printmgr file - Templeton

FOR THE YEAR ENDED DECEMBER 31, 2012
Annual Report

March 2013
Dear Investor,
The 2012 calendar year was one of major global political and policy change. The economic recovery that began in 2009 continued
over this 12-month period, though not without challenges and uncertainties along the way. The attention of financial markets
shifted focus from the capital needs of European banks and other eurozone issues, to economic growth in China, to political and
policy developments in the United States. With the commodity-heavy Canadian stock market integrated into the fabric of the world
economy, domestic equity analysts are carefully watching developments in China, the United States and elsewhere for their impact
close to home.
Key investment opportunities for 2013
Most likely the 2012 tax season is one of your top financial considerations right now. As your return is filed and another year of hard
work and careful planning is behind you, this can also be a great time to book an appointment with your advisor to assess your
current portfolio and begin laying out your investment strategies for the next 12 months. There is no shortage of key issues to
address this year:
• Equities have made gains during the current economic recovery, yet in a historical rarity, many investors have been avoiding the
benefits of investing in stocks. This could point to a key opportunity to position your portfolio for further potential growth.
Developments in capital markets across the world have opened up more opportunities in fixed income, across many currencies
and sovereign markets, in addition to other strategies. 2013 might be a good time to take a close look at your income portfolio, to
see if you are taking full advantage of the breadth of opportunities available in North America and abroad.
Select managed programs combine many of the above equity and fixed income strategies, while providing an additional benefit
of overall active management of your exposure to these and other asset classes. If you have not already done so, you and your
advisor can consider whether a diversified portfolio solution is right for you.
Whether you as an investor are focused on growth, income and/or retirement, there are many opportunities across the investment
spectrum to consider. The end of the 2012 tax season can be an important milestone to kick off the next investment year, and to
help you and your advisor ensure you are still on track.
Thank you for your continued trust and investment with us, and I wish you and your loved ones all the best for 2013.
Sincerely,
Donald F. Reed
President and Chief Executive Officer
Franklin Templeton Investments Corp.
Franklin Templeton Investments Funds

Table of Contents
Page
Financial Statements
Templeton Funds
Templeton Asian Growth Fund ............... 3
Templeton Canadian Balanced Fund .......... 6
Templeton Canadian Stock Fund ............. 13
Templeton EAFE Developed Markets Fund ..... 16
Templeton Emerging Markets Fund ........... 20
Templeton Frontier Markets Fund
Templeton Global Balanced Fund
............ 24
(formerly Templeton Global Income Fund) .... 28
Templeton Global Bond Fund ................ 39
Templeton Global Smaller Companies Fund ..... 54
Templeton International Stock Fund ...........
Franklin Funds
58
Franklin Flex Cap Growth Fund .............. 62
Franklin High Income Fund ................. 66
Franklin Strategic Income Fund .............. 75
Franklin U.S. Core Equity Fund .............. 100
Franklin U.S. Rising Dividends Fund .......... 103
Franklin World Growth Fund .................
Bissett Funds
107
Bissett All Canadian Focus Fund ............. 110
Bissett Bond Fund ........................ 113
Bissett Canadian Balanced Fund ............. 120
Bissett Canadian Dividend Fund .............. 123
Page
Bissett Canadian Equity Fund ................ 126
Bissett Canadian High Dividend Fund ......... 129
Bissett Canadian Short Term Bond Fund ....... 132
Bissett Corporate Bond Fund ................ 139
Bissett Dividend Income Fund ............... 145
Bissett Focus Balanced Fund ................ 149
Bissett Microcap Fund ..................... 154
Bissett Small Cap Fund ..................... 157
Bissett Strategic Income Fund ............... 160
Bissett U.S. Focus Fund .................... 167
Mutual Series Funds
Mutual Beacon Fund ...................... 170
Mutual Global Discovery Fund
(formerly Mutual Discovery Fund) ........... 177
Franklin Templeton Funds
Franklin Templeton Canadian Core Equity Fund . 185
Franklin Templeton Canadian Large Cap Fund . . 189
Franklin Templeton Global Blend Fund ........ 192
Franklin Templeton Money Market Fund ....... 195
Franklin Templeton Treasury Bill Fund ......... 199
Franklin Templeton U.S. Money Market Fund . . . 203
Notes to Financial Statements ................... 206
Management’s Responsibility for Financial Reporting . 254
Auditor’s Report .............................. 255
2 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Asian Growth Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 98.98%
COMMON STOCKS: 98.98%
China: 39.15%
Aluminum Corp. of China Ltd., H ........ 28,740,000 $ 15,563 $ 13,002
Brilliance China Automotive Holdings Ltd. . .
China International Marine Containers
9,308,000 9,311 11,404
(Group) Co. Ltd. .................. 5,129,022 6,536 7,783
China Merchants Bank Co. Ltd., H ....... 4,264,500 8,603 9,335
China Petroleum and Chemical Corp., H . . .
China Vanadium Titano–Magnetite Mining
4,558,000 4,564 5,129
Co. Ltd. . . . ..................... 63,154,000 13,740 14,811
CNOOC Ltd. ....................... 5,286,000 10,567 11,367
Guangzhou Automobile Group Co. Ltd., H . . 10,022,000 9,581 8,798
Inner Mongolia Yitai Coal Co. Ltd., B ...... 1,610,250 8,869 9,120
PetroChina Co. Ltd., H . . . ............. 20,748,000 28,436 29,090
Shenzhen Chiwan Wharf Holdings Ltd., B . . 2,657,852 3,201 3,570
118,971 123,409
India: 14.54%
Infosys Ltd., American Depositary Receipt . . 122,600 6,146 5,149
Oil & Natural Gas Corp. Ltd. . ........... 1,087,900 5,874 5,268
Reliance Industries Ltd., Global Depositary
Receipt ......................... 280,520 8,701 8,504
Sesa Goa Ltd. ...................... 2,656,560 10,914 9,354
Tata Consultancy Services Ltd. .......... 361,570 7,842 8,222
Tata Steel Ltd., Global Depositary Receipt . . 1,194,000 10,960 9,328
50,437 45,825
Thailand: 12.49%
BEC World PCL, Foreign Traded Security . . . 1,933,300 2,467 4,456
Kiatnakin Bank PCL, Foreign Traded
Security . . . ..................... 5,173,700 5,302 8,146
Land and Houses PCL, Foreign Traded
Security . . . ..................... 24,780,000 5,719 7,844
PTT PCL, Foreign Traded Security ........ 531,100 5,404 5,724
Siam Commercial Bank PCL, Foreign Traded
Security . . . ..................... 1,626,800 6,062 9,586
Univanich Palm Oil PCL, Foreign Traded
Security . . . ..................... 1,172,000 3,208 3,624
28,162 39,380
Indonesia: 8.98%
PT Astra International Tbk . . ........... 9,002,000 7,060 6,958
PT Bank Danamon Indonesia Tbk ........ 24,887,000 13,494 14,363
PT United Tractors Tbk . . ............. 3,444,636 9,472 6,976
30,026 28,297
Pakistan: 7.62%
Faysal Bank Ltd. .................... 8,079,010 864 875
MCB Bank Ltd. ..................... 5,916,240 11,239 12,690
Oil & Gas Development Co. Ltd. ......... 5,329,500 9,020 10,454
21,123 24,019
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Hong Kong: 4.68%
Dairy Farm International Holdings Ltd. ..... 756,900 $ 6,309 $ 8,204
VTech Holdings Ltd. .................. 587,200 6,246 6,528
12,555 14,732
Taiwan: 4.29%
MediaTek Inc. ...................... 732,000 7,135 8,080
Microlife Corp. ...................... 1,656,900 2,990 3,318
Tainan Enterprises Co. Ltd. . ............ 2,066,000 2,567 2,136
12,692 13,534
South Korea: 4.05%
Avista Inc. ......................... 98,339 547 545
Hyundai Development Co. . ............ 604,830 12,022 12,228
12,569 12,773
Singapore: 3.18%
SembCorp Marine Ltd. ................ 2,640,000 9,245 10,018
Total Common Stocks: ................ 295,780 311,987
Total Long-Term Investments: ........... 295,780 311,987
Transaction costs (Note 2) ................ (702) —
TOTAL INVESTMENTS: 98.98% .......... $295,078 311,987
OTHER ASSETS, less liabilities: 1.02% ..... 3,206
TOTAL NET ASSETS: 100.00% ........... $315,193
Franklin Templeton Investments Funds 3

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 311,987 $ 173,285
Canadian 2,620 7,804
Foreign
Receivables
500 427
Capital units sold — 323
Dividends and withholding tax 217 57
Total assets
Liabilities
Payables
315,324 181,896
Investment securities purchased — 58
Capital units redeemed — 226
Foreign capital taxes payable 131 —
Distributions to unitholders — 1,061
Other liabilities (Note 9) — 41
Total liabilities 131 1,386
Net assets $ 315,193 $ 180,510
Total net assets per series (000s)
Series O $315,193 $180,510
Number of units outstanding (Note 3)
Series O 33,003,719 22,023,946
Net assets per unit — CAD
Series O $9.55 $8.19
Net assets per unit — USD
Series O $9.62 $8.04
Cost of investments held (000s) $295,078 $193,046
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton Asian Growth Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $901; 2011 — $98) $ 10,816 $ 1,063
Interest — —
Total investment income 10,816 1,063
Expenses
Management fees (Note 4(a)) — —
Transfer agent fees (Note 4(c)) — —
Custodian fees — 2
Legal fees 1 —
Audit fees 18 3
Unitholder reporting costs 6 2
Independent review committee fees 1 1
Registration fees 14 5
Other expenses (Note 7) 11 8
Total expenses 51 21
Expenses waived/paid by Manager (Note 6) (51) (21)
Net expenses — —
Net investment income (loss) 10,816 1,063
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments 179 3
Net realized and/or unrealized foreign exchange
gain (loss) 470 (120)
Net change in unrealized appreciation
(depreciation) in value of investments 36,670 (19,757)
Transaction costs (Note 11) (448) (475)
Net gain (loss) on investments 36,871 (20,349)
Increase (decrease) in net assets from operations $ 47,687 $ (19,286)
Increase (decrease) in net assets from operations
per series (000s)
Series O $47,687 $(19,286)
Increase (decrease) in net assets from operations
per unit
Series O $1.43 $(2.89)
The accompanying notes are an integral part of these financial statements.
4 Franklin Templeton Investments Funds

Templeton Asian Growth Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
Series O
2012 2011
Increase (decrease) in net assets from operations $ 47,687 $ (19,286)
Distributions to unitholders
From net investment income (10,515) (1,061)
From capital gains (830) —
From return of capital — —
Capital unit transactions
(11,345) (1,061)
Subscriptions 191,740 211,818
Reinvestments 12,406 —
Redemptions (105,805) (16,110)
98,341 195,708
Increase (decrease) in net assets for the period 134,683 175,361
Net assets — beginning of period 180,510 5,149
Net assets — end of period $ 315,193 $ 180,510
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 5

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Canadian Balanced Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 98.56%
COMMON STOCKS: 70.15%
Canada: 69.18%
Bank of Montreal ........................ 36,697 $ 1,505 $ 2,232
Bank of Nova Scotia ...................... 59,203 1,682 3,399
Barrick Gold Corp. ........................ 32,900 1,008 1,142
BCE Inc. . . . ............................ 26,900 644 1,146
Bell Aliant Inc. .......................... 43,943 1,351 1,157
Bombardier Inc., B ....................... 556,500 2,520 2,087
CAE Inc. . . . ............................ 172,718 1,520 1,738
Calfrac Well Services Ltd. ................... 300 7 7
Canadian Imperial Bank of Commerce . . ....... 31,989 1,600 2,558
Canadian Natural Resources Ltd. ............. 135,720 2,963 3,886
Cascades Inc. . .......................... 341,600 2,504 1,394
Cenovus Energy Inc. ...................... 71,136 1,864 2,368
Dorel Industries Inc., B .................... 44,700 1,390 1,605
EnCana Corp. . .......................... 97,136 2,891 1,904
Genworth MI Canada Inc. . ................. 87,200 1,657 1,968
George Weston Ltd. ....................... 48,500 3,173 3,422
HudBay Minerals Inc. ..................... 130,000 1,299 1,300
Husky Energy Inc. ........................ 121,300 3,669 3,565
Kingsway Financial Services Inc. ............. 43,672 1,149 166
Laurentian Bank of Canada ................. 45,600 1,374 2,016
Loblaw Companies Ltd. .................... 45,800 1,715 1,917
Magellan Aerospace Corp. . ................. 258,388 3,346 801
Average
Cost
Fair
Value
Shares
(000s) (000s)
Canada: 69.18% (Continued)
Mullen Group Ltd. ........................ 67,800 $ 864 $ 1,416
National Bank of Canada ................... 14,022 475 1,081
Potash Corp. of Saskatchewan Inc. ............ 38,000 1,736 1,534
Royal Bank of Canada ..................... 66,985 2,542 4,006
Shawcor Ltd., A .......................... 23,470 399 913
Sherritt International Corp. .................. 309,300 1,605 1,757
Shoppers Drug Mart Corp. .................. 29,000 1,159 1,239
Sun Life Financial Inc. ..................... 88,737 2,551 2,337
Suncor Energy Inc. ....................... 39,800 1,245 1,301
Talisman Energy Inc. ...................... 261,990 3,358 2,940
Teck Resources Ltd., B .................... 54,300 1,760 1,958
The Toronto–Dominion Bank ................ 46,436 1,896 3,884
Valener Inc. . ........................... 96,400 1,455 1,540
61,876 67,684
Zambia: 0.97%
First Quantum Minerals Ltd. ................. 43,371 951 948
Total Common Stocks: ..................... 62,827 68,632
PREFERRED STOCKS: 2.37%
Vale SA, American Depositary Receipt,
Preferred, A .......................... 115,110 2,521 2,320
Total Preferred Stocks: ..................... 2,521 2,320
Principal Amount
in Currency
of Issue
BONDS: 26.04%
Canada: 22.39%
407 International Inc., Senior Secured Bond, 6.47%, 7/27/2029 ......................................... 210,000 CAD 272 283
AltaLink Investments LP, Senior Bond, 12–1, 3.674%, 6/5/2019 ......................................... 111,000 CAD 111 111
Bank of Montreal, Senior Note, 4.609%, 9/10/2025 ................................................... 191,000 CAD 191 218
Bank of Nova Scotia
2.898% to 8/3/2017, Floating Rate Note thereafter, 8/3/2022, ......................................... 128,000 CAD 128 130
3.036% to 10/17/2019, Floating Rate Note thereafter, 10/18/2024 ...................................... 145,000 CAD 145 146
bcIMC Realty Corp., 5.65%, 1/5/2018 .............................................................. 123,000 CAD 123 141
Bell Aliant Regional Communications LP, Senior Note, 5.41%, 9/26/2016 .................................. 113,000 CAD 111 123
British Columbia Municipal Finance Authority, 4.875%, 6/3/2019 ........................................ 348,000 CAD 377 398
Caisse Centrale Desjardins du Quebec, Senior Note, 2.281%, 10/17/2016 ................................. 150,000 CAD 150 150
Calloway Real Estate Investment Trust, Senior Bond, 5.37%, 10/12/2016 .................................. 150,000 CAD 162 163
Cameco Corp.
Senior Bond, D, 5.67%, 9/2/2019 ................................................................ 97,000 CAD 100 112
Senior Bond, E, 3.75%, 11/14/2022 .............................................................. 129,000 CAD 129 128
Canada Housing Trust
Secured Bond, 2.95%, 3/15/2015 ............................................................... 62,000 CAD 63 64
Secured Bond,, 4.10%, 12/15/2018 .............................................................. 19,000 CAD 20 21
Senior Secured Bond, Floating Rate Note, 3/15/2017 ................................................ 1,042,000 CAD 1,049 1,050
The accompanying notes are an integral part of these financial statements.
6 Franklin Templeton Investments Funds

Templeton Canadian Balanced Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 22.39% (Continued)
Canadian Imperial Bank of Commerce
2.35%, 10/18/2017 .......................................................................... 70,000 CAD $ 70 $ 70
Subordinated Note, 5.15% to 6/06/2013, Floating Rate Note thereafter, 6/6/2018 ......................... 57,000 CAD 59 58
Canadian Natural Resources Ltd., 4.95%, 6/1/2015 ..................................................
Capital Desjardins Inc.
125,000 CAD 124 134
Senior Note, 3.797% to 11/23/2015, Floating Rate Note thereafter, 11/23/2020 .......................... 111,000 CAD 111 115
Senior Note, 5.756% to 4/1/2014, Floating Rate Note thereafter, 4/1/2019 .............................. 120,000 CAD 120 125
Senior Secured Note, G, 5.187%, 5/5/2020 ....................................................... 159,000 CAD 159 181
CDP Financial Inc., Senior Note, 4.60%, 7/15/2020 .................................................. 177,000 CAD 187 201
Centre Street Trust, Secured Note, A, 3.69%, 6/14/2021 .............................................. 151,000 CAD 151 151
City of Montreal, 5.00%, 12/1/2018 ...............................................................
City of Toronto Canada
167,000 CAD 171 188
3.50%, 12/6/2021 ........................................................................... 190,000 CAD 193 197
3.80%, 12/13/2042 .......................................................................... 281,000 CAD 280 280
4.95%, 6/27/2018 ...........................................................................
CU Inc.
263,000 CAD 296 299
4.543%, 10/24/2041 ......................................................................... 83,000 CAD 83 94
Senior Bond, 3.805%, 9/10/2042 ............................................................... 133,000 CAD 133 134
Senior Note, 5.563%, 5/26/2028 ............................................................... 73,000 CAD 73 89
Eagle Credit Card Trust, 102A, Senior Secured Note, 3.474%, 12/17/2015 ................................ 91,000 CAD 91 95
Emera Inc., Senior Note, 2.96%, 12/13/2016 ....................................................... 86,000 CAD 86 88
Enbridge Inc., Floating Rate Note, 8/19/2015 .......................................................
Enbridge Income Fund Holdings Inc.
116,000 CAD 116 117
3.94%, 1/13/2023 ........................................................................... 84,000 CAD 84 84
Senior Note, 2.92%, 12/14/2017 ............................................................... 66,000 CAD 66 66
Senior Note, Floating Rate Note, 11/28/2014 ...................................................... 150,000 CAD 150 150
Enbridge Pipelines Inc., Senior Note, 2.93%, 11/30/2022 .............................................. 105,000 CAD 105 104
Fortisalberta Inc., 5.37%, 10/30/2039 .............................................................
Government of Canada
97,000 CAD 97 122
1.00%, 11/1/2014 ........................................................................... 452,000 CAD 451 451
2.75%, 6/1/2022 ............................................................................ 126,000 CAD 136 136
3.50%, 6/1/2020 ............................................................................ 55,000 CAD 63 62
4.00%, 6/1/2041 ............................................................................ 250,000 CAD 326 334
5.75%, 6/1/2029 ............................................................................ 132,000 CAD 166 196
5.75%, 6/1/2033 ............................................................................ 320,000 CAD 461 497
Great–West Lifeco Finance Delaware, 5.691% to 6/21/2017, Floating Rate Note thereafter, 6/21/2067 .......... 181,000 CAD 182 199
Great–West Lifeco Inc., Senior Bond, 6.67%, 3/21/2033 ............................................... 159,000 CAD 195 204
Home Capital Group Inc., 5.20%, 5/4/2016 .........................................................
HSBC Bank Canada
126,000 CAD 126 131
2.572%, 11/23/2015 ......................................................................... 143,000 CAD 143 145
3.558%, 10/4/2017 .......................................................................... 127,000 CAD 127 134
3.86%, 5/21/2015 ........................................................................... 105,000 CAD 105 110
Husky Energy Inc., Senior Note, 3.75%, 3/12/2015 ................................................... 114,000 CAD 113 118
Hydro–Quebec, HL, 11.00%, 8/15/2020 ...........................................................
Inter Pipeline Fund
302,000 CAD 483 478
Senior Note, 3.839%, 7/30/2018 ............................................................... 85,000 CAD 85 89
Senior Note, 4.967%, 2/2/2021 ................................................................ 87,000 CAD 87 98
Manitoba Telecom Services Inc., Senior Note, 4.59%, 10/1/2018 ........................................ 74,000 CAD 74 80
Manulife Bank of Canada, Senior Note, Floating Rate Note, 12/3/2014 ................................... 56,000 CAD 56 56
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 7
Average
Cost
Fair
Value
(000s)

Templeton Canadian Balanced Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 22.39% (Continued)
Manulife Financial Corp., Senior Note, 5.505%, 6/26/2018 ........................................... 127,000 CAD $ 117 $ 142
Maritimes and Northeast Pipeline LP, Senior Secured Note, 4.34%, 11/30/2019 .......................... 120,750 CAD 121 126
Master Credit Card Trust, Secured Note, 12–1, 2.626%, 1/21/2017 ....................................
Merrill Lynch Financial Asset Inc.
98,000 CAD 98 100
2004–CA12, A1, 4.743%, 3/12/2036 .......................................................... 88,386 CAD 89 90
2006–CA19, A2, 4.85%, 6/12/2039 ...........................................................
National Housing Association
146,454 CAD 146 153
1.70%, 8/1/2017 .......................................................................... 98,066 CAD 96 97
2.30%, 6/1/2016 .......................................................................... 165,853 CAD 164 168
Floating Rate Note, 3/1/2016 ................................................................. 178,015 CAD 177 181
Floating Rate Note, 12/1/2016 ................................................................ 354,476 CAD 354 354
Floating Rate Note, 3/1/2017 ................................................................. 332,133 CAD 330 331
OMERS Realty Corp., 4.74%, 6/4/2018 ........................................................... 143,000 CAD 145 161
Ontario Strategic Infrastructure Finance, 4.60%, 6/1/2015 ........................................... 558,000 CAD 565 596
OPB Finance Trust, Senior Bond, 3.89%, 7/4/2042 .................................................
Province of Manitoba
128,000 CAD 128 130
4.40%, 9/5/2025 .......................................................................... 508,000 CAD 510 580
6.30%, 3/5/2031 ..........................................................................
Province of New Brunswick
204,000 CAD 242 288
3.55%, 6/3/2043 .......................................................................... 116,000 CAD 116 117
5.50%, 1/27/2034 .........................................................................
Province of Nova Scotia
538,000 CAD 582 697
4.40%, 6/1/2042 .......................................................................... 132,000 CAD 146 155
5.80%, 6/1/2033 ..........................................................................
Province of Ontario
189,000 CAD 246 255
4.20%, 3/8/2018 .......................................................................... 386,000 CAD 429 428
4.65%, 6/2/2041 .......................................................................... 319,000 CAD 379 391
4.70%, 6/2/2037 .......................................................................... 362,000 CAD 443 436
5.85%, 3/8/2033 .......................................................................... 303,000 CAD 412 412
6.50%, 3/8/2029 .......................................................................... 264,000 CAD 378 372
Floating Rate Note, 10/5/2015 ................................................................ 19,000 CAD 19 19
Floating Rate Note, 11/23/2017 ............................................................... 1,462,000 CAD 1,461 1,461
Strip, 12/2/2022 ........................................................................... 227,000 CAD 164 167
Province of Quebec, 6.25%, 6/1/2032 ........................................................... 491,000 CAD 596 679
PSP Capital Inc., Senior Note, 2.26%, 2/16/2017 ...................................................
RBC Capital Trust
170,000 CAD 170 172
4.87% to 12/31/2015, Floating Rate Note thereafter, Perpetual ...................................... 45,000 CAD 47 48
5.812% to 12/31/2013, Floating Rate Note thereafter, Perpetual .....................................
Rogers Communications Inc.
19,000 CAD 20 20
Senior Note, 5.34%, 3/22/2021 ............................................................... 174,000 CAD 174 199
Senior Note, 5.38%, 11/4/2019 ...............................................................
Royal Bank of Canada
130,000 CAD 137 149
5.95%, 6/18/2014 ......................................................................... 131,000 CAD 142 139
Senior Note, 2.58%, 4/13/2017 ............................................................... 126,000 CAD 126 128
Senior Note, 2.68%, 12/8/2016 ............................................................... 127,000 CAD 127 129
Senior Note, 3.66%, 1/25/2017 ............................................................... 165,000 CAD 165 174
Senior Note, 4.93%, 7/16/2025 ............................................................... 153,000 CAD 153 179
Subordinated Note, 4.84% to 3/11/2013, Floating Rate Note thereafter, 3/11/2018 ...................... 218,000 CAD 219 219
Subordinated Note, 5.00% to 6/6/2013, Floating Rate Note thereafter, 6/6/2018 ........................ 24,000 CAD 24 24
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
8 Franklin Templeton Investments Funds

Templeton Canadian Balanced Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 22.39% (Continued)
Shoppers Drug Mart Corp., 5.19%, 1/20/2014 ..................................................... 83,000 CAD $ 83 $ 86
Sun Life Financial Inc., Senior Bond, 4.95% to 6/1/2016, Floating Rate Note thereafter, 6/1/2036 ............ 134,000 CAD 139 142
Suncor Energy Inc., 5.80%, 5/22/2018 ........................................................... 91,000 CAD 91 105
Terasen Gas Inc., Senior Note, 5.80%, 5/13/2038 .................................................. 70,000 CAD 70 93
Terasen Gas Vancouver Island, Senior Bond, 6.05%, 2/15/2038 .......................................
The Toronto–Dominion Bank
46,000 CAD 46 61
Subordinated Note, 5.48% to 4/2/2015, Floating Rate Note thereafter, 4/2/2020 ........................ 167,000 CAD 168 180
Subordinated Note, 5.763% to 12/18/2017, Floating Rate Note thereafter, 12/18/2106 ................... 296,000 CAD 289 340
Thomson Reuters Corp., 5.70%, 7/15/2015 ....................................................... 83,000 CAD 82 91
TransCanada PipeLines Ltd., Senior Bond, 8.05%, 2/17/2039 ......................................... 64,000 CAD 66 105
Wells Fargo Financial Canada Corp., 3.97%, 11/3/2014 .............................................. 63,000 CAD 63 66
Westcoast Energy Inc., Senior Note, 4.57%, 7/2/2020 ............................................... 59,000 CAD 59 66
Average
Cost
Fair
Value
20,828 21,899
United States: 2.11%
American International Group Inc., Senior Note, 4.90%, 6/2/2014 ...................................... 99,000 CAD 97 101
Aon Finance NS1 ULC, Senior Note, 4.76%, 3/8/2018 ............................................... 107,000 CAD 107 115
BAC Canada Finance Co., Senior Note, Floating Rate Note, 2/21/2014 .................................. 86,000 CAD 86 86
Bank of America Corp., 4.36%, 9/21/2015 ........................................................ 153,000 CAD 151 160
Citigroup Inc., Junior Subordinated Note, 5.365%, 3/6/2036 .......................................... 189,000 CAD 182 182
GE Capital Canada Funding Co.
4.40%, 2/8/2018 ........................................................................... 83,000 CAD 83 90
5.68%, 9/10/2019 .......................................................................... 56,000 CAD 57 65
5.73%, 10/22/2037 ......................................................................... 190,000 CAD 187 235
Senior Note, Floating Rate Note, 6/11/2014 ...................................................... 147,000 CAD 147 148
JPMorgan Chase & Co., Senior Note, 2.92%, 9/19/2017 ............................................. 128,000 CAD 128 129
Metropolitan Life Global Funding I
2.624%, 4/10/2015 ......................................................................... 178,000 CAD 178 180
4.45%, 11/8/2013 .......................................................................... 225,000 CAD 224 231
Morgan Stanley, Senior Note, 4.85%, 2/3/2016 ..................................................... 57,000 CAD 57 60
The Goldman Sachs Group Inc., Senior Note, 5.25%, 6/1/2016 ........................................ 104,000 CAD 110 111
Wells Fargo Financial Canada Corp., Senior Note, 2.774%, 2/9/2017 ................................... 164,000 CAD 164 167
1,958 2,060
United Kingdom: 0.66%
BP Capital Markets PLC, 2.744%, 2/24/2017 ...................................................... 125,000 CAD 125 127
Heathrow Funding Ltd., Secured Note, 4.00%, 7/3/2019 ............................................. 61,000 CAD 61 63
HSBC Bank Canada, 2.901%, 1/13/2017 ......................................................... 158,000 CAD 158 162
Network Rail Infrastructure Finance PLC, 4.40%, 3/6/2016 ........................................... 278,000 CAD 279 296
623 648
Supranational: 0.37%
Inter–American Development Bank, 4.40%, 1/26/2026 .............................................. 322,000 CAD 315 364
France: 0.25%
Government of France, 4.45%, 10/26/2018 ........................................................ 230,000 CAD 229 247
Netherlands: 0.17%
Bank Nederlandse Gemeenten NV, Senior Bond, 4.55%, 2/15/2019 .................................... 152,000 CAD 151 167
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 9

Templeton Canadian Balanced Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
South Korea: 0.09%
Korea Gas Corp., Senior Note, 4.58%, 5/12/2016 ................................................. 86,000 CAD $ 86 $ 91
Total Bonds: ............................................................................... 24,190 25,476
Total Long-Term Investments: .................................................................. 89,538 96,428
SHORT-TERM SECURITIES: 1.13%
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 ............................................ 1,100,000 CAD 1,100 1,100
Total Short-Term Securities: ................................................................... 1,100 1,100
Transaction costs (Note 2) ...................................................................... (74) —
TOTAL INVESTMENTS: 99.69% ................................................................ $90,564 97,528
OTHER ASSETS, less liabilities: 0.31% .......................................................... 305
TOTAL NET ASSETS: 100.00% ................................................................ $97,833
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................. 6.58 9.41
AA .................................. 8.44 7.33
A ................................... 8.32 8.59
BBB................................. 2.70 2.17
BB .................................. — 0.11
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
10 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 97,528 $ 115,055
Canadian
Receivables
120 28
Capital units sold — 23
Dividends and interest 460 602
Other assets (Note 8) 35 48
Total assets
Liabilities
Payables
98,143 115,756
Investment securities purchased — 397
Capital units redeemed 52 69
Management fees 154 181
Accrued expenses 104 124
Total liabilities 310 771
Net assets $ 97,833 $ 114,985
Total net assets per series (000s)
Series A $74,607 $87,952
Series F 15,321 17,447
Series O 6,386 6,954
Series T 1,519 2,632
Number of units outstanding (Note 3)
Series A 8,820,278 10,732,626
Series F 1,587,241 1,886,338
Series O 592,338 683,249
Series T 213,913 352,034
Net assets per unit — CAD
Series A $8.45 $8.20
Series F 9.65 9.25
Series O 10.78 10.17
Series T 7.11 7.48
Cost of investments held (000s) $90,564 $106,037
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton Canadian Balanced Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $16; 2011 — $19) $ 2,616 $ 3,376
Interest 1,130 1,353
Total investment income
Expenses
3,746 4,729
Management fees (Note 4(a)) 1,997 2,416
Transfer agent fees (Note 4(c)) 615 669
Custodian fees 11 15
Legal fees 2 2
Audit fees 19 20
Unitholder reporting costs 11 19
Independent review committee fees 1 1
Registration fees 19 19
Other expenses (Note 7) 117 139
Total expenses 2,792 3,300
Expenses waived/paid by Manager (Note 6) (433) (443)
Net expenses 2,359 2,857
Net investment income (loss) 1,387 1,872
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
5,189 5,743
gain (loss)
Net change in unrealized appreciation
(14) 2
(depreciation) in value of investments (2,054) (15,775)
Transaction costs (Note 11) (33) (27)
Net gain (loss) on investments 3,088 (10,057)
Increase (decrease) in net assets from operations $ 4,475 $ (8,185)
Increase (decrease) in net assets from operations
per series (000s)
Series A $3,135 $(6,688)
Series F 827 (1,074)
Series O 436 (260)
Series T 77 (163)
Increase (decrease) in net assets from operations
per unit
Series A $0.34 $(0.60)
Series F 0.48 (0.52)
Series O 0.70 (0.35)
Series T 0.26 (0.55)
Franklin Templeton Investments Funds 11

Templeton Canadian Balanced Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 4,475 $ (8,185) $ 3,135 $ (6,688) $ 827 $ (1,074)
Distributions to unitholders
From net investment income (921) (1,445) (702) (1,106) (145) (219)
From capital gains — — — — — —
From return of capital (171) (215) — — — —
(1,092) (1,660) (702) (1,106) (145) (219)
Capital unit transactions
Subscriptions 5,858 22,938 5,241 20,968 185 247
Reinvestments 953 1,476 672 1,060 143 218
Redemptions (27,346) (28,788) (21,691) (22,071) (3,136) (4,076)
(20,535) (4,374) (15,778) (43) (2,808) (3,611)
Increase (decrease) in net assets for the period (17,152) (14,219) (13,345) (7,837) (2,126) (4,904)
Net assets — beginning of period 114,985 129,204 87,952 95,789 17,447 22,351
Net assets — end of period $ 97,833 $ 114,985 $ 74,607 $ 87,952 $ 15,321 $ 17,447
Series O Series T
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 436 $ (260) $ 77 $ (163)
Distributions to unitholders
From net investment income (60) (87) (14) (33)
From capital gains — — — —
From return of capital — — (171) (215)
Capital unit transactions
(60) (87) (185) (248)
Subscriptions 337 489 95 1,234
Reinvestments 60 87 78 111
Redemptions (1,341) (2,395) (1,178) (246)
(944) (1,819) (1,005) 1,099
Increase (decrease) in net assets for the period (568) (2,166) (1,113) 688
Net assets — beginning of period 6,954 9,120 2,632 1,944
Net assets — end of period $ 6,386 $ 6,954 $ 1,519 $ 2,632
The accompanying notes are an integral part of these financial statements.
12 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Canadian Stock Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 99.35%
COMMON STOCKS: 95.79%
Commercial Banks: 25.97%
Bank of Montreal ........................ 44,664 $ 1,496 $ 2,716
Bank of Nova Scotia ...................... 74,959 1,297 4,304
Canadian Imperial Bank of Commerce . . ....... 32,850 1,392 2,627
Laurentian Bank of Canada ................. 50,400 1,196 2,227
National Bank of Canada ................... 19,726 563 1,521
Royal Bank of Canada ..................... 74,486 1,646 4,455
The Toronto–Dominion Bank ................ 60,766 2,082 5,083
9,672 22,933
Oil, Gas & Consumable Fuels: 22.69%
Canadian Natural Resources Ltd. ............. 156,212 874 4,473
Cenovus Energy Inc. ...................... 95,230 2,166 3,170
EnCana Corp. . .......................... 133,570 3,534 2,618
Husky Energy Inc. ........................ 151,900 4,673 4,464
Suncor Energy Inc. ....................... 36,300 1,135 1,187
Talisman Energy Inc. ...................... 367,200 1,960 4,120
14,342 20,032
Metals & Mining: 10.60%
Barrick Gold Corp. ........................ 57,200 1,588 1,986
First Quantum Minerals Ltd. ................. 51,700 1,095 1,130
HudBay Minerals Inc. ..................... 188,900 1,746 1,889
Sherritt International Corp. . ................. 347,200 1,767 1,972
Teck Resources Ltd., B .................... 66,100 2,111 2,383
8,307 9,360
Food & Staples Retailing: 8.68%
George Weston Ltd. ....................... 58,720 4,073 4,143
Loblaw Companies Ltd. .................... 57,100 2,223 2,390
Shoppers Drug Mart Corp. . ................. 26,500 1,059 1,132
7,355 7,665
Aerospace & Defense: 6.86%
Bombardier Inc., B ....................... 678,200 3,008 2,543
CAE Inc. . . . ............................ 224,078 1,844 2,254
Magellan Aerospace Corp. . ................. 407,350 7,411 1,263
12,263 6,060
Insurance: 3.50%
Kingsway Financial Services Inc. ............. 72,004 1,933 274
Sun Life Financial Inc. ..................... 106,926 2,229 2,816
4,162 3,090
Diversified Telecommunication Services: 3.17%
BCE Inc. . . . ............................ 32,640 783 1,390
Bell Aliant Inc. .......................... 53,479 1,578 1,408
2,361 2,798
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Energy Equipment & Services: 2.85%
Mullen Group Ltd. .................. 60,610 $ 772 $ 1,266
Shawcor Ltd., A ................... 32,100 495 1,249
1,267 2,515
Thrifts & Mortgage Finance: 2.54%
Genworth MI Canada Inc. ............ 99,200 1,885 2,239
Containers & Packaging: 2.48%
Cascades Inc. ..................... 535,800 4,006 2,186
Household Durables: 2.18%
Dorel Industries Inc., B . . ............ 53,700 1,620 1,928
Gas Utilities: 2.16%
Valener Inc. ...................... 119,400 1,822 1,908
Chemicals: 2.11%
Potash Corp. of Saskatchewan Inc. ...... 46,100 2,071 1,862
Total Common Stocks: ............... 71,133 84,576
PREFERRED STOCKS: 3.56%
Vale SA, American Depositary Receipt,
Preferred, A .................... 155,680 3,234 3,138
Total Preferred Stocks: .............. 3,234 3,138
Total Long-Term Investments: .......... 74,367 87,714
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 0.45%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 ................ 400,000 CAD 400 400
Total Short-Term Securities: ........... 400 400
Transaction costs (Note 2) .............. (162) —
TOTAL INVESTMENTS: 99.80% ......... $74,605 88,114
OTHER ASSETS, less liabilities: 0.20% ... 181
TOTAL NET ASSETS: 100.00% ......... $88,295
Franklin Templeton Investments Funds 13

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 88,114 $ 103,731
Canadian
Receivables
216 57
Capital units sold 5 7
Dividends and withholding tax 313 368
Other assets (Note 8) 29 51
Total assets
Liabilities
Payables
88,677 104,214
Capital units redeemed 126 38
Management fees 147 172
Accrued expenses 109 139
Total liabilities 382 349
Net assets $ 88,295 $ 103,865
Total net assets per series (000s)
Series A $79,642 $94,366
Series F 1,187 1,218
Series O 7,466 8,281
Number of units outstanding (Note 3)
Series A 6,618,217 8,246,266
Series F 85,483 93,238
Series O 451,887 541,400
Net assets per unit — CAD
Series A $12.03 $11.44
Series F 13.89 13.07
Series O 16.52 15.30
Cost of investments held (000s) $74,605 $87,469
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton Canadian Stock Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $22; 2011 — $33) $ 3,273 $ 4,378
Interest 5 6
Total investment income
Expenses
3,278 4,384
Management fees (Note 4(a)) 1,902 2,487
Transfer agent fees (Note 4(c)) 711 820
Custodian fees 10 14
Legal fees 1 1
Audit fees 19 20
Unitholder reporting costs 6 22
Independent review committee fees 1 1
Registration fees 17 17
Other expenses (Note 7) 88 107
Total expenses 2,755 3,489
Expenses waived/paid by Manager (Note 6) (442) (466)
Net expenses 2,313 3,023
Net investment income (loss) 965 1,361
Realized and unrealized gain (loss) on investments
and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
6,650 10,551
gain (loss)
Net change in unrealized appreciation (depreciation)
(16) 2
in value of investments (2,753) (26,363)
Transaction costs (Note 11) (37) (115)
Net gain (loss) on investments 3,844 (15,925)
Increase (decrease) in net assets from operations $ 4,809 $ (14,564)
Increase (decrease) in net assets from operations
per series (000s)
Series A $4,135 $(13,491)
Series F 76 (160)
Series O 598 (913)
Increase (decrease) in net assets from operations
per unit
Series A $0.56 $(1.51)
Series F 0.82 (1.62)
Series O 1.20 (1.60)
The accompanying notes are an integral part of these financial statements.
14 Franklin Templeton Investments Funds

Templeton Canadian Stock Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 4,809 $ (14,564) $ 4,135 $ (13,491) $ 76 $ (160)
Distributions to unitholders
From net investment income — — — — — —
From capital gains — — — — — —
From return of capital — — — — — —
— — — — — —
Capital unit transactions
Subscriptions 2,927 5,488 2,371 4,464 72 211
Reinvestments — — — — — —
Redemptions (23,306) (24,718) (21,230) (22,489) (179) (351)
(20,379) (19,230) (18,859) (18,025) (107) (140)
Increase (decrease) in net assets for the period (15,570) (33,794) (14,724) (31,516) (31) (300)
Net assets — beginning of period 103,865 137,659 94,366 125,882 1,218 1,518
Net assets — end of period $ 88,295 $ 103,865 $ 79,642 $ 94,366 $ 1,187 $ 1,218
Series O
2012 2011
Increase (decrease) in net assets from operations $ 598 $ (913)
Distributions to unitholders
From net investment income — —
From capital gains — —
From return of capital — —
Capital unit transactions
— —
Subscriptions 484 813
Reinvestments — —
Redemptions (1,897) (1,878)
(1,413) (1,065)
Increase (decrease) in net assets for the period (815) (1,978)
Net assets — beginning of period 8,281 10,259
Net assets — end of period $ 7,466 $ 8,281
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 15

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton EAFE Developed Markets Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.20%
COMMON STOCKS: 97.20%
United Kingdom: 18.18%
Aviva PLC . . ........................ 847,689 $ 6,790 $ 5,211
BAE Systems PLC .................... 117,561 657 649
BPPLC............................ 738,768 6,918 5,103
GlaxoSmithKline PLC .................. 126,733 3,341 2,741
HSBC Holdings PLC ...................
International Consolidated Airlines
289,389 4,385 3,010
Group SA ........................ 1,622,490 4,180 4,887
Kingfisher PLC . ...................... 500,456 2,311 2,322
Lloyds Banking Group PLC . . ............ 8,593,380 5,616 6,804
Marks & Spencer Group PLC ............ 651,700 3,693 4,071
Rentokil Initial PLC .................... 3,476,026 6,680 5,444
Rexam PLC . ........................ 393,370 2,229 2,797
Royal Dutch Shell PLC, B . . . ............ 140,343 5,144 4,973
Royal Dutch Shell PLC, A . . . ............ 6,087 47 210
Tesco PLC . . ........................ 796,740 4,207 4,362
Vodafone Group PLC .................. 1,802,917 5,429 4,509
61,627 57,093
Germany: 13.61%
Bayer AG . . ........................ 64,070 4,392 6,067
Deutsche Lufthansa AG ................ 320,540 4,882 6,017
Deutsche Post AG .................... 87,070 1,524 1,904
E.ON SE . . . ........................ 169,772 4,366 3,162
HeidelbergCement AG ................. 56,850 2,934 3,454
Kloeckner & Co. SE ................... 411,590 5,961 4,887
Merck KGaA ........................ 44,420 4,901 5,813
Muenchener Rueckversicherungs–
Gesellschaft AG .................... 6,970 985 1,250
SAPAG............................ 52,920 2,742 4,226
Siemens AG ........................ 54,880 5,344 5,959
38,031 42,739
France: 12.85%
Alstom SA . . ........................ 45,010 1,917 1,800
AXASA............................ 323,479 6,676 5,810
BNP Paribas SA ..................... 66,790 2,755 3,776
Cie Generale des Etablissements
Michelin, B . ...................... 71,183 4,847 6,773
Compagnie de Saint–Gobain ............. 32,640 1,130 1,392
Credit Agricole SA .................... 475,110 4,943 3,842
France Telecom SA ................... 99,520 2,449 1,096
GDF Suez . . ........................ 155,240 4,944 3,175
Ipsen SA . . . ........................ 64,510 1,998 1,933
Sanofi ............................. 50,626 4,029 4,767
Total SA, B . ........................ 116,448 7,100 6,017
42,788 40,381
Average
Cost
Fair
Value
Shares
(000s) (000s)
Netherlands: 10.14%
Akzo Nobel NV ...................... 56,720 $ 2,845 $ 3,729
DE Master Blenders 1753 NV ............ 364,705 4,205 4,205
ING Groep NV ....................... 657,094 6,404 6,197
Koninklijke Philips Electronics NV ......... 164,495 4,501 4,325
Randstad Holding NV .................. 125,871 4,261 4,639
Reed Elsevier NV ..................... 352,080 4,199 5,184
Unilever NV ......................... 93,988 2,940 3,571
29,355 31,850
Japan: 9.40%
Itochu Corp. ........................ 438,840 4,443 4,600
Konica Minolta Holdings Inc. ............ 465,000 4,178 3,319
Mazda Motor Corp. ................... 2,699,800 5,474 5,496
Nissan Motor Co. Ltd. .................. 257,400 2,245 2,423
Ricoh Co. Ltd. ....................... 366,000 4,264 3,853
Toyota Motor Corp. ................... 117,700 4,437 5,451
Trend Micro Inc. ..................... 146,000 4,434 4,376
29,475 29,518
Switzerland: 7.33%
Adecco SA ......................... 68,720 2,944 3,542
Credit Suisse Group AG ................ 190,280 5,013 4,586
Novartis AG ......................... 49,200 2,917 3,067
Roche Holding AG .................... 25,970 4,030 5,185
Swiss Re AG ........................ 32,640 2,431 2,334
UBSAG ........................... 279,561 6,535 4,323
23,870 23,037
Italy: 5.04%
EniSpA............................ 217,954 5,289 5,302
Intesa Sanpaolo SpA .................. 2,134,708 6,685 3,666
Telecom Italia SpA .................... 4,747,929 4,610 3,752
Unicredit SpA ....................... 634,086 6,727 3,100
23,311 15,820
Singapore: 4.46%
DBS Group Holdings Ltd. ............... 328,490 2,922 4,006
Flextronics International Ltd. ............. 837,940 6,779 5,169
Singapore Telecommunications Ltd. ....... 1,784,720 4,531 4,824
14,232 13,999
Hong Kong: 3.93%
AIA Group Ltd. ...................... 1,222,800 3,713 4,741
Cheung Kong (Holdings) Ltd. ............ 289,000 3,911 4,389
Haier Electronics Group Co. Ltd. . ......... 2,219,000 2,844 3,219
10,468 12,349
Norway: 2.71%
Statoil ASA ......................... 214,500 5,279 5,368
Telenor ASA ........................ 155,880 1,976 3,151
7,255 8,519
The accompanying notes are an integral part of these financial statements.
16 Franklin Templeton Investments Funds

Templeton EAFE Developed Markets Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
China: 2.41%
China Life Insurance Co. Ltd., H . . . .... 1,484,000 $ 4,197 $ 4,821
China Telecom Corp. Ltd., H .......... 5,008,000 3,041 2,760
7,238 7,581
Ireland: 2.36%
CRHPLC ....................... 186,620 3,678 3,768
Elan Corp. PLC, American Depositary
Receipt ....................... 352,360 3,083 3,573
Prothena Corp. PLC . . .............. 8,594 69 58
6,830 7,399
Portugal: 1.90%
Galp Energia SGPS SA, B ............ 187,300 2,938 2,885
Portugal Telecom SGPS SA ........... 633,361 4,500 3,098
7,438 5,983
Sweden: 1.65%
Ericsson, B ...................... 194,410 1,948 1,932
Getinge AB, B .................... 96,580 2,880 3,246
4,828 5,178
Spain: 1.23%
Telefonica SA .................... 287,555 5,100 3,866
Total Common Stocks: ............... 311,846 305,312
Total Long-Term Investments: ......... 311,846 305,312
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 2.45%
Bank of Montreal, Term Deposit, 0.90%,
1/2/2013 ..................... 7,700,000 CAD 7,700 7,700
Total Short-Term Securities: .......... 7,700 7,700
Transaction costs (Note 2) .............. (680) —
TOTAL INVESTMENTS: 99.65% ........ $318,866 313,012
OTHER ASSETS, less liabilities: 0.35% ... 1,110
TOTAL NET ASSETS: 100.00% ......... $314,122
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 17

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 313,012 $ 247,536
Canadian 90 67
Foreign
Receivables
— 132
Investment securities sold — 1
Capital units sold 3 —
Dividends and withholding tax 1,079 758
Other assets (Note 8) 21 19
Total assets
Liabilities
Payables
314,205 248,513
Investment securities purchased — 811
Capital units redeemed 14 —
Management fees 9 11
Accrued expenses 60 57
Total liabilities 83 879
Net assets $ 314,122 $ 247,634
Total net assets per series (000s)
Series A $4,172 $4,909
Series F 2,141 2,049
Series O 307,809 240,676
Number of units outstanding (Note 3)
Series A 641,431 854,742
Series F 287,322 314,814
Series O 34,037,926 30,978,929
Net assets per unit — CAD
Series A $6.51 $5.74
Series F 7.45 6.51
Series O 9.05 7.77
Net assets per unit — USD
Series A $6.55 $5.63
Series F 7.50 6.39
Series O 9.11 7.62
Cost of investments held (000s) $318,866 $304,411
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton EAFE Developed Markets Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $941; 2011 — $675) $ 8,819 $ 5,996
Interest 101 93
Total investment income
Expenses
8,920 6,089
Management fees (Note 4(a)) 120 171
Transfer agent fees (Note 4(c)) 70 91
Custodian fees 19 14
Legal fees 1 —
Audit fees 19 18
Unitholder reporting costs 7 7
Independent review committee fees 1 1
Registration fees 16 17
Other expenses (Note 7) 147 85
Total expenses 400 404
Expenses waived/paid by Manager (Note 6) (246) (186)
Net expenses 154 218
Net investment income (loss) 8,766 5,871
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(10,788) (3,711)
gain (loss)
Net change in unrealized appreciation
(54) (173)
(depreciation) in value of investments 51,021 (26,748)
Transaction costs (Note 11) (312) (375)
Net gain (loss) on investments 39,867 (31,007)
Increase (decrease) in net assets from operations $ 48,633 $ (25,136)
Increase (decrease) in net assets from operations
per series (000s)
Series A $660 $(950)
Series F 334 (308)
Series O 47,639 (23,878)
Increase (decrease) in net assets from operations
per unit
Series A $0.90 $(0.99)
Series F 1.13 (1.01)
Series O 1.43 (1.15)
The accompanying notes are an integral part of these financial statements.
18 Franklin Templeton Investments Funds

Templeton EAFE Developed Markets Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 48,633 $ (25,136) $ 660 $ (950) $ 334 $ (308)
Distributions to unitholders
From net investment income (8,229) (6,351) (110) (137) (57) (57)
From capital gains — — — — — —
From return of capital — — — — — —
(8,229) (6,351) (110) (137) (57) (57)
Capital unit transactions
Subscriptions 75,325 142,571 234 390 17 305
Reinvestments 8,218 6,341 108 133 55 57
Redemptions (57,459) (78,844) (1,629) (2,591) (257) (611)
26,084 70,068 (1,287) (2,068) (185) (249)
Increase (decrease) in net assets for the period 66,488 38,581 (737) (3,155) 92 (614)
Net assets — beginning of period 247,634 209,053 4,909 8,064 2,049 2,663
Net assets — end of period $ 314,122 $ 247,634 $ 4,172 $ 4,909 $ 2,141 $ 2,049
Series O
2012 2011
Increase (decrease) in net assets from operations $ 47,639 $ (23,878)
Distributions to unitholders
From net investment income (8,062) (6,157)
From capital gains — —
From return of capital — —
Capital unit transactions
(8,062) (6,157)
Subscriptions 75,074 141,876
Reinvestments 8,055 6,151
Redemptions (55,573) (75,642)
27,556 72,385
Increase (decrease) in net assets for the period 67,133 42,350
Net assets — beginning of period 240,676 198,326
Net assets — end of period $ 307,809 $ 240,676
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 19

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Emerging Markets Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.15%
COMMON STOCKS: 87.39%
China: 19.95%
Bank of China Ltd., H . . . ............. 6,652,100 $ 3,514 $ 2,958
Brilliance China Automotive Holdings Ltd. . . 1,692,000 1,548 2,073
China Coal Energy Co. Ltd., H ........... 3,734,000 6,118 4,005
China Construction Bank Corp., H ........ 4,901,980 3,658 3,908
China Mobile Ltd. ................... 530,000 5,734 6,130
China Petroleum and Chemical Corp., H . . . 4,714,000 4,487 5,304
China Telecom Corp. Ltd., H . ........... 1,956,000 885 1,078
CNOOC Ltd. ....................... 1,779,000 2,666 3,826
COSCO Pacific Ltd. .................. 5,089,508 8,523 7,175
Guangzhou Automobile Group Co. Ltd., H . .
Industrial and Commercial Bank of China
3,002,000 2,715 2,635
Ltd., H ......................... 5,981,730 4,277 4,216
PetroChina Co. Ltd., H . . . ............. 7,478,000 9,129 10,485
Shanghai Prime Machinery Co. Ltd., H .... 21,228,000 5,370 3,102
Shenzhen Chiwan Wharf Holdings Ltd., B . . 2,783,848 5,185 3,739
Sinotrans Ltd., H .................... 12,194,000 3,628 1,938
Sohu.com Inc. ...................... 40,500 1,651 1,904
Travelsky Technology Ltd., H ........... 11,976,000 6,554 6,354
Uni–President China Holdings Ltd. ....... 1,794,000 1,083 1,890
76,725 72,720
South Korea: 10.90%
Hana Financial Group Inc. . . ........... 97,970 3,193 3,170
Hite Jinro ......................... 103,746 2,361 2,940
Hyundai Development Co. . . ........... 134,480 3,900 2,719
Lotte Shopping Co. Ltd. . . ............. 22,838 7,331 8,008
POSCO . .......................... 9,987 3,723 3,250
Samsung Electronics Co. Ltd. ........... 7,985 4,954 11,342
Samsung Heavy Industries Co. Ltd. ....... 110,350 3,204 3,967
SK Innovation Co. Ltd. . . . ............. 26,721 3,472 4,342
32,138 39,738
Indonesia: 9.37%
PT Astra International Tbk . . ........... 10,019,000 4,047 7,744
PT Bank Central Asia Tbk . ............. 6,149,500 3,472 5,736
PT Bank Danamon Indonesia Tbk ........ 15,066,887 7,940 8,696
PT Indo Tambangraya Megah Tbk ....... 420,000 1,655 1,775
PT Indofood Sukses Makmur Tbk ........ 4,597,000 2,673 2,771
PT Semen Gresik (Persero) Tbk ......... 1,488,500 1,562 2,424
PT Telekomunikasi Indonesia Persero
Tbk, B ......................... 2,037,000 1,604 1,868
PT United Tractors Tbk . . ............. 1,546,000 3,371 3,131
26,324 34,145
India: 9.09%
Bajaj Holdings and Investment Ltd. ....... 26,320 454 465
Hindalco Industries Ltd. . . ............. 1,621,380 3,219 3,819
Infosys Ltd. ....................... 115,800 5,435 4,847
Oil & Natural Gas Corp. Ltd. . ........... 744,816 4,467 3,607
Average
Cost
Fair
Value
Shares
(000s) (000s)
India: 9.09% (Continued)
Reliance Industries Ltd. ................ 263,651 $ 6,257 $ 3,996
Sesa Goa Ltd. ....................... 700,160 3,410 2,465
Tata Chemicals Ltd. ................... 940,049 5,576 5,996
Tata Consultancy Services Ltd. . . ......... 265,540 5,937 6,039
Tata Investment Corp. Ltd. .............. 228,950 2,291 1,911
37,046 33,145
Taiwan: 7.52%
Hon Hai Precision Industry Co. Ltd. ........ 747,541 1,867 2,269
HTC Corp. .......................... 266,450 5,135 2,736
President Chain Store Corp. ............. 344,401 713 1,830
Siliconware Precision Industries Co. ....... 3,609,814 4,525 3,818
Taiwan Semiconductor Manufacturing
Co. Ltd. ......................... 2,069,946 3,914 6,855
United Microelectronics Corp. ............ 7,376,000 3,458 2,949
Uni–President Enterprises Corp. . ......... 3,829,440 4,228 6,975
23,840 27,432
Russia: 7.02%
Gazprom, American Depositary Receipt ..... 634,970 8,812 6,136
LUKOIL Holdings, American Depositary
Receipt .......................... 80,746 3,663 5,411
LUKOIL Holdings, American Depositary
Receipt .......................... 77,767 4,325 5,110
Mining and Metallurgical Co. Norilsk Nickel,
American Depositary Receipt . ......... 267,424 5,187 5,028
Sberbank of Russia ................... 914,720 1,324 2,763
Uralkali OJSC, Global Depositary Receipt .... 29,950 1,018 1,137
24,329 25,585
Thailand: 5.18%
Asia Aviation PCL ..................... 1,309,400 159 205
Asia Aviation PCL, Foreign Traded Security . . 4,850,000 590 762
Banpu PCL, Foreign Traded Security ....... 183,500 3,209 2,454
Hana Microelectronics PCL, Foreign Traded
Security ......................... 2,672,500 2,032 1,978
Kasikornbank PCL, Foreign Traded
Security ......................... 517,300 991 3,250
PTT PCL, Foreign Traded Security ......... 313,000 2,339 3,374
Shin Corp. PCL, Foreign Traded Security .... 1,200,500 1,552 2,650
Siam Commercial Bank PCL, Foreign Traded
Security ......................... 714,700 1,599 4,211
12,471 18,884
Singapore: 3.73%
DBS Group Holdings Ltd. .............. 164,000 1,774 2,000
Fraser and Neave Ltd. ................. 183,100 294 1,454
Keppel Corp. Ltd. .................... 774,800 4,847 7,028
Rickmers Maritime .................... 3,293,000 2,654 931
Wilmar International Ltd. ............... 791,000 2,030 2,169
11,599 13,582
The accompanying notes are an integral part of these financial statements.
20 Franklin Templeton Investments Funds

Templeton Emerging Markets Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Brazil: 3.44%
Companhia de Bebidas das Americas
(AmBev) . ........................
Itau Unibanco Holding SA, American
79,482 $ 825 $ 3,280
Depositary Receipt .................. 566,457 10,828 9,261
11,653 12,541
Turkey: 2.85%
Akbank TAS ........................ 920,790 3,600 4,507
Tupras–Turkiye Petrol Rafinerileri AS ....... 143,010 2,355 4,085
Turkiye Garanti Bankasi AS ............. 350,000 1,343 1,803
7,298 10,395
Mexico: 2.40%
America Movil SAB de CV, L, American
Depositary Receipt .................. 278,004 6,905 6,390
Kimberly Clark de Mexico SAB de CV, A .... 921,600 1,817 2,358
8,722 8,748
Hong Kong: 1.65%
Amvig Holdings Ltd. ................... 6,672,000 4,012 2,377
Dairy Farm International Holdings Ltd. ...... 334,327 621 3,624
4,633 6,001
United Kingdom: 1.56%
Anglo American PLC .................. 183,563 6,218 5,676
South Africa: 1.12%
ABSA Group Ltd. ..................... 84,600 1,213 1,640
Tiger Brands Ltd. ..................... 63,420 2,051 2,436
3,264 4,076
Chile: 0.61%
Cia Cervecerias Unidas SA, American
Depositary Receipt .................. 70,875 1,879 2,225
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Malaysia: 0.51%
Airasia Bhd. ................... 2,100,300 $ 2,016 $ 1,862
Hungary: 0.49%
Egis Pharmaceuticals PLC ......... 22,864 3,085 1,786
Total Common Stocks: ............ 293,240 318,541
PREFERRED STOCKS: 9.76%
Banco Bradesco SA, American
Depositary Receipt, Preferred ..... 585,632 8,769 10,104
Embotelladora Andina SA,
Preferred, A ................. 711,170 2,368 3,585
Metalurgica Gerdau SA, Preferred .... 137,000 2,260 1,559
Petroleo Brasileiro SA, American
Depositary Receipt, Preferred ..... 374,304 10,728 7,179
Vale SA, American Depositary Receipt,
Preferred, A ................. 652,150 13,565 13,143
Total Preferred Stocks: ............ 37,690 35,570
Total Long-Term Investments: ....... 330,930 354,111
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 4.39%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 .............. 16,000,000 CAD 16,000 16,000
Total Short-Term Securities: ........ 16,000 16,000
Transaction costs (Note 2) ........... (804) —
TOTAL INVESTMENTS: 101.54% ..... $346,126 370,111
OTHER ASSETS, less liabilities: (1.54%) ... (5,610)
TOTAL NET ASSETS: 100.00% ...... $364,501
Franklin Templeton Investments Funds 21

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 370,111 $ 346,196
Canadian 32 67
Foreign
Receivables
— 606
Investment securities sold 9 3,265
Capital units sold 37 97
Dividends, interest and withholding tax 632 409
Other assets (Note 8) 68 93
Total assets
Liabilities
Payables
370,889 350,733
Investment securities purchased 5,329 785
Capital units redeemed 239 413
Management fees 602 641
Foreign capital taxes payable 5 227
Accrued expenses 213 284
Total liabilities 6,388 2,350
Net assets $ 364,501 $ 348,383
Total net assets per series (000s)
Series A $184,214 $188,143
Series F 7,651 7,414
Series I 385 497
Series O 172,251 152,329
Number of units outstanding (Note 3)
Series A 19,414,729 22,003,371
Series F 699,910 760,843
Series I 36,835 53,090
Series O 12,011,332 12,138,450
Net assets per unit — CAD
Series A $9.49 $8.55
Series F 10.93 9.74
Series I 10.45 9.37
Series O 14.34 12.55
Net assets per unit — USD
Series A $9.55 $8.39
Series F 11.00 9.56
Series I 10.52 9.19
Series O 14.44 12.31
Cost of investments held (000s) $346,126 $356,159
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton Emerging Markets Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $1,198; 2011 — $1,494) $ 10,140 $ 12,517
Interest 88 73
Total investment income
Expenses
10,228 12,590
Management fees (Note 4(a)) 5,296 6,490
Transfer agent fees (Note 4(c)) 1,372 1,502
Custodian fees 126 187
Legal fees 1 1
Audit fees 29 35
Unitholder reporting costs 13 37
Independent review committee fees 2 1
Registration fees 51 47
Other expenses (Note 7) 225 246
Total expenses 7,115 8,546
Expenses waived/paid by Manager (Note 6) (1,437) (1,156)
Net expenses 5,678 7,390
Net investment income (loss) 4,550 5,200
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
6,198 40,734
gain (loss)
Net change in unrealized appreciation
(128) (758)
(depreciation) in value of investments 33,948 (134,445)
Transaction costs (Note 11) (409) (856)
Net gain (loss) on investments 39,609 (95,325)
Increase (decrease) in net assets from operations $ 44,159 $ (90,125)
Increase (decrease) in net assets from operations
per series (000s)
Series A $21,605 $(49,568)
Series F 971 (1,768)
Series I 62 (118)
Series O 21,521 (38,671)
Increase (decrease) in net assets from operations
per unit
Series A $1.05 $(2.18)
Series F 1.31 (2.35)
Series I 1.54 (2.31)
Series O 2.11 (2.36)
The accompanying notes are an integral part of these financial statements.
22 Franklin Templeton Investments Funds

Templeton Emerging Markets Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 44,159 $ (90,125) $ 21,605 $ (49,568) $ 971 $ (1,768)
Distributions to unitholders
From net investment income (4,179) (5,579) (2,122) (3,017) (88) (118)
From capital gains — (6,016) — (3,254) — (127)
From return of capital — — — — — —
(4,179) (11,595) (2,122) (6,271) (88) (245)
Capital unit transactions
Subscriptions 114,071 95,242 9,975 14,051 1,732 1,670
Reinvestments 4,101 11,426 2,051 6,118 84 239
Redemptions (142,034) (323,131) (35,438) (40,924) (2,462) (1,955)
(23,862) (216,463) (23,412) (20,755) (646) (46)
Increase (decrease) in net assets for the period 16,118 (318,183) (3,929) (76,594) 237 (2,059)
Net assets — beginning of period 348,383 666,566 188,143 264,737 7,414 9,473
Net assets — end of period $ 364,501 $ 348,383 $ 184,214 $ 188,143 $ 7,651 $ 7,414
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 62 $ (118) $ 21,521 $ (38,671)
Distributions to unitholders
From net investment income (4) (8) (1,965) (2,436)
From capital gains — (9) — (2,626)
From return of capital — — — —
(4) (17) (1,965) (5,062)
Capital unit transactions
Subscriptions 38 17 102,326 79,504
Reinvestments 1 7 1,965 5,062
Redemptions (209) — (103,925) (280,252)
(170) 24 366 (195,686)
Increase (decrease) in net assets for the period (112) (111) 19,922 (239,419)
Net assets — beginning of period 497 608 152,329 391,748
Net assets — end of period $ 385 $ 497 $ 172,251 $ 152,329
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 23

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Frontier Markets Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 94.18%
COMMON STOCKS: 94.18%
Nigeria: 10.30%
Ecobank Transnational Inc. ............... 6,191,625 $ 439 $ 434
FBN Holdings PLC ..................... 30,705,145 2,470 3,072
Guinness Nigeria PLC .................. 560,014 834 954
Nigerian Breweries PLC ................. 289,871 252 270
UAC of Nigeria PLC .................... 3,313,615 747 866
United Bank for Africa PLC ............... 39,521,926 876 1,131
Zenith Bank PLC ...................... 23,095,884 2,140 2,771
7,758 9,498
Qatar: 9.06%
Commercial Bank of Qatar QSC ............ 36,249 747 693
Industries Qatar QSC ................... 85,640 3,385 3,621
Qatar Electricity & Water Co. .............. 12,534 473 446
Qatar Telecom QSC .................... 126,807 3,747 3,598
8,352 8,358
Kazakhstan: 6.86%
Kazakhmys PLC ....................... 166,530 2,294 2,137
KazMunaiGas Exploration Production, Global
Depositary Receipt ................... 190,696 3,415 3,409
KCell JSC, Global Depositary Receipt ........ 35,333 366 412
Zhaikmunai LP, Global Depositary Receipt .... 34,900 373 371
6,448 6,329
Romania: 6.50%
Alro Slatina SA . ....................... 48,700 52 27
Banca Transilvania .................... 5,084,161 1,706 1,904
OMV Petrom SA ....................... 31,486,431 3,485 3,974
SC Bursa de Valori Bucuresti SA ........... 15,602 161 92
5,404 5,997
Saudi Arabia: 5.43%
Deutsche Bank AG/London, Saudi Basic
Industries Corp., 9/27/16 .............. 52,849 1,257 1,256
Deutsche Bank AG/London, Saudi Dairy &
Foodstuff Co., 5/13/14 ................ 3,600 57 62
HSBC Bank PLC, Etihad Etisalat Co.,
12/05/14 . . . ....................... 89,053 1,541 1,792
HSBC Bank PLC, Fawaz Abdulaziz Alhokair &
Co., 8/13/14 ....................... 32,856 606 905
HSBC Bank PLC, Samba Financial Group,
8/13/14 . . . ....................... 37,487 457 444
HSBC Bank PLC, Saudi Basic Industries Corp.,
8/04/14 . . . ....................... 23,184 565 551
4,483 5,010
Kenya: 5.18%
British American Tobacco Kenya Ltd. Corp. . . . 111,800 517 607
East African Breweries Ltd. ............... 558,700 1,497 1,626
Equity Bank Ltd. ...................... 3,274,700 796 898
Average
Cost
Fair
Value
Shares
(000s) (000s)
Kenya: 5.18% (Continued)
KenolKobil Ltd. Group .................. 1,315,100 $ 205 $ 197
Kenya Airways Ltd. ..................... 1,000,780 154 119
Safaricom Ltd. ........................ 24,048,200 970 1,333
4,139 4,780
United Arab Emirates: 4.47%
Agthia Group PJSC ..................... 755,439 392 445
Aramex Co. .......................... 1,326,110 648 714
Depa Ltd. ........................... 356,930 139 121
First Gulf Bank PJSC ................... 759,655 2,336 2,403
National Bank of Abu Dhabi .............. 159,045 433 441
3,948 4,124
South Africa: 4.31%
MTN Group Ltd. ...................... 189,600 3,469 3,975
Panama: 4.06%
Cable & Wireless Communications PLC ...... 2,583,083 1,536 1,486
Copa Holdings SA ..................... 22,922 1,779 2,263
3,315 3,749
Turkmenistan: 3.92%
Dragon Oil PLC ....................... 401,017 3,649 3,613
Peru: 3.77%
Compania de Minas Buenaventura SA,
American Depositary Receipt ........... 41,470 1,459 1,481
Credicorp Ltd. ........................ 10,600 1,226 1,542
Intercorp Financial Services Inc. ........... 12,740 418 453
3,103 3,476
Egypt: 3.69%
Alexandria Mineral Oils Co. ............... 76,174 928 851
Eastern Tobacco ...................... 24,402 380 363
Egyptian International Pharmaceutical
Industries Co. ...................... 87,000 503 516
Maridive & Oil Services SAE .............. 436,363 597 507
Orascom Telecom Holding SAE, Global
Depositary Receipt ................... 377,600 1,134 1,170
3,542 3,407
Ukraine: 3.67%
Agroton Public Ltd. .................... 52,176 359 168
Ferrexpo PLC ........................ 501,290 1,870 2,089
MHP SA, Global Depositary Receipt ......... 74,750 1,024 1,132
3,253 3,389
Vietnam: 3.07%
Binh Minh Plastics JSC ................. 9,290 15 20
Dong Phu Rubber JSC .................. 65,380 164 169
FPT Corp. ........................... 43,637 84 73
Hau Giang Pharmaceutical JSC ............ 75,010 231 261
Hoa Phat Group JSC ................... 210,651 194 211
Imexpharm Pharmaceutical JSC ........... 43,153 87 73
The accompanying notes are an integral part of these financial statements.
24 Franklin Templeton Investments Funds

Templeton Frontier Markets Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Vietnam: 3.07% (Continued)
PetroVietnam Drilling and Well Services JSC .... 458,950 $ 810 $ 821
Petrovietnam Fertilizer and Chemical JSC . ..... 450,520 688 769
PetroVietnam Technical Services Corp. . . ..... 609,845 452 400
PetroVietnam Technical Services Corp., Rights,
1/18/13 . . .......................... 530,300 — 33
2,725 2,830
Colombia: 3.01%
Bancolombia SA, American
Depositary Receipt . ................... 13,883 890 918
Pacific Rubiales Energy Corp. .............. 80,436 1,895 1,855
2,785 2,773
Zimbabwe: 2.68%
Delta Corp. Ltd. . . ...................... 1,311,670 1,048 1,303
Econet Wireless Zimbabwe Ltd. ............. 276,698 1,202 1,168
2,250 2,471
Oman: 2.49%
Bank Muscat SAOG . . ................... 1,549,684 2,437 2,299
South Korea: 1.84%
Youngone Corp. . . ...................... 55,190 1,539 1,701
Pakistan: 1.67%
Fauji Fertilizer Co. Ltd. ................... 1,146,963 1,496 1,371
Indus Motor Co. Ltd. . . ................... 60,476 158 167
1,654 1,538
Argentina: 1.66%
Grupo Clarin SA, B, Global Depositary Receipt . . 5,950 51 21
Telecom Argentina SA, B, American
Depositary Receipt . ................... 44,316 461 500
Ternium SA, American Depositary Receipt ..... 43,300 972 1,012
1,484 1,533
Mauritius: 1.51%
Mauritius Commercial Bank ............... 236,360 1,299 1,316
New Mauritius Hotels Ltd. ................. 41,100 108 76
1,407 1,392
Georgia: 1.50%
Bank of Georgia Holdings PLC ............. 83,000 1,450 1,388
Algeria: 1.46%
CFAO SA . ............................ 27,895 985 1,344
Cambodia: 0.88%
NagaCorp Ltd. . . . ...................... 1,358,000 461 816
Jordan: 0.76%
Arab Potash Co. PLC . ................... 4,276 272 266
Jordan Phosphate Mines ................. 23,978 435 435
707 701
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Lebanon: 0.20%
BLOM Bank SAL, Global Depositary Receipt ..... 23,650 $ 183 $ 185
Lesotho: 0.11%
Gem Diamonds Ltd. ...................... 41,471 155 97
Latvia: 0.06%
Grindeks .............................. 6,640 65 57
Botswana: 0.04%
Letshego Holdings Ltd. .................... 135,612 25 33
Malawi: 0.02%
Press Corp. Ltd., Global Depositary Receipt ...... 1,600 36 18
Total Common Stocks: ..................... 81,211 86,881
Total Long-Term Investments: ................ 81,211 86,881
Transaction costs (Note 2) .................... (431) —
TOTAL INVESTMENTS: 94.18% ............... $80,780 86,881
OTHER ASSETS, less liabilities: 5.82% ......... 5,369
TOTAL NET ASSETS: 100.00% ............... $92,250
Franklin Templeton Investments Funds 25

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
Templeton Frontier Markets Fund
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 86,881 $ 5,481
Canadian 6,230 443
Foreign
Receivables
202 5
Dividends and withholding tax 55 9
Other assets (Note 8) — 1
Total assets
Liabilities
Payables
93,368 5,939
Investment securities purchased 1,077 27
Foreign capital taxes payable 25 —
Distributions to unitholders — 46
Other liabilities (Note 9) 16 —
Total liabilities 1,118 73
Net assets $ 92,250 $ 5,866
Total net assets per series (000s)
Series O $92,250 $5,866
Number of units outstanding (Note 3)
Series O 8,615,523 654,315
Net assets per unit — CAD
Series O $10.70 $8.97
Net assets per unit — USD
Series O $10.77 $8.80
Cost of investments held (000s) $80,780 $6,005
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $73; 2011 — $1) $ 2,637 $ 56
Total investment income
Expenses
2,637 56
Management fees (Note 4(a)) — —
Transfer agent fees (Note 4(c)) — —
Custodian fees 4 1
Legal fees 1 —
Audit fees 18 2
Unitholder reporting costs 2 —
Independent review committee fees 1 —
Registration fees 15 2
Other expenses (Note 7) 19 4
Total expenses 60 9
Expenses waived/paid by Manager (Note 6) (60) (9)
Net expenses — —
Net investment income (loss) 2,637 56
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(180) (15)
gain (loss)
Net change in unrealized appreciation (depreciation)
(53) (17)
in value of investments 6,625 (524)
Transaction costs (Note 11) (444) (33)
Net gain (loss) on investments 5,948 (589)
Increase (decrease) in net assets from operations $ 8,585 $ (533)
Increase (decrease) in net assets from operations
per series (000s)
Series O $8,585 $(533)
Increase (decrease) in net assets from operations
per unit
Series O $2.09 $(0.97)
The accompanying notes are an integral part of these financial statements.
26 Franklin Templeton Investments Funds

Templeton Frontier Markets Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
Series O
2012 2011
Increase (decrease) in net assets from operations $ 8,585 $ (533)
Distributions to unitholders
From net investment income (2,587) (46)
From capital gains — —
From return of capital — —
Capital unit transactions
(2,587) (46)
Subscriptions 87,732 11,152
Reinvestments 2,632 —
Redemptions (9,978) (4,707)
80,386 6,445
Increase (decrease) in net assets for the period 86,384 5,866
Net assets — beginning of period 5,866 —
Net assets — end of period $ 92,250 $ 5,866
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 27

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 87.66%
COMMON STOCKS: 59.53%
United States: 20.41%
Abbott Laboratories ....................... 5,610 $ 290 $ 365
Abercrombie & Fitch Co., A ................. 8,870 300 423
Applied Materials Inc. ..................... 50,210 553 570
Baker Hughes Inc. ....................... 17,100 716 694
Brocade Communications Systems Inc. . . ....... 80,220 427 424
Chesapeake Energy Corp. . ................. 20,050 350 331
Chevron Corp. . .......................... 5,860 478 630
Cisco Systems Inc. ....................... 45,890 1,007 896
Citigroup Inc. . .......................... 16,850 515 662
Comcast Corp., Special A ................... 36,730 640 1,312
CVS Caremark Corp. ...................... 28,020 896 1,346
General Electric Co. ....................... 50,710 1,654 1,057
Halliburton Co. .......................... 2,530 82 87
JPMorgan Chase & Co. .................... 21,930 1,089 958
LyondellBasell Industries NV, A .............. 11,770 524 668
Macy’s Inc. . ............................ 18,520 668 718
Medtronic Inc. .......................... 12,850 536 523
Merck & Co. Inc. ......................... 17,600 796 716
Microsoft Corp. .......................... 33,240 989 882
Navistar International Corp. ................. 8,143 299 176
NewPage Holdings Inc. .................... 400 38 38
Oracle Corp. . . .......................... 20,777 566 688
Pfizer Inc. . . ............................ 27,500 641 685
Service Corp. International . ................. 43,510 480 596
The Home Depot Inc. ..................... 4,520 119 278
The Procter & Gamble Co. . ................. 7,700 489 519
United Parcel Service Inc., B ................ 9,230 584 676
Walgreen Co. . .......................... 7,050 245 259
15,971 17,177
United Kingdom: 10.79%
Aviva PLC . . ............................ 108,080 1,708 664
BPPLC ............................... 89,580 1,094 619
Carillion PLC . . .......................... 78,920 481 408
GlaxoSmithKline PLC ...................... 38,635 1,138 835
Hays PLC . . ............................ 226,963 356 307
HSBC Holdings PLC ...................... 113,209 1,956 1,177
Kingfisher PLC .......................... 267,883 1,359 1,243
Marks & Spencer Group PLC ................ 172,720 1,046 1,079
Royal Dutch Shell PLC, B ................... 31,559 1,264 1,118
Tesco PLC . ............................ 152,491 1,147 835
Vodafone Group PLC ...................... 318,255 987 796
12,536 9,081
France: 5.86%
AXASA ............................... 54,497 1,029 979
BNP Paribas SA ......................... 15,730 713 889
Average
Cost
Fair
Value
Shares
(000s) (000s)
France: 5.86% (Continued)
Compagnie de Saint–Gobain ............... 6,880 $ 282 $ 293
GDF Suez ............................ 21,060 585 431
Sanofi ............................... 14,866 1,319 1,400
Total SA, B ........................... 18,100 1,386 935
5,314 4,927
Switzerland: 4.29%
ABB Ltd. . . ........................... 25,970 494 528
Adecco SA ........................... 7,606 289 392
Credit Suisse Group AG .................. 28,402 713 685
Novartis AG ........................... 10,870 543 678
Roche Holding AG ...................... 4,650 709 928
Vontobel Holding AG .................... 14,063 455 397
3,203 3,608
Germany: 4.20%
Muenchener Rueckversicherungs–
Gesellschaft AG ...................... 6,920 1,052 1,241
SAPAG.............................. 11,380 527 909
Siemens AG .......................... 12,740 1,068 1,383
2,647 3,533
Hong Kong: 2.75%
AIA Group Ltd. ......................... 279,600 791 1,084
Cheung Kong (Holdings) Ltd. .............. 26,000 427 395
Hutchison Whampoa Ltd. ................. 81,000 611 839
1,829 2,318
Japan: 2.30%
Itochu Corp. .......................... 53,900 538 565
Nissan Motor Co. Ltd. .................... 64,600 596 608
Toyota Motor Corp. ...................... 16,500 756 764
1,890 1,937
China: 1.65%
China Telecom Corp. Ltd., H ............... 456,000 295 251
Shanghai Electric Group Co. Ltd. ............ 1,648,000 990 699
Travelsky Technology Ltd., H .............. 828,000 401 440
1,686 1,390
Singapore: 1.49%
Jardine Cycle & Carriage Ltd. .............. 15,000 567 593
Singapore Telecommunications Ltd. ......... 244,000 587 660
1,154 1,253
Norway: 1.09%
Statoil ASA ........................... 36,730 806 919
Netherlands: 1.02%
ING Groep NV ......................... 91,366 2,535 862
Ireland: 0.92%
CRHPLC ............................ 38,445 1,033 776
The accompanying notes are an integral part of these financial statements.
28 Franklin Templeton Investments Funds

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Spain: 0.74%
Tecnicas Reunidas SA ..................... 13,358 $ 465 $ 621
South Korea: 0.66%
KB Financial Group Inc. .................... 7,638 666 270
POSCO ................................ 879 279 286
945 556
Italy: 0.56%
Unicredit SpA . .......................... 96,153 2,684 470
Russia: 0.35%
Mobile TeleSystems, American Depositary
Receipt . ............................ 15,875 272 294
Canada: 0.30%
Talisman Energy Inc. ...................... 22,800 298 256
Australia: 0.15%
Billabong International Ltd. ................. 147,808 432 128
Total Common Stocks: ..................... 55,700 50,106
Average
Cost
Fair
Value
Shares
(000s) (000s)
EQUITY-LINKED SECURITIES: 2.00%
United States: 2.00%
Royal Bank of Canada into Morgan
Stanley, 11/18/13 .......................
The Goldman Sachs Group Inc. into Baker Hughes
13,800 $ 243 $ 259
Inc., 1/31/13 .......................... 14,559 711 592
The Goldman Sachs Group Inc. into Dell Inc., 1/31/13
The Goldman Sachs Group Inc. into Halliburton Co.,
26,948 441 272
1/31/13 .............................. 16,144 559 558
1,954 1,681
Total Equity-Linked Securities: 1,954 1,681
PREFERRED STOCKS: 1.32%
GMAC Capital Trust I, Preferred . . ............. 800 19 21
Vale SA, American Depositary Receipt, Preferred, A . . . 54,273 957 1,094
Total Preferred Stocks: ...................... 976 1,115
Principal Amount
in Currency
of Issue
BONDS: 24.81%
Brazil (1) : 6.93%
Nota Do Tesouro Nacional
10.00%, 1/1/2017 .......................................................................... 4,165 BRL 2,137 2,127
Index Linked, 6.00%, 5/15/2015 .............................................................. 1,025 BRL 1,212 1,208
Index Linked, 6.00%, 5/15/2045 .............................................................. 1,690 BRL 2,070 2,495
5,419 5,830
United States: 4.28%
Ally Financial Inc., Senior Note, 7.50%, 9/15/2020 .................................................. 100,000 USD 111 120
Calpine Corp., Senior Secured Note, 7.875%, 7/31/2020 ............................................. 94,000 USD 97 105
Chesapeake Energy Corp., Senior Note, 6.625%, 8/15/2020 .......................................... 100,000 USD 103 106
CHS/Community Health Systems Inc., Senior Secured Note, 5.125%, 8/15/2018 .......................... 100,000 USD 99 104
CIT Group Inc.
Senior Note, 5.375%, 5/15/2020 .............................................................. 50,000 USD 49 54
Senior Note, 5.00%, 8/15/2022 ............................................................... 50,000 USD 50 53
Clear Channel Communications Inc., Senior Note, 9.00%, 3/1/2021 .................................... 50,000 USD 49 44
Clear Channel Worldwide Holdings Inc., Senior Subordinate Note, 7.625%, 3/15/2020 ..................... 50,000 USD 50 50
Cricket Communications Inc., Senior Note, 7.75%, 10/15/2020 ........................................ 100,000 USD 99 101
Euramax International Inc., Senior Secured Note, 9.50%, 4/1/2016 ..................................... 100,000 USD 97 93
Fontainebleau Las Vegas, 11.00%, 6/15/2015 ...................................................... 100,000 USD 100 —
Ford Motor Credit Co. LLC, Senior Note, 8.125%, 1/15/2020 .......................................... 100,000 USD 102 127
Frontier Communications Corp., Senior Note, 8.50%, 4/15/2020 ....................................... 100,000 USD 103 114
General Electric Capital Corp., Senior Note, A, 8.50%, 4/6/2018 ....................................... 10,000,000 MXN 959 835
GMAC Inc., Subordinated Note, 8.00%, 12/31/2018 ................................................. 25,000 USD 24 29
HCA Inc., Senior Note, 6.50%, 2/15/2016 ......................................................... 100,000 USD 100 108
Jarden Corp., Senior Subordinate Note, 7.50%, 5/1/2017 ............................................. 100,000 USD 109 112
(1) Principal amount in 1000 Brazilian Real units
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 29

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 4.28% (Continued)
Linn Energy LLC/Finance Corp., Senior Note, 8.625%, 4/15/2020 .................................. 100,000 USD $ 99 $ 108
Meritor Inc., Senior Note, 10.625%, 3/15/2018 ................................................. 100,000 USD 113 104
MGM Resorts International, Senior Note, 7.75%, 3/15/2022 ...................................... 100,000 USD 99 106
Peabody Energy Corp., Senior Note, 6.00%, 11/15/2018 ......................................... 100,000 USD 101 105
Quicksilver Resources Inc., Senior Note, 8.25%, 8/1/2015 ........................................ 100,000 USD 100 92
Radio One Inc., Senior Subordinate Note, Payment–In–Kind, 15.00%, 5/24/2016 ..................... 78,235 USD 76 70
Reynolds Group Issuer Inc./LLC/SA, Senior Note, 8.50%, 5/15/2018 ................................ 100,000 USD 103 102
Samson Investment Co., Senior Note, 9.75%, 2/15/2020 ......................................... 100,000 USD 100 105
Shingle Springs Tribal Gaming Authority, Senior Note, 9.375%, 6/15/2015 ........................... 100,000 USD 84 97
Sprint Nextel Corp., Senior Note, 9.00%, 11/15/2018 ............................................
Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc.,
100,000 USD 102 123
Senior Secured Note, 11.50%, 10/1/2020 ................................................... 150,000 USD 115 117
United Rentals North America Inc., Senior Subordinate Note, 8.375%, 9/15/2020 ..................... 100,000 USD 102 110
Univision Communications Inc., Senior Secured Note, 6.875%, 5/15/2019 ........................... 100,000 USD 95 103
VPI Escrow Corp., Senior Note, 6.375%, 10/15/2020 ............................................ 100,000 USD 98 106
Average
Cost
Fair
Value
3,688 3,603
Ireland: 2.50%
Government of Ireland
5.50%, 10/18/2017 ..................................................................... 753,000 EUR 918 1,080
5.00%, 10/18/2020 ..................................................................... 753,000 EUR 869 1,023
1,787 2,103
Uruguay: 1.82%
Uruguay Treasury Bill, Strip, 9/9/2013 ........................................................ 31,490,000 UYU 1,514 1,533
Poland: 1.50%
Government of Poland, 6.25%, 10/24/2015 ................................................... 3,640,000 PLN 1,229 1,266
South Korea: 1.44%
Korea Monetary Stabilization Bond
Senior Bond, 3.38%, 5/9/2013 ............................................................ 124,000,000 KRW 108 116
Senior Bond, 3.76%, 6/2/2013 ............................................................ 19,880,000 KRW 17 19
Senior Bond, 3.90%, 8/2/2013 ............................................................ 37,280,000 KRW 33 35
Senior Bond, 3.59%, 10/2/2013 ........................................................... 34,790,000 KRW 30 33
Senior Bond, 3.48%, 12/2/2013 ........................................................... 59,660,000 KRW 52 56
Senior Bond, 3.47%, 2/2/2014 ............................................................ 82,050,000 KRW 73 77
Senior Bond, 3.59%, 4/2/2014 ............................................................ 120,590,000 KRW 107 114
Senior Note, 3.83%, 4/2/2013 ............................................................ 12,430,000 KRW 11 12
Senior Note, 3.28%, 6/9/2013 ............................................................ 123,650,000 KRW 109 116
Senior Note, 3.28%, 6/2/2014 ............................................................ 142,950,000 KRW 126 134
Korea Treasury Bond
Senior Bond, 3.75%, 6/10/2013 ........................................................... 122,000,000 KRW 110 114
Senior Bond, 3.00%, 12/10/2013 .......................................................... 346,440,000 KRW 308 324
Senior Note, 5.25%, 3/10/2013 ........................................................... 39,600,000 KRW 36 37
Senior Note, 3.25%, 12/10/2014 .......................................................... 30,730,000 KRW 29 29
1,149 1,216
Supranational: 1.13%
Inter–American Development Bank, Senior Note, 7.50%, 12/5/2024 ................................ 11,000,000 MXN 1,048 954
The accompanying notes are an integral part of these financial statements.
30 Franklin Templeton Investments Funds

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Ghana: 0.86%
Government of Ghana
15.65%, 6/3/2013 ..................................................................... 160,000 GHS $ 82 $ 81
14.25%, 7/29/2013 ................................................................... 230,000 GHS 116 115
24.00%, 5/25/2015 ................................................................... 390,000 GHS 220 218
21.00%, 10/26/2015 .................................................................. 400,000 GHS 214 212
26.00%, 6/5/2017 ..................................................................... 160,000 GHS 99 98
Average
Cost
Fair
Value
731 724
Indonesia: 0.84%
Government of Indonesia
FR34, 12.80%, 6/15/2021 .............................................................. 1,730,000,000 IDR 257 270
FR35, 12.90%, 6/15/2022 .............................................................. 380,000,000 IDR 50 61
FR36, 11.50%, 9/15/2019 .............................................................. 1,045,000,000 IDR 129 147
FR39, 11.75%, 8/15/2023 .............................................................. 1,015,000,000 IDR 139 156
FR43, 10.25%, 7/15/2022 .............................................................. 500,000,000 IDR 62 70
637 704
United Kingdom: 0.59%
CEVA Group PLC, Senior Secured Note, 11.50%, 4/1/2018 ...................................... 100,000 USD 101 83
Expro Finance Luxembourg, Senior Secured Note, 8.50%, 12/15/2016 ............................. 100,000 USD 102 104
Ineos Group Holdings Ltd., Senior Note, 7.875%, 2/15/2016 ..................................... 75,000 EUR 80 98
Kerling PLC, Senior Secured Note, 10.625%, 2/1/2017 ......................................... 50,000 EUR 64 63
The Royal Bank of Scotland PLC, Subordinated Note, 6.934%, 4/9/2018 ........................... 100,000 EUR 116 147
463 495
Mexico: 0.49%
Cemex SAB de CV, Senior Secured Note, 9.00%, 1/11/2018 ..................................... 100,000 USD 99 108
Government of Mexico, 9.00%, 6/20/2013 (2) .................................................. 38,600 MXN 348 305
447 413
Australia: 0.44%
New South Wales Treasury Corp., 5.50%, 8/1/2013 ............................................ 65,000 AUD 68 68
Queensland Treasury Corp.
Senior Note, 6.00%, 8/14/2013 .......................................................... 200,000 AUD 171 210
Senior Note, 6.00%, 8/21/2013 .......................................................... 50,000 AUD 51 53
Western Australia Treasury Corp., 8.00%, 6/15/2013 ........................................... 37,000 AUD 39 39
329 370
Russia: 0.36%
Government of Russia, Senior Bond, 7.50%, 3/31/2030 ......................................... 236,375 USD 252 300
Malaysia: 0.27%
Government of Malaysia
3.434%, 8/15/2014 ................................................................... 155,000 MYR 50 51
Senior Bond, 3.702%, 2/25/2013 ........................................................ 20,000 MYR 6 6
Senior Bond, 3.70%, 5/15/2013 .......................................................... 5,000 MYR 2 2
Senior Bond, 3.21%, 5/31/2013 .......................................................... 135,000 MYR 43 44
Senior Bond, 3.461%, 7/31/2013 ........................................................ 150,000 MYR 48 49
(2) Principal amount in 100 Mexican Peso units
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 31

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Malaysia: 0.27% (Continued)
Senior Bond, 8.00%, 10/30/2013 .............................................................. 10,000 MYR $ 4 $ 3
Senior Bond, 5.094%, 4/30/2014 .............................................................. 225,000 MYR 74 75
Average
Cost
Fair
Value
227 230
Jamaica: 0.26%
Digicel Group Ltd., Senior Note, 8.25%, 9/30/2020 .................................................. 200,000 USD 196 217
Luxembourg: 0.25%
ArcelorMittal, Senior Note, 5.50%, 3/1/2021 ....................................................... 100,000 USD 92 99
Intelsat Jackson Holdings SA, Senior Note, 7.50%, 4/1/2021 .......................................... 100,000 USD 98 110
190 209
Japan: 0.18%
eAccess Ltd., Senior Note, 8.375%, 4/1/2018 ...................................................... 100,000 EUR 123 147
Netherlands: 0.17%
UPCB Finance II Ltd., Senior Secured Note, 6.375%, 7/1/2020 ........................................ 100,000 EUR 135 140
South Africa: 0.15%
Edcon Pty. Ltd., Senior Secured Note, Floating Rate Note, 6/15/2014 ................................... 100,000 EUR 108 126
Kazakhstan: 0.13%
HSBK (Europe) BV, Senior Note, 7.25%, 5/3/2017 .................................................. 100,000 USD 84 109
Italy: 0.12%
Wind Acquisition Finance SA, Senior Secured Note, 11.75%, 7/15/2017 ................................. 100,000 USD 112 104
Peru: 0.08%
Government of Peru, Senior Bond, 7.84%, 8/12/2020 ................................................ 140,000 PEN 48 69
El Salvador: 0.02%
Government of El Salvador, Senior Bond, 7.65%, 6/15/2035 .......................................... 15,000 USD 17 17
Total Bonds: ................................................................................. 19,933 20,879
Total Long-Term Investments: .................................................................... 78,563 73,781
SHORT-TERM SECURITIES: 0.77%
Bank of Negara Monetary Note
2.88%, 1/10/2013 .......................................................................... 40,000 MYR 13 13
2.90%, 1/15/2013 .......................................................................... 20,000 MYR 7 7
2.932%, 1/17/2013 ......................................................................... 60,000 MYR 19 19
2.928%, 2/19/2013 ......................................................................... 60,000 MYR 20 19
2.86%, 2/26/2013 .......................................................................... 50,000 MYR 16 16
2.88%, 3/7/2013 ........................................................................... 50,000 MYR 16 16
3.007%, 3/12/2013 ......................................................................... 15,000 MYR 5 5
2.87%, 3/14/2013 .......................................................................... 100,000 MYR 32 32
2.986%, 5/14/2013 ......................................................................... 10,000 MYR 3 3
2.877%, 5/23/2013 ......................................................................... 120,000 MYR 38 39
2.87%, 6/11/2013 .......................................................................... 100,000 MYR 32 32
3.03%, 6/20/2013 .......................................................................... 10,000 MYR 3 3
2.87%, 7/11/2013 .......................................................................... 100,000 MYR 31 32
2.87%, 7/25/2013 .......................................................................... 120,000 MYR 38 38
2.87%, 8/6/2013 ........................................................................... 290,000 MYR 90 93
2.83%, 8/15/2013 .......................................................................... 355,000 MYR 111 113
The accompanying notes are an integral part of these financial statements.
32 Franklin Templeton Investments Funds

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
2.831%, 8/27/2013 ....................................................................... 160,000 MYR $ 50 $ 51
2.90%, 9/26/2013 ........................................................................ 30,000 MYR 9 10
2.90%, 10/10/2013 ....................................................................... 70,000 MYR 22 22
2.90%, 10/22/2013 ....................................................................... 30,000 MYR 9 10
Philippine Treasury Bill, 0.543%, 11/13/2013 .................................................... 3,120,000 PHP 76 75
Total Short-Term Securities: ................................................................... 640 648
Transaction costs (Note 2) ..................................................................... (346) —
TOTAL INVESTMENTS: 88.43% ................................................................ $78,857 74,429
NET UNREALIZED GAIN ON DERIVATIVES: 0.67% ................................................ 563
OTHER ASSETS, less liabilities: 10.90% ......................................................... 9,176
TOTAL NET ASSETS: 100.00% ................................................................ $84,168
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Average
Cost
Contract
Price
Fair
Value
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ................. A+ January 7, 2013 102 USD $ 102 4,242 PHP $ 103 $ 41.6099 $ 1
DEUTSCHE BANK AG ................. A+ January 22, 2013 34 USD 34 1,480 PHP 36 43.7973 2
DEUTSCHE BANK AG ................. A+ January 24, 2013 217 USD 216 110,600 CLP 229 509.5506 13
DEUTSCHE BANK AG ................. A+ January 25, 2013 111 USD 111 56,720 CLP 118 509.7007 7
DEUTSCHE BANK AG ................. A+ January 25, 2013 198 USD 197 100,160 CLP 207 506.0400 10
DEUTSCHE BANK AG ................. A+ January 28, 2013 193 USD 192 97,680 CLP 202 506.0406 10
DEUTSCHE BANK AG ................. A+ January 29, 2013 62 USD 62 31,560 CLP 65 506.0206 3
DEUTSCHE BANK AG ................. A+ January 30, 2013 124 USD 123 63,110 CLP 131 510.7516 8
DEUTSCHE BANK AG ................. A+ January 31, 2013 115 USD 115 58,900 CLP 122 511.4978 7
DEUTSCHE BANK AG ................. A+ February 15, 2013 106 USD 105 52,530 CLP 108 497.5186 3
DEUTSCHE BANK AG ................. A+ February 25, 2013 51 USD 51 25,570 CLP 53 501.5004 2
DEUTSCHE BANK AG ................. A+ February 26, 2013 78 USD 78 39,530 CLP 82 505.0402 4
DEUTSCHE BANK AG ................. A+ February 28, 2013 129 USD 129 64,780 CLP 134 503.0987 5
DEUTSCHE BANK AG ................. A+ March 4, 2013 105 USD 105 52,610 CLP 109 500.5995 4
DEUTSCHE BANK AG ................. A+ March 6, 2013 106 USD 105 52,610 CLP 108 497.2496 3
DEUTSCHE BANK AG ................. A+ March 7, 2013 133 USD 132 65,940 CLP 136 497.1988 4
DEUTSCHE BANK AG ................. A+ March 8, 2013 131 USD 130 65,540 CLP 135 501.9991 5
DEUTSCHE BANK AG ................. A+ March 13, 2013 125 USD 124 63,760 CLP 131 509.5012 7
DEUTSCHE BANK AG ................. A+ March 18, 2013 255 USD 254 129,080 CLP 266 505.5993 12
DEUTSCHE BANK AG ................. A+ March 29, 2013 123 USD 122 62,190 CLP 128 506.1983 6
DEUTSCHE BANK AG ................. A+ April 3, 2013 130 USD 130 66,070 CLP 136 508.1018 6
DEUTSCHE BANK AG ................. A+ April 5, 2013 102 USD 102 4,241 PHP 103 41.5589 1
DEUTSCHE BANK AG ................. A+ April 10, 2013 168 USD 167 6,963 PHP 169 41.4909 2
DEUTSCHE BANK AG ................. A+ April 25, 2013 50 EUR 67 67 USD 67 1.3273 —
DEUTSCHE BANK AG ................. A+ April 26, 2013 40 USD 40 2,256 INR 40 56.0608 —
DEUTSCHE BANK AG ................. A+ May 14, 2013 2,307 EUR 3,037 21,003 SEK 3,209 9.1030 172
DEUTSCHE BANK AG ................. A+ June 3, 2013 45 USD 45 23,817 CLP 49 527.9527 4
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 33

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ........... A+ June 11, 2013 494 EUR $ 650 2,222 PLN $ 706 $ 4.5015 $ 56
DEUTSCHE BANK AG ........... A+ July 5, 2013 99 EUR 131 434 PLN 138 4.3895 7
DEUTSCHE BANK AG ........... A+ July 15, 2013 93 USD 93 300 MYR 97 3.2307 4
DEUTSCHE BANK AG ........... A+ July 18, 2013 423 USD 422 214,947 CLP 437 508.7503 15
DEUTSCHE BANK AG ........... A+ July 18, 2013 456 USD 455 230,830 CLP 469 506.5005 14
DEUTSCHE BANK AG ........... A+ July 18, 2013 774 USD 773 2,496 MYR 804 3.2243 31
DEUTSCHE BANK AG ........... A+ September 24, 2013 254 USD 254 10,610 PHP 258 41.8019 4
DEUTSCHE BANK AG ........... A+ October 4, 2013 170 USD 170 7,095 PHP 173 41.8000 3
DEUTSCHE BANK AG ........... A+ October 7, 2013 535 EUR 708 2,269 PLN 718 4.2436 10
DEUTSCHE BANK AG ........... A+ October 16, 2013 40 USD 40 1,659 PHP 40 41.6186 —
DEUTSCHE BANK AG ........... A+ October 24, 2013 2,048 EUR 2,713 17,832 SEK 2,729 8.7053 16
HSBC BANK PLC ............... AA- January 10, 2013 83 USD 82 265 MYR 86 3.1937 4
HSBC BANK PLC ............... AA- January 28, 2013 122 USD 122 5,310 PHP 129 43.3540 7
HSBC BANK PLC ............... AA- February 19, 2013 171 USD 170 527 MYR 171 3.0806 1
HSBC BANK PLC ............... AA- April 11, 2013 84 USD 83 3,476 PHP 84 41.5412 1
HSBC BANK PLC ............... AA- April 15, 2013 67 USD 66 2,766 PHP 67 41.4780 1
HSBC BANK PLC ............... AA- August 9, 2013 2,640 USD 2,637 3,016,847 KRW 2,799 1,142.6000 162
HSBC BANK PLC ............... AA- October 4, 2013 136 USD 136 5,691 PHP 138 41.7140 2
HSBC BANK PLC ............... AA- October 7, 2013 204 USD 204 8,485 PHP 206 41.5891 2
HSBC BANK PLC ............... AA- October 11, 2013 118 USD 118 4,894 PHP 119 41.5609 1
HSBC BANK PLC ............... AA- November 20, 2013 40 USD 40 126 MYR 40 3.1212 —
JPMORGAN CHASE BANK, N.A. ... A+ January 15, 2013 20 USD 20 818 PHP 20 41.4786 —
JPMORGAN CHASE BANK, N.A. ... A+ January 22, 2013 135 USD 134 5,905 PHP 143 43.7479 9
JPMORGAN CHASE BANK, N.A. ... A+ January 30, 2013 66 USD 66 33,530 CLP 70 507.2464 4
JPMORGAN CHASE BANK, N.A. ... A+ April 10, 2013 54 USD 54 2,241 PHP 55 41.4962 1
JPMORGAN CHASE BANK, N.A. ... A+ April 12, 2013 93 USD 93 3,868 PHP 94 41.6191 1
JPMORGAN CHASE BANK, N.A. ... A+ April 19, 2013 141 USD 141 438 MYR 142 3.1134 1
JPMORGAN CHASE BANK, N.A. ... A+ April 19, 2013 438 MYR 142 142 USD 142 0.3254 —
JPMORGAN CHASE BANK, N.A. ... A+ April 23, 2013 403 USD 401 1,255 MYR 405 3.1162 4
JPMORGAN CHASE BANK, N.A. ... A+ April 29, 2013 104 USD 104 52,619 CLP 108 506.3999 4
JPMORGAN CHASE BANK, N.A. ... A+ May 9, 2013 4,000 EUR 5,264 5,265 CAD 5,265 1.3162 1
JPMORGAN CHASE BANK, N.A. ... A+ June 28, 2013 1,875 USD 1,871 6,073 MYR 1,957 3.2383 86
JPMORGAN CHASE BANK, N.A. ... A+ June 28, 2013 6,073 MYR 1,957 1,969 USD 1,964 0.3242 7
JPMORGAN CHASE BANK, N.A. ... A+ July 29, 2013 1,558 USD 1,555 5,034 MYR 1,620 3.2311 65
JPMORGAN CHASE BANK, N.A. ... A+ July 29, 2013 5,034 MYR 1,621 1,629 USD 1,627 0.3237 6
JPMORGAN CHASE BANK, N.A. ... A+ October 11, 2013 67 USD 67 2,780 PHP 68 41.5409 1
JPMORGAN CHASE BANK, N.A. ... A+ October 31, 2013 395 MYR 127 127 USD 128 0.3223 1
UBS AG ...................... A December 18, 2013 471 EUR 625 4,183 SEK 640 8.8826 15
Total Number of Contracts .....65 $848
BARCLAYS BANK PLC .......... A+ January 11, 2013 73 EUR 96 94 USD 93 1.2796 (3)
BARCLAYS BANK PLC .......... A+ February 4, 2013 294 EUR 386 363 USD 361 1.2338 (25)
BARCLAYS BANK PLC .......... A+ August 26, 2013 74 EUR 98 93 USD 93 1.2528 (5)
DEUTSCHE BANK AG ........... A+ January 24, 2013 110,600 CLP 229 229 USD 228 0.0021 (1)
DEUTSCHE BANK AG ........... A+ January 25, 2013 156,880 CLP 325 325 USD 323 0.0021 (2)
DEUTSCHE BANK AG ........... A+ January 28, 2013 100 EUR 131 130 USD 129 1.3003 (2)
DEUTSCHE BANK AG ........... A+ January 28, 2013 97,680 CLP 202 202 USD 201 0.0021 (1)
The accompanying notes are an integral part of these financial statements.
34 Franklin Templeton Investments Funds

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ................ A+ January 29, 2013 31,560 CLP $ 65 65 USD $ 65 $ 0.0021 $ —
DEUTSCHE BANK AG ................ A+ January 30, 2013 63,110 CLP 131 131 USD 130 0.0021 (1)
DEUTSCHE BANK AG ................ A+ March 4, 2013 55 USD 55 3,057 INR 55 55.3363 —
DEUTSCHE BANK AG ................ A+ March 7, 2013 41 USD 40 2,252 INR 40 55.3290 —
DEUTSCHE BANK AG ................ A+ March 11, 2013 11 USD 11 610 INR 11 55.3489 —
DEUTSCHE BANK AG ................ A+ March 18, 2013 28 USD 28 1,526 INR 28 55.1879 —
DEUTSCHE BANK AG ................ A+ March 20, 2013 25 USD 25 1,390 INR 25 55.6289 —
DEUTSCHE BANK AG ................ A+ April 12, 2013 41 USD 41 2,247 INR 40 54.3160 (1)
DEUTSCHE BANK AG ................ A+ April 15, 2013 88 USD 88 4,818 INR 86 54.6872 (2)
DEUTSCHE BANK AG ................ A+ April 22, 2013 20 USD 20 1,117 INR 19 54.6477 (1)
DEUTSCHE BANK AG ................ A+ April 30, 2013 659 USD 656 36,806 INR 654 55.8870 (2)
DEUTSCHE BANK AG ................ A+ May 13, 2013 2,000 EUR 2,633 2,630 CAD 2,630 1.3150 (3)
DEUTSCHE BANK AG ................ A+ May 14, 2013 21,003 SEK 3,210 2,425 EUR 3,192 0.1155 (18)
DEUTSCHE BANK AG ................ A+ July 18, 2013 445,777 CLP 905 902 USD 901 0.0020 (4)
DEUTSCHE BANK AG ................ A+ July 23, 2013 96 EUR 126 118 USD 117 1.2336 (9)
DEUTSCHE BANK AG ................ A+ July 31, 2013 294 EUR 388 366 USD 365 1.2432 (23)
DEUTSCHE BANK AG ................ A+ August 27, 2013 433 EUR 573 3,663 SEK 561 8.4535 (12)
DEUTSCHE BANK AG ................ A+ August 27, 2013 3,663 SEK 560 422 EUR 557 0.1151 (3)
DEUTSCHE BANK AG ................ A+ October 23, 2013 125 USD 125 387 MYR 124 3.1005 (1)
DEUTSCHE BANK AG ................ A+ October 31, 2013 5 EUR 7 6 USD 7 1.2943 —
DEUTSCHE BANK AG ................ A+ November 19, 2013 70 USD 70 218 MYR 70 3.1160 —
DEUTSCHE BANK AG ................ A+ December 10, 2013 92 EUR 122 121 USD 121 1.3127 (1)
DEUTSCHE BANK AG ................ A+ December 10, 2013 950 EUR 1,261 1,240 USD 1,243 1.3053 (18)
DEUTSCHE BANK AG ................ A+ December 10, 2013 2,130 USD 2,134 2,594 SGD 2,128 1.2178 (6)
DEUTSCHE BANK AG ................ A+ December 13, 2013 274 USD 274 267 AUD 271 0.9761 (3)
HSBC BANK PLC ................... AA- March 4, 2013 64 USD 64 3,533 INR 64 55.3267 —
HSBC BANK PLC ................... AA- March 11, 2013 11 USD 11 601 INR 11 55.2339 —
HSBC BANK PLC ................... AA- March 13, 2013 28 USD 27 1,520 INR 27 55.0864 —
HSBC BANK PLC ................... AA- August 2, 2013 294 EUR 388 364 USD 363 1.2374 (25)
HSBC BANK PLC ................... AA- October 17, 2013 652 EUR 863 848 USD 848 1.3000 (15)
HSBC BANK PLC ................... AA- October 22, 2013 165 USD 165 507 MYR 163 3.0802 (2)
HSBC BANK PLC ................... AA- October 24, 2013 83 USD 83 257 MYR 82 3.1010 (1)
HSBC BANK PLC ................... AA- December 9, 2013 220 EUR 292 289 USD 290 1.3153 (2)
JPMORGAN CHASE BANK, N.A. ........ A+ February 6, 2013 76 USD 76 3,940 INR 71 51.8285 (5)
JPMORGAN CHASE BANK, N.A. ........ A+ April 16, 2013 59 USD 59 3,236 INR 57 54.5222 (2)
JPMORGAN CHASE BANK, N.A. ........ A+ April 18, 2013 58 USD 58 3,177 INR 57 54.7089 (1)
JPMORGAN CHASE BANK, N.A. ........ A+ April 22, 2013 29 USD 29 1,587 INR 28 54.5773 (1)
JPMORGAN CHASE BANK, N.A. ........ A+ April 29, 2013 34 USD 34 1,919 INR 34 55.7347 —
JPMORGAN CHASE BANK, N.A. ........ A+ April 30, 2013 29 USD 29 1,599 INR 29 55.8466 —
JPMORGAN CHASE BANK, N.A. ........ A+ July 31, 2013 294 EUR 388 365 USD 364 1.2416 (24)
JPMORGAN CHASE BANK, N.A. ........ A+ August 29, 2013 213 EUR 281 268 USD 268 1.2597 (13)
JPMORGAN CHASE BANK, N.A. ........ A+ October 18, 2013 87 USD 87 269 MYR 87 3.1065 —
JPMORGAN CHASE BANK, N.A. ........ A+ October 31, 2013 128 USD 128 395 MYR 127 3.0963 (1)
JPMORGAN CHASE BANK, N.A. ........ A+ December 17, 2013 463 USD 464 1,438 MYR 461 3.1030 (3)
UBS AG ........................... A August 1, 2013 294 EUR 388 362 USD 361 1.2308 (27)
UBS AG ........................... A August 26, 2013 59 EUR 78 500 SEK 76 8.4744 (2)
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 35

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
UBS AG .......................... A August 26, 2013 140 EUR 185 175 USD 175 1.2512 (10)
UBS AG .......................... A November 20, 2013 99 EUR 131 126 USD 127 1.2801 (4)
Total Number of Contracts .........55 $(285)
Net Unrealized Gain ................. $ 563
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................. 1.51 4.20
AA .................................. 2.49 0.87
A ................................... 2.81 4.03
BBB................................. 12.14 9.57
BB .................................. 2.47 6.19
B ................................... 3.06 4.16
CCC ................................. 1.10 1.46
CC .................................. — 0.05
Not Rated ............................ — 0.09
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
The accompanying notes are an integral part of these financial statements.
36 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 74,429 $ 85,577
Canadian 624 17
Foreign
Receivables
8,126 308
Investment securities sold 1 5
Capital units sold 6 52
Dividends, interest and withholding tax 693 830
Unrealized gain on derivatives 848 912
Other assets (Note 8) 27 35
Total assets
Liabilities
Payables
84,754 87,736
Investment securities purchased 35 2
Capital units redeemed 3 31
Management fees 161 170
Foreign capital taxes payable 14 98
Accrued expenses 88 106
Unrealized loss on derivatives 285 1,171
Total liabilities 586 1,578
Net assets $ 84,168 $ 86,158
Total net assets per series (000s)
Series A $7,750 $6,204
Series F 1,277 1,451
Series O 4,086 2,790
Series S 975 1,072
Series T 58,744 61,743
Series T USD 11,336 12,898
Number of units outstanding (Note 3)
Series A 703,355 623,331
Series F 123,267 156,944
Series O 358,441 277,921
Series S 63,000 73,167
Series T 8,088,579 8,879,078
Series T USD 1,551,368 1,847,554
Net assets per unit — CAD
Series A $11.02 $9.95
Series F 10.36 9.25
Series O 11.40 10.04
Series S 15.48 14.65
Series T 7.26 6.96
Net assets per unit — USD
Series A $11.09 $9.76
Series F 10.43 9.08
Series O 11.48 9.85
Series S 15.59 14.37
Series T USD (Note 13 (b)) 7.36 6.85
Cost of investments held (000s) $78,857 $98,250
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $205; 2011 — $265)
Interest (net of foreign taxes withheld (000s) —
$ 1,863 $ 2,270
2012 — $23; 2011 — $47) 1,894 2,098
Total investment income
Expenses
3,757 4,368
Management fees (Note 4(a)) 1,771 1,992
Transfer agent fees (Note 4(c)) 348 395
Custodian fees 29 36
Legal fees 6 2
Audit fees 21 23
Unitholder reporting costs 4 14
Independent review committee fees 2 1
Registration fees 22 20
Other expenses (Note 7) 104 105
Total expenses 2,307 2,588
Expenses waived/paid by Manager (Note 6) (323) (357)
Net expenses 1,984 2,231
Net investment income (loss) 1,773 2,137
Realized and unrealized gain (loss) on investments
and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange gain
(1,831) (395)
(loss)
Net change in unrealized appreciation (depreciation)
1,138 1,753
in value of investments and derivatives 9,067 (6,790)
Transaction costs (Note 11) (56) (67)
Net gain (loss) on investments 8,318 (5,499)
Increase (decrease) in net assets from operations $ 10,091 $ (3,362)
Increase (decrease) in net assets from operations
per series (000s)
Series A $820 $(236)
Series F 172 (6)
Series O 474 (47)
Series S 129 (68)
Series T 7,097 (2,484)
Series T USD 1,399 (521)
Increase (decrease) in net assets from operations
per unit
Series A $1.26 $(0.42)
Series F 1.22 (0.02)
Series O 1.56 (0.21)
Series S 1.90 (1.70)
Series T 0.85 (0.29)
Series T USD 0.84 (0.27)
Franklin Templeton Investments Funds 37

Templeton Global Balanced Fund
(formerly Templeton Global Income Fund)
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 10,091 $ (3,362) $ 820 $ (236) $ 172 $ (6)
Distributions to unitholders
From net investment income (1,422) (2,254) (131) (162) (22) (38)
From capital gains — — — — — —
From return of capital (4,186) (5,180) — — — —
(5,608) (7,434) (131) (162) (22) (38)
Capital unit transactions
Subscriptions 7,241 14,341 1,894 2,669 88 579
Reinvestments 4,484 6,143 115 139 15 25
Redemptions (18,198) (21,176) (1,152) (1,337) (427) (1,195)
(6,473) (692) 857 1,471 (324) (591)
Increase (decrease) in net assets for the period (1,990) (11,488) 1,546 1,073 (174) (635)
Net assets — beginning of period 86,158 97,646 6,204 5,131 1,451 2,086
Net assets — end of period $ 84,168 $ 86,158 $ 7,750 $ 6,204 $ 1,277 $ 1,451
Series O Series S Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 474 $ (47) $ 129 $ (68) $ 7,097 $ (2,484)
Distributions to unitholders
From net investment income (68) (75) (17) (28) (991) (1,614)
From capital gains — — — — — —
From return of capital — — (59) (41) (3,463) (4,257)
Capital unit transactions
(68) (75) (76) (69) (4,454) (5,871)
Subscriptions 1,081 1,492 13 1,157 3,679 6,956
Reinvestments 68 75 17 56 3,636 4,898
Redemptions (259) (424) (180) (10) (12,957) (14,436)
890 1,143 (150) 1,203 (5,642) (2,582)
Increase (decrease) in net assets for the period 1,296 1,021 (97) 1,066 (2,999) (10,937)
Net assets — beginning of period 2,790 1,769 1,072 6 61,743 72,680
Net assets — end of period $ 4,086 $ 2,790 $ 975 $ 1,072 $ 58,744 $ 61,743
Series T USD
2012 2011
Increase (decrease) in net assets from operations $ 1,399 $ (521)
Distributions to unitholders
From net investment income (193) (337)
From capital gains — —
From return of capital (664) (882)
Capital unit transactions
(857) (1,219)
Subscriptions 486 1,488
Reinvestments 633 950
Redemptions (3,223) (3,774)
(2,104) (1,336)
Increase (decrease) in net assets for the period (1,562) (3,076)
Net assets — beginning of period 12,898 15,974
Net assets — end of period $ 11,336 $ 12,898
The accompanying notes are an integral part of these financial statements.
38 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Global Bond Fund
Principal Amount
in Currency
of Issue
(000s) (000s)
LONG-TERM INVESTMENTS: 74.07%
BONDS: 74.07%
Poland: 9.60%
Government of Poland
5.25%, 4/25/2013 ............................................................. 19,785,000 PLN $ 6,336 $ 6,394
5.00%, 10/24/2013 ............................................................ 65,065,000 PLN 20,791 21,214
5.75%, 4/25/2014 ............................................................. 119,915,000 PLN 39,414 39,792
5.50%, 4/25/2015 ............................................................. 19,315,000 PLN 6,219 6,527
6.25%, 10/24/2015 ............................................................ 24,840,000 PLN 8,240 8,642
5.75%, 9/23/2022 ............................................................. 24,900,000 PLN 10,061 9,374
Floating Rate Note, 1/25/2017 ................................................... 52,781,000 PLN 16,348 17,043
Floating Rate Note, 1/25/2021 ................................................... 53,543,000 PLN 16,344 17,124
Senior Note, 6.375%, 7/15/2019 ................................................. 2,500,000 USD 2,890 3,098
Strip, 7/25/2013 .............................................................. 53,295,000 PLN 17,951 16,829
Strip, 1/25/2014 .............................................................. 73,965,000 PLN 21,745 23,004
Strip, 7/25/2014 .............................................................. 18,160,000 PLN 5,244 5,555
Average
Cost
Fair
Value
171,583 174,596
Mexico (1) : 8.96%
Government of Mexico
9.00%, 6/20/2013 ............................................................. 2,248,980 MXN 19,187 17,760
8.00%, 12/19/2013 ............................................................ 6,542,400 MXN 56,080 52,213
7.00%, 6/19/2014 ............................................................. 728,210 MXN 6,102 5,811
9.50%, 12/18/2014 ............................................................ 8,440,200 MXN 71,189 71,077
8.00%, 12/17/2015 ............................................................ 240,000 MXN 2,604 2,013
7.25%, 12/15/2016 ............................................................ 105,000 MXN 959 877
7.75%, 12/14/2017 ............................................................ 358,000 MXN 3,327 3,081
Mexican Udibonos
Index Linked, 4.50%, 12/18/2014 ................................................ 125,400 MXN 1,009 1,035
Index Linked, 5.00%, 6/16/2016 ................................................. 321,530 MXN 2,755 2,806
Index Linked, 3.50%, 12/14/2017 ................................................ 324,016 MXN 2,642 2,780
Index Linked, 4.00%, 6/13/2019 ................................................. 221,893 MXN 1,845 2,010
Index Linked, 2.50%, 12/10/2020 ................................................ 175,145 MXN 1,316 1,472
169,015 162,935
South Korea: 8.82%
KDICB Redemption Fund Bond, Senior Bond, 08–1, 5.28%, 2/15/2013 .................... 2,462,000,000 KRW 2,615 2,306
Korea Monetary Stabilization Bond
Senior Bond, 3.38%, 5/9/2013 ................................................... 5,560,950,000 KRW 4,836 5,203
Senior Bond, 3.76%, 6/2/2013 ................................................... 924,600,000 KRW 808 867
Senior Bond, 3.90%, 8/2/2013 ................................................... 6,760,640,000 KRW 6,018 6,354
Senior Bond, 3.59%, 10/2/2013 .................................................. 1,549,920,000 KRW 1,352 1,456
Senior Bond, 3.48%, 12/2/2013 .................................................. 2,657,040,000 KRW 2,332 2,496
Senior Bond, 3.47%, 2/2/2014 ................................................... 3,653,460,000 KRW 3,232 3,436
Senior Bond, 3.59%, 4/2/2014 ................................................... 5,369,470,000 KRW 4,761 5,063
Senior Note, 3.83%, 4/2/2013 ................................................... 685,000,000 KRW 599 641
Senior Note, 3.28%, 6/9/2013 ................................................... 5,507,650,000 KRW 4,864 5,154
Senior Note, 3.28%, 6/2/2014 ................................................... 6,365,830,000 KRW 5,620 5,983
Senior Note, 2.82%, 8/2/2014 ................................................... 2,789,710,000 KRW 2,419 2,605
Senior Note, 2.78%, 10/2/2014 .................................................. 614,400,000 KRW 562 573
Senior Note, 2.84%, 12/2/2014 .................................................. 215,180,000 KRW 197 201
(1) Principal amount in 100 Mexican Peso units.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 39

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
South Korea: 8.82% (Continued)
Korea Treasury Bond
Senior Bond, 3.75%, 6/10/2013 .................................................. 23,608,000,000 KRW $ 21,362 $ 22,137
Senior Bond, 3.00%, 12/10/2013 ................................................. 74,305,420,000 KRW 66,113 69,520
Senior Bond, 3.50%, 6/10/2014 .................................................. 3,850,000,000 KRW 3,406 3,630
Senior Bond, 5.00%, 9/10/2016 .................................................. 75,000,000 KRW 76 75
Senior Note, 5.25%, 3/10/2013 .................................................. 405,980,000 KRW 368 381
Senior Note, 3.25%, 12/10/2014 ................................................. 13,800,600,000 KRW 12,801 12,990
The Export–Import Bank of Korea, Senior Note, 1.45%, 5/19/2014 ........................ 61,100,000 SEK 9,215 9,350
Average
Cost
Fair
Value
153,556 160,421
Ireland: 8.71%
Government of Ireland
4.60%, 4/18/2016 ............................................................. 3,955,000 EUR 4,676 5,505
5.50%, 10/18/2017 ............................................................ 13,105,000 EUR 15,972 18,796
5.90%, 10/18/2019 ............................................................ 32,630,000 EUR 38,516 46,720
4.50%, 4/18/2020 ............................................................. 9,591,000 EUR 10,589 12,605
5.00%, 10/18/2020 ............................................................ 28,656,000 EUR 32,760 38,928
Senior Bond, 4.50%, 10/18/2018 ................................................. 4,638,000 EUR 5,249 6,293
Senior Bond, 4.40%, 6/18/2019 .................................................. 11,467,000 EUR 12,623 15,049
Senior Bond, 5.40%, 3/13/2025 .................................................. 10,933,000 EUR 11,849 14,529
132,234 158,425
Sweden: 7.35%
Government of Sweden
1.50%, 8/30/2013 ............................................................. 188,865,000 SEK 29,003 28,998
6.75%, 5/5/2014 .............................................................. 464,070,000 SEK 75,794 76,533
Kommuninvest I Sverige AB, 2.25%, 5/5/2014 ........................................ 180,990,000 SEK 26,987 28,045
131,784 133,576
Australia: 4.39%
Government of Australia, Senior Bond, 6.50%, 5/15/2013 ............................... 5,420,000 AUD 5,721 5,672
New South Wales Treasury Corp.
5.25%, 5/1/2013 .............................................................. 770,000 AUD 803 801
5.50%, 8/1/2013 .............................................................. 27,710,000 AUD 28,574 29,033
Senior Note, 5.50%, 3/1/2017 ................................................... 3,645,000 AUD 2,909 4,096
Queensland Treasury Corp.
Senior Bond, 6.00%, 9/14/2017 .................................................. 1,490,000 AUD 1,268 1,716
Senior Note, 6.00%, 8/14/2013 .................................................. 12,405,000 AUD 12,200 13,053
Senior Note, 6.00%, 8/21/2013 .................................................. 22,321,000 AUD 23,437 23,490
Western Australia Treasury Corp., 8.00%, 6/15/2013 ................................... 1,911,000 AUD 2,018 2,017
76,930 79,878
Singapore: 4.25%
Government of Singapore
Senior Bond, 1.625%, 4/1/2013 .................................................. 71,280,000 SGD 57,613 58,153
Senior Bond, 0.25%, 2/1/2014 ................................................... 23,585,000 SGD 18,732 19,176
76,345 77,329
The accompanying notes are an integral part of these financial statements.
40 Franklin Templeton Investments Funds

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Indonesia: 3.99%
Government of Indonesia
FR28, 10.00%, 7/15/2017 ....................................................... 9,200,000,000 IDR $ 1,150 $ 1,147
FR30, 10.75%, 5/15/2016 ....................................................... 10,335,000,000 IDR 1,242 1,264
FR31, 11.00%, 11/15/2020 ..................................................... 2,763,000,000 IDR 315 392
FR34, 12.80%, 6/15/2021 ....................................................... 12,005,000,000 IDR 1,261 1,876
FR35, 12.90%, 6/15/2022 ....................................................... 7,690,000,000 IDR 800 1,229
FR36, 11.50%, 9/15/2019 ....................................................... 33,075,000,000 IDR 4,101 4,644
FR40, 11.00%, 9/15/2025 ....................................................... 33,050,000,000 IDR 3,353 4,986
FR42, 10.25%, 7/15/2027 ....................................................... 5,900,000,000 IDR 629 853
FR43, 10.25%, 7/15/2022 ....................................................... 1,790,000,000 IDR 147 251
FR45, 9.75%, 5/15/2037 ........................................................ 425,000,000 IDR 51 62
FR46, 9.50%, 7/15/2023 ........................................................ 150,920,000,000 IDR 15,733 20,459
FR47, 10.00%, 2/15/2028 ....................................................... 243,580,000,000 IDR 25,348 35,026
FR48, 9.00%, 9/15/2018 ........................................................ 3,280,000,000 IDR 274 405
Average
Cost
Fair
Value
54,404 72,594
Ukraine: 3.09%
Financing of Infrastructure Projects State Enterprise
8.375%, 11/3/2017 ............................................................ 680,000 USD 580 659
7.40%, 4/20/2018 ............................................................. 520,000 USD 487 475
Government of Ukraine
7.65%, 6/11/2013 ............................................................. 470,000 USD 470 470
9.25%, 7/24/2017 ............................................................. 7,120,000 USD 7,625 7,655
7.75%, 9/23/2020 ............................................................. 14,448,000 USD 13,050 14,710
Senior Bond, 4.95%, 10/13/2015 ................................................. 170,000 EUR 217 215
Senior Bond, 6.58%, 11/21/2016 ................................................. 7,864,000 USD 6,952 7,789
Senior Note, 6.25%, 6/17/2016 ................................................... 5,190,000 USD 4,690 5,097
Senior Note, 7.95%, 2/23/2021 ................................................... 15,950,000 USD 15,513 16,372
Senior Note, 7.80%, 11/28/2022 .................................................. 2,770,000 USD 2,759 2,769
52,343 56,211
Brazil (2) : 2.87%
Nota Do Tesouro Nacional
10.00%, 1/1/2017 ............................................................. 27,790 BRL 14,179 14,194
Index Linked, 6.00%, 5/15/2015 .................................................. 11,724 BRL 14,967 13,814
Index Linked, 6.00%, 8/15/2016 .................................................. 6,799 BRL 8,491 8,226
Index Linked, 6.00%, 5/15/2017 .................................................. 124BRL 147 152
Index Linked, 6.00%, 8/15/2018 .................................................. 5,095 BRL 6,503 6,380
Index Linked, 6.00%, 5/15/2045 .................................................. 6,380 BRL 7,952 9,419
52,239 52,185
Hungary: 2.46%
Government of Hungary
6.75%, 7/28/2014 ............................................................. 3,000,000 EUR 4,717 4,119
6.00%, 1/11/2019 ............................................................. 730,000 EUR 973 996
Senior Note, 3.50%, 7/18/2016 ................................................... 25,000 EUR 32 32
Senior Note, 4.375%, 7/4/2017 ................................................... 12,925,000 EUR 14,327 16,623
Senior Note, 5.75%, 6/11/2018 ................................................... 4,855,000 EUR 6,767 6,570
Senior Note, 6.25%, 1/29/2020 ................................................... 4,705,000 USD 5,008 5,158
(2) Principal amount in 1000 Brazilian Real units.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 41

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Hungary: 2.46% (Continued)
Senior Note, 3.875%, 2/24/2020 ................................................. 170,000 EUR $ 209 $ 205
Senior Note, 6.375%, 3/29/2021 ................................................. 10,020,000 USD 9,676 11,047
Average
Cost
Fair
Value
41,709 44,750
Israel: 2.07%
Government of Israel
5.00%, 3/31/2013 ............................................................. 63,394,000 ILS 18,430 17,004
3.50%, 9/30/2013 ............................................................. 76,661,000 ILS 21,002 20,662
39,432 37,666
Russia: 1.64%
Government of Russia, Senior Bond, 7.50%, 3/31/2030 ................................. 23,484,825 USD 26,286 29,834
Lithuania: 1.16%
Government of Lithuania
6.75%, 1/15/2015 ............................................................. 2,830,000 USD 2,986 3,088
7.375%, 2/11/2020 ............................................................ 10,090,000 USD 10,649 13,057
6.125%, 3/9/2021 ............................................................. 1,550,000 USD 1,480 1,896
Senior Note, 9.375%, 6/22/2014 ................................................. 2,100,000 EUR 3,273 3,097
18,388 21,138
Malaysia: 0.83%
Government of Malaysia
3.434%, 8/15/2014 ............................................................ 5,970,000 MYR 1,923 1,951
Senior Bond, 3.702%, 2/25/2013 ................................................. 5,562,000 MYR 1,825 1,808
Senior Bond, 3.70%, 5/15/2013 .................................................. 2,560,000 MYR 851 833
Senior Bond, 3.21%, 5/31/2013 .................................................. 5,070,000 MYR 1,653 1,648
Senior Bond, 3.461%, 7/31/2013 ................................................. 6,745,000 MYR 2,205 2,196
Senior Bond, 8.00%, 10/30/2013 ................................................. 140,000 MYR 48 47
Senior Bond, 5.094%, 4/30/2014 ................................................. 19,585,000 MYR 6,518 6,530
15,023 15,013
Romania: 0.66%
Government of Romania, Senior Note, 5.25%, 6/17/2016 ................................ 8,510,000 EUR 12,009 11,970
Sri Lanka: 0.57%
Government of Sri Lanka
A, 8.50%, 1/15/2013 ........................................................... 170,200,000 LKR 1,453 1,323
A, 13.50%, 2/1/2013 ........................................................... 165,300,000 LKR 1,625 1,288
A, 7.50%, 8/1/2013 ............................................................ 101,770,000 LKR 827 775
A, 7.00%, 3/1/2014 ............................................................ 16,130,000 LKR 135 119
A, 11.25%, 7/15/2014 .......................................................... 369,500,000 LKR 3,345 2,852
A, 11.75%, 3/15/2015 .......................................................... 2,410,000 LKR 24 19
A, 6.50%, 7/15/2015 ........................................................... 64,510,000 LKR 529 443
A, 11.00%, 8/1/2015 ........................................................... 331,100,000 LKR 2,941 2,520
A, 6.40%, 8/1/2016 ............................................................ 35,100,000 LKR 284 229
A, 5.80%, 1/15/2017 ........................................................... 41,600,000 LKR 233 261
B, 8.50%, 7/15/2013 ........................................................... 1,550,000 LKR 12 12
B, 11.75%, 4/1/2014 ........................................................... 25,580,000 LKR 189 199
B, 6.60%, 6/1/2014 ............................................................ 13,900,000 LKR 118 101
B, 6.40%, 10/1/2016 ........................................................... 29,300,000 LKR 235 190
11,950 10,331
The accompanying notes are an integral part of these financial statements.
42 Franklin Templeton Investments Funds

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Serbia: 0.50%
Government of Serbia
Senior Note, 5.25%, 11/21/2017 ................................................. 2,660,000 USD $ 2,644 $ 2,741
7.25%, 9/28/2021 ............................................................. 5,520,000 USD 5,659 6,291
Average
Cost
Fair
Value
8,303 9,032
Peru: 0.41%
Government of Peru, Senior Bond, 7.84%, 8/12/2020 .................................. 15,042,000 PEN 5,753 7,358
Vietnam: 0.36%
Government of Vietnam, 6.75%, 1/29/2020 ........................................... 5,775,000 USD 6,039 6,525
Philippines: 0.33%
Government of the Philippines
Senior Bond, 5.25%, 1/7/2013 ................................................... 39,670,000 PHP 910 960
Senior Bond, 8.75%, 3/3/2013 ................................................... 106,590,000 PHP 2,622 2,607
Senior Bond, 7.00%, 1/27/2016 .................................................. 44,930,000 PHP 1,165 1,189
Senior Bond, 9.125%, 9/4/2016 .................................................. 27,810,000 PHP 765 784
Senior Note, 6.25%, 1/27/2014 .................................................. 18,950,000 PHP 471 478
5,933 6,018
Venezuela: 0.30%
Government of Venezuela, 10.75%, 9/19/2013 ........................................ 5,325,000 USD 5,088 5,408
Iceland: 0.28%
Government of Iceland, 5.875%, 5/11/2022 .......................................... 4,570,000 USD 4,477 5,090
Slovenia: 0.27%
Government of Slovenia, Senior Note, 5.50%, 10/26/2022 ............................... 4,650,000 USD 4,538 4,847
Supranational: 0.13%
Inter–American Development Bank, Senior Note, 7.50%, 12/5/2024 ....................... 28,000,000 MXN 2,667 2,430
United States: 0.07%
New York City IDA Rental Revenue, Yankee Stadium Project, 11.00%, 3/1/2029 ............. 400,000 USD 446 547
Tulare Sewer Revenue, Build America Bonds, Series B, AGMC Insured, 8.75%, 11/15/2044 .... 550,000 USD 600 666
1,046 1,213
Total Bonds: .................................................................... 1,279,074 1,346,773
Total Long-Term Investments: ...................................................... 1,279,074 1,346,773
SHORT-TERM SECURITIES: 23.17%
Bank of Montreal, Term Deposit, 0.90%, 1/2/2013 ..................................... 70,000,000 CAD 70,000 70,000
Bank of Negara Monetary Note
2.882%, 1/10/2013 ............................................................ 5,335,000 MYR 1,743 1,732
2.90%, 1/15/2013 ............................................................. 8,160,000 MYR 2,654 2,648
2.897%, 1/17/2013 ............................................................ 9,190,000 MYR 3,000 2,982
2.867%, 2/19/2013 ............................................................ 31,685,000 MYR 10,431 10,251
2.874%, 2/26/2013 ............................................................ 83,560,000 MYR 27,357 27,017
2.88%, 3/7/2013 .............................................................. 280,000 MYR 88 90
3.003%, 3/12/2013 ............................................................ 9,440,000 MYR 2,987 3,049
2.877%, 3/14/2013 ............................................................ 6,190,000 MYR 1,952 1,999
2.90%, 5/2/2013 .............................................................. 190,000 MYR 61 61
2.985%, 5/14/2013 ............................................................ 1,100,000 MYR 350 353
2.901%, 5/23/2013 ............................................................ 9,850,000 MYR 3,154 3,162
3.03%, 5/28/2013 ............................................................. 4,260,000 MYR 1,376 1,367
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 43

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
2.96%, 6/4/2013 .............................................................. 320,000 MYR $ 102 $ 103
2.87%, 6/11/2013 ............................................................. 5,750,000 MYR 1,837 1,843
2.937%, 6/18/2013 ............................................................ 8,810,000 MYR 2,819 2,822
2.90%, 6/20/2013 ............................................................. 7,640,000 MYR 2,443 2,447
2.96%, 6/27/2013 ............................................................. 160,000 MYR 51 51
2.96%, 7/4/2013 .............................................................. 130,000 MYR 42 42
2.87%, 7/11/2013 ............................................................. 7,755,000 MYR 2,422 2,479
2.96%, 7/18/2013 ............................................................. 120,000 MYR 38 38
2.87%, 7/25/2013 ............................................................. 8,535,000 MYR 2,671 2,726
2.87%, 8/6/2013 .............................................................. 22,880,000 MYR 7,130 7,334
2.83%, 8/15/2013 ............................................................. 28,080,000 MYR 8,745 8,952
2.831%, 8/27/2013 ............................................................ 12,320,000 MYR 3,833 3,926
2.90%, 9/5/2013 .............................................................. 10,470,000 MYR 3,278 3,332
2.90%, 9/17/2013 ............................................................. 24,390,000 MYR 7,628 7,755
2.90%, 9/26/2013 ............................................................. 3,160,000 MYR 994 1,004
2.90%, 10/10/2013 ............................................................ 5,495,000 MYR 1,749 1,744
2.90%, 10/22/2013 ............................................................ 590,000 MYR 187 187
2.90%, 10/31/2013 ............................................................ 200,000 MYR 64 63
2.91%, 11/19/2013 ............................................................ 1,070,000 MYR 339 338
2.91%, 12/12/2013 ............................................................ 750,000 MYR 236 237
Canadian Imperial Bank of Commerce, Term Deposit, 0.85%, 1/2/2013 .................... 70,000,000 CAD 70,000 70,000
Malaysia Treasury Bill
2.85%, 1/25/2013 ............................................................. 380,000 MYR 123 123
2.87%, 3/22/2013 ............................................................. 420,000 MYR 135 136
2.90%, 5/3/2013 .............................................................. 10,000 MYR 3 3
2.87%, 5/31/2013 ............................................................. 180,000 MYR 58 58
Mexican Cetes Treasury Bill, 4.58%, 9/19/2013 (3) ...................................... 2,707,000 MXN 2,027 2,025
Philippine Treasury Bill
1.318%, 2/20/2013 ............................................................ 18,760,000 PHP 442 454
2.152%, 3/6/2013 ............................................................. 54,770,000 PHP 1,269 1,324
0.839%, 4/3/2013 ............................................................. 790,000 PHP 19 19
1.59%, 7/24/2013 ............................................................. 3,750,000 PHP 88 90
1.693%, 8/22/2013 ............................................................ 36,300,000 PHP 843 875
1.732%, 9/4/2013 ............................................................. 33,770,000 PHP 788 814
1.077%, 10/2/2013 ............................................................ 1,460,000 PHP 34 35
0.543%, 11/13/2013 ........................................................... 54,030,000 PHP 1,309 1,300
0.385%, 12/11/2013 ........................................................... 9,960,000 PHP 239 239
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 ................................. 109,400,000 CAD 109,400 109,400
Singapore Treasury Bill
0.201%, 1/10/2013 ............................................................ 4,240,000 SGD 3,370 3,448
0.231%, 1/10/2013 ............................................................ 7,926,000 SGD 6,357 6,445
0.152%, 1/24/2013 ............................................................ 1,350,000 SGD 1,098 1,098
0.191%, 1/24/2013 ............................................................ 5,853,000 SGD 4,726 4,759
0.189%, 2/7/2013 ............................................................. 5,660,000 SGD 4,602 4,602
0.271%, 4/18/2013 ............................................................ 7,930,000 SGD 6,347 6,444
0.241%, 5/2/2013 ............................................................. 4,320,000 SGD 3,416 3,510
0.291%, 11/1/2013 ............................................................ 4,070,000 SGD 3,323 3,303
(3) Principle amount in 10 Mexican Peso units.
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
44 Franklin Templeton Investments Funds

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Sri Lanka Treasury Bill
13.08%, 8/2/2013 ............................................................. 4,060,000 LKR $ 29 $ 30
12.25%, 10/11/2013 ...........................................................
Sweden Treasury Bill
2,760,000 LKR 19 20
0.825%, 3/20/2013 ............................................................ 131,850,000 SEK 19,529 20,104
0.86%, 6/19/2013 ............................................................. 55,750,000 SEK 8,367 8,483
Total Short-Term Securities: ........................................................ 419,721 421,275
TOTAL INVESTMENTS: 97.24% ..................................................... $1,698,795 1,768,048
NET UNREALIZED LOSS ON DERIVATIVES: (0.27%) ................................... (4,944)
OTHER ASSETS, less liabilities: 3.03% ............................................... 55,195
TOTAL NET ASSETS: 100.00% ..................................................... $1,818,299
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Average
Cost
Contract
Price
Fair
Value
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
BARCLAYS BANK PLC ............ A+ February 11, 2013 514 EUR $ 675 2,224 PLN $ 712 $ 4.3250 $ 37
BARCLAYS BANK PLC ............ A+ February 11, 2013 1,970 EUR 2,585 2,614 USD 2,599 1.3270 14
BARCLAYS BANK PLC ............ A+ February 11, 2013 2,320 EUR 3,045 3,079 USD 3,061 1.3270 16
BARCLAYS BANK PLC ............ A+ February 13, 2013 657 USD 653 815 SGD 663 1.2407 10
BARCLAYS BANK PLC ............ A+ February 13, 2013 699 USD 696 346,700 CLP 716 495.7000 20
BARCLAYS BANK PLC ............ A+ February 19, 2013 1,873 USD 1,862 2,331 SGD 1,897 1.2447 35
BARCLAYS BANK PLC ............ A+ March 1, 2013 609 USD 605 304,200 CLP 627 499.8998 22
BARCLAYS BANK PLC ............ A+ March 1, 2013 1,223 USD 1,216 607,500 CLP 1,252 496.8500 36
BARCLAYS BANK PLC ............ A+ March 7, 2013 2,007 EUR 2,636 2,663 USD 2,648 1.3265 12
BARCLAYS BANK PLC ............ A+ April 30, 2013 11,349 EUR 14,931 85,400 NOK 15,230 7.5251 299
BARCLAYS BANK PLC ............ A+ May 7, 2013 1,636 EUR 2,153 2,163 USD 2,154 1.3219 1
BARCLAYS BANK PLC ............ A+ October 29, 2013 127 USD 127 64,140 CLP 129 503.5999 2
CREDIT SUISSE INTERNATIONAL .. A+ March 26, 2013 4,929 USD 4,905 6,202 SGD 5,052 1.2582 147
DEUTSCHE BANK AG ............ A+ January 7, 2013 816 USD 811 33,971 PHP 822 41.6100 11
DEUTSCHE BANK AG ............ A+ January 9, 2013 3,655 USD 3,631 1,926,470 CLP 3,993 527.1000 362
DEUTSCHE BANK AG ............ A+ January 10, 2013 5,135 USD 5,102 2,706,900 CLP 5,610 527.1000 508
DEUTSCHE BANK AG ............ A+ January 22, 2013 274 USD 272 11,990 PHP 290 43.7980 18
DEUTSCHE BANK AG ............ A+ January 24, 2013 760 USD 755 387,160 CLP 801 509.5498 46
DEUTSCHE BANK AG ............ A+ January 25, 2013 390 USD 387 198,560 CLP 411 509.7006 24
DEUTSCHE BANK AG ............ A+ January 25, 2013 693 USD 689 350,600 CLP 726 506.0397 37
DEUTSCHE BANK AG ............ A+ January 28, 2013 676 USD 672 341,940 CLP 707 506.0403 35
DEUTSCHE BANK AG ............ A+ January 29, 2013 218 USD 217 110,470 CLP 228 506.0189 11
DEUTSCHE BANK AG ............ A+ January 30, 2013 433 USD 430 220,930 CLP 457 510.7500 27
DEUTSCHE BANK AG ............ A+ January 31, 2013 403 USD 401 206,170 CLP 427 511.5005 26
DEUTSCHE BANK AG ............ A+ January 31, 2013 2,006 USD 1,994 86,570 PHP 2,097 43.1500 103
DEUTSCHE BANK AG ............ A+ February 4, 2013 6,286 USD 6,248 270,500 PHP 6,551 43.0340 303
DEUTSCHE BANK AG ............ A+ February 6, 2013 3,849 USD 3,826 1,945,790 CLP 4,019 505.5200 193
DEUTSCHE BANK AG ............ A+ February 7, 2013 2,507 USD 2,492 3,112 SGD 2,533 1.2415 41
DEUTSCHE BANK AG ............ A+ February 8, 2013 4,988 USD 4,959 6,199 SGD 5,045 1.2427 86
DEUTSCHE BANK AG ............ A+ February 11, 2013 515 EUR 676 2,224 PLN 712 4.3195 36
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 45

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG .......... A+ February 11, 2013 579 EUR $ 760 767 USD $ 762 $ 1.3244 $ 2
DEUTSCHE BANK AG .......... A+ February 11, 2013 700 USD 696 347,400 CLP 718 496.4999 22
DEUTSCHE BANK AG .......... A+ February 11, 2013 10,029 EUR 13,162 13,253 USD 13,176 1.3215 14
DEUTSCHE BANK AG .......... A+ February 14, 2013 511 EUR 671 2,224 PLN 712 4.3532 41
DEUTSCHE BANK AG .......... A+ February 15, 2013 370 USD 368 183,890 CLP 380 497.5204 12
DEUTSCHE BANK AG .......... A+ February 15, 2013 689 USD 686 343,000 CLP 708 497.5197 22
DEUTSCHE BANK AG .......... A+ February 19, 2013 2,787 USD 2,771 3,498 SGD 2,847 1.2550 76
DEUTSCHE BANK AG .......... A+ February 25, 2013 746 USD 742 374,150 CLP 771 501.4999 29
DEUTSCHE BANK AG .......... A+ February 25, 2013 1,848 USD 1,838 2,311 SGD 1,881 1.2503 43
DEUTSCHE BANK AG .......... A+ February 26, 2013 539 USD 536 30,278 INR 543 56.1700 7
DEUTSCHE BANK AG .......... A+ February 26, 2013 657 USD 653 331,830 CLP 684 505.0401 31
DEUTSCHE BANK AG .......... A+ February 28, 2013 926 USD 921 465,910 CLP 960 503.1002 39
DEUTSCHE BANK AG .......... A+ February 28, 2013 1,152 USD 1,146 1,445 SGD 1,176 1.2539 30
DEUTSCHE BANK AG .......... A+ March 1, 2013 477 USD 474 239,150 CLP 493 501.5498 19
DEUTSCHE BANK AG .......... A+ March 4, 2013 479 USD 476 239,720 CLP 494 500.6004 18
DEUTSCHE BANK AG .......... A+ March 6, 2013 384 USD 382 21,411 INR 383 55.7173 1
DEUTSCHE BANK AG .......... A+ March 6, 2013 482 USD 480 239,720 CLP 494 497.2495 14
DEUTSCHE BANK AG .......... A+ March 7, 2013 464 USD 462 230,810 CLP 476 497.1996 14
DEUTSCHE BANK AG .......... A+ March 8, 2013 457 USD 455 229,420 CLP 473 501.9999 18
DEUTSCHE BANK AG .......... A+ March 13, 2013 438 USD 436 223,210 CLP 460 509.5002 24
DEUTSCHE BANK AG .......... A+ March 18, 2013 894 USD 889 451,860 CLP 929 505.6003 40
DEUTSCHE BANK AG .......... A+ March 19, 2013 3,560 USD 3,542 4,508 SGD 3,672 1.2663 130
DEUTSCHE BANK AG .......... A+ March 21, 2013 3,870 USD 3,851 4,854 SGD 3,954 1.2542 103
DEUTSCHE BANK AG .......... A+ March 29, 2013 430 USD 428 217,700 CLP 447 506.2002 19
DEUTSCHE BANK AG .......... A+ April 3, 2013 455 USD 453 231,280 CLP 475 508.1000 22
DEUTSCHE BANK AG .......... A+ April 4, 2013 584 EUR 768 780 USD 777 1.3357 9
DEUTSCHE BANK AG .......... A+ April 5, 2013 817 USD 813 33,957 PHP 823 41.5590 10
DEUTSCHE BANK AG .......... A+ April 10, 2013 1,344 USD 1,338 55,763 PHP 1,352 41.4910 14
DEUTSCHE BANK AG .......... A+ April 26, 2013 432 USD 431 24,244 INR 431 56.0609 —
DEUTSCHE BANK AG .......... A+ May 6, 2013 22,382 EUR 29,454 202,000 SEK 30,866 9.0250 1,412
DEUTSCHE BANK AG .......... A+ June 3, 2013 130 USD 130 68,474 CLP 140 527.9495 10
DEUTSCHE BANK AG .......... A+ June 18, 2013 10,649 USD 10,618 34,400 MYR 11,088 3.2304 470
DEUTSCHE BANK AG .......... A+ June 21, 2013 9,254 USD 9,228 29,637 MYR 9,552 3.2026 324
DEUTSCHE BANK AG .......... A+ June 27, 2013 6,387 USD 6,370 7,517,000 KRW 6,982 1,176.9501 612
DEUTSCHE BANK AG .......... A+ July 5, 2013 2,079 EUR 2,742 15,896 NOK 2,833 7.6451 91
DEUTSCHE BANK AG .......... A+ July 5, 2013 4,906 USD 4,894 6,198 SGD 5,062 1.2634 168
DEUTSCHE BANK AG .......... A+ July 12, 2013 688 USD 686 2,224 MYR 716 3.2330 30
DEUTSCHE BANK AG .......... A+ July 15, 2013 777 USD 775 2,510 MYR 808 3.2307 33
DEUTSCHE BANK AG .......... A+ July 18, 2013 16 USD 16 53 MYR 17 3.2242 1
DEUTSCHE BANK AG .......... A+ July 18, 2013 282 USD 281 11,840 PHP 287 42.0000 6
DEUTSCHE BANK AG .......... A+ July 18, 2013 6,314 USD 6,301 3,212,164 CLP 6,520 508.7500 219
DEUTSCHE BANK AG .......... A+ July 18, 2013 17,794 USD 17,757 9,012,875 CLP 18,293 506.5000 536
DEUTSCHE BANK AG .......... A+ July 22, 2013 26 USD 26 84 MYR 27 3.2012 1
DEUTSCHE BANK AG .......... A+ July 25, 2013 32 USD 32 102 MYR 33 3.2182 1
DEUTSCHE BANK AG .......... A+ August 19, 2013 6,831 EUR 9,024 29,046 PLN 9,202 4.2520 178
DEUTSCHE BANK AG .......... A+ August 26, 2013 1,857 USD 1,855 2,318 SGD 1,896 1.2484 41
DEUTSCHE BANK AG .......... A+ August 27, 2013 2,325 USD 2,323 2,886 SGD 2,360 1.2411 37
DEUTSCHE BANK AG .......... A+ August 30, 2013 1,156 USD 1,155 1,445 SGD 1,182 1.2497 27
The accompanying notes are an integral part of these financial statements.
46 Franklin Templeton Investments Funds

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ........... A+ September 4, 2013 19,050 USD $19,036 128,816 SEK $19,704 $ 6.7620 $ 668
DEUTSCHE BANK AG ........... A+ September 23, 2013 27,260 EUR 36,058 36,262 USD 36,253 1.3302 195
DEUTSCHE BANK AG ........... A+ September 24, 2013 1,130 USD 1,129 47,217 PHP 1,147 41.8020 18
DEUTSCHE BANK AG ........... A+ October 4, 2013 1,359 USD 1,359 56,815 PHP 1,380 41.8000 21
DEUTSCHE BANK AG ........... A+ October 16, 2013 307 USD 307 961 MYR 308 3.1292 1
DEUTSCHE BANK AG ........... A+ October 16, 2013 319 USD 320 13,286 PHP 323 41.6190 3
DEUTSCHE BANK AG ........... A+ October 16, 2013 711 USD 711 2,226 MYR 715 3.1329 4
DEUTSCHE BANK AG ........... A+ October 29, 2013 254 USD 254 128,218 CLP 258 504.6999 4
DEUTSCHE BANK AG ........... A+ December 5, 2013 2,666 USD 2,671 1,340,820 CLP 2,687 503.0000 16
DEUTSCHE BANK AG ........... A+ December 20, 2013 19,831 EUR 26,327 26,332 USD 26,391 1.3278 64
HSBC BANK PLC .............. AA- January 28, 2013 1,017 USD 1,010 44,070 PHP 1,067 43.3540 57
HSBC BANK PLC .............. AA- February 4, 2013 4,017 USD 3,993 172,800 PHP 4,185 43.0140 192
HSBC BANK PLC .............. AA- February 6, 2013 3,423 USD 3,403 147,300 PHP 3,568 43.0340 165
HSBC BANK PLC .............. AA- February 7, 2013 2,506 USD 2,491 3,112 SGD 2,533 1.2420 42
HSBC BANK PLC .............. AA- February 14, 2013 1,686 USD 1,677 2,093 SGD 1,704 1.2410 27
HSBC BANK PLC .............. AA- February 14, 2013 2,342 USD 2,329 2,907 SGD 2,366 1.2410 37
HSBC BANK PLC .............. AA- February 19, 2013 347 USD 345 1,068 MYR 346 3.0806 1
HSBC BANK PLC .............. AA- February 26, 2013 624 USD 621 34,937 INR 627 55.9675 6
HSBC BANK PLC .............. AA- March 19, 2013 4,078 USD 4,057 5,153 SGD 4,197 1.2637 140
HSBC BANK PLC .............. AA- March 21, 2013 3,092 USD 3,077 3,879 SGD 3,160 1.2544 83
HSBC BANK PLC .............. AA- April 11, 2013 670 USD 667 27,835 PHP 675 41.5410 8
HSBC BANK PLC .............. AA- April 15, 2013 534 USD 532 22,153 PHP 537 41.4780 5
HSBC BANK PLC .............. AA- July 31, 2013 76 USD 76 242 MYR 78 3.2026 2
HSBC BANK PLC .............. AA- August 12, 2013 159 USD 159 500 MYR 161 3.1497 2
HSBC BANK PLC .............. AA- August 15, 2013 1,405 USD 1,403 1,749 SGD 1,430 1.2451 27
HSBC BANK PLC .............. AA- August 19, 2013 1,405 USD 1,403 1,749 SGD 1,430 1.2450 27
HSBC BANK PLC .............. AA- September 26, 2013 6,640 USD 6,639 7,542,000 KRW 6,988 1,135.7999 349
HSBC BANK PLC .............. AA- September 30, 2013 1,249 USD 1,249 52,400 PHP 1,273 41.9380 24
HSBC BANK PLC .............. AA- October 3, 2013 1,000 USD 1,000 41,700 PHP 1,013 41.7110 13
HSBC BANK PLC .............. AA- October 4, 2013 1,093 USD 1,093 45,574 PHP 1,107 41.7140 14
HSBC BANK PLC .............. AA- October 7, 2013 1,634 USD 1,634 67,945 PHP 1,650 41.5890 16
HSBC BANK PLC .............. AA- October 11, 2013 943 USD 943 39,191 PHP 952 41.5610 9
HSBC BANK PLC .............. AA- November 20, 2013 558 USD 559 1,742 MYR 559 3.1212 —
JPMORGAN CHASE BANK, N.A. .. A+ January 15, 2013 169 USD 168 7,030 PHP 170 41.4781 2
JPMORGAN CHASE BANK, N.A. .. A+ January 22, 2013 1,094 USD 1,087 47,850 PHP 1,159 43.7480 72
JPMORGAN CHASE BANK, N.A. .. A+ January 30, 2013 231 USD 230 117,360 CLP 243 507.2504 13
JPMORGAN CHASE BANK, N.A. .. A+ February 7, 2013 2,444 USD 2,430 105,000 PHP 2,544 42.9600 114
JPMORGAN CHASE BANK, N.A. .. A+ February 21, 2013 647 USD 643 319,600 CLP 659 493.9997 16
JPMORGAN CHASE BANK, N.A. .. A+ February 22, 2013 1,086 USD 1,080 542,400 CLP 1,119 499.4999 39
JPMORGAN CHASE BANK, N.A. .. A+ February 25, 2013 2,497 USD 2,483 140,000 INR 2,511 56.0700 28
JPMORGAN CHASE BANK, N.A. .. A+ February 28, 2013 492 USD 490 246,900 CLP 509 501.4002 19
JPMORGAN CHASE BANK, N.A. .. A+ March 21, 2013 646 USD 643 322,300 CLP 663 498.9998 20
JPMORGAN CHASE BANK, N.A. .. A+ April 10, 2013 432 USD 430 17,945 PHP 435 41.4960 5
JPMORGAN CHASE BANK, N.A. .. A+ April 12, 2013 753 USD 750 31,341 PHP 760 41.6190 10
JPMORGAN CHASE BANK, N.A. .. A+ April 12, 2013 1,207 USD 1,201 3,765 MYR 1,217 3.1202 16
JPMORGAN CHASE BANK, N.A. .. A+ April 19, 2013 285 USD 284 887 MYR 287 3.1134 3
JPMORGAN CHASE BANK, N.A. .. A+ April 23, 2013 815 USD 812 2,541 MYR 821 3.1162 9
JPMORGAN CHASE BANK, N.A. .. A+ April 29, 2013 899 USD 895 455,165 CLP 932 506.4000 37
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 47

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
JPMORGAN CHASE BANK, N.A. ..... A+ July 29, 2013 33 USD $ 33 107 MYR $ 34 $ 3.2311 $ 1
JPMORGAN CHASE BANK, N.A. ..... A+ August 27, 2013 842 USD 841 2,650 MYR 852 3.1480 11
JPMORGAN CHASE BANK, N.A. ..... A+ September 19, 2013 2,629 USD 2,628 3,216 SGD 2,632 1.2232 4
JPMORGAN CHASE BANK, N.A. ..... A+ October 11, 2013 536 USD 536 22,262 PHP 541 41.5410 5
UBS AG ........................ A February 13, 2013 1,740 EUR 2,284 2,315 USD 2,302 1.3307 18
UBS AG ........................ A February 19, 2013 1,975 EUR 2,593 2,609 USD 2,594 1.3209 1
UBS AG ........................ A February 21, 2013 1,165 EUR 1,530 1,540 USD 1,532 1.3222 2
UBS AG ........................ A May 23, 2013 6,445 EUR 8,486 47,710 NOK 8,506 7.4025 20
UBS AG ........................ A June 3, 2013 1,996 EUR 2,629 14,810 NOK 2,640 7.4205 11
UBS AG ........................ A November 8, 2013 3,568 EUR 4,729 26,600 NOK 4,734 7.4555 5
Total Number of Contracts: ...136 $10,259
BARCLAYS BANK PLC ............. A+ January 11, 2013 617 EUR 809 789 USD 784 1.2795 (25)
BARCLAYS BANK PLC ............. A+ January 14, 2013 629 EUR 825 802 USD 797 1.2753 (28)
BARCLAYS BANK PLC ............. A+ January 22, 2013 511 EUR 671 652 USD 649 1.2760 (22)
BARCLAYS BANK PLC ............. A+ January 28, 2013 2,995 EUR 3,929 3,905 USD 3,881 1.3039 (48)
BARCLAYS BANK PLC ............. A+ February 4, 2013 5,119 EUR 6,717 6,316 USD 6,278 1.2338 (439)
BARCLAYS BANK PLC ............. A+ April 25, 2013 2,895 EUR 3,808 3,769 USD 3,754 1.3022 (54)
BARCLAYS BANK PLC ............. A+ May 16, 2013 1,338 EUR 1,762 1,726 USD 1,720 1.2898 (42)
BARCLAYS BANK PLC ............. A+ May 21, 2013 1,861 EUR 2,450 2,379 USD 2,370 1.2781 (80)
BARCLAYS BANK PLC ............. A+ May 21, 2013 3,051 EUR 4,017 3,902 USD 3,888 1.2789 (129)
BARCLAYS BANK PLC ............. A+ May 22, 2013 1,698 EUR 2,235 2,174 USD 2,166 1.2803 (69)
BARCLAYS BANK PLC ............. A+ May 29, 2013 1,409 EUR 1,856 1,785 USD 1,780 1.2672 (76)
BARCLAYS BANK PLC ............. A+ June 5, 2013 2,438 EUR 3,212 3,032 USD 3,022 1.2435 (190)
BARCLAYS BANK PLC ............. A+ June 6, 2013 1,095 EUR 1,442 1,370 USD 1,365 1.2513 (77)
BARCLAYS BANK PLC ............. A+ June 20, 2013 559 EUR 737 708 USD 706 1.2654 (31)
BARCLAYS BANK PLC ............. A+ July 16, 2013 1,404 EUR 1,853 1,720 USD 1,717 1.2253 (136)
BARCLAYS BANK PLC ............. A+ July 18, 2013 2,203 EUR 2,906 2,712 USD 2,706 1.2310 (200)
BARCLAYS BANK PLC ............. A+ July 19, 2013 1,652 EUR 2,180 2,040 USD 2,036 1.2350 (144)
BARCLAYS BANK PLC ............. A+ July 30, 2013 240 EUR 317 297 USD 296 1.2362 (21)
BARCLAYS BANK PLC ............. A+ August 1, 2013 49 EUR 64 60 USD 60 1.2310 (4)
BARCLAYS BANK PLC ............. A+ August 1, 2013 117 EUR 155 144 USD 144 1.2300 (11)
BARCLAYS BANK PLC ............. A+ August 5, 2013 1,597 EUR 2,109 1,975 USD 1,972 1.2362 (137)
BARCLAYS BANK PLC ............. A+ August 23, 2013 581 EUR 768 728 USD 727 1.2522 (41)
BARCLAYS BANK PLC ............. A+ August 23, 2013 974 EUR 1,287 1,219 USD 1,218 1.2522 (69)
BARCLAYS BANK PLC ............. A+ August 26, 2013 17,746 EUR 23,449 22,234 USD 22,211 1.2528 (1,238)
BARCLAYS BANK PLC ............. A+ September 10, 2013 599 EUR 792 759 USD 758 1.2660 (34)
BARCLAYS BANK PLC ............. A+ September 12, 2013 587 EUR 776 754 USD 753 1.2837 (23)
BARCLAYS BANK PLC ............. A+ September 16, 2013 1,676 EUR 2,216 2,170 USD 2,169 1.2946 (47)
BARCLAYS BANK PLC ............. A+ September 19, 2013 394 EUR 521 519 USD 519 1.3173 (2)
BARCLAYS BANK PLC ............. A+ September 24, 2013 956 EUR 1,265 1,243 USD 1,243 1.2998 (22)
BARCLAYS BANK PLC ............. A+ October 25, 2013 380 EUR 504 496 USD 497 1.3044 (7)
BARCLAYS BANK PLC ............. A+ November 5, 2013 924 EUR 1,224 1,202 USD 1,204 1.3018 (20)
CREDIT SUISSE INTERNATIONAL ... A+ May 7, 2013 2,249 EUR 2,960 2,969 USD 2,958 1.3203 (2)
DEUTSCHE BANK AG ............. A+ January 7, 2013 2,721 EUR 3,568 3,538 USD 3,515 1.3002 (53)
DEUTSCHE BANK AG ............. A+ January 7, 2013 3,523 EUR 4,619 4,581 USD 4,551 1.3002 (68)
DEUTSCHE BANK AG ............. A+ January 9, 2013 2,677 USD 2,659 140,000 INR 2,530 52.2985 (129)
DEUTSCHE BANK AG ............. A+ January 11, 2013 529 USD 526 28,084 INR 508 53.0650 (18)
The accompanying notes are an integral part of these financial statements.
48 Franklin Templeton Investments Funds

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ............. A+ January 14, 2013 264 USD $ 262 14,190 INR $ 256 $53.7744 $ (6)
DEUTSCHE BANK AG ............. A+ January 17, 2013 1,035 EUR 1,357 1,319 USD 1,311 1.2748 (46)
DEUTSCHE BANK AG ............. A+ January 23, 2013 1,275 EUR 1,672 1,652 USD 1,641 1.2955 (31)
DEUTSCHE BANK AG ............. A+ January 23, 2013 20,000 EUR 26,233 25,911 USD 25,749 1.2955 (484)
DEUTSCHE BANK AG ............. A+ January 28, 2013 767 USD 762 42,301 INR 762 55.1600 —
DEUTSCHE BANK AG ............. A+ January 29, 2013 1,098 USD 1,091 59,608 INR 1,073 54.3095 (18)
DEUTSCHE BANK AG ............. A+ January 31, 2013 543 EUR 712 713 USD 709 1.3139 (3)
DEUTSCHE BANK AG ............. A+ January 31, 2013 2,307 USD 2,293 125,881 INR 2,266 54.5665 (27)
DEUTSCHE BANK AG ............. A+ March 4, 2013 594 USD 590 32,847 INR 588 55.3365 (2)
DEUTSCHE BANK AG ............. A+ March 7, 2013 437 USD 435 24,195 INR 433 55.3290 (2)
DEUTSCHE BANK AG ............. A+ March 11, 2013 118 USD 118 6,550 INR 117 55.3499 (1)
DEUTSCHE BANK AG ............. A+ March 18, 2013 297 USD 296 16,396 INR 293 55.1879 (3)
DEUTSCHE BANK AG ............. A+ March 20, 2013 268 USD 267 14,935 INR 267 55.6290 —
DEUTSCHE BANK AG ............. A+ March 26, 2013 1,558 EUR 2,047 2,055 USD 2,045 1.3191 (2)
DEUTSCHE BANK AG ............. A+ April 12, 2013 444 USD 443 24,140 INR 430 54.3165 (13)
DEUTSCHE BANK AG ............. A+ April 15, 2013 947 USD 942 51,765 INR 921 54.6870 (21)
DEUTSCHE BANK AG ............. A+ April 22, 2013 219 USD 218 11,968 INR 213 54.6464 (5)
DEUTSCHE BANK AG ............. A+ April 30, 2013 663 USD 660 37,042 INR 658 55.8870 (2)
DEUTSCHE BANK AG ............. A+ May 6, 2013 12,380 EUR 16,291 16,342 USD 16,277 1.3200 (14)
DEUTSCHE BANK AG ............. A+ May 8, 2013 1,097 EUR 1,444 1,446 USD 1,441 1.3180 (3)
DEUTSCHE BANK AG ............. A+ May 20, 2013 1,861 EUR 2,450 2,386 USD 2,378 1.2823 (72)
DEUTSCHE BANK AG ............. A+ May 21, 2013 2,714 EUR 3,573 3,461 USD 3,448 1.2751 (125)
DEUTSCHE BANK AG ............. A+ May 29, 2013 95 EUR 125 120 USD 120 1.2657 (5)
DEUTSCHE BANK AG ............. A+ May 29, 2013 9,046 EUR 11,913 11,386 USD 11,347 1.2587 (566)
DEUTSCHE BANK AG ............. A+ June 5, 2013 931 EUR 1,226 1,158 USD 1,154 1.2439 (72)
DEUTSCHE BANK AG ............. A+ June 7, 2013 2,411 EUR 3,176 3,017 USD 3,008 1.2516 (168)
DEUTSCHE BANK AG ............. A+ June 11, 2013 3,698 EUR 4,873 4,691 USD 4,677 1.2685 (196)
DEUTSCHE BANK AG ............. A+ June 13, 2013 893 EUR 1,177 1,126 USD 1,123 1.2614 (54)
DEUTSCHE BANK AG ............. A+ June 13, 2013 4,274 EUR 5,632 5,391 USD 5,375 1.2614 (257)
DEUTSCHE BANK AG ............. A+ June 14, 2013 4,047 EUR 5,332 5,071 USD 5,056 1.2531 (276)
DEUTSCHE BANK AG ............. A+ June 17, 2013 4,047 EUR 5,334 5,122 USD 5,108 1.2658 (226)
DEUTSCHE BANK AG ............. A+ June 27, 2013 398 EUR 525 500 USD 499 1.2552 (26)
DEUTSCHE BANK AG ............. A+ July 5, 2013 23,580 EUR 31,094 29,819 USD 29,745 1.2646 (1,349)
DEUTSCHE BANK AG ............. A+ July 22, 2013 1,212 EUR 1,600 1,494 USD 1,491 1.2325 (109)
DEUTSCHE BANK AG ............. A+ July 23, 2013 1,389 EUR 1,833 1,710 USD 1,706 1.2308 (127)
DEUTSCHE BANK AG ............. A+ July 25, 2013 130 EUR 171 158 USD 158 1.2200 (13)
DEUTSCHE BANK AG ............. A+ July 29, 2013 70 EUR 92 85 USD 85 1.2204 (7)
DEUTSCHE BANK AG ............. A+ July 31, 2013 5,117 EUR 6,754 6,361 USD 6,350 1.2432 (404)
DEUTSCHE BANK AG ............. A+ August 6, 2013 2,102 EUR 2,775 2,573 USD 2,569 1.2240 (207)
DEUTSCHE BANK AG ............. A+ August 9, 2013 1,505 EUR 1,987 1,881 USD 1,878 1.2497 (109)
DEUTSCHE BANK AG ............. A+ August 28, 2013 27 EUR 36 34 USD 34 1.2568 (2)
DEUTSCHE BANK AG ............. A+ August 28, 2013 587 EUR 776 738 USD 737 1.2569 (39)
DEUTSCHE BANK AG ............. A+ September 11, 2013 3,698 EUR 4,890 4,750 USD 4,748 1.2844 (142)
DEUTSCHE BANK AG ............. A+ September 27, 2013 10,795 EUR 14,281 14,260 USD 14,258 1.3210 (23)
DEUTSCHE BANK AG ............. A+ October 23, 2013 1,010 USD 1,011 3,133 MYR 1,006 3.1005 (5)
DEUTSCHE BANK AG ............. A+ October 31, 2013 1,939 EUR 2,569 2,510 USD 2,512 1.2942 (57)
DEUTSCHE BANK AG ............. A+ November 4, 2013 131 EUR 175 171 USD 172 1.3050 (3)
DEUTSCHE BANK AG ............. A+ November 15, 2013 6,263 EUR 8,302 7,995 USD 8,005 1.2766 (297)
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 49

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ............ A+ November 19, 2013 188 EUR $ 249 241 USD $ 242 $ 1.2847 $ (7)
DEUTSCHE BANK AG ............ A+ November 19, 2013 920 USD 921 2,867 MYR 920 3.1160 (1)
DEUTSCHE BANK AG ............ A+ November 19, 2013 1,753 EUR 2,325 2,253 USD 2,256 1.2847 (69)
DEUTSCHE BANK AG ............ A+ November 29, 2013 171 EUR 227 223 USD 223 1.3005 (4)
DEUTSCHE BANK AG ............ A+ December 3, 2013 2,050 EUR 2,720 2,673 USD 2,678 1.3040 (42)
HSBC BANK PLC ................ AA- January 29, 2013 1,123 USD 1,116 61,006 INR 1,098 54.3095 (18)
HSBC BANK PLC ................ AA- January 31, 2013 1,666 USD 1,656 90,878 INR 1,636 54.5515 (20)
HSBC BANK PLC ................ AA- February 8, 2013 100 EUR 131 131 USD 130 1.3088 (1)
HSBC BANK PLC ................ AA- February 8, 2013 1,740 EUR 2,283 2,277 USD 2,264 1.3088 (19)
HSBC BANK PLC ................ AA- March 4, 2013 686 USD 682 37,958 INR 680 55.3265 (2)
HSBC BANK PLC ................ AA- March 11, 2013 22,519 USD 22,400 1,243,827 INR 22,257 55.2350 (143)
HSBC BANK PLC ................ AA- March 13, 2013 296 USD 295 16,300 INR 292 55.0860 (3)
HSBC BANK PLC ................ AA- March 28, 2013 513 USD 510 28,407 INR 507 55.3800 (4)
HSBC BANK PLC ................ AA- August 2, 2013 5,117 EUR 6,755 6,332 USD 6,321 1.2374 (434)
HSBC BANK PLC ................ AA- August 27, 2013 1,757 EUR 2,322 2,216 USD 2,214 1.2614 (108)
HSBC BANK PLC ................ AA- October 17, 2013 2,552 EUR 3,379 3,318 USD 3,319 1.3000 (60)
HSBC BANK PLC ................ AA- October 22, 2013 1,360 USD 1,361 4,190 MYR 1,345 3.0802 (16)
HSBC BANK PLC ................ AA- October 24, 2013 674 USD 674 2,090 MYR 671 3.1010 (3)
HSBC BANK PLC ................ AA- December 9, 2013 469 EUR 622 616 USD 618 1.3153 (4)
HSBC BANK PLC ................ AA- December 12, 2013 45,318 USD 45,410 140,913 MYR 45,200 3.1094 (210)
JPMORGAN CHASE BANK, N.A. .... A+ January 14, 2013 714 EUR 936 911 USD 905 1.2755 (31)
JPMORGAN CHASE BANK, N.A. .... A+ January 14, 2013 840 USD 835 45,171 INR 816 53.7445 (20)
JPMORGAN CHASE BANK, N.A. .... A+ January 22, 2013 157 USD 156 8,402 INR 151 53.3511 (5)
JPMORGAN CHASE BANK, N.A. .... A+ February 11, 2013 2,710 USD 2,694 139,810 INR 2,513 51.5983 (181)
JPMORGAN CHASE BANK, N.A. .... A+ February 19, 2013 1,975 EUR 2,593 2,607 USD 2,592 1.3198 (1)
JPMORGAN CHASE BANK, N.A. .... A+ March 19, 2013 2,654 USD 2,642 3,240 SGD 2,640 1.2208 (2)
JPMORGAN CHASE BANK, N.A. .... A+ March 25, 2013 505 USD 503 27,954 INR 499 55.3199 (4)
JPMORGAN CHASE BANK, N.A. .... A+ April 16, 2013 638 USD 635 34,770 INR 619 54.5220 (16)
JPMORGAN CHASE BANK, N.A. .... A+ April 18, 2013 624 USD 621 34,130 INR 607 54.7090 (14)
JPMORGAN CHASE BANK, N.A. .... A+ April 22, 2013 312 USD 311 17,049 INR 303 54.5765 (8)
JPMORGAN CHASE BANK, N.A. .... A+ April 29, 2013 370 USD 368 20,619 INR 366 55.7350 (2)
JPMORGAN CHASE BANK, N.A. .... A+ April 30, 2013 308 USD 306 17,176 INR 305 55.8469 (1)
JPMORGAN CHASE BANK, N.A. .... A+ May 23, 2013 2,937 EUR 3,867 3,767 USD 3,754 1.2828 (113)
JPMORGAN CHASE BANK, N.A. .... A+ July 31, 2013 5,117 EUR 6,754 6,353 USD 6,342 1.2416 (412)
JPMORGAN CHASE BANK, N.A. .... A+ August 6, 2013 4,006 EUR 5,290 4,898 USD 4,891 1.2226 (399)
JPMORGAN CHASE BANK, N.A. .... A+ August 29, 2013 1,496 EUR 1,978 1,885 USD 1,884 1.2597 (94)
JPMORGAN CHASE BANK, N.A. .... A+ October 18, 2013 746 USD 746 2,317 MYR 744 3.1065 (2)
JPMORGAN CHASE BANK, N.A. .... A+ October 31, 2013 568 USD 569 1,760 MYR 565 3.0963 (4)
JPMORGAN CHASE BANK, N.A. .... A+ November 12, 2013 5,214 EUR 6,911 6,677 USD 6,684 1.2805 (227)
JPMORGAN CHASE BANK, N.A. .... A+ November 20, 2013 6,110 EUR 8,101 7,800 USD 7,811 1.2766 (290)
JPMORGAN CHASE BANK, N.A. .... A+ December 13, 2013 2,179 EUR 2,892 2,844 USD 2,850 1.3053 (42)
JPMORGAN CHASE BANK, N.A. .... A+ December 17, 2013 938 USD 941 2,912 MYR 934 3.1030 (7)
UBS AG ....................... A January 11, 2013 3,657 EUR 4,795 4,678 USD 4,647 1.2791 (148)
UBS AG ....................... A January 14, 2013 669 EUR 877 852 USD 847 1.2744 (30)
UBS AG ....................... A January 25, 2013 904 EUR 1,186 1,182 USD 1,174 1.3063 (12)
UBS AG ....................... A February 1, 2013 49 EUR 64 64 USD 64 1.3116 —
UBS AG ....................... A February 8, 2013 1,700 EUR 2,231 2,223 USD 2,210 1.3074 (21)
UBS AG ....................... A May 10, 2013 816 EUR 1,074 1,065 USD 1,061 1.3052 (13)
The accompanying notes are an integral part of these financial statements.
50 Franklin Templeton Investments Funds

Templeton Global Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
UBS AG .......................... A July 16, 2013 4,549 EUR $ 6,001 5,574 USD $ 5,562 $1.2254 $ (439)
UBS AG .......................... A July 18, 2013 4,549 EUR 6,002 5,596 USD 5,584 1.2301 (418)
UBS AG .......................... A August 1, 2013 5,117 EUR 6,755 6,298 USD 6,288 1.2308 (467)
UBS AG .......................... A August 22, 2013 3,080 EUR 4,069 3,812 USD 3,808 1.2377 (261)
UBS AG .......................... A August 26, 2013 1,509 EUR 1,995 1,889 USD 1,887 1.2512 (108)
UBS AG .......................... A August 26, 2013 1,534 EUR 2,027 13,000 SEK 1,988 8.4745 (39)
UBS AG .......................... A August 26, 2013 1,890 EUR 2,497 2,364 USD 2,362 1.2512 (135)
UBS AG .......................... A September 17, 2013 1,563 EUR 2,068 2,023 USD 2,022 1.2938 (46)
UBS AG .......................... A September 20, 2013 1,339 EUR 1,772 1,770 USD 1,770 1.3217 (2)
UBS AG .......................... A October 7, 2013 1,560 EUR 2,065 2,020 USD 2,021 1.2951 (44)
UBS AG .......................... A October 9, 2013 2,385 EUR 3,157 3,117 USD 3,118 1.3068 (39)
UBS AG .......................... A October 11, 2013 2,381 EUR 3,152 3,090 USD 3,091 1.2979 (61)
UBS AG .......................... A November 20, 2013 986 EUR 1,307 1,262 USD 1,264 1.2801 (43)
UBS AG .......................... A December 9, 2013 1,254 EUR 1,664 1,646 USD 1,649 1.3128 (15)
UBS AG .......................... A December 9, 2013 39,875 EUR 52,912 52,347 USD 52,448 1.3128 (464)
Total Number of Contracts: .....147 $(15,203)
Net Unrealized Loss ............... $ (4,944)
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................. 18.24 24.62
AA .................................. 10.02 2.05
A ................................... 27.51 26.24
BBB................................. 18.62 13.20
BB .................................. 5.17 10.77
B ................................... 3.96 1.52
Not Rated ............................ — 0.08
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s
and Fitch ratings.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 51

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 1,768,048 $ 1,316,292
Canadian 69 —
Foreign
Receivables
35,255 91,360
Due from broker 1,534 —
Capital units sold 1,338 3,281
Interest and withholding tax 21,103 16,486
Unrealized gain on derivatives 10,259 25,517
Other assets (Note 8) 161 165
Total assets
Liabilities
Payables
1,837,767 1,453,101
Investment securities purchased 52 20
Capital units redeemed 366 1,309
Management fees 786 618
Foreign capital taxes payable 2,594 2,265
Accrued expenses 467 405
Unrealized loss on derivatives 15,203 12,213
Total liabilities 19,468 16,830
Net assets $ 1,818,299 $ 1,436,271
Total net assets per series (000s)
Series A $419,998 $335,363
Series F 89,524 65,174
Series I 19,935 7,485
Series O 1,288,842 1,028,249
Number of units outstanding (Note 3)
Series A 43,534,962 35,874,074
Series F 8,704,250 6,574,815
Series I 1,969,995 767,228
Series O 103,405,268 86,990,340
Net assets per unit — CAD
Series A $9.65 $9.34
Series F 10.29 9.91
Series I 10.12 9.75
Series O 12.47 11.82
Net assets per unit — USD
Series A $9.72 $9.16
Series F 10.36 9.72
Series I 10.19 9.57
Series O 12.55 11.60
Cost of investments held (000s) $1,698,795 $1,333,830
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton Global Bond Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Interest (net of foreign taxes withheld (000s) —
2012 — $1,613; 2011 — $2,126) $ 67,719 $ 63,608
Total investment income
Expenses
67,719 63,608
Management fees (Note 4(a)) 8,513 5,998
Transfer agent fees (Note 4(c)) 1,788 1,220
Custodian fees 407 328
Legal fees 10 4
Audit fees 34 27
Unitholder reporting costs 75 52
Independent review committee fees 1 1
Registration fees 67 51
Other expenses (Note 7) 693 419
Total expenses 11,588 8,100
Expenses waived/paid by Manager (Note 6) (1,972) (1,314)
Net expenses 9,616 6,786
Net investment income (loss) 58,103 56,822
Realized and unrealized gain (loss) on
investments
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(17,410) (14,955)
gain (loss)
Net change in unrealized appreciation
(depreciation) in value of investments and
34,684 4,531
derivatives 68,543 (19,926)
Net gain (loss) on investments 85,817 (30,350)
Increase (decrease) in net assets from operations $ 143,920 $ 26,472
Increase (decrease) in net assets from operations
per series (000s)
Series A $27,933 $1,081
Series F 6,329 594
Series I 957 10
Series O 108,701 24,787
Increase (decrease) in net assets from operations
per unit
Series A $0.71 $0.04
Series F 0.79 0.11
Series I 0.81 0.02
Series O 1.16 0.32
The accompanying notes are an integral part of these financial statements.
52 Franklin Templeton Investments Funds

Templeton Global Bond Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 143,920 $ 26,472 $ 27,933 $ 1,081 $ 6,329 $ 594
Distributions to unitholders
From net investment income (64,910) (57,065) (15,250) (12,353) (3,296) (2,382)
From capital gains (4,407) — (1,027) — (220) —
From return of capital — — — — — —
(69,317) (57,065) (16,277) (12,353) (3,516) (2,382)
Capital unit transactions
Subscriptions 635,045 744,568 141,695 224,624 51,262 52,364
Reinvestments 62,819 52,523 13,527 10,301 2,439 1,874
Redemptions (390,439) (387,665) (82,243) (68,722) (32,164) (23,465)
307,425 409,426 72,979 166,203 21,537 30,773
Increase (decrease) in net assets for the period 382,028 378,833 84,635 154,931 24,350 28,985
Net assets — beginning of period 1,436,271 1,057,438 335,363 180,432 65,174 36,189
Net assets — end of period $ 1,818,299 $ 1,436,271 $ 419,998 $ 335,363 $ 89,524 $ 65,174
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 957 $ 10 $ 108,701 $ 24,787
Distributions to unitholders
From net investment income (481) (195) (45,883) (42,135)
From capital gains (41) — (3,119) —
From return of capital — — — —
(522) (195) (49,002) (42,135)
Capital unit transactions
Subscriptions 14,492 8,557 427,596 459,023
Reinvestments 462 172 46,391 40,176
Redemptions (2,939) (1,420) (273,093) (294,058)
12,015 7,309 200,894 205,141
Increase (decrease) in net assets for the period 12,450 7,124 260,593 187,793
Net assets — beginning of period 7,485 361 1,028,249 840,456
Net assets — end of period $ 19,935 $ 7,485 $ 1,288,842 $ 1,028,249
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 53

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton Global Smaller Companies Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 96.89%
COMMON STOCKS: 96.89%
United States: 24.38%
AllianceBernstein Holding LP ............ 1,161,512 $ 21,704 $ 20,097
Brocade Communications Systems Inc. ..... 2,417,020 9,567 12,772
Callaway Golf Co. ..................... 2,255,204 13,155 14,537
Cash America International Inc. .......... 91,490 3,477 3,605
Columbia Sportswear Co. . . . ............ 93,760 4,885 4,969
Foster Wheeler AG .................... 89,830 2,063 2,170
Heidrick & Struggles International Inc. ...... 566,670 11,110 8,589
Investment Technology Group Inc. ........ 793,760 11,569 7,088
JAKKS Pacific Inc. .................... 455,180 6,420 5,660
Leapfrog Enterprises Inc. . . . ............ 1,462,100 14,661 12,518
Navistar International Corp. ............. 79,740 2,161 1,722
Popular Inc. ........................ 961,847 15,672 19,862
Salix Pharmaceuticals Ltd. . . ............ 58,120 2,412 2,336
Savient Pharmaceuticals Inc. ............ 1,724,900 15,491 1,799
Simpson Manufacturing Co. Inc. .......... 119,680 3,837 3,898
Spartan Stores Inc. ................... 381,615 6,653 5,811
Swift Energy Co. ...................... 493,530 10,070 7,544
Tidewater Inc. . ...................... 244,460 11,628 10,851
True Religion Apparel Inc. . . ............ 295,190 8,060 7,453
Tutor Perini Corp. .................... 1,202,930 23,827 16,369
Unit Corp. . . ........................ 93,080 3,662 4,165
202,084 173,815
United Kingdom: 16.14%
African Minerals Ltd. .................. 873,170 4,055 4,601
Bellway PLC ........................ 519,033 5,703 8,697
Bovis Homes Group PLC . . . ............ 918,830 5,491 8,589
Dignity PLC . ........................ 473,861 5,594 8,324
Greggs PLC . ........................ 496,394 4,008 3,676
Homeserve PLC ...................... 3,056,850 11,699 11,701
Laird PLC . . ........................ 3,895,244 9,802 13,043
Man Group PLC ...................... 5,234,390 6,562 7,124
Micro Focus International PLC . .......... 706,517 3,376 6,680
Ophir Energy PLC .................... 379,100 3,557 3,105
Persimmon PLC ...................... 885,949 5,821 11,577
SIGPLC ........................... 4,081,690 8,171 8,036
UBMPLC .......................... 1,102,330 9,240 12,926
Vectura Group PLC ................... 5,178,350 7,297 7,030
90,376 115,109
Canada: 7.43%
Canaccord Financial Inc. . . . ............ 1,797,900 12,850 11,974
Ensign Energy Services Inc. ............. 1,136,800 17,717 17,404
HudBay Minerals Inc. ................. 1,914,620 21,690 19,146
Trican Well Service Ltd. ................ 342,600 4,173 4,492
56,430 53,016
Average
Cost
Fair
Value
Shares
(000s) (000s)
Japan: 7.27%
Asahi Co. Ltd. ...................... 65,400 $ 928 $ 930
Asics Corp. ........................ 881,300 11,017 13,354
HAJIME CONSTRUCTION CO. LTD. ...... 405,600 10,779 14,958
Keihin Corp. ....................... 624,000 12,086 8,877
Kobayashi Pharmaceutical Co. Ltd. ....... 291,800 12,899 13,739
47,709 51,858
South Korea: 5.44%
BS Financial Group Inc. ............... 1,471,610 11,605 18,071
Hyundai Mipo Dockyard Co. Ltd. . ........ 100,609 10,855 11,932
Korea Investment Holdings Co. Ltd. ....... 221,540 7,506 8,761
29,966 38,764
Hong Kong: 4.58%
Giordano International Ltd. . ............ 5,294,000 3,990 5,054
Haier Electronics Group Co. Ltd. . ........ 3,864,000 4,955 5,606
Samsonite International SA . ............ 1,702,500 3,085 3,487
Techtronic Industries Co. Ltd. . . . ........ 8,556,570 8,073 15,747
VTech Holdings Ltd. .................. 251,700 3,040 2,798
23,143 32,692
China: 3.91%
China Minzhong Food Corp. Ltd. . ........ 18,041,000 14,701 11,977
Kingsoft Corp. Ltd. ................... 12,405,000 5,754 8,795
Minth Group Ltd. .................... 3,244,000 3,529 3,704
Yingde Gases ...................... 3,412,500 3,079 3,438
27,063 27,914
Germany: 3.72%
Gerresheimer AG .................... 106,470 4,917 5,618
Gildemeister AG .................... 232,290 3,787 4,700
GSW Immobilien AG ................. 85,920 3,094 3,615
Kloeckner & Co. SE .................. 594,440 10,949 7,057
Software AG ....................... 130,410 4,171 5,524
26,918 26,514
Netherlands: 3.19%
Aalberts Industries NV ................ 371,379 4,074 7,721
Arcadis NV ........................ 338,193 4,419 7,973
Mediq NV ......................... 417,961 5,220 7,042
13,713 22,736
Singapore: 3.05%
CSE Global Ltd. ..................... 10,304,000 8,688 6,599
Ezion Holdings Ltd. .................. 3,119,000 2,830 4,379
First Resources Ltd. .................. 6,513,000 8,586 10,788
20,104 21,766
Italy: 2.94%
Amplifon SpA ...................... 1,744,701 8,798 8,629
Azimut Holding SpA .................. 632,510 4,561 9,039
Sorin SpA ......................... 1,508,496 3,409 3,311
16,768 20,979
The accompanying notes are an integral part of these financial statements.
54 Franklin Templeton Investments Funds

Templeton Global Smaller Companies Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Switzerland: 2.29%
Logitech International SA . ............. 610,230 $ 5,876 $ 4,648
Lonza Group AG .................... 52,850 1,916 2,801
Panalpina Welttransport Holding AG ...... 46,870 3,273 4,471
Vontobel Holding AG ................. 155,178 4,546 4,378
15,611 16,298
Bahamas: 1.85%
Steiner Leisure Ltd. .................. 275,155 9,068 13,162
Australia: 1.43% ....................
Emeco Holdings Ltd. ................. 8,053,368 5,686 5,187
Pacific Brands Ltd. .................. 7,789,324 10,608 5,036
16,294 10,223
Turkey: 1.38%
Aygaz AS ......................... 1,863,455 11,830 9,806
Sweden: 1.23%
D Carnegie & Co. AB ................. 2,485,010 25,695 —
Oriflame Cosmetics SA, SDR . ........... 278,850 10,115 8,802
35,810 8,802
Cayman Islands: 1.14%
Stella International Holdings Ltd. ......... 3,050,608 3,585 8,151
Indonesia: 1.13%
Sakari Resources Ltd. . . . ............. 5,335,000 10,011 8,026
Spain: 0.84%
Construcciones y Auxiliar de
Ferrocarriles SA ................... 13,107 5,916 6,010
Taiwan: 0.84%
Simplo Technology Co. Ltd. . ........... 1,198,800 6,764 5,961
Finland: 0.81%
Amer Sports OYJ .................... 390,820 5,122 5,783
Belgium: 0.79%
Barco NV ......................... 78,108 6,032 5,615
Brazil: 0.45%
Diagnosticos da America SA . ........... 498,000 3,457 3,213
France: 0.37%
Ipsos . . .......................... 59,310 1,920 2,199
SEBSA........................... 6,133 443 450
2,363 2,649
Philippines: 0.29%
Energy Development Corp. . . ........... 12,574,500 2,017 2,044
Total Common Stocks: ................ 688,154 690,906
Total Long-Term Investments: ........... 688,154 690,906
The accompanying notes are an integral part of these financial statements.
Principal Amount
in Currency
of Issue
Average
Cost
Fair
Value
(000s) (000s)
SHORT-TERM SECURITIES: 3.24%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 .............. 23,100,000 CAD $ 23,100 $ 23,100
Total Short-Term Securities: ........ 23,100 23,100
Transaction costs (Note 2) ........... (1,954) —
TOTAL INVESTMENTS: 100.13% ..... $709,300 714,006
OTHER ASSETS, less liabilities:
(0.13%) ...................... (944)
TOTAL NET ASSETS: 100.00% ...... $713,062
Franklin Templeton Investments Funds 55

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
Templeton Global Smaller Companies Fund
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 714,006 $ 828,286
Canadian
Receivables
169 57
Investment securities sold 2,060 2,456
Capital units sold 16 208
Dividends, interest and withholding tax 891 1,384
Other assets (Note 8) 104 123
Total assets
Liabilities
Payables
717,246 832,514
Investment securities purchased 2,745 239
Capital units redeemed 424 849
Management fees 599 725
Accrued expenses 416 583
Other liabilities (Note 9) — 75
Total liabilities 4,184 2,471
Net assets $ 713,062 $ 830,043
Total net assets per series (000s)
Series A $314,889 $369,473
Series F 25,878 31,854
Series I 1,907 1,650
Series O 370,388 427,066
Number of units outstanding (Note 3)
Series A 19,526,917 25,268,861
Series F 1,402,393 1,926,382
Series I 106,827 102,830
Series O 16,464,039 21,503,923
Net assets per unit — CAD
Series A $16.13 $14.62
Series F 18.46 16.54
Series I 17.85 16.04
Series O 22.50 19.86
Net assets per unit — USD
Series A $16.24 $14.34
Series F 18.59 16.23
Series I 17.97 15.74
Series O 22.65 19.48
Cost of investments held (000s) $709,300 $938,254
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $1,623; 2011 — $1,420) $ 18,722 $ 21,048
Interest 1,776 643
Total investment income
Expenses
20,498 21,691
Management fees (Note 4(a)) 7,927 11,608
Transfer agent fees (Note 4(c)) 2,889 3,442
Custodian fees 118 200
Legal fees 2 4
Audit fees 26 28
Unitholder reporting costs 8 90
Independent review committee fees 1 1
Registration fees 26 27
Other expenses (Note 7) 585 664
Total expenses 11,582 16,064
Expenses waived/paid by Manager (Note 6) (1,894) (742)
Net expenses 9,688 15,322
Net investment income (loss) 10,810 6,369
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(24,286) (14,393)
gain (loss)
Net change in unrealized appreciation
(446) (416)
(depreciation) in value of investments 114,674 (230,877)
Transaction costs (Note 11) (2,150) (2,605)
Net gain (loss) on investments 87,792 (248,291)
Increase (decrease) in net assets from operations $ 98,602 $ (241,922)
Increase (decrease) in net assets from operations
per series (000s)
Series A $38,457 $(121,608)
Series F 3,484 (10,689)
Series I 216 (475)
Series O 56,445 (109,150)
Increase (decrease) in net assets from operations
per unit
Series A $1.74 $(4.29)
Series F 2.09 (4.56)
Series I 2.09 (4.71)
Series O 2.69 (5.16)
The accompanying notes are an integral part of these financial statements.
56 Franklin Templeton Investments Funds

Templeton Global Smaller Companies Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 98,602 $ (241,922) $ 38,457 $ (121,608) $ 3,484 $ (10,689)
Distributions to unitholders
From net investment income (10,167) (6,582) (4,490) (2,941) (369) (252)
From capital gains — — — — — —
From return of capital — — — — — —
(10,167) (6,582) (4,490) (2,941) (369) (252)
Capital unit transactions
Subscriptions 77,242 135,457 15,159 34,032 4,800 9,735
Reinvestments 9,758 6,370 4,358 2,865 344 239
Redemptions (292,416) (243,278) (108,068) (137,905) (14,235) (23,218)
(205,416) (101,451) (88,551) (101,008) (9,091) (13,244)
Increase (decrease) in net assets for the period (116,981) (349,955) (54,584) (225,557) (5,976) (24,185)
Net assets — beginning of period 830,043 1,179,998 369,473 595,030 31,854 56,039
Net assets — end of period $ 713,062 $ 830,043 $ 314,889 $ 369,473 $ 25,878 $ 31,854
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 216 $ (475) $ 56,445 $ (109,150)
Distributions to unitholders
From net investment income (27) (13) (5,281) (3,376)
From capital gains — — — —
From return of capital — — — —
(27) (13) (5,281) (3,376)
Capital unit transactions
Subscriptions 141 150 57,142 91,540
Reinvestments 27 13 5,029 3,253
Redemptions (100) (38) (170,013) (82,117)
68 125 (107,842) 12,676
Increase (decrease) in net assets for the period 257 (363) (56,678) (99,850)
Net assets — beginning of period 1,650 2,013 427,066 526,916
Net assets — end of period $ 1,907 $ 1,650 $ 370,388 $ 427,066
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 57

STATEMENT OF INVESTMENTS As at December 31, 2012
Templeton International Stock Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 98.82%
COMMON STOCKS: 95.22%
United Kingdom: 17.77%
Aviva PLC ......................... 1,941,210 $ 8,553 $ 11,933
BAE Systems PLC ................... 2,460,107 17,798 13,588
BHP Billiton PLC .................... 391,100 11,943 13,709
BPPLC........................... 1,065,306 10,626 7,359
Compass Group PLC ................. 881,820 5,336 10,404
HSBC Holdings PLC .................. 1,283,063 26,834 13,344
Kingfisher PLC ...................... 2,663,279 12,386 12,356
Persimmon PLC .................... 914,181 9,401 11,945
Rolls–Royce Holdings PLC . . ........... 543,195 2,324 7,737
Royal Dutch Shell PLC, B . ............. 297,049 11,636 10,526
Tesco PLC . . . ..................... 2,052,960 13,363 11,240
Vodafone Group PLC ................. 4,947,685 15,119 12,373
145,319 136,514
Japan: 10.84%
East Japan Railway Co. . . ............. 210,600 12,941 13,508
Itochu Corp. ....................... 1,072,900 8,272 11,248
Konica Minolta Holdings Inc. ........... 1,648,000 18,241 11,763
Nintendo Co. Ltd. ................... 108,480 25,664 11,489
Olympus Corp. ..................... 886,600 20,636 17,061
Sony Corp. . . . ..................... 860,200 42,112 9,569
Trend Micro Inc. .................... 288,500 7,801 8,646
135,667 83,284
Switzerland: 9.73%
Adecco SA . . . ..................... 308,079 16,687 15,879
Credit Suisse Group AG . . ............. 593,000 20,029 14,292
Nestle SA ......................... 203,810 7,576 13,181
Novartis AG . . . ..................... 270,460 16,759 16,860
Roche Holding AG ................... 72,970 11,383 14,569
72,434 74,781
China: 8.48%
China Coal Energy Co. Ltd., H ........... 10,006,000 7,976 10,733
China Life Insurance Co. Ltd., H ......... 3,492,000 8,499 11,345
China Mobile Ltd. ................... 1,241,500 6,186 14,359
China Telecom Corp. Ltd., H . ........... 52,030,000 23,412 28,673
46,073 65,110
France: 6.94%
AXASA........................... 579,536 15,860 10,409
Cie Generale des Etablissements
Michelin, B ...................... 111,060 7,707 10,567
Sanofi . . .......................... 189,437 17,226 17,840
Total SA, B . . . ..................... 280,620 22,923 14,499
63,716 53,315
Netherlands: 6.81%
Akzo Nobel NV ..................... 232,830 9,650 15,304
ING Groep NV ...................... 1,391,381 21,671 13,123
Average
Cost
Fair
Value
Shares
(000s) (000s)
Netherlands: 6.81% (Continued)
Koninklijke Philips Electronics NV ......... 304,616 $ 8,837 $ 8,010
Randstad Holding NV .................. 431,435 10,739 15,901
50,897 52,338
Germany: 6.56%
Bayer AG .......................... 158,265 9,942 14,987
Deutsche Lufthansa AG ................ 538,720 8,873 10,113
Merck KGaA ........................ 117,670 14,077 15,399
Siemens AG ........................ 91,160 8,712 9,898
41,604 50,397
Hong Kong: 4.60%
Cheung Kong (Holdings) Ltd. ............ 671,000 11,098 10,190
Hang Lung Group Ltd. ................. 2,579,300 6,895 14,478
Hutchison Whampoa Ltd. .............. 1,025,700 7,670 10,628
25,663 35,296
Norway: 4.28%
Aker Solutions ASA ................... 722,050 6,049 14,846
Telenor ASA ........................ 893,121 10,019 18,056
16,068 32,902
Singapore: 4.03%
DBS Group Holdings Ltd. .............. 912,000 10,357 11,122
Singapore Telecommunications Ltd. ....... 3,094,000 6,915 8,363
United Overseas Bank Ltd. ............. 706,000 9,760 11,505
27,032 30,990
Italy: 3.85%
EniSpA............................ 421,942 8,049 10,264
Intesa Sanpaolo SpA .................. 5,605,998 7,354 9,627
Unicredit SpA ....................... 1,983,865 7,154 9,701
22,557 29,592
Australia: 2.61%
Brambles Ltd. ....................... 1,020,356 4,512 8,044
Qantas Airways Ltd. .................. 7,718,793 12,600 12,016
17,112 20,060
Spain: 2.44%
Repsol SA .......................... 376,475 7,834 7,631
Repsol SA, Rights, 1/10/13 .............. 376,475 — 228
Telefonica SA, American Depositary
Receipt .......................... 812,184 18,210 10,890
26,044 18,749
Russia: 2.24%
Gazprom, American Depositary Receipt ..... 1,780,400 37,361 17,206
South Korea: 1.47%
KB Financial Group Inc. ............... 318,926 12,981 11,287
South Africa: 1.44%
Sasol Ltd. .......................... 257,590 11,275 11,064
The accompanying notes are an integral part of these financial statements.
58 Franklin Templeton Investments Funds

Templeton International Stock Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Taiwan: 1.13%
Compal Electronics Inc. ......... 13,015,242 $ 13,650 $ 8,695
Total Common Stocks: ........... 765,453 731,580
PREFERRED STOCKS: 2.56%
Rolls–Royce Holdings PLC,
Preferred, C . ............... 69,297,180 — 112
Vale SA, American Depositary
Receipt, Preferred, A .......... 968,700 2,464 19,522
Total Preferred Stocks: ........... 2,464 19,634
Units/Shares
INVESTMENTS IN UNDERLYING FUNDS: 1.04%
Templeton China Opportunities Fund,
AS .......................
Total Investments In Underlying
700,623 7,174 7,968
Funds: .................... 7,174 7,968
Total Long-Term Investments: ...... 775,091 759,182
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 1.01%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 ............ 7,800,000 CAD $ 7,800 $ 7,800
Total Short-Term Securities: ................ 7,800 7,800
Transaction costs (Note 2) .......................... (1,663) —
TOTAL INVESTMENTS: 99.83% ............. $781,228 766,982
OTHER ASSETS, less liabilities: 0.17% ....... 1,301
TOTAL NET ASSETS: 100.00% .............. $768,283
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 59

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 766,982 $ 1,163,344
Canadian
Receivables
87 60
Capital units sold 63 95
Dividends, interest and withholding tax 3,447 5,176
Other assets (Note 8) 205 314
Total assets
Liabilities
Payables
770,784 1,168,989
Capital units redeemed 850 1,648
Management fees 978 1,139
Accrued expenses 673 913
Total liabilities 2,501 3,700
Net assets $ 768,283 $ 1,165,289
Total net assets per series (000s)
Series A $527,624 $592,301
Series F 18,116 21,985
Series I 3,301 2,765
Series O 217,203 545,349
Series T 2,039 2,889
Number of units outstanding (Note 3)
Series A 38,049,786 47,207,429
Series F 1,129,495 1,531,967
Series I 213,787 199,649
Series O 11,213,339 31,938,334
Series T 352,299 509,138
Net assets per unit — CAD
Series A $13.87 $12.54
Series F 16.04 14.35
Series I 15.44 13.85
Series O 19.37 17.07
Series T 5.79 5.67
Net assets per unit — USD
Series A $13.96 $12.30
Series F 16.15 14.08
Series I 15.54 13.59
Series O 19.50 16.75
Cost of investments held (000s) $781,228 $1,294,555
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Templeton International Stock Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $3,527; 2011 — $4,084) $ 36,803 $ 46,105
Interest 73 101
Total investment income
Expenses
36,876 46,206
Management fees (Note 4(a)) 12,371 16,681
Transfer agent fees (Note 4(c)) 4,877 5,938
Custodian fees 152 222
Legal fees 2 5
Audit fees 29 32
Unitholder reporting costs 14 164
Independent review committee fees 1 1
Registration fees 30 31
Other expenses (Note 7) 900 964
Total expenses 18,376 24,038
Expenses waived/paid by Manager (Note 6) (3,747) (3,389)
Net expenses 14,629 20,649
Net investment income (loss) 22,247 25,557
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
5,623 39,427
gain (loss)
Net change in unrealized appreciation
(865) (552)
(depreciation) in value of investments 116,965 (207,667)
Transaction costs (Note 11) (939) (762)
Net gain (loss) on investments 120,784 (169,554)
Increase (decrease) in net assets from operations $143,031 $(143,997)
Increase (decrease) in net assets from operations
per series (000s)
Series A $70,703 $(85,341)
Series F 2,504 (2,833)
Series I 431 (346)
Series O 69,100 (55,036)
Series T 293 (441)
Increase (decrease) in net assets from operations
per unit
Series A $1.69 $(1.64)
Series F 1.92 (1.77)
Series I 2.10 (1.77)
Series O 2.45 (1.82)
Series T 0.70 (0.72)
The accompanying notes are an integral part of these financial statements.
60 Franklin Templeton Investments Funds

Templeton International Stock Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 143,031 $ (143,997) $ 70,703 $ (85,341) $ 2,504 $ (2,833)
Distributions to unitholders
From net investment income (23,774) (25,120) (16,326) (12,853) (562) (468)
From capital gains — — — — — —
From return of capital (188) (354) — — — —
(23,962) (25,474) (16,326) (12,853) (562) (468)
Capital unit transactions
Subscriptions 68,328 182,994 18,213 25,749 1,866 5,175
Reinvestments 23,390 24,857 15,935 12,527 543 451
Redemptions (607,793) (295,758) (153,202) (200,541) (8,220) (8,167)
(516,075) (87,907) (119,054) (162,265) (5,811) (2,541)
Increase (decrease) in net assets for the period (397,006) (257,378) (64,677) (260,459) (3,869) (5,842)
Net assets — beginning of period 1,165,289 1,422,667 592,301 852,760 21,985 27,827
Net assets — end of period $ 768,283 $ 1,165,289 $ 527,624 $ 592,301 $ 18,116 $ 21,985
Series I Series O Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 431 $ (346) $ 69,100 $ (55,036) $ 293 $ (441)
Distributions to unitholders
From net investment income (102) (60) (6,721) (11,674) (63) (65)
From capital gains — — — — — —
From return of capital — — — — (188) (354)
(102) (60) (6,721) (11,674) (251) (419)
Capital unit transactions
Subscriptions 130 — 48,046 151,884 73 186
Reinvestments 77 45 6,706 11,667 129 167
Redemptions — — (445,277) (85,090) (1,094) (1,960)
207 45 (390,525) 78,461 (892) (1,607)
Increase (decrease) in net assets for the period 536 (361) (328,146) 11,751 (850) (2,467)
Net assets — beginning of period 2,765 3,126 545,349 533,598 2,889 5,356
Net assets — end of period $ 3,301 $ 2,765 $ 217,203 $ 545,349 $ 2,039 $ 2,889
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 61

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin Flex Cap Growth Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 96.80%
COMMON STOCKS: 96.80%
Software: 6.99%
ANSYS Inc. . . ........................ 30,000 $ 2,048 $ 2,007
Bottomline Technologies Inc. . . . . . ........ 45,500 902 1,192
BroadSoft Inc. ........................ 18,000 612 649
FactSet Research Systems Inc. . . . . ........ 11,500 861 1,006
Fortinet Inc. . . ........................ 55,700 1,263 1,165
Nuance Communications Inc. . . . . . ........ 100,000 1,830 2,216
Oracle Corp. . ........................ 114,400 3,132 3,786
RedHatInc. ......................... 43,000 1,742 2,261
Salesforce.com Inc. .................... 18,600 2,613 3,104
VMware Inc., A ........................ 23,000 2,098 2,151
17,101 19,537
IT Services: 6.74%
CognizantTechnologySolutionsCorp.,A ....... 27,000 1,975 1,985
International Business Machines Corp. . ...... 22,000 3,791 4,186
MasterCard Inc., A ..................... 11,000 3,088 5,372
Vantiv Inc., A . ........................ 83,000 1,763 1,683
Visa Inc., A . . . ........................ 37,300 3,097 5,612
13,714 18,838
Pharmaceuticals: 5.33%
Allergan Inc. . . ........................ 42,000 3,793 3,825
Merck & Co. Inc. ...................... 80,500 2,964 3,274
Novo Nordisk AS, American
Depositary Receipt ................... 12,400 1,850 2,010
Perrigo Co. . . ........................ 13,000 1,466 1,343
Watson Pharmaceuticals Inc. .............. 52,000 3,886 4,441
13,959 14,893
Media: 5.15%
DIRECTV ............................ 55,000 2,491 2,740
Discovery Communications Inc., C . . ........ 71,500 2,690 4,154
The Walt Disney Co. .................... 75,800 3,172 3,748
Time Warner Cable Inc. ................. 39,000 3,630 3,766
11,983 14,408
Computers & Peripherals: 4.99%
Apple Inc. . . . ........................ 21,000 6,264 11,118
EMC Corp. . . . ........................ 112,800 2,572 2,836
8,836 13,954
Chemicals: 4.12%
Airgas Inc. . . . ........................ 14,000 1,151 1,270
Ecolab Inc. . . ........................ 75,000 4,190 5,355
Praxair Inc. . . ........................ 45,000 4,160 4,889
9,501 11,514
Internet Software & Services: 3.75%
eBay Inc. . . . ........................ 68,000 3,146 3,446
Facebook Inc., A . ...................... 25,000 677 661
Average
Cost
Fair
Value
Shares
(000s) (000s)
Internet Software & Services: 3.75% (Continued)
Google Inc., A ......................... 6,700 $ 4,609 $ 4,720
LinkedIn Corp., A ...................... 14,500 1,526 1,654
9,958 10,481
Aerospace & Defense: 3.73%
Honeywell International Inc. .............. 13,700 835 864
Precision Castparts Corp. ................. 19,500 2,900 3,667
TransDigm Group Inc. .................. 17,000 2,402 2,302
United Technologies Corp. ................ 44,000 3,437 3,584
9,574 10,417
Health Care Equipment & Supplies: 3.70%
Abbott Laboratories ..................... 64,400 3,761 4,190
Edwards Lifesciences Corp. ............... 19,900 1,466 1,782
HeartWare International Inc. .............. 7,000 560 584
IDEXX Laboratories Inc. ................. 20,000 1,906 1,843
Intuitive Surgical Inc. ................... 4,000 1,663 1,947
9,356 10,346
Textiles, Apparel & Luxury Goods: 3.45%
Lululemon Athletica Inc. ................. 27,000 1,873 2,044
NIKE Inc., B .......................... 33,000 1,369 1,691
Ralph Lauren Corp. ..................... 21,500 2,705 3,201
Under Armour Inc., A ................... 56,200 2,103 2,709
8,050 9,645
Beverages: 2.89%
PepsiCo Inc. ......................... 59,700 3,970 4,058
The Coca–Cola Co. ..................... 111,600 4,296 4,021
8,266 8,079
Communications Equipment: 2.79%
Acme Packet Inc. ..................... 80,000 2,690 1,758
F5 Networks Inc. ...................... 13,500 1,200 1,302
QUALCOMM Inc. ...................... 77,000 4,326 4,743
8,216 7,803
Biotechnology: 2.75%
Biogen Idec Inc. ...................... 24,000 2,693 3,495
Celgene Corp. ......................... 37,500 2,621 2,929
Onyx Pharmaceuticals Inc. ............... 17,000 1,360 1,275
6,674 7,699
Health Care Providers & Services: 2.51%
DaVita HealthCare Partners Inc. ........... 20,000 1,548 2,195
Express Scripts Holding Co. ............... 50,900 2,511 2,729
McKesson Corp. ....................... 21,800 1,714 2,100
5,773 7,024
Insurance: 2.44%
ACE Ltd. . ............................ 40,000 2,786 3,170
Aflac Inc. . . ......................... 69,000 3,398 3,640
6,184 6,810
The accompanying notes are an integral part of these financial statements.
62 Franklin Templeton Investments Funds

Franklin Flex Cap Growth Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Oil, Gas & Consumable Fuels: 2.15%
Chevron Corp. ........................ 38,000 $ 3,919 $ 4,085
Whiting Petroleum Corp. ................. 45,000 2,351 1,938
6,270 6,023
Road & Rail: 2.12%
Genesee & Wyoming Inc. ................ 19,000 1,235 1,436
Kansas City Southern ................... 54,000 3,074 4,477
4,309 5,913
Specialty Retail: 2.06%
Dick’s Sporting Goods Inc. ............... 63,900 2,620 2,888
Tractor Supply Co. ..................... 16,000 1,449 1,405
Ulta Salon Cosmetics & Fragrance Inc. ...... 15,100 1,409 1,472
5,478 5,765
Electronic Equipment, Instruments & Components: 1.90%
National Instruments Corp. ............... 52,100 1,187 1,335
Trimble Navigation Ltd. ................. 67,000 2,575 3,978
3,762 5,313
Auto Components: 1.83%
BorgWarner Inc. ...................... 42,000 3,143 2,988
Johnson Controls Inc. ................... 70,000 2,121 2,132
5,264 5,120
Energy Equipment & Services: 1.78%
FMC Technologies Inc. .................. 27,000 1,038 1,148
National Oilwell Varco Inc. ............... 21,000 1,605 1,426
Schlumberger Ltd. ..................... 35,000 2,641 2,409
5,284 4,983
Commercial Banks: 1.76%
Signature Bank ........................ 37,500 2,292 2,657
Wells Fargo & Co. ..................... 66,300 2,087 2,253
4,379 4,910
Semiconductors & Semiconductor Equipment: 1.74%
Microchip Technology Inc. ............... 70,000 2,277 2,265
Xilinx Inc. . . . ........................ 73,000 2,214 2,602
4,491 4,867
Real Estate Investment Trust (REIT): 1.65%
American Tower Corp. .................. 60,000 3,201 4,603
Capital Markets: 1.61%
BlackRock Inc. . ...................... 8,100 1,448 1,663
T. Rowe Price Group Inc. ................ 44,000 2,362 2,846
3,810 4,509
Machinery: 1.49%
Pall Corp. . . . ........................ 45,000 2,722 2,692
The Manitowoc Co. Inc. ................. 95,000 1,445 1,480
4,167 4,172
Internet & Catalog Retail: 1.47%
Amazon.com Inc. ...................... 11,000 1,771 2,746
Priceline.com Inc. ..................... 2,200 658 1,357
2,429 4,103
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Electrical Equipment: 1.43%
Rockwell Automation Inc. ................ 20,000 $ 1,551 $ 1,668
Roper Industries Inc. ................... 21,000 2,171 2,324
3,722 3,992
Food & Staples Retailing: 1.42%
Whole Foods Market Inc. ................ 43,900 3,344 3,982
Trading Companies & Distributors: 1.28%
Fastenal Co. ......................... 60,000 2,172 2,782
United Rentals Inc. .................... 17,500 721 791
2,893 3,573
Food Products: 1.27%
Mead Johnson Nutrition Co., A ............. 23,500 1,582 1,538
WhiteWave Foods Co., A ................. 130,000 2,046 2,001
3,628 3,539
Health Care Technology: 1.23%
Cerner Corp. ......................... 44,500 2,379 3,431
Multiline Retail: 1.19%
Dollar General Corp. .................... 76,200 3,260 3,339
Industrial Conglomerates: 1.19%
Danaher Corp. ........................ 60,000 2,637 3,333
Air Freight & Logistics: 1.17%
Expeditors International of Washington Inc. . . . 32,200 1,359 1,264
Hub Group Inc., A ...................... 60,000 2,007 2,002
3,366 3,266
Commercial Services & Supplies: 1.06%
Stericycle Inc. ........................ 32,000 2,500 2,964
Life Sciences Tools & Services: 0.74%
Waters Corp. ......................... 24,000 1,624 2,077
Diversified Financial Services: 0.64%
IntercontinentalExchange Inc. ............. 14,600 1,981 1,795
Hotels, Restaurants & Leisure: 0.49%
Chipotle Mexican Grill Inc. ............... 4,600 1,488 1,357
Metals & Mining: 0.41%
Goldcorp Inc. ........................ 31,500 1,543 1,148
Automobiles: 0.20%
Tesla Motors Inc. ...................... 17,000 570 572
Airlines: 0.19%
Spirit Airlines Inc. ...................... 30,000 628 528
Total Common Stocks: ................... 235,552 270,625
Transaction costs (Note 2) .................. (256) —
TOTAL INVESTMENTS: 96.80% ............. $235,296 270,625
OTHER ASSETS, less liabilities: 3.20% ....... 8,950
TOTAL NET ASSETS: 100.00% ............. $279,575
Franklin Templeton Investments Funds 63

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 270,625 $ 193,503
Foreign
Receivables
8,924 55
Investment securities sold — 1,918
Capital units sold — 326
Dividends and withholding tax 83 98
Other assets (Note 8) 15 16
Total assets
Liabilities
Payables
279,647 195,916
Investment securities purchased — 341
Capital units redeemed — 260
Management fees 16 22
Accrued expenses 46 41
Other liabilities (Note 9) 10 10
Total liabilities 72 674
Net assets $ 279,575 $ 195,242
Total net assets per series (000s)
Series A $5,969 $6,320
Series F 1,227 862
Series O 272,379 188,060
Number of units outstanding (Note 3)
Series A 584,711 645,623
Series F 105,484 78,112
Series O 19,096,858 14,101,284
Net assets per unit — CAD
Series A $10.21 $9.79
Series F 11.63 11.03
Series O 14.26 13.34
Net assets per unit — USD
Series A $10.28 $9.61
Series F 11.71 10.82
Series O 14.36 13.09
Cost of investments held (000s) $235,296 $172,125
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin Flex Cap Growth Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $431; 2011 — $260) $ 2,599 $ 1,552
Interest 2 3
Total investment income
Expenses
2,601 1,555
Management fees (Note 4(a)) 152 169
Transfer agent fees (Note 4(c)) 100 115
Custodian fees — —
Legal fees 1 2
Audit fees 20 18
Unitholder reporting costs 9 6
Independent review committee fees 1 1
Registration fees 17 17
Other expenses (Note 7) 32 20
Total expenses 332 348
Expenses waived/paid by Manager (Note 6) (155) (126)
Net expenses 177 222
Net investment income (loss) 2,424 1,333
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(1,212) 5,958
gain (loss)
Net change in unrealized appreciation
(568) (410)
(depreciation) in value of investments 13,951 (14,202)
Transaction costs (Note 11) (232) (326)
Net gain (loss) on investments 11,939 (8,980)
Increase (decrease) in net assets from operations $ 14,363 $ (7,647)
Increase (decrease) in net assets from operations
per series (000s)
Series A $291 $(297)
Series F 58 (31)
Series O 14,014 (7,319)
Increase (decrease) in net assets from operations
per unit
Series A $0.47 $(0.41)
Series F 0.64 (0.37)
Series O 0.73 (0.45)
The accompanying notes are an integral part of these financial statements.
64 Franklin Templeton Investments Funds

Franklin Flex Cap Growth Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 14,363 $ (7,647) $ 291 $ (297) $ 58 $ (31)
Distributions to unitholders
From net investment income (601) (807) (13) (26) (3) (4)
From capital gains — — — — — —
From return of capital — — — — — —
(601) (807) (13) (26) (3) (4)
Capital unit transactions
Subscriptions 135,301 125,528 725 576 501 571
Reinvestments 601 806 13 26 3 4
Redemptions (65,331) (115,502) (1,367) (2,002) (194) (647)
70,571 10,832 (629) (1,400) 310 (72)
Increase (decrease) in net assets for the period 84,333 2,378 (351) (1,723) 365 (107)
Net assets — beginning of period 195,242 192,864 6,320 8,043 862 969
Net assets — end of period $ 279,575 $ 195,242 $ 5,969 $ 6,320 $ 1,227 $ 862
Series O
2012 2011
Increase (decrease) in net assets from operations $ 14,014 $ (7,319)
Distributions to unitholders
From net investment income (585) (777)
From capital gains — —
From return of capital — —
Capital unit transactions
(585) (777)
Subscriptions 134,075 124,381
Reinvestments 585 776
Redemptions (63,770) (112,853)
70,890 12,304
Increase (decrease) in net assets for the period 84,319 4,208
Net assets — beginning of period 188,060 183,852
Net assets — end of period $ 272,379 $ 188,060
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 65

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin High Income Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 95.33%
COMMON STOCKS: 0.24%
United States: 0.24%
NewPage Holdings Inc. ................... 4,800 $ 457 $ 457
Total Common Stocks: ............... 457 457
Average
Cost
Fair
Value
Shares
(000s) (000s)
PREFERRED STOCKS: 0.48%
GMAC Capital Trust I, Preferred ............ 34,600 $ 841 $ 915
Total Preferred Stocks: .............. 841 915
Principal Amount
in Currency
of Issue
BONDS: 94.61%
United States: 76.32%
ADS Waste Escrow Corp., Senior Note, 8.25%, 10/1/2020 ....................................... 1,000,000 USD 985 1,043
Alere Inc., Senior Note, 7.25%, 7/1/2018 .................................................... 1,200,000 USD 1,190 1,195
Allison Transmission Holdings Inc., Senior Note, 7.125%, 5/15/2019 .............................. 500,000 USD 474 530
Ally Financial Inc., Senior Note, 7.50%, 9/15/2020 ............................................. 1,000,000 USD 1,056 1,199
Aviv Healthcare Properties LP/Aviv Healthcare Capital Corp., Senior Note, 7.75%, 2/15/2019 ........... 1,100,000 USD 1,101 1,158
Bank of America Corp., Preferred, Subordinated Bond, M, 8.125% to 5/15/2018, Floating Rate Note
thereafter, Perpetual ................................................................... 2,000,000 USD 1,990 2,200
Bresnan Broadband Holdings LLC, Senior Note, 8.00%, 12/15/2018 ............................... 500,000 USD 502 536
Caesars Operating Escrow LLC/Corp., First Lien, 9.00%, 2/15/2020 ................................ 100,000 USD 97 99
Calpine Corp.
Senior Secured Note, 7.50%, 2/15/2021 ................................................... 890,000 USD 908 977
Senior Secured Note, 7.875%, 1/15/2023 .................................................. 454,000 USD 450 510
Calumet Specialty Products Partners LP/Finance Corp.
Senior Note, 9.375%, 5/1/2019 .......................................................... 600,000 USD 583 647
Senior Note, 9.375%, 5/1/2019 .......................................................... 400,000 USD 370 431
Senior Note, 9.625%, 8/1/2020 .......................................................... 200,000 USD 202 216
Carrizo Oil & Gas Inc.
Senior Note, 7.50%, 9/15/2020 .......................................................... 300,000 USD 296 306
Senior Note, 8.625%, 10/15/2018 ........................................................ 1,000,000 USD 1,006 1,073
CDW LLC/Finance Corp., Senior Note, 8.50%, 4/1/2019 ......................................... 1,600,000 USD 1,554 1,720
CenturyLink Inc., Senior Note, 5.80%, 3/15/2022 .............................................. 1,600,000 USD 1,588 1,678
Ceridian Corp., Secured Note, 8.875%, 7/15/2019 ............................................. 500,000 USD 520 539
Chaparral Energy Inc.
Senior Note, 8.25%, 9/1/2021 ........................................................... 600,000 USD 604 647
Senior Note, 9.875%, 10/1/2020 ......................................................... 500,000 USD 502 565
Chesapeake Energy Corp., Senior Note, 6.625%, 8/15/2020 ..................................... 2,300,000 USD 2,376 2,450
CHS/Community Health Systems Inc.
Senior Note, 7.125%, 7/15/2020 ......................................................... 100,000 USD 102 106
Senior Note, 8.00%, 11/15/2019 ......................................................... 1,500,000 USD 1,547 1,613
Senior Secured Note, 5.125%, 8/15/2018 .................................................. 600,000 USD 597 621
CIT Group Inc.
Senior Note, 5.00%, 8/15/2022 .......................................................... 900,000 USD 904 952
Senior Note, 5.375%, 5/15/2020 ......................................................... 700,000 USD 691 760
Senior Note, 6.625%, 4/1/2018 .......................................................... 1,000,000 USD 1,016 1,122
Clayton Williams Energy Inc., Senior Note, 7.75%, 4/1/2019 ..................................... 1,200,000 USD 1,131 1,187
Clear Channel Communications Inc., Senior Note, 9.00%, 3/1/2021 ............................... 1,700,000 USD 1,650 1,507
Clear Channel Worldwide Holdings Inc.
Senior Note, 6.50%, 11/15/2022 ......................................................... 600,000 USD 594 618
Senior Subordinate Note, 7.625%, 3/15/2020 ............................................... 700,000 USD 691 700
The accompanying notes are an integral part of these financial statements.
66 Franklin Templeton Investments Funds

Franklin High Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 76.32% (Continued)
ClubCorp Club Operations Inc., Senior Note, 10.00%, 12/1/2018 ............................... 1,100,000 USD $ 1,068 $ 1,216
CommScope Inc., Senior Note, 8.25%, 1/15/2019 ...........................................
CONSOL Energy Inc.
1,200,000 USD 1,199 1,305
Senior Note, 8.00%, 4/1/2017 ......................................................... 700,000 USD 724 753
Senior Note, 8.25%, 4/1/2020 ......................................................... 900,000 USD 943 968
Cricket Communications Inc., Senior Note, 7.75%, 10/15/2020 ................................. 1,600,000 USD 1,569 1,621
Crosstex Energy LP/Crosstex Energy Finance Corp., Senior Note, 8.875%, 2/15/2018 ............... 1,400,000 USD 1,455 1,502
CSC Holdings Inc., Senior Debenture, 7.625%, 7/15/2018 ..................................... 1,300,000 USD 1,327 1,491
Cumulus Media Holdings Inc., Second Lien Term Loan, Floating Rate Note, 9/16/2019 .............. 500,000 USD 464 510
CyrusOne LP/Finance Corp., Senior Note, 6.375%, 11/15/2022 ................................. 400,000 USD 398 414
DaVita HealthCare Partners Inc., Senior Note, 5.75%, 8/15/2022 ............................... 700,000 USD 693 733
Del Monte Corp., Senior Note, 7.625%, 2/15/2019 ...........................................
DISH DBS Corp.
2,000,000 USD 1,963 2,071
Senior Note, 5.875%, 7/15/2022 ....................................................... 300,000 USD 305 320
Senior Note, 7.125%, 2/1/2016 ........................................................
DJO Finance LLC/DJO Finance Corp.
2,000,000 USD 2,107 2,225
Secured Note, 8.75%, 3/15/2018 ....................................................... 300,000 USD 302 326
Senior Note, 7.75%, 4/15/2018 ........................................................ 500,000 USD 485 478
Drill Rigs Holdings Inc., Secured Note, 6.50%, 10/1/2017 ..................................... 700,000 USD 677 692
E*TRADE Financial Corp., Senior Note, 6.375%, 11/15/2019 ..................................
Eagle Rock Energy Partners LP/Finance Corp.
800,000 USD 792 814
Senior Note, 8.375%, 6/1/2019 ........................................................ 900,000 USD 887 912
Senior Note, 8.375%, 6/1/2019 ........................................................ 500,000 USD 504 507
El Paso Corp., Senior Note, 7.00%, 6/15/2017 .............................................. 1,000,000 USD 1,051 1,134
Emergency Medical Services Corp., Senior Note, 8.125%, 6/1/2019 ............................. 1,200,000 USD 1,196 1,309
Endo Health Solutions Inc., Senior Note, 7.00%, 7/15/2019 .................................... 800,000 USD 820 847
Energy Transfer Equity LP, Senior Note, 7.50%, 10/15/2020 ...................................
Enterprise Products Operating LLC, Junior Subordinated Note, 7.034% to 1/15/2018, Floating Rate Note
1,500,000 USD 1,610 1,721
thereafter, 1/15/2068 ................................................................ 900,000 USD 779 1,024
EPL Oil & Gas Inc., Senior Note, 8.25%, 2/15/2018 .......................................... 800,000 USD 785 816
Euramax International Inc., Senior Secured Note, 9.50%, 4/1/2016 .............................. 800,000 USD 783 741
ExamWorks Group Inc., Senior Note, 9.00%, 7/15/2019 ....................................... 700,000 USD 666 744
Exopack Holding Corp., Senior Note, 10.00%, 6/1/2018 .......................................
First Data Corp.
900,000 USD 893 809
Senior Bond, 12.625%, 1/15/2021 ...................................................... 600,000 USD 558 627
Senior Note, 9.875%, 9/24/2015 ....................................................... 51,000 USD 42 52
Senior Note, 9.875%, 9/24/2015 ....................................................... 41,000 USD 39 41
Senior Secured Bond, 8.25%, 1/15/2021 ................................................ 1,000,000 USD 910 993
Senior Secured Bond, 8.25%, 1/15/2021 ................................................ 403,000 USD 387 400
Fontainebleau Las Vegas, 11.00%, 6/15/2015 .............................................. 2,000,000 USD 590 1
Ford Motor Credit Co. LLC, Senior Note, 8.125%, 1/15/2020 ................................... 700,000 USD 716 890
Forest City Enterprises Inc., Senior Note, 7.625%, 6/1/2015
Freescale Semiconductor Inc.
................................... 204,000 USD 182 203
Senior Note, 8.05%, 2/1/2020 ......................................................... 700,000 USD 675 692
Senior Note, 10.75%, 8/1/2020 ........................................................ 690,000 USD 714 735
Senior Secured Note, 9.25%, 4/15/2018 ................................................. 300,000 USD 318 326
Frontier Communications Corp., Senior Note, 8.75%, 4/15/2022 ................................ 1,600,000 USD 1,623 1,843
GMAC Inc., Subordinated Note, 8.00%, 12/31/2018 ......................................... 500,000 USD 484 581
Goodrich Petroleum Corp., Senior Note, 8.875%, 3/15/2019 ................................... 1,200,000 USD 1,164 1,138
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 67
Average
Cost
Fair
Value

Franklin High Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 76.32% (Continued)
Halcon Resources Corp., Senior Note, 8.875%, 5/15/2021 .................................... 600,000 USD $ 590 $ 632
Harrah’s Operating Co. Inc., Senior Secured Note, 11.25%, 6/1/2017 ............................ 2,000,000 USD 2,152 2,128
HCA Holdings Inc., Senior Note, 7.75%, 5/15/2021 ..........................................
HCA Inc.
1,000,000 USD 1,000 1,078
Senior Note, 5.875%, 5/1/2023 ........................................................ 1,200,000 USD 1,181 1,234
Senior Secured Note, 5.875%, 3/15/2022 ................................................ 1,000,000 USD 1,007 1,080
Senior Secured Note, 7.875%, 2/15/2020 ................................................ 500,000 USD 530 553
HDTFS Inc., Senior Note, 6.25%, 10/15/2022 ...............................................
Hertz Corp.
100,000 USD 98 106
Senior Note, 6.75%, 4/15/2019 ........................................................ 500,000 USD 499 542
Senior Note, 6.75%, 4/15/2019 ........................................................ 200,000 USD 207 217
Senior Note, 7.50%, 10/15/2018 ....................................................... 1,000,000 USD 1,029 1,098
Igloo Holdings Corp., Senior Note, Payment–In–Kind, 8.25%, 12/15/2017 ........................ 300,000 USD 292 294
International Automotive Components Group SL, Senior Secured Note, 9.125%, 6/1/2018 ............ 800,000 USD 772 741
International Lease Finance Corp., Senior Note, R, 5.65%, 6/1/2014 ............................. 1,500,000 USD 1,398 1,550
InVentiv Health Inc., Senior Note, 9.00%, 1/15/2018 .........................................
inVentiv Health Inc.
500,000 USD 492 502
Senior Note, 10.00%, 8/15/2018 ....................................................... 100,000 USD 92 86
Senior Note, 10.00%, 8/15/2018 ....................................................... 1,000,000 USD 1,023 857
Jaguar Holding Co. I, Senior Note, Payment–In–Kind, 9.375%, 10/15/2017 ....................... 800,000 USD 774 834
Jaguar Holding Co. II/Merger Sub Inc., Senior Note, 9.50%, 12/1/2019 ........................... 300,000 USD 307 338
JBS USA LLC/Finance Inc., Senior Note, 8.25%, 2/1/2020 ..................................... 1,600,000 USD 1,599 1,685
KB Home, Senior Bond, 7.50%, 9/15/2022 ................................................. 800,000 USD 820 866
Kodiak Oil & Gas Corp., Senior Note, 8.125%, 12/1/2019 ......................................
Linn Energy LLC/Finance Corp.
700,000 USD 723 767
Senior Note, 7.75%, 2/1/2021 ......................................................... 500,000 USD 509 529
Senior Note, 8.625%, 4/15/2020 ....................................................... 1,300,000 USD 1,311 1,407
M/I Homes Inc., Senior Note, 8.625%, 11/15/2018 .......................................... 700,000 USD 703 765
MacDermid Inc., Senior Subordinate Note, 9.50%, 4/15/2017 .................................. 1,000,000 USD 830 1,034
Martin Midstream Partners LP, Senior Note, 8.875%, 4/1/2018 ................................. 892,000 USD 899 944
Media General Inc., Senior Secured Note, 11.75%, 2/15/2017 ................................. 700,000 USD 726 803
Meritor Inc., Senior Note, 10.625%, 3/15/2018 ..............................................
MGM Resorts International
1,000,000 USD 1,027 1,035
Senior Note, 6.625%, 7/15/2015 ....................................................... 1,700,000 USD 1,400 1,811
Senior Note, 6.625%, 12/15/2021 ...................................................... 300,000 USD 298 298
Senior Note, 6.75%, 10/1/2020 ........................................................
Michaels Stores Inc.
300,000 USD 292 304
Senior Note, 7.75%, 11/1/2018 ........................................................ 800,000 USD 830 872
Senior Note, 7.75%, 11/1/2018 ........................................................ 700,000 USD 699 763
Navistar Inc., Tranche B Term Loan, Floating Rate Note, 8/17/2017 ............................. 600,000 USD 587 598
Navistar International Corp., Senior Note, 8.25%, 11/1/2021 ................................... 600,000 USD 561 575
Neuberger Berman Group LLC/Finance Corp., Senior Note, 5.875%, 3/15/2022 ................... 600,000 USD 594 632
Nuveen Investments Inc., Senior Note, 9.50%, 10/15/2020 ....................................
Offshore Group Investment Ltd.
900,000 USD 871 889
First Lien, 7.50%, 11/1/2019 .......................................................... 1,100,000 USD 1,079 1,104
Senior Secured Note, 11.50%, 8/1/2015 ................................................. 676,000 USD 737 732
Olin Corp., Senior Bond, 5.50%, 8/15/2022 ................................................ 1,000,000 USD 991 1,035
Par Pharmaceutical Companies Inc., Senior Note, 7.375%, 10/15/2020 .......................... 1,900,000 USD 1,851 1,878
PBF Holding Co. LLC, Senior Secured Note, 8.25%, 2/15/2020 ................................. 1,100,000 USD 1,091 1,177
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
68 Franklin Templeton Investments Funds

Franklin High Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 76.32% (Continued)
Peabody Energy Corp.
Senior Note, 6.00%, 11/15/2018 ....................................................... 200,000 USD $ 203 $ 211
Senior Note, 6.25%, 11/15/2021 ....................................................... 300,000 USD 297 317
Senior Note, 6.50%, 9/15/2020 ........................................................ 800,000 USD 838 852
Senior Note, 7.375%, 11/1/2016 ....................................................... 500,000 USD 550 569
Penn Virginia Resource Partners LP/Finance Corp. II, Senior Note, 8.375%, 6/1/2020 ...............
Pinnacle Foods Finance LLC/Pinnacle Foods Finance Corp.
700,000 USD 703 749
Senior Note, 8.25%, 9/1/2017 ......................................................... 300,000 USD 320 317
Senior Note, 9.25%, 4/1/2015 .........................................................
Plains Exploration & Production Co.
248,000 USD 262 250
Senior Note, 6.625%, 5/1/2021 ........................................................ 700,000 USD 708 766
Senior Note, 6.875%, 2/15/2023 ....................................................... 500,000 USD 495 567
Senior Note, 7.625%, 6/1/2018 ........................................................
QEP Resources Inc.
1,000,000 USD 966 1,045
Senior Note, 5.25%, 5/1/2023 ......................................................... 400,000 USD 396 425
Senior Note, 5.375%, 10/1/2022 ....................................................... 800,000 USD 798 852
QR Energy LP/QRE Finance, Senior Note, 9.25%, 8/1/2020 ....................................
Quicksilver Resources Inc.
1,000,000 USD 996 1,043
Senior Note, 8.25%, 8/1/2015 ......................................................... 500,000 USD 472 459
Senior Note, 9.125%, 8/15/2019 ....................................................... 1,000,000 USD 1,056 884
Radio One Inc., Senior Subordinate Note, Payment–In–Kind, 12.50%, 5/24/2016 .................. 838,255 USD 809 747
Rain CII Carbon LLC/Corp., Second Lien, 8.25%, 1/15/2021 ................................... 400,000 USD 395 406
Regions Bank, Subordinated Note, 7.50%, 5/15/2018 ........................................
Reynolds Group Issuer Inc./LLC/SA
1,000,000 USD 996 1,198
First Lien, 5.75%, 10/15/2020 ........................................................... 300,000 USD 292 308
Senior Note, 8.50%, 5/15/2018 ........................................................ 2,000,000 USD 2,047 2,036
Senior Note, 9.00%, 4/15/2019 ........................................................ 200,000 USD 203 207
Senior Secured Note, 7.125%, 4/15/2019 ................................................
Rite Aid Corp.
500,000 USD 497 534
Senior Secured Note, 8.00%, 8/15/2020 ................................................. 500,000 USD 516 567
Senior Secured Note, 9.75%, 6/12/2016 ................................................. 1,000,000 USD 1,102 1,075
Samson Investment Co., Senior Note, 9.75%, 2/15/2020 ......................................
SandRidge Energy Inc.
1,500,000 USD 1,495 1,576
Senior Note, 7.50%, 2/15/2023 ........................................................ 100,000 USD 99 106
Senior Note, 8.00%, 6/1/2018 ......................................................... 1,500,000 USD 1,437 1,579
Senior Note, 8.125%, 10/15/2022 ......................................................
Sealed Air Corp.
200,000 USD 198 218
Senior Note, 6.50%, 12/1/2020 ........................................................ 200,000 USD 200 215
Senior Note, 8.125%, 9/15/2019 ....................................................... 400,000 USD 396 447
Senior Note, 8.375%, 9/15/2021 ....................................................... 300,000 USD 310 340
Shea Homes LP/Funding Corp., Senior Secured Note, 8.625%, 5/15/2019 ........................ 700,000 USD 670 768
Shingle Springs Tribal Gaming Authority, Senior Note, 9.375%, 6/15/2015 ........................
Sitel LLC/Finance Corp.
800,000 USD 638 775
Senior Note, 11.50%, 4/1/2018 ........................................................ 1,000,000 USD 996 700
Senior Secured Note, 11.00%, 8/1/2017 .................................................
Sprint Nextel Corp.
100,000 USD 96 101
Senior Note, 7.00%, 3/1/2020 ......................................................... 400,000 USD 398 462
Senior Note, 8.375%, 8/15/2017 ....................................................... 1,500,000 USD 1,537 1,732
Senior Note, 9.00%, 11/15/2018 ....................................................... 1,200,000 USD 1,242 1,472
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 69
Average
Cost
Fair
Value

Franklin High Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 76.32% (Continued)
Sterling International Inc., Senior Note, 11.00%, 10/1/2019 .................................. 500,000 USD $ 491 $ 507
Taylor Morrison Communities Inc./Monarch Communities Inc, Senior Note, 7.75%, 4/15/2020 ....... 600,000 USD 600 632
Taylor Morrison Communities Inc./Monarch Communities Inc., Senior Note, 7.75%, 4/15/2020 ...... 300,000 USD 313 316
Terex Corp., Senior Note, 6.00%, 5/15/2021 .............................................. 700,000 USD 699 732
Texas Competitive Electric Holdings Co. LLC, 2017 Term Loan, Floating Rate Note, 10/10/2017 ......
Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc.,
1,424,041 USD 1,162 947
Senior Secured Note, 11.50%, 10/1/2020 ...............................................
United Rentals North America Inc.
1,400,000 USD 1,140 1,088
Senior Bond, 6.125%, 6/15/2023 ..................................................... 200,000 USD 199 210
Senior Subordinate Note, 8.375%, 9/15/2020
Univision Communications Inc.
........................................... 1,500,000 USD 1,489 1,650
Initial Term Loan, Floating Rate Note, 9/29/2014 ......................................... 60,692 USD 48 60
Secured Bond, 6.75%, 9/15/2022 ..................................................... 900,000 USD 893 923
Senior Secured Note, 7.875%, 11/1/2020 ............................................... 500,000 USD 512 538
UR Financing Escrow Corp., Senior Note, 7.625%, 4/15/2022 ................................ 200,000 USD 201 222
Vanguard Health Systems Inc., Senior Note, Zero Coupon, 2/1/2016 ........................... 48,000 USD 36 36
Visant Corp., Senior Note, 10.00%, 10/1/2017 ............................................. 1,500,000 USD 1,549 1,337
VPI Escrow Corp., Senior Note, 6.375%, 10/15/2020 ........................................
W&T Offshore Inc.
1,400,000 USD 1,367 1,491
Senior Note, 8.50%, 6/15/2019 ....................................................... 700,000 USD 735 747
Senior Note, 8.50%, 6/15/2019 ....................................................... 700,000 USD 694 747
West Corp., Senior Note, 7.875%, 1/15/2019 .............................................. 1,500,000 USD 1,513 1,542
WMG Acquisition Corp., Secured Note, 6.00%, 1/15/2021 ................................... 1,800,000 USD 1,789 1,886
Average
Cost
Fair
Value
137,654 144,289
United Kingdom: 3.83%
Algeco Scotsman Global Finance PLC, Secured Note, 8.50%, 10/15/2018 ....................... 1,400,000 USD 1,378 1,436
CEVA Group PLC
Senior Secured Note, 8.375%, 12/1/2017 ............................................... 1,200,000 USD 1,192 1,181
Senior Secured Note, 11.625%, 10/1/2016 ............................................. 300,000 USD 319 306
Expro Finance Luxembourg, Senior Secured Note, 8.50%, 12/15/2016 ......................... 1,384,000 USD 1,385 1,436
Ineos Finance PLC
Senior Secured Note, 7.50%, 5/1/2020 ................................................. 600,000 USD 590 624
Senior Secured Note, 8.375%, 2/15/2019 ............................................... 200,000 USD 199 214
Senior Secured Note, 9.00%, 5/15/2015 ................................................ 100,000 USD 103 105
Ineos Group Holdings Ltd., Senior Secured Note, 8.50%, 2/15/2016 ........................... 800,000 USD 429 791
Royal Bank of Scotland Group PLC, Subordinated Note, 6.125%, 12/15/2022 .................... 1,100,000 USD 1,092 1,149
6,687 7,242
Canada: 2.95%
CHC Helicopter SA, Senior Secured Note, First Lien, 9.25%, 10/15/2020 ........................ 1,800,000 USD 1,826 1,882
Eldorado Gold Corp., Senior Note, 6.125%, 12/15/2020 ..................................... 400,000 USD 395 404
Inmet Mining Corp.
Senior Note, 7.50%, 6/1/2021 ........................................................ 100,000 USD 98 103
Senior Note, 8.75%, 6/1/2020 ........................................................ 1,400,000 USD 1,396 1,519
Novelis Inc., Senior Note, 8.75%, 12/15/2020 ............................................. 1,500,000 USD 1,530 1,661
5,245 5,569
The accompanying notes are an integral part of these financial statements.
70 Franklin Templeton Investments Funds

Franklin High Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Luxembourg: 2.46%
ArcelorMittal, Senior Note, 6.00%, 3/1/2021 ................................................ 600,000 USD $ 562 $ 594
Ardagh Packaging Finance PLC, Senior Note, 9.125%, 10/15/2020 .............................
Intelsat Jackson Holdings SA
600,000 USD 636 650
Senior Note, 6.625%, 12/15/2022 ...................................................... 800,000 USD 780 818
Senior Note, 7.25%, 10/15/2020 ....................................................... 700,000 USD 707 759
Senior Note, 7.25%, 10/15/2020 ....................................................... 700,000 USD 715 756
Senior Note, 7.50%, 4/1/2021 ......................................................... 500,000 USD 490 547
Intelsat Luxembourg SA, Senior Note, 11.25%, 2/4/2017 ...................................... 200,000 USD 192 210
Silver II Borrower/US Hold, Senior Note, 7.75%, 12/15/2020 ................................... 300,000 USD 298 309
Average
Cost
Fair
Value
4,380 4,643
Netherlands: 1.28%
Intergen NV, Senior Secured Note, 9.00%, 6/30/2017 ........................................ 1,500,000 USD 1,595 1,341
UPCB Finance VI Ltd., Senior Secured Note, 6.875%, 1/15/2022 ............................... 1,000,000 USD 1,005 1,076
2,600 2,417
Mexico: 1.15%
Cemex Finance LLC, Senior Secured Note, 9.375%, 10/12/2022 ................................ 200,000 USD 195 223
Cemex SAB de CV, Senior Secured Note, 9.00%, 1/11/2018 ................................... 1,800,000 USD 1,691 1,953
1,886 2,176
Australia: 1.09%
FMG Resources August 2006 Pty. Ltd.
Senior Note, 6.875%, 2/1/2018 ........................................................ 1,600,000 USD 1,585 1,641
Senior Note, 6.875%, 4/1/2022 ........................................................ 200,000 USD 183 203
Senior Note, 8.25%, 11/1/2019 ........................................................ 200,000 USD 203 212
1,971 2,056
Sweden: 1.02%
Perstorp Holding AB, First Lien, 8.75%, 5/15/2017 ........................................... 1,900,000 USD 1,901 1,937
Italy: 0.90%
Wind Acquisition Finance SA, Senior Secured Note, 11.75%, 7/15/2017 ......................... 1,000,000 USD 982 1,035
Wind Acquisition Holdings Finance SA, Senior Secured Note, Payment–In–Kind,
12.801%, 7/15/2017 ................................................................. 543,630 EUR 765 662
1,747 1,697
France: 0.88%
Compagnie Generale de Geophysique–Veritas
Senior Note, 7.75%, 5/15/2017 ........................................................ 1,000,000 USD 1,013 1,033
Senior Note, 9.50%, 5/15/2016 ........................................................ 600,000 USD 657 639
1,670 1,672
Spain: 0.75%
Abengoa Finance SAU, Senior Note, 8.875%, 11/1/2017 ...................................... 1,500,000 USD 1,521 1,408
Jamaica: 0.63%
Digicel Group Ltd., Senior Note, 8.25%, 9/30/2020 ........................................... 1,100,000 USD 1,076 1,192
Germany: 0.48%
Kinove German Bondco GmbH, Senior Secured Note, 9.625%, 6/15/2018 ........................ 850,000 USD 864 914
Japan: 0.47%
eAccess Ltd., Senior Note, 8.25%, 4/1/2018 ................................................ 800,000 USD 781 897
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 71

Franklin High Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Russia: 0.23%
CEDC Finance Corp. International Inc., Senior Secured Note, 9.125%, 12/1/2016 ................. 700,000 USD $ 738 $ 432
Croatia: 0.17%
Agrokor DD, Senior Note, 8.875%, 2/1/2020 .............................................. 300,000 USD 295 324
Total Bonds: ........................................................................ 171,016 178,865
Total Long-Term Investments: ........................................................... 172,314 180,237
Transaction costs (Note 2) .............................................................. (2,385) —
TOTAL INVESTMENTS: 95.33% ......................................................... $169,929 180,237
NET UNREALIZED LOSS ON DERIVATIVES: (0.53%) ....................................... (1,005)
OTHER ASSETS, less liabilities: 5.20% ................................................... 9,830
TOTAL NET ASSETS: 100.00% ......................................................... $189,062
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Average
Cost
Contract
Price
Fair
Value
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ............... A+ February 14, 2013 54,237 USD $53,923 54,300 CAD $54,300 1.0012 $ 377
Total Number of Contracts ...........1 $ 377
DEUTSCHE BANK AG ............... A+ December 18, 2013 400 EUR 531 528 USD 529 1.3207 (2)
JPMORGAN CHASE BANK, N.A. ....... A+ January 16, 2013 78,283 USD 77,781 76,800 CAD 76,800 0.9811 (981)
THE BANK OF NEW YORK MELLON .... AA- March 20, 2013 49,349 USD 49,099 48,700 CAD 48,700 0.9868 (399)
Total Number of Contracts ...........3 $(1,382)
Net Unrealized Loss ................. $ (1,005)
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
BBB ................................ 1.45 1.81
BB ................................. 25.51 23.48
B................................... 52.88 51.27
CCC ................................ 14.77 16.90
CC.................................. — 0.12
D................................... — 0.09
Not Rated ............................ — 0.55
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
The accompanying notes are an integral part of these financial statements.
72 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
Franklin High Income Fund
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 180,237 $ 159,950
Foreign
Receivables
5,493 53
Due from broker 1,115 —
Investment securities sold 7 124
Capital units sold 107 19
Interest 3,313 3,073
Unrealized gain on derivatives 377 1,066
Other assets (Note 8) 5 19
Total assets
Liabilities
Payables
190,654 164,304
Capital units redeemed 16 36
Management fees 103 88
Accrued expenses 70 81
Unrealized loss on derivatives 1,382 136
Other liabilities (Note 9) 21 —
Total liabilities 1,592 341
Net assets $ 189,062 $ 163,963
Total net assets per series (000s)
Series A $62,146 $48,488
Series F 4,773 3,575
Series I 858 733
Series O 121,285 111,167
Number of units outstanding (Note 3)
Series A 9,496,633 7,589,415
Series F 658,125 511,184
Series I 77,933 68,777
Series O 14,739,605 14,189,533
Net assets per unit — CAD
Series A $6.54 $6.39
Series F 7.25 6.99
Series I 11.01 10.66
Series O 8.23 7.84
Net assets per unit — USD
Series A $6.58 $6.27
Series F 7.30 6.86
Series I 11.09 10.46
Series O 8.29 7.69
Cost of investments held (000s) $169,929 $159,536
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED (Signed) GHION SHEWANGZAW
Director Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $0; 2011 — $1)
Interest (net of foreign taxes withheld (000s) —
$ 70 $ 53
2012 — $26; 2011 — $64) 13,680 12,843
Total investment income
Expenses
13,750 12,896
Management fees (Note 4(a)) 1,123 1,104
Transfer agent fees (Note 4(c)) 277 301
Custodian fees 1 1
Legal fees 7 2
Audit fees 24 22
Unitholder reporting costs 5 15
Independent review committee fees 1 1
Registration fees 19 19
Other expenses (Note 7) 80 63
Total expenses 1,537 1,528
Expenses waived/paid by Manager (Note 6) (85) (95)
Net expenses 1,452 1,433
Net investment income (loss) 12,298 11,463
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange gain
16 6,810
(loss)
Net change in unrealized appreciation (depreciation)
6,950 8,250
in value of investments and derivatives 7,959 (13,661)
Transaction costs (Note 11) (899) (917)
Net gain (loss) on investments 14,026 482
Increase (decrease) in net assets from operations $ 26,324 $ 11,945
Increase (decrease) in net assets from operations
per series (000s)
Series A $7,019 $1,936
Series F 582 132
Series I 112 23
Series O 18,611 9,854
Increase (decrease) in net assets from operations
per unit
Series A $0.84 $0.23
Series F 1.02 0.26
Series I 1.53 0.91
Series O 1.26 0.75
Franklin Templeton Investments Funds 73

Franklin High Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011 (in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 26,324 $ 11,945 $ 7,019 $ 1,936 $ 582 $ 132
Distributions to unitholders
From net investment income (12,350) (11,797) (3,737) (3,947) (282) (271)
From capital gains (7,059) — (2,333) — (179) —
From return of capital — — — — — —
(19,409) (11,797) (6,070) (3,947) (461) (271)
Capital unit transactions
Subscriptions 32,224 64,227 21,459 11,700 1,908 1,372
Reinvestments 17,565 10,586 4,358 2,830 348 199
Redemptions (31,605) (203,237) (13,108) (34,366) (1,179) (1,278)
18,184 (128,424) 12,709 (19,836) 1,077 293
Increase (decrease) in net assets for the period 25,099 (128,276) 13,658 (21,847) 1,198 154
Net assets — beginning of period 163,963 292,239 48,488 70,335 3,575 3,421
Net assets — end of period $ 189,062 $ 163,963 $ 62,146 $ 48,488 $ 4,773 $ 3,575
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 112 $ 23 $ 18,611 $ 9,854
Distributions to unitholders
From net investment income (55) (21) (8,276) (7,558)
From capital gains (32) — (4,515) —
From return of capital — — — —
(87) (21) (12,791) (7,558)
Capital unit transactions
Subscriptions 281 705 8,576 50,450
Reinvestments 87 20 12,772 7,537
Redemptions (268) — (17,050) (167,593)
100 725 4,298 (109,606)
Increase (decrease) in net assets for the period 125 727 10,118 (107,310)
Net assets — beginning of period 733 6 111,167 218,477
Net assets — end of period $ 858 $ 733 $ 121,285 $ 111,167
The accompanying notes are an integral part of these financial statements.
74 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin Strategic Income Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
COMMON STOCKS: 0.53%
United States: 0.53%
Comfort Co. Inc., Contingent
Distribution .................... 6,393 $ — $ —
MGM Holdings Inc., A .............. 64,696 1,737 2,426
NewPage Holdings Inc. ............. 4,800 457 457
2,194 2,883
Total Common Stocks: .............. 2,194 2,883
Average
Cost
Fair
Value
Shares
(000s) (000s)
PREFERRED STOCKS: 0.07%
United States: 0.07%
GMAC Capital Trust I, Preferred ...... 15,400 $ 375 $ 407
Total Preferred Stocks: .............. 375 407
Principal Amount
in Currency
of Issue
BONDS: 86.94%
United States: 52.40%
AbbVie Inc., Senior Note, 2.90%, 11/6/2022 ..................................................... 700,000 USD 693 707
AdvancePierre Foods Inc.
2nd Lien Term Loan, Floating Rate Note, 10/10/2017 ............................................ 738,598 USD 716 746
Loans, Floating Rate Note, 7/10/2017 ......................................................... 452,791 USD 442 455
Allison Transmission Inc., Term B–3 Loan, Floating Rate Note, 8/23/2019 .............................. 375,615 USD 368 376
Ally Financial Inc., Senior Note, 7.50%, 9/15/2020 ................................................ 1,000,000 USD 1,023 1,199
American Rock Salt Co. LLC, Initial Loan, Floating Rate Note, 4/25/2017 ............................... 781,619 USD 756 763
Ameristar Casinos Inc., B Term Loan, Floating Rate Note, 4/14/2018 .................................. 661,856 USD 639 661
Apache Corp., Senior Bond, 2.625%, 1/15/2023 .................................................. 2,000,000 USD 1,973 1,980
ARAMARK Corp.
Extended United States Term Loan B–3, Floating Rate Note, 7/26/2016 .............................. 410,337 USD 427 409
Synthetic L/C–3, Floating Rate Note, 7/26/2016 ................................................. 33,292 USD 35 33
Aramark Corp., United States Term C Loan, Floating Rate Note, 7/26/2016 ............................. 393,000 USD 386 393
Arch Coal Inc., Term Loans, 5.75%, 5/16/2018 ................................................... 1,967,407 USD 1,962 1,972
Ardent Medical Services Inc., Second Lien Term Loan, Floating Rate Note, 1/2/2019 ..................... 496,455 USD 488 502
Asurion LLC
Amortizing Term Loans (B1), Floating Rate Note, 7/23/2017 ....................................... 306,513 USD 307 306
Second Lien Term Loan, Floating Rate Note, 5/24/2019 .......................................... 1,061,501 USD 1,056 1,084
Term Loan (TLB), Floating Rate Note, 5/24/2018 ................................................ 214,560 USD 215 215
ATP Oil & Gas Corp.
Additional Name Loans, Floating Rate Note, 3/1/2014 ............................................ 5,129 USD 4 4
Debtor–In–Possession, Floating Rate Note, 3/1/2014 ............................................. 44,916 USD 39 38
Refinancing Loan, Floating Rate Note, 3/1/2014 ................................................. 76,827 USD 67 65
August U.S. Holding Co. Inc., United States Second Lien, Floating Rate Note, 4/27/2019 .................. 411,832 USD 410 411
Avis Budget Car Rental LLC, Tranche C Term Loan, Floating Rate Note, 3/15/2019 ....................... 1,305,788 USD 1,288 1,307
Banc of America Commercial Mortgage Inc., 2006–4, AJ, 5.695%, 7/10/2046 .......................... 1,533,000 USD 1,387 1,447
Bank of America Corp.
Preferred, Subordinated Bond, M, 8.125% to 5/15/2018, Floating Rate Note thereafter, Perpetual ......... 1,500,000 USD 1,446 1,650
Senior Note, 5.65%, 5/1/2018 ............................................................... 1,000,000 USD 997 1,155
Bausch & Lomb Inc., Parent Term Loan, 5.25%, 5/18/2019 ......................................... 2,039,424 USD 2,040 2,042
Bear Stearns Commercial Mortgage Securities Inc.
2006–PW11, AJ, Floating Rate Note, 3/11/2039 ................................................ 500,000 USD 474 507
2006–PW13, AJ, 5.611%, 9/11/2041 ......................................................... 900,000 USD 764 871
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 75

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
BJ’s Wholesale Club Inc.
Initial Loan, Floating Rate Note, 9/26/2019 ..................................................... 2,768,314 USD $ 2,679 $ 2,785
Second Lien Term Loan, Floating Rate Note, 3/26/2020 .......................................... 592,377 USD 573 604
Brock Holdings III Inc., Second Lien Term Loan, Floating Rate Note, 3/16/2018 ......................... 510,230 USD 488 509
Burger King Corp., Tranche B Term Loan, Floating Rate Note, 9/28/2019 ..............................
California State GO
302,341 USD 297 302
Refunding, 5.00%, 4/1/2038 ................................................................ 3,000,000 USD 3,074 3,299
Various Purpose, 6.00%, 11/1/2039 .......................................................... 130,000 USD 129 157
Various Purpose, 5.25%, 11/1/2040 .......................................................... 450,000 USD 402 520
Various Purpose, 7.60%, 11/1/2040 .......................................................... 1,000,000 USD 1,031 1,451
Various Purpose, Refunding, NATL Insured, 4.50%, 12/1/2032 .................................... 240,000 USD 192 257
Various Purpose, Refunding, Series 1, AGMC Insured, 4.75%, 9/1/2031 .............................
Calpine Corp.
235,000 USD 197 251
Senior Secured Note, 7.50%, 2/15/2021 ....................................................... 652,000 USD 679 716
Senior Secured Note, 7.875%, 1/15/2023 ..................................................... 708,000 USD 712 795
Capital One Capital VI, Preferred, Junior Subordinated Bond, 8.875%, 5/15/2040 ........................ 500,000 USD 540 497
Capsugel Financeco SCA, Senior Note, 9.875%, 8/1/2019 .......................................... 700,000 EUR 969 1,032
CC Holdings GS V LLC, Senior Secured Bond, 3.849%, 4/15/2023 .................................... 1,000,000 USD 984 1,009
CDW LLC/Finance Corp., Senior Note, 8.50%, 4/1/2019 ............................................ 1,700,000 USD 1,653 1,828
CenturyLink Inc., Senior Note, 6.00%, 4/1/2017 .................................................. 1,000,000 USD 1,017 1,100
Ceridian Corp., Secured Note, 8.875%, 7/15/2019 ................................................
Chaparral Energy Inc.
500,000 USD 520 539
Senior Note, 9.875%, 10/1/2020 ............................................................. 500,000 USD 502 565
Senior Note, 8.25%, 9/1/2021 ............................................................... 800,000 USD 796 862
Senior Note, 7.625%, 11/15/2022 ............................................................
Chesapeake Energy Corp.
100,000 USD 99 104
Senior Note, 6.625%, 8/15/2020 ............................................................. 1,700,000 USD 1,744 1,811
Senior Note, 6.125%, 2/15/2021 .............................................................
CHS/Community Health Systems Inc.
800,000 USD 796 824
Senior Note, 8.00%, 11/15/2019 ............................................................. 900,000 USD 918 968
Senior Note, 7.125%, 7/15/2020 ............................................................. 300,000 USD 305 318
Senior Secured Note, 5.125%, 8/15/2018 ..................................................... 500,000 USD 497 518
Cinemark USA Inc., Term Loan, Floating Rate Note, 12/13/2019 .....................................
CIT Group Inc.
692,952 USD 698 689
Senior Note, 6.625%, 4/1/2018 .............................................................. 200,000 USD 195 224
Senior Note, 5.375%, 5/15/2020 ............................................................. 700,000 USD 690 760
Senior Note, 5.00%, 8/15/2022 ..............................................................
Citigroup Commercial Mortgage Trust
700,000 USD 703 741
2006–C5, AJ, 5.482%, 10/15/2049 ........................................................... 1,600,000 USD 1,448 1,513
2007–C6, AM, Floating Rate Note, 6/10/2017 ..................................................
Citigroup Inc.
4,808,000 USD 4,662 5,416
Senior Note, 6.125%, 11/21/2017 ............................................................ 600,000 USD 589 709
Senior Note, 5.375%, 8/9/2020 .............................................................. 500,000 USD 537 585
Citigroup/Deutsche Bank Commercial Mortgage Trust, 2006–CD3, AJ, Floating Rate Note, 10/15/2048 .......
Clear Channel Communications Inc.
540,000 USD 433 454
9.00%, 12/15/2019 ....................................................................... 706,000 USD 613 642
Senior Note, 9.00%, 3/1/2021 ............................................................... 2,100,000 USD 2,034 1,862
Tranche A Term Loan, Floating Rate Note, 5/13/2014 ............................................ 333,972 USD 295 322
Tranche B Term Loan, Floating Rate Note, 1/29/2016 ............................................ 2,356,620 USD 2,047 1,937
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
76 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
Clear Channel Worldwide Holdings Inc.
Senior Note, 6.50%, 11/15/2022 ............................................................. 400,000 USD $ 396 $ 412
Senior Subordinate Note, 7.625%, 3/15/2020 .................................................. 700,000 USD 693 700
ClubCorp Club Operations Inc., Senior Note, 10.00%, 12/1/2018 ..................................... 1,300,000 USD 1,267 1,436
CMS Energy Corp., Senior Note, 8.75%, 6/15/2019 ................................................ 700,000 USD 794 904
CommScope Inc., Senior Note, 8.25%, 1/15/2019 ................................................. 1,400,000 USD 1,416 1,523
Community Health Systems Inc., New Extended Term Loan, Floating Rate Note, 1/25/2017 ................
CONSOL Energy Inc.
3,636,477 USD 3,630 3,631
Senior Note, 8.00%, 4/1/2017 ............................................................... 600,000 USD 628 645
Senior Note, 8.25%, 4/1/2020 ............................................................... 500,000 USD 523 538
Senior Note, 6.375%, 3/1/2021 .............................................................. 200,000 USD 194 204
Countrywide Asset Backed or Asset–Backed Certificates, 2005–11, AF4, 5.21%, 3/25/2034 ............... 225,000 USD 267 150
Cricket Communications Inc., Senior Note, 7.75%, 10/15/2020 ...................................... 1,500,000 USD 1,471 1,520
Crosstex Energy LP/Crosstex Energy Finance Corp., Senior Note, 8.875%, 2/15/2018 ..................... 1,500,000 USD 1,572 1,609
CSC Holdings Inc., Senior Debenture, 7.625%, 7/15/2018 .......................................... 700,000 USD 780 803
CSC Holdings Inc. (Cablevision), Incremental B–2 Extended Term Loan, Floating Rate Note, 3/29/2016 ...... 1,256,496 USD 1,255 1,252
CSC Holdings LLC, Senior Note, 6.75%, 11/15/2021 ............................................... 900,000 USD 913 991
Cumulus Media Holdings Inc., Second Lien Term Loan, Floating Rate Note, 9/16/2019 ...................
DaVita HealthCare Partners Inc.
3,525,525 USD 3,332 3,598
Senior Note, 5.75%, 8/15/2022 .............................................................. 600,000 USD 594 628
Tranche B Term Loan, Floating Rate Note, 10/20/2016 ........................................... 1,151,950 USD 1,172 1,149
Tranche B–2 Term Loan, Floating Rate Note, 8/24/2019 .......................................... 1,640,200 USD 1,597 1,639
Del Monte Corp., Senior Note, 7.625%, 2/15/2019 ................................................ 1,700,000 USD 1,672 1,760
Del Monte Foods Co., Initial Term Loan, Floating Rate Note, 3/8/2018 ................................. 3,702,515 USD 3,611 3,681
DineEquity Inc., Term B–1 Loan, Floating Rate Note, 10/19/2017 .....................................
DISH DBS Corp.
345,439 USD 339 346
Senior Bond, 5.00%, 3/15/2023 ............................................................. 300,000 USD 297 298
Senior Note, 7.125%, 2/1/2016 .............................................................. 1,500,000 USD 1,581 1,669
Senior Note, 6.75%, 6/1/2021 ............................................................... 200,000 USD 189 226
Senior Note, 5.875%, 7/15/2022 ............................................................. 100,000 USD 100 107
E*TRADE Financial Corp., Senior Note, 6.375%, 11/15/2019 ........................................ 700,000 USD 693 713
El Paso Corp., Senior Bond, 6.50%, 9/15/2020 ................................................... 500,000 USD 514 560
Endo Health Solutions Inc., Senior Note, 7.00%, 7/15/2019 ......................................... 700,000 USD 718 741
Energy Transfer Equity LP, Senior Note, 7.50%, 10/15/2020 ......................................... 1,600,000 USD 1,642 1,836
Energy Transfer Partners LP, Senior Note, 5.20%, 2/1/2022 .........................................
Enterprise Products Operating LLC, Junior Subordinated Note, 7.034% to 1/15/2018, Floating Rate Note
400,000 USD 408 453
thereafter, 1/15/2068 ...................................................................... 1,100,000 USD 1,021 1,251
EnviroSolutions Real Property Holdings, Second Lien Term Loan, Floating Rate Note, 7/29/2014 ............ 319,665 USD 314 317
Euramax International Inc., Senior Secured Note, 9.50%, 4/1/2016 ................................... 900,000 USD 877 834
Evergreen AcqCo. 1 LP (Savers), Term Loan, Floating Rate Note, 7/9/2019 ............................. 1,482,436 USD 1,483 1,476
Evergreen International Aviation Inc., Term Loan, Floating Rate Note, 6/30/2015 ......................... 1,140,985 USD 1,083 1,105
Exide Technologies, Senior Secured Note, 8.625%, 2/1/2018 ........................................ 600,000 USD 568 505
Exopack LLC, Term B Loan, Floating Rate Note, 5/31/2017 ..........................................
Federal Home Loan Mortgage Corporation
99,454 USD 97 98
6.00%, 2/1/2017 ......................................................................... 531USD 1 1
5.50%, 9/1/2017 ......................................................................... 960USD 2 1
4.50%, 9/1/2018 ......................................................................... 3,442 USD 5 4
5.00%, 10/1/2018 ........................................................................ 7,766 USD 10 8
4.50%, 2/1/2019 ......................................................................... 12,612 USD 17 13
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 77
Average
Cost
Fair
Value

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
5.50%, 3/1/2019 ......................................................................... 2,883 USD $ 4 $ 3
4.50%, 5/1/2019 ......................................................................... 15,469 USD 20 16
5.00%, 6/1/2019 ......................................................................... 51,306 USD 67 55
5.00%, 6/1/2019 ......................................................................... 3,672 USD 5 4
5.00%, 6/1/2019 ......................................................................... 6,239 USD 8 7
5.50%, 8/1/2019 ......................................................................... 6,409 USD 8 7
4.50%, 9/1/2019 ......................................................................... 12,674 USD 16 13
4.50%, 11/1/2019 ........................................................................ 8,559 USD 11 9
4.50%, 3/1/2020 ......................................................................... 11,560 USD 14 12
5.00%, 6/1/2020 ......................................................................... 31,370 USD 39 34
7.00%, 9/1/2021 ......................................................................... 3,191 USD 5 4
6.50%, 11/1/2027 ........................................................................ 3,659 USD 5 4
6.50%, 7/1/2031 ......................................................................... 1,263 USD 2 1
6.00%, 7/1/2032 ......................................................................... 2,491 USD 4 3
6.50%, 7/1/2032 ......................................................................... 2,798 USD 4 3
7.00%, 7/1/2032 ......................................................................... 1,736 USD 3 2
6.00%, 4/1/2033 ......................................................................... 4,123 USD 6 5
6.00%, 4/1/2033 ......................................................................... 13,759 USD 19 15
5.50%, 5/1/2033 ......................................................................... 9,732 USD 12 11
6.00%, 5/1/2033 ......................................................................... 6,142 USD 9 7
5.00%, 6/1/2033 ......................................................................... 4,627 USD 7 5
5.50%, 6/1/2033 ......................................................................... 13,302 USD 19 14
6.00%, 9/1/2033 ......................................................................... 10,169 USD 14 11
5.50%, 10/1/2033 ........................................................................ 2,828 USD 4 3
5.50%, 10/1/2033 ........................................................................ 2,867 USD 4 3
5.00%, 11/1/2033 ........................................................................ 10,050 USD 13 11
5.50%, 11/1/2033 ........................................................................ 7,870 USD 11 9
6.00%, 11/1/2033 ........................................................................ 19,963 USD 25 22
5.00%, 12/1/2033 ........................................................................ 7,918 USD 10 9
6.00%, 7/1/2034 ......................................................................... 11,420 USD 15 12
5.50%, 6/1/2035 ......................................................................... 7,629 USD 9 8
5.00%, 7/1/2035 ......................................................................... 49,587 USD 62 53
6.00%, 7/1/2035 ......................................................................... 545,562 USD 613 599
5.00%, 8/1/2035 ......................................................................... 57,728 USD 69 62
6.00%, 8/1/2035 ......................................................................... 352,952 USD 397 387
5.50%, 3/1/2036 ......................................................................... 257,427 USD 281 281
6.50%, 5/1/2036 ......................................................................... 85,489 USD 100 97
5.50%, 6/1/2036 ......................................................................... 338,693 USD 370 376
5.00%, 1/1/2037 ......................................................................... 582,977 USD 663 624
6.00%, 6/1/2037 ......................................................................... 172,387 USD 191 186
4.00%, 9/1/2040 ......................................................................... 1,077,437 USD 1,144 1,143
3.50%, 1/1/2041 ......................................................................... 350,198 USD 377 370
3.00%, 11/1/2042 ........................................................................ 250,000 USD 261 260
3.00%, 11/1/2042 ........................................................................ 997,923 USD 1,035 1,037
Adjustable Rate Mortgage, 2.348%, 1/1/2033 ..................................................
Federal National Mortgage Association–Asset Backed Agency Securities.
24,817 USD 31 26
5.50%, 11/1/2013 ........................................................................ 3,889 USD 4 4
5.50%, 1/1/2014 ......................................................................... 202USD — —
5.50%, 2/1/2017 ......................................................................... 1,191 USD 1 1
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
78 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
5.50%, 8/1/2017 ......................................................................... 1,583 USD $ 2 $ 2
5.00%, 3/1/2018 ......................................................................... 4,570 USD 7 5
5.00%, 5/1/2018 ......................................................................... 3,429 USD 5 4
5.00%, 6/1/2018 ......................................................................... 2,217 USD 3 2
5.50%, 9/1/2019 ......................................................................... 11,085 USD 14 12
4.50%, 3/1/2020 ......................................................................... 15,310 USD 18 16
5.00%, 6/1/2020 ......................................................................... 6,472 USD 8 7
3.00%, 3/1/2022 ......................................................................... 560,926 USD 574 588
5.50%, 8/1/2022 ......................................................................... 55,554 USD 61 60
5.00%, 7/1/2023 ......................................................................... 35,363 USD 39 38
5.50%, 7/1/2023 ......................................................................... 59,217 USD 63 64
5.00%, 1/1/2024 ......................................................................... 52,659 USD 56 57
4.50%, 9/1/2024 ......................................................................... 87,139 USD 94 93
5.50%, 1/1/2025 ......................................................................... 187,879 USD 205 202
2.50%, 3/1/2027 ......................................................................... 235,947 USD 245 245
2.50%, 6/1/2027 ......................................................................... 1,970,281 USD 2,046 2,048
5.00%, 7/1/2027 ......................................................................... 191,663 USD 207 206
2.50%, 11/1/2027 ........................................................................ 815,000 USD 847 847
6.50%, 6/1/2028 ......................................................................... 10,448 USD 15 12
5.00%, 4/1/2029 ......................................................................... 216,759 USD 234 235
5.00%, 4/1/2029 ......................................................................... 234,416 USD 254 252
5.00%, 4/1/2029 ......................................................................... 206,867 USD 224 221
6.50%, 9/1/2031 ......................................................................... 4,499 USD 7 5
5.50%, 10/1/2032 ........................................................................ 11,021 USD 14 12
5.50%, 4/1/2033 ......................................................................... 6,418 USD 9 7
5.50%, 5/1/2033 ......................................................................... 5,144 USD 7 6
5.50%, 5/1/2033 ......................................................................... 7,547 USD 11 8
5.00%, 6/1/2033 ......................................................................... 1,441,384 USD 1,564 1,560
5.50%, 11/1/2033 ........................................................................ 6,125 USD 8 7
5.50%, 3/1/2034 ......................................................................... 435,698 USD 474 473
5.00%, 4/1/2034 ......................................................................... 8,859 USD 12 10
5.00%, 5/1/2034 ......................................................................... 11,752 USD 16 13
6.00%, 6/1/2034 ......................................................................... 9,341 USD 12 10
6.00%, 9/1/2034 ......................................................................... 15,790 USD 20 17
5.00%, 3/1/2035 ......................................................................... 47,368 USD 58 51
5.00%, 10/1/2035 ........................................................................ 649,738 USD 705 699
5.00%, 10/1/2035 ........................................................................ 25,176 USD 30 27
5.50%, 11/1/2036 ........................................................................ 179,823 USD 190 194
6.50%, 11/1/2036 ........................................................................ 126,392 USD 124 141
6.50%, 10/1/2037 ........................................................................ 56,841 USD 62 63
5.50%, 2/1/2038 ......................................................................... 352,764 USD 391 381
5.50%, 2/1/2038 ......................................................................... 71,558 USD 79 77
6.00%, 5/1/2038 ......................................................................... 102,426 USD 113 111
5.00%, 6/1/2038 ......................................................................... 2,019,217 USD 2,152 2,173
5.00%, 2/1/2039 ......................................................................... 468,465 USD 508 504
5.00%, 9/1/2039 ......................................................................... 1,758,108 USD 1,908 1,892
5.00%, 9/1/2039 ......................................................................... 545,026 USD 589 594
4.50%, 11/1/2039 ........................................................................ 390,702 USD 418 419
5.00%, 2/1/2040 ......................................................................... 869,780 USD 934 959
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 79
Average
Cost
Fair
Value

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
5.00%, 8/1/2040 ........................................................................ 30,501 USD $ 33 $ 34
4.00%, 11/1/2040 ....................................................................... 424,188 USD 459 452
4.50%, 12/1/2040 ....................................................................... 943,438 USD 1,020 1,015
4.00%, 1/1/2041 ........................................................................ 653,496 USD 700 697
4.50%, 2/1/2041 ........................................................................ 670,149 USD 668 721
4.50%, 7/1/2041 ........................................................................ 103,175 USD 113 111
3.50%, 7/1/2042 ........................................................................ 308,464 USD 329 328
3.00%, 11/1/2042 ....................................................................... 4,990,703 USD 5,188 5,199
3.00%, 12/1/2042 ....................................................................... 850,000 USD 889 886
Adjustable Rate Mortgage, 2.33%, 4/1/2020 ..................................................
Federal–Mogul Corp.
16,788 USD 21 17
Tranche B Term Loan, Floating Rate Note, 12/27/2014 .......................................... 1,463,067 USD 1,364 1,331
Tranche C Term Loan, Floating Rate Note, 12/27/2015 ..........................................
First Data Corp.
746,468 USD 696 679
Senior Bond, 12.625%, 1/15/2021 .......................................................... 200,000 USD 194 209
Senior Secured Bond, 8.25%, 1/15/2021 .....................................................
Flextronics International USA Inc.
1,900,000 USD 1,717 1,887
A Closing Date Loan, Floating Rate Note, 10/1/2014 ............................................ 34,736 USD 34 34
A–1–A Delayed Draw Term Loan, Floating Rate Note, 10/1/2014 .................................. 9,982 USD 10 10
A–1–B Delayed Draw Term Loan, Floating Rate Note, 10/1/2014 .................................. 77,740 USD 78 77
A–2 Delayed Draw Term Loan, Floating Rate Note, 10/1/2014 .................................... 267,101 USD 269 265
A–3 Delayed Draw Term Loan, Floating Rate Note, 10/1/2014 .................................... 91,007 USD 92 90
FMG America Finance Inc., Loans, Floating Rate Note, 10/18/2017 .................................. 1,087,774 USD 1,054 1,088
Fontainebleau Las Vegas, 11.00%, 6/15/2015 ................................................... 1,300,000 USD 1,214 1
Ford Motor Credit Co. LLC, Senior Note, 5.75%, 2/1/2021 ......................................... 1,000,000 USD 988 1,142
Forest City Enterprises Inc., Senior Note, 7.625%, 6/1/2015 ........................................ 243,000 USD 257 241
FoxCo Acquisition Sub LLC, Initial Term Loan, Floating Rate Note, 7/14/2017 .......................... 602,390 USD 587 606
FPC Holdings Inc. (FleetPride), Initial Loan (2nd Lien), Floating Rate Note, 5/19/2020 ................... 242,649 USD 239 236
FRAM Group Holdings Inc. (Autoparts Holdings), Second Lien Term Loan, Floating Rate Note, 1/29/2018 . . .
Freescale Semiconductor Inc.
159,456 USD 147 150
Senior Note, 8.875%, 12/15/2014 .......................................................... 98,000 USD 101 98
Senior Note, 8.05%, 2/1/2020 ............................................................. 600,000 USD 580 593
Senior Note, 10.75%, 8/1/2020 ............................................................ 690,000 USD 742 735
Senior Secured Note, 9.25%, 4/15/2018 .....................................................
Frontier Communications Corp.
300,000 USD 318 326
Senior Note, 8.50%, 4/15/2020 ............................................................ 500,000 USD 514 571
Senior Note, 8.75%, 4/15/2022 ............................................................ 800,000 USD 850 922
Senior Note, 7.125%, 1/15/2023 ........................................................... 100,000 USD 102 105
FTS International LLC (Frac Tech), Term Loan, Floating Rate Note, 5/6/2016 .......................... 248,039 USD 211 204
General Electric Capital Corp., Senior Note, A, 8.50%, 4/6/2018 .................................... 30,000,000 MXN 2,877 2,504
Gilead Sciences Inc., Senior Note, 4.50%, 4/1/2021 .............................................. 1,000,000 USD 1,054 1,134
GMAC Inc., Subordinated Note, 8.00%, 12/31/2018 ..............................................
Government National Mortgage Association
400,000 USD 393 465
6.50%, 2/20/2034 ....................................................................... 1,852 USD 3 2
Single Family, 5.50%, 12/15/2032 .......................................................... 17,079 USD 24 19
Single Family, 6.00%, 12/15/2032 .......................................................... 4,194 USD 6 5
Single Family, 6.00%, 2/15/2033 ........................................................... 2,533 USD 4 3
Single Family, 5.50%, 3/15/2033 ........................................................... 1,190 USD 2 1
Single Family, 5.50%, 4/15/2033 ........................................................... 3,130 USD 5 3
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
80 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
Single Family, 5.50%, 9/15/2033 ............................................................ 6,362 USD $ 9 $ 7
Single Family, 5.00%, 12/15/2033 ........................................................... 30,960 USD 42 34
Single Family, 5.00%, 4/15/2034 ............................................................ 4,596 USD 6 5
Single Family, 5.50%, 9/15/2034 ............................................................ 17,021 USD 21 19
Single Family, 5.50%, 6/15/2036 ............................................................ 17,224 USD 19 19
Single Family, 6.00%, 8/15/2036 ............................................................
Government National Mortgage Association II
123,619 USD 138 137
Single Family, 6.50%, 8/20/2031 ............................................................ 2,785 USD 4 3
Single Family, 6.50%, 5/20/2032 ............................................................ 1,178 USD 2 1
Single Family, 7.50%, 5/20/2033 ............................................................ 626USD 1 1
Single Family, 5.00%, 11/20/2033 ........................................................... 32,233 USD 42 35
Single Family, 6.00%, 11/20/2034 ........................................................... 18,079 USD 22 20
Greenwich Capital Commercial Funding Corp., 2006–GG7, AJ, Floating Rate Note, 7/10/2038 .............. 905,000 USD 867 872
Halcon Resources Corp., Senior Note, 8.875%, 5/15/2021 .......................................... 500,000 USD 492 526
Harrah’s Operating Co. Inc., Senior Secured Note, 11.25%, 6/1/2017 .................................
HCA Inc.
2,000,000 USD 2,176 2,128
Senior Note, 7.50%, 2/15/2022 .............................................................. 500,000 USD 474 569
Senior Note, 5.875%, 5/1/2023 .............................................................. 400,000 USD 394 411
Senior Secured Bond, 7.25%, 9/15/2020 ...................................................... 100,000 USD 102 110
Senior Secured Note, 5.875%, 3/15/2022 ..................................................... 1,500,000 USD 1,502 1,620
Tranche B–2 Term Loan, Floating Rate Note, 3/31/2017 .......................................... 2,972,869 USD 2,905 2,959
HDTFS Inc., Senior Note, 6.25%, 10/15/2022 ....................................................
Hertz Corp.
300,000 USD 295 317
Senior Note, 6.75%, 4/15/2019 .............................................................. 500,000 USD 529 542
Tranche B–1 Term Loans, Floating Rate Note, 3/12/2018 .........................................
Hologic Inc.
980,800 USD 963 975
Senior Note, 6.25%, 8/1/2020 ............................................................... 400,000 USD 403 428
Tranche B Term Loan, Floating Rate Note, 8/1/2019 ............................................. 1,160,464 USD 1,159 1,165
HSBC USA Inc., Subordinated Note, 5.00%, 9/27/2020 ............................................ 1,000,000 USD 1,014 1,084
Hubbard Radio LLC, Second Lien Term Loan, Floating Rate Note, 4/29/2018 ...........................
Illinois State GO
812,248 USD 806 819
5.877%, 3/1/2019 ........................................................................ 1,950,000 USD 1,929 2,230
Build America Bonds, 7.35%, 7/1/2035 ....................................................... 500,000 USD 521 601
Ineos US Finance LLC, Dollar Term Loan, Floating Rate Note, 4/27/2018 ............................... 2,459,791 USD 2,436 2,467
Interactive Data Corp., Term B Loans, Floating Rate Note, 2/11/2018 .................................. 1,260,022 USD 1,249 1,256
InVentiv Health Inc., Senior Note, 9.00%, 1/15/2018 ...............................................
inVentiv Health Inc.
300,000 USD 295 301
Senior Note, 10.00%, 8/15/2018 ............................................................. 500,000 USD 446 428
Senior Note, 10.00%, 8/15/2018 ............................................................. 500,000 USD 458 428
Jaguar Holding Co. I, Senior Note, Payment–In–Kind, 9.375%, 10/15/2017 .............................
JBS USA LLC/Finance Inc.
800,000 USD 774 834
Senior Note, 11.625%, 5/1/2014 ............................................................. 700,000 USD 826 777
Senior Note, 8.25%, 2/1/2020 ...............................................................
JPMorgan Chase & Co.
800,000 USD 797 842
6.00%, 1/15/2018 ........................................................................ 300,000 USD 292 357
Senior Note, 4.25%, 10/15/2020 ............................................................. 1,700,000 USD 1,711 1,876
Senior Note, 3.25%, 9/23/2022 .............................................................. 600,000 USD 581 613
KAR Auction Services Inc. (Adesa), Term Loan, Floating Rate Note, 5/19/2017 .......................... 2,518,025 USD 2,443 2,521
Kinder Morgan Finance Co. LLC, Senior Secured Note, 6.00%, 1/15/2018 .............................. 1,500,000 USD 1,506 1,637
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 81
Average
Cost
Fair
Value

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
KKR Group Finance Co., Senior Note, 6.375%, 9/29/2020 .......................................... 1,300,000 USD $ 1,326 $ 1,497
Kraft Foods Group Inc., Senior Bond, 3.50%, 6/6/2022 ............................................. 1,400,000 USD 1,429 1,483
Laboratory Corp. of America Holdings, Senior Bond, 3.75%, 8/23/2022 ................................
Linn Energy LLC/Finance Corp.
200,000 USD 197 210
Senior Note, 8.625%, 4/15/2020 ............................................................. 900,000 USD 906 974
Senior Note, 7.75%, 2/1/2021 ............................................................... 800,000 USD 826 846
M/I Homes Inc., Senior Note, 8.625%, 11/15/2018 ................................................ 900,000 USD 904 983
MacDermid Inc., Senior Subordinate Note, 9.50%, 4/15/2017 ....................................... 1,300,000 USD 1,372 1,344
MAPS Collateralized Loan Obligations Fund LLC, 2005–1A, B, Floating Rate Note, 12/21/2017 ............. 350,000 USD 294 344
Martin Midstream Partners LP, Senior Note, 8.875%, 4/1/2018 ...................................... 706,000 USD 725 747
Media General Inc., Senior Secured Note, 11.75%, 2/15/2017 ....................................... 500,000 USD 519 574
Meritor Inc., Senior Note, 10.625%, 3/15/2018 ................................................... 1,200,000 USD 1,305 1,243
MetLife Inc., Junior Subordinated Note, 6.40% to 12/15/2036, Floating Rate Note thereafter, 12/15/2066 .....
MGM Resorts International
1,100,000 USD 984 1,165
Senior Note, 6.625%, 7/15/2015 ............................................................. 1,200,000 USD 1,202 1,278
Senior Note, 8.625%, 2/1/2019 .............................................................. 100,000 USD 102 111
Senior Note, 6.75%, 10/1/2020 .............................................................. 100,000 USD 97 101
Senior Note, 6.625%, 12/15/2021 ............................................................ 300,000 USD 298 298
Senior Note, 7.75%, 3/15/2022 .............................................................. 100,000 USD 99 106
Term Loan B, Floating Rate Note, 12/20/2019 .................................................. 301,900 USD 296 303
MoneyGram Payment Systems Worldwide Inc., Term Loan, Floating Rate Note, 11/18/2017 ................
Morgan Stanley
297,143 USD 291 294
Senior Note, 6.625%, 4/1/2018 .............................................................. 100,000 USD 108 117
Senior Note, 5.50%, 7/24/2020 .............................................................. 1,500,000 USD 1,489 1,675
Senior Note, 5.50%, 7/28/2021 .............................................................. 300,000 USD 283 338
Morgan Stanley Capital I Trust, 2006–HQ8, AJ, Floating Rate Note, 3/12/2044 .......................... 250,000 USD 235 252
Navistar International Corp., Senior Note, 8.25%, 11/1/2021 ......................................... 600,000 USD 561 575
Neuberger Berman Group LLC/Finance Corp., Senior Note, 5.875%, 3/15/2022 ......................... 900,000 USD 920 948
NewPage Corp., Term Loan, Floating Rate Note, 12/21/2018 ........................................ 1,134,647 USD 1,111 1,121
NTELOS Inc., Term B Advance, Floating Rate Note, 11/11/2019 ..................................... 91,709 USD 82 87
Nuveen Investments Inc., Senior Note, 9.50%, 10/15/2020 .........................................
Offshore Group Investment Ltd.
800,000 USD 775 791
First Lien, 7.50%, 11/1/2019 ................................................................ 900,000 USD 884 903
Senior Secured Note, 11.50%, 8/1/2015 ....................................................... 631,000 USD 653 683
Par Pharmaceutical Companies Inc., Term B Loans, 5.00%, 9/28/2019 ................................ 1,033,037 USD 1,014 1,025
Party City Holdings Inc., Term Loans, Floating Rate Note, 7/27/2019 .................................. 989,534 USD 993 992
Patriot Coal Corp., Debtor–In–Possession Term Loan, Floating Rate Note, 10/3/2013 .....................
Peabody Energy Corp.
1,888,214 USD 1,880 1,880
Senior Note, 6.00%, 11/15/2018 ............................................................. 600,000 USD 611 633
Senior Note, 6.50%, 9/15/2020 .............................................................. 700,000 USD 733 746
Senior Note, 6.25%, 11/15/2021 ............................................................. 400,000 USD 396 422
Penn Virginia Resource Partners LP/Finance Corp. II, Senior Note, 8.375%, 6/1/2020 .................... 700,000 USD 703 749
Pinnacle Entertainment Inc., Senior Note, 8.625%, 8/1/2017 ........................................
Pinnacle Foods Finance LLC/Pinnacle Foods Finance Corp.
700,000 USD 738 747
Senior Note, 9.25%, 4/1/2015 ............................................................... 202,000 USD 213 204
Senior Note, 8.25%, 9/1/2017 ............................................................... 300,000 USD 311 317
PL Propylene LLC (PetroLogistics), Tranche B Term Loan, Floating Rate Note, 3/27/2017 .................. 931,668 USD 921 933
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
82 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
Plains Exploration & Production Co.
7–Year Term Loan, Floating Rate Note, 11/30/2019 .............................................. 443,100 USD $ 432 $ 441
Senior Note, 7.625%, 6/1/2018 .............................................................. 1,500,000 USD 1,516 1,568
Senior Note, 6.125%, 6/15/2019 ............................................................. 100,000 USD 99 108
Senior Note, 8.625%, 10/15/2019 ............................................................ 100,000 USD 108 113
Senior Note, 6.875%, 2/15/2023 ............................................................. 400,000 USD 396 454
PVH Corp., Term Loan B, Floating Rate Note, 12/20/2019 .......................................... 1,044,800 USD 1,026 1,043
QR Energy LP/QRE Finance, Senior Note, 9.25%, 8/1/2020 ......................................... 900,000 USD 896 939
QS0001 Corp. (Tomkins Air Distr.), Second Lien Initial Loan, Floating Rate Note, 5/9/2020 .................
Quicksilver Resources Inc.
135,882 USD 135 138
Senior Note, 8.25%, 8/1/2015 ............................................................... 1,200,000 USD 1,215 1,103
Senior Note, 9.125%, 8/15/2019 ............................................................. 400,000 USD 411 354
Quintiles Transnational Corp., Term B–2 Loan, Floating Rate Note, 6/8/2018 ............................ 15,400 USD 15 15
Radio One Inc., Senior Subordinate Note, Payment–In–Kind, 12.50%, 5/24/2016 ........................ 1,117,676 USD 1,078 996
RBS Global Inc. (Rexnord), Term B Loan, Floating Rate Note, 4/1/2018 ................................
Redondo Beach USD, GO, Build America Bonds, Election of 2008, Direct Payment to District,
2,460,422 USD 2,452 2,461
Series D, 6.461%, 8/1/2040 ................................................................ 375,000 USD 395 404
Regal Cinemas Corp., Term Loan, Floating Rate Note, 8/23/2017 ..................................... 458,927 USD 453 457
Regions Bank, Subordinated Note, 7.50%, 5/15/2018 ..............................................
Regions Financial Corp.
400,000 USD 387 479
Senior Note, 7.75%, 11/10/2014 ............................................................. 1,000,000 USD 1,058 1,101
Senior Note, 5.75%, 6/15/2015 .............................................................. 200,000 USD 198 215
Reynolds Group Holdings Inc., United States Term Loan, Floating Rate Note, 9/28/2018 ..................
Reynolds Group Issuer Inc./LLC/SA
3,470,222 USD 3,387 3,486
First Lien, 5.75%, 10/15/2020 ............................................................... 200,000 USD 194 205
Senior Note, 8.50%, 5/15/2018 .............................................................. 1,300,000 USD 1,347 1,324
Senior note, 8.25%, 2/15/2021 .............................................................. 700,000 USD 699 706
Senior Secured Note, 7.125%, 4/15/2019 .....................................................
Rite Aid Corp.
200,000 USD 192 214
Senior Secured Note, 9.75%, 6/12/2016 ....................................................... 1,000,000 USD 1,094 1,075
Senior Secured Note, 8.00%, 8/15/2020 ....................................................... 500,000 USD 528 567
Riverbed Technology Inc., Term Loan B, Floating Rate Note, 12/18/2019 .............................. 265,700 USD 260 266
Road Infrastructure Investment LLC (Ennis Flint), Second Lien Term Loan, Floating Rate Note, 9/30/2018 .... 869,327 USD 859 844
Safeway Inc., Senior Bond, 3.95%, 8/15/2020 .................................................... 1,700,000 USD 1,680 1,687
Samson Investment Co., Senior Note, 9.75%, 2/15/2020 ............................................
SandRidge Energy Inc.
1,500,000 USD 1,495 1,576
Senior Note, 8.00%, 6/1/2018 ............................................................... 1,500,000 USD 1,432 1,579
Senior Note, 8.75%, 1/15/2020 .............................................................. 200,000 USD 199 218
Senior Note, 7.50%, 2/15/2023 ..............................................................
Sealed Air Corp.
100,000 USD 99 106
Senior Note, 8.125%, 9/15/2019 ............................................................. 500,000 USD 495 559
Senior Note, 6.50%, 12/1/2020 .............................................................. 100,000 USD 100 107
Senior Note, 8.375%, 9/15/2021 ............................................................. 400,000 USD 421 454
Sensus USA Inc., Second Lien Term Loan, Floating Rate Note, 5/9/2018 ............................... 1,293,235 USD 1,275 1,285
Shea Homes LP/Funding Corp., Senior Secured Note, 8.625%, 5/15/2019 ............................. 900,000 USD 862 988
Shingle Springs Tribal Gaming Authority, Senior Note, 9.375%, 6/15/2015 ............................. 800,000 USD 649 775
Silver II US Holdings LLC, Term Loan, Floating Rate Note, 12/13/2019 ................................. 881,600 USD 867 882
Sinclair Television Group Inc., New Tranche B Term Loan, Floating Rate Note, 10/29/2016 ................ 455,925 USD 466 454
Sitel LLC/Finance Corp., Senior Note, 11.50%, 4/1/2018 ............................................ 1,000,000 USD 1,000 700
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 83
Average
Cost
Fair
Value

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
Sonoma County Pension Obligation Revenue, Series A, 6.00%, 12/1/2029 .............................. 635,000 USD $ 676 $ 704
Spectrum Brands Inc., Initial United States Term Loan, Floating Rate Note, 12/17/2019 ...................
Sprint Nextel Corp.
167,000 USD 164 167
Senior Note, 8.375%, 8/15/2017 ............................................................. 1,700,000 USD 1,803 1,963
Senior Note, 9.00%, 11/15/2018 ............................................................. 800,000 USD 814 981
Senior Note, 7.00%, 3/1/2020 ............................................................... 300,000 USD 299 346
Sterling International Inc., Senior Note, 11.00%, 10/1/2019 ......................................... 500,000 USD 491 507
SunGard Data Systems Inc., Tranche D Term Loan, Floating Rate Note, 1/31/2020 .......................
Terex Corp.
223,000 USD 220 223
Senior Note, 6.00%, 5/15/2021 .............................................................. 500,000 USD 499 523
United States Term Loan, Floating Rate Note, 4/28/2017 ..........................................
Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc.,
1,436,611 USD 1,409 1,439
Senior Secured Note, 11.50%, 10/1/2020 .....................................................
Time Warner Inc.
2,400,000 USD 1,996 1,865
7.625%, 4/15/2031 ....................................................................... 900,000 USD 1,025 1,228
6.10%, 7/15/2040 ........................................................................ 300,000 USD 310 360
Senior Bond, 3.40%, 6/15/2022 ............................................................. 100,000 USD 103 103
Tomkins LLC and Tomkins Inc., Term B–1 Loan, Floating Rate Note, 9/21/2016 .........................
TransDigm Inc.
386,238 USD 382 386
Tranche B1 Term Loan, Floating Rate Note, 2/14/2017 ........................................... 127,446 USD 126 127
Tranche B2 Term Loan, Floating Rate Note, 2/14/2017 ...........................................
TransUnion LLC/TransUnion Financing Corporation, Replacement Term Loan, Floating Rate Note,
214,831 USD 214 215
2/10/2018 ............................................................................... 1,723,242 USD 1,715 1,733
TWCC Holding Corp., Term Loan, Floating Rate Note, 2/11/2017 ..................................... 393,045 USD 388 394
United Rentals North America Inc., Senior Subordinate Note, 8.375%, 9/15/2020 .......................
United States Treasury Bond
1,600,000 USD 1,549 1,760
9.00%, 11/15/2018 ....................................................................... 1,000,000 USD 1,378 1,455
7.125%, 2/15/2023 ....................................................................... 100,000 USD 141 150
6.875%, 8/15/2025 .......................................................................
United States Treasury Note
730,000 USD 1,088 1,115
2.375%, 3/31/2016 ....................................................................... 3,000,000 USD 3,153 3,168
3.75%, 11/15/2018 ....................................................................... 3,500,000 USD 3,920 4,046
Index Linked, 0.125%, 4/15/2016 ............................................................ 1,047,978 USD 1,068 1,096
Index Linked, 0.625%, 7/15/2021 ............................................................ 1,436,873 USD 1,447 1,621
Universal Health Services Inc., New Tranche B Term Loan, Floating Rate Note, 11/15/2016
Univision Communications Inc.
............... 312,827 USD 303 312
Secured Bond, 6.75%, 9/15/2022 ............................................................ 100,000 USD 99 103
Senior Secured Note, 7.875%, 11/1/2020 ..................................................... 1,000,000 USD 1,024 1,075
UR Financing Escrow Corp., Senior Note, 7.625%, 4/15/2022 ....................................... 100,000 USD 100 111
Vanguard Health Holding Co. II LLC/Inc., Senior Note, 8.00%, 2/1/2018 ............................... 1,000,000 USD 1,025 1,028
Vanguard Health Systems Inc., Senior Note, Zero Coupon, 2/1/2016 .................................. 8,000 USD 6 6
Vertafore Inc., Second Lien Term Loan, Floating Rate Note, 10/27/2017 ............................... 1,022,822 USD 1,045 1,017
Visant Corp., Senior Note, 10.00%, 10/1/2017 .................................................... 1,400,000 USD 1,461 1,248
VPI Escrow Corp., Senior Note, 6.375%, 10/15/2020 ...............................................
W&T Offshore Inc.
1,200,000 USD 1,171 1,278
Senior Note, 8.50%, 6/15/2019 .............................................................. 400,000 USD 420 427
Senior Note, 8.50%, 6/15/2019 .............................................................. 900,000 USD 908 961
Wachovia Bank Commercial Mortgage Trust, 2007–WHL8, A1, Floating Rate Note, 6/15/2020 .............. 1,357,785 USD 1,205 1,327
Walter Energy Inc., B Term Loan, Floating Rate Note, 4/1/2018 ...................................... 449,803 USD 438 450
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
84 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 52.40% (Continued)
Warner Chilcott Corp.
Additional Term B–1 Loan, Floating Rate Note, 3/15/2018 .................................... 381,182 USD $ 373 $ 380
Term B–1 Loan, Floating Rate Note, 3/15/2018 ............................................
Wells Fargo Mortgage Backed Securities Trust
1,003,715 USD 982 1,001
2004–W, A9, Floating Rate Note, 11/25/2034 .............................................. 557,716 USD 519 572
2007–3, 3A1, 5.50%, 4/25/2037 ........................................................ 429,640 USD 451 441
Wendy’s International Inc., Closing Date Term Loan, Floating Rate Note, 5/15/2019 .................. 1,994,521 USD 1,978 1,998
Wesco Distribution Inc., Term Loan, Floating Rate Note, 12/12/2019 ............................. 285,400 USD 281 285
West Corp., Senior Note, 7.875%, 1/15/2019 ................................................ 1,400,000 USD 1,425 1,439
Average
Cost
Fair
Value
277,547 286,354
South Korea: 3.73%
Korea Monetary Stabilization Bond
Senior Bond, 3.38%, 5/9/2013 .......................................................... 348,000,000 KRW 303 326
Senior Bond, 3.76%, 6/2/2013 .......................................................... 55,660,000 KRW 49 52
Senior Bond, 3.90%, 8/2/2013 .......................................................... 1,194,370,000 KRW 1,079 1,123
Senior Bond, 3.59%, 10/2/2013 ........................................................ 97,410,000 KRW 85 91
Senior Bond, 3.48%, 12/2/2013 ........................................................ 166,980,000 KRW 146 157
Senior Bond, 3.47%, 2/2/2014 .......................................................... 229,580,000 KRW 203 216
Senior Bond, 3.59%, 4/2/2014 .......................................................... 337,410,000 KRW 299 318
Senior Note, 3.83%, 4/2/2013 .......................................................... 34,790,000 KRW 30 33
Senior Note, 3.28%, 6/9/2013 .......................................................... 926,040,000 KRW 820 866
Senior Note, 3.28%, 6/2/2014 .......................................................... 400,080,000 KRW 353 376
Senior Note, 2.82%, 8/2/2014 .......................................................... 877,200,000 KRW 803 819
Senior Note, 2.78%, 10/2/2014 ......................................................... 3,497,700,000 KRW 3,200 3,264
Senior Note, 2.84%, 12/2/2014 ......................................................... 1,237,310,000 KRW 1,135 1,156
Korea Treasury Bond
Senior Bond, 3.00%, 12/10/2013 ....................................................... 9,927,500,000 KRW 8,785 9,288
Senior Bond, 3.50%, 6/10/2014 ........................................................ 2,030,990,000 KRW 1,794 1,915
Senior Note, 3.25%, 12/10/2014 ........................................................ 378,420,000 KRW 350 356
19,434 20,356
Sweden: 2.55%
Government of Sweden
1.50%, 8/30/2013 ................................................................... 39,140,000 SEK 5,988 6,009
6.75%, 5/5/2014 ..................................................................... 48,090,000 SEK 7,775 7,931
13,763 13,940
Poland: 2.26%
Government of Poland
5.25%, 4/25/2013 ................................................................... 2,300,000 PLN 733 743
5.00%, 10/24/2013 .................................................................. 1,870,000 PLN 593 610
5.75%, 4/25/2014 ................................................................... 21,065,000 PLN 6,870 6,990
5.50%, 4/25/2015 ................................................................... 2,905,000 PLN 938 982
6.25%, 10/24/2015 .................................................................. 2,570,000 PLN 876 894
5.75%, 9/23/2022 ................................................................... 1,070,000 PLN 450 403
Floating Rate Note, 1/25/2017 .......................................................... 498,000 PLN 154 161
Floating Rate Note, 1/25/2021 .......................................................... 505,000 PLN 154 161
Strip, 7/25/2013 ..................................................................... 3,220,000 PLN 1,032 1,017
Strip, 1/25/2014 ..................................................................... 1,245,000 PLN 377 387
The accompanying notes are an integral part of these financial statements.
12,177 12,348
Franklin Templeton Investments Funds 85

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United Kingdom: 2.13%
Algeco Scotsman Global Finance PLC, Secured Note, 8.50%, 10/15/2018 ........................... 1,200,000 USD $ 1,181 $ 1,231
Boparan Finance PLC, Senior Note, 9.75%, 4/30/2018 ...........................................
CEVA Group PLC
900,000 EUR 1,224 1,331
Senior Secured Note, 11.625%, 10/1/2016 .................................................. 200,000 USD 217 204
Senior Secured Note, 8.375%, 12/1/2017 ................................................... 800,000 USD 794 788
Senior Secured Note, 11.50%, 4/1/2018 .................................................... 400,000 USD 406 332
Expro Finance Luxembourg, Senior Secured Note, 8.50%, 12/15/2016 ..............................
Ineos Finance PLC
1,345,000 USD 1,355 1,396
Senior Secured Note, 9.25%, 5/15/2015 .................................................... 100,000 EUR 132 141
Senior Secured Note, 8.375%, 2/15/2019 ................................................... 200,000 USD 199 214
Senior Secured Note, 7.50%, 5/1/2020 .....................................................
Ineos Group Holdings Ltd.
100,000 USD 98 104
Senior Note, 7.875%, 2/15/2016 .......................................................... 500,000 EUR 539 652
Senior Secured Note, 8.50%, 2/15/2016 .................................................... 700,000 USD 683 692
Kerling PLC, Senior Secured Note, 10.625%, 2/1/2017 ........................................... 1,300,000 EUR 1,902 1,644
Matalan Finance Ltd., Senior Secured Note, 8.875%, 4/29/2016 ................................... 800,000 GBP 1,251 1,319
Royal Bank of Scotland Group PLC, Subordinated Note, 6.125%, 12/15/2022 ........................ 100,000 USD 99 104
The Royal Bank of Scotland PLC, Subordinated Note, 6.934%, 4/9/2018 ............................ 1,000,000 EUR 1,196 1,476
Average
Cost
Fair
Value
11,276 11,628
Mexico: 2.02%
Cemex SAB de CV, Senior Secured Note, 9.00%, 1/11/2018 ...................................... 1,700,000 USD 1,664 1,844
Government of Mexico (1)
9.00%, 6/20/2013 ...................................................................... 490,140 MXN 3,996 3,871
8.00%, 12/19/2013 ..................................................................... 300,000 MXN 2,650 2,394
7.00%, 6/19/2014 ...................................................................... 243,700 MXN 1,939 1,945
9.50%, 12/18/2014 ..................................................................... 114,500 MXN 957 964
11,206 11,018
Hungary: 1.85%
Government of Hungary
5.50%, 2/12/2014 ...................................................................... 556,900,000 HUF 2,537 2,514
5.50%, 2/12/2016 ...................................................................... 733,200,000 HUF 3,359 3,281
6.50%, 6/24/2019 ...................................................................... 82,600,000 HUF 365 383
7.50%, 11/12/2020 ..................................................................... 25,300,000 HUF 117 124
D, 6.75%, 8/22/2014 .................................................................... 125,000,000 HUF 661 574
Senior Note, 6.25%, 1/29/2020 ........................................................... 2,200,000 USD 2,296 2,412
Senior Note, 6.375%, 3/29/2021 .......................................................... 724,000 USD 675 798
10,010 10,086
Malaysia: 1.73%
Government of Malaysia
3.434%, 8/15/2014 ..................................................................... 3,535,000 MYR 1,152 1,155
Senior Bond, 3.702%, 2/25/2013 .......................................................... 6,522,000 MYR 2,111 2,120
Senior Bond, 3.70%, 5/15/2013 ........................................................... 790,000 MYR 265 257
Senior Bond, 3.21%, 5/31/2013 ........................................................... 7,630,000 MYR 2,514 2,480
Senior Bond, 3.461%, 7/31/2013 .......................................................... 8,535,000 MYR 2,715 2,779
Senior Bond, 8.00%, 10/30/2013 .......................................................... 10,000 MYR 4 3
Senior Bond, 5.094%, 4/30/2014 .......................................................... 1,925,000 MYR 636 642
(1) Principal amount in 100 Mexican Peso units
9,397 9,436
The accompanying notes are an integral part of these financial statements.
86 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 1.68%
CHC Helicopter SA, Senior Secured Note, First Lien, 9.25%, 10/15/2020 .............................. 1,700,000 USD $ 1,743 $ 1,777
Inmet Mining Corp., Senior Note, 8.75%, 6/1/2020 ................................................
Novelis Inc.
1,500,000 USD 1,502 1,628
Senior Note, 8.375%, 12/15/2017 ........................................................... 700,000 USD 712 767
Senior Note, 8.75%, 12/15/2020 ............................................................. 600,000 USD 603 664
Telesat Canada, United States Term B Loan, Floating Rate Note, 3/28/2019 ............................
Valeant Pharmaceuticals International Inc.
354,213 USD 350 354
Series C Tranche B Term Loan, Floating Rate Note, 2/13/2019 ..................................... 1,095,200 USD 1,069 1,094
Series D Tranche B Term Loan, Floating Rate Note, 2/13/2019 ..................................... 1,064,070 USD 1,068 1,061
Xstrata Finance Canada Ltd., Senior Note, 4.95%, 11/15/2021 ....................................... 1,700,000 USD 1,743 1,812
Average
Cost
Fair
Value
8,790 9,157
Luxembourg: 1.63%
ArcelorMittal, Senior Note, 6.00%, 3/1/2021 ..................................................... 1,800,000 USD 1,738 1,781
Ardagh Packaging Finance PLC, Senior Note, 9.125%, 10/15/2020 ................................... 800,000 USD 846 866
August Luxuk Holding Co., Lux Second Lien, Floating Rate Note, 4/27/2019 ............................ 534,908 USD 532 534
Intelsat Jackson Holdings SA
Senior Note, 7.25%, 10/15/2020 ............................................................. 700,000 USD 707 759
Senior Note, 7.50%, 4/1/2021 ............................................................... 900,000 USD 897 986
Senior Note, 6.625%, 12/15/2022 ........................................................... 800,000 USD 781 819
Tranche B–1 Term Loan, Floating Rate Note, 4/2/2018 ........................................... 2,382,221 USD 2,366 2,381
Intelsat Luxembourg SA, Senior Note, 11.25%, 2/4/2017 ........................................... 100,000 USD 96 105
WC Luxco S.A.R.L., Term B–3 Loan, Floating Rate Note, 3/15/2018 ................................... 690,054 USD 675 688
8,638 8,919
Australia: 1.51%
FMG Resources August 2006 Pty. Ltd.
Senior Note, 6.00%, 4/1/2017 ............................................................... 100,000 USD 99 101
Senior Note, 6.875%, 2/1/2018 .............................................................. 1,700,000 USD 1,695 1,744
Senior Note, 8.25%, 11/1/2019 .............................................................. 100,000 USD 102 106
Government of Australia, Senior Bond, 6.50%, 5/15/2013 ........................................... 1,215,000 AUD 1,282 1,271
New South Wales Treasury Corp.
5.25%, 5/1/2013 ......................................................................... 330,000 AUD 344 343
5.50%, 8/1/2013 ......................................................................... 605,000 AUD 638 634
Queensland Treasury Corp.
Senior Note, 6.00%, 8/14/2013 .............................................................. 360,000 AUD 307 379
Senior Note, 6.00%, 8/21/2013 .............................................................. 1,940,000 AUD 2,017 2,042
Western Australia Treasury Corp., 8.00%, 6/15/2013 .............................................. 1,551,000 AUD 1,638 1,637
8,122 8,257
Ireland: 1.41%
FLY Funding II S.A.R.L., Loans, Floating Rate Note, 8/8/2018 ........................................ 101,500 USD 100 101
Government of Ireland
5.90%, 10/18/2019 ....................................................................... 924,000 EUR 1,108 1,323
4.50%, 4/18/2020 ........................................................................ 902,000 EUR 1,012 1,186
5.00%, 10/18/2020 ....................................................................... 1,858,000 EUR 2,178 2,524
Senior Bond, 4.50%, 10/18/2018 ............................................................ 96,000 EUR 109 130
Senior Bond, 4.40%, 6/18/2019 ............................................................. 445,000 EUR 523 584
Senior Bond, 5.40%, 3/13/2025 ............................................................. 1,400,000 EUR 1,554 1,861
The accompanying notes are an integral part of these financial statements.
6,584 7,709
Franklin Templeton Investments Funds 87

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Brazil: 1.32%
Banco do Brasil SA, Subordinated Note, 5.875%, 1/26/2022 ....................................
Nota Do Tesouro Nacional
1,500,000 USD $ 1,444 $ 1,641
(2)
9.762%, 1/1/2017 .................................................................... 5,980 BRL 3,123 3,054
Index Linked, 6.00%, 5/15/2015 ......................................................... 1,805 BRL 2,173 2,127
Index Linked, 6.00%, 8/15/2016 ......................................................... 170BRL 216 206
Index Linked, 6.00%, 8/15/2018 ......................................................... 165BRL 210 206
Average
Cost
Fair
Value
7,166 7,234
Netherlands: 1.27%
AVG Technologies NV, Term Loan, Floating Rate Note, 3/15/2016 ................................ 166,181 USD 158 165
Intergen NV, Senior Secured Note, 9.00%, 6/30/2017 .......................................... 1,400,000 USD 1,471 1,251
Tronox Pigments (Netherlands) BV
Closing Date Term Loan, Floating Rate Note, 2/8/2018 ....................................... 588,630 USD 582 590
Delayed Draw Term Loan, Floating Rate Note, 2/8/2018 ...................................... 160,535 USD 159 161
UPC Financing Partnership
Term Loan AF, Floating Rate Note, 1/31/2021 .............................................. 290,300 USD 289 288
Term Loan T, Floating Rate Note, 12/31/2016 .............................................. 1,290,797 USD 1,270 1,272
Term Loan X, Floating Rate Note, 12/31/2017 .............................................. 811,196 USD 802 802
UPC Holding BV, Senior Note, 6.375%, 9/15/2022 ............................................ 100,000 EUR 126 133
UPCB Finance II Ltd., Senior Secured Note, 6.375%, 7/1/2020 .................................. 1,000,000 EUR 1,340 1,395
UPCB Finance VI Ltd., Senior Secured Note, 6.875%, 1/15/2022 ................................. 150,000 USD 150 161
Ziggo Bond Co., Senior Secured Note, 8.00%, 5/15/2018 ....................................... 500,000 EUR 683 721
7,030 6,939
Uruguay: 1.13%
Government of Uruguay, Senior Note, Index Linked, 4.375%, 12/15/2028 .......................... 58,463,345 UYU 3,028 3,566
Uruguay Notas del Tesoro
9.00%, 1/27/2014 .................................................................... 3,790,000 UYU 190 195
10.50%, 3/21/2015 ................................................................... 500,000 UYU 24 26
10.25%, 8/22/2015 ................................................................... 10,890,000 UYU 554 564
9.50%, 1/27/2016 .................................................................... 4,610,000 UYU 233 237
Index Linked, 2.25%, 8/23/2017 ......................................................... 5,583,786 UYU 263 286
Uruguay Treasury Bill, Strip, 9/9/2013 ...................................................... 26,400,000 UYU 1,159 1,285
5,451 6,159
Indonesia: 1.06%
Government of Indonesia
FR19, 14.25%, 6/15/2013 ............................................................. 11,600,000,000 IDR 1,468 1,250
FR34, 12.80%, 6/15/2021 ............................................................. 3,130,000,000 IDR 466 489
FR35, 12.90%, 6/15/2022 ............................................................. 8,930,000,000 IDR 1,165 1,427
FR36, 11.50%, 9/15/2019 ............................................................. 6,300,000,000 IDR 894 885
FR42, 10.25%, 7/15/2027 ............................................................. 2,900,000,000 IDR 358 419
FR44, 10.00%, 9/15/2024 ............................................................. 3,290,000,000 IDR 332 463
Indonesia Retail Bond, Senior Bond, ORI7, 7.95%, 8/15/2013 ................................... 8,300,000,000 IDR 993 873
5,676 5,806
Cayman Islands: 0.82%
ARES Collateralized Loan Obligations Funds, 2007–12A, B, Floating Rate Note, 11/25/2020 ........... 530,000 USD 450 494
Cent Collateralized Debt Obligations Ltd., 2007–15A, A2B, Floating Rate Note, 3/11/2021 ............. 203,000 USD 165 184
Columbus Nova Collateralized Loan Obligations Ltd., 2007–2A, A2, Floating Rate Note, 10/15/2021 ..... 150,000 USD 126 141
(2) Principal amount in 1000 Brazilian Real units
The accompanying notes are an integral part of these financial statements.
88 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Cayman Islands: 0.82% (Continued)
Commercial Industrial Finance Corp., 2007–3A, A1J, Floating Rate Note, 7/26/2021 .................... 960,000 USD $ 772 $ 877
Gleneagles Collateralized Loan Obligations Ltd., 2005–1A, A2, Floating Rate Note, 11/1/2017 ............. 2,000,000 USD 1,609 1,805
Westchester Collateralized Loan Obligations Ltd., 2007–1A, A1A, Floating Rate Note, 8/1/2022 ............ 1,066,486 USD 971 996
Average
Cost
Fair
Value
4,093 4,497
Ukraine: 0.73%
Government of Ukraine
7.75%, 9/23/2020 ....................................................................... 2,500,000 USD 2,434 2,545
Senior Note, 7.95%, 2/23/2021 ............................................................. 980,000 USD 896 1,006
Senior Note, 7.80%, 11/28/2022 ............................................................ 460,000 USD 459 460
3,789 4,011
Russia: 0.72%
CEDC Finance Corp. International Inc., Senior Secured Note, 9.125%, 12/1/2016 ....................... 700,000 USD 709 432
Gaz Capital SA
Senior Bond, (OJSC Gazprom), Loan Participation, 6.51%, 3/7/2022 ............................... 300,000 USD 331 354
Senior Note, (OJSC Gazprom), Loan Participation, 5.092%, 11/29/2015 ............................ 1,100,000 USD 1,121 1,170
Government of Russia, Senior Bond, 7.50%, 3/31/2030 ........................................... 1,565,500 USD 1,658 1,989
3,819 3,945
Germany: 0.58%
Kinove German Bondco GmbH, Senior Secured Bond, 10.00%, 6/15/2018 ............................ 900,000 EUR 1,261 1,298
KM Germany Holdings GmbH, 8.75%, 12/15/2020 ............................................... 500,000 EUR 639 681
Unitymedia Hessen/NRW
Senior Secured Note, 9.50%, 3/15/2021 ..................................................... 500,000 EUR 737 759
Senior Secured Note, 5.75%, 1/15/2023 ..................................................... 300,000 EUR 388 408
3,025 3,146
Spain: 0.56%
Abengoa Finance SAU, Senior Note, 8.875%, 11/1/2017 .......................................... 700,000 USD 702 657
Abengoa SA, Senior Note, 8.50%, 3/31/2016 .................................................... 700,000 EUR 897 937
Nara Cable Funding Ltd., Senior Note, 8.875%, 12/1/2018 ......................................... 300,000 USD 282 303
Telefonica Emisiones SAU, Senior Note, 5.462%, 2/16/2021 ....................................... 1,100,000 USD 1,003 1,158
2,884 3,055
Philippines: 0.51%
Government of the Philippines
Senior Bond, 5.25%, 1/7/2013 ............................................................. 12,450,000 PHP 286 301
Senior Bond, 8.75%, 3/3/2013 ............................................................. 25,560,000 PHP 622 625
Senior Bond, 7.00%, 1/27/2016 ............................................................ 8,720,000 PHP 226 231
Senior Note, 6.25%, 1/27/2014 ............................................................. 65,500,000 PHP 1,622 1,652
2,756 2,809
Japan: 0.50%
eAccess Ltd.
Senior Note, 8.25%, 4/1/2018 .............................................................. 600,000 USD 585 673
Senior Note, 8.375%, 4/1/2018 ............................................................. 300,000 EUR 366 442
Mitsui Sumitomo Insurance Co. Ltd., Junior Subordinated Note, 7.00% to 3/15/2022, Floating Rate Note
thereafter, 3/15/2072 ..................................................................... 1,400,000 USD 1,393 1,598
The accompanying notes are an integral part of these financial statements.
2,344 2,713
Franklin Templeton Investments Funds 89

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Italy: 0.38%
Seat Pagine Gialle SpA, 10.50%, 1/31/2017 ..................................................... 400,000 EUR $ 548 $ 314
Wind Acquisition Finance SA, Senior Secured Note, 11.75%, 7/15/2017 .............................. 1,400,000 USD 1,443 1,449
Wind Acquisition Holdings Finance SA, Senior Secured Note, Payment–In–Kind, 12.25%, 7/15/2017 ....... 271,814 EUR 343 331
Average
Cost
Fair
Value
2,334 2,094
Sri Lanka: 0.32%
Government of Sri Lanka
A, 8.50%, 1/15/2013 ..................................................................... 19,100,000 LKR 163 148
A, 13.50%, 2/1/2013 ..................................................................... 22,300,000 LKR 219 174
A, 7.50%, 8/1/2013 ...................................................................... 18,380,000 LKR 149 140
A, 7.00%, 3/1/2014 ...................................................................... 2,660,000 LKR 22 20
A, 11.25%, 7/15/2014 .................................................................... 66,800,000 LKR 605 516
A, 11.75%, 3/15/2015 .................................................................... 440,000 LKR 4 3
A, 6.50%, 7/15/2015 ..................................................................... 10,950,000 LKR 91 75
A, 11.00%, 8/1/2015 ..................................................................... 75,100,000 LKR 666 572
A, 6.40%, 8/1/2016 ...................................................................... 7,700,000 LKR 62 50
B, 11.75%, 4/1/2014 ..................................................................... 2,630,000 LKR 20 20
B, 6.60%, 6/1/2014 ...................................................................... 2,600,000 LKR 22 19
B, 6.40%, 10/1/2016 ..................................................................... 5,400,000 LKR 43 35
2,066 1,772
France: 0.31%
Compagnie Generale de Geophysique–Veritas
Senior Note, 7.75%, 5/15/2017 ............................................................. 800,000 USD 820 827
Senior Note, 6.50%, 6/1/2021 .............................................................. 800,000 USD 751 850
1,571 1,677
Iceland: 0.30%
Government of Iceland, 5.875%, 5/11/2022 ..................................................... 1,490,000 USD 1,523 1,659
Chile: 0.28%
Cencosud SA, Senior Note, 4.875%, 1/20/2023 .................................................. 1,500,000 USD 1,476 1,529
South Africa: 0.27%
Edcon Pty. Ltd., Senior Secured Note, Floating Rate Note, 6/15/2014 ................................. 1,200,000 EUR 1,354 1,493
Czech Republic: 0.23%
Central EURopean Media Enterprises Ltd., Senior Secured Note, 11.625%, 9/15/2016 ................... 800,000 EUR 1,036 1,097
CET 21 Spol SRO, Senior Secured Note, 9.00%, 11/1/2017 ......................................... 100,000 EUR 136 142
1,172 1,239
Jamaica: 0.20%
Digicel Group Ltd., Senior Note, 8.25%, 9/30/2020 ............................................... 1,000,000 USD 978 1,084
Singapore: 0.18%
Government of Singapore, Senior Bond, 1.625%, 4/1/2013 ......................................... 1,200,000 SGD 977 979
Vietnam: 0.14%
Government of Vietnam, 6.75%, 1/29/2020 ..................................................... 700,000 USD 731 791
Israel: 0.14%
Government of Israel
5.00%, 3/31/2013 ....................................................................... 1,320,000 ILS 380 354
3.50%, 9/30/2013 ....................................................................... 1,575,000 ILS 441 425
821 779
The accompanying notes are an integral part of these financial statements.
90 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Puerto Rico: 0.09%
Warner Chilcott Co. LLC, Term B–2 Loan, Floating Rate Note, 3/15/2018 ............................ 501,857 USD $ 491 $ 501
Total Bonds: ............................................................................. 460,471 475,119
Total Long-Term Investments: ................................................................ 463,040 478,409
SHORT-TERM SECURITIES: 2.84%
Bank of Negara Monetary Note
2.875%, 1/10/2013 ..................................................................... 354,000 MYR 116 115
2.90%, 1/15/2013 ...................................................................... 210,000 MYR 68 68
2.878%, 1/17/2013 ..................................................................... 460,000 MYR 151 149
2.875%, 2/19/2013 ..................................................................... 215,000 MYR 71 70
2.86%, 2/26/2013 ...................................................................... 100,000 MYR 33 32
2.88%, 3/7/2013 ....................................................................... 50,000 MYR 16 16
3.002%, 3/12/2013 ..................................................................... 320,000 MYR 101 103
2.872%, 3/14/2013 ..................................................................... 850,000 MYR 268 275
2.985%, 5/14/2013 ..................................................................... 40,000 MYR 13 13
2.887%, 5/23/2013 ..................................................................... 655,000 MYR 210 210
3.031%, 5/28/2013 ..................................................................... 115,000 MYR 37 37
2.96%, 6/4/2013 ....................................................................... 10,000 MYR 3 3
2.87%, 6/11/2013 ...................................................................... 810,000 MYR 259 260
2.919%, 6/18/2013 ..................................................................... 4,425,000 MYR 1,396 1,418
2.891%, 6/20/2013 ..................................................................... 960,000 MYR 307 308
2.87%, 7/11/2013 ...................................................................... 1,080,000 MYR 337 345
2.87%, 7/25/2013 ...................................................................... 960,000 MYR 300 307
2.87%, 8/6/2013 ....................................................................... 3,270,000 MYR 1,019 1,048
2.83%, 8/15/2013 ...................................................................... 4,030,000 MYR 1,255 1,285
2.831%, 8/27/2013 ..................................................................... 1,760,000 MYR 548 561
2.90%, 9/17/2013 ...................................................................... 5,000 MYR 2 2
2.90%, 9/26/2013 ...................................................................... 160,000 MYR 50 51
2.90%, 10/10/2013 ..................................................................... 205,000 MYR 65 65
2.90%, 10/22/2013 ..................................................................... 20,000 MYR 6 6
2.90%, 10/31/2013 ..................................................................... 10,000 MYR 3 3
2.91%, 11/19/2013 ..................................................................... 120,000 MYR 38 38
2.91%, 12/12/2013 ..................................................................... 10,000 MYR 3 3
Malaysia Treasury Bill
2.85%, 1/25/2013 ...................................................................... 50,000 MYR 16 16
2.87%, 3/22/2013 ...................................................................... 100,000 MYR 32 32
2.87%, 5/31/2013 ...................................................................... 100,000 MYR 32 32
Philippine Treasury Bill
1.73%, 1/9/2013 ....................................................................... 560,000 PHP 13 14
1.816%, 2/20/2013 ..................................................................... 1,120,000 PHP 26 27
2.152%, 3/6/2013 ...................................................................... 44,400,000 PHP 1,029 1,073
2.191%, 3/20/2013 ..................................................................... 2,170,000 PHP 50 53
0.839%, 4/3/2013 ...................................................................... 2,340,000 PHP 55 57
2.069%, 4/17/2013 ..................................................................... 1,900,000 PHP 44 46
1.609%, 5/2/2013 ...................................................................... 1,130,000 PHP 27 27
1.101%, 5/15/2013 ..................................................................... 1,410,000 PHP 34 34
1.99%, 5/29/2013 ...................................................................... 3,370,000 PHP 79 81
1.562%, 7/24/2013 ..................................................................... 2,230,000 PHP 53 54
1.732%, 9/4/2013 ...................................................................... 520,000 PHP 12 13
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 91
Average
Cost
Fair
Value

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
1.077%, 10/2/2013 ..................................................................... 4,370,000 PHP $ 102 $ 105
0.759%, 10/30/2013 .................................................................... 42,060,000 PHP 1,012 1,011
0.543%, 11/13/2013 .................................................................... 3,690,000 PHP 89 89
Singapore Treasury Bill
0.231%, 1/10/2013 ..................................................................... 170,000 SGD 136 138
0.152%, 1/24/2013 ..................................................................... 720,000 SGD 585 585
0.191%, 1/24/2013 ..................................................................... 136,000 SGD 110 111
0.189%, 2/7/2013 ...................................................................... 3,030,000 SGD 2,464 2,463
0.271%, 4/18/2013 ..................................................................... 170,000 SGD 136 138
0.216%, 5/2/2013 ...................................................................... 1,460,000 SGD 1,162 1,186
0.291%, 11/1/2013 ..................................................................... 90,000 SGD 74 73
Sri Lanka Treasury Bill
13.08%, 8/2/2013 ...................................................................... 790,000 LKR 6 6
12.25%, 10/11/2013 .................................................................... 610,000 LKR 4 4
Sweden Treasury Bill, 0.825%, 3/20/2013 ..................................................... 3,980,000 SEK 589 607
Uruguay Treasury Bill, 8.975%, 8/9/2013 ...................................................... 12,910,000 UYU 589 634
Total Short-Term Securities: ................................................................. 15,235 15,500
Transaction costs (Note 2) .................................................................... (1,236) —
TOTAL INVESTMENTS: 90.38% .............................................................. $477,039 493,909
NET UNREALIZED LOSS ON DERIVATIVES: (0.23%) ............................................ (1,267)
OTHER ASSETS, less liabilities: 9.85% ........................................................ 53,811
TOTAL NET ASSETS: 100.00% .............................................................. $546,453
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Average
Cost
Contract
Price
Fair
Value
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
BARCLAYS BANK PLC ................ A+ February 11, 2013 290 USD $ 288 145,800 CLP $ 301 502.6997 $13
BARCLAYS BANK PLC ................ A+ February 11, 2013 598 USD 594 300,400 CLP 620 502.7001 26
BARCLAYS BANK PLC ................ A+ February 13, 2013 179 USD 178 88,700 CLP 183 495.6997 5
BARCLAYS BANK PLC ................ A+ February 25, 2013 1,169 EUR 1,535 1,552 USD 1,544 1.3279 9
BARCLAYS BANK PLC ................ A+ April 5, 2013 133 EUR 174 177 USD 176 1.3348 2
BARCLAYS BANK PLC ................ A+ April 30, 2013 92 EUR 120 122 USD 121 1.3283 1
DEUTSCHE BANK AG ................ A+ January 7, 2013 121 USD 120 5,025 PHP 122 41.6101 2
DEUTSCHE BANK AG ................ A+ January 17, 2013 109 USD 108 84 EUR 110 0.7745 2
DEUTSCHE BANK AG ................ A+ January 28, 2013 28 USD 28 22 EUR 29 0.7743 1
DEUTSCHE BANK AG ................ A+ January 28, 2013 134 USD 133 105 EUR 138 0.7859 5
DEUTSCHE BANK AG ................ A+ January 28, 2013 134 USD 134 105 EUR 138 0.7793 4
DEUTSCHE BANK AG ................ A+ January 28, 2013 137 USD 136 106 EUR 139 0.7742 3
DEUTSCHE BANK AG ................ A+ January 28, 2013 139 USD 138 107 EUR 140 0.7693 2
DEUTSCHE BANK AG ................ A+ January 28, 2013 276 USD 274 212 EUR 278 0.7698 4
DEUTSCHE BANK AG ................ A+ January 28, 2013 282 USD 281 215 EUR 282 0.7613 1
DEUTSCHE BANK AG ................ A+ January 30, 2013 1,506 USD 1,497 1,195 EUR 1,568 0.7934 71
DEUTSCHE BANK AG ................ A+ January 30, 2013 1,887 USD 1,876 1,477 EUR 1,938 0.7827 62
DEUTSCHE BANK AG ................ A+ February 7, 2013 272 USD 271 168 GBP 272 0.6176 1
The accompanying notes are an integral part of these financial statements.
92 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ............ A+ February 7, 2013 430 USD $ 428 217,500 CLP $ 450 505.5200 $ 22
DEUTSCHE BANK AG ............ A+ February 25, 2013 198 USD 197 248 SGD 202 1.2503 5
DEUTSCHE BANK AG ............ A+ February 25, 2013 248 SGD 202 204 USD 203 0.8207 1
DEUTSCHE BANK AG ............ A+ February 25, 2013 269 USD 268 211 EUR 277 0.7842 9
DEUTSCHE BANK AG ............ A+ February 25, 2013 298 USD 296 232 EUR 304 0.7789 8
DEUTSCHE BANK AG ............ A+ February 25, 2013 348 USD 346 268 EUR 352 0.7705 6
DEUTSCHE BANK AG ............ A+ February 25, 2013 1,020 USD 1,015 798 EUR 1,049 0.7824 34
DEUTSCHE BANK AG ............ A+ February 25, 2013 1,348 EUR 1,769 1,789 USD 1,779 1.3279 10
DEUTSCHE BANK AG ............ A+ February 25, 2013 1,490 EUR 1,957 1,979 USD 1,968 1.3279 11
DEUTSCHE BANK AG ............ A+ February 25, 2013 1,534 USD 1,525 1,200 EUR 1,575 0.7824 50
DEUTSCHE BANK AG ............ A+ February 27, 2013 185 EUR 243 247 USD 245 1.3334 2
DEUTSCHE BANK AG ............ A+ February 28, 2013 124 USD 123 155 SGD 126 1.2539 3
DEUTSCHE BANK AG ............ A+ February 28, 2013 155 SGD 127 127 USD 127 0.8207 —
DEUTSCHE BANK AG ............ A+ February 28, 2013 142,643 USD 141,857 142,600 CAD 142,600 0.9997 743
DEUTSCHE BANK AG ............ A+ March 4, 2013 2,242 EUR 2,945 3,000 USD 2,984 1.3378 39
DEUTSCHE BANK AG ............ A+ March 19, 2013 206 SGD 168 169 USD 168 0.8207 —
DEUTSCHE BANK AG ............ A+ March 19, 2013 354 USD 352 448 SGD 365 1.2663 13
DEUTSCHE BANK AG ............ A+ March 21, 2013 384 USD 383 482 SGD 393 1.2542 10
DEUTSCHE BANK AG ............ A+ March 26, 2013 111 EUR 146 147 USD 146 1.3213 —
DEUTSCHE BANK AG ............ A+ April 2, 2013 37 EUR 49 50 USD 49 1.3284 —
DEUTSCHE BANK AG ............ A+ April 2, 2013 47 EUR 62 63 USD 63 1.3374 1
DEUTSCHE BANK AG ............ A+ April 2, 2013 3,814 EUR 5,014 5,067 USD 5,043 1.3284 29
DEUTSCHE BANK AG ............ A+ April 3, 2013 111 EUR 146 149 USD 148 1.3372 2
DEUTSCHE BANK AG ............ A+ April 5, 2013 121 USD 121 5,023 PHP 122 41.5591 1
DEUTSCHE BANK AG ............ A+ April 10, 2013 199 USD 198 8,248 PHP 200 41.4910 2
DEUTSCHE BANK AG ............ A+ April 17, 2013 202 USD 201 125 GBP 202 0.6177 1
DEUTSCHE BANK AG ............ A+ April 17, 2013 265 USD 264 164 GBP 266 0.6195 2
DEUTSCHE BANK AG ............ A+ April 25, 2013 101 EUR 133 134 USD 134 1.3273 1
DEUTSCHE BANK AG ............ A+ April 26, 2013 187 USD 186 10,465 INR 186 56.0609 —
DEUTSCHE BANK AG ............ A+ April 30, 2013 377 EUR 496 500 USD 498 1.3267 2
DEUTSCHE BANK AG ............ A+ April 30, 2013 485 EUR 638 643 USD 641 1.3267 3
DEUTSCHE BANK AG ............ A+ May 2, 2013 162 USD 161 101 GBP 163 0.6223 2
DEUTSCHE BANK AG ............ A+ May 2, 2013 196 USD 195 121 GBP 196 0.6196 1
DEUTSCHE BANK AG ............ A+ May 8, 2013 1,606 USD 1,600 813,000 CLP 1,663 506.1501 63
DEUTSCHE BANK AG ............ A+ May 10, 2013 1,989 USD 1,982 2,472 SGD 2,016 1.2425 34
DEUTSCHE BANK AG ............ A+ May 17, 2013 56 USD 56 35 GBP 57 0.6260 1
DEUTSCHE BANK AG ............ A+ May 17, 2013 1,496 USD 1,491 960 GBP 1,554 0.6415 63
DEUTSCHE BANK AG ............ A+ July 12, 2013 34 USD 35 21 GBP 35 0.6197 —
DEUTSCHE BANK AG ............ A+ July 12, 2013 112 USD 112 70 GBP 114 0.6261 2
DEUTSCHE BANK AG ............ A+ July 18, 2013 742 USD 741 377,668 CLP 767 508.7500 26
DEUTSCHE BANK AG ............ A+ July 18, 2013 1,065 USD 1,063 539,510 CLP 1,095 506.5000 32
DEUTSCHE BANK AG ............ A+ July 30, 2013 152 USD 151 95 GBP 154 0.6262 3
DEUTSCHE BANK AG ............ A+ August 26, 2013 199 USD 199 248 SGD 203 1.2484 4
DEUTSCHE BANK AG ............ A+ August 27, 2013 249 USD 249 309 SGD 253 1.2411 4
DEUTSCHE BANK AG ............ A+ August 30, 2013 124 USD 124 155 SGD 127 1.2497 3
DEUTSCHE BANK AG ............ A+ September 23, 2013 375 EUR 496 499 USD 499 1.3302 3
DEUTSCHE BANK AG ............ A+ October 4, 2013 201 USD 201 8,404 PHP 204 41.7999 3
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 93

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ............. A+ October 16, 2013 47 USD $ 48 1,965 PHP $ 49 41.6190 $ 1
HSBC BANK PLC ................. AA- March 19, 2013 405 USD 403 512 SGD 417 1.2637 14
HSBC BANK PLC ................. AA- March 21, 2013 307 USD 306 385 SGD 314 1.2544 8
HSBC BANK PLC ................. AA- April 11, 2013 99 USD 99 4,118 PHP 100 41.5410 1
HSBC BANK PLC ................. AA- April 15, 2013 79 USD 79 3,277 PHP 80 41.4779 1
HSBC BANK PLC ................. AA- April 16, 2013 143 EUR 188 189 USD 188 1.3230 —
HSBC BANK PLC ................. AA- October 4, 2013 162 USD 162 6,741 PHP 164 41.7141 2
HSBC BANK PLC ................. AA- October 7, 2013 242 USD 242 10,050 PHP 244 41.5891 2
HSBC BANK PLC ................. AA- October 11, 2013 139 USD 140 5,797 PHP 141 41.5609 1
HSBC BANK PLC ................. AA- November 20, 2013 48 USD 48 151 MYR 48 3.1212 —
JPMORGAN CHASE BANK, N.A. ..... A+ January 15, 2013 22 USD 22 927 PHP 22 41.4784 —
JPMORGAN CHASE BANK, N.A. ..... A+ January 31, 2013 27,080 INR 488 492 USD 489 0.0182 1
JPMORGAN CHASE BANK, N.A. ..... A+ February 8, 2013 288 USD 286 144,900 CLP 299 503.9001 13
JPMORGAN CHASE BANK, N.A. ..... A+ April 10, 2013 64 USD 64 2,654 PHP 65 41.4960 1
JPMORGAN CHASE BANK, N.A. ..... A+ April 23, 2013 36 EUR 48 48 USD 48 1.3234 —
JPMORGAN CHASE BANK, N.A. ..... A+ April 29, 2013 463 USD 461 234,301 CLP 480 506.3997 19
JPMORGAN CHASE BANK, N.A. ..... A+ May 6, 2013 1,072 USD 1,068 45,680 PHP 1,107 42.5930 39
JPMORGAN CHASE BANK, N.A. ..... A+ May 6, 2013 41,000 PHP 994 1,000 USD 996 0.0244 2
JPMORGAN CHASE BANK, N.A. ..... A+ August 20, 2013 571 USD 570 286,135 CLP 579 501.0003 9
JPMORGAN CHASE BANK, N.A. ..... A+ September 19, 2013 262 USD 263 321 SGD 263 1.2232 —
JPMORGAN CHASE BANK, N.A. ..... A+ October 11, 2013 79 USD 79 3,293 PHP 80 41.5410 1
UBS AG ........................ A March 1, 2013 1,110 EUR 1,458 1,496 USD 1,488 1.3476 30
UBS AG ........................ A March 28, 2013 60,292 USD 59,998 60,000 CAD 60,000 0.9952 2
Total Number of Contracts .. .. 88 $1,615
BARCLAYS BANK PLC ............. A+ January 11, 2013 199 EUR 260 254 USD 252 1.2796 (8)
BARCLAYS BANK PLC ............. A+ January 22, 2013 1,457 EUR 1,912 1,859 USD 1,848 1.2760 (64)
BARCLAYS BANK PLC ............. A+ January 28, 2013 697 EUR 914 909 USD 903 1.3039 (11)
BARCLAYS BANK PLC ............. A+ March 28, 2013 37,394 USD 37,212 37,200 CAD 37,200 0.9948 (12)
BARCLAYS BANK PLC ............. A+ April 19, 2013 130 EUR 171 171 USD 170 1.3152 (1)
BARCLAYS BANK PLC ............. A+ April 25, 2013 682 EUR 897 888 USD 884 1.3022 (13)
BARCLAYS BANK PLC ............. A+ August 1, 2013 206 EUR 271 253 USD 252 1.2300 (19)
BARCLAYS BANK PLC ............. A+ August 20, 2013 1,416 EUR 1,871 1,753 USD 1,751 1.2379 (120)
BARCLAYS BANK PLC ............. A+ August 23, 2013 132 EUR 174 165 USD 165 1.2522 (9)
BARCLAYS BANK PLC ............. A+ August 23, 2013 220 EUR 291 276 USD 276 1.2522 (15)
BARCLAYS BANK PLC ............. A+ August 26, 2013 1,159 EUR 1,531 1,452 USD 1,450 1.2528 (81)
BARCLAYS BANK PLC ............. A+ September 10, 2013 114 EUR 150 144 USD 144 1.2660 (6)
BARCLAYS BANK PLC ............. A+ September 12, 2013 111 EUR 146 142 USD 142 1.2837 (4)
BARCLAYS BANK PLC ............. A+ September 16, 2013 316 EUR 418 409 USD 409 1.2946 (9)
BARCLAYS BANK PLC ............. A+ September 19, 2013 74 EUR 98 97 USD 98 1.3173 —
BARCLAYS BANK PLC ............. A+ September 24, 2013 180 EUR 238 234 USD 234 1.2998 (4)
BARCLAYS BANK PLC ............. A+ October 11, 2013 1,386 EUR 1,835 1,802 USD 1,803 1.3005 (32)
BARCLAYS BANK PLC ............. A+ October 25, 2013 89 EUR 118 116 USD 116 1.3044 (2)
BARCLAYS BANK PLC ............. A+ November 5, 2013 218 EUR 289 283 USD 284 1.3018 (5)
DEUTSCHE BANK AG ............. A+ January 17, 2013 84 EUR 110 110 USD 109 1.3066 (1)
DEUTSCHE BANK AG ............. A+ January 24, 2013 93 EUR 122 121 USD 120 1.2975 (2)
DEUTSCHE BANK AG ............. A+ January 28, 2013 94 EUR 123 123 USD 122 1.3125 (1)
The accompanying notes are an integral part of these financial statements.
94 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ............... A+ January 28, 2013 197 EUR $ 258 256 USD $ 254 1.2992 $ (4)
DEUTSCHE BANK AG ............... A+ January 28, 2013 600 EUR 787 780 USD 775 1.3003 (12)
DEUTSCHE BANK AG ............... A+ January 29, 2013 29,400 CAD 29,400 29,438 USD 29,258 1.0013 (142)
DEUTSCHE BANK AG ............... A+ January 29, 2013 114,048 USD 113,350 113,300 CAD 113,300 0.9934 (50)
DEUTSCHE BANK AG ............... A+ January 30, 2013 759 EUR 996 1,000 USD 994 1.3172 (2)
DEUTSCHE BANK AG ............... A+ January 30, 2013 1,913 EUR 2,510 2,520 USD 2,505 1.3172 (5)
DEUTSCHE BANK AG ............... A+ February 7, 2013 168 GBP 272 264 USD 263 1.5710 (9)
DEUTSCHE BANK AG ............... A+ February 7, 2013 105,000 CLP 217 200 USD 199 0.0019 (18)
DEUTSCHE BANK AG ............... A+ February 7, 2013 112,500 CLP 232 228 USD 227 0.0020 (5)
DEUTSCHE BANK AG ............... A+ March 4, 2013 154 USD 154 8,529 INR 153 55.3364 (1)
DEUTSCHE BANK AG ............... A+ March 4, 2013 455 USD 453 343 EUR 451 0.7547 (2)
DEUTSCHE BANK AG ............... A+ March 7, 2013 189 USD 188 10,444 INR 187 55.3289 (1)
DEUTSCHE BANK AG ............... A+ March 11, 2013 51 USD 51 2,828 INR 51 55.3500 —
DEUTSCHE BANK AG ............... A+ March 18, 2013 128 USD 128 7,078 INR 127 55.1878 (1)
DEUTSCHE BANK AG ............... A+ March 18, 2013 700 EUR 920 916 USD 912 1.3089 (8)
DEUTSCHE BANK AG ............... A+ March 20, 2013 116 USD 115 6,447 INR 115 55.6289 —
DEUTSCHE BANK AG ............... A+ March 21, 2013 398 EUR 523 524 USD 522 1.3185 (1)
DEUTSCHE BANK AG ............... A+ March 28, 2013 84,136 USD 83,726 83,200 CAD 83,200 0.9889 (526)
DEUTSCHE BANK AG ............... A+ April 11, 2013 111 EUR 146 147 USD 146 1.3180 —
DEUTSCHE BANK AG ............... A+ April 11, 2013 133 EUR 175 175 USD 174 1.3117 (1)
DEUTSCHE BANK AG ............... A+ April 12, 2013 192 USD 191 10,421 INR 186 54.3165 (5)
DEUTSCHE BANK AG ............... A+ April 15, 2013 409 USD 407 22,346 INR 398 54.6870 (9)
DEUTSCHE BANK AG ............... A+ April 15, 2013 22,346 INR 398 388 USD 387 0.0174 (11)
DEUTSCHE BANK AG ............... A+ April 17, 2013 289 GBP 468 459 USD 457 1.5870 (11)
DEUTSCHE BANK AG ............... A+ April 22, 2013 95 USD 94 5,180 INR 92 54.6465 (2)
DEUTSCHE BANK AG ............... A+ April 30, 2013 1,023 USD 1,019 1,247 SGD 1,017 1.2191 (2)
DEUTSCHE BANK AG ............... A+ May 2, 2013 195 EUR 257 255 USD 255 1.3099 (2)
DEUTSCHE BANK AG ............... A+ May 2, 2013 222 GBP 359 359 USD 357 1.6146 (2)
DEUTSCHE BANK AG ............... A+ May 8, 2013 133,000 CLP 272 267 USD 266 0.0020 (6)
DEUTSCHE BANK AG ............... A+ May 8, 2013 245,000 CLP 501 498 USD 496 0.0020 (5)
DEUTSCHE BANK AG ............... A+ May 13, 2013 429 EUR 565 557 USD 556 1.2992 (9)
DEUTSCHE BANK AG ............... A+ May 17, 2013 995 GBP 1,610 1,590 USD 1,584 1.5978 (26)
DEUTSCHE BANK AG ............... A+ June 20, 2013 500 USD 499 242,675 CLP 494 485.3500 (5)
DEUTSCHE BANK AG ............... A+ June 27, 2013 383 EUR 505 481 USD 480 1.2552 (25)
DEUTSCHE BANK AG ............... A+ June 28, 2013 107 EUR 141 134 USD 134 1.2559 (7)
DEUTSCHE BANK AG ............... A+ July 5, 2013 7,336 EUR 9,674 9,277 USD 9,254 1.2646 (420)
DEUTSCHE BANK AG ............... A+ July 9, 2013 193 EUR 255 241 USD 240 1.2460 (15)
DEUTSCHE BANK AG ............... A+ July 12, 2013 92 GBP 149 142 USD 142 1.5490 (7)
DEUTSCHE BANK AG ............... A+ July 23, 2013 191 EUR 253 236 USD 236 1.2336 (17)
DEUTSCHE BANK AG ............... A+ July 25, 2013 109 EUR 144 134 USD 133 1.2214 (11)
DEUTSCHE BANK AG ............... A+ July 25, 2013 206 EUR 272 251 USD 251 1.2202 (21)
DEUTSCHE BANK AG ............... A+ July 26, 2013 96 EUR 126 116 USD 116 1.2139 (10)
DEUTSCHE BANK AG ............... A+ July 29, 2013 1,970 EUR 2,601 2,401 USD 2,397 1.2187 (204)
DEUTSCHE BANK AG ............... A+ July 30, 2013 391 GBP 633 612 USD 611 1.5673 (22)
DEUTSCHE BANK AG ............... A+ July 31, 2013 381 EUR 503 471 USD 471 1.2379 (32)
DEUTSCHE BANK AG ............... A+ August 22, 2013 1 EUR 1 1 USD 1 1.2595 —
DEUTSCHE BANK AG ............... A+ August 28, 2013 5 EUR 7 7 USD 7 1.2569 —
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 95

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ............... A+ August 28, 2013 69 EUR $ 91 87 USD $ 87 1.2609 $ (4)
DEUTSCHE BANK AG ............... A+ August 28, 2013 160 EUR 212 201 USD 201 1.2569 (11)
DEUTSCHE BANK AG ............... A+ August 28, 2013 390 EUR 516 490 USD 490 1.2569 (26)
DEUTSCHE BANK AG ............... A+ August 29, 2013 326 EUR 431 412 USD 412 1.2648 (19)
DEUTSCHE BANK AG ............... A+ September 4, 2013 301 EUR 398 380 USD 380 1.2635 (18)
DEUTSCHE BANK AG ............... A+ September 20, 2013 380 EUR 503 502 USD 502 1.3215 (1)
DEUTSCHE BANK AG ............... A+ September 23, 2013 99 EUR 131 130 USD 130 1.3098 (1)
DEUTSCHE BANK AG ............... A+ September 30, 2013 1,163 EUR 1,539 1,500 USD 1,500 1.2899 (39)
DEUTSCHE BANK AG ............... A+ October 7, 2013 278 EUR 369 361 USD 361 1.2948 (8)
DEUTSCHE BANK AG ............... A+ October 15, 2013 40 EUR 53 52 USD 52 1.2984 (1)
DEUTSCHE BANK AG ............... A+ October 23, 2013 664 USD 665 2,060 MYR 662 3.1005 (3)
DEUTSCHE BANK AG ............... A+ October 31, 2013 610 EUR 808 789 USD 790 1.2942 (18)
DEUTSCHE BANK AG ............... A+ November 4, 2013 115 EUR 153 151 USD 151 1.3050 (2)
DEUTSCHE BANK AG ............... A+ November 7, 2013 111 EUR 148 144 USD 144 1.2877 (4)
DEUTSCHE BANK AG ............... A+ November 14, 2013 300 EUR 398 394 USD 395 1.3132 (3)
DEUTSCHE BANK AG ............... A+ November 15, 2013 95 EUR 127 121 USD 122 1.2766 (5)
DEUTSCHE BANK AG ............... A+ November 19, 2013 28 EUR 37 36 USD 36 1.2848 (1)
DEUTSCHE BANK AG ............... A+ November 19, 2013 80 USD 80 249 MYR 80 3.1160 —
DEUTSCHE BANK AG ............... A+ December 13, 2013 500 EUR 664 652 USD 654 1.3048 (10)
HSBC BANK PLC ................... AA- February 8, 2013 458 USD 456 23,340 INR 420 50.9090 (36)
HSBC BANK PLC ................... AA- March 4, 2013 296 USD 295 16,385 INR 294 55.3265 (1)
HSBC BANK PLC ................... AA- March 11, 2013 50 USD 50 2,788 INR 50 55.2353 —
HSBC BANK PLC ................... AA- March 13, 2013 128 USD 127 7,040 INR 126 55.0861 (1)
HSBC BANK PLC ................... AA- April 3, 2013 1,000 USD 996 54,050 INR 964 54.0500 (32)
HSBC BANK PLC ................... AA- October 24, 2013 443 USD 443 1,374 MYR 441 3.1010 (2)
JPMORGAN CHASE BANK, N.A. ....... A+ January 15, 2013 432 USD 430 23,250 INR 420 53.7730 (10)
JPMORGAN CHASE BANK, N.A. ....... A+ January 16, 2013 1,352 USD 1,344 72,105 INR 1,302 53.3200 (42)
JPMORGAN CHASE BANK, N.A. ....... A+ January 31, 2013 514 USD 511 27,080 INR 487 52.6800 (24)
JPMORGAN CHASE BANK, N.A. ....... A+ March 19, 2013 262 USD 261 320 SGD 261 1.2208 —
JPMORGAN CHASE BANK, N.A. ....... A+ March 21, 2013 1,000 USD 995 55,600 INR 993 55.6000 (2)
JPMORGAN CHASE BANK, N.A. ....... A+ April 16, 2013 275 USD 274 15,009 INR 267 54.5221 (7)
JPMORGAN CHASE BANK, N.A. ....... A+ April 18, 2013 269 USD 268 14,733 INR 262 54.7089 (6)
JPMORGAN CHASE BANK, N.A. ....... A+ April 22, 2013 135 USD 134 7,360 INR 131 54.5763 (3)
JPMORGAN CHASE BANK, N.A. ....... A+ April 29, 2013 160 USD 159 8,900 INR 158 55.7351 (1)
JPMORGAN CHASE BANK, N.A. ....... A+ April 30, 2013 133 USD 133 7,414 INR 132 55.8468 (1)
JPMORGAN CHASE BANK, N.A. ....... A+ May 23, 2013 20 EUR 26 25 USD 25 1.2828 (1)
JPMORGAN CHASE BANK, N.A. ....... A+ June 5, 2013 1,520 USD 1,515 1,854 SGD 1,514 1.2203 (1)
JPMORGAN CHASE BANK, N.A. ....... A+ August 6, 2013 117 EUR 155 143 USD 143 1.2226 (12)
JPMORGAN CHASE BANK, N.A. ....... A+ October 18, 2013 98 USD 98 305 MYR 98 3.1065 —
JPMORGAN CHASE BANK, N.A. ....... A+ November 12, 2013 210 EUR 278 269 USD 269 1.2805 (9)
JPMORGAN CHASE BANK, N.A. ....... A+ November 20, 2013 94 EUR 125 120 USD 121 1.2766 (4)
UBS AG .......................... A January 29, 2013 87,341 USD 86,806 86,782 CAD 86,782 0.9936 (24)
UBS AG .......................... A February 28, 2013 18,315 USD 18,214 18,100 CAD 18,100 0.9882 (114)
UBS AG .......................... A August 22, 2013 350 EUR 463 433 USD 433 1.2377 (30)
UBS AG .......................... A August 26, 2013 2,398 EUR 3,168 3,000 USD 2,997 1.2512 (171)
UBS AG .......................... A September 17, 2013 294 EUR 389 380 USD 380 1.2938 (9)
UBS AG .......................... A September 20, 2013 534 EUR 707 706 USD 706 1.3217 (1)
The accompanying notes are an integral part of these financial statements.
96 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
UBS AG ............................. A October 7, 2013 1,070 EUR $1,416 1,386 USD $1,386 1.2951 $ (30)
UBS AG ............................. A November 20, 2013 592 EUR 785 758 USD 759 1.2801 (26)
UBS AG ............................. A December 9, 2013 1,325 EUR 1,758 1,739 USD 1,743 1.3128 (15)
Total Number of Contracts ...........119 $ (2,882)
Net Unrealized Loss .................. $(1,267)
CREDIT DEFAULT SWAP CONTRACT
As at December 31, 2012, the Fund has the following credit default swap contract outstanding. The Fund has entered the contract to sell
protection to create a long position. Cash in the amount of $857,000 is held as collateral by the counterparty at the period end and is shown as
Held in Trust on the Statement of Net Assets.
Description Counterparty
Credit
Rating
Expiration
Date
Payment
Rate
Notional
Amount
Upfront
Premiums
Paid/
(Received)
Market
Value
Unrealized
Appreciation/
(Depreciation)
(000s) (000s) (000s) (000s)
Contract to Sell Protection
Traded Index
MCDX.NA.19 ................................................... Deutsche Bank AG A+ 12/20/2017 1.00% $8,000 $(202) $(202) $—
Total Unrealized Appreciation/(Depreciation) ......................... $—
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................ 9.10 10.15
AA ................................. 9.00 7.95
A .................................. 11.77 15.80
BBB ............................... 9.56 8.00
BB ................................. 21.51 22.29
B .................................. 22.07 21.71
CCC ................................ 6.69 6.84
CC ................................. 0.06 0.10
C .................................. — 0.07
D .................................. 0.02 0.15
Not Rated ........................... — 0.39
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s
and Fitch ratings.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 97

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 493,909 $ 536,399
Canadian 89 —
Foreign
Receivables
51,628 24,968
Held in Trust 857 960
Investment securities sold 1,671 1,194
Capital units sold 112 418
Interest and withholding tax 6,316 7,337
Unrealized gain on derivatives 1,615 8,711
Other assets (Note 8) 22 18
Total assets
Liabilities
Payables
556,219 580,005
Investment securities purchased 6,614 5,984
Capital units redeemed 23 240
Management fees 75 59
Foreign capital taxes payable 92 119
Accrued expenses 80 70
Unrealized loss on derivatives 2,882 1,770
Total liabilities 9,766 8,242
Net assets $ 546,453 $ 571,763
Total net assets per series (000s)
Series A $44,533 $28,883
Series F 5,242 2,477
Series I 1,066 142
Series O 495,612 540,261
Number of units outstanding (Note 3)
Series A 6,397,540 4,410,425
Series F 683,748 346,028
Series I 93,549 13,280
Series O 57,311,747 67,732,822
Net assets per unit — CAD
Series A $6.96 $6.55
Series F 7.67 7.16
Series I 11.39 10.68
Series O 8.65 7.97
Net assets per unit — USD
Series A $7.01 $6.43
Series F 7.72 7.03
Series I 11.47 10.49
Series O 8.71 7.82
Cost of investments held (000s) $477,039 $544,393
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin Strategic Income Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $0; 2011 — $1) $ 32 $ 25
Income (loss) on derivatives
Interest (net of foreign taxes withheld (000s) —
172 251
2012 — $243; 2011 — $468) 32,569 34,850
Total investment income
Expenses
32,773 35,126
Management fees (Note 4(a)) 701 556
Transfer agent fees (Note 4(c)) 143 111
Custodian fees 9 12
Legal fees 8 3
Audit fees 25 25
Unitholder reporting costs 15 10
Independent review committee fees 1 1
Registration fees 19 19
Other expenses (Note 7) 93 88
Total expenses 1,014 825
Expenses waived/paid by Manager (Note 6) (277) (149)
Net expenses 737 676
Net investment income (loss) 32,036 34,450
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments and
derivatives
Net realized and/or unrealized foreign exchange
1,569 (6,222)
gain (loss)
Net change in unrealized appreciation
(depreciation) in value of investments and
25,871 (4,660)
derivatives 16,656 (921)
Transaction costs (Note 11) (569) (462)
Net gain (loss) on investments 43,527 (12,265)
Increase (decrease) in net assets from operations $ 75,563 $ 22,185
Increase (decrease) in net assets from operations
per series (000s)
Series A $3,750 $376
Series F 415 105
Series I 36 (1)
Series O 71,362 21,705
Increase (decrease) in net assets from operations
per unit
Series A $0.73 $0.09
Series F 0.89 0.24
Series I 1.07 (0.09)
Series O 1.10 0.31
The accompanying notes are an integral part of these financial statements.
98 Franklin Templeton Investments Funds

Franklin Strategic Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 75,563 $ 22,185 $ 3,750 $ 376 $ 415 $ 105
Distributions to unitholders
From net investment income (29,091) (35,170) (1,750) (1,654) (180) (179)
From capital gains — — — — — —
From return of capital — — — — — —
(29,091) (35,170) (1,750) (1,654) (180) (179)
Capital unit transactions
Subscriptions 129,712 205,564 20,586 11,229 3,225 2,561
Reinvestments 28,617 34,692 1,348 1,254 149 151
Redemptions (230,111) (178,562) (8,284) (7,484) (844) (3,009)
(71,782) 61,694 13,650 4,999 2,530 (297)
Increase (decrease) in net assets for the period (25,310) 48,709 15,650 3,721 2,765 (371)
Net assets — beginning of period 571,763 523,054 28,883 25,162 2,477 2,848
Net assets — end of period $ 546,453 $ 571,763 $ 44,533 $ 28,883 $ 5,242 $ 2,477
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 36 $ (1) $ 71,362 $ 21,705
Distributions to unitholders
From net investment income (19) (6) (27,142) (33,331)
From capital gains — — — —
From return of capital — — — —
(19) (6) (27,142) (33,331)
Capital unit transactions
Subscriptions 902 140 104,999 191,634
Reinvestments 16 3 27,104 33,284
Redemptions (11) — (220,972) (168,069)
907 143 (88,869) 56,849
Increase (decrease) in net assets for the period 924 136 (44,649) 45,223
Net assets — beginning of period 142 6 540,261 495,038
Net assets — end of period $ 1,066 $ 142 $ 495,612 $ 540,261
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 99

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin U.S. Core Equity Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 98.60%
COMMON STOCKS: 98.60%
Pharmaceuticals: 11.88%
Merck & Co. Inc. . ...................... 125,034 $ 4,432 $ 5,086
Roche Holding AG ..................... 28,020 4,468 5,594
Teva Pharmaceutical Industries Ltd., American
Depositary Receipt ................... 134,370 5,560 4,985
Watson Pharmaceuticals Inc. .............. 62,330 3,745 5,323
18,205 20,988
Chemicals: 10.97%
Celanese Corp., A ...................... 89,440 3,312 3,956
CF Industries Holdings Inc. ............... 16,860 2,954 3,401
LyondellBasell Industries NV, A . . . . ........ 133,800 4,574 7,590
PPG Industries Inc. ..................... 33,040 3,129 4,441
13,969 19,388
Diversified Financial Services: 7.01%
Citigroup Inc. . ........................ 146,130 5,358 5,745
JPMorgan Chase & Co. .................. 152,090 6,025 6,645
11,383 12,390
Oil, Gas & Consumable Fuels: 6.70%
Anadarko Petroleum Corp. ................ 90,100 6,345 6,651
Marathon Oil Corp. ..................... 170,430 4,806 5,188
11,151 11,839
Food Products: 5.59%
Bunge Ltd. . . . ........................ 63,530 3,949 4,583
Mead Johnson Nutrition Co., A . . . . . ........ 80,820 5,475 5,289
9,424 9,872
IT Services: 5.44%
International Business Machines Corp. . ...... 20,990 3,958 3,994
Visa Inc., A . . . ........................ 37,400 5,343 5,627
9,301 9,621
Textiles, Apparel & Luxury Goods: 3.66%
NIKE Inc., B . . ........................ 126,256 5,711 6,471
Food & Staples Retailing: 3.55%
CVS Caremark Corp. .................... 130,730 5,006 6,281
Electronic Equipment, Instruments & Components: 3.36%
Corning Inc. . . ........................ 474,470 7,356 5,943
Software: 3.28%
Adobe Systems Inc. .................... 154,870 5,381 5,795
Insurance: 3.24%
The Hartford Financial Services Group Inc. .... 257,090 5,389 5,730
Auto Components: 3.24%
BorgWarner Inc. . ...................... 80,520 5,095 5,728
Internet Software & Services: 3.14%
Google Inc., A . ........................ 7,890 5,364 5,558
Average
Cost
Fair
Value
Shares
(000s) (000s)
Energy Equipment & Services: 3.12%
Schlumberger Ltd. ..................... 80,200 $ 5,485 $ 5,519
Consumer Finance: 3.09%
Capital One Financial Corp. ............... 94,750 4,865 5,453
Specialty Retail: 3.08%
Guess? Inc. .......................... 223,240 6,482 5,435
Air Freight & Logistics: 2.93%
FedEx Corp. .......................... 56,930 4,917 5,187
Capital Markets: 2.66%
BlackRock Inc. ........................ 22,880 3,950 4,698
Communications Equipment: 2.35%
Cisco Systems Inc. ..................... 212,970 3,696 4,157
Semiconductors & Semiconductor Equipment: 2.31%
Maxim Integrated Products Inc. ............ 139,580 3,099 4,075
Health Care Providers & Services: 2.15%
Aetna Inc. . . ......................... 82,430 3,128 3,792
Metals & Mining: 2.08%
Barrick Gold Corp. ..................... 105,580 3,531 3,671
Road & Rail: 2.01%
Norfolk Southern Corp. .................. 57,930 3,537 3,557
Machinery: 1.76%
Gardner Denver Inc. .................... 45,710 3,105 3,109
Total Common Stocks: ................... 158,530 174,257
Total Long-Term Investments: .............. 158,530 174,257
Transaction costs (Note 2) .................. (197) —
TOTAL INVESTMENTS: 98.60% ............. $158,333 174,257
OTHER ASSETS, less liabilities: 1.40% ....... 2,483
TOTAL NET ASSETS: 100.00% ............. $176,740
The accompanying notes are an integral part of these financial statements.
100 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 174,257 $ 147,412
Canadian — 4
Foreign
Receivables
2,705 65
Investment securities sold 2,973 17
Capital units sold 10 259
Dividends and withholding tax 369 483
Other assets (Note 8) 5 20
Total assets
Liabilities
Payables
180,319 148,260
Investment securities purchased 3,544 597
Capital units redeemed — 263
Management fees 6 11
Accrued expenses 29 26
Total liabilities 3,579 897
Net assets $ 176,740 $ 147,363
Total net assets per series (000s)
Series A $2,858 $2,973
Series F 249 103
Series O 173,633 144,287
Number of units outstanding (Note 3)
Series A 333,465 358,127
Series F 27,490 11,793
Series O 17,573,063 15,490,002
Net assets per unit — CAD
Series A $8.57 $8.31
Series F 9.08 8.70
Series O 9.88 9.32
Net assets per unit — USD
Series A $8.63 $8.15
Series F 9.14 8.54
Series O 9.95 9.14
Cost of investments held (000s) $158,333 $155,418
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin U.S. Core Equity Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $746; 2011 — $634) $ 3,055 $ 3,590
Interest 3 3
Total investment income
Expenses
3,058 3,593
Management fees (Note 4(a)) 70 67
Transfer agent fees (Note 4(c)) 21 18
Custodian fees — —
Legal fees 3 1
Audit fees 20 19
Unitholder reporting costs 8 6
Independent review committee fees 1 1
Registration fees 16 16
Other expenses (Note 7) 14 11
Total expenses 153 139
Expenses waived/paid by Manager (Note 6) (66) (55)
Net expenses 87 84
Net investment income (loss) 2,971 3,509
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(16,442) 7,776
gain (loss)
Net change in unrealized appreciation
(737) (427)
(depreciation) in value of investments 23,930 (13,770)
Transaction costs (Note 11) (521) (304)
Net gain (loss) on investments 6,230 (6,725)
Increase (decrease) in net assets from operations $ 9,201 $ (3,216)
Increase (decrease) in net assets from operations
per series (000s)
Series A $90 $(95)
Series F 8 (4)
Series O 9,103 (3,117)
Increase (decrease) in net assets from operations
per unit
Series A $0.24 $(0.26)
Series F 0.33 (0.55)
Series O 0.37 (0.16)
Franklin Templeton Investments Funds 101

Franklin U.S. Core Equity Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 9,201 $ (3,216) $ 90 $ (95) $ 8 $ (4)
Distributions to unitholders
From net investment income (1,637) (1,029) (25) (21) (2) (1)
From capital gains — — — — — —
From return of capital — — — — — —
(1,637) (1,029) (25) (21) (2) (1)
Capital unit transactions
Subscriptions 147,746 102,068 1,074 1,389 144 95
Reinvestments 1,636 1,028 24 20 2 1
Redemptions (127,569) (103,223) (1,278) (1,137) (6) (10)
21,813 (127) (180) 272 140 86
Increase (decrease) in net assets for the period 29,377 (4,372) (115) 156 146 81
Net assets — beginning of period 147,363 151,735 2,973 2,817 103 22
Net assets — end of period $ 176,740 $ 147,363 $ 2,858 $ 2,973 $ 249 $ 103
Series O
2012 2011
Increase (decrease) in net assets from operations $ 9,103 $ (3,117)
Distributions to unitholders
From net investment income (1,610) (1,007)
From capital gains — —
From return of capital — —
Capital unit transactions
(1,610) (1,007)
Subscriptions 146,528 100,584
Reinvestments 1,610 1,007
Redemptions (126,285) (102,076)
21,853 (485)
Increase (decrease) in net assets for the period 29,346 (4,609)
Net assets — beginning of period 144,287 148,896
Net assets — end of period $ 173,633 $ 144,287
The accompanying notes are an integral part of these financial statements.
102 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin U.S. Rising Dividends Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 96.17%
COMMON STOCKS: 96.17%
Health Care Equipment & Supplies: 13.86%
Abbott Laboratories ..................... 237,040 $ 11,899 $ 15,424
Becton, Dickinson and Co. ................ 217,295 16,254 16,878
Hill–Rom Holdings Inc. .................. 53,672 1,605 1,519
Medtronic Inc. ........................ 509,500 19,035 20,758
Stryker Corp. . ........................ 337,590 17,173 18,378
Teleflex Inc. . . ........................ 84,180 4,868 5,960
West Pharmaceutical Services Inc. . . ........ 110,223 4,043 5,991
74,877 84,908
Chemicals: 10.63%
Air Products and Chemicals Inc. . . . ........ 283,000 21,882 23,620
Albemarle Corp. . ...................... 339,455 17,998 20,945
Ecolab Inc. . . ........................ 86,100 4,042 6,148
Praxair Inc. . . ........................ 132,621 10,713 14,409
54,635 65,122
Oil, Gas & Consumable Fuels: 9.60%
Chevron Corp. ........................ 267,200 26,620 28,721
Exxon Mobil Corp. ...................... 207,500 16,512 17,848
Occidental Petroleum Corp. ............... 161,285 13,110 12,273
56,242 58,842
Machinery: 8.30%
Donaldson Co. Inc. .................... 72,568 1,479 2,367
Dover Corp. . . ........................ 336,836 16,983 22,001
Pentair Ltd. . . ........................ 542,280 20,459 26,473
38,921 50,841
Food & Staples Retailing: 5.34%
Walgreen Co. . ........................ 324,200 11,237 11,924
Wal–Mart Stores Inc. ................... 307,100 16,754 20,821
27,991 32,745
Pharmaceuticals: 5.19%
Johnson & Johnson ..................... 374,640 23,423 26,085
Pfizer Inc. . . . ........................ 229,850 6,117 5,728
29,540 31,813
IT Services: 4.52%
International Business Machines Corp. . ...... 145,600 21,083 27,704
Aerospace & Defense: 4.40%
General Dynamics Corp. ................. 84,500 5,439 5,814
United Technologies Corp. ................ 259,496 17,958 21,138
23,397 26,952
Household Products: 4.26%
Colgate–Palmolive Co. ................... 62,981 5,036 6,541
The Procter & Gamble Co. ................ 289,760 18,575 19,545
23,611 26,086
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Electrical Equipment: 4.19%
Brady Corp., A ........................ 197,728 $ 6,562 $ 6,554
Roper Industries Inc. .................... 172,790 9,942 19,122
16,504 25,676
Insurance: 4.04%
Aflac Inc. . . ......................... 72,739 3,279 3,837
Arthur J. Gallagher & Co. ................. 79,190 2,268 2,724
Erie Indemnity Co., A .................... 132,658 7,540 9,119
Mercury General Corp. .................. 23,590 1,269 930
Old Republic International Corp. ............ 348,729 7,996 3,689
RLI Corp. . . . ......................... 29,790 1,686 1,911
The Chubb Corp. ...................... 34,200 2,008 2,558
26,046 24,768
Food Products: 4.01%
Archer–Daniels–Midland Co. .............. 559,410 15,782 15,213
McCormick & Co. Inc. .................. 148,387 5,854 9,359
21,636 24,572
Auto Components: 2.99%
Johnson Controls Inc. ................... 600,432 17,574 18,291
Multiline Retail: 2.93%
Family Dollar Stores Inc. ................. 284,610 11,974 17,925
Hotels, Restaurants & Leisure: 2.79%
McDonald’s Corp. ...................... 195,200 16,152 17,108
Beverages: 2.71%
PepsiCo Inc. ......................... 244,467 15,972 16,618
Textiles, Apparel & Luxury Goods: 1.36%
NIKE Inc., B .......................... 163,200 6,443 8,364
Media: 1.00%
John Wiley & Sons Inc., A ................ 157,710 6,991 6,108
Commercial Services & Supplies: 0.89%
ABM Industries Inc. .................... 101,147 2,292 2,004
Cintas Corp. .......................... 84,598 2,704 3,435
4,996 5,439
Diversified Consumer Services: 0.76%
Hillenbrand Inc. ....................... 127,914 3,266 2,871
Matthews International Corp., A ............ 56,700 1,819 1,807
5,085 4,678
Containers & Packaging: 0.57%
Bemis Co. Inc. ........................ 104,660 3,355 3,479
Metals & Mining: 0.52%
Nucor Corp. .......................... 74,167 3,742 3,180
Household Durables: 0.37%
Leggett & Platt Inc. .................... 83,444 2,155 2,257
Specialty Retail: 0.35%
Ross Stores Inc. ....................... 40,000 2,134 2,151
Franklin Templeton Investments Funds 103

Franklin U.S. Rising Dividends Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Industrial Conglomerates: 0.28%
Carlisle Companies Inc. .................. 29,404 $ 1,228 $ 1,716
Capital Markets: 0.26%
State Street Corp. ....................... 34,041 2,307 1,590
Trading Companies & Distributors: 0.05%
W.W. Grainger Inc. ...................... 1,500 281 302
Total Common Stocks: .................... 514,872 589,235
Total Long-Term Investments: ............... 514,872 589,235
Transaction costs (Note 2) ................... (171) —
TOTAL INVESTMENTS: 96.17% .............. $514,701 589,235
OTHER ASSETS, less liabilities: 3.83% ........ 23,496
TOTAL NET ASSETS: 100.00% .............. $612,731
The accompanying notes are an integral part of these financial statements.
104 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 589,235 $ 504,075
Canadian 14 43
Foreign
Receivables
23,062 32,783
Investment securities sold — 18
Capital units sold 101 356
Dividends 483 675
Other assets (Note 8) 29 23
Total assets
Liabilities
Payables
612,924 537,973
Investment securities purchased 1 —
Capital units redeemed 44 363
Management fees 58 24
Accrued expenses 90 58
Total liabilities 193 445
Net assets $ 612,731 $ 537,528
Total net assets per series (000s)
Series A $29,706 $9,691
Series F 3,597 2,175
Series O 576,327 523,394
Series T 3,101 2,268
Number of units outstanding (Note 3)
Series A 1,307,667 444,315
Series F 138,730 88,339
Series O 18,506,385 17,955,289
Series T 394,179 277,065
Net assets per unit — CAD
Series A $22.72 $21.81
Series F 25.93 24.61
Series O 31.14 29.15
Series T 7.87 8.19
Net assets per unit — USD
Series A $22.87 $21.40
Series F 26.11 24.15
Series O 31.35 28.60
Cost of investments held (000s) $514,701 $455,226
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin U.S. Rising Dividends Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $2,113; 2011 — $1,594) $ 12,090 $ 9,030
Interest 6 5
Total investment income
Expenses
12,096 9,035
Management fees (Note 4(a)) 530 234
Transfer agent fees (Note 4(c)) 148 70
Custodian fees 3 1
Legal fees 1 1
Audit fees 20 19
Unitholder reporting costs 17 11
Independent review committee fees 1 1
Registration fees 18 18
Other expenses (Note 7) 191 90
Total expenses 929 445
Expenses waived/paid by Manager (Note 6) (311) (156)
Net expenses 618 289
Net investment income (loss) 11,478 8,746
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
7,361 7,388
gain (loss)
Net change in unrealized appreciation
581 (1,054)
(depreciation) in value of investments 25,685 23,999
Transaction costs (Note 11) (54) (70)
Net gain (loss) on investments 33,573 30,263
Increase (decrease) in net assets from operations $ 45,051 $ 39,009
Increase (decrease) in net assets from operations
per series (000s)
Series A $1,070 $509
Series F 189 142
Series O 43,640 38,237
Series T 152 121
Increase (decrease) in net assets from operations
per unit
Series A $1.20 $1.34
Series F 1.71 1.81
Series O 2.45 2.49
Series T 0.41 0.55
Franklin Templeton Investments Funds 105

Franklin U.S. Rising Dividends Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 45,051 $ 39,009 $ 1,070 $ 509 $ 189 $ 142
Distributions to unitholders
From net investment income (8,119) (8,530) (389) (159) (48) (35)
From capital gains — — — — — —
From return of capital (243) (152) — — — —
(8,362) (8,682) (389) (159) (48) (35)
Capital unit transactions
Subscriptions 184,318 283,252 22,282 4,900 1,932 1,091
Reinvestments 8,186 8,604 357 151 44 34
Redemptions (153,990) (161,398) (3,305) (2,041) (695) (589)
38,514 130,458 19,334 3,010 1,281 536
Increase (decrease) in net assets for the period 75,203 160,785 20,015 3,360 1,422 643
Net assets — beginning of period 537,528 376,743 9,691 6,331 2,175 1,532
Net assets — end of period $ 612,731 $ 537,528 $ 29,706 $ 9,691 $ 3,597 $ 2,175
Series O Series T
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 43,640 $ 38,237 $ 152 $ 121
Distributions to unitholders
From net investment income (7,640) (8,299) (42) (37)
From capital gains — — — —
From return of capital — — (243) (152)
Capital unit transactions
(7,640) (8,299) (285) (189)
Subscriptions 158,290 276,234 1,814 1,027
Reinvestments 7,641 8,299 144 120
Redemptions (148,998) (158,149) (992) (619)
16,933 126,384 966 528
Increase (decrease) in net assets for the period 52,933 156,322 833 460
Net assets — beginning of period 523,394 367,072 2,268 1,808
Net assets — end of period $ 576,327 $ 523,394 $ 3,101 $ 2,268
The accompanying notes are an integral part of these financial statements.
106 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin World Growth Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.90%
COMMON STOCKS: 97.90%
United States: 32.95%
Amazon.com Inc. ....................... 27,000 $ 4,228 $ 6,738
American Tower Corp. ................... 75,000 3,377 5,754
Apple Inc. . . .......................... 13,000 4,813 6,882
Autodesk Inc. . . . ...................... 195,000 6,346 6,843
Danaher Corp. . . . ...................... 132,000 5,769 7,332
Informatica Corp. ....................... 255,000 9,510 7,677
IntercontinentalExchange Inc. .............. 55,000 6,852 6,761
Invesco Ltd. . .......................... 250,000 5,333 6,476
Praxair Inc. . .......................... 63,000 5,943 6,845
Priceline.com Inc. . . . ................... 10,500 5,538 6,478
Schlumberger Ltd. . . . ................... 112,000 8,021 7,708
U.S. Bank Corporation ................... 195,000 6,461 6,186
Visa Inc., A . .......................... 44,000 3,232 6,620
75,423 88,300
Hong Kong: 8.49%
Hang Lung Properties Ltd. ................ 1,850,000 6,784 7,290
Li & Fung Ltd. . . . ...................... 4,550,000 8,477 7,977
Noble Group Ltd. ....................... 7,800,000 8,239 7,486
23,500 22,753
United Kingdom: 7.89%
Adjustable Rate Mortgage Holdings PLC . ..... 550,000 4,738 6,894
Admiral Group PLC . . ................... 420,000 9,080 7,956
Reckitt Benckiser Group PLC .............. 100,000 5,377 6,305
19,195 21,155
Australia: 7.46%
Cochlear Ltd. .......................... 74,000 4,080 6,099
CSL Ltd. . ............................ 120,000 4,053 6,735
WorleyParsons Ltd. . . ................... 292,300 7,189 7,158
15,322 19,992
Italy: 5.33%
Luxottica Group SpA . . ................... 160,000 4,522 6,558
Saipem SpA .......................... 200,000 8,063 7,736
12,585 14,294
Germany: 5.30%
MTU Aero Engines Holding AG ............. 74,000 3,737 6,706
Symrise AG . .......................... 210,000 5,996 7,492
9,733 14,198
Switzerland: 4.98%
SGSSA .............................. 3,000 5,575 6,592
Syngenta AG .......................... 17,000 4,973 6,763
10,548 13,355
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Sweden: 4.75%
Elekta AB, B .................... 410,000 $ 4,280 $ 6,339
Getinge AB, B .................. 190,000 4,295 6,386
8,575 12,725
Singapore: 2.92%
United Overseas Bank Ltd. ......... 480,000 6,889 7,822
Belgium: 2.77%
Umicore SA .................... 135,000 6,723 7,423
Argentina: 2.72%
MercadoLibre Inc. ............... 93,000 6,802 7,280
Spain: 2.65%
Inditex SA ..................... 51,000 4,320 7,116
Canada: 2.57%
Bank of Nova Scotia .............. 120,000 6,775 6,890
Denmark: 2.46%
Novo Nordisk AS, B .............. 41,000 6,154 6,594
China: 2.40%
Hengan International Group Co. Ltd.
Netherlands: 2.26%
. . 720,000 5,108 6,441
ASML Holding NV ................ 95,000 5,108 6,050
Ireland: 0.00%
Irish Bank Resolution Corp. Ltd. ...... 700,000 6,314 —
Total Common Stocks: ............. 229,074 262,388
Total Long-Term Investments: ........ 229,074 262,388
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 1.45%
Bank of Montreal, Term Deposit,
0.90%, 1/2/2013 .............. 3,900,000 CAD 3,900 3,900
Total Short-Term Securities: ......... 3,900 3,900
Transaction costs (Note 2) ............ (357) —
TOTAL INVESTMENTS: 99.35% ...... $232,617 266,288
OTHER ASSETS, less liabilities:
0.65% ....................... 1,733
TOTAL NET ASSETS: 100.00% ....... $268,021
Franklin Templeton Investments Funds 107

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 266,288 $ 225,332
Canadian
Receivables
98 52
Investment securities sold 1,314 —
Capital units sold 1 185
Dividends, interest and withholding tax 385 359
Other assets (Note 8) 13 26
Total assets
Liabilities
Payables
268,099 225,954
Investment securities purchased 1 —
Capital units redeemed 5 191
Management fees 24 28
Accrued expenses 48 53
Total liabilities 78 272
Net assets $ 268,021 $ 225,682
Total net assets per series (000s)
Series A $10,424 $12,036
Series F 4,417 4,451
Series O 252,770 208,582
Series T 410 613
Number of units outstanding (Note 3)
Series A 1,017,436 1,363,444
Series F 423,901 501,377
Series O 23,672,985 23,275,782
Series T 30,281 48,731
Net assets per unit — CAD
Series A $10.25 $8.83
Series F 10.42 8.88
Series O 10.68 8.96
Series T 13.55 12.58
Net assets per unit — USD
Series A $10.32 $8.66
Series F 10.49 8.71
Series O 10.75 8.79
Cost of investments held (000s) $232,617 $229,154
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin World Growth Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $272; 2011 — $185) $ 4,797 $ 4,243
Interest 67 68
Total investment income
Expenses
4,864 4,311
Management fees (Note 4(a)) 310 191
Transfer agent fees (Note 4(c)) 192 94
Custodian fees 2 1
Legal fees 1 —
Audit fees 20 27
Unitholder reporting costs 11 9
Independent review committee fees 1 1
Registration fees 17 10
Other expenses (Note 7) 30 10
Total expenses 584 343
Expenses waived/paid by Manager (Note 6) (207) (99)
Net expenses 377 244
Net investment income (loss) 4,487 4,067
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
5,659 (4,368)
gain (loss)
Net change in unrealized appreciation
(94) 32
(depreciation) in value of investments 37,493 (21,164)
Transaction costs (Note 11) (296) (346)
Net gain (loss) on investments 42,762 (25,846)
Increase (decrease) in net assets from operations $ 47,249 $ (21,779)
Increase (decrease) in net assets from operations
per series (000s)
Series A $1,943 $(1,798)
Series F 807 (583)
Series O 44,415 (19,311)
Series T 84 (87)
Increase (decrease) in net assets from operations
per unit
Series A $1.67 $(1.31)
Series F 1.76 (1.24)
Series O 1.84 (0.85)
Series T 2.48 (1.88)
The accompanying notes are an integral part of these financial statements.
108 Franklin Templeton Investments Funds

Franklin World Growth Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 47,249 $ (21,779) $ 1,943 $ (1,798) $ 807 $ (583)
Distributions to unitholders
From net investment income (4,498) (3,905) (174) (210) (74) (78)
From capital gains — — — — — —
From return of capital (33) (35) — — — —
(4,531) (3,940) (174) (210) (74) (78)
Capital unit transactions
Subscriptions 77,284 83,582 450 160 29 12
From merger (Note 14) — 26,238 — 17,578 — 5,608
Reinvestments 4,500 8,466 173 210 72 77
Redemptions (82,163) (94,434) (4,004) (3,904) (868) (585)
(379) 23,852 (3,381) 14,044 (767) 5,112
Increase (decrease) in net assets for the period 42,339 (1,867) (1,612) 12,036 (34) 4,451
Net assets — beginning of period 225,682 227,549 12,036 — 4,451 —
Net assets — end of period $ 268,021 $ 225,682 $ 10,424 $ 12,036 $ 4,417 $ 4,451
Series O Series T
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 44,415 $ (19,311) $ 84 $ (87)
Distributions to unitholders
From net investment income (4,243) (3,606) (7) (11)
From capital gains — — — —
From return of capital — — (33) (35)
Capital unit transactions
(4,243) (3,606) (40) (46)
Subscriptions 76,804 83,404 1 6
From merger (Note 14) — 2,277 — 775
Reinvestments 4,242 8,159 13 20
Redemptions (77,030) (89,890) (261) (55)
4,016 3,950 (247) 746
Increase (decrease) in net assets for the period 44,188 (18,967) (203) 613
Net assets — beginning of period 208,582 227,549 613 —
Net assets — end of period $ 252,770 $ 208,582 $ 410 $ 613
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 109

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett All Canadian Focus Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.62%
COMMON STOCKS: 97.62%
Financials: 21.81%
Bank of Montreal ...................... 106,800 $ 6,193 $ 6,494
Bank of Nova Scotia .................... 109,200 5,804 6,270
Canadian Imperial Bank of Commerce . ...... 76,200 5,484 6,093
Great–West Lifeco Inc. .................. 206,300 5,302 5,009
IGM Financial Inc. ..................... 134,000 5,789 5,573
Intact Financial Corp. ................... 118,800 6,042 7,682
National Bank of Canada ................. 80,700 6,113 6,222
Royal Bank of Canada ................... 104,900 6,055 6,274
The Toronto–Dominion Bank .............. 80,300 6,018 6,717
52,800 56,334
Materials: 14.89%
Agrium Inc. . . ........................ 63,800 4,339 6,325
Alamos Gold Inc. ...................... 305,500 4,987 5,319
Barrick Gold Corp. ..................... 157,500 6,441 5,467
Goldcorp Inc. ........................ 117,100 5,862 4,260
Methanex Corp. . ...................... 199,100 6,062 6,291
Potash Corp. of Saskatchewan Inc. . . ........ 123,800 6,069 4,999
Silver Wheaton Corp. .................... 161,700 3,938 5,786
37,698 38,447
Energy: 14.04%
Canadian Natural Resources Ltd. . . ........ 157,500 5,473 4,509
EnCana Corp. . ........................ 260,300 5,652 5,102
Ensign Energy Services Inc. .............. 361,200 6,044 5,530
Imperial Oil Ltd. . ...................... 166,200 6,989 7,102
TransCanada Corp. ..................... 154,900 5,911 7,275
Vermilion Energy Inc. ................... 130,100 5,297 6,742
35,366 36,260
Consumer Staples: 13.02%
Alimentation Couche–Tard Inc., B . . ........ 130,600 3,446 6,367
George Weston Ltd. .................... 78,300 5,092 5,525
Metro Inc., A . ........................ 124,000 4,991 7,840
Saputo Inc. . . ........................ 138,400 4,554 6,948
Shoppers Drug Mart Corp. ................ 162,300 6,625 6,932
24,708 33,612
Industrials: 11.00%
Canadian National Railway Co. . . . . . ........ 86,600 5,418 7,819
Canadian Pacific Railway Ltd. . . . . . ........ 82,400 6,005 8,303
SNC–Lavalin Group Inc., A ................ 131,900 5,585 5,312
Stantec Inc. . . ........................ 176,300 5,027 6,978
22,035 28,412
Information Technology: 6.89%
CGI Group Inc., A ...................... 245,900 3,792 5,636
MacDonald Dettwiler & Associates Ltd. . ...... 120,600 4,641 6,747
Open Text Corp. . ...................... 97,900 4,390 5,422
12,823 17,805
Average
Cost
Fair
Value
Shares
(000s) (000s)
Utilities: 6.05%
ATCO Ltd., I ..................... 97,500 $ 5,161 $ 7,827
Canadian Utilities Ltd., A . . . ......... 108,800 5,245 7,797
10,406 15,624
Consumer Discretionary: 4.71%
Canadian Tire Corp. Ltd., A . . ......... 99,900 6,078 6,922
Tim Hortons Inc. .................. 107,500 4,076 5,245
10,154 12,167
Health Care: 2.87%
Valeant Pharmaceuticals International
Inc. ......................... 125,300 6,987 7,423
Telecommunication Services: 2.34%
Rogers Communications Inc., B ....... 134,000 5,013 6,049
Total Common Stocks: ............... 217,990 252,133
Total Long-Term Investments: ......... 217,990 252,133
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 2.09%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 ................ 5,385,000 CAD 5,385 5,385
Total Short-Term Securities: .......... 5,385 5,385
Transaction costs (Note 2) .............. (142) —
TOTAL INVESTMENTS: 99.71% ........ $223,233 257,518
OTHER ASSETS, less liabilities: 0.29% ... 749
TOTAL NET ASSETS: 100.00% ......... $258,267
The accompanying notes are an integral part of these financial statements.
110 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 257,518 $ 334,502
Canadian
Receivables
180 —
Capital units sold 1 477
Dividends and interest 661 782
Other assets (Note 8) 7 17
Total assets
Liabilities
Payables
258,367 335,778
Investment securities purchased — 6,264
Capital units redeemed 4 442
Management fees 47 54
Accrued expenses 49 57
Total liabilities 100 6,817
Net assets $ 258,267 $ 328,961
Total net assets per series (000s)
Series A $24,166 $27,333
Series F 2,759 2,847
Series I 8 8
Series O 231,334 298,773
Number of units outstanding (Note 3)
Series A 1,779,168 2,119,809
Series F 185,421 203,650
Series I 500 500
Series O 13,739,085 19,199,895
Net assets per unit — CAD
Series A $13.58 $12.89
Series F 14.88 13.97
Series I 15.98 15.08
Series O 16.84 15.56
Cost of investments held (000s) $223,233 $304,905
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett All Canadian Focus Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 6,244 $ 6,807
Interest 50 83
Total investment income
Expenses
6,294 6,890
Management fees (Note 4(a)) 589 721
Transfer agent fees (Note 4(c)) 195 215
Custodian fees 4 4
Legal fees 1 —
Audit fees 22 19
Unitholder reporting costs 10 6
Independent review committee fees 1 1
Registration fees 18 17
Other expenses (Note 7) 37 35
Total expenses 877 1,018
Expenses waived/paid by Manager (Note 6) (152) (132)
Net expenses 725 886
Net investment income (loss) 5,569 6,004
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net change in unrealized appreciation
16,389 20,525
(depreciation) in value of investments 4,688 (35,668)
Transaction costs (Note 11) (164) (227)
Net gain (loss) on investments 20,913 (15,370)
Increase (decrease) in net assets from operations $ 26,482 $ (9,366)
Increase (decrease) in net assets from operations
per series (000s)
Series A $1,799 $(1,473)
Series F 222 (115)
Series I —* —*
Series O
Increase (decrease) in net assets from operations
per unit
24,461 (7,778)
Series A $0.94 $(0.65)
Series F 1.17 (0.51)
Series I (0.04) (0.68)
Series O
* Amount rounded to zero in the nearest thousand.
1.67 (0.45)
Franklin Templeton Investments Funds 111

Bissett All Canadian Focus Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 26,482 $ (9,366) $ 1,799 $ (1,473) $ 222 $ (115)
Distributions to unitholders
From net investment income (5,248) (5,755) (492) (492) (56) (50)
From capital gains — — — — — —
From return of capital — — — — — —
(5,248) (5,755) (492) (492) (56) (50)
Capital unit transactions
Subscriptions 59,750 122,198 3,198 3,968 195 470
Reinvestments 5,236 5,732 482 472 53 48
Redemptions (156,914) (95,589) (8,154) (8,550) (502) (1,675)
(91,928) 32,341 (4,474) (4,110) (254) (1,157)
Increase (decrease) in net assets for the period (70,694) 17,220 (3,167) (6,075) (88) (1,322)
Net assets — beginning of period 328,961 311,741 27,333 33,408 2,847 4,169
Net assets — end of period $ 258,267 $ 328,961 $ 24,166 $ 27,333 $ 2,759 $ 2,847
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ —* $ —* $ 24,461 $ (7,778)
Distributions to unitholders
From net investment income — — (4,700) (5,213)
From capital gains — — — —
From return of capital — — — —
— — (4,700) (5,213)
Capital unit transactions
Subscriptions 40 — 56,317 117,760
Reinvestments — — 4,701 5,212
Redemptions (40) — (148,218) (85,364)
— — (87,200) 37,608
Increase (decrease) in net assets for the period — — (67,439) 24,617
Net assets — beginning of period 8 8 298,773 274,156
Net assets — end of period $ 8 $ 8 $ 231,334 $ 298,773
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
112 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Bond Fund
Principal Amount
in Currency
of Issue
(000s) (000s)
LONG-TERM INVESTMENTS: 98.59%
BONDS: 98.59%
Canada: 82.04%
407 International Inc., Senior Secured Bond, 6.47%, 7/27/2029 .................................
Algonquin Power Co.
23,965,000 CAD $ 31,030 $ 32,251
4.82%, 2/15/2021 ................................................................... 2,700,000 CAD 2,698 2,711
5.50%, 7/25/2018 ................................................................... 5,000,000 CAD 5,023 5,299
AltaLink Investments LP, Senior Bond, 12–1, 3.674%, 6/5/2019 ................................. 9,599,000 CAD 9,599 9,556
Bank of Montreal, Senior Note, 4.609%, 9/10/2025 ...........................................
Bank of Nova Scotia
17,135,000 CAD 17,241 19,556
2.898% to 8/3/2017, Floating Rate Note thereafter, 8/3/2022, ................................. 11,245,000 CAD 11,245 11,454
3.036% to 10/17/2019, Floating Rate Note thereafter, 10/18/2024 ............................. 13,917,000 CAD 13,917 14,037
Baytex Energy Corp., Senior Note, 6.625%, 7/19/2022 .........................................
bcIMC Realty Corp.
2,691,000 CAD 2,691 2,866
2.96%, 3/7/2019 ..................................................................... 4,882,000 CAD 4,885 4,951
5.65%, 1/5/2018 ..................................................................... 6,670,000 CAD 6,913 7,671
Bell Aliant Regional Communications LP, Senior Note, 5.41%, 9/26/2016 ......................... 12,012,000 CAD 12,222 13,115
British Columbia Municipal Finance Authority, 4.875%, 6/3/2019 ................................ 30,276,000 CAD 32,969 34,626
Caisse Centrale Desjardins du Quebec, Senior Note, 2.281%, 10/17/2016 ......................... 14,425,000 CAD 14,425 14,472
Calloway Real Estate Investment trust, Senior Note, 4.05%, 7/27/2020 ............................
Cameco Corp.
12,000,000 CAD 12,020 12,113
Senior Bond, D, 5.67%, 9/2/2019 ....................................................... 7,598,000 CAD 7,942 8,740
Senior Bond, E, 3.75%, 11/14/2022 .....................................................
Canada Housing Trust
12,251,000 CAD 12,250 12,190
Secured Bond, 2.95%, 3/15/2015 ....................................................... 6,409,000 CAD 6,514 6,642
Senior Secured Bond, Floating Rate Note, 3/15/2017 ........................................ 82,507,000 CAD 83,053 83,132
Canadian Natural Resources Ltd., 4.95%, 6/1/2015 ...........................................
Capital Desjardins Inc.
9,980,000 CAD 10,023 10,692
Senior Note, 3.797% to 11/23/2015, Floating Rate Note thereafter, 11/23/2020 ................... 13,900,000 CAD 13,900 14,459
Senior Note, 5.756% to 4/1/2014, Floating Rate Note thereafter, 4/1/2019 ....................... 12,812,000 CAD 13,278 13,377
Senior Secured Note, G, 5.187%, 5/5/2020 ............................................... 16,070,000 CAD 16,340 18,332
CDP Financial Inc., Senior Note, 4.60%, 7/15/2020 ........................................... 17,476,000 CAD 18,479 19,824
Centre Street Trust, Secured Note, A, 3.69%, 6/14/2021 ....................................... 13,026,000 CAD 13,026 13,011
City of Montreal, 5.00%, 12/1/2018 ........................................................
City of Toronto Canada
14,747,000 CAD 15,325 16,571
3.50%, 12/6/2021 ................................................................... 18,694,000 CAD 19,001 19,369
3.80%, 12/13/2042 .................................................................. 28,465,000 CAD 28,369 28,346
4.70%, 6/10/2041 ................................................................... 8,626,000 CAD 9,706 9,958
4.95%, 6/27/2018 ................................................................... 27,080,000 CAD 30,500 30,736
Cogeco Cable Inc., Senior Secured Note, 4.925%, 2/14/2022 ...................................
CU Inc.
4,891,000 CAD 5,082 5,035
4.543%, 10/24/2041 ................................................................. 6,903,000 CAD 6,903 7,801
Senior Bond, 3.805%, 9/10/2042 ....................................................... 11,904,000 CAD 11,904 12,009
Senior Note, 5.563%, 5/26/2028 ........................................................ 4,477,000 CAD 5,476 5,487
DirectCash Payments Inc., 8.125%, 8/8/2019 ............................................... 3,532,000 CAD 3,532 3,622
Eagle Credit Card Trust, 102A, Senior Secured Note, 3.474%, 12/17/2015 ......................... 4,781,000 CAD 4,781 4,998
Emera Inc., Senior Note, 2.96%, 12/13/2016 ................................................
Enbridge Inc.
6,577,000 CAD 6,574 6,696
Floating Rate Note, 8/19/2015 .......................................................... 13,170,000 CAD 13,170 13,321
Senior Bond, 4.24%, 8/27/2042 ........................................................ 9,000,000 CAD 9,026 9,080
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 113
Average
Cost
Fair
Value

Bissett Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 82.04% (Continued)
Enbridge Income Fund Holdings Inc.
3.94%, 1/13/2023 ................................................................... 8,506,000 CAD $ 8,504 $ 8,486
Senior Note, 2.92%, 12/14/2017 ........................................................ 6,697,000 CAD 6,696 6,690
Senior Note, Floating Rate Note, 11/28/2014 .............................................. 14,127,000 CAD 14,127 14,113
Enbridge Pipelines Inc., Senior Note, 2.93%, 11/30/2022 ...................................... 9,855,000 CAD 9,853 9,806
Fairfax Financial Holdings Ltd., Senior Note, 6.40%, 5/25/2021 ................................. 13,000,000 CAD 12,942 14,182
Fifth Avenue LP, Secured Bond, 4.71%, 8/5/2021 ............................................ 7,337,706 CAD 7,338 7,811
First Capital Realty Inc., Senior Note, 3.95%, 12/5/2022 ....................................... 4,500,000 CAD 4,474 4,468
Flint Energy Services Ltd., 7.50%, 6/15/2019 ................................................ 640,000 CAD 704 704
Fortisalberta Inc., 5.37%, 10/30/2039 ......................................................
Government of Canada
7,641,000 CAD 7,811 9,577
1.00%, 11/1/2014 ................................................................... 48,032,000 CAD 47,883 47,911
2.75%, 6/1/2022 ..................................................................... 9,678,000 CAD 10,457 10,472
4.00%, 6/1/2041 ..................................................................... 22,998,000 CAD 30,125 30,737
5.75%, 6/1/2029 ..................................................................... 8,246,000 CAD 10,378 12,250
5.75%, 6/1/2033 ..................................................................... 32,026,000 CAD 45,941 49,725
Great–West Lifeco Finance Delaware, 5.691% to 6/21/2017, Floating Rate Note thereafter, 6/21/2067 . . . 18,780,000 CAD 19,398 20,656
Great–West Lifeco Inc., Senior Bond, 6.67%, 3/21/2033 ....................................... 14,406,000 CAD 17,653 18,489
Home Capital Group Inc., 5.20%, 5/4/2016 .................................................
HSBC Bank Canada
10,734,000 CAD 10,734 11,148
2.572%, 11/23/2015 ................................................................. 15,555,000 CAD 15,555 15,801
3.558%, 10/4/2017 .................................................................. 9,756,000 CAD 9,764 10,289
3.86%, 5/21/2015 ................................................................... 12,632,000 CAD 12,769 13,201
Husky Energy Inc., Senior Note, 3.75%, 3/12/2015 ........................................... 9,234,000 CAD 9,295 9,569
Hydro One Inc., 6.93%, 6/1/2032 ......................................................... 2,442,000 CAD 3,107 3,478
Hydro–Quebec, HL, 11.00%, 8/15/2020 ....................................................
Inter Pipeline Fund
28,565,000 CAD 45,034 45,190
Senior Note, 3.839%, 7/30/2018 ........................................................ 10,427,000 CAD 10,427 10,963
Senior Note, 4.967%, 2/2/2021 ......................................................... 6,906,000 CAD 6,906 7,782
Manitoba Telecom Services Inc., Senior Note, 4.59%, 10/1/2018 ................................
Manufacturers Life Insurance Co., Subordinated Note, 4.165% to 6/1/2017, Floating Rate Note
6,055,000 CAD 6,054 6,518
thereafter, 6/01/2022, 6/1/2022 ......................................................... 5,736,000 CAD 5,736 5,996
Manulife Financial Corp., Senior Note, 5.505%, 6/26/2018 ..................................... 14,036,000 CAD 14,374 15,736
Maritimes and Northeast Pipeline LP, Senior Secured Note, 4.34%, 11/30/2019 ....................
Master Credit Card Trust
8,485,750 CAD 8,499 8,864
Secured Note, 3.876%, 1/21/2017 ...................................................... 8,215,000 CAD 8,077 8,247
Secured Note, 12–1, 2.626%, 1/21/2017 ................................................. 11,445,000 CAD 11,445 11,688
Merrill Lynch Financial Asset Inc., 2006–CA20, A2, 4.659%, 10/12/2039 .........................
National Housing Association
5,925,577 CAD 5,925 6,233
1.70%, 8/1/2017 ..................................................................... 8,771,028 CAD 8,619 8,670
1.95%, 6/1/2017 ..................................................................... 4,258,089 CAD 4,243 4,253
2.30%, 6/1/2016 ..................................................................... 14,899,994 CAD 14,771 15,110
Floating Rate Note, 3/1/2016 ........................................................... 13,901,442 CAD 13,828 14,109
Floating Rate Note, 12/1/2016 .......................................................... 35,232,029 CAD 35,139 35,139
Floating Rate Note, 3/1/2017 ........................................................... 34,237,351 CAD 34,048 34,118
OMERS Realty Corp., 4.74%, 6/4/2018 ..................................................... 14,307,000 CAD 14,739 16,071
Ontario School Boards Finance, 06A1, 5.07%, 4/18/2031 ...................................... 19,798,486 CAD 19,799 21,722
Ontario Strategic Infrastructure Finance, 4.60%, 6/1/2015 ...................................... 27,663,000 CAD 28,646 29,563
OPB Finance Trust, Senior Bond, 3.89%, 7/4/2042 ........................................... 11,175,000 CAD 11,167 11,321
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
114 Franklin Templeton Investments Funds

Bissett Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 82.04% (Continued)
Province of Manitoba
4.40%, 9/5/2025 ................................................................... 48,179,000 CAD $ 49,490 $ 55,039
6.30%, 3/5/2031 ...................................................................
Province of New Brunswick
22,573,000 CAD 27,757 31,899
3.55%, 6/3/2043 ................................................................... 10,815,000 CAD 10,814 10,954
5.50%, 1/27/2034 ..................................................................
Province of Nova Scotia
53,863,000 CAD 61,908 69,733
4.40%, 6/1/2042 ................................................................... 13,332,000 CAD 14,747 15,684
5.80%, 6/1/2033 ...................................................................
Province of Ontario
19,215,000 CAD 24,972 25,912
4.20%, 3/8/2018 ................................................................... 37,511,000 CAD 41,710 41,592
4.65%, 6/2/2041 ................................................................... 27,980,000 CAD 33,308 34,282
4.70%, 6/2/2037 ................................................................... 29,342,000 CAD 35,910 35,365
5.60%, 6/2/2035 ................................................................... 4,200,000 CAD 5,233 5,611
5.85%, 3/8/2033 ................................................................... 30,619,000 CAD 41,642 41,618
6.25%, 9/1/2015 ................................................................... 30,394,000 CAD 32,832 34,086
6.50%, 3/8/2029 ................................................................... 19,441,000 CAD 27,845 27,411
Floating Rate Note, 10/5/2015 ......................................................... 2,358,000 CAD 2,356 2,369
Floating Rate Note, 11/23/2017 ........................................................ 129,477,000 CAD 129,415 129,351
Senior Note, 3.00%, 7/16/2018 ........................................................ 15,160,000 USD 16,436 16,408
Strip, 12/2/2022 .................................................................... 19,168,000 CAD 13,826 14,082
Province of Quebec, 6.25%, 6/1/2032 .................................................... 49,766,000 CAD 63,486 68,871
PSP Capital Inc., Senior Note, 2.26%, 2/16/2017 ............................................
RBC Capital Trust
13,127,000 CAD 13,123 13,284
4.87% to 12/31/2015, Floating Rate Note thereafter, Perpetual ............................... 3,802,000 CAD 3,969 4,098
5.812% to 12/31/2013, Floating Rate Note thereafter, Perpetual .............................. 769,000 CAD 823 799
Real Estate Asset Liquidity Trust, 2006–3, A1, 4.449%, 12/12/2038 .............................
Rogers Communications Inc.
10,953,077 CAD 10,953 11,553
Senior Note, 5.34%, 3/22/2021 ........................................................ 17,539,000 CAD 17,584 20,086
Senior Note, 5.38%, 11/4/2019 ........................................................
Royal Bank of Canada
12,013,000 CAD 12,582 13,727
5.95%, 6/18/2014 .................................................................. 12,692,000 CAD 13,773 13,427
Senior Note, 2.58%, 4/13/2017 ........................................................ 10,180,000 CAD 10,179 10,310
Senior Note, 3.66%, 1/25/2017 ........................................................ 14,395,000 CAD 14,571 15,214
Senior Note, 4.93%, 7/16/2025 ........................................................ 15,113,000 CAD 15,259 17,708
Subordinated Note, 4.84% to 3/11/2013, Floating Rate Note thereafter, 3/11/2018 ............... 12,597,000 CAD 13,137 12,673
Subordinated Note, 5.00% to 6/6/2013, Floating Rate Note thereafter, 6/6/2018 ................. 1,973,000 CAD 2,030 2,001
Russel Metals Inc., Senior Note, 6.00%, 4/19/2022 .......................................... 5,100,000 CAD 5,272 5,202
Sherritt International Corp., Senior Note, 7.50%, 9/24/2020 ................................... 5,885,000 CAD 5,917 6,032
Sun Life Capital Trust, Senior Bond, 5.863%, 12/31/2108 ..................................... 5,000,000 CAD 5,435 5,515
Sun Life Financial Inc., Senior Bond, 4.95% to 6/1/2016, Floating Rate Note thereafter, 6/1/2036 ..... 16,738,000 CAD 17,394 17,730
Suncor Energy Inc., 5.80%, 5/22/2018 ....................................................
Terasen Gas Inc.
10,332,000 CAD 10,806 11,963
6.00%, 10/2/2037 .................................................................. 3,500,000 CAD 3,487 4,723
Senior Note, 6.55%, 2/24/2039 ........................................................ 2,000,000 CAD 1,993 2,903
Terasen Gas Vancouver Island, Senior Bond, 6.05%, 2/15/2038 ................................
The Toronto–Dominion Bank
5,831,000 CAD 5,943 7,728
Subordinated Note, 5.48% to 4/2/2015, Floating Rate Note thereafter, 4/2/2020 ................. 15,965,000 CAD 16,469 17,190
Subordinated Note, 5.763% to 12/18/2017, Floating Rate Note thereafter, 12/18/2106 ............ 27,307,000 CAD 27,694 31,321
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 115
Average
Cost
Fair
Value

Bissett Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 82.04% (Continued)
Thomson Reuters Corp., 5.70%, 7/15/2015 ............................................... 10,074,000 CAD $ 10,225 $ 11,009
TransCanada PipeLines Ltd., Senior Bond, 8.05%, 2/17/2039 ................................. 5,140,000 CAD 5,619 8,416
Wells Fargo Financial Canada Corp., 3.97%, 11/3/2014 ...................................... 7,549,000 CAD 7,636 7,851
Westcoast Energy Inc., Senior Note, 4.57%, 7/2/2020 ....................................... 6,426,000 CAD 6,426 7,176
Average
Cost
Fair
Value
2,056,002 2,144,868
United States: 10.43%
American International Group Inc., Senior Note, 4.90%, 6/2/2014 .............................. 12,261,000 CAD 12,260 12,519
ANR Pipeline Co., Senior Bond, 9.625%, 11/1/2021 ........................................ 4,630,000 USD 6,896 6,950
Aon Finance NS1 ULC, Senior Note, 4.76%, 3/8/2018 ....................................... 11,128,000 CAD 11,203 11,959
BAC Canada Finance Co., Senior Note, Floating Rate Note, 2/21/2014 .......................... 7,749,000 CAD 7,749 7,765
Bank of America Corp., 4.36%, 9/21/2015 ................................................ 15,284,000 CAD 15,246 15,986
Centel Capital Corp., Senior Bond, 9.00%, 10/15/2019 ...................................... 6,300,000 USD 7,470 7,440
Citigroup Inc., Subordinated Note, 4.65% to 10/11/2017, Floating Rate Note thereafter, 10/11/2022 . . 15,650,000 CAD 15,576 15,772
El Paso Corp., Senior Note, 7.25%, 6/1/2018 .............................................. 1,525,000 USD 1,763 1,750
Ford Credit Canada, Senior Note, 3.32%, 12/19/2017 ....................................... 10,110,000 CAD 10,106 10,082
GE Capital Canada Funding Co.
4.40%, 2/8/2018 ................................................................... 10,120,000 CAD 10,105 11,012
5.68%, 9/10/2019 .................................................................. 5,016,000 CAD 5,229 5,847
5.73%, 10/22/2037 ................................................................. 18,336,000 CAD 18,432 22,683
Senior Note, Floating Rate Note, 6/11/2014 .............................................. 12,768,000 CAD 12,777 12,877
General Electric Capital Corp., B, 6.25% to 12/15/2022, Floating Rate Note thereafter, Perpetual ..... 2,393,000 USD 2,443 2,588
HCA Inc., Senior Secured Note, 6.50%, 2/15/2020 .......................................... 2,724,000 USD 3,004 3,044
JPMorgan Chase & Co., Senior Note, 2.92%, 9/19/2017 ..................................... 11,443,000 CAD 11,443 11,516
Metropolitan Life Global Funding I
4.45%, 11/8/2013 .................................................................. 21,157,000 CAD 21,302 21,676
2.624%, 4/10/2015 ................................................................. 19,653,000 CAD 19,653 19,808
Morgan Stanley, Senior Note, 4.85%, 2/3/2016 ............................................. 5,094,000 CAD 5,091 5,321
New York Life Global Funding, 4.30%, 3/19/2014 ........................................... 16,500,000 CAD 16,471 17,000
Reynolds Group Issuer Inc./LLC/SA
Secured Note, 5.75%, 10/15/2020 ..................................................... 1,800,000 USD 1,754 1,846
Senior Secured Note, 6.875%, 2/15/2021 ............................................... 1,800,000 USD 1,872 1,926
Safeway Inc., Senior Bond, 3.95%, 8/15/2020 ............................................. 10,665,000 USD 10,234 10,586
The Goldman Sachs Group Inc., Senior Note, 5.25%, 6/1/2016 ................................ 8,701,000 CAD 9,199 9,288
URS Corp., Senior Note, 5.00%, 4/1/2022 ................................................. 5,935,000 USD 5,841 6,062
Wells Fargo Financial Canada Corp., Senior Note, 2.774%, 2/9/2017 ........................... 19,146,000 CAD 19,146 19,479
262,265 272,782
United Kingdom: 2.26%
BP Capital Markets PLC, 2.744%, 2/24/2017 .............................................. 14,504,000 CAD 14,504 14,774
Heathrow Funding Ltd., Secured Note, 4.00%, 7/3/2019 ..................................... 5,273,000 CAD 5,240 5,431
HSBC Bank Canada, 2.901%, 1/13/2017 ................................................. 13,530,000 CAD 13,530 13,843
Network Rail Infrastructure Finance PLC, 4.40%, 3/6/2016 ................................... 23,465,000 CAD 23,569 24,966
56,843 59,014
Supranational: 1.73%
Inter–American Development Bank, 4.40%, 1/26/2026 ...................................... 40,044,000 CAD 39,581 45,321
France: 0.99%
Government of France, 4.45%, 10/26/2018 ............................................... 23,932,000 CAD 23,984 25,737
The accompanying notes are an integral part of these financial statements.
116 Franklin Templeton Investments Funds

Bissett Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Netherlands: 0.59%
Bank Nederlandse Gemeenten NV, Senior Bond, 4.55%, 2/15/2019 ............................ 13,971,000 CAD $ 14,123 $ 15,342
South Korea: 0.29%
Korea Gas Corp., Senior Note, 4.58%, 5/12/2016 ........................................... 7,183,000 CAD 7,181 7,600
Japan: 0.26%
Nippon Life Insurance Co., 5.00% to 10/17/2022, Floating Rate Note thereafter, 10/18/2042 ........ 6,461,000 USD 6,351 6,738
Total Bonds: ......................................................................... 2,466,330 2,577,402
Total Long-Term Investments: ........................................................... 2,466,330 2,577,402
SHORT-TERM SECURITIES: 0.61%
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 ...................................... 16,000,000 CAD 16,000 16,000
Total Short-Term Securities: ............................................................ 16,000 16,000
TOTAL INVESTMENTS: 99.20% ......................................................... $2,482,330 2,593,402
NET UNREALIZED GAIN ON DERIVATIVES: ................................................ 23
OTHER ASSETS, less liabilities: 0.80% ................................................... 20,984
TOTAL NET ASSETS: 100.00% .......................................................... $2,614,409
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
In Canadian Dollars
Currency
to be Received
Par Value
In Canadian Dollars
Average
Cost
Contract
Price
Fair
Value
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
CREDIT SUISSE INTERNATIONAL ....... A+ January 8, 2013 16,445 CAD 16,445 16,600 USD 16,491 1.0094 $ 46
Total Number of Contracts ...........1 $46
CREDIT SUISSE INTERNATIONAL ....... A+ January 8, 2013 16,600 USD 16,491 16,468 CAD 16,468 0.9920 (23)
Total Number of Contracts ...........1 $(23)
Net Unrealized Gain .................. $23
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................ 22.23 32.51
AA .................................. 32.23 27.96
A ................................... 31.49 29.87
BBB ................................ 11.24 9.06
BB ................................. 1.12 0.33
B ................................... 0.28 —
Not Rated ............................ — 0.29
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s
and Fitch ratings.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 117

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 2,593,402 $ 2,755,376
Canadian 263 —
Foreign
Receivables
3 —
Investment securities sold 2,070 —
Capital units sold 100 2,969
Interest 21,114 25,394
Unrealized gain on derivatives 46 7
Other assets (Note 8) 80 119
Total assets
Liabilities
Payables
2,617,078 2,783,865
Investment securities purchased 2,067 33,864
Capital units redeemed 75 2,292
Management fees 252 251
Accrued expenses 252 252
Unrealized loss on derivatives 23 —
Total liabilities 2,669 36,659
Net assets $ 2,614,409 $ 2,747,206
Total net assets per series (000s)
Series A $184,599 $186,549
Series F 34,056 33,032
Series I 703 527
Series O 2,395,051 2,527,098
Number of units outstanding (Note 3)
Series A 14,414,030 14,477,746
Series F 2,451,774 2,381,924
Series I 53,152 39,683
Series O 156,583,380 166,833,171
Net assets per unit — CAD
Series A $12.80 $12.88
Series F 13.89 13.87
Series I 13.23 13.27
Series O 15.30 15.15
Cost of investments held (000s) $2,482,330 $2,633,446
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
(Signed) GHION SHEWANGZAW
Director
Bissett Bond Fund
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Interest $ 100,622 $ 119,521
Total investment income
Expenses
100,622 119,521
Management fees (Note 4(a)) 3,061 2,842
Transfer agent fees (Note 4(c)) 931 908
Custodian fees 55 50
Legal fees 8 4
Audit fees 32 31
Unitholder reporting costs 44 69
Independent review committee fees 1 1
Registration fees 25 26
Other expenses (Note 7) 405 308
Total expenses 4,562 4,239
Expenses waived/paid by Manager (Note 6) (1,302) (1,214)
Net expenses 3,260 3,025
Net investment income (loss) 97,362 116,496
Realized and unrealized gain (loss) on
investments
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
35,881 47,588
gain (loss)
Net change in unrealized appreciation
(depreciation) in value of investments and
425 (11)
derivatives (10,842) 67,066
Net gain (loss) on investments 25,464 114,643
Increase (decrease) in net assets from
operations $ 122,826 $ 231,139
Increase (decrease) in net assets from
operations per series (000s)
Series A $6,066 $11,948
Series F 1,348 2,418
Series I 22 37
Series O 115,390 216,736
Increase (decrease) in net assets from
operations per unit
Series A $0.41 $0.87
Series F 0.56 1.04
Series I 0.48 0.96
Series O 0.73 1.25
The accompanying notes are an integral part of these financial statements.
118 Franklin Templeton Investments Funds

Bissett Bond Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 122,826 $ 231,139 $ 6,066 $ 11,948 $ 1,348 $ 2,418
Distributions to unitholders
From net investment income (100,709) (116,847) (7,236) (7,376) (1,296) (1,339)
From capital gains — — — — — —
From return of capital — — — — — —
(100,709) (116,847) (7,236) (7,376) (1,296) (1,339)
Capital unit transactions
Subscriptions 462,977 850,862 44,105 42,790 5,605 5,889
Reinvestments 99,943 116,139 6,600 6,789 1,224 1,275
Redemptions (717,834) (1,068,183) (51,485) (49,900) (5,857) (8,069)
(154,914) (101,182) (780) (321) 972 (905)
Increase (decrease) in net assets for the period (132,797) 13,110 (1,950) 4,251 1,024 174
Net assets — beginning of period 2,747,206 2,734,096 186,549 182,298 33,032 32,858
Net assets — end of period $ 2,614,409 $ 2,747,206 $ 184,599 $ 186,549 $ 34,056 $ 33,032
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 22 $ 37 $ 115,390 $ 216,736
Distributions to unitholders
From net investment income (24) (22) (92,153) (108,110)
From capital gains — — — —
From return of capital — — — —
(24) (22) (92,153) (108,110)
Capital unit transactions
Subscriptions 200 7 413,067 802,176
Reinvestments 24 21 92,095 108,054
Redemptions (46) — (660,446) (1,010,214)
178 28 (155,284) (99,984)
Increase (decrease) in net assets for the period 176 43 (132,047) 8,642
Net assets — beginning of period 527 484 2,527,098 2,518,456
Net assets — end of period $ 703 $ 527 $ 2,395,051 $ 2,527,098
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 119

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Canadian Balanced Fund
Average
Cost
Fair
Value
Units
(000s) (000s)
LONG-TERM INVESTMENTS: 98.50%
INVESTMENTS IN UNDERLYING FUNDS: 98.50%
Bissett All Canadian Focus Fund .......... 1,534,003 $ 18,298 $ 25,879
Bissett Bond Fund .................... 9,377,064 131,366 143,657
Bissett Canadian Dividend Fund .......... 1,055,749 17,373 18,676
Bissett Canadian Equity Fund ............ 1,579,951 113,296 160,175
Bissett Canadian High Dividend Fund ...... 914,623 17,795 17,872
Bissett Canadian Short Term Bond Fund .... 3,299,445 35,461 35,775
Bissett Corporate Bond Fund ............ 3,329,334 34,635 37,155
Bissett Microcap Fund ................. 968,712 27,468 33,915
Bissett Small Cap Fund ................ 480,293 31,605 34,101
Bissett U.S. Focus Fund ................ 3,721,881 30,389 35,358
Franklin Strategic Income Fund .......... 1,589,567 13,102 13,781
Franklin U.S. Rising Dividends Fund ....... 1,146,033 32,149 35,687
Mutual Global Discovery Fund . .......... 2,080,882 33,030 36,228
Templeton EAFE Developed Markets Fund . . . 4,082,849 40,249 36,950
Templeton Emerging Markets Fund ........ 1,427,403 21,059 20,512
Templeton Global Bond Fund ............ 1,065,619 12,570 13,299
Templeton Global Smaller Companies Fund . . 940,608 22,699 21,201
Total Investments In Underlying Funds: ...... 632,544 720,221
Total Long-Term Investments: ............ 632,544 720,221
Principal Amount
in Currency
of Issue
Average
Cost
Fair
Value
(000s) (000s)
SHORT-TERM SECURITIES: 1.49%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 .............. 10,910,000 CAD $ 10,910 $ 10,910
Total Short-Term Securities: ........ 10,910 10,910
TOTAL INVESTMENTS: 99.99% ...... $643,454 731,131
OTHER ASSETS, less liabilities:
0.01% ....................... 92
TOTAL NET ASSETS: 100.00% ...... $731,223
The accompanying notes are an integral part of these financial statements.
120 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in underlying funds and securities — at
fair value
Cash
$ 731,131 $ 697,235
Canadian
Receivables
6 1
Capital units sold 571 893
Distributions and interest 725 546
Other assets (Note 8) 27 59
Total assets
Liabilities
Payables
732,460 698,734
Capital units redeemed 354 204
Management fees 560 595
Accrued expenses 323 376
Distributions to unitholders — 3
Total liabilities 1,237 1,178
Net assets $ 731,223 $ 697,556
Total net assets per series (000s)
Series A $305,088 $327,155
Series F 87,622 86,306
Series I 78 60
Series O 328,193 272,789
Series T 10,242 11,246
Number of units outstanding (Note 3)
Series A 11,520,631 13,381,968
Series F 2,838,477 3,070,519
Series I 2,807 2,367
Series O 9,370,840 8,647,621
Series T 1,322,961 1,454,897
Net assets per unit — CAD
Series A $26.48 $24.45
Series F 30.87 28.11
Series I 27.72 25.42
Series O 35.02 31.55
Series T 7.74 7.73
Cost of investments held (000s) $643,454 $658,192
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Canadian Balanced Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Distributions received from underlying funds
(Note 4(d)) $ 25,075 $ 32,622
Interest 96 135
Total investment income
Expenses
25,171 32,757
Management fees (Note 4(a)) 6,935 7,863
Transfer agent fees (Note 4(c)) 1,722 1,933
Custodian fees 82 95
Legal fees 1 3
Audit fees 22 25
Unitholder reporting costs 21 54
Independent review committee fees 1 1
Registration fees 37 45
Other expenses (Note 7) 623 569
Total expenses 9,444 10,588
Expenses waived/paid by Manager (Note 6) (519) (482)
Net expenses 8,925 10,106
Net investment income (loss) 16,246 22,651
Realized and unrealized gain (loss) on
investments
Net realized gain (loss) on investments
Net change in unrealized appreciation
8,031 20,061
(depreciation) in value of investments 48,634 (45,332)
Net gain (loss) on investments 56,665 (25,271)
Increase (decrease) in net assets from operations $ 72,911 $ (2,620)
Increase (decrease) in net assets from operations
per series (000s)
Series A $28,806 $(4,746)
Series F 9,153 7
Series I 2 (2)
Series O 33,943 2,273
Series T
Increase (decrease) in net assets from operations
per unit
1,007 (152)
Series A $2.33 $(0.34)
Series F 3.13 —**
Series I 4.61 (1.52)
Series O 3.97 0.27
Series T
** Amount rounded to zero in two decimal places.
0.73 (0.10)
Franklin Templeton Investments Funds 121

Bissett Canadian Balanced Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 72,911 $ (2,620) $ 28,806 $ (4,746) $ 9,153 $ 7
Distributions to unitholders
From net investment income (8,710) (8,383) (3,644) (3,937) (1,045) (1,040)
From capital gains — (23,560) — (11,064) — (2,925)
From return of capital (854) (1,100) — — — —
(9,564) (33,043) (3,644) (15,001) (1,045) (3,965)
Capital unit transactions
Subscriptions 101,334 94,678 26,233 36,777 2,003 2,035
Reinvestments 8,927 31,962 3,583 14,750 1,030 3,910
Redemptions (139,941) (140,202) (77,045) (83,352) (9,825) (12,511)
(29,680) (13,562) (47,229) (31,825) (6,792) (6,566)
Increase (decrease) in net assets for the period 33,667 (49,225) (22,067) (51,572) 1,316 (10,524)
Net assets — beginning of period 697,556 746,781 327,155 378,727 86,306 96,830
Net assets — end of period $ 731,223 $ 697,556 $ 305,088 $ 327,155 $ 87,622 $ 86,306
Series I Series O Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 2 $ (2) $ 33,943 $ 2,273 $ 1,007 $ (152)
Distributions to unitholders
From net investment income (1) (1) (3,895) (3,269) (125) (136)
From capital gains — (2) — (9,186) — (383)
From return of capital — — — — (854) (1,100)
(1) (3) (3,895) (12,455) (979) (1,619)
Capital unit transactions
Subscriptions 72 58 72,295 54,764 731 1,044
Reinvestments 1 3 3,891 12,437 422 862
Redemptions (56) — (50,830) (40,613) (2,185) (3,726)
17 61 25,356 26,588 (1,032) (1,820)
Increase (decrease) in net assets for the period 18 56 55,404 16,406 (1,004) (3,591)
Net assets — beginning of period 60 4 272,789 256,383 11,246 14,837
Net assets — end of period $ 78 $ 60 $ 328,193 $ 272,789 $ 10,242 $ 11,246
The accompanying notes are an integral part of these financial statements.
122 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Canadian Dividend Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.90%
COMMON STOCKS: 97.90%
Financials: 35.03%
Bank of Montreal ..................... 360,400 $ 21,456 $ 21,916
Bank of Nova Scotia ................... 656,900 33,838 37,719
Canadian Imperial Bank of Commerce ...... 429,100 30,977 34,311
IGM Financial Inc. .................... 655,900 27,117 27,279
National Bank of Canada . . . ............ 318,100 19,985 24,526
Power Financial Corp. ................. 1,254,900 35,101 34,133
Royal Bank of Canada ................. 514,500 26,366 30,772
Sun Life Financial Inc. ................. 173,300 4,900 4,565
The Toronto–Dominion Bank ............ 370,700 26,851 31,009
226,591 246,230
Energy: 25.24%
ARC Resources Ltd. ................... 1,035,400 24,846 25,129
Bonavista Energy Corp. ................ 761,900 16,004 11,246
Crescent Point Energy Corp. ............. 478,700 17,107 17,951
Enbridge Inc. . ...................... 499,500 14,742 21,479
Freehold Royalties Ltd. ................. 308,100 6,376 6,861
Husky Energy Inc. .................... 870,400 23,666 25,581
Keyera Corp. ........................ 170,500 6,868 8,363
Longview Oil Corp. .................... 1,135,800 9,190 6,099
Mullen Group Ltd. .................... 687,800 11,348 14,368
TransCanada Corp. ................... 737,400 29,305 34,636
Zargon Oil & Gas Ltd. .................. 684,500 13,412 5,702
172,864 177,415
Telecommunication Services: 12.08%
BCE Inc. . . . ........................ 721,200 25,416 30,723
Rogers Communications Inc., B .......... 607,300 21,896 27,413
Telus Corp. . ........................ 414,300 18,553 26,760
65,865 84,896
Utilities: 7.24%
Canadian Utilities Ltd., A . . . ............ 316,200 16,648 22,659
Fortis Inc. . . ........................ 827,300 25,224 28,236
41,872 50,895
Consumer Discretionary: 6.42%
Aimia Inc. . . ........................ 469,700 5,267 6,980
Reitmans (Canada) Ltd., A . . ............ 553,300 8,480 6,645
Thomson Reuters Corp. ................ 1,096,300 35,190 31,540
48,937 45,165
Industrials: 5.18%
Bird Construction Inc. ................. 797,200 9,857 10,499
Calian Technologies Ltd. ................ 183,400 2,192 3,820
Russel Metals Inc. .................... 727,400 16,987 20,040
Wajax Corp. . ........................ 50,000 953 2,030
29,989 36,389
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Consumer Staples: 3.77%
North West Company Inc. ......... 1,186,400 $ 23,215 $ 26,540
Materials: 2.94%
Labrador Iron Ore Royalty Corp. ..... 530,700 17,073 18,213
Methanex Corp. ................. 78,700 1,580 2,487
18,653 20,700
Total Common Stocks: ............ 627,986 688,230
Total Long-Term Investments: ....... 627,986 688,230
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 1.58%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 .............. 11,085,000 CAD 11,085 11,085
Total Short-Term Securities: ........ 11,085 11,085
Transaction costs (Note 2) ........... (515) —
TOTAL INVESTMENTS: 99.48% ...... $638,556 699,315
OTHER ASSETS, less liabilities:
0.52% ....................... 3,664
TOTAL NET ASSETS: 100.00% ...... $702,979
Franklin Templeton Investments Funds 123

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 699,315 $ 644,194
Canadian
Receivables
88 110
Investment securities sold 695 —
Capital units sold 256 492
Dividends and interest 4,603 3,830
Other assets (Note 8) 118 82
Total assets
Liabilities
Payables
705,075 648,708
Investment securities purchased 1,070 —
Capital units redeemed 236 617
Management fees 558 480
Accrued expenses 232 206
Total liabilities 2,096 1,303
Net assets $ 702,979 $ 647,405
Total net assets per series (000s)
Series A $297,018 $258,884
Series F 19,704 15,665
Series O 386,257 372,856
Number of units outstanding (Note 3)
Series A 20,859,407 19,224,175
Series F 1,255,470 1,067,151
Series O 21,874,950 22,852,220
Net assets per unit — CAD
Series A $14.24 $13.47
Series F 15.69 14.67
Series O 17.66 16.31
Cost of investments held (000s) $638,556 $598,137
Signed on behalf of Franklin Templeton Investments Corp.
(SIGNED) DON REED
Director
Bissett Canadian Dividend Fund
(SIGNED) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 29,543 $ 24,540
Interest 271 121
Total investment income
Expenses
29,814 24,661
Management fees (Note 4(a)) 6,313 5,593
Transfer agent fees (Note 4(c)) 1,278 1,083
Custodian fees 37 30
Legal fees 1 1
Audit fees 22 21
Unitholder reporting costs 40 34
Independent review committee fees 1 1
Registration fees 23 21
Other expenses (Note 7) 311 224
Total expenses 8,026 7,008
Expenses waived/paid by Manager (Note 6) (1,319) (703)
Net expenses 6,707 6,305
Net investment income (loss) 23,107 18,356
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net change in unrealized appreciation
24,183 7,157
(depreciation) in value of investments 14,702 (21,184)
Transaction costs (Note 11) (406) (267)
Net gain (loss) on investments 38,479 (14,294)
Increase (decrease) in net assets from operations $ 61,586 $ 4,062
Increase (decrease) in net assets from operations
per series (000s)
Series A $23,458 $1,280
Series F 1,700 251
Series O 36,428 2,531
Increase (decrease) in net assets from operations
per unit
Series A $1.16 $0.07
Series F 1.43 0.27
Series O 1.76 0.15
The accompanying notes are an integral part of these financial statements.
124 Franklin Templeton Investments Funds

Bissett Canadian Dividend Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 61,586 $ 4,062 $ 23,458 $ 1,280 $ 1,700 $ 251
Distributions to unitholders
From net investment income (18,110) (12,913) (7,818) (5,757) (504) (336)
From capital gains — — — — — —
From return of capital — — — — — —
(18,110) (12,913) (7,818) (5,757) (504) (336)
Capital unit transactions
Subscriptions 330,689 419,902 69,751 86,154 5,772 5,423
Reinvestments 17,405 12,410 7,181 5,276 437 314
Redemptions (335,996) (169,083) (54,438) (50,626) (3,366) (3,282)
12,098 263,229 22,494 40,804 2,843 2,455
Increase (decrease) in net assets for the period 55,574 254,378 38,134 36,327 4,039 2,370
Net assets — beginning of period 647,405 393,027 258,884 222,557 15,665 13,295
Net assets — end of period $ 702,979 $ 647,405 $ 297,018 $ 258,884 $ 19,704 $ 15,665
Series O
2012 2011
Increase (decrease) in net assets from operations $ 36,428 $ 2,531
Distributions to unitholders
From net investment income (9,788) (6,820)
From capital gains — —
From return of capital — —
Capital unit transactions
(9,788) (6,820)
Subscriptions 255,166 328,325
Reinvestments 9,787 6,820
Redemptions (278,192) (115,175)
(13,239) 219,970
Increase (decrease) in net assets for the period 13,401 215,681
Net assets — beginning of period 372,856 157,175
Net assets — end of period $ 386,257 $ 372,856
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 125

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Canadian Equity Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.16%
COMMON STOCKS: 97.16%
Financials: 33.63%
Bank of Montreal . . ................ 578,705 $ 23,827 $ 35,191
Bank of Nova Scotia ............... 1,374,275 46,494 78,911
Brookfield Asset Management Inc., A . . . 2,115,764 43,347 76,802
Canadian Imperial Bank of Commerce . . 898,730 50,735 71,863
Home Capital Group Inc. ............ 506,035 15,622 29,866
IGM Financial Inc. ................ 890,245 29,635 37,025
Manulife Financial Corp. ............ 2,105,540 43,016 28,383
Power Corp. of Canada ............. 2,093,000 54,338 52,932
Power Financial Corp. .............. 1,928,240 45,501 52,448
Royal Bank of Canada .............. 1,314,350 51,445 78,611
Sun Life Financial Inc. ............. 1,035,922 25,350 27,286
The Toronto–Dominion Bank ......... 675,850 31,559 56,535
460,869 625,853
Energy: 24.00%
ARC Resources Ltd. ............... 282,740 6,562 6,862
Baytex Energy Corp. ............... 323,600 14,037 13,863
Bonavista Energy Corp. ............. 1,706,555 33,794 25,189
Calfrac Well Services Ltd. ........... 522,500 11,692 12,995
Canadian Energy Services & Technology
Corp., A ...................... 826,000 8,587 8,714
Canadian Natural Resources Ltd. ...... 1,976,780 48,590 56,595
Celtic Exploration Ltd. .............. 864,360 8,171 22,672
Cenovus Energy Inc. ............... 1,121,003 27,362 37,318
Enbridge Inc. . . .................. 897,900 22,466 38,610
Keyera Corp. . . . .................. 186,400 7,834 9,143
Mullen Group Ltd. ................ 1,072,975 14,287 22,414
Nuvista Energy Ltd. ............... 7,209,365 77,952 42,175
Nuvista Energy Ltd., Restricted ........ 282,500 1,384 1,628
Peyto Exploration & Development
Corp. . . ...................... 365,350 4,896 8,370
Savanna Energy Services Corp. ....... 4,849,922 38,189 34,628
Secure Energy Services Inc. ......... 879,760 7,847 8,666
Suncor Energy Inc. ................ 681,859 14,802 22,297
TransCanada Corp. ................ 1,397,000 52,835 65,617
Trican Well Service Ltd. ............. 675,035 9,563 8,850
410,850 446,606
Industrials: 10.21%
Canadian National Railway Co. ........ 860,500 33,240 77,694
Canadian Pacific Railway Ltd. ........ 317,750 24,838 32,020
Russel Metals Inc. ................ 834,050 16,306 22,978
SNC–Lavalin Group Inc., A ........... 1,424,800 64,785 57,377
139,169 190,069
Materials: 7.73%
Agrium Inc. . . . .................. 246,550 15,485 24,443
Franco–Nevada Corp. .............. 421,200 24,070 23,899
Average
Cost
Fair
Value
Shares
(000s) (000s)
Materials: 7.73% (Continued)
Inmet Mining Corp. .......... 398,500 $ 20,511 $ 29,489
Major Drilling Group International
Inc. ................... 2,123,155 19,589 20,722
Methanex Corp. ............. 184,060 2,942 5,816
Potash Corp. of Saskatchewan
Inc. ................... 978,600 42,437 39,516
125,034 143,885
Consumer Discretionary: 7.36%
Dollarama Inc. .............. 396,800 17,254 23,391
Gildan Activewear Inc. ........ 1,239,864 25,253 44,958
Thomson Reuters Corp. ........ 2,383,100 59,928 68,562
102,435 136,911
Consumer Staples: 6.77%
Alimentation Couche–Tard
Inc., B .................. 464,525 6,889 22,646
Metro Inc., A ............... 841,670 38,612 53,219
Saputo Inc. . ............... 300,900 12,920 15,105
Shoppers Drug Mart Corp. ..... 819,700 34,061 35,009
92,482 125,979
Telecommunication Services: 4.32%
Rogers Communications
Inc., B .................. 1,174,187 38,607 53,003
Telus Corp. . ............... 424,750 13,833 27,435
52,440 80,438
Information Technology: 2.09%
MacDonald Dettwiler & Associates
Ltd. ................... 696,360 24,734 38,961
Utilities: 1.05%
ATCO Ltd., I . ............... 244,100 17,147 19,596
Total Common Stocks: ......... 1,425,160 1,808,298
Total Long-Term Investments: .... 1,425,160 1,808,298
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 2.54%
Royal Bank of Canada, Term
Deposit, 0.97%, 1/2/2013 .... 47,325,000 CAD 47,325 47,325
Total Short-Term Securities: ..... 47,325 47,325
Transaction costs (Note 2) ........ (1,764) —
TOTAL INVESTMENTS: 99.70% ... $1,470,721 1,855,623
OTHER ASSETS, less liabilities:
0.30% .................... 5,534
TOTAL NET ASSETS: 100.00% ... $1,861,157
The accompanying notes are an integral part of these financial statements.
126 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 1,855,623 $ 1,895,602
Canadian 999 42
Foreign
Receivables
— 36
Capital units sold 447 1,162
Dividends and interest 5,845 5,956
Other assets (Note 8) 154 160
Total assets
Liabilities
Payables
1,863,068 1,902,958
Investment securities purchased 85 2,102
Capital units redeemed 359 2,025
Management fees 971 990
Accrued expenses 496 555
Total liabilities 1,911 5,672
Net assets $ 1,861,157 $ 1,897,286
Total net assets per series (000s)
Series A $416,222 $434,401
Series F 234,438 222,053
Series I 1,071 854
Series O 1,209,426 1,239,978
Number of units outstanding (Note 3)
Series A 5,568,276 6,493,278
Series F 2,705,621 2,900,232
Series I 13,269 11,896
Series O 11,948,525 14,029,456
Net assets per unit — CAD
Series A $74.74 $66.90
Series F 86.65 76.56
Series I 80.74 71.80
Series O 101.22 88.39
Cost of investments held (000s) $1,470,721 $1,633,205
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Canadian Equity Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 54,770 $ 53,768
Interest 613 1,913
Total investment income
Expenses
55,383 55,681
Management fees (Note 4(a)) 11,643 13,638
Transfer agent fees (Note 4(c)) 2,448 2,691
Custodian fees 116 137
Legal fees 2 5
Audit fees 28 31
Unitholder reporting costs 42 85
Independent review committee fees 1 1
Registration fees 32 31
Other expenses (Note 7) 998 961
Total expenses 15,310 17,580
Expenses waived/paid by Manager (Note 6) (2,362) (1,617)
Net expenses 12,948 15,963
Net investment income (loss) 42,435 39,718
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
109,259 199,997
gain (loss)
Net change in unrealized appreciation
(1) 1
(depreciation) in value of investments 122,505 (345,917)
Transaction costs (Note 11) (821) (1,329)
Net gain (loss) on investments 230,942 (147,248)
Increase (decrease) in net assets from operations $ 273,377 $ (107,530)
Increase (decrease) in net assets from operations
per series (000s)
Series A $53,976 $(33,823)
Series F 32,113 (13,766)
Series I 132 (53)
Series O 187,156 (59,888)
Increase (decrease) in net assets from operations
per unit
Series A $9.12 $(5.25)
Series F 11.59 (4.92)
Series I 10.42 (5.69)
Series O 14.74 (4.44)
Franklin Templeton Investments Funds 127

Bissett Canadian Equity Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 273,377 $ (107,530) $ 53,976 $ (33,823) $ 32,113 $ (13,766)
Distributions to unitholders
From net investment income (35,605) (32,667) (7,984) (7,496) (4,496) (3,833)
From capital gains — (117,467) — (26,955) — (13,782)
From return of capital — — — — — —
(35,605) (150,134) (7,984) (34,451) (4,496) (17,615)
Capital unit transactions
Subscriptions 295,977 252,506 32,683 42,544 8,884 7,072
Reinvestments 35,321 149,132 7,888 34,064 4,371 17,196
Redemptions (605,199) (441,260) (104,742) (109,098) (28,487) (28,825)
(273,901) (39,622) (64,171) (32,490) (15,232) (4,557)
Increase (decrease) in net assets for the period (36,129) (297,286) (18,179) (100,764) 12,385 (35,938)
Net assets — beginning of period 1,897,286 2,194,572 434,401 535,165 222,053 257,991
Net assets — end of period $ 1,861,157 $ 1,897,286 $ 416,222 $ 434,401 $ 234,438 $ 222,053
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 132 $ (53) $ 187,156 $ (59,888)
Distributions to unitholders
From net investment income (20) (14) (23,105) (21,324)
From capital gains — (53) — (76,677)
From return of capital — — — —
(20) (67) (23,105) (98,001)
Capital unit transactions
Subscriptions 162 269 254,248 202,621
Reinvestments 20 67 23,042 97,805
Redemptions (77) — (471,893) (303,337)
105 336 (194,603) (2,911)
Increase (decrease) in net assets for the period 217 216 (30,552) (160,800)
Net assets — beginning of period 854 638 1,239,978 1,400,778
Net assets — end of period $ 1,071 $ 854 $ 1,209,426 $ 1,239,978
The accompanying notes are an integral part of these financial statements.
128 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Canadian High Dividend Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.82%
COMMON STOCKS: 97.82%
Energy: 39.59%
ARC Resources Ltd. .................. 259,300 $ 5,527 $ 6,293
Argent Energy Trust ................... 2,209,400 21,842 20,348
Baytex Energy Corp. .................. 476,700 18,647 20,422
Bonavista Energy Corp. ................ 1,647,300 31,389 24,314
Bonterra Energy Corp. .................
Canadian Energy Services & Technology
397,300 18,624 18,010
Corp., A . ........................ 1,009,400 9,899 10,649
Canyon Services Group Inc. ............. 740,000 7,339 8,355
Crescent Point Energy Corp. ............ 466,100 17,846 17,479
Eagle Energy Trust .................... 2,689,800 25,848 20,631
Freehold Royalties Ltd. ................ 1,227,700 19,080 27,341
Keyera Corp. . ...................... 69,099 2,022 3,389
Parallel Energy Trust .................. 2,899,500 17,723 11,540
Parkland Fuel Corp. .................. 309,200 3,451 5,831
Pembina Pipeline Corp. ................ 515,850 11,946 14,666
PHX Energy Services Corp. ............. 2,072,200 21,791 18,836
Twin Butte Energy Ltd. ................ 6,390,650 15,089 16,424
Veresen Inc. ........................ 1,775,500 22,589 20,880
Zargon Oil & Gas Ltd. ................. 1,665,400 30,756 13,873
301,408 279,281
Financials: 22.59%
Allied Properties Real Estate Investment
Trust . . . ........................ 43,100 898 1,420
Bank of Montreal ..................... 257,800 14,676 15,677
Calloway Real Estate Investment Trust ...... 182,200 3,761 5,265
Canadian Imperial Bank of Commerce ...... 251,100 18,281 20,078
Cominar Real Estate Investment Trust ...... 1,107,300 21,266 24,970
Crombie Real Estate Investment Trust ...... 727,800 11,049 10,735
Davis & Henderson Income Corp. ........ 1,201,800 19,432 25,827
DirectCash Payments Inc. . . ............ 490,700 7,770 11,443
Northern Property Real Estate
Investment Trust ................... 292,900 5,121 9,036
Power Corp. of Canada ................ 207,600 4,885 5,250
Power Financial Corp. ................. 966,900 24,955 26,300
RioCan Real Estate Investment Trust ....... 122,600 2,073 3,371
134,167 159,372
Industrials: 16.54%
Badger Daylighting Inc. ................ 71,500 1,130 2,203
Bird Construction Inc. ................. 229,300 2,290 3,020
Genivar Inc. ........................ 965,300 20,475 19,026
Morneau Shepell Inc. ................. 2,250,200 24,036 28,510
New Flyer Industries Inc. . . . ............ 3,774,600 27,059 32,499
Vicwest Inc. ........................ 1,249,300 15,371 15,491
Wajax Corp. ........................ 391,100 16,428 15,879
106,789 116,628
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Health Care: 7.91%
CML Healthcare Inc. ............. 3,911,200 $ 38,878 $ 25,970
Medical Facilities Corp. ........... 2,168,200 22,777 29,835
61,655 55,805
Materials: 6.91%
Canexus Corp. ................. 3,315,200 21,809 28,014
Labrador Iron Ore Royalty Corp. ..... 603,500 19,416 20,712
41,225 48,726
Consumer Discretionary: 3.30%
Boston Pizza Royalties
Income Fund ................ 880,700 10,802 16,848
The Keg Royalties Income Fund ..... 443,900 4,592 6,436
15,394 23,284
Consumer Staples: 0.98%
North West Company Inc. ......... 309,800 5,588 6,930
Total Common Stocks: ............ 666,226 690,026
Total Long-Term Investments: ....... 666,226 690,026
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 1.57%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 .............. 11,090,000 CAD 11,090 11,090
Total Short-Term Securities: ........ 11,090 11,090
Transaction costs (Note 2) ........... (1,364) —
TOTAL INVESTMENTS: 99.39% ...... $675,952 701,116
OTHER ASSETS, less liabilities:
0.61% ....................... 4,288
TOTAL NET ASSETS: 100.00% ...... $705,404
Franklin Templeton Investments Funds 129

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 701,116 $ 564,316
Canadian
Receivables
89 1
Capital units sold 687 574
Dividends and interest 4,987 3,756
Other assets (Note 8) 87 80
Total assets
Liabilities
Payables
706,966 568,727
Investment securities purchased 159 860
Capital units redeemed 239 459
Management fees 872 659
Accrued expenses 292 239
Total liabilities 1,562 2,217
Net assets $ 705,404 $ 566,510
Total net assets per series (000s)
Series A $437,492 $329,682
Series F 66,991 54,770
Series I 2,232 1,414
Series O 198,689 180,644
Number of units outstanding (Note 3)
Series A 30,078,889 22,853,486
Series F 4,043,314 3,370,031
Series I 143,610 92,127
Series O 10,202,434 9,586,215
Net assets per unit — CAD
Series A $14.54 $14.43
Series F 16.56 16.25
Series I 15.55 15.35
Series O 19.47 18.84
Cost of investments held (000s) $675,952 $519,507
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Canadian High Dividend Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 41,259 $ 34,660
Interest 230 379
Total investment income
Expenses
41,489 35,039
Management fees (Note 4(a)) 9,382 8,234
Transfer agent fees (Note 4(c)) 1,339 1,078
Custodian fees 59 53
Legal fees 1 2
Audit fees 22 23
Unitholder reporting costs 34 37
Independent review committee fees 1 1
Registration fees 29 26
Other expenses (Note 7) 508 380
Total expenses 11,375 9,834
Expenses waived/paid by Manager (Note 6) (929) (668)
Net expenses 10,446 9,166
Net investment income (loss) 31,043 25,873
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net change in unrealized appreciation (depreciation)
46,692 28,160
in value of investments (19,645) (56,160)
Transaction costs (Note 11) (1,245) (1,094)
Net gain (loss) on investments 25,802 (29,094)
Increase (decrease) in net assets from operations $ 56,845 $ (3,221)
Increase (decrease) in net assets from operations
per series (000s)
Series A $31,032 $ (5,309)
Series F 5,688 (202)
Series I 105 47
Series O 20,020 2,243
Increase (decrease) in net assets from operations
per unit
Series A $1.20 $(0.23)
Series F 1.58 (0.05)
Series I 1.18 7.80
Series O 1.99 0.23
The accompanying notes are an integral part of these financial statements.
130 Franklin Templeton Investments Funds

Bissett Canadian High Dividend Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 56,845 $ (3,221) $ 31,032 $ (5,309) $ 5,688 $ (202)
Distributions to unitholders
From net investment income (26,167) (26,782) (15,520) (15,616) (2,472) (2,596)
From capital gains (19,502) — (12,105) — (1,863) —
From return of capital (6,188) (3,535) (3,830) (2,060) (589) (343)
Capital unit transactions
(51,857) (30,317) (31,455) (17,676) (4,924) (2,939)
Subscriptions 254,315 189,560 154,822 79,056 12,928 8,378
Reinvestments 41,117 23,520 23,332 12,447 3,506 2,011
Redemptions (161,526) (172,164) (69,921) (67,633) (4,977) (7,832)
133,906 40,916 108,233 23,870 11,457 2,557
Increase (decrease) in net assets for the period 138,894 7,378 107,810 885 12,221 (584)
Net assets — beginning of period 566,510 559,132 329,682 328,797 54,770 55,354
Net assets — end of period $ 705,404 $ 566,510 $ 437,492 $ 329,682 $ 66,991 $ 54,770
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 105 $ 47 $ 20,020 $ 2,243
Distributions to unitholders
From net investment income (54) (4) (8,121) (8,566)
From capital gains (61) — (5,473) —
From return of capital (19) (8) (1,750) (1,124)
Capital unit transactions
(134) (12) (15,344) (9,690)
Subscriptions 3,506 1,346 83,059 100,780
Reinvestments 123 13 14,156 9,049
Redemptions (2,782) (22) (83,846) (96,677)
847 1,337 13,369 13,152
Increase (decrease) in net assets for the period 818 1,372 18,045 5,705
Net assets — beginning of period 1,414 42 180,644 174,939
Net assets — end of period $ 2,232 $ 1,414 $ 198,689 $ 180,644
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 131

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Canadian Short Term Bond Fund
Principal Amount
in Currency
of Issue
(000s) (000s)
LONG-TERM INVESTMENTS: 99.80%
BONDS: 99.80%
Canada: 84.08%
Algonquin Power Co., 5.50%, 7/25/2018 ...................................................... 1,600,000 CAD $ 1,598 $ 1,696
American Express Canada Credit Corp., Senior Note, 5.90%, 4/2/2013 ..............................
Bank of Montreal
1,500,000 CAD 1,554 1,516
3.103%, 3/10/2016 ..................................................................... 2,000,000 CAD 2,000 2,067
Senior Note, 3.49%, 6/10/2016 ............................................................
Bank of Nova Scotia
2,013,000 CAD 2,049 2,107
2.898% to 8/3/2017, Floating Rate Note thereafter, 8/3/2022, ................................... 1,700,000 CAD 1,700 1,732
3.036% to 10/17/2019, Floating Rate Note thereafter, 10/18/2024 ................................ 2,305,000 CAD 2,305 2,325
Subordinated Note, 6.00% to 10/03/2013, Floating Rate Note thereafter, 10/03/2018 ................ 3,000,000 CAD 3,117 3,095
bcIMC Realty Corp., 2.96%, 3/7/2019 ........................................................ 2,411,000 CAD 2,422 2,445
bcIMC Realty Corp., Senior Note, 4.65%, 2/10/2015 ............................................. 2,500,000 CAD 2,652 2,643
Bell Aliant Regional Communications LP, Senior Note, 5.41%, 9/26/2016 ............................
BMO Capital Trust, D, Junior Subordinated Bond, 5.474% to 12/31/2014, Floating Rate Note thereafter,
1,750,000 CAD 1,906 1,911
Perpetual ............................................................................. 3,000,000 CAD 3,212 3,207
BMW Canada Inc., Senior Note, D, 2.64%, 8/10/2015 ........................................... 3,910,000 CAD 3,910 3,980
British Columbia Municipal Finance Authority, 4.90%, 12/2/2014 .................................. 7,150,000 CAD 7,610 7,611
Caisse Centrale Desjardins du Quebec, Senior Note, 2.281%, 10/17/2016 ...........................
Calloway Real Estate Investment Trust
2,388,000 CAD 2,388 2,396
Senior Bond, 5.37%, 10/12/2016 .......................................................... 1,000,000 CAD 1,083 1,084
Senior Note, 7.95%, 6/30/2014 ............................................................ 1,463,000 CAD 1,615 1,578
Cameco Corp., Senior Bond, D, 5.67%, 9/2/2019 ...............................................
Canada Housing Trust
2,310,000 CAD 2,660 2,657
Secured Bond, 2.75%, 6/15/2016 ......................................................... 9,257,000 CAD 9,582 9,647
Secured Note, 2.05%, 6/15/2017 .......................................................... 8,940,000 CAD 9,121 9,099
Senior Secured Bond, Floating Rate Note, 3/15/2017 .......................................... 1,194,000 CAD 1,203 1,203
Canadian Capital Auto Receivables Asset, 2012–1, A1, 1.693%, 10/17/2013 .........................
Canadian Imperial Bank of Commerce
233,663 CAD 234 234
2.35%, 10/18/2017 ..................................................................... 1,114,000 CAD 1,113 1,116
Subordinated Note, 5.15% to 6/06/2013, Floating Rate Note thereafter,, 6/6/2018 ................... 5,100,000 CAD 5,306 5,168
Canadian Natural Resources Ltd., 4.50%, 1/23/2013 ............................................ 1,500,000 CAD 1,448 1,502
Canadian Wheat Board, 4.75%, 12/1/2014 .................................................... 10,000,000 CAD 10,792 10,644
Capital Desjardins Inc., Senior Note, 5.756% to 4/1/2014, Floating Rate Note thereafter, 4/1/2019 ........
CDP Financial Inc.
5,000,000 CAD 5,343 5,220
Senior Note, Floating Rate Note, 7/15/2015 .................................................. 4,131,000 CAD 4,141 4,152
Senior Note, 4.60%, 7/15/2020 ............................................................
City of Montreal
6,000,000 CAD 6,825 6,806
2.50%, 12/1/2016 ...................................................................... 3,000,000 CAD 3,002 3,038
5.00%, 12/1/2018 ......................................................................
City of Toronto Canada
3,000,000 CAD 3,294 3,371
5.30%, 5/21/2014 ...................................................................... 3,500,000 CAD 3,795 3,680
3.50%, 12/6/2021 ...................................................................... 6,163,000 CAD 6,264 6,386
Cogeco Cable Inc., Senior Secured Note, 5.95%, 6/9/2014 ........................................ 2,200,000 CAD 2,351 2,308
Eagle Credit Card Trust, Secured Note, 101A, 2.782%, 12/17/2013 ................................. 3,000,000 CAD 3,000 3,038
Emera Inc., Senior Note, 2.96%, 12/13/2016 ...................................................
Enbridge Inc.
968,000 CAD 968 985
Floating Rate Note, 8/19/2015 ............................................................ 6,890,000 CAD 6,942 6,969
Senior Note, Floating Rate Note, 11/25/2013 ................................................. 750,000 CAD 750 750
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
132 Franklin Templeton Investments Funds

Bissett Canadian Short Term Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 84.08% (Continued)
Enbridge Income Fund Holdings Inc.
3.94%, 1/13/2023 ...................................................................... 695,000 CAD $ 695 $ 693
Senior Note, Floating Rate Note, 11/28/2014 ................................................. 1,250,000 CAD 1,254 1,249
Senior Note, 2.92%, 12/14/2017 .......................................................... 1,092,000 CAD 1,092 1,091
First Capital Realty Inc., Senior Note, 5.85%, 1/31/2017 .......................................... 2,000,000 CAD 2,236 2,231
Ford Auto Securitization Trust, 2012–R1, A1, 1.748%, 4/15/2014 ..................................
Government of Canada
1,257,246 CAD 1,257 1,258
1.00%, 11/1/2014 ...................................................................... 14,645,000 CAD 14,591 14,608
3.75%, 6/1/2019 ....................................................................... 530,000 CAD 586 601
Great–West Lifeco Finance Delaware, 5.691% to 6/21/2017, Floating Rate Note thereafter, 6/21/2067 ..... 7,350,000 CAD 7,793 8,084
Home Capital Group Inc., 5.20%, 5/4/2016 .................................................... 1,133,000 CAD 1,133 1,177
Honda Canada Finance Inc., Senior Note, Floating Rate Note, 2/23/2015 ............................
HSBC Bank Canada
5,100,000 CAD 5,129 5,143
2.572%, 11/23/2015 .................................................................... 3,550,000 CAD 3,550 3,606
3.558%, 10/4/2017 ..................................................................... 4,100,000 CAD 4,198 4,324
Subordinated Note, 4.94% to 3/16/2016, Floating Rate Note thereafter, 3/16/2021 ................... 2,500,000 CAD 2,680 2,680
Husky Energy Inc., Senior Note, 3.75%, 3/12/2015 .............................................. 2,833,000 CAD 2,838 2,936
Inter Pipeline Fund, Senior Note, 3.839%, 7/30/2018 ............................................
Manitoba Telecom Services Inc.
1,235,000 CAD 1,235 1,298
Senior Note, 6.15%, 6/10/2014 ............................................................ 500,000 CAD 543 529
Senior Note,, 4.59%, 10/1/2018 ...........................................................
Manufacturers Life Insurance Co., Subordinated Note, 4.165% to 6/1/2017, Floating Rate Note thereafter,
774,000 CAD 774 833
6/01/2022 ............................................................................ 1,516,000 CAD 1,533 1,585
Manulife Bank of Canada, Senior Note, Floating Rate Note, 12/3/2014 ..............................
Manulife Financial Corp.
2,150,000 CAD 2,150 2,151
Senior Note, 4.896%, 6/2/2014 ............................................................ 4,000,000 CAD 4,172 4,164
Senior Note, 4.079%, 8/20/2015 ..........................................................
Master Credit Card Trust
2,500,000 CAD 2,589 2,618
Secured Note, 12–1, 2.626%, 1/21/2017 .................................................... 1,655,000 CAD 1,655 1,690
Secured Note, 3.876%, 1/21/2017 ......................................................... 1,100,000 CAD 1,082 1,104
Merrill Lynch Financial Asset Inc., 2004–CA12, A1, 4.743%, 3/12/2036 .............................
National Housing Association
52,020 CAD 51 53
2.60%, 12/1/2014 ...................................................................... 6,528,116 CAD 6,467 6,657
2.15%, 10/1/2015 ...................................................................... 4,686,417 CAD 4,540 4,739
2.30%, 6/1/2016 ....................................................................... 1,497,706 CAD 1,485 1,519
1.95%, 6/1/2017 ....................................................................... 647,544 CAD 645 647
1.70%, 8/1/2017 ....................................................................... 1,380,770 CAD 1,357 1,365
1.95%, 9/1/2017 ....................................................................... 1,977,833 CAD 1,965 1,968
Floating Rate Note, 3/1/2017 ..............................................................
N–45 First CMBS Issuer Corp.
11,584,535 CAD 11,520 11,544
2003–2, B, 5.758%, 11/15/2020 .......................................................... 2,059,000 CAD 2,127 2,109
Subordinated Bond, 2, C, 6.224%, 11/15/2020 ...............................................
OMERS Realty Corp.
1,070,000 CAD 1,106 1,100
4.74%, 6/4/2018 ....................................................................... 7,000,000 CAD 7,876 7,863
C, 4.09%, 6/4/2013 ..................................................................... 7,705,000 CAD 7,869 7,795
Ontario Strategic Infrastructure Finance, 4.60%, 6/1/2015 ........................................ 3,698,000 CAD 3,899 3,952
OPB Finance Trust, Senior Bond, 3.89%, 7/4/2042 .............................................. 890,000 CAD 889 902
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 133
Average
Cost
Fair
Value

Bissett Canadian Short Term Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 84.08% (Continued)
Province of New Brunswick
4.50%, 6/2/2020 ....................................................................... 2,920,000 CAD $ 3,326 $ 3,328
3.35%, 12/3/2021 ......................................................................
Province of Ontario
1,436,000 CAD 1,482 1,511
6.50%, 3/8/2029 ....................................................................... 402,000 CAD 563 567
Floating Rate Note, 11/23/2017 ........................................................... 22,916,000 CAD 22,905 22,894
Senior Note, 3.00%, 7/16/2018 ........................................................... 2,800,000 USD 3,040 3,030
Province of Quebec, 9.375%, 1/16/2023 ...................................................... 2,000,000 CAD 3,127 3,105
Province of Saskatchewan, Senior Note, 5.50%, 6/17/2019 ....................................... 4,435,000 CAD 5,195 5,303
PSP Capital Inc., Senior Note, 2.26%, 2/16/2017 ...............................................
RBC Capital Trust
8,393,000 CAD 8,469 8,493
4.87% to 12/31/2015, Floating Rate Note thereafter, Perpetual .................................. 3,339,000 CAD 3,557 3,599
5.812% to 12/31/2013, Floating Rate Note thereafter, Perpetual ................................. 3,510,000 CAD 3,734 3,646
Rogers Communications Inc., Senior Note, 5.38%, 11/4/2019 .....................................
Royal Bank of Canada
3,643,000 CAD 4,017 4,163
5.95%, 6/18/2014 ...................................................................... 5,084,000 CAD 5,547 5,379
Senior Note, 3.36%, 1/11/2016 ........................................................... 3,000,000 CAD 2,988 3,120
Senior Note, 2.68%, 12/8/2016 ........................................................... 2,164,000 CAD 2,163 2,206
Senior Note, 2.58%, 4/13/2017 ........................................................... 3,350,000 CAD 3,348 3,393
Subordinated Note, 4.84% to 3/11/2013, Floating Rate Note thereafter ............................
Scotiabank Capital Trust II, Subordinated Bond, 6.282% to 6/30/2013, Floating Rate Note thereafter,
3,000,000 CAD 3,045 3,018
Perpetual .............................................................................
Sun Life Financial Inc.
5,000,000 CAD 5,162 5,112
Senior Bond, 4.95% to 6/1/2016, Floating Rate Note thereafter, 6/1/2036 .......................... 7,550,000 CAD 7,822 7,998
Subordinated Note, 5.12% to 6/26/2013, Floating Rate Note thereafter, 6/26/2018 .................. 2,000,000 CAD 2,043 2,032
The Toronto–Dominion Bank, 4.97% to 10/30/2015, Floating Rate Note thereafter, 10/30/2104 .......... 7,600,000 CAD 8,037 8,179
Union Gas Ltd., Senior Bond, 7.90%, 2/24/2014 ................................................ 1,240,000 CAD 1,347 1,326
Wells Fargo Financial Canada Corp., 3.97%, 11/3/2014 .......................................... 3,700,000 CAD 3,780 3,848
Westcoast Energy Inc., Senior Note, 3.28%, 1/15/2016 .......................................... 3,133,000 CAD 3,130 3,245
Average
Cost
Fair
Value
353,643 355,727
United States: 12.50%
American Express Canada Credit Corp., Senior Note, Floating Rate Note, 6/6/2014 .................... 1,050,000 CAD 1,060 1,059
ANR Pipeline Co., Senior Bond, 9.625%, 11/1/2021 ............................................. 770,000 USD 1,147 1,156
Aon Finance NS1 ULC, Senior Note, 4.76%, 3/8/2018 ........................................... 1,000,000 CAD 1,054 1,075
BAC Canada Finance Co., Senior Note, Floating Rate Note, 2/21/2014 .............................. 4,000,000 CAD 4,000 4,008
Bank of America Corp., Subordinated Note, Floating Rate Note, 6/1/2016 ............................ 500,000 CAD 480 471
Citigroup Finance Canada Inc., Senior Note, 5.50%, 5/21/2013 .................................... 3,000,000 CAD 3,071 3,042
Ford Credit Canada, Senior Note, 3.32%, 12/19/2017 ........................................... 830,000 CAD 830 828
GE Capital Canada Funding Co.
5.15%, 6/6/2013 ....................................................................... 2,544,000 CAD 2,720 2,585
4.40%, 2/8/2018 ....................................................................... 4,000,000 CAD 4,248 4,352
Senior Note, 2.95%, 2/10/2014 ........................................................... 3,000,000 CAD 3,014 3,046
Senior Note, Floating Rate Note, 1/26/2015 .................................................. 2,700,000 CAD 2,700 2,738
General Electric Capital Corp., B, 6.25% to 12/15/2022, Floating Rate Note thereafter, Perpetual ......... 362,000 USD 370 392
JPMorgan Chase & Co., Senior Note, 2.92%, 9/19/2017 .......................................... 1,812,000 CAD 1,812 1,824
Metropolitan Life Global Funding I
2.624%, 4/10/2015 ..................................................................... 2,900,000 CAD 2,900 2,923
Floating Rate Note, 6/17/2014 ............................................................ 3,000,000 CAD 3,000 3,005
The accompanying notes are an integral part of these financial statements.
134 Franklin Templeton Investments Funds

Bissett Canadian Short Term Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 12.50% (Continued)
Floating Rate Note, 9/25/2017 ............................................................. 3,000,000 CAD $ 3,000 $ 2,994
Senior Secured Note, 4.85%, 5/30/2013 ..................................................... 2,000,000 CAD 2,051 2,027
Morgan Stanley, Senior Note, 4.85%, 2/3/2016 .................................................. 1,109,000 CAD 1,108 1,158
New York Life Global Funding, 4.30%, 3/19/2014 ................................................ 2,101,000 CAD 2,208 2,165
Safeway Inc., Senior Bond, 3.95%, 8/15/2020 ................................................... 1,627,000 USD 1,561 1,615
The Goldman Sachs Group Inc., Senior Note, 5.25%, 6/1/2016 .....................................
Wells Fargo Financial Canada Corp.
1,561,000 CAD 1,650 1,666
Senior Note, 2.774%, 2/9/2017 ............................................................ 2,560,000 CAD 2,560 2,605
Senior Note, 2.944%, 7/25/2019 ...........................................................
WTH Car Rental ULC
1,553,000 CAD 1,549 1,568
4.143%, 3/20/2015 ...................................................................... 2,500,000 CAD 2,500 2,597
2.619%, 12/20/2016 ..................................................................... 2,000,000 CAD 2,000 2,006
Average
Cost
Fair
Value
52,593 52,905
Germany: 1.66%
Daimler Canada Finance Inc., Senior Note, Floating Rate Note, 9/12/2014 ............................ 2,000,000 CAD 2,008 2,004
VW Credit Canada Inc., Senior Note, 2.20%, 10/11/2016 .......................................... 5,000,000 CAD 4,995 5,004
7,003 7,008
United Kingdom: 1.13%
BP Capital Markets PLC, 2.744%, 2/24/2017 ................................................... 1,944,000 CAD 1,944 1,980
Heathrow Funding Ltd., Secured Note, 4.00%, 7/3/2019 .......................................... 851,000 CAD 846 877
HSBC Bank Canada, 2.901%, 1/13/2017 ...................................................... 1,880,000 CAD 1,880 1,923
4,670 4,780
Netherlands: 0.24%
Bank Nederlandse Gemeenten NV, 4.20%, 1/21/2013 ............................................ 1,000,000 CAD 1,006 1,001
South Korea: 0.19%
Korea Gas Corp., Senior Note, 4.58%, 5/12/2016 ................................................ 763,000 CAD 763 807
Total Bonds: .............................................................................. 419,678 422,228
Total Long-Term Investments: ................................................................. 419,678 422,228
SHORT-TERM SECURITIES: 0.10%
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 ........................................... 440,000 CAD 440 440
Total Short-Term Securities: .................................................................. 440 440
TOTAL INVESTMENTS: 99.90% .............................................................. $420,118 422,668
NET UNREALIZED GAIN ON DERIVATIVES: ..................................................... 2
OTHER ASSETS, less liabilities: 0.10% ........................................................ 407
TOTAL NET ASSETS: 100.00% .................................................................. $423,077
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 135

Bissett Canadian Short Term Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
CREDIT SUISSE INTERNATIONAL ........... A+ January 8, 2013 1,560 CAD $1,561 1,575 USD $1,565 $1.0094 $ 4
Total Number of Contracts ..............1 $4
CREDIT SUISSE INTERNATIONAL ........... A+ January 8, 2013 1,575 USD 1,565 1,562 CAD 1,563 0.9920 (2)
Total Number of Contracts ..............1 $(2)
Net Unrealized Gain ..................... $2
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................ 31.17 40.35
AA ................................. 22.86 19.97
A .................................. 33.03 30.81
BBB ............................... 12.54 9.20
BB ................................. 0.20 0.06
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s
and Fitch ratings.
The accompanying notes are an integral part of these financial statements.
136 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 422,668 $ 386,387
Canadian 429 1
Foreign
Receivables
5 —
Investment securities sold 2,042 —
Capital units sold 94 234
Interest 2,393 2,738
Unrealized gain on derivatives 4 —
Total assets
Liabilities
Payables
427,635 389,360
Investment securities purchased 4,326 10,237
Capital units redeemed 110 94
Management fees 120 134
Unrealized loss on derivatives 2 —
Total liabilities 4,558 10,465
Net assets $ 423,077 $ 378,895
Total net assets per series (000s)
Series A $100,610 $112,920
Series F 5,868 7,546
Series O 316,599 258,429
Number of units outstanding (Note 3)
Series A 10,476,755 11,615,013
Series F 582,772 744,400
Series O 29,226,110 23,891,038
Net assets per unit — CAD
Series A $9.60 $9.72
Series F 10.07 10.14
Series O 10.83 10.82
Cost of investments held (000s) $420,118 $384,035
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Canadian Short Term Bond Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Interest $ 13,937 $ 11,277
Total investment income
Expenses
13,937 11,277
Management fees (Note 4(a)) 1,512 1,581
Transfer agent fees (Note 4(c)) 370 362
Custodian fees 27 19
Legal fees 5 3
Audit fees 20 17
Unitholder reporting costs 17 15
Independent review committee fees 1 1
Registration fees 24 24
Other expenses (Note 7) 153 123
Total expenses 2,129 2,145
Expenses waived/paid by Manager (Note 6) (617) (564)
Net expenses 1,512 1,581
Net investment income (loss) 12,425 9,696
Realized and unrealized gain (loss) on
investments
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(1,075) 332
gain (loss)
Net change in unrealized appreciation
(depreciation) in value of investments and
8 —
derivatives 200 1,675
Net gain (loss) on investments (867) 2,007
Increase (decrease) in net assets from operations $ 11,558 $ 11,703
Increase (decrease) in net assets from operations
per series (000s)
Series A $1,954 $3,495
Series F 164 286
Series O 9,440 7,922
Increase (decrease) in net assets from operations
per unit
Series A $0.18 $0.30
Series F 0.24 0.39
Series O 0.36 0.49
Franklin Templeton Investments Funds 137

Bissett Canadian Short Term Bond Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 11,558 $ 11,703 $ 1,954 $ 3,495 $ 164 $ 286
Distributions to unitholders
From net investment income (12,378) (9,513) (3,242) (3,468) (208) (237)
From capital gains — — — — — —
From return of capital — — — — — —
(12,378) (9,513) (3,242) (3,468) (208) (237)
Capital unit transactions
Subscriptions 200,242 218,505 28,966 37,624 2,138 4,464
Reinvestments 11,974 9,046 2,864 3,026 184 213
Redemptions (167,214) (89,631) (42,852) (55,663) (3,956) (5,588)
45,002 137,920 (11,022) (15,013) (1,634) (911)
Increase (decrease) in net assets for the period 44,182 140,110 (12,310) (14,986) (1,678) (862)
Net assets — beginning of period 378,895 238,785 112,920 127,906 7,546 8,408
Net assets — end of period $ 423,077 $ 378,895 $ 100,610 $ 112,920 $ 5,868 $ 7,546
Series O
2012 2011
Increase (decrease) in net assets from operations $ 9,440 $ 7,922
Distributions to unitholders
From net investment income (8,928) (5,808)
From capital gains — —
From return of capital — —
Capital unit transactions
(8,928) (5,808)
Subscriptions 169,138 176,417
Reinvestments 8,926 5,807
Redemptions (120,406) (28,380)
57,658 153,844
Increase (decrease) in net assets for the period 58,170 155,958
Net assets — beginning of period 258,429 102,471
Net assets — end of period $ 316,599 $ 258,429
The accompanying notes are an integral part of these financial statements.
138 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Corporate Bond Fund
Principal Amount
in Currency
of Issue
(000s) (000s)
LONG-TERM INVESTMENTS: 99.02%
BONDS: 99.02%
Canada: 75.17%
407 International Inc.
Senior Secured Bond, 6.47%, 7/27/2029 .................................................... 3,325,000 CAD $ 4,134 $ 4,475
Subordinated Secured Note, 06–D1, 5.75%, 2/14/2036 ........................................
Algonquin Power Co.
875,000 CAD 862 1,087
4.82%, 2/15/2021 ...................................................................... 300,000 CAD 300 301
5.50%, 7/25/2018 ...................................................................... 1,600,000 CAD 1,598 1,696
AltaLink Investments LP, Senior Bond, 12–1, 3.674%, 6/5/2019 ................................... 1,309,000 CAD 1,313 1,303
Bank of Montreal, Senior Note, 4.609%, 9/10/2025 ..............................................
Bank of Nova Scotia
750,000 CAD 771 856
2.898% to 8/3/2017, Floating Rate Note thereafter, 8/3/2022 .................................... 1,100,000 CAD 1,100 1,120
3.036% to 10/17/2019, Floating Rate Note thereafter, 10/18/2024 ................................ 702,000 CAD 702 708
Baytex Energy Corp., Senior Note, 6.625%, 7/19/2022 ........................................... 285,000 CAD 285 304
Bell Aliant Regional Communications LP, Senior Note, 5.41%, 9/26/2016 ............................ 2,110,000 CAD 2,089 2,304
BMW Canada Inc., Senior Note, D, 2.64%, 8/10/2015 ........................................... 1,245,000 CAD 1,245 1,267
Calloway Real Estate Investment Trust, Senior Bond, 5.37%, 10/12/2016 ............................
Cameco Corp.
583,000 CAD 632 632
Senior Bond, 5.09%, 11/14/2042 .......................................................... 1,000,000 CAD 1,000 996
Senior Bond, D, 5.67%, 9/2/2019 .......................................................... 1,508,000 CAD 1,544 1,735
Canadian Imperial Bank of Commerce, 2.35%, 10/18/2017 .......................................
Capital Desjardins Inc.
281,000 CAD 281 281
Senior Note, 3.797% to 11/23/2015, Floating Rate Note thereafter, 11/23/2020 ..................... 1,096,000 CAD 1,096 1,140
Senior Secured Note, G, 5.187%, 5/5/2020 .................................................. 1,269,000 CAD 1,294 1,448
Centre Street Trust, Secured Note, A, 3.69%, 6/14/2021 ..........................................
City of Toronto Canada
639,000 CAD 639 638
3.50%, 12/6/2021 ...................................................................... 1,500,000 CAD 1,525 1,554
3.80%, 12/13/2042 ..................................................................... 417,000 CAD 416 415
Cogeco Cable Inc., Senior Secured Note, 4.925%, 2/14/2022 ......................................
CU Inc.
535,000 CAD 535 551
4.543%, 10/24/2041 .................................................................... 698,000 CAD 698 789
Senior Bond, 3.805%, 9/10/2042 .......................................................... 1,200,000 CAD 1,200 1,211
Senior Note, 5.183%, 11/21/2035 ......................................................... 1,200,000 CAD 1,178 1,453
Senior Note, 5.563%, 5/26/2028 ........................................................... 702,000 CAD 644 860
DirectCash Payments Inc., 8.125%, 8/8/2019 .................................................. 449,000 CAD 449 461
Enbridge Inc., Senior Bond, 4.24%, 8/27/2042 .................................................
Enbridge Income Fund Holdings Inc.
1,000,000 CAD 999 1,009
3.94%, 1/13/2023 ...................................................................... 878,000 CAD 878 876
Senior Note, 2.92%, 12/14/2017 ........................................................... 707,000 CAD 707 706
Senior Note, Floating Rate Note, 11/28/2014 ................................................. 1,442,000 CAD 1,442 1,441
Fairfax Financial Holdings Ltd., Senior Note, 6.40%, 5/25/2021 .................................... 900,000 CAD 896 982
Fifth Avenue LP, Secured Bond, 4.71%, 8/5/2021 ............................................... 489,180 CAD 489 521
First Capital Realty Inc., Senior Note, 3.95%, 12/5/2022 .......................................... 500,000 CAD 497 496
Flint Energy Services Ltd., 7.50%, 6/15/2019 ................................................... 260,000 CAD 286 286
Gaz Metropolitan Inc., 9.00%, 5/16/2025 ...................................................... 650,000 CAD 800 984
Great–West Lifeco Finance Delaware, 5.691% to 6/21/2017, Floating Rate Note thereafter, 6/21/2067 .....
Great–West Lifeco Finance Delaware LP II, Subordinated Bond, 7.127% to 6/26/2018, Floating Rate Note
2,000,000 CAD 2,108 2,200
thereafter, 6/26/2068 .................................................................... 1,600,000 CAD 1,696 1,901
Great–West Lifeco Inc., Senior Bond, 6.67%, 3/21/2033 .......................................... 1,390,000 CAD 1,703 1,784
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 139
Average
Cost
Fair
Value

Bissett Corporate Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 75.17% (Continued)
Home Capital Group Inc., 5.20%, 5/4/2016 ....................................................
HSBC Bank Canada
800,000 CAD $ 800 $ 831
2.572%, 11/23/2015 .................................................................... 2,462,000 CAD 2,462 2,501
3.558%, 10/4/2017 ..................................................................... 1,572,000 CAD 1,584 1,658
Subordinated Note, 4.94% to 3/16/2016, Floating Rate Note thereafter, 3/16/2021 ..................... 1,500,000 CAD 1,545 1,608
Husky Energy Inc., Senior Note, 3.75%, 3/12/2015 ..............................................
Hydro One Inc.
967,000 CAD 966 1,002
6.35%, 1/31/2034 ...................................................................... 1,000,000 CAD 1,130 1,365
Senior Note, 4.39%, 9/26/2041 ............................................................
Inter Pipeline Fund
503,000 CAD 503 551
Senior Note, 3.839%, 7/30/2018 .......................................................... 830,000 CAD 830 873
Senior Note, 4.967%, 2/2/2021 ............................................................ 1,200,000 CAD 1,202 1,352
Manitoba Telecom Services Inc., Senior Note, 4.59%, 10/1/2018 ...................................
Manufacturers Life Insurance Co., Subordinated Note, 4.165% to 6/1/2017, Floating Rate Note thereafter,
490,000 CAD 490 527
6/01/2022, 6/1/2022 .................................................................... 1,498,000 CAD 1,521 1,566
Manulife Financial Corp., Senior Note, 5.505%, 6/26/2018 ........................................ 1,333,000 CAD 1,271 1,494
Maritimes and Northeast Pipeline LP, Senior Secured Note, 4.34%, 11/30/2019 ....................... 1,316,000 CAD 1,319 1,375
Master Credit Card Trust, Secured Note, 3.876%, 1/21/2017 ...................................... 685,000 CAD 673 688
Merrill Lynch Financial Asset Inc., 2006–CA20, A2, 4.659%, 10/12/2039 ............................ 19,752 CAD 20 21
NAV Canada, 7.40%, 6/1/2027 .............................................................. 457,000 CAD 525 664
Noranda Operating Trust, Senior Secured Note, 6.875%, 12/28/2016 ............................... 562,500 CAD 562 577
NOVA Gas Transmission Ltd., Senior Note, 7.00%, 7/16/2027 ..................................... 750,000 CAD 772 1,000
OMERS Realty Corp., 4.74%, 6/4/2018 ....................................................... 676,000 CAD 667 759
OPB Finance Trust, Senior Bond, 3.89%, 7/4/2042 .............................................. 573,000 CAD 573 580
Precision Drilling Corp., Senior Note, 6.50%, 3/15/2019 ..........................................
Province of Ontario
1,000,000 CAD 1,000 1,027
5.85%, 3/8/2033 ....................................................................... 1,000,000 CAD 1,365 1,359
Floating Rate Note, 11/23/2017 ........................................................... 341,000 CAD 341 341
Senior Note, 3.00%, 7/16/2018 ............................................................ 3,274,000 USD 3,544 3,543
Strip, 12/2/2022 ........................................................................
RBC Capital Trust
830,000 CAD 599 610
4.87% to 12/31/2015, Floating Rate Note thereafter, Perpetual .................................. 518,000 CAD 541 558
5.812% to 12/31/2013, Floating Rate Note thereafter, Perpetual .................................
Rogers Communications Inc.
1,000,000 CAD 1,067 1,039
Senior Note, 5.34%, 3/22/2021 ............................................................ 2,465,000 CAD 2,577 2,823
Senior Note, 5.38%, 11/4/2019 ............................................................
Royal Bank of Canada
2,037,000 CAD 2,138 2,328
5.95%, 6/18/2014 ...................................................................... 2,570,000 CAD 2,801 2,719
Senior Note, 4.93%, 7/16/2025 ............................................................ 1,311,000 CAD 1,335 1,536
Russel Metals Inc., Senior Note, 6.00%, 4/19/2022 .............................................. 650,000 CAD 672 663
Sherritt International Corp., Senior Note, 7.50%, 9/24/2020 ....................................... 615,000 CAD 618 630
Sun Life Financial Inc., Senior Bond, 4.95% to 6/1/2016, Floating Rate Note thereafter, 6/1/2036 ......... 2,873,000 CAD 2,971 3,043
Telus Corp., Senior Note, 5.00%, 6/3/2013 .................................................... 500,000 CAD 520 507
Terasen Gas Vancouver Island, Senior Bond, 6.05%, 2/15/2038 ...................................
The Toronto–Dominion Bank
1,029,000 CAD 1,032 1,364
4.97% to 10/30/2015, Floating Rate Note thereafter, 10/30/2104 ................................. 900,000 CAD 855 969
Subordinated Note, 9.15%, 5/26/2025 ...................................................... 1,794,000 CAD 2,521 2,812
Subordinated Note, 4.779% to 12/14/2016, Floating Rate Note thereafter, 12/14/2015 ............... 1,900,000 CAD 1,781 2,071
Subordinated Note, 5.763% to 12/18/2017, Floating Rate Note thereafter, 12/18/2106 ............... 1,500,000 CAD 1,452 1,721
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.
140 Franklin Templeton Investments Funds

Bissett Corporate Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 75.17% (Continued)
Toromont Industries Ltd., 4.92%, 10/13/2015 ..................................................
TransCanada PipeLines Ltd.
1,000,000 CAD $ 922 $ 1,053
Senior Bond, 8.05%, 2/17/2039 ........................................................... 1,107,000 CAD 1,352 1,812
Senior Note, 7.90%, 4/15/2027 ........................................................... 1,000,000 CAD 1,248 1,434
Wells Fargo Financial Canada Corp., 3.97%, 11/3/2014 .......................................... 1,185,000 CAD 1,201 1,232
Westcoast Energy Inc., Senior Bond, 5.60%, 1/16/2019 .......................................... 900,000 CAD 1,051 1,047
Average
Cost
Fair
Value
94,950 102,004
United States: 20.65%
American Express Canada Credit Corp., Senior Note, Floating Rate Note, 6/6/2014 ..................... 950,000 CAD 960 959
Aon Finance NS1 ULC, Senior Note, 4.76%, 3/8/2018 ........................................... 900,000 CAD 907 967
BAC Canada Finance Co., Senior Note, Floating Rate Note, 2/21/2014 .............................. 1,750,000 CAD 1,750 1,754
Bank of America Corp.
4.36%, 9/21/2015 ...................................................................... 692,000 CAD 675 724
Subordinated Note, Floating Rate Note, 6/1/2016 ............................................. 500,000 CAD 480 471
Capital One Capital VI, Preferred, Junior Subordinated Bond, 8.875%, 5/15/2040 ..................... 500,000 USD 517 497
Centel Capital Corp., Senior Bond, 9.00%, 10/15/2019 ........................................... 500,000 USD 589 590
El Paso Corp., Senior Note, 7.25%, 6/1/2018 ................................................... 800,000 USD 925 918
Ford Credit Canada, Senior Note, 3.32%, 12/19/2017 ............................................ 1,060,000 CAD 1,060 1,057
GE Capital Canada Funding Co.
4.40%, 2/8/2018 ....................................................................... 1,300,000 CAD 1,307 1,415
4.55%, 1/17/2017 ...................................................................... 1,175,000 CAD 1,144 1,276
5.68%, 9/10/2019 ...................................................................... 570,000 CAD 577 664
Senior Note, 4.60%, 1/26/2022 ........................................................... 710,000 CAD 710 784
General Electric Capital Corp., B, 6.25% to 12/15/2022, Floating Rate Note thereafter, Perpetual ......... 225,000 USD 230 243
HCA Inc., Senior Secured Note, 6.50%, 2/15/2020 .............................................. 276,000 USD 304 308
JPMorgan Chase & Co., Senior Note, 2.92%, 9/19/2017 .......................................... 1,177,000 CAD 1,177 1,185
Metropolitan Life Global Funding I
2.624%, 4/10/2015 ..................................................................... 1,766,000 CAD 1,766 1,780
Floating Rate Note, 6/17/2014 ............................................................ 3,000,000 CAD 3,000 3,005
Floating Rate Note, 9/25/2017 ............................................................ 2,000,000 CAD 2,000 1,996
Morgan Stanley, Senior Note, 4.85%, 2/3/2016 ................................................. 653,000 CAD 650 682
New York Life Global Funding, 4.30%, 3/19/2014 ............................................... 500,000 CAD 525 515
Reynolds Group Issuer Inc./LLC/SA
Secured Note, 5.75%, 10/15/2020 ......................................................... 200,000 USD 195 205
Senior Secured Note, 6.875%, 2/15/2021 ................................................... 200,000 USD 208 214
Safeway Inc., Senior Bond, 3.95%, 8/15/2020 .................................................. 1,051,000 USD 1,009 1,043
The Goldman Sachs Group Inc., Senior Note, 5.25%, 6/1/2016 .................................... 773,000 CAD 817 825
URS Corp., Senior Note, 5.00%, 4/1/2022 ..................................................... 540,000 USD 531 552
Wells Fargo Financial Canada Corp., Senior Note, 2.774%, 2/9/2017 ................................ 819,000 CAD 819 833
WTH Car Rental ULC
2.619%, 12/20/2016 .................................................................... 1,000,000 CAD 1,000 1,003
4.143%, 3/20/2015 ..................................................................... 1,500,000 CAD 1,500 1,558
27,332 28,023
United Kingdom: 2.35%
BP Capital Markets PLC, 2.744%, 2/24/2017 .................................................. 500,000 CAD 500 509
Heathrow Funding Ltd., Secured Note, 4.00%, 7/3/2019 ......................................... 539,000 CAD 536 555
HSBC Bank Canada, 2.901%, 1/13/2017 ..................................................... 2,081,000 CAD 2,090 2,129
The accompanying notes are an integral part of these financial statements.
3,126 3,193
Franklin Templeton Investments Funds 141

Bissett Corporate Bond Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
South Korea: 0.43%
Korea Gas Corp., Senior Note, 4.58%, 5/12/2016 ................................................. 550,000 CAD $ 550 $ 582
Japan: 0.42%
Nippon Life Insurance Co., 5.00% to 10/17/2022, Floating Rate Note thereafter, 10/18/2042 .............. 539,000 USD 530 562
Total Bonds: ............................................................................... 126,488 134,364
Total Long-Term Investments: ................................................................. 126,488 134,364
SHORT-TERM SECURITIES: 0.40%
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 ............................................ 535,000 CAD 535 535
Total Short-Term Securities: .................................................................. 535 535
TOTAL INVESTMENTS: 99.42% ............................................................... $127,023 134,899
NET UNREALIZED GAIN ON DERIVATIVES: ..................................................... 3
OTHER ASSETS, less liabilities: 0.58% ......................................................... 788
TOTAL NET ASSETS: 100.00% ................................................................ $135,690
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Average
Cost
Contract
Price
Fair
Value
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
CREDIT SUISSE INTERNATIONAL ........... A+ January 8, 2013 2,056 CAD $2,056 2,075 USD $2,062 $1.0094 $ 6
Total Number of Contracts ..............1 $6
CREDIT SUISSE INTERNATIONAL ........... A+ January 8, 2013 2,075 USD 2,061 2,058 CAD 2,058 0.9920 (3)
Total Number of Contracts ..............1 $(3)
Net Unrealized Gain ..................... $3
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................ 3.35 5.07
AA ................................. 20.17 14.84
A .................................. 46.81 51.22
BBB ............................... 23.63 21.28
BB ................................. 4.41 4.70
B .................................. 0.65 —
Not Rated ........................... — 1.14
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s
and Fitch ratings.
The accompanying notes are an integral part of these financial statements.
142 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 134,899 $ 106,872
Canadian 131 63
Foreign
Receivables
2 —
Capital units sold 14 152
Interest 1,245 1,274
Unrealized gain on derivatives 6 5
Total assets
Liabilities
Payables
136,297 108,366
Investment securities purchased 507 306
Capital units redeemed 18 115
Management fees 79 60
Unrealized loss on derivatives 3 —
Total liabilities 607 481
Net assets $ 135,690 $ 107,885
Total net assets per series (000s)
Series A $58,138 $43,932
Series F 2,913 1,893
Series I 68 30
Series O 74,571 62,030
Number of units outstanding (Note 3)
Series A 5,723,671 4,393,049
Series F 277,753 184,094
Series I 6,360 2,861
Series O 6,693,509 5,745,748
Net assets per unit — CAD
Series A $10.15 $10.00
Series F 10.49 10.27
Series I 10.62 10.42
Series O 11.14 10.80
Cost of investments held (000s) $127,023 $101,547
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Corporate Bond Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Interest $ 5,528 $ 4,720
Total investment income
Expenses
5,528 4,720
Management fees (Note 4(a)) 836 636
Transfer agent fees (Note 4(c)) 190 164
Custodian fees 10 8
Legal fees 5 3
Audit fees 18 16
Unitholder reporting costs 9 7
Independent review committee fees 1 1
Registration fees 19 18
Other expenses (Note 7) 65 48
Total expenses 1,153 901
Expenses waived/paid by Manager (Note 6) (317) (265)
Net expenses 836 636
Net investment income (loss) 4,692 4,084
Realized and unrealized gain (loss) on
investments
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange gain
468 900
(loss)
Net change in unrealized appreciation (depreciation)
115 (61)
in value of investments and derivatives 2,549 1,504
Net gain (loss) on investments 3,132 2,343
Increase (decrease) in net assets from operations $ 7,824 $ 6,427
Increase (decrease) in net assets from operations
per series (000s)
Series A $2,689 $2,156
Series F 138 74
Series I 3 —*
Series O
Increase (decrease) in net assets from operations
per unit
4,994 4,197
Series A $0.54 $0.54
Series F 0.60 0.62
Series I 0.65 —**
Series O 0.77 0.77
* Amount rounded to zero in the nearest thousand.
** Amount rounded to zero in two decimal places.
Franklin Templeton Investments Funds 143

Bissett Corporate Bond Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 7,824 $ 6,427 $ 2,689 $ 2,156 $ 138 $ 74
Distributions to unitholders
From net investment income (4,771) (4,074) (1,947) (1,612) (91) (51)
From capital gains — — — — — —
From return of capital — — — — — —
(4,771) (4,074) (1,947) (1,612) (91) (51)
Capital unit transactions
Subscriptions 38,895 68,464 21,440 12,703 1,109 1,092
Reinvestments 4,532 3,865 1,736 1,426 67 37
Redemptions (18,675) (61,829) (9,712) (12,000) (203) (448)
24,752 10,500 13,464 2,129 973 681
Increase (decrease) in net assets for the period 27,805 12,853 14,206 2,673 1,020 704
Net assets — beginning of period 107,885 95,032 43,932 41,259 1,893 1,189
Net assets — end of period $ 135,690 $ 107,885 $ 58,138 $ 43,932 $ 2,913 $ 1,893
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 3 $ —* $ 4,994 $ 4,197
Distributions to unitholders
From net investment income (2) — (2,731) (2,411)
From capital gains — — — —
From return of capital — — — —
(2) — (2,731) (2,411)
Capital unit transactions
Subscriptions 41 25 16,305 54,644
Reinvestments 2 — 2,727 2,402
Redemptions (6) (200) (8,754) (49,181)
37 (175) 10,278 7,865
Increase (decrease) in net assets for the period 38 (175) 12,541 9,651
Net assets — beginning of period 30 205 62,030 52,379
Net assets — end of period $ 68 $ 30 $ 74,571 $ 62,030
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
144 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Dividend Income Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 95.28%
COMMON STOCKS: 76.52%
Energy: 18.67%
ARC Resources Ltd. .................... 440,000 $ 10,257 $ 10,679
Bonavista Energy Corp. .................. 386,000 6,581 5,697
Chevron Corp. ........................ 67,500 3,953 7,256
ConocoPhillips ........................ 82,000 3,123 4,725
Crescent Point Energy Corp. .............. 250,000 6,524 9,375
Enbridge Inc. . ........................ 455,500 6,927 19,586
Exxon Mobil Corp. ...................... 30,000 2,325 2,580
Freehold Royalties Ltd. .................. 89,500 1,800 1,993
Husky Energy Inc. ...................... 459,900 12,859 13,516
Keyera Corp. . ........................ 73,000 2,809 3,581
Longview Oil Corp. ..................... 440,000 3,807 2,363
Mullen Group Ltd. ...................... 644,500 9,307 13,464
TransCanada Corp. ..................... 349,500 10,214 16,416
Zargon Oil & Gas Ltd. ................... 358,000 6,431 2,982
86,917 114,213
Financials: 17.74%
AllianceBernstein Holding LP .............. 12,300 494 213
Bank of Montreal ...................... 182,200 10,588 11,079
Bank of Nova Scotia .................... 267,800 10,034 15,377
Canadian Imperial Bank of Commerce . ...... 204,000 10,681 16,312
IGM Financial Inc. ..................... 312,500 11,131 12,997
Power Financial Corp. ................... 546,000 14,513 14,851
Royal Bank of Canada ................... 294,500 10,142 17,614
Sun Life Financial Inc. ................... 190,500 6,640 5,018
The Toronto–Dominion Bank .............. 180,000 9,305 15,057
83,528 108,518
Telecommunication Services: 7.94%
BCE Inc. ............................ 359,000 10,753 15,294
Rogers Communications Inc., B . . . . ........ 305,500 9,926 13,790
Telus Corp. . . . ........................ 302,000 9,965 19,506
30,644 48,590
Consumer Staples: 7.59%
Altria Group Inc. . ...................... 160,000 2,812 4,995
Diageo PLC, American Depositary Receipt ..... 50,000 4,460 5,790
General Mills Inc. ...................... 175,000 5,279 7,024
Kraft Foods Group Inc. .................. 90,666 3,690 3,873
North West Company Inc. ................ 535,100 7,854 11,970
Philip Morris International Inc. . . . . . ........ 85,000 3,077 7,062
The Procter & Gamble Co. ................ 85,000 5,440 5,734
32,612 46,448
Industrials: 7.05%
3MCo............................... 60,000 5,402 5,533
Bird Construction Inc. ................... 358,540 4,173 4,722
Calian Technologies Ltd. ................. 685,000 7,146 14,269
General Electric Co. ..................... 150,000 4,544 3,126
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Industrials: 7.05% (Continued)
Russel Metals Inc. ..................... 390,000 $ 4,862 $ 10,744
Wajax Corp. .......................... 117,000 2,112 4,750
28,239 43,144
Consumer Discretionary: 6.61%
Aimia Inc. . . ......................... 310,100 3,130 4,608
Genuine Parts Co. ...................... 92,000 4,171 5,807
McDonald’s Corp. ...................... 76,500 5,455 6,705
Reitmans (Canada) Ltd., A ................ 543,500 8,661 6,527
Thomson Reuters Corp. .................. 585,000 16,576 16,831
37,993 40,478
Utilities: 4.83%
Canadian Utilities Ltd., A ................. 206,500 6,327 14,798
Caribbean Utilities Co. Ltd., A .............. 90,000 1,610 840
Fortis Inc. . . . ......................... 408,000 7,902 13,925
15,839 29,563
Health Care: 3.04%
Abbott Laboratories ..................... 105,000 5,585 6,832
Johnson & Johnson ..................... 115,000 8,299 8,007
Pfizer Inc. . . ......................... 150,000 3,057 3,738
16,941 18,577
Materials: 2.03%
Labrador Iron Ore Royalty Corp. ............ 278,000 9,093 9,541
Methanex Corp. ....................... 90,500 1,808 2,860
10,901 12,401
Information Technology: 1.02%
Intel Corp. . . ......................... 155,000 3,542 3,176
Microsoft Corp. ........................ 115,000 2,813 3,052
6,355 6,228
Total Common Stocks: ................... 349,969 468,160
PREFERRED STOCKS: 3.14%
Financials: 1.45%
Brookfield Asset Management Inc.,
Preferred, 4, A ...................... 83,200 1,638 1,454
Brookfield Asset Management, 4.75%,
Preferred .......................... 100,000 2,254 2,451
Brookfield Office Properties Inc., 6.00%,
Convertible Preferred, F ................ 107,500 2,608 2,696
Great West Lifeco Inc., 5.90%, Preferred ..... 40,000 1,020 1,022
Power Financial Corp., 5.75%, Preferred, H . . . 50,000 1,255 1,276
8,775 8,899
Energy: 0.70%
Enbridge Inc., 4.00%, Preferred, F .......... 102,300 2,592 2,611
Husky Energy Inc., 4.45%, Preferred, 1 ...... 65,000 1,625 1,694
4,217 4,305
Franklin Templeton Investments Funds 145

Bissett Dividend Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Telecommunication Services: 0.57%
BCE Inc., 3.35%, Preferred, AJ ............. 85,000 $ 2,169 $ 1,935
BCE Inc., 4.80%, Preferred, AA ............. 73,400 1,865 1,559
4,034 3,494
Average
Cost
Fair
Value
Shares
(000s) (000s)
Consumer Staples: 0.42%
George Weston Ltd., 5.20%, Preferred, IV ..... 100,000 $ 1,652 $ 2,554
Total Preferred Stocks: ................... 18,678 19,252
Principal Amount
in Currency
of Issue
BONDS: 15.62%
Canada: 15.62%
407 International Inc., Senior Secured Bond, 6.47%, 7/27/2029 ..................................... 5,000,000 CAD 6,207 6,729
Cameco Corp., Senior Bond, D, 5.67%, 9/2/2019 ................................................. 5,000,000 CAD 5,252 5,751
Canada Housing Trust, 3.75%, 3/15/2020 ....................................................... 4,865,000 CAD 5,284 5,429
Canada Post Corp., 4.08%, 7/16/2025 .......................................................... 5,000,000 CAD 5,910 5,829
Canadian Natural Resources Ltd., 4.95%, 6/1/2015 ............................................... 5,000,000 CAD 5,000 5,357
Capital Desjardins Inc., Senior Secured Note, G, 5.187%, 5/5/2020 ................................... 8,000,000 CAD 8,000 9,126
EnCana Corp., 5.80%, 1/18/2018 .............................................................. 5,000,000 CAD 4,581 5,671
Fairfax Financial Holdings Ltd., Senior Note, 6.40%, 5/25/2021 ...................................... 4,500,000 CAD 4,536 4,909
NAV Canada, 4.713%, 2/24/2016 .............................................................. 6,140,000 CAD 6,235 6,684
Province of Manitoba, 3.85%, 12/1/2021 ........................................................ 5,000,000 CAD 5,523 5,502
Province of New Brunswick, 5.50%, 1/27/2034 ................................................... 5,000,000 CAD 6,326 6,473
Real Estate Asset Liquidity Trust, 2004–1, A1, 4.445%, 10/12/2036 .................................. 987,518 CAD 978 993
Rogers Communications Inc., Senior Note, 5.38%, 11/4/2019 ....................................... 3,500,000 CAD 3,613 3,999
Sun Life Financial Inc., Senior Note, 4.80% to 11/23/2015, Floating Rate Note thereafter, 11/23/2035 ....... 9,500,000 CAD 9,520 9,970
Terasen Gas Vancouver Island, Senior Bond, 6.05%, 2/15/2038 ..................................... 3,500,000 CAD 3,947 4,639
Thomson Corp., 5.20%, 12/1/2014 ............................................................. 8,000,000 CAD 8,230 8,503
89,142 95,564
Total Bonds: ............................................................................... 89,142 95,564
Total Long-Term Investments: .................................................................. 457,789 582,976
SHORT-TERM SECURITIES: 4.33%
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 ............................................ 26,500,000 CAD 26,500 26,500
Total Short-Term Securities: ................................................................... 26,500 26,500
Transaction costs (Note 2) (358) —
TOTAL INVESTMENTS: 99.61% ................................................................ $483,931 609,476
OTHER ASSETS, less liabilities: 0.39% .......................................................... 2,358
TOTAL NET ASSETS: 100.00% ................................................................... $611,834
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................. 2.00 1.30
AA .................................. 1.99 1.89
A ................................... 7.43 6.73
BBB................................. 4.20 6.56
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s
and Fitch ratings.
The accompanying notes are an integral part of these financial statements.
146 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 609,476 $ 525,830
Canadian 88 3
Foreign
Receivables
— 2
Investment securities sold 474 —
Capital units sold 485 479
Dividends and interest 3,508 2,969
Other assets (Note 8) 119 78
Total assets
Liabilities
Payables
614,150 529,361
Investment securities purchased 1,047 558
Capital units redeemed 269 496
Management fees 707 611
Accrued expenses 293 279
Total liabilities 2,316 1,944
Net assets $ 611,834 $ 527,417
Total net assets per series (000s)
Series A $341,411 $296,828
Series F 39,391 32,802
Series I 1,442 925
Series O 204,240 172,192
Series T 25,350 24,670
Number of units outstanding (Note 3)
Series A 12,343,509 11,273,495
Series F 1,231,818 1,090,894
Series I 48,123 32,576
Series O 5,448,486 4,942,208
Series T 2,450,289 2,355,065
Net assets per unit — CAD
Series A $27.66 $26.33
Series F 31.97 30.07
Series I 29.97 28.38
Series O 37.48 34.84
Series T 10.34 10.48
Cost of investments held (000s) $483,931 $413,979
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Dividend Income Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $389; 2011 — $334) $ 19,790 $ 17,592
Interest 4,498 4,260
Total investment income
Expenses
24,288 21,852
Management fees (Note 4(a)) 8,017 7,275
Transfer agent fees (Note 4(c)) 1,511 1,407
Custodian fees 51 51
Legal fees 1 2
Audit fees 21 23
Unitholder reporting costs 30 41
Independent review committee fees 1 1
Registration fees 27 24
Other expenses (Note 7) 527 406
Total expenses 10,186 9,230
Expenses waived/paid by Manager (Note 6) (1,491) (724)
Net expenses 8,695 8,506
Net investment income (loss) 15,593 13,346
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
17,660 9,945
gain (loss)
Net change in unrealized appreciation
25 (15)
(depreciation) in value of investments 13,694 7,549
Transaction costs (Note 11) (120) (68)
Net gain (loss) on investments 31,259 17,411
Increase (decrease) in net assets from operations $ 46,852 $ 30,757
Increase (decrease) in net assets from operations
per series (000s)
Series A $23,570 $14,697
Series F 3,110 2,009
Series I 98 35
Series O 18,219 12,726
Series T 1,855 1,290
Increase (decrease) in net assets from operations
per unit
Series A $1.98 $1.32
Series F 2.67 1.89
Series I 2.37 1.95
Series O 3.53 2.61
Series T 0.76 0.54
Franklin Templeton Investments Funds 147

Bissett Dividend Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 46,852 $ 30,757 $ 23,570 $ 14,697 $ 3,110 $ 2,009
Distributions to unitholders
From net investment income (13,869) (13,091) (7,793) (7,374) (880) (804)
From capital gains — — — — — —
From return of capital (1,556) (1,402) — — — —
(15,425) (14,493) (7,793) (7,374) (880) (804)
Capital unit transactions
Subscriptions 139,889 86,357 82,393 57,487 6,686 3,730
Reinvestments 13,148 12,424 7,131 6,777 762 703
Redemptions (100,047) (88,917) (60,718) (58,056) (3,089) (3,247)
52,990 9,864 28,806 6,208 4,359 1,186
Increase (decrease) in net assets for the period 84,417 26,128 44,583 13,531 6,589 2,391
Net assets — beginning of period 527,417 501,289 296,828 283,297 32,802 30,411
Net assets — end of period $ 611,834 $ 527,417 $ 341,411 $ 296,828 $ 39,391 $ 32,802
Series I Series O Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 98 $ 35 $ 18,219 $ 12,726 $ 1,855 $ 1,290
Distributions to unitholders
From net investment income (30) (14) (4,551) (4,255) (615) (644)
From capital gains — — — — — —
From return of capital — — — — (1,556) (1,402)
(30) (14) (4,551) (4,255) (2,171) (2,046)
Capital unit transactions
Subscriptions 495 507 45,266 20,138 5,049 4,495
Reinvestments 30 14 4,525 4,229 700 701
Redemptions (76) (1) (31,411) (21,220) (4,753) (6,393)
449 520 18,380 3,147 996 (1,197)
Increase (decrease) in net assets for the period 517 541 32,048 11,618 680 (1,953)
Net assets — beginning of period 925 384 172,192 160,574 24,670 26,623
Net assets — end of period $ 1,442 $ 925 $ 204,240 $ 172,192 $ 25,350 $ 24,670
The accompanying notes are an integral part of these financial statements.
148 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Focus Balanced Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.40%
COMMON STOCKS: 57.55%
Financials: 12.44%
ACE Ltd. . ................................. 300 $ 22 $ 24
Bank of Montreal ............................ 965 56 59
Bank of Nova Scotia .......................... 970 49 56
Canadian Imperial Bank of Commerce ............. 690 51 55
CFS Retail Property Trust ...................... 8,470 16 17
Discover Financial Services ..................... 645 25 25
Great–West Lifeco Inc. ........................ 1,855 43 45
Hannover Rueckversicherung AG ................ 315 17 24
IGM Financial Inc. ........................... 1,205 49 50
Intact Financial Corp. ......................... 1,075 58 69
Legal & General Group PLC .................... 9,625 18 23
Lend Lease Group ........................... 1,885 16 18
M&T Bank Corp. ............................ 245 25 24
National Bank of Canada ...................... 730 55 56
Nordea Bank AB ............................ 1,700 16 16
Royal Bank of Canada ........................ 940 52 56
Svenska Handelsbanken AB, A .................. 480 15 17
Swedbank AB, A ............................ 1,000 15 19
Swiss Re AG . . ............................. 260 14 19
The Allstate Corp. ........................... 755 25 30
The Link Real Estate Investment Trust ............. 3,950 15 20
The Toronto–Dominion Bank ................... 725 56 61
The Travelers Companies Inc. ................... 375 24 27
Torchmark Corp. ............................ 570 22 29
Zurich Insurance Group AG .................... 60 14 16
768 855
Consumer Staples: 7.48%
Alimentation Couche–Tard Inc., B ................ 1,160 38 57
British American Tobacco PLC .................. 290 13 15
CVS Caremark Corp. ......................... 545 24 26
George Weston Ltd. .......................... 705 45 50
Kimberly–Clark Corp. ......................... 330 23 28
Koninklijke Ahold NV ......................... 1,230 15 16
Lawson Inc. . . . ............................. 230 14 15
Metro Inc., A . . ............................. 1,120 53 71
Nestle SA ................................. 255 15 16
PepsiCo Inc. . . ............................. 310 20 21
Reynolds American Inc. ....................... 565 21 23
Saputo Inc. . . . ............................. 1,245 45 63
Shoppers Drug Mart Corp. ..................... 1,465 60 63
The Kroger Co. ............................. 1,055 24 27
Wal–Mart Stores Inc. ......................... 340 20 23
430 514
Industrials: 7.01%
Bouygues SA . . ............................. 580 20 17
Canadian National Railway Co. .................. 780 54 70
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Industrials: 7.01% (Continued)
Canadian Pacific Railway Ltd. ................... 745 $ 57 $ 75
Ferrovial SA ................................ 1,225 15 18
General Dynamics Corp. ....................... 350 22 24
Itochu Corp. ............................... 1,350 15 14
Keppel Corp. Ltd. ............................ 1,745 15 16
L–3 Communications Holdings Inc. ............... 270 20 21
Marubeni Corp. ............................. 2,405 16 17
Northrop Grumman Corp. ...................... 375 23 25
Raytheon Co. ............................... 380 19 22
SNC–Lavalin Group Inc., A ..................... 1,170 50 47
Societe BIC SA ............................. 160 15 19
Stantec Inc. ................................ 1,585 45 63
Sumitomo Corp. ............................. 1,025 15 13
Toyota Tsusho Corp. ......................... 855 15 21
416 482
Energy: 6.93%
Canadian Natural Resources Ltd. ................ 1,400 46 40
Chevron Corp. .............................. 240 21 26
EnCana Corp. .............................. 2,310 50 45
EniSpA................................... 705 15 17
Ensign Energy Services Inc. .................... 3,265 52 50
Exxon Mobil Corp. ........................... 275 22 24
Imperial Oil Ltd. ............................. 1,500 64 64
JX Holdings Inc. ............................ 3,140 17 17
Royal Dutch Shell PLC, B ...................... 450 16 16
Total SA, B ................................ 305 15 16
TransCanada Corp. .......................... 1,400 56 66
Valero Energy Corp. .......................... 1,000 26 34
Vermilion Energy Inc. ......................... 1,175 49 61
449 476
Materials: 5.57%
Agrium Inc. ................................ 575 48 57
Alamos Gold Inc. ............................ 2,710 42 47
Barrick Gold Corp. ........................... 1,400 58 49
CF Industries Holdings Inc. ..................... 115 18 23
Goldcorp Inc. .............................. 1,040 49 38
Methanex Corp. ............................. 1,800 54 57
Potash Corp. of Saskatchewan Inc. ............... 1,110 53 45
Silver Wheaton Corp. ......................... 1,435 41 51
Yara International ASA ........................ 330 15 16
378 383
Health Care: 4.66%
Abbott Laboratories .......................... 435 24 28
Amgen Inc. ................................ 385 25 33
AstraZeneca PLC ............................ 260 13 12
Cigna Corp. ................................ 485 26 26
Eli Lilly & Co. ............................... 600 26 29
Johnson & Johnson .......................... 345 23 24
Franklin Templeton Investments Funds 149

Bissett Focus Balanced Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Health Care: 4.66% (Continued)
Merck & Co. Inc. ............................ 635 $ 24 $ 26
Pfizer Inc. ................................. 1,170 22 29
Roche Holding AG ........................... 88 15 18
Valeant Pharmaceuticals International Inc. .......... 1,135 42 67
Watson Pharmaceuticals Inc. ................... 325 25 28
265 320
Information Technology: 4.52%
Apple Inc. ................................. 40 19 21
CGI Group Inc., A ........................... 2,210 41 51
Hewlett–Packard Co. ......................... 1,855 40 26
International Business Machines Corp. ............ 136 20 26
MacDonald Dettwiler & Associates Ltd. ............ 1,085 48 61
Microsoft Corp. ............................. 845 23 22
Open Text Corp. ............................ 880 44 49
Visa Inc., A . . . ............................. 194 25 29
Western Digital Corp. ......................... 620 24 26
284 311
Consumer Discretionary: 3.61%
Canadian Tire Corp. Ltd., A ..................... 895 54 62
Cie Generale des Etablissements Michelin, B ........ 195 14 19
Darden Restaurants Inc. ....................... 450 23 20
McDonald’s Corp. ........................... 255 22 22
Pearson PLC . . ............................. 850 16 17
Reed Elsevier NV ............................ 1,230 15 18
Target Corp. . . ............................. 410 26 24
Average
Cost
Fair
Value
Shares
(000s) (000s)
Consumer Discretionary: 3.61% (Continued)
Tatts Group Ltd. ............................. 6,065 $ 17 $ 19
Tim Hortons Inc. ............................ 965 41 47
228 248
Utilities: 3.22%
ATCO Ltd., I ............................... 880 52 71
Canadian Utilities Ltd., A ...................... 985 55 71
Enagas SA ................................. 725 14 15
NextEra Energy Inc. .......................... 360 21 25
PG&E Corp. ................................ 580 25 23
RWEAG .................................. 400 15 16
182 221
Telecommunication Services: 2.11%
AT&T Inc. ................................. 655 24 22
KDDI Corp. ................................ 200 14 14
Rogers Communications Inc., B ................. 1,205 44 55
Telstra Corp. Ltd. ............................ 4,500 15 20
Vivendi SA ................................. 850 17 19
Vodafone Group PLC ......................... 6,060 16 15
130 145
Total Common Stocks: ......................... 3,530 3,955
PREFERRED STOCKS: 0.35%
Consumer Discretionary: 0.35%
Volkswagen AG, Preferred ..................... 105 19 24
Total Preferred Stocks: ........................ 19 24
Principal Amount
in Currency
of Issue
BONDS: 39.50%
Canada: 37.22%
Bank of Nova Scotia, 2.898% to 8/3/2017, Floating Rate Note thereafter, 8/3/2022 ............................. 84,000 CAD 84 86
bcIMC Realty Corp., 2.96%, 3/7/2019 ................................................................. 79,000 CAD 79 80
British Columbia Municipal Finance Authority, 4.80%, 12/1/2017 ........................................... 145,000 CAD 164 163
Canada Housing Trust
3.75%, 3/15/2020 .............................................................................. 189,000 CAD 201 211
Senior Secured Bond, Floating Rate Note, 3/15/2017 ................................................... 73,000 CAD 73 73
Canada Post Corp., 4.08%, 7/16/2025 ................................................................ 112,000 CAD 123 131
Canadian Utilities Ltd., Senior Note, 3.122%, 11/9/2022 .................................................. 106,000 CAD 106 106
Capital Desjardins Inc., Senior Secured Note, G, 5.187%, 5/5/2020 ......................................... 81,000 CAD 93 92
City of Toronto Canada, 3.50%, 12/6/2021 ............................................................. 88,000 CAD 90 91
Enbridge Pipelines Inc., Senior Note, 2.93%, 11/30/2022 ................................................. 34,000 CAD 34 34
Government of Canada
1.00%, 11/1/2014 .............................................................................. 11,000 CAD 11 11
4.00%, 6/1/2016 ................................................................................ 67,000 CAD 73 73
5.00%, 6/1/2037 ................................................................................ 35,000 CAD 45 52
HSBC Bank Canada, 3.558%, 10/4/2017 .............................................................. 69,000 CAD 69 73
Manulife Financial Corp., Senior Note, 7.768%, 4/8/2019 ................................................. 99,000 CAD 121 124
Province of Manitoba, 4.40%, 9/5/2025 ............................................................... 148,000 CAD 160 169
The accompanying notes are an integral part of these financial statements.
150 Franklin Templeton Investments Funds

Bissett Focus Balanced Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 37.22% (Continued)
Province of New Brunswick, 5.50%, 1/27/2034 ....................................................... 30,000 CAD $ 38 $ 39
Province of Nova Scotia, 4.10%, 6/1/2021 ...........................................................
Province of Ontario
180,000 CAD 202 201
6.50%, 3/8/2029 ............................................................................. 144,000 CAD 190 203
Floating Rate Note, 9/14/2016 ................................................................... 13,000 CAD 13 13
Province of Quebec, 4.50%, 12/1/2018 ............................................................. 184,000 CAD 206 208
RBC Capital Trust, 4.87% to 12/31/2015, Floating Rate Note thereafter, Perpetual ........................... 85,000 CAD 90 92
Sun Life Financial Inc., Senior Note, 4.80% to 11/23/2015, Floating Rate Note thereafter, 11/23/2035 ........... 116,000 CAD 120 122
The Toronto–Dominion Bank, Senior Note, 5.828% to 7/9/2018, Floating Rate Note thereafter, 7/9/2023 ......... 95,000 CAD 109 111
Average
Cost
Fair
Value
2,494 2,558
United States: 1.48%
GE Capital Canada Funding Co., 4.40%, 2/8/2018 ..................................................... 94,000 CAD 98 102
United Kingdom: 0.80%
BP Capital Markets PLC, 2.744%, 2/24/2017 ......................................................... 54,000 CAD 54 55
Total Bonds: ................................................................................... 2,646 2,715
Total Long-Term Investments: ...................................................................... 6,195 6,694
SHORT-TERM SECURITIES: 2.40%
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 ................................................ 165,000 CAD 165 165
Total Short-Term Securities: ....................................................................... 165 165
Transaction costs (Note 2) .......................................................................... (3) —
TOTAL INVESTMENTS: 99.80% .................................................................... $6,357 6,859
OTHER ASSETS, less liabilities: 0.20% .............................................................. 14
TOTAL NET ASSETS: 100.00% .................................................................... $6,873
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................ 10.40 11.89
AA ................................. 10.62 13.81
A .................................. 18.48 13.53
BBB ............................... — 0.79
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s
and Fitch ratings.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 151

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 6,859 $ 5,094
Canadian
Receivables
5 7
Capital units sold — 2
Dividends, interest and withholding tax 33 28
Other assets (Note 8) 11 9
Total assets
Liabilities
Payables
6,908 5,140
Investment securities purchased — 20
Management fees 8 6
Accrued expenses 27 25
Distributions to unitholders — 52
Total liabilities 35 103
Net assets $ 6,873 $ 5,037
Total net assets per series (000s)
Series A $3,631 $3,257
Series F 55 28
Series I 6 6
Series O 2,468 1,701
Series T 713 45
Number of units outstanding (Note 3)
Series A 310,475 292,080
Series F 4,551 2,498
Series I 500 500
Series O 191,639 141,938
Series T 51,552 3,170
Net assets per unit — CAD
Series A $11.70 $11.16
Series F 12.23 11.53
Series I 12.03 11.39
Series O 12.88 11.98
Series T 13.84 14.01
Cost of investments held (000s) $6,357 $4,839
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Focus Balanced Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $6; 2011 — $5) $ 91 $ 62
Interest 90 81
Total investment income
Expenses
181 143
Management fees (Note 4(a)) 79 75
Transfer agent fees (Note 4(c)) 16 11
Custodian fees — —
Legal fees 1 —
Audit fees 19 18
Unitholder reporting costs 5 4
Independent review committee fees 1 1
Registration fees 19 19
Other expenses (Note 7) 23 23
Total expenses 163 151
Expenses waived/paid by Manager (Note 6) (75) (67)
Net expenses 88 84
Net investment income (loss) 93 59
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange gain
74 314
(loss)
Net change in unrealized appreciation (depreciation) in
(1) 4
value of investments 247 (257)
Transaction costs (Note 11) (2) (4)
Net gain (loss) on investments 318 57
Increase (decrease) in net assets from operations $ 411 $ 116
Increase (decrease) in net assets from operations
per series (000s)
Series A $200 $84
Series F 3 1
Series I —* —*
Series O 192 30
Series T 16 1
Increase (decrease) in net assets from operations
per unit
Series A $0.70 $0.30
Series F 0.92 0.50
Series I 0.79 0.27
Series O 1.12 0.28
Series T 0.93 0.22
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
152 Franklin Templeton Investments Funds

Bissett Focus Balanced Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 411 $ 116 $ 200 $ 84 $ 3 $ 1
Distributions to unitholders
From net investment income (85) (65) (45) (42) (1) (1)
From capital gains — (310) — (202) — (2)
From return of capital (16) (3) — — — —
(101) (378) (45) (244) (1) (3)
Capital unit transactions
Subscriptions 3,797 2,812 1,346 1,513 24 6
Reinvestments 82 415 36 248 1 4
Redemptions (2,353) (2,603) (1,163) (2,070) — (20)
1,526 624 219 (309) 25 (10)
Increase (decrease) in net assets for the period 1,836 362 374 (469) 27 (12)
Net assets — beginning of period 5,037 4,675 3,257 3,726 28 40
Net assets — end of period $ 6,873 $ 5,037 $ 3,631 $ 3,257 $ 55 $ 28
Series I Series O Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ —* $ —* $ 192 $ 30 $ 16 $ 1
Distributions to unitholders
From net investment income — — (30) (21) (9) (1)
From capital gains — — — (104) — (2)
From return of capital — — — — (16) (3)
— — (30) (125) (25) (6)
Capital unit transactions
Subscriptions — — 1,760 1,293 667 —
Reinvestments — — 30 157 15 6
Redemptions — — (1,185) (513) (5) —
— — 605 937 677 6
Increase (decrease) in net assets for the period — — 767 842 668 1
Net assets — beginning of period 6 6 1,701 859 45 44
Net assets — end of period $ 6 $ 6 $ 2,468 $ 1,701 $ 713 $ 45
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 153

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Microcap Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 93.13%
COMMON STOCKS: 93.13%
Industrials: 23.93%
ADF Group Inc. ..................... 1,584,500 $ 2,773 $ 1,965
Calian Technologies Ltd. . . . ............ 266,700 2,148 5,555
Canam Group Inc., A .................. 835,400 3,306 4,996
Cervus Equipment Corp. . . . ............ 97,050 699 1,796
Clarke Inc. . ........................ 507,659 2,634 2,386
Contrans Group Inc., A ................. 730,400 4,184 7,194
Exco Technologies Ltd. ................ 776,300 1,646 4,751
Foremost Income Fund ................ 3,204 19 27
INSCAPE Corp., B .................... 550,000 1,135 913
Transat A.T. Inc., B ................... 1,044,500 4,925 6,069
ZCL Composites Inc. .................. 1,326,200 5,462 6,697
28,931 42,349
Consumer Discretionary: 20.55%
Automodular Corp. ................... 1,033,247 2,087 2,067
Danier Leather Inc. ................... 232,212 2,415 2,833
easyhome Ltd. ...................... 692,800 5,364 6,256
Glacier Media Inc. ................... 3,622,100 9,565 6,302
Indigo Books & Music Inc. . . ............ 638,500 7,933 6,359
Le Chateau Inc., A .................... 1,858,400 10,227 6,802
Mega Brands Inc. .................... 481,560 4,352 4,666
Mega Brands Inc., Warrants, 3/30/15 ...... 600,000 89 84
Rainmaker Entertainment Inc. . .......... 1,679,400 3,031 336
Sportscene Group Inc. ................ 94,500 1,324 662
46,387 36,367
Energy: 18.88%
AKITA Drilling Ltd., A .................. 18,100 181 190
Angle Energy Inc. .................... 624,500 2,964 2,223
Chinook Energy Inc. .................. 286,400 418 401
Delphi Energy Corp. .................. 2,085,000 3,657 2,356
Essential Energy Services Ltd. . .......... 2,645,676 2,552 5,503
Horizon North Logistics Inc. ............. 999,689 1,777 6,858
Logan International Inc. ................ 170,500 888 511
Peyto Exploration & Development Corp. .... 104,961 1,779 2,405
Rock Energy Inc. .................... 2,700,000 5,592 2,970
Torc Oil & Gas Ltd. ................... 643,300 1,443 1,486
Twin Butte Energy Ltd. ................ 1,228,441 3,816 3,157
Wenzel Downhole Tools Ltd. ............ 1,125,325 1,687 2,048
Xtreme Drilling and Coil Services Corp. ..... 2,029,900 2,382 3,309
29,136 33,417
Information Technology: 9.76%
Aastra Technologies Ltd. . . . ............ 166,122 2,720 2,718
Blackline GPS Corp. .................. 1,670,000 2,287 2,204
Blackline GPS Corp., Warrants, 7/31/15 ..... 670,000 — 273
Critical Control Solutions Corp. . .......... 4,318,182 2,500 864
Average
Cost
Fair
Value
Shares
(000s) (000s)
Information Technology: 9.76% (Continued)
Enghouse Systems Ltd. ........... 151,100 $ 1,189 $ 2,531
Smart Technologies Inc. . . . ....... 1,551,330 2,198 2,358
Softchoice Corp. ................ 540,800 4,921 6,327
15,815 17,275
Financials: 9.57%
Equitable Group Inc. ............. 325,200 6,368 10,569
Equity Financial Holdings Inc. ...... 561,300 3,467 4,468
Sprott Resource Lending Corp. ..... 1,250,000 2,407 1,900
12,242 16,937
Materials: 5.83%
Brampton Brick Ltd., A ........... 819,400 4,598 5,162
Fortress Paper Ltd. .............. 279,500 4,329 2,242
Norbord Inc. .................. 35,000 256 1,055
Orbit Garant Drilling Inc. . . . ....... 841,100 1,732 1,851
10,915 10,310
Consumer Staples: 4.61%
Corby Distilleries Ltd., B ........... 228,100 3,550 3,923
Sun-Rype Products Ltd. . . . ....... 741,600 5,542 4,227
9,092 8,150
Total Common Stocks: ............ 152,518 164,805
Total Long-Term Investments: ....... 152,518 164,805
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 6.79%
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 .............. 12,020,000 CAD 12,020 12,020
Total Short-Term Securities: ........ 12,020 12,020
Transaction costs (Note 2) ........... (640) —
TOTAL INVESTMENTS: 99.92% ...... $163,898 176,825
OTHER ASSETS, less liabilities:
0.08% ....................... 147
TOTAL NET ASSETS: 100.00% ...... $176,972
The accompanying notes are an integral part of these financial statements.
154 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 176,825 $ 146,876
Canadian
Receivables
5 —
Capital units sold 101 29
Dividends and interest 417 475
Other assets (Note 8) 13 9
Total assets
Liabilities
Payables
177,361 147,389
Investment securities purchased — 20
Capital units redeemed 47 48
Management fees 262 217
Accrued expenses 80 73
Total liabilities 389 358
Net assets $ 176,972 $ 147,031
Total net assets per series (000s)
Series A $48,589 $39,542
Series F 71,824 58,691
Series O 56,559 48,798
Number of units outstanding (Note 3)
Series A 2,186,393 1,964,985
Series F 2,771,734 2,535,783
Series O 1,632,027 1,615,151
Net assets per unit — CAD
Series A $22.22 $20.13
Series F 25.91 23.14
Series O 34.66 30.21
Cost of investments held (000s) $163,898 $146,790
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Microcap Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 3,993 $ 3,595
Interest 104 99
Total investment income
Expenses
4,097 3,694
Management fees (Note 4(a)) 2,973 2,793
Transfer agent fees (Note 4(c)) 301 250
Custodian fees 13 13
Legal fees 1 —
Audit fees 20 19
Unitholder reporting costs 14 12
Independent review committee fees 1 1
Registration fees 18 17
Other expenses (Note 7) 118 98
Total expenses 3,459 3,203
Expenses waived/paid by Manager (Note 6) (82) (47)
Net expenses 3,377 3,156
Net investment income (loss) 720 538
Realized and unrealized gain (loss) on investments
and transaction costs
Net realized gain (loss) on investments
Net change in unrealized appreciation (depreciation)
25,906 21,882
in value of investments 12,841 (22,767)
Transaction costs (Note 11) (205) (315)
Net gain (loss) on investments 38,542 (1,200)
Increase (decrease) in net assets from operations $ 39,262 $ (662)
Increase (decrease) in net assets from operations
per series (000s)
Series A $10,088 $(2,050)
Series F 15,517 (147)
Series O 13,657 1,535
Increase (decrease) in net assets from operations
per unit
Series A $4.91 $(1.13)
Series F 6.25 (0.05)
Series O 9.19 1.09
Franklin Templeton Investments Funds 155

Bissett Microcap Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 39,262 $ (662) $ 10,088 $ (2,050) $ 15,517 $ (147)
Distributions to unitholders
From net investment income (317) — (88) — (128) —
From capital gains (20,660) (10,225) (5,739) (2,760) (8,363) (4,092)
From return of capital — — — — — —
(20,977) (10,225) (5,827) (2,760) (8,491) (4,092)
Capital unit transactions
Subscriptions 25,129 44,717 17,066 24,832 3,947 4,030
Reinvestments 20,284 9,980 5,760 2,730 8,014 3,938
Redemptions (33,757) (41,861) (18,040) (14,374) (5,854) (6,816)
11,656 12,836 4,786 13,188 6,107 1,152
Increase (decrease) in net assets for the period 29,941 1,949 9,047 8,378 13,133 (3,087)
Net assets — beginning of period 147,031 145,082 39,542 31,164 58,691 61,778
Net assets — end of period $ 176,972 $ 147,031 $ 48,589 $ 39,542 $ 71,824 $ 58,691
Series O
2012 2011
Increase (decrease) in net assets from operations $ 13,657 $ 1,535
Distributions to unitholders
From net investment income (101) —
From capital gains (6,558) (3,373)
From return of capital — —
Capital unit transactions
(6,659) (3,373)
Subscriptions 4,116 15,855
Reinvestments 6,510 3,312
Redemptions (9,863) (20,671)
763 (1,504)
Increase (decrease) in net assets for the period 7,761 (3,342)
Net assets — beginning of period 48,798 52,140
Net assets — end of period $ 56,559 $ 48,798
The accompanying notes are an integral part of these financial statements.
156 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett Small Cap Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 92.09%
COMMON STOCKS: 92.09%
Consumer Discretionary: 20.85%
Automodular Corp. .................. 2,000,000 $ 700 $ 4,000
Danier Leather Inc. .................. 206,100 1,995 2,514
Glacier Media Inc. .................. 5,887,100 13,702 10,244
GVIC Communications Corp., C .......... 2,272,900 2,371 841
Indigo Books & Music Inc. . . ........... 1,886,800 27,182 18,792
Le Chateau Inc., A ................... 1,857,900 15,596 6,800
Leon’s Furniture Ltd. ................. 2,336,400 24,643 30,373
Reitmans (Canada) Ltd. . ............. 700,000 8,149 8,099
Reitmans (Canada) Ltd., A . . ........... 200,300 2,918 2,406
RONA Inc. . . . ..................... 2,293,400 27,736 24,333
Sears Canada Inc. .................. 1,058,200 22,082 10,561
147,074 118,963
Industrials: 20.55%
Canam Group Inc., A ................. 3,203,000 14,972 19,154
Contrans Group Inc., A . . . ............. 12,000 100 118
Exco Technologies Ltd. . . ............. 1,906,100 9,589 11,665
Richelieu Hardware Ltd. . ............. 1,079,000 21,602 38,326
Transat A.T. Inc., B .................. 2,535,800 13,460 14,733
Transcontinental Inc., A . . ............. 1,873,800 27,830 20,799
ZCL Composites Inc. ................. 2,458,500 22,696 12,416
110,249 117,211
Energy: 19.24%
Advantage Oil & Gas Ltd. . ............. 2,485,000 9,072 7,877
Angle Energy Inc. ................... 1,893,900 9,457 6,742
Canyon Services Group Inc. . ........... 454,100 4,253 5,127
Chinook Energy Inc. ................. 3,856,785 7,388 5,400
Delphi Energy Corp. ................. 4,564,400 8,457 5,158
Horizon North Logistics Inc. . ........... 2,621,018 7,752 17,980
Nuvista Energy Ltd. .................. 3,631,336 34,934 21,243
Savanna Energy Services Corp. ......... 4,812,000 53,842 34,358
Xtreme Drilling and Coil Services Corp. .... 3,597,700 12,078 5,864
147,233 109,749
Financials: 13.93%
AGF Management Ltd. . . ............. 1,348,700 12,427 13,352
Equitable Group Inc. ................. 1,340,400 32,655 43,563
Granite Real Estate Inc. . . ............. 439,600 7,061 16,582
Home Capital Group Inc. . ............. 96,032 1,186 5,668
Westaim Corp. ..................... 12,700,000 — 317
53,329 79,482
Materials: 7.74%
Fortress Paper Ltd. .................. 500,200 7,899 4,012
Major Drilling Group International Inc. .... 625,000 5,628 6,100
Norbord Inc. ...................... 203,060 2,249 6,122
Winpak Ltd. ....................... 1,899,764 15,614 27,927
31,390 44,161
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Information Technology: 5.90%
Aastra Technologies Ltd. . . . ....... 1,095,361 $ 20,364 $ 17,920
Enghouse Systems Ltd. ........... 590,600 2,598 9,893
Softchoice Corp. ................ 500,000 5,140 5,850
28,102 33,663
Consumer Staples: 3.88%
Corby Distilleries Ltd., A ........... 364,600 5,542 6,446
Corby Distilleries Ltd., B ........... 368,900 5,477 6,345
Maple Leaf Foods Inc. ........... 783,400 8,135 9,346
19,154 22,137
Total Common Stocks: ............ 536,531 525,366
Total Long-Term Investments: ....... 536,531 525,366
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 7.35%
HSBC Bank Canada,
1.187%, 1/4/2013 ............. 5,000,000 CAD 5,000 4,999
Royal Bank of Canada, Term Deposit,
0.97%, 1/2/2013 .............. 36,905,000 CAD 36,905 36,905
Total Short-Term Securities: ........ 41,905 41,904
Transaction costs (Note 2) ........... (2,444) —
TOTAL INVESTMENTS: 99.44% ...... $575,992 567,270
OTHER ASSETS, less liabilities:
0.56% ....................... 3,203
TOTAL NET ASSETS: 100.00% ...... $570,473
Franklin Templeton Investments Funds 157

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 567,270 $ 509,974
Canadian
Receivables
3 —
Investment securities sold 2,480 —
Capital units sold 335 361
Dividends and interest 1,473 2,412
Other assets (Note 8) 61 71
Total assets
Liabilities
Payables
571,622 512,818
Capital units redeemed 830 838
Management fees 166 162
Accrued expenses 153 168
Other liabilities (Note 9) — 84
Total liabilities 1,149 1,252
Net assets $ 570,473 $ 511,566
Total net assets per series (000s)
Series A $46,892 $46,731
Series F 44,630 40,194
Series O 478,951 424,641
Number of units outstanding (Note 3)
Series A 941,265 1,005,374
Series F 788,664 769,822
Series O 6,817,994 6,670,729
Net assets per unit — CAD
Series A $49.82 $46.49
Series F 56.59 52.22
Series O 70.25 63.66
Cost of investments held (000s) $575,992 $559,475
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Small Cap Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 13,996 $ 14,409
Interest 376 366
Total investment income
Expenses
14,372 14,775
Management fees (Note 4(a)) 1,999 2,380
Transfer agent fees (Note 4(c)) 432 488
Custodian fees 43 52
Legal fees 1 3
Audit fees 21 22
Unitholder reporting costs 10 24
Independent review committee fees 1 1
Registration fees 22 22
Other expenses (Note 7) 376 377
Total expenses 2,905 3,369
Expenses waived/paid by Manager (Note 6) (760) (818)
Net expenses 2,145 2,551
Net investment income (loss) 12,227 12,224
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net change in unrealized appreciation (depreciation)
64,126 71,186
in value of investments 40,779 (148,561)
Transaction costs (Note 11) (466) (606)
Net gain (loss) on investments 104,439 (77,981)
Increase (decrease) in net assets from operations $ 116,666 $ (65,757)
Increase (decrease) in net assets from operations
per series (000s)
Series A $8,729 $(7,376)
Series F 8,344 (5,621)
Series O 99,593 (52,760)
Increase (decrease) in net assets from operations
per unit
Series A $9.52 $(7.27)
Series F 11.37 (7.52)
Series O 15.27 (7.64)
The accompanying notes are an integral part of these financial statements.
158 Franklin Templeton Investments Funds

Bissett Small Cap Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 116,666 $ (65,757) $ 8,729 $ (7,376) $ 8,344 $ (5,621)
Distributions to unitholders
From net investment income (11,643) (10,379) (963) (951) (915) (821)
From capital gains (50,320) (36,719) (4,162) (3,363) (3,954) (2,904)
From return of capital — — — — — —
(61,963) (47,098) (5,125) (4,314) (4,869) (3,725)
Capital unit transactions
Subscriptions 85,985 84,080 3,708 6,798 660 879
Reinvestments 61,603 46,826 5,011 4,226 4,794 3,678
Redemptions (143,385) (223,474) (12,162) (17,180) (4,493) (6,852)
4,203 (92,568) (3,443) (6,156) 961 (2,295)
Increase (decrease) in net assets for the period 58,907 (205,423) 161 (17,846) 4,436 (11,641)
Net assets — beginning of period 511,566 716,989 46,731 64,577 40,194 51,835
Net assets — end of period $ 570,473 $ 511,566 $ 46,892 $ 46,731 $ 44,630 $ 40,194
Series O
2012 2011
Increase (decrease) in net assets from operations $ 99,593 $ (52,760)
Distributions to unitholders
From net investment income (9,765) (8,607)
From capital gains (42,204) (30,452)
From return of capital — —
Capital unit transactions
(51,969) (39,059)
Subscriptions 81,617 76,403
Reinvestments 51,798 38,922
Redemptions (126,730) (199,442)
6,685 (84,117)
Increase (decrease) in net assets for the period 54,310 (175,936)
Net assets — beginning of period 424,641 600,577
Net assets — end of period $ 478,951 $ 424,641
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 159

STATEMENT OF INVESTMENTS As at December 31, 2012
Shares
Bissett Strategic Income Fund
Average
Cost
Fair
Value
(000s) . (000s)
LONG-TERM INVESTMENTS: 98.27%
COMMON STOCKS: 49.42%
Canada: 49.42%
Allied Properties Real Estate Investment Trust . . . 3,600 $ 98 $ 119
ARC Resources Ltd. . . . .................. 16,900 381 410
Argent Energy Trust . . . .................. 130,000 1,285 1,197
Badger Daylighting Inc. . .................. 5,500 134 169
Bank of Montreal . ...................... 14,800 856 900
Baytex Energy Corp. . . . .................. 28,500 1,342 1,221
Bird Construction Inc. . . .................. 13,700 189 180
Bonavista Energy Corp. . .................. 130,500 2,203 1,926
Bonterra Energy Corp. . . .................. 23,400 1,054 1,061
Boston Pizza Royalties Income Fund . ........ 49,200 868 941
Calloway Real Estate Investment Trust ........ 9,500 269 275
Canadian Energy Services & Technology Corp., A . . . 58,200 575 614
Canadian Imperial Bank of Commerce ........ 14,000 1,047 1,119
Canexus Corp. . ........................ 193,800 1,523 1,638
Canyon Services Group Inc. ................ 42,100 434 475
CML Healthcare Inc. . . . .................. 233,400 2,072 1,550
Cominar Real Estate Investment Trust ........ 64,200 1,504 1,448
Crescent Point Energy Corp. ............... 27,700 1,101 1,039
Crombie Real Estate Investment Trust ........ 40,800 619 602
Davis & Henderson Income Corp. . . . ........ 67,300 1,244 1,446
DirectCash Payments Inc. ................. 26,200 598 611
Eagle Energy Trust ...................... 157,200 1,507 1,206
Freehold Royalties Ltd. . .................. 69,400 1,347 1,546
Shares
Average
Cost
Fair
Value
(000s) . (000s)
Canada : 49.42% (Continued)
Genivar Inc. .......................... 56,800 $ 1,194 $ 1,120
Keyera Corp. .......................... 4,900 205 240
Labrador Iron Ore Royalty Corp. ............ 32,300 1,036 1,109
Medical Facilities Corp. .................. 121,200 1,617 1,668
Morneau Shepell Inc. .................... 122,900 1,447 1,557
New Flyer Industries Inc. . . . .............. 211,800 1,553 1,824
North West Company Inc. ................ 17,500 374 391
Northern Property Real Estate Investment
Trust ............................. 15,800 498 487
Parallel Energy Trust .................... 157,900 874 628
Parkland Fuel Corp. ..................... 17,800 242 336
Pembina Pipeline Corp. .................. 31,898 887 907
PHX Energy Services Corp. ................ 116,000 1,060 1,054
Power Corp. of Canada .................. 15,100 357 382
Power Financial Corp. ................... 51,700 1,374 1,406
RioCan Real Estate Investment Trust ......... 6,600 181 181
The Keg Royalties Income Fund ............ 25,900 369 376
Twin Butte Energy Ltd. ................... 398,344 1,025 1,024
Veresen Inc. .......................... 103,100 1,305 1,212
Vicwest Inc. .......................... 76,300 817 946
Wajax Corp. .......................... 23,300 973 946
Zargon Oil & Gas Ltd. .................... 49,600 696 413
40,334 39,900
Total Common Stocks: ................... 40,334 39,900
Principal Amount
in Currency
of Issue
BONDS: 15.34%
Canada: 12.93%
407 International Inc., Senior Secured Bond, 6.47%, 7/27/2029 ...................................... 163,000 CAD 218 219
AltaLink Investments LP, Senior Bond, 12–1, 3.674%, 6/5/2019 ...................................... 21,000 CAD 21 21
Bank of Montreal, Senior Note, 4.609%, 9/10/2025 ................................................ 107,000 CAD 120 122
Bank of Nova Scotia
2.898% to 8/3/2017, Floating Rate Note thereafter, 8/3/2022, ...................................... 30,000 CAD 30 31
3.036% to 10/17/2019, Floating Rate Note thereafter, 10/18/2024 .................................. 38,000 CAD 38 38
Baytex Energy Corp., Senior Note, 6.625%, 7/19/2022 .............................................. 15,000 CAD 15 16
bcIMC Realty Corp., 5.65%, 1/5/2018 ........................................................... 85,000 CAD 98 98
Bell Aliant Regional Communications LP, Senior Note, 5.41%, 9/26/2016 .............................. 97,000 CAD 105 106
Caisse Centrale Desjardins du Quebec, Senior Note, 2.281%, 10/17/2016 .............................. 40,000 CAD 40 40
Calloway Real Estate Investment Trust, Senior Bond, 5.37%, 10/12/2016 ............................... 38,000 CAD 41 41
Cameco Corp.
Senior Bond, D, 5.67%, 9/2/2019 ............................................................ 93,000 CAD 105 107
Senior Bond, E, 3.75%, 11/14/2022 .......................................................... 39,000 CAD 39 39
Canada Housing Trust
Secured Bond, 4.10%, 12/15/2018 ........................................................... 31,000 CAD 35 35
Senior Secured Bond, Floating Rate Note, 3/15/2017 ............................................. 393,000 CAD 396 396
The accompanying notes are an integral part of these financial statements.
160 Franklin Templeton Investments Funds

Bissett Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 12.93% (Continued)
Canadian Imperial Bank of Commerce
2.35%, 10/18/2017 ..................................................................... 18,000 CAD $ 18 $ 18
Subordinated Note, 5.15% to 6/6/2013, Floating Rate Note thereafter, 6/6/2018 ...................... 109,000 CAD 113 110
Canadian Natural Resources Ltd., 4.95%, 6/1/2015 ..............................................
Capital Desjardins Inc.
48,000 CAD 52 51
Senior Note, 3.797% to 11/23/2015, Floating Rate Note thereafter, 11/23/2020 ...................... 75,000 CAD 78 78
Senior Note, 5.756% to 4/1/2014, Floating Rate Note thereafter, 4/1/2019 .......................... 92,000 CAD 96 96
Senior Secured Note, G, 5.187%, 5/5/2020 .................................................. 63,000 CAD 70 72
CDP Financial Inc., Senior Note, 4.60%, 7/15/2020 .............................................. 105,000 CAD 117 119
Centre Street Trust, Secured Note, A, 3.69%, 6/14/2021 .......................................... 29,000 CAD 29 29
City of Montreal, 5.00%, 12/1/2018 ........................................................... 108,000 CAD 121 121
City of Toronto, 4.70%, 6/10/2041 ............................................................ 56,000 CAD 62 65
City of Toronto Canada, 3.80%, 12/13/2042 ....................................................
CU Inc.
91,000 CAD 91 91
Senior Bond, 3.805%, 9/10/2042 .......................................................... 32,000 CAD 32 32
Senior Note, 5.563%, 5/26/2028 ........................................................... 54,000 CAD 66 66
DirectCash Payments Inc., 8.125%, 8/8/2019 .................................................. 12,000 CAD 12 12
Enbridge Inc., Floating Rate Note, 8/19/2015 ...................................................
Enbridge Income Fund Holdings Inc.
157,000 CAD 158 159
3.94%, 1/13/2023 ...................................................................... 27,000 CAD 27 27
Senior Note, 2.92%, 12/14/2017 ........................................................... 21,000 CAD 21 21
Senior Note, Floating Rate Note, 11/28/2014 ................................................. 45,000 CAD 45 45
Enbridge Pipelines Inc., Senior Note, 2.93%, 11/30/2022 ......................................... 32,000 CAD 32 32
Flint Energy Services Ltd., 7.50%, 6/15/2019 ...................................................
Government of Canada
65,000 CAD 72 72
1.00%, 11/1/2014 ...................................................................... 240,000 CAD 240 239
3.50%, 6/1/2020 ....................................................................... 26,000 CAD 30 29
2.75%, 6/1/2022 ....................................................................... 367,000 CAD 400 397
5.75%, 6/1/2029 ....................................................................... 120,000 CAD 178 178
5.75%, 6/1/2033 ....................................................................... 240,000 CAD 372 373
4.00%, 6/1/2041 ....................................................................... 142,000 CAD 189 190
Great–West Lifeco Finance Delaware, 5.691% to 6/21/2017, Floating Rate Note thereafter, 6/21/2067 ...... 69,000 CAD 73 76
Home Capital Group Inc., 5.20%, 5/4/2016 ....................................................
HSBC Bank Canada
101,000 CAD 103 105
3.86%, 5/21/2015 ...................................................................... 85,000 CAD 89 89
2.572%, 11/23/2015 .................................................................... 120,000 CAD 120 122
3.558%, 10/4/2017 ..................................................................... 80,000 CAD 84 84
Hydro One Inc., 6.93%, 6/1/2032 ............................................................ 52,000 CAD 73 74
Hydro–Quebec, HL, 11.00%, 8/15/2020 ....................................................... 200,000 CAD 316 316
Inter Pipeline Fund, Senior Note, 3.839%, 7/30/2018 ............................................ 75,000 CAD 80 79
Manulife Bank of Canada, Senior Note, Floating Rate Note, 12/3/2014 ............................... 18,000 CAD 18 18
Manulife Financial Corp., Senior Note, 5.505%, 6/26/2018 ........................................ 97,000 CAD 107 109
Master Credit Card Trust, Secured Note, 12–1, 2.626%, 1/21/2017 ................................. 71,000 CAD 71 73
National Housing Association, 1.70%, 8/1/2017 ................................................. 23,536 CAD 23 23
OMERS Realty Corp., 4.74%, 6/4/2018 ........................................................ 81,000 CAD 90 91
Ontario School Boards Finance, 06A1, 5.07%, 4/18/2031 ......................................... 192,873 CAD 210 212
Ontario Strategic Infrastructure Finance, 4.60%, 6/1/2015 ......................................... 380,000 CAD 406 406
OPB Finance Trust, Senior Bond, 3.89%, 7/4/2042 .............................................. 30,000 CAD 30 30
Province of Manitoba, 4.40%, 9/5/2025 ....................................................... 325,000 CAD 370 371
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 161
Average
Cost
Fair
Value

Bissett Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
Canada: 12.93% (Continued)
Province of New Brunswick
3.35%, 12/3/2021 ...................................................................... 118,000 CAD $ 121 $ 124
5.50%, 1/27/2034 ...................................................................... 365,000 CAD 467 473
3.55%, 6/3/2043 ....................................................................... 81,000 CAD 81 82
Province of Nova Scotia, 4.40%, 6/1/2042 .....................................................
Province of Ontario
107,000 CAD 122 126
4.20%, 3/8/2018 ....................................................................... 106,000 CAD 118 118
6.50%, 3/8/2029 ....................................................................... 135,000 CAD 190 190
5.85%, 3/8/2033 ....................................................................... 212,000 CAD 287 288
4.70%, 6/2/2037 ....................................................................... 26,000 CAD 32 31
4.65%, 6/2/2041 ....................................................................... 55,000 CAD 66 67
Floating Rate Note, 10/5/2015 ............................................................. 378,000 CAD 379 380
Floating Rate Note, 11/23/2017 ............................................................ 246,000 CAD 246 246
Senior Note, 3.00%, 7/16/2018 ............................................................ 10,000 USD 11 11
Province of Quebec, 6.25%, 6/1/2032 ........................................................ 346,000 CAD 476 479
PSP Capital Inc., Senior Note, 2.26%, 2/16/2017 ................................................
Rogers Communications Inc.
92,000 CAD 93 93
Senior Note, 5.38%, 11/4/2019 ............................................................ 31,000 CAD 35 35
Senior Note, 5.34%, 3/22/2021 ............................................................
Royal Bank of Canada
95,000 CAD 106 109
5.95%, 6/18/2014 ...................................................................... 89,000 CAD 94 94
Senior Note, 2.68%, 12/8/2016 ............................................................ 70,000 CAD 71 71
Senior Note, 3.66%, 1/25/2017 ............................................................ 116,000 CAD 123 123
Senior Note, 2.58%, 4/13/2017 ............................................................ 80,000 CAD 81 81
Senior Note, 4.93%, 7/16/2025 ............................................................ 62,000 CAD 71 73
Subordinated Note, 4.84% to 3/11/2013, Floating Rate Note thereafter, 3/11/2018 ................... 69,000 CAD 71 69
Sun Life Financial Inc., Senior Bond, 4.95% to 6/1/2016, Floating Rate Note thereafter, 6/1/2036 ............ 140,000 CAD 143 148
Suncor Energy Inc., 5.80%, 5/22/2018 ........................................................
The Toronto–Dominion Bank
68,000 CAD 78 79
Subordinated Note, 5.48% to 4/2/2015, Floating Rate Note thereafter, 4/2/2020 ........................ 110,000 CAD 119 118
Subordinated Note, 5.763% to 12/18/2017, Floating Rate Note thereafter, 12/18/2106 ................ 193,000 CAD 219 221
Thomson Reuters Corp., 5.70%, 7/15/2015 .................................................... 70,000 CAD 77 77
TransCanada PipeLines Ltd., Senior Bond, 8.05%, 2/17/2039 ..................................... 45,000 CAD 72 74
Westcoast Energy Inc., Senior Note, 4.57%, 7/2/2020 ............................................ 47,000 CAD 52 53
Average
Cost
Fair
Value
10,386 10,442
United States: 1.85%
American International Group Inc., Senior Note, 4.90%, 6/2/2014 .................................. 102,000 CAD 104 104
Aon Finance NS1 ULC, Senior Note, 4.76%, 3/8/2018 ........................................... 101,000 CAD 106 108
Bank of America Corp., 4.36%, 9/21/2015 ..................................................... 145,000 CAD 147 152
Centel Capital Corp., Senior Bond, 9.00%, 10/15/2019 ........................................... 100,000 USD 118 118
GE Capital Canada Funding Co.
4.40%, 2/8/2018 ....................................................................... 75,000 CAD 82 82
5.68%, 9/10/2019 ...................................................................... 118,000 CAD 134 138
5.73%, 10/22/2037 ..................................................................... 99,000 CAD 116 122
Senior Note, Floating Rate Note, 6/11/2014 .................................................... 34,000 CAD 34 34
General Electric Capital Corp., B, 6.25% to 12/15/2022, Floating Rate Note thereafter, Perpetual .......... 13,000 USD 13 14
JPMorgan Chase & Co., Senior Note, 2.92%, 9/19/2017 .......................................... 81,000 CAD 81 81
The accompanying notes are an integral part of these financial statements.
162 Franklin Templeton Investments Funds

Bissett Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 1.85% (Continued)
Metropolitan Life Global Funding I
4.45%, 11/8/2013 ...................................................................... 150,000 CAD $ 154 $ 154
2.624%, 4/10/2015 ..................................................................... 130,000 CAD 131 131
Morgan Stanley, Senior Note, 4.85%, 2/3/2016 ................................................. 14,000 CAD 14 15
Safeway Inc., Senior Bond, 3.95%, 8/15/2020 .................................................. 37,000 USD 35 37
The Goldman Sachs Group Inc., Senior Note, 5.25%, 6/1/2016 .................................... 70,000 CAD 74 75
Wells Fargo Financial Canada Corp., Senior Note, 2.774%, 2/9/2017 ................................ 124,000 CAD 126 126
Average
Cost
Fair
Value
1,469 1,491
United Kingdom: 0.22%
BP Capital Markets PLC, 2.744%, 2/24/2017 ................................................... 72,000 CAD 72 73
Heathrow Funding Ltd., Secured Note, 4.00%, 7/3/2019 ......................................... 14,000 CAD 14 15
HSBC Bank Canada, 2.901%, 1/13/2017 ...................................................... 90,000 CAD 92 92
178 180
South Korea: 0.20%
Korea Gas Corp., Senior Note, 4.58%, 5/12/2016 ............................................... 151,000 CAD 156 160
France: 0.07%
Government of France, 4.45%, 10/26/2018 .................................................... 52,000 CAD 54 56
Supranational: 0.07%
Inter–American Development Bank, 4.40%, 1/26/2026 ........................................... 48,000 CAD 53 54
Total Bonds: ............................................................................. 12,296 12,383
INVESTMENTS IN UNDERLYING FUNDS: 33.51%
Bissett Bond Fund ........................................................................ 343,962 5,252 5,270
Bissett Corporate Bond Fund ................................................................ 60,494 662 675
Franklin Strategic Income Fund .............................................................. 2,434,461 20,444 21,107
Total Investments In Underlying Funds: ......................................................... 26,358 27,052
Total Long-Term Investments: ................................................................ 78,988 79,335
Units
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 1.28%
Royal Bank of Canada, Term Deposit, 0.97%, 1/2/2013 .......................................... 1,035,000 CAD 1,035 1,035
Total Short-Term Securities: ................................................................. 1,035 1,035
Transaction costs (Note 2) ................................................................... (38) —
TOTAL INVESTMENTS: 99.55% .............................................................. $79,985 80,370
OTHER ASSETS, less liabilities: 0.45% ........................................................ 367
TOTAL NET ASSETS: 100.00% .............................................................. $80,737
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 163

Bissett Strategic Income Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................ 2.89 —
AA.................................. 4.98 —
A................................... 5.74 —
BBB ................................ 1.70 —
BB ................................. 0.02 —
B................................... 0.01 —
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
The accompanying notes are an integral part of these financial statements.
164 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 80,370 $ 2,017
Canadian
Receivables
2 7
Capital units sold 180 —
Dividends and interest 387 6
Other assets (Note 8) 26 —
Total assets
Liabilities
Payables
80,965 2,030
Investment securities purchased 41 —
Capital units redeemed 1 —
Management fees 129 —
Accrued expenses 57 —
Total liabilities 228 —
Net assets $ 80,737 $ 2,030
Total net assets per series (000s)
Series A $76,640 $2,015
Series F 2,324 5
Series I 904 5
Series O 869 5
Number of units outstanding (Note 3)
Series A 7,202,478 198,500
Series F 215,915 500
Series I 84,564 500
Series O 79,849 500
Net assets per unit — CAD
Series A $10.64 $10.15
Series F 10.76 10.15
Series I 10.70 10.15
Series O 10.89 10.15
Net assets per unit — USD
Series A $10.71 $9.96
Series F 10.83 9.96
Series I 10.77 9.96
Series O 10.96 9.96
Cost of investments held (000s) $79,985 $1,992
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett Strategic Income Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 2,285 $ 6
Interest 198 —
Total investment income
Expenses
2,483 6
Management fees (Note 4(a)) 795 —
Transfer agent fees (Note 4(c)) 132 —
Custodian fees 6 —
Legal fees 2 —
Audit fees 20 —
Unitholder reporting costs 11 —
Independent review committee fees 1 —
Registration fees 13 —
Other expenses (Note 7) 47 —
Total expenses 1,027 —
Expenses waived/paid by Manager (Note 6) (136) —
Net expenses 891 —
Net investment income (loss) 1,592 6
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
245 —
gain (loss)
Net change in unrealized appreciation (depreciation)
6 —
in value of investments 360 25
Transaction costs (Note 11) (52) (1)
Net gain (loss) on investments 559 24
Increase (decrease) in net assets from operations $ 2,151 $ 30
Increase (decrease) in net assets from operations
per series (000s)
Series A $2,048 $30
Series F 85 —*
Series I (22) —*
Series O
Increase (decrease) in net assets from operations
per unit
40 —*
Series A $0.57 $0.15
Series F 0.67 0.15
Series I (0.32) 0.15
Series O
* Amount rounded to zero in the nearest thousand.
1.01 0.15
Franklin Templeton Investments Funds 165

Bissett Strategic Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 2,151 $ 30 $ 2,048 $ 30 $ 85 $ —*
Distributions to unitholders
From net investment income (1,250) — (1,172) — (42) —
From capital gains (186) — (177) — (5) —
From return of capital (114) — (109) — (3) —
Capital unit transactions
(1,550) — (1,458) — (50) —
Subscriptions 81,848 2,000 76,230 1,985 2,433 5
Reinvestments 1,300 — 1,214 — 44 —
Redemptions (5,042) — (3,409) — (193) —
78,106 2,000 74,035 1,985 2,284 5
Increase (decrease) in net assets for the period 78,707 2,030 74,625 2,015 2,319 5
Net assets — beginning of period 2,030 — 2,015 — 5 —
Net assets — end of period $ 80,737 $ 2,030 $ 76,640 $ 2,015 $ 2,324 $ 5
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ (22) $ —* $ 40 $ —*
Distributions to unitholders
From net investment income (22) — (14) —
From capital gains (2) — (2) —
From return of capital (1) — (1) —
Capital unit transactions
(25) — (17) —
Subscriptions 2,357 5 828 5
Reinvestments 25 — 17 —
Redemptions (1,436) — (4) —
946 5 841 5
Increase (decrease) in net assets for the period 899 5 864 5
Net assets — beginning of period 5 — 5 —
Net assets — end of period $ 904 $ 5 $ 869 $ 5
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
166 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Bissett U.S. Focus Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
COMMON STOCKS: 98.17%
Health Care: 21.17%
Abbott Laboratories ..................... 61,400 $ 3,301 $ 3,995
Amgen Inc. . . ........................ 53,500 3,450 4,589
Cigna Corp. . . ........................ 69,300 3,675 3,678
Eli Lilly & Co. . ........................ 84,100 3,760 4,120
Johnson & Johnson ..................... 49,500 3,206 3,446
Merck & Co. Inc. . ...................... 89,100 3,223 3,624
Pfizer Inc. . . . ........................ 163,300 3,143 4,069
Watson Pharmaceuticals Inc. .............. 46,500 3,543 3,972
27,301 31,493
Financials: 15.29%
ACE Ltd. ............................. 44,500 3,283 3,527
Discover Financial Services ............... 92,100 3,560 3,527
M&T Bank Corp. . ...................... 35,600 3,672 3,481
The Allstate Corp. ...................... 106,000 3,418 4,229
The Travelers Companies Inc. . . . . . ........ 53,500 3,499 3,816
Torchmark Corp. . ...................... 81,200 3,287 4,165
20,719 22,745
Information Technology: 14.85%
Apple Inc. . . . ........................ 5,450 2,312 2,885
Hewlett–Packard Co. .................... 277,200 5,836 3,921
International Business Machines Corp. . ...... 19,800 3,237 3,767
Microsoft Corp. ........................ 124,700 3,257 3,310
Visa Inc., A . . . ........................ 28,700 3,739 4,318
Western Digital Corp. .................... 92,000 3,593 3,883
21,974 22,084
Consumer Staples: 14.41%
CVS Caremark Corp. .................... 77,200 3,321 3,709
Kimberly–Clark Corp. .................... 48,500 3,358 4,066
PepsiCo Inc. . . ........................ 45,500 3,024 3,093
Reynolds American Inc. .................. 83,100 2,957 3,419
The Kroger Co. ........................ 149,500 3,440 3,863
Wal–Mart Stores Inc. .................... 48,500 2,800 3,288
18,900 21,438
Industrials: 8.94%
General Dynamics Corp. ................. 49,500 3,182 3,406
L–3 Communications Holdings Inc. . ........ 39,600 2,870 3,012
Northrop Grumman Corp. ................ 55,400 3,362 3,719
Raytheon Co. . ........................ 55,400 2,696 3,167
12,110 13,304
Energy: 7.98%
Chevron Corp. ........................ 34,600 3,308 3,719
Exxon Mobil Corp. ...................... 38,600 3,104 3,320
Valero Energy Corp. ..................... 142,500 3,555 4,827
9,967 11,866
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Consumer Discretionary: 6.48%
Darden Restaurants Inc. .................. 66,300 $ 3,416 $ 2,968
McDonald’s Corp. ....................... 37,600 3,239 3,295
Target Corp. . .......................... 57,400 3,638 3,373
10,293 9,636
Utilities: 4.52%
NextEra Energy Inc. ..................... 52,500 3,064 3,607
PG&E Corp. . .......................... 78,200 3,390 3,121
6,454 6,728
Materials: 2.35%
CF Industries Holdings Inc. ................ 17,300 2,653 3,490
Telecommunication Services: 2.18%
AT&T Inc. ............................. 97,000 3,576 3,249
Total Common Stocks: .................... 133,947 146,033
Transaction costs (Note 2) ................... (66) —
TOTAL INVESTMENTS: 98.17% .............. $133,881 146,033
OTHER ASSETS, less liabilities: 1.83% ........ 2,722
TOTAL NET ASSETS: 100.00% .............. $148,755
Franklin Templeton Investments Funds 167

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 146,033 $ 159,131
Canadian — 43
Foreign
Receivables
2,501 2,224
Capital units sold — 190
Dividends 221 410
Total assets
Liabilities
Payables
148,755 161,998
Capital units redeemed — 204
Distributions to unitholders — 2,554
Total liabilities — 2,758
Net assets $ 148,755 $ 159,240
Total net assets per series (000s)
Series O $148,755 $159,240
Number of units outstanding (Note 3)
Series O 15,658,274 17,541,041
Net assets per unit — CAD
Series O $9.50 $9.08
Net assets per unit — USD
Series O $9.56 $8.91
Cost of investments held (000s) $133,881 $147,177
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Bissett U.S. Focus Fund
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $526; 2011 — $610) $ 2,961 $ 2,995
Interest 1 2
Total investment income
Expenses
2,962 2,997
Management fees (Note 4(a)) — —
Transfer agent fees (Note 4(c)) — —
Custodian fees — —
Legal fees 1 —
Audit fees 18 17
Unitholder reporting costs 5 3
Independent review committee fees 1 1
Registration fees 14 3
Other expenses (Note 7) 14 4
Total expenses 53 28
Expenses waived/paid by Manager (Note 6) (53) (28)
Net expenses — —
Net investment income (loss) 2,962 2,997
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
6,919 2,542
gain (loss)
Net change in unrealized appreciation
(857) (127)
(depreciation) in value of investments 198 7,516
Transaction costs (Note 11) (105) (203)
Net gain (loss) on investments 6,155 9,728
Increase (decrease) in net assets from operations $ 9,117 $ 12,725
Increase (decrease) in net assets from operations
per series (000s)
Series O $9,117 $12,725
Increase (decrease) in net assets from operations
per unit
Series O $0.59 $0.80
The accompanying notes are an integral part of these financial statements.
168 Franklin Templeton Investments Funds

Bissett U.S. Focus Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
Series O
2012 2011
Increase (decrease) in net assets from operations $ 9,117 $ 12,725
Distributions to unitholders
From net investment income (2,984) (2,554)
From capital gains — —
From return of capital — —
Capital unit transactions
(2,984) (2,554)
Subscriptions 47,803 171,609
Reinvestments 5,538 1,107
Redemptions (69,959) (74,550)
(16,618) 98,166
Increase (decrease) in net assets for the period (10,485) 108,337
Net assets — beginning of period 159,240 50,903
Net assets — end of period $ 148,755 $ 159,240
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 169

STATEMENT OF INVESTMENTS As at December 31, 2012
Mutual Beacon Fund
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 93.10%
COMMON STOCKS: 84.18%
United States: 55.94%
ACE Ltd. . . . ........................
Adelphia Recovery Trust, ACC-1, Contingent
26,294 $ 1,444 $ 2,084
Distribution . ......................
Adelphia Recovery Trust, Arahova, Contingent
4,363,220 297 4
Distribution . ...................... 273,503 111 8
Altria Group Inc. ..................... 40,322 774 1,259
American International Group Inc. ......... 65,676 2,016 2,303
Apache Corp. . ...................... 36,352 3,623 2,834
Avon Products Inc. ................... 120,398 1,887 1,718
CB FIM Coinvestors LLC ................ 1,743,420 — —
CBS Corp., B ........................
Century Communications Corp., Contingent
45,154 1,484 1,707
Distribution . ......................
Century Communications Corp., Contingent
34,000 — —
Distribution . ......................
Century Communications Corp., Contingent
19,000 — —
Distribution . ......................
Century Communications Corp., Contingent
154,000 — —
Distribution . ......................
Century Communications Corp., Contingent
10,000 — —
Distribution . ......................
Century Communications Corp., Contingent
240,000 — —
Distribution . ...................... 310,000 — —
Cigna Corp. . ........................ 56,625 2,610 3,006
Cisco Systems Inc. .................... 100,958 1,846 1,970
Comcast Corp., Special A . . . ............ 36,402 871 1,300
Comdisco Holding Co. Inc. . . ............ 52 — —
CONSOL Energy Inc. .................. 84,980 2,819 2,709
CVS Caremark Corp. .................. 39,534 1,452 1,899
Eli Lilly & Co. ........................ 12,550 451 615
FIM Coinvestor Holdings I, LLC . ..........
Global Crossing Holdings Ltd., Contingent
2,180,996 — —
Distribution . ......................
Global Crossing Holdings Ltd., Contingent
779,871 — —
Distribution . ......................
Global Crossing Holdings Ltd., Contingent
112,000 — —
Distribution . ......................
Global Crossing Holdings Ltd., Contingent
70,000 — —
Distribution . ......................
Global Crossing Holdings Ltd., Contingent
135,000 — —
Distribution . ......................
Global Crossing Holdings Ltd., Contingent
25,000 — —
Distribution . ...................... 20,000 — —
Google Inc., A . ...................... 2,588 1,431 1,823
Hospira Inc. ........................ 68,744 2,116 2,132
International Automotive Components Group
North America, LLC ................. 1,712,964 2,209 870
JPMorgan Chase & Co. ................. 49,910 1,728 2,181
Average
Cost
Fair
Value
Shares
(000s) (000s)
United States: 55.94% (Continued)
Lorillard Inc. ........................ 24,603 $ 2,188 $ 2,851
Marathon Oil Corp. .................... 63,453 1,656 1,932
Medtronic Inc. ....................... 102,228 3,560 4,165
Merck & Co. Inc. ..................... 100,650 3,382 4,094
Microsoft Corp. ...................... 176,619 4,912 4,687
Mondelez International Inc., A . . ......... 54,371 1,087 1,376
Morgan Stanley ...................... 145,543 3,460 2,764
News Corp., B ....................... 184,714 3,638 4,814
NYSE Euronext ...................... 56,470 1,709 1,768
Olympus Re Holdings Ltd. .............. 1,880 278 —
ON Semiconductor Corp. ............... 237,786 1,503 1,665
Pfizer Inc. .......................... 42,915 750 1,069
Plains Exploration & Production Co. ........ 45,720 2,060 2,132
Raytheon Co. ........................ 17,531 732 1,002
Realogy Holdings Corp. ................ 23,718 449 939
RenaissanceRe Holdings Ltd. ............ 27,306 1,832 2,204
Rowan Companies PLC ................ 50,520 1,670 1,569
SanDisk Corp. ....................... 34,496 1,240 1,492
Stryker Corp. ........................ 14,490 769 789
Symantec Corp. ...................... 76,080 1,227 1,422
The Bankshares Inc. .................. 449,097 5,199 1,844
The Blackstone Group LP ............... 193,508 2,432 2,996
Time Warner Cable Inc. ................ 65,042 4,718 6,281
Transocean Ltd. ...................... 81,312 5,608 3,606
TRW Automotive Holdings Corp. . ......... 41,490 1,730 2,209
Walgreen Co. ........................ 47,733 1,437 1,756
Wells Fargo & Co. .................... 109,792 3,123 3,731
White Mountains Insurance Group Ltd. ..... 7,458 3,938 3,815
WPX Energy Inc. ..................... 236,748 3,865 3,499
Xerox Corp. ......................... 485,398 4,379 3,288
103,700 106,181
United Kingdom: 12.96%
BPPLC............................ 164,232 1,126 1,135
British American Tobacco PLC . . ......... 93,823 2,265 4,738
British Sky Broadcasting Group PLC ....... 134,097 1,514 1,679
Canary Wharf Group PLC ............... 953,128 4,790 3,590
Coca–Cola Enterprises Inc. .............. 71,130 1,762 2,242
Imperial Tobacco Group PLC ............ 70,670 2,069 2,721
Marconi Corp., Contingent Distribution ...... 247,000 — 4
Marconi Corp., Contingent Distribution ...... 15,000 — —
Marconi Corp., Contingent Distribution ...... 140,000 — 2
Marconi Corp., Contingent Distribution ...... 547,500 — 10
Marconi Corp., Contingent Distribution ...... 147,700 — 4
Marconi Corp., Contingent Distribution ...... 212,000 — 4
Reed Elsevier PLC .................... 181,860 1,518 1,906
RSA Insurance Group PLC .............. 1,355,640 2,383 2,781
Vodafone Group PLC .................. 1,512,275 3,637 3,782
21,064 24,598
The accompanying notes are an integral part of these financial statements.
170 Franklin Templeton Investments Funds

Mutual Beacon Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Canada: 3.65%
Nexen Inc. . . . ........................ 98,860 $ 2,559 $ 2,644
Open Text Corp. . ...................... 62,897 3,084 3,490
Research In Motion Ltd. ................. 67,050 780 791
6,423 6,925
Israel: 1.78%
Check Point Software Technologies Ltd. ...... 54,424 2,346 2,575
Teva Pharmaceutical Industries Ltd., American
Depositary Receipt ................... 21,930 865 814
3,211 3,389
Switzerland: 1.61%
Novartis AG, American Depositary Receipt .... 30,620 1,644 1,925
Swatch Group AG ...................... 2,250 882 1,123
2,526 3,048
France: 1.50%
GDF Suez ............................ 50,859 1,351 1,040
Pernod Ricard SA ...................... 15,628 1,310 1,801
2,661 2,841
Norway: 1.21%
Telenor ASA . . ........................ 113,200 1,760 2,289
Germany: 1.20%
ThyssenKrupp AG ...................... 97,293 3,023 2,281
Belgium: 1.12%
Ageas .............................. 72,178 1,697 2,118
Average
Cost
Fair
Value
Shares
(000s) (000s)
Denmark: 0.90%
A.P. Moller – Maersk AS, B ............... 228 $ 2,074 $ 1,706
Netherlands: 0.82%
ING Groep NV ........................ 165,970 1,149 1,565
Australia: 0.62%
AET&D Holdings No. 1 Pty. Ltd. ............ 493,842 — —
Boart Longyear Ltd. ..................... 591,721 1,391 1,175
1,391 1,175
India: 0.35%
Polaris Financial Technology Ltd. ........... 320,185 1,097 662
South Korea: 0.33%
Korea Exchange Bank ................... 89,170 806 633
Japan: 0.17%
Elephant Capital Holdings Ltd. ............. 1,311 174 —
NCB Warrant Holdings Ltd., A ............. 6,102 540 —
Nintendo Co. Ltd. ...................... 3,100 743 328
1,457 328
Brazil: 0.02%
International Automotive Components Group
Brazil LLC ......................... 250,482 192 39
Total Common Stocks: ................... 154,231 159,778
PREFERRED STOCKS: 1.18%
Porsche Automobil Holding SE, Preferred ..... 27,354 1,738 2,236
Total Preferred Stocks: ................... 1,738 2,236
Principal Amount
in Currency
of Issue
BONDS: 7.74%
United States: 7.52%
American Airlines Inc.
First Lien, 13.00%, 8/1/2016 ................................................................. 16,383 USD 17 17
Senior Secured Note, 7.50%, 3/15/2016 ........................................................ 2,726,000 USD 2,451 2,917
American Airlines Pass Through Trust
2009–1A, 10.375%, 7/2/2019 ................................................................ 40,318 USD 41 42
2011–2, A, 8.625%, 4/15/2023 ............................................................... 167,343 USD 174 173
Broadband Ventures III LLC, Secured Promissory Note, 5.00%, 2/20/2049 ............................... 397USD — —
Clear Channel Communications Inc.
9.00%, 12/15/2019 ........................................................................ 1,145,000 USD 997 1,040
Senior Note, Payment–In–Kind, 11.00%, 8/1/2016 ................................................ 575,000 USD 523 433
Tranche B Term Loan, Floating Rate Note, 1/29/2016 ............................................. 1,418,661 USD 1,211 1,171
Tranche C Term Loan, Floating Rate Note, 1/29/2016 ............................................. 284,257 USD 235 227
Energy Future Intermediate Holding Co. LLC/EFIH Finance Inc., Second Lien, 11.00%, 10/1/2021 ............ 303,000 USD 306 325
Texas Competitive Electric Holdings Co. LLC, Extended Term Loan, Floating Rate Note, 10/10/2017 ........... 2,520,354 USD 1,972 1,686
Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc.
Senior Note, A, 10.25%, 11/1/2015 .............................................................. 457,000 USD 134 132
Senior Secured Note, 11.50%, 10/1/2020 ....................................................... 2,377,000 USD 2,012 1,847
The Great Atlantic & Pacific Tea Co. Inc., Senior secured, First Lien Exit Term Loan, Floating Rate
Note, 3/13/2017 ........................................................................... 1,222,760 USD 1,167 1,154
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 171

Mutual Beacon Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
United States: 7.52% (Continued)
Tribune Co.
Incremental Term Loan, Floating Rate Note, 6/4/2014 ........................................... 183,000 USD $ 116 $ 150
Initial Tranche B Term Loan, Floating Rate Note, 6/4/2014 ........................................ 3,571,000 USD 2,247 2,959
Average
Cost
Fair
Value
13,603 14,273
Italy: 0.22%
Wind Acquisition Finance SA .................................................................
Senior Note, 11.75%, 7/15/2017 ............................................................ 133,000 EUR 138 183
Senior Note, 11.75%, 7/15/2017 ............................................................ 100,000 USD 85 104
Senior Secured Note, 7.375%, 2/15/2018 ..................................................... 100,000 EUR 108 132
331 419
Total Bonds: ............................................................................... 13,934 14,692
Total Long-Term Investments: ................................................................. 169,903 176,706
SHORT-TERM SECURITIES: 2.78%
Federal Home Loan Bank Discount Notes, 1/2/2013 .............................................. 5,300,000 USD 5,274 5,274
Total Short-Term Securities: .................................................................. 5,274 5,274
Transaction costs (Note 2) ..................................................................... (222) —
TOTAL INVESTMENTS: 95.88% ............................................................... $174,955 181,980
NET UNREALIZED LOSS ON DERIVATIVES: (1.66%) .............................................. (3,144)
OTHER ASSETS, less liabilities: 5.78% ......................................................... 10,973
TOTAL NET ASSETS: 100.00% ................................................................ $189,809
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 63 CAD $ 64 50 EUR $ 66 $0.7892 $ 2
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 76 CAD 77 60 EUR 79 0.7857 2
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 97 CAD 97 75 EUR 99 0.7760 2
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 136 CAD 137 107 EUR 142 0.7861 5
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 139 CAD 139 109 EUR 144 0.7856 5
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 192 CAD 192 150 EUR 197 0.7802 5
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 246 CAD 246 189 EUR 249 0.7691 3
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 1,392 CAD 1,392 872 GBP 1,410 0.6265 18
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 2,993 JPY 34 37 CAD 37 0.0124 3
CREDIT SUISSE INTERNATIONAL ........... A+ March 21, 2013 5,342 CAD 5,342 3,348 GBP 5,412 0.6268 70
DEUTSCHE BANK AG ..................... A+ March 21, 2013 10 CAD 11 10 AUD 11 1.0052 —
DEUTSCHE BANK AG ..................... A+ March 21, 2013 15 CAD 15 15 AUD 15 0.9730 —
DEUTSCHE BANK AG ..................... A+ March 21, 2013 21 CAD 21 21 AUD 21 0.9746 —
DEUTSCHE BANK AG ..................... A+ March 21, 2013 29 AUD 30 30 CAD 30 1.0320 —
DEUTSCHE BANK AG ..................... A+ March 21, 2013 30 AUD 30 30 CAD 30 1.0294 —
DEUTSCHE BANK AG ..................... A+ March 21, 2013 37 AUD 38 38 CAD 38 1.0291 —
DEUTSCHE BANK AG ..................... A+ March 21, 2013 44 CHF 48 37 EUR 48 0.8294 —
DEUTSCHE BANK AG ..................... A+ March 21, 2013 56 AUD 58 58 CAD 58 1.0305 —
The accompanying notes are an integral part of these financial statements.
172 Franklin Templeton Investments Funds

Mutual Beacon Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG .................... A+ March 21, 2013 84 CAD $ 85 53 GBP $ 86 $ 0.6275 $ 1
DEUTSCHE BANK AG .................... A+ March 21, 2013 221 CAD 221 174 EUR 228 0.7863 7
DEUTSCHE BANK AG .................... A+ March 21, 2013 426 CAD 426 329 EUR 432 0.7720 6
DEUTSCHE BANK AG .................... A+ March 21, 2013 914 JPY 11 11 CAD 11 0.0116 —
DEUTSCHE BANK AG .................... A+ March 21, 2013 2,255 JPY 26 28 CAD 28 0.0126 2
DEUTSCHE BANK AG .................... A+ March 21, 2013 36,244 JPY 416 456 CAD 456 0.0126 40
HSBC BANK PLC ....................... AA- March 21, 2013 31 CAD 31 24 EUR 32 0.7857 1
HSBC BANK PLC ....................... AA- March 21, 2013 306 CAD 306 240 EUR 316 0.7854 10
HSBC BANK PLC ....................... AA- March 21, 2013 419 CAD 419 330 EUR 433 0.7867 14
HSBC BANK PLC ....................... AA- March 21, 2013 838 CAD 838 655 EUR 861 0.7817 23
HSBC BANK PLC ....................... AA- March 21, 2013 3,854 JPY 44 48 CAD 48 0.0125 4
STATE STREET BANK AND TRUST COMPANY .. AA- March 21, 2013 5,043 JPY 58 63 CAD 64 0.0126 6
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 9 EUR 12 11 CHF 12 1.2087 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 22 EUR 28 26 CHF 28 1.2092 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 50 EUR 66 371 NOK 66 7.4101 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 76 CAD 77 60 EUR 79 0.7857 2
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 114 CAD 114 89 EUR 118 0.7870 4
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 152 CAD 152 95 GBP 154 0.6257 2
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 154 CAD 154 120 EUR 158 0.7827 4
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 160 CAD 160 124 EUR 163 0.7768 3
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 197 CAD 197 153 EUR 202 0.7789 5
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 339 CAD 339 262 EUR 344 0.7730 5
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 362 EUR 476 2,684 NOK 479 7.4121 3
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 471 CAD 471 294 GBP 475 0.6235 4
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 1,014 CAD 1,014 794 EUR 1,044 0.7833 30
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 1,029 CAD 1,029 797 EUR 1,048 0.7753 19
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 2,888 CAD 2,888 2,226 EUR 2,925 0.7707 37
Total Number of Contracts ...........45 $ 347
CREDIT SUISSE INTERNATIONAL ......... A+ March 20, 2013 87 CAD 87 87 USD 87 1.0004 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 20, 2013 537 CAD 537 539 USD 536 1.0033 (1)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 3 EUR 4 4 CHF 4 1.2045 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 8 CAD 8 682 JPY 8 83.2215 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 16 CAD 16 1,312 JPY 15 82.9907 (1)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 17 CAD 17 1,435 JPY 16 82.3671 (1)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 78 EUR 102 100 CAD 100 1.2840 (2)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 150 EUR 197 193 CAD 193 1.2867 (4)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 150 EUR 198 194 CAD 194 1.2905 (4)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 198 GBP 320 318 CAD 317 1.6041 (3)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 340 EUR 447 439 CAD 440 1.2925 (7)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 559 CAD 559 346 GBP 559 0.6184 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 2,000 GBP 3,233 3,159 CAD 3,159 1.5795 (74)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 14,463 GBP 23,378 22,992 CAD 22,992 1.5897 (386)
DEUTSCHE BANK AG .................... A+ March 20, 2013 368 CAD 368 369 USD 367 1.0017 (1)
DEUTSCHE BANK AG .................... A+ March 20, 2013 13,849 CAD 13,850 13,900 USD 13,830 1.0037 (20)
DEUTSCHE BANK AG .................... A+ March 20, 2013 13,938 CAD 13,938 14,000 USD 13,929 1.0044 (9)
DEUTSCHE BANK AG .................... A+ March 20, 2013 73,464 USD 73,093 71,939 CAD 71,939 0.9792 (1,154)
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 173

Mutual Beacon Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
Counterparty
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG .................... A+ March 21, 2013 4 CAD $ 4 341 JPY $ 4 $85.8293 $ —
DEUTSCHE BANK AG .................... A+ March 21, 2013 10 CAD 10 822 JPY 9 83.1730 (1)
DEUTSCHE BANK AG .................... A+ March 21, 2013 19 AUD 20 19 CAD 20 1.0131 —
DEUTSCHE BANK AG .................... A+ March 21, 2013 22 AUD 23 22 CAD 22 0.9880 (1)
DEUTSCHE BANK AG .................... A+ March 21, 2013 23 CAD 23 1,845 JPY 21 79.0184 (2)
DEUTSCHE BANK AG .................... A+ March 21, 2013 29 AUD 30 29 CAD 30 1.0253 —
DEUTSCHE BANK AG .................... A+ March 21, 2013 31 CAD 31 30 AUD 31 0.9668 —
DEUTSCHE BANK AG .................... A+ March 21, 2013 31 CAD 31 30 AUD 31 0.9681 —
DEUTSCHE BANK AG .................... A+ March 21, 2013 37 CAD 37 36 AUD 37 0.9722 —
DEUTSCHE BANK AG .................... A+ March 21, 2013 120 AUD 123 119 CAD 119 0.9920 (4)
DEUTSCHE BANK AG .................... A+ March 21, 2013 338 AUD 347 341 CAD 341 1.0092 (6)
DEUTSCHE BANK AG .................... A+ March 21, 2013 1,750 GBP 2,829 2,761 CAD 2,761 1.5774 (68)
HSBC BANK PLC ....................... AA- March 20, 2013 71,475 USD 71,113 70,025 CAD 70,026 0.9797 (1,087)
HSBC BANK PLC ....................... AA- March 21, 2013 47 CAD 47 3,731 JPY 43 79.5794 (4)
HSBC BANK PLC ....................... AA- March 21, 2013 127 CAD 127 10,440 JPY 120 82.4801 (7)
HSBC BANK PLC ....................... AA- March 21, 2013 180 CAD 180 14,925 JPY 171 82.8646 (9)
HSBC BANK PLC ....................... AA- March 21, 2013 15,904 EUR 20,896 20,348 CAD 20,348 1.2795 (548)
STATE STREET BANK AND TRUST COMPANY .. AA- March 21, 2013 20 CAD 20 1,558 JPY 18 79.3683 (2)
SVENSKA HANDELSBANKEN ............. AA- March 20, 2013 1,246 CAD 1,246 1,249 USD 1,243 1.0025 (3)
SVENSKA HANDELSBANKEN ............. AA- March 20, 2013 1,587 CAD 1,587 1,594 USD 1,586 1.0047 (1)
SVENSKA HANDELSBANKEN ............. AA- March 20, 2013 4,112 CAD 4,112 4,089 USD 4,068 0.9944 (44)
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 19 CHF 20 16 EUR 20 0.8276 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 37 EUR 48 44 CHF 48 1.2038 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 98 EUR 129 118 CHF 129 1.2043 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 182 EUR 240 234 CAD 234 1.2820 (6)
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 359 NOK 64 48 EUR 63 0.1334 (1)
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 644 CHF 701 533 EUR 700 0.8271 (1)
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 740 NOK 132 100 EUR 132 0.1356 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 8,476 NOK 1,513 1,129 EUR 1,484 0.1332 (29)
Total Number of Contracts ...........47 $(3,491)
Net Unrealized Loss .................... $(3,144)
The accompanying notes are an integral part of these financial statements.
174 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 181,980 $ 258,467
Canadian 2,427 7,464
Foreign
Receivables
5,576 16,046
Investment securities sold 2,659 366
Capital units sold 8 248
Dividends, interest and withholding tax 706 1,188
Unrealized gain on derivatives 347 3,413
Other assets (Note 8) 5 57
Total assets
Liabilities
Payables
193,708 287,249
Investment securities purchased 58 1,730
Capital units redeemed 130 527
Management fees 109 131
Accrued expenses 110 159
Unrealized loss on derivatives 3,491 20
Other liabilities (Note 9) 1 —
Total liabilities 3,899 2,567
Net assets $ 189,809 $ 284,682
Total net assets per series (000s)
Series A $56,207 $61,392
Series F 4,107 4,976
Series I 134 117
Series O 129,128 217,985
Series T 233 212
Number of units outstanding (Note 3)
Series A 12,746,205 15,588,691
Series F 813,920 1,116,434
Series I 27,634 27,198
Series O 21,241,929 41,250,630
Series T 45,190 42,809
Net assets per unit — CAD
Series A $4.41 $3.94
Series F 5.05 4.46
Series I 4.87 4.31
Series O 6.08 5.28
Series T 5.15 4.97
Net assets per unit — USD
Series A $4.44 $3.87
Series F 5.08 4.38
Series I 4.90 4.23
Series O 6.12 5.18
Cost of investments held (000s) $174,955 $269,439
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Mutual Beacon Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $543; 2011 — $870) $ 4,872 $ 7,783
Interest 1,186 1,231
Total investment income
Expenses
6,058 9,014
Management fees (Note 4(a)) 1,368 1,694
Transfer agent fees (Note 4(c)) 604 770
Custodian fees 9 12
Legal fees 3 17
Audit fees 28 22
Unitholder reporting costs 6 13
Independent review committee fees 1 1
Registration fees 22 20
Other expenses (Note 7) 134 137
Total expenses 2,175 2,686
Expenses waived/paid by Manager (Note 6) (474) (579)
Net expenses 1,701 2,107
Net investment income (loss) 4,357 6,907
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
10,526 (26,551)
gain (loss)
Net change in unrealized appreciation
(depreciation) in value of investments and
12,316 4,972
derivatives 11,460 10,186
Transaction costs (Note 11) (228) (355)
Net gain (loss) on investments 34,074 (11,748)
Increase (decrease) in net assets from operations $ 38,431 $ (4,841)
Increase (decrease) in net assets from operations
per series (000s)
Series A $8,039 $(1,928)
Series F 639 (44)
Series I 18 (3)
Series O 29,705 (2,860)
Series T 30 (6)
Increase (decrease) in net assets from operations
per unit
Series A $0.58 $(0.10)
Series F 0.70 (0.04)
Series I 0.67 (0.09)
Series O 0.91 (0.06)
Series T 0.68 (0.13)
Franklin Templeton Investments Funds 175

Mutual Beacon Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 38,431 $ (4,841) $ 8,039 $ (1,928) $ 639 $ (44)
Distributions to unitholders
From net investment income (3,927) (8,318) (1,165) (1,800) (85) (145)
From capital gains — — — — — —
From return of capital (17) (21) — — — —
(3,944) (8,339) (1,165) (1,800) (85) (145)
Capital unit transactions
Subscriptions 43,406 104,661 3,521 3,295 418 577
Reinvestments 3,908 8,286 1,142 1,766 81 138
Redemptions (176,674) (149,432) (16,722) (28,956) (1,922) (2,820)
(129,360) (36,485) (12,059) (23,895) (1,423) (2,105)
Increase (decrease) in net assets for the period (94,873) (49,665) (5,185) (27,623) (869) (2,294)
Net assets — beginning of period 284,682 334,347 61,392 89,015 4,976 7,270
Net assets — end of period $ 189,809 $ 284,682 $ 56,207 $ 61,392 $ 4,107 $ 4,976
Series I Series O Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 18 $ (3) $ 29,705 $ (2,860) $ 30 $ (6)
Distributions to unitholders
From net investment income (3) (3) (2,669) (6,364) (5) (6)
From capital gains — — — — — —
From return of capital — — — — (17) (21)
(3) (3) (2,669) (6,364) (22) (27)
Capital unit transactions
Subscriptions 5 — 39,462 100,776 — 13
Reinvestments 2 2 2,670 6,364 13 16
Redemptions (5) — (158,025) (117,586) — (70)
2 2 (115,893) (10,446) 13 (41)
Increase (decrease) in net assets for the period 17 (4) (88,857) (19,670) 21 (74)
Net assets — beginning of period 117 121 217,985 237,655 212 286
Net assets — end of period $ 134 $ 117 $ 129,128 $ 217,985 $ 233 $ 212
The accompanying notes are an integral part of these financial statements.
176 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 97.62%
COMMON STOCKS: 90.26%
United States: 45.34%
ACE Ltd. ..........................
Adelphia Recovery Trust, Arahova,
243,760 $ 12,740 $ 19,318
Contingent Distribution . .............
Adelphia Recovery Trust, ACC-1, Contingent
41,197 17 1
Distribution ...................... 496,717 35 —
Alleghany Corp. .................... 2,084 758 694
Altria Group Inc. .................... 166,768 3,299 5,206
American International Group Inc. ....... 462,192 13,394 16,205
Apache Corp. ...................... 136,350 12,613 10,629
Avon Products Inc. .................. 354,210 5,493 5,056
Baker Hughes Inc. .................. 207,448 8,967 8,417
Boston Scientific Corp. . . ............. 804,581 5,277 4,571
CBS Corp., B .......................
Century Communications Corp.,
264,560 8,649 9,999
Contingent Distribution . .............
Century Communications Corp.,
48,000 — —
Contingent Distribution . .............
Century Communications Corp.,
29,000 — —
Contingent Distribution . .............
Century Communications Corp.,
33,000 — —
Contingent Distribution . ............. 3,000 — —
Cigna Corp. ....................... 228,755 10,365 12,142
Cisco Systems Inc. .................. 430,570 8,562 8,404
CIT Group Inc. ..................... 132,116 5,273 5,068
Citigroup Inc. ...................... 318,781 8,607 12,532
Comcast Corp., Special A . ............. 59,591 1,513 2,128
CONSOL Energy Inc. ................. 311,500 10,275 9,932
CVS Caremark Corp. ................. 276,589 9,194 13,288
Dr. Pepper Snapple Group Inc. ......... 76,476 1,849 3,355
Ensco PLC, A ...................... 71,746 3,724 4,222
Exelon Corp. ....................... 270,350 13,610 7,983
FIM Coinvestor Holdings I, LLC .......... 941,517 — —
General Motors Co. .................. 232,750 6,854 6,663
Google Inc., A ...................... 11,025 5,577 7,767
Hewlett–Packard Co. ................. 404,830 7,701 5,726
Hospira Inc. ....................... 118,623 3,594 3,678
International Automotive Components Group
North America, LLC . . . ............. 889,386 1,117 452
JPMorgan Chase & Co. . . ............. 147,430 5,189 6,442
Kohl’s Corp. ....................... 125,520 6,203 5,358
Kraft Foods Group Inc. . . ............. 66,791 2,237 2,853
Lorillard Inc. ....................... 85,805 6,297 9,942
Marathon Oil Corp. .................. 353,004 9,120 10,747
Medtronic Inc. ..................... 307,810 10,742 12,541
Merck & Co. Inc. ................... 244,900 8,135 9,961
MetLife Inc. ....................... 234,900 9,650 7,683
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
United States: 45.34% (Continued)
Microsoft Corp. ..................... 497,480 $ 14,362 $ 13,203
Mondelez International Inc., A . . ........ 351,627 7,015 8,899
Morgan Stanley ..................... 473,970 14,284 9,001
Murphy Oil Corp. ................... 113,410 7,553 6,707
NewPage Holdings Inc. ............... 33,116 3,151 3,151
News Corp., B ...................... 243,700 4,845 6,352
NRG Energy Inc. ................... 380,043 8,353 8,674
NYSE Euronext ..................... 151,865 5,673 4,756
Pfizer Inc. ........................ 224,540 3,871 5,596
Philip Morris International Inc. . . ........ 78,730 3,507 6,541
PNC Financial Services Group Inc. ....... 171,390 9,359 9,926
Raytheon Co. ...................... 82,814 3,445 4,735
Realogy Holdings Corp. ............... 58,098 1,099 2,300
Stanley Black & Decker Inc. . . . ........ 46,191 2,471 3,394
Stryker Corp. ...................... 56,667 3,012 3,085
Symantec Corp. .................... 384,130 6,167 7,181
The Bankshares Inc. ................. 300,000 3,473 1,232
Time Warner Cable Inc. ............... 96,243 5,781 9,294
Transocean Ltd. .................... 105,555 9,860 4,681
Walgreen Co. ...................... 228,500 7,188 8,404
WellPoint Inc. ...................... 83,130 4,759 5,031
Wells Fargo & Co. ................... 408,560 12,003 13,882
White Mountains Insurance Group Ltd. .... 9,280 5,344 4,747
WPX Energy Inc. .................... 72,958 1,016 1,078
Xerox Corp. ....................... 1,055,267 9,975 7,148
384,196 407,961
United Kingdom: 14.74%
Barclays PLC ....................... 1,049,968 3,120 4,529
BPPLC........................... 1,756,044 13,338 12,130
British American Tobacco PLC . . ........ 292,618 8,803 14,776
Canary Wharf Group PLC .............. 391,460 1,967 1,474
Coca–Cola Enterprises Inc. . ............ 136,710 3,140 4,310
HSBC Holdings PLC .................. 1,263,455 11,108 13,302
Imperial Tobacco Group PLC . . . ........ 423,400 14,592 16,304
Kingfisher PLC ...................... 852,215 3,789 3,954
Marconi Corp., Contingent Distribution .... 9,000 — —
Marconi Corp., Contingent Distribution .... 17,000 — —
Marconi Corp., Contingent Distribution .... 13,000 — —
Reed Elsevier PLC ................... 1,265,124 10,529 13,261
Rexam PLC ........................ 1,510,644 7,797 10,741
Royal Dutch Shell PLC, A .............. 572,103 16,437 19,554
Vodafone Group PLC ................. 7,317,090 17,579 18,298
112,199 132,633
France: 7.82%
Accor SA .......................... 300,109 15,543 10,629
Alstom SA ......................... 100,870 3,563 4,035
BNP Paribas SA .................... 173,984 10,731 9,836
Franklin Templeton Investments Funds 177

Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
France: 7.82% (Continued)
Eutelsat Communications . ............. 153,449 $ 3,686 $ 5,068
GDF Suez ......................... 397,002 14,273 8,119
Pernod Ricard SA ................... 87,140 7,754 10,039
Safran SA ......................... 91,160 3,615 3,920
Vinci SA .......................... 240,145 13,719 11,481
Vivendi SA . . . ..................... 321,497 8,273 7,220
81,157 70,347
Switzerland: 4.82%
Compagnie Financiere Richemont SA ..... 4,160 234 317
Novartis AG, American Depositary
Receipt ......................... 159,275 8,452 10,014
Roche Holding AG ................... 22,479 3,170 4,488
Schindler Holding AG, Participation
Certificate ....................... 78,355 4,479 11,070
UBSAG .......................... 763,366 12,560 11,804
Zurich Insurance Group AG . ........... 21,490 4,069 5,671
32,964 43,364
Germany: 4.30%
Continental AG ..................... 109,409 9,254 12,662
Linde AG .......................... 38,939 4,574 6,764
Metro AG ......................... 309,453 9,836 8,537
ThyssenKrupp AG ................... 457,995 14,682 10,739
38,346 38,702
Hong Kong: 3.23%
Great Eagle Holdings Ltd. . . ........... 720,967 2,478 2,365
Jardine Matheson Holdings Ltd. ......... 137,198 2,961 8,503
Jardine Strategic Holdings Ltd. ......... 404,218 5,620 14,365
Swire Pacific Ltd., B .................. 534,492 1,070 1,219
The Link Real Estate Investment Trust ..... 517,649 1,201 2,571
13,330 29,023
Netherlands: 2.59%
ING Groep NV ...................... 1,284,284 11,310 12,113
Koninklijke Ahold NV ................. 840,206 11,070 11,187
22,380 23,300
Canada: 1.46%
E–L Financial Corp. Ltd. . ............. 518 138 219
Nexen Inc. . . . ..................... 389,130 10,173 10,408
Research In Motion Ltd. . ............. 210,660 2,489 2,484
12,800 13,111
Israel: 1.33%
Check Point Software Technologies Ltd. . . . 142,805 6,323 6,757
Teva Pharmaceutical Industries Ltd.,
American Depositary Receipt ......... 141,250 5,974 5,240
12,297 11,997
Average
Cost
Fair
Value
Shares
(000s) (000s)
Denmark: 1.33%
A.P. Moller — Maersk AS, B ............ 1,600 $ 13,073 $ 11,975
Bermuda: 1.01%
Imagine Group Holdings Ltd. . . . ........ 11,740 159 134
PartnerRe Ltd. ..................... 112,374 8,825 8,991
8,984 9,125
South Korea: 0.85%
Daekyo Co. Ltd. .................... 152,279 1,502 903
KB Financial Group Inc. .............. 190,400 9,167 6,739
10,669 7,642
Japan: 0.65%
Elephant Capital Holdings Ltd. . . ........ 73 10 —
Hoya Corp. ........................ 300,611 6,680 5,875
NCB Warrant Holdings Ltd., A . . . ........ 340 30 —
6,720 5,875
China: 0.43%
China Resources Enterprise Ltd. ........ 1,068,000 3,432 3,826
Ireland: 0.24%
CRHPLC ......................... 107,339 2,504 2,168
Virgin Islands: 0.12%
Dolphin Capital Investors Ltd. . . ........ 2,541,304 9,233 1,086
Brazil: 0.00%
International Automotive Components Group
Brazil LLC ....................... 95,533 73 15
Australia: 0.00%
AET&D Holdings No. 1 Pty. Ltd. . ........ 1,069,486 — —
Total Common Stocks: ................ 764,357 812,150
PREFERRED STOCKS: 1.75%
United States: 1.75%
Hightower Holding LLC, Preferred, A ...... 14,580,000 16,975 15,762
Total Preferred Stocks: ................ 16,975 15,762
The accompanying notes are an integral part of these financial statements.
178 Franklin Templeton Investments Funds

Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
BONDS: 5.61%
United States: 5.40%
American Airlines Inc.
First Lien, 13.00%, 8/1/2016 ............................................................ 63,011 USD $ 67 $ 66
Senior Secured Note, 7.50%, 3/15/2016 ...................................................
American Airlines Pass Through Trust
5,264,000 USD 5,304 5,634
2009–1A, 10.375%, 7/2/2019 ........................................................... 156,984 USD 161 163
2011–2, A, 8.625%, 4/15/2023 ..........................................................
Clear Channel Communications Inc.
652,451 USD 677 673
9.00%, 12/15/2019 .................................................................... 5,005,000 USD 4,374 4,549
Senior Note, Payment–In–Kind, 11.00%, 8/1/2016 ........................................... 2,241,000 USD 2,036 1,686
Tranche B Term Loan, Floating Rate Note, 1/29/2016 ......................................... 5,774,740 USD 4,931 4,768
Tranche C Term Loan, Floating Rate Note, 1/29/2016 .........................................
Energy Future Intermediate Holding Co. LLC/EFIH Finance Inc.
956,883 USD 793 766
Second Lien,, 11.00%, 10/1/2021 ........................................................ 822,000 USD 829 882
Secured Note,, 11.75%, 3/1/2022 ........................................................
Hilton Worldwide Inc.
2,212,000 USD 2,205 2,439
Mezzanine D Loan, Floating Rate Note, 11/12/2015 .......................................... 309,949 USD 269 293
Mezzanine E Loan, Floating Rate Note, 11/12/2015 .......................................... 397,934 USD 340 378
Mezzanine F Loan, Floating Rate Note, 11/12/2015 .......................................... 993,836 USD 808 935
Mezzanine G Loan, Floating Rate Note, 11/12/2015 ..........................................
iStar Financial Inc.
1,788,705 USD 1,455 1,668
New Tranche A–1 Term Loan, Floating Rate Note, 3/19/2016 ................................... 86,232 USD 84 86
New Tranche A–2 Term Loan, Floating Rate Note, 3/19/2017 ................................... 628,000 USD 614 651
Term Loan B, Floating Rate Note, 10/15/2017 ...............................................
Realogy Corp.
1,268,614 USD 1,236 1,272
Senior Note, 11.50%, 4/15/2017 ......................................................... 709,000 USD 546 762
Senior Secured Note, 7.875%, 2/15/2019 .................................................. 951,000 USD 899 1,029
Senior Secured Note, 9.00%, 1/15/2020 ................................................... 362,000 USD 363 413
Texas Competitive Electric Holdings Co. LLC, Extended Term Loan, Floating Rate Note, 10/10/2017 ......
Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc.
10,378,332 USD 8,079 6,941
Senior Note, A, 10.25%, 11/1/2015 ....................................................... 1,791,000 USD 526 516
Senior Secured Note, 11.50%, 10/1/2020 ..................................................
Tribune Co.
7,061,000 USD 5,932 5,488
Incremental Term Loan, Floating Rate Note, 6/4/2014 ........................................ 583,000 USD 370 477
Initial Tranche B Term Loan, Floating Rate Note, 6/4/2014 ..................................... 7,238,000 USD 4,832 5,997
Average
Cost
Fair
Value
47,730 48,532
Italy: 0.21%
Wind Acquisition Finance SA
Senior Note, 11.75%, 7/15/2017 ......................................................... 512,000 EUR 530 703
Senior Note, 11.75%, 7/15/2017 ......................................................... 247,000 USD 211 256
Senior Secured Note, 7.25%, 2/15/2018 ................................................... 200,000 USD 181 199
7.375%, 2/15/2018 .................................................................... 293,000 EUR 327 383
Senior Secured Note, 7.375%, 2/15/2018 .................................................. 259,000 EUR 279 342
1,528 1,883
Total Bonds: ............................................................................ 49,258 50,415
Total Long-Term Investments: ............................................................... 830,590 878,327
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 179

Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal Amount
in Currency
of Issue
(000s) (000s)
SHORT-TERM SECURITIES: 0.43%
Federal Home Loan Bank Discount Notes, 1/2/2013 ............................................ 3,900,000 USD $ 3,881 $ 3,881
Total Short-Term Securities: ................................................................ 3,881 3,881
Transaction costs (Note 2) .................................................................. (1,374) —
TOTAL INVESTMENTS: 98.05% ............................................................ $833,097 882,208
NET UNREALIZED LOSS ON DERIVATIVES: (1.43%) ........................................... (12,894)
OTHER ASSETS, less liabilities: 3.38% ...................................................... 30,473
TOTAL NET ASSETS: 100.00% ................................................................ $899,787
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012)
FORWARD FOREIGN EXCHANGE CONTRACTS
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Average
Cost
Contract
Price
Fair
Value
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 247 CAD $ 248 155 GBP $ 251 $ 0.6269 $ 3
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 262 EUR 345 317 CHF 345 1.2070 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 268 CAD 268 168 GBP 271 0.6257 3
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 276 CAD 276 172 GBP 279 0.6257 3
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 317 EUR 416 382 CHF 416 1.2070 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 369 EUR 485 445 CHF 485 1.2075 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 436 CAD 436 342 EUR 449 0.7832 13
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 575 CAD 575 360 GBP 582 0.6257 7
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 587 CAD 587 454 EUR 597 0.7738 10
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 630 CAD 630 392 GBP 634 0.6223 4
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 737 CAD 737 562 EUR 738 0.7626 1
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 756 CAD 756 593 EUR 780 0.7851 24
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 869 CAD 870 672 EUR 883 0.7729 13
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 892 CAD 892 686 EUR 901 0.7691 9
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 1,065 CAD 1,066 823 EUR 1,082 0.7726 16
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 1,273 CAD 1,273 1,000 EUR 1,314 0.7857 41
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 1,534 CAD 1,534 1,185 EUR 1,557 0.7725 23
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 1,572 CAD 1,572 1,220 EUR 1,603 0.7760 31
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 1,607 CAD 1,607 1,223 EUR 1,607 0.7611 —
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 1,980 CAD 1,980 1,556 EUR 2,044 0.7856 64
CREDIT SUISSE INTERNATIONAL ......... A+ March 21, 2013 2,898 CAD 2,898 2,245 EUR 2,950 0.7747 52
DEUTSCHE BANK AG ................... A+ January 17, 2013 301 CAD 301 237 EUR 311 0.7871 10
DEUTSCHE BANK AG ................... A+ March 21, 2013 83 CAD 83 65 EUR 86 0.7863 3
DEUTSCHE BANK AG ................... A+ March 21, 2013 127 CAD 127 80 GBP 129 0.6276 2
DEUTSCHE BANK AG ................... A+ March 21, 2013 130 CAD 131 81 GBP 132 0.6259 1
DEUTSCHE BANK AG ................... A+ March 21, 2013 137 CAD 137 86 GBP 138 0.6245 1
DEUTSCHE BANK AG ................... A+ March 21, 2013 558 CAD 558 350 GBP 566 0.6275 8
DEUTSCHE BANK AG ................... A+ March 21, 2013 831 CAD 831 652 EUR 856 0.7837 25
DEUTSCHE BANK AG ................... A+ March 21, 2013 7,575 CAD 7,575 4,756 GBP 7,687 0.6278 112
DEUTSCHE BANK AG ................... A+ March 21, 2013 11,450 JPY 132 144 CAD 144 0.0126 12
DEUTSCHE BANK AG ................... A+ March 21, 2013 35,100 JPY 403 407 CAD 407 0.0116 4
The accompanying notes are an integral part of these financial statements.
180 Franklin Templeton Investments Funds

Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG .................... A+ March 21, 2013 210,409 JPY $ 2,415 2,645 CAD $ 2,646 0.0126 $ 231
HSBC BANK PLC ....................... AA- March 21, 2013 292 CAD 293 229 EUR 302 0.7849 9
HSBC BANK PLC ....................... AA- March 21, 2013 611 CAD 611 477 EUR 628 0.7817 17
HSBC BANK PLC ....................... AA- March 21, 2013 1,877 CAD 1,877 1,475 EUR 1,938 0.7857 61
HSBC BANK PLC ....................... AA- March 21, 2013 2,123 CAD 2,124 1,670 EUR 2,195 0.7867 71
HSBC BANK PLC ....................... AA- March 21, 2013 2,928 CAD 2,928 2,300 EUR 3,022 0.7854 94
HSBC BANK PLC ....................... AA- March 21, 2013 28,368 JPY 326 355 CAD 356 0.0125 30
HSBC BANK PLC ....................... AA- March 21, 2013 368,376 JPY 4,228 4,617 CAD 4,617 0.0125 389
STATE STREET BANK AND TRUST COMPANY ... AA- March 21, 2013 402 CAD 402 251 GBP 405 0.6232 3
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 63 CAD 63 50 EUR 65 0.7833 2
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 106 CAD 106 81 EUR 107 0.7673 1
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 204 EUR 267 246 CHF 268 1.2092 1
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 212 CAD 213 165 EUR 217 0.7768 4
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 219 CAD 219 171 EUR 224 0.7789 5
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 261 CAD 261 202 EUR 266 0.7753 5
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 331 CAD 332 261 EUR 343 0.7870 11
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 340 EUR 447 411 CHF 448 1.2087 1
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 370 CAD 370 291 EUR 382 0.7854 12
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 410 CAD 411 316 EUR 416 0.7710 5
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 564 CAD 564 441 EUR 580 0.7827 16
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 585 CAD 585 456 EUR 600 0.7803 15
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 609 CAD 609 476 EUR 625 0.7810 16
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 1,006 CAD 1,006 787 EUR 1,034 0.7824 28
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 1,052 CAD 1,052 813 EUR 1,068 0.7730 16
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 1,445 CAD 1,445 1,100 EUR 1,445 0.7612 —
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 1,642 CAD 1,642 1,290 EUR 1,695 0.7857 53
SVENSKA HANDELSBANKEN ............. AA- March 21, 2013 5,116 CAD 5,116 4,000 EUR 5,256 0.7819 140
Total Number of Contracts .............58 $ 1,731
CREDIT SUISSE INTERNATIONAL .......... A+ January 17, 2013 237 EUR 311 301 CAD 302 1.2718 (9)
CREDIT SUISSE INTERNATIONAL .......... A+ March 20, 2013 576 CAD 576 578 USD 575 1.0033 (1)
CREDIT SUISSE INTERNATIONAL .......... A+ March 20, 2013 2,000 USD 1,990 1,976 CAD 1,976 0.9879 (14)
CREDIT SUISSE INTERNATIONAL .......... A+ March 20, 2013 11,001 CAD 11,001 11,005 USD 10,950 1.0004 (51)
CREDIT SUISSE INTERNATIONAL .......... A+ March 21, 2013 131 GBP 212 207 CAD 207 1.5796 (5)
CREDIT SUISSE INTERNATIONAL .......... A+ March 21, 2013 990 CAD 990 612 GBP 990 0.6184 —
CREDIT SUISSE INTERNATIONAL .......... A+ March 21, 2013 1,250 GBP 2,021 1,986 CAD 1,986 1.5887 (35)
CREDIT SUISSE INTERNATIONAL .......... A+ March 21, 2013 2,120 GBP 3,427 3,401 CAD 3,401 1.6041 (26)
CREDIT SUISSE INTERNATIONAL .......... A+ March 21, 2013 61,935 GBP 100,112 98,460 CAD 98,460 1.5897 (1,652)
DEUTSCHE BANK AG .................... A+ March 20, 2013 881 CAD 881 883 USD 878 1.0017 (3)
DEUTSCHE BANK AG .................... A+ March 20, 2013 226,536 USD 225,389 221,832 CAD 221,832 0.9792 (3,557)
DEUTSCHE BANK AG .................... A+ March 21, 2013 33 CAD 33 2,634 JPY 30 79.4307 (3)
DEUTSCHE BANK AG .................... A+ March 21, 2013 202 CAD 202 15,900 JPY 183 78.8151 (19)
DEUTSCHE BANK AG .................... A+ March 21, 2013 240 GBP 388 385 CAD 385 1.6058 (3)
DEUTSCHE BANK AG .................... A+ March 21, 2013 801 EUR 1,053 966 CHF 1,052 1.2057 (1)
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 181

Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
SCHEDULE OF DERIVATIVE INSTRUMENTS (As at December 31, 2012) (Continued)
FORWARD FOREIGN EXCHANGE CONTRACTS (Continued)
Counterparty
Credit
Rating Settlement Date
Currency
to be Delivered
Par Value
in Canadian Dollars
Currency
to be Received
Par Value
in Canadian Dollars
Contract
Price
Unrealized
Gain (Loss)
(000s) (000s) (000s) (000s) (000s)
DEUTSCHE BANK AG ................. A+ April 22, 2013 1,075 CAD $ 1,075 86,164 JPY $ 990 $80.1550 $ (85)
HSBC BANK PLC ..................... AA- March 20, 2013 2,000 USD 1,990 1,961 CAD 1,961 0.9807 (29)
HSBC BANK PLC ..................... AA- March 20, 2013 2,000 USD 1,990 1,969 CAD 1,969 0.9844 (21)
HSBC BANK PLC ..................... AA- March 20, 2013 6,800 USD 6,766 6,723 CAD 6,723 0.9887 (43)
HSBC BANK PLC ..................... AA- March 20, 2013 220,401 USD 219,285 215,932 CAD 215,932 0.9797 (3,353)
HSBC BANK PLC ..................... AA- March 21, 2013 123 GBP 199 194 CAD 194 1.5725 (5)
HSBC BANK PLC ..................... AA- March 21, 2013 128 GBP 207 201 CAD 201 1.5704 (6)
HSBC BANK PLC ..................... AA- March 21, 2013 234 CAD 234 18,585 JPY 214 79.5798 (20)
HSBC BANK PLC ..................... AA- March 21, 2013 157,890 EUR 207,449 202,013 CAD 202,013 1.2795 (5,436)
STATE STREET BANK AND TRUST
COMPANY ......................... AA- March 21, 2013 216 CAD 216 17,148 JPY 197 79.3678 (19)
SVENSKA HANDELSBANKEN ........... AA- March 20, 2013 950 CAD 950 952 USD 947 1.0020 (3)
SVENSKA HANDELSBANKEN ........... AA- March 20, 2013 1,988 CAD 1,988 1,991 USD 1,981 1.0015 (7)
SVENSKA HANDELSBANKEN ........... AA- March 20, 2013 2,500 USD 2,488 2,469 CAD 2,469 0.9875 (19)
SVENSKA HANDELSBANKEN ........... AA- March 20, 2013 5,000 USD 4,975 4,947 CAD 4,947 0.9894 (28)
SVENSKA HANDELSBANKEN ........... AA- March 20, 2013 5,019 CAD 5,019 5,000 USD 4,975 0.9962 (44)
SVENSKA HANDELSBANKEN ........... AA- March 20, 2013 13,693 CAD 13,693 13,716 USD 13,646 1.0017 (47)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 64 CAD 64 5,011 JPY 58 78.6517 (6)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 151 EUR 199 194 CAD 194 1.2792 (5)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 222 EUR 292 285 CAD 285 1.2820 (7)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 656 CHF 714 543 EUR 713 0.8275 (1)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 749 EUR 985 902 CHF 982 1.2038 (3)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 1,225 EUR 1,610 1,477 CHF 1,608 1.2057 (2)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 1,427 EUR 1,875 1,722 CHF 1,875 1.2068 —
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 1,582 CAD 1,583 1,200 EUR 1,577 0.7583 (6)
SVENSKA HANDELSBANKEN ........... AA- March 21, 2013 26,747 CHF 29,118 22,122 EUR 29,067 0.8271 (51)
Total Number of Contracts ...........40 $ (14,625)
Net Unrealized Loss ................... $(12,894)
The accompanying notes are an integral part of these financial statements.
182 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 882,208 $ 912,632
Canadian 13,146 2,982
Foreign
Receivables
14,826 48,899
Investment securities sold 604 764
Capital units sold 325 182
Dividends, interest and withholding tax 3,637 4,328
Unrealized gain on derivatives 1,731 12,735
Other assets (Note 8) 89 108
Total assets
Liabilities
Payables
916,566 982,630
Investment securities purchased 355 2,228
Capital units redeemed 353 541
Management fees 959 974
Accrued expenses 487 556
Unrealized loss on derivatives 14,625 167
Total liabilities 16,779 4,466
Net assets $ 899,787 $ 978,164
Total net assets per series (000s)
Series A $497,322 $493,728
Series F 40,425 33,957
Series I 516 334
Series O 357,725 446,205
Series T 3,173 3,363
Series T USD 626 577
Number of units outstanding (Note 3)
Series A 36,959,200 40,773,176
Series F 2,701,412 2,551,159
Series I 51,921 37,656
Series O 20,555,940 29,248,279
Series T 414,271 451,078
Series T USD 59,153 56,266
Net assets per unit — CAD
Series A $13.45 $12.11
Series F 14.96 13.31
Series I 9.94 8.87
Series O 17.40 15.25
Series T 7.66 7.46
Net assets per unit — USD
Series A $13.54 $11.88
Series F 15.06 13.06
Series I 10.01 8.70
Series O 17.52 14.96
Series T USD (Note 13 (b)) 10.65 10.06
Cost of investments held (000s) $833,097 $915,710
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $2,711; 2011 — $2,738) $ 21,661 $ 24,360
Interest 4,367 4,075
Total investment income
Expenses
26,028 28,435
Management fees (Note 4(a)) 11,466 12,416
Transfer agent fees (Note 4(c)) 3,111 3,291
Custodian fees 67 92
Legal fees 6 11
Audit fees 26 29
Unitholder reporting costs 47 89
Independent review committee fees 1 1
Registration fees 34 33
Other expenses (Note 7) 651 595
Total expenses 15,409 16,557
Expenses waived/paid by Manager (Note 6) (1,807) (996)
Net expenses 13,602 15,561
Net investment income (loss) 12,426 12,874
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange gain
48,467 (23,115)
(loss)
Net change in unrealized appreciation (depreciation)
41,187 (2,682)
in value of investments and derivatives 26,727 (12,681)
Transaction costs (Note 11) (603) (953)
Net gain (loss) on investments 115,778 (39,431)
Increase (decrease) in net assets from operations $ 128,204 $ (26,557)
Increase (decrease) in net assets from
operations per series (000s)
Series A $59,261 $(20,078)
Series F 4,732 (1,013)
Series I 50 (4)
Series O 63,687 (5,321)
Series T 397 (111)
Series T USD 77 (30)
Increase (decrease) in net assets from
operations per unit
Series A $1.55 $(0.47)
Series F 1.86 (0.39)
Series I 1.17 (0.11)
Series O 2.40 (0.18)
Series T 0.93 (0.25)
Series T USD 1.25 (0.56)
Franklin Templeton Investments Funds 183

Mutual Global Discovery Fund
(formerly Mutual Discovery Fund)
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 128,204 $ (26,557) $ 59,261 $ (20,078) $ 4,732 $ (1,013)
Distributions to unitholders
From net investment income (12,893) (11,636) (7,123) (5,853) (578) (403)
From capital gains — — — — — —
From return of capital (304) (349) — — — —
(13,197) (11,985) (7,123) (5,853) (578) (403)
Capital unit transactions
Subscriptions 101,112 203,893 49,397 73,002 10,414 9,429
Reinvestments 12,667 11,490 6,946 5,714 543 374
Redemptions (307,163) (216,526) (104,887) (114,224) (8,643) (10,298)
(193,384) (1,143) (48,544) (35,508) 2,314 (495)
Increase (decrease) in net assets for the period (78,377) (39,685) 3,594 (61,439) 6,468 (1,911)
Net assets — beginning of period 978,164 1,017,849 493,728 555,167 33,957 35,868
Net assets — end of period $ 899,787 $ 978,164 $ 497,322 $ 493,728 $ 40,425 $ 33,957
Series I Series O Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 50 $ (4) $ 63,687 $ (5,321) $ 397 $ (111)
Distributions to unitholders
From net investment income (7) (5) (5,131) (5,328) (45) (40)
From capital gains — — — — — —
From return of capital — — — — (255) (299)
(7) (5) (5,131) (5,328) (300) (339)
Capital unit transactions
Subscriptions 134 105 40,722 120,178 320 866
Reinvestments 5 4 5,045 5,266 116 123
Redemptions — (98) (192,803) (91,174) (723) (679)
139 11 (147,036) 34,270 (287) 310
Increase (decrease) in net assets for the period 182 2 (88,480) 23,621 (190) (140)
Net assets — beginning of period 334 332 446,205 422,584 3,363 3,503
Net assets — end of period $ 516 $ 334 $ 357,725 $ 446,205 $ 3,173 $ 3,363
Series T USD
2012 2011
Increase (decrease) in net assets from operations $ 77 $ (30)
Distributions to unitholders
From net investment income (9) (7)
From capital gains — —
From return of capital (49) (50)
Capital unit transactions
(58) (57)
Subscriptions 125 313
Reinvestments 12 9
Redemptions (107) (53)
30 269
Increase (decrease) in net assets for the period 49 182
Net assets — beginning of period 577 395
Net assets — end of period $ 626 $ 577
The accompanying notes are an integral part of these financial statements.
184 Franklin Templeton Investments Funds

Franklin Templeton Canadian Core Equity Fund
STATEMENT OF INVESTMENTS As at December 31, 2012
Average
Cost
Fair
Value
Shares
(000s) (000s)
LONG-TERM INVESTMENTS: 99.76%
COMMON STOCKS: 99.76%
Metals & Mining: 26.38%
Agnico–Eagle Mines Ltd. . . . ............ 6,800 $ 358 $ 354
Banro Corp. ........................ 1,102,500 3,972 3,043
Capstone Mining Corp. ................. 383,700 1,113 921
Colossus Minerals Inc. ................. 2,474,000 12,827 11,306
Colossus Minerals Inc., Warrants, 11/08/2016 . . 47,700 83 64
Continental Gold Ltd. .................. 201,200 1,853 1,762
Copper Mountain Mining Corp. . .......... 231,300 854 904
First Majestic Silver Corp. . . . ............ 10,700 245 214
First Quantum Minerals Ltd. ............. 49,800 1,020 1,089
Goldcorp Inc. . ...................... 24,500 1,029 891
Inmet Mining Corp. ................... 8,300 558 614
Lundin Mining Corp. .................. 985,400 4,742 5,016
Nevada Copper Corp. .................. 2,964,929 12,133 10,348
Newstrike Capital Inc. ................. 318,900 955 641
Osisko Mining Corp. ................... 180,500 1,368 1,435
Queenston Mining Inc. ................. 1,082,400 5,445 5,239
Rio Alto Mining Ltd. ................... 104,500 460 531
Sherritt International Corp. . . ............ 112,900 572 641
Silver Wheaton Corp. .................. 36,900 1,485 1,320
Sirocco Mining Inc. ................... 4,000 5 3
Tahoe Resources Inc. ................. 59,600 1,087 1,083
Taseko Mines Ltd. .................... 50,900 134 153
Teck Resources Ltd., B ................ 62,100 1,994 2,239
Torex Gold Resources Inc. . . ............ 170,900 342 371
Yamana Gold Inc. .................... 96,200 1,732 1,639
56,366 51,821
Commercial Banks: 22.03%
Bank of Montreal ..................... 70,200 4,047 4,269
Bank of Nova Scotia ................... 195,600 10,274 11,231
Canadian Imperial Bank of Commerce ...... 55,900 4,168 4,470
Royal Bank of Canada ................. 201,200 10,773 12,034
The Toronto–Dominion Bank ............ 134,900 9,914 11,284
39,176 43,288
Oil, Gas & Consumable Fuels: 21.05%
Bankers Petroleum Ltd. ................ 3,754,100 13,412 12,013
Bellatrix Exploration Ltd. ................ 223,900 928 952
Canadian Natural Resources Ltd. ......... 102,300 3,215 2,929
Cenovus Energy Inc. .................. 46,800 1,588 1,558
DeeThree Exploration Ltd. . . . ............ 195,400 856 1,270
Paramount Resources Ltd., A ............ 171,300 5,174 5,470
Pinecrest Energy Inc. .................. 927,000 1,660 1,372
Renegade Petroleum Ltd. . . . ............ 2,220,900 7,249 5,419
Suncor Energy Inc. ................... 168,584 5,757 5,513
Surge Energy Inc. .................... 52,100 291 285
Torc Oil & Gas Ltd. .................... 280,690 839 648
Trilogy Energy Corp. ................... 54,100 1,581 1,571
The accompanying notes are an integral part of these financial statements.
Average
Cost
Fair
Value
Shares
(000s) (000s)
Oil, Gas & Consumable Fuels: 21.05% (Continued)
TriOil Resources Ltd., A ................ 411,100 $ 1,111 $ 1,225
Whitecap Resources Inc. ............... 131,500 1,044 1,136
44,705 41,361
Food & Staples Retailing: 7.92%
Alimentation Couche–Tard Inc., B ......... 110,500 3,417 5,387
Metro Inc., A ........................ 127,400 6,256 8,056
Shoppers Drug Mart Corp. .............. 49,500 2,030 2,114
11,703 15,557
Biotechnology: 5.04%
Oncolytics Biotech Inc. ................. 2,505,350 11,549 9,896
Road & Rail: 2.83%
Canadian National Railway Co. . . ......... 44,450 3,042 4,013
Canadian Pacific Railway Ltd. ............ 15,400 1,309 1,552
4,351 5,565
Energy Equipment & Services: 2.44%
Canadian Energy Services & Technology
Corp., A ......................... 142,447 1,547 1,503
Cathedral Energy Services Ltd. . . ......... 254,100 1,655 1,466
Precision Drilling Corp. ................. 61,700 485 505
Secure Energy Services Inc. ............. 134,700 1,102 1,327
4,789 4,801
Multiline Retail: 2.26%
Dollarama Inc. ....................... 44,700 2,321 2,635
Hudson’s Bay Co. .................... 107,900 1,834 1,804
4,155 4,439
Software: 1.92%
The Descartes Systems Group Inc. ........ 409,400 3,474 3,771
Auto Components: 1.29%
Magna International Inc. ................ 51,000 2,128 2,528
Aerospace & Defense: 1.18%
Bombardier Inc., B ................... 425,300 2,469 1,595
CAE Inc. ........................... 71,900 751 723
3,220 2,318
Insurance: 1.13%
Manulife Financial Corp. ................ 165,000 2,241 2,224
Pharmaceuticals: 1.08%
Valeant Pharmaceuticals International Inc. . . .
Hotels, Restaurants & Leisure: 0.92%
35,900 1,496 2,127
Tim Hortons Inc. ..................... 37,100 1,759 1,810
Health Care Providers & Services: 0.89%
Catamaran Corp. ..................... 37,300 1,541 1,743
Real Estate Management & Development: 0.53%
Brookfield Office Properties Inc. . ......... 61,200 1,064 1,033
Construction & Engineering: 0.44%
SNC–Lavalin Group Inc., A .............. 21,400 840 862
Franklin Templeton Investments Funds 185

Franklin Templeton Canadian Core Equity Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Average
Cost
Fair
Value
Shares
(000s) (000s)
Chemicals: 0.39%
Potash Corp. of Saskatchewan Inc. . . ........ 19,100 $ 825 $ 771
Communications Equipment: 0.04%
Enablence Technologies Inc. .............. 615,715 8,022 71
Enablence Technologies Inc., Restricted ...... 88,450 389 10
8,411 81
Total Common Stocks: ................... 203,793 195,996
Total Long-Term Investments: .............. 203,793 195,996
Transaction costs (Note 2) .................. (516) —
TOTAL INVESTMENTS: 99.76% ............. $203,277 195,996
OTHER ASSETS, less liabilities: 0.24% ....... 466
TOTAL NET ASSETS: 100.00% ............. $196,462
The accompanying notes are an integral part of these financial statements.
186 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
Franklin Templeton Canadian Core Equity Fund
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 195,996 $ 297,223
Canadian
Receivables
449 8,849
Investment securities sold 1,073 —
Capital units sold — 564
Dividends 304 381
Total assets
Liabilities
Payables
197,822 307,017
Investment securities purchased 1,360 3,263
Capital units redeemed — 415
Total liabilities 1,360 3,678
Net assets $ 196,462 $ 303,339
Total net assets per series (000s)
Series O $196,462 $303,339
Number of units outstanding (Note 3)
Series O 27,554,867 39,880,934
Net assets per unit — CAD
Series O $7.13 $7.60
Cost of investments held (000s) $203,277 $318,373
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends $ 4,891 $ 4,764
Interest — —
Total investment income
Expenses
4,891 4,764
Management fees (Note 4(a)) — —
Transfer agent fees (Note 4(c)) 1 —
Custodian fees — —
Legal fees 1 —
Audit fees 19 19
Unitholder reporting costs 7 9
Independent review committee fees 1 1
Registration fees 14 3
Other expenses (Note 7) 16 15
Total expenses 59 47
Expenses waived/paid by Manager (Note 6) (59) (47)
Net expenses — —
Net investment income (loss) 4,891 4,764
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(61,822) 34,137
gain (loss)
Net change in unrealized appreciation
— 3
(depreciation) in value of investments 13,869 (101,660)
Transaction costs (Note 11) (2,548) (3,101)
Net gain (loss) on investments (50,501) (70,621)
Increase (decrease) in net assets from operations $ (45,610) $ (65,857)
Increase (decrease) in net assets from operations
per series (000s)
Series O $(45,610) $(65,857)
Increase (decrease) in net assets from operations
per unit
Series O $(1.01) $(1.56)
Franklin Templeton Investments Funds 187

Franklin Templeton Canadian Core Equity Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
Series O
2012 2011
Increase (decrease) in net assets from operations $ (45,610) $ (65,857)
Distributions to unitholders
From net investment income (4,944) (5,646)
From capital gains — (5,936)
From return of capital — —
Capital unit transactions
(4,944) (11,582)
Subscriptions 166,405 69,950
Reinvestments 4,944 11,582
Redemptions (227,672) (184,344)
(56,323) (102,812)
Increase (decrease) in net assets for the period (106,877) (180,251)
Net assets — beginning of period 303,339 483,590
Net assets — end of period $ 196,462 $ 303,339
The accompanying notes are an integral part of these financial statements.
188 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin Templeton Canadian Large Cap Fund
Shares
Average
Cost Fair Value
(000s) (000s)
LONG-TERM INVESTMENTS: 98.92%
COMMON STOCKS: 98.92%
Commercial Banks: 25.39%
Bank of Nova Scotia ................... 289,217 $ 14,110 $ 16,607
Canadian Imperial Bank of Commerce ...... 201,248 13,859 16,092
Royal Bank of Canada .................. 190,091 9,406 11,369
The Toronto–Dominion Bank ............. 201,900 13,330 16,889
50,705 60,957
Oil, Gas & Consumable Fuels: 21.38%
Canadian Natural Resources Ltd. . ......... 421,722 14,343 12,074
EnCana Corp. . . ...................... 172,967 4,713 3,390
Husky Energy Inc. ..................... 239,148 7,392 7,029
Imperial Oil Ltd. ...................... 276,254 11,954 11,804
Nexen Inc. .......................... 177,501 3,711 4,716
Suncor Energy Inc. .................... 376,723 12,893 12,319
55,006 51,332
Insurance: 8.46%
Great–West Lifeco Inc. ................. 230,527 5,663 5,597
Power Corp. of Canada ................. 281,112 7,457 7,110
Sun Life Financial Inc. .................. 288,729 8,347 7,605
21,467 20,312
Energy Equipment & Services: 7.71%
Ensign Energy Services Inc. . . . ........... 274,925 4,430 4,209
Precision Drilling Corp. ................. 583,174 4,597 4,776
Shawcor Ltd., A ...................... 120,168 3,450 4,676
Trican Well Service Ltd. ................. 369,365 5,200 4,842
17,677 18,503
Media: 6.49%
Corus Entertainment Inc., B . . . ........... 154,240 3,297 3,788
Shaw Communications Inc. . . . ........... 156,949 3,062 3,580
Thomson Reuters Corp. ................. 285,128 8,485 8,203
14,844 15,571
Food & Staples Retailing: 4.27%
Empire Co. Ltd., A ..................... 40,003 2,220 2,350
Loblaw Companies Ltd. ................. 188,968 6,731 7,910
8,951 10,260
Metals & Mining: 3.87%
Inmet Mining Corp. .................... 65,130 3,320 4,820
Sherritt International Corp. ............... 786,507 4,638 4,467
7,958 9,287
Chemicals: 2.99%
Agrium Inc. . . . ...................... 48,451 2,553 4,803
Methanex Corp. ...................... 75,432 2,076 2,384
4,629 7,187
The accompanying notes are an integral part of these financial statements.
Shares
Average
Cost Fair Value
(000s) (000s)
Wireless Telecommunication Services: 2.94%
Rogers Communications Inc., B ...... 156,277 $ 5,323 $ 7,054
Multiline Retail: 2.91%
Canadian Tire Corp. Ltd., A .......... 100,851 5,599 6,988
Auto Components: 2.45%
Magna International Inc. ............ 118,672 4,483 5,883
Construction & Engineering: 2.39%
SNC–Lavalin Group Inc., A .......... 142,565 5,360 5,741
Internet Software & Services: 1.97%
Open Text Corp. .................. 85,315 4,081 4,725
Paper & Forest Products: 1.91%
Resolute Forest Products ........... 351,495 8,235 4,591
Capital Markets: 1.49%
IGM Financial Inc. ................ 85,984 3,324 3,576
IT Services: 1.18%
CGI Group Inc., A ................. 123,897 1,984 2,840
Diversified Telecommunication Services: 1.12%
Telus Corp. ..................... 41,543 1,434 2,683
Total Common Stocks: .............. 221,060 237,490
Total Long-Term Investments: ......... 221,060 237,490
Principal Amount
in Currency
of Issue
SHORT-TERM SECURITIES: 0.67%
Canada Treasury Bill,
1.045%, 8/29/2013 ............. 1,640,000 CAD 1,628 1,625
Total Short-Term Securities: .......... 1,628 1,625
Transaction costs (Note 2) ............. (237) —
TOTAL INVESTMENTS: 99.59% ....... $222,451 239,115
OTHER ASSETS, less liabilities:
0.41% ........................ 973
TOTAL NET ASSETS: 100.00% ........ $ 240,088
2012 2011
%of %of
Bond Ratings*
Net Assets Net Assets
AAA .................................. 0.67 2.48
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
Franklin Templeton Investments Funds 189

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
Franklin Templeton Canadian Large Cap Fund
2012 2011
(000s) (000s)
Assets
Investment in securities — at fair value
Cash
$ 239,115 $ 219,087
Canadian
Receivables
161 9
Investment securities sold — 94
Capital units sold — 377
Dividends 812 644
Total assets
Liabilities
Payables
240,088 220,211
Capital units redeemed — 330
Total liabilities — 330
Net assets $ 240,088 $ 219,881
Total net assets per series (000s)
Series O $240,088 $219,881
Number of units outstanding (Note 3)
Series O 27,846,422 28,158,413
Net assets per unit — CAD
Series O $8.62 $7.81
Cost of investments held (000s) $222,451 $228,716
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Dividends (net of foreign taxes withheld (000s) —
2012 — $0; 2011 — $19) $ 7,425 $ 7,859
Interest 45 76
Total investment income
Expenses
7,470 7,935
Management fees (Note 4(a)) — —
Transfer agent fees (Note 4(c)) 1 —
Custodian fees — —
Legal fees 1 —
Audit fees 19 19
Unitholder reporting costs 6 8
Independent review committee fees 1 1
Registration fees 14 3
Other expenses (Note 7) 14 11
Total expenses 56 42
Expenses waived/paid by Manager (Note 6) (56) (42)
Net expenses — —
Net investment income (loss) 7,470 7,935
Realized and unrealized gain (loss) on
investments and transaction costs
Net realized gain (loss) on investments
Net realized and/or unrealized foreign exchange
(3,108) 33,922
gain (loss)
Net change in unrealized appreciation
1 (117)
(depreciation) in value of investments 26,293 (61,341)
Transaction costs (Note 11) (228) (312)
Net gain (loss) on investments 22,958 (27,848)
Increase (decrease) in net assets from operations $ 30,428 $ (19,913)
Increase (decrease) in net assets from operations
per series (000s)
Series O $30,428 $(19,913)
Increase (decrease) in net assets from operations
per unit
Series O $0.95 $(0.65)
The accompanying notes are an integral part of these financial statements.
190 Franklin Templeton Investments Funds

Franklin Templeton Canadian Large Cap Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
Series O
2012 2011
Increase (decrease) in net assets from operations $ 30,428 $ (19,913)
Distributions to unitholders
From net investment income (7,016) (8,537)
From capital gains — (34,384)
From return of capital — —
Capital unit transactions
(7,016) (42,921)
Subscriptions 141,240 32,394
Reinvestments 7,016 51,879
Redemptions (151,461) (210,401)
(3,205) (126,128)
Increase (decrease) in net assets for the period 20,207 (188,962)
Net assets — beginning of period 219,881 408,843
Net assets — end of period $ 240,088 $ 219,881
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 191

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin Templeton Global Blend Fund
Units
(000s) (000s)
LONG-TERM INVESTMENTS: 100.74%
INVESTMENTS IN UNDERLYING FUNDS: 100.74%
Franklin World Growth Fund ............................................................................. 21,059 $196 $225
Mutual Global Discovery Fund ............................................................................ 12,833 192 223
Templeton Global Bond Fund ............................................................................ 29,256 352 365
Total Investments In Underlying Funds: ...................................................................... 740 813
Total Long-Term Investments: ............................................................................. 740 813
TOTAL INVESTMENTS: 100.74% .......................................................................... $740 813
OTHER ASSETS, less liabilities: (0.74%) .................................................................... (6)
TOTAL NET ASSETS: 100.00% ........................................................................... $807
192 Franklin Templeton Investments Funds
Average
Cost
Fair
Value
The accompanying notes are an integral part of these financial statements.

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(000s) (000s)
Assets
Investment in underlying funds — at fair value
Cash
$ 813 $ 794
Canadian 13 15
Other assets (Note 8) 7 9
Total assets
Liabilities
Payables
833 818
Management fees 1 1
Accrued expenses 24 22
Distributions to unitholders 1 10
Total liabilities 26 33
Net assets $ 807 $ 785
Total net assets per series (000s)
Series A $681 $669
Series F 12 10
Series I 7 6
Series O 35 36
Series T 21 20
Series T USD 51 44
Number of units outstanding (Note 3)
Series A 55,553 59,662
Series F 955 863
Series I 500 500
Series O 2,561 2,988
Series T 1,454 1,375
Series T USD 2,870 2,566
Net assets per unit — CAD
Series A $12.26 $11.22
Series F 12.82 11.60
Series I 12.64 11.47
Series O 13.52 12.07
Series T 14.53 14.09
Net assets per unit — USD
Series A $12.34 $11.01
Series F 12.91 11.38
Series I 12.73 11.25
Series O 13.61 11.84
Series T USD (Note 13 (b)) 18.04 16.99
Cost of investments held (000s) $740 $790
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin Templeton Global Blend Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(000s) (000s)
Investment income
Distributions received from underlying funds (Note 4(d)) $ 23 $ 23
Interest — —
Total investment income
Expenses
23 23
Management fees (Note 4(a)) 17 18
Transfer agent fees (Note 4(c)) 5 4
Custodian fees — —
Legal fees 1 —
Audit fees 19 19
Unitholder reporting costs 4 4
Independent review committee fees 1 1
Registration fees 21 20
Other expenses (Note 7) 7 5
Total expenses 75 71
Expenses waived/paid by Manager (Note 6) (56) (51)
Net expenses 19 20
Net investment income (loss) 4 3
Realized and unrealized gain (loss) on investments
Net realized gain (loss) on investments
Net change in unrealized appreciation (depreciation) in
15 11
value of investments 69 (43)
Net gain (loss) on investments 84 (32)
Increase (decrease) in net assets from operations $ 88 $ (29)
Increase (decrease) in net assets from operations
per series (000s)
Series A $74 $(28)
Series F 1 —*
Series I 1 —*
Series O 5 —*
Series T 2 —*
Series T USD
Increase (decrease) in net assets from operations per unit
5 (1)
Series A $1.28 $(0.44)
Series F 1.54 (0.25)
Series I 1.47 (0.29)
Series O 1.74 (0.04)
Series T 1.64 (0.32)
Series T USD
* Amount rounded to zero in the nearest thousand.
2.00 (0.58)
Franklin Templeton Investments Funds 193

Franklin Templeton Global Blend Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 88 $ (29) $ 74 $ (28) $ 1 $ —*
Distributions to unitholders
From net investment income (2) (2) (2) (2) — —
From capital gains (17) (8) (14) (7) — —
From return of capital (4) (5) — — — —
(23) (15) (16) (9) — —
Capital unit transactions
Subscriptions 183 359 176 329 1 —
Reinvestments 29 18 22 14 — —
Redemptions (255) (345) (244) (340) — —
(43) 32 (46) 3 1 —
Increase (decrease) in net assets for the period 22 (12) 12 (34) 2 —
Net assets — beginning of period 785 797 669 703 10 10
Net assets — end of period $ 807 $ 785 $ 681 $ 669 $ 12 $ 10
Series I Series O Series T
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 1 $ —* $ 5 $ —* $ 2 $ —*
Distributions to unitholders
From net investment income — — — — — —
From capital gains — — (1) — (1) —
From return of capital — — — — (1) (2)
— — (1) — (2) (2)
Capital unit transactions
Subscriptions — — — 30 — —
Reinvestments — — 1 — 1 1
Redemptions — — (6) — — (5)
— — (5) 30 1 (4)
Increase (decrease) in net assets for the period 1 — (1) 30 1 (6)
Net assets — beginning of period 6 6 36 6 20 26
Net assets — end of period $ 7 $ 6 $ 35 $ 36 $ 21 $ 20
Series T USD
2012 2011
Increase (decrease) in net assets from operations $ 5 $ (1)
Distributions to unitholders
From net investment income — —
From capital gains (1) (1)
From return of capital (3) (3)
Capital unit transactions
(4) (4)
Subscriptions 6 —
Reinvestments 5 3
Redemptions (5) —
6 3
Increase (decrease) in net assets for the period 7 (2)
Net assets — beginning of period 44 46
Net assets — end of period $ 51 $ 44
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
194 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin Templeton Money Market Fund
Principal
Amount
Cost and
Value
(CAD) (CAD 000s)
TREASURY BILLS: 18.34%
Canada Treasury Bill: 18.34%
0.973%, January 3, 2013 . .................... $ 3,000,000 $ 3,000
0.939%, January 14, 2013 . . .................. 10,000,000 9,996
1.023%, May 9, 2013 ........................ 7,975,000 7,946
1.03%, May 23, 2013 ........................ 2,000,000 1,992
1.095%, June 6, 2013 . . . .................... 3,850,000 3,832
1.096%, August 1, 2013 . . .................... 6,000,000 5,962
1.172%, August 29, 2013 . .................... 2,175,000 2,158
1.064%, September 26, 2013 .................. 5,000,000 4,961
1.08%, October 24, 2013 . .................... 2,000,000 1,983
1.072%, November 21, 2013 .................. 1,000,000 991
1.116%, December 19, 2013 .................. 2,000,000 1,979
Total Treasury Bills .......................... 45,000,000 44,800
BANKER’S ACCEPTANCES: 18.84%
Bank of Nova Scotia: 3.62%
1.055%, January 2, 2013 . .................... 2,000,000 2,000
1.14%, January 4, 2013 . . .................... 850,000 850
1.062%, January 7, 2013 . .................... 3,000,000 2,999
1.12%, January 21, 2013 . .................... 1,600,000 1,599
1.148%, February 11, 2013 . .................. 900,000 899
1.181%, March 8, 2013 . . .................... 500,000 499
8,850,000 8,846
HSBC Bank Canada: 4.58%
1.24%, January 10, 2013 . .................... 700,000 700
1.171%, January 14, 2013 . . .................. 500,000 500
1.166%, January 16, 2013 . . .................. 1,000,000 1,000
1.211%, January 21, 2013 . . .................. 1,150,000 1,149
1.20%, January 31, 2013 . .................... 225,000 225
1.174%, February 15, 2013 . .................. 2,000,000 1,997
1.179%, February 27, 2013 . .................. 1,000,000 998
1.182%, February 28, 2013 . .................. 1,000,000 998
1.269%, March 5, 2013 . . .................... 500,000 499
1.201%, April 8, 2013 ........................ 1,800,000 1,794
1.27%, July 31, 2013 ........................ 1,350,000 1,340
11,225,000 11,200
Manulife Bank of Canada: 1.42%
1.16%, January 3, 2013 . . .................... 500,000 500
1.151%, January 8, 2013 . .................... 500,000 500
1.113%, January 11, 2013 . . .................. 1,000,000 1,000
1.149%, February 7, 2013 . . .................. 500,000 500
1.15%, March 4, 2013 . . . .................... 1,000,000 998
3,500,000 3,498
National Bank of Canada: 1.54%
1.134%, January 10, 2013 . . .................. 2,750,000 2,749
1.122%, January 31, 2013 . . .................. 1,000,000 999
3,750,000 3,748
The accompanying notes are an integral part of these financial statements.
Principal
Amount
Cost and
Value
(CAD) (CAD 000s)
Royal Bank of Canada: 1.13%
1.23%, January 29, 2013 ..................... $ 750,000 $ 749
1.108%, January 30, 2013 .................... 2,000,000 1,998
2,750,000 2,747
The Toronto-Dominion Bank: 6.55%
1.096%, January 4, 2013 ..................... 475,000 475
1.075%, January 14, 2013 .................... 2,000,000 1,999
1.083%, January 21, 2013 .................... 2,000,000 1,999
1.096%, January 23, 2013 .................... 2,000,000 1,999
1.096%, January 28, 2013 .................... 2,125,000 2,123
1.096%, January 31, 2013 .................... 2,000,000 1,998
1.132%, March 6, 2013 ...................... 1,500,000 1,497
1.11%, April 1, 2013 ........................ 2,000,000 1,993
1.241%, May 1, 2013 ........................ 900,000 896
1.231%, June 18, 2013 ...................... 1,000,000 994
16,000,000 15,973
Total Banker’s Acceptances .................... 46,075,000 46,012
COMMERCIAL PAPER: 1.88%
Citigroup Finance Canada Inc.: 0.41%
1.167%, January 3, 2013 ..................... 1,000,000 1,000
GE Capital Canada Funding Co.: 0.41%
1.139%, February 12, 2013 ................... 1,000,000 999
Glacier Credit Card Trust: 0.41%
1.191%, January 4, 2013 ..................... 1,000,000 1,000
Honda Canada Finance Inc.: 0.24%
1.151%, January 3, 2013 ..................... 600,000 600
Paccar Financial Ltd.: 0.41%
1.161%, March 18, 2013 ..................... 1,000,000 997
Total Commercial Paper ....................... 4,600,000 4,596
CORPORATE BONDS: 51.65%
Bank of Montreal, Floating Rate Note: 5.33%
January 22, 2013 ........................... 5,000,000 5,000
June 21, 2013 . . . .......................... 5,000,000 5,000
October 15, 2013 ........................... 3,000,000 3,000
13,000,000 13,000
Bank of Montreal, Floating Rate Note, Senior Note: 0.82%
January 22, 2013 ........................... 2,000,000 2,000
Bank of Montreal, Senior Note: 0.84%
1.377%, September 3, 2013 ................... 2,000,000 2,049
Bank of Nova Scotia, Floating Rate Note: 0.41%
November 8, 2013 .......................... 1,000,000 1,000
Bank of Nova Scotia, Senior Note: 1.45%
1.366%, April 8, 2013 ........................ 3,500,000 3,534
Franklin Templeton Investments Funds 195

Franklin Templeton Money Market Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Principal
Amount
Cost and
Value
(CAD) (CAD 000s)
Bank of Nova Scotia, Senior Note, Floating Rate Note: 3.28%
April 19, 2013 . . . .......................... $ 3,000,000 $ 3,003
September 19, 2013 ......................... 5,000,000 5,005
8,000,000 8,008
BMW Canada Inc., Senior Note: 1.55%
1.562%, March 28, 2013 . .................... 3,781,000 3,796
Caisse Centrale Desjardins du Quebec, Floating Rate Note: 4.10%
February 19, 2013 .......................... 10,000,000 10,003
Canadian Credit Card Trust: 3.65%
1.278%, March 25, 2013 . .................... 8,839,000 8,923
Canadian Imperial Bank of Commerce, Floating Rate Note: 3.58%
May 8, 2013 . . . ............................ 7,725,000 7,732
May 21, 2013 .............................. 1,000,000 1,001
8,725,000 8,733
Canadian Imperial Bank of Commerce, Senior Note, Floating Rate Note: 1.02%
April 8, 2013 .............................. 2,500,000 2,502
Cards II Trust, Floating Rate Note, Secured Note, 2006-1, A: 4.49%
March 20, 2013 . . .......................... 10,982,000 10,977
Caterpillar Financial Services Ltd., Senior Note: 0.83%
1.363%, June 3, 2013 . . . .................... 2,000,000 2,032
Eagle Credit Card Trust, Secured Note, 101A: 1.66%
1.366%, December 17, 2013 .................. 4,000,000 4,055
GE Capital Canada Funding Co.: 1.35%
1.327%, June 6, 2013 . . . .................... 3,250,000 3,303
GE Capital Canada Funding Co., Senior Note, Floating Rate Note: 2.88%
June 11, 2014 . . . .......................... 5,000,000 5,000
January 26, 2015 . .......................... 2,000,000 2,033
7,000,000 7,033
Glacier Credit Card Trust, Senior Secured Note: 1.65%
1.516%, February 20, 2013 . .................. 4,000,000 4,019
Golden Credit Card Trust, first lien: 0.83%
1.229%, April 15, 2013 . . . .................... 2,000,000 2,024
Hydro One Inc., Senior Note: 0.84%
1.422%, November 12, 2013 .................. 2,000,000 2,062
Manulife Bank of Canada, Senior Note, Floating Rate Note: 2.93%
November 18, 2013 ......................... 5,000,000 5,006
December 3, 2014 .......................... 2,150,000 2,150
7,150,000 7,156
Metropolitan Life Global Funding I: 0.84%
1.598%, November 8, 2013 . .................. 2,000,000 2,048
Metropolitan Life Global Funding I, Senior Secured Note: 1.99%
1.773%, May 30, 2013 . . . .................... 4,810,000 4,870
Royal Bank of Canada, Floating Rate Note, Senior Note: 2.05%
September 19, 2013 ......................... 5,000,000 5,000
Principal
Amount
Cost and
Value
(CAD) (CAD 000s)
Royal Bank of Canada, Senior Note, Floating Rate Note: 2.46%
April 19, 2013 . . . .......................... 5,000,000 5,000
January 21, 2014 ........................... 1,000,000 1,002
6,000,000 6,002
Royal Bank of Canada, Subordinated Note, 4.84% to 3/11/2013, Floating Rate
Note thereafter, 3/11/18: 0.82%
March 11, 2018 ............................ 2,000,000 2,013
Total Corporate Bonds ........................ 125,537,000 126,142
GOVERNMENT BONDS: 5.47%
Province of Ontario: 1.24%
1.227%, April 17, 2013 ....................... 3,000,000 3,037
Province of Ontario, Floating Rate Note: 2.66%
April 2, 2013 .............................. 6,500,000 6,501
Province of Quebec, Floating Rate Note: 1.57%
December 10, 2013 ......................... 3,860,000 3,826
Total Government Bonds ....................... 13,360,000 13,364
TOTAL INVESTMENTS: 96.18% .................. $234,572,000 234,914
OTHER ASSETS, less liabilities: 3.82% ............ 9,336
TOTAL NET ASSETS: 100.00% .................. $244,250
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA .................................. 50.60 38.49
AA ................................... 15.88 17.00
A..................................... 29.70 38.80
BBB .................................. — 3.26
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
The accompanying notes are an integral part of these financial statements.
196 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(CAD 000s) (CAD 000s)
Assets
Investment in securities — at fair value
Cash
$ 234,914 $ 259,636
Canadian
Receivables
— 4
Investment securities sold 11,000 —
Capital units sold 8,647 —
Interest 690 940
Total assets
Liabilities
Payables
255,251 260,580
Investment securities purchased 10,619 —
Capital units redeemed 6 10
Management fees 116 135
Distributions to unitholders 260 176
Total liabilities 11,001 321
Net assets $ 244,250 $ 260,259
Total net assets per series (CAD 000s)
Series A $96,295 $126,507
Series F 21,590 25,546
Series I 172 47
Series O 126,193 108,159
Number of units outstanding (Note 3)
Series A 9,629,469 12,650,650
Series F 2,159,009 2,554,638
Series I 17,216 4,704
Series O 12,619,249 10,815,937
Net assets per unit — CAD
Series A $10.00 $10.00
Series F 10.00 10.00
Series I 10.00 10.00
Series O 10.00 10.00
Cost of investments held (CAD 000s) $234,914 $259,636
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin Templeton Money Market Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(CAD 000s) (CAD 000s)
Investment income
Interest $ 3,759 $ 3,670
Total investment income
Expenses
3,759 3,670
Management fees (Note 4(a)) 1,314 1,485
Transfer agent fees (Note 4(c)) 702 821
Custodian fees 29 28
Legal fees 3 3
Audit fees 22 19
Unitholder reporting costs 21 22
Independent review committee fees 1 1
Registration fees 24 24
Other expenses (Note 7) 178 156
Total expenses 2,294 2,559
Expenses waived/paid by Manager (Note 6) (980) (1,074)
Net expenses 1,314 1,485
Net investment income (loss) 2,445 2,185
Increase (decrease) in net assets from
operations $ 2,445 $ 2,185
Increase (decrease) in net assets from
operations per series (CAD 000s)
Series A $448 $443
Series F 229 248
Series I —* —*
Series O
Increase (decrease) in net assets from
operations per unit
1,768 1,494
Series A $0.04 $0.04
Series F 0.10 0.09
Series I 0.06 0.05
Series O
* Amount rounded to zero in the nearest thousand.
0.15 0.15
Franklin Templeton Investments Funds 197

Franklin Templeton Money Market Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in CAD 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 2,445 $ 2,185 $ 448 $ 443 $ 229 $ 248
Distributions to unitholders
From net investment income (2,444) (2,185) (447) (443) (229) (248)
From capital gains — — — — — —
From return of capital — — — — — —
(2,444) (2,185) (447) (443) (229) (248)
Capital unit transactions
Subscriptions 193,754 174,418 75,660 115,985 10,657 22,372
Reinvestments 2,347 2,183 418 440 222 245
Redemptions (212,111) (178,843) (106,291) (122,320) (14,835) (24,682)
(16,010) (2,242) (30,213) (5,895) (3,956) (2,065)
Increase (decrease) in net assets for the period (16,009) (2,242) (30,212) (5,895) (3,956) (2,065)
Net assets — beginning of period 260,259 262,501 126,507 132,402 25,546 27,611
Net assets — end of period $ 244,250 $ 260,259 $ 96,295 $ 126,507 $ 21,590 $ 25,546
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ —* $ —* $ 1,768 $ 1,494
Distributions to unitholders
From net investment income — — (1,768) (1,494)
From capital gains — — — —
From return of capital — — — —
— — (1,768) (1,494)
Capital unit transactions
Subscriptions 167 2 107,270 36,059
Reinvestments — — 1,707 1,498
Redemptions (42) (11) (90,943) (31,830)
125 (9) 18,034 5,727
Increase (decrease) in net assets for the period 125 (9) 18,034 5,727
Net assets — beginning of period 47 56 108,159 102,432
Net assets — end of period $ 172 $ 47 $ 126,193 $ 108,159
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
198 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin Templeton Treasury Bill Fund
Principal
Amount
Cost and
Value
(CAD) (CAD 000s)
TREASURY BILLS: 57.21%
Canada Treasury Bill: 28.22%
1.00%, January 3, 2013 ....................... $ 3,000,000 $ 3,000
0.985%, January 4, 2013 . . . ................... 2,000,000 2,000
0.939%, January 14, 2013 . . ................... 1,000,000 1,000
0.98%, February 14, 2013 . . ................... 920,000 919
1.036%, February 28, 2013 . . ................... 2,500,000 2,496
1.189%, March 14, 2013 . . . ................... 1,250,000 1,247
1.243%, April 11, 2013 ........................ 1,035,000 1,031
1.045%, April 25, 2013 ........................ 1,314,000 1,310
1.121%, May 9, 2013 ......................... 2,125,000 2,117
1.03%, May 23, 2013 ......................... 2,000,000 1,992
1.10%, June 6, 2013 ......................... 1,500,000 1,493
1.071%, July 4, 2013 ......................... 1,775,000 1,765
1.103%, August 1, 2013 ....................... 1,750,000 1,739
1.172%, August 29, 2013 . . . ................... 1,085,000 1,077
1.136%, September 26, 2013 ................... 500,000 496
1.08%, October 24, 2013 . . . ................... 750,000 743
1.072%, November 21, 2013 ................... 500,000 495
1.116%, December 19, 2013 ................... 500,000 495
25,504,000 25,415
Canadian Wheat Board: 12.85%
0.999%, January 31, 2013 . . ................... 8,090,000 8,083
0.979%, February 11, 2013 . . ................... 1,000,000 999
0.981%, February 25, 2013 . . ................... 2,500,000 2,496
11,590,000 11,578
Manitoba Treasury Bill: 1.11%
1.022%, January 2, 2013 . . . ................... 500,000 500
1.021%, January 9, 2013 . . . ................... 500,000 500
1,000,000 1,000
Province of British Columbia: 10.99%
1.16%, January 2, 2013 ....................... 250,000 250
1.018%, January 21, 2013 . . ................... 500,000 500
1.109%, March 12, 2013 . . . ................... 350,000 349
1.12%, March 18, 2013 ....................... 1,000,000 998
1.07%, March 21, 2013 ....................... 1,000,000 998
1.13%, April 24, 2013 ......................... 1,000,000 996
1.14%, June 12, 2013 ........................ 500,000 497
1.12%, June 28, 2013 ........................ 1,350,000 1,343
1.19%, July 3, 2013 .......................... 1,000,000 994
1.149%, July 8, 2013 ......................... 1,000,000 994
1.099%, July 10, 2013 ........................ 500,000 497
1.17%, October 18, 2013 . . . ................... 500,000 495
1.18%, October 21, 2013 . . . ................... 1,000,000 990
9,950,000 9,901
The accompanying notes are an integral part of these financial statements.
Principal
Amount
Cost and
Value
(CAD) (CAD 000s)
Province of Manitoba: 2.66%
1.017%, January 16, 2013 ..................... $ 1,000,000 $ 999
1.021%, January 30, 2013 ..................... 1,400,000 1,399
2,400,000 2,398
Province of New Brunswick: 1.38%
1.021%, January 10, 2013 ..................... 750,000 750
1.017%, January 15, 2013 ..................... 500,000 500
1,250,000 1,250
Total Treasury Bills ........................... 51,694,000 51,542
GOVERNMENT BONDS: 42.33%
Canada Housing Trust, Floating Rate Note: 8.01%
June 15, 2013 . . ............................ 7,225,000 7,216
Canada Housing Trust, Secured Note: 1.12%
1.054%, June 15, 2013 ....................... 1,000,000 1,012
Financement Quebec, Floating Rate Note: 1.11%
October 14, 2015 ............................ 1,000,000 996
Government of Canada: 10.00%
1.032%, March 1, 2013 ....................... 9,000,000 9,011
Hydro–Quebec, Floating Rate Note: 2.23%
February 20, 2014 . . . ........................ 2,000,000 2,012
National Housing Association, Floating Rate Note: 2.05%
October 1, 2014 . ............................ 1,840,913 1,841
Province of New Brunswick: 1.15%
1.236%, June 28, 2013 ....................... 1,000,000 1,035
Province of Ontario: 1.12%
1.227%, April 17, 2013 ........................ 1,000,000 1,012
Province of Ontario, Floating Rate Note: 8.88%
April 2, 2013 ............................... 8,000,000 8,000
Province of Quebec, Floating Rate Note: 6.66%
December 10, 2013 . . ........................ 6,000,000 6,000
Total Government Bonds ........................ 38,065,913 38,135
TERM DEPOSITS: 0.39%
Royal Bank of Canada, Term Deposit: 0.39%
0.97%, January 2, 2013 ....................... 355,000 355
Total Term Deposits ........................... 355,000 355
TOTAL INVESTMENTS: 99.93% ................... $90,114,913 90,032
OTHER ASSETS, less liabilities: 0.07% ............. 64
TOTAL NET ASSETS: 100.00% ................... $90,096
Franklin Templeton Investments Funds 199

Franklin Templeton Treasury Bill Fund
STATEMENT OF INVESTMENTS As at December 31, 2012 (Continued)
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA ................................. 76.45 67.32
AA .................................. 10.00 13.46
A.................................... 11.15 6.25
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
The accompanying notes are an integral part of these financial statements.
200 Franklin Templeton Investments Funds

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
2012 2011
(CAD 000s) (CAD 000s)
Assets
Investment in securities — at fair value
Cash
$ 90,032 $ 103,853
Canadian
Receivables
6 1
Interest 157 245
Total assets
Liabilities
Payables
90,195 104,099
Capital units redeemed — 6
Management fees 52 68
Distributions to unitholders 47 39
Total liabilities 99 113
Net assets $ 90,096 $ 103,986
Total net assets per series (CAD 000s)
Series A $70,882 $95,377
Series F 4,607 4,993
Series I 417 222
Series O 14,190 3,394
Number of units outstanding (Note 3)
Series A 7,088,126 9,537,675
Series F 460,715 499,331
Series I 41,732 22,205
Series O 1,419,026 339,378
Net assets per unit — CAD
Series A $10.00 $10.00
Series F 10.00 10.00
Series I 10.00 10.00
Series O 10.00 10.00
Cost of investments held (CAD 000s) $90,032 $103,853
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
Franklin Templeton Treasury Bill Fund
(Signed) GHION SHEWANGZAW
Director
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(CAD 000s) (CAD 000s)
Investment income
Interest $ 1,222 $ 1,524
Total investment income
Expenses
1,222 1,524
Management fees (Note 4(a)) 696 905
Transfer agent fees (Note 4(c)) 450 580
Custodian fees 13 16
Legal fees 2 2
Audit fees 21 19
Unitholder reporting costs 15 17
Independent review committee fees 1 1
Registration fees 24 24
Other expenses (Note 7) 93 92
Total expenses 1,315 1,656
Expenses waived/paid by Manager (Note 6) (618) (751)
Net expenses 697 905
Net investment income (loss) 525 619
Increase (decrease) in net assets from operations $ 525 $ 619
Increase (decrease) in net assets from operations
per series (CAD 000s)
Series A $339 $494
Series F 32 36
Series I 1 1
Series O 153 88
Increase (decrease) in net assets from operations
per unit
Series A $0.05 $0.05
Series F 0.07 0.07
Series I 0.06 0.06
Series O 0.13 0.13
Franklin Templeton Investments Funds 201

Franklin Templeton Treasury Bill Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in CAD 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 525 $ 619 $ 339 $ 494 $ 32 $ 36
Distributions to unitholders
From net investment income (524) (619) (338) (494) (32) (36)
From capital gains — — — — — —
From return of capital — — — — — —
(524) (619) (338) (494) (32) (36)
Capital unit transactions
Subscriptions 44,578 43,211 20,769 35,692 1,253 3,338
Reinvestments 511 628 336 493 33 36
Redemptions (58,980) (84,612) (45,601) (66,838) (1,672) (3,538)
(13,891) (40,773) (24,496) (30,653) (386) (164)
Increase (decrease) in net assets for the period (13,890) (40,773) (24,495) (30,653) (386) (164)
Net assets — beginning of period 103,986 144,759 95,377 126,030 4,993 5,157
Net assets — end of period $ 90,096 $ 103,986 $ 70,882 $ 95,377 $ 4,607 $ 4,993
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 1 $ 1 $ 153 $ 88
Distributions to unitholders
From net investment income (1) (1) (153) (88)
From capital gains — — — —
From return of capital — — — —
(1) (1) (153) (88)
Capital unit transactions
Subscriptions 250 176 22,306 4,005
Reinvestments 1 1 141 98
Redemptions (56) (216) (11,651) (14,020)
195 (39) 10,796 (9,917)
Increase (decrease) in net assets for the period 195 (39) 10,796 (9,917)
Net assets — beginning of period 222 261 3,394 13,311
Net assets — end of period $ 417 $ 222 $ 14,190 $ 3,394
The accompanying notes are an integral part of these financial statements.
202 Franklin Templeton Investments Funds

STATEMENT OF INVESTMENTS As at December 31, 2012
Franklin Templeton U.S. Money Market Fund
Principal
Amount
Cost and
Value
(USD) (USD 000s)
BANKER’S ACCEPTANCES: 7.87%
JPMorgan Chase Bank NA: 7.87%
0.23%, January 3, 2013 ....................... $ 216,000 $ 216
0.25%, January 7, 2013 ....................... 699,000 699
0.23%, January 17, 2013 . ..................... 244,000 244
0.27%, March 13, 2013 ....................... 131,000 131
0.27%, April 1, 2013 . ........................ 158,000 157
0.27%, April 2, 2013 . ........................ 156,000 156
0.27%, April 9, 2013 . ........................ 142,000 142
Total Banker’s Acceptances ..................... 1,746,000 1,745
COMMERCIAL PAPER: 60.50%
Bank of Nova Scotia: 6.76%
0.205%, January 16, 2013 ..................... 1,500,000 1,500
Chevron Corp.: 6.76%
0.13%, January 3, 2013 ....................... 1,500,000 1,500
Government of Denmark: 9.01%
0.09%, January 3, 2013 ....................... 2,000,000 2,000
Johnson & Johnson: 6.76%
0.06%, January 7, 2013 ....................... 1,500,000 1,500
Nestle Finance International Ltd.: 2.25%
0.06%, January 8, 2013 ....................... 500,000 500
Province of British Columbia: 6.76%
0.107%, January 4, 2013 . ..................... 1,500,000 1,500
Province of Ontario: 8.68%
0.10%, January 2, 2013 ....................... 1,275,000 1,275
0.14%, January 7, 2013 ....................... 650,000 650
1,925,000 1,925
Total Capital Canada Ltd.: 6.76%
0.14%, January 23, 2013 . ..................... 1,500,000 1,500
Toyota Motor Credit Corp.: 6.76%
0.21%, January 7, 2013 ....................... 1,500,000 1,500
Total Commercial Paper ........................ 13,425,000 13,425
GOVERNMENT BONDS: 18.03%
International Finance Corp.: 9.02%
0.09%, January 4, 2013 ....................... 2,000,000 2,000
Inter–American Development Bank: 9.01%
0.12%, January 17, 2013 . ..................... 2,000,000 2,000
Total Government Bonds ........................ 4,000,000 4,000
TERM DEPOSITS: 13.63%
Federal Farm Credit Discount Notes: 9.46%
January 2, 2013 ............................. 2,100,000 2,100
The accompanying notes are an integral part of these financial statements.
Principal
Amount
Cost and
Value
(USD) (USD 000s)
Freddie Mac Discount Notes: 4.17%
January 3, 2013 ............................. $ 410,000 $ 410
January 7, 2013 ............................. 515,000 515
925,000 925
Total Term Deposits ........................... 3,025,000 3,025
TOTAL INVESTMENTS: 100.03% ................. $22,196,000 22,195
OTHER ASSETS, less liabilities: (0.03%) ............ (6)
TOTAL NET ASSETS: 100.00% ................... $22,189
Bond Ratings*
2012 2011
%of
Net Assets
%of
Net Assets
AAA .................................. 78.53 56.20
AA ................................... — 21.68
A..................................... 7.87 12.99
* Excluding cash and overnight term deposits.
Source: Standard & Poor’s, and/or composite of Moody’s, Standard & Poor’s and
Fitch ratings.
Franklin Templeton Investments Funds 203

STATEMENTS OF NET ASSETS
As at December 31, 2012 and 2011
Franklin Templeton U.S. Money Market Fund
2012 2011
(USD 000s) (USD 000s)
Assets
Investment in securities — at fair value $ 22,195 $ 22,364
Other assets (Note 8) 8 11
Total assets
Liabilities
Payables
22,203 22,375
Capital units redeemed — 2
Management fees 14 13
Distributions to unitholders — 12
Total liabilities 14 27
Net assets $ 22,189 $ 22,348
Total net assets per series (USD 000s)
Series A $8,211 $5,498
Series F 986 885
Series I 5 255
Series O 12,987 15,710
Number of units outstanding (Note 3)
Series A 821,031 549,765
Series F 98,561 88,470
Series I 500 25,492
Series O 1,298,811 1,571,120
Net assets per unit — USD
Series A $10.00 $10.00
Series F 10.00 10.00
Series I 10.00 10.00
Series O 10.00 10.00
Cost of investments held (USD 000s) $22,195 $22,364
Signed on behalf of Franklin Templeton Investments Corp.
(Signed) DON REED
Director
(Signed) GHION SHEWANGZAW
Director
STATEMENTS OF OPERATIONS
For the periods ended December 31, 2012 and 2011
2012 2011
(USD 000s) (USD 000s)
Investment income
Interest $ 31 $ 48
Total investment income
Expenses
31 48
Management fees (Note 4(a)) 73 83
Transfer agent fees (Note 4(c)) 20 25
Custodian fees — 1
Legal fees 1 —
Audit fees 21 18
Unitholder reporting costs 4 3
Independent review committee fees 1 1
Registration fees 22 22
Other expenses (Note 7) 15 9
Total expenses 157 162
Expenses waived/paid by Manager (Note 6) (250) (291)
Net expenses (recovery) (93) (129)
Net investment income (loss) 124 177
Increase (decrease) in net assets from operations $ 124 $ 177
Increase (decrease) in net assets from operations
per series (USD 000s)
Series A $6 $7
Series F 3 3
Series I —* —*
Series O
Increase (decrease) in net assets from operations
per unit
115 167
Series A $0.01 $0.01
Series F 0.03 0.04
Series I 0.02 0.02
Series O
* Amount rounded to zero in the nearest thousand.
0.08 0.08
The accompanying notes are an integral part of these financial statements.
204 Franklin Templeton Investments Funds

Franklin Templeton U.S. Money Market Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the periods ended December 31, 2012 and 2011
(in USD 000s)
All Series Series A Series F
2012 2011 2012 2011 2012 2011
Increase (decrease) in net assets from operations $ 124 $ 177 $ 6 $ 7 $ 3 $ 3
Distributions to unitholders
From net investment income (123) (177) (6) (7) (3) (3)
From capital gains — — — — — —
From return of capital — — — — — —
(123) (177) (6) (7) (3) (3)
Capital unit transactions
Subscriptions 15,288 14,767 6,054 5,384 307 394
Reinvestments 135 182 6 7 4 3
Redemptions (15,583) (25,526) (3,347) (7,339) (210) (540)
(160) (10,577) 2,713 (1,948) 101 (143)
Increase (decrease) in net assets for the period (159) (10,577) 2,713 (1,948) 101 (143)
Net assets — beginning of period 22,348 32,925 5,498 7,446 885 1,028
Net assets — end of period $ 22,189 $ 22,348 $ 8,211 $ 5,498 $ 986 $ 885
Series I Series O
2012 2011 2012 2011
Increase (decrease) in net assets from operations $ —* $ —* $ 115 $ 167
Distributions to unitholders
From net investment income — — (114) (167)
From capital gains — — — —
From return of capital — — — —
— — (114) (167)
Capital unit transactions
Subscriptions 5 250 8,922 8,739
Reinvestments — — 125 172
Redemptions (255) — (11,771) (17,647)
(250) 250 (2,724) (8,736)
Increase (decrease) in net assets for the period (250) 250 (2,723) (8,736)
Net assets — beginning of period 255 5 15,710 24,446
Net assets — end of period $ 5 $ 255 $ 12,987 $ 15,710
* Amount rounded to zero in the nearest thousand.
The accompanying notes are an integral part of these financial statements.
Franklin Templeton Investments Funds 205

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011
1. Organization
(a) Inception and Financial Reporting Dates
The Franklin Templeton Investments Funds (the “Funds”) are open-ended mutual fund trusts and unit trusts governed by the laws of
Ontario pursuant to a Master Declaration of Trust, with inception dates as follows:
Templeton Funds
Templeton Asian Growth Fund ............................................................................... December 23, 2010
Templeton Canadian Balanced Fund .......................................................................... September 14, 1994
Templeton Canadian Stock Fund ............................................................................. January 3, 1989
Templeton EAFE Developed Markets Fund ..................................................................... January 2, 1994
Templeton Emerging Markets Fund ........................................................................... September 20, 1991
Templeton Frontier Markets Fund ............................................................................ July 11, 2011
Templeton Global Balanced Fund (formerly Templeton Global Income Fund) .......................................... December 1, 2005
Templeton Global Bond Fund ................................................................................ June 7, 1988
Templeton Global Smaller Companies Fund .................................................................... January 3, 1989
Templeton International Stock Fund ........................................................................... January 3, 1989
Franklin Funds
Franklin Flex Cap Growth Fund .............................................................................. March 27, 1997
Franklin High Income Fund ................................................................................. February 7, 2003
Franklin Strategic Income Fund .............................................................................. February 7, 2003
Franklin U.S. Core Equity Fund .............................................................................. July 25, 2007
Franklin U.S. Rising Dividends Fund .......................................................................... December 1, 1984
Franklin World Growth Fund ................................................................................. February 27, 2008
Bissett Funds
Bissett All Canadian Focus Fund ............................................................................. September 3, 2004
Bissett Bond Fund ........................................................................................ August 1, 1986
Bissett Canadian Balanced Fund ............................................................................. August 1, 1991
Bissett Canadian Dividend Fund .............................................................................. December 12, 2003
Bissett Canadian Equity Fund ................................................................................ March 1, 1983
Bissett Canadian High Dividend Fund ......................................................................... June 30, 1996
Bissett Canadian Short Term Bond Fund ....................................................................... December 12, 2003
Bissett Corporate Bond Fund ................................................................................ December 11, 2006
Bissett Dividend Income Fund ............................................................................... May 31, 1988
Bissett Focus Balanced Fund ................................................................................ January 5, 2009
Bissett Microcap Fund ..................................................................................... August 19, 1997
Bissett Small Cap Fund ..................................................................................... January 2, 1992
Bissett Strategic Income Fund ............................................................................... December 19, 2011
Bissett U.S. Focus Fund .................................................................................... February 27, 2008
Mutual Series Funds
Mutual Beacon Fund ...................................................................................... December 31, 1996
Mutual Global Discovery Fund (formerly Mutual Discovery Fund) .................................................... February 7, 2003
Franklin Templeton Funds
Franklin Templeton Canadian Core Equity Fund ................................................................. June 23, 2008
Franklin Templeton Canadian Large Cap Fund .................................................................. June 23, 2008
Franklin Templeton Global Blend Fund ........................................................................ January 5, 2009
Franklin Templeton Money Market Fund ....................................................................... August 1, 1991
Franklin Templeton Treasury Bill Fund ........................................................................ February 29, 1988
Franklin Templeton U.S. Money Market Fund ................................................................... May 1, 2000
Each of the Funds may offer one or more series of units designated as Series A, F, I, O, R, S, T and T USD. Each Series differs by its initial
sales load, contingent deferred sales charges, management fees and initial minimum investment amount. Series T and T USD have the
same features except that the latter is offered in USD only.
Bissett Canadian Balanced Fund, Franklin Templeton Global Blend Fund and Bissett Strategic Income Fund invest in mutual funds
(“Underlying Funds”) managed by Franklin Templeton Investments Corp. (the “Manager”), an indirectly wholly owned subsidiary of Franklin
Resources Inc. (“FRI”), a United States Securities and Exchange Commission (SEC) registered company listed on the New York Stock
Exchange.
206 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
1. Organization (Continued)
Effective February 11, 2010, each of Templeton International Stock Fund, Templeton Global Balanced Fund and Templeton Global Smaller
Companies Fund may invest up to 7.5% of its net assets in Templeton China Opportunities Fund (“TCOF”), a sub-fund of Franklin Templeton
Selected Markets Funds (“FTSMF”), an open-end investment company organized under the laws of Luxembourg as a Société d’Investissement
à Capital Variable. TCOF is managed by Templeton Investment Counsel, LLC, an affiliate of the Manager. TCOF’s portfolio will be
managed in accordance with the investment restrictions applicable to a UCITS, an undertaking for collective investment in transferable
securities, which are substantially similar to those that govern each Fund in Canada. The principal distributor and administrator agent of
FTSMF is an affiliate of the Manager.
The financial statements of each Fund include the Statement of Investments as at December 31, 2012, and the Statements of Net Assets
as at December 31, 2012 and December 31, 2011, if the Fund was in existence at the time. The Statements of Operations and Changes in
Net Assets for each Fund are for the years ended December 31, 2012 and 2011, except for Funds established during either period, in
which case the period is from commencement of operations (inception date) to December 31.
(b) Fund Events
Effective June 18, 2012, Templeton Global Income Fund was renamed Templeton Global Balanced Fund.
Effective June 18, 2012, Mutual Discovery Fund was renamed Mutual Global Discovery Fund.
Bissett Strategic Income Fund was launched on December 19, 2011 and commenced offering of Series A, F, I and O units on
December 29, 2011.
Templeton Frontier Markets Fund was launched on July 11, 2011 and commenced offering of Series O units on July 18, 2011.
Effective June 24, 2011, Bissett Income Fund was renamed Bissett Canadian High Dividend Fund.
On June 20, 2011, Franklin World Growth Fund commenced the offering of Series A and F units in CAD and USD, as well as Series T units
in CAD on June 24, 2011.
Effective June 24, 2011, following regulatory and unitholder approvals, Bissett Multinational Growth Fund was merged with Franklin World
Growth Fund. For details of the merger refer to Note 14 (c).
2. Summary of Significant Accounting Policies
These financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). The significant
accounting policies are as follows:
(a) Designation of financial assets and liabilities — For the purpose of measuring and recognizing financial assets and liabilities, the
following designations have been made: All investments, including derivatives, if any, are initially recognized at fair value and are
designated as held for trading. Accrued interest, distributions and dividends receivable, amounts receivable for capital units sold and
securities sold, and other assets are designated as loans and receivables and reported at cost or amortized cost. Amounts payable for
securities purchased and capital units redeemed, management fees payable, distributions payable, accrued expenses and other
liabilities, are designated as other financial liabilities and reported at amortized cost.
(b) Valuation of investments — The Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3855, “Financial
Instruments — Recognition and Measurement”, requires that the fair value of financial instruments traded in active markets be
measured at closing bid price for long positions and closing ask price for short positions for financial statement reporting purposes
(“net assets”). The Canadian Securities Administrators allow investment funds to calculate the daily net asset value for the purpose of
processing unitholder transactions using the last traded price for the day as fair value of financial instruments traded in an active
market, which is referred to as a “trading net asset value”. As a result, the net assets per unit for financial reporting purposes may
differ from the trading net asset value. This measurement difference does not affect the Funds’ unitholder transactions. The Funds’
trading net asset values are disclosed in Note 13 (a).
Franklin Templeton Investments Funds 207

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
2. Summary of Significant Accounting Policies (Continued)
Securities listed on a securities exchange and those traded on the over-the-counter market are valued at the closing bid price for long
positions and closing ask price for short positions on the valuation day. The Funds have procedures to determine the fair value of
securities and other financial instruments for which market prices are not readily available or which may not be reliably priced. Under
these fair valuation procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or
liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine its fair
value. The Funds may also use an income-based valuation approach in which the anticipated future cash flows of the investment are
discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of
the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the
values that would have been used had an active market existed.
Investments in Underlying Funds are made in Series O units of the Underlying Fund and valued at the respective closing net asset value.
Investments in TCOF are made in Series F1, denominated in USD, and valued at the CAD equivalent of the closing net asset value on
valuation day.
Warrants not traded in an active market are valued using a recognized option pricing model which include factors such as the terms of
the warrant, time value of money and volatility inputs that are significant to such valuation.
All security valuation techniques are periodically reviewed by the Valuation Committee of the Manager and are accepted by the Board
of Directors of the Manager.
(c) Derivatives — Certain Funds may invest in derivatives in order to manage risk or gain exposure to various other investments or
markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial
investment that is smaller than would normally be required to have similar response to changes in market factors, and require or
permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations
under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which
expose the applicable Funds to gains and losses in excess of the amounts shown on the Statement of Net Assets. Realized gain and
loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.
The applicable Funds’ investments in over-the-counter (OTC) derivatives are subject to the terms of International Swaps and
Derivatives Association Master Agreements and other related agreements between the Fund and certain derivative counterparties.
These agreements contain various provisions, including but not limited to collateral requirements, events of default, requirements for
the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. Should a Fund fail to
meet any of these provisions, the derivative counterparty has the right to terminate the derivative contract and require immediate
payment by the Fund for those OTC derivatives with that particular counterparty that are in a net liability position.
(i) Foreign/Forward exchange contracts — When a Fund purchases or sells foreign securities, it may enter into foreign exchange
contracts to minimize foreign exchange risk from the trade date to the settlement date of the transactions. A foreign exchange
contract is an agreement between two parties to exchange different currencies at an agreed upon exchange rate at a future date.
A Fund may also enter into forward exchange contracts to hedge against fluctuations in foreign exchange rates. These contracts
are valued as the difference between the contractual forward foreign exchange rates and the forward bid rate for currency held
and forward ask rate for currency sold short at the reporting date. The unrealized gains or losses on the contracts are included in
the Statement of Net Assets. Realized gains and losses and changes in unrealized gains and losses are included in the Statement
of Operations.
(ii) Options — Options are contracts entitling the holder to purchase or sell a specified item at a specified price, during a specified
period or on a specified date. Options purchased are recorded as investments; options written (sold) are recorded as liabilities on
the Statement of Net Assets. Any gain or loss resulting from revaluation is included in unrealized appreciation (depreciation) in
value of investments on the Statement of Operations. Upon closing of an option other than by exercise, which results in a cash
settlement, the difference between the premium (original option value) and the settlement proceeds is included in income (loss)
from derivatives on the Statement of Operations. When securities are acquired or delivered upon exercise, the acquisition cost or
208 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
2. Summary of Significant Accounting Policies (Continued)
sale proceeds are adjusted by the amount of the premium. When an option is closed, the difference between the premium and
the cost to close the position is included in income (loss) from derivatives on the Statement of Operations, as is the premium for
options written or purchased when an option expires.
(iii) Equity-linked notes — Certain Funds may invest in equity-linked securities. Equity-linked notes are hybrid financial instruments
that generally combine both debt and equity characteristics into a single security. Income received from equity-linked notes is
recorded in dividends received in the Statement of Operations and may be based on the performance of an underlying security,
an equity index, or an option position.
(iv) Credit default swaps — Certain Funds may enter into credit default swap contracts, primarily to manage and/or gain exposure to
credit risk. A credit default swap is an agreement between the fund and a counterparty whereby the buyer of the contract receives
credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. The underlying
referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, or a tranche of a credit index. In the
event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default
swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of
the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount.
Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has
occurred. Such periodic payments paid or received are accrued daily and are included in the Statement of Operations in Income
(loss) from derivatives. The change in value of a credit default swap contract is included in the Statement of Net Assets as unrealized
gain (loss) on derivatives. When the credit default swap contracts are closed out, gains or losses are realized and included in
the Statements of Operations in Net Realized Gain (Loss) on investments and derivatives. Pursuant to the terms of the credit
default swap contract, cash or securities may be required to be deposited as collateral.
(d) Payment-in-kind bonds — Certain Funds may invest in Payment-in-kind (PIK) bonds. PIK securities are bonds or preferred shares
where income may be received in the form of additional bonds or preferred shares. The coupon rate shown represents the rate at
period end. These bonds typically have interest receivable included in the price quotation obtained each day. Accordingly, that portion
of the quote representing interest income has been identified and reclassified as interest income on the Statement of Operations. In
the event that interest income from the additional bonds is not expected to be realized, a reserve against income is established.
(e) Participatory notes — Certain Funds may invest in Participatory Notes (P-Notes). P-Notes are promissory notes that are designed to
offer a return linked to the performance of a particular underlying equity security or index. P-Notes are issued by banks or brokerdealers
and allow the fund to gain exposure to common stocks in markets where direct investment is not allowed. P-Notes are not
listed and are valued utilizing the price of the underlying equity security based upon the terms of the P-Notes. Income received from
P-Notes is recorded in dividend income in the Statement of Operations.
(f) Valuation of series — A separate net assets per unit is calculated for each series of units in each Fund. The net assets of a series is
computed by calculating the series’ proportionate share of the assets and liabilities of the Fund common to all series, adjusted for the
assets and liabilities of the Fund attributable only to that series. Expenses directly attributable to a series are charged to that series.
Other expenses, investment income, realized and unrealized capital and foreign exchange gains and losses are allocated
proportionately to each series based upon the relative net assets of each series, except for items that can be specifically attributed to
one or more series.
(g) Transaction costs — Transaction costs, such as brokerage commissions, incurred on the purchase and sale of a security are charged
as an expense for the period and shown as transaction costs on the Statements of Operations.
The Funds that invest in Underlying Funds do not incur transaction costs on those transactions.
(h) Security transactions, investment income, expenses and distributions — Security transactions are recorded on the trade date. Realized
and unrealized gains or losses on security transactions are determined on an average cost basis. Interest income and estimated
expenses are accrued daily. Dividend income, distributions received from Underlying Funds and distributions to unitholders are
recorded on the ex-dividend date.
Franklin Templeton Investments Funds 209

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
2. Summary of Significant Accounting Policies (Continued)
(i) Taxes — Certain Funds qualify as mutual fund trusts within the meaning of the Income Tax Act (Canada) (the “Act”). Accordingly,
these Funds are entitled to a capital gains refund and, as a result, income taxes payable on net realized capital gains are refundable
on a formula basis when units of the Fund are redeemed. In addition, such Funds are not subject to alternative minimum tax or taxes
on prescribed investments and certain designated income as defined under Part X.2 and Part XII.2, respectively of the Act.
Each year, each Fund distributes sufficient net taxable income and net capital gains for the tax calendar year so that the Fund does
not pay tax under Part 1 of the Act.
Templeton Asian Growth Fund, Templeton Frontier Markets Fund, Bissett U.S. Focus Fund, Franklin Templeton Canadian Core Equity
Fund and Franklin Templeton Global Blend Fund are not expected to qualify as mutual fund trusts at the time of filing the financial
statements.
Franklin Templeton U.S. Money Market Fund prepares its financial statements in U.S. dollars, but is taxable on its income and net
realized capital gains calculated on a Canadian dollar basis.
Certain Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign
currency transactions in the foreign jurisdictions in which they invest. Foreign taxes, if any, are recorded based on the tax regulations
and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, the Fund records
an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
(j) Foreign currency translation — The functional currency of the Funds is CAD, except for Franklin Templeton U.S. Money Market Fund
whose functional currency is USD. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated
into the functional currency based on the exchange rate on the valuation date. Purchases and sales of securities and income items
denominated in foreign currencies are translated into the functional currency at the exchange rate in effect on the transaction date.
When an exchange rate is unavailable or unreliable, it will be determined using procedures established and accepted by the Board of
Directors of the Manager.
Realized foreign exchange gains or losses arise from sales of foreign currencies, changes between the trade date and settlement date
values on security and capital transactions, and the difference between the recorded amounts of foreign currency denominated dividends,
interest, withholding taxes, and U.S. short-term holdings, and the functional currency equivalent of the amounts actually
received or paid. These gains or losses are reported on the Statements of Operations as net realized and/or unrealized foreign
exchange gain (loss).
(k) Related party transactions — All related party transactions occur in the normal course of operations and are recorded at an amount of
consideration agreed to by the parties.
(l) Increase (decrease) in net assets from operations per unit — This calculation is based on the increase (decrease) in net assets from
operations attributable to each series divided by the weighted average number of units of that series outstanding during the period.
(m) Accounting estimates — The preparation of financial statements in accordance with Canadian GAAP may require the Manager to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the amounts of income and expense reported during the periods. Actual results may differ from those estimates.
The key area where estimates and or assumptions are applied is in the determination of fair values of financial instruments not traded
on an active market as discussed in note 2(b).
3. Unitholders’ Capital
The authorized capital of the Funds consists of an unlimited number of units without par value. The issued capital of each Fund is comprised
of its net assets attributable to unitholders. Each Fund’s capital is managed in accordance with its respective investment objectives
and policies, and there are no externally imposed restrictions in relation to each Fund’s units. Changes in capital during the period are
reflected in the Statements of Changes in Net Assets for each Fund. The Funds have no specific restrictions or capital requirements on the
subscriptions and redemption of units, other than minimum subscription requirements. The Funds endeavour to manage capital by maintaining
a strong capital base to support the investment activities of each of the Funds while maintaining sufficient liquidity to meet
210 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
redemptions. Unitholders are entitled to distributions when declared, which are then reinvested in additional units of the Fund or, at the
option of the unitholder, paid in cash. Units of the Funds are redeemable at the option of the unitholders in accordance with the provisions
in the Declarations of Trust.
Changes in issued capital stock are summarized as follows:
Templeton Asian Growth Fund
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 22,023,946 515,000
Subscriptions 21,134,498 23,261,971
Reinvestments 1,314,767 —
Redemptions (11,469,492) (1,753,025)
Outstanding units — ending 33,003,719 22,023,946
Templeton Canadian Balanced Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 10,732,626 10,800,897 1,886,338 2,257,741 683,249 849,574
Subscriptions 629,491 2,341,218 19,638 24,929 32,182 45,234
Reinvestments 79,598 132,553 14,904 24,171 5,563 8,776
Redemptions (2,621,437) (2,542,042) (333,639) (420,503) (128,656) (220,335)
Outstanding units — ending 8,820,278 10,732,626 1,587,241 1,886,338 592,338 683,249
Series T
December 31, 2012 December 31, 2011
Outstanding units — beginning 352,034 220,716
Subscriptions 12,764 147,904
Reinvestments 10,706 13,886
Redemptions (161,591) (30,472)
Outstanding units — ending 213,913 352,034
Templeton Canadian Stock Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 8,246,266 9,679,680 93,238 103,342 541,400 606,249
Subscriptions 204,584 353,981 5,416 15,346 30,721 48,311
Reinvestments — — — — — —
Redemptions (1,832,633) (1,787,395) (13,171) (25,450) (120,234) (113,160)
Outstanding units — ending 6,618,217 8,246,266 85,483 93,238 451,887 541,400
Templeton EAFE Developed Markets Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 854,742 1,155,213 314,814 340,508 30,978,929 21,591,775
Subscriptions 38,046 56,148 2,451 43,515 9,169,306 16,775,182
Reinvestments 16,569 23,254 7,419 8,829 894,025 794,758
Redemptions (267,926) (379,873) (37,362) (78,038) (7,004,334) (8,182,786)
Outstanding units — ending 641,431 854,742 287,322 314,814 34,037,926 30,978,929
Franklin Templeton Investments Funds 211

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Templeton Emerging Markets Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 22,003,371 23,961,197 760,843 760,579 53,090 50,568
Subscriptions 1,095,055 1,359,388 168,710 145,031 3,763 1,801
Reinvestments 218,609 723,965 7,733 24,788 56 721
Redemptions (3,902,306) (4,041,179) (237,376) (169,555) (20,074) —
Outstanding units — ending 19,414,729 22,003,371 699,910 760,843 36,835 53,090
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 12,138,450 24,929,706
Subscriptions 7,397,677 5,313,964
Reinvestments 138,689 408,590
Redemptions (7,663,484) (18,513,810)
Outstanding units — ending 12,011,332 12,138,450
Templeton Frontier Markets Fund
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 654,315 —
Subscriptions 8,735,578 1,165,443
Reinvestments 245,201 —
Redemptions (1,019,571) (511,128)
Outstanding units — ending 8,615,523 654,315
Templeton Global Balanced Fund (formerly Templeton Global Income Fund)
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 623,331 483,660 156,944 214,048 277,921 169,498
Subscriptions 178,815 254,356 8,754 59,005 98,632 141,578
Reinvestments 10,420 14,007 1,463 2,761 5,978 7,438
Redemptions (109,211) (128,692) (43,894) (118,870) (24,090) (40,593)
Outstanding units — ending 703,355 623,331 123,267 156,944 358,441 277,921
Series S Series T Series T USD
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 73,167 333 8,879,078 9,211,998 1,847,554 2,018,988
Subscriptions 826 69,803 510,847 895,784 67,451 193,539
Reinvestments 1,085 3,688 505,347 665,114 87,510 128,595
Redemptions (12,078) (657) (1,806,693) (1,893,818) (451,147) (493,568)
Outstanding units — ending 63,000 73,167 8,088,579 8,879,078 1,551,368 1,847,554
212 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Templeton Global Bond Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 35,874,074 18,568,718 6,574,815 3,530,963 767,228 35,856
Subscriptions 14,902,745 23,390,130 5,073,779 5,165,130 1,451,718 855,315
Reinvestments 1,424,888 1,076,569 241,577 185,075 46,476 17,235
Redemptions (8,666,745) (7,161,343) (3,185,921) (2,306,353) (295,427) (141,178)
Outstanding units — ending 43,534,962 35,874,074 8,704,250 6,574,815 1,969,995 767,228
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 86,990,340 69,896,618
Subscriptions 35,041,919 38,261,274
Reinvestments 3,820,073 3,350,998
Redemptions (22,447,064) (24,518,550)
Outstanding units — ending 103,405,268 86,990,340
Templeton Global Smaller Companies Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 25,268,861 31,053,674 1,926,382 2,616,066 102,830 96,770
Subscriptions 972,669 1,865,944 274,542 489,735 8,491 7,624
Reinvestments 272,019 197,609 18,805 14,580 1,508 831
Redemptions (6,986,632) (7,848,366) (817,336) (1,193,999) (6,002) (2,395)
Outstanding units — ending 19,526,917 25,268,861 1,402,393 1,926,382 106,827 102,830
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 21,503,923 20,842,160
Subscriptions 2,641,795 3,904,876
Reinvestments 225,211 165,372
Redemptions (7,906,890) (3,408,485)
Outstanding units — ending 16,464,039 21,503,923
Templeton International Stock Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 47,207,429 58,555,485 1,531,967 1,689,273 199,649 196,400
Subscriptions 1,394,846 1,800,029 124,181 322,945 9,091 —
Reinvestments 1,161,428 1,016,822 34,234 31,998 5,047 3,249
Redemptions (11,713,917) (14,164,907) (560,887) (512,249) — —
Outstanding units — ending 38,049,786 47,207,429 1,129,495 1,531,967 213,787 199,649
Franklin Templeton Investments Funds 213

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Templeton International Stock Fund (Continued)
Series O Series T
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 31,938,334 27,669,912 509,138 745,023
Subscriptions 2,725,090 8,099,667 12,639 26,620
Reinvestments 350,208 696,547 22,560 26,797
Redemptions (23,800,293) (4,527,792) (192,038) (289,302)
Outstanding units — ending 11,213,339 31,938,334 352,299 509,138
Franklin Flex Cap Growth Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 645,623 785,795 78,112 85,013 14,101,284 13,565,129
Subscriptions 69,540 57,926 42,994 49,502 9,375,328 9,187,932
Reinvestments 1,244 2,590 225 316 41,103 57,605
Redemptions (131,696) (200,688) (15,847) (56,719) (4,420,857) (8,709,382)
Outstanding units — ending 584,711 645,623 105,484 78,112 19,096,858 14,101,284
Franklin High Income Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 7,589,415 10,526,093 511,184 473,278 68,777 503
Subscriptions 3,224,551 1,761,802 260,661 187,154 24,911 66,325
Reinvestments 659,897 428,812 47,752 27,741 7,844 1,949
Redemptions (1,977,230) (5,127,292) (161,472) (176,989) (23,599) —
Outstanding units — ending 9,496,633 7,589,415 658,125 511,184 77,933 68,777
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 14,189,533 27,340,118
Subscriptions 1,037,710 6,337,573
Reinvestments 1,550,845 943,145
Redemptions (2,038,483) (20,431,303)
Outstanding units — ending 14,739,605 14,189,533
Franklin Strategic Income Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 4,410,425 3,681,101 346,028 385,332 13,280 503
Subscriptions 3,004,462 1,644,411 431,525 342,540 79,862 12,473
Reinvestments 197,714 185,771 19,872 20,433 1,438 304
Redemptions (1,215,061) (1,100,858) (113,677) (402,277) (1,031) —
Outstanding units — ending 6,397,540 4,410,425 683,748 346,028 93,549 13,280
214 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Franklin Strategic Income Fund (Continued)
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 67,732,822 60,846,865
Subscriptions 12,598,047 23,286,963
Reinvestments 3,236,242 4,078,491
Redemptions (26,255,364) (20,479,497)
Outstanding units — ending 57,311,747 67,732,822
Franklin U.S. Core Equity Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 358,127 328,962 11,793 2,481 15,490,002 15,937,513
Subscriptions 126,343 164,225 15,959 10,373 15,167,691 10,731,826
Reinvestments 2,802 2,471 242 84 162,952 110,732
Redemptions (153,807) (137,531) (504) (1,145) (13,247,582) (11,290,069)
Outstanding units — ending 333,465 358,127 27,490 11,793 17,573,063 15,490,002
Franklin U.S. Rising Dividends Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 444,315 303,301 88,339 65,793 17,955,289 13,514,578
Subscriptions 995,314 231,859 76,062 46,331 5,237,744 9,888,160
Reinvestments 15,746 6,971 1,689 1,375 245,509 285,488
Redemptions (147,708) (97,816) (27,360) (25,160) (4,932,157) (5,732,937)
Outstanding units — ending 1,307,667 444,315 138,730 88,339 18,506,385 17,955,289
Series T
December 31, 2012 December 31, 2011
Outstanding units — beginning 277,065 212,612
Subscriptions 222,440 124,632
Reinvestments 18,007 14,679
Redemptions (123,333) (74,858)
Outstanding units — ending 394,179 277,065
Franklin World Growth Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 1,363,444 — 501,377 — 23,275,782 22,917,743
Merger — 1,736,968 — 554,133 — 224,803
Subscriptions 45,719 17,149 3,007 1,210 7,619,089 8,368,871
Reinvestments 16,895 23,443 6,976 8,538 397,595 856,062
Redemptions (408,622) (414,116) (87,459) (62,504) (7,619,481) (9,091,697)
Outstanding units — ending 1,017,436 1,363,444 423,901 501,377 23,672,985 23,275,782
Franklin Templeton Investments Funds 215

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Franklin World Growth Fund (Continued)
Series T
December 31, 2012 December 31, 2011
Outstanding units — beginning 48,731 —
Merger — 51,024
Subscriptions 42 436
Reinvestments 1,008 1,482
Redemptions (19,500) (4,211)
Outstanding units — ending 30,281 48,731
Bissett All Canadian Focus Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 2,119,809 2,417,696 203,650 281,471 500 500
Subscriptions 242,315 288,297 13,584 32,176 2,588 —
Reinvestments 35,495 37,591 3,607 3,512 — —
Redemptions (618,451) (623,775) (35,420) (113,509) (2,588) —
Outstanding units — ending 1,779,168 2,119,809 185,421 203,650 500 500
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 19,199,895 16,888,363
Subscriptions 3,478,589 7,227,740
Reinvestments 279,613 344,290
Redemptions (9,219,012) (5,260,498)
Outstanding units — ending 13,739,085 19,199,895
Bissett Bond Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 14,477,746 14,538,701 2,381,924 2,453,795 39,683 37,531
Subscriptions 3,431,089 3,368,142 403,336 431,897 15,117 525
Reinvestments 513,681 538,881 88,191 94,342 1,805 1,627
Redemptions (4,008,486) (3,967,978) (421,677) (598,110) (3,453) —
Outstanding units — ending 14,414,030 14,477,746 2,451,774 2,381,924 53,152 39,683
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 166,833,171 173,577,762
Subscriptions 27,153,797 54,072,036
Reinvestments 6,049,690 7,349,845
Redemptions (43,453,278) (68,166,472)
Outstanding units — ending 156,583,380 166,833,171
216 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Bissett Canadian Balanced Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 13,381,968 14,572,339 3,070,519 3,285,632 2,367 184
Subscriptions 1,029,702 1,407,091 67,957 68,120 2,595 2,083
Reinvestments 135,766 604,241 33,515 139,339 28 100
Redemptions (3,026,805) (3,201,703) (333,514) (422,572) (2,183) —
Outstanding units — ending 11,520,631 13,381,968 2,838,477 3,070,519 2,807 2,367
Series O Series T
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 8,647,621 7,836,045 1,454,897 1,663,612
Subscriptions 2,159,201 1,650,580 93,593 118,150
Reinvestments 111,530 395,065 54,410 106,814
Redemptions (1,547,512) (1,234,069) (279,939) (433,679)
Outstanding units — ending 9,370,840 8,647,621 1,322,961 1,454,897
Bissett Canadian Dividend Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 19,224,175 16,286,937 1,067,151 902,624 22,852,220 9,730,886
Subscriptions 5,080,905 6,258,665 383,041 366,025 15,107,145 19,776,863
Reinvestments 520,807 382,773 28,916 20,981 578,253 414,784
Redemptions (3,966,480) (3,704,200) (223,638) (222,479) (16,662,668) (7,070,313)
Outstanding units — ending 20,859,407 19,224,175 1,255,470 1,067,151 21,874,950 22,852,220
Bissett Canadian Equity Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 6,493,278 6,841,324 2,900,232 2,918,816 11,896 7,655
Subscriptions 462,861 546,381 109,781 81,716 2,160 3,282
Reinvestments 105,672 522,698 50,536 230,669 245 959
Redemptions (1,493,535) (1,417,125) (354,928) (330,969) (1,032) —
Outstanding units — ending 5,568,276 6,493,278 2,705,621 2,900,232 13,269 11,896
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 14,029,456 13,908,192
Subscriptions 2,720,346 2,034,794
Reinvestments 228,148 1,136,875
Redemptions (5,029,425) (3,050,405)
Outstanding units — ending 11,948,525 14,029,456
Franklin Templeton Investments Funds 217

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Bissett Canadian High Dividend Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 22,853,486 21,363,963 3,370,031 3,228,311 92,127 2,659
Subscriptions 10,316,215 5,184,364 757,476 492,018 219,875 90,139
Reinvestments 1,576,297 829,073 208,479 119,376 7,788 830
Redemptions (4,667,109) (4,523,914) (292,672) (469,674) (176,180) (1,501)
Outstanding units — ending 30,078,889 22,853,486 4,043,314 3,370,031 143,610 92,127
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 9,586,215 8,920,386
Subscriptions 4,208,305 5,180,379
Reinvestments 718,615 464,107
Redemptions (4,310,701) (4,978,657)
Outstanding units — ending 10,202,434 9,586,215
Bissett Canadian Short Term Bond Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 11,615,013 13,173,783 744,400 835,096 23,891,038 9,616,843
Subscriptions 2,992,226 3,862,251 211,298 441,695 15,615,551 16,386,013
Reinvestments 296,408 311,642 18,218 21,051 824,173 540,139
Redemptions (4,426,892) (5,732,663) (391,144) (553,442) (11,104,652) (2,651,957)
Outstanding units — ending 10,476,755 11,615,013 582,772 744,400 29,226,110 23,891,038
Bissett Corporate Bond Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 4,393,049 4,189,318 184,094 118,127 2,861 20,000
Subscriptions 2,120,003 1,274,450 106,489 106,653 3,956 2,358
Reinvestments 171,511 144,232 6,348 3,651 188 15
Redemptions (960,892) (1,214,951) (19,178) (44,337) (645) (19,512)
Outstanding units — ending 5,723,671 4,393,049 277,753 184,094 6,360 2,861
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 5,745,748 5,005,533
Subscriptions 1,490,799 5,104,761
Reinvestments 247,787 226,703
Redemptions (790,825) (4,591,249)
Outstanding units — ending 6,693,509 5,745,748
218 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Bissett Dividend Income Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 11,273,495 11,039,418 1,090,894 1,050,411 32,576 13,960
Subscriptions 3,055,762 2,204,860 215,721 126,303 17,075 18,163
Reinvestments 263,603 258,821 24,516 23,637 1,008 493
Redemptions (2,249,351) (2,229,604) (99,313) (109,457) (2,536) (40)
Outstanding units — ending 12,343,509 11,273,495 1,231,818 1,090,894 48,123 32,576
Series O Series T
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 4,942,208 4,851,433 2,355,065 2,467,329
Subscriptions 1,248,143 592,157 484,279 420,123
Reinvestments 124,789 123,371 67,176 65,729
Redemptions (866,654) (624,753) (456,231) (598,116)
Outstanding units — ending 5,448,486 4,942,208 2,450,289 2,355,065
Bissett Focus Balanced Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 292,080 314,148 2,498 3,310 500 500
Subscriptions 116,990 126,090 1,997 472 — —
Reinvestments 3,064 21,907 56 305 — —
Redemptions (101,659) (170,065) — (1,589) — —
Outstanding units — ending 310,475 292,080 4,551 2,498 500 500
Series O Series T
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 141,938 69,100 3,170 2,762
Subscriptions 141,607 100,473 47,607 —
Reinvestments 2,367 12,979 1,103 408
Redemptions (94,273) (40,614) (328) —
Outstanding units — ending 191,639 141,938 51,552 3,170
Bissett Microcap Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 1,964,985 1,413,714 2,535,783 2,470,032 1,615,151 1,636,054
Subscriptions 734,885 1,037,543 149,335 152,711 116,912 463,424
Reinvestments 258,998 136,213 309,207 170,903 187,932 110,207
Redemptions (772,475) (622,485) (222,591) (257,863) (287,968) (594,534)
Outstanding units — ending 2,186,393 1,964,985 2,771,734 2,535,783 1,632,027 1,615,151
Franklin Templeton Investments Funds 219

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Bissett Small Cap Fund
Series A Series F Series O
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 1,005,374 1,096,408 769,822 792,254 6,670,729 7,666,095
Subscriptions 71,917 113,695 11,299 13,562 1,172,550 980,698
Reinvestments 100,708 92,509 84,849 71,704 738,909 622,653
Redemptions (236,734) (297,238) (77,306) (107,698) (1,764,194) (2,598,717)
Outstanding units — ending 941,265 1,005,374 788,664 769,822 6,817,994 6,670,729
Bissett Strategic Income Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 198,500 — 500 — 500 —
Subscriptions 7,212,665 198,500 229,326 500 223,012 500
Reinvestments 114,623 — 4,163 — 2,329 —
Redemptions (323,310) — (18,074) — (141,277) —
Outstanding units — ending 7,202,478 198,500 215,915 500 84,564 500
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 500 —
Subscriptions 78,182 500
Reinvestments 1,546 —
Redemptions (379) —
Outstanding units — ending 79,849 500
Bissett U.S. Focus Fund
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 17,541,041 6,111,800
Subscriptions 4,989,771 19,786,455
Reinvestments 595,443 132,895
Redemptions (7,467,981) (8,490,109)
Outstanding units — ending 15,658,274 17,541,041
Mutual Beacon Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 15,588,691 21,231,202 1,116,434 1,549,577 27,198 26,569
Subscriptions 825,259 783,363 84,467 125,152 1,085 —
Reinvestments 258,513 463,439 15,949 32,020 436 629
Redemptions (3,926,258) (6,889,313) (402,930) (590,315) (1,085) —
Outstanding units — ending 12,746,205 15,588,691 813,920 1,116,434 27,634 27,198
220 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Mutual Beacon Fund (Continued)
Series O Series T
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 41,250,630 43,398,050 42,809 49,789
Subscriptions 6,845,776 18,370,200 10 2,260
Reinvestments 439,058 1,245,441 2,408 3,082
Redemptions (27,293,535) (21,763,061) (37) (12,322)
Outstanding units — ending 21,241,929 41,250,630 45,190 42,809
Mutual Global Discovery Fund (formerly Mutual Discovery Fund)
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 40,773,176 43,717,198 2,551,159 2,599,415 37,656 36,067
Subscriptions 3,817,100 5,700,304 720,755 679,120 13,767 12,200
Reinvestments 513,794 478,916 36,135 28,533 498 419
Redemptions (8,144,870) (9,123,242) (606,637) (755,909) — (11,030)
Outstanding units — ending 36,959,200 40,773,176 2,701,412 2,551,159 51,921 37,656
Series O Series T Series T USD
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 29,248,279 27,155,008 451,078 412,075 56,266 33,899
Subscriptions 2,462,377 7,583,712 41,539 106,644 11,798 26,398
Reinvestments 288,752 350,597 15,108 15,781 1,089 876
Redemptions (11,443,468) (5,841,038) (93,454) (83,422) (10,000) (4,907)
Outstanding units — ending 20,555,940 29,248,279 414,271 451,078 59,153 56,266
Franklin Templeton Canadian Core Equity Fund
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 39,880,934 50,555,893
Subscriptions 21,233,019 8,260,236
Reinvestments 713,410 1,588,779
Redemptions (34,272,496) (20,523,974)
Outstanding units — ending 27,554,867 39,880,934
Franklin Templeton Canadian Large Cap Fund
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 28,158,413 38,882,531
Subscriptions 17,424,179 3,159,084
Reinvestments 813,910 6,339,393
Redemptions (18,550,080) (20,222,595)
Outstanding units — ending 27,846,422 28,158,413
Franklin Templeton Investments Funds 221

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Franklin Templeton Global Blend Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 59,662 59,881 863 854 500 500
Subscriptions 14,625 28,448 76 — — —
Reinvestments 1,869 1,163 16 9 — —
Redemptions (20,603) (29,830) — — — —
Outstanding units — ending 55,553 59,662 955 863 500 500
Series O Series T Series T USD
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 2,988 500 1,375 1,653 2,566 2,376
Subscriptions — 2,488 — — 345 —
Reinvestments 94 — 79 60 240 190
Redemptions (521) — — (338) (281) —
Outstanding units — ending 2,561 2,988 1,454 1,375 2,870 2,566
Franklin Templeton Money Market Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 12,650,650 13,240,214 2,554,638 2,761,124 4,704 5,614
Subscriptions 7,540,088 11,598,481 1,064,597 2,237,214 16,702 227
Reinvestments 41,828 44,009 22,197 24,478 37 23
Redemptions (10,629,090) (12,232,054) (1,483,492) (2,468,178) (4,227) (1,160)
Outstanding units — ending 9,603,476 12,650,650 2,157,940 2,554,638 17,216 4,704
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 10,815,937 10,243,153
Subscriptions 9,889,823 3,605,954
Reinvestments 170,703 149,794
Redemptions (9,094,363) (3,182,964)
Outstanding units — ending 11,782,100 10,815,937
Franklin Templeton Treasury Bill Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 9,537,675 12,603,006 499,331 515,697 22,205 26,101
Subscriptions 2,076,904 3,569,173 125,321 333,833 25,000 17,567
Reinvestments 33,687 49,290 3,237 3,602 137 78
Redemptions (4,560,140) (6,683,794) (167,174) (353,801) (5,610) (21,541)
Outstanding units — ending 7,088,126 9,537,675 460,715 499,331 41,732 22,205
222 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
3. Unitholders’ Capital (Continued)
Franklin Templeton Treasury Bill Fund (Continued)
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 339,378 1,331,097
Subscriptions 2,230,598 400,535
Reinvestments 14,081 9,739
Redemptions (1,165,031) (1,401,993)
Outstanding units — ending 1,419,026 339,378
Franklin Templeton U.S. Money Market Fund
Series A Series F Series I
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Outstanding units — beginning 549,765 744,605 88,470 102,771 25,492 500
Subscriptions 605,395 538,421 30,730 39,424 500 24,977
Reinvestments 589 655 338 346 26 15
Redemptions (334,718) (733,916) (20,977) (54,071) (25,518) —
Outstanding units — ending 821,031 549,765 98,561 88,470 500 25,492
Series O
December 31, 2012 December 31, 2011
Outstanding units — beginning 1,571,120 2,444,659
Subscriptions 892,263 873,914
Reinvestments 12,538 17,252
Redemptions (1,177,110) (1,764,705)
Outstanding units — ending 1,298,811 1,571,120
4. Related Party Transactions
(a) Investment advisory and management fees
Each Fund pays an aggregate monthly fee for management and investment advisory services to various wholly-owned subsidiaries of FRI.
The monthly fee is calculated as 1/12 of the annual rate applied against the monthly average net assets of each series. The annual rates are
set out below.
Series A Series F Series I Series S Series T †
Templeton Canadian Balanced Fund .......... 2.00% 1.00% — — 2.00%
Templeton Canadian Stock Fund .............. 2.00% 1.00% — — —
Templeton EAFE Developed Markets Fund ...... 2.00% 1.00% — — —
Templeton Emerging Markets Fund ............ 2.50% 1.50% 2.00% — —
Templeton Global Balanced Fund ............. 2.00% 1.00% — 1.00% 2.00%
Templeton Global Bond Fund ................ 1.75% 1.25% 1.50% — —
Templeton Global Smaller Companies Fund ..... 2.00% 1.00% 1.50% — —
Templeton International Stock Fund ........... 2.00% 1.00% 1.50% — 2.00%
Franklin Flex Cap Growth Fund ............... 2.00% 1.00% — — —
Franklin High Income Fund .................. 1.75% 0.75% 1.50% — —
Franklin Strategic Income Fund ............... 1.75% 0.75% 1.50% — —
Franklin U.S. Core Equity Fund ............... 2.00% 1.00% — — —
Franklin U.S. Rising Dividends Fund ........... 2.00% 1.00% — — 2.00%
Franklin World Growth Fund ................. 2.00% 1.00% — — 2.00%
Bissett All Canadian Focus Fund .............. 2.00% 1.00% 1.50% — —
Bissett Bond Fund ......................... 1.35% 0.75% 1.10% — —
Bissett Canadian Balanced Fund .............. 1.75% 0.75% 1.25% — 1.75%
Bissett Canadian Dividend Fund .............. 2.00% 1.00% — — —
Franklin Templeton Investments Funds 223

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
4. Related Party Transactions (Continued)
Series A Series F Series I Series S Series T †
Bissett Canadian Equity Fund ................ 2.00% 1.00% 1.50% — —
Bissett Canadian High Dividend Fund .......... 2.00% 1.25% 1.75% — —
Bissett Canadian Short Term Bond Fund ....... 1.25% 0.75% — — —
Bissett Corporate Bond Fund ................. 1.45% 0.95% 1.10% — —
Bissett Dividend Income Fund ................ 2.00% 1.00% 1.50% — 2.00%
Bissett Focus Balanced Fund ................ 2.00% 1.00% 1.55% — 2.00%
Bissett Microcap Fund ...................... 3.00% 2.00% — — —
Bissett Small Cap Fund ..................... 2.50% 1.50% — — —
Bissett Strategic Income Fund ................ 1.85% 0.85% 1.35% — —
Mutual Beacon Fund ....................... 2.00% 1.00% 1.50% — 2.00%
Mutual Global Discovery Fund ................ 2.00% 1.00% 1.50% — 2.00%
Franklin Templeton Global Blend Fund ......... 2.00% 1.00% 1.55% — 2.00%
Franklin Templeton Money Market Fund ........ 1.00% 0.50% 0.875% — —
Franklin Templeton Treasury Bill Fund ......... 0.75% 0.50% 0.625% — —
Franklin Templeton U.S. Money Market Fund .... 1.00% 0.75% 0.875% — —
† Where a Fund offers Series T USD, the management fee is the same as that of Series T
Series O and R management and administration fees for the Funds are negotiated with and paid by the individual unitholder directly to the
Manager. Consequently, those Funds only offering Series O and R units have not been included in the table above.
To avoid duplication of fees charged to Funds which invest in Underlying Funds managed by the Manager, the fees of those Funds that
would otherwise be payable will be reduced to reflect the management fees paid indirectly through investments by the Funds in such
Underlying Fund.
(b) Manager holdings and Funds Managed by the Manager
(i) The Manager held the following units in the specified Funds as at December 31, 2012 and December 31, 2011.
Templeton Global Balanced Fund Franklin High Income Fund
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Series S 348 342 Series I — 503
Franklin Strategic Income Fund Franklin World Growth Fund
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Series I — 503 Series A 500 500
Series F 500 500
Series T 345 339
Bissett All Canadian Focus Fund Bissett Bond Fund
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Series I 500 500 Series I — 76
Bissett Canadian Balanced Fund Bissett Corporate Bond Fund
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Series I 184 184 Series I — 502
Bissett Dividend Income Fund Bissett Focus Balanced Fund
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Series I — 45 Series A 58,715 58,715
Series I 500 500
224 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
4. Related Party Transactions (Continued)
Bissett Strategic Income Fund Franklin Templeton Global Blend Fund
December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Series A 198,500 198,500 Series A — 12,500
Series F 500 500 Series F 500 500
Series I 500 500 Series I 500 500
Series O 500 500 Series O — 500
Series T-USD — 281
Franklin Templeton U.S. Money Market Fund
December 31, 2012 December 31, 2011
Series I 500 500
The Manager’s holdings represent less than 1% of the net assets of each of the Funds, with the exception of the following Funds where it
accounts for the percentage indicated:
December 31, 2012 December 31, 2011
Bissett Focus Balanced Fund 11% 14%
Bissett Strategic Income Fund 3% 100%
Franklin Templeton Global Blend Fund 2% 21%
(ii) The following Funds managed by the Manager or its affiliates owned units exceeding 10% of the total outstanding units of Series O of
the specified Fund as at December 31, 2012 and December 31, 2011. Where a holding exceeds 10% in one year only, the
comparative amount shown may be less than 10%.
% of Total Series O
Outstanding Units
% of Total Series O
Outstanding Units
2012 2011 2012 2011
Templeton Asian Growth Fund Templeton Canadian Stock Fund
Quotential Balanced Growth Portfolio 45.2% 41.6% Templeton Canadian Stock Corporate Class 30.7% 33.2%
Quotential Balanced Income Portfolio 14.9% 15.0%
Quotential Growth Portfolio 10.5% 11.6%
Templeton EAFE Developed Markets Fund Templeton Emerging Markets Fund
Franklin Templeton Institutional Balanced Trust 18.8% 17.6% Quotential Balanced Growth Portfolio — 24.4%
Bissett Canadian Balanced Fund 12.0% 13.3% Templeton Emerging Markets Corporate Class 19.8% 19.1%
Quotential Diversified Income Portfolio 12.8% 7.4% Bissett Canadian Balanced Fund 11.9% 13.2%
Quotential Diversified Income Portfolio 26.7% —
Quotential Diversified Income Corporate Class Portfolio 17.3% —
Templeton Frontier Markets Fund Templeton Global Bond Fund
Quotential Global Growth Portfolio — 52.6% Quotential Balanced Growth Portfolio 11.5% 16.2%
Quotential Global Growth Corporate Class Portfolio 1.4% 17.6% Quotential Diversified Income Portfolio 15.4% 12.0%
Templeton Frontier Markets Corporate Class 4.1% 13.6% Quotential Balanced Income Portfolio 7.4% 10.2%
Quotential Maximum Growth Portfolio 1.3% 10.9%
Quotential Growth Portfolio 10.2% —
Quotential Balanced Growth Portfolio 43.8% —
Quotential Balanced Income Portfolio 14.4% —
Templeton Global Smaller Companies Fund Templeton International Stock Fund
Templeton Global Smaller Companies Corporate Class 13.1% 14.8% Templeton International Stock Corporate Class 28.8% 9.8%
Quotential Balanced Growth Portfolio 10.2% 6.9%
Franklin Flex Cap Growth Fund Franklin High Income Fund
Quotential Balanced Growth Portfolio 37.9% 37.6% Quotential Diversified Income Portfolio 60.2% 63.2%
Franklin Flex Cap Growth Corporate Class 12.4% 11.9% Quotential Diversified Income Corporate Class Portfolio 38.8% 35.3%
Quotential Growth Portfolio 8.1% 10.1%
Quotential Balanced Income Portfolio 11.6% 7.6%
Franklin Templeton Investments Funds 225

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
4. Related Party Transactions (Continued)
% of Total Series O
Outstanding Units
% of Total Series O
Outstanding Units
2012 2011 2012 2011
Franklin Strategic Income Fund Franklin U.S. Core Equity Fund
Quotential Balanced Growth Portfolio 22.7% 29.9% Quotential Balanced Growth Portfolio 44.6% 43.8%
Quotential Diversified Income Portfolio 23.2% 18.5% Quotential Growth Portfolio 9.7% 11.9%
Quotential Balanced Income Portfolio 15.0% 18.3% Quotential Balanced Income Portfolio 13.7% 8.9%
Quotential Diversified Income Corporate Class Portfolio 15.0% 10.4%
Franklin U.S. Rising Dividends Fund Franklin World Growth Fund
Quotential Balanced Growth Portfolio 12.4% 15.4% Quotential Balanced Growth Portfolio 27.3% 26.4%
Quotential Diversified Income Portfolio 11.2% 9.2% Quotential Global Growth Portfolio 10.8% 17.9%
Quotential Growth Portfolio 12.9% 15.8%
Franklin World Growth Corporate Class 17.2% 5.1%
Bissett All Canadian Focus Fund Bissett Bond Fund
Quotential Balanced Growth Portfolio 40.6% 44.3% Quotential Balanced Growth Portfolio 21.7% 25.6%
Quotential Balanced Income Portfolio 11.1% 12.8% Quotential Balanced Income Portfolio 17.5% 16.9%
Bissett Canadian Balanced Fund 11.2% 7.9% Quotential Diversified Income Portfolio 17.2% 15.9%
Quotential Diversified Income Corporate Class Portfolio 11.2% 9.0%
Bissett Canadian Dividend Fund Bissett Canadian Equity Fund
Quotential Diversified Income Portfolio 17.5% 27.8% Quotential Balanced Growth Portfolio 16.3% 25.5%
Quotential Balanced Growth Portfolio 8.1% 20.3% Bissett Canadian Balanced Fund 13.2% 12.2%
Quotential Diversified Income Corporate Class Portfolio 11.3% 15.7%
Bissett Canadian Dividend Corporate Class 12.7% 10.4%
Bissett Canadian High Dividend Fund Bissett Canadian Short Term Bond Fund
Quotential Diversified Income Portfolio 21.2% 28.7% Quotential Diversified Income Portfolio 31.8% 28.6%
Quotential Diversified Income Corporate Class Portfolio 13.7% 16.2% Quotential Diversified Income Corporate Class Portfolio 20.6% 15.9%
Bissett Canadian Balanced Fund 9.0% 10.1% Bissett Canadian Balanced Fund 11.3% 12.7%
Bissett Corporate Bond Fund Bissett Focus Balanced Fund
Bissett Canadian Balanced Fund 49.7% 52.1% Bissett Focus Balanced Corporate Class 98.6% 98.2%
Bissett Microcap Fund Bissett U.S. Focus Fund
Bissett Canadian Balanced Fund 59.0% 65.4% Quotential Balanced Growth Portfolio 26.2% 29.6%
Franklin Templeton Institutional Balanced Trust 17.9% 15.7% Bissett Canadian Balanced Fund 24.3% 21.4%
Bissett Institutional Balanced Trust 11.1% 9.4%
Mutual Beacon Fund Mutual Global Discovery Fund
Quotential Balanced Growth Portfolio 40.3% 24.6% Mutual Discovery Corporate Class 59.6% 43.1%
Mutual Beacon Corporate Class 6.7% 11.0% Bissett Canadian Balanced Fund 10.1% 8.0%
Quotential Balanced Income Portfolio 12.3% 5.0%
Franklin Templeton Canadian Core Equity Fund Franklin Templeton Canadian Large Cap Fund
Quotential Balanced Growth Portfolio 48.9% 51.0% Quotential Balanced Growth Portfolio 39.3% 50.7%
Quotential Balanced Income Portfolio 13.4% 14.7% Quotential Balanced Income Portfolio 10.7% 14.6%
Quotential Balanced Growth Corporate Class Portfolio 10.0% 10.7% Quotential Balanced Growth Corporate Class Portfolio 8.1% 10.6%
Quotential Growth Portfolio 10.3% 8.4% Quotential Diversified Income Portfolio 10.6% —
Franklin Templeton Money Market Fund Franklin Templeton U.S. Money Market Fund
Franklin Templeton Money Market Corporate Class 10.2% 22.4% Franklin Templeton U.S. Money Market Corporate Class 36.0% 37.4%
(c) Other services
In addition to providing management services, the Manager acts as trustee, registrar and transfer agent for each of the Funds.
(d) Distributions from Underlying Funds
Capital gains and income distributions received from Underlying Funds are included in distributions from Underlying Funds on the Statements
of Operations.
(e) Expenses absorbed or paid by the Manager
Operating expenses of the Funds may be absorbed or paid by the Manager as discussed in Note 6.
226 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
5. Sales Charges
The sales charge incurred by unitholders of Series A and I units and T and T USD (collectively “Series T”) units is dependent on the purchase
option selected at the time of purchase.
Under the front-load sales option, a negotiable fee of up to 6% of the purchase price is payable by the Series A and Series T investors to
their dealers. Series I unitholders negotiate a fee of up to 2% with their dealers. Under the low-load option, the Series A and Series T
investors will pay a redemption fee to the Manager if they redeem their units within three years of purchasing them. This redemption fee is
based on a declining percentage of the original cost of the investor’s units and how long the investor has held them, ranging from 3% to
0%. Up to 10% of an investor’s investment in Series A and T units may be redeemed in each calendar year without a redemption charge.
Under the deferred sales charge option, the Series A and Series T investors will pay a redemption fee to the Manager if they redeem their
units within six years of purchasing them. This redemption fee is based on a declining percentage, ranging from 6% to 0%, of the original
cost of the investor’s units and how long the investor has held them. Up to 10% of an investor’s investment in Series A and Series T units
may be redeemed in each calendar year without a redemption charge.
No sales charges are paid in respect of the sale of Series F, O, R and S units of a Fund.
6. Operating Expenses
The operating expenses of the Funds, which include, but are not limited to, legal, audit, custodial, registrar, fund administration and the cost of
financial statements and other reports, are the direct responsibility of the Funds. Brokerage commissions and taxes paid by the Funds are not
included in operating expenses, but are borne by the Funds, as applicable, and are reflected separately in the Statements of Operations. The
Manager pays the operating expenses on behalf of the Funds and is then reimbursed by the Funds. The Manager may waive or absorb operating
expenses of the Funds. The decision to do so is reviewed regularly and determined at the sole discretion of the Manager.
The portion of the operating expenses allocated to Series O and R investors may be absorbed by the Manager as part of its agreement with
the investors in those series.
Operating expenses for Series F units of Templeton EAFE Developed Markets Fund are capped at 1.00% of the average net asset value of
the Fund on an annual basis. For Series F units of all Bissett Funds in existence prior to October 2, 2000, operating expenses are capped
at 0.50% of the average net asset value of such Fund on an annual basis. In addition, the Manager pays all operating expenses for all series
of Bissett Canadian Short Term Bond Fund, Bissett Corporate Bond Fund, Franklin Templeton Money Market Fund, Franklin Templeton
Treasury Bill Fund and Franklin Templeton U.S. Money Market Fund.
7. Other Expenses
The principal items in other expenses are fund administration expenses (including pricing fees, technology and overhead costs) charged by
the Manager.
8. Other Assets
The principal items in other assets are recoverable expenses from the Manager and prepaid registration fees.
9. Other Liabilities
The principal items in other liabilities are amounts owing to the Manager relating to expenses paid for or incurred on behalf of the Funds.
10. Financial Risk Management
Risks arising from holding financial instruments are inherent in the Funds’ activities and are managed through a process of ongoing measurement
and monitoring. These financial risks may include, among others, market risk (including currency risk, interest rate risk and other price
risk), liquidity risk and credit risk. These risks are moderated through careful selection of securities and other financial instruments within the
Funds’ investment guidelines by the respective portfolio advisors. The risks are measured using a method that reflects the expected impact on
the results and net assets attributable to unitholders of the Funds from reasonably possible changes in the relevant risk variables. Information
about these risk exposures at the reporting date and risk management policies employed are disclosed in Notes 10 (a) to (e).
Franklin Templeton Investments Funds 227

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
(a) Currency risk
Certain Funds hold assets and liabilities denominated in currencies other than their functional currency, and are therefore exposed to currency
risk as the values of such assets and liabilities will fluctuate due to changes in exchange rates.
The portfolio advisors monitor the Funds’ currency risk position, and may enter into forward exchange contracts to manage foreign
exchange exposure as described in Note 2 and disclosed in the respective Funds’ Statement of Investments, as applicable.
The tables below summarize the Funds’ exposure to currency risk, where applicable. Amounts shown are based on the carrying value of
monetary and non-monetary assets, less liabilities. The tables below do not include a Fund when it holds less than 5% of its net assets in
foreign currencies. For those Funds included below, when individual currencies held are less than 5% of net assets, that currency has
been included in “other”. The tables also illustrate, for each respective Fund, the expected increase or decrease in net assets had the functional
currency strengthened or weakened by 5% in relation to all foreign currencies, with all other variables held constant. Actual results
may differ from this sensitivity analysis and the difference could be material.
Templeton Asian Growth Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
HKD .................................................... $120,816 38.33% 58,701 32.52%
IDR ..................................................... 28,414 9.01% 8,553 4.74%
INR ..................................................... 22,785 7.23% 18,950 10.50%
KRW .................................................... 12,774 4.05% 10,076 5.58%
PKR..................................................... 24,196 7.68% 12,475 6.91%
THB .................................................... 39,380 12.49% 25,395 14.07%
USD .................................................... 41,211 13.07% 28,606 15.85%
Other .................................................... 23,552 7.47% 10,907 6.04%
$313,128 99.33% $173,663 96.21%
Impact on net assets from 5% currency movement ............... $ 15,656 $ 8,683
Templeton Canadian Balanced Fund
December 31, 2012 December 31, 2011
Currency Amount
As % of
net assets Amount
As % of
net assets
(000s) (000s)
Other .................................................... $ 2,320 2.37% 6,541 5.69%
$ 2,320 2.37% $ 6,541 5.69%
Impact on net assets from 5% currency movement ............... $ 116 $ 327
Templeton Canadian Stock Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
Other .................................................... $ 3,137 3.55% 8,419 8.11%
$ 3,137 3.55% $ 8,419 8.11%
Impact on net assets from 5% currency movement ............... $ 157 $ 421
228 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Templeton EAFE Developed Markets Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
CHF..................................................... $ 23,075 7.35% 17,202 6.95%
EUR .................................................... 145,017 46.17% 111,328 44.96%
GBP .................................................... 54,280 17.28% 43,019 17.37%
HKD .................................................... 22,939 7.30% 8,748 3.53%
JPY ..................................................... 29,653 9.44% 27,216 10.99%
Other .................................................... 31,426 10.00% 20,482 8.27%
$306,390 97.54% $227,995 92.07%
Impact on net assets from 5% currency movement ............... $ 15,320 $ 11,400
Templeton Emerging Markets Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
HKD .................................................... $ 73,192 20.08% 77,586 22.27%
IDR ..................................................... 32,621 8.95% 22,025 6.32%
INR ..................................................... 32,212 8.84% 30,702 8.81%
KRW .................................................... 39,740 10.90% 35,199 10.10%
THB .................................................... 18,884 5.18% 15,111 4.34%
TWD .................................................... 27,431 7.53% 28,686 8.23%
USD .................................................... 79,841 21.90% 78,549 22.55%
Other .................................................... 46,849 12.85% 55,928 16.05%
$350,770 96.23% $343,786 98.67%
Impact on net assets from 5% currency movement ............... $ 17,539 $ 17,189
Templeton Frontier Markets Fund
December 31, 2012 December 31, 2011
Currency Amount
As % of
net assets Amount
As % of
net assets
(000s) (000s)
AED..................................................... $ 4,003 4.34% 510 8.70%
GBP .................................................... 10,355 11.22% 269 4.59%
KES ..................................................... 4,780 5.18% 278 4.73%
NGN .................................................... 9,472 10.27% 598 10.20%
QAR .................................................... 8,358 9.06% 397 6.76%
RON .................................................... 5,997 6.50% 198 3.37%
USD .................................................... 23,048 24.98% 1,433 24.44%
Other .................................................... 18,664 20.23% 1,701 29.00%
$ 84,677 91.78% $ 5,384 91.79%
Impact on net assets from 5% currency movement ............... $ 4,234 $ 269
Templeton Global Balanced Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
AUD .................................................... $ 800 0.95% 4,349 5.05%
BRL..................................................... 5,948 7.07% 5,606 6.51%
EUR .................................................... (3,402) (4.04%) (5,892) (6.84%)
GBP .................................................... 7,949 9.44% 10,166 11.80%
HKD .................................................... 4,885 5.80% 6,132 7.12%
Franklin Templeton Investments Funds 229

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
KRW .................................................... 4,446 5.28% 4,272 4.96%
MYR .................................................... 3,366 4.00% 6,480 7.52%
SEK ..................................................... 3,245 3.86% 7,177 8.33%
USD .................................................... 25,261 30.01% 11,619 13.49%
Other .................................................... 23,111 27.46% 24,901 28.90%
$ 75,609 89.83% $ 74,810 86.84%
Impact on net assets from 5% currency movement ............... $ 3,780 $ 3,741
Templeton Global Bond Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
AUD .................................................... $ 81,543 4.48% 142,470 9.92%
EUR .................................................... (390,941) (21.50%) (371,100) (25.84%)
IDR ..................................................... 74,276 4.08% 76,020 5.29%
KRW .................................................... 168,752 9.28% 140,079 9.75%
MXN .................................................... 173,192 9.52% 64,333 4.48%
MYR .................................................... 197,241 10.85% 143,372 9.98%
NOK .................................................... 32,858 1.81% 98,977 6.89%
PLN..................................................... 187,005 10.28% 124,451 8.66%
SEK ..................................................... 229,456 12.62% 159,977 11.14%
SGD..................................................... 172,172 9.47% 109,919 7.65%
USD .................................................... 375,704 20.66% 191,275 13.32%
Other .................................................... 267,314 14.70% 366,609 25.53%
$1,568,572 86.25% $1,246,382 86.77%
Impact on net assets from 5% currency movement ............... $ 78,429 $ 62,319
Templeton Global Smaller Companies Fund
December 31, 2012 December 31, 2011
Currency Amount
As % of
net assets Amount
As % of
net assets
(000s) (000s)
EUR .................................................... $ 90,576 12.70% 183,698 22.13%
GBP .................................................... 115,476 16.19% 111,678 13.45%
HKD .................................................... 56,780 7.96% 45,524 5.48%
JPY ..................................................... 51,858 7.27% 75,703 9.12%
KRW .................................................... 38,764 5.44% 38,895 4.69%
SGD..................................................... 41,769 5.86% 10,701 1.29%
USD .................................................... 186,992 26.22% 157,556 18.98%
Other .................................................... 56,421 7.91% 99,176 11.95%
$ 638,636 89.55% $ 722,931 87.09%
Impact on net assets from 5% currency movement ............... $ 31,932 $ 36,147
Templeton International Stock Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
CHF..................................................... $ 76,034 9.90% 119,405 10.25%
EUR .................................................... 194,825 25.36% 288,448 24.75%
GBP .................................................... 123,543 16.08% 238,588 20.47%
HKD .................................................... 113,750 14.81% 164,916 14.15%
230 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
JPY ..................................................... 83,551 10.87% 113,379 9.73%
USD .................................................... 55,738 7.25% 62,763 5.39%
Other .................................................... 115,170 14.99% 174,004 14.93%
$762,611 99.26% $1,161,503 99.67%
Impact on net assets from 5% currency movement ............... $ 38,131 $ 58,075
Franklin Flex Cap Growth Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
USD .................................................... $279,633 100.02% 194,752 99.75%
$279,633 100.02% $ 194,752 99.75%
Impact on net assets from 5% currency movement ............... $ 13,982 $ 9,738
Franklin High Income Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
Other .................................................... $ 9,315 4.93% $ 5,484 3.34%
$ 9,315 4.93% $ 5,484 3.34%
Impact on net assets from 5% currency movement ............... $ 466 $ 274
Franklin Strategic Income Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
EUR .................................................... $ (34,160) (6.25%) (36,038) (6.30%)
USD .................................................... (76,923) (14.08%) (103,152) (18.04%)
Other .................................................... 145,530 26.63% 166,408 29.10%
$ 34,447 6.30% $ 27,218 4.76%
Impact on net assets from 5% currency movement ............... $ 1,722 $ 1,361
Franklin U.S. Core Equity Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
CHF..................................................... $ 5,794 3.28% 7,974 5.41%
USD .................................................... 170,966 96.73% 129,158 87.65%
$176,760 100.01% $ 137,132 93.06%
Impact on net assets from 5% currency movement ............... $ 8,838 $ 6,857
Franklin Templeton Investments Funds 231

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Franklin U.S. Rising Dividends Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
USD .................................................... $612,790 100.01% 537,551 100.00%
$612,790 100.01% $537,551 100.00%
Impact on net assets from 5% currency movement ............... $ 30,640 $ 26,878
Franklin World Growth Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
AUD .................................................... $ 19,992 7.46% 19,628 8.70%
CHF..................................................... 13,439 5.01% 22,096 9.79%
EUR .................................................... 49,204 18.36% 29,094 12.89%
GBP .................................................... 21,155 7.89% 20,051 8.88%
HKD .................................................... 21,708 8.10% 15,977 7.08%
SEK ..................................................... 12,725 4.75% 12,143 5.38%
SGD..................................................... 15,308 5.71% 11,472 5.08%
USD .................................................... 95,688 35.70% 77,427 34.31%
Other .................................................... 6,594 2.46% 5,513 2.44%
$255,813 95.44% $213,401 94.55%
Impact on net assets from 5% currency movement ............... $ 12,791 $ 10,670
Bissett Corporate Bond Fund
December 31, 2012 December 31, 2011
Currency Amount
As % of
net assets Amount
As % of
net assets
(000s) (000s)
USD .................................................... $ 8,272 6.10% 8 0.01%
$ 8,272 6.10% $ 8 0.01%
Impact on net assets from 5% currency movement ............... $ 414 $ —
Bissett Dividend Income Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
USD .................................................... $ 96,290 15.74% 86,273 16.36%
$ 96,290 15.74% $ 86,273 16.36%
Impact on net assets from 5% currency movement ............... $ 4,815 $ 4,314
Bissett Focus Balanced Fund
December 31, 2012 December 31, 2011
Currency Amount
As % of
net assets Amount
As % of
net assets
(000s) (000s)
USD .................................................... $ 1,018 14.81% 758 15.05%
Other .................................................... 699 10.17% 515 10.22%
$ 1,717 24.98% $ 1,273 25.27%
Impact on net assets from 5% currency movement ............... $ 86 $ 64
232 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Bissett U.S. Focus Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
USD .................................................... $148,755 100.00% 161,760 101.58%
$148,755 100.00% $161,760 101.58%
Impact on net assets from 5% currency movement ............... $ 7,438 $ 8,088
Mutual Beacon Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
USD .................................................... $ 38,287 20.17% 47,857 16.81%
Other .................................................... 8,691 4.58% 24,717 8.68%
$ 46,978 24.75% $ 72,574 25.49%
Impact on net assets from 5% currency movement ............... $ 2,349 $ 3,629
Mutual Global Discovery Fund
December 31, 2012 December 31, 2011
As % of
As % of
Currency Amount net assets Amount net assets
(000s) (000s)
USD .................................................... $121,666 13.52% 124,356 12.71%
Other .................................................... 78,877 8.77% 132,432 13.53%
$200,543 22.29% $256,788 26.24%
Impact on net assets from 5% currency movement ............... $ 10,027 $ 12,839
(b) Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of interest bearing
financial instruments. The portfolio advisors monitor overall interest rate sensitivity on a daily basis.
The tables below summarize all interest bearing financial instruments (excluding overnight term deposits) held by the respective Fund
which is subject to interest rate risk, categorized by the earlier of contractual re-pricing or maturity dates of the instrument. The tables
illustrate the increase or decrease expected in net assets for the Fund had the interest rates lowered or risen by 25 basis points, assuming
all other variables remain constant. Actual results may differ from this sensitivity analysis and the difference could be material.
December 31, 2012
Less Than 1-3 3-5 >5
Interest Rate
1 year years years years Total Sensitivity
(000s) (000s) (000s) (000s) (000s) (000s)
Templeton Canadian Balanced Fund ............................ $ 231 $ 3,112 $ 6,411 $ 15,723 $ 25,476 $ 424
Templeton Global Balanced Fund .............................. 4,019 3,698 4,165 9,645 21,527 288
Templeton Global Bond Fund .................................. 621,061 370,584 136,978 390,025 1,518,648 8,320
Franklin High Income Fund ................................... — 6,040 30,510 142,316 178,866 1,744
Franklin Strategic Income Fund ................................ 64,464 52,805 77,830 295,520 490,619 3,335
Bissett Bond Fund .......................................... 21,676 320,508 561,904 1,673,315 2,577,403 43,525
Bissett Canadian Short Term Bond Fund ......................... 23,489 131,275 129,929 137,536 422,229 2,818
Bissett Corporate Bond Fund .................................. 507 21,510 20,565 91,782 134,364 2,019
Bissett Dividend Income Fund ................................. — 13,860 6,684 75,020 95,564 1,531
Bissett Focus Balanced Fund .................................. — 11 451 2,253 2,715 44
Bissett Strategic Income Fund ................................. 154 2,101 2,143 7,985 12,383 206
Franklin Templeton Canadian Large Cap Fund .................... 1,625 — — — 1,625 2
Franklin Templeton Investments Funds 233

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
December 31, 2012
Less Than 1-3 3-5 >5
Interest Rate
1 year years years years Total Sensitivity
(000s) (000s) (000s) (000s) (000s) (000s)
Franklin Templeton Money Market Fund ......................... 222,716 10,185 — 2,013 234,914 117
Franklin Templeton Treasury Bill Fund .......................... 84,826 4,851 — — 89,677 47
Franklin Templeton U.S. Money Market Fund (USD) ................ 19,170 — — — 19,170 1
Less Than
1 year
1-3
years
December 31, 2011
3-5
years
>5
years Total
Interest Rate
Sensitivity
(000s) (000s) (000s) (000s) (000s) (000s)
Templeton Canadian Balanced Fund ............................ $ 2,057 $ 2,409 $ 6,744 $ 20,538 $ 31,748 $ 491
Templeton Global Balanced Fund .............................. 3,025 3,608 2,278 17,468 26,379 370
Templeton Global Bond Fund .................................. 493,316 309,916 43,227 280,833 1,127,292 5,803
Franklin High Income Fund ................................... — 2,287 22,922 129,279 154,488 1,644
Franklin Strategic Income Fund ................................ 77,722 62,550 72,802 319,594 532,668 4,060
Bissett Bond Fund .......................................... 149,176 215,228 576,598 1,806,789 2,747,791 42,179
Bissett Canadian Short Term Bond Fund ......................... 55,284 110,884 122,417 91,767 380,352 2,216
Bissett Corporate Bond Fund .................................. 3,558 15,336 20,715 66,388 105,997 1,378
Bissett Dividend Income Fund ................................. 5,120 8,714 17,803 55,266 86,903 1,036
Bissett Focus Balanced Fund .................................. — 114 319 1,583 2,016 27
Franklin Templeton Canadian Large Cap Fund .................... 5,444 — — — 5,444 2
Franklin Templeton Money Market Fund ......................... 211,237 32,644 — 10,000 253,881 114
Franklin Templeton Treasury Bill Fund .......................... 68,035 22,468 — — 90,503 34
Franklin Templeton U.S. Money Market Fund (USD) ................ 16,663 — — — 16,663 3
(c) Other price risk
Other price risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate as a result of changes in market
prices (other than those arising from currency risk or interest rate risk). Those changes may be caused by factors specific to the individual
financial instrument or its issuer, or factors affecting a market or market segment. Other assets and liabilities are monetary items that are
short-term in nature, and as such they are not subject to other price risk.
The table below illustrates the expected increase or decrease in net assets if the value of the Funds’ investments had increased or
decreased by 5%, with all other variables held constant. Actual results may differ from this sensitivity analysis and the difference could be
material.
December 31, 2012 December 31, 2011
Sensitivity
on Net
Assets
% Impact
on Net
Assets
Sensitivity
on Net
Assets
% Impact
on Net
Assets
(000s) (000s)
Templeton Asian Growth Fund ................................ $15,599 4.95% $ 8,664 4.80%
Templeton Canadian Balanced Fund ........................... 3,548 3.63% 4,140 3.60%
Templeton Canadian Stock Fund .............................. 4,386 4.97% 5,142 4.95%
Templeton EAFE Developed Markets Fund ...................... 15,266 4.86% 11,362 4.59%
Templeton Emerging Markets Fund ............................ 17,706 4.86% 17,080 4.90%
Templeton Frontier Markets Fund ............................. 4,344 4.71% 274 4.67%
Templeton Global Balanced Fund ............................. 2,645 3.14% 2,825 3.28%
Templeton Global Smaller Companies Fund ..................... 34,545 4.84% 39,799 4.79%
Templeton International Stock Fund ........................... 37,959 4.94% 57,822 4.96%
Franklin Flex Cap Growth Fund ............................... 13,531 4.84% 9,647 4.94%
Franklin High Income Fund .................................. 69 0.04% 38 0.02%
Franklin Strategic Income Fund ............................... 154 0.03% 68 0.01%
Franklin U.S. Core Equity Fund ............................... 8,713 4.93% 6,858 4.65%
Franklin U.S. Rising Dividends Fund ........................... 29,462 4.81% 25,204 4.69%
Franklin World Growth Fund ................................. 13,119 4.89% 10,947 4.85%
Bissett All Canadian Focus Fund .............................. 12,607 4.88% 16,132 4.90%
Bissett Canadian Balanced Fund .............................. 36,011 4.92% 34,294 4.92%
234 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Sensitivity
on Net
Assets
December 31, 2012 December 31, 2011
% Impact
on Net
Assets
Sensitivity
on Net
Assets
% Impact
on Net
Assets
(000s) (000s)
Bissett Canadian Dividend Fund .............................. $34,412 4.90% $31,499 4.87%
Bissett Canadian Equity Fund ................................ 90,415 4.86% 91,334 4.81%
Bissett Canadian High Dividend Fund .......................... 34,501 4.89% 26,710 4.71%
Bissett Dividend Income Fund ................................ 24,371 3.98% 21,355 4.05%
Bissett Focus Balanced Fund ................................ 199 2.89% 147 3.13%
Bissett Microcap Fund ...................................... 8,227 4.65% 7,076 4.81%
Bissett Small Cap Fund ..................................... 26,268 4.60% 24,233 4.74%
Bissett Strategic Income Fund ................................ 3,348 4.15% 101 4.97%
Bissett U.S. Focus Fund ..................................... 7,302 4.91% 7,957 5.00%
Mutual Beacon Fund ....................................... 8,101 4.27% 12,089 4.25%
Mutual Global Discovery Fund ................................ 41,396 4.60% 43,233 4.42%
Franklin Templeton Canadian Core Equity Fund .................. 9,800 4.99% 14,861 4.90%
Franklin Templeton Canadian Large Cap Fund ................... 11,874 4.95% 10,682 6.04%
Franklin Templeton Global Blend Fund ......................... 41 5.04% 40 5.06%
(d) Liquidity risk
Liquidity risk is the risk that a Fund will not be able to meet its liabilities as they fall due. As the Funds are exposed to daily cash redemption
of units, the assets of the Funds are invested mainly in securities which are traded in active markets and can be readily disposed of. In
addition, sufficient cash and cash equivalents are maintained to meet normal operating requirements. Each Fund has the ability to borrow
up to 5% of its net assets for the purposes of funding redemptions. The Funds have a non-committed redemption line of credit agreement
with a Schedule 1 bank in Canada from which these amounts can be borrowed, if necessary. The loans are issued at prime rate and are
payable on demand. There were no loans issued or outstanding as at December 31, 2012 and December 31, 2011. All liabilities held are
payable upon demand or due within three months.
The Funds also have a policy that restricts them from holding illiquid assets that account for more than 10% of their respective net assets.
Equity-linked notes, PIK bonds and P-Notes may be more volatile and less liquid than other investments held by the Funds. The Funds’
holdings of equity-linked notes, PIK bonds and P-Notes represents less than 10% of their net asset value as at December 31, 2012 and
December 31, 2011. All liabilities held are payable upon demand or due within three months.
(e) Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into
with a Fund. This risk is generally lower if the issuer has a high credit rating from an independent credit rating agency, while the risk is
generally higher if the issuer has a low credit rating or no credit rating. Where applicable, credit ratings have been disclosed at the end of
each Statement of Investments.
All cash and trading transactions are carried out by banks rated A or higher by Standard & Poor’s as at December 31, 2012 and
December 31, 2011.
In addition to the above, Mutual Beacon Fund and Mutual Global Discovery Fund are further exposed to credit risk, liquidity risk and interest
rate risk as these Funds may purchase the pre-default or defaulted debt of distressed companies and securities which are subject to
legal, contractual or other agreed upon restrictions on resale. Distressed companies are financially troubled and are about to be or are
already involved in financial restructuring, bankruptcy or reorganization. The distressed bonds are purchased with the expectation that they
will be converted into equity equivalents of the newly organized company in the near future. Risks associated with purchasing these securities
include the possibility that the bankruptcy or other restructuring process takes longer than expected. It is probable that income on
debt securities may not be collected. As at December 31, 2012, Mutual Beacon Fund and Mutual Global Discovery Fund held 4.01% and
2.78% (December 31, 2011: 2.60% and 1.60%), respectively, of their portfolios in distressed securities, securities with restrictions on
resale and securities for which fair value as market price are not readily available.
Franklin Templeton Investments Funds 235

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
(f) Fair value estimation
The Funds classify fair value measurements of investments held using a fair value hierarchy that reflects the significance of the inputs used
in making the measurements. The fair value hierarchy has the following levels:
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (prices) or
indirectly (derived from prices)
Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The determination of what constitutes “observable” requires significant judgment by the Manager. The Manager considers observable data
to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by
independent sources that are actively involved in the relevant market. Financial instruments that trade in markets that are not considered to
be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs
are classified within Level 2. Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently. These
may include private equity and corporate debt securities. As observable prices are not available for these securities, the Manager has used
valuation techniques to derive the fair value.
The following tables show the classification of the Funds’ financial assets and liabilities measured at fair value as at December 31, 2012
and 2011.
Templeton Asian Growth Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $273,231 $38,756 $ — $311,987 $173,285 $ — $ — $173,285
Total Investments ....... $273,231 $38,756 $ — $311,987 $173,285 $ — $ — $173,285
Templeton Canadian Balanced Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $70,952 $ — $ — $70,952 $82,807 $ — $ — $ 82,807
Bonds ............... — 25,476 — 25,476 — 29,691 — 29,691
Short-term securities .... — 1,100 — 1,100 — 2,557 — 2,557
Total Investments ....... $70,952 $26,576 $ — $97,528 $82,807 $32,248 $ — $115,055
Templeton Canadian Stock Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $87,714 $ — $ — $87,714 $102,831 $ — $ — $102,831
Short-term securities .... — 400 — 400 — 900 — 900
Total Investments ....... $87,714 $400 $ — $88,114 $102,831 $900 $ — $103,731
236 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Templeton EAFE Developed Markets Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $ 65,936 $239,376 $ — $305,312 $227,236 $ — $ — $227,236
Short-term securities .... — 7,700 — 7,700 — 20,300 — 20,300
Total Investments ....... $ 65,936 $247,076 $ — $313,012 $227,236 $20,300 $ — $247,536
Templeton Emerging Markets Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $312,675 $41,436 $ — $354,111 $341,596 $ — $ — $341,596
Short-term securities .... — 16,000 — 16,000 — 4,600 — 4,600
Total Investments ....... $312,675 $57,436 $ — $370,111 $341,596 $4,600 $ — $346,196
Templeton Frontier Markets Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $62,874 $23,974 $ — $86,848 $5,456 $25 $ — $5,481
Convertible equities ..... — 33 — 33 — — —
Total Investments ....... $62,874 $24,007 $ — $86,881 $5,456 $25 $ — $5,481
Templeton Global Balanced Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $27,852 $23,331 $ 38 $51,221 $55,887 $ — $ — $55,887
Convertible equities ..... — 1,681 — 1,681 — 607 — 607
Bonds ............... — 20,879 — 20,879 — 23,354 — 23,354
Short-term securities .... — 648 — 648 — 5,728 — 5,728
Total Investments ....... $27,852 $46,539 $ 38 $74,429 $55,887 $29,689 $ — $85,576
Derivative assets ....... $ — $ 848 $ — $ 848 $ — $ 912 $ — $ 912
Derivative liabilities ..... $ — $ 285 $ — $ 285 $ — $ 1,171 $ — $ 1,171
Templeton Global Bond Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Bonds ............... $ — $1,346,773 $ — $1,346,773 $ — $ 633,975 $ — $ 633,975
Short-term securities .... — 421,275 — 421,275 — 682,317 — 682,317
Total Investments ....... $ — $1,768,048 $ — $1,768,048 $ — $1,316,292 $ — $1,316,292
Derivative assets ....... $ — $ 10,259 $ — $ 10,259 $ — $ 25,517 $ — $ 25,517
Derivative liabilities ..... $ — $ 15,203 $ — $ 15,203 $ — $ 12,213 $ — $ 12,213
Franklin Templeton Investments Funds 237

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Templeton Global Smaller Companies Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $369,653 $313,227 $8,026 $690,906 $ 795,986 $ — $ — $795,986
Short-term securities .... — 23,100 — 23,100 — 32,300 — 32,300
Total Investments ....... $369,653 $336,327 $8,026 $714,006 $ 795,986 $32,300 $ — $828,286
Templeton International Stock Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $256,133 $494,742 $ 112 $750,987 $1,148,980 $ — $ 174 $1,149,154
Convertible equities .....
Investments in mutual
227 — — 227 — — — —
funds/unit trusts ..... — — 7,968 7,968 — — 7,290 7,290
Short-term securities .... — 7,800 — 7,800 — 6,900 — 6,900
Total Investments ....... $256,360 $502,542 $8,080 $766,982 $1,148,980 $6,900 $7,464 $1,163,344
Franklin Flex Cap Growth Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $270,625 $ — $ — $270,625 $192,942 $ — $ — $192,942
Short-term securities .... — — — — 561 — 561
Total Investments ....... $270,625 $ — $ — $270,625 $192,942 $561 $ — $193,503
Franklin High Income Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $915 $ — $457 $ 1,372 $751 $ — $ — $ 751
Bonds ............... — 178,865 — 178,865 — 154,488 — 154,488
Short-term securities .... — — — — 4,711 — 4,711
Total Investments ....... $915 $178,865 $457 $180,237 $751 $159,199 $ — $159,950
Derivative assets ....... $ — $ 377 $ — $ 377 $ — $ 1,066 $ — $ 1,066
Derivative liabilities ..... $ — $ 1,382 $ — $ 1,382 $ — $ 136 $ — $ 136
Franklin Strategic Income Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $407 $ 2,426 $457 $ 3,290 $329 $ 1,560 $168 $ 2,056
Convertible bonds ...... — 475,119 — 475,119 — 1,127 — 1,127
Bonds ............... — — — — — 454,805 687 455,493
Short-term securities .... — 15,500 — 15,500 — 77,723 — 77,723
Total Investments ....... $407 $493,045 $457 $493,909 $329 $535,215 $855 $536,399
Derivative assets ....... $ — $ 1,615 $ — $ 1,615 $ — $ 8,711 $ — $ 8,711
Derivative liabilities ..... $ — $ 2,882 $ — $ 2,882 $ — $ 1,770 $ — $ 1,770
238 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Franklin U.S. Core Equity Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $174,257 $ — $ — $174,257 $137,153 $ — $ — $137,153
Short-term securities .... — — — — 10,259 — 10,259
Total Investments ....... $174,257 $ — $ — $174,257 $137,153 $10,259 $ — $147,412
Franklin U.S. Rising Dividends Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $589,235 $ — $ — $589,235 $504,075 $ — $ — $504,075
Total Investments ....... $589,235 $ — $ — $589,235 $504,075 $ — $ — $504,075
Franklin World Growth Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $156,853 $105,535 $ — $262,388 $218,932 $ — $ — $218,932
Short-term securities .... — 3,900 — 3,900 — 6,400 — 6,400
Total Investments ....... $156,853 $109,435 $ — $266,288 $218,932 $6,400 $ — $225,332
Bissett All Canadian Focus Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $252,133 $ — $ — $252,133 $322,637 $ — $ — $322,637
Short-term securities .... — 5,385 — 5,385 — 11,865 — 11,865
Total Investments ....... $252,133 $5,385 $ — $257,518 $322,637 $11,865 $ — $334,502
Bissett Bond Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Bonds ............... $ — $2,577,402 $ — $2,577,402 $ — $2,598,614 $ — $2,598,614
Short-term securities .... — 16,000 — 16,000 — 156,762 — 156,762
Total Investments ....... $ — $2,593,402 $ — $2,593,402 $ — $2,755,376 $ — $2,755,376
Derivative assets ....... $ — $ 46 $ — $ 46 $ — $ 7 $ — $ 7
Derivative liabilities ..... $ — $ 23 $ — $ 23 $ — $ — $ — $ —
Bissett Canadian Balanced Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Investments in mutual
funds/unit trusts ..... $720,221 $ — $ — $720,221 $685,880 $ — $ — $685,880
Short-term securities .... — 10,910 — 10,910 — 11,355 — 11,355
Total Investments ....... $720,221 $10,910 $ — $731,131 $685,880 $11,355 $ — $697,235
Franklin Templeton Investments Funds 239

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Bissett Canadian Dividend Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $688,230 $ — $ — $688,230 $629,974 $ — $ — $629,974
Short-term securities .... — 11,085 — 11,085 — 14,220 — 14,220
Total Investments ....... $688,230 $11,085 $ — $699,315 $629,974 $14,220 $ — $644,194
Bissett Canadian Equity Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $1,806,670 $ — $1,628 $1,808,298 $1,826,682 $ — $ — $1,826,682
Short-term securities .... — 47,325 — 47,325 — 68,920 — 68,920
Total Investments ....... $1,806,670 $47,325 $1,628 $1,855,623 $1,826,682 $68,920 $ — $1,895,602
Bissett Canadian High Dividend Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long .......
Investments in mutual
$642,611 $ — $ — $642,611 $534,201 $ — $ — $534,201
funds/unit trusts ..... 47,415 — — 47,415 — — — —
Short-term securities .... — 11,090 — 11,090 — 30,115 — 30,115
Total Investments ....... $690,026 $11,090 $ — $701,116 $534,201 $30,115 $ — $564,316
Bissett Canadian Short Term Bond Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Bonds ............... $ — $422,228 $ — $422,228 $ — $325,068 $ — $325,068
Short-term securities .... — 440 — 440 — 61,319 — 61,319
Total Investments ....... $ — $422,668 $ — $422,668 $ — $386,387 $ — $386,387
Derivative assets ....... $ — $ 4 $ — $ 4 $ — — $ — $ —
Derivative liabilities ..... $ — $ 2 $ — $ 2 $ — — $ — $ —
Bissett Corporate Bond Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Bonds ............... $ — $134,364 $ — $134,364 $ — $102,439 $ — $102,439
Short-term securities .... — 535 — 535 — 4,433 — 4,433
Total Investments ....... $ — $134,899 $ — $134,899 $ — $106,872 $ — $106,872
Derivative assets ....... $ — $ 6 $ — $ 6 $ — $ 5 $ — $ 5
Derivative liabilities ..... $ — $ 3 $ — $ 3 $ — $ — $ —
240 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Bissett Dividend Income Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $484,503 $ 213 $ — $484,716 $424,158 $ 164 $ — $424,322
Convertible equities ..... 2,696 — — 2,696 2,770 — — 2,770
Bonds ............... — 95,564 — 95,564 — 81,783 — 81,783
Short-term securities .... — 26,500 — 26,500 — 16,955 — 16,955
Total Investments ....... $487,199 $122,277 $ — $609,476 $426,928 $98,902 $ — $525,830
Bissett Focus Balanced Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $3,423 $ 556 $ — $3,979 $2,948 $ — $ — $2,948
Bonds ............... — 2,715 — 2,715 — 2,016 — 2,016
Short-term securities .... — 165 — 165 — 130 — 130
Total Investments ....... $3,423 $3,436 $ — $6,859 $2,948 $2,146 $ — $5,094
Bissett Microcap Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $164,421 $ — $— $164,421 $141,415 $ — $18 $141,433
Convertible equities .....
Investments in mutual
84 273 — 357 93 — — 93
funds/unit trusts ..... — — 27 27 — — — —
Short-term securities .... — 12,020 — 12,020 — 5,350 — 5,350
Total Investments ....... $164,505 $12,293 $27 $176,825 $141,508 $5,350 $18 $146,876
Bissett Small Cap Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $525,366 $ — $ — $525,366 $484,659 $ — $ — $484,659
Short-term securities .... — 41,904 — 41,904 — 25,315 — 25,315
Total Investments ....... $525,366 $41,904 $ — $567,270 $484,659 $25,315 $ — $509,974
Bissett Strategic Income Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $37,121 $ — $ — $37,122 $1,015 $ — $ — $1,015
Bonds ...............
Investments in mutual
— 12,383 — 12,383 — — — —
funds/unit trusts ..... 29,831 — — 29,830 1,002 — — 1,002
Short-term securities .... — 1,035 — 1,035 — — —
Total Investments ....... $66,952 $13,418 $ — $80,370 $2,017 $ — $ — $2,017
Franklin Templeton Investments Funds 241

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Bissett U.S. Focus Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $146,033 $ — $ — $146,033 $159,131 $ — $ — $159,131
Total Investments ....... $146,033 $ — $ — $146,033 $159,131 $ — $ — $159,131
Mutual Beacon Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $121,121 $33,587 $7,306 $162,014 $234,382 $ 16 $7,377 $241,775
Bonds ............... — 14,692 — 14,692 — 13,280 — 13,280
Short-term securities .... — 5,274 — 5,274 — 3,412 — 3,412
Total Investments ....... $121,121 $53,553 $7,306 $181,980 $234,382 $16,708 $7,377 $258,467
Derivative assets ....... $ — $ 347 $ — $ 347 $ — $ 3,413 $ — $ 3,413
Derivative liabilities ..... $ — $ 3,491 $ — $ 3,491 $ — $ 20 $ — $ 20
Mutual Global Discovery Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $512,196 $291,195 $24,521 $827,912 $848,859 $ 2 $15,792 $864,653
Bonds ............... — 50,415 — 50,415 — 46,157 — 46,157
Short-term securities .... — 3,881 — 3,881 — 1,822 — 1,822
Total Investments ....... $512,196 $345,491 $24,521 $882,208 $848,859 $47,981 $15,792 $912,632
Derivative assets ....... $ — $ 1,731 $ — $ 1,731 $ — $12,735 $ — $ 12,735
Derivative liabilities ..... $ — $ 14,625 $ — $ 14,625 $ — $ 167 $ — $ 167
Franklin Templeton Canadian Core Equity Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $195,932 $ — $ — $195,932 $296,457 $ — $550 $297,007
Convertible equities ..... 64 — — 64 111 105 — 216
Total Investments ....... $195,996 $ — $ — $195,996 $296,568 $105 $550 $297,223
Franklin Templeton Canadian Large Cap Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Equities — Long ....... $237,490 $ — $ — $237,490 $213,643 $ — $ — $213,643
Short-term securities .... — 1,625 — 1,625 — 5,444 — 5,444
Total Investments ....... $237,490 $1,625 $ — $239,115 $213,643 $5,444 $ — $219,087
242 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Franklin Templeton Global Blend Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Investments in mutual
funds/unit trusts ..... $813 $ — $ — $813 $794 $ — $ — $794
Total Investments ....... $813 $ — $ — $813 $794 $ — $ — $794
Franklin Templeton Money Market Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Bonds ............... $ — $139,506 $ — $139,506 $ — $156,027 $ — $156,027
Short-term securities .... — 95,408 — 95,408 — 103,609 — 103,609
Total Investments ....... $ — $234,914 $ — $234,914 $ — $259,636 $ — $259,636
Franklin Templeton Treasury Bill Fund
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Bonds ............... $ — $38,135 $ — $38,135 $ — $ 71,067 $ — $ 71,067
Short-term securities .... — 51,897 — 51,897 — 32,786 — 32,786
Total Investments ....... $ — $90,032 $ — $90,032 $ — $103,853 $ — $103,853
Franklin Templeton U.S. Money Market Fund (in USD)
December 31, 2012 December 31, 2011
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s)
Bonds ............... $ — $ 4,000 $ — $ 4,000 $ — $ 7,680 $ — $ 7,680
Short-term securities .... — 18,195 — 18,195 — 14,683 — 14,683
Total Investments ....... $ — $22,195 $ — $22,195 $ — $22,363 $ — $22,363
For the Funds with Level 3 securities, there is no significant impact to the net assets of those Funds if changes are made to one or more of
the significant assumptions in the current valuation model to reasonably possible alternative assumptions. A reconciliation of investments
measured at fair value using unobservable inputs (Level 3) for the applicable fund is presented as follows:
Templeton Global Balanced Fund
December 31, 2012
Equities — long Total
(000s) (000s)
Opening ................................................................................. $— $—
Sales .................................................................................... — —
Purchases ............................................................................... — —
Net Transfers ............................................................................. 38 38
Net realized gains (losses) ................................................................... — —
Net change in unrealized appreciation (depreciation) ............................................. — —
Ending .................................................................................. 38 38
Total change in unrealized appreciation (depreciation) on investments held at December 31 .............. — —
Franklin Templeton Investments Funds 243

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Templeton Global Smaller Companies Fund
December 31, 2012
Equities — long Total
(000s) (000s)
Opening ................................................................................. $ — $ —
Sales .................................................................................... — —
Purchases ............................................................................... — —
Net Transfers ............................................................................. 8,026 8,026
Net realized gains (losses) ................................................................... — —
Net change in unrealized appreciation (depreciation) ............................................. — —
Ending .................................................................................. 8,026 8,026
Total change in unrealized appreciation (depreciation) on investments held at December 31 .............. — —
Templeton International Stock Fund
December 31, 2012 December 31, 2011
Investments in
Investments in
mutual
mutual
funds/unit
funds/unit
trusts/exchangetrusts/exchange-
Equities — long traded funds Total Equities — long traded funds Total
(000s) (000s) (000s) (000s) (000s) (000s)
Opening ............................. $ 175 $7,290 $7,465 $ 327 $ 8,659 $ 8,986
Sales ................................ (361) — (361) (814) — (814)
Purchases ........................... — — — — 28 28
Net Transfers ......................... — — — — — —
Net realized gains (losses) ...............
Net change in unrealized appreciation
295 — 295 474 — 474
(depreciation) ....................... 3 678 681 187 (1,397) (1,210)
Ending .............................. 112 7,968 8,080 175 7,290 7,464
Total change in unrealized appreciation
(depreciation) on investments held at
December 31 ....................... 2 678 680 187 (1,397) (1,210)
Franklin High Income Fund
December 31, 2012
Equities — long Total
(000s) (000s)
Opening ................................................................................. $ — $ —
Sales .................................................................................... — —
Purchases ............................................................................... 460 460
Net Transfers ............................................................................. — —
Net realized gains (losses) ................................................................... — —
Net change in unrealized appreciation (depreciation) ............................................. (3) (3)
Ending .................................................................................. 457 457
Total change in unrealized appreciation (depreciation) on investments held at December 31 .............. (3) (3)
244 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Franklin Strategic Income Fund
December 31, 2012 December 31, 2011
Equities — long Bonds Total Equities — long Bonds Total
(000s) (000s) (000s) (000s) (000s) (000s)
Opening ......................................... $ 167 $ 688 $ 855 $ — $235 $235
Sales ........................................... (851) (694) (1,545) — (88) (88)
Purchases ....................................... — 14 14 73 435 508
Net Transfers ..................................... 457 — 457 — — —
Net realized gains (losses) .......................... — 104 104 — 19 19
Net change in unrealized appreciation (depreciation) ..... 684 (112) 572 94 86 180
Ending .......................................... 457 — 457 167 687 854
Total change in unrealized appreciation (depreciation) on
investments held at December 31 .................. — — — 94 89 183
Bissett Canadian Equity Fund
December 31, 2012
Equities — long Total
(000s) (000s)
Opening ..................................................................................... $ — $ —
Sales ....................................................................................... — —
Purchases ................................................................................... 1,384 1,384
Net Transfers ................................................................................. — —
Net realized gains (losses) ....................................................................... — —
Net change in unrealized appreciation (depreciation) ................................................. 244 244
Ending ...................................................................................... 1,628 1,628
Total change in unrealized appreciation (depreciation) on investments held at December 31 .................. — —
Bissett Microcap Fund
December 31, 2012 December 31, 2011
Equities — long Total Equities — long Total
(000s) (000s) (000s) (000s)
Opening ........................................................... $18 $18 $ 1,829 $ 1,829
Sales .............................................................. (4) — — —
Purchases ......................................................... — — — —
Net Transfers ....................................................... — — (2,129) (2,129)
Net realized gains (losses) ............................................. 2 — — —
Net change in unrealized appreciation (depreciation) ....................... 13 13 318 318
Ending ............................................................ 27 27 18 18
Total change in unrealized appreciation (depreciation) on investments held at
December 31 ..................................................... 13 9 — —
Franklin Templeton Investments Funds 245

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
Mutual Beacon Fund
December 31, 2012 December 31, 2011
Equities — long Bonds Total Equities — long Bonds Total
(000s) (000s) (000s) (000s) (000s) (000s)
Opening ....................................... $7,377 $— $7,377 $19,021 $ 4,247 $ 23,268
Sales .......................................... — — (6,269) (4,225) (10,494)
Purchases ...................................... — — — — — —
Net Transfers ................................... (891) — (891) (2,557) — (2,557)
Net realized gains (losses) ......................... 1 — 1 (5,262) (1,259) (6,521)
Net change in unrealized appreciation (depreciation) .... 819 — 819 2,444 1,237 3,681
Ending ........................................ 7,306 — 7,306 7,377 — 7,377
Total change in unrealized appreciation (depreciation) on
investments held at December 31 ................. 169 — 169 (2,499) — (2,499)
Mutual Global Discovery Fund
December 31, 2012 December 31, 2011
Equities — long Bonds Total Equities — long Bonds Total
(000s) (000s) (000s) (000s) (000s) (000s)
Opening ...................................... $15,792 $— $15,792 $ 24,183 $ 1,881 $ 26,064
Sales ......................................... (181) — (181) 2,359 (1,874) 485
Purchases ..................................... 1,098 — 1,098 — — —
Net Transfers .................................. — — — 5,428 — 5,428
Net realized gains (losses) ........................ (19) — (19) (808) (550) (1,358)
Net change in unrealized appreciation (depreciation) . . . 7,831 — 7,831 (15,370) 543 (14,827)
Ending ....................................... 24,521 — 24,521 15,792 — 15,792
Total change in unrealized appreciation (depreciation)
on investments held at December 31 ............. (3,449) — (3,449) 644 - 644
Franklin Templeton Canadian Core Equity Fund
December 31, 2012 December 31, 2011
Equities — long Total Equities — long Total
(000s) (000s) (000s) (000s)
Opening .......................................................... $ 550 $ 550 $ 4,586 $ 4,586
Sales ............................................................. — — — —
Purchases ......................................................... 6,229 6,229 2,172 2,172
Net Transfers ...................................................... (6,804) (6,804) (5,824) (5,824)
Net realized gains (losses) ............................................ — — —
Net change in unrealized appreciation (depreciation) ....................... 25 25 (384) (384)
Ending ............................................................ — — 550 550
Total change in unrealized appreciation (depreciation) on investments held at
December 31 .................................................... 24 24 (24) (24)
In accordance with the Funds’ valuation policies, the Funds may apply fair value adjustment factors when quoted market prices are
deemed to have been affected by significant market events which exceed pre-determined thresholds. During the year, market level fair
246 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
10. Financial Risk Management (Continued)
valuation was applied to the Funds where the pre-determined tolerances were exceeded, at which time the securities were classified as
Level 2 and subsequently reclassified as Level 1, when the fair value adjustment factors were no longer required.
As at December 31, 2012, due to market events, the decision was made to apply market level fair valuation policy which utilizes adjustment
factors from third party vendors and other accepted methodologies in accordance with the current Board approved procedures. The markets
affected by these events include, Australia, China, Singapore, Vietnam, Austria, Belgium, Finland, France, Germany, Ireland, Italy, Netherlands,
Norway, South Africa, Spain, United Kingdom and Brazil. Due to the events, securities within these markets have been transferred from Level 1
to Level 2 as at December 31, 2012. These securities have subsequently been transferred back to Level 1 after year end.
As at December 31, 2011, there were no significant market events to cause the pre-determined tolerances to be breached; hence there
were no transfers between Level 1 and Level 2 as at that date.
11. Broker Commissions
Commissions paid to brokers for portfolio transactions during the periods ended December 31, 2012 and 2011 are shown below.
A portion of commissions paid may include payment for goods and services that are used to assist with investment or trading decisions
such as investment research, analysis and reports (“research services”). Where ascertainable, the value of the research services included
in the commissions paid is listed in the table below.
December 31, 2012 December 31, 2011
Commissions Research Costs Commissions Research Costs
(000s) (000s) (000s) (000s)
Templeton Asian Growth Fund ................................ $ 448 $124 $ 475 $125
Templeton Canadian Balanced Fund ........................... 32 14 27 16
Templeton Canadian Stock Fund .............................. 37 16 115 17
Templeton EAFE Developed Markets Fund ...................... 312 104 375 113
Templeton Emerging Markets Fund ............................ 409 109 856 237
Templeton Frontier Markets Fund ............................. 444 88 33 10
Templeton Global Balanced Fund ............................. 56 14 67 12
Templeton Global Bond Fund ................................ — — — —
Templeton Global Smaller Companies Fund ..................... 2,150 747 2,605 935
Templeton International Stock Fund ........................... 939 376 762 323
Franklin Flex Cap Growth Fund ............................... 232 73 326 87
Franklin High Income Fund .................................. 899 — 917 —
Franklin Strategic Income Fund ............................... 570 — 462 —
Franklin U.S. Core Equity Fund ............................... 521 215 304 132
Franklin U.S. Rising Dividends Fund ........................... 54 26 70 39
Franklin World Growth Fund ................................. 296 115 346 137
Bissett All Canadian Focus Fund .............................. 164 39 227 48
Bissett Bond Fund ......................................... — — — —
Bissett Canadian Balanced Fund .............................. — — — —
Bissett Canadian Dividend Fund .............................. 406 123 267 63
Bissett Canadian Equity Fund ................................ 820 318 1,329 550
Bissett Canadian High Dividend Fund .......................... 1,245 432 1,094 437
Bissett Canadian Short Term Bond Fund ....................... — — — —
Bissett Corporate Bond Fund ................................. — — — —
Bissett Dividend Income Fund ................................ 120 42 68 29
Bissett Focus Balanced Fund ................................ 2 1 4 1
Bissett Microcap Fund ...................................... 205 21 315 46
Bissett Small Cap Fund ..................................... 466 111 606 196
Bissett Strategic Income Fund ................................ 52 10 1 —
Bissett U.S. Focus Fund ..................................... 105 8 203 2
Mutual Beacon Fund ....................................... 228 50 355 81
Mutual Global Discovery Fund ................................ 602 155 910 275
Franklin Templeton Canadian Core Equity Fund .................. 2,548 7 3,101 1
Franklin Templeton Canadian Large Cap Fund ................... 228 — 312 —
Franklin Templeton Global Blend Fund ......................... — — — —
Franklin Templeton Money Market Fund ........................ — — — —
Franklin Templeton Treasury Bill Fund ......................... — — — —
Franklin Templeton U.S. Money Market Fund .................... — — — —
Franklin Templeton Investments Funds 247

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
12. Taxes
As at December 31, 2012, the following Funds had unused capital losses for income tax purposes. Capital losses can be carried forward
indefinitely to reduce future net realized capital gains. Non-capital losses may be carried forward to reduce future taxable income. There
were no non-capital losses available to the Funds as at December 31, 2012.
Fund
Total
Capital Losses
(000s)
Templeton Canadian Balanced Fund ........................................................................... $ 520
Templeton Canadian Stock Fund .............................................................................. 3,645
Templeton EAFE Developed Markets Fund ....................................................................... 30,451
Templeton Frontier Markets Fund .............................................................................. 103
Templeton Global Balanced Fund .............................................................................. 3,974
Templeton Global Smaller Companies Fund ...................................................................... 56,416
Templeton International Stock Fund ............................................................................ 212,049
Franklin Flex Cap Growth Fund ................................................................................ 37,367
Franklin Strategic Income Fund ............................................................................... 43,269
Franklin U.S. Core Equity Fund ................................................................................ 23,865
Franklin US Rising Dividend Fund ............................................................................. 69,603
Franklin World Growth Fund .................................................................................. 11,052
Bissett All Canadian Focus Fund .............................................................................. 27,480
Bissett Bond Fund .......................................................................................... 21,154
Bissett Canadian Dividend Fund ............................................................................... 1,466
Bissett Canadian Short Term Bond Fund ........................................................................ 1,348
Bissett Dividend Income Fund ................................................................................ 4,285
Bissett U.S. Focus Fund ..................................................................................... 19,692
Mutual Beacon Fund ........................................................................................ 164,811
Mutual Global Discovery Fund ................................................................................. 63,054
Franklin Templeton Canadian Core Equity Fund .................................................................. 27,563
Franklin Templeton Canadian Large Cap Fund ................................................................... 1,916
Franklin Templeton U.S. Money Market Fund .................................................................... 12,291
13. Trading Net Asset Value
(a) Trading net asset value
As discussed in Note 2, the trading net asset value per unit may differ from the GAAP net assets per unit as shown in the Statements of Net
Assets. The trading net asset value per unit for each series is shown below, as at December 31, 2012 and December 31, 2011. All trading
net asset values per unit are reported in CAD, with the exception of Series T USD, which is reported in USD, the currency in which that
series is offered.
Templeton Asian Growth Fund Templeton Canadian Balanced Fund
2012 2011 2012 2011
Series O $ 9.57 $ 8.21 Series A $ 8.47 $ 8.21
Series F $ 9.67 $ 9.26
Series O $10.80 $10.19
Series T $ 7.12 $ 7.49
Templeton Canadian Stock Fund Templeton EAFE Developed Markets Fund
2012 2011 2012 2011
Series A $12.06 $11.46 Series A $ 6.51 $ 5.76
Series F $13.92 $13.09 Series F $ 7.45 $ 6.53
Series O $16.56 $15.32 Series O $ 9.05 $ 7.79
248 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
13. Trading Net Asset Value (Continued)
Templeton Emerging Markets Fund Templeton Frontier Markets Fund
2012 2011 2012 2011
Series A $ 9.51 $ 8.57 Series O $10.77 $ 9.06
Series F $10.95 $ 9.76
Series I $10.47 $ 9.39
Series O $14.37 $12.57
Templeton Global Balanced Fund Templeton Global Bond Fund
2012 2011 2012 2011
Series A $11.03 $ 9.97 Series A $ 9.66 $ 9.36
Series F $10.37 $ 9.27 Series F $10.30 $ 9.93
Series O $11.41 $10.06 Series I $10.13 $ 9.77
Series S $15.50 $14.68 Series O $12.48 $11.84
Series T $ 7.27 $ 6.97
Series T USD $ 7.37 $ 6.86
Templeton Global Smaller Companies Fund Templeton International Stock Fund
2012 2011 2012 2011
Series A $16.16 $14.70 Series A $13.88 $12.58
Series F $18.49 $16.63 Series F $16.05 $14.39
Series I $17.88 $16.13 Series I $15.45 $13.89
Series O $22.54 $19.97 Series O $19.38 $17.12
Series T $ 5.79 $ 5.69
Franklin Flex Cap Growth Fund Franklin High Income Fund
2012 2011 2012 2011
Series A $10.21 $ 9.79 Series A $ 6.57 $ 6.42
Series F $11.63 $11.03 Series F $ 7.28 $ 7.02
Series O $14.26 $13.34 Series I $11.06 $10.71
Series O $ 8.26 $ 7.87
Franklin Strategic Income Fund Franklin U.S Core Equity Fund
2012 2011 2012 2011
Series A $ 6.98 $ 6.57 Series A $ 8.57 $ 8.31
Series F $ 7.69 $ 7.18 Series F $ 9.08 $ 8.70
Series I $11.42 $10.72 Series O $ 9.88 $ 9.32
Series O $ 8.67 $ 8.00
Franklin U.S. Rising Dividends Fund Franklin World Growth Fund
2012 2011 2012 2011
Series A $22.72 $21.82 Series A $10.25 $ 8.85
Series F $25.93 $24.62 Series F $10.42 $ 8.90
Series O $31.14 $29.16 Series O $10.68 $ 8.98
Series T $ 7.87 $ 8.19 Series T $13.55 $12.61
Bissett All Canadian Focus Fund Bissett Bond Fund
2012 2011 2012 2011
Series A $13.61 $12.91 Series A $12.82 $12.90
Series F $14.91 $13.99 Series F $13.91 $13.89
Series I $16.01 $15.10 Series I $13.25 $13.29
Series O $16.87 $15.58 Series O $15.32 $15.17
Franklin Templeton Investments Funds 249

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
13. Trading Net Asset Value (Continued)
Bissett Canadian Balanced Fund Bissett Canadian Dividend Fund
2012 2011 2012 2011
Series A $ 26.48 $24.45 Series A $14.26 $13.48
Series F $ 30.87 $28.11 Series F $15.72 $14.69
Series I $ 27.72 $25.42 Series O $17.69 $16.33
Series O $ 35.02 $31.55
Series T $ 7.74 $ 7.73
Bissett Canadian Equity Fund Bissett Canadian High Dividend Fund
2012 2011 2012 2011
Series A $ 74.86 $66.99 Series A $14.59 $14.48
Series F $ 86.78 $76.66 Series F $16.62 $16.31
Series I $ 80.86 $71.89 Series I $15.60 $15.41
Series O $101.38 $88.50 Series O $19.54 $18.91
Bissett Canadian Short Term Bond Fund Bissett Corporate Bond Fund
2012 2011 2012 2011
Series A $ 9.61 $ 9.73 Series A $10.17 $10.02
Series F $ 10.08 $10.15 Series F $10.51 $10.29
Series O $ 10.84 $10.83 Series I $10.64 $10.44
Series O $11.16 $10.82
Bissett Dividend Income Fund Bissett Focus Balanced Fund
2012 2011 2012 2011
Series A $ 27.71 $26.36 Series A $11.71 $11.17
Series F $ 32.03 $30.11 Series F $12.24 $11.54
Series I $ 30.02 $28.42 Series I $12.04 $11.40
Series O $ 37.55 $34.88 Series O $12.89 $11.99
Series T $ 10.36 $10.49 Series T $13.86 $14.03
Bissett Microcap Fund Bissett Small Cap Fund
2012 2011 2012 2011
Series A $ 22.45 $20.36 Series A $50.35 $46.73
Series F $ 26.18 $23.41 Series F $57.19 $52.49
Series O $ 35.01 $30.56 Series O $71.00 $63.99
Bissett Strategic Income Fund Bissett U.S. Focus Fund
2012 2011 2012 2011
Series A $ 10.66 $10.17 Series O $ 9.50 $ 9.08
Series F $ 10.78 $10.17
Series I $ 10.72 $10.17
Series O $ 10.91 $10.17
Mutual Beacon Fund Mutual Global Discovery Fund
2012 2011 2012 2011
Series A $ 4.41 $ 3.94 Series A $13.46 $12.13
Series F $ 5.05 $ 4.46 Series F $14.97 $13.33
Series I $ 4.87 $ 4.31 Series I $ 9.95 $ 8.89
Series O $ 6.08 $ 5.29 Series O $17.41 $15.28
Series T $ 5.15 $ 4.97 Series T $ 7.66 $ 7.47
Series T USD $10.66 $10.08
250 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
13. Trading Net Asset Value (Continued)
Franklin Templeton Canadian Core Equity Fund Franklin Templeton Canadian Large Cap Fund
2012 2011 2012 2011
Series O $ 7.15 $ 7.62 Series O $8.63 $7.82
Franklin Templeton Global Blend Fund
2012 2011
Series A $12.26 $11.22
Series F $12.82 $11.60
Series I $12.64 $11.47
Series O $13.52 $12.07
Series T $14.53 $14.09
Series T USD $18.04 $16.99
(b) Series T USD
Series T USD units are only offered in USD. Below is the CAD equivalent of the Series T USD GAAP net assets for the Funds, where applicable,
as at December 31, 2012 and December 31, 2011.
2012 2011
Templeton Global Balanced Fund ............................................................. $ 7.32 $ 7.00
Mutual Global Discovery Fund ................................................................ $10.59 $10.27
Franklin Templeton Global Blend Fund ......................................................... $17.92 $17.31
14. Other Information
(a) Unfunded credit agreements
Certain Funds may enter into credit agreements, all or a portion of which may be unfunded. The Fund is obligated to fund these credit
agreements at the issuer’s discretion. Unfunded credit agreements, and funded portions of the agreements are marked to market daily and
any unrealized gain or loss is included in the Statement of Net Assets and the Statement of Operations. Funded portions of credit agreements
are presented on the Statement of Investments. Unfunded commitments, as at December 31, 2012 and December 31, 2011, are
listed below.
Issuer
Mutual Beacon Fund
December 31,
2012
December 31,
2011
(000s) (000s)
Realogy Corp., Floating Rate Note, 4/10/2016 .................................................... $ — $1,058
Franklin Strategic Income Fund
EnviroSolutions Real Property Holdings Inc., 7/29/2013 ............................................ — 454
(b) Cash Collateral
Certain Funds may enter into OTC derivatives which are subject to the terms of the ISDA Master Agreements. These agreements contain
various provisions, including collateral requirements.
As at December 31, 2012, the following Funds held collateral in the following amounts:
Templeton Global Bond Fund ..................................................................................... $14,585,000
Franklin High Income Fund ....................................................................................... $ 370,000
Templeton Global Balanced Fund .................................................................................. $ 620,000
Franklin Templeton Investments Funds 251

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
14. Other Information (Continued)
(c) Fund Mergers
As of close of business on June 24, 2011, following regulatory and unitholder approval, Bissett Multinational Growth Fund (the “Terminated
Fund”) was merged with Franklin World Growth Fund (the “Continuing Fund”). As a result, the Continuing Fund acquired all the net assets
of the Terminated Fund at fair market value in exchange for units of the same series of the Continuing Fund of equal value as noted below.
The unitholders of the Terminated Fund became unitholders of the Continuing Fund and the Terminated Fund was wound up. The capital
losses of the Terminated Fund, in the amount of $64,969,662, expired unutilized as of the merger date. There were no non-capital losses
available to either fund at the time of the merger. The financial statements of the Continuing Fund do not include the operating results of
the Terminating Fund prior to the date of the merger.
The following provides details of the assets of the Terminated Fund acquired by the Continuing Fund and the number of units of the Continuing
Fund issued in exchange for the assets of the Terminated Fund:
Terminated Fund Series Continuing Fund Series
Net Assets acquired
by Continuing Fund
from Terminated
Fund
Units of Continuing
Fund Issued
(000s)
Bissett Multinational Growth Fund ................ A Franklin World Growth Fund A $17,578 1,736,968
F F 5,608 554,133
O O 2,277 224,803
T T 775 51,024
15. Financial Statements Presentation
Certain of the 2011 comparative disclosures have been restated to conform with current period presentation. These changes did not impact
the net assets, trading net asset value per unit, or results of operations of any Fund.
The amounts shown on the Statements of Net Assets and the Statements of Operations and Changes in Net Assets are rounded to the
nearest thousand. As a result, balances reported may include amounts rounded to zero. Per unit amounts and number of units outstanding
shown are actual amounts.
16. Currency Legend
Below is a list of currency abbreviations which may be used throughout the financial statements.
AED Utd. Arab Emir. Dirham MUR Mauritius Rupee
AUD Australian Dollar MXN Mexican Peso
BRL Brazilian Real MYR Malaysian Ringgit
BWP Botswana Pula NGN Nigerian Naira
CAD Canadian Dollar NOK Norwegian Kroner
CHF Swiss Franc OMR Omani Rial
CLP Chilean Peso PEN Peruvian Nuevo Sol
DKK Danish Krone PHP Philippine Peso
EGP Egyptian Pound PKR Pakistan Rupee
EUR Euro PLN Polish Zloty
GBP British Pound QAR Qatari Rial
GHS Ghanaian New Cedi RON Romanian New Lei
HKD Hong Kong Dollar RUB Russian Rouble
HUF Hungarian Forint SEK Swedish Krona
IDR Indonesian Rupiah SGD Singapore Dollar
ILS Israeli New Shekel THB Thai Baht
INR Indian Rupee TRY Turkish Lira
JOD Jordanian Dinar TWD Taiwan Dollar
JPY Japanese Yen USD US Dollar
KES Kenyan Shilling UYU Uruguayan Peso
KRW South-Korean Won VND Vietnamese Dong
LKR Sri Lanka Rupee ZAR South African Rand
LVL Latvian Lats
252 Franklin Templeton Investments Funds

Franklin Templeton Investments Funds
NOTES TO FINANCIAL STATEMENTS For the periods ended December 31, 2012 and 2011 (Continued)
17. Subsequent Events
Fund Closures
Subject to regulatory and unitholder approvals, Franklin Templeton U.S. Money Market Fund and Franklin Templeton Global Blend Fund
will be terminated on or about April 16, 2013. The Funds and series ceased offering units for purchase on February 14, 2013.
18. Regulatory Developments
International Financial Reporting Standards (IFRS)
The Canadian Accounting Standards Board (“AcSB”) confirmed that effective January 1, 2011, IFRS replaced current Canadian standards
and interpretations as Canadian GAAP for publicly accountable enterprises, which includes investment funds. The adoption of IFRS for
investment companies will not be mandatory until periods beginning on or after January 1, 2014.The deferral of the mandatory changeover
was intended to allow the International Accounting Standard Board’s (“IASB”) proposed exemption from consolidation for investment
companies to be in place prior to the adoption of IFRS by investment companies in Canada.
In October 2012, the IASB approved the proposed amendments to IFRS 10, “Consolidated Financial Statements”, which define criteria for
an entity to qualify as an investment entity and exempts such entity from consolidation requirements. The amendments define an investment
entity and introduce an exception to consolidating particular subsidiaries for investment entities. These amendments require an
investment entity to measure those subsidiaries at fair value through profit or loss in accordance with IFRS 9, “Financial Instruments” and
expand disclosures to help users evaluate the nature and financial effect of its investment activities. The amendment will be effective January
1, 2014. Based on the Manager’s assessment, each of the Funds currently meet the proposed criteria for an investment entity and as
such will be exempt from consolidation requirements.
The Manager has developed a plan to meet the timetable published by the CICA for the changeover to IFRS. The key elements of the plan
include an assessment of differences between Canadian GAAP and IFRS, changes required to financial statement disclosure and impact
on the current process for financial reporting purposes.
Based on the Manager’s assessment of the accounting differences between Canadian GAAP and IFRS, the following areas of differences
were identified:
(a) IAS 32, “Financial Instruments: Presentation”, requires puttable instruments to be classified as a liability unless certain conditions are
met. The Funds’ unitholders’ equity meets the definition of a puttable instrument. The Manager has assessed each of the Funds’
unitholder structure and has determined the liability treatment is the most appropriate classification.
(b) IFRS 13, “Fair Value Measurements”, was published in May 2011. The standard provides guidance on the measurement of fair value
and allows for the use of closing market prices to value investments. Under Canadian GAAP the fair value of investments for financial
statement reporting purposes, was required to be measured at closing bid price for long positions and closing ask price for short
positions. The Manager has assessed the guidance that will apply under IFRS and has determined that the use of closing market
prices is appropriate in valuing investments.
A Statement of Cash Flow will be required for IFRS reporting purposes. The Manager has presently determined that the impact of IFRS will
also include additional note disclosure and modifications to existing presentation. The Manager does not expect that the trading net asset
value or trading net asset value per unit will be impacted by the changeover to IFRS.
Franklin Templeton Investments Funds 253

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying financial statements have been prepared and approved by Franklin Templeton Investments Corp., the manager and trustee
(the “Manager”) of the Franklin Templeton Investments family of funds (collectively the “Funds”). The Funds’ Manager is responsible for the
information and representations contained in these financial statements and the other sections of the Annual Report.
The Manager maintains appropriate processes to ensure that relevant and reliable financial information is produced. The financial statements
have been prepared in accordance with accounting principles generally accepted in Canada and include certain amounts that are based on
estimates and judgments. The significant accounting policies which management believes are appropriate for the Funds are described in Note 2
to the financial statements.
PricewaterhouseCoopers LLP are the external auditors of the Funds, appointed by the unitholders. They have audited the financial statements in
accordance with Canadian generally accepted auditing standards to enable them to express to the unitholders their opinion on the financial
statements. Their report is set out on the following page.
D.F. REED
Chief Executive Officer,
Franklin Templeton Investments Corp.
D.A. BUCHANAN
Fund Treasurer
Franklin Templeton Investments Corp.
254 Franklin Templeton Investments Funds

To the Unitholders and Trustees of:
Templeton Funds
Templeton Asian Growth Fund
Templeton Canadian Balanced Fund
Templeton Canadian Stock Fund
Templeton EAFE Developed Market Fund
Templeton Emerging Markets Fund
Templeton Frontier Markets Fund
Franklin Funds
Franklin Flex Cap Growth Fund
Franklin High Income Fund
Franklin Strategic Income Fund
Bissett Funds
Bissett All Canadian Focus Fund
Bissett Bond Fund
Bissett Canadian Balanced Fund
Bissett Canadian Dividend Fund
Bissett Canadian Equity Fund
Bissett Canadian High Dividend Fund
Bissett Canadian Short Term Bond Fund
INDEPENDENT AUDITOR’S REPORT
Templeton Global Bond Fund
Templeton Global Balanced Fund
(formerly, Templeton Global Income Fund)
Templeton Global Smaller Companies Fund
Templeton International Stock Fund
Franklin U.S. Core Equity Fund
Franklin U.S. Rising Dividends Fund
Franklin World Growth Fund
Bissett Corporate Bond Fund
Bissett Dividend Income Fund
Bissett Focus Balanced Fund
Bissett Microcap Fund
Bissett Small Cap Fund
Bissett Strategic Income Fund
Bissett U.S. Focus Fund
Mutual Series Funds
Mutual Beacon Fund Mutual Global Discovery Fund
(formerly, Mutual Discovery Fund)
Franklin Templeton Funds
Franklin Templeton Canadian Core Equity Fund
Franklin Templeton Canadian Large Cap Fund
Franklin Templeton Global Blend Fund
(collectively referred to as the “Funds”)
Franklin Templeton Money Market Fund
Franklin Templeton Treasury Bill Fund
Franklin Templeton U.S. Money Market Fund
We have audited the accompanying financial statements of each of the Funds, which comprise the statement of investment portfolio as at
December 31, 2012, the statements of net assets as at December 31, 2012 and December 31, 2011 (as applicable) and the statements of
operations and changes in net assets for the periods then ended, as indicated in Note 1 to the Financial Statements, and the related notes,
which comprise a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements of each of the Funds in accordance with
Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial statements of each of the Funds based on our audits. We conducted our audits in
accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
Franklin Templeton Investments Funds 255

INDEPENDENT AUDITOR’S REPORT (Continued)
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained in each of our audits is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements of each of the Funds present fairly, in all material respects, the financial position of each of the Funds as
at December 31, 2012 and December 31, 2011 (as applicable) and the results of each of their operations and the changes in each of their net
assets for the periods as indicated in Note 1, in accordance with Canadian generally accepted accounting principles.
Toronto, Ontario Chartered Accountants, Licensed Public Accountants
March 20, 2013
256 Franklin Templeton Investments Funds

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Franklin Templeton Investments is one of the world’s largest publicly-traded investment
management companies, delivering a truly global perspective to investors for over 60 years.
With values that have withstood the test of time, Franklin Templeton Investments provides
global and domestic investment advisory services to the Franklin, Templeton, Bissett and
Mutual Series funds and institutional accounts, including private wealth management
solutions through Fiduciary Trust Company of Canada.
www.franklintempleton.ca
Franklin Templeton Investments Corp.
5000 Yonge Street, Suite 900
Toronto, ON, M2N 0A7
Client Services: 416.364.4672 Fax: 416.364.1163
Client Services Toll-free: 1.800.387.0830 Toll-free Fax: 1.866.850.8241
TTY: 1.800.908.8145
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Canadian offices:
VANCOUVER • CALGARY • WINNIPEG • TORONTO • OTTAWA • MONTREAL • HALIFAX
NYSE: BEN
IFIC
A Member of The Investment
Funds
Institute of Canada
Commissions, trailing commissions, management fees and expenses all may be associated
with mutual fund investments. Please read the Franklin Templeton Investments Funds’
prospectus before investing. Mutual fund securities are not covered by the Canada Deposit
Insurance Corporation or by any other government deposit insurer. There can be no assurances
that the money market funds will be able to maintain their net asset value per security at a
constant amount or that the full amount of your investment in the fund(s) will be returned to
you. Unit/share values change frequently and past performance may not be repeated.
Fiduciary Trust Company of Canada is a wholly owned subsidiary of Franklin Templeton
Investments Corp.
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