Franklin Mutual Shares Fund—Class A
Product Profile
FUND CHARACTERISTICS
(AS OF 3/31/17)
NASDAQ Symbol
Fund Inception Date
Dividends
Investment Style
Benchmark
Lipper Classification
Morningstar Category™
Total Net Assets—All Share
Classes
Number of Issuers
Maximum Initial Sales Charge
First Quarter 2017
FUND DESCRIPTION
The fund seeks capital appreciation, with income as a secondary goal. Its strategy is focused on
undervalued mid- and large-cap equity securities, which may include foreign securities and, to a lesser
TESIX extent, distressed securities and merger arbitrage.
7/1/49
Semiannually in
September and
December
Deep Value
S&P 500 Index
Large-Cap Value
Funds
Allocation--85%+
Equity
15,839 million
PERFORMANCE DATA
Average Annual Total Returns for Periods Ended March 31, 2017 (%)
3 Mths*
YTD*
With Sales Charge
1 Yr
3 Yrs
5 Yrs
10 Yrs
Since Incept
(7/1/49)
-2.22
-2.22
12.53
4.37
9.32
3.96
11.84
Without Sales Charge
3.75
3.75
19.40
6.46
10.62
4.58
11.94
S&P 500 Index
6.07
6.07
17.17
10.37
13.30
7.51
N/A
Total Annual Operating Expenses—1.06%
Performance data represents past performance, which does not guarantee future results. Current performance may
differ from figures shown. The fund's investment return and principal value will change with market conditions, and you
may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL
105
BEN/(800) 342-5236 or visit franklintempleton.com for the most recent month-end performance.
5.75%
Average Annual Total Returns for Periods Ended March 31, 2017 (%)
THIRD-PARTY FUND DATA
Overall Morningstar Rating™
30
««««
As of March 31, 2017 the fund’s Class A shares
received a 4 star overall Morningstar Rating™,
measuring risk-adjusted returns against 139, 125 and
102 U.S.-domiciled Allocation--85%+ Equity mutual
funds and exchange traded funds over the 3-, 5- and
10- year periods, respectively. A fund’s overall rating is
derived from a weighted average of the performance
figures associated with its 3-, 5- and 10-year (if
applicable) rating metrics.
19.40
17.17
15
10.37
3.75
6.07
3.75
10.62
13.30
6.46
6.07
11.94
4.58
7.51
0.00
0
3 Mths*
YTD*
1 Yr
3 Yrs
Franklin Mutual Shares Fund—Class A Without Sales
Charge
5 Yrs
S&P 500 Index
10 Yrs
Since Incept
Calendar Year Returns As of March 31, 2017 (%)
36
27.74
15.61
3.75 6.07
32.39
-4.10 1.38
27.84 26.46
14.75 16.00
13.69
11.96
7.30
11.41
15.06
5.49
-38.10-37.00 2.97
-1.79 2.11
-2
-40
YTD 2017
2016
2015
2014
2013
2012
Franklin Mutual Shares Fund—Class A Without Sales
Charge
2011
2010
2009
2008
2007
S&P 500 Index
If the Fund's sales charge had been included, the returns would have been lower.
*Cumulative Total Returns.
For information related to the “Fund Characteristics,” “Third-Party Fund Data,” and “Performance Data” sections, please see
Explanatory Notes.
Not FDIC Insured | May Lose Value | No Bank Guarantee
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Franklin Mutual Shares Fund—Class A
First Quarter 2017
PORTFOLIO DIVERSIFICATION (AS OF 3/31/17)
Top Ten Holdings
Issuer Name
Country
Industry
% of Total
MEDTRONIC PLC
United States
Health Care Equipment & Services
3.22
MERCK & CO INC
United States
Pharmaceuticals, Biotechnology & Life
Sciences
2.77
PNC FINANCIAL SERVICES GROUP INC
United States
Banks
2.61
ELI LILLY & CO
United States
Pharmaceuticals, Biotechnology & Life
Sciences
2.46
SYMANTEC CORP
United States
Software & Services
2.26
MICROSOFT CORP
United States
Software & Services
2.24
TIME WARNER INC
United States
Media
2.07
AMERICAN INTERNATIONAL GROUP INC
United States
Insurance
2.00
BRITISH AMERICAN TOBACCO PLC
United Kingdom
Food Beverage & Tobacco
1.84
CHARTER COMMUNICATIONS INC
United States
Media
1.79
Total
23.26
Geographic Weightings vs. Benchmark (% of Total)
75.23
United States
United Kingdom
Sector Weightings vs. Benchmark (% of Total)
21.84
Financials
14.36
Information Technology
14.23
Health Care
14.15
13.91
100.00
7.83
22.08
0.00
Switzerland
2.51
0.00
South Korea
1.71
0.00
11.19
9.30
Consumer Staples
Ireland
Israel
1.53
0.00
Energy
0.89
0.00
Industrials
Denmark
0.88
0.00
Materials
Finland
0.84
0.00
Telecommunication Services
Germany
0.61
0.00
Netherlands
0.58
0.00
Cash & Cash Equivalents
0%
9.54
Consumer Discretionary
Real Estate
12.33
8.82
6.59
5.59
10.08
4.44
2.84
1.06
2.38
0.93
2.94
Utilities
0.56
Muni Securities
0.25
0.00
Cash & Cash Equivalents
0.00
3.19
7.40
0.00
20%
40%
60%
80%
100%
0%
7.40
6%
12%
18%
24%
30%
Franklin Mutual Shares Fund
S&P 500 Index
Portfolio Allocation
%
Equity
Cash & Cash Equivalents
Fixed Income
87.35
7.40
5.26
For information related to the “Portfolio Diversification” section, please see Explanatory Notes.
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Franklin Mutual Shares Fund—Class A
First Quarter 2017
PORTFOLIO CHARACTERISTICS (AS OF 3/31/17)—Fund vs. S&P 500 Index
Price to Earnings (12-mo Trailing)
Fund
Benchmark
13.77x
22.75x
Price to Book
1.78x
3.09x
Price to Cash Flow
9.59x
12.78x
85,641
163,919
Market Capitalization (Millions USD)
PERFORMANCE RISK STATISTICS - Class A
Modern Portfolio Theory (MPT) Statistics
(As of 3/31/17)
Performance Risk Statistics
Standard Deviation (%)
Alpha (%)
3 Years
5 Years
10 Years
9.59
9.47
14.03
-2.48
-1.10
-2.06
Beta
0.88
0.89
0.89
Sharpe Ratio
0.66
1.11
0.29
-1.18
-0.89
-0.72
Information Ratio
Tracking Error (%)
R-Squared (%)
3.32
3.00
4.07
89.57
91.23
93.06
Performance data represents past performance, which does not guarantee future
results. Current performance may differ from figures shown. The fund's investment
return and principal value will change with market conditions, and you may have a
gain or a loss when you sell your shares. Please call Franklin Templeton Investments
at (800) DIAL BEN/(800) 342-5236 or visit franklintempleton.com for the most recent
month-end performance.
GLOSSARY
Alpha: Alpha measures the difference between a fund's actual returns and its expected returns given its risk level as measured by its beta. A positive alpha figure indicates the fund has performed
better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund's beta. Some investors see alpha as a
measurement of the value added or subtracted by a fund's manager.
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%.
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 Capitalization: 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.
R-Squared: A measure of how much of a portfolio's performance can be explained by the returns from the overall market (or a benchmark index). If a portfolio's total return precisely matched that of
the overall market or benchmark, its R-squared would be 100. If a portfolio's return bore no relationship to the market's returns, its R-squared would be 0.
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.
Alpha, Beta, Information Ratio, R-Squared, and Tracking Error are measured against the S&P 500 Index.
For information related to the “Portfolio Characteristics” section, please see Explanatory Notes.
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Franklin Mutual Shares Fund—Class A
MARKET REVIEW
PERFORMANCE REVIEW AND CONTRIBUTORS TO PERFORMANCE
In the United States, the S&P 500 Index posted its
biggest quarterly increase since the final quarter of
2015. In addition, the S&P 500 reached new
record highs, aided by upbeat economic data in
the United States and globally, as well as solid US
corporate earnings. Expectations of pro-business
regulatory and policy moves by President Trump
and the Republican controlled Congress were also
a positive factor through much of the quarter. Nine
out of 11 major equity sectors advanced, led by
information technology, consumer discretionary,
health care, consumer staples and utilities. The
energy and telecommunication services sectors
declined.
Performance Review
US economic data were generally positive. Labor
market data indicated solid job growth, and a small
rise in the unemployment rate was widely viewed
as a sign that people who previously stopped
looking for work now feel more hopeful about
getting a job. The Institute for Supply
Management's (ISM's) Manufacturing Index rose
each month. The February ISM Manufacturing
Index, released in early March, reached its highest
level since August 2014. Housing data and
consumer confidence were generally positive,
while inflation increased on a year-over-year basis.
Fourth-quarter earnings figures reported during the
period showed year-over-year growth that was
stronger than the consensus expectation.
In January and February, the US Federal Reserve
(Fed) prepared investors for a potential interest
rate hike in March. At the March 15 Federal Open
Market Committee meeting, the target range for
the federal funds was increased by a quarter of a
percentage point to 0.75%-1.0%. Investors were
reassured by Fed Chair Janet Yellen's statements
that the central bank still intends to raise rates
gradually.
The S&P 500 Index stalled in March. Investors
became less certain that the Trump
administration's pro-growth agenda will be quickly
enacted, due in part to House Republicans
scrapping a vote on health care reform legislation.
Increases in US crude oil output and inventories
caused a decline in oil prices and energy sector
stocks.
First Quarter 2017
During the quarter, three of the fund's largest contributors to absolute performance were Symantec,
Medtronic, and Eli Lilly and Company. Symantec, a California-based technology company, continued to
improve operational performance, as reflected in its early February release of quarterly results that
exceeded consensus revenue and earnings estimates. Symantec's 2016 acquisition of Blue Coat Systems,
a cyber-defense technologies firm, aided quarterly revenues. In our view, the combination of a new
management team and recent acquisitions (Blue Coat and LifeLock) may lead to some near-term
uncertainty or volatility, but we believe that Symantec is making the right moves and is well positioned to be
a leader in technology security.
Shares of medical device maker Medtronic appreciated with the general market post elections in the US and
the optimism around the potential for favorable corporate tax reform by the new administration. In February,
investors also responded positively to quarterly results that were better than expected and reversed the
downbeat tone of Medtronic's prior earnings results in November 2016. Medtronic reiterated its guidance for
2017, which remains in line with its long-term expectation.
Shares of Eli Lilly and Company, a US-based pharmaceutical company, rose steadily during the period as
sentiment towards healthcare improved in general. Investors continued to gain confidence after Lilly
reiterated its solid 2017 guidance with its fourth quarter results in late January. Lilly's guidance included
strong double-digit earnings growth driven by meaningful operating margin expansion, which also bodes
well for future years beyond 2017. We continue to believe that Eli Lilly has a strong product growth story with
substantial room for margin expansion and one of the strongest earnings growth outlooks within the
industry.
The fund's largest detractors were Kroger, Rite Aid and Avaya. Kroger is a Cincinnati-based grocery retailer
that operates over 2,400 grocery and multi-department stores in 31 states. The stock price declined as
investors remained focused on the industry-wide impact of food price deflation, which is pressuring the
revenue growth of grocery retailers. Quarterly results released in early March reflected the pressure of food
price deflation on Kroger as revenues, earnings and gross margins disappointed. We believe food deflation
may persist through the first half of 2017, but the trend should prove to be transitory and begin to reverse as
farmers adjust their plantings and draw down their herds. Overall, Kroger remains among the strongest
grocery retailers and we continue to hold a favorable view of the stock due to the management's track
record of improving profitability, keeping a lid on costs, growing cash flow and returning capital to investors
through stock buybacks.
Shares of Rite Aid, a US-based drugstore chain, declined as a deal to be acquired by Walgreens Boots
Alliance remained mired in antitrust review by the Federal Trade Commission (FTC). According to press
reports, the FTC did not believe Walgreen's proposal to sell 865 drugstores to Fred's Inc. (not a fund
holding) was significant enough, while the ability of Fred's to acquire a larger number of stores was also a
concern. In late January, Walgreens and Rite Aid agreed to new acquisition terms, including a lower
purchase price and a later deadline (July 31) to complete the deal. We believe the acquisition is more likely
to happen than not if Walgreens and Rite Aid are willing to make further concessions to satisfy the FTC.
Avaya is a US-based communication company that was chiefly a hardware maker but is transitioning into a
software and services provider. The fund's investment in the company's securities declined. The company
filed for Chapter 11 bankruptcy in January as it attempts to restructure and reduce its debt load.
Portfolio Positioning
At quarter-end, the fund's investment in equities was 83.3% while the level of cash and cash equivalents
stood at 7.4%. In addition, 76.1% of foreign securities exposure was hedged back to the US dollar at
quarter-end. The fund added to a number of positions in the quarter. We increased our exposure to an
information technology company after shares dropped due to weak quarterly results and lowered full-year
earnings expectations. The latest results were a meaningful bump in the company's road to recovery.
However, we believe its turnaround remains intact and perceived the recent drop in the stock price as an
opportunity. We also added to our position in an energy infrastructure company. Conversely, we trimmed our
exposure to a US-based software company. The stock price has been steadily rising towards our estimate of
fair value on a series of positive earnings reports that reflect strong operational performance. Compared to
the benchmark, the fund continued to have a meaningful overweight in financials and sizable underweights
in information technology and industrials.
The fund had 3.9% of merger arbitrage exposure and nearly 5.4% invested in distressed debt. Merger and
acquisition (M&A) activity in 2016 was strong and we believe the trend will continue in 2017. Catalysts for
another busy year of M&A deals include the desire to enhance organic growth, ability to reduce costs
through scale, expectations of additional rate hikes by the US Federal Reserve and many companies sitting
on large sums of cash reserves. Private equity firms are also under pressure to deploy the collectively
significant amount of idle cash. After some high profile deals failed because of regulatory opposition, there is
a possibility the new Trump administration will be more permissive. Another drag on M&A activity may come
from tighter capital controls by China's government in order to curb the flow of capital leaving the country, as
Chinese companies were very active in M&A in 2016. On balance, we believe the forces encouraging M&A
The above commentary does not provide a complete analysis of every material fact regarding any market, region, industry, security, portfolio or pooled investment vehicle. Portfolio holdings
information, opinions and other market or economic information and data provided are as of the date of the commentary, unless another date is expressly indicated, and may change without notice.
Statements of fact cited by the manager have been obtained from sources considered reliable but no representation is made as to their completeness or accuracy. The manager’s assessment of a
particular industry, region, security, sector or investment is intended solely to provide insight into the manager’s investment process and is not a recommendation to buy or sell any security, nor
investment advice. References to particular securities or sectors are only for the limited purpose of illustrating general market or economic conditions and are not recommendations to buy or sell a
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security. Although historical data is no guarantee of future results, these insights may help you understand our investment management philosophy.
Franklin Mutual Shares Fund—Class A
First Quarter 2017
PERFORMANCE REVIEW AND CONTRIBUTORS TO PERFORMANCE (CONTINUED)
activity remain greater than the obstacles. We remain active in exploring merger arbitrage opportunities
(investing in one or both of the companies and constructed solely to benefit from deal completion) and are
working hard to make sure the potential rewards are significant enough to outweigh the risks that exist in the
current environment.
Within the credit space, the trend that began in 2015 of aggressive actions taken by private equity sponsors
to defend their investments continues to escalate. In our view, sponsors are using increasingly liberal
interpretations of credit agreements and bond indentures to take advantage of real and perceived holes in
credit documents. The purpose, in our experience, is to shift valuable assets beyond the reach of creditors
so that sponsors may extract more value for themselves. It has become a widespread phenomenon among
sponsors in the marketplace. Nonetheless, we believe pockets of value and places to invest are very likely
to be found. Over the medium-term, the new administration's pro-growth and business friendly policies may
be supportive of credit fundamentals in the United States. At the same time, industries will likely benefit to
differing extents. A recent example is health care, particularly hospitals, which were impacted by the
uncertainty surrounding the aborted effort to repeal and replace Obamacare. We are seeking opportunities
in this area as continued talk about another attempt to pass health care reform legislation is likely to drive
volatility in health care sector debt. Likewise, another potential exception may be the energy sector.
Companies that restructured their balance sheets as oil prices plunged may be uniquely positioned to take
advantage of firmer oil prices, and post reorganization equities could represent an opportunity if supply and
demand fundamentals improve over the near to intermediate term.
Outlook & Strategy
By many measures, US economic and corporate conditions are improving. However, we believe the
"reflation trade" that began to take off immediately after the US presidential election in November 2016 may
have gotten ahead of fundamentals. The inability of the Republican controlled congress and President
Donald Trump to pass health care legislation raises questions regarding the likelihood, timing and
magnitude of passing tax reform and infrastructure stimulus legislation, adding to our view that further
improvement in data and meaningful policy results are necessary to justify a continuation of the reflation
trade theme.
Looking at economic fundamentals, the uptick in economic activity and an improvement in commodity prices
from a year ago have positively affected sentiment regarding inflation. Economists and investors are no
longer nervous about the potential for deflation in the United States. Instead, prospects of stronger growth
and firming inflation are turning conversations towards improving corporate profits, potential corporate
pricing power, when companies may increase capital spending, and Fed's monetary policy path, including
the pace of interest rate increases and how to shrink its balance sheet.
At the same time, numerous political risks are still lurking and we believe the recent investor complacency,
as reflected in the subdued Chicago Board Options Exchange Volatility Index (commonly referred to as the
VIX) readings, leaves financial markets potentially more susceptible to bouts of volatility and weakness. In
such an environment, we expect to be nimble investors, seeking to take advantage of market reactions or
potential overreactions to events.
Improving economic conditions are likely to lead the Fed to cautiously raise interest rates this year, in our
view. Any rise in interest rates and steepening in yield curves would be positive for financials but negative
for "bond proxy" stocks, such as consumer staples and utilities. Whether the Organization of the Petroleum
Exporting Countries will maintain crude oil production cuts and how much of those cuts will be offset by
increased production in the United States will likely spur further volatility in the energy sector. We believe a
rebalancing of supply and demand eventually occurs, but the biggest uncertainty will be timing. Events in
Europe could also have repercussions for US markets. Forthcoming national elections in France, Germany,
and likely Italy before year-end, are low-probability but high-risk events. If elections play out as polls
suggest, and if the UK and the EU can begin constructive Brexit negotiations, we believe pent up corporate
demand and investor relief could lead to financial market gains. However, the effects of negative election
outcomes, particularly in France, would likely reverberate through global markets.
When it comes to our investment decisions, we maintain a bottom-up stock picking process that focuses on
buying good companies trading at discounts to their intrinsic values. Macroeconomic conditions and political
events do affect valuation. However, we do not make top-down sector or geographic positioning decisions
based on an anticipated event outcome.
The above commentary does not provide a complete analysis of every material fact regarding any market, region, industry, security, portfolio or pooled investment vehicle. Portfolio holdings
information, opinions and other market or economic information and data provided are as of the date of the commentary, unless another date is expressly indicated, and may change without notice.
Statements of fact cited by the manager have been obtained from sources considered reliable but no representation is made as to their completeness or accuracy. The manager’s assessment of a
particular industry, region, security, sector or investment is intended solely to provide insight into the manager’s investment process and is not a recommendation to buy or sell any security, nor
investment advice. References to particular securities or sectors are only for the limited purpose of illustrating general market or economic conditions and are not recommendations to buy or sell a
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security. Although historical data is no guarantee of future results, these insights may help you understand our investment management philosophy.
Franklin Mutual Shares Fund—Class A
First Quarter 2017
Investment Philosophy and Process
Franklin Mutual Series’ Unique Value Strategy
Bottom-Up Value Approach
• We seek to buy companies at a significant discount to their intrinsic value.
• We seek to understand and limit downside risk.
• We think and act like owners of the business.
Undervalued
Stocks
• Undervalued stocks comprise the bulk of our portfolios.
• We search for catalysts to unlock value:
– Corporate restructuring
Distressed
Securities
– Spin-offs
Merger
Arbitrage
– Share buybacks
– Our own initiatives
INVESTMENT AND MANAGEMENT TEAM (AS OF 3/31/17)
Mutual Shares Fund Management Team
Peter Langerman
Years with Firm
27
Years Experience
31
David Segal, CFA
14
26
Deborah Turner, CFA
24
25
Number of Members
14
Average Years Experience
24
Research Analysts
5
10
Traders
8
21
Franklin Mutual Series Team
Portfolio Managers/Analysts
WHAT ARE THE RISKS
All investments involve risks, including possible loss of principal. Value securities may not increase in price as anticipated or may decline further in value. Special
risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. The fund's investments in companies
engaged in mergers, reorganizations or liquidations also involve special risks as pending deals may not be completed on time or on favorable terms. The fund may
invest in lower-rated bonds, which entail higher credit risk. Please consult the prospectus for a more detailed description of the fund's risks.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
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Franklin Mutual Shares Fund—Class A
First Quarter 2017
EXPLANATORY NOTES
FUND CHARACTERISTICS
Number of Issuers: All portfolio holdings are subject to change. Holdings of the same issuer have been combined.
THIRD-PARTY FUND DATA
Morningstar Rating™: Source: Morningstar®, 3/31/17. For each mutual fund and ETF with at least a 3-year history, Morningstar calculates a Morningstar Rating™ based on how a fund ranks on a
Morningstar Risk-Adjusted Return measure against other funds in the same category. This measure takes into account variations in a fund's monthly performance, and does not take into account the
effects of sales charges, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4
stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The weights are: 100% 3-year rating for 36-59 months of total returns, 60% 5-year rating/40%
3-year rating for 60-119 months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. While the 10-year overall star rating formula
seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods. The Fund's Class A shares
received a Morningstar Rating of 4, 5 and 3 star(s) for the 3-, 5- and 10-year periods, respectively. Morningstar Rating™ is for the named share class only; other classes may have different
performance characteristics. Past performance is not an indicator or a guarantee of future performance. Source: ©Morningstar. Important data provider notices and terms available at
www.franklintempletondatasources.com
PERFORMANCE DATA
The fund offers other share classes subject to different fees and expenses, which will affect their performance.
Source for Index: FactSet. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
STANDARD & POOR’S®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC. Standard & Poor’s does not sponsor, endorse, sell or promote any S&P
index-based product.
PORTFOLIO DIVERSIFICATION
Top Ten Holdings: Holdings of the same issuer have been combined. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Weightings as a percent of total. The information provided is not a recommendation to purchase, sell, or hold any particular security. The portfolio manager for the fund reserves the right to withhold
release of information with respect to holdings that would otherwise be included.
Geographic/Sector Weightings: Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics.
Source for Index: FactSet. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
PORTFOLIO CHARACTERISTICS
The portfolio characteristics listed are based on the fund's underlying holdings, and do not necessarily reflect the fund's characteristics. Due to data limitations all equity holdings are assumed to be
the primary equity issue (usually the ordinary or common shares) of each security's issuing company. This methodology may cause small differences between the portfolio's reported characteristics
and the portfolio's actual characteristics. In practice, Franklin Templeton's portfolio managers invest in the class or type of security which they believe is most appropriate at the time of purchase. The
market capitalization figures for both the portfolio and the benchmark are at the security level, not aggregated up to the main issuer. All portfolio holdings are subject to change.
Source: FactSet. Price to Earnings (12-mo Trailing) measures the current price to earnings ratio (P/E) relative to the trailing 12 months of reported earnings. Price to Earnings, Price to Cash Flow and
Price to Book Value for the weighted average use harmonic means. Values less than 0.01 (i.e., negative values) are excluded and values in excess of 200x are capped at 200x. For the benchmark,
no limits are applied to these ratios in keeping with the benchmark's calculation methodology. Market capitalization statistics are indicated in the base currency for the portfolio presented.
Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains
this and other information, talk to your financial advisor, call us at (800) DIAL BEN/(800) 342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you
invest or send money.
Franklin Templeton Distributors, Inc.
One Franklin Parkway
San Mateo, California 94403-1906
(800) DIAL BEN® (800) 342-5236
franklintempleton.com
© 2017 Franklin Templeton Investments. All rights reserved.
474 PP 03/17 UPD 08/17
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