Templeton Global Income Fund

Franklin Templeton Investment Funds

Templeton Global Income Fund - A (acc) USD

Templeton Global Equity Group

Data as of 30 June 2019

For professional investor use only. Not for distribution to retail investors.

Templeton Global Income Fund

2


Table of Contents

Investment Capabilities Overview............................................................................................4

Franklin Templeton—A Trusted, Long-Term Partner in Investment Management.......................5

Extensive Global Presence......................................................................................................6

Cornerstones..........................................................................................................................7

Why Templeton Global Income Fund?.....................................................................................8

Team Overview.......................................................................................................................9

A Unique Asset Allocation Process........................................................................................10

Historical Asset Allocation.....................................................................................................11

Templeton’s Investment Philosophy.......................................................................................12

Templeton Global Equity Group Organisational Structure.......................................................13

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover Investment Opportunities

Across Regions

............ 14

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover the Best Opportunities

Across Sectors and Geographies

................ 15

Templeton’s Valuation-Driven Investment Process.................................................................16

ESG Assessments—Case Studies........................................................................................19

Templeton Global Macro ESG Index Centers Around 13 Indicators........................................ 20

Investment Process.............................................................................................................. 21

Portfolio Construction............................................................................................................22

Investment Risk Management at Franklin Templeton.............................................................23

Summary..............................................................................................................................24

What are the Key Risks?......................................................................................................25


Geographic Allocation—Total................................................................................................27

Geographic Allocation—Equity..............................................................................................28

Geographic Allocation—Fixed Income................................................................................... 29

Sector Allocation—Equity......................................................................................................30

Sector Allocation—Fixed Income...........................................................................................31

Currency Exposure—Fixed Income........................................................................................32

Credit Quality Allocation—Fixed Income................................................................................33

Top Ten Holdings—Equity.....................................................................................................34

Portfolio Characteristics—Total............................................................................................. 35

Discrete Performance........................................................................................................... 36

Historical Performance..........................................................................................................37

Calendar Year Returns......................................................................................................... 38

Performance Risk Statistics.................................................................................................. 39

Total Portfolio Yields.............................................................................................................40


Appendix............................................................................................................42


3

Table of Contents (continued)


Franklin Templeton—ESG and Corporate Sustainability.........................................................43

Franklin Templeton—Environmental, Social and Governance (ESG) Investment

Integration

....................44

Management Profile..............................................................................................................45

Glossary...............................................................................................................................49

Important Disclosures...........................................................................................................51

Source: Franklin Templeton Investments (FTI), as of 30 June 2019, based on latest available data. Total combined Assets Under Management (Total AUM) combines 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 management organisation operating as FTI. Only selected business entities within FTI claim compliance with the GIPS standards as described in the table of contents if

applicable. Total and platform AUM includes discretionary and non-discretionary accounts, including pooled investment vehicles, separate accounts and other vehicles. 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 Multi-Asset Solutions may

invest in various investment platforms advised by a number of investment advisory entities within FTI. Platform AUM reported for FT Multi-Asset Solutions therefore may include certain AUM separately reported under each utilised 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.


4


Investment Capabilities Overview

FRANKLIN TEMPLETON

Total Combined Assets Under Management: US$715.2 Billion

2

Equity

5

Fixed Income

8

Multi-Asset Solutions

11

Alternatives

AUM

US$289.2 Billion US$269.8 Billion US$116.0 Billion US$42.2 Billion

CAPABILITIES

•

Value

•

Government

•

Multi-Asset Income

•

Commodities

•

Deep Value

•

Municipals

•

Diversified Outcome-Oriented

•

Infrastructure

•

Core Value

•

Corporate Credit

•

Risk Premia

•

Real Estate

•

Blend

•

Bank Loans

•

Smart Beta

•

Hedge Funds

•

GARP

•

Securitised

•

Balanced Allocation

•

Private Equity

•

Growth

•

Multi-Sector

•

Target Date/Risk

•

Private Debt

•

Convertibles

•

Currencies

•

Model Portfolios

•

Sector

•

Sukuk

•

Inflation Protection

•

Shariah

•

Managed Volatility

•

Smart Beta

INVESTMENT

•

Templeton Global Equity Group (1940)

•

Franklin Templeton Fixed Income Group (1970)

•

Franklin Templeton Multi-Asset Solutions (1948)

•

Franklin Real Asset Advisors (1984)

TEAMS

•

Franklin Equity Group (1947)

•

Templeton Global Macro (1986)

•

Franklin Systematic (2011)

•

Darby Overseas Investments (1994)

•

Franklin Mutual Series (1949)

•

Franklin LAM-Fixed Income (1993)

•

K2 Advisors (1994)

• Franklin Templeton Emerging Markets Equity (1987) •

Pelagos (2005)

•

Franklin LAM-Developed Markets Equity (1993)

•

Benefit Street Partners (2008)

•

Edinburgh Partners (2003)

Franklin Templeton—A Trusted, Long-Term Partner in Investment Management

Investment excellence• Diverse investment solutions across multiple asset classes• Time-tested investment disciplines plus exceptional research enables strong long-term performance

potential• Integrated, comprehensive and proven approach to investment risk management• Committed to environmental, social and governance (ESG) investment integration

Global perspective, local expertise• Pioneer in global investing, with track record of innovation • Unmatched breadth and depth of global presence• Deep experience and long-term commitment to the markets we enter

Strength and experience• Over 70 years of navigating well through all market cycles• Global business diversified by investment objective, geography and client type• Values-driven culture guides how we work

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5


Franklin Templeton—A Trusted, Long-Term Partner in Investment Management

Extensive Global Presence

0719

10 Global Fixed Income, Global Macro and Global Equity offices and more than 160 investment professionals.

Nassau

Ft. Lauderdale

New York Edinburgh

Melbourne

Hong Kong

San Mateo Toronto London

Global Fixed Income OfficesTempleton Global Equity Research OfficesTempleton Global Macro Research Offices

Singapore


6

As of 31 March 2019.


Extensive Global Presence

Global Perspective

Our global research analysts conduct fundamental research in equity and fixed income around the globe. With analysts on the ground in our local asset management offices, our local contacts and access enable the team to develop unfettered views which underlie our investment decision-making process.

Long-Term Value

Global equity and fixed income analysts search the globe for the best values in both asset classes.

Investment Strategy

Fixed Income • Utilise fundamental, macro-driven research to identify potential sources of total return (current income and capital appreciation)

worldwide

• Identify economic imbalances that may lead to value opportunities in interest rates (duration), currencies, sovereign credit andcorporate/spread sectors

Equity • Markets are often short-sighted and affected by sentiment, which creates short-term distortions in share prices

• Comprehensive, rigorous bottom-up analysis with long-term focus allows us to look beyond short-term noise and identify the fundamental value of a stock

Cornerstones

0720


7


Cornerstones

Why Templeton Global Income Fund?

Income and Capital Appreciation• Long-term, fundamental research

• Focus on sustainable global income and capital appreciation opportunities

Flexible and Opportunistic• Flexibility to allocate across regions, countries, asset classes and sectors

• Actively managed to precisely isolate desired exposures

Potential for Lower Overall Risk Through Diversification• Truly global approach to investing

• Focus on companies with low valuations, high free cash flow and sustainable dividends

• Identify economic imbalances leading to value in interest rates (duration), currencies, sovereign credit and corporate/spreadsectors

Global Expertise• Recognised pioneer in global investing

• Collaborative investment approach facilitates knowledge sharing

0728


8


Why Templeton Global Income Fund?

Team Overview

TEMPLETON GLOBAL INCOME FUND

Asset Allocation Committee

Heather Arnold, CFANorman Boersma, CFA

Michael Hasenstab, Ph.D.

Templeton Global Equity Group Franklin Templeton Fixed Income Teams

Day-to-Day Fund Management Team Heather Arnold, CFA, Portfolio Manager Michael Hasenstab, Ph.D., Portfolio Manager

33 investment professionals¹Average of 21 years investment experience

Average of 16 years tenure with firm

Templeton Global Macro: 20 investment professionals¹Additional Resources: over 150 investment professionals¹

Average of 17 years investment experienceAverage of 11 years tenure with firm

Focus Equity Component Fixed Income Component

As of 31 June 2019.1. Investment professionals include portfolio managers, analysts and traders.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

0726


9


Team Overview

Asset Allocation Process

FRANKLIN TEMPLETON FIXED INCOME

TEMPLETON GLOBAL EQUITY GROUP

ASSET ALLOCATION EQUITY% BONDS% CASH

STEP 1VALUATION

STEP 2MACRO-ECONOMIC

ANALYSIS

STEP 3RETURN ANALYSIS

STEP 4RISK ANALYSIS

STEP 5YIELD ANALYSIS

Absolute Valuations• Equity–P/E, P/BV, FCF yield, Leverage, ROE, CFROI, etc.• Fixed Income–credit spreads, interest rate valuations, currenciesRelative Valuations• 10–yr bond yields vs. equity yields, FCF yields• Junk bond yields vs. equity yields, FCF yields

What is impacting equity markets? Fixed income markets? E.g., interest rates, monetary policy, fiscal policy, inflation

What are the return expectations for equities? Fixed Income?

Risk team provides input; e.g., equity market volatility, country risk, interest rate risk

How do equity yields compare with fixed income yields?

This is a basic framework—it is not exhaustive

Science+

Art

2945


10


A Unique Asset Allocation Process

Templeton Global Income FundAs of 30 June 2019—Market Value

The information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Market value figures reflect the trading value of the investments. Portfolio breakdown percentages may not total100% and may be negative due to rounding, use of any derivatives, unsettled trades or other factors.Source: Franklin Templeton Investments.

Historical Asset Allocation

2960

20%

30%

40%

50%

60%

70%

80%

Equity Fixed Income + Cash & Cash Equivalents


11



We Utilise a Disciplined, Consistent ApproachBased on Three Timeless Principles of Investing

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

business value

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

• Flexible approach in a disciplined framework

Patience• Rolling five-year time horizon focused on normalised 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

2880

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

—Sir John TempletonOctober 1957

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

—Sir John TempletonOctober 1957


12


Templeton’s Investment Philosophy

Investment team information is as of 1 July 2019.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Templeton Global Equity Group Organisational Structure

2881

CHAIRMANDr. Sandy Nairn, CFA34 Years Industry ExperienceEDINBURGH, UNITED KINGDOM

CHIEF INVESTMENT OFFICERNorman Boersma, CFA33 Years Industry ExperienceNASSAU, BAHAMAS

DIRECTOR OF RESEARCH

Heather Arnold, CFA35 Years Industry ExperienceNASSAU, BAHAMAS

33 Portfolio Managers & Research Analysts

Average 16 Years with TempletonSpeak 13 Languages

Average 21 Years of Industry Experience

Stable Team/Historically Low Turnover

North America16 PM/Analysts

4 Analysts

Europe2 PM/Analysts

2 AnalystsAsia

3 PM/Analysts3 Analysts

Australia2 PM/Analysts

1 Analyst

DIRECTOR OF PORTFOLIO MANAGEMENT

Antonio T. Docal, CFA40 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES

DIRECTOR OF BUSINESS DEVELOPMENT

C. Reed Hutchens, CFA31 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES

0


13


Templeton Global Equity Group Organisational Structure

As of 30 June 2019.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover Investment Opportunities Across Regions

6579

Heather Arnold, CFA Director of Research

REGIONAL RESEARCH TEAMS

Peter NoriResearch Coordinator

GLOBAL

Tian QiuResearch Coordinator

Paul de JosselinResearch Coordinator

Matthew NagleResearch Coordinator

EUROPE AMERICAS

Harlan Hodes Research Coordinator

SMALL CAP

ESG

Maarten BloemenResearch Coordinator

ASIA

Smal

l Cap

s (<

$2B)

Mid

Cap

s ($

2B -

$10B

)La

rge

Cap

s (>

$10B

)

Mar

ket C

apita

lisat

ion

0


14


Bottom-Up Stock Pickers: Global Focus Seeks to Uncover Investment Opportunities

Across Regions

As of 30 June 2019. Note: Sector team leaders in blue boldface.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover the Best Opportunities Across Sectors and Geographies

2906

0

Matthew Nagle Americas BanksEuropean Banks

Warren Pustam Global InsuranceGlobal Diversified Financials

Maggie Wong Global Real Estate

Dylan Ball European Financials

Paul de Josselin Asian BanksHsung Khoo Asian Financials

Warren Pustam Americas Financials

David Tuttle Small Cap FinancialsMaggie Wong Small Cap Real Estate

Director of Research: Heather Arnold, CFAGLOBAL SECTOR TEAMS

Japan

India

Katherine Owen Global Consumer Discretionary

Alan Chua Global Autos & Components

Joanne Wong Global Consumer Staples

James Windsor European Consumers

Warren Pustam Americas Consumers

Harlan Hodes Small Cap Consumers

Ferdinand Cheuk Asian Autos

CONSUMERS

Tian Qiu Global Health CareCraig Cameron Global Health Care

Roman Aliev Asian Heath Care

Derek Taner Americas Health Care

HEALTH CARE

FINANCIALSTina Sadler Global Materials

Dylan Ball European Materials

Clara Lee Asian Materials

Tony Docal Americas Materials

David Tuttle Small Cap Materials

MATERIALSINDUSTRIALS

ENERGY COMMUNICATION SERVICES INFORMATION TECHNOLOGYPeter Nori Global Semiconductors

& Semiconductor Equipment

Peter Wilmshurst Global Software & ServicesGlobal Technology Hardware & Equipment

James Windsor European Information Technology

Ferdinand Cheuk Asian Information Technology

Derek Taner Americas Information Technology

Katie Ylijoki Small Cap Information Technology

ADDITIONAL RESOURCESResearchTechnology Group

Global Research Library

Junior Research Analysts

Investment Risk Management Group

ESG Resources

GlobalTrading Platform

Product ManagementGroup

Franklin Templeton Emerging Markets Equity & Templeton Global Macro

Chris Peel Global Energy

Hsung Khoo Asian Energy

Bhavesh Bombaywala Small Cap EnergyDavid Tuttle Small Cap Energy

Herbert Arnett Global Communication Services

Hsung Khoo Asian Communication Services

Heather Waddell Small Cap Communication Services

Peter Moeschter Global IndustrialsAlan Chua Global Machinery

James Windsor European Industrials

Tony Docal Americas IndustrialsDerek Taner Americas IndustrialsHeather Waddell Americas Industrials

Harlan Hodes Small Cap IndustrialsHeather Waddell Small Cap Industrials


15


Bottom-Up Stock Pickers: Global Focus Seeks to Uncover the Best Opportunities

Across Sectors and Geographies

The above chart is for illustrative and discussion purposes only.1. Historical turnover is based on Templeton Global Equity Group’s overall experience, over a five-year period ended 30 June 2019, 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 historical turnover ratio please contact your Franklin Templeton representative.

Templeton’s Valuation-Driven Investment Process

4148

Identify Potential Bargains

In-Depth Fundamental Analysis

Research Team Evaluation

Bottom-Up Portfolio Construction

Portfolio Monitoringand Risk Management

Detailed industry analysis

Regional influences

Quantitative and qualitative assessment

Identify material ESG issues

Five-year financial forecasts

Management/supplier/competitive evaluation

Risk/Reward modelling

Recommendation of Bargain List candidates

Presentation of investment thesis

Investment debate and critique

ESG debate and critique

Research approval

Investment parameters

Industry and sector framework

Build and diversify portfolio

Long-term approach: 20% historical turnover1

Ongoing valuation analysis

Ongoing ESG monitoring

Disciplined sell methodology

Ongoing peer review and risk analytics

54321

TEMPLETON’S BOTTOM-UP STOCK SELECTION PROCESS


16


Templeton’s Valuation-Driven Investment Process

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.

Lifecycle of a Templeton Stock

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

4148


17


The above chart is for illustrative 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 80 securities, individual portfolios may vary, depending on various factors, such as portfolio size or investment strategy.

Bottom-Up Portfolio Construction

4148

Portfolio Manager Stock Selection Decisions & Oversight

Analysts’highest-conviction holdings per sector

Historically low turnover, which may result in lower transaction costs

TEMPLETON GLOBAL OR

NON-U.S. PORTFOLIOApproximately 80 Securities1

SELL DISCIPLINE

300–500Securities

on Proprietary Database

Approved Database

Sector Analyst Portfolios

Portfolio-SpecificFeatures

Mandate parameters

Geographic/sector constraints

Portfoliocash flow

Source of Funds List

Core List

Bargain List


18


This is not a complete analysis of every material fact regarding an industry, security or investment and should not be viewed as an investment recommendation. It is, however, intended to provide insight into the fund’s portfolio selection process. The actions taken with respect to this investment, and its performance, may not be representative of other advice or investments. Factual statements are taken from sources considered reliable, but have not been independently verified for completeness or accuracy by the fund’s manager or its affiliates. These opinions may not be relied upon as investment advice or an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund. In addition, it should not be assumed that any securities transactions discussed were or will prove to be profitable. Logo used for illustrative purposes to identify respective company and should not be construed as an endorsement of or affiliation with Franklin Templeton Investments.

ESG Assessments—Case Studies

Environmental Social Governance/SocialEon Landis + Gyr Samsung Electronics

• E.ON SE is a multi-utility based in Germany. E.ON has transitioned to become more focused on regulatory distribution networks and retail supply in Europe. Acquiring Innogy increases that focus, and we expect the company to benefit from the need for investment in the grid to support the growth in renewable energy sources. The utility retail business increasingly includes small generation installations and electrical upgrades, energy audits, heating and cooling systems, charging stations, metering and energy storage.

• With significantly lower emissions than peers, it should be well positioned for more stringent emissions regulations in Europe. Internally, the company also aims to reduce its own carbon footprint a further 30% vs a 2016 baseline.

• Power generation assets fueled by coal and gas have been sold, and its nuclear power operations are being decommissioned and phased out by 2022. E.ON announced plans to obtain 24% of its generating capacity from renewable energy sources by 2030, helping to achieve its target to reduce the CO2 intensity of its power sales by 50% when compared with 2016 levels.

• Landis + Gyr, based in Switzerland, is a leading provider of smart meters, which we expect may offer many years of growth driven by upgrades to power grids with the ability to help lower carbon emissions and integrate renewables. As a newly listed company, we had multiple meetings with the company to discuss the adoption of leading sustainability practices.

• We discussed material risks including the potential for data breaches and tampering. L&G’s smart meters enable two-way data communication between households and utilities. They need to avoid a breach which leads to stolen consumer financial data or meters getting ‘hacked’ and tampered with. Longer term, as more monitored devices such as electric vehicles and battery storage are connected via a household’s smart meter, the pressure to avoid tampering will increase and require further investment in IT.

• L&G already commits 70% of its R&D to software, with data security as a priority. However we have quantified a need for even more spending by assuming an increase of about 10%, or close to $10 million extra per year.

• Samsung Electronics has corporate governance risks common with large Korean companies due to its chaebol structure of complex cross holdings. This is magnified by the absence of an independent chairman and a founder family member on the board, who was imprisoned over corruption charges in 2017-18.

• We have held numerous corporate governance discussions with Samsung. The cross holdings should be slowly unwound as government tolerance for this structure is at an end while the jail time served by Vice Chairman JY Lee, while not welcome, did not appear to impact operations. At the 2018 Annual General Meeting, the company announced governance reforms such as the separation of CEO/Chair roles.

• We also discussed labour conditions at Chinese suppliers, isolated accidents at Samsung plants and a more widespread issue regarding illnesses by workers at Samsung facilities with the most severe involving a settlement regarding approximately 150 cases of leukemia. Samsung agreed to settle all related compensation claims, set aside W100 billion in August 2015 and signed a final settlement in January 2016.

• Samsung Electronics has made efforts to proactively address allegations of labour violations within the supply chain with increased supplier auditing and termination of relationships where child labour was found. Over time, we expect the valuation discount resulting from these issues to narrow.

5960

Consistent with our fundamental bottom-up analysis, our economic based approach to ESG focuses on assessing how environmental, social and governance risks and opportunities may impact the returns companies earn on their business.


19


ESG Assessments—Case Studies

6326

TGM—ESGI Centres Around 13 Indicators

Summary of index components

Environment20%

Social

40%

Governance 40%

Unsustainable Practices

Extreme Weather Risk

Resource Scarcity

EffectivenessPolicy MixCorruptionInstitutional StrengthBusiness Climate

Social Cohesion and StabilityInfrastructureHuman CapitalLabour

Demographics

13 indicators that we believe would have the most economic and valuation impact


20


Templeton Global Macro ESG Index Centers Around 13 Indicators

Multiple Research Lenses Can Lead to High-Conviction Opportunities

Investment Process

1812

Three Potential Sources of Alpha

Global Research Lenses

Risk Modelling• VaR Analysis• Correlation

Analysis• Scenario/Stress

Testing

Trading• Trade Structuring• Market Flows• Local Execution/

Settlement• Liquidity Analysis

PORTFOLIO

Portfolio Construction and Implementation

Identification of High-

ConvictionOpportunities

Management Team• Potential Return

vs. Expected Risk• Global Allocations

Review/Performance AttributionReview

Yield Curve

Currency Ideas

Credit Ideas

• Growth Drivers

• Monetary Policy

• Fiscal Policy

• Inflation Dynamic

• Debt Sustainability

• Balance of Payment

• Political Situation

Macroeconomic Analysis

Macro-Models Analysis

Local Asset Management Perspectives¹

Country Visits

ES

G


21

1. This unit is comprised of investment professionals located in affiliates of and joint venture partners with Franklin Templeton Investments. Reference to Local Asset Management is in relation to fixed income teams (excluding equity).

The above chart is for illustrative and discussion purposes only.


Investment Process

*The fund may use other derivatives to generate similar exposures, such as futures.The portfolio composition, characteristics and the number of exposures held by the fund will vary due to a variety of factors, such as, but not limited to, market conditions, asset size, interest rates, currency fluctuations, economic instability and political developments.

Portfolio Construction—Position Sizing

5397

Portfolio Positioning Position Sizing

• The portfolio invests across developed and emerging countries in areas where we see potential value

• There are typically a few overarching macro views that are expressed using a variety of instruments

• Individual views are expressed using currency, interest rate, or credit positions

• Position size is based on our view of attractiveness, valuation, conviction level and risk, as well as size and liquidity of the market

• Long country exposures typically range from approximately 4–8%, expressed using some combination of currency, rates and credit; extremely high conviction positions may constitute around 20%

Implementation Barbell Approach

• Views are implemented primarily via local currency bonds, currency forwards, interest rate swaps, hard currency bonds, or a combination thereof

• The makeup of a position depends on the exposure, valuation, liquidity, and correlation to the remainder of the portfolio

• The various investment positions in the portfolio seek to balance downside risk, expected return and liquidity

RatesCredit

Hard Currency

Bonds

Local Currency

Bonds

FX Forwards*

Interest Rate

Swaps*

Currency


22


Portfolio Construction

As stewards of our clients’ capital, we are constantly searching for greater transparency into the drivers of investment risk in our strategies and assuring alignment with investment team convictions and client expectations.

Investment risk management at Franklin Templeton:

As of 30 June 2019.

Investment Risk Management at Franklin Templeton

• Begins with the portfolio

management team’s research

process and the assessment of

market and active risk

• Is supported by integrated risk

analytics for the portfolio

management team’s use

• Is strengthened by the independent

Investment Risk Management

Group that reports directly to

the CEO

• Serves multiple stakeholders

including investors, portfolio

managers, fund boards and

regulators

• Is powered by actionable insights

from 20+ risk consultants with an

average of 18+ years experience and

90+ risk analysts located around

the globe

• Combines a mosaic of analytics,

oversight protocols and

collaborative consultation with

portfolio managers

Integrated Independent Insightful

6215


23


Investment Risk Management at Franklin Templeton


24

Fund Identifiers

ISIN Code LU0211326755

SEDOL Code B064Q18

Bloomberg Code TGINAAC LX


As of 30 June 2019

Summary

Portfolio Manager(s)

Heather Arnold, CFA Bahamas

Michael Hasenstab, PhD United States

Norman Boersma, CFA Bahamas

Fund Ratings (30 June 2019)

Overall Morningstar Rating™

««

Summary of Investment Objective

The Fund aims to maximise current income while maintaining prospects for capital

appreciation by investing in a diversified portfolio of debt and equity securities

worldwide. It seeks income by investing in a portfolio of fixed and floating rate debt

securities and debt obligations issued by government and government-related issuers

or corporate entities worldwide, including in emerging markets, as well as stocks the

portfolio manager believes offer attractive dividend yields.

Morningstar Category™ USD Moderate Allocation

Investment Style Balanced

Fund Inception Date 27 May 2005

Share Class Inception Date 27 May 2005

Benchmark Blended 50% MSCI All Country World

Index + 50% Bloomberg Barclays

Multiverse Index

Base Currency for Fund USD

Base Currency for Share Class USD

Total Net Assets (USD) 695,724,885.80

Asset Allocation (Market Value) Equity: 67.98%

Fixed Income: 20.95%

Cash & Cash Equivalents: 11.07%

Number of Issuers 85

Total Expense Ratio 1.69%

Holdings of the same issuer have been combined.

© Morningstar, Inc. 2019. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither

Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Market value figures reflect the trading value of the investments. Portfolio breakdown percentages may not total 100% and may be negative due to rounding, use of any derivatives, unsettled trades or other factors.

Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details.

Past performance is not an indicator or a guarantee of future performance.



25

The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested.

Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments.

The Fund invests mainly in debt and equity securities issued by any government or corporate entity worldwide, including emerging markets. Such securities have

historically been subject to price movements, generally due to interest rates or movements in the bond and equity markets. As a result, the performance of the Fund can

fluctuate considerably over time.

The Fund may distribute income gross of expenses. Whilst this might allow more income to be distributed, it may also have the effect of reducing capital.

Other significant risks include: credit risk, derivatives risk, emerging markets risk, liquidity risk.

For full details of all of the risks applicable to this Fund, please refer to the “Risk Considerations” section of the Fund in the current prospectus of Franklin Templeton

Investment Funds.

What are the Key Risks?



26





11/17 12/17 01/18 02/18 03/18 04/18 05/18 06/18 07/18 08/18 09/18 10/18 11/18 12/18 01/19 02/19 03/19 04/19 05/19 06/19

0%

20%

40%

60%

80%

100%

Equity Fixed Income, Cash & Cash Equivalents


As of 30 June 2019 — Market Value

27


Geographic Allocation—Total


vs. Blended 50% MSCI All Country World Index + 50% Bloomberg Barclays Multiverse Index


Cash & Cash Equivalents

Other

Australia / New Zealand

Mid-East / Africa

Latin America / Caribbean

North America

Asia

Europe

0% 10% 20% 30% 40% 50% 60%


Blended 50% MSCI All Country World Index +

50% Bloomberg Barclays Multiverse Index


Weightings as percent of total. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.


Portfolio % Index % Over/Under %

Europe 33.00 24.73 8.28

United Kingdom 10.35 4.98 5.38

Germany 6.44 3.76 2.68

France 5.82 4.52 1.30

Netherlands 3.88 1.33 2.55

Italy 2.89 2.10 0.79

Switzerland 1.71 1.78 -0.07

Other 1.91 6.24 -4.34

Asia 27.31 19.03 8.28

Japan 7.61 11.41 -3.80

India 5.05 0.58 4.47

China 3.56 2.84 0.72

South Korea 3.55 1.38 2.17

Indonesia 2.85 0.37 2.48

Hong Kong 2.32 0.65 1.67

Other 2.38 1.80 0.58

North America 14.87 50.43 -35.56

United States 14.28 47.27 -32.99

Canada 0.59 3.14 -2.56

Other 0.00 0.01 -0.01

Latin America / Caribbean 10.75 1.78 8.97

Brazil 5.37 0.77 4.61

Mexico 3.20 0.47 2.73

Other 2.18 0.52 1.66

Mid-East / Africa 2.99 1.13 1.86

Other 2.99 1.10 1.88

Australia / New Zealand 0.00 1.89 -1.89

Australia 0.00 1.78 -1.78

New Zealand 0.00 0.11 -0.11

Other 0.00 1.01 -1.01

Supranational 0.00 1.01 -1.01

Cash & Cash Equivalents 11.07 0.00 11.07


MSCI All Country World Index

Latin America / Caribbean

Australia / New Zealand

Mid-East / Africa

North America

Asia

Europe

0% 12% 24% 36% 48% 60%

28


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



vs. MSCI All Country World Index


Geographic Allocation—Equity


Europe 48.55 19.60 28.95

United Kingdom 15.23

5.01

10.22

Germany 9.48

2.64

6.84

France 8.56

3.41

5.15

Netherlands 5.70

1.08

4.63

Italy 4.26

0.69

3.56

Switzerland 2.52

2.77

-0.25

Luxembourg 1.86

0.00

1.86

Denmark 0.94

0.51

0.43

Others 0.00 3.50 -3.50

Asia 27.55 17.17 10.38

Japan 11.19

7.07

4.12

China 5.24

3.72

1.52

South Korea 4.36

1.46

2.90

Hong Kong 3.42

1.19

2.23

Singapore 2.25

0.40

1.85

Thailand 1.09

0.35

0.74

Taiwan 0.00

1.28

-1.28

India 0.00

1.06

-1.06

Others 0.00 0.63 -0.63

North America 22.83 58.33 -35.50

United States 21.97

55.28

-33.31

Canada 0.86

3.05

-2.19

Mid-East / Africa 1.07 1.26 -0.19

Israel 1.07

0.17

0.89

Others 0.00 1.08 -1.08

Australia / New Zealand 0.00 2.20 -2.20

Australia 0.00

2.12

-2.12

New Zealand 0.00

0.07

-0.07

Latin America / Caribbean 0.00 1.45 -1.45

Others 0.00 1.45 -1.45


Weightings as percent of fixed income. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.


Cash & Cash Equivalents

Other

Supranational

Non-EMU Europe

EMU Europe

Middle East / Africa

Japan

Asia ex-Japan

USA

Non-US Americas

-30% 0% 30% 60%


Bloomberg Barclays Multiverse Index


29

Geographic Allocation—Fixed Income


vs. Bloomberg Barclays Multiverse Index


Portfolio %

Index % Over/Under %

AMERICAS 53.76 44.64 9.12

NON-US AMERICAS 56.49 5.37 51.12

Brazil 22.47 0.63 21.84

Mexico 21.91 0.64 21.27

Argentina 9.24 0.14 9.11

Colombia 2.85 0.21 2.64

Canada 0.00 3.24 -3.24

Chile 0.00 0.17 -0.17

Other 0.02 0.33 -0.32

USA -2.73 39.27 -42.00

ASIA 37.40 22.48 14.92

ASIA EX-JAPAN 37.40 6.73 30.66

India 21.11 0.10 21.01

Indonesia 11.92 0.49 11.43

South Korea 3.94 1.30 2.64

Philippines 0.42 0.18 0.24

China 0.00 1.96 -1.96

Australia 0.00 1.44 -1.44

Thailand 0.00 0.34 -0.34

Malaysia 0.00 0.32 -0.32

Singapore 0.00 0.25 -0.25

Other 0.00 0.36 -0.36

JAPAN 0.00 15.75 -15.75

MIDDLE EAST /

AFRICA

9.47 0.99 8.48

Ghana 6.68 0.02 6.66

Kenya 2.79 0.01 2.78

Israel 0.00 0.19 -0.19

United Arab Emirates 0.00 0.16 -0.16

Other 0.00 0.60 -0.60

EUROPE 0.00 29.86 -29.86

EMU EUROPE 0.00 21.44 -21.44

France 0.00 5.64 -5.64

Germany 0.00 4.88 -4.88

Portfolio %

Index % Over/Under %

Italy 0.00 3.51 -3.51

Spain 0.00 2.57 -2.57

Netherlands 0.00 1.58 -1.58

Belgium 0.00 1.06 -1.06

Austria 0.00 0.68 -0.68

Finland 0.00 0.39 -0.39

Ireland 0.00 0.37 -0.37

Portugal 0.00 0.35 -0.35

Other 0.00 0.41 -0.41

NON-EMU EUROPE 0.00 8.41 -8.41

United Kingdom 0.00 4.95 -4.95

Switzerland 0.00 0.79 -0.79

Sweden 0.00 0.71 -0.71

Denmark 0.00 0.35 -0.35

Russia 0.00 0.35 -0.35

Norway 0.00 0.33 -0.33

Poland 0.00 0.31 -0.31

Turkey 0.00 0.16 -0.16

Other 0.00 0.45 -0.45

SUPRANATIONAL 0.00 2.03 -2.03

OTHER 0.08 0.00 0.08

CASH & CASH

EQUIVALENTS

-0.71 0.00 -0.71


30

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


Real Estate

Materials

Consumer Discretionary

Utilities

Information Technology

Industrials

Consumer Staples

Energy

Health Care

Communication Services

Financials

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

Sector Allocation—Equity


MSCI All Country World Index



vs. MSCI All Country World Index


Financials 20.35 16.89 3.45

Banks

18.02 8.99 9.03

Diversified Financials

1.21 3.94 -2.73

Insurance

1.12 3.96 -2.85

Communication Services 17.16 8.72 8.45

Telecommunication Services

12.20 2.92 9.28

Media & Entertainment

4.96 5.80 -0.84

Health Care 15.72 11.41 4.31

Pharmaceuticals, Biotechnology & Life Sciences

15.72 7.23 8.49

Health Care Equipment & Services

0.00 4.18 -4.18

Energy 13.82 5.93 7.89

Consumer Staples 8.91 8.28 0.63

Food, Beverage & Tobacco

6.14 4.70 1.44

Food & Staples Retailing

2.78 1.53 1.25

Household & Personal Products

0.00 2.06 -2.06

Industrials 7.66 10.51 -2.85

Capital Goods

4.47 7.13 -2.67

Transportation

3.19 2.17 1.02

Commercial & Professional Services

0.00 1.21 -1.21

Information Technology 5.71 16.02 -10.31

Technology Hardware & Equipment

3.00 4.82 -1.81

Software & Services

1.71 8.17 -6.46

Semiconductors & Semiconductor Equipment

0.99 3.03 -2.03

Utilities 4.69 3.25 1.43

Consumer Discretionary 3.68 10.83 -7.14

Consumer Durables & Apparel

2.15 2.00 0.14

Retailing

1.53 5.14 -3.61

Automobiles & Components

0.00 1.90 -1.90

Consumer Services

0.00 1.78 -1.78

Materials 1.22 4.94 -3.73

Real Estate 1.08 3.21 -2.13

31

Supranational

Derivatives

US Treasuries/Agencies

Securitised: N/A

Securitised: MBS

Securitised: CMBS / ABS

Corporate Bonds: Non-Investment Grade

Corporate Bonds: Investment Grade

Non-Local Curr. Sovereign Bonds: Investment Grade

Non-Local Curr. Sovereign Bonds: Non-Investment Grade

Local Curr. Govt/Agency Bonds: Non-Investment Grade

Local Curr. Govt/Agency Bonds: Investment Grade

-5% 9% 23% 37% 51% 65%




Sector Allocation—Fixed Income


Local Curr. Govt/Agency Bonds 99.88 42.36 57.52

Investment Grade 62.16 41.91 20.25

Non-Investment Grade 37.72 0.45 37.27

Non-Local Curr. Sovereign Bonds 3.47 4.25 -0.78

Non-Investment Grade 3.47 0.92 2.55

Investment Grade 0.00 3.33 -3.33

Corporate Bonds 0.00 21.43 -21.43

Investment Grade 0.00 18.20 -18.20

Non-Investment Grade 0.00 3.23 -3.23

Securitised 0.00 14.08 -14.08

CMBS / ABS 0.00 0.95 -0.95

MBS 0.00 10.58 -10.58

N/A 0.00 2.55 -2.55

US Treasuries/Agencies 0.00 15.85 -15.85

Derivatives -3.36 0.00 -3.36

Supranational 0.00 2.02 -2.02








32

Currency Exposure—Fixed Income



As of 30 June 2019 — Notional Exposure

Euro

Romania Leu

Hungarian Forint

Czech Koruna

Norwegian Krone

Russian Ruble

Polish Zloty

Danish Krone

Swedish Krona

Swiss Franc

British Pound

Israeli Shekel

Ghanaian Cedi

Australian Dollar

Hong Kong Dollar

New Zealand Dollar

Singapore Dollar

Malaysian Ringgit

Thailand Baht

Chinese Yuan

South Korean Won

Philippine Peso

Indian Rupee

Indonesian Rupiah

Japanese Yen

Chilean Peso

Peru Nuevo Sol

Canadian Dollar

Colombian Peso

Argentine Peso

Mexican Peso

Brazilian Real

U.S. Dollar

-57% -19% 19% 57% 95% 133%

Notional exposure figures are intended to estimate the portfolio’s exposure, including any hedged or increased exposure through certain derivatives held in the portfolio (or their underlying reference assets). Portfolio breakdown percentages may not total

100% and may be negative due to rounding, use of any derivatives, unsettled trades or other factors.






AMERICAS 132.71 49.61 83.10

U.S. DOLLAR 81.54 46.25 35.28

NON-US DOLLAR 51.17 3.36 47.82

Brazilian Real 22.47 0.37 22.10

Mexican Peso 17.28 0.25 17.03

Argentine Peso 8.58 0.00 8.58

Colombian Peso 2.85 0.12 2.73

Canadian Dollar 0.00 2.49 -2.49

Peru Nuevo Sol 0.00 0.07 -0.07

Chilean Peso 0.00 0.06 -0.06

ASIA 17.27 20.10 -2.83

JAPANESE YEN 23.22 15.33 7.89

ASIA EX-JAPAN -5.95 4.77 -10.71

Indonesian Rupiah 11.92 0.29 11.63

Indian Rupee 0.50 0.00 0.50

Philippine Peso 0.42 0.11 0.31

South Korean Won 0.23 1.13 -0.90

Chinese Yuan 0.00 1.16 -1.16

Thailand Baht 0.00 0.31 -0.31

Malaysian Ringgit 0.00 0.28 -0.28

Singapore Dollar 0.00 0.19 -0.19

New Zealand Dollar 0.00 0.10 -0.10

Hong Kong Dollar 0.00 0.02 -0.02

Australian Dollar -19.02 1.18 -20.20

MIDEAST/AFRICA 6.68 0.11 6.57

Ghanaian Cedi 6.68 0.00 6.68

Israeli Shekel 0.00 0.11 -0.11

EUROPE -56.66 30.18 -86.84

NON-EURO 0.00 6.31 -6.31

British Pound 0.00 4.47 -4.47

Swiss Franc 0.00 0.54 -0.54

Swedish Krona 0.00 0.40 -0.40

Danish Krone 0.00 0.22 -0.22

Polish Zloty 0.00 0.20 -0.20

Russian Ruble 0.00 0.15 -0.15


Norwegian Krone 0.00 0.10 -0.10

Czech Koruna 0.00 0.09 -0.09

Hungarian Forint 0.00 0.07 -0.07

Romania Leu 0.00 0.05 -0.05

EURO -56.66 23.88 -80.53

N/A

NR

CC+

CCC-

CCC

CCC+

B-

B

B+

BB-

BB

BB+

BBB-

BBB

BBB+

A-

A

A+

AA-

AA

AA+

AAA

-4% 7% 18% 29% 40%




33




Credit Quality Allocation—Fixed Income


AAA 0.00 37.52 -37.52

AA+ 0.00 2.28 -2.28

AA 3.94 9.19 -5.25

AA- 0.00 3.38 -3.38

A+ 0.00 18.95 -18.95

A 0.00 3.18 -3.18

A- 21.91 5.86 16.06

BBB+ 0.00 4.33 -4.33

BBB 15.19 7.51 7.68

BBB- 21.11 3.15 17.97

BB+ 0.00 0.69 -0.69

BB 0.00 0.52 -0.52

BB- 22.47 1.13 21.34

B+ 2.79 0.64 2.15

B 15.92 0.75 15.17

B- 0.02 0.50 -0.49

CCC+ 0.00 0.19 -0.19

CCC 0.00 0.13 -0.13

CCC- 0.00 0.02 -0.02

CC+ 0.00 0.02 -0.02

NR 0.00 0.06 -0.06

N/A -3.36 0.01 -3.37

Investment Grade

62.16 95.34 -33.18

Non-Investment Grade

41.20 4.65 36.55

N/A

-3.36

0.01 -3.37



Ratings shown are assigned by one or more Nationally Recognised Statistical Rating Organisations (‘NRSRO’), such as Standard & Poor’s, Moody’s and Fitch. The ratings are an indication of an issuer’s creditworthiness and typically range from AAA or

Aaa (highest) to D (lowest). When ratings from all three agencies are available, the middle rating is used; when two are available, the lowest rating is used; and when only one is available, that rating is used. Foreign government bonds without a specific

rating are assigned the country rating provided by an NRSRO, if available. The NR category consists of rateable securities that have not been rated by an NRSRO. The N/A category consists of nonrateable securities (e.g., equities). Cash and

equivalents are excluded from this breakdown.



34

The Ten Largest Holdings represent the ten largest holdings of the fund as of the date indicated. These securities do not represent all of the securities purchased, sold or recommended for advisory clients, and the reader should not assume that

investment in the securities listed was or will be profitable. All portfolio holdings are subject to change.

Holdings of the same issuer have been combined.

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 top 10 holdings list.


Name of Issuer Country Industry % of Total

ING GROEP NV Netherlands Banks 2.40

BP PLC United Kingdom Energy 2.29

ROYAL DUTCH SHELL PLC United Kingdom Energy 2.27

ENI SPA Italy Energy 2.22

SANOFI France Pharmaceuticals, Biotechnology & Life Sciences 2.08

BNP PARIBAS SA France Banks 2.06

ALLERGAN PLC United States Pharmaceuticals, Biotechnology & Life Sciences 2.00

STANDARD CHARTERED PLC United Kingdom Banks 1.91

VEOLIA ENVIRONNEMENT SA France Utilities 1.68

DEUTSCHE TELEKOM AG Germany Telecommunication Services 1.63

Total 20.53

Top Ten Holdings—Equity


As of 30 June 2019

35

Portfolio Characteristics—Total


vs. MSCI All Country World Index & Bloomberg Barclays Multiverse Index

As of 30 June 2019


Total Characteristics Portfolio

Blended Yield

4.39%

Equity Characteristics Portfolio Benchmark

Price to Earnings (12-mo Trailing) 13.12x 17.54x

Price to Cash Flow 4.97x 11.23x

Price to Book 1.18x 2.29x

Dividend Yield 3.87% 2.49%

Market Capitalisation (Millions USD) 83,582 130,537

Market Capitalisation Breakdown in USD Portfolio %

<2.0 Billion 1.19

2.0-5.0 Billion 3.21

5.0-10.0 Billion 4.81

10.0-25.0 Billion 18.45

25.0-50.0 Billion 22.19

>50.0 Billion 48.29

N/A 1.86


Average Duration, Average Weighted Maturity, Yield to Maturity and Yield to Worst figures reflect certain derivatives held in the portfolio (or their underlying reference assets).

The average credit quality (ACQ) rating may change over time. The portfolio itself has not been rated by an independent rating agency. The letter rating, which may be based on bond ratings from different agencies, is provided to indicate the average

credit rating of the portfolio’s underlying bonds and generally ranges from AAA (highest) to D (lowest). For unrated bonds ratings may be assigned based on the ratings of the issuer or other relevant factors. The ACQ is determined by assigning a

sequential integer to all credit ratings AAA to D, taking a simple, asset-weighted average of debt holdings by market value and rounding to the nearest rating. The risk of default increases as a bond’s rating decreases, so the ACQ provided is not a

statistical measurement of the portfolio’s default risk because a simple, weighted average does not measure the increasing level of risk from lower rated bonds. The ACQ is provided for informational purposes only. Derivative positions are not

reflected in the ACQ.

Yield figures quoted should not be used as an indication of the income that has or will be received. Yield figures are based on the portfolio's underlying holdings and do not represent a payout of the portfolio.

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 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. The market capitalisation figures for both the portfolio and the benchmark are the security level, not aggregated up to the main issuer.

Source: FactSet. Price Ratio calculations for the weighted average use harmonic means. Any exceptions to this are noted. Market capitalisation statistics are indicated in the base currency for the portfolio presented.

A blended measure used for balanced funds, the internal or blended yield is the market-weighted average of the current yield of the fund's fixed income component and the dividend yield of the fund's equity component. This measure is gross of

fees.



Fixed Income Characteristics Portfolio Benchmark

Average Credit Quality

BBB- AA-

Average Duration -3.15 Yrs 6.92 Yrs

Average Weighted Maturity 3.06 Yrs 8.63 Yrs

Yield to Maturity 11.00% 1.71%

Yield to Worst 11.00% 1.69%


36

Discrete Performance

Discrete Annual Performance (%)

Inception

Date

06/18

06/19

06/17

06/18

06/16

06/17

06/15

06/16

06/14

06/15

Templeton Global Income Fund - A (acc) USD—Net of Fees 27.5.2005 -3.13 0.95 17.36 -10.77 -3.10

Blended 50% MSCI All Country World Index + 50% Bloomberg Barclays

Multiverse Index

6.39 6.31 8.60 2.83 -2.95

All performance data shown is in the Fund currency stated and net of management fees. Sales charges and other commissions, taxes and other relevant costs paid by the investor are not included in the calculations.

Performance data may represent blended share class performance, e.g., hybrid created from an A (dis) share class which was converted to A (acc).


When performance for either the portfolio or its benchmark has been converted, different foreign exchange closing rates may be used between the portfolio and its benchmark.

The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance is not an indicator

or a guarantee of future performance. Current performance may differ from figures shown. Currency fluctuations may affect the value of overseas investments. When investing in a fund

denominated in a foreign currency, performance may also be affected by currency fluctuations. Please visit www.franklinresources.com/countries for current performance.



As of 30 June 2019

Annualised Total Returns (%)

Inception

Date 1 Yr 3 Yrs 5 Yrs 10 Yrs

Since

Incept

Templeton Global Income Fund - A (acc) USD—Net of Fees 27.5.2005 -3.13 4.70 -0.15 5.34 4.85


Multiverse Index

6.39 7.10 4.15 7.06 5.69


Historical Performance


As of 30 June 2019









37

Cumulative Performance (%)

Inception

Date 1 Mth 3 Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs

Since

Incept

Templeton Global Income Fund - A (acc) USD—Net of Fees 27.5.2005 4.95 0.00 5.07 -3.13 14.78 -0.76 68.27 95.03


Multiverse Index

4.42 3.60 11.17 6.39 22.82 22.57 97.74 118.04


38









Calendar Year Returns


As of 30 June 2019

YTD 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009

-12%

-2%

8%

18%

28%

5.07

11.17

-10.12 -5.06

11.62

15.89

4.81

5.80

-4.80 -2.36 -1.22

2.63

16.23

10.00

16.36

10.86

-6.66 -0.56

10.48

9.87

27.83

21.49

Blended 50% MSCI All Country World Index + 50% Bloomberg Barclays Multiverse IndexTempleton Global Income Fund - A (acc) USD—Net of Fees


39

The base currency of a fund determines the risk-free rate index used in calculating certain risk statistics on this page. A fund that is based in USD uses the US T-Bill Index as the risk free rate return, a EUR-based fund uses the Euro 3-Month T-Bill

Index, a GBP-based fund uses the UK Treasury Bills 3 Month Index, a JPY-based fund uses the Japan Financing Bill 3 Month Index, and an AUD-based fund uses the Australia T-Note 3 Month Index.


^^Measured against the Blended 50% MSCI All Country World Index + 50% Bloomberg Barclays Multiverse Index.

*Annualised.



As of 30 June 2019

Performance Risk Statistics

1 Yr 3 Yrs* 5 Yrs* 10 Yrs*

Standard Deviation (%):

Templeton Global Income Fund - A (acc) USD 13.38 9.27 9.84 11.25

Blended 50% MSCI All Country World Index + 50%


8.86 6.50 6.83 8.03

Tracking Error (%)^^ 6.73 5.78 5.54 5.14

Information Ratio^^ -1.41 -0.41 -0.78 -0.33

Beta^^ 1.35 1.13 1.21 1.28

Sharpe Ratio -0.40 0.36 -0.10 0.43


Performance Risk Statistics

5.04

3.864.33

4.033.32 3.35

4.13 3.97 4.20 4.39

3.22 3.04 3.24 3.02 2.84 2.79 2.81 2.64 2.49 2.57

7.21 7.05

6.06

7.72

6.55 6.35

7.46 7.31

10.33

8.38

4.29

3.323.77

3.33

2.49 2.64

3.41 3.352.92

3.87

0%

2%

4%

6%

8%

10%

12%

31/12/09 31/12/10 31/12/11 31/12/12 31/12/13 31/12/14 31/12/15 31/12/16 31/12/17 30/06/2019

Templeton Global Income Blended Yield Blended Benchmark Yield Current Yield of Fixed Income Portion of Templeton Global Income Fund Dividend Yield of Equity Portion of Templeton Global Income Fund

Templeton Global Income Fund A (Qdis) USD vs. Blended Benchmark (50% MSCI ACWI/50% Bloomberg Barclays Multiverse Index)As of 30 June 2019

Source: Franklin Templeton Investments/FactSet.Yield figures quoted should not be used as an indication of the income that has or will be received. Yield figures are based on the portfolio’s underlying holdings and do not represent a payout of the portfolio. The current yield of a bond fund is the market-weighted average of the current yields of all the bonds in the portfolio. This measure is gross of fees and excludes yield on cash. The dividend yield of a mutual fund is the market-weighted average of the dividend yields of all the stocks in the portfolio. This measure is gross of fees. A blended measure used for balanced funds, the internal or blended yield is the market-weighted average of the current yield of the fund’s fixed income component and the dividend yield of the fund’s equity component. This measure is gross of fees.The information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Blended Yield and Current Yield of Fixed Income Portion figures reflect certain derivatives held in the portfolio (or their underlying reference assets).Past performance is not an indicator or a guarantee of future performance.

Total Portfolio Yields

3694


40


Total Portfolio Yields

Templeton Global Income FundAs of 30 June 2019—Market Value

The information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Market value figures reflect the trading value of the investments. Portfolio breakdown percentages may not total100% and may be negative due to rounding, use of any derivatives, unsettled trades or other factors.Source: Franklin Templeton Investments.


2960

20%

30%

40%

50%

60%

70%

80%

Equity Fixed Income + Cash & Cash Equivalents


41



42

Appendix



Guides How We Work• Our primary objective is to deliver exceptional investment management through an active fundamental

approach…while always acting in the best interests of our clients and shareholders • As a fiduciary, we recognise that ESG considerations are a driver of long-term investment performance and

thus affect our business and the companies we invest in• Our approach to ESG is one of the many strengths of our organisation

ESG considerations at the corporate level that impact our business:

Environmental ImpactEnergy usage

Greenhouse gases

Waste/recycling

Water consumption

Social FactorsDiversity and inclusion

Talent management(attracting, retaining top talent)

Charitable giving

Customer privacy and data security

Employee volunteering

GovernanceAnti-money laundering

Code of ethics/conduct

Compliance

Executive compensation

Enterprise risk management

ESG investment integration

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Franklin Templeton—ESG and Corporate Sustainability

ESG considerations are a driver of long-term investment performance • We embed ESG best practices and analytics in our investment processes, enhancing our traditional financial analysis to open new

investment opportunities, help mitigate risk and seek to enhance long-term returns

Our dedicated specialist ESG team collaborates with the investment teams to:

Franklin Templeton—Environmental, Social and Governance (ESG) Investment Integration

Independent Risk ManagementIntegrate ESG analytics into fund reviews and risk reports

Dedicated ESG TeamTrack trends and share

industry best practices with investment teams Portfolio Construction &

Management

Investment Portfolios

Investment Research & Analysis

ESG considerations embedded in security evaluation processes

Educate and engage to understand the impact and scope of ESG considerations and consult on

emerging ESG issues

Evaluate ESG-related research practices and identify opportunities

to refine and deepen insights

Enhance analysis by incorporating independent, unbiased ESG

research and analytics

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Franklin Templeton—Environmental, Social and Governance (ESG) Investment

Integration

HEATHER ARNOLD, CFADirector of ResearchPortfolio Manager, Research AnalystTempleton Global Equity GroupTempleton Global Advisors LimitedNassau, Bahamas

Heather Arnold is the director of research for the Templeton Global Equity Group, as well as a portfolio manager and research analyst. Ms. Arnold is the lead portfolio manager for the Templeton Global Fund as well as the lead portfolio manager on a number of Global and International institutional separate accounts.She is also the lead equity portfolio manager of TGIT Templeton Global Balanced Fund, FTIF Templeton Global Income Fund and Templeton Global BalancedFund in Canada.

Ms. Arnold has 34 years industry experience, 14 of which have been at Templeton.

Ms. Arnold holds an M.B.A. from York University (Canada) and a B.A. in economics and art history from Queen's University (Canada), and is a Chartered Financial Analyst (CFA) charterholder.



45

Management Profile

WARREN PUSTAM, CFA, CPAVice PresidentResearch AnalystTempleton Global Equity GroupTempleton Global Advisors LimitedNassau, Bahamas

Warren W. Pustam is a research analyst for the Templeton Global Equity Group with global research responsibilities for diversified financials, capital markets and Latin American banks. Mr. Pustam also has country research coverage of Argentina, Brazil, Chile, Mexico, Colombia and Peru. He is a member of the Global Financials Sector Team and the Small Cap Team.

Prior to joining Franklin Templeton in 2013, Mr. Pustam was a research analyst at EverKey Global Partners with responsibilities for Companies in Europe. Priorto EverKey, Mr. Pustam was an associate portfolio manager with Pictet Bank & Trust and analyst at KPMG Corporate Finance. He entered the financial services industry in 2003.

Mr. Pustam holds a B.B.A. (Hons) in accounting from the University of the Bahamas. He is a Chartered Financial Analyst (CFA) charterholder and a Certified Public Accountant (CPA).


Management Profile


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MICHAEL HASENSTAB, PH.D.Executive Vice President, Portfolio ManagerChief Investment OfficerTempleton Global MacroFranklin Advisers, Inc.San Mateo, California, United States

Michael Hasenstab, Ph.D., is executive vice president and chief investment officer for Templeton Global Macro, which conducts in-depth global macroeconomic analysis covering thematic topics, regional and country analysis, and interest rate, currency and sovereign credit market outlooks. Templeton Global Macro offers global, unconstrained investment strategies through a variety of investment vehicles ranging from retail mutual funds to unregistered, privately offered hedge funds. Dr. Hasenstab is a portfolio manager for a number of funds, including Templeton Global Bond Fund and Templeton Global Total Return Fund.

Dr. Hasenstab is economic advisor to the CEO of Franklin Resources, Inc., providing his perspective and insight through the lens of Templeton Global Macro. In addition, he is a member of Franklin Resources' executive committee, a small group of the company's top leaders responsible for shaping the firm's overall strategy.

Dr. Hasenstab has received numerous industry awards and accolades throughout his investment career. Over the last decade, the funds that he and his team manage have collectively received more than 400 awards from various rating agencies globally, including Lipper and Morningstar. In addition, various publications have recognized Dr. Hasenstab's investment expertise including, most recently, his being named one of Forbes' Money Masters of 2015. Investment Week named him Global Bond Manager of the Year in 2008, 2010 and 2011 and recognized him as one of the most influential fund managers in 2010. Morningstar awarded him Fixed Income Manager of the Year in Canada in 2013 and Fund Manager of the Year in the U.S. in 2010. In 2011 and 2012, he was highlighted as one of the most influential young people in business in Fortune's 40 under 40.

Dr. Hasenstab initially joined Franklin Templeton Investments in July 1995. After a leave of absence to obtain his doctor of philosophy (Ph.D.) degree, he rejoined the company in April 2001. He has worked and traveled extensively abroad, with a special focus on Asia.

Dr. Hasenstab holds a Ph.D. in economics from the Asia Pacific School of Economics and Management at Australian National University, a master's degree in economics of development from the Australian National University, and a B.A. in international relations/political economy from Carleton College in the United States.


Management Profile


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NORMAN J. BOERSMA, CFAChief Investment Officer, Templeton Global Equity GroupPresident, Templeton Global Advisors LimitedNassau, Bahamas

Norman J. Boersma is the chief investment officer of Templeton Global Equity Group (TGEG) and president of Templeton Global Advisors. He is also lead portfolio manager for the Templeton Growth Fund, Templeton Growth (Euro) Fund and Templeton World Fund and related strategies.

Previously, he served as TGEG's director of research, director of portfolio management, and again, as director of research. After working in the Toronto office for much of his career, Mr. Boersma transitioned to Nassau, Bahamas, in 2011 to take on the role of lead portfolio manager on the group's flagship fund, Templeton Growth Fund. He entered the financial services industry in 1986.

Prior to joining Franklin Templeton in 1991, Mr. Boersma was an investment officer with the Ontario Hydro Pension Fund.

Mr. Boersma holds a B.A. in economics and political science from York University and an M.B.A. from the University of Toronto. He is a Chartered Financial Analyst (CFA) charterholder and a past treasurer and director of the Toronto Society of Financial Analysts.


Management Profile


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Glossary


49


Average Credit Quality: The average credit quality reflects the holdings of the underlying issues, based on the size of each holding and ratings assigned to each based on rating

agency assessments of its creditworthiness.

Average Duration: A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of

years. The weighted average duration of a fund reflects the effective duration of the underlying issues, based on the size of each holding.

Average Weighted Maturity: An estimate of the number of years to maturity, taking the possibility of early payments into account, for the underlying holdings.

Beta: A measure of the magnitude of a portfolio's past share-price fluctuations in relation to the ups and downs of the overall market (or appropriate market index). The market (or index)

is assigned a beta of 1.00, so a portfolio with a beta of 1.20 would have seen its share price rise or fall by 12% when the overall market rose or fell by 10%.

Dividend Yield: The annual dividend received on an equity security as a percentage of the price. For a portfolio, the value represents a weighted average of the stocks it holds. It should

not be used as an indication of the income received from this portfolio.

Information Ratio: In investing terminology, the ratio of expected return to risk. Usually, this statistical technique is used to measure a manager's performance against a benchmark.

This measure explicitly relates the degree by which an investment has beaten the benchmark to the consistency by which the investment has beaten the benchmark.

Market Capitalisation: A determination of a company's value, calculated by multiplying the total number of company stock shares outstanding by the price per share.

Price to Book: The price per share of a stock divided by its book value (i.e., net worth) per share. For a portfolio, the value represents a weighted average of the stocks it holds.

Price to Cash Flow: Supplements price/earnings ratio as a measure of relative value for a stock. For a portfolio, the value represents a weighted average of the stocks it holds.

Price to Earnings (12-mo Trailing): The share price of a stock, divided by its per-share earnings over the past year. For a portfolio, the value represents a weighted average of the

stocks it holds.

Sharpe Ratio: To calculate a Sharpe ratio, an asset's excess returns (its return in excess of the return generated by risk-free assets such as Treasury bills) are divided by the asset's

standard deviation.

Standard Deviation: A measure of the degree to which a fund's return varies from the average of its previous returns. The larger the standard deviation, the greater the likelihood (and

risk) that a fund's performance will fluctuate from the average return.

Tracking Error: Measure of the deviation of the return of a fund compared to the return of a benchmark over a fixed period of time. Expressed as a percentage. The more passively the

investment fund is managed, the smaller the tracking error.

Glossary (continued)


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Yield to Maturity: Yield to Maturity ('YTM') also known as the 'Gross Redemption Yield' or 'Redemption Yield'. The rate of return anticipated on a bond if it is held until the maturity date.

YTM is considered a long-term bond yield expressed as an annual rate. The calculation of YTM takes into account the current market price, par value, coupon interest rate and time to

maturity. It is also assumed that all coupons are reinvested at the same rate.

Yield to Worst: The yield to maturity if the worst possible bond repayment takes place. If market yields are higher than the coupon, the yield to worst would assume no prepayment. If

market yields are below the coupon, the yield to worst would assume prepayment. In other words, yield to worst assumes that market yields are unchanged. Normally this value is not

aggregated since it varies but if a weighted average value is used for a Fund then the figure will reflect the values of the underlying issues, based on the size of each holding.

Important Disclosures



51

This document is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares of the Luxembourg-domiciled

SICAV Franklin Templeton Investment Funds (the “Fund”). Nothing in this document should be construed as investment advice.

Subscriptions to shares of the Fund can only be made on the basis of the current prospectus of the Fund, accompanied by the latest available audited annual report and the latest semi-annual

report if published thereafter. An investment in the Fund entails risks which are described in the Fund's prospectus.

The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance is not an indicator or a

guarantee of future performance. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, your performance may also be

affected by currency fluctuations.

In emerging markets, the risks can be greater than in developed markets. Investments in derivative instruments entail specific risks that may increase the risk profile of the fund and are more

fully described in the Fund’s prospectus. If the fund invests in a specific sector or geographical area, the returns may be more volatile than a more diversified fund.

No shares of the Fund may be directly or indirectly offered or sold to residents of the United States of America. Shares of the Fund are not available for distribution in all jurisdictions and

prospective investors should confirm availability with their local Franklin Templeton Investments representative before making any plans to invest.

Opinions expressed are the author’s at publication date and they are subject to change without prior notice. Any research and analysis contained in this document has been procured by Franklin

Templeton Investments for its own purposes and is provided to you only incidentally.

A copy of the latest prospectus, the annual report and semi-annual report, if published thereafter can be found, on our website: www.franklintempletongem.com or can be obtained, free of

charge, from the address below.

Issued by Franklin Templeton Investments (ME) Limited, authorized and regulated by the Dubai Financial Services Authority.

Dubai office: Franklin Templeton Investments, The Gate, East Wing, Level 2, Dubai International Financial Centre, P.O. Box 506613, Dubai, U.A.E., Tel.: +9714-4284100 Fax:+9714-4284140.

References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. An index is unmanaged and

one cannot invest directly in an index. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton fund.

© 2019 Franklin Templeton Investments. All rights reserved.

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

Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.

Important Disclosures (continued)



52

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.

Documents

Templeton Global Income Fund