Franklin Templeton Investment Funds Templeton Global Balanced Fund - A (acc) USD Templeton Global Equity Group Data as of 31 March 2018
Franklin Templeton Investment Funds
Templeton Global Balanced Fund - A (acc) USD
Templeton Global Equity Group
Data as of 31 March 2018
Templeton Global Balanced Fund
2
Table of Contents
Investment Capabilities Overview............................................................................................3
Franklin Templeton Investments—A Trusted, Long-Term Partner in Investment
Management
.......................4
We Consider Sustainability in All That We Do.........................................................................5
Who Is Franklin Templeton Investments?................................................................................6
Extensive Global Presence......................................................................................................7
Cornerstones..........................................................................................................................8
Why Templeton Global Balanced Fund?..................................................................................9
Investment Objective and Characteristics..............................................................................10
Templeton’s Investment Philosophy.......................................................................................11
Templeton Global Equity Investment Process........................................................................12
ESG Assessments—Case Studies........................................................................................17
Investment Process—Global Interest Rate, Currency, Sovereign Credit Positioning................18
Global Research—Multiple Perspectives/Lenses................................................................... 19
Isolating Risk Exposures.......................................................................................................20
Summary..............................................................................................................................21
What are the Key Risks?......................................................................................................22
Geographic Allocation—Total................................................................................................23
Geographic Allocation—Equity..............................................................................................24
Geographic Allocation—Fixed Income................................................................................... 25
Sector Allocation—Equity......................................................................................................26
Sector Allocation—Fixed Income...........................................................................................27
Currency Allocation—Fixed Income.......................................................................................28
Quality Allocation—Fixed Income..........................................................................................29
Top Ten Holdings—Equity.....................................................................................................30
Portfolio Characteristics—Total............................................................................................. 31
Discrete Performance........................................................................................................... 32
Historical Performance..........................................................................................................33
Calendar Year Returns......................................................................................................... 34
Performance Risk Statistics.................................................................................................. 35
Management Profile..............................................................................................................36
Glossary...............................................................................................................................38
Important Disclosures...........................................................................................................40
Source: Franklin Templeton Investments (FTI), as of 31 March 2018, 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.
3
Templeton Global Balanced Fund
Investment Capabilities Overview
FRANKLIN TEMPLETON INVESTMENTS
Total Combined Assets Under Management : US$737.5 Billion
2
Equity
5
Fixed Income
8
Multi-Asset Solutions
11
Alternatives
AUM
US$315.0 Billion US$290.0 Billion US$124.0 Billion US$16.2 Billion
CAPABILITIES
•
Value
•
Government
•
Income
•
Commodities
•
Deep Value
•
Municipals
•
Real Return
•
Infrastructure
•
Core Value
•
Corporate Credit
•
Balanced/Hybrid
•
Real Estate
•
Blend
•
Bank Loans
•
Total Return
•
Hedge Funds
•
GARP
•
Securitised
•
Target Date/Risk
•
Private Equity
•
Growth
•
Multi-Sector
•
Absolute Return
•
Convertibles
•
Currencies
•
Tactical Asset Allocation
•
Sector
•
Sukuk
•
Managed Volatility
•
Shariah
•
Smart Beta
INVESTMENT
•
Templeton Global Equity Group (1940)
•
Franklin Templeton Fixed Income Group (1970)
•
Franklin Templeton Multi-Asset Solutions (1996)
•
Franklin Real Asset Advisors (1984)
TEAMS
•
Franklin Equity Group (1947)
•
Templeton Global Macro (1986)
•
Franklin SystematiQ (2011)
•
Darby Overseas Investments (1994)
•
Franklin Mutual Series (1949)
•
Franklin LAM-Fixed Income (1993)
•
K2 Advisors (1994)
•
Franklin Templeton Emerging Markets Equity
(1987)
•
Pelagos Capital Management (2005)
5889
Franklin Templeton Investments—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
• 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
Templeton Global Balanced Fund
4
Franklin Templeton Investments—A Trusted, Long-Term Partner in Investment
Management
5888
ESG and Corporate Sustainability
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 recognize 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 organization
ESG considerations at the corporate level that impact our business:
Environmental Impact
Energy usage
Greenhouse gases
Waste/recycling
Water consumption
Social Factors
Diversity and inclusion
Talent management(attracting, retaining top talent)
Charitable giving
Customer privacy and data security
Employee volunteering
Governance
Anti-money laundering
Code of ethics/conduct
Compliance
Executive compensation
Enterprise risk management
ESG investment integration
Templeton Global Balanced Fund
5
We Consider Sustainability in All That We Do
Who Is Franklin Templeton Investments?
An Investment Management Organisation• Focusing on research and investment management with more than 600
investment professionals covering all major asset classes
• Serving the needs of investors worldwide with a dedicated team of investment professionals
• Providing the resources, expertise, experience and commitment to ensure outstanding service to our clients
• Offering a broad range of investment strategies and vehicles
Franklin Templeton Investments total firm assetsUS$737.5 billion as of 31 March 20182018
Bissett Investment Management joins Franklin Templeton Investments2000
Franklin Resources, Inc. (BEN), stock is added to S&P 500 Index1998
Mutual Series joins Franklin Templeton Investments1996
Templeton joins Franklin Templeton Investments1992
Franklin Resources, Inc., stock listed and begins trading on New York Stock Exchange1986
Franklin Resources, Inc., moves offices from New York to California1973
Franklin Resources, Inc., formed as a holding company going public as BEN1971
Franklin Distributors, Inc., introduces its first mutual funds1947
Fiduciary Trust Company International joinsFranklin Templeton Investments2001
0718
Templeton Global Balanced Fund
6
Investment professionals include portfolio managers, analysts and traders.
As of 31 March 2018.
Who Is Franklin Templeton Investments?
Extensive Global Presence
0719
11 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
Frankfurt
Templeton Global Balanced Fund
7
As of 31 March 2018.
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
Templeton Global Balanced Fund
8
Cornerstones
Why Templeton Global Balanced Fund?
Growth and Income• Long-term, fundamental research
• Focus on sustainable global capital appreciation and income 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
• 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
0727
Templeton Global Balanced Fund
9
Why Templeton Global Balanced Fund?
FTIF Templeton Global Balanced Fund (the “fund”) seeks capital appreciation and current income, consistent with prudent investment management, by investing principally in equity and government securities issued by entities throughout the world, including Emerging Markets. The Investment Manager anticipates that the majority of the fund’s portfolio will normally be invested in equity securities. The fund will seek income by investing in fixed and floating rate debt securities and debt obligations of governments, government-related or corporate issuers worldwide.
At no time will the fund invest more than 40% of its total net assets in fixed income securities.
Investment Objective and Characteristics
0721
Templeton Global Balanced Fund
10
Investment Objective and Characteristics
We Utilise 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 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
“The best bargains are those stocks having the lowest prices in relation to possible earning power of future years.”
—Sir John TempletonOctober 1957
2880
Templeton Global Balanced Fund
11
Templeton’s Investment Philosophy
Templeton’s Valuation-Driven Investment Process
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 31 March 2018, 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
Identify material ESG issues
Five-year financial forecasts
Management/supplier/competitive evaluation
Upside/downside return quantification
Recommendation of Bargain List candidates
Presentation of investment thesis
Investment debateand critique: “Devil’s Advocate”
ESG “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
Ongoing ESG Monitoring
Disciplined sell methodology
Weekly peer review and risk analytics
54321
TEMPLETON’S BOTTOM-UP STOCK SELECTION PROCESS
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Templeton Global Balanced Fund
12
Templeton Global Equity Investment Process
A Bottom-Up Research Process Leverages Global Capabilities Across Market Cap Spectrum
The above chart is for illustrative 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
• Identify material ESG issues– Environmental– Social– Governance
• Most attractively valued companies based on valuation
2. In-Depth Fundamental Analysis
• Develop research models– Revenue drivers; growth
potential– Assessment of ESG factors
on long-term risk/return– Operating costs– Capital expenditures– Capital allocation– Retained capital– Competitor analysis
• Five-year financial forecasts– Emphasis on future earnings
potential– Cash flow potential
• Upside/downside return quantification
• 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– ESG “Devil’s Advocate”
• Director of Research approval
2940
Templeton Global Balanced Fund
13
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
2940
Templeton Global Balanced Fund
14
Portfolio Manager Stock Selection Decisions & Oversight
Bottom-Up Portfolio Construction—Step 4
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 100 securities, individual portfolios may vary, depending on various factors, such as portfolio size or investment strategy.
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
Portfolio-SpecificFeatures
Mandate parameters
Geographic/sector constraints
Portfoliocash flow
Source of Funds List
Core List
Bargain List
2940
Templeton Global Balanced Fund
15
Portfolio Monitoring and Risk Management—Step 5
The above chart is for illustrative and discussion purposes only.
Ongoing Valuation Analysis Disciplined Sell Methodology Integrated Risk Approach
Research team closely monitorsinvestment thesis including ESG factors 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
• Ongoing assessment of material ESG issues provides another way to quantify potential downside risk
• Portfolio risk is managed through sector and geographic diversification and weekly peer review process
• Investment Risk Management Group—an independent team of risk specialists reporting directly to the CEO—performs a risk oversight function and can consult with the portfolio managers to provide unbiased risk insights
TEMPLETON GLOBAL EQUITY GROUP
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Templeton Global Balanced Fund
16
ESG Assessments—Case Studies
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.
5960
Environmental Social GovernanceHeidelbergCement KasikornBank Petrofac
• During our ESG Assessment of HeidelbergCement, a leading building materials company based in Germany, we observed a significant increase in carbon intensity, which presented the risk of increased costs linked to carbon pricing or regulatory caps on emissions.
• We raised these concerns with management to confirm that the company had policies and programmes in place to manage future emissions. The company provided data showing that their carbon intensity had actually been declining per ton of cement produced over the past several years.
• Emissions have been stable during a period of rising production, and the company has generated relatively low emissions per sales compared to peers. The company has also instated a new 2030-based carbon target, and is working to increase the energy efficiency and the proportion of alternate fuels to 30% by FY2020, which is among the strongest targets in the construction materials industry.
• KasikornBank, a major bank in Thailand, financed the construction of Xayaburi Dam in Laos. A non-governmental organisation (NGO) claimed it had received substantial opposition to the dam from residents. Protestors voiced concerns the dam would have negative effects on the nearby communities, such as forced displacement, the end to gold panning in the river and difficult access to forest products.
• We contacted the company regarding these potential ESG concerns. The bank believed it complied with Laos’ social and environmental laws, based on World Bank standards. KasikornBank had an established ESG Governance System for all credit underwriting, third-party technical advisors to identify areas of non-compliance and direct any necessary corrective actions, and a requirement to submit periodic Environmental Management Reports on projects for monitoring purposes.
• Multiple ESG concerns would have indicated inadequate risk structures and would have been factored into our determination of the company’s valuation. However, this was not the case, as no controversies have been reported since this incident.
• Petrofac is a large engineering and construction company focusing on the oil and gas industry in the Middle East. Its stock fell sharply on news of the UK Serious Fraud Office’s (SFO) investigation of bribery, corruption and money laundering by Petrofac and its officers, including the CEO and COO.
• We did not expect the SFO to investigate Petrofac as an earlier investigation by Freshfields and KPMG, which was shared with SFO, indicated that Petrofac’s directors were not aware of misconduct and there was no evidence of bribes.
• The reputational impact of the SFO’s investigation will likely have a negative impact on new contracts. This could create financial stress as the company’s balance sheet is already stretched. Also, the SFO’s investigation highlights corporate governance problems, which could lead to further de-rating, especially if the CEO and COO are charged with bribery.
Templeton Global Balanced Fund
17
ESG Assessments—Case Studies
Investment Process—Global Interest Rate, Currency, Sovereign Credit Positioning
PM Team• Potential Return
vs. Expected Risk• Global Allocations
Trading• Trade Structuring• Market Flows• Local Execution/
Settlement
Risk Modelling• VaR• Correlations• Scenario/Stress
Duration Ideas
Currency Ideas
Sovereign Credit Ideas
Best Execution
Risk Analysis
In-DepthCountry Analysis
Macro Models/Analysis
Local Asset ManagementPerspectives
GLOBAL RESEARCHPORTFOLIO CONSTRUCTION
AND IMPLEMENTATION
PORTFOLIO
Review/Performance AttributionFeedback Feedback
SOURCES OF POTENTIAL ALPHA
0535
Templeton Global Balanced Fund
18
The above chart is for illustrative and discussion purposes only.
Investment Process—Global Interest Rate, Currency, Sovereign Credit Positioning
Global Research—Multiple Perspectives/Lenses
COUNTRY ANALYSIS• Fundamentals• Monetary and fiscal policy• Macroeconomic disequilibria• Capacity for change and
policy implementation• Country visits• Meetings with policymakers
MACRO MODELLING• Currency and interest rate valuation• Currency models
– Purchasing Power Parity (PPP), equilibrium exchange rates, interest rate differentials
• Interest rate models– Econometric analysis, Taylor
Rule, yield curve analysis• Trading
– Short-term technicals and flows• Ad hoc thematic research
– Scenario, shock and theme/trend analysis
LOCAL PERSPECTIVE1
• Local/regional perspectives– Australia– Brazil– Canada– China2
– India– Malaysia– Mexico– Poland– South Korea– United Arab Emirates
0537
Templeton Global Balanced Fund
19
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).
2. Includes individuals that are not employees of Franklin Resources, Inc. (FRI) or wholly owned subsidiaries of FRI. However, these individuals are part of our joint venture or strategic partnership relationships worldwide and are an integral component
of our overall fixed income research efforts.
Global Research—Multiple Perspectives/Lenses
• Our flexible investment approach allows us to manage interest rate (duration), currency and sovereign credit exposures and risksindependently
• For example, if we find an attractive local interest rate opportunity in a country, but find the currency unattractive, we can hedge out the currency risk, or cross-hedge the currency to a different currency that we do find attractive
• Example: Long maturity local Mexico bonds (denominated in Mexican pesos) cross-hedged to Indian rupees
Isolating Risk Exposures
Step 1 = Purchase peso-denominated Mexican bond
Step 2 = Cross-hedge peso risk into Indian rupee risk
Result = “Rupee-denominated” long-dated Mexican debt
Cross-Hedge
Mexican Interest Rate Risk
Indian Rupee Risk=
Single Security Hedge-Out Mexican Peso and Hedge-In Indian Rupee Result
+Indian RupeeMexican Peso
Mexican Interest Rate Risk
Mexican Peso Risk-
0545
Templeton Global Balanced Fund
20
For illustrative purposes only; not representative of any current holdings.
Isolating Risk Exposures
Templeton Global Balanced Fund
21
Fund Identifiers
ISIN Code LU0128525689
SEDOL Code 7116580
Bloomberg Code TEMGBLA LX
Templeton Global Balanced Fund - A (acc) USD
As of 31 March 2018
Summary
Portfolio Manager(s)
Michael Hasenstab, PhD United States
Peter Wilmshurst, CFA Australia
Sonal Desai, PhD United States
Alan Chua, CFA Singapore
Tian Qiu, CFA Hong Kong
Fund Ratings (31 March 2018)
Overall Morningstar Rating™
«««
Summary of Investment Objective
The Fund seeks capital appreciation and current income by investing principally in
equity securities and government debt securities issued by entities throughout the
world, including emerging markets. The portfolio manager anticipates that the majority
of the Fund’s portfolio is normally invested in equity or equity-linked securities.
Morningstar Category™ USD Moderate Allocation
Investment Style Balanced
Fund Inception Date 1 June 1994
Share Class Inception Date 14 May 2001
Benchmark Custom 65% MSCI ACWI + 35% JP
Morgan Global Government Bond Index
Base Currency for Fund USD
Base Currency for Share Class USD
Total Net Assets (USD) 954,692,402.67
Asset Allocation Equity: 64.33%
Fixed Income: 18.18%
Cash & Cash Equivalents: 17.49%
Number of Issuers 113
Total Expense Ratio 1.64%
Holdings of the same issuer have been combined.
© Morningstar, Inc. 2018. 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.
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Asset Allocation figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
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.
Templeton Global Balanced Fund
22
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 equity, equity-related and debt securities around the world. Such securities have historically been subject to significant price movements that
may occur suddenly due to equity and bond market or company-specific factors. 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, currency risk, emerging markets risk, liquidity risk, derivatives 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?
23
Templeton Global Balanced Fund
Geographic Allocation—Total
Templeton Global Balanced Fund
vs. Custom 65% MSCI ACWI + 35% JP Morgan Global Government Bond Index
As of 31 March 2018
Cash & Cash Equivalents
Other
Australia / New Zealand
Mid-East / Africa
Latin America / Caribbean
Asia
Europe
North America
0% 10% 20% 30% 40% 50% 60%
Templeton Global Balanced Fund
Custom 65% MSCI ACWI + 35% JP Morgan
Global Government Bond Index
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Portfolio % Index % Over/Under %
North America 25.98 54.96 -28.99
United States 24.56 52.31 -27.75
Canada 1.41 2.65 -1.24
Europe 24.36 28.55 -4.19
United Kingdom 9.26 6.79 2.48
France 4.81 5.47 -0.66
Germany 2.52 4.26 -1.74
Netherlands 2.15 1.48 0.68
Switzerland 1.92 1.88 0.04
Italy 1.70 3.27 -1.57
Spain 0.00 2.44 -2.44
Other 1.99 2.96 -0.97
Asia 21.10 14.17 6.93
South Korea 5.96 0.00 5.96
Japan 5.33 12.98 -7.65
India 4.89 0.00 4.89
China 2.76 0.00 2.76
Other 2.16 1.20 0.97
Latin America / Caribbean 9.73 0.00 9.73
Mexico 3.66 0.00 3.66
Brazil 3.64 0.00 3.64
Colombia 1.74 0.00 1.74
Other 0.69 0.00 0.69
Mid-East / Africa 0.80 0.11 0.69
Israel 0.71 0.11 0.60
Ghana 0.08 0.00 0.08
Australia / New Zealand 0.00 2.20 -2.20
Australia 0.00 2.16 -2.16
New Zealand 0.00 0.04 -0.04
Other 0.54 0.00 0.54
Supranational 0.54 0.00 0.54
Cash & Cash Equivalents 17.49 0.00 17.49
Templeton Global Balanced Fund
MSCI All Country World Index
Latin America / Caribbean
Australia / New Zealand
Mid-East / Africa
Asia
Europe
North America
0% 12% 24% 36% 48% 60%
24
Templeton Global Balanced Fund
Weightings as percent of equity. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Templeton Global Balanced Fund
vs. MSCI All Country World Index
As of 31 March 2018
Geographic Allocation—Equity
Portfolio % Index % Over/Under %
North America 40.38 55.23 -14.84
United States 38.18
52.28
-14.10
Canada 2.20
2.94
-0.75
Europe 37.87 21.46 16.41
United Kingdom 14.40
5.64
8.76
France 7.48
3.56
3.92
Germany 3.92
3.16
0.76
Netherlands 3.35
1.20
2.15
Switzerland 2.98
2.54
0.44
Italy 2.65
0.82
1.83
Ireland 1.81
0.15
1.66
Spain 0.00
1.05
-1.05
Others 1.29 3.33 -2.05
Asia 20.64 18.47 2.18
Japan 8.29
7.97
0.32
China 4.29
3.65
0.64
South Korea 3.74
1.84
1.90
India 1.59
0.99
0.60
Hong Kong 1.23
1.17
0.05
Singapore 0.85
0.44
0.41
Taiwan 0.00
1.43
-1.43
Others 0.66 0.98 -0.32
Mid-East / Africa 1.10 1.13 -0.02
Israel 1.10
0.15
0.96
Others 0.00 0.98 -0.98
Australia / New Zealand 0.00 2.20 -2.20
Australia 0.00
2.15
-2.15
New Zealand 0.00
0.05
-0.05
Latin America / Caribbean 0.00 1.52 -1.52
Others 0.00 1.52 -1.52
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.
Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Other
Supranational
Non-EMU Europe
EMU Europe
Middle East / Africa
Japan
Asia ex-Japan
USA
Non-US Americas
-35% -14% 7% 28% 49% 70%
Templeton Global Balanced Fund
JP Morgan Global Government Bond Index
Templeton Global Balanced Fund
25
Geographic Allocation—Fixed Income
Templeton Global Balanced Fund
vs. JP Morgan Global Government Bond Index
As of 31 March 2018
Portfolio %
Index % Over/Under %
AMERICAS 61.67 40.23 21.44
NON-US AMERICAS 61.67 1.35 60.32
Mexico 33.98 0.00 33.98
Brazil 16.62 0.00 16.62
Colombia 7.94 0.00 7.94
Argentina 3.14 0.00 3.14
Canada 0.00 1.35 -1.35
USA 0.00 38.89 -38.89
ASIA 35.68 21.87 13.81
ASIA EX-JAPAN 35.68 1.64 34.04
India 17.66 0.00 17.66
South Korea 16.20 0.00 16.20
Philippines 1.82 0.00 1.82
Australia 0.00 1.64 -1.64
JAPAN 0.00 20.23 -20.23
MIDDLE EAST /
AFRICA
0.39 0.00 0.39
Ghana 0.39 0.00 0.39
EUROPE 0.00 37.89 -37.89
EMU EUROPE 0.00 29.63 -29.63
France 0.00 8.09 -8.09
Italy 0.00 7.61 -7.61
Germany 0.00 5.50 -5.50
Spain 0.00 4.73 -4.73
Belgium 0.00 2.01 -2.01
Netherlands 0.00 1.70 -1.70
NON-EMU EUROPE 0.00 8.26 -8.26
United Kingdom 0.00 7.47 -7.47
Denmark 0.00 0.48 -0.48
Sweden 0.00 0.32 -0.32
SUPRANATIONAL 2.47 0.00 2.47
OTHER -0.21 0.00 -0.21
Templeton Global Balanced Fund
26
Weightings as percent of equity. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Utilities
Real Estate
Consumer Staples
Materials
Telecommunication Services
Industrials
Consumer Discretionary
Energy
Information Technology
Health Care
Financials
0% 6% 12% 18% 24% 30%
Sector Allocation—Equity
Templeton Global Balanced Fund
MSCI All Country World Index
Templeton Global Balanced Fund
As of 31 March 2018
vs. MSCI All Country World Index
Portfolio % Index % Over/Under %
Financials 21.74 18.69 3.05
Banks
12.97 10.43 2.54
Diversified Financials
5.01 4.29 0.71
Insurance
3.76 3.97 -0.20
Health Care 16.23 10.63 5.60
Pharmaceuticals, Biotechnology & Life Sciences
14.74 7.04 7.70
Health Care Equipment & Services
1.49 3.59 -2.10
Information Technology 14.86 18.84 -3.98
Software & Services
7.56 10.54 -2.98
Technology Hardware & Equipment
6.47 4.96 1.51
Semiconductors & Semiconductor Equipment
0.83 3.34 -2.51
Energy 11.07 6.20 4.86
Consumer Discretionary 8.48 12.26 -3.78
Media
2.44 2.07 0.37
Automobiles & Components
2.35 2.56 -0.21
Consumer Durables & Apparel
1.87 1.95 -0.08
Retailing
1.81 3.97 -2.16
Consumer Services
0.00 1.71 -1.71
Industrials 8.24 10.85 -2.61
Capital Goods
7.70 7.69 0.01
Transportation
0.54 2.16 -1.62
Commercial & Professional Services
0.00 1.00 -1.00
Telecommunication Services 7.19 2.89 4.30
Materials 5.55 5.35 0.19
Consumer Staples 3.82 8.40 -4.58
Food, Beverage & Tobacco
1.65 4.83 -3.18
Food & Staples Retailing
1.34 1.65 -0.31
Household & Personal Products
0.83 1.92 -1.09
Real Estate 2.14 2.99 -0.85
Utilities 0.70 2.90 -2.20
27
Supranational
Derivatives
US Treasuries/Agencies
Local Curr. Govt/Agency Bonds: Non-Investment Grade
Local Curr. Govt/Agency Bonds: Investment Grade
-2% 15% 32% 49% 66% 83%
Templeton Global Balanced Fund
vs. JP Morgan Global Government Bond Index
As of 31 March 2018
Sector Allocation—Fixed Income
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.
Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Portfolio % Index % Over/Under %
Local Curr. Govt/Agency Bonds 97.74 61.11 36.63
Investment Grade 77.60 61.11 16.48
Non-Investment Grade 20.14 0.00 20.14
US Treasuries/Agencies 0.00 38.89 -38.89
Derivatives -0.21 0.00 -0.21
Supranational 2.47 0.00 2.47
Templeton Global Balanced Fund
Templeton Global Balanced Fund
JP Morgan Global Government Bond Index
Templeton Global Balanced Fund
28
Currency Allocation—Fixed Income
Templeton Global Balanced Fund
vs. JP Morgan Global Government Bond Index
As of 31 March 2018
Swedish Krona
Danish Krone
British Pound
Euro
Ghanaian Cedi
Japanese Yen
Australian Dollar
South Korean Won
Philippine Peso
Indian Rupee
U.S. Dollar
Canadian Dollar
Argentine Peso
Colombian Peso
Brazilian Real
Mexican Peso
0% 15% 30% 45% 60% 75%
Portfolio % Index % Over/Under %
AMERICAS 74.81 40.23 34.57
NON-US DOLLAR 64.14 1.35 62.79
Mexican Peso 36.45 0.00 36.45
Brazilian Real 16.62 0.00 16.62
Colombian Peso 7.94 0.00 7.94
Argentine Peso 3.14 0.00 3.14
Canadian Dollar 0.00 1.35 -1.35
U.S. DOLLAR 10.67 38.89 -28.22
ASIA 24.81 21.87 2.93
ASIA EX-JAPAN 24.81 1.64 23.17
Indian Rupee 22.27 0.00 22.27
Philippine Peso 1.82 0.00 1.82
South Korean Won 0.71 0.00 0.71
Australian Dollar 0.00 1.64 -1.64
JAPANESE YEN 0.00 20.23 -20.23
MIDEAST/AFRICA 0.39 0.00 0.39
Ghanaian Cedi 0.39 0.00 0.39
EUROPE 0.00 37.89 -37.89
Euro 0.00 29.63 -29.63
NON-EURO 0.00 8.26 -8.26
Euro 0.00 29.63 -29.63
British Pound 0.00 7.47 -7.47
Danish Krone 0.00 0.48 -0.48
Swedish Krona 0.00 0.32 -0.32
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.
Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Templeton Global Balanced Fund
JP Morgan Global Government Bond Index
NR
B-
B
BB-
BBB-
BBB
A-
A+
AA-
AA
AA+
AAA
0% 20% 40% 60% 80%
Templeton Global Balanced Fund
JP Morgan Global Government Bond Index
Templeton Global Balanced Fund
29
The information only pertains to the fixed income component of the portfolio.
Weightings as percent of fixed income. Percentage may not total 100% due to rounding.
Ratings shown are assigned by one or more Nationally Recognized Statistical Rating Organizations ('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. Cash and equivalents as well as derivatives are excluded from this breakdown. As a
result, the chart does not reflect the fund's total net assets.
Templeton Global Balanced Fund
vs. JP Morgan Global Government Bond Index
As of 31 March 2018
Quality Allocation—Fixed Income
Portfolio % Index % Over/Under %
AAA 2.46 65.20 -62.74
AA+ 0.00 2.01 -2.01
AA 16.17 0.00 16.17
AA- 0.00 20.23 -20.23
A+ 0.00 7.61 -7.61
A- 33.91 0.31 33.60
BBB 9.74 0.00 9.74
BBB- 17.62 0.00 17.62
BB- 16.58 0.00 16.58
B 3.13 0.00 3.13
B- 0.39 0.00 0.39
NR 0.00 4.64 -4.64
Investment Grade
79.90 95.36 -15.46
Non-Investment Grade
20.10 4.64 15.46
Templeton Global Balanced Fund
30
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
SAMSUNG ELECTRONICS CO LTD South Korea Technology Hardware & Equipment 1.62
ROYAL DUTCH SHELL PLC United Kingdom Energy 1.34
ORACLE CORP United States Software & Services 1.32
MICROSOFT CORP United States Software & Services 1.31
BP PLC United Kingdom Energy 1.30
ALPHABET INC United States Software & Services 1.27
SOFTBANK GROUP CORP Japan Telecommunication Services 1.07
SUNTORY BEVERAGE & FOOD LTD Japan Food Beverage & Tobacco 1.06
CITIGROUP INC United States Banks 1.05
CAPITAL ONE FINANCIAL CORP United States Diversified Financials 1.03
Total 12.38
Top Ten Holdings—Equity
Templeton Global Balanced Fund
As of 31 March 2018
31
Portfolio Characteristics—Total
Templeton Global Balanced Fund
vs. MSCI All Country World Index & JP Morgan Global Government Bond Index
As of 31 March 2018
Templeton Global Balanced Fund
Total Characteristics Portfolio
Blended Yield
2.98%
Fixed Income Characteristics Portfolio Benchmark
Average Credit Quality
BBB+ AA
Average Duration 2.56 Yrs 8.00 Yrs
Average Weighted Maturity 3.26 Yrs 9.96 Yrs
Yield to Maturity 7.27% 1.36%
Yield to Worst 7.27% 1.36%
Equity Characteristics Portfolio Benchmark
Price to Earnings (12-mo Trailing) 16.04x 18.84x
Price to Cash Flow 6.93x 11.45x
Price to Book 1.47x 2.23x
Dividend Yield 2.56% 2.42%
Market Capitalisation (Millions USD) 114,232 113,218
Market Capitalisation Breakdown in USD Portfolio %
<2.0 Billion 0.57
2.0-5.0 Billion 4.79
5.0-10.0 Billion 8.65
10.0-25.0 Billion 16.07
25.0-50.0 Billion 21.07
>50.0 Billion 48.85
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Average Duration, Average Weighted Maturity, Yield to Maturity, Yield to Worst and Blended Yield reflect certain derivatives held in the portfolio (or their underlying reference assets).
Source: Franklin Templeton Investments. 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). 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 and unrated securities 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.
Past performance is not an indicator or a guarantee of future performance.
Templeton Global Balanced Fund
32
Discrete Performance
Discrete Annual Performance (%)
Inception
Date
03/17
03/18
03/16
03/17
03/15
03/16
03/14
03/15
03/13
03/14
Templeton Global Balanced Fund - A (acc) USD—Net of Fees 14.5.2001 8.45 10.85 -8.27 -2.81 15.73
Custom 65% MSCI ACWI + 35% JP Morgan Global Government Bond Index 12.74 8.68 -0.24 2.55 11.34
Effective 31 July 2017, Templeton Global Balanced Fund changed its benchmark to the Custom 65% MSCI All Country World + 35% JP Morgan Global Government Bond Index.
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).
The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details.
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 franklintempleton.lu for current performance.
Templeton Global Balanced Fund - A (acc) USD
As of 31 March 2018
Annualised Total Returns (%)
Inception
Date 1 Yr 3 Yrs 5 Yrs 10 Yrs
Since
Incept
Templeton Global Balanced Fund - A (acc) USD—Net of Fees 14.5.2001 8.45 3.31 4.40 3.08 5.20
Custom 65% MSCI ACWI + 35% JP Morgan Global Government Bond Index 12.74 6.92 6.89 5.10 6.29
Templeton Global Balanced Fund
Historical Performance
Templeton Global Balanced Fund - A (acc) USD
As of 31 March 2018
Effective 31 July 2017, Templeton Global Balanced Fund changed its benchmark to the Custom 65% MSCI All Country World + 35% JP Morgan Global Government Bond Index.
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).
The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details.
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 franklintempleton.lu for current performance.
33
Cumulative Performance (%)
Inception
Date 1 Mth 3 Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs
Since
Incept
Templeton Global Balanced Fund - A (acc) USD—Net of Fees 14.5.2001 -1.21 -0.58 -0.58 8.45 10.27 24.03 35.44 135.31
Custom 65% MSCI ACWI + 35% JP Morgan Global Government Bond Index -0.81 0.27 0.27 12.74 22.23 39.55 64.44 179.84
Templeton Global Balanced Fund
34
Effective 31 July 2017, Templeton Global Balanced Fund changed its benchmark to the Custom 65% MSCI All Country World + 35% JP Morgan Global Government Bond Index.
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).
The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details.
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 franklintempleton.lu for current performance.
Calendar Year Returns
Templeton Global Balanced Fund - A (acc) USD
As of 31 March 2018
YTD 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
-31%
-17%
-3%
11%
25%
-0.58
0.27
15.52
18.13
3.82
6.22
-6.12 -1.88 -2.74
3.34
17.89
12.98
17.97
11.37
-5.68 -1.82
5.81
11.22
21.35
23.13
-29.22 -25.96
Templeton Global Balanced Fund - A (acc) USD—Net of Fees Custom 65% MSCI ACWI + 35% JP Morgan Global Government Bond Index
Templeton Global Balanced Fund
35
Effective 31 July 2017, Templeton Global Balanced Fund changed its benchmark to the Custom 65% MSCI All Country World + 35% JP Morgan Global Government Bond Index.
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 Custom 65% MSCI ACWI + 35% JP Morgan Global Government Bond Index.
*Annualised.
Past performance is not an indicator or a guarantee of future performance.
As of 31 March 2018
Performance Risk Statistics
1 Yr 3 Yrs* 5 Yrs* 10 Yrs* 15 Yrs*
Standard Deviation (%):
Templeton Global Balanced Fund - A (acc) USD 6.61 9.37 8.99 14.67 13.06
Custom 65% MSCI ACWI + 35% JP Morgan Global
Government Bond Index
5.76 7.41 7.22 11.58 10.37
Tracking Error (%)^^ 2.64 3.98 3.60 4.55 4.11
Information Ratio^^ -1.62 -0.91 -0.69 -0.44 -0.32
Beta^^ 1.05 1.16 1.15 1.22 1.22
Sharpe Ratio 1.11 0.30 0.45 0.19 0.43
Templeton Global Balanced Fund - A (acc) USD
Performance Risk Statistics
PETER WILMSHURST, CFAExecutive Vice PresidentPortfolio Manager, Research AnalystTempleton Global Equity GroupFranklin Templeton Investments Australia LimitedMelbourne, Victoria, Australia
Peter Wilmshurst is an executive vice president in the Templeton Global Equity Group with research responsibility for banks in Europe, and Asian telecommunications companies. He is also the coordinator for the financials sector team and the portfolio manager of a number of Templeton's global portfolios.
Prior to joining Franklin Templeton in 1998, Mr. Wilmshurst was an equity portfolio manager and analyst with Norwich Investment Management in Australia andan actuary at MLC Life Company. He entered the financial services industry in 1993.
Mr. Wilmshurst holds a bachelor of economics degree and a master of economics degree from Macquarie University (Australia). He qualified as a Fellow of theInstitute of the Actuaries of Australia and as a Fellow of the Financial Services Institute of Australia. Mr. Wilmshurst is a Chartered Financial Analyst (CFA) charterholder and a past president of the CFA Society of Melbourne.
Templeton Global Balanced Fund
36
Management Profile
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.
Templeton Global Balanced Fund
Management Profile
37
Glossary
Templeton Global Balanced Fund
38
Average Credit Quality: The credit rating of a bond is an assessment of the creditworthiness of individuals and corporations. It is based upon the history of borrowing and repayment,
as well as the availability of assets and extent of liabilities. The average credit quality of a fund reflects the holdings of the underlying issues, based on the size of each holding. Usually
we quote the average credit quality as per Standard & Poor's or Moody's credit rating agencies.
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.
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)
Templeton Global Balanced Fund
39
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
Templeton Global Balanced Fund
40
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.
© 2018 Franklin Templeton Investments. All rights reserved.
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Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
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in connection with the MSCI data or the Fund described herein. Copying or redistributing the MSCI data is strictly prohibited.