Franklin Templeton Presentation

Bill Deakyne, CFA, AIF

Senior Vice President

Director of Institutional Client Service

Data as of September 30, 2014

IMPERIAL COUNTY EMPLOYEES' RETIREMENT SYSTEM | November 19, 2014

Templeton

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Source for data and information provided by Franklin Templeton Investments, as of the piece date, unless otherwise indicated.

For Financial Professional Use Only | Not For Distribution to the Public.

2900M

Topics for Discussion

Franklin Templeton Overview 3

Templeton Global Presence 4

Investment Strategy Overview 6

Templeton Philosophy 8

The Templeton Global Equity Group 9

Templeton’s Valuation-Driven Investment Process 11

Stock Examples 17

Performance and Characteristics 25

Management Profiles 35

Appendix 39

Important Information 44

TIF Foreign Equity Series

2For Financial Professional Use Only | Not For Distribution to the Public.

Topics for Discussion


Source: Franklin Templeton Investments, as of September 30, 2014 unless otherwise noted, based on latest available data. Total combined Assets Under Management (Total AUM) combines the U.S. and non-U.S. AUM of the investment

management subsidiaries of the parent company, Franklin Resources, Inc. (FRI) [NYSE: BEN], a global investment organization operating as FTI. Total and platform AUM includes discretionary and advisory accounts, including pooled

investment vehicles, separate accounts and other vehicles, as well as some accounts that may not be eligible for inclusion in composites as defined by the firm’s policies. Total and platform AUM may also include advisory accounts with or

without trading authority. In addition, assets for which certain FTI advisers provide limited asset allocation advisory services, and assets that are not allocated to FTI products are not included in the AUM figures shown.

Franklin Templeton Solutions (FT Solutions) invests in various investment platforms advised by a number of investment advisory entities within FTI. Platform AUM reported for FT Solutions therefore includes certain AUM separately

reported under each utilized investment platform. Total AUM also includes assets managed by certain FTI advisers that do not form part of the selected investment platforms shown. As a result, the combined platform AUMs may not equal

Total AUM and may be calculated and reported separately for regulatory or other purposes under each investment adviser.

Each local asset manager may be considered as an entity affiliated with or associated to FTI by virtue of being a direct or indirect wholly-owned subsidiary of FRI, an entity or joint venture in which FRI owns a partial interest, which may be

a minority interest, or a third party asset management company to which investment advisory services have been delegated by an FTI adviser.

Effective June 30, 2014, Mutual Series, Franklin Templeton Local Asset Management and Franklin Templeton Real Asset Advisors were renamed Franklin Mutual Series, Franklin Local Asset Management and Franklin

Real Asset Advisors, respectively. Please refer to the “Important Disclosures” slide for additional information.


3

Investment Platform Overview

FRANKLIN TEMPLETON INVESTMENTSTotal Combined Assets Under Management (Total AUM) : US$898.0 Billion

Franklin Equity

Group

Templeton

Emerging Markets

Group

Templeton Global

Equity Group

Franklin Mutual

Series

Franklin Templeton

Fixed Income

Group

Franklin Local

Asset Management

Franklin Real Asset

Advisors

Franklin Templeton

Solutions

Established 1947 1987 1940 1949 1970 1993 1984 1994

Focus U.S. Equity

Global Equity

International Equity

Emerging Markets Equity Global Equity


Global Equity


U.S. Equity

Distressed Debt & Merger

Arbitrage

Global Fixed Income

Regional Fixed Income

Emerging Market Debt

Global Equity & Fixed

Income

Regional Equity & Fixed

Income

Single-Country Equity &

Fixed Income

Global Private Real

Estate

Global Listed Real Estate

Securities

Global Listed

Infrastructure

Multi-Asset Strategy

Global Tactical Asset

Allocation

Custom / Advisory

Solutions - Alternative &

Traditional

Hedge Fund Portfolios

(Multi- & Single Strategy)

& Replication

Style Growth, Value,

Core/Hybrid

Core Value Core Value Deep Value Single Sector,

Multi-Sector

Multi-Sector, Single- or

Multi-Region

Multi-Sector, Multi-Region Multi-Style, Multi-Region,

Hedged

AUM US$202.7 Billion US$45.7 Billion US$125.7 Billion US$75.1 Billion US$354.9 Billion US$57.4 Billion US$4.8 Billion US$42.0 Billion

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Templeton—Global Presence

Templeton has 25 Global Equity and Emerging Markets research offices worldwide,providing on-the-ground, comprehensive research insights and contacts.

Global Equity Research OfficesEmerging Markets Research Offices

NassauBuenos Aires

Rio de Janeiro

Ft. Lauderdale

TorontoMoscow

Edinburgh

Cape Town Melbourne

Mumbai

Singapore

Warsaw Istanbul

ShanghaiSeoulHong Kong

DubaiVienna

Ho Chi Minh City

Kuala LumpurMexico CityBucharest

Bangkok


4As of September 30, 2014.


Templeton—Global Presence

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• Templeton’s investment approach is highly disciplined and maintains a keen focus on core competencies

• Since the founding of the firm in the 1940s, we have adhered to our long-term investment philosophy of finding the best bargains

• We offer strategies where the universe is large enough that we can offer an unconstrained portfolio:

– Global Equity

– Non-U.S. Equity

– Regional Equity

– Small Cap Equity

– Balanced

Templeton Global Equity Group—Focus on Core Competencies

Total AUM by MandateAs of September 30, 2014

Total AUM by Distribution ChannelAs of September 30, 2014

Non-U.S.US$42 billion

Global1US$69 billion

Other2

US$16 billion

InstitutionalUS$56 billion

RetailUS$70 billion


5

1. Global includes global balanced mandates.

2. Other includes regional and single country mandates and global and international small cap.


Templeton Global Equity Group—Focus on Core Competencies

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Percentage may not equal 100% due to rounding.

Holdings of the same issuer have been combined.


6


Fund Overv iew

NASDAQ Symbol TFEQX

Fund Inception Date October 18, 1990

Dividends Semi-annually

Investment Style International

Benchmarks MSCI All Country World ex U.S. IndexMSCI EAFE Index

Lipper Classification International Large-Cap Value

Morningstar Category™ Foreign Large Value

Total Net Assets (USD) [All Share Classes] 6,770,615,070

Number of Issuers 111

Portfolio Turnover—1 Yr (FYE December 31, 15.89%

Asset Allocation Equity: 97.67%

Cash & Cash Equivalents: 2.33%

Fund Desc r ip t ion

The fund seeks long-term capital growth by investing at least 80% of its net assets inforeign (non-U.S.) equity securities.

Portfolio Summary

TIF Foreign Equity Series - Primary Class

As of September 30, 2014

Por t fo l io Manager (s )

Cindy Sweeting, CFA United States

Antonio Docal, CFA United States

Peter Nori, CFA United States

What Are The Risks

All investments involve risks, including possible loss of principal. Special risks areassociated with foreign investing, including currency fluctuations, economic instability andpolitical developments; investments in emerging markets involve heightened risks relatedto the same factors. To the extent the Fund focuses on particular countries, regions,industries, sectors or types of investment from time to time, it may be subject to greaterrisks of adverse developments in such areas of focus than a fund that invests in a widervariety of countries, regions, industries, sectors or investments. The fund’s riskconsiderations are discussed in the prospectus.

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Templeton Global Equity Group—Value Investors Focused on Seeking Long-Term Capital Growth for Our Clients

RIGOROUS BOTTOM-UP STOCK SELECTIONeveryone an analyst in a broadly experienced research team, identifying undervalued stocks across global industries

FORTITUDE TO BE DIFFERENTconviction to purchase out-of-favor securities and patience to wait for value recognition

LONG-TERMPERSPECTIVEfive-year horizon takes advantageof short-term price volatility to reveal long-term investment opportunities

DISCIPLINED, REPEATABLE PROCESSadherence to valuation-driven philosophy and process that have navigated every market cycle over seven decades

TEMPLETON GLOBAL EQUITY GROUP

What Sets Us Apart



Templeton Global Equity Group—Value Investors Focused on Seeking Long-TermCapital Growth for Our Clients

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We Utilize a Disciplined, Consistent Approach Based on Three Timeless Principles of Investing

Value• Uncover bargains—seeking companies trading at large discounts to their

business value

• Business value—based on normalized earnings, cash flow or asset value potential

• Flexible approach in a disciplined framework

Patience• Rolling five-year time horizon focused on normalized business value

• Long-term focus takes advantage of short-term price volatility to reveal investment opportunities

• Patience allows time for value recognition and has historically resulted in low turnover

Bottom-up stock picking• Build portfolios with undervalued securities identified through research process

• Portfolio structure reflects where we are finding value across sectors and regions

• Portfolio management process seeks to buy pessimism and sell optimism

The Templeton Investment Philosophy

“The best bargains are those stocks having the lowest prices in relation to possible earning power of future years.”

—Sir John TempletonOctober 1957



The Templeton Investment Philosophy

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Experienced Team of Global Analysts

CHIEF INVESTMENT OFFICERNorman Boersma, CFA28 Years Industry ExperienceNASSAU, BAHAMAS

• 39 Portfolio Managersand Research Analysts

• Average 18 years ofindustry experience

• Average 13 years withTempleton/Speak 14 Languages

• Stable team with historically low turnover

NASSAU

5 PM/Analysts3 Analysts

FORT LAUDERDALE


EDINBURGH

1 PM/Analyst2 Analysts

SINGAPORE

1 PM/Analyst1 Analyst

MELBOURNE

1 PM/Analyst1 Analyst

HONG KONG


TORONTO


DIRECTOR OF PORTFOLIO MANAGEMENTCindy Sweeting, CFA30 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES

DIRECTOR OF RESEARCHHeather Arnold, CFA30 Years Industry ExperienceNASSAU, BAHAMAS

DIRECTOR OF BUSINESS MANAGEMENTC. Reed Hutchens, CFA25 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES


9

Investment team information is as of September 30, 2014.



Experienced Team of Global Analysts

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Bottom-Up Stock Pickers: Global Focus Uncovers the Best Opportunities Across Sectors and Geographies

ADDITIONAL RESOURCES

ResearchTechnology

Group

Global Research Library

JuniorResearchAnalysts

Performance Analysis & Investment Risk Group

GlobalTrading Platform

Product Management

Group

Templeton Emerging Markets, Templeton Global Bond & Franklin Local Asset

Management Groups

INFORMATION TECHNOLOGY

James Harper Technology Hardware & Peripherals

Matthew Nagle Electronic Manufacturing Services/Component Manufacturers

Peter Nori Semiconductor Equipment & Products

Chris Peel SoftwareSiang Khee Tan Asian Technology

Small Cap TechnologyIT Services & Consulting

Heather Waddell Consumer Electronics/Office Electronics

TELECOM SERVICES

Herbert Arnett U.S. TelecomMatthew Nagle Global Telecom EquipmentTina Sadler European Telecom, Latin

American TelecomDavid Tuttle Small Cap TelecommunicationsPeter Wilmshurst Asian, Australian Telecom

UTILITIES

Dylan Ball Asian UtilitiesSuzanne Bateman European UtilitiesMartin Cobb Small Cap Utilities Peter Moeschter European UtilitiesKatherine Owen North/South American Utilities

INDUSTRIALS

Dylan Ball Electrical EquipmentIndustrial Conglomerates

Lorraine Burns Engineering & ConstructionAlan Chua Machinery Tian Qiu Aerospace & Defense

Airlines/Air Freight & CouriersMarine/ShippingRoad & Rail/Transportation

InfrastructureTina Sadler Building & Construction MaterialsSiang Khee Tan Commercial Services & Supplies

Trading Company & Distributors Heather Waddell Small Cap Cyclicals

Small Cap Capital Goods

FINANCIALSMartin Cobb Small Cap Financial ServicesPaul de Josselin Australian Banks, Asian BanksJames Harper Life & Health Insurance

Global Property & Casualty, Multiline, Re-Insurers, Insurance Brokers

Daniel Hickey Real Estate, REITs,RE Management & Development—ex-Asia

Matthew Nagle U.S. BanksWarren Pustam Diversified Financials

Capital MarketsLatin American Banks

David Tuttle North American Thrift/Mortgage Companies

Canadian Banks/FinancialServices

Small Cap FinancialsPeter Wilmshurst European, Middle East,

African BanksJoanne Wong Real Estate, REITs,

RE Management & Development—Asia

Maggie Wong Real Estate, REITs,RE Management & Development—Asia

MATERIALS/ENERGYDylan Ball Alternative EnergySuzanne Bateman Metals & MiningMaarten Bloemen Energy E&P

Integrated Oil & RefinersMartin Cobb Small Cap ResourcesTony Docal ChemicalsLillian Li Paper & Forest Products

Containers & PackagingChris Peel Energy Equipment & ServicesTina Sadler Building & Construction MaterialsTucker Scott Metals & MiningDavid Tuttle Small Cap Resources

HEALTH CARE

Daniel Hickey Small Cap Health Care Mohan Kandiah Biotechnology

Medical Technology, Equipment & Supplies

Generic ManufacturersPeter Nori Global PharmaceuticalsKatherine Owen Providers & Services

CONSUMER

Herbert Arnett MediaInternet Software/ServicesSmall Cap Media

Norman Boersma Internet Software/ServicesAaron Browning Auto ComponentsLorraine Burns Food RetailTony Docal AutomobilesHarlan Hodes Small Cap & Asian

Consumer GoodsSmall Cap Cyclicals

Katie Kirkpatrick Hotels, Restaurants & LeisureSmall Cap Consumer Goods

Peter Moeschter Beverages/Food ProductsHousehold/Personal Products

Lisa Myers Textiles & ApparelMultiline/Drug/Specialty Retail

Katherine Owen Household Durables

Director of Research: Heather Arnold, CFA

GLOBAL SECTOR TEAMS


10

As of September 30, 2014. Note: Sector team leaders in blue boldface.



Bottom-Up Stock Pickers: Global Focus Uncovers the Best Opportunities AcrossSectors and Geographies

11

Templeton’s Valuation-Driven Investment Process


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The above chart is for illustration and discussion purposes only.1. Historical turnover is based on Templeton Global Equity Group’s overall experience, over a five-year period ended September 30, 2014, and is not intended to reflect the historical turnover of the fund. Please see the fund’s fiscal year-end turnover on the “Portfolio Summary” slide. The turnover is a byproduct of Templeton’s long-term approach to managing portfolios, but various factors, such as a portfolio’s specific investment parameters and market or economic conditions may cause actual portfolio turnover to vary. For more information regarding an individual strategy’s or fund’s historical turnover ratio please contact your Franklin Templeton representative.

Identify Potential Bargains

In-Depth Fundamental Analysis

Research Team Evaluation

Bottom-Up Portfolio Construction

Portfolio Monitoringand Risk Management

Experienced analysts

Focus on global industry sectors

Quantitative and qualitative assessment

Five-year financial forecasts

Management/supplier/competitive evaluation

Recommendation of Bargain List candidates

Presentation of investment thesis

Investment debateand critique: “Devil’s Advocate”

Director of Research approval

Investment parameters

Industry and sector framework

Build and diversify portfolio

Long-term approach: 20% historical turnover1

Ongoing valuation analysis

Disciplined sell methodology

Weekly peer review and risk analytics

54321

TEMPLETON’S BOTTOM-UP STOCK SELECTION PROCESS




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A Bottom-Up Research Process Leverages Global Capabilities Across Market Cap Spectrum

The above chart is for illustration and discussion purposes only.

Bargain List

1. Identify Potential Bargains

• Global focus

– Analysts are aligned by sectors globally

– Unconstrained investable universe

• Fundamental and quantitative assessment

– Price/Earnings

– Price/Book Value

– Price/Cash Flow• Most attractively valued

companies based on valuation

2. In-Depth Fundamental Analysis

• Develop research models

– Revenue drivers; growth potential

– Operating costs

– Capital expenditures

– Capital allocation

– Retained capital

– Competitor analysis• Five-year financial

forecasts

– Emphasis on future earnings potential

– Cash flow potential• Recommendation of

Bargain List candidates

3. Research Team Evaluation

• Presentation of investment thesis

– Valuation history

– Business outlook relative to global industry

– Why we believe business is undervalued

– Opportunities and risks

– Capital strength appraisal• Rigorous investment

team debate

– Team vetting generates best thinking

– Devil’s Advocate critique• Director of Research approval



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Lifecycle of a Templeton Stock

Templeton’s research platform is designed to track securities through their valuation lifecycle. The above chart is intended solely to illustrate the ideal interplay between the Bargain List, Core List and Source of Funds List over an anticipated holding period but there is no guarantee any Templeton stock will follow this lifecycle. The chart is hypothetical and is not intended to represent an actual Templeton portfolio, or any stock purchased or sold by Templeton.

SOURCE OF FUNDS LISTFully valued stocks recommended for sale

CORE LISTAttractively priced stocks with potential

for significant price upside

BARGAIN LISTStocks priced at a significant discount to our estimation of their future business value

VALU

ATI

ON

TIME



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The above chart is for illustration and discussion purposes only.The turnover is a byproduct of Templeton’s long-term approach to managing portfolios, but various factors, such as a portfolio’s specific investment parameters and market or economic conditions may cause actual portfolio turnoverto vary. For more information regarding an individual strategy’s or fund’s historical turnover ratio please contact your Franklin Templeton representative.Portfolio managers purchase securities from the approved Templeton database of 300–500 securities which was derived from the investable universe of approximately 10,000 equity securities. 1. Although the typical Templeton Global or Non-U.S. equity portfolio holds approximately 100 securities, individual portfolios may vary, depending on various factors, such as portfolio size or investment strategy.

Bottom-Up Portfolio Construction—Step 4

Analysts’highest-conviction holdings per sector

Historically low turnover, which may result in lower transaction costs

TEMPLETON GLOBAL OR

NON-U.S. PORTFOLIO

Approximately 100 Securities1

SELLDISCIPLINE

300–500Securities

on Proprietary Database

Approved Database

Sector Analyst Portfolios

Framework of Sector Ranges

Portfolio-SpecificFeatures

Portfolio ManagerDecisions and Oversight

Source of Funds List

Core List

Bargain List

Mandate parameters

Geographic/sector constraints

Portfolio cash flow

Consumer

Health Care

Financials

Telecom

Utilities

Materials/Energy

Industrials

Info Tech



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Portfolio Monitoring and Risk Management—Step 5

The above chart is for illustration and discussion purposes only.

Ongoing Valuation Analysis Disciplined Sell Methodology Integrated Risk Approach

Research team closely monitorsinvestment thesis and updates forecasts and recommendations:• Sector Team Meetings—Meet monthly to

review main holdings, best ideas and sector analyst portfolios, discuss sector drivers and trends, and vet potential new bargains

• Industry Reviews—Industry analysis reports and stock holdings formally reviewed twice a year by each analyst to the full investment team

• Analyst Database Reviews—All stocks under analysts’ coverage also formally reviewed on a rotating weekly schedule

Stocks placed on the Source of Funds List and sold if:• Price meets/exceeds our estimation of

full value, or• Greater value exists in another similar

security, or• Fundamental change in our

investment thesis occurs

• Stock-specific risk is addressed primarily through our research discipline and team vetting process

• Portfolio risk is managed through sector and geographic diversification and weekly peer review process

• Performance Analysis and Investment Risk (PAIR) Group separately monitors quantitative risk factors, seeking to ensure risks are recognized, rational and rewarded




17

Stock Examples


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Templeton’s Approach to Bargain Hunting Ensures We Find Many Different Types of Undervalued Stocks

Templeton Global Equity Group—Upside Potential Through Differentiated Typesof Value

In-Depth Fundamental Stock Analysis

Fortitude to be Different

Disciplined Value Philosophy

Large, Experienced Research Team Longer-Term

Perspective

RESULT—Upside Potential Through Differentiated Types of Value

RestructuringUnderappreciated Growth Micro CrisisSecular PressureCyclically DepressedMacro Crisis Victim

Patient Time Horizon

TYPES OF

VALUE

Flexible Value Approach—results in finding

many differenttypes of value



Templeton Global Equity Group—Upside Potential Through Differentiated Types ofValue

3207M

Roche Holdings Ltd—International Pharmaceutical and Diagnostics Company

Investment Process in Action—Underappreciated Growth

This is an example of a stock purchased pursuant to investment advice of the Templeton Global Equity Group (TGEG), but this stock may or may not be currently held by the fund or any portfolio managed by the TGEG. As part of TGEG’s investment process, analysts place each investment idea into one of six potential value categories. The security described here represents the largest holding in the Underappreciated Growth category as of March 31, 2014. The “Initial Analysis and Thesis” and “Initial Sources of Potential Upside/Risks” represent the opinions and analyses of the TGEG solely at the time the security was initially purchased. The “Financials/Valuation” column represents the opinions and analyses of the TGEG as of March 31, 2014. This slide is provided only to illustrate the TGEG’s investment process. This is not a complete analysis of every material fact regarding an industry or security. The actions taken with respect to this stock, and its performance, may not represent other advice or investments of the TGEG. It should not be assumed that any securities transactions were or will be profitable. The analysis and opinions of the security discussed herein may change at any time. There is no assurance that any security purchased will remain in the fund’s portfolio, or that any security sold will not be repurchased. Factual statements are from sources deemed reliable, but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or recommendations or an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund.For the fund’s top ten holdings, please refer to ”Top Ten Equity Holdings” slide. Holdings are historical and subject to change.Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement of or affiliation with Franklin Templeton Investments.

Initial Analysis and Thesis Initial Sources of Potential Upside/Risks Financials/Valuation, as of March 31, 2014

Stock De-Rated due to Uncertainty• Uncertain outlook for its lead cancer drug, Avastin, a

difficult political environment for drug companies and risk of entry of biosimilars weighed on the stock

Our Positive view was driven by• No material pending patent expirations and biosimilar risks

appeared to be overstated

• Long-term pipeline potential not reflected in stock price, in our view

Attractive Valuation• Stock and sector excessively de-rated

• Valuations didn’t seem to reflect the ability potential to continue to expand margins, grow EPS and increase dividends

Initial Scope for Recovery• We believed market was underappreciating the sales

potential of the already approved cancer products

• Company had an interesting pipeline that could impact a re-rating

Strong performance, but has further Upside potential could be driven by:• Increased recognition of depth of pipeline

• Successful introduction of new drugs to prolong existing franchises and minimize the impact of biosimilar competition

• Receding concerns on biosimilar risks

Risks• Regulatory, pricing and approval risks existed

Growing business with stable medium-term outlook, in our view• Strong cash flow generation, much of which is has

been coming back in the form of dividends

• Balance sheet at target debt levels and net cash position leaves potential to improve earnings growth via efficient capital deployment



Investment Process in Action—Underappreciated Growth

3167M

ING Group—Dutch/Belgian insurance and banking operation

Investment Process in Action—Restructuring

This is an example of a stock purchased pursuant to investment advice of the Templeton Global Equity Group (TGEG), but this stock may or may not be currently held by the fund or any portfolio managed by the TGEG. As part of TGEG’s investment process, analysts place each investment idea into one of six potential value categories. The security described here represents the largest holding in the Restructuring category as of March 31, 2014. The “Initial Analysis and Thesis” and “Initial Sources of Potential Upside/Risks” represent the opinions and analyses of the TGEG solely at the time the security was initially purchased. The “Financials/Valuation” column represents the opinions and analyses of the TGEG as of March 31, 2014. This slide is provided only to illustrate the TGEG’s investment process. This is not a complete analysis of every material fact regarding an industry or security. The actions taken with respect to this stock, and its performance, may not represent other advice or investments of the TGEG. It should not be assumed that any securities transactions were or will be profitable. The analysis and opinions of the security discussed herein may change at any time. There is no assurance that any security purchased will remain in the fund’s portfolio, or that any security sold will not be repurchased. Factual statements are from sources deemed reliable, but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or recommendations or an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund. For the fund’s top ten holdings, please refer to ”Top Ten Equity Holdings” slide. Holdings are historical and subject to change.Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement of or affiliation with Franklin Templeton Investments.


Financial crisis spurred restructuring• Following their financial crisis rescue by the Dutch

government, ING is was going through drastic restructuring imposed by the European Commission.

• Restructuring involved exiting many of their international banking markets, as well as their insurance and investment management businesses

Remaining business• The remaining business was to be a Dutch-focused bank

with significant operations in Belgium and Germany, split half retail and half wholesale

Valuation• Valuation levels did not reflect the risk/return profile of the

remaining business, in our view

Restructuring progress• ING had fully disposed of ING Direct—the world‘s

largest direct bank

• The European Commission had mandated that ING dispose of all of its life insurance businesses, as well

Unlocking value potential• We believe there was further upside potential to the

value that could be unlocked through continued disposals of non-core operations

Risks• Non-performing loans could have remained elevated

due to extended Dutch housing cycle

Generating capital• ING has already generated significant amounts of

capital from asset sales

• Adding this to the cash generative banking business and remaining assets to be sold, the company should be able to repay the remaining state aid

Discounted valuation• ING still has been trading at a discount to tangible

book value, according to our analysis, although the reduced perception of risk has led to a re-rating in the shares



Investment Process in Action—Restructuring

3172M

BNP Paribas—European commercial and investment bank

Investment Process in Action—Macro Crisis Victim

This is an example of a stock purchased pursuant to investment advice of the Templeton Global Equity Group (TGEG), but this stock may or may not be currently held by the fund or any portfolio managed by the TGEG. As part of TGEG’s investment process, analysts place each investment idea into one of six potential value categories. The security described here represents the largest holding in the Macro Crisis Victim category as of March 31, 2014. The “Initial Analysis and Thesis” and “Initial Sources of Potential Upside/Risks” represent the opinions and analyses of the TGEG solely at the time the security was initially purchased. The “Financials/Valuation” column represents the opinions and analyses of the TGEG as of March 31, 2014. This slide is provided only to illustrate the TGEG’s investment process. This is not a complete analysis of every material fact regarding an industry or security. The actions taken with respect to this stock, and its performance, may not represent other advice or investments of the TGEG. It should not be assumed that any securities transactions were or will be profitable. The analysis and opinions of the security discussed herein may change at any time. There is no assurance that any security purchased will remain in the fund’s portfolio, or that any security sold will not be repurchased. Factual statements are from sources deemed reliable, but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or recommendations or an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund. For the fund’s top ten holdings, please refer to ”Top Ten Equity Holdings” slide. Holdings are historical and subject to change.Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement of or affiliation with Franklin Templeton Investments.


Well-Positioned to Weather European Sovereign Debt Crisis, In Our View• Low exposure to structured credit and over-leveraged

economies

• It appeared to be one of the most attractively valued European banks in 2009—maintaining double digit Return on Total Equity (RoTE)

Strong Retail and Wealth Management Franchises• Continued to deliver volume growth in 4 of its 5 main retail

networks

• Wealth management business continued to produce strong returns on capital

Attractive Valuation• Depressed valuation didn‘t give credit for BNP‘s attractive

risk/return profile vs. European peers, in our view

Scope for potential recovery could be driven by:• A normalization of economic conditions in key

markets

• A lower cost to income ratio over time on their recent acquisition

• Re-rating as it deserves to trade at a premium to tangible book value given level of RoTE, in our view

Risks• Sovereign risks (Europe generally and France

specifically) had a material impact

• Changing European bank regulations created uncertainty

• Litigation and overall regulatory risk

Balance sheet has improved European Sovereign Debt Crisis• Significant decline in leverage ratio

• One of the highest Basel III Core Tier 1 ratios in Europe

• Liquidity reserves above short-term wholesale funding requirements

Trading at a discount• Litigation and regulatory impacts have been

provisioned for and priced in, in our view

• BNP has been trading at a discount to tangible book value and, given the relatively attractive risk/return profile, the bank appears undervalued



Investment Process in Action—Macro Crisis Victim

3179M

Swiss Re—World’s Largest Global Reinsurer

Investment Process in Action—Cyclically Depressed

This is an example of a stock purchased pursuant to investment advice of the Templeton Global Equity Group (TGEG), but this stock may or may not be currently held by the fund or any portfolio managed by the TGEG. As part of TGEG’s investment process, analysts place each investment idea into one of six potential value categories. The security described here represents the largest holding in the Cyclically Depressed category as of March 31, 2014. The “Initial Analysis and Thesis” and “Initial Sources of Potential Upside/Risks” represent the opinions and analyses of the TGEG solely at the time the security was initially purchased. The “Financials/Valuation” column represents the opinions and analyses of the TGEG as of March 31, 2014. This slide is provided only to illustrate the TGEG’s investment process.This is not a complete analysis of every material fact regarding an industry or security. The actions taken with respect to this stock, and its performance, may not represent other advice or investments of the TGEG. It should not be assumed that any securities transactions were or will be profitable. The analysis and opinions of the security discussed herein may change at any time. There is no assurance that any security purchased will remain in the fund’s portfolio, or that any security sold will not be repurchased. Factual statements are from sources deemed reliable, but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or recommendations or an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund. For the fund’s top ten holdings, please refer to ”Top Ten Equity Holdings” slide. Holdings are historical and subject to change.Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement of or affiliation with Franklin Templeton Investments.


Weak Property & Casualty (P&C) Pricing Market • Valuation opportunities created as P&C stocks sold off in

general flight from financials

Investment Thesis• Had a large liquid balance sheet, low leverage, book value

growth

• We felt improvement in capital discipline plus a hardening market could drive upside

• We believed this was a cheap call on an improving insurance cycle

Attractive Valuation• Valuations were significantly below historical range

Initial Scope for Recovery• Profits were ahead of expectations following low

natural catastrophe years in 2012 and 2013

• Book value growth, strong dividend yield and a focus on underwriting discipline drove re-rating

Rising interest rates• Insurance stocks have tended to do well in rising

interest rate environments as investment income is a large proportion of net income

Risks• Further pressure on natural catastrophe pricing

driven by alternative capital entering the market

Extremely Well Capitalized, In Our Opinion• One of the strongest capital positions to weather a

high natural catastrophe year

• We believed they were likely to pay another special dividend giving yield of around 10%

Valuation• Swiss Re has recovered strongly from the financial

crisis and is looking more appropriately valued according to our analysis

• Now trading at a slight premium to the 10 year average, but with a 10% (special) yield and perhaps further to go if ROE’s can improve in our opinion



Investment Process in Action—Cyclically Depressed

3187M

GlaxoSmithKline—U.K. Based Diversified Healthcare Company

Investment Process in Action—Secular Pressure

This is an example of a stock purchased pursuant to investment advice of the Templeton Global Equity Group (TGEG), but this stock may or may not be currently held by the fund or any portfolio managed by the TGEG. As part of TGEG’s investment process, analysts place each investment idea into one of six potential value categories. The security described here represents the largest holding in the Secular Pressure category as of March 31, 2014. The “Initial Analysis and Thesis” and “Initial Sources of Potential Upside/Risks” represent the opinions and analyses of the TGEG solely at the time the security was initially purchased. The “Financials/Valuation” column represents the opinions and analyses of the TGEG as of March 31, 2014. This slide is provided only to illustrate the TGEG’s investment process. This is not a complete analysis of every material fact regarding an industry or security. The actions taken with respect to this stock, and its performance, may not represent other advice or investments of the TGEG. It should not be assumed that any securities transactions were or will be profitable. The analysis and opinions of the security discussed herein may change at any time. There is no assurance that any security purchased will remain in the fund’s portfolio, or that any security sold will not be repurchased. Factual statements are from sources deemed reliable, but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or recommendations or an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund. For the fund’s top ten holdings, please refer to ”Top Ten Equity Holdings” slide. Holdings are historical and subject to change.Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement of or affiliation with Franklin Templeton Investments.


Market Pessimism Drove Health Care Stocks Down• Concerns over patent expirations and generic competition

weighed on pharmaceutical stocks

Our Positive View Was Driven By• Very little credit was given for pipeline potential

• Good quality company with strong management and great free cash flow according to our analysis

Attractive Valuation• We believed near-term challenges were priced into stock

• Traded near low-end of historical price-to-earnings range

We Felt Initial Potential Upside Could Be Driven By• Company working through patent issues and market

having more confidence in the revenue potential of the pipeline

• Cost synergies from merger

We Believed Further Potential Upside Could Be Driven By• Getting through patent cliff ahead of peers

• Limited generic competition due to higher regulatory hurdles for inhaled products

• Strong position in emerging markets in our view

Risks• Pipeline doesn’t materialize

• Fate of Advair—estimated to be 30% of EBIT

Quality Balance Sheet, In Our Opinion• Highly cash generative with a secure dividend yield

and room to buyback shares and pay down debt

• Shareholder friendly management team from our perspective



Investment Process in Action—Secular Pressure

3192M

Toyota Motor Corp.—World’s Largest Auto Manufacturer by Revenue & Profit

Investment Process in Action—Micro Crisis

This is an example of a stock purchased pursuant to investment advice of the Templeton Global Equity Group (TGEG), but this stock may or may not be currently held by the fund or any portfolio managed by the TGEG. As part of TGEG’s investment process, analysts place each investment idea into one of six potential value categories. The security described here represents the largest holding in the Micro Crisis category as of March 31, 2014. The “Initial Analysis and Thesis” and “Initial Sources of Potential Upside/Risks” represent the opinions and analyses of the TGEG solely at the time the security was initially purchased. The “Financials/Valuation” column represents the opinions and analyses of the TGEG as of March 31, 2014. This slide is provided only to illustrate the TGEG’s investment process. This is not a complete analysis of every material fact regarding an industry or security. The actions taken with respect to this stock, and its performance, may not represent other advice or investments of the TGEG. It should not be assumed that any securities transactions were or will be profitable. The analysis and opinions of the security discussed herein may change at any time. There is no assurance that any security purchased will remain in the fund’s portfolio, or that any security sold will not be repurchased. Factual statements are from sources deemed reliable, but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or recommendations or an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund. For the fund’s top ten holdings, please refer to ”Top Ten Equity Holdings” slide. Holdings are historical and subject to change.Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement of or affiliation with Franklin Templeton Investments.


Product Recall and Weak Macro Environment Presented Buying Opportunity• Weakness in U.S. auto market following large product

recall in 2009

• Weakness in global auto markets following the downturn

• Concerns over Japanese Yen volatility

Quality Company, In Our View• Had a history of quality manufacturing

• Had a strong track record of cost reductions

• Offered increasingly diverse revenue streams

Attractive Valuation• Amid the concerns, the stock fell by over 50% from its all-

time highs in early 2007

Renewed Focus on Emerging Markets & ASEAN • Focused on high growth areas with little political risks

• Growth in volume in emerging markets and market share gains in the U.S. drove rebound in production and sales

Industry Leader in terms of Volume, Quality and Technology From Our Perspective• Largest auto-maker in the world by both revenue and

profits

• Toyota and its Prius model were the unparalleled global leader in hybrid technology in our opinion

Risks• Highly geared to auto sales/consumer spending

Potential to Reach a Number of Records in the Year Ahead, In Our Opinion• Consistently increasing sales volume, revenue and

profits due to cost cutting

• Strong EPS

• Could eclipse company records set in 2008 for all measures in FY2015

Increasing Margins• The rebound in sales, combined with the company

delivering on their cost-cutting initiatives, has led to significant margin expansion

• Based on their strong track record, the company is expected to deliver on their scheduled future cost cutting



Investment Process in Action—Micro Crisis

25

Performance and Characteristics


Historical Performance



Total Annual Operating Expenses—0.80%Templeton Institutional Funds (TIF) do not have sales charges and are offered exclusively to certain institutional investors at net asset value. Individual investors purchasing shares through qualifying retirement plans,

however, may also invest at net asset value, as discussed in the Fund’s prospectus. Some plan-specific fees and charges may apply.

Returns are presented in U.S. dollars both gross and net (as applicable) of total fund operating expenses, are inclusive of commissions and transaction costs, and assume reinvestment of any dividends, interest income, capital gains, or

other earnings.

*Cumulative Total Returns



26

Average Annual Total Returns (%)

Inception Date Qtr* YTD* 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Incept

TIF Foreign Equity Series - Primary Class—Gross of Fees 10.18.1990 -5.65 -1.77 4.57 14.58 6.80 8.26 9.54

TIF Foreign Equity Series - Primary Class—Net of Fees -5.83 -2.35 3.75 13.69 5.93 7.39 8.61

MSCI All Country World ex U.S. Index -5.19 0.39 5.22 12.29 6.50 7.54 6.74

27

YTD 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

-47%

-24%

-1%

22%

45%

-2.35

0.39

19.51

15.78

18.55

17.39

-10.90 -13.33

6.70

11.60

33.63

42.14

-42.15 -45.24

18.45

17.12

29.04

27.16

13.61

17.11

21.25

21.36

TIF Foreign Equity Series - Primary Class—Net of Fees MSCI All Country World ex U.S. Index

Templeton Institutional Funds (TIF) do not have sales charges and are offered exclusively to certain institutional investors at net asset value. Individual investors purchasing shares through qualifying retirement plans,

however, may also invest at net asset value, as discussed in the Fund’s prospectus. Some plan-specific fees and charges may apply.

Returns are presented in U.S. dollars both gross and net (as applicable) of total fund operating expenses, are inclusive of commissions and transaction costs, and assume reinvestment of any dividends, interest income, capital gains, or

other earnings.





Calendar Year Returns


Utilities

Consumer Staples

Materials

Information Technology

Telecommunication Services

Consumer Discretionary

Industrials

Energy

Health Care

Financials

0% 6% 12% 18% 24% 30%

Weightings as percent of equity. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.


Sector Allocation


MSCI All Country World ex U.S. Index

Portfolio % Index % Over/Under

Financials 26.90 27.01 -0.11Banks 15.23 15.96 -0.73Insurance 8.43 5.09 3.34Diversified Financials 1.98 2.83 -0.86Real Estate 1.26 3.13 -1.86

Health Care 15.03 8.68 6.34Pharmaceuticals, Biotechnology & Life Sciences 13.64 7.65 5.99Health Care Equipment & Services 1.39 1.04 0.36

Energy 12.42 9.05 3.36Energy 12.42 9.05 3.36

Industrials 12.11 10.90 1.21Capital Goods 8.63 7.52 1.10Transportation 2.91 2.55 0.36Commercial & Professional Services 0.57 0.83 -0.25

Consum er Discretionary 10.08 10.56 -0.48Automobiles & Components 5.67 4.48 1.19Retailing 2.21 1.43 0.79Consumer Durables & Apparel 1.67 1.96 -0.28Media 0.53 1.59 -1.07Consumer Services 0.00 1.11 -1.11

Telecom m unication Services 8.65 5.34 3.31Telecommunication Services 8.65 5.34 3.31

Inform ation Technology 6.20 7.03 -0.83Technology Hardware & Equipment 3.34 3.40 -0.06Semiconductors & Semiconductor Equipment 1.61 1.53 0.09Software & Services 1.25 2.10 -0.85

Materials 5.79 8.04 -2.25Materials 5.79 8.04 -2.25

Consum er Staples 2.82 9.78 -6.96Food Beverage & Tobacco 1.44 6.63 -5.19Food & Staples Retailing 1.38 1.88 -0.51Household & Personal Products 0.00 1.26 -1.26

Util ities 0.00 3.61 -3.61Utilities 0.00 3.61 -3.61

28


vs. MSCI All Country World ex U.S. Index


2895M


Current Perspectives—Sectors

Sector Opportunities Comments

Financials MANY

European banks have restructured, stabilizing returns and increasing capital in advance of the European Central Bank’s asset quality review and stress tests. Increased focus on shareholder return could improve yield opportunities until regulatory clarity and credit demand revives. We believe Asia offers select opportunities in both mature banking markets like South Korea and Singapore and in underpenetrated, growth-oriented markets like China and India.

Health Care MANYLong-term value thesis continues to unfold. In our view, the worst of the patent cliff appears to be behind the pharmaceutical industry and companies have effectively reduced costs, improved R&D productivity and diversified revenues in ways that make them less susceptible to patent expiries. In our view, select biotech and medtech stocks offer underpriced cashflow generation with M&A and pipeline optionality.

Energy MANYYears of intensive capital expenditures (capex) negatively impacted economic returns and valuations, but oil majors are refocusing on shareholder returns and exhibiting capital discipline in anticipation of production growth from legacy capex. Value also apparent in select oil services companies with the technology and expertise to extract oil from challenging places.

Industrials SOME Select companies have benefited from restructuring post-global financial crisis. Investors can gain exposure to global growth at what we consider less demanding valuations than those found in other cyclical sectors.

Consumer Discretionary SOME Fuller valuations in the sector have recently led us to sell holdings and redirect proceeds toward areas that we believe offer more attractive longer-

term value. Some valuation opportunities in retail and automotive stocks following recent weakness.

Telecom Services SOME

High dividend yields and cheap valuations have thus far failed to prompt wider value recognition. Improving regulatory environment and nascent industry consolidation in Europe could create more rational economics, though we remain conservative in our forecasts. Select opportunities also in Asian telcos with what we consider undervalued growth prospects.

Information Technology SOME While we remain constructive on our technology holdings, the sector overall has become more fully valued based on our analysis and we have

selectively reduced exposure in recent quarters.

Materials FEWPoor cost discipline among mining firms has resulted in overcapacity and margin pressure. As the commodities supercycle wanes, select opportunities appearing among companies in beaten-down emerging markets. Some potential opportunities evident in chemicals and construction materials firms that have cut costs and removed capacity to bolster fundamentals.

Consumer Staples FEW Sector credited for defensive revenue streams and emerging market exposure, but, we believe expensive valuations fail to discount the operational

challenges facing retailers in a more commoditized industry subject to intense cost pressures.

Utilities FEW In our view, broadly expensive considering the potential impacts of weaker economic growth and increasing regulatory interference on power demand and industry pricing. Oversupply concerns in developed markets.


29

All statements are opinions only and are expressed as of the publication date and are subject to change without prior notice. This is not a complete analysis of any industry, sector or region and should not be construed as an investment

recommendation or advice.


Current Perspectives—Sectors

Australia/New Zealand

Latin America/Caribbean

Mid-East/Africa

North America

Asia

Europe

0% 14% 28% 42% 56% 70%




30

Emerging markets exposure is based on the countries included in the MSCI Emerging Markets Index.

Weightings as percent of equity. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.


Portfolio % Index % Over/Under

Europe 66.91 48.91 18.00United Kingdom 18.71 15.07 3.64Germany 10.95 6.22 4.73France 10.58 7.00 3.58Switzerland 6.96 6.51 0.46Netherlands 6.71 1.93 4.78Italy 3.75 1.79 1.97Norway 2.96 0.60 2.36Spain 2.19 2.56 -0.38Sweden 1.33 2.16 -0.83Other 2.78 5.08 -2.30

Asia 27.80 31.71 -3.91China 7.40 4.17 3.23South Korea 6.31 3.25 3.05Japan 5.62 14.84 -9.21Hong Kong 3.31 2.06 1.24Singapore 3.12 1.06 2.06Taiwan 0.75 2.59 -1.84Other 1.29 3.74 -2.45

North Am erica 2.76 7.61 -4.86Canada 1.50 7.61 -6.11United States 1.25 0.00 1.25

Mid-East/Africa 1.46 2.32 -0.86Israel 1.46 0.39 1.07Other 0.00 1.93 -1.93

Latin Am erica/Caribbean 1.08 4.04 -2.96Brazil 1.08 2.23 -1.15Other 0.00 1.81 -1.81

Australia/New Zealand 0.00 5.41 -5.41Australia 0.00 5.32 -5.32New Zealand 0.00 0.09 -0.09

Em erging Markets Exposure 17.80 21.26 -3.47


Geographic Allocation


MSCI All Country World ex U.S. Index

Generally, stocks in Europe appear cheap to us, corporate earnings are depressed and policymakers have retained plenty of dry powder. We are cautiously optimistic about the outlook for credit growth in coming quarters as euro bank deleveraging comes to an end. We are closely monitoring political developments as reforms need to be implemented in the key economies of France and Italy. Elsewhere, some reform progress has been made. We believe high operating leverage should amplify any eventual earnings recovery in the corporate sector. Improving demand from the U.S. and a weaker euro could further buoy earnings in the export-oriented eurozone. Russia is unpredictable, but confidence may return if the situationde-escalates.

As bottom-up global stock-pickers, we will continue to take a measured and selective approach to these diverse markets, striving to capitalize on long-term valuation opportunities and anomalies as they arise. Specific risks across diverse markets to consider, but isolated values have begun to emerge amid recent volatility and our allocation to these regions has consequently increased.

Strong secular economic growth rates in many Asian markets could, over time, feed into higher corporate earnings and equity valuations. Our fundamentally driven stock-by-stock analysis has continued to identify a number of what we consider to be attractive long-term investment opportunities, though we are cognizant of cyclical pressures and slowing economic growth.

While the jury is still out on the ultimate efficacy of Abenomics, our main concern is that reform stops shy of the real structural changes needed for corporate Japan to gain competitiveness, improve profitability and overcome the country’s daunting debt and demographic challenges. We remain cautious and selective, with exposure primarily to well-positioned exporters.

Limited value opportunities.

2896M


Current Perspectives—Regions

Region Opportunities Comments

Europe MANY

EmergingMarkets SOME

Asia ex-Japan SOME

Japan FEW

Australia FEW


31

All statements are opinions only and are expressed as of the publication date and are subject to change without prior notice. This is not a complete analysis of any industry, sector or region and should not be construed as an investment

recommendation or advice.


Current Perspectives—Regions


32Past performance does not guarantee future results. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

Source: FactSet. Data is calculated as a percentage of total including cash and cash equivalents but excluding fixed income. Total Effect represents the opportunity cost of investment decisions in a group relative to the overall benchmark.

Performance Attribution by Sector



October 1, 2013-September 30, 2014

Portfo l io Index Attr ibution EffectsAverage

WeightTotal

ReturnAverage

WeightTotal

ReturnAl location

EffectSelection

EffectT otal

Effect

Financials 25.42 12.38 26.86 4.99 0.00 1.80 1.79

Materials 5.61 2.45 8.56 -3.61 0.22 0.35 0.57

Health Care 13.40 17.54 8.08 21.04 0.79 -0.40 0.39

Telecommunication Services 8.27 6.97 5.46 7.52 0.06 -0.13 -0.07

Consumer Staples 2.71 -9.75 9.90 2.63 0.19 -0.38 -0.20

Utilities 0.09 -7.55 3.47 10.94 -0.20 -0.04 -0.24

Energy 11.84 2.37 9.23 4.49 -0.01 -0.27 -0.28

Industrials 13.15 0.59 11.03 3.12 -0.06 -0.26 -0.32

Consumer Discretionary 9.25 -9.13 10.72 -0.43 0.06 -0.87 -0.82

Information Technology 6.42 -3.61 6.70 12.81 -0.02 -0.99 -1.01

Information Technology

Consumer Discretionary

Industrials

Energy

Utilities

Consumer Staples

Telecommunication Services

Health Care

Materials

Financials

-2.0 0.0 2.0

Total Effect (%)

-1.01

-0.82

-0.32

-0.28

-0.24

-0.20

-0.07

0.39

0.57

1.79


33

United Kingdom

Canada

South Korea

Netherlands

Sweden

Japan

Australia

Italy

Norway

China

-1.0 0.0 1.0

Total Effect (%)

-0.92

-0.86

-0.46

-0.45

-0.29

0.28

0.29

0.46

0.47

0.61




Past performance does not guarantee future results. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.


Portfo l io Index Attr ibution EffectsAverage

WeightTotal

ReturnAverage

WeightTotal

ReturnAl location

EffectSelection

EffectT otal

Effect

China 4.13 13.00 3.94 4.96 0.09 0.53 0.61

Norway 3.43 21.49 0.57 13.47 0.22 0.25 0.47

Italy 3.73 25.23 1.64 19.63 0.28 0.18 0.46

Australia - - 5.60 -0.48 0.29 0.00 0.29

Japan 5.19 -0.93 14.60 0.93 0.42 -0.14 0.28

Sweden 1.40 -16.77 2.23 1.92 0.02 -0.31 -0.29

Netherlands 7.55 -2.33 1.99 4.39 -0.03 -0.42 -0.45

South Korea 5.31 -5.21 3.31 0.62 -0.12 -0.34 -0.46

Canada 1.57 -19.97 7.24 11.82 -0.33 -0.53 -0.86

United Kingdom 18.41 0.20 15.13 6.24 0.07 -1.00 -0.92

Performance Attribution by Country


34

TNT Express NV

Serco Group plc

Talisman Energy Inc.

Getinge AB

Samsung Electronics Co. Ltd.

Teva Pharmaceutical Industries Limited

ING Groep NV

Aviva plc

*Algeta ASA

Intesa Sanpaolo S.p.A.

-1.0 0.0 1.0

Total Effect (%)

-0.33

-0.30

-0.28

-0.28

-0.25

0.26

0.28

0.33

0.34

0.36

Past performance does not guarantee future results. Holdings of the same issuer have been combined. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.


The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the holdings list.

*Security not held in the portfolio at the end of the reporting period.

Performance Attribution by Security




Portfo l io IndexAverage

WeightTotal

ReturnAverage

WeightTotal

ReturnT otal

Effect

Intesa Sanpaolo S.p.A. 1.03 50.56 0.19 50.92 0.36

*Algeta ASA 0.41 55.96 - - 0.34

Aviva plc 1.49 36.42 0.13 36.42 0.33

ING Groep NV 1.75 26.38 0.28 26.39 0.28

Teva Pharmaceutical Industries Limited 0.95 49.23 0.22 47.43 0.26

Samsung Electronics Co. Ltd. 2.18 -10.89 0.88 -9.02 -0.25

Getinge AB 0.78 -27.71 0.03 -27.71 -0.28

Talisman Energy Inc. 0.96 -22.64 0.06 -22.64 -0.28

Serco Group plc 0.46 -34.33 0.01 -28.39 -0.30

TNT Express NV 0.95 -29.84 0.02 -29.84 -0.33


Holdings of the same issuer have been combined, unless otherwise noted. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

The information provided is not a recommendation to purchase, sell, or hold any particular security. The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be

included.


35

Nam e of Issuer Country Industry % of T otal

1. ROCHE HOLDING AG Switzerland Pharmaceuticals, Biotechnology & Life Sciences 2.45

2. SANOFI France Pharmaceuticals, Biotechnology & Life Sciences 2.20

3. SAMSUNG ELECTRONICS CO LTD South Korea Technology Hardware & Equipment 2.11

4. BAYER AG Germany Pharmaceuticals, Biotechnology & Life Sciences 1.98

5. ING GROEP NV Netherlands Banks 1.86

6. BNP PARIBAS SA France Banks 1.85

7. TELENOR ASA Norway Telecommunication Services 1.68

8. GLAXOSMITHKLINE PLC United Kingdom Pharmaceuticals, Biotechnology & Life Sciences 1.67

9. ROYAL DUTCH SHELL United Kingdom Energy 1.66

10. TOTAL SA France Energy 1.61

Total 19.05



Top Ten Equity Holdings

Market Capital ization(Mi l l ions USD) Portfolio Benchmark

Weighted Average 62,999 49,738

Median 26,706 7,018

Max 251,663 255,325

Min 1,753 747


The portfolio characteristics listed are based on the Fund's underlying holdings, and do not necessarily reflect the Fund's characteristics. Due to data limitations all equity holdings are assumed to be the primary equity issue (usually the

ordinary or common shares) of each security's issuing company. This methodology may cause small differences between the portfolio's reported characteristics and the portfolio's actual characteristics. In practice, Franklin Templeton's

portfolio managers invest in the class or type of security which they believe is most appropriate at the time of purchase. The market capitalization figures for both the portfolio and the benchmark are at the security level, not aggregated up

to the main issuer. The dividend yield quoted here is the yield on securities within the Fund's portfolio and should not be used as an indication of the income received from this portfolio. Information is historical and

may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

Source: FactSet. For the portfolio, the Price to Earnings, Price to Cash Flow, and Price to Book Value calculations for the weighted average use harmonic means. Values less than 0.01 (i.e., negative values) are excluded and values in

excess of 200x are capped at 200x. Yields above 100% are also excluded. For the benchmark (if applicable), no limits are applied to these ratios in keeping with the benchmark's calculation methodology. Market capitalization statistics are

indicated in the base currency for the portfolio presented.

36

Portfolio Characteristics

Dividend Yield Portfolio Benchmark

Weighted Average 2.94% 2.97%

Median 2.88% 2.29%

Price to Cash Flow Portfolio Benchmark

Weighted Average 6.74x 8.63x

Median 8.23x 10.69x

Price to Earnings Portfolio Benchmark


Median 14.64x 17.11x

Price to Book Value Portfolio Benchmark


Median 1.39x 1.76x




Market Capital izationBreakdown in USD Portfolio

1.5-5.0 Billion 4.05%

5.0-25.0 Billion 30.66%

25.0-50.0 Billion 24.24%

>50.0 Billion 39.42%

N/A 1.61%

2890M

Templeton Global Equity Group—Value Investors Focused on Seeking Long-Term Capital Growth for Our Clients

RIGOROUS BOTTOM-UP STOCK SELECTIONeveryone an analyst in a broadly experienced research team, identifying undervalued stocks across global industries

FORTITUDE TO BE DIFFERENTconviction to purchase out-of-favor securities and patience to wait for value recognition

LONG-TERMPERSPECTIVEfive-year horizon takes advantageof short-term price volatility to reveal long-term investment opportunities

DISCIPLINED, REPEATABLE PROCESSadherence to valuation-driven philosophy and process that have navigated every market cycle over seven decades


What Sets Us Apart



Templeton Global Equity Group—Value Investors Focused on Seeking Long-TermCapital Growth for Our Clients

38

Management Profiles


CINDY L. SWEETING, CFAPresident, Templeton Investment Counsel, LLCDirector of Portfolio ManagementTempleton Global Equity GroupFort Lauderdale, Florida, United States

Cindy Sweeting is the president of Templeton Investment Counsel, LLC and the director of portfolio management for the Templeton Global Equity Group (TGEG). Ms. Sweeting has lead portfolio manager responsibility for the TIF-Foreign Equity Series and portfolio management responsibility for a number of other institutional commingled funds and separate account relationships. She also oversees the institutional segment of TGEG's global investment management business.

She previously served as TGEG's director of research, president of Templeton Global Advisors Limited and lead portfolio manager for Templeton Growth Fundand Templeton Growth (Euro) Fund.

Prior to joining Templeton in 1997, Ms. Sweeting was the senior vice president of investments with McDermott International Investments. She entered the financial services industry in 1983.

Ms. Sweeting holds a B.S. in business administration with a concentration in finance, summa cum laude, from Georgetown University. She is a Chartered Financial Analyst (CFA) Charterholder.


Management Profile


39

ANTONIO T. DOCAL, CFAExecutive Vice PresidentPortfolio Manager, Research AnalystTempleton Global Equity GroupTempleton Investment Counsel, LLCFort Lauderdale, Florida, United States

Antonio T. Docal is an executive vice president and portfolio manager for the Templeton Global Equity Group with research responsibility for the global chemical and automobile industries.

Prior to joining Franklin Templeton in 2001, Mr. Docal was a vice president and director at Evergreen Funds, a principal and co-founder of Docal Associates, and an assistant treasurer in the mergers and acquisitions department at JPMorgan. He entered the financial services industry in 1979.

Mr. Docal holds a B.A. in economics from Trinity College in Connecticut and an M.B.A. with concentrations in finance and international management from the Sloan School of Management at the Massachusetts Institute of Technology. He is a Chartered Financial Analyst (CFA) Charterholder.



40

Management Profile

PETER A. NORI, CFAExecutive Vice PresidentPortfolio Manager, Research AnalystTempleton Global Equity GroupTempleton Investment Counsel, LLCFort Lauderdale, Florida, United States

Peter A. Nori is an executive vice president and portfolio manager for the Templeton Global Equity Group with research responsibility for the global semiconductor and the global pharmaceutical industries and is the information technology sector team leader. In addition, he manages several institutional andsub-advised portfolios.

After joining Franklin Templeton in 1987 as a shareholder services representative, Mr. Nori entered the management training program. He later joined the Research Department as an equity analyst and a co-portfolio manager of Franklin Convertible Securities Fund. After joining Templeton's Global Equity Research Team, he specialized in small-capitalization securities on a global basis. Mr. Nori's large-capitalization research responsibilities have included industries within the consumer discretionary, health care, metals and technology sectors. He entered the financial services industry in 1987.

Mr. Nori holds a B.S. in finance and an M.B.A., with an emphasis in finance, from the University of San Francisco. He is a Chartered Financial Analyst (CFA) Charterholder and a member of CFA Institute.



41

Management Profile

BILL DEAKYNE, CFA, AIFSenior Vice PresidentDirector of Institutional Client RelationsFranklin Templeton InstitutionalFranklin Templeton Institutional, LLCSan Mateo, California, United States

Bill Deakyne is a senior vice president, who joined Franklin Templeton Investments in 1998. Mr. Deakyne is the director of Institutional Client Relations and is responsible for leading a team of relationship managers that service our institutional clients.

Prior to his current role, Mr. Deakyne was a platform business developer for Franklin Templeton Institutional's defined contribution investment only division. He also previously worked in Franklin Templeton's wrap separate account group serving as the director of product management and director of marketing. Prior to joining Franklin Templeton, he was a financial analyst with Paul Kagan Associates in Carmel, California.

Mr. Deakyne earned a B.S. in commerce with a concentration in finance from the University of Virginia and an M.B.A. in international management from the American Graduate School of International Management (Thunderbird). He is a Chartered Financial Analyst (CFA) Charterholder, an Accredited Investment Fiduciary (AIF), and holds FINRA Series 7, 24, 63 and 3 licenses. Mr. Deakyne is a member of the CFA Society of San Francisco and the CFA Institute. He is also the co-author of a chapter on international equity investing featured in "The World of Money Management: America's Leading Experts Share Their Views on Investment Management and the Value of Consulting."



42

Management Profile

43

Appendix


2894M

Collaboration with Financial Experts Across Franklin Templeton

• Global Bond Group–expertise onmacroeconomic and currency trends

• Templeton Emerging Markets andFranklin Local Asset Managementteams–perspective and insights onlocal business conditions andeconomic and political risks

Local Asset Management

Analysts and Portfolio Managers in 14 Locations

Fixed IncomeAnalysts and Portfolio Managers in 13 Locations

Emerging MarketsAnalysts and Portfolio Managers in 18 Locations

TEMPLETON GLOBAL EQUITY39 Analysts, Portfolio Managers

Risk Management Professionals

18 Locations


44As of September 30, 2014.


Collaboration with Financial Experts Across Franklin Templeton

2898M

Templeton maintains a robust, multi-faceted risk management process throughout its organizational structure.

Levels of Risk Management:

Risk Management—Templeton Global Equity Group

Recognized

Identify and understand risk at the security, portfolio and operational level

Rational

Affirm that identified risks are an intended and rational part of portfolio strategy

Rewarded

Verify that every risk provides the potential for a commensurate long-term reward

Templeton Philosophy and ProcessTempleton applies a long-term, bottom-up, value investment philosophy• Long-term view allows us to use volatility to our advantage over a secular

investment horizon• Rigorous, bottom-up analysis determines normalized business value• Search for significant valuation discount to help reduce downside risk

Equally important is the process by which Templeton’s philosophy is implemented• Analysts bring their best ideas to our global investment team• Pre-mortem “devil’s advocate” exercise attempts to identify potential flaws in

the thesis• Portfolios are diversified in an effort to help reduce stock-specific risk

• Frequent communication ensures portfolios reflect convictions

Core: Templeton Global Equity Group (GEG)

Dedicated Risk Review Corporate Risk Committees• Performance Analysis and Investment Risk (PAIR)

Group separately monitors quantitative risk factors• Leverages sophisticated risk and performance software• Prepares regular compliance and risk recommendations• Key objective is alignment of investment risks and research

convictions

• The Complex Securities Review Committee helps PMsunderstand the risks associated with more esoteric securities

• The Counterparty Credit Committee (CCC) assesses risksposed by banks and brokers that act as our trading partners

• These two Franklin Templeton committees that assess andmanage portfolio risk have been in place since before themost recent Global Financial Crisis

Complementary: Performance Analysis and Investment Risk (PAIR) Complementary: Franklin Templeton (FT)

Three Rs: At Franklin Templeton, Goal Is that Risk Should Be:

CorporateRisk

Committees (FT) Dedicated Risk Review

(PAIR)Templeton

Philosophy & Process (GEG)



Risk Management—Templeton Global Equity Group

2899M

Trade Execution and Implementation• Integrating trading and overlaying informed execution on top of investment decisions may provide opportunities for

increased investment performance by maximizing market insight, relationships, trading strategies and technologies

An Integrated Global Trading Platform

GLOBAL TRADINGPLATFORM

IMPLEMENTATION

AND

EXECUTION

Present trading ideas and strategies

Suggest timing and manage liquidity

Filter and present potentially opportunistic information

Actively seek to reduce trading costs

Seek to decrease impact and opportunity costs of trading

Coordinate and foster collaboration

Manage and seek to optimize commissions

Understand the daily market dynamics



An Integrated Global Trading Platform



47

Performance Risk Statistics


*Annualized.


Performance Risk Statistics1 Yr 3 Yrs* 5 Yrs* 10 Yrs*

Standard Deviation:

TIF Foreign Equity Series - Primary Class 9.59 14.41 16.89 18.42

MSCI All Country World ex-US Index 9.56 14.12 16.29 18.85

Tracking Error 3.25 3.84 3.66 3.89

Information Ratio -0.45 0.36 -0.16 -0.04

Alpha -1.11 1.50 -0.53 0.10

Beta 0.95 0.98 1.01 0.96

Sharpe Ratio 0.39 0.95 0.35 0.32

R-Squared 88.82 92.94 95.31 95.74

48

Important Information


Important Disclosures



49

Franklin Templeton Distributors, Inc.

© 2014 Franklin Templeton Investments. All rights reserved.

Indexes are unmanaged and one cannot invest directly in an index.


All MSCI data is provided “as is.” The Fund described herein is not sponsored or endorsed by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind

in connection with the MSCI data or the Fund described herein. Copying or redistributing the MSCI data is strictly prohibited.

Additional Information for Investment Platform Overview Slide:

Franklin Equity Group, a unit of Franklin, combines the expertise of the Franklin Advisers, Inc., and Fiduciary Global Advisors equity teams (with origin dating back to 1947 and 1931,

respectively). Franklin Templeton Fixed Income Group, a unit of Franklin, combines the expertise of the Franklin Advisers, Inc., and Fiduciary Trust Company International fixed income teams

(originating in 1970 and 1973, respectively). Franklin Real Asset Advisors originated in 1984 as the global real estate team of Fiduciary Trust Company International. Franklin Templeton

Solutions (formerly Franklin Templeton Multi-Asset Strategies prior to December 31, 2013) is a global investment management group dedicated to multi-strategy solutions and is comprised of

individuals representing various registered investment advisory entity subsidiaries of Franklin Resources, Inc., a global investment organization operating as Franklin Templeton Investments

(FTI). Certain individuals advise Franklin Templeton Solutions (FT Solutions) mandates through K2 Advisors L.L.C. (“K2”), an FTI adviser that forms part of an investment group founded in 1994

through existing advisory entities or their predecessors. FT Solutions originated in 2007 to combine the research and oversight of the multi-strategy investment solutions offered by FTI. Franklin

Templeton Investments acquired a majority interest in K2 Advisors Holdings, LLC on November 1, 2012. Effective June 30, 2014, Mutual Series, Franklin Templeton Local Asset Management

and Franklin Templeton Real Asset Advisors were renamed Franklin Mutual Series, Franklin Local Asset Management and Franklin Real Asset Advisors, respectively.

TIF institutional funds do not have sales charges and are offered to certain eligible investors, such as qualifying employee benefit plans and qualifying institutional investors exercising exclusive

or shared discretionary investment authority for funds held in fiduciary, agency, advisory, custodial or similar capacity.

Documents

Franklin Templeton Presentation