 companies would, inaggregate, respond to the Fund’s screening criteria based on a simple average of

Portfolio BreakdownBased on Total Net Assets as of 3/31/11

Health Care Equipment & Services

Insurance

Household & Personal Products

Food, Beverage & Tobacco

Materials

Pharmaceuticals, Biotechnology & Life Sciences

Software & Services

Food & Staples Retailing

13.4%

10.0%

7.0%

9.8%

Electrical Equipment

8.7%

7.0%

Machinery

6.1%

5.1%

5.0%

Aerospace & Defense

4.6%

Consumer Durables & Apparel

Consumer Services

4.1%

Retailing

3.9%

3.4%

Other

5.2%Short-Term Investments & Other Net Assets

2.3%

4.4%


statistical measures. On average, these 10 companies have raised their dividends32 years in a row and by 278% over the past 10 years. Their most recent year-over-year dividend increases averaged 13.6% with a dividend yield of 2.3% onMarch 31, 2011, and a dividend payout ratio of 32.3%, based on estimates ofcalendar year 2011 operating earnings. Their average price/earnings ratio was15.0 times 2011 estimates versus 14.3 for that of the unmanaged S&P 500.

Thank you for your continued participation in Franklin Rising DividendsFund. We look forward to serving your future investment needs.

Donald G. Taylor, CPALead Portfolio Manager

William J. LippmanMargaret McGeeBruce C. Baughman, CPA

Portfolio Management TeamFranklin Rising Dividends Fund

The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2011, the end of thereporting period. The way we implement our main investment strategies and the resulting portfolio holdings maychange depending on factors such as market and economic conditions. These opinions may not be relied upon asinvestment advice or an offer for a particular security. The information is not a complete analysis of every aspect ofany market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but theinvestment manager makes no representation or warranty as to their completeness or accuracy. Although historicalperformance is no guarantee of future results, these insights may help you understand our investment managementphilosophy.

Top 10 Equity Holdings 3/31/11

Company % of Total Sector/Industry Net Assets

International Business Machines Corp. 5.0%Software & Services

Abbott Laboratories 4.9%Pharmaceuticals, Biotechnology & Life Sciences

The Procter & Gamble Co. 4.9%Household & Personal Products

Becton, Dickinson and Co. 4.9%Health Care Equipment & Services

Wal-Mart Stores Inc. 4.6%Food & Staples Retailing

Family Dollar Stores Inc. 4.1%Retailing

Roper Industries Inc. 4.0%Electrical Equipment

Air Products and Chemicals Inc. 4.0%Materials

PepsiCo Inc. 3.9%Food, Beverage & Tobacco

Praxair Inc. 3.9%Materials


Performance Summary as of 3/31/11

Price and Distribution Information

Class A (Symbol: FRDPX) Change 3/31/11 9/30/10

Net Asset Value (NAV) +$3.24 $34.16 $30.92

Distributions (10/1/10–3/31/11)

Dividend Income $0.3730

Class B (Symbol: FRDBX) Change 3/31/11 9/30/10




Class C (Symbol: FRDTX) Change 3/31/11 9/30/10




Class R (Symbol: FRDRX) Change 3/31/11 9/30/10




Advisor Class (Symbol: FRDAX) Change 3/31/11 9/30/10




Your dividend income will vary depending on dividends or interest paid by securities in the Fund’sportfolio, adjusted for operating expenses of each class. Capital gain distributions are net profitsrealized from the sale of portfolio securities. The performance table does not reflect any taxes that ashareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains onthe sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gaindistributions, if any, and any unrealized gains or losses.

Performance Summary (continued)


Performance

Cumulative total return excludes sales charges. Average annual total return and value of $10,000 investment include maximum sales charges. Class A: 5.75% maximum initial sales charge; Class B: contingent deferred sales charge (CDSC) declining from 4% to 1% over six years, and eliminated thereafter; Class C: 1% CDSC in first year only; Class R/Advisor Class: no sales charges.

Class A 6-Month 1-Year 5-Year 10-Year

Cumulative Total Return1 +11.77% +15.85% +11.95% +87.58%

Average Annual Total Return2 +5.33% +9.19% +1.08% +5.86%

Value of $10,000 Investment3 $10,533 $10,919 $10,551 $17,677

Total Annual Operating Expenses4 1.08%

Class B 6-Month 1-Year 5-Year 10-Year





Class C 6-Month 1-Year 5-Year 10-Year





Class R 6-Month 1-Year 5-Year Inception (1/1/02)





Advisor Class5 6-Month 1-Year 5-Year 10-Year





Performance data represent past performance, which does not guarantee future results. Investment return and principalvalue will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.


Performance Summary (continued)

Endnotes

Value securities may not increase in price as anticipated or may decline further in value. While smaller and midsize companies may offer substan-tial opportunities for capital growth, they also involve heightened risks and should be considered speculative. Historically, smaller and midsizecompany securities have been more volatile in price than larger company securities, especially over the short term. The manager applies varioustechniques and analyses in making investment decisions for the Fund, but there can be no guarantee that these decisions will produce the desiredresults. The Fund’s prospectus also includes a description of the main investment risks.

Class B: These shares have higher annual fees and expenses than Class A shares.

Class C: Prior to 1/1/04, these shares were offered with an initial sales charge; thus actual total returns would have differed. These shareshave higher annual fees and expenses than Class A shares.

Class R: Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees andexpenses than Class A shares.

Advisor Class: Shares are available to certain eligible investors as described in the prospectus.

1. Cumulative total return represents the change in value of an investment over the periods indicated.

2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Six-month return has notbeen annualized.

3. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.

4. Figures are as stated in the Fund’s prospectus current as of the date of this report. In periods of market volatility, assets may decline significantly,causing total annual Fund operating expenses to become higher than the figures shown.

5. Effective 10/3/05, the Fund began offering Advisor class shares, which do not have sales charges or a Rule 12b-1 plan. Performance quotationsfor this class reflect the following methods of calculation: (a) For periods prior to 10/3/05, a restated figure is used based upon the Fund’s Class Aperformance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule 12b-1 fees; and (b) for peri-ods after 10/2/05, actual Advisor Class performance is used reflecting all charges and fees applicable to that class. Since 10/3/05 (commencementof sales), the cumulative and average annual total returns of Advisor Class shares were +28.82% and +4.72%.


Your Fund’s Expenses

As a Fund shareholder, you can incur two types of costs:

• Transaction costs, including sales charges (loads) on Fund purchases; and

• Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and otherFund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

The following table shows ongoing costs of investing in the Fund and can help you understandthese costs and compare them with those of other mutual funds. The table assumes a $1,000investment held for the six months indicated.

Actual Fund Expenses

The first line (Actual) for each share class listed in the table provides actual account values andexpenses. The “Ending Account Value” is derived from the Fund’s actual return, which includesthe effect of Fund expenses.

You can estimate the expenses you paid during the period by following these steps. Of course,your account value and expenses will differ from those in this illustration:

1. Divide your account value by $1,000. If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.

2. Multiply the result by the number under the heading “Expenses Paid During Period.”If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Information in the second line (Hypothetical) for each class in the table can help you compareongoing costs of investing in the Fund with those of other mutual funds. This information may notbe used to estimate the actual ending account balance or expenses you paid during the period. Thehypothetical “Ending Account Value” is based on the actual expense ratio for each class and anassumed 5% annual rate of return before expenses, which does not represent the Fund’s actualreturn. The figure under the heading “Expenses Paid During Period” shows the hypotheticalexpenses your account would have incurred under this scenario. You can compare this figure withthe 5% hypothetical examples that appear in shareholder reports of other funds.


Your Fund’s Expenses (continued)

Please note that expenses shown in the table are meant to highlight ongoing costs and do notreflect any transaction costs, such as sales charges. Therefore, the second line for each class is use-ful in comparing ongoing costs only, and will not help you compare total costs of owning differentfunds. In addition, if transaction costs were included, your total costs would have been higher.Please refer to the Fund prospectus for additional information on operating expenses.

Beginning Account Ending Account Expenses Paid During Class A Value 10/1/10 Value 3/31/11 Period* 10/1/10–3/31/11

Actual $1,000 $1,117.70 $5.02

Hypothetical (5% return before expenses) $1,000 $1,020.19 $4.78

Class B

Actual $1,000 $1,113.80 $8.96


Class C

Actual $1,000 $1,114.00 $8.96


Class R

Actual $1,000 $1,116.40 $6.33


Advisor Class

Actual $1,000 $1,119.30 $3.70


*Expenses are calculated using the most recent six-month expense ratio, annualized for each class (A: 0.95%; B: 1.70%; C: 1.70%; R: 1.20%; and Advisor: 0.70%), multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.

Franklin Managed TrustFinancial Highlights

12 | The accompanying notes are an integral part of these financial statements. | Semiannual Report


Six Months EndedMarch 31, 2011 Year Ended September 30,

Class A (unaudited) 2010 2009 2008 2007 2006

Per share operating performance(for a share outstanding throughout the period)

Net asset value, beginning of period . . . . . . . . $30.92 $26.72 $29.08 $37.47 $36.25 $31.14

Income from investment operationsa:

Net investment incomeb . . . . . . . . . . . . . . . . 0.25 0.38 0.16c 0.48 0.89d 0.44

Net realized and unrealized gains (losses) . . . 3.36 3.94 (2.01) (7.75) 2.43 5.20

Total from investment operations . . . . . . . . . . . 3.61 4.32 (1.85) (7.27) 3.32 5.64

Less distributions from:

Net investment income . . . . . . . . . . . . . . . . (0.37) (0.12) (0.51) (0.45) (0.91) (0.35)

Net realized gains . . . . . . . . . . . . . . . . . . . . — — — (0.67) (1.19) (0.18)

Total distributions . . . . . . . . . . . . . . . . . . . . . (0.37) (0.12) (0.51) (1.12) (2.10) (0.53)

Redemption feese . . . . . . . . . . . . . . . . . . . . . — — — —f —f —f

Net asset value, end of period . . . . . . . . . . . . . $34.16 $30.92 $26.72 $29.08 $37.47 $36.25

Total returng . . . . . . . . . . . . . . . . . . . . . . . . . 11.77% 16.23% (5.90)% (19.85)% 9.53% 18.26%

Ratios to average net assetsh

Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.95% 1.05% 1.13%i 1.01%i 1.00%i 1.00%i

Net investment income . . . . . . . . . . . . . . . . . . 1.51% 1.32% 0.69%c 1.47% 2.42%d 1.32%

Supplemental data

Net assets, end of period (000’s) . . . . . . . . . . $3,180,499 $2,043,971 $1,366,352 $1,383,212 $2,061,210 $1,741,181

Portfolio turnover rate . . . . . . . . . . . . . . . . . . 2.68% 5.65% 22.61% 4.29% 6.02% 7.58%

aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases ofthe Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.bBased on average daily shares outstanding.cNet investment income per share includes approximately $(0.24) per share as a return of capital adjustment to a previously recorded special dividend received by the Fund.Excluding this non-recurring amount, the ratio of net investment income to average net assets would have been 1.72%.dNet investment income per share includes approximately $0.48 per share received in the form of a special dividend paid in connection with a corporate spin-off. Excluding thisnon-recurring amount, the ratio of net investment income to average net assets would have been 1.23%.eEffective September 1, 2008, the redemption fee was eliminated.fAmount rounds to less than $0.01 per share.gTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.hRatios are annualized for periods less than one year.iBenefit of expense reduction rounds to less than 0.01%.

Franklin Managed TrustFinancial Highlights (continued)

Semiannual Report | The accompanying notes are an integral part of these financial statements. | 13



Class B (unaudited) 2010 2009 2008 2007 2006


Net asset value, beginning of period . . . . . . . . . . $30.58 $26.51 $28.73 $36.98 $35.79 $30.74


Net investment income (loss)b . . . . . . . . . . . . . 0.13 0.16 (—)c,d 0.23 0.64e 0.19

Net realized and unrealized gains (losses) . . . . . 3.34 3.91 (1.96) (7.66) 2.37 5.13

Total from investment operations . . . . . . . . . . . . . 3.47 4.07 (1.96) (7.43) 3.01 5.32


Net investment income . . . . . . . . . . . . . . . . . . (0.07) — (0.26) (0.15) (0.63) (0.09)

Net realized gains . . . . . . . . . . . . . . . . . . . . . . — — — (0.67) (1.19) (0.18)

Total distributions . . . . . . . . . . . . . . . . . . . . . . . (0.07) — (0.26) (0.82) (1.82) (0.27)

Redemption feesf . . . . . . . . . . . . . . . . . . . . . . . . — — — —c —c —c

Net asset value, end of period . . . . . . . . . . . . . . . $33.98 $30.58 $26.51 $28.73 $36.98 $35.79

Total returng . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.38% 15.35% (6.62)% (20.44)% 8.71% 17.42%


Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.70% 1.79% 1.88%i 1.76%i 1.75%i 1.76%i

Net investment income (loss) . . . . . . . . . . . . . . . . 0.76% 0.58% (0.06)%d 0.72% 1.67%e 0.56%

Supplemental data

Net assets, end of period (000’s) . . . . . . . . . . . . $76,275 $93,218 $115,657 $164,350 $270,367 $289,640

Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . 2.68% 5.65% 22.61% 4.29% 6.02% 7.58%

aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases ofthe Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.bBased on average daily shares outstanding.cAmount rounds to less than $0.01 per share.dNet investment income per share includes approximately $(0.24) per share as a return of capital adjustment to a previously recorded special dividend received by the Fund.Excluding this non-recurring amount, the ratio of net investment income to average net assets would have been 0.97%.eNet investment income per share includes approximately $0.48 per share received in the form of a special dividend paid in connection with a corporate spin-off. Excluding thisnon-recurring amount, the ratio of net investment income to average net assets would have been 0.48%.fEffective September 1, 2008, the redemption fee was eliminated.gTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.hRatios are annualized for periods less than one year.iBenefit of expense reduction rounds to less than 0.01%.





Class C (unaudited) 2010 2009 2008 2007 2006




Net investment income (loss)b . . . . . . . . . . . . . 0.12 0.16 (0.01)c 0.24 0.61d 0.19




Net investment income . . . . . . . . . . . . . . . . . . (0.19) — (0.28) (0.17) (0.66) (0.10)


Total distributions . . . . . . . . . . . . . . . . . . . . . . . (0.19) — (0.28) (0.84) (1.85) (0.28)

Redemption feese . . . . . . . . . . . . . . . . . . . . . . . — — — —f —f —f


Total returng . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.40% 15.34% (6.59)% (20.44)% 8.69% 17.41%


Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.70% 1.80% 1.88%i 1.75%i 1.75%i 1.74%i

Net investment income (loss) . . . . . . . . . . . . . . . 0.76% 0.57% (0.06)%c 0.73% 1.67%d 0.58%

Supplemental data



aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases ofthe Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.bBased on average daily shares outstanding.cNet investment income per share includes approximately $(0.24) per share as a return of capital adjustment to a previously recorded special dividend received by the Fund.Excluding this non-recurring amount, the ratio of net investment income to average net assets would have been 0.97%dNet investment income per share includes approximately $0.48 per share received in the form of a special dividend paid in connection with a corporate spin-off. Excluding thisnon-recurring amount, the ratio of net investment income to average net assets would have been 0.48%.eEffective September 1, 2008, the redemption fee was eliminated.fAmount rounds to less than $0.01 per share.gTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.hRatios are annualized for periods less than one year.iBenefit of expense reduction rounds to less than 0.01%.





Class R (unaudited) 2010 2009 2008 2007 2006




Net investment incomeb . . . . . . . . . . . . . . . . . . 0.20 0.31 0.10c 0.40 0.80d 0.35




Net investment income . . . . . . . . . . . . . . . . . . (0.30) (0.07) (0.42) (0.36) (0.83) (0.27)


Total distributions . . . . . . . . . . . . . . . . . . . . . . . (0.30) (0.07) (0.42) (1.03) (2.02) (0.45)

Redemption feese . . . . . . . . . . . . . . . . . . . . . . . . — — — —f —f —f


Total returng . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.64% 15.97% (6.18)% (20.03)% 9.22% 17.99%


Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.20% 1.30% 1.38%i 1.26%i 1.25%i 1.26%i

Net investment income . . . . . . . . . . . . . . . . . . . . 1.26% 1.07% 0.44%c 1.22% 2.17%d 1.06%

Supplemental data



aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases ofthe Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.bBased on average daily shares outstanding.cNet investment income per share includes approximately $(0.24) per share as a return of capital adjustment to a previously recorded special dividend received by the Fund.Excluding this non-recurring amount, the ratio of net investment income to average net assets would have been 1.47%.dNet investment income per share includes approximately $0.48 per share received in the form of a special dividend paid in connection with a corporate spin-off. Excluding thisnon-recurring amount, the ratio of net investment income to average net assets would have been 0.98%.eEffective September 1, 2008, the redemption fee was eliminated.fAmount rounds to less than $0.01 per share.gTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.hRatios are annualized for periods less than one year.iBenefit of expense reduction rounds to less than 0.01%.





Advisor Class (unaudited) 2010 2009 2008 2007 2006a



Income from investment operationsb:

Net investment incomec . . . . . . . . . . . . . . . . . . 0.29 0.45 0.23d 0.57 0.88e 0.58




Net investment income . . . . . . . . . . . . . . . . . . (0.43) (0.18) (0.59) (0.54) (1.00) (0.43)


Total distributions . . . . . . . . . . . . . . . . . . . . . . . (0.43) (0.18) (0.59) (1.21) (2.19) (0.61)

Redemption feesf . . . . . . . . . . . . . . . . . . . . . . . . — — — —g —g —g


Total returnh . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93% 16.57% (5.66)% (19.65)% 9.82% 18.53%

Ratios to average net assetsi

Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.70% 0.80% 0.88%j 0.76%j 0.75%j 0.76%j

Net investment income . . . . . . . . . . . . . . . . . . . 1.76% 1.57% 0.94%d 1.72% 2.67%e 1.56%

Supplemental data



aFor the period October 3, 2005 (effective date) to September 30, 2006.bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases ofthe Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.cBased on average daily shares outstanding.dNet investment income per share includes approximately $(0.24) per share as a return of capital adjustment to a previously recorded special dividend received by the Fund.Excluding this non-recurring amount, the ratio of net investment income to average net assets would have been 1.97%.eNet investment income per share includes approximately $0.48 per share received in the form of a special dividend paid in connection with a corporate spin-off. Excluding thisnon-recurring amount, the ratio of net investment income to average net assets would have been 1.48%.fEffective September 1, 2008, the redemption fee was eliminated.gAmount rounds to less than $0.01 per share.hTotal return is not annualized for periods less than one year.iRatios are annualized for periods less than one year.jBenefit of expense reduction rounds to less than 0.01%.


Franklin Managed TrustStatement of Investments, March 31, 2011 (unaudited)

Franklin Rising Dividends Fund Shares Value

Common Stocks 94.8%Aerospace & Defense 5.1%General Dynamics Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 707,000 $ 54,127,920United Technologies Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,990,730 168,515,295

222,643,215

Banks 1.1%Hudson City Bancorp Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,705,800 35,872,144Peoples Bancorp Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,646 1,882,885

aTrustCo Bank Corp. NY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496,478 2,944,115U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212,603 5,619,097

46,318,241

Commercial & Professional Services 1.4%ABM Industries Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,145,249 29,077,872Cintas Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 991,600 30,015,732Superior Uniform Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,200 2,544,912

61,638,516

Consumer Durables & Apparel 2.3%bKid Brands Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 594,253 4,367,760Leggett & Platt Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,097,590 26,890,955NIKE Inc., B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931,000 70,476,700

101,735,415

Consumer Services 3.4%Hillenbrand Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,366,700 29,384,050Matthews International Corp., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,477 4,027,588McDonald’s Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,509,000 114,819,810

148,231,448

Diversified Financials 0.4%State Street Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424,000 19,054,560

Electrical Equipment 6.1%Brady Corp., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,534,825 90,467,904Roper Industries Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,031,009 175,601,038

266,068,942

Energy 1.1%Chevron Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456,000 48,988,080

Food & Staples Retailing 4.6%Wal-Mart Stores Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,866,400 201,246,120

Food, Beverage & Tobacco 8.7%Archer-Daniels-Midland Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,976,000 107,165,760McCormick & Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,146,400 102,662,312PepsiCo Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,663,000 171,523,830

381,351,902


Franklin Managed TrustStatement of Investments, March 31, 2011 (unaudited) (continued)


Common Stocks (continued)Health Care Equipment & Services 13.4%Becton, Dickinson and Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,691,016 $ 214,258,694Hill-Rom Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 749,900 28,481,202Medtronic Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,298,500 129,795,975Stryker Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,237,725 75,253,680Teleflex Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,188,653 68,918,101West Pharmaceutical Services Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,570,800 70,324,716

587,032,368

Household & Personal Products 7.0%Alberto-Culver Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,135,550 42,321,948Colgate-Palmolive Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623,500 50,353,860The Procter & Gamble Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,479,500 214,337,200

307,013,008

Industrial Conglomerates 0.4%Carlisle Cos. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406,829 18,124,232

Insurance 7.0%Aflac Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763,910 40,319,170Arthur J. Gallagher & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 874,700 26,599,627Chubb Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430,000 26,363,300Erie Indemnity Co., A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,733,082 123,239,461Mercury General Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290,519 11,368,008Old Republic International Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,381,050 55,595,525RLI Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426,359 24,579,596

308,064,687

Machinery 3.9%Donaldson Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506,052 31,015,927Dover Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,094,800 137,712,152

168,728,079

Materials 10.0%Air Products and Chemicals Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,933,900 174,399,102Bemis Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,516,389 49,752,723Nucor Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 958,400 44,105,568Praxair Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,680,381 170,726,710

438,984,103

Pharmaceuticals, Biotechnology & Life Sciences 9.8%Abbott Laboratories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,383,600 215,015,580Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,561,000 151,739,250Pfizer Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,083,800 62,631,978

429,386,808

Retailing 4.1%Family Dollar Stores Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,518,060 180,546,839


Franklin Managed TrustStatement of Investments, March 31, 2011 (unaudited) (continued)


Common Stocks (continued)Semiconductors & Semiconductor Equipment 0.0%†

Cohu Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,100 $ 1,046,016

Software & Services 5.0%International Business Machines Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,332,200 217,241,854

Total Common Stocks (Cost $3,332,386,108) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,153,444,433

Short Term Investments 4.7%Money Market Funds (Cost $205,584,456) 4.7%

b,c Institutional Fiduciary Trust Money Market Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205,584,456 205,584,456

d Investments from Cash Collateral Received for Loaned Securities 0.0%†

Money Market Funds (Cost $46,869) 0.0%†

bBank of New York Institutional Cash Reserve Fund, Series B . . . . . . . . . . . . . . . . . . . . . . . . . . 46,869 37,495

Franklin Rising Dividends Fund Principal ValueFranklin Rising Dividends Fund Amount ValueeRepurchase Agreements 0.0%†

Barclays Capital Inc., 0.12%, 4/01/11 (Maturity Value $121,100)Collateralized by U.S. Treasury Notes, 2.50% - 3.00%, 7/15/12 - 7/15/16

(valued at $123,522) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 121,100 121,100BNP Paribas Securities Corp., 0.10%, 4/01/11 (Maturity Value $121,100)Collateralized by U.S. Treasury Notes, 0.75% - 3.63%, 5/15/12 - 2/15/20

(valued at $123,522) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,100 121,100Credit Suisse Securities (USA) LLC, 0.12%, 4/01/11 (Maturity Value $121,100)Collateralized by U.S. Treasury Notes, 1.25% - 3.38%, 4/15/11 - 7/15/17 (valued at $28,661)

and U.S. Treasury Bonds, 2.00% - 3.63%, 1/15/26 - 1/15/29 (valued at $94,861) . . . . . . 121,100 121,100Deutsche Bank Securities Inc., 0.10%, 4/01/11 (Maturity Value $78,000)Collateralized by U.S. Treasury Notes, 2.25%, 3/31/16 (valued at $79,560) . . . . . . . . . . . . . 78,000 78,000

Total Repurchase Agreements (Cost $441,300) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,300

Total Investments from Cash Collateral Received for Loaned Securities (Cost $488,169) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 478,795

Total Investments (Cost $3,538,458,733) 99.5% . . . . . . . . . . . . . . . . . . . . . . . . . 4,359,507,684

Other Assets, less Liabilities 0.5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,241,714

Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,382,749,398

†Rounds to less than 0.1% of net assets.aA portion or all of the security is on loan at March 31, 2011. See Note 1(c).bNon-income producing.cSee Note 7 regarding investments in the Institutional Fiduciary Trust Money Market Portfolio.dSee Note 1(c) regarding securities on loan.eSee Note 1(b) regarding repurchase agreements.


Franklin Managed TrustFinancial Statements

Statement of Assets and LiabilitiesMarch 31, 2011 (unaudited)

Franklin RisingDividends Fund

Assets:Investments in securities:

Cost - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,332,432,977Cost - Sweep Money Fund (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205,584,456Cost - Repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,300

Total cost of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,538,458,733

Value - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,153,481,928Value - Sweep Money Fund (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205,584,456Value - Repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,300

Total value of investments (includes securities loaned in the amount of $482,702) . . . . . . . . . . . . . . . . . . . . . . . 4,359,507,684Receivables:

Investment securities sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,626,534Capital shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,717,683Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,803,452

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,322

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,399,656,675

Liabilities:Payables:

Investment securities purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 917,052Capital shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,515,055Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,749,781

Payable upon return of securities loaned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488,169Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237,220

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,907,277

Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,382,749,398

Net assets consist of:Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,624,834,002Undistributed net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,669,656Net unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821,048,951Accumulated net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,803,211)

Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,382,749,398


Franklin Managed TrustFinancial Statements (continued)

Statement of Assets and Liabilities (continued)March 31, 2011 (unaudited)


Class A:Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,180,498,563

Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,094,554

Net asset value per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34.16

Maximum offering price per share (net asset value per share ÷ 94.25%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36.24

Class B:Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 76,274,793


Net asset value and maximum offering price per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33.98

Class C:Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 780,160,924


Net asset value and maximum offering price per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33.73

Class R:Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 76,070,891


Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34.09

Advisor Class:Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 269,744,227


Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34.12

aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.



Statement of Operationsfor the six months ended March 31, 2011 (unaudited)


Investment income:Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,074,827

Expenses:Management fees (Note 3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,639,970Distribution fees: (Note 3c)

Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,261,776Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430,703Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,089,469Class R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,846

Transfer agent fees (Note 3e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,403,722Unaffiliated transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,148,525Accounting fees (Note 3b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,945Custodian fees (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,134Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,295Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,431Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,952Trustees’ fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,810Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,299

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,511,877

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,562,950

Realized and unrealized gains (losses):Net realized gain (loss) from investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,441,140Net change in unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314,509,122

Net realized and unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356,950,262

Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $381,513,212



Statements of Changes in Net Assets

Franklin Rising Dividends FundSix Months EndedMarch 31, 2011 Year Ended

(unaudited) September 30, 2010Increase (decrease) in net assets:

Operations:Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,562,950 $ 26,094,133Net realized gain (loss) from investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,441,140 40,220,657Net change in unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . 314,509,122 269,612,016

Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . 381,513,212 335,926,806

Distributions to shareholders from:Net investment income:

Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,474,661) (6,394,307)Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (206,439) —Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,245,293) —Class R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (477,473) (85,040)Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,320,054) (452,894)

Total distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,723,920) (6,932,241)

Capital share transactions: (Note 2)Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883,391,236 438,243,492Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,203,906) (37,552,300)Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,706,427 73,002,671Class R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,393,368 6,916,047Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,030,313 62,917,088

Total capital share transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,243,317,438 543,526,998

Net increase (decrease) in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,591,106,730 872,521,563

Net assets:Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,791,642,668 1,919,121,105

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,382,749,398 $2,791,642,668

Undistributed net investment income included in net assets:End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,669,656 $ 19,830,626


Franklin Managed TrustNotes to Financial Statements (unaudited)


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Managed Trust (Trust) is registered under the Investment Company Act of 1940, asamended, (1940 Act) as an open-end investment company, consisting of one fund, the FranklinRising Dividends Fund (Fund). The Fund offers five classes of shares: Class A, Class B, Class C,Class R, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferredsales charges, distribution fees, voting rights on matters affecting a single class and its exchangeprivilege.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

The Fund’s investments in securities and other financial instruments are carried at fair valuedaily. Fair value is the price that would be received to sell an asset or paid to transfer a liabilityin an orderly transaction between market participants on the measurement date. Under proce-dures approved by the Fund’s Board of Trustees, the Fund may utilize independent pricingservices, quotations from securities and financial instrument dealers, and other market sourcesto determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valuedat the last quoted sale price or the official closing price of the day, respectively. Over-the-countersecurities are valued within the range of the most recent quoted bid and ask prices. Securitiesthat trade in multiple markets or on multiple exchanges are valued according to the broadestand most representative market. Certain equity securities are valued based upon fundamentalcharacteristics or relationships to similar securities. Investments in open-end mutual funds arevalued at the closing net asset value. Repurchase agreements are valued at cost, which approxi-mates market value.

The Fund has procedures to determine the fair value of securities and other financial instru-ments for which market prices are not readily available or which may not be reliably priced.Under these procedures, the Fund primarily employs a market-based approach which may userelated or comparable assets or liabilities, recent transactions, market multiples, book values,and other relevant information for the investment to determine the fair value of the investment.The Fund may also use an income-based valuation approach in which the anticipated futurecash flows of the investment are discounted to calculate fair value. Discounts may also beapplied due to the nature or duration of any restrictions on the disposition of the investments.Due to the inherent uncertainty of valuations of such investments, the fair values may differ sig-nificantly from the values that would have been used had an active market existed.


Franklin Managed TrustNotes to Financial Statements (unaudited) (continued)


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

b. Repurchase Agreements

The Fund may enter into repurchase agreements, which are accounted for as a loan by the Fundto the seller, collateralized by securities which are delivered to the Fund’s custodian. The marketvalue, including accrued interest, of the initial collateralization is required to be at least 102% ofthe dollar amount invested by the Fund, with the value of the underlying securities marked tomarket daily to maintain coverage of at least 100%. All repurchase agreements held by the Fundat period end had been entered into on March 31, 2011.

c. Securities Lending

The Fund participates in a principal based security lending program. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the market valueof the loaned securities. Collateral is maintained over the life of the loan in an amount not lessthan 100% of the market value of loaned securities, as determined at the close of Fund businesseach day; any additional collateral required due to changes in security values is delivered to theFund on the next business day. The collateral is invested in repurchase agreements and in a non-registered money fund managed by the Fund’s custodian on the Fund’s behalf. The Fund receivesincome from the investment of cash collateral, in addition to lending fees and rebates paid bythe borrower. The Fund bears the market risk with respect to the collateral investment, securitiesloaned, and the risk that the principal may default on its obligations to the Fund.

d. Income Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal RevenueCode. The Fund intends to distribute to shareholders substantially all of its taxable income and netrealized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S.federal income taxes is required. The Fund files U.S. income tax returns as well as tax returns incertain other jurisdictions. The Fund records a provision for taxes in its financial statementsincluding penalties and interest, if any, for a tax position taken on a tax return (or expected to betaken) when it fails to meet the more likely than not (a greater than 50% probability) thresholdand based on the technical merits, the tax position may not be sustained upon examination by thetax authorities. As of March 31, 2011, and for all open tax years, the Fund has determined that noprovision for income tax is required in the Fund’s financial statements. Open tax years are thosethat remain subject to examination and are based on each tax jurisdiction statute of limitation.The Fund is not aware of any tax position for which it is reasonably possible that the totalamounts of unrecognized tax effects will significantly change in the next twelve months.




1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

e. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security trans-actions are determined on a specific identification basis. Estimated expenses are accrued daily.Dividend income is recorded on the ex-dividend date. Distributions to shareholders are recordedon the ex-dividend date and are determined according to income tax regulations (tax basis).Distributable earnings determined on a tax basis may differ from earnings recorded in accordancewith accounting principles generally accepted in the United States of America. These differencesmay be permanent or temporary. Permanent differences are reclassified among capital accounts toreflect their tax character. These reclassifications have no impact on net assets or the results ofoperations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Realized and unrealized gains and losses and net investment income, not including class specificexpenses, are allocated daily to each class of shares based upon the relative proportion of netassets of each class. Differences in per share distributions, by class, are generally due to differ-ences in class specific expenses.

Distributions received by the Fund from certain securities may be a return of capital (ROC). Suchdistributions reduce the cost basis of the securities, and any distributions in excess of the costbasis are recognized as capital gains.

f. Accounting Estimates

The preparation of financial statements in accordance with accounting principles generallyaccepted in the United States of America requires management to make estimates and assump-tions that affect the reported amounts of assets and liabilities at the date of the financialstatements and the amounts of income and expenses during the reporting period. Actual resultscould differ from those estimates.

g. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trustagainst certain liabilities arising out of the performance of their duties to the Trust. Additionally,in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with serv-ice providers that contain general indemnification clauses. The Trust’s maximum exposure underthese arrangements is unknown as this would involve future claims that may be made against theTrust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.




2. SHARES OF BENEFICIAL INTEREST

At March 31, 2011, there were an unlimited number of shares authorized (without par value).Transactions in the Fund’s shares were as follows:

Six Months Ended Year EndedMarch 31, 2011 September 30, 2010

Shares Amount Shares Amount

Class A Shares:Shares sold . . . . . . . . . . . . . . . 32,932,167 $1,079,573,693 26,422,951 $ 766,721,973Shares issued in reinvestment of

distributions . . . . . . . . . . . . . . 790,534 25,233,843 209,107 5,836,183Shares redeemed . . . . . . . . . . . (6,740,796) (221,416,300) (11,659,516) (334,314,664)

Net increase (decrease) . . . . . . . 26,981,905 $ 883,391,236 14,972,542 $ 438,243,492

Class B Shares:Shares sold . . . . . . . . . . . . . . . 104,574 $ 3,399,418 105,129 $ 3,034,209Shares issued in reinvestment of

distributions . . . . . . . . . . . . . . 5,317 169,252 — —Shares redeemed . . . . . . . . . . . (913,637) (29,772,576) (1,420,165) (40,586,509)

Net increase (decrease) . . . . . . . (803,746) $ (26,203,906) (1,315,036) $ (37,552,300)

Class C Shares:Shares sold . . . . . . . . . . . . . . . 8,955,459 $ 290,557,445 5,435,524 $ 156,435,257Shares issued in reinvestment of

distributions . . . . . . . . . . . . . . 87,228 2,755,540 — —Shares redeemed . . . . . . . . . . . (1,373,687) (44,606,558) (2,947,529) (83,432,586)


Class R Shares:Shares sold . . . . . . . . . . . . . . . 1,058,170 $ 34,771,963 615,236 $ 17,532,496Shares issued in reinvestment of

distributions . . . . . . . . . . . . . . 14,396 458,952 2,954 82,351Shares redeemed . . . . . . . . . . . (329,865) (10,837,547) (374,747) (10,698,800)

Net increase (decrease) . . . . . . . 742,701 $ 24,393,368 243,443 $ 6,916,047

Advisor Class Shares:Shares sold . . . . . . . . . . . . . . . 4,128,813 $ 135,399,818 2,627,763 $ 76,535,502Shares issued in reinvestment of

distributions . . . . . . . . . . . . . . 61,102 1,946,113 14,453 402,221Shares redeemed . . . . . . . . . . . (735,413) (24,315,618) (487,285) (14,020,635)





3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referredto as Franklin Templeton Investments. Certain officers and trustees of the Trust are also officersand/or directors of the following subsidiaries:

Subsidiary AffiliationFranklin Advisory Services, LLC (Advisory Services) Investment managerFranklin Templeton Services, LLC (FT Services) Administrative managerFranklin Templeton Distributors, Inc. (Distributors) Principal underwriterFranklin Templeton Investor Services, LLC (Investor Services) Transfer agent

a. Management Fees

The Fund pays an investment management fee to Advisory Services based on the average dailynet assets of the Fund as follows:

Annualized Fee Rate Net Assets

0.750% Up to and including $500 million0.625% Over $500 million, up to and including $1 billion0.500% In excess of $1 billion

Effective April 1, 2011, the Fund will pay fees based on the average daily net assets of the Fundas follows:

Annualized Fee Rate Net Assets

0.750% Up to and including $500 million0.625% Over $500 million, up to and including $1 billion0.500% Over $1 billion, up to and including $5 billion0.490% In excess of $5 billion

b. Administrative Fees

Under an agreement with Advisory Services, FT Services provides administrative services to theFund. The fee is paid by Advisory Services based on average daily net assets, and is not an addi-tional expense of the Fund.

The Fund also pays accounting fees to Advisory Services as noted in the Statement of Operations.

c. Distribution Fees

The Trust’s Board of Trustees has adopted distribution plans for each share class, with theexception of Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under theFund’s Class A reimbursement distribution plan, the Fund reimburses Distributors for costsincurred in connection with the servicing, sale and distribution of the Fund’s shares up to themaximum annual plan rate. Under the Class A reimbursement distribution plan, costs exceedingthe maximum for the current plan year cannot be reimbursed in subsequent periods.




3. TRANSACTIONS WITH AFFILIATES (continued)

c. Distribution Fees (continued)

In addition, under the Fund’s Class B, C, and R compensation distribution plans, the Fund paysDistributors for costs incurred in connection with the servicing, sale and distribution of theFund’s shares up to the maximum annual plan rate for each class.

The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:

Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00%Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00%Class R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%

d. Sales Charges/Underwriting Agreements

Distributors has advised the Fund of the following commission transactions related to the salesand redemptions of the Fund’s shares for the period:

Sales charges retained net of commissions paid to unaffiliated broker/dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,147,207

Contingent deferred sales charges retained . . . . . . . . . . . . . . . . $ 58,080

e. Transfer Agent Fees

For the period ended March 31, 2011, the Fund paid transfer agent fees of $2,552,247, ofwhich $1,403,722 was retained by Investor Services.

4. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits realized as a resultof uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses.During the period ended March 31, 2011, there were no credits earned.

5. INCOME TAXES

For tax purposes, capital losses may be carried over to offset future capital gains, if any. AtSeptember 30, 2010, the Fund had tax basis capital losses of $115,864,649 expiring in 2017.



5. INCOME TAXES (continued)

At March 31, 2011, the cost of investments and net unrealized appreciation (depreciation) forincome tax purposes were as follows:

Cost of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,538,675,809

Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 918,041,279Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . (97,209,404)

Net unrealized appreciation (depreciation) . . . . . . . . . . . . . $ 820,831,875

Net realized gains (losses) differ for financial statement and tax purposes primarily due to differingtreatment of wash sales.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short term securities) for the period endedMarch 31, 2011, aggregated $1,300,027,831 and $89,485,337, respectively.

7. INVESTMENTS IN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund may invest in the Institutional Fiduciary Trust Money Market Portfolio (Sweep MoneyFund), an open-end investment company managed by Franklin Advisers, Inc. (an affiliate of theinvestment manager). Management fees paid by the Fund are reduced on assets invested in theSweep Money Fund, in an amount not to exceed the management and administrative fees paid bythe Sweep Money Fund.

8. CREDIT FACILITY

The Fund, together with other U.S. registered and foreign investment funds (collectively“Borrowers”), managed by Franklin Templeton Investments, are borrowers in a joint syndicatedsenior unsecured credit facility totaling $750 million (Global Credit Facility) which matures onJanuary 20, 2012. This Global Credit Facility provides a source of funds to the Borrowers fortemporary and emergency purposes, including the ability to meet future unanticipated or unusu-ally large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged onany borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees andexpenses incurred in connection with the implementation and maintenance of the Global CreditFacility, based upon its relative share of the aggregate net assets of all of the Borrowers, includingan annual commitment fee of 0.08% based upon the unused portion of the Global Credit Facility,which is reflected in other expenses on the Statement of Operations. During the period endedMarch 31, 2011, the Fund did not use the Global Credit Facility.





9. FAIR VALUE MEASUREMENTS

The Fund follows a fair value hierarchy that distinguishes between market data obtained fromindependent sources (observable inputs) and the Fund’s own market assumptions (unobservableinputs). These inputs are used in determining the value of the Fund’s investments and are sum-marized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical securities

• Level 2 – other significant observable inputs (including quoted prices for similar securities,interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not an indication of the risk associatedwith investing in those securities.

For movements between the levels within the fair value hierarchy, the Fund has adopted a policyof recognizing the transfers as of the date of the underlying event which caused the movement.

The following is a summary of the inputs used as of March 31, 2011, in valuing the Fund’s assetscarried at fair value:

Level 1 Level 2 Level 3 Total

Assets:

Investments in Securities:Equity Investmentsa . . . . . . . $4,153,444,433 $ — $— $4,153,444,433

Short Term Investments . . . . 205,584,456 478,795 — 206,063,251

Total Investments in Securities . . . . . . . . . . . . $4,359,028,889 $478,795 $— $4,359,507,684

aFor detailed industry descriptions, see the accompanying Statement of Investments.

10. SUBSEQUENT EVENTS

The Fund has evaluated subsequent events through the issuance of the financial statements anddetermined that no events have occurred that require disclosure other than those already dis-closed in the financial statements.


Franklin Managed TrustShareholder Information


Board Review of Investment Management Agreement

At a meeting held March 1, 2011, the Board of Trustees (Board), including a majority of non-interested or independent Trustees, approved renewal of the investment management agreementfor Franklin Rising Dividends Fund (Fund). In reaching this decision, the Board took into accountinformation furnished throughout the year at regular Board meetings, as well as information pre-pared specifically in connection with the annual renewal review process. Information furnishedand discussed throughout the year included investment performance reports and related financialinformation for the Fund, as well as periodic reports on expenses, shareholder services, legal, com-pliance, risk control, pricing, brokerage commissions and execution and other services provided bythe Investment Manager (Manager) and its affiliates. Information furnished specifically in connec-tion with the renewal process included a report for the Fund prepared by Lipper, Inc. (Lipper), anindependent organization, as well as additional material, including a Fund profitability analysisprepared by management. The Lipper report compared the Fund’s investment performance andexpenses with those of other mutual funds deemed comparable to the Fund as selected by Lipper.The Fund profitability analysis discussed the profitability to Franklin Templeton Investments fromits overall U.S. fund operations, as well as on an individual fund-by-fund basis. Additional materialaccompanying such profitability analysis included information on a fund-by-fund basis listingportfolio managers and other accounts they manage, as well as information on management feescharged by the Manager and its affiliates to U.S. mutual funds and other accounts, including man-agement’s explanation of differences where relevant. Such material also included a memorandumprepared by management describing project initiatives and capital investments relating to the serv-ices provided to the Fund by the Franklin Templeton Investments organization, as well as amemorandum relating to economies of scale and a comparative analysis concerning transfer agentfees charged the Fund.

In considering such materials, the independent Trustees received assistance and advice from andmet separately with independent counsel. In approving continuance of the investment managementagreement for the Fund, the Board, including a majority of independent Trustees, determined thatthe existing management fee structure was fair and reasonable and that continuance of the invest-ment management agreement was in the best interests of the Fund and its shareholders. Whileattention was given to all information furnished, the following discusses some primary factors rele-vant to the Board’s decision.

NATURE, EXTENT AND QUALITY OF SERVICES. The Board was satisfied with the natureand quality of the overall services provided by the Manager and its affiliates to the Fund and itsshareholders. In addition to investment performance and expenses discussed later, the Board’sopinion was based, in part, upon periodic reports furnished it showing that the investment policiesand restrictions for the Fund were consistently complied with as well as other reports periodicallyfurnished the Board covering matters such as the compliance of portfolio managers and othermanagement personnel with the code of ethics adopted throughout the Franklin Templeton fund


Franklin Managed TrustShareholder Information (continued)


Board Review of Investment Management Agreement (continued)

complex, the adherence to fair value pricing procedures established by the Board, and the accuracyof net asset value calculations. The Board also noted the extent of benefits provided Fund share-holders from being part of the Franklin Templeton family of funds, including the right to exchangeinvestments between the same class of funds without a sales charge, the ability to reinvest Funddividends into other funds and the right to combine holdings in other funds to obtain a reducedsales charge. Favorable consideration was given to management’s continuous efforts and expendi-tures in establishing back-up systems and recovery procedures to function in the event of a naturaldisaster, it being noted by the Board that such systems and procedures had functioned smoothlyduring the Florida hurricanes and blackouts experienced in previous years. Among other factorstaken into account by the Board were the Manager’s best execution trading policies, including afavorable report on the efficiency of its trading operations by an independent portfolio tradinganalytical firm. Consideration was also given to the experience of the Fund’s portfolio manage-ment team, the number of accounts managed and general method of compensation. In this latterrespect, the Board noted that a primary factor in management’s determination of a portfolio man-ager’s bonus compensation was the relative investment performance of the funds he or shemanaged and that a portion of such bonus was required to be invested in a predesignated list offunds within such person’s fund management area so as to be aligned with the interests of share-holders. In this respect, the Board after making inquiries of management, received assurances thatbonus composition was not unduly influenced by one-year or short-term performance but wasbased primarily on longer periods consistent with the interests of long-term shareholders. TheBoard also took into account the quality of transfer agent and shareholder services provided Fundshareholders by an affiliate of the Manager and the continuous enhancements to the FranklinTempleton website. Particular attention was given to management’s conservative approach anddiligent risk management procedures, it being noted that the Fund did not currently invest in deriv-atives or other complex instruments. The Board also took into account, among other things,management’s efforts in establishing a global credit facility for the benefit of the Fund and otheraccounts managed by Franklin Templeton Investments to provide a source of cash for temporaryand emergency purposes or to meet unusual redemption requests as well as the strong financialposition of the Manager’s parent company and its commitment to the mutual fund business as evi-denced by its subsidization of money market funds.

INVESTMENT PERFORMANCE. The Board placed significant emphasis on the investment per-formance of the Fund in view of its importance to shareholders. While consideration was given toperformance reports and discussions with the Fund’s portfolio manager at Board meetingsthroughout the year, particular attention in assessing performance was given to the Lipper reportfurnished for the agreement renewal. The Lipper report prepared for the Fund showed the invest-ment performance of its Class A shares during 2010 and the previous 10-year period endedDecember 31, 2010, in comparison to a performance universe consisting of the Fund and all retailand institutional multi-cap value funds as selected by Lipper. The Lipper report showed the Fund’s





total return during 2010 to be in the second-highest quintile of its performance universe, and on anannualized basis to be in the highest or best performing quintile of such universe for each of theprevious three- and 10-year periods, and the second-highest quintile of such universe for the previ-ous five-year period. The Board was satisfied with the Fund’s comparative investment performanceas set forth in the Lipper report.

COMPARATIVE EXPENSES. Consideration was given to a comparative analysis of the manage-ment fees and total expense ratio of the Fund compared with those of a group of other fundsselected by Lipper as its appropriate Lipper expense group. Lipper expense data is based uponinformation taken from each fund’s most recent annual report, which reflects historical asset levelsthat may be quite different from those currently existing, particularly in a period of market volatil-ity. While recognizing such inherent limitation and the fact that expense ratios generally increase asassets decline and decrease as assets grow, the Board believed the independent analysis conductedby Lipper to be an appropriate measure of comparative expenses. In reviewing comparative costs,Lipper provides information on the Fund’s contractual investment management investment fee incomparison with the contractual investment management fee that would have been charged byother funds within its Lipper expense group assuming they were similar in size to the Fund, as wellas the actual total expenses of the Fund in comparison with those of its Lipper expense group. TheLipper contractual investment management fee analysis includes administrative charges as beingpart of a management fee, and total expenses, for comparative consistency, are shown by Lipperfor Fund Class A shares. The results of such expense comparisons showed that the Fund’s contrac-tual investment management fee rate was below the median of its Lipper expense group, and theFund’s actual total expense ratio was in the least expensive quintile of its Lipper expense group.The Board was satisfied with the management fee rate and total expense ratio of the Fund in com-parison to its Lipper expense group as shown in the Lipper report. The Board did, however, believeit appropriate to negotiate a breakpoint reduction to the Fund’s investment management fee as dis-cussed under “Economies of Scale.”

MANAGEMENT PROFITABILITY. The Board also considered the level of profits realized bythe Manager and its affiliates in connection with the operation of the Fund. In this respect, theBoard reviewed the Fund profitability analysis that addresses the overall profitability of FranklinTempleton’s U.S. fund business, as well as its profits in providing management and other servicesto each of the individual funds during the 12-month period ended September 30, 2010, being themost recent fiscal year-end for Franklin Resources, Inc., the Manager’s parent. In reviewing theanalysis, attention was given to the methodology followed in allocating costs to the Fund, it beingrecognized that allocation methodologies are inherently subjective and various allocation method-ologies may each be reasonable while producing different results. In this respect, the Board notedthat, while being continuously refined and reflecting changes in the Manager’s own cost account-ing, the cost allocation methodology was consistent with that followed in profitability report





presentations for the Fund made in prior years and that an independent registered public accountingfirm had been engaged by the Manager to review the reasonableness of the allocation methodologiessolely for use by the Fund’s Board in reference to the profitability analysis. In reviewing and discuss-ing such analysis, management discussed with the Board its belief that costs incurred in establishingthe infrastructure necessary for the type of mutual fund operations conducted by the Manager andits affiliates may not be fully reflected in the expenses allocated to the Fund in determining its prof-itability, as well as the fact that the level of profits, to a certain extent, reflected operational costsavings and efficiencies initiated by management. The Board also took into account management’sexpenditures in improving shareholder services provided the Fund, as well as the need to meet addi-tional regulatory and compliance requirements resulting from the Sarbanes-Oxley Act and recentSEC and other regulatory requirements. In addition, the Board considered a third-party study com-paring the profitability of the Manager’s parent on an overall basis to other publicly held managersbroken down to show profitability from management operations exclusive of distribution expenses,as well as profitability including distribution expenses. The Board also considered the extent towhich the Manager and its affiliates might derive ancillary benefits from fund operations, includingrevenues generated from transfer agent services and potential benefits resulting from allocation offund brokerage and the use of commission dollars to pay for research. Based upon its considerationof all these factors, the Board determined that the level of profits realized by the Manager and itsaffiliates from providing services to the Fund was not excessive in view of the nature, quality andextent of services provided.

ECONOMIES OF SCALE. The Board also considered whether economies of scale are realized by the Manager as the Fund grows larger and the extent to which this is reflected in the level ofmanagement fees charged. While recognizing that any precise determination is inherently subjective,the Board noted that based upon the Fund profitability analysis, it appears that as some funds getlarger, at some point economies of scale do result in the Manager realizing a larger profit marginon management services provided such a fund. The Board also noted that economies of scale areshared with a fund and its shareholders through management fee breakpoints so that as a fundgrows in size, its effective management fee rate declines. The fee structure under the Fund’s invest-ment management agreement provides an initial fee of 0.75% on the first $500 million of Fund netassets; 0.625% on the next $500 million of Fund net assets, and 0.5% on Fund net assets in excessof $1 billion. At February 28, 2011, the Fund’s net assets were approximately $4.2 billion. Whilenoting the Fund’s favorable contractual management fee and total expense ratio comparisons withinits Lipper expense group, the Board felt it appropriate to add an additional breakpoint and negoti-ated with management a fee reduction to 0.49% on Fund assets in excess of $5 billion to becomeeffective April 1, 2011.




Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) thatthe Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders mayview the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders mayrequest copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 orby sending a written request to: Franklin Templeton Companies, LLC, 500 East Broward Boulevard,Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy Group. Copies of the Trust’s proxy votingrecords are also made available online at franklintempleton.com and posted on the U.S. Securitiesand Exchange Commission’s website at sec.gov and reflect the most recent 12-month period endedJune 30.

Quarterly Statement of Investments

The Trust files a complete statement of investments with the U.S. Securities and Exchange Commissionfor the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filedForm N-Q by visiting the Commission’s website at sec.gov. The filed form may also be viewed andcopied at the Commission’s Public Reference Room in Washington, DC. Information regarding theoperations of the Public Reference Room may be obtained by calling (800) SEC-0330.

Franklin Templeton FundsLiterature Request. To receive a summary prospectus and/or prospectus, please call us at (800) DIAL BEN/342-5236 or

visit franklintempleton.com. Investors should carefully consider a fund’s investment goals, risks, charges and expenses

before investing. The prospectus contains this and other information. Please carefully read a prospectus before investing.

To ensure the highest quality of service, we may monitor, record and access telephone calls to or from our service

departments. These calls can be identified by the presence of a regular beeping tone.

VALUEFranklin All Cap Value FundFranklin Balance Sheet Investment FundFranklin Large Cap Value FundFranklin MicroCap Value Fund1

Franklin MidCap Value FundFranklin Small Cap Value FundMutual Beacon FundMutual Quest FundMutual Recovery Fund2

Mutual Shares Fund

BLENDFranklin Focused Core Equity FundFranklin Large Cap Equity FundFranklin Rising Dividends Fund

GROWTHFranklin DynaTech FundFranklin Flex Cap Growth FundFranklin Growth FundFranklin Growth Opportunities FundFranklin Small Cap Growth FundFranklin Small-Mid Cap Growth Fund

SECTORFranklin Biotechnology Discovery FundFranklin Global Real Estate FundFranklin Gold & Precious Metals FundFranklin Natural Resources FundFranklin Real Estate Securities FundFranklin Utilities FundMutual Financial Services Fund

GLOBALFranklin World Perspectives FundMutual Global Discovery FundTempleton Global Opportunities TrustTempleton Global Smaller Companies FundTempleton Growth FundTempleton World Fund

1. The fund is closed to new investors. Existing shareholders and select retirement plans cancontinue adding to their accounts.2. The fund is a continuously offered, closed-end fund. Shares may be purchased daily; thereis no daily redemption. However, each quarter, pending board approval, the fund will authorizethe repurchase of 5%–25% of the outstanding number of shares. Investors may tender all ora portion of their shares during the tender period.3. Effective 5/1/10, the Franklin Templeton Target Funds changed their name to the FranklinTempleton Allocation Funds. The funds’ investment goals and principal investment strategiesremained unchanged.

4. An investment in the fund is neither insured nor guaranteed by the U.S. government or byany other entity or institution.5. For investors subject to the alternative minimum tax, a small portion of fund dividends maybe taxable. Distributions of capital gains are generally taxable.6. The fund invests primarily in insured municipal securities.7. The funds of the Franklin Templeton Variable Insurance Products Trust are generally availableonly through insurance company variable contracts.

AlabamaArizonaCalifornia (4 funds)ColoradoConnecticutFloridaGeorgiaKentuckyLouisianaMarylandMassachusettsMichigan

MinnesotaMissouriNew JerseyNew York (2 funds)North CarolinaOhioOregonPennsylvaniaTennesseeVirginia

INSURANCE FUNDSFranklin Templeton Variable Insurance Products Trust7

01/11 Not part of the semiannual report

INTERNATIONALFranklin India Growth FundFranklin International Growth FundFranklin International Small Cap Growth FundMutual European FundMutual International FundTempleton Asian Growth FundTempleton BRIC FundTempleton China World FundTempleton Developing Markets TrustTempleton Emerging Markets Small Cap FundTempleton Foreign FundTempleton Foreign Smaller Companies FundTempleton Frontier Markets Fund

HYBRIDFranklin Balanced FundFranklin Convertible Securities FundFranklin Equity Income FundFranklin Income FundTempleton Income Fund

ASSET ALLOCATIONFranklin Templeton Corefolio® Allocation FundFranklin Templeton Founding Funds Allocation FundFranklin Templeton Conservative Allocation Fund3

Franklin Templeton Growth Allocation Fund3

Franklin Templeton Moderate Allocation Fund3

Franklin Templeton 2015 Retirement Target FundFranklin Templeton 2025 Retirement Target FundFranklin Templeton 2035 Retirement Target FundFranklin Templeton 2045 Retirement Target Fund

FIXED INCOMEFranklin Adjustable U.S. Government Securities Fund4

Franklin Floating Rate Daily Access FundFranklin High Income FundFranklin Limited Maturity U.S. GovernmentSecurities Fund4

Franklin Low Duration Total Return FundFranklin Real Return FundFranklin Strategic Income FundFranklin Strategic Mortgage PortfolioFranklin Templeton Hard Currency FundFranklin Total Return FundFranklin U.S. Government Securities Fund4

Templeton Global Bond FundTempleton Global Total Return FundTempleton International Bond Fund

TAX-FREE INCOME5

NationalDouble Tax-Free Income FundFederal Tax-Free Income FundHigh Yield Tax-Free Income FundInsured Tax-Free Income Fund6

Limited-/ Intermediate-TermCalifornia Intermediate-Term Tax-Free Income FundFederal Intermediate-Term Tax-Free Income FundFederal Limited-Term Tax-Free Income FundNew York Intermediate-Term Tax-Free Income Fund

State-Specific

< GAIN FROM OUR PERSPECTIVE® >

VALUE BLEND GROWTH SECTOR GLOBAL INTERNAT IONAL HYBRID ASSET ALLOCAT ION F IXED INCOME TAX-FREE INCOME

© 2011 Franklin Templeton Investments. All rights reserved. 158 S 05/11

Semiannual Report and Shareholder Letter


Investment ManagerFranklin Advisory Services, LLC

DistributorFranklin Templeton Distributors, Inc.(800) DIAL BEN®/342-5236franklintempleton.com

Shareholder Services(800) 632-2301

Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus.Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.

To ensure the highest quality of service, telephone calls to or from our service departments may be monitored, recorded and accessed. These calls can be identified by the presence of a regular beeping tone.

Documents

Franklin Rising Dividends Fund Semiannual Report