Franklin Equity Group. Franklin Templeton Investment Funds Franklin India 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 Franklin Templeton Investments Overview...3 Summary...23 Investment Capabilities Overview...4 W hat are the Key Risks?...24 Local Insights from a Global Leader... 5 Sector Allocation...25 Local Investment Management Capabilities Local Knowledge, Global Reach...6 Top Ten Holdings...26 Our Goal Is to Be Best in Each Country...7 Portfolio Characteristics...27 Franklin Local Asset Management Locations Local Managers, Local Products...8 Discrete Performance Historical Performance...29 Franklin India Equity...9 Calendar Year Returns W hy Consider This Strategy? Performance Risk Statistics Experienced Local Market Specialists...11 Long-Term Historical Performance Results...32 Local Expertise Combined with Global Capabilities Franklin India Equity Team Structure...13 Appendix...33 Management Profile...34 Investment Philosophy and Process...14 Glossary...38 An Investment Process Focused on Quality, Sustainability and Growth...15 Important Disclosures...39 Franklin India Equity Portfolio...16 Stock Selection Philosophy...17 Research and Team Philosophy Aligned with Stock Selection Philosophy...18 Bottom-up Investment Process...19 Valuation Methodology...20 Portfolio Review and Sell Discipline...21 Investment Performance and Portfolio Characteristics

3 Franklin Templeton Investments Overview 3

4 Investment Capabilities Overview FRANKLIN TEMPLETON INVESTMENTS Total Combined Assets Under Management : US$753.8 Billion 2 AUM Equity 5 Fixed Income US$327.7 Billion CAPABILITIES Value Deep Value Core Value Blend GARP Growth Convertibles Sector Shariah Smart Beta INVESTMENT Templeton Global Equity Group (1940) TEAMS Franklin Equity Group (1947) Franklin Mutual Series (1949) Templeton Emerging Markets Group (1987) Franklin LAM-Equity (1993) 8 Multi-Asset Solutions US$289.0 Billion Government Municipals Corporate Credit Bank Loans Securitised Multi-Sector Currencies Sukuk Franklin Templeton Fixed Income Group (1970) Templeton Global Macro (1986) Franklin LAM-Fixed Income (1993) 11 US$130.0 Billion Income Real Return Balanced/Hybrid Total Return Target Date/Risk Absolute Return Tactical Asset Allocation Managed Volatility Franklin Templeton Multi-Asset Solutions (1996) Franklin SystematiQ (2011) Alternatives US$15.3 Billion Commodities Infrastructure Real Estate Hedge Funds Private Equity Franklin Real Asset Advisors (1984) Darby Overseas Investments (1994) K2 Advisors (1994) Pelagos Capital Management (2005) 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. 4

5 3016 Local Insights from a Global Leader What Sets Us Apart Access to Locally Sourced Ideas & Insights Local investment professionals who are based in the country or region where assets are managed Specialisation and focus on a single region to develop deep knowledge and unique insights First-hand knowledge of local market dynamics as investment teams are embedded in their region s local business practices Real-time response to local market events Networks of local business contacts Broad Research Capabilities Worldwide Extensive on-the-ground asset management capabilities in 15 countries to identify the best investment opportunities in each country or region In-depth research across all markets developed, emerging and frontier and market capitalisation for unparalleled insights into the markets we invest in Access to investment opportunities beyond the mainstream and often before they are recognised by the broader market Strength of a Global Asset Management Leader Franklin Templeton was established in 1947 Manages US$754 billion of assets in 33 countries1 Credit ratings among the highest of any asset management company Large research platform that operates seamlessly across the globe Comprehensive 24/7 coverage and support of key operations such as trading, risk analysis, legal, technology, operations, client service and other key business services 1. Source: Franklin Templeton Investments as of 31 December

6 4006 Local Investment Management Capabilities Local Knowledge, Global Reach Reach Franklin Templeton was one of the first investment managers offering on-the-ground services Years1 Countries $55bn+ Full Range of Investment Strategies Global, Regional and Single Country Equity in local assets under management Fixed Income Balanced/ Hybrid ShariahCompliant Equity Sukuk 110+ Portfolio Managers and Analysts Source: Franklin Templeton Investments as of 31 December The Franklin Local Asset Management platform was established in 1993 and is comprised of Fixed Income and Equity teams. 6

7 4007 Our Goal Is to Be Best in Each Country Five Key Reasons for Local Asset Management: A global company is local everywhere. Most investments are local due to domestic biases. Access to domestic growth is often not found in global portfolios. Locally managed domestic products typically possess strong competitive advantages. Finding the right balance of global practice and local knowledge is key. 7

8 3017 Franklin Local Asset Management Locations Local Managers, Local Products POLAND (2014) WARSAW CANADA1 (1982) UNITED KINGDOM (1985) CALGARY Equity, Fixed Income LEEDS CHINA, JV2 (2003) Equity HONG KONG, SHANGHAI EUROPE (2008) UNITED STATES (1947) Equity, Fixed Income Fixed Income SOUTH KOREA (1997) SEOUL Equity, Fixed Income Equity, Fixed Income FRANKFURT, LONDON INDIA (1993) Equity CHENNAI, MUMBAI JAPAN4 (1996) Equity, Fixed Income, Private Equity MEXICO (2013) MENA3 (2006) MEXICO CITY DUBAI Equity, Sukuk, Fixed Income Fixed Income TOKYO Equity MALAYSIA (2009) KUALA LUMPUR Sukuk, Fixed Income VIETNAM, JV2 (2008) HO CHI MINH CITY, HANOI Equity, Fixed Income, Private Equity BRAZIL (1997) SÃU PAULO Equity, Fixed Income AUSTRALIA (1988) MELBOURNE Equity, Fixed Income Please note that all cities shown on the map above refer to the locations of the relevant country-specific and regional asset management teams. The date refers either to the year the acquired company was established or the year Franklin Templeton Investments opened an office in that country, whichever came first. Source: Franklin Templeton Investments as of 31 December Managed under the Franklin Bissett Investment Management brand. 2. Minority interest in separate joint ventures with Sealand Securities Company, Ltd. (China), China Life (Hong Kong) and Vietcombank (Vietnam). 3. Franklin Templeton Investments (ME) is an indirect wholly owned subsidiary of Franklin Resources, Inc. 4. Offered through sub-delegation to a designated third-party asset management company. 8

9 Franklin India Equity 9

10 4196 Why Consider This Strategy? Rapidly Growing Economy India is projected to become the fastest growing major economy in the world, surpassing China by 2018, as measured by GDP Growth1 Rising Population of Consumers India s growth potential is primarily driven by high consumption demand from their large middle class population2 Access to India s Local Market Insight Franklin Templeton s deep India equity team has the resources to search for the best investment ideas across all sectors and market capitalisations and to meet face-to-face with the senior management of companies Global Reach, Local Expertise Franklin Templeton, recognised as a global leader in investing, is also the oldest mutual fund company in India, with a strong local presence in the region since Source: International Monetary Fund (IMF), World Economic Outlook Database, October Source: Brookings Institution - Development, Aid, and Governance Indicators (DAGI), Factset and Ministry of Statistics & Programme Implementation - India, March Important data provider notices and terms available at 3. Pioneer ITI Asset Management Co. Limited was established in 1993 as India s first mutual fund company in the private sector. Franklin Templeton acquired Pioneer in The information is not a complete analysis of every aspect of any market, country, industry, security or portfolio. Statements of fact are from sources considered to be reliable, but no representation or warranty is made as to their completeness or accuracy. Because market and economic conditions are subject to rapid change, opinions provided are valid only as of the date indicated. The views expressed may not be relied upon as investment advice and are not share class specific. An investment in the Fund entails risks, which are described in the Fund s prospectus and where available, in the relevant Key Investor Information Document. Special risks may be associated with a Fund s investment in certain types of securities, asset classes, sectors, markets, currencies or countries and in the Fund s possible use of derivatives. These risks are more fully described in the Fund s prospectus and should be read closely before investing. 10

11 4245 Experienced Local Market Specialists Franklin India Equity Team Established in 1993 to serve Indian investors with Indian products1 The Franklin India team manages over US$12.3 billion in AUM, including US$4.4 billion for international investors Dedicated to research and investing in India s domestic equity market with one of the country s largest investment teams On-the-ground investment experts speak the language, conduct over 600 annual company visits, leverage extensive industry contacts, and understand India s unique and evolving investment regulatory landscape Investment Experience and Expertise in Indian Equities Portfolio managers average over 20 years of industry experience, managing equity strategies through various market cycles One of India s deepest and most stable investment teams with 18 investment professionals, including 16 on-the-ground, with an average of 6 years with the firm Experienced in managing a diverse range of domestic equity portfolios across market cycles and across small-, mid- and large-cap stocks Manages four of India s largest 25 India-domiciled equity funds (by AAUM)2 and seven local funds with over 15 years of track record 1. Pioneer ITI Asset Management Co. Limited was established in 1993 as India s first mutual fund company in the private sector. Franklin Templeton acquired Pioneer in Source: Valueresearch. Average Assets Under Management (AAUM) for the quarter ending September As of 30 September

12 4197 Local Expertise Combined with Global Capabilities Capabilities A Dedicated and Regionally-Located Team, Fully Integrated into a World Class Platform Franklin India Equity Team STEPHEN DOVER, CFA* Managing Director & CIO International Industry Experience: 34 Years SUKUMAR RAJAH* Managing Director & CIO Asian Equity Industry Experience: 26 Years ANAND RADHAKRISHNAN, CFA** CIO Franklin Equity India Industry Experience: 23 Years MURALI YERRAM** Vice President, Portfolio Advisory Services Industry Experience: 10 Years FRANKLIN LOCAL ASSET MANAGEMENT Local Knowledge, Global Reach 15 Office Locations Established in 1993 Over 110 portfolio managers and analysts Franklin India Equity Team 18 total investment professionals Established in 1993 Mumbai, Chennai, One of India s largest San Mateo, Singapore investment teams Franklin Templeton Global Platform Global Trading, Risk Management, Technology, Research *The portfolio managers have ultimate decision-making authority for the strategy. **Key idea contributors. CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. Investment professionals include portfolio managers and analysts. 12

13 4201 Franklin India Equity Team Structure Stephen H. Dover, CFA Executive Vice President & Head of Equities San Mateo Sukumar Rajah Managing Director & CIO Asian Equity Singapore Anand Radhakrishnan, CFA Anand Vasudevan CIO & Portfolio Manager Franklin Equity India Chennai Senior Vice President & Head of Research Mumbai Roshi Jain, CFA Janakiraman Rengaraju, CFA Lakshmikanth Reddy Murali Yerram Portfolio Manager Chennai Portfolio Manager Chennai Portfolio Manager Chennai Portfolio Manager Chennai Saurabh Das, CFA Krishna Prasad Natarajan, CFA Senior Research Analyst Health Care, Cement and Logistics Chennai Chennai Kiran Sebastian Vinod Bansal, CFA Srikesh Nair Sandeep Manam Akhil Kalluri Research Analyst Engineering and Capital Goods Research Analyst Oil & Gas Research Associate Banks, Finance and Insurance Research Associate Auto & Auto Ancillaries Research Associate Mid-Cap Stocks Chennai Chennai Chennai Chennai Chennai Senior Research Analyst Banks, Finance, Insurance and Building Materials Chennai Rajasa K. Varun Sharma Hari Shyamsunder, CFA Portfolio Manager & Senior Research Analyst Auto, Auto Ancillaries, Telecom and Agrichemicals Senior Research Analyst Consumer Chennai Portfolio Manager & Senior Research Analyst Information Technology and Media Chennai Additional Resources Global Risk Management Trading Desk (Prakash Natarajan, Deepak Subramani and Govind Patnaik) Product Management As of 30 September CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. Franklin Templeton India provides nondiscretionary, nonbinding investment advice relating to Indian equities to Franklin Advisers, Inc. 13

14 Investment Philosophy and Process 14

15 4184 Investment Process Process Focused Focused on Quality, Sustainability and Growth An Investment Our process targets companies with the following characteristics: Quality and Sustainability in Their Business Model Participates in India's strong economic growth Ability to sustain high return on equity and/or return on capital employed Recurring revenues Strong execution track record Sustainable competitive advantage(s) Other desirable characteristics may include: proprietary products or services, presence in multiple markets, franchise value, high barriers to entry, earnings growth predictability Financial Strength Strong balance sheets Conservative accounting High economic value added (EVA) Have incorrectly priced growth rates The above table is for illustrative and discussion purposes only. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. There is no assurance that any securities selected will be profitable. 15

16 4185 Franklin India Equity Portfolio Strategy Overview and Investment Approach Investment Universe Over 5,000 equity securities in India s domestic Bombay stock exchange Benchmark: MSCI India Index Research Driven Portfolio Collaborative, team based approach Focus on high quality Indian companies with sustainable growth prospects Long-term investment horizon of 3-5 years Typical Investment Guidelines Portfolio consists of approximately growth companies Individual security weighting is not expected to exceed 10% Sector weighting is not expected to exceed 30%, or 1.5x the sector's weight in the benchmark, whichever is greater As of 31 December

17 4186 Stock Selection Philosophy We Focus on Selecting Companies That Meet Our Rigorous Investment Criteria Growth Quality Sustainability Financial analysis to assess: Capital return and management analysis to determine: Analysis of a company s long-term ability to sustain its product/service brand/cost advantage: Long-term growth potential of a company s industry Company s ability to grow faster than the overall economy or industry Company s ability to adapt to new competition and market/product changes Management s ability to scale up the business and also take opportunities in the peripheral business Company s ability to gain or protect market share Management Integrity and highest corporate governance standards in capital allocation, related party transactions and protecting minority shareholders interest Ability to generate attractive return on capital Management depth and succession plans Alignment of senior management interest with shareholder interests Management ability to manage the business through downturns Company s ability to generate and sustain return on capital in excess of cost of capital in the long term (at least 5% higher) Management ability to identify peripheral opportunities (products/geographies) which can potentially generate good return on capital Management ability to invest in technology/brand/people to sustain long term growth Management ability to return cash to investors if there are no identified profitable investment opportunities The above chart is for illustrative and discussion purposes only. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. There is no assurance that any securities selected will be profitable. 17

18 4198 Research and Team Philosophy Aligned with Stock Selection Philosophy Quality and sustainable growth are characteristics that we not only seek in companies but fully integrate in our research process Quantitative Evaluations Emphasis on Quality Sustainability of Results Analyst Model Portfolio: Key focus of research efforts: Collaborative and Specialised Team: Each analyst creates a model portfolio from Develop expertise within respective Attract, develop & retain high quality talent the stocks under coverage Benchmark used is an equal weighted portfolio comprising of stocks in the analyst universe (core & non-core stocks) Periodic rebalancing of portfolios by analysts industries Generate high-quality investment recommendations Effectively communicate the ideas through written and verbal channels Be agile & timely with respect to new ideas, Analysts rated based on the alpha generated Benefits of Our Model Portfolio: Provides a high conviction internal benchmark for the actual portfolios Provides a quantitative performance updates, changes, etc Have wide research coverage within the assigned sectors Research framework (qualitative & quantitative) cultivates analyst discipline Collaborative team approach to constructing the research portfolio reduces individual performance risk Regular reviews of actual fund portfolios vs. research model portfolio Continuous learning and review of the investment process Develop deep insight through interactions with competitors and various parts of a company s supply chain evaluation tool Discipline and sensitivity to performance by analysts & PMs This approach is designed to enable us to sustain our competitive advantage over our peers The above chart is for illustrative and discussion purposes only. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. There is no assurance that any securities selected will be profitable. 18

19 4188 Bottom-up Investment Process Building a Franklin India Equity Portfolio Develop Universe Fundamental Research Valuations Stock Recommendations Portfolio Construction Shortlist companies from the 360º analysis based on Flexible approach use Conduct rigorous team Model Portfolio constructed universe of over 5,500 companies Identify companies with sound business models, strong growth opportunities, sustainable competitive advantages, quality management regular interactions with management, employees, customers, competitors & independent industry professionals as well as study reports/news to enable: In-depth analysis of environment, business model & strategy and competitive advantages Assessment of management s ability to identify opportunities & create value consistently Regulatory & corporate governance issues suitable valuation tools depending on the industry & market situation Focus on the long-term strategic view in the valuation approach discussion and debate between analysts and managers on potential companies entry onto a buy, hold or sell list Stocks rated buy, sell or hold based on growth, quality and valuation from the analysts buy and hold lists Final Portfolio: Security sizing determined by stock conviction as well as risk alignment Portfolio Manager has discretion over exposure to stocks outside the model portfolio Portfolio Financial Analysis and forecasts Over 5,500 companies listed in India Active Research Universe Approximately 300 stocks which represent over 88% of the Nifty 500 total market capitalisation Core Research Universe Approximately 180 stocks which represent over 80% of Nifty 500 total market capitalisation Portfolio of companies As of 31 December Source for companies listed in India: Bombay stock exchange. The above process chart is for illustrative and discussion purposes only. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. There is no assurance that any securities selected will be profitable. 19

20 4199 Valuation Methodology Sectors Valuation Tools Price multiples: P/E, Enterprise Value to-earnings Growth Information Technology Capital Goods Telecommunications Consumer Staples Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA) Discounted cash flows Market-implied growth rate Normalised P/E, P/B Discounted cash flows Replacement cost based value Cyclicals Commodities Real Estate Financials Banks Insurance Companies Financials Multistage free cash-flow-to-equity (FCFE) model to Special Situations Asset valuation replacement value Discounted cash flows Sum of parts (conglomerates) Out-of-Favour Sectors Strategic Value Hidden Assets Conglomerates explicitly value long-term growth opportunities The above chart is for illustrative and discussion purposes only. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. There is no assurance that any securities selected will be profitable. 20

21 4191 Portfolio Review and Sell Discipline Portfolio Review Sell Discipline Review for Sale If: Regular meetings with risk managers Relative attractiveness better investment opportunity becomes available Reaches valuation target becomes expensive on valuation parameters Reaches position size limit in portfolio portfolio Continuous discussion between Portfolio Managers and Analysts Analysts continually review recommendations rebalancing Fundamentals deteriorate negative earnings surprise Adverse policy changes Regular meetings with company management The above chart is for illustrative and discussion purposes only. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. There is no assurance that any securities selected will be profitable. 21

22 Investment Performance and Portfolio Characteristics 22

23 Summary - A (acc) USD As of 31 December 2017 Summary of Investment Objective The Fund aims to achieve long-term capital appreciation by principally investing in equity securities of companies of any size located or performing business predominately in India. Morningstar Category India Equity Investment Style Growth Fund Inception Date 25 October 2005 Share Class Inception Date 25 October 2005 Portfolio Manager(s) Benchmark MSCI India Index Sukumar Rajah Singapore Base Currency for Fund USD Stephen Dover, CFA United States Base Currency for Share Class USD Total Net Assets (USD) 4,441,529, Portfolio Turnover 27.92% Asset Allocation Equity: 98.01% Cash & Cash Equivalents: 1.99% Fund Identifiers ISIN Code LU SEDOL Code B0LN2Y5 Bloomberg Code FRAINAA LX Number of Issuers 50 Fund Ratings (31 December 2017) Total Expense Ratio 1.88% 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. 23

24 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 and equity-related securities of a single emerging country. Such Indian securities have historically been subject to significant price movements, frequently to a greater extent than equity markets globally. As a result, the performance of the Fund can fluctuate significantly over relatively short time periods. Other significant risks include: currency risk, emerging markets risk, 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. 24

25 Sector Allocation vs. MSCI India Index As of 31 December 2017 Financials Consumer Discretionary Industrials Materials Consumer Staples Health Care Information Technology Telecommunication Services Real Estate Energy Utilities Cash & Cash Equivalents 0% 8% 16% MSCI India Index 24% 32% 40% Financials Banks Diversified Financials Insurance Consumer Discretionary Automobiles & Components Consumer Durables & Apparel Retailing Consumer Services Media Industrials Capital Goods Transportation Materials Consumer Staples Household & Personal Products Food, Beverage & Tobacco Health Care Pharmaceuticals, Biotechnology & Life Sciences Health Care Equipment & Services Information Technology Software & Services Telecommunication Services Real Estate Energy Utilities Cash & Cash Equivalents Portfolio % Index % Over/Under % 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. 25

26 Top Ten Holdings As of 31 December 2017 Name of Issuer Industry HDFC BANK LTD Banks 7.62 KOTAK MAHINDRA BANK LTD Banks 5.75 TATA MOTORS LTD Automobiles & Components 4.43 YES BANK LTD Banks 4.08 ULTRATECH CEMENT LTD Materials 4.03 LARSEN & TOUBRO LTD Capital Goods 3.83 INFOSYS LTD Software & Services 3.79 STATE BANK OF INDIA Banks 3.67 HINDUSTAN UNILEVER LTD Household & Personal Products 3.53 AXIS BANK LTD Banks 3.06 Total % of 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. 26

27 Portfolio Characteristics vs. MSCI India Index As of 31 December 2017 Historical 3 Yr Sales Growth Estimated 3-5 Yr EPS Growth Price to Earnings (12-mo Forward) P/E to Growth Price to Earnings (12-mo Trailing) Price to Cash Flow Price to Book Market Capitalisation (Millions USD) Market Capitalisation Breakdown in USD <2.0 Billion Billion Billion Billion Billion >50.0 Billion Portfolio Index 12.24% 22.99% 28.89x 1.16x 34.41x 16.13x 3.72x 21, % 17.35% 21.77x 1.26x 23.57x 14.99x 3.30x 57,723 Portfolio % 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. 27

28 Discrete Performance - A (acc) USD As of 31 December 2017 Discrete Annual Performance (%) - A (acc) USD Net of Fees MSCI India Index Inception Date 12/16 12/17 12/15 12/16 12/14 12/15 12/13 12/14 12/12 12/ 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. 28

29 Historical Performance - A (acc) USD As of 31 December 2017 Annualised Total Returns (%) - A (acc) USD Net of Fees Inception Date 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Incept Inception Date 1 Mth 3 Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Incept MSCI India Index Cumulative Performance (%) - A (acc) USD Net of Fees MSCI India 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. 29

30 Calendar Year Returns - A (acc) USD As of 31 December % % % % -66% A (acc) USD Net of Fees MSCI India 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. 30

31 Performance Risk Statistics - A (acc) USD As of 31 December 2017 Performance Risk Statistics 1 Yr 3 Yrs* 5 Yrs* 10 Yrs* - A (acc) USD MSCI India Index Tracking Error (%)^^ Beta^^ Sharpe Ratio Standard Deviation (%): Information 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 MSCI India Index. *Annualised. Past performance is not an indicator or a guarantee of future performance. 31

32 Long-Term Historical Performance Results - A (acc) USD vs. MSCI India Index Discrete Annual Performance (%) As of 31 December 2017 Monthly Rolling 3-Year Annualised Returns 31 October 2008 to 31 December A (acc) USD Net of Fees 35% 12/16 12/15 12/14 12/13 12/12 12/17 12/16 12/15 12/14 12/13 OUTPERFORMED 23% - A (acc) USD Net of Fees MSCI India Index Annualised Total Returns (%) As of 31 December % Inception Date - A (acc) USD Net of Fees MSCI India Index -1% -13% -13% 11% 23% 3 Yrs 5 Yrs 10 Yrs A (acc) USD outperformed the MSCI India Index 109 out of the 111 monthly rolling 3-year periods shown UNDERPERFORMED -1% % MSCI India 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. Annualized rolling periods are plotted on a monthly or quarterly basis as indicated. The leading diagonal line links points of return for the index (lower axis). For every point of return along this line there is a corresponding return for the fund represented by the blue square (left axis). Any point above the line represents outperformance relative to the index for that period. Any point below the line represents underperformance relative to the index for that period. 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. 32

33 Appendix 33

34 Management Profile STEPHEN H. DOVER, CFA EVP, Head of Equities, Franklin Templeton Investments Chief Investment Officer, Templeton Emerging Markets Franklin Templeton Investments San Mateo, California, United States Stephen Dover is head of Equities for Franklin Templeton. In this role, he focuses on global oversight and administration of the company's equity investment business including Franklin Equity Group, Templeton Global Equity Group, Franklin Mutual Series, and Franklin U.S. Value. He leads key initiatives for the equity business and also serves as a company spokesperson, sharing equity views with clients and the public. In addition, he is a member of Franklin Resources' executive committee, a small group of the company's top leaders responsible for shaping the firm's overall strategy. Stephen is also the CIO for Templeton Emerging Markets Group, Templeton Private Equity Partners, and the head of the equity teams of Franklin Local Asset Management. In this capacity, he oversees the Templeton emerging markets strategies, investment process and day-to-day management of the team, as well as the investment functions of Franklin Templeton's local asset management teams and joint-ventures located in Australia, Brazil, Canada, China, Germany, India, Japan, Malaysia, United Arab Emirates, Mexico, Poland, South Korea, Vietnam and the United Kingdom. He also manages the Franklin World Perspectives Fund, a global equity fund leveraging Franklin LAM team insights. Prior to serving in his current role, Mr. Dover was a founder and chief investment officer of Bradesco Templeton Asset Management (BTAM), a joint venture between Franklin Templeton Investments and Banco Bradesco. Under Mr. Dover's direction, BTAM became the largest joint-venture asset management company in Brazil. Mr. Dover also served on the Board of Directors of several publicly-traded Brazilian companies. Prior to joining Franklin Templeton Investments in 1997, Mr. Dover was a portfolio manager and principal at Newell Associates in Palo Alto, CA where he comanaged retail and institutional equity assets including the Vanguard Equity Income Fund. Previously, Mr. Dover worked for Towers Perrin Consulting in New York, London and San Francisco. Over the course of his 32 years in the industry, Mr. Dover has lived in China, Costa Rica, England, Brazil and the United States. Mr. Dover holds a B.A., with honors, in communications and business administration from Lewis and Clark College and an M.B.A. in finance from The Wharton School of the University of Pennsylvania. He is a Chartered Financial Analyst (CFA) charterholder. Mr. Dover is on the Board of Trustees of Lewis and Clark College and Law School. 34

35 Management Profile SUKUMAR RAJAH Managing Director and Chief Investment Officer LAM Asian Equity Franklin Local Asset Management Singapore Sukumar Rajah is the Managing Director and Chief Investment Officer (Asian Equity) for Franklin Templeton's Local Asset Management Group. Based in Singapore, Mr. Rajah is responsible for overseeing regional and multi-country products, investment process development and enhancements in Asia. He is responsible for overseeing the India Equity group and is the lead portfolio manager of India-related funds and institutional accounts distributed outside of India. He also plays a key role in developing synergies between the local asset management groups throughout Asia and the region's long-term equity product strategy. Mr. Rajah joined Pioneer ITI in 1994, which was acquired by Franklin Templeton in As part of the original equity team, he had helped shape the investment philosophy, which has helped various flagship funds deliver consistent returns for over a decade. Prior to joining Pioneer ITI, Mr. Rajah was assistant vice president of Indbank Merchant Banking Services, Ltd. responsible for advising the Indian Opportunities Fund, which was jointly managed by Martin Currie and Indbank. Before this, he worked for Tata Steel in the Decisions Support Systems Group from 1986 to Mr. Rajah earned his MBA specializing in finance and marketing from the Indian Institute of Management, Bangalore. He earned his Bachelors' Degree in Engineering, specializing in industrial engineering, from the Indian Institute of Technology, Roorkee. Mr. Rajah is the recipient of Business Standard's Fund Manager of the Year and India Today's India's Best Fund Manager (Equity), and manages, among others, the that bagged the Institutional Investor's Asia Money Masters' Best Indian Equities (2015) Other awards received by funds under Mr. Rajah include the Outlook Money Award (2013), Money Today FPCIL's Best Equity 2012, Lipper Award for Best Fund Performance (2011), ICRA Gold Award (2010), CNBC India-BNP Paribas Mutual Fund Award for Best Performing Fund and CRISIL Best Fund Award. 35

36 Management Profile ANAND RADHAKRISHNAN, CFA Chief Investment Officer Franklin Equity India Franklin Local Asset Management Franklin Templeton AMC (India) Pvt Ltd. Chennai, India Anand Radhakrishnan is chief investment officer for Franklin Equity - India, Franklin Templeton Asset Management (India) Pvt Ltd. Mr. Radhakrishnan is responsible for overseeing all the local equity funds. His responsibility includes mentoring all the portfolio managers and also acting as portfolio manager for some key products. He manages Franklin India Bluechip Fund, Franklin India Prima Plus, and Franklin India Taxshield, Franklin India Infotech Fund, and equity portfolio of all hybrid funds. Mr. Radhakrishnan has been in the investment management industry since His past assignments include 8 years as fund manager for Sundaram Mutual Fund. He was also deputy manager in equity research with SBI Funds Management Ltd. Mr. Radhakrishnan holds a postgraduate diploma in management from Indian Institute of Management, Ahmedabad, and a bachelor of technology degree with a specialization in chemical engineering from Anna University, Chennai. He is a Chartered Financial Analyst (CFA) charterholder. 36

37 Management Profile MURALI YERRAM Vice President, Portfolio Advisory Services Franklin Local Asset Management Franklin Templeton AMC (India) Pvt Ltd.. Chennai, India Murali Yerram is a Vice President & Portfolio Manager - Equities for Franklin Templeton India AMC Ltd. He is responsible for advising offshore funds including FTIF and FTIF Franklin World Perspectives Fund. His responsibilities also include equity research on Australia and New Zealand, Singapore and Thailand markets for the Asian Portfolios managed by the Franklin Local Asset Management Asia Equity team. Prior to joining Franklin Templeton Investments, Mr. Yerram worked in the software services industry for Deloitte Consulting, Infosys Technologies and Satyam Computer Services for 7 years. Mr. Yerram earned his MBA in Finance and Accounting from The Wharton School in May, 2007 and his Bachelor degree in Electrical and Electronics Engineering from JNTU college of Engineering, Hyderabad in

38 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 Book: The price per share of a stock divided by its book value (i.e., net worth) per share. For a portfolio, the value represents a weighted average of the stocks it holds. Price to Cash Flow: Supplements price/earnings ratio as a measure of relative value for a stock. 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. Price to Earnings (12-mo Trailing): The share price of a stock, divided by its per-share earnings over the past year. 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. 38

39 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. 39