Templeton Income Trust

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1 JANUARY 1, 2014 The U.S. Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. Class A Class C Class R Class R6 Advisor Class Templeton Global Bond Fund TPINX TEGBX FGBRX FBNRX TGBAX Templeton Global Total Return Fund TGTRX TTRCX Pending FTTRX TTRZX Templeton International Bond Fund TBOAX FCNBX Pending FIBZX PROSPECTUS

2 GOF P-3 05/14 SUPPLEMENT DATED MAY 1, 2014 TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED FUNDS Franklin Alternative Strategies Funds Franklin K2 Alternative Strategies Fund Franklin Pelagos Commodities Strategy Fund Franklin California Tax-Free Income Fund Franklin California Tax-Free Trust Franklin California Insured Tax-Free Income Fund Franklin California Intermediate-Term Tax-Free Income Fund Franklin California Tax-Exempt Money Fund Franklin Custodian Funds Franklin DynaTech Fund Franklin Income Fund Franklin U.S. Government Securities Fund Franklin Utilities Fund Franklin Growth Fund Franklin Federal Tax-Free Income Fund Franklin Global Trust Franklin Global Listed Infrastructure Fund Franklin Global Real Estate Fund Franklin International Small Cap Growth Fund Franklin International Growth Fund Franklin Large Cap Equity Fund Franklin Templeton Emerging Market Debt Opportunities Fund Franklin Gold and Precious Metals Fund Franklin High Income Trust Franklin High Income Fund Franklin Investors Securities Trust Franklin Adjustable U.S. Government Securities Fund Franklin Balanced Fund Franklin Convertible Securities Fund Franklin Equity Income Fund Franklin Floating Rate Daily Access Fund Franklin Limited Maturity U.S. Government Securities Fund Franklin Low Duration Total Return Fund Franklin Real Return Fund Franklin Total Return Fund Franklin Managed Trust Franklin Rising Dividends Fund Franklin Money Fund Franklin Municipal Securities Trust Franklin California High Yield Municipal Fund Franklin Tennessee Municipal Bond Fund Franklin Mutual Recovery Fund Franklin New York Tax-Free Income Fund Franklin New York Tax-Free Trust Franklin New York Intermediate-Term Tax-Free Income Fund Franklin Real Estate Securities Trust Franklin Real Estate Securities Fund Franklin Strategic Mortgage Portfolio Franklin Strategic Series Franklin Biotechnology Discovery Fund Franklin Flex Cap Growth Fund Franklin Focused Core Equity Fund Franklin Global Government Bond Fund Franklin Growth Opportunities Fund Franklin Natural Resources Fund Franklin Small Cap Growth Fund Franklin Small-Mid Cap Growth Fund Franklin Strategic Income Fund Franklin Tax-Free Trust Franklin Alabama Tax-Free Income Fund Franklin Arizona Tax-Free Income Fund Franklin Colorado Tax-Free Income Fund Franklin Connecticut Tax-Free Income Fund Franklin Double Tax-Free Income Fund Franklin Federal Intermediate-Term Tax- Free Income Fund Franklin Federal Limited-Term Tax-Free Income Fund Franklin Florida Tax-Free Income Fund Franklin Georgia Tax-Free Income Fund Franklin High Yield Tax-Free Income Fund Franklin Insured Tax-Free Income Fund Franklin Kentucky Tax-Free Income Fund Franklin Louisiana Tax-Free Income Fund Franklin Maryland Tax-Free Income Fund Franklin Massachusetts Tax-Free Income Fund Franklin Michigan Tax-Free Income Fund Franklin Minnesota Tax-Free Income Fund Franklin Missouri Tax-Free Income Fund Franklin New Jersey Tax-Free Income Fund Franklin North Carolina Tax-Free Income Fund 1 Franklin Ohio Tax-Free Income Fund Franklin Oregon Tax-Free Income Fund Franklin Pennsylvania Tax-Free Income Fund Franklin Virginia Tax-Free Income Fund Franklin Templeton Global Trust Franklin Templeton Hard Currency Fund Franklin Templeton International Trust Franklin India Growth Fund Franklin Templeton Global Allocation Fund Franklin World Perspectives Fund Templeton Foreign Smaller Companies Fund Franklin Templeton Money Fund Trust Franklin Templeton Money Fund Franklin Value Investors Trust Franklin All Cap Value Fund Franklin Balance Sheet Investment Fund Franklin Large Cap Value Fund Franklin MicroCap Value Fund Franklin MidCap Value Fund Franklin Small Cap Value Fund Institutional Fiduciary Trust Money Market Portfolio Templeton China World Fund Templeton Funds Templeton Foreign Fund Templeton World Fund Templeton Global Investment Trust Templeton Asian Growth Fund Templeton BRIC Fund Templeton Emerging Markets Balanced Fund Templeton Emerging Markets Small Cap Fund Templeton Frontier Markets Fund Templeton Global Balanced Fund Templeton Global Smaller Companies Fund Templeton Growth Fund, Inc. Templeton Constrained Bond Fund Templeton Emerging Markets Bond Fund Templeton Global Bond Fund Templeton Global Total Return Fund Templeton International Bond Fund

3 The Prospectus is amended as follows: I. For the Franklin Global Real Estate Fund, the Fund Summary Portfolio Managers section beginning on page 9 is revised as follows: Portfolio Managers WILSON MAGEE Portfolio Manager of FT Institutional and portfolio manager of the Fund since DANIEL PETTERSSON Portfolio Manager and Research Analyst of FT Institutional and portfolio manager of the Fund since May II. For the Franklin Global Real Estate Fund, the portfolio management team in Fund Details Management section beginning on page 18 is revised as follows: The Fund is managed by a team of dedicated professionals focused on investments in the global real estate securities market. The portfolio managers of the team are as follows: WILSON MAGEE Portfolio Manager of FT Institutional Mr. Magee assumed the duties of lead portfolio manager of the Fund in He joined Franklin Templeton Investments in He has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. He joined Franklin Templeton Investments in Prior to joining Franklin Templeton Investments, he was President and portfolio manager of Colony Investment Management. He previously was a portfolio manager at Goldman Sachs Asset Management and Grantham Mayo Van Otterloo (GMO) and an investor at AEW. DANIEL PETTERSSON Portfolio Manager and Research Analyst of FT Institutional Mr. Pettersson has been a portfolio manager of the Fund since May 2014, providing research and advice on the purchases and sales of individual securities, and portfolio risk assessment. Prior to joining Franklin Templeton in 2006, Mr. Pettersson s real estate experience included his work at JM AB, a Swedish real estate developer located in Stockholm and a public company listed on the Nordic Stock Exchange. III. For the Franklin Global Listed Infrastructure Fund, the Fund Summary Portfolio Managers section on page 8 is revised as follows: Portfolio Managers WILSON MAGEE Portfolio Manager of FT Institutional and portfolio manager of the Fund since inception (2013). IV. For the Franklin Global Listed Infrastructure Fund, the portfolio management team in Fund Details Management section beginning on page 22 is revised as follows: The Fund is managed by a team of dedicated professionals focused on investments in domestic and foreign infrastructure-related company securities. The portfolio managers of the team are as follows: WILSON MAGEE Portfolio Manager of FT Institutional Mr. Magee has been the lead portfolio manager of the Fund since inception. He has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The 2

4 degree to which he may perform these functions, and the nature of these functions, may change from time to time. He joined Franklin Templeton Investments in Prior to joining Franklin Templeton Investments, he was President and portfolio manager of Colony Investment Management. He previously was a portfolio manager at Goldman Sachs Asset Management and Grantham Mayo Van Otterloo (GMO) and an investor at AEW. V. For the Franklin Real Estate Securities Fund, the Fund Summary Portfolio Managers section beginning on page 7 is revised as follows: Portfolio Managers WILSON MAGEE Portfolio Manager of FT Institutional and portfolio manager of the Fund since DANIEL SCHER Portfolio Manager and Research Analyst of FT Institutional and portfolio manager of the Fund since May MURAT SENSOY, CFA Portfolio Manager and Research Analyst of FT Institutional and portfolio manager of the Fund since May VI. For the Franklin Real Estate Securities Fund, the portfolio management team in Fund Details Management section beginning on page 14 is revised as follows: The Fund is managed by a team of dedicated professionals focused on investments in equity securities of companies operating in the real estate industry. The portfolio managers of the team are as follows: WILSON MAGEE Portfolio Manager of FT Institutional Mr. Magee assumed the duties of lead portfolio manager of the Fund in He has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. He joined Franklin Templeton Investments in Prior to joining Franklin Templeton Investments, he was President and portfolio manager of Colony Investment Management. He previously was a portfolio manager at Goldman Sachs Asset Management and Grantham Mayo Van Otterloo (GMO) and an investor at AEW. DANIEL SCHER Portfolio Manager and Research Analyst of FT Institutional Mr. Scher has been a portfolio manager of the Fund since May 2014, providing research and advice on the purchases and sales of individual securities, and portfolio risk assessment. He joined Franklin Templeton Investments in Prior to joining the Global Real Estate Securities team in 2007, Mr. Scher had spent over four years performing business development, marketing and client service functions for Franklin Templeton Institutional in Melbourne, Australia. Prior to joining Franklin Templeton in 2002, Mr. Scher worked for the asset management division of the Australia and New Zealand Banking Group (ANZ) providing investment support and research to the institutional funds management distribution team. He was also with Ernst & Young in their international taxation division as a graduate economist. MURAT SENSOY, CFA Portfolio Manager and Research Analyst of FT Institutional Mr. Sensoy has been a portfolio manager of the Fund since May 2014, providing research and advice on the purchases and sales of individual securities, and portfolio risk assessment. He joined Franklin Templeton Investments in Prior to joining the Franklin Templeton Investments, he was a senior investment analyst at UBS Global Asset Management where he was a member of the global real estate securities investment team. He was a senior securities analyst assistant portfolio manager at The Tuckerman Group, State Street Global Advisors real estate investment management and advisory arm. He also worked as an international credit risk officer at State Street Bank. 3

5 VII. For the Franklin All Cap Value Fund, the Fund Summary Portfolio Managers section beginning on page 8 is revised as follows: Portfolio Managers STEVEN B. RAINERI Portfolio Manager of Advisory Services and portfolio manager of the Fund since inception (2007). DONALD G. TAYLOR, CPA Chief Investment Officer of Advisory Services and portfolio manager of the Fund since inception (2007). BRUCE C. BAUGHMAN, CPA Senior Vice President of Advisory Services and portfolio manager of the Fund since inception (2007). WILLIAM J. LIPPMAN President of Advisory Services and portfolio manager of the Fund since inception (2007). VIII. For the Franklin Balance Sheet Investment Fund, the Fund Summary Portfolio Managers section beginning on page 16 is revised as follows: Portfolio Managers BRUCE C. BAUGHMAN, CPA Senior Vice President of Advisory Services and portfolio manager of the Fund since inception (1990). GRACE HOEFIG Portfolio Manager of Advisory Services and portfolio manager of the Fund since DONALD G. TAYLOR, CPA Chief Investment Officer of Advisory Services and portfolio manager of the Fund since WILLIAM J. LIPPMAN President of Advisory Services and portfolio manager of the Fund since inception (1990). IX. For the Franklin Large Cap Value Fund, the Fund Summary Portfolio Managers section beginning on page 23 is revised as follows: Portfolio Managers WILLIAM J. LIPPMAN President of Advisory Services and portfolio manager of the Fund since inception (2000). JAKOV STIPANOV Portfolio Manager of Advisory Services and portfolio manager of the Fund since May DONALD G. TAYLOR, CPA Chief Investment Officer of Advisory Services and portfolio manager of the Fund since inception (2000). BRUCE C. BAUGHMAN, CPA Senior Vice President of Advisory Services and portfolio manager of the Fund since inception (2000). X. For the Franklin MicroCap Value Fund, the Fund Summary Portfolio Managers section beginning on page 30 is revised as follows: Portfolio Managers BRUCE C. BAUGHMAN, CPA Senior Vice President of Advisory Services and portfolio manager of the Fund since inception (1995). DONALD G. TAYLOR, CPA Chief Investment Officer of Advisory Services and portfolio manager of the Fund since

6 WILLIAM J. LIPPMAN President of Advisory Services and portfolio manager of the Fund since inception (1995). XI. For the Franklin MidCap Value Fund, the Fund Summary Portfolio Managers section on page 38 is revised as follows: Portfolio Managers SAMUEL R. KERNER, CFA Portfolio Manager of Advisory Services and portfolio manager of the Fund since JAKOV STIPANOV Portfolio Manager of Advisory Services and portfolio manager of the Fund since May DONALD G. TAYLOR, CPA Chief Investment Officer of Advisory Services and portfolio manager of the Fund since inception (2005). WILLIAM J. LIPPMAN President of Advisory Services and portfolio manager of the Fund since inception (2005). XII. For the Franklin Small Cap Value Fund, the Fund Summary Portfolio Managers section on page 46 is revised as follows: Portfolio Managers STEVEN B. RAINERI Portfolio Manager of Advisory Services and portfolio manager of the Fund since DONALD G. TAYLOR, CPA Chief Investment Officer of Advisory Services and portfolio manager of the Fund since inception (1996). BRUCE C. BAUGHMAN, CPA Senior Vice President of Advisory Services and portfolio manager of the Fund since inception (1996). WILLIAM J. LIPPMAN President of Advisory Services and portfolio manager of the Fund since inception (1996). XIII. For the Franklin All Cap Value Fund, Franklin Balance Sheet Investment Fund, Franklin Large Cap Value Fund, Franklin MicroCap Value Fund, Franklin MidCap Value Fund and Franklin Small Cap Value Fund, the portfolio management teams in Fund Details Management section beginning on page 74 is revised as follows: Management Franklin Advisory Services, LLC (Advisory Services), One Parker Plaza, Ninth Floor, Fort Lee, New Jersey 07024, is the Fund s investment manager. Together, Advisory Services and its affiliates manage as of January 31, 2014, over $857 billion in assets, and have been in the investment management business since The investment manager is a research driven, fundamental investment adviser, pursuing a disciplined value-oriented strategy for the Fund. As a bottom-up investor concentrating primarily on individual securities, the investment manager will focus on the market price of a company s securities relative to its evaluation of the company s potential long-term earnings, asset value or cash flow. The investment manager seeks bargains among the under researched and unloved, out of favor companies that offer, in the investment manager s opinion, attractive long-term potential such as current growth companies that are being ignored by the market, former growth companies that have stumbled recently, dropping sharply in price but that still have growth potential in the investment manager s opinion, and companies that are or may be potential turnaround candidates or takeover targets. Each Fund is managed by a team of dedicated professionals focused on investments in equity securities. The portfolio managers have responsibility for the day-to-day management of particular Funds and operate 5

7 as a team to develop ideas and implement investment strategy for all of the Funds. The portfolio managers of the team are as follows: BRUCE C. BAUGHMAN, CPA Senior Vice President of Advisory Services Mr. Baughman has been a portfolio manager of All Cap Value Fund, Large Cap Value Fund and Small Cap Value Fund since inception and lead portfolio manager of Balance Sheet Fund and MicroCap Value Fund since inception. He joined Franklin Templeton Investments in GRACE HOEFIG Portfolio Manager of Advisory Services Ms. Hoefig has been a co-lead portfolio manager of the Balance Sheet Fund since She joined Franklin Templeton Investments in SAMUEL R. KERNER, CFA Portfolio Manager of Advisory Services Mr. Kerner has been a portfolio manager of the MidCap Value Fund since 2005 and assumed the duties of lead portfolio manager of the MidCap Value Fund in He joined Franklin Templeton Investments in WILLIAM J. LIPPMAN President of Advisory Services Mr. Lippman has been President and a portfolio manager of each Fund since inception. He joined Franklin Templeton Investments in STEVEN B. RAINERI Portfolio Manager of Advisory Services Mr. Raineri has been a lead portfolio manager of the All Cap Value Fund since inception and a lead portfolio manager of the Small Cap Value Fund since He joined Franklin Templeton Investments in JAKOV STIPANOV Portfolio Manager of Advisory Services Mr. Stipanov has been a portfolio manager of the MidCap Value Fund and Large Cap Value Fund since May He joined Franklin Templeton Investments in Prior to joining Franklin Templeton Investments he served as an equity analyst with Systematic Financial where he conducted companyspecific research spanning the market capitalization spectrum. He was a portfolio assistant with Scudder, Stevens and Clark and an analyst with Stein Roe Farnham, where he conducted fundamental research coverage on the technology sector. DONALD G. TAYLOR, CPA Chief Investment Officer of Advisory Services Mr. Taylor has been a portfolio manager of the All Cap Value Fund, Large Cap Value Fund, MidCap Value Fund and Small Cap Value Fund since inception and of the Balance Sheet Fund and MicroCap Value Fund since He joined Franklin Templeton Investments in CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. The following individuals are jointly responsible for the day-to-day management of the Funds: All Cap Value Fund Steven B. Raineri. Mr. Raineri has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. Donald G. Taylor. Mr. Taylor is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. Bruce C. Baughman. Mr. Baughman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. 6

8 William J. Lippman. Mr. Lippman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. Balance Sheet Fund Bruce C. Baughman and Grace Hoefig. As co-lead portfolio managers, Mr. Baughman and Ms. Hoefig have equal authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which each portfolio manager may perform these functions, and the nature of these functions, may change from time to time. Donald G. Taylor. Mr. Taylor is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. William J. Lippman. Mr. Lippman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. Large Cap Value Fund William J. Lippman. Mr. Lippman has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. Jakov Stipanov. Mr. Stipanov is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed Donald G. Taylor. Mr. Taylor is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. Bruce C. Baughman. Mr. Baughman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. MicroCap Value Fund Bruce C. Baughman. Mr. Baughman has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. Donald G. Taylor. Mr. Taylor is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. William J. Lippman. Mr. Lippman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. MidCap Value Fund Samuel R. Kerner. Mr. Kerner has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. Jakov Stipanov. Mr. Stipanov is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. 7

9 Donald G. Taylor. Mr. Taylor is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. William J. Lippman. Mr. Lippman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. Small Cap Value Fund Steven B. Raineri. Mr. Raineri has primary responsibility for the investments of the Fund. He has final authority over all aspects of the Fund s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio risk assessment, and the management of daily cash balances in accordance with anticipated investment management requirements. The degree to which he may perform these functions, and the nature of these functions, may change from time to time. Donald G. Taylor. Mr. Taylor is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. Bruce C. Baughman. Mr. Baughman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. William J. Lippman. Mr. Lippman is a portfolio manager of the Fund, providing support to the lead portfolio manager(s) as needed. The Fund s SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of Fund shares. XIV. For all Funds offering Class R6 shares, effective May 1, 2014, the Your Account Choosing a Share Class Qualified Investors Class R6 section is revised as follows: Qualified Investors Class R6 Class R6 shares are available to the following investors: Employer Sponsored Retirement Plans where plan level or omnibus accounts are held on the books of Franklin Templeton Investor Services. Endowments; foundations; local, city and state governmental institutions; corporations; non-profit organizations that are organized as corporations; and insurance companies, (collectively institutional investors ) when purchasing directly from a Fund. The minimum initial investment for institutional investors is $1,000,000 per Fund. Other Franklin Templeton funds and funds for which Franklin Templeton investment managers provide advisory or subadvisory services. XV. For all Funds, the Your Account Buying Shares By Phone/Online section lead-in is revised as follows: By Phone/Online (800) Note: certain account types are not available for online account access. Please keep this supplement with your prospectus for future reference. 8

10 Contents FUND SUMMARIES INFORMATION ABOUT THE FUND YOU SHOULD KNOW BEFORE INVESTING MORE INFORMATION ON INVESTMENT POLICIES, PRACTICES AND RISKS/FINANCIAL HIGHLIGHTS INFORMATION ABOUT SALES CHARGES, QUALIFIED INVESTORS, ACCOUNT TRANSACTIONS AND SERVICES Templeton Global Bond Fund... 2 Templeton Global Total Return Fund Templeton International Bond Fund FUND DETAILS Templeton Global Bond Fund Templeton Global Total Return Fund Templeton International Bond Fund Distributions and Taxes YOUR ACCOUNT Choosing a Share Class Buying Shares Investor Services Selling Shares Exchanging Shares Account Policies Questions FOR MORE INFORMATION WHERE TO LEARN MORE ABOUT THE FUND Back Cover 1

11 FUND SUMMARIES Templeton Global Bond Fund Templeton Global Bond Fund FUND SUMMARIES Templeton Global Bond Fund Investment Goal Current income with capital appreciation and growth of income. Fees and Expenses of the Fund These tables describe the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts in Class A if you and your family invest, or agree to invest in the future, at least $100,000 in Franklin Templeton funds. More information about these and other discounts is available from your financial professional and under Your Account on page 99 in the Fund s Prospectus and under Buying and Selling Shares on page 73 of the Fund s Statement of Additional Information. SHAREHOLDER FEES (fees paid directly from your investment) Class A Class C Class R Class R6 1 Class Advisor Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price) 4.25% None None None None Maximum Deferred Sales Charge (Load) (as percentage of the lower of original purchase price or sale proceeds) None % None None None 1. The Fund began offering Class R6 shares on May 1, There is a 0.75% contingent deferred sales charge that applies to investments of $1 million or more (see Sales Charges - Class A under Choosing a Share Class ) and purchases by certain retirement plans without an initial sales charge. ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment) Class A Class C Class R Class R6 Advisor Class Management fees 0.39% 0.39% 0.39% 0.39% 0.39% Distribution and service (12b 1) fees 0.25% 0.65% 0.50% None None Other expenses % 0.23% 0.23% 0.13% 0.23% Acquired fund fees and expenses 0.02% 0.02% 0.02% 0.02% 0.02% Total annual Fund operating expenses 0.89% 1.29% 1.14% 0.54% 0.64% Fee waiver and/or expense reimbursement % -0.01% -0.01% -0.01% -0.01% Total annual Fund operating expenses after fee waiver and/or expense reimbursement 2, % 1.28% 1.13% 0.53% 0.63% 1. Other expenses for Class R6 represent an estimate of expenses, including the effect of this Class s lower shareholder servicing fees. 2. Management has contractually agreed in advance to reduce its fee as a result of the Fund s investment in a Franklin Templeton money fund (acquired fund) for at least the next 12-month period. Contractual fee waiver and/or expense reimbursement agreements may not be terminated during the term set forth above. 3. Total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights, which reflect the operating expenses of the Fund and do not include acquired fund fees and expenses. Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of the period. The Example also assumes that your investment has a 5% return each year and that the Fund s operating expenses remain the same. The Example reflects adjustments made to the Fund s operating expenses due to the fee waiver and/or expense reimbursement by management for the 1 Year numbers only. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 1 Year 3 Years 5 Years 10 Years Class A $511 $696 $896 $1,474 Class C $230 $408 $707 $1,556 Class R $115 $361 $627 $1,386 Class R6 $54 $172 $301 $676 Advisor Class $64 $204 $356 $

12 FUND SUMMARIES Templeton Global Bond Fund Templeton Global Bond Fund FUND SUMMARIES 1 Year 3 Years 5 Years 10 Years If you do not sell your shares: Class C $130 $408 $707 $1,556 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual Fund operating expenses or in the example, affect the Fund s performance. During the most recent fiscal year, the Fund s portfolio turnover rate was 42.39% of the average value of its portfolio. Principal Investment Strategies Under normal market conditions, the Fund invests at least 80% of its net assets in bonds. Bonds include debt securities of any maturity, such as bonds, notes, bills and debentures. The Fund invests predominantly in bonds issued by governments and government agencies located around the world. The Fund may also invest in inflation-indexed securities and securities or structured products that are linked to or derive their value from another security, asset or currency of any nation. In addition, the Fund s assets are invested in issuers located in at least three countries (including the U.S.). The Fund may invest without limit in developing markets. Although the Fund may buy bonds rated in any category, it focuses on investment grade bonds. These are issues rated in the top four rating categories by at least one independent rating agency, such as Standard & Poor s (S&P ) or Moody s Investors Service (Moody s) or, if unrated, determined by the Fund s investment manager to be of comparable quality. The Fund may invest up to 25% of its total assets in bonds that are rated below investment grade. Generally, lower rated securities pay higher yields than more highly rated securities to compensate investors for the higher risk. The Fund is a non-diversified fund, which means it generally invests a greater portion of its assets in the securities of one or more issuers and invests overall in a smaller number of issuers than a diversified fund. For purposes of pursuing its investment goal, the Fund regularly uses various currency related transactions involving derivative instruments, including currency and cross currency forwards and currency and currency index futures contracts. The Fund maintains significant positions in currency related derivative instruments as a hedging technique or to implement a currency investment strategy, which could expose a large amount of the Fund s assets to obligations under these instruments. The result of such transactions may represent, from time to time, a large component of the Fund s investment returns. The result of such transactions may represent, from time to time, a large component of the Fund s investment returns. The Fund may also enter into various other transactions involving derivatives, including interest rate/bond futures and interest rate swap agreements. These derivative instruments may be used for hedging purposes, to enhance returns, or to obtain net long or net negative (short) exposure to selected currencies, interest rates, countries or durations. When choosing investments for the Fund, the investment manager allocates the Fund s assets based upon its assessment of changing market, political and economic conditions. It considers various factors, including evaluation of interest rates, currency exchange rate changes and credit risks. The investment manager may consider selling a security when it believes the security has become fully valued due to either its price appreciation or changes in the issuer s fundamentals, or when the investment manager believes another security is a more attractive investment opportunity. Principal Risks You could lose money by investing in the Fund. Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed by, any bank, and are not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other agency of the U.S. government. Currency Management Strategies Currency management strategies may substantially change the Fund s exposure to currency exchange rates and could result in losses to the Fund if currencies do not perform as the investment manager expects. In addition, currency management strategies, to the extent that they reduce the Fund s exposure to currency risks, may also reduce the Fund s ability to benefit from favorable changes in currency exchange rates. Using currency management strategies for purposes other than hedging further increases the Fund s exposure to foreign investment losses. Currency markets generally are not as regulated as securities markets. In addition, currency rates may fluctuate significantly over short periods of time, and can reduce returns. 4 5

13 FUND SUMMARIES Templeton Global Bond Fund Templeton Global Bond Fund FUND SUMMARIES Foreign Securities Investing in foreign securities typically involves more risks than investing in U.S. securities, and includes risks associated with: political and economic developments - the political, economic and social structures of some foreign countries may be less stable and more volatile than those in the U.S.; trading practices - government supervision and regulation of foreign securities and currency markets, trading systems and brokers may be less than in the U.S.; availability of information - foreign issuers may not be subject to the same disclosure, accounting and financial reporting standards and practices as U.S. issuers; limited markets - the securities of certain foreign issuers may be less liquid (harder to sell) and more volatile; and currency exchange rate fluctuations and policies. The risks of foreign investments may be greater in developing or emerging market countries. Developing Market Countries The Fund s investments in developing market countries are subject to all of the risks of foreign investing generally, and have additional heightened risks due to a lack of established legal, political, business and social frameworks to support securities markets, including: delays in settling portfolio securities transactions; currency and capital controls; greater sensitivity to interest rate changes; pervasiveness of corruption and crime; currency exchange rate volatility; and inflation, deflation or currency devaluation. Interest Rate When interest rates rise, debt security prices generally fall. The opposite is also generally true: debt security prices rise when interest rates fall. In general, securities with longer maturities are more sensitive to these interest rate changes. Credit An issuer of debt securities may fail to make interest payments and repay principal when due, in whole or in part. Changes in an issuer s financial strength or in a security s credit rating may affect a security s value. Sovereign Debt Securities Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations when due because of cash flow problems, insufficient foreign reserves, the relative size of the debt service burden to the economy as a whole, the government s policy towards principal international lenders such as the International Monetary Fund, or the political considerations to which the government may be subject. If a sovereign debtor defaults (or threatens to default) on its sovereign debt obligations, the indebtedness may be restructured. Some sovereign debtors have in the past been able to restructure their debt payments without the approval of some or all debt holders or to declare moratoria on payments. In the event of a default on sovereign debt, the Fund may also have limited legal recourse against the defaulting government entity. High-Yield Debt Securities Issuers of lower-rated or high-yield debt securities (also called junk bonds ) are not as strong financially as those issuing higher credit quality debt securities. These issuers are generally considered predominantly speculative by the applicable rating agencies as these issuers are more likely to encounter financial difficulties and are more vulnerable to changes in the relevant economy, such as a recession or a sustained period of rising interest rates, that could affect their ability to make interest and principal payments when due. The prices of high-yield debt securities generally fluctuate more than those of higher credit quality. High-yield debt securities are generally more illiquid (harder to sell) and harder to value. Derivative Instruments The performance of derivative instruments depends largely on the performance of an underlying instrument, such as a currency, security or index, and derivative instruments often have risks similar to the underlying instrument, in addition to other risks. Derivatives involve costs and can create economic leverage in the Fund s portfolio which may result in significant volatility and cause the Fund to participate in losses (as well as gains) in an amount that significantly exceeds the Fund s initial investment. Other risks include illiquidity, mispricing or improper valuation of the derivative instrument, and imperfect correlation between the value of the derivative and the underlying instrument so that the Fund may not realize the intended benefits. When used for hedging, the change in value of the derivative may also not correlate specifically with the currency, security or other risk being hedged. Derivatives also present the risk that the other party to the transaction will fail to perform. Regional Adverse conditions in a certain region or country can adversely affect securities of issuers in other countries whose economies appear to be unrelated. To the extent that the Fund invests a significant portion of its assets in a specific geographic region or a particular country, the Fund will generally have more exposure to the specific regional or country economic risks. In the event of economic or political turmoil or a deterioration of diplomatic relations in a region or country where a substantial portion 6 7

14 FUND SUMMARIES Templeton Global Bond Fund Templeton Global Bond Fund FUND SUMMARIES of the Fund s assets are invested, the Fund may experience substantial illiquidity or reduction in the value of the Fund s investments. Inflation-Indexed Securities Inflation-indexed securities have a tendency to react to changes in real interest rates. Real interest rates represent nominal (stated) interest rates lowered by the anticipated effect of inflation. In general, the price of an inflation-indexed security decreases when real interest rates increase, and increases when real interest rates decrease. Interest payments on inflation-indexed securities will fluctuate as the principal and/or interest is adjusted for inflation and can be unpredictable. Income Because the Fund can only distribute what it earns, the Fund s distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. Non-Diversification Because the Fund is non-diversified, it may be more sensitive to economic, business, political or other changes affecting individual issuers or investments than a diversified fund, which may result in greater fluctuation in the value of the Fund s shares and greater risk of loss. Market The market values of securities owned by the Fund will go up or down, sometimes rapidly or unpredictably. A security s market value may be reduced by market activity or other results of supply and demand unrelated to the issuer. This is a basic risk associated with all securities. When there are more sellers than buyers, prices tend to fall. Likewise, when there are more buyers than sellers, prices tend to rise. Management The Fund is subject to management risk because it is an actively managed investment portfolio. The Fund s investment manager applies investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these decisions will produce the desired results. Performance The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund s performance from year to year for Class A shares. The table shows how the Fund s average annual returns for 1 year, 5 years, 10 years or since inception, as applicable, compared with those of a broad measure of market performance. The Fund s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You can obtain updated performance information at franklintempleton. com or by calling (800) DIAL BEN/ Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown. CLASS A ANNUAL TOTAL RETURNS 30% 20% 10% 0% -10% 21.29% % % % % 2007 Year 18.86% 12.68% -2.37% 15.81% Best Quarter: Q % Worst Quarter: Q % As of September 30, 2013, the Fund s year-to-date return was -0.48%. AVERAGE ANNUAL TOTAL RETURNS (figures reflect sales charges) For the periods ended December 31, Year 5 Years 10 Years Templeton Global Bond Fund - Class A Return Before Taxes 10.89% 9.03% 10.08% Return After Taxes on Distributions 8.51% 6.78% 7.88% Return After Taxes on Distributions and Sale of Fund Shares 7.34% 6.46% 7.49% Templeton Global Bond Fund - Class C 14.40% 9.54% 10.12% Templeton Global Bond Fund - Class R 15.52% 10.00% 10.39% Templeton Global Bond Fund - Advisor Class 16.15% 10.25% 10.84% Citigroup World Government Bond Index (WGBI) (index reflects no deduction for fees, expenses or taxes) 1.65% 5.27% 6.04% 6.28%

15 FUND SUMMARIES Templeton Global Bond Fund Templeton Global Bond Fund FUND SUMMARIES Performance information for Class R6 shares is not shown because this class did not have a full calendar year of operations as of the date of this prospectus. Historical performance for Class R shares prior to their inception is based on the performance of Class A shares. Class R performance has been adjusted to reflect differences in sales charges and 12b 1 expenses between classes. The after-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A and after-tax returns for other classes will vary. Investment Manager Franklin Advisers, Inc. (Advisers) Taxes The Fund s distributions are generally taxable to you as ordinary income, capital gains, or some combination of both, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account, in which case your distributions would generally be taxed when withdrawn from the tax-deferred account. Payments to Broker-Dealers and Other Financial Intermediaries If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your financial advisor or visit your financial intermediary s website for more information. Portfolio Managers MICHAEL HASENSTAB, PH.D. Senior Vice President of Advisers and portfolio manager of the Fund since SONAL DESAI, PH.D. Portfolio Manager of Advisers and portfolio manager of the Fund since Purchase and Sale of Fund Shares You may purchase or redeem shares of the Fund on any business day online through our website at, by mail (Franklin Templeton Investor Services, P.O. Box 33030, St. Petersburg, FL ), or by telephone at (800) For Class A, C and R the minimum initial purchase for most accounts is $1,000 (or $50 under an automatic investment plan). Class R6 and Advisor Class are only available to certain qualified investors and the minimum initial investment will vary depending on the type of qualified investor, as described under Your Account Choosing a Share Class Qualified Investors Class R6 and Advisor Class in the Fund s prospectus

16 FUND SUMMARIES Templeton Global Total Return Fund Templeton Global Total Return Fund FUND SUMMARIES Templeton Global Total Return Fund Investment Goal Total investment return consisting of a combination of interest income, capital appreciation, and currency gains. Fees and Expenses of the Fund These tables describe the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts in Class A if you and your family invest, or agree to invest in the future, at least $100,000 in Franklin Templeton funds. More information about these and other discounts is available from your financial professional and under Your Account on page 99 in the Fund s Prospectus and under Buying and Selling Shares on page 73 of the Fund s Statement of Additional Information. SHAREHOLDER FEES (fees paid directly from your investment) Class A Class C Class R Class R6 1 Class Advisor Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price) 4.25% None None None None Maximum Deferred Sales Charge (Load) (as percentage of the lower of original purchase price or sale proceeds) None % None None None 1. The Fund began offering Class R6 shares on May 1, There is a 0.75% contingent deferred sales charge that applies to investments of $1 million or more (see Sales Charges - Class A under Choosing a Share Class ) and purchases by certain retirement plans without an initial sales charge. ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment) Class A Class C Class R Class R6 Advisor Class Management fees % 0.61% 0.61% 0.61% 0.61% Distribution and service (12b 1) fees 0.25% 0.65% 0.50% None None Other expenses 1, % 0.16% 0.16% 0.08% 0.16% Acquired fund fees and expenses 0.01% 0.01% 0.01% 0.01% 0.01% Total annual Fund operating expenses 1.03% 1.43% 1.28% 0.70% 0.78% Fee waiver and/or expense reimbursement % -0.02% -0.02% -0.02% -0.02% Total annual Fund operating expenses after fee waiver and/or expense reimbursement 3, % 1.41% 1.26% 0.68% 0.76% 1. Management fees and other expenses have been restated to reflect current fiscal year fees and expenses as a result of the bundling of the Fund s investment management agreement with its fund administration agreement effective July 1, Such combined investment management fees are described further under Management in the Fund s prospectus. Total annual fund operating expenses are not affected by such bundling. 2. Other expenses for Class R6 represent an estimate of expenses, including the effect of this Class s lower shareholder servicing fees. 3. Management has contractually agreed in advance to reduce its fee as a result of the Fund s investment in a Franklin Templeton money fund (acquired fund) for at least the next 12-month period. Contractual fee waiver and/or expense reimbursement agreements may not be terminated during the term set forth above. 4. Total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights, which reflect the operating expenses of the Fund and do not include acquired fund fees and expenses. Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of the period. The Example also assumes that your investment has a 5% return each year and that the Fund s operating expenses remain the same. The Example reflects adjustments made to the Fund s operating expenses due to the fee waiver and/or expense reimbursement by management for the 1 Year numbers only. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 12 13