STRAIGHT TALK ON TEMPLETON GLOBAL BOND FUND FIXED INCOME

STRAIGHT TALK ON TEMPLETON GLOBAL BOND FUND FIXED INCOME

MICHAEL HASENSTAB, Ph.D. Chief Investment Officer, Templeton Global Macro continue to position Templeton Global Bond Fund for rising rates by maintaining low We portfolio duration and aiming at a negative correlation to US Treasuries. We view one of the biggest risks over the next five years to be rising US interest rates. Templeton Global Macro integrates global macroeconomic analysis with in-depth country research to help identify long-term imbalances that translate into investment opportunities. Not FDIC Insured May Lose Value No Bank Guarantee

LONG-TERM OPPORTUNITIES REMAIN AMID GLOBAL UNCERTAINTY We remain focused on three main areas of investment potential: 1) the profound value in specific emerging markets (EM), 2) short US Treasuries in a rising-rate environment, and 3) active currency management with the ability to take both long and short positions. These three broad sources of investment return really excite us about the opportunity set for the next couple of years. First, we have been investing in select EMs that appear to have strong underlying fundamentals. By recognizing the major changes that EMs have experienced over the past decade, we have laid out a framework to assess the investment risks and opportunities in individual markets. We focus on the quality of macroeconomic policies, the willingness to take on structural reforms, and the extent to which individual countries have learned the lessons of past crises, among other factors. Second, we continue to position Templeton Global Bond Fund for rising rates by maintaining low portfolio duration and aiming at a negative correlation to US Treasuries. We have already seen US Treasury yields start to rise in 2018 on the back of US economic resilience, exceptionally strong US labor markets, and growing inflationary expectations. Third, we believe it s important to have a highly flexible strategy that can directionally position across the currency markets. One of the most attractive aspects of the currency markets is there is generally always something undervalued; things are usually never in perfect alignment. Straight Talk on Templeton Global Bond Fund is designed to help strengthen your understanding of the fund and its strategy. On the following pages we ll review: Regional outlooks 2 Investment approach 3 Fund positioning 4 Results 7 Our approach emphasizes having a long-term view. We recognize that when investing globally, many opportunities take time to materialize, and we are willing to ride through volatility. This material reflects the analysis and opinions of Templeton Global Macro as of July 2018, and may differ from the opinions of other portfolio managers, investment teams or platforms at Franklin Templeton Investments. The information provided is not a complete analysis of every material fact regarding any country, region, market, investment, or strategy. Because market and economic conditions are subject to change, comments, opinions, and analyses are rendered as of the date noted above and may change without notice. Holdings are subject to change. A portfolio manager s assessment of a particular security, investment, or strategy is not intended as individual investment advice or recommendation or solicitation to buy, sell or hold any security or to adopt an investment strategy; it is intended only to provide insight into the fund s portfolio selection process. franklintempleton.com Straight Talk on Templeton Global Bond Fund 1

REGIONAL OUTLOOKS July 2018 Below are key regional themes that have been identified through the investment team s analysis of global macro dynamics as well as countryspecific research. EUROPE US We expect the euro to depreciate against the dollar. The euro has weakened against the dollar in recent months as growth in Europe has moderated while inflation has remained subdued. We see more potential for a positive surprise in real growth to occur in the US than in Europe as the US enacts regulatory changes and tax reform. Parts of the eurozone, such as Germany, are doing much better than others on fiscal balancing and growth but other countries like Italy still remain structurally vulnerable to an eventual increase in interest rates. The European Central Bank (ECB) s bond buying program is scheduled to end at the close of 2018. However, the ECB has indicated that rates are likely to remain unchanged until at least the summer of 2019. We expect US Treasury yields to rise. We expect growing inflation pressures due to resilient US growth and the exceptional strength of the US labor market, which would be supportive of higher rates. The US has seen some meaningful policy adjustments in the form of tax reform and deregulation that we expect to accelerate economic growth and add to existing inflationary pressures. As rates trend higher in the US, we expect the US dollar to strengthen against a number of vulnerable currencies, most notably the euro and Japanese yen. EMERGING MARKETS: FUNDAMENTALLY UNDERVALUED EMERGING MARKETS: TURNAROUND STORIES We continue to see a subset of EMs that we think have excellent value and better underlying fundamentals than markets have indicated. Across EMs, we continue to see significant variations between vulnerable economies and a number of much stronger ones. Several EMs have significantly improved their resiliencies over the last decade by increasing their external reserve cushions, bringing their current accounts into surplus or close to balance, improving their fiscal accounts, and reducing US-dollar liabilities. We have positive outlooks for several local-currency exposures in specific EMs that we view as undervalued, notably Mexico, India and Indonesia among others. 1 We see value in specific economies that are in transition from prior crises and now appear on a path to recovery over the medium term, such as Brazil or Argentina. 1 Brazil and Argentina have moved away from failed populist experiments and returned to more orthodox policies. Both countries are undergoing significant structural shifts, including taking pro-market and fiscally conservative approaches while maintaining credible monetary policy, proactive business environments, and outward-looking trade. We expect the performance of these countries to be driven primarily by domestic policies as opposed to global market sentiment. 1. Templeton Global Bond Fund had the following geographic allocations as of June 30, 2018: Mexico: 11.63%; India: 8.27%; Indonesia: 10.07%; Brazil: 11.12%; Argentina: 4.29%. 2 Straight Talk on Templeton Global Bond Fund franklintempleton.com

AN UNCONSTRAINED APPROACH Templeton Global Bond Fund seeks current income with capital appreciation and growth of income by investing at least 80% of its net assets in bonds of governments, government-related entities and government agencies located around the world. The fund regularly enters into various currency-related and other transactions involving derivative instruments. The fund is run independently of its benchmark, allowing managers to hold only the positions they believe have the best potential to maximize risk-adjusted returns. The team works to identify economic imbalances that may lead to value opportunities (or alpha) in three distinct areas: CURVE (DURATION) CURRENCY CREDIT Potential alpha sources can vary from country to country with the economic cycle STRONG GROWTH ENVIRONMENT Interest rates Currencies Credit quality WEAK GROWTH ENVIRONMENT Interest rates Currencies Credit quality HYPOTHETICAL Exposure Reduce Duration Unhedged Currency Extend Sovereign credit HYPOTHETICAL Exposure Extend Duration Hedged Currency Reduce Sovereign credit This is a hypothetical example intended solely to illustrate a framework for our idea generation. It is for illustrative purposes only and is not intended to reflect any actual positioning of the portfolio and does not constitute investment advice. franklintempleton.com Straight Talk on Templeton Global Bond Fund 3

FUND POSITIONING We continue to prefer select local-currency markets in Asia and Latin America that we believe have attractive medium to longer-term valuations. Currently, we favor currencies in countries where growth remains healthy, yet the local currency remains fundamentally undervalued. Additionally, we have net-negative positions in the euro and Japanese yen, as we anticipate continued monetary accommodation and low rates in the eurozone and Japan with rising rates in the US. We believe those increasing rate differentials should depreciate the euro and yen. TEMPLETON GLOBAL BOND FUND Region Sub-region Country Cash and cash equivalents Geographic allocation 2 % (As of June 30, 2018) Currency allocation 2 % (As of June 30, 2018) Americas 43.27 Americas 160.34 Non-US Americas 31.87 US Dollar 119.33 Mexico 11.63 Non-US Dollar 41.01 Brazil 11.12 Mexican Peso 19.67 Colombia 4.65 Brazilian Real 12.22 Argentina 4.29 Colombian Peso 4.65 Peru 0.18 Argentine Peso 4.29 USA 11.40 Peruvian Nuevo Sol 0.18 United States 11.40 Middle East/Africa 1.78 Asia 24.62 Ghanian Cedi 1.78 Asia, Non-Japan 24.62 Asia -20.55 Indonesia 10.07 Asia, Ex-Japan 17.92 India 8.27 Indian Rupee 12.50 South Korea 4.56 Indonesian Rupiah 10.33 Philippines 1.72 Philippine Peso 1.72 Middle-East/Africa 1.78 Australian Dollar -6.64 Ghana 1.78 Japanese Yen -38.47 Europe 1.13 Europe -41.57 Non-EMU Europe 1.13 Euro -41.57 Ukraine 1.13 Supranational 3 Other Cash and cash equivalents 0.35 1.20 27.65 2. As of 6/30/18. Portfolio holdings are subject to change. 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 any derivatives, unsettled trades or other factors. For the fund s most recent portfolio information, please call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com. 3. A supranational is an entity formed by two or more central governments through international treaties to promote economic development for the member countries. 4 Straight Talk on Templeton Global Bond Fund franklintempleton.com

YIELD CURVE POSITIONING The core of our strategy remains positioning ourselves to navigate a rising-rate environment. We have continued to maintain low portfolio duration while aiming at a negative correlation with US Treasury returns. We also actively seek duration opportunities that may offer positive real yields without undue interest-rate risk, such as yield curve exposures in countries with compelling levels of yield, healthy underlying fundamentals and prudent monetary policies. THE FUND S AVERAGE DURATION WAS SIGNIFICANTLY LOWER THAN THE BENCHMARK, WHILE THE YIELD TO MATURITY WAS SIGNIFICANTLY HIGHER Templeton Global Bond Fund average duration and yield to maturity vs. FTSE World Government Bond Index As of June 30, 2018 Average duration Yield to maturity Templeton Global Bond Fund 4-1.14 years 5 8.56% 6 FTSE World Government Bond Index 7 7.87 years 1.49% Taking an unconstrained approach to global fixed income investing provides us with the ability to position defensively with regard to interest-rate risk while capitalizing on opportunities around the globe. SONAL DESAI, Ph.D., Portfolio Manager 4. As of 6/30/18. Portfolio holdings are subject to change. For the fund s most recent portfolio information, please call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com. 5. Duration shown is the option-adjusted duration. Duration is an indication of a fund s sensitivity to changes in interest rates. The option-adjusted duration formula takes into account embedded call options and redemption features that impact a bond s expected cash flow, and thus its interest rate sensitivity. Figure reflects certain derivatives held in the portfolio (or their underlying reference assets). 6. Not representative of the amount of income shareholders can expect to receive from the fund. Yield to maturity (YTM) is the rate of return anticipated on a bond if it is held until the maturity date. The calculation of YTM takes into account the current market price, par value, coupon interest rate and time to maturity. For a fund, this represents the weighted average yield to maturity of the portfolio s holdings. 7. Source: Morningstar. See www.franklintempletondatasources.com for additional data provider information. Indexes are unmanaged and one cannot invest directly in an index. Index figures do not reflect any fees, expenses or sales charges. The FTSE World Government Bond Index (WGBI) is a market capitalization-weighted index consisting of investment-grade world government bonds. franklintempleton.com Straight Talk on Templeton Global Bond Fund 5

CURRENCY OPPORTUNITIES Recently, we have been particularly excited about the opportunity set in currencies and the flexibility the currency market allows to potentially profit from gains in a currency (going long) as well as declines in a currency (going short). For example, the fund is positioned to potentially benefit from currency divergence in monetary policy between the European Central Bank (ECB) and Bank of Japan (BOJ) versus the US Federal Reserve (Fed) by being long the US dollar against a short euro, and long the US dollar against a short Japanese yen. At the same time, the fund could be short the US dollar against the Indonesian rupiah, to position for potential appreciation of the rupiah as we believe it is undervalued. Examples of recent opportunities in currencies Analysis Action EUROPE Continued monetary accommodation by the ECB and increasing political risk should lead to depreciation of the euro Short euro against Long US dollar JAPAN Continued monetary accommodation by the BOJ should lead to depreciation of the yen Short yen against Long US dollar INDONESIA Country has strong growth, prudent fiscal policy, and healthy levels of foreign exchange reserves, currency appears undervalued Long Indonesian rupiah against US dollar The information provided is not a complete analysis of every material fact regarding any country, region, market, investment or strategy. Holdings are subject to change. A portfolio manager s assessment of a particular security, investment or strategy is not intended as individual investment advice or recommendation or solicitation to buy, sell or hold any security or to adopt an investment strategy; it is intended only to provide insight into the fund s portfolio selection process. 6 Straight Talk on Templeton Global Bond Fund franklintempleton.com

RESULTS A RECORD OF STRONG PERFORMANCE The fund (Advisor Class) has outperformed its benchmark 88% of the time, over longer time periods Having the flexibility to invest globally in any country or currency allows the Templeton Global Bond Fund investment team to take advantage of opportunities in interest rates, currencies and sovereign credits worldwide, and the results speak for themselves. Over the past 10 years, Templeton Global Bond Fund Advisor Class outperformed its benchmark, the FTSE World Government Bond Index, 105 out of 120 monthly rolling three-year periods, as illustrated in the chart below. 8 TEMPLETON GLOBAL BOND FUND ADVISOR CLASS RETURNS VS. FTSE WORLD GOVERNMENT BOND INDEX 9 Monthly rolling three-year returns 10 10-year period ended June 30, 2018 Templeton Global Bond Fund Advisor Class 20% OUTPERFORMED 15% 10% Templeton Global Bond Fund Advisor Class outperformed the FTSE World Government Bond Index 105 out of 120 monthly rolling three-year periods. 5% 0% -5% UNDERPERFORMED -5% 0% 5% 10% 15% 20% FTSE World Government Bond Index Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. The fund s investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com for the most recent month-end performance. Advisor Class shares do not have sales charges or Rule 12b-1 fees and are offered only to certain eligible investors as stated in the prospectus. 8. The fund offers other share classes subject to different fees and expenses, which will affect their performance. 9. Source: 2018 Morningstar, Inc. See www.franklintempletondatasources.com for additional data provider information. Indexes are unmanaged and one cannot invest directly in them. Index returns do not reflect any fees, expenses or sales charges. The FTSE World Government Bond Index (WGBI) is a market capitalization-weighted index consisting of investment-grade world government bonds. 10. Annualized rolling periods are plotted on a monthly basis. 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 fund outperformance relative to the index for that period. Any point below the line represents fund underperformance relative to the index for that period. franklintempleton.com Straight Talk on Templeton Global Bond Fund 7

HHHH MORNINGSTAR RATING TM As of June 30, 2018, the fund s Advisor Class shares received a 4-star overall Morningstar Rating measuring risk-adjusted returns against 258, 240, and 132 US-domiciled World Bond funds for the 3-, 5-, and 10-year periods, respectively. The fund s Advisor Class shares received Morningstar Ratings of 2, 3, and 5 stars for the 3-, 5-, and 10-year periods respectively. A fund s overall rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) rating metrics. 11 TEMPLETON GLOBAL BOND FUND 12,13 Average annual total returns As of June 30, 2018 1-year 5-year 10-year Since inception (9/18/1986) Advisor Class 14 (TGBAX) -1.88% 1.85% 5.67% 7.38% Class A (TPINX) with maximum 4.25% sales charge 15-6.26% 0.74% 4.95% 7.03% Class A (TPINX) without sales charge 15-2.12% 1.61% 5.41% 7.18% FTSE World Government Bond Index 16 1.90% 1.11% 2.07% 5.87% As of June 30, 2018 Total annual operating expenses 12,13 30-day standardized yield 17 Distribution rate 18 With waiver Without waiver With waiver Without waiver Advisor Class 5.30% Advisor Class 0.71% 0.78% Advisor Class 4.67% 4.59% Class A 4.82% Class A 0.96% 1.03% Class A 4.22% 4.15% Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. The fund s investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com for the fund s most recent month-end performance. Advisor Class shares do not have sales charges or Rule 12b-1 fees and are offered only to certain eligible investors as stated in the prospectus. For more information on Templeton Global Bond Fund, please contact your financial advisor. 11. Source: Morningstar 6/30/18. For each mutual fund and exchange traded fund with at least a 3-year history, Morningstar calculates a Morningstar Rating based on how a fund ranks on a Morningstar Risk-Adjusted Return measure against other funds in the same category. This measure takes into account variations in a fund s monthly performance, and does not take into account the effects of sales charges and loads, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The weights are: 100% 3-year rating for 36 59 months of total returns, 60% 5-year rating/40% 3-year rating for 60 119 months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods. Morningstar Rating is for the named share class only; other classes may have different performance characteristics. Past performance is not an indicator or a guarantee of future performance. 2018 Morningstar, Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and 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. The Morningstar Rating for Advisor Class shares is based on Morningstar s extended performance calculation. This means that for a share class that doesn t have a 1-, 3-, 5- or 10-year performance history, the rating shown is a hypothetical Morningstar Rating based first on the oldest active surviving share class of the fund and then any dormant or liquidated share classes. If more than one share class has the earliest inception date, Morningstar selects the share class that is freely available to investors, that is not currency-hedged, and has the lowest fee. 12. The fund offers other share classes, subject to different fees and expenses that will affect their performance. 13. The fund has a fee waiver associated with any investment it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 4/30/19. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower. 14. Performance quotations for this class reflect the following methods of calculation: a) for periods prior to the fund s Advisor Class inception date of 1/2/97, a restated figure is used based on the fund s oldest share class, Class A performance, excluding the effect of Class A s maximum initial sales charge but reflecting the effect of the Class A Rule 12b-1 fees; and b) for periods after the fund s Advisor Class inception date, actual Advisor Class performance is used, reflecting all charges and fees applicable to that class. 15. Class A: on 1/1/93, the fund implemented a Rule 12b-1 plan, which affects subsequent performance. 16. Source: 2018 Morningstar, Inc. All rights reserved. Indexes are unmanaged and one cannot invest directly in them. Index returns do not reflect any fees, expenses or sales charges. Important data provider notices and terms available at www.franklintempletondatasources.com. The FTSE World Government Bond Index (WGBI) is a market capitalization-weighted index consisting of investment-grade world government bonds. 17. The fund s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the fund s actual income distribution rate, which reflects the fund s past dividends paid to shareholders. 18. Based on the annualization of the fund s June 2018 dividend and maximum offering price per share on 6/30/18. 8 Straight Talk on Templeton Global Bond Fund franklintempleton.com

WHAT ARE THE RISKS? All investments involve risks, including possible loss of principal. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the fund to participate in losses on an amount that exceeds the fund s initial investment. The fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security s value and on the fund s ability to sell such securities when necessary to meet the fund s liquidity needs or in response to a specific market event. Foreign securities involve special risks, including currency fluctuations (which may be significant over the short term) and economic and political uncertainties; investments in emerging markets involve heightened risks related to the same factors. 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 government entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations when due. Investments in lower-rated bonds include higher risk of default and loss of principal. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in the fund adjust to a rise in interest rates, the fund s share price may decline. Changes in the financial strength of a bond issuer or in a bond s credit rating may affect its value. These and other risks are discussed in the fund s prospectus.

This brochure must be preceded or accompanied by a Templeton Global Bond Fund summary prospectus and/or prospectus. Please read a prospectus carefully before you invest or send money. Investors should carefully consider a fund s investment goals, risks, charges and expenses before investing. The fund s performance will be updated each quarter with standardized figures and ranking information, if quoted. Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, CA 94403-1906 (800) DIAL BEN / 342-5236 franklintempleton.com Templeton Global Bond Fund Symbols: Class A: TPINX Class C: TEGBX Class R: FGBRX Class R6: FBNRX Advisor: TGBAX 2018 Franklin Templeton Investments. All rights reserved. UPD 11/18 406 XFLST 07/18