Franklin Mutual Series. Franklin Templeton Investment Funds Franklin Mutual Euroland Fund - A(acc) EUR. Data as of December 31, 2014

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1 Franklin Mutual Series Data as of December 31, 2014 Franklin Templeton Investment Funds Franklin Mutual Euroland Fund - A(acc) EUR Source for data and information provided by Franklin Templeton Investments, as of the date of this presentation, unless otherwise noted. Benchmark related data provided by FactSet, as of the date of this presentation, unless otherwise noted.

2 Table of Contents Portfolio Summary... 3 Historical Performance... 4 Calendar Year Returns... 5 Portfolio Characteristics... 6 Top Ten Holdings... 7 Geographic Allocation... 8 Sector Allocation... 9 Performance Attribution by Country Performance Attribution by Sector Performance Attribution by Security Performance Risk Statistics Index Market Returns Index Sector Returns Glossary Important Disclosures

3 Portfolio Summary Franklin Mutual Euroland Fund - A(acc) EUR As of December 31, 2014 Morningstar Category Eurozone Large-Cap Equity Investment Style Deep value Fund Inception Date October 14, 2008 Share Class Inception Date October 14, 2008 Primary Benchmark MSCI Daily Net TR EMU Euro Index Base Currency for Fund EUR Base Currency for Share Class EUR Total Net Assets (EUR) 13,055, Asset Allocation Undervalued Equities: 96.91% Cash & Other Net Assets: 2.22% Other: 0.87% Number of Issuers 45 Total Expense Ratio 1.89% Portfolio Manager(s) Philippe Brugère-Trélat Katrina Dudley, CFA Fund Identifiers ISIN Code SEDOL Code Bloomberg Code Fund Ratings (December 31, 2014) Overall Morningstar Rating United States United States LU B3DKFZ7 TEMFEAA LX Summary of Investment Objectives The Fund aims to achieve long-term capital appreciation by investing principally in equity securities of companies incorporated or having their principal activities in Euroland countries that the investment manager believes are available at prices less than their intrinsic value. The Fund may also seek to invest in securities of companies involved in mergers, consolidations, liquidations and reorganizations. To a lesser extent, the Fund may also purchase debt securities of companies involved in reorganization or financial restructuring. Holdings of the same issuer have been combined. 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. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Percentage may not equal 100% due to rounding. Past performance does not guarantee future results. 3

4 Historical Performance Franklin Mutual Euroland Fund - A(acc) EUR As of December 31, 2014 Cumulative Performance (%) Inception Date 1 Mth 3 Mths 6 Mths YTD 1 Yr 3 Yrs 5 Yrs Franklin Mutual Euroland Fund - A(acc) EUR Net of Fees MSCI Daily Net TR EMU Euro Index Since Incept Annualized Performance (%) Inception Date 1 Yr 3 Yrs 5 Yrs Since Incept Franklin Mutual Euroland Fund - A(acc) EUR Net of Fees MSCI Daily Net TR EMU Euro Index All performance data shown is in the Fund currency stated and net of management fees. Sales charges and other commissions, taxes and other relevant costs paid by the investor are not included in the calculations. The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance does not guarantee future results. Current performance may differ from figures shown. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, performance may also be affected by currency fluctuations. Performance data may represent blended share class performance, e.g., hybrid created from an A(dis) share class which was converted to A(acc). The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details. *Cumulative Total Returns 4

5 Calendar Year Returns Franklin Mutual Euroland Fund - A(acc) EUR As of December 31, % % % % -18% Franklin Mutual Euroland Fund - A(acc) EUR Net of Fees MSCI Daily Net TR EMU Euro Index All performance data shown is in the Fund currency stated and net of management fees. Sales charges and other commissions, taxes and other relevant costs paid by the investor are not included in the calculations. The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance does not guarantee future results. Current performance may differ from figures shown. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, performance may also be affected by currency fluctuations. Performance data may represent blended share class performance, e.g., hybrid created from an A(dis) share class which was converted to A(acc). 5

6 Portfolio Characteristics Franklin Mutual Euroland Fund vs. MSCI Daily Net TR EMU Euro Index As of December 31, 2014 Price to Earnings Portfolio Benchmark Weighted Average 15.07x 18.72x Median 17.26x 19.57x Price to Cash Flow Portfolio Benchmark Weighted Average 4.88x 8.15x Market Capitalization (Millions EUR) Portfolio Benchmark Weighted Average 25,090 41,993 Median 12,032 10,067 Max 176, ,956 Min 713 1,921 Median 5.61x 10.61x Price to Book Value Portfolio Benchmark Weighted Average 0.93x 1.51x Median 1.24x 1.86x Dividend Yield Portfolio Benchmark Weighted Average 1.97% 3.17% Median 2.56% 2.62% The portfolio characteristics listed are based on the Fund's underlying holdings, and do not necessarily reflect the Fund's characteristics. Due to data limitations all equity holdings are assumed to be the primary equity issue (usually the ordinary or common shares) of each security's issuing company. This methodology may cause small differences between the portfolio's reported characteristics and the portfolio's actual characteristics. In practice, Franklin Templeton's portfolio managers invest in the class or type of security which they believe is most appropriate at the time of purchase. The market capitalization figures for both the portfolio and the benchmark are at the security level, not aggregated up to the main issuer. The dividend yield quoted here is the yield on securities within the Fund's portfolio and should not be used as an indication of the income received from this portfolio. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Source: FactSet. For the portfolio, the Price to Earnings, Price to Cash Flow, and Price to Book Value calculations for the weighted average use harmonic means. Values less than 0.01 (i.e., negative values) are excluded and values in excess of 200x are capped at 200x. Yields above 100% are also excluded. For the benchmark (if applicable), no limits are applied to these ratios in keeping with the benchmark's calculation methodology. Market capitalization statistics are indicated in the base currency for the portfolio presented. Past performance does not guarantee future results. 6

7 Top Ten Holdings Franklin Mutual Euroland Fund As of December 31, 2014 Name of Issuer Country Industry % of Total 1. ACCOR SA France Consumer Services KONINKLIJKE KPN NV Netherlands Telecommunication Services THYSSENKRUPP AG Germany Materials VOLKSWAGEN AG Germany Automobiles & Components PEUGEOT SA France Automobiles & Components BNP PARIBAS SA France Banks INTESA SANPAOLO SPA Italy Banks AGEAS Belgium Insurance ENEL SPA Italy Utilities AP MOELLER - MAERSK A/S Denmark Transportation 3.05 Total The Ten Largest Holdings represent the ten largest holdings of the fund as of the date indicated. These securities do not represent all of the securities purchased, sold or recommended for advisory clients, and the reader should not assume that investment in the securities listed was or will be profitable. All portfolio holdings are subject to change. Holdings of the same issuer have been combined. 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. 7

8 Geographic Allocation Franklin Mutual Euroland Fund vs. MSCI Daily Net TR EMU Euro Index As of December 31, 2014 Germany France Italy United Kingdom Netherlands Greece Austria Belgium Denmark Cash & Cash Equivalents Switzerland Portfolio % Index % Over/Under Europe Germany France Italy United Kingdom Netherlands Greece Austria Belgium Denmark Switzerland Ireland Spain Finland Other Cash & Cash Equivalents Cash & Cash Equivalents Ireland Spain Finland Portugal 0% 7% 14% 21% 28% 35% Franklin Mutual Euroland Fund MSCI Daily Net TR EMU Euro Index Weightings as percent of total. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 8

9 Sector Allocation Franklin Mutual Euroland Fund vs. MSCI Daily Net TR EMU Euro Index As of December 31, 2014 Financials Consumer Discretionary Industrials Materials Telecommunication Services Portfolio % Index % Over/Under Financials Consumer Discretionary Industrials Materials Telecommunication Services Energy Utilities Consumer Staples Cash & Cash Equivalents Information Technology Health Care Energy Utilities Consumer Staples Cash & Cash Equivalents Information Technology Health Care 0% 6% 12% 18% 24% 30% Franklin Mutual Euroland Fund MSCI Daily Net TR EMU Euro Index Weightings as percent of total. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 9

10 Performance Attribution by Country Franklin Mutual Euroland Fund vs. MSCI EMU Index January 1, 2014-December 31, 2014 United Kingdom Portugal Denmark France Ireland Italy Belgium Germany Cash & Other Net Assets PORTFOLIO INDEX ATTRIBUTION EFFECTS Average Weight Total Return Average Weight Total Return Allocation Effect Selection Effect Total Effect United Kingdom Portugal Denmark France Ireland Italy Belgium Germany Cash & Other Net Assets Greece Greece Total Effect (%) Data is a result of our bottom-up process and funds are not managed to be in line with the benchmark. 10

11 Performance Attribution by Sector Franklin Mutual Euroland Fund vs. MSCI EMU Index January 1, 2014-December 31, 2014 Industrials Materials Energy Consumer Discretionary Information Technology Health Care Utilities Cash & Other Net Assets Telecommunication Services Consumer Staples Financials PORTFOLIO INDEX ATTRIBUTION EFFECTS Average Weight Total Return Average Weight Total Return Allocation Effect Selection Effect Industrials Materials Energy Consumer Discretionary Information Technology Health Care Utilities Cash & Other Net Assets Telecommunication Services Consumer Staples Financials Total Effect Total Effect (%) Data is a result of our bottom-up process and funds are not managed to be in line with the benchmark. 11

12 Performance Attribution by Security Franklin Mutual Euroland Fund vs. MSCI EMU Index January 1, 2014-December 31, 2014 PORTFOLIO INDEX KUKA AG 0.85 Average Weight Total Return Average Weight Total Return Total Effect INTERNATIONAL CONSOLIDATED AIRLINES GROUP SA INTESA SANPAOLO SPA VALEO SA REED ELSEVIER NV SOCIETE GENERALE UNIQA INSURANCE GROUP AG KLOECKNER & CO SE METRO AG KUKA AG INTERNATIONAL CONSOLIDATED AIRLINES GROUP SA INTESA SANPAOLO SPA VALEO SA REED ELSEVIER NV SOCIETE GENERALE UNIQA INSURANCE GROUP AG KLOECKNER & CO SE METRO AG NATIONAL BANK OF GREECE SA NATIONAL BANK OF GREECE SA Total Effect (%) Past performance does not guarantee future results. Holdings of the same issuer have been combined, however holdings that should appear combined as a result of merger arbitrage investment will not be. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 12

13 Performance Risk Statistics Franklin Mutual Euroland Fund - A(acc) EUR As of December 31, 2014 Performance Risk Statistics 1 Yr 3 Yrs* Standard Deviation: Franklin Mutual Euroland Fund - A(acc) EUR MSCI Daily Net EMU Euro Index Tracking Error Information Ratio Alpha Beta Sharpe Ratio R-Squared Past performance does not guarantee future results. The base currency of a fund determines the risk-free rate index used in calculating certain risk statistics on this page. A fund that is based in USD uses the US T-Bill Index as the risk free rate return, a EUR-based fund uses the France Treasury Bills 3 Month Intraday Index, a GBP-based fund uses the UK Treasury Bills 3 Month Index, a JPY-based fund uses the Japan Financing Bill 3 Month Index, and an AUD-based fund uses the Australia T-Note 3 Month Index. *Annualized. 13

14 Index Market Returns MSCI World Index Returns (EUR) December 1, 2014 December 31, 2014 Austria Belgium Denmark Finland France Germany Ireland Israel Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom Canada USA Australia Hong Kong Japan New Zealand Singapore Market Cap (Billions) % Return in EUR % Return in Local Currency % Chg in Ex. Rate (EUR) P/E P/BV P/CE Yield The World Index 27, Eur/Middle East Austria Belgium Denmark Finland France Germany Ireland Israel Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom 2, North America Canada 1, USA 15, Pacific Australia Hong Kong Japan 2, New Zealand Singapore % -4% 0% 4% 8% For illustrative purposes only. Not representative of the performance of any Franklin Templeton portfolio. 14

15 Index Sector Returns MSCI World Index Returns (EUR) December 1, 2014 December 31, 2014 Financials Information Technology Health Care Consumer Discretionary Industrials Consumer Staples Energy Materials Utilities Telecommunication Services % -1% 1% 3% 5% 7% Market Cap (Billions) % Return in EUR P/E P/BV P/CE Yield MSCI The World Index 27, Financials 5, Banks 2, Diversified Financials 1, Insurance 1, Real Estate Information Technology 3, Semiconductors & Semiconductor Equipment Software & Services 1, Technology Hardware & Equipment 1, Health Care 3, Health Care Equipment & Services Pharmaceuticals Biotechnology & Life Sciences 2, Consumer Discretionary 3, Automobiles & Components Consumer Durables & Apparel Consumer Services Media Retailing Industrials 2, Capital Goods 2, Commercial & Professional Services Transportation Consumer Staples 2, Food & Staples Retailing Food Beverage & Tobacco 1, Household & Personal Products Energy 2, Energy 2, Materials 1, Materials 1, Utilities Utilities Telecommunication Services Telecommunication Services For illustrative purposes only. Not representative of the performance of any Franklin Templeton portfolio. 15

16 Glossary Alpha: Alpha measures the difference between a fund's actual returns and its expected returns given its risk level as measured by its beta. A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund's beta. Some investors see alpha as a measurement of the value added or subtracted by a fund's 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%. Information Ratio: In investing terminology, the ratio of expected return to risk. Usually, this statistical technique is used to measure a manager's performance against a benchmark. This measure explicitly relates the degree by which an investment has beaten the benchmark to the consistency by which the investment has beaten the benchmark. R-Squared: A measure of how much of a portfolio's performance can be explained by the returns from the overall market (or a benchmark index). If a portfolio's total return precisely matched that of the overall market or benchmark, its R-squared would be 100. If a portfolio's return bore no relationship to the market's returns, its R-squared would be 0. 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. Standard Deviation: A measure of the degree to which a fund's return varies from its previous returns or from the average of all similar funds. The larger the standard deviation, the greater the likelihood (and risk) that a security's performance will fluctuate from the average return. Tracking Error: Measure of the deviation of the return of a fund compared to the return of a benchmark over a fixed period of time. Expressed as a percentage. The more passively the investment fund is managed, the smaller the tracking error. 16

17 Important Disclosures This document is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares of the Luxembourg-domiciled SICAV Franklin Templeton Investment Funds (FTIF). Nothing in this document should be construed as investment advice. Opinions expressed are the author s at publication date and they are subject to change without prior notice. Given the rapidly changing market environment, Franklin Templeton Investments disclaim responsibility for updating this material. Subscriptions to shares of FTIF can only be made on the basis of the current prospectus and where available, the relevant Key Investor Information Document, accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter. The value of shares in FTIF and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance is not an indicator or a guarantee of future performance. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, your performance may also be affected by currency fluctuations. An investment in FTIF entails risks which are described in FTIF s prospectus and where available, in the relevant Key Investor Information Document. No shares of FTIF may be directly or indirectly offered or sold to nationals or residents of the United States of America. Shares of FTIF are not available for distribution in all jurisdictions and prospective investors should confirm availability with their local Franklin Templeton Investments representative before making any plans to invest. Any research and analysis contained in this document has been procured by Franklin Templeton Investments for its own purposes and is provided to you only incidentally. References to particular industries, sectors or companies are for general information and are not necessarily indicative of a fund s holding at any one time. References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. An index is unmanaged and one cannot invest directly in an index. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton fund. Please consult your financial advisor before deciding to invest. A copy of the latest prospectus and where available, the relevant Key Investor Information Document, the annual report and semiannual report, if published thereafter can be found, on our website or can be obtained, free of charge, from Franklin Templeton International Services, S.à r.l. - Supervised by the Commission de Surveillance du Secteur Financier - 8A, rue Albert Borschette, L-1246 Luxembourg - Tel: Fax: In the U.S., this publication is made available to you for informational purposes only by Templeton/Franklin Investment Services, Inc. 100 Fountain Parkway, St. Petersburg, Florida Tel: (800) (USA Toll-Free), (877) (Canada Toll-Free), and Fax: (727) Investments are not FDIC insured; may lose value; and are not bank guaranteed. Distribution outside the U.S. may be made by Templeton Global Advisors Limited or other sub-distributors, intermediaries, dealers or professional investors that have been engaged by Templeton Global Advisors Limited to distribute shares of the Fund in certain jurisdictions. This is not an offer to sell or a solicitation of an offer to purchase securities in any jurisdiction where it would be illegal to do so. 17

18 Important Disclosures (continued) 2015 Franklin Templeton Investments. All rights reserved. Indexes are unmanaged and one cannot invest directly in an index. CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. All MSCI data is provided as is. The portfolio 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 portfolio described herein. Copying or redistributing the MSCI data is strictly prohibited. 18