Franklin Corefolio Allocation Fund Class A, C

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1 Franklin Corefolio Allocation Fund Class A, C Total Return Multi-Asset Product Profile Product Details Fund Assets $837,587, Fund Inception Date 08/15/2003 Investment Style Benchmark Lipper Classification Morningstar Category Dividend Frequency Third-Party Fund Data Overall Morningstar Rating TM Class A 1 Total Return S&P 500 Index MSCI World Index Mixed-Asset Target Allocation Aggregate Growth Funds Allocation 85%+ Equity Semiannually Inception Date Class A 08/15/2003 Class C 08/15/2003 CUSIP NASDAQ Symbol Class A P 786 FTCOX Class C P 760 FTCLX Class A Class C Maximum 5.50% initial sales charge 1.00% contingent deferred sales charge (CDSC) in the first year only Total Annual Operating Expenses Class A 1% Class C 1.75% As of 09/30/2018 the fund s Class A shares received a 5 star overall Morningstar Rating, measuring risk-adjusted returns against 176, 151 and 108 U.S.-domiciled Allocation 85%+ Equity mutual funds and exchange traded funds over the 3-, 5- and 10- year periods, respectively. A fund s overall rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics. Fund Description Franklin Corefolio Allocation Fund seeks capital appreciation through a diversified, multidisciplined approach. It targets both growth- and value-style investments by investing in approximately equal allocations of 25% to Franklin Growth Opportunities Fund, Franklin Growth Fund, Franklin Mutual Shares Fund and Templeton Growth Fund. Performance Data 2,3 Average Annual Total Returns 4,5 (%) 3 Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Inception Class A - With Sales Charges Class A - Without Class C - With Class C - Without S&P 500 Index MSCI World Index % 10% 0% -10% Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Inception Class A - With Class A - Without S&P 500 Index MSCI World Index Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. The fund s investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/ or visit franklintempleton.com for the most recent month-end performance. Calendar Year Returns (% Without ) Class A Class C S&P 500 Index MSCI World Index If the sales charge had been included, the returns would have been lower. 2. Class A: Prior to 9/10/18, these shares were offered at a higher initial sales charge of 5.75%; thus actual returns would have differed. Total returns with sales charges have been restated to reflect the current maximum initial sales charge of 5.50%. Class C: Prior to 01/01/2004, these shares were offered with an initial sales charge; thus actual returns may differ. The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details. 3. Source for Index: FactSet. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. 4. Periods shorter than one year are shown as cumulative total returns. 5. Since inception return for the benchmark is calculated to the fund inception date. Not FDIC Insured May Lose Value No Bank Guarantee

2 Portfolio Manager Insight 6 Performance Review QUARTERLY KEY PERFORMANCE DRIVERS HELPED HURT 6. The information provided is not a complete analysis of every material fact regarding any country, market, industry, security or fund. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this material and may change without notice. A portfolio manager s assessment of a particular security, investment or strategy is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy; it is intended only to provide insight into the fund s portfolio selection process. Holdings are subject to change. Portfolio Diversification In Franklin Growth Fund, an underweighting in Facebook proved positive as the social media company s shares struggled amid accusations of data privacy breaches. A position in Apple also benefited relative performance as shares of the technology giant rallied to a record high following strong quarterly financial results. Amazon.com continues to see acceleration of its cloud computing business, which supported Franklin Growth Opportunities Fund. The manager considers Amazon a leader in the infrastructure-as-a-service space. With e-commerce in its early days, the manager points to the growth and sustainability of Amazon, which continues to add new categories and countries to its footprint. In Franklin Mutual Shares Fund, shares of Eli Lilly & Company were boosted by strong quarterly results announced in July. Additional drivers included attractive fundamentals and less concern among investors regarding the direct impact on the pharmaceutical industry of the Trump administration s efforts to lower prescription drug prices. In the energy sector, Templeton Growth Fund s strategy of rotating out of price-sensitive oil services stocks and into large, integrated energy firms as the cycle matures was positive. Integrated energy firms in aggregate look set to generate more free cash flow this year than they did when oil was at US$100 per barrel. In Templeton Growth Fund, shares of Israeli generic drug-maker Teva Pharmaceutical Industries were volatile during the period. Investors weighed restructuring progress and positive drug trials against regulatory approval of a competitor s migraine therapy and lukewarm messaging on second-half conditions. The manager views these concerns as immaterial to the long-term investment thesis. In Franklin Mutual Shares Fund, the stock price of General Electric (GE) dropped in September when it stated that fan blades in some of its power-plant turbines were experiencing oxidation problems. Immediately after period end, GE unexpectedly replaced its chief executive officer. Relative performance for Franklin Growth Opportunities Fund was pulled lower by the declining shares of Nevro. The medical device company, which focuses on pain management, has been struggling with sales force challenges and patent disputes. Despite these obstacles, the manager does not underestimate Nevro s long-term growth prospects based on its differentiated and superior technology and its large opportunity in the current global spinal stimulation market. Martin Marietta Materials was a detractor in the materials sector in Franklin Growth Fund. Competition in the cement business along with weather-related infrastructure project delays have had a negative impact on the building materials company s stock. The manager believes the company is positioned to benefit from ramping infrastructure spending at both the state and federal level, and should continue to capitalize on a healthy private construction backdrop in its markets. Underlying Funds Top Ten Holdings 7 Percent of Total Top Holdings % APPLE INC 2.80 ELI LILLY & CO 2.37 AMAZON.COM INC 2.13 MICROSOFT CORP 2.06 MEDTRONIC PLC 1.92 MERCK & CO INC 1.89 WALT DISNEY CO 1.68 CISCO SYSTEMS INC 1.64 ROYAL DUTCH SHELL PLC 1.55 ALPHABET INC Holdings of the same issuers have been combined. Top ten holdings information is historical and may not reflect current or future portfolio characteristics. All holdings are subject to change. The information provided is not a recommendation to purchase, sell, or hold any particular security. The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included. franklintempleton.com 2

3 Geographic Allocation 8 Percent of Total NORTH AMERICA EUROPE ASIA 5.55 MID-EAST/AFRICA 0.43 CASH & CASH EQUIVALENTS % 20% 40% 60% 80% 100% Supplemental Performance Statistics Supplemental Risk Statistics 9 Class A 3 Yrs 5 Yrs 10 Yrs Standard Deviation (%) Beta (%) Beta Sharpe Ratio Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. The fund s investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/ or visit franklintempleton.com for the most recent month-end performance. Investment Philosophy The fund seeks capital appreciation by investing approximately 25% in four underlying funds Franklin Growth Opportunities Fund, Franklin Growth Fund, Templeton Growth Fund and Franklin Mutual Shares Fund. These underlying funds form a portfolio consisting of both growth- and value-style stocks from around the world across a range of market capitalizations. Investment Process The fund will invest in approximately equal allocations of four underlying fund, providing a cost-effective means of allocation assets across different investment advisors and types of investments. Diversification - We typically seek broad industry and country exposures for added diversification opportunities. Low Common Holdings - The distinct investment approaches of the underlying managers generally leads to a low number of holdings common to all four underlying funds. Automatic Rebalancing - We maintain consistent exposures to distinct investment strategies throughout changing market environments. Investment Team Portfolio Manager Years with Firm Years Experience T. Anthony Coffey, CFA, Senior Vice President - Portfolio Manager Beta: A measure of the magnitude of a portfolio s past share-price fluctuations in relation to the ups and downs of the overall market (or appropriate market index). The market (or index) is assigned a beta of 1.00, so a portfolio with a beta of 1.20 would have seen its share price rise or fall by 12% when the overall market rose or fell by 10%. Sharpe Ratio: To calculate a Sharpe ratio, an asset s excess returns (its return in excess of the return generated by risk-free assets such as Treasury bills) are divided by the asset s standard deviation. 8. Information is historical and may not reflect current or future portfolio characteristics. Percentage may not equal 100% due to rounding. All holdings are subject to change. 9. Beta and Tracking Error information are displayed for the product versus the S&P 500 Index. franklintempleton.com 3

4 Standard Deviation: A measure of the degree to which returns vary from the average of its previous returns. The larger the standard deviation, the greater the likelihood (and risk) that performance will fluctuate from the average return. Tracking Error: Measure of the deviation of the return of a product compared to the return of a benchmark over a fixed period of time. Expressed as a percentage. The more passively the investment is managed, the smaller the tracking error. franklintempleton.com 4

5 What Are The Risks? All investments involve risks, including possible loss of principal. Because the Franklin Corefolio Allocation Fund invests in underlying funds that may engage in a variety of investment strategies involving certain risks, this fund of funds may be subject to those same risks. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general conditions. Foreign investing carries additional risks such as currency and market volatility, and political or social instability; risks which are heightened in developing countries. Smaller or relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Value securities may not increase in price as anticipated or may decline further in value. These and other risks, including investments in specialized industry sectors such as the technology sector, which has been among the most volatile in the market, are discussed in the fund s prospectus. Important Legal Information Investors should carefully consider a fund s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN/ or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money. CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. Standard & Poor s, S&P and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC. S&P does not sponsor, endorse, sell or promote and S&P index-based product. MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This report is not prepared or endorsed by MSCI. Important data provider notices and terms available at: 1. Source: Morningstar, 09/30/2018. For each mutual fund and exchange traded fund with at least a 3-year history, Morningstar calculates a Morningstar Rating based on how a fund ranks on a Morningstar Risk-Adjusted Return measure against other funds in the same category. This measure takes into account variations in a fund s monthly performance, and does not take into account the effects of sales charges and loads, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The weights are: 100% 3-year rating for months of total returns, 60% 5-year rating/40% 3-year rating for months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods. The Fund s Class A shares received a Morningstar Rating of 4, 4 and 5 star(s) for the 3-, 5- and 10-year periods, respectively. Morningstar Rating is for the named share class only; other classes may have different performance characteristics. Past performance is not an indicator or a guarantee of future performance. Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, CA (800) DIAL BEN/ franklintempleton.com 2018 Franklin Templeton Investments. All rights reserved. 470 PP 09/18