- I(acc) USD Franklin Templeton Investment Funds - I(acc) USD Data as of 30 September 2013 Source for data and information provided by Franklin Templeton Investments, as of the date of this presentation, unless otherwise noted. Benchmark related data provided by FactSet, as of the date of this presentation, unless otherwise noted.
- I(acc) USD Table of Contents Executive Summary----------------------------------------------------------------------------------------------------3 Historical Performance------------------------------------------------------------------------------------------------4 Portfolio Characteristics----------------------------------------------------------------------------------------------5 Top Ten Holdings-------------------------------------------------------------------------------------------------------6 Geographic Allocation-------------------------------------------------------------------------------------------------7 Sector Allocation--------------------------------------------------------------------------------------------------------8 Currency Allocation----------------------------------------------------------------------------------------------------9 Quality Allocation-----------------------------------------------------------------------------------------------------10 Coupon and Maturity Allocations---------------------------------------------------------------------------------11 Duration Breakdown-------------------------------------------------------------------------------------------------12 Duration Contribution by Country--------------------------------------------------------------------------------13 Duration Contribution by Sector----------------------------------------------------------------------------------14 Duration Contribution by Currency-------------------------------------------------------------------------------15 Important Disclosures-----------------------------------------------------------------------------------------------16 2
- I(acc) USD Executive Summary - I(acc) USD Portfolio Manager(s) Investment Manager Franklin Templeton Investments Middle East (ME) Limited Fund Inception Date 30 August 2013 Share Class Inception Date 30 August 2013 Primary Benchmark Base Currency for Fund Base Currency for Share Class Citigroup MENA Broad Bond GCC Issuers Index USD USD Total Net Assets (USD) 8,199,358.47 Asset Allocation Fixed Income: 86.61% Cash & Cash Equivalents: 13.39% Number of Holdings 26 Total Expense Ratio 0.79% Average Duration Average Weighted Maturity 5.54 Yrs 8.18 Yrs Current Yield 4.91% Mohieddine (Dino) Kronfol Sharif Eid ISIN Code SEDOL Code Bloomberg Code Fund Identifiers Sum m ary of Investm ent Objective U. Arab Emir. U. Arab Emir. LU0962741145 To maximise, consistent with prudent investment management, total investment return consisting of a combination of interest income, capital appreciation and currency gains in the long term. BD5NT74 FGCIAUSLX Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Percentage may not equal 100% due to rounding. Past performance does not guarantee future results. 3
- I(acc) USD Historical Performance - I(acc) USD Cumulative Performance (%) Inception Date 1 Mth Since Incept - I(acc) USD Net of Fees 30.8.2013 2.50 2.50 Citigroup MENA Broad Bond GCC Issuers Index 30.8.2013 1.64 1.64 Citigroup MENA Broad Bond Index 30.8.2013 1.58 N/A - A(Mdis) USD Net of Fees 30.8.2013 2.40 2.40 All performance data shown is in the Fund currency stated and net of management fees. Sales charges and other commissions, taxes and other relevant costs paid by the investor are not included in the calculations. The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance does not guarantee future results. Current performance may differ from figures shown. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, performance may also be affected by currency fluctuations. Please visit franklintempleton.lu for current performance. 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. 4
- I(acc) USD Portfolio Characteristics Portfolio Index Average Credit Quality A- A+ Average Duration 5.54 Yrs 5.07 Yrs Average Weighted Maturity 8.18 Yrs 6.76 Yrs Yield to Maturity 4.64% 3.38% Yield to Worst 4.53% 3.38% Current Yield 4.91% 4.63% Quality Allocation 20% 17.94 15.75 15.71 10.93 10% 10.41 8.72 10.37 2.66 2.92 4.59 0% AA AA- A+ A A- BBB+ BBB BBB- B+ NR Past performance does not guarantee future results. Where a fund invests in emerging markets, this investment can be more risky than an investment in developed markets. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Source: Franklin Templeton Investments. 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. Derivative positions and unrated securities are not reflected in the ACQ. Yield figures quoted should not be used as an indication of the income that has or will be received. Yield figures are based on the portfolio's underlying holdings and does not represent a payout of the portfolio. Ratings shown are assigned by one or more Nationally Recognized Statistical Rating Organizations ('NRSRO'), such as Standard & Poor's, Moody's and Fitch. The ratings are an indication of an issuer's creditworthiness and typically range from AAA or Aaa (highest) to D (lowest). When ratings from all three agencies are available, the middle rating is used; when two are available, the lowest rating is used; and when only one is available, that rating is used. Foreign government bonds without a specific rating are assigned the country rating provided by an NRSRO, if available. If listed, the NR category consists of rateable securities that have not been rated by an NRSRO; the N/A category consists of nonrateable securities (e.g., equities). Cash and equivalents (defined as bonds with stated maturities, or that can be redeemed at intervals, of seven days or less) as well as derivatives are excluded from this breakdown. As a result, the chart does not reflect the fund's total net assets. Weightings as percent of total. Percentage may not equal 100% due to rounding. 5
- I(acc) USD Top Ten Holdings Security Nam e Country Industry % of Total 1. Sabic Capital II BV, senior note, Reg S, 2.625%, 10/03/18 Saudi Arabia Pharmaceuticals, Biotechnology & Life Sciences 9.68 2. Government of Qatar, senior note, Reg S, 5.75%, 1/20/42 Qatar Government Securities 6.69 3. Dana Gas Sukuk Ltd., cvt., senior note, Reg S, 7.00%, 10/31/17 U. Arab Emir. Diversified Financials 6.03 4. Kuwait Projects Co., senior note, 9.375%, 7/15/20 Kuwait Diversified Financials 4.40 5. Dar Al-Arkan International Sukuk Co. II, senior note, Reg S, 10.75%, 2/18/15 Saudi Arabia Diversified Financials 3.98 6. DP World Ltd., Reg S, 6.85%, 7/02/37 U. Arab Emir. Transportation 3.77 7. Bank Muscat SAOG, senior note, Reg S, 2.50%, 3/26/18 Oman Banks 3.60 8. KT Sukuk Varlk Kiralama AS, Reg S, 5.875%, 10/31/16 Turkey Banks 3.27 9. Ruwais Power Co. PJSC, Reg S, 6.00%, 8/31/36 U. Arab Emir. Utilities 3.17 10. Nakilat Inc., second lien, Reg S, 6.267%, 12/31/33 Qatar Energy 3.13 Total 47.72 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. 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. 6
- I(acc) USD Geographic Allocation Mid-East Europe NonEMU Portfolio % Index % Over/Under Mid-East 83.35 100.00-16.65 U. Arab Emir. 38.51 45.52-7.01 Saudi Arabia 15.96 6.73 9.23 Qatar 12.60 38.42-25.82 Bahrain 5.65 6.76-1.10 Kuwait 4.40 2.15 2.24 Oman 3.60 0.43 3.17 Iraq 2.64 0.00 2.64 Europe NonEMU 3.27 0.00 3.27 Turkey 3.27 0.00 3.27 Cash 13.39 0.00 13.39 Cash 13.39 0.00 13.39 Cash 0% 25% 50% 75% 100% Citigroup MENA Broad Bond GCC Issuers Index Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 7
- I(acc) USD Sector Allocation Sovereign Bonds: Investment Grade Sovereign Bonds: Non-Investment Grade Corporate Bonds: Investment Grade Portfolio % Index % Over/Under Sovereign Bonds 50.29 36.34 13.95 Investment Grade 43.88 36.34 7.55 Non-Investment Grade 6.41 0.00 6.41 Corporate Bonds 30.29 61.66-31.37 Investment Grade 23.62 58.59-34.96 Non-Investment Grade 6.67 3.08 3.59 Intl Govt/Agency Bonds 0.00 2.00-2.00 Investment Grade 0.00 2.00-2.00 Others 6.03 0.00 6.03 Cash & Cash Equivalents 13.39 0.00 13.39 Corporate Bonds: Non-Investment Grade Intl Govt/Agency Bonds: Investment Grade Others Cash & Cash Equivalents 0% 15% 30% 45% 60% Citigroup MENA Broad Bond GCC Issuers Index Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 8
- I(acc) USD Currency Allocation Portfolio % Index % Over/Under NORTH AMERICA 97.31 100.00-2.69 US Dollar 97.31 100.00-2.69 MID-EAST 2.69 0.00 2.69 United Arab Emirates Dirham 2.69 0.00 2.69 US Dollar United Arab Emirates Dirham 0% 20% 40% 60% 80% 100% Citigroup MENA Broad Bond GCC Issuers Index Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. 9
- I(acc) USD Quality Allocation BB- B+ B NR AA AA- A+ A A- BBB+ BBB BBB- BB+ BB Portfolio % Index % Over/Under AA 10.93 33.12-22.19 AA- 2.66 4.84-2.19 A+ 17.94 9.76 8.18 A 2.92 16.31-13.39 A- 10.41 12.04-1.63 BBB+ 8.72 4.83 3.90 BBB 10.37 8.39 1.98 BBB- 15.75 7.62 8.13 BB+ 0.00 0.97-0.97 BB 0.00 0.23-0.23 BB- 0.00 0.63-0.63 B+ 4.59 0.80 3.79 B 0.00 0.45-0.45 NR 15.71 0.00 15.71 0% 10% 20% 30% 40% Citigroup MENA Broad Bond GCC Issuers Index Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Ratings shown are assigned by one or more Nationally Recognized Statistical Rating Organizations ('NRSRO'), such as Standard & Poor's, Moody's and Fitch. The ratings are an indication of an issuer's creditworthiness and typically range from AAA or Aaa (highest) to D (lowest). When ratings from all three agencies are available, the middle rating is used; when two are available, the lowest rating is used; and when only one is available, that rating is used. Foreign government bonds without a specific rating are assigned the country rating provided by an NRSRO, if available. If listed, the NR category consists of rateable securities that have not been rated by an NRSRO; the N/A category consists of nonrateable securities (e.g., equities). Cash and equivalents (defined as bonds with stated maturities, or that can be redeemed at intervals, of seven days or less) as well as derivatives are excluded from this breakdown. As a result, the chart does not reflect the fund's total net assets. 10
- I(acc) USD Coupon and Maturity Allocations Portfolio Composition: Coupon Allocation 20% 16.10 17.96 14.05 14.69 10% 0% 8.67 7.43 4.95 3.72 3.72 3.72 2.48 2.53 2.5-3% 3-3.5% 4.5-5% 5-5.5% 5.5-6% 6-6.5% 6.5-7% 7-7.5% 9-9.5% 10-10.5% 10.5-11% Cash Portfolio Composition: Maturity Allocation 30% 29.40 20% 10% 0% 13.39 15.27 15.94 11.03 3.98 5.23 5.77 0 to 1 Year 1 to 2 Years 2 to 3 Years 3 to 5 Years 5 to 7 Years 7 to 10 Years 10 to 15 Years 20 to 30 Years Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Weightings as percent of total. Percentage may not equal 100% due to rounding. 11
- I(acc) USD Duration Breakdown 3 to 5 Years 5 to 7 Years 10 to 15 Years Portfolio % Index % Over/Under 3 to 5 Years 29.39 31.22-1.83 5 to 7 Years 20.81 19.37 1.43 10 to 15 Years 15.94 9.11 6.83 0 to 1 Year 13.39 3.77 9.61 7 to 10 Years 8.01 12.77-4.76 1 to 2 Years 6.51 10.83-4.32 2 to 3 Years 5.96 12.54-6.58 15 to 20 Years 0.00 0.39-0.39 0 to 1 Year 7 to 10 Years 1 to 2 Years 2 to 3 Years 15 to 20 Years 0% 8% 16% 24% 32% Citigroup MENA Broad Bond GCC Issuers Index Weightings as a percent of Market Value. Percentage may not equal 100% due to rounding. 12
- I(acc) USD Duration Contribution by Country Mid-East Portfolio (Yrs) Index (Yrs) Over/Under Mid-East 5.45 5.07 0.38 U. Arab Emir. 2.35 2.10 0.25 Qatar 1.41 2.15-0.74 Saudi Arabia 0.85 0.36 0.49 Bahrain 0.27 0.35-0.09 Kuwait 0.23 0.09 0.15 Iraq 0.19 0.00 0.19 Oman 0.15 0.02 0.14 Europe NonEMU 0.09 0.00 0.09 Turkey 0.09 0.00 0.09 Europe NonEMU 0 2 4 6 Yrs Citigroup MENA Broad Bond GCC Issuers Index All portfolio holdings are subject to change. 13
- I(acc) USD Duration Contribution by Sector Sovereign Bonds: Investment Grade Corporate Bonds: Investment Grade Portfolio (Yrs) Index (Yrs) Over/Under Sovereign Bonds: Investment Grade 3.59 2.08 1.51 Corporate Bonds: Investment Grade 0.98 2.79-1.82 Sovereign Bonds: Non-Investment Grade 0.64 0.00 0.64 Others: Others 0.21 0.00 0.21 Corporate Bonds: Non-Investment Grade 0.12 0.11 0.01 Intl Govt/Agency Bonds: Investment Grade 0.00 0.08-0.08 Sovereign Bonds: Non-Investment Grade Others: Others Corporate Bonds: Non-Investment Grade Intl Govt/Agency Bonds: Investment Grade 0 2 4 Yrs Citigroup MENA Broad Bond GCC Issuers Index All portfolio holdings are subject to change. 14
- I(acc) USD Duration Contribution by Currency Portfolio (Yrs) Index (Yrs) Over/Under US Dollar 5.48 5.07 0.41 United Arab Emirates Dirham 0.07 0.00 0.07 US Dollar United Arab Emirates Dirham 0 2 4 6 Yrs Citigroup MENA Broad Bond GCC Issuers Index All portfolio holdings are subject to change. 15
- I(acc) USD 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 nationals or 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: www.franklintempletongem.com or can be obtained, free of charge, from the address below. Issued by the branch of Franklin Templeton Investment Management Limited in Dubai ( FTIML ), authorized and regulated in the UK by the Financial Conduct Authority and regulated in Dubai by the Dubai Financial Services Authority. Dubai office: Franklin Templeton Investments, The Gate, East Wing, Level 2, Dubai International Financial Centre, P.O. Box 506613, Dubai, U.A.E., Tel.: +9714-4284100 Fax:+9714-4284140. 2013 Franklin Templeton Investments. All rights reserved. Indexes are unmanaged and one cannot invest directly in an index. CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. 16