Q2 Dealer Facts Guide - Franklin Templeton

DEALER USE ONLY/NOT FOR DISTRIBUTION TO THE PUBLIC 

JUNE 30, 2009 

Q2 Dealer Facts Guide 

VALUE BLEND GROWTH SECTOR GLOBAL INTERNATIONAL HYBRID ASSET ALLOCATION FIXED INCOME TAX-FREE INCOME

Table of Contents 

OPEN-END FUND PROFILES 

VALUE 

Franklin All Cap Value Fund . . . . . . . . . . . . . . . . . . . . 13 

Franklin Balance Sheet Investment Fund . . . . . . . . . . 14 

Franklin Large Cap Value Fund . . . . . . . . . . . . . . . . . . 15 

CLOSED Franklin MicroCap Value Fund . . . . . . . . . . . . . . . . . . . 16 

Franklin MidCap Value Fund . . . . . . . . . . . . . . . . . . . . 17 

Franklin Small Cap Value Fund . . . . . . . . . . . . . . . . . . 18 

Mutual Beacon Fund . . . . . . . . . . . . . . . . . . . . . . . . . 19 

Mutual Quest Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 20 

Mutual Recovery Fund . . . . . . . . . . . . . . . . . . . . . . . . 21 

Mutual Shares Fund . . . . . . . . . . . . . . . . . . . . . . . . . 22 

BLEND 

Franklin Focused Core Equity Fund . . . . . . . . . . . . . . . 23 

Franklin Large Cap Equity Fund . . . . . . . . . . . . . . . . . 24 

Franklin Rising Dividends Fund . . . . . . . . . . . . . . . . . 25 

GROWTH 

Franklin Flex Cap Growth Fund . . . . . . . . . . . . . . . . . . 26 

Franklin Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . 27 

Franklin Growth Opportunities Fund . . . . . . . . . . . . . . 28 

Franklin Small Cap Growth Fund . . . . . . . . . . . . . . . . 29 

Franklin Small-Mid Cap Growth Fund . . . . . . . . . . . . . 30 

SECTOR 

Franklin Biotechnology Discovery Fund . . . . . . . . . . . . 31 

Franklin DynaTech Fund . . . . . . . . . . . . . . . . . . . . . . . 32 

Franklin Global Real Estate Fund . . . . . . . . . . . . . . . . 33 

Franklin Gold and Precious Metals Fund . . . . . . . . . . . 34 

Franklin Natural Resources Fund . . . . . . . . . . . . . . . . 35 

Franklin Real Estate Securities Fund . . . . . . . . . . . . . . 36 

Franklin Utilities Fund . . . . . . . . . . . . . . . . . . . . . . . . 37 

Mutual Financial Services Fund . . . . . . . . . . . . . . . . . 38 

GLOBAL 

Mutual Global Discovery Fund . . . . . . . . . . . . . . . . . . 39 

Templeton Global Long-Short Fund . . . . . . . . . . . . . . . 40 

Templeton Global Opportunities Trust . . . . . . . . . . . . . 41 

Templeton Global Smaller Companies Fund . . . . . . . . . 42 

Templeton Growth Fund . . . . . . . . . . . . . . . . . . . . . . . 43 

Templeton World Fund . . . . . . . . . . . . . . . . . . . . . . . . 44 

KEY INFORMATION 

PERFORMANCE SUMMARY 

Open-End Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 

Variable Insurance Funds . . . . . . . . . . . . . . . . . . . . . . . 9 

Selected Index Returns . . . . . . . . . . . . . . . . . . . . . . . . 11 

Closed-End Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

Money Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

Franklin Templeton 529 College Savings Plan . . . . 121 

Footnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 

Fund Sales Charges and Commissions . . . . . . . . . . 128 

INTERNATIONAL 

Franklin India Growth Fund . . . . . . . . . . . . . . . . . . . . . . . 45 

Franklin International Growth Fund . . . . . . . . . . . . . . . . . 46 

Franklin International Small Cap Growth Fund . . . . . . . . . 47 

Mutual European Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 48 

NEW Mutual International Fund . . . . . . . . . . . . . . . . . . . . . . . . 49 

Templeton BRIC Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 

Templeton China World Fund . . . . . . . . . . . . . . . . . . . . . . 51 

Templeton Developing Markets Trust . . . . . . . . . . . . . . . . 52 

Templeton Emerging Markets Small Cap Fund . . . . . . . . . 53 

Templeton Foreign Fund . . . . . . . . . . . . . . . . . . . . . . . . . 54 

Templeton Foreign Smaller Companies Fund . . . . . . . . . . .55 

Templeton Frontier Markets Fund . . . . . . . . . . . . . . . . . . . 56 

HYBRID 

Franklin Balanced Fund . . . . . . . . . . . . . . . . . . . . . . . . . 57 

Franklin Convertible Securities Fund . . . . . . . . . . . . . . . . 58 

Franklin Equity Income Fund . . . . . . . . . . . . . . . . . . . . . . 59 

Franklin Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 

Templeton Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . 61 

ASSET ALLOCATION 

Franklin Templeton Corefolio Allocation Fund . . . . . . . . . . 62 

Franklin Templeton Founding Funds Allocation Fund . . . . . 63 

Franklin Templeton Perspectives Allocation Fund . . . . . . . 64 

Franklin Templeton Conservative Target Fund . . . . . . . . . . 65 

Franklin Templeton Moderate Target Fund . . . . . . . . . . . . 66 

Franklin Templeton Growth Target Fund . . . . . . . . . . . . . . 67 

Franklin Templeton 2015 Retirement Target Fund . . . . . . . 68 




FIXED INCOME 

Franklin Adjustable U.S. Government Securities Fund . . . . 70 

Franklin Floating Rate Daily Access Fund . . . . . . . . . . . . . 71 

Franklin High Income Fund . . . . . . . . . . . . . . . . . . . . . . . 72 

Franklin Limited Maturity 

U.S. Government Securities Fund . . . . . . . . . . . . . . . . . . 73 

Franklin Low Duration Total Return Fund . . . . . . . . . . . . . 74 

Franklin Real Return Fund . . . . . . . . . . . . . . . . . . . . . . . 75 

Franklin Strategic Income Fund . . . . . . . . . . . . . . . . . . . . 76 

Franklin Strategic Mortgage Portfolio . . . . . . . . . . . . . . . . 77 

Franklin Total Return Fund . . . . . . . . . . . . . . . . . . . . . . . 78 

Franklin U.S. Government Securities Fund . . . . . . . . . . . . 79 

Franklin Templeton Hard Currency Fund . . . . . . . . . . . . . . 80 

Templeton Global Bond Fund . . . . . . . . . . . . . . . . . . . . . . 81 

Templeton Global Total Return Fund . . . . . . . . . . . . . . . . . 82 

Templeton International Bond Fund . . . . . . . . . . . . . . . . . 83 

Franklin Money Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 

WHOLESALER LISTINGS 

Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 131 

Offshore Products . . . . . . . . . . . . . . . . . . . . . . . . . . 131 

Retirement Division . . . . . . . . . . . . . . . . . . . . . . . . . 131 

Independent and Bank Division . . . . . . . . . . . . . . . . 132 

NYSE Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 

Contact Us 

Telephone Numbers and Mailing Addresses . . . . . . . 136

TAX-FREE INCOME 

National 

Franklin Double Tax-Free Income Fund . . . . . . . . . . . . . . . . 85 

Franklin Federal Tax-Free Income Fund . . . . . . . . . . . . . . . . 85 

Franklin High Yield Tax-Free Income Fund . . . . . . . . . . . . . 86 

Franklin Insured Tax-Free Income Fund . . . . . . . . . . . . . . . 86 

Intermediate-/Limited-Term 

Franklin California Intermediate-Term Tax-Free Income Fund 87 

Franklin Federal Intermediate-Term Tax-Free Income Fund . . 87 

Franklin Federal Limited-Term Tax-Free Income Fund . . . . . 88 

Franklin New York Intermediate-Term Tax-Free Income Fund 88 

State 

Franklin Alabama Tax-Free Income Fund . . . . . . . . . . . . . . . 89 

Franklin Arizona Tax-Free Income Fund . . . . . . . . . . . . . . . . 89 

Franklin California High Yield Municipal Fund . . . . . . . . . . . 90 

Franklin California Insured Tax-Free Income Fund . . . . . . . . 90 

Franklin California Tax-Free Income Fund . . . . . . . . . . . . . . 91 

Franklin Colorado Tax-Free Income Fund . . . . . . . . . . . . . . . 91 

Franklin Connecticut Tax-Free Income Fund . . . . . . . . . . . . 92 

Franklin Florida Tax-Free Income Fund . . . . . . . . . . . . . . . . 92 

Franklin Georgia Tax-Free Income Fund . . . . . . . . . . . . . . . 93 

Franklin Kentucky Tax-Free Income Fund . . . . . . . . . . . . . . 93 

Franklin Louisiana Tax-Free Income Fund . . . . . . . . . . . . . . 94 

Franklin Maryland Tax-Free Income Fund . . . . . . . . . . . . . . 94 

Franklin Massachusetts Tax-Free Income Fund . . . . . . . . . . 95 

Franklin Michigan Tax-Free Income Fund . . . . . . . . . . . . . . 95 

Franklin Minnesota Tax-Free Income Fund . . . . . . . . . . . . . 96 

Franklin Missouri Tax-Free Income Fund . . . . . . . . . . . . . . . 96 

Franklin New Jersey Tax-Free Income Fund . . . . . . . . . . . . . 97 

Franklin New York Insured Tax-Free Income Fund . . . . . . . . 97 

Franklin New York Tax-Free Income Fund . . . . . . . . . . . . . . 98 

Franklin North Carolina Tax-Free Income Fund . . . . . . . . . . 98 

Franklin Ohio Tax-Free Income Fund . . . . . . . . . . . . . . . . . . 99 

Franklin Oregon Tax-Free Income Fund . . . . . . . . . . . . . . . . 99 

Franklin Pennsylvania Tax-Free Income Fund . . . . . . . . . . 100 

Franklin Tennessee Municipal Bond Fund . . . . . . . . . . . . . 100 

Franklin Virginia Tax-Free Income Fund . . . . . . . . . . . . . . 101 

Franklin California Tax-Exempt Money Fund . . . . . . . . . . . 102 

CLOSED Franklin New York Tax-Exempt Money Fund . . . . . . . . . . . 102 

Franklin Tax-Exempt Money Fund . . . . . . . . . . . . . . . . . . . 102 

The enclosed material is authorized for Dealer Use Only and shall not be distributed 

to the public. To order fund-specific sales and marketing tools, please call Sales and 

Marketing Services at (800) 223-2141. 

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE 

JUNE 30, 2009 

VARIABLE INSURANCE FUND PROFILES 

Trust Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 

VALUE 

Franklin Large Cap Value Securities Fund . . . . . . . . . . . . . . 103 

Franklin Small Cap Value Securities Fund . . . . . . . . . . . . . 104 

Mutual Shares Securities Fund . . . . . . . . . . . . . . . . . . . . . 104 

BLEND 

Franklin Rising Dividends Securities Fund . . . . . . . . . . . . . 105 

GROWTH 

Franklin Flex Cap Growth Securities Fund . . . . . . . . . . . . . 105 

Franklin Large Cap Growth Securities Fund . . . . . . . . . . . . 106 

Franklin Small-Mid Cap Growth Securities Fund . . . . . . . . . 106 

SECTOR 

Franklin Global Real Estate Securities Fund . . . . . . . . . . . . 107 

GLOBAL 

Mutual Global Discovery Securities Fund . . . . . . . . . . . . . . 107 

Templeton Global Asset Allocation Fund . . . . . . . . . . . . . . . 108 

Templeton Growth Securities Fund . . . . . . . . . . . . . . . . . . . 108 

INTERNATIONAL 

NEW Mutual International Securities Fund . . . . . . . . . . . . . . . . .109 

Templeton Developing Markets Securities Fund . . . . . . . . . . . 109 

Templeton Foreign Securities Fund . . . . . . . . . . . . . . . . . . 110 

HYBRID 

Franklin Growth and Income Securities Fund . . . . . . . . . . . 110 

Franklin Income Securities Fund . . . . . . . . . . . . . . . . . . . . 111 


Franklin Templeton VIP Founding Funds Allocation Fund . . . . 111 

FIXED INCOME 

Franklin High Income Securities Fund . . . . . . . . . . . . . . . . 112 

Franklin Strategic Income Securities Fund . . . . . . . . . . . . . 112 

Franklin U.S. Government Fund . . . . . . . . . . . . . . . . . . . . . 113 

Franklin Zero Coupon Fund – 2010 . . . . . . . . . . . . . . . . . . 113 

Templeton Global Bond Securities Fund . . . . . . . . . . . . . . . 114 

SEPARATE ACCOUNTS STRATEGY PROFILES 

Availability Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 

Franklin Portfolio Advisors 

All Cap Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 

Intermediate Fixed Income . . . . . . . . . . . . . . . . . . . . . . . . 116 

Intermediate Municipal Fixed Income . . . . . . . . . . . . . . . . 117 

Mid Cap Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 

Multi Strategy Municipal Fixed Income . . . . . . . . . . . . . . . 118 

Small Cap Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 

Templeton Portfolio Advisors 

Global Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 

International Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 

Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120


Performance Summary 

Ongoing market volatility can dramatically impact the fund’s short-term 

performance. Call (800) 342-5236 or go to franklintempleton.com for the 

most recent month-end performance. 

OPEN-END FUNDS 

VALUE 

This material is for dealer use only and has not been filed with FINRA for use with the public. 

AVERAGE ANNUAL TOTAL RETURN AVERAGE ANNUAL TOTAL RETURN 

WITHOUT SALES CHARGES 5 WITH SALES CHARGES 6 

Symbol Inception 1 1-Year 5-Year 10-Year Inception 1-Year 5-Year 10-Year Inception 

6/30/09 

Franklin All Cap Value–A 9 FRAVX 6/1/07 13 

Franklin All Cap Value–C 9 — 6/1/07 13 

Franklin All Cap Value–ADV9 — 6/1/07 13 

Franklin Balance Sheet Investment–A 13, 20 FRBSX 4/2/90 14 

Franklin Balance Sheet Investment–C 13 FCBSX 3/1/01 14 

Franklin Balance Sheet Investment–ADV13, 43 FBSAX 4/2/90 14 

Franklin Large Cap Value–A 13 FLVAX 6/1/00 15 

Franklin Large Cap Value–C 13 FLCVX 6/1/00 15 

Franklin Large Cap Value–ADV13, 43 — 6/1/00 15 

Franklin MicroCap Value–A 13, 46 FRMCX 12/12/95 16 

Franklin MicroCap Value–ADV13, 43 FVRMX 12/12/95 16 

Franklin MidCap Value–A 9 FMVAX 7/1/05 17 

Franklin MidCap Value–C 9 FMVCX 7/1/05 17 

Franklin MidCap Value–ADV9 — 7/1/05 17 

Franklin Small Cap Value–A 13, 46 FRVLX 3/11/96 18 

Franklin Small Cap Value–C 13 FRVFX 9/3/96 18 

Franklin Small Cap Value–ADV13, 43 FVADX 3/11/96 18 

Mutual Beacon–A 13, 18, 23 TEBIX 6/29/62 19 

Mutual Beacon–C 13, 18, 23 TEMEX 6/29/62 19 

Mutual Beacon–Z13, 18, 23 BEGRX 6/29/62 19 

Mutual Quest–A 13, 23, 80 TEQIX 9/26/80 20 

Mutual Quest–C 13, 23, 80 TEMQX 9/26/80 20 

Mutual Quest–Z13, 23, 80 MQIFX 9/26/80 20 

Mutual Recovery–A 77 FMRAX 6/2/03 21 

Mutual Recovery–C 77 FCMRX 6/2/03 21 

Mutual Recovery–ADV77 FMRVX 6/2/03 21 

Mutual Shares–A 13, 23, 34 TESIX 7/1/49 22 

Mutual Shares–C 13, 23, 34 TEMTX 7/1/49 22 

Mutual Shares–Z13, 23, 34 BLEND 

MUTHX 7/1/49 22 

Franklin Focused Core Equity–A 9 — 12/13/07 23 

Franklin Focused Core Equity–C 9 — 12/13/07 23 

Franklin Focused Core Equity–ADV9 — 12/13/07 23 

Franklin Large Cap Equity–A 9, 63 — 12/11/98 24 

Franklin Large Cap Equity–C 9, 63 — 12/11/98 24 

Franklin Large Cap Equity–ADV9, 63 FLCIX 12/11/98 24 

Franklin Rising Dividends–A 13, 46 FRDPX 1/14/87 25 

Franklin Rising Dividends–C 13 FRDTX 5/1/95 25 

Franklin Rising Dividends–ADV13, 43 GROWTH 

FRDAX 1/14/87 25 

Franklin Flex Cap Growth–A 13, 62 FKCGX 10/30/91 26 

Franklin Flex Cap Growth–C 13, 62 FCIIX 9/3/96 26 

Franklin Flex Cap Growth–ADV13, 43, 62 -27.89% —% —% -20.52% -32.02% —% —% -22.75% 

-28.47 — — -21.06 -29.19 — — -21.06 

-27.70 — — -20.25 -27.70 — — -20.25 

-31.62 -2.08 4.64 9.43 -35.55 -3.23 4.03 9.10 

-32.20 -2.83 — 2.85 -32.85 -2.83 — 2.85 

-30.47 -1.56 5.00 9.63 -30.47 -1.56 5.00 9.63 

-28.38 -3.79 — 1.78 -32.52 -4.93 — 1.12 

-28.84 -4.43 — 1.13 -29.55 -4.43 — 1.13 

-28.12 -3.55 — 1.92 -28.12 -3.55 — 1.92 

-16.82 1.11 8.80 10.25 -21.59 -0.09 8.15 9.77 

-16.60 1.29 8.89 10.33 -16.60 1.29 8.89 10.33 

-27.20 — — -5.39 -31.37 — — -6.79 

-27.79 — — -6.04 -28.52 — — -6.04 

-27.06 — — -5.09 -27.06 — — -5.09 

-26.89 0.05 5.41 6.58 -31.10 -1.13 4.78 6.11 

-27.41 -0.64 4.69 5.41 -28.13 -0.64 4.69 5.41 

-26.68 0.36 5.75 6.99 -26.68 0.36 5.75 6.99 

-25.52 -1.08 2.90 7.41 -29.79 -2.25 2.29 7.28 

-26.01 -1.74 2.22 6.47 -26.72 -1.74 2.22 6.47 

-25.28 -0.75 3.25 7.93 -25.28 -0.75 3.25 7.93 

-13.79 4.86 5.83 13.13 -18.73 3.62 5.20 12.90 

-14.38 4.16 5.14 12.15 -15.16 4.16 5.14 12.15 

-13.50 5.21 6.19 13.67 -13.50 5.21 6.19 13.67 

-27.77 -2.44 — 1.07 -31.93 -3.59 — 0.09 

-28.31 -3.07 — 0.43 -29.02 -3.07 — 0.43 

-27.61 -2.11 — 1.42 -27.61 -2.11 — 1.42 

-23.79 -0.88 2.71 11.93 -28.17 -2.05 2.11 11.82 

-24.32 -1.54 2.04 10.27 -25.07 -1.54 2.04 10.27 

-23.55 -0.55 3.06 12.92 -23.55 -0.55 3.06 12.92 

-18.38 — — -22.85 -23.07 — — -25.74 

-19.04 — — -23.38 -19.84 — — -23.38 

-18.11 — — -22.56 -18.11 — — -22.56 

-29.23 -2.50 -2.28 -0.96 -33.30 -3.65 -2.86 -1.52 

-29.75 -3.24 -3.15 -1.83 -30.43 -3.24 -3.15 -1.83 

-29.04 -2.13 -1.82 -0.50 -29.04 -2.13 -1.82 -0.50 

-20.15 -2.28 2.90 7.74 -24.74 -3.43 2.29 7.46 

-20.74 -2.97 2.25 6.99 -21.52 -2.97 2.25 6.99 

-19.91 -2.09 3.00 7.79 -19.91 -2.09 3.00 7.79 

-24.21 -0.69 2.54 10.14 -28.56 -1.86 1.94 9.77 

-24.78 -1.44 1.78 5.64 -25.53 -1.44 1.78 5.64 

FKCAX 10/30/91 -24.00 -0.45 2.67 10.21 -24.00 -0.45 2.67 10.21 26 

Advisor Class and Class Z shares are only offered to certain eligible investors as stated in the prospectus. 

2 Dealer Facts Guide Go to franklintempleton.com or call (800) 223-2141 DEALER USE ONLY/NOT FOR DISTRIBUTION TO THE PUBLIC 

Fund 

Profile 

on 

Page

Performance Summary, cont’d. 





GROWTH, cont’d. 





6/30/09 

Franklin Growth–A47 FKGRX 3/31/48 27 

Franklin Growth–C FRGSX 5/1/95 27 

Franklin Growth–ADV 43 FCGAX 3/31/48 27 

Franklin Growth Opportunities–A 13 FGRAX 6/23/99 28 

Franklin Growth Opportunities–C 13 FKACX 6/23/99 28 

Franklin Growth Opportunities–ADV13 FRAAX 6/23/99 28 

Franklin Small Cap Growth–A 13 FSGRX 5/1/00 29 

Franklin Small Cap Growth–C 13 FCSGX 5/1/00 29 

Franklin Small Cap Growth–ADV13 FSSAX 5/1/00 29 

Franklin Small-Mid Cap Growth–A 13, 46, 52 FRSGX 2/14/92 30 

Franklin Small-Mid Cap Growth–C 13, 52 FRSIX 10/2/95 30 

Franklin Small-Mid Cap Growth–ADV13, 43, 52 SECTOR 

FSGAX 2/14/92 30 

Franklin Biotechnology Discovery–A13, 46 FBDIX 9/15/97 31 

Franklin DynaTech–A 47 FKDNX 1/1/68 32 

Franklin DynaTech–C FDYNX 9/16/96 32 

Franklin DynaTech–ADV 43 — 1/1/68 32 

Franklin Global Real Estate–A 9 FAGRX 6/16/06 33 

Franklin Global Real Estate–C 9 — 6/16/06 33 

Franklin Global Real Estate–ADV9 FVGRX 6/16/06 33 

Franklin Gold and Precious Metals–A 13, 42, 47 FKRCX 5/19/69 34 

Franklin Gold and Precious Metals–C 13, 42 FRGOX 5/1/95 34 

Franklin Gold and Precious Metals–ADV13, 42, 43 FGADX 5/19/69 34 

Franklin Natural Resources–A 13, 46 FRNRX 6/5/95 35 

Franklin Natural Resources–C 13 FNCRX 9/1/05 35 

Franklin Natural Resources–ADV13, 43 FNRAX 6/5/95 35 

Franklin Real Estate Securities–A 13, 46 FREEX 1/3/94 36 

Franklin Real Estate Securities–C 13 FRRSX 5/1/95 36 

Franklin Real Estate Securities–ADV13, 43 FRLAX 1/3/94 36 

Franklin Utilities–A 10 FKUTX 9/30/48 37 

Franklin Utilities–C FRUSX 5/1/95 37 

Franklin Utilities–ADV43 FRUAX 9/30/48 37 

Mutual Financial Services–A 13, 46 TFSIX 8/19/97 38 

Mutual Financial Services–C13 TMFSX 8/19/97 38 

Mutual Financial Services–Z13 GLOBAL 

TEFAX 8/19/97 38 

Mutual Global Discovery–A 13, 23, 92 TEDIX 12/31/92 39 

Mutual Global Discovery–C 13, 23, 92 TEDSX 12/31/92 39 

Mutual Global Discovery–Z13, 23, 92 MDISX 12/31/92 39 

Templeton Global Long-Short–A 13 TLSAX 7/31/01 40 

Templeton Global Long-Short–ADV13, 43 -20.65% -0.25% 0.02% 9.62% -25.21% -1.43% -0.57% 9.51% 

-21.21 -1.00 -0.73 5.02 -21.99 -1.00 -0.73 5.02 

-20.45 0.00 0.27 9.69 -20.45 0.00 0.27 9.69 

-25.97 1.83 3.36 4.13 -30.24 0.63 2.75 3.52 

-26.50 1.12 2.66 3.43 -27.24 1.12 2.66 3.43 

-25.71 2.14 3.68 4.46 -25.71 2.14 3.68 4.46 

-19.22 -3.03 — -0.37 -23.88 -4.17 — -1.01 

-19.78 -3.74 — -1.07 -20.57 -3.74 — -1.07 

-18.96 -2.78 — -0.08 -18.96 -2.78 — -0.08 

-26.12 -1.04 1.42 8.60 -30.37 -2.20 0.82 8.23 

-26.65 -1.78 0.66 4.50 -27.38 -1.78 0.66 4.50 

-25.94 -0.79 1.67 8.88 -25.94 -0.79 1.67 8.88 

-6.68 0.66 7.62 6.93 -12.04 -0.52 6.99 6.39 

-24.86 -0.82 0.52 7.77 -29.17 -1.99 -0.07 7.77 

-25.44 -1.57 -0.23 4.49 -26.11 -1.57 -0.23 4.49 

-24.68 -0.76 0.55 7.78 -24.68 -0.76 0.55 7.78 

-39.70 — — -17.96 -43.19 — — -19.55 

-40.20 — — -18.53 -40.76 — — -18.53 

-39.58 — — -17.70 -39.58 — — -17.70 

-21.04 18.18 16.51 6.35 -25.59 16.79 15.83 6.20 

-21.63 17.30 15.66 7.35 -22.41 17.30 15.66 7.35 

-20.84 18.46 16.80 6.53 -20.84 18.46 16.80 6.53 

-47.91 9.62 9.37 9.83 -50.91 8.32 8.72 9.36 

-48.29 — — -0.49 -48.77 — — -0.49 

-47.77 9.95 9.74 10.47 -47.77 9.95 9.74 10.47 

-46.80 -8.62 1.67 5.12 -49.87 -9.70 1.07 4.72 

-47.21 -9.30 0.91 4.21 -47.68 -9.30 0.91 4.21 

-46.69 -8.40 1.92 5.45 -46.69 -8.40 1.92 5.45 

-22.49 6.73 6.09 9.51 -25.77 5.81 5.62 9.43 

-22.85 6.22 5.56 7.26 -23.58 6.22 5.56 7.26 

-22.35 6.91 6.24 9.57 -22.35 6.91 6.24 9.57 

-20.31 -3.02 4.53 7.35 -24.91 -4.16 3.91 6.81 

-20.83 -3.68 3.83 6.64 -21.61 -3.68 3.83 6.64 

-20.04 -2.72 4.87 7.69 -20.04 -2.72 4.87 7.69 

-12.41 7.26 8.12 12.21 -17.44 6.00 7.48 11.80 

-13.06 6.52 7.40 11.46 -13.89 6.52 7.40 11.46 

-12.19 7.59 8.48 12.61 -12.19 7.59 8.48 12.61 

-25.29 -2.53 — -0.24 -29.60 -3.68 — -0.99 

— 7/31/01 -25.14 -2.23 — -0.05 -25.14 -2.23 — -0.05 40 


DEALER USE ONLY/NOT FOR DISTRIBUTION TO THE PUBLIC Go to franklintempleton.com or call (800) 223-2141 Dealer Facts Guide 3 

Fund 

Profile 

on 

Page 

PERFORMANCE SUMMARY







GLOBAL, cont’d. 




6/30/09 

Templeton Global Opportunities Trust–A 21 TEGOX 2/28/90 41 

Templeton Global Opportunities Trust–C TEGPX 5/1/95 41 

Templeton Global Opportunities Trust–ADV43 — 2/28/90 41 

Templeton Global Smaller Companies–A 21 TEMGX 6/1/81 42 

Templeton Global Smaller Companies–C TESGX 5/1/95 42 

Templeton Global Smaller Companies–ADV43 TGSAX 6/1/81 42 

Templeton Growth–A 21 TEPLX 11/29/54 43 

Templeton Growth–C TEGTX 5/1/95 43 

Templeton Growth–ADV43 TGADX 11/29/54 43 

Templeton World–A 21 TEMWX 1/17/78 44 

Templeton World–C TEWTX 5/1/95 44 

Templeton World–ADV 43 INTERNATIONAL 

TWADX 1/17/78 44 

Franklin India Growth–A9 — 1/31/08 45 

Franklin India Growth–C9 — 1/31/08 45 

Franklin India Growth–ADV9 FIGZX 1/31/08 45 

Franklin International Growth–A9 — 6/3/08 46 

Franklin International Growth–C9 — 6/3/08 46 

Franklin International Growth–ADV9 — 6/3/08 46 

Franklin International Small Cap Growth–A9 — 10/15/02 47 

Franklin International Small Cap Growth–C9 — 10/15/02 47 

Franklin International Small Cap Growth–ADV9 FKSCX 10/15/02 47 

Mutual European–A13, 23 TEMIX 7/3/96 48 

Mutual European–C13, 23 TEURX 7/3/96 48 

Mutual European–Z 13, 23 MEURX 7/3/96 48 

Mutual International–A 9 — 5/1/09 49 

Mutual International–C 9 — 5/1/09 49 

Mutual International–Z 9 — 5/1/09 49 

Templeton BRIC–A 13 TABRX 6/1/06 50 

Templeton BRIC–C 13 TPBRX 6/1/06 50 

Templeton BRIC–ADV13, 43 — 6/1/06 50 

Templeton China World–A 72 TCWAX 9/9/93 51 

Templeton China World–C 72 TCWCX 9/9/93 51 

Templeton China World–ADV72 TACWX 9/9/93 51 

Templeton Developing Markets Trust–A 13 TEDMX 10/16/91 52 

Templeton Developing Markets Trust–C 13 TDMTX 5/1/95 52 

Templeton Developing Markets Trust–ADV13, 43 TDADX 10/16/91 52 

Templeton Emerging Markets Small Cap–A 9 TEMMX 10/2/06 53 

Templeton Emerging Markets Small Cap–C 9 TCEMX 10/2/06 53 

Templeton Emerging Markets Small Cap–ADV9 — 10/2/06 53 

Templeton Foreign–A 21 TEMFX 10/5/82 54 

Templeton Foreign–C TEFTX 5/1/95 54 

Templeton Foreign–ADV43 -27.09% 3.76% 3.12% 7.63% -31.28% 2.54% 2.51% 7.30% 

-27.65 2.98 2.35 5.25 -28.35 2.98 2.35 5.25 

-27.09 3.76 3.12 7.63 -27.09 3.76 3.12 7.63 

-26.33 0.34 3.66 9.39 -30.56 -0.84 3.05 9.15 

-27.00 -0.44 2.89 4.02 -27.63 -0.44 2.89 4.02 

-26.17 0.58 3.93 9.53 -26.17 0.58 3.93 9.53 

-29.96 -2.23 2.29 12.34 -33.98 -3.38 1.68 12.22 

-30.52 -2.96 1.53 5.19 -31.20 -2.96 1.53 5.19 

-29.84 -1.99 2.54 12.42 -29.84 -1.99 2.54 12.42 

-25.00 1.27 2.31 11.68 -29.31 0.07 1.70 11.47 

-25.53 0.51 1.54 5.87 -26.24 0.51 1.54 5.87 

-24.78 1.43 2.39 11.71 -24.78 1.43 2.39 11.71 

3.59 — — -20.58 -2.43 — — -23.84 

2.88 — — -21.12 1.88 — — -21.12 

3.89 — — -20.33 3.89 — — -20.33 

-24.13 — — -29.32 -28.47 — — -33.11 

-24.61 — — -29.81 -25.36 — — -29.81 

-23.86 — — -29.08 -23.86 — — -29.08 

-14.27 11.07 — 17.33 -19.20 9.76 — 16.30 

-14.67 10.30 — 16.52 -15.23 10.30 — 16.52 

-14.19 11.44 — 17.73 -14.19 11.44 — 17.73 

-19.63 6.74 9.51 11.51 -24.25 5.49 8.87 11.00 

-20.21 6.01 8.80 10.82 -20.99 6.01 8.80 10.82 

-19.41 7.06 9.87 11.92 -19.41 7.06 9.87 11.92 

— — — 5.30 — — — -0.75 

— — — 5.10 — — — 4.10 

— — — 5.30 — — — 5.30 

-34.43 — — 2.50 -38.21 — — 0.55 

-34.81 — — 1.86 -35.46 — — 1.86 

-34.27 — — 2.58 -34.27 — — 2.58 

-9.08 15.45 13.97 8.40 -14.31 14.09 13.30 7.99 

-9.73 14.72 13.21 7.59 -10.52 14.72 13.21 7.59 

-8.82 15.84 14.38 8.83 -8.82 15.84 14.38 8.83 

-28.78 9.34 5.79 6.66 -32.86 8.05 5.16 6.30 

-29.30 8.56 5.07 5.02 -29.96 8.56 5.07 5.02 

-28.57 9.66 6.14 6.89 -28.57 9.66 6.14 6.89 

-23.71 — — -6.20 -28.09 — — -8.21 

-24.33 — — -6.83 -25.01 — — -6.83 

-23.52 — — -5.92 -23.52 — — -5.92 

-25.06 2.68 3.46 11.06 -29.37 1.47 2.85 10.81 

-25.70 1.90 2.69 4.97 -26.19 1.90 2.69 4.97 

TFFAX 10/5/82 -25.00 2.89 3.69 11.21 -25.00 2.89 3.69 11.21 54 




Fund 

Profile 

on 

Page






INTERNATIONAL, cont’d. 





6/30/09 

Templeton Foreign Smaller Companies–A 13, 31 FINEX 9/20/91 55 

Templeton Foreign Smaller Companies–C 13, 31 FCFSX 7/1/98 55 

Templeton Foreign Smaller Companies–ADV13, 31, 43 FTFAX 9/20/91 55 

Templeton Frontier Markets–A 9 — 10/14/08 56 

Templeton Frontier Markets–C 9 — 10/14/08 56 

Templeton Frontier Markets–ADV9 HYBRID 

— 10/14/08 56 

Franklin Balanced–A 9 FBLAX 7/3/06 57 

Franklin Balanced–C 9 FBMCX 7/3/06 57 

Franklin Balanced–ADV9 — 7/3/06 57 

Franklin Convertible Securities–A 13, 47 FISCX 4/15/87 58 

Franklin Convertible Securities–C 13 FROTX 10/2/95 58 

Franklin Convertible Securities–ADV13, 43 — 4/15/87 58 

Franklin Equity Income–A 13, 47 FISEX 3/15/88 59 

Franklin Equity Income–C 13 FRETX 10/2/95 59 

Franklin Equity Income–ADV13, 43 — 3/15/88 59 

Franklin Income–A 10 FKINX 8/31/48 60 

Franklin Income–C FCISX 5/1/95 60 

Franklin Income–ADV43 FRIAX 8/31/48 60 

Templeton Income–A 9 TINCX 7/1/05 61 

Templeton Income–C 9 TCINX 7/1/05 61 

Templeton Income–ADV9 ASSET ALLOCATION 

TZINX 7/1/05 61 

Franklin Templeton Corefolio Allocation–A9 FTCOX 8/15/03 62 

Franklin Templeton Corefolio Allocation–C 9 FTCLX 8/15/03 62 

Franklin Templeton Corefolio Allocation–ADV9 — 8/15/03 62 

Franklin Templeton Founding Funds Allocation–A 9 FFALX 8/15/03 63 

Franklin Templeton Founding Funds Allocation–C 9 FFACX 8/15/03 63 

Franklin Templeton Founding Funds Allocation–ADV9 FFAAX 8/15/03 63 

Franklin Templeton Perspectives Allocation–A 9 FPAAX 8/2/04 64 

Franklin Templeton Perspectives Allocation–C 9 FPCAX 8/2/04 64 

Franklin Templeton Perspectives Allocation–ADV9 — 8/2/04 64 

Franklin Templeton Conservative Target–A 9, 46 FTCIX 12/31/96 65 

Franklin Templeton Conservative Target–C 9 FTCCX 12/31/96 65 

Franklin Templeton Conservative Target–ADV9, 43 — 12/31/96 65 

Franklin Templeton Moderate Target–A 9, 46 FMTIX 12/31/96 66 

Franklin Templeton Moderate Target–C 9 FTMTX 12/31/96 66 

Franklin Templeton Moderate Target–ADV9, 43 FMTZX 12/31/96 66 

Franklin Templeton Growth Target–A 9, 46 FGTIX 12/31/96 67 

Franklin Templeton Growth Target–C 9 FTGTX 12/31/96 67 

Franklin Templeton Growth Target–ADV9, 43 FGTZX 12/31/96 67 

Franklin Templeton 2015 Retirement Target–A 9 FTRAX 8/1/06 68 

Franklin Templeton 2015 Retirement Target–C 9 — 8/1/06 68 

Franklin Templeton 2015 Retirement Target–ADV9 -28.77% 1.10% 4.27% 6.87% -32.86% -0.09% 3.66% 6.51% 

-29.35 0.34 3.47 3.42 -29.94 0.34 3.47 3.42 

-28.66 1.33 4.53 7.09 -28.66 1.33 4.53 7.09 

— — — 20.90 — — — 13.95 

— — — 20.30 — — — 19.30 

— — — 21.10 — — — 21.10 

-18.53 — — -4.18 -23.19 — — -6.06 

-19.16 — — -4.83 -19.93 — — -4.83 

-18.36 — — -3.88 -18.36 — — -3.88 

-19.13 0.25 4.97 8.13 -23.76 -0.93 4.36 7.84 

-19.73 -0.49 4.20 5.55 -20.48 -0.49 4.20 5.55 

-18.91 0.32 5.01 8.15 -18.91 0.32 5.01 8.15 

-24.49 -3.73 -0.10 7.09 -28.84 -4.86 -0.69 6.79 

-25.03 -4.43 -0.84 3.35 -25.75 -4.43 -0.84 3.35 

-24.23 -3.66 -0.06 7.11 -24.23 -3.66 -0.06 7.11 

-17.12 2.14 5.51 10.29 -20.79 1.29 5.07 10.21 

-17.83 1.52 4.95 6.41 -18.59 1.52 4.95 6.41 

-17.07 2.30 5.64 10.34 -17.07 2.30 5.64 10.34 

-9.23 — — 3.16 -13.05 — — 2.06 

-9.25 — — 2.81 -10.07 — — 2.81 

-9.32 — — 3.38 -9.32 — — 3.38 

-24.91 -1.81 — 0.89 -29.22 -2.97 — -0.12 

-25.45 -2.46 — 0.21 -26.19 -2.46 — 0.21 

-24.72 -1.50 — 1.19 -24.72 -1.50 — 1.19 

-23.92 -0.60 — 1.83 -28.30 -1.76 — 0.80 

-24.43 -1.25 — 1.16 -25.14 -1.25 — 1.16 

-23.71 -0.29 — 2.17 -23.71 -0.29 — 2.17 

-26.08 — — -0.79 -30.31 — — -1.97 

-26.53 — — -1.43 -27.26 — — -1.43 

-25.88 — — -0.46 -25.88 — — -0.46 

-6.24 3.76 4.93 5.43 -11.66 2.54 4.31 4.93 

-6.90 3.01 4.16 4.62 -7.81 3.01 4.16 4.62 

-6.02 3.94 5.02 5.50 -6.02 3.94 5.02 5.50 

-10.07 3.53 4.60 5.22 -15.24 2.32 3.98 4.72 

-10.67 2.76 3.83 4.38 -11.54 2.76 3.83 4.38 

-9.85 3.73 4.70 5.30 -9.85 3.73 4.70 5.30 

-17.43 2.38 3.46 4.42 -22.20 1.19 2.85 3.93 

-18.07 1.62 2.69 3.66 -18.88 1.62 2.69 3.66 

-17.26 2.56 3.55 4.50 -17.26 2.56 3.55 4.50 

-12.51 — — -0.88 -17.51 — — -2.88 

-13.13 — — -1.57 -13.98 — — -1.57 

— 8/1/06 -12.23 — — -0.56 -12.23 — — -0.56 68 



Fund 

Profile 

on 

Page 

PERFORMANCE SUMMARY







ASSET ALLOCATION, cont’d. 





6/30/09 

Franklin Templeton 2025 Retirement Target–A 9 FTRTX 8/1/06 68 


Franklin Templeton 2025 Retirement Target–ADV9 — 8/1/06 68 

Franklin Templeton 2035 Retirement Target–A 9 — 8/1/06 69 


Franklin Templeton 2035 Retirement Target–ADV9 — 8/1/06 69 

Franklin Templeton 2045 Retirement Target–A 9 — 8/1/06 69 


Franklin Templeton 2045 Retirement Target–ADV9 FIXED INCOME 

— 8/1/06 69 

Franklin Adjustable U.S. Government Securities–A 13 FISAX 10/20/87 70 

Franklin Adjustable U.S. Government Securities–C 13 FCSCX 7/1/03 70 

Franklin Adjustable U.S. Government Securities–ADV13, 43 — 10/20/87 70 

Franklin Floating Rate Daily Access–A13 FAFRX 5/1/01 71 

Franklin Floating Rate Daily Access–C 13 FCFRX 5/1/01 71 

Franklin Floating Rate Daily Access–ADV13 FDAAX 5/1/01 71 

Franklin High Income–A 10 FHAIX 12/31/69 72 

Franklin High Income–C FCHIX 5/16/95 72 

Franklin High Income–ADV43 FVHIX 12/31/69 72 

Franklin Limited Maturity U.S. Gov’t. Securities–A 33, 78 FRGVX 4/15/87 73 

Franklin Limited Maturity U.S. Gov’t. Securities–ADV33, 43, 78 FSUAX 4/15/87 73 

Franklin Low Duration Total Return–A 9 FLDAX 11/17/04 74 

Franklin Low Duration Total Return–ADV9, 43 — 11/17/04 74 

Franklin Real Return–A 9 FRRAX 11/17/04 75 

Franklin Real Return–C9 — 11/17/04 75 

Franklin Real Return–ADV9 FARRX 11/17/04 75 

Franklin Strategic Income–A 13 FRSTX 5/24/94 76 

Franklin Strategic Income–C 13 FSGCX 5/1/98 76 

Franklin Strategic Income–ADV13, 43 FKSAX 5/24/94 76 

Franklin Strategic Mortgage Portfolio FSMIX 2/1/93 77 

Franklin Total Return–A 9 FKBAX 8/3/98 78 

Franklin Total Return–C 9 FCTLX 3/1/02 78 

Franklin Total Return–ADV9 FBDAX 8/3/98 78 

Franklin U.S. Government Securities–A 10 FKUSX 5/31/70 79 

Franklin U.S. Government Securities–C FRUGX 5/1/95 79 

Franklin U.S. Government Securities–ADV 43 FUSAX 5/31/70 79 

Franklin Templeton Hard Currency–A13, 48, 58 ICPHX 11/17/89 80 

Franklin Templeton Hard Currency–ADV13, 43, 58 ICHHX 11/17/89 80 

Templeton Global Bond–A 12 TPINX 9/18/86 81 

Templeton Global Bond–C TEGBX 5/1/95 81 

Templeton Global Bond–ADV43 -18.10% —% —% -3.41% -22.79% —% —% -5.35% 

-18.69 — — -4.05 -19.48 — — -4.05 

-17.93 — — -3.16 -17.93 — — -3.16 

-21.35 — — -4.68 -25.88 — — -6.60 

-21.91 — — -5.37 -22.68 — — -5.37 

-21.12 — — -4.39 -21.12 — — -4.39 

-22.95 — — -5.26 -27.36 — — -7.17 

-23.56 — — -5.92 -24.30 — — -5.92 

-22.73 — — -4.95 -22.73 — — -4.95 

4.46 3.80 3.93 4.88 2.16 3.32 3.69 4.77 

3.93 3.37 — 2.84 2.93 3.37 — 2.84 

4.72 3.88 3.97 4.90 4.72 3.88 3.97 4.90 

-8.02 1.13 — 2.48 -10.12 0.68 — 2.19 

-8.38 0.74 — 2.08 -9.26 0.74 — 2.08 

-7.68 1.39 — 2.75 -7.68 1.39 — 2.75 

-3.62 4.21 4.37 7.55 -7.90 3.31 3.91 7.42 

-4.10 3.66 3.82 5.10 -4.97 3.66 3.82 5.10 

-3.51 4.36 4.51 7.60 -3.51 4.36 4.51 7.60 

6.96 4.19 4.60 5.71 4.58 3.73 4.36 5.61 

7.07 4.30 4.70 5.77 7.07 4.30 4.70 5.77 

4.80 — — 3.82 2.42 — — 3.31 

5.02 — — 3.87 5.02 — — 3.87 

-4.22 — — 4.51 -8.32 — — 3.54 

-4.86 — — 3.67 -5.79 — — 3.67 

-3.95 — — 4.77 -3.95 — — 4.77 

0.07 5.04 6.00 7.38 -4.17 4.14 5.55 7.07 

-0.33 4.63 5.59 5.11 -1.25 4.63 5.59 5.11 

0.32 5.30 6.27 7.56 0.32 5.30 6.27 7.56 

-0.89 2.53 4.64 5.42 -5.06 1.64 4.19 5.15 

2.06 3.62 5.25 5.03 -2.31 2.73 4.80 4.62 

1.66 3.23 — 4.14 0.71 3.23 — 4.14 

2.31 3.90 5.52 5.31 2.31 3.90 5.52 5.31 

7.49 5.02 5.50 6.93 2.86 4.12 5.03 6.81 

6.83 4.43 4.94 5.40 5.83 4.43 4.94 5.40 

7.61 5.14 5.65 6.98 7.61 5.14 5.65 6.98 

-5.80 4.94 4.68 4.56 -7.93 4.47 4.45 4.44 

-5.52 5.27 5.02 4.78 -5.52 5.27 5.02 4.78 

13.25 10.27 9.67 8.23 8.46 9.30 9.20 8.02 

12.78 9.81 9.23 8.13 11.78 9.81 9.23 8.13 

TGBAX 9/18/86 13.57 10.52 9.94 8.40 13.57 10.52 9.94 8.40 81 



Fund 

Profile 

on 

Page






FIXED INCOME, cont’d. 




6/30/09 

Templeton Global Total Return–A 9 TGTRX 9/30/08 82 

Templeton Global Total Return–C 9 — 9/30/08 82 

Templeton Global Total Return–ADV9 — 9/30/08 82 

Templeton International Bond–A 9 TBOAX 12/3/07 83 

Templeton International Bond–C 9 — 12/3/07 83 

Templeton International Bond–ADV9 TAX-FREE INCOME 

National Funds 

— 12/3/07 83 

Franklin Double Tax-Free Income–A10, 61 FPRTX 4/3/85 85 

Franklin Double Tax-Free Income–C61 FPRIX 5/1/95 85 

Franklin Federal Tax-Free Income–A 10 FKTIX 10/7/83 85 

Franklin Federal Tax-Free Income–C FRFTX 5/1/95 85 

Franklin Federal Tax-Free Income–ADV43 FAFTX 10/7/83 85 

Franklin High Yield Tax-Free Income–A 10 FRHIX 3/18/86 86 

Franklin High Yield Tax-Free Income–C FHYIX 5/1/95 86 

Franklin High Yield Tax-Free Income–ADV43 FHYVX 3/18/86 86 

Franklin Insured Tax-Free Income–A 10 FTFIX 4/3/85 86 

Franklin Insured Tax-Free Income–C FRITX 5/1/95 86 

Franklin Insured Tax-Free Income–ADV43 Intermediate-/Limited-Term Funds 

— 4/3/85 86 

Franklin California Int-Term Tax-Free Income–A 13 FKCIX 9/21/92 87 

Franklin California Int-Term Tax-Free Income–C 13 FCCIX 7/1/03 87 

Franklin California Int-Term Tax-Free Income–ADV13, 43 — 9/21/92 87 

Franklin Federal Int-Term Tax-Free Income–A 13 FKITX 9/21/92 87 

Franklin Federal Int-Term Tax-Free Income–C 13 FCITX 7/1/03 87 

Franklin Federal Int-Term Tax-Free Income–ADV13, 43 — 9/21/92 87 

Franklin Federal Ltd.-Term Tax-Free Income–A9, 51 FFTFX 9/2/03 88 

Franklin New York Int-Term Tax-Free Income–A 13 FKNIX 9/21/92 88 

Franklin New York Int-Term Tax-Free Income–C 13 FKNCX 7/1/03 88 

Franklin New York Int-Term Tax-Free Income–ADV13, 43 State Funds 

— 9/21/92 88 

Franklin Alabama Tax-Free Income–A 10 FRALX 9/1/87 89 

Franklin Alabama Tax-Free Income–C FALEX 5/1/95 89 

Franklin Arizona Tax-Free Income–A 10 FTAZX 9/1/87 89 

Franklin Arizona Tax-Free Income–C FAZIX 5/1/95 89 

Franklin Arizona Tax-Free Income–ADV43 — 9/1/87 89 

Franklin California High Yield Municipal–A 12, 13 FCAMX 5/3/93 90 

Franklin California High Yield Municipal–C 13 FCAHX 5/1/96 90 

Franklin California High Yield Municipal–ADV13, 43 FVCAX 5/3/93 90 

Franklin California Insured Tax-Free Income–A 10, 13 FRCIX 9/3/85 90 

Franklin California Insured Tax-Free Income–C 13 FRCAX 5/1/95 90 

Franklin California Insured Tax-Free Income–ADV13, 43 — 9/3/85 90 

Franklin California Tax-Free Income–A 10 FKTFX 2/1/77 91 

Franklin California Tax-Free Income–C FRCTX 5/1/95 91 

Franklin California Tax-Free Income–ADV43 —% —% —% 15.78% —% —% —% 10.90% 

— — — 15.46 — — — 14.46 

— — — 16.01 — — — 16.01 

10.62 — — 7.49 5.91 — — 4.59 

10.26 — — 7.19 9.26 — — 7.19 

10.91 — — 7.80 10.91 — — 7.80 

-1.72 2.97 3.93 6.08 -5.91 2.08 3.48 5.89 

-2.25 2.42 3.37 4.11 -3.19 2.42 3.37 4.11 

1.25 3.72 4.35 7.00 -3.07 2.82 3.90 6.82 

0.60 3.12 3.77 4.40 -0.36 3.12 3.77 4.40 

1.33 3.81 4.43 7.03 1.33 3.81 4.43 7.03 

-3.53 2.74 3.57 6.15 -7.65 1.85 3.12 5.95 

-4.02 2.18 3.02 4.10 -4.93 2.18 3.02 4.10 

-3.33 2.82 3.61 6.17 -3.33 2.82 3.61 6.17 

1.10 3.38 4.35 6.48 -3.16 2.49 3.89 6.29 

0.54 2.83 3.78 4.27 -0.42 2.83 3.78 4.27 

1.12 3.38 4.35 6.48 1.12 3.38 4.35 6.48 

0.51 2.97 3.97 4.92 -1.76 2.50 3.73 4.78 

-0.05 2.42 — 2.03 -1.01 2.42 — 2.03 

0.57 2.98 3.97 4.93 0.57 2.98 3.97 4.93 

2.04 3.35 4.14 5.03 -0.27 2.88 3.91 4.89 

1.56 2.81 — 2.26 0.58 2.81 — 2.26 

2.28 3.40 4.16 5.05 2.28 3.40 4.16 5.05 

4.11 2.98 — 2.62 1.77 2.51 — 2.22 

3.37 3.24 4.33 4.90 1.01 2.77 4.09 4.76 

2.89 2.67 — 2.12 1.89 2.67 — 2.12 

3.52 3.27 4.34 4.91 3.52 3.27 4.34 4.91 

1.05 3.31 4.16 5.89 -3.22 2.42 3.71 5.68 

0.49 2.75 3.59 4.14 -0.48 2.75 3.59 4.14 

2.43 3.82 4.23 5.89 -1.92 2.91 3.78 5.67 

1.93 3.25 3.67 4.21 0.96 3.25 3.67 4.21 

2.72 3.88 4.26 5.90 2.72 3.88 4.26 5.90 

-7.31 1.49 3.16 4.53 -11.23 0.62 2.72 4.25 

-7.87 0.94 2.60 3.73 -8.75 0.94 2.60 3.73 

-7.21 1.57 3.20 4.56 -7.21 1.57 3.20 4.56 

-1.54 3.11 4.10 6.22 -5.72 2.22 3.65 6.03 

-2.15 2.55 3.53 4.20 -3.08 2.55 3.53 4.20 

-1.48 3.12 4.11 6.22 -1.48 3.12 4.11 6.22 

-1.46 3.34 4.14 5.57 -5.64 2.46 3.69 5.43 

-2.02 2.77 3.57 4.24 -2.95 2.77 3.57 4.24 

FCAVX 2/1/77 -1.38 3.44 4.20 5.59 -1.38 3.44 4.20 5.59 91 




Fund 

Profile 

on 

Page 

PERFORMANCE SUMMARY




performance. Call (800) 342-5236 or go to franklintempleton.com for the most 

recent month-end performance. 


TAX-FREE INCOME, cont’d. 

State Funds 

Franklin Colorado Tax-Free Income–A 10 FRCOX 9/1/87 91 

Franklin Colorado Tax-Free Income–C FCOIX 5/1/95 91 

Franklin Connecticut Tax-Free Income–A 10 FXCTX 10/3/88 92 

Franklin Connecticut Tax-Free Income–C FXCTX 5/1/95 92 

Franklin Florida Tax-Free Income–A 10 FRFLX 9/1/87 92 

Franklin Florida Tax-Free Income–C FRFIX 5/1/95 92 

Franklin Georgia Tax-Free Income–A 10 FTGAX 9/1/87 93 

Franklin Georgia Tax-Free Income–C FGAIX 5/1/95 93 

Franklin Kentucky Tax-Free Income–A 10, 13 FRKYX 10/12/91 93 

Franklin Louisiana Tax-Free Income–A 10 FKLAX 9/1/87 94 

Franklin Louisiana Tax-Free Income–C FLAIX 5/1/95 94 

Franklin Maryland Tax-Free Income–A 10 FMDTX 10/3/88 94 

Franklin Maryland Tax-Free Income–C FMDIX 5/1/95 94 

Franklin Massachusetts Tax-Free Income–A 10, 91 FMISX 4/3/85 95 

Franklin Massachusetts Tax-Free Income–C 91 FMAIX 5/1/95 95 

Franklin Michigan Tax-Free Income–A 10, 13, 91 FTTMX 4/3/85 95 

Franklin Michigan Tax-Free Income–C 13, 91 FRMTX 5/1/95 95 

Franklin Michigan Tax-Free Income–ADV13, 43, 91 — 4/3/85 95 

Franklin Minnesota Tax-Free Income–A 10, 91 FMINX 4/3/85 96 

Franklin Minnesota Tax-Free Income–C 91 FMNIX 5/1/95 96 

Franklin Missouri Tax-Free Income–A 10 FRMOX 9/1/87 96 

Franklin Missouri Tax-Free Income–C FMOIX 5/1/95 96 

Franklin New Jersey Tax-Free Income–A 10 FRNJX 5/12/88 97 

Franklin New Jersey Tax-Free Income–C FNIIX 5/1/95 97 

Franklin New Jersey Tax-Free Income–ADV43 — 5/12/88 97 

Franklin New York Insured Tax-Free Income–A 10, 13 FRNYX 5/1/91 97 

Franklin New York Insured Tax-Free Income–C 13 FNYKX 5/1/95 97 

Franklin New York Tax-Free Income–A 10 FNYTX 9/13/82 98 

Franklin New York Tax-Free Income–C FNYIX 5/1/95 98 

Franklin New York Tax-Free Income–ADV43 FNYAX 9/13/82 98 

Franklin North Carolina Tax-Free Income–A 10 FXNCX 9/1/87 98 

Franklin North Carolina Tax-Free Income–C FNCIX 5/1/95 98 

Franklin Ohio Tax-Free Income–A 10, 91 FTOIX 4/3/85 99 

Franklin Ohio Tax-Free Income–C 91 FOITX 5/1/95 99 

Franklin Ohio Tax-Free Income–ADV43, 91 — 4/3/85 99 

Franklin Oregon Tax-Free Income–A 10 FRORX 9/1/87 99 

Franklin Oregon Tax-Free Income–C FORIX 5/1/95 99 

Franklin Pennsylvania Tax-Free Income–A 10 FRPAX 12/1/86 100 

Franklin Pennsylvania Tax-Free Income–C FRPTX 5/1/95 100 

Franklin Tennessee Municipal Bond–A 9 FRTIX 5/10/94 100 

Franklin Virginia Tax-Free Income–A 10 1.47% 3.57% 4.30% 6.07% -2.84% 2.67% 3.85% 5.86% 

1.00 3.01 3.74 4.37 0.03 3.01 3.74 4.37 

1.38 3.79 4.21 5.50 -2.96 2.90 3.76 5.29 

0.82 3.22 3.65 4.23 -0.15 3.22 3.65 4.23 

1.42 3.70 4.51 6.23 -2.91 2.80 4.06 6.02 

0.85 3.14 3.94 4.47 -0.12 3.14 3.94 4.47 

1.83 3.76 4.40 6.03 -2.49 2.87 3.95 5.82 

1.25 3.21 3.83 4.29 0.28 3.21 3.83 4.29 

2.22 3.66 4.26 5.45 -2.16 2.76 3.82 5.19 

1.09 3.22 4.27 5.96 -3.18 2.34 3.81 5.74 

0.54 2.65 3.70 4.30 -0.43 2.65 3.70 4.30 

0.50 2.98 4.11 5.67 -3.73 2.09 3.66 5.45 

-0.05 2.42 3.55 4.25 -1.01 2.42 3.55 4.25 

0.80 3.36 4.35 6.10 -3.48 2.46 3.90 5.91 

0.34 2.80 3.78 4.26 -0.63 2.80 3.78 4.26 

1.84 3.77 4.54 6.40 -2.50 2.88 4.08 6.21 

1.35 3.20 3.97 4.48 0.37 3.20 3.97 4.48 

2.11 3.82 4.57 6.41 2.11 3.82 4.57 6.41 

5.25 4.26 4.68 6.39 0.81 3.36 4.23 6.20 

4.72 3.71 4.12 4.37 3.72 3.71 4.12 4.37 

1.75 3.72 4.46 6.12 -2.54 2.82 4.01 5.91 

1.18 3.14 3.90 4.47 0.21 3.14 3.90 4.47 

2.00 3.90 4.55 6.10 -2.33 3.00 4.09 5.89 

1.42 3.31 3.98 4.50 0.44 3.31 3.98 4.50 

2.09 3.92 4.56 6.11 2.09 3.92 4.56 6.11 

0.28 2.89 3.91 5.27 -3.98 2.01 3.46 5.02 

-0.17 2.36 3.36 4.14 -1.13 2.36 3.36 4.14 

3.07 4.02 4.61 7.18 -1.31 3.12 4.15 7.01 

2.50 3.45 4.02 4.61 1.52 3.45 4.02 4.61 

3.25 4.11 4.69 7.21 3.25 4.11 4.69 7.21 

2.84 3.79 4.57 6.13 -1.57 2.89 4.12 5.92 

2.33 3.23 4.02 4.50 1.35 3.23 4.02 4.50 

4.23 4.30 4.69 6.46 -0.18 3.40 4.24 6.27 

3.54 3.72 4.12 4.56 2.54 3.72 4.12 4.56 

4.25 4.30 4.70 6.46 4.25 4.30 4.70 6.46 

2.89 4.10 4.58 5.87 -1.46 3.20 4.13 5.66 

2.30 3.51 4.01 4.43 1.31 3.51 4.01 4.43 

2.36 3.78 4.40 5.75 -2.03 2.88 3.95 5.55 

1.88 3.22 3.84 4.39 0.90 3.22 3.84 4.39 

4.49 3.96 4.60 5.42 0.08 3.06 4.15 5.12 

FRVAX 9/1/87 2.13 3.77 4.37 6.06 -2.24 2.88 3.92 5.85 101 

Franklin Virginia Tax-Free Income–C FVAIX 5/1/95 1.64 3.22 3.81 4.34 0.66 3.22 3.81 4.34 

101 

Advisor Class and Class Z shares are only offered to certain eligible investors as stated in the prospectus. nt’d. 





6/30/09 


Fund 

Profile 

on 

Page





VARIABLE INSURANCE FUNDS 

VALUE 

CUMULATIVE TOTAL RETURN AVERAGE ANNUAL TOTAL RETURN 

NO CONTRACT EXPENSES OR CHARGES 53 NO CONTRACT EXPENSES OR CHARGES 53 

Inception 1 YTD 1-Year 5-Year 10-Year 5-Year 10-Year Inception 

6/30/09 

Franklin Large Cap Value Securities–256, 66 3/1/05 103 

Franklin Large Cap Value Securities–456, 66 2/28/08 103 

Franklin Small Cap Value Securities–1 66, 83 5/1/98 104 

Franklin Small Cap Value Securities–2 66, 83 1/6/99 104 

Franklin Small Cap Value Securities–466, 83 2/28/08 104 

Mutual Shares Securities–1 13 11/8/96 104 

Mutual Shares Securities–2 13 1/6/99 104 

Mutual Shares Securities–413 BLEND 

2/28/08 104 

Franklin Rising Dividends Securities–1 66 1/27/92 105 

Franklin Rising Dividends Securities–2 66 1/6/99 105 

Franklin Rising Dividends Securities–466 GROWTH 

2/28/08 105 

Franklin Flex Cap Growth Securities–256, 66 3/1/05 105 

Franklin Flex Cap Growth Securities–456, 66 2/28/08 105 

Franklin Large Cap Growth Securities–181 5/1/96 106 



Franklin Small-Mid Cap Growth Securities–166, 82 11/1/95 106 

Franklin Small-Mid Cap Growth Securities–266, 82 1/6/99 106 

Franklin Small-Mid Cap Growth Securities–466, 82 SECTOR 

2/28/08 106 

Franklin Global Real Estate Securities–1 56, 88 1/24/89 107 

Franklin Global Real Estate Securities–2 56, 88 1/6/99 107 

Franklin Global Real Estate Securities–4 56, 88 GLOBAL 

2/28/08 107 

Mutual Global Discovery Securities–113, 93 11/8/96 107 



Templeton Global Asset Allocation–155, 56 8/24/88 108 



Templeton Growth Securities–156 3/15/94 108 

Templeton Growth Securities–256 1/6/99 108 

Templeton Growth Securities–456 INTERNATIONAL 

2/28/08 108 

Mutual International Securities–256 6/15/09 109 

Mutual International Securities–456 6/15/09 109 

Templeton Developing Markets Securities–155, 66 3/4/96 109 

Templeton Developing Markets Securities–255, 66 5/1/97 109 

Templeton Developing Markets Securities–355, 66 5/1/04 — 

Templeton Developing Markets Securities–455, 66 2.25% -26.85% —% —% —% —% -4.98% 

2.29 -26.92 — — — — -5.00 

4.33 -27.82 -0.43 71.73 -0.09 5.56 3.60 

4.18 -27.98 -1.71 67.42 -0.34 5.29 3.35 

4.17 -28.04 -0.86 70.99 -0.17 5.51 3.56 

4.87 -23.05 -1.32 36.40 -0.27 3.15 5.23 

4.75 -23.25 -2.52 33.51 -0.51 2.93 5.04 

4.71 -23.32 -1.78 35.76 -0.36 3.10 5.19 

-0.56 -19.99 -8.26 43.28 -1.71 3.66 7.33 

-0.71 -20.19 -9.45 39.57 -1.97 3.39 7.16 

-0.78 -20.31 -8.72 42.56 -1.81 3.61 7.30 

8.03 -23.84 — — — — -2.63 

7.93 -23.94 — — — — -2.66 

8.66 -20.45 -10.68 -0.24 -2.23 -0.02 4.62 

8.48 -20.62 -11.77 -2.72 -2.47 -0.28 4.40 

8.48 -20.77 -11.15 -0.76 -2.34 -0.08 4.57 

14.59 -27.53 -11.60 13.75 -2.44 1.30 5.33 

14.47 -27.73 -12.69 11.03 -2.68 1.05 5.13 

14.39 -27.78 -12.03 13.19 -2.53 1.25 5.29 

-10.23 -39.37 -29.15 32.14 -6.66 2.83 6.60 

-10.36 -39.54 -30.07 28.84 -6.90 2.57 6.47 

-10.37 -39.57 -29.49 31.50 -6.75 2.78 6.58 

8.62 -12.96 41.85 113.72 7.24 7.89 8.39 

8.45 -13.21 40.05 108.45 6.97 7.62 8.17 

8.46 -13.27 41.22 112.77 7.15 7.84 8.36 

3.65 -16.95 22.63 59.38 4.16 4.77 8.73 

3.46 -17.18 21.14 55.46 3.91 4.51 8.58 

3.49 -17.19 22.18 58.79 4.09 4.73 8.71 

5.59 -28.46 -7.28 14.50 -1.50 1.36 5.40 

5.51 -28.67 -8.41 11.67 -1.74 1.11 5.22 

5.41 -28.79 -7.76 13.90 -1.60 1.31 5.37 

— — — — — — — 

— — — — — — — 

28.72 -26.70 59.96 67.18 9.85 5.27 1.77 

28.47 -26.93 57.97 63.17 9.58 5.02 1.54 

28.45 -26.91 58.26 63.48 9.62 5.04 1.56 

2/28/08 28.46 -26.96 59.17 66.36 9.74 5.22 1.73 

109 

Important Franklin Templeton Variable Insurance Funds Note: 

Performance reflects the funds’ operating expenses, which differ by class, but does not include any contract fees, expenses or sales charges. If they had been included, performance would have 

been lower. The funds are generally only available as investment options in variable annuity and variable life insurance contracts. 

This fund-only performance is for dealer use only and has not been filed with FINRA for use with the public. 


Fund 

Profile 

on 

Page 

PERFORMANCE SUMMARY







INTERNATIONAL, cont’d. 


NO CONTRACT EXPENSES OR CHARGES 53 NO CONTRACT EXPENSES OR CHARGES 53 

Inception 1 YTD 1-Year 5-Year 10-Year 5-Year 10-Year Inception 

Important Franklin Templeton Variable Insurance Funds Note: 

Performance reflects the funds’ operating expenses, which differ by class, but does not include any contract fees, expenses or sales charges. If they had been included, performance would have 

been lower. The funds are generally only available as investment options in variable annuity and variable life insurance contracts. 

This fund-only performance is for dealer use only and has not been filed with FINRA for use with the public. 

6/30/09 

Templeton Foreign Securities–113, 55, 66 5/1/92 110 

Templeton Foreign Securities–213, 55, 66 5/1/97 110 

Templeton Foreign Securities–313, 55, 66 5/1/04 — 

Templeton Foreign Securities–413, 55, 66 HYBRID 

2/28/08 110 

Franklin Growth and Income Securities–113 1/24/89 110 



Franklin Income Securities–1 13 1/24/89 111 

Franklin Income Securities–2 13 1/6/99 111 

Franklin Income Securities–413 ASSET ALLOCATION 

2/28/08 111 

Franklin Templeton VIP Founding Funds Allocation–156 7/2/07 111 

Franklin Templeton VIP Founding Funds Allocation–256 7/2/07 111 

Franklin Templeton VIP Founding Funds Allocation–456 FIXED INCOME 

2/28/08 111 

Franklin High Income Securities–113 1/24/89 112 

Franklin High Income Securities–2 13 1/6/99 112 

Franklin High Income Securities–413 2/28/08 112 

Franklin Strategic Income Securities–1 66 7/1/99 112 

Franklin Strategic Income Securities–2 66 5/15/01 112 

Franklin Strategic Income Securities–466 2/28/08 112 

Franklin U.S. Government Securities–1 13 3/14/89 113 

Franklin U.S. Government Securities–2 13 1/6/99 113 

Franklin U.S. Government Securities–413 2/28/08 113 

Franklin Zero Coupon–2010–1 13 3/14/89 113 

Franklin Zero Coupon–2010–2 13 5/12/03 113 

Templeton Global Bond Securities–1 13, 94 1/24/89 114 

Templeton Global Bond Securities–2 13, 94 1/6/99 114 

Templeton Global Bond Securities–3 13, 94 4/1/05 — 

Templeton Global Bond Securities–413, 94 9.33% -25.78% 15.92% 20.80% 3.00% 1.91% 7.06% 

9.23 -25.99 14.48 17.86 2.74 1.66 6.87 

9.18 -26.01 14.37 17.75 2.72 1.65 6.86 

9.15 -26.08 15.32 20.18 2.89 1.86 7.02 

2.96 -24.30 -15.85 0.45 -3.39 0.05 5.95 

2.91 -24.44 -16.89 -1.90 -3.63 -0.19 5.82 

2.80 -24.61 -16.26 -0.03 -3.49 0.00 5.93 

12.91 -16.46 12.00 75.28 2.29 5.77 8.34 

12.84 -16.64 10.58 70.96 2.03 5.51 8.20 

12.79 -16.67 11.51 74.52 2.20 5.73 8.32 

7.51 -22.26 — — — — -19.75 

7.34 -22.50 — — — — -19.97 

7.33 -22.51 — — — — -19.87 

21.75 -5.46 19.52 28.18 3.63 2.51 5.79 

21.51 -5.74 17.79 25.01 3.33 2.26 5.65 

21.53 -5.68 19.05 27.68 3.55 2.47 5.77 

12.86 0.09 29.33 — 5.28 — 6.31 

12.60 -0.24 27.64 — 5.00 — 6.04 

12.55 -0.30 28.61 — 5.16 — 6.25 

1.13 7.31 28.82 76.33 5.19 5.84 6.80 

1.01 7.11 27.27 71.95 4.94 5.57 6.66 

1.00 7.02 28.27 75.59 5.11 5.79 6.77 

-0.25 4.71 27.34 91.02 4.95 6.69 8.84 

-0.35 4.49 25.85 88.17 4.71 6.53 8.76 

7.57 13.08 63.34 155.25 10.31 9.82 8.17 

7.45 12.79 61.24 148.96 10.03 9.55 8.02 

7.39 12.73 61.17 148.86 10.02 9.55 8.02 

2/28/08 7.41 12.66 62.63 154.14 10.22 9.78 8.14 114 


Fund 

Profile 

on 

Page


SELECTED INDEX RETURNS 

Performance as of 6/30/0925 S&P 500 Index — — 

Dow Jones Industrial Average36 — — 

Consumer Price Index — — 

MSCI EAFE Index — — 

MSCI Emerging Markets Index — — 

MSCI World Index — — 

Citigroup World Government Bond Index — — 

Barclays Capital Government/Credit Index — — 

Barclays Capital Municipal Bond Index — — 

Credit Suisse High Yield Index — — 

Russell 2000 ® Growth Index — — 

CLOSED-END FUNDS 35 

Performance at Market Value as of 5/31/09 

Franklin Templeton Limited Duration Income Trust FTF 8/27/03 

Franklin Universal Trust FT 9/23/88 

Templeton Dragon TDF 9/20/94 

Templeton Emerging Markets EMF 2/26/87 

Templeton Emerging Markets Income TEI 9/23/93 

Templeton Global Income GIM 3/17/88 

Templeton Russia and East European TRF 9/13/95 

MONEY FUNDS 

As of 6/30/09 

Franklin Money Fund13 Franklin Tax-Exempt Money Fund 

Franklin California Tax-Exempt Money Fund 

9, 71 

Franklin New York Tax-Exempt Money Fund 

Franklin Templeton Money Fund 

Franklin Templeton Money Fund–A9 Franklin Templeton Money Fund–C9 CUMULATIVE TOTAL RETURN AVERAGE ANNUAL TOTAL RETURN 

Symbol Inception YTD 1-Year 5-Year 1-Year 5-Year 10-Year Inception 

3.16% -26.22% -10.72% -26.22% -2.24% -2.22% — 

-2.01 -23.00 -8.12 -23.00 -1.68 -0.41 — 

2.60 -1.43 13.70 -1.43 2.60 2.64 — 

8.42 -30.96 14.73 -30.96 2.79 1.59 — 

36.22 -27.82 101.88 -27.82 15.08 9.00 — 

6.79 -29.01 2.90 -29.01 0.57 -0.37 — 

-1.50 4.00 34.20 4.00 6.06 6.53 — 

0.55 5.26 26.40 5.26 4.80 5.95 — 

6.42 3.77 22.47 3.77 4.14 5.00 — 

27.22 -5.00 20.54 -5.00 3.81 5.08 — 

11.36 -24.85 -6.45 -24.85 -1.32 -0.89 — 


Symbol Inception YTD 1-Year 5-Year 1-Year 5-Year 10-Year Inception 

23.53% -6.73% 11.52% -6.73% 2.20% —% 1.31 

23.45 -26.48 22.74 -26.48 4.18 1.54 6.14 

35.46 -12.07 130.98 -12.07 18.23 18.46 10.77 

60.33 -27.04 124.41 -27.04 17.55 8.16 13.47 

28.53 -13.46 57.00 -13.46 9.44 11.50 8.69 

13.68 10.09 80.63 10.09 12.55 12.79 9.00 

166.92 -28.49 143.64 -28.49 19.50 21.88 17.60 

7 Day Taxable 

Fund No. Symbol CUSIP No. 7 Day Yield 50 Effective Yield 50 Equivalent Yield 16 


If you remove the Performance Summary from the Dealer Facts Guide for convenient reference, please copy the Footnotes on pages 125–127 as they contain important related information. 

6/30/09 

Fund 

Profile 

on Page 

111 FMFXX 354 014 102 0.00% 0.00% —% 84 

114 FTMXX 354 719 106 0.00 0.00 0.00 102 

125 FCLXX 352 519 201 0.00 0.00 0.00 102 

131 FRNXX 354 128 100 0.00 0.00 0.00 102 

400 — 354 902 405 0.48 0.49 — — 

511 FRIXX 354 902 108 0.00 0.00 — — 


PERFORMANCE SUMMARY

Notes 

12 Dealer Facts Guide Go to franklintempleton.com or call (800) 223-2141 DEALER USE ONLY/NOT FOR DISTRIBUTION TO THE PUBLIC

Franklin All Cap Value Fund 

OVERALL MORNINGSTAR RATING TM 

CLASS A 8 

★★★★ 

MORNINGSTAR STYLE BOX 

STYLE 

Value Blend Growth 

SIZE 

Large 

✕ 

Medium 

Small 

✕ Current 

Historical 

INVESTMENT CATEGORY 

Value 

TM 67 

PRIMARY INVESTMENT 37 

Equity securities of companies of 

any size that the fund’s managers 

believe are undervalued at the time 

of purchase and have the potential 

for capital appreciation. 

FUND REFERENCE 

CLASS A CLASS C 

Fund No. 448 548 

CUSIP 355 148 743 355 148 735 

Symbol FRAVX — 

Inception1 6/1/07 6/1/07 

CLASS R ADVISOR89 Fund No. 848 648 

CUSIP 355 148 727 355 148 719 

Symbol — — 

Inception1 6/1/07 6/1/07 

ANNUAL PROSPECTUS UPDATE AVAILABLE: 

March 1 

PORTFOLIO MANAGER PROFILE84 William J. Lippman 

Joined Franklin Templeton in 1988 

Managed Fund since 2007 

Steve Raineri 



Bruce C. Baughman, CPA 



Margaret McGee 



Donald G. Taylor, CPA 



MAXIMUM SALES CHARGE & COMMISSION 

CLASS A CLASS C73 Sales Charge 5.75% 0.00% 

Dealer Concession 5.00 1.00 

12b-1 Fee to Dealer 0.25 1.00 

CLASS R ADVISOR89 Sales Charge 0.00% 0.00% 



See page 128 for more commission 

information and page 125 for footnotes. 

PERFORMANCE INFORMATION 

5, 9 

ANNUAL TOTAL RETURN–WITHOUT SALES CHARGES 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — — -32.20 1.83 

CLASS C — — — — — — — — — -32.70 1.51 

ADVISOR — — — — — — — — — -32.05 2.00 

AVERAGE ANNUAL TOTAL RETURN – AVERAGE ANNUAL TOTAL RETURN– 

WITHOUT SALES CHARGES5, 9 6, 9 

WITH SALES CHARGES 

1 YR 3 YR 5 YR 10 YR INCEPTION 1 YR 3 YR 5 YR 10 YR INCEPTION 

CLASS A -27.89 — — — -20.52 -32.02 — — — -22.75 

CLASS C -28.47 — — — -21.06 -29.19 — — — -21.06 

ADVISOR -27.70 — — — -20.25 -27.70 — — — -20.25 

Advisor Class shares are only offered to certain eligible investors as stated in the prospectus. 

PORTFOLIO HOLDINGS 29 6/30 

Total Number of Positions 50 

PORTFOLIO BREAKDOWN 

Capital Goods 19.96% 

Energy 13.57 

Materials 12.41 

Insurance 7.83 

Utilities 7.30 

Health Care Equipment & Services 7.20 

Retailing 5.91 

Technology Hardware & Equipment 5.17 

Consumer Durables & Apparel 5.01 

Food & Staples Retailing 3.21 

TOP 10 HOLDINGS7 Laboratory Corporation of 

America Holdings 3.72% 

Becton Dickinson & Co. 3.48 

IBM Corp. 3.37 

Wal-Mart Stores Inc. 3.21 

RTI International Metals Inc. 3.12 

Adidas AG 2.98 

Bemis Company Inc. 2.88 

Eaton Corp. 2.76 

Chubb Corp. 2.71 

NV Energy Inc. 2.61 

ANNUAL TOTAL RETURN 5, 9 –CLASS A 

WITHOUT SALES CHARGES 

0 

-32.20% 

2005 2006 2007 2008 

9, 22 

HYPOTHETICAL INVESTMENT 

CLASS A CLASS C ADVISOR 

$10,000 from Inception $5,846 $6,115 $6,247 

FUND FACTS 

Net Assets (millions) 

2, 9 

Expense Ratio 

without waiver 

with waiver 

Net Asset Value 

Public Offering Price 

Beta 3 

Standard Deviation 65 

FUND DISTRIBUTIONS 

Dividend Frequency 

Annually in December. 

Dividend History 30 

12/08 

12/07 

Capital Gains (last 12 mos.) 30 

Short-Term 

Long-Term 

1.83% 

YTD 2009 14 

ASSET ALLOCATION 29, 60 6/30 

Stocks 96% 

Cash 4% 

6/30/09 


$9.3 $1.4 $0.7 

2.44% 3.12% 2.14% 

1.23% 1.91% 0.93% 

$6.11 $6.07 $6.13 

$6.48 $6.07 $6.13 

— — — 

— — — 


$0.0511 $0.0156 $0.0674 

0.0531 0.0403 0.0624 

— — — 

— — — 


OPEN-END FUNDS VALUE BLEND GROWTH SECTOR GLOBAL INTERNATIONAL HYBRID ASSET ALLOCATION FIXED INCOME TAX-FREE INCOME


VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Balance Sheet Investment Fund 


CLASS A 8 

★★★★ 


STYLE 


SIZE 

Large 

✕ 

Medium 

Small 

✕ Current 

Historical 


Value 

TM 67 


Equity and debt securities, includ ing 

foreign, small-capital iza tion, and 

high yield, lower-rated securities 

that the managers believe to be 

under valued. 



Fund No. 150 250 

CUSIP 355 148 107 355 148 867 

Symbol FRBSX FCBSX 

Inception1 4/2/90 3/1/01 


CUSIP 355 148 842 355 148 859 

Symbol FBSRX FBSAX 

Inception1 4/2/90 4/2/90 


March 1 

PORTFOLIO MANAGER PROFILE84 Bruce C. Baughman, CPA 



William J. Lippman 



















5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 

CLASS C 

ADVISOR43 -1.53 20.47 17.70 -5.96 29.58 25.31 10.90 16.35 -3.36 -36.01 -1.88 

— — — -6.63 28.60 24.33 10.06 15.47 -4.08 -36.55 -2.24 

-1.53 20.47 17.88 -5.73 29.92 25.58 11.17 16.63 -3.12 -34.96 -1.74 


WITHOUT SALES CHARGES5, 13 6, 13, 20 


CLASS A 

CLASS C 

ADVISOR 43 


-31.62 -13.41 -2.08 4.64 9.43 -35.55 -15.10 -3.23 4.03 9.10 

-32.20 -14.08 -2.83 — 2.85 -32.85 -14.08 -2.83 — 2.85 

-30.47 -12.78 -1.56 5.00 9.63 -30.47 -12.78 -1.56 5.00 9.63 





Insurance 22.26% 


Capital Goods 11.83 


Energy 5.60 


Transportation 5.29 

Food, Beverage & Tobacco 5.15 


Pharmaceuticals, Biotechnology & 

Life Sciences 2.61 

TOP 10 HOLDINGS 7 

NV Energy Inc. 2.77% 

Watson Pharmaceuticals Inc. 2.61 

American National Insurance Co. 2.42 

Corn Products International Inc. 2.41 

ESCO Technologies Inc. 2.35 

Old Republic International Corp. 2.24 

IPC Holdings Ltd. 2.20 

Entergy Corp. 2.11 

Norfolk Southern Corp. 2.07 

Prudential Financial Inc. 2.01 

ANNUAL TOTAL RETURN 5 –CLASS A 


16.35% 

10.90% 

0 

HYPOTHETICAL INVESTMENT 22 

$10,000 from Inception 

FUND FACTS 


Expense Ratio 2 



Beta 3 

-3.36% -36.01% -1.88% 

2005 2006 2007 2008 





4, 30 

Dividend History 

12/08 

12/07 

12/06 

Capital Gains (last 4, 30 12 mos.) 

Short-Term 

Long-Term 

YTD 2009 14 

6/30/09 

CLASS A CLASS C ADVISOR43 $53,437 $12,640 $58,661 


$1,948.0 $66.0 $119.1 

1.00% 1.76% 0.76% 

$34.53 $34.11 $35.04 

$36.64 $34.11 $35.04 

0.95 0.95 0.94 

24.50 24.51 24.35 


$0.7010 $0.3701 $0.8302 

0.6729 0.1000 0.8586 

0.8828 0.3543 1.0492 

— — — 

1.0477 1.0477 1.0477 


Stocks 91% 

Cash 9% 


Franklin Large Cap Value Fund 

OVERALL MORNINGSTAR 

RATINGTM 8, 67 

– CLASS A 

TM 67 


STYLE 


SIZE 

✕ 

Large 

Medium 

✕ Current 

Small Historical 


Value 


The fund invests primarily in stocks 

of large capitalization companies 

that are similar in size to those in 

the Russell 1000 ® Index at the time 

of purchase and that the manager 

believes to be undervalued. 



Fund No. 480 580 

CUSIP 355 148 701 355 148 883 

Symbol FLVAX FLCVX 

Inception1 6/1/00 6/1/00 


CUSIP 355 148 834 355 148 768 

Symbol FLCRX — 

Inception1 6/1/00 6/1/00 


March 1 























5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 — — 7.67 -15.52 25.94 13.41 3.65 15.95 -1.12 -36.84 1.76 

— — 6.72 -15.84 25.02 12.58 3.07 15.12 -1.72 -37.30 1.43 

— — 7.67 -15.52 25.94 13.41 3.80 16.29 -0.78 -36.61 1.88 




CLASS A 

CLASS C 

ADVISOR 43 


-28.38 -10.42 -3.79 — 1.78 -32.52 -12.17 -4.93 — 1.12 

-28.84 -11.01 -4.43 — 1.13 -29.55 -11.01 -4.43 — 1.13 

-28.12 -10.12 -3.55 — 1.92 -28.12 -10.12 -3.55 — 1.92 







Energy 10.56 

Insurance 


9.00 


Diversified Financials 7.27 




Household & Personal Products 3.96 

TOP 10 HOLDINGS7 Nucor Corp. 5.64% 

Microsoft Corp. 3.43 


State Street Corp. 3.02 

D.R. Horton Inc. 2.99 

Merck & Company Inc. 2.89 

Aflac Inc. 2.86 

General Electric Co. 2.51 

Exxon Mobil Corp. 2.45 

Praxair Inc. 2.43 



3.65% 

0 

15.95% 

-1.12% 

-36.84% 

2005 2006 2007 2008 

6/30/09 


CLASS A CLASS C ADVISOR43 $10,000 from Inception $11,062 $11,078 $11,885 

FUND FACTS 


Expense Ratio2 Net Asset Value 


Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 

1.76% 

YTD 2009 14 


$80.4 $21.4 $2.9 

1.40% 2.10% 1.10% 

$9.26 $9.19 $9.23 

$9.82 $9.19 $9.23 

0.99 0.99 0.99 

21.47 21.48 21.48 


$0.1884 $0.0903 $0.2279 

0.2335 0.1120 0.2983 

0.2137 0.1141 0.2688 

— — — 

— — — 


Stocks 98% 

Cash 2% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin MicroCap Value Fund 


CLASS A 8 

★★★★★ 


STYLE 


SIZE 

Large 

Medium 

Small 

✕ 

✕ Current 

Historical 


Value 

TM 67 


Securities of domestic and foreign 

companies with market capitalizations 

under $400 million at the 

time of purchase, and which the 

managers believe are undervalued 

in the marketplace. 

Effective 1/14/04, the fund is closed to 

new investors, with the exception of select 

retirement accounts. Existing shareholders 

may continue adding to their accounts. 


CLASS A ADVISOR89 Fund No. 189 629 

CUSIP 355 148 206 355 148 750 

Symbol FRMCX FVRMX 

Inception1 12/12/95 12/12/95 


March 1 

PORTFOLIO MANAGER PROFILE84 Bruce C. Baughman, CPA 













CLASS A ADVISOR89 Sales Charge 5.75% 0.00% 






5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


ADVISOR43 -3.98 12.07 41.28 4.01 36.42 16.01 12.23 19.94 -4.21 -30.26 8.60 

-3.98 12.07 41.28 4.01 36.42 16.01 12.28 20.23 -4.00 -30.08 8.75 




CLASS A 

ADVISOR 43 


-16.82 -7.35 1.11 8.80 10.25 -21.59 -9.16 -0.09 8.15 9.77 

-16.60 -7.12 1.29 8.89 10.33 -16.60 -7.12 1.29 8.89 10.33 





Food, Beverage & Tobacco 14.98% 



Commercial & Professional Services 8.57 





Telecommunication Services 4.07 


TOP 10 HOLDINGS7 Seneca Foods Corp. 7.10% 

Village Super Market Inc. 3.75 

Healthcare Services Group Inc. 3.71 

International Shipholding Corp. 3.58 

Atlantic Tele-Network Inc. 3.55 

PHI Inc. 2.98 

ACMAT Corp. 2.64 

Spherion Corp. 2.34 

Smithfield Foods Inc. 2.17 

Baldwin & Lyons Inc. 2.01 



0 

12.23% 

19.94% 

-4.21% 

-30.26% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 

8.60% 

YTD 2009 14 

6/30/09 

CLASS A ADVISOR43 $35,364 $37,875 

CLASS A ADVISOR 

$212.2 $70.3 

1.23% 0.99% 

$23.11 $23.11 

$24.52 $23.11 

0.73 0.73 

19.85 19.85 


$0.4089 $0.4908 

0.4116 0.5273 

0.5676 0.6684 

— — 

1.8873 1.8873 


Stocks 87% 

Cash 12% 

Bonds 1% 


Franklin MidCap Value Fund 

TM 67 


STYLE 


SIZE 

Large 

✕ 

Medium 

✕ Current 



Value 


Securities of mid-capitalization 

companies, which are defined as 

being similar in size to those in 

the Russell Midcap ® Index, at the 

time of purchase, and which the 

manager believes to be undervalued. 



Fund No. 422 522 

CUSIP 355 148 818 355 148 792 

Symbol FMVAX FMVCX 

Inception1 7/1/05 7/1/05 


CUSIP 355 148 784 355 148 776 


Inception1 7/1/05 7/1/05 


March 1 

PORTFOLIO MANAGER PROFILE84 Samuel R. Kerner, CFA 

























5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — 13.92 0.25 -36.87 7.15 

CLASS C — — — — — — — 13.21 -0.36 -37.35 6.75 

ADVISOR — — — — — — — 14.37 0.57 -36.70 7.30 




CLASS A 

CLASS C 

ADVISOR 


-27.20 -9.68 — — -5.39 -31.37 -11.45 — — -6.79 

-27.79 -10.28 — — -6.04 -28.52 -10.28 — — -6.04 

-27.06 -9.40 — — -5.09 -27.06 -9.40 — — -5.09 





Materials 13.81% 



Energy 8.72 

Food, Beverage & Tobacco 


7.16 






TOP 10 HOLDINGS7 Celanese Corp. 3.82% 

Alberto-Culver Co. 3.30 

Dean Foods Inc. 3.23 


SAIC Inc. 3.02 

McCormick & Company Inc. 3.00 

Atmos Energy Corp. 

Laboratory Corporation of 

2.96 

America Holdings 2.70 

Sigma-Aldrich Corp. 2.62 

Airgas Inc. 2.57 



13.92% 

0 

0.25% 

-36.87% 

2005 2006 2007 2008 

6/30/09 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 

7.15% 

YTD 2009 14 


$38.4 $7.7 $1.0 

1.77% 2.47% 1.47% 

1.37% 2.07% 1.07% 

$7.49 $7.43 $7.50 

$7.95 $7.43 $7.50 

0.89 0.89 0.89 

22.78 22.83 22.83 


$0.0458 — $0.0814 

0.1284 $0.0597 0.1652 

0.1977 0.1411 0.2257 

— — — 

— — — 


Stocks 94% 

Cash 6% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


38 6/30/09 

Franklin Small Cap Value Fund 

TM 67 



Value 



companies with market capitalizations 

under $3.5 billion at the time 

of purchase, and which the manager 

believes to be under valued. The 

fund may also invest in high yield, 

lower-rated securities. 



Fund No. 482 582 

CUSIP 355 148 305 355 148 404 

Symbol FRVLX FRVFX 

Inception1 3/11/96 9/3/96 


CUSIP 355 148 826 355 148 503 

Symbol FVFRX FVADX 

Inception1 3/11/96 3/11/96 


March 1 




Y. Dogan Sahin, CFA 






















5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 -0.82 22.22 15.12 -9.63 32.34 24.81 9.13 16.80 -2.78 -32.78 5.62 

-1.54 21.54 14.27 -10.15 31.43 24.00 8.42 15.98 -3.46 -33.26 5.20 

-0.43 22.72 15.43 -9.29 32.79 25.24 9.51 17.17 -2.49 -32.60 5.72 




CLASS A 

CLASS C 

ADVISOR 43 


-26.89 -9.97 0.05 5.41 6.58 -31.10 -11.73 -1.13 4.78 6.11 

-27.41 -10.62 -0.64 4.69 5.41 -28.13 -10.62 -0.64 4.69 5.41 

-26.68 -9.72 0.36 5.75 6.99 -26.68 -9.72 0.36 5.75 6.99 








Energy 9.52 



Automobiles & Components 3.93 


Technology Hardware & Equipment 

Pharmaceuticals, Biotechnology 

2.63 

& Life Sciences 2.59 

TOP 10 HOLDINGS7 Universal Forest Products Inc. 2.08% 

Reliance Steel & Aluminum Co. 1.92 

Steel Dynamics Inc. 1.79 

Westlake Chemical Corp. 1.77 

J.C. Penney Company Inc. 1.71 

Benchmark Electronics Inc. 1.68 


Rowan Companies Inc. 1.64 





0 

9.13% 

16.80% 

-2.78% 

2005 2006 2007 

-32.78% 



FUND FACTS 





Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 

5.62% 

2008 YTD 2009 14 



$541.2 $137.4 $135.3 


$0.2919 $0.0343 $0.3930 

0.3559 0.0353 0.4829 

0.2811 0.0474 0.3797 

— — — 

— — — 


Stocks 93% 

Cash 7% 

1.30% 2.01% 1.02% 

$28.39 $26.90 $29.18 

$30.12 $26.90 $29.18 

0.99 0.99 0.99 

26.48 26.50 26.48 


18 6/30/09 

Mutual Beacon Fund 


CLASS A 8 

★★★★ 


Value 


Common and preferred stock, as 

well as debt securities, including 

high-yield, lower-rated securities of 

domestic and foreign companies 

that the fund’s manager believes are 

undervalued. Investments include 

securities of companies involved in 

mergers, consolidations, liquidations, 

and reorganizations. 



Fund No. 476 576 

CUSIP 628 380 875 628 380 867 

Symbol TEBIX TEMEX 

Inception1 6/29/62 6/29/62 

CLASS Z89 Fund No. 076 

CUSIP 628 380 305 

Symbol BEGRX 

Inception1 6/29/62 


May 1 

PORTFOLIO MANAGER PROFILE84 Christian Correa, CFA 

Joined Mutual Series in 2003 


Mandana Hormozi 







CLASS Z89 Sales Charge 0.00% 

Dealer Concession 0.00 

12b-1 Fee to Dealer 0.00 




5, 13, 27 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 16.40 13.89 5.78 -11.41 28.99 14.13 8.89 20.65 2.67 -40.48 6.56 

CLASS C 15.65 13.21 5.06 -11.99 28.24 13.39 8.12 19.84 1.99 -40.92 6.22 

CLASS Z 16.79 14.33 6.11 -11.05 29.44 14.52 9.25 20.98 3.03 -40.37 6.84 


WITHOUT SALES CHARGES5, 13, 27 6, 13, 23 



CLASS A -25.52 -9.67 -1.08 2.90 7.41 -29.79 -11.45 -2.25 2.29 7.28 

CLASS C -26.01 -10.30 -1.74 2.22 6.47 -26.72 -10.30 -1.74 2.22 6.47 

CLASS Z -25.28 -9.39 -0.75 3.25 7.93 -25.28 -9.39 -0.75 3.25 7.93 

Class Z shares are only offered to certain eligible investors as stated in the prospectus. 






Media 


7.70 


Software & Services 5.73 





Energy 3.04 

TOP 10 HOLDINGS7 Microsoft Corp. 3.44% 

Wyeth 3.43 

Comcast Corp. 2.85 

News Corp Inc. 2.39 

Berkshire Hathaway Inc. 2.32 

Imperial Tobacco Group PLC 2.29 

CVS Caremark Corp. 

White Mountains Insurance 

2.25 

Group Inc. 2.16 

Schering-Plough Corp. 2.14 

Weyerhaeuser Co. 1.93 



0 

8.89% 

20.65% 

2.67% 

-40.48% 

2005 2006 2007 2008 

22, 27 


CLASS A CLASS C CLASS Z 


FUND FACTS 





Beta 3 




$1,594.9 $392.3 $2,020.7 

1.13% 1.84% 0.84% 

$9.58 $9.39 $9.69 

$10.16 $9.39 $9.69 

0.88 0.88 0.88 

20.35 20.34 20.34 


Semiannually in September and December. 

CLASS A 


CLASS C CLASS Z 

30 

12/08 

9/08 

12/07 


— — — 

$0.0247 $0.0152 $0.0286 

0.4789 0.3727 0.5282 

Short-Term 

0.0640 0.0640 0.0640 

Long-Term 

0.3580 0.3580 0.3580 

6.56% 

YTD 2009 14 


Stocks 84% 

Cash 11% 

Bonds 5% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


80 6/30/09 

Mutual Quest Fund 


CLASS A 8 

★★★★★ 


Value 




high-yield, lower-rated securities 

of domestic and foreign companies 



securities of companies involved 

in mergers, consolidations, liqui dations, 


Effective 5/1/09, Mutual Qualified Fund 

changed its name to Mutual Quest Fund. 

The fund’s investment goal and strategy 

remained unchanged. 



Fund No. 475 575 

CUSIP 628 380 800 628 380 883 

Symbol TEQIX TEMQX 

Inception1 9/26/80 9/26/80 

CLASS R CLASS Z89 Fund No. 875 075 

CUSIP 354 026 866 628 380 206 

Symbol — MQIFX 

Inception1 9/26/80 9/26/80 


May 1 

PORTFOLIO MANAGER PROFILE84 Anne E. Gudefin, CFA 



Shawn Tumulty 







CLASS R CLASS Z89 Sales Charge 0.00% 0.00% 






5, 13, 27 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 13.27 13.81 7.85 -13.00 29.98 16.27 10.85 18.94 8.73 -25.55 5.24 

CLASS C 12.54 13.11 7.16 -13.53 29.16 15.52 10.08 18.16 8.02 -26.06 4.87 

CLASS Z 13.64 14.25 8.21 -12.70 30.50 16.64 11.26 19.29 9.12 -25.34 5.41 




CLASS A 

CLASS C 

CLASS Z 






Energy 6.03 


Real Estate 


4.32 


Banks 1.60 




TOP 10 HOLDINGS7 Schering-Plough Corp. 3.63% 

Wyeth 3.49 

Lorillard Inc. 3.11 

Danone 3.10 

British American Tobacco PLC 2.59 


Nestle SA 2.00 

Kone Corp. 

White Mountains Insurance 

1.94 

Group Inc. 1.75 

Pernod Ricard SA 1.62 



0 

10.85% 


-13.79 -1.64 4.86 5.83 13.13 -18.73 -3.56 3.62 5.20 12.90 

-14.38 -2.31 4.16 5.14 12.15 -15.16 -2.31 4.16 5.14 12.15 

-13.50 -1.32 5.21 6.19 13.67 -13.50 -1.32 5.21 6.19 13.67 


18.94% 

8.73% 

-25.55% 

2005 2006 2007 2008 

22, 27 




FUND FACTS 





Beta 3 




$962.3 $351.8 $3,192.5 

1.11% 1.80% 0.81% 

$15.26 $15.08 $15.38 

$16.19 $15.08 $15.38 

0.47 0.47 0.47 

11.46 11.48 11.46 



CLASS A 



30 

12/08 

9/08 

12/07 


$0.2211 $0.0949 $0.2755 

0.0379 0.0262 0.0441 

0.5954 0.4590 0.6662 

Short-Term 

0.9134 0.9134 0.9134 

Long-Term 

0.4935 0.4935 0.4935 

5.24% 

YTD 2009 14 


Stocks 64% 

Cash 33% 

Bonds 3% 


Mutual Recovery Fund 


Value 


The fund seeks capital appreciation 

while maintaining a low correlation 

to the U.S. equity markets by seeking 

investments in these three categories: 

bankruptcy and distressed 

companies, risk arbitrage, and 

undervalued stocks. The fund may 

take both long and short positions. 

The minimum initial purchase is $10,000 

and the minimum subsequent investment in 

the continuous offering is $1,000. 



Fund No. 471 571 

CUSIP 354 02P 203 354 02P 401 

Symbol FMRAX FCMRX 

Inception1 6/2/03 6/2/03 

ADVISOR89 Fund No. 070 

CUSIP 354 02P 104 

Symbol FMRVX 



August 1 

PORTFOLIO MANAGER PROFILE84 Shawn Tumulty 



Christian Correa, CFA 



Keith Luh, CFA 







ADVISOR89 Sales Charge 0.00% 








Food, Beverage & Tobacco 


10.00% 



Media 5.91 



Transportation 

Semiconductors & Semiconductor 

3.76 

Equipment 3.42 



TOP 10 HOLDINGS7 Wyeth 6.17% 


Smurfit-Stone Container Enterprises 4.15 

Virgin Media Inc. 3.82 

Symetra Financial 3.72 

Constellation Energy Group 3.53 

CVS Caremark Corp. 

Motor Coach Industries 

2.85 

International Inc. 2.77 

Community Health Systems Inc. 2.59 

Weyerhaeuser Co. 2.52 

The fund is a continuously offered closed-end fund. 

Shares may be purchased daily. There is no daily 

redemption; instead the fund intends to make quarterly 

tender offers for 5%–25% of the outstanding shares. 



0 

18.59% 

2005 2006 2007 2008 

22, 77 




FUND FACTS 





Beta 3 

6.74% 7.44% 

0.98% -41.66% 






12/08 

12/07 

6/07 


Short-Term 

Long-Term 

YTD 2009 14 

6/30/09 


5, 77 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — 13.11 6.74 18.59 0.98 -41.66 7.44 

CLASS C — — — — — 12.47 5.99 17.86 0.40 -42.06 7.00 

ADVISOR — — — — — 13.53 7.04 19.07 1.36 -41.43 7.51 





CLASS A -27.77 -11.11 -2.44 — 1.07 -31.93 -12.85 -3.59 — 0.09 

CLASS C -28.31 -11.69 -3.07 — 0.43 -29.02 -11.69 -3.07 — 0.43 

ADVISOR -27.61 -10.81 -2.11 — 1.42 -27.61 -10.81 -2.11 — 1.42 



$99.2 $38.9 $36.0 

2.48% 3.13% 2.13% 

$8.09 $7.95 $8.16 

$8.58 $7.95 $8.16 

0.93 0.93 0.93 

19.62 19.58 19.62 


$0.1852 $0.1055 $0.2311 

0.1582 0.0932 0.1936 

0.1362 0.1164 0.1453 

0.0081 0.0081 0.0081 

0.0005 0.0005 0.0005 


Stocks 63% 

Cash 19% 

Bonds 18% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Mutual Shares Fund 


CLASS A 8 

★★★★ 


Value 




high-yield, lower-rated securities 

of domestic and foreign companies 



securities of companies involved in 

mergers, consolidations, liquidations, 




Fund No. 474 574 

CUSIP 628 380 602 628 380 701 

Symbol TESIX TEMTX 

Inception1 7/1/49 7/1/49 


CUSIP 354 026 502 628 380 107 

Symbol TESRX MUTHX 

Inception1 7/1/49 7/1/49 


May 1 

PORTFOLIO MANAGER PROFILE84 Peter Langerman 

Tenure at Mutual Series: 

1986-2002, 2005 

Managed Fund since 

1986-2001, 2005 

F. David Segal, CFA 



Deborah A. Turner, CFA 


















Energy 5.98 



Media 


5.00 




TOP 10 HOLDINGS7 Wyeth 2.90% 




CVS Caremark Corp. 2.30 








17.98% 

9.98% 

2.97% 

-38.10% 

0 

2005 2006 2007 2008 

22, 27 



$10,000 from Inception $8,164,614 $3,526,524 $14,665,231 

FUND FACTS 





Beta 3 



6/30/09 


5, 13, 27 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 14.63 13.42 5.94 -11.20 26.18 13.50 9.98 17.98 2.97 -38.10 5.26 

CLASS C 13.87 12.68 5.26 -11.78 25.37 12.77 9.27 17.18 2.30 -38.53 4.90 

CLASS Z 15.00 13.83 6.32 -10.89 26.62 13.89 10.39 18.37 3.30 -37.92 5.42 


WITHOUT SALES CHARGES5, 13, 27, 34 6, 13, 23, 34 



CLASS A -23.79 -9.07 -0.88 2.71 11.93 -28.17 -10.85 -2.05 2.11 11.82 

CLASS C -24.32 -9.69 -1.54 2.04 10.27 -25.07 -9.69 -1.54 2.04 10.27 

CLASS Z -23.55 -8.79 -0.55 3.06 12.92 -23.55 -8.79 -0.55 3.06 12.92 



$4,388.7 $1,203.6 $7,267.5 

1.08% 1.77% 0.79% 

$16.02 $15.84 $16.15 

$17.00 $15.84 $16.15 

0.83 0.83 0.83 

18.97 18.97 18.97 



CLASS A 



30 

12/08 

9/08 

12/07 


$0.1791 $0.0332 $0.2371 

0.0264 0.0114 0.0330 

0.6352 0.4685 0.7110 

Short-Term 

0.1653 0.1653 0.1653 

Long-Term 

0.0356 0.0356 0.0356 

5.26% 

YTD 2009 14 


Stocks 86% 

Cash 9% 

Bonds 5% 


Franklin Focused Core Equity Fund 



– CLASS A 


Blend 


The fund will generally seek to 

maintain a portfolio consisting of 

securities of approximately 30 to 40 

companies, primarily equity securities 

of large-capitalization companies 

across the style spectrum from 

value to growth. 



Fund No. 443 543 

CUSIP 354 713 448 354 713 430 


Inception1 12/13/07 12/13/07 


CUSIP 354 713 422 354 713 414 


Inception1 12/13/07 12/13/07 


September 1 

PORTFOLIO MANAGER PROFILE84 Steve Kornfeld, CFA 



Edward D. Perks, CFA 
















Life Sciences 17.27% 


Energy 8.21 




Banks 4.21 




TOP 10 HOLDINGS7 Berkshire Hathaway Inc. 4.66% 


MasterCard Inc. 4.28 

Roche Holding AG 4.22 



Marathon Oil Corp. 3.77 

Celanese Corp. 3.63 

Petroplus Holdings AG 3.59 

U.S. Bancorp 3.56 



0 

-44.63% 

2005 2006 2007 2008 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 






12/08 

12/07 


Short-Term 

Long-Term 

19.56% 

YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — — -44.63 19.56 

CLASS C — — — — — — — — — -44.99 19.08 

ADVISOR — — — — — — — — — -44.54 19.93 





CLASS A -18.38 — — — -22.85 -23.07 — — — -25.74 

CLASS C -19.04 — — — -23.38 -19.84 — — — -23.38 

ADVISOR -18.11 — — — -22.56 -18.11 — — — -22.56 



$5.7 $0.3 $0.2 

5.53% 6.16% 5.20% 

1.25% 1.88% 0.92% 

$6.54 $6.49 $6.56 

$6.94 $6.49 $6.56 

— — — 

— — — 


$0.0989 $0.0829 $0.1129 

— — — 

0.0217 0.0217 0.0217 

0.0002 0.0002 0.0002 


Stocks 91% 

Cash 9% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Large Cap Equity Fund 


Blend 


Seeks long-term growth of principal 

and income by investing predominantly 

in large-cap equity securities 

across the style spectrum from value 

to growth. 



Fund No. 428 278 

CUSIP 353 533 680 353 533 672 


Inception1 12/11/98 12/11/98 

CLASS R ADVISOR 89 

Fund No. 828 064 

CUSIP 353 533 664 353 533 870 

Symbol — FLCIX 

Inception1 12/11/98 12/11/98 


September 30 

PORTFOLIO MANAGER PROFILE84 Mackin Pulsifer 



Kenneth Siegel 



Linda Krouner 








Sales Charge 0.00% 0.00% 











Energy 12.28 








TOP 10 HOLDINGS7 Exxon Mobil Corp. 3.37% 

Home Depot Inc. 2.77 


ABB Ltd. 2.67 


Johnson & Johnson 2.50 

Schlumberger Ltd. 2.36 

BlackRock Inc./New York 2.32 

Celgene Corp. 2.32 

Qualcomm Inc. 2.31 

ANNUAL TOTAL RETURN 5, 9, 63 –CLASS A 


3.97% 

0 

10.88% 

11.15% 

-38.99% 

2005 2006 2007 2008 

6.16% 

YTD 2009 14 

6/30/09 


5, 9, 63 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A 7.59 -2.51 -11.32 -21.62 26.00 10.83 3.97 10.88 11.15 -38.99 6.16 

CLASS C 6.09 -3.96 -12.11 -22.15 25.14 9.96 3.11 10.08 10.38 -39.38 5.70 

ADVISOR 8.42 -1.70 -10.89 -21.33 26.46 11.30 4.43 11.32 11.56 -38.80 6.29 

AVERAGE ANNUAL TOTAL RETURN– AVERAGE ANNUAL TOTAL RETURN– 




CLASS A -29.23 -7.68 -2.50 -2.28 -0.96 -33.30 -9.48 -3.65 -2.86 -1.52 

CLASS C -29.75 -8.34 -3.24 -3.15 -1.83 -30.43 -8.34 -3.24 -3.15 -1.83 

ADVISOR -29.04 -7.36 -2.13 -1.82 -0.50 -29.04 -7.36 -2.13 -1.82 -0.50 


9, 22, 63 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 

Standard Deviation65 *Less than $100,000 



Quarterly. 


6/09 

3/09 

12/08 


Short-Term 

Long-Term 


Stocks 98% 

Cash 2% 


$1.3 $0.1* $46.3 

1.44% 2.09% 1.09% 

1.30% 1.95% 0.95% 

$4.30 $4.29 $4.30 

$4.56 $4.29 $4.30 

0.94 0.93 0.94 

19.31 19.25 19.30 


$0.0139 $0.0098 $0.0168 

0.0058 0.0020 0.0050 

0.0110 0.0052 0.0220 

— — — 

0.1470 0.1470 0.1470 


Franklin Rising Dividends Fund 


CLASS A 8 

★★★★ 


STYLE 


SIZE 

Large 

✕ Medium 

Small 

✕ Current 

Historical 


Blend 

TM 67 


Equity securities of companies 

that have paid consistently rising 

dividends over the past 10 years. 



Fund No. 158 258 

CUSIP 353 825 102 353 825 409 

Symbol FRDPX FRDTX 

Inception1 1/14/87 5/1/95 


Fund No. 858 658 

CUSIP 353 825 706 353 825 805 

Symbol FRDRX FRDAX 

Inception1 1/14/87 1/14/87 


February 1 

PORTFOLIO MANAGER PROFILE84 Donald G. Taylor, CPA 





























Household & Personal Products 


6.71 






TOP 10 HOLDINGS7 Becton Dickinson & Co. 5.43% 


Roper Industries Inc. 5.18 

United Technologies Corp. 5.09 

Procter & Gamble Co. 5.00 


Family Dollar Stores Inc. 4.41 


Dover Corp. 3.92 

Erie Indemnity Co. 3.66 



17.36% 

0 

2.32% 

-2.95% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 

-27.22% -0.71% 





4, 30 


12/08 

12/07 

12/06 


Short-Term 

Long-Term 

YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A 

CLASS C 

ADVISOR43 -10.28 18.98 13.11 -1.76 23.70 10.28 2.32 17.36 -2.95 -27.22 -0.71 

-10.77 18.38 12.47 -2.24 22.98 9.67 1.58 16.49 -3.69 -27.75 -1.05 

-10.28 18.98 13.11 -1.76 23.70 10.28 2.36 17.65 -2.69 -27.01 -0.59 





CLASS A 

CLASS C 

ADVISOR43 -20.15 -7.82 -2.28 2.90 7.74 -24.74 -9.63 -3.43 2.29 7.46 

-20.74 -8.50 -2.97 2.25 6.99 -21.52 -8.50 -2.97 2.25 6.99 

-19.91 -7.57 -2.09 3.00 7.79 -19.91 -7.57 -2.09 3.00 7.79 


CLASS A CLASS C ADVISOR 43 

$50,300 $26,032 $53,887 


$1,193.5 $311.0 $48.3 

1.03% 1.77% 0.78% 

$23.78 $23.55 $23.74 

$25.23 $23.55 $23.74 

0.80 0.80 0.80 

17.85 17.86 17.84 


$0.5145 $0.2765 $0.5943 

0.4518 0.1671 0.5467 

0.9139 0.6605 0.9958 

— — — 

— — — 


Stocks 93% 

Cash 7% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


62 6/30/09 

Franklin Flex Cap Growth Fund 

TM 67 


STYLE 


SIZE 

✕ Large 

Medium 

✕ Current 



Growth 


Equity securities of companies in 

any industry and of any market 

cap size. 



Fund No. 180 280 

CUSIP 352 51D 103 352 51D 202 

Symbol FKCGX FCIIX 

Inception1 10/30/91 9/3/96 


CUSIP 354 713 562 354 713 463 

Symbol FRCGX FKCAX 

Inception1 10/30/91 10/30/91 


September 1 

PORTFOLIO MANAGER PROFILE84 Conrad B. Herrmann, CFA 



Matthew Moberg, CPA 



Raymond Chan, CFA 













5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 95.17 -7.04 -23.23 -24.94 40.48 12.96 6.21 5.76 16.02 -36.27 8.74 

93.81 -7.74 -23.84 -25.48 39.42 12.11 5.41 4.98 15.19 -36.74 8.32 

95.17 -7.04 -23.23 -24.94 40.48 13.05 6.47 6.03 16.32 -36.10 8.88 





CLASS A 

CLASS C 

ADVISOR43 -24.21 -5.46 -0.69 2.54 10.14 -28.56 -7.31 -1.86 1.94 9.77 

-24.78 -6.16 -1.44 1.78 5.64 -25.53 -6.16 -1.44 1.78 5.64 

-24.00 -5.22 -0.45 2.67 10.21 -24.00 -5.22 -0.45 2.67 10.21 





Information Technology 34.86% 

Health Care 18.12 

Industrials 10.27 

Energy 8.74 

Consumer Staples 6.79 

Consumer Discretionary 4.94 

Financials 4.91 



TOP 10 HOLDINGS7 Qualcomm Inc. 3.34% 

Apple Inc. 3.01 

Cisco Systems Inc. 2.76 

Google Inc. 2.49 


Oracle Corp. 2.26 

American Tower Corp. 2.20 


Danaher Corp. 2.09 

Hewlett-Packard Co. 2.00 



16.02% 

0 

6.21% 

5.76% 

-36.27% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 




$1,439.2 $254.4 $587.3 

0.96% 1.71% 0.71% 

$33.59 $31.11 $33.98 

$35.64 $31.11 $33.98 

0.97 0.97 0.97 

20.30 20.30 20.29 





4, 30 


12/08 

12/07 

6/0787 — — — 

— — — 


$0.0245 — $0.0245 

Short-Term 

— — — 

Long-Term 

— — — 

8.74% 

YTD 2009 14 


Stocks 96% 

Cash 4% 


Franklin Growth Fund 

TM 67 


STYLE 


SIZE 

✕ Large 

Medium 

✕ Current 



Growth 


Common stocks of established companies 

with demonstrated growth 

characteristics. The fund’s holdings 

may include some foreign and small 

capitalization securities. 



Fund No. 106 206 

CUSIP 353 496 508 353 496 888 

Symbol FKGRX FRGSX 

Inception1 3/31/48 5/1/95 


CUSIP 353 496 730 353 496 839 

Symbol FGSRX FCGAX 

Inception1 3/31/48 3/31/48 


February 1 

PORTFOLIO MANAGER PROFILE84 V. Jerry Palmieri 



Serena Perin Vinton, CFA 



Conrad B. Herrmann, CFA 















Industrials 30.29% 

Information Technology 23.59 



Energy 4.75 






TOP 10 HOLDINGS7 Apple Inc. 4.72% 



General Dynamics Corp. 2.10 

3M Co. 1.95 


Amgen Inc. 1.87 

Allergan Inc. 1.80 

Northrop Grumman Corp. 1.73 

W.W. Grainger Inc. 1.71 



14.16% 

8.36% 

7.13% 

-33.39% 

0 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 





4, 30 


12/08 

12/07 

12/06 


Short-Term 

Long-Term 

5.94% 

YTD 2009 14 

6/30/09 


ANNUAL TOTAL RETURN–WITHOUT SALES CHARGES5 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 12.19 7.53 -9.47 -24.35 28.03 11.30 8.36 14.16 7.13 -33.39 5.94 

11.34 6.71 -10.15 -24.90 27.05 10.46 7.54 13.31 6.34 -33.88 5.59 

12.45 7.77 -9.23 -24.17 28.37 11.53 8.64 14.42 7.39 -33.21 6.08 


WITHOUT SALES CHARGES5 6, 47 



CLASS A 

CLASS C 

ADVISOR43 -20.65 -5.63 -0.25 0.02 9.62 -25.21 -7.48 -1.43 -0.57 9.51 

-21.21 -6.33 -1.00 -0.73 5.02 -21.99 -6.33 -1.00 -0.73 5.02 

-20.45 -5.40 0.00 0.27 9.69 -20.45 -5.40 0.00 0.27 9.69 


CLASS A CLASS C ADVISOR43 $2,614,897 $20,018 $2,879,680 


$1,865.5 $274.6 $367.6 

0.89% 1.64% 0.64% 

$31.02 $29.49 $31.04 

$32.91 $29.49 $31.04 

0.97 0.97 0.97 

20.40 20.40 20.39 


$0.3065 $0.0224 $0.4017 

0.1302 — 0.2332 

0.1064 — 0.2006 

— — — 

— — — 


Stocks 99% 

Cash 1% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Growth Opportunities Fund 

TM 67 


STYLE 


SIZE 

Large 

✕ Medium 

✕ Current 



Growth 


The fund invests primarily in equity 

securities of companies demonstrating 

accelerating growth, increasing 

profitability, or above-average 

growth or growth potential, as 

compared with the overall economy. 


CLASS A CLASS 

Fund No. 462 562 

CUSIP 354 713 687 354 713 711 

Symbol FGRAX FKACX 

Inception1 6/23/99 6/23/99 


CUSIP 354 713 513 354 713 729 

Symbol FKARX FRAAX 

Inception1 6/23/99 6/23/99 


September 1 

PORTFOLIO MANAGER PROFILE84 Grant Bowers 



Conrad B. Herrmann, CFA 



Raymond Chan, CFA 




CLASS A CLASS C 73 















Energy 10.53 







TOP 10 HOLDINGS7 Celgene Corp. 3.54% 


Gilead Sciences Inc. 3.01 

FLIR Systems Inc. 2.73 

Myriad Genetics Inc. 2.49 


Life Technologies Corp. 2.26 


SBA Communications Corp. 2.10 

Concur Technologies Inc. 2.09 



0 

11.07% 

6.76% 

20.93% 

-40.08% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 

14.36% 

YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — -25.83 -22.59 -35.74 43.94 17.31 11.07 6.76 20.93 -40.08 14.36 

CLASS C — -26.29 -23.11 -36.19 42.94 16.52 10.28 5.99 20.10 -40.54 14.07 

ADVISOR — -25.57 -22.35 -35.57 44.34 17.69 11.40 7.04 21.28 -39.88 14.56 





CLASS A -25.97 -4.97 1.83 3.36 4.13 -30.24 -6.82 0.63 2.75 3.52 

CLASS C -26.50 -5.63 1.12 2.66 3.43 -27.24 -5.63 1.12 2.66 3.43 

ADVISOR -25.71 -4.67 2.14 3.68 4.46 -25.71 -4.67 2.14 3.68 4.46 



$14,138 $14,016 $15,478 


$120.1 $31.7 $156.4 

1.29% 2.01% 1.01% 

$14.65 $13.70 $15.11 

$15.54 $13.70 $15.11 

1.07 1.07 1.07 

23.34 23.34 23.31 


— — — 

— — — 

— — — 

— — — 

— — — 


Stocks 97% 

Cash 3% 


Franklin Small Cap Growth Fund 



– CLASS A 

TM 67 


STYLE 


SIZE 

Large 

Medium 

✕ Current 

✕ Small Historical 


Growth 


The fund invests primarily in small 

company stocks. 

Effective 3/31/08, Franklin Small Cap 

Growth Fund II changed its name to Franklin 

Small Cap Growth Fund, and reopened to all 

investors. 



Fund No. 465 565 

CUSIP 354 713 620 354 713 646 

Symbol FSGRX FCSGX 

Inception1 5/1/00 5/1/00 


CUSIP 354 713 539 354 713 653 

Symbol FSSRX FSSAX 

Inception1 5/1/00 5/1/00 


September 1 

PORTFOLIO MANAGER PROFILE84 Michael McCarthy, CFA 



Brad Carris, CFA 




















Energy 4.14 




TOP 10 HOLDINGS7 ViaSat Inc. 2.17% 

Shuffle Master Inc. 

American Medical Systems 

2.07 

Holdings Ltd. 1.96 

Bottomline Technologies Inc. 1.81 

Silicon Laboratories Inc. 1.81 

Nuance Communications Inc. 1.80 

Sapient Corp. 1.76 

NetLogic Microsystems Inc. 1.76 

PAREXEL International Corp. 1.65 

Hain Celestial Group Inc. 1.64 



9.46% 

4.48% 3.29% 

0 

-41.12% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 

17.36% 

YTD 2009 14 


$9,108 $9,059 $9,930 


$137.0 $43.6 $66.6 

1.17% 1.92% 0.92% 

$7.03 $6.46 $7.28 

$7.46 $6.46 $7.28 

0.99 0.99 0.99 

25.59 25.58 25.59 


— — — 

— — — 

— — — 

$0.0669 $0.0669 $0.0669 

0.0071 0.0071 0.0071 


Stocks 96% 

Cash 4% 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — -3.33 -27.25 48.47 11.07 4.48 9.46 3.29 -41.12 17.36 

CLASS C — — -4.03 -27.64 47.24 10.28 3.66 8.56 2.49 -41.54 17.03 

ADVISOR — — -3.03 -26.99 48.97 11.30 4.74 9.69 3.54 -40.96 17.61 





CLASS A -19.22 -9.30 -3.03 — -0.37 -23.88 -11.07 -4.17 — -1.01 

CLASS C -19.78 -9.94 -3.74 — -1.07 -20.57 -9.94 -3.74 — -1.07 

ADVISOR -18.96 -9.03 -2.78 — -0.08 -18.96 -9.03 -2.78 — -0.08 





VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


52 6/30/09 

Franklin Small-Mid Cap Growth Fund 



– CLASS A 

TM 67 


STYLE 


SIZE 

Large 

✕ Medium 

✕ Current 



Growth 


Stocks of small and mid capitali zation 

growth companies that the 

fund’s managers believe to be positioned 

for rapid growth in revenues 

or earnings and assets. 



Fund No. 198 298 

CUSIP 354 713 109 354 713 802 

Symbol FRSGX FRSIX 

Inception1 2/14/92 10/2/95 


CUSIP 354 713 547 354 713 869 

Symbol FSMRX FSGAX 

Inception1 2/14/92 2/14/92 


September 1 

PORTFOLIO MANAGER PROFILE84 Edward B. Jamieson 



Michael McCarthy, CFA 



James Cross, CFA 













5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 97.08 -9.80 -20.53 -29.58 37.68 13.04 10.54 7.52 11.67 -42.51 14.83 

95.62 -10.49 -21.12 -30.10 36.62 12.25 9.72 6.69 10.86 -42.93 14.40 

97.66 -9.56 -20.37 -29.42 38.01 13.34 10.82 7.77 11.97 -42.34 14.91 





CLASS A 

CLASS C 

ADVISOR43 -26.12 -7.78 -1.04 1.42 8.60 -30.37 -9.58 -2.20 0.82 8.23 

-26.65 -8.46 -1.78 0.66 4.50 -27.38 -8.46 -1.78 0.66 4.50 

-25.94 -7.55 -0.79 1.67 8.88 -25.94 -7.55 -0.79 1.67 8.88 









Energy 6.11 







Silicon Laboratories Inc. 2.43% 

Express Scripts Inc. 2.32 




AMETEK Inc. 1.82 

Guess? Inc. 1.72 

Waters Corp. 1.66 

FMC Technologies Inc. 1.61 

Wolverine World Wide Inc. 1.58 



0 

10.54% 

7.52% 

11.67% 

-42.51% 

2005 2006 2007 2008 



FUND FACTS 




Beta 3 





4, 30 


12/08 

12/07 

12/06 


Short-Term 

Long-Term 

14.83% 

YTD 2009 14 



$2,275.4 $294.2 $528.3 

1.04% 1.79% 0.79% 

$23.30 $21.13 $23.89 

$24.72 $21.13 $23.89 

0.90 0.90 0.90 

23.07 23.06 23.07 


— — — 

— — — 

— — — 

— — — 

$0.0620 $0.0620 $0.0620 


Stocks 95% 

Cash 5% 


Franklin Biotechnology Discovery Fund 


8, 67 

RATINGTM – CLASS A 

TM 67 


STYLE 


SIZE 

✕ Large 

Medium 

Small 


Sector 


Equity securities of biotechnology 

companies and discovery research 

firms located in the U.S. and other 

countries. 


CLASS A 

Fund No. 402 

CUSIP 354 713 844 

Symbol FBDIX 

Inception 1 9/15/97 

✕ Current 

Historical 


September 1 

PORTFOLIO MANAGER PROFILE84 Evan McCulloch, CFA 



Vincent W. Xiang, Ph.D. 




CLASS A 

Sales Charge 5.75% 








Biotechnology 71.85% 

Pharmaceuticals 16.90 

Life Sciences Tools & Services 9.21 


Gilead Sciences Inc. 11.29% 


Genzyme Corporation - General 

Division 9.43 


Teva Pharmaceutical Industries Ltd. 4.63 

Life Technologies Corp. 4.62 


Biogen Idec Inc. 3.77 

Cephalon Inc. 3.34 

Biomarin Pharmaceutical Inc. 3.22 



5.55% 5.03% 

0 

-1.60% -10.64% 

2005 2006 2007 2008 

2.77% 

YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 97.91 46.58 -20.48 -42.48 43.55 11.96 5.55 5.03 -1.60 -10.64 2.77 





CLASS A -6.68 0.56 0.66 7.62 6.93 -12.04 -1.40 -0.52 6.99 6.39 



FUND FACTS 




Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 


Stocks 98% 

Cash 2% 

CLASS A 

$20,755 

CLASS A 

$291.2 

1.27% 

$53.76 

$57.04 

0.85 

18.50 


CLASS A 

— 

— 

— 

— 

— 



VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin DynaTech Fund 


CLASS A 8 

★★★★ 


STYLE 


SIZE 

✕ Large 

Medium 

Small 

✕ Current 

Historical 


Sector 

TM 67 



companies that management considers 

undervalued, emphasizing 

technological development in 

fast-growing industries. 



Fund No. 108 208 

CUSIP 353 496 201 353 496 870 

Symbol FKDNX FDYNX 

Inception1 1/1/68 9/16/96 


CUSIP 353 496 672 353 496 680 


Inception1 1/1/68 1/1/68 


February 1 

PORTFOLIO MANAGER PROFILE84 Rupert H. Johnson Jr. 



Matt Moberg, CPA 


















Energy 5.59 






Apple Inc. 5.81% 


Intel Corp. 3.45 



Visa Inc. 2.89 


Amazon.com Inc. 2.33 


Hewlett-Packard Co. 2.15 



0 

7.18% 

23.08% 

2.64% -41.01% 

2005 2006 2007 2008 



FUND FACTS 




Beta 3 





4, 30 


12/08 

12/07 

12/06 


Short-Term 

Long-Term 

16.01% 

YTD 2009 14 

6/30/09 



YTD 


CLASS C 

ADVISOR43 37.19 -12.24 -13.11 -19.87 38.64 7.69 7.18 2.64 23.08 -41.01 16.01 

36.20 -12.91 -13.76 -20.41 37.62 6.79 6.44 1.88 22.10 -41.43 15.55 

37.19 -12.24 -13.11 -19.87 38.64 7.69 7.18 2.64 23.08 -40.92 16.16 





CLASS A 

CLASS C 

ADVISOR43 -24.86 -3.46 -0.82 0.52 7.77 -29.17 -5.35 -1.99 -0.07 7.77 

-25.44 -4.19 -1.57 -0.23 4.49 -26.11 -4.19 -1.57 -0.23 4.49 

-24.68 -3.37 -0.76 0.55 7.78 -24.68 -3.37 -0.76 0.55 7.78 




$441.8 $72.9 $5.9 

0.99% 1.75% 0.75% 

$20.07 $18.50 $20.13 

$21.29 $18.50 $20.13 

0.89 0.89 0.89 

22.12 22.12 22.11 


— — — 

— — — 

— — — 

— — — 

$1.5822 $1.5822 $1.5822 


Stocks 98% 

Cash 2% 


Franklin Global Real Estate Fund 


8, 67 


TM 67 


STYLE 


SIZE 

Large 

✕ 

Medium 

Small 


Sector 


Securities of companies located 

anywhere in the world that operate 

in the real estate sector, mainly Real 

Estate Investment Trusts (REITs) 

and similar REIT-like entities. 



Fund No. 495 595 

CUSIP 353 533 797 353 533 789 

Symbol FAGRX — 

Inception1 6/16/06 6/16/06 

ADVISOR 89 

Fund No. 695 

CUSIP 353 533 771 

Symbol FVGRX 


✕ Current 

Historical 


December 1 

PORTFOLIO MANAGER PROFILE84 Jack Foster 



David Levy 














PROPERTY BREAKDOWN 

Retail Property 34.07% 

Office Space 26.11 

Healthcare Property 8.41 

Mall/Outlet Property 7.71 

Residential 6.25 

Diversified 4.97 

Industrial Property 

Hotel/Resort & Entertainment 

4.31 

Property 2.39 

Storage Property 2.09 

Manufactured Home Property 0.94 

TOP 5 COUNTRIES 

United States 48.93% 

Australia 14.33 

Japan 9.48 

United Kingdom 7.95 

France 6.22 

TOP 10 HOLDINGS7 Westfield Group Australia 9.01% 

Unibail-Rodamco SA 4.38 

Simon Property Group Inc. 4.30 

Boston Properties Inc. 3.17 

British Land Company PLC 2.71 

Ventas Inc. 2.71 

Vornado Realty Trust 2.33 

Public Storage 2.09 

Host Hotels & Resorts Inc. 2.03 

HCP Inc. 2.03 



0 

-12.10% 

2005 2006 2007 2008 

-42.49% -9.98% 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — -12.10 -42.49 -9.98 

CLASS C — — — — — — — — -12.68 -42.88 -10.38 

ADVISOR — — — — — — — — -11.79 -42.24 -9.96 





CLASS A -39.70 -18.58 — — -17.96 -43.19 -20.17 — — -19.55 

CLASS C -40.20 -19.14 — — -18.53 -40.76 -19.14 — — -18.53 

ADVISOR -39.58 -18.34 — — -17.70 -39.58 -18.34 — — -17.70 


9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



YTD 2009 14 


$14.0 $3.4 $32.3 

1.61% 2.27% 1.28% 

1.38% 2.04% 1.05% 

$4.69 $4.66 $4.70 

$4.98 $4.66 $4.70 

— — — 

— — — 


Stocks 98% 

Cash 2% 


Beta 3 




Quarterly in March, June, September and December. 


9, 15 

Distribution Rate 


9.29% 9.21% 10.12% 

— — — 

— — — 

$0.4039 $0.3801 $0.4129 

— — — 

— — — 

30 

6/09 

3/09 

12/08 


Short-Term 

Long-Term 



VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


42 6/30/09 

Franklin Gold and Precious Metals Fund 

TM 67 


STYLE 


SIZE 

✕ Large 

Medium 

Small 


Sector 



companies engaged in mining, 

processing or dealing in gold and 

other precious metals. 



Fund No. 132 232 

CUSIP 353 535 107 353 535 206 

Symbol FKRCX FRGOX 

Inception1 5/19/69 5/1/95 

ADVISOR 89 

Fund No. 632 

CUSIP 353 535 305 

Symbol FGADX 


✕ Current 

Historical 


December 1 

PORTFOLIO MANAGER PROFILE84 Steve Land, CFA 



Frederick G. Fromm, CFA 













5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 25.39 -7.38 10.00 37.38 52.32 -5.47 40.59 31.70 25.59 -30.89 25.87 

24.46 -7.95 9.19 36.49 51.13 -6.15 39.49 30.78 24.68 -31.41 25.38 

25.95 -7.26 10.26 37.79 52.70 -5.23 40.87 32.06 25.89 -30.71 26.02 





CLASS A 

CLASS C 

ADVISOR43 -21.04 6.11 18.18 16.51 6.35 -25.59 4.04 16.79 15.83 6.20 

-21.63 5.32 17.30 15.66 7.35 -22.41 5.32 17.30 15.66 7.35 

-20.84 6.37 18.46 16.80 6.53 -20.84 6.37 18.46 16.80 6.53 





Canada 39.48% 

South Africa 22.66 



Peru 3.76 

TOP 10 HOLDINGS7 Randgold Resources Ltd. 7.21% 

AngloGold Ashanti Ltd. 7.08 

Newcrest Mining Ltd. 6.74 

Goldcorp Inc. 6.15 

Impala Platinum Holdings Ltd. 5.90 

Barrick Gold Corp. 4.66 

Compania de Minas Buenaventura SA 3.76 

Kinross Gold Corp. 3.71 

Yamana Gold Inc. 3.22 

Gold Fields Ltd. 3.10 



0 

40.59% 

31.70% 

25.59% 

-30.89% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 





4, 30 


12/08 

12/07 

12/06 


Short-Term 

Long-Term 

25.87% 

YTD 2009 14 



$1,247.9 $291.2 $124.5 

0.91% 1.66% 0.66% 

$31.43 $30.33 $32.50 

$33.35 $30.33 $32.50 

1.00 1.00 1.00 

49.06 49.06 49.06 


— — — 

$1.9717 $1.7317 $2.0599 

0.7618 0.4672 0.8527 

— — — 

0.1215 0.1215 0.1215 


Stocks 98% 

Cash 2% 


Franklin Natural Resources Fund 


8, 67 


TM 67 


STYLE 


SIZE 

✕ Large 

Medium 

Small 


Sector 


Securities of companies that 

own, produce, refine and market 

natural resources, as well as those 

that provide support services for 

natural resources companies. The 

fund may also invest in securities 

of issuers outside the U.S. 



Fund No. 403 503 

CUSIP 354 713 604 354 713 455 

Symbol FRNRX FNCRX 

Inception1 6/5/95 9/1/05 

ADVISOR 89 

Fund No. 613 

CUSIP 354 713 851 

Symbol FNRAX 


✕ Current 

Historical 


September 1 

PORTFOLIO MANAGER PROFILE84 Frederick G. Fromm, CFA 



Matthew Adams, CFA 



Steve Land, CFA 















Energy 70.81% 






TOP 10 HOLDINGS7 XTO Energy Inc. 3.41% 

Occidental Petroleum Corp. 3.30 

Devon Energy Corp. 3.28 

Southwestern Energy Co. 2.82 

Marathon Oil Corp. 2.70 

Range Resources Corp. 2.66 

Noble Energy Inc. 2.56 

EOG Resources Inc. 2.44 

Petrohawk Energy Corp. 2.31 

Chevron Corp. 2.10 



37.50% 

38.87% 

0 

14.24% 

-51.18% 



FUND FACTS 





Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 

27.02% 

2005 2006 2007 2008 YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 33.52 34.82 -16.70 -5.24 24.98 31.23 37.50 14.24 38.87 -51.18 27.02 

— — — — — — — 13.39 37.96 -51.53 26.56 

38.00 35.30 -16.43 -4.93 25.57 31.74 37.96 14.59 39.27 -51.03 27.18 





CLASS A 

CLASS C 

ADVISOR43 -47.91 -3.97 9.62 9.37 9.83 -50.91 -5.85 8.32 8.72 9.36 

-48.29 -4.65 — — -0.49 -48.77 -4.65 — — -0.49 

-47.77 -3.70 9.95 9.74 10.47 -47.77 -3.70 9.95 9.74 10.47 




$462.0 $74.7 $61.7 

0.99% 1.70% 0.70% 

$24.63 $24.16 $26.16 

$26.13 $24.16 $26.16 

1.27 1.27 1.27 

35.89 35.90 35.90 


— — — 

$0.5173 $0.3229 $0.6218 

0.2471 0.0719 0.3452 

0.6640 0.6640 0.6640 

0.8367 0.8367 0.8367 


Stocks 92% 

Cash 8% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Real Estate Securities Fund 


8, 67 


TM 67 


STYLE 


SIZE 

Large 

✕ 

Medium 

Small 

✕ Current 

Historical 


Sector 


Securities of companies, including 

small cap, operating in the real 

estate industry, focusing on equity 

real estate investment trusts (REITs). 



Fund No. 192 292 

CUSIP 354 602 104 354 602 203 

Symbol FREEX FRRSX 

Inception1 1/3/94 5/1/95 

ADVISOR 89 

Fund No. 692 

CUSIP 354 602 302 

Symbol FRLAX 



September 1 

PORTFOLIO MANAGER PROFILE84 Jack Foster 



David Levy 















Retail REITs 31.00% 

Specialized REITs 25.01 

Office REITs 15.95 

Residential REITs 11.60 

Diversified REITs 8.26 

Industrial REITs 5.23 

TOP 10 HOLDINGS7 Simon Property Group Inc. 8.51% 





HCP Inc. 3.95 


Kimco Realty Corp. 3.61 

Equity Residential 3.24 

Health Care REIT Inc. 3.23 



21.28% 

13.22% 

0 

-27.78% 

-38.12% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 



6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 -5.63 30.84 7.64 1.70 37.64 32.13 13.22 21.28 -27.78 -38.12 -17.43 

-6.31 29.88 6.93 0.89 36.66 31.14 12.37 20.40 -28.32 -38.58 -17.76 

-5.38 31.19 7.90 2.00 37.94 32.47 13.50 21.61 -27.60 -37.99 -17.35 





CLASS A 

CLASS C 

ADVISOR43 -46.80 -24.11 -8.62 1.67 5.12 -49.87 -25.59 -9.70 1.07 4.72 

-47.21 -24.68 -9.30 0.91 4.21 -47.68 -24.68 -9.30 0.91 4.21 

-46.69 -23.93 -8.40 1.92 5.45 -46.69 -23.93 -8.40 1.92 5.45 




$135.5 $26.8 $1.9 

1.03% 1.78% 0.78% 

$7.71 $7.52 $7.75 

$8.18 $7.52 $7.75 

0.93 0.93 0.93 

39.40 39.42 39.44 


Quarterly on the 15 th of March, June, September and December. 


Distribution Rate15 4, 30 


3.20% 2.49% 3.71% 

6/09 

$0.0355 $0.0128 $0.0440 

3/09 

— — — 

12/08 


0.0830 0.0625 0.0898 

Short-Term 

— — — 

Long-Term 

0.9353 0.9353 0.9353 

-17.43% 

YTD 2009 14 


Stocks 97% 

Cash 3% 


Franklin Utilities Fund 


CLASS A 8 

★★★★ 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 

✕ Current 

Historical 


Sector 

TM 67 



public utility companies located in 

high growth areas. 



Fund No. 107 207 

CUSIP 353 496 409 353 496 706 

Symbol FKUTX FRUSX 

Inception1 9/30/48 5/1/95 


Fund No. 807 607 

CUSIP 353 496 698 353 496 854 

Symbol FRURX FRUAX 

Inception1 9/30/48 9/30/48 


February 1 

PORTFOLIO MANAGER PROFILE 84 

John Kohli, CFA, CPA 
















Electric Utilities 47.78% 

Multi-Utilities 35.85 

Independent Power Producers & 

Energy Traders 2.92 

Oil & Gas Storage & Transportation 2.85 

Integrated Telecommunication 

Services 2.59 

Gas Utilities 1.49 

Water Utilities 1.00 


Exelon Corp. 5.63% 

Entergy Corp. 4.46 

PG&E Corp. 4.23 

FPL Group Inc. 4.17 

Sempra Energy 4.16 

Southern Co. 4.08 

Public Service Enterprise Group Inc. 3.59 

PPL Corp. 3.45 

FirstEnergy Corp. 3.25 

Progress Energy Inc. 2.97 



23.89% 

16.42% 

10.74% 

0 

-25.60% 

2005 2006 2007 2008 

-0.79% 

YTD 2009 14 

6/30/09 



YTD 

2009 14 

CLASS A 

CLASS C 

ADVISOR43 -15.00 41.61 -8.09 -10.48 19.30 23.14 10.74 23.89 16.42 -25.60 -0.79 

-15.45 40.95 -8.54 -10.89 18.56 22.70 10.16 23.17 15.90 -26.00 -0.97 

-14.76 41.66 -7.94 -10.32 19.39 23.39 10.94 23.97 16.67 -25.50 -0.71 





CLASS A 

CLASS C 

ADVISOR43 -22.49 0.28 6.73 6.09 9.51 -25.77 -1.15 5.81 5.62 9.43 

-22.85 -0.20 6.22 5.56 7.26 -23.58 -0.20 6.22 5.56 7.26 

-22.35 0.43 6.91 6.24 9.57 -22.35 0.43 6.91 6.24 9.57 




$10,000 from Inception $2,389,295 $26,974 $2,573,155 

FUND FACTS 




Beta 3 



Stocks 94% 

Bonds 4% 

Cash 2% 


$1,471.5 $283.0 $59.1 

0.74% 1.24% 0.59% 

$10.21 $10.18 $10.26 

$10.66 $10.18 $10.26 

0.89 0.89 0.89 

16.29 16.26 16.27 



Quarterly on the 15th of March, June, September and December. 




3.94% 3.67% 4.22% 

6/09 

$0.1050 $0.0934 $0.1083 

3/09 

0.1010 0.0871 0.1049 

12/08 


0.1010 0.0872 0.1051 

Short-Term 

— — — 

Long-Term 

0.0773 0.0773 0.0773 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Mutual Financial Services Fund 


CLASS A 8 

★★★★ 


Sector 




high-yield, lower-rated securities of 



undervalued. These companies may 

be involved in mergers, consolidations, 

liquidations, and reorganizations. 

The fund focuses primarily on 

companies, including smallcapitalization 

companies, in the 

financial services industry. 



Fund No. 479 579 

CUSIP 354 026 106 354 026 205 

Symbol TFSIX TMFSX 

Inception1 8/19/97 8/19/97 

CLASS Z 89 

Fund No. 079 

CUSIP 354 026 304 

Symbol TEFAX 



May 1 


Charles M. Lahr, CFA 















Insurance 33.76% 

Banks 17.84 


Real Estate 5.35 

Media 0.95 




Food & Staples Retailing 


0.33 


TOP 10 HOLDINGS7 Deutsche Boerse AG 3.45% 

Symetra Financial 3.30 

Maiden Holdings Ltd. 2.99 

Intesa Sanpaolo SpA 2.64 

BNP Paribas 2.32 

Hellenic Exchanges SA Holding 2.31 

CNinsure Inc. 2.31 

Lancashire Holdings Ltd. 2.23 

AmTrust Financial Services Inc. 2.12 

Bolsas y Mercados Espanoles 2.02 



19.35% 

13.82% 

0 

-8.99% -40.23% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 



6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A 4.35 31.90 11.85 -0.57 29.79 15.17 13.82 19.35 -8.99 -40.23 3.60 

CLASS C 3.67 31.08 11.15 -1.20 28.87 14.46 13.06 18.52 -9.60 -40.63 3.24 

CLASS Z 4.70 32.29 12.31 -0.27 30.23 15.62 14.14 19.73 -8.71 -40.08 3.80 





CLASS A -20.31 -13.84 -3.02 4.53 7.35 -24.91 -15.52 -4.16 3.91 6.81 

CLASS C -20.83 -14.43 -3.68 3.83 6.64 -21.61 -14.43 -3.68 3.83 6.64 

CLASS Z -20.04 -13.58 -2.72 4.87 7.69 -20.04 -13.58 -2.72 4.87 7.69 



$21,856 $21,446 $24,072 


$253.0 $98.4 $90.3 

1.49% 2.19% 1.19% 

$11.22 $11.15 $11.21 

$11.90 $11.15 $11.21 

0.44 0.44 0.44 

16.60 16.61 16.62 



CLASS A 



30 

12/08 

9/08 

12/07 


$0.3080 $0.2114 $0.3503 

0.0473 0.0377 0.0512 

0.4190 0.2657 0.4853 

Short-Term 

— — — 

Long-Term 

— — — 

3.60% 

YTD 2009 14 


Stocks 76% 

Cash 19% 

Bonds 5% 


92 6/30/09 

Mutual Global Discovery Fund 


CLASS A 8 

★★★★★ 


Global 




high yield, lower-rated securities of 

domestic and foreign companies, 


available at prices less than their 

intrinsic value. Investments include 

securities of smaller capitalization 

companies and companies involved 

in mergers, consolidations, liquidations, 


Effective 5/1/09, Mutual Discovery Fund 

changed its name to Mutual Global Discovery 

Fund. The fund’s investment goal and strategy 

remained unchanged. 



Fund No. 477 577 

CUSIP 628 380 859 628 380 842 

Symbol TEDIX TEDSX 

Inception1 12/31/92 12/31/92 


CUSIP 354 026 601 628 380 404 

Symbol TEDRX MDISX 

Inception1 12/31/92 12/31/92 


May 1 

PORTFOLIO MANAGER PROFILE84 Anne E. Gudefin, CFA 



Charles M. Lahr, CFA 













5, 13, 27 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 26.38 12.26 0.86 -9.39 31.13 18.98 15.29 23.02 10.96 -26.73 7.62 

CLASS C 25.50 11.53 0.25 -9.98 30.29 18.17 14.56 22.17 10.24 -27.27 7.22 

CLASS Z 26.80 12.59 1.26 -9.06 31.55 19.39 15.70 23.43 11.32 -26.55 7.76 





CLASS A -12.41 -0.15 7.26 8.12 12.21 -17.44 -2.11 6.00 7.48 11.80 

CLASS C -13.06 -0.86 6.52 7.40 11.46 -13.89 -0.86 6.52 7.40 11.46 

CLASS Z -12.19 0.14 7.59 8.48 12.61 -12.19 0.14 7.59 8.48 12.61 







Energy 


5.48 



Banks 3.17 



Media 2.45 



United States 15.47% 

France 11.33 


Hong Kong 4.56 

Germany 4.47 


Wyeth 3.28 



Danone 2.39 


Carlsberg AS 2.04 


Eutelsat Communications 1.71 




23.02% 

15.29% 

10.96% 

0 

-26.73% 

2005 2006 2007 2008 

22, 27 




FUND FACTS 





Beta 3 




$6,534.8 $2,116.3 $4,133.7 

1.30% 2.01% 1.02% 

$24.00 $23.76 $24.29 

$25.46 $23.76 $24.29 

0.48 0.48 0.48 

12.31 12.31 12.30 



CLASS A 



30 

12/08 

9/08 

12/07 


$0.3287 $0.1334 $0.4031 

0.0348 0.0170 0.0430 

0.6229 0.4306 0.7089 

Short-Term 

0.7715 0.7715 0.7715 

Long-Term 

0.0951 0.0951 0.0951 

7.62% 

YTD 2009 14 


Stocks 64% 

Cash 32% 

Bonds 4% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton Global Long-Short Fund 


Global 

PRIMARY INVESTMENT37 Seeks to achieve long-term capital 

appreciation in both up and down 

markets with less volatility than the 

overall global stock market. 

The minimum initial purchase is $10,000 

and the minimum subsequent investment in 

the continuous offering is $1,000. 



CUSIP 353 61F 881 353 61F 865 

Symbol TLSAX — 

Inception1 7/31/01 7/31/01 


March 1 


Matthew Nagle, CFA, CPA 











TOP 5 LONG INDUSTRY BREAKDOWN 

Telecommunication Services 


12.97% 


Energy 8.96 

Media 7.66 


TOP 5 SHORT INDUSTRY BREAKDOWN 

Diversified Financials -13.25% 

Media -2.57 

Commercial & Professional Services -2.40 

Capital Goods -2.15 

Consumer Durables & Apparel -1.00 

GEOGRAPHIC BREAKDOWN 

Europe 54.14% 

North America 51.19 

Asia 11.59 

Australia/New Zealand 1.70 

Latin America/Caribbean 0.99 

The geographic breakdown reflects long and short 

positions and may not total 100%. 

TOP 10 HOLDINGS7 Merck & Company Inc. 2.30% 



BP PLC 2.12 

Vodafone Group PLC 2.03 



Gazprom 1.88 

Flextronics International Ltd. 1.87 

Telekom Austria AG 1.85 



0 

3.33% 

14.35% 

9.24% 

-37.56% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 




Annually. 


6/09 

12/08 

12/07 


Short-Term 

Long-Term 

4.51% 

YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


ADVISOR43 — — — -1.18 10.64 4.65 3.33 14.35 9.24 -37.56 4.51 

— — — -1.18 10.64 4.77 3.66 14.73 9.61 -37.38 4.64 




CLASS A 

ADVISOR 43 


-25.29 -8.44 -2.53 — -0.24 -29.60 -10.23 -3.68 — -0.99 

-25.14 -8.16 -2.23 — -0.05 -25.14 -8.16 -2.23 — -0.05 


CLASS A ADVISOR43 $9,246 $ 9,961 


$50.6 $1.3 

2.46% 2.16% 

$7.02 $7.05 

$7.45 $7.05 

1.23 1.23 

18.06 18.07 


— — 

— — 

$0.1369 $0.1732 

0.5294 0.5294 

1.6635 1.6635 


Net Stock 

Exposure 70% 

Long 95% 

Short -25% 

Cash 30% 


Templeton Global Opportunities Trust 


CLASS A 8 

★★★★ 


STYLE 


SIZE 

✕ Large 

Medium 

Small 


Global 


Stocks and bonds, including high 

yield, lower-rated bonds, issued 

by companies and governments of 

any nation, including developing 

markets. 



Fund No. 415 515 

CUSIP 880 20E 100 880 20E 209 

Symbol TEGOX TEGPX 

Inception1 2/28/90 5/1/95 

ADVISOR 89 

Fund No. 678 

CUSIP 880 20E 407 

Symbol — 


✕ Current 

Historical 

TM 67 


May 1 

PORTFOLIO MANAGER PROFILE84 Guang Yang, CFA 



Tina Sadler, CFA 

Joined Templeton in 1997 


Peter A. Nori, CFA 














INDUSTRY BREAKDOWN 


& Life Sciences 14.97% 

Energy 10.19 


Banks 7.68 

Media 6.14 







Europe 33.56% 

Asia 27.05 




Mid-East/Africa 0.73 


China Resources Power Company Ltd. 2.56% 

Petroleo Brasileiro SA (Petrobras) 2.53 


BYD Company Ltd. 1.97 

Telefonica SA 1.85 

Accenture Ltd. 1.75 

Inspur International Ltd. 1.73 

Sanofi-Aventis 1.68 

Watson Pharmaceuticals Inc. 1.67 




27.87% 

0 

12.63% 

17.44% 

-42.54% 

2005 2006 2007 2008 

10.51% 

YTD 2009 14 

6/30/09 



YTD 


CLASS C 

ADVISOR43 27.17 -3.16 -8.97 -21.79 36.74 16.55 12.63 27.87 17.44 -42.54 10.51 

26.28 -3.83 -9.68 -22.33 35.58 15.74 11.79 26.86 16.60 -42.96 10.05 

27.17 -3.16 -8.97 -21.79 36.74 16.55 12.63 27.87 17.44 -42.54 10.51 





CLASS A 

CLASS C 

ADVISOR43 -27.09 -4.22 3.76 3.12 7.63 -31.28 -6.10 2.54 2.51 7.30 

-27.65 -4.94 2.98 2.35 5.25 -28.35 -4.94 2.98 2.35 5.25 

-27.09 -4.22 3.76 3.12 7.63 -27.09 -4.22 3.76 3.12 7.63 

Advisor Class shares are offered only to certain eligible investors as stated in the prospectus. 



FUND FACTS 





Stocks 93% 

Cash 7% 


$722.8 $34.2 $0.4 

1.34% 2.08% 1.09% 

$14.30 $14.02 $14.30 

$15.17 $14.02 $14.30 

0.99 0.99 — 

23.41 23.41 — 


Beta 3 




Annually in September and if necessary, December. 



12/08 

9/08 

12/07 


$0.2484 $0.1390 — 

— — — 

0.2246 0.0881 — 

Short-Term 

0.2894 0.2894 — 

Long-Term 

0.2041 0.2041 — 



VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton Global Smaller Companies Fund 

TM 67 


STYLE 


SIZE 

Large 

✕ 

Medium 

Small 






ADVISOR 89 




✕ Current 

Historical 


Global 


Stocks of smaller companies of 

any nation. 



Fund No. 103 203 

CUSIP 880 22L 102 880 22L 201 

Symbol TEMGX TESGX 

Inception1 6/1/81 5/1/95 

ADVISOR 89 

Fund No. 603 

CUSIP 880 22L 300 

Symbol TGSAX 



January 1 

PORTFOLIO MANAGER PROFILE84 Bradley Radin, CFA 



Harlan Hodes, CPA 








Consumer Durables & Apparel 20.66% 


Banks 8.69 







Consumer Services 2.75 


Asia 39.12% 


Europe 23.82 




Tempur-Pedic International Inc. 3.07% 

Chico’s FAS Inc. 3.03 

Legg Mason Inc. 2.35 

Dah Sing Financial Holdings Ltd. 2.31 

Barco NV 2.04 

Sinotrans Ltd. 2.01 

Sealy Corp. 2.00 

Hibbett Sports Inc. 1.98 

Bank of Ayudhya Public Company Ltd. 1.94 

Glow Energy Public Company Ltd. 1.93 



0 

7.70% 

24.30% 

0.93% 

-50.28% 

2005 2006 2007 2008 

28.57% 

YTD 2009 14 

6/30/09 



YTD 


CLASS C 

ADVISOR43 10.11 -8.38 -1.71 -8.79 53.36 26.27 7.70 24.30 0.93 -50.28 28.57 

9.19 -8.94 -2.55 -9.36 52.22 25.27 6.78 23.62 0.02 -50.63 27.99 

10.35 -8.04 -1.55 -8.51 53.95 26.43 7.98 24.66 1.16 -50.05 28.49 





CLASS A 

CLASS C 

ADVISOR43 -26.33 -9.19 0.34 3.66 9.39 -30.56 -10.95 -0.84 3.05 9.15 

-27.00 -9.88 -0.44 2.89 4.02 -27.63 -9.88 -0.44 2.89 4.02 

-26.17 -8.94 0.58 3.93 9.53 -26.17 -8.94 0.58 3.93 9.53 




FUND FACTS 




Beta 3 






12/08 

12/07 

10/07 


Short-Term 

Long-Term 


Stocks 97% 

Cash 3% 


$599.9 $27.7 $116.7 

1.35% 2.09% 1.12% 

$4.50 $4.39 $4.51 

$4.77 $4.39 $4.51 

1.13 1.13 1.13 

30.34 30.29 30.38 


$0.0853 $0.0227 $0.1019 

— — — 

0.0983 0.0312 0.1216 

— — — 

0.5427 0.5427 0.5427 


Templeton Growth Fund 

TM 67 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 

✕ Current 

Historical 


Global 



any nation. 



Fund No. 101 201 

CUSIP 880 199 104 880 199 203 

Symbol TEPLX TEGTX 

Inception1 11/29/54 5/1/95 


CUSIP 880 199 500 880 199 302 

Symbol TEGRX TGADX 

Inception1 11/29/54 11/29/54 


January 1 

PORTFOLIO MANAGER PROFILE84 Cindy L. Sweeting, CFA 



Lisa F. Myers, CFA 



Tucker Scott, CFA 


















Energy 10.11 

Media 9.63 





Banks 3.97 



Europe 44.13% 


Asia 12.39 







Pfizer Inc. 2.55 

Siemens AG 2.02 

Vodafone Group PLC 2.02 

GlaxoSmithKline PLC 1.99 

BP PLC 1.94 

Total SA 1.91 



21.81% 

0 

8.15% 

2.19% 

-43.47% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 






12/08 

12/07 

10/07 


Short-Term 

Long-Term 

4.90% 

YTD 2009 14 

6/30/09 



YTD 


CLASS C 

ADVISOR43 30.44 1.74 0.54 -9.48 32.85 17.00 8.15 21.81 2.19 -43.47 4.90 

29.45 0.96 -0.18 -10.17 31.86 16.15 7.34 20.94 1.40 -43.88 4.46 

30.85 1.96 0.86 -9.28 33.15 17.28 8.45 22.12 2.44 -43.32 4.98 





CLASS A 

CLASS C 

ADVISOR43 -29.96 -11.48 -2.23 2.29 12.34 -33.98 -13.21 -3.38 1.68 12.22 

-30.52 -12.14 -2.96 1.53 5.19 -31.20 -12.14 -2.96 1.53 5.19 

-29.84 -11.26 -1.99 2.54 12.42 -29.84 -11.26 -1.99 2.54 12.42 




$11,955.5 $983.6 $3,013.8 

1.03% 1.77% 0.78% 

$13.69 $13.34 $13.69 

$14.53 $13.34 $13.69 

0.98 0.98 0.98 

22.81 22.79 22.77 


$0.5363 $0.3715 $0.5906 

0.0621 0.0017 0.0831 

0.3104 0.1824 0.3551 

— — — 

— — — 


Stocks 97% 

Cash 2% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton World Fund 


CLASS A 8 

★★★★ 


STYLE 


SIZE 

✕ Large 

Medium 

Small 


Global 



any nation. 



Fund No. 102 202 

CUSIP 880 196 100 880 196 308 

Symbol TEMWX TEWTX 

Inception1 1/17/78 5/1/95 

ADVISOR 89 

Fund No. 602 

CUSIP 880 196 886 

Symbol TWDAX 


✕ Current 

Historical 

TM 67 


January 1 

PORTFOLIO MANAGER PROFILE84 Cindy L. Sweeting, CFA 






Tucker Scott, CFA 


















Energy 10.70 


Media 7.73 

Capital Goods 


5.92 






North America 37.60% 

Europe 33.03 

Asia 21.70 






Oracle Corp. 

Taiwan Semiconductor 

2.41 

Manufacturing Company Ltd. 2.31 


Cheung Kong Holdings Ltd. 2.09 

Samsung Electronics Company Ltd. 2.01 


UPS Inc. 1.89 




0 

11.67% 

20.89% 



FUND FACTS 





Beta 3 

8.49% 6.99% 

-39.52% 

2005 2006 2007 2008 






12/08 

12/07 

10/07 


Short-Term 

Long-Term 

YTD 2009 14 

6/30/09 



YTD 


CLASS C 

ADVISOR43 28.12 -3.99 -8.10 -12.15 33.38 15.63 11.67 20.89 8.49 -39.52 6.99 

27.16 -4.68 -8.83 -12.79 32.41 14.79 10.79 19.98 7.73 -39.98 6.61 

28.12 -3.99 -8.10 -12.15 33.38 15.63 11.67 21.11 8.75 -39.38 7.19 





CLASS A 

CLASS C 

ADVISOR43 -25.00 -7.07 1.27 2.31 11.68 -29.31 -8.88 0.07 1.70 11.47 

-25.53 -7.76 0.51 1.54 5.87 -26.24 -7.76 0.51 1.54 5.87 

-24.78 -6.83 1.43 2.39 11.71 -24.78 -6.83 1.43 2.39 11.71 




$4,930.1 $214.4 $141.5 

1.05% 1.80% 0.81% 

$11.48 $11.13 $11.48 

$12.18 $11.13 $11.48 

0.95 0.95 0.95 

21.19 21.19 21.16 


$0.3006 $0.1742 $0.3401 

0.0799 0.0331 0.0945 

0.2446 0.1449 0.2778 

— — — 

0.3343 0.3343 0.3343 


Stocks 96% 

Cash 3% 

Bonds 1% 


Franklin India Growth Fund 


RATING TM – CLASS A 8 


International 


Franklin India Growth Fund seeks 

long-term capital appreciation by 

investing primarily in equity 

securities of companies based 

in India, companies that derive 

a majority of their revenues or 

profits from the Indian economy, 

or companies with a majority of 

their assets in India. 



Fund No. 141 241 

CUSIP 353 61F 857 353 61F 840 


Inception1 1/31/08 1/31/08 

ADVISOR 89 

Fund No. 644 

CUSIP 353 61F 832 

Symbol FIGZX 



March 1 

PORTFOLIO MANAGER PROFILE84 Stephen H. Dover, CFA 



Purav A. Jhaveri, CFA, FRM 













5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — — — 44.11 

CLASS C — — — — — — — — — — 43.57 

ADVISOR — — — — — — — — — — 44.42 




CLASS A 

CLASS C 

ADVISOR 


3.59 — — — -20.58 -2.43 — — — -23.84 

2.88 — — — -21.12 1.88 — — — -21.12 

3.89 — — — -20.33 3.89 — — — -20.33 





Banks 20.47% 

Energy 12.99 







Household & Personal Products 


5.25 


TOP 10 HOLDINGS7 Reliance Industries Ltd. 7.16% 

Infosys Technologies Ltd. 5.31 

HDFC Bank Ltd. 5.21 

Kotak Mahindra Bank Ltd. 

Housing Development Finance 

4.97 

Corporation Ltd. 4.72 

Nestle India Ltd. 4.34 

Bharti Airtel Ltd. 3.98 

Icici Bank Ltd. 3.36 

Hindustan Unilever Ltd. 3.12 

Asian Paints Ltd. 2.60 



0 

2005 2006 2007 2008 

6/30/09 

9, 22 




44.11% 

FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 






12/08 


Short-Term 

Long-Term 

YTD 2009 14 


Stocks 93% 

Cash 7% 


$7.2 $2.1 $45.0 

2.78% 3.48% 2.48% 

1.70% 2.40% 1.40% 

$7.22 $7.15 $7.25 

$7.66 $7.15 $7.25 

— — — 

— — — 


— — $0.0013 

— — — 

— — — 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin International Growth Fund 




International 


Predominantly in mid- and largecapitalization 

companies outside the 

U.S. with strong growth potential. 



Fund No. 429 248 

CUSIP 353 533 730 353 533 722 


Inception1 6/3/08 6/3/08 


CUSIP 353 533 714 353 533 698 


Inception1 6/3/08 6/3/08 


December 1 

PORTFOLIO MANAGER PROFILE84 Coleen F. Barbeau 



M. Par Rostom, CFA 



John P. Remmert 













5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — — — 25.41 

CLASS C — — — — — — — — — — 24.91 

ADVISOR — — — — — — — — — — 25.59 





CLASS A -24.13 — — — -29.32 -28.47 — — — -33.11 

CLASS C -24.61 — — — -29.81 -25.36 — — — -29.81 

ADVISOR -23.86 — — — -29.08 -23.86 — — — -29.08 





Health Care Equipment & Services 9.37% 

Capital Goods 


8.66 



Energy 7.63 





Media 4.50 


United Kingdom 18.28% 



Switzerland 8.68 

Germany 5.30 

TOP 10 HOLDINGS 

Noble Group Ltd. 3.58% 

CSL Ltd. 3.40 

National Bank of Greece SA 3.02 

Deutsche Boerse AG 2.76 

Macquarie Group Ltd. 2.71 

Qiagen NV 2.69 

WorleyParsons Ltd. 2.65 

Hang Lung Properties Ltd. 2.60 

Li & Fung Ltd. 2.55 

ARM Holdings PLC 2.54 



0 

2005 2006 2007 2008 

25.41% 

YTD 2009 14 

6/30/09 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 






12/08 


Short-Term 

Long-Term 


$4.8 $0.4 $1.5 



Stocks 92% 

Cash 8% 

1.86% 2.51% 1.51% 

1.50% 2.15% 1.15% 

$6.86 $6.82 $6.87 

$7.28 $6.82 $6.87 

— — — 

— — — 

$0.0226 $0.0140 $0.0342 

— — — 

— — — 


Franklin International Small Cap Growth Fund 


CLASS A 8 

★★★★★ 


STYLE 


SIZE 

Large 

✕ Medium 

Small 

✕ Current 

Historical 


International 

TM 67 


Predominantly in equity securities 

of smaller international companies 

that the managers feel are poised 

for long-term dynamic growth. 



Fund No. 195 257 

CUSIP 353 533 763 353 533 755 


Inception1 10/15/02 10/15/02 


CUSIP 353 533 748 353 533 888 

Symbol — FKSCX 

Inception1 10/15/02 10/15/02 


December 1 

PORTFOLIO MANAGER PROFILE84 Edwin Lugo II, CFA 



David Glazer, CFA 













5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — 52.81 23.71 43.34 24.54 8.06 -37.41 25.49 

CLASS C — — — — 51.72 22.64 42.31 23.69 7.28 -37.68 25.03 

ADVISOR — — — — 53.39 24.30 43.90 25.00 8.48 -37.35 25.65 





CLASS A -14.27 -2.79 11.07 — 17.33 -19.20 -4.69 9.76 — 16.30 

CLASS C -14.67 -3.40 10.30 — 16.52 -15.23 -3.40 10.30 — 16.52 

ADVISOR -14.19 -2.53 11.44 — 17.73 -14.19 -2.53 11.44 — 17.73 





Retailing 12.24% 




Media 8.15 







United Kingdom 40.97% 

Germany 8.51 

Japan 8.47 


France 4.81 

TOP 10 HOLDINGS7 Signet Jewelers Ltd. 5.02% 

Neopost SA 4.81 

HomeServe 4.73 

Daibiru Corp. 4.41 

Carpetright PLC 4.40 

Vitasoy International Holdings Ltd. 4.25 

Experian PLC 4.24 

RHJ International 4.20 

Dignity PLC 3.60 

Rotork PLC 3.59 



43.34% 

0 

24.54% 

8.06% 

-37.41% 

2005 2006 2007 2008 

25.49% 

YTD 2009 14 

6/30/09 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 






12/08 

12/07 

12/06 


Short-Term 

Long-Term 


Stocks 91% 

Cash 9% 


$7.6 $1.3 $11.7 

1.78% 2.43% 1.43% 

1.30% 1.95% 0.95% 

$11.62 $11.59 $11.61 

$12.33 $11.59 $11.61 

0.82 0.82 0.82 

23.45 23.46 23.51 


$0.4041 $0.3616 $0.4118 

— — 0.2023 

— — 0.0937 

— — — 

4.3970 4.3970 4.3970 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Mutual European Fund 


CLASS A 8 

★★★★★ 


International 




high-yield, lower-rated securities, 

that the fund’s manager believes 

are undervalued. These companies 

may be involved in mergers, 

consolidations, liquidations, and 

reorganizations. The fund focuses 

on European companies and may 

invest in small cap stocks. 



Fund No. 478 578 

CUSIP 628 380 834 628 380 826 

Symbol TEMIX TEURX 

Inception1 7/3/96 7/3/96 

CLASS Z 89 

Fund No. 078 

CUSIP 628 380 503 

Symbol MEURX 



May 1 

PORTFOLIO MANAGER PROFILE84 Philippe Brugere-Trelat 



Katrina Dudley, CFA 













5, 13, 27 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 46.05 14.07 -5.05 -8.05 32.34 21.23 17.56 26.96 16.86 -32.68 2.90 

CLASS C 45.40 13.42 -5.65 -8.65 31.49 20.43 16.78 26.10 16.03 -33.14 2.51 

CLASS Z 46.81 14.46 -4.74 -7.71 32.84 21.58 18.03 27.30 17.15 -32.47 3.01 




CLASS A 

CLASS C 

CLASS Z 


-19.63 -1.95 6.74 9.51 11.51 -24.25 -3.86 5.49 8.87 11.00 

-20.21 -2.63 6.01 8.80 10.82 -20.99 -2.63 6.01 8.80 10.82 

-19.41 -1.68 7.06 9.87 11.92 -19.41 -1.68 7.06 9.87 11.92 








Energy 7.88 





Banks 


4.89 



France 21.59% 


Germany 16.82 


Netherlands 8.15 

TOP 10 HOLDINGS7 Schindler Holding AG 3.11% 


Anglo American PLC 2.73 



Linde AG 2.59 

Koninklijke KPN NV 2.52 

E.ON AG 2.49 

GDF Suez 2.45 

Eutelsat Communications 2.40 



26.96% 

17.56% 

16.86% 

0 

-32.68% 

2005 2006 2007 2008 

22, 27 




FUND FACTS 





Beta 3 



6/30/09 


$666.3 $171.5 $827.8 

1.38% 2.08% 1.09% 

$17.38 $17.18 $17.77 

$18.44 $17.18 $17.77 

0.57 0.57 0.57 

16.25 16.24 16.24 



CLASS A 



30 

12/08 

9/08 

12/07 


— — — 

$0.0221 $0.0056 $0.0286 

0.5721 0.4023 0.6424 

Short-Term 

0.1512 0.1512 0.1512 

Long-Term 

0.4671 0.4671 0.4671 

2.90% 

YTD 2009 14 


Stocks 99% 

Cash 1% 


Mutual International Fund 


International 


Mutual International Fund seeks 

capital appreciation, with income as 

a secondary goal, by investing predominantly 

in the securities of companies 

located outside the United 

States, primarily developed Asia and 

Europe. It will focus primarily on 

undervalued securities of mid- and 

large-capitalization companies and, 

to a lesser extent, distressed securities 

and merger arbitrage. 



Fund No. 373 573 

CUSIP 354 026 700 354 026 809 


Inception1 5/1/09 5/1/09 


CUSIP 354 026 882 354 026 874 


Inception1 5/1/09 5/1/09 


May 1 

PORTFOLIO MANAGER PROFILE84 Phillip Brugere-Trelat 


Tenure at Mutual Series 

1984-1994, 2004-Present 

Andrew Sleeman, CFA 













5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A — — — — — — — — — — — 

CLASS C — — — — — — — — — — — 

CLASS Z — — — — — — — — — — — 




6/30/09 


CLASS A — — — — 5.30 — — — — -0.75 

CLASS C — — — — 5.10 — — — — 4.10 

CLASS Z — — — — 5.30 — — — — 5.30 







Banks 7.49 




Media 6.42 





France 13.95% 

Germany 11.41 

China 10.72 


Italy 5.43 


CNinsure Inc. 1.80% 

Intesa Sanpaolo SpA 1.76 


China Digital TV Holding Co. 1.53 

Koninklijke KPN NV 1.52 

Barclays PLC 1.52 

Fortis 1.52 

Zurich Financial Services AG 1.52 

VisionChina Media Inc. 1.50 


9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 




Annually. 


$2.6 $0.2 $1.2 

1.91% 2.61% 1.61% 

1.47% 2.17% 1.17% 

$10.53 $10.51 $10.53 

$11.17 $10.51 $10.53 

— — — 

— — — 


Stocks 90% 

Bonds 1% 

Cash 10% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton BRIC Fund 



TM 67 


STYLE 


SIZE 

✕ Large 

Medium 

Small 


International 


The fund seeks long-term capital 

appreciation by normally investing 

at least 80% of its net assets in 

securities of “BRIC companies”— 

those companies that are organized 

under the laws of, have a principal 

office in, or have its principal trading 

market in Brazil, Russia, India or 

China (including the People’s Republic 

of China, Hong Kong and Taiwan); 

or derive a significant share of their 

total revenue or profit from, or have 

a significant portion of their assets 

in, BRIC countries. 



Fund No. 405 505 

CUSIP 880 19R 757 880 19R 740 

Symbol TABRX TPBRX 

Inception1 6/1/06 6/1/06 

ADVISOR 89 

Fund No. 655 

CUSIP 880 19R 682 

Symbol — 


✕ Current 

Historical 


August 1 

PORTFOLIO MANAGER PROFILE84 Mark Mobius, Ph.D. 



Dennis Lim 



Tom Wu 







ADVISOR 89 







5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A 

CLASS C 

ADVISOR43 — — — — — — — — 50.28 -61.39 44.15 

— — — — — — — — 49.32 -61.63 43.71 

— — — — — — — — 50.28 -61.38 44.48 




6/30/09 


CLASS A 

CLASS C 

ADVISOR43 -34.43 1.46 — — 2.50 -38.21 -0.52 — — 0.55 

-34.81 0.81 — — 1.86 -35.46 0.81 — — 1.86 

-34.27 1.55 — — 2.58 -34.27 1.55 — — 2.58 





Energy 33.33% 

Banks 18.33 









COUNTRY BREAKDOWN 

China 39.97% 

Brazil 30.75 

Russia 16.12 

India 11.54 

Other 0.52 

TOP 10 HOLDINGS7 Petroleo Brasileiro SA (Petrobras) 8.86% 

China Mobile Ltd. 6.90 

Vale SA 5.78 

Itau Unibanco Holding SA 5.09 

Gazprom 4.57 

Yanzhou Coal Mining Company Ltd. 4.35 

PetroChina Company Ltd. 4.27 

SOHO China Ltd. 

Industrial and Commercial Bank of 

4.07 

China Ltd. 3.59 

Banco Bradesco SA 3.10 



50.28% 

0 

-61.39% 

2005 2006 2007 2008 




FUND FACTS 




Beta 3 






12/08 

12/07 

5/07 


Short-Term 

Long-Term 

44.15% 

YTD 2009 14 


Stocks 99% 

Cash 1% 


$377.7 $118.4 $2.7 

2.09% 2.75% 1.75% 

$10.22 $10.16 $10.20 

$10.84 $10.16 $10.20 

— — — 

— — — 


$0.1416 $0.0722 $0.1746 

0.0580 — — 

— — — 

— — — 

— — — 


Templeton China World Fund 


CLASS A 8 

★★★★ 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 


International 

TM 67 


Equity securities of issuers located 

in or deriving a significant portion 

of their revenues from, or for which 

the principal securities trading market 

is China, Hong Kong or Taiwan. 

These companies may be smaller, 

newly organized, and relatively 

unseasoned companies. 



Fund No. 188 288 

CUSIP 880 18X 201 880 18X 409 

Symbol TCWAX TCWCX 

Inception1 9/9/93 9/9/93 

ADVISOR 89 

Fund No. 680 

CUSIP 880 18X 102 

Symbol TACWX 


✕ Current 

Historical 


January 1 




Eddie Chow, CFA 













5, 72 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A 39.66 -11.39 -1.14 16.95 67.78 13.06 17.63 40.86 44.08 -44.69 35.21 

CLASS C 38.65 -11.99 -1.82 16.19 66.71 12.34 16.91 39.95 43.15 -45.08 34.73 

ADVISOR 40.20 -11.06 -0.77 17.36 68.43 13.45 18.08 41.34 44.56 -44.54 35.44 





CLASS A -9.08 11.27 15.45 13.97 8.40 -14.31 9.10 14.09 13.30 7.99 

CLASS C -9.73 10.51 14.72 13.21 7.59 -10.52 10.51 14.72 13.21 7.59 

ADVISOR -8.82 11.62 15.84 14.38 8.83 -8.82 11.62 15.84 14.38 8.83 





Energy 27.64% 


Banks 9.81 





Capital Goods 


4.60 




China 65.89% 


Taiwan 12.33 

United States 0.41 

Cambodia 0.32 

TOP 10 HOLDINGS7 Dairy Farm International Holdings Ltd. 9.05% 

China Mobile Ltd. 

China Petroleum & Chemical Corp. 

7.19 

(Sinopec) 7.00 

CNOOC Ltd. 6.86 


Bank of China Ltd. 4.76 

China Shenhua Energy Company Ltd. 


4.19 


China Construction Bank 3.30 

Yanzhou Coal Mining Company Ltd. 2.99 



40.86% 44.08% 

0 

17.63% 

-44.69% 

2005 2006 2007 2008 

22, 72 




FUND FACTS 




Beta 3 






12/08 

12/07 

10/07 


Short-Term 

Long-Term 

35.21% 

YTD 2009 14 

6/30/09 


$349.9 $125.5 $247.6 

1.98% 2.67% 1.68% 

$28.53 $28.24 $28.66 

$30.27 $28.24 $28.66 

0.99 0.99 0.99 

33.66 33.66 33.66 


$0.3029 $0.0247 $0.4348 

0.0973 0.0059 0.1486 

0.3153 0.1704 0.3913 

0.5143 0.5143 0.5143 

2.4917 2.4917 2.4917 


Stocks 98% 

Cash 2% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton Developing Markets Trust 



TM 67 


STYLE 


SIZE 

✕ Large 

Medium 

Small 

✕ Current 

Historical 


International 


Developing or emerging market 

companies’ common stocks. 



Fund No. 711 791 

CUSIP 88018W 104 880 18W 203 

Symbol TEDMX TDMTX 

Inception1 10/16/91 5/1/95 


CUSIP 880 18W 500 880 18W 302 

Symbol TDMRX TDADX 

Inception1 10/16/91 10/16/91 


May 1 




Tom Wu 



Dennis Lim 













5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 51.55 -31.85 -5.76 1.68 53.14 25.45 28.20 28.29 28.77 -53.91 29.04 

50.44 -32.36 -6.34 0.98 52.25 24.72 27.31 27.38 27.87 -54.27 28.63 

51.95 -31.67 -5.43 2.20 53.72 25.98 28.63 28.63 29.12 -53.79 29.21 





CLASS A -28.78 -2.54 9.34 5.79 6.66 -32.86 -4.45 8.05 5.16 6.30 

CLASS C -29.30 -3.25 8.56 5.07 5.02 -29.96 -3.25 8.56 5.07 5.02 

ADVISOR -28.57 -2.26 9.66 6.14 6.89 -28.57 -2.26 9.66 6.14 6.89 

43 





Energy 24.46% 


Banks 13.91 





Media 2.95 




Asia 39.49% 


Europe 24.25 


TOP 10 HOLDINGS7 Petroleo Brasileiro SA (Petrobras) 3.84% 


Vale SA 3.23 

Gazprom 3.16 

China Mobile Ltd. 3.07 

Lukoil Holdings 2.93 

America Movil SAB de CV 2.42 

Anglo American PLC 2.09 

Itau Unibanco Holding SA 1.89 

OTP Bank 1.84 



FUND FACTS 




Beta 3 



28.20% 28.29% 28.77% 29.04% 

0 

-53.91% 

2005 2006 2007 2008 


6/30/09 


$1,873.3 $244.3 $225.3 

1.89% 2.62% 1.63% 

$16.62 $16.22 $16.59 

$17.63 $16.22 $16.59 

0.96 0.96 0.96 

33.62 33.61 33.60 



Annually, in September and, if necessary, December. 



12/08 

9/08 

12/07 


$0.5274 $0.3412 $0.5985 

0.0680 0.0690 0.0674 

0.6062 0.3929 0.7041 

Short-Term 

0.2007 0.2007 0.2007 

Long-Term 

0.6919 0.6919 0.6919 

YTD 2009 14 


Stocks 97% 

Cash 3% 


Templeton Emerging Markets Small Cap Fund 



TM 67 


STYLE 


SIZE 

Large 

✕ 

Medium 

Small 

✕ Current 

Historical 


International 


The fund seeks long-term capital 

appreciation by investing at least 

80% of its net assets in securities 

of small-cap companies (market 

capitalization between $100 million 

and $1 billion) located in emerging 

market countries. 



Fund No. 426 526 

CUSIP 880 19R 732 880 19R 724 

Symbol TEMMX TCEMX 

Inception1 10/2/06 10/2/06 


CUSIP 88019R 716 880 19R 690 


Inception1 10/2/06 10/2/06 


August 1 




Dennis Lim 



Tom Wu 













5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — 29.19 -60.36 49.79 

CLASS C — — — — — — — — 28.42 -60.66 49.25 

ADVISOR — — — — — — — — 29.60 -60.30 50.21 





CLASS A -23.71 — — — -6.20 -28.09 — — — -8.21 

CLASS C -24.33 — — — -6.83 -25.01 — — — -6.83 

ADVISOR -23.52 — — — -5.92 -23.52 — — — -5.92 












Energy 5.57 

Banks 5.31 


Media 3.23 


Asia 48.48% 

Europe 25.77 





Pinar Sut Mamulleri Sanayii AS 3.04% 

JK Cements Ltd. 2.95 

CTC Media Inc. 2.84 

Chongqing Machinery and Electric 

Company Ltd. 2.70 

Wasion Group Holdings Ltd. 2.61 

American BankNote SA 2.58 

Sesa Goa Ltd. 2.29 

Selcuk Ecza Deposu 2.24 

Veropharm 2.21 

Dragon Oil PLC 2.12 



0 

29.19% 

-60.36% 

2005 2006 2007 2008 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 






12/08 

12/07 

5/07 


Short-Term 

Long-Term 

49.79% 

YTD 2009 14 

6/30/09 


$62.0 $15.9 $2.3 

2.37% 3.02% 2.02% 

2.15% 2.80% 1.80% 

$7.04 $6.97 $7.06 

$7.47 $6.97 $7.06 

— — — 

— — — 


$0.0615 $0.0382 $0.0738 

0.0784 0.0328 0.1037 

0.0367 0.0284 0.0447 

0.4773 0.4773 0.4773 

— — — 


Stocks 95% 

Cash 5% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton Foreign Fund 



TM 67 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 

✕ Current 

Historical 


International 


Equity securities of foreign issuers. 



Fund No. 104 204 

CUSIP 880 196 209 880 196 407 

Symbol TEMFX TEFTX 

Inception1 10/5/82 5/1/95 


CUSIP 880 196 803 880 196 506 

Symbol TEFRX TFFAX 

Inception1 10/5/82 10/5/82 


January 1 

PORTFOLIO MANAGER PROFILE84 Tucker Scott, CFA 



Cindy L. Sweeting, CFA 

















YTD 


CLASS C 

ADVISOR43 39.21 -3.67 -7.92 -8.64 30.51 18.14 10.63 19.93 17.24 -46.09 18.24 

38.10 -4.42 -8.58 -9.25 29.46 17.21 9.89 19.07 16.31 -46.46 17.66 

39.54 -3.50 -7.68 -8.42 30.87 18.37 10.94 20.14 17.56 -45.98 18.22 





CLASS A 

CLASS C 

ADVISOR43 -25.06 -5.48 2.68 3.46 11.06 -29.37 -7.33 1.47 2.85 10.81 

-25.70 -6.21 1.90 2.69 4.97 -26.19 -6.21 1.90 2.69 4.97 

-25.00 -5.29 2.89 3.69 11.21 -25.00 -5.29 2.89 3.69 11.21 





Telecommunication Services 14.28% 

Energy 


11.72 






Commercial & Professional Services 


5.34 




Europe 63.68% 

Asia 26.69 





TOP 10 HOLDINGS7 ING Groep NV 3.17% 

Vodafone Group PLC 


2.90 


Adecco SA 2.14 


BP PLC 2.08 

Samsung Electronics Company Ltd. 1.97 

Total SA 1.92 

Lite-On Technology 1.92 




FUND FACTS 




Beta 3 



10.63% 

19.93% 17.24% 18.24% 

0 

-46.09% 

2005 2006 2007 2008 






12/08 

12/07 

10/07 


Short-Term 

Long-Term 

YTD 2009 14 

6/30/09 


$3,660.5 $575.5 $818.8 

1.14% 1.88% 0.89% 

$5.25 $5.13 $5.19 

$5.57 $5.13 $5.19 

1.08 1.08 1.08 

27.19 27.15 27.23 


$0.3151 $0.2257 $0.3468 

0.0352 0.0035 0.0465 

0.2019 0.1319 0.2312 

— — — 

1.9998 1.9998 1.9998 


Stocks 98% 

Cash 2% 


Templeton Foreign Smaller Companies Fund 



TM 67 


STYLE 


SIZE 

Large 

✕ 

Medium 

Small 


International 


Equity securities of foreign smaller 

capitalization issuers located in or 

deriving a significant portion of their 

revenues from, or for which the 

principal securities trading market 

is in any foreign country. 



Fund No. 191 291 

CUSIP 353 61F 303 353 61F 709 

Symbol FINEX FCFSX 

Inception1 9/20/91 7/1/98 

ADVISOR 89 

Fund No. 691 

CUSIP 353 61F 501 

Symbol FTFAX 


✕ Current 

Historical 


March 1 

PORTFOLIO MANAGER PROFILE84 Bradley Radin, CFA 



Harlan Hodes, CPA 













5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 25.27 -3.25 -6.73 -3.57 46.66 19.81 11.22 23.86 8.10 -52.21 30.03 

24.24 -4.18 -7.44 -4.22 45.31 18.93 10.36 22.93 7.31 -52.56 29.54 

25.52 -3.04 -6.59 -3.32 47.16 20.19 11.49 24.17 8.37 -52.07 30.10 





CLASS A 

CLASS C 

ADVISOR43 -28.77 -8.09 1.10 4.27 6.87 -32.86 -9.89 -0.09 3.66 6.51 

-29.35 -8.78 0.34 3.47 3.42 -29.94 -8.78 0.34 3.47 3.42 

-28.66 -7.88 1.33 4.53 7.09 -28.66 -7.88 1.33 4.53 7.09 





Consumer Durables & Apparel 13.34% 


Banks 10.89 









Asia 48.95% 

Europe 28.41 




TOP 10 HOLDINGS7 Texwinca Holdings Ltd. 2.48% 

Barco NV 

Bank of Ayudhya Public 

2.32 

Company Ltd. 2.22 

Yule Catto & Company PLC 2.18 

Dah Sing Financial Holdings Ltd. 2.17 

Henderson Group PLC 2.17 

Fiberweb PLC 2.09 

Busan Bank 2.02 

Glow Energy Public Company Ltd. 1.98 

Canaccord Capital Inc. 1.95 



0 

11.22% 

23.86% 

8.10% 

-52.21% 

2005 2006 2007 2008 



FUND FACTS 




Beta 3 






12/08 

10/08 

12/07 


Short-Term 

Long-Term 

30.03% 

YTD 2009 14 

6/30/09 


$99.0 $11.2 $9.7 

1.53% 2.28% 1.28% 

$10.09 $9.78 $10.07 

$10.71 $9.78 $10.07 

1.08 1.08 1.08 

31.31 31.34 31.34 


$0.4470 $0.3384 $0.5082 

— — — 

0.2791 0.1595 0.3217 

— — — 

1.2861 1.2861 1.2861 


Stocks 94% 

Cash 6% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton Frontier Markets Fund 


International 


Seeks long-term capital appreciation 

by normally investing at least 80% 

of its net assets in securities of 

companies located in “frontier 

market countries”—those companies 

that are organized under the laws 

of, have a principal office in, or 

have their principal trading market 

in frontier market countries; or 

derive a substantial share of their 

total revenue or profit from either 

goods or services produced or sales 

made in, frontier market countries. 



Fund No. 096 296 

CUSIP 880 19R 674 880 19R 666 


Inception1 10/14/08 10/14/08 


CUSIP 880 19R 658 880 19R 641 


Inception1 10/14/08 10/14/08 


October 14 

PORTFOLIO MANAGER PROFILE 

Mark Mobius, Ph.D. 



Sven Richter 



Johan Meyer 













5 ,9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — — — 22.99 

CLASS C — — — — — — — — — — 22.51 

ADVISOR — — — — — — — — — — 22.94 




6/30/09 


CLASS A — — — — 20.90 — — — — 13.95 

CLASS C — — — — 20.30 — — — — 19.30 

ADVISOR — — — — 21.10 — — — — 21.10 





Banks 18.86% 




Transportation 


4.60 




Energy 2.90 



Mid-East/Africa 46.56% 

Asia 12.32 

Europe 11.00 


TOP 10 HOLDINGS7 MTN Group Ltd. 4.31% 

Arab Bank PLC 2.98 

East African Breweries 2.62 

Grindeks 

British American Tobacco Kenya 

2.36 

Limited Corp. 2.30 

PZ Cussons PLC 2.15 

Credicorp Ltd. 1.80 

Qatar National Bank 1.78 

Mauritius Commercial Bank 1.70 

Press Corp Ltd. 1.69 



0 

2005 2006 2007 2008 

9, 22 




22.99% 

YTD 2009 14 

FUND FACTS 


2, 9 

Expense Ratio 


with waiver 




Stocks 77% 

Cash 23% 


$7.7 $0.4 $1.6 

— — — 

— — — 

— — — 


Beta 3 




Annually. 


12/08 


Short-Term 

Long-Term 

2.40% 3.10% 2.10% 

2.15% 2.85% 1.85% 

$12.09 $12.03 $12.11 

$12.83 $12.03 $12.11 

— — — 

— — — 

CLASS A CLASS C ADVISOR

Franklin Balanced Fund 



– CLASS A 

TM 67 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 

✕ Current 

Historical 


Hybrid 


The fund will invest in a diversified 

portfolio of common stocks (mostly 

dividend paying), convertible 

securities, and investment grade 

fixed income securities. 



Fund No. 424 517 

CUSIP 353 612 682 353 612 674 

Symbol FBLAX FBMCX 

Inception1 7/3/06 7/3/06 


Fund No. 817 624 

CUSIP 353 612 666 353 612 658 


Inception1 7/3/06 7/3/06 


March 1 

PORTFOLIO MANAGER PROFILE84 Edward D. Perks, CFA 



Alan E. Muschott, CFA 



Shawn Lyons, CFA 














5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A — — — — — — — — 4.15 -32.82 14.69 

CLASS C — — — — — — — — 3.46 -33.29 14.31 

ADVISOR — — — — — — — — 4.56 -32.64 14.81 





CLASS A -18.53 — — — -4.18 -23.19 — — — -6.06 

CLASS C -19.16 — — — -4.83 -19.93 — — — -4.83 

ADVISOR -18.36 — — — -3.88 -18.36 — — — -3.88 











Energy 5.25 




TOP 5 STOCK HOLDINGS 

Microsoft Corp. 2.84% 


Halliburton Co. 1.56 



TOP 5 BOND HOLDINGS 

J.P. Morgan Chase & Co. 1.65% 

Altria Group Inc. 1.55 

Illinois Power Co. 1.52 

Target Corp. 1.43 

Weatherford International Ltd. 1.34 



0 

4.15% 

-32.82% 

2005 2006 2007 2008 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 




Monthly. 

9, 15 



6/09 

5/09 

4/09 


Short-Term 

Long-Term 

14.69% 

YTD 2009 14 

6/30/09 


$65.4 $12.8 $1.3 

1.38% 2.04% 1.08% 

1.03% 1.69% 0.73% 

$7.63 $7.58 $7.64 

$8.10 $7.58 $7.64 

— — — 

— — — 


4.44% 4.05% 4.93% 

$0.0300 $0.0256 $0.0314 

0.0300 0.0267 0.0313 

0.0300 0.0267 0.0313 

— — — 

— — — 


Stocks 57% 

Bonds 36% 

Cash 7% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Convertible Securities Fund 


Hybrid 


Domestic or foreign convertible 

securities and common stocks 

received upon conversion or 

exchange of such securities. 



Fund No. 137 237 

CUSIP 353 612 104 353 612 880 

Symbol FISCX FROTX 

Inception1 4/15/87 10/2/95 

ADVISOR 89 

Fund No. 637 

CUSIP 353 612 641 

Symbol — 



March 1 

PORTFOLIO MANAGER PROFILE84 Alan E. Muschott, CFA 






Matt Quinlan, CFA 















Health Care 24.08% 







Energy 4.98 



TOP 10 HOLDINGS7 Carnival Corp. 2.77% 

Mylan Inc. 2.58 

Medtronic Inc. 2.57 


Best Buy Company Inc. 2.49 

CapitalSource Inc. 2.47 

Intel Corp. 2.44 

Cephalon Inc. 2.42 

L-3 Communications Corp. 2.33 

Celanese Corp. 2.30 



0 

6.93% 

12.15% 

0.50% -35.38% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 


6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 21.15 15.36 0.81 -15.55 35.44 16.02 6.93 12.15 0.50 -35.38 19.84 

20.27 14.60 0.00 -16.17 34.51 15.10 6.16 11.30 -0.19 -35.88 19.45 

21.15 15.36 0.81 -15.55 35.44 16.02 6.93 12.15 0.50 -35.23 19.96 





CLASS A 

CLASS C 

ADVISOR43 -19.13 -5.44 0.25 4.97 8.13 -23.76 -7.28 -0.93 4.36 7.84 

-19.73 -6.14 -0.49 4.20 5.55 -20.48 -6.14 -0.49 4.20 5.55 

-18.91 -5.34 0.32 5.01 8.15 -18.91 -5.34 0.32 5.01 8.15 




$475.9 $168.3 $9.5 

0.91% 1.65% 0.66% 

$10.81 $10.71 $10.81 

$11.47 $10.71 $10.81 

1.14 1.14 1.14 

20.18 20.14 20.17 



Quarterly. 




7.49% 7.26% 8.21% 

6/09 

$0.1326 $0.1145 $0.1385 

3/09 

0.0967 0.0858 0.1005 

12/08 

Capital Gains (last 4, 30 

12 mos.) 

0.1963 0.1709 0.2049 

Short-Term 

— — — 

Long-Term 

— — — 

19.84% 

YTD 2009 14 


Convertible Bonds 69% 

Convertible Preferred 26% 

Cash 3% 

Stocks 2% 


Franklin Equity Income Fund 



– CLASS A 

TM 67 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 

✕ Current 

Historical 


Hybrid 


Common stocks of financially strong 


with high current dividend yields 

relative to the average dividend yield 

of the general U.S. stock market, as 

measured by the S&P 500 ® Index. 

The fund also invests in securities 

convertible to common stock. 



Fund No. 139 239 

CUSIP 353 612 401 353 612 807 

Symbol FISEX FRETX 

Inception1 3/15/88 10/2/95 


Fund No. 839 639 

CUSIP 353 612 740 353 612 633 

Symbol FREIX — 

Inception1 3/15/88 3/15/88 


March 1 

PORTFOLIO MANAGER PROFILE84 Alan E. Muschott, CFA 






Frank Felicelli, CFA 














5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A 

CLASS C 

ADVISOR43 0.80 18.60 -1.33 -15.11 24.89 10.47 3.21 16.36 -3.55 -35.36 3.18 

0.05 17.75 -2.09 -15.72 23.95 9.64 2.45 15.52 -4.29 -35.84 2.84 

0.80 18.60 -1.33 -15.11 24.89 10.47 3.21 16.36 -3.55 -35.25 3.38 





CLASS A 

CLASS C 

ADVISOR43 -24.49 -10.41 -3.73 -0.10 7.09 -28.84 -12.16 -4.86 -0.69 6.79 

-25.03 -11.05 -4.43 -0.84 3.35 -25.75 -11.05 -4.43 -0.84 3.35 

-24.23 -10.30 -3.66 -0.06 7.11 -24.23 -10.30 -3.66 -0.06 7.11 








Energy 10.96 







TOP 10 HOLDINGS7 Wells Fargo & Co. 3.31% 






Coca-Cola Co. 2.78 

Bank of America Corp. 2.64 

Microchip Technology Inc. 2.59 




16.36% 

3.21% 

0 

-3.55% 

-35.36% 

2005 2006 2007 2008 



FUND FACTS 





Beta 3 


6/30/09 


$40,539 $15,741 $43,166 


$469.5 $78.7 $1.3 

0.97% 1.72% 0.72% 

$12.46 $12.41 $12.47 

$13.22 $12.41 $12.47 

0.87 0.87 0.87 

19.09 19.10 19.07 



Monthly. 




3.18% 2.75% 3.58% 

6/09 

$0.0350 $0.0284 $0.0372 

5/09 

0.0350 0.0290 0.0370 

4/09 


12 mos.) 

0.0350 0.0290 0.0370 

Short-Term 

— — — 

Long-Term 

— — — 

3.18% 

YTD 2009 14 


Stocks 89% 

Bonds 6% 

Cash 5% 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Income Fund 



– CLASS A 

TM 67 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 

✕ Current 

Historical 


Hybrid 


Stocks and bonds, including foreign 

and higher-yielding, lower-rated 

securities, selected with particular 

consideration for their incomeproducing 

potential. 



Fund No. 109 209 

CUSIP 353 496 300 353 496 805 

Symbol FKINX FCISX 

Inception1 8/31/48 5/1/95 


CUSIP 353 496 722 353 496 847 

Symbol FISRX FRIAX 

Inception1 8/31/48 8/31/48 


February 1 

PORTFOLIO MANAGER PROFILE84 Edward D. Perks, CFA 



Charles B. Johnson 













ANNUAL TOTAL RETURN–WITHOUT SALES CHARGES5 YTD 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 200914 CLASS A 

CLASS C 

ADVISOR43 -0.74 20.59 0.65 -1.06 30.96 12.17 1.85 19.12 5.31 -30.51 12.91 

-0.81 19.89 0.14 -1.54 30.16 11.56 1.32 18.89 4.35 -30.77 12.55 

-0.58 20.29 0.81 -0.92 31.32 12.40 2.01 19.39 5.08 -30.27 13.08 




CLASS A 

CLASS C 

ADVISOR 43 


-17.12 -2.57 2.14 5.51 10.29 -20.79 -3.97 1.29 5.07 10.21 

-17.83 -3.07 1.52 4.95 6.41 -18.59 -3.07 1.52 4.95 6.41 

-17.07 -2.31 2.30 5.64 10.34 -17.07 -2.31 2.30 5.64 10.34 





Corporate Bonds 62.00% 



Corporate Loans 5.84 

Energy 3.62 






Bank of America Corp. 1.59% 


Canadian Oil Sands Trust 1.49 

Wells Fargo & Co. 1.32 


Duke Energy Corp. 1.18 



Progress Energy Inc. 0.86 

Dominion Resources Inc. 0.85 


Ford Motor Credit Co. 4.84% 

Energy Future Holdings Corp. 3.47 

Tenet Healthcare Corp. 3.32 

Dynegy Holdings Inc. 2.60 

HCA Inc. 2.08 



19.12% 

1.85% 

0 

5.31% 

-30.51% 

2005 2006 2007 2008 

12.91% 

YTD 2009 14 



FUND FACTS 





Beta 3 



6/30/09 



$24,447.3 $11,308.2 $3,398.3 


Monthly on the 3rd business day. 




7.98% 7.89% 8.51% 

6/09 

$0.0125 $0.0119 $0.0127 

5/09 

0.0125 0.0119 0.0127 

4/09 


12 mos.) 

0.0125 0.0119 0.0127 

Short-Term 

0.0012 0.0012 0.0012 

Long-Term 

— — — 


Bonds 68% 

Stocks 32% 

Cash 1% 

0.62% 1.12% 0.47% 

$1.80 $1.81 $1.79 

$1.88 $1.81 $1.79 

1.18 1.18 1.19 

17.15 17.35 17.43 


Templeton Income Fund 



– CLASS A 

TM 67 


STYLE 


SIZE 

✕ 

Large 

Medium 

Small 

✕ Current 

Historical 


Hybrid 


Stocks with attractive dividend 

yields and bonds, worldwide. The 

fund’s equity component generally 

is comprised of dividend-yielding 

stocks on Templeton’s approved list. 

The fund’s fixed income component 

primarily is comprised of both 

developed and developing country 

government and agency bonds and 

investment grade and less than 

investment grade corporate and 

emerging market debt securities. 



Fund No. 425 525 

CUSIP 880 19R 799 880 19R 781 

Symbol TINCX TCINX 

Inception1 7/1/05 7/1/05 


Fund No. 825 625 

CUSIP 880 19R 773 880 19R 765 

Symbol — TZINX 

Inception1 7/1/05 7/1/05 


August 1 

PORTFOLIO MANAGER PROFILE84 Lisa F. Myers, CFA 



Cindy L. Sweeting, CFA 



Michael Hasenstab, Ph.D. 



Christopher J. Molumphy, CFA 














5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A — — — — — — — 21.30 10.42 -24.71 9.10 

CLASS C — — — — — — — 20.91 10.02 -25.01 8.92 

ADVISOR — — — — — — — 21.96 10.64 -24.40 8.69 




CLASS A 

CLASS C 

ADVISOR 


-9.23 0.84 — — 3.16 -13.05 -0.63 — — 2.06 

-9.25 0.47 — — 2.81 -10.07 0.47 — — 2.81 

-9.32 0.94 — — 3.38 -9.32 0.94 — — 3.38 





Government Securities 22.22% 





Energy 6.95 






Vodafone Group PLC 1.46% 

Singapore Telecommunications Ltd. 1.31 


Vivendi 1.20 



Government of Mexico 3.63% 

Korea Treasury Bond, 0475–1112 2.57 

Nota do Tesouro Nacional 1.70 

Korea Treasury Bond, senior note 1.41 

Queensland Treasury Corp. 1.18 



21.30% 

0 

10.42% 

-24.71% 

2005 2006 2007 2008 

9.10% 

YTD 2009 14 


Bonds 46% 

Stocks 40% 

Cash 14% 

6/30/09 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 




Quarterly. 

9, 15 



6/09 

3/09 

12/08 


Short-Term 

Long-Term 


$485.8 $293.5 $23.3 

1.27% 1.67% 1.02% 

1.22% 1.62% 0.97% 

$2.24 $2.24 $2.24 

$2.34 $2.24 $2.24 

0.94 0.94 0.94 

13.80 13.76 13.77 


3.04% 2.80% 3.41% 

$0.0178 $0.0157 $0.0191 

0.0185 0.0172 0.0193 

0.0249 0.0219 0.0269 

— — — 

— — — 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Templeton Corefolio Allocation Fund 


Asset Allocation 


Franklin Templeton Corefolio 

Allocation Fund seeks capital 

appreciation through a diversified, 

multi-disciplined approach. It targets 

both growth- and value-style 

investments by allocating approximately 

50% of its assets to Franklin 

Growth Fund and approximately 

25% of its assets to Mutual Shares 

Fund and Templeton Growth 

Fund, respectively. 



Fund No. 470 570 

CUSIP 354 72P 786 354 72P 760 

Symbol FTCOX FTCLX 

Inception1 8/15/03 8/15/03 


Fund No. 870 670 

CUSIP 354 72P 752 354 72P 745 


Inception 1 8/15/03 8/15/03 


May 1 


T. Anthony Coffey, CFA 












PORTFOLIO HOLDINGS29 TOP 10 HOLDINGS 

6/30 

7 

Apple Inc. 2.36% 




Wyeth 1.24 



Pfizer Inc. 1.10 

General Dynamics Corp. 1.05 




15.25% 

6.63% 

5.20% 

-38.13% 

0 

2005 2006 2007 2008 


Franklin Growth Fund 50% 

Templeton 

Growth Fund 25% 

Mutual Shares Fund 25% 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — 11.67 6.63 15.25 5.20 -38.13 6.33 

CLASS C — — — — — 10.88 6.02 14.48 4.50 -38.58 6.02 

ADVISOR — — — — — 11.98 6.93 15.65 5.53 -37.92 6.44 





CLASS A -24.91 -8.35 -1.81 — 0.89 -29.22 -10.14 -2.97 — -0.12 

CLASS C -25.45 -8.96 -2.46 — 0.21 -26.19 -8.96 -2.46 — 0.21 

ADVISOR -24.72 -8.06 -1.50 — 1.19 -24.72 -8.06 -1.50 — 1.19 


9, 22 




FUND FACTS 


9, 76 

Expense Ratio 


with waiver 



Beta 3 




Semiannually. 


6/09 

12/08 

3/08 


Short-Term 

Long-Term 

6.33% 

YTD 2009 14 


$267.2 $94.6 $1.5 

1.34% 2.04% 1.04% 

1.12% 1.82% 0.82% 

$8.96 $8.87 $8.98 

$9.51 $8.87 $8.98 

0.98 0.98 0.98 

20.29 20.28 20.29 


$0.0354 $0.0354 $0.0354 

0.1162 0.0304 0.1529 

0.0155 0.0155 0.0155 

— — — 

— — — 


Franklin Templeton Founding Funds Allocation Fund 




Franklin Templeton Founding 

Funds Allocation Fund seeks capital 

appreciation through a diversified, 

value- oriented approach—investing 

in an equally weighted combination 

of Franklin Income Fund, Mutual 

Shares Fund and Templeton 

Growth Fund. The fund seeks 

income as a secondary goal. 



Fund No. 481 282 

CUSIP 354 72P 844 354 72P 828 

Symbol FFALX FFACX 

Inception1 8/15/03 8/15/03 


CUSIP 354 72P 810 354 72P 794 

Symbol FFARX FFAAX 

Inception1 8/15/03 8/15/03 


May 1 

















5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — 13.58 6.31 19.34 3.12 -37.66 7.59 

CLASS C — — — — — 12.91 5.63 18.50 2.47 -38.04 7.19 

ADVISOR — — — — — 14.04 6.63 19.73 3.48 -37.44 7.69 




CLASS A 

CLASS C 

ADVISOR 


-23.92 -7.93 -0.60 — 1.83 -28.30 -9.72 -1.76 — 0.80 

-24.43 -8.54 -1.25 — 1.16 -25.14 -8.54 -1.25 — 1.16 

-23.71 -7.65 -0.29 — 2.17 -23.71 -7.65 -0.29 — 2.17 










Wyeth 0.97 






19.34% 

0 

6.31% 

3.12% 

-37.66% 

2005 2006 2007 2008 

9, 22 




FUND FACTS 


9, 76 

Expense Ratio 


with waiver 



Beta 3 




Semiannually. 


6/09 

12/08 

3/08 


Short-Term 

Long-Term 

7.59% 

YTD 2009 14 


$4,672.3 $2,266.4 $32.4 


$0.2045 $0.1768 $0.2149 

0.3681 0.2808 0.4065 

0.0083 0.0083 0.0083 

— — — 

— — — 


Franklin 

Income Fund 33 1 ⁄3% 


Growth Fund 33 1 ⁄3% 

Mutual 

Shares Fund 33 1 ⁄3% 

6/30/09 

1.21% 1.91% 0.91% 

1.07% 1.77% 0.77% 

$8.22 $8.12 $8.26 

$8.72 $8.12 $8.26 

1.26 1.25 1.26 

19.22 19.21 19.22 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Templeton Perspectives Allocation Fund 




Franklin Templeton Perspectives 

Allocation Fund seeks capital appreciation 

by investing in fixed, equal 

allocations to three underlying 

Franklin Templeton equity funds— 

Franklin Flex Cap Growth Fund, 

Templeton Growth Fund and Mutual 

Shares Fund—each offering its own 

distinct investment perspective. 

Together, they form a portfolio diversified 

among growth and value-style 

equity securities from around the 

world with a broad range of market 

capitalizations. 



Fund No. 185 285 

CUSIP 354 72P 695 354 72P 687 

Symbol FPAAX FPCAX 

Inception1 8/2/04 8/2/04 


CUSIP 354 72P 679 354 72P 661 


Inception1 8/2/04 8/2/04 


May 1 






























0 

7.93% 

14.69% 

6.79% 

-39.29% 

6.15% 

2005 2006 2007 2008 YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — 7.93 14.69 6.79 -39.29 6.15 

CLASS C — — — — — — 7.22 13.92 6.11 -39.75 5.92 

ADVISOR — — — — — — 8.31 15.07 7.26 -39.10 6.27 





CLASS A -26.08 -8.77 — — -0.79 -30.31 -10.56 — — -1.97 

CLASS C -26.53 -9.37 — — -1.43 -27.26 -9.37 — — -1.43 

ADVISOR -25.88 -8.46 — — -0.46 -25.88 -8.46 — — -0.46 


9, 22 




FUND FACTS 


9, 76 

Expense Ratio 


with waiver 



Beta 3 




Semiannually. 


6/09 

12/08 

3/08 


Short-Term 

Long-Term 


Franklin Flex Cap 




Mutual Shares 

Fund 33 1 ⁄3% 


$139.9 $45.1 $3.0 

1.42% 2.12% 1.12% 

1.14% 1.84% 0.84% 

$8.14 $8.09 $8.17 

$8.64 $8.09 $8.17 

0.97 0.97 0.97 

20.19 20.17 20.20 


$0.0231 $0.0231 $0.0231 

0.1124 0.0314 0.1456 

0.0055 0.0055 0.0055 

— — — 

— — — 


Franklin Templeton Conservative Target Fund 


CLASS A 8 

★★★★ 




A combination of Franklin Templeton 

mutual funds. The fund will generally 

invest 40% in equity funds, 40% in 

fixed income funds and 20% in shortterm 

investments. 



Fund No. 484 584 

CUSIP 354 72P 109 354 72P 208 

Symbol FTCIX FTCCX 

Inception1 12/31/96 12/31/96 


CUSIP 354 72P 703 354 72P 851 

Symbol FTCRX — 

Inception1 12/31/96 12/31/96 


May 1 
















PORTFOLIO HOLDINGS29 6/30 

TOP 10 HOLDINGS7 Templeton Global Bond Fund 13.59% 

Franklin U.S. Government 

Securities Fund 13.37 

Franklin Total Return Fund 10.98 

Franklin Flex Cap Growth Fund 10.38 

Mutual Shares Fund 8.48 

Mutual European Fund 4.46 

Franklin Growth Opportunities Fund 4.22 

Templeton Foreign Fund 2.95 

Templeton China World Fund 2.50 

Franklin Gold and Precious 

Metals Fund 2.23 



0 

4.70% 

9.92% 

8.29% 

-15.41% 

2005 2006 2007 2008 

6.80% 

YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 20.28 3.05 -0.92 -3.79 17.35 7.98 4.70 9.92 8.29 -15.41 6.80 

19.40 2.26 -1.58 -4.55 16.45 7.20 3.83 9.16 7.48 -16.04 6.44 

20.28 3.05 -0.92 -3.79 17.35 7.98 4.62 10.28 8.48 -15.15 6.93 





CLASS A 

CLASS C 

ADVISOR43 -6.24 1.38 3.76 4.93 5.43 -11.66 -0.61 2.54 4.31 4.93 

-6.90 0.62 3.01 4.16 4.62 -7.81 0.62 3.01 4.16 4.62 

-6.02 1.63 3.94 5.02 5.50 -6.02 1.63 3.94 5.02 5.50 


9, 22 



$18,249 $17,588 $19,528 

43 


FUND FACTS 


9, 76 

Expense Ratio 


with waiver 




Domestic 

Equity Funds 29% 

Foreign Equity 

Funds 13% 

Fixed Income 

Funds 39% 

Cash Equivalents/ 

Short-Term 20% 


$333.6 $186.4 $5.8 

1.37% 2.12% 1.12% 

1.17% 1.92% 0.92% 

$11.49 $11.33 $11.48 

$12.19 $11.33 $11.48 

0.95 0.96 0.95 

9.16 9.18 9.15 


2.77% 2.28% 3.18% 

$0.0363 $0.0166 $0.0430 

0.0515 0.0337 0.0579 

0.1855 0.1663 0.1923 

— — — 

0.2407 0.2407 0.2407 


Beta 3 




Quarterly. 

9, 15 



6/09 

3/09 

12/08 


Short-Term 

Long-Term 



VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Templeton Moderate Target Fund 


CLASS A 8 

★★★★ 




A combination of Franklin 

Templeton mutual funds. The fund 

will generally invest 55% in equity 

funds, 35% in fixed income funds 

and 10% in short-term investments. 



Fund No. 485 585 

CUSIP 354 72P 307 354 72P 406 

Symbol FMTIX FTMTX 

Inception1 12/31/96 12/31/96 


CUSIP 354 72P 885 354 72P 869 

Symbol FTMRX FMTZX 

Inception1 12/31/96 12/31/96 


May 1 

















TOP 10 HOLDINGS7 Franklin Flex Cap Growth Fund 14.02% 

Templeton Global Bond Fund 11.86 













11.57% 

9.40% 

5.94% 

0 

-21.22% 

2005 2006 2007 2008 

8.22% 

YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 27.25 -1.09 -4.18 -7.53 22.38 9.64 5.94 11.57 9.40 -21.22 8.22 

26.30 -1.83 -4.94 -8.20 21.52 8.73 5.25 10.72 8.61 -21.87 7.91 

27.25 -1.09 -4.18 -7.53 22.38 9.64 6.01 11.87 9.66 -21.02 8.35 





CLASS A 

CLASS C 

ADVISOR43 -10.07 0.07 3.53 4.60 5.22 -15.24 -1.88 2.32 3.98 4.72 

-10.67 -0.67 2.76 3.83 4.38 -11.54 -0.67 2.76 3.83 4.38 

-9.85 0.30 3.73 4.70 5.30 -9.85 0.30 3.73 4.70 5.30 


9, 22 



FUND FACTS 


9, 76 

Expense Ratio 


with waiver 



Beta 3 




Quarterly. 

9, 15 



6/09 

3/09 

12/08 


Short-Term 

Long-Term 


Domestic 



Funds 18% 

Fixed Income 

Funds 34% 


Short-Term 10% 


$559.3 $202.5 $16.1 

1.43% 2.18% 1.18% 

1.23% 1.98% 0.98% 

$11.37 $11.16 $11.37 

$12.06 $11.16 $11.37 

0.86 0.86 0.86 

12.06 12.07 12.08 


2.58% 2.08% 2.98% 

$0.0292 $0.0100 $0.0359 

0.0473 0.0295 0.0535 

0.1808 0.1619 0.1872 

— — — 

0.3712 0.3712 0.3712 


Franklin Templeton Growth Target Fund 




A combination of Franklin 

Templeton mutual funds. The fund 

will generally invest 80% in equity 

funds, 15% in fixed income funds 

and 5% in short-term investments. 



Fund No. 486 586 

CUSIP 354 72P 505 354 72P 604 

Symbol FGTIX FTGTX 

Inception1 12/31/96 12/31/96 


CUSIP 354 72P 802 354 72P 877 

Symbol FGTRX FGTZX 

Inception1 12/31/96 12/31/96 


May 1 















TOP 10 HOLDINGS7 Franklin Flex Cap Growth Fund 19.70% 





Templeton Global Bond Fund 5.31 









0 

8.47% 

13.90% 

10.58% 

-30.75% 

2005 2006 2007 2008 

9.55% 

YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 41.17 -5.13 -11.33 -14.65 30.11 11.28 8.47 13.90 10.58 -30.75 9.55 

40.06 -5.83 -11.97 -15.18 28.98 10.46 7.63 13.08 9.72 -31.26 9.13 

41.17 -5.13 -11.33 -14.65 30.11 11.28 8.48 14.26 10.80 -30.56 9.64 





CLASS A 

CLASS C 

ADVISOR43 -17.43 -3.06 2.38 3.46 4.42 -22.20 -4.95 1.19 2.85 3.93 

-18.07 -3.80 1.62 2.69 3.66 -18.88 -3.80 1.62 2.69 3.66 

-17.26 -2.84 2.56 3.55 4.50 -17.26 -2.84 2.56 3.55 4.50 


9, 22 



FUND FACTS 


9, 76 

Expense Ratio 


with waiver 



Beta 3 




Quarterly. 

9, 15 



6/09 

3/09 

12/08 


Short-Term 

Long-Term 


Domestic 



Funds 25% 

Fixed Income 

Funds 15% 


Short-Term 5% 


$319.7 $120.7 $13.6 

1.58% 2.33% 1.33% 

1.31% 2.06% 1.06% 

$11.45 $11.22 $11.47 

$12.15 $11.22 $11.47 

1.08 1.08 1.08 

16.71 16.67 16.67 


1.91% 1.23% 2.31% 

— — — 

$0.0231 $0.0231 $0.0231 

0.2090 0.1149 0.2419 

— — — 

0.6580 0.6580 0.6580 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Templeton 2015 Retirement Target Fund 




A distinctly weighted combination 

of Franklin Templeton mutual funds 

which, in turn, invest in a variety of 

U.S. and foreign equity, fixed income 

and money market securities. The 

asset mix of underlying funds will 

become increasingly conservative as 

the stated target retirement year 

approaches. 



Fund No. 427 527 

CUSIP 354 72P 653 354 72P 646 

Symbol FTRAX — 

Inception 1 8/1/06 8/1/06 


Fund No. 827 627 

CUSIP 354 72P 638 354 72P 620 


Inception 1 8/1/06 8/1/06 


May 1 





FUND FACTS 


9, 76 

Expense Ratio 


with waiver 



Beta 3 



$12.1 $4.8 $0.2 

PORTFOLIO ALLOCATION 29, 60 6/30 

Domestic Equity Funds 45% 

Foreign Equity Funds 21% 

Fixed Income Funds 26% 

Cash Equivalents/Short-Term 7% 

See page 128 for more commission information and page 125 for footnotes. 













approaches. 



Fund No. 445 545 

CUSIP 354 72P 612 354 72P 596 

Symbol FTRTX — 

Inception 1 8/1/06 8/1/06 


Fund No. 845 645 

CUSIP 354 72P 588 354 72P 570 


Inception 1 8/1/06 8/1/06 


May 1 









CLASS A 

CLASS C 

ADVISOR 





Cash Equivalents/Short-Term 6% 


6/30/09 


-12.51 — — — -0.88 -17.51 — — — -2.88 

-13.13 — — — -1.57 -13.98 — — — -1.57 

-12.23 — — — -0.56 -12.23 — — — -0.56 


2.14% 2.84% 1.84% 

1.21% 1.91% 0.91% 

$8.80 $8.74 $8.82 

$9.34 $8.74 $8.82 

— — — 

— — — 








6/30/09 





CLASS R ADVISOR89 PERFORMANCE INFORMATION 






5, 9 6, 9 



CLASS A -18.10 — — — -3.41 -22.79 — — — -5.35 

CLASS C -18.69 — — — -4.05 -19.48 — — — -4.05 

ADVISOR -17.93 — — — -3.16 -17.93 — — — -3.16 


FUND FACTS 



9, 76 

Expense Ratio 


with waiver 



Beta3 Standard Deviation65 $14.0 $3.9 $0.4 

2.32% 3.02% 2.02% 

1.26% 1.96% 0.96% 

$8.09 $8.01 $8.10 

$8.58 $8.01 $8.10 

— — — 

— — — 














approaches. 



Fund No. 446 546 

CUSIP 354 72P 562 354 72P 554 


Inception 1 8/1/06 8/1/06 


Fund No. 846 646 

CUSIP 354 72P 547 354 72P 539 


Inception 1 8/1/06 8/1/06 


May 1 





FUND FACTS 


9, 76 

Expense Ratio 


with waiver 



Beta 3 



$7.6 $2.5 $0.4 














approaches. 



Fund No. 451 551 

CUSIP 354 72P 521 354 72P 513 


Inception 1 8/1/06 8/1/06 


Fund No. 851 651 

CUSIP 354 72P 497 354 72P 489 


Inception 1 8/1/06 8/1/06 


May 1 





2.99% 3.69% 2.69% 

1.30% 2.00% 1.00% 

$7.77 $7.67 $7.80 

$8.24 $7.67 $7.80 

— — — 

— — — 

6/30/09 






CLASS A -21.35 — — — -4.68 -25.88 — — — -6.60 

CLASS C -21.91 — — — -5.37 -22.68 — — — -5.37 

ADVISOR -21.12 — — — -4.39 -21.12 — — — -4.39 













6/30/09 





CLASS R ADVISOR89 PERFORMANCE INFORMATION 






5, 9 6, 9 



CLASS A -22.95 — — — -5.26 -27.36 — — — -7.17 

CLASS C -23.56 — — — -5.92 -24.30 — — — -5.92 

ADVISOR -22.73 — — — -4.95 -22.73 — — — -4.95 


FUND FACTS 



9, 76 

Expense Ratio 


with waiver 



Beta3 Standard Deviation65 $4.8 $1.4 $0.1 

3.99% 4.69% 3.69% 

1.32% 2.02% 1.02% 

$7.50 $7.39 $7.53 

$7.96 $7.39 $7.53 

— — — 

— — — 




Cash Equivalents/Short Term -1% 





VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Adjustable U.S. Government Securities Fund 


CLASS A 8 

★★★★ 


DURATION 

Short Int Long 

✕ 

QUALITY 

High 

Medium 

Low 


Fixed Income 

37, 75 

PRIMARY INVESTMENT 

Adjustable-rate, mortgage-backed 

securities (ARMS), or other securities 

collateralized by, or representing 

an interest in, mortgages, issued or 

guaranteed by the U.S. government, 

its agencies or instrumentalities. 

Some of the fund’s investments may 

include securities issued by U.S. 

government-sponsored entities, such 

as Fannie Mae and Freddie Mac. 



Fund No. 138 238 

CUSIP 353 612 302 353 612 732 

Symbol FISAX FCSCX 

Inception1 10/20/87 7/1/03 

ADVISOR 89 

Fund No. 638 

CUSIP 353 612 625 

Symbol — 


✕ Current 

Historical 

TM 67 


March 1 

PORTFOLIO MANAGER PROFILE84 Paul Varunok 










ADVISOR 89 







Average Duration32 1.20 years 

Average Credit Quality AAA 

CREDIT QUALITY 

AAA 100.0% 

INDEX BREAKDOWN 

LIBOR 60.40% 

Constant Maturity Treasury Index 20.71 

11th District Cost of Funds Index 3.88 

6-Month Treasury Bill Index 0.17 

National Median Cost of Funds Index 0.14 

TOP HOLDINGS 

FNMA 67.48% 

FHLMC 16.13 

GNMA 1.68 

Other 14.71 



5.03% 

4.15% 

3.58% 

0 

2.06% 

2005 2006 2007 2008 

2.91% 

YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A 

CLASS C 

ADVISOR43 4.38 6.68 6.43 3.41 1.23 1.79 2.06 4.15 5.03 3.58 2.91 

— — — — — 1.38 1.68 3.75 4.48 3.29 2.60 

4.38 6.68 6.43 3.41 1.23 1.79 2.06 4.15 5.03 3.86 3.04 





CLASS A 

CLASS C 

ADVISOR43 4.46 4.75 3.80 3.93 4.88 2.16 3.98 3.32 3.69 4.77 

3.93 4.34 3.37 — 2.84 2.93 4.34 3.37 — 2.84 

4.72 4.89 3.88 3.97 4.90 4.72 4.89 3.88 3.97 4.90 





FUND FACTS 




Beta 3 



Bonds 85% 

Cash 15% 


$1,057.2 $357.6 $41.4 

0.94% 1.34% 0.69% 

$8.98 $8.97 $8.99 

$9.19 $8.97 $8.99 

0.06 0.05 0.05 

0.65 0.63 0.65 



Accrued daily and paid monthly on the last business day. 




2.77% 2.42% 3.08% 

6/09 

$0.0224 $0.0191 $0.0244 

5/09 

0.0197 0.0169 0.0215 

4/09 


0.0224 0.0195 0.0243 

Short-Term 

— — — 

Long-Term 

— — — 


Franklin Floating Rate Daily Access Fund 


CLASS A 8 

★★★★ 


DURATION 


✕ 

QUALITY 

High 

Medium 

Low 


Fixed Income 


Invests in floating interest rate senior 

secured corporate loans (floatingrate 

loans) and debt securities that 

usually pay interest at favorable 

spreads to such widely recognized 

lending interest rate benchmarks as 

the London Interbank Offered Rate 

(LIBOR) or a designated bank’s 

prime rate. Floating-rate loans and 

debt securities in which the fund 

invests tend to be rated below 

investment-grade. 



Fund No. 489 589 

CUSIP 353 612 823 353 612 799 

Symbol FAFRX FCFRX 

Inception1 5/1/01 5/1/01 

ADVISOR 89 

Fund No. 689 

CUSIP 353 612 781 

Symbol FDAAX 



March 1 

PORTFOLIO MANAGER PROFILE84 Richard S. Hsu, CFA 


Manager or analyst since 2001 

Madeline Lam 


Manager or analyst since 2001 






ADVISOR 89 




✕ Current 

Historical 

TM 67 





TOP 10 INDUSTRIES 

Health Care Facilities 6.35% 

Specialty Chemicals 4.60 

Cable & Satellite 4.57 

Broadcasting 4.22 

Data Processing & Outsourced 

Services 3.42 

Casinos & Gaming 3.09 

Health Care Services 3.05 

Publishing 3.01 

Integrated Telecommunication 

Services 2.92 

Packaged Foods & Meats 2.70 


VML US Finance LLC (Venetian 

Macau US) 1.62% 

Community Health Systems Inc. 1.48 

Davita Inc. 1.39 

R.H. Donnelley Inc./Dex Media 1.39 

Dean Foods Co. 1.36 

NRG Energy Inc. 1.34 

HCA Inc. 1.29 

Aramark Corp. 1.29 

Discovery Communications Inc. 1.28 

Univision Communications Inc. 1.27 

The fund offers investors the opportunity to buy 

and sell shares daily. In order to be able to offer 

daily liquidity, the fund is managed to hold up to 

20% of the fund’s assets in cash, depending on 

the market. 

ANNUAL TOTAL RETURN 5 


0 

4.20% 

6.02% 

1.78% 

-22.83% 

2005 2006 2007 2008 

19.91% 

YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — 1.98 6.57 3.67 4.20 6.02 1.78 -22.83 19.91 

CLASS C — — — 1.69 6.11 3.25 3.79 5.71 1.27 -23.13 19.68 

ADVISOR — — — 2.22 6.95 3.94 4.46 6.28 1.94 -22.64 20.20 





CLASS A -8.02 -0.92 1.13 — 2.48 -10.12 -1.67 0.68 — 2.19 

CLASS C -8.38 -1.35 0.74 — 2.08 -9.26 -1.35 0.74 — 2.08 

ADVISOR -7.68 -0.67 1.39 — 2.75 -7.68 -0.67 1.39 — 2.75 





FUND FACTS 




Beta 3 



Senior Loans 79% 

Cash 21% 


$901.2 $196.8 $150.6 

1.01% 1.40% 0.76% 

$8.30 $8.30 $8.31 

$8.49 $8.30 $8.31 

0.56 0.56 0.56 

11.01 10.99 11.01 





Distribution Rate15 Dividend History 30 

6/09 

5/09 

4/09 


2.72% 2.39% 3.03% 

$0.0202 $0.0174 $0.0220 

0.0223 0.0199 0.0239 

0.0206 0.0180 0.0222 

Short-Term 

— — — 

Long-Term 

— — — 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin High Income Fund 


8, 67 


TM 67 


DURATION 


QUALITY 

High 

✕ 

Medium 

Low 

✕ Current 

Historical 


Fixed Income 


Domestic and foreign higheryielding, 

lower-rated corporate 

bonds, and dividend-paying 

common or preferred stocks. 



Fund No. 105 205 

CUSIP 353 538 101 353 538 200 

Symbol FHAIX FCHIX 

Inception1 12/31/69 5/16/95 


CUSIP 353 538 507 353 538 309 

Symbol FHIRX FVHIX 

Inception1 12/31/69 12/31/69 


October 1 

PORTFOLIO MANAGER PROFILE84 Christopher J. Molumphy, CFA 



Eric G. Takaha, CFA 














Average Maturity 5.68 years 

Average Duration 32 4.02 years 

Average Credit Quality B+ 


AAA 4.39% 

AA 0.01 

A 2.73 

BBB 7.00 

BB 26.83 

B 34.07 

CCC 19.77 

CC 2.01 

C 0.30 

D 2.18 

Not Rated 0.71 


Ford Motor Credit Company LLC 2.14% 

HCA Inc. 2.08 

Charter Communications Holdings 1.68 

Intelsat Bermuda 1.59 

Chesapeake Energy Corp. 1.52 

GMAC LLC 1.51 

Qwest Communications International 1.43 

NRG Energy LLC 1.33 

Texas Competitive Electric Holdings 1.26 

Host Hotels & Resorts LP 1.22 



0 

3.91% 

9.23% 

3.18% 

-22.54% 

2005 2006 2007 2008 

22.86% 

YTD 2009 14 

6/30/09 



YTD 


CLASS C 

ADVISOR43 0.48 -7.37 2.92 -3.43 35.29 11.59 3.91 9.23 3.18 -22.54 22.86 

-0.03 -8.23 2.88 -4.45 34.56 11.50 3.36 8.64 2.64 -22.83 22.41 

0.61 -7.24 3.04 -3.32 35.47 11.74 4.06 9.40 3.31 -22.43 22.94 





CLASS A 

CLASS C 

ADVISOR43 -3.62 1.80 4.21 4.37 7.55 -7.90 0.36 3.31 3.91 7.42 

-4.10 1.28 3.66 3.82 5.10 -4.97 1.28 3.66 3.82 5.10 

-3.51 1.94 4.36 4.51 7.60 -3.51 1.94 4.36 4.51 7.60 




FUND FACTS 




Beta 3 



Bonds 93% 

Cash 6% 

Stocks 1% 


$1,886.0 $326.4 $174.9 

0.76% 1.27% 0.62% 

$1.70 $1.71 $1.70 

$1.78 $1.71 $1.70 

0.89 0.90 0.89 

14.92 15.08 15.07 



Monthly on or near the 3rd business day. 




7.75% 7.65% 8.26% 

6/09 

$0.0115 $0.0109 $0.0117 

5/09 

0.0115 0.0109 0.0117 

4/09 


0.0115 0.0109 0.0117 

Short-Term 

— — — 

Long-Term 

— — — 


78 6/30/09 

Franklin Limited Maturity U.S. Government Securities Fund 


8, 67 


TM 67 


DURATION 


✕ 

QUALITY 

High 

Medium 

Low 

✕ Current 

Historical 


Fixed Income 

37, 75 


U.S. government securities including 

U.S. Treasury securities and other 

securities issued or guaranteed by 

the U.S. government, its agencies or 

instrumentalities. Some of the fund’s 

investments may include secu rities 

issued by U.S. government-sponsored 

entities, such as Fannie Mae and 

Freddie Mac. 



CUSIP 353 612 203 353 612 864 

Symbol FRGVX FSUAX 

Inception1 4/15/87 4/15/87 


March 1 

PORTFOLIO MANAGER PROFILE84 Kent C. Burns, CFA 



Paul Varunok 










5, 13, 33 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


ADVISOR43 1.51 8.39 6.64 7.36 1.73 1.21 0.72 3.57 6.65 7.18 1.41 

1.63 8.40 6.84 7.46 1.83 1.31 0.82 3.68 6.77 7.30 1.47 





CLASS A 

ADVISOR43 6.96 6.14 4.19 4.60 5.71 4.58 5.36 3.73 4.36 5.61 

7.07 6.25 4.30 4.70 5.77 7.07 6.25 4.30 4.70 5.77 




Average Coupon 4.57% 

Average Life 3.05 years 



MATURITY BREAKDOWN 

0–1 year 3.12% 

1–2 years 12.27 

2–3 years 22.63 

3–5 years 24.95 

5–7 years 5.40 

7–10 years 2.83 

10–15 years 11.03 

15–20 years 1.28 

20–30 years 16.49 


U.S. Agency 63.63% 

Mortgage-Backed Securities 21.18 

Global Government 1.76 

Other 10.31 



0 

0.72% 

3.57% 

6.65% 

7.18% 

2005 2006 2007 2008 

1.41% 

YTD 2009 14 

22, 33 



FUND FACTS 




Beta 3 



Bonds 97% 

Cash 3% 



$355.6 $44.2 

0.88% 0.78% 

$10.41 $10.40 

$10.65 $10.40 

1.21 1.21 

2.28 2.28 







3.14% 3.32% 

6/09 

$0.0279 $0.0287 

5/09 

0.0279 0.0288 

4/09 


12 mos.) 

0.0279 0.0288 

Short-Term 

— — 

Long-Term 

— — 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Low Duration Total Return Fund 

TM 67 


DURATION 


✕ 

QUALITY 

High 

Medium 

✕ Current 

Low Historical 


Fixed Income 

37, 75 


The fund seeks to provide a high 

level of current income consistent 

with prudent investing, while seeking 

preservation of capital. The fund 

invests primarily in investment-grade 

debt securities, targeting an estimated 

average portfolio duration of three 

years or less. Managers strategically 

allocate investments across different 

debt sectors, including government 

and corporate debt securities and 

mortgage and asset-backed securities. 

Some of the fund’s investments may 

include securities issued by U.S. 

government-sponsored entities, such 

as Fannie Mae and Freddie Mac. 



CUSIP 353 612 690 353 612 617 

Symbol FLDAX — 

Inception1 11/17/04 11/17/04 


March 1 

PORTFOLIO MANAGER PROFILE84 Roger Bayston, CFA 



Kent C. Burns, CFA 

















Average Credit Quality AA- 


0–1 year 13.28% 

1–2 years 17.51 

2–3 years 21.23 

3–5 years 22.17 

5–7 years 2.82 

7–10 years 0.04 

10–15 years 4.89 

15–20 years 0.07 

20–30 years 17.99 


U.S. Agency 32.80% 

Corporate Bonds 31.01 

Mortgage-Backed Securities 9.14 

Asset-Backed Securities 4.89 

Global Government 

Commercial Mortgage-Backed 

3.00 

Securities 0.90 

Other 12.62 

9, 22 



FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 


6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


ADVISOR43 — — — — — — 1.26 4.26 5.86 2.32 3.97 

— — — — — — 1.26 4.26 5.86 2.45 4.08 





CLASS A 

ADVISOR43 4.80 5.12 — — 3.82 2.42 4.34 — — 3.31 

5.02 5.21 — — 3.87 5.02 5.21 — — 3.87 




5.86% 

0 

1.26% 

4.26% 

2.32% 

2005 2006 2007 2008 



$107.8 $0.3 

1.55% 1.30% 

0.94% 0.69% 

$9.97 $9.97 

$10.20 $9.97 

0.70 0.70 

2.10 2.08 





9, 15 



6/09 

5/09 

4/09 


2.82% 3.11% 

$0.0240 $0.0258 

0.0225 0.0245 

0.0164 0.0178 

Short-Term 

— — 

Long-Term 

— — 

3.97% 

YTD 2009 14 


Bonds 94% 

Cash 6% 


Franklin Real Return Fund 


RATINGTM – CLASS A X 

TM 67 


DURATION 


✕ 

QUALITY 

High 

Medium 

Low 


Fixed Income 


The fund seeks to achieve total return 

that exceeds the rate of inflation over 

an economic cycle. The fund seeks to 

allocate assets among investments to 

achieve the highest level of real return 

(total return less inflation) consistent 

with an acceptable level of risk. It is 

expected that the fund will generally 

invest a substantial portion of its 

assets in inflation-protected securities. 

Managers also have the flexibility to 

invest in other sectors of the market 

to increase real return potential and 

offer greater diversification. 



Fund No. 423 213 

CUSIP 353 612 724 353 612 591 

Symbol FRRAX — 

Inception1 11/17/04 11/17/04 

ADVISOR 89 

Fund No. 623 

CUSIP 353 612 716 

Symbol FARRX 


✕ Current 

Historical 


March 1 

PORTFOLIO MANAGER PROFILE84 T. Anthony Coffey, CFA 





















0–1 year 16.14% 

1–3 years 24.65 

3–5 years 14.47 

5–7 years 13.30 

7–10 years 1.24 

10–30 years 1.30 


Treasury Inflation-Protected 

Securities 65.91% 

Foreign Debt Securities 15.35 

Natural Resources 5.82 

High Yield Bonds 4.37 

REITs 0.58 



0 

3.81% 

5.20% 

10.21% 

-4.49% 

2005 2006 2007 2008 

5.54% 

YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — 3.81 5.20 10.21 -4.49 5.54 

CLASS C — — — — — — 2.93 4.38 9.24 -5.33 5.34 

ADVISOR — — — — — — 4.12 5.51 10.40 -4.30 5.74 





CLASS A -4.22 4.40 — — 4.51 -8.32 2.89 — — 3.54 

CLASS C -4.86 3.60 — — 3.67 -5.79 3.60 — — 3.67 

ADVISOR -3.95 4.66 — — 4.77 -3.95 4.66 — — 4.77 


9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 




Monthly. 

, 9, 15 

Distribution Rate* 


6/09 

5/09 

4/09 


Short-Term 

Long-Term 


Bonds 86% 

Cash 8% 

Stock 6% 


$321.6 $11.6 $17.7 

1.08% 1.48% 0.83% 

0.90% 1.30% 0.65% 

$10.29 $10.26 $10.32 

$10.75 $10.26 $10.32 

0.63 — 0.63 

6.31 — 6.28 


— — — 

— — — 

— — — 

— — — 

— — — 

— — — 

*Please note, the fund’s distributions should be expected to vary 

significantly from month to month. Because the fund has a significant 

investment in Treasury inflation protected securities (TIPS), it is highly 

influenced by the TIPS market and the monthly inflation adjustments 

on these securities. 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Strategic Income Fund 


8, 67 


TM 67 


DURATION 


QUALITY 

High 

✕ 

Medium 

Low 

✕ Current 

Historical 


Fixed Income 


Fixed-income securities issued 

worldwide. The fund seeks to allocate 

its investments among several 

fixed income sectors, including 

foreign government and corporate 

securities, higher-yielding, lowerrated 

corporate bonds, convertible 

bonds, mortgage-backed securities, 

and U.S. government bonds. 



Fund No. 194 294 

CUSIP 354 713 505 354 713 836 

Symbol FRSTX FSGCX 

Inception1 5/24/94 5/1/98 


CUSIP 354 713 554 354 713 737 

Symbol FKSRX FKSAX 

Inception1 5/24/94 5/24/94 


September 1 

PORTFOLIO MANAGER PROFILE84 Christopher J. Molumphy, CFA 



Eric G. Takaha, CFA 















Average Credit Quality BBB+ 


High-Yield Corporate Bonds 

& Preferred 22.83% 

Investment Grade Corporate Bonds 18.20 

Mortgages/Other Asset-Backed 

Bonds 16.83 

Floating Rate Bank Loans 9.47 

U.S. Government Bonds 8.85 

Other International Bonds 

(Non-U.S. Dollar) 90 8.63 

Emerging Market Bonds 6.36 

Municipal Bonds 2.68 

International Developed Market 

Bonds (Non-U.S. Dollar) 2.27 

Convertible Securities 0.30 


Russian Federation 1.70% 

U.S. Treasury Bond 1.07 

Mexican Fixed Rate Bonds 1.05 

Republic of Argentina 1.03 

California State Government 

Obligation 0.92 


Swedish Government 0.78 

FNMA, 5.50% 0.72 

U.S. Treasury Note 0.72 

FNMA, 5.00% 0.71 



0 

1.50% 

8.20% 

5.87% 

-10.94% 

2005 2006 2007 2008 

12.56% 

YTD 2009 14 

6/30/09 


5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


CLASS C 

ADVISOR43 2.33 2.60 5.40 4.70 22.08 9.86 1.50 8.20 5.87 -10.94 12.56 

1.91 2.18 4.99 4.30 21.59 9.43 1.10 7.78 5.35 -11.21 12.34 

2.41 2.96 5.67 4.85 22.38 10.23 1.75 8.36 6.12 -10.62 12.68 





CLASS A 

CLASS C 

ADVISOR43 0.07 4.07 5.04 6.00 7.38 -4.17 2.56 4.14 5.55 7.07 

-0.33 3.66 4.63 5.59 5.11 -1.25 3.66 4.63 5.59 5.11 

0.32 4.32 5.30 6.27 7.56 0.32 4.32 5.30 6.27 7.56 




FUND FACTS 




Beta 3 



Bonds 96% 

Cash 4% 


$2,230.2 $848.1 $190.7 

0.91% 1.31% 0.66% 

$9.15 $9.15 $9.16 

$9.56 $9.15 $9.16 

1.09 1.09 1.09 

8.47 8.49 8.51 







4.77% 4.62% 5.21% 

6/09 

$0.0380 $0.0352 $0.0398 

5/09 

0.0380 0.0352 0.0398 

4/09 


0.0380 0.0352 0.0398 

Short-Term 

— — — 

Long-Term 

— — — 


Franklin Strategic Mortgage Portfolio 


8, 67 


TM 79 


DURATION 


✕ 

QUALITY 

High 

Medium 

Low 


Fixed Income 

37, 75 


Mortgage securities which are issued 

or guaranteed by the U.S. government, 

its agencies or instrumentalities. 

The fund may also invest in adjustablerate 

securities that are guaranteed 

by the U.S. government or issued by 

private organizations. Some of the 

fund’s investments may include securities 

issued by U.S. governmentsponsored 

entities, such as Fannie 

Mae and Freddie Mac. 


CLASS A 

Fund No. 157 

CUSIP 354 71H 108 

Symbol FSMIX 


✕ Current 

Historical 


February 1 




Paul Varunok 



David Yuen, CFA 




CLASS A 










Average Duration 3.08 years 



AAA 94.64% 

AA 2.38 

A 1.02 

BBB 0.22 

BB 0.26 

B 1.48 

PORTFOLIO BREAKDOWN 57 

Mortgage-Backed Securities 81.11% 




Global Government 0.15 

Other 20.94 



0 

2.27% 

4.60% 

4.28% 

-6.37% 

2005 2006 2007 2008 

4.75% 

YTD 2009 14 



FUND FACTS 




Beta 3 


6/30/09 



YTD 

200914 CLASS A 1.49 11.93 8.37 8.85 2.88 4.53 2.27 4.60 4.28 -6.37 4.75 


WITHOUT SALES CHARGES5 WITH SALES CHARGES6 1 YR 3 YR 5 YR 10 YR INCEPTION 1 YR 3 YR 5 YR 10 YR INCEPTION 

CLASS A -0.89 2.39 2.53 4.64 5.42 -5.06 0.91 1.64 4.19 5.15 

The negative cash position reflects the temporary 

imbalance between cash and securities caused by the 

time needed to settle securities transactions. 


Bonds 125% 

Cash -25% 

CLASS A 

$22,785 

CLASS A 

$102.2 

0.59% 

$8.49 

$8.87 

0.07 

4.03 




CLASS A 

Distribution Rate15 5.92% 

4, 30 


6/09 

$0.0459 

5/09 

0.0399 

4/09 

0.0450 


12 mos.) 

Short-Term 

— 

Long-Term 

— 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Total Return Fund 


RATINGTM – CLASS A X 

TM 67 


DURATION 


✕ 

QUALITY 

High 

Medium 

Low 

✕ Current 

Historical 


Fixed Income 

37, 75 


The fund invests in investment-grade 

bonds, including government bonds, 

mortgage- and asset-backed securit ies, 

as well as corporate bonds issued by 

organizations in a wide range of industries, 

and financial futures contracts, 

or options on such contracts. Some 

of the fund’s investments may include 

securities issued by U.S. governmentsponsored 

entities, such as Fannie 

Mae and Freddie Mac. 



Fund No. 460 560 

CUSIP 353 612 856 353 612 757 

Symbol FKBAX FCTLX 

Inception1 8/3/98 3/1/02 


CUSIP 353 612 773 353 612 849 

Symbol FTRRX FBDAX 

Inception1 8/3/98 8/3/98 


March 1 


Roger Bayston, CFA 









David Yuen, CFA 



Michael J. Materasso 

















Average Credit Quality A+ 


AAA 56.58% 

AA 3.87 

A 12.01 

BBB 15.70 

BB 6.64 

B 2.76 

CCC 1.45 

CC 0.65 

D 0.16 

Not Rated 0.43 

N/A -0.25 

PORTFOLIO BREAKDOWN85 Mortgage-Backed Securities 39.90% 

Investment Grade Corporates 22.51 

High Yield Corporates 8.13 

International Bonds 


7.84 



U.S. Agency Debentures 2.91 

U.S. Treasuries 2.66 

Floating-Rate Loans 1.91 

Other 3.59 



0 

1.80% 

4.86% 

4.86% 

-5.48% 

2005 2006 2007 2008 

7.23% 

YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A -0.91 10.64 6.75 8.19 7.90 5.27 1.80 4.86 4.86 -5.48 7.23 

CLASS C — — — — 7.47 4.85 1.39 4.55 4.43 -5.85 7.03 

ADVISOR -0.74 10.80 7.10 8.47 8.16 5.53 2.06 5.12 5.12 -5.23 7.48 





CLASS A 2.06 3.86 3.62 5.25 5.03 -2.31 2.36 2.73 4.80 4.62 

CLASS C 1.66 3.45 3.23 — 4.14 0.71 3.45 3.23 — 4.14 

ADVISOR 2.31 4.12 3.90 5.52 5.31 2.31 4.12 3.90 5.52 5.31 


9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 


The negative cash position reflects the temporary 

imbalance between cash and securities caused by the 

time needed to settle securities transactions. 


Bonds 102% 

Cash -2% 


$1,023.0 $179.6 $525.7 

1.07% 1.47% 0.82% 

0.88% 1.28% 0.63% 

$9.12 $9.12 $9.14 

$9.52 $9.12 $9.14 

1.03 1.05 1.04 

5.56 5.63 5.58 





9, 15 



6/09 

5/09 

4/09 


4.66% 4.43% 5.12% 

$0.0369 $0.0337 $0.0390 

0.0337 0.0308 0.0355 

0.0327 0.0301 0.0344 

Short-Term 

— — — 

Long-Term 

— — — 


Franklin U.S. Government Securities Fund 


8, 67 


TM 67 


DURATION 


✕ 

QUALITY 

High 

Medium 

Low 

✕ Current 

Historical 


Fixed Income 

37, 75 


Ginnie Mae securities, which carry 

a guarantee backed by the full faith 

and credit of the U.S. government 

as to timely payment of interest 

and principal. 



Fund No. 110 210 

CUSIP 353 496 607 353 496 862 

Symbol FKUSX FRUGX 

Inception1 5/31/70 5/1/95 


CUSIP 353 496 714 353 496 821 

Symbol FUSRX FUSAX 

Inception1 5/31/70 5/31/70 


February 1 




Jack Lemein 



Paul Varunok 













Total Number of Positions 15,075 






AAA 100.00% 

COUPON RATE BREAKDOWN 

5.00 11.15% 

5.50 16.84 

6.00 32.90 

6.50 26.28 

7.00 4.97 

7.50 2.63 

8.00 0.80 

8.50 0.46 

9.00 0.11 

9.50 0.12 

10.00 0.07 

10.50 0.10 

11.00 0.09 

11.50 0.05 

12.00 0.02 

12.50 0.07 

13.00 0.05 

13.50 0.05 



6.88% 

6.36% 

0 

2.77% 

3.69% 

2005 2006 2007 2008 



FUND FACTS 




Beta 3 



Bonds 97% 

Cash 3% 

6/30/09 



YTD 


CLASS C 

ADVISOR43 0.82 10.56 7.67 8.58 1.78 3.80 2.77 3.69 6.36 6.88 2.11 

0.28 9.84 7.13 8.06 1.25 3.26 2.24 3.17 5.67 6.38 1.86 

0.79 10.84 7.78 8.70 1.90 4.07 2.74 3.97 6.30 7.01 2.33 





CLASS A 

CLASS C 

ADVISOR43 7.49 6.72 5.02 5.50 6.93 2.86 5.19 4.12 5.03 6.81 

6.83 6.16 4.43 4.94 5.40 5.83 6.16 4.43 4.94 5.40 

7.61 6.90 5.14 5.65 6.98 7.61 6.90 5.14 5.65 6.98 



$6,146.2 $1,175.3 $760.1 

0.74% 1.26% 0.61% 

$6.61 $6.57 $6.63 

$6.90 $6.57 $6.63 

0.92 0.93 0.92 

3.02 3.01 3.00 







4.16% 3.87% 4.45% 

6/09 

$0.0239 $0.0212 $0.0246 

5/09 

0.0239 0.0211 0.0246 

4/09 


0.0239 0.0211 0.0246 

Short-Term 

— — — 

Long-Term 

— — — 

2.11% 

YTD 2009 14 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


58 6/30/09 

Franklin Templeton Hard Currency Fund 


Fixed Income 


High-quality money market instruments 

denominated in foreign major 

currencies which have historically 

experienced low rates of inflation. 39 



CUSIP 354 728 305 354 728 701 

Symbol ICPHX ICHHX 

Inception1 11/17/89 11/17/89 


March 1 












5, 13 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 


ADVISOR43 -8.39 -6.24 -4.03 17.75 19.27 8.48 -4.24 8.45 11.03 1.08 -2.58 

-8.36 -6.10 -3.56 18.16 19.76 8.82 -3.81 8.74 11.30 1.40 -2.47 





CLASS A 

ADVISOR43 -5.80 3.59 4.94 4.68 4.56 -7.93 2.80 4.47 4.45 4.44 

-5.52 3.88 5.27 5.02 4.78 -5.52 3.88 5.27 5.02 4.78 




Average Maturity 0.17 year 

Average Duration 32 0.17 year 


TOP 5 CURRENCIES41 Japanese Yen 26.19% 

Swedish Krona 20.65 

U.S. Dollar 9.30 

Australian Dollar 7.86 

Swiss Franc 7.69 



11.03% 

8.45% 

-4.24% 

0 

1.08% 

2005 2006 2007 2008 



FUND FACTS 




Beta 3 




Quarterly. 



6/09 

3/09 

12/08 


12 mos.) 

Short-Term 

Long-Term 

-2.58% 

YTD 2009 14 


Cash 58% 

Bonds 42% 



$347.7 $96.5 

1.09% 0.79% 

$9.07 $9.10 

$9.28 $9.10 

0.78 0.78 

7.32 7.33 


0.94% 1.36% 

— — 

— — 

$0.2436 0.2508 

— — 

— — 


Templeton Global Bond Fund 


CLASS A 8 

★★★★★ 


DURATION 


QUALITY 

High 

✕ Medium 

Low 

✕ Current 

Historical 


Fixed Income 

TM 67 


Bonds issued by companies, 

governments and government 

agencies around the world. 



Fund No. 406 506 

CUSIP 880 208 103 880 208 301 

Symbol TPINX TEGBX 

Inception1 9/18/86 5/1/95 


CUSIP 880 208 848 880 208 400 

Symbol — TGBAX 

Inception1 9/18/86 9/18/86 


January 1 


















Average Credit Quality A 


Asia 31.65% 

Europe/Africa/Middle East 30.21 

Americas 22.03 

Supranational 2.90 


Korea Treasury Bond, 0475-1112 7.27% 

Government of Russia 4.47 

Government of Sweden, 5.25% 3.34 

Government of France 3.29 

Government of Mexico, M 20 2.57 

Government of Mexico, 10.00% 2.34 

Government of Sweden, 4.00% 2.25 

Government of The Netherlands 2.05 

Government of Poland 1.85 

Korea Treasury Bond, 0550-1709 1.72 



-3.07% 

0 

13.51% 

10.86% 

6.28% 

2005 2006 2007 2008 

8.08% 

YTD 2009 14 

6/30/09 



YTD 


CLASS C 

ADVISOR43 -4.83 2.79 4.18 20.03 21.29 14.62 -3.07 13.51 10.86 6.28 8.08 

-5.22 2.39 3.87 19.42 20.90 14.04 -3.46 13.05 10.50 5.84 7.85 

-4.70 3.06 4.44 20.23 21.64 14.93 -2.84 13.72 11.26 6.47 8.23 





CLASS A 

CLASS C 

ADVISOR43 13.25 10.87 10.27 9.67 8.23 8.46 9.29 9.30 9.20 8.02 

12.78 10.45 9.81 9.23 8.13 11.78 10.45 9.81 9.23 8.13 

13.57 11.18 10.52 9.94 8.40 13.57 11.18 10.52 9.94 8.40 




FUND FACTS 




Beta 3 




Monthly on or near the 20th . 

Distribution Rate15 Dividend History 30 

6/09 

5/09 

4/09 


Short-Term 

Long-Term 


$8,329.5 $2,383.4 $3,615.5 

0.92% 1.32% 0.67% 

$11.82 $11.84 $11.79 

$12.34 $11.84 $11.79 

0.64 0.64 0.64 

8.53 8.53 8.53 


4.38% 4.17% 4.84% 

$0.0450 $0.0411 $0.0475 

0.0450 0.0410 0.0475 

0.0450 0.0412 0.0473 

— — — 

— — — 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Templeton Global Total Return Fund 


Fixed Income 


Seeks total investment return consisting 

of a combination of interest 

income, capital appreciation and 

currency gains. The fund’s manager 

strategically allocates assets across 

fixed income markets around the 

world by tapping the expertise of the 

100-plus investment professionals 

that compose the Franklin Templeton 

Fixed Income Group ® . 



Fund No. 407 507 

CUSIP 880 208 889 880 208 871 

Symbol TGTRX — 

Inception1 9/30/08 9/30/08 


CUSIP 880 208 863 880 208 855 


Inception1 9/30/08 9/30/08 


September 30 

PORTFOLIO MANAGER PROFILE 

















Average Credit Quality BBB+ 


Americas 40.12% 


Asia 20.53 



Government of Indonesia, FR34 5.25% 

Government of Indonesia, FR40 3.48 


Government of Mexico 3.43 

Province of Ontario 3.28 

KfW Bankengruppe 2.86 

Korea Treasury Bond 2.78 

General Electric Capital Corp. 1.97 

VTB Capital SA 1.73 




0 

2005 2006 2007 2008 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

200914 CLASS A — — — — — — — — — — 9.62 

CLASS C — — — — — — — — — — 9.32 

ADVISOR — — — — — — — — — — 9.74 





CLASS A — — — — 15.78 — — — — 10.90 

CLASS C — — — — 15.46 — — — — 14.46 

ADVISOR — — — — 16.01 — — — — 16.01 


9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 




Monthly. 

9, 15 



6/09 

5/09 

4/09 


Short-Term 

Long-Term 

9.62% 

YTD 2009 14 


$21.2 $2.5 $5.3 

1.33% 1.73% 1.08% 

1.09% 1.49% 0.84% 

$10.78 $10.77 $10.79 

$11.26 $10.77 $10.79 

— — — 

— — — 


5.28% 5.10% 5.75% 

$0.0495 $0.0458 $0.0517 

0.0624 0.0602 0.0646 

0.0600 0.0567 0.0621 

— — — 

— — — 


Templeton International Bond Fund 


Fixed Income 


The fund invests predominantly 

in foreign (non-U.S.) bonds. 



Fund No. 447 247 

CUSIP 880 208 509 880 208 608 

Symbol TBOAX — 

Inception1 12/3/07 12/3/07 


Fund No. 847 647 

CUSIP 880 208 707 880 208 806 


Inception1 12/3/07 12/3/07 


January 1 



















Average Credit Quality A 


Europe/Africa/Middle East 33.24% 

Asia 28.24 



TOP 10 HOLDINGS7 Korea Treasury Bond 4.14% 

Government of Mexico 3.67 



Province of Ontario 2.63 

Government of Sweden 2.43 

Inter-American Development Bank 2.39 

Government of Hungary 2.34 

Government of the Netherlands 2.28 

Government of South Africa 2.17 



0 

5.26% 

2005 2006 2007 2008 

9, 22 




FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



Beta 3 




Monthly. 

9, 15 



6/09 

5/09 

4/09 

Capital Gains(last 12 mos.) 30 

Short-Term 

Long-Term 

6.86% 

YTD 2009 14 

6/30/09 


5, 9 


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

YTD 

2009 14 

CLASS A — — — — — — — — — 5.26 6.86 

CLASS C — — — — — — — — — 4.85 6.71 

ADVISOR — — — — — — — — — 5.51 6.99 





CLASS A 10.62 — — — 7.49 5.91 — — — 4.59 

CLASS C 10.26 — — — 7.19 9.26 — — — 7.19 

ADVISOR 10.91 — — — 7.80 10.91 — — — 7.80 



$15.9 $3.7 $1.8 

2.95% 3.30% 2.65% 

1.08% 1.43% 0.78% 

$10.21 $10.22 $10.22 

$10.66 $10.22 $10.22 

— — — 

— — — 


6.43% 6.31% 6.97% 

$0.0446 $0.0408 $0.0463 

0.0438 0.0399 0.0456 

0.0459 0.0420 0.0476 

0.0010 0.0010 0.0010 

— — — 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Money Fund 


Fixed Income 


High-quality, short-term money 

market securities including 

U.S. government securities 

repurchase agreements. 


Fund No. 111 

CUSIP 354 014 102 

Symbol FMFXX 



November 1 


Shawn Lyons, CFA 






CUMULATIVE TOTAL RETURN 5, 13 6, 13 

AVERAGE ANNUAL TOTAL RETURN 

FUND FACTS 



Net Asset Value 26 

YIELD INFORMATION 50 

7-Day Yield 

7-Day Effective Yield 

$2,554.3 


Total Number of Positions 

154 

Average Weighted Maturity 


AAA: 62.49% 


AA: 28.76% A: 8.75% 

U.S. Treasury Bill 11.66% 

Agency Repo - Bank of America 10.81 

Agency Repo - HSBC 9.22 

Agency Repo - Barclays 6.84 

Total Fina Elf Capital 4.08 


0.60% 

$1.00 

0.00% 

0.00 

6/30/09 

YTD 1 YR 3 YR 5 YR 10 YR INCEPTION 1 YR 3 YR 5 YR 10 YR INCEPTION 

0.03 0.74 9.40 15.13 32.56 557.99 0.74 3.04 2.86 2.86 5.84 


Repurchase Agreements 32% 

Commercial Paper 27% 

Certificates of Deposit 24% 

U.S. Agency 17% 

49 days

Franklin Double Tax-Free Income Fund 61 6/30/09 

NATIONAL FUND 

INFORMATION 8 

STAR RATING – CLASS A 


Tax-Free Income19 PRIMARY INVESTMENT37 Municipal bonds issued by U.S. 

territories, including Puerto Rico. 



Fund No. 123 223 

CUSIP 354 723 603 354 723 611 

Symbol FPRTX FPRIX 

Inception 1 4/3/85 5/1/95 

ADVISOR 89 

Fund No. 085 

CUSIP 354 724 106 

Symbol — 



July 1 

PORTFOLIO MANAGER/FUND TENURE 84 

Carrie Higgins, 1992 


Stella Wong, 1986 


FUND FACTS 







Monthly on or near the 20 th . 

Distribution Rate15 Taxable Equivalent 

Distribution Rate16 4, 30, 45 


6/09 

5/09 

4/09 

Capital Gains 4, 30 (last 12 mos) 

Short-Term 

Long-Term 


$452.9 $73.9 

0.68% 1.23% 

$10.74 $10.78 

$11.22 $10.78 


4.51% 4.16% 

6.94 6.40 

$0.0422 $0.0374 

0.0422 0.0377 

0.0422 0.0377 

See page 128 for more commission information and 

page 125 for footnotes. 

— — 

— — 

Franklin Federal Tax-Free Income Fund 

NATIONAL FUND 


CLASS A 8 

★★★★ 


Tax-Free Income 86 


Investment grade municipal 

securities from across the nation. 



Fund No. 116 216 

CUSIP 353 519 101 353 519 200 

Symbol FKTIX FRFTX 

Inception1 10/7/83 5/1/95 

ADVISOR 89 

Fund No. 620 

CUSIP 353 519 408 

Symbol FAFTX 



September 1 




Francisco Rivera, 1996 


Sheila Amoroso, 1987 







CLASS A -1.72 1.55 2.97 3.93 6.08 -5.91 0.08 2.08 3.48 5.89 

CLASS C -2.25 0.99 2.42 3.37 4.11 -3.19 0.99 2.42 3.37 4.11 




Average Duration49 103 

18.6 years 

9.27 years 

AMT Exposure 

5.88% 

Average Credit Quality 

A 

29, 40 


AAA: 34.61% AA: 15.41% A: 9.22% 

BBB: 39.37 BB: 0.37 Not rated: 1.02 

CLASS A (NAV) 

$20 

10 

0 

4/85 6/09 


CLASS A CLASS C73 ADVISOR89 Sales Charge 

4.25% 0.00% 0.00% 

Dealer Concession 4.00 1.00 0.00 

12b-1 Fee to Dealer 0.10 0.65 0.00 

FUND FACTS 




PORTFOLIO HOLDINGS 



29 5/31 



Average Duration49 PERFORMANCE INFORMATION 



1.25 2.76 3.72 4.35 7.00 -3.07 1.28 2.82 3.90 6.82 

0.60 2.17 3.12 3.77 4.40 -0.36 2.17 3.12 3.77 4.40 

1.33 2.86 3.81 4.43 7.03 1.33 2.86 3.81 4.43 7.03 

954 

$7,798.6 $873.2 $524.7 

18.2 years 

0.60% 1.16% 0.51% 

7.57 years 

$11.26 $11.25 $11.27 AMT Exposure 

3.49% 

$11.76 $11.25 $11.27 Average Credit Quality 

AA 

5 6, 10 



CLASS A 

CLASS C 

ADVISOR43 Advisor Class shares are only offered to certain eligible investors as stated in the prospectus. 








6/09 

5/09 

4/09 

Capital Gains 4, 30 4.54% 4.20% 4.83% 

6.98 6.46 7.43 

$0.0445 $0.0394 $0.0454 

0.0450 0.0403 0.0458 

(last 12 mos) 

0.0450 0.0403 0.0458 

Short-Term 

— — — 

Long-Term 

— — — 



6/30/09 

29, 40 


AAA: 37.47% AA: 30.79% A: 18.41% 

BBB: 11.69 BB: 0.70 B: 0.26 

Not rated: 0.68 

CLASS A (NAV) 

$20 

10 

0 

10/83 6/09 



4.25% 0.00% 0.00% 






VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin High Yield Tax-Free Income Fund 

NATIONAL FUND 


CLASS A 8 

★★★★ 


Tax-Free Income86 PRIMARY INVESTMENT37 High yielding, lower-rated municipal 

securities from across the nation. 



Fund No. 130 230 

CUSIP 354 723 702 354 723 595 

Symbol FRHIX FHYIX 

Inception1 3/18/86 5/1/95 

ADVISOR 89 

Fund No. 640 

CUSIP 354 723 272 

Symbol FHYVX 



July 1 


John Wiley, 1991 


John Hopp, 1993 




INFORMATION 8 





Insured municipal securities from 

across the nation. 



Fund No. 121 221 

CUSIP 354 723 108 354 723 652 

Symbol FTFIX FRITX 

Inception1 4/3/85 5/1/95 

ADVISOR 89 

Fund No. 631 

CUSIP 354 723 264 

Symbol — 



July 1 


John Pomeroy, 1989 


Jim Conn, CFA, 1999 









6/09 

5/09 

4/09 

Capital Gains 4,30 5.87% 5.53% 6.21% 

9.03 8.51 9.55 

$0.0468 $0.0427 $0.0475 

0.0468 0.0429 0.0474 

(last 12 mos) 

0.0468 0.0429 0.0474 

Short-Term 

— — — 

Long-Term 

— — — 



Franklin Insured Tax-Free Income Fund 

NATIONAL FUND 

6/30/09 

FUND FACTS 



Expense Ratio2 PORTFOLIO HOLDINGS 

$4,681.0 $762.9 $305.5 

0.63% 1.18% 0.53% 


$9.15 $9.27 $9.18 

Public Offering Price $9.56 $9.27 $9.18 

29 5/31 






710 

18.7 years 

8.44 years 

AMT Exposure 

16.59% 


BBB 

5 6, 10 



CLASS A 

CLASS C 

ADVISOR43 -3.53 0.13 2.74 3.57 6.15 -7.65 -1.30 1.85 3.12 5.95 

-4.02 -0.39 2.18 3.02 4.10 -4.93 -0.39 2.18 3.02 4.10 

-3.33 0.32 2.82 3.61 6.17 -3.33 0.32 2.82 3.61 6.17 


29, 40 


AAA: 17.59% AA: 11.74% A: 16.35% 

BBB: 24.80 BB: 9.08 B: 6.09 

CCC: 1.41 Not rated: 12.94 

CLASS A (NAV) 

$20 

10 

0 

3/86 6/09 



4.25% 0.00% 0.00% 



6/30/09 

FUND FACTS 




$1,911.4 $229.3 $3.7 

0.63% 1.18% 0.53% 


$11.41 $11.53 $11.40 


29 5/31 






1.10 2.59 3.38 4.35 6.48 -3.16 1.11 2.49 3.89 6.29 

0.54 2.04 2.83 3.78 4.27 -0.42 2.04 2.83 3.78 4.27 

1.12 2.60 3.38 4.35 6.48 1.12 2.60 3.38 4.35 6.48 

387 

20.1 years 

8.32 years 

AMT Exposure 

2.14% 


AA 

5 6, 10 



CLASS A 

CLASS C 









6/09 

5/09 

4/09 

Capital Gains 4,30 4.43% 4.04% 4.73% 

6.82 6.22 7.28 

$0.0440 $0.0388 $0.0449 

0.0440 0.0389 0.0449 

(last 12 mos) 

0.0440 0.0389 0.0449 

Short-Term 

— — — 

Long-Term 

— — — 



29, 40 


AAA: 41.64% AA: 36.41% A: 15.20% 

BBB: 4.03 Not rated: 2.72 

CLASS A (NAV) 

$20 

10 

0 

4/85 6/09 



4.25% 0.00% 0.00% 




Franklin California Intermediate-Term Tax-Free Income Fund 6/30/09 

INTERMEDIATE-/LIMITED-TERM FUND 




Investment grade California 

municipal securities with an 

average maturity of 3 to 10 years. 



Fund No. 152 252 

CUSIP 352 519 300 352 519 607 

Symbol FKCIX FCCIX 

Inception1 9/21/92 7/1/03 

ADVISOR 89 

Fund No. 653 

CUSIP 352 519 888 

Symbol — 



October 31 


Christopher Sperry, CFA, 2000 







Investment grade municipal 

securities with an average 

maturity of 3 to 10 years. 



Fund No. 174 274 

CUSIP 354 723 710 354 723 298 

Symbol FKITX FCITX 

Inception1 9/21/92 7/1/03 

ADVISOR 89 

Fund No. 672 

CUSIP 354 723 215 

Symbol — 



July 1 






FUND FACTS 




$517.3 $58.9 $0.2 

0.66% 1.21% 0.56% 


$10.87 $10.89 $10.87 


29 5/31 






227 

9.2 years 

5.89 years 

AMT Exposure 

2.06% 


A 

5, 13 6, 13 



CLASS A 

CLASS C 

ADVISOR43 0.51 2.63 2.97 3.97 4.92 -1.76 1.86 2.50 3.73 4.78 

-0.05 2.07 2.42 — 2.03 -1.01 2.07 2.42 — 2.03 

0.57 2.65 2.98 3.97 4.93 0.57 2.65 2.98 3.97 4.93 









6/09 

5/09 

4/09 

Capital Gains 4,30 4.07% 3.59% 4.26% 

6.90 6.09 7.23 

$0.0377 $0.0326 $0.0386 

0.0377 0.0327 0.0386 

(last 12mos) 

0.0377 0.0327 0.0386 

Short-Term 

— — — 

Long-Term 

— — — 



29, 40 


AAA: 15.96% AA: 37.41% A: 29.85% 


CLASS A (NAV) 

$20 

10 

0 

9/92 6/09 



2.25% 0.00% 0.00% 



Franklin Federal Intermediate-Term Tax-Free Income Fund 6/30/09 


FUND FACTS 






29 5/31 






269 

$1,029.7 $132.3 $13.1 

9.5 years 

0.68% 1.23% 0.58% 

5.92 years 

$11.01 $11.04 $11.03 AMT Exposure 

1.32% 

$11.26 $11.04 $11.03 Average Credit Quality 

AA 

5, 13 6, 13 



CLASS A 

CLASS C 

ADVISOR43 2.04 3.37 3.35 4.14 5.03 -0.27 2.58 2.88 3.91 4.89 

1.56 2.83 2.81 — 2.26 0.58 2.83 2.81 — 2.26 

2.28 3.45 3.40 4.16 5.05 2.28 3.45 3.40 4.16 5.05 









6/09 

5/09 

4/09 

Capital Gains 4,30 3.92% 3.43% 4.10% 

6.03 5.28 6.31 

$0.0368 $0.0316 $0.0377 

0.0368 0.0317 0.0377 

(last 12mos) 

0.0368 0.0317 0.0377 

Short-Term 

— — — 

Long-Term 

— — — 



29, 40 


AAA: 31.34% AA: 35.95% A: 24.41% 

BBB: 6.96 BB: 0.56 B: 0.07 


CLASS A (NAV) 

$20 

10 

0 

9/92 6/09 



2.25% 0.00% 0.00% 






VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Federal Limited-Term Tax-Free Income Fund 


CLASS A 

Fund No. 154 

CUSIP 354 723 280 

Symbol FFTFX 



July 1 







Tax-Free Income19 PRIMARY INVESTMENT37 Investment grade New York 

municipal securities with an average 

maturity of 3 to 10 years. 



Fund No. 153 253 

CUSIP 354 128 308 354 128 506 

Symbol FKNIX FKNCX 

Inception 1 9/21/92 7/1/03 

ADVISOR 89 

Fund No. 673 

CUSIP 354 128 704 

Symbol — 



February 1 









9, 15 


Taxable Equivalent 

9, 16 


30, 45 


6/09 

5/09 

4/09 

Capital Gains 30 (last 12 mos) 

Short-Term 

Long-Term 



CLASS A 

2.61% 

4.02 

$0.0225 

0.0225 

0.0190 

— 

— 

6/30/09 


Tax-Free Income86 PRIMARY INVESTMENT37 INTERMEDIATE-/LIMITED-TERM FUND 

FUND FACTS 


CLASS A 

Investment grade municipal securities. 

The fund maintains a dollarweighted 

average portfolio maturity 

of five years or less. 


2, 9 

Expense Ratio 


with waiver 



29 5/31 






168 

AMT Exposure 


3.3 years 

2.89 years 

0.00% 

AA 

5, 9 6, 9, 51 



CLASS A 4.11 3.93 2.98 — 2.62 1.77 3.14 2.51 — 2.22 

$220.7 

1.03% 

0.53% 

$10.13 

$10.36 

29, 40 


AAA: 35.12% AA: 34.90% A: 22.16% 



CLASS A51 Sales Charge 

2.25% 

Dealer Concession 

2.00 

12b-1 Fee to Dealer 

0.15 

Franklin New York Intermediate-Term Tax-Free Income Fund 6/30/09 


FUND FACTS 





$357.0 $40.8 $1.6 

0.73% 1.28% 0.63% 


$10.65 $10.67 $10.66 


29 5/31 



Average Duration49 AMT Exposure24 PERFORMANCE INFORMATION 



137 

8.8 years 

5.03 years 

0.00% 


AA 

5, 13 6, 13 



CLASS A 

CLASS C 

ADVISOR43 3.37 3.55 3.24 4.33 4.90 1.01 2.76 2.77 4.09 4.76 

2.89 2.98 2.67 — 2.12 1.89 2.98 2.67 — 2.12 

3.52 3.60 3.27 4.34 4.91 3.52 3.60 3.27 4.34 4.91 









6/09 

5/09 

4/09 

Capital Gains 4,30 3.49% 3.00% 3.66% 

6.00 5.16 6.29 

$0.0317 $0.0267 $0.0325 

0.0317 0.0267 0.0325 

(last 12mos) 

0.0317 0.0267 0.0325 

Short-Term 

— — — 

Long-Term 

— — — 



29, 40 


AAA: 34.95% AA: 46.74% A: 12.63% 


CLASS A (NAV) 

$20 

10 

0 

9/92 6/09 



2.25% 0.00% 0.00% 




Franklin Alabama Tax-Free Income Fund 

STATE FUND 




Investment grade Alabama 

municipal securities. 


Fund No. 

CLASS A 

164 

CLASS C 

264 

CUSIP 354 723 884 354 723 454 

Symbol FRALX FALEX 

Inception1 9/1/87 5/1/95 


July 1 






Franklin Arizona Tax-Free Income Fund 

STATE FUND 




Investment grade Arizona 




Fund No. 126 226 

CUSIP 354 723 876 354 723 462 

Symbol FTAZX FAZIX 

Inception1 9/1/87 5/1/95 

ADVISOR 89 

Fund No. 656 

CUSIP 354 723 256 

Symbol — 



July 1 






FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$229.1 $43.7 

0.71% 1.26% 

$10.74 $10.84 

$11.22 $10.84 


4.28% 3.89% 

6.93 6.30 

$0.0400 $0.0351 

0.0400 0.0352 

0.0400 0.0352 

— — 

— — 








6/09 

5/09 

4/09 

Capital Gains 4,30 4.50% 4.08% 4.78% 

7.25 6.58 7.70 

$0.0406 $0.0357 $0.0414 

0.0406 0.0360 0.0414 

(last 12 mos) 

0.0406 0.0360 0.0414 

Short-Term 

— — — 

Long-Term 

— — — 

6/30/09 






CLASS A 1.05 2.70 3.31 4.16 5.89 -3.22 1.23 2.42 3.71 5.68 

CLASS C 0.49 2.15 2.75 3.59 4.14 -0.48 2.15 2.75 3.59 4.14 





18.2 years 

7.59 years 

AMT Exposure 

2.00% 


AA 

29, 40 


AAA: 43.37% AA: 20.21% A: 23.43% 


CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 


CLASS A CLASS C73 Sales Charge 

4.25% 0.00% 


4.00 1.00 


0.10 0.65 

6/30/09 

FUND FACTS 




$948.8 $88.6 $0.3 

0.62% 1.17% 0.52% 


$10.37 $10.49 $10.39 


29 5/31 






2.43 2.97 3.82 4.23 5.89 -1.92 1.49 2.91 3.78 5.67 

1.93 2.43 3.25 3.67 4.21 0.96 2.43 3.25 3.67 4.21 

2.72 3.07 3.88 4.26 5.90 2.72 3.07 3.88 4.26 5.90 

159 

18.4 years 

8.52 years 

AMT Exposure 

3.92% 


AA 

5 6, 10 



CLASS A 

CLASS C 


29, 40 


AAA: 30.62% AA: 38.17% A: 19.29% 


CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 





73 ADVISOR89 Sales Charge 

4.25% 0.00% 0.00% 






VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin California High Yield Municipal Fund 

OVERALL MORNINGSTAR RATINGTM CLASS A8 STATE FUND 


Tax-Free Income19 PRIMARY INVESTMENT37 High yielding, California lowerrated 

or non-rated municipal 

securities. 



Fund No. 175 275 

CUSIP 354 025 306 354 025 603 

Symbol FCAMX FCAHX 

Inception 1 5/3/93 5/1/96 

ADVISOR 89 

Fund No. 675 

CUSIP 354 025 801 

Symbol FVCAX 



October 1 









Insured California municipal 

securities. 



Fund No. 124 224 

CUSIP 352 519 102 352 519 409 

Symbol FRCIX FRCAX 

Inception1 9/3/85 5/1/95 

ADVISOR 89 

Fund No. 654 

CUSIP 352 519 805 

Symbol — 



October 31 













6/09 

5/09 

4/09 

Capital Gains 4,30 5.91% 5.64% 6.25% 

10.02 9.57 10.60 

$0.0427 $0.0392 $0.0433 

0.0425 0.0392 0.0431 

(last 12mos) 

0.0425 0.0392 0.0431 

Short-Term 

— — — 

Long-Term 

— — — 



6/30/09 

FUND FACTS 




$918.8 $209.6 $66.7 

0.62% 1.17% 0.52% 


$8.30 $8.34 $8.31 


29 5/31 






-7.31 -1.89 1.49 3.16 4.53 -11.23 -3.28 0.62 2.72 4.25 

-7.87 -2.45 0.94 2.60 3.73 -8.75 -2.45 0.94 2.60 3.73 

-7.21 -1.77 1.57 3.20 4.56 -7.21 -1.77 1.57 3.20 4.56 

413 

22.1 years 

11.03 years 

AMT Exposure 

2.13% 


BBB 

5, 13 6, 12, 13 



CLASS A 

CLASS C 


29, 40 


AAA: 12.86% AA: 8.59% A: 17.53% 

BBB: 16.34 BB: 4.45 B: 0.86 


CLASS A (NAV) 

$20 

10 

0 

5/93 6/09 



4.25% 0.00% 0.00% 



Franklin California Insured Tax-Free Income Fund 

STATE FUND 

6/30/09 

FUND FACTS 




$1,781.3 $185.7 $2.1 

0.61% 1.16% 0.51% 


$11.45 $11.57 $11.45 


29 5/31 






362 

17.3 years 

8.26 years 

2.05% 


AA 

5, 13 6, 13 



CLASS A 

CLASS C 

ADVISOR43 -1.54 1.71 3.11 4.10 6.22 -5.72 0.25 2.22 3.65 6.03 

-2.15 1.13 2.55 3.53 4.20 -3.08 1.13 2.55 3.53 4.20 

-1.48 1.73 3.12 4.11 6.22 -1.48 1.73 3.12 4.11 6.22 









6/09 

5/09 

4/09 

Capital Gains 4,30 4.62% 4.21% 4.92% 

7.84 7.14 8.35 

$0.0460 $0.0406 $0.0469 

0.0455 0.0403 0.0464 

(last 12mos) 

0.0455 0.0403 0.0464 

Short-Term 

— — — 

Long-Term 

— — — 



29, 40 


AAA: 49.63% AA: 30.10% A: 19.10% 


CLASS A (NAV) 

$20 

10 

0 

9/85 6/09 



4.25% 0.00% 0.00% 




Franklin California Tax-Free Income Fund 

STATE FUND 


CLASS A 8 

★★★★ 


Tax-Free Income19 PRIMARY INVESTMENT37 Investment grade California 

municipal securities since 

April 1981. 



Fund No. 112 212 

CUSIP 352 518 104 352 518 203 

Symbol FKTFX FRCTX 

Inception1 2/1/77 5/1/95 

ADVISOR 89 

Fund No. 614 

CUSIP 352 518 401 

Symbol FCAVX 



August 1 






Franklin Colorado Tax-Free Income Fund 

STATE FUND 




Investment grade Colorado 




Fund No. 127 227 

CUSIP 354 723 868 354 723 439 

Symbol FRCOX FCOIX 

Inception 1 9/1/87 5/1/95 

ADVISOR 89 

Fund No. 086 

CUSIP 354 724 205 

Symbol — 



July 1 






FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 


$505.6 $83.1 

0.66% 1.21% 

$11.12 $11.22 

$11.61 $11.22 


4.47% 4.06% 

7.21 6.55 

$0.0432 $0.0380 

0.0432 0.0384 

0.0432 0.0384 

— — 

— — 

6/30/09 

FUND FACTS 




$11,948.0 $888.7 $249.1 

0.57% 1.13% 0.48% 


$6.56 $6.55 $6.55 


29 5/31 






-1.46 1.56 3.34 4.14 5.57 -5.64 0.11 2.46 3.69 5.43 

-2.02 1.00 2.77 3.57 4.24 -2.95 1.00 2.77 3.57 4.24 

-1.38 1.65 3.44 4.20 5.59 -1.38 1.65 3.44 4.20 5.59 

860 

18.8 years 

9.08 years 

AMT Exposure 

1.81% 


AA 

5 6, 10 



CLASS A 

CLASS C 









6/09 

5/09 

4/09 

Capital Gains 4,30 4.91% 4.56% 5.20% 

8.33 7.73 8.82 

$0.0280 $0.0249 $0.0284 

0.0280 0.0252 0.0285 

(last 12mos) 

0.0280 0.0252 0.0285 

Short-Term 

— — — 

Long-Term 

— — — 





29, 40 


AAA: 36.04% AA: 24.07% A: 20.19% 


CLASS A (NAV) 

$20 

10 

0 

4/81 6/09 



4.25% 0.00% 0.00% 



6/30/09 






CLASS A 1.47 2.56 3.57 4.30 6.07 -2.84 1.10 2.67 3.85 5.86 

CLASS C 1.00 2.01 3.01 3.74 4.37 0.03 2.01 3.01 3.74 4.37 





19.8 years 

8.41 years 

AMT Exposure 

2.13% 


AA 

29, 40 


AAA: 31.44% AA: 40.73% A: 16.55% 


CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 



4.25% 0.00% 0.00% 






VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Connecticut Tax-Free Income Fund 

STATE FUND 

INFORMATION 8 





Investment grade Connecticut 




Fund No. 166 266 

CUSIP 354 723 744 354 723 579 

Symbol FXCTX FCTIX 

Inception1 10/3/88 5/1/95 

ADVISOR 89 

Fund No. 069 

CUSIP 354 724 304 

Symbol — 



July 1 






STATE FUND 


Tax-Free Income19 PRIMARY INVESTMENT37 Investment grade Florida 




Fund No. 165 265 

CUSIP 354 723 850 354 723 470 

Symbol FRFLX FRFIX 

Inception1 9/1/87 5/1/95 


July 1 










CLASS A 

CLASS C 

FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 



FUND FACTS 











6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$354.8 $77.5 

0.68% 1.23% 

$10.39 $10.45 

$10.85 $10.45 


4.18% 3.79% 

6.77 6.14 

$0.0378 $0.0330 

0.0375 0.0329 

0.0375 0.0329 

— — 

— — 

Franklin Florida Tax-Free Income Fund 


$1,141.6 $110.3 

0.62% 1.17% 

$11.05 $11.21 

$11.54 $11.21 


4.54% 4.14% 

6.98 6.37 

$0.0437 $0.0387 

0.0437 0.0387 

0.0437 0.0387 

— — 

— — 

6/30/09 


1.38 2.75 3.79 4.21 5.50 -2.96 1.29 2.90 3.76 5.29 

0.82 2.18 3.22 3.65 4.23 -0.15 2.18 3.22 3.65 4.23 





18.4 years 

7.76 years 

AMT Exposure 

3.29% 


A 

29, 40 


AAA: 37.05% AA: 24.18% A: 21.64% 


CLASS A (NAV) 

$20 

10 

0 

10/88 6/09 



4.25% 0.00% 0.00% 








CLASS A 1.42 2.84 3.70 4.51 6.23 -2.91 1.36 2.80 4.06 6.02 

CLASS C 0.85 2.30 3.14 3.94 4.47 -0.12 2.30 3.14 3.94 4.47 





16.2 years 

7.70 years 

AMT Exposure 

7.45% 


AA 

29, 40 


AAA: 41.71% AA: 29.56% A: 17.22% 


CLASS A (NAV) 

$20 

10 

6/30/09 

0 

9/87 6/09 



4.25% 0.00% 


4.00 1.00 


0.10 0.65 


Franklin Georgia Tax-Free Income Fund 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade Georgia 



Fund No. 

CLASS A 

128 

CLASS C 

228 

CUSIP 354 723 843 354 723 488 

Symbol FTGAX FGAIX 

Inception1 9/1/87 5/1/95 


July 1 









Investment grade Kentucky 



CLASS A 

Fund No. 172 

CUSIP 354 723 728 

Symbol FRKYX 



July 1 






FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$331.7 $78.6 

0.69% 1.24% 

$11.44 $11.56 

$11.95 $11.56 


4.17% 3.77% 

6.82 6.17 

$0.0415 $0.0363 

0.0420 0.0369 

0.0420 0.0369 

— — 

— — 

Franklin Kentucky Tax-Free Income Fund 

STATE FUND 





CLASS A 

CLASS C 

FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 



CLASS A 

$169.6 

0.76% 

$10.71 

$11.19 

CLASS A 

4.24% 

6.94 

$0.0395 

0.0395 

0.0395 

— 

— 

6/30/09 


1.83 3.07 3.76 4.40 6.03 -2.49 1.58 2.87 3.95 5.82 

1.25 2.53 3.21 3.83 4.29 0.28 2.53 3.21 3.83 4.29 





18.2 years 

7.34 years 

AMT Exposure 

1.63% 


AA 

29, 40 


AAA: 44.36% AA: 28.05% A: 21.58% 


CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 



4.25% 0.00% 


4.00 1.00 


0.10 0.65 

6/30/09 






CLASS A 2.22 2.84 3.66 4.26 5.45 -2.16 1.35 2.76 3.82 5.19 





18.1 years 

6.96 years 

AMT Exposure 

6.44% 


AA 

29, 40 


AAA: 24.91% AA: 46.66% A: 14.62% 


CLASS A (NAV) 

$20 

10 

0 

10/91 6/09 


CLASS A 

Sales Charge 

4.25% 


4.00 


0.10 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Louisiana Tax-Free Income Fund 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade Louisiana 




Fund No. 168 268 

CUSIP 354 723 827 354 723 512 

Symbol FKLAX FLAIX 

Inception 1 9/1/87 5/1/95 


July 1 






FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$283.2 $49.0 

0.71% 1.26% 

$10.73 $10.85 

$11.21 $10.85 


4.27% 3.86% 

6.99 6.32 

$0.0399 $0.0349 

0.0399 0.0355 

0.0399 0.0355 

— — 

— — 

6/30/09 





18.5 years 

8.08 years 

AMT Exposure 

3.93% 


AA 

29, 40 


AAA: 29.30% AA: 19.37% A: 35.28% 


CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 



4.25% 0.00% 


4.00 1.00 


0.10 0.65 

Franklin Maryland Tax-Free Income Fund 44 6/30/09 

STATE FUND 

INFORMATION 8 


★★★★ 




Investment grade Maryland 




Fund No. 169 269 

CUSIP 354 723 736 354 723 421 

Symbol FMDTX FMDIX 

Inception 1 10/3/88 5/1/95 

ADVISOR 89 

Fund No. 669 

CUSIP 354 723 140 

Symbol — 



July 1 











CLASS A 1.09 2.48 3.22 4.27 5.96 -3.18 1.02 2.34 3.81 5.74 

CLASS C 0.54 1.93 2.65 3.70 4.30 -0.43 1.93 2.65 3.70 4.30 





CLASS A 

CLASS C 

FUND FACTS 











6/09 

5/09 

4/09 


Short-Term 

Long-Term 


0.50 1.92 2.98 4.11 5.67 -3.73 0.46 2.09 3.66 5.45 

-0.05 1.37 2.42 3.55 4.25 -1.01 1.37 2.42 3.55 4.25 




$454.5 $112.9 

0.67% 1.22% 

$10.69 $10.84 

$11.16 $10.84 


4.43% 4.02% 

7.53 6.83 

$0.0412 $0.0363 

0.0412 0.0366 

0.0412 0.0366 

— — 

— — 





19.6 years 

7.38 years 

AMT Exposure 

1.32% 


A 

29, 40 


AAA: 37.80% AA: 23.06% A: 15.91% 


CLASS A (NAV) 

$20 

10 

0 

10/88 6/09 



4.25% 0.00% 0.00% 




Franklin Massachusetts Tax-Free Income Fund 91 6/30/09 

STATE FUND 


Tax-Free Income19 PRIMARY INVESTMENT37 Insured Massachusetts municipal 

securities. 

The following changes became effective 

February 15, 2009: Elimination of the nonfundamental 

policy requiring the fund to 

invest at least 80% of net assets in insured 

municipal securities; the removal of the word 

“Insured” from the fund name; and the fund will 

only buy municipal securities rated in the top 

four ratings by U.S. nationally recognized rating 

services (or comparable unrated securities). 

However, to the extent insured Massachusetts 

municipal securities are available, the fund may 

continue to buy insured municipal securities. 



Fund No. 118 218 

CUSIP 354 723 207 354 723 678 

Symbol FMISX FMAIX 

Inception1 4/3/85 5/1/95 

ADVISOR 89 

Fund No. 018 

CUSIP 354 723 199 

Symbol — 









STATE FUND 


CLASS A 8 

★★★★ 


Tax-Free Income19 PRIMARY INVESTMENT37 Insured Michigan municipal securities. 










However, to the extent insured Michigan 





Fund No. 119 219 

CUSIP 354 723 306 354 723 645 

Symbol FTTMX FRMTX 

Inception1 4/3/85 5/1/95 

ADVISOR 89 

Fund No. 657 

CUSIP 354 723 249 

Symbol — 


ANNUAL 

PROSPECTUS 

UPDATE 

AVAILABLE: 

July 1 






FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$452.7 $70.8 

0.66% 1.21% 

$11.08 $11.18 

$11.57 $11.18 


4.21% 3.80% 

6.84 6.17 

$0.0406 $0.0354 

0.0406 0.0356 

0.0406 0.0356 

— — 

— — 





17.9 years 

7.78 years 

AMT Exposure 

2.47% 


AA 

29, 40 


AAA: 48.52% AA: 34.88% A: 10.95% 


CLASS A (NAV) 

$20 

10 

0 

4/85 6/09 



4.25% 0.00% 0.00% 



Franklin Michigan Tax-Free Income Fund 91 6/30/09 

ANNUAL 

PROSPECTUS 

UPDATE 

AVAILABLE: 

July 1 






CLASS A 0.80 2.53 3.36 4.35 6.10 -3.48 1.05 2.46 3.90 5.91 

CLASS C 0.34 1.97 2.80 3.78 4.26 -0.63 1.97 2.80 3.78 4.26 

FUND FACTS 

CLASS A CLASS C ADVISOR43 Net Assets (millions) 


$1,314.8 $180.6 $0.7 

0.63% 1.18% 0.53% 


$11.61 $11.74 $11.63 


29 5/31 






220 

15.8 years 

6.48 years 

AMT Exposure 

1.64% 


AA 

5, 13 6, 10, 13 



CLASS A 

CLASS C 

ADVISOR43 1.84 3.31 3.77 4.54 6.40 -2.50 1.84 2.88 4.08 6.21 

1.35 2.74 3.20 3.97 4.48 0.37 2.74 3.20 3.97 4.48 

2.11 3.40 3.82 4.57 6.41 2.11 3.40 3.82 4.57 6.41 









6/09 

5/09 

4/09 

Capital Gains 4,30 4.28% 3.87% 4.57% 

6.88 6.22 7.35 

$0.0433 $0.0379 $0.0443 

0.0426 0.0374 0.0435 

(last 12 mos) 

0.0426 0.0374 0.0435 

Short-Term 

— — — 

Long-Term 

— — — 



29, 40 


AAA: 63.36% AA: 25.30% A: 10.17% 

BBB: 1.17 

CLASS A (NAV) 

$20 

10 

0 

4/85 6/09 



4.25% 0.00% 0.00% 






VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Minnesota Tax-Free Income Fund 91 6/30/09 

STATE FUND 


CLASS A 8 

★★★★ 


Tax-Free Income19 PRIMARY INVESTMENT37 Insured Minnesota municipal securities. 










However, to the extent insured Minnesota 





Fund No. 120 220 

CUSIP 354 723 405 354 723 637 

Symbol FMINX FMNIX 

Inception1 4/3/85 5/1/95 

ADVISOR 89 

Fund No. 668 

CUSIP 354 723 181 

Symbol — 


ANNUAL 

PROSPECTUS 

UPDATE 

AVAILABLE: 

July 1 











CLASS A 5.25 4.32 4.26 4.68 6.39 0.81 2.81 3.36 4.23 6.20 

CLASS C 4.72 3.78 3.71 4.12 4.37 3.72 3.78 3.71 4.12 4.37 

FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$690.9 $118.4 

0.66% 1.21% 

$11.90 $12.00 

$12.43 $12.00 


3.83% 3.41% 

6.39 5.69 

$0.0397 $0.0341 

0.0408 0.0353 

0.0408 0.0353 

— — 

— — 

Franklin Missouri Tax-Free Income Fund 





15.9 years 

5.31 years 

AMT Exposure 

1.48% 


AA 

29, 40 


AAA: 51.30% AA: 30.73% A: 9.42% 


CLASS A (NAV) 

$20 

10 

0 

4/85 6/09 



4.25% 0.00% 0.00% 



6/30/09 

OVERALL MORNINGSTAR RATING 

163 

18.8 years 

6.77 years 

3.02% 

AA 

TM 

CLASS A8 ★★★★ 


Tax-Free Income19 PRIMARY INVESTMENT37 Investment grade Missouri 



CLASS A 

Fund No. 160 

CLASS C 

260 

CUSIP 

Symbol 

Inception 

354 723 819 

FRMOX 

354 723 520 

FMOIX 

1 9/1/87 

ADVISOR 

5/1/95 

89 

Fund No. 679 

CUSIP 354 723 165 

Symbol — 



July 1 

PORTFOLIO MANAGER/FUND TENURE84 STATE FUND 

FUND FACTS 



Expense Ratio 





2 










6/09 

5/09 

4/09 

Capital Gains 4, 30 PORTFOLIO HOLDINGS 

$746.9 $95.2 

0.65% 

$11.48 

$11.99 

1.20% 

$11.56 

$11.56 

4.26% 3.88% 

6.97 6.35 

$0.0426 

0.0431 

0.0431 

0.0374 

0.0379 

0.0379 

(last 12 mos) 

Short-Term 

— 

Long-Term 

— 



— 

— 

29 5/31 



Average Duration49 AMT Exposure 


29, 40 


CLASS A (NAV) 


CLASS A CLASS C73 ADVISOR89 PERFORMANCE INFORMATION 

AVERAGE ANNUAL TOTAL RETURN – 


AVERAGE ANNUAL TOTAL RETURN– 

AAA: 40.00% AA: 

BBB: 7.91 BB: 

CC: 0.33 Not rated: 

31.80% 

0.49 

4.61 

A: 

B: 

14.43% 

0.43 

$20 

10 

0 

9/87 6/09 

Sales Charge 

4.25% 0.00% 0.00% 



5 1 YR 3 YR 5 YR 

CLASS A 1.75 2.87 3.72 

10 YR 

4.46 

INCEPTION 

6.12 

6, 10 


1 YR 3 YR 5 YR 10 YR 

-2.54 1.40 2.82 4.01 

INCEPTION 

5.91 

CLASS C 1.18 2.32 3.14 3.90 4.47 0.21 2.32 3.14 3.90 4.47 


Franklin New Jersey Tax-Free Income Fund 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade New Jersey 



Fund No. 

CLASS A 

171 

CLASS C 

271 

CUSIP 354 723 751 354 723 561 

Symbol FRNJX FNIIX 

Inception1 5/12/88 5/1/95 

ADVISOR 89 

Fund No. 676 

CUSIP 354 723 231 

Symbol — 



July 1 







Tax-Free Income19 PRIMARY INVESTMENT37 Insured New York municipal 

securities. 



Fund No. 181 281 

CUSIP 354 128 209 354 128 407 

Symbol FRNYX FNYKX 

Inception 1 5/1/91 5/1/95 


February 1 








Franklin New York Insured Tax-Free Income Fund 

STATE FUND 

FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$440.0 $61.0 

0.66% 1.21% 

$10.59 $10.78 

$11.06 $10.78 


4.18% 3.76% 

7.19 6.46 

$0.0385 $0.0338 

0.0385 0.0338 

0.0385 0.0338 

— — 

— — 

6/30/09 




Average Duration49 FUND FACTS 


219 


17.9 years 

Expense Ratio 8.05 years 

AMT Exposure 

3.17% 


AA 

2 




$1,111.8 $223.7 $0.8 

0.63% 1.18% 0.53% 


$11.47 $11.57 $11.47 


5 6, 10 



CLASS A 

CLASS C 

ADVISOR43 2.00 3.11 3.90 4.55 6.10 -2.33 1.62 3.00 4.09 5.89 

1.42 2.52 3.31 3.98 4.50 0.44 2.52 3.31 3.98 4.50 

2.09 3.15 3.92 4.56 6.11 2.09 3.15 3.92 4.56 6.11 









6/09 

5/09 

4/09 

Capital Gains 4,30 4.21% 3.79% 4.50% 

7.12 6.41 7.61 

$0.0420 $0.0365 $0.0430 

0.0415 0.0364 0.0424 

(last 12mos) 

0.0415 0.0364 0.0424 

Short-Term 

— — — 

Long-Term 

— — — 

29, 40 


AAA: 43.85% AA: 25.85% A: 21.72% 

BBB: 7.28 BB: 0.51 B: 0.38 


CLASS A (NAV) 

$20 

10 

0 

5/88 6/09 



4.25% 0.00% 0.00% 



6/30/09 






CLASS A 0.28 1.94 2.89 3.91 5.27 -3.98 0.49 2.01 3.46 5.02 

CLASS C -0.17 1.42 2.36 3.36 4.14 -1.13 1.42 2.36 3.36 4.14 




Average Duration49 AMT Exposure24 115 

21.3 years 

8.33 years 

0.00% 


AA 

29, 40 


AAA: 41.31% AA: 33.84% A: 19.50% 


CLASS A (NAV) 

$20 

10 

0 

5/91 6/09 



4.25% 0.00% 


4.00 1.00 


0.10 0.65 




VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin New York Tax-Free Income Fund 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade New York 




Fund No. 115 215 

CUSIP 354 130 106 354 130 205 

Symbol FNYTX FNYIX 

Inception 1 9/13/82 5/1/95 

ADVISOR 89 

Fund No. 615 

CUSIP 354 130 403 

Symbol FNYAX 



October 1 







CLASS A 8 

★★★★ 




Investment grade North Carolina 




Fund No. 170 270 

CUSIP 354 723 793 354 723 538 

Symbol FXNCX FNCIX 

Inception1 9/1/87 5/1/95 

ADVISOR 89 

Fund No. 071 

CUSIP 354 723 173 

Symbol — 



July 1 






6/30/09 

FUND FACTS 




$4,843.8 $557.8 $104.4 

0.60% 1.16% 0.51% 


$11.26 $11.25 $11.27 


29 5/31 







5 6, 10 



CLASS A 

CLASS C 

ADVISOR43 3.07 3.62 4.02 4.61 7.18 -1.31 2.12 3.12 4.15 7.01 

2.50 3.05 3.45 4.02 4.61 1.52 3.05 3.45 4.02 4.61 

3.25 3.74 4.11 4.69 7.21 3.25 3.74 4.11 4.69 7.21 


462 

18.2 years 

6.56 years 

0.00% 

AA 








6/09 

5/09 

4/09 

Capital Gains 4,30 4.31% 3.96% 4.58% 

7.41 6.81 7.87 

$0.0422 $0.0371 $0.0430 

0.0422 0.0371 0.0430 

(last 12 mos) 

0.0422 0.0371 0.0430 

Short-Term 

— — — 

Long-Term 

0.0506 0.0506 0.0506 



CREDIT QUALITY 40 

AAA: 47.16% AA: 38.86% A: 11.74% 


CLASS A (NAV) 

$20 

Franklin North Carolina Tax-Free Income Fund 

STATE FUND 

FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$798.5 $169.5 

0.64% 1.19% 

$11.64 $11.78 

$12.16 $11.78 


4.16% 3.74% 

6.94 6.24 

$0.0422 $0.0367 

0.0419 0.0368 

0.0419 0.0368 

— — 

— — 

10 

0 

9/82 6/09 



4.25% 0.00% 0.00% 



6/30/09 






CLASS A 2.84 3.12 3.79 4.57 6.13 -1.57 1.65 2.89 4.12 5.92 

CLASS C 2.33 2.57 3.23 4.02 4.50 1.35 2.57 3.23 4.02 4.50 





19.9 years 

7.63 years 

AMT Exposure 

2.78% 


AA 


AAA: 36.48% AA: 39.38% A: 13.17% 


CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 



4.25% 0.00% 0.00% 




Franklin Ohio Tax-Free Income Fund 91 6/30/09 

STATE FUND 


CLASS A 8 

★★★★ 


Tax-Free Income19 PRIMARY INVESTMENT37 Insured Ohio municipal securities. 










However, to the extent insured Ohio municipal 

securities are available, the fund may 




Fund No. 122 222 

CUSIP 354 723 504 354 723 629 

Symbol FTOIX FOITX 

Inception1 4/3/85 5/1/95 

ADVISOR 89 

Fund No. 633 

CUSIP 354 723 223 

Symbol — 







Franklin Oregon Tax-Free Income Fund 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade Oregon 




Fund No. 161 261 

CUSIP 354 723 785 354 723 660 

Symbol FRORX FORIX 

Inception1 9/1/87 5/1/95 

ADVISOR 89 

Fund No. 051 

CUSIP 354 724 502 

Symbol — 


ANNUAL 

PROSPECTUS 

UPDATE 

AVAILABLE: 

July 1 


July 1 






FUND FACTS 




$1,197.9 $222.1 $0.4 

0.64% 1.19% 0.54% 


$12.21 $12.32 $12.20 


29 5/31 






4.23 4.01 4.30 4.69 6.46 -0.18 2.51 3.40 4.24 6.27 

3.54 3.44 3.72 4.12 4.56 2.54 3.44 3.72 4.12 4.56 

4.25 4.02 4.30 4.70 6.46 4.25 4.02 4.30 4.70 6.46 

363 

15.7 years 

6.71 years 

AMT Exposure 

2.26% 


AA 

5 6, 10 



CLASS A 

CLASS C 









6/09 

5/09 

4/09 

Capital Gains 4,30 4.05% 3.63% 4.33% 

6.62 5.94 7.10 

$0.0430 $0.0373 $0.0440 

0.0430 0.0375 0.0440 

(last 12 mos) 

0.0430 0.0375 0.0440 

Short-Term 

— — — 

Long-Term 

— — — 









6/09 

5/09 

4/09 


Short-Term 

Long-Term 


4.23% 3.82% 

7.15 6.46 

$0.0418 $0.0366 

0.0418 0.0367 

0.0418 0.0367 

— — 

— — 

29, 40 


AAA: 62.21% AA: 24.84% A: 9.08% 


CLASS A (NAV) 

$20 

10 

0 

4/85 6/09 



4.25% 0.00% 0.00% 



6/30/09 

FUND FACTS 



Expense Ratio2 PERFORMANCE INFORMATION 



$834.8 $142.8 

0.64% 1.19% 


$11.37 $11.49 


$11.87 $11.49 

5 6, 10 



CLASS A 2.89 3.57 4.10 4.58 5.87 -1.46 2.07 3.20 4.13 5.66 

CLASS C 2.30 2.99 3.51 4.01 4.43 1.31 2.99 3.51 4.01 4.43 






16.5 years 

6.54 years 

AMT Exposure 

4.74% 


AA 



29, 40 


AAA: 38.24% AA: 34.00% A: 16.93% 

BBB: 8.71 BB: 0.18 B: 0.73 


CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 



4.25% 0.00% 0.00% 






VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin Pennsylvania Tax-Free Income Fund 44 6/30/09 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade Pennsylvania 



Fund No. 

CLASS A 

129 

CLASS C 

229 

CUSIP 354 723 801 354 723 447 

Symbol FRPAX FRPTX 

Inception1 12/1/86 5/1/95 

ADVISOR 89 

Fund No. 677 

CUSIP 354 724 403 

Symbol — 



July 1 






Franklin Tennessee Municipal Bond Fund 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade Tennessee 



CLASS A 

Fund No. 420 

CUSIP 354 025 405 

Symbol FRTIX 



October 1 











CLASS A 2.36 3.15 3.78 4.40 5.75 -2.03 1.68 2.88 3.95 5.55 

CLASS C 1.88 2.59 3.22 3.84 4.39 0.90 2.59 3.22 3.84 4.39 


FUND FACTS 










6/09 

5/09 

4/09 

Capital Gains 4,30 (last 12 mos) 

Short-Term 

Long-Term 



FUND FACTS 


2, 9 

Expense Ratio 


with waiver 






9, 15 


Taxable Equivalent 

9, 16 


4, 30, 45 


6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$862.8 $155.5 

0.65% 1.20% 

$9.84 $9.93 

$10.28 $9.93 


4.34% 3.93% 

6.89 6.24 

$0.0372 $0.0325 

0.0368 0.0325 

0.0368 0.0325 

— — 

— — 

CLASS A 

$227.5 

0.75% 

0.70% 

$10.89 

$11.37 

CLASS A 

4.01% 

6.56 

$0.0380 

0.0380 

0.0380 

— 

— 





19.3 years 

8.02 years 

AMT Exposure 

2.98% 


AA 

29, 40 


AAA: 39.94% AA: 35.69% A: 10.36% 


CLASS A (NAV) 

$20 

10 

0 

12/86 6/09 



4.25% 0.00% 0.00% 



6/30/09 






CLASS A 4.49 3.56 3.96 4.60 5.42 0.08 2.08 3.06 4.15 5.12 





17.3 years 

6.04 years 

AMT Exposure 

7.83% 


AA 

29, 40 


AAA: 33.21% AA: 46.24% A: 15.25% 


CLASS A (NAV) 

$20 

10 

0 

5/94 6/09 


CLASS A 

Sales Charge 

4.25% 


4.00 


0.10 


Franklin Virginia Tax-Free Income Fund 

STATE FUND 


CLASS A 8 

★★★★ 




Investment grade Virginia 



Fund No. 

CLASS A 

163 

CLASS C 

263 

CUSIP 354 723 769 354 723 553 

Symbol FRVAX FVAIX 

Inception1 9/1/87 5/1/95 

ADVISOR 89 

Fund No. 084 

CUSIP 354 723 157 

Symbol — 



July 1 






FUND FACTS 










6/09 

5/09 

4/09 


Short-Term 

Long-Term 




$582.4 $84.4 

0.66% 1.21% 

$11.16 $11.29 

$11.66 $11.29 


4.17% 3.76% 

6.81 6.14 

$0.0405 $0.0354 

0.0405 0.0355 

0.0405 0.0355 

— — 

— — 

This section intentionally left blank. 

6/30/09 






CLASS A 2.13 2.99 3.77 4.37 6.06 -2.24 1.50 2.88 3.92 5.85 

CLASS C 1.64 2.43 3.22 3.81 4.34 0.66 2.43 3.22 3.81 4.34 





18.8 years 

6.85 years 

AMT Exposure 

5.41% 


AA 

29, 40 


AAA: 39.57% AA: 37.59% A: 14.65% 

BBB: 7.21 B: 0.83 Not rated: 0.15 

CLASS A (NAV) 

$20 

10 

0 

9/87 6/09 



4.25% 0.00% 0.00% 






VALUE 

BLEND 

GROWTH 

SECTOR 

GLOBAL 

INTERNATIONAL 

HYBRID 


FIXED INCOME 


Franklin California Tax-Exempt Money Fund 




Tax-Free municipal securities, 

including bonds, notes and 

commercial paper. 


Fund No. 125 

CUSIP 352 519 201 

Symbol FCLXX 



October 31 

PORTFOLIO MANAGER/ 

COMPANY TENURE/ FUND TENURE 84 

Carrie Higgins, 1990, 1992 

Jim Conn, CFA, 1999, 1999 

Franklin New York Tax-Exempt Money Fund 


Tax-Free Income19 PRIMARY INVESTMENT37 Tax-Free municipal securities, 

including bonds, notes and 

commercial paper. 

CLOSED. Franklin New York Tax- Exempt 

Money Fund closed to new investors on 

4/30/09. Pending shareholder approval, it 

is anticipated that the fund will merge into 

Franklin Tax- Exempt Money Fund during the 

third quarter of 2009. 


Fund No. 131 

CUSIP 354 128 100 

Symbol FRNXX 





Jim Conn, CFA, 1999, 1999 


Tax-Free Income86 PRIMARY INVESTMENT37 High-quality, short-term municipal 

securities. May invest up to 20% 

of its assets in securities that pay 

taxable income. 


Fund No. 114 

CUSIP 354 719 106 

Symbol FTMXX 


ANNUAL 

PROSPECTUS 

UPDATE 

AVAILABLE: 

February 1 


December 1 




Jim Conn, CFA, 1999, 1999 


CUMULATIVE TOTAL RETURN 5 AVERAGE ANNUAL TOTAL RETURN 6 

FUND FACTS 





7-Day Yield 


Taxable Equivalent Yield16 See page 128 for more commission information and 


FUND FACTS 


2, 9 

Expense Ratio 


with waiver 



7-Day Yield9 7-Day Effective Yield9 9, 16 

Taxable Equivalent Yield 



Franklin Tax-Exempt Money Fund 

FUND FACTS 





7-Day Yield 


Taxable Equivalent Yield 16 



$572.2 

0.54% 

$1.00 

0.00% 

0.00 

0.00 

$65.4 

0.81% 

0.66% 

$1.00 

0.00% 

0.00 

0.00 

$159.9 

0.79% 

$1.00 

0.00% 

0.00 

0.00 





6/30/09 


0.01 0.57 6.08 9.86 18.56 92.67 0.57 1.99 1.90 1.72 2.79 


AAA: 100.00% 


Bay Area Toll Authority CA Toll Bridge Revenue 7.16% 

Los Angeles CA Department of Water & 

Power Revenue 4.77 

California State Economic Recovery 4.74 

Metropolitan Water District Southern CA 

Waterworks Revenue 4.00 

Southern CA Public Power Authority Power 

Project Revenue 3.99 


CUMULATIVE TOTAL RETURN 5, 9 6, 9 


6/30/09 


0.01 0.58 6.03 9.68 19.00 81.71 0.58 1.97 1.87 1.75 2.66 



28 


9 days 


AAA 


AAA: 100.00% 


Columbia University 3.67% 

Ithaca City New York 2.06 

New York NY City Transitional Financial 

Authority Revenue 1.58 

New York City Municipal Water Finance Authority 1.47 


CUMULATIVE TOTAL RETURN 5 6, 13 


88 

5 days 

AAA 

6/30/09 


0.01 0.51 5.75 9.22 18.19 135.43 0.51 1.88 1.78 1.69 3.18 



64 


9 days 


AAA 


AAA: 100.00% 


Connecticut State Health & Educational Facilities 

Authority Revenue-Yale University 4.14% 

Oregon State Government Obligation 3.88 

North Carolina State 3.02 

Texas State Tax & Revenue Anticipation Notes 3.02 

Sisters Mercy Health 3.00 


Franklin Templeton Variable Insurance Funds 

Franklin Templeton Investments currently offers 22 separate funds to insurance companies as investment choices in their variable annuity 

or variable life insurance contracts. The funds, which offer a wide variety of investment styles, may be available in multiple share classes: 

Class 1, Class 2, Class 3 and Class 4. Please see the contract prospectus for the most current information on which funds and classes 

are available in that variable product. 

FUND INFORMATION 

Please refer to the fund profile pages for summary information on each fund in the Franklin Templeton Variable Insurance Funds. 

VALUE 

Franklin Large Cap Value Securities Fund . . . . . . . . . . 103 

Franklin Small Cap Value Securities Fund . . . . . . . . . . 104 

Mutual Shares Securities Fund . . . . . . . . . . . . . . . . . . 104 

BLEND 

Franklin Rising Dividends Securities Fund . . . . . . . . . . 105 

GROWTH 

Franklin Flex Cap Growth Securities Fund . . . . . . . . . . 105 

Franklin Large Cap Growth Securities Fund . . . . . . . . . 106 

Franklin Small-Mid Cap Growth Securities Fund . . . . . 106 

SECTOR 

Franklin Global Real Estate Securities Fund . . . . . . . . . 107 

GLOBAL 

Mutual Global Discovery Securities Fund . . . . . . . . . . . 107 

Templeton Global Asset Allocation Fund . . . . . . . . . . . . 108 

Templeton Growth Securities Fund . . . . . . . . . . . . . . . 108 

Franklin Large Cap Value Securities Fund 


Value 

MAIN INVESTMENTS37 Seeks long- term capital appreciation. 

The fund normally invests at least 

80% of its net assets in investments 

of large capitalization companies and 

normally invests predominantly in 

equity securities, focusing on those the 

manager believes to be undervalued. 


CLASS 2 CLASS 4 

Fund No. 728 710 

CUSIP 355 150 251 355 150 186 

Inception1 3/1/05 2/28/08 


May 1 


William J. Lippman, 2005 


Bruce C. Baughman, CPA, 2005 


Margaret McGee, 2005 


Donald G. Taylor, CPA, 2005 


Please see page 103 for general information 

and page 125 for important footnotes. 

NEW 


$10,000 Hypothetical 

Investment from Inception 53 

FUND FACTS 



Expense Ratio54,56 without waiver 

with waiver 

*Less than $100,000 

PORTFOLIO HOLDINGS29 $8,013 $8,006 

$33.2 $0.0* 

1.40% 1.50% 

0.93% 1.03% 

6/30 





Energy 10.69 

Insurance 


8.39 







INTERNATIONAL 

Mutual International Securities Fund . . . . . . . . . . . . . . 109 

Templeton Developing Markets Securities Fund . . . . . . 109 

Templeton Foreign Securities Fund . . . . . . . . . . . . . . . 110 

HYBRID 

Franklin Growth and Income Securities Fund . . . . . . . . 110 

Franklin Income Securities Fund . . . . . . . . . . . . . . . . . 111 


Franklin Templeton VIP Founding Funds 

Allocation Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 

FIXED INCOME 

Franklin High Income Securities Fund . . . . . . . . . . . . . 112 

Franklin Strategic Income Securities Fund . . . . . . . . . . 112 

Franklin U.S. Government Fund . . . . . . . . . . . . . . . . . 113 

Franklin Zero Coupon Fund–2010 . . . . . . . . . . . . . . . . 113 

Templeton Global Bond Securities Fund . . . . . . . . . . . . 114 

6/30/09 


Stocks 95% 

Cash 5% 

6/30/09 

FUND-ONLY PERFORMANCE INFORMATION 

CUMULATIVE TOTAL RETURN– AVERAGE ANNUAL TOTAL RETURN– 

NO CONTRACT EXPENSES OR CHARGES53, 56, 66 53, 56, 66 

NO CONTRACT EXPENSES OR CHARGES 

YTD14 1 YR 3 YR 5 YR 10 YR INCEPTION 1 YR 3 YR 5 YR 10 YR INCEPTION 

CLASS 2 2.25 -26.85 -25.11 — — -19.87 -26.85 -9.19 — — -4.98 

CLASS 4 2.29 -26.92 -25.18 — — -19.94 -26.92 -9.22 — — -5.00 

TOP 10 HOLDINGS7 Nucor Corp. 4.34% 



D.R. Horton Inc. 3.10 


State Street Corp. 2.98 



Aflac Inc. 2.67 

Kimberly-Clark Corp. 2.60 


VARIABLE INSURANCE FUNDS


Franklin Small Cap Value Securities Fund 83 6/30/09 


Value 

MAIN INVESTMENTS 37 

Seeks long-term total return. The fund 

normally invests at least 80% of its net 

assets in investments of small capitalization 

companies and normally invests 

predominantly in equity securities. 



Fund No. 775 776 

CUSIP 355 150 673 355 150 590 

Inception 1 5/1/98 1/6/99 

CLASS 4 

Fund No. 732 

CUSIP 355 150 210 



May 1 

PORTFOLIO MANAGER/FUND TENURE 



84 



Y. Dogan Sahin, CFA, 2007 









Value 

MAIN INVESTMENTS37 Seeks capital appreciation, with 

income as a secondary goal. The 

fund normally invests primarily in 

U.S. and foreign equity securities that 

the manager believes are undervalued. 

The fund also invests, to a lesser 

extent, in risk arbitrage securities 

and distressed companies. 



Fund No. 743 744 

CUSIP 355 150 715 355 150 558 

Inception1 11/8/96 1/6/99 

CLASS 4 

Fund No. 737 

CUSIP 355 151 606 



May 1 


Peter Langerman, 2005 

Tenure at Mutual Series: 

1986-2002, 2005 

F. David Segal, CFA, 2005 


Deborah A. Turner, CFA, 2001 






NO CONTRACT EXPENSES OR CHARGES 53, 66 53, 66 



CLASS 1 4.33 -27.82 -27.54 -0.43 71.73 48.37 -27.82 -10.18 -0.09 5.56 3.60 

CLASS 2 4.18 -27.98 -28.09 -1.71 67.42 44.48 -27.98 -10.41 -0.34 5.29 3.35 

CLASS 4 4.17 -28.04 -27.85 -0.86 70.99 47.74 -28.04 -10.31 -0.17 5.51 3.56 

CLASS 1 CLASS 2 CLASS 4 



FUND FACTS 



Expense Ratio54 $14,837 $14,448 $14,774 

$33.5 $800.0 $20.5 

0.69% 0.94% 1.04% 



Mutual Shares Securities Fund 





Energy 9.83 




Utilities 


3.44 





FUND FACTS 


Expense Ratio54 CLASS 1 CLASS 2 CLASS 4 

$19,056 $18,625 $18,967 


$441.6 $3,372.9 $94.8 

0.73% 0.98% 1.08% 






Energy 6.28 




Media 


5.09 





Stocks 97% 

Cash 3% 


Universal Forest Products Inc. 2.05% 

Reliance Steel & Aluminum Co. 2.02 

Westlake Chemical Corp. 1.99 

Steel Dynamics Inc. 1.85 


Benchmark Electronics Inc. 1.80 


Rowan Companies Inc. 1.61 


Thor Industries Inc. 1.54 

6/30/09 






CLASS 1 4.87 -23.05 -23.07 -1.32 36.40 90.56 -23.05 -8.37 -0.27 3.15 5.23 

CLASS 2 4.75 -23.25 -23.66 -2.52 33.51 86.25 -23.25 -8.61 -0.51 2.93 5.04 

CLASS 4 4.71 -23.32 -23.43 -1.78 35.76 89.67 -23.32 -8.51 -0.36 3.10 5.19 


Stocks 83% 

Bonds 5% 

Cash 12% 


Wyeth 3.20% 









Mattel Inc. 1.50 


Franklin Rising Dividends Securities Fund 


Blend 

MAIN INVESTMENTS37 Seeks long- term capital appreciation, 

with preservation of capital as an 

important consideration. The fund 

normally invests at least 80% of its 

net assets in investments of companies 

that have paid rising dividends, and 


equity securities. 



Fund No. 773 774 

CUSIP 355 150 814 355 150 467 

Inception 1 1/27/92 1/6/99 

CLASS 4 

Fund No. 731 

CUSIP 355 150 194 



May 1 













Growth 

MAIN INVESTMENTS37 Seeks capital appreciation. The 

fund normally invests predominantly 

in equity securities of companies 

across the entire market 

capitalization spec trum that the 

manager believes have the potential 

for capital appreciation. 



Fund No. 729 702 

CUSIP 355 150 269 355 150 111 

Inception 1 3/1/05 2/28/08 


May 1 


Conrad B. Herrmann, CFA, 2005 


Matthew Moberg, CPA, 2005 


Raymond Chan, CFA, 2005 






FUND FACTS 


Expense Ratio54 *Less than $100,000 


$34,320 $33,377 $34,147 


$127.8 $1,214.3 $0.0* 

0.63% 0.88% 0.98% 









Pharmaceuticals, Biotechnology & Life Sciences 5.42 





6/30/09 



NO CONTRACT EXPENSES OR CHARGES53, 66 53, 66 



CLASS 1 -0.56 -19.99 -20.89 -8.26 43.28 243.20 -19.99 -7.51 -1.71 3.66 7.33 

CLASS 2 -0.71 -20.19 -21.46 -9.45 39.57 233.77 -20.19 -7.74 -1.97 3.39 7.16 

CLASS 4 -0.78 -20.31 -21.28 -8.72 42.56 241.47 -20.31 -7.67 -1.81 3.61 7.30 

Franklin Flex Cap Growth Securities Fund 



FUND FACTS 


54, 56 

Expense Ratio 


with waiver 


$8,908 $8,899 


$211.2 $131.9 







Energy 8.68 







Stocks 94% 

Cash 6% 

TOP 10 HOLDINGS7 Becton Dickinson & Co. 5.54% 


Roper Industries Inc. 5.33 


Procter & Gamble Co. 5.01 


Family Dollar Stores Inc. 4.42 


Dover Corp. 3.96 

Erie Indemnity Co. 3.88 






CLASS 2 8.03 -23.84 -16.04 — — -10.92 -23.84 -5.66 — — -2.63 

CLASS 4 7.93 -23.94 -16.13 — — -11.01 -23.94 -5.69 — — -2.66 

1.28% 1.38% 

0.97% 1.07% 


Stocks 94% 

Cash 6% 

6/30/09 

TOP 10 HOLDINGS7 Qualcomm Inc. 3.29% 






American Tower Corp. 2.11 


Danaher Corp. 2.03 





Franklin Large Cap Growth Securities Fund 81 6/30/09 


Growth 

MAIN INVESTMENTS37 Seeks capital appreciation. The fund 


net assets in investments of large 

capitalization companies, and normally 

invests predominantly in 




Fund No. 721 722 

CUSIP 355 150 731 355 150 533 

Inception 1 5/1/96 1/6/99 

CLASS 4 

Fund No. 709 

CUSIP 355 150 178 



May 1 


Kent Shepherd, CFA, 1999 


Alex W. Peters, CFA, 2005 





Growth 

MAIN INVESTMENTS37 Seeks long-term capital growth. The 

fund normally invests at least 80% of 

its net assets in investments of small 

capitalization and mid capitalization 

companies and normally invests 

predominantly in equity securities. 



Fund No. 723 724 

CUSIP 355 150 749 355 150 525 

Inception1 11/1/95 1/6/99 

CLASS 4 

Fund No. 733 

CUSIP 355 151 101 



May 1 


Edward B. Jamieson, 2005 


James Cross, CFA, 2006 


Michael McCarthy, CFA, 1995 




NO CONTRACT EXPENSES OR CHARGES53 NO CONTRACT EXPENSES OR CHARGES 56 


CLASS 1 8.66 -20.45 -15.11 -10.68 -0.24 81.15 -20.45 -5.31 -2.23 -0.02 4.62 

CLASS 2 8.48 -20.62 -15.75 -11.77 -2.72 76.34 -20.62 -5.55 -2.47 -0.28 4.40 

CLASS 4 8.48 -20.77 -15.56 -11.15 -0.76 80.19 -20.77 -5.48 -2.34 -0.08 4.57 



FUND FACTS 




$18,115 $17,634 $18,019 


$51.5 $336.1 $0.0* 

0.77% 1.02% 1.12% 








Energy 9.72 







Stocks 95% 

Cash 5% 







Exelon Corp. 2.21 

Abbott Laboratories 2.14 

J.P. Morgan Chase & Co. 1.97 


Franklin Small-Mid Cap Growth Securities Fund 82 6/30/09 








CLASS 1 14.59 -27.53 -21.77 -11.60 13.75 103.40 -27.53 -7.86 -2.44 1.30 5.33 

CLASS 2 14.47 -27.73 -22.32 -12.69 11.03 98.17 -27.73 -8.07 -2.68 1.05 5.13 

CLASS 4 14.39 -27.78 -22.16 -12.03 13.19 102.40 -27.78 -8.01 -2.53 1.25 5.29 



FUND FACTS 



$20,340 $19,817 $20,240 


$67.7 $677.7 $7.5 

0.80% 1.05% 1.15% 








Energy 6.23 







Stocks 95% 

Cash 5% 

TOP 10 HOLDINGS7 Silicon Laboratories Inc. 2.78% 

Flowserve Corp. 2.45 


Express Scripts Inc. 2.17 


Affiliated Managers Group Inc. 1.80 


AMETEK Inc. 1.72 

Guess? Inc. 1.71 

Waters Corp. 1.65 


Franklin Global Real Estate Securities Fund 88 6/30/09 

(Franklin Real Estate Fund before May 1, 2007) 


Sector 

MAIN INVESTMENTS37 Seeks high total return. The fund 


net assets in investments of companies 

located anywhere in the world that 

operate in the real estate sector and 





Fund No. 771 772 

CUSIP 355 150 301 355 150 640 

Inception1 1/24/89 1/6/99 

CLASS 4 

Fund No. 790 

CUSIP 355 150 137 



May 1 

PORTFOLIO MANAGER/FUND TENURE84 Jack Foster, 2007 


David Levy, 2007 





Global 

MAIN INVESTMENTS37 Seeks capital appreciation. The fund 

normally invests primarily in U.S. 

and foreign equity securities that the 

manager believes are undervalued. 

The fund also invests, to a lesser 

extent, in risk arbitrage securities 

and distressed companies. 

Formerly Mutual Discovery Securities Fund. 

Effective 5/1/09, the fund’s name changed. 

The investment goal and strategy remained 

the same. 



Fund No. 753 754 

CUSIP 355 150 699 355 150 574 

Inception 1 11/8/96 1/6/99 

CLASS 4 

Fund No. 736 

CUSIP 355 151 507 



May 1 

PORTFOLIO MANAGER/FUND TENURE84 Anne E. Gudefin, CFA, 2005 


Charles M. Lahr, CFA, 2007 









CLASS 1 -10.23 -39.37 -51.33 -29.15 32.14 269.36 -39.37 -21.34 -6.66 2.83 6.60 

CLASS 2 -10.36 -39.54 -51.73 -30.07 28.84 259.64 -39.54 -21.56 -6.90 2.57 6.47 

CLASS 4 -10.37 -39.57 -51.57 -29.49 31.50 267.59 -39.57 -21.47 -6.75 2.78 6.58 



FUND FACTS 



with waiver 



$36,936 $35,964 $36,759 


$30.9 $286.3 $0.0* 

1.10% 1.35% 1.45% 

0.78% 1.03% 1.13% 




Retail REITs 40.07% 

Office REITs 17.94 

Diversified REITs 16.21 

Specialized REITs 13.13 

Residential REITs 7.41 

Industrial REITs 4.68 


Stocks 99% 

Cash 1% 

TOP 10 HOLDINGS7 Westfield Group 8.87% 

Unibail-Rodamco SE 4.45 

Simon Property Group Inc. 4.36 



British Land Company PLC 2.76 




HCP Inc. 2.05 

Mutual Global Discovery Securities Fund 93 6/30/09 






CLASS 1 8.62 -12.96 -0.38 41.85 113.72 177.00 -12.96 -0.13 7.24 7.89 8.39 

CLASS 2 8.45 -13.21 -1.16 40.05 108.45 169.95 -13.21 -0.39 6.97 7.62 8.17 

CLASS 4 8.46 -13.27 -0.83 41.22 112.77 175.76 -13.27 -0.28 7.15 7.84 8.36 



FUND FACTS 



$27,700 $26,995 $27,576 


$80.5 $1,181.1 $43.7 

0.98% 1.23% 1.33% 






Energy 


5.54 


Banks 3.69 




Media 2.61 



Stocks 74% 

Cash 22% 

Bonds 4% 

TOP 10 HOLDINGS7 British American Tobacco PLC 4.48% 


Wyeth 3.33 


Danone 2.68 



Carlsberg AS 2.21 






Templeton Global Asset Allocation Fund 


Global 

MAIN INVESTMENTS37 Seeks high total return. The fund 

normally invests in equity securities 

of companies of any country, 

debt securities of companies and 

governments of any country, and 

in money market securities. The 

fund normally invests substantially 

to primarily in equity securities. 



Fund No. 715 716 

CUSIP 355 150 756 355 150 517 

Inception 1 8/24/88 5/1/97 

CLASS 4 

Fund No. 786 

CUSIP 355 151 861 



May 1 


Equity portion: 

Peter A. Nori, CFA, 1996 


Tina Sadler, CFA, 2004 


Bond portion: 

Michael Hasenstab, Ph.D., 2002 





Global 

MAIN INVESTMENTS37 Seeks long- term capital growth. 

The fund normally invests primarily 

in equity securities of companies 

located anywhere in the world, 

including those in the U.S. and in 

emerging markets. 



Fund No. 739 740 

CUSIP 355 150 764 355 150 491 

Inception 1 3/15/94 1/6/99 

CLASS 4 

Fund No. 788 

CUSIP 355 151 879 



May 1 


Alan Chua, CFA, 2003 


Cindy L. Sweeting, CFA, 2007 




Investment from Inception53 FUND FACTS 




with waiver 


PORTFOLIO HOLDINGS29 $57,307 $55,595 $57,096 

$35.9 $46.7 $0.0* 

0.94% 1.19% 1.29% 

0.83% 1.08% 1.18% 

6/30 



Pharmaceuticals, Biotechnology & Life Sciences 9.04% 



Media 5.27 

Energy 4.69 





Banks 2.47 

Templeton Growth Securities Fund 



6/30/09 






CLASS 1 3.65 -16.95 -2.83 22.63 59.38 473.07 -16.95 -0.95 4.16 4.77 8.73 

CLASS 2 3.46 -17.18 -3.58 21.14 55.46 455.95 -17.18 -1.21 3.91 4.51 8.58 

CLASS 4 3.49 -17.19 -3.19 22.18 58.79 470.96 -17.19 -1.07 4.09 4.73 8.71 



FUND FACTS 



$22,364 $21,785 $22,247 


$489.2 $1,485.0 $38.7 

0.78% 1.03% 1.13% 








Media 9.88 

Energy 9.71 



Banks 3.96 




Stocks 58% 

Bonds 38% 

Cash 4% 


Europe 25.38% 


Asia 8.75 





NO CONTRACT EXPENSES OR CHARGES53 NO CONTRACT EXPENSES OR CHARGES 53 


CLASS 1 5.59 -28.46 -28.24 -7.28 14.50 123.64 -28.46 -10.47 -1.50 1.36 5.40 

CLASS 2 5.51 -28.67 -28.77 -8.41 11.67 117.85 -28.67 -10.69 -1.74 1.11 5.22 

CLASS 4 5.41 -28.79 -28.61 -7.76 13.90 122.47 -28.79 -10.63 -1.60 1.31 5.37 


Stocks 96% 

Cash 4% 

6/30/09 


Europe 44.38% 


Asia 11.20 




Mutual International Securities Fund 


International 


Seeks capital appreciation, which 

occasionally may be short term, 

with income as a secondary goal. 


80% of its net assets in securities of 

non-US issuers and invests primarily 

in equity securities that the manager 

believes are undervalued. The fund 

also invests to a lesser extent, distressed 

securities and merger arbitrage. 



Fund No. 760 761 

CUSIP 355 151 853 355 151 846 

Inception 1 6/15/09 6/15/09 


June 15 


Phillip Brugere-Trelat, 2009 

Tenure at Mutual Series 

1984-1994, 2004-Present 

Andrew Sleeman, CFA, 2009 




Templeton Developing Markets Securities Fund 


International 


Seeks long-term capital appreciation. 


80% of its net assets in emerging 

market investments and normally 

invests predominantly in equity 

securities. 



Fund No. 717 718 

CUSIP 355 150 772 355 150 483 

Inception 1 3/4/96 5/1/97 

CLASS 4 

Fund No. 738 

CUSIP 355 151 705 



May 1 


Mark Mobius, Ph.D., 1996 


Tom Wu, 1996 


Dennis Lim, 1996 




FUND FACTS 


54, 56 

Expense Ratio 


with waiver 



FUND FACTS 


Expense Ratio54 CLASS 2 CLASS 4 

$1.0 $1.0 


$12,630 $12,261 $12,567 


$222.5 $325.8 $14.5 

1.54% 1.79% 1.89% 




Energy 24.48% 


Banks 13.40 





Media 2.80 



6/30/09 



NO CONTRACT EXPENSES OR CHARGES 53, 55, 66 53, 55, 66 



CLASS 1 28.72 -26.70 -4.54 59.96 67.18 26.30 -26.70 -1.54 9.85 5.27 1.77 

CLASS 2 28.47 -26.93 -5.26 57.97 63.17 22.61 -26.93 -1.79 9.58 5.02 1.54 

CLASS 4 28.46 -26.96 -5.01 59.17 66.36 25.67 -26.96 -1.70 9.74 5.22 1.73 


Stocks 96% 

Cash 4% 

6/30/09 






CLASS 2 — — — — — — — — — — — 

CLASS 4 — — — — — — — — — — — 

1.57% 1.67% 

1.20% 1.30% 


Asia 39.25% 


Europe 23.76 





Templeton Foreign Securities Fund 


International 


Seeks long- term capital growth. 


80% of its net assets in investments 

of issuers located outside the U.S., 

including those in emerging markets 

and normally invests predominantly 

in equity securities. 



Fund No. 719 720 

CUSIP 355 150 798 355 150 392 

Inception 1 5/1/92 5/1/97 

CLASS 4 

Fund No. 785 

CUSIP 355 151 804 



May 1 


Peter A. Nori, CFA, 1999 


Tina Sadler, CFA, 2004 


Gary Motyl, CFA, 2007 




Franklin Growth and Income Securities Fund 


Hybrid 

MAIN INVESTMENTS37 Seeks capital appreciation with 

current income as a secondary 

goal. The fund normally invests 

predominantly in equity securities, 

including securities convertible into 

common stock. 



Fund No. 767 768 

CUSIP 355 150 103 355 150 665 

Inception 1 1/24/89 1/6/99 

CLASS 4 

Fund No. 706 

CUSIP 355 150 145 



May 1 


Alan E. Muschott, CFA, 2005 


Edward D. Perks, CFA, 2005 


Frank Felicelli, CFA, 1995 






FUND FACTS 


Expense Ratio54 $10,000 Hypothetical 


FUND FACTS 




$32,233 $31,258 $32,067 


$265.2 $1,730.3 $29.7 

0.81% 1.06% 1.16% 




Telecommunication Services 14.15% 

Energy 


11.94 



Semiconductors & Semiconductor Equipment 5.01 



Media 4.24 

Banks 4.07 



$32,596 $31,787 $32,438 


$151.9 $132.2 $0.0* 

0.55% 0.90% 0.90% 







Energy 11.01 







6/30/09 






CLASS 1 2.96 -24.30 -27.46 -15.85 0.45 225.96 -24.30 -10.15 -3.39 0.05 5.95 

CLASS 2 2.91 -24.44 -27.97 -16.89 -1.90 217.87 -24.44 -10.36 -3.63 -0.19 5.82 

CLASS 4 2.80 -24.61 -27.81 -16.26 -0.03 224.38 -24.61 -10.29 -3.49 0.00 5.93 


Stocks 90% 

Bonds 6% 

Cash 4% 

6/30/09 



NO CONTRACT EXPENSES OR CHARGES13, 53, 55, 66 13, 53, 55, 66 



CLASS 1 9.33 -25.78 -14.12 15.92 20.80 222.33 -25.78 -4.95 3.00 1.91 7.06 

CLASS 2 9.23 -25.99 -14.75 14.48 17.86 212.58 -25.99 -5.18 2.74 1.66 6.87 

CLASS 4 9.15 -26.08 -14.56 15.32 20.18 220.67 -26.08 -5.11 2.89 1.86 7.02 


Stocks 92% 

Cash 8% 


Europe 59.10% 

Asia 23.14 





TOP 10 HOLDINGS7 Wells Fargo & Co. 3.43% 







Coca-Cola Co. 2.79 

Microchip Technology Inc. 2.67 



Franklin Income Securities Fund 


Hybrid 

MAIN INVESTMENTS37 Seeks to maximize income while 

maintaining prospects for capital 

appreciation. The fund may invest 

in equity and debt securities and 

may invest all of its assets in below 

investment grade debt securities. 



Fund No. 769 770 

CUSIP 355 150 889 355 150 418 

Inception 1 1/24/89 1/6/99 

CLASS 4 

Fund No. 708 

CUSIP 355 150 160 



May 1 


Edward D. Perks, CFA, 2002 


Charles B. Johnson, 1989 




Franklin Templeton VIP Founding Funds Allocation Fund 




Seeks capital appreciation, with 

income as a secondary goal. The 

fund normally invests equal portions 

in Class 1 shares of Franklin Income 

Securities Fund; Mutual Shares 

Securities Fund; and Templeton 

Growth Securities Fund. 



Fund No. 783 784 

CUSIP 355 150 236 355 150 228 

Inception 1 7/2/07 7/2/07 

CLASS 4 

Fund No. 701 

CUSIP 355 151 309 



May 1 

FUND ADMINISTRATOR 84 

T. Anthony Coffey, CFA, 2007 


Oversees rebalancing of the fund 

on behalf of the administrator. 





FUND FACTS 


Expense Ratio54 $10,000 Hypothetical 


FUND FACTS 



with waiver 


$51,373 $50,049 $51,148 


$567.9 $5,320.3 $236.4 

0.47% 0.72% 0.82% 




Corporate Bonds 58.52% 



Corporate Loans 5.83 

Energy 3.29 






$6,444 $6,409 $6,424 


$0.4 $399.1 $579.4 

PORTFOLIO HOLDINGS29 TOP 10 HOLDINGS 

6/30 

7 




Wyeth 1.07 






Royal Dutch Shell 0.90 

6/30/09 






CLASS 1 7.51 -22.26 — — — -35.56 -22.26 — — — -19.75 

CLASS 2 7.34 -22.50 — — — -35.91 -22.50 — — — -19.97 

CLASS 4 7.33 -22.51 — — — -35.76 -22.51 — — — -19.87 

0.78% 1.03% 1.13% 

0.75% 1.00% 1.10% 


FTVIP Income 

Securities Fund 33 1 ⁄3% 

FTVIP Templeton Growth 


FTVIP Mutual Shares 


6/30/09 






CLASS 1 12.91 -16.46 -7.51 12.00 75.28 413.73 -16.46 -2.57 2.29 5.77 8.34 

CLASS 2 12.84 -16.64 -8.18 10.58 70.96 400.49 -16.64 -2.80 2.03 5.51 8.20 

CLASS 4 12.79 -16.67 -7.91 11.51 74.52 411.48 -16.67 -2.71 2.20 5.73 8.32 


Bonds 64% 

Stocks 32% 

Cash 4% 


Bank of America Corp. 1.53% 




Duke Energy Corp. 1.19 


Tenet Healthcare Corp. 3.47% 

Energy Future Holdings Corp. 3.27 

Ford Motor Credit Co. 3.02 

Dynegy Holdings Inc. 2.66 

General Motors Acceptance Corp. 1.89 




Franklin High Income Securities Fund 


Fixed Income 


Seeks a high level of current 

income with capital appreciation 

as a secondary goal. The fund 

normally invests primarily to 

predominantly in debt securities 

offering high yield and expected 

total return. 



Fund No. 777 778 

CUSIP 355 150 509 355 150 624 

Inception 1 1/24/89 1/6/99 

CLASS 4 

Fund No. 707 

CUSIP 355 150 152 



May 1 


Patricia O’Connor, CFA, CPA, 2002 


Eric G. Takaha, CFA, 2005 




Franklin Strategic Income Securities Fund 


Fixed Income 

MAIN INVESTMENTS37 Seeks a high level of current income, 

with capital appreciation over the 

long term as a secondary goal. The 

fund normally invests primarily to 

predominantly in U.S. and foreign 

debt securities, including those in 

emerging markets. 



Fund No. 779 780 

CUSIP 355 150 335 355 150 327 

Inception 1 7/1/99 5/15/01 

CLASS 4 

Fund No. 734 

CUSIP 355 151 200 



May 1 


Eric G. Takaha, CFA, 1999 


Christopher J. Molumphy, CFA, 1999 






FUND FACTS 



$31,552 $30,726 $31,429 


$43.8 $155.5 $7.5 

0.66% 0.91% 1.01% 




Utilities 11.69% 

Energy 9.87 

Health Care Services 8.22 

Cable Television 6.23 

Food & Beverage 6.07 

Financial Services 5.66 

Telecommunications 5.17 


Wireless Communications 4.76 

Media 4.16 






Expense Ratio54 $18,438 $17,983 $18,336 

$1,049.6 $47.9 $108.5 

0.63% 0.88% 0.98% 




High-Yield Corporate Bonds & Preferred 23.07% 

Investment Grade Corporate Bonds 18.45 

Mortgages/Other Asset-Backed Bonds 17.07 

Floating Rate Bank Loans 9.93 

U.S. Government Bonds 8.89 

Other International Bonds (Non-U.S. Dollar) 8.51 

Emerging Market Bonds 6.39 

Municipal Bonds 

International Developed Market Bonds 

2.74 

(Non-U.S. Dollar) 2.23 

Convertible Securities 0.31 

6/30/09 






CLASS 1 12.86 0.09 13.41 29.33 — 84.38 0.09 4.29 5.28 — 6.31 

CLASS 2 12.60 -0.24 12.48 27.64 — 79.83 -0.24 4.00 5.00 — 6.04 

CLASS 4 12.55 -0.30 12.79 28.61 — 83.36 -0.30 4.09 5.16 — 6.25 


Bonds 98% 

Cash 2% 

6/30/09 






CLASS 1 21.75 -5.46 3.51 19.52 28.18 215.52 -5.46 1.16 3.63 2.51 5.79 

CLASS 2 21.51 -5.74 2.68 17.79 25.01 207.26 -5.74 0.89 3.33 2.26 5.65 

CLASS 4 21.53 -5.68 3.10 19.05 27.68 214.29 -5.68 1.02 3.55 2.47 5.77 


Bonds 94% 

Cash 6% 

TOP 10 HOLDINGS7 Ford Motor Credit Company LLC 2.18% 

HCA Inc. 2.04 

GMAC LLC 1.81 

Charter Communications Holdings 1.80 

Intelsat Bermuda 1.53 

Chesapeake Energy Corp. 1.48 

Qwest Communications International 1.46 

NRG Energy Inc. 1.42 

Williams Companies Inc. 1.30 

Tenet Healthcare Corp. 1.25 

TOP 10 HOLDINGS7 Russian Federation 1.73% 

Republic of Argentina 1.03 

Mexican Fixed Rate Bonds 0.97 

FNMA, 5.50% 0.97 


California State Obligation 0.92 

MBNA Master Credit Card Trust 0.84 

FHLG 0.80 

Swedish Government 0.76 

FNMA, 4.50% 0.71 


Franklin U.S. Government Fund 


Fixed Income 

MAIN INVESTMENTS37 Seeks income. The fund normally 

invests at least 80% of its net assets 

in U.S. government securities and 

normally invests primarily in fixed 

and variable rate mortgage-backed 

securities. 



Fund No. 781 782 

CUSIP 355 150 871 355 150 426 

Inception 1 3/14/89 1/6/99 

CLASS 4 

Fund No. 735 

CUSIP 355 151 408 



May 1 


Paul Varunok, 2004 




Franklin Zero Coupon Fund – 2010 


Fixed Income 

MAIN INVESTMENTS37 Seeks as high an investment 

return as is consistent with capital 

preservation. The fund normally 

invests at least 80% of its net assets 

in zero coupon debt securities. 



Fund No. 714 725 

CUSIP 355 150 830 355 150 459 

Inception 1 3/14/89 5/12/03 


May 1 


Kent C. Burns, CFA, 2002 


Paul Varunok, 2006 










PORTFOLIO HOLDINGS29 $37,974 $36,976 $37,813 

$168.1 $500.8 $0.0* 

0.53% 0.78% 0.88% 

6/30 


TOP 10 HOLDINGS7 GNMA 44.81% 

FNMA 17.51 

Freddie Mac 9.77 

Federal Home Loan Bank 6.91 

U.S. Treasury Note/Bond 6.77 

Tennessee Valley Authority 2.43 

FICO 2.38 

Federal Farm Credit Bank 2.34 

Housing & Urban Development Co. 

Small Business Administration Participation 

0.66 

Certificates 0.65 



FUND FACTS 


Expense Ratio54 CLASS 1 CLASS 2 

$55,784 $54,951 


$117.7 $15.2 

0.68% 0.93% 



TOP HOLDINGS7 Tennessee Valley Authority 23.35% 

U.S. Treasury Strip 19.28 

Freddie Mac 16.06 

FICO 12.48 

FNMA 

International Bank Reconstruction & 

8.49 

Development 8.39 

Resolution Funding 7.42 

6/30/09 






CLASS 1 -0.25 4.71 21.08 27.34 91.02 457.84 4.71 6.58 4.95 6.69 8.84 

CLASS 2 -0.35 4.49 20.20 25.85 88.17 449.51 4.49 6.32 4.71 6.53 8.76 


Bonds 95% 

Cash 5% 

6/30/09 






CLASS 1 1.13 7.31 22.19 28.82 76.33 279.74 7.31 6.91 5.19 5.84 6.80 

CLASS 2 1.01 7.11 21.28 27.27 71.95 269.76 7.11 6.64 4.94 5.57 6.66 

CLASS 4 1.00 7.02 21.67 28.27 75.59 278.13 7.02 6.76 5.11 5.79 6.77 


Bonds 95% 

Cash 5% 




Templeton Global Bond Securities Fund 94 6/30/09 


Fixed Income 

MAIN INVESTMENTS37 Seeks high current income, consistent 

with preservation of capital, with 

capital appreciation as a secondary 

consideration. The fund normally 

invests at least 80% of its net assets in 

bonds, which include debt securities 

of any maturity. The fund normally 

invests at least 40% of its net assets in 

foreign securities, may invest a portion 

of its total assets in bonds rated below 

investment grade and a significant portion 

of its assets in emerging markets. 

Formerly Templeton Global Income Securities 

Fund. Effective 5/1/09, the fund’s name and 

investment strategy changed. The investment 

goal remained the same. 



Fund No. 741 742 

CUSIP 355 150 707 355 150 566 

Inception1 1/24/89 1/6/99 

CLASS 4 

Fund No. 787 

CUSIP 355 151 887 



May 1 

PORTFOLIO MANAGER/FUND TENURE 



84 

Michael Hasenstab, Ph.D., 2002 









CLASS 1 7.57 13.08 36.45 63.34 155.25 397.11 13.08 10.92 10.31 9.82 8.17 

CLASS 2 7.45 12.79 35.41 61.24 148.96 384.06 12.79 10.63 10.03 9.55 8.02 

CLASS 4 7.41 12.66 35.86 62.63 154.14 394.96 12.66 10.76 10.22 9.78 8.14 



FUND FACTS 



$49,711 $48,406 $49,496 


$168.2 $977.7 $72.6 

0.58% 0.83% 0.93% 



TOP 10 HOLDINGS7 Government of Mexico, 10.00% 5.48% 



Government of Russia, 144A 2.90 

Government of Mexico, M 10 2.47 


Government of Malaysia 2.31 

Government of Sweden 2.27 


Government of Russia, senior bond 2.11 


Asia 32.78% 





Separate Accounts 

Franklin Templeton Portfolio Advisors, Inc. (FTPA) offers private asset manage ment to individuals and institutional clients through financial 

advisors associated with wirehouse firms, regional broker/dealers, independent broker/dealers and banks (“Sponsors”). FTPA consists of 

two distinct firms: Franklin Portfolio Advisors (FPA, focused on U.S. equities and fixed income portfolios) and Templeton Portfolio Advisors 

(TPA, focused on international and global portfolios). 

Sponsor Availability † 

All Cap Growth 

FRANKLIN 

PORTFOLIO ADVISORS 

Multi Strategy Municipal 

Fixed Income 

Intermediate Fixed Income 

Intermediate Municipal 

Fixed Income 

INVESTMENT MINIMUM: ■ $40,000 ■ $45,000 ▲ $50,000 ▲ $75,000 ● $100,000 ● $150,000 ◆ $250,000 ◆ $1 Million/$5 Million 1 

†For more information on other portfolios, including FT Global Government Fixed Income; TPA 

Developed Markets ex-U.S. Equity; FT U.S. Core Fixed Income; FT U.S. Opportunistic Core Plus 

Fixed Income and FTCI U.S. Opportunistic Municipal Fixed Income, please contact your 

Consulting Services team at (800) 822-8464. 

Large Cap Value Balanced 

Large Cap Value 

Balanced–Municipal 

Large Cap Value– 

Yield Focus 

Mid Cap Growth 

Small Cap Growth 

Global Balanced 

Ameriprise 

Premier Portfolio Services ● 3 ◆ ● 

Global Equity 

Charles Schwab 

Access Program 

Edward Jones 

● ◆ ● ● ● 

Managed Account Program 

Fidelity 

◆ ● ● 

Network Program ● ●3 Goldman Sachs 

◆ ● ◆ ● ● ● ● 

Private Money Manager Program 

Linsco Private Ledger 

◆ 

Select Program Recommended 

Lockwood 

◆ ● 

Command Program 

Merrill Lynch 

● ● ◆ ● ● ● 

Consults ◆ ◆ ● 

Strategic Portfolio Advisor ◆ ◆ ◆ 

UMA 

Morgan Stanley Smith Barney 

◆ 

Access ● ●3◆● ◆ ● ● ● ● 

Vision ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ 

Personal Portfolio ■ ▲2 ▲ ● ■ 

Fiduciary Services ● ● ◆ ● ◆ ● ● ● ● 

Consulting and Evaluation Services ◆ ◆ 

Select UMA 

Prudential 

▲ ● ▲ 

Managed Asset Program 

UBS 

● ◆ ● ● 

Access 

Wells Fargo Advisors 

◆ 

Wells Select ●3 ◆ ● ◆ ● ● 

Overland Select ●3 ◆ ● ◆ ● ● 

Strategic Portfolio ◆3 ● 

Masters ● ◆ ● ● 

Private Advisor Network ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ 

TEMPLETON 

PORTFOLIO ADVISORS 

International Equity 

6/30/09 

1. $1 Million for Standard Advisory Accounts; $5 Million for DVP/Best Execution Accounts. 

2. The FPA U.S. Government Bond Fixed Income portfolio is available as a sleeve in Morgan 

Stanley’s PPA program 

3. The FPA Investment Grade Credit portfolio is also available . 


SEPARATE ACCOUNTS

SEPARATE ACCOUNTS 

FRANKLIN PORTFOLIO ADVISORS Data as of 3/31/09 

All Cap Growth 

BENCHMARK 

Russell 3000 ® Growth Index 

INVESTMENT PHILOSOPHY 

FPA utilizes Franklin’s bottom-up, 

fundamental approach to selecting 

securities, whose market valuation 

FPA believes does not properly reflect 

future growth prospects, may yield 

above-average, risk adjusted rates 

of return over the long term. 

INVESTMENT PROCESS 

FPA’s portfolio managers and 

analysts apply a disciplined, 

bottom-up approach to selecting 

stocks at all capitalization levels 

and examine the entire structure 

of a company and follow it through 

its growth cycle. 

INVESTMENT MINIMUM 

$100,000 

INCEPTION 

March 31, 2006 

LEAD PORTFOLIO MANAGER 84 


Years with Firm: 23 

Years Industry Experience: 29 

For disclosure and footnotes, please see 

page 120. 

PERFORMANCE SUMMARY 1 

TOTAL RETURNS (%) 2 

“PURE” GROSS 

NET 

BENCHMARK 

1-QTR 1-YR 3-YR INCEPTION 

-4.9 -30.6 -11.1 -10.5 

-5.3 -31.7 -12.7 -12.0 

-4.5 -34.4 -11.7 -10.9 

HISTORICAL PERFORMANCE (USD %) 

YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 


— — — — — — 3.8 15.2 -36.3 -4.9 

NET 

BENCHMARK 

— — — — — — 3.4 13.3 -37.4 -5.3 

-22.4 -19.6 -28.0 31.0 6.9 5.2 9.5 11.4 -38.4 -4.5 

MODEL PORTFOLIO CHARACTERISTICS 

Number of Stock Holdings 78 

Weighted Average Market Cap (US$m) 3 30,308 

Weighted Average Forward Price to Earnings 3 15.6x 

Weighted Average Price to Book 3 2.7x 

Weighted Average Price to Sales 3 3.3x 

Weighted Average Long Term Debt to Capital 23.3% 

Weighted Average Price to Cash Flow 3 9.2x 

Weighted Average Historical 3-Year Sales Growth 23.0% 

Weighted Average Historical 3-Year Earnings 

Per Share Growth 24.2% 

Trailing 12-Month Portfolio Turnover 37.6% 

Expected Annual Turnover Range 35%–65% 

For more performance information, please contact your Consulting Services team at 1-800/822-8464. 




NET 

BENCHMARK 

SECTOR BREAKDOWN 4 

Software and Services 5 19.7% 

Technology Hardware 5 14.2 

Semiconductors 5 2.6 



Energy 10.0 


Materials 4.7 




Utilities 0.5 


Intermediate Fixed Income 

BENCHMARK 

Barclays Capital U.S. Intermediate 

Government/Credit Bond Index 


Franklin Portfolio Advisors invests 

in high quality bonds, taking advantage 

of relative valuation differences 

between asset classes, sectors, 

issuers and individual bond issues, 

with the objective of producing a 

high level current income and generating 

total return opportunities. 


Our intermediate fixed income 

team follows a disciplined, client 

specific process that includes using 

proprietary, relative analysis to 

make top-down allocation decisions 

among U.S. government bonds, 

U.S. agency securities and corporate 

bonds. 


$100,000 

INCEPTION 

March 31, 1994 






page 120. 

1-QTR 1-YR 3-YR 5-YR 10-YR 

-0.4 2.8 6.0 3.8 5.3 

-0.6 1.7 4.9 2.7 4.3 

-0.1 2.0 5.6 3.7 5.4 

HISTORICAL PERFORMANCE (%) 

YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 


10.2 7.5 10.3 3.6 3.1 0.6 4.2 7.8 6.1 -0.4 

NET 

9.2 6.5 9.2 2.5 2.0 -0.5 3.1 6.6 5.0 -0.6 

BENCHMARK 

10.1 9.0 9.8 4.3 3.0 1.6 4.1 7.4 5.1 -0.1 


Weighted Average Coupon 5.5% 

Weighted Average Current Yield 5.3% 

Weighted Average Yield to Worst 3.7% 

Weighted Average Yield to Maturity 3.7% 

Weighted Average Price $103.98 

Weighted Average External Bond Rating AA2/AA3 

Weighted Average Maturity 4.5 Years 

Weighted Average Modified Adjusted Duration 3.6 Years 


Number of Bond Holdings Range 10–25 



Investment Grade Credit 47.4% 

U.S. Treasury 26.6 

U.S. Government Agency 26.0 



Intermediate Municipal Fixed Income 

BENCHMARK 

Barclays Capital Bond Index 


Investing in current coupon bonds 

may provide a steady stream of 

income and is intended to give our 

clients the highest possible tax-free 

income coupled with preservation 

of capital. 


Franklin Portfolio Advisors’ munic ipal 

bond team evaluates the structure 

and liquidity of municipal 

bonds and conducts a stringent 

credit analysis to identify securities 

selling at prices they consider 

attractive. 


$250,000 

INCEPTION 

March 31, 1995 






page 120. 




NET 

INDEX 


2.8 4.3 4.5 3.6 4.7 

2.6 3.5 3.7 2.7 3.8 

4.2 2.3 3.2 3.2 4.6 


YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 


10.7 5.0 9.5 5.3 3.5 2.4 4.3 4.6 1.7 2.8 

NET 

INDEX 

9.7 4.1 8.5 4.4 2.7 1.5 3.5 3.7 0.9 2.6 

11.7 5.1 9.6 5.3 4.5 3.5 4.9 3.4 -2.5 4.2 


Weighted Average Coupon 4.6% 




Weighted Average Price $103.14 

Weighted Average External Bond Rating AA2 





For more information, please contact your Consulting Services team at 1-800/822-8464. 


Education 37.5% 

Capital Improvements 34.9 



Public Power 3.4 

Other 3.0 


Mid Cap Growth 

BENCHMARK 

Russell Midcap Growth Index 


Employing a disciplined, long-term, 

bottom-up approach to mid-cap 

growth equity investing, backed by 

extensive fundamental analysis, may 

produce favorable results over time. 


Franklin Portfolio Advisors’ port folio 

managers and analysts apply a 

disciplined, bottom-up approach to 

selecting stocks, within the market 

cap range of the Russell Midcap 

Growth Index. 


$100,000 

INCEPTION 

May 31, 2005 






page 120. 

PERFORMANCE SUMMARY1 TOTAL RETURNS (%) 2 

1-QTR 1-YR 3-YR INCEPTION 


-1.6 -31.3 -11.2 -4.2 

NET 

-2.1 -32.7 -13.0 -5.9 

INDEX 

-3.4 -39.6 -14.9 -7.4 


YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 


— — — — — — 9.9 14.0 -39.6 -1.6 

NET 

— — — — — — 8.1 11.8 -40.8 -2.1 

INDEX 

-11.8 -20.2 -27.4 42.7 15.5 12.1 10.7 11.4 -44.3 -3.4 



Weighted Average Dividend Yield (gross) 6 0.6% 

Weighted Average Market Cap (US$m) 6 4,795 

Weighted Average Current Price to Earnings 6 14.8x 

Weighted Average Forward Estimated Price to Earnings 6 14.8x 


Weighted Average Price to Sales 2.7x 

Weighted Average Long-Term Debt to Capital 26.7% 

Weighted Average Estimated 3–5 Year EPS Growth 16.9% 


Annual Turnover Range 50%–100% 



Software and Services 5 14.6% 

Technology Hardware 5 6.0 





Energy 10.0 




Materials 1.1 

Utilities 1.4 


SEPARATE ACCOUNTS



Multi Strategy Municipal Fixed Income 

BENCHMARK 

Barclays Capital 

Municipal Bond Index 


We believe a portfolio composed of 

individual current coupon bonds 

and a pooled investment vehicle 

that invests in high-yield, tax free 

municipal securities will provide a 

steady stream of income and is 

intended to give the highest possible 

tax-free income coupled with 

preservation of capital. 


Approximately 60% of the port folio 

invests in individual municipal bonds 

managed by Franklin Portfolio 

Advisors and 40% of the portfolio 

invests in a high yield, tax-free 

pooled investment vehicle that 

invests in high-yield, tax-free 

munic ipal securities managed by 

FPA’s affiliate, Franklin Advisers, Inc. 


$250,000 

INCEPTION 

September 30, 2006 

LEAD PORTFOLIO MANAGER84 Frank Felicelli, CFA 




page 120. 




NET 

BENCHMARK 

1-QTR 1-YR INCEPTION 

4.6 -1.0 0.9 

4.4 -1.8 0.1 

4.2 2.3 2.5 

HISTORICAL PERFORMANCE (USD %) 

YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 


— — — — — — — 2.6 -5.9 4.6 

NET 

— — — — — — — 1.8 -6.7 4.4 

BENCHMARK 

11.7 5.1 9.6 5.3 4.5 3.5 4.9 3.4 -2.5 4.2 


Weighted Average External Bond Rating A1/A2 




Weighted Average Coupon 7 5.1% 



Weighted Average Price 8 $96.42 

Weighted Average Gross Yield 9 5.4% 







NET 

INDEX 

FINANCING 4 

Revenue Bonds 65.2% 

General Obligations 30.9 

Certificates of Participation 4.0 


Small Cap Growth 

BENCHMARK 

Russell 2000 ® Growth Index 


Investing early in companies that 

are sector leaders in their emerging 

growth phase with sustainable, 

competitive advantages can achieve 

superior, long-term results. 


Franklin Portfolio Advisors’ port folio 

managers and analysts apply 

a disciplined, bottom-up approach 

to selecting small-cap stocks. They 

look for companies demonstrating 

distinct competitive advantages and 

the potential for sustainable growth 

that may not be reflected in current 

valuations. 


$100,000 

INCEPTION 

December 31, 1997 






-13.0 -34.1 -15.2 -4.6 4.4 

-13.4 -35.1 -16.4 -5.9 2.7 

-9.7 -36.4 -16.2 -5.4 -1.6 


YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 


9.3 -8.5 -25.8 42.3 19.8 4.7 11.0 3.5 -33.3 -13.0 

NET 

6.8 -10.0 -27.0 40.0 18.0 3.3 9.3 2.1 -34.3 -13.4 

INDEX 

-22.4 -9.2 -30.3 48.5 14.3 4.2 13.4 7.1 -38.5 -9.7 



Weighted Average Dividend Yield 10 1.1% 

Weighted Average Market Cap (US$m) 10 609 

Weighted Average Current Price to Earnings 10 13.3x 

Weighted Average Forward Price to Earnings 10 14.1x 


Weighted Average Price to Sales 10 1.2x 

Weighted Average Debt to Capital 20.7% 

Weighted Average Estimated Long-Term Earnings Growth 15.7% 




page 120. For more performance information, please contact your Consulting Services team at 1-800/822-8464. 


Technology Hardware 5 19.4% 

Software and Services 5 11.0 


Heath Care 17.3 





Energy 3.7 


Materials 2.4 


TEMPLETON PORTFOLIO ADVISORS Data as of 3/31/09 

Global Equity 

BENCHMARK 

MSCI AC World Index 


Employing a value-oriented, 

bottom-up, patient approach to 

investing, Templeton Portfolio 

Advisors believes that undervalued 

securities may be recognized by 

the market over time. 


Templeton Portfolio Advisors’ 

approach begins with over 10,000 

companies. Analysts perform indepth 

analysis on stocks, which 

are further scrutinized by research 

teams. Approved stocks are added 

to the Bargain List and considered 

for portfolio investment. 


$100,000 

INCEPTION 

February 29, 1992 

LEAD PORTFOLIO MANAGER84 Patrick J. McCall, CFA 




page 120. 




NET 

INDEX 


-12.4 -38.5 -11.1 -1.6 0.8 

-12.8 -39.7 -12.8 -3.4 -1.2 

-10.6 -42.7 -12.8 -2.4 -1.3 


YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 

“PURE” GROSS -3.9 -9.7 -21.3 39.1 15.4 9.1 24.4 9.7 -37.3 -12.4 

NET 

-5.9 -11.5 -23.0 36.4 13.4 7.1 22.1 7.7 -38.5 -12.8 

INDEX 

-13.9 -15.9 -19.0 34.6 15.8 11.4 21.5 12.2 -41.9 -10.6 


Number of Stock Holdings11 70–100 

Median Market Cap (US$m) 13,797 

Weighted Average Dividend Yield 3.9% 

Weighted Average Price to Earnings 10.1x 

Weighted Average Price to Book 1.4x 

Weighted Average Price to Cash Flow 4.8x 

Weighted Average Market Cap (US$m) 44,631 





NET 

INDEX 

GEOGRAPHIC BREAKDOWN 13 

Europe 48.6% 


Asia ex-Japan 7.3 

Japan 5.7 

Mid East/Africa 1.9 



Total Emerging Markets 8.5 

TEMPLETON PORTFOLIO ADVISORS Data as of 3/31/09 

International Equity 

BENCHMARK 

MSCI AC World ex-U.S. Index 


Employing a value-oriented, 

bottom-up, patient approach to 

investing, Templeton Portfolio 

Advisors believes that undervalued 

securities may be recognized by the 

market over time. 


Templeton Portfolio Advisors’ 

approach begins with over 10,000 

companies. Analysts perform indepth 

analysis on stocks, which are 

further scrutinized by research 

teams. Approved stocks are added 

to the Bargain List and considered 

for portfolio investment. 


$100,000 

INCEPTION 

February 29, 1992 

LEAD PORTFOLIO MANAGER84 Patrick J. McCall, CFA 




page 120. 



-14.2 -41.0 -11.0 -0.1 1.3 

-14.5 -41.9 -12.2 -1.4 0.0 

-10.6 -46.2 -12.8 -0.2 0.9 


YTD 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 

“PURE” GROSS -6.2 -12.7 -22.6 41.6 20.3 13.0 25.7 15.0 -39.1 -14.2 

NET 

-7.3 -13.7 -23.5 39.8 18.8 11.7 24.2 13.5 -40.0 -14.5 

INDEX 

-15.1 -19.5 -14.7 41.4 21.4 17.1 27.2 17.1 -45.2 -10.6 


Number of Stock Holdings12 60–100 

Median Market Cap (US$m) 12,682 

Weighted Average Dividend Yield 4.8% 

Weighted Average Price to Earnings 9.8x 

Weighted Average Price to Book 1.3x 

Weighted Average Price to Cash Flow 4.4x 

Weighted Average Market Cap (US$m) 42,074 



GEOGRAPHIC BREAKDOWN 13 

Europe 72.7% 

Asia ex-Japan 13.0 

Japan 8.8 

Mid East/Africa 2.5 



North America ex-U.S. 0.3 

Total Emerging Markets 12.2 


SEPARATE ACCOUNTS


DISCLOSURES 

FRANKLIN PORTFOLIO ADVISORS 

Franklin Portfolio Advisors claims compliance with the Global Investment Performance 

Standards (GIPS ® ). 

Franklin Portfolio Advisors (“FPA” or the “firm”) manages domestic equity and fixed income 

portfolios for high-net-worth individuals and institutional clients, applying a bottom-up, 

research-oriented process that utilizes proprietary screening models and top-down risk controls 

in managing its portfolios. FPA is a division of Franklin Templeton Portfolio Advisors, Inc. 

(“FTPA”), a subsidiary of Franklin Resources, Inc. (“FRI”). In addition to relying on its own 

portfolio managers and analysts, FPA utilizes the experience, resources, and extensive research 

capabilities of affiliated Franklin entities (together, the firm “Franklin”), to conduct rigorous 

fundamental and quantitative analysis for equity, fixed income (taxable and tax-free) and other 

related strategies. At FPA, brokerage, administrative, custodial and investment management 

fees are charged together as a percentage of the portfolios’ assets (comprehensive fee or “wrap 

fee”) or may in some instances be charged separately (unbundled fee). 

The FPA All Cap Growth composite consists of all fully discretionary accounts managed by FPA 

with an all-cap growth investment objective and for which the brokerage, custodial, and 

investment management fees are charged together as a percentage of the portfolios’ assets 

(“wrap fee”). The primary benchmark for this composite is the Russell 3000 ® Growth Index. 

The FPA Intermediate Fixed Income composite consists of all fully discretionary portfolios 

managed by FPA with an intermediate fixed income investment objective and for which the 

brokerage, custodial, and investment management fees are charged together as a percentage 

of the portfolios’ assets (“wrap fee”). The primary benchmark for this composite is the Barclays 

Capital U.S. Intermediate Government/Credit Bond Index. 

The FPA Intermediate Municipal Fixed Income composite consists of all fully discretionary 

portfolios managed by FPA with an intermediate municipal fixed income investment objective 

and for which the brokerage, custodial, and investment management fees are charged together 

as a percentage of the portfolios’ assets (“wrap fee”). The primary benchmark for this 

composite is the Barclays Capital Municipal Bond Index. 

The FPA Large Cap Value Balanced composite consists of all fully discretionary accounts 

managed by FPA with a large-cap value balanced investment objective and for which the 

brokerage (including trading expenses), administrative, custodial, and investment 

management fees are charged separately (“wrap fee”). 

The FPA Large Cap Value Balanced-Municipal composite consists of all fully discretionary 

accounts managed by FPA with a large-cap value balanced-municipal investment objective 

and for which the brokerage (including trading expenses), administrative, custodial, and 

investment management fees are charged separately (“wrap fee”). 

The FPA Large Cap Value Yield-Focus composite consists of all fully discretionary accounts 

managed by FPA with a large-cap value-yield focus investment objective and for which the 

brokerage (including trading expenses), administrative, custodial, and investment 

management fees are charged separately (“wrap fee”). 

The FPA Mid Cap Growth composite consists of all fully discretionary accounts managed by 

FPA with a mid-cap growth investment objective and for which the brokerage, custodial, and 


(“wrap fee”). The primary benchmark for this composite is the Russell Midcap TM Growth Index. 

The FPA Multi Strategy Municipal Fixed Income composite consists of all fully discretionary 

portfolios managed by FPA with a high yield fixed income investment objective and for which 

the brokerage, custodial, and investment management fees are charged together as a 

percentage of the portfolios’ assets (“wrap fee”). The strategy is a blend of an existing FPA 

strategy, represented by the FPA Intermediate Municipal Fixed Income composite described 

below, and the Franklin High Yield Tax-Free composite, which consists of a single pooled 

investment vehicle managed by Franklin (another firm within the Franklin Templeton complex), 

which invests in high yield tax-free municipal securities. The strategy consists of a 60% 

allocation to municipal fixed income and a 40% allocation to high yield municipal fixed income. 

Brokerage, custodial, and investment management fees will be charged together as a 

percentage of the portfolios’ assets (“wrap fee”) for this strategy. The primary benchmark for 

this composite is the Barclays Capital Municipal Bond Index. 

The FPA Small Cap Growth composite consists of all fully discretionary accounts managed by 

FPA with a small-cap growth investment objective and for which the brokerage, custodial, and 


(“wrap fee”). The primary benchmark for this composite is the Russell 2000 ® Growth Index. 

All returns are presented in U.S. dollars and have been calculated using time-weighted total rates 

of return. Net-of-fees returns have been reduced by the total “wrap fee” which includes brokerage 

fees (including trading expenses), administrative, custodial, and investment management fees. 

Gross performance presented is “pure” gross-of-fees returns, which are before wrap fees, 

including brokerage fees related to trading expenses. “Pure” gross-of-fees returns are presented 

as supplemental information only. Both net- and “pure” gross-of-fees returns assume the 

reinvestment of dividends, interest, and realized and unrealized capital gains and losses. Past 

performance does not guarantee future results and results may differ over future time periods. 

The performance presented for Franklin Portfolio Advisors is in compliance with GIPS ® from 

January 1, 2002. FPA is not claiming compliance for the performance prior to that date on the 

basis that FPA cannot rely fully on the accuracy of the omnibus account information supplied 

by the broker/sponsors for those earlier years. 

To receive a complete list and description of FPA’s composites and/or a presentation that 

adheres to the GIPS ® standards contact your Franklin Templeton Portfolio Advisors 

representative at (800) 822-8464 or visit www.franklintempleton.com/separateaccounts. 

6/30/09 

TEMPLETON PORTFOLIO ADVISORS 

Templeton Portfolio Advisors claims compliance with the Global Investment 

Performance Standards (GIPS ® ). 

Templeton Portfolio Advisors (“TPA”) manages portfolios for high-net-worth individuals and 

institutional clients, applying a bottom-up, value-oriented, long-term investment style, focusing on 

global and non-U.S. markets. In addition to relying on its own portfolio managers and analysts, 

TPA utilizes the experience, resources, and extensive research capabilities of affiliated Templeton 

entities (together, the firm “Templeton”) that apply the same bottom-up, value-oriented global 

investment style. At TPA, brokerage, administrative, custodial and investment management fees 

may be charged together as a percentage of the portfolios’ assets (comprehensive fee or “wrap 

fee”) or may in some instances be charged separately (unbundled fee). 

The TPA International Equity composite composite consists of all of the fully discretionary wrapfee 

portfolios which have a non-U.S. equity investment objective and for which the brokerage 

(including trading expenses), administrative, custodial, and investment management fees are 

charged together as a percentage of the portfolio’s assets (known as a “wrap fee” or bundled 

fee). The primary benchmark for this composite is the MSCI All Country World ex-U.S. Index. 

The TPA Global Equity composite composite consists of all of the fully discretionary wrap-fee 

portfolios which have a global (U.S. and non-U.S.) equity investment objective and for which 

the brokerage (including trading expenses), administrative, custodial, and investment 

management fees are charged together as a percentage of the portfolio’s assets (known as a “wrap 

fee” or bundled fee). The primary benchmark for this composite is the MSCI All Country World Index. 

All returns are presented in U.S. dollars and have been calculated using time-weighted total 

rates of return. Net-of-fees returns have been reduced by the total “wrap fee” which includes 

brokerage fees (including trading expenses), administrative, custodial, and investment 

management fees. Gross performance returns presented are “pure” gross-of-fees returns, 

which are before wrap fees, including brokerage fees related to trading expenses. “Pure” grossof-fees 

returns are presented as supplemental information only. Both net- and “pure” gross-offees 

returns assume the reinvestment of dividends, interest, and realized and unrealized 

capital gains and losses. Past performance does not guarantee future results and results 

may differ over future time periods. 

All MSCI data is provided “as is.” The composite described herein is not sponsored or endorsed 

by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any 

kind in connection with the MSCI data or the composite described herein. Copying or 

redistributing MSCI data is strictly prohibited. 

To receive a complete list and description of TPA’s composites and/or a presentation that 

adheres to the GIPS ® standards contact your Franklin Templeton Portfolio Advisors 

representative at (800) 822-8464 or visit www.franklintempleton.com/separateaccounts. 

FOOTNOTES 

1. The information and opinions stated are based on the composite unless otherwise indicated. 

2. Returns over one year are annualized. 

3. For the portfolio, P/B and P/CF calculations for the weighted average use harmonic means. 

Values less than 0.01 (i.e., negative values) are excluded and values in excess of 200 are 

capped at 200. P/E calculations for the weighted average use harmonic means. P/S 

calculations for the weighted average cap values in excess of 200 at 200. For the 

benchmark, no limits are applied to these ratios. Market capitalization statistics are 

indicated in the base currency for the strategy presented. 

4. Figures may not total 100% due to rounding. Portfolio characteristics and sector 

breakdown are based on an FPA model portfolio unless otherwise indicated. 

5. A GICS industry group under the GICS Information Technology Sector. 

6. For the portfolio, P/B calculations for the weighted average use harmonic means. Values 

less than 0.01 (i.e., negative values) are excluded and values in excess of 200 are capped 

at 200. P/E calculations for the weighted average use harmonic means. Yields above 

100% are also excluded. For the benchmark, no limits are applied to these ratios. Market 

capitalization statistics are indicated in the base currency for the strategy presented. 

7. The calculation for the weighted average coupon includes the imputed coupon rate of zero 

coupon bonds. If the imputed coupons were not included, the coupon rate would be 4.9%. 

8. The calculation for the weighted average price is based on market value weights. If the 

prices were weighted by par, the weighted average price would be $91.51. 

9. Weighted average gross yield is calculated by adding 60% of the current yield of Franklin 

Portfolio Advisors’ Intermediate Municipal Fixed Income accounts that opened 60 days prior to 

March 31, 2009 and 40% of the gross distribution rate of the Franklin pooled investment 

vehicle as of March 31, 2009, which is calculated by taking the net distribution rate of the 

Franklin pooled investment vehicle and adding back the annual expense ratio. The client’s 

return will be reduced by investment management fees and other expenses. 

10. For the portfolio, P/B calculations for the weighted average use harmonic means. Values 

less than 0.01 (i.e., negative values) are excluded and values in excess of 200 are capped 

at 200. P/E calculations for the weighted average use harmonic means. P/S calculations 

for the weighted average cap values in excess of 200 at 200. Yields above 100% are also 

excluded. For the benchmark, no limits are applied to these ratios. Market capitalization 

statistics are indicated in the base currency for the strategy presented. 

11. ADR portfolios hold 70-90 stocks; ORD portfolios hold approximately 100 stocks. 

12. ADR portfolios hold 60-80 stocks; ORD portfolios hold approximately 100 stocks. 

13. Figures may not total 100% due to rounding. Portfolio Characteristics and geographic 

weightings are based on a TPA composite. 


529 COLLEGE SAVINGS PLAN 

Franklin Templeton 529 College Savings Plan, Offered Nationwide 

by the New Jersey Higher Education Student Assistance Authority 1 

Franklin Templeton 529 College Savings Plan offers several different portfolios to help tailor a diversified college 

investing strategy to fit the risk/reward profile of almost any investor. 

INVESTMENT OPTIONS 

OPTION 1 | Age-Based Asset Allocation 2 

As a child grows, the Age- 

Based Asset Allocation will 

automatically reallocate a 

percentage of assets out of 

equity-based funds into more 

conservative, income-seeking 

funds (such as bond and 

money market funds). By 

the time college is around 

the corner, a greater portion 

of assets will be in the more 

conservative, lower-risk 

investments. 

OPTION 2 | Objective-Based Asset Allocations 2 

Invest your clients’ assets 

accord ing to the amount 

of investment risk they’re 

comfortable taking and the 

return potential they prefer. 

You may choose among five 

port folios, with objectives 

ranging from aggressive 

to conservative. 

Growth 529 Portfolio 

Domestic Equity 70% 

International Equity 30% 

Newborn–8 Years 



Age 13–16 Years 

Income 40% 



Cash 10% 

Founding Funds 529 Portfolio 


Income Fund 33 1 ⁄3% 



Mutual 

Shares Fund 33 1 ⁄3% 

Growth & Income 529 Portfolio 

Income 40% 



Cash 10% 

Age 9–12 Years 

Income 20.0% 

Domestic Equity 52.5% 

International Equity 22.5% 

Cash 5.0% 

Age 17+ Years 

Income 60.0% 

Domestic Equity 17.5% 

International Equity 7.5% 

Cash 15.0% 

Corefolio ® 529 Portfolio 





Mutual 

Shares Fund 25% 

Income 529 Portfolio 

Income 80% 

Cash 20% 

6/30/09 


529 COLLEGE SAVINGS PLAN


Franklin Templeton 529 College Savings Plan, cont’d. 

INVESTMENT OPTIONS, cont’d. 

OPTION 3 | Individual Portfolios 2 

This option allows you to work 

with your clients to assemble an 

individual portfolio and create 

an asset allocation mix to suit 

their college investing needs. 

Your clients may choose to invest 

among as many port folios 

as desired. 

PRODUCT INFORMATION 

Global 

Templeton Growth 529 Portfolio 

Growth 

Franklin Growth 529 Portfolio 

Franklin Small-Mid Cap Growth 529 Portfolio 

Value 

Mutual Shares 529 Portfolio 

Features 

Available Share Classes A, B or C 

Minimum Initial Investment $250 

Subsequent Minimum Investment $50 

Minimum Initial Investment with Automatic Investment Plan $50 

Maximum Contribution Limit $305,000 

Hybrid 

Franklin Income 529 Portfolio 

Principal Preservation 

Stable Value 529 Portfolio3 Index Style 

S&P 500 Index 529 Portfolio 

Investment Options 5 Objective-Based Asset Allocations, 4 Age-Based Asset Allocations, 

7 Individual Portfolios 

6/30/09 

Annual Account Fee $25 annual fee. Waived for account balances greater than $25,000, 

Automatic Investment Plans, or if contributor or beneficiary is a NJ resident. 

Program Management Fee 40 basis points (0.40%) 

State Residency Requirement None 

1. Offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Templeton Distributors, Inc., an affiliate of Franklin 

Resources, Inc., which operates as Franklin Templeton Investments. No federal or state guarantee. Principal value may be lost, and investing in the plan does not guarantee admission to college 

or sufficient funds for college. Please refer to the Investor Handbook for more complete information. 

2. The plan is managed by Franklin Advisers, Inc., an affiliate of Franklin Templeton Distributors, Inc. Plan portfolios generally invest in mutual funds managed by affiliates of Franklin Advisers, 

Inc. An investment in Franklin Templeton 529 College Savings Plan is an investment in a municipal security that may invest in one or more underlying mutual funds. It is not an investment in 

shares of the underlying mutual fund(s). 

3. Although the Stable Value 529 Portfolio seeks to preserve the value of investments, it is possible to lose money by investing in the portfolio. 



PORTFOLIO PERFORMANCE 

The table below shows total returns for Class A, B and C shares of plan portfolios. Performance shown 

includes periods with unusually favorable conditions in some markets. No assurance can be given that such 

performance or market conditions will be repeated in the future. Ongoing market volatility can dramatically 

impact short-term returns. Current performance may differ from figures shown. 

6/30/09 

ALL SALES CHARGES NO SALES CHARGES 

AVERAGE ANNUAL TOTAL RETURN4, 6 5, 6 


AS OF JUNE 30, 2009 AS OF JUNE 30, 2009 

529 PORTFOLIO 

Since Since Inception Total Annual 

2 1-Year 3-Year 5-Year Inception7 1-Year 3-Year 5-Year Inception7 Date7 AGE-BASED ASSET ALLOCATION 

Newborn–8 Years 

Operating Expenses 

11 

Class A 

Class B8 Class C 

Age 9–12 Years11 Class A 


Age 13–16 Years11 Class A 


Age 17+ Years11 Class A 


OBJECTIVE-BASED ASSET ALLOCATIONS 

Founding Funds 529 Portfolio 

Class A 


Corefolio ® 529 Portfolio9 Class A 


Growth 529 Portfolio11 Class A 


Growth & Income 529 Portfolio11 Class A 


Income 529 Portfolio 

Class A 

Class B8 -28.61% -8.61% -1.29% 4.17% -24.27% -6.79% -0.12% 5.15% 3/26/03 1.48% 

-27.88% -8.44% -1.28% 4.35% -24.87% -7.50% -0.88% 4.35% 3/28/03 2.23% 

-25.54% -7.45% -0.84% 4.58% -24.79% -7.45% -0.84% 4.58% 3/31/03 2.23% 

-22.01% -5.47% 0.03% 4.23% -17.27% -3.58% 1.22% 5.22% 3/26/03 1.38% 

-21.24% -5.32% 0.04% 4.32% -17.96% -4.35% 0.44% 4.32% 4/2/03 2.13% 

-18.77% -4.34% 0.43% 4.56% -17.95% -4.34% 0.43% 4.56% 3/31/03 2.13% 

-14.37% -2.19% 1.36% 4.32% -9.14% -0.24% 2.56% 5.31% 3/31/03 1.30% 

-13.46% -2.01% 1.39% 4.29% -9.85% -1.01% 1.77% 4.29% 4/8/03 2.05% 

-10.68% -0.98% 1.77% 4.32% -9.78% -0.98% 1.77% 4.32% 4/9/03 2.05% 

-9.19% 0.00% 1.93% 3.03% -3.63% 1.98% 3.15% 4.03% 5/5/03 1.27% 

-8.20% 0.24% 2.00% 3.33% -4.38% 1.23% 2.36% 3.33% 5/1/03 2.02% 

-5.33% 1.21% 2.36% 3.60% -4.37% 1.21% 2.36% 3.60% 4/9/03 2.02% 

-28.28% -9.83% — -5.19% -23.89% -8.04% — -3.78% 6/27/05 1.32% 

-27.50% -9.63% — -4.94% -24.48% -8.71% — -4.46% 6/27/05 2.07% 

-25.26% -8.72% — -4.48% -24.50% -8.72% — -4.48% 6/27/05 2.07% 

-29.29% -10.28% -3.08% 2.69% -24.97% -8.49% -1.93% 3.67% 3/25/03 1.35% 

-28.47% -10.07% -3.06% 2.62% -25.49% -9.15% -2.67% 2.62% 4/8/03 2.10% 

-26.21% -9.14% -2.65% 2.92% -25.47% -9.14% -2.65% 2.92% 3/31/03 2.10% 

-28.49% -8.51% -1.23% 4.20% -24.14% -6.69% -0.06% 5.19% 3/25/03 1.48% 

-27.71% -8.32% -1.20% 4.42% -24.70% -7.38% -0.80% 4.42% 3/25/03 2.23% 

-25.48% -7.40% -0.83% 4.47% -24.73% -7.40% -0.83% 4.47% 3/28/03 2.23% 

-14.93% -2.46% 1.21% 3.99% -9.72% -0.51% 2.41% 4.98% 3/25/03 1.34% 

-14.01% -2.21% 1.29% 4.15% -10.42% -1.21% 1.66% 4.15% 4/3/03 2.09% 

-11.33% -1.23% 1.65% 3.96% -10.43% -1.23% 1.65% 3.96% 4/25/03 2.09% 

-1.18% 2.98% 2.66% 2.77% 3.20% 4.48% 3.88% 3.75% 4/8/03 1.21% 

-1.52% 2.76% 2.77% 2.99% 2.48% 3.70% 3.12% 2.99% 4/22/03 1.96% 

Class C 

1.47% 3.69% 3.09% 3.02% 2.47% 3.69% 3.09% 3.02% 3/31/03 1.96% 


529 COLLEGE SAVINGS PLAN



4. Total returns do not reflect the current $25 annual account fee, but are net of applicable fees, 

expenses and sales charges of the Plan, including: (1) current program management fee of 40 

basis points; (2) current ongoing sales fees of 25 basis points for Class A and 100 basis points 

for Classes B and C; (3) sales loads—5.75% or 4.25% Class A front-end sales load or 1-4% 

Class B or C contingent deferred sales charges, as applicable; and (4) expenses of the share 

classes of the underlying mutual funds in which Plan portfolios invest. Plan fees, expenses and 

sales charges are subject to change. Underlying fund expenses will vary and in some cases 

have been reduced by fee and expense waivers or reimbursements, which may be ended at any 

time reducing future performance. 

5. Total returns do not reflect the current $25 annual account fee or sales charges, but are net 

of applicable fees and expenses of the Plan, including: (1) current program management fee of 

40 basis points; and (2) current ongoing sales fees of 25 basis points for Class A and 100 basis 

points for Classes B and C; and (3) expenses of the share classes of the underlying mutual 

funds in which Plan portfolios invest. Plan fees and expenses are subject to change. Underlying 

fund expenses will vary and in some cases have been reduced by fee and expense waivers or 

reimbursements, which may be ended at any time reducing future performance. 

6. Nonqualified withdrawals from the plan are subject to a 10% federal tax penalty and ordinary 

federal income taxes on earnings, as well as possible state taxes. The performance data 

shown represents past performance and is not an indication of future results. Investment 

return and principal value of the portfolios will fluctuate so that portfolio shares, when 

redeemed, may be worth more or less than their original cost. Please carefully consider a 

portfolio’s investment goals, risks, charges and expenses before investing. See the Investor 

6/30/09 

ALL SALES CHARGES NO SALES CHARGES 


Investors should read the Investor Handbook carefully before investing, and consider whether their or their beneficiary’s 

home state offers any state tax or other benefits that are only available for investments in its qualified tuition program. 

4, 6 5, 6 


AS OF JUNE 30, 2009 AS OF JUNE 30, 2009 

529 PORTFOLIO 

Inception Total Annual 

2 1-Year 3-Year 5-Year Inception7 1-Year 3-Year 5-Year Inception7 Date7 INDIVIDUAL PORTFOLIOS 

INDIVIDUAL 

Global 

PORTFOLIOS0 

Templeton Growth 529 Portfolio 

Operating Expenses 

Class A 


Growth 

Franklin Growth 529 Portfolio10 Class A 


Franklin Small-Mid Cap Growth 

Class A 


Value 

Mutual Shares 529 Portfolio 

Class A 


Hybrid 

Franklin Income 529 Portfolio 

Class A 


Principal Preservation 

Stable Value 529 Portfolio 

Class A 


Index Style 

S&P 500 Index 529 Portfolio 

Class A 

Class B8 -34.36% -13.59% -3.79% 3.05% -30.36% -11.87% -2.65% 4.03% 3/31/03 1.43% 

-33.64% -13.42% -3.77% 3.11% -30.88% -12.54% -3.38% 3.11% 4/1/03 2.18% 

-31.56% -12.53% -3.41% 2.93% -30.87% -12.53% -3.41% 2.93% 3/28/03 2.18% 

-29.07% -8.73% -4.69% -0.21% -24.73% -6.91% -3.54% 0.74% 4/22/03 1.29% 

-28.26% -8.52% -4.64% -0.45% -25.27% -7.59% -4.25% -0.45% 5/12/03 2.04% 

-25.91% -7.56% -4.21% 0.65% -25.16% -7.56% -4.21% 0.65% 4/1/03 2.04% 

-30.65% -9.96% -2.61% 3.74% -26.41% -8.17% -1.45% 4.73% 3/28/03 1.49% 

-29.92% -9.79% -2.58% 3.99% -27.00% -8.87% -2.18% 3.99% 4/8/03 2.24% 

-27.73% -8.88% -2.21% 3.91% -27.00% -8.88% -2.21% 3.91% 3/28/03 2.24% 

-28.48% -11.18% -2.36% 2.57% -24.11% -9.41% -1.19% 3.54% 3/31/03 1.41% 

-27.66% -10.98% -2.33% 2.52% -24.65% -10.07% -1.94% 2.52% 4/2/03 2.16% 

-25.37% -10.05% -1.96% 2.58% -24.61% -10.05% -1.96% 2.58% 3/28/03 2.16% 

-21.15% -4.37% 0.75% 4.48% -17.65% -2.97% 1.62% 5.21% 4/7/03 1.12% 

-21.60% -4.67% 0.47% 4.53% -18.33% -3.70% 0.86% 4.53% 4/1/03 1.87% 

-19.08% -3.68% 0.86% 4.42% -18.27% -3.68% 0.86% 4.42% 3/28/03 1.87% 

-3.83% 0.18% 0.42% 0.64% 0.45% 1.65% 1.62% 1.61% 4/13/03 1.24% 

-4.27% -0.09% 0.47% 0.82% -0.28% 0.90% 0.86% 0.82% 4/8/03 1.99% 

-1.28% 0.90% 0.86% 0.83% -0.28% 0.90% 0.86% 0.83% 4/7/03 1.99% 

-30.94% -10.83% -4.32% 0.79% -26.71% -9.06% -3.17% 1.75% 4/8/03 1.10% 

-30.17% -10.67% -4.28% 0.10% -27.26% -9.76% -3.89% 0.10% 5/7/03 1.85% 

Class C 

-27.87% -9.71% -3.87% 1.39% -27.14% -9.71% -3.87% 1.39% 4/1/03 1.85% 

Handbook for more information on Franklin Templeton 529 College Savings Plan, including 

sales charges, expenses, general risks of the Plan, general investment risks and specific risks 

of investing in Plan portfolios, which can include risks of convertible securities; country, sector, 

region or industry focus; credit; derivative securities; foreign securities, including currency 

exchange rates, political and economic developments, trading practices, availability of 

information, limited markets and heightened risk in emerging markets; growth or value style 

investing; income; interest rate; lower-rated and unrated securities; mortgage securities and 

asset-backed securities; restructuring and distressed companies; securities lending; smaller 

and midsize companies; and stocks. To obtain an Investor Handbook, which contains this and 

other information, call us at (800) 223-2141, or go to franklintempleton.com. 

Please read the Investor Handbook carefully before investing. All information is as of the date shown. 

7. The inception date of each class of shares of each portfolio is the date on which the class of 

shares was first funded. 

8. After approximately 8 years these Trust shares convert to Class A Trust shares. 

9. Performance prior to May 6, 2009, reflects investment in Franklin Capital Growth Fund rather 

than Franklin Growth Fund. 

10. Prior to May 6, 2009, the Trust Portfolio: (i) was named Franklin Capital Growth 529 Portfolio; 

(ii) invested in the Franklin Capital Growth Fund instead of the Franklin Growth Fund; and 

(iii) had a different investment strategy. Performance prior to May 6, 2009, reflects investment 

in Franklin Capital Growth Fund. 

11. Performance prior to May 6, 2009, reflects investment in Franklin Capital Growth Fund 

rather than Franklin Flex Cap Growth Fund. 


Footnotes 

1. The date of effectiveness of the fund’s registration statement or the first day the fund 

commenced operations. For Class C shares, the first day the fund commenced offering such 

shares. The Mutual Series Funds, except Mutual Financial Services Fund, Mutual Recovery 

Fund and Mutual International Fund, began offering Class A and Class C shares on 11/1/96. 

Mutual Financial Services Fund and Mutual International Fund have offered Class A and 

Class C shares since their respective inceptions on 8/19/97 and 5/1/09. Mutual Recovery 

Fund has offered Class A and Class C Shares since 11/3/03. Certain Franklin Templeton 

Funds offer Advisor Class shares to qualified investors. They are offered without sales charges 

or Rule 12b-1 fees. For performance reporting purposes, inception date for Advisor Class 

shares is the date of effectiveness of the fund’s registration statement or the first day the 

fund commenced operations. For Class 1 shares of the Franklin Templeton Insurance Funds, 

the inception date refers to the date of effectiveness of the funds’ registration statements. For 

more information on when Class 2, Class 3 and Class 4 shares become effective or in some 

cases, commenced sales, please refer to footnote 53. 

2. Figures are as stated in the fund’s prospectus current as of the date of this report. Expenses 

differ as a result of the different class pricing structures. Please refer to page 128 of this 

guide and the fund’s prospectus for more information regarding Class A, Class C and Class R 

share pricing. 

3. A measure of a fund’s volatility relative to an appropriate index based on its investment goal. 

A beta greater than 1.00 indicates volatility greater than the market’s. Based on monthly 

returns over the last three years. Source: © 2009 Thomson Reuters. 

4. Effective January 1995, these funds began reinvesting dividends and capital gains on the 

ex-dividend date. 

5. Shows percent change in value over indicated periods. Does not include sales charges, and 

assumes reinvestment of dividends and capital gains at net asset value. For classes of shares 

existing for less than one year, aggregate total returns replace average annual total returns. 

6. Calculations represent the average annual change in value of an investment over the specified 

periods, assuming reinvestment of dividends and capital gains at net asset value. For classes 

of shares existing for less than one year, aggregate total returns replace average annual total 

returns. Class A figures include the current, maximum initial sales charge. Class C figures 

include the 1% contingent deferred sales charge to the extent applicable. 

7. The portfolio manager for the fund reserves the right to withhold release of information with 

respect to holdings that would otherwise be included in the top 10 holdings list. 

8. Morningstar proprietary ratings reflect historical risk-adjusted returns as of 6/30/09. Source: 

Morningstar, 6/30/09. For each fund with at least a 3-year history, Morningstar calculates a 

risk-adjusted return measure that accounts for variation in a fund’s monthly performance 

(including the effects of all sales charges), placing more emphasis on downward variations 

and rewarding consistent performance. The top 10% of funds in each category receive a 

Morningstar Rating of 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, 

the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is 

counted as a fraction of one fund and rated separately.) The Overall Morningstar Rating 

for a fund is derived from a weighted average of the performance figures associated with its 

3-, 5- and 10-year (if applicable) Morningstar Rating metrics. Past performance does not 

guarantee future results. Morningstar Rating is for the A share class only; other classes 

may have different performance characteristics. 

Morningstar proprietary ratings reflect historical risk-adjusted returns as of 6/30/09. 

The following fund was rated against 90 and 58 U.S.-domiciled Bank Loan funds for the 

respective 3- and 5-year periods ended 6/30/09, as applicable. For the 3- and 5-year 

periods ended 6/30/09, the Morningstar ratings were: Franklin Floating Rate Daily Access 4; 4. 

The following fund was rated against 485; 315; and 134 U.S.-domiciled Conservative 

Allocation funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 

applicable. For the 3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: 

Franklin Templeton Conservative Target 3; 4; 4. 

The following fund was rated against 99; 93; and 55 U.S.-domiciled Europe Stock funds 

for the respective 3-, 5- and 10-year periods ended 6/30/09, as applicable. For the 3-, 5and 

10-year periods ended 6/30/09, the Morningstar ratings were: Mutual European 5; 5; 5. 

The following fund was rated against 112; 102; and 58 U.S.-domiciled Financial funds for 

the respective 3-, 5- and 10-year periods ended 6/30/09, as applicable. For the 3-, 5- and 

10-year periods ended 6/30/09, the Morningstar ratings were: Mutual Financial Services 3; 4; 4. 

The following fund was rated against 101 and 76 U.S.-domiciled Foreign Small/Mid 

Growth funds for the respective 3- and 5-year periods ended 6/30/09, as applicable. 

For the 3- and 5- year periods ended 6/30/09, the Morningstar ratings were: Franklin 

International Small Cap Growth 5; 5. 

The following fund was rated against 116; 107; and 83 U.S.-domiciled High Yield 

Municipal funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Franklin High Yield Tax-Free Income 4; 4; 4. 

The following fund was rated against 1,740; 1,363; and 683 U.S.-domiciled Large Blend 

funds for the 3-, 5- and 10-year periods ended 6/30/09, as applicable. For the 3-, 5- and 

10-year ended 6/30/09, the Morningstar ratings were: Franklin Rising Dividends 3; 2; 5. 

The following fund was rated against 1,565; 1,294; and 663 U.S. domiciled Large Growth 

funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as applicable. For the 

3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Franklin DynaTech 

3; 3; 4. 

6/30/09 

The following funds were rated against 1,154; 951; and 452 U.S. domiciled Large Value 


3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Mutual Beacon 3; 

3; 5; Mutual Shares 3; 3; 5. 

The following fund was rated against 960; 793; and 453 U.S.-domiciled Moderate 

Allocation funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Franklin Templeton Moderate Target 4; 4; 4. 

The following fund was rated against 152; 140; and 114 U.S.-domiciled Municipal 

California Long funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Franklin California Tax-Free Income 3; 4; 4. 

The following fund was rated against 55; 53; and 52 U.S.-domiciled Municipal Minnesota 


3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Franklin Minnesota 

Tax-Free Income 3; 4; 4. 


National Long funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Franklin Federal Tax-Free Income 3; 4; 4. 

The following fund was rated against 60; 59; and 51 U.S.-domiciled Municipal New 

Jersey funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as applicable. 

For the 3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Franklin New 

Jersey Tax-Free Income 3; 3; 4. 

The following fund was rated against 109; 109; and 93 U.S.-domiciled Municipal New 

York Long funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Franklin New York Tax-Free Income 4; 4; 4. 

The following fund was rated against 69; 63; and 56 U.S.-domiciled Municipal Ohio funds 

for the respective 3-, 5- and 10-year periods ended 6/30/09, as applicable. For the 3-, 

5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Franklin Ohio Tax-Free 

Income 3; 4; 4. 


Pennsylvania funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Franklin Pennsylvania Tax-Free Income 3; 4; 4. 

The following funds were rated against 333; 315; and 297 U.S.-domiciled Municipal 

Single State Long funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Franklin Georgia Tax-Free Income 3; 3; 4; Franklin Lousiana Tax-Free Income 3; 3; 4; Franklin 

Michigan Tax-Free Income 3; 3; 4; Franklin Missouri Tax-Free Income 3; 4; 4; Franklin North 

Carolina Tax-Free Income 3; 4; 4; Franklin Oregon Tax-Free Income 4; 4; 5; Franklin Tennessee 

Municipal Bond 3; 4; 4; Franklin Virginia Tax-Free Income 3; 4; 4. 

The following fund was rated against 105; 79; and 65 U.S.-domiciled Pacific/Asia 

ex-Japan Stock funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as 


Templeton China World 4; 3; 5. 

The following fund was rated against 318; 242; and 117 U.S.-domiciled Small Value 

funds for the respective 3-, 5- and 10-year periods ended 6/30/09, as applicable. For 

the 3-; 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Franklin 

MicroCap Value 4; 4; 5. 

The following fund was rated against 118; 100; and 46 U.S.-domiciled Ultrashort Bond 


3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Franklin Adjustable 

Government Securities 4; 4; 3. 

The following fund was rated against 93; 78; and 50 U.S.-domiciled Utilities funds for the 

respective 3-, 5- and 10-year periods ended 6/30/09, as applicable. For the 3-, 5- and 

10-year periods ended 6/30/09, the Morningstar ratings were: Franklin Utilities 4; 3; 5. 

The following fund was rated against 187; 158; and 104 U.S.-domiciled World Bond 


3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Templeton Global 

Bond 5; 5; 5. 

The following funds were rated against 544; 446; and 253 U.S.-domiciled World Stock 


3-, 5- and 10-year periods ended 6/30/09, the Morningstar ratings were: Mutual Global 

Discovery 5; 5; 5; Mutual Quest 5; 5; 5; Templeton Global Opportunities 3; 4; 4; Templeton 

World 3; 3; 4. 

9. The fund’s manager has contractually agreed to waive or limit its fees and to make certain 

payments to reduce expenses. Without this waiver, the fund’s total return, yield and 

distribution rate would be lower. 

10. Prior to 7/1/94, Class A shares were offered at a lower initial sales charge, thus actual total 

returns would differ. Class A average annual total returns have been restated to reflect the 

current, maximum initial sales charge. Effective 5/1/94, the fund implemented a Rule 12b-1 

plan, which affects subsequent performance. 


FOOTNOTES

FOOTNOTES 

Footnotes, cont’d. 

11. Formerly Franklin Global Utilities Fund. Effective 11/15/99, the name and investment strategy 

changed. Investment goal remained the same. 

12. Prior to 7/1/94, Class A shares were offered at a higher initial sales charge; thus actual total 


current, maximum initial sales charge. On 1/1/93, Templeton Global Bond Fund implemented 

a Rule 12b-1 plan, which affects subsequent performance. 

13. Past expense limitations increased the fund’s total return. 

14. Figures are aggregate total return figures, have not been annualized and represent the 

change in value of an investment over the period indicated. 

15. An annualization of the last dividend payment divided by the maximum offering price on 

6/30/09, unless specified otherwise. Please note that the distribution rate for semiannually 

paying funds is based on the 12-month distribution and maximum public offering price. Also, 

the distribution rate for Franklin Convertible Securities Fund is based on the sum of the 

respective class’s last four quarterly dividends and the maximum offering price (NAV for 

Class C) per share on 6/30/09. 

16. Based on published rates in effect on 6/29/09. Federal and state rates are stated at the 

highest marginal tax rate. Maryland and New York rates include local tax based on 

the highest local tax rate. Various cities and counties of other states may impose a local tax. 

The combined rate for these states will be higher. For investors subject to the alternative 

minimum tax, a small portion of the dividend income may be subject to such tax, depending 

on the fund. Distributions of capital gains and ordinary income from accrued market 

discount, if any, are generally taxable. 

17. Please note, the fund paid a supplemental income distribution in December 2007. This 

additional dividend was distributed by the fund to ensure that the calendar year distribution 

requirements for regulated investment companies were met. 

18. Formerly Beacon Fund. The fund changed its name, investment goal and management on 1/9/85. 

19. For investors subject to the alternative minimum tax, a small portion of fund dividends may 

be taxable. Distributions of capital gains are generally taxable. 

20. Prior to 1/1/01, Class A shares were offered at a lower initial sales charge (1.50%). Class A 

average annual total returns have been restated to reflect the current, maximum 5.75% 

initial sales charge; thus actual returns may differ. 

21. Prior to 7/1/92, Class A shares were offered at a higher initial sales charge; thus actual total 


current, maximum initial sales charge. On 1/1/93, the fund implemented a Rule 12b-1 plan, 

which affects subsequent performance. 

22. The investment illustration for the period ended 6/30/09 assumes reinvestment of all dividends 

and capital gains at net asset value. Class A figures reflect the current, maximum initial sales 

charge. Class C figures include the 1% contingent deferred sales charge to the extent applicable. 

23. Prior to 11/1/96, the fund offered only a single class of shares without a sales charge and 

Rule 12b-1 expenses. Average annual total returns shown are a restatement of the original 

class to include both the Rule 12b-1 fees and the current sales charges applicable to each 

share class as though in effect from the fund’s inception. Class A: Prior to 8/3/98, fund shares 

were offered at a lower initial sales charge. 

24. Distributions of capital gains are generally taxable. Although the fund has the ability to invest 

up to 20% of its assets in bonds with income subject to the alternative minimum tax, its 

current exposure to such bonds is 0%. 

25. Source: © 2009 Morningstar. Total returns include reinvested dividends or interest. 

26. An investment in the fund is not insured or guaranteed by the U.S. government or by any other 

entity or institution. There is no assurance that the fund’s $1.00 per share price will be 

maintained; it is possible to lose money. 

27. Returns shown are a restatement of the original class to include Rule 12b-1 fees as though 

in effect from the fund’s inception. 

28. Prior to 1/1/97, Class A shares were offered at a lower initial sales charge; thus actual returns 

may differ. Average annual total returns have been restated to reflect the current maximum 

initial sales charge. 

29. Portfolio holdings are subject to change. 

30. All fund distributions will vary, depending upon current market conditions, and past 

distributions are not indicative of future trends. 

31. Formerly Franklin International Equity Fund. Effective 10/1/96, the fund’s name and 

investment strategy changed; the investment goal remained the same. Prior to 1/1/97, 

Class A shares were offered at a lower initial sales charge; thus actual returns may differ. 

32. Duration shown is the option-adjusted duration. Duration is an indication of a fund’s 

sensitivity to changes in interest rates. The option-adjusted duration formula takes into 

account embedded call options and redemption features that impact a bond’s expected cash 

flows, and thus its interest rate sensitivity. 

33. Effective 5/1/94, the fund implemented a Rule 12b-1 plan which affects subsequent performance. 

34. The average annual total return without sales charges for Class A and Class C shares for the 

35-year period ended 6/30/09 were 13.89% and 12.71%, respectively. The average annual 

total return with sales charges for Class A and Class C for the 35-year period ended 6/30/09 

were 13.70% and 12.71%, respectively. 

35. Total return calculations assume purchases and sales based on the appropriate day’s market 

closing prices. All dividends and distributions are assumed to be reinvested in accordance 

with the fund’s dividend reinvestment plans. Closed-end fund shares are traded on a stock 

exchange and are not offered to the public by Franklin Templeton Distributors, Inc. 

36. Total returns are calculated by Wilshire Associates, Inc. 

6/30/09 

37. All of the funds are subject to certain risks. Generally, investments offering potential for higher 

returns are accompanied by a higher degree of risk. Stocks and other equities representing an 

ownership interest in a corporation have historically outperformed other asset classes over the 

long term, but tend to fluctuate more dramatically over the short term. Bonds and other debt 

obligations are affected by changes in interest rates and the creditworthiness of their issuers. 

High-yield, lower-rated (junk) bonds generally have greater price swings and higher default 

risks. Foreign investing, especially in emerging markets, has additional risks such as currency 

and market volatility and political and social instability. These, and other risks to which 

particular funds may be subject, such as specialized industry sectors or use of complex 

securities, are discussed in each fund’s prospectus. 

38. Formerly Franklin Value Fund. Effective 11/1/01, the fund’s name changed; its investment 

strategy was restated. 

39. The following currencies are considered “major currencies”: Australian dollar, British pound, 

Canadian dollar, Danish krone, European Union euro, Japanese yen, New Zealand dollar, 

Norwegian krona, Swedish krona, Swiss franc and U.S. dollar. The currencies of various 

countries may be added to or deleted from the list of “major currencies” when, in the opinion 

of the Trust’s advisors, worldwide social, economic, financial or political conditions warrant. 

40. The AAA% includes pre-refunded bonds that are secured by U.S. Treasury securities (AAA) but 

have not been re-rated. 

41. As determined by net currency. 

42. Formerly Franklin Gold Fund. Effective 4/10/00, the name and investment strategy changed 

to include other precious metals. The investment goal remained the same. 

43. Performance quotations for this class reflect the following methods of calculation: a) For 

periods prior to the fund’s Advisor Class inception date, a restated figure is used based on the 

fund’s oldest share class, Class A performance, excluding the effect of Class A’s maximum 

initial sales charge but reflecting the effect of the Class A Rule 12b-1 fees; and b) for periods 

after the fund’s Advisor Class inception date, actual Advisor Class performance is used, 

reflecting all charges and fees applicable to that class. 

44. Maryland fund’s income dividends are free from county income taxes. Depending on the location, 

Pennsylvania fund’s dividends are exempt from city or county local taxes. The fund’s shares are 

free from Pennsylvania personal property taxes and Philadelphia school taxes. 

45. California Tax-Free Income Fund, New York Tax-Free Income Fund and Federal Tax-Free Income 

Fund pay dividends on or near the 3rd business day of the month. All other municipal bond 

funds accrue dividends daily and pay on or about the 20th day of the month. 

46. Prior to 8/3/98, Class A shares were offered at a lower initial sales charge. Class A average 

annual total returns have been restated to reflect the current, maximum initial sales charge; 

thus actual returns may differ. 

47. Prior to 8/3/98, Class A shares were offered at a lower initial sales charge. Class A average 

annual total returns have been restated to reflect the current, maximum initial sales charge; 

thus actual returns may differ. 5/1/94, the fund implemented a Rule 12b-1 plan, which 

affects subsequent performance. 

48. Prior to 8/3/98, fund shares were offered at a higher initial sales charge. Average annual total 

return figures have been restated to reflect the current, maximum initial sales charge; thus 

actual returns may differ. 

49. Calculated according to the modified duration formula. Duration is an indication of a fund’s 

sensitivity to changes in interest rates. Please note, duration numbers will change as market 

conditions change; therefore duration should not solely be relied upon to indicate a municipal 

bond fund’s potential volatility. 

50. Annualized and effective yields are for the seven-day period ended 6/30/09. Yield reflects 

fluctuations in interest rates on portfolio investments, and fund expenses. 

51. Prior to 2/1/06, Class A shares were offered without a sales charge. Average annual total 

returns have been restated to reflect the current, maximum initial sales charge. 

52. Formerly Franklin Small Cap Growth Fund I. Effective 9/1/01, the name and investment 

strategy changed. The investment goal remained the same. 

53. Fund-Only Performance Information. Performance reflects the funds’ operating expenses, 

which differ by class, but does not include any contract fees, expenses or sales charges. 

If they had been included, performance would be lower. These contract charges and 

deductions, particularly for variable life policies, can have a significant effect on contract 

values and insurance benefits. Please see a contract prospectus for a complete description 

of these expenses, including sales charges. Ongoing market volatility can dramatically affect 

short-term performance; recent returns may differ. 

a. Average Annual Total Return. The average annual change in value, assuming reinvestment of 

dividends and capital gains. For periods less than one year, aggregate total returns are shown. 

b. Cumulative Total Return. The total change in value over the periods shown, assuming 

reinvestment of dividends and capital gains. The figures reflect the deduction of all 

fund-operating expenses. 

c. $10,000 Hypothetical Investment. The total change in value of a hypothetical $10,000 

investment from the fund’s inception. 

d. Class 2 Performance Information. For periods beginning on 1/6/99 (or 5/1/97 for Templeton 

Developing Markets Securities, Templeton Foreign Securities and Templeton Global Asset 

Allocation funds; 5/15/01 for Franklin Strategic Income Securities Fund; and 5/12/03 for 

Franklin Zero Coupon Fund 2010), Class 2 performance reflects an additional 12b-1 expense 

of 0.25% per year, which also affects future performance. Prior to 1/6/99, 5/1/97, 5/15/01 or 

5/12/03, respectively, Class 2 performance reflects the historical Class 1 performance which 

does not include a 12b-1 fee expense. 


Footnotes, cont’d. 

e. Class 3 Performance Information. Since Class 3 shares were not offered until 5/1/04 (or 

4/1/05 for Templeton Global Bond Securities), for periods prior to 5/1/97 (or 1/6/99 for Templeton 

Global Bond Securities), the performance represents historical Class 1 performance which does 

not include a 12b-1 fee expense. For periods from 5/1/97 to 4/30/04 (or from 1/6/99 to 3/31/05 

for Templeton Global Bond Securities), the performance represents the historical Class 2 

performance. Both Class 2 and Class 3 performance reflects an additional 12b-1 expense of 

0.25% per year, which also affects future performance. 

f. Class 4 Performance Information. For periods beginning 2/29/08, Class 4 performance 

reflects a 12b-1 fee expense of 0.35% per year, which affects future performance. Class 4 

performance prior to 2/29/08 reflects historical Class 1 performance which does not include 

a 12b-1 fee expense, except for Franklin Flex Cap Growth Securities Fund and Franklin Large 

Cap Value Securities Fund, for which historical Class 2 performance is shown which includes 

a 12b-1 fee expense of 0.25% per year. 

54. Based on the most recent prospectus unless otherwise noted. Expenses differ as a result of 

the different class pricing structures; these may include a 12b-1 fee expense of 0.25% per 

year for Class 2 or Class 3 shares and 0.35% per year for Class 4 shares. Please refer to the 

fund’s prospectus for more information. 

55. Performance prior to the 5/1/00 merger reflects the historical performance of Templeton Developing 

Markets Trust, Templeton International Fund and Templeton Asset Allocation Fund, respectively. 

56. The fund’s manager and administrator have contractually agreed in advance to waive or limit 

their respective fees and to assume as their own expense certain expenses otherwise payable 

by the fund. If they had not taken this action, the fund’s total return would have been lower. 

Fee waivers and expense reimbursements may be discontinued at any time, upon notice to the 

fund’s Board, unless otherwise specified in the current prospectus. 

57. The total is greater than 100% due to a -25% position in cash, which is the result of a 

temporary imbalance between cash and the securities caused by the time needed to settle 

securities transactions. 

58. The fund is not a U.S. dollar money market fund, does not seek to maintain a stable net asset 

value, and should not be viewed as a substitute for a money market fund. 

59. The Additional Distribution was declared in excess of the Current Distribution in order to meet 

the year-end excise tax requirements. 

60. Due to rounding, the sum of portfolio holdings may not equal 100%. 

61. Formerly Franklin Puerto Rico Tax-Free Income Fund. Effective 12/1/01, the fund’s name 

changed; the investment goal and strategy remained the same. 

62. Formerly Franklin California Growth Fund. Effective 9/1/02, the fund’s name changed, and its 

investment criteria was modified. 

63. Prior to 9/30/08, the fund offered only a single class of shares, without a sales charge and Rule 

12b-1 fees, Advisor Class shares. Performance figures reflect a restatement of the Advisor Class 

performance to include both the Rule 12b-1 fees and sales charges applicable to each share 

class as though in effect from the fund’s inception. For periods after 9/30/08, actual 

performance is used, reflecting all charges and fees applicable to that class. 

64. The annualized percentage difference between a fund’s actual returns and its expected 

performance given its level of market risk, as measured by beta. Based on monthly returns 

over the last 3-year period. Source: © 2009 Thomson Reuters. 

65. Statistical measurement of the range of a fund’s total returns. In general, higher standard 

deviation means greater volatility. Based on monthly returns over the last 3-year period. 

Source: © 2009 Thomson Reuters. 

66. The fund’s manager has agreed in advance to reduce its fee from assets invested by the fund 

in a Franklin Templeton money fund (the Sweep Money Fund). This reduction is required by the 

Board of Trustees and an exemptive order of Securities and Exchange Commission; this 

arrangement will continue as long as the exemptive order is relied upon. If the fee reduction 

was not taken, the fund’s total return would have been lower. 

67. Source: Morningstar ® 3/31/09. The Morningstar Style Box reveals a fund’s investment 

strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned 

and the horizontal axis shows investment style (value, blend or growth). For fixed-income 

funds, the vertical axis shows the average credit quality of the bonds owned, and the horizontal 

axis shows interest rate sensitivity as measured by a bond’s duration (short, intermediate or 

long). All of these numbers are drawn from the fund portfolio holding figures most recently 

entered into Morningstar’s database and the corresponding market conditions. Historical data 

generally cover the past three years (or portion thereof for funds in existence less than three 

years) of quarterly data. Past performance does not guarantee future results. © 2009 

Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to 

Morningstar and/or its content providers; (2) may not be copied or distributed and (3) is not 

warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are 

responsible for any damages or losses arising from any use of this information. 

68. Effective 1/1/02, the fund began offering Class R shares to certain eligible investors as 

described in the prospectus. This share class does not have sales charges. 

69. As of 12/31/08. Portfolio holdings are subject to change and may not represent current or 

future portfolio composition. 

70. A measure of the combined funds’ volatility relative to the S&P 500 Index. A beta less than 

1.00 indicates volatility less than the market’s. Based on monthly returns over the investment 

periods ended 6/30/09. 

71. CLOSED. Franklin New York Tax-Exempt Money Fund closed to new investors on 4/30/09. 

Pending shareholder approval, it is anticipated that the fund will merge into Franklin 

Tax-Exempt Money Fund during the third quarter of 2009. 

6/30/09 

72. On 8/8/03, the fund converted from a closed-end fund to an open-end fund. Returns shown for 

periods prior to 8/8/03, are a restatement of the closed-end fund’s performance to include both 

the Rule 12b-1 fees and the current sales charges (unless so noted) applicable to each share 

class as though in effect from the fund’s inception. For periods after 8/8/03, actual 


73. Effective 1/1/04, Class C shares’ sales charge structure changed as follows: the 1% initial sales 

charge was eliminated and the CDSC period was reduced from 18 months to 12 months. 

74. Class C: Figures reflect the 1% contingent deferred sales charge to the extent applicable. 

75. Although U.S. government-sponsored entities may be chartered or sponsored by acts of 

Congress, their securities are neither insured nor guaranteed by the U.S. Treasury. Please see 

the fund’s prospectus for a detailed discussion regarding various levels of credit support for 

government agency or instrumentality securities. The fund’s yield and share price are not 

guaranteed and will vary with market conditions. 

76. Figures are as stated in the fund’s prospectus current as of the date of this report. Expenses 

differ as a result of the different class pricing structures. Please refer to page 128 of this 

guide and the fund’s prospectus for more information regarding Class A and Class C share 

pricing. Please note that expense ratios for this fund includes estimated indirect expenses of 

its underlying funds. 

77. Prior to 11/3/03, the fund offered only a single class of shares without a sales charge and Rule 

12b-1 expenses, Advisor Class shares. Performance figures reflect a restatement of the Advisor 

Class performance to include both the Rule 12b-1 fees and sales charges applicable to each 

share class as though in effect from the fund’s inception. For periods after 11/3/03, actual 


78. Formerly Franklin Short-Intermediate U.S. Government Securities Fund. Effective 9/1/04, the 

fund’s name changed; its investment goal and strategy remained the same. 

79. Source: Morningstar ® 12/31/08. The Morningstar Style Box reveals a fund’s investment 

strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned 

and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds, 

the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis 

shows interest rate sensitivity as measured by a bond’s duration (short, intermediate or long). 

All of these numbers are drawn from the fund portfolio holding figures most recently entered into 

Morningstar’s database and the corresponding market conditions. Historical data cover the past 

three years (or portion thereof for funds in existence less than three years) of quarterly data. 

Past performance does not guarantee future results. © 2009 Morningstar, Inc. All rights 

reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content 

providers; (2) may not be copied or distributed and (3) is not warranted to be accurate, complete 

or timely. Neither Morningstar nor its content providers are responsible for any damages or 

losses arising from any use of this information. 

80. Effective 5/1/09, Mutual Qualified Fund changed its name to Mutual Quest Fund. The fund’s 

investment goal and strategy remained unchanged. 

81. Formerly Franklin Capital Growth Fund. Effective 12/15/99, the fund’s name and investment 


82. Formerly Franklin Small Cap Fund. Effective 5/1/05, the fund’s name and investment strategy 

changed. The investment goal remained the same. 

83. Formerly Franklin Value Securities Fund. Effective 5/1/02, the fund’s name and investment 


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

85. The total notional amount of these credit default swap agreements was $74,700,000 for high 

yield corporate bonds and $93,445,000 for investment grade corporate bonds as of 6/30/09. 

86. For investors subject to the alternative minimum tax, a small portion of fund dividends may 

be taxable. Distributions of capital gains are generally taxable. Dividends are generally 

subject to state and local taxes, if any. 

87. This fund level income was distributed to shareholders of record on 6/21/07 to ensure 

compliance with the regulated investment company distribution requirements and to 

minimize fund-level tax related expenses. 

88. Formerly Franklin Real Estate Fund. Effective 5/1/07, the fund’s name and its principal goal 

and main investments changed, as well as other characteristics of the fund. 

89. Advisor Class and Class Z shares are only offered to qualified investors that meet certain 

eligibility criteria including: purchases made through comprehensive fee or other advisory 

programs with a broker dealer and employer sponsored plans with at least $1 million in plan 

assets. Check with your broker dealer to see if Advisor Class and Class Z shares are available 

for sale at your firm. Please see prospectus for a complete list of eligibility criteria. 

90. Represents non-U.S. dollar-denominated foreign government bonds of countries that are not 

considered “developed” markets, but may be investment grade or non-investment grade rated. 

91. Because of its historical investment policy of investing net assets in insured municipal 

securities, the fund’s portfolio presently consists predominantly of insured municipal securities. 

92. Effective 5/1/09, Mutual Discovery Fund changed its name to Mutual Global Discovery Fund. 

The fund’s investment goal and strategy remained unchanged. 

93. Formerly Mutual Discovery Securities Fund. Effective 5/1/09, the fund’s name changed. The 

investment goal and strategy remained the same. 

94. Formerly Templeton Global Income Securities Fund. Effective 5/1/09, the fund’s name and 

investment strategy changed. The investment goal remained the same. 

Investment return and principal value for Franklin, Templeton and Mutual Series funds will 

fluctuate with market conditions, and investors may have a gain or loss when they sell their 

shares. Past performance does not guarantee future results. 


FOOTNOTES

FUND SALES CHARGES & COMMISSIONS 

Fund Sales Charges and Commissions 

CLASS A 

SALES DEALER 

ACCOUNT/PURCHASE SIZE CHARGE COMMISSION 

Equity Funds3 Less than $50,000 5.75% 5.00% 

$50,000 – $99,999 4.50% 3.75% 

$100,000 – $249,999 3.50% 2.80% 

$250,000 – $499,999 2.50% 2.00% 

$500,000 – $999,999 2.00% 1.60% 

$1,000,000 – $3,999,999 0.00% 6 up to 1.00% 8 

$4,000,000 – $50,000,000 0.00% 6 up to 0.50% 8 

$50,000,000 and over 0.00% 6 up to 0.25% 8 

Long-Term Fixed Less than $100,000 4.25% 4.00% 

Income Funds3 $100,000 – $249,999 3.50% 2.80% 

$250,000 – $499,999 2.50% 2.00% 

$500,000 – $999,999 2.00% 1.60% 

$1,000,000 – $3,999,999 0.00% 6 up to 0.75% 8 

$4,000,000 – $50,000,000 0.00% 6 up to 0.50% 8 

$50,000,000 and over 0.00% 6 up to 0.25% 8 

Intermediate- and Less than $100,000 2.25% 2.00% 

Limited-Term 

Fixed Income Funds $100,000 – $249,999 1.75% 1.50% 

$250,000 – $499,999 1.25% 1.00% 

$500,000 – $999,999 1.00% 0.85% 

$1,000,000 – $3,999,999 0.00% 6 up to 0.75% 8 

$4,000,000 – $50,000,000 0.00% 6 up to 0.50% 8 

$50,000,000 and over 0.00% 6 up to 0.25% 8 

Maximum 12b-1 fees paid to dealer17 All equity funds 

EXCEPT 

0.25% 

Franklin Income Fund 0.15% 

Franklin Utilities Fund 0.15% 

All long-term tax-free income funds 0.10% 

All long-term taxable fixed income funds 

EXCEPT 

0.25% 

Franklin High Income Fund 0.15% 

Franklin Strategic Mortgage Portfolio 0.00% 

Franklin U.S. Government Securities Fund 0.15% 

All intermediate-term tax-free income funds 0.10% 

All intermediate-term taxable income funds 

EXCEPT 

0.25% 

Franklin Limited Maturity U.S.Gov’t. Securities Fund 0.10% 

All limited-term tax-free income funds 0.15% 

1. An “Employer-Sponsored Retirement Plan” refers to a Qualified Retirement Plan, ERISAcovered 

403(b) and certain non-qualified deferred compensation arrangements that 

operate in a similar manner to a Qualified Retirement Plan, such as 457 plans and 

executive deferred compensation arrangements, but not including employer-sponsored 

IRAs. A “Qualified Retirement Plan” is an employer- sponsored pension or profit sharing 

plan that qualifies under section 401(a) of the Internal Revenue Code, including 401(k), 

money purchase pension, profit sharing and defined benefit plans. 

2. Maximum sales charges vary by fund, from 0% to 5.75%. For fixed income funds, 

maximum dealer commission varies by fund from 0% to 4.00%. 

3. Franklin Income Fund and Franklin Utilities Fund follow the long-term, fixed income funds’ 

pricing schedule. Please see prospectus for details. 

6/30/09 

CLASS B 9 

EQUITY FIXED INCOME 

FUNDS3 FUNDS3 Front-end sales charge paid by investor 0.00% 0.00% 

Commission paid to dealer NA 9 NA 9 

CDSC 5 Year 1 4.00% 4.00% 

Year 2 4.00% 4.00% 

Year 3 3.00% 3.00% 

Year 4 3.00% 3.00% 

Year 5 2.00% 2.00% 

Year 6 1.00% 1.00% 

Year 7 0.00% 0.00% 

Class B converts to the same fund’s Class A after 

eight years of each investment. 

Maximum 12b-1 fees paid to dealer 0.25% 0.15% 

CLASS C 


FUNDS3 FUNDS3 Front-end sales charge paid by investor 

Commission paid to dealer 

0.00% 0.00% 

Franklin Templeton Distributors, Inc., upfront payment 0.75% 0.85% 

Advanced 12b-1 service fee for year 1 0.25% 0.15% 

Total up-front commission 1.00% 8 1.00% 8 

CDSC (shares redeemed within 12 months of purchase) 5 Maximum 12b-1 fees paid to dealer 

1.00% 1.00% 

10 

Service fee 0.25% 0.15% 

Asset-based charge 0.75% 0.50% 

Total 12b-1 fees 1.00% 0.65% 

CLASS R 8 


FUNDS3 FUNDS 

Front-end sales charge paid by investor 0.00% 0.00% 

Commission paid to dealer8 0.00% 0.00% 

CDSC 0.00% 0.00% 

Maximum 12b-1 fees paid to dealer 0.50% 0.50% 

4. Availability determined by recordkeeper. 

5. Please see each fund’s prospectus and SAI for CDSC waivers. 

6. For NAV purchases of $1 million or more, a CDSC may apply (1.00% for equity funds or 

0.75% for fixed income funds) to shares redeemed within 18 months. 

7. Dealer commission for equity funds includes 0.75% prepaid commission and 0.25% 

advance of first year’s 12b-1 service fee. Dealer commission for fixed income funds 

includes 0.85% prepaid commission and 0.15% advance of first year’s 12b-1 service fee. 

8. Effective 5/1/06, upfront commission is no longer provided on Employer Sponsored 

Retirement Plans. The dealer trail will begin to accrue immediately. 


Fund Sales Charges and Commissions, cont’d. 

Pricing Structures 

FEATURES 

General Client Profile 

Sales Charges & Commissions 

Maximum Initial Sales Charge 

Back-end (Contingent deferred 

sales charge, CDSC) 5 

Maximum Dealer Commission 

Maximum Dealer Trail 

Purchases 

Minimum Initial Investment11 Maximum Lump Sum Investment 

Automatic Investment Plan 

Redemptions 

SWIP 

90 Day Reinstatement16 Redemption Order 

Exchanges 

Available Funds 

Distributions 

Dividends/Capital Gains (Relative) 

Directed to Another Fund 

Expenses (Relative) 

SEC Yield (Relative) 

Newspaper Listing 

CLASS A 

Investors with a long-term 

perspective and/or are investing 

larger amounts who want to avoid 

higher ongoing expenses and fees 

Investors who want to take 

advantage of breakpoints through 

large share quantity purchases 

2, 3 

5.75% for Equity Funds 

2, 3 

4.25% for Fixed Income Funds 

None 5,6 

5.00% for Equity Funds3 2, 3 



0.10-0.25% for Fixed Income Funds 

Generally $1,000 

None 

Yes 

Yes 

Yes, at NAV 

FIFO 5 

Within class only 

Higher than B, C & R 


Generally lower than B, C & R 

Generally lower than B, C & R 

“A” follows fund names 

CLASS B 9 

No longer available 

None 

Declines to zero after six years: 5 

Yrs 1 & 2: 4.00%, Yrs 3 & 4: 3.00%, 

Yr 5: 2.00%, Yr 6: 1.00%, Yr 7: 

0.00% 

NA 9 



No longer available 

Yes 

Yes, into Class A at NAV 13 

FIFO 5 


Lower than A & R, same as C 


Generally higher than A & R 

Generally higher than A & C, 

same as R 

“B” follows fund names 

9. New sales of Class B shares have been discontinued. Existing B shareholders may 

continue to reinvest dividends and exchange their shares for other B shares. 

10. 12b-1 service fees are paid in advance for the first year at the time of purchase. Franklin 

Templeton Distributors, Inc. retains the asset-based charge in the first year. Qualifying 

dealers will earn the full 12b-1 fee (service fee and asset based charge) beginning in the 

13th month. 

11. Exceptions apply. Please see prospectus for details. 

12. Purchases for larger amounts will be processed automatically as Class A. 

13. Effective 2/1/05, proceeds from Class B redemptions reinvested within 90 days are 

invested in Class A at NAV. Shareholders will not receive credit for any previously paid 

CDSC. 

CLASS C 

Investors with a shorter investment 

time horizon and/or who are 

investing smaller amounts 

Investors who prefer to “pay as 

they go” for professional 

investment advice 

CLASS R 

Employer Sponsored Retirement 

Plans1 DEALER USE ONLY/NOT FOR DISTRIBUTION TO THE PUBLIC Go to franklintempleton.com or call (800) 223-2141 Dealer Facts Guide 129 

None 

1.00% for 12 months 5 

7, 8 1.00% 

1.00% for Equity Funds, 0.65% for 

Fixed Income Funds 11 

Generally $1,000 

$999,999 12 

Yes 

Yes 

Yes 

FIFO 5 


Lower than A & R, same as B 


Generally higher than A & R 

Generally higher than A, lower than 

B & R 

“C” follows fund names 

None 

None 

NA 8 

0.50% accrues immediately 8 

NA 

None 

Yes 

Yes 

Yes 

FIFO 5 

Within class only 15 

Lower than A, higher than B & C 

Within class only4 Generally higher than A, lower 

than B & C 

Generally higher than A & C, 

same as B 

“R” follows fund names 

6/30/09 

14. An “Investment Only Plan” is an Employer-Sponsored Retirement Plan, other than a 

Franklin Templeton 401(k) Services Plan, investing in Franklin Templeton fund shares 

through a non-Franklin Templeton affiliated plan trustee. 

15. Franklin Templeton 401(k) Services Plans may exchange or direct contri butions into A 

shares if a fund selection does not offer an R share. 

16. Effective 2/1/05, the reinstatement period became 90 days. 

17. Annual 12b-1 fees are paid quarterly to qualifying dealers. For A share purchases at NAV, 

dealer trail generally starts in the 13th month. 

FUND SALES CHARGES & COMMISSIONS

FUND SALES CHARGES & COMMISSIONS 

Fund Sales Charges and Commissions, cont’d. 

Retirement Products Pricing Structures 

Eligible for purchase. 18 

RETIREMENT BUSINESS CLASS A CLASS C CLASS R ADVISOR/Z CLASS 

Traditional IRAs, Roth IRAs, 

SIMPLE IRAs, SEP IRAs, 

Non-ERISA Covered 403(b) Plans 

Eligible for purchase. 18 Not available. Generally not available to 

individuals. 

Rollover IRAs5 Eligible for purchase. 18 Eligible for purchase at 

Not available. Generally not available to 

applicable sales charges. 

Eligible for purchase at NAV 

if investor rolls assets over 

directly from a Franklin 

Templeton 401(k) Services Plan 

to a Franklin Templeton IRA. 

Dealer trail accrues immedi ately. 

No prepaid commissions apply. 

Subse quent purchases will 

follow standard A share pricing. 

individuals. 

Retirement Division 

Investment-Only Plans 5,14 

(Non FT-Affiliated Trustee) 

Eligible for purchase for plans 

with less than $1 million 

in assets, at applicable 

sales charge. 

Eligible for NAV purchases 

for plans with $1 million 

or more in plan assets. 

Generally dealer trail accrues 

immediately. No prepaid 

commissions or CDSC applies. 

Eligible for purchase. 18 

Dealer trail accrues 


commissions apply. 8 

Eligible for purchase. 

Dealer trail accrues 


commissions apply. 8 

18. Refer to Fund Sales Charges and Commissions (pages 128-129) for more information on eligible purchases under Class A, C, R and Advisor/Z share pricing. 

Eligible for purchase if 

investment minimums 

are met. 

No prepaid commissions 

or dealer trail apply. 

6/30/09 


Separate Accounts (800) 822-8464 

FRANKLIN TEMPLETON PORTFOLIO 

ADVISORS, INC. (FTPA) offers private asset 

manage ment to individuals and institutional 

clients through financial advisors associated 

with wirehouse firms, regional broker/dealers, 

independent broker/dealers and banks. 

6/30/09 

Brad Hanson, SVP, National Director of Sales 

EXT. 

22093 

Jan Marshall, VP, Director of Business Relations 23656 

Todd Stewart, VP, Director, Internal Sales and Business Administration 24396 

Marc Centeno, Supervisor, Internal Sales 37879 

Regional Director Teams 

AK, AZ, CA, HI, ID, MT, NV, OR, UT, WA, WY Bob Reyen 23275 

Jeff Gilbert, Sr. Regional Portfolio Specialist 24297 

AL, CT, DC, DE, FL, GA, MA, MD, ME, MS, NC, D. Craig Maxwell 22097 

NH, NJ, NY, PA, RI, SC, TN, VA, VT, WV Guy DeWald, Sr. Regional Portfolio Specialist 37888 

AR, CO, IA, IL, IN, KS, KY, LA, MI, MN, MO, Michael A. Wasz 22096 

ND, NE, NM, OH, OK, SD, TX, WI Jennifer Strachan, Sr. Regional Portfolio Specialist 37190 

Offshore Products (800) 233-9796 or (727) 299-5042 

FRANKLIN TEMPLETON INVESTMENT 

FUNDS (FTIF) is a Luxembourg registered 

offshore umbrella product offering 

investors, who are non-U.S. citizens and 

non-U.S. residents, a wide choice of over 

60 sub-funds. 

Bill Pingleton, President, Managing Director 

Americas 

Michel Tulle, Senior Director 

Americas 

Shane Cunningham, National Sales Manager 

North America 

Offshore Wholesalers 

Beatriz Salvat Jason Shidler 

Elisa Granados-Anderson Johanna Falkowitz 

EXT. 

Marcus Vinicius, Director Investment Channels 

David Deschenes, Key Account Manager 33252 

Susanne Shahab, Dealer Relations Coordinator 33251 

Internal Wholesalers 

West: Jessica Conrado 33262 

Northeast: Jack Leung 33255 

Southeast: Daniele Frontela 33253 

Retirement Division (800) 530-2432 

FRANKLIN TEMPLETON RETIREMENT INVESTMENT ONLY SERVICES 

Specialists 

OPEN (West) 

EXT. 

Jim Huennekens (Central) 36501 

Gary Giffen (East) 38303 

Ben Gustafson, Internal Wholesaler 37143 


WHOLESALER LISTINGS SEPARATE ACCOUNTS • OFFSHORE PRODUCTS • RETIREMENT DIVISION INDEPENDENT & BANK DIVISION NYSE DIVISION

SEPARATE ACCOUNTS • OFFSHORE PRODUCTS • RETIREMENT DIVISION WHOLESALER LISTINGS 

INDEPENDENT & BANK DIVISION 

NYSE DIVISION 

Independent and Bank Division (800) 462-1264 

Wholesaler Teams EXT. 

Alabama Billy Rhodes 34048 

Amanda McCain, Internal 

Alaska Robert Gonzalez 22928 

Kevin Borella, Internal 

Arizona Patrick Vance 25822 

NORTH (Including Scottsdale) Kristina Currie, Internal 

SOUTH (Excluding Scottsdale) Steve Sullivan 23063 

Tim Duellman, Internal 

Arkansas Ken Parrish 36548 

Susan Nguyen, Internal 

California John Concepcion 28255 

NORTH (Sacramento Area) Shana Aleem, Internal 

N. BAY – SAN FRANCISCO PENINSULA Matt Cost 28450 

(Ukiah to Monterey) Kevin Borella, Internal 

EAST BAY VALLEY (Oakland, Alameda County, JB Walker 22525 

Contra Costa County, Lodi, Modesto, 

Stockton & Fresno) 

Sean Burke, Internal 

CENTRAL (Bakersfield, San Luis Obispo & Jeff Vollmer 22676 

Santa Barbara) OPEN, Internal 

SAN FERNANDO VALLEY & WEST LA Steve Sain 28230 

(Beverly Hills & Hollywood) Tina White, Internal 

CENTRAL LA (Downtown LA, San Gabriel Dori Hetrick 27603 

Valley & South Bay) Harley Lukenbill, Internal 

TAHOE Eric Momsen 

Ian Gookin, Internal 

28285 

DESERT CITIES (Beaumont, Sun City & Gustavo De La Roca 22038 

Palm Springs) Suzanne Smith, Internal 

SOUTHERN CALIFORNIA (Long Beach to Diane Tallarico 28226 

San Clemente; Barstow to Marrietta) Pamela Hung, Internal 

SAN DIEGO COUNTY (Greater San Diego; John Lundy 28239 

Oceanside to San Diego E.) Betsy Kaplan, Internal 

Colorado Dan Almuti 

Ken Aquino, Internal 

24822 

Connecticut Scott Mansfield 

Bob MacDonald, Internal 

36512 

Delaware Scott Rogers 

Alan Jardeleza, Internal 

36503 

District of Columbia Angie Bradshaw 

Andre Buchanan, Internal 

23844 

Florida Billy Rhodes 34048 

PANHANDLE (Including Tallahassee) Amanda McCain, Internal 

NORTH (Jacksonville, Lakeland & Orlando) Dan Bone 

Mike Connors, Internal 

36526 

SOUTH CENTRAL (Melbourne to Delray Beach; Sherman Goodrich 36505 

Ft. Myers & Pt. Charlotte) Misty Caber, Internal 

SOUTHEAST (Boca Raton & Miami) Andrew Bockstein 

Brian Sladek, Internal 

37166 

WEST CENTRAL (Springhill to Venice) Brian Brennemen 

Jonathan Baulsir, Internal 

36543 

Georgia Russell Magbee 

Jonathan Barrett, Internal 

37780 

Guam John Concepcion 

Shana Aleem, Internal 

28255 

Hawaii John Concepcion 


28255 

6/30/09 

Idaho Robert Thompson 

EXT. 

28207 

NORTH Sean Mahoney, Internal 

SOUTH (Boise) Damian Eckstein 

Matt Pickard, Internal 

28451 

Illinois Joe Clancy 28243 

NORTH METRO Ed Kosarich, Internal 

Metro Chicago & South Metro Phil Haning 

Chris Colon, Internal 

36523 

SOUTH Jeff Nymark 

Ed Defeo, Internal 

33429 

Indiana Ben Schlueter 36551 

NORTH (Including Indianapolis) Nick Dawson, Internal 

SOUTH Kevin Russell 

Ray Carollo, Internal 

36538 

Iowa Jim De Kruif 37188 

EAST Chris Robinson, Internal 

WEST Sean Cullinane 

Teresa Auty, Internal 

23611 

Kansas Roy Tirakayos 36557 

Metro Kansas City Suzanne Smith, Internal 

Excluding Metro Kansas City Dan Cestary 

Peter Ordal, Internal 

37262 

Kentucky Joe Westendorf 36509 

Northern (Greater Cincinnati Metro Area) Brian Boulerice, Internal 

Excluding Greater Cincinnati Metro Area Tom Temeyer 


35231 

Louisiana Ken Parrish 36548 

NORTH Susan Nguyen, Internal 

SOUTH Allen Kuhn 

Mark Indgjer, Internal 

28124 

Maine Darren Doughty 


36530 

Maryland Scott Rogers 

Alan Jardeleza, Internal 

36503 

Massachusetts Adrian Jackson 

David Preston, Internal 

36508 

Michigan Paul Silva 37740 

Detroit, Ann Arbor, Flint Galey Gravenstein, Internal 

WEST Steve Glover 

Michael Cimarik, Internal 

36533 

Minnesota Jeffery Rose 28282 

NORTH (Minneapolis Metro Area) Brett Kautter, Internal 

SOUTH (St. Paul Metro Area) John Kelly 

Nick Biddle, Internal 

28231 

NORTHWEST David Douglas 

Brett Kautter, Internal 

38082 

Mississippi Chris Jenkins 36514 

NORTH (Greater Memphis Area) Johanna Hagel, Internal 

SOUTH Jonathan Thompson 

Vinny Minutolo, Internal 

37278 

Missouri Bob Whiting 27851 

EAST Andy Cunningham, Internal 

WEST Roy Tirakayos 

Suzanne Smith, Internal 

36557 

Montana Robert Gonzalez 


22928 


Independent and Bank Division, cont’d. (800) 462-1264 

Nebraska Sean Cullinane 23611 


Nevada Eric Momsen 28285 

NORTH (Reno & Lake Tahoe Area) Ian Gookin, Internal 

SOUTH (Las Vegas) Damian Eckstein 28451 


New Hampshire Darren Doughty 36530 


New Jersey Stephen May 36520 

NORTH Marek Blaskovic, Internal 

SOUTH Rich Wriedt 28263 

Joe Valencia, Internal 

New Mexico Gustavo De La Roca 22038 


New York David McLaughlin 36532 

Upstate Jonathan Marville, Internal 

5 Boroughs Phil Hemery 36522 

Ken Nyiri, Internal 

Long Island Bill Sheluck 36536 

Richard Uhlmann, Internal 

Westchester County to Albany Kevin Carevic 37181 

Katrina Kerber, Internal 

North Carolina David Gullison 35054 

EAST Jared Motzenbecker, Internal 

WEST Ken Jones 36510 

Andrew Aiello, Internal 

North Dakota David Douglas 38082 


Ohio Gary Lydrickson 36515 

NORTHEAST Christian Haymond, Internal 

NORTHWEST (Toledo) Ben Schlueter 36551 

Nick Dawson, Internal 

SOUTH Joe Westendorf 36509 

Brian Boulerice, Internal 

Oklahoma Ryan Mason 28214 

Jason Hurtienne, Internal 

Oregon Darren Kinney 25807 

Kathleen Gill, Internal 

Pennsylvania Michael Sliney 36513 

Eastern Denise Daniels, Internal 

Western Doug LaFay 36539 

Rob Bryarly, Internal 

Puerto Rico Andrew Bockstein 37166 


Rhode Island Adrian Jackson 36508 

David Preston, Internal 

South Carolina Jonathan Thompson 37278 


South Dakota David Douglas 38082 


Tennessee Tom Hoyt 36506 

EAST Mike Magnetta, Internal 

WEST (Greater Nashville Metro Area) Chris Jenkins 36514 

Johanna Hagel, Internal 

EXT. 

6/30/09 

Texas Allen Kuhn 28124 

Greater Houston Mark Indgjer, Internal 

NORTH CENTRAL (Corsicana, Dallas/ Bryan Sullivan 22450 

Fort Worth & Greenville) Frank Zasa, Internal 

EAST (Paris to Lufkin) Dan Cestary 37262 

Pete Ordal, Internal 

Abilene, Waco, Wichita Falls Todd Ermenio 28211 

Sharlene Ching, Internal 

Austin to San Antonio & Victoria Joseph Piccolo 27035 

Lori Kamuf, Internal 

El Paso Gustavo De La Roca 22038 



EXT. 

NORTHWEST/SOUTHWEST Fred Miller 37266 

(Amarillo, Corpus Christi, Laredo, Lubbock, 

Midland & San Angelo) 


Utah Damian Eckstein 


28451 

Vermont Darren Doughty 


36530 

Virgin Islands Andrew Bockstein 


37166 

Virginia Angie Bradshaw 23844 

NORTH Andre Buchanan, Internal 

SOUTH David Gullison 

Jared Motzenbecker, Internal 

35054 

Washington Darren Kinney 25807 

Vancouver Kathleen Gill, Internal 

WESTERN Peter Black 

Duc Nguyen, Internal 

28238 

EASTERN Robert Thompson 

Sean Mahoney, Internal 

28207 

West Virginia Tom Temeyer 


35231 

Wisconsin Dan Peterson 


36534 

Wyoming Robert Gonzalez 22928 

NORTHWEST Kevin Borella, Internal 

SOUTHEAST Chris Burt 

Chris Schurawel, Internal 

27420 

National Sales Manager 

Bob Geppner 37335 

Divisional Sales Managers 

NORTHEAST CT, MA, ME, NH, NY, PA, RI, VT Dan Grip 36521 

MID-ATLANTIC DC, DE, MD, NC, NJ, PA, VA Roger Michaud 36518 

SOUTHEAST AL, FL, GA, LA, MS, PR, SC, 

TX, VI 

Joe Epstein 37202 

GREAT LAKES AL, AR, IN, KY, LA, MI, OH, TN Michael Mahoney 28266 

MIDWEST IA, IL, MN, MO, ND, NE, SD, WI Dan Reinhold 37727 

SOUTHWEST AZ, CA, CO, ID, KS, MO, NM, NV, Jim Escobedo 

OK, UT, WY 

38204 

PACIFIC AK, CA, HI, ID, MT, NV, OR, WA, 

WY, GUAM 

John McGee 24842 


SEPARATE ACCOUNTS • OFFSHORE PRODUCTS • RETIREMENT DIVISION WHOLESALER LISTINGS 

INDEPENDENT & BANK DIVISION 

NYSE DIVISION 

NYSE Division (800) 462-1216 

Wholesaler Teams EXT. 

Alabama Tom Hoyt 36506 

NORTH (Huntsville) Mike Magnetta, Internal 

SOUTH Billy Rhodes 34048 

Amanda McCain, Internal 

Alaska Robert Gonzalez 22928 


Arizona Patrick Vance 25822 

NORTH (Excluding Scottsdale) Kristina Currie, Internal 

SOUTH (Including Scottsdale) Steve Sullivan 23063 

Tim Duellman, Internal 

Arkansas Ken Parrish 36548 


California Eric Momsen 28285 

CENTRAL VALLEY (Sacramento, Stockton, Fresno) Ian Gookin, Internal 

NORTH (Chico, Redding) John Concepcion 


28255 

N. BAY SAN FRANCISCO PENINSULA Jack Schultz 28256 

(Ukiah to Monterey) Rica de Jesus, Internal 

CENTRAL COAST (Bakersfield, San Fernando Jeff Vollmer 22676 

Valley & Santa Barbara) OPEN, Internal 

SOUTH (Palos Verdes, Orange Co., Escondido) Adam Barnett 

Pritika Chand, Internal 

23555 

GREATER LOS ANGELES SOUTH (N. LA, David Lachina 26753 

Santa Monica, Beverly Hills, Pasadena) Andrew Prupas 

SOUTHERN CALIFORNIA (Greater San Diego Area) John Lundy 

Betsy Kaplan, Internal 

28239 

DESERT CITIES (Beaumont, Sun City & Gustavo De La Roca 22038 

Palm Springs) Suzanne Smith, Internal 

Colorado Chris Burt 


27420 

Connecticut Rob Bonner 

Matthew Bartlett, Internal 

36502 

Fairfield County Kevin Folks 

John Spiecher, Internal 

36528 

Delaware David McDonough 

Victor Vanzo, Internal 

36529 

District of Columbia Ian Valentine 

Bill Kimbrough, Internal 

36511 

Florida Billy Rhodes 34048 

PANHANDLE (Including Tallahassee) Amanda McCain, Internal 

NORTH (Jacksonville, Lakeland & Orlando) Dan Bone 

Mike Connors, Internal 

36526 

SOUTH CENTRAL (Melbourne to Delray Beach; Sherman Goodrich 36505 

Ft. Myers & Pt. Charlotte) Misty Caber, Internal 

SOUTHEAST (Boca Raton & Miami) Andrew Bockstein 


37166 

WEST CENTRAL (Springhill to Venice) Brian Brenneman 


36543 

Georgia Bobby Wilmath 

Craig Miller, Internal 

36542 

Guam John Concepcion 


28255 

Hawaii John Concepcion 


28255 

Idaho Robert Thompson 28207 

NORTH Sean Mahoney, Internal 

SOUTH (Boise) Damian Eckstein 


28451 

6/30/09 

Illinois Jim De Kruif 

EXT. 

37188 

Moline & Rock Island (Metro Only) Chris Robinson, Internal 

NORTH Chicago Metro & Rockford Tom Peterson 

Eric Fenger, Internal 

37180 

SOUTH Jeff Nymark 

Ed Defeo, Internal 

33429 

Indiana Ben Schlueter 36551 

NORTH Nicholas Dawson, Internal 

SOUTH (Including Indianapolis) Kevin Russell 


36538 

Iowa Jim De Kruif 37188 

EAST Chris Robinson, Internal 

WEST Sean Cullinane 


23611 

Kansas Bill Kerns 28286 

Greater Kansas City Metro Nick Horton, Internal 

Excluding Kansas City Metro Dan Cestary 


37262 

Kentucky John Dean 36544 

Northern (Greater Cincinnati Metro Area) Heather Hester, Internal 

Louisville Kevin Russell 


36538 

Excluding Greater Cincinnati Metro & Louisville Tom Temeyer 


35231 

Louisiana Ken Parrish 36548 

NORTH Susan Nguyen, Internal 

SOUTH Rob Richardson 

Leanne Luttges, Internal 

28213 

Maine Darren Doughty 


36530 

Maryland David McDonough 

Victor Vanzo, Internal 

36529 

Massachusetts Rob Bonner 


36502 

Michigan Andrew Fischer 

Jason Nymark, Internal 

36555 

UPPER PENINSULA Steve Glover 

Michael Cimarik, Internal 

36533 

Minnesota Jeffery Rose 28282 

NORTH (Including Greater Minneapolis/ 

St. Paul Metro Area) 


SOUTH John Kelly 

Nick Biddle, Internal 

28231 

NORTHWEST David Douglas 


38082 

Mississippi Chris Jenkins 36514 

NORTH (Greater Memphis Area) Johanna Hagel, Internal 

SOUTH Jonathan Thompson 


37278 

Missouri Bill Kerns 

Nick Horton, Internal 

28286 

Montana Robert Gonzalez 


22928 

Nebraska Sean Cullinane 


23611 


NYSE Division, cont’d. (800) 462-1216 

Nevada Eric Momsen 28285 

NORTH (Reno & Lake Tahoe Area) Ian Gookin, Internal 

SOUTH (Las Vegas) Adam Barnett 23555 

Pritika Chand, Internal 

New Hampshire Darren Doughty 36530 


New Jersey Kevin Golden 36546 

NORTH (Including Princeton & Red Bank) Derrick Yapp, Internal 

SOUTH (Excluding Princeton & Red Bank) John Nesnay 35035 

Peter Pagnott, Internal 

New Mexico Gustavo De La Roca 22038 


New York Andy Ramirez 36527 

Bronx, Manhattan & Staten Island Vinny Minutolo, Internal 

Upstate excluding Buffalo, Jamestown, Philip Loftus 22337 

& Williamsville Richard Charron, Internal 

Upstate including Buffalo, Jamestown, Judy Spanos 28205 

& Williamsville Randy Wakely, Internal 

Brooklyn, Long Island, Queens, Kevin Folks 36528 

& Westchester County John Speicher, Internal 

North Carolina Barry Dyche 36507 

Ryan Henningsen, Internal 

North Dakota David Douglas 38082 


Ohio Christopher Downey 36558 

NORTH Lindsay O’Neill, Internal 

SOUTH John Dean 36544 

Heather Hester, Internal 

Oklahoma Ryan Mason 28214 

Jason Hurtienne, Internal 

Oregon Darren Kinney 28507 

S. OR (Corvallis, S. Pendleton) Kathleen Gill, Internal 

NORTH (Salem North) Robert Thompson 28207 


Pennsylvania John Nesnay 35035 

Greater Philadelphia Area Peter Pagnott, Internal 

Excluding Philadelphia Judy Spanos 28205 

Randy Wakely, Internal 

Puerto Rico Andrew Bockstein 37166 


Rhode Island Rob Bonner 36502 


South Carolina Jonathan Thompson 37278 


South Dakota David Douglas 38082 


Tennessee Tom Hoyt 36506 

EAST (Including Greater Nashville Metro Area) Mike Magnetta, Internal 

WEST Chris Jenkins 36514 

Johanna Hagel, Internal 

EXT. 

6/30/09 


EXT. 

Texas Bryan Sullivan 22450 

N. CEN (Corsicana, Fairfield & Amarillo) Frank Zasa, Internal 

E. TX (Paris to Lufkin) Dan Cestary 


37262 

Abilene, Wichita Falls & Waco, Dallas, Fort Worth Todd Ermenio 

Sharlene Ching, Internal 

28211 

El Paso Gustavo De La Roca 


22038 

Austin to San Antonio & Victoria Joseph Piccolo 

Lori Kamuf, Internal 

27035 

Greater Houston Rob Richardson 

Leanne Luttges, Internal 

28213 

NORTHWEST/SOUTHWEST Fred Miller 37266 

(Amarillo, Corpus Christi, Laredo, Lubbock, 

Midland & San Angelo) 


Utah Damian Eckstein 


28451 

Vermont Darren Doughty 


36530 

Virginia Ian Valentine 

Bill Kimbrough, Internal 

36511 

Virgin Islands Andrew Bockstein 


37166 

Washington Pete Black 28238 

CENT WA (Wenatchie; Yakima; Walla Walla) Duc Nguyen, Internal 

(Excluding Central) Robert Thompson 


28207 

West Virginia Tom Temeyer 


35231 

Wisconsin Shane Davis 

Daniel Nelson, Internal 

36517 

Wyoming Robert Gonzalez 22928 

NORTHWEST Kevin Borella, Internal 

SOUTHEAST Chris Burt 


27420 

National Sales Manager 

Bob Geppner 37335 

Divisional Sales Managers 

NORTHEAST CT, MA, ME, NH, NY, PA, RI, VT Dan Grip 36521 

MID-ATLANTIC DC, DE, MD, NC, NJ, PA, VA Roger Michaud 36518 

SOUTHEAST AL, FL, GA, LA, MS, PR, SC, 

TX, VI 

Joe Epstein 37202 

GREAT LAKES AL, AR, IN, KY, LA, MI, OH, TN Michael Mahoney 28266 

MIDWEST IA, IL, MN, MO, ND, NE, SD, WI Dan Reinhold 37727 

SOUTHWEST AZ, CA, CO, ID, KS, MO, NM, NV, Jim Escobedo 

OK, UT, WY 

38204 

PACIFIC AK, CA, HI, ID, MT, NV, OR, WA, 

WY, GUAM 

John McGee 24842 


CONTACT US 

Contact Us 

TELEPHONE NUMBERS 

Sales and Marketing Services* . . . . . . . . . . . . . . . . . . . . . . (800) 223-2141 

Direct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (650) 312-3114 

Advisor Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (800) 524-4040 

Direct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (916) 463-1500 

Information about client accounts, trades, commissions and exchanges. 

Franklin Templeton Variable Insurance Funds . . . . . . . . . . (800) 530-2432 

Requests for fund information and sales literature. 

Franklin Templeton Order Room** . . . . . . . . . . . . . . . . . . . (800) 227-5041 

Purchases of Franklin Templeton funds. 

Institutional Services Group . . . . . . . . . . . . . . . . . . . . . . . . . (800) 321-8563 

Information on sales literature, sales ideas and support for the financial 

institutions community. 

Online Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (877) 236-7932 

Assistance with our website, franklintempleton.com. 

Franklin Templeton Portfolio Advisors, Inc. . . . . . . . . . . . . (800) 822-8464 

Information about separately managed accounts. 

franklintempleton.com/separateaccounts 

Registered Investment Advisor Division . . . . . . . . . . . . . . . (888) 225-4250 

Supports fee-based registered investment advisors. 

Retirement Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (800) 527-2020 

Retirement planning, IRA, SEP IRA, SIMPLE IRA, 403(b) and Profit Sharing Plans. 

Retirement Special Products Group . . . . . . . . . . . . . . . . . . (800) 818-4030 

Services outside Custodial Business Retirement accounts including 401(k) Plans, 

Profit Sharing and Money Purchase Plans, Defined Benefit Plans, ERISA and Non- 

ERISA 403(b) Plans, 457 Plans and other qualified retirement plans. 

TDD (Hearing Impaired) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (800) 851-0637 

WEBSITE 

franklintempleton.com 

Visit our Financial Advisor site for daily fund prices, monthly performance, the 

latest sales tools and manager commentaries, and to order literature and manage 

your client accounts online. 

* When ordering literature, please be sure to use your EXPRESS number. 

** When placing trades for purchases, sales and conversions, please be sure to use the 

fund number. 

ADDRESSES 

Customer Accounts 

Franklin Funds 

Standard 

P.O. Box 997152 

Sacramento, CA 95899-7152 

Overnight 

3344 Quality Drive 

Rancho Cordova, CA 95670-7313 

Literature Requests 

P.O. Box 2410 


Templeton & Mutual Series Funds 

Standard 

P.O. Box 33030 

St. Petersburg, FL 33733-8030 

Overnight 

100 Fountain Parkway 


Retirement Plan Accounts 

Franklin Funds 

Standard 

Franklin Templeton Bank & Trust 

Attn: FTISI Retirement Plan Operations 

P.O. Box 997153 

Sacramento, CA 95899-9974 

Overnight 



3344 Quality Drive 


Templeton & Mutual Series Funds 

Standard 



P.O. Box 33033 


Overnight 



100 Fountain Parkway 


Franklin Templeton Portfolio Advisors, Inc. 

Standard/Overnight 

One Franklin Parkway 

San Mateo, CA 94403-1906 

6/30/09 

To ensure that the highest quality of service is being provided, telephone calls 

placed to or by representatives in Franklin Templeton’s service departments may be 

accessed, recorded and monitored. 


SPECIALIZED EXPERTISE 

TRUE DIVERSIFICATION 

RELIABILITY YOU CAN TRUST 

Franklin Templeton Investments 

Gain From Our Perspective ® 

Franklin Templeton’s distinct multi-manager structure combines the 

specialized expertise of three world-class investment management groups— 

Franklin, Templeton and Mutual Series. 

Each of our portfolio management groups operates autonomously, relying 

on its own research and staying true to the unique investment disciplines 

that underlie its success. 

Franklin. Founded in 1947, Franklin is a recognized leader in fixed 

income investing and also brings expertise in growth- and value-style 

U.S. equity investing. 

Templeton. Founded in 1940, Templeton pioneered international investing 

and, in 1954, launched what has become the industry’s oldest global 

fund. Today, with offices in over 25 countries, Templeton offers investors 

a truly global perspective. 

Mutual Series. Founded in 1949, Mutual Series is dedicated to a unique 

style of value investing, searching aggressively for opportunity among 

what it believes are undervalued stocks, as well as arbitrage situations and 

distressed securities. 

Because our management groups work independently and adhere to different 

investment approaches, Franklin, Templeton and Mutual Series funds 

typically have distinct portfolios. That’s why our funds can be used to build 

truly diversified allocation plans covering every major asset class. 

At Franklin Templeton Investments, we seek to consistently provide investors 

with exceptional risk-adjusted returns over the long term, as well as the 

reliable, accurate and personal service that has helped us become one of the 

most trusted names in financial services. 

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

Franklin Templeton Distributors, Inc. 

One Franklin Parkway 

San Mateo, CA 94403-1906 

< GAIN FROM OUR PERSPECTIVE ® > 

Franklin Templeton Investments 

Your Source For: 

Mutual Funds 

Retirement Plans 

529 College Savings Plans 

Separate Accounts 

(800) 223-2141 

franklintempleton.com 

DLR G0209 07/09 

Franklin Templeton Investments Dealer Facts Guide Q2 09

Q2 Dealer Facts Guide - Franklin Templeton

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