Franklin Equity Group. Franklin Templeton Investment Funds Franklin U.S. Opportunities Fund - A (acc) USD. Data as of 31 December 2017

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1 Franklin Equity Group Data as of 31 December 2017 Franklin Templeton Investment Funds - A (acc) USD

2 Table of Contents Investment Capabilities Overview...3 Franklin Equity Group...4 U.S. Growth Investment Team... 5 Research Teams...6 Close Collaboration Between Portfolio Managers and Analysts...7 Investment Philosophy and Approach...8 Investment Process...9 Competitive Advantage Why Franklin Equity Group?...19 Summary...20 What are the Key Risks?...21 Sector Allocation...22 Top Ten Holdings...23 Portfolio Characteristics...24 Discrete Performance Historical Performance...26 Calendar Year Returns Performance Risk Statistics Management Profile...29 Glossary...31 Important Disclosures

3 Investment Capabilities Overview 2 Equity FRANKLIN TEMPLETON INVESTMENTS Total Combined Assets Under Management : US$753.8 Billion 5 Fixed Income 8 Multi-Asset Solutions 11 Alternatives AUM US$327.7 Billion US$289.0 Billion US$130.0 Billion US$15.3 Billion CAPABILITIES Value Government Income Commodities Deep Value Municipals Real Return Infrastructure Core Value Corporate Credit Balanced/Hybrid Real Estate Blend Bank Loans Total Return Hedge Funds GARP Securitised Target Date/Risk Private Equity Growth Multi-Sector Absolute Return Convertibles Currencies Tactical Asset Allocation Sector Sukuk Managed Volatility Shariah Smart Beta INVESTMENT Templeton Global Equity Group (1940) Franklin Templeton Fixed Income Group (1970) Franklin Templeton Multi-Asset Solutions (1996) Franklin Real Asset Advisors (1984) TEAMS Franklin Equity Group (1947) Templeton Global Macro (1986) Franklin SystematiQ (2011) Darby Overseas Investments (1994) Franklin Mutual Series (1949) Franklin LAM-Fixed Income (1993) K2 Advisors (1994) Templeton Emerging Markets Group (1987) Pelagos Capital Management (2005) Franklin LAM-Equity (1993) Source: Franklin Templeton Investments (FTI), as of 31 December 2017, based on latest available data. Total combined Assets Under Management (Total AUM) combines U.S. and non-u.s. AUM of the investment management subsidiaries of the parent company, Franklin Resources, Inc. (FRI) [NYSE: BEN], a global investment management organisation operating as FTI. Only selected business entities within FTI claim compliance with the GIPS standards as described in the table of contents if applicable. Total and platform AUM includes discretionary and non-discretionary accounts, including pooled investment vehicles, separate accounts and other vehicles. Total and platform AUM may also include advisory accounts with or without trading authority. In addition, assets for which certain FTI advisers provide limited asset allocation advisory services, and assets that are not allocated to FTI products are not included in the AUM figures shown. Franklin Templeton Multi-Asset Solutions may invest in various investment platforms advised by a number of investment advisory entities within FTI. Platform AUM reported for FT Multi-Asset Solutions therefore may include certain AUM separately reported under each utilised investment platform. Total AUM also includes assets managed by certain FTI advisers that do not form part of the selected investment platforms shown. As a result, the combined platform AUMs may not equal Total AUM and may be calculated and reported separately for regulatory or other purposes under each investment adviser. Each local asset manager may be considered as an entity affiliated with or associated to FTI by virtue of being a direct or indirect wholly-owned subsidiary of FRI, an entity or joint venture in which FRI owns a partial interest, which may be a minority interest, or a third party asset management company to which investment advisory services have been delegated by an FTI adviser. 3

4 0347 Franklin Equity Group Our Team Franklin Equity Group investment professionals average over 18 years of experience and more than 13 years with Franklin Access to approximately 60 equity and over 150 fixed income investment professionals* Our Culture Fundamental research conducted by experienced industry specialists Collaborative environment that balances autonomy with rigorous debate and accountability Equity and fixed income teams work together for additional insight on companies Our Research Investment professionals operate as industry specialists within sector teams Sector team leaders have over 21 years of experience on average Deep industry coverage across all market caps and styles Industry and sector research supplemented by small-cap generalists *Investment professionals include portfolio managers, analysts and traders. As of 31 December

5 0349 U.S. Growth Investment Team Team Member Role Product Years Experience Grant Bowers VP, Portfolio Manager U.S. All Cap Growth 24 Sara Araghi, CFA VP, Portfolio Manager U.S. All Cap Growth 14 Ed Jamieson President, Portfolio Manager U.S. Small-Mid Cap Growth 42 Michael McCarthy, CFA EVP/CIO-Franklin Equity Group, Portfolio Manager U.S. Small Cap Growth 26 Serena Perin Vinton, CFA SVP, Portfolio Manager U.S. Large Cap Growth 26 Matt Moberg, CPA VP, Portfolio Manager U.S. All Cap Growth 20 James Cross, CFA VP, Portfolio Manager U.S. Small-Mid Cap Growth 20 Brad Carris, CFA VP, Portfolio Manager U.S. Small Cap Growth 16 The U.S. Growth Investment Team Meets Weekly To: Exchange investment ideas Discuss individual stocks and recent portfolio actions Utilise Franklin s in-house sector team experts Review major sector developments and investment recommendations Representatives of sector teams participate on a rotating basis Review benchmark over/underweights Debate merits of major portfolio weightings versus benchmarks As of 31 December CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. 5

6 0350 Research Teams Research professionals operate as industry specialists within sector teams Depth of coverage across the capitalisation spectrum HEALTH CARE TECHNOLOGY & COMMUNICATIONS 8 analysts INDUSTRIALS Sector team leaders manage sector portfolios 5 analysts 5 analysts Identify secular trends and develop investment themes Collaborate with high-yield team for additional insight on companies NATURAL RESOURCES 7 analysts INVESTMENT TEAM CONSUMER 5 analysts UTILITIES 2 analysts FINANCIAL & BUSINESS SERVICES 6 analysts CONVERTIBLE BONDS 3 analysts HIGH YIELD & CORPORATE CREDIT 18 analysts All sectors As of 31 December

7 0351 Close Collaboration Between Portfolio Managers and Analysts Team-Oriented Culture Facilitates Discussion and Debate Formal interactions structured to foster the development and debate of investment ideas Ongoing informal discussions for a further level of insight INDUSTRY ANALYSTS Conduct fundamental analysis, build models and establish targets Meet with companies Provide industry outlook Recommend securities Sector Team Meetings Morning Meetings SECTOR TEAM LEADERS Determine secular trends and major investment themes Identify sectors that appear most poised for growth Roundtable Discussions Industry Presentations PORTFOLIO MANAGERS Select securities Monitor sector weightings Facilitate peer review Manage portfolio risk 7

8 0352 Investment Philosophy and Approach Philosophy The foundation of our investment philosophy holds that companies with the potential for long-term sustainable growth can often provide significant opportunities for investors. Market participants can have a short-term perspective and underappreciate the value potential of sustainable growth. We believe that the best potential for delivering attractive risk-adjusted returns is by identifying companies with potential for sustainable growth that is not already reflected in their current stock prices. Investment Approach Within a collaborative environment, our team utilises fundamental, bottom-up research to focus on companies that we believe have sustainable growth characteristics meeting our criteria of growth, quality and valuation. Growth Focus on companies with potential to produce sustainable earnings and cash flow growth Evaluate the long-term market opportunity and competitive structure of the industry to target current and emerging leaders Quality Seek companies with strong and improving competitive positions in attractive markets Identify experienced and talented management teams as well as financial strength reflected in the capital structure, gross and operating margins, free cash flow generation and returns on capital Valuation Consider a range of potential outcomes based on an assessment of multiple scenarios Consider whether or not security prices fully reflect the balance of the sustainable growth opportunities relative to the business and financial risks 8

9 0353 Investment Process Identify Potential Growth Stocks Growth Opportunity Identification Idea Evaluation Portfolio Construction Sell Discipline Portfolio Monitoring and Risk Management Industry Analysts Identify sustainable growth opportunities from their primary research and knowledge of their industries Meet with company management and attend industry conferences in the search for potential growth companies Portfolio Managers Generate ideas from their own fundamental research and analysis 9

10 0353 Investment Process (continued) In-Depth Analysis of Investment Ideas Growth Opportunity Identification Idea Evaluation Portfolio Construction Sell Discipline Portfolio Monitoring and Risk Management Model and Evaluate Investments with Long-Term Sustainable Growth Potential Based on Our Investment Criteria of: Growth Quality Valuation Key Variables We Examine Include: Market opportunity Competitive position Management and execution Financial strength and profitability Valuation Roundtable Presentations Thorough review of investment thesis, opportunities, risks, in-depth financial statement and valuation models 10

11 0353 Investment Process (continued) Investment Criteria Key variables used in idea generation and evaluation, assessing growth, quality and valuation Market Opportunity Size, growth and sustainability of overall market opportunity Growth > benchmark 3-year horizon Long duration growth Secular > cyclical opportunity Timeliness within economic cycle GROWTH Competitive Position Sustainable growth Leading and/or growing market share Barriers to entry Pricing power Cost structure (low cost) Sustainability of intellectual property advantage Brand/franchise strength Industry structure Seek to Identify Companies with Sustainable Earnings and Cash Flow Growth Potential 11

12 0353 Investment Process (continued) Investment Criteria Key variables used in idea generation and evaluation, assessing growth, quality and valuation Management Strength Vision and strategy Management experience, expertise and integrity Consistency and history of execution Breadth and depth of management team Capital allocation practices Management incentives QUALITY Financial Strength Direction and sustainability of revenue, earnings growth and margins High free cash flow (ability to fund growth internally) Operating leverage Return on capital > weighted average cost of capital (and direction of return on capital) Strong balance sheet Manageable debt Seek to Identify High-Quality Companies with Strong Management Teams and Financial Strength 12

13 0353 Investment Process (continued) Investment Criteria Key variables used in idea generation and evaluation, assessing growth, quality and valuation VALUATION Discounted cash flow and implied growth P/E, EV/EBITDA, P/B, P/S Free cash flow yield Acquisition or takeover valuation Margin of safety (risk mitigation) Market vs. internal research growth expectations Scenario and probability analysis Look for the Best Trade-Off Between Growth Opportunity, Business and Financial Risk and Valuation 13

14 0353 Investment Process (continued) Bottom-Up Research Provides the Basis for Our Investment Decisions Growth Opportunity Identification Idea Evaluation Portfolio Construction Sell Discipline Portfolio Monitoring and Risk Management Build Portfolios Security by Security Seeks to limit individual security positions to 5% Seeks to limit single industry exposure to 25% Seeks to limit foreign exposure to 10% Well-Diversified Portfolios Broad sector and security diversification Typically hold positions Weightings Determined by Conviction Levels Reflects manager convictions, not benchmark Receive benefits of diversification without diluting impact of best ideas 14

15 0353 Investment Process (continued) Case Study: MasterCard, Inc.* The company helps link merchants, financial institutions and cardholders to ensure that payments transactions are convenient, reliable and secure. The company acts primarily as a franchisor and processor in supporting the credit and debit card programmes of some 25,000 financial institutions in 210 countries. Idea Generation Franklin s financial services analyst identified the investment opportunity when researching the payment processing industry This company has been a prime beneficiary of the secular shift away from cash and check-based payments to cardbased payments Follow-up meetings with management and industry contacts revealed a leading company Idea Evaluation Growth Attractive industry with strong secular growth drivers High barriers to entry provided by well-established network effects Stable pricing with minimal event risk Leading franchise Strong brand that is a global icon Business model assumes no credit risk Significant market share Limited competition (basically a duopoly) Quality Experienced management team Potential to generate solid returns EBITDA margins of 61.74% Limited capital expenditure requirements (Capex currently running at 4.86% of EBITDA) Significant free cash flow generation Valuation Sustainable multi-year secular growth outlook Attractive risk versus reward profile Estimated next-year P/E: 27.90x **, strong balance sheet LTD/Cap 45.20% Trailing 12-month EV/EBITDA: 20.04x *As of 30 September Source: Bloomberg and the underlying company s financial reports. **As of 3 November This is an example of an investment purchased pursuant to investment advice of Franklin Equity Group; the investment may or may not be currently held by the Fund or any investment vehicle advised by Franklin Equity Group. This is not a complete analysis of every material fact regarding any industry, security or investment and should not be viewed as an investment recommendation. This is intended to provide insight into the advisor s portfolio selection process. The actions taken with respect to this investment and its performance may not be representative of other advice of the advisor or investments of the Fund. Factual statements are taken from sources considered reliable, but have not been independently verified for completeness or accuracy by the Fund s manager or its affiliates. These opinions may not be relied upon as investment advice or as an offer for a particular security or as an indication of trading intent for any Franklin Templeton fund. All portfolio holdings are subject to change. In addition, it should not be assumed that any securities transactions discussed were or will prove to be profitable. Past performance is not an indicator or a guarantee of future performance. 15

16 0353 Investment Process (continued) Disciplined Sell Process Growth Opportunity Identification Idea Evaluation Portfolio Construction Sell Discipline Portfolio Monitoring and Risk Management Securities Are Reviewed for Sale If: Fundamentals deteriorate Stock price shows excessive moves relative to industry Target valuations are exceeded Position size limitations are reached Better alternatives emerge 16

17 0353 Investment Process (continued) Rigorous Oversight to Assess and Manage Risk Growth Opportunity Identification Idea Evaluation Portfolio Construction Sell Discipline Portfolio Monitoring and Risk Management Fundamental, Bottom-Up Stock Selection Process Helps to Control Risk Ongoing Portfolio Monitoring Continually evaluate securities upside potential and downside risks Monitor risk and assure transparency through: Team meetings Peer review meetings Conviction check list Barra Analytics Measure, monitor and manage risk factors, including: Sector and industry exposures Performance deviation Position sizes Portfolio diversification 17

18 0656 Competitive Advantage Exposure to leading growth companies in the United States Research intensive, fundamental approach Portfolio construction focused on quality growth Diversified multi-cap, multi-industry Strong risk management Solid track record 18

19 0354 Why Franklin Franklin Equity Equity Group s Group? Competitive Advantages Global Scale and Resources Infrastructure support of a global organisation allows investment professionals to focus on investment analyses and decisions Deep and Experienced Investment Team Thorough company and sector coverage by experienced investment professionals across style and capitalisation spectrum, providing bottom-up analyses to identify compelling investment opportunities Disciplined and Collaborative Research Process Knowledge, experience and expertise shared through strong communication and collaboration A Robust Investment Decision Making Process that Seeks Strong, Long-Term Results 19

20 Summary - A (acc) USD As of 31 December 2017 Morningstar Category Investment Style US Flex-Cap Equity Growth Fund Inception Date 3 April 2000 Share Class Inception Date 3 April 2000 Benchmark Base Currency for Fund Base Currency for Share Class Russell 3000 Growth Index USD USD Total Net Assets (USD) 3,233,259, Portfolio Turnover 59.79% Asset Allocation Equity: 98.60% Number of Issuers 79 Total Expense Ratio 1.82% Cash & Cash Equivalents: 1.40% Summary of Investment Objective The Fund aims to achieve capital appreciation by investing principally in equity securities of US companies believed to possess sustainable growth characteristics and which meet growth, quality and valuation criteria. These include small, medium, and large capitalisation companies with strong growth potential across a wide range of sectors that have exceptional growth potential and fast growing, innovative companies within these sectors. Portfolio Manager(s) Grant Bowers Sara Araghi, CFA Fund Identifiers ISIN Code LU SEDOL Code Bloomberg Code Fund Ratings (31 December 2017) United States United States TEMAGAI LX Overall Morningstar Rating ««««The Portfolio Turnover is calculated over a 12-month period as at the end of the fiscal year (30 June 2017). 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. The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details. Past performance is not an indicator or a guarantee of future performance. 20

21 What are the Key Risks? 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. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments. The Fund invests mainly in equity securities of companies located in or doing significant business in the U.S. Such securities have historically been subject to significant price movements that may occur suddenly due to market or company-specific factors. As a result, the performance of the Fund can fluctuate considerably over time. Other significant risks include: liquidity risk. For full details of all of the risks applicable to this Fund, please refer to the Risk Considerations section of the Fund in the current prospectus of Franklin Templeton Investment Funds. 21

22 Sector Allocation vs. Russell 3000 Growth Index As of 31 December 2017 Information Technology Consumer Discretionary Health Care Industrials Financials Real Estate Consumer Staples Materials Energy Telecommunication Services Utilities Cash & Cash Equivalents 0% 10% 20% 30% 40% 50% Russell 3000 Growth Index Portfolio % Index % Over/Under % Information Technology Software & Services Semiconductors & Semiconductor Equipment Technology Hardware & Equipment Consumer Discretionary Retailing Media Consumer Services Automobiles & Components Consumer Durables & Apparel Health Care Health Care Equipment & Services Pharmaceuticals, Biotechnology & Life Sciences Industrials Capital Goods Commercial & Professional Services Transportation Financials Diversified Financials Insurance Banks Real Estate Consumer Staples Food, Beverage & Tobacco Food & Staples Retailing Household & Personal Products Materials Energy Telecommunication Services Utilities Cash & Cash Equivalents Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 22

23 Top Ten Holdings As of 31 December 2017 Name of Issuer Industry % of Total AMAZON.COM INC Retailing 6.36 APPLE INC Technology Hardware & Equipment 5.38 FACEBOOK INC Software & Services 4.97 MASTERCARD INC Software & Services 4.52 ALPHABET INC Software & Services 3.85 VISA INC Software & Services 3.85 MICROSOFT CORP Software & Services 3.71 SBA COMMUNICATIONS CORP Real Estate 2.40 UNITEDHEALTH GROUP INC Health Care Equipment & Services 2.20 RAYTHEON CO Capital Goods 2.06 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. 23

24 Portfolio Characteristics vs. Russell 3000 Growth Index As of 31 December 2017 Portfolio Historical 3 Yr Sales Growth 17.63% 9.92% Estimated 3-5 Yr EPS Growth 19.58% 16.16% Price to Earnings (12-mo Forward) 28.31x 23.24x P/E to Growth 1.88x 1.69x Market Capitalisation (Millions USD) 227, ,315 Market Capitalisation Breakdown in USD Portfolio % <5.0 Billion Billion Billion Billion Billion Billion 6.17 >150.0 Billion N/A 1.02 Index Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 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 capitalisation figures for both the portfolio and the benchmark are the security level, not aggregated up to the main issuer. Source: FactSet. Price Ratio calculations for the weighted average use harmonic means. Any exceptions to this are noted. The IBES Estimated 3-5 Year EPS Growth uses simple weighted average means; there can be no assurance that the estimated figure will be realised. Market capitalisation statistics are indicated in the base currency for the portfolio presented. Past performance is not an indicator or a guarantee of future performance. 24

25 Discrete Performance - A (acc) USD As of 31 December 2017 Discrete Annual Performance (%) Inception Date - A (acc) USD Net of Fees Russell 3000 Growth Index /16 12/17 12/15 12/16 12/14 12/15 12/13 12/14 12/12 12/13 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. 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. 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 is not an indicator or a guarantee of future performance. 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. Please visit franklintempleton.lu for current performance. 25

26 Historical Performance - A (acc) USD As of 31 December 2017 Annualised Total Returns (%) Inception Date 1 Yr 3 Yrs 5 Yrs 10 Yrs - A (acc) USD Net of Fees Russell 3000 Growth Index Since Incept Cumulative Performance (%) Inception Date 1 Mth 3 Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs - A (acc) USD Net of Fees Russell 3000 Growth Index Since Incept 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. 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. 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 is not an indicator or a guarantee of future performance. 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. Please visit franklintempleton.lu for current performance. 26

27 Calendar Year Returns - A (acc) USD As of 31 December % % 1% % -43% A (acc) USD Net of Fees Russell 3000 Growth 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. 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. 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 is not an indicator or a guarantee of future performance. 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. Please visit franklintempleton.lu for current performance. 27

28 Performance Risk Statistics - A (acc) USD As of 31 December 2017 Performance Risk Statistics 1 Yr 3 Yrs* 5 Yrs* 10 Yrs* 15 Yrs* Standard Deviation (%): - A (acc) USD Russell 3000 Growth Index Tracking Error (%)^^ Information Ratio^^ Beta^^ Sharpe Ratio 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 Euro 3-Month T-Bill 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. ^^Measured against the Russell 3000 Growth Index. *Annualised. Past performance is not an indicator or a guarantee of future performance. 28

29 Management Profile GRANT BOWERS Vice President Portfolio Manager, Research Analyst Franklin Equity Group Franklin Advisers, Inc. San Mateo, California, United States Grant Bowers is a vice president and portfolio manager with Franklin Equity Group. He is the lead portfolio manager of Franklin Growth Opportunities Fund, the FTIF (SICAV) and the FTVIP Franklin Large Cap Growth fund, as well as related portfolios. He is also a member of Franklin Equity Group's U.S. Growth team. Mr. Bowers joined Franklin Templeton Investments in 1993 as a fixed income analyst and in 1998 joined the Franklin Equity Group as an analyst. His previous research coverage has included the telecom, media, publishing, transportation and business services industries. Prior to assuming his current role he was the research sector team leader for telecommunications research and lead portfolio manager of the Franklin Global Communications Fund from 2002 through Mr. Bowers holds a B.A. from the University of California at Davis. Prior to joining Franklin Templeton, he served in the United States Army. 29

30 Management Profile SARA ARAGHI, CFA Vice President Research Analyst, Portfolio Manager Franklin Equity Group Franklin Advisers, Inc. San Mateo, California, United States Sara Araghi is a vice president, research analyst and portfolio manager for Franklin Equity Group. She specializes in the equity research and analysis of the media & entertainment, cable & satellite, and apparel & footwear manufacturer industries. Ms. Araghi is also a co-manager of the Franklin Growth Opportunities Fund and FTIF (SICAV), as well as related portfolios. She is a member of the Franklin Small Cap Growth team. Prior to this role, Ms. Araghi worked with various Franklin Equity Group strategy team leaders to construct and maintain investment portfolios for Franklin Portfolio Advisors separate account mandates including Franklin Portfolio Advisors' All Cap Growth, Mid Cap Growth and Small Cap Growth strategies. She joined Franklin Equity Group in July 2003 as an equity research associate on the consumer team. Ms. Araghi earned her B.S. in business administration and graduated with honors from the University of California, Berkeley. She is a Chartered Financial Analyst (CFA) charterholder and member of the CFA Society of San Francisco and CFA Institute. 30

31 Glossary 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%. Estimated 3-5 Yr EPS Growth: An estimated measure of the growth of earnings per share over a forward-looking period. For a portfolio, the value represents a weighted average of the stocks it holds. Historical 3 Yr Sales Growth: The rate at which sales have increased for the fund's underlying holdings over the last three years. 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. Market Capitalisation: A determination of a company's value, calculated by multiplying the total number of company stock shares outstanding by the price per share. P/E to Growth: A ratio used to determine a stock's value while taking into account earnings growth. For a portfolio, the value represents a weighted average of the stocks it holds. Price to Earnings (12-mo Forward): A measure of the price to earnings ratio for a stock using the forecasted earnings for the next 12 months. For a portfolio, the value represents a weighted average of the stocks it holds. 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 the average of its previous returns. The larger the standard deviation, the greater the likelihood (and risk) that a fund'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. 31

32 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 (the Fund ). Nothing in this document should be construed as investment advice. Given the rapidly changing market environment, Franklin Templeton Investments disclaim responsibility for updating this material. Subscriptions to shares of the Fund can only be made on the basis of the current prospectus of the Fund, accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter. An investment in the Fund entails risks which are described in the Fund's prospectus. 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 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. In emerging markets, the risks can be greater than in developed markets. Investments in derivative instruments entail specific risks that may increase the risk profile of the fund and are more fully described in the Fund s prospectus. If the fund invests in a specific sector or geographical area, the returns may be more volatile than a more diversified fund. No shares of the Fund may be directly or indirectly offered or sold to residents of the United States of America. Shares of the Fund 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. Opinions expressed are the author s at publication date and they are subject to change without prior notice. 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. A copy of the latest prospectus, the annual report and semi-annual report, if published thereafter can be found, on our website: or can be obtained, free of charge, from the address below. Issued by Franklin Templeton Investments (ME) Limited, authorized and regulated by the Dubai Financial Services Authority. Dubai office: Franklin Templeton Investments, The Gate, East Wing, Level 2, Dubai International Financial Centre, P.O. Box , Dubai, U.A.E., Tel.: Fax: 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 Franklin Templeton Investments. All rights reserved. CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. 32

33 Important Disclosures (continued) Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The Russell index shown is a trademark/servicemark of the Frank Russell Company. 33