Product Details. Overview 1. Performance Data. Unconstrained Fixed Income March 31, Product Profile. Average Annual Total Returns (USD %) 2

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1 Franklin Emerging Market Debt Opportunities (USD) Composite Unconstrained Fixed Income Product Profile Product Details Strategy Assets $2,327,944, Inception Date 08/31/1996 Base Currency USD Investment Style Unconstrained Overview 1 Emerging market debt strategy that takes an absolute return approach, whereby we will only invest in countries or securities we find attractive, irrespective of benchmark weights Diversified portfolio of hard and local currency emerging market issuers Return Target: 8 10% per annum over the course of a full market cycle Performance Data Average Annual Total Returns (USD %) 2 Since Inception 3 Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs 20 Yrs (08/31/1996) Franklin Emerging Market Debt Opportunities (USD) Composite - GROSS Franklin Emerging Market Debt Opportunities (USD) Composite - NET JP Morgan EMBI Global Diversified (USD Based) JP Morgan GBI EM Broad Diversified BofA Merrill Lynch Emerging Market Corporate Plus (USD Hedged) 1. Targets represent the goal the strategy seeks against the JP Morgan EMBI Global Diversified (USD Based) and do not take into account management fees or other expenses an investor would incur in the management of its account, which would reduce any returns. There is no assurance that employment of the strategy will result in the intended targets being achieved. 2. Periods of more than one year are annualized. Past performance is not an indicator or a guarantee of future performance.

2 20% 10% 0% -10% Mths YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs 20 Yrs Since Inception Franklin Emerging Market Debt Opportunities (USD) Composite - GROSS Franklin Emerging Market Debt Opportunities (USD) Composite - NET JP Morgan EMBI Global Diversified (USD Based) JP Morgan GBI-EM Broad Diversified BofA Merrill Lynch Emerging Market Corporate Plus (USD Hedged) Calendar Year Returns (USD %) Franklin Emerging Market Debt Opportunities (USD) Composite - GROSS Franklin Emerging Market Debt Opportunities (USD) Composite - NET JP Morgan EMBI Global Diversified (USD Based) Portfolio Manager Insight Market Review Emerging-market (EM) hard-currency government bonds suffered a 1.74% fall during the quarter, as per the JP Morgan Emerging Markets Bond Global Diversified (EMBIGD). Ten-year US Treasury yields rose 33 basis points (bps), to 2.74% at the end of March. In addition, the spread-toworst of US dollar-denominated EM sovereign debt over US Treasuries widened by some 18 bps. EM hard-currency corporate bonds fell by 0.98%, as per the ICE BofAML Emerging Markets Corporate Plus, hedged into US dollars. EM local-currency government bonds returned 4.19% for the quarter, unhedged in US-dollar terms, as per the JP Morgan Government Bond Emerging Markets (GBI-EM) Broad Diversified. EM local-currency bond yields fell during the quarter, and EM currencies mostly appreciated against the US dollar. Performance Review 3 The strategy s position in South African local-currency bonds was the main contributor to its performance during the quarter. South Africa s Deputy President Cyril Ramaphosa became president in February 2018, and is generally considered to stand for prudent government, ethical leadership and a constructive attitude toward business. Since he became president, South Africa s central bank has raised its forecast of the country s economic growth to 1.9% for In addition, local interest rates moved lower after South Africa s Reserve Bank cut its policy rate by 25 bps in March, as headline inflation fell to its lowest level in three years. The strategy s position in Venezuelan oil warrants also contributed to performance. Venezuela defaulted on a number of bonds in late 2017, but these warrants were one of the last instruments to be serviced. Payments on these warrants are connected to oil prices, which rose during the quarter after Saudi Arabia announced that it was working on a long-term oil production agreement with Russia. This means that the semi-annual payment due in April is certain to be triggered, although it remains unclear whether payment will be made. The strategy s position in Uruguayan local-currency bonds was the main detractor from returns. These bonds rallied in 2017 but have performed poorly since the beginning of this year, when Uruguay s quarterly debt report highlighted the need for additional borrowing. Uruguay s government is estimated to need around US$2.7 billion in financing in 2018, which may include a further extension of the country s nominal-peso curve and the swapping of existing bonds for longer-duration debt. Outlook & Strategy EM debt produced strong returns in As a result, 2018 started with fairly stretched valuations, despite the continued strengthening of emerging markets economic fundamentals. The global economy s improving health has sparked concerns that long-dormant inflationary pressures will finally emerge. Some investors fear that higher inflation may force central banks to reduce their bond-buying programs and raise interest rates more aggressively than expected. These fears, in turn, led to a spike in volatility at the start of February, followed by rising bond yields in developed markets. Emerging markets, by contrast, have experienced only a marginal correction since early February, partly due to some investor outflows from the asset class. Politics will continue to be an important hurdle for emerging markets this year, with elections due in Mexico, Colombia, Brazil and Venezuela, among others. In addition, US policies and idiosyncratic stories (such as the talks to renegotiate the North American Free Trade Agreement) are likely to remain dominant. ftinstitutional.com 2

3 Portfolio Characteristics of a Representative Account 3,4 JP Morgan EMBI Global Diversified (USD Portfolio Based) Number of Securities Including Cash Yield to Maturity 8.23% 5.41% Yield to Worst 8.22% 5.40% Average Duration 3.77 Yrs 6.79 Yrs Average Credit Quality 5 B+ BB+ Average Weighted Maturity 7.26 Yrs Yrs Duration to Worst 4.12 Yrs 6.78 Yrs Portfolio Diversification of a Representative Account 3 Country Allocation Colombia South Africa Mexico Azerbaijan Russia Peru Trinidad and Tobago Ukraine Risk Category Allocation 6 One Iraq Nigeria Turkey Argentina Brazil Uruguay El Salvador Tunisia Georgia Kazakhstan Indonesia Republic of Angola Ghana Chad Republic of Armenia GRENADA Ethiopia Gabon One Two Three Residual Supranational Funds Geographic Allocation 6 MIDDLE EAST / AFRICA Kenya Venezuela Mozambique Bosnia and Herzegovina CAMEROON Egypt Dominican Republic Suriname Jamaica Republic of Belarus Uganda Jordan Sri Lanka Cash Supranational Mixed Two LATIN AMERICA Three EASTERN EUROPE Residual 2.81 FAR EAST / ASIA RESIDUAL 2.81 Supranational 0.89 FUNDS 0.61 Funds 0.61 SUPRANATIONAL % 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% 5. The average credit quality (ACQ) rating may change over time. The portfolio itself has not been rated by an independent rating agency. The letter rating, which may be based on bond ratings from different agencies, is provided to indicate the average credit rating of the portfolio s underlying bonds and generally ranges from AAA (highest) to D (lowest). The ACQ is determined by assigning a sequential integer to all credit ratings AAA to D, taking a simple, asset-weighted average of debt holdings by market value and rounding to the nearest rating. The risk of default increases as a bond s rating decreases, so the ACQ provided is not a statistical measurement of the portfolio s default risk because a simple, weighted average does not measure the increasing level of risk from lower rated bonds. The ACQ is provided for informational purposes only. Derivatives are excluded from this breakdown. ftinstitutional.com 3

4 Currency Allocation 6 US Dollar Japanese Yen Colombian Peso Mexican Peso South African Rand Uruguayan Peso Turkish Lira Ghanaian Cedi New Kenyan Shilling Euro Georgian Lari Egyptian Pound Peruvian Nuevo Sol Kazakhstani Tenge Dominican Peso Ugandan Shilling Brazilian Real Azerbaijani Manat Russian Ruble % 20% 40% 60% 80% Portfolio Allocation 6 Sovereign Quasi-Sovereign Corporates Residual Funds % 10% 20% 30% 40% 50% 60% 70% Supplemental Performance Statistics Supplemental Risk Statistics (USD) 7,8 3 Yrs 5 Yrs 10 Yrs Since Inception Standard Deviation (%) Franklin Emerging Market Debt Opportunities (USD) Composite JP Morgan EMBI Global Diversified (USD Based) Tracking Error (%) Information Ratio Sharpe Ratio Franklin Emerging Market Debt Opportunities (USD) Composite JP Morgan EMBI Global Diversified (USD Based) Investment Philosophy Our philosophy is that a diversified portfolio consisting of issues denominated in hard and local currencies has the potential to generate attractive returns at lower levels of absolute risk than the standard emerging market debt benchmarks, which tend to be concentrated in a few issuers. We believe that a bottom up, research-driven, qualitative investment process, combined with a risk-controlled approach, has the potential to achieve our objective of outperforming standard benchmarks at low levels of absolute risk. Investment Process Franklin s Emerging Market Debt Opportunities investment process can be summarized in three integral steps country allocation, currency allocation and issuer selection. 7. Risk statistics are calculated using gross of fees composite performance. 8. Beta, Information Ratio and Tracking Error information are measured against the JP Morgan EMBI Global Diversified (USD Based). ftinstitutional.com 4

5 Ongoing Monitoring and Risk Management 1. Country Allocation 2. Currency Allocation 3. Issuer Selection Countries are ranked into three risk categories (high/medium/low) Yield vs. Fundamentals Improving Credit Potential to Help the Strategy Meet its Return Target Hard vs. Local Currency Assessment Yield vs. Risk Volatility Liquidity Relative Pricing Sovereign Debt Emerging Market Credit (Sovereign, Quasi-Sovereign, Corporate) Local Asset Management Corporate Credit Global Macro Emerging Market Equity Investment Team Franklin Emerging Market Debt Opportunities Management Team Years with Firm Years Experience William Ledward Nicholas Hardingham, CFA Fatma Charlwood Philip Spires Stephanie Marjan Ouwendijk, CFA 3 10 Additional Resources Corporates - High Yield Corporates - Investment Grade Fixed Income Policy Committee Global Sovereign/EMD Local Asset Management Templeton Emerging Markets Equity Product Managers Years with Firm Years Experience Alberto Landi 9 9 Stuart Lingard 6 20 ftinstitutional.com 5

6 Important Legal Information Franklin claims compliance with the Global Investment Performance Standards (GIPS ). Franklin (the firm ) encompasses the equity, fixed income and balanced accounts managed by Franklin Advisers, Inc., and related Franklin affiliates, including, effective 1 January 2007, the equity accounts managed by the institutional investment teams of Franklin Templeton Institutional, LLC under the former firm name of Fiduciary Global Advisors. The combined equity assets of Franklin and Fiduciary Global Advisors form the Franklin Equity Group (formerly Franklin Global Advisers prior to 30 June 2010) unit of Franklin. Effective 1 January 2006, the fixed income assets managed from that date forward by Franklin Templeton Institutional, LLC ( FTI ) or its related affiliates (managed previously by Fiduciary Trust Company International - Institutional Division or FTCI s Institutional Division ) that went through the institutional portfolio review process were combined with the fixed income assets of Franklin to form the Franklin Templeton Fixed Income unit of Franklin. The primary reason for these changes to the firm definition was to consolidate equity and fixed income asset management for Franklin (as previously defined), Fiduciary Global Advisors (institutional equities) and FTCI s Institutional Division (institutional fixed income) under one firm, Franklin. The firm definition for Franklin does not include multi-strategy asset allocation portfolios managed by Franklin Templeton Multi-Asset Solutions (FTMAS), which was previously known as Franklin Templeton Solutions as well as Franklin Templeton Multi-Asset Strategies and the wrap-fee and non-wrap-fee accounts managed by Franklin Separately Managed Accounts (formerly Franklin Portfolio Advisors) or Franklin Europe which integrated into the Templeton firm definition effective 1 December Franklin Emerging Market Debt Opportunities (USD) Composite consists of all portfolios managed on a fully discretionary basis with an investment objective that seeks to achieve an above total return by investing in emerging market sovereign, quasi-sovereign and corporate debt instruments in both local and G7 currencies. In addition, the strategy may invest in below investment grade bonds (rated below BBB-). The strategy is not constrained by benchmark weightings and may take tactical exposure to G7 as well as to emerging market currencies, but with the objective of managing to the base currency needs of a U.S. dollar (USD) investor. The strategy regularly uses currency forwards, options, interest rate futures, credit-linked notes and, on a somewhat less frequent basis, other derivatives such as swaps (including credit default swaps and total return swaps) for hedging purposes or for investment to control risk or assume tactical exposure to various foreign currencies or asset classes consistent with the investment objective. Occasionally, the strategy may engage in writing puts and calls on securities. Total returns are presented in U.S. dollars both gross and net of investment advisory fees, are inclusive of commissions and transaction costs, and assume reinvestment of any dividends, interest income, capital gains, or other earnings. Periods greater than one year are shown as average annual total returns. Performance data is shown rounded to the nearest hundredth. The returns presented for periods prior to 1 January 2000 are not in compliance with the GIPS standards. Past performance is not an indicator or a guarantee of future performance. The JP Morgan EMBI Global Diversified is a market value weighted fixed income index comprised of U.S. dollar denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities. The secondary benchmark, JP Morgan GBI-EM Broad Diversified, includes securities denominated in local currencies. The JP Morgan GBI-EM Broad Diversified USD-Unhedged is a U.S. dollar denominated market value weighted fixed income index comprised of local currency government bonds of emerging market countries. As of December 31, 2012 the third benchmark was changed to The BofA Merrill Lynch Emerging Markets Corporate Plus (100% Hedged into USD). This benchmark is a capitalization weighted fixed income index hedged to the U.S. dollar and comprised of U.S. dollar and Euro denominated emerging markets non-sovereign debt publicly issued within the major domestic and European markets. Because three countries dominate most emerging markets indices, the firm does not base its asset allocation upon any emerging market index. Rather, the firm s asset allocation is constrained by three sets of investment guidelines consisting of currency denomination, regions, and country selection. Although the firm s strategy in emerging market debt is not managed to a benchmark, we are including three indices for comparative purposes, to represent the investment environment existing during the time periods shown. es are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. To receive a complete list and description of Franklin composites (including any single account mutual fund composite) and/or a presentation that adheres to the GIPS standards for any composite, contact your Franklin Templeton institutional representative at (800) Intended for Recipient only. FTI has provided these materials to you with the understanding that you have or control more than $50 million in assets under management (if this is not correct please let FTI promptly know). FTI is not undertaking to provide impartial advice. Nothing herein is intended to provide fiduciary advice. FTI has a financial interest. CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. Important data provider notices and terms available at 3. Portfolio information is based on a representative account taken from the Franklin Emerging Market Debt Opportunities (USD) Composite. The information is historical, may not reflect current or future characteristics and may vary significantly among individual separate accounts depending on a variety of factors such as portfolio size, specific investment guidelines and inception dates of the individual accounts. 4. Yield to Maturity, Yield to Worst, Average Duration and Average Weighted Maturity reflect certain derivatives held in Portfolio (or their underlying reference assets). 6. Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors. Information is historical and may not reflect current or future portfolio characteristics. All holdings are subject to change. 9. Information Ratio is a way to evaluate a manager s ability to outperform a benchmark in relation to the risk that manager is assuming, with risk defined as deviation from the benchmark. This measure is calculated by dividing the portfolio s excess return (portfolio return less the benchmark return) by the tracking error (derived by taking the standard deviation of the monthly differences between the portfolio return and the benchmark return over time). This piece is intended for institutional investment management consultants or investors interested in institutional products and services available through Franklin Templeton Institutional and its affiliates. Various account minimums or other eligibility qualifications apply depending on the investment strategy or vehicle. Franklin Templeton Institutional One Franklin Parkway San Mateo, CA Tel: (800) ftinstitutional.com 2018 Franklin Templeton Investments. All rights reserved.