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 <strong>Templeton</strong> 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 <strong>Templeton</strong> Investments Funds
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