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Asset Allocation Franklin s A TARGETED APPROACH TO ASSET ALLOCATION Franklin Templeton Investments Gain From Our Perspective At Franklin Templeton Investments, we re dedicated to one goal: delivering exceptional
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Asset Allocation Franklin s A TARGETED APPROACH TO ASSET ALLOCATION Franklin Templeton Investments Gain From Our Perspective At Franklin Templeton Investments, we re dedicated to one goal: delivering exceptional asset management for our clients. By bringing together multiple, world-class investment teams in a single firm, we re able to offer specialized expertise across styles and asset classes, all supported by the strength and resources of one of the world s largest asset managers. This has helped us to become a trusted partner to individual and institutional investors across the globe. Focus on Investment Excellence At the core of our firm, you ll find multiple independent investment teams each with a focused area of expertise from traditional to alternative strategies and multi-asset solutions. And because our portfolio groups operate autonomously, their strategies can be combined to deliver true style and asset class diversification. All of our investment teams share a common commitment to excellence grounded in rigorous, fundamental research and robust, disciplined risk management. Decade after decade, our consistent, research-driven processes have helped Franklin Templeton earn an impressive record of strong, long-term results. Global Perspective Shaped by Local Expertise In today s complex and interconnected world, smart investing demands a global perspective. Franklin Templeton pioneered international investing over 60 years ago, and our expertise in emerging markets spans more than a quarter of a century. Today, our investment professionals are on the ground across the globe, spotting investment ideas and potential risks firsthand. These locally based teams bring in-depth understanding of local companies, economies and cultural nuances, and share their best thinking across our global research network. Strength and Experience Franklin Templeton is a global leader in asset management serving clients in over 150 countries.* We run our business with the same prudence we apply to asset management, staying focused on delivering relevant investment solutions, strong long-term results and reliable, personal service. This approach, focused on putting clients first, has helped us to become one of the most trusted names in financial services. * As of 12/31/15. Clients are represented by the total number of shareholder accounts. Not FDIC Insured May Lose Value No Bank Guarantee The Strategy Franklin s seek to provide the highest level of long-term total returns consistent with their respective levels of risk. Designed for investors looking for a managed solution that fits their risk preference, the funds offer three investments managed to distinct risk profiles. Managed by the Franklin Templeton Solutions (FT Solutions) team, the funds can help diversify your portfolio in a single investment, providing you a simple way to help achieve your long-term investment goals Balancing Strategic Allocations and Active Diversification This approach seeks to establish strategic allocations complemented by measured tactical adjustments to take advantage of forward-looking economic and market opportunities identified by the FT Solutions team s process. This process leverages both the global resources of Franklin Templeton and external research to help the team develop timely investment ideas across markets and asset classes. Proprietary Fund Analytics Our fund research team is comprised of dedicated asset class analysts who perform intensive quantitative and qualitative analysis to develop a select list of Franklin Templeton funds for consideration by the portfolio manager. The funds seek to combine strategies with persistent, historically strong performance into complementary groupings, as well as tilt the portfolio through fund selection to take advantage of short- to intermediate-term opportunities. Focused on Long-Term, Risk-Adjusted Performance The funds approach offers the potential for competitive relative returns with lower overall volatility in a variety of market conditions. This is sought through a portfolio construction process which seeks to leverage inputs on potential opportunities while weighing risks. General Target Allocations Higher Equity Funds Fixed Income Funds 20% Franklin Growth 80% Potential Return 40% 40% 60% Franklin Moderate Lower Lower 60% Franklin Conservative Relative Risk Higher Each fund s risk/reward potential is based on the fund s goal and level of risk, and is not indicative of the fund s actual or implied performance or portfolio composition, which may change on a continuous basis. Percentages are representative of target allocations to general asset classes in the portfolio. They reflect the guidelines used by the funds manager to allocate assets among broad asset classes. The actual allocation ranges may be changed from time to time by the funds manager without shareholder approval. franklintempleton.com Franklin s 1 The Benefits 1 2 Asset Allocation Expertise Franklin Templeton Solutions has been managing money for investors for 21 years. 1 Combined with the global expertise of the Franklin Templeton complex, the team s process is designed to provide a powerful source of timely investment themes and trends. Diversification The s access to a broad range of underlying Franklin Templeton funds can provide diversification across style, sector and region. Investors should be aware that diversification does not guarantee a profit or protect against a loss. As of December 31, 2015 Franklin Conservative Franklin Moderate Franklin Growth Portfolio Breakdown 2 Fixed Income Funds % Domestic Equity Funds % Foreign Equity Funds % Alternatives Funds % Cash & Cash Equivalents % Domestic Equity Funds % Fixed Income Funds % Foreign Equity Funds % Alternatives Funds % Cash & Cash Equivalents % Domestic Equity Funds % Foreign Equity Funds % Fixed Income Funds % Alternatives Funds % Cash & Cash Equivalents % Fund Templeton Global Total Return Fund % Holdings 2 Frankling Low Duration Total Return Fund 12.70% Franklin Growth Fund % Franklin US Government Securities Fund 7.75% Franklin Rising Dividends Fund % FSS Strategic Income Fund % Franlin DynaTech Fund % Franklin K2 Alternative Strategies Fund 3.54% Templeton Foreign Fund % Franklin Mutual European Fund % Franklin Templeton Emerging Markets Debt Opportunities Fund % Franklin International Small Cap Growth Fund 2.96% ishares TIPS Bond ETF % Franklin Utilities Fund % Franklin Pelagos Commodities Strategy Fund 1.85% Franklin Growth Opportunities Fund % Financial Select Sector SPDR Fund % Franklin Real Estate Securities Fund % Franklin Short Duration US Government ETF 1.12% db x-trackers MSCI Europe Hedged Equity Fund % Franklin International Growth Fund % Templeton Frontier Markets Fund % ishares Core MSCI Emerging Markets ETF 0.84% WisdomTree Japan Hedged Equity Fund 0.79% FSS Franklin Small Cap Growth Fund % ishares S&P 500 Value ETF % ishares Global Infrastructure ETF % Cash & Cash Equivalents % Franklin Growth Fund % Templeton Global Total Return Fund % Franklin Rising Dividends Fund % Franklin Low Duration Total Return Fund 7.77% Franlin DynaTech Fund % Franklin Mutual European % Templeton Foreign Fund % Franklin US Government Securities Fund 4.53% Franklin International Small Cap Growth Fund 4.49% Franklin K2 Alternative Strategies Fund 3.54% FSS Strategic Income Fund % Franklin Utilities Fund % Franklin Growth Opportunities Fund % Financial Select Sector SPDR Fund % Franklin Real Estate Securities Fund % Franklin Pelagos Commodities Strategy Fund 1.84% Franklin Templeton Emerging Markets Debt Opportunities Fund % Franklin International Growth Fund % Templeton Frontier Markets Fund % WisdomTree Japan Hedged Equity Fund 1.18% ishares Core MSCI Emerging Markets ETF 1.17% ishares TIPS Bond ETF % db x-trackers MSCI Europe Hedged Equity Fund % FSS Franklin Small Cap Growth Fund % Franklin Short Duration US Government ETF 0.83% ishares S&P 500 Value ETF % ishares Global Infrastructure ETF % Cash & Cash equivalents % Franklin Growth Fund % FMT Rising Dividends Fund % Franlin DynaTech Fund % Templeton Foreign Fund % Franklin Mutual European Fund % Franklin International Small Cap Growth Fund 6.41% Franklin Utilities Fund % Franklin Growth Opportunities Fund % Templeton Global Total Return Fund % Franklin K2 Alternative Strategies Fund 3.56% Frankling Low Duration Total Return Fund 2.74% Financial Select Sector SPDR Fund % Franklin Real Estate Securities Fund % Templeton Frontier Markets Fund % Franklin International Growth Fund % Franklin Pelagos Commodities Strategy Fund 1.84% ishares Core MSCI Emerging Markets ETF 1.61% WisdomTree Japan Hedged Equity Fund 1.57% Franklin US Government Securities Fund 1.49% FSS Strategic Income Fund % FSS Franklin Small Cap Growth Fund % db x-trackers MSCI Europe Hedged Equity Fund % Franklin Templeton Emerging Markets Debt Opportunities Fund % ishares Global Infrastructure ETF % ishares S&P 500 Value ETF % ishares TIPS Bond ETF % Franklin Short Duration US Government ETF 0.30% Cash & Cash Equivalents % 1. Franklin Templeton Solutions (FT Solutions) is a global investment management group dedicated to multi-strategy solutions and is comprised of individuals representing various registered investment advisory entity subsidiaries of Franklin Resources, Inc., a global investment organization operating as Franklin Templeton Investments (FTI). Certain individuals advise FT Solutions mandates through K2 Advisors LLC ( K2 ), an FTI adviser that forms part of an investment group founded in 1994 through existing advisory entities or their predecessors. FT Solutions originated in 2007 to combine the research and the oversight of the multi-strategy investment solutions offered by FTI. 2 Franklin s franklintempleton.com 3 Relatively Lower Volatility Historically The funds focus on diversifying across multiple asset classes and sectors has allowed them to provide competitive returns with generally lower volatility compared to certain key equity benchmarks for the ten-year period ended December 31, Return 15% Risk vs. Return Comparison 3 (Without 5.75% Initial Sales Charge) 10-Year Period Ended December 31, % 5% Franklin Conservative Class A Barclays Multiverse Franklin Growth Class A Franklin Moderate Class A MSCI AC World Index 0% 0% 5% 10% 15% 20% Risk If the sales charges had been included, the returns would have been lower. Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. The funds investment returns and principal values will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/ or visit franklintempleton.com for the most recent month-end performance. 2. As of 12/31/15. Holdings are subject to change. For updated information, call Franklin Templeton Investments at (800) DIAL BEN/ or visit franklintempleton.com. 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 holdings list. Due to rounding, the sum of portfolio holdings may not equal 100%. The asset class of each underlying fund is based on its predominant investments under normal market conditions. Alternatives Funds refers to the fund s investments in underlying Franklin commodities and managed futures funds. 3. Source: 2016 Morningstar. 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. Past performance is no guarantee of future results. Fund returns represent average annual total returns, do not include sales charges and assume reinvestment of dividends and capital gains. Bonds are represented by the Barclays Multiverse Index and stocks are represented by the MSCI All Country World Index. Index data represents average annual total returns and includes reinvestment of dividends. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. Risk is measured by the annualized standard deviation of monthly total returns. franklintempleton.com Franklin s 3 The Results Growth of a $10,000 Investment 4 Class A (With 5.75% Maximum Initial Sales Charge) December 31, 1996 December 31, 2015 $30,000 $20,000 $10,000 Initial Investment $0 12/96 2/00 4/03 6/06 Calendar Year Returns Class A Without 5.75% Initial Sales Charge 4, Franklin Conservative 9.92% 8.29% % 19.67% 10.00% -0.71% 7.99% 10.39% 3.35% -2.26% Franklin Moderate 11.57% 9.40% % 24.68% 11.97% -1.49% 9.34% 14.35% 4.07% -1.89% Franklin Growth 13.90% 10.58% % 31.08% 14.31% -3.15% 10.52% 20.98% 4.95% -1.66% MSCI All Country World Index 21.53% 12.18% % 35.41% 13.21% -6.86% 16.80% 23.44% 4.71% -1.84% Barclays Multiverse Index 6.92% 9.23% 3.76% 8.04% 5.84% 5.55% 4.84% -2.19% 0.48% -3.29% 4. The funds offer other share classes, subject to different fees and expenses that will affect their performance. Past performance is no guarantee of future results. 4 Franklin s franklintempleton.com $29,594 Franklin Growth $28,872 Franklin Moderate $26,892 Franklin Conservative 8/09 10/12 12/15 Average Annual Total Returns Class A (Periods Ended December 31, 2015) With 5.75% Maximum Sales Charges 4 Without Sales Charge Total Annual Operating Expenses Class A 7 1-Year 5-Year 10-Year Since Inception (12/31/96) 1-Year 5-Year 10-Year Since Inception (12/31/96) With Waiver Without Waiver 6 Franklin Conservative -7.90% 2.42% 4.09% 5.34% -2.26% 3.64% 4.71% 5.67% 1.27% 1.27% Franklin Moderate -7.54% 3.46% 4.76% 5.74% -1.89% 4.69% 5.68% 6.07% 1.29% 1.29% Franklin Growth -7.30% 4.73% 5.11% 5.88% -1.66% 5.97% 5.74% 6.21% 1.29% 1.34% 5. Source: 2016 Morningstar. Index data includes reinvestment of dividends. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. 6. The Franklin Growth -Class A has an expense reduction contractually guaranteed through at least April 30, All three funds may also have a fee waiver associated with any investments it makes in a Franklin Templeton money fund, an arrangement that is contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the expense reduction and fee waiver, as applicable; without these reductions, the results would have been lower. 7. The funds expense ratio includes estimated indirect expenses of their underlying funds. franklintempleton.com Franklin s 5 A FEW MORE WORDS ABOUT ASSET ALLOCATION While an asset allocation plan can be a valuable tool to help reduce overall volatility, all investments involve risks, including possible loss of principal. Because these funds invest in underlying funds, which may engage in a variety of investment strategies involving certain risks, the Franklin s are subject to those same risks. Typically, the more aggressive the investment, or the greater the potential return, the more risk involved. Generally, investors should be comfortable with some fluctuation in the value of their investments, especially over the short term. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in a fund adjust to a rise in interest rates, that fund s share price may decline. Foreign investing carries additional risks such as currency and market volatility and political or social instability; risks which are heightened in developing countries. These risks are described in the funds prospectus. Investors should consult their financial advisor for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives and risk tolerance. Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, CA (800) DIAL BEN / franklintempleton.com Franklin Templeton Investments Your Source for: Mutual Funds Retirement 529 College Savings Plans Separately Managed Accounts Franklin Symbols: Conservative Moderate Class A: FTCIX Class A: FMTIX Class C: FTCCX Class C: FTMTX Class R: FTCRX Class R: FTMRX Advisor: FTCZX Advisor: FMTZX Growth Class A: FGTIX Class C: FTGTX Class R: FGTRX Advisor: FGTZX This brochure must be preceded or accompanied by a current Franklin s summary prospectus and/or prospectus. Please read a prospectus carefully before you invest or send money. Investors should carefully consider a fund s investment goals, risks, charges and expenses before investing Franklin Templeton Investments. All rights reserved. UPD 05/16 FAS XINV 02/16
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