Franklin Templeton Investment Funds

Transcription

1 Unaudited Semi-Annual Report December 31, 2014 Franklin Templeton Investment Funds SOCIÉTÉ D INVESTISSEMENT À CAPITAL VARIABLE R.C.S. B35177

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3 société d investissement à capital variable UNAUDITED SEMI-ANNUAL REPORT FOR THE PERIOD ENDED DECEMBER 31, 2014 This report shall not constitute an offer or a solicitation of an offer to buy shares of Franklin Templeton Investment Funds (the Company ). Subscriptions are to be made on the basis of the current prospectus and its addendum as the case may be, where available the relevant Key Investor Information Documents ( KIIDs ), a copy of the latest available audited annual report and, if published thereafter, the latest unaudited semi-annual report.

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5 Contents General Information 4 The Board of Directors 7 Report of the Investment Managers 10 Fund Performance 12 Statement of Net Assets 14 Statement of Operations and Changes in Net Assets 30 Statistical Information 46 Notes to the Financial Statements 63 Franklin Asia Credit Fund 153 Franklin Biotechnology Discovery Fund 155 Franklin Brazil Opportunities Fund 158 Franklin Euro Government Bond Fund 159 Franklin Euro High Yield Fund 160 Franklin Euro Liquid Reserve Fund 164 Franklin Euro Short Duration Bond Fund 165 Franklin Euro Short-Term Money Fund 166 Franklin Euroland Fund 167 Franklin European Fund 169 Franklin European Corporate Bond Fund 171 Franklin European Dividend Fund 173 Franklin European Growth Fund 175 Franklin European Income Fund 176 Franklin European Small-Mid Cap Growth Fund 178 Franklin European Total Return Fund 179 Franklin GCC Bond Fund 180 Franklin Global Aggregate Bond Fund 181 Franklin Global Aggregate Investment Grade Bond Fund 183 Franklin Global Allocation Fund 185 Franklin Global Convertible Securities Fund 192 Franklin Global Corporate High Yield Fund 194 Franklin Global Equity Strategies Fund 197 Franklin Global Fundamental Strategies Fund 202 Franklin Global Government Bond Fund 210 Franklin Global Growth Fund 211 Franklin Global Growth and Value Fund 213 Franklin Global High Income Bond Fund 217 Franklin Global Listed Infrastructure Fund 221 Franklin Global Real Estate Fund 223 Franklin Global Small-Mid Cap Growth Fund 225 Franklin Gold and Precious Metals Fund 227 Franklin High Yield Fund 229 Franklin Income Fund 234 Franklin India Fund 241 Franklin Japan Fund 243 Franklin K2 Alternative Strategies Fund 245 Franklin MENA Fund 253 Franklin Multi-Asset Income Fund 255 Franklin Natural Resources Fund 260 Franklin Real Return Fund 262 Franklin Strategic Income Fund 264 Franklin Technology Fund 275 Franklin U.S. Dollar Liquid Reserve Fund 277 Franklin U.S. Equity Fund 278 Franklin U.S. Focus Fund 280 Franklin U.S. Government Fund 281 Franklin U.S. Low Duration Fund 282 Franklin U.S. Opportunities Fund 293 Franklin U.S. Small-Mid Cap Growth Fund 295 Franklin U.S. Total Return Fund 298 Franklin World Perspectives Fund 305 Franklin Mutual Beacon Fund 312 Franklin Mutual Euroland Fund 316 Franklin Mutual European Fund 318 Franklin Mutual Global Discovery Fund 321 Templeton Africa Fund 325 Templeton ASEAN Fund 327 Templeton Asian Bond Fund 329 Templeton Asian Dividend Fund 331 Templeton Asian Growth Fund 333 Templeton Asian Smaller Companies Fund 335 Templeton BRIC Fund 338 Templeton China Fund 340 Templeton Constrained Bond Fund 342 Templeton Eastern Europe Fund 344 Templeton Emerging s Fund 346 Templeton Emerging s Balanced Fund 348 Templeton Emerging s Bond Fund 352 Templeton Emerging s Smaller Companies Fund 356 Templeton Euroland Fund 359 Templeton European Fund 361 Templeton Frontier s Fund 363 Templeton Global Fund 365 Templeton Global (Euro) Fund 368 Templeton Global Balanced Fund 371 Templeton Global Bond Fund 375 Templeton Global Bond (Euro) Fund 378 Templeton Global Equity Income Fund 380 Templeton Global High Yield Fund 383 Templeton Global Income Fund 389 Templeton Global Smaller Companies Fund 397 Templeton Global Total Return Fund 401 Templeton Growth (Euro) Fund 409 Templeton Korea Fund 412 Templeton Latin America Fund 413 Templeton Thailand Fund 415 Additional Information 417 Franklin Templeton Investments Office Directory Unaudited Semi-Annual Report 3

6 société d investissement à capital variable 8A, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of Luxembourg (Registered with the registre de commerce et des sociétés, Luxembourg, under number B ) General Information (as at December 31, 2014) BOARD OF DIRECTORS: Chairman The Honorable Nicholas F. Brady Chairman and Chief Executive Officer CHOPTANK PARTNERS, INC Cooke s Hope Road Easton, MD 21601, U.S.A. Directors Duke of Abercorn KG Director TITANIC QUARTER Barons Court Omagh BT78 4EZ, Northern Ireland, United Kingdom Vijay C. Advani Executive Vice President-Global Advisory Services FRANKLIN RESOURCES, INC. One Franklin Parkway San Mateo, CA , U.S.A. Richard H. Frank Chief Executive Officer DARBY OVERSEAS INVESTMENTS, LTD 1133 Connecticut Avenue, NW, Suite 400 Washington DC 20036, U.S.A. (resigned with effect from October 15, 2014) Mark G. Holowesko President HOLOWESKO PARTNERS LTD Shipston House P.O. Box N-7776, West Bay Street, Lyford Cay, Nassau, Bahamas James J. K. Hung President and Chief Executive Officer ASIA SECURITIES GLOBAL LTD Room 63, 21st floor, New World Tower 1 18 Queen s Road, Central Hong Kong Gregory E. Johnson President and Chief Executive Officer FRANKLIN RESOURCES, INC. One Franklin Parkway San Mateo, CA , U.S.A. Geoffrey A. Langlands Managing Partner LANGLANDS CONSULTORIA Ltda Avenida Lucio Costa 3600 Bloco 1, Apto Barra da Tijuca Rio de Janeiro RJ CEP Brazil Gregory E. McGowan Executive Vice President and General Counsel TEMPLETON WORLDWIDE, INC. 300 Southeast 2nd Street, 11th Floor Fort Lauderdale, FL , U.S.A. (resigned with effect from October 15, 2014) Dr. J. B. Mark Mobius Executive Chairman TEMPLETON EMERGING MARKETS GROUP 7 Temasek Boulevard, # Suntec Tower One Singapore David E. Smart Director and Co-Chief Executive Officer FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED The Adelphi Building, 1-11 John Adam Street London WC2N 6HT, England, United Kingdom (resigned with effect from October 15, 2014) The Honourable Trevor G. Trefgarne Chairman ENTREPRISE GROUP LIMITED 11 High Street Accra, Ghana William C. P. Lockwood Independent Director Poste restante, Avenue du Général de Gaulle F Cattenom, France (appointed with effect from December 1, 2014) MANAGEMENT COMPANY: FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.à r.l. 8A, rue Albert Borschette, L-1246 Luxembourg Grand Duchy of Luxembourg REGISTERED OFFICE: 8A, rue Albert Borschette, L-1246 Luxembourg Grand Duchy of Luxembourg PRINCIPAL DISTRIBUTOR: FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.à r.l. 8A, rue Albert Borschette, L-1246 Luxembourg Grand Duchy of Luxembourg INVESTMENT MANAGERS: FRANKLIN ADVISERS, INC. One Franklin Parkway San Mateo, CA , U.S.A. FRANKLIN ALTERNATIVE STRATEGIES ADVISERS, LLC One International Place, 25th Floor Boston, MA 02110, U.S.A. FRANKLIN MUTUAL ADVISERS, LLC 101 John F. Kennedy Parkway Short Hills, NJ , U.S.A. FRANKLIN TEMPLETON INSTITUTIONAL LLC 600 Fifth Avenue, New York, NY 10020, U.S.A. FRANKLIN TEMPLETON INVESTIMENTOS (Brasil) Ltda. Avenue Brigadeiro Faria Lima 3311, 5o andar, São Paulo , Brazil FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED The Adelphi Building, 1-11 John Adam Street London WC2N 6 HT, United Kingdom FRANKLIN TEMPLETON INVESTMENT TRUST MANAGEMENT CO. LIMITED 12 Youido-dong, Youngdungpo-gu, Seoul, Korea FRANKLIN TEMPLETON INVESTMENTS CORP. 200 King Street West, Suite 1500, Toronto, Ontario M5H 3T4, Canada K2/D&S MANAGEMENT CO., LLC 300 Atlantic Street, 12th Floor Stamford, CT 06901, U.S.A. CHILTON INVESTMENT COMPANY, LLC 1290 East Main Street Stamford, CT 06902, U.S.A. IMPALA ASSET MANAGEMENT LLC 107 Cherry Street New Canaan, CT 06840, U.S.A. INDEPENDENCE CAPITAL ASSET PARTNERS, LLC th Street, Suite 520 Denver, CO 80202, U.S.A. JENNISON ASSOCIATES LLC 466 Lexington Avenue New York, NY 10017, U.S.A. WELLINGTON MANAGEMENT COMPANY, LLP 280 Congress Street Boston, MA 02210, U.S.A. P. SCHOENFELD ASSET MANAGEMENT L.P Avenue of the Americas, 21st Floor New York, NY 10019, U.S.A. BASSO CAPITAL MANAGEMENT L.P East Main Street Stamford, CT 06902, U.S.A. CHATHAM ASSET MANAGEMENT LLC 26 Main Street, Suite 204 Chatham, NJ 07928, U.S.A. LAZARD ASSET MANAGEMENT LLC 30 Rockfeller Plaza New York, NY 10112, U.S.A. LOOMIS SAYLES & COMPANY, L.P. One Financial Center, 27th Floor Boston, MA 02111, U.S.A. GRAHAM CAPITAL MANAGEMENT L.P. 40 Highland Avenue Rowayton, CT 06853, U.S.A. FRANKLIN TEMPLETON INVESTMENTS (ME) LIMITED The Gate, East Wing, Level 2, Dubai International Financial Centre, P.O. Box , Dubai, United Arab Emirates SUMITOMO MITSUI ASSET MANAGEMENT COMPANY LIMITED Atago Minato-ku Tokyo , Japan TEMPLETON ASSET MANAGEMENT LTD. 7 Temasek Boulevard # Suntec Tower One Singapore TEMPLETON GLOBAL ADVISORS LIMITED P.O. Box N-7759 Lyford Cay, Nassau, Bahamas CUSTODIAN, LISTING AGENT AND PRINCIPAL PAYING AGENT: J.P. MORGAN BANK LUXEMBOURG S.A. European Bank and Business Centre 6 Route de Trèves, L-2633 Senningerberg Grand Duchy of Luxembourg AUDITOR: PRICEWATERHOUSECOOPERS, Société coopérative 2, rue Gerhard Mercator, L-2182 Luxembourg Grand Duchy of Luxembourg LEGAL ADVISERS: ELVINGER, HOSS & PRUSSEN 2, place Winston Churchill, L-1340 Luxembourg Grand Duchy of Luxembourg 4 Unaudited Semi-Annual Report

7 General Information (as at December 31, 2014) (continued) INVESTMENT MANAGERS PER FUND: Franklin Asia Credit Fund Co-Investment Managers FRANKLIN ADVISERS, INC. FRANKLIN TEMPLETON INSTITUTIONAL, LLC Franklin Biotechnology Discovery Fund FRANKLIN ADVISERS, INC. Franklin Brazil Opportunities Fund FRANKLIN TEMPLETON INVESTIMENTOS (Brazil) Ltda. Franklin Euro Government Bond Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Euro High Yield Fund Co-Investment Managers FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED FRANKLIN ADVISERS, INC. Franklin Euro Liquid Reserve Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Euro Short Duration Bond Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Euro Short-Term Money Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Euroland Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin European Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin European Corporate Bond Fund Co-Investment Managers FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED FRANKLIN ADVISERS, INC. FRANKLIN TEMPLETON INSTITUTIONAL, LLC Franklin European Dividend Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin European Growth Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin European Income Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin European Small-Mid Cap Growth Fund FRANKLIN TEMPLETON INSTITUTIONAL, LLC Franklin European Total Return Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin GCC Bond Fund FRANKLIN TEMPLETON INVESTMENTS (ME) LIMITED Franklin Global Aggregate Bond Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Global Aggregate Investment Grade Bond Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Global Allocation Fund Lead Investment Manager FRANKLIN ALTERNATIVE STRATEGIES ADVISERS, LLC Co-Investment Managers FRANKLIN ADVISERS, INC. FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED TEMPLETON ASSET MANAGEMENT LTD. FRANKLIN TEMPLETON INSTITUTIONAL, LLC TEMPLETON GLOBAL ADVISORS LIMITED FRANKLIN MUTUAL ADVISERS, LLC Franklin Global Convertible Securities Fund FRANKLIN ADVISERS, INC. Franklin Global Corporate High Yield Fund FRANKLIN ADVISERS, INC. Franklin Global Equity Strategies Fund Co-Investment Managers FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED TEMPLETON ASSET MANAGEMENT LTD. FRANKLIN ADVISERS, INC. TEMPLETON GLOBAL ADVISORS LIMITED FRANKLIN MUTUAL ADVISERS, LLC Franklin Global Fundamental Strategies Fund Co-Investment Managers FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED FRANKLIN ADVISERS, INC. TEMPLETON GLOBAL ADVISORS LIMITED FRANKLIN MUTUAL ADVISERS, LLC Franklin Global Government Bond Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Global Growth Fund FRANKLIN TEMPLETON INSTITUTIONAL, LLC Franklin Global Growth and Value Fund Lead Investment Manager FRANKLIN ADVISERS, INC. Co-Investment Managers FRANKLIN TEMPLETON INSTITUTIONAL, LLC TEMPLETON GLOBAL ADVISORS LIMITED Franklin Global High Income Bond Fund FRANKLIN ADVISERS, INC. Franklin Global Listed Infrastructure Fund FRANKLIN TEMPLETON INSTITUTIONAL, LLC Franklin Global Real Estate Fund FRANKLIN TEMPLETON INSTITUTIONAL, LLC Franklin Global Small-Mid Cap Growth Fund FRANKLIN TEMPLETON INSTITUTIONAL, LLC Franklin Gold and Precious Metals Fund FRANKLIN ADVISERS, INC. Franklin High Yield Fund FRANKLIN ADVISERS, INC. Franklin Income Fund FRANKLIN ADVISERS, INC. Franklin India Fund Co-Investment Managers TEMPLETON ASSET MANAGEMENT LTD. FRANKLIN ADVISERS, INC. Franklin Japan Fund Lead Investment Manager FRANKLIN ADVISERS, INC. Sub-Investment Manager SUMITOMO MITSUI ASSET MANAGEMENT COMPANY LIMITED Franklin K2 Alternative Strategies Fund Lead Investment Manager K2/D&S MANAGEMENT CO., LLC Co-Investment Managers CHILTON INVESTMENT COMPANY, LLC IMPALA ASSET MANAGEMENT LLC INDEPENDENCE CAPITAL ASSET PARTNERS, LLC JENNISON ASSOCIATES LLC WELLINGTON MANAGEMENT COMPANY, LLP P. SCHOENFELD ASSET MANAGEMENT L.P. BASSO CAPITAL MANAGEMENT L.P. CHATHAM ASSET MANAGEMENT LLC LAZARD ASSET MANAGEMENT LLC LOOMIS SAYLES & COMPANY, L.P. GRAHAM CAPITAL MANAGEMENT L.P. Franklin MENA Fund FRANKLIN ADVISERS, INC. Franklin Multi-Asset Income Fund Lead Investment Manager FRANKLIN ADVISERS, INC. Co-Investment Managers FRANKLIN TEMPLETON INSTITUTIONAL, LLC TEMPLETON ASSET MANAGEMENT LTD. FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Natural Resources Fund FRANKLIN ADVISERS, INC. Franklin Real Return Fund FRANKLIN ADVISERS, INC. Franklin Strategic Income Fund FRANKLIN ADVISERS, INC. Franklin Technology Fund FRANKLIN ADVISERS, INC. Franklin U.S. Dollar Liquid Reserve Fund FRANKLIN ADVISERS, INC. Franklin U.S. Equity Fund FRANKLIN ADVISERS, INC. Franklin U.S. Focus Fund FRANKLIN ADVISERS, INC. Franklin U.S. Government Fund FRANKLIN ADVISERS, INC. Franklin U.S. Low Duration Fund FRANKLIN ADVISERS, INC. Franklin U.S. Opportunities Fund FRANKLIN ADVISERS, INC. Franklin U.S. Small-Mid Cap Growth Fund FRANKLIN ADVISERS, INC. Franklin U.S. Total Return Fund FRANKLIN ADVISERS, INC. Franklin World Perspectives Fund Lead Investment Manager FRANKLIN ADVISERS, INC. Co-Investment Managers FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED FRANKLIN TEMPLETON INVESTMENTS CORP. FRANKLIN TEMPLETON INVESTIMENTOS (Brasil) Ltda. FRANKLIN TEMPLETON INVESTMENT TRUST MANAGEMENT CO. LIMITED TEMPLETON ASSET MANAGEMENT LTD. Franklin Mutual Beacon Fund FRANKLIN MUTUAL ADVISERS, LLC Franklin Mutual Euroland Fund FRANKLIN MUTUAL ADVISERS, LLC Franklin Mutual European Fund Co-Investment Managers FRANKLIN MUTUAL ADVISERS, LLC FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Franklin Mutual Global Discovery Fund FRANKLIN MUTUAL ADVISERS, LLC Templeton Africa Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton ASEAN Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Asian Bond Fund FRANKLIN ADVISERS, INC. Templeton Asian Dividend Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Asian Growth Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Asian Smaller Companies Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton BRIC Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton China Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Constrained Bond Fund FRANKLIN ADVISERS, INC. Templeton Eastern Europe Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Emerging s Fund TEMPLETON ASSET MANAGEMENT LTD. Unaudited Semi-Annual Report 5

8 General Information (as at December 31, 2014) (continued) INVESTMENT MANAGERS PER FUND (continued): Templeton Emerging s Balanced Fund Co-Investment Managers TEMPLETON ASSET MANAGEMENT LTD. FRANKLIN ADVISERS, INC. Templeton Emerging s Bond Fund FRANKLIN ADVISERS, INC. Templeton Emerging s Smaller Companies Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Euroland Fund TEMPLETON GLOBAL ADVISORS LIMITED Templeton European Fund TEMPLETON GLOBAL ADVISORS LIMITED Templeton Frontier s Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Global Fund TEMPLETON GLOBAL ADVISORS LIMITED Templeton Global (Euro) Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Templeton Global Balanced Fund Co-Investment Managers FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED FRANKLIN ADVISERS, INC. Templeton Global Bond Fund FRANKLIN ADVISERS, INC. Templeton Global Bond (Euro) Fund FRANKLIN ADVISERS, INC. Templeton Global Equity Income Fund FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Templeton Global High Yield Fund FRANKLIN ADVISERS, INC. Templeton Global Income Fund Co-Investment Managers FRANKLIN ADVISERS, INC. TEMPLETON GLOBAL ADVISORS LIMITED Templeton Global Smaller Companies Fund FRANKLIN TEMPLETON INVESTMENTS CORP. Templeton Global Total Return Fund FRANKLIN ADVISERS, INC. Templeton Growth (Euro) Fund TEMPLETON GLOBAL ADVISORS LIMITED Templeton Korea Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Latin America Fund TEMPLETON ASSET MANAGEMENT LTD. Templeton Thailand Fund TEMPLETON ASSET MANAGEMENT LTD. 6 Unaudited Semi-Annual Report

9 The Board of Directors The Board Chairman The Honorable Nicholas F. Brady The Honorable Nicholas Brady (84) was appointed to the Board on November 30, Mr. Brady is Chairman and President of Choptank Partners, Inc., founder and Chairman of Darby Overseas Investments, Ltd. as well as a founding partner and current participant in Holowesko Partners Ltd. In addition, he serves as a Director of Weatherford International Ltd. In 1988 Mr. Brady was appointed by President Reagan as the 68th Secretary of the Treasury of the United States, a post he held through the elder President Bush s administration. In 1982 Mr. Brady was appointed a U.S. senator from the State of New Jersey. He went on to serve on five presidential commissions, chairing the Presidential Task Force on Mechanisms, commonly called the Brady Commission, which investigated the causes of the 1987 stock market crash and recommended a number of reforms that were subsequently adopted. In 1954, he joined Dillon, Read & Co. Inc., starting a 34 year career in investment banking with the firm, during which time he rose to become President, Chairman of the Board and for 17 years, its Chief Executive Officer. Directors Duke of Abercorn KG His Grace, the Duke of Abercorn KG (80) was appointed to the Board on November 30, His Grace, the Duke of Abercorn KG is presently a Director of Titanic Quarter which is Europe s biggest waterfront redevelopment. He was formerly a Director of Northern Bank Ltd, Chairman of Laganside Corporation, Chairman of Calor Teoranta (Ireland) and a Director of Belfast International Airport Ltd. He has also previously been a Director of The Industrial Development Board for Northern Ireland as well as a Director of Balcas Timber Ltd. Vijay C. Advani Vijay Advani (54) was appointed to the Board on February 25, Mr. Advani is an Executive Vice President for Franklin Templeton Investments Global Advisory Services. He is responsible for Franklin Templeton s global retail and institutional distribution strategies and initiatives, including sales, marketing, client service and product development. Mr. Advani is an officer of Franklin Resources, Inc., a member of several Franklin Templeton committees and a board member of various Franklin Templeton subsidiaries. Mr. Advani joined the Templeton organization in 1995 as the president of Templeton Asset Management (India) Pvt. Ltd., in Mumbai (Bombay). In 2000, he moved to Singapore as the regional managing director, Product Development, Sales and ing for Asia, Eastern Europe and Africa. In 2002, Mr. Advani relocated to California and was appointed executive managing director of International Retail Development. In 2005, he took responsibility for global retail distribution and in 2008 assumed his current role. Prior to joining Franklin Resources, Mr. Advani worked at the World Bank Group in Washington, DC. His primary responsibility was providing advisory and technical assistance to government authorities on the development of securities and financial markets; structuring, establishing and financing specialized financial institutions; and mobilizing equity, quasi-equity and debt financing. He worked in several emerging economies in the former Soviet Union, Asia, Middle East and Africa. Mr. Advani received an M.B.A. from the University of Massachusetts, Amherst, where he graduated as a Foreign Student Scholar and a bachelor s degree in Accounting and Finance from the University of Bombay (now the University of Mumbai), India. Mr. Advani is a board member of Jumpstart, U.S-India Business Council (USIBC) and the Center for the Advanced Study of India (CASI) at the University of Pennsylvania. He is also a committee member of the San Francisco Bangalore Sister City Initiative and a former Board Member of Lok Foundation. Mark G. Holowesko Mark Holowesko (54) was appointed to the Board on November 30, Mark Holowesko is the founding Partner and Chief Executive Officer of Holowesko Partners Ltd (HPL). Mark launched the firm in the fall of 2000, under the name of Templeton Capital Advisors, to serve the needs of institutional and high--worth investors. Subsequently renamed Holowesko Partners, under Mark s leadership HPL has enjoyed steady and consistent growth and now stands as one of the premier global equity hedge firms in the industry. Mark s investment career began in 1985 when he joined Templeton Global Advisors as a research analyst. By 1987, he had assumed the day-to-day management of all portfolios previously managed by Sir John Templeton, including the Templeton Growth Fund and the Templeton Foreign Fund. In 1989, Mark became the Director of Research of the Templeton Global Equity Funds and later, in 1996, assumed the role of Chief Investment Officer. Mark served as a member of the Executive Committee of Templeton, Galbraith & Hansberger from 1987 to 1992 and as a member of the Executive Committee of Franklin Resources from 1992 to Mark was Director, President & Head of Investments of Templeton Global Advisors Ltd. from 1992 to Currently, Mark is Chairman of the Investment Committee of First Trust Bank, an offshore entity responsible for managing the of two of Sir John Templeton s Foundations. Unaudited Semi-Annual Report 7

10 The Board (continued) The Board of Directors (continued) James J. K. Hung James Hung (68) was appointed to the Board on November 29, He is the Chairman and Chief Executive Officer ( CEO ) of Xinya Investment Group, China, a real estate development and investment group in Mainland China, Hong Kong and Taiwan. He is also a Director and major shareholder of Security Bank in the Philippines and the Director of Franklin Templeton Fund Management Company in Shanghai, a joint venture of Franklin Templeton and the Sealand Securities Company, China. His previous experience includes working for Asia Securities Inc. (Taiwan) as the Chairman and CEO. He has also previously been the Director of Yi-Min Fund Management Co., (China), H&Q Venture Capital Inc. (Taiwan), Taiwan Index Fund Inc. (Luxembourg) and Vietnam Fund Inc. (Guernsey). Gregory E. Johnson Gregory Johnson (53) was appointed to the Board on November 28, He is Chairman, President and Chief Executive Officer of Franklin Resources, Inc. and serves on the Board of Directors. He is also President of Templeton Worldwide, Inc., Chief Executive Officer and President of Templeton International, Inc. and serves as a Director for a number of subsidiaries of Franklin Resources, Inc. He is a member of a number of Franklin Templeton s International Fund Boards. Mr. Johnson joined Franklin in 1986 after working as a senior accountant for Coopers & Lybrand. He has served as President and Chairman of the Board for Franklin Templeton Distributors, Inc., President of Franklin Investment Advisory, LLC, President of FT Trust Company, Vice President of Franklin Advisers, Inc., co-portfolio manager of Franklin Income Fund and Franklin Utilities Fund and as an investment analyst. Geoffrey A. Langlands Geoffrey Langlands (79) was appointed to the Board on September 27, He is a resident of Rio de Janeiro, Brazil, where he is currently Managing Partner of Langlands Consultoria Ltda., and a partner in Horto Consultoria Ltda., as well as participating in the Boards of Fundação Flora de Apoio à Botânica and Ser Cidadão, two non profit making institutions. He was a Director of Templeton Emerging s Investment Trust (1994/2005, having been Chairman 2003/2004). He was an Executive Director of Santander Brasil Asset Management S/A (2000/2001), Banco Bozano, Simonsen S/A (1969/2000) and Banco Geral de Investimentos S/A (1968/1969). Previously, he was a Managing Partner of Organização S/N Ltda. (1960/1968) and an employee of the Schroder Group in London and Rio de Janeiro (1957/1960). At Banco Bozano, Simonsen a leading Brazilian investment institution, he organized, set up and managed the bank s asset management, stock broking, corporate finance, investment research and private equity activities. He was also a Director of several companies in the Bozano, Simonsen Group. He also served on the Capital s Advisory Committees of the Brazilian Central Bank and the Inter-American Investment Corporation. He was a Board member of ANBID (Brazilian Investment Bankers Association), General Accident Companhia de Seguros, and Atlantica Hotels International. Dr. J. B. Mark Mobius Dr. Mark Mobius, Ph.D. (78) was appointed to the Board at inception. He is Executive Chairman of Templeton Emerging s Group, currently directs analysts based in Templeton s 18 emerging markets offices and manages the emerging markets portfolios. Dr. Mobius has spent more than 40 years working in emerging markets all over the world. He joined Franklin Templeton Investments in 1987 as president of the Templeton Emerging s Fund, Inc. Dr. Mobius was named by Asiamoney magazine in 2006 as one of their Top 100 Most Powerful and Influential People. Asiamoney said, he...boasts one of the highest profiles of any investor in the region and is regarded by many in the financial industry as one of the most successful emerging markets investors over the last 20 years. Despite tough times during the financial crisis nine years ago, he still commands a strong following in the investment world and is influencing the direction of billions of investment dollars. Other awards include: (1) 2010 Africa Investor Index Series Awards by African Investor, (2) Emerging s Equity Manager of the Year 2001 by International Money ing, (3) Ten Top Money Managers of the 20 th Century in a survey by the Carson Group in 1999, (4) Number One Global Emerging Fund in the 1998 Reuters Survey, (5) 1994 First in Business Money Manager of the Year by CNBC, (6) Closed-End Fund Manager of the Year in 1993 by Morningstar and, (7) Investment Trust Manager of the Year 1992 by Sunday Telegraph. Dr. Mobius is also the author of the following books: with China, The Investor s Guide to Emerging s, Mobius on Emerging s, Passport to Profits, Equities An Introduction to the Core Concepts, Mutual Funds An Introduction to the Core Concepts, Foreign Exchange An Introduction to the Core Concepts, Bonds An Introduction to the Core Concepts, Mark Mobius An Illustrated Biography and The Little Book of Emerging s. The Honourable Trevor G. Trefgarne The Honourable Trevor Trefgarne (71) was appointed to the Board of Franklin Templeton Investment Funds on November 29, He is Chairman of Enterprise Group Limited, Ghana, and has been Director of a number of U.K. listed investment funds including Templeton Emerging s Investment Trust, Recovery Trust (Chairman) and Gartmore High Income Trust. He has extensive experience of the management of listed companies in the U.K. and Africa. 8 Unaudited Semi-Annual Report

11 The Board of Directors (continued) The Board (continued) William C. P. Lockwood William Lockwood (57) was appointed to the Board of Franklin Templeton Investment Funds on December 1, He joined Franklin Templeton in 1992 and served as General Manager of the Franklin Templeton Luxembourg subsidiary and Franklin Templeton Investment Funds until December From December 2005 until January 2014, he was Conducting Officer of Franklin Templeton Investment Funds. The Conducting Officer role was a management, oversight and governance role under the EU UCITS legislation reporting directly to the Board of Franklin Templeton Investment Funds. Mr Lockwood has been working in the financial services industry in Luxembourg since He is a Scottish Chartered Accountant and a Member of the Chartered Institute for Securities & Investment, London. He has served as a director and international vice chairman of the Luxembourg Fund Industry Association (ALFI) and as a council member of the Institute of Chartered Accountants of Scotland. Unaudited Semi-Annual Report 9

12 Report of the Investment Managers Six Months to December 31, 2014 Financial markets continued to perform in the second half of 2014, although the range-bound trades that characterized 2013 and the first half of 2014 seemed to give way to a greater degree of volatility as the period progressed. The upsurge in volatility was caused by the winding down of the US Federal Reserve s (Fed) latest asset-purchase program, the rise in the of the US dollar as the US economy steadily improved (pointing the way toward some modest tightening of Fed policy), and a sharp fall in commodity prices, especially oil. Overall, the six months under review were generally positive ones for investors in equity and credit markets in the developed world, but were far less successful for investors in a number of emerging-market bonds, equities, and currencies, as well as investors in commodities and gold. The US proved once again that it has a much more robust economy than Europe, with gross domestic product (GDP) rising at an annual rate of 5% in the third quarter of Significantly, in Europe while the English-speaking economies Ireland and the UK have come close to matching the US performance, the largest eurozone countries have floundered. Although some green shoots have begun to appear, some observers began to fear that the eurozone was embarked on secular decline. Yet this prospect was not reflected in the valuation of equities and corporate bonds. In spite of economic stagnation and paltry income growth in Europe, at the end of the period under review, there was little difference in forward price-earnings ratios on either side of the Atlantic. Credit spreads told a similar story. Plainly, risk in Europe have been given a boost by euro and oil price weakness, as well as by further prospective European Central Bank (ECB) intervention, including purchases of government bonds. The increasing possibility of ECB asset purchases, plus the lack of inflation pushed European government bond yields down to historic lows during the six-month period. Spreads over Bunds for bonds of equivalent maturity issued by countries such as Spain and Italy, close to the heart of the sovereign-bond crisis just two years ago, fell sharply while German Bund yields themselves fell well below those for US Treasuries. At the end of October, Japanese policymakers announced two unprecedented stimulus measures with global implications. First, the Bank of Japan (BOJ) voted to expand its already massive annual purchases of Japanese government bonds, while on the same day the Government Pension Investment Fund, the world s largest pension fund, decided to increase the size of its overall allocation to global bonds as well as domestic and global equities. Helped by a declining yen, Japanese stock indexes performed well in the six months under review. However, GDP growth has been lower than expected in Japan in recent months, while core inflation and inflation expectations have remained subdued, complicating efforts to kick start a long-stagnant economy. The good news is that at least BOJ asset purchases and the possibility of something similar from the ECB have provided and will provide liquidity to the global market, thus taking the place of the Fed s defunct asset-purchase program. Despite manifest differences in economic structure and quality of policy making, emerging market bonds and equities as a whole underperformed developed markets in the six months under review. The large commodity-dependent countries were the worse hit by the sharp fall in raw material prices, most especially Russia, Brazil and Middle Eastern countries. But while investors proved initially more favorably disposed toward a country like India, which meets its energy needs via imports and embarked on a reform drive under a newly elected prime minister, by the end of 2014 investors were taking a much more cautious view even of relatively stable emerging markets. The state of the Chinese economy has been a constant focus of attention, with some observers ascribing the drop in commodity prices to a meaningful slowdown in the Chinese economy: this slowdown caused the Chinese central bank to cut benchmark interest rates (thus fuelling a dizzying rise in the domestic stock market). More fundamentally, the slowdown in Chinese growth albeit to levels that remain enviable reflects the ongoing transition of the world s second-largest economy from a low-wage, export-driven economy to a higher-wage, more domestically driven one where growth is slower but more sustainable. This transition will likely remain a major theme for global markets throughout the coming year. The six months under review have been marked by a fairly consistent rise in the of the US dollar versus the euro, yen and emerging-market currencies, reflecting the divergence in economic performance and policy prospects. Central banks in emerging markets have had to cut rates or step up foreign- auctions to stabilize their own currencies. Even allowing for severe drops in some bond markets (Ukraine, for example), emerging-market debt indexes had proved immune to the volatility seen in currencies and stocks for much of the period under review. But by mid-december, the relentless rise of the US dollar and the panicky middle-of-the-night decision by the Russian central bank to hike its main interest rate to 17% meant that the average yield on the JP Morgan Bond Index shot up. With corporate balance sheets strong and earnings rising (at least in the US), investment-grade bonds have coped well with the bouts of volatility. But the continued fall in benchmark developed-market bond yields has also left it more difficult to find real in other sections of the bond market, most notably high yield. In addition, cracks have begun to appear in the US high-yield market, where energy sector-related bonds now make up a sizable part of the non-investment universe. While there are winners and losers from the dramatic fall in oil prices of the past six months, overall the global economy should benefit from lower oil prices in the early months of A risk is further geo-political instability involving countries like Russia, Iran and Iraq where macroeconomic prospects are hurt by falling oil prices. In addition, investors will need to be on alert to the possible effects of policy normalization in the US as 2015 progresses. Further volatility in fixed-income markets will thus need to be monitored in the period ahead, while an acceleration in earnings growth would help equities beyond the temporary stimulus provided by central banks in Japan and Europe. THE INVESTMENT MANAGERS January, 2015 The information stated in this report represents historical data and is not an indication of future results. 10 Unaudited Semi-Annual Report

13 THIS PAGE LEFT BLANK INTENTIONALLY Unaudited Semi-Annual Report 11

14 Fund Performance Percentage Change to December 31, 2014 Reference Share Class Launch Date 6 Months % 1 Year % 3 Years % 5 Years % 10 Years % Since Launch % Franklin Asia Credit Fund A (acc) USD 17 Nov 14 (0.5) Franklin Biotechnology Discovery Fund A (acc) USD 03 Apr Franklin Brazil Opportunities Fund A (acc) USD 27 Jul 12 (2.8) Franklin Euro Government Bond Fund A (Ydis) EUR 08 Jan Franklin Euro High Yield Fund A (Ydis) EUR 17 Apr 00 (0.9) Franklin Euro Liquid Reserve Fund A (Ydis) EUR 01 Jun 94 (0.2) (0.5) (0.2) Franklin Euro Short Duration Bond Fund A (acc) EUR 21 Feb Franklin Euro Short-Term Money Fund A (acc) EUR 23 Oct Franklin Euroland Fund A (acc) EUR 28 Nov 08 (1.3) Franklin European Fund A (acc) EUR 29 Jul 11 (1.4) Franklin European Corporate Bond Fund A (acc) EUR 30 Apr Franklin European Dividend Fund A (acc) EUR 29 Jul 11 (2.5) Franklin European Growth Fund A (acc) EUR 29 Dec 00 (8.1) (2.6) Franklin European Income Fund A (acc) EUR 17 Nov Franklin European Small-Mid Cap Growth Fund A (acc) EUR 03 Dec 01 (4.9) (4.5) Franklin European Total Return Fund A (acc) EUR 29 Aug Franklin GCC Bond Fund A (acc) USD 30 Aug Franklin Global Aggregate Bond Fund A (acc) USD 29 Oct 10 (1.6) Franklin Global Aggregate Investment Grade Bond Fund A (acc) USD 22 Jun 12 (2.2) Franklin Global Allocation Fund A (acc) USD 29 Jul 11 (4.7) (1.5) Franklin Global Convertible Securities Fund A (acc) USD 24 Feb 12 (5.7) (2.0) 15.2 Franklin Global Corporate High Yield Fund I (acc) USD 06 Sep 13 (6.4) (0.5) 5.9 Franklin Global Equity Strategies Fund A (acc) USD 15 May 08 (7.2) (3.0) Franklin Global Fundamental Strategies Fund A (acc) USD 25 Oct 07 (5.1) (1.9) Franklin Global Government Bond Fund A (acc) USD 06 Sep 13 (2.0) Franklin Global Growth Fund A (acc) USD 29 Dec Franklin Global Growth and Value Fund A (acc) USD 09 Sep 02 (2.6) Franklin Global High Income Bond Fund A (acc) USD 13 Jul 12 (9.3) (3.3) 18.0 Franklin Global Listed Infrastructure Fund A (acc) USD 26 Apr 13 (4.2) Franklin Global Real Estate Fund A (acc) USD 29 Dec Franklin Global Small-Mid Cap Growth Fund A (acc) USD 15 Apr 02 (13.6) (11.6) Franklin Gold and Precious Metals Fund A (acc) USD 30 Apr 10 (30.8) (11.0) (61.3) (62.1) Franklin High Yield Fund A (Mdis) USD 01 Mar 96 (6.2) (1.3) Franklin Income Fund A (Mdis) USD 01 Jul 99 (5.4) Franklin India Fund A (acc) USD 25 Oct Franklin Japan Fund A (acc) JPY 01 Sep (20.7) Franklin K2 Alternative Strategies Fund A (acc) USD 15 Sep Franklin MENA Fund A (acc) USD 16 Jun 08 (4.9) (33.8) Franklin Multi-Asset Income Fund A (acc) EUR 26 Apr Franklin Natural Resources Fund A (acc) USD 12 Jul 07 (31.6) (21.1) (19.6) (9.6) (23.9) Franklin Real Return Fund A (acc) USD 30 Apr 10 (5.2) (1.5) Franklin Strategic Income Fund A (acc) USD 12 Jul 07 (2.4) Franklin Technology Fund A (acc) USD 03 Apr Franklin U.S. Dollar Liquid Reserve Fund A (Mdis) USD 01 Jun 94 (0.1) (0.2) (0.5) (1.0) Franklin U.S. Equity Fund A (acc) USD 01 Jul Franklin U.S. Focus Fund A (acc) USD 15 May Franklin U.S. Government Fund A (Mdis) USD 28 Feb Franklin U.S. Low Duration Fund A (Mdis) USD 29 Aug Unaudited Semi-Annual Report

15 Fund Performance Percentage Change to December 31, 2014 (continued) Reference Share Class Launch Date 6 Months % 1 Year % 3 Years % 5 Years % 10 Years % Since Launch % Franklin U.S. Opportunities Fund A (acc) USD 03 Apr Franklin U.S. Small-Mid Cap Growth Fund A (acc) USD 29 Dec Franklin U.S. Total Return Fund A (acc) USD 29 Aug Franklin World Perspectives Fund A (acc) USD 14 Oct 08 (2.6) Franklin Mutual Beacon Fund A (acc) USD 07 Jul 97 (0.4) Franklin Mutual Euroland Fund A (acc) EUR 14 Oct 08 (6.1) (2.4) Franklin Mutual European Fund A (acc) EUR 03 Apr 00 * (2.4) (1.4) Franklin Mutual Global Discovery Fund A (acc) USD 25 Oct 05 (6.7) (3.4) Templeton Africa Fund A (acc) USD 04 May 12 (11.3) (10.7) 11.9 Templeton ASEAN Fund A (acc) USD 17 Nov 14 (0.5) Templeton Asian Bond Fund A (acc) USD 25 Oct 05 (1.7) Templeton Asian Dividend Fund A (acc) USD 26 Apr Templeton Asian Growth Fund A (Ydis) USD 30 Jun 91 (4.0) Templeton Asian Smaller Companies Fund A (acc) USD 14 Oct Templeton BRIC Fund A (acc) USD 25 Oct 05 (9.7) (7.8) (6.7) (23.7) 36.6 Templeton China Fund A (acc) USD 01 Sep (0.9) Templeton Constrained Bond Fund A (acc) USD 20 Sep 13 (1.4) Templeton Eastern Europe Fund A (acc) EUR 10 Nov 97 (19.9) (19.5) (9.3) (32.0) (3.2) 99.5 Templeton Emerging s Fund A (Ydis) USD 28 Feb 91 (8.0) (8.0) 1.4 (1.4) Templeton Emerging s Balanced Fund A (acc) USD 29 Apr 11 (8.4) (6.3) (1.1) (15.3) Templeton Emerging s Bond Fund A (Qdis) USD 05 Jul 91 (7.5) (4.4) Templeton Emerging s Smaller Companies Fund A (acc) USD 18 Oct Templeton Euroland Fund A (acc) EUR 08 Jan 99 (6.6) (4.2) Templeton European Fund A (acc) EUR 17 Apr 91* (6.4) (5.1) Templeton Frontier s Fund A (acc) USD 14 Oct 08 (9.0) (3.5) Templeton Global Fund A (Ydis) USD 28 Feb 91 (7.5) (3.0) Templeton Global (Euro) Fund A (Ydis) EUR 26 Apr Templeton Global Balanced Fund A (Qdis) USD 01 Jun 94 (6.6) (2.8) Templeton Global Bond Fund A (Mdis) USD 28 Feb 91 (1.8) Templeton Global Bond (Euro) Fund A (acc) EUR 29 Aug 03 (1.5) Templeton Global Equity Income Fund A (acc) USD 27 May 05 (9.4) (4.4) Templeton Global High Yield Fund A (acc) USD 27 Sep 07 (6.9) (3.0) Templeton Global Income Fund A (acc) USD 27 May 05 (5.6) (1.2) Templeton Global Smaller Companies Fund A (Ydis) USD 08 Jul 91 (9.3) (7.4) Templeton Global Total Return Fund A (acc) USD 29 Aug 03 (2.5) (0.3) Templeton Growth (Euro) Fund A (acc) EUR 09 Aug Templeton Korea Fund A (acc) USD 08 May 95 (16.4) (15.1) 10.8 (2.6) 34.7 (38.7) Templeton Latin America Fund A (Ydis) USD 28 Feb 91 (20.2) (18.1) (24.7) (31.1) Templeton Thailand Fund A (acc) USD 20 Jun The Fund Performance disclosed in this table is the performance of the reference share class in base of the Fund. Where Class A distribution A (dis) Shares are disclosed, the performance is calculated with all the income reinvested (total return). Information on other share classes is available on request. * The inception date is for the Fund, however the reference share class launched at a later date. Fund performance prior to September 1996 excluded from calculation because a different portfolio allocation strategy was in use. Information on other share classes is available on request. This report shall not constitute an offer or a solicitation of an offer to buy shares. Subscriptions are to be made on the basis of the current prospectus and its addendum as the case may be, where available the relevant Key Investor Information Documents ( KIIDs ), a copy of the latest available audited annual report and, if published thereafter, the latest unaudited semiannual report. The price of shares and income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is no guarantee of future performance. Currency fluctuations may affect the of investments. Data source: Performance Franklin Templeton Investments Unaudited Semi-Annual Report 13

16 Statement of Net Assets at December 31, 2014 Total Franklin Asia Credit Fund* Franklin Biotechnology Discovery Fund Franklin Brazil Opportunities Fund (USD) (USD) (USD) (USD) ASSETS Investment in securities at market (notes 2(b), 3) 142,163,132,479 7,710,233 2,463,818,847 28,095,878 Cash 7,692,876,784 42,802 85,741,680 1,679,722 Time deposits and repurchase agreements (note 4) 1,095,739,727 Amounts receivable on sale of investments 3,696,939,811 3,580, ,000 Amounts receivable on subscriptions 434,589,800 25,047,804 9,352 Interest and dividends receivable, 1,149,352,020 92, ,382 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) 4,076,320,929 1,464,593 Unrealised profit on financial future contracts (notes 2(d), 6) 1,512,732 1,016,644 Unrealised profit on interest rate swap contracts (notes 2(e), 7) 46,133 46,133 Unrealised profit on inflation swap contracts (notes 2(f), 8) 591, ,259 Credit default swap contracts at market (notes 2(i), 11) 6,735,286 Option contracts at market (notes 2(j), 12) 450,556 Other receivables 26,780, TOTAL ASSETS 160,345,068,038 7,846,128 2,578,189,200 34,006,963 LIABILITIES Amounts payable on purchases of investments 1,125,417,320 20,477,236 Amounts payable on redemptions 476,554,401 23,828,620 7,655 Investment management fees payable (note 14) 114,486,893 4,446 2,111,091 29,504 Bank overdraft 1,769,672 Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 87,925,994 31, ,274 Unrealised loss on financial future contracts (notes 2(d), 6) 348,486 Unrealised loss on interest rate swap contracts (notes 2(e), 7) 777,010,494 Unrealised loss on total return swap contracts (notes 2(h), 10) 623,660 Credit default swap contracts at market (notes 2(i), 11) 3,837,317 6,013 Taxes and expense payable 175,471,608 6,207 1,720,883 58,247 TOTAL LIABILITIES 2,763,445,845 42,178 48,321, ,419 TOTAL NET ASSETS 157,581,622,193 7,803,950 2,529,868,096 33,905,544 THREE YEAR ASSET SUMMARY June 30, ,045,017,682 3,196,760,336 45,114,453 June 30, ,862,333, ,381,187 87,859,184 June 30, ,991,665, ,307,603 * This Fund was launched on November 17, 2014 ** This Fund had its name changed effective on September 30, 2014 (refer to Note 1) *** This Fund had its name changed effective on November 14, 2014 (refer to Note 1) 14 Unaudited Semi-Annual Report

17 Statement of Net Assets at December 31, 2014 (continued) Franklin Euro Government Bond Fund Franklin Euro High Yield Fund Franklin Euro Liquid Reserve Fund** Franklin Euro Short Duration Bond Fund Franklin Euro Short-Term Money Fund** Franklin Euroland Fund*** Franklin European Fund*** (EUR) (EUR) (EUR) (EUR) (EUR) (EUR) (EUR) 138,182,318 1,037,847,652 72,629,969 56,087,464 44,508,516 30,930,519 6,860,963 2,931,114 45,307,129 15,271,114 1,066,211 12,383, , , ,500,000 2,500, ,705 22, ,424 1,761, ,230 91,802 1,169,771 36, ,000,825 20,596,475 19, ,509 10,815 1,221 1,550,621 5,517 10,573 28,486 7, ,348,681 1,107,063,406 90,980,651 57,988,503 60,582,775 31,812,110 7,051,035 2,020, ,968 1,202, ,138 2,134, ,746 2,500 6,990 14,226 2,795 46, ,426 22,012 11,231 10,289 23,073 5,433 26,846,653 65, ,975 75,450 18,109 22,388 24,320 10,933 2,371,198 30,506, , ,808 1,241,924 61,619 19, ,977,483 1,076,557,214 90,755,443 57,083,695 59,340,851 31,750,491 7,031, ,108,684 1,304,276,718 67,620,651 7,061,242 69,860,381 35,880,575 7,358,094 32,277, ,702, ,358,536 94,345,377 24,599,488 4,413,361 35,752, ,078, ,184, ,016,087 19,806,420 3,586,121 Unaudited Semi-Annual Report 15

18 Statement of Net Assets at December 31, 2014 (continued) Franklin European Corporate Bond Fund Franklin European Dividend Fund Franklin European Growth Fund Franklin European Income Fund* (EUR) (EUR) (EUR) (EUR) ASSETS Investment in securities at market (notes 2(b), 3) 124,619,270 73,722,710 1,354,128,924 8,077,201 Cash 1,656,584 2,298,276 34,231,760 3,251 Time deposits and repurchase agreements (note 4) Amounts receivable on sale of investments ,771 Amounts receivable on subscriptions 369, , ,324 Interest and dividends receivable, 2,058, ,836 3,287,024 52,539 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) 1,465,575 15,599 Unrealised profit on financial future contracts (notes 2(d), 6) Unrealised profit on interest rate swap contracts (notes 2(e), 7) Unrealised profit on inflation swap contracts (notes 2(f), 8) Credit default swap contracts at market (notes 2(i), 11) Option contracts at market (notes 2(j), 12) Other receivables 2,427 52,821 2,104,171 1,209 TOTAL ASSETS 128,707,100 76,674,272 1,396,678,549 8,149,799 LIABILITIES Amounts payable on purchases of investments 682, , ,065 Amounts payable on redemptions 35,744 10,797 9,470,303 Investment management fees payable (note 14) 57,630 51,362 1,109,038 4,885 Bank overdraft Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 18, ,503 Unrealised loss on financial future contracts (notes 2(d), 6) Unrealised loss on interest rate swap contracts (notes 2(e), 7) Unrealised loss on total return swap contracts (notes 2(h), 10) Credit default swap contracts at market (notes 2(i), 11) Taxes and expense payable 69,744 42, ,543 5,820 TOTAL LIABILITIES 864, ,463 12,411,949 10,705 TOTAL NET ASSETS 127,843,050 75,937,809 1,384,266,600 8,139,094 THREE YEAR ASSET SUMMARY June 30, ,107,946 53,452,156 3,132,137,485 June 30, ,393,949 23,286, ,002,037 June 30, ,570,368 13,919, ,512,865 * This Fund was launched on November 17, 2014 ** This Fund had its name changed effective on September 30, Unaudited Semi-Annual Report

19 Statement of Net Assets at December 31, 2014 (continued) Franklin European Small-Mid Cap Growth Fund Franklin European Total Return Fund** Franklin GCC Bond Fund Franklin Global Aggregate Bond Fund Franklin Global Aggregate Investment Grade Bond Fund Franklin Global Allocation Fund Franklin Global Convertible Securities Fund (EUR) (EUR) (USD) (USD) (USD) (USD) (USD) 634,105, ,078,692 17,719,454 21,526,652 45,725,462 44,786, ,099,563 16,521,940 4,360,054 1,024, , ,288 4,463, ,077 1,000, , ,000 3,719,512 3,490, , , ,295 17, , ,151 41, ,983 3,291, , , , , ,456 29, , ,988 1,015,365 64,347 4,573 4,203 6, ,407, ,566,116 20,183,111 22,322,844 47,486,820 53,744, ,572,336 4,148,244 4,452 1,425,144 3,006, ,230 1,126, , , ,017 50, , ,711 10,942 9,689 16,390 42,011 81,885 38, , , ,585 46, , ,875 13,516 26,702 23,028 60,073 90,077 1,949,138 4,651, ,518 1,500,487 3,294,377 1,161, , ,457, ,914,783 20,039,593 20,822,357 44,192,443 52,582, ,069, ,235, ,558,208 11,848,638 21,989,463 11,464,066 52,720, ,330, ,899,083 84,439,789 16,109,623 10,335,416 45,026,992 19,077, ,790,227 64,970,960 33,185,762 10,062,164 26,567,300 4,537,572 Unaudited Semi-Annual Report 17

20 Statement of Net Assets at December 31, 2014 (continued) Franklin Global Corporate High Yield Fund Franklin Global Equity Strategies Fund Franklin Global Fundamental Strategies Fund Franklin Global Government Bond Fund (USD) (USD) (USD) (USD) ASSETS Investment in securities at market (notes 2(b), 3) 28,420,036 73,807,960 1,614,739,694 16,669,262 Cash 841,853 2,277, ,708, ,823 Time deposits and repurchase agreements (note 4) 1,000,000 1,000,000 Amounts receivable on sale of investments 385, , ,157,303 Amounts receivable on subscriptions 34,633 3,211,189 27,450 Interest and dividends receivable, 536, ,334 6,168, ,854 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) 24,735,005 93,480 Unrealised profit on financial future contracts (notes 2(d), 6) Unrealised profit on interest rate swap contracts (notes 2(e), 7) Unrealised profit on inflation swap contracts (notes 2(f), 8) Credit default swap contracts at market (notes 2(i), 11) Option contracts at market (notes 2(j), 12) Other receivables 3,662 21,533 1,045,687 2,178 TOTAL ASSETS 30,186,643 77,396,079 1,880,765,013 18,810,047 LIABILITIES Amounts payable on purchases of investments 312,398 19,974,732 1,083,030 Amounts payable on redemptions 80,469 3,894,110 Investment management fees payable (note 14) 15,344 81,787 1,561,830 6,315 Bank overdraft Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 114, ,914 Unrealised loss on financial future contracts (notes 2(d), 6) Unrealised loss on interest rate swap contracts (notes 2(e), 7) 1,527,628 Unrealised loss on total return swap contracts (notes 2(h), 10) Credit default swap contracts at market (notes 2(i), 11) Taxes and expense payable 15,952 66,633 1,793,977 13,956 TOTAL LIABILITIES 146, ,201 28,752,277 1,103,301 TOTAL NET ASSETS 30,040,605 76,735,878 1,852,012,736 17,706,746 THREE YEAR ASSET SUMMARY June 30, ,002,596 83,350,921 1,772,861,098 13,343,485 June 30, ,303, ,937,967 June 30, ,943, ,985, Unaudited Semi-Annual Report

21 Statement of Net Assets at December 31, 2014 (continued) Franklin Global Growth Fund Franklin Global Growth and Value Fund Franklin Global High Income Bond Fund Franklin Global Listed Infrastructure Fund Franklin Global Real Estate Fund Franklin Global Small-Mid Cap Growth Fund Franklin Gold and Precious Metals Fund (USD) (USD) (USD) (USD) (USD) (USD) (USD) 190,480,224 64,545,614 88,097,460 13,150, ,898, ,065,830 77,627, , ,094 3,900, , , , ,014 7,000,000 2,000,000 6,000,000 6,000, ,255 20,876 2,615,336 16, , ,488 1,471, , , ,854 49,215 2,186, , , ,094 70,648 1,738,750 31,844 1,519, ,359 27,774 13,471 48,873 2,854 23, , ,541,591 67,777,239 96,940,012 13,452, ,336, ,871,163 80,576, , ,450, , ,458 1,057, ,487 4,810,539 1,340, , ,100 56,035 64,757 9, , ,212 66, ,148 1,026,240 3, , , ,501 79,521 72,634 16, , ,566 96, , ,129 2,220, ,870 6,068,136 1,862,535 2,416, ,590,121 67,536,110 94,719,208 13,199, ,268, ,008,628 78,159, ,502,608 70,964,780 81,213,777 10,182, ,586, ,729, ,261, ,859,879 88,200,184 21,029,818 4,677, ,643, ,556,600 42,976, ,725,800 79,523, ,399,470 57,058, ,752,055 Unaudited Semi-Annual Report 19

22 Statement of Net Assets at December 31, 2014 (continued) Franklin High Yield Fund Franklin Income Fund Franklin India Fund Franklin Japan Fund (USD) (USD) (USD) (JPY) ASSETS Investment in securities at market (notes 2(b), 3) 3,871,373,961 4,010,947,734 3,210,708,887 26,256,414,560 Cash 75,805,334 54,703,581 23,310, ,149,135 Time deposits and repurchase agreements (note 4) 60,000,000 Amounts receivable on sale of investments 108,940,000 96,606, ,922 84,844,503 Amounts receivable on subscriptions 7,110,392 18,782,129 14,421,538 48,530,488 Interest and dividends receivable, 70,786,763 36,897,189 23,151,492 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) 875,873 Unrealised profit on financial future contracts (notes 2(d), 6) Unrealised profit on interest rate swap contracts (notes 2(e), 7) Unrealised profit on inflation swap contracts (notes 2(f), 8) Credit default swap contracts at market (notes 2(i), 11) Option contracts at market (notes 2(j), 12) Other receivables 7,342 2,170 TOTAL ASSETS 4,134,892,323 4,217,944,768 3,309,079,330 26,682,090,178 LIABILITIES Amounts payable on purchases of investments 631,656 29,623, ,357,831 Amounts payable on redemptions 32,805,206 48,054,737 5,727, ,626,257 Investment management fees payable (note 14) 2,807,519 2,980,777 2,148,037 19,794,995 Bank overdraft Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 894, ,542 Unrealised loss on financial future contracts (notes 2(d), 6) Unrealised loss on interest rate swap contracts (notes 2(e), 7) Unrealised loss on total return swap contracts (notes 2(h), 10) Credit default swap contracts at market (notes 2(i), 11) Taxes and expense payable 3,693,958 3,351,280 1,830,300 23,081,929 TOTAL LIABILITIES 39,306,683 55,912,666 39,898, ,861,012 TOTAL NET ASSETS 4,095,585,640 4,162,032,102 3,269,181,097 25,972,229,166 THREE YEAR ASSET SUMMARY June 30, ,131,295,651 3,631,326,483 1,854,259,603 25,330,401,513 June 30, ,993,642,994 1,709,720, ,247,397 25,430,175,279 June 30, ,037,075,396 1,298,369,835 1,189,022,902 12,730,289,900 * This Fund was launched on September 15, Unaudited Semi-Annual Report

23 Statement of Net Assets at December 31, 2014 (continued) Franklin K2 Alternative Strategies Fund* Franklin MENA Fund Franklin Multi-Asset Income Fund Franklin Natural Resources Fund Franklin Real Return Fund Franklin Strategic Income Fund Franklin Technology Fund (USD) (USD) (EUR) (USD) (USD) (USD) (USD) 31,707, ,964,888 48,110, ,896,524 8,515,819 1,206,307, ,323,427 39,746,687 7,353,702 2,937,398 3,102, , ,853,837 29,665,160 8,000, , ,610 5,486 4,515, , ,295, ,631 1,682, , ,475 1,707,200 8,539,956 9,291,204 96,420 43, , ,852 51,958 15,640, ,839 15,596,304 72,773 20,234 6,715,052 65, ,981 49, ,814 3, , ,195 73,523, ,751,613 51,658, ,467,631 9,121,374 1,758,123, ,852,456 1,326,224 1,972, ,936 34,548, , ,546,088 39, ,305 4,012,010 7,034, , ,993 21, ,762 5,858 1,046, ,971 12, ,391 14, ,063 42, , , ,208 19,063 77, ,657 35, ,067 16,790 1,354, ,403 1,687,634 4,935, ,537 1,261,197 65,467 41,276,239 9,241,606 71,836, ,815,867 51,249, ,206,434 9,055,907 1,716,847, ,610, ,268,016 31,687, ,339,427 9,149,693 1,498,222, ,948,763 55,087,685 23,057, ,710,030 13,064,062 1,152,727, ,401,678 51,733, ,504,877 15,525, ,417, ,591,332 Unaudited Semi-Annual Report 21

24 Statement of Net Assets at December 31, 2014 (continued) Franklin U.S. Dollar Liquid Reserve Fund Franklin U.S. Equity Fund Franklin U.S. Focus Fund Franklin U.S. Government Fund (USD) (USD) (USD) (USD) ASSETS Investment in securities at market (notes 2(b), 3) 267,040, ,237,871 34,583,074 1,125,238,988 Cash 3,912 12,400, ,524 49,542,179 Time deposits and repurchase agreements (note 4) Amounts receivable on sale of investments 78,600,000 1,835, ,000 72,450,000 Amounts receivable on subscriptions 6,756,592 2,167,987 1,329,209 13,791,323 Interest and dividends receivable, 533,052 27,813 3,687,430 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) Unrealised profit on financial future contracts (notes 2(d), 6) Unrealised profit on interest rate swap contracts (notes 2(e), 7) Unrealised profit on inflation swap contracts (notes 2(f), 8) Credit default swap contracts at market (notes 2(i), 11) Option contracts at market (notes 2(j), 12) Other receivables 90,926 6,875 9,905 TOTAL ASSETS 352,492, ,181,788 37,135,620 1,264,719,825 LIABILITIES Amounts payable on purchases of investments 2,916, ,018 87,493,806 Amounts payable on redemptions 1,662,118 1,194,614 9,549,171 Investment management fees payable (note 14) 86, ,174 27, ,267 Bank overdraft Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 246, , ,090 Unrealised loss on financial future contracts (notes 2(d), 6) Unrealised loss on interest rate swap contracts (notes 2(e), 7) Unrealised loss on total return swap contracts (notes 2(h), 10) Credit default swap contracts at market (notes 2(i), 11) Taxes and expense payable 195, ,094 35, ,333 TOTAL LIABILITIES 1,944,139 5,472, ,854 99,061,667 TOTAL NET ASSETS 350,548, ,709,512 36,668,766 1,165,658,158 THREE YEAR ASSET SUMMARY June 30, ,128, ,592,202 39,526, ,721,951 June 30, ,361, ,344,009 11,099,048 1,577,666,522 June 30, ,675, ,115,815 15,009,101 2,532,288, Unaudited Semi-Annual Report

25 Statement of Net Assets at December 31, 2014 (continued) Franklin U.S. Low Duration Fund Franklin U.S. Opportunities Fund Franklin U.S. Small-Mid Cap Growth Fund Franklin U.S. Total Return Fund Franklin World Perspectives Fund Franklin Mutual Beacon Fund Franklin Mutual Euroland Fund (USD) (USD) (USD) (USD) (USD) (USD) (EUR) 1,518,490,536 4,493,435, ,509, ,552, ,552,562 1,165,019,625 12,757,540 65,784,615 20,508,601 66,485 17,494,433 1,482,375 12,288, ,709 10,000,000 52,018,762 23,614,428 8,392,420 23,662,299 5,641,149 10,950,262 8,220 1,076,686 21,834,593 2,815, ,121 1,612,558 4,524,094 7,082 7,405,201 4,795,439 57,064 1,135, ,960 1,684,065 8,818 18,020,520 2,379,539 4,145,707 29, , ,628 11,018 72,889 21,708 53, ,890 7,980 1,663,009,837 4,564,188, ,840, ,252, ,747,439 1,199,148,188 13,102, ,878 39,950, ,928 24,140,398 6,094, ,032 1,590,589 12,507, , ,020 3,616,505 6,868,856 15, ,121 3,509, ,947 94, , ,450 11,259 4,209,639 10,673 87,560 11,867 3,329, , ,300 3,004, , , ,986 1,327,975 19,345 6,905,064 63,180,869 1,935,399 25,044,044 10,251,906 9,315,313 46,587 1,656,104,773 4,501,007, ,905, ,208, ,495,533 1,189,832,875 13,055,762 1,652,992,798 4,670,970, ,387, ,124, ,122,633 1,169,070,336 22,865,158 1,569,847,836 2,739,786, ,354, ,351, ,403, ,397,542 7,449, ,285,036 2,911,650, ,984, ,736,168 61,153, ,414,521 7,997,211 Unaudited Semi-Annual Report 23

26 Statement of Net Assets at December 31, 2014 (continued) Franklin Mutual European Fund Franklin Mutual Global Discovery Fund Templeton Africa Fund Templeton ASEAN Fund* (EUR) (USD) (USD) (USD) ASSETS Investment in securities at market (notes 2(b), 3) 3,015,904,522 1,539,533, ,475,897 4,442,154 Cash 101,568,654 23,907, , ,157 Time deposits and repurchase agreements (note 4) 3,000,000 Amounts receivable on sale of investments 4,813,956 6,417,655 5,631 Amounts receivable on subscriptions 4,545, ,788 1,373,516 Interest and dividends receivable, 2,984,820 2,564, ,851 4,593 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) 332,546 Unrealised profit on financial future contracts (notes 2(d), 6) Unrealised profit on interest rate swap contracts (notes 2(e), 7) Unrealised profit on inflation swap contracts (notes 2(f), 8) Credit default swap contracts at market (notes 2(i), 11) Option contracts at market (notes 2(j), 12) Other receivables 2,269, ,936 24,591 1,452 TOTAL ASSETS 3,132,419,434 1,573,488, ,660,960 4,991,356 LIABILITIES Amounts payable on purchases of investments 73,259 24,481 6,860 Amounts payable on redemptions 9,150,663 5,554, ,669 Investment management fees payable (note 14) 2,404,499 1,216, ,878 5,667 Bank overdraft Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 2,101, ,228 Unrealised loss on financial future contracts (notes 2(d), 6) Unrealised loss on interest rate swap contracts (notes 2(e), 7) Unrealised loss on total return swap contracts (notes 2(h), 10) Credit default swap contracts at market (notes 2(i), 11) Taxes and expense payable 2,851,351 1,261, ,871 5,852 TOTAL LIABILITIES 14,479,772 10,158,450 1,579,646 18,379 TOTAL NET ASSETS 3,117,939,662 1,563,330, ,081,314 4,972,977 THREE YEAR ASSET SUMMARY June 30, ,757,379,912 1,934,098, ,593,248 June 30, ,253,747,426 1,096,131,750 86,772,962 June 30, ,130,655, ,257,616 5,433,869 * This Fund was launched on November 17, Unaudited Semi-Annual Report

27 Statement of Net Assets at December 31, 2014 (continued) Templeton Asian Bond Fund Templeton Asian Dividend Fund Templeton Asian Growth Fund Templeton Asian Smaller Companies Fund Templeton BRIC Fund Templeton China Fund Templeton Constrained Bond Fund (USD) (USD) (USD) (USD) (USD) (USD) (USD) 1,840,813,701 7,472,021 11,665,208,036 1,143,259, ,293, ,814,817 8,692,099 52,220, ,274 11,850,704 4,957, ,174 1,135, ,000, ,000,000 39,000,000 6,985, , ,835 3,638,323 1,465, , ,510,734 6,722,942 1,297,591 2,348,379 22,969,315 23,514 8,001, ,635 2,268, ,897 94,704 8,051, , ,201 1,931,537,313 7,638,733 12,266,573,738 1,265,475,914 1,007,035, ,327,416 12,083,753 1,547,824 19,054 7,089,978 1,042, ,404 14,772 2,055,182 45,963,948 7,808,746 2,676,693 4,624,391 1,136,035 7,080 12,487,785 1,247,168 1,372,694 1,206,259 4,356 1,769,672 1,382 16,327, ,906 23,164,721 22,713 3,964,272 14,542 11,083, ,444 1,533,096 1,000,339 12,671 31,868,034 42,058 92,952,520 10,891,882 5,968,665 8,602,065 54,512 1,899,669,279 7,596,675 12,173,621,218 1,254,584,032 1,001,066, ,725,351 12,029,241 2,032,463,169 5,659,011 12,681,269, ,932,482 1,214,667, ,254,225 10,458,979 3,676,902,884 4,911,688 15,816,110, ,037,607 1,343,345,062 1,629,700,238 4,162,546,959 16,112,820, ,044,710 1,853,961,008 2,284,778,429 Unaudited Semi-Annual Report 25

28 Statement of Net Assets at December 31, 2014 (continued) Templeton Eastern Europe Fund Templeton Emerging s Fund Templeton Emerging s Balanced Fund Templeton Emerging s Bond Fund (EUR) (USD) (USD) (USD) ASSETS Investment in securities at market (notes 2(b), 3) 253,650, ,987,875 69,493,045 5,739,660,278 Cash 14,460, , , ,513,611 Time deposits and repurchase agreements (note 4) 81,000,000 Amounts receivable on sale of investments 371,801 1,937,691 1,111,259 23,305,000 Amounts receivable on subscriptions 624,029 1,176, ,523 9,894,113 Interest and dividends receivable, 73, , , ,495,474 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) 124,758,877 Unrealised profit on financial future contracts (notes 2(d), 6) Unrealised profit on interest rate swap contracts (notes 2(e), 7) Unrealised profit on inflation swap contracts (notes 2(f), 8) Credit default swap contracts at market (notes 2(i), 11) Option contracts at market (notes 2(j), 12) Other receivables 252,137 49,556 8, ,710 TOTAL ASSETS 269,432, ,600,595 72,154,198 6,238,172,063 LIABILITIES Amounts payable on purchases of investments 790 1,152,451 75,574 86,031,527 Amounts payable on redemptions 1,202,361 1,409, ,664 28,418,450 Investment management fees payable (note 14) 361,181 1,013,438 78,377 4,787,547 Bank overdraft Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 97,317 75,054 Unrealised loss on financial future contracts (notes 2(d), 6) Unrealised loss on interest rate swap contracts (notes 2(e), 7) 60,284 16,440,728 Unrealised loss on total return swap contracts (notes 2(h), 10) Credit default swap contracts at market (notes 2(i), 11) Taxes and expense payable 643,007 1,055,684 89,410 7,940,645 TOTAL LIABILITIES 2,207,339 4,728, , ,618,897 TOTAL NET ASSETS 267,225, ,872,519 71,452,835 6,094,553,166 THREE YEAR ASSET SUMMARY June 30, ,133, ,777,690 78,614,839 6,868,866,048 June 30, ,515,127 1,114,545,821 77,639,350 8,365,282,640 June 30, ,205,560 1,143,809,086 55,726,679 6,610,440, Unaudited Semi-Annual Report

29 Statement of Net Assets at December 31, 2014 (continued) Templeton Emerging s Smaller Companies Fund Templeton Euroland Fund Templeton European Fund Templeton Frontier s Fund Templeton Global Fund Templeton Global (Euro) Fund Templeton Global Balanced Fund (USD) (EUR) (EUR) (USD) (USD) (EUR) (USD) 324,888, ,325, ,812,303 1,598,656,671 1,500,831, ,315,026 1,095,680,352 9,473,596 6,769,083 1,291,077 4,029, ,100 6,586, ,236,152 21,000,000 82,000,000 13,840,402 13,371 4,649,354 3,436,495 3,441,812 2,131,001 1,722, , ,541 3,834,723 4,665, ,353 2,698, ,956 19, ,708 1,735,784 1,391, ,667 2,529,180 2, , , , , , ,189, ,606, ,100,377 1,632,693,318 1,594,050, ,182,745 1,281,903, ,131 25, , ,036 2,571,712 3,450,093 3,339, ,321 3,115, , , ,130 1,941,283 1,276, , ,246 5,717,166 79, , , , ,019 7,948,779 1,407, ,225 1,328,982 1,537, ,277 3,042,861 19,057,321 6,023,229 1,758,743 6,273, ,651, ,855, ,057,516 1,613,635,997 1,588,027, ,424,002 1,275,630, ,683, ,379, ,386,721 2,020,766,694 1,845,441, ,373,636 1,383,224, ,798, ,180, ,537,533 2,116,331, ,667, ,053, ,148, ,607, ,562, ,757, ,205, ,180, ,299, ,171,716 Unaudited Semi-Annual Report 27

30 Statement of Net Assets at December 31, 2014 (continued) Templeton Global Bond Fund Templeton Global Bond (Euro) Fund Templeton Global Equity Income Fund Templeton Global High Yield Fund (USD) (EUR) (USD) (USD) ASSETS Investment in securities at market (notes 2(b), 3) 30,824,974, ,846, ,701, ,629,704 Cash 3,258,756,803 60,474,536 1,043,404 9,841,045 Time deposits and repurchase agreements (note 4) 9,000,000 Amounts receivable on sale of investments 1,321,876, ,725,061 Amounts receivable on subscriptions 51,483,299 1,161, , ,932 Interest and dividends receivable, 342,611,503 8,676, ,338 3,554,237 Unrealised profit on forward foreign exchange contracts (notes 2(c), 5) 2,264,132,661 3,222 4,281,511 Unrealised profit on financial future contracts (notes 2(d), 6) Unrealised profit on interest rate swap contracts (notes 2(e), 7) Unrealised profit on inflation swap contracts (notes 2(f), 8) Credit default swap contracts at market (notes 2(i), 11) Option contracts at market (notes 2(j), 12) Other receivables 6,515, , ,078 8,371 TOTAL ASSETS 38,070,350, ,618, ,366, ,234,861 LIABILITIES Amounts payable on purchases of investments 334,738,228 3,956,634 4,600,305 2,798,806 Amounts payable on redemptions 57,649,655 2,057,864 1,425, ,023 Investment management fees payable (note 14) 22,603, , , ,395 Bank overdraft Unrealised loss on forward foreign exchange contracts (notes 2(c), 5) 14,452,120 Unrealised loss on financial future contracts (notes 2(d), 6) Unrealised loss on interest rate swap contracts (notes 2(e), 7) 377,121,639 7,224,388 10,372 Unrealised loss on total return swap contracts (notes 2(h), 10) Credit default swap contracts at market (notes 2(i), 11) Taxes and expense payable 52,371, , , ,808 TOTAL LIABILITIES 844,484,489 28,936,161 6,639,629 3,481,404 TOTAL NET ASSETS 37,225,866, ,682, ,727, ,753,457 THREE YEAR ASSET SUMMARY June 30, ,668,873, ,924, ,798, ,179,902 June 30, ,612,567, ,588,367 74,265, ,217,080 June 30, ,237,011, ,372,898 69,775, ,395, Unaudited Semi-Annual Report

31 Statement of Net Assets at December 31, 2014 (continued) Templeton Global Income Fund Templeton Global Smaller Companies Fund Templeton Global Total Return Fund Templeton Growth (Euro) Fund Templeton Korea Fund Templeton Latin America Fund Templeton Thailand Fund (USD) (USD) (USD) (EUR) (USD) (USD) (USD) 1,856,935, ,523,555 29,660,267,763 6,654,361,188 81,585,215 1,368,222, ,209,158 64,890,851 4,317 2,196,627, ,977, ,287 1,028, ,918 7,000,000 46,065,891 1,000,000 19,000,000 1,000,000 90,641, ,272,276,868 4,175,668 4,879, ,635 2,096,747 8,443, , ,159,960 3,874,370 67,579 4,531,781 1,190,921 9,189,086 90, ,942,516 12,251,077 3,576,876 22,575,996 1,581,388, ,373 55,921 1,991,419 1,804, ,053,113, ,948,428 35,266,654,587 7,031,510,476 87,747,071 1,396,647, ,226,744 29,463,709 4, ,496,945 1,146, ,593, ,484 70,609,143 6,149, ,543 5,508,188 4,462,274 1,395, ,715 20,976,136 5,791, ,402 1,612, ,510 1,162, , ,769,342 1,679, ,425 36,753,489 5,764, ,751 1,902, ,584 38,122, , ,605,055 18,852, ,696 10,186,232 4,986,368 2,014,990, ,351,199 34,432,049,532 7,012,658,185 87,300,375 1,386,460, ,240,376 1,784,058, ,669,767 35,393,742,664 6,415,979,187 95,072,318 1,869,091, ,469, ,119, ,616,791 39,277,370,092 5,465,230, ,340,738 2,182,848, ,282, ,785, ,439,485 24,045,237,813 4,715,345,864 98,223,872 2,799,797, ,794,364 Unaudited Semi-Annual Report 29

32 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES Total Franklin Asia Credit Fund* Franklin Asian Flex Cap Fund** Franklin Biotechnology Discovery Fund (USD) (USD) (USD) (USD) 168,045,017,682 10,508,994 3,196,760,336 (2,993,854,229) 165,051,163,453 10,508,994 3,196,760, ,768,625 76,329 1,101,559 2,362,270,961 28,177 1, , ,179 1,853,053 17,395,168 4,465 51,260 2,960,190,575 28,177 80,794 1,154, ,765,528 6,441 18,457 13,286, ,397,099 2,063 5,457 3,092, ,122 4,267 34,723, ,582 26,221, , ,703 2,487 9,775 5,598, , ,375 29, ,907, ,396,688 2,142 6,011 5,616,204 1,938,023 24,755,064 3, ,819 19,616, , ,681,795 1,912 1,484,445 24,494, ,366 1,455,071,525 13,903 37,848 25,284,431 (4,258,209) (789) (346) 1,450,813,316 13,114 37,848 25,284,085 NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 1,509,377,259 15,063 42,946 (24,129,606) 1,442,955,183 1,862, ,682,769 (2,547,612,975) (123,678) (1,192,960) 4,339, ,649 (1,133,517) 2,087,572 (230,977) (419,218,561) (24,923) (10,621) (9,140,083) (108,615) 1,880, ,349,582 (10,556,527,835) (23,898) (1,470,121) 206,899,050 3,803,337,748 (31,525) (241,962) 1,158,726 (308,799,827) (156,647) (598,335) (1,639,591) (136,894) (826,289,407) (31,525) 124 (242,429) (151,613) (7,898,943,758) (195,563) 410, ,764,241 39,088,131,047 8,000, , ,691,250 (36,671,618,705) (11,320,390) (2,157,347,731) 6,911,551 (12,342) 2,423,423,893 8,000,700 (10,907,687) (1,196,656,481) (1,994,021,395) (1,187) (12,236) 429,402,498 7,999,513 (10,919,923) (1,196,656,481) 157,581,622,193 7,803,950 2,529,868,096 (2.88)% % 35.44% * This Fund was launched on November 17, 2014 ** This Fund was closed on September 12, 2014 *** This Fund had its name changed effective on September 30, 2014 (refer to Note 1) Ω This Fund had its name changed effective on November 14, 2014 (refer to Note 1) 30 Unaudited Semi-Annual Report

33 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin Brazil Opportunities Fund Franklin Euro Government Bond Fund Franklin Euro High Yield Fund Franklin Euro Liquid Reserve Fund*** Franklin Euro Short Duration Bond Fund Franklin Euro Short-Term Money Fund*** Franklin Euroland Fund Ω (USD) (EUR) (EUR) (EUR) (EUR) (EUR) (EUR) 45,114, ,108,684 1,304,276,718 67,620,651 7,061,242 69,860,381 35,880,575 45,114, ,108,684 1,304,276,718 67,620,651 7,061,242 69,860,381 35,880,575 52,888 1,168, , ,065 1,071,178 32,992,214 93, ,172 60, ,209 34,604 1,019,162 1,071,178 34,195,326 93, ,233 60, , , ,822 4,702, ,966 48,536 66, ,695 52, ,707 1,360,618 65,226 33,307 37,737 40, , ,621 16, ,172 3,938 1,547 3,253 4,650 6,743 5,373 51,437 3, ,316 1,625 6,878 4,570 6,685 4,556 4,901 3,697 4,208 1,422 3,662 42,370 2, ,157 1,206 43,798 27,039 1,726,605 32, ,649 23, , , ,929 1,008,922 67,832 11,115 20,104 5,064 13, ,119 10,126 2,969 8,169 4, , ,922 9,662, , , , ,532 (4,822) (1,261) (6,175) (70,385) 437, ,661 9,662, ,328 98,294 66, , , ,517 24,532,679 (222,900) 11,939 (5,627) (77,304) (3,891,093) 1,131,695 11,557,174 16, ,291,482 (1,116,881) (6,575,146) 3,691, ,649 (100,087) (350,731) (224,033) 907,766 (1,022) 16,214 (1,112,937) 1,649,212 30,422,473 (222,900) 27,714 (5,476) 1,230,392 (3,260,565) 4,225,391 (23,883,704) (11,614) 151,273 (1,732,178) 1,358,302 (19,989,632) 1,077,819 13,026 (156,647) (8,190) (4,667) (398,779) 1,620,161 (162) (2,492,638) 5,874,603 (11,830,702) (234,514) 178,825 (5,476) (501,786) 5,854,313 54,949, ,529,662 65,946,337 53,775,884 21,496,582 8,897,868 (13,147,472) (22,052,474) (460,189,858) (42,577,031) (3,959,247) (32,010,636) (11,901,391) (13,634) 137,047 (1,413,376) 35,674 (532) (7,306,793) 33,034,184 (178,073,572) 23,369,306 49,852,311 (10,514,054) (3,004,055) (1,409,478) (1,039,988) (37,815,230) (8,683) (624,243) (8,716,271) 31,994,196 (215,888,802) 23,369,306 49,843,628 (10,514,054) (3,628,298) 33,905, ,977,483 1,076,557,214 90,755,443 57,083,695 59,340,851 31,750, % % 28.36% N/A 26.61% N/A 35.08% Unaudited Semi-Annual Report 31

34 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin European Fund* Franklin European Corporate Bond Fund Franklin European Dividend Fund Franklin European Growth Fund (EUR) (EUR) (EUR) (EUR) NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 7,358,094 83,107,946 53,452,156 3,132,137,485 7,358,094 83,107,946 53,452,156 3,132,137,485 45,483 1,026,764 26,143,705 1,290,986 45,483 1,290,986 1,026,764 26,143,705 32, , ,321 10,212,632 8, ,337 79,212 2,558, ,016 1,384 15,259 8, , ,944 2, ,983 4,191 4,569 4,491 7, ,215 2,168 88, ,685 41,191 48,303 2,842,522 12, ,046 62,566 2,232, ,733 7, ,790 67, , ,137 18,893,828 (21,053) (76,130) 67, , ,137 18,817,698 (22,277) 677, ,627 7,326, , , ,772 40,235,710 (63,663) 22,297 9,837, ,667 (16,675) (623,208) 166,492 1,291,530 1,527,021 56,775,644 (257,449) 1,448,056 (3,007,524) (320,024,130) (9,623) (100,045) 1,900,033 (280) 188 (101,650) 1,839,282 (91,237) 2,730,151 (1,682,198) (259,509,171) 664,582 54,027,882 44,019, ,172,256 (806,855) (10,876,336) (17,873,063) (1,836,945,921) 202, ,977 (2,759,342) (142,273) 43,354,194 26,299,654 (1,449,533,007) (92,729) (1,349,241) (2,131,803) (38,828,707) (235,002) 42,004,953 24,167,851 (1,488,361,714) 7,031, ,843,050 75,937,809 1,384,266, % 85.84% 12.87% 42.90% * This Fund had its name changed effective on November 14, 2014 (refer to Note 1) ** This Fund was launched on November 17, 2014 *** This Fund had its name changed effective on September 30, 2014 (refer to Note 1) 32 Unaudited Semi-Annual Report

35 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin European Income Fund** Franklin European Small-Mid Cap Growth Fund Franklin European Total Return Fund*** Franklin GCC Bond Fund Franklin Global Aggregate Bond Fund Franklin Global Aggregate Investment Grade Bond Fund Franklin Global Allocation Fund (EUR) (EUR) (EUR) (USD) (USD) (USD) (USD) 904,235, ,558,208 11,848,638 21,989,463 11,464,066 52,720, ,235, ,558,208 11,848,638 21,989,463 11,464,066 52,720,927 17,370 8,290, ,608 5,098 2,564, , , , ,427 7, ,550 30,176 2,334 22,468 8,312,562 2,594, , , , ,720 7,010 3,106, ,385 49,869 58,403 88, ,723 2, , ,859 19,079 25,658 48,159 62,461 1, ,584 44,929 1,456 3,328 1,275 10, ,696 16, ,262 1,285 3,846 2,000 5,352 5,543 5,703 9,981 5,717 9, ,516 6, ,224 1,793 2,429 1,699 10,173 7,149 1, , ,538 9,544 13,277 1,044 53,335 1, , ,296 16, , ,460 24,122 1,722 2,618 4,481 8,220 13,815 5,433,227 1,701,768 99, , , ,729 (1,110) (2,036) (260,360) (23) (15,905) (16,042) (5,733) 12,705 5,431,191 1,441,408 99, , , ,996 9,763 2,881,371 1,152, , , ,787 (72,276) ,921,206 2,316,981 76, ,808 (1,091,977) 881,636 (11,714) (559,946) (791,287) 249,592 (1,202,233) 165,251 8,414 66,249 (8,221) (60) (22,403) (13,378) (36,642) 6,626 50,868,826 2,901, ,873 (547,322) (584,976) (264,264) 109,012 (97,178,055) 5,307,351 1,647 (609,228) (1,098,569) (4,479,329) 15, ,681 (148,326) 442, ,581 (311,841) (79,574) (22,650) 24,829 (38,538) 5,524 (415) (263,116) (7,774) (466,222) 156,066 (46,347,767) 8,475, ,531 (1,567,992) (1,248,807) (5,075,725) 7,987,817 98,463,756 76,534,280 9,103,124 8,961,487 81,177,201 13,768,310 (297,723,985) (38,534,148) (929,467) (8,260,552) (47,012,494) (8,724,262) (816,347) 26,981 14,170 (2,821) 14, ,987,817 (200,076,576) 38,027,113 8,187, ,114 34,178,889 5,044,243 (4,789) (7,352,891) (1,145,836) (246,403) (297,228) (201,705) (106,932) 7,983,028 (207,429,467) 36,881,277 7,941, ,886 33,977,184 4,937,311 8,139, ,457, ,914,783 20,039,593 20,822,357 44,192,443 52,582, % (3.41)% % 91.18% % % 30.57% Unaudited Semi-Annual Report 33

36 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin Global Convertible Securities Fund Franklin Global Corporate High Yield Fund Franklin Global Equity Strategies Fund Franklin Global Fundamental Strategies Fund (USD) (USD) (USD) (USD) NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 157,330,346 33,002,596 83,350,921 1,772,861, ,330,346 33,002,596 83,350,921 1,772,861, ,092 1, ,077 9,763,455 1,060, ,784 35,077 11,334, , ,242 1,538, , ,215 21,148, ,498 93, ,173 9,114, ,027 33, ,073 2,205, ,719 23,905 1,580 20, ,779 4, , ,278 8,617 8,189 6,104 8,862 5,219 1,062 2,760 61,442 15, , , ,262 3,598, ,330 2,051,173 18,653 3,815 13, ,320 1,061, , ,146 18,195,501 (3,740) (23,652) (2,318) 1,057, , ,146 18,193, , ,828 (115,931) 2,955, ,314 (129,998) 2,228,758 1,116,151 (2,168,657) (369,516) (963,888) (45,310,100) 309,563 7,015 (9,493) (164,040) (1,133,424) (1,563,917) 596, ,899 (42,372,126) (8,925,398) (2,742,938) (7,723,491) (126,436,750) (531,056) (191,566) (164,448) 20,724,603 (569,367) (541,680) (203,513) (203,938) (14,354,224) (1,752) (11,562,051) (2,541,633) (7,106,978) (163,009,616) 35,434,694 2,440,943 4,136, ,348,170 (40,383,080) (1,563,490) (3,373,310) (299,628,014) (18,898) (3,044) (56) 350,066 (4,967,284) 874, , ,070,222 (731,165) (1,294,767) (271,078) (11,908,968) (5,698,449) (420,358) 491, ,161, ,069,846 30,040,605 76,735,878 1,852,012,736 (28.09)% 59.92% 68.02% 24.11% 34 Unaudited Semi-Annual Report

37 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin Global Government Bond Fund Franklin Global Growth Fund Franklin Global Growth and Value Fund Franklin Global High Income Bond Fund Franklin Global Listed Infrastructure Fund Franklin Global Real Estate Fund Franklin Global Small-Mid Cap Growth Fund (USD) (USD) (USD) (USD) (USD) (USD) (USD) 13,343, ,502,608 70,964,780 81,213,777 10,182, ,586, ,729,824 13,343, ,502,608 70,964,780 81,213,777 10,182, ,586, ,729, , ,757 3, ,049 4,446,036 3,547, ,781 3,013, , ,318 4, ,121 28,504 12,123 2, , , ,244 3,028, ,062 4,447,354 3,554,563 32, , , ,453 54,719 1,974,076 1,735,758 16, ,052 87, ,597 15, , , ,017 22,614 17,674 20,454 1,828 83,270 83,324 1,012 5,713 2,104 2, ,459 84,336 6,142 7,765 6,169 8,029 7,379 9,387 6, ,258 2,377 3, ,504 13, ,381 99, , ,252 12, , ,950 21, ,607 24,479 22, ,785 6, ,149 46, ,101 15, , ,222 1,725 22,344 8,517 11,236 1, ,817 47,346 66,554 1,277, , , ,351 4,246,227 3,302,428 (6,777) (12) (48) (5,585) (2,287) 59,777 1,277, , , ,766 4,246,227 3,300, ,550 (330,554) (269,296) 2,240,347 35, , , ,031 6,884,286 2,529, , ,758 5,666,356 8,785, ,512 (846,164) (63,083) (146,410) (3,098,267) (21,300) (37,994) (12,271) (21,661) (1,214) (87,125) (159,413) 405,793 5,669,574 2,248,041 2,275,528 33,430 2,682,091 8,880,251 (748,397) (2,585,547) (4,316,784) (10,992,683) (658,189) 5,802,106 (64,080,228) 114,016 (328,815) (1,060,458) (31,548) (845,461) (5,572) (329,562) (9,816) (14,708) (31,138) (859,249) (50,931) (234,160) 2,425,650 (2,078,559) (9,792,321) (687,445) 6,779,487 (55,250,908) 5,600,549 42,702,585 13,974,467 57,082,335 7,923,339 75,767, ,167,816 (891,144) (34,807,979) (15,321,361) (31,658,940) (3,971,072) (89,689,964) (177,476,998) 2, ,279 2,422 (29,985) (18,833) 4,711,489 7,894,939 (1,346,842) 25,468,674 3,954,689 (13,952,851) (69,328,015) (114,068) (233,076) (3,269) (2,170,922) (250,732) (5,144,926) (1,142,273) 4,597,421 7,661,863 (1,350,111) 23,297,752 3,703,957 (19,097,777) (70,470,288) 17,706, ,590,121 67,536,110 94,719,208 13,199, ,268, ,008, % 49.91% 24.70% 4.24% 59.31% 18.18% (20.42)% Unaudited Semi-Annual Report 35

38 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin Gold and Precious Metals Fund Franklin High Yield Fund Franklin Income Fund Franklin India Fund (USD) (USD) (USD) (USD) NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 107,261,361 5,131,295,651 3,631,326,483 1,854,259, ,261,361 5,131,295,651 3,631,326,483 1,854,259, , ,406 36,640,689 13,847, ,797,462 53,645, , ,738 69, , ,891,689 90,355,234 13,862, ,847 18,612,316 17,137,531 10,258, ,413 5,751,826 4,785,497 2,842, ,397 5,906 3,279 23,864 1,142, , ,327 5,667 78,528 53, ,162 8,862 12,146 10,992 10,101 3, , ,923 76,243 3,356 9,007 2, ,231 6,803,495 6,598,340 2,007,013 5,910,955 2,273, , ,620 2,174,278 47, , ,764 2,651, ,374 11, , , , ,710 40,463,037 37,247,807 17,636,084 (1,365) (74) (18,833) 983,710 40,461,672 37,247,733 17,617,251 (732,959) 114,430,017 53,107,501 (3,754,970) (8,765,538) 56,426,599 17,148,170 37,751,635 (1,801,626) (8,645,424) (3,651,475) (1,458,153) 61,433 (20,578) (82,655) (618,187) (1,749,468) (11,320,701) 162,128,537 66,047,442 30,789,044 (25,442,277) (474,629,870) (299,729,341) 244,606,321 (410,673) 260,152 (1,136,943) (526,937) (410,904) (1,585,440) (1,176,626) (635,307) (37,584,555) (313,826,621) (235,995,468) 274,233,121 52,060, ,007,301 2,082,341,093 1,842,196,097 (43,577,592) (1,493,245,430) (1,260,311,331) (698,385,243) (1,762,404) 637,305 1,825,865 8,483,173 (606,000,533) 822,667,067 1,145,636,719 (115,882,857) (55,965,980) (4,948,346) 8,483,173 (721,883,390) 766,701,087 1,140,688,373 78,159,979 4,095,585,640 4,162,032,102 3,269,181,097 (39.16)% 45.15% 23.17% 27.48% * This Fund was launched on September 15, Unaudited Semi-Annual Report

39 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin Japan Fund Franklin K2 Alternative Strategies Fund* Franklin MENA Fund Franklin Multi-Asset Income Fund Franklin Natural Resources Fund Franklin Real Return Fund Franklin Strategic Income Fund (JPY) (USD) (USD) (EUR) (USD) (USD) (USD) 25,330,401, ,268,016 31,687, ,339,427 9,149,693 1,498,222,686 25,330,401, ,268,016 31,687, ,339,427 9,149,693 1,498,222, ,035,387 35,303 4,095, ,313 1,438,258 18, ,557 71, ,812 44,741 29,313 28,170, ,442 2, ,728 1,839, , , ,035, ,903 4,099, ,125 1,482,999 55,312 31,066, ,949, ,841 2,390,647 97,245 1,074,407 35,801 5,878,378 31,871,362 36, ,890 43, ,494 12,477 1,929,500 39, ,361 3,916,197 2,369 78,003 3,033 52,288 2, ,013 1,502,627 15, ,097 1,523 4, , ,173 28,048 8,022 5,237 8,313 6,059 10, , ,668 1,239 8, , , , ,951 23,798,736 9, ,348 26, ,550 20,462 2,126,850 70,964 47, ,905 1,498,184 45,067 1,053,192 22,686,089 18, ,716 35, ,238 6,810 1,348,258 3,542,142 6,855 42,230 4,476 29,863 1, , ,383, ,663 4,242, ,901 2,070,633 85,694 13,307,169 (90) (61,947) (3,532) (1,105) (17,838) (1,173,481) 202,383, ,716 4,238, ,901 2,069,528 67,856 12,133,688 (39,348,116) (251,813) (139,757) 2,224 (586,529) (12,544) 18,933,271 2,364,767,861 (126,623) 8,485, ,896 (4,443,475) 3,839 5,802,429 (166,162) (4,991,786) 13,431 (1,135,297) (283,396) (29,539,646) 191,835 88,839 (1,041,988) 1,060,571 (187,310) (630,456) 9,510 (697,918) 34,010 (17,544) (3,761) (589,291) 2,324,789,289 (441,724) 2,655, ,561 (6,182,845) (295,862) (5,374,654) 594,284,197 2,005,397 (30,582,115) 2,052,205 (79,035,760) (415,053) (78,850,021) (12,789) (1,428,454) (23,746) (238,137) (62,135) 13,343,694 72,773 (145,005) (105,170) (314,208) (6,238) (1,565) (1,921,351) (34,758) (84,316) 4,069,024 (14,083) (1,419,757) 42,448 (235,605) (84,197) (9,593,580) (111) 2,923,142,510 1,423,573 (30,774,603) 2,410,982 (85,692,347) (858,812) (82,710,231) 14,501,421,015 70,421, ,970,462 21,545, ,025,238 2,607, ,991,950 (16,725,273,919) (9,549) (272,750,347) (3,706,454) (128,333,235) (1,824,332) (261,005,488) 301, (114,071) 116,610 (22,433) 1, ,164 (2,223,551,823) 70,412,619 (4,893,956) 17,955,840 (16,330,430) 784, ,506,626 (57,763,034) (2,783,590) (804,513) (110,216) (19,787) (20,171,600) (2,281,314,857) 70,412,619 (7,677,546) 17,151,327 (16,440,646) 765, ,335,026 25,972,229,166 71,836, ,815,867 51,249, ,206,434 9,055,907 1,716,847, % 8.49% % 20.49% 6.97% (23.26)% 33.83% Unaudited Semi-Annual Report 37

40 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin Technology Fund Franklin U.S. Dollar Liquid Reserve Fund Franklin U.S. Equity Fund Franklin U.S. Focus Fund (USD) (USD) (USD) (USD) NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 820,948, ,128, ,592,202 39,526, ,948, ,128, ,592,202 39,526,375 2,108,056 3,346, , , ,410 24,710 2,120, ,250 3,371, ,396 3,838, ,232 2,952, , , , ,189 43,501 1, ,784 16, ,581 9,013 9,017 3,702 7, ,578 6,774 8,167 6,796 27,224 11,139 20,014 1,248 6,667 1,068 1,375, ,173 1,002,182 56, ,217 54,647 79, ,150 39, , , , ,676 42, ,446 40,049 71,564 4,449 7,279,182 1,285,228 5,860, ,035 (2,342) (557,120) 7,276, ,108 5,860, ,035 (5,156,447) (612,858) (2,489,306) (154,639) 35,672,325 (467) 65,262,398 1,953,500 (1,234,609) (1,999,674) (32,314) (2,037) (3,843) 30,483,564 (613,325) 61,536,446 (204,656) 19,496,559 (25,249) (36,781,025) (405,679) (354,087) (577,267) (8,062) (357,373) (577,294) 49,972,061 (638,574) 24,043,961 (1,764,896) 372,647, ,167, ,582,715 24,089,449 (332,957,793) (413,108,528) (103,303,549) (25,180,084) (41) (320) ,690,026 70,058,585 54,278,846 (1,089,924) (205,497) (2,789) 39,690,026 70,058,585 54,073,349 (1,092,713) 910,610, ,548, ,709,512 36,668,766 (5.19)% N/A % (11.53)% 38 Unaudited Semi-Annual Report

41 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin U.S. Government Fund Franklin U.S. Low Duration Fund Franklin U.S. Opportunities Fund Franklin U.S. Small-Mid Cap Growth Fund Franklin U.S. Total Return Fund Franklin World Perspectives Fund Franklin Mutual Beacon Fund (USD) (USD) (USD) (USD) (USD) (USD) (USD) 905,721,951 1,652,992,798 4,670,970, ,387, ,124, ,122,633 1,169,070, ,721,951 1,652,992,798 4,670,970, ,387, ,124, ,122,633 1,169,070,336 11,233, ,620 6,580 2,423,054 8,268,863 16,365,112 14,322, ,821, ,769, ,909 2,547 1,278 5,903 2, ,209 16,365,112 14,322,972 11,236, ,694 1,830,787 2,426,133 10,310,423 2,996,657 5,295,019 20,425,859 1,227, ,921 1,619,695 5,425,261 1,150,552 1,836,765 5,037, , , ,787 1,372,225 1,416 2,493 6, , , , ,540 59,313 31,356 56, ,157 10,822 39,565 61,318 4,133 3,148 25,619 24,059 9,697 7,517 15,505 6,283 6,221 6,791 9,853 32,297 56, ,879 8,753 4,768 12,316 39, ,633 13,291 1,205,287 29, ,385 2,135,696 6,424, , , ,775 1,559, , , ,346 17, ,557 65, , , , , ,373 70, , , ,040 2,737, , , , , , , ,616 31,165 17,045 44, ,949 6,375,638 11,802,551 37,506,890 2,441,520 1,160,306 2,931,299 10,085,703 (60,000) (822,735) (23,583) (119,032) (14) 6,315,638 10,979,816 37,483,307 2,441,520 1,041,274 2,931,285 10,085,703 10,049,474 3,343,156 (26,247,187) (1,975,826) 789,513 (505,152) 224,720 1,844,117 (416,996) 149,688,658 13,071, ,293 12,243,617 11,545,797 (4,046,561) (4,919,316) (23,132,041) (29,155) 2,100,668 (765,373) (1,466,419) (254,037) 2,011,567 (180,368) 1,117,050 10,038 (55,486) (66,773) 1,220 (1,446,730) (2,626) (1,730) (46,147) (247,961) (125,070) 7,848,250 (4,025,109) 100,306,804 11,094,155 1,389,732 13,591,172 12,891,641 (335,709) (22,078,371) 35,589,926 (8,918,282) (2,526,070) (22,679,426) (24,617,653) (710,327) 21,679,616 (6,399,480) 2,740, ,605 6,089,872 (510,029) 58, ,028 (11,867) 286,768 10,985 14, (710,349) (1,058,894) (6,395,131) (10,564) (39,175) (2,663,794) 6,091,865 (5,703,827) 123,102,119 2,175,873 1,664,372 (9,025,824) (7,528,906) 513,947, ,523,981 1,023,235,153 66,249,948 51,412, ,058, ,020,334 (250,215,360) (147,877,560) (1,316,212,199) (86,907,677) (34,143,766) (97,715,481) (240,473,404) 289,455 9,986 (6,188) 7,597 5,165 (53,149) 264,021,190 12,656,407 (292,983,234) (20,657,729) 17,276,467 51,347,934 33,493,781 (10,176,848) (3,840,605) (81,767) (856,074) (949,210) (5,202,336) 253,844,342 8,815,802 (293,065,001) (20,657,729) 16,420,393 50,398,724 28,291,445 1,165,658,158 1,656,104,773 4,501,007, ,905, ,208, ,495,533 1,189,832, % 55.27% 57.75% 60.47% % % 8.93% Unaudited Semi-Annual Report 39

42 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Franklin Mutual Euroland Fund Franklin Mutual European Fund Franklin Mutual Global Discovery Fund Templeton Africa Fund (EUR) (EUR) (USD) (USD) NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 22,865,158 3,757,379,912 1,934,098, ,593,248 22,865,158 3,757,379,912 1,934,098, ,593,248 37,910 28,052,973 16,187,978 1,985,401 5, ,545 2,280,593 2, , ,459 36,067 43,291 29,423,935 18,504,638 1,987,794 79,346 15,432,962 7,970,924 1,057,536 19,075 3,842,631 2,005, , ,396 2, , , ,568 29,793 1, , ,437 96,145 3,668 9,072 11,022 8, ,190 61,089 4,825 20,217 4,868,471 2,458, , , , , ,742 48,639 1,931,325 1,427, ,299 2, , ,668 20, ,014 28,019,397 15,188,001 1,752,703 (5,472) (42) (154,114) 180,014 28,013,925 15,187,959 1,598,589 (136,723) 1,410,010 3,316, , ,245 79,064,892 16,879,492 (1,424,981) 120,410 (16,726,757) (4,404,205) (2,703) 7,224,179 (2,879,498) (157,096) 291,819 87,819, ,916 (5,597,077) (1,802,737) (180,046,103) (131,973,880) (14,927,424) 312,993 (3,554,253) (669,726) 1,062 2,263,576 (4,502,291) (664,180) (1,509,856) (89,650,043) (139,440,508) (21,858,407) 2,941, ,733, ,416,208 54,344,862 (11,122,100) (1,092,542,025) (532,769,558) (38,950,907) (999) (234,196) (211,697) 34,338 (8,181,991) (510,042,937) (218,565,047) 15,428,293 (117,549) (39,747,270) (12,762,417) (2,081,820) (8,299,540) (549,790,207) (231,327,464) 13,346,473 13,055,762 3,117,939,662 1,563,330, ,081, % 50.43% 8.02% 4.14% * This Fund was launched on November 17, Unaudited Semi-Annual Report

43 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Templeton ASEAN Fund* Templeton Asian Bond Fund Templeton Asian Dividend Fund Templeton Asian Growth Fund Templeton Asian Smaller Companies Fund Templeton BRIC Fund Templeton China Fund (USD) (USD) (USD) (USD) (USD) (USD) (USD) 2,032,463,169 5,659,011 12,681,269, ,932,482 1,214,667, ,254,225 2,032,463,169 5,659,011 12,681,269, ,932,482 1,214,667, ,254,225 6, , ,834,213 11,812,949 18,602,900 11,176,438 45,224,166 28, ,947 20,961 6,315 2,120 6,471 45,252, , ,020,160 11,833,910 18,609,215 11,178,558 8,088 7,140,273 35,188 77,557,008 6,655,243 9,283,254 7,392,680 1,324 2,275,818 7,291 15,091,044 1,356,698 1,473,920 1,131,141 3,071 19,717 1,588 1,802 1, , ,285, , , , , ,873, , ,024 72,501 2,208 13,946 7,447 22,571 7,758 9,957 8, , ,808 36,431 40,534 32,824 4,295 53,394 1,163 6,773 3,861,066 2,996 2,007,231 5,142 18,473,244 1,613,451 2,569,409 1,962, , ,638 87, , , , , ,945 74, ,700 1,789 3,303, , , , , ,602, , , ,258 15,231 17,261,613 59, ,841,841 10,432,197 14,867,230 11,410,308 (2,050) (1,470) (4,180) (4,787) (5,818) (23) (831) 13,181 17,260,143 55, ,837,054 10,426,379 14,867,207 11,409,477 (6,710) 27,992,154 82,059 39,183,106 1,407,531 3,742,008 (230,919) 310 7,161,437 77,839 68,628,289 14,448,216 33,497,070 2,768,210 (18,153,609) (49,107) (73,385,407) (2,630,037) (2,203) (2,324,514) 226 (611,513) (14,677) (218,046) (14,908) (8,603) 14,675, ,017 33,814,475 15,841,070 34,390,995 2,522,383 (18,420) (67,924,993) 36,181 (604,148,412) (11,115,404) (145,763,267) 8,766,792 (5,128,295) (5,641) (22,669,067) (472,161) (7,100,804) (8,713,254) (5,412) (22,650,814) (37,710) (471,501) 2,183 (6,523) (27,023) (74,198,401) 136,145 (615,653,818) 4,687,956 (112,315,934) 11,291,358 5,000, ,102,583 2,317,899 2,820,011, ,832, ,639, ,524,043 (430,499,044) (329,799) (2,633,725,564) (435,142,371) (210,538,652) (270,826,236) 34,443 29,912 (1,886,862) 1,058,667 (301,753) (97,173) 5,000,000 (29,362,018) 2,018, ,399, ,748,874 (96,200,813) (22,399,366) (29,233,471) (216,493) (76,393,806) (7,785,280) (5,084,399) (1,420,866) 5,000,000 (58,595,489) 1,801, ,005, ,963,594 (101,285,212) (23,820,232) 4,972,977 1,899,669,279 7,596,675 12,173,621,218 1,254,584,032 1,001,066, ,725,351 (6.87)% 11.57% 80.60% (14.07)% (42.65)% 56.02% (6.68)% Unaudited Semi-Annual Report 41

44 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Templeton Constrained Bond Fund Templeton Eastern Europe Fund Templeton Emerging s Fund Templeton Emerging s Balanced Fund (USD) (EUR) (USD) (USD) NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 10,458, ,133, ,777,690 78,614,839 10,458, ,133, ,777,690 78,614,839 3,074,174 8,497, , ,873 1,187,510 14, , ,873 3,241,860 8,511,900 1,798,418 23,253 2,493,158 6,652, ,482 11, ,729 1,071, , , , ,527 18,679 1, ,243 76,568 24,363 7,099 6,128 9,586 11, ,723 29,578 2, ,198 10, ,751 1,682, ,665 69, ,274 1,387 4, ,926 14,868 2,033 67, ,507 72,136 1, , ,783 17,480 53,804 4,106,027 10,564, ,707 (7,534) (10,434) (2,228) (64,645) 46,270 4,095,593 10,561, ,062 62,603 (853,733) (2,050,035) 930,356 (149,207) (21,897,452) 6,421,395 (1,288,893) 172,204 (590,053) (1,887,453) (52,779) 409 (20,266) (41,114) 32,821 (22,750,776) 3,761,041 (2,287,104) (852,612) (45,965,075) (72,871,044) (6,007,434) 721,787 (209,547) (471,643) (19,919) (23,567) (5,315) (19,132) (193,990) (490,798) (123,238) (68,734,983) (69,513,540) (9,280,546) 1,850,763 58,074,954 88,549,198 21,141,372 (102,487) (82,450,387) (148,178,392) (16,970,015) 321 (22,823) (67,579) (1,651) 1,748,597 (24,398,256) (59,696,773) 4,169,706 (55,097) (775,462) (2,694,858) (2,051,164) 1,693,500 (25,173,718) (62,391,631) 2,118,542 12,029, ,225, ,872,519 71,452, % 52.21% % 70.54% 42 Unaudited Semi-Annual Report

45 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Templeton Emerging s Bond Fund Templeton Emerging s Smaller Companies Fund Templeton Euroland Fund Templeton European Fund Templeton Frontier s Fund Templeton Global Fund Templeton Global (Euro) Fund (USD) (USD) (EUR) (EUR) (USD) (USD) (EUR) 6,868,866, ,683, ,379, ,386,721 2,020,766,694 1,845,441, ,373,636 6,868,866, ,683, ,379, ,386,721 2,020,766,694 1,845,441, ,373,636 3,209, ,676 2,102,578 13,280,674 10,864,923 4,716, ,900, ,499 22,287 8,264 6,406 3,858 20,395 9, ,003 1,262, , , , ,445,209 3,210,887 2,126,459 2,246,441 13,302,961 11,279,019 4,948,547 30,732,872 2,494, ,226 1,761,809 13,772,701 8,048,465 3,512,338 7,966, , , ,965 2,294,795 1,948, ,376 10, ,055 2,612 1,076 1,257,845 72,228 45,267 96, , , ,212 2,136, ,265 13,880 22,856 1,595, ,612 27,417 19,127 8,239 4,961 5,270 10,227 8,435 5, ,767 10,649 7,316 13,289 68,948 58,678 24,245 21,984 2,062 25,466 1,484 4,328,448 9,126, , , ,055 2,204,067 3,399,799 1,697,911 4,938,263 39,301 10, ,982 3, ,236 48,974 32, ,769 1,175, , ,336 67,426 1,250, ,262 53, ,726 38,178 30,290 52, , ,106 90,371 63,068,001 3,939,562 1,829,661 3,255,301 21,934,658 14,826,112 6,443,826 (23,348) (9,491) (104) 63,044,653 3,939,562 1,829,661 3,255,301 21,925,167 14,826,008 6,443, ,400,556 (728,675) 296,798 (1,008,860) (8,622,206) (3,546,989) (1,495,279) (36,693,461) 862,246 4,999,290 8,040,438 66,651,669 67,515,160 25,228,787 (69,422,822) (26,735,703) (541,876) (16,043,728) (1,651) (28,875) (63,483) (918,368) (735,126) 22,689 87,240, ,920 5,267,213 6,968,095 30,375,392 63,233,045 23,214,321 (750,399,707) 7,408,744 (19,374,514) (33,306,688) (213,506,215) (196,235,142) 12,460, ,874,276 (9,202,968) (115,013) 1,012,866 (22,641,755) 7,227 (2,794) (17,005) (9,195,534) (161,517) (142,514) (5,037) (582,918,812) 7,547,891 (14,110,095) (26,355,598) (201,529,325) (133,163,614) 35,417,057 1,697,034, ,604,577 35,287,259 63,314, ,018, ,671,651 27,195,088 (1,680,439,379) (107,958,257) (87,114,984) (177,100,376) (578,800,460) (400,980,506) (51,553,070) (438,343) 70,776 (38,234) (26,103) 10,556 2,610 (9,329) 16,157,163 48,717,096 (51,865,959) (113,812,111) (176,771,031) (114,306,245) (24,367,311) (207,551,233) (1,296,446) (4,548,366) (5,161,496) (28,830,341) (9,944,579) (2,999,380) (191,394,070) 47,420,650 (56,414,325) (118,973,607) (205,601,372) (124,250,824) (27,366,691) 6,094,553, ,651, ,855, ,057,516 1,613,635,997 1,588,027, ,424, % (22.18)% 4.89% 9.28% 47.36% 16.79% 17.62% Unaudited Semi-Annual Report 43

46 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Templeton Global Balanced Fund Templeton Global Bond Fund Templeton Global Bond (Euro) Fund Templeton Global Equity Income Fund (USD) (USD) (EUR) (USD) NET ASSETS AT THE BEGINNING OF THE PERIOD Currency translation adjustment INCOME Dividends ( of withholding taxes) (note 2(m)) Interest on bonds ( of withholding taxes) (note 2(m)) Bank interest Securities lending (notes 2(n), 13) Net interest income on swaps Sundry income TOTAL INCOME EXPENSES Investment management fees (note 14) Administration and transfer agency fees Directors fees Subscription tax (note 17) Custodian fees Audit fees Printing and publishing expenses Bank charges Net interest expenses on swaps Class A (dis) and Class A (acc) shares maintenance charges (note 18) Class AX (acc) shares maintenance charges (note 18) Class B (dis) and Class B (acc) shares maintenance and service charges (note 18) Class C (dis) and Class C (acc) shares maintenance and service charges (note 18) Class N (dis) and Class N (acc) shares maintenance charges (note 18) Other charges TOTAL EXPENSES Expenses reimbursement (note 19) NET EXPENSES NET PROFIT/(LOSS) FROM INVESTMENTS Net realised profit/(loss) on sale of investments Net realised profit/(loss) on forward foreign exchange contracts Net realised profit/(loss) on financial future contracts Net realised profit/(loss) on inflation swap contracts Net realised profit/(loss) on total return swap contracts Net realised profit/(loss) on credit default swap contracts Net realised profit/(loss) on option contracts Net realised profit/(loss) on foreign exchange transactions NET REALISED PROFIT/(LOSS) FOR THE PERIOD Change in unrealised appreciation/(depreciation) on: Investments Forward foreign exchange contracts Financial future contracts Interest rate swap contracts Inflation swap contracts Total return swap contracts Credit default swap contracts Option contracts Foreign exchange transactions Provision for capital gains tax NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF OPERATIONS MOVEMENT OF CAPITAL Issue of shares Redemption of shares Equalisation (note 22) Dividends paid/accumulated (note 23) NET INCREASE/(DECREASE) IN NET ASSETS AS A RESULT OF MOVEMENT IN CAPITAL NET ASSETS AT THE END OF THE PERIOD Portfolio Turnover Ratio (note 24) 1,383,224,749 38,668,873, ,924, ,798,942 1,383,224,749 38,668,873, ,924, ,798,942 6,755,210 4,761,618 4,341, ,407,940 13,730, ,651 2,288 5,641 7, ,333 6,493,264 86,538 91,589 11,284, ,922,855 13,819,087 4,859,845 5,419, ,577,756 2,102,080 1,930,410 1,664,642 43,609, , ,857 2,059 58, ,327 8,235, ,261 94,263 9,640 5,898, ,928 23,484 8,932 44,602 4,883 7,086 46,488 1,314,697 20,402 12,985 66, , ,419, ,806 2,729,607 34,362, , ,738 1,605, ,048 3,228, , ,480 5,807, ,380 28,022, , ,842 6,423, ,168 85,639 11,890, ,751,592 5,157,561 3,744,569 (164) (44,025) (83) (333,447) 11,890, ,707,567 5,157,478 3,411,122 (605,634) 420,215,288 8,661,609 1,448,723 16,359,976 (31,351,649) 9,628,541 (2,312,811) (9,321,463) (1,087,251,088) (8,864,080) (10,023) 58,327 (454,122) (266,562,298) 1,760,918 (15,788) 5,978,757 (964,949,747) 11,186,988 (831,572) (105,705,636) (3,278,640,417) (7,371,954) (37,311,266) (2,082,548) 2,247,099,869 (10,679,941) 3,222 (134,726,927) (3,950,708) (10,479) (3,116,462) (366,393,671) 1,998,431 (50,197) (103,711) (189) (104,925,889) (2,497,714,604) (8,817,373) (38,200,292) 295,747,109 6,588,042, ,137, ,474,454 (292,509,070) (5,093,175,383) (112,163,495) (101,506,455) 19,078 3,209,865 (133,743) 460,657 3,257,117 1,498,076,656 (160,048) 39,428,656 (5,925,301) (443,369,016) (16,263,768) (6,300,256) (2,668,184) 1,054,707,640 (16,423,816) 33,128,400 1,275,630,676 37,225,866, ,682, ,727, % 28.21% 11.91% (21.06)% 44 Unaudited Semi-Annual Report

47 Statement of Operations and Changes in Net Assets For the Period ended December 31, 2014 (continued) Templeton Global High Yield Fund Templeton Global Income Fund Templeton Global Smaller Companies Fund Templeton Global Total Return Fund Templeton Growth (Euro) Fund Templeton Korea Fund Templeton Latin America Fund Templeton Thailand Fund (USD) (USD) (USD) (USD) (EUR) (USD) (USD) (USD) 280,179,902 1,784,058, ,669,767 35,393,742,664 6,415,979,187 95,072,318 1,869,091, ,469, ,179,902 1,784,058, ,669,767 35,393,742,664 6,415,979,187 95,072,318 1,869,091, ,469,636 3,860 10,751,130 1,080, ,233 58,291,357 13,872 22,172,359 2,479,303 8,356,175 16,043, ,103, , ,402 10,913 2,299 6,612 1,859 49,692 41,316 37, ,535, ,581 8,402,182 26,831,917 1,082, ,248,534 59,104,543 16,171 22,178,971 2,481,162 1,113,282 8,044, , ,056,584 33,596, ,800 11,573,397 1,781, ,962 2,247, ,713 39,553,153 8,149, ,889 2,121, , , ,147 10, , , ,031 39,099 7,697,885 1,623,642 23, ,688 53,078 33, ,026 15,854 8,393, ,757 11, ,387 53,697 7,691 10,508 6,661 41,747 9,136 6,475 9,373 6,985 9,247 64,317 5,310 1,199, ,255 3,689 60,830 7, ,606 98,900 1,196 41, ,805 63,109, ,812 2,612, ,808 31,300,844 16,454, ,054 3,580, , ,069 16,618 2,390,646 4, ,603 65, , ,975, , ,257 2,154,742 35,562 35,127, ,403 27, ,532 75,404 61, , ,054 5,326,277 1,108,010 13, ,870 27,062 2,393,615 17,797,895 1,575, ,325,315 61,595,654 1,260,998 19,006,607 2,839,996 (30,239) (67,161) (1,469) (14) 2,393,615 17,767,656 1,575, ,258,154 61,595,654 1,260,998 19,005,138 2,839,982 6,008,567 9,064,261 (492,187) 608,990,380 (2,491,111) (1,244,827) 3,173,833 (358,820) 467,338 (27,097,385) (3,399,565) 40,304,852 98,861,445 5,404,405 16,732,933 7,924, ,167 4,305,987 (1,087,559,833) (3,662,713) (429,964) (761,944) (39,229) (134,171,130) 3,622,464 11,315 (703,805) (35,729) 6,382,108 (14,489,081) (3,930,981) (572,435,731) 99,992,798 4,170,893 15,540,248 7,530,182 (29,594,062) (125,144,997) (11,204,915) (2,951,296,542) 224,848,528 (23,826,676) (380,671,435) (891,085) 4,680,539 23,884,715 1,453,370,820 (1,323,811) 101,431 (838,477) (161,765,508) (15,760) (1,573,129) (8,215) (348,470,279) 228,107 52,491 (1,353,707) 1,972 (137) (631) (33,482) (18,445,881) (118,161,600) (15,144,111) (2,580,630,722) 325,069,433 (19,603,292) (367,808,705) 6,641,069 45,879, ,982,230 15,375,214 8,938,453, ,255,328 56,955, ,113, ,838,368 (65,933,691) (352,208,404) (18,546,091) (6,704,675,667) (278,397,706) (45,124,338) (390,793,223) (175,670,514) (38,862) 839, ,232,344 1,107,563 (206,352) (65,877) (20,093,397) 366,613,585 (3,170,097) 2,241,010, ,965,185 11,831,349 (100,886,105) (10,898,023) (5,887,167) (17,519,846) (4,360) (622,072,596) (40,355,620) (13,935,553) (972,306) (25,980,564) 349,093,739 (3,174,457) 1,618,937, ,609,565 11,831,349 (114,821,658) (11,870,329) 235,753,457 2,014,990, ,351,199 34,432,049,532 7,012,658,185 87,300,375 1,386,460, ,240, % 6.21% 92.06% 27.19% 31.26% 24.93% 22.84% (27.13)% Unaudited Semi-Annual Report 45

48 Statistical Information Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin Asia Credit Fund USD* A (acc) USD 1.50% 100, A (Mdis) USD 1.50% 100, A (Mdis) AUD-H1 (hedged) 1.50% 229, A (Mdis) SGD-H1 (hedged) 1.50% 259, I (acc) USD 1.00% 200, Franklin Asian Flex Cap Fund USD Ω A (acc) USD A (acc) SGD A (Ydis) USD B (acc) USD I (acc) USD N (acc) USD Franklin Biotechnology Discovery Fund USD A (acc) USD 1.81% 64,887, A (acc) CHF-H1 (hedged) 1.82% 241, A (acc) HKD 1.82% 1,278, A (acc) SGD 1.81% 1,292, B (acc) USD 3.11% 1,387, C (acc) USD 2.39% 779, I (acc) USD 0.97% 2,080, I (acc) EUR-H1 (hedged) 0.97% 344, N (acc) USD 2.56% 8,813, W (acc) USD 1.06% 2,283, Z (acc) GBP 1.30% 166, Franklin Brazil Opportunities Fund USD A (acc) USD 1.89% 498, A (acc) EUR-H1 (hedged) 1.91% 254, A (Qdis) USD 1.89% 638, A (Qdis) HKD 1.89% 155, I (acc) USD 1.03% N (acc) USD 2.39% 731, N (acc) EUR-H1 (hedged) 2.42% 522, N (Qdis) USD 2.39% 535, Franklin Euro Government Bond Fund EUR A (Ydis) EUR 1.04% 2,579, I (acc) EUR 0.63% 3,963, I (Qdis) EUR 0.61% 1,788, N (acc) EUR 1.58% 2,336, Franklin Euro High Yield Fund EUR A (acc) EUR 1.52% 6,923, A (Mdis) EUR 1.52% 80,641, A (Mdis) USD 1.52% 7,666, A (Ydis) EUR 1.52% 8,711, B (Mdis) EUR 2.93% 880, B (Mdis) USD 2.93% 2,377, I (acc) EUR 0.87% 5,500, I (Ydis) EUR 0.87% 288, N (acc) EUR 2.12% 12,127, W (acc) EUR 1.01% 23, Franklin Euro Liquid Reserve Fund EUR** A (acc) EUR 0.61% 9,416, A (Ydis) EUR 0.61% 3,923, I (acc) EUR 0.38% 833, N (acc) EUR 1.51% 1,182, Franklin Euro Short Duration Bond Fund EUR A (acc) EUR 0.90% 116, A (Ydis) EUR 0.90% 7, I (acc) EUR 0.55% 4,994, N (acc) EUR 1.45% 473, W (acc) EUR 0.60% 7, Franklin Euro Short-Term Money Fund EUR** A (acc) EUR 0.22% 31, , , , I (acc) EUR 0.22% 26, , , , Franklin Euroland Fund EUR*** A (acc) EUR 1.87% 325, A (acc) USD 1.87% 146, I (acc) EUR 1.00% 679, I (acc) USD 1.00% 545, N (acc) EUR 2.62% 198, Unaudited Semi-Annual Report

49 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin European Fund EUR*** A (acc) EUR 1.97% 115, A (Ydis) EUR 1.97% 105, I (acc) EUR 1.07% 137, N (acc) EUR 2.71% 141, Franklin European Corporate Bond Fund EUR A (acc) EUR 1.15% 2,203, A (Ydis) EUR 1.15% 887, I (acc) EUR 0.65% 4,247, I (Ydis) EUR 0.65% 40, N (acc) EUR 1.98% 1,585, N (Ydis) EUR 1.98% 1,337, W (acc) EUR 0.74% Franklin European Dividend Fund EUR A (acc) EUR 1.86% 832, A (Mdis) SGD-H1 (hedged)* 1.81% 63, A (Mdis) USD* 1.79% A (Ydis) EUR 1.85% 465, I (acc) EUR 0.98% 3,080, N (acc) EUR 2.61% 528, N (acc) PLN-H1 (hedged) 2.62% 2,231, Franklin European Growth Fund EUR A (acc) EUR 1.83% 34,051, A (acc) NOK-H1 (hedged) 1.84% 3,065, A (acc) SGD-H1 (hedged) 1.80% 3,717, A (acc) USD 1.80% 9,302, A (acc) USD-H1 (hedged) 1.81% 11,123, A (Ydis) GBP 1.83% 1,130, I (acc) EUR 0.96% 14,703, N (acc) EUR 2.58% 18,255, N (acc) USD 2.55% 4,440, W (acc) EUR 1.04% 240, X (acc) EUR 0.25% Franklin European Income Fund EUR* A (acc) EUR 1.70% 31, A (Mdis) EUR 1.70% 31, A (Mdis) SGD-H1 (hedged) 1.70% 258, A (Mdis) USD 1.70% 39, I (acc) EUR 0.90% 159, I (Mdis) EUR 0.90% 159, N (acc) EUR 2.20% 31, N (Mdis) EUR 2.20% 31, W (acc) EUR 1.10% 39, W (Mdis) EUR 1.10% 39, Z (acc) EUR 1.20% 39, Z (Mdis) EUR 1.20% 39, Franklin European Small-Mid Cap Growth Fund EUR A (acc) EUR 1.86% 6,876, A (acc) USD 1.86% 1,857, I (acc) EUR 1.01% 6,879, I (acc) USD 1.01% 1,707, N (acc) EUR 2.61% 1,156, W (acc) EUR 1.08% 900, X (acc) EUR 0.31% 3,935, Franklin European Total Return Fund EUR** A (acc) EUR 1.10% 4,326, A (acc) NOK-H1 (hedged) 1.35% 303, A (acc) SEK-H1 (hedged) 1.35% 354, A (Mdis) EUR 1.10% 3,401, A (Mdis) USD 1.10% 256, I (acc) EUR 0.83% 1,868, N (acc) EUR 1.80% 3,292, N (Mdis) EUR 1.80% 5,108, W (acc) EUR 0.85% Franklin GCC Bond Fund USD A (acc) USD 1.48% 700, A (Mdis) USD 1.48% 247, B (acc) USD 2.90% 21, B (Mdis) USD 2.90% I (acc) USD 0.88% 804, Unaudited Semi-Annual Report 47

50 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin Global Aggregate Bond Fund USD A (acc) USD 1.22% 10, A (acc) EUR 1.25% 98, A (acc) EUR-H1 (hedged) 1.25% 101, A (Mdis) USD 1.25% 38, A (Mdis) EUR 1.25% 177, A (Qdis) GBP-H1 (hedged) 1.25% 78, A (Ydis) EUR-H1 (hedged) 1.25% 87, I (acc) USD 0.60% 335, I (acc) CHF-H1 (hedged) 0.60% 98, I (acc) EUR 0.60% I (acc) EUR-H1 (hedged) 0.60% 188, I (Qdis) EUR-H1 (hedged) 0.60% 71, I (Qdis) GBP-H1 (hedged) 0.60% 62, N (acc) USD 1.95% 16, N (acc) EUR 1.95% 177, N (acc) EUR-H1 (hedged) 1.95% 69, W (acc) EUR 0.70% Franklin Global Aggregate Investment Grade Bond Fund USD A (acc) USD 1.25% 97, I (acc) USD 0.61% 3,967, Z (acc) USD 0.95% Franklin Global Allocation Fund USD A (acc) USD 1.85% 477, A (acc) CHF-H1 (hedged) 1.86% 261, A (acc) EUR 1.85% 198, A (acc) EUR-H1 (hedged) 1.86% 250, A (Qdis) GBP 1.85% 70, A (Ydis) EUR 1.85% 152, A (Ydis) EUR-H1 (hedged) 1.87% 227, I (acc) USD 1.01% 312, I (acc) EUR 1.01% 147, I (acc) EUR-H1 (hedged) 1.00% 208, I (Ydis) EUR-H1 (hedged) 1.02% 209, N (acc) USD 2.60% 628, N (acc) EUR 2.60% 645, N (acc) SEK-H1 (hedged) 2.63% 1,919, Z (acc) USD 1.35% 104, Z (acc) EUR 1.30% 2, Franklin Global Convertible Securities Fund USD A (acc) USD 1.58% 1,172, A (acc) CHF-H1 (hedged) 1.59% 61, A (acc) EUR 1.58% 268, A (acc) EUR-H1 (hedged) 1.60% 496, A (acc) HKD 1.57% 25, A (Ydis) EUR 1.58% 331, A (Ydis) EUR-H1 (hedged) 1.59% 510, I (acc) USD 0.86% 1,955, I (acc) EUR 0.88% 3,025, I (acc) EUR-H1 (hedged)* 0.86% 38, N (acc) USD 2.33% 1,708, N (acc) EUR 2.33% 785, W (acc) EUR-H1 (hedged) 0.96% 36, Franklin Global Corporate High Yield Fund USD I (acc) USD 0.76% 2,168, I (acc) EUR 0.76% 75, I (acc) EUR-H1 (hedged) 0.76% 151, I (acc) GBP 0.76% 63, I (acc) GBP-H1 (hedged) 0.76% 63, I (Ydis) EUR 0.76% 75, I (Ydis) EUR-H1 (hedged) 0.76% 75, Franklin Global Equity Strategies Fund USD A (acc) USD 2.17% 1,004, A (acc) EUR 2.17% 4,639, A (acc) EUR-H1 (hedged) 2.19% 1,023, A (Ydis) EUR 2.17% 371, W (acc) EUR 1.11% Franklin Global Fundamental Strategies Fund USD A (acc) USD 1.84% 16,450, A (acc) EUR 1.84% 46,847, A (acc) EUR-H1 (hedged) 1.87% 21,397, A (Ydis) EUR 1.84% 35,222, Unaudited Semi-Annual Report

51 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin Global Fundamental Strategies Fund USD (continued) I (acc) EUR 0.98% 6,558, N (acc) USD 2.60% 1,017, N (acc) EUR 2.60% 978, N (acc) EUR-H1 (hedged) 2.62% 17,183, N (acc) PLN-H1 (hedged) 2.62% 12,141, N (Ydis) EUR 2.58% 2,368, Franklin Global Government Bond Fund USD A (acc) USD 1.20% 104, A (Mdis) USD 1.20% 12, A (Mdis) EUR 1.20% 58, I (acc) USD 0.66% 498, I (acc) EUR 0.66% 562, N (acc) USD 1.90% 125, N (Mdis) USD 1.90% 118, Franklin Global Growth Fund USD A (acc) USD 1.85% 2,431, A (acc) EUR 1.87% 156, A (acc) EUR-H1 (hedged) 1.86% 98, A (acc) GBP 1.85% 34, A (acc) SGD 1.85% 60, I (acc) USD 0.97% 4,875, I (acc) EUR 0.97% 3,085, I (acc) EUR-H1 (hedged) 0.96% 405, I (acc) GBP 0.98% N (acc) USD 2.59% 1,527, N (acc) EUR 2.60% 417, W (acc) USD 1.08% 18, W (acc) EUR 1.10% 20, Z (acc) USD 1.35% 89, Franklin Global Growth and Value Fund USD A (acc) USD 1.86% 2,228, B (acc) USD 3.17% 103, C (acc) USD 2.44% 166, I (acc) USD 1.08% 20, N (acc) USD 2.62% 240, Franklin Global High Income Bond Fund USD A (acc) USD 1.53% 466, A (acc) EUR 1.53% 1,875, A (acc) HKD 1.54% 212, A (Mdis) USD 1.53% 2,645, A (Mdis) HKD 1.53% 77, A (Mdis) SGD 1.53% 15, A (Mdis) SGD-H1 (hedged) 1.53% 88, I (acc) USD 0.87% 58, I (acc) EUR 0.88% 421, N (acc) EUR 2.13% 1,862, N (Mdis) USD* 2.08% W (acc) EUR 0.96% Franklin Global Listed Infrastructure Fund USD A (acc) USD 1.85% 156, A (acc) EUR 1.85% 93, A (Mdis) SGD-H1 (hedged) 1.85% 123, A (Qdis) USD 1.85% 83, A (Ydis) EUR 1.85% 29, I (acc) USD 1.05% 150, I (acc) EUR 1.05% 113, I (acc) GBP-H1 (hedged) 1.05% 64, N (acc) EUR 2.60% 180, W (acc) GBP 1.10% W (Qdis) GBP 1.10% Franklin Global Real Estate Fund USD A (acc) USD 1.85% 9,868, A (acc) EUR-H1 (hedged) 1.87% 831, A (Qdis) USD 1.85% 4,125, A (Qdis) SGD 1.84% 220, A (Ydis) EUR-H1 (hedged) 1.87% 317, B (Qdis) USD 3.16% 1,446, C (Qdis) USD 2.43% 4,290, I (acc) USD 0.97% 9,161, N (acc) USD 2.60% 6,346, N (acc) EUR-H1 (hedged) 2.62% 470, Unaudited Semi-Annual Report 49

52 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin Global Real Estate Fund USD (continued) W (Qdis) USD 1.09% 27, Z (acc) USD* 1.56% 3, Franklin Global Small-Mid Cap Growth Fund USD A (acc) USD 1.87% 7,280, B (acc) USD 3.18% 103, I (acc) USD 1.02% 4,053, N (acc) USD 2.62% 1,201, W (acc) USD 1.08% 810, X (acc) USD 0.31% Franklin Gold and Precious Metals Fund USD A (acc) USD 1.90% 5,699, A (acc) CHF-H1 (hedged) 1.92% 1,955, A (acc) EUR 1.90% 3,708, A (acc) EUR-H1 (hedged) 1.92% 1,606, A (acc) HKD 1.90% 2,053, A (acc) SEK-H1 (hedged) Ω A (acc) SGD 1.90% 1,297, A (Ydis) EUR 1.90% 93, A (Ydis) EUR-H1 (hedged) 1.92% 124, I (acc) USD 0.99% 87, I (Ydis) USD 1.04% 41, N (acc) USD 2.66% 1,082, N (acc) EUR 2.65% 2,986, Franklin High Yield Fund USD A (acc) USD 1.53% 17,147, A (Mdis) USD 1.53% 379,765, A (Mdis) AUD-H1 (hedged) 1.55% 1,645, A (Mdis) SGD-H1 (hedged) 1.53% 6,370, B (Mdis) USD 2.94% 82,267, C (acc) USD 2.21% 3,086, I (acc) USD 0.86% 11,355, I (acc) EUR-H1 (hedged) 0.87% 2,819, I (Mdis) USD 0.87% 14,512, N (acc) USD 2.13% 7,489, N (Mdis) USD 2.12% 3,814, X (acc) USD 0.25% Z (Mdis) USD 1.12% 1,320, Franklin Income Fund USD A (Mdis) USD 1.67% 203,865, A (Mdis) EUR-H1 (hedged) 1.68% 375, A (Mdis) SGD-H1 (hedged) 1.68% 3,883, B (Mdis) USD 2.98% 23,627, C (acc) USD 2.25% 10,622, C (Mdis) USD 2.25% 10,551, I (acc) USD 0.87% 10,658, I (Ydis) EUR-H1 (hedged) 0.85% 36, N (acc) USD 2.17% 25,521, N (acc) EUR-H1 (hedged)* 2.13% 40, N (Mdis) EUR-H1 (hedged) 2.18% 2,614, Z (acc) USD 1.17% 3,578, Z (Mdis) USD 1.17% 2,994, Franklin India Fund USD A (acc) USD 1.88% 20,492, A (acc) EUR 1.87% 4,939, A (acc) HKD 1.90% 43, A (acc) SEK 1.88% 9,640, A (acc) SGD 1.87% 1,229, A (Ydis) EUR 1.88% 280, A (Ydis) GBP 1.88% 364, B (acc) USD 3.19% 805, C (acc) USD 2.46% 333, I (acc) USD 1.02% 59,844, I (acc) EUR 1.01% 471, I (Ydis) EUR 1.11% 2, N (acc) USD 2.63% 2,486, N (acc) EUR 2.63% 1,926, N (acc) PLN-H1 (hedged) 2.66% 3,562, S (acc) USD 0.88% 2,225, W (acc) USD 1.13% 372, W (acc) EUR 1.12% 92, W (acc) GBP 1.12% 1,190, Unaudited Semi-Annual Report

53 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin India Fund USD (continued) X (acc) USD 0.30% Z (acc) USD 1.38% 377, Z (acc) GBP 1.38% 53, Franklin Japan Fund JPY A (acc) JPY 1.86% 4,435, A (acc) EUR 1.88% 690, A (acc) USD 1.86% 6,685, A (acc) SGD Ω A (Ydis) EUR 1.88% 52, A (Ydis) GBP 1.86% 23, C (acc) USD 2.44% 327, I (acc) EUR 0.98% 1,894, I (acc) USD 0.98% 10,980, N (acc) EUR 2.61% 1,753, N (acc) USD 2.61% 1,462, W (acc) EUR 1.02% 4, Franklin K2 Alternative Strategies Fund USD* A (Acc) USD 2.75% 430, A (Acc) EUR-H1 (hedged) 2.74% 96, A (Acc) SGD-H1 (hedged) 2.73% 126, A (Ydis) USD 2.73% 100, A (Ydis) EUR 2.73% 77, I (Acc) USD 1.90% 3,418, I (Acc) EUR-H1 (hedged) 1.90% 77, I (Acc) GBP-H1 (hedged) 1.90% 63, I (Acc) JPY 1.90% 578, , I (Acc) JPY-H1 (hedged) 1.89% 107, , N (Acc) USD 3.50% 686, N (Acc) EUR-H1 (hedged) 3.48% 78, W (Acc) EUR 2.04% 79, W (Acc) GBP-H1 (hedged) 2.03% 61, Z (Acc) USD 2.23% 100, Z (Acc) GBP-H1 (hedged) 2.23% 61, Franklin MENA Fund USD A (acc) USD 2.53% 15,534, A (acc) EUR 2.53% 5,482, A (acc) EUR-H1 (hedged) 2.55% 2,959, A (Ydis) USD 2.53% 192, A (Ydis) GBP 2.53% 108, B (acc) USD 3.84% 1,303, I (acc) USD 1.50% 2,680, I (acc) EUR 1.50% 1,930, I (Ydis) USD 1.64% 7, N (acc) USD 3.03% 3,469, N (acc) EUR-H1 (hedged) 3.05% 4,439, W (acc) EUR 1.51% 1, X (acc) USD 0.30% 195, Franklin Multi-Asset Income Fund EUR A (acc) EUR 1.41% 366, A (Qdis) EUR 1.41% 1,072, A (Ydis) EUR 1.41% 144, I (acc) EUR 0.69% 1,009, I (Qdis) EUR 0.69% 1,004, N (acc) EUR 1.91% 1,138, Franklin Natural Resources Fund USD A (acc) USD 1.86% 11,299, A (acc) CHF-H1 (hedged) 1.89% 54, A (acc) EUR 1.86% 2,553, A (Ydis) USD 1.86% 561, A (Ydis) EUR-H1 (hedged) 1.89% 107, B (acc) USD 3.17% 444, C (acc) USD 2.44% 1,014, I (acc) USD 0.98% 1,680, I (acc) EUR 0.98% 2,716, N (acc) EUR 2.61% 2,077, N (acc) PLN-H1 (hedged) 2.62% 1,496, Franklin Real Return Fund USD A (acc) USD 1.35% 494, A (Ydis) EUR-H1 (hedged) 1.35% 215, N (acc) USD 1.85% 123, Unaudited Semi-Annual Report 51

54 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin Strategic Income Fund USD A (acc) USD 1.35% 23,956, A (acc) EUR 1.35% 4,487, A (acc) EUR-H1 (hedged) 1.35% 3,762, A (Mdis) USD 1.35% 31,381, A (Mdis) AUD-H1 (hedged) 1.35% 195, A (Mdis) EUR 1.35% 5,193, A (Mdis) EUR-H1 (hedged) 1.35% 3,260, B (Mdis) USD 2.89% 2,645, C (Mdis) USD 1.95% 17,493, I (acc) USD 0.83% 2,018, I (acc) EUR-H1 (hedged) 0.83% 16,325, I (Ydis) USD 0.83% 110, N (acc) USD 2.08% 19,783, N (acc) EUR-H1 (hedged) 2.10% 3,180, N (Mdis) EUR-H1 (hedged) 2.10% 1,203, Z (acc) USD 1.08% 3,033, Franklin Technology Fund USD A (acc) USD 1.82% 45,870, A (acc) EUR 1.82% 7,703, A (acc) HKD 1.82% 34, B (acc) USD 3.13% 2,427, C (acc) USD 2.40% 1,065, I (acc) USD 0.96% 4,159, I (acc) EUR 0.96% 4,070, I (acc) GBP 0.94% N (acc) USD 2.57% 6,039, N (acc) EUR 2.57% 3,734, W (acc) USD 1.05% 787, W (acc) EUR 1.04% 17, X (acc) USD 0.25% 4,040, Z (acc) USD 1.31% 478, Franklin U.S. Dollar Liquid Reserve Fund USD A (acc) USD 0.25% 14,291, A (Mdis) USD 0.25% 12,135, B (Mdis) USD 1.33% 1,083, C (acc) USD 1.24% 596, I (acc) USD 0.24% 13, N (acc) USD 1.15% 4,904, Franklin U.S. Equity Fund USD A (acc) USD 1.82% 16,976, A (acc) EUR 1.82% 574, A (acc) EUR-H1 (hedged) 1.84% 549, A (acc) HKD 1.83% 1,049, A (acc) SGD Ω B (acc) USD 3.13% 518, C (acc) USD 2.41% 2,605, I (acc) USD 0.98% 1,928, I (acc) EUR 0.96% 672, I (acc) EUR-H1 (hedged) 0.98% 91, N (acc) USD 2.57% 3,977, N (acc) EUR 2.57% 981, W (acc) EUR 1.05% 9, X (acc) USD 0.24% Franklin U.S. Focus Fund USD A (acc) USD 1.87% 1,092, A (acc) EUR-H1 (hedged) 1.90% 216, I (acc) USD 1.01% 451, I (acc) EUR-H1 (hedged) 1.01% 171, N (acc) EUR-H1 (hedged) 2.64% 581, Franklin U.S. Government Fund USD A (acc) USD 1.25% 13,395, A (acc) HKD 1.28% 543, A (Mdis) USD 1.27% 59,447, A (Mdis) HKD 1.27% 291, A (Mdis) SGD-H1 (hedged) Ω AX (acc) USD 1.47% 5,557, B (acc) USD 2.52% 234, B (Mdis) USD 2.53% 2,887, C (acc) USD 2.05% 2,509, I (acc) USD 0.60% 2,375, I (acc) EUR-H1 (hedged) 0.60% 2,811, I (Mdis) USD 0.60% 15,147, Unaudited Semi-Annual Report

55 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin U.S. Government Fund USD (continued) I (Mdis) JPY-H1 (hedged) 0.60% 79, N (acc) USD 1.97% 3,380, N (Mdis) USD 1.97% 2,678, W (acc) USD 0.81% 91, W (Mdis) USD 0.80% 18, X (acc) USD 0.26% Z (acc) USD 0.97% 597, Z (Mdis) USD 0.97% 459, Franklin U.S. Low Duration Fund USD A (acc) USD 1.15% 14,318, A (Mdis) USD 1.15% 127,680, AX (acc) USD 1.35% 3,359, B (Mdis) USD 2.40% 208, C (Mdis) USD 2.04% 2,719, I (acc) USD 0.67% 4,984, I (acc) EUR-H1 (hedged) 0.66% 3,658, N (Mdis) USD 1.85% 6,631, Franklin U.S. Opportunities Fund USD A (acc) USD 1.81% 182,591, A (acc) CHF-H1 (hedged) 1.83% 672, A (acc) EUR 1.81% 13,015, A (acc) EUR-H1 (hedged) 1.83% 13,207, A (acc) HKD 1.81% 4,504, A (acc) NOK-H1 (hedged) 1.81% 1,914, A (acc) RMB-H1 (hedged)* 1.77% 61, A (acc) SEK-H1 (hedged) 1.84% 2,964, A (acc) SGD 1.81% 5,531, A (acc) SGD-H1 (hedged) 1.82% 2,390, A (Ydis) EUR 1.81% 8,733, A (Ydis) GBP 1.81% 1,022, B (acc) USD 3.13% 5,030, C (acc) USD 2.39% 8,284, I (acc) USD 0.96% 21,541, I (acc) EUR 0.96% 8,833, I (acc) EUR-H1 (hedged) 0.97% 835, I (acc) GBP 0.96% N (acc) USD 2.56% 13,773, N (acc) EUR 2.56% 4,013, N (acc) EUR-H1 (hedged) 2.59% 352, N (acc) PLN-H1 (hedged) 2.59% 4,529, W (acc) USD 1.04% 10,549, W (acc) EUR 1.05% 4,845, X (Acc) USD 0.24% X (Ydis) USD 0.24% 1,656, Z (acc) USD 1.31% 1,626, Franklin U.S. Small-Mid Cap Growth Fund USD A (acc) USD 1.84% 8,592, B (acc) USD 3.15% 305, C (acc) USD 2.41% 1,502, I (acc) USD 0.99% 1,335, N (acc) USD 2.58% 1,614, Franklin U.S. Total Return Fund USD A (acc) USD 1.20% 3,386, A (Mdis) USD 1.20% 3,402, C (Mdis) USD 1.98% 1,192, I (acc) USD 0.83% 55, I (Mdis) USD 0.82% 618, N (Mdis) USD 1.90% 3,429, Franklin World Perspectives Fund USD A (acc) USD 1.86% 4,565, A (acc) EUR 1.86% 2,592, A (Ydis) GBP 1.86% 23, I (acc) USD 0.98% 2,243, I (acc) EUR 0.97% 4,560, N (acc) USD 2.61% 3,366, W (acc) GBP 1.05% 2, Z (acc) USD* 1.27% 3, Z (acc) GBP 1.29% 2, Franklin Mutual Beacon Fund USD A (acc) USD 1.82% 7,914, A (acc) EUR 1.82% 682, Unaudited Semi-Annual Report 53

56 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Franklin Mutual Beacon Fund USD (continued) A (acc) EUR-H1 (hedged) 1.84% 183, A (acc) SGD 1.82% 488, A (Ydis) USD 1.82% 231, B (acc) USD 3.13% 337, C (acc) USD 2.40% 2,210, I (acc) USD 0.97% 11,174, I (acc) EUR 0.96% 5,895, I (acc) EUR-H1 (hedged) 0.98% 403, N (acc) USD 2.57% 2,350, N (acc) EUR 2.56% 1,465, N (acc) EUR-H1 (hedged) 2.60% 386, Z (acc) USD 1.32% 520, Franklin Mutual Euroland Fund EUR A (acc) EUR 1.89% 352, N (acc) EUR 2.65% 478, Franklin Mutual European Fund EUR A (acc) EUR 1.82% 46,816, A (acc) CHF-H1 (hedged) Ω A (acc) CZK-H1 (hedged) 1.82% 2,076, A (acc) RMB-H1 (hedged)* 1.77% 60, A (acc) SEK 1.83% 26,790, A (acc) SGD 1.82% 89, A (acc) USD 1.83% 24,229, A (acc) USD-H1 (hedged)* 1.80% 2,390, A (Ydis) EUR 1.83% 2,391, A (Ydis) GBP 1.83% 270, B (acc) USD 3.13% 1,330, B (Ydis) EUR 3.13% 27, C (acc) EUR 2.40% 61, C (acc) USD 2.41% 1,930, I (acc) EUR 0.97% 49,206, I (Ydis) EUR 1.00% 8, N (acc) EUR 2.57% 12,155, N (acc) USD 2.57% 1,874, N (acc) USD-H1 (hedged)* 2.53% 110, W (acc) EUR 1.04% 1,763, W (Ydis) EUR 1.02% 35, X (acc) EUR 0.27% Z (acc) EUR 1.33% 62, Z (acc) USD 1.33% 1,870, Z (acc) USD-H1 (hedged)* 1.28% 75, Franklin Mutual Global Discovery Fund USD A (acc) USD 1.83% 27,835, A (acc) EUR 1.83% 11,093, A (acc) EUR-H2 (hedged) 1.85% 4,509, A (acc) CHF-H1 (hedged) Ω A (Ydis) EUR 1.83% 1,715, A (Ydis) GBP 1.83% 147, B (acc) USD 3.14% 701, C (acc) USD 2.41% 4,203, I (acc) USD 0.98% 10,906, I (acc) EUR 0.98% 3,056, I (acc) EUR-H2 (hedged) 0.98% 3,999, N (acc) USD 2.58% 3,138, N (acc) EUR 2.58% 4,759, N (acc) EUR-H2 (hedged) 2.60% 4,300, W (acc) EUR 1.08% 77, X (acc) EUR 0.28% 3,488, Z (acc) USD 1.33% 1,583, Templeton Africa Fund USD A (acc) USD 2.40% 2,400, A (acc) CHF-H1 (hedged) 2.40% 61, A (acc) EUR 2.40% 1,698, A (acc) EUR-H1 (hedged) 2.40% 990, A (acc) GBP 2.40% 74, A (acc) SGD 2.40% 35, A (Ydis) EUR 2.40% 349, A (Ydis) EUR-H1 (hedged) 2.40% 153, I (acc) USD 1.40% 190, I (acc) EUR 1.40% 2,283, N (acc) EUR-H1 (hedged) 2.90% 1,412, W (acc) EUR 1.60% 3, W (acc) GBP 1.60% 83, Unaudited Semi-Annual Report

57 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton ASEAN Fund USD* A (acc) USD 2.20% 165, A (acc) SGD 2.20% 220, A (Ydis) USD 2.20% 165, Templeton Asian Bond Fund USD A (acc) USD 1.39% 29,100, A (acc) CHF-H1 (hedged) 1.41% 5,625, A (acc) EUR 1.39% 7,128, A (acc) EUR-H1 (hedged) 1.41% 9,462, A (Mdis) USD 1.39% 16,409, A (Mdis) AUD-H1 (hedged) 1.41% 180, A (Mdis) EUR 1.39% 3,669, A (Mdis) SGD 1.39% 705, A (Mdis) SGD-H1 (hedged) 1.40% 1,786, B (Mdis) USD 2.90% 905, C (Mdis) USD 2.17% 3,117, I (acc) USD 0.85% 11,525, I (acc) CHF-H1 (hedged) 0.86% 1,706, I (acc) EUR 0.85% 7,009, I (acc) EUR-H1 (hedged) 0.86% 4,064, I (Mdis) EUR 0.85% 2,273, N (acc) USD 2.09% 2,151, N (acc) EUR 2.09% 1,549, N (Mdis) USD 2.09% 2,209, S (acc) USD 0.74% S (acc) CHF-H1 (hedged) 0.70% 53, W (acc) EUR-H1 (hedged) 1.00% 109, W (Mdis) USD 0.99% 5,620, X (Ydis) USD 0.28% 159, Z (acc) USD 1.09% 1,324, Templeton Asian Dividend Fund USD A (acc) USD 2.25% 75, A (acc) EUR 2.25% 20, A (Mdis) USD 2.25% 71, A (Mdis) SGD-H1 (hedged) 2.25% 124, A (Qdis) EUR 2.25% 17, A (Ydis) EUR 2.25% 1, I (acc) USD 1.30% 198, I (acc) EUR 1.30% 151, N (acc) EUR 2.75% 44, W (acc) GBP 1.40% 3, W (Qdis) GBP 1.40% Templeton Asian Growth Fund USD A (acc) USD 2.21% 84,160, A (acc) CHF-H1 (hedged) 2.23% 3,335, A (acc) CZK-H1 (hedged) 2.23% 1,317, A (acc) EUR 2.21% 23,616, A (acc) EUR-H1 (hedged) 2.24% 11,568, A (acc) HKD 2.21% 36,875, A (acc) RMB-H1 (hedged) 2.21% 344, A (acc) SGD 2.22% 12,052, A (acc) SGD-H1 (hedged) 2.23% 664, A (Ydis) USD 2.21% 78,073, A (Ydis) EUR 2.22% 6,304, A (Ydis) GBP 2.22% 926, B (acc) USD 3.53% 5,024, C (acc) USD 2.80% 2,921, I (acc) USD 1.21% 104,065, I (acc) CHF-H1 (hedged) 1.23% 639, I (acc) EUR 1.21% 12,139, I (acc) EUR-H1 (hedged) 1.24% 543, I (Ydis) EUR-H2 (hedged) 1.23% 10,212, N (acc) USD 2.71% 7,202, N (acc) EUR 2.72% 3,047, N (acc) EUR-H1 (hedged) 2.74% 1,873, N (acc) HUF 2.72% 2,264, N (acc) PLN-H1 (hedged) 2.75% 14,657, W (acc) USD 1.34% 2,381, W (acc) EUR 1.34% 2,204, W (acc) GBP 1.34% 212, W (Ydis) EUR 1.35% 23, X (acc) USD 0.31% X (Ydis) USD 0.29% Z (acc) USD 1.71% 2,509, Unaudited Semi-Annual Report 55

58 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton Asian Growth Fund USD (continued) Z (acc) GBP 1.70% 5, Z (Ydis) USD 1.72% 361, Z (Ydis) EUR-H1 (hedged) 1.73% 74, Templeton Asian Smaller Companies Fund USD A (acc) USD 2.23% 9,508, A (acc) EUR 2.22% 4,334, A (acc) SGD 2.23% 198, A (Ydis) USD 2.23% 3,289, B (acc) USD 3.54% 402, I (acc) USD 1.20% 6,325, I (acc) EUR 1.20% 3,691, N (acc) USD 2.73% 1,557, N (acc) EUR 2.73% 387, W (acc) USD 1.32% 330, W (acc) EUR 1.32% 908, X (Ydis) USD 0.28% Templeton BRIC Fund USD A (acc) USD 2.46% 55,434, A (acc) EUR 2.46% 6,833, A (acc) EUR-H1 (hedged) 2.48% 1,353, A (acc) HKD 2.46% 65, A (acc) SGD Ω A (Ydis) EUR 2.46% 81, A (Ydis) GBP 2.46% 116, B (acc) USD 3.77% 1,253, C (acc) USD 3.04% 1,471, I (acc) USD 1.39% 176, I (acc) EUR 1.39% 118, N (acc) USD 2.96% 1,513, N (acc) EUR 2.96% 2,934, N (acc) PLN-H1 (hedged) 3.00% 2,232, W (acc) GBP 1.60% 16, Z (acc) USD 1.96% 156, Templeton China Fund USD A (acc) USD 2.44% 31,772, A (acc) HKD 2.44% 222, A (acc) SGD 2.44% 1,965, A (Ydis) EUR 2.44% 1,056, A (Ydis) GBP 2.44% 211, B (acc) USD 3.75% 1,658, C (acc) USD 3.02% 842, I (acc) USD 1.38% 2,022, I (Ydis) GBP 1.38% 198, N (acc) USD 2.93% 1,949, W (acc) USD 1.55% 251, W (acc) EUR 1.54% W (acc) GBP 1.55% 76, W (Ydis) EUR 1.54% 61, X (acc) USD 0.27% X (acc) HKD 0.26% 12,526, Z (acc) USD 1.94% 619, Z (Ydis) EUR Ω Templeton Constrained Bond Fund USD A (acc) USD 1.20% 5, A (Mdis) USD 1.20% 1, A (Mdis) EUR 1.20% 76, I (acc) USD 0.66% 498, I (acc) EUR 0.66% 368, N (acc) USD 1.90% 53, N (Mdis) USD 1.90% 27, Templeton Eastern Europe Fund EUR A (acc) EUR 2.55% 9,724, A (acc) SGD Ω A (acc) USD 2.55% 2,986, A (Ydis) EUR 2.55% 67, A (Ydis) GBP 2.55% 43, B (acc) USD 3.87% 1,343, B (Ydis) EUR 3.86% 151, C (acc) USD 3.12% 95, I (acc) EUR 1.40% 2,021, N (acc) EUR 3.05% 657, W (acc) EUR 1.67% 42, Unaudited Semi-Annual Report

59 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton Eastern Europe Fund EUR (continued) X (acc) EUR 0.30% 782, Z (acc) USD 2.06% 73, Templeton Emerging s Fund USD A (acc) USD 2.47% 9,434, A (acc) EUR-H1 (hedged) 2.49% 364, A (acc) HKD 2.46% 13, A (acc) SGD 2.47% 4,134, A (Ydis) USD 2.47% 7,968, B (acc) USD 3.78% 668, C (acc) USD 3.05% 1,052, I (acc) USD 1.38% 2,254, I (acc) EUR-H1 (hedged) 1.41% 50, N (acc) USD 2.97% 2,008, N (acc) EUR 2.97% 1,204, W (acc) USD 1.61% 107, Z (acc) USD 1.97% 57, Templeton Emerging s Balanced Fund USD A (acc) USD 2.10% 1,568, A (acc) CHF-H1 (hedged) Ω A (acc) EUR 2.10% 814, A (acc) EUR-H1 (hedged) 2.11% 341, A (Qdis) USD 2.10% 562, A (Qdis) GBP 2.11% 2, A (Qdis) GBP-H1 (hedged) Ω A (Qdis) SGD-H1 (hedged) 2.11% 131, A (Ydis) EUR 2.10% 869, A (Ydis) EUR-H1 (hedged) 2.11% 574, B (Mdis) USD 3.62% 34, C (acc) USD 2.86% 287, I (acc) USD 1.24% I (acc) EUR 1.25% 280, I (acc) EUR-H1 (hedged) 1.27% 54, I (Ydis) EUR-H1 (hedged) 1.25% 47, N (acc) USD 2.55% 835, N (acc) EUR-H1 (hedged) 2.55% 609, W (Qdis) GBP 1.40% 5, X (acc) USD 0.30% 38, Z (acc) USD 1.78% 364, Z (Qdis) GBP 1.60% Templeton Emerging s Bond Fund USD A (acc) USD 1.89% 27,212, A (acc) CHF-H1 (hedged) 1.91% 1,786, A (acc) EUR-H1 (hedged) 1.90% 2,208, A (acc) NOK-H1 (hedged) 1.93% 1,535, A (acc) SEK-H1 (hedged) 1.92% 6,267, A (Mdis) USD 1.89% 102,158, A (Mdis) AUD-H1 (hedged) 1.91% 2,120, A (Mdis) HKD 1.89% 1,203, A (Mdis) SGD-H1 (hedged) 1.89% 1,757, A (Qdis) USD 1.89% 63,270, A (Qdis) EUR 1.89% 27,991, A (Qdis) GBP 1.89% 780, A (Ydis) EUR-H1 (hedged) 1.91% 14,796, B (Mdis) USD 3.20% 28,780, B (Qdis) USD 3.20% 11,158, C (acc) USD 2.47% 1,687, I (acc) USD 1.02% 58,873, I (acc) CHF-H1 (hedged) 1.04% 1,989, I (acc) EUR-H1 (hedged) 1.04% 9,715, I (Qdis) USD 1.03% 28,803, I (Qdis) GBP-H1 (hedged) 1.04% 5,180, I (Ydis) EUR-H1 (hedged) 1.03% 1,627, N (acc) USD 2.39% 5,932, N (Mdis) USD* 2.38% 3, W (acc) USD 1.12% 445, W (acc) EUR-H1 (hedged) 1.12% 225, W (Qdis) USD 1.12% 2,272, W (Qdis) EUR 1.12% 1,894, W (Qdis) GBP 1.12% W (Qdis) GBP-H1 (hedged) 1.12% 106, Z (acc) USD 1.39% 1,578, Z (Mdis) USD 1.40% 596, Z (Qdis) GBP-H1 (hedged) 1.39% 43, Unaudited Semi-Annual Report 57

60 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton Emerging s Smaller Companies Fund USD A (acc) USD 2.50% 15,331, A (acc) EUR 2.50% 5,105, A (Ydis) USD 2.50% 798, A (Ydis) GBP 2.50% 393, C (acc) USD 3.08% 847, I (acc) USD 1.44% 2,432, I (acc) EUR 1.43% 748, N (acc) USD 3.00% 3,853, W (acc) USD 1.65% 465, W (acc) GBP 1.65% 609, Templeton Euroland Fund EUR A (acc) EUR 1.85% 5,729, A (Ydis) EUR 1.85% 327, B (acc) USD 3.16% 417, B (Ydis) EUR 3.18% 52, I (acc) EUR 0.98% 2,062, N (acc) EUR 2.60% 2,829, X (acc) EUR 0.26% Templeton European Fund EUR A (acc) EUR 1.84% 3,058, A (acc) SGD 1.83% 4,865, A (acc) USD 1.84% 3,994, A (Ydis) USD 1.83% 7,657, I (acc) EUR 0.98% 957, N (acc) EUR 2.58% 517, W (acc) EUR 1.02% 4, Z (acc) EUR 1.30% 3, Templeton Frontier s Fund USD A (acc) USD 2.59% 15,760, A (acc) EUR 2.59% 10,565, A (acc) EUR-H1 (hedged) 2.62% 7,725, A (acc) SGD 2.59% 312, A (Ydis) USD 2.59% 1,670, A (Ydis) GBP 2.59% 966, B (acc) USD 3.91% 50, C (acc) USD 3.17% 295, I (acc) USD 1.53% 8,273, I (acc) EUR 1.53% 14,764, I (Ydis) GBP 1.53% 2,425, N (acc) EUR 3.09% 2,724, N (acc) EUR-H1 (hedged) 3.12% 5,737, N (acc) PLN-H1 (hedged) 3.12% 4,728, W (acc) USD 1.74% 957, W (acc) EUR 1.71% 967, W (acc) GBP 1.72% 477, X (acc) USD 0.30% Z (acc) GBP 2.07% 30, Z (Ydis) EUR-H1 (hedged) 2.11% 177, Templeton Global Fund USD A (acc) USD 1.83% 9,609, A (acc) HKD 1.83% 1,410, A (acc) SGD 1.83% 14,833, A (Ydis) USD 1.83% 24,024, B (acc) USD 3.14% 864, C (acc) USD 2.41% 825, I (acc) USD 0.98% 9,744, N (acc) USD 2.58% 1,850, W (Ydis) USD 1.08% 244, X (Ydis) USD 0.27% Z (acc) USD* 1.28% Templeton Global (Euro) Fund EUR A (acc) EUR 1.83% 2,354, A (Ydis) EUR 1.83% 36,578, B (acc) USD 3.14% 25, I (acc) EUR 0.97% 323, I (acc) EUR-H2 (hedged) 0.96% 620, N (acc) EUR 2.58% 539, W (acc) EUR 1.06% 52, Z (acc) EUR 1.33% 35, Unaudited Semi-Annual Report

61 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton Global Balanced Fund USD A (acc) USD 1.63% 12,494, A (acc) EUR 1.63% 2,478, A (acc) EUR-H1 (hedged) 1.65% 1,425, A (acc) SGD 1.63% 30,722, A (Qdis) USD 1.63% 14,750, B (acc) USD 2.94% 2,469, C (Qdis) USD 2.21% 4,629, I (Ydis) USD 0.87% 1,930, N (acc) EUR 2.13% 4,008, N (acc) EUR-H1 (hedged) 2.15% 3,096, W (acc) USD 0.98% 578, X (Ydis) USD 0.26% Z (acc) USD 1.12% 182, Templeton Global Bond Fund USD A (acc) USD 1.39% 164,644, A (acc) CHF-H1 (hedged) 1.41% 17,145, A (acc) CZK-H1 (hedged) 1.38% 13,748, A (acc) EUR 1.39% 90,482, A (acc) EUR-H1 (hedged) 1.41% 125,111, A (acc) HKD 1.39% 3,751, A (acc) NOK-H1 (hedged) 1.42% 7,729, A (acc) SEK-H1 (hedged) 1.42% 33,577, A (Mdis) USD 1.39% 272,919, A (Mdis) AUD-H1 (hedged) 1.40% 3,015, A (Mdis) CAD-H1 (hedged) 1.39% 1,721, A (Mdis) EUR 1.39% 37,680, A (Mdis) EUR-H1 (hedged) 1.40% 74,308, A (Mdis) GBP 1.40% 4,567, A (Mdis) GBP-H1 (hedged) 1.40% 8,296, A (Mdis) HKD 1.39% 29,574, A (Mdis) RMB-H1 (hedged) 1.37% 301, A (Mdis) SGD 1.39% 10,326, A (Mdis) SGD-H1 (hedged) 1.39% 35,236, A (Ydis) CHF-H1 (hedged) 1.40% 3,040, A (Ydis) EUR 1.39% 41,801, A (Ydis) EUR-H1 (hedged) 1.40% 125,005, AX (acc) USD 1.59% 28,024, B (Mdis) USD 2.90% 14,267, C (Mdis) USD 2.17% 62,782, I (acc) USD 0.84% 90,525, I (acc) CHF-H1 (hedged) 0.85% 17,149, I (acc) EUR 0.84% 30,784, I (acc) EUR-H1 (hedged) 0.85% 45,015, I (acc) NOK-H1 (hedged) 0.86% 113,373, I (acc) NZD-H1 (hedged) 0.84% 4,497, I (Mdis) EUR 0.84% 7,876, I (Mdis) GBP 0.84% 11,344, I (Mdis) GBP-H1 (hedged) 0.85% 119,563, I (Mdis) JPY 0.84% 6,683, , , , I (Mdis) JPY-H1 (hedged) 0.85% 5,526, , , , I (Ydis) EUR 0.85% 1,810, I (Ydis) EUR-H1 (hedged) 0.85% 27,577, N (acc) USD 2.09% 41,528, N (acc) EUR 2.09% 17,350, N (acc) EUR-H1 (hedged) 2.10% 55,054, N (acc) HUF 2.09% 9,356, N (acc) PLN-H1 (hedged) 2.11% 28,368, N (Mdis) USD 2.09% 6,899, N (Mdis) EUR-H1 (hedged) 2.11% 84,735, N (Ydis) EUR-H1 (hedged) 2.10% 16,375, S (acc) USD 0.74% 360, W (acc) USD 0.97% 3,624, W (acc) CHF-H1 (hedged) 0.98% 44, W (acc) EUR 0.98% 5,000, W (acc) EUR-H1 (hedged) 0.98% 3,441, W (Mdis) USD 0.97% 2,275, W (Mdis) EUR 0.99% 283, W (Mdis) GBP 0.97% 3,581, W (Mdis) GBP-H1 (hedged) 0.97% 8,304, W (Ydis) EUR 0.99% 825, W (Ydis) EUR-H1 (hedged) 0.97% 335, X (acc) EUR 0.29% 12,688, Z (acc) USD 1.09% 14,796, Unaudited Semi-Annual Report 59

62 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton Global Bond Fund USD (continued) Z (acc) EUR 1.09% 138, Z (Mdis) USD 1.09% 11,706, Z (Mdis) GBP-H1 (hedged) 1.08% 126, Z (Ydis) EUR-H1 (hedged) 1.10% 465, Templeton Global Bond (Euro) Fund EUR A (acc) EUR 1.40% 13,464, A (acc) USD 1.39% 166, A (Ydis) EUR 1.40% 10,312, I (acc) EUR 0.85% 7,250, N (acc) EUR 2.10% 10,568, W (acc) EUR 0.98% 33, Templeton Global Equity Income Fund USD A (acc) USD 1.60% 3,110, A (acc) EUR 1.60% 298, A (Mdis) RMB-H1 (hedged)* 1.79% 61, A (Qdis) USD 1.60% 18,875, A (Qdis) SGD 1.82% 19,918, B (Qdis) USD 2.91% 2,277, I (Ydis) USD 0.95% Templeton Global High Yield Fund USD A (acc) USD 1.70% 986, A (acc) EUR 1.70% 2,395, A (Mdis) USD 1.69% 1,834, A (Mdis) EUR 1.70% 12,252, I (acc) USD 0.93% 28, I (acc) EUR 0.90% 745, N (acc) EUR 2.19% 3,191, Templeton Global Income Fund USD A (acc) USD 1.69% 25,339, A (acc) EUR 1.69% 11,875, A (acc) EUR-H1 (hedged) 1.66% 481, A (acc) HKD 1.68% 1,092, A (Mdis) SGD-H1 (hedged) 1.66% 61, A (Qdis) USD 1.69% 19,457, A (Qdis) EUR-H1 (hedged) 1.66% 884, A (Qdis) HKD 1.69% 6,102, A (Qdis) SGD 1.69% 212, B (Qdis) USD 3.00% 2,717, C (Qdis) USD 2.27% 12,367, I (acc) USD 0.89% 12,740, I (acc) EUR-H1 (hedged) 0.88% 1,920, N (acc) USD 2.19% 24,498, N (acc) EUR-H1 (hedged)* 2.14% 40, N (Qdis) EUR-H1 (hedged) 2.20% 1,210, Z (acc) USD 1.04% 1,972, Templeton Global Smaller Companies Fund USD A (acc) USD 1.87% 1,575, A (Ydis) USD 1.87% 2,350, B (acc) USD 3.18% 249, C (acc) EUR 2.45% 7, I (acc) USD 1.03% 210, N (acc) USD 2.62% 209, Templeton Global Total Return Fund USD A (acc) USD 1.40% 207,186, A (acc) CHF-H1 (hedged) 1.42% 23,086, A (acc) EUR 1.40% 45,925, A (acc) EUR-H1 (hedged) 1.41% 101,221, A (acc) HKD 1.41% 14,754, A (acc) NOK-H1 (hedged) 1.41% 11,006, A (acc) PLN-H1 (hedged) 1.42% 13,185, A (acc) SEK-H1 (hedged) 1.43% 96,538, A (Mdis) USD 1.40% 217,425, A (Mdis) AUD-H1 (hedged) 1.42% 11,588, A (Mdis) EUR 1.40% 38,888, A (Mdis) EUR-H1 (hedged) 1.42% 111,710, A (Mdis) GBP 1.41% 3,983, A (Mdis) GBP-H1 (hedged) 1.41% 13,903, A (Mdis) HKD 1.41% 210,671, A (Mdis) RMB-H1 (hedged) 1.39% 1,233, A (Mdis) SGD 1.41% 10,305, A (Mdis) SGD-H1 (hedged) 1.41% 59,711, Unaudited Semi-Annual Report

63 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton Global Total Return Fund USD (continued) A (Ydis) CHF-H1 (hedged) 1.42% 3,158, A (Ydis) EUR 1.40% 31,900, A (Ydis) EUR-H1 (hedged) 1.42% 51,080, B (acc) USD 2.91% 2,591, B (Mdis) USD 2.91% 9,835, C (Mdis) USD 2.18% 43,527, I (acc) USD 0.86% 88,224, I (acc) USD-H4 (BRL) (hedged)* 0.86% 92, I (acc) CHF-H1 (hedged) 0.87% 8,136, I (acc) EUR 0.86% 9,667, I (acc) EUR-H1 (hedged) 0.86% 49,510, I (acc) NOK-H1 (hedged) 0.87% 5,147, I (Mdis) EUR 0.86% 858, I (Mdis) GBP 0.86% 240, I (Mdis) GBP-H1 (hedged) 0.86% 19,001, I (Mdis) JPY 0.85% 162,664, , , , I (Mdis) JPY-H1 (hedged) 0.85% 10,715, , , , I (Ydis) EUR 0.85% 3,255, I (Ydis) EUR-H1 (hedged) 0.88% 26,704, N (acc) USD 2.10% 53,867, N (acc) EUR 2.10% 27,464, N (acc) EUR-H1 (hedged) 2.13% 72,880, N (acc) HUF 2.11% 16,190, N (Mdis) USD 2.10% 732, N (Mdis) EUR-H1 (hedged) 2.12% 131,045, N (Ydis) EUR-H1 (hedged) 2.12% 19,939, S (acc) USD 0.74% 167, S (acc) EUR-H1 (hedged) 0.74% 163, S (Ydis) USD 0.74% 2,359, W (acc) USD 0.98% 7,361, W (acc) CHF-H1 (hedged) 0.98% 160, W (acc) EUR 1.00% 2,931, W (acc) EUR-H1 (hedged) 1.00% 5,263, W (acc) GBP-H1 (hedged) 0.98% 97, W (Mdis) USD 0.98% 3,850, W (Mdis) EUR 1.00% 1,372, W (Mdis) GBP 0.99% 1,087, W (Mdis) GBP-H1 (hedged) 0.99% 3,974, W (Ydis) EUR 0.99% 162, X (Ydis) USD 0.29% 1,036, Z (acc) USD 1.10% 11,917, Z (Mdis) USD 1.10% 5,680, Z (Mdis) GBP-H1 (hedged) 1.09% 662, Z (Ydis) EUR-H1 (hedged) 1.09% 4,160, Templeton Growth (Euro) Fund EUR A (acc) EUR 1.82% 409,089, A (acc) USD 1.82% 17,427, A (Ydis) EUR 1.82% 16,068, A (Ydis) USD 1.82% 1,701, B (Ydis) EUR 3.15% 82, I (acc) EUR 0.97% 12,267, I (Ydis) EUR 0.97% 2,412, I (Ydis) USD 0.96% 429, N (acc) EUR 2.57% 2,217, Templeton Korea Fund USD A (acc) USD 2.50% 8,602, A (acc) SGD 2.50% 3,325, C (acc) USD 3.08% 14, I (acc) USD 1.41% 2,169, N (acc) USD 3.00% 336, Templeton Latin America Fund USD A (acc) USD 2.28% 3,035, A (acc) EUR 2.27% 555, A (acc) SGD 2.28% 2,497, A (Ydis) USD 2.28% 18,540, A (Ydis) EUR 2.28% 310, A (Ydis) GBP 2.28% 71, B (acc) USD 3.59% 1,770, C (acc) USD 2.86% 381, I (acc) USD 1.31% 3,697, I (Ydis) EUR-H2 (hedged) 1.31% 7,350, N (acc) USD 2.78% 1,105, N (acc) EUR 2.78% 22, Unaudited Semi-Annual Report 61

64 Statistical Information (continued) Total Expense Ratio December 31, 2014 (see note 25) Shares Outstanding December 31, 2014 December 31, 2014 Net Asset Value per Share June 30, 2014 June 30, 2013 Templeton Latin America Fund USD (continued) N (acc) PLN-H1 (hedged) 2.82% 3,273, W (acc) GBP 1.41% 76, W (Ydis) USD 1.41% 262, X (acc) USD 0.30% X (Ydis) USD Ω Z (acc) USD 1.78% 158, Z (acc) GBP 1.76% 26, Templeton Thailand Fund USD A (acc) USD 2.49% 7,750, A (acc) SGD 2.49% 669, B (acc) USD 3.79% 371, I (acc) USD 1.41% 127, N (acc) USD 2.99% 542, W (acc) USD 1.63% 36, * This Fund / share class was launched during the period Ω This Fund / share class was closed during the year ** These Funds had their names changed on September 30,2014 (refer to note 1) *** These Funds had their names changed on November 14,2014 (refer to note 1) 62 Unaudited Semi-Annual Report

65 Notes to the Financial Statements at December 31, 2014 Note 1 The Company Franklin Templeton Investment Funds ( FTIF or the Company ) is a collective investment undertaking pursuant to Part I of the amended Luxembourg law of December 17, 2010 on undertakings for collective investment and qualifies as a société d investissement à capital variable. The Company was incorporated in Luxembourg on November 6, 1990, for an undetermined period. At the date of this report, it offers shares in 87 sub-funds of the Company (the Funds ). The Board of Directors of the Company may authorise the creation of additional Funds in future with different investment objectives. The Company aims to provide investors with a choice of Funds investing in a wide range of transferable securities and other eligible on a worldwide basis and featuring a diverse array of investment objectives, including capital growth and income. The overall objective of the Company is to seek to minimise investment exposure through diversification and to provide Shareholders with the benefit of a portfolio managed by Franklin Templeton Investments, according to its successful time-tested investment selection methods. Changes to the Investment Manager structure of the Company With effect from October 31, 2014, the management structure of the Franklin Mutual European Fund has changed from a single management structure with Franklin Mutual Advisers, LLC to a co-management structure composed of Franklin Mutual Advisers, LLC and Franklin Templeton Investment Management Limited. Fund launches Franklin K2 Alternative Strategies Fund launched on September 15, The following Funds launched on November 17, 2014: Franklin Asia Credit Fund Franklin European Income Fund Templeton ASEAN Fund. Fund closures Franklin Asian Flex Cap Fund closed on September 12, Fund name changes From September 30, 2014: Templeton Euro Liquid Reserve Fund is renamed Franklin Euro Liquid Reserve Fund Templeton Euro Short-Term Money Fund is renamed Franklin Euro Short-Term Money Fund Templeton European Total Return Fund is renamed Franklin European Total Return Fund. From November 14, 2014: Franklin Euroland Core Fund is renamed Franklin Euroland Fund Franklin European Core Fund is renamed Franklin European Fund. Note 2 Significant accounting policies (a) General The financial statements are prepared in accordance with the regulations of the Grand Duchy of Luxembourg relating to investment funds. (b) Investment in securities Securities which are listed on a stock exchange or traded on any other organised market are d at the last available price on such exchange or market which is normally the principal market for each security, and those securities dealt in on an over-the-counter market are d in a manner as near as possible to that for quoted securities. Securities not listed on any stock exchange nor traded on any organised market are d at the last available price, or if such price is not representative of their fair, they are d prudently and in good faith on the basis of their reasonably foreseeable sales prices. The Company has procedures to determine the fair of individual securities and other for which market prices are not readily available or which may not be reliably priced. In such circumstances, the price of such investment shall be adjusted in accordance with the procedures adopted, as determined by or under the direction of the Board of Directors. During the accounting period under review, gains and losses on investment securities sold were computed on the average cost basis for all Funds with the exception of the Franklin High Yield Fund, the Franklin Income Fund, the Franklin U.S. Government Fund, the Templeton Asian Bond Fund and the Templeton BRIC Fund which were computed on the first-in, first-out basis. During the accounting period under review, discounts and premiums were amortised to income over the period to maturity. For mortgage-backed and other similar holdings with scheduled debt paydowns, the Funds record accruals, based on their historical experience, for anticipated paydowns. Such accruals are recorded as a reduction or increase to the related holdings as disclosed on the Schedule of Investments and are included in the related unrealised appreciation/depreciation on investments shown on the Statement of Operations and Changes in Net Assets. Money market instruments are d at market with the exception of Templeton Euro Short-Term Money Fund, where all securities are d at amortised cost. Under this method, the cost of investments is adjusted to income for the amortisation of premiums and discounts over the life of the investments. Where the amortised cost basis does not reflect a prudent approach to the valuation of the security, the latest available price prevailing on the valuation day is used. (c) Forward foreign exchange contracts Forward foreign exchange contracts are d at the forward rate applicable at the Statement of Net Assets date for the remaining period, until maturity. Gains or losses resulting from forward exchange contracts are recognised in the Statement of Operations and Changes in Net Assets. (d) Financial future contracts The Company may enter into financial future contracts to gain exposure to market changes. A financial future contract is an agreement between two parties to buy or sell a security for a set price on a future date. Required initial margin deposits of cash or securities are maintained by a broker in a Unaudited Semi-Annual Report 63

66 Note 2 Significant accounting policies (continued) (d) Financial future contracts (continued) Notes to the Financial Statements at December 31, 2014 (continued) segregated account. Subsequent payments, known as variation margin, are made or received by the Company depending on the fluctuations in the of the underlying securities. Such variation margin is accounted for as unrealised gains or losses until the contract is closed, at which time the gains or losses are reclassified to realised gains or losses. Realised and unrealised gains and losses are included in the Statement of Operations and Changes in Net Assets. (e) Interest rate swap contracts Interest rate swap contracts are used to hedge the risk of changes in interest rates and are agreements between two parties to exchange cash flows based on a notional principal amount. The interest received or paid on interest rate swap contract agreements is accrued daily as interest income/ expense. Interest rate swap contracts are marked to market daily based upon quotations from the market makers and the change, if any, is recorded as an unrealised gain or loss in the Statement of Operations and Changes in Net Assets. When the swap contract is terminated early, the Fund records a realised gain or loss equal to the difference between the current present and the executed present. Any outstanding interest accrual is recorded as either a receivable or payable. The risks of interest rate swap contracts include changes in market conditions and the possible inability of the counterparty to fulfill its obligations under the agreement. (f) Inflation swap contracts An inflation swap contract is a bilateral agreement in which each of the parties agree to exchange a series of interest payments for another series of interest payments based on a notional amount that serves as a computation basis and that is usually not exchanged. Inflation swap contracts are marked to market daily based upon quotations from the market makers and the change, if any, is recorded as an unrealised gain or loss in the Statement of Operations and Changes in Net Assets. When the swap contract is terminated early, the Fund records a realised gain or loss equal to the difference between the current present and the executed present. Any outstanding interest accrual is recorded as either a receivable or payable. The risks of inflation swap contracts include changes in market conditions and the possible inability of the counterparty to fulfill its obligations under the agreement. (g) Cross swap contracts A cross swap is an agreement between two parties to exchange interest payments and principals denominated in two different currencies. Cross swap contracts are marked to market daily based upon quotations from the market makers and the change in, if any, is recorded as an unrealised gain or loss in the Statement of Operations and Changes in Net Assets. When the swap contract is terminated early, the Fund records a realised gain or loss equal to the difference between the current present and the executed present. Any outstanding interest accrual is recorded as either a receivable or payable. The risks of cross swap contracts include changes in market conditions and the possible inability of the counterparty to fulfill its obligations under the agreement. (h) Total return swap contracts A total return swap is an agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains. Total return swap contracts are marked to market daily based upon quotations from the market makers and the change in, if any, is recorded as an unrealised gain or loss in the Statement of Operations and Changes in Net Assets. When the swap contract is terminated early, the Fund records a realised gain or loss equal to the difference between the current present and the executed present. Any outstanding interest accrual is recorded as either a receivable or payable. The risks of total return swap contracts include changes in market conditions and the possible inability of the counterparty to fulfill its obligations under the agreement. (i) Credit default swap contracts A credit default swap contract is a credit derivative transaction in which two parties enter into an agreement, whereby one party pays the other a fixed periodic payment for the specified life of the agreement. The other party makes no payments unless a credit event, relating to a predetermined reference asset, occurs. If such an event occurs, the party will then make a payment to the first party, and the swap will terminate. The of the underlying securities shall be taken into account for the calculation of the investment and borrowing powers applicable to individual users. Credit default swap contracts are marked to market daily based upon quotations from the market makers and the change in, if any, is recorded as an unrealised gain or loss in the Statement of Operations and Changes in Net Assets. Any payment received or paid to initiate a contract is recorded as a liability or asset in the Statement of Net Assets. When the swap contract is terminated early, the Fund records a realised gain or loss for any payments received or paid. The risks of credit default swap contracts include unfavourable changes in interest rates, an illiquid secondary market and the possible inability of the counterparty to fulfill its obligations under the agreement, which may be in excess of the amount reflected in the Statement of Net Assets. (j) Option contracts Options are contracts entitling the holder to purchase or sell a specified number of units of a particular security at a specified price at any time until the contract-stated expiration date. Options purchased are recorded as investments; options written (sold) are recorded as liabilities. When the exercise of an option results in a cash settlement, the difference between the premium (original option ) and the settlement 64 Unaudited Semi-Annual Report

67 Note 2 Significant accounting policies (continued) (j) Option contracts (continued) Notes to the Financial Statements at December 31, 2014 (continued) proceeds is accounted for as a realised gain or loss. When securities are acquired or delivered upon exercise of an option, the acquisition cost or sale proceeds are adjusted by the amount of the premium. When an option is closed, the difference between the premium and the cost to close the position is accounted for as a realised gain or loss. When an option expires, the premium is accounted for as a realised gain for options written or as a realised loss for options purchased. The risks include price movements in the underlying securities, the possibility there may be an illiquid options market, or the inability of the counterparties to fulfill their obligations under the contract. The Company writes options on securities, futures and interest rate swaps ( swaptions ). These options are settled in cash and subject the Company to unlimited risk of loss. The Company, however, is not subject to credit risk on written options as the counterparty has already performed its obligation by paying the premium at the inception of the contract. The market s are recorded under Option Contracts at Value in the Statement of Net Assets. (k) Foreign exchange transactions Transactions expressed in currencies other than each Fund s are translated into each Fund s at the exchange rates applicable on the transaction dates. Assets and liabilities designated in currencies other than each Fund s are translated into each Fund s at the appropriate exchange rates ruling at the period-end. Gains and losses on foreign exchange transactions are recognised in the Statement of Operations and Changes in Net Assets in determining the results for the accounting period. The reference of the Company as reflected in the financial statements is U.S.Dollar. The principal exchange rates applied as at December 31, 2014 are as follows: AUD CNH GBP JPY PLN CAD CZK HKD NOK SEK CHF EUR HUF NZD SGD The list of the abbreviations is available in note 28. (l) Mortgage dollar rolls In a mortgage dollar roll, a Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (name, type, coupon, and maturity) securities on a specified future date. During the period between the sale and repurchase, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by the difference between the current sales price and the lower forward price for the future purchase, as well as by the interest earned on the cash proceeds of the initial sale. The difference between the current sales price and the lower forward price is treated as realised gain. (m) Income Dividends are credited to income on their ex-dividend date. Interest income is accrued on a daily basis. (n) Securities lending A Fund may utilise up to 100 its for securities lending transactions. Each Fund may lend selected Funds portfolio securities to specialised banks, credit institutions and other financial institutions of high standing, or through recognised clearing institutions such as Clearstream or Euroclear. The volume of the securities lending transactions of each Fund shall be kept at an appropriate level and the Fund shall be entitled to request the return of the securities lent to enable the Fund to meet, at all times, its redemption obligations. Each fund shall ensure that these transactions do not jeopardise the management of its in accordance with its investment policy. Loans will be secured continuously by collateral which must at least equal the of the securities lent. Securities lending income is disclosed under the caption Securities lending in the Statement of Operations and Changes in Net Assets. Any transaction expenses in connection with the loans are charged to the concerned Fund. (o) Formation expenses Formation expenses associated with the launch of the new Funds are expensed as incurred. (p) Swing pricing A Fund may suffer dilution of the asset per share due to investors buying or selling shares in a Fund at a price that does not reflect dealing and other costs that arise when security trades are undertaken by the Investment Manager to accommodate cash inflows or outflows. In order to counter this impact, a swing pricing mechanism may be adopted to protect the interests of Shareholders of the Fund. If on any valuation date, the aggregate capital activity of a Fund exceeds a pre-determined threshold, as determined and reviewed for each Fund on a periodic basis, the asset per share will be adjusted upwards or downwards to reflect capital inflows or capital outflows respectively. The capital inflows and capital outflows will be determined based on the latest available information at the time of calculation of the asset per share. The swing pricing mechanism may be applied across all Funds. The extent of the price adjustment is set to reflect dealing and other costs. Such adjustment may vary from Fund to Fund and will not exceed 2 the original asset per share. In the case of a swing pricing event on the last day of the annual/semi-annual period, the as disclosed in the Statement of Net Assets, exclude the swing pricing adjustment, however, the asset per share as at year/semi-annual period end, as disclosed in the Statistical Information, would include the swing pricing adjustment. There was no swing pricing adjustment affecting the Funds asset per share on the last day of the period. Unaudited Semi-Annual Report 65

68 Notes to the Financial Statements at December 31, 2014 (continued) Note 3 Cross Funds investments Some Funds may invest into units of UCITS and other open and closed end UCIs which may include other Funds of Franklin Templeton Investment Funds. As at December 31, 2014, the following Funds held shares issued by another Fund of the Company. Currency Investment in securities at market as per Statement of Net Assets of Cross Funds investments Investment in securities at market after deduction of Cross Funds investments Franklin Asia Credit Fund USD 7,710, ,304 7,313,929 Franklin European Income Fund EUR 8,077, ,281 7,812,920 Franklin Multi-Asset Income Fund EUR 48,110,499 11,601,203 36,509,296 Note 4 Time deposits ( TDs ) and cash repurchase agreements ( repos ) As at December 31, 2014, the Company had the following cash on time deposits and repos: Fund Counterparty Franklin GCC Bond Fund Value of TDs in Fund Royal Bank of Canada USD 1,000,000 Franklin Global Equity Strategies Fund Royal Bank of Canada USD 1,000,000 Franklin Global Government Bond Fund Bank of Montreal USD 1,000,000 Franklin Global Growth Fund Royal Bank of Canada USD 7,000,000 Franklin Global Growth and Value Fund Royal Bank of Canada USD 2,000,000 Franklin Global Real Estate Fund Royal Bank of Canada USD 6,000,000 Franklin Global Small-Mid Cap Growth Fund Royal Bank of Canada USD 6,000,000 Franklin India Fund Bank of Montreal USD 20,000,000 National Bank of Canada USD 20,000,000 Royal Bank of Canada USD 20,000,000 60,000,000 Franklin MENA Fund Royal Bank of Canada USD 8,000,000 Franklin World Perspectives Fund Royal Bank of Canada USD 10,000,000 Templeton Africa Fund Royal Bank of Canada USD 3,000,000 Templeton Asian Growth Fund Bank of Montreal USD 139,000,000 National Bank of Canada USD 142,000,000 Royal Bank of Canada USD 142,000,000 Scotia Capital s USD 142,000, ,000,000 Templeton Asian Smaller Companies Fund Bank of Montreal USD 28,000,000 National Bank of Canada USD 26,000,000 Royal Bank of Canada USD 28,000,000 Scotia Capital s USD 28,000, ,000,000 As at December 31, 2014, the Company had no outstanding cash repos. Fund Counterparty Templeton BRIC Fund Note 5 Forward foreign exchange contracts As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Asia Credit Fund Value of TDs in Fund Bank of Montreal USD 19,000,000 Royal Bank of Canada USD 20,000,000 39,000,000 Templeton Emerging s Fund Bank of Montreal USD 21,000,000 National Bank of Canada USD 20,000,000 Royal Bank of Canada USD 20,000,000 Scotia Capital s USD 20,000,000 81,000,000 Templeton Frontier s Fund Scotia Capital s USD 21,000,000 Templeton Global Fund Royal Bank of Canada USD 82,000,000 Templeton Global Equity Income Fund Royal Bank of Canada USD 9,000,000 Templeton Global Smaller Companies Fund Royal Bank of Canada USD 7,000,000 Templeton Growth (Euro) Fund Bank of Montreal EUR 16,452,104 Royal Bank of Canada EUR 29,613,787 46,065,891 Templeton Korea Fund Scotia Capital s USD 1,000,000 Templeton Latin America Fund Bank of Montreal USD 9,000,000 Scotia Capital s USD 10,000,000 19,000,000 Templeton Thailand Fund Royal Bank of Canada USD 1,000,000 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging AUD 2,231,347 USD 1,836, Jan-15 (17,050) SGD 2,518,411 USD 1,914, Jan-15 (14,475) The above contracts were opened with the following counterparty: (31,525) HSBC Bank (31,525) 66 Unaudited Semi-Annual Report

69 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Biotechnology Discovery Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 4,049,504 USD 4,138, Jan-15 (64,105) EUR 7,671,045 USD 9,425, Jan-15 (142,123) USD 330,940 CHF 323, Jan-15 5,945 USD 872,454 EUR 706, Jan-15 17,009 The above contracts were opened with the following counterparties: (183,274) Bank of America (6,703) Barclays Bank (3,456) Citibank (9,451) Credit Suisse (2,213) Deutsche Bank (2,691) Goldman Sachs (10,815) HSBC Bank (4,734) JPMorgan Chase Bank (66,659) Morgan Stanley (18,698) Royal Bank of Scotland (820) The Bank of New York Mellon (5,865) UBS (51,169) Franklin Brazil Opportunities Fund (183,274) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contract used for share class hedging EUR 7,753,003 USD 9,560, Jan-15 (177,340) Forward foreign exchange contract used for efficient portfolio management USD 22,500,000 BRL 56,902,500 2-Apr-15 1,641,933 The above contracts were opened with the following counterparties: 1,464,593 Bank of America (32,397) Barclays Bank (1,087) Citibank (1,234) Credit Suisse (54,679) Deutsche Bank 1,641,433 Goldman Sachs (1,573) HSBC Bank (16,191) JPMorgan Chase Bank (921) Morgan Stanley (6,062) Royal Bank of Scotland (32,789) The Bank of New York Mellon (2,906) UBS (27,001) Franklin Euro High Yield Fund 1,464,593 Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for efficient portfolio management EUR 4,936,472 CHF 5,960, Jan-15 (18,466) EUR 187,734,171 GBP 149,376, Jan-15 (4,616,517) GBP 15,500,000 EUR 19,542, Jan ,794 EUR 177,849,680 USD 245,000,000 9-Mar-15 (24,503,861) USD 56,000,000 EUR 44,376,841 9-Mar-15 1,875,397 (26,846,653) Unaudited Semi-Annual Report 67

70 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Euro High Yield Fund (continued) Unrealised Profit/(Loss) EUR The above contracts were opened with the following counterparties: Citibank (18,466) Deutsche Bank (22,628,464) Morgan Stanley (4,199,723) Franklin European Corporate Bond Fund (26,846,653) Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for efficient portfolio management EUR 506,619 GBP 400, Mar-15 (8,044) EUR 485,090 USD 600, Mar-15 (10,465) The above contracts were opened with the following counterparties: (18,509) Citibank (10,465) Morgan Stanley (8,044) Franklin European Dividend Fund (18,509) Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for share class hedging EUR 225,473 PLN 943, Jan-15 5,395 EUR 21,973 SGD 35, Jan-15 (372) PLN 22,022,266 EUR 5,258, Jan-15 (121,656) SGD 666,935 EUR 409, Jan-15 6,130 The above contracts were opened with the following counterparties: (110,503) Barclays Bank (1,077) Citibank (1,740) Deutsche Bank 3,431 Goldman Sachs (23,831) HSBC Bank (67,683) JPMorgan Chase Bank (14,831) UBS (4,772) Franklin European Growth Fund (110,503) Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for share class hedging EUR 117,813 NOK 1,088, Jan-15 (2,513) EUR 1,176,225 SGD 1,920, Jan-15 (21,559) EUR 6,565,878 USD 8,167, Jan-15 (182,843) NOK 28,902,076 EUR 3,273, Jan-15 (78,278) SGD 44,326,839 EUR 27,295, Jan ,658 USD 116,409,999 EUR 94,787, Jan-15 1,406,110 The above contracts were opened with the following counterparties: 1,465,575 Bank of America 158,973 Barclays Bank 300,661 Citibank 94,217 Credit Suisse 35,287 Deutsche Bank 94,488 Goldman Sachs 85,698 HSBC Bank 40,917 JPMorgan Chase Bank 388,398 Morgan Stanley 154,965 Royal Bank of Scotland 16,455 The Bank of New York Mellon 1,107 UBS 94,409 1,465, Unaudited Semi-Annual Report

71 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin European Income Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for share class hedging EUR 56,968 SGD 93, Jan-15 (1,033) SGD 2,616,607 EUR 1,605, Jan-15 25,817 24,784 Forward foreign exchange contracts used for efficient portfolio management NOK 1,250,000 EUR 143, Mar-15 (5,094) SEK 1,800,000 EUR 194, Mar-15 (4,091) The above contracts were opened with the following counterparties: (9,185) 15,599 Citibank (9,185) HSBC Bank 24,271 JPMorgan Chase Bank 513 Franklin European Total Return Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR 15,599 Forward foreign exchange contracts used for share class hedging NOK 3,227,895 EUR 357, Jan-15 (169) SEK 3,761,809 EUR 401, Jan-15 (3,243) (3,412) Forward foreign exchange contracts used for efficient portfolio management EUR 2,089,433 GBP 1,650, Mar-15 (33,552) EUR 6,589,507 PLN 28,000, Mar-15 76,994 NOK 150,000,000 EUR 16,472, Mar-15 77,606 SEK 65,000,000 EUR 6,973, Mar-15 (88,016) The above contracts were opened with the following counterparties: 33,032 29,620 Bank of America (2,841) Barclays Bank (86) Citibank 32,826 Credit Suisse 27 Goldman Sachs (61) HSBC Bank (177) UBS (68) Franklin Global Aggregate Bond Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD 29,620 Forward foreign exchange contracts used for share class hedging CHF 1,029,631 USD 1,055, Jan-15 (19,198) EUR 5,288,059 USD 6,522, Jan-15 (122,512) GBP 1,394,249 USD 2,181, Jan-15 (8,864) USD 57,898 EUR 47, Jan (150,071) Unaudited Semi-Annual Report 69

72 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Aggregate Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management EUR 430,000 USD 549, Jan-15 (28,852) MYR 2,200,000 USD 667, Jan-15 (39,332) SGD 500,000 USD 391, Jan-15 (14,210) USD 714,566 AUD 825, Jan-15 41,966 USD 2,060,584 EUR 1,630, Jan-15 87,848 USD 1,075,085 JPY 125,000, Jan-15 31,715 USD 596,401 PLN 2,000, Jan-15 31,984 The above contracts were opened with the following counterparties: 111,119 (38,952) Bank of America (6,052) Barclays Bank 43,712 Citibank 44,660 Credit Suisse (3,503) Deutsche Bank (1,355) Goldman Sachs (34,242) HSBC Bank (9,781) JPMorgan Chase Bank (7,812) Morgan Stanley (16,815) RBC Capital s (39,332) Royal Bank of Scotland (4,405) The Bank of New York Mellon (1,164) UBS (2,863) Franklin Global Aggregate Investment Grade Bond Fund (38,952) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management AUD 2,950,000 USD 2,495, Jan-15 (90,195) EUR 6,050,000 USD 7,571, Jan-15 (249,020) JPY 240,000,000 USD 2,017, Jan-15 (14,283) MYR 3,700,000 USD 1,123, Jan-15 (67,546) PLN 4,000,000 USD 1,183, Jan-15 (54,828) SGD 1,100,000 USD 861, Jan-15 (31,261) USD 4,732,950 AUD 5,450, Jan ,715 USD 10,112,161 EUR 8,050, Jan ,504 USD 5,170,758 JPY 600,000, Jan ,584 USD 314,376 MYR 1,100, Jan USD 2,327,524 PLN 7,800, Jan ,298 USD 304,232 SGD 400, Jan-15 2,451 The above contracts were opened with the following counterparties: 443,865 Barclays Bank 270,990 Citibank 268,785 Morgan Stanley (28,810) RBC Capital s (67,100) Franklin Global Allocation Fund 443,865 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 2,725,381 USD 2,789, Jan-15 (47,783) EUR 9,418,197 USD 11,608, Jan-15 (210,274) SEK 20,119,332 USD 2,630, Jan-15 (50,671) (308,728) 70 Unaudited Semi-Annual Report

73 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Allocation Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management USD 11,078 EUR 8,122 7-Jan-15 1,249 USD 15,013 EUR 11, Jan-15 1,700 USD 18,381 JPY 1,900, Jan-15 2,522 EUR 5,592 USD 6, Jan-15 (190) MXN 208,000 USD 14, Jan-15 (25) USD 87,185 EUR 65, Jan-15 8,194 USD 16,664 JPY 1,730, Jan-15 2,223 INR 5,574,000 USD 89, Jan-15 (1,644) PLN 480,000 USD 144, Jan-15 (9,009) USD 123,070 EUR 90, Jan-15 14,133 USD 59,614 JPY 6,020,000 6-Feb-15 9,358 USD 52,755 EUR 39,000 9-Feb-15 5,546 USD 59,830 JPY 6,050,000 9-Feb-15 9,322 CHF 10,260 USD 10, Feb-15 (299) KRW 6,935,998 USD 6, Feb-15 (37) USD 20,811 CHF 18, Feb-15 1,732 USD 58,274 JPY 5,936, Feb-15 8,718 USD 78,892 KRW 81,990, Feb-15 4,090 USD 57,846 JPY 5,900, Feb-15 8,590 USD 19,208 JPY 1,960, Feb-15 2,844 MYR 6,132 USD 1, Feb-15 (69) USD 38,808 JPY 3,940, Feb-15 5,913 GBP 63,243 USD 102, Feb-15 (3,483) USD 542,558 GBP 327, Feb-15 31,885 USD 23,359 EUR 17, Feb-15 2,779 INR 5,574,000 USD 88, Feb-15 (1,160) USD 178,698 EUR 130, Feb-15 21,318 USD 9,568 JPY 980, Feb-15 1,386 USD 19,263 JPY 1,970, Feb-15 2,815 USD 89,171 EUR 65, Feb-15 10,412 USD 6,289 JPY 641, Feb USD 80,473 EUR 58,600 9-Mar-15 9,523 USD 35,391 JPY 3,619,000 9-Mar-15 5,171 MYR 18,455 USD 5, Mar-15 (318) MXN 923,000 USD 62, Mar-15 (222) USD 8,790 EUR 6, Mar-15 1,160 AUD 580,000 USD 476, Mar-15 (5,384) GBP 2,150,000 USD 3,367, Mar-15 (18,768) NOK 22,300,000 USD 3,051, Mar-15 (73,373) USD 473,048 AUD 580, Mar-15 2,136 USD 5,154,203 CHF 4,997, Mar ,821 USD 3,869,430 EUR 3,121, Mar-15 90,245 USD 2,158,449 JPY 257,000, Mar-15 12,170 USD 2,960,898 NOK 22,300, Mar-15 (17,389) USD 1,876,083 SEK 14,180, Mar-15 57,405 USD 24,043 EUR 17, Mar-15 3,095 USD 31,129 JPY 3,160, Mar-15 4,738 USD 36,937 EUR 26, Mar-15 4,802 USD 1,316,689 EUR 1,070, Mar-15 21,009 USD 15,384 JPY 1,571, Mar-15 2,264 USD 11,037 EUR 8, Mar-15 1,350 USD 15,663 JPY 1,600, Mar-15 2,300 USD 20,715 EUR 15, Mar-15 2,551 USD 19,032 EUR 14, Mar-15 1,393 MYR 141,250 USD 42,816 2-Apr-15 (2,771) USD 3,703 EUR 2,686 2-Apr USD 2,453 EUR 1,777 7-Apr USD 4,928 EUR 3, Apr USD 3,740 EUR 2, Apr USD 31,789 JPY 3,230, Apr-15 4,805 USD 19,027 JPY 1,940, Apr-15 2,819 USD 194,163 EUR 140, Apr-15 24,064 USD 22,169 JPY 2,260, Apr-15 3,288 USD 32,836 EUR 23, Apr-15 4,099 USD 14,460 EUR 10,434 5-May-15 1,820 USD 5,026 EUR 3,621 7-May USD 38,405 EUR 27, May-15 4,637 USD 82,646 EUR 60, May-15 9,952 USD 186,285 EUR 147, May-15 8,099 USD 24,654 EUR 19, May USD 189,626 EUR 151, May-15 6,666 USD 22,577 EUR 16, May-15 2,626 USD 13,551 EUR 9, May-15 1,539 Unaudited Semi-Annual Report 71

74 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Allocation Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 4,832 EUR 3, May USD 12,180 EUR 8,943 5-Jun-15 1,342 USD 70,492 JPY 7,200,000 9-Jun-15 10,303 USD 131,166 JPY 13,400, Jun-15 19,145 USD 49,140 JPY 5,020, Jun-15 7,174 USD 15,729 JPY 1,600, Jun-15 2,353 USD 2,624 EUR 1, Jun MYR 63,750 USD 19,463 2-Jul-15 (1,522) MYR 12,890 USD 3,941 3-Jul-15 (313) MYR 106,000 USD 32,433 7-Jul-15 (2,612) USD 130,057 JPY 13,148, Jul-15 20,068 USD 21,582 EUR 16, Jul-15 2,178 USD 27,706 JPY 2,800, Jul-15 4,282 USD 28,234 EUR 21, Jul-15 2,765 USD 56,365 EUR 42,000 4-Aug-15 5,424 CLP 154,112,000 USD 261,163 5-Aug-15 (12,000) USD 14,787 EUR 11,000 5-Aug-15 1,445 PHP 11,115,000 USD 253,680 6-Aug-15 (7,215) USD 619,494 EUR 463, Aug-15 57,877 SGD 169,400 USD 135, Aug-15 (8,125) USD 684,208 JPY 69,644, Aug ,407 USD 6,869 EUR 5, Aug USD 7,384 EUR 5, Aug USD 26,840 EUR 20, Aug-15 2,577 USD 44,276 EUR 33, Aug-15 4,240 MYR 4,787 USD 1, Sep-15 (119) USD 11,619 EUR 9, Sep USD 19,152 EUR 15, Sep USD 25,485 EUR 20, Sep-15 1,204 USD 51,025 EUR 40,000 1-Oct-15 2,462 USD 58,241 EUR 46,000 5-Oct-15 2,389 USD 303,793 JPY 33,071,420 7-Oct-15 26,732 USD 66,823 JPY 7,200,000 9-Oct-15 6,501 USD 67,817 JPY 7,300, Oct-15 6,650 MXN 657,000 USD 48, Oct-15 (4,314) USD 250,409 EUR 196, Oct-15 12,380 USD 59,949 EUR 47, Oct-15 2,868 USD 16,368 JPY 1,730, Oct-15 1,869 USD 30,929 JPY 3,270, Oct-15 3,525 USD 79,435 EUR 62, Oct-15 4,126 USD 20,299 JPY 2,160, Oct-15 2,196 USD 224,214 EUR 179,000 9-Nov-15 6,697 USD 258,839 JPY 29,484,300 9-Nov-15 11,607 USD 436,717 EUR 350, Nov-15 11,053 USD 25,807 EUR 20, Nov USD 6,330 EUR 5, Nov USD 13,678 EUR 11, Dec MXN 1,449,000 USD 95, Dec MXN 558,000 USD 36, Dec MXN 92,000 USD 6, Dec-15 (6) MXN 141,000 USD 9, Dec-15 (11) MXN 70,000 USD 4,637 4-Jan-16 (4) The above contracts were opened with the following counterparties: 756, ,988 Bank of America 17,371 Barclays Bank 64,213 Citibank 146,938 Credit Suisse (3,401) Deutsche Bank 282,156 Goldman Sachs 4,504 Greenwich Capital 12,000 HSBC Bank 10,000 JPMorgan Chase Bank 126,551 Morgan Stanley (26,580) Royal Bank of Scotland (24,360) State Street Bank 9,369 The Bank of New York Mellon (8,658) UBS (170,427) Standard Chartered Bank 8, , Unaudited Semi-Annual Report

75 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Convertible Securities Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 667,775 USD 683, Jan-15 (11,881) EUR 11,893,104 USD 14,665, Jan-15 (271,336) USD 192,159 EUR 156, Jan-15 2,924 The above contracts were opened with the following counterparties: (280,293) Bank of America (2,335) Barclays Bank (2,693) Citibank (3,155) Credit Suisse (23,354) Deutsche Bank (984) Goldman Sachs (5,373) HSBC Bank (140,250) JPMorgan Chase Bank (8,687) Morgan Stanley (8,367) Royal Bank of Scotland (47,959) The Bank of New York Mellon (13,830) UBS (23,306) Franklin Global Corporate High Yield Fund (280,293) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 2,337,070 USD 2,893, Jan-15 (65,248) GBP 669,388 USD 1,051, Jan-15 (8,093) USD 81,959 EUR 65, Jan-15 2,465 USD 23,975 GBP 15, Jan (70,699) Forward foreign exchange contracts used for efficient portfolio management EUR 110,381 USD 153,571 9-Jan-15 (19,997) USD 138,628 EUR 110,381 9-Jan-15 5,053 EUR 494,184 USD 679,602 9-Feb-15 (81,397) USD 607,104 EUR 474,181 9-Feb-15 33,113 EUR 805,945 USD 1,081,479 9-Mar-15 (105,680) USD 1,091,643 EUR 797,000 9-Mar ,675 GBP 100,907 USD 166,507 7-May-15 (9,387) USD 129,640 EUR 100,000 7-May-15 8,493 GBP 111,000 USD 173, Jun-15 (916) The above contracts were opened with the following counterparties: (44,043) (114,742) Barclays Bank (1,167) Citibank (174) Deutsche Bank (44,044) Goldman Sachs (6,422) HSBC Bank (979) JPMorgan Chase Bank (2,142) Morgan Stanley (1,609) The Bank of New York Mellon (1,529) UBS (56,676) (114,742) Franklin Global Equity Strategies Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 7,021,447 USD 8,628, Jan-15 (130,920) USD 382,616 EUR 306, Jan-15 12,006 (118,914) Unaudited Semi-Annual Report 73

76 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Equity Strategies Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Bank of America (40,086) Citibank 4,467 Credit Suisse (2,960) Deutsche Bank (3,090) Goldman Sachs (21,212) HSBC Bank (2,237) JPMorgan Chase Bank (32,667) Morgan Stanley (5,623) The Bank of New York Mellon (451) UBS (15,055) (118,914) Franklin Global Fundamental Strategies Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 318,855,885 USD 393,244, Jan-15 (7,343,516) PLN 179,653,542 USD 52,197, Jan-15 (1,498,074) (8,841,590) Forward foreign exchange contracts used for efficient portfolio management USD 701,220 JPY 73,025,000 7-Jan-15 91,752 MYR 1,387,200 USD 413,646 8-Jan-15 (17,245) USD 984,524 JPY 102,106,000 8-Jan ,339 CLP 542,840,000 USD 883,457 9-Jan-15 10,019 MYR 283,000 USD 84,518 9-Jan-15 (3,658) CLP 106,000,000 USD 192, Jan-15 (17,780) MYR 85,000 USD 25, Jan-15 (1,132) USD 538,421 EUR 396, Jan-15 58,967 USD 87,963 JPY 9,200, Jan-15 11,175 CLP 139,330,000 USD 226, Jan-15 3,077 INR 6,186,000 USD 99, Jan-15 (1,912) USD 8,322,885 EUR 6,092, Jan ,271 USD 264,165 JPY 27,600, Jan-15 33,801 CLP 130,722,000 USD 211, Jan-15 3,547 INR 16,318,000 USD 262, Jan-15 (4,792) MYR 30,000 USD 9, Jan-15 (433) USD 90,075 EUR 66, Jan-15 10,202 USD 6,162,624 JPY 639,230, Jan ,232 CLP 141,488,000 USD 229, Jan-15 3,031 MYR 178,000 USD 53, Jan-15 (2,811) USD 684,100 EUR 500, Jan-15 78,993 USD 709,749 JPY 73,340, Jan-15 97,605 CLP 496,765,000 USD 797, Jan-15 19,116 INR 52,260,000 USD 841, Jan-15 (15,597) USD 60,056 JPY 6,235, Jan-15 8,013 INR 23,071,000 USD 368, Jan-15 (4,288) USD 310,764 EUR 228, Jan-15 34,820 INR 23,676,000 USD 379, Jan-15 (5,220) USD 212,085 EUR 156, Jan-15 23,190 CLP 233,240,000 USD 421, Jan-15 (38,143) CLP 330,830,000 USD 586, Jan-15 (42,599) SGD 530,000 USD 427, Jan-15 (27,448) INR 12,351,000 USD 197, Jan-15 (2,248) USD 377,852 EUR 276, Jan-15 43,635 USD 843,821 JPY 87,230, Jan ,672 USD 1,861,727 JPY 190,330, Jan ,941 SEK 33,492,452 USD 4,595, Jan-15 (300,420) USD 704,232 EUR 515, Jan-15 80,761 CLP 109,610,000 USD 181, Jan-15 (1,989) EUR 3,291,095 SEK 30,424, Jan-15 82,121 INR 125,693,000 USD 2,021, Jan-15 (38,788) SEK 30,424,500 EUR 3,250, Jan-15 (33,130) SGD 5,408,440 USD 4,357, Jan-15 (277,795) USD 9,813,624 EUR 7,180, Jan-15 1,122,938 CLP 142,595,000 USD 237,737 2-Feb-15 (3,683) INR 19,038,500 USD 305,925 2-Feb-15 (5,828) CLP 89,945,000 USD 150,108 3-Feb-15 (2,485) INR 40,738,750 USD 653,706 3-Feb-15 (11,659) USD 8,444,454 EUR 6,230,000 3-Feb ,431 CLP 124,200,000 USD 219,125 4-Feb-15 (15,296) 74 Unaudited Semi-Annual Report

77 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Fundamental Strategies Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD INR 23,503,000 USD 377,243 4-Feb-15 (6,894) MYR 1,183,000 USD 349,597 4-Feb-15 (12,491) USD 8,434,386 JPY 851,730,000 6-Feb-15 1,324,019 INR 54,931,000 USD 882,020 9-Feb-15 (17,146) MYR 90,000 USD 27,891 9-Feb-15 (2,256) SGD 551,000 USD 442,215 9-Feb-15 (26,617) USD 541,080 EUR 400,000 9-Feb-15 56,884 USD 8,434,508 JPY 852,900,000 9-Feb-15 1,314,205 CLP 53,800,000 USD 92, Feb-15 (4,299) KRW 1,136,628,900 USD 1,040, Feb-15 (3,452) PLN 1,499,000 EUR 350, Feb-15 (1,862) USD 1,184,661 EUR 871, Feb ,316 USD 258,116 JPY 26,206, Feb-15 39,338 PLN 1,499,000 EUR 350, Feb-15 (1,634) USD 698,886 EUR 514, Feb-15 76,685 CLP 122,000,000 USD 211, Feb-15 (11,857) INR 8,408,000 USD 135, Feb-15 (2,740) SGD 3,111,049 USD 2,482, Feb-15 (136,407) USD 916,151 JPY 93,379, Feb ,573 INR 11,020,000 USD 176, Feb-15 (3,293) USD 291,431 EUR 213, Feb-15 33,589 USD 671,800 JPY 68,520, Feb-15 99,753 CLP 284,640,000 USD 497, Feb-15 (30,814) PLN 1,499,000 EUR 352, Feb-15 (3,649) SGD 777,000 USD 622, Feb-15 (36,275) USD 223,442 JPY 22,800, Feb-15 33,087 CLP 163,980,000 USD 280, Feb-15 (11,794) MYR 1,339,798 USD 396, Feb-15 (15,179) SGD 333,000 USD 263, Feb-15 (12,280) USD 768,805 JPY 78,061, Feb ,074 MYR 175,000 USD 52, Feb-15 (2,314) USD 869,477 EUR 634, Feb ,971 CLP 24,840,000 USD 42, Feb-15 (1,855) USD 432,832 EUR 315, Feb-15 51,497 CLP 59,980,000 USD 105, Feb-15 (6,715) INR 10,096,000 USD 161, Feb-15 (2,531) MYR 1,750,000 USD 520, Feb-15 (23,010) SGD 333,000 USD 266, Feb-15 (15,482) USD 2,023,926 EUR 1,472, Feb ,904 CLP 84,400,000 USD 147, Feb-15 (9,562) USD 307,385 JPY 31,360, Feb-15 45,549 CLP 71,800,000 USD 125, Feb-15 (7,584) USD 564,892 EUR 410, Feb-15 67,347 USD 418,150 JPY 42,840, Feb-15 60,461 CLP 98,200,000 USD 170, Feb-15 (10,072) USD 2,811,719 EUR 2,047, Feb ,035 USD 1,989,586 JPY 203,390, Feb ,387 SGD 1,411,000 USD 1,127, Feb-15 (63,094) USD 3,938,584 EUR 2,874, Feb ,151 USD 75,434 JPY 7,689, Feb-15 11,235 CLP 119,900,000 USD 206,938 3-Mar-15 (10,575) INR 19,314,750 USD 306,862 3-Mar-15 (3,861) USD 184,739 EUR 134,000 5-Mar-15 22,504 INR 4,135,000 USD 66,030 9-Mar-15 (1,237) USD 553,864 EUR 402,967 9-Mar-15 65,970 USD 1,067,191 JPY 109,129,300 9-Mar ,914 USD 1,535,337 EUR 1,109, Mar ,601 MYR 3,155,884 USD 950, Mar-15 (54,418) SGD 1,078,141 USD 853, Mar-15 (40,748) MYR 796,380 USD 238, Mar-15 (11,937) PLN 6,340,038 EUR 1,480, Mar-15 (6,710) CLP 134,470,000 USD 228, Mar-15 (8,500) INR 6,186,000 USD 98, Mar-15 (1,631) SGD 938,800 USD 743, Mar-15 (35,341) USD 69,292 EUR 50, Mar-15 8,750 USD 262,576 JPY 26,867, Mar-15 38,202 USD 663,870 EUR 478, Mar-15 85,084 USD 531,456 EUR 382, Mar-15 68,422 USD 1,997,821 JPY 202,503, Mar ,642 CLP 50,200,000 USD 85, Mar-15 (3,061) USD 665,237 EUR 478, Mar-15 86,424 USD 516,990 JPY 52,793, Mar-15 76,072 USD 263,515 EUR 191, Mar-15 32,228 USD 773,364 JPY 78,972, Mar ,793 Unaudited Semi-Annual Report 75

78 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Fundamental Strategies Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 336,025 EUR 244, Mar-15 40,556 MYR 440,000 USD 131, Mar-15 (6,276) USD 81,712 EUR 59, Mar-15 9,825 MYR 5,033,500 USD 1,525,772 2-Apr-15 (98,750) USD 404,980 EUR 293,794 2-Apr-15 49,191 USD 1,031,251 EUR 747,440 7-Apr ,039 MYR 300,000 USD 90, Apr-15 (5,081) USD 1,340,072 EUR 972, Apr ,861 USD 2,195,382 EUR 1,589, Apr ,811 USD 1,088,049 EUR 785, Apr ,277 USD 221,286 JPY 22,400, Apr-15 34,156 CLP 486,390,000 USD 857, Apr-15 (64,201) MYR 1,361,160 USD 410, Apr-15 (25,523) USD 1,288,827 EUR 928, Apr ,661 USD 904,456 JPY 91,900, Apr ,702 MYR 559,964 USD 169, Apr-15 (10,846) USD 541,569 JPY 55,220, Apr-15 80,226 USD 511,025 EUR 370, Apr-15 62,743 USD 657,233 JPY 67,000, Apr-15 97,465 CLP 308,187,000 USD 532, Apr-15 (30,607) USD 1,648,484 EUR 1,190, Apr ,343 USD 732,926 EUR 528,860 5-May-15 92,240 CLP 54,100,000 USD 92, May-15 (4,247) USD 7,886,436 EUR 5,695, May ,721 USD 258,778 JPY 26,207, May-15 39,772 USD 124,020 EUR 90, May-15 14,980 USD 603,490 JPY 61,237, May-15 91,739 USD 399,458 EUR 290, May-15 48,104 USD 257,691 JPY 26,194, May-15 38,788 USD 432,407 EUR 315, May-15 50,747 USD 4,285,000 JPY 435,056, May ,064 SGD 1,064,600 USD 852, May-15 (50,076) USD 17,160,000 JPY 1,740,394, May-15 2,614,656 USD 711,147 EUR 566, May-15 24,620 USD 578,199 JPY 67,843, May-15 11,195 USD 244,881 EUR 195, May-15 8,608 USD 98,181 EUR 71, May-15 11,154 SGD 271,000 USD 208, May-15 (4,683) SGD 1,367,339 USD 1,089, May-15 (59,611) USD 2,107,213 JPY 213,802,000 3-Jun ,036 CLP 141,800,000 USD 249,516 4-Jun-15 (19,086) USD 899,022 JPY 91,761,397 4-Jun ,977 CLP 25,300,000 USD 44,328 5-Jun-15 (3,218) USD 6,178,526 EUR 4,744,173 8-Jun ,105 USD 2,135,334 JPY 218,100,000 9-Jun ,097 USD 926,966 EUR 678, Jun ,741 USD 4,302,522 JPY 439,540, Jun ,082 PLN 629,000 EUR 150, Jun-15 (5,663) USD 1,654,917 JPY 169,060, Jun ,602 PLN 3,226,000 EUR 770, Jun-15 (27,969) SGD 518,000 USD 394, Jun-15 (4,624) USD 1,895,715 EUR 1,398, Jun ,552 MYR 475,981 USD 134, Jun-15 (32) USD 4,681,816 EUR 3,455, Jun ,067 USD 805,626 JPY 81,952, Jun ,470 MYR 2,760,000 USD 835, Jun-15 (58,470) SGD 629,000 USD 478, Jun-15 (4,940) USD 8,213,192 EUR 6,040, Jun ,267 USD 3,072,965 JPY 312,920, Jun ,652 SGD 787,600 USD 600, Jun-15 (7,606) PHP 18,790,000 USD 426, Jun-15 (9,594) PHP 52,679,210 USD 1,193, Jun-15 (25,092) PHP 13,240,000 USD 300, Jun-15 (6,467) USD 1,021,163 EUR 750, Jun ,024 MYR 2,270,500 USD 693,198 2-Jul-15 (54,219) MYR 405,910 USD 124,094 3-Jul-15 (9,868) MYR 3,855,100 USD 1,179,543 7-Jul-15 (94,986) MYR 950,304 USD 293, Jul-15 (26,082) MYR 1,070,000 USD 330, Jul-15 (29,387) USD 1,269,882 EUR 930, Jul ,256 USD 1,854,699 EUR 1,364, Jul ,821 MYR 619,000 EUR 139, Jul-15 4,828 MYR 1,373,000 USD 420, Jul-15 (34,660) USD 412,142 EUR 304, Jul-15 43, Unaudited Semi-Annual Report

79 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Fundamental Strategies Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD MYR 699,000 EUR 158, Jul-15 4,249 MYR 2,165,000 USD 665, Jul-15 (57,183) USD 1,497,597 EUR 1,106, Jul ,440 USD 205,911 EUR 152, Jul-15 21,590 USD 5,825,690 JPY 588,943, Jul ,899 MYR 899,000 EUR 206, Jul-15 2,644 MYR 2,633,000 USD 814, Jul-15 (74,402) USD 1,208,574 EUR 896, Jul ,978 USD 1,230,952 JPY 124,400, Jul ,230 CLP 298,480,000 USD 513, Jul-15 (30,766) USD 215,202 EUR 159, Jul-15 21,727 USD 982,824 JPY 99,710, Jul ,627 CLP 70,700,000 USD 121, Jul-15 (7,137) MYR 899,000 EUR 206, Jul-15 2,523 MYR 2,768,000 USD 855, Jul-15 (78,402) CLP 66,550,000 USD 114, Jul-15 (6,796) MYR 1,115,000 USD 343, Jul-15 (30,201) PLN 4,150,000 EUR 978, Jul-15 (23,160) USD 1,078,257 EUR 802, Jul ,593 CLP 133,100,000 USD 225,746 4-Aug-15 (10,538) USD 2,282,150 EUR 1,700,592 4-Aug ,542 USD 1,393,250 EUR 1,036,400 5-Aug ,205 MYR 90,000 USD 27,536 6-Aug-15 (2,268) SGD 1,860,951 USD 1,494,620 6-Aug-15 (92,843) SGD 551,000 USD 442,641 7-Aug-15 (27,595) USD 367,313 EUR 274, Aug-15 34,231 MYR 40,000 USD 12, Aug-15 (987) USD 1,382,494 EUR 1,032, Aug ,663 USD 1,244,530 JPY 126,796, Aug ,474 CLP 53,900,000 USD 91, Aug-15 (3,984) USD 268,548 EUR 200, Aug-15 25,941 USD 250,971 JPY 25,470, Aug-15 37,828 USD 123,023 EUR 98, Aug-15 3,535 USD 132,239 EUR 98, Aug-15 12,745 CLP 46,220,000 USD 77, Aug-15 (3,236) USD 476,415 EUR 355, Aug-15 45,746 USD 829,309 JPY 84,580, Aug ,435 CLP 24,860,000 USD 41, Aug-15 (1,761) USD 795,622 EUR 593, Aug-15 76,199 USD 2,702,358 JPY 276,126, Aug ,298 USD 368,951 JPY 37,961, Aug-15 51,210 USD 1,091,282 JPY 112,805, Aug ,065 USD 328,776 EUR 247, Aug-15 28,986 USD 1,779,284 JPY 183,793, Aug ,845 CLP 113,480,000 USD 189, Aug-15 (6,214) USD 4,524,951 EUR 3,417, Aug ,989 USD 2,411,872 JPY 249,758, Aug ,235 MYR 5,970,924 USD 1,854, Aug-15 (180,280) USD 130,129 EUR 98, Aug-15 10,745 USD 363,505 JPY 37,600, Aug-15 48,745 USD 211,437 EUR 160,000 2-Sep-15 17,285 CLP 258,950,000 USD 427,592 8-Sep-15 (10,092) USD 7,133,799 EUR 5,473,450 8-Sep ,389 CLP 138,210,000 USD 226,685 9-Sep-15 (3,870) MYR 1,046,049 USD 318, Sep-15 (26,001) USD 251,076 JPY 26,768, Sep-15 26,919 SGD 836,000 USD 662, Sep-15 (32,668) USD 80,632 EUR 61, Sep-15 5,424 USD 931,135 EUR 721, Sep-15 55,938 USD 195,867 EUR 151, Sep-15 11,468 PHP 9,270,000 USD 206, Sep-15 (887) USD 738,759 EUR 573, Sep-15 42,787 USD 246,788 JPY 26,810, Sep-15 22,225 USD 152,355 JPY 16,537, Sep-15 13,840 USD 2,003,143 EUR 1,585,000 7-Oct-15 78,586 USD 25,894,281 JPY 2,815,067,140 7-Oct-15 2,310,624 USD 7,730,110 JPY 832,900,000 9-Oct ,982 USD 7,781,252 JPY 837,600, Oct ,984 USD 51,440,001 EUR 40,263, Oct-15 2,543,345 USD 7,923,937 EUR 6,230, Oct ,850 USD 12,425,921 EUR 9,742, Oct ,372 USD 58,989 JPY 6,235, Oct-15 6,738 MYR 776,000 USD 231, Oct-15 (15,104) USD 1,220,221 EUR 953, Oct-15 62,704 USD 111,421 JPY 11,780, Oct-15 12,697 Unaudited Semi-Annual Report 77

80 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Fundamental Strategies Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 810,638 JPY 86,260, Oct-15 87,687 MYR 1,398,000 USD 418, Oct-15 (27,664) MYR 1,743,725 USD 523, Oct-15 (36,405) USD 1,063,715 EUR 838, Oct-15 45,734 USD 585,795 EUR 461, Oct-15 25,447 MYR 746,000 USD 223, Oct-15 (15,140) USD 1,457,153 EUR 1,159,000 4-Nov-15 48,930 USD 9,300,470 JPY 1,049,000,000 6-Nov ,131 USD 13,440,736 EUR 10,720,000 9-Nov ,054 USD 378,432 EUR 303, Nov-15 10,225 USD 173,163 JPY 19,740, Nov-15 7,626 USD 3,808,956 EUR 3,038, Nov ,792 USD 760,860 JPY 86,638, Nov-15 34,325 USD 432,473 JPY 49,560, Nov-15 16,818 USD 756,413 EUR 607, Nov-15 18,645 USD 651,216 JPY 75,528, Nov-15 17,744 MYR 716,680 USD 209, Nov-15 (9,907) USD 381,246 EUR 304, Nov-15 11,746 USD 807,288 JPY 93,488, Nov-15 23,160 MYR 447,000 USD 130, Nov-15 (5,832) USD 3,242,078 EUR 2,583, Nov ,466 USD 906,074 JPY 105,014, Nov-15 25,249 USD 168,589 JPY 19,708, Nov-15 3,266 USD 1,771,228 EUR 1,420, Nov-15 44,946 USD 3,783,927 EUR 3,032,000 4-Dec-15 97,343 USD 1,686,488 EUR 1,365,437 9-Dec-15 26,068 PLN 1,675,000 EUR 394, Dec-15 (11,451) USD 1,764,456 EUR 1,419, Dec-15 38,657 USD 5,349,189 JPY 625,240, Dec ,432 USD 3,093,703 JPY 365,500, Dec-15 25,325 The above contracts were opened with the following counterparties: 33,576,595 24,735,005 Bank of America 677,777 Barclays Bank 5,963,838 Citibank 2,538,878 Credit Suisse (905,982) Deutsche Bank 8,841,383 Goldman Sachs (121,896) HSBC Bank 1,393,231 JPMorgan Chase Bank 6,626,156 Morgan Stanley (855,449) Royal Bank of Scotland (484,702) The Bank of New York Mellon (169,551) UBS (280,789) Standard Chartered Bank 1,512,111 Franklin Global Government Bond Fund 24,735,005 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management USD 928,231 AUD 1,120, Mar-15 18,310 USD 2,288,006 EUR 1,850, Mar-15 48,094 USD 590,297 PLN 2,000, Mar-15 27,076 The above contracts were opened with the following counterparties: 93,480 Barclays Bank 45,386 Citibank 48,094 93, Unaudited Semi-Annual Report

81 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Growth Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 7,526,919 USD 9,325, Jan-15 (216,243) USD 282,078 EUR 227, Jan-15 7,095 The above contracts were opened with the following counterparties: (209,148) Bank of America (14,393) Barclays Bank (8,986) Citibank (811) Credit Suisse (15,743) Deutsche Bank (3,147) Goldman Sachs (15,093) HSBC Bank (9,985) JPMorgan Chase Bank (13,234) Morgan Stanley (18,254) Royal Bank of Scotland (96,065) The Bank of New York Mellon (2,210) UBS (11,227) Franklin Global High Income Bond Fund (209,148) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging SGD 1,361,335 USD 1,029, Jan-15 (2,090) USD 355,656 SGD 469, Jan-15 1,202 Forward foreign exchange contracts used for efficient portfolio management EUR 1,294,681 USD 1,778,648 9-Jan-15 (211,927) GBP 300,000 USD 497,610 9-Jan-15 (30,034) EUR 5,210,148 USD 7,126,499 9-Mar-15 (818,302) USD 2,092,236 EUR 1,565,100 9-Mar ,288 EUR 999,300 USD 1,333,691 7-May-15 (123,064) GBP 723,959 USD 1,166,567 7-May-15 (39,313) The above contracts were opened with the following counterparties: (888) (1,025,352) (1,026,240) Bank of America (39) Barclays Bank 171 Citibank 282 Credit Suisse (866) Deutsche Bank (1,025,352) Goldman Sachs (43) JPMorgan Chase Bank (222) Royal Bank of Scotland (29) The Bank of New York Mellon (44) UBS (98) Franklin Global Listed Infrastructure Fund (1,026,240) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging GBP 787,164 USD 1,229, Jan-15 (2,517) SGD 1,428,539 USD 1,080, Jan-15 (2,190) USD 64,997 GBP 41, Jan USD 45,011 SGD 59, Jan (3,753) Unaudited Semi-Annual Report 79

82 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Listed Infrastructure Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Barclays Bank (26) Citibank 91 Credit Suisse 78 Deutsche Bank (1,136) Goldman Sachs (1,428) HSBC Bank (295) JPMorgan Chase Bank (354) Morgan Stanley (165) Royal Bank of Scotland (97) UBS (421) Franklin Global Real Estate Fund (3,753) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 24,413,207 USD 30,086, Jan-15 (539,651) USD 1,133,973 EUR 927, Jan-15 11,883 The above contracts were opened with the following counterparties: (527,768) Bank of America (12,275) Barclays Bank (12,766) Citibank (9,453) Credit Suisse (40,147) Deutsche Bank (4,556) Goldman Sachs (45,377) HSBC Bank (113,475) JPMorgan Chase Bank (5,823) Morgan Stanley (43,399) Royal Bank of Scotland (209,331) The Bank of New York Mellon (6,949) UBS (24,217) Franklin Gold and Precious Metals Fund (527,768) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 6,007,161 USD 6,149, Jan-15 (105,199) EUR 6,155,036 USD 7,587, Jan-15 (138,757) USD 268,156 CHF 264, Jan-15 1,880 USD 332,643 EUR 273, Jan-15 2,025 The above contracts were opened with the following counterparties: (240,051) Bank of America (5,777) Barclays Bank (2,159) Citibank (7,439) Credit Suisse (19,308) Deutsche Bank (682) Goldman Sachs (59,691) HSBC Bank (39,364) JPMorgan Chase Bank (12,252) Morgan Stanley (9,387) Royal Bank of Scotland (59,827) The Bank of New York Mellon (13,507) UBS (10,658) (240,051) 80 Unaudited Semi-Annual Report

83 Franklin High Yield Fund Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging AUD 17,193,912 USD 14,242, Jan-15 (216,720) EUR 33,717,948 USD 41,435, Jan-15 (631,131) SGD 55,700,073 USD 42,126, Jan-15 (94,827) USD 1,174,573 AUD 1,423, Jan-15 13,190 USD 2,157,984 EUR 1,736, Jan-15 56,428 USD 2,816,742 SGD 3,692, Jan-15 30,457 (842,603) Forward foreign exchange contracts used for efficient portfolio management EUR 4,356,741 USD 5,349,251 9-Jan-15 (77,069) USD 11,774,042 EUR 8,691,896 9-Jan-15 1,255,800 USD 4,413,312 EUR 3,200,000 9-Feb ,745 The above contracts were opened with the following counterparties: 1,718, ,873 Bank of America (166,768) Barclays Bank (4,724) Citibank 2,983 Credit Suisse (1,043) Deutsche Bank 1,699,682 Goldman Sachs (199,645) HSBC Bank (148,007) JPMorgan Chase Bank (59,688) Morgan Stanley (36,742) Royal Bank of Scotland (29,636) UBS (180,539) 875,873 Franklin Income Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 29,713,347 USD 36,630, Jan-15 (669,047) SGD 33,866,523 USD 25,775, Jan-15 (225,169) The above contracts were opened with the following counterparties: (894,216) Bank of America (121,285) Barclays Bank (44,851) Citibank (42,066) Credit Suisse (42,206) Deutsche Bank (111,329) Goldman Sachs (192,444) HSBC Bank (126,529) JPMorgan Chase Bank (143,742) Morgan Stanley (7,130) Royal Bank of Scotland (8,186) UBS (54,448) (894,216) Franklin India Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging PLN 56,383,374 USD 16,530, Jan-15 (612,767) USD 1,121,577 PLN 3,819, Jan-15 43,225 (569,542) Unaudited Semi-Annual Report 81

84 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin India Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Bank of America (4,992) Barclays Bank (7,388) Citibank (12,175) Credit Suisse (28,909) Deutsche Bank (33,958) Goldman Sachs (180,774) HSBC Bank (18,147) JPMorgan Chase Bank (127,223) Morgan Stanley (22,566) Royal Bank of Scotland (47,434) The Bank of New York Mellon (3,219) UBS (82,757) Franklin K2 Alternative Strategies Fund (569,542) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 600 USD Jan-15 (3) EUR 2,856,675 USD 3,536, Jan-15 (79,277) GBP 1,854,785 USD 2,908, Jan-15 (18,123) JPY 106,552,863 USD 893, Jan-15 (3,410) SGD 1,256,599 USD 955, Jan-15 (6,942) (107,755) Forward foreign exchange contracts used for efficient portfolio management MXN 2,150,000 USD 145,881 2-Jan-15 (156) USD 154,368 MXN 2,150,000 2-Jan-15 8,642 SGD 43,000 USD 32,595 5-Jan-15 (133) USD 1,456 JPY 175,648 5-Jan-15 (11) USD 32,779 SGD 43,000 5-Jan AUD 71,000 USD 59,507 8-Jan-15 (1,555) KRW 27,700,000 USD 25,104 8-Jan USD 63,711 KRW 71,200,000 8-Jan-15 (1,056) USD 31,833 MYR 110,000 8-Jan USD 60,591 NZD 78,000 8-Jan-15 (235) USD 32,196 TWD 1,000,000 8-Jan USD 76,459 TRY 175, Jan-15 1,647 USD 983,813 EUR 795, Jan-15 21,712 USD 156,990 GBP 100, Jan-15 1,143 USD 42,862 SEK 324, Jan-15 1,299 JPY 11,000,000 USD 93, Jan-15 (1,453) USD 91,328 EUR 75, Jan USD 145,600 MXN 2,150,000 3-Feb USD 68,333 CAD 79, Feb-15 (118) USD 38,914 EUR 31, Feb USD 103,029 GBP 66, Feb-15 (273) USD 60,392 KRW 66,690, Feb-15 (128) USD 15,185 ZAR 178, Feb-15 (133) AUD 50,000 USD 40, Mar CHF 235,000 USD 240, Mar-15 (3,970) EUR 65,000 USD 79, Mar-15 (913) GBP 195,000 USD 304, Mar-15 (1,200) JPY 66,335,000 USD 559, Mar-15 (5,809) MXN 142,000 USD 9, Mar-15 (55) NZD 250,000 USD 193, Mar-15 (121) USD 1,157,293 AUD 1,412, Mar-15 10,547 USD 1,193,325 CAD 1,387, Mar-15 1,379 USD 1,204,579 CHF 1,166, Mar-15 29,316 USD 1,092,934 EUR 884, Mar-15 22,540 USD 1,555,963 GBP 995, Mar-15 6,054 USD 250,121 JPY 29,707, Mar-15 1,948 USD 574,527 MXN 8,427, Mar-15 5,921 USD 574,693 NZD 745, Mar-15 (2,370) 94,966 (12,789) 82 Unaudited Semi-Annual Report

85 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Bank of America 2,199 Barclays Bank (963) Deutsche Bank 7,356 JPMorgan Chase Bank (75,140) Morgan Stanley 53,759 Franklin MENA Fund (12,789) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 34,400,689 USD 42,577, Jan-15 (945,396) USD 7,237,400 EUR 5,815, Jan ,005 The above contracts were opened with the following counterparties: (746,391) Bank of America (24,400) Barclays Bank (81,861) Citibank (211,629) Credit Suisse (33,689) Deutsche Bank (22,301) Goldman Sachs (56,590) HSBC Bank (124,176) JPMorgan Chase Bank (97,645) Morgan Stanley (12,833) Royal Bank of Scotland (74,199) The Bank of New York Mellon (2,453) UBS (4,615) Franklin Multi-Asset Income Fund (746,391) Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for efficient portfolio management CAD 300,000 USD 263, Jan-15 (4,284) EUR 201,782 GBP 160, Jan-15 (4,248) EUR 250,000 USD 311, Jan-15 (7,368) GBP 230,000 EUR 289, Jan-15 6,432 MXN 3,400,000 USD 249, Jan-15 (16,084) PLN 800,000 EUR 190, Jan-15 (3,497) USD 381,178 EUR 300, Jan-15 14,953 The above contracts were opened with the following counterparties: (14,096) Barclays Bank (4,284) Citibank (8,499) Deutsche Bank 2,184 Morgan Stanley (3,497) Franklin Natural Resources Fund (14,096) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 349,828 USD 358, Jan-15 (6,319) EUR 670,052 USD 826, Jan-15 (15,196) PLN 16,567,729 USD 4,805, Jan-15 (129,534) USD 1,170,176 PLN 4,139, Jan-15 1,986 (149,063) Unaudited Semi-Annual Report 83

86 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Natural Resources Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Bank of America (1,318) Barclays Bank (2,118) Citibank (1,808) Credit Suisse (7,982) Deutsche Bank (661) Goldman Sachs (40,967) HSBC Bank (5,271) JPMorgan Chase Bank (10,340) Morgan Stanley (18,992) Royal Bank of Scotland (4,140) The Bank of New York Mellon (2,443) UBS (53,023) Franklin Real Return Fund (149,063) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contract used for share class hedging EUR 2,111,776 USD 2,603, Jan-15 (48,170) Forward foreign exchange contracts used for efficient portfolio management SEK 913,360 USD 140,115 9-Feb-15 (22,989) USD 43,223 EUR 31,100 9-Feb-15 5,577 USD 122,950 SEK 913,360 9-Feb-15 5,823 USD 126,629 EUR 92,000 9-Mar-15 15,240 SGD 248,950 USD 199,980 7-May-15 (12,415) USD 134,820 EUR 100,000 7-May-15 13,673 USD 12,198 EUR 9, Jun The above contracts were opened with the following counterparties: 5,351 (42,819) Bank of America (1,055) Barclays Bank (201) Citibank (1,310) Credit Suisse (3,518) Deutsche Bank (22,293) Goldman Sachs (6,524) HSBC Bank (1,449) JPMorgan Chase Bank 4,787 Morgan Stanley (1,078) Royal Bank of Scotland (2,134) UBS (8,044) Franklin Strategic Income Fund (42,819) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging AUD 1,929,362 USD 1,577, Jan-15 (4,921) EUR 295,059,870 USD 363,827, Jan-15 (6,726,258) (6,731,179) Forward foreign exchange contracts used for efficient portfolio management JPY 41,515,000 USD 344,066 7-Jan-15 2,419 MYR 76,200 USD 22,746 7-Jan-15 (969) USD 398,149 JPY 41,515,000 7-Jan-15 51,664 USD 21,787 MYR 76,200 7-Jan CLP 1,100,880,000 USD 1,935,397 9-Jan-15 (123,428) EUR 8,134,839 USD 10,440,642 9-Jan-15 (596,505) INR 457,251,000 USD 6,834,659 9-Jan ,343 JPY 162,825,000 USD 1,503,740 9-Jan-15 (144,777) SGD 356,500 USD 282,922 9-Jan-15 (13,886) USD 26,772,936 EUR 19,554,200 9-Jan-15 3,109, Unaudited Semi-Annual Report

87 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Strategic Income Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 525,677 GBP 321,751 9-Jan-15 24,200 USD 16,228,047 JPY 1,659,752,000 9-Jan-15 2,375,496 CLP 146,940,000 USD 267, Jan-15 (25,471) CLP 76,687,500 USD 129,649 9-Feb-15 (3,843) INR 213,197,000 USD 3,244,552 9-Feb ,177 MYR 745,303 USD 223,546 9-Feb-15 (11,262) SEK 143,528,000 USD 22,018,056 9-Feb-15 (3,612,349) SGD 665,600 USD 525,594 9-Feb-15 (23,558) USD 26,922,125 EUR 19,479,768 9-Feb-15 3,342,069 USD 6,920,074 JPY 705,216,600 9-Feb-15 1,032,682 USD 11,001,469 SEK 83,200,000 9-Feb ,089 CLP 3,365,428,000 USD 5,875,886 9-Mar-15 (367,040) GBP 205,349 USD 345,643 9-Mar-15 (25,740) SGD 5,146,640 USD 4,105,180 9-Mar-15 (224,204) USD 43,572,532 EUR 31,610,357 9-Mar-15 5,300,221 USD 1,647,796 GBP 982,871 9-Mar ,628 USD 30,426,335 JPY 3,099,897,500 9-Mar-15 4,540,860 CLP 1,263,519,200 USD 2,105,463 7-May-15 (47,417) INR 94,900,000 USD 1,501,955 7-May-15 (30,147) MYR 1,764,220 USD 534,346 7-May-15 (35,605) SGD 201,500 USD 161,394 7-May-15 (9,578) USD 46,442,181 EUR 35,260,602 7-May-15 3,724,883 USD 3,518,242 GBP 2,164,467 7-May ,016 USD 13,886,723 JPY 1,459,934,950 7-May-15 1,687,105 CLP 645,158,200 USD 1,048, Jun-15 (1,110) INR 320,000,000 USD 5,021, Jun-15 (92,002) MYR 155,520 USD 44, Jun-15 (1,184) USD 10,272,445 EUR 8,222, Jun ,514 USD 28,768,434 JPY 3,308,900, Jun-15 1,104,187 The above contracts were opened with the following counterparties: 22,327,483 15,596,304 Bank of America (261,419) Barclays Bank 291,553 Citibank (175,544) Credit Suisse (402,689) Deutsche Bank 17,559,921 Goldman Sachs (405,340) HSBC Bank (992,320) JPMorgan Chase Bank 1,799,704 Morgan Stanley (252,201) Royal Bank of Scotland (268,330) The Bank of New York Mellon (31,618) UBS (1,265,413) Franklin U.S. Equity Fund 15,596,304 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 20,122,452 USD 24,814, Jan-15 (460,930) USD 12,478,196 EUR 10,133, Jan ,175 The above contracts were opened with the following counterparties: (246,755) Bank of America (33,288) Barclays Bank (2,487) Citibank (5,748) Credit Suisse (82,948) Deutsche Bank (3,856) Goldman Sachs (19,907) HSBC Bank (65,620) JPMorgan Chase Bank (15,070) Morgan Stanley 67,600 Royal Bank of Scotland (49,613) The Bank of New York Mellon (522) UBS (35,296) (246,755) Unaudited Semi-Annual Report 85

88 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin U.S. Focus Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 9,821,775 USD 12,167, Jan-15 (281,194) USD 1,157,950 EUR 940, Jan-15 19,414 The above contracts were opened with the following counterparties: (261,780) Bank of America (25,900) Barclays Bank (9,493) Citibank (29,436) Credit Suisse (4,070) Deutsche Bank (9,556) Goldman Sachs (37,004) HSBC Bank (29,679) JPMorgan Chase Bank (24,797) Morgan Stanley (8,983) Royal Bank of Scotland (49,063) The Bank of New York Mellon (442) UBS (33,357) Franklin U.S. Government Fund (261,780) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 28,286,794 USD 34,745, Jan-15 (513,655) JPY 73,590,694 USD 608, Jan-15 5,565 The above contracts were opened with the following counterparties: (508,090) Bank of America (28,552) Citibank (98,509) Credit Suisse (17,143) Deutsche Bank (146,246) Goldman Sachs (54,181) HSBC Bank (31,011) JPMorgan Chase Bank (15,730) Morgan Stanley (116,718) Franklin U.S. Low Duration Fund (508,090) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 47,977,281 USD 58,938, Jan-15 (878,076) USD 12,983,179 EUR 10,616, Jan ,046 (742,030) Forward foreign exchange contracts used for efficient portfolio management CAD 2,833,000 USD 2,552,780 9-Jan-15 (113,652) JPY 812,288,000 USD 7,602,134 9-Jan-15 (822,651) SGD 6,136,000 USD 4,803,507 9-Jan-15 (172,913) USD 27,768,841 EUR 20,465,802 9-Jan-15 3,002,753 USD 46,603,559 JPY 4,827,245,000 9-Jan-15 6,314,613 USD 2,497,395 SGD 3,307,800 9-Jan-15 1,131 USD 209,234 DKK 1,200, Jan-15 14,236 USD 2,945,696 EUR 2,258,000 6-Feb ,470 CAD 619,000 USD 553,959 9-Feb-15 (21,383) CLP 1,215,543,000 USD 2,117,456 9-Feb-15 (123,346) USD 1,988,172 CLP 1,215,543,000 9-Feb-15 (5,938) USD 3,634,481 EUR 2,620,885 9-Feb ,926 USD 3,374,798 GBP 2,050,240 9-Feb ,101 USD 5,447,936 EUR 4,160,000 6-Mar ,343 CAD 354,080 USD 322,771 9-Mar-15 (18,315) CLP 540,200,000 USD 942,145 9-Mar-15 (57,896) EUR 3,311,257 SEK 30,668,200 9-Mar-15 75,868 SEK 30,668,200 EUR 3,362,446 9-Mar-15 (137,845) SGD 2,511,500 USD 2,003,430 9-Mar-15 (109,559) USD 879,805 CLP 540,200,000 9-Mar-15 (4,445) 86 Unaudited Semi-Annual Report

89 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin U.S. Low Duration Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 22,131,272 EUR 16,192,186 9-Mar-15 2,526,549 USD 9,690,470 JPY 990,199,500 9-Mar-15 1,421,880 CHF 2,829,063 USD 3,129, Apr-15 (277,898) USD 3,184,805 CHF 2,829, Apr ,210 USD 30,939,091 EUR 23,146,166 7-May-15 2,898,115 USD 1,697,878 AUD 2,122, Jun-15 (14,527) USD 8,855,632 EUR 7,083, Jun ,884 USD 7,498,698 DKK 43,200, Oct ,816 USD 7,205,777 DKK 41,200, Jan ,933 USD 2,956,194 EUR 2,258,000 5-Feb ,626 USD 3,021,510 EUR 2,300,000 7-Apr ,692 USD 5,937,800 EUR 4,400,000 5-Aug ,790 USD 1,725,840 JPY 176,035,709 2-Sep ,669 USD 7,090,720 DKK 40,800, Oct ,313 The above contracts were opened with the following counterparties: 18,762,550 18,020,520 Bank of America (65,785) Barclays Bank 141,510 Citibank 329,312 Credit Suisse (47,146) Deutsche Bank 16,202,441 Goldman Sachs 77,560 HSBC Bank 299,728 JPMorgan Chase Bank 1,456,521 Morgan Stanley (273,445) UBS (100,176) Franklin U.S. Opportunities Fund 18,020,520 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 11,319,085 USD 11,593, Jan-15 (204,974) CNH 6,082,164 USD 973, Jan-15 3,337 EUR 128,811,507 USD 158,803, Jan-15 (2,906,924) NOK 21,289,009 USD 2,890, Jan-15 (42,249) PLN 93,169,239 USD 27,029, Jan-15 (736,837) SEK 47,280,747 USD 6,168, Jan-15 (105,536) SGD 41,648,784 USD 31,707, Jan-15 (285,108) USD 3,668,759 EUR 2,974, Jan-15 68,652 The above contracts were opened with the following counterparties: (4,209,639) Bank of America (308,257) Barclays Bank (46,175) Citibank (86,110) Credit Suisse (99,580) Deutsche Bank (31,081) Goldman Sachs (391,145) HSBC Bank (655,154) JPMorgan Chase Bank (260,716) Morgan Stanley (1,089,377) Royal Bank of Scotland (399,251) The Bank of New York Mellon (99,380) UBS (743,413) Franklin U.S. Total Return Fund (4,209,639) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management MYR 35,600 USD 10,627 7-Jan-15 (453) USD 10,179 MYR 35,600 7-Jan-15 5 CAD 566,000 USD 510,021 9-Jan-15 (22,712) CLP 44,400,000 USD 76,618 9-Jan-15 (3,539) Unaudited Semi-Annual Report 87

90 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin U.S. Total Return Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD EUR 137,534 USD 191,392 9-Jan-15 (24,960) SGD 631,300 USD 500,436 9-Jan-15 (24,019) USD 105,623 CAD 117,400 9-Jan-15 4,545 USD 72,787 CLP 44,400,000 9-Jan-15 (292) USD 1,611,073 EUR 1,182,453 9-Jan ,161 USD 5,287,182 JPY 544,756,000 9-Jan ,561 USD 27,875 DKK 160, Jan-15 1,875 USD 263,447 EUR 202,000 6-Feb-15 18,934 CAD 125,000 USD 111,866 9-Feb-15 (4,318) SEK 5,219,200 USD 800,657 9-Feb-15 (131,358) SGD 165,300 USD 130,530 9-Feb-15 (5,851) USD 525,824 EUR 379,999 9-Feb-15 65,838 USD 68,560 JPY 7,024,000 9-Feb-15 9,921 USD 702,572 SEK 5,219,200 9-Feb-15 33,274 CLP 20,510,000 USD 36,117 9-Mar-15 (2,544) MYR 113,216 USD 33,978 9-Mar-15 (1,812) SGD 174,550 USD 139,369 9-Mar-15 (7,745) USD 33,450 CLP 20,510,000 9-Mar-15 (123) USD 3,477,055 EUR 2,542,215 9-Mar ,065 USD 3,518,535 JPY 358,760,750 9-Mar ,727 CHF 308,625 USD 341, Apr-15 (30,310) USD 347,551 CHF 308, Apr-15 36,468 CLP 145,690,000 USD 251,128 7-May-15 (13,825) PHP 11,625,000 USD 264,055 7-May-15 (5,744) USD 236,371 CLP 145,690,000 7-May-15 (933) USD 3,605,515 EUR 2,702,672 7-May ,296 USD 306,062 JPY 32,810,000 7-May-15 31,892 USD 99,466 PHP 4,470,000 7-May USD 606,142 EUR 460,000 5-Jun-15 48,690 CLP 63,827,000 USD 107, Jun-15 (4,115) MYR 72,760 USD 21, Jun-15 (559) SGD 376,902 USD 291, Jun-15 (7,912) USD 299,625 AUD 374, Jun-15 (2,563) USD 103,163 CLP 63,827, Jun-15 (437) USD 1,723,917 EUR 1,386, Jun-15 43,945 USD 72,474 EUR 56, Jun-15 4,134 USD 901,573 DKK 5,160, Jan-16 58,083 USD 264,388 EUR 202,000 5-Feb-16 18,413 USD 364,144 EUR 275,000 5-Aug-16 27,831 USD 710,640 JPY 72,485,291 2-Sep-16 97,864 The above contracts were opened with the following counterparties: 2,379,539 Barclays Bank 30,026 Citibank 50,974 Deutsche Bank 2,026,442 Goldman Sachs 15,800 HSBC Bank 35,233 JPMorgan Chase Bank 239,100 Morgan Stanley (18,036) Franklin World Perspectives Fund 2,379,539 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contract used for efficient portfolio management USD 16,241,149 JPY 1,945,852, Mar-15 (10,673) The above contract was opened with the following counterparty: Deutsche Bank (10,673) Franklin Mutual Beacon Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 25,855,921 USD 32,031, Jan-15 (741,071) USD 3,593,177 EUR 2,905, Jan-15 76,734 (664,337) 88 Unaudited Semi-Annual Report

91 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Mutual Beacon Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management EUR 852,214 USD 1,060, Jan-15 (28,840) USD 1,270,382 EUR 953, Jan ,836 GBP 2,806,476 USD 4,636, Jan-15 (262,357) USD 19,604,926 GBP 11,487, Jan-15 1,701,618 CHF 1,491,929 USD 1,540, Feb-15 (39,124) KRW 540,783,158 USD 493, Feb-15 (45) USD 2,961,283 CHF 2,707, Feb ,371 USD 12,236,223 KRW 12,774,915, Feb ,590 GBP 3,200,365 USD 5,159, Feb-15 (172,592) USD 29,490,398 GBP 18,163, Feb-15 1,189,840 USD 5,809,215 EUR 4,451, Feb ,010 USD 3,747,059 EUR 2,979, Apr ,395 USD 15,888,583 GBP 9,890, Apr ,429 USD 13,166,826 EUR 10,549, May ,031 GBP 476,301 USD 743, May-15 (2,175) USD 12,506,935 GBP 7,995, May-15 59,057 The above contracts were opened with the following counterparties: 4,810,044 4,145,707 Bank of America 664,790 Barclays Bank (69,593) Citibank (13,941) Credit Suisse 919,557 Deutsche Bank 981,228 Goldman Sachs (170,312) HSBC Bank 736,004 JPMorgan Chase Bank (35,158) Morgan Stanley (22,395) Royal Bank of Scotland (46,065) Standard Chartered 239,999 State Street Bank 993,575 The Bank of New York Mellon (10,060) UBS (21,922) Franklin Mutual European Fund 4,145,707 Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for share class hedging CNH 6,007,656 EUR 779, Jan-15 17,389 CZK 280,228,928 EUR 10,164, Jan-15 (50,722) USD 24,609,213 EUR 19,967, Jan ,879 The above contracts were opened with the following counterparties: 332,546 Bank of America 1,209 Barclays Bank 9,876 Citibank 3,752 Credit Suisse 6,353 Deutsche Bank 35,213 Goldman Sachs 23,698 HSBC Bank 235,883 JPMorgan Chase Bank 315 Morgan Stanley (1,021) Royal Bank of Scotland (1,678) The Bank of New York Mellon 11,713 UBS 7, ,546 Unaudited Semi-Annual Report 89

92 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Mutual Global Discovery Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 29,273,703 GBP 22,992, Jan-15 (398,922) EUR 14,170,789 HKD 134,808, Jan-15 (233,856) EUR 88,415,302 USD 108,487, Jan-15 (1,473,882) GBP 336,900 EUR 429, Jan-15 4,915 The above contracts were opened with the following counterparties: (2,101,745) Bank of America (2,014,291) Barclays Bank (8,580) Deutsche Bank (78,874) Templeton Africa Fund (2,101,745) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 731,869 USD 747, Jan-15 (11,498) EUR 30,901,488 USD 37,951, Jan-15 (555,268) USD 69,050 CHF 66, Jan-15 1,757 USD 4,633,723 EUR 3,744, Jan ,781 The above contracts were opened with the following counterparties: (462,228) Bank of America (28,406) Barclays Bank (660) Citibank (2,717) Credit Suisse (18,210) Deutsche Bank (2,590) Goldman Sachs (170,996) HSBC Bank (35,279) JPMorgan Chase Bank (95,694) Morgan Stanley (30,404) Royal Bank of Scotland (913) The Bank of New York Mellon (4,340) UBS (72,019) Templeton Asian Bond Fund (462,228) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging AUD 1,707,837 USD 1,396, Jan-15 (4,257) CHF 80,121,703 USD 82,082, Jan-15 (1,466,153) EUR 191,078,522 USD 235,618, Jan-15 (4,361,912) SGD 16,956,017 USD 12,909, Jan-15 (116,961) USD 27,705,714 EUR 22,471, Jan ,670 (5,439,613) Forward foreign exchange contracts used for efficient portfolio management USD 2,458,623 JPY 256,041,000 7-Jan ,702 MYR 3,690,700 USD 1,099,961 8-Jan-15 (45,321) USD 2,619,562 JPY 273,980, Jan ,803 USD 7,865,907 JPY 821,830, Jan-15 1,006,487 USD 8,370,769 JPY 870,560, Jan-15 1,104,560 MYR 889,000 USD 267, Jan-15 (14,039) USD 12,927,791 JPY 1,335,850, Jan-15 1,777,899 USD 4,277,727 JPY 442,210, Jan ,395 USD 5,481,632 JPY 560,677, Jan ,361 MYR 1,216,000 USD 359,349 4-Feb-15 (12,839) MYR 297,049,400 USD 88,341, Feb-15 (3,862,796) USD 2,732,036 JPY 279,154, Feb ,247 MYR 81,713,698 USD 24,465, Mar-15 (1,257,653) SGD 6,706,000 USD 5,090, Mar-15 (34,539) MYR 32,041,000 USD 9,519, Mar-15 (432,934) MYR 4,510,000 USD 1,343, Mar-15 (64,325) 90 Unaudited Semi-Annual Report

93 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Asian Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD MYR 14,010,000 USD 4,206, Apr-15 (237,262) USD 8,828,716 JPY 893,700, Apr-15 1,362,716 CNH 650,634,720 USD 103,200, May ,477 USD 58,708,100 CNH 365,000, May ,936 USD 2,027,306 JPY 237,874, May-15 39,251 SGD 180,190,400 USD 143,496, Jun-15 (7,764,840) USD 47,216,137 SGD 62,500, Jun ,891 USD 1,015,069 JPY 103,265, Jun ,727 USD 6,924,004 JPY 701,592, Jun-15 1,057,410 USD 32,223,750 JPY 3,256,500,000 1-Jul-15 4,992,952 USD 4,348,041 JPY 440,000, Jul ,167 USD 4,982,036 JPY 505,440, Jul ,404 MYR 3,236,000 USD 996, Jul-15 (87,652) MYR 22,942,148 USD 7,019,382 6-Aug-15 (578,223) USD 10,417,318 JPY 1,065,900,000 7-Aug-15 1,498,285 USD 2,195,701 JPY 223,687, Aug ,839 USD 1,099,144 JPY 112,100, Aug ,947 USD 8,031,029 JPY 820,609, Aug-15 1,162,870 USD 1,088,134 JPY 111,957, Aug ,032 USD 3,218,432 JPY 332,687, Aug ,726 USD 5,287,745 JPY 546,202, Aug ,762 USD 7,846,058 JPY 812,433, Aug-15 1,045,464 USD 11,707,456 JPY 1,210,990, Aug-15 1,569,943 USD 397,448 JPY 43,140, Sep-15 36,105 MYR 3,881,000 USD 1,159, Oct-15 (75,540) USD 74,338,683 JPY 7,909,983, Oct-15 8,044,520 MYR 3,992,000 USD 1,193, Oct-15 (78,996) MYR 200,229,830 USD 60,089, Oct-15 (4,180,356) MYR 1,866,000 USD 558, Oct-15 (37,869) USD 2,127,730 JPY 242,566, Nov-15 93,710 USD 7,774,205 JPY 883,798, Nov ,791 USD 2,110,197 JPY 241,579, Nov-15 84,122 USD 2,283,282 JPY 264,815, Nov-15 62,215 MYR 2,742,080 USD 802, Nov-15 (37,908) USD 2,830,508 JPY 327,787, Nov-15 81,205 MYR 1,666,000 USD 486, Nov-15 (21,738) USD 3,176,885 JPY 368,201, Nov-15 88,527 USD 591,112 JPY 69,101, Nov-15 11,451 The above contracts were opened with the following counterparties: 13,491,069 8,051,456 Bank of America (1,024,224) Barclays Bank 3,225,420 Citibank 9,825,804 Credit Suisse (701,719) Deutsche Bank (1,427,833) Goldman Sachs 121,151 HSBC Bank (4,937,559) JPMorgan Chase Bank 3,209,634 Morgan Stanley (2,010,904) Royal Bank of Scotland (1,016,446) The Bank of New York Mellon (69,600) UBS (715,324) Standard Chartered Bank 3,573,056 Templeton Asian Dividend Fund 8,051,456 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging SGD 1,177,870 USD 890, Jan-15 (1,693) USD 20,008 SGD 26, Jan (1,382) Unaudited Semi-Annual Report 91

94 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Asian Dividend Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Barclays Bank 240 Citibank (125) Credit Suisse (20) Deutsche Bank (1,120) Goldman Sachs (52) JPMorgan Chase Bank (15) Morgan Stanley (154) Royal Bank of Scotland (42) UBS (94) Templeton Asian Growth Fund (1,382) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 6,091,995 PKR 806,580,100 6-Jan-15 (613,427) CHF 49,275,290 USD 50,817, Jan-15 (1,241,731) CNH 41,221,820 USD 6,631, Jan-15 (9,808) CZK 143,296,045 USD 6,432, Jan-15 (173,540) EUR 354,669,046 USD 439,430, Jan-15 (10,209,992) PLN 214,009,255 USD 63,370, Jan-15 (2,961,360) SGD 7,974,788 USD 6,062, Jan-15 (44,753) USD 2,118,257 CHF 2,036, Jan-15 69,060 USD 306,740 CNH 1,906, Jan USD 186,255 CZK 4,123, Jan-15 6,170 USD 21,575,282 EUR 17,283, Jan ,273 USD 4,772,832 PLN 16,119, Jan ,792 USD 176,932 SGD 230, Jan-15 3,037 EUR 23,980,986 HKD 228,630, Jan-15 (459,675) EUR 10,131,113 IDR 156,460,680, Jan-15 (304,946) EUR 27,097,415 THB 1,102,653, Jan-15 (690,284) EUR 8,382,809 USD 10,307, Jan-15 (161,081) IDR 3,479,896,600 EUR 227, Jan-15 4,672 THB 28,235,100 EUR 701, Jan-15 8,407 USD 621,600 EUR 508, Jan-15 5,817 EUR 17,253,459 INR 1,351,084, Jan-15 (436,793) The above contracts were opened with the following counterparties: (16,327,727) Bank of America (885,131) Barclays Bank (484,628) Citibank (747,865) Credit Suisse (2,768,624) Deutsche Bank (1,983,816) Goldman Sachs (1,698,380) HSBC Bank (2,094,846) JPMorgan Chase Bank (664,689) Morgan Stanley (334,865) Royal Bank of Scotland (2,739,517) The Bank of New York Mellon (1,418,067) UBS (507,299) Templeton BRIC Fund (16,327,727) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 13,060,540 USD 16,048, Jan-15 (243,377) PLN 19,125,567 USD 5,630, Jan-15 (231,210) USD 1,948,128 EUR 1,561, Jan-15 58,702 USD 674,850 PLN 2,284, Jan-15 29,979 (385,906) 92 Unaudited Semi-Annual Report

95 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton BRIC Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Bank of America (1,137) Barclays Bank 2,857 Citibank (2,056) Credit Suisse (9,112) Deutsche Bank (31,871) Goldman Sachs (71,673) HSBC Bank (44,606) JPMorgan Chase Bank (128,475) Morgan Stanley (63,485) Royal Bank of Scotland (8,855) The Bank of New York Mellon (2,460) UBS (25,033) Templeton Constrained Bond Fund (385,906) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management USD 4,898 JPY 508,000 8-Jan USD 27,192 JPY 2,820, Jan-15 3,655 USD 955,259 GBP 566, Jan-15 72,256 CLP 91,760,400 USD 147, Jan-15 3,014 USD 47,236 JPY 4,770,000 6-Feb-15 7,415 MYR 180,000 USD 55,781 9-Feb-15 (4,512) USD 46,974 JPY 4,750,000 9-Feb-15 7,319 USD 96,222 EUR 70, Feb-15 11,479 INR 8,714,250 USD 138, Mar-15 (2,298) EUR 509,864 USD 683, Mar-15 (65,725) USD 704,228 EUR 509, Mar-15 86,809 EUR 679,887 USD 860, Mar-15 (36,855) USD 866,618 EUR 679, Mar-15 43,280 USD 923,695 CAD 1,034,562 6-Apr-15 34,701 USD 417,637 NOK 2,731,850 8-Apr-15 52,985 USD 951,980 NZD 1,136,760 7-May-15 76,387 USD 20,000 JPY 2,030, May-15 3,029 USD 80,000 JPY 8,113, May-15 12,189 EUR 137,414 USD 173, May-15 (7,439) USD 1,293,823 EUR 978, May ,756 USD 38,656 EUR 29,682 8-Jun-15 2,685 USD 518,114 EUR 381, Jun-15 56,314 USD 22,979 JPY 2,340, Jun-15 3,415 USD 436,095 JPY 44,316, Jun-15 65,553 EUR 355,183 USD 476, Jun-15 (45,744) USD 696,665 EUR 509, Jun-15 78,626 USD 496,373 NOK 3,229, Jun-15 65,915 USD 2,658 EUR 1, Jul MYR 180,000 USD 55,073 6-Aug-15 (4,537) USD 39,033 EUR 30,000 8-Sep-15 2,626 MXN 2,684,948 USD 196, Sep-15 (18,004) MYR 587,160 USD 177, Sep-15 (12,914) USD 400,518 EUR 311, Sep-15 22,972 USD 408,446 JPY 44,248, Sep-15 37,834 USD 89,460 EUR 70, Sep-15 4,480 KRW 135,606,400 USD 128, Sep-15 (6,039) USD 42,199 EUR 33, Sep-15 2,136 USD 64,620 JPY 7,000,000 7-Oct-15 5,977 USD 32,483 JPY 3,500,000 9-Oct-15 3,160 USD 32,515 JPY 3,500, Oct-15 3,188 USD 450,990 EUR 353, Oct-15 22,296 USD 108,418 EUR 85, Oct-15 5,186 MYR 119,333 USD 35, Nov-15 (1,717) USD 164,000 JPY 18,712, Nov-15 7,080 MXN 2,836,175 USD 205, Nov-15 (16,617) USD 77,888 EUR 62, Nov-15 2,528 USD 54,712 EUR 44, Dec-15 1,199 USD 40,039 JPY 4,680, Dec USD 22,515 JPY 2,660, Dec MXN 55,000 USD 3, Dec-15 (3) MXN 85,000 USD 5, Dec-15 (7) MXN 43,000 USD 2,848 4-Jan-16 (3) 694,919 Unaudited Semi-Annual Report 93

96 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Constrained Bond Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Bank of America 42,009 Barclays Bank 214,921 Citibank 102,904 Deutsche Bank 208,284 Goldman Sachs 63,398 HSBC Bank (29,695) JPMorgan Chase Bank 89,417 Standard Chartered Bank 3,681 Templeton Emerging s Fund 694,919 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 4,452,533 USD 5,514, Jan-15 (125,741) USD 1,244,164 EUR 1,004, Jan-15 28,424 The above contracts were opened with the following counterparties: (97,317) Bank of America (4,941) Barclays Bank 249 Citibank (6,472) Credit Suisse (14,859) Deutsche Bank 139 Goldman Sachs (5,849) HSBC Bank (9,713) JPMorgan Chase Bank (31,891) Morgan Stanley (9,299) Royal Bank of Scotland (14,376) The Bank of New York Mellon (305) Templeton Emerging s Balanced Fund (97,317) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 12,660,739 USD 15,606, Jan-15 (283,493) SGD 970,798 USD 738, Jan-15 (6,454) (289,947) Forward foreign exchange contracts used for efficient portfolio management USD 89,734 EUR 65,791 7-Jan-15 10,121 MYR 397,600 USD 118,658 8-Jan-15 (5,042) MYR 214,000 USD 63,911 9-Jan-15 (2,766) MYR 64,000 USD 19, Jan-15 (852) USD 5,452 EUR 4, Jan INR 5,212,900 USD 83, Jan-15 (1,537) USD 273,360 EUR 200, Jan-15 31,280 MXN 25,844,100 USD 1,864,923 5-Feb-15 (116,278) USD 473,872 EUR 340,000 9-Feb-15 62,305 INR 7,462,500 USD 119, Feb-15 (2,439) INR 5,212,900 USD 82, Feb-15 (1,085) USD 956,285 EUR 695, Feb ,910 USD 27,414 EUR 20, Feb-15 3,201 USD 195,828 EUR 141, Mar-15 25,098 USD 156,073 EUR 112, Mar-15 20,094 CLP 121,320,000 USD 205, Mar-15 (7,398) USD 360,905 EUR 259, Mar-15 46,917 USD 77,261 EUR 56, Mar-15 9,449 MYR 580,250 USD 175,888 2-Apr-15 (11,383) USD 181,955 EUR 132,000 2-Apr-15 22,101 GHS 38,646 USD 11,729 7-Apr-15 (356) KRW 267,000,000 USD 248,386 7-Apr-15 (5,347) MXN 10,163,000 USD 752,146 7-Apr-15 (67,131) CLP 105,800,000 USD 180, May-15 (8,305) CLP 73,042,500 USD 124, May-15 (5,669) USD 249,384 EUR 181, May-15 30,092 USD 55,098 EUR 40, May-15 6, Unaudited Semi-Annual Report

97 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Emerging s Balanced Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 271,882 EUR 198, May-15 30,887 USD 366,843 EUR 269,000 8-Jun-15 40,845 PHP 10,554,200 USD 235, Jun-15 (1,059) PHP 3,581,720 USD 81, Jun-15 (1,973) PHP 3,552,000 USD 81,200 1-Jul-15 (2,404) MYR 261,750 USD 79,914 2-Jul-15 (6,251) MYR 48,320 USD 14,772 3-Jul-15 (1,175) MYR 442,400 USD 135,361 7-Jul-15 (10,900) USD 222,635 EUR 163, Jul-15 24,998 USD 105,747 EUR 78, Jul-15 11,166 PLN 3,060,000 USD 978, Jul-15 (120,280) USD 64,387 EUR 48,000 3-Aug-15 6,170 USD 28,366 EUR 21,100 5-Aug-15 2,774 USD 62,569 EUR 46, Aug-15 5,921 USD 276,705 EUR 206, Aug-15 26,512 USD 15,562 EUR 12, Aug USD 16,728 EUR 12, Aug-15 1,612 USD 108,997 EUR 81, Aug-15 9,610 USD 357,107 EUR 270, Aug-15 29,486 EUR 524,000 USD 663,594 2-Sep-15 (27,746) USD 692,456 EUR 524,000 2-Sep-15 56,608 PHP 10,554,200 USD 235, Sep-15 (1,338) USD 125,418 EUR 98, Oct-15 6,387 USD 11,216 EUR 9, Nov USD 125,153 EUR 100, Nov-15 3,615 MYR 1,300,000 USD 379, Nov-15 (17,535) BRL 570,000 USD 199, Nov-15 (3,946) USD 244,516 EUR 197,000 9-Dec-15 4,957 The above contracts were opened with the following counterparties: 214,893 (75,054) Bank of America (9,275) Barclays Bank 69,411 Citibank (185,879) Credit Suisse (28,252) Deutsche Bank 206,827 Goldman Sachs 79,236 HSBC Bank (57,404) JPMorgan Chase Bank 37,250 Morgan Stanley (67,858) Royal Bank of Scotland (38,943) The Bank of New York Mellon (9,487) UBS (70,680) Templeton Emerging s Bond Fund (75,054) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging AUD 19,469,036 USD 16,036, Jan-15 (158,033) CHF 42,690,919 USD 44,046, Jan-15 (1,095,481) EUR 299,928,669 USD 371,638, Jan-15 (8,664,620) GBP 51,043,307 USD 80,142, Jan-15 (590,500) NOK 18,428,895 USD 2,528, Jan-15 (62,601) SEK 110,550,147 USD 14,638, Jan-15 (462,740) SGD 14,943,450 USD 11,361, Jan-15 (85,570) USD 1,208,261 AUD 1,472, Jan-15 7,519 USD 2,282,570 CHF 2,200, Jan-15 68,330 USD 22,059,803 EUR 17,719, Jan ,512 USD 4,415,249 GBP 2,809, Jan-15 36,161 USD 135,267 NOK 1,008, Jan USD 5,273,138 SEK 40,146, Jan ,273 USD 514,546 SGD 673, Jan-15 6,174 (10,260,233) Unaudited Semi-Annual Report 95

98 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Emerging s Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management MYR 35,047,100 USD 10,452,797 8-Jan-15 (437,871) CLP 1,547,690,000 USD 2,518,822 9-Jan-15 28,565 MYR 10,078,000 USD 3,009,796 9-Jan-15 (130,252) CLP 3,527,100,000 USD 6,394, Jan-15 (591,636) MYR 3,020,000 USD 902, Jan-15 (40,224) USD 15,018,936 EUR 11,051, Jan-15 1,644,841 USD 14,531,504 JPY 1,519,850, Jan-15 1,846,156 CLP 709,400,000 USD 1,151, Jan-15 15,667 INR 395,776,000 USD 6,383, Jan-15 (122,351) USD 43,634,667 JPY 4,558,950, Jan-15 5,583,301 CLP 665,561,000 USD 1,076, Jan-15 18,062 INR 36,352,000 USD 585, Jan-15 (10,676) USD 41,872,212 JPY 4,354,710, Jan-15 5,525,223 CLP 720,379,000 USD 1,169, Jan-15 15,434 MYR 4,948,000 USD 1,490, Jan-15 (78,139) USD 63,530,728 JPY 6,564,810, Jan-15 8,736,459 CLP 1,416,312,000 USD 2,273, Jan-15 54,500 INR 2,031,819,000 USD 32,745, Jan-15 (639,838) INR 51,396,000 USD 821, Jan-15 (9,552) USD 12,389,670 EUR 9,090, Jan-15 1,388,212 INR 109,601,000 USD 1,753, Jan-15 (22,176) CLP 1,187,490,000 USD 2,145, Jan-15 (194,194) CLP 1,684,390,000 USD 2,983, Jan-15 (216,890) USD 35,187,208 EUR 25,926, Jan-15 3,807,323 INR 946,591,000 USD 15,148, Jan-15 (211,109) USD 25,282,699 EUR 18,504, Jan-15 2,886,132 CLP 1,446,212,000 USD 2,400, Jan-15 (26,248) INR 1,181,449,666 USD 18,983, Jan-15 (351,496) CLP 2,572,638,000 USD 4,285,319 2-Feb-15 (62,619) INR 244,300,833 USD 3,925,615 2-Feb-15 (74,780) CLP 1,186,745,200 USD 1,980,549 3-Feb-15 (32,788) INR 384,275,250 USD 6,166,163 3-Feb-15 (109,943) CLP 1,485,310,000 USD 2,620,519 4-Feb-15 (182,920) INR 52,360,000 USD 840,422 4-Feb-15 (15,357) MYR 5,510,000 USD 1,628,299 4-Feb-15 (58,178) CLP 2,509,300,000 USD 4,421,440 5-Feb-15 (303,648) USD 118,239,249 JPY 11,940,160,000 6-Feb-15 18,561,051 CLP 3,498,700,000 USD 6,044,182 9-Feb-15 (304,530) INR 477,166,000 USD 7,648,916 9-Feb-15 (136,068) MYR 9,550,000 USD 2,959,497 9-Feb-15 (239,371) USD 118,239,661 JPY 11,956,430,000 9-Feb-15 18,423,255 CLP 2,246,200,000 USD 3,864, Feb-15 (179,467) KRW 81,205,820,300 USD 74,337, Feb-15 (246,652) CLP 3,875,400,000 USD 6,732, Feb-15 (376,629) INR 276,852,250 USD 4,447, Feb-15 (90,477) INR 24,550,000 USD 393, Feb-15 (7,337) CLP 5,546,660,000 USD 9,470, Feb-15 (377,149) MXN 1,899,503,821 USD 138,710, Feb-15 (10,282,506) CLP 2,332,740,000 USD 3,992, Feb-15 (167,778) CLP 789,620,000 USD 1,353, Feb-15 (58,958) USD 24,376,002 EUR 17,740, Feb-15 2,900,204 CLP 1,905,000,000 USD 3,335, Feb-15 (213,259) INR 366,636,000 USD 5,836, Feb-15 (77,241) KRW 4,304,000,000 USD 3,995, Feb-15 (70,314) USD 3,994,383 EUR 2,903, Feb ,975 CLP 2,681,100,000 USD 4,697, Feb-15 (303,766) INR 1,948,800,000 USD 30,955, Feb-15 (347,117) CLP 2,554,246,000 USD 4,423, Feb-15 (238,855) CLP 1,681,480,000 USD 2,927, Feb-15 (172,469) USD 5,132,378 EUR 3,738, Feb ,546 USD 2,616,859 EUR 1,913, Feb ,815 CLP 3,605,540,000 USD 6,199,464 3-Mar-15 (294,582) INR 199,816,250 USD 3,174,574 3-Mar-15 (39,939) INR 96,576,000 USD 1,542,169 9-Mar-15 (28,881) GHS 17,690,000 USD 5,706, Mar-15 (398,435) CLP 2,772,500,000 USD 4,783, Mar-15 (246,365) CLP 16,829,400,000 USD 29,028, Mar-15 (1,487,773) CLP 684,630,000 USD 1,163, Mar-15 (43,278) INR 395,776,000 USD 6,301, Mar-15 (104,381) USD 18,491,592 JPY 1,892,096, Mar-15 2,690,344 USD 51,086,347 EUR 36,783, Mar-15 6,547,399 USD 17,093,027 EUR 12,299, Mar-15 2,200, Unaudited Semi-Annual Report

99 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Emerging s Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD CLP 1,593,400,000 USD 2,702, Mar-15 (97,167) USD 34,105,110 EUR 24,504, Mar-15 4,433,099 USD 8,483,529 EUR 6,149, Mar-15 1,037,542 KRW 70,000,000,000 USD 64,137, Mar-15 (403,522) MYR 210,000 USD 62, Mar-15 (2,995) PLN 12,296,000 EUR 2,875, Mar-15 (23,067) MYR 155,092,000 USD 47,012,062 2-Apr-15 (3,042,716) MYR 200,000,000 USD 60,210,133 3-Apr-15 (3,513,774) GHS 12,460,284 USD 3,781,573 7-Apr-15 (114,880) MYR 160,000 USD 48, Apr-15 (2,710) USD 9,001,369 EUR 6,529, Apr-15 1,093,952 USD 6,221,511 EUR 4,502, Apr ,866 USD 4,411,296 EUR 3,180, Apr ,720 USD 156,306,022 JPY 15,833,800, Apr-15 24,029,928 CLP 1,386,730,000 USD 2,445, Apr-15 (183,042) MYR 9,535,724 USD 2,879, Apr-15 (178,803) CLP 878,663,000 USD 1,519, Apr-15 (87,263) CLP 1,799,400,000 USD 3,071, May-15 (141,248) USD 69,640,213 EUR 50,536, May-15 8,412,537 USD 46,583,643 EUR 33,819, May-15 5,609,721 KRW 36,381,918,900 USD 35,002, May-15 (1,922,999) KRW 6,946,790,000 USD 6,671, May-15 (356,184) KRW 29,444,126,400 USD 28,238, May-15 (1,470,596) USD 32,998,237 EUR 24,140, May-15 3,748,681 KRW 36,368,136,000 USD 34,986, May-15 (1,924,766) MYR 107,190,000 USD 32,612, May-15 (2,364,517) USD 16,371,762 EUR 12,032,000 1-Jun-15 1,791,387 CLP 2,918,979,000 USD 5,140,586 2-Jun-15 (396,362) MYR 17,125,000 USD 5,207,858 2-Jun-15 (376,879) CLP 4,312,170,000 USD 7,598,537 3-Jun-15 (590,538) CLP 4,548,400,000 USD 8,003,519 4-Jun-15 (612,220) CLP 4,580,380,000 USD 8,034,197 5-Jun-15 (591,548) PLN 30,900,000 EUR 7,296,685 8-Jun-15 (168,871) USD 17,937,141 EUR 13,153,000 8-Jun-15 1,997,137 PLN 4,217,000 EUR 1,007, Jun-15 (37,968) PLN 21,615,000 EUR 5,160, Jun-15 (187,401) USD 54,235,009 EUR 40,014, Jun-15 5,737,643 KRW 101,747,200,000 USD 98,411, Jun-15 (5,988,808) USD 54,220,190 EUR 40,014, Jun-15 5,721,792 KRW 186,977,352,500 USD 168,599, Jun-15 1,231,238 MYR 252,000,000 USD 76,688, Jun-15 (5,726,278) PHP 3,081,456,480 USD 68,668, Jun-15 (309,238) PHP 1,045,735,760 USD 23,774, Jun-15 (575,939) PHP 1,029,890,000 USD 23,543,572 1-Jul-15 (697,010) MYR 69,962,000 USD 21,359,834 2-Jul-15 (1,670,679) USD 15,420,339 EUR 11,269,377 2-Jul-15 1,759,327 MYR 346,336,660 USD 105,865,376 3-Jul-15 (8,403,734) MYR 117,400,000 USD 35,920,815 7-Jul-15 (2,892,611) USD 76,910,211 EUR 56,309, Jul-15 8,635,497 USD 44,459,810 EUR 32,794, Jul-15 4,694,462 MYR 258,000 USD 79, Jul-15 (6,814) USD 9,041,141 EUR 6,668, Jul ,394 USD 56,311,338 EUR 41,568, Jul-15 5,904,348 MYR 314,000 USD 97, Jul-15 (8,873) CLP 4,895,526,000 USD 8,423, Jul-15 (503,317) PHP 1,496,250,000 USD 34,392, Jul-15 (1,211,030) USD 39,247,116 EUR 29,142, Jul-15 3,904,041 CLP 1,886,480,000 USD 3,241, Jul-15 (190,448) MYR 330,000 USD 102, Jul-15 (9,347) CLP 3,008,840,000 USD 5,171, Jul-15 (304,976) MYR 14,658,000 USD 4,514, Jul-15 (397,033) USD 16,546,169 EUR 12,335,000 3-Aug-15 1,585,580 CLP 1,591,690,000 USD 2,699,610 4-Aug-15 (126,017) USD 811,211 EUR 604,779 4-Aug-15 77,689 CLP 1,150,400,000 USD 1,949,500 5-Aug-15 (89,578) USD 24,593,991 EUR 18,294,200 5-Aug-15 2,405,022 CLP 1,216,600,000 USD 2,059,765 6-Aug-15 (92,974) MYR 9,550,000 USD 2,921,919 6-Aug-15 (240,694) USD 7,114,663 EUR 5,317, Aug ,699 CLP 1,771,500,000 USD 2,985, Aug-15 (122,902) USD 30,231,009 EUR 22,565, Aug-15 2,858,960 CLP 1,791,200,000 USD 3,026, Aug-15 (132,412) USD 5,076,248 EUR 4,064, Aug ,853 Unaudited Semi-Annual Report 97

100 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Emerging s Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 12,463,026 EUR 9,293, Aug-15 1,188,913 CLP 1,468,200,000 USD 2,474, Aug-15 (102,799) USD 23,979,047 EUR 17,882, Aug-15 2,285,435 CLP 790,080,000 USD 1,331, Aug-15 (55,976) USD 23,795,106 EUR 17,740, Aug-15 2,273,060 USD 23,685,561 EUR 17,740, Aug-15 2,163,164 USD 6,768,047 EUR 5,086, Aug ,698 CLP 1,380,780,000 USD 2,303, Aug-15 (75,604) KRW 61,000,000,000 USD 59,051, Aug-15 (3,724,207) CLP 7,301,130,000 USD 12,154, Aug-15 (372,339) USD 32,258,290 EUR 24,389, Aug-15 2,663,578 CLP 1,541,000,000 USD 2,544,584 8-Sep-15 (60,060) CLP 703,690,000 USD 1,154,158 9-Sep-15 (19,705) USD 17,681,759 JPY 1,885,123, Sep-15 1,895,733 USD 2,372,828 EUR 1,823, Sep ,629 USD 1,546,967 EUR 1,201, Sep-15 88,717 USD 17,379,741 JPY 1,888,117, Sep-15 1,565,188 PHP 3,081,456,480 USD 68,667, Sep-15 (390,643) USD 15,333,326 EUR 12,200,000 7-Oct ,703 USD 53,088,391 JPY 5,750,800,000 7-Oct-15 4,910,182 USD 26,544,467 JPY 2,860,100,000 9-Oct-15 2,582,237 USD 26,721,578 JPY 2,876,400, Oct-15 2,620,161 MYR 21,609,000 USD 6,456, Oct-15 (420,597) MYR 18,273,000 USD 5,464, Oct-15 (361,585) MYR 22,411,991 USD 6,725, Oct-15 (467,913) USD 3,315,780 EUR 2,600, Oct ,142 MYR 8,454,000 USD 2,531, Oct-15 (171,569) PLN 24,457,000 EUR 5,704, Oct-15 (87,784) USD 2,971,060 EUR 2,384, Nov-15 73,877 UYU 37,100,000 USD 1,420, Nov-15 (38,657) USD 51,475,429 EUR 41,130, Nov-15 1,487,011 MYR 13,772,720 USD 4,029, Nov-15 (190,384) USD 5,050,202 EUR 4,040, Nov ,735 BRL 164,000,000 USD 57,459, Nov-15 (1,135,349) MYR 8,284,000 USD 2,417, Nov-15 (108,085) UYU 37,100,000 USD 1,414, Nov-15 (36,100) USD 27,161,574 EUR 21,788, Nov ,220 UYU 55,370,000 USD 2,152,799 1-Dec-15 (102,670) PLN 94,800,000 EUR 22,317,435 2-Dec-15 (628,541) MXN 1,120,708,015 USD 73,803, Dec ,279 The above contracts were opened with the following counterparties: 135,019, ,758,877 Bank of America (2,409,695) Barclays Bank 35,715,868 Citibank (17,654,275) Credit Suisse (3,392,733) Deutsche Bank 39,229,517 Goldman Sachs 13,478,673 HSBC Bank 23,436,817 JPMorgan Chase Bank 17,073,827 Morgan Stanley (1,419,415) Royal Bank of Scotland (1,564,932) The Bank of New York Mellon (61,117) UBS (1,626,038) Standard Chartered Bank 23,952,380 Templeton Frontier s Fund 124,758,877 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 199,476,532 USD 246,991, Jan-15 (5,584,497) PLN 65,282,978 USD 19,282, Jan-15 (854,877) USD 21,091,777 EUR 16,915, Jan ,097 USD 2,521,170 PLN 8,569, Jan ,111 (5,717,166) 98 Unaudited Semi-Annual Report

101 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Frontier s Fund (continued) Unrealised Profit/(Loss) USD The above contracts were opened with the following counterparties: Bank of America (697,003) Barclays Bank (333,509) Citibank (503,606) Credit Suisse (723,554) Deutsche Bank (130,164) Goldman Sachs (571,711) HSBC Bank (363,849) JPMorgan Chase Bank (310,507) Morgan Stanley (82,900) Royal Bank of Scotland (1,679,032) The Bank of New York Mellon (230,183) UBS (91,148) Templeton Global (Euro) Fund (5,717,166) Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for share class hedging EUR 561,252 CHF 675, Jan-15 (604) EUR 1,066,177 GBP 837, Jan-15 (12,010) EUR 792,612 HKD 7,541, Jan-15 (10,931) EUR 4,066,069 USD 4,989, Jan-15 (55,884) The above contracts were opened with the following counterparty: (79,429) Bank of America (79,429) Templeton Global Balanced Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 59,636,041 USD 73,882, Jan-15 (1,711,227) USD 5,001,852 EUR 4,026, Jan ,356 (1,581,871) Forward foreign exchange contracts used for efficient portfolio management CLP 618,680,000 USD 1,006,884 9-Jan-15 11,419 CLP 232,680,000 USD 377, Jan-15 5,139 INR 11,162,000 USD 180, Jan-15 (3,451) CLP 218,295,000 USD 353, Jan-15 5,924 INR 52,977,000 USD 853, Jan-15 (15,559) CLP 236,275,000 USD 383, Jan-15 5,062 CLP 566,164,000 USD 908, Jan-15 21,786 INR 106,206,000 USD 1,710, Jan-15 (32,034) INR 41,639,000 USD 665, Jan-15 (7,739) EUR 140,000 USD 174, Jan-15 (5,477) INR 35,440,000 USD 567, Jan-15 (8,072) USD 314,132 EUR 231, Jan-15 34,029 CLP 389,480,000 USD 703, Jan-15 (63,693) CLP 552,460,000 USD 978, Jan-15 (71,137) USD 522,522 EUR 385, Jan-15 56,538 INR 14,789,000 USD 236, Jan-15 (2,691) CLP 160,715,000 USD 266, Jan-15 (2,917) INR 50,398,000 USD 810, Jan-15 (15,445) CLP 154,534,000 USD 257,944 2-Feb-15 (4,293) INR 5,906,000 USD 94,902 2-Feb-15 (1,808) CLP 131,881,000 USD 220,095 3-Feb-15 (3,644) INR 31,610,000 USD 507,235 3-Feb-15 (9,058) CLP 207,410,000 USD 365,932 4-Feb-15 (25,543) INR 80,260,000 USD 1,288,241 4-Feb-15 (23,541) INR 99,151,000 USD 1,592,054 9-Feb-15 (30,948) INR 15,174,000 USD 243, Feb-15 (4,945) INR 19,890,000 USD 318, Feb-15 (5,944) CLP 399,480,000 USD 698, Feb-15 (43,808) CLP 185,000,000 USD 316, Feb-15 (13,306) Unaudited Semi-Annual Report 99

102 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Balanced Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD INR 18,221,000 USD 290, Feb-15 (4,568) CLP 90,050,000 USD 156, Feb-15 (9,236) CLP 185,280,000 USD 319,779 3-Mar-15 (16,342) INR 8,859,000 USD 140,747 3-Mar-15 (1,771) INR 7,464,000 USD 119,188 9-Mar-15 (2,232) CLP 224,550,000 USD 381, Mar-15 (14,195) INR 34,579,000 USD 550, Mar-15 (9,120) CLP 554,340,000 USD 977, Apr-15 (73,170) CLP 351,241,000 USD 607, Apr-15 (34,883) EUR 2,235,000 USD 3,007, Apr-15 (300,199) USD 3,467,803 EUR 2,506, Apr ,078 EUR 1,121,000 USD 1,373,797 5-May-15 (15,764) USD 1,740,737 EUR 1,256,070 5-May ,074 CLP 596,040,000 USD 1,048, May-15 (78,996) CLP 170,980,000 USD 301,286 3-Jun-15 (23,415) CLP 244,133,000 USD 428,454 5-Jun-15 (31,763) USD 3,595,013 EUR 2,760,426 8-Jun ,678 MYR 10,640,000 USD 3,000, Jun-15 (3,146) CLP 344,000,000 USD 592, Jul-15 (35,502) CLP 118,070,000 USD 202, Jul-15 (11,920) CLP 111,130,000 USD 191, Jul-15 (11,349) CLP 222,270,000 USD 376,984 4-Aug-15 (17,598) USD 3,361,773 EUR 2,505,000 4-Aug ,517 USD 1,681,688 EUR 1,251,000 5-Aug ,355 CLP 139,200,000 USD 232, Aug-15 (7,622) CLP 417,480,000 USD 689,366 8-Sep-15 (16,271) USD 3,630,069 EUR 2,790,000 8-Sep ,211 CLP 230,800,000 USD 378,547 9-Sep-15 (6,464) USD 121,286 EUR 98,456 9-Dec-15 1, ,791 (928,080) The above contracts were opened with the following counterparties: Bank of America (34,496) Barclays Bank 338,140 Citibank (137,308) Credit Suisse (110,752) Deutsche Bank (255,405) Goldman Sachs (271,700) HSBC Bank 294,593 JPMorgan Chase Bank (226,522) Morgan Stanley (284,177) Royal Bank of Scotland (87,255) The Bank of New York Mellon (14,881) UBS (138,317) Templeton Global Bond Fund (928,080) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging CHF 211,870,302 USD 216,540, Jan-15 (3,390,429) CZK 1,474,987,928 USD 65,707, Jan-15 (1,286,290) EUR 2,616,822,420 USD 3,215,604, Jan-15 (48,828,926) PLN 403,291,635 USD 118,776, Jan-15 (4,920,405) SGD 452,513,230 USD 342,229, Jan-15 (761,414) USD 4,654,333 CHF 4,493, Jan ,446 USD 107,236,118 EUR 86,182, Jan-15 2,940,998 USD 5,281,563 PLN 17,853, Jan ,282 USD 8,946,686 SGD 11,766, Jan-15 67,964 JPY 5,783,388,175 USD 47,876, Jan ,572 USD 964,763 JPY 112,045, Jan-15 29,582 AUD 35,096,747 USD 28,916, Jan-15 (292,421) CHF 222,628,693 USD 229,769, Jan-15 (5,785,153) EUR 2,160,659,117 USD 2,677,978, Jan-15 (63,146,998) GBP 92,364,065 USD 145,040, Jan-15 (1,089,638) NOK 1,254,400,934 USD 172,047, Jan-15 (4,218,293) NZD 46,313,442 USD 36,016, Jan-15 45,235 SEK 434,888,163 USD 57,563, Jan-15 (1,798,974) 100 Unaudited Semi-Annual Report

103 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 642,459 AUD 785, Jan-15 2,167 USD 10,412,505 CHF 10,108, Jan ,472 USD 154,652,128 EUR 124,351, Jan-15 4,161,906 USD 3,672,504 GBP 2,339, Jan-15 26,850 USD 4,179,773 NOK 30,611, Jan-15 84,125 USD 851,729 NZD 1,093, Jan USD 1,732,817 SEK 13,414, Jan-15 12,700 CAD 18,235,200 USD 15,736, Jan-15 (40,277) CHF 32,173,500 USD 32,961, Jan-15 (589,702) CNH 31,327,596 USD 5,013, Jan-15 16,559 EUR 3,881,875,164 USD 4,786,356, Jan-15 (88,246,983) GBP 1,461,890,014 USD 2,288,139, Jan-15 (9,857,968) (225,853,574) Forward foreign exchange contracts used for efficient portfolio management CLP 7,651,200,000 USD 13,942,961 7-Jan-15 (1,346,596) USD 61,378,903 JPY 6,391,999,000 7-Jan-15 8,031,205 MYR 148,644,500 USD 44,333,963 8-Jan-15 (1,857,876) CLP 9,273,450,000 USD 15,092,278 9-Jan ,153 MYR 43,743,000 USD 13,063,851 9-Jan-15 (565,351) CLP 36,517,060,000 USD 64,455, Jan-15 (4,372,907) MYR 13,109,000 USD 3,918, Jan-15 (174,603) USD 126,662,466 EUR 93,202, Jan-15 13,871,801 USD 21,622,909 JPY 2,261,540, Jan-15 2,747,085 CLP 15,285,490,000 USD 24,806, Jan ,588 INR 4,416,689,000 USD 71,238, Jan-15 (1,365,379) USD 37,777,995 EUR 27,635, Jan-15 4,333,621 USD 64,928,407 JPY 6,783,720, Jan-15 8,307,955 CLP 22,904,574,000 USD 37,050, Jan ,570 INR 1,706,172,000 USD 27,487, Jan-15 (501,084) MYR 24,570,000 USD 7,370, Jan-15 (354,841) USD 14,123,101 EUR 10,348, Jan-15 1,599,579 USD 80,247,500 JPY 8,345,740, Jan-15 10,589,011 CLP 24,791,076,000 USD 40,238, Jan ,158 MYR 15,303,000 USD 4,610, Jan-15 (241,667) USD 234,512,377 JPY 24,235,430, Jan-15 32,227,366 CLP 8,486,265,000 USD 13,622, Jan ,554 INR 7,916,708,000 USD 127,404, Jan-15 (2,308,314) USD 142,334,147 JPY 14,799,882, Jan-15 18,800,191 INR 1,608,784,000 USD 25,715, Jan-15 (299,007) USD 150,678,287 EUR 110,549, Jan-15 16,882,892 INR 1,649,040,000 USD 26,410, Jan-15 (363,603) USD 29,345,514 EUR 21,595, Jan-15 3,208,657 CLP 16,672,850,000 USD 30,122, Jan-15 (2,726,568) MYR 90,200,904 USD 26,674, Jan-15 (940,534) CLP 23,649,380,000 USD 41,890, Jan-15 (3,045,206) SGD 104,180,000 USD 83,982, Jan-15 (5,395,391) EUR 171,626,222 SEK 1,603,370, Jan-15 2,126,850 INR 2,747,098,000 USD 43,848, Jan-15 (499,908) SEK 2,369,700,000 EUR 257,678, Jan-15 (8,013,598) USD 220,555,758 EUR 161,421, Jan-15 25,177,420 USD 92,674,148 JPY 9,580,190, Jan-15 12,703,864 USD 192,081,669 JPY 19,636,841, Jan-15 28,162,429 EUR 94,807,623 SEK 892,500, Jan ,429 SEK 1,989,772,500 EUR 215,148, Jan-15 (5,260,051) USD 1,500,000,000 JPY 153,214,950, Jan ,021,608 CLP 20,052,327,000 USD 33,285, Jan-15 (363,946) EUR 224,262,852 SEK 2,073,214, Jan-15 5,593,579 INR 11,558,472,228 USD 185,825, Jan-15 (3,544,027) SEK 2,073,214,000 EUR 221,513, Jan-15 (2,265,917) USD 700,000,000 JPY 71,403,500, Jan ,946,367 CLP 25,279,982,000 USD 42,151,674 2-Feb-15 (657,383) INR 3,141,749,048 USD 50,484,057 2-Feb-15 (961,681) CLP 16,454,714,800 USD 27,461,140 3-Feb-15 (454,616) INR 4,777,342,750 USD 76,656,770 3-Feb-15 (1,365,322) SEK 1,561,443,896 EUR 167,596,241 3-Feb-15 (2,633,025) CLP 14,790,190,000 USD 26,094,195 4-Feb-15 (1,821,455) INR 2,552,973,000 USD 40,977,384 4-Feb-15 (748,800) CLP 17,752,300,000 USD 31,279,932 5-Feb-15 (2,148,192) MYR 98,824,800 USD 28,976,631 5-Feb-15 (818,208) USD 336,556,072 JPY 33,986,480,000 6-Feb-15 52,831,976 CLP 32,670,420,000 USD 56,447,981 9-Feb-15 (2,851,842) Unaudited Semi-Annual Report 101

104 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD INR 18,862,305,780 USD 302,725,944 9-Feb-15 (5,744,118) MYR 71,770,000 USD 22,241,160 9-Feb-15 (1,798,914) SGD 109,007,000 USD 87,485,554 9-Feb-15 (5,265,762) USD 140,677,147 EUR 100,935,000 9-Feb-15 18,496,372 USD 335,072,088 JPY 33,882,590,000 9-Feb-15 52,208,527 CLP 11,180,100,000 USD 19,232, Feb-15 (893,268) MXN 885,113,000 USD 65,029, Feb-15 (5,159,753) SEK 625,900,000 EUR 70,420, Feb-15 (4,979,963) USD 165,400,257 EUR 121,608, Feb-15 18,193,963 USD 128,354,838 JPY 13,031,610, Feb-15 19,561,592 MXN 238,269,000 USD 17,719, Feb-15 (1,603,475) USD 275,695,491 EUR 202,762, Feb-15 30,250,630 CLP 19,667,740,000 USD 34,169, Feb-15 (1,911,402) INR 7,005,838,975 USD 112,536, Feb-15 (2,285,092) MXN 1,680,384,000 USD 122,880, Feb-15 (9,231,948) MYR 378,450,000 USD 111,675, Feb-15 (3,910,315) SGD 247,652,915 USD 197,521, Feb-15 (10,726,369) USD 333,233,933 JPY 33,956,047, Feb-15 49,750,359 INR 768,470,000 USD 12,321, Feb-15 (229,668) MXN 907,808,000 USD 66,311, Feb-15 (4,918,488) SGD 42,830,000 USD 34,288, Feb-15 (1,983,664) USD 95,633,105 EUR 69,896, Feb-15 11,022,268 USD 281,388,827 JPY 28,700,150, Feb-15 41,782,438 CLP 44,474,470,000 USD 76,211, Feb-15 (3,295,281) MXN 891,399,800 USD 66,204, Feb-15 (5,935,804) SGD 227,199,500 USD 181,913, Feb-15 (10,545,738) USD 93,596,923 JPY 9,550,630, Feb-15 13,859,889 CLP 15,756,740,000 USD 26,964, Feb-15 (1,133,273) SGD 65,272,500 USD 51,639, Feb-15 (2,407,097) USD 222,616,756 JPY 22,602,220, Feb-15 33,912,100 MYR 53,977,000 USD 16,074, Feb-15 (713,739) USD 182,041,627 EUR 132,740, Feb-15 21,349,590 CLP 4,007,290,000 USD 6,867, Feb-15 (299,211) USD 173,387,023 EUR 126,185, Feb-15 20,629,214 CLP 9,667,790,000 USD 16,925, Feb-15 (1,082,281) INR 703,998,000 USD 11,235, Feb-15 (176,499) SGD 65,275,000 USD 52,269, Feb-15 (3,034,708) USD 91,669,480 EUR 66,613, Feb-15 11,026,955 CLP 13,606,600,000 USD 23,837, Feb-15 (1,541,617) USD 55,405,011 JPY 5,652,530, Feb-15 8,210,104 CLP 30,414,626,000 USD 52,035, Feb-15 (2,201,323) MYR 161,430,000 USD 47,990, Feb-15 (2,076,528) USD 101,969,856 JPY 10,446,250, Feb-15 14,749,847 CLP 10,995,100,000 USD 19,141, Feb-15 (1,127,764) USD 515,511,732 EUR 375,398, Feb-15 61,040,216 USD 228,362,794 JPY 23,347,631, Feb-15 33,422,334 MXN 587,156,400 USD 43,859, Feb-15 (4,185,497) PLN 164,098,532 EUR 38,691, Feb-15 (606,355) SGD 279,657,000 USD 223,439, Feb-15 (12,505,067) USD 154,298,848 EUR 112,849, Feb-15 17,678,125 USD 94,284,215 JPY 9,610,390, Feb-15 14,041,865 SEK 314,864,000 EUR 35,133,229 2-Mar-15 (2,154,395) USD 183,791,894 EUR 133,871,290 2-Mar-15 21,717,145 CLP 29,351,800,000 USD 50,496,206 3-Mar-15 (2,426,046) INR 3,255,719,750 USD 51,725,137 3-Mar-15 (650,750) PLN 225,188,000 EUR 52,842,426 3-Mar-15 (539,120) USD 160,740,712 JPY 16,367,800,000 3-Mar-15 24,071,824 USD 75,787,359 JPY 7,734,100,000 4-Mar-15 11,207,954 SGD 59,864,000 USD 47,222,529 5-Mar-15 (2,074,862) USD 38,161,032 EUR 27,680,000 5-Mar-15 4,648,617 INR 905,445,000 USD 14,458,550 9-Mar-15 (270,773) USD 239,346,478 EUR 174,230,356 9-Mar-15 28,396,689 USD 40,263,792 JPY 4,116,972,690 9-Mar-15 5,885,303 SGD 74,240,000 USD 59,089, Mar-15 (3,108,283) USD 171,824,854 EUR 124,112, Mar-15 21,554,624 CLP 19,265,000,000 USD 33,241, Mar-15 (1,711,890) CLP 9,612,440,000 USD 16,336, Mar-15 (607,633) INR 4,982,330,000 USD 79,323, Mar-15 (1,314,032) MXN 695,625,000 USD 51,167, Mar-15 (4,206,000) MYR 333,500,000 USD 102,250, Mar-15 (7,558,568) SGD 313,776,600 USD 244,245, Mar-15 (7,682,664) USD 332,168,869 EUR 239,623, Mar-15 42,026,514 USD 216,772,850 EUR 155,380, Mar-15 28,632,626 USD 49,989,272 JPY 5,115,002, Mar-15 7,272, Unaudited Semi-Annual Report

105 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD EUR 84,581,000 USD 105,724, Mar-15 (3,309,631) MXN 200,095,000 USD 14,700, Mar-15 (1,196,838) SGD 92,640,000 USD 73,197, Mar-15 (3,358,065) USD 178,322,785 EUR 128,396, Mar-15 22,854,452 USD 195,370,932 JPY 19,770,548, Mar-15 30,259,711 CLP 8,086,500,000 USD 13,717, Mar-15 (493,122) MYR 46,410,000 USD 13,929, Mar-15 (756,786) USD 65,277,840 EUR 46,895, Mar-15 8,492,460 SEK 918,230,000 EUR 103,096, Mar-15 (7,069,172) USD 80,743,414 JPY 8,239,057, Mar-15 11,931,301 MYR 226,531,000 USD 67,246, Mar-15 (2,984,176) USD 32,946,937 EUR 23,924, Mar-15 3,976,468 USD 154,209,365 EUR 111,665, Mar-15 18,988,814 MYR 108,095,500 USD 32,113, Mar-15 (1,460,573) USD 101,906,919 EUR 79,492, Mar-15 5,642,152 USD 38,893,375 EUR 28,215,296 2-Apr-15 4,724,143 USD 103,415,271 EUR 74,954,962 7-Apr-15 12,638,581 MYR 63,230,000 USD 18,985, Apr-15 (1,070,813) USD 133,368,883 EUR 96,737, Apr-15 16,208,555 EUR 16,300,000 USD 19,955, Apr-15 (213,346) USD 216,987,253 EUR 157,137, Apr-15 26,668,152 USD 214,749,043 EUR 154,936, Apr-15 27,094,541 USD 63,054,635 JPY 6,382,800, Apr-15 9,732,511 CLP 8,309,050,000 USD 14,654, Apr-15 (1,096,754) MYR 216,409,761 USD 65,341, Apr-15 (4,057,876) USD 152,498,292 EUR 109,820, Apr-15 19,483,274 USD 146,419,869 JPY 14,877,430, Apr-15 22,130,291 USD 87,668,468 JPY 8,938,940, Apr-15 12,986,802 USD 48,984,237 EUR 35,474, Apr-15 6,014,211 USD 115,974,299 JPY 11,822,710, Apr-15 17,198,556 KRW 35,535,450,000 USD 33,670, Apr-15 (1,342,762) CLP 5,264,779,000 USD 9,104, Apr-15 (522,865) USD 42,459,751 EUR 30,624, Apr-15 5,361,667 USD 290,979,601 EUR 209,634,000 7-May-15 37,013,471 CLP 7,973,100,000 USD 13,608, May-15 (625,868) USD 128,679,201 JPY 13,031,600, May-15 19,776,930 USD 399,748,464 EUR 290,171, May-15 48,191,168 USD 300,091,021 JPY 30,450,681, May-15 45,618,144 SGD 74,950,000 USD 60,121, May-15 (3,653,863) USD 416,767,888 EUR 302,567, May-15 50,188,249 USD 128,139,096 JPY 13,025,211, May-15 19,287,562 USD 161,408,536 EUR 117,583, May-15 18,942,938 SGD 210,184,100 USD 168,234, May-15 (9,886,561) USD 32,049,107 EUR 25,535, May-15 1,109,546 USD 50,611,241 JPY 5,938,470, May ,886 EUR 120,764,000 USD 147,905, May-15 (1,581,234) USD 355,440,839 EUR 269,208, May-15 29,253,239 CLP 7,553,200,000 USD 13,288, May-15 (1,001,065) USD 82,807,723 EUR 60,394, May-15 9,630,159 MXN 420,229,710 USD 31,605, May-15 (3,369,345) PLN 247,495,000 EUR 57,988, May-15 (765,858) SGD 92,580,000 USD 74,026, May-15 (4,281,641) SGD 100,007,500 USD 77,068, May-15 (1,728,342) MXN 375,703,412 USD 28,399, May-15 (3,159,836) MYR 298,519,000 USD 90,824, May-15 (6,584,921) SGD 100,007,500 USD 79,671, May-15 (4,331,970) USD 286,444,303 EUR 210,514,780 1-Jun-15 31,342,532 CLP 20,282,734,000 USD 35,719,730 2-Jun-15 (2,754,147) MYR 46,185,000 USD 14,045,251 2-Jun-15 (1,016,418) CLP 3,079,320,000 USD 5,426,115 3-Jun-15 (421,703) CLP 22,434,400,000 USD 39,476,333 4-Jun-15 (3,019,699) CLP 14,955,979,000 USD 26,216,924 5-Jun-15 (1,914,987) USD 38,584,561 EUR 28,330,380 5-Jun-15 4,252,334 MYR 17,087,000 USD 5,170,828 8-Jun-15 (352,915) PLN 219,800,000 EUR 51,903,278 8-Jun-15 (1,201,226) USD 64,163,497 EUR 47,050,000 8-Jun-15 7,144,021 SGD 201,390,000 USD 160,316,876 9-Jun-15 (8,611,296) USD 100,042,625 EUR 73,353,100 9-Jun-15 11,145,701 PLN 42,829,000 EUR 10,237, Jun-15 (385,618) PLN 219,520,500 EUR 52,409, Jun-15 (1,903,236) USD 123,851,447 EUR 91,288, Jun-15 13,214,662 SGD 103,357,000 USD 78,778, Jun-15 (922,688) USD 87,482,357 EUR 64,545, Jun-15 9,254,954 MYR 147,197,242 USD 41,487, Jun-15 (10,041) Unaudited Semi-Annual Report 103

106 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 186,816,287 EUR 137,739, Jun-15 19,876,462 USD 86,367,158 EUR 63,739, Jun-15 9,114,223 USD 25,341,053 JPY 2,577,996, Jun-15 3,787,833 MYR 228,891,134 USD 64,549, Jun-15 (67,686) SGD 124,673,000 USD 94,887, Jun-15 (979,143) MYR 66,577,867 USD 18,731, Jun-15 18,076 SGD 156,018,000 USD 119,025, Jun-15 (1,506,782) KRW 11,816,100,000 USD 11,419, Jun-15 (688,873) USD 15,530,677 EUR 11,366, Jun-15 1,752,046 MYR 174,589,000 USD 53,169, Jun-15 (4,029,340) USD 172,856,174 JPY 17,515,084, Jun-15 26,397,996 PHP 554,682,000 USD 12,680,185 1-Jul-15 (375,398) USD 186,222,899 JPY 18,819,500,000 1-Jul-15 28,854,555 EUR 146,060,000 USD 178,981,924 2-Jul-15 (1,924,448) USD 199,859,740 EUR 146,060,000 2-Jul-15 22,802,264 PHP 2,484,113,800 USD 56,792,725 3-Jul-15 (1,687,685) PHP 1,000,000,000 USD 22,851,920 7-Jul-15 (669,981) PHP 1,662,833,380 USD 38,016,310 8-Jul-15 (1,131,873) CLP 14,989,447,000 USD 26,308, Jul-15 (2,022,848) USD 13,656,801 JPY 1,382,000, Jul-15 2,098,650 SGD 119,523,000 USD 96,197, Jul-15 (6,168,876) USD 314,957,689 EUR 230,648, Jul-15 35,296,777 USD 268,762,360 EUR 198,205, Jul-15 28,422,944 MYR 148,782,600 USD 45,744, Jul-15 (3,929,727) USD 212,359,166 EUR 156,758, Jul-15 22,271,355 USD 100,589,225 EUR 74,253, Jul-15 10,546,967 MYR 39,470,000 USD 12,204, Jul-15 (1,115,320) USD 84,982,958 EUR 63,004, Jul-15 8,575,831 CLP 36,057,956,000 USD 62,045, Jul-15 (3,710,173) USD 369,577,521 EUR 273,905, Jul-15 37,401,796 USD 3,629,356 EUR 2,694, Jul ,041 USD 107,932,579 JPY 10,950,030, Jul-15 16,322,007 CLP 15,633,510,000 USD 26,866, Jul-15 (1,578,264) MYR 41,499,000 USD 12,832, Jul-15 (1,175,431) CLP 23,261,730,000 USD 39,983, Jul-15 (2,359,636) MYR 42,140,000 USD 12,973, Jul-15 (1,137,428) PLN 293,300,000 EUR 69,138, Jul-15 (1,636,808) USD 223,520,508 EUR 166,253, Jul-15 21,889,290 USD 70,960,060 EUR 52,900,000 3-Aug-15 6,799,935 CLP 15,849,470,000 USD 26,881,733 4-Aug-15 (1,254,832) MXN 1,111,667,000 USD 82,084,250 4-Aug-15 (7,731,570) USD 245,729,431 EUR 183,112,135 4-Aug-15 23,637,011 CLP 8,201,400,000 USD 13,898,322 5-Aug-15 (638,617) USD 294,850,884 EUR 219,336,010 5-Aug-15 28,819,037 CLP 8,607,100,000 USD 14,572,251 6-Aug-15 (657,763) MYR 71,770,000 USD 21,958,757 6-Aug-15 (1,808,858) MXN 759,289,000 USD 55,838,285 7-Aug-15 (5,064,372) SGD 109,020,000 USD 87,580,334 7-Aug-15 (5,459,958) USD 90,732,017 JPY 9,283,700,000 7-Aug-15 13,049,652 MXN 904,750,000 USD 66,645, Aug-15 (6,157,167) USD 180,299,095 EUR 134,810, Aug-15 16,774,629 CLP 12,629,200,000 USD 21,284, Aug-15 (876,179) MXN 1,054,677,000 USD 77,649, Aug-15 (7,142,461) MYR 357,147,132 USD 109,072, Aug-15 (8,835,297) SGD 150,199,100 USD 120,344, Aug-15 (7,204,437) USD 579,049,033 EUR 432,246, Aug-15 54,727,287 USD 106,986,315 JPY 10,900,241, Aug-15 15,770,733 CLP 7,937,100,000 USD 13,411, Aug-15 (586,738) MYR 346,013,000 USD 105,360, Aug-15 (8,254,640) USD 279,693,015 EUR 208,312, Aug-15 27,003,306 USD 26,695,702 JPY 2,709,240, Aug-15 4,023,782 MYR 276,640,798 USD 84,786, Aug-15 (7,154,552) USD 161,600,749 EUR 129,388, Aug-15 4,643,177 MXN 97,002,000 USD 7,227, Aug-15 (745,146) USD 173,706,962 EUR 129,388, Aug-15 16,741,709 CLP 7,451,020,000 USD 12,555, Aug-15 (521,697) USD 377,958,806 EUR 281,745, Aug-15 36,158,622 USD 59,975,468 JPY 6,116,808, Aug-15 8,782,176 CLP 4,009,610,000 USD 6,758, Aug-15 (284,075) USD 376,852,791 EUR 280,890, Aug-15 36,077,840 USD 199,152,530 JPY 20,349,416, Aug-15 28,836,332 MXN 429,910,048 USD 32,099, Aug-15 (3,384,492) PLN 251,713,250 EUR 58,909, Aug-15 (955,716) USD 26,662,831 JPY 2,743,312, Aug-15 3,700, Unaudited Semi-Annual Report

107 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 78,861,930 JPY 8,151,901, Aug-15 10,627,684 USD 397,176,224 EUR 298,491, Aug-15 35,012,345 USD 131,123,703 JPY 13,544,484, Aug-15 17,749,602 CLP 10,812,660,000 USD 18,042, Aug-15 (592,039) MXN 431,241,395 USD 32,080, Aug-15 (3,282,259) USD 43,639,094 EUR 32,948, Aug-15 3,661,976 USD 204,530,073 JPY 21,177,992, Aug-15 27,256,471 CLP 49,810,190,000 USD 82,916, Aug-15 (2,536,347) MXN 809,798,900 USD 60,320, Aug-15 (6,245,722) PHP 1,002,000,000 USD 22,790, Aug-15 (578,076) USD 62,759,445 EUR 47,450, Aug-15 5,182,069 USD 105,979,640 JPY 10,962,269, Aug-15 14,211,624 USD 110,737,777 EUR 83,798,300 2-Sep-15 9,052,697 MXN 414,997,500 USD 30,872,048 4-Sep-15 (3,173,635) CLP 20,026,830,000 USD 33,069,402 8-Sep-15 (780,534) PLN 128,780,000 EUR 30,194,607 8-Sep-15 (578,453) USD 120,429,945 EUR 91,288,750 8-Sep-15 9,644,730 CLP 9,880,090,000 USD 16,204,838 9-Sep-15 (276,660) MXN 910,400,000 USD 67,232, Sep-15 (6,497,796) USD 47,800,010 JPY 5,096,150, Sep-15 5,124,834 SGD 165,648,000 USD 131,258, Sep-15 (6,472,953) USD 59,396,422 EUR 45,641, Sep-15 3,995,819 USD 289,211,541 EUR 223,940, Sep-15 17,377,560 USD 88,799,014 EUR 68,869, Sep-15 5,199,232 MXN 993,142,200 USD 72,837, Sep-15 (6,659,554) MYR 326,776,000 USD 98,600, Sep-15 (7,185,164) USD 334,471,079 EUR 259,350, Sep-15 19,626,489 USD 142,574,430 EUR 111,665, Sep-15 7,012,822 USD 46,983,549 JPY 5,104,245, Sep-15 4,231,254 KRW 20,073,000,000 USD 19,088, Sep-15 (893,452) MXN 477,140,140 USD 34,542, Sep-15 (2,752,984) USD 127,041,230 EUR 99,700, Sep-15 6,002,314 USD 12,191,519 JPY 1,323,298, Sep-15 1,107,499 USD 348,473,872 EUR 273,180,000 1-Oct-15 16,817,006 USD 256,133,184 EUR 203,115,000 7-Oct-15 9,504,582 USD 171,685,207 JPY 18,597,800,000 7-Oct-15 15,879,283 USD 77,448,875 EUR 61,135,000 9-Oct-15 3,213,345 USD 85,843,291 JPY 9,249,400,000 9-Oct-15 8,350,806 USD 86,415,007 JPY 9,302,000, Oct-15 8,473,349 USD 77,384,554 EUR 61,132, Oct-15 3,143,925 USD 80,784,176 JPY 8,538,645, Oct-15 9,226,999 MYR 120,549,401 USD 36,020, Oct-15 (2,346,369) USD 130,284,541 EUR 101,753, Oct-15 6,695,026 USD 152,541,310 JPY 16,127,430, Oct-15 17,383,475 USD 165,914,670 JPY 17,654,980, Oct-15 17,946,965 MYR 115,570,000 USD 34,563, Oct-15 (2,286,894) MYR 140,150,080 USD 42,059, Oct-15 (2,926,024) USD 111,516,206 EUR 87,853, Oct-15 4,794,592 KRW 35,535,450,000 USD 33,357, Oct-15 (1,160,032) USD 238,257,497 EUR 187,608, Oct-15 10,349,728 USD 162,257,627 EUR 127,551, Oct-15 7,304,582 USD 109,977,120 EUR 86,460, Oct-15 4,940,265 MYR 72,564,000 USD 21,729, Oct-15 (1,472,647) USD 162,900,910 EUR 127,570, Oct-15 7,917,102 MXN 649,162,400 USD 47,186,073 3-Nov-15 (4,037,675) USD 9,530,540 EUR 7,525,101 3-Nov ,514 USD 77,518,939 EUR 61,806,000 5-Nov-15 2,420,875 USD 222,027,008 JPY 25,168,330,000 5-Nov-15 11,008,929 USD 66,481,470 EUR 52,920,994 6-Nov-15 2,177,715 USD 74,268,109 JPY 8,376,700,000 6-Nov-15 4,033,680 USD 61,487,057 EUR 49,231, Nov-15 1,661,338 USD 46,453,028 JPY 5,295,761, Nov-15 2,045,887 MXN 342,599,000 USD 24,694, Nov-15 (1,936,975) USD 449,857,580 EUR 360,345, Nov-15 11,943,725 USD 144,608,234 JPY 16,456,349, Nov-15 6,607,448 MXN 711,409,000 USD 51,437, Nov-15 (4,184,860) USD 88,501,664 EUR 70,904, Nov-15 2,332,731 USD 281,907,106 EUR 225,280, Nov-15 8,106,215 USD 65,254,904 JPY 7,474,214, Nov-15 2,570,290 USD 358,924,374 EUR 287,494, Nov-15 9,494,572 USD 57,001,647 JPY 6,611,051, Nov-15 1,553,177 MYR 48,796,560 USD 14,278, Nov-15 (674,527) USD 34,572,974 EUR 27,591, Nov-15 1,036,396 USD 70,663,175 JPY 8,183,149, Nov-15 2,027,273 Unaudited Semi-Annual Report 105

108 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD BRL 314,340,000 USD 110,132, Nov-15 (2,176,132) MYR 97,280,000 USD 28,387, Nov-15 (1,269,280) USD 261,447,227 EUR 208,250, Nov-15 8,321,294 USD 79,310,181 JPY 9,192,050, Nov-15 2,210,053 USD 56,425,181 EUR 44,862, Nov-15 1,891,982 USD 14,756,980 JPY 1,725,091, Nov ,863 USD 97,489,594 EUR 78,200, Nov-15 2,427,020 USD 125,308,191 EUR 100,460, Nov-15 3,179,848 MXN 1,018,032,900 USD 72,982, Nov-15 (5,443,297) USD 167,754,013 EUR 134,566, Nov-15 4,151,732 USD 61,099,869 EUR 48,970,000 4-Dec-15 1,557,642 USD 70,997,091 EUR 57,526,607 9-Dec-15 1,042,707 USD 47,535,385 EUR 37,925, Dec-15 1,415,072 USD 61,755,846 EUR 49,629, Dec-15 1,398,115 MYR 120,700,000 USD 33,710, Dec-15 (119,823) USD 88,416,717 EUR 70,828, Dec-15 2,275,183 USD 268,776,921 EUR 215,288, Dec-15 6,929,720 The above contracts were opened with the following counterparties: 2,489,986,235 2,264,132,661 Bank of America 111,950,623 Barclays Bank 503,100,353 Citibank 154,963,656 Credit Suisse (23,881,364) Deutsche Bank 214,175,100 Goldman Sachs 414,445,428 HSBC Bank 75,323,940 JPMorgan Chase Bank 521,923,704 Morgan Stanley 65,819,846 Royal Bank of Scotland (28,133,746) The Bank of New York Mellon (2,144,774) UBS (18,727,609) Standard Chartered Bank 275,317,504 Templeton Global Bond (Euro) Fund 2,264,132,661 Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR Forward foreign exchange contracts used for efficient portfolio management EUR 211,248 PLN 900, Jan-15 1,399 EUR 5,702,107 BRL 17,901, Jan ,363 EUR 3,726,963 MXN 65,900, Jan-15 41,247 SEK 24,284,109 EUR 2,625, Jan-15 (52,447) EUR 3,447,717 PLN 14,900, Jan-15 (24,601) EUR 188,893 MXN 3,367,579 3-Feb EUR 339,762 PLN 1,448, Feb-15 2,401 EUR 1,030,606 BRL 3,300, Feb-15 18,083 EUR 1,470,449 MXN 27,429, Feb-15 (61,330) EUR 11,670,337 INR 974,239, Feb-15 (971,426) EUR 23,836,446 KRW 35,744,658, Feb-15 (3,087,422) EUR 1,794,480 KRW 2,687,360, Feb-15 (229,619) EUR 10,691,893 MXN 200,526, Feb-15 (501,635) EUR 4,965,739 PLN 21,111, Feb-15 51,908 EUR 18,173,227 USD 25,000, Feb-15 (2,477,179) EUR 1,465,983 BRL 5,150, Feb-15 (110,244) EUR 492,935 PLN 2,100, Feb-15 4,201 EUR 5,897,064 KRW 7,967,700,000 3-Mar-15 (102,371) CLP 575,000,000 EUR 701, Mar-15 75,313 EUR 747,627 CLP 575,000, Mar-15 (28,735) EUR 1,689,176 MXN 29,039,469 7-Apr-15 72,986 EUR 4,591,396 KRW 6,724,100, Apr-15 (460,858) EUR 423,847 MXN 7,935, Apr-15 (17,526) EUR 1,105,391 IDR 18,700,000, Apr-15 (115,559) EUR 5,040,192 MXN 94,443, Apr-15 (207,030) EUR 5,076,367 IDR 80,028,923, May-15 (113,199) EUR 6,479,016 MXN 112,028, May ,780 EUR 10,848,770 PLN 46,500, May-15 72,034 EUR 14,547,100 HUF 4,500,000, May , Unaudited Semi-Annual Report

109 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond (Euro) Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date EUR EUR 22,594,954 MXN 393,041,480 1-Jun ,659 EUR 32,759,436 PLN 138,736,210 5-Jun ,990 EUR 3,210,659 KRW 4,540,000, Jun-15 (192,710) EUR 2,286,396 MXN 42,611, Jun-15 (72,634) EUR 781,021 IDR 13,300,000, Jun-15 (76,615) EUR 10,495,798 USD 14,300, Jun-15 (1,301,656) EUR 1,984,174 PLN 8,400, Jul-15 41,403 EUR 16,588,477 USD 22,630, Jul-15 (2,076,030) EUR 22,699,398 USD 30,630, Jul-15 (2,559,133) EUR 2,364,032 KRW 3,300,000, Jul-15 (105,180) EUR 7,285,998 IDR 120,787,279, Aug-15 (394,813) EUR 7,095,736 KRW 9,711,224, Aug-15 (163,687) EUR 3,242,143 MYR 13,803, Aug-15 53,032 EUR 1,530,111 IDR 25,300,000, Aug-15 (77,430) EUR 24,755,387 KRW 33,614,350, Aug-15 (368,750) EUR 2,353,994 PLN 10,000,000 5-Oct-15 48,855 EUR 2,338,270 USD 3,000, Oct-15 (131,613) EUR 5,761,584 USD 7,100, Dec-15 (76,921) EUR 41,258,544 MYR 184,933, Dec-15 (1,058,593) The above contracts were opened with the following counterparties: (14,452,120) Barclays Bank (4,468,768) Citibank 57,861 Deutsche Bank (3,610,684) HSBC Bank (1,246,063) JPMorgan Chase Bank (5,184,466) Templeton Global Equity Income Fund (14,452,120) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contract used for share class hedging CNH 5,864,988 USD 938, Jan-15 3,222 The above contracts were opened with the following counterparties: Deutsche Bank 3,043 JPMorgan Chase Bank 179 3,222 Templeton Global High Yield Fund Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for efficient portfolio management USD 76,676 JPY 7,985,000 7-Jan-15 10,033 EUR 2,151,218 USD 2,996,545 9-Jan-15 (393,312) USD 2,997,538 EUR 2,193,539 9-Jan ,091 USD 465,628 GBP 285,261 9-Jan-15 21,023 USD 54,690 JPY 5,720, Jan-15 6,948 USD 164,146 JPY 17,150, Jan-15 21,003 USD 155,192 JPY 16,140, Jan-15 20,478 USD 737,124 EUR 538, Jan-15 85,116 USD 234,775 JPY 24,260, Jan-15 32,285 USD 115,308 JPY 11,920, Jan-15 15,807 USD 254,375 JPY 26,005, Jan-15 37,293 INR 73,170,000 USD 1,177, Jan-15 (23,441) USD 702,937 EUR 514, Jan-15 80,726 INR 40,915,000 USD 656,493 3-Feb-15 (11,668) EUR 1,112,969 USD 1,471,105 9-Feb-15 (123,867) GBP 504,535 USD 833,567 9-Feb-15 (47,398) USD 1,877,214 EUR 1,359,082 9-Feb ,059 USD 1,822,215 GBP 1,100,000 9-Feb ,188 USD 226,254 JPY 23,101, Feb-15 33,394 USD 48,814 JPY 4,957, Feb-15 7,427 USD 141,636 JPY 14,450, Feb-15 20,988 USD 141,517 JPY 14,500, Feb-15 20,451 Unaudited Semi-Annual Report 107

110 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global High Yield Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 83,697 EUR 60, Feb-15 9,919 USD 197,312 JPY 20,168, Feb-15 28,920 USD 142,553 EUR 104, Feb-15 16,645 INR 40,915,000 USD 650,036 3-Mar-15 (8,178) USD 422,284 JPY 43,000,000 3-Mar-15 63,239 USD 198,922 JPY 20,300,000 4-Mar-15 29,418 USD 413,595 EUR 300,000 5-Mar-15 50,382 EUR 5,354,900 USD 7,024,903 9-Mar-15 (541,445) USD 9,194,936 EUR 6,697,991 9-Mar-15 1,085,330 USD 1,037,011 GBP 618,946 9-Mar-15 72,784 GHS 80,000 USD 25, Mar-15 (1,802) USD 582,345 EUR 419, Mar-15 74,635 USD 466,691 EUR 335, Mar-15 60,084 USD 408,776 JPY 41,366, Mar-15 63,312 USD 584,518 EUR 420, Mar-15 75,938 USD 231,783 EUR 168, Mar-15 28,347 USD 159,894 JPY 16,315, Mar-15 23,627 USD 305,685 EUR 221, Mar-15 36,894 USD 1,077,411 EUR 782, Mar ,546 GHS 327,474 USD 99,385 7-Apr-15 (3,019) USD 153,556 EUR 111,228 7-Apr-15 18,849 USD 3,814,800 EUR 2,750, Apr ,035 USD 3,446,253 EUR 2,490, Apr ,523 USD 1,377,638 EUR 1,040,448 7-May ,162 USD 143,192 GBP 84,567 7-May-15 11,515 USD 724,249 EUR 525, May-15 87,505 USD 395,407 EUR 292, May-15 41,034 USD 63,221 JPY 7,418, May-15 1,224 USD 3,105,219 EUR 2,266,749 5-Jun ,255 USD 760,004 EUR 556, Jun-15 85,875 USD 31,652 JPY 3,220, Jun-15 4,731 USD 1,338,238 EUR 1,075, Jun-15 34,733 USD 1,628,687 EUR 1,192, Jun ,735 USD 215,933 JPY 21,880, Jun-15 32,977 PHP 2,874,000 USD 65,700 1-Jul-15 (1,941) USD 123,151 EUR 90,000 2-Jul-15 14,050 PHP 13,436,450 USD 307,189 3-Jul-15 (9,129) PHP 8,994,140 USD 205,627 8-Jul-15 (6,122) USD 846,119 EUR 621,005 9-Jul-15 93,236 USD 129,703 EUR 95, Jul-15 13,600 USD 414,763 EUR 307, Jul-15 41,779 USD 68,713 EUR 51, Jul-15 6,854 USD 134,250 JPY 13,620, Jul-15 20,302 USD 673,383 EUR 502,000 3-Aug-15 64,529 USD 212,969 EUR 158,417 5-Aug-15 20,826 USD 347,048 EUR 259, Aug-15 32,877 USD 143,210 JPY 14,591, Aug-15 21,110 USD 38,429 JPY 3,900, Aug-15 5,792 USD 73,910 JPY 7,538, Aug-15 10,823 USD 262,847 JPY 26,858, Aug-15 38,057 USD 33,036 JPY 3,399, Aug-15 4,585 USD 97,708 JPY 10,100, Aug-15 13,167 USD 173,060 JPY 17,876, Aug-15 23,429 USD 30,844 EUR 23, Aug-15 2,588 USD 264,920 JPY 27,435, Aug-15 35,272 USD 32,541 JPY 3,366, Aug-15 4,364 USD 206,128 EUR 156,250 8-Sep-15 16,508 USD 383,925 EUR 297, Sep-15 23,064 USD 15,533 JPY 1,686, Sep-15 1,411 USD 707,133 EUR 554,344 1-Oct-15 34,126 USD 125,920 EUR 99, Oct-15 5,417 USD 90,908 EUR 71, Oct-15 4,672 USD 125,753 EUR 98, Oct-15 5,661 USD 255,060 EUR 200, Oct-15 12,088 USD 97,811 EUR 76, Oct-15 4,754 USD 66,534 JPY 7,585, Nov-15 2,930 USD 168,244 EUR 135, Nov-15 4,183 USD 186,236 JPY 21,197, Nov-15 8,481 USD 246,380 EUR 196, Nov-15 7,102 USD 89,529 JPY 10,254, Nov-15 3,530 USD 71,202 JPY 8,258, Nov-15 1,940 USD 88,269 JPY 10,222, Nov-15 2,532 USD 99,077 JPY 11,483, Nov-15 2,761 USD 18,435 JPY 2,155, Nov Unaudited Semi-Annual Report

111 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global High Yield Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 98,573 EUR 79,417 9-Dec-15 1,999 USD 216,008 EUR 173, Dec-15 5,594 The above contracts were opened with the following counterparties: 4,281,511 Barclays Bank 109,776 Citibank 64,404 Deutsche Bank 3,091,420 Goldman Sachs 51,756 HSBC Bank 104,970 JPMorgan Chase Bank 316,921 Morgan Stanley 38,488 Standard Chartered Bank 503,776 Templeton Global Income Fund 4,281,511 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging EUR 45,129,971 USD 55,898, Jan-15 (1,282,409) SGD 599,068 USD 455, Jan-15 (3,315) USD 995,010 EUR 801, Jan-15 25,598 USD 10,997 SGD 14, Jan (1,260,024) Forward foreign exchange contracts used for efficient portfolio management USD 179,662 JPY 18,710,000 7-Jan-15 23,508 MYR 188,400 USD 56,225 8-Jan-15 (2,389) USD 1,030,383 JPY 106,862,000 8-Jan ,503 CLP 96,720,000 USD 157,409 9-Jan-15 1,785 MYR 101,000 USD 30,164 9-Jan-15 (1,305) USD 251,441 EUR 184,250 9-Jan-15 28,476 CLP 2,806,402,500 USD 4,586, Jan-15 31,090 MYR 30,000 USD 8, Jan-15 (400) USD 89,779 JPY 9,390, Jan-15 11,406 CLP 68,410,000 USD 111, Jan-15 1,511 INR 1,760,000 USD 28, Jan-15 (544) USD 269,717 JPY 28,180, Jan-15 34,512 CLP 64,187,000 USD 103, Jan-15 1,742 INR 5,806,000 USD 93, Jan-15 (1,705) USD 268,942 JPY 27,970, Jan-15 35,488 CLP 69,473,000 USD 112, Jan-15 1,488 USD 410,810 JPY 42,450, Jan-15 56,494 CLP 88,509,000 USD 142, Jan-15 3,406 INR 15,468,000 USD 249, Jan-15 (4,634) INR 6,571,000 USD 105, Jan-15 (1,221) INR 5,592,000 USD 89, Jan-15 (1,274) CLP 114,520,000 USD 206, Jan-15 (18,728) CLP 162,440,000 USD 287, Jan-15 (20,917) INR 3,501,000 USD 55, Jan-15 (637) USD 335,865 JPY 34,720, Jan-15 46,041 EUR 7,224,473 SEK 66,856, Jan ,231 SEK 66,856,000 EUR 7,264, Jan-15 (219,880) USD 740,968 JPY 75,751, Jan ,630 CLP 47,255,000 USD 78, Jan-15 (858) INR 88,411,350 USD 1,421, Jan-15 (27,612) USD 8,917,575 EUR 6,524, Jan-15 1,020,913 CLP 45,438,000 USD 75,844 2-Feb-15 (1,262) INR 42,015,500 USD 675,138 2-Feb-15 (12,861) CLP 38,777,000 USD 64,715 3-Feb-15 (1,071) INR 65,884,125 USD 1,057,137 3-Feb-15 (18,796) USD 3,307,298 EUR 2,440,000 3-Feb ,832 CLP 60,980,000 USD 107,586 4-Feb-15 (7,510) INR 8,557,000 USD 137,347 4-Feb-15 (2,510) USD 4,158,124 JPY 419,900,000 6-Feb ,737 INR 24,612,000 USD 395,323 9-Feb-15 (7,813) MYR 10,790,000 USD 3,343,766 9-Feb-15 (270,451) USD 4,158,611 JPY 420,520,000 9-Feb ,965 INR 2,394,000 USD 38, Feb-15 (780) INR 3,140,000 USD 50, Feb-15 (938) Unaudited Semi-Annual Report 109

112 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Income Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD CLP 117,460,000 USD 205, Feb-15 (12,881) CLP 54,400,000 USD 93, Feb-15 (3,913) INR 2,875,000 USD 45, Feb-15 (721) USD 12,096,480 EUR 8,800, Feb-15 1,443,091 CLP 26,480,000 USD 46, Feb-15 (2,716) USD 847,696 JPY 86,649, Feb ,222 CLP 54,480,000 USD 94,028 3-Mar-15 (4,805) INR 62,294,125 USD 989,696 3-Mar-15 (12,451) INR 1,178,000 USD 18,811 9-Mar-15 (352) USD 555,757 EUR 402,108 9-Mar-15 68,904 CLP 66,030,000 USD 112, Mar-15 (4,174) INR 2,913,000 USD 46, Mar-15 (768) MYR 3,582,750 USD 1,086,017 2-Apr-15 (70,290) CLP 86,660,000 USD 152, Apr-15 (11,439) CLP 54,910,000 USD 94, Apr-15 (5,453) USD 2,050,881 EUR 1,482, Apr ,611 USD 1,029,230 EUR 742,665 5-May ,530 USD 132,652 EUR 100,331 7-May-15 11,104 USD 2,694,461 EUR 1,964, May ,921 USD 2,139,618 EUR 1,560, May ,495 USD 4,365,000 JPY 443,178, May ,182 USD 17,460,000 JPY 1,770,821, May-15 2,660,366 USD 2,516,821 EUR 1,849, May ,134 USD 148,140 JPY 17,382, May-15 2,868 USD 7,712,128 EUR 5,617, May ,323 SGD 12,847,790 USD 10,224,655 9-Jun-15 (546,511) PLN 4,855,146 EUR 1,161, Jun-15 (44,867) USD 5,131,155 JPY 524,060, Jun ,148 USD 2,465,146 JPY 251,830, Jun ,887 USD 842,949 JPY 85,746, Jun ,073 USD 3,589,708 JPY 365,540, Jun ,441 USD 8,195,205 EUR 6,025, Jun ,304 USD 9,600,398 JPY 975,400, Jun-15 1,444,711 PHP 25,552,280 USD 569, Jun-15 (2,564) PHP 8,671,520 USD 197, Jun-15 (4,776) PHP 8,577,000 USD 196,073 1-Jul-15 (5,805) MYR 1,616,250 USD 493,451 2-Jul-15 (38,596) MYR 289,940 USD 88,640 3-Jul-15 (7,048) MYR 2,745,100 USD 839,917 7-Jul-15 (67,636) USD 4,504,830 EUR 3,300, Jul ,773 USD 938,105 EUR 691, Jul-15 99,097 USD 199,982 EUR 147, Jul-15 21,132 USD 129,703 EUR 95, Jul-15 13,600 CLP 101,150,000 USD 174, Jul-15 (10,439) USD 391,218 JPY 39,690, Jul-15 59,162 CLP 34,720,000 USD 59, Jul-15 (3,505) CLP 32,680,000 USD 56, Jul-15 (3,337) USD 1,992,490 EUR 1,482, Jul ,124 CLP 65,350,000 USD 110,838 4-Aug-15 (5,174) USD 3,976,383 EUR 2,963,000 4-Aug ,630 USD 994,764 EUR 740,000 5-Aug-15 97,220 MYR 10,790,000 USD 3,301,310 6-Aug-15 (271,946) USD 314,533 JPY 32,043, Aug-15 46,390 USD 350,510 JPY 35,748, Aug-15 51,325 USD 1,196,323 JPY 122,241, Aug ,217 USD 155,877 JPY 16,038, Aug-15 21,636 USD 461,036 JPY 47,657, Aug-15 62,131 USD 787,659 JPY 81,361, Aug ,627 CLP 40,930,000 USD 68, Aug-15 (2,241) USD 1,386,982 JPY 143,607, Aug ,897 USD 39,890 EUR 30, Aug-15 3,294 USD 1,000,459 JPY 103,485, Aug ,159 CLP 122,760,000 USD 202,708 8-Sep-15 (4,785) CLP 67,860,000 USD 111,301 9-Sep-15 (1,900) USD 127,975 EUR 99, Sep-15 7,688 PHP 25,552,280 USD 569, Sep-15 (3,239) USD 79,794 JPY 8,661, Sep-15 7,249 USD 43,070,773 JPY 4,687,702,600 7-Oct-15 3,798,826 USD 10,105,107 JPY 1,088,800,000 9-Oct ,021 USD 10,172,483 JPY 1,095,000, Oct ,454 USD 21,069,024 EUR 16,565, Oct ,491 MYR 658,000 USD 196, Oct-15 (13,020) MYR 341,110 USD 102, Oct-15 (7,127) USD 1,530,360 EUR 1,200, Oct-15 72, Unaudited Semi-Annual Report

113 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Income Fund (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 4,906,804 EUR 3,842, Oct ,474 USD 2,361,715 EUR 1,883,000 5-Nov-15 73,755 USD 12,341,520 JPY 1,392,000,000 6-Nov ,298 USD 5,449,169 EUR 4,363, Nov ,233 USD 3,863,375 EUR 3,100, Nov-15 96,064 UYU 3,700,000 USD 141, Nov-15 (3,855) USD 2,002,448 EUR 1,600, Nov-15 57,846 USD 109,876 JPY 12,600, Nov-15 4,202 USD 8,993,031 EUR 7,195, Nov ,987 USD 166,856 JPY 19,352, Nov-15 4,546 USD 206,839 JPY 23,953, Nov-15 5,934 MYR 166,000 USD 48, Nov-15 (2,166) USD 232,148 JPY 26,906, Nov-15 6,469 UYU 3,700,000 USD 141, Nov-15 (3,600) USD 43,199 JPY 5,050, Nov UYU 5,480,000 USD 213,064 1-Dec-15 (10,161) USD 3,469,480 EUR 2,800,000 7-Dec-15 64,742 USD 227,906 EUR 183,617 9-Dec-15 4,621 MYR 15,378,480 USD 4,283, Dec-15 (2,597) USD 15,263,349 EUR 12,275, Dec ,402 USD 6,248,705 JPY 730,380, Dec ,321 USD 3,725,986 JPY 440,200, Dec-15 30,500 23,836,020 22,575,996 The above contracts were opened with the following counterparties: Bank of America 1,633,618 Barclays Bank 3,145,878 Citibank 1,881,368 Credit Suisse (8,756) Deutsche Bank 9,142,619 Goldman Sachs 1,114,973 HSBC Bank 1,430,828 JPMorgan Chase Bank 3,362,227 Morgan Stanley (11,547) Royal Bank of Scotland (2,719) UBS 157,320 Standard Chartered Bank 730,187 Templeton Global Total Return Fund 22,575,996 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging BRL 2,259,399 USD 890,000 5-Jan-15 (40,921) USD 890,000 BRL 2,378,516 5-Jan-15 (3,842) EUR 3,338,825,589 USD 4,101,991, Jan-15 (61,475,870) GBP 283,558,290 USD 443,034, Jan-15 (1,094,718) PLN 1,136,492,366 USD 334,901, Jan-15 (14,051,526) USD 217,314,026 EUR 174,694, Jan-15 5,905,067 USD 90,012,181 GBP 57,374, Jan ,854 USD 15,138,579 PLN 50,928, Jan ,576 JPY 10,465,052,417 USD 86,966, Jan ,938 CHF 476,921,375 USD 492,157, Jan-15 (12,331,837) EUR 2,673,362,700 USD 3,312,560, Jan-15 (77,254,903) GBP 949,671 USD 1,488, Jan-15 (8,785) NOK 51,986,608 USD 7,131, Jan-15 (175,782) SGD 696,879,759 USD 529,880, Jan-15 (4,052,402) USD 21,899,252 CHF 21,139, Jan ,620 USD 137,618,604 EUR 110,693, Jan-15 3,657,740 USD 30,953 GBP 19, Jan USD 157,957 NOK 1,164, Jan-15 2,175 USD 26,804,742 SGD 35,057, Jan ,350 AUD 131,546,494 USD 107,568, Jan-15 (321,883) CHF 1,551,654 USD 1,590, Jan-15 (29,250) CNH 130,404,141 USD 20,871, Jan-15 67,402 EUR 2,649,810,642 USD 3,267,409, Jan-15 (60,428,724) GBP 162,876,163 USD 254,924, Jan-15 (1,090,682) Unaudited Semi-Annual Report 111

114 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD NOK 111,835,582 USD 15,179, Jan-15 (218,618) SEK 1,204,277,371 USD 157,502, Jan-15 (3,080,051) BRL 2,290,920 USD 850,000 3-Feb-15 4,375 (223,307,580) Forward foreign exchange contracts used for efficient portfolio management CLP 2,816,620,000 USD 5,132,793 7-Jan-15 (495,720) USD 16,916,209 JPY 1,761,654,000 7-Jan-15 2,213,424 MYR 266,012,500 USD 79,375,308 8-Jan-15 (3,360,588) USD 26,225,222 JPY 2,719,844,000 8-Jan-15 3,525,175 CLP 2,306,070,000 USD 3,753,064 9-Jan-15 42,561 EUR 5,237,300 USD 7,120,109 9-Jan-15 (782,345) MYR 126,317,000 USD 37,724,585 9-Jan-15 (1,632,570) USD 89,405,241 EUR 65,525,294 9-Jan-15 10,111,736 CLP 12,245,390,000 USD 21,556, Jan-15 (1,408,910) MYR 37,856,000 USD 11,317, Jan-15 (504,217) USD 6,854,504 EUR 5,043, Jan ,690 USD 4,741,945 JPY 495,960, Jan ,441 CLP 4,435,620,000 USD 7,198, Jan-15 97,963 INR 905,518,000 USD 14,605, Jan-15 (279,933) USD 14,238,993 JPY 1,487,690, Jan-15 1,821,959 CLP 13,590,092,000 USD 21,983, Jan ,799 INR 462,213,000 USD 7,446, Jan-15 (135,747) MYR 40,586,500 USD 12,175, Jan-15 (586,152) USD 29,303,084 EUR 21,471, Jan-15 3,318,859 USD 127,722,723 JPY 13,251,910, Jan-15 17,114,433 CLP 14,709,418,000 USD 23,875, Jan ,155 MYR 6,919,000 USD 2,084, Jan-15 (109,266) USD 1,151,208 EUR 841, Jan ,930 USD 150,009,162 JPY 15,504,730, Jan-15 20,596,377 CLP 2,110,322,000 USD 3,387, Jan-15 81,206 INR 7,850,593,232 USD 125,894, Jan-15 (1,843,462) MXN 454,357,500 USD 30,827, Jan-15 (54,286) USD 121,991,503 JPY 12,671,309, Jan-15 16,224,650 INR 389,647,000 USD 6,228, Jan-15 (72,419) USD 87,981,650 EUR 64,550, Jan-15 9,857,988 INR 404,974,000 USD 6,485, Jan-15 (89,099) CLP 4,143,410,000 USD 7,485, Jan-15 (677,586) MYR 24,830,235 USD 7,342, Jan-15 (258,907) CLP 5,877,160,000 USD 10,410, Jan-15 (756,771) SGD 46,570,000 USD 37,541, Jan-15 (2,411,819) EUR 8,115,410 SEK 75,100, Jan ,376 INR 3,920,495,960 USD 62,938, Jan-15 (1,073,894) SEK 156,060,000 EUR 16,971, Jan-15 (529,518) USD 87,948,426 EUR 64,368, Jan-15 10,039,704 USD 24,135,236 JPY 2,494,980, Jan-15 3,308,482 EUR 10,821,960 SEK 100,147, Jan ,497 SEK 100,147,500 EUR 10,882, Jan-15 (329,371) USD 53,240,077 JPY 5,442,893, Jan-15 7,805,326 SEK 855,976,700 EUR 92,533, Jan-15 (2,236,876) CLP 8,715,040,000 USD 14,466, Jan-15 (158,176) EUR 39,595,560 SEK 365,958, Jan ,621 INR 5,855,675,274 USD 94,162, Jan-15 (1,816,712) SEK 365,958,000 EUR 39,067, Jan-15 (359,587) USD 43,828,939 EUR 32,069, Jan-15 5,011,367 CLP 10,131,697,000 USD 16,898,410 2-Feb-15 (268,351) INR 2,117,781,737 USD 34,030,157 2-Feb-15 (648,247) CLP 7,151,464,200 USD 11,935,020 3-Feb-15 (197,583) INR 993,691,250 USD 15,944,803 3-Feb-15 (284,120) CLP 5,521,970,000 USD 9,742,361 4-Feb-15 (680,047) INR 697,107,000 USD 11,189,159 4-Feb-15 (204,465) CLP 4,998,900,000 USD 8,808,169 5-Feb-15 (604,913) MYR 51,862,800 USD 15,206,803 5-Feb-15 (429,392) USD 283,254,170 JPY 28,603,870,000 6-Feb-15 44,464,889 CLP 9,939,870,000 USD 17,174,638 9-Feb-15 (868,186) INR 4,030,576,000 USD 64,658,525 9-Feb-15 (1,198,213) MYR 166,827,500 USD 51,698,999 9-Feb-15 (4,181,529) SGD 42,628,000 USD 34,211,878 9-Feb-15 (2,059,215) USD 150,699,739 EUR 108,643,558 9-Feb-15 19,187,834 USD 283,253,907 JPY 28,642,720,000 9-Feb-15 44,134,590 CLP 3,226,100,000 USD 5,549, Feb-15 (257,759) MXN 444,843,000 USD 32,682, Feb-15 (2,593,206) 112 Unaudited Semi-Annual Report

115 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD MYR 304,668,846 USD 90,261, Feb-15 (3,490,565) PLN 505,157,841 EUR 118,179, Feb-15 (627,615) SEK 526,800,000 EUR 59,270, Feb-15 (4,191,476) USD 17,458,456 EUR 12,836, Feb-15 1,920,498 USD 63,015,050 JPY 6,397,792, Feb-15 9,603,648 MXN 120,168,000 USD 8,936, Feb-15 (808,693) USD 14,619,494 EUR 10,752, Feb-15 1,604,121 CLP 5,743,610,000 USD 9,978, Feb-15 (558,191) INR 1,281,494,500 USD 20,584, Feb-15 (417,514) KRW 43,810,000,000 USD 40,288, Feb-15 (320,632) MXN 847,478,000 USD 61,972, Feb-15 (4,656,003) MYR 190,865,000 USD 56,321, Feb-15 (1,972,103) SGD 193,528,907 USD 154,439, Feb-15 (8,468,508) USD 361,352,573 JPY 36,813,958, Feb-15 54,009,602 INR 6,603,396,325 USD 105,874, Feb-15 (1,973,515) KRW 58,889,000,000 USD 54,101, Feb-15 (378,387) MXN 457,839,000 USD 33,443, Feb-15 (2,480,564) MYR 333,400,848 USD 97,923, Feb-15 (2,995,407) SGD 21,600,000 USD 17,292, Feb-15 (1,000,400) USD 59,569,562 EUR 43,538, Feb-15 6,865,736 USD 335,582,071 JPY 34,227,570, Feb-15 49,829,402 CLP 6,387,910,000 USD 11,154, Feb-15 (681,646) MXN 449,959,410 USD 33,418, Feb-15 (2,995,802) SGD 98,149,000 USD 78,581, Feb-15 (4,551,256) USD 111,622,795 JPY 11,389,990, Feb-15 16,529,171 CLP 4,252,650,000 USD 7,277, Feb-15 (305,864) MYR 205,476,618 USD 60,806, Feb-15 (2,327,865) SGD 25,873,000 USD 20,469, Feb-15 (954,136) USD 234,913,969 JPY 23,850,112, Feb-15 35,790,734 MYR 16,919,000 USD 5,038, Feb-15 (223,720) USD 17,811,938 EUR 12,988, Feb-15 2,088,959 CLP 2,371,073,000 USD 4,063, Feb-15 (177,040) INR 6,486,475,320 USD 103,820, Feb-15 (1,874,823) USD 108,139,309 EUR 78,700, Feb-15 12,866,182 CLP 2,823,310,000 USD 4,942, Feb-15 (316,061) INR 3,363,370,960 USD 53,542, Feb-15 (707,048) KRW 29,344,000,000 USD 27,238, Feb-15 (479,393) MYR 357,140,000 USD 106,291, Feb-15 (4,695,786) SGD 25,873,500 USD 20,718, Feb-15 (1,202,888) USD 8,369,744 EUR 6,082, Feb-15 1,006,800 CLP 3,973,600,000 USD 6,961, Feb-15 (450,206) INR 88,255,000 USD 1,401, Feb-15 (15,720) USD 19,823,764 JPY 2,022,460, Feb-15 2,937,553 CLP 13,784,210,000 USD 23,398, Feb-15 (812,684) MYR 46,388,000 USD 13,790, Feb-15 (596,704) USD 75,521,492 JPY 7,736,000, Feb-15 10,930,469 CLP 3,043,220,000 USD 5,298, Feb-15 (312,142) USD 39,569,185 EUR 28,811, Feb-15 4,689,393 USD 148,004,741 JPY 15,134,269, Feb-15 21,641,541 UYU 309,300,000 USD 12,322, Feb ,557 MXN 249,579,600 USD 18,604, Feb-15 (1,740,012) PLN 366,592,135 EUR 85,961, Feb-15 (780,173) SGD 112,701,000 USD 90,045, Feb-15 (5,039,508) USD 167,122,142 EUR 121,764, Feb-15 19,707,954 USD 100,335,927 JPY 10,227,241, Feb-15 14,943,154 SEK 172,633,500 EUR 19,262,832 2-Mar-15 (1,181,211) CLP 2,649,575,000 USD 4,572,963 3-Mar-15 (233,690) INR 609,212,250 USD 9,678,839 3-Mar-15 (121,769) PLN 113,777,000 EUR 26,698,815 3-Mar-15 (272,392) USD 60,154,765 JPY 6,125,400,000 3-Mar-15 9,008,513 UYU 270,100,000 USD 10,743,835 3-Mar ,714 KRW 84,965,430,000 USD 83,185,265 4-Mar-15 (5,733,437) MYR 62,200,000 USD 18,626,101 4-Mar-15 (946,354) USD 28,362,567 JPY 2,894,400,000 4-Mar-15 4,194,451 MYR 55,200,000 USD 16,506,190 5-Mar-15 (817,538) PLN 149,713,020 EUR 34,894,073 5-Mar-15 (75,703) SGD 37,209,000 USD 29,351,582 5-Mar-15 (1,289,649) USD 28,487,045 EUR 20,663,000 5-Mar-15 3,470,173 UYU 309,600,000 USD 12,285,714 6-Mar ,934 GBP 4,829,338 USD 8,155,880 9-Mar-15 (632,484) INR 239,617,000 USD 3,826,311 9-Mar-15 (71,657) USD 365,683,758 EUR 266,129,214 9-Mar-15 43,467,226 USD 27,170,640 GBP 16,200,000 9-Mar-15 1,933,431 USD 171,950,572 JPY 17,583,306,860 9-Mar-15 25,122,413 Unaudited Semi-Annual Report 113

116 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD GHS 12,750,000 USD 4,112, Mar-15 (287,171) MXN 1,179,814,300 USD 89,096, Mar-15 (9,431,817) SGD 47,385,000 USD 37,714, Mar-15 (1,983,917) USD 49,643,701 EUR 35,858, Mar-15 6,228,158 MYR 484,446,597 USD 145,966, Mar-15 (8,353,472) SGD 87,626,630 USD 69,385, Mar-15 (3,311,783) KRW 85,991,310,000 USD 79,415, Mar-15 (1,057,274) MYR 123,193,860 USD 36,838, Mar-15 (1,846,603) PLN 157,248,740 EUR 36,707, Mar-15 (166,425) CLP 2,388,810,000 USD 4,059, Mar-15 (151,004) INR 1,091,268,000 USD 17,374, Mar-15 (287,809) PLN 66,094,300 EUR 15,345, Mar-15 29,626 UYU 381,120,000 USD 15,087, Mar ,752 MYR 280,600,000 USD 86,031, Mar-15 (6,359,623) SGD 154,775,600 USD 119,879, Mar-15 (3,190,877) USD 51,677,601 EUR 37,290, Mar-15 6,525,806 MXN 2,015,813,680 USD 136,537, Mar-15 (484,419) PLN 239,207,608 EUR 55,391, Mar ,327 USD 33,726,235 EUR 24,179, Mar-15 4,449,096 USD 20,774,355 JPY 2,125,673, Mar-15 3,022,464 SGD 59,130,000 USD 46,720, Mar-15 (2,143,376) USD 250,141,193 EUR 180,106, Mar-15 32,058,942 KRW 192,445,190,000 USD 184,812, Mar-15 (9,505,275) MYR 874,546,000 USD 261,387, Mar-15 (13,141,911) PLN 71,468,215 EUR 16,560, Mar-15 65,262 USD 68,046,342 EUR 48,961, Mar-15 8,760,641 USD 284,533,922 JPY 28,853,102, Mar-15 43,570,905 CLP 2,361,500,000 USD 4,005, Mar-15 (144,006) MYR 49,275,000 USD 14,789, Mar-15 (803,504) MYR 88,549,500 USD 26,476, Mar-15 (1,349,789) PLN 82,575,900 EUR 19,210, Mar-15 (22,011) USD 196,391,318 EUR 141,095, Mar-15 25,538,442 USD 92,498,551 JPY 9,445,582, Mar-15 13,610,514 USD 33,775,456 EUR 24,481, Mar-15 4,130,763 USD 133,843,982 JPY 13,667,830, Mar-15 19,691,088 MYR 90,074,500 USD 26,738, Mar-15 (1,186,585) PLN 42,873,500 EUR 10,181, Mar-15 (265,023) USD 3,387,789 EUR 2,460, Mar ,883 UYU 407,900,000 USD 16,128, Mar ,997 MYR 33,196,000 USD 9,862, Mar-15 (448,540) MYR 217,390,000 USD 64,741, Mar-15 (3,100,601) PLN 37,860,000 EUR 8,854, Mar-15 (71,025) SEK 713,961,444 USD 109,571, Mar-15 (17,995,890) SGD 244,105,000 USD 192,935, Mar-15 (8,983,064) USD 2,988,266 EUR 2,170, Mar ,304 MYR 660,295,762 USD 202,519,863 1-Apr-15 (15,307,487) MYR 731,170,000 USD 221,634,956 2-Apr-15 (14,344,658) USD 31,837,011 EUR 23,096,239 2-Apr-15 3,867,049 SGD 32,500,000 USD 25,806,964 6-Apr-15 (1,316,430) PLN 115,206,600 EUR 26,970,994 7-Apr-15 (260,235) USD 38,254,551 EUR 27,720,188 7-Apr-15 4,683,099 PLN 64,139,769 EUR 15,045,688 9-Apr-15 (182,691) MYR 73,540,000 USD 22,080, Apr-15 (1,245,415) USD 45,084,051 EUR 32,701, Apr-15 5,479,144 USD 151,295,123 EUR 109,589, Apr-15 18,564,586 USD 74,918,775 EUR 54,052, Apr-15 9,452,381 KRW 86,129,982,260 USD 81,748, Apr-15 (3,366,168) USD 13,594,560 EUR 9,800, Apr-15 1,724,924 USD 30,925,696 JPY 3,130,500, Apr-15 4,773,395 CLP 2,066,250,000 USD 3,644, Apr-15 (272,735) USD 71,098,215 EUR 51,200, Apr-15 9,083,551 USD 169,125,659 JPY 17,184,520, Apr-15 25,562,105 USD 101,263,498 JPY 10,325,130, Apr-15 15,000,707 SEK 387,456,422 EUR 42,333, Apr-15 (1,574,205) USD 40,097,487 EUR 29,039, Apr-15 4,923,107 USD 130,762,342 JPY 13,330,240, Apr-15 19,391,567 CLP 1,309,218,000 USD 2,264, Apr-15 (130,023) USD 45,812,780 EUR 33,042, Apr-15 5,785,076 USD 232,475,258 EUR 167,889,413 7-May-15 29,081,609 USD 27,572,416 GBP 16,579,388 7-May-15 1,757,160 CLP 2,324,300,000 USD 3,967, May-15 (182,452) USD 63,174,323 JPY 6,397,790, May-15 9,709,371 USD 291,349,288 EUR 211,436, May-15 35,183, Unaudited Semi-Annual Report

117 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 147,327,954 JPY 14,949,586, May-15 22,395,964 SGD 37,800,000 USD 30,321, May-15 (1,842,776) USD 98,320,290 EUR 71,379, May-15 11,839,979 USD 62,909,148 JPY 6,394,652, May-15 9,469,117 USD 210,967,767 EUR 153,775, May-15 24,657,328 USD 308,982,391 EUR 225,220, May-15 36,101,942 SGD 90,649,800 USD 72,557, May-15 (4,263,952) USD 1,486,474 EUR 1,184, May-15 51,462 USD 13,948,609 JPY 1,636,660, May ,059 USD 246,583,397 EUR 185,805, May-15 21,450,677 CLP 1,091,910,000 USD 1,921, May-15 (144,716) USD 59,339,548 EUR 43,278, May-15 6,900,917 MXN 212,322,831 USD 15,968, May-15 (1,702,376) PLN 81,674,000 EUR 19,136, May-15 (252,735) RSD 1,199,000,000 EUR 9,700, May-15 (140,724) SGD 57,544,000 USD 46,011, May-15 (2,661,295) SGD 50,409,500 USD 38,846, May-15 (871,183) KRW 145,733,050,000 USD 140,235, May-15 (7,784,629) MXN 189,825,730 USD 14,348, May-15 (1,596,521) MYR 303,597,000 USD 92,484, May-15 (6,812,046) SGD 139,500,292 USD 111,164, May-15 (6,073,770) UYU 308,850,000 USD 12,083, May-15 15,884 USD 95,788,142 EUR 70,397,000 1-Jun-15 10,481,070 MYR 14,696,000 USD 4,469,179 2-Jun-15 (323,423) CLP 312,770,000 USD 551,137 3-Jun-15 (42,833) USD 549,177,362 JPY 55,720,633,500 3-Jun-15 83,407,071 CLP 6,549,300,000 USD 11,524,371 4-Jun-15 (881,544) USD 233,943,357 JPY 23,878,130,560 4-Jun-15 34,342,979 CLP 4,398,585,000 USD 7,707,980 5-Jun-15 (560,729) USD 31,232,632 EUR 22,932,290 5-Jun-15 3,442,092 MYR 14,772,000 USD 4,470,268 8-Jun-15 (305,101) PLN 61,000,000 EUR 14,404,458 8-Jun-15 (333,370) USD 5,182,174 EUR 3,800,000 8-Jun ,988 SGD 128,545,000 USD 102,328,480 9-Jun-15 (5,496,494) USD 94,482,618 EUR 69,276,400 9-Jun-15 10,526,263 USD 320,366,653 JPY 32,721,800,000 9-Jun-15 46,824,214 USD 653,994,705 JPY 66,811,010, Jun-15 95,471,959 PLN 10,997,000 EUR 2,628, Jun-15 (99,013) USD 252,406,495 JPY 25,784,890, Jun-15 36,848,861 PLN 56,366,000 EUR 13,457, Jun-15 (488,691) USD 122,935,810 EUR 90,613, Jun-15 13,116,966 PLN 233,691,030 EUR 55,561, Jun-15 (1,754,839) SGD 46,202,000 USD 35,214, Jun-15 (412,454) USD 176,244,241 EUR 129,944, Jun-15 18,751,641 KRW 42,321,600,000 USD 40,933, Jun-15 (2,491,036) USD 80,784,965 EUR 59,619, Jun-15 8,525,141 USD 85,734,180 JPY 8,721,004, Jun-15 12,822,618 MYR 175,700,000 USD 53,396, Jun-15 (3,895,297) MYR 317,491,850 USD 96,145, Jun-15 (6,725,980) SGD 55,731,000 USD 42,416, Jun-15 (437,694) USD 98,811,450 JPY 10,061,970, Jun-15 14,683,669 MYR 234,370,990 USD 69,695, Jun-15 (3,692,158) SGD 69,742,200 USD 53,205, Jun-15 (673,552) PHP 2,160,520,000 USD 49,038, Jun-15 (1,103,167) KRW 115,970,868,000 USD 112,363, Jun-15 (7,049,614) MYR 326,124,500 USD 99,422, Jun-15 (7,601,002) PHP 6,865,851,820 USD 155,596, Jun-15 (3,270,265) KRW 25,437,000,000 USD 24,567, Jun-15 (1,469,754) PHP 5,174,878,060 USD 116,375, Jun-15 (1,575,570) USD 17,121,819 EUR 12,531, Jun-15 1,931,546 MYR 53,615,000 USD 16,328, Jun-15 (1,237,381) PHP 878,965,960 USD 19,982, Jun-15 (484,090) USD 47,639,683 JPY 4,827,210, Jun-15 7,275,367 MYR 460,720,620 USD 140,596,484 1-Jul-15 (10,928,691) PHP 865,534,000 USD 19,786,348 1-Jul-15 (585,777) USD 75,112,558 JPY 7,590,800,000 1-Jul-15 11,638,415 MYR 329,830,000 USD 100,699,151 2-Jul-15 (7,876,275) MYR 58,914,800 USD 18,011,250 3-Jul-15 (1,432,199) MYR 552,087,100 USD 168,921,794 7-Jul-15 (13,602,837) PHP 1,060,000,000 USD 24,223,035 7-Jul-15 (710,180) USD 7,470,041 EUR 5,482,599 9-Jul ,143 CLP 4,810,463,000 USD 8,443, Jul-15 (649,179) USD 89,496,564 EUR 65,679, Jul-15 9,868,159 USD 6,373,833 JPY 645,000, Jul ,471 Unaudited Semi-Annual Report 115

118 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 55,014,895 EUR 40,301, Jul-15 6,152,285 SGD 74,291,000 USD 59,792, Jul-15 (3,834,341) USD 5,211,130 EUR 3,819, Jul ,629 USD 265,420,877 EUR 194,690, Jul-15 29,362,922 USD 409,193,246 EUR 299,619, Jul-15 45,904,934 USD 258,297,381 EUR 190,501, Jul-15 27,299,661 USD 107,772,449 EUR 79,487, Jul-15 11,386,532 MYR 32,116,300 USD 9,874, Jul-15 (848,273) USD 85,483,266 EUR 63,146, Jul-15 8,911,194 USD 156,251,479 EUR 115,341, Jul-15 16,383,257 USD 204,976,742 JPY 20,721,946, Jul-15 31,627,736 USD 201,519,088 EUR 149,402, Jul-15 20,335,499 USD 43,298,041 JPY 4,375,700, Jul-15 6,691,218 CLP 9,822,905,000 USD 16,902, Jul-15 (1,010,557) USD 18,910,824 EUR 14,013, Jul-15 1,916,724 USD 329,930,762 EUR 244,993, Jul-15 32,812,576 USD 28,109,017 JPY 2,851,730, Jul-15 4,250,761 CLP 7,189,730,000 USD 12,355, Jul-15 (725,831) CLP 11,560,730,000 USD 19,870, Jul-15 (1,171,690) USD 18,839,918 EUR 14,013, Jul-15 1,844,987 MXN 808,084,380 USD 60,228,395 3-Aug-15 (6,176,852) USD 60,337,513 EUR 44,981,000 3-Aug-15 5,782,002 CLP 5,917,450,000 USD 10,036,381 4-Aug-15 (468,495) MXN 558,709,000 USD 41,254,449 4-Aug-15 (3,885,784) USD 544,390,043 EUR 405,849,675 4-Aug-15 52,144,478 CLP 2,332,900,000 USD 3,953,398 5-Aug-15 (181,656) USD 202,010,107 EUR 150,309,039 5-Aug-15 19,700,822 USD 165,395,199 JPY 16,924,063,700 5-Aug-15 23,786,411 CLP 2,423,700,000 USD 4,103,445 6-Aug-15 (185,222) MXN 1,532,684,580 USD 113,330,714 6-Aug-15 (10,832,624) MYR 166,855,200 USD 51,051,034 6-Aug-15 (4,205,340) PLN 590,955,350 EUR 138,656,816 6-Aug-15 (2,553,002) SGD 96,674,500 USD 77,643,964 6-Aug-15 (4,823,078) USD 154,110,552 EUR 114,624,652 6-Aug-15 15,080,462 MXN 1,144,036,900 USD 84,179,365 7-Aug-15 (7,677,229) SGD 42,633,000 USD 34,248,875 7-Aug-15 (2,135,153) USD 41,405,395 JPY 4,236,600,000 7-Aug-15 5,955,185 USD 1,227,302 EUR 917, Aug ,663 CLP 3,592,400,000 USD 6,054, Aug-15 (249,231) MXN 531,912,000 USD 39,161, Aug-15 (3,602,203) MYR 59,410,000 USD 18,139, Aug-15 (1,465,826) SGD 75,483,900 USD 60,480, Aug-15 (3,620,654) USD 39,781,535 EUR 29,688, Aug-15 3,768,684 USD 29,606,199 JPY 3,016,421, Aug-15 4,364,134 CLP 2,313,700,000 USD 3,909, Aug-15 (171,037) MYR 46,060,000 USD 14,027, Aug-15 (1,101,341) USD 7,650,612 JPY 776,430, Aug-15 1,153,159 USD 90,983,551 EUR 72,847, Aug-15 2,614,175 MXN 48,921,000 USD 3,644, Aug-15 (375,799) USD 99,008,166 EUR 73,749, Aug-15 9,540,196 CLP 2,175,940,000 USD 3,666, Aug-15 (152,353) KRW 5,354,000,000 USD 5,150, Aug-15 (293,132) USD 184,769,078 EUR 137,719, Aug-15 17,694,787 USD 16,006,667 JPY 1,632,496, Aug-15 2,343,848 PLN 114,567,000 EUR 26,881, Aug-15 (511,734) CLP 2,372,450,000 USD 3,999, Aug-15 (168,085) USD 231,292,761 EUR 172,395, Aug-15 22,143,494 USD 53,398,401 JPY 5,456,256, Aug-15 7,731,795 MXN 217,213,862 USD 16,218, Aug-15 (1,710,029) PLN 127,179,180 EUR 29,764, Aug-15 (482,880) USD 7,118,720 JPY 732,438, Aug ,071 USD 21,055,375 JPY 2,176,479, Aug-15 2,837,489 USD 141,282,342 EUR 106,179, Aug-15 12,453,589 USD 35,157,859 JPY 3,631,643, Aug-15 4,759,192 CLP 2,898,320,000 USD 4,836, Aug-15 (158,695) KRW 221,653,800,000 USD 214,572, Aug-15 (13,532,533) MXN 217,886,531 USD 16,208, Aug-15 (1,658,375) PLN 312,052,975 EUR 73,191, Aug-15 (1,390,722) USD 14,558,648 EUR 10,992, Aug-15 1,221,689 USD 56,539,132 JPY 5,854,218, Aug-15 7,535,510 CLP 2,986,400,000 USD 4,983, Aug-15 (164,743) MXN 306,158,900 USD 22,805, Aug-15 (2,361,306) PHP 1,063,000,000 USD 24,178, Aug-15 (613,269) USD 17,586,179 EUR 13,296, Aug-15 1,452, Unaudited Semi-Annual Report

119 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 46,753,431 JPY 4,836,058, Aug-15 6,269,527 MXN 145,905,300 USD 10,854,030 4-Sep-15 (1,115,790) CLP 5,119,795,000 USD 8,454,087 8-Sep-15 (199,541) PLN 65,930,000 EUR 15,458,382 8-Sep-15 (296,144) USD 119,539,603 EUR 90,613,850 8-Sep-15 9,573,426 CLP 2,455,320,000 USD 4,027,095 9-Sep-15 (68,753) USD 43,701,186 EUR 33,780, Sep-15 2,704,812 PLN 102,742,980 EUR 24,002, Sep-15 (362,573) MYR 160,426,035 USD 48,896, Sep-15 (3,987,622) USD 19,864,549 JPY 2,117,839, Sep-15 2,129,759 SGD 74,047,000 USD 58,674, Sep-15 (2,893,501) MYR 89,690,000 USD 27,066, Sep-15 (1,967,295) USD 64,449,037 EUR 49,904, Sep-15 3,871,770 PHP 1,065,040,000 USD 23,704, Sep-15 (101,883) MYR 129,935,500 USD 39,206, Sep-15 (2,857,026) USD 140,821,101 EUR 109,216, Sep-15 8,235,690 USD 19,525,247 JPY 2,121,203, Sep-15 1,758,409 KRW 25,520,000,000 USD 24,267, Sep-15 (1,135,899) MXN 241,077,070 USD 17,452, Sep-15 (1,390,957) PHP 2,590,038,060 USD 57,716, Sep-15 (328,345) USD 3,396,946 JPY 368,713, Sep ,584 USD 7,533,486 EUR 5,905,745 1-Oct ,559 USD 63,642,116 EUR 50,450,000 7-Oct-15 2,384,144 USD 138,438,034 JPY 14,996,300,000 7-Oct-15 12,804,229 USD 69,219,239 JPY 7,458,200,000 9-Oct-15 6,733,624 USD 69,680,112 JPY 7,500,600, Oct-15 6,832,422 KRW 173,889,235,500 USD 160,829, Oct-15 (3,245,636) USD 1,832,258,522 EUR 1,434,141, Oct-15 90,592,282 USD 2,392,479 EUR 1,885, Oct ,916 USD 442,607,429 EUR 347,007, Oct-15 21,171,337 USD 103,649,631 JPY 10,955,455, Oct-15 11,838,643 MYR 87,234,183 USD 26,065, Oct-15 (1,697,923) USD 85,706,028 EUR 66,953, Oct-15 4,384,703 USD 195,717,096 JPY 20,692,190, Oct-15 22,303,750 USD 148,838,361 JPY 15,837,890, Oct-15 16,099,823 MYR 31,824,000 USD 9,517, Oct-15 (629,732) USD 55,975,900 EUR 43,839, Oct-15 2,724,663 MYR 38,695,192 USD 11,612, Oct-15 (807,870) USD 84,406,140 EUR 66,495, Oct-15 3,629,006 USD 2,528,044 EUR 1,987, Oct ,809 MYR 25,873,000 USD 7,747, Oct-15 (525,079) PLN 75,302,000 EUR 17,562, Oct-15 (270,282) USD 4,988,329 EUR 3,906, Oct ,436 MXN 245,427,400 USD 17,839,535 3-Nov-15 (1,526,516) USD 2,878,727 EUR 2,272,978 3-Nov ,050 USD 119,608,337 JPY 13,558,450,000 5-Nov-15 5,930,628 USD 36,560,629 EUR 29,106,000 6-Nov-15 1,194,228 USD 40,007,979 JPY 4,512,500,000 6-Nov-15 2,172,930 USD 116,773,922 EUR 93,107, Nov-15 3,629,901 USD 13,593,597 JPY 1,549,704, Nov ,690 MXN 172,193,000 USD 12,411, Nov-15 (973,539) USD 248,924,198 EUR 199,411, Nov-15 6,587,176 USD 457,207,879 JPY 52,179,914, Nov-15 19,633,956 UYU 306,500,000 USD 11,734, Nov-15 (319,364) USD 136,363,509 EUR 109,249, Nov-15 3,594,276 USD 370,798,275 EUR 296,254, Nov-15 10,737,469 USD 166,028,332 JPY 19,039,646, Nov-15 6,346,950 USD 54,192,262 EUR 43,431, Nov-15 1,404,775 USD 15,709,829 JPY 1,822,026, Nov ,060 MYR 39,448,560 USD 11,542, Nov-15 (545,307) USD 30,333,470 EUR 24,226, Nov ,686 USD 19,474,988 JPY 2,255,301, Nov ,723 BRL 432,190,000 USD 151,422, Nov-15 (2,991,991) MYR 95,838,000 USD 27,966, Nov-15 (1,250,469) USD 73,218,852 EUR 58,308, Nov-15 2,346,022 USD 21,858,128 JPY 2,533,357, Nov ,097 UYU 305,900,000 USD 11,662, Nov-15 (297,654) USD 26,912,077 EUR 21,397, Nov ,384 USD 4,067,066 JPY 475,440, Nov-15 78,785 USD 46,497,051 EUR 37,297, Nov-15 1,157,552 MXN 384,885,400 USD 27,592, Nov-15 (2,057,933) USD 121,266,744 EUR 97,275, Nov-15 3,001,222 UYU 457,340,000 USD 17,781,493 1-Dec-15 (848,027) PLN 166,240,000 EUR 39,300,236 4-Dec-15 (1,306,328) Unaudited Semi-Annual Report 117

120 Notes to the Financial Statements at December 31, 2014 (continued) Note 5 Forward foreign exchange contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return (continued) Purchases Sales Maturity Unrealised Profit/(Loss) Date USD USD 53,501,376 EUR 42,880,000 4-Dec-15 1,363,931 USD 49,823,450 EUR 40,297,413 9-Dec ,374 USD 28,829,568 EUR 23,001, Dec ,222 USD 25,800,353 EUR 20,734, Dec ,104 MYR 101,500,000 USD 28,347, Dec-15 (100,762) PLN 158,437,000 EUR 37,305, Dec-15 (1,083,110) USD 125,087,171 EUR 100,569, Dec-15 2,774,414 MXN 3,164,218,800 USD 209,429, Dec ,294 USD 2,478,116 EUR 1,984, Dec-15 64,176 MXN 1,219,349,800 USD 80,711, Dec-15 81,956 USD 172,003,145 JPY 20,104,590, Dec-15 3,229,389 USD 118,252,313 JPY 13,970,710, Dec ,976 MXN 344,471,000 USD 22,829, Dec-15 (21,916) MXN 530,655,000 USD 35,172, Dec-15 (42,719) MXN 265,476,500 USD 17,586,117 4-Jan-16 (16,463) 1,804,696,552 1,581,388,972 The above contracts were opened with the following counterparties: Bank of America (16,370,573) Barclays Bank 483,894,062 Citibank 212,241,865 Credit Suisse (35,404,150) Deutsche Bank 310,373,381 Goldman Sachs 225,125,336 HSBC Bank 621,532 JPMorgan Chase Bank 378,697,007 Morgan Stanley 19,627,371 Royal Bank of Scotland (30,118,639) The Bank of New York Mellon (4,028,242) UBS (28,171,171) Standard Chartered Bank 64,901,193 Templeton Latin America Fund 1,581,388,972 Purchases Sales Maturity Unrealised Profit/(Loss) Date USD Forward foreign exchange contracts used for share class hedging PLN 26,245,597 USD 7,759, Jan-15 (351,401) USD 770,948 PLN 2,598, Jan-15 37,544 CLP 2,070,568,700 EUR 2,784, Jan-15 30,336 EUR 21,048,416 BRL 69,137, Jan-15 (363,117) EUR 5,491,644 CLP 4,102,935, Jan-15 (92,505) EUR 8,003,233 MXN 143,311, Jan-15 (15,952) EUR 21,503,236 USD 26,433, Jan-15 (407,093) The above contracts were opened with the following counterparties: (1,162,188) Bank of America (13,940) Barclays Bank (12,795) Citibank (11,092) Credit Suisse (9,144) Deutsche Bank (848,791) Goldman Sachs (19,431) HSBC Bank (153,667) JPMorgan Chase Bank (23,089) Morgan Stanley (4,207) Royal Bank of Scotland (63,702) The Bank of New York Mellon (473) UBS (1,857) The list of the abbreviations is available in Note 28. (1,162,188) 118 Unaudited Semi-Annual Report

121 Franklin Brazil Opportunities Fund Notes to the Financial Statements at December 31, 2014 (continued) Note 6 Open positions on financial future contracts As at December 31, 2014, the Company had entered into the following outstanding contracts: Counterparty Commitment Unrealised contracts USD profit/(loss) purchased/(sold) USD Bond Future (55) U.S. Treasury Note 10 years, Mar JPMorgan Chase Bank USD (6,973,828) (38,672) Currency Future Deposit Future 139 USD/BRL, Feb CM Capital s CCTVM BRL 6,977,413 (77,589) 1,254 BM&F One-Day Interbank Deposits Future, Apr. 15 CM Capital s CCTVM BRL 45,845, ,465 Equity Future 428 BM&F One-Day Interbank Deposits Future, Jan. 15 CM Capital s CCTVM BRL 16,091, ,599 (90) BM&F One-Day Interbank Deposits Future, Jan. 17 CM Capital s CCTVM BRL (2,658,217) (11,201) 149 BM&F One-Day Interbank Deposits Future, Jan. 18 CM Capital s CCTVM BRL 3,919,138 28,523 1,027,127 (84) BM&F One-Day Interbank Deposits Future, Jan. 21 CM Capital s CCTVM BRL (1,580,254) (6,259) 1,016,644 (55) Bovespa Index Future, Feb CM Capital s CCTVM BRL (1,044,410) 105,778 Franklin Global Allocation Fund Counterparty Commitment Unrealised contracts USD profit/(loss) purchased/(sold) USD Bond Future Equity Future 32 Australian 10 Yr. Bond Future, Mar JPMorgan Chase Bank AUD 3,348,173 26, Euro-BTP Futures, Mar JPMorgan Chase Bank EUR 7,055,268 87,257 (23) Euro-Bund Future, Mar JPMorgan Chase Bank EUR (4,337,862) (79,594) (56) Long Gilt Futures, Mar JPMorgan Chase Bank GBP (10,433,439) (274,955) 9 Ten-Year Government of Canada Bond Futures, Mar JPMorgan Chase Bank CAD 1,073,567 19,763 (232,674) (17) U.S. Treasury Note 10 years, Mar JPMorgan Chase Bank USD (2,155,547) (12,012) (1) Amsterdam Index Future, Jan JPMorgan Chase Bank EUR (102,850) (5,094) 5 DAX Futures, Mar JPMorgan Chase Bank EUR 1,488,829 40,388 (7) FTSE 100 Index Future, Mar JPMorgan Chase Bank GBP (711,663) (18,821) 8 Hang Seng Index Future, Jan JPMorgan Chase Bank HKD 1,219,972 12, IBEX 35 Index Futures, Jan JPMorgan Chase Bank EUR 1,983,296 45,287 (55) mini MSCI Emerging s Index Futures, Mar JPMorgan Chase Bank USD (2,633,675) (144,221) 37 S&P 500 E-Mini Index Futures, Mar JPMorgan Chase Bank USD 3,796, ,510 (1) S&P/TSX 60 Index Futures, Mar JPMorgan Chase Bank CAD (146,670) (8,334) (18) SPI 200 Index Futures, Mar JPMorgan Chase Bank AUD (1,977,849) (93,326) 11 Swiss Index Future, Mar JPMorgan Chase Bank CHF 985,486 23,235 (28,252) (260,926) 12 Topix Index Future, Mar JPMorgan Chase Bank JPY 1,409,556 (10,515) Unaudited Semi-Annual Report 119

122 Franklin K2 Alternative Strategies Fund Notes to the Financial Statements at December 31, 2014 (continued) Note 6 Open positions on financial future contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Counterparty Commitment Unrealised contracts USD profit/(loss) purchased/(sold) USD Bond Future Currency Future day sterling interest rate Future, Jun Morgan Stanley GBP 6,359,791 8,262 3 Australian 10 Yr. Bond Future, Mar Morgan Stanley AUD 313,853 4, Euro-Bobl Future, Mar Morgan Stanley EUR 1,891,743 11, Euro-Bund Future, Mar Morgan Stanley EUR 1,886,102 24, Euro-Schatz Future, Mar Morgan Stanley EUR 1,881,941 2,637 7 Long Gilt Futures, Mar Morgan Stanley GBP 1,304,094 21, mini-10 year JGB Future, Mar Morgan Stanley JPY 1,727,967 9, Ten-Year Government of Canada Bond Futures, Mar Morgan Stanley CAD 2,026,891 25, Three Month Euro (Euribor) Future, Jun Morgan Stanley EUR 6,649,953 4,315 2 U.S. Long Bond Treasury Future, Mar Morgan Stanley USD 289,126 5, U.S. Treasury Note 10 years, Mar Morgan Stanley USD 1,775,157 8,622 9 U.S. Treasury Note 2 years, Mar Morgan Stanley USD 1,967,345 (2,447) 123, U.S. Treasury Note 5 years, Mar Morgan Stanley USD 1,902, U.S. Dollar Future, Mar Morgan Stanley USD 815,823 12,332 Equity Future (11) Russell 2000 mini Future, Mar Deutsche Bank USD (1,320,770) (75,926) (1) CAC 40 Future, Jan Morgan Stanley EUR (51,754) (62) (1) CAC 40 Future, Mar Morgan Stanley EUR (51,760) (627) 1 DAX Futures, Mar.2015 Morgan Stanley EUR 297,778 3, DJIA mini e-cbot Future, Mar Morgan Stanley USD 976,360 8,089 Interest Rate Future 6 Euro Stoxx 50 Future, Mar Morgan Stanley EUR 227,466 1,398 (3) FTSE Index Futures, Mar Morgan Stanley GBP (304,980) (7,259) 1 Hang Seng Index Future, Jan Morgan Stanley HKD 152,483 2,407 9 Nasdaq 100 e-mini Future, Mar Morgan Stanley USD 761, Nikkei 225 Future, Mar Morgan Stanley JPY 507,848 (11,522) 3 Russell 2000 mini Future, Mar Morgan Stanley USD 360,210 6,424 8 S&P 500 E-mini Future, Mar Morgan Stanley USD 820,960 11,560 (62,620) 4 Topix Index Future, Mar Morgan Stanley JPY 470,028 (654) 72,773 5 Three Month Eurodollar Future, Jun Morgan Stanley USD 1,232,125 (797) Franklin U.S. Low Duration Fund Counterparty Commitment Unrealised contracts USD profit/(loss) purchased/(sold) USD Bond Future (10) CME Ultra Long Term U.S. Treasury Bond Futures, Mar JPMorgan Chase Bank USD (1,651,875) (59,601) (426) U.S. Treasury Note 10 years, Mar JPMorgan Chase Bank USD (54,015,469) (133,125) (87,560) (439) U.S. Treasury Note 5 years, Mar JPMorgan Chase Bank USD (52,210,133) 105, Unaudited Semi-Annual Report

123 Franklin U.S. Total Return Fund Notes to the Financial Statements at December 31, 2014 (continued) Note 6 Open positions on financial future contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Counterparty Commitment Unrealised contracts USD profit/(loss) purchased/(sold) USD Bond Future (17) U.S. Treasury Note 10 years, Mar JPMorgan Chase Bank USD (2,155,547) (5,313) (40) U.S. Treasury Note 2 years, Mar JPMorgan Chase Bank USD (8,743,750) 13,750 29,511 (88) U.S. Treasury Note 5 years, Mar JPMorgan Chase Bank USD (10,465,813) 21,074 Franklin Mutual Beacon Fund Counterparty Commitment Unrealised contracts USD profit/(loss) purchased/(sold) USD Currency Future (2) CHF/USD, Mar 2015 JPMorgan Chase Bank USD (251,850) 5,876 (84) EUR/USD, Mar 2015 JPMorgan Chase Bank USD (12,712,350) 306, ,804 (141) GBP/USD, Mar 2015 JPMorgan Chase Bank USD (13,721,063) 81,297 Note 7 Open positions on interest rate swap contracts As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Brazil Opportunities Fund Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 1,710,859 Receiving floating rate CDI Paying fixed rate 9.13% Barclays Bank PLC 02-Jan-17 BRL 46,133 Franklin GCC Bond Fund Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 250,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.655% Barclays Bank PLC 27-Sep-43 USD (49,279) 100,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Barclays Bank PLC 12-Nov-43 USD (21,244) 250,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.485% JPMorgan Chase Bank 24-Apr-44 USD (44,062) (114,585) Franklin Global Allocation Fund Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 470,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 3,768 90,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 07-Jul-24 USD (3,672) 220,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.018% JPMorgan Chase Bank 22-Aug-23 USD (14,235) 130,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.848% JPMorgan Chase Bank 22-Aug-43 USD (32,336) (46,475) Unaudited Semi-Annual Report 121

124 Notes to the Financial Statements at December 31, 2014 (continued) Note 7 Open positions on interest rate swap contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Global Fundamental Strategies Fund Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 31,780,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 254,763 5,610,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 07-Jul-24 USD (228,867) 1,010,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 25-Feb-41 USD (326,684) 600,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.523% Deutsche Bank 28-Mar-21 USD (55,922) 430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.775% Deutsche Bank 04-Oct-23 USD (19,734) 430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.795% Deutsche Bank 04-Oct-23 USD (20,434) 210,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.668% Deutsche Bank 04-Oct-43 USD (41,982) 210,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Deutsche Bank 04-Oct-43 USD (42,797) 1,280,000 Receiving floating rate EURIBOR 6M Paying fixed rate 2.701% HSBC Bank 14-Jun-16 EUR (57,604) 430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.765% HSBC Bank 07-Oct-23 USD (19,373) 210,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.675% HSBC Bank 07-Oct-43 USD (42,294) 330,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 04-Mar-21 USD (31,272) 830,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 4.215% JPMorgan Chase Bank 11-Jan-41 USD (246,388) 1,010,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 25-Feb-41 USD (327,209) 760,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 28-Feb-41 USD (243,253) 250,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 4.299% JPMorgan Chase Bank 01-Mar-41 USD (78,578) Templeton Asian Bond Fund (1,527,628) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 23,500,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.775% Deutsche Bank 04-Oct-23 USD (1,078,494) 23,500,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.795% Deutsche Bank 04-Oct-23 USD (1,116,762) 11,430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.668% Deutsche Bank 04-Oct-43 USD (2,285,020) 11,430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Deutsche Bank 04-Oct-43 USD (2,329,393) 23,500,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.765% HSBC Bank 07-Oct-23 USD (1,058,742) 11,430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.675% HSBC Bank 07-Oct-43 USD (2,301,983) 151,580,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.391% JPMorgan Chase Bank 04-May-21 USD (12,994,327) Templeton Constrained Bond Fund (23,164,721) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 250,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 2, ,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.695% Citigroup 09-May-24 USD (8,135) 50,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 07-Jul-24 USD (2,040) 102,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 09-May-44 USD (14,542) (22,713) 122 Unaudited Semi-Annual Report

125 Notes to the Financial Statements at December 31, 2014 (continued) Note 7 Open positions on interest rate swap contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Emerging s Balanced Fund Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 1,430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 11, ,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.018% JPMorgan Chase Bank 22-Aug-23 USD (22,000) 200,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.848% JPMorgan Chase Bank 22-Aug-43 USD (49,748) Templeton Emerging s Bond Fund (60,284) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 346,560,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 2,778,181 62,460,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.44% Citigroup 21-Apr-21 USD (5,528,049) 10,460,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.775% Deutsche Bank 04-Oct-23 USD (480,045) 10,460,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.795% Deutsche Bank 04-Oct-23 USD (497,078) 5,090,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.668% Deutsche Bank 04-Oct-43 USD (1,017,563) 5,090,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Deutsche Bank 04-Oct-43 USD (1,037,324) 76,860,000 Receiving floating rate EURIBOR 6M Paying fixed rate 2.701% HSBC Bank 14-Jun-16 EUR (3,458,934) 9,230,000 Receiving floating rate EURIBOR 6M Paying fixed rate 3.276% HSBC Bank 09-May-18 EUR (1,133,500) 10,460,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.765% HSBC Bank 07-Oct-23 USD (471,253) 5,090,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.675% HSBC Bank 07-Oct-43 USD (1,025,117) 53,310,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.391% JPMorgan Chase Bank 04-May-21 USD (4,570,046) Templeton Global Bond Fund (16,440,728) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 1,954,080,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 15,664, ,690,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 07-Jul-24 USD (15,000,356) 34,400,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 20-Dec-40 USD (11,224,847) 186,490,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 25-Feb-41 USD (60,320,077) 365,200,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.523% Deutsche Bank 28-Mar-21 USD (34,037,628) 264,590,000 Receiving floating rate EURIBOR 6M Paying fixed rate 2.701% HSBC Bank 14-Jun-16 EUR (11,907,354) 94,430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 04-Mar-21 USD (8,948,511) 263,000,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 23-Nov-40 USD (64,895,280) 31,200,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 4.153% JPMorgan Chase Bank 10-Dec-40 USD (8,867,167) 194,540,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 4.215% JPMorgan Chase Bank 11-Jan-41 USD (57,749,876) 186,490,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 25-Feb-41 USD (60,417,086) 139,860,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 28-Feb-41 USD (44,765,034) 46,620,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 4.299% JPMorgan Chase Bank 01-Mar-41 USD (14,653,206) (377,121,639) Unaudited Semi-Annual Report 123

126 Notes to the Financial Statements at December 31, 2014 (continued) Note 7 Open positions on interest rate swap contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Bond (Euro) Fund Notional Counterparty Maturity Unrealised amount date profit/(loss) EUR 42,260,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.018% JPMorgan Chase Bank 22-Aug-23 USD (2,259,890) 24,150,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.848% JPMorgan Chase Bank 22-Aug-43 USD (4,964,498) Templeton Global High Yield Fund (7,224,388) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 13,390,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 107,340 1,330,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.44% Citigroup 21-Apr-21 USD (117,712) Templeton Global Income Fund (10,372) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 29,560,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-24 USD 236,966 22,820,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 07-Jul-24 USD (930,969) 1,430,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.018% JPMorgan Chase Bank 22-Aug-23 USD (92,529) 820,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.848% JPMorgan Chase Bank 22-Aug-43 USD (203,966) Templeton Global Total Return Fund (990,498) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 1,766,150,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate.9255% Citigroup 17-Oct-17 USD 14,158, ,640,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.44% Citigroup 21-Apr-21 USD (19,970,363) 840,860,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 07-Jul-24 USD (34,303,895) 45,640,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Citigroup 25-Feb-41 USD (14,762,230) 88,240,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.523% Deutsche Bank 28-Mar-21 USD (8,224,207) 482,230,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.775% Deutsche Bank 04-Oct-23 USD (22,131,165) 482,230,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.795% Deutsche Bank 04-Oct-23 USD (22,916,433) 234,540,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.668% Deutsche Bank 04-Oct-43 USD (46,887,883) 234,540,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % Deutsche Bank 04-Oct-43 USD (47,798,400) 249,610,000 Receiving floating rate EURIBOR 6M Paying fixed rate 2.701% HSBC Bank 14-Jun-16 EUR (11,233,209) 84,580,000 Receiving floating rate EURIBOR 6M Paying fixed rate 3.276% HSBC Bank 09-May-18 EUR (10,386,940) 482,230,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 2.765% HSBC Bank 07-Oct-23 USD (21,725,844) 234,540,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.675% HSBC Bank 07-Oct-43 USD (47,235,963) 403,420,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 14-Jun-16 USD (7,096,718) 156,000,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 3.391% JPMorgan Chase Bank 04-May-21 USD (13,373,235) 83,070,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 14-Jun-21 USD (5,552,836) 124 Unaudited Semi-Annual Report

127 Notes to the Financial Statements at December 31, 2014 (continued) Note 7 Open positions on interest rate swap contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Templeton Global Total Return Fund (continued) Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 45,640,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 25-Feb-41 USD (14,785,971) 34,230,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate % JPMorgan Chase Bank 28-Feb-41 USD (10,956,007) 11,410,000 Receiving floating rate USD-LIBOR 3M Paying fixed rate 4.299% JPMorgan Chase Bank 01-Mar-41 USD (3,586,295) (348,769,342) Note 8 Open positions on inflation swap contracts As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Brazil Opportunities Fund Notional Counterparty Maturity Unrealised amount date profit/(loss) USD 40,900,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-Jan-15 BRL 157,799 33,700,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-Jan-15 BRL 125,736 20,800,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-Jan-15 BRL 71,566 20,670,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-Jan-15 BRL 68,518 17,600,000 Receiving floating rate IPCA Paying floating rate CDI BM&F BOVESPA SA 15-May-15 BRL 9,767 12,973,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-May-15 BRL 3,168 10,000,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-May-15 BRL 51,648 10,000,000 Receiving floating rate IPCA Paying floating rate CDI BM&F BOVESPA SA 15-May-15 BRL 24,326 7,784,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-May-15 BRL (1,444) 7,000,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 17-Aug-20 BRL 370,403 7,000,000 Receiving floating rate IPCA Paying floating rate CDI BM&F BOVESPA SA 17-Aug-20 BRL (454,831) 6,040,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-Aug-22 BRL 376,164 6,040,000 Receiving floating rate IPCA Paying floating rate CDI BM&F BOVESPA SA 15-Aug-22 BRL (382,896) 5,000,000 Receiving floating rate CDI Paying floating rate IPCA BM&F BOVESPA SA 15-Dec-27 BRL 654,649 5,000,000 Receiving floating rate IPCA Paying floating rate CDI BM&F BOVESPA SA 15-Dec-27 BRL (483,314) 591,259 Note 9 Open positions on cross swap contracts As at December 31, 2014, the Company had no open cross swap contracts. Note 10 Open positions on total return swap contracts As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD EUR 13,784 EUR-LIBOR 1M+0.4% Performance of Chemical Works of Gedeon Deutsche Bank 17-Sep-15 1,536 EUR 61,317 EUR-LIBOR 1M+0.4% Performance of Deutsche Wohnen AG Deutsche Bank 17-Sep-15 (1,509) EUR 260,933 EUR-LIBOR 1M+0.4% Performance of Drillisch AG Deutsche Bank 17-Sep-15 (9,892) Unaudited Semi-Annual Report 125

128 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD EUR 142,435 EUR-LIBOR 1M+0.4% Performance of International Deutsche Bank 8-Dec-15 (7,712) EUR 639,628 EUR-LIBOR 1M+0.4% Performance of Marine Harvest ASA Deutsche Bank 17-Sep-15 (18,232) EUR 213,134 EUR-LIBOR 1M+1.5% Performance of Grand City Properties SA Deutsche Bank 17-Sep-15 10,389 EUR 174,497 EUR-LIBOR 1M+1.5% Performance of KUKA AG Deutsche Bank 17-Sep-15 (5,980) HKD 84,930 HKD-LIBOR 1M+0.52% Performance of ASM Pacific Technology Deutsche Bank 19-Oct HKD 161,152 HKD-LIBOR 1M+0.67% Performance of Fosun International Ltd. Deutsche Bank 19-Oct JPY 169,638 JPY-LIBOR 1M+0.4% Performance of Alps Electric Co. Deutsche Bank 18-Nov-15 1,517 JPY 59,977 JPY-LIBOR 1M+0.4% Performance of Nagoya Railroad Co. Deutsche Bank 18-Nov JPY 79,676 JPY-LIBOR 1M+0.4% Performance of Resorttrust Inc. Deutsche Bank 18-Nov-15 1,209 USD 73,238 Performance of AAR Corp 2.25% 03/16 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 2,021 USD 53,219 Performance of Accuray Inc. - Aray 3 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep USD 57,820 Performance of Acorda 1.75% 06/21 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 3,439 USD 49,126 Performance of Activision Blizzard Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep CAD 14,559 Performance of Air Canada USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 3,763 USD 27,621 Performance of AK Steel Holding Corp. USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (6,234) USD 39,800 Performance of Allscripts 1.25% 07/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (1,307) USD 54,129 Performance of Alon USA Energy 3% 09/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (6,593) USD 29,873 Performance of Alpha 4.875% 12/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (23,100) JPY 220,062 Performance of Alps Electric Zero 03/19 JPY-LIBOR 1M+0.85% Deutsche Bank 17-Nov-15 (6,519) USD 58,117 Performance of Amazon.com Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep USD 50,770 Performance of American 3.25% 11/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (2,433) USD 50,560 Performance of Apollo 5.5% 03/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep GBP 11,074 Performance of ARM Holdings PLC GBP-LIBOR 1M+0.6% Deutsche Bank 15-Sep-15 1,662 USD 80,305 Performance of Ascent Capital 4% 07/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 1,435 HKD 267,947 Performance of ASM Pacific 2% 03/19 HKD-LIBOR 1M+1.0% Deutsche Bank 19-Oct-15 (2,067) USD 10,703 Performance of Benefitfocus Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 3,661 USD 165,684 Performance of BW Group Ltd. 1.75% 09/19 USD-LIBOR 1M+0.75% Deutsche Bank 18-Sep-15 2,052 USD 52,733 Performance of Campus Crest 4.75% 10/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (1,171) USD 59,880 Performance of Cardtronics Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 3,131 USD 398,547 Performance of CB Nvidia 1% 12/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 10,818 USD 54,998 Performance of CBIZ Inc. USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (1,193) USD 56,124 Performance of Chiquita Brands USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep USD 70,802 Performance of Cisco Systems Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 2,314 USD 54,184 Performance of Colony Financial 5% 04/23 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep USD 11,421 Performance of Cott Corp. USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (298) USD 81,724 Performance of Depomed Inc. 2.5% 09/21 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 2,135 EUR 144,442 Performance of Deutsche 0.5% 11/20 EUR-LIBOR 1M+0.75% Deutsche Bank 17-Sep-15 (31) EUR 343,754 Performance of Drillisch AG 0.75% 12/18 EUR-LIBOR 1M+0.75% Deutsche Bank 17-Sep-15 7,184 CAD 51,665 Performance of Element 5.125% 06/19 CADON_CDOR+0.50% Deutsche Bank 18-Sep-15 (3,940) USD 51,295 Performance of EVERTEC Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 1,344 USD 15,013 Performance of Fleetmatics Group PLC USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 (518) USD 64,722 Performance of Forest City 3.625% 08/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 2,097 USD 73,308 Performance of FXCM Inc. Sr 2.25% 06/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep USD 8,556 Performance of Genpact Ltd. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep USD 59,521 Performance of GPT Property 3.75% 03/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 5, Unaudited Semi-Annual Report

129 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD EUR 325,648 Performance of Grand City 1.5% 02/19 EUR-LIBOR 1M+0.75% Deutsche Bank 19-Oct-15 (15,166) USD 65,568 Performance of Griffon Corp. 4% 01/17 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 2,637 USD 329,250 Performance of Health Care REIT Inc 6.5% USD-LIBOR 1M+0.75% Deutsche Bank 15-Oct-15 (2,398) USD 7,997 Performance of Heartland Payment Systems Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep USD 47,068 Performance of Hewlett-Packard Co. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 3,325 USD 8,895 Performance of IMS Health Holdings Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep SGD 199,109 Performance of Indah Capital Zero 10/18 SGD-LIBOR 1M+1.0% Deutsche Bank 23-Nov-15 (974) USD 64,880 Performance of Insulet Corp 2% 06/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 5,770 USD 53,442 Performance of Integra 1.625% 12/16 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (964) USD 46,115 Performance of Intel Corp 2.95% USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 2,987 USD 35,749 Performance of Intel Corp. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep EUR 184,296 Performance of International 1.75% 05/18 EUR-LIBOR 1M+0.75% Deutsche Bank 20-Oct-15 5,312 USD 76,597 Performance of Istar 1.5% 11/16 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (1,011) USD 315,729 Performance of Jarden Corp % 09/18 USD-LIBOR 1M+0.75% Deutsche Bank 15-Oct-15 12,762 EUR 199,249 Performance of KUKA AG Medium 2% 02/18 EUR-LIBOR 1M+0.75% Deutsche Bank 17-Sep-15 4,520 USD 106,526 Performance of Lam Research 1.25% 05/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 6,923 HKD 296,693 Performance of Logo Star Ltd. 1.5% 11/18 HKD-LIBOR 1M+1.0% Deutsche Bank 19-Oct-15 (910) EUR 122,809 Performance of Magyar 3.375% 04/19 EUR-LIBOR 1M+0.75% Deutsche Bank 19-Oct-15 (5,891) EUR 827,519 Performance of Marine 2.375% 05/18 EUR-LIBOR 1M+0.75% Deutsche Bank 17-Sep-15 15,650 USD 361,144 Performance of Mercadolibre 2.25% 07/19 USD-LIBOR 1M+0.75% Deutsche Bank 15-Oct-15 (12,389) USD 49,480 Performance of Microsoft Corp. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 (244) USD 280,038 Performance of Molina 1.125% 01/20 USD-LIBOR 1M+0.75% Deutsche Bank 15-Oct-15 14,538 JPY 101,057 Performance of Nagoya Zero 10/23 JPY-LIBOR 1M+0.85% Deutsche Bank 17-Nov-15 (2,833) USD 76,995 Performance of New Mountain 5% 06/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (846) USD 13,070 Performance of Nimble Storage Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 (34) USD 214,283 Performance of Olam 6% USD-LIBOR 1M+1.0% Deutsche Bank 19-Oct USD 39,908 Performance of Peabody 4.75% 12/66 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (13,051) USD 41,900 Performance of Photronics 3.25% 04/16 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (1,023) USD 25,134 Performance of Post Holdings Inc. USD-FED EFF+0.50% Deutsche Bank 18-Sep-15 3,390 USD 100,252 Performance of Priceline Group 1% 03/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 2,392 USD 242,576 Performance of Prospect 4.75% 04/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (2,082) USD 60,909 Performance of Redwood 4.625% 04/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (990) USD 47,499 Performance of Renewable 2.75% 06/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (318) JPY 108,532 Performance of Resorttrust Zero 07/18 JPY-LIBOR 1M+0.85% Deutsche Bank 17-Nov-15 (1,599) USD 19,650 Performance of Resource 6% 12/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (433) USD 16,567 Performance of Salesforce.com Inc. USD-LIBOR 1M+0.3% Deutsche Bank 15-Sep-15 1,218 USD 54,329 Performance of San Disk 0.5% 10/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 4,374 USD 242,517 Performance of Scorpio 2.375% 07/19 USD-LIBOR 1M+0.75% Deutsche Bank 15-Oct-15 1,699 USD 92,156 Performance of Scorpio 2.375% 07/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 2,740 USD 299,338 Performance of Ship Finance 3.75% 02/16 USD-LIBOR 1M+0.75% Deutsche Bank 18-Sep-15 (175) USD 8,417 Performance of SK Hynix Semiconductor Inc. USD-LIBOR 1M Deutsche Bank 15-Sep USD 50,215 Performance of SK Hynix Semiconductor Inc. USD-LIBOR 1M+0.6% Deutsche Bank 15-Sep Unaudited Semi-Annual Report 127

130 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 48,947 Performance of Solarcity 2.75% 11/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (2,207) USD 36,328 Performance of Solazyme Inc. 5% 10/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (32,307) USD 66,498 Performance of Spectrum 2.75% 12/18 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (6,301) USD 293,791 Performance of Spirit 2.875% 05/19 USD-LIBOR 1M+0.75% Deutsche Bank 15-Oct-15 4,083 USD 63,749 Performance of Starwood 3% 07/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep USD 337,971 Performance of Starwood 4% 01/19 USD-LIBOR 1M+0.75% Deutsche Bank 15-Oct-15 3,681 USD 55,966 Performance of Stillwater 1.75% 10/32 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (573) USD 9,751 Performance of Sunedison 0.25% 01/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (485) USD 53,152 Performance of TTM 1.75% 12/20 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 (288) USD 21,990 Performance of Universal Corp. USD-FED EFF+0.50% Deutsche Bank 18-Sep-15 1,288 USD 36,801 Performance of Violin 4.25% 10/19 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 1,494 USD 54,548 Performance of Vishay 2.25% 05/41 USD-LIBOR 1M+0.5% Deutsche Bank 18-Sep-15 1,429 USD 106,875 Performance of Yamaguchi Zero 12/18 USD-LIBOR 1M+0.85% Deutsche Bank 18-Dec-15 1,966 SGD 71,311 SGD-LIBOR 1M+0.5% Performance of IHH Healthcare Berhad Deutsche Bank 24-Nov-15 (353) SGD 18,299 SGD-LIBOR 1M+6.0% Performance of Olam International Deutsche Bank 13-Oct USD 40,666 USD-FED EFF+0.35% Performance of Acorda Therapeutics Inc. Deutsche Bank 18-Sep-15 (4,422) USD 144 USD-FED EFF-0.35% Performance of Alpha Natural Resources Deutsche Bank 18-Sep USD 16,091 USD-FED EFF-0.35% Performance of Bunge Ltd. Deutsche Bank 18-Sep-15 (234) USD 9,870 USD-FED EFF-0.35% Performance of CBIZ Inc. Deutsche Bank 18-Sep USD 6,296 USD-FED EFF-0.35% Performance of Akamai Technologies Deutsche Bank 18-Sep-15 (635) USD 39,963 USD-FED EFF-0.35% Performance of Electronic Arts Deutsche Bank 18-Sep-15 (6,506) USD 9,254 USD-FED EFF-0.35% Performance of Intel Corp. Deutsche Bank 18-Sep-15 (949) USD 244,188 USD-FED EFF-0.35% Performance of Jarden Corp. Deutsche Bank 15-Oct-15 (11,985) USD 31,419 USD-FED EFF-0.35% Performance of Lam Research Corp. Deutsche Bank 18-Sep-15 (2,436) USD 204,711 USD-FED EFF-0.35% Performance of Nvidia Deutsche Bank 18-Sep-15 (4,684) USD 20,742 USD-FED EFF-0.35% Performance of Red Hat Deutsche Bank 18-Sep-15 (103) USD 14,504 USD-FED EFF-0.35% Performance of Vishay International Deutsche Bank 18-Sep USD 5,867 USD-FED EFF-0.35% Performance of Cobalt International Deutsche Bank 18-Sep-15 1,731 USD 42,240 USD-FED EFF-0.35% Performance of Cowen Group Inc. Deutsche Bank 18-Sep-15 (1,946) USD 689 USD-FED EFF-0.35% Performance of Delta Air Lines Inc. Deutsche Bank 18-Sep-15 (17) USD 34,556 USD-FED EFF-0.35% Performance of Depomed Inc. Deutsche Bank 18-Sep-15 (1,623) USD 15,180 USD-FED EFF-0.35% Performance of Gramercy Property Trust Deutsche Bank 18-Sep-15 (584) USD 18,620 USD-FED EFF-0.35% Performance of Griffon Corp. Deutsche Bank 18-Sep-15 (971) USD 282,249 USD-FED EFF-0.35% Performance of Health Care REIT Inc. Deutsche Bank 15-Oct-15 (1,977) USD 17,733 USD-FED EFF-0.35% Performance of Insulet Corp. Deutsche Bank 18-Sep-15 (2,030) USD 9,199 USD-FED EFF-0.35% Performance of Isis Pharmaceuticals Inc. Deutsche Bank 18-Sep USD 4,031 USD-FED EFF-0.35% Performance of Lexicon Pharmaceuticals Deutsche Bank 18-Sep-15 (205) USD 217,039 USD-FED EFF-0.35% Performance of Mercadolibre Inc. Deutsche Bank 15-Oct-15 11,237 USD 208,767 USD-FED EFF-0.35% Performance of Molina Healthcare Inc. Deutsche Bank 15-Oct-15 (11,037) USD 24,177 USD-FED EFF-0.35% Performance of Prospect Capital Corp. Deutsche Bank 15-Oct-15 (263) USD 24,999 USD-FED EFF-0.35% Performance of Ramco-Gershenson Deutsche Bank 18-Sep-15 (2,975) USD 100,804 USD-FED EFF-0.35% Performance of Scorpio Tankers Inc. Deutsche Bank 15-Oct-15 (3,480) 128 Unaudited Semi-Annual Report

131 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 76,516 USD-FED EFF-0.35% Performance of Ship Finance International Ltd. Deutsche Bank 15-Oct-15 (1,897) USD 122,467 USD-FED EFF-0.35% Performance of Spirit Realty Capital Deutsche Bank 15-Oct-15 (3,261) USD 224,266 USD-FED EFF-0.35% Performance of Starwood Property Trust Deutsche Bank 15-Oct USD 11,866 USD-FED EFF-0.35% Performance of Stillwater Mining Co. Deutsche Bank 18-Sep-15 (565) USD 4,381 USD-FED EFF-0.35% Performance of Tivo Inc. Deutsche Bank 18-Sep USD 5,753 USD-FED EFF-0.35% Performance of TTM Technologies Inc. Deutsche Bank 18-Sep-15 (394) USD 67,656 USD-FED EFF-0.35% Performance of United 2.25% 11/24 Deutsche Bank 18-Sep-15 (1,209) USD 255,028 USD-FED EFF-0.35% Performance of United States 1.5% 10/19 Deutsche Bank 18-Sep-15 (317) USD 17,555 USD-FED EFF-0.35% Performance of Violin Memory Inc. Deutsche Bank 18-Sep-15 (1,906) USD 6,504 USD-FED EFF-26.00% Performance of Invensense Inc. Deutsche Bank 18-Sep-15 (325) USD 40,757 USD-LIBOR 1M+0.4% Performance of BW LPG Deutsche Bank 17-Sep-15 (3,274) USD 51,970 USD-LIBOR 1M+0.4% Performance of Yamaguchi Financial Group Deutsche Bank 18-Nov-15 (2,408) USD 5,100 USD-LIBOR 1M+0.5% Performance of Rex Energy Corp. Deutsche Bank 18-Sep USD 33,044 USD-LIBOR 1M-0.25% Performance of S&P Smallcap 600 Growth Index Deutsche Bank 18-Sep-15 (1,434) USD 36,911 USD-LIBOR 1M-0.25% Performance of Russell Midcap Growth Index Total Return Deutsche Bank 18-Sep-15 (1,099) USD 4,257 USD-LIBOR 1M-0.3% Performance of S&P Smallcap 600 Growth Index Deutsche Bank 18-Sep-15 (240) USD 19,996 USD-LIBOR 1M-0.3% Performance of S&P Smallcap 600 Growth Index Deutsche Bank 18-Sep-15 (1,092) USD 16,529 USD-LIBOR 1M-0.6% Performance of MSCI Daily TR Net Emerging s Taiwan USD Deutsche Bank 18-Sep-15 (405) USD 84,332 USD-LIBOR 1M-1.5% Performance of MSCI Finland IMI Net Return Index Deutsche Bank 18-Sep-15 (1,507) USD 264,103 Performance of Actavis Inc. USD-LIBOR 1M+2.43% JPMorgan Chase Bank 28-Jan-16 (5,330) USD 329,515 Performance of Allergan Inc. USD-LIBOR 1M+2.91% JPMorgan Chase Bank 22-Oct-15 (2,015) USD 84,105 Performance of Baker Hughes Inc. USD-LIBOR 1M+0.74% JPMorgan Chase Bank 24-Dec-15 (752) GBP 28,874 Performance of Bba Aviation PLC GBP-LIBOR 1M+0.48% JPMorgan Chase Bank 18-Nov-15 1,727 USD 83,076 Performance of Carefusion Corp. USD-LIBOR 1M+0.73% JPMorgan Chase Bank 13-Nov USD 299,476 Performance of Covidien PLC USD-LIBOR 1M+2.59% JPMorgan Chase Bank 21-Oct-15 3,748 USD 348,881 Performance of DirectTV USD-LIBOR 1M+3.09% JPMorgan Chase Bank 5-Nov-15 (4,064) USD 195,591 Performance of Dominos Pizza Inc. USD-LIBOR 1M+1.76% JPMorgan Chase Bank 20-Nov USD 222,285 Performance of Fedex Corp. USD-LIBOR 1M+2.03% JPMorgan Chase Bank 22-Jan-16 (2,912) USD 2,613 Performance of Hubspot Inc. USD-LIBOR 1M JPMorgan Chase Bank 15-Sep USD 134,414 Performance of Liberty Media Corp. USD-LIBOR 1M+1.21% JPMorgan Chase Bank 3-Dec-15 (1,498) USD 235,156 Performance of Liberty Media Corp. USD-LIBOR 1M+2.11% JPMorgan Chase Bank 3-Dec-15 (4,047) USD 184,976 Performance of Medtronic USD-LIBOR 1M+1.66% JPMorgan Chase Bank 20-Nov USD 3,930 Performance of Microsoft Corp. USD-LIBOR 1M JPMorgan Chase Bank 15-Sep-15 (121) USD 42,089 Performance of Radware Ltd. USD-LIBOR 1M+0.4% JPMorgan Chase Bank 15-Sep-15 (611) USD 395,356 Performance of Time Warner Cable Inc. USD-LIBOR 1M+3.4% JPMorgan Chase Bank 22-Oct-15 7,228 USD 97,163 Performance of United Parcel Service USD-LIBOR 1M+0.87% JPMorgan Chase Bank 3-Dec USD 2,608 Performance of Verisk Analytics Inc., A USD-LIBOR 1M JPMorgan Chase Bank 15-Sep-15 (46) USD 182,163 Performance of Walt Disney Co. USD-LIBOR 1M+1.58% JPMorgan Chase Bank 20-Nov-15 6,363 USD 41,906 USD-LIBOR 1M+0.05% Performance of MSCI Korea Net USD Index JPMorgan Chase Bank 18-Sep USD 300,000 USD-LIBOR 1M % Performance of IBoxx High Yield index JPMorgan Chase Bank 20-Mar-15 (200) USD 15,168 USD-LIBOR 1M+0.13% Performance of Becton Dickinson JPMorgan Chase Bank 13-Nov USD 17,830 USD-LIBOR 1M+0.17% Performance of Pandora Media Inc. JPMorgan Chase Bank 3-Dec-15 1,830 USD 314,202 USD-LIBOR 1M+0.17% Performance of S&P United States Index JPMorgan Chase Bank 18-Sep-15 (11,225) USD 33,763 USD-LIBOR 1M+0.17% Performance of S&P United States Index JPMorgan Chase Bank 18-Sep-15 (1,161) Unaudited Semi-Annual Report 129

132 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 34,370 USD-LIBOR 1M+0.23% Performance of DB Hybrid Basket 01 JPMorgan Chase Bank 18-Sep-15 (1,077) USD 53,152 USD-LIBOR 1M+0.47% Performance of Charter Communications JPMorgan Chase Bank 3-Dec USD 66,074 USD-LIBOR 1M+0.61% Performance of Halliburton Co. JPMorgan Chase Bank 24-Dec-15 3,520 USD 103,356 USD-LIBOR 1M+0.95% Performance of AT&T Inc. JPMorgan Chase Bank 5-Nov-15 5,508 USD 146,724 USD-LIBOR 1M+1.35% Performance of Actavis Inc. JPMorgan Chase Bank 22-Dec-15 7,524 USD 202,088 USD-LIBOR 1M+1.81% Performance of Medtronic JPMorgan Chase Bank 21-Oct-15 4,674 USD 331,412 USD-LIBOR 1M+2.97% Performance of Sirius XM Radio Inc. JPMorgan Chase Bank 3-Dec-15 3,937 USD 3,139,823 USD-LIBOR 1M+27.31% Performance of S&P 500 Index JPMorgan Chase Bank 20-Nov-15 (105,637) USD 415,410 USD-LIBOR 1M+3.58% Performance of Comcast Corp. JPMorgan Chase Bank 22-Oct-15 (6,946) USD 68,323 USD-LIBOR 1M-0.25% Performance of NASDAQ Inter Total Return Index JPMorgan Chase Bank 18-Sep-15 (1,671) USD 343,992 USD-LIBOR 1M-0.25% Performance of S&P SmallCap 600 Total Return Index JPMorgan Chase Bank 18-Sep-15 (19,528) USD 62,988 USD-LIBOR 1M-0.3% Performance of Dow Jones UK Consumer Goods Total Return Index JPMorgan Chase Bank 18-Sep-15 (1,596) USD 117,711 USD-LIBOR 1M-0.3% Performance of S&P Retail Sector Industry Index (TR) JPMorgan Chase Bank 18-Sep-15 (4,889) USD 52,169 USD-LIBOR 1M-0.3% Performance of S&P Transportation Select Industry Index (TR) JPMorgan Chase Bank 18-Sep-15 (2,322) USD 33,570 USD-LIBOR 1M-0.45% Performance of MSCI Daily TR Net Emerging s Taiwan USD JPMorgan Chase Bank 18-Sep-15 (803) USD 20,845 USD-LIBOR 1M-0.75% Performance of MSCI Daily TR Net Sweden USD JPMorgan Chase Bank 18-Sep-15 (288) USD 301,764 USD-LIBOR 1M-0.8% Performance of Russell 2000 Total Return Growth Index JPMorgan Chase Bank 18-Sep-15 (17,240) USD 263,817 USD-LIBOR 1M-0.8% Performance of Russell 2000 Total Return Index JPMorgan Chase Bank 18-Sep-15 (15,212) USD 12,524 USD-LIBOR 1M-0.8% Performance of Russell Midcap Growth Index Total Return JPMorgan Chase Bank 18-Sep-15 (475) CAD 59,621 DISC-1D-0.37% Performance of Bombardier Inc. Morgan Stanley 21-Nov-16 3,322 EUR 24,522 EUR-EONIA-0.88% Performance of Numericable SAS Morgan Stanley 23-Sep-16 (2,514) USD 19,657 Federal Funds H15 index 1D-1% Performance of MSCI Daily TR Net Emerging s Taiwan USD Morgan Stanley 18-Sep-15 (492) GBP 6,157 GBP-SONIA-0.63% Performance of Ishares PLC Morgan Stanley 26-Sep MXN 30,154 MXNIB-1D-0.50% Performance of America Movil Sab De CV Morgan Stanley 14-Nov-16 1,797 NOK 37,467 NOK-NIBOR 1W-9.00% Performance of Norwegian Air Shutle ASA Morgan Stanley 13-Oct-16 (2,302) USD 31,558 Performance of Acceleron Pharma Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 1,426 USD 91,825 Performance of Accenture PLC, A USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 8,487 USD 4,726 Performance of Activision Blizzard Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 4,265 Performance of Adobe Systems Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep GBP 33,370 Performance of Advanced Computer GBP-SONIA+0.65% Morgan Stanley 26-Sep-16 (159) USD 53,230 Performance of Akamai Technologies Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 2,243 USD 4,716 Performance of Alibaba Group Holding Ltd., ADR USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (40) USD 55,386 Performance of Alliance Data Systems Corp. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep EUR 120,550 Performance of Alstom EUR-EONIA+0.65% Morgan Stanley 23-Sep-16 (9,236) USD 4,623 Performance of Amazon.com Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 150,884 Performance of Apple Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,629 USD 42,654 Performance of Applied Materials Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1, Unaudited Semi-Annual Report

133 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD GBP 10,601 Performance of ARM Holdings PLC GBP-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,447 USD 14,838 Performance of Atento SA USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (587) USD 98,473 Performance of Automatic Data Processing Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 6,884 Performance of Baidu.com, ADR USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (47) USD 5,119 Performance of Bankrate Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 17,974 Performance of Benefitfocus Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 7,077 USD 54,573 Performance of Bluebird Bio Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 4,035 EUR 1,825 Performance of Bollore SA EUR-EONIA+0.65% Morgan Stanley 23-Sep-16 (156) USD 11,573 Performance of Cardtronics Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 14,642 Performance of CDK Global LLC USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 109,303 Performance of Charter Communications USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 9,898 USD 42,053 Performance of Ciena Corp. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 69,325 Performance of Cognizant Technology Solutions Corp., A USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 3,162 USD 7,787 Performance of CoStar Group Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep GBP 12,634 Performance of Cranswick PLC GBP-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 39,295 Performance of Crown Holdings Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 3,498 USD 12,968 Performance of DISH Network Corp., A USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 56,395 Performance of ebay Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 31,343 Performance of Echostar Communication USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 (639) EUR 5,117 Performance of Edenred EURIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (221) USD 6,809 Performance of EPAM Systems Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (507) USD 102,897 Performance of Equifax Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,359 USD 47,387 Performance of Equinix Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 1,841 USD 4,825 Performance of EVERTEC Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (47) USD 118,473 Performance of Exlservice Holdings Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 8,487 USD 6,393 Performance of Expedia Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (164) GBP 42,254 Performance of Experian PLC GBP-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 5,395 USD 38,018 Performance of Fleetmatics Group PLC USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (2,112) USD 47,050 Performance of FMC Corp. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 18,901 Performance of Forrester Research Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (524) USD 14,283 Performance of Freescale Semiconductor Ltd. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 86,819 Performance of Genpact Ltd. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 4,904 USD 58,182 Performance of Global Payments Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,596 USD 63,593 Performance of Google Inc., C USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,216 USD 20,664 Performance of GoPro Inc., A USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 2,028 GBP 7,830 Performance of Greencore Group PLC GBP-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 13,097 Performance of Halliburton Co. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 (18) USD 1,248 Performance of HCA Holdings InC. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 4 USD 97,133 Performance of Heartland Payment Systems Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 3,762 USD 65,143 Performance of Hertz Global Holdings Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 3,175 USD 102,601 Performance of Huron Consulting Group Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 4,298 USD 40,021 Performance of IMAX Corp. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,683 USD 3,833 Performance of IMS Health Holdings Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep GBP 115,937 Performance of Inmarsat Ord. GBP-SONIA+0.65% Morgan Stanley 26-Sep USD 65,011 Performance of Intuit Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (406) EUR 81,125 Performance of Irish Continental Group PLC EURIBOR 1M+0.5% Morgan Stanley 15-Sep-15 9,274 USD 18,506 Performance of irobot Corp. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 17,191 Performance of Jack In The Box Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 1,834 EUR 191,315 Performance of Jazztel EUR-EONIA+0.65% Morgan Stanley 23-Sep-16 (4,545) GBP 11,537 Performance of Just Eat PLC GBP-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 61,517 Performance of Korean Air Lines Co. USD-FED EFF+1.30% Morgan Stanley 9-Dec-16 (725) USD 10,864 Performance of Level 3 Communication USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 36,053 Performance of Level 3 Communications Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,598 USD 76 Performance of Liberty Broadband Corp. USD-LIBOR 1D Morgan Stanley 16-Oct USD 2,054 Performance of Liberty Broadband Corp. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 66,500 Performance of Liberty Ventures USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 10,079 Unaudited Semi-Annual Report 131

134 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 8,380 Performance of Life Time Fitness Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 20,697 Performance of Madison Square Garden USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 72,187 Performance of ManpowerGroup USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 3,382 USD 21,211 Performance of Marathon Petroleum Corp. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 1,259 USD 3,835 Performance of o Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 19,477 Performance of Markit Ltd. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 43,307 Performance of Micron Technology Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 2,121 USD 43,552 Performance of Micron Technology Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,076 GBP 29,894 Performance of Mitie Group PLC GBP-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 2,455 USD 56,007 Performance of MSCI Inc., USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,566 USD 16,148 Performance of Netflix Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 14,956 Performance of Nimble Storage Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (165) USD 20,781 Performance of NXP Semiconductors NV USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,471 USD 6,902 Performance of Qihoo 360 Technologies Co. Ltd., ADR USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (319) USD 7,986 Performance of QIWI PLC, ADR USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (1,486) USD 64,711 Performance of QUALCOMM Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 2,765 USD 4,695 Performance of Red Hat Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 66,249 Performance of Robert Half International Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,365 EUR 61,933 Performance of Ryanair Holdings EURIBOR 1M+0.50% Morgan Stanley 15-Sep-16 8,689 GBP 50,771 Performance of Smith & Nephew GBP-SONIA+0.65% Morgan Stanley 26-Sep-16 3,169 USD 8,129 Performance of Solarcity Corp. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 19,431 Performance of Sothebys Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 2,087 GBP 31,881 Performance of Sthree PLC GBP-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (284) USD 54,286 Performance of TE Connectivity Ltd. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,773 EUR 12,723 Performance of Tele Italia EUR-EONIA+0.65% Morgan Stanley 23-Sep-16 (716) USD 46,312 Performance of Te Healthcare USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 (725) USD 17,982 Performance of Tesla Motors Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,363 USD 5,982 Performance of The Walt Disney Co. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 25,907 Performance of Tripadvisor Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 (141) USD 29,097 Performance of United Continental USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 1,408 USD 54,313 Performance of Vail Resorts Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 1,937 USD 14,504 Performance of Vantiv Inc., A USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 34,377 Performance of VeriFone Systems Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 4,121 USD 5,009 Performance of Verint Systems Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 6,512 Performance of VeriSign Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 (73) USD 8,524 Performance of Verisk Analytics Inc., A USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 67,840 Performance of Visa Inc., A USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 1,489 EUR 363,021 Performance of Vivendi EUR-EONIA+0.65% Morgan Stanley 23-Sep-16 (6,486) USD 55,608 Performance of Vulcan Materials Co. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 4,844 USD 52,443 Performance of WageWorks Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 8,327 USD 22,860 Performance of Walgreens Boots Alliance USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 143,243 Performance of WEX Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 4,459 USD 32,087 Performance of Williams Companies Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 16,718 Performance of Xoom Corp. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep-15 3,362 USD 38,337 Performance of Yahoo Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct-15 2,102 USD 5,145 Performance of Yelp Inc. USD-LIBOR 1M+0.5% Morgan Stanley 15-Sep USD 1,131 Performance of Zayo Group Holdings Inc. USD-LIBOR 1D+0.50% Morgan Stanley 16-Oct USD 43,671 USD-FED EFF-0.25% Performance of Consumer Discretionary Select Sector Morgan Stanley 15-Oct-15 (5,323) USD 70,387 USD-FED EFF-0.25% Performance of Health Care Select Sector Morgan Stanley 15-Oct-15 (5,097) USD 203,927 USD-FED EFF-0.25% Performance of Nasdaq 100 Total Return Index Morgan Stanley 15-Oct-15 (3,802) USD 211,089 USD-FED EFF-0.25% Performance of S&P 500 Total Return Index Morgan Stanley 15-Oct-15 (5,627) USD 44,569 USD-FED EFF-0.28% Performance of Energy Select Sector Morgan Stanley 15-Oct-15 (247) USD 61,841 USD-FED EFF-0.35% Performance of Abbvie Inc. Morgan Stanley 15-Oct-15 1,636 USD 26,759 USD-FED EFF-0.35% Performance of Allegiant Travel Morgan Stanley 15-Oct-15 (2,159) USD 31,345 USD-FED EFF-0.35% Performance of Amazon Morgan Stanley 15-Oct-15 (1,145) 132 Unaudited Semi-Annual Report

135 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 43,051 USD-FED EFF-0.35% Performance of Ametek Inc. Morgan Stanley 15-Oct-15 (1,482) USD 31,675 USD-FED EFF-0.35% Performance of AT&T Inc. Morgan Stanley 15-Oct USD 14,563 USD-FED EFF-0.35% Performance of Be Aerospace Inc. Morgan Stanley 15-Sep USD 31,808 USD-FED EFF-0.35% Performance of Best Buy Co., Inc. Morgan Stanley 15-Oct-15 (2,241) USD 25,493 USD-FED EFF-0.35% Performance of Biomarin Pharmaceutical Morgan Stanley 15-Oct-15 (172) USD 23,199 USD-FED EFF-0.35% Performance of Bristol-Myers Squibb Morgan Stanley 15-Oct USD 33,958 USD-FED EFF-0.35% Performance of Caterpillar Inc. Morgan Stanley 15-Sep-16 4,113 USD 42,695 USD-FED EFF-0.35% Performance of Comcast Corp. Morgan Stanley 15-Oct-15 (3,306) USD 28,705 USD-FED EFF-0.35% Performance of Consol Energy Inc. Morgan Stanley 15-Oct USD 41,517 USD-FED EFF-0.35% Performance of Core Laboratories Morgan Stanley 15-Sep-16 7,479 USD 21,647 USD-FED EFF-0.35% Performance of Dick s Sporting Goods Inc. Morgan Stanley 15-Sep-16 (1,054) USD 10,065 USD-FED EFF-0.35% Performance of Fluor Corp. Morgan Stanley 15-Oct USD 17,865 USD-FED EFF-0.35% Performance of Foot Locker Inc. Morgan Stanley 15-Oct-15 (486) USD 69,947 USD-FED EFF-0.35% Performance of General Electric Co. Morgan Stanley 15-Oct USD 27,110 USD-FED EFF-0.35% Performance of Hasbro Inc. Morgan Stanley 15-Oct-15 (185) USD 24,355 USD-FED EFF-0.35% Performance of Kohls Corp. Morgan Stanley 15-Oct-15 (1,539) USD 35,865 USD-FED EFF-0.35% Performance of Mattel Inc. Morgan Stanley 15-Oct-15 (1,574) USD 27,345 USD-FED EFF-0.35% Performance of MGM Mirage Inc. Morgan Stanley 15-Sep-16 8 USD 11,800 USD-FED EFF-0.35% Performance of Oneok Inc. Morgan Stanley 15-Oct-15 (723) USD 13,995 USD-FED EFF-0.35% Performance of Pepsico Inc. Morgan Stanley 15-Sep USD 44,804 USD-FED EFF-0.35% Performance of Precision Castparts Corp. Morgan Stanley 15-Sep-16 (1,325) USD 38,947 USD-FED EFF-0.35% Performance of Schlumberger Morgan Stanley 18-Dec-15 (943) USD 37,661 USD-FED EFF-0.35% Performance of Starbucks Corp. Morgan Stanley 15-Oct-15 (1,210) USD 38,817 USD-FED EFF-0.35% Performance of Sysco Corp. Morgan Stanley 15-Sep-16 (1,476) USD 28,638 USD-FED EFF-0.35% Performance of Tiffany & Co. Morgan Stanley 15-Sep-16 (476) USD 63,680 USD-FED EFF-0.35% Performance of Whole Foods Inc. Morgan Stanley 15-Sep-16 (3,447) USD 19,415 USD-FED EFF-0.35% Performance of Zions Bancorp Morgan Stanley 15-Oct-15 (1,310) USD 6,962 USD-FED EFF-0.35% Performance of Colfax Corp. Morgan Stanley 15-Oct-15 (310) USD 45,337 USD-FED EFF-0.35% Performance of Dunkin Brands Group Inc. Morgan Stanley 15-Oct-15 (470) USD 21,339 USD-FED EFF-0.35% Performance of Eaton Corp PLC Morgan Stanley 15-Sep USD 12,205 USD-FED EFF-0.35% Performance of Google Inc. Morgan Stanley 15-Oct-15 (552) USD 17,725 USD-FED EFF-0.35% Performance of Hibbett Sports Inc. Morgan Stanley 18-Dec USD 27,917 USD-FED EFF-0.35% Performance of IBM Morgan Stanley 15-Sep-16 (78) USD 95,301 USD-FED EFF-0.35% Performance of IBM Morgan Stanley 15-Oct-15 1,559 USD 6,347 USD-FED EFF-0.35% Performance of Kinder Morgan Inc. Morgan Stanley 15-Oct-15 (201) USD 5,156 USD-FED EFF-0.35% Performance of KLX Inc. Morgan Stanley 15-Sep USD 10,857 USD-FED EFF-0.35% Performance of Medivation Inc. Morgan Stanley 15-Oct USD 23,212 USD-FED EFF-0.35% Performance of Mondelez International Morgan Stanley 15-Sep-16 (313) USD 54,038 USD-FED EFF-0.35% Performance of Post Holdings Inc. Morgan Stanley 15-Oct-15 (3,166) USD 44,159 USD-FED EFF-0.35% Performance of Spirit Aerosystems Morgan Stanley 15-Sep-16 (1,039) USD 16,779 USD-FED EFF-0.35% Performance of Spirit Airlines Inc. Morgan Stanley 15-Sep-16 (1,051) USD 35,145 USD-FED EFF-0.35% Performance of Spirit Airlines Inc. Morgan Stanley 15-Oct-15 (1,678) USD 19,442 USD-FED EFF-0.35% Performance of Twitter Inc. Morgan Stanley 15-Oct-15 1,652 Unaudited Semi-Annual Report 133

136 Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 20,760 USD-FED EFF-0.35% Performance of Virgin America Inc. Morgan Stanley 15-Sep-16 (3,510) USD 53,356 USD-FED EFF-0.45% Performance of Ishares Trust MSCI Morgan Stanley 15-Sep USD 20,824 USD-FED EFF-0.70% Performance of Ishares US Real Estate Morgan Stanley 15-Sep-16 (355) USD 19,936 USD-FED EFF-0.88% Performance of Ishares Trust Morgan Stanley 15-Sep-16 (4) USD 11,978 USD-FED EFF-0.88% Performance of Isis Pharmaceuticals Inc. Morgan Stanley 15-Oct-15 (758) USD 20,040 USD-FED EFF-0.95% Performance of Aegerion Pharmaceuticals Morgan Stanley 15-Oct-15 (552) USD 20,703 USD-FED EFF-1.03% Performance of Ishares Russell 2000 ETF Morgan Stanley 15-Sep-16 (290) USD 58,931 USD-FED EFF-1.09% Performance of Ishares 20+ Year Morgan Stanley 15-Oct-15 (2,839) USD 78,730 USD-FED EFF-1.10% Performance of Ishares Msci Canada ETF Morgan Stanley 15-Sep-16 6,768 USD 4,543 USD-FED EFF-1.33% Performance of Garmin Ltd. Morgan Stanley 15-Oct USD 29,122 USD-FED EFF-1.61% Performance of Ishares Nasdaq Morgan Stanley 15-Oct-15 (4,245) USD 48,254 USD-FED EFF-1.63% Performance of Ishares US Utilities ETF Morgan Stanley 15-Sep-16 (1,484) USD 8,234 USD-FED EFF-18.90% Performance of Mannkind Corp. Morgan Stanley 15-Oct USD 6,767 USD-FED EFF-6.10% Performance of 500.Com Ltd. Morgan Stanley 15-Oct-15 1,703 USD 6,148 USD-FED EFF-9.62% Performance of Cleveland-Cliffs Morgan Stanley 15-Oct-15 (871) USD 10,753 USD-LIBOR 1M Performance of S&P Retail Sector Industry Index (TR) Morgan Stanley 18-Sep-15 (432) USD 5,092 USD-LIBOR 1M-0.25% Performance of Utilities Select Sector TR Index Morgan Stanley 18-Sep-15 (234) USD 15,102 USD-LIBOR 1M-0.25% Performance of S&P United States Index Morgan Stanley 18-Sep-15 (518) USD 3,419 USD-LIBOR 1M-0.25% Performance of Utilities Select Sector TR Index Morgan Stanley 18-Sep-15 (92) USD 13,077 USD-LIBOR 1M-0.25% Performance of NASDAQ Inter Total Return Index Morgan Stanley 18-Sep-15 (326) USD 118,731 USD-LIBOR 1M-0.25% Performance of S&P North American Technology Software Index Morgan Stanley 18-Sep-15 (4,622) USD 7,796 USD-LIBOR 1M-0.25% Performance of S&P Transportation Select Industry Index (TR) Morgan Stanley 18-Sep-15 (309) USD 46,352 USD-LIBOR 1M-0.25% Performance of Utilities Select Sector Index NTR Morgan Stanley 18-Sep-15 (2,139) USD 16,730 USD-LIBOR 1M-0.4% Performance of S&P Smallcap 600 Growth Index Morgan Stanley 18-Sep-15 (933) USD 16,940 USD-LIBOR 1M-0.4% Performance of S&P Smallcap 600 Growth Index Morgan Stanley 18-Sep-15 (933) USD 4,529 USD-LIBOR 1M-0.5% Performance of DB Hybrid Basket 01 Morgan Stanley 18-Sep-15 (153) USD 9,380 USD-LIBOR 1M-1% Performance of MSCI Daily TR Net Emerging s Taiwan USD Morgan Stanley 18-Sep-15 (229) USD 419,693 USD-LIBOR 1M-1.35% Performance of Consumer Staples Select Sector Index NTR Morgan Stanley 18-Sep-15 (1,830) Franklin Multi-Asset Income Fund (145,005) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) EUR USD 2,000,000 Performance of the 0.15% per annum of Dow-Jones-UBS Commodity Index the Notional Amount JPMorgan Chase Bank 8-May-15 (126,099) 134 Unaudited Semi-Annual Report

137 Franklin Strategic Income Fund Notes to the Financial Statements at December 31, 2014 (continued) Note 10 Open positions on total return swap contracts (continued) As at December 31, 2014 the Company had entered into the following outstanding contracts: Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 15,000,000 Performance of the Markit iboxx USD-LIBOR 3M Goldman Sachs International 20-Mar-15 (128,518) USD 26,000,000 Performance of the Markit iboxx USD-LIBOR 3M Goldman Sachs International 20-Jun-15 26,915 USD 10,000,000 Performance of the Markit iboxx USD-LIBOR 3M Goldman Sachs International 22-Jun ,981 USD 20,000,000 Performance of the Markit iboxx USD-LIBOR 3M Goldman Sachs International 21-Sep-15 (248,322) USD 20,000,000 Performance of the Markit iboxx USD-LIBOR 3M Morgan Stanley 20-Mar-15 4,684 USD 50,000,000 Performance of the Markit iboxx USD-LIBOR 3M Morgan Stanley 22-Jun-15 (2,904) USD 25,000,000 Performance of the Markit iboxx USD-LIBOR 3M Morgan Stanley 21-Sep-15 (71,044) Franklin U.S. Low Duration Fund (314,208) Notional Fund receives Fund pays Counterparty Maturity Unrealised amount date profit/(loss) USD USD 10,000,000 Performance of the Markit iboxx USD-LIBOR 3M Goldman Sachs International 20-Mar-15 (85,679) USD 9,000,000 Performance of the Markit iboxx USD-LIBOR 3M Goldman Sachs International 20-Jun-15 79,300 USD 5,000,000 Performance of the Markit iboxx USD-LIBOR 3M Goldman Sachs International 22-Jun-15 52,491 USD 5,000,000 Performance of the Markit iboxx USD-LIBOR 3M Morgan Stanley 20-Mar-15 (50,148) USD 15,000,000 Performance of the Markit iboxx USD-LIBOR 3M Morgan Stanley 22-Jun-15 (7,831) (11,867) Note 11 Open positions on credit default swap contracts As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Brazil Opportunities Fund Nominal Counterparty Buy/Sell Unrealised Protection profit/(loss) USD USD 200,000 Government of Brazil, Sep Barclays Bank Sell USD (1,760) 1,467 1,450,000 Government of Brazil, Dec Citigroup Sell USD (4,253) (5,716) (6,013) (4,249) Franklin K2 Alternative Strategies Fund Nominal Counterparty Buy/Sell Unrealised Protection profit/(loss) USD USD 30,000 Government of Brazil, 12.25%, 06/06/30, Dec Morgan Stanley Buy USD 1, ,000 CDX.NA.HY.23, Dec Deutsche Bank Sell USD 7,620 (1,412) 20,000 Transocean Inc., 7.375%, 04/15/18, Dec Deutsche Bank Sell USD (4,304) (1,524) 110,000 Transocean Inc., 7.375%, 04/15/18, Dec Morgan Stanley Sell USD (23,672) (3,815) (19,063) (6,238) Franklin Real Return Fund Nominal Counterparty Buy/Sell Unrealised Protection profit/(loss) USD USD 332,500 LCDX.NA.19, Dec Barclays Bank Sell USD 12,606 7, ,000 LCDX.NA.20, Jun Credit Suisse International Sell USD 7,628 2,051 20,234 9,968 Unaudited Semi-Annual Report 135

138 Franklin Strategic Income Fund Notes to the Financial Statements at December 31, 2014 (continued) Note 11 Open positions on credit default swap contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Nominal Counterparty Buy/Sell Unrealised Protection profit/(loss) USD USD 10,000,000 CDX.NA.HY.23, Dec Bank of America Sell USD 623,488 9,088 19,570,000 LCDX.NA.19, Dec Barclays Bank Sell USD 741, ,235 4,850,000 LCDX.NA.20, Jun Barclays Bank Sell USD 190,701 8,825 19,000,000 MCDX.NA.21, Dec Citigroup Sell USD 180, ,986 6,000,000 MCDX.NA.23, Dec Citigroup Sell USD 43,069 1,795 33,853,000 LCDX.NA.20, Jun Credit Suisse International Sell USD 1,331, ,209 67,320,000 LCDX.NA.21, Dec Credit Suisse International Sell USD 2,493,008 (610,642) 9,975,000 LCDX.NA.19, Dec Deutsche Bank Sell USD 378, ,688 19,800,000 LCDX.NA.21, Dec Goldman Sachs International Sell USD 733,238 (145,388) Franklin U.S. Low Duration Fund 6,715,052 1,106,796 Nominal Counterparty Buy/Sell Unrealised Protection profit/(loss) USD USD 7,000,000 Hospitality Properties Trust, Mar Bank of America Buy USD (697,291) 232,166 3,000,000 DISH DBS Corp., Mar Barclays Bank Buy USD (161,544) 110,700 3,460,000 First Data Corp., Mar Barclays Bank Buy USD (33,927) 135,648 3,500,000 PACTIV LLC, Jun Barclays Bank Buy USD (337,852) (106,845) 4,900,000 Te Healthcare Corp., Dec Barclays Bank Buy USD (376,278) 74,685 1,400,000 Lennar Corp., Sep Citigroup Buy USD (191,573) (29,848) 2,100,000 Lennar Corp., Dec Citigroup Buy USD (294,305) (16,488) 3,000,000 Bank of America Corp., Sep Credit Suisse International Buy USD (47,516) (54,262) 5,000,000 Beazer Homes USA Inc., Jun Credit Suisse International Buy USD (246,580) (18,554) 5,000,000 Centex Corp., Jun Credit Suisse International Buy USD (363,641) (10,131) 800,000 Constellation Brands Inc., Jun Deutsche Bank Buy USD (90,370) 15,222 1,040,000 First Data Corp., Mar Deutsche Bank Buy USD (10,198) 42,292 6,000,000 Government of Hungary, Mar Deutsche Bank Buy USD (59,820) 335,219 7,000,000 International Lease Finance Corp., Sep Deutsche Bank Buy USD (210,527) 240,564 3,000,000 Lennar Corp., Jun Deutsche Bank Buy USD (194,826) 148,992 5,000,000 Springleaf Finance Corp., Dec Deutsche Bank Buy USD (203,362) 156,210 2,500,000 Alcatel-Lucent USA Inc., Sep Goldman Sachs Buy USD (236,398) (17,984) 2,500,000 HCA Inc., Dec Goldman Sachs Buy USD (113,195) (2,682) 6,500,000 Kinder Morgan Inc., Mar Goldman Sachs Buy USD (373,652) 98,168 3,000,000 Springleaf Finance Corp., Dec Goldman Sachs Buy USD (122,017) 1,723 10,000,000 Constellation Brands Inc., Sep Goldman Sachs International Buy USD (812,257) 513,846 7,000,000 DISH DBS Corp., Mar Goldman Sachs International Buy USD (376,937) 11,339 5,000,000 Ford Motor Credit Co. LLC, Jun Goldman Sachs International Buy USD (112,360) 312,091 3,619,000 The New York Times Co., Dec Goldman Sachs International Buy USD (330,182) (153,952) 3,045,000 Toll Brothers Inc., Jun Goldman Sachs International Buy USD (68,929) 269,652 3,000,000 USG Corp., Dec Goldman Sachs International Buy USD (219,092) 20,609 3,200,000 Berkshire Hathaway Inc., Sep Bank of America Sell USD 22,175 (12,964) 3,300,000 Anadarko Petroleum Corp., Sep Barclays Bank Sell USD (14,488) (94,244) 3,700,000 First Data Corp., Mar Barclays Bank Sell USD 199, ,951 3,000,000 Ford Motor Credit Co. LLC Mar Barclays Bank Sell USD 517,830 (78,566) 4,100,000 Government of Portugal, Sep Barclays Bank Sell USD (164,853) 31,576 1,805,000 LCDX.NA.19, Dec Barclays Bank Sell USD 68,431 80,290 9,748,500 LCDX.NA.20, Jun Barclays Bank Sell USD 383,308 (6,632) 3,500,000 Te Healthcare Corp., Dec Barclays Bank Sell USD 334,031 97,339 1,400,000 Beazer Homes USA Inc., Sep Citigroup Sell USD 61,263 32,068 2,100,000 Beazer Homes USA Inc., Dec Citigroup Sell USD 74,981 12,292 8,250,000 MCDX.NA.21, Dec Citigroup Sell USD 78, ,444 3,500,000 MCDX.NA.23, Dec Citigroup Sell USD 25,123 1,047 2,400,000 Tate & Lyle International Finance PLC, Sep Citigroup Sell EUR 13,684 (33,128) 3,000,000 Bank of America Corp., Sep Credit Suisse International Sell USD 47,516 54,262 6,460,000 CMBX.NA.AM, Mar Credit Suisse International Sell USD (79,317) 12,939 4,465,000 LCDX.NA.19, Dec Credit Suisse International Sell USD 169,277 (31,648) 16,434,000 LCDX.NA.21, Dec Credit Suisse International Sell USD 608,587 (93,942) 4,000,000 PSEG POWER LLC, Jun Credit Suisse International Sell USD (7,901) (4,045) 800,000 First Data Corp., Mar Deutsche Bank Sell USD 43,173 47,533 2,800,000 Government of Portugal, Sep Deutsche Bank Sell USD (112,583) 42,416 10,877,500 LCDX.NA.19, Dec Deutsche Bank Sell USD 412, ,853 1,650,000 Iheartcommunications Inc., Dec Goldman Sachs Sell USD (140,317) 24,683 7,800,000 Berkshire Hathaway Inc., Sep Goldman Sachs International Sell USD 143, ,460 7,326,000 LCDX.NA.21, Dec Goldman Sachs International Sell USD 271,298 (30,900) (3,329,749) 3,369, Unaudited Semi-Annual Report

139 Franklin U.S. Total Return Fund Notes to the Financial Statements at December 31, 2014 (continued) Note 11 Open positions on credit default swap contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Nominal Counterparty Buy/Sell Unrealised Protection profit/(loss) USD USD 1,500,000 DISH DBS Corp., Mar Barclays Bank Buy USD (80,772) 16, ,000 First Data Corp., Mar Barclays Bank Buy USD (2,647) 9, ,000 Te Healthcare Corp., Dec Barclays Bank Buy USD (21,502) 4, ,000 Lennar Corp., Sep Citigroup Buy USD (13,684) (2,132) 200,000 Lennar Corp., Dec Citigroup Buy USD (28,029) (1,570) 500,000 Bank of America Corp., Sep Credit Suisse International Buy USD (7,920) (13,299) 500,000 Lennar Corp., Sep Credit Suisse International Buy USD (68,419) 2, ,000 Constellation Brands Inc., Jun Deutsche Bank Buy USD (90,370) 15, ,000 First Data Corp., Mar Deutsche Bank Buy USD (1,275) 5, ,000 Alcatel-Lucent USA Inc., Sep Goldman Sachs International Buy USD (47,280) (3,597) 1,000,000 CIT Group Inc., Jun Goldman Sachs International Buy USD (88,771) 37,490 1,000,000 Dell Inc., Sep Goldman Sachs International Buy USD (4,733) 1, ,000 DISH DBS Corp., Mar Goldman Sachs International Buy USD (26,924) 810 1,500,000 HCA Inc., Dec Goldman Sachs International Buy USD (67,917) (1,610) 2,000,000 Kinder Morgan Inc., Mar Goldman Sachs International Buy USD (114,967) 27, ,000 Anadarko Petroleum Corp., Sep Barclays Bank Sell USD (1,317) (8,568) 300,000 First Data Corp., Mar Barclays Bank Sell USD 16,190 12,208 2,755,000 LCDX.NA.19, Dec Barclays Bank Sell USD 104,448 65,602 2,667,500 LCDX.NA.20, Jun Barclays Bank Sell USD 104,885 (2,542) 200,000 Te Healthcare Corp., Dec Barclays Bank Sell USD 19,087 5, ,000 Beazer Homes USA Inc., Sep Citigroup Sell USD 4,376 2, ,000 Beazer Homes USA Inc., Dec Citigroup Sell USD 7,141 1, ,000 MCDX.NA.23, Dec Citigroup Sell USD 2, ,000 Tate & Lyle International Finance PLC, Sep Citigroup Sell EUR 1,140 (3,245) 300,000 Bank of America Corp., Sep Credit Suisse International Sell USD 4,752 5, ,000 Berkshire Hathaway Finance Corp., Mar Credit Suisse International Sell USD 6,152 8, ,000 CITIGROUP Inc., Sep Credit Suisse International Sell USD 4,281 1, ,000 CMBX.NA.AM, Mar Credit Suisse International Sell USD (5,894) ,000 LCDX.NA.20, Jun Credit Suisse International Sell USD 7,628 2, ,000 PSEG Power LLC, Jun Credit Suisse International Sell USD (593) (304) 200,000 Bank of America Corp., Sep Deutsche Bank Sell USD 3,168 7, ,000 Berkshire Hathaway Inc., Sep Deutsche Bank Sell USD 5,511 8, ,000 First Data Corp., Mar Deutsche Bank Sell USD 5,397 5, ,000 Freeport-McMoRan Copper & Gold Inc., Mar Deutsche Bank Sell USD (67,705) (34,500) 250,000 Government of Portugal, Sep Deutsche Bank Sell USD (10,052) 3, ,000 Government of Poland, Dec Goldman Sachs Sell USD 1,572 (252) 150,000 Iheartcommunications Inc., Dec Goldman Sachs International Sell USD (12,756) 2, ,000 MCDX.NA.23, Dec Goldman Sachs International Sell USD (14,627) ,000 Valero Energy Corp., Sep Goldman Sachs International Sell USD (2,219) (3,095) Note 12 Open positions on option contracts As at December 31, 2014, the Company had entered into the following outstanding contracts: (482,492) 180,554 Franklin K2 Alternative Strategies Fund Unrealised Purchase/Sale Counterparty contracts Commitment profit/(loss) position purchased/(sold) USD USD USD Currency option Purchase Purchase Purchase Purchase Purchase Sale USD/CNH, Call Option, Strike Price 6.2, Feb Deutsche Bank USD 100,000 99, USD/KRW, Call Option, Strike Price 1095, Jan Deutsche Bank USD 100, , (938) USD/KRW, Call Option, Strike Price 1175, Jan Deutsche Bank USD 100, ,428 (221) USD/ZAR, Call Option, Strike Price , Jan Deutsche Bank USD 50,000 49, (24) USD/COP, Call Option, Strike Price 2120, Jan Morgan Stanley USD 50,000 44,379 5,397 4,589 USD/KRW, Call Option, Strike Price 1150, Jan Deutsche Bank USD (200,000) 210,284 (6) 754 7,651 4,435 Unaudited Semi-Annual Report 137

140 Notes to the Financial Statements at December 31, 2014 (continued) Note 12 Open positions on option contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Unrealised Purchase/Sale Counterparty contracts Commitment profit/(loss) position purchased/(sold) USD USD USD Equity option Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase ishares Dow Jones US Healthcare Sector Index Fund, Put Option, Strike Price , Mar Deutsche Bank USD 243,802 35,139,139 8,649 1,901 ishares Nasdaq Biotechnology ETF, Put Option, Strike Price , Mar Deutsche Bank USD 552, ,668,583 26,723 (7,135) AT&T Inc., Put Option, Strike Price 35, Jun JPMorgan Chase Bank USD ,770 8,460 (167) Citigroup Inc., Call Option, Strike Price 50, Jan JPMorgan Chase Bank USD ,864 10,536 2,105 Citigroup Inc., Call Option, Strike Price 55, Jan JPMorgan Chase Bank USD 14 75,754 1,050 (186) Citigroup Inc., Put Option, Strike Price 52.5, Mar JPMorgan Chase Bank USD 5 27, Covidien PLC, Put Option, Strike Price 85, Jan JPMorgan Chase Bank USD , (6,441) Forest Oil Corporation, Put Option, Strike Price 1.5, Jan JPMorgan Chase Bank USD ,080 1,168 Forest Oil Corporation, Put Option, Strike Price 2.5, Jan JPMorgan Chase Bank USD , PetSmart, Inc., Put Option, Strike Price 67.5, Jan JPMorgan Chase Bank USD 3 24, (630) SPDR S&P Retail ETF, Put Option, Strike Price 75, Jan JPMorgan Chase Bank USD 2 19,202 6 (174) Time Warner Cable Inc., Call Option, Strike Price 145, Apr JPMorgan Chase Bank USD 9 136,854 13,770 5,344 Time Warner Cable Inc., Call Option, Strike Price 145, Jan JPMorgan Chase Bank USD 9 136,854 7,740 (3,987) Time Warner Cable Inc., Call Option, Strike Price 150, Jul JPMorgan Chase Bank USD 5 76,030 7,550 (565) Time Warner Cable Inc., Call Option, Strike Price 155, Jan JPMorgan Chase Bank USD 1 15,206 1, VMware, Inc., Put Option, Strike Price, 75, Apr JPMorgan Chase Bank USD 8 66,016 1,920 (1,890) Alstom SA, Call Option, Strike Price 27, Mar Morgan Stanley EUR 3 9, (188) Delta Air Lines, Inc., Call Option, Strike Price 50, Feb Morgan Stanley USD 7 34,433 1, Hewlett-Packard Co., Call Option, Strike Price 39, Feb Morgan Stanley USD 3 12, ishares Dow Jones US Healthcare Sector Index Fund, Put Option, Strike Price , Mar Morgan Stanley USD 652,430 94,034,707 20,516 (2,309) ishares Nasdaq Biotechnology ETF, Put Option, Strike Price , Mar Morgan Stanley USD 190,513 57,792,109 10,543 (1,541) Nokia Corp., Call Option, Strike Price 6.8, Mar Morgan Stanley EUR 15 11, Nokia Corp., Call Option, Strike Price 7, Mar Morgan Stanley EUR 26 20, (644) NVIDIA Corp., Put Option, Strike Price 19, Jan Morgan Stanley USD 30 60, (301) Prospect Capital Corporation, Put Option, Strike Price 7.5, Feb Morgan Stanley USD 30 24, (11) Scorpio Tankers Inc., Put Option, Strike Price 7.5, Jan Morgan Stanley USD 40 34, (562) Synergy Pharmaceuticals Inc., Put Option, Strike Price 2.5, Apr Morgan Stanley USD 4 1, Terex Corporation, Call Option, Strike Price 32, Jan Morgan Stanley USD 3 8, (276) Vivendi SA, Call Option, Strike Price 20, Feb Morgan Stanley EUR 32 80,112 3, Vivendi SA, Call Option, Strike Price 21, Feb Morgan Stanley EUR 8 20, (34) 138 Unaudited Semi-Annual Report

141 Notes to the Financial Statements at December 31, 2014 (continued) Note 12 Open positions on option contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin K2 Alternative Strategies Fund (continued) Unrealised Purchase/Sale Counterparty contracts Commitment profit/(loss) position purchased/(sold) USD USD USD Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale ishares Dow Jones US Healthcare Sector Index Fund, Call Option, Strike Price , Mar Deutsche Bank USD (243,802) 35,139,139 (7,645) (897) ishares Nasdaq Biotechnology ETF, Call Option, Strike Price , Mar Deutsche Bank USD (552,723) 167,668,583 (43,804) (9,946) AT&T Inc., Call Option, Strike Price 37, Jun JPMorgan Chase Bank USD (12) 40,308 (312) 464 Citigroup Inc., Call Option, Strike Price 60, Mar JPMorgan Chase Bank USD (5) 27,055 (210) 222 Covidien PLC, Put Option, Strike Price 72.5, Jan JPMorgan Chase Bank USD (37) 378,436 (370) 2,591 Dollar General Corp., Put Option, Strike Price 55, Feb JPMorgan Chase Bank USD (3) 21,210 (75) 335 Time Warner Cable Inc., Put Option, Strike Price 120, Apr JPMorgan Chase Bank USD (8) 121,648 (2,000) 2,538 Time Warner Cable Inc., Put Option, Strike Price 120, Jan JPMorgan Chase Bank USD (5) 76,030 (150) 385 Time Warner Cable Inc., Put Option, Strike Price 120, Jul JPMorgan Chase Bank USD (5) 76,030 (2,050) (15) Alstom SA, Call Option, Strike Price 30, Mar Morgan Stanley EUR (5) 16,250 (145) 174 ishares Dow Jones US Healthcare Sector Index Fund, Call Option, Strike Price , Mar Morgan Stanley USD (652,430) 94,034,707 (25,092) (2,267) ishares Nasdaq Biotechnology ETF, Call Option, Strike Price , Mar Morgan Stanley USD (190,513) 57,792,109 (12,693) (609) Nokia Corp., Put Option, Strike Price 6, Mar Morgan Stanley EUR (15) 11,790 (309) 197 Nokia Corp., Put Option, Strike Price 6.2, Mar Morgan Stanley EUR (26) 20,436 (755) (129) Terex Corporation, Put Option, Strike Price 25, Jan Morgan Stanley USD (3) 8,364 (30) ,403 (20,940) Index option Purchase Purchase Purchase Purchase Purchase S&P 500 Index, Put Option, Strike Price 1925, Feb JPMorgan Chase Bank USD 2 411,780 3,230 (2,336) S&P 500 Index, Put Option, Strike Price 1950, Feb JPMorgan Chase Bank USD 1 205,890 1,935 (438) Euro Stoxx 50 Index, Put Option, Strike Price 2900, Feb Morgan Stanley EUR ,292 8,800 (3,937) Euro Stoxx 50 Index, Put Option, Strike Price 3000, Feb Morgan Stanley EUR 2 76,144 1,484 (329) S&P 500 Index, Put Option, Strike Price 1900, Jan Morgan Stanley USD 10 2,058,900 3,900 (11,213) 19,349 (18,253) 65,403 (34,758) Unaudited Semi-Annual Report 139

142 Notes to the Financial Statements at December 31, 2014 (continued) Note 12 Open positions on option contracts (continued) As at December 31, 2014, the Company had entered into the following outstanding contracts: Franklin Multi-Asset Income Fund Unrealised Purchase/Sale Counterparty contracts Commitment profit/(loss) position purchased/(sold) EUR EUR EUR Index Option Purchase Purchase Euro Stoxx Index, Put Option, Strike Price 2950, Mar JPMorgan Chase Bank EUR 160 6,090, ,320 (40,349) S&P 500 Index, Put Option, Strike Price 1975, Feb JPMorgan Chase Bank USD 40 8,235,600 80,661 (43,967) 192,981 (84,316) Franklin U.S. Low Duration Fund Unrealised Purchase/Sale Counterparty contracts Commitment profit/(loss) position purchased/(sold) USD USD USD Swaption Purchase Purchase Sale Sale CDX.NA.HY.23, Put Option, Strike Price 103.5, Mar Credit Suisse International USD 12,100,000 12,100, ,741 (157,240) CDX.NA.IG.23, Put Option, Strike Price 65, Mar Credit Suisse International USD 24,000,000 24,000,000 98,904 (45,096) CDX.NA.HY.23, Put Option, Strike Price 99, Mar Credit Suisse International USD (12,100,000) 12,100,000 (52,393) 71,027 CDX.NA.IG.23, Put Option, Strike Price 85, Mar Credit Suisse International USD (24,000,000) 24,000,000 (36,624) 33, ,628 (97,613) Franklin U.S. Total Return Fund Unrealised Purchase/Sale Counterparty contracts Commitment profit/(loss) position purchased/(sold) USD USD USD Swaption Purchase Purchase Sale Sale CDX.NA.HY.23, Put Option, Strike Price 103.5, Mar Credit Suisse International USD 900, ,000 9,725 (11,696) CDX.NA.IG.23, Put Option, Strike Price 65, Mar Credit Suisse International USD 2,000,000 2,000,000 8,242 (3,758) CDX.NA.HY.23, Put Option, Strike Price 99, Mar Credit Suisse International USD (900,000) 900,000 (3,897) 5,283 CDX.NA.IG.23, Put Option, Strike Price 85, Mar Credit Suisse International USD (2,000,000) 2,000,000 (3,052) 2,808 11,018 (7,363) Note 13 Securities lending During the period, the Company participated in a securities lending programme with J.P. Morgan. As at December 31, 2014, there were no securities on loan. During the period, the securities lending programme generated the following revenues and expenses: Fund Gross Direct and indirect Net earnings in operational costs and fees earnings in Fund in Fund Fund Franklin Euroland Fund EUR Franklin Global Growth and Value Fund USD Franklin Mutual Beacon Fund USD 2, ,547 Franklin Mutual Euroland Fund EUR Franklin Mutual European Fund EUR 42,346 3,388 38,958 Templeton Euroland Fund EUR 6, ,406 Templeton European Fund EUR 4, ,858 Templeton Global Fund USD 22,168 1,773 20,395 Templeton Global (Euro) Fund EUR 10, ,955 Templeton Global Balanced Fund USD 8, ,483 Templeton Global Equity Income Fund USD 1, Templeton Growth (Euro) Fund EUR 54,013 4,321 49, Unaudited Semi-Annual Report

143 Notes to the Financial Statements at December 31, 2014 (continued) Note 14 Investment management fees The Investment Managers, as noted on pages 4 to 6, receive from the Company a monthly fee equivalent to a certain percentage per annum (as detailed below) of each Fund s average daily during the accounting period. When Funds invest in other Franklin Templeton funds, a management fee is not applied to the amounts invested. The following percentages apply in respect of the different Funds as at December 31, No management fee is payable by an investor on the acquisition of Class X shares, instead a fee is paid to the Investment Manager or affiliates under a separate agreement. Other Classes except Class I Class S Class W Class X Franklin Asia Credit Fund 0.550% 0.750% Franklin Biotechnology Discovery Fund 0.700% 0.750% 1.000% Franklin Brazil Opportunities Fund 0.700% 1.000% Franklin Euro Government Bond Fund 0.350% 0.500% Franklin Euro High Yield Fund 0.600% 0.700% 0.800% Franklin Euro Liquid Reserve Fund 0.200% 0.300% Franklin Euro Short Duration Bond Fund 0.300% 0.350% 0.450% Franklin Euro Short-Term Money Fund 0.200% 0.250% Franklin Euroland Fund 0.700% 1.000% Franklin European Fund 0.700% 1.000% Franklin European Corporate Bond Fund 0.400% 0.500% 0.650% Franklin European Dividend Fund 0.700% 1.000% Franklin European Growth Fund 0.700% 0.750% 1.000% Franklin European Income Fund 0.600% 0.750% 0.850% Franklin European Small-Mid Cap Growth Fund 0.700% 0.750% 1.000% Franklin European Total Return Fund 0.550% 0.550% 0.750% Franklin GCC Bond Fund 0.550% 0.750% Franklin Global Aggregate Bond Fund 0.400% 0.500% 0.650% Franklin Global Aggregate Investment Grade Bond Fund 0.400% 0.650% Franklin Global Allocation Fund 0.700% 1.000% Franklin Global Convertible Securities Fund 0.600% 0.650% 0.750% Franklin Global Corporate High Yield Fund 0.600% Franklin Global Equity Strategies Fund 0.750% 1.250% Franklin Global Fundamental Strategies Fund 0.700% 1.000% Franklin Global Government Bond Fund 0.400% 0.600% Franklin Global Growth Fund 0.700% 0.750% 1.000% Franklin Global Growth and Value Fund 0.700% 1.000% Franklin Global High Income Bond Fund 0.600% 0.700% 0.800% Franklin Global Listed Infrastructure Fund 0.700% 0.750% 1.000% Franklin Global Real Estate Fund 0.700% 0.750% 1.000% Franklin Global Small-Mid Cap Growth Fund 0.700% 0.750% 1.000% Franklin Gold and Precious Metals Fund 0.700% 1.000% Franklin High Yield Fund 0.600% 0.800% Franklin Income Fund 0.600% 0.850% Franklin India Fund 0.700% 0.625% 0.750% 1.000% Franklin Japan Fund 0.700% 0.750% 1.000% Franklin K2 Alternative Strategies Fund 1.750% 1.850% 2.050% Franklin MENA Fund 1.050% 1.150% 1.500% Franklin Multi-Asset Income Fund 0.600% 0.850% Franklin Natural Resources Fund 0.700% 1.000% Franklin Real Return Fund 0.750% Franklin Strategic Income Fund 0.550% 0.750% Franklin Technology Fund 0.700% 0.750% 1.000% Franklin U.S. Dollar Liquid Reserve Fund 0.200% 0.300% Franklin U.S. Equity Fund 0.700% 0.750% 1.000% Franklin U.S. Focus Fund 0.700% 1.000% Franklin U.S. Government Fund 0.400% 0.500% 0.650% Franklin U.S. Low Duration Fund 0.400% 0.650% Franklin U.S. Opportunities Fund 0.700% 0.750% 1.000% Franklin U.S. Small-Mid Cap Growth Fund 0.700% 1.000% Franklin U.S. Total Return Fund 0.550% 0.750% Franklin World Perspectives Fund 0.700% 0.750% 1.000% Franklin Mutual Beacon Fund 0.700% 1.000% Franklin Mutual Euroland Fund 1.000% Franklin Mutual European Fund 0.700% 0.750% 1.000% Franklin Mutual Global Discovery Fund 0.700% 0.750% 1.000% Templeton Africa Fund 1.100% 1.250% 1.600% Templeton ASEAN Fund 1.350% Templeton Asian Bond Fund 0.550% 0.475% 0.650% 0.750% Templeton Asian Dividend Fund 0.900% 1.000% 1.350% Templeton Asian Growth Fund 0.900% 1.000% 1.350% Templeton Asian Smaller Companies Fund 0.900% 1.000% 1.350% Templeton BRIC Fund 1.100% 1.250% 1.600% Templeton China Fund 1.100% 1.250% 1.600% Templeton Constrained Bond Fund 0.400% 0.600% Templeton Eastern Europe Fund 1.100% 1.250% 1.600% Templeton Emerging s Fund 1.100% 1.250% 1.600% Templeton Emerging s Balanced Fund 0.900% 1.000% 1.300% Templeton Emerging s Bond Fund 0.700% 0.800% 1.000% Templeton Emerging s Smaller Companies Fund 1.100% 1.250% 1.600% Templeton Euroland Fund 0.700% 1.000% Templeton European Fund 0.700% 0.750% 1.000% Templeton Frontier s Fund 1.100% 1.250% 1.600% Templeton Global Fund 0.700% 0.750% 1.000% Templeton Global (Euro) Fund 0.700% 0.750% 1.000% Templeton Global Balanced Fund 0.600% 0.700% 0.800% Templeton Global Bond Fund 0.550% 0.475% 0.650% 0.750% Templeton Global Bond (Euro) Fund 0.550% 0.650% 0.750% Templeton Global Equity Income Fund 0.700% 1.000% Templeton Global High Yield Fund 0.600% 0.850% Templeton Global Income Fund 0.600% 0.850% Templeton Global Smaller Companies Fund 0.700% 1.000% Templeton Global Total Return Fund 0.550% 0.475% 0.650% 0.750% Templeton Growth (Euro) Fund 0.700% 1.000% Templeton Korea Fund 1.100% 1.600% Templeton Latin America Fund 1.000% 1.100% 1.400% Templeton Thailand Fund 1.100% 1.250% 1.600% Unaudited Semi-Annual Report 141

144 Notes to the Financial Statements at December 31, 2014 (continued) Note 15 Soft commission Consistent with obtaining best execution, brokerage commissions on portfolio transactions for the Company may be directed by the Investment Managers to broker-dealers in recognition of research services furnished by them as well as for services rendered in the execution of orders by such broker-dealers. The receipt of investment research and information and related services permits the Investment Managers to supplement their own research and analysis and makes available to them the views and information of individuals and research staffs of other firms. Such related services do not include travel, accommodation, entertainment, general administrative goods or services, general office equipment or premises, membership fees, employee salaries or direct money payment. Note 16 Connected party transactions Certain Directors of the Company are or may also be Officers and/or Directors of one or more of the various Investment Managers of the Funds, among others, Franklin Templeton Investment Management Limited, Templeton Asset Management Limited and Templeton Global Advisors Limited and the Registrar and Transfer, Corporate, Domiciliary and Administrative Agent, Franklin Templeton International Services S.à r.l., and the Commission Payer, Lightning Finance Limited/SG Constellation One Inc. All transactions with connected parties were entered into in the ordinary course of business and under normal commercial terms. The investment management fees that are accrued by the Company in respect of the Management Company are detailed in note 14 to the financial statements. There are no connected brokers in Franklin Templeton Investments, and no transactions were entered into with connected brokers during the period ended December 31, During the period ended December 31, 2014, the Company accrued administration and transfer agency fees and shares maintenance and service charges in respect of Franklin Templeton International Services S.à r.l. as Management Company and Principal Distributor of the Funds. Note 17 Taxation Under current tax laws and practice, the Company is not liable in the Grand Duchy of Luxembourg to any taxes on income or on realised or unrealised capital gains. The Company is liable in the Grand Duchy of Luxembourg to a tax of 0.05% per annum, such tax being paid quarterly, and calculated on the asset of each Fund at the end of each relevant quarter (except the Templeton Euro Liquid Reserve Fund, the Templeton Euro Short-Term Money Fund and the Franklin U.S. Dollar Liquid Reserve Fund for which the rate is 0.01%). This tax is not applicable for the portion of the of a Fund invested in other undertakings for collective investment that have already been subject to such tax. Class I shares and Class X shares may benefit from a reduced rate of 0.01% per annum if all shareholders of these share classes are institutional investors. Investment income received or capital gains realised by the Company may be subject to tax in the countries of origin. All liabilities in respect of taxes payable on unrealised capital gains on investments are provided for as soon as there is a reasonable certainty that a liability will crystallise. No stamp duty or other tax is payable in the Grand Duchy of Luxembourg on the issue of shares in the Company. The Company is registered for Value Added Tax in the Grand Duchy of Luxembourg and subject to account for Value Added Tax in accordance with current laws. The Company has obtained U.K. Reporting Fund status for certain share classes of the Funds. Details of all share classes holding U.K. Reporting Fund status can be found on our U.K. website: Note 18 Share classes Class A (acc) shares: No distribution of dividends is made in respect of Class A (acc) shares but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as those which apply for Class A (dis) shares. Class A (dis) shares: are offered at the applicable asset, plus an initial charge of up to 5.75 the total amount invested varying per asset class. In addition, a maintenance charge of up to 0.50% per annum of the applicable average asset is deducted and paid to the Principal Distributor. This charge is accrued daily and is deducted and paid monthly to the Principal Distributor. A contingent deferred sales charge of up to 1%, retained by the Principal Distributor, applies to certain redemptions on qualified investments of USD 1 million or more within 18 months after repurchase. Class AX (acc) shares: are offered at the applicable asset, plus an initial charge of up to 5.75 the total amount invested varying per asset class. In addition, a maintenance charge of up to 0.50% per annum of the applicable average asset is deducted and paid to the Principal Distributor. This charge is accrued daily and is deducted and paid monthly to the Principal Distributor. No distribution of dividends is made in respect of Class AX (acc) shares but the income attributable is reflected in the increased of the shares. A contingent deferred sales charge of up to 1% applies to certain redemptions on qualified investments of USD 1 million or more within 18 months after repurchase. Class B (acc) shares: No distribution of dividends is made in respect of Class B (acc) shares but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as those which apply for Class B (dis) shares. Class B (dis) shares: are not subject to an initial charge but are subject to a contingent deferred sales charge up to 4% if an investor sells shares within 4 years of purchase. In addition, a maintenance charge of up to 0.75% per annum of the applicable average asset and a servicing charge of 1.06% per annum of the applicable average asset are applied. These charges are accrued daily and are deducted and paid monthly to the Principal Distributor and/or other parties. Starting from 2011, shares will be automatically converted into Class A shares of the same Fund 7 years after their purchase as more fully disclosed in the prospectus. Class C (acc) shares: No distribution of dividends is made but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as the those which apply for Class C (dis) shares. Class C (dis) shares: are not subject to an initial charge but are subject to a contingent deferred sales charge of 1.00% if an investor redeems shares within one year of purchase. In addition, a servicing charge (during the first year of investment) and a maintenance charge (from the second and subsequent years of investment) of 1.08% per annum of the applicable average asset is deducted. These charges are accrued daily and are deducted and paid monthly to the Principal Distributor and/or other party. 142 Unaudited Semi-Annual Report

145 Notes to the Financial Statements at December 31, 2014 (continued) Note 18 Share classes (continued) Class I (acc) shares: No distribution of dividends is made but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as those which apply for Class I (dis) shares. Class I (dis) shares: are offered to institutional investors as more fully described in the current prospectus and addendum of the Company. Purchases of Class I (dis) shares are not subject to an initial sales charge, nor a contingent deferred sales charge or any maintenance or servicing charges. Class I (dis) shares benefit from a reduced Investment Management fee (note 14). Class N (acc) shares: No distribution of dividends is made but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as these which apply for Class N (dis) shares. Class N (dis) shares: are subject to an initial charge of up to 3 the total amount invested. In addition, a maintenance charge of up to 1.25% per annum of the applicable average asset is accrued daily and is deducted and paid monthly to the Principal Distributor. Class N (dis) shares may be offered in certain limited circumstances as more fully described in the current prospectus and addendum of the Company. Class S (acc) shares: No distribution of dividends is made but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as these which apply for Class S (dis) shares. Class S (dis) shares: are not subject to an entry charge, contingent deferred sales charge nor any maintenance or servicing charge. Class S (dis) shares may be offered in certain limited circumstances as more fully described in the current prospectus and addendum of the Company. Class W (acc) shares: No distribution of dividends is made but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as these which apply for Class W (dis) shares. Class W (dis) shares: are not subject to an entry charge, contingent deferred sales charge nor any maintenance or servicing charge. Class W (dis) shares may be offered in certain limited circumstances as more fully described in the current prospectus and addendum of the Company. Class X (acc) shares: No distribution of dividends is made but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as these which apply for Class X (dis) shares. Class X (dis) shares: are not subject to an initial charge and no management fees will be payable by an investor on the acquisition of Class X shares (instead a fee is paid to the Investment Manager or affiliates under an agreement between the Investment Manager and the investor). Class X shares are offered to institutional investors in certain limited circumstances as more fully described in the current prospectus and addendum of the Company. Class Z (acc) shares: No distribution of dividends is made but the income attributable is reflected in the increased of the shares. All other terms and conditions are the same as these which apply for Class Z (dis) shares. Class Z (dis) shares: are not subject to an initial charge, contingent deferred sales charge nor any maintenance or servicing charge. Class Z (dis) shares may be offered in certain limited circumstances as more fully described in the current prospectus and addendum of the Company. The distributing share classes may have different frequencies. Mdis share classes distribute monthly, Qdis share classes distribute quarterly and Ydis share classes distribute annually. Hedged share classes: In respect of hedged share classes, the Company offers the following alternatives: H1: in order to reduce exchange rate fluctuations and return fluctuations, the base exposure of the hedged share class is hedged into a specified alternative. H2: a hedging strategy is applied in order to reduce the risk of movements between the of the hedged share class and other material currencies of the securities held by the Fund. H4: Where controls imposed by a country s moary authority prevent free movement of ( Restricted Currency ), another hedging methodology is used. The share class is denominated in the base of the Fund but hedges the Fund s base into a specified Restricted Currency for investors in that Restricted Currency. Note 19 Expenses reimbursement On a daily basis, for share classes where the expenses are capped, the level of expenses is calculated and compared to the cap and where the level of expenses is higher than the cap, this difference is booked as a decrease of expense (the waiver fees ). On a monthly basis the waiver fees are deducted from the fees received by Franklin Templeton International Services S.à r.l. The amount of waiver fees is disclosed as Expenses reimbursement in the Statement of Operations and Changes in Net Assets. Note 20 Statement of changes in the investment portfolio A list, specifying for each Fund total purchases and sales transacted during the period under review, may be obtained, upon request, at the registered office of the Company. Unaudited Semi-Annual Report 143

146 Notes to the Financial Statements at December 31, 2014 (continued) Note 21 Transaction costs Transaction costs are costs incurred to acquire and dispose of financial or liabilities. They include fees and commissions paid to agents, brokers and dealers. No transaction costs are charged by the Custodian. During the period ended December 31, 2014 the Company incurred the following transaction costs: Fund Currency Amount Franklin Asia Credit Fund USD * Franklin Asian Flex Cap Fund USD 10,508 Franklin Biotechnology Discovery Fund USD 1,522,201 Franklin Brazil Opportunities Fund USD 56,579 Franklin Euro Government Bond Fund EUR * Franklin Euro High Yield Fund EUR 22,539 Franklin Euro Liquid Reserve Fund EUR * Franklin Euro Short Duration Bond Fund EUR * Franklin Euro Short-Term Money Fund EUR * Franklin Euroland Fund EUR 22,040 Franklin European Fund EUR 3,074 Franklin European Corporate Bond Fund EUR * Franklin European Dividend Fund EUR 39,989 Franklin European Growth Fund EUR 2,593,438 Franklin European Income Fund EUR 2,401 Franklin European Small-Mid Cap Growth Fund EUR 384,045 Franklin European Total Return Fund EUR * Franklin GCC Bond Fund USD * Franklin Global Aggregate Bond Fund USD * Franklin Global Aggregate Investment Grade Bond Fund USD * Franklin Global Allocation Fund USD 19,563 Franklin Global Convertible Securities Fund USD 4,923 Franklin Global Corporate High Yield Fund USD * Franklin Global Equity Strategies Fund USD 65,405 Franklin Global Fundamental Strategies Fund USD 385,921 Franklin Global Government Bond Fund USD * Franklin Global Growth Fund USD 59,355 Franklin Global Growth and Value Fund USD 23,653 Franklin Global High Income Bond Fund USD * Franklin Global Listed Infrastructure Fund USD 8,201 Franklin Global Real Estate Fund USD 68,694 Franklin Global Small-Mid Cap Growth Fund USD 122,450 Franklin Gold and Precious Metals Fund USD 83,955 Franklin High Yield Fund USD 22,165 Franklin Income Fund USD 809,265 Franklin India Fund USD 2,986,360 Franklin Japan Fund JPY 39,115,471 Franklin K2 Alternative Strategies Fund USD 53,575 Franklin MENA Fund USD 1,416,387 Franklin Multi-Asset Income Fund EUR 14,198 Franklin Natural Resources Fund USD 79,085 Franklin Real Return Fund USD 140 Franklin Strategic Income Fund USD 17,111 Franklin Technology Fund USD 146,940 Fund Currency Amount Franklin U.S. Dollar Liquid Reserve Fund USD * Franklin U.S. Equity Fund USD 279,720 Franklin U.S. Focus Fund USD 15,140 Franklin U.S. Government Fund USD * Franklin U.S. Low Duration Fund USD 9,138 Franklin U.S. Opportunities Fund USD 1,138,192 Franklin U.S. Small-Mid Cap Growth Fund USD 107,370 Franklin U.S. Total Return Fund USD 1,513 Franklin World Perspectives Fund USD 396,063 Franklin Mutual Beacon Fund USD 97,382 Franklin Mutual Euroland Fund EUR 7,748 Franklin Mutual European Fund EUR 1,220,251 Franklin Mutual Global Discovery Fund USD 425,254 Templeton Africa Fund USD 259,501 Templeton ASEAN Fund USD 5,999 Templeton Asian Bond Fund USD * Templeton Asian Dividend Fund USD 6,621 Templeton Asian Growth Fund USD 416,994 Templeton Asian Smaller Companies Fund USD 609,628 Templeton BRIC Fund USD 636,733 Templeton China Fund USD 177,187 Templeton Constrained Bond Fund USD * Templeton Eastern Europe Fund EUR 267,999 Templeton Emerging s Fund USD 839,814 Templeton Emerging s Balanced Fund USD 36,308 Templeton Emerging s Bond Fund USD * Templeton Emerging s Smaller Companies Fund USD 159,584 Templeton Euroland Fund EUR 58,226 Templeton European Fund EUR 191,973 Templeton Frontier s Fund USD 1,951,520 Templeton Global Fund USD 605,793 Templeton Global (Euro) Fund EUR 145,106 Templeton Global Balanced Fund USD 228,447 Templeton Global Bond Fund USD * Templeton Global Bond (Euro) Fund EUR * Templeton Global Equity Income Fund USD 115,716 Templeton Global High Yield Fund USD * Templeton Global Income Fund USD 381,084 Templeton Global Smaller Companies Fund USD 226,811 Templeton Global Total Return Fund USD * Templeton Growth (Euro) Fund EUR 1,812,320 Templeton Korea Fund USD 121,220 Templeton Latin America Fund USD 748,715 Templeton Thailand Fund USD 175,960 *For debt securities and derivatives, transaction costs are not separately identifiable from the purchase price of the security and therefore cannot be disclosed separately. Note 22 Equalisation The Funds use an accounting practice known as equalisation, by which a portion of the proceeds from issue and costs of redemption of shares, equivalent on a per share basis to the amount of undistributed investment income on the date of the transaction, is credited or charged to undistributed income which is disclosed as equalisation in the Statement of Operations and Changes in Net Assets. As a result, undistributed investment income per share is unaffected by issue or redemptions of shares. 144 Unaudited Semi-Annual Report

147 Notes to the Financial Statements at December 31, 2014 (continued) Note 23 Dividends distributed For the period ended December 31, 2014, the following amounts per share were paid out to distributing share class shareholders. Accumulated dividends have not been paid out and are reflected as an increase in the Issue of shares account in the Statement of Operations and Changes in Net Assets. Annual Distribution Jul-2014 Franklin Asia Credit Fund A (Mdis) USD* A (Mdis) AUD-H1* A (Mdis) SGD-H1* Franklin Asian Flex Cap Fund A (Ydis) USD** Jul Aug Sep Oct Franklin Brazil Opportunities Fund A (Qdis) USD A (Qdis) HKD N (Qdis) USD Franklin Euro Government Bond Fund A (Ydis) EUR I (Qdis) EUR Franklin Euro High Yield Fund A (Mdis) EUR A (Mdis) USD A (Ydis) EUR B (Mdis) EUR B (Mdis) USD I (Ydis) EUR Franklin Euro Liquid Reserve Fund A (Ydis) EUR Franklin Euro Short Duration Bond Fund A (Ydis) EUR Franklin European Fund A (Ydis) EUR Franklin European Corporate Bond Fund A (Ydis) EUR I (Ydis) EUR N (Ydis) EUR Franklin European Dividend Fund A (Mdis) SGD-H1* A (Mdis) USD* A (Ydis) EUR Franklin European Growth Fund A (Ydis) GBP Franklin European Income Fund A (Mdis) EUR* A (Mdis) SGD-H1* A (Mdis) USD* I (Mdis) EUR* N (Mdis) EUR* W (Mdis) EUR* Z (Mdis) EUR* Franklin European Total Return Fund A (Mdis) EUR A (Mdis) USD N (Mdis) EUR Franklin GCC Bond Fund A (Mdis) USD B (Mdis) USD Franklin Global Aggregate Bond Fund A (Mdis) USD A (Mdis) EUR A (Qdis) GBP-H A (Ydis) EUR-H I (Qdis) EUR-H I (Qdis) GBP-H Nov Dec Unaudited Semi-Annual Report 145

148 Note 23 Dividends distributed (continued) Notes to the Financial Statements at December 31, 2014 (continued) Annual Distribution Jul-2014 Jul Aug Sep Oct Franklin Global Allocation Fund A (Qdis) GBP A (Ydis) EUR A (Ydis) EUR-H1 I (Ydis) EUR-H Franklin Global Convertible Securities Fund A (Ydis) EUR A (Ydis) EUR-H Franklin Global Corporate High Yield Fund I (Ydis) EUR I (Ydis) EUR-H Franklin Global Equity Strategies Fund A (Ydis) EUR Franklin Global Fundamental Strategies Fund A (Ydis) EUR N (Ydis) EUR Nov Dec Franklin Global Government Bond Fund A (Mdis) USD A (Mdis) EUR N (Mdis) USD Franklin Global High Income Bond Fund A (Mdis) USD A (Mdis) HKD A (Mdis) SGD A (Mdis) SGD-H N (Mdis) USD* Franklin Global Listed Infrastructure Fund A (Mdis) SGD-H A (Qdis) USD A (Ydis) EUR W (Qdis) GBP Franklin Global Real Estate Fund A (Qdis) USD A (Qdis) SGD A (Ydis) EUR-H B (Qdis) USD C (Qdis) USD W (Qdis) USD Franklin Gold and Precious Metals Fund A (Ydis) EUR A (Ydis) EUR-H1 I (Ydis) USD Franklin High Yield Fund A (Mdis) USD A (Mdis) AUD-H A (Mdis) SGD-H B (Mdis) USD I (Mdis) USD N (Mdis) USD Z (Mdis) USD Franklin Income Fund A (Mdis) USD A (Mdis) EUR-H A (Mdis) SGD-H B (Mdis) USD C (Mdis) USD I (Ydis) EUR-H N (Mdis) EUR-H Z (Mdis) USD Franklin India Fund A (Ydis) EUR A (Ydis) GBP I (Ydis) EUR Unaudited Semi-Annual Report

149 Notes to the Financial Statements at December 31, 2014 (continued) Note 23 Dividends distributed (continued) Annual Distribution Jul-2014 Franklin Japan Fund A (Ydis) EUR A (Ydis) GBP Jul Aug Sep Oct Nov Dec Franklin K2 Alternative Strategies Fund A (Ydis) USD A (Ydis) EUR Franklin MENA Fund A (Ydis) USD A (Ydis) GBP I (Ydis) USD Franklin Multi-Asset Income Fund A (Qdis) EUR A (Ydis) EUR I (Qdis) EUR Franklin Natural Resources Fund A (Ydis) USD A (Ydis) EUR-H1 Franklin Real Return Fund A (Ydis) EUR-H Franklin Strategic Income Fund A (Mdis) USD A (Mdis) AUD-H A (Mdis) EUR A (Mdis) EUR-H B (Mdis) USD C (Mdis) USD I (Ydis) USD N (Mdis) EUR-H Franklin U.S. Dollar Liquid Reserve Fund A (Mdis) USD B (Mdis) USD Franklin U.S. Government Fund A (Mdis) USD A (Mdis) HKD A (Mdis) SGD-H1** B (Mdis) USD I (Mdis) USD I (Mdis) JPY-H N (Mdis) USD W (Mdis) USD Z (Mdis) USD Franklin U.S. Low Duration Fund A (Mdis) USD B (Mdis) USD C (Mdis) USD N (Mdis) USD Franklin U.S. Opportunities Fund A (Ydis) EUR A (Ydis) GBP X (Ydis) USD Franklin U.S. Total Return Fund A (Mdis) USD C (Mdis) USD I (Mdis) USD N (Mdis) USD Franklin World Perspectives Fund A (Ydis) GBP Franklin Mutual Beacon Fund A (Ydis) USD Unaudited Semi-Annual Report 147

150 Notes to the Financial Statements at December 31, 2014 (continued) Note 23 Dividends distributed (continued) Annual Distribution Jul-2014 Franklin Mutual European Fund A (Ydis) EUR A (Ydis) GBP B (Ydis) EUR I (Ydis) EUR W (Ydis) EUR Jul Aug Sep Oct Nov Dec Franklin Mutual Global Discovery Fund A (Ydis) EUR A (Ydis) GBP Templeton Africa Fund A (Ydis) EUR A (Ydis) EUR-H Templeton ASEAN Fund A (Ydis) USD* Templeton Asian Bond Fund A (Mdis) USD A (Mdis) AUD-H A (Mdis) EUR A (Mdis) SGD A (Mdis) SGD-H B (Mdis) USD C (Mdis) USD I (Mdis) EUR N (Mdis) USD W (Mdis) USD X (Ydis) USD Templeton Asian Dividend Fund A (Mdis) USD A (Mdis) SGD-H A (Qdis) EUR A (Ydis) EUR W (Qdis) GBP Templeton Asian Growth Fund A (Ydis) USD A (Ydis) EUR A (Ydis) GBP I (Ydis) EUR-H W (Ydis) EUR X (Ydis) USD Z (Ydis) USD Z (Ydis) EUR-H Templeton Asian Smaller Companies Fund A (Ydis) USD X (Ydis) USD Templeton Bric Fund A (Ydis) EUR A (Ydis) GBP Templeton China Fund A (Ydis) EUR A (Ydis) GBP I (Ydis) GBP W (Ydis) EUR Z (Ydis) EUR** Templeton Constrained Bond Fund A (Mdis) USD A (Mdis) EUR N (Mdis) USD Templeton Eastern Europe Fund A (Ydis) EUR A (Ydis) GBP B (Ydis) EUR 148 Unaudited Semi-Annual Report

151 Notes to the Financial Statements at December 31, 2014 (continued) Note 23 Dividends distributed (continued) Annual Distribution Jul-2014 Templeton Emerging s Fund A (Ydis) USD Jul Aug Sep Oct Nov Dec Templeton Emerging s Balanced Fund A (Qdis) USD A (Qdis) GBP A (Qdis) GBP-H1** A (Qdis) SGD-H A (Ydis) EUR A (Ydis) EUR-H B (Mdis) USD I (Ydis) EUR-H W (Qdis) GBP Z (Qdis) GBP Templeton Emerging s Bond Fund A (Mdis) USD A (Mdis) AUD-H A (Mdis) HKD A (Mdis) SGD-H A (Qdis) USD A (Qdis) EUR A (Qdis) GBP A (Ydis) EUR-H B (Mdis) USD B (Qdis) USD I (Qdis) USD I (Qdis) GBP-H I (Ydis) EUR-H N (Mdis) USD* W (Qdis) USD W (Qdis) EUR W (Qdis) GBP W (Qdis) GBP-H Z (Mdis) USD Z (Qdis) GBP-H Templeton Emerging s Smaller Companies Fund A (Ydis) USD A (Ydis) GBP Templeton Euroland Fund A (Ydis) EUR B (Ydis) EUR Templeton European Fund A (Ydis) USD Templeton Frontier s Fund A (Ydis) USD A (Ydis) GBP I (Ydis) GBP Z (Ydis) EUR-H Templeton Global Fund A (Ydis) USD W (Ydis) USD X (Ydis) USD Templeton Global (Euro) Fund A (Ydis) EUR Templeton Global Balanced Fund A (Qdis) USD C (Qdis) USD I (Ydis) USD X (Ydis) USD Unaudited Semi-Annual Report 149

152 Note 23 Dividends distributed (continued) Notes to the Financial Statements at December 31, 2014 (continued) Annual Distribution Jul-2014 Templeton Global Bond Fund A (Mdis) USD A (Mdis) AUD-H A (Mdis) CAD-H A (Mdis) EUR A (Mdis) EUR-H A (Mdis) GBP A (Mdis) GBP-H A (Mdis) HKD A (Mdis) RMB-H A (Mdis) SGD A (Mdis) SGD-H A (Ydis) CHF-H A (Ydis) EUR A (Ydis) EUR-H B (Mdis) USD C (Mdis) USD I (Mdis) EUR I (Mdis) GBP I (Mdis) GBP-H I (Mdis) JPY I (Mdis) JPY-H I (Ydis) EUR I (Ydis) EUR-H N (Mdis) USD N (Mdis) EUR-H N (Ydis) EUR-H W (Mdis) USD W (Mdis) EUR W (Mdis) GBP W (Mdis) GBP-H W (Ydis) EUR W (Ydis) EUR-H Z (Mdis) USD Z (Mdis) GBP-H Z (Ydis) EUR-H Templeton Global Bond (Euro) Fund A (Ydis) EUR Templeton Global Equity Income Fund A (Mdis) RMB-H1* A (Qdis) USD A (Qdis) SGD B (Qdis) USD I (Ydis) USD Templeton Global High Yield Fund A (Mdis) USD A (Mdis) EUR Templeton Global Income Fund A (Mdis) SGD-H A (Qdis) USD A (Qdis) EUR-H A (Qdis) HKD A (Qdis) SGD B (Qdis) USD C (Qdis) USD N (Qdis) EUR-H Templeton Global Smaller Companies Fund A (Ydis) USD Jul Aug Sep Oct Nov Dec Unaudited Semi-Annual Report

153 Note 23 Dividends distributed (continued) Notes to the Financial Statements at December 31, 2014 (continued) Annual Distribution Jul-2014 Templeton Global Total Return Fund A (Mdis) USD A (Mdis) AUD-H A (Mdis) EUR A (Mdis) EUR-H A (Mdis) GBP A (Mdis) GBP-H A (Mdis) HKD A (Mdis) RMB-H A (Mdis) SGD A (Mdis) SGD-H A (Ydis) CHF-H A (Ydis) EUR A (Ydis) EUR-H B (Mdis) USD C (Mdis) USD I (Mdis) EUR I (Mdis) GBP I (Mdis) GBP-H I (Mdis) JPY I (Mdis) JPY-H I (Ydis) EUR I (Ydis) EUR-H N (Mdis) USD N (Mdis) EUR-H N (Ydis) EUR-H S (Ydis) USD W (Mdis) USD W (Mdis) EUR W (Mdis) GBP W (Mdis) GBP-H W (Ydis) EUR X (Ydis) USD Z (Mdis) USD Z (Mdis) GBP-H Z (Ydis) EUR-H Templeton Growth (Euro) Fund A (Ydis) EUR A (Ydis) USD B (Ydis) EUR I (Ydis) EUR I (Ydis) USD Templeton Latin America Fund A (Ydis) USD A (Ydis) EUR A (Ydis) GBP I (Ydis) EUR-H W (Ydis) USD X (Ydis) USD** Jul Aug Sep Oct Nov Dec * These share classes were launched during the period under review ** These share classes were closed during the period under review Unaudited Semi-Annual Report 151

154 Notes to the Financial Statements at December 31, 2014 (continued) Note 24 Portfolio Turnover Ratio The portfolio turnover ratio, expressed as a percentage, is equal to the total of purchases and sales of securities ted against the absolute of subscriptions and redemptions, over average of the Fund for a year. It is effectively a measure of how frequently a Fund buys or sells securities. The portfolio turnover ratio calculation is not applicable to Liquid Reserve and Money Funds, as such a ratio is not relevant to such Funds due to the short-term nature of the investments. Note 25 Total Expense Ratio The Total Expense Ratio ( TER ), expressed as a percentage, represents how the total expenses of the Funds relate to the average of the Funds for the period ended December 31, The total expenses comprise the investment management fees, the administration and transfer agency fees, the custodian fees and other expenses as summarised in the Statement of Operations and Changes in Net Assets. Note 26 Audited annual reports and unaudited semi-annual reports The audited annual reports and unaudited semi-annual reports are available on the following Franklin Templeton Investments website, or may be obtained, free of charge, on request at the registered office of the Company. They are only distributed to registered Shareholders in those countries where local regulation so requires. Note 27 Global Credit Facility Effective February 14, 2014, the Company, together with other European and U.S. registered investment funds managed by Franklin Templeton Investments (individually, Borrower ; collectively Borrowers ), entered into a joint syndicated senior unsecured credit facility totaling USD 1,500 million (Global Credit Facility) to provide a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Under the terms of the Global Credit Facility, the Company will, in addition to interest charged on any borrowings made by the Company and other costs incurred by the Company, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate of all of the Borrowers, including an annual commitment fee based upon the unused portion of the Global Credit Facility. Note 28 Abbreviations Countries ARE United Arab Emirates ETH Ethiopia LKA Sri Lanka SEN Senegal ARG Argentina FIN Finland LTU Lithuania SER Serbia AUS Australia FJ Fiji LUX Luxembourg SGP Singapore AUT Austria FRA France LVA Latvia SLE Sierra Leone BEL Belgium BGD Bangladesh BGR Bulgaria BHN Bahrain BHS Bahamas BIH Bosnia and Herzegovina BMU Bermuda BRA Brazil BWA Botswana CAN Canada CHE Switzerland CHL Chile CHN China CI Ivory Coast COL Colombia CYM Cayman Islands CZE Czech Republic DEU Germany DNK Denmark ECU Ecuador EGY Egypt ESP Spain EST Estonia Currencies AED United Arab Emirates Dirham AUD Australian Dollar BDT Bangladeshi Taka BRL Brazilian Real BWP Botswanan Pula CAD Canadian Dollar CHF Swiss Franc CLP Chilean Peso CNH Chinese Renminbi - Offshore CNY Chinese Yuan Renminbi CZK Czech Koruna DEM Deutsche Mark DKK Danish Krone EGP Egyptian Pound GBR United Kingdom GE Georgia GHA Ghana GRC Greece HKG Hong Kong HRV Croatia HUN Hungary IDN Indonesia IND India IOM Isle of Man IQ Iraq IRL Ireland ISL Iceland ISR Israel ITA Italy JER Jersey JOR Jordan JPN Japan KAZ Kazakstan KEN Kenya KH Cambodia KOR South Korea KWD Kuwait EUR Euro GBP British Pound Sterling GHS Ghanaian Cedi HKD Hong Kong Dollar HUF Hungarian Forint IDR Indonesian Rupiah INR Indian Rupee JOD Jordanian Dinar JPY Japanese Yen KES Kenyan Shilling KRW South Korean Won KWD Kuwaiti Dinar LKR Sri Lanka Rupee MAD Moroccan Dirham MAC Macao MAR Morocco MEX Mexico MNE Montenegro MNG Mongolia MUS Mauritius MWI Malawi MYS Malaysia NGA Nigeria NLD Netherlands NOR Norway NZL New Zealand OMN Oman PAK Pakistan PAN Panama PER Peru PHL Philippines POL Poland PRT Portugal QAT Qatar ROM Romania RUS Russia SAU Saudi Arabia MUR Mauritius Rupee MXN Mexican Peso MYR Malaysian Ringgit NGN Nigerian Naira NOK Norwegian Krone NZD New Zealand Dollar OMR Omani Rial PEN Peruvian Nuevo Sol PHP Philippine Peso PKR Pakistan Rupee PLN Polish Zloty QAR Qatari Rial RON New Romanian Leu RSD Serbian Dinar SP Supranational SSS Slovakia SVC El Salvador SVN Slovenia SWE Sweden THA Thailand TKM Turkmenistan TTO Trinidad and Tobago TUN Tunisia TUR Turkey TWN Taiwan TZA Tanzania UKR Ukraine URY Uruguay USA United States VND Vietnam ZAF South Africa ZMB Zambia ZWE Zimbabwe RUB Russian Ruble SEK Swedish Krona SGD Singapore Dollar THB Thai Baht TND Tunisian Dinar TRY Turkish Lira TWD New Taiwan Dollar UAH Ukrainian Hryvnia USD US Dollar UYU Uruguayan Peso VND Vietnamese Dong XOF CFA Franc BCEAO ZAR South African Rand 152 Unaudited Semi-Annual Report

155 Franklin Asia Credit Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 250,000 Pertamina Persero PT, senior note, 144A, 6.00%, 05/03/42 IDN USD 246, ,000 Standard Chartered Bank Hong Kong Ltd., sub. note, Reg S, 5.875%, 06/24/20 HKG USD 221, ,000 Bharti Airtel International Netherlands BV, senior note, Reg S, 5.125%, 03/11/23 IND USD 213, ,000 Franshion Development Ltd., senior note, 144A, 6.75%, 04/15/21 CHN USD 213, ,000 Indosat Palapa Co. BV, senior note, Reg S, 7.375%, 07/29/20 IDN USD 211, ,000 China Shanshui Cement Group, senior note, 144A, 10.50%, 04/27/17 CHN USD 209, ,000 China Overseas Finance Cayman VI Ltd., senior note, Reg S, 4.25%, 05/08/19 CHN USD 206, ,000 Hyundai Capital America, senior note, Reg S, 3.75%, 04/06/16 KOR USD 206, ,000 Siam Commercial Bank PCL, senior note, 144A, 3.50%, 04/07/19 THA USD 205, ,000 Alibaba Group Holding Ltd., senior bond, 144A, 4.50%, 11/28/34 CHN USD 205, ,000 PTT Global Chemical PCL, senior note, Reg S, 4.25%, 09/19/22 THA USD 205, ,000 Oversea-Chinese Banking Corp. Ltd., 144A, sub. bond, 4.00% to 10/14/19, FRN thereafter, 10/15/24 SGP USD 205, ,000 United Overseas Bank Ltd., sub. note, Reg S, 2.875% to 10/17/17, FRN thereafter, 10/17/22 SGP USD 201, ,000 Malayan Banking Bhd., sub. note, Reg S, FRN, 3.25%, 09/20/22 MYS USD 201, ,000 The Export-Import Bank of Korea, senior note, FRN, 0.98%, 01/14/17 KOR USD 200, ,000 Abja Investment Co. Pte Ltd., senior note, Reg S, 5.95%, 07/31/24 IND USD 200, ,000 Axis Bank Ltd./Dubai, senior note, 144A, 3.25%, 05/21/20 IND USD 198, ,000 Korea East West Power Co. Ltd., senior note, 144A, 2.50%, 06/02/20 KOR USD 197, ,000 AIA Group Ltd., senior note, Reg S, 3.125%, 03/13/23 HKG USD 197, ,000 Sinopec Capital 2013 Ltd., senior note, 144A, 3.125%, 04/24/23 CHN USD 192, ,000 Longfor Properties Co. Ltd., senior note, Reg S, 6.75%, 01/29/23 CHN USD 191, ,000 Wynn Macau Ltd., senior note, 144A, 5.25%, 10/15/21 MO USD 191, ,000 DP World Ltd., 144A, 6.85%, 07/02/37 ARE USD 169, ,000 AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, senior note, 144A, 5.00%, 10/01/21 NLD USD 156, ,000 Vedanta Resources PLC, senior note, Reg S, 9.50%, 07/18/18 IND USD 118, ,000 CLP Power Hong Kong Financing Ltd., senior note, Reg S, 4.75%, 03/19/20 HKG USD 108, ,000 ICICI Bank Ltd., junior sub. bond, 144A, 6.375% to 04/30/17, FRN thereafter, 04/30/22 IND USD 103, ,000 Flextronics International Ltd., senior note, 4.625%, 02/15/20 SGP USD 102, ,000 Banco De Oro Unibank Inc., senior bond, Reg S, 3.875%, 04/22/16 PHL USD 101, ,000 Mitsui Sumitomo Insurance Co. Ltd., junior sub. note, 144A, 7.00% to 03/15/22, FRN thereafter, 03/15/72 JPN USD 57, ,000 Smithfield Foods Inc., senior note, 144A, 5.875%, 08/01/21 USA USD 51, ,000 NOVA Chemicals Corp., senior bond, 144A, 5.00%, 05/01/25 CAN USD 49, ,000 Constellation Brands Inc., senior note, 3.75%, 05/01/21 USA USD 49, ,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 48, ,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 8.25%, 11/01/19 AUS USD 45, ,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 42, ,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 41, ,000 WPX Energy Inc., senior note, 6.00%, 01/15/22 USA USD 40, ,000 Equinix Inc., senior note, 4.875%, 04/01/20 USA USD 40, ,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 34, ,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 31, ,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 30, ,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 25, ,971, Government and Municipal Bonds 250,000 Government of the Philippines, senior bond, 4.20%, 01/21/24 PHL USD 271, ,000 Republic of Sri Lanka, senior note, Reg S, 5.125%, 04/11/19 LKA USD 202, ,000 Government of Indonesia, senior bond, 144A, 4.625%, 04/15/43 IDN USD 187, ,000 Government of the Philippines, senior bond, 6.375%, 10/23/34 PHL USD 134, , Securities Maturing Within One Year 200,000 Shinhan Bank, senior note, Reg S, 4.375%, 09/15/15 KOR USD 204, ,000 CMT MTN Pte. Ltd., senior bond, Reg S, 4.321%, 04/08/15 SGP USD 100, , TOTAL BONDS 7,072, INVESTMENTS FUNDS Diversified Financial Services 20,534 Templeton Asian Bond Fund, Class I (Acc) LUX USD 396, TOTAL INVESTMENTS FUNDS 396, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 7,468, Unaudited Semi-Annual Report 153

156 Franklin Asia Credit Fund Schedule of Investments as of December 31, 2014 (continued) face TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 200,000 Hutchison Whampoa International 09 Ltd., Reg S, 7.625%, 04/09/19 HKG USD 241, TOTAL BONDS 241, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 241, TOTAL INVESTMENTS 7,710, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

157 Franklin Biotechnology Discovery Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Biotechnology 2,194,400 Celgene Corp. USA USD 245,465, ,840 Biogen Idec Inc. USA USD 183,588, ,726,600 Gilead Sciences Inc. USA USD 162,749, ,500 Amgen Inc. USA USD 132,927, ,700 Medivation Inc. USA USD 85,833, ,200 Regeneron Pharmaceuticals Inc. USA USD 79,670, ,009 BioMarin Pharmaceutical Inc. USA USD 74,309, ,600 Incyte Corp. USA USD 72,057, ,200 Alexion Pharmaceuticals Inc. USA USD 62,207, ,500 Vertex Pharmaceuticals Inc. USA USD 55,063, ,857 Intercept Pharmaceuticals Inc. USA USD 49,273, ,400 Alnylam Pharmaceuticals Inc. USA USD 46,695, ,200 Puma Biotechnology Inc. USA USD 45,841, ,313 Receptos Inc. USA USD 36,913, ,968 Karyopharm Therapeutics Inc. USA USD 36,792, ,980,523 Celldex Therapeutics Inc. USA USD 36,144, ,000 Isis Pharmaceuticals Inc. USA USD 31,734, ,147,500 Neurocrine Biosciences Inc. USA USD 25,635, ,791,173 Keryx Biopharmaceuticals Inc. USA USD 25,345, ,201 Portola Pharmaceuticals Inc. USA USD 25,295, ,800 Acadia Pharmaceuticals Inc. USA USD 25,203, ,304 Bluebird Bio Inc. USA USD 23,599, ,257,684 Heron Therapeutics Inc. USA USD 22,712, ,999 Auspex Pharmaceuticals Inc. USA USD 19,627, ,545,500 Achillion Pharmaceuticals Inc. USA USD 18,932, ,800 NewLink Geics Corp. USA USD 15,494, ,032 Tekmira Pharmaceuticals Corp. CAN USD 14,711, ,500 Tesaro Inc. USA USD 14,076, ,200 MacroGenics Inc. USA USD 13,999, ,646 Zafgen Inc. USA USD 13,774, ,226 Immune Design Corp. USA USD 13,734, ,200 Alkermes PLC USA USD 13,539, ,122,777 Orexigen Therapeutics Inc. USA USD 12,864, ,377 Acceleron Pharma Inc. USA USD 12,403, ,500 Kite Pharma Inc. USA USD 12,370, ,800 PTC Therapeutics Inc. USA USD 12,310, ,020,565 Novavax Inc. USA USD 11,981, ,000 La Jolla Pharmaceutical Co. USA USD 11,070, ,372 Alder Biopharmaceuticals Inc. USA USD 11,006, ,000 FibroGen Inc. USA USD 10,936, ,330 Stemline Therapeutics Inc. USA USD 10,531, ,220,700 Amicus Therapeutics Inc. USA USD 10,156, ,146 Mirati Therapeutics Inc. CAN USD 9,633, ,300 Radius Health Inc. USA USD 9,622, ,128,801 ChemoCentryx Inc. USA USD 7,709, ,460 Dynavax Technologies Corp. USA USD 7,341, ,800 Juno Therapeutics Inc. USA USD 6,830, ,900 Dyax Corp. USA USD 6,620, ,400 Sangamo BioSciences Inc. USA USD 6,592, ,540,902 MEI Pharma Inc. USA USD 6,579, ,900 Dicerna Pharmaceuticals Inc. USA USD 6,108, ,100 Eleven Biotherapeutics Inc. USA USD 6,107, ,900 Ultragenyx Pharmaceutical Inc. USA USD 5,787, ,200 Concert Pharmaceuticals Inc. USA USD 5,637, ,783 Aptose Biosciences Inc. CAN CAD 5,488, ,300 SAGE Therapeutics Inc. USA USD 4,951, ,506,800 Oncothyreon Inc. USA USD 4,762, ,597,600 Catalyst Pharmaceutical Partners Inc. USA USD 4,744, ,000 Cara Therapeutics Inc. USA USD 4,077, ,272,200 Threshold Pharmaceuticals Inc. USA USD 4,045, ,885 GlycoMimetics Inc. USA USD 3,995, ,300 Forward Pharma AS, ADR DNK USD 3,859, ,300 Tokai Pharmaceuticals Inc. USA USD 3,836, ,300 ProQR Therapeutics NV NLD USD 3,712, ,592,600 Mast Therapeutics Inc. USA USD 3,691, ,326,900 CytRx Corp. USA USD 3,635, ,251,292 Lpath Inc., A USA USD 3,528, ,600 OncoMed Pharmaceuticals Inc. USA USD 3,429, ,245 Aquinox Pharmaceuticals Inc. CAN USD 2,769, ,737 ADMA Biologics Inc. USA USD 2,543, ,600 Avalanche Biotechnologies Inc. USA USD 2,408, ,100 Heat Biologics Inc. USA USD 2,275, ,200 Biospecifics Technologies Corp. USA USD 2,247, ,000 Bellicum Pharmaceuticals Inc. USA USD 2,050, ,200 OvaScience Inc. USA USD 1,998, ,100 Tonix Pharmaceuticals Holding Corp. USA USD 1,618, Unaudited Semi-Annual Report 155

158 Franklin Biotechnology Discovery Fund Schedule of Investments as of December 31, 2014 (continued) face Biotechnology (continued) 90,000 Xencor Inc. USA USD 1,443, ,350 Anthera Pharmaceuticals Inc. USA USD 1,319, ,802 Targacept Inc. USA USD 1,109, ,119 Akebia Therapeutics Inc. USA USD 781, ,682 BIND Therapeutics Inc. USA USD 306, ,003,786, Life Sciences Tools & Services 405,500 Illumina Inc. USA USD 74,847, ,800 Fluidigm Corp. USA USD 23,637, ,000 Genfit FRA EUR 10,805, ,290, Pharmaceuticals 269,800 Shire PLC, ADR IRL USD 57,343, ,600 AbbVie Inc. USA USD 50,166, ,822 Salix Pharmaceuticals Ltd. USA USD 41,817, ,131 Jazz Pharmaceuticals PLC USA USD 38,497, ,147 Sagent Pharmaceuticals Inc. USA USD 22,954, ,298,900 SciClone Pharmaceuticals Inc. USA USD 20,138, ,400 Relypsa Inc. USA USD 17,876, ,600 Aratana Therapeutics Inc. USA USD 14,124, ,525,082 TherapeuticsMD Inc. USA USD 11,236, ,503 GW Pharmaceuticals PLC, ADR GBR USD 9,509, ,500 Marinus Pharmaceuticals Inc. USA USD 9,470, ,100 Intra-Cellular Therapies Inc. USA USD 5,243, ,400 Dermira Inc. USA USD 4,498, ,500 Revance Therapeutics Inc. USA USD 3,887, ,937 Celsus Therapeutics PLC, ADR GBR USD 1,977, ,116 Nuvo Research Inc. CAN CAD 296, ,037, TOTAL SHARES 2,422,114, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 2,422,114, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Biotechnology 138,900 OvaScience Inc., 144A USA USD 6,142, TOTAL SHARES 6,142, WARRANTS Biotechnology 182,719 Heron Therapeutics Inc., wts., 144A, 07/01/16 USA USD 1,180, ,455,400 Mast Therapeutics Inc., wts., 06/14/18 USA USD 709, ,889, TOTAL WARRANTS 1,889, BONDS Securities Maturing Within One Year 22,500,000 U.S. Treasury Bill, 0.00%, 01/02/15 USA USD 22,500, TOTAL BONDS 22,500, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 30,531, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Biotechnology 166,795 Intarcia Therapeutics Inc., DD ** USA USD 6,178, ,948 Natera Inc, pfd., ** USA USD 2,974, ,869 Aduro Biotech Inc., pfd., D ** USA USD 1,245, ,398, TOTAL SHARES 10,398, Unaudited Semi-Annual Report

159 Franklin Biotechnology Discovery Fund Schedule of Investments as of December 31, 2014 (continued) face WARRANTS Biotechnology 223,880 Northwest Biotherapeutics Inc., wts., 02/20/19 ** USA USD 773, TOTAL WARRANTS 773, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 11,172, TOTAL INVESTMENTS 2,463,818, ** These securities are submitted to a Fair Valuation Unaudited Semi-Annual Report 157

160 Franklin Brazil Opportunities Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Discretionary 25,200 Estacio Participacoes SA BRA BRL 225, ,054 Alpargatas SA, pfd. BRA BRL 32, , Consumer Staples 6,500 Companhia Brasileira de Distribuicao, pfd., A BRA BRL 241, ,600 Ambev SA BRA BRL 225, ,500 BRF SA BRA BRL 83, , Financials 31,000 CETIP SA Mercados Organizados BRA BRL 375, ,484 Itausa Investimentos Itau SA, pfd. BRA BRL 355, ,300 BB Seguridade Participacoes SA BRA BRL 197, ,100 Banco Bradesco SA, pfd. BRA BRL 159, ,300 Sul America SA (units consisting of common stock and preferred stock) BRA BRL 108, ,000 Aliansce Shopping Centers SA BRA BRL 6, ,202, Health Care 23,600 Fleury SA BRA BRL 144, Industrials 19,600 Arteris SA BRA BRL 91, ,800 All America Latina Logistica BRA BRL 16, , Materials 47,500 Suzano Papel e Celulose SA, pfd., A BRA BRL 201, ,100 Duratex SA BRA BRL 54, , Utilities 22,000 CPFL Energia SA BRA BRL 153, ,700 Companhia de Gas de Sao Paulo, pfd., A BRA BRL 86, , TOTAL SHARES 2,758, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 2,758, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 3,500,000 Centrais Eletricas Brasileiras SA, senior note, Reg S, 5.75%, 10/27/21 BRA USD 3,365, Government and Municipal Bonds 3,475 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 3,254, ,000 Nota Do Tesouro Nacional, %, 01/01/17 BRA BRL 2,867, ,858 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 2,682, Letras Financeiras do Tesouro, Strip, 09/07/16 BRA BRL 1,721, Letras Financeiras do Tesouro, Strip, 09/01/18 BRA BRL 1,599, Letras Financeiras do Tesouro, senior note, Strip, 03/01/18 BRA BRL 1,437, ,109 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/35 BRA BRL 1,025, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 597, ,000 Government of Brazil, %, 05/15/27 BRA USD 153, ,000 Government of Brazil, senior bond, 8.875%, 04/15/24 BRA USD 136, ,475, Securities Maturing Within One Year 12,000 Letra Tesouro Nacional, Strip, 04/01/15 BRA BRL 4,390, ,365 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 1,303, Letras Financeiras do Tesouro, Strip, 03/07/15 BRA BRL 416, Letras Financeiras do Tesouro, Strip, 09/07/15 BRA BRL 385, ,495, TOTAL BONDS 25,337, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 25,337, TOTAL INVESTMENTS 28,095, Unaudited Semi-Annual Report

161 Franklin Euro Government Bond Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Government and Municipal Bonds 9,600,000 Italy Treasury Bond, senior bond, 5.50%, 09/01/22 ITA EUR 12,326, ,400,000 Government of Finland, Reg S, 0.375%, 09/15/20 FIN EUR 11,515, ,200,000 Government of Spain, 5.75%, 07/30/32 ESP EUR 10,611, ,500,000 Government of Spain, senior bond, 4.00%, 04/30/20 ESP EUR 9,864, ,500,000 Government of the Netherlands, Reg S, 1.75%, 07/15/23 NLD EUR 9,362, ,500,000 Government of Poland, 5.25%, 01/20/25 POL EUR 8,818, ,800,000 Italy Treasury Bond, senior bond, Reg S, 4.75%, 09/01/44 ITA EUR 8,817, ,600,000 Government of the Netherlands, 0.25%, 01/15/20 NLD EUR 8,672, ,200,000 Government of Germany, 3.75%, 01/04/19 DEU EUR 8,302, ,000,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 7,513, ,300,000 Government of the Netherlands, Reg S, 1.25%, 01/15/19 NLD EUR 6,613, ,500,000 KFW, senior note, 3.125%, 06/15/18 DEU EUR 6,087, ,300,000 Italy Treasury Bond, Reg S, 3.50%, 03/01/30 ITA EUR 5,926, ,200,000 Italy Treasury Bond, senior bond, Reg S, 4.75%, 09/01/28 ITA EUR 5,315, ,500,000 Government of Finland, senior bond, Reg S, 2.00%, 04/15/24 FIN EUR 3,927, ,500,000 Government of Bulgaria, Reg S, 2.95%, 09/03/24 BGR EUR 3,516, ,200,000 Government of Latvia, Reg S, 2.625%, 01/21/21 LVA EUR 3,474, ,000,000 Government of Lithuania, senior note, Reg S, 3.375%, 01/22/24 LTU EUR 3,462, ,130, Securities Maturing Within One Year 4,050,000 European Financial Stability Facility, Reg S, 0.08%, 07/15/15 SP EUR 4,051, TOTAL BONDS 138,182, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 138,182, TOTAL INVESTMENTS 138,182, Unaudited Semi-Annual Report 159

162 Franklin Euro High Yield Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING INVESTMENTS FUNDS Diversified Financial Services 74,000 ishares Euro High Yield Corporate Bond UCITS ETF $E EUR 8,025, TOTAL INVESTMENTS FUNDS 8,025, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 8,025, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Air Freight & Logistics 777 CEVA Holdings LLC, cvt. pfd., A-2 GBR USD 497, CEVA Holdings LLC GBR USD 229, CEVA Holdings LLC, cvt. pfd., A-1 GBR USD 13, , TOTAL SHARES 740, BONDS Corporate Bonds 14,000,000 UPCB Finance II Ltd., senior secured note, Reg S, 6.375%, 07/01/20 NLD EUR 14,736, ,400,000 CNH Industrial Finance Europe SA, senior note, Reg S, 6.25%, 03/09/18 GBR EUR 13,903, ,500,000 Bakkavor Finance 2 PLC, senior secured note, Reg S, 8.25%, 02/15/18 GBR GBP 13,867, ,000,000 Enel SpA, sub. bond, Reg S, 6.625% to 09/15/21, FRN thereafter, 09/15/76 ITA GBP 13,582, ,500,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, first lien, Reg S, 7.50%, 03/15/19 DEU EUR 13,148, ,000,000 Moy Park Bondco PLC, senior note, Reg S, 6.25%, 05/29/21 GBR GBP 12,487, ,000,000 Jaguar Land Rover Automotive PLC, senior note, Reg S, 5.00%, 02/15/22 GBR GBP 12,296, ,000,000 New Look Bondco I PLC, secured note, first lien, Reg S, 8.75%, 05/14/18 GBR GBP 12,211, ,700,000 WMG Acquisition Corp., senior secured note, first lien, Reg S, 6.25%, 01/15/21 USA EUR 11,977, ,000,000 Rexel SA, senior note, Reg S, 5.125%, 06/15/20 FRA EUR 11,825, ,750,000 Pendragon PLC, secured note, Reg S, 6.875%, 05/01/20 GBR GBP 11,687, ,000,000 Telecom Italia SpA, senior bond, Reg S, 5.25%, 02/10/22 ITA EUR 11,406, ,000,000 Almirall SA, senior note, Reg S, 4.625%, 04/01/21 ESP EUR 10,650, ,000,000 UniCredit SpA, sub. note, Reg S, 6.95%, 10/31/22 ITA EUR 10,625, ,820,000 eaccess Ltd., senior note, Reg S, 8.375%, 04/01/18 JPN EUR 10,347, ,500,000 Kedrion SpA, senior note, Reg S, 4.625%, 04/24/19 ITA EUR 10,342, ,000,000 Rhino Bondco SpA, senior secured note, Reg S, 7.25%, 11/15/20 ITA EUR 10,250, ,500,000 PortAventura Entertainment Barcelona BV, secured note, Reg S, 7.25%, 12/01/20 ESP EUR 9,856, ,000,000 La Financiere Atalian SA, senior note, Reg S, 7.25%, 01/15/20 FRA EUR 9,565, ,000,000 Altice Financing SA, senior secured note, Reg S, 8.00%, 12/15/19 LUX EUR 9,551, ,900,000 Ence Energia y Celulosa SA, secured note, Reg S, 7.25%, 02/15/20 ESP EUR 9,349, ,000,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, Reg S, 8.50%, 01/15/21 USA EUR 9,315, ,000,000 Arrow Global Finance PLC, secured note, Reg S, 7.875%, 03/01/20 GBR GBP 9,310, ,500,000 Telecom Italia SpA, senior note, Reg S, 4.50%, 01/25/21 ITA EUR 9,307, ,000,000 Stretford 79 PLC, secured note, Reg S, 6.25%, 07/15/21 GBR GBP 9,158, ,000,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 8,729, ,000,000 WEPA Hygieneprodukte GmbH, secured note, Reg S, 6.50%, 05/15/20 DEU EUR 8,681, ,500,000 Marcolin SpA, senior secured note, Reg S, 8.50%, 11/15/19 ITA EUR 8,680, ,000,000 Pfleiderer GmbH, secured note, Reg S, 7.875%, 08/01/19 DEU EUR 8,623, ,200,000 Barry Callebaut Services SA, senior note, 144A, 5.50%, 06/15/23 BEL USD 8,121, ,000,000 Koninklijke KPN NV, senior sub. note, Reg S, 6.875% to 03/14/20, FRN thereafter, 03/14/73 NLD GBP 8,055, ,000,000 HSS Financing PLC, senior secured note, Reg S, 6.75%, 08/01/19 GBR GBP 8,043, ,000,000 Galapagos SA, senior secured note, Reg S, 5.375%, 06/15/21 DEU EUR 7,965, ,500,000 Lafarge SA, senior note, Reg S, 4.75%, 09/30/20 FRA EUR 7,706, ,750,000 Financiere Gaillon 8 SAS, senior note, Reg S, 7.00%, 09/30/19 FRA EUR 7,556, ,000,000 Avis Budget Finance PLC, senior note, Reg S, 6.00%, 03/01/21 USA EUR 7,376, ,000,000 Huntsman International LLC, senior note, 5.125%, 04/15/21 USA EUR 7,345, ,000,000 Numericable Group SA, first lien, Reg S, 5.375%, 05/15/22 FRA EUR 7,259, ,300,000 Grupo Isolux Corsan Finance BV, senior note, Reg S, 6.625%, 04/15/21 ESP EUR 7,238, ,837,000 LBG Capital No. 2 PLC, cvt., sub. bond, 18, Reg S, 6.385%, 05/12/20 GBR EUR 7,181, ,000,000 IVS F. SpA, senior secured note, first lien, Reg S, 7.125%, 04/01/20 ITA EUR 7,162, ,000,000 Safari Holding Verwaltungs GmbH, secured note, Reg S, 8.25%, 02/15/21 DEU EUR 7,148, ,500,000 IDH Finance PLC, secured note, Reg S, 6.00%, 12/01/18 GBR GBP 7,116, ,000,000 Kerling PLC, senior secured note, first lien, Reg S, %, 02/01/17 GBR EUR 7,116, ,000,000 Jerrold Finco PLC, secured note, Reg S, 9.75%, 09/15/18 GBR GBP 7,109, ,500,000 Ceramtec Group GmbH, senior note, Reg S, 8.25%, 08/15/21 DEU EUR 7,032, ,000,000 Hertz Holdgs Netherlands BV, senior note, Reg S, 4.375%, 01/15/19 USA EUR 7,008, ,500,000 Galapagos Holding SA, senior note, Reg S, 7.00%, 06/15/22 DEU EUR 6,993, ,100,000 Wind Acquisition Finance SA, senior note, Reg S, 7.00%, 04/23/21 ITA EUR 6,975, ,000,000 Wind Acquisition Finance SA, senior secured note, Reg S, 4.00%, 07/15/20 ITA EUR 6,895, ,000,000 AXA SA, sub. bond, Reg S, 5.25% to 04/16/20, FRN thereafter, 04/16/40 FRA EUR 6,834, ,000,000 Intralot Capital Luxembourg SA, senior note, Reg S, 6.00%, 05/15/21 GRC EUR 6,794, ,000,000 Twinkle Pizza PLC, senior secured note, Reg S, 6.625%, 08/01/21 GBR GBP 6,597, Unaudited Semi-Annual Report

163 Franklin Euro High Yield Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Corporate Bonds (continued) 5,500,000 Intesa Sanpaolo SpA, junior sub. bond, Reg S, 8.375% to 10/14/19, FRN thereafter, Perpetual ITA EUR 6,516, ,400,000 Algeco Scotsman Global Finance PLC, secured note, Reg S, 9.00%, 10/15/18 GBR EUR 6,508, ,000,000 Telefonica Europe BV, junior sub. note, Reg S, 5.875% to 03/31/24, FRN thereafter, Perpetual ESP EUR 6,464, ,000,000 Beverage Packaging Holdings Luxembourg II SA/Beverage Packaging Holdings II Issuer Inc., senior sub. note, 144A, 6.00%, 06/15/17 USA USD 6,462, ,400,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 6,338, ,000,000 Belden Inc., senior sub. bond, Reg S, 5.50%, 04/15/23 USA EUR 6,255, ,000,000 Matterhorn Financing & CY SCA, senior secured note, Reg S, PIK, 9.00%, 04/15/19 CHE EUR 6,114, ,900,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 6,104, ,000,000 Lafarge SA, senior note, Reg S, 6.75%, 12/16/19 FRA EUR 6,084, ,000,000 Odeon & UCI Finco PLC, senior secured note, Reg S, 9.00%, 08/01/18 GBR GBP 6,054, ,500,000 UPC Holding BV, senior note, Reg S, 6.75%, 03/15/23 NLD EUR 6,029, ,000,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 5,771, ,000,000 Fiat Chrysler Finance Europe, senior note, Reg S, 6.75%, 10/14/19 GBR EUR 5,740, ,500,000 Ardagh Glass Finance, senior note, Reg S, 8.75%, 02/01/20 IRL EUR 5,700, ,600,000 CHS/Community Health Systems Inc., senior secured note, 5.125%, 08/01/21 USA USD 5,686, ,900,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 5,631, ,000,000 Virgin Media Finance PLC, senior bond, Reg S, 7.00%, 04/15/23 GBR GBP 5,619, ,000,000 HeidelbergCement Finance Luxembourg SA, senior note, Reg S, 3.25%, 10/21/21 DEU EUR 5,490, ,000,000 Telecom Italia SpA, senior note, Reg S, 4.75%, 05/25/18 ITA EUR 5,471, ,000,000 Fiat Chrysler Finance Europe, senior note, Reg S, 7.75%, 10/17/16 GBR EUR 5,462, ,300,000 Cable Communications Systems NV, senior secured note, Reg S, 7.50%, 11/01/20 ROM EUR 5,419, ,000,000 Cerved Technologies SpA, senior sub. note, Reg S, 8.00%, 01/15/21 ITA EUR 5,417, ,000,000 Fresenius Finance BV, senior note, Reg S, 3.00%, 02/01/21 DEU EUR 5,400, ,000,000 Schaeffler Holding Finance BV, senior secured note, Reg S, PIK, 5.75%, 11/15/21 DEU EUR 5,343, ,000,000 Unione di Banche Italiane SCpA, senior note, Reg S, 2.875%, 02/18/19 ITA EUR 5,333, ,000,000 Cerved Technologies SpA, senior secured note, Reg S, 6.375%, 01/15/20 ITA EUR 5,317, ,400,000 Game SpA, secured note, Reg S, 7.25%, 08/01/18 ITA EUR 5,308, ,000,000 Ardagh Packaging Finance PLC, senior note, Reg S, 9.25%, 10/15/20 LUX EUR 5,293, ,000,000 Sunrise Communications International SA, senior secured note, Reg S, 7.00%, 12/31/17 CHE EUR 5,187, ,627,000 Calpine Corp., senior secured bond, 144A, 7.875%, 01/15/23 USA USD 5,150, ,000,000 Rabobank Nederland, sub. bond, Reg S, 2.50% to 05/26/21, FRN thereafter, 05/26/26 NLD EUR 5,097, ,500,000 Spie BondCo 3 SCA, senior note, Reg S, 11.00%, 08/15/19 LUX EUR 5,027, ,500,000 OTE PLC, senior note, Reg S, 7.875%, 02/07/18 GRC EUR 4,928, ,000,000 Rhino Bondco SpA, first lien, Reg S, FRN, 5.582%, 12/15/19 ITA EUR 4,925, ,500,000 Cegedim SA, senior note, Reg S, 6.75%, 04/01/20 FRA EUR 4,924, ,000,000 Societe Generale SA, junior sub. bond, Reg S, 9.375% to 09/04/19, FRN thereafter, Perpetual FRA EUR 4,905, ,000,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 4,896, ,400,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 4,852, ,000,000 Intesa Sanpaolo SpA, senior note, 144A, 6.50%, 02/24/21 ITA USD 4,809, ,500,000 Chesapeake Energy Corp., senior bond, 6.25%, 01/15/17 USA EUR 4,713, ,450,000 Play Finance 2 SA, secured note, first lien, Reg S, 5.25%, 02/01/19 LUX EUR 4,621, ,000,000 Financiere Quick SAS, senior note, Reg S, FRN, 7.582%, 10/15/19 FRA EUR 4,612, ,000,000 HeidelbergCement Finance Luxembourg SA, senior note, Reg S, 8.00%, 01/31/17 DEU EUR 4,577, ,000,000 Financiere Quick SAS, senior secured note, Reg S, FRN, 4.832%, 04/15/19 FRA EUR 4,532, ,100,000 Fiat Chrysler Finance Europe, senior note, Reg S, 4.75%, 03/22/21 GBR EUR 4,384, ,000,000 eaccess Ltd., senior note, 144A, 8.25%, 04/01/18 JPN USD 4,346, ,500,000 Abengoa Finance SAU, senior note, Reg S, 8.875%, 02/05/18 ESP EUR 4,334, ,000,000 LBG Capital No. 1 PLC, cvt., sub. bond, 36, 7.625%, 10/14/20 GBR EUR 4,330, ,250,000 Mobile Challenger Intermediate Group SA, senior secured note, Reg S, PIK, 8.75%, 03/15/19 CHE EUR 4,324, ,000,000 Tele Finance II Luxembourg, senior secured note, Reg S, 6.625%, 02/15/21 LUX EUR 4,264, ,000,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 4,239, ,250,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 4,232, ,000,000 U.S. Coatings Acquisition Inc./Flash Dutch 2 BV, secured note, Reg S, 5.75%, 02/01/21 USA EUR 4,227, ,000,000 Fresenius Medical Care U.S. Finance II Inc., senior note, 144A, 4.75%, 10/15/24 DEU USD 4,165, ,000,000 Navient Corp., senior note, 4.875%, 06/17/19 USA USD 4,154, ,000,000 EC Finance PLC, secured note, Reg S, 5.125%, 07/15/21 GBR EUR 4,152, ,000,000 Auris Luxembourg II S.à r.l., senior note, Reg S, 8.00%, 01/15/23 DEU EUR 4,135, ,000,000 Pennon Group PLC, senior sub. bond, Reg S, 6.75% to 03/08/18, FRN thereafter, Perpetual GBR GBP 4,118, ,000,000 Piaggio & C SpA, senior note, Reg S, 4.625%, 04/30/21 ITA EUR 4,117, ,000,000 Banco Bilbao Vizcaya Argentaria SA, junior sub. note, 7.00% to 02/19/19, FRN thereafter, Perpetual ESP EUR 4,090, Unaudited Semi-Annual Report 161

164 Franklin Euro High Yield Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Corporate Bonds (continued) 4,000,000 ArcelorMittal, senior note, Reg S, 2.875%, 07/06/20 LUX EUR 4,062, ,000,000 CNH Industrial Finance Europe SA, senior note, Reg S, 2.75%, 03/18/19 GBR EUR 4,062, ,000,000 Deutsche Annington Finance BV, sub. note, Reg S, 4.00% to 12/17/21, FRN thereafter, Perpetual DEU EUR 4,057, ,250,000 Paroc Group Oy, secured note, 6.25%, 05/15/20 FIN EUR 4,010, ,000,000 Virgin Media Secured Finance PLC, senior secured note, Reg S, 5.50%, 01/15/25 GBR GBP 4,007, ,000,000 Abengoa Finance SAU, senior note, 144A, 8.875%, 11/01/17 ESP USD 4,003, ,469,000 Achmea BV, sub. note, Reg S, 6.00% to 04/04/23, FRN thereafter, 04/04/43 NLD EUR 3,965, ,000,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.00%, 04/01/17 AUS USD 3,964, ,700,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 3,894, ,000,000 Ineos Group Holdings SA, senior note, Reg S, 5.75%, 02/15/19 CHE EUR 3,870, ,000,000 Delta Lloyd NV, junior sub. note, Reg S, 4.375% to 06/13/24, FRN thereafter, Perpetual NLD EUR 3,842, ,500,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.75%, 01/15/23 DEU EUR 3,806, ,750,000 PortAventura Entertainment Barcelona BV, secured note, Reg S, FRN, 5.707%, 12/01/19 ESP EUR 3,732, ,000,000 Lowell Group Financing PLC, senior secured note, first lien, Reg S, 5.875%, 04/01/19 GBR GBP 3,591, ,500,000 Loxam SAS, senior sub. note, Reg S, 7.375%, 01/24/20 FRA EUR 3,533, ,000,000 ArcelorMittal, senior note, 6.125%, 06/01/18 LUX USD 3,524, ,000,000 Matterhorn Mobile SA, senior secured bond, Reg S, 6.75%, 05/15/19 CHE CHF 3,508, ,200,000 Infor U.S. Inc., senior note, 10.00%, 04/01/19 USA EUR 3,468, ,000,000 Standard Chartered Bank, sub. note, Reg S, 5.875%, 09/26/17 GBR EUR 3,389, ,900,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 3,380, ,000,000 OI European Group BV, senior note, Reg S, 4.875%, 03/31/21 NLD EUR 3,301, ,500,000 UniCredit SpA, junior sub. bond, 5.00%, 02/01/16 ITA GBP 3,298, ,300,000 Guala Closures SpA, senior secured note, Reg S, FRN, 5.453%, 11/15/19 ITA EUR 3,291, ,000,000 Telefonica Europe BV, sub. note, Reg S, 6.50% to 09/18/18, FRN thereafter, Perpetual ESP EUR 3,288, ,500,000 HeidelbergCement Finance Luxembourg SA, senior note, 7.50%, 04/03/20 DEU EUR 3,240, ,000,000 Albea Beauty Holdings SA, first lien, Reg S, 8.75%, 11/01/19 FRA EUR 3,226, ,000,000 CGG SA, senior note, 6.50%, 06/01/21 FRA USD 3,161, ,000,000 HP Pelzer Holding GmbH, secured note, Reg S, 7.50%, 07/15/21 DEU EUR 3,153, ,400,000 Cemex Finance LLC, senior secured note, 144A, 9.375%, 10/12/22 MEX USD 3,147, ,000,000 Jarden Corp., senior note, Reg S, 3.75%, 10/01/21 USA EUR 3,146, ,000,000 Convatec Healthcare, senior note, Reg S, 7.375%, 12/15/17 LUX EUR 3,114, ,529,000 Intesa Sanpaolo SpA, sub. note, Reg S, 6.625%, 09/13/23 ITA EUR 3,107, ,000,000 Finmeccanica SpA, senior note, 8.00%, 12/16/19 ITA GBP 3,022, ,000,000 Sunrise Communications International SA, first lien, Reg S, FRN, 4.829%, 12/31/17 CHE EUR 3,016, ,000,000 Iron Mountain Inc., senior sub. note, 6.75%, 10/15/18 USA EUR 2,998, ,700,000 KM Germany Holdings GmbH, senior secured note, first lien, Reg S, 8.75%, 12/15/20 DEU EUR 2,936, ,000,000 Iglo Foods Bondco PLC, senior secured note, first lien, Reg S, FRN, 4.582%, 06/15/20 GBR EUR 2,907, ,000,000 Bormioli Rocco Holdings SA, senior secured bond, Reg S, 10.00%, 08/01/18 ITA EUR 2,902, ,800,000 Intesa Sanpaolo Vita SpA, sub. note, Reg S, 4.75% to 12/17/24, FRN thereafter, Perpetual ITA EUR 2,865, ,000,000 Paroc Group Oy, secured note, Reg S, FRN, 5.328%, 05/15/20 FIN EUR 2,854, ,500,000 Buzzi Unicem SpA, senior note, Reg S, 6.25%, 09/28/18 ITA EUR 2,846, ,000,000 Lowell Group Financing PLC, senior secured bond, Reg S, 10.75%, 04/01/19 GBR GBP 2,808, ,000,000 Telefonica Europe BV, junior sub. note, Reg S, 6.75%, Perpetual ESP GBP 2,716, ,500,000 Ono Finance II PLC, senior bond, Reg S, %, 07/15/19 ESP EUR 2,667, ,100,000 VTR Finance BV, senior secured note, 144A, 6.875%, 01/15/24 LUX USD 2,619, ,500,000 Banco Popolare Societa Cooperativa, senior note, Reg S, 3.50%, 03/14/19 ITA EUR 2,610, ,500,000 Crown European Holdings SA, senior note, Reg S, 4.00%, 07/15/22 FRA EUR 2,606, ,500,000 ArcelorMittal, senior note, Reg S, 3.00%, 03/25/19 LUX EUR 2,578, ,000,000 Abengoa Finance SAU, senior note, Reg S, 6.00%, 03/31/21 ESP EUR 2,577, ,500,000 BPCE SA, 9.00% to 03/17/15, FRN thereafter, Perpetual FRA EUR 2,535, ,500,000 AXA SA, junior sub. bond, Reg S, 3.875% to 10/07/25, FRN thereafter, Perpetual FRA EUR 2,524, ,100,000 Stena International SA, secured bond, 144A, 5.75%, 03/01/24 SWE USD 2,421, ,000,000 Greif Luxembourg Finance SCA, senior note, Reg S, 7.375%, 07/15/21 USA EUR 2,366, ,500,000 OTE PLC, senior note, Reg S, 3.50%, 07/09/20 GRC EUR 2,366, ,250,000 Astaldi SpA, senior note, Reg S, 7.125%, 12/01/20 ITA EUR 2,303, ,000,000 Premier Foods PLC, secured note, Reg S, FRN, 5.56%, 03/15/20 GBR GBP 2,297, ,000,000 Peugeot SA, senior note, 5.625%, 07/11/17 FRA EUR 2,180, ,000,000 Deutsche Raststaetten Gruppe IV GmbH, second lien, Reg S, 6.75%, 12/30/20 DEU EUR 2,133, ,962,000 Millipore Corp., senior note, Reg S, 5.875%, 06/30/16 USA EUR 2,113, ,000,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 04/01/22 AUS USD 2,073, ,400,000 Frontier Communications Corp., senior bond, 7.625%, 04/15/24 USA USD 2,052, ,000,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, secured bond, Reg S, 4.00%, 01/15/25 DEU EUR 2,045, ,000,000 Stretford 79 PLC, first lien, FRN, 4.81%, 07/15/20 GBR GBP 2,035, ,000,000 Ineos Group Holdings SA, senior note, Reg S, 6.50%, 08/15/18 CHE EUR 1,978, ,000,000 Tesco Corporate Treasury Services PLC, senior note, Reg S, 2.50%, 07/01/24 GBR EUR 1,856, Unaudited Semi-Annual Report

165 Franklin Euro High Yield Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Corporate Bonds (continued) 1,700,000 Play Finance 1 SA, senior note, Reg S, 6.50%, 08/01/19 LUX EUR 1,806, ,700,000 Ontex Group NV, senior note, Reg S, 4.75%, 11/15/21 BEL EUR 1,791, ,000,000 Constellium NV, senior note, Reg S, 4.625%, 05/15/21 NLD EUR 1,752, ,000,000 Aguila 3 SA, senior secured note, Reg S, 7.875%, 01/31/18 LUX CHF 1,636, ,500,000 BBVA Subordinated Capital SAU, sub. note, Reg S, 3.50% to 04/11/19, FRN thereafter, 04/11/24 ESP EUR 1,555, ,700,000 Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22 GBR USD 1,528, ,500,000 Altice SA, senior secured note, Reg S, 7.25%, 05/15/22 LUX EUR 1,527, ,300,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 5.625%, 12/01/21 USA USD 1,085, ,000,000 Ineos Finance PLC, senior secured note, 144A, 8.375%, 02/15/19 CHE USD 880, ,000 Hertz Corp., senior note, 6.25%, 10/15/22 USA USD 754, ,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 716, ,000,000 CGG SA, senior note, 7.75%, 05/15/17 FRA USD 712, ,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 640, ,011,191, Securities Maturing Within One Year 5,000,000 GMAC International Finance BV, senior bond, Reg S, 7.50%, 04/21/15 USA EUR 5,084, ,000,000 Co-Operative Bank PLC, senior note, Reg S, 2.375%, 10/23/15 GBR EUR 4,859, ,500,000 Santander International Debt SA, senior note, Reg S, 3.381%, 12/01/15 ESP EUR 2,566, ,000,000 Abengoa SA, senior note, Reg S, 9.625%, 02/25/15 ESP EUR 1,006, ,516, TOTAL BONDS 1,024,708, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 1,025,448, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 5,000,000 Fresenius Medical Care U.S. Finance II Inc., senior note, 144A, 4.75%, 10/15/24 DEU USD 4,173, ,000,000 Astana Finance BV, 7.875%, 06/08/10 * KAZ EUR 200, ,373, TOTAL BONDS 4,373, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 4,373, TOTAL INVESTMENTS 1,037,847, Income may be received in additional securities and/or cash * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report 163

166 Franklin Euro Liquid Reserve Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 3,000,000 JPMorgan Chase & Co., senior note, Reg S, FRN, 0.436%, 05/03/16 USA EUR 3,007, ,000,000 UBS AG London, senior note, Reg S, FRN, 0.331%, 09/05/16 CHE EUR 3,005, ,012, Securities Maturing Within One Year 3,100,000 Credit Agricole SA/London, senior note, FRN, 0.479%, 01/14/15 FRA EUR 3,100, ,000,000 Lloyds Bank PLC, senior note, FRN, 0.379%, 10/14/15 GBR EUR 3,004, ,000,000 BNP Paribas SA, senior note, FRN, 0.379%, 11/13/15 FRA EUR 3,004, ,000,000 BNP Paribas SA, senior note, FRN, 0.332%, 04/03/15 FRA EUR 3,001, ,000,000 Barclays Bank PLC, FRN, 0.288%, 07/31/15 GBR EUR 3,001, ,000,000 Credit Suisse London, senior note, Reg S, FRN, 0.28%, 08/12/15 CHE EUR 3,000, ,000,000 JPMorgan Chase & Co., FRN, 0.332%, 03/02/15 USA EUR 3,000, ,000,000 Procter & Gamble Co., zero cpn., 01/29/15 USA EUR 3,000, ,000,000 Svenska Handelsbanken AB, zero cpn., 01/28/15 SWE EUR 3,000, ,000,000 Abbey National Treasury Services PLC, zero cpn., 01/23/15 FRA EUR 3,000, ,000,000 Mizuho Bank Ltd./London, zero cpn., 01/16/15 GBR EUR 3,000, ,000,000 BPCE SA, zero cpn., 01/22/15 FRA EUR 3,000, ,000,000 Toyota Kreditbank GmbH, zero cpn., 02/27/15 JPN EUR 2,999, ,000,000 Banque Fed Cred Mutuel, zero cpn., 03/12/15 FRA EUR 2,999, ,000,000 Nordea Bank AB, zero cpn., 04/15/15 SWE EUR 2,999, ,000,000 Bank of China Ltd./Sydney, zero cpn., 03/10/15 AUS EUR 2,999, ,000,000 Pohjola Bank PLC, zero cpn., 05/07/15 FIN EUR 2,999, ,500,000 DZ Bank AG Deutsche Zentral-Genossenschaftsbank, zero cpn., 02/23/15 DEU EUR 2,500, ,500,000 Svenska Handelsbanken AB, zero cpn., 02/04/15 SWE EUR 2,500, ,500,000 ABN Amro Bank NV, zero cpn., 02/23/15 NLD EUR 2,499, ,000,000 ABN Amro Bank NV, senior note, Reg S, FRN, 0.372%, 12/03/15 NLD EUR 2,002, ,000,000 Banque Federative du Credit Mutuel, senior note, Reg S, FRN, 0.381%, 08/26/15 FRA EUR 2,002, ,000,000 Credit Suisse London, zero cpn., 01/21/15 GBR EUR 1,999, ,000,000 Natixis, zero cpn., 03/04/15 FRA EUR 1,999, ,617, TOTAL BONDS 72,629, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 72,629, TOTAL INVESTMENTS 72,629, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

167 Franklin Euro Short Duration Bond Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 1,000,000 GE Capital European Funding, senior note, 3.75%, 04/04/16 USA EUR 1,044, ,000,000 UBS AG London, senior note, Reg S, FRN, 0.331%, 09/05/16 CHE EUR 1,001, ,000 HSBC France SA, senior note, Reg S, 1.875%, 01/16/20 FRA EUR 853, ,000 KBC Internationale Financieringsmaatschappij NV, senior note, Reg S, 2.125%, 09/10/18 BEL EUR 847, ,000 Mcdonald s Corp., senior note, 4.25%, 06/10/16 USA EUR 846, ,000 ELM BV/Swiss Reinsurance Co., junior secured sub. note, Reg S, 5.252% to 05/25/16, FRN thereafter, Perpetual CHE EUR 837, ,000 Intesa Sanpaolo SpA, senior note, Reg S, 4.125%, 01/14/16 ITA EUR 828, ,000 Sampo OYJ, senior note, Reg S, 4.25%, 02/27/17 FIN EUR 755, ,000 Daimler AG, senior note, Reg S, 4.125%, 01/19/17 DEU EUR 755, ,000 Lloyds Bank PLC, senior note, Reg S, 1.875%, 10/10/18 GBR EUR 736, ,000 UniCredit SpA, senior note, Reg S, 2.25%, 12/16/16 ITA EUR 720, ,000 Standard Chartered PLC, senior note, Reg S, FRN, 0.482%, 06/13/17 GBR EUR 700, ,000 Madrilena Red de Gas Finance BV, senior note, Reg S, 3.779%, 09/11/18 ESP EUR 662, ,000 Bharti Airtel International Netherlands BV, senior note, Reg S, 4.00%, 12/10/18 IND EUR 649, ,000 Yorkshire Building Society, senior note, Reg S, 2.125%, 03/18/19 GBR EUR 628, ,000 Tesco Corporate Treasury Services PLC, senior note, Reg S, 1.375%, 07/01/19 GBR EUR 572, ,000 Zapadoslovenska Energetika AS, senior note, Reg S, 2.875%, 10/14/18 SSS EUR 537, ,000 Edison SpA, senior note, Reg S, 3.875%, 11/10/17 ITA EUR 437, ,000 Pfizer Inc., senior note, Reg S, 4.75%, 06/03/16 USA EUR 425, ,000 Propertize BV, senior note, 0.50%, 02/27/17 NLD EUR 403, ,000 Motability Operations Group PLC, senior note, Reg S, 3.75%, 11/29/17 GBR EUR 328, ,573, Government and Municipal Bonds 4,200,000 Italy Treasury Bond, senior bond, 4.50%, 02/01/18 ITA EUR 4,686, ,800,000 Government of Spain, senior note, 3.75%, 10/31/18 ESP EUR 4,242, ,000,000 KFW, senior note, 3.125%, 07/04/16 DEU EUR 4,187, ,200,000 Government of Spain, senior bond, 4.00%, 04/30/20 ESP EUR 3,713, ,300,000 Italy Treasury Bond, 2.50%, 05/01/19 ITA EUR 3,528, ,300,000 Government of the Netherlands, Reg S, 1.25%, 01/15/19 NLD EUR 3,464, ,600,000 Government of Ireland, 5.50%, 10/18/17 IRL EUR 2,978, ,500,000 European Investment Bank, senior note, 1.00%, 07/13/18 SP EUR 1,552, ,100,000 Government of Latvia, 5.50%, 03/05/18 LVA EUR 1,279, ,100,000 Government of Lithuania, senior bond, 4.85%, 02/07/18 LTU EUR 1,247, ,100,000 Government of Bulgaria, Reg S, 4.25%, 07/09/17 BGR EUR 1,180, ,579,000 Government of Poland, 4.75%, 10/25/16 POL PLN 1,125, ,186, Securities Maturing Within One Year 6,100,000 Italy Treasury Bond, 2.50%, 03/01/15 ITA EUR 6,122, ,000,000 Credit Suisse London, senior note, Reg S, FRN, 0.28%, 08/12/15 CHE EUR 1,000, ,000 European Financial Stability Facility, Reg S, 0.08%, 07/15/15 SP EUR 700, ,000 Statoil ASA, senior note, Reg S, 4.375%, 03/11/15 NOR EUR 503, ,327, TOTAL BONDS 56,087, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 56,087, TOTAL INVESTMENTS 56,087, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report 165

168 Franklin Euro Short-Term Money Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Securities Maturing Within One Year 2,500,000 BNP Paribas SA, senior note, FRN, 0.379%, 11/13/15 FRA EUR 2,504, ,500,000 Banque Federative du Credit Mutuel, senior note, Reg S, FRN, 0.381%, 08/26/15 FRA EUR 2,503, ,500,000 Barclays Bank PLC, FRN, 0.288%, 07/31/15 GBR EUR 2,501, ,500,000 Credit Suisse London, senior note, Reg S, FRN, 0.28%, 08/12/15 CHE EUR 2,500, ,500,000 JPMorgan Chase & Co., FRN, 0.332%, 03/02/15 USA EUR 2,500, ,500,000 BNP Paribas SA, senior note, FRN, 0.332%, 04/03/15 FRA EUR 2,500, ,500,000 Mizuho Bank Ltd./London, zero cpn., 01/16/15 GBR EUR 2,499, ,500,000 ABN Amro Bank NV, zero cpn., 02/23/15 NLD EUR 2,499, ,500,000 Svenska Handelsbanken AB, zero cpn., 01/28/15 SWE EUR 2,499, ,500,000 Banque Fed Cred Mutuel, zero cpn., 03/12/15 FRA EUR 2,499, ,000,000 Lloyds Bank PLC, senior note, FRN, 0.379%, 10/14/15 GBR EUR 2,003, ,000,000 Abbey National Treasury Services PLC, zero cpn., 01/23/15 FRA EUR 1,999, ,000,000 Mizuho Bank Ltd./London, zero cpn., 01/28/15 GBR EUR 1,999, ,000,000 Credit Agricole SA, zero cpn., 02/19/15 FRA EUR 1,999, ,000,000 Credit Suisse London, zero cpn., 01/21/15 GBR EUR 1,999, ,000,000 BPCE SA, zero cpn., 01/22/15 FRA EUR 1,999, ,000,000 Natixis, zero cpn., 03/04/15 FRA EUR 1,999, ,000,000 Nordea Bank AB, zero cpn., 06/08/15 SWE EUR 1,998, ,000,000 Bank of China Ltd./Sydney, zero cpn., 03/10/15 AUS EUR 1,998, ,500,000 DZ Bank AG Deutsche Zentral-Genossenschaftsbank, zero cpn., 02/23/15 DEU EUR 1,499, ,508, TOTAL BONDS 44,508, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 44,508, TOTAL INVESTMENTS 44,508, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

169 Franklin Euroland Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Auto Components 11,771 SHW AG DEU EUR 434, Automobiles 6,337 Volkswagen AG, pfd. DEU EUR 1,170, Banks 139,731 ING Groep NV, IDR NLD EUR 1,513, ,669 Intesa Sanpaolo SpA ITA EUR 1,377, ,316 KBC GROEP NV BEL EUR 1,223, ,114, Beverages 11,577 Anheuser-Busch InBev NV BEL EUR 1,086, Capital s 48,018 Banca Generali ITA EUR 1,106, Chemicals 14,740 BASF SE DEU EUR 1,030, ,272 Solvay SA BEL EUR 704, ,234 Arkema FRA EUR 398, ,316 Tikkurila Oy FIN EUR 279, ,413, Construction & Engineering 12,208 Vinci SA FRA EUR 555, ,844 Outotec OYJ FIN EUR 236, , Construction Materials 27,007 CRH PLC IRL EUR 537, Diversified Telecommunication Services 59,796 Telefonica SA ESP EUR 712, ,715 Deutsche Telekom AG DEU EUR 473, ,185, Electrical Equipment 54,013 Prysmian SpA ITA EUR 818, ,962 Legrand SA FRA EUR 346, ,165, Insurance 9,721 Allianz SE DEU EUR 1,335, ,515 Corporacion Mapfre SA ESP EUR 693, ,195 Vienna Insurance Group AUT EUR 526, ,405 Euler Hermes Group FRA EUR 377, ,932, Inter & Catalog Retail 82,664 Takkt AG DEU EUR 1,125, IT Services 7,242 Cap Gemini SA FRA EUR 430, Machinery 14,251 GEA Group AG DEU EUR 521, Media 82,868 Mediaset Espana Comunicacion SA ESP EUR 865, ,658 GFK AG DEU EUR 668, ,117 Reed Elsevier NV GBR EUR 557, ,091, Metals & Mining 14,084 Aurubis AG DEU EUR 655, Multi-Utilities 47,362 GDF Suez FRA EUR 920, Oil, Gas & Consumable Fuels 36,124 Total SA, B FRA EUR 1,535, ,920 Eni SpA ITA EUR 724, ,260, Pharmaceuticals 20,948 Sanofi FRA EUR 1,584, Unaudited Semi-Annual Report 167

170 Franklin Euroland Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Semiconductors & Semiconductor Equipment 10,729 ASML Holding NV NLD EUR 960, Software 21,366 SAP SE DEU EUR 1,244, Textiles, Apparel & Luxury Goods 7,666 LVMH Moet Hennessy Louis Vuitton FRA EUR 1,013, ,274 Gerry Weber International AG DEU EUR 760, ,774, Transportation Infrastructure 21,900 Atlantia SpA ITA EUR 423, TOTAL SHARES 30,930, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 30,930, TOTAL INVESTMENTS 30,930, Unaudited Semi-Annual Report

171 Franklin European Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles 965 Volkswagen AG, pfd. DEU EUR 178, Banks 17,006 ING Groep NV, IDR NLD EUR 184, ,314 Lloyds Banking Group PLC GBR GBP 167, ,267 KBC GROEP NV BEL EUR 151, ,347 DNB ASA NOR NOK 151, ,284 Standard Chartered PLC GBR GBP 139, ,180 Intesa Sanpaolo SpA ITA EUR 133, , Beverages 1,886 Anheuser-Busch InBev NV BEL EUR 177, Capital s 7,595 Banca Generali ITA EUR 175, ,500 Ashmore Group PLC GBR GBP 153, , Chemicals 1,823 BASF SE DEU EUR 127, Solvay SA BEL EUR 106, ,475 Arkema FRA EUR 81, , Construction & Engineering 2,125 Vinci SA FRA EUR 96, ,726 Outotec OYJ FIN EUR 55, , Consumer Finance 20,541 International Personal Finance PLC GBR GBP 118, Diversified Telecommunication Services 9,243 Deutsche Telekom AG DEU EUR 122, ,820 Telefonica SA ESP EUR 81, , Electrical Equipment 14,338 Prysmian SpA ITA EUR 217, ,960 Legrand SA FRA EUR 85, , Energy Equipment & Services 3,555 TGS Nopec Geophysical Co. ASA NOR NOK 63, Health Care Equipment & Supplies 1,979 Draegerwerk AG & Co. KGAA, pfd. DEU EUR 165, Household Products 1,781 Reckitt Benckiser Group PLC GBR GBP 119, Insurance 1,530 Allianz SE DEU EUR 210, Euler Hermes Group FRA EUR 79, ,465 Corporacion Mapfre SA ESP EUR 71, ,827 Vienna Insurance Group AUT EUR 67, , Inter & Catalog Retail 15,749 Takkt AG DEU EUR 214, IT Services 1,035 Cap Gemini SA FRA EUR 61, Machinery 9,723 IMI PLC GBR GBP 158, ,999 GEA Group AG DEU EUR 109, , Media 9,614 Reed Elsevier PLC GBR GBP 136, ,404 ITE Group PLC GBR GBP 118, ,018 Mediaset Espana Comunicacion SA ESP EUR 104, ,086 GFK AG DEU EUR 70, , Unaudited Semi-Annual Report 169

172 Franklin European Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Metals & Mining 4,805 Rio Tinto PLC GBR GBP 185, ,848 Aurubis AG DEU EUR 86, , Multi-Utilities 25,506 Centrica PLC GBR GBP 91, Oil, Gas & Consumable Fuels 46,121 BP PLC GBR GBP 244, ,393 Total SA, B FRA EUR 229, , Pharmaceuticals 3,678 Novartis AG CHE CHF 282, ,184 Sanofi FRA EUR 240, , Semiconductors & Semiconductor Equipment 2,042 ASML Holding NV NLD EUR 182, Software 3,546 SAP SE DEU EUR 206, Textiles, Apparel & Luxury Goods 1,382 LVMH Moet Hennessy Louis Vuitton FRA EUR 182, ,286 Gerry Weber International AG DEU EUR 146, , Tobacco 5,544 British American Tobacco PLC GBR GBP 249, Wireless Telecommunication Services 26,413 Vodafone Group PLC GBR GBP 75, TOTAL SHARES 6,860, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 6,860, TOTAL INVESTMENTS 6,860, Unaudited Semi-Annual Report

173 Franklin European Corporate Bond Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 1,900,000 GE Capital European Funding, senior note, Reg S, 2.25%, 07/20/20 USA EUR 2,073, ,000,000 Rabobank Nederland, sub. bond, Reg S, 2.50% to 05/26/21, FRN thereafter, 05/26/26 NLD EUR 2,039, ,900,000 Syngenta Finance NV, senior note, Reg S, 1.875%, 11/02/21 CHE EUR 2,033, ,800,000 ABB Finance BV, senior note, Reg S, 2.625%, 03/26/19 CHE EUR 1,964, ,600,000 The Goldman Sachs Group Inc., senior note, Reg S, 6.375%, 05/02/18 USA EUR 1,899, ,700,000 Allianz SE, sub. note, Reg S, 4.75% to 10/24/23, FRN thereafter, Perpetual DEU EUR 1,897, ,800,000 ELM BV/Swiss Reinsurance Co., junior secured sub. note, Reg S, 5.252% to 05/25/16, FRN thereafter, Perpetual CHE EUR 1,884, ,600,000 JPMorgan Chase & Co., senior note, Reg S, 3.875%, 09/23/20 USA EUR 1,884, ,800,000 Sparebank 1 SMN, senior note, Reg S, 1.50%, 05/20/19 NOR EUR 1,865, ,800,000 Australia Pacific Airports Melbourne Pty. Ltd., senior secured note, Reg S, 1.75%, 10/15/24 AUS EUR 1,853, ,500,000 Morgan Stanley, senior note, 5.375%, 08/10/20 USA EUR 1,852, ,700,000 Bank of America Corp., senior note, Reg S, 2.50%, 07/27/20 USA EUR 1,850, ,800,000 Intesa Sanpaolo Vita SpA, sub. note, Reg S, 4.75% to 12/17/24, FRN thereafter, Perpetual ITA EUR 1,841, ,700,000 McDonald s Corp., senior bond, Reg S, 2.00%, 06/01/23 USA EUR 1,838, ,700,000 BPCE SA, senior note, Reg S, 2.125%, 03/17/21 FRA EUR 1,836, ,800,000 Citigroup Inc., senior note, Reg S, 1.375%, 10/27/21 USA EUR 1,835, ,700,000 Daimler AG, senior note, Reg S, 4.125%, 01/19/17 DEU EUR 1,833, ,700,000 Danske Bank AS, senior note, Reg S, 3.875%, 02/28/17 DNK EUR 1,831, ,600,000 Achmea BV, sub. note, Reg S, 6.00% to 04/04/23, FRN thereafter, 04/04/43 NLD EUR 1,828, ,800,000 Lloyds Bank PLC, senior note, Reg S, 1.00%, 11/19/21 GBR EUR 1,823, ,600,000 Standard Chartered PLC, senior note, Reg S, 4.125%, 01/18/19 GBR EUR 1,818, ,700,000 HSBC France SA, senior note, Reg S, 1.875%, 01/16/20 FRA EUR 1,812, ,600,000 Aquarius and Investments PLC for Zurich Insurance Co. Ltd., secured bond, Reg S, 4.25% to 10/02/23, FRN thereafter, 10/02/43 CHE EUR 1,809, ,700,000 Compass Group PLC, senior note, Reg S, 1.875%, 01/27/23 GBR EUR 1,804, ,500,000 Telstra Corp. Ltd., senior note, Reg S, 3.75%, 05/16/22 AUS EUR 1,802, ,600,000 Gas Natural Fenosa Finance BV, senior note, Reg S, 2.875%, 03/11/24 ESP EUR 1,802, ,500,000 Aviva PLC, sub. bond, Reg S, 6.125% to 07/05/23, FRN thereafter, 07/05/43 GBR EUR 1,794, ,600,000 Societe Generale SA, sub. note, Reg S, 4.00%, 06/07/23 FRA EUR 1,780, ,600,000 Bacardi Ltd., senior note, Reg S, 2.75%, 07/03/23 BMU EUR 1,768, ,600,000 Madrilena Red de Gas Finance BV, senior note, Reg S, 3.779%, 09/11/18 ESP EUR 1,767, ,700,000 UniCredit SpA, senior note, Reg S, 2.25%, 12/16/16 ITA EUR 1,749, ,500,000 RWE Finance BV, senior bond, Reg S, 3.00%, 01/17/24 DEU EUR 1,740, ,600,000 Transurban Finance Co., senior secured note, Reg S, 2.50%, 10/08/20 AUS EUR 1,736, ,600,000 Telefonica Emisiones SAU, senior bond, Reg S, 2.932%, 10/17/29 ESP EUR 1,734, ,500,000 WPP Finance 2013, senior note, Reg S, 3.00%, 11/20/23 GBR EUR 1,723, ,700,000 BNP Paribas SA, sub. bond, Reg S, 2.625% to 10/14/22, FRN thereafter, 10/14/27 FRA EUR 1,714, ,500,000 AXA SA, sub. bond, Reg S, 5.25% to 04/16/20, FRN thereafter, 04/16/40 FRA EUR 1,708, ,600,000 Pfizer Inc., senior note, Reg S, 4.75%, 06/03/16 USA EUR 1,703, ,500,000 Aeroporti Di Roma SpA, senior note, Reg S, 3.25%, 02/20/21 ITA EUR 1,684, ,600,000 Yorkshire Building Society, senior note, Reg S, 2.125%, 03/18/19 GBR EUR 1,676, ,400,000 Koninklijke KPN NV, senior note, Reg S, 4.25%, 03/01/22 NLD EUR 1,672, ,600,000 Carlsberg Breweries A/S, senior note, Reg S, 2.50%, 05/28/24 DNK EUR 1,659, ,600,000 Klepierre, senior note, Reg S, 1.75%, 11/06/24 FRA EUR 1,639, ,600,000 Casino Guichard Perrachon SA, senior bond, Reg S, 2.33%, 02/07/25 FRA EUR 1,634, ,600,000 WM Morrison Supermarkets PLC, senior note, Reg S, 2.25%, 06/19/20 GBR EUR 1,628, ,400,000 Orange SA, senior bond, Reg S, 3.125%, 01/09/24 FRA EUR 1,623, ,600,000 KBC Groep NV, sub. note, Reg S, 2.375% to 11/25/19, FRN thereafter, 11/25/24 BEL EUR 1,618, ,400,000 ING Bank NV, sub. bond, Reg S, 6.125% to 05/29/18, FRN thereafter, 05/29/23 NLD EUR 1,604, ,500,000 Korea Gas Corp., senior note, Reg S, 2.375%, 04/15/19 KOR EUR 1,603, ,300,000 Barclays Bank PLC, senior sub. note, Reg S, 6.00%, 01/14/21 GBR EUR 1,597, ,500,000 Bharti Airtel International Netherlands BV, senior note, Reg S, 3.375%, 05/20/21 IND EUR 1,593, ,200,000 ABN Amro Bank NV, sub. note, Reg S, 7.125%, 07/06/22 NLD EUR 1,587, ,500,000 Pernod Ricard SA, senior note, Reg S, 2.00%, 06/22/20 FRA EUR 1,585, ,400,000 Intesa Sanpaolo SpA, senior note, 4.00%, 11/08/18 ITA EUR 1,557, ,400,000 EDF SA, senior sub. bond, Reg S, 5.00% to 01/22/26, FRN thereafter, Perpetual FRA EUR 1,553, ,400,000 Edison SpA, senior note, Reg S, 3.875%, 11/10/17 ITA EUR 1,532, ,600,000 Tesco Corporate Treasury Services PLC, senior note, Reg S, 2.50%, 07/01/24 GBR EUR 1,485, ,300,000 Motability Operations Group PLC, senior note, Reg S, 3.75%, 11/29/17 GBR EUR 1,424, ,200,000 CaixaBank, secured note, 2.625%, 03/21/24 ESP EUR 1,361, ,400,000 Areva SA, senior note, Reg S, 3.125%, 03/20/23 FRA EUR 1,353, ,300,000 Turkiye Vakiflar Bankasi Tao, senior note, Reg S, 3.50%, 06/17/19 TUR EUR 1,312, ,200,000 SPP-Distribucia AS, senior note, Reg S, 2.625%, 06/23/21 SSS EUR 1,264, ,100,000 Davide Campari-Milano SpA, senior note, Reg S, 4.50%, 10/25/19 ITA EUR 1,239, ,000,000 Unione di Banche Italiane SCpA, secured note, Reg S, 3.125%, 10/14/20 ITA EUR 1,142, ,000,000 Banco Popular Espanol SA, secured note, Reg S, 2.125%, 10/08/19 ESP EUR 1,064, ,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 1,038, ,000,000 Veolia Environnement SA, junior sub. note, Reg S, 4.45% to 04/16/18, FRN thereafter, Perpetual FRA EUR 1,033, ,000,000 Banco do Brasil SA, senior note, Reg S, 3.75%, 07/25/18 BRA EUR 1,006, ,000 Arkema, senior note, Reg S, 4.75% to 10/29/20, FRN thereafter, Perpetual FRA EUR 911, Unaudited Semi-Annual Report 171

174 Franklin European Corporate Bond Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Corporate Bonds (continued) 500,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.625%, 04/15/23 DEU EUR 544, ,000 Virgin Media Secured Finance PLC, senior secured note, Reg S, 5.50%, 01/15/25 GBR GBP 534, ,000 U.S. Coatings Acquisition Inc./Flash Dutch 2 BV, secured note, Reg S, 5.75%, 02/01/21 USA EUR 528, ,000 Avis Budget Finance PLC, senior note, Reg S, 6.00%, 03/01/21 USA EUR 526, ,000 UPCB Finance II Ltd., senior secured note, Reg S, 6.375%, 07/01/20 NLD EUR 526, ,000 Jarden Corp., senior note, Reg S, 3.75%, 10/01/21 USA EUR 524, ,000 Chesapeake Energy Corp., senior bond, 6.25%, 01/15/17 USA EUR 523, ,000 Celanese US Holdings LLC, senior note, 3.25%, 10/15/19 USA EUR 518, ,400 WMG Acquisition Corp., senior secured note, first lien, Reg S, 6.25%, 01/15/21 USA EUR 512, ,000 Ineos Finance PLC, first lien, senior secured note, Reg S, FRN, 7.25%, 02/15/19 GBR EUR 511, ,000 Hertz Holdgs Netherlands BV, senior note, Reg S, 4.375%, 01/15/19 USA EUR 500, ,000 Wind Acquisition Finance SA, senior secured note, Reg S, 4.00%, 07/15/20 ITA EUR 492, ,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 473, ,000 CNH Industrial Finance Europe SA, senior note, Reg S, 6.25%, 03/09/18 GBR EUR 448, ,000 Play Finance 2 SA, secured note, first lien, Reg S, 5.25%, 02/01/19 LUX EUR 415, ,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, Reg S, 8.50%, 01/15/21 USA EUR 414, ,000 General Motors Financial International BV, senior note, Reg S, 1.875%, 10/15/19 USA EUR 407, ,000 CGG SA, senior note, Reg S, 5.875%, 05/15/20 FRA EUR 349, ,000 Greif Luxembourg Finance SCA, senior note, Reg S, 7.375%, 07/15/21 USA EUR 118, ,106, Securities Maturing Within One Year 1,300,000 Statoil ASA, senior note, Reg S, 4.375%, 03/11/15 NOR EUR 1,309, ,000 GMAC International Finance BV, senior bond, Reg S, 7.50%, 04/21/15 USA EUR 203, ,513, TOTAL BONDS 124,619, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 124,619, TOTAL INVESTMENTS 124,619, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

175 Franklin European Dividend Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 229,977 BAE Systems PLC GBR GBP 1,398, Air Freight & Logistics 81,082 bpost SA BEL EUR 1,685, Banks 222,562 Standard Chartered PLC GBR GBP 2,760, ,330 KBC GROEP NV BEL EUR 2,433, ,471 HSBC Holdings PLC GBR GBP 1,775, ,638 Swedbank AB, A SWE SEK 1,774, ,743, Capital s 104,943 Banca Generali ITA EUR 2,418, ,987 Ashmore Group PLC GBR GBP 2,376, ,795, Chemicals 21,044 BASF SE DEU EUR 1,470, ,233 Tikkurila Oy FIN EUR 814, ,285, Commercial Services & Supplies 180,926 De La Rue PLC GBR GBP 1,213, Construction & Engineering 23,940 Vinci SA FRA EUR 1,089, ,219 Veidekke ASA NOR NOK 1,046, ,135, Construction Materials 47,784 CRH PLC IRL EUR 950, Diversified Financial Services 135,677 IG Group Holdings PLC GBR GBP 1,256, Diversified Telecommunication Services 326,491 TDC AS DNK DKK 2,070, ,081 Deutsche Telekom AG DEU EUR 2,001, ,872 Vivendi SA FRA EUR 1,073, ,145, Electric Utilities 48,137 SSE PLC GBR GBP 1,005, Energy Equipment & Services 55,761 TGS Nopec Geophysical Co. ASA NOR NOK 997, Gas Utilities 333,988 Snam SpA ITA EUR 1,369, Household Durables 52,938 The Berkeley Group Holdings PLC GBR GBP 1,691, Insurance 11,757 Zurich Insurance Group AG CHE CHF 3,046, ,369 Allianz SE DEU EUR 2,248, ,728 Euler Hermes Group FRA EUR 1,603, ,080 Corporacion Mapfre SA ESP EUR 1,505, ,775 Hiscox Ltd. GBR GBP 1,139, ,543, Inter & Catalog Retail 105,489 Takkt AG DEU EUR 1,435, Media 410,340 ITE Group PLC GBR GBP 845, Metals & Mining 56,656 Rio Tinto PLC GBR GBP 2,189, Multi-Utilities 158,504 National Grid PLC GBR GBP 1,874, ,434 GDF Suez FRA EUR 1,737, ,768 Centrica PLC GBR GBP 1,656, ,268, Oil, Gas & Consumable Fuels 77,002 Total SA, B FRA EUR 3,274, ,493 BP PLC GBR GBP 3,216, ,331 Eni SpA ITA EUR 2,065, ,555, Unaudited Semi-Annual Report 173

176 Franklin European Dividend Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Pharmaceuticals 43,448 Sanofi FRA EUR 3,287, ,365 GlaxoSmithKline PLC GBR GBP 1,867, ,154, Tobacco 71,859 British American Tobacco PLC GBR GBP 3,239, Transportation Infrastructure 64,336 Atlantia SpA ITA EUR 1,243, Wireless Telecommunication Services 548,170 Vodafone Group PLC GBR GBP 1,572, TOTAL SHARES 73,722, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 73,722, TOTAL INVESTMENTS 73,722, Unaudited Semi-Annual Report

177 Franklin European Growth Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 2,741,695 bpost SA BEL EUR 56,986, Beverages 16,553,021 C&C Group PLC IRL EUR 59,921, ,283 Anheuser-Busch InBev NV BEL EUR 54,746, ,668, Capital s 2,813,835 Banca Generali ITA EUR 64,858, ,715,297 Ashmore Group PLC GBR GBP 56,683, ,542, Commercial Services & Supplies 8,198,859 De La Rue PLC GBR GBP 54,973, ,180 Berendsen PLC GBR GBP 4,522, ,496, Construction & Engineering 11,180,156 Outotec OYJ FIN EUR 49,036, ,296 Koninklijke Boskalis Westminster NV NLD EUR 39,009, ,045, Consumer Finance 11,204,516 International Personal Finance PLC GBR GBP 64,892, Electrical Equipment 4,728,112 Prysmian SpA ITA EUR 71,630, ,461,202 Legrand SA FRA EUR 63,628, ,258, Energy Equipment & Services 2,090,246 TGS Nopec Geophysical Co. ASA NOR NOK 37,388, Household Durables 1,714,890 The Berkeley Group Holdings PLC GBR GBP 54,785, Household Products 441,839 Reckitt Benckiser Group PLC GBR GBP 29,653, Independent Power and Renewable Electricity Producers 8,879,623 Drax Group PLC GBR GBP 52,686, Insurance 909,666 Euler Hermes Group FRA EUR 77,903, Inter & Catalog Retail 3,671,397 Takkt AG DEU EUR 49,967, Machinery 2,144,783 IMI PLC GBR GBP 34,895, Media 5,981,155 Mediaset Espana Comunicacion SA ESP EUR 62,473, ,836,918 Reed Elsevier NV GBR EUR 56,284, ,472,731 GFK AG DEU EUR 50,065, ,554,985 ITE Group PLC GBR GBP 36,182, ,005, Pharmaceuticals 799,186 Sanofi FRA EUR 60,466, ,569 Roche Holding AG CHE CHF 13,813, ,279, Professional Services 2,911,270 Experian PLC GBR GBP 40,802, Technology Hardware, Storage & Peripherals 398,699 Neopost SA FRA EUR 18,796, Tobacco 1,014,768 Imperial Tobacco Group PLC GBR GBP 37,072, TOTAL SHARES 1,354,128, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,354,128, TOTAL INVESTMENTS 1,354,128, Unaudited Semi-Annual Report 175

178 Franklin European Income Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Discretionary 4,399 Eutelsat Communications FRA EUR 117, ,642 The Berkeley Group Holdings PLC GBR GBP 116, ,404 ITE Group PLC GBR GBP 81, , Consumer Staples 1,785 Anheuser-Busch InBev NV BEL EUR 167, ,666 British American Tobacco PLC GBR GBP 165, , Energy 7,292 Royal Dutch Shell PLC, A GBR EUR 201, ,122 Total SA, B FRA EUR 132, ,236 Eni SpA ITA EUR 90, , Financials 1,149 Allianz SE DEU EUR 157, ,231 KBC GROEP NV BEL EUR 150, ,705 Euler Hermes Group FRA EUR 146, ,259 Banca Generali ITA EUR 144, ,973 Standard Chartered PLC GBR GBP 136, ,739 IG Group Holdings PLC GBR GBP 127, Partners Group Holding AG CHE CHF 123, ,930 Swedbank AB, A SWE SEK 122, ,935 Corporacion Mapfre SA ESP EUR 109, ,957 Ashmore Group PLC GBR GBP 104, Zurich Insurance Group AG CHE CHF 104, ,426, Health Care 2,615 Novartis AG CHE CHF 200, ,811 Sanofi FRA EUR 137, ,412 GlaxoSmithKline PLC GBR GBP 131, , Industrials 8,782 IMI PLC GBR GBP 142, ,812 Vinci SA FRA EUR 127, ,159 Atlantia SpA ITA EUR 119, ,838 Prysmian SpA ITA EUR 118, ,032 Veidekke ASA NOR NOK 114, ,264 bpost SA BEL EUR 109, ,489 De La Rue PLC GBR GBP 70, , Materials 1,710 BASF SE DEU EUR 119, ,775 Rio Tinto PLC GBR GBP 107, ,006 Glencore PLC CHE GBP 96, ,727 CRH PLC IRL EUR 94, ,775 Tikkurila Oy FIN EUR 69, , Telecommunication Services 10,803 Deutsche Telekom AG DEU EUR 143, Utilities 11,880 National Grid PLC GBR GBP 140, ,193 SSE PLC GBR GBP 129, ,484 Centrica PLC GBR GBP 116, ,921 Snam SpA ITA EUR 114, , TOTAL SHARES 4,902, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 4,902, Unaudited Semi-Annual Report

179 Franklin European Income Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 100,000 Aviva PLC, sub. bond, Reg S, 6.125% to 07/05/23, FRN thereafter, 07/05/43 GBR EUR 119, ,000 ABB Finance BV, senior note, Reg S, 2.625%, 03/26/19 CHE EUR 109, ,000 GE Capital European Funding, senior note, Reg S, 2.25%, 07/20/20 USA EUR 109, ,000 Lloyds Bank PLC, senior note, Reg S, 1.875%, 10/10/18 GBR EUR 105, ,000 WM Morrison Supermarkets PLC, senior note, Reg S, 2.25%, 06/19/20 GBR EUR 101, ,000 Telefonica Participaciones SAU, cvt., senior sub. note, Reg S, 4.90%, 09/25/17 ESP EUR 100, , Government and Municipal Bonds 250,000 Italy Treasury Bond, senior bond, 5.50%, 09/01/22 ITA EUR 320, ,000 Government of Spain, senior bond, 4.00%, 04/30/20 ESP EUR 290, ,000 Government of the Netherlands, Reg S, 1.75%, 07/15/23 NLD EUR 275, ,000 Government of Poland, 5.75%, 04/25/29 POL PLN 222, ,000 Italy Treasury Bond, senior bond, Reg S, 4.75%, 09/01/44 ITA EUR 194, ,000 Government of Spain, 5.75%, 07/30/32 ESP EUR 147, ,000 Government of Finland, Reg S, 0.375%, 09/15/20 FIN EUR 141, ,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 125, ,000 Government of Lithuania, senior note, Reg S, 3.375%, 01/22/24 LTU EUR 115, ,000 Government of Finland, senior bond, Reg S, 2.00%, 04/15/24 FIN EUR 112, ,000 KFW, senior note, 3.125%, 06/15/18 DEU EUR 110, ,000 Government of Latvia, Reg S, 2.625%, 01/21/21 LVA EUR 108, ,000 Government of Bulgaria, Reg S, 2.95%, 09/03/24 BGR EUR 100, ,264, TOTAL BONDS 2,910, INVESTMENTS FUNDS Financials 14,379 FTIF Franklin Euro High Yield Fund, Class I LUX EUR 264, TOTAL INVESTMENTS FUNDS 264, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 3,175, TOTAL INVESTMENTS 8,077, Unaudited Semi-Annual Report 177

180 Franklin European Small-Mid Cap Growth Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 5,238,000 TNT Express NV NLD EUR 29,023, Beverages 6,732,926 C&C Group PLC IRL EUR 24,373, Building Products 2,225,101 Uponor OYJ FIN EUR 25,566, Capital s 5,084,419 RHJ International BEL EUR 23,439, ,446,000 ABG Sundal Collier Holding ASA NOR NOK 16,871, ,310, Chemicals 5,465,056 Alent PLC GBR GBP 22,598, Commercial Services & Supplies 1,099,500 ISS A/S DNK DKK 26,293, Construction & Engineering 1,348,160 Keller Group PLC GBR GBP 15,282, ,534,750 Morgan Sindall PLC GBR GBP 12,257, ,540, Distributors 3,353,600 Headlam Group PLC GBR GBP 19,008, Diversified Financial Services 466,600 Deutsche Boerse AG DEU EUR 27,632, ,000 Kennedy Wilson Europe Real Estate PLC GBR GBP 8,154, ,756 Hellenic Exchanges Athens Stock Exchange SA Holdings GRC EUR 3,081, ,868, Electrical Equipment 1,883,300 Prysmian SpA ITA EUR 28,531, Food & Staples Retailing 977,181 Sligro Food Group NV NLD EUR 30,536, Household Products 3,164,889 McBride PLC GBR GBP 3,261, Insurance 333,798 Euler Hermes Group FRA EUR 28,586, IT Services 4,627,475 Optimal Payments PLC IOM GBP 20,431, ,050,819 Sesa SpA ITA EUR 13,650, ,081, Leisure Products 1,336,623 Beeau FRA EUR 15,518, Machinery 4,369,900 Vesuvius PLC GBR GBP 25,117, ,577,371 Zardoya Otis SA ESP EUR 14,511, ,629, Marine 6,759,420 Irish Continental Group PLC IRL EUR 21,968, Professional Services 5,846,640 Michael Page International PLC GBR GBP 31,022, ,219,700 Sthree PLC GBR GBP 16,042, ,064, Real Estate Investment Trusts (REITs) 22,551,802 Green REIT PLC IRL EUR 28,866, ,137,598 Lar Espana Real Estate Socimi SA ESP EUR 28,790, ,656, Real Estate Management & Development 5,195,000 wide PLC GBR GBP 29,217, Specialty Retail 2,408,667 Carpetright PLC GBR GBP 12,426, Companies & Distributors 3,898,771 Grafton Group PLC IRL GBP 32,042, TOTAL SHARES 634,105, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 634,105, TOTAL INVESTMENTS 634,105, Unaudited Semi-Annual Report

181 Franklin European Total Return Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 4,500,000 Propertize BV, senior note, 0.50%, 02/27/17 NLD EUR 4,543, ,000,000 GE Capital European Funding, senior note, Reg S, 2.25%, 07/20/20 USA EUR 3,274, ,000,000 AXA SA, sub. bond, Reg S, 5.25% to 04/16/20, FRN thereafter, 04/16/40 FRA EUR 2,278, ,000,000 HSBC Holdings PLC, sub. bond, Reg S, 3.375% to 01/10/19, FRN thereafter, 01/10/24 GBR EUR 2,127, ,700,000 Telstra Corp. Ltd., senior note, Reg S, 3.75%, 05/16/22 AUS EUR 2,042, ,700,000 The Goldman Sachs Group Inc., senior note, Reg S, 6.375%, 05/02/18 USA EUR 2,018, ,700,000 Allianz SE, sub. note, Reg S, 4.75% to 10/24/23, FRN thereafter, Perpetual DEU EUR 1,897, ,700,000 Bacardi Ltd., senior note, Reg S, 2.75%, 07/03/23 BMU EUR 1,879, ,700,000 Madrilena Red de Gas Finance BV, senior note, Reg S, 3.779%, 09/11/18 ESP EUR 1,877, ,400,000 ABN Amro Bank NV, sub. note, Reg S, 7.125%, 07/06/22 NLD EUR 1,852, ,700,000 Yorkshire Building Society, senior note, Reg S, 2.125%, 03/18/19 GBR EUR 1,780, ,700,000 WM Morrison Supermarkets PLC, senior note, Reg S, 2.25%, 06/19/20 GBR EUR 1,730, ,500,000 Achmea BV, sub. note, Reg S, 6.00% to 04/04/23, FRN thereafter, 04/04/43 NLD EUR 1,714, ,600,000 Intesa Sanpaolo SpA, senior note, Reg S, 4.125%, 01/14/16 ITA EUR 1,657, ,500,000 Motability Operations Group PLC, senior note, Reg S, 3.75%, 11/29/17 GBR EUR 1,643, ,500,000 Syngenta Finance NV, senior note, Reg S, 1.875%, 11/02/21 CHE EUR 1,605, ,500,000 Korea Gas Corp., senior note, Reg S, 2.375%, 04/15/19 KOR EUR 1,603, ,500,000 SPP-Distribucia AS, senior note, Reg S, 2.625%, 06/23/21 SSS EUR 1,580, ,200,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 1,385, ,200,000 Wind Acquisition Finance SA, senior secured note, Reg S, 4.00%, 07/15/20 ITA EUR 1,182, ,000 Moy Park Bondco PLC, senior note, Reg S, 6.25%, 05/29/21 GBR GBP 1,123, ,000,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.75%, 01/15/23 DEU EUR 1,087, ,000,000 Fiat Chrysler Finance Europe, senior note, Reg S, 4.75%, 03/22/21 GBR EUR 1,069, ,000 Pendragon PLC, secured note, Reg S, 6.875%, 05/01/20 GBR GBP 1,068, ,000,000 Play Finance 2 SA, secured note, first lien, Reg S, 5.25%, 02/01/19 LUX EUR 1,038, ,000,000 Veolia Environnement SA, junior sub. note, Reg S, 4.45% to 04/16/18, FRN thereafter, Perpetual FRA EUR 1,033, ,000,000 Arkema, senior note, Reg S, 4.75% to 10/29/20, FRN thereafter, Perpetual FRA EUR 1,013, ,000,000 Hertz Holdgs Netherlands BV, senior note, Reg S, 4.375%, 01/15/19 USA EUR 1,001, ,000,000 Kedrion SpA, senior note, Reg S, 4.625%, 04/24/19 ITA EUR 985, ,000,000 Abengoa Finance SAU, senior note, Reg S, 8.875%, 02/05/18 ESP EUR 963, ,000 Ence Energia y Celulosa SA, secured note, Reg S, 7.25%, 02/15/20 ESP EUR 945, ,500 WMG Acquisition Corp., senior secured note, first lien, Reg S, 6.25%, 01/15/21 USA EUR 935, ,000 Rhino Bondco SpA, senior secured note, Reg S, 7.25%, 11/15/20 ITA EUR 922, ,000 Algeco Scotsman Global Finance PLC, secured note, Reg S, 9.00%, 10/15/18 GBR EUR 915, ,000 Galapagos SA, senior secured note, Reg S, 5.375%, 06/15/21 DEU EUR 896, ,000,000 Grupo Isolux Corsan Finance BV, senior note, Reg S, 6.625%, 04/15/21 ESP EUR 872, ,000 La Financiere Atalian SA, senior note, Reg S, 7.25%, 01/15/20 FRA EUR 850, ,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, Reg S, 8.50%, 01/15/21 USA EUR 828, ,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 725, ,951, Government and Municipal Bonds 13,200,000 Government of Finland, Reg S, 0.375%, 09/15/20 FIN EUR 13,333, ,000,000 Italy Treasury Bond, senior bond, 5.50%, 09/01/22 ITA EUR 12,839, ,000,000 Government of Spain, senior bond, 4.00%, 04/30/20 ESP EUR 12,766, ,800,000 Italy Treasury Bond, senior bond, Reg S, 4.75%, 09/01/44 ITA EUR 11,410, ,500,000 Italy Treasury Bond, senior bond, Reg S, 4.75%, 09/01/28 ITA EUR 10,758, ,500,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 10,643, ,500,000 Italy Treasury Bond, Reg S, 3.50%, 03/01/30 ITA EUR 10,623, ,000,000 Government of Spain, 5.75%, 07/30/32 ESP EUR 10,316, ,500,000 Government of the Netherlands, Reg S, 1.25%, 01/15/19 NLD EUR 9,972, ,000,000 Government of the Netherlands, 0.25%, 01/15/20 NLD EUR 9,075, ,000,000 Government of Finland, senior bond, Reg S, 2.00%, 04/15/24 FIN EUR 6,733, ,000,000 Government of Poland, 5.75%, 04/25/29 POL PLN 6,674, ,000,000 Government of the Netherlands, Reg S, 1.75%, 07/15/23 NLD EUR 6,608, ,000,000 Government of Poland, 3.25%, 07/25/25 POL PLN 6,483, ,800,000 Government of Lithuania, senior note, Reg S, 3.375%, 01/22/24 LTU EUR 5,540, ,500,000 Government of Bulgaria, Reg S, 2.95%, 09/03/24 BGR EUR 5,526, ,000,000 Government of Latvia, Reg S, 2.625%, 01/21/21 LVA EUR 5,429, ,000,000 Government of Ireland, Reg S, 3.90%, 03/20/23 IRL EUR 3,664, ,900,000 Government of Mexico, senior note, 2.75%, 04/22/23 MEX EUR 1,982, ,000 Government of Spain, senior note, Reg S, 5.15%, 10/31/28 ESP EUR 738, ,124, Securities Maturing Within One Year 6,000,000 European Financial Stability Facility, Reg S, 0.08%, 07/15/15 SP EUR 6,002, TOTAL BONDS 225,078, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 225,078, TOTAL INVESTMENTS 225,078, Unaudited Semi-Annual Report 179

182 Franklin GCC Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 660,000 Waha Aerospace BV, senior bond, Reg S, 3.925%, 07/28/20 ARE USD 694, ,867 Nakilat Inc., second lien, Reg S, 6.267%, 12/31/33 QAT USD 508, ,000 Emirates Airline., senior bond, Reg S, 4.50%, 02/06/25 ARE USD 403, ,116 Medjool Ltd., senior note, Reg S, 3.875%, 03/19/23 ARE USD 322, ,000 Ruwais Power Co. PJSC, Reg S, 6.00%, 08/31/36 ARE USD 289, ,850 Ras Laffan Liquefied Natural Gas Co. Ltd. II, secured note, Reg S, 5.298%, 09/30/20 QAT USD 166, ,384, Corporate Bonds 920,000 Burgan Tier 1 Financing, junior sub. bond, 7.25%, Perpetual KWD USD 910, ,000 United Gulf Bank BSC, sub. note, FRN, 2.929%, 10/13/16 BHN USD 672, ,000 DP World Ltd., cvt., senior note, Reg S, 1.75%, 06/19/24 ARE USD 640, ,000 Emirates NBD Tier 1 Ltd., junior sub. bond, Reg S, 5.75% to 05/30/19, FRN thereafter, Perpetual ARE USD 639, ,950,000 Anka a Sukuk Ltd., Reg S, 10.00%, 08/25/16 ARE AED 585, ,000 GEMS MEA Sukuk Ltd., junior sub. note, Reg S, 12.00% to 11/21/18, FRN thereafter, Perpetual ARE USD 575, ,000 Alternatifbank AS, senior note, Reg S, 3.125%, 07/22/19 TUR USD 548, ,000 Banque Marocaine du Commerce Exterieur, senior note, Reg S, 6.25%, 11/27/18 MAR USD 513, ,000 AKCB Finance Ltd., senior note, Reg S, 3.25%, 10/22/18 QAT USD 507, ,000 Emirates NBD PJSC, senior note, Reg S, 3.25%, 11/19/19 ARE USD 502, ,000 Mubadala GE Capital Ltd., senior note, 144A, 3.00%, 11/10/19 ARE USD 496, ,000 Kuwait Energy PLC, senior note, Reg S, 9.50%, 08/04/19 KWD USD 445, ,000 Emirates NBD PJSC, sub. note, Reg S, FRN, 3.734%, 11/27/23 ARE USD 420, ,000 Kuwait Projects Co., senior note, 9.375%, 07/15/20 KWD USD 377, ,000 National Bank of Oman Ltd., senior note, Reg S, 3.125%, 10/07/19 OMN USD 364, ,000 QNB Finance Ltd., senior note, Reg S, 2.75%, 10/31/18 QAT USD 350, ,000 MAF Global Securities Ltd., sub. bond, Reg S, 7.125% to 10/29/18, FRN thereafter, Perpetual ARE USD 325, ,000 MAF Global Securities Ltd., senior note, Reg S, 4.75%, 05/07/24 ARE USD 306, ,000 RAKFUNDING Cayman Ltd., senior note, Reg S, 3.25%, 06/24/19 ARE USD 303, ,000 Qtel International Finance Ltd., senior note, Reg S, 5.00%, 10/19/25 QAT USD 270, ,000 OCP SA, senior note, Reg S, 5.625%, 04/25/24 MAR USD 262, ,000 KT Sukuk Varlk Kiralama AS, Reg S, 5.875%, 10/31/16 TUR USD 262, ,000 ICD Funding Ltd., senior note, Reg S, 4.625%, 05/21/24 ARE USD 249, ,000 Dubai Holding Commercial Operations Group, senior note, 6.00%, 02/01/17 ARE GBP 238, ,000 DP World Ltd., Reg S, 6.85%, 07/02/37 ARE USD 226, ,000 Saudi Electricity Global Sukuk Co. 2, senior note, Reg S, 5.06%, 04/08/43 SAU USD 203, ,000 Sabic Capital II BV, senior note, Reg S, 2.625%, 10/03/18 SAU USD 201, ,000 DIB Tier 1 Sukuk Ltd., sub. note, Reg S, 6.25% to 03/20/19, FRN thereafter, Perpetual ARE USD 200, ,000 ADCB Finance Cayman Ltd., sub. note, Reg S, 3.125% to 05/28/18, FRN thereafter, 05/28/23 ARE USD 196, ,000 Dar Al-Arkan Sukuk Co. Ltd., senior note, Reg S, 5.75%, 05/17/18 SAU USD 196, ,000 ICD Sukuk Co. Ltd., senior note, Reg S, 3.508%, 05/21/20 ARE USD 196, ,000 Qtel International Finance Ltd., senior note, Reg S, 3.25%, 02/21/23 QAT USD 193, ,000 Genel Energy Finance PLC, senior note, 7.50%, 05/14/19 GBR USD 169, ,556, Government and Municipal Bonds 500,000 Government of Qatar, senior note, Reg S, 5.75%, 01/20/42 QAT USD 592, ,000 Government of Bahrain, Reg S, 6.00%, 09/19/44 BHN USD 480, ,000 Government of Bahrain, senior note, Reg S, 6.125%, 08/01/23 BHN USD 330, ,000 Shariah Government Sukuk, senior note, Reg S, 3.764%, 09/17/24 ARE USD 310, ,000 Government of Qatar, senior bond, Reg S, 6.40%, 01/20/40 QAT USD 254, ,968, Securities Maturing Within One Year 600,000 Dar Al-Arkan International Sukuk Co. II, senior note, Reg S, 10.75%, 02/18/15 SAU USD 605, ,000 BBK BSC, senior note, Reg S, 4.50%, 10/28/15 BHN USD 204, , TOTAL BONDS 17,719, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 17,719, TOTAL INVESTMENTS 17,719, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

183 Franklin Global Aggregate Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 725,000 FNMA, 4.00%, 01/01/41 USA USD 773, ,000 FNMA, 3.00%, 01/01/30 USA USD 545, ,000 FHLMC, 3.50%, 01/01/42 USA USD 109, ,428, Corporate Bonds 200,000 Svenska Handelsbanken AB, senior note, Reg S, 4.00%, 01/18/19 SWE GBP 341, ,000 Danske Bank AS, senior note, 144A, 3.875%, 04/14/16 DNK USD 206, ,000 Saudi Electricity Global Sukuk Co. 2, 144A, 5.06%, 04/08/43 SAU USD 203, ,000 Royal Bank of Scotland Group PLC, senior note, 1.875%, 03/31/17 GBR USD 199, ,000 The Goldman Sachs Group Inc., senior note, 5.75%, 01/24/22 USA USD 173, ,000 Wal-Mart Stores Inc., senior note, 1.95%, 12/15/18 USA USD 162, ,000 Royal Bank of Canada, senior note, 1.20%, 01/23/17 CAN USD 154, ,000 Sysco Corp., senior note, 3.50%, 10/02/24 USA USD 154, ,000 JPMorgan Chase & Co., senior note, 3.45%, 03/01/16 USA USD 143, ,000 Merrill Lynch & Co. Inc., senior note, 6.875%, 04/25/18 USA USD 132, ,000 Comcast Corp., senior note, 6.30%, 11/15/17 USA USD 130, ,000 Verizon Communications Inc., senior note, 5.15%, 09/15/23 USA USD 127, ,000 Simon Property Group LP, senior bond, 3.375%, 10/01/24 USA USD 122, ,000 News America Inc., 6.40%, 12/15/35 USA USD 117, ,000 Heathrow Funding Ltd., senior secured bond, 144A, 4.875%, 07/15/23 GBR USD 111, ,000 Aflac Inc., senior bond, 3.625%, 11/15/24 USA USD 107, ,000 Ally Financial Inc., senior note, 4.75%, 09/10/18 USA USD 103, ,000 WPP Finance 2010, senior note, 3.75%, 09/19/24 GBR USD 100, ,000 Sprint Corp., senior note, 7.25%, 09/15/21 USA USD 99, ,000 General Motors Co., senior bond, 4.875%, 10/02/23 USA USD 91, ,000 Gilead Sciences Inc., senior bond, 3.50%, 02/01/25 USA USD 87, ,000 Bank of Montreal, senior note, 1.45%, 04/09/18 CAN USD 79, ,000 Citigroup Inc., senior note, 8.125%, 07/15/39 USA USD 76, ,000 Hewlett-Packard Co., 2.60%, 09/15/17 USA USD 76, ,000 Mitsui Sumitomo Insurance Co. Ltd., junior sub. note, 144A, 7.00% to 03/15/22, FRN thereafter, 03/15/72 JPN USD 63, ,000 Toll Brothers Finance Corp., senior bond, 4.375%, 04/15/23 USA USD 59, ,000 Navient Corp., senior note, 4.875%, 06/17/19 USA USD 55, ,000 Bank of America Corp., 3.875%, 03/22/17 USA USD 52, ,000 CIT Group Inc., senior bond, 5.00%, 08/01/23 USA USD 51, ,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 47, ,000 Chesapeake Energy Corp., senior note, 6.125%, 02/15/21 USA USD 31, ,000 Aviation Capital Group Corp., 144A, 6.75%, 04/06/21 USA USD 22, ,000 Calpine Corp., senior secured bond, 144A, 7.875%, 01/15/23 USA USD 22, ,710, Government and Municipal Bonds 1,000,000 Government of Germany, 1.50%, 02/15/23 DEU EUR 1,325, ,000 Italy Treasury Bond, senior bond, 5.50%, 09/01/22 ITA EUR 776, ,000 Government of Mexico, 8.00%, 12/07/23 MEX MXN 704, ,000 Government of France, 2.25%, 05/25/24 FRA EUR 688, ,000,000 Development Bank of Japan, senior bond, 2.30%, 03/19/26 JPN JPY 610, ,000 Government of Canada, 2.75%, 06/01/22 CAN CAD 557, ,000 U.S. Treasury Note, 2.625%, 01/31/18 USA USD 522, ,000 Italy Treasury Bond, Reg S, 3.50%, 03/01/30 ITA EUR 520, ,000,000 Development Bank of Japan, 1.70%, 09/20/22 JPN JPY 465, ,000 U.S. Treasury Note, 0.50%, 06/15/16 USA USD 450, ,000 U.S. Treasury Note, 0.50%, 09/30/16 USA USD 424, ,100,000 Government of Poland, 5.75%, 04/25/29 POL PLN 423, ,000 FNMA, 1.75%, 09/12/19 USA USD 420, ,000 Queensland Treasury Corp., senior bond, Reg S, 5.75%, 07/22/24 AUS AUD 416, ,000 Queensland Treasury Corp., senior note, Reg S, 6.00%, 07/21/22 AUS AUD 415, ,300,000 Government of Poland, 3.25%, 07/25/25 POL PLN 392, ,000 U.S. Treasury Bond, 3.125%, 08/15/44 USA USD 333, ,010,000 Government of Poland, 4.00%, 10/25/23 POL PLN 321, ,000 Government of Hungary, senior note, 6.25%, 01/29/20 HUN USD 264, ,000 U.S. Treasury Bond, 4.50%, 08/15/39 USA USD 246, ,000 Government of Lithuania, senior note, 144A, 6.625%, 02/01/22 LTU USD 242, ,000 FNMA, 2.625%, 09/06/24 USA USD 212, ,000 Government of Qatar, senior note, Reg S, 3.125%, 01/20/17 QAT USD 208, ,000 International Bank for Reconstruction and Development, 0.75%, 12/15/16 SP USD 205, ,000 Inter-American Development Bank, 0.875%, 11/15/16 SP USD 200, ,000 Italy Treasury Bond, senior bond, Reg S, 4.75%, 09/01/28 ITA EUR 199, ,000 Government of Chile, senior bond, 3.125%, 03/27/25 CHL USD 194, ,865 U.S. Treasury Bond, Index Linked, 0.375%, 07/15/23 USA USD 192, ,000 United Kingdom Treasury Note, Reg S, 2.00%, 01/22/16 GBR GBP 158, ,000 Government of the Netherlands, Reg S, 4.50%, 07/15/17 NLD EUR 148, ,000 Government of Poland, senior note, 5.125%, 04/21/21 POL USD 135, ,000 U.S. Treasury Note, 2.625%, 11/15/20 USA USD 130, ,000 Florida Hurricane Catastrophe Fund Finance Corp. Revenue, Series A, 2.995%, 07/01/20 USA USD 121, Unaudited Semi-Annual Report 181

184 Franklin Global Aggregate Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 80,000 California State GO, Build America Bonds, 7.30%, 10/01/39 USA USD 117, ,000 Government of Spain, senior note, Reg S, 5.15%, 10/31/28 ESP EUR 113, ,000 Illinois State GO, 4.961%, 03/01/16 USA USD 78, ,000 Corp Andina De Fomento, 4.375%, 06/15/22 SP USD 75, ,000 JobsOhio Beverage System Statewide Liquor Profits Revenue, Series B, 4.532%, 01/01/35 USA USD 69, ,000 Chicago GO, Project, Series C1, 7.781%, 01/01/35 USA USD 65, ,000 Government of Peru, senior bond, 6.55%, 03/14/37 PER USD 65, ,000 Government of El Salvador, senior bond, Reg S, 7.65%, 06/15/35 SVC USD 64, ,000 Government of South Africa, 5.50%, 03/09/20 ZAF USD 60, ,000 Illinois State GO, 5.10%, 06/01/33 USA USD 29, ,000 San Diego County Water Authority Financing Agency Water Revenue, Build America Bonds, San Diego Water, Series B, 6.138%, 05/01/49 USA USD 27, ,397, Securities Maturing Within One Year 1,355,000 U.S. Treasury Bill, 0.00%, 01/29/15 USA USD 1,354, ,000 FHLB, 0.50%, 11/20/15 USA USD 500, ,000 United Kingdom Treasury Note, Reg S, 2.75%, 01/22/15 GBR GBP 390, ,000 Volkswagen International Finance, senior note, 144A, 1.15%, 11/20/15 DEU USD 231, ,000 The Export-Import Bank of Korea, senior note, 1.25%, 11/20/15 KOR USD 200, ,000 FHLB, 0.25%, 02/20/15 USA USD 150, ,000 Korea Hydro & Nuclear Power Co. Ltd., senior note, Reg S, 3.125%, 09/16/15 KOR USD 101, ,000 Hyundai Capital America, senior note, 144A, 1.625%, 10/02/15 KOR USD 60, ,989, TOTAL BONDS 21,526, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 21,526, TOTAL INVESTMENTS 21,526, Unaudited Semi-Annual Report

185 Franklin Global Aggregate Investment Grade Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 1,490,000 FNMA, 4.00%, 01/01/41 USA USD 1,590, ,100,000 FNMA, 3.00%, 01/01/30 USA USD 1,143, ,000 FHLMC, 3.50%, 01/01/42 USA USD 280, ,231 Granite Master Issuer PLC, , A3, FRN, 0.245%, 12/20/54 GBR USD 149, ,163, Corporate Bonds 580,000 Sydney Airport Finance Co. Pty. Ltd., 144A, 3.90%, 03/22/23 AUS USD 597, ,000 Wal-Mart Stores Inc., senior note, 1.95%, 12/15/18 USA USD 562, ,000 Sysco Corp., senior note, 3.50%, 10/02/24 USA USD 449, ,000 News America Inc., 6.40%, 12/15/35 USA USD 445, ,000 Aflac Inc., senior bond, 3.625%, 11/15/24 USA USD 403, ,000 Simon Property Group LP, senior bond, 3.375%, 10/01/24 USA USD 402, ,000 WPP Finance 2010, senior note, 3.75%, 09/19/24 GBR USD 398, ,000 JPMorgan Chase & Co., senior note, 4.25%, 10/15/20 USA USD 333, ,000 Bank of Montreal, senior note, 1.45%, 04/09/18 CAN USD 331, ,000 The Goldman Sachs Group Inc., senior note, 5.75%, 01/24/22 USA USD 329, ,000 Royal Bank of Canada, senior note, 1.20%, 01/23/17 CAN USD 329, ,000 Royal Bank of Scotland Group PLC, senior note, 1.875%, 03/31/17 GBR USD 329, ,000 Comcast Corp., senior note, 6.30%, 11/15/17 USA USD 328, ,000 JPMorgan Chase & Co., senior note, 3.45%, 03/01/16 USA USD 328, ,000 Merrill Lynch & Co. Inc., senior note, 6.875%, 04/25/18 USA USD 327, ,000 Verizon Communications Inc., senior note, 5.15%, 09/15/23 USA USD 325, ,000 Gilead Sciences Inc., senior bond, 3.50%, 02/01/25 USA USD 318, ,000 Citigroup Inc., senior note, 8.125%, 07/15/39 USA USD 215, ,000 Danske Bank AS, senior note, 144A, 3.875%, 04/14/16 DNK USD 206, ,000 UBS AG London, secured note, 144A, 2.25%, 03/30/17 CHE USD 204, ,000 Hewlett-Packard Co., 2.60%, 09/15/17 USA USD 61, ,231, Government and Municipal Bonds 1,650,000 United Kingdom Treasury Note, Reg S, 2.00%, 01/22/16 GBR GBP 2,614, ,300,000 Government of Germany, 1.50%, 02/15/23 DEU EUR 1,723, ,500,000 U.S. Treasury Bond, 3.125%, 08/15/44 USA USD 1,615, ,000,000 Italy Treasury Bond, senior bond, 5.50%, 09/01/22 ITA EUR 1,553, ,520,000 FNMA, 2.625%, 09/06/24 USA USD 1,541, ,000,000 Development Bank of Japan, senior bond, 2.30%, 03/19/26 JPN JPY 1,525, ,000 Government of Spain, senior note, Reg S, 5.15%, 10/31/28 ESP EUR 1,462, ,000 Government of Mexico, 8.00%, 12/07/23 MEX MXN 1,447, ,050,000 Italy Treasury Bond, Reg S, 3.50%, 03/01/30 ITA EUR 1,420, ,400,000 U.S. Treasury Note, 0.50%, 06/30/16 USA USD 1,400, ,200,000 Queensland Treasury Corp., senior note, Reg S, 6.00%, 07/21/22 AUS AUD 1,185, ,000,000 Government of Poland, 5.75%, 04/25/29 POL PLN 1,153, ,200,000 Government of Canada, 2.75%, 06/01/22 CAN CAD 1,115, ,100,000 Queensland Treasury Corp., senior bond, Reg S, 5.75%, 07/22/24 AUS AUD 1,091, ,500,000 Government of Poland, 3.25%, 07/25/25 POL PLN 1,056, ,000,000 U.S. Treasury Note, 1.375%, 09/30/18 USA USD 998, ,000,000 U.S. Treasury Note, 1.75%, 05/15/23 USA USD 973, ,000,000 Development Bank of Japan, 1.70%, 09/20/22 JPN JPY 931, ,000 Government of France, 2.25%, 05/25/24 FRA EUR 826, ,000 Inter-American Development Bank, 0.875%, 11/15/16 SP USD 752, ,000 International Bank for Reconstruction and Development, 0.75%, 12/15/16 SP USD 750, ,000,000 Development Bank of Japan, senior note, 1.75%, 03/17/17 JPN JPY 692, ,000 Government of the Netherlands, Reg S, 4.50%, 07/15/17 NLD EUR 674, ,000 Government of Chile, senior bond, 3.125%, 03/27/25 CHL USD 568, ,000 U.S. Treasury Note, FRN, 0.085%, 01/31/16 USA USD 499, ,238 U.S. Treasury Bond, Index Linked, 0.375%, 07/15/23 USA USD 111, ,000 California State GO, Build America Bonds, 7.30%, 10/01/39 USA USD 88, ,000 Florida Hurricane Catastrophe Fund Finance Corp. Revenue, Series A, 2.995%, 07/01/20 USA USD 81, ,000 Government of Poland, senior note, 5.125%, 04/21/21 POL USD 62, ,000 Corp Andina De Fomento, 4.375%, 06/15/22 SP USD 48, ,000 Illinois State GO, 5.10%, 06/01/33 USA USD 24, ,000 JobsOhio Beverage System Statewide Liquor Profits Revenue, Series B, 4.532%, 01/01/35 USA USD 16, ,007, Securities Maturing Within One Year 2,755,000 U.S. Treasury Bill, 0.00%, 01/29/15 USA USD 2,754, ,000 U.S. Treasury Note, 1.75%, 07/31/15 USA USD 908, ,000 General Electric Capital Corp., senior note, 2.25%, 11/09/15 USA USD 598, ,000 Australia & New Zealand Banking Group Ltd., secured note, 144A, 1.00%, 10/06/15 AUS USD 250, ,000 ING Bank NV, 144A, 2.00%, 09/25/15 NLD USD 201, ,000 The Export-Import Bank of Korea, senior note, 1.25%, 11/20/15 KOR USD 200, Unaudited Semi-Annual Report 183

186 Franklin Global Aggregate Investment Grade Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 155,000 AbbVie Inc., senior note, 1.20%, 11/06/15 USA USD 155, ,000 Metropolitan Life Global Funding I, secured note, 144A, 1.70%, 06/29/15 USA USD 100, ,000 Hyundai Capital America, senior note, 144A, 1.625%, 10/02/15 KOR USD 60, ,000 FHLB, 0.25%, 02/20/15 USA USD 50, ,000 TCI Communications Inc., senior note, 8.75%, 08/01/15 USA USD 41, ,323, TOTAL BONDS 45,725, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 45,725, TOTAL INVESTMENTS 45,725, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

187 Franklin Global Allocation Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING INVESTMENTS FUNDS Financials 74,805 ipath Bloomberg Commodity Index Total Return ETN USA USD 2,237, TOTAL INVESTMENTS FUNDS 2,237, SHARES Consumer Discretionary 7,068 Twenty-First Century Fox Inc., B USA USD 260, ,000 Brilliance China Automotive Holdings Ltd. CHN HKD 211, ,150 Burberry Group PLC GBR GBP 156, ,000 Start Today Co. Ltd. JPN JPY 147, ,900 Whitbread PLC GBR GBP 141, ,550 Luxottica Group SpA ITA EUR 140, ,900 TAL Education Group, ADR CHN USD 137, Time Warner Cable Inc. USA USD 131, ,000 ITV PLC GBR GBP 130, ,500 Dollarama Inc. CAN CAD 127, The Priceline Group Inc. USA USD 125, ,200 The Walt Disney Co. USA USD 113, ,100 NIKE Inc., B USA USD 105, Amazon.com Inc. USA USD 105, ,985 General Motors Co. USA USD 104, ,725 Reed Elsevier PLC GBR GBP 98, Charter Communications Inc., A USA USD 91, ,000 Guangzhou Automobile Group Co. Ltd., H CHN HKD 89, ,609 CBS Corp., B USA USD 89, ,400 Toyota Motor Corp. JPN JPY 88, ,050 Tractor Supply Co. USA USD 82, ,300 Nissan Motor Co. Ltd. JPN JPY 82, Advance Auto Parts Inc. USA USD 76, ,810 Kingfisher PLC GBR GBP 73, ,600 LKQ Corp. USA USD 73, ,050 Under Armour Inc., A USA USD 71, ,480 Ekornes ASA NOR NOK 69, Chipotle Mexican Grill Inc. USA USD 68, ,090 Marks & Spencer Group PLC GBR GBP 67, Starbucks Corp. USA USD 59, Time Warner Inc. USA USD 58, Cie Generale des Etablissements Michelin, B FRA EUR 58, Hyundai Mobis Co. Ltd. KOR KRW 57, ,150 TRI Pointe Homes Inc. USA USD 48, Volkswagen AG, pfd. DEU EUR 46, Tesla Motors Inc. USA USD 42, Michael Kors Holdings Ltd. USA USD 41, BorgWarner Inc. USA USD 38, Kohl s Corp. USA USD 34, Hyundai Motor Co. KOR KRW 31, ,700 Grendene SA BRA BRL 27, Comcast Corp., Special A USA USD 23, ,400 Springland International Holdings Ltd. CHN HKD 17, Truworths International Ltd. ZAF ZAR 5, Cia Hering BRA BRL 5, ,855, Consumer Staples 1,700 Reckitt Benckiser Group PLC GBR GBP 138, ,044 Unilever PLC GBR GBP 124, ,210 British American Tobacco PLC GBR GBP 120, ,753 Lorillard Inc. USA USD 110, ,637 The Kroger Co. USA USD 105, ,560 Tesco PLC GBR GBP 101, ,810 Altria Group Inc. USA USD 89, ,900 Dairy Farm International Holdings Ltd. HKG USD 89, Monster Beverage Corp. USA USD 86, PepsiCo Inc. USA USD 79, ,036 Walgreens Boots Alliance Inc. USA USD 78, ,671 Imperial Tobacco Group PLC GBR GBP 73, CVS Health Corp. USA USD 66, Mead Johnson Nutrition Co., A USA USD 50, Philip Morris International Inc. USA USD 36, ,596 Avon Products Inc. USA USD 33, ,065 Metro AG DEU EUR 32, Whole Foods Inc. USA USD 22, ,500 Univanich Palm Oil PCL, fgn. THA THB 16, Energizer Holdings Inc. USA USD 10, Coca-Cola Enterprises Inc. USA USD 10, ,476, Unaudited Semi-Annual Report 185

188 Franklin Global Allocation Fund Schedule of Investments as of December 31, 2014 (continued) face Energy 104,000 PetroChina Co. Ltd., H CHN HKD 115, ,320 Royal Dutch Shell PLC, A GBR EUR 111, ,500 WorleyParsons Ltd. AUS AUD 111, ,110 Total SA, B FRA EUR 108, ,700 Inner Mongolia Yitai Coal Co. Ltd., B CHN USD 104, ,701 BP PLC GBR GBP 100, ,000 CNOOC Ltd. CHN HKD 92, ,380 Apache Corp. USA USD 86, ,500 Suncor Energy Inc. CAN CAD 79, ,385 Baker Hughes Inc. USA USD 77, ,741 Marathon Oil Corp. USA USD 77, ,877 LUKOIL Holdings, ADR RUS USD 74, ,728 Petroleo Brasileiro SA, ADR, pfd. BRA USD 73, ,180 Technip SA FRA EUR 70, ,884 Talisman Energy Inc. CAN CAD 69, ,000 Royal Dutch Shell PLC, B GBR GBP 69, ,000 Cenovus Energy Inc. CAN CAD 61, ,059 SBM Offshore NV NLD EUR 59, ,500 Amec Foster Wheeler PLC GBR GBP 59, ,226 Eni SpA ITA EUR 56, ,770 Noble Corp. PLC USA USD 45, ,750 Petrofac Ltd. GBR GBP 41, ,132 CONSOL Energy Inc. USA USD 38, Murphy Oil Corp. USA USD 37, ,200 TMK OAO, GDR, Reg S RUS USD 35, ,000 Ensign Energy Services Inc. CAN CAD 35, Anadarko Petroleum Corp. USA USD 34, ,511 BG Group PLC GBR GBP 33, ,566 Talisman Energy Inc. CAN USD 27, ,398 Transocean Ltd. USA USD 25, ,710 Dragon Oil PLC TKM GBP 22, ,979 Saipem SpA ITA EUR 20, Rice Energy Inc. USA USD 20, ,200 Trican Well Service Ltd. CAN CAD 20, ,000 Kunlun Energy Co. Ltd. CHN HKD 18, Ensco PLC, A USA USD 7, Paragon Offshore PLC USA USD 1, ,129, Financials 31,460 Aberdeen Asset Management PLC GBR GBP 211, ,780 Deutsche Boerse AG DEU EUR 199, ,500 China Merchants Bank Co. Ltd., H CHN HKD 189, ,500 Azimut Holding SpA ITA EUR 163, ,562 PNC Financial Services Group Inc. USA USD 142, ,432 American International Group Inc. USA USD 136, ,928 KB Financial Group Inc. KOR KRW 129, ,000 United Overseas Bank Ltd. SGP SGD 129, ,000 Credit Suisse Group AG CHE CHF 126, ,718 Dewan Housing Finance Corp. Ltd. IND INR 123, ,050 BNP Paribas SA FRA EUR 122, ,141 Hana Financial Group Inc. KOR KRW 121, ,200 American Tower Corp. USA USD 118, ,800 Banco Bradesco SA, ADR, pfd. BRA USD 117, ,165 Bank Danamon Indonesia Tbk PT IDN IDR 111, ,900 Bank of Nova Scotia CAN CAD 108, ,400 Land and Houses PCL, fgn. THA THB 108, ACE Ltd. USA USD 105, ,678 JPMorgan Chase & Co. USA USD 105, ,000 United Bank Ltd. PAK PKR 98, Signature Bank USA USD 96, ,081 ING Groep NV, IDR NLD EUR 92, ,190 HSBC Holdings PLC GBR GBP 87, ,605 Citigroup Inc. USA USD 86, ,000 T. Rowe Price Group Inc. USA USD 85, ,161 Aegon NV NLD EUR 84, ,620 AXA SA FRA EUR 84, Alleghany Corp. USA USD 83, ,660 UniCredit SpA ITA EUR 81, ,050 Itau Unibanco Holding SA, ADR BRA USD 78, ,100 Siam Commercial Bank PCL, fgn. THA THB 78, ,075 The Allstate Corp. USA USD 75, SVB Financial Group USA USD 75, ,392 MetLife Inc. USA USD 75, ,040 Barclays PLC GBR GBP 72, Intercontinental Exchange Inc. USA USD 63, ,431 SunTrust Banks Inc. USA USD 59, ,017 Wells Fargo & Co. USA USD 55, Unaudited Semi-Annual Report

189 Franklin Global Allocation Fund Schedule of Investments as of December 31, 2014 (continued) face Financials (continued) 7,340 Aviva PLC GBR GBP 55, Zurich Insurance Group AG CHE CHF 49, ,028 CIT Group Inc. USA USD 49, ,000 China Life Insurance Co. Ltd., H CHN HKD 46, ,960 Standard Chartered PLC GBR GBP 44, Muenchener Rueckversicherungs-Gesellschaft AG DEU EUR 38, ,500 Ally Financial Inc. USA USD 35, ,920 GAM Holding Ltd. CHE CHF 34, Societe Generale SA FRA EUR 34, ,200 BM&F BOVESPA SA BRA BRL 34, Swiss Re AG CHE CHF 28, ,150 MLP AG DEU EUR 27, ,400 Bangkok Bank PCL, fgn. THA THB 25, Citizens Financial Group Inc. USA USD 23, Korea Investment Holdings Co. Ltd. KOR KRW 22, ,106 LIC Housing Finance Ltd. IND INR 21, Columbia Banking System Inc. USA USD 17, KIWOOM Securities Co. Ltd. KOR KRW 13, ,690, Health Care 2,470 Celgene Corp. USA USD 276, Roche Holding AG CHE CHF 260, ,359 Teva Pharmaceutical Industries Ltd., ADR ISR USD 250, ,094 Medtronic Inc. USA USD 223, Actavis PLC USA USD 203, ,449 Merck & Co. Inc. USA USD 195, ,500 Elekta AB, B SWE SEK 178, Biogen Idec Inc. USA USD 162, ,300 GN Store Nord AS DNK DKK 159, ,700 Alkermes PLC USA USD 158, Illumina Inc. USA USD 151, ,800 CSL Ltd. AUS AUD 127, McKesson Corp. USA USD 126, Perrigo Co. PLC USA USD 125, ,100 Bristol-Myers Squibb Co. USA USD 123, ,900 Cochlear Ltd. AUS AUD 120, Stryker Corp. USA USD 86, ,212 Eli Lilly & Co. USA USD 83, Cigna Corp. USA USD 81, ,260 Hospira Inc. USA USD 77, Regeneron Pharmaceuticals Inc. USA USD 73, ,100 Cerner Corp. USA USD 71, ,050 Envision Healthcare Holdings Inc. USA USD 71, Sanofi FRA EUR 68, ,970 GlaxoSmithKline PLC GBR GBP 63, Bayer AG DEU EUR 61, ,330 Insulet Corp. USA USD 61, Jazz Pharmaceuticals PLC USA USD 57, ,390 QIAGEN NV NLD EUR 55, Quintiles Transnational Holdings Inc. USA USD 55, Lonza Group AG CHE CHF 37, ,411 Getinge AB, B SWE SEK 32, ,700 Shanghai Pharmaceuticals Holding Co. Ltd., H CHN HKD 30, UCB SA BEL EUR 29, Gerresheimer AG DEU EUR 25, ,200 Sinopharm Group Co. CHN HKD 25, MorphoSys AG DEU EUR 25, Basilea Pharmaceutica AG CHE CHF 13, ,034, Industrials 6,800 Weir Group PLC GBR GBP 196, SGS SA CHE CHF 185, ,500 Experian PLC GBR GBP 178, ,400 DSV AS, B DNK DKK 165, Precision Castparts Corp. USA USD 146, ,000 Noble Group Ltd. HKG SGD 146, ,300 GEA Group AG DEU EUR 146, ,600 MTU Aero Engines AG DEU EUR 139, Stericycle Inc. USA USD 114, IHS Inc., A USA USD 108, ,650 HD Supply Holdings Inc. USA USD 107, Union Pacific Corp. USA USD 107, Roper Industries Inc. USA USD 98, ,400 Recruit Holdings Co. Ltd. JPN JPY 97, Pall Corp. USA USD 91, A.P. Moeller-Maersk AS, B DNK DKK 90, Unaudited Semi-Annual Report 187

190 Franklin Global Allocation Fund Schedule of Investments as of December 31, 2014 (continued) face Industrials (continued) 900 Honeywell International Inc. USA USD 89, ,420 Hyundai Development Co. KOR KRW 85, ,000 SembCorp Marine Ltd. SGP SGD 81, Huntington Ingalls Industries Inc. USA USD 80, The Boeing Co. USA USD 77, ,100 ITOCHU Corp. JPN JPY 76, ,510 BAE Systems PLC GBR GBP 62, AMETEK Inc. USA USD 49, Siemens AG DEU EUR 47, ,110 Compagnie de Saint-Gobain FRA EUR 47, ,720 Deutsche Lufthansa AG DEU EUR 45, Kansas City Southern USA USD 45, Caterpillar Inc. USA USD 40, B/E Aerospace Inc. USA USD 37, ,069 Daewoo International Corp. KOR KRW 30, ,760 Carillion PLC GBR GBP 30, ,000 Sinopec Engineering Group Co. Ltd. CHN HKD 26, ,020 Kloeckner & Co. SE DEU EUR 21, ,253 CNH Industrial NV GBR EUR 18, ,570 Meyer Burger Technology AG CHE CHF 16, ,836 CNH Industrial NV GBR EUR 14, KLX Inc. USA USD 13, ,077 Jain Irrigation Systems Ltd. IND INR 8, ,731 Serco Group PLC GBR GBP 6, ,174, Information Technology 5,476 Apple Inc. USA USD 604, Samsung Electronics Co. Ltd. KOR KRW 279, ,520 MasterCard Inc., A USA USD 217, ,750 Facebook Inc., A USA USD 214, ,530 Microsoft Corp. USA USD 210, Visa Inc., A USA USD 196, ,000 The Sage Group PLC GBR GBP 174, ,300 ARM Holdings PLC GBR GBP 159, ,500 Dassault Systemes SA FRA EUR 152, LinkedIn Corp., A USA USD 149, ,700 Check Point Software Technologies Ltd. ISR USD 133, ,880 Symantec Corp. USA USD 125, MercadoLibre Inc. ARG USD 121, ,000 YASKAWA Electric Corp. JPN JPY 116, ,947 Cisco Systems Inc. USA USD 109, ,850 Salesforce.com Inc. USA USD 109, ,729 Xerox Corp. USA USD 107, ,200 Electronic Arts Inc. USA USD 103, ,600 Cavium Inc. USA USD 98, ,000 Microchip Technology Inc. USA USD 90, ,600 Applied Materials Inc. USA USD 89, ASML Holding NV NLD EUR 86, ,980 Tata Consultancy Services Ltd. IND INR 80, FleetCor Technologies Inc. USA USD 78, NetSuite Inc. USA USD 78, ,000 GCL-Poly Energy Holdings Ltd. CHN HKD 77, ,470 Cognizant Technology Solutions Corp., A USA USD 77, ,000 QUALCOMM Inc. USA USD 74, CoStar Group Inc. USA USD 67, ,672 Hewlett-Packard Co. USA USD 67, ,168 Trina Solar Ltd., ADR CHN USD 66, ,700 Infosys Ltd., ADR IND USD 53, ,600 Kingboard Chemical Holdings Ltd. HKG HKD 50, ,336 CA Inc. USA USD 40, SanDisk Corp. USA USD 34, ANSYS Inc. USA USD 31, ,600 Capcom Co. Ltd. JPN JPY 24, Mobileye NV USA USD 21, CANON Inc. JPN JPY 19, ,000 Digital China Holdings Ltd. CHN HKD 17, ,612, Materials 540 Syngenta AG CHE CHF 173, ,200 Umicore SA BEL EUR 169, ,530 Ecolab Inc. USA USD 159, ,850 Vale SA, ADR, pfd., A BRA USD 151, ,500 Impala Platinum Holdings Ltd. ZAF ZAR 108, Sika AG CHE CHF 103, ,700 Symrise AG DEU EUR 103, ,820 International Paper Co. USA USD 97, Unaudited Semi-Annual Report

191 Franklin Global Allocation Fund Schedule of Investments as of December 31, 2014 (continued) face Materials (continued) 8,710 Compania de Minas Buenaventura SA, ADR PER USD 83, POSCO KOR KRW 78, ,727 Arab Potash Co. PLC JOR JOD 74, ,550 MeadWestvaco Corp. USA USD 68, ,783 Freeport-McMoRan Inc., B USA USD 65, Praxair Inc. USA USD 58, ,400 CRH PLC IRL EUR 57, ,200 Cytec Industries Inc. USA USD 55, ,300 HudBay Minerals Inc. CAN CAD 54, ,074 ThyssenKrupp AG DEU EUR 53, Akzo Nobel NV NLD EUR 48, ,821 Kumba Iron Ore Ltd. ZAF ZAR 37, Anglo American PLC GBR GBP 17, ,819, Telecommunication Services 15,535 Telefonica SA ESP EUR 224, ,403 Vodafone Group PLC GBR GBP 129, ,000 China Telecom Corp. Ltd., H CHN HKD 77, ,500 China Mobile Ltd. CHN HKD 52, ,780 Koninklijke KPN NV NLD EUR 43, ,930 Telenor ASA NOR NOK 39, Mobile TeleSystems, ADR RUS USD 5, , Utilities 2,104 NRG Energy Inc. USA USD 56, TOTAL SHARES 26,424, WARRANTS Financials 78,680 Land and Houses PCL, wts., 5/05/17 THA THB 13, TOTAL WARRANTS 13, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 28,674, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Energy 29,800 Gazprom OAO, ADR RUS USD 138, ,000 LUKOIL Holdings, ADR RUS USD 39, , TOTAL SHARES 178, BONDS Corporate Bonds 175,000 Snam SpA, senior note, Reg S, 2.375%, 06/30/17 ITA EUR 221, ,000 Toyota Motor Credit Corp., senior note, Reg S, 1.25%, 08/01/17 JPN EUR 217, ,000 Anheuser-Busch InBev NV, senior note, Reg S, 1.25%, 03/24/17 BEL EUR 210, ,000 BMW Finance NV, senior note, FRN, 0.301%, 09/05/16 DEU EUR 205, ,000 Chevron Corp., senior note, 0.889%, 06/24/16 USA USD 140, ,000 Abbey National Treasury Services PLC, senior note, Reg S, 2.00%, 01/14/19 GBR EUR 127, ,000 Volkswagen Bank GmbH, senior note, Reg S, FRN, 0.481%, 05/09/16 DEU EUR 121, ,000 Anheuser-Busch InBev Finance, senior note, 0.80%, 01/15/16 BEL USD 120, ,000 Costco Wholesale Corp., senior note, 1.125%, 12/15/17 USA USD 114, ,000 BMW US Capital LLC, senior note, 1.25%, 07/20/16 DEU EUR 104, ,000 Bank of Montreal, senior note, 1.45%, 04/09/18 CAN USD 98, ,000 Toyota Motor Credit Corp., senior note, 2.10%, 01/17/19 JPN USD 85, ,000 Johnson & Johnson, senior note, 1.65%, 12/05/18 USA USD 85, ,000 Royal Bank of Canada, senior note, 1.20%, 01/23/17 CAN USD 84, ,000 The Walt Disney Co., senior note, 1.10%, 12/01/17 USA USD 84, ,000 iheartcommunications Inc., senior secured note, first lien, 9.00%, 12/15/19 USA USD 77, ,000 The Procter & Gamble Co., senior note, 1.45%, 08/15/16 USA USD 55, ,000 Avaya Inc., senior note, 144A, 10.50%, 03/01/21 USA USD 43, ,000 Avaya Inc., senior secured note, 144A, 7.00%, 04/01/19 USA USD 32, ,000 NGPL PipeCo LLC, senior secured note, 144A, 9.625%, 06/01/19 USA USD 28, ,000 First Data Corp., senior note, 11.75%, 08/15/21 USA USD 14, ,000 Walter Energy Inc., first lien, 144A, 9.50%, 10/15/19 USA USD 13, ,000 NGPL PipeCo LLC, secured note, 144A, 7.119%, 12/15/17 USA USD 6, ,000 Walter Energy Inc., second lien, 144A, PIK, 11.50%, 04/01/20 USA USD 2, ,296, Government and Municipal Bonds 825,000 U.S. Treasury Note, FRN, 0.085%, 01/31/16 USA USD 824, ,000 U.S. Treasury Note, 0.50%, 06/30/16 USA USD 600, Unaudited Semi-Annual Report 189

192 Franklin Global Allocation Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 74,418 Mexican Udibonos, Index Linked, 5.00%, 06/16/16 MEX MXN 536, ,000 Government of Poland, 4.75%, 10/25/16 POL PLN 288, ,560 Government of Mexico, 6.25%, 06/16/16 MEX MXN 271, ,000 Deutsche Bahn Finance BV, senior note, 4.00%, 01/16/17 DEU EUR 261, ,000 Government of Slovenia, senior note, Reg S, 5.85%, 05/10/23 SVN USD 228, Nota Do Tesouro Nacional, senior note, 10.00%, 01/01/19 BRA BRL 204, ,000 FHLB, 0.375%, 06/24/16 USA USD 179, ,370 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 177, ,000 International Bank for Reconstruction and Development, 0.75%, 12/15/16 SP USD 165, ,000 Government of France, 3.25%, 04/25/16 FRA EUR 157, ,360,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 156, ,000 Province of Ontario, FRN, 1.43%, 12/03/18 CAN CAD 147, ,000 Government of Canada, 1.25%, 09/01/18 CAN CAD 146, ,000 Government of Ukraine, 144A, 7.75%, 09/23/20 UKR USD 134, ,000 Government of the Netherlands, 144A, Strip, 04/15/16 NLD EUR 133, ,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 127, ,000 Government of Poland, Strip, 01/25/16 POL PLN 126, ,950,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 124, ,000,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 122, ,000 Government of France, senior note, 144A, 1.375%, 01/29/18 FRA USD 118, ,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 117, ,000 Government of Hungary, 6.00%, 01/11/19 HUN EUR 112, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 110, ,000 France Treasury Note, 2.25%, 02/25/16 FRA EUR 105, ,200,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 97, ,000 Government of the Netherlands, Reg S, 1.25%, 01/15/19 NLD EUR 95, ,000 Government of Portugal, Reg S, 5.125%, 10/15/24 PRT USD 94, ,000 Government of Austria, senior note, 144A, 1.15%, 10/19/18 AUT EUR 94, ,000 Government of Finland, 144A, 1.125%, 09/15/18 FIN EUR 94, ,000 Government of France, 1.00%, 05/25/19 FRA EUR 94, ,000 Government of Germany, 0.50%, 04/12/19 DEU EUR 92, ,000 Government of Poland, 5.00%, 04/25/16 POL PLN 92, ,000 Inter-American Development Bank, 0.875%, 11/15/16 SP USD 85, Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 83, ,900,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 82, ,700,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 78, ,960 U.S. Treasury Note, Index Linked, 0.125%, 04/15/18 USA USD 73, ,800,000 Korea Moary Stabilization Bond, senior note, 2.79%, 06/02/16 KOR KRW 71, ,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 65, ,000 Government of Ukraine, senior note, Reg S, 6.75%, 11/14/17 UKR USD 61, ,910,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 51, ,210,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 50, ,000 Government of Hungary, 4.125%, 02/19/18 HUN USD 41, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 37, Letra Tesouro Nacional, Strip, 01/01/18 BRA BRL 36, ,900,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 31, Nota Do Tesouro Nacional, 10.00%, 01/01/23 BRA BRL 30, ,900,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 29, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 28, ,000 Government of Ireland, 4.50%, 04/18/20 IRL EUR 27, ,800,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 27, ,000 Government of Ireland, 5.90%, 10/18/19 IRL EUR 27, ,000 Government of Hungary, senior note, 6.25%, 01/29/20 HUN USD 24, ,730,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 24, ,400,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 22, ,700,000 Korea Moary Stabilization Bond, senior note, 2.22%, 10/02/16 KOR KRW 20, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 18, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 18, Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 15, ,350,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 14, ,000 Government of Hungary, senior note, Reg S, 4.375%, 07/04/17 HUN EUR 12, ,792 Mexican Udibonos, Index Linked, 3.50%, 12/14/17 MEX MXN 12, ,739 Mexican Udibonos, Index Linked, 4.00%, 06/13/19 MEX MXN 12, ,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 9, ,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 9, ,500,000 Korea Moary Stabilization Bond, senior note, 2.07%, 12/02/16 KOR KRW 8, ,110,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 8, ,000 Government of Hungary, senior note, 6.375%, 03/29/21 HUN USD 6, ,000 Government of Poland, 4.75%, 04/25/17 POL PLN 6, ,460,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 5, ,220,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 5, ,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 4, ,500 Government of Portugal, senior note, Reg S, 5.65%, 02/15/24 PRT EUR 3, Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 3, ,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 1, ,000 Government of Portugal, senior bond, Reg S, 4.95%, 10/25/23 PRT EUR 1, Mexican Udibonos, Index Linked, 2.50%, 12/10/20 MEX MXN 1, ,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF ,731, Unaudited Semi-Annual Report

193 Franklin Global Allocation Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year 500,000 U.S. Treasury Note, 0.375%, 03/15/15 USA USD 500, ,000 FHLB, 0.25%, 02/20/15 USA USD 300, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 294, ,500,000 Korea Moary Stabilization Bond, senior note, 2.90%, 12/02/15 KOR KRW 256, ,000 U.S. Treasury Note, 1.25%, 09/30/15 USA USD 251, ,000 U.S. Treasury Note, 0.25%, 05/15/15 USA USD 250, ,000 Government of Poland, Strip, 07/25/15 POL PLN 229, ,000 GE Capital European Funding, senior note, Reg S, 2.00%, 02/27/15 USA EUR 212, ,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 203, ,100,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 190, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 03/27/15 SGP SGD 188, ,950,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 153, ,310 Government of Mexico, 6.00%, 06/18/15 MEX MXN 139, ,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 136, ,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 132, ,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 127, ,000 Caterpillar International Finance Ltd., senior note, 1.375%, 05/18/15 USA EUR 121, ,000 Societe Generale SA, senior note, Reg S, FRN, 0.431%, 04/17/15 FRA EUR 121, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/02/15 SGP SGD 120, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/09/15 SGP SGD 120, ,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 106, ,000 HSBC USA Inc., senior note, 2.375%, 02/13/15 USA USD 100, ,450 Government of Mexico, 8.00%, 12/17/15 MEX MXN 95, ,000 Government of Canada, 1.00%, 02/01/15 CAN CAD 92, ,000 John Deere Capital Corp., 0.70%, 09/04/15 USA USD 80, ,000 Canada Treasury Bill, 0.00%, 02/12/15 CAN CAD 77, ,000 Government of Poland, 5.50%, 04/25/15 POL PLN 67, ,920,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 66, ,000 Government of Poland, 6.25%, 10/24/15 POL PLN 60, ,000 Bank of Negara Moary Note, 0.00%, 05/05/15 MYS MYR 59, ,600 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 54, ,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 54, ,010,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 53, ,290 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 52, ,900 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 52, ,000 Hewlett-Packard Co., senior note, 2.35%, 03/15/15 USA USD 50, ,210 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 48, ,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 47, ,700,000 Korea Moary Stabilization Bond, 0.00%, 01/13/15 KOR KRW 47, ,060 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 45, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/30/15 SGP SGD 45, ,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 39, ,340 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 38, ,000 Bank of Negara Moary Note, 0.00%, 04/16/15 MYS MYR 36, ,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 34, ,000 Canada Treasury Bill, 0.00%, 03/12/15 CAN CAD 34, ,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 32, ,900,000 Korea Moary Stabilization Bond, senior note, 2.13%, 10/08/15 KOR KRW 32, ,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 27, ,890 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 25, ,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 22, ,460,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 18, Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 17, ,000 Bank of Negara Moary Note, 0.00%, 10/27/15 MYS MYR 13, ,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 11, ,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 11, ,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 11, ,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 11, ,000 Bank of Negara Moary Note, 0.00%, 06/30/15 MYS MYR 11, ,000 Bank of Negara Moary Note, 0.00%, 06/16/15 MYS MYR 8, ,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 8, ,000 Bank of Negara Moary Note, 0.00%, 08/18/15 MYS MYR 8, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/20/15 SGP SGD 7, ,000 Bank of Negara Moary Note, 0.00%, 02/10/15 MYS MYR 5, ,000 Bank of Negara Moary Note, 0.00%, 04/28/15 MYS MYR 5, ,000 Bank of Negara Moary Note, 0.00%, 06/03/15 MYS MYR 5, ,000 Bank of Negara Moary Note, 0.00%, 06/04/15 MYS MYR 5, ,070 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 3, ,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 2, ,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 2, Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN ,905, TOTAL BONDS 15,933, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 16,112, TOTAL INVESTMENTS 44,786, Floating Rates are indicated as at December 31, 2014 Income may be received in additional securities and/or cash Unaudited Semi-Annual Report 191

194 Franklin Global Convertible Securities Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aluminium 50,000 Alcoa Inc., 5.375%, cvt. pfd. USA USD 2,522, Electric Utilities 38,000 Dominion Resources Inc., 6.00%, cvt. pfd., B USA USD 2,284, ,000 NextEra Energy Inc., 5.799%, cvt. pfd. USA USD 1,961, ,000 Dominion Resources Inc., 6.125%, cvt. pfd., A USA USD 180, ,426, Household Appliances 26,100 Stanley Black & Decker Inc., 4.75%, cvt. pfd. USA USD 3,588, Industrial Machinery 35,000 United Technologies Corp., 7.50%, cvt. pfd. USA USD 2,146, Steel 116,000 Cliffs Natural Resources Inc., 7.00%, cvt. pfd. USA USD 777, ,000 ArcelorMittal, 6.00%, cvt. pfd. LUX USD 86, , Wireless Telecommunication Services 22,200 T-Mobile US Inc., 5.50%, cvt. pfd. USA USD 1,176, TOTAL SHARES 14,723, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 14,723, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Electric Utilities 9,000 NextEra Energy Inc., 5.599%, cvt. pfd. USA USD 625, Energy Equipment & Services 120,000 McDermott International Inc., 6.25%, cvt. pfd. USA USD 1,524, TOTAL SHARES 2,149, BONDS Corporate Bonds 2,200,000 Steinhoff Finance Holding, cvt., senior note, Reg S, 6.375%, 05/26/17 ZAF EUR 3,746, ,000,000 Vipshop Holdings Ltd., cvt., senior note, 1.50%, 03/15/19 CHN USD 3,585, ,800,000 BioMarin Pharmaceutical Inc., cvt., senior sub. note, 1.50%, 10/15/20 USA USD 3,445, ,000,000 Jarden Corp., cvt., sub. bond, 144A, 1.125%, 03/15/34 USA USD 3,376, ,200,000 Electronic Arts Inc., cvt., senior note, 0.75%, 07/15/16 USA USD 3,324, ,900,000 ServiceNow Inc., cvt., zero cpn., 11/01/18 USA USD 3,313, ,900,000 Salesforce.com Inc., cvt., senior note, 0.25%, 04/01/18 USA USD 3,311, ,000,000 Siemens Financieringsmaatschappij NV, cvt., senior note, Reg S, 1.05%, 08/16/17 DEU USD 3,283, ,900,000 NetSuite Inc., cvt., senior note, 0.25%, 06/01/18 USA USD 3,262, ,300,000 Ctrip.com International Ltd., cvt., senior note, 1.25%, 10/15/18 CHN USD 3,215, ,000,000 JDS Uniphase Corp., senior bond, cvt., 0.625%, 08/15/33 USA USD 3,183, ,400,000 Adidas AG, cvt., senior note, Reg S, 0.25%, 06/14/19 DEU EUR 3,166, ,270,000 Brookdale Senior Living Inc., cvt., senior note, 2.75%, 06/15/18 USA USD 3,099, ,700,000 The Priceline Group Inc., cvt., senior note, 0.35%, 06/15/20 USA USD 3,024, ,315 Technip SA, cvt., senior bond, Reg S, 0.25%, 01/01/17 FRA EUR 3,022, ,650,000 Yahoo! Inc., cvt., zero cpn., 12/01/18 USA USD 3,011, ,135,000 Shutterfly Inc., cvt., 0.25%, 05/15/18 USA USD 2,984, ,450,000 SanDisk Corp., cvt., senior note, 0.50%, 10/15/20 USA USD 2,955, ,000,000 Trulia Inc., cvt., 2.75%, 12/15/20 USA USD 2,898, ,100,000 SINA Corp., cvt., senior note, 1.00%, 12/01/18 CHN USD 2,864, ,300,000 Yandex NV, cvt., senior note, 144A, 1.125%, 12/15/18 RUS USD 2,747, ,560,000 HeartWare International Inc., cvt., senior note, 3.50%, 12/15/17 USA USD 2,747, ,300,000 Iconix Brand Group Inc., cvt., senior sub. note, 2.50%, 06/01/16 USA USD 2,715, ,900,000 Liberty Interactive LLC, cvt., senior note, 0.75%, 03/30/43 USA USD 2,709, ,925,000 Take-Two Interactive Software Inc., cvt., senior note, 1.00%, 07/01/18 USA USD 2,696, ,485,000 Intel Corp., cvt., junior sub., 3.25%, 08/01/39 USA USD 2,584, ,340,000 Bottomline Technologies Inc., cvt., senior note, 1.50%, 12/01/17 USA USD 2,492, ,500,000 Liberty Media Corp., cvt., senior note, 1.375%, 10/15/23 USA USD 2,478, ,110,000 Forest City Enterprises Inc., cvt., senior note, 4.25%, 08/15/18 USA USD 2,415, ,700,000 B2Gold Corp., cvt., senior sub. note, 3.25%, 10/01/18 CAN USD 2,406, ,100,000 Abengoa SA, cvt., senior note, Reg S, 6.25%, 01/17/19 ESP EUR 2,352, ,750,000 Concur Technologies Inc., cvt., senior note, 0.50%, 06/15/18 USA USD 2,318, ,500,000 Fluidigm Corp., cvt., senior bond, 2.75%, 02/01/34 USA USD 2,265, ,000,000 UTI Worldwide Inc., cvt., senior note, 144A, 4.50%, 03/01/19 USA USD 2,218, ,000 Novellus Systems Inc., cvt., senior note, 2.625%, 05/15/41 USA USD 2,136, ,360,000 Proofpoint Inc., cvt., senior note, 1.25%, 12/15/18 USA USD 1,864, ,510,000 Cemex SAB de CV, cvt., sub. note, 3.75%, 03/15/18 MEX USD 1,839, ,500,000 HomeAway Inc., cvt., senior note, 144A, 0.125%, 04/01/19 USA USD 1,410, ,000 Xilinx Inc., cvt., senior note, 2.625%, 06/15/17 USA USD 1,389, Unaudited Semi-Annual Report

195 Franklin Global Convertible Securities Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 2,010,000 Cobalt International Energy Inc., cvt., senior note, 2.625%, 12/01/19 USA USD 1,216, ,000,000 Qihoo 360 Technologies Co. Ltd., cvt., senior note, 144A, 1.75%, 08/15/21 CHN USD 832, ,000 Grand City Properties SA, cvt., first lien, Reg S, 1.50%, 02/24/19 DEU EUR 813, ,000 Molycorp Inc., cvt., senior note, 5.50%, 02/01/18 USA USD 43, ,770, Securities Maturing Within One Year 2,600,000 Volkswagen International Finance, cvt., Reg S, 5.50%, 11/09/15 DEU EUR 3,499, ,300,000 Billion Express Investments Ltd., cvt., senior bond, Reg S, 0.75%, 10/18/15 CHN USD 3,300, ,400,000 MGM Resorts International, cvt., senior note, 4.25%, 04/15/15 USA USD 1,655, ,455, TOTAL BONDS 119,225, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 121,375, TOTAL INVESTMENTS 136,099, Unaudited Semi-Annual Report 193

196 Franklin Global Corporate High Yield Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Financials 1,000 GMAC Capital Trust I, 8.125%, pfd. USA USD 26, TOTAL SHARES 26, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 26, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 400,000 Sprint Nextel Corp., senior note, 144A, 7.00%, 03/01/20 USA USD 434, ,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 430, ,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 422, ,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 419, ,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 398, ,000 Ally Financial Inc., senior note, 7.50%, 09/15/20 USA USD 352, ,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 336, ,000 CSC Holdings LLC, senior note, 6.75%, 11/15/21 USA USD 332, ,000 Bank of America Corp., junior sub. bond, M, 8.125% to 05/15/18, FRN thereafter, Perpetual USA USD 325, ,000 Virgin Media Secured Finance PLC, senior secured note, Reg S, 5.50%, 01/15/25 GBR GBP 323, ,000 U.S. Coatings Acquisition Inc./Flash Dutch 2 BV, secured note, Reg S, 5.75%, 02/01/21 USA EUR 319, ,000 Avis Budget Finance PLC, senior note, Reg S, 6.00%, 03/01/21 USA EUR 318, ,000 CIT Group Inc., secured note, 144A, 5.50%, 02/15/19 USA USD 317, ,000 Chesapeake Energy Corp., senior note, 6.125%, 02/15/21 USA USD 316, ,000 MGM Resorts International, senior note, 6.75%, 10/01/20 USA USD 315, ,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 314, ,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 310, ,000 Gant Co. Inc., senior note, 5.125%, 07/15/20 USA USD 307, ,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 307, ,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 304, ,000 DISH DBS Corp., senior note, 5.125%, 05/01/20 USA USD 303, ,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 300, ,000 JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 08/01/23, FRN thereafter, Perpetual USA USD 297, ,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 296, ,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 8.25%, 11/01/19 AUS USD 274, ,000 Telecom Italia SpA, senior bond, Reg S, 5.375%, 01/29/19 ITA EUR 270, ,000 Ceramtec Group GmbH, senior note, Reg S, 8.25%, 08/15/21 DEU EUR 261, ,000 Eldorado Gold Corp., senior note, 144A, 6.125%, 12/15/20 CAN USD 243, ,000 Wind Acquisition Finance SA, senior note, Reg S, 7.00%, 04/23/21 ITA EUR 237, ,000 Ineos Group Holdings SA, senior note, Reg S, 5.75%, 02/15/19 CHE EUR 234, ,000 Peabody Energy Corp., senior note, 6.00%, 11/15/18 USA USD 228, ,000 Cemex Finance LLC, senior secured note, 144A, 9.375%, 10/12/22 MEX USD 224, ,000 Energy Transfer Equity LP, senior note, first lien, 7.50%, 10/15/20 USA USD 223, ,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 219, ,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 213, ,000 ArcelorMittal, senior note, 6.125%, 06/01/18 LUX USD 213, ,000 KB Home, senior bond, 7.50%, 09/15/22 USA USD 213, ,000 The Goodyear Tire & Rubber Co., senior note, 6.50%, 03/01/21 USA USD 213, ,000 Alcatel-Lucent USA Inc., senior note, 144A, 6.75%, 11/15/20 FRA USD 212, ,000 Neuberger Berman Group LLC/Finance Corp., senior note, 144A, 5.875%, 03/15/22 USA USD 211, ,000 UPCB Finance III Ltd., senior secured note, 144A, 6.625%, 07/01/20 NLD USD 210, ,000 eaccess Ltd., senior note, 144A, 8.25%, 04/01/18 JPN USD 210, ,000 CONSOL Energy Inc., senior note, 8.25%, 04/01/20 USA USD 208, ,000 Frontier Communications Corp., senior bond, 7.625%, 04/15/24 USA USD 207, ,000 JBS USA LLC/Finance Inc., senior note, 144A, 7.25%, 06/01/21 USA USD 207, , BC ULC/New Red Finance Inc., secured note, second lien, 144A, 6.00%, 04/01/22 CAN USD 206, ,000 OneMain Financial Holdings Inc., senior note, 144A, 7.25%, 12/15/21 USA USD 206, ,000 Reynolds Group Issuer Inc./LLC/SA, first lien, 5.75%, 10/15/20 USA USD 206, ,000 Millicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 LUX USD 205, ,000 Grifols Worldwide Operations Ltd., senior note, 144A, 5.25%, 04/01/22 USA USD 205, ,000 Jaguar Holding Co. I, senior note, 144A, PIK, 9.375%, 10/15/17 USA USD 204, ,000 T-Mobile USA Inc., senior note, 6.125%, 01/15/22 USA USD 203, ,000 Hertz Corp., senior note, 6.25%, 10/15/22 USA USD 203, ,000 Alere Inc., senior sub. note, 6.50%, 06/15/20 USA USD 202, ,000 Blackboard Inc., senior note, 144A, 7.75%, 11/15/19 USA USD 201, ,000 Equinix Inc., senior note, 4.875%, 04/01/20 USA USD 200, ,000 Dole Food Co. Inc., senior secured note, 144A, 7.25%, 05/01/19 USA USD 199, ,000 NOVA Chemicals Corp., senior bond, 144A, 5.00%, 05/01/25 CAN USD 199, Unaudited Semi-Annual Report

197 Franklin Global Corporate High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 200,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.75%, 01/31/21 LUX USD 197, ,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 197, ,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.75%, 01/15/23 DEU EUR 197, ,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 196, ,000 WMG Acquisition Corp., senior note, 144A, 5.625%, 04/15/22 USA USD 194, ,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A, 5.625%, 03/01/24 USA USD 194, ,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 191, ,000 Digicel Group Ltd., senior note, 144A, 6.00%, 04/15/21 BMU USD 190, ,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 189, ,000 Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 02/15/21 USA USD 189, ,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, Reg S, 8.50%, 01/15/21 USA EUR 187, ,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 184, ,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 183, ,000 Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 * USA USD 178, ,000 Ultra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 USA USD 173, ,000 Clayton Williams Energy Inc., senior note, 7.75%, 04/01/19 USA USD 171, ,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 170, ,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 167, ,000 New Look Bondco I PLC, secured note, first lien, Reg S, 8.75%, 05/14/18 GBR GBP 164, ,000 Landry s Inc., senior note, 144A, 9.375%, 05/01/20 USA USD 159, ,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 158, ,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 144A, 8.375%, 06/01/19 USA USD 157, ,000 AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, senior note, 144A, 5.00%, 10/01/21 NLD USD 156, ,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 04/15/22 USA USD 155, ,000 CGG SA, senior note, 6.50%, 06/01/21 FRA USD 153, ,000 Halcon Resources Corp., senior note, 9.75%, 07/15/20 USA USD 151, ,000 Post Holdings Inc., senior note, 7.375%, 02/15/22 USA USD 150, ,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 146, ,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 142, ,000 Ocean Rig UDW Inc., senior note, 144A, 7.25%, 04/01/19 USA USD 141, ,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 136, ,000 Play Finance 1 SA, senior note, Reg S, 6.50%, 08/01/19 LUX EUR 128, ,000 Play Finance 2 SA, secured note, first lien, Reg S, 5.25%, 02/01/19 LUX EUR 125, ,000 Celanese US Holdings LLC, senior note, 3.25%, 10/15/19 USA EUR 125, ,000 EnQuest PLC, senior note, 144A, 7.00%, 04/15/22 GBR USD 122, ,000 Galapagos SA, senior secured note, Reg S, 5.375%, 06/15/21 DEU EUR 120, ,000 Wind Acquisition Finance SA, senior secured note, Reg S, 4.00%, 07/15/20 ITA EUR 119, ,000 KM Germany Holdings GmbH, senior secured note, first lien, Reg S, 8.75%, 12/15/20 DEU EUR 118, ,000 Financiere Gaillon 8 SAS, senior note, Reg S, 7.00%, 09/30/19 FRA EUR 117, ,000 Iglo Foods Bondco PLC, senior secured note, first lien, Reg S, FRN, 4.582%, 06/15/20 GBR EUR 117, ,000 Galapagos Holding SA, senior note, Reg S, 7.00%, 06/15/22 DEU EUR 112, ,000 HCA Inc., senior secured note, 6.50%, 02/15/20 USA USD 112, ,000 Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 06/21/19 USA USD 112, ,000 Energy XXI Gulf Coast Inc., senior note, 144A, 6.875%, 03/15/24 USA USD 108, ,000 CHS/Community Health Systems Inc., senior note, 7.125%, 07/15/20 USA USD 106, ,000 Sterling International Inc., senior note, 11.00%, 10/01/19 USA USD 106, ,000 CHS/Community Health Systems Inc., senior note, 5.125%, 08/01/21 USA USD 106, ,000 Toll Brothers Finance Corp., senior bond, 5.625%, 01/15/24 USA USD 106, ,000 Ineos Finance PLC, senior secured note, 144A, 7.50%, 05/01/20 CHE USD 105, ,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 104, ,000 Aviv Healthcare Properties LP/Aviv Healthcare Capital Corp., senior note, 6.00%, 10/15/21 USA USD 104, ,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 9.00%, 04/15/19 USA USD 104, ,000 CHS/Community Health Systems Inc., senior secured note, first lien, 5.125%, 08/15/18 USA USD 103, ,000 Hertz Corp., senior note, 6.75%, 04/15/19 USA USD 103, ,000 CIT Group Inc., senior note, 5.00%, 08/15/22 USA USD 103, ,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.25%, 02/15/21 USA USD 103, ,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 102, ,000 Steel Dynamics Inc., senior bond, 144A, 5.50%, 10/01/24 USA USD 102, ,000 T-Mobile USA Inc., senior bond, 6.50%, 01/15/24 USA USD 102, ,000 AECOM Technology Corp., senior note, 144A, 5.75%, 10/15/22 USA USD 102, ,000 E*TRADE Financial Corp., senior note, 5.375%, 11/15/22 USA USD 102, ,000 DaVita HealthCare Partners Inc., senior bond, 5.125%, 07/15/24 USA USD 102, Unaudited Semi-Annual Report 195

198 Franklin Global Corporate High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 100,000 Owens-Brockway Glass Container Inc., senior note, 144A, 5.00%, 01/15/22 USA USD 102, ,000 Energy Transfer Equity LP, senior bond, first lien, 5.875%, 01/15/24 USA USD 102, ,000 Olin Corp., senior bond, 5.50%, 08/15/22 USA USD 101, ,000 Scientific Games International Inc., senior secured note, first lien, 144A, 7.00%, 01/01/22 USA USD 101, ,000 Anna Merger Sub Inc., senior note, 144A, 7.75%, 10/01/22 USA USD 101, ,000 Constellation Brands Inc., senior bond, 4.75%, 11/15/24 USA USD 101, ,000 Cott Beverages Inc., senior note, 144A, 6.75%, 01/01/20 USA USD 100, ,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 100, ,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.875%, 03/01/22 USA USD 100, ,000 Florida East Coast Holdings Corp., senior note, 144A, 9.75%, 05/01/20 USA USD 100, ,000 IHS Inc., senior note, 144A, 5.00%, 11/01/22 USA USD 99, ,000 Florida East Coast Holdings Corp., secured note, first lien, 144A, 6.75%, 05/01/19 USA USD 99, ,000 JBS USA LLC/Finance Inc., senior bond, 144A, 5.875%, 07/15/24 USA USD 99, ,000 Goodrich Petroleum Corp., senior note, 8.875%, 03/15/19 USA USD 99, ,000 KB Home, senior note, 4.75%, 05/15/19 USA USD 98, ,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 98, ,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 04/15/23 USA USD 98, ,000 Post Holdings Inc., senior note, 144A, 6.75%, 12/01/21 USA USD 97, ,000 Polymer Group Inc., senior note, 144A, 6.875%, 06/01/19 USA USD 96, ,000 NGL Energy Partners LP/NGL Energy Finance Corp., senior note, 144A, 5.125%, 07/15/19 USA USD 96, ,000 CONSOL Energy Inc., senior note, 144A, 5.875%, 04/15/22 USA USD 93, ,000 Sanchez Energy Corp., senior note, 7.75%, 06/15/21 USA USD 93, ,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 93, ,000 Financiere Quick SAS, senior note, Reg S, FRN, 7.582%, 10/15/19 FRA EUR 93, ,000 Scientific Games International Inc., senior note, 144A, 10.00%, 12/01/22 USA USD 92, ,000 Memorial Resource Development Corp., senior note, 144A, 5.875%, 07/01/22 USA USD 90, ,000 Barminco Finance Pty. Ltd., senior note, 144A, 9.00%, 06/01/18 AUS USD 90, ,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 87, ,000 Radio One Inc., senior sub. note, 144A, 9.25%, 02/15/20 USA USD 87, ,000 Compressco Partners LP/Finance Corp., senior note, 144A, 7.25%, 08/15/22 USA USD 87, ,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 86, ,000 Sanchez Energy Corp., senior note, 144A, 6.125%, 01/15/23 USA USD 84, ,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 83, ,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 04/01/22 AUS USD 83, ,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 09/15/21 USA USD 81, , Hour Holdings III LLC, senior note, 144A, 8.00%, 06/01/22 USA USD 80, ,000 Offshore Group Investment Ltd., senior secured note, first lien, 7.50%, 11/01/19 USA USD 75, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 9.00%, 02/15/20 USA USD 74, ,000 First Data Corp., senior note, 11.25%, 01/15/21 USA USD 73, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 11.25%, 06/01/17 USA USD 73, ,000 Offshore Group Investment Ltd., senior bond, first lien, 7.125%, 04/01/23 USA USD 72, ,000 Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp., senior note, 8.375%, 06/01/20 USA USD 69, ,000 Triangle USA Petroleum Corp., senior note, 144A, 6.75%, 07/15/22 USA USD 66, ,000 CHC Helicopter SA, senior note, 9.375%, 06/01/21 CAN USD 61, ,000 Energy XXI Gulf Coast Inc., senior note, 7.50%, 12/15/21 USA USD 54, ,000 Alere Inc., senior note, 7.25%, 07/01/18 USA USD 52, ,000 Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 06/01/21 USA USD 51, ,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 42, ,393, TOTAL BONDS 28,393, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 28,393, TOTAL INVESTMENTS 28,420, * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, 2014 Income may be received in additional securities and/or cash 196 Unaudited Semi-Annual Report

199 Franklin Global Equity Strategies Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles & Components 378,000 Brilliance China Automotive Holdings Ltd. CHN HKD 604, ,000 Astra International Tbk PT IDN IDR 550, ,600 Volkswagen AG, pfd. DEU EUR 357, ,377 Cie Generale des Etablissements Michelin, B FRA EUR 307, ,000 Great Wall Motor Co. Ltd., H CHN HKD 279, ,500 Nissan Motor Co. Ltd. JPN JPY 260, ,000 Toyota Motor Corp. JPN JPY 252, ,883 Pirelli & C. SpA ITA EUR 229, ,150 General Motors Co. USA USD 214, Hyundai Motor Co. KOR KRW 113, ,500 BAIC Motor Corp. Ltd., H, Reg S CHN HKD 102, ,271, Banks 15,732 Citigroup Inc. USA USD 851, ,658 Itau Unibanco Holding SA, ADR BRA USD 711, ,600 JPMorgan Chase & Co. USA USD 663, ,600 Kasikornbank PCL, fgn. THA THB 651, ,300 Siam Commercial Bank PCL, fgn. THA THB 605, ,755 ING Groep NV, IDR NLD EUR 599, ,326 Industrial and Commercial Bank of China Ltd., H CHN HKD 560, ,255 BNP Paribas SA FRA EUR 551, ,115 SunTrust Banks Inc. USA USD 465, ,710 KB Financial Group Inc. KOR KRW 420, ,099 Akbank TAS TUR TRY 408, ,000 China Construction Bank Corp., H CHN HKD 388, ,010 Wells Fargo & Co. USA USD 384, ,097 Commerzbank AG DEU EUR 373, ,926 PNC Financial Services Group Inc. USA USD 358, ,800 Bank Central Asia Tbk PT IDN IDR 329, ,544 HSBC Holdings PLC GBR GBP 327, ,679 HSBC Holdings PLC GBR HKD 321, ,743 UniCredit SpA ITA EUR 295, ,270 Credit Agricole SA FRA EUR 276, ,980 Barclays PLC GBR GBP 273, ,500 DBS Group Holdings Ltd. SGP SGD 272, ,000 Bank Rakyat Indonesia Persero Tbk PT IDN IDR 230, ,163 Societe Generale SA FRA EUR 176, ,000 Turkiye Garanti Bankasi AS TUR TRY 161, ,154 Citizens Financial Group Inc. USA USD 78, ,700 Bangkok Bank PCL, fgn. THA THB 69, ,803, Capital Goods 20,040 Hyundai Development Co. KOR KRW 709, ,130 Daewoo Shipbuilding & Marine Engineering Co. Ltd. KOR KRW 616, ,189 Navistar International Corp. USA USD 274, ,775 Koninklijke Philips NV NLD EUR 256, ,128 Siemens AG DEU EUR 241, ,000 United Tractors Tbk PT IDN IDR 210, ,350 FLSmidth & Co. AS DNK DKK 192, ,600 Jardine Strategic Holdings Ltd. HKG USD 157, ,534 Caterpillar Inc. USA USD 140, ,310 B/E Aerospace Inc. USA USD 134, ,028 BAE Systems PLC GBR GBP 132, ,079 Safran SA FRA EUR 128, ,200 Jardine Matheson Holdings Ltd. HKG USD 73, ,155 KLX Inc. USA USD 47, ,493 Dongfang Electric Corp. Ltd., H CHN HKD 43, ,995 CNH Industrial NV GBR EUR 16, ,373, Commercial & Professional Services 86,480 Sporton International Inc. TWN TWD 427, ,306 Serco Group PLC GBR GBP 78, , Consumer Durables & Apparel 6,699 Fila Korea Ltd. KOR KRW 682, ,190 Merida Industry Co. Ltd. TWN TWD 340, ,023, Consumer Services 3,403,400 The Erawan Group PCL, fgn. THA THB 480, ,341 Accor SA FRA EUR 422, ,096,300 Melco Crown Philippines Resorts Corp. PHL PHP 332, Unaudited Semi-Annual Report 197

200 Franklin Global Equity Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Consumer Services (continued) 754,400 Perfect Shape PRC Holdings Ltd. CHN HKD 188, ,000 NagaCorp Ltd. KH HKD 130, ,721 Melco Crown Entertainment Ltd., ADR HKG USD 119, ,400 MGM China Holdings Ltd. HKG HKD 118, ,791, Diversified Financials 40,300 Remgro Ltd. ZAF ZAR 885, ,973 Bajaj Holdings and Investment Ltd. IND INR 734, ,206 Credit Suisse Group AG CHE CHF 459, ,990 Morgan Stanley USA USD 387, ,100 CIT Group Inc. USA USD 148, ,400 Ally Financial Inc. USA USD 127, Capital One Financial Corp. USA USD 65, ,807, Energy 61,900 Talisman Energy Inc. CAN CAD 485, ,349 BP PLC GBR GBP 457, ,000 China Petroleum and Chemical Corp., H CHN HKD 451, ,649 SK Innovation Co. Ltd. KOR KRW 439, ,685 China Shenhua Energy Co. Ltd., H CHN HKD 403, ,441 Royal Dutch Shell PLC, A GBR EUR 382, ,410 Total SA, B FRA EUR 381, ,645 Baker Hughes Inc. USA USD 372, ,000 CNOOC Ltd. CHN HKD 364, ,942 Petroleo Brasileiro SA, ADR, pfd. BRA USD 325, ,190 Apache Corp. USA USD 262, ,000 PetroChina Co. Ltd., H CHN HKD 258, ,450 LUKOIL Holdings, ADR RUS USD 256, ,112 Royal Dutch Shell PLC, B GBR GBP 212, ,540 Noble Corp. PLC USA USD 207, ,677 Eni SpA ITA EUR 205, ,400 Kunlun Energy Co. Ltd. CHN HKD 202, ,902 BG Group PLC GBR GBP 200, ,937 Marathon Oil Corp. USA USD 196, ,230 Galp Energia SGPS SA, B PRT EUR 196, ,190 Chevron Corp. USA USD 133, ,556 CONSOL Energy Inc. USA USD 120, ,440 Anadarko Petroleum Corp. USA USD 118, ,302 Transocean Ltd. USA USD 115, ,610 Murphy Oil Corp. USA USD 81, Technip SA FRA EUR 48, ,298 Repsol SA ESP EUR 43, ,252 Saipem SpA ITA EUR 34, ,019 Ensco PLC, A USA USD 30, ,000 Paragon Offshore PLC USA USD 8, ,997, Food & Staples Retailing 18,210 Metro AG DEU EUR 557, ,263 CVS Health Corp. USA USD 410, ,552 Walgreens Boots Alliance Inc. USA USD 270, ,804 Empire Co. Ltd., A CAN CAD 211, ,429 Tesco PLC GBR GBP 198, ,649, Food, Beverage & Tobacco 2,154,000 Thai Beverage PCL, fgn. THA SGD 1,121, ,157 Lorillard Inc. USA USD 387, ,381 Altria Group Inc. USA USD 314, ,178 PepsiCo Inc. USA USD 300, ,522 British American Tobacco PLC GBR GBP 246, ,000 Anadolu Efes Biracilik Ve Malt Sanayii AS TUR TRY 204, ,500 Oldtown Bhd. MYS MYR 191, ,165 Philip Morris International Inc. USA USD 176, ,700 Univanich Palm Oil PCL, fgn. THA THB 84, ,201 Coca-Cola Enterprises Inc. USA USD 53, ,080, Health Care Equipment & Services 13,602 Medtronic Inc. USA USD 982, ,510 Getinge AB, B SWE SEK 307, ,931 Stryker Corp. USA USD 276, ,000 St. Shine Optical Co. Ltd. TWN TWD 214, ,918 Cigna Corp. USA USD 197, ,978, Unaudited Semi-Annual Report

201 Franklin Global Equity Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Household & Personal Products 9,423 Avon Products Inc. USA USD 88, Insurance 15,636 American International Group Inc. USA USD 875, ,507 ACE Ltd. USA USD 402, ,765 AXA SA FRA EUR 343, Zurich Insurance Group AG CHE CHF 283, ,709 The Allstate Corp. USA USD 260, ,471 Aviva PLC GBR GBP 252, ,239 RSA Insurance Group PLC GBR GBP 245, ,020 PartnerRe Ltd. USA USD 230, ,690 Swiss Re AG CHE CHF 226, ,880 MetLife Inc. USA USD 209, ,549 China Pacific Insurance (Group) Co. Ltd., H CHN HKD 199, ,090 Direct Line Insurance Group PLC GBR GBP 182, ,000 China Life Insurance Co. Ltd., H CHN HKD 148, ,831 Lancashire Holdings Ltd. GBR GBP 129, Muenchener Rueckversicherungs-Gesellschaft AG DEU EUR 118, ,238 Storebrand ASA NOR NOK 114, ,800 NN Group NV NLD EUR 114, ,805 PICC Property and Casualty Co. Ltd., H CHN HKD 106, ,444, Materials 215,000 Anhui Conch Cement Co. Ltd., H CHN HKD 806, ,200 Vale SA, ADR, pfd., A BRA USD 509, ,525 CRH PLC IRL EUR 421, ,000 Tata Chemicals Ltd. IND INR 373, ,476 Akzo Nobel NV NLD EUR 312, ,400 Green Seal Holding Ltd. TWN TWD 305, ,185 ThyssenKrupp AG DEU EUR 287, ,000 Semen Indonesia (Persero) Tbk PT IDN IDR 286, POSCO KOR KRW 224, ,774 Mining and Metallurgical Co. Norilsk Nickel OJSC, ADR RUS USD 195, ,271 Anglo American PLC GBR GBP 136, ,327 Freeport-McMoRan Inc., B USA USD 101, ,288 Kumba Iron Ore Ltd. ZAF ZAR 68, ,029, Media 10,610 Comcast Corp., Special A USA USD 610, ,265 Reed Elsevier PLC GBR GBP 484, ,300 Major Cineplex Group PCL, fgn. THA THB 398, ,197 Time Warner Cable Inc. USA USD 334, ,230 Twenty-First Century Fox Inc., A USA USD 316, ,589 Sky PLC GBR GBP 204, ,340 Time Warner Inc. USA USD 199, ,668 Twenty-First Century Fox Inc., B USA USD 135, ,420 The Walt Disney Co. USA USD 133, ,950 News Corp., A USA USD 124, ,200 CBS Corp., B USA USD 66, ,008, Pharmaceuticals, Biotechnology & Life Sciences 16,328 Teva Pharmaceutical Industries Ltd., ADR ISR USD 939, ,560 Merck & Co. Inc. USA USD 883, ,100 Amgen Inc. USA USD 493, ,780 Roche Holding AG CHE CHF 483, ,640 Pfizer Inc. USA USD 362, ,710 Sanofi FRA EUR 339, ,600 GlaxoSmithKline PLC GBR GBP 334, ,820 Merck KGaA DEU EUR 267, ,763 Eli Lilly & Co. USA USD 259, ,139 Hospira Inc. USA USD 253, ,033 Biocon Ltd. IND INR 229, Actavis PLC USA USD 204, ,892 Novartis AG, ADR CHE USD 175, ,430 QIAGEN NV NLD EUR 150, Novartis AG CHE CHF 91, Gilead Sciences Inc. USA USD 65, ,534, Real Estate 352,700 China Vanke Co. Ltd., H CHN HKD 785, ,072,000 Quality Houses PCL, fgn. THA THB 564, ,757,466 Sansiri PCL, fgn. THA THB 504, ,000 Dalian Wanda Commercial Properties Co. Ltd., H CHN HKD 108, ,962, Unaudited Semi-Annual Report 199

202 Franklin Global Equity Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Retailing 141,012 Kingfisher PLC GBR GBP 748, ,227 Truworths International Ltd. ZAF ZAR 375, ,400 Dufry AG CHE CHF 359, ,790 Target Corp. USA USD 211, ,225 Best Buy Co. Inc. USA USD 164, ,284 Marks & Spencer Group PLC GBR GBP 143, ,945 Kohl s Corp. USA USD 118, ,822 Esprit Holdings Ltd. HKG HKD 57, ,180, Semiconductors & Semiconductor Equipment 26,070 MediaTek Inc. TWN TWD 380, Software & Services 28,071 Microsoft Corp. USA USD 1,303, ,530 Tata Consultancy Services Ltd. IND INR 833, ,000 Tencent Holdings Ltd. CHN HKD 725, ,012 Check Point Software Technologies Ltd. ISR USD 393, ,542 Symantec Corp. USA USD 270, ,762 Xerox Corp. USA USD 246, ,480 Oracle Corp. USA USD 111, ,240 SAP SE DEU EUR 87, ,971, Technology Hardware & Equipment 1,031 Samsung Electronics Co. Ltd. KOR KRW 1,250, ,520 Cisco Systems Inc. USA USD 682, ,440 Hewlett-Packard Co. USA USD 659, ,694 Apple Inc. USA USD 628, ,000 Catcher Technology Co. Ltd. TWN TWD 342, ,220 Flextronics International Ltd. SGP USD 181, ,554 Ericsson, B SWE SEK 163, ,000 Konica Minolta Inc. JPN JPY 88, ,997, Telecommunication Services 167,065 Vodafone Group PLC GBR GBP 579, ,500 China Mobile Ltd. CHN HKD 473, ,121 Telefonica SA ESP EUR 362, ,243 Turkcell Iletisim Hizmetleri AS TUR TRY 326, ,350 TDC AS DNK DKK 232, ,930 Koninklijke KPN NV NLD EUR 212, ,000 Singapore Telecommunications Ltd. SGP SGD 176, ,637 HSBC Bank PLC (CRTP Etihad Etisalat Co., 144A) SAU USD 148, ,610 Telenor ASA NOR NOK 134, ,687 Verizon Communications Inc. USA USD 125, ,060 China Telecom Corp. Ltd., ADR CHN USD 120, ,138 Vivendi SA FRA EUR 103, ,289 Mobile TeleSystems, ADR RUS USD 9, ,006, Transportation 27,080 Deutsche Lufthansa AG DEU EUR 453, ,000 China Shipping Development Co. Ltd., H CHN HKD 399, ,811 International Consolidated Airlines Group SA GBR GBP 392, A.P. Moeller-Maersk AS, B DNK DKK 351, ,550 United Parcel Service Inc., B USA USD 283, ,700 Airasia Bhd. MYS MYR 149, ,932 TNT Express NV NLD EUR 93, ,959 CAR Inc. CHN HKD 76, ,200, Utilities 570,500 Perusahaan Gas Negara (Persero) Tbk PT IDN IDR 276, ,424 NRG Energy Inc. USA USD 200, ,940 Enel SpA ITA EUR 116, , TOTAL SHARES 72,679, RIGHTS Energy 2,298 Repsol SA, rts., 01/08/15 ESP EUR 1, TOTAL RIGHTS 1, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 72,680, Unaudited Semi-Annual Report

203 Franklin Global Equity Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Energy 31,100 Gazprom OAO, ADR RUS USD 144, Materials 8,800 Mining and Metallurgical Co. Norilsk Nickel OJSC, ADR RUS USD 125, NewPage Holdings Inc. USA USD 63, , TOTAL SHARES 333, BONDS Corporate Bonds 281,000 iheartcommunications Inc., senior secured note, first lien, 9.00%, 12/15/19 USA USD 277, ,000 Avaya Inc., senior secured note, 144A, 7.00%, 04/01/19 USA USD 147, ,000 Avaya Inc., senior note, 144A, 10.50%, 03/01/21 USA USD 104, ,000 Walter Energy Inc., first lien, 144A, 9.50%, 10/15/19 USA USD 78, ,000 Walter Energy Inc., second lien, 144A, PIK, 11.50%, 04/01/20 USA USD 9, , Government and Municipal Bonds 100,000 Puerto Rico Commonwealth GO, Refunding, Series A, 8.00%, 07/01/35 USA USD 87, TOTAL BONDS 705, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 1,038, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Diversified Financials 28,000 Hightower Holding LLC, pfd., A, 2 ** USA USD 65, TOTAL SHARES 65, BONDS Corporate Bonds 176,000 NewPage Corp., Escrow Account ** USA USD TOTAL BONDS WARRANTS Real Estate 2,439,366 Sansiri PCL, wts., 11/24/17 THA THB 22, TOTAL WARRANTS 22, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 88, TOTAL INVESTMENTS 73,807, ** These securities are submitted to a Fair Valuation Income may be received in additional securities and/or cash Unaudited Semi-Annual Report 201

204 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 61,830 B/E Aerospace Inc. USA USD 3,587, ,473 BAE Systems PLC GBR GBP 3,049, ,225 Safran SA FRA EUR 2,928, ,915 KLX Inc. USA USD 1,275, ,840, Air Freight & Logistics 43,670 United Parcel Service Inc., B USA USD 4,854, ,142 TNT Express NV NLD EUR 2,635, ,490, Airlines 600,710 Deutsche Lufthansa AG DEU EUR 10,052, ,181,519 International Consolidated Airlines Group SA GBR GBP 8,952, ,004, Auto Components 113,584 Cie Generale des Etablissements Michelin, B FRA EUR 10,344, ,891 Pirelli & C. SpA ITA EUR 2,941, ,286, Automobiles 37,803 Volkswagen AG, pfd. DEU EUR 8,446, ,500 Nissan Motor Co. Ltd. JPN JPY 6,708, ,400 Toyota Motor Corp. JPN JPY 5,638, ,590 General Motors Co. USA USD 5,117, ,531 Hyundai Motor Co., pfd., 2 KOR KRW 2,392, ,729 Hyundai Motor Co. KOR KRW 2,275, ,579, Banks 352,574 Citigroup Inc. USA USD 19,077, ,970 JPMorgan Chase & Co. USA USD 14,078, ,101 BNP Paribas SA FRA EUR 11,688, ,504 ING Groep NV, IDR NLD EUR 11,053, ,581 SunTrust Banks Inc. USA USD 10,625, ,221 Commerzbank AG DEU EUR 8,651, ,431 KB Financial Group Inc. KOR KRW 8,541, ,608 HSBC Holdings PLC GBR HKD 8,159, ,824,654 Industrial and Commercial Bank of China Ltd., H CHN HKD 7,901, ,973,397 Barclays PLC GBR GBP 7,489, ,348 UniCredit SpA ITA EUR 6,341, ,630 Credit Agricole SA FRA EUR 6,140, ,500 DBS Group Holdings Ltd. SGP SGD 5,108, ,650 Wells Fargo & Co. USA USD 5,079, ,830 Societe Generale SA FRA EUR 4,268, ,530 PNC Financial Services Group Inc. USA USD 2,785, ,316 Hana Financial Group Inc. KOR KRW 2,730, ,474 HSBC Holdings PLC GBR GBP 2,376, ,337 Citizens Financial Group Inc. USA USD 1,798, ,100 Bangkok Bank PCL, fgn. THA THB 1,534, ,430, Beverages 64,187 PepsiCo Inc. USA USD 6,069, ,656 Coca-Cola Enterprises Inc. USA USD 426, ,496, Biotechnology 73,320 Amgen Inc. USA USD 11,679, ,620 Gilead Sciences Inc. USA USD 1,566, ,245, Capital s 421,334 Credit Suisse Group AG CHE CHF 10,628, ,970 Morgan Stanley USA USD 9,310, ,939, Chemicals 112,185 Akzo Nobel NV NLD EUR 7,825, ,203 Arkema FRA EUR 4,411, ,237, Commercial Services & Supplies 637,168 Serco Group PLC GBR GBP 1,595, Unaudited Semi-Annual Report

205 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Communications Equipment 369,430 Cisco Systems Inc. USA USD 10,275, ,407 Ericsson, B SWE SEK 2,412, ,688, Construction & Engineering 202,800 FLSmidth & Co. AS DNK DKK 8,972, ,944,000 Sinopec Engineering Group Co. Ltd. CHN HKD 4,024, ,996, Construction Materials 279,442 CRH PLC IRL EUR 6,728, ,778,000 Xinyi Glass Holdings Ltd. CHN HKD 4,930, ,754 CRH PLC IRL GBP 595, ,255, Consumer Finance 131,970 Ally Financial Inc. USA USD 3,117, ,780 Capital One Financial Corp. USA USD 1,550, ,667, Containers & Packaging 312,672 Rexam PLC GBR GBP 2,211, Diversified Financial Services 33,679 CIT Group Inc. USA USD 1,610, Diversified Telecommunication Services 591,411 Telefonica SA ESP EUR 8,530, ,309,020 Koninklijke KPN NV NLD EUR 7,342, ,581,000 Singapore Telecommunications Ltd. SGP SGD 4,654, ,620 China Telecom Corp. Ltd., ADR CHN USD 4,615, ,773 TDC AS DNK DKK 3,873, ,390,132 Telecom Italia SpA ITA EUR 3,618, ,061 Vivendi SA FRA EUR 2,454, ,480 Telenor ASA NOR NOK 2,362, ,962 Verizon Communications Inc. USA USD 2,056, ,710 Orange SA FRA EUR 1,364, ,872, Electric Utilities 1,451,251 Enel SpA ITA EUR 6,490, Electrical Equipment 232,621 Dongfang Electric Corp. Ltd., H CHN HKD 427, Electronic Equipment, Instruments & Component 172,160 Flextronics International Ltd. SGP USD 1,924, Energy Equipment & Services 155,574 Baker Hughes Inc. USA USD 8,723, ,020 Noble Corp. PLC USA USD 4,838, ,540 Technip SA FRA EUR 1,108, ,900 Transocean Ltd. USA USD 987, ,488 Saipem SpA ITA EUR 726, ,821 Ensco PLC, A USA USD 294, ,373 Paragon Offshore PLC USA USD 161, ,840, Food & Staples Retailing 394,131 Metro AG DEU EUR 12,070, ,756 CVS Health Corp. USA USD 9,607, ,338 Walgreens Boots Alliance Inc. USA USD 9,093, ,599,076 Tesco PLC GBR GBP 4,710, ,490 Empire Co. Ltd., A CAN CAD 4,186, ,669, Health Care Equipment & Supplies 284,524 Medtronic Inc. USA USD 20,542, ,419 Stryker Corp. USA USD 7,585, ,910 Getinge AB, B SWE SEK 5,446, ,575, Health Care Providers & Services 34,076 Cigna Corp. USA USD 3,506, Hotels, Restaurants & Leisure 165,696 Accor SA FRA EUR 7,486, Independent Power and Renewable Electricity Producers 75,607 NRG Energy Inc. USA USD 2,037, Unaudited Semi-Annual Report 203

206 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Industrial Conglomerates 307,234 Koninklijke Philips NV NLD EUR 8,977, ,582 Siemens AG DEU EUR 4,490, ,088 Jardine Strategic Holdings Ltd. HKG USD 2,089, ,801 Jardine Matheson Holdings Ltd. HKG USD 1,450, ,007, Insurance 264,822 American International Group Inc. USA USD 14,832, ,320,427 RSA Insurance Group PLC GBR GBP 8,952, ,454 The Allstate Corp. USA USD 8,251, ,766,013 Direct Line Insurance Group PLC GBR GBP 8,018, ,112 Assicurazioni Generali SpA ITA EUR 7,880, ,410 Swiss Re AG CHE CHF 6,428, ,507 AXA SA FRA EUR 5,960, ,604 Aviva PLC GBR GBP 5,940, ,112,841 China Pacific Insurance (Group) Co. Ltd., H CHN HKD 5,618, ,970 Lancashire Holdings Ltd. GBR GBP 5,507, ,800,237 PICC Property and Casualty Co. Ltd., H CHN HKD 5,445, ,109 NN Group NV NLD EUR 5,444, ,410 Zurich Insurance Group AG CHE CHF 5,144, ,720 ACE Ltd. USA USD 4,333, ,240 PartnerRe Ltd. USA USD 4,250, ,627 Friends Life Group Ltd. GBR GBP 3,799, ,290 MetLife Inc. USA USD 3,693, ,659 Storebrand ASA NOR NOK 3,633, ,260 Muenchener Rueckversicherungs-Gesellschaft AG DEU EUR 3,060, White Mountains Insurance Group Ltd. USA USD 104, ,302, IT Services 156,540 Xerox Corp. USA USD 2,169, Life Sciences Tools & Services 100,300 QIAGEN NV NLD EUR 2,349, Machinery 104,880 Navistar International Corp. USA USD 3,511, ,841 Caterpillar Inc. USA USD 1,541, ,893 CNH Industrial NV GBR EUR 1,044, ,864 CNH Industrial NV GBR EUR 769, ,866, Marine 3,885 A.P. Moeller-Maersk AS, B DNK DKK 7,807, Media 225,961 Comcast Corp., Special A USA USD 13,007, ,195 CBS Corp., B USA USD 6,540, ,590 Twenty-First Century Fox Inc., A USA USD 6,436, ,555 Time Warner Inc. USA USD 5,685, ,160 Reed Elsevier PLC GBR GBP 5,215, ,070 The Walt Disney Co. USA USD 4,621, ,425 Sky PLC GBR GBP 4,518, ,704,787 Nine Entertainment Co. Holdings Ltd. AUS AUD 4,218, ,424,000 Sinomedia Holding Ltd. CHN HKD 4,193, ,776 Time Warner Cable Inc. USA USD 3,919, ,298 Twenty-First Century Fox Inc., B USA USD 3,773, ,522 News Corp., A USA USD 3,695, ,132 RTL Group SA DEU EUR 3,363, ,700 Reed Elsevier NV GBR EUR 2,105, ,293, Metals & Mining 230,841 ThyssenKrupp AG DEU EUR 5,938, ,500 Voestalpine AG AUT EUR 5,932, ,400 POSCO KOR KRW 5,642, ,837 Mining and Metallurgical Co. Norilsk Nickel OJSC, ADR RUS USD 4,434, ,408 Anglo American PLC GBR GBP 1,822, ,726 Freeport-McMoRan Inc., B USA USD 1,325, ,095, Multiline Retail 1,096,519 Marks & Spencer Group PLC GBR GBP 8,183, ,920 Target Corp. USA USD 4,320, ,567 Kohl s Corp. USA USD 1,194, ,698, Unaudited Semi-Annual Report

207 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Oil, Gas & Consumable Fuels 4,164,061 China Shenhua Energy Co. Ltd., H CHN HKD 12,297, ,511,613 Talisman Energy Inc. CAN CAD 11,845, ,261,157 BP PLC GBR GBP 8,079, ,710 Total SA, B FRA EUR 7,753, ,419 Eni SpA ITA EUR 6,046, ,450 Royal Dutch Shell PLC, A GBR EUR 5,671, ,510 Royal Dutch Shell PLC, B GBR GBP 5,482, ,300 BG Group PLC GBR GBP 4,723, ,320 Apache Corp. USA USD 4,720, ,867,400 Kunlun Energy Co. Ltd. CHN HKD 4,680, ,180 Galp Energia SGPS SA, B PRT EUR 3,582, ,500 Talisman Energy Inc. CAN USD 3,456, ,262 Petroleo Brasileiro SA, ADR, pfd. BRA USD 3,102, ,110 Chevron Corp. USA USD 2,929, ,180 Anadarko Petroleum Corp. USA USD 2,819, ,141 Marathon Oil Corp. USA USD 2,380, ,500 Murphy Oil Corp. USA USD 1,086, ,930 Repsol SA ESP EUR 1,033, ,218 CONSOL Energy Inc. USA USD 717, ,130 Royal Dutch Shell PLC, A GBR GBP 37, ,446, Paper & Forest Products 69,770 International Paper Co. USA USD 3,738, Personal Products 248,120 Avon Products Inc. USA USD 2,329, Pharmaceuticals 361,704 Teva Pharmaceutical Industries Ltd., ADR ISR USD 20,801, ,460 Merck & Co. Inc. USA USD 14,791, ,050 Roche Holding AG CHE CHF 9,515, ,503 Eli Lilly & Co. USA USD 8,934, ,700 Pfizer Inc. USA USD 8,370, ,040 Sanofi FRA EUR 8,151, ,337 GlaxoSmithKline PLC GBR GBP 7,921, ,650 Merck KGaA DEU EUR 5,944, ,045 Novartis AG, ADR CHE USD 4,915, ,785 Actavis PLC USA USD 4,835, ,663 Hospira Inc. USA USD 3,286, ,530 Novartis AG CHE CHF 885, ,353, Real Estate Management & Development 406,800 Dalian Wanda Commercial Properties Co. Ltd., H CHN HKD 2,589, ,865 Dolphin Capital Investors Ltd. GRC GBP 67, ,656, Road & Rail 1,293,253 CAR Inc. CHN HKD 1,741, Semiconductors & Semiconductor Equipment 31,928 SK Hynix Semiconductor Inc. KOR KRW 1,393, Software 455,210 Microsoft Corp. USA USD 21,144, ,746 Symantec Corp. USA USD 5,098, ,990 Check Point Software Technologies Ltd. ISR USD 3,220, ,800 SAP SE DEU EUR 2,382, ,340 Oracle Corp. USA USD 2,083, ,930, Specialty Retail 2,683,873 Kingfisher PLC GBR GBP 14,244, ,376 Dufry AG CHE CHF 6,500, ,990 Best Buy Co. Inc. USA USD 4,989, ,201,922 China ZhengTong Auto Services Holdings Ltd. CHN HKD 3,167, ,463,500 Baoxin Auto Group Ltd. CHN HKD 2,584, ,485, Technology Hardware, Storage & Peripherals 19,041 Samsung Electronics Co. Ltd. KOR KRW 23,101, ,501 Hewlett-Packard Co. USA USD 12,982, ,960 Apple Inc. USA USD 7,501, ,700 Konica Minolta Inc. JPN JPY 4,099, ,543 Samsung Electronics Co. Ltd., pfd. KOR KRW 2,415, ,099, Unaudited Semi-Annual Report 205

208 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Tobacco 79,363 Lorillard Inc. USA USD 4,995, ,051 British American Tobacco PLC GBR GBP 4,258, ,330 Altria Group Inc. USA USD 2,775, ,790 Philip Morris International Inc. USA USD 1,204, ,233, Wireless Telecommunication Services 4,190,318 Vodafone Group PLC GBR GBP 14,542, ,153,637 Turkcell Iletisim Hizmetleri AS TUR TRY 7,069, ,000 China Mobile Ltd. CHN HKD 2,234, ,877 Mobile TeleSystems, ADR RUS USD 250, ,095, TOTAL SHARES 1,097,505, RIGHTS Oil, Gas & Consumable Fuels 54,930 Repsol SA, rts., 01/08/15 ESP EUR 30, TOTAL RIGHTS 30, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,097,535, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Paper & Forest Products 6,404 NewPage Holdings Inc. USA USD 581, TOTAL SHARES 581, BONDS Corporate Bonds 2,808,000 iheartcommunications Inc., senior secured note, first lien, 9.00%, 12/15/19 USA USD 2,776, ,357,000 Walter Energy Inc., first lien, 144A, 9.50%, 10/15/19 USA USD 1,803, ,658,000 Avaya Inc., senior secured note, 144A, 7.00%, 04/01/19 USA USD 1,624, ,590,000 NGPL PipeCo LLC, senior secured note, 144A, 9.625%, 06/01/19 USA USD 1,601, ,418,000 Avaya Inc., senior note, 144A, 10.50%, 03/01/21 USA USD 1,219, ,000 First Data Corp., senior note, 11.75%, 08/15/21 USA USD 972, ,000 Baggot Securities Ltd., secured bond, Reg S, 10.24%, Perpetual IRL EUR 703, ,000 NGPL PipeCo LLC, secured note, 144A, 7.119%, 12/15/17 USA USD 429, ,000 State Export-Import Bank of Ukraine, (BIZ FIN), loan participation, Reg S, 8.75%, 01/22/18 UKR USD 297, ,000 Walter Energy Inc., second lien, 144A, PIK, 11.50%, 04/01/20 USA USD 211, ,640, Government and Municipal Bonds 3,336,460,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 13,637, ,590,000 Government of Portugal, Reg S, 3.875%, 02/15/30 PRT EUR 12,195, ,803,080,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 10,887, ,000,000 Government of Malaysia, senior note, 3.172%, 07/15/16 MYS MYR 10,808, ,660,000 Government of Poland, 4.75%, 10/25/16 POL PLN 10,601, ,451,260 Government of Mexico, 6.25%, 06/16/16 MEX MXN 10,220, ,943,000,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 8,223, ,240,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 8,154, ,613,420 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 7,697, ,027,150 Government of Mexico, 7.25%, 12/15/16 MEX MXN 7,439, ,350,000 Government of Poland, Strip, 07/25/16 POL PLN 6,962, ,600 Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 6,144, ,610,000 Government of Portugal, Reg S, 5.125%, 10/15/24 PRT USD 5,915, ,200,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 5,096, ,330,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 4,867, ,137,280,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 4,864, ,359,025 Government of Russia, senior bond, Reg S, 7.50%, 03/31/30 RUS USD 4,555, ,040,860,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 4,528, ,520 Nota Do Tesouro Nacional, 10.00%, 01/01/23 BRA BRL 4,510, ,038,280,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 4,353, ,789,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 4,225, ,310,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 3,770, ,930,890,000 Korea Moary Stabilization Bond, senior note, 2.79%, 06/02/16 KOR KRW 3,629, ,460 Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 3,486, ,427,000,000 Government of Indonesia, FR34, 12.80%, 06/15/21 IDN IDR 3,361, ,290,000,000 Government of Indonesia, FR46, 9.50%, 07/15/23 IDN IDR 2,965, ,700,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 2,810, ,990,000 Government of Hungary, senior note, Reg S, 5.75%, 06/11/18 HUN EUR 2,749, ,897 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 2,717, ,860 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 2,686, ,853,440,000 Korea Moary Stabilization Bond, senior note, 2.78%, 02/02/16 KOR KRW 2,628, ,580 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 2,421, Unaudited Semi-Annual Report

209 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 6,825,000 Government of Poland, 5.75%, 09/23/22 POL PLN 2,387, ,507,000 Government of Poland, Strip, 01/25/16 POL PLN 2,358, ,300,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 2,115, ,200 Government of Mexico, 7.75%, 12/14/17 MEX MXN 2,011, ,800,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 1,914, ,050,900,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 1,907, ,000,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 1,768, ,340,000 Government of Romania, senior note, Reg S, 5.25%, 06/17/16 ROM EUR 1,737, ,842,800,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 1,700, ,755 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 1,647, ,450,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 1,547, ,600 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 1,513, ,500,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 1,458, ,561,000 Puerto Rico Commonwealth GO, Refunding, Series A, 8.00%, 07/01/35 USA USD 1,363, ,180,000 Government of Slovenia, senior note, Reg S, 5.50%, 10/26/22 SVN USD 1,311, ,470,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 1,232, ,120,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 1,214, ,315,000,000 Korea Moary Stabilization Bond, senior note, 2.07%, 12/02/16 KOR KRW 1,201, ,050,000 Government of Slovenia, senior note, Reg S, 5.85%, 05/10/23 SVN USD 1,200, ,060,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 1,150, ,065,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 1,148, ,124,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 1,147, ,800 Letra Tesouro Nacional, Strip, 01/01/17 BRA BRL 1,122, ,585,000 Government of Poland, 5.00%, 04/25/16 POL PLN 1,054, ,000 Government of Hungary, senior note, Reg S, 4.375%, 07/04/17 HUN EUR 1,007, ,230 Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 981, ,000 Government of Lithuania, Reg S, 7.375%, 02/11/20 LTU USD 918, ,860,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 878, ,193,000,000 Government of Indonesia, FR35, 12.90%, 06/15/22 IDN IDR 851, ,000 Government of Ireland, 4.50%, 04/18/20 IRL EUR 832, ,380 Nota Do Tesouro Nacional, senior note, 10.00%, 01/01/19 BRA BRL 824, ,000 Government of Hungary, senior note, Reg S, 3.875%, 02/24/20 HUN EUR 802, ,200 Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 788, ,490,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 711, ,000 Government of Ireland, 5.90%, 10/18/19 IRL EUR 706, ,170,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 699, ,000 Government of Hungary, senior note, 6.375%, 03/29/21 HUN USD 698, ,000 Government of Iceland, Reg S, 5.875%, 05/11/22 ISL USD 674, ,000 Government of Serbia, senior note, Reg S, 4.875%, 02/25/20 SER USD 642, ,812,000,000 Government of Indonesia, FR47, 10.00%, 02/15/28 IDN IDR 630, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 629, ,800,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 596, ,000 Government of Hungary, 4.125%, 02/19/18 HUN USD 592, ,900,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 580, ,150,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 578, ,160 Letra Tesouro Nacional, Strip, 01/01/18 BRA BRL 567, ,000 Government of Ukraine, senior note, Reg S, 7.95%, 02/23/21 UKR USD 547, ,020,000 Government of Sri Lanka, 10.60%, 09/15/19 LKA LKR 535, ,260,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 510, ,868,000,000 Government of Indonesia, FR42, 10.25%, 07/15/27 IDN IDR 462, ,420,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 426, ,000 Government of Lithuania, Reg S, 6.125%, 03/09/21 LTU USD 384, ,934,000,000 Government of Indonesia, FR43, 10.25%, 07/15/22 IDN IDR 361, ,660,000 Government of Sri Lanka, 10.60%, 07/01/19 LKA LKR 358, ,900,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 356, ,000 Government of Serbia, senior note, Reg S, 5.25%, 11/21/17 SER USD 349, ,900,000 Korea Moary Stabilization Bond, senior note, 2.22%, 10/02/16 KOR KRW 349, ,600,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 340, ,799 Mexican Udibonos, Index Linked, 5.00%, 06/16/16 MEX MXN 330, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 328, ,206 Mexican Udibonos, Index Linked, 3.50%, 12/14/17 MEX MXN 255, Nota Do Tesouro Nacional, 10.00%, 01/01/21 BRA BRL 254, ,000 Government of Hungary, senior note, Reg S, 3.50%, 07/18/16 HUN EUR 251, ,910,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 225, ,000 Government of Poland, 4.75%, 04/25/17 POL PLN 216, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 206, ,500 Government of Portugal, senior note, Reg S, 5.65%, 02/15/24 PRT EUR 177, ,607 Mexican Udibonos, Index Linked, 4.00%, 06/13/19 MEX MXN 152, ,000 Government of Ukraine, senior note, Reg S, 6.25%, 06/17/16 UKR USD 128, ,000 Financing of Infrastructure Projects State Enterprise, Reg S, 7.40%, 04/20/18 UKR USD 121, ,444 Mexican Udibonos, Index Linked, 2.50%, 12/10/20 MEX MXN 114, ,500,000 Government of Sri Lanka, A, 6.40%, 08/01/16 LKA LKR 102, ,020,000,000 Government of Indonesia, FR39, 11.75%, 08/15/23 IDN IDR 102, ,260,000 Government of Sri Lanka, B, 8.50%, 07/15/18 LKA LKR 97, ,400,000 Government of Sri Lanka, A, 5.80%, 01/15/17 LKA LKR 92, ,100,000 Government of Sri Lanka, B, 6.40%, 10/01/16 LKA LKR 91, ,470,000 Government of the Philippines, senior bond, 7.00%, 01/27/16 PHL PHP 80, Unaudited Semi-Annual Report 207

210 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 4,800,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 74, ,300 Government of Portugal, senior bond, Reg S, 4.95%, 10/25/23 PRT EUR 67, ,070,000 Government of Sri Lanka, 11.20%, 07/01/22 LKA LKR 64, ,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 60, ,450,000 Government of Sri Lanka, A, 7.50%, 08/15/18 LKA LKR 49, ,020,000 Government of the Philippines, senior bond, 9.125%, 09/04/16 PHL PHP 48, ,000,000 Korea Treasury Bond, senior bond, 5.00%, 09/10/16 KOR KRW 33, ,650,000 Government of Sri Lanka, 8.25%, 03/01/17 LKA LKR 20, ,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 17, ,280, Securities Maturing Within One Year 30,523,900,000 Korea Moary Stabilization Bond, senior note, 2.90%, 12/02/15 KOR KRW 28,114, ,677,860 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 21,999, ,900,000 Moary Authority of Singapore Treasury Bill, 0.00%, 03/27/15 SGP SGD 14,998, ,021,000 Government of Poland, 6.25%, 10/24/15 POL PLN 14,342, ,062,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 13,846, ,841,310 Government of Mexico, 8.00%, 12/17/15 MEX MXN 13,044, ,100,000 Bank of Negara Moary Note, 0.00%, 04/28/15 MYS MYR 9,649, ,270,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/20/15 SGP SGD 7,749, ,430,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 6,976, ,840,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 6,168, ,750,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 5,890, ,820 Government of Mexico, 6.00%, 06/18/15 MEX MXN 5,859, ,476,340 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 5,669, ,760,000 Government of Sweden, 4.50%, 08/12/15 SWE SEK 5,233, ,893,500,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 4,486, ,817,980,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 4,409, ,533 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 4,327, ,561,130,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 4,196, ,400,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 3,826, ,067,100,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 3,720, ,159,000 Canada Treasury Bill, 0.00%, 02/12/15 CAN CAD 3,577, ,231,900 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 3,516, ,573,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 3,342, ,813,950 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 3,174, ,648,080 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 3,133, ,571,000 Government of Canada, 1.00%, 02/01/15 CAN CAD 3,075, ,510,000 Moary Authority of Singapore Treasury Bill, 0.00%, 02/13/15 SGP SGD 2,647, ,180,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 2,614, ,030,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 2,590, ,570,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 2,418, ,527,070 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 2,337, ,240,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 2,049, ,038,290 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 2,011, ,030,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 1,721, ,915,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 1,690, ,690,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 1,594, ,803,000 Canada Treasury Bill, 0.00%, 03/12/15 CAN CAD 1,550, ,280,740 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 1,523, ,882,250 Mexico Treasury Bill, 0.00%, 03/19/15 MEX MXN 1,268, ,570,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/02/15 SGP SGD 1,185, ,400 Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 1,169, ,223,830,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 1,123, ,820,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 1,093, ,400,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 1,069, ,430,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 975, ,370,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 958, ,070,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 862, ,020,000 Bank of Negara Moary Note, 0.00%, 06/04/15 MYS MYR 851, ,850,000 Bank of Negara Moary Note, 0.00%, 05/05/15 MYS MYR 805, ,150,000 Korea Moary Stabilization Bond, senior note, 2.66%, 06/09/15 KOR KRW 802, ,620,000 Bank of Negara Moary Note, 0.00%, 02/10/15 MYS MYR 746, ,492,000 Government of Poland, 5.50%, 04/25/15 POL PLN 712, ,360,000 Bank of Negara Moary Note, 0.00%, 08/18/15 MYS MYR 661, ,330,000 Bank of Negara Moary Note, 0.00%, 04/16/15 MYS MYR 660, ,320 Mexico Treasury Bill, 0.00%, 12/10/15 MEX MXN 633, ,800,000 Korea Moary Stabilization Bond, 0.00%, 01/13/15 KOR KRW 568, ,993,000 Government of Poland, Strip, 07/25/15 POL PLN 557, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 02/23/15 SGP SGD 542, ,000 Government of Canada, 1.50%, 08/01/15 CAN CAD 479, ,000,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 478, ,000 Canada Treasury Bill, 0.00%, 04/23/15 CAN CAD 420, ,500,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 418, ,800,000 Korea Moary Stabilization Bond, senior note, 2.13%, 10/08/15 KOR KRW 394, ,390,000 Bank of Negara Moary Note, 0.00%, 08/04/15 MYS MYR 389, ,840,000 Philippine Treasury Bill, 0.00%, 10/07/15 PHL PHP 348, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/09/15 SGP SGD 347, Unaudited Semi-Annual Report

211 Franklin Global Fundamental Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 1,160,000 Bank of Negara Moary Note, 0.00%, 06/16/15 MYS MYR 326, ,130,000 Bank of Negara Moary Note, 0.00%, 06/30/15 MYS MYR 317, ,070,000 Bank of Negara Moary Note, 0.00%, 09/08/15 MYS MYR 299, ,240,000 Philippine Treasury Bill, 0.00%, 12/02/15 PHL PHP 268, ,000 Bank of Negara Moary Note, 0.00%, 09/22/15 MYS MYR 195, ,730,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 193, ,240,000 Government of Sri Lanka, A, 6.50%, 07/15/15 LKA LKR 185, ,000 Bank of Negara Moary Note, 0.00%, 06/03/15 MYS MYR 155, ,260,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 154, ,470,000 Philippine Treasury Bill, 0.00%, 06/03/15 PHL PHP 143, ,030 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 137, ,000 Bank of Negara Moary Note, 0.00%, 04/07/15 MYS MYR 136, ,000 Bank of Negara Moary Note, 0.00%, 03/12/15 MYS MYR 127, ,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 122, ,940,000 Philippine Treasury Bill, 0.00%, 11/04/15 PHL PHP 108, ,980,000 Government of Sri Lanka, A, 8.50%, 11/01/15 LKA LKR 100, ,260,000 Philippine Treasury Bill, 0.00%, 05/06/15 PHL PHP 94, ,000 Government of Ukraine, senior bond, Reg S, 4.95%, 10/13/15 UKR EUR 82, ,000 Bank of Negara Moary Note, 0.00%, 10/27/15 MYS MYR 61, ,940,000 Philippine Treasury Bill, 0.00%, 09/02/15 PHL PHP 42, ,590,000 Philippine Treasury Bill, 0.00%, 04/08/15 PHL PHP 35, ,400 Mexico Treasury Bill, 0.00%, 07/23/15 MEX MXN 10, ,000 Government of Sri Lanka, A, 11.75%, 03/15/15 LKA LKR 6, ,000 Philippine Treasury Bill, 0.00%, 08/05/15 PHL PHP 2, ,000 Philippine Treasury Bill, 0.00%, 07/08/15 PHL PHP ,913, TOTAL BONDS 515,834, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 516,415, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Diversified Financial Services 232,000 Hightower Holding LLC, pfd., A, 2 ** USA USD 539, ,000 Hightower Holding LLC, pfd., A ** USA USD 248, , TOTAL SHARES 788, BONDS Corporate Bonds 1,601,000 NewPage Corp., Escrow Account ** USA USD TOTAL BONDS TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 788, TOTAL INVESTMENTS 1,614,739, Floating Rates are indicated as at December 31, 2014 ** These securities are submitted to a Fair Valuation Income may be received in additional securities and/or cash Unaudited Semi-Annual Report 209

212 Franklin Global Government Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Government and Municipal Bonds 900,000 U.S. Treasury Note, 0.375%, 01/15/16 USA USD 900, ,000 U.S. Treasury Note, 1.875%, 08/31/17 USA USD 818, ,000 U.S. Treasury Note, 1.00%, 08/31/16 USA USD 805, ,000 Italy Treasury Bond, Reg S, 3.50%, 03/01/30 ITA EUR 744, ,000 United Kingdom Treasury Bond, Reg S, 4.00%, 09/07/16 GBR GBP 743, ,000 Government of Germany, 1.50%, 02/15/23 DEU EUR 729, ,000 Italy Treasury Bond, senior bond, Reg S, 4.75%, 09/01/28 ITA EUR 689, ,000 Government of Finland, senior bond, Reg S, 2.00%, 04/15/24 FIN EUR 678, ,000 U.S. Treasury Note, 2.625%, 11/15/20 USA USD 626, ,000 U.S. Treasury Bond, 4.375%, 11/15/39 USA USD 590, ,000 Queensland Treasury Corp., senior bond, Reg S, 5.75%, 07/22/24 AUS AUD 545, ,000 Italy Treasury Bond, senior bond, 5.50%, 09/01/22 ITA EUR 543, ,000 Government of Spain, senior note, Reg S, 5.15%, 10/31/28 ESP EUR 487, ,150,000 Government of Poland, 5.75%, 04/25/29 POL PLN 442, ,000 Government of Canada, 2.75%, 06/01/22 CAN CAD 418, ,000 Queensland Treasury Corp., senior note, Reg S, 6.00%, 07/21/22 AUS AUD 395, ,300,000 Government of Poland, 3.25%, 07/25/25 POL PLN 392, ,000 Government of Mexico, 8.00%, 12/07/23 MEX MXN 391, ,000 Government of Singapore, 2.375%, 04/01/17 SGP SGD 352, ,000 Government of France, 2.25%, 05/25/24 FRA EUR 344, ,000 Government of Poland, 4.00%, 10/25/23 POL PLN 286, ,000,000 Government of Malaysia, senior note, 3.654%, 10/31/19 MYS MYR 283, ,000 Government of the Netherlands, Reg S, 4.50%, 07/15/17 NLD EUR 269, ,000 Government of France, 1.75%, 11/25/24 FRA EUR 263, ,000 Government of Peru, senior bond, 6.55%, 03/14/37 PER USD 260, ,000 Government of Mexico, 7.75%, 12/14/17 MEX MXN 259, ,000 Government of Lithuania, senior note, Reg S, 6.625%, 02/01/22 LTU USD 242, ,531 U.S. Treasury Bond, Index Linked, 3.375%, 04/15/32 USA USD 228, ,000 Government of Malaysia, senior bond, 4.24%, 02/07/18 MYS MYR 217, ,000 Government of Chile, 3.875%, 08/05/20 CHL USD 215, ,000 Government of Indonesia, Reg S, 4.875%, 05/05/21 IDN USD 212, ,455 U.S. Treasury Note, Index Linked, 2.00%, 01/15/16 USA USD 182, ,321 U.S. Treasury Note, Index Linked, 1.25%, 07/15/20 USA USD 171, ,000 Government of Mexico, senior bond, 5.95%, 03/19/19 MEX USD 113, ,846, Securities Maturing Within One Year 800,000 U.S. Treasury Note, 2.125%, 05/31/15 USA USD 806, ,000 United Kingdom Treasury Note, Reg S, 2.75%, 01/22/15 GBR GBP 390, ,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 257, ,534 U.S. Treasury Note, Index Linked, 1.625%, 01/15/15 USA USD 186, ,000 Government of Germany, 2.25%, 04/10/15 DEU EUR 182, ,822, TOTAL BONDS 16,669, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 16,669, TOTAL INVESTMENTS 16,669, Unaudited Semi-Annual Report

213 Franklin Global Growth Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 55,000 MTU Aero Engines AG DEU EUR 4,802, Banks 49,000 Signature Bank USA USD 6,172, ,000 Bank of Nova Scotia CAN CAD 4,396, ,000 United Overseas Bank Ltd. SGP SGD 4,351, ,920, Biotechnology 84,000 Alkermes PLC USA USD 4,919, ,000 CSL Ltd. AUS AUD 3,680, ,599, Capital s 790,000 Aberdeen Asset Management PLC GBR GBP 5,321, ,500 Partners Group Holding AG CHE CHF 4,804, ,126, Chemicals 16,000 Syngenta AG CHE CHF 5,149, ,000 W.R. Grace & Co. USA USD 5,055, ,000 Praxair Inc. USA USD 4,275, ,481, Consumer Finance 65,000 Discover Financial Services USA USD 4,256, Diversified Financial Services 22,000 Intercontinental Exchange Inc. USA USD 4,824, Diversified Telecommunication Services 118,000 Level 3 Communications Inc. USA USD 5,826, Electrical Equipment 50,000 Rockwell Automation Inc. USA USD 5,560, Energy Equipment & Services 64,000 Schlumberger Ltd. USA USD 5,466, ,000 FMC Technologies Inc. USA USD 4,356, ,822, Health Care Equipment & Supplies 73,000 Cochlear Ltd. AUS AUD 4,631, Health Care Providers & Services 103,000 Catamaran Corp. USA USD 5,330, Health Care Technology 46,000 athenahealth Inc. USA USD 6,702, Hotels, Restaurants & Leisure 8,500 Chipotle Mexican Grill Inc. USA USD 5,818, Household Products 57,000 Reckitt Benckiser Group PLC GBR GBP 4,628, Industrial Conglomerates 63,000 Danaher Corp. USA USD 5,399, Inter & Catalog Retail 5,200 The Priceline Group Inc. USA USD 5,929, Inter Software & Services 25,000 MercadoLibre Inc. ARG USD 3,191, IT Services 20,500 Visa Inc., A USA USD 5,375, Leisure Products 35,000 Polaris Industries Inc. USA USD 5,293, Media 110,000 Discovery Communications Inc., A USA USD 3,789, ,000 Discovery Communications Inc., C USA USD 2,191, ,981, Pharmaceuticals 19,000 Roche Holding AG CHE CHF 5,158, Unaudited Semi-Annual Report 211

214 Franklin Global Growth Fund Schedule of Investments as of December 31, 2014 (continued) face Professional Services 2,900 SGS SA CHE CHF 5,965, ,000 Verisk Analytics Inc., A USA USD 5,380, ,345, Semiconductors & Semiconductor Equipment 340,000 ARM Holdings PLC GBR GBP 5,273, ,000 ASML Holding NV NLD EUR 3,032, ,305, Software 70,000 Adobe Systems Inc. USA USD 5,089, ,000 Dassault Systemes SA FRA EUR 4,097, ,186, Technology Hardware, Storage & Peripherals 40,000 Apple Inc. USA USD 4,415, Textiles, Apparel & Luxury Goods 185,000 Burberry Group PLC GBR GBP 4,717, Companies & Distributors 6,800,000 Noble Group Ltd. HKG SGD 5,851, TOTAL SHARES 190,480, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 190,480, TOTAL INVESTMENTS 190,480, Unaudited Semi-Annual Report

215 Franklin Global Growth and Value Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 10,000 MTU Aero Engines AG DEU EUR 873, Air Freight & Logistics 54,680 TNT Express NV NLD EUR 366, Airlines 162,226 Qantas Airways Ltd. AUS AUD 317, ,930 Deutsche Lufthansa AG DEU EUR 266, , Auto Components 3,120 Cie Generale des Etablissements Michelin, B FRA EUR 284, Hyundai Mobis Co. Ltd. KOR KRW 148, ,400 Unipres Corp. JPN JPY 122, , Automobiles 47,800 Nissan Motor Co. Ltd. JPN JPY 421, ,900 Toyota Motor Corp. JPN JPY 309, ,300 General Motors Co. USA USD 254, , Banks 9,000 Signature Bank USA USD 1,133, ,000 United Overseas Bank Ltd. SGP SGD 814, ,500 Bank of Nova Scotia CAN CAD 770, ,700 BNP Paribas SA FRA EUR 637, ,238 Citigroup Inc. USA USD 553, ,810 JPMorgan Chase & Co. USA USD 488, ,370 HSBC Holdings PLC GBR GBP 487, ,270 Credit Agricole SA FRA EUR 355, ,674 UniCredit SpA ITA EUR 352, ,070 Hana Financial Group Inc. KOR KRW 294, ,600 DBS Group Holdings Ltd. SGP SGD 273, ,704 ING Groep NV, IDR NLD EUR 258, ,630 Barclays PLC GBR GBP 180, ,602, Beverages 9,800 Suntory Beverage & Food Ltd. JPN JPY 341, Biotechnology 14,700 Alkermes PLC USA USD 860, ,000 CSL Ltd. AUS AUD 707, ,210 Amgen Inc. USA USD 670, ,310 Gilead Sciences Inc. USA USD 500, ,739, Building Products 7,650 Compagnie de Saint-Gobain FRA EUR 326, Capital s 150,000 Aberdeen Asset Management PLC GBR GBP 1,010, ,000 Partners Group Holding AG CHE CHF 873, ,670 Morgan Stanley USA USD 297, ,850 Credit Suisse Group AG CHE CHF 223, ,272 MLP AG DEU EUR 162, ,567, Chemicals 2,900 Syngenta AG CHE CHF 933, ,000 W.R. Grace & Co. USA USD 858, ,400 Praxair Inc. USA USD 699, ,590 Akzo Nobel NV NLD EUR 389, ,670 Chemtura Corp. USA USD 214, ,320 The Dow Chemical Co. USA USD 151, ,247, Commercial Services & Supplies 4,820 The ADT Corp. USA USD 174, Construction Materials 16,500 CRH PLC IRL EUR 397, Consumer Finance 12,500 Discover Financial Services USA USD 818, ,500 Capital One Financial Corp. USA USD 288, ,107, Unaudited Semi-Annual Report 213

216 Franklin Global Growth and Value Fund Schedule of Investments as of December 31, 2014 (continued) face Diversified Financial Services 3,600 Intercontinental Exchange Inc. USA USD 789, ,500 Voya Financial Inc. USA USD 317, ,107, Diversified Telecommunication Services 20,200 Level 3 Communications Inc. USA USD 997, ,330 China Telecom Corp. Ltd., H CHN HKD 461, ,943 Telefonica SA ESP EUR 374, ,690 Singapore Telecommunications Ltd. SGP SGD 355, ,630 Telenor ASA NOR NOK 316, ,505, Electrical Equipment 8,700 Rockwell Automation Inc. USA USD 967, Electronic Equipment, Instruments & Components 400,000 Digital China Holdings Ltd. CHN HKD 371, ,660 Knowles Corp. USA USD 251, , Energy Equipment & Services 11,000 Schlumberger Ltd. USA USD 939, ,500 FMC Technologies Inc. USA USD 772, ,660 Noble Corp. PLC USA USD 259, ,600 Technip SA FRA EUR 215, ,385 Saipem SpA ITA EUR 46, Halliburton Co. USA USD 30, ,263, Food & Staples Retailing 5,750 CVS Health Corp. USA USD 553, ,060 Metro AG DEU EUR 308, ,910 Tesco PLC GBR GBP 270, ,132, Food Products 477,000 China Agri-Industries Holdings Ltd. CHN HKD 191, Health Care Equipment & Supplies 11,500 Cochlear Ltd. AUS AUD 729, ,590 Medtronic Inc. USA USD 547, ,277, Health Care Providers & Services 18,000 Catamaran Corp. USA USD 931, ,700 Shanghai Pharmaceuticals Holding Co. Ltd., H CHN HKD 276, ,208, Health Care Technology 7,500 athenahealth Inc. USA USD 1,092, Hotels, Restaurants & Leisure 1,500 Chipotle Mexican Grill Inc. USA USD 1,026, Household Durables 2,687 LG Electronics Inc. KOR KRW 145, Household Products 9,500 Reckitt Benckiser Group PLC GBR GBP 771, Industrial Conglomerates 11,000 Danaher Corp. USA USD 942, ,070 Siemens AG DEU EUR 121, ,064, Insurance 102,000 China Life Insurance Co. Ltd., H CHN HKD 398, ,260 American International Group Inc. USA USD 350, ,046 AXA SA FRA EUR 303, ,640 Aviva PLC GBR GBP 299, ,220 Aegon NV NLD EUR 244, ,810 The Hartford Financial Services Group Inc. USA USD 242, ,337 Swiss Re AG CHE CHF 196, ,070 NN Group NV NLD EUR 182, ,600 UNIQA Insurance Group AG AUT EUR 137, ,354, Inter & Catalog Retail 900 The Priceline Group Inc. USA USD 1,026, Unaudited Semi-Annual Report

217 Franklin Global Growth and Value Fund Schedule of Investments as of December 31, 2014 (continued) face Inter Software & Services 4,700 MercadoLibre Inc. ARG USD 600, IT Services 3,600 Visa Inc., A USA USD 943, Leisure Products 6,200 Polaris Industries Inc. USA USD 937, Life Sciences Tools & Services 8,480 QIAGEN NV NLD EUR 198, Machinery 3,250 Stanley Black & Decker Inc. USA USD 312, ,000 Weichai Power Co. Ltd., H CHN HKD 306, ,580 Navistar International Corp. USA USD 153, , Media 20,000 Discovery Communications Inc., A USA USD 689, ,830 Twenty-First Century Fox Inc., A USA USD 454, ,650 News Corp., A USA USD 386, ,600 Comcast Corp., Special A USA USD 379, ,800 Discovery Communications Inc., C USA USD 330, ,800 Sky PLC GBR GBP 277, ,517, Metals & Mining 7,820 Allegheny Technologies Inc. USA USD 271, Multiline Retail 8,370 Macy s Inc. USA USD 550, ,190 Marks & Spencer Group PLC GBR GBP 344, , Oil, Gas & Consumable Fuels 24,976 Eni SpA ITA EUR 438, ,430 Total SA, B FRA EUR 433, ,650 Talisman Energy Inc. CAN CAD 310, ,280 Galp Energia SGPS SA, B PRT EUR 308, ,000 Kunlun Energy Co. Ltd. CHN HKD 155, ,910 Petroleo Brasileiro SA, ADR, pfd. BRA USD 143, ,000 Suncor Energy Inc. CAN CAD 95, ,886, Pharmaceuticals 5,810 Roche Holding AG CHE CHF 1,577, ,843 Teva Pharmaceutical Industries Ltd., ADR ISR USD 623, ,050 Actavis PLC USA USD 527, ,650 H. Lundbeck AS DNK DKK 491, ,872 Sanofi FRA EUR 446, ,620 Merck KGaA DEU EUR 343, ,320 GlaxoSmithKline PLC GBR GBP 242, ,170 UCB SA BEL EUR 165, ,418, Professional Services 510 SGS SA CHE CHF 1,049, ,300 Verisk Analytics Inc., A USA USD 1,044, ,093, Semiconductors & Semiconductor Equipment 61,500 ARM Holdings PLC GBR GBP 953, ,000 ASML Holding NV NLD EUR 541, ,495, Software 13,000 Adobe Systems Inc. USA USD 945, ,210 Microsoft Corp. USA USD 892, ,000 Dassault Systemes SA FRA EUR 733, ,430 SAP SE DEU EUR 312, ,883, Specialty Retail 6,840 Best Buy Co. Inc. USA USD 266, ,930 Kingfisher PLC GBR GBP 222, , Unaudited Semi-Annual Report 215

218 Franklin Global Growth and Value Fund Schedule of Investments as of December 31, 2014 (continued) face Technology Hardware, Storage & Peripherals 6,800 Apple Inc. USA USD 750, Samsung Electronics Co. Ltd. KOR KRW 619, ,060 Hewlett-Packard Co. USA USD 363, ,000 Konica Minolta Inc. JPN JPY 210, ,944, Textiles, Apparel & Luxury Goods 34,500 Burberry Group PLC GBR GBP 879, Companies & Distributors 1,180,000 Noble Group Ltd. HKG SGD 1,015, Wireless Telecommunication Services 115,657 Vodafone Group PLC GBR GBP 401, ,500 China Mobile Ltd. CHN HKD 274, , TOTAL SHARES 64,545, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 64,545, TOTAL INVESTMENTS 64,545, Unaudited Semi-Annual Report

219 Franklin Global High Income Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Finance 3,500 GMAC Capital Trust I, 8.125%, pfd. USA USD 92, TOTAL SHARES 92, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 92, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Paper & Forest Products 100 NewPage Holdings Inc. USA USD 9, TOTAL SHARES 9, Corporate Bonds 1,800,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 1,901, ,000,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 1,847, ,400,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 1,401, ,400,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 1,395, ,200,000 CSC Holdings LLC, senior note, 144A, 5.25%, 06/01/24 USA USD 1,209, ,400,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 04/01/22 AUS USD 1,170, ,300,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 1,116, ,200,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 1,086, ,000,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 1,075, ,000,000 CHS/Community Health Systems Inc., senior note, 5.125%, 08/01/21 USA USD 1,064, ,000,000 DaVita HealthCare Partners Inc., senior bond, 5.125%, 07/15/24 USA USD 1,021, ,000,000 Alere Inc., senior sub. note, 6.50%, 06/15/20 USA USD 1,012, ,000,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 5.625%, 12/01/21 USA USD 1,010, ,000,000 Blackboard Inc., senior note, 144A, 7.75%, 11/15/19 USA USD 1,007, ,000,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 1,002, ,000,000 JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 08/01/23, FRN thereafter, Perpetual USA USD 992, ,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 988, ,000,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 987, ,000,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 04/15/23 USA USD 982, ,000,000 Eldorado Gold Corp., senior note, 144A, 6.125%, 12/15/20 CAN USD 975, ,000,000 DISH DBS Corp., senior bond, 5.00%, 03/15/23 USA USD 970, ,000,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 955, ,000 Wind Acquisition Finance SA, senior note, Reg S, 7.00%, 04/23/21 ITA EUR 950, ,000,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 945, ,000 WMG Acquisition Corp., senior note, 144A, 5.625%, 04/15/22 USA USD 875, ,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A, 5.625%, 03/01/24 USA USD 873, ,000 Algeco Scotsman Global Finance PLC, secured note, Reg S, 9.00%, 10/15/18 GBR EUR 861, ,000,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 855, ,000 Landry s Inc., senior note, 144A, 9.375%, 05/01/20 USA USD 852, ,000 Alcatel-Lucent USA Inc., senior note, 144A, 6.75%, 11/15/20 FRA USD 848, ,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 822, ,000 Energy Transfer Equity LP, senior bond, first lien, 5.875%, 01/15/24 USA USD 816, ,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 811, ,000 Hub Holdings LLC/Hub Holdings Finance Inc., senior note, 144A, PIK, 8.125%, 07/15/19 USA USD 796, ,000 LMI Aerospace Inc., senior secured note, second lien, 144A, 7.375%, 07/15/19 USA USD 784, ,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 784, ,000,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 04/15/22 USA USD 777, ,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 734, ,000,000 Atlas Energy Holdings Operating Co. LLC/Atlas Resource Finance Corp., senior note, 7.75%, 01/15/21 USA USD 730, ,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 725, ,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.25%, 02/15/21 USA USD 721, ,000 T-Mobile USA Inc., senior note, 6.125%, 01/15/22 USA USD 713, ,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.875%, 03/01/22 USA USD 701, ,000 NOVA Chemicals Corp., senior bond, 144A, 5.00%, 05/01/25 CAN USD 696, ,000 Navient Corp., senior note, 6.125%, 03/25/24 USA USD 689, ,000 UPC Holding BV, senior note, Reg S, 6.75%, 03/15/23 NLD EUR 663, Unaudited Semi-Annual Report 217

220 Franklin Global High Income Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 800,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior note, 144A, 3.85%, 02/06/20 RUS USD 662, ,000 Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 02/15/21 USA USD 661, ,000 Ceramtec Group GmbH, senior note, Reg S, 8.25%, 08/15/21 DEU EUR 654, ,000 Offshore Group Investment Ltd., senior bond, first lien, 7.125%, 04/01/23 USA USD 648, , Hour Holdings III LLC, senior note, 144A, 8.00%, 06/01/22 USA USD 644, ,000 LUKOIL International Finance BV, senior note, 144A, 4.563%, 04/24/23 RUS USD 640, ,000 Avis Budget Finance PLC, senior note, Reg S, 6.00%, 03/01/21 USA EUR 637, ,000 Ocean Rig UDW Inc., senior note, 144A, 7.25%, 04/01/19 USA USD 636, ,000 Millicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 LUX USD 616, ,000 Memorial Production Partners LP/Memorial Production Finance Corp., senior note, 144A, 6.875%, 08/01/22 USA USD 612, ,000 MGM Resorts International, senior note, 6.00%, 03/15/23 USA USD 606, ,000 Ultra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 USA USD 605, ,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.75%, 01/31/21 LUX USD 593, ,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 590, ,000 Odeon & UCI Finco PLC, senior secured note, Reg S, 9.00%, 08/01/18 GBR GBP 586, ,000 Digicel Group Ltd., senior note, 144A, 6.00%, 04/15/21 BMU USD 570, ,000 Galapagos Holding SA, senior note, Reg S, 7.00%, 06/15/22 DEU EUR 564, ,000 Sanchez Energy Corp., senior note, 7.75%, 06/15/21 USA USD 561, ,000 Memorial Resource Development Corp., senior note, 144A, 5.875%, 07/01/22 USA USD 544, ,000,000 Energy XXI Gulf Coast Inc., senior note, 144A, 6.875%, 03/15/24 USA USD 542, ,000 KB Home, senior bond, 7.50%, 09/15/22 USA USD 532, ,000 Halcon Resources Corp., senior note, 8.875%, 05/15/21 USA USD 530, ,000 American Energy-Permian Basin LLC/AEPB Finance Corp., senior note, 144A, 7.375%, 11/01/21 USA USD 518, ,000 JBS USA LLC/Finance Inc., senior note, 144A, 7.25%, 06/01/21 USA USD 517, ,000 OneMain Financial Holdings Inc., senior note, 144A, 7.25%, 12/15/21 USA USD 515, ,000 Play Finance 1 SA, senior note, Reg S, 6.50%, 08/01/19 LUX EUR 514, ,000 Clayton Williams Energy Inc., senior note, 7.75%, 04/01/19 USA USD 513, ,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 510, ,000 Alpha Natural Resources Inc., second lien, 144A, 7.50%, 08/01/20 USA USD 506, ,000 Virgin Media Finance PLC, senior bond, Reg S, 6.375%, 10/15/24 GBR GBP 505, ,000 Post Holdings Inc., senior note, 7.375%, 02/15/22 USA USD 501, ,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, Reg S, 8.50%, 01/15/21 USA EUR 500, ,000 Dole Food Co. Inc., senior secured note, 144A, 7.25%, 05/01/19 USA USD 499, ,000 Virgin Media Secured Finance PLC, senior secured note, Reg S, 5.50%, 01/15/25 GBR GBP 484, ,000 Polymer Group Inc., senior note, 144A, 6.875%, 06/01/19 USA USD 481, ,000 Ineos Group Holdings SA, senior note, 144A, 5.875%, 02/15/19 CHE USD 475, ,000 KM Germany Holdings GmbH, senior secured note, first lien, Reg S, 8.75%, 12/15/20 DEU EUR 473, ,000 Financiere Gaillon 8 SAS, senior note, Reg S, 7.00%, 09/30/19 FRA EUR 471, ,000 Iglo Foods Bondco PLC, senior secured note, first lien, Reg S, FRN, 4.582%, 06/15/20 GBR EUR 469, ,000 W&T Offshore Inc., senior note, 8.50%, 06/15/19 USA USD 465, ,000 CGG SA, senior note, 6.50%, 06/01/21 FRA USD 459, ,000 Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 06/21/19 USA USD 448, ,000 Cemex Finance LLC, senior secured note, 144A, 9.375%, 10/12/22 MEX USD 448, ,000 Radio One Inc., senior sub. note, 144A, 9.25%, 02/15/20 USA USD 437, ,000 Frontier Communications Corp., senior bond, 7.625%, 04/15/24 USA USD 414, ,000 E*TRADE Financial Corp., senior note, 5.375%, 11/15/22 USA USD 410, ,000 Owens-Brockway Glass Container Inc., senior bond, 144A, 5.375%, 01/15/25 USA USD 404, ,000 Abengoa Finance SAU, senior note, 144A, 7.75%, 02/01/20 ESP USD 401, ,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 387, ,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 06/30/21 LUX USD 383, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, 8.50%, 02/15/20 USA USD 380, ,000 Digicel Group Ltd., senior note, 144A, 7.125%, 04/01/22 BMU USD 378, ,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 377, ,000 EnQuest PLC, senior note, 144A, 7.00%, 04/15/22 GBR USD 368, ,000 CHC Helicopter SA, senior note, 9.375%, 06/01/21 CAN USD 368, ,000 Barminco Finance Pty. Ltd., senior note, 144A, 9.00%, 06/01/18 AUS USD 360, ,000 Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 06/01/21 USA USD 357, Unaudited Semi-Annual Report

221 Franklin Global High Income Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 500,000 Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 * USA USD 356, ,000 Ineos Group Holdings SA, senior note, Reg S, 5.75%, 02/15/19 CHE EUR 351, ,000 Goodrich Petroleum Corp., senior note, 8.875%, 03/15/19 USA USD 346, ,000 Calpine Corp., senior secured note, first lien, 144A, 6.00%, 01/15/22 USA USD 321, ,000 Sterling International Inc., senior note, 11.00%, 10/01/19 USA USD 320, ,000 Unitymedia KabelBW GmbH, senior bond, 144A, 6.125%, 01/15/25 DEU USD 310, ,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, 144A, 8.25%, 01/15/21 USA USD 308, ,000 Te Healthcare Corp., senior note, 144A, 5.50%, 03/01/19 USA USD 308, ,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 307, ,000 Anna Merger Sub Inc., senior note, 144A, 7.75%, 10/01/22 USA USD 304, ,000 Constellation Brands Inc., senior bond, 4.75%, 11/15/24 USA USD 304, ,000 Cott Beverages Inc., senior note, 144A, 6.75%, 01/01/20 USA USD 300, ,000 JBS USA LLC/Finance Inc., senior bond, 144A, 5.875%, 07/15/24 USA USD 297, ,000 KB Home, senior note, 4.75%, 05/15/19 USA USD 296, ,000 Navient Corp., senior note, 5.00%, 10/26/20 USA USD 295, ,000 NGL Energy Partners LP/NGL Energy Finance Corp., senior note, 144A, 5.125%, 07/15/19 USA USD 288, ,000 Post Holdings Inc., senior note, 144A, 6.00%, 12/15/22 USA USD 282, ,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 279, ,000 Financiere Quick SAS, senior note, Reg S, FRN, 7.582%, 10/15/19 FRA EUR 279, ,000 Scientific Games International Inc., senior note, 144A, 10.00%, 12/01/22 USA USD 276, ,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 273, ,000 iheartcommunications Inc., senior note, 10.00%, 01/15/18 USA USD 260, ,000 Visant Corp., senior note, 10.00%, 10/01/17 USA USD 242, ,000 Penn Virginia Corp., senior note, 8.50%, 05/01/20 USA USD 241, ,000 American Energy-Permian Basin LLC/AEPB Finance Corp., senior note, 144A, 7.125%, 11/01/20 USA USD 223, ,000 Energy Transfer Equity LP, senior note, first lien, 7.50%, 10/15/20 USA USD 223, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 9.00%, 02/15/20 USA USD 222, ,000 MGM Resorts International, senior note, 7.75%, 03/15/22 USA USD 222, ,000 CSC Holdings LLC, senior note, 6.75%, 11/15/21 USA USD 221, ,000 Bank of America Corp., junior sub. bond, M, 8.125% to 05/15/18, FRN thereafter, Perpetual USA USD 216, ,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 216, ,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 211, ,000 MGM Resorts International, senior note, 6.75%, 10/01/20 USA USD 210, ,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 9.00%, 04/15/19 USA USD 208, ,000 Scientific Games International Inc., senior secured note, first lien, 144A, 7.00%, 01/01/22 USA USD 203, ,000 JPMorgan Chase & Co., junior sub. note, X, 6.10% to 10/01/24, FRN thereafter, Perpetual USA USD 200, ,000 Triangle USA Petroleum Corp., senior note, 144A, 6.75%, 07/15/22 USA USD 199, ,000 IHS Inc., senior note, 144A, 5.00%, 11/01/22 USA USD 199, ,000 Florida East Coast Holdings Corp., secured note, first lien, 144A, 6.75%, 05/01/19 USA USD 198, ,000 Sprint Corp., senior bond, 7.875%, 09/15/23 USA USD 198, ,000 Post Holdings Inc., senior note, 144A, 6.75%, 12/01/21 USA USD 194, ,000 Cemex SAB de CV, first lien, 144A, 5.70%, 01/11/25 MEX USD 193, ,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 187, ,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 175, ,000 Compressco Partners LP/Finance Corp., senior note, 144A, 7.25%, 08/15/22 USA USD 174, ,000 Sanchez Energy Corp., senior note, 144A, 6.125%, 01/15/23 USA USD 168, ,000 New Look Bondco I PLC, secured note, first lien, Reg S, 8.75%, 05/14/18 GBR GBP 164, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 11.25%, 06/01/17 USA USD 147, ,000 Del Monte Corp., senior note, 7.625%, 02/15/19 USA USD 135, ,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.625%, 04/15/23 DEU EUR 131, ,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 05/15/19 USA USD 129, ,000 Ineos Group Holdings SA, senior note, Reg S, 6.50%, 08/15/18 CHE EUR 119, ,000 First Data Corp., senior bond, %, 01/15/21 USA USD 119, ,000 Halcon Resources Corp., senior note, 9.75%, 07/15/20 USA USD 113, ,000 KB Home, senior note, 7.00%, 12/15/21 USA USD 105, ,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 104, ,000 Alere Inc., senior note, 7.25%, 07/01/18 USA USD 104, ,000 T-Mobile USA Inc., senior note, 6.542%, 04/28/20 USA USD 103, ,000 T-Mobile USA Inc., senior bond, 6.50%, 01/15/24 USA USD 102, ,000 T-Mobile USA Inc., senior bond, 6.375%, 03/01/25 USA USD 101, ,000 TransDigm Inc., senior sub. bond, 6.50%, 07/15/24 USA USD 101, ,000 TransDigm Inc., senior sub. note, 6.00%, 07/15/22 USA USD 100, ,000 Florida East Coast Holdings Corp., senior note, 144A, 9.75%, 05/01/20 USA USD 100, Unaudited Semi-Annual Report 219

222 Franklin Global High Income Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 100,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 98, ,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 97, ,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 09/15/21 USA USD 81, ,000 Offshore Group Investment Ltd., senior secured note, first lien, 7.50%, 11/01/19 USA USD 75, ,000 Halcon Resources Corp., senior note, 9.25%, 02/15/22 USA USD 74, ,588 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 7.00%, 11/15/20 LUX USD 71, ,000 Energy XXI Gulf Coast Inc., senior note, 7.50%, 12/15/21 USA USD 54, ,000 Edcon Holdings Pty. Ltd., senior secured note, Reg S, %, 06/30/19 ZAF EUR 45, ,000 First Data Corp., senior note, 11.25%, 01/15/21 USA USD 36, ,382, Government and Municipal Bonds 9,086,583 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 376, ,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 119, ,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 117, , TOTAL BONDS 87,996, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 88,005, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 50,000 NewPage Corp., Escrow Account ** USA USD TOTAL BONDS TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET TOTAL INVESTMENTS 88,097, * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, 2014 ** These securities are submitted to a Fair Valuation Income may be received in additional securities and/or cash 220 Unaudited Semi-Annual Report

223 Franklin Global Listed Infrastructure Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Airport Services 2,660 Aeroports de Paris (ADP) FRA EUR 322, ,900 Japan Airport Terminal Co. Ltd. JPN JPY 315, Flughafen Zuerich AG CHE CHF 261, ,223 Sydney Airport AUS AUD 173, ,994 Auckland International Airport Ltd. NZL NZD 151, ,037 Grupo Aeroportuario del Sureste SAB de CV, ADR MEX USD 136, ,024 Grupo Aeroportuario del Pacifico SAB de CV, ADR MEX USD 127, ,780 BBA Aviation PLC GBR GBP 122, ,612, Electric Utilities 4,180 NextEra Energy Inc. USA USD 444, ,845 Enel SpA ITA EUR 321, ,280 ITC Holdings Corp. USA USD 294, ,310 SSE PLC GBR GBP 285, ,320 Edison International USA USD 282, ,652 Iberdrola SA ESP EUR 282, ,060 Portland General Electric Co. USA USD 229, ,560 UIL Holdings Corp. USA USD 111, ,870 Exelon Corp. USA USD 106, ,100 Enersis SA, ADR CHL USD 49, ,634 Companhia Energetica de Minas Gerais, ADR, pfd. BRA USD 28, ,435, Gas Utilities 2,720 New Jersey Resources Corp. USA USD 166, ,730 Atmos Energy Corp. USA USD 152, ,100 ENN Energy Holdings Ltd. CHN HKD 34, , Highways & Railtracks 30,478 Atlantia SpA ITA EUR 712, ,480 Transurban Group AUS AUD 689, ,500 Groupe Eurotunnel SA FRA EUR 511, ,229 Abertis Infraestructuras SA ESP EUR 362, ,828 Qube Logistics Holdings Ltd. AUS AUD 77, ,539 Macquarie Atlas Roads Group AUS AUD 56, ,409, Independent Power Producers & Energy Traders 3,140 NRG Energy Inc. USA USD 84, Marine Ports & Services 105,000 China Merchants Holdings International Co. Ltd. CHN HKD 352, ,000 COSCO Pacific Ltd. CHN HKD 243, ,000 Kamigumi Co. Ltd. JPN JPY 107, ,000 Hutchison Port Holdings Trust SGP USD 92, ,400 Mitsubishi Logistics Corp. JPN JPY 35, , Multi-Utilities 30,670 National Grid PLC GBR GBP 438, ,540 Dominion Resources Inc. USA USD 426, ,260 GDF Suez FRA EUR 358, ,810 Sempra Energy USA USD 201, ,810 Public Service Enterprise Group Inc. USA USD 157, ,860 RWE AG DEU EUR 119, ,390 Suez Environnement Co. FRA EUR 94, ,580 Centrica PLC GBR GBP 85, ,280 NorthWestern Corp. USA USD 72, ,550 Ameren Corp. USA USD 71, ,820 E.ON SE DEU EUR 65, ,091, Oil & Gas Storage & Transportation 7,330 Enbridge Inc. CAN CAD 377, ,040 Cheniere Energy Inc. USA USD 284, ,768 Energy Transfer Equity LP USA USD 273, ,130 Altagas Ltd. CAN CAD 266, ,650 The Williams Cos. Inc. USA USD 253, ,140 Veresen Inc. CAN CAD 223, ,360 Pembina Pipeline Corp. CAN CAD 195, ,189 Western Gas Equity Partners LP USA USD 192, ,800 Kinder Morgan Inc. USA USD 160, ,854 Magellan Midstream Partners LP USA USD 153, Unaudited Semi-Annual Report 221

224 Franklin Global Listed Infrastructure Fund Schedule of Investments as of December 31, 2014 (continued) face Oil & Gas Storage & Transportation (continued) 1,630 SemGroup Corp., A USA USD 111, ,462 Ultrapar Participacoes SA, ADR BRA USD 85, ,245 Cheniere Energy Partners LP USA USD 71, MarkWest Energy Partners LP USA USD 58, ,650 Enlink Midstream LLC USA USD 58, ,060 Spectra Energy Corp. USA USD 38, ,804, Renewable Electricity 6,540 Pattern Energy Group Inc. USA USD 161, ,900 Boralex Inc., A CAN CAD 98, , Water Utilities 127,000 Sound Global Ltd. CHN HKD 147, ,250 American Water Works Co. Inc. USA USD 119, , TOTAL SHARES 13,150, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 13,150, TOTAL INVESTMENTS 13,150, Unaudited Semi-Annual Report

225 Franklin Global Real Estate Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Hotels, Resorts & Cruiselines 16,966 Starwood Hotels & Resorts Worldwide Inc. USA USD 1,375, ,198 Melia Hotels International SA ESP EUR 913, ,288, Real Estate Investment Trusts 118,142 Simon Property Group Inc. USA USD 21,514, ,085 Vornado Realty Trust USA USD 9,779, ,075 Health Care REIT Inc. USA USD 9,313, ,431 Prologis Inc. USA USD 9,183, ,865 Equity Residential USA USD 8,898, ,760 Boston Properties Inc. USA USD 8,848, ,478 Host Hotels & Resorts Inc. USA USD 8,806, ,472 General Growth Properties Inc. USA USD 7,777, ,135 HCP Inc. USA USD 7,755, ,217 Public Storage USA USD 7,618, ,629 Land Securities Group PLC GBR GBP 6,918, ,060,711 The Link REIT HKG HKD 6,634, ,959 Essex Property Trust Inc. USA USD 6,396, ,749 SL Green Realty Corp. USA USD 6,040, ,179 AvalonBay Communities Inc. USA USD 5,747, ,227 British Land Co. PLC GBR GBP 5,428, ,466 Pebblebrook Hotel Trust USA USD 5,359, ,527 Kilroy Realty Corp. USA USD 5,216, ,335 Ventas Inc. USA USD 4,971, ,061 Alexandria Real Estate Equities Inc. USA USD 4,708, ,556 Hammerson PLC GBR GBP 4,701, ,370,903 Stockland AUS AUD 4,611, ,960 The Macerich Co. USA USD 4,500, ,572,867 Scentre Group AUS AUD 4,494, ,900 Extra Space Storage Inc. USA USD 4,450, ,113 Great Portland Estates PLC GBR GBP 4,338, ,086 UDR Inc. USA USD 4,286, ,297 Apartment Investment & Management Co., A USA USD 4,283, ,465 Digital Realty Trust Inc. USA USD 4,075, ,734 Westfield Corp. AUS AUD 4,004, ,837 Nippon Prologis REIT Inc. JPN JPY 3,995, ,766 Federal Realty Investment Trust USA USD 3,972, ,464 Regency Centers Corp. USA USD 3,856, Kenedix Office Investment Corp. JPN JPY 3,638, ,198 Equity Lifestyle Properties Inc. USA USD 3,515, ,452 Wereldhave N.V. NLD EUR 3,272, ,474 Taubman Centers Inc. USA USD 3,245, ,155 DDR Corp. USA USD 3,197, ,850 Brandywine Realty Trust USA USD 3,145, ,685 Weingarten Realty Investors USA USD 3,096, ,007 Hulic REIT Inc. JPN JPY 3,050, ,126 CubeSmart USA USD 3,048, ,039 American Assets Trust Inc. USA USD 3,027, ,061 Highwoods Properties Inc. USA USD 3,013, ,812 WP Carey Inc. USA USD 3,001, Japan Real Estate Investment Corp. JPN JPY 2,725, ,847,292 Mirvac Group AUS AUD 2,684, ,419 STAG Industrial Inc. USA USD 2,582, ,677 RioCan REIT CAN CAD 2,496, ,139 Canadian REIT CAN CAD 2,410, ,604,530 Suntec REIT SGP SGD 2,373, ,891 Kimco Realty Corp. USA USD 2,360, ,127 Sunstone Hotel Investors Inc. USA USD 2,115, ,403 Realty Income Corp. USA USD 2,070, ,889 Douglas Emmett Inc. USA USD 2,070, ,722 Sabra Health Care REIT Inc. USA USD 2,056, ,300 Spirit Realty Capital Inc. USA USD 2,036, ,887 Senior Housing Properties Trust USA USD 2,031, Activia Properties Inc. JPN JPY 1,981, ,530 TF Administradora Industrial S de RL de CV MEX MXN 1,860, ,387 Post Properties Inc. USA USD 1,785, ,276 Eurocommercial Properties NV, IDR NLD EUR 1,756, ,326 Ascendas REIT SGP SGD 1,723, ,836,730 Mapletree Logistics Trust SGP SGD 1,642, ,322 Boardwalk REIT CAN CAD 1,553, ,639 Camden Property Trust USA USD 1,450, ,800 First Industrial Realty Trust Inc. USA USD 1,352, ,660 Paramount Group Inc. USA USD 1,239, ,923 Liberty Property Trust USA USD 1,201, ,063 GLP J-REIT JPN JPY 1,185, Hoshino Resorts REIT Inc. JPN JPY 1,108, Unaudited Semi-Annual Report 223

226 Franklin Global Real Estate Fund Schedule of Investments as of December 31, 2014 (continued) face Real Estate Investment Trusts (continued) 2,532 Invincible Investment Corp. JPN JPY 1,062, ,866 Education Realty Trust Inc. USA USD 946, ,602 Coresite Realty Corp. USA USD 765, ,837 CapitaMall Trust SGP SGD 688, Activia Properties Inc., Reg S JPN JPY 576, ,639, Real Estate Ownership, Management & Development 576,706 Mitsui Fudosan Co. Ltd. JPN JPY 15,665, ,751 Unibail-Rodamco SE FRA EUR 12,813, ,593 Mitsubishi Estate Co. Ltd. JPN JPY 10,462, ,012,059 Hong Kong Land Holdings Ltd. HKG USD 6,841, ,559 Sun Hung Kai Properties Ltd. HKG HKD 6,218, ,850 The Wharf Holdings Ltd. HKG HKD 5,090, ,064,124 Goodman Group AUS AUD 4,943, ,642 Klepierre FRA EUR 4,394, ,597 Tokyo Tatemono Co. Ltd. JPN JPY 4,364, ,641 Derwent London PLC GBR GBP 4,263, ,270 Gagfah SA DEU EUR 3,721, ,146 LEG Immobilien AG DEU EUR 3,611, ,646,486 Global Logistic Properties Ltd. SGP SGD 3,082, ,645 Hysan Development Co. Ltd. HKG HKD 2,679, ,062,616 CapitaLand Ltd. SGP SGD 2,654, ,615,804 Sino Land Co. Ltd. HKG HKD 2,592, ,431 Hufvudstaden AB, A SWE SEK 2,519, ,449 Keppel Land Ltd. SGP SGD 2,296, ,859 Federation Centres AUS AUD 2,127, ,956 Deutsche Euroshop AG DEU EUR 2,012, ,695 Hemfosa Fastigheter AB SWE SEK 1,897, ,330 Castellum AB SWE SEK 1,789, ,788 Howard Hughes Corp. USA USD 1,667, ,736 Unite Group PLC GBR GBP 1,614, ,853 Hang Lung Properties Ltd. HKG HKD 1,595, ,798,000 KWG Property Holdings Ltd. CHN HKD 1,231, ,897 China Overseas Land & Investment Ltd. CHN HKD 950, ,342 Hispania Activos Inmobiliarios SAU ESP EUR 555, ,106 Deutsche Euroshop AG, Reg S DEU EUR 223, ,882, TOTAL SHARES 420,810, WARRANTS Real Estate Ownership, Management & Development 34,796 Sun Hung Kai Properties Ltd., wts., 04/22/16 HKG HKD 87, TOTAL WARRANTS 87, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 420,898, TOTAL INVESTMENTS 420,898, Unaudited Semi-Annual Report

227 Franklin Global Small-Mid Cap Growth Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 1,624,400 TNT Express NV NLD EUR 10,890, Beverages 2,411,900 C&C Group PLC IRL EUR 10,564, Building Products 440,543 Uponor OYJ FIN EUR 6,124, Capital s 561,100 FXCM Inc., A USA USD 9,297, ,599,400 ABG Sundal Collier Holding ASA NOR NOK 8,828, ,151,847 ARA Asset Management Ltd. SGP SGD 6,610, ,736, Chemicals 2,060,420 Alent PLC GBR GBP 10,309, Commercial Services & Supplies 440,300 ISS A/S DNK DKK 12,740, Construction & Engineering 483,457 Morgan Sindall PLC GBR GBP 4,672, Diversified Financial Services 167,100 Deutsche Boerse AG DEU EUR 11,973, Electrical Equipment 511,800 Prysmian SpA ITA EUR 9,382, Electronic Equipment, Instruments & Components 485,700 Espri SpA ITA EUR 3,367, Food & Staples Retailing 216,965 Sligro Food Group NV NLD EUR 8,203, Hotels, Restaurants & Leisure 4,141,617 Dalata Hotel Group PLC IRL EUR 14,733, ,117 ClubLink Enterprises Ltd. CAN CAD 6,567, ,300, Insurance 26,900 Markel Corp. USA USD 18,368, ,700 Fairfax Financial Holdings Ltd. CAN CAD 13,473, ,600 ProAssurance Corp. USA USD 13,391, ,200 RenaissanceRe Holdings Ltd. USA USD 12,560, ,200 Arch Capital Group Ltd. USA USD 10,058, ,900 Euler Hermes Group FRA EUR 5,792, ,645, Leisure Products 383,776 Beeau FRA EUR 5,391, Machinery 1,696,166 Vesuvius PLC GBR GBP 11,796, ,822 Zardoya Otis SA ESP EUR 5,474, ,271, Media 278,000 ASATSU-DK Inc. JPN JPY 6,746, Personal Products 830,600 Aderans Co. Ltd. JPN JPY 7,874, Professional Services 1,506,900 Michael Page International PLC GBR GBP 9,674, ,000 Sthree PLC GBR GBP 3,703, ,377, Real Estate Investment Trusts (REITs) 7,771,248 Green REIT PLC IRL EUR 12,036, ,000,000 Irish Residential Properties REIT PLC IRL EUR 2,562, ,598, Real Estate Management & Development 1,954,400 wide PLC GBR GBP 13,300, Unaudited Semi-Annual Report 225

228 Franklin Global Small-Mid Cap Growth Fund Schedule of Investments as of December 31, 2014 (continued) face Thrifts & Mortgage Finance 501,100 SI Financial Group Inc. USA USD 5,582, Companies & Distributors 1,207,700 Grafton Group PLC IRL GBP 12,009, TOTAL SHARES 304,065, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 304,065, TOTAL INVESTMENTS 304,065, Unaudited Semi-Annual Report

229 Franklin Gold and Precious Metals Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Gold and Diversified Resources 853,100 Nevsun Resources Ltd. CAN CAD 3,291, ,412 Sandfire Resources NL AUS AUD 659, ,040 PanAust Ltd. AUS AUD 618, ,568, Gold Exploration and Development 1,265,000 Guyana Goldfields Inc. CAN CAD 3,071, ,636 Acacia Mining Plc GBR GBP 2,355, ,859,500 Torex Gold Resources Inc. CAN CAD 1,969, ,219,100 Romarco Minerals Inc. CAN CAD 1,780, ,000 Imperial Metals Corp. CAN CAD 1,332, ,000 Pretium Resources Inc. CAN CAD 1,311, ,740,000 Stornoway Diamond Corp. CAN CAD 1,250, ,800 Ivanhoe Mines Ltd., A CAN CAD 839, ,199,134 Red 5 Ltd. AUS AUD 691, ,850,000 Amara Mining PLC GBR GBP 644, ,500 Midway Gold Corp. USA USD 592, ,491,348 Nautilus Minerals Inc. CAN CAD 488, ,600 Continental Gold Ltd. CAN CAD 478, ,000 Lydian International Ltd. CAN CAD 376, ,928,400 St. Augustine Gold and Copper Ltd. CAN CAD 302, ,843 RTG Mining Inc. AUS CAD 205, ,200 Midas Gold Corp. CAN CAD 177, ,000 Belo Sun Mining Corp. CAN CAD 167, ,366 RTG Mining Inc., IDR AUS AUD 125, ,448,667 Kula Gold Ltd. AUS AUD 118, ,500 INV Metals Inc. CAN CAD 55, ,300 Lion One Metals Ltd. CAN CAD 45, ,000 Chalice Gold Mines Ltd. AUS AUD 3, ,382, Long Life Gold Mines 450,424 Newcrest Mining Ltd. AUS AUD 4,005, ,000 Goldcorp Inc. CAN USD 3,944, ,950 Eldorado Gold Corp. CAN CAD 3,901, ,290,755 B2Gold Corp. CAN CAD 3,748, ,000 Randgold Resources Ltd., ADR JER USD 3,707, ,800 Centerra Gold Inc. CAN CAD 3,062, ,020 AngloGold Ashanti Ltd., ADR ZAF USD 2,166, ,000 Barrick Gold Corp. CAN USD 2,064, ,919,400 Centamin PLC EGY CAD 1,735, ,300 Alamos Gold Inc. CAN CAD 1,660, ,695,000 Centamin PLC EGY GBP 1,556, ,400 AngloGold Ashanti Ltd. ZAF ZAR 1,542, ,500 Detour Gold Corp. CAN CAD 1,360, ,022,576 G-Resources Group Ltd. HKG HKD 915, ,835 Agnico Eagle Mines Ltd. CAN CAD 743, ,100 Alacer Gold Corp. USA CAD 718, ,700 SEMAFO Inc. CAN CAD 515, ,190 Osisko Gold Royalties Ltd. CAN CAD 425, ,300 Agnico Eagle Mines Ltd. CAN USD 405, ,000 Gold Fields Ltd., ADR ZAF USD 231, ,000 Newmont Mining Corp. USA USD 207, ,000 AuRico Gold Inc. CAN CAD 195, ,856 Kinross Gold Corp. CAN CAD 148, ,962, Medium Life Gold Mines 425,400 Primero Mining Corp. CAN CAD 1,637, ,000 New Gold Inc. CAN CAD 583, ,004 Yamana Gold Inc. CAN CAD 549, ,408,826 Beadell Resources Ltd. AUS AUD 442, ,866,316 St. Barbara Ltd. AUS AUD 245, ,000 Teranga Gold Corp. CAN CAD 143, ,800 Silver Lake Resources Ltd. AUS AUD 113, ,800 China Gold International Resources Corp. Ltd. CAN CAD 102, ,010 Teranga Gold Corp., IDR CAN AUD 68, ,900 China Gold International Resources Corp. Ltd. CAN HKD 31, ,918, Platinum & Palladium 294,400 Impala Platinum Holdings Ltd. ZAF ZAR 1,929, ,015,600 Platinum Group Metals Ltd. CAN CAD 1,901, ,735,850 Platinum Group Metals Ltd. CAN USD 1,332, Unaudited Semi-Annual Report 227

230 Franklin Gold and Precious Metals Fund Schedule of Investments as of December 31, 2014 (continued) face Platinum & Palladium (continued) 35,600 Anglo American Platinum Ltd. ZAF ZAR 1,050, ,780 Eastern Platinum Ltd. CAN CAD 652, ,907 Royal Bafokeng Platinum Ltd. ZAF ZAR 396, ,860 Northam Platinum Ltd. ZAF ZAR 383, ,645, Silver Mines 119,000 Fresnillo PLC MEX GBP 1,420, ,000 Tahoe Resources Inc. USA CAD 1,112, ,000 MAG Silver Corp. CAN CAD 819, ,000 Hochschild Mining PLC PER GBP 326, ,679, TOTAL SHARES 77,157, WARRANTS Gold Exploration and Development 1,250,000 Stornoway Diamond Corp., wts., 05/21/16 CAN CAD 80, ,000 Ivanhoe Mines Ltd., wts., 12/10/15 CAN CAD 24, ,833 RTG Mining Inc., wts., 06/04/17 AUS CAD 1, , TOTAL WARRANTS 106, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 77,264, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Gold Exploration and Development 1,000,000 Romarco Minerals Inc., Reg S ** CAN CAD 363, TOTAL SHARES 363, WARRANTS Gold Exploration and Development 125,000 Colossus Minerals Inc., wts., 08/09/15 ** CAN CAD TOTAL WARRANTS TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 363, TOTAL INVESTMENTS 77,627, ** These securities are submitted to a Fair Valuation 228 Unaudited Semi-Annual Report

231 Franklin High Yield Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Finance 230,800 GMAC Capital Trust I, 8.125%, pfd. USA USD 6,088, TOTAL SHARES 6,088, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 6,088, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Air Freight & Logistics 7,720 CEVA Holdings LLC, cvt. pfd., A-2 GBR USD 5,982, ,566 CEVA Holdings LLC GBR USD 2,763, CEVA Holdings LLC, cvt. pfd., A-1 GBR USD 141, ,887, Paper & Forest Products 56,000 NewPage Holdings Inc. USA USD 5,082, TOTAL SHARES 13,969, BONDS Corporate Bonds 52,000,000 Wind Acquisition Finance SA, senior note, second lien, 144A, 7.375%, 04/23/21 ITA USD 49,140, ,000,000 Energy Transfer Equity LP, senior bond, first lien, 5.875%, 01/15/24 USA USD 40,800, ,000,000 Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 * USA USD 39,187, ,000,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 38,643, ,200,000 HCA Inc., senior secured note, first lien, 5.00%, 03/15/24 USA USD 37,286, ,000,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 35,100, ,000,000 Bank of America Corp., junior sub. bond, M, 8.125% to 05/15/18, FRN thereafter, Perpetual, 01/01/00 USA USD 34,680, ,100,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 34,303, ,400,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 33,979, ,300,000 JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 08/01/23, FRN thereafter, Perpetual, 01/01/00 USA USD 33,050, ,300,000 Alcatel-Lucent USA Inc., senior note, 144A, 6.75%, 11/15/20 FRA USD 32,133, ,000,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 31,775, ,000,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 31,687, ,000,000 Eldorado Gold Corp., senior note, 144A, 6.125%, 12/15/20 CAN USD 31,200, ,995,000 Navistar International Corp., senior note, 8.25%, 11/01/21 USA USD 30,685, ,000,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 30,240, ,900,000 Alere Inc., senior note, 7.25%, 07/01/18 USA USD 30,200, ,000, BC ULC/New Red Finance Inc., secured note, second lien, 144A, 6.00%, 04/01/22 CAN USD 28,840, ,000,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 28,650, ,000,000 CSC Holdings LLC, senior note, 144A, 5.25%, 06/01/24 USA USD 27,202, ,450,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 26,652, ,500,000 WPX Energy Inc., senior note, 6.00%, 01/15/22 USA USD 26,606, ,000,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 144A, 8.375%, 06/01/19 USA USD 26,312, ,000,000 Equinix Inc., senior bond, 5.375%, 04/01/23 USA USD 26,130, ,400,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 26,098, ,900,000 Ultra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 USA USD 25,863, ,000,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.50%, 05/15/18 USA USD 25,625, ,600,000 OneMain Financial Holdings Inc., senior note, 144A, 7.25%, 12/15/21 USA USD 25,338, ,000,000 PBF Holding Co. LLC, first lien, 8.25%, 02/15/20 USA USD 25,250, ,000,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual, 01/01/00 USA USD 24,687, ,000,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 24,687, ,000,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 24,640, ,000,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 24,570, ,000,000 KB Home, senior bond, 7.50%, 09/15/22 USA USD 24,495, ,300,000 Nielsen Finance LLC/Co., senior note, 144A, 5.00%, 04/15/22 USA USD 24,451, ,000,000 Abengoa Finance SAU, senior note, 144A, 8.875%, 11/01/17 ESP USD 24,218, ,700,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 23,314, ,825,000 Univision Communications Inc., senior secured note, 144A, 6.875%, 05/15/19 USA USD 22,779, ,300,000 Clayton Williams Energy Inc., senior note, 7.75%, 04/01/19 USA USD 22,486, ,500,000 Virgin Media Secured Finance PLC, senior secured bond, first lien, 144A, 5.50%, 01/15/25 GBR USD 22,265, ,675,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 22,225, ,000,000 Cemex SAB de CV, first lien, 144A, 5.70%, 01/11/25 MEX USD 22,223, ,000,000 Drill Rigs Holdings Inc., secured note, 144A, 6.50%, 10/01/17 USA USD 21,710, ,000,000 Sprint Nextel Corp., senior note, 8.375%, 08/15/17 USA USD 21,650, ,100,000 Algeco Scotsman Global Finance PLC, senior secured note, first lien, 144A, 8.50%, 10/15/18 GBR USD 21,478, Unaudited Semi-Annual Report 229

232 Franklin High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 26,500,000 Memorial Production Partners LP/Memorial Production Finance Corp., senior note, 7.625%, 05/01/21 USA USD 21,332, ,700,000 Millicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 LUX USD 21,282, ,000,000 UPCB Finance III Ltd., senior secured note, 144A, 6.625%, 07/01/20 NLD USD 21,050, ,000,000 Par Pharmaceutical Cos. Inc., senior note, 7.375%, 10/15/20 USA USD 21,000, ,700,000 Visant Corp., senior note, 10.00%, 10/01/17 USA USD 20,856, ,000,000 Jaguar Holding Co. I, senior note, 144A, PIK, 9.375%, 10/15/17 USA USD 20,490, ,800,000 Digicel Group Ltd., senior note, 144A, 8.25%, 09/30/20 BMU USD 20,358, ,000,000 Offshore Group Investment Ltd., senior secured note, first lien, 7.50%, 11/01/19 USA USD 20,283, ,000,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 5.625%, 12/01/21 USA USD 20,200, ,000,000 Blackboard Inc., senior note, 144A, 7.75%, 11/15/19 USA USD 20,150, ,300,000 Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 02/15/21 USA USD 20,128, ,900,000 The Goodyear Tire & Rubber Co., senior note, 6.50%, 03/01/21 USA USD 20,128, ,000,000 Dole Food Co. Inc., senior secured note, 144A, 7.25%, 05/01/19 USA USD 19,975, ,000,000 Barminco Finance Pty. Ltd., senior note, 144A, 9.00%, 06/01/18 AUS USD 19,813, ,100,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 04/15/22 USA USD 19,515, ,900,000 Reynolds Group Issuer Inc./LLC/SA, first lien, 5.75%, 10/15/20 USA USD 19,467, ,600,000 Post Holdings Inc., senior note, 144A, 6.75%, 12/01/21 USA USD 19,061, ,700,000 CGG SA, senior note, 6.875%, 01/15/22 FRA USD 18,818, ,800,000 CONSOL Energy Inc., senior note, 144A, 5.875%, 04/15/22 USA USD 18,513, ,000,000 DISH DBS Corp., senior note, 5.875%, 07/15/22 USA USD 18,495, ,000,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 18,475, ,000,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 11.25%, 06/01/17 USA USD 18,450, ,300,000 DigitalGlobe Inc., senior note, 144A, 5.25%, 02/01/21 USA USD 18,431, ,300,000 CIT Group Inc., senior note, 5.375%, 05/15/20 USA USD 18,349, ,800,000 D.R. Horton Inc., senior note, 3.75%, 03/01/19 USA USD 17,666, ,000,000 Unitymedia KabelBW GmbH, senior bond, 144A, 6.125%, 01/15/25 DEU USD 17,616, ,400,000 Zachry Holdings Inc., senior note, 144A, 7.50%, 02/01/20 USA USD 17,574, ,000,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A, 5.625%, 03/01/24 USA USD 17,460, ,000,000 Terex Corp., senior note, 6.00%, 05/15/21 USA USD 17,425, ,000,000 Vanguard Natural Resources LLC/Finance Corp., senior note, 7.875%, 04/01/20 USA USD 17,355, ,500, Hour Holdings III LLC, senior note, 144A, 8.00%, 06/01/22 USA USD 17,307, ,500,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 17,193, ,000,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 17,098, ,100,000 JBS USA LLC/Finance Inc., senior bond, 144A, 5.875%, 07/15/24 USA USD 16,971, ,000,000 Toll Brothers Finance Corp., senior bond, 5.625%, 01/15/24 USA USD 16,960, ,600,000 NRG Yield Operating LLC, senior bond, 144A, 5.375%, 08/15/24 USA USD 16,932, ,400,000 T-Mobile USA Inc., senior bond, 6.375%, 03/01/25 USA USD 16,703, ,700,000 Linn Energy LLC/Finance Corp., senior note, 8.625%, 04/15/20 USA USD 16,362, ,000,000 Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22 GBR USD 16,321, ,000,000 Intelsat Jackson Holdings SA, senior note, 7.50%, 04/01/21 LUX USD 16,106, ,000,000 CHS/Community Health Systems Inc., senior note, 8.00%, 11/15/19 USA USD 16,050, ,000,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 16,012, ,000,000 Gant Co. Inc., senior bond, 6.375%, 10/15/23 USA USD 15,975, ,000,000 LSB Industries Inc., senior secured note, first lien, 7.75%, 08/01/19 USA USD 15,675, ,400,000 Anna Merger Sub Inc., senior note, 144A, 7.75%, 10/01/22 USA USD 15,631, ,400,000 QEP Resources Inc., senior note, 5.375%, 10/01/22 USA USD 15,580, ,000,000 Hertz Corp., senior note, 6.75%, 04/15/19 USA USD 15,525, ,000,000 Marquette Transportation Co. Inc./Finance Corp., senior secured note, %, 01/15/17 USA USD 15,525, ,380,000 Univision Communications Inc., senior secured bond, first lien, 144A, 6.75%, 09/15/22 USA USD 15,458, ,000,000 Standard Pacific Corp., senior note, 6.25%, 12/15/21 USA USD 15,450, ,400,000 Cott Beverages Inc., senior note, 144A, 6.75%, 01/01/20 USA USD 15,438, ,900,000 Intelsat Jackson Holdings SA, senior bond, 6.625%, 12/15/22 LUX USD 15,384, ,300,000 Sterling International Inc., senior note, 11.00%, 10/01/19 USA USD 15,265, ,700,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior secured note, 144A, FRN, 3.241%, 12/15/19 LUX USD 15,209, ,800,000 Gant Co. Inc., senior note, 5.125%, 07/15/20 USA USD 15,170, ,000,000 Calpine Corp., senior note, 5.375%, 01/15/23 USA USD 15,168, ,700,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, 144A, 8.25%, 01/15/21 USA USD 15,104, ,000,000 Post Holdings Inc., senior note, 7.375%, 02/15/22 USA USD 15,037, ,000,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 14,953, ,200,000 AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, senior note, 144A, 5.00%, 10/01/21 NLD USD 14,794, ,000,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.125%, 02/15/23 USA USD 14,718, ,000,000 EPL Oil & Gas Inc., senior note, 8.25%, 02/15/18 USA USD 14,535, ,000,000 Ineos Group Holdings SA, senior note, 144A, 6.125%, 08/15/18 CHE USD 14,475, ,000,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 14,450, Unaudited Semi-Annual Report

233 Franklin High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 14,000,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 14,192, ,800,000 Gant Co. Inc., senior note, 5.125%, 10/15/19 USA USD 14,179, ,000,000 Stena International SA, secured bond, 144A, 5.75%, 03/01/24 SWE USD 14,175, ,000,000 MGM Resorts International, senior note, 6.00%, 03/15/23 USA USD 14,140, ,000,000 Ocean Rig UDW Inc., senior note, 144A, 7.25%, 04/01/19 USA USD 14,137, ,000,000 QEP Resources Inc., senior note, 5.25%, 05/01/23 USA USD 14,100, ,700,000 Sanchez Energy Corp., senior note, 144A, 6.125%, 01/15/23 USA USD 14,069, ,600,000 Murray Energy Corp., senior secured note, 144A, 8.625%, 06/15/21 USA USD 14,016, ,000,000 DISH DBS Corp., senior note, 6.75%, 06/01/21 USA USD 14,007, ,600,000 Sprint Nextel Corp., senior note, 144A, 7.00%, 03/01/20 USA USD 13,671, ,600,000 Atlas Energy Holdings Operating Co. LLC/Atlas Resource Finance Corp., senior note, 7.75%, 01/15/21 USA USD 13,578, ,900,000 JBS USA LLC/Finance Inc., senior note, 144A, 7.25%, 06/01/21 USA USD 13,351, ,000,000 VTR Finance BV, senior secured note, 144A, 6.875%, 01/15/24 LUX USD 13,292, ,000,000 CBC Ammo LLC/CBC FinCo Inc., senior note, 144A, 7.25%, 11/15/21 BRA USD 13,230, ,300,000 Scientific Games International Inc., senior note, 144A, 10.00%, 12/01/22 USA USD 13,173, ,200,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 13,084, ,900,000 Florida East Coast Holdings Corp., secured note, first lien, 144A, 6.75%, 05/01/19 USA USD 12,803, ,800,000 Penn Virginia Corp., senior note, 8.50%, 05/01/20 USA USD 12,719, ,000,000 Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 06/21/19 USA USD 12,707, ,000,000 Memorial Resource Development Corp., senior note, 144A, 5.875%, 07/01/22 USA USD 12,705, ,400,000 Royal Bank of Scotland Group PLC, sub. note, 5.125%, 05/28/24 GBR USD 12,632, ,700,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 12,569, ,900,000 W&T Offshore Inc., senior note, 8.50%, 06/15/19 USA USD 12,568, ,800,000 MGM Resorts International, senior note, 6.625%, 12/15/21 USA USD 12,449, ,000,000 Goodrich Petroleum Corp., senior note, 8.875%, 03/15/19 USA USD 12,375, ,000,000 Digicel Group Ltd., senior note, 144A, 6.00%, 04/15/21 BMU USD 12,358, ,000,000 Grifols Worldwide Operations Ltd., senior note, 144A, 5.25%, 04/01/22 USA USD 12,302, ,000,000 Radio One Inc., senior sub. note, 144A, 9.25%, 02/15/20 USA USD 12,250, ,700,000 CHS/Community Health Systems Inc., senior secured note, first lien, 5.125%, 08/15/18 USA USD 12,138, ,000,000 First Data Corp., senior bond, %, 01/15/21 USA USD 11,900, ,500,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 11,687, ,600,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 11,614, ,975,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 11,606, ,000,000 Lucent Technologies Inc., senior bond, 6.45%, 03/15/29 FRA USD 11,520, ,300,000 Scientific Games International Inc., senior secured note, first lien, 144A, 7.00%, 01/01/22 USA USD 11,497, ,000,000 Halcon Resources Corp., senior note, 8.875%, 05/15/21 USA USD 11,362, ,000,000 Halcon Resources Corp., senior note, 9.75%, 07/15/20 USA USD 11,325, ,000,000 Videotron Ltd., senior bond, 144A, 5.375%, 06/15/24 CAN USD 11,247, ,492,000 Viridian Group FundCo II, senior note, 144A, %, 04/01/17 GBR USD 11,239, ,600,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 11,230, ,000,000 Frontier Communications Corp., senior note, 8.50%, 04/15/20 USA USD 11,200, ,000,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 9.00%, 02/15/20 USA USD 11,175, ,000,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 11,175, ,000,000 CSC Holdings LLC, senior note, 6.75%, 11/15/21 USA USD 11,087, ,000,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 11,017, ,199,000 Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp., senior note, 8.375%, 06/01/20 USA USD 10,938, ,000,000 Calpine Corp., senior secured bond, first lien, 144A, 5.875%, 01/15/24 USA USD 10,700, ,000,000 E*TRADE Financial Corp., senior note, 6.375%, 11/15/19 USA USD 10,650, ,000,000 The Goodyear Tire & Rubber Co., senior note, 8.25%, 08/15/20 USA USD 10,650, ,555,555 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 10,551, ,000,000 Chesapeake Energy Corp., senior note, 6.125%, 02/15/21 USA USD 10,550, ,000,000 Ineos Finance PLC, senior secured note, 144A, 7.50%, 05/01/20 CHE USD 10,518, ,700,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 04/15/23 USA USD 10,512, ,600,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A, 5.25%, 04/15/21 USA USD 10,494, ,200,000 Sanchez Energy Corp., senior note, 7.75%, 06/15/21 USA USD 10,472, ,100,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior note, 8.625%, 10/15/20 USA USD 10,466, ,000,000 EnQuest PLC, senior note, 144A, 7.00%, 04/15/22 GBR USD 10,444, ,600,000 Navient Corp., senior note, 5.00%, 10/26/20 USA USD 10,427, ,000,000 CenturyLink Inc., senior note, 5.80%, 03/15/22 USA USD 10,425, ,200,000 Chaparral Energy Inc., senior note, 9.875%, 10/01/20 USA USD 10,412, ,100,000 E*TRADE Financial Corp., senior note, 5.375%, 11/15/22 USA USD 10,352, ,000,000 United Rentals North America Inc., senior bond, 5.75%, 11/15/24 USA USD 10,325, ,200,000 Owens-Brockway Glass Container Inc., senior bond, 144A, 5.375%, 01/15/25 USA USD 10,314, ,000,000 CIT Group Inc., senior note, 5.00%, 08/15/22 USA USD 10,312, ,000,000 Steel Dynamics Inc., senior bond, 144A, 5.50%, 10/01/24 USA USD 10,275, ,000,000 Crown Castle International Corp., senior bond, 5.25%, 01/15/23 USA USD 10,250, ,000,000 Steel Dynamics Inc., senior note, 144A, 5.125%, 10/01/21 USA USD 10,187, ,800,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 10,148, ,800,000 Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22 USA USD 10,143, Unaudited Semi-Annual Report 231

234 Franklin High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 10,000,000 Hertz Corp., senior note, 5.875%, 10/15/20 USA USD 10,125, ,500,000 U.S. Coatings Acquisition Inc./Flash Dutch 2 BV, senior note, 144A, 7.375%, 05/01/21 USA USD 10,117, ,700,000 Virgin Media Secured Finance PLC, senior secured note, first lien, 144A, 5.375%, 04/15/21 GBR USD 10,112, ,900,000 DISH DBS Corp., senior note, 144A, 5.875%, 11/15/24 USA USD 9,974, ,300,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 9.125%, 10/15/20 LUX USD 9,904, ,000,000 CommScope Inc., senior note, 144A, 5.00%, 06/15/21 USA USD 9,900, ,000,000 Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 06/01/21 USA USD 9,690, ,100,000 KB Home, senior note, 7.00%, 12/15/21 USA USD 9,594, ,000,000 Alpha Natural Resources Inc., second lien, 144A, 7.50%, 08/01/20 USA USD 9,487, ,500,000 KB Home, senior note, 4.75%, 05/15/19 USA USD 9,381, ,400,000 Sprint Corp., senior bond, 7.875%, 09/15/23 USA USD 9,326, ,000,000 Triangle USA Petroleum Corp., senior note, 144A, 6.75%, 07/15/22 USA USD 9,310, ,900,000 Atlas Energy Holdings Operating Co. LLC/Atlas Resource Finance Corp., senior note, 144A, 9.25%, 08/15/21 USA USD 9,282, ,500,000 Kerling PLC, senior secured note, first lien, Reg S, %, 02/01/17 GBR EUR 9,226, ,900,000 CommScope Holdings Co. Inc., senior note, 144A, PIK, 6.625%, 06/01/20 USA USD 9,211, ,000,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 8.25%, 11/01/19 AUS USD 9,137, ,000,000 Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp., senior note, 6.50%, 05/15/21 USA USD 9,135, ,300,000 American Energy-Permian Basin LLC/AEPB Finance Corp., senior note, 144A, 7.375%, 11/01/21 USA USD 9,102, ,100,000 Frontier Communications Corp., senior note, 8.75%, 04/15/22 USA USD 9,092, ,600,000 Oasis Petroleum Inc., senior note, 6.875%, 03/15/22 USA USD 8,784, ,000,000 Jaguar Holding Co. II/Merger Sub Inc., senior note, 144A, 9.50%, 12/01/19 USA USD 8,610, ,000,000 Ineos Group Holdings SA, senior note, 144A, 5.875%, 02/15/19 CHE USD 8,550, ,000,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 8,550, ,000,000 CHS/Community Health Systems Inc., senior note, 7.125%, 07/15/20 USA USD 8,540, ,000,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 8,460, ,100,000 T-Mobile USA Inc., senior note, 6.542%, 04/28/20 USA USD 8,393, ,200,000 Energy XXI Gulf Coast Inc., senior note, 144A, 6.875%, 03/15/24 USA USD 8,246, ,100,000 Te Healthcare Corp., senior note, 144A, 5.00%, 03/01/19 USA USD 8,130, ,200,000 Compressco Partners LP/Finance Corp., senior note, 144A, 7.25%, 08/15/22 USA USD 8,004, ,000,000 JPMorgan Chase & Co., junior sub. bond, V, 5.00% to 07/30/19, FRN thereafter, Perpetual, 01/01/00 USA USD 7,867, ,300,000 MGM Resorts International, senior note, 6.75%, 10/01/20 USA USD 7,683, ,000,000 Memorial Production Partners LP/Memorial Production Finance Corp., senior note, 144A, 6.875%, 08/01/22 USA USD 7,650, ,000,000 Wind Acquisition Finance SA, senior secured note, first lien, 144A, 4.75%, 07/15/20 ITA USD 7,600, ,000,000 Digicel Group Ltd., senior note, 144A, 7.125%, 04/01/22 BMU USD 7,560, ,500,000 Offshore Group Investment Ltd., senior bond, first lien, 7.125%, 04/01/23 USA USD 7,560, ,400,000 CCOH Safari LLC, senior bond, 5.75%, 12/01/24 USA USD 7,501, ,800,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 7,471, ,500,000 IHS Inc., senior note, 144A, 5.00%, 11/01/22 USA USD 7,462, ,000,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 7,323, ,000,000 HCA Inc., senior secured bond, first lien, 5.25%, 04/15/25 USA USD 7,323, ,000,000 Oasis Petroleum Inc., senior note, 6.50%, 11/01/21 USA USD 7,320, ,100,000 Dynegy Finance I Inc./Dynegy Finance II Inc., senior secured bond, first lien, 144A, 7.625%, 11/01/24 USA USD 7,250, ,100,000 Owens-Brockway Glass Container Inc., senior note, 144A, 5.00%, 01/15/22 USA USD 7,250, ,000,000 inventiv Health Inc., senior secured note, 144A, 9.00%, 01/15/18 USA USD 7,175, ,000,000 TransDigm Inc., senior sub. note, 6.00%, 07/15/22 USA USD 7,017, ,900,000 TransDigm Inc., senior sub. bond, 6.50%, 07/15/24 USA USD 6,969, ,900,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 6,917, ,900,000 Florida East Coast Holdings Corp., senior note, 144A, 9.75%, 05/01/20 USA USD 6,900, ,400,000 Energy XXI Gulf Coast Inc., senior note, 7.50%, 12/15/21 USA USD 6,758, ,000,000 NGL Energy Partners LP/NGL Energy Finance Corp., senior note, 144A, 5.125%, 07/15/19 USA USD 6,728, ,500,000 T-Mobile USA Inc., senior note, 6.731%, 04/28/22 USA USD 6,719, ,500,000 T-Mobile USA Inc., senior note, 6.633%, 04/28/21 USA USD 6,695, ,800,000 Halcon Resources Corp., senior note, 9.25%, 02/15/22 USA USD 6,534, ,000,000 Oasis Petroleum Inc., senior note, 6.875%, 01/15/23 USA USD 6,405, ,200,000 Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22 USA USD 6,339, ,200,000 MGM Resorts International, senior note, 8.625%, 02/01/19 USA USD 5,921, ,500,000 Abengoa Finance SAU, senior note, 144A, 7.75%, 02/01/20 ESP USD 5,801, ,400,000 Pinnacle Entertainment Inc., senior note, 6.375%, 08/01/21 USA USD 5,589, ,000,000 MGM Resorts International, senior note, 7.75%, 03/15/22 USA USD 5,550, ,200,000 T-Mobile USA Inc., senior bond, 6.50%, 01/15/24 USA USD 5,343, ,000,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior note, 6.50%, 04/30/21 USA USD 5,268, ,000,000 CIT Group Inc., senior note, 5.25%, 03/15/18 USA USD 5,225, ,400,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 06/30/21 LUX USD 5,170, ,544,000 First Data Corp., senior note, 11.25%, 01/15/21 USA USD 5,168, ,000,000 Navient Corp., senior note, 4.875%, 06/17/19 USA USD 5,027, ,700,000 Ardagh Packaging Finance PLC, senior note, 144A, 9.125%, 10/15/20 LUX USD 5,017, Unaudited Semi-Annual Report

235 Franklin High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 5,000,000 JPMorgan Chase & Co., junior sub. note, X, 6.10% to 10/01/24, FRN thereafter, Perpetual, 01/01/00 USA USD 5,000, ,700,000 Albea Beauty Holdings SA, first lien, 144A, 8.375%, 11/01/19 FRA USD 4,958, ,000,000 CommScope Inc., senior bond, 144A, 5.50%, 06/15/24 USA USD 4,950, ,667,000 CGG SA, senior note, 7.75%, 05/15/17 FRA USD 4,887, ,000,000 Chesapeake Energy Corp., senior note, 4.875%, 04/15/22 USA USD 4,887, ,500,000 Te Healthcare Corp., first lien, 6.00%, 10/01/20 USA USD 4,843, ,700,000 AECOM Technology Corp., senior note, 144A, 5.75%, 10/15/22 USA USD 4,817, ,800,000 Oasis Petroleum Inc., senior note, 7.25%, 02/01/19 USA USD 4,632, ,315,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A, 7.75%, 04/15/20 USA USD 4,595, ,300,000 M/I Homes Inc., senior note, 8.625%, 11/15/18 USA USD 4,482, ,200,000 Chesapeake Energy Corp., senior note, 5.75%, 03/15/23 USA USD 4,347, ,200,000 Ally Financial Inc., senior bond, 5.125%, 09/30/24 USA USD 4,273, ,200,000 Alere Inc., senior sub. note, 6.50%, 06/15/20 USA USD 4,252, ,000,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 04/01/22 AUS USD 4,181, ,800,000 Chaparral Energy Inc., senior note, 8.25%, 09/01/21 USA USD 4,002, ,225,000 CHC Helicopter SA, senior note, 9.375%, 06/01/21 CAN USD 3,992, ,000,000 Post Holdings Inc., senior note, 144A, 6.00%, 12/15/22 USA USD 3,765, ,600,000 CHS/Community Health Systems Inc., senior secured note, 5.125%, 08/01/21 USA USD 3,753, ,600,000 Frontier Communications Corp., senior bond, 7.625%, 04/15/24 USA USD 3,726, ,600,000 Te Healthcare Corp., senior note, 144A, 5.50%, 03/01/19 USA USD 3,699, ,300,000 CHS/Community Health Systems Inc., senior note, 5.125%, 08/01/21 USA USD 3,512, ,300,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.75%, 01/31/21 LUX USD 3,264, ,900,000 Chaparral Energy Inc., senior note, 7.625%, 11/15/22 USA USD 3,258, ,100,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.25%, 01/31/19 LUX USD 3,038, ,900,000 T-Mobile USA Inc., senior note, 6.125%, 01/15/22 USA USD 2,954, ,800,000 AECOM Technology Corp., senior bond, 144A, 5.875%, 10/15/24 USA USD 2,870, ,500,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 09/15/21 USA USD 2,852, ,000,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 05/15/19 USA USD 2,580, ,400,000 Calpine Corp., senior secured note, first lien, 144A, 6.00%, 01/15/22 USA USD 2,568, ,600,000 Sabine Pass Liquefaction LLC, senior secured, first lien, 5.75%, 05/15/24 USA USD 2,564, ,000,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.00%, 04/01/17 AUS USD 1,918, ,600,000 Cemex SAB de CV, secured note, 144A, 5.875%, 03/25/19 MEX USD 1,623, ,588,235 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 7.00%, 11/15/20 LUX USD 1,612, ,400,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 1,459, ,100,000 Virgin Media Finance PLC, senior bond, 144A, 6.375%, 04/15/23 GBR USD 1,157, ,000,000 Quicksilver Resources Inc., senior note, 9.125%, 08/15/19 USA USD 1,020, ,850,940, TOTAL BONDS 3,850,940, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 3,864,909, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 1,733,089 Goss Graphic Systems Inc., senior sub. note, 12.25%, 11/19/05 **,* USA USD ,000,000 NewPage Corp., Escrow Account ** USA USD Securities Maturing Within One Year 20,000,000 Fontainebleau Las Vegas, senior secured note, first lien, 144A, 11.00%, 06/15/15 * USA USD 250, TOTAL BONDS 250, WARRANTS Casinos & Gaming 97,263 Station Casinos Inc., wts., 06/17/18 ** USA USD 125, TOTAL WARRANTS 125, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 375, TOTAL INVESTMENTS 3,871,373, * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, 2014 ** These securities are submitted to a Fair Valuation Income may be received in additional securities and/or cash Unaudited Semi-Annual Report 233

236 Franklin Income Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Discretionary 867,400 Target Corp. USA USD 65,844, ,202,200 General Motors Co. USA USD 41,968, ,500,000 Ford Motor Co. USA USD 23,250, ,000 Comcast Corp., A USA USD 23,204, ,000 Las Vegas Sands Corp. USA USD 5,816, ,014 Dex Media Inc. USA USD 206, ,289, Consumer Staples 215,100 PepsiCo Inc. USA USD 20,339, Energy 1,004,900 Royal Dutch Shell PLC, A, ADR GBR USD 67,278, ,614,000 BP PLC, ADR GBR USD 61,525, ,000 Chevron Corp. USA USD 50,481, ,000 Total SA, B, ADR FRA USD 25,600, ,000 Exxon Mobil Corp. USA USD 23,112, ,500 Devon Energy Corp. USA USD 16,067, ,000 Diamond Offshore Drilling Inc. USA USD 12,848, ,000 Schlumberger Ltd. USA USD 12,811, ,000 Spectra Energy Corp. USA USD 12,705, ,000 Occidental Petroleum Corp. USA USD 12,091, ,700 HollyFrontier Corp. USA USD 9,021, ,400 Eni SpA ITA EUR 8,750, ,000 Halliburton Co. USA USD 7,866, ,600 The Williams Cos. Inc. USA USD 6,992, ,000 Canadian Oil Sands Ltd. CAN CAD 4,486, ,638, Financials 631,000 Wells Fargo & Co. USA USD 34,591, ,800 JPMorgan Chase & Co. USA USD 32,841, ,134 MetLife Inc. USA USD 32,407, ,000 Bank of America Corp., 7.25%, cvt. pfd., L USA USD 17,444, ,000 Wells Fargo & Co., 7.50%, cvt. pfd., A USA USD 16,974, ,500 Bank of America Corp. USA USD 13,855, ,000 Morgan Stanley, 6.375%, pfd., I USA USD 12,655, ,900 Royal Bank of Canada CAN CAD 7,179, ,000 Outfront Media Inc. USA USD 6,710, ,000 HSBC Holdings PLC GBR GBP 5,217, ,000 GMAC Capital Trust I, 8.125%, pfd. USA USD 3,165, ,000 FelCor Lodging Trust Inc., 7.80%, cvt. pfd., A USA USD 1,149, ,192, Health Care 1,927,200 Pfizer Inc. USA USD 60,032, ,600 Merck & Co. Inc. USA USD 41,377, ,000 Sanofi, ADR FRA USD 22,805, ,000 Johnson & Johnson USA USD 18,822, ,900 Eli Lilly & Co. USA USD 17,240, ,900 Roche Holding AG CHE CHF 9,745, ,000 Bristol-Myers Squibb Co. USA USD 5,903, ,926, Industrials 2,500,000 General Electric Co. USA USD 63,175, ,000 Waste Management Inc. USA USD 25,660, ,000 Lockheed Martin Corp. USA USD 25,034, ,000 Deere & Co. USA USD 22,117, ,000 Raytheon Co. USA USD 21,634, ,000 Republic Services Inc. USA USD 20,125, ,100 The Boeing Co. USA USD 16,520, ,000 United Technologies Corp. USA USD 4,600, ,866, Information Technology 400,000 Apple Inc. USA USD 44,152, ,131,000 Intel Corp. USA USD 41,043, ,300 Microsoft Corp. USA USD 28,673, ,000 KLA-Tencor Corp. USA USD 14,064, ,000 Xilinx Inc. USA USD 10,822, ,200 Cisco Systems Inc. USA USD 10,464, ,000 Texas Instruments Inc. USA USD 8,019, ,239, Unaudited Semi-Annual Report

237 Franklin Income Fund Schedule of Investments as of December 31, 2014 (continued) face Materials 1,284,700 Rio Tinto PLC, ADR GBR USD 59,173, ,000 E. I. du Pont de Nemours and Co. USA USD 48,061, ,000,000 The Dow Chemical Co. USA USD 45,610, ,542,600 BHP Billiton PLC AUS GBP 33,385, ,000 Agrium Inc. CAN USD 30,784, ,000 LyondellBasell Industries NV, A USA USD 23,817, ,000,000 Freeport-McMoRan Inc., B USA USD 23,360, ,400 Alcoa Inc., 5.375%, cvt. pfd. USA USD 20,805, ,000 The Mosaic Co. USA USD 15,977, ,000 BASF SE DEU EUR 12,683, ,600 Barrick Gold Corp. CAN USD 5,166, ,000 Goldcorp Inc. CAN USD 3,704, ,000 ArcelorMittal, 6.00%, cvt. pfd. LUX USD 2,941, ,468, Telecommunication Services 1,288,600 AT&T Inc. USA USD 43,284, ,800 Verizon Communications Inc. USA USD 39,285, ,000 CenturyLink Inc. USA USD 14,842, ,727,271 Vodafone Group PLC GBR GBP 9,464, ,644,400 Telstra Corp. Ltd. AUS AUD 8,015, ,892, Utilities 1,699,600 Exelon Corp. USA USD 63,021, ,224,100 The Southern Co. USA USD 60,115, ,107,700 PG&E Corp. USA USD 58,973, ,000 Duke Energy Corp. USA USD 41,770, ,000 Dominion Resources Inc. USA USD 23,070, ,000 Xcel Energy Inc. USA USD 21,552, ,000 Entergy Corp. USA USD 17,496, ,000 Sempra Energy USA USD 16,704, ,315 NextEra Energy Inc. USA USD 15,020, ,000 PPL Corp. USA USD 14,532, ,000 Ameren Corp. USA USD 13,839, ,000 Pinnacle West Capital Corp. USA USD 13,662, ,000 FirstEnergy Corp. USA USD 13,646, ,900 Dominion Resources Inc., 6.375%, cvt. pfd., A USA USD 12,425, ,000 Dynegy Inc. USA USD 10,622, ,000 American Electric Power Co. Inc. USA USD 9,108, ,000 Public Service Enterprise Group Inc. USA USD 8,282, ,000 NextEra Energy Inc., 5.799%, cvt. pfd. USA USD 5,769, ,000 Exelon Corp., 6.50%, cvt. pfd. USA USD 5,250, ,000 Dominion Resources Inc., 6.125%, cvt. pfd., A USA USD 4,980, ,000 TECO Energy Inc. USA USD 4,098, ,171,100 HK Electric Investments & HK Electric Investments Ltd.,144A HKG HKD 2,093, ,000 Dominion Resources Inc., 6.00%, cvt. pfd., B USA USD 1,983, ,015, TOTAL SHARES 2,106,870, WARRANTS Utilities 31,757 Dynegy Inc., wts., 10/02/17 USA USD 127, TOTAL WARRANTS 127, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 2,106,998, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Consumer Discretionary 1,000,000 Morgan Stanley into Ford Motor Co., 7.00%, cvt. pfd., 144A USA USD 16,000, ,000 Fiat Chrysler Automobiles NV, 7.875%, cvt., pfd. GBR USD 6,450, ,450, Consumer Staples 280,000 Citigroup Inc. into Whole Foods Inc., 7.00%, cvt. pfd., 144A USA USD 12,476, Energy 180,000 JPMorgan Chase & Co. into Anadarko Petroleum Corp., 7.00%, cvt. pfd., 144A USA USD 14,910, ,000 Barclays Bank PLC into Anadarko Petroleum Corp., 6.00%, cvt. pfd., 144A USA USD 12,594, ,000 Citigroup Inc. into Cabot Oil & Gas Corp., 6.00%, cvt. pfd., 144A USA USD 11,255, ,000 Citigroup Inc. into Anadarko Petroleum Corp., 8.00%, cvt. pfd., 144A USA USD 10,610, ,000 JPMorgan Chase & Co. into The Williams Cos. Inc., 8.50%, cvt. pfd., 144A USA USD 7,876, ,000 Credit Suisse New York into Baker Hughes Inc., 6.00%, cvt. pfd., 144A USA USD 7,875, ,000 Penn Virginia Corp., 6.00%, cvt. pfd., 144A USA USD 4,940, ,000 Deutsche Bank AG/London into Peabody Energy Corp., 10.00%, cvt. pfd., 144A USA USD 4,286, Unaudited Semi-Annual Report 235

238 Franklin Income Fund Schedule of Investments as of December 31, 2014 (continued) face Energy (continued) 3,500 Chesapeake Energy Corp., 5.75%, cvt. pfd., 144A USA USD 3,591, ,000 Sanchez Energy Corp., 6.50%, cvt. pfd., B USA USD 3,418, ,325 Halcon Resources Corp., 5.75%, cvt. pfd., A USA USD 2,712, ,000 SandRidge Energy Inc., 7.00%, cvt. pfd. USA USD 2,234, ,000 Sanchez Energy Corp., 4.875%, cvt. pfd. USA USD 1,288, ,594, Financials 175,000 Credit Suisse New York into Metlife Inc., 6.00%, cvt. pfd., 144A USA USD 9,649, ,300 FHLMC, 8.375%, pfd., Z USA USD 490, ,700 FNMA, 8.25%, pfd. USA USD 470, ,611, Industrials 1,479 CEVA Holdings LLC GBR USD 1,146, ,408 CEVA Holdings LLC, cvt. pfd., A-2 GBR USD 1,091, CEVA Holdings LLC, cvt. pfd., A-1 GBR USD 44, ,281, Information Technology 572,000 Bank of America Corp. into FreescaleSemiconductor Ltd., 7.00%, cvt. pfd., 144A USA USD 13,081, Materials 250,000 Wells Fargo & Co. into Freeport-McMoRan Inc., 7.50%, cvt. pfd., 144A USA USD 6,264, Utilities 50,000 NextEra Energy Inc., 5.599%, cvt. pfd. USA USD 3,477, TOTAL SHARES 158,238, BONDS Corporate Bonds 32,800,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 32,226, ,000,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 24,640, ,000,000 Abengoa Yield PLC, senior note, 144A, 7.00%, 11/15/19 ESP USD 24,546, ,263,000 First Data Corp., senior bond, %, 01/15/21 USA USD 21,732, ,000,000 Dynegy Finance I Inc./Dynegy Finance II Inc., senior note, 144A, 6.75%, 11/01/19 USA USD 20,375, ,000,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 20,275, ,000,000 Te Healthcare Corp., 4.375%, 10/01/21 USA USD 19,950, ,400,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 19,780, ,000,000 Cobalt International Energy Inc., cvt., senior bond, 3.125%, 05/15/24 USA USD 16,890, ,000,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 16,723, ,000,000 T-Mobile USA Inc., senior note, 6.464%, 04/28/19 USA USD 15,637, ,000,000 Dynegy Finance I Inc./Dynegy Finance II Inc., senior note, 144A, 7.375%, 10/08/22 USA USD 15,281, ,000,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 14,953, ,100,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 14,911, ,000,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 14,780, ,000,000 JPMorgan Chase & Co., junior sub. bond, V, 5.00% to 07/30/19, FRN thereafter, Perpetual USA USD 14,751, ,000,000 Citigroup Inc., junior sub. note, 5.90% to 02/15/23, FRN thereafter, Perpetual USA USD 14,700, ,100,000 Sprint Corp., senior bond, 7.875%, 09/15/23 USA USD 13,990, ,200,000 Sabine Pass Liquefaction LLC, senior secured, first lien, 5.75%, 05/15/24 USA USD 13,018, ,500,000 Jaguar Holding Co. I, senior note, 144A, PIK, 9.375%, 10/15/17 USA USD 12,806, ,500,000 HCA Inc., senior secured bond, first lien, 4.75%, 05/01/23 USA USD 12,750, ,200,000 Nielsen Finance LLC/Co., senior note, 144A, 5.00%, 04/15/22 USA USD 12,276, ,000,000 Walter Energy Inc., first lien, 144A, 9.50%, 10/15/19 USA USD 11,475, ,000,000 Bank of America Corp., junior sub. bond, U, 5.20% to 06/01/23, FRN thereafter, Perpetual USA USD 11,115, ,400,000 HCA Inc., senior secured note, first lien, 5.00%, 03/15/24 USA USD 10,712, ,000,000 DaVita HealthCare Partners Inc., senior note, 5.75%, 08/15/22 USA USD 10,637, ,500,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.75%, 01/15/24 USA USD 10,631, ,000,000 DISH DBS Corp., senior note, 5.875%, 07/15/22 USA USD 10,275, ,000,000 CCOH Safari LLC, senior note, 5.50%, 12/01/22 USA USD 10,175, ,000,000 The ADT Corp., senior note, 5.25%, 03/15/20 USA USD 10,175, ,420,000 istar Financial Inc., senior note, 5.00%, 07/01/19 USA USD 10,159, ,000,000 Calpine Corp., senior note, 5.375%, 01/15/23 USA USD 10,112, ,000,000 Numericable Group SA, senior note, first lien, 144A, 6.00%, 05/15/22 FRA USD 10,056, ,000,000 BWAY Holding Co., senior note, 144A, 9.125%, 08/15/21 USA USD 10,050, ,000,000 T-Mobile USA Inc., senior note, 6.00%, 03/01/23 USA USD 10,050, ,700,000 CONSOL Energy Inc., senior note, 144A, 5.875%, 04/15/22 USA USD 10,004, ,000,000 JPMorgan Chase & Co., junior sub. note, X, 6.10% to 10/01/24, FRN thereafter, Perpetual USA USD 10,000, ,700,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 9,966, ,000,000 JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 08/01/23, FRN thereafter, Perpetual USA USD 9,925, ,000,000 CommScope Inc., senior bond, 144A, 5.50%, 06/15/24 USA USD 9,900, Unaudited Semi-Annual Report

239 Franklin Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 10,000,000 NGL Energy Partners LP/NGL Energy Finance Corp., senior note, 144A, 6.875%, 10/15/21 USA USD 9,900, ,000,000 Citigroup Inc., junior sub. bond, 5.95% to 01/30/23, FRN thereafter, Perpetual USA USD 9,862, ,000,000 Diamondback Energy Inc., senior note, 7.625%, 10/01/21 USA USD 9,812, ,000,000 Crown Americas LLC/Crown Americas Capital Corp. IV, senior bond, 4.50%, 01/15/23 USA USD 9,750, ,000,000 DISH DBS Corp., senior bond, 5.00%, 03/15/23 USA USD 9,700, ,000,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 9,550, ,000,000 Denbury Resources Inc., senior note, 5.50%, 05/01/22 USA USD 9,200, ,000,000 Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 05/15/23 USA USD 9,135, ,000,000 MEG Energy Corp., senior bond, 144A, 7.00%, 03/31/24 CAN USD 9,100, ,700,000 Sanchez Energy Corp., senior note, 7.75%, 06/15/21 USA USD 9,069, ,000,000 Alliance One International Inc., secured note, second lien, 9.875%, 07/15/21 USA USD 8,975, ,200,000 Denbury Resources Inc., senior sub. note, 4.625%, 07/15/23 USA USD 8,899, ,000,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.125%, 02/15/23 USA USD 8,831, ,400,000 United Rentals North America Inc., senior bond, 5.75%, 11/15/24 USA USD 8,673, ,800,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 04/15/23 USA USD 8,646, ,000,000 W&T Offshore Inc., senior note, 8.50%, 06/15/19 USA USD 8,645, ,900,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 8,616, ,000,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 8,587, ,500,000 Te Healthcare Corp., senior secured note, first lien, 4.50%, 04/01/21 USA USD 8,553, ,000,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 8,505, ,500,000 JBS USA LLC/Finance Inc., senior bond, 144A, 5.875%, 07/15/24 USA USD 8,436, ,000,000 KB Home, senior note, 7.00%, 12/15/21 USA USD 8,435, ,300,000 DISH DBS Corp., senior note, 144A, 5.875%, 11/15/24 USA USD 8,362, ,800,000 Shea Homes LP/Funding Corp., senior secured note, 8.625%, 05/15/19 USA USD 8,229, ,700,000 Reynolds Group Issuer Inc./LLC/SA, senior secured note, 7.875%, 08/15/19 USA USD 8,133, ,766,000 Citigroup Inc., junior sub. bond, 5.35% to 05/15/23, FRN thereafter, Perpetual USA USD 8,130, ,000,000 Bill Barrett Corp., senior note, 7.00%, 10/15/22 USA USD 8,100, ,000,000 Calumet Specialty Products Partners LP/Calumet Finance Corp., senior note, 144A, 6.50%, 04/15/21 USA USD 8,077, ,900,000 Wells Fargo & Co., junior sub. bond, S, 5.90% to 06/15/24, FRN thereafter, Perpetual USA USD 7,979, ,000,000 Stone Energy Corp., senior bond, 7.50%, 11/15/22 USA USD 7,785, ,500, BC ULC/New Red Finance Inc., secured note, second lien, 144A, 6.00%, 04/01/22 CAN USD 7,725, ,200,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 7,667, ,400,000 JBS USA LLC/Finance Inc., senior note, 144A, 7.25%, 06/01/21 USA USD 7,659, ,900,000 Verizon Communications Inc., senior note, 5.15%, 09/15/23 USA USD 7,624, ,000,000 CGG SA, senior note, 6.875%, 01/15/22 FRA USD 7,618, ,336,000 Hertz Corp., senior note, 6.75%, 04/15/19 USA USD 7,592, ,000,000 Wind Acquisition Finance SA, senior note, second lien, 144A, 7.375%, 04/23/21 ITA USD 7,560, ,500,000 Chesapeake Energy Corp., senior note, 5.375%, 06/15/21 USA USD 7,532, ,000,000 Rice Energy Inc., senior note, 144A, 6.25%, 05/01/22 USA USD 7,480, ,700,000 Antero Resources Finance Corp., senior note, 5.375%, 11/01/21 USA USD 7,478, ,500,000 NGPL PipeCo LLC, secured note, 144A, 7.119%, 12/15/17 USA USD 7,406, ,800,000 JPMorgan Chase & Co., junior sub. note, I, 7.90% to 04/30/19, FRN thereafter, Perpetual USA USD 7,352, ,100, Hour Holdings III LLC, senior note, 144A, 8.00%, 06/01/22 USA USD 7,325, ,700,000 Stena International SA, secured bond, 144A, 5.75%, 03/01/24 SWE USD 7,276, ,100,000 DaVita HealthCare Partners Inc., senior bond, 5.125%, 07/15/24 USA USD 7,255, ,400,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 7,224, ,000,000 First Quantum Minerals Ltd., senior note, 144A, 7.25%, 05/15/22 CAN USD 7,220, ,000,000 Telecom Italia SpA, senior note, 144A, 5.303%, 05/30/24 ITA USD 7,109, ,500,000 Kinder Morgan Inc., senior secured bond, first lien, 144A, 5.625%, 11/15/23 USA USD 6,969, ,700,000 Millicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 LUX USD 6,888, ,000,000 CGG SA, senior note, 6.50%, 06/01/21 FRA USD 6,885, ,600,000 Energy XXI Gulf Coast Inc., senior note, 144A, 6.875%, 03/15/24 USA USD 6,835, ,000,000 Regal Entertainment Group, senior note, 5.75%, 03/15/22 USA USD 6,720, ,700,000 Cott Beverages Inc., senior note, 144A, 6.75%, 01/01/20 USA USD 6,716, ,000,000 Energy XXI Gulf Coast Inc., senior note, 9.25%, 12/15/17 USA USD 6,650, ,587,000 Rockies Express Pipeline LLC, senior note, 144A, 6.00%, 01/15/19 USA USD 6,636, ,500,000 Abengoa Greenfield SA, senior note, 144A, 6.50%, 10/01/19 ESP USD 6,557, ,200,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 6,548, ,400,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 04/15/22 USA USD 6,531, ,000,000 Verizon Communications Inc., senior bond, 6.55%, 09/15/43 USA USD 6,415, ,100,000 Freescale Semiconductor Inc., senior secured note, 144A, 6.00%, 01/15/22 USA USD 6,389, ,300,000 Iron Mountain Inc., senior sub. bond, 5.75%, 08/15/24 USA USD 6,370, ,000,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior note, 6.50%, 04/30/21 USA USD 6,322, ,500,000 Sanchez Energy Corp., senior note, 144A, 6.125%, 01/15/23 USA USD 6,318, ,500,000 Aviation Capital Group Corp., 144A, 6.75%, 04/06/21 USA USD 6,256, Unaudited Semi-Annual Report 237

240 Franklin Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 5,450,000 HCA Inc., senior note, 7.50%, 02/15/22 USA USD 6,240, ,000,000 WhiteWave Foods Co., senior note, 5.375%, 10/01/22 USA USD 6,195, ,800,000 KB Home, senior bond, 7.50%, 09/15/22 USA USD 6,177, ,000,000 Kinder Morgan Inc., senior note, MTN, 7.75%, 01/15/32 USA USD 6,175, ,652,000 Dollar General Corp., senior bond, 3.25%, 04/15/23 USA USD 6,065, ,000,000 CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp., senior note, 144A, 5.25%, 02/15/22 USA USD 6,060, ,000,000 CommScope Inc., senior note, 144A, 5.00%, 06/15/21 USA USD 5,940, ,000,000 Chrysler Group LLC/CG Co-Issuer Inc., senior secured note, 8.25%, 06/15/21 USA USD 5,562, ,200,000 EXCO Resources Inc., senior note, 7.50%, 09/15/18 USA USD 5,539, ,000,000 Peabody Energy Corp., senior note, 6.00%, 11/15/18 USA USD 5,475, ,000,000 Dynacast International LLC/Finance Inc., 9.25%, 07/15/19 USA USD 5,387, ,200,000 Royal Bank of Scotland Group PLC, sub. note, 5.125%, 05/28/24 GBR USD 5,297, ,000,000 Chrysler Group LLC/CG Co-Issuer Inc., senior secured note, 8.00%, 06/15/19 USA USD 5,281, ,000,000 Cemex SAB de CV, secured note, 144A, 7.25%, 01/15/21 MEX USD 5,259, ,000,000 HCA Inc., senior secured bond, first lien, 5.25%, 04/15/25 USA USD 5,231, ,000,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured bond, 144A, 5.50%, 01/15/23 DEU USD 5,225, ,000,000 Ahern Rentals Inc., secured note, second lien, 144A, 9.50%, 06/15/18 USA USD 5,200, ,000,000 JBS USA LLC/Finance Inc., senior note, 144A, 7.25%, 06/01/21 USA USD 5,175, ,000,000 T-Mobile USA Inc., senior note, 6.731%, 04/28/22 USA USD 5,168, ,000,000 Albertsons Holdings/Saturn Acquisition, senior note, 144A, 7.75%, 10/15/22 USA USD 5,150, ,000,000 OneMain Financial Holdings Inc., senior note, 144A, 7.25%, 12/15/21 USA USD 5,150, ,000,000 T-Mobile USA Inc., senior note, 6.633%, 04/28/21 USA USD 5,150, ,000,000 T-Mobile USA Inc., senior bond, 6.625%, 04/01/23 USA USD 5,145, ,000,000 Mallinckrodt International Finance SA/Mallinckrodt CB LLC, senior note, 144A, 5.75%, 08/01/22 USA USD 5,143, ,000,000 WR Grace & Co-Conn, senior note, 144A, 5.125%, 10/01/21 USA USD 5,137, ,000,000 Ashtead Capital Inc., second lien, 144A, 5.625%, 10/01/24 GBR USD 5,134, ,000,000 OneMain Financial Holdings Inc., senior note, 144A, 6.75%, 12/15/19 USA USD 5,112, ,000,000 Access Midstream Partner LP/ACMP Finance Corp., senior note, 4.875%, 05/15/23 USA USD 5,100, ,000,000 HD Supply Inc., first lien, 144A, 5.25%, 12/15/21 USA USD 5,100, ,000,000 The AES Corp., senior bond, 5.50%, 03/15/24 USA USD 5,099, ,000,000 Sabine Pass Liquefaction LLC, first lien, 6.25%, 03/15/22 USA USD 5,093, ,000,000 Bombardier Inc., senior note, 144A, 6.00%, 10/15/22 CAN USD 5,056, ,000,000 CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp., senior bond, 144A, 5.875%, 03/15/25 USA USD 5,050, ,000,000 Freescale Semiconductor Inc., secured note, 144A, 5.00%, 05/15/21 USA USD 5,025, ,000,000 Sprint Nextel Corp., senior note, 7.00%, 08/15/20 USA USD 5,025, ,000,000 Weyerhaeuser Real Estate Co., senior bond, 144A, 5.875%, 06/15/24 USA USD 5,018, ,800,000 Ultra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 USA USD 5,017, ,000,000 Lundin Mining Corp., senior secured note, 144A, 7.875%, 11/01/22 CAN USD 5,012, ,000,000 JPMorgan Chase & Co., junior sub. bond, 6.125% to 04/30/24, FRN thereafter, Perpetual USA USD 5,012, ,000,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 5,006, ,000,000 Belden Inc., senior sub. note, 144A, 5.50%, 09/01/22 USA USD 4,987, ,000,000 The AES Corp., senior bond, 4.875%, 05/15/23 USA USD 4,987, ,000,000 MGM Resorts International, senior note, 5.25%, 03/31/20 USA USD 4,975, ,000,000 Inmarsat Finance PLC, senior note, 144A, 4.875%, 05/15/22 GBR USD 4,962, ,000,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 4,937, ,000,000 Navient Corp., senior note, 6.125%, 03/25/24 USA USD 4,925, ,500,000 American Energy-Woodford LLC/Finance Corp., senior note, 144A, 9.00%, 09/15/22 USA USD 4,875, ,000,000 HudBay Minerals Inc., senior note, 144A, 9.50%, 10/01/20 CAN USD 4,875, ,500,000 Rex Energy Corp., senior note, 144A, 6.25%, 08/01/22 USA USD 4,866, ,000,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 06/30/21 LUX USD 4,787, ,000,000 Transocean Inc., senior bond, 6.50%, 11/15/20 USA USD 4,747, ,000,000 Sirius XM Radio Inc., senior note, 144A, 4.625%, 05/15/23 USA USD 4,700, ,000,000 Jefferies Finance LLC/JFIN Co-Issuer Corp., senior note, 144A, 7.50%, 04/15/21 USA USD 4,668, ,500,000 CommScope Holdings Co. Inc., senior note, 144A, PIK, 6.625%, 06/01/20 USA USD 4,657, ,700,000 Navistar International Corp., senior note, 8.25%, 11/01/21 USA USD 4,653, ,500,000 Te Healthcare Corp., senior note, 144A, 5.50%, 03/01/19 USA USD 4,623, ,000,000 The ADT Corp., senior bond, 4.125%, 06/15/23 USA USD 4,537, ,000,000 The Williams Cos. Inc., senior bond, 3.70%, 01/15/23 USA USD 4,498, ,400,000 Alere Inc., senior sub. note, 6.50%, 06/15/20 USA USD 4,455, ,900,000 Offshore Group Investment Ltd., senior secured note, first lien, 7.50%, 11/01/19 USA USD 4,432, ,500,000 NCR Corp., senior note, 5.00%, 07/15/22 USA USD 4,410, ,200,000 Reynolds Group Issuer Inc./LLC/SA, senior secured note, 6.875%, 02/15/21 USA USD 4,404, ,802,000 Bill Barrett Corp., senior note, 7.625%, 10/01/19 USA USD 4,393, ,500,000 AMC Networks Inc., 4.75%, 12/15/22 USA USD 4,387, ,000,000 PetroQuest Energy Inc., senior note, 10.00%, 09/01/17 USA USD 4,387, ,100,000 EnQuest PLC, senior note, 144A, 7.00%, 04/15/22 GBR USD 4,362, ,900,000 Cablevision Systems Corp., senior note, 7.75%, 04/15/18 USA USD 4,304, ,000,000 Boxer Parent Co. Inc., senior note, 144A, PIK, 9.00%, 10/15/19 USA USD 4,275, ,000,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 4,250, Unaudited Semi-Annual Report

241 Franklin Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 5,000,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 4,237, ,004,000 Freescale Semiconductor Inc., senior note, 8.05%, 02/01/20 USA USD 4,234, ,900,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 4,226, ,000,000 Virgin Media Secured Finance PLC, senior secured bond, first lien, 144A, 5.50%, 01/15/25 GBR USD 4,142, ,300,000 Denbury Resources Inc., senior bond, 6.375%, 08/15/21 USA USD 4,106, ,000,000 Cemex SAB de CV, senior secured note, 144A, 6.50%, 12/10/19 MEX USD 4,102, ,800,000 Oro Negro Drilling Pte Ltd., senior secured note, 144A, 7.50%, 01/24/19 MEX USD 4,068, ,000,000 The Goldman Sachs Group Inc., junior sub. note, 5.70% to 05/10/19, FRN thereafter, Perpetual USA USD 4,061, ,000,000 TransDigm Inc., senior sub. bond, 6.50%, 07/15/24 USA USD 4,040, ,000,000 TransDigm Inc., senior sub. note, 6.00%, 07/15/22 USA USD 4,010, ,400,000 Hercules Offshore Inc., senior note, 144A, 10.25%, 04/01/19 USA USD 3,959, ,050,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 3,948, ,000,000 Atlas Energy Holdings Operating Co. LLC/Atlas Resource Finance Corp., senior note, 9.25%, 08/15/21 USA USD 3,900, ,500,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 05/15/19 USA USD 3,870, ,000,000 Memorial Production Partners LP/Memorial Production Finance Corp., senior note, 144A, 6.875%, 08/01/22 USA USD 3,825, ,000,000 Niska Gas Storage Canada ULC/Finance Corp., senior note, 144A, 6.50%, 04/01/19 USA USD 3,787, ,600,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 3,775, ,000,000 Halcon Resources Corp., senior note, 9.75%, 07/15/20 USA USD 3,775, ,000,000 Alpha Natural Resources Inc., cvt., senior note, 4.875%, 12/15/20 USA USD 3,712, ,246,000 First Data Corp., senior note, %, 06/15/21 USA USD 3,692, ,245,000 First Data Corp., senior note, 11.25%, 01/15/21 USA USD 3,691, ,500,000 Frontier Communications Corp., senior note, 7.125%, 01/15/23 USA USD 3,578, ,000,000 Ocean Rig UDW Inc., senior note, 144A, 7.25%, 04/01/19 USA USD 3,534, ,400,000 T-Mobile USA Inc., senior note, 6.542%, 04/28/20 USA USD 3,523, ,000,000 Frontier Communications Corp., senior note, 9.25%, 07/01/21 USA USD 3,476, ,200,000 Calpine Corp., senior secured note, first lien, 144A, 6.00%, 01/15/22 USA USD 3,424, ,000,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 3,420, ,200,000 The Goodyear Tire & Rubber Co., senior note, 6.50%, 03/01/21 USA USD 3,408, ,300,000 NRG Yield Operating LLC, senior bond, 144A, 5.375%, 08/15/24 USA USD 3,366, ,800,000 Visant Corp., senior note, 10.00%, 10/01/17 USA USD 3,344, ,600,000 Offshore Group Investment Ltd., senior bond, first lien, 7.125%, 04/01/23 USA USD 3,312, ,100,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 9.875%, 08/15/19 USA USD 3,301, ,800,000 Ineos Group Holdings SA, senior note, 144A, 5.75%, 02/15/19 CHE EUR 3,277, ,000,000 SandRidge Energy Inc., senior note, 7.50%, 02/15/23 USA USD 3,225, ,000,000 Chesapeake Energy Corp., senior note, 6.50%, 08/15/17 USA USD 3,210, ,250,000 TransDigm Inc., senior sub. note, 5.50%, 10/15/20 USA USD 3,193, ,000,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.25%, 02/15/21 USA USD 3,090, ,000,000 Paragon Offshore PLC, senior note, 144A, 6.75%, 07/15/22 USA USD 3,087, ,100,000 Infor Software Parent LLC/Inc., senior note, 144A, PIK, 7.125%, 05/01/21 USA USD 3,053, ,000,000 Energy XXI Gulf Coast Inc., 7.75%, 06/15/19 USA USD 3,050, ,000,000 Cumulus Media Holdings Inc., senior note, 7.75%, 05/01/19 USA USD 3,041, ,500,000 Sprint Nextel Corp., 11.50%, 11/15/21 USA USD 3,018, ,590,752 iheartcommunications Inc., senior note, PIK, 14.00%, 02/01/21 USA USD 2,939, ,000,000 HudBay Minerals Inc., senior note, 9.50%, 10/01/20 CAN USD 2,925, ,000,000 Ball Corp., senior bond, 4.00%, 11/15/23 USA USD 2,910, ,600,000 Alpha Natural Resources Inc., second lien, 144A, 7.50%, 08/01/20 USA USD 2,909, ,300,000 Linn Energy LLC/Finance Corp., senior note, 8.625%, 04/15/20 USA USD 2,887, ,800,000 AmSurg Corp., senior note, 144A, 5.625%, 07/15/22 USA USD 2,884, ,800,000 Reynolds Group Issuer Inc./LLC/SA, first lien, 5.75%, 10/15/20 USA USD 2,884, ,500,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 2,849, ,000,000 Molycorp Inc., first lien, 10.00%, 06/01/20 USA USD 2,800, ,015,000 Rex Energy Corp., senior note, 8.875%, 12/01/20 USA USD 2,713, ,800,000 Abengoa Finance SAU, senior note, 144A, 8.875%, 11/01/17 ESP USD 2,712, ,000,000 Arch Coal Inc., senior note, 7.25%, 06/15/21 USA USD 2,666, ,500,000 AngloGold Ashanti Holdings PLC, senior note, 8.50%, 07/30/20 ZAF USD 2,660, ,500,000 CHS/Community Health Systems Inc., senior note, 5.125%, 08/01/21 USA USD 2,660, ,900,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 2,660, ,500,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior note, 7.375%, 06/01/20 USA USD 2,656, ,500,000 U.S. Foods Inc., 8.50%, 06/30/19 USA USD 2,652, ,500,000 Sabine Pass LNG LP, senior secured note, 7.50%, 11/30/16 USA USD 2,612, ,000,000 SandRidge Energy Inc., senior note, 7.50%, 03/15/21 USA USD 2,580, ,500,000 CIT Group Inc., senior bond, 5.00%, 08/01/23 USA USD 2,575, ,900,000 CEVA Group PLC, senior note, first lien, 144A, 4.00%, 05/01/18 GBR USD 2,573, ,000,000 Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 06/01/21 USA USD 2,550, ,500,000 EP Energy LLC/Everest Acquisition Finance Inc., senior note, 9.375%, 05/01/20 USA USD 2,537, ,200,000 MGM Resorts International, senior note, 8.625%, 02/01/19 USA USD 2,505, ,000,000 Cemex SAB de CV, cvt., sub. note, 3.75%, 03/15/18 MEX USD 2,436, ,500,000 Algeco Scotsman Global Finance PLC, senior secured note, first lien, 144A, 8.50%, 10/15/18 GBR USD 2,429, ,200,000 Sterling International Inc., senior note, 11.00%, 10/01/19 USA USD 2,348, ,300,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.75%, 01/31/21 LUX USD 2,275, ,000,000 Halcon Resources Corp., senior note, 8.875%, 05/15/21 USA USD 2,272, Unaudited Semi-Annual Report 239

242 Franklin Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 2,000,000 Frontier Communications Corp., senior note, 8.50%, 04/15/20 USA USD 2,240, ,000,000 MGM Resorts International, senior note, 10.00%, 11/01/16 USA USD 2,235, ,000,000 International Lease Finance Corp., senior note, 8.75%, 03/15/17 USA USD 2,220, ,500,000 American Energy-Permian Basin LLC, cvt., 144A, PIK, 8.00%, 05/01/22 USA USD 2,187, ,300,000 Ineos Group Holdings SA, senior note, 144A, 5.875%, 02/15/19 CHE USD 2,185, ,900,000 Halcon Resources Corp., senior note, 9.25%, 02/15/22 USA USD 2,153, ,100,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 5.625%, 12/01/21 USA USD 2,121, ,100,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.25%, 01/31/19 LUX USD 2,058, ,100,000 NGL Energy Partners LP/NGL Energy Finance Corp., senior note, 144A, 5.125%, 07/15/19 USA USD 2,018, ,800,000 Cemex Finance LLC, senior secured note, 144A, 9.375%, 10/12/22 MEX USD 2,016, ,500,000 Penn Virginia Corp., senior note, 8.50%, 05/01/20 USA USD 2,012, ,000,000 Altice SA, senior secured note, 144A, 7.75%, 05/15/22 LUX USD 2,007, ,000,000 Te Healthcare Corp., senior note, 144A, 5.00%, 03/01/19 USA USD 2,007, ,500,000 Magnum Hunter Resources Corp., senior note, 9.75%, 05/15/20 USA USD 1,987, ,000,000 Cinemark USA Inc., senior note, 5.125%, 12/15/22 USA USD 1,965, ,900,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.875%, 03/01/22 USA USD 1,904, ,070,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 1,883, ,070,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 1,873, ,700,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 1,867, ,950,000 Antero Resources Corp., senior note, 144A, 5.125%, 12/01/22 USA USD 1,847, ,000,000 Oasis Petroleum Inc., senior note, 6.875%, 03/15/22 USA USD 1,830, ,700,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 1,797, ,400,000 Kerling PLC, senior secured note, 144A, %, 02/01/17 GBR EUR 1,722, ,600,000 Kinder Morgan Inc., senior secured note, 144A, 5.00%, 02/15/21 USA USD 1,666, ,500,000 Best Buy Co. Inc., senior note, 5.50%, 03/15/21 USA USD 1,567, ,000,000 Consolidated Minerals Ltd., senior secured note, 144A, 8.00%, 05/15/20 JER USD 1,512, ,500,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 1,467, ,500,000 NCR Corp., senior note, 4.625%, 02/15/21 USA USD 1,462, ,300,000 CSC Holdings LLC, senior note, 6.75%, 11/15/21 USA USD 1,441, ,353,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 1,415, ,000,000 SandRidge Energy Inc., senior note, 8.75%, 01/15/20 USA USD 1,380, ,300,000 CHS/Community Health Systems Inc., senior secured note, 5.125%, 08/01/21 USA USD 1,355, ,000,000 Quicksilver Resources Inc., senior note, 11.00%, 07/01/21 USA USD 1,275, ,100,000 The Goodyear Tire & Rubber Co., senior note, 8.25%, 08/15/20 USA USD 1,171, ,100,000 MGM Resorts International, senior note, 6.75%, 10/01/20 USA USD 1,157, ,000,000 Cablevision Systems Corp., senior note, 8.625%, 09/15/17 USA USD 1,115, ,500,000 Hercules Offshore Inc., senior note, 144A, 6.75%, 04/01/22 USA USD 1,087, ,000 Infor U.S. Inc., senior note, 9.375%, 04/01/19 USA USD 859, ,000,000 Walter Energy Inc., senior note, 9.875%, 12/15/20 USA USD 840, ,500,000 Midstates Petroleum Co. Inc./LLC, senior note, 10.75%, 10/01/20 USA USD 810, ,000 Academy Ltd./Finance Corp., senior note, 144A, 9.25%, 08/01/19 USA USD 764, ,500,000 Arch Coal Inc., senior note, 7.00%, 06/15/19 USA USD 762, ,000 CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp., senior bond, 144A, 5.625%, 02/15/24 USA USD 503, ,000,000 Alpha Natural Resources Inc., senior note, 6.25%, 06/01/21 USA USD 285, ,000 Freescale Semiconductor Inc., senior note, 10.75%, 08/01/20 USA USD 62, ,000 Motors Liquidation Co., Escrow Account, 6.25%, cvt. pfd., C USA USD 1, ,729,215, Securities Maturing Within One Year 5,000,000 Volkswagen International Finance, cvt., sub. note, 144A, 5.50%, 11/09/15 DEU EUR 6,729, TOTAL BONDS 1,735,945, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 1,894,183, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Information Technology 2,294,067 First Data Holdings Inc., B ** USA USD 9,765, TOTAL SHARES 9,765, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 9,765, TOTAL INVESTMENTS 4,010,947, Income may be received in additional securities and/or cash ** These securities are submitted to a Fair Valuation 240 Unaudited Semi-Annual Report

243 Franklin India Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Auto Components 142,000 Bosch Ltd. IND INR 43,836, ,800,000 Balkrishna Industries Ltd. IND INR 27,227, ,630,000 Bharat Forge Ltd. IND INR 24,418, ,482, Automobiles 4,555,000 Mahindra & Mahindra Ltd. IND INR 89,203, ,350,000 Tata Motors Ltd., A IND INR 55,120, ,100,000 Tata Motors Ltd. IND INR 16,509, ,832, Banks 36,052,390 ICICI Bank Ltd. IND INR 201,952, ,751,116 HDFC Bank Ltd. IND INR 177,399, ,400,000 Axis Bank Ltd. IND INR 130,710, ,600,000 Yes Bank Ltd. IND INR 117,580, ,770,440 State Bank of India IND INR 112,651, ,650,000 Kotak Mahindra Bank Ltd. IND INR 93,236, ,700,000 IndusInd Bank Ltd. IND INR 72,562, ,795,475 Punjab National Bank Ltd. IND INR 37,523, ,434,400 Bank of Baroda IND INR 24,664, ,400,000 Union Bank of India Ltd. IND INR 20,508, ,414,000 Karur Vysya Bank Ltd. IND INR 12,871, ,001,661, Chemicals 4,767,000 Asian Paints Ltd. IND INR 56,892, ,432,982 Pidilite Industries Ltd. IND INR 38,190, ,200,000 Rallis India Ltd. IND INR 7,519, ,480,000 Coromandel International Ltd. IND INR 7,244, ,846, Construction & Engineering 4,980,000 Larsen & Toubro Ltd. IND INR 118,082, ,980,622 Voltas Ltd. IND INR 38,396, ,479, Construction Materials 1,510,000 Ultra Tech Cement Ltd. IND INR 64,104, ,057 Shree Cements Ltd. IND INR 32,089, ,475,000 Ramco Cements Ltd. IND INR 19,016, ,210, Consumer Finance 6,281,284 Mahindra & Mahindra Financial Services Ltd. IND INR 32,843, Diversified Financial Services 1,209,464 Credit Analysis and Research Ltd. IND INR 28,430, ,728 Crisil Ltd. IND INR 4,028, ,459, Electrical Equipment 2,540,419 Amara Raja Batteries Ltd. IND INR 33,103, ,810,000 Havell s India Ltd. IND INR 25,379, ,483, Food Products 343,000 Nestle India Ltd. IND INR 34,742, ,000 Kaveri Seed Co. Ltd. IND INR 11,797, ,540, Gas Utilities 1,901,000 GAIL India Ltd. IND INR 13,414, Hotels, Restaurants & Leisure 8,319,975 Indian Hotels Co. Ltd. IND INR 16,551, Industrial Conglomerates 1,200,000 Aditya Birla Nuvo Ltd. IND INR 32,156, Unaudited Semi-Annual Report 241

244 Franklin India Fund Schedule of Investments as of December 31, 2014 (continued) face IT Services 3,920,000 Infosys Ltd. IND INR 122,668, ,970,000 Cognizant Technology Solutions Corp., A USA USD 103,740, ,354,200 Tata Consultancy Services Ltd. IND INR 95,544, ,245,000 HCL Technologies Ltd. IND INR 82,207, ,000 Tech Mahindra Ltd. IND INR 24,686, ,846, Machinery 4,779,545 Cummins India Ltd. IND INR 66,285, ,963 Eicher Motors Ltd. IND INR 43,038, ,000 SKF India Ltd. IND INR 16,597, ,000 AIA Engineering Ltd. IND INR 13,737, ,658, Media 13,000,000 Jagran Prakashan Ltd. IND INR 28,161, Metals & Mining 19,077,900 Hindalco Industries Ltd. IND INR 47,683, ,000,000 Tata Steel Ltd. IND INR 31,680, ,364, Oil, Gas & Consumable Fuels 7,044,064 Bharat Petroleum Corp. Ltd. IND INR 72,189, ,300,000 Coal India Ltd. IND INR 20,095, ,314,863 Gujarat Mineral Development Corp. Ltd. IND INR 19,092, ,679,992 Petro LNG Ltd. IND INR 12,175, ,552, Personal Products 10,650,000 Marico Ltd. IND INR 54,935, Pharmaceuticals 9,926,874 Sun Pharmaceutical Industries Ltd. IND INR 130,166, ,625,000 Dr. Reddy s Laboratories Ltd. IND INR 83,684, ,901,613 Torrent Pharmaceuticals Ltd. IND INR 69,964, ,000 Cadila Healthcare Ltd. IND INR 22,840, ,000 Pfizer Ltd. IND INR 13,330, ,986, Textiles, Apparel & Luxury Goods 5,963,551 Titan Co. Ltd. IND INR 36,106, Transportation Infrastructure 5,392,600 Gujarat Pipavav Port Ltd. IND INR 17,687, Wireless Telecommunication Services 16,225,000 Bharti Airtel Ltd. IND INR 90,783, ,034,375 Idea Cellular Ltd. IND INR 17,163, ,947, TOTAL SHARES 3,208,207, BONDS Hotels, Restaurants & Leisure 1,354,495 Indian Hotels Co. Ltd., cvt., zero cpn., 03/01/16 IND INR 2,501, TOTAL BONDS 2,501, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 3,210,708, TOTAL INVESTMENTS 3,210,708, Unaudited Semi-Annual Report

245 Franklin Japan Fund Schedule of Investments as of December 31, 2014 (Currency JPY) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Auto Components 342,100 Sumitomo Electric Industries Ltd. JPN JPY 517,597, ,800 Bridgestone Corp. JPN JPY 503,040, ,400 NGK Spark Plug Co. Ltd. JPN JPY 497,595, ,000 Denso Corp. JPN JPY 423,900, ,500 Keihin Corp. JPN JPY 291,687, ,233,820, Automobiles 223,800 Toyota Motor Corp. JPN JPY 1,691,480, ,800 Mazda Motor Corp. JPN JPY 511,727, ,100 Yamaha Motor Co. Ltd. JPN JPY 439,804, ,643,011, Banks 1,176,100 Mitsubishi UFJ Financial Group Inc. JPN JPY 781,518, ,100 Sumitomo Mitsui Financial Group Inc. JPN JPY 709,187, ,538,200 Mizuho Financial Group Inc. JPN JPY 513,985, ,400 Resona Holdings Inc. JPN JPY 338,625, ,400 Seven Bank Ltd. JPN JPY 287,223, ,000 The 77 Bank Ltd. JPN JPY 263,718, ,894,258, Building Products 463,000 Asahi Glass Co. Ltd. JPN JPY 272,707, Capital s 63,400 Jafco Co. Ltd. JPN JPY 264,061, Chemicals 63,400 Shin-Etsu Chemical Co. Ltd. JPN JPY 498,704, ,411,000 Teijin Ltd. JPN JPY 452,931, ,635, Commercial Services & Supplies 56,500 Secom Co. Ltd. JPN JPY 392,392, Construction & Engineering 719,000 Taisei Corp. JPN JPY 493,953, ,000 Maeda Corp. JPN JPY 307,944, ,300 SHO-BOND Holdings Co. Ltd. JPN JPY 270,169, ,072,066, Diversified Telecommunication Services 58,200 Nippon Telegraph & Telephone Corp. JPN JPY 361,480, Electrical Equipment 407,000 Mitsubishi Electric Corp. JPN JPY 588,522, ,800 Nidec Corp. JPN JPY 547,999, ,000 Fuji Electric Co. Ltd. JPN JPY 422,048, ,558,569, Electronic Equipment, Instruments & Components 10,100 Keyence Corp. JPN JPY 543,481, ,000 Hitachi Ltd. JPN JPY 420,626, ,000 Shimadzu Corp. JPN JPY 394,240, ,600 Murata Manufacturing Co. Ltd. JPN JPY 325,950, ,600 Hamamatsu Photonics K.K. JPN JPY 286,688, ,970,985, Food & Staples Retailing 116,800 Seven & I Holdings Co. Ltd. JPN JPY 509,072, Food Products 175,100 Fuji Oil Co. Ltd. JPN JPY 269,303, Health Care Equipment & Supplies 95,200 Terumo Corp. JPN JPY 262,466, ,400 NIKKISO Co. Ltd. JPN JPY 243,488, ,954, Hotels, Restaurants & Leisure 12,200 Oriental Land Co. Ltd. JPN JPY 338,550, Household Durables 304,100 Panasonic Corp. JPN JPY 433,950, ,400 Sony Corp. JPN JPY 272,964, ,914, Unaudited Semi-Annual Report 243

246 Franklin Japan Fund Schedule of Investments as of December 31, 2014 (continued) (Currency JPY) face Insurance 115,100 Tokio Marine Holdings Inc. JPN JPY 452,745, IT Services 119,500 NTT Data Corp. JPN JPY 539,542, Machinery 183,000 NGK Insulators Ltd. JPN JPY 456,402, ,400 SMC Corp. JPN JPY 428,398, ,000 Kubota Corp. JPN JPY 413,835, ,600 Daifuku Co. Ltd. JPN JPY 238,113, ,200 Metawater Co. Ltd. JPN JPY 194,084, ,730,832, Media 82,800 CyberAgent Inc. JPN JPY 375,498, Metals & Mining 187,000 Hitachi Metals Ltd. JPN JPY 385,594, Multiline Retail 65,600 Izumi Co. Ltd. JPN JPY 278,800, ,000 J Front Retailing Co. Ltd. JPN JPY 243,411, ,211, Personal Products 75,300 KAO Corp. JPN JPY 358,202, Pharmaceuticals 184,100 Chugai Pharmaceutical Co. Ltd. JPN JPY 545,672, ,800 Shionogi & Co. Ltd. JPN JPY 386,875, ,500 Santen Pharmaceutical Co. Ltd. JPN JPY 274,975, ,800 Astellas Pharma Inc. JPN JPY 262,756, ,470,279, Professional Services 67,100 Recruit Holdings Co. Ltd. JPN JPY 230,824, Real Estate Management & Development 140,000 Mitsui Fudosan Co. Ltd. JPN JPY 455,700, ,000 Sumitomo Realty & Development Co. Ltd. JPN JPY 375,966, ,700 Daiwa House Industry Co. Ltd. JPN JPY 370,778, ,202,444, Road & Rail 59,100 East Japan Railway Co. JPN JPY 539,169, Technology Hardware, Storage & Peripherals 1,613,000 NEC Corp. JPN JPY 569,389, Transportation Infrastructure 355,000 Kamigumi Co. Ltd. JPN JPY 381,980, Wireless Telecommunication Services 72,400 KDDI Corp. JPN JPY 552,918, TOTAL SHARES 26,256,414, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 26,256,414, TOTAL INVESTMENTS 26,256,414, Unaudited Semi-Annual Report

247 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING INVESTMENTS FUNDS Financials 254 ishares Russell 2000 ETF USA USD 30, TOTAL INVESTMENTS FUNDS 30, SHARES Consumer Discretionary 4,598 Wyndham Worldwide Corp. USA USD 394, ,271 Marriott International Inc., A USA USD 255, ,537 CBS Corp., B USA USD 195, ,988 International Game Technology USA USD 189, NVR Inc. USA USD 187, ,830 Macy s Inc. USA USD 186, ,738 The Ryland Group Inc. USA USD 182, ,684 The Home Depot Inc. USA USD 176, AutoZone Inc. USA USD 160, ,168 Liberty Global PLC GBR USD 159, ,059 Best Buy Co. Inc. USA USD 158, ,385 TRW Automotive Holdings Corp. USA USD 142, ,512 Time Warner Inc. USA USD 129, ,705 TripAdvisor Inc. USA USD 127, ,349 McDonald s Corp. USA USD 126, ,530 Family Dollar Stores Inc. USA USD 121, Buffalo Wild Wings Inc. USA USD 118, ,415 Starbucks Corp. USA USD 116, ,930 Life Time Fitness Inc. USA USD 109, Cracker Barrel Old Store Inc. USA USD 108, ,380 Carnival Corp. USA USD 107, Sig Jewelers Ltd. USA USD 107, ,816 Pulte Group Inc. USA USD 103, ,303 Lennar Corp., A USA USD 103, Polaris Industries Inc. USA USD 100, Tiffany & Co. USA USD 98, ,665 Brinker International Inc. USA USD 97, ,454 Harley-Davidson Inc. USA USD 95, ,776 Brunswick Corp. USA USD 91, ,206 DISH Network Corp., A USA USD 87, ,186 Sonic Corp. USA USD 86, NIKE Inc., B USA USD 81, ,235 Bloomin Brands Inc. USA USD 80, The Walt Disney Co. USA USD 74, ,508 Sotheby s USA USD 65, The Madison Square Garden Co., A USA USD 62, Skechers USA Inc., A USA USD 50, Liberty Broadband Corp., A USA USD 48, ,535 IMAX Corp. CAN USD 47, Vail Resorts Inc. USA USD 45, ,195 Liberty Ventures, A USA USD 45, ,272 General Motors Co. USA USD 44, Time Warner Cable Inc. USA USD 42, ,045 Twenty-First Century Fox Inc., A USA USD 40, ,116 Liberty Media Corp., A USA USD 39, Tesla Motors Inc. USA USD 36, ,215 Markit Ltd. USA USD 32, Charter Communications Inc., A USA USD 29, ,800 Wynn Macau Ltd. MAC HKD 27, Expedia Inc. USA USD 19, Jack in the Box Inc. USA USD 16, Coupons.com Inc. USA USD 16, Netflix Inc. USA USD 16, Lowe s Cos. Inc. USA USD 10, Amazon.com Inc. USA USD 4, Cambian Group PLC GBR GBP 2, ,403, Consumer Staples 2,698 Costco Wholesale Corp. USA USD 382, ,470 Safeway Inc. USA USD 192, Lindt & Spruengli Chocolate Works Ltd. CHE CHF 172, ,661 Constellation Brands Inc., A USA USD 163, ,387 The Kroger Co. USA USD 153, ,488 Church & Dwight Co. Inc. USA USD 117, ,307 Brown-Forman Corp., B USA USD 114, Walgreens Boots Alliance Inc. USA USD 60, Whole Foods Inc. USA USD 43, Tyson Foods Inc., 4.75%, cvt. pfd. USA USD 15, Unaudited Semi-Annual Report 245

248 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Consumer Staples (continued) 100 CVS Health Corp. USA USD 9, Wal-Mart Stores Inc. USA USD 5, Altria Group Inc. USA USD 4, ,434, Energy 3,276 Dresser-Rand Group Inc. USA USD 267, Occidental Petroleum Corp. USA USD 73, ,517 The Williams Cos. Inc. USA USD 68, Marathon Petroleum Corp. USA USD 66, MPLX LP USA USD 60, ,388 Halliburton Co. USA USD 54, Kinder Morgan Inc. USA USD 17, Exxon Mobil Corp. USA USD 4, ,200 Forest Oil Corp. USA USD , Financials 3,400 Wells Fargo & Co. USA USD 186, ,676 Moody s Corp. USA USD 160, ,420 Commerzbank AG DEU EUR 138, ,517 NorthStar Asset Management Group Inc. USA USD 124, ,226 Realogy Holdings Corp. USA USD 99, ,573 American International Group Inc. USA USD 88, CME Group Inc. USA USD 86, ,571 Lazard Ltd., A USA USD 78, ,404 Essent Group Ltd. USA USD 61, Ramco-Gershenson Properties Trust, 7.25%, cvt. pfd. USA USD 59, ,016 NorthStar Realty Finance Corp. USA USD 53, Ryman Hospitality Properties Inc. USA USD 44, W. R. Berkley Corp. USA USD 18, Weyerhaeuser Co., 6.375%, cvt. pfd., A USA USD 16, ,388 Banca Popolare dell Emilia Romagn ITA EUR 15, SEI Investments Co. USA USD 15, ,603 Banca Popolare di Milano Scarl ITA EUR 12, ,029 Banco Popolare Societa Cooperativa ITA EUR 12, Crown Castle International Corp. USA USD 12, MSCI Inc. USA USD 9, ,293, Health Care 2,726 Covidien PLC USA USD 278, ,784 Becton Dickinson and Co. USA USD 248, ,194 Celgene Corp. USA USD 245, ,468 BioMarin Pharmaceutical Inc. USA USD 223, ,829 HCA Holdings Inc. USA USD 207, ,210 Incyte Corp. USA USD 161, ,602 Celesio AG DEU EUR 148, Shire PLC, ADR IRL USD 127, ,035 Isis Pharmaceuticals Inc. USA USD 125, Biogen Idec Inc. USA USD 111, Thermo Fisher Scientific Inc. USA USD 108, ,067 Alnylam Pharmaceuticals Inc. USA USD 103, Actavis PLC USA USD 102, ,144 Pacira Pharmaceuticals Inc. USA USD 101, ,044 Bluebird Bio Inc. USA USD 95, Gilead Sciences Inc. USA USD 93, Cubist Pharmaceuticals Inc. USA USD 91, ,319 Eli Lilly & Co. USA USD 90, Illumina Inc. USA USD 85, Allergan Inc. USA USD 84, Alexion Pharmaceuticals Inc. USA USD 84, Intercept Pharmaceuticals Inc. USA USD 83, McKesson Corp. USA USD 80, ,371 Bristol-Myers Squibb Co. USA USD 80, ,067 AstraZeneca PLC, ADR GBR USD 75, ,134 Cerner Corp. USA USD 73, Centene Corp. USA USD 72, Endo International PLC USA USD 71, Vertex Pharmaceuticals Inc. USA USD 66, Perrigo Co. PLC USA USD 64, Roche Holding AG CHE CHF 62, Valeant Pharmaceuticals International Inc. CAN CAD 59, ,289 OvaScience Inc. USA USD 57, ,843 Aerie Pharmaceuticals Inc. USA USD 53, Universal Health Services Inc., B USA USD 52, ,185 Zoetis Inc. USA USD 50, Unaudited Semi-Annual Report

249 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Health Care (continued) 1,251 Tetraphase Pharmaceuticals Inc. USA USD 49, Salix Pharmaceuticals Ltd. USA USD 49, Cigna Corp. USA USD 47, Receptos Inc. USA USD 47, Acadia Healthcare Co. Inc. USA USD 45, ,239 Otonomy Inc. USA USD 41, ,253 Acadia Pharmaceuticals Inc. USA USD 39, Jazz Pharmaceuticals PLC USA USD 39, ,232 BioDelivery Sciences International Inc. USA USD 38, AbbVie Inc. USA USD 38, Acceleron Pharma Inc. USA USD 35, ,977 Aratana Therapeutics Inc. USA USD 35, ,503 GenMark Diagnostics Inc. USA USD 34, ,228 The Medicines Co. USA USD 33, Ultragenyx Pharmaceutical Inc. USA USD 33, Fluidigm Corp. USA USD 31, ,088 Alder Biopharmaceuticals Inc. USA USD 31, UnitedHealth Group Inc. USA USD 30, WuXi Pharmatech Cayman Inc., ADR CHN USD 30, Envision Healthcare Holdings Inc. USA USD 30, ,056 EXACT Sciences Corp. USA USD 28, Novo Nordisk AS, ADR DNK USD 28, ,856 Sangamo BioSciences Inc. USA USD 28, Portola Pharmaceuticals Inc. USA USD 25, ,774 Dyax Corp. USA USD 24, Auspex Pharmaceuticals Inc. USA USD 24, Molina Healthcare Inc. USA USD 24, Chimerix Inc. USA USD 21, ,255 Novadaq Technologies Inc. CAN USD 20, Agios Pharmaceuticals Inc. USA USD 19, Applied Geic Technologies Corp./DE USA USD 18, Neurocrine Biosciences Inc. USA USD 18, Genfit FRA EUR 17, Flamel Technologies SA, ADR FRA USD 16, GW Pharmaceuticals PLC, ADR GBR USD 16, ,050 Kindred Biosciences Inc. USA USD 15, Acorda Therapeutics Inc. USA USD 15, The Cooper Cos. Inc. USA USD 14, Prothena Corp. PLC IRL USD 13, ,123 Castlight Health Inc., B USA USD 13, IMS Health Holdings Inc. USA USD 13, Calithera Biosciences Inc. USA USD 12, ,282 Derma Sciences Inc. USA USD 11, Insmed Inc. USA USD 10, Eagle Pharmaceuticals Inc. USA USD 10, Te Healthcare Corp. USA USD 10, ,662 Synta Pharmaceuticals Corp. USA USD 9, Premier Inc., A USA USD 9, Regulus Therapeutics Inc. USA USD 8, Flexion Therapeutics Inc. USA USD 8, ProQR Therapeutics NV NLD USD 8, KYTHERA Biopharmaceuticals Inc. USA USD 8, Atara Biotherapeutics Inc. USA USD 8, Johnson & Johnson USA USD 8, Tornier NV USA USD 7, Amicus Therapeutics Inc. USA USD 7, Zafgen Inc. USA USD 6, Kite Pharma Inc. USA USD 6, ,368 Fibrocell Science Inc. USA USD 6, Dermira Inc. USA USD 5, Avalanche Biotechnologies Inc. USA USD 5, ZS Pharma Inc. USA USD 5, Retrophin Inc. USA USD 5, XenoPort Inc. USA USD 5, Pfizer Inc. USA USD 5, Verastem Inc. USA USD 4, Assembly Biosciences Inc. USA USD 4, Foamix Pharmaceuticals Ltd. ISR USD 4, Medgenics Inc. ISR USD 4, MacroGenics Inc. USA USD 4, Vascular Biogenics Ltd. ISR USD 4, Cara Therapeutics Inc. USA USD 3, Innocoll AG, ADR DEU USD 2, Revance Therapeutics Inc. USA USD 1, ,197 InspireMD Inc. USA USD 1, Intersect ENT Inc. USA USD ,340, Unaudited Semi-Annual Report 247

250 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Industrials 3,806 Union Pacific Corp. USA USD 453, ,150 Delta Air Lines Inc. USA USD 351, ,387 United Continental Holdings Inc. USA USD 293, ,373 American Airlines Group Inc. USA USD 288, ,343 Fortune Brands Home & Security Inc. USA USD 196, ,751 Pall Corp. USA USD 177, ,464 MAN SE DEU EUR 163, TransDigm Group Inc. USA USD 139, ,368 International Consolidated Airlines Group SA GBR GBP 124, General Dynamics Corp. USA USD 114, Ryder System Inc. USA USD 82, ,481 Solarcity Corp. USA USD 79, ,834 Edenred FRA EUR 78, ,122 Toro Co. USA USD 71, Canadian Pacific Railway Ltd. CAN USD 58, Spirit Airlines Inc. USA USD 47, ,337 Air France-KLM FRA EUR 41, Nielsen NV USA USD 41, ,308 Sanitec Corp. FIN SEK 41, Rockwell Automation Inc. USA USD 36, Fluor Corp. USA USD 34, Kansas City Southern USA USD 29, The Timken Co. USA USD 28, Verisk Analytics Inc., A USA USD 22, The Boeing Co. USA USD 19, Hertz Global Holdings Inc. USA USD 14, ,206 Sthree PLC GBR GBP 14, ,370 Atento SA LUX USD 14, ,322 Irish Continental Group PLC IRL EUR 12, ManpowerGroup USA USD 10, West Corp. USA USD 6, Equifax Inc. USA USD 6, Robert Half International Inc. USA USD 6, FTI Consulting Inc. USA USD 5, JetBlue Airways Corp. USA USD 5, Huron Consulting Group Inc. USA USD 4, Experian PLC GBR GBP 3, Greenbrier Cos. Inc. USA USD Air Canada, B CAN CAD ,122, Information Technology 1,202 FleetCor Technologies Inc. USA USD 178, ,371 EMC Corp. USA USD 159, ,403 Apple Inc. USA USD 154, ,675 Riverbed Technology Inc. USA USD 136, ,424 MasterCard Inc., A USA USD 122, ,794 Nokia OYJ, A FIN EUR 109, ,651 NCR Corp., W/I USA USD 106, ,275 Sonus Networks Inc. USA USD 84, ,476 Yahoo! Inc. USA USD 74, ,675 Cisco Systems Inc. USA USD 74, ,130 Vantiv Inc., A USA USD 72, ,705 Genpact Ltd. USA USD 70, ,650 Freescale Semiconductor Ltd. USA USD 66, ,732 Nokia Corp., ADR FIN USD 60, ,595 Micron Technology Inc. USA USD 55, ,815 HomeAway Inc. USA USD 54, CoStar Group Inc. USA USD 51, Alibaba Group Holding Ltd., ADR CHN USD 50, Baidu Inc., ADR CHN USD 46, Verint Systems Inc. USA USD 44, ,750 Applied Materials Inc. USA USD 43, Yelp Inc. USA USD 43, Western Digital Corp. USA USD 41, ,000 Forrester Research Inc. USA USD 39, VeriSign Inc. USA USD 35, EPAM Systems Inc. USA USD 34, ,350 Bankrate Inc. USA USD 29, FireEye Inc. USA USD 26, ,800 Sumco Corp. JPN JPY 26, Adobe Systems Inc. USA USD 25, ,300 Lenovo Group Ltd. CHN HKD 24, ,670 Applied Micro Circuits Corp. USA USD 23, Red Hat Inc. USA USD 23, ,325 Xoom Corp. USA USD 23, Exlservice Holdings Inc. USA USD 22, o Inc. USA USD 22, Unaudited Semi-Annual Report

251 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Information Technology (continued) 242 Accenture PLC, A USA USD 21, LendingClub Corp. USA USD 20, Fleetmatics Group PLC USA USD 19, Qihoo 360 Technologies Co. Ltd., ADR CHN USD 19, QUALCOMM Inc. USA USD 18, VeriFone Systems Inc. USA USD 18, ,530 Ruckus Wireless Inc. USA USD 18, F5 Networks Inc. USA USD 18, Heartland Payment Systems Inc. USA USD 16, Web.com Group Inc. USA USD 14, Guidewire Software Inc. USA USD 14, Aruba Networks Inc. USA USD 13, UbiSoft Entertainment SA FRA EUR 13, Gartner Inc., A USA USD 13, NXP Semiconductors NV NLD USD 13, Nimble Storage Inc. USA USD 12, FactSet Research Systems Inc. USA USD 12, Activision Blizzard Inc. USA USD 11, QIWI PLC, ADR RUS USD 10, Visa Inc., A USA USD 10, EVERTEC Inc. PRI USD 10, WEX Inc. USA USD 9, Demandware Inc. USA USD 9, Equinix Inc. USA USD 9, Microsoft Corp. USA USD 9, Salesforce.com Inc. USA USD 9, Google Inc., C USA USD 7, TE Connectivity Ltd. USA USD 7, Hubspot Inc. USA USD 7, Intuit Inc. USA USD 6, Dealertrack Technologies Inc. USA USD 6, Global Payments Inc. USA USD 6, InvenSense Inc. USA USD 6, Automatic Data Processing Inc. USA USD 6, Akamai Technologies Inc. USA USD 5, Cognizant Technology Solutions Corp., A USA USD 5, Just Eat PLC GBR GBP 4, Cardtronics Inc. USA USD 4, Texas Instruments Inc. USA USD 3, Zendesk Inc. USA USD 3, Alliance Data Systems Corp. USA USD 3, Benefitfocus Inc. USA USD 3, Hewlett-Packard Co. USA USD 1, ,725, Materials 3,805 W.R. Grace & Co. USA USD 362, The Sherwin-Williams Co. USA USD 197, ,376 Louisiana-Pacific Corp. USA USD 188, ,463 Ecolab Inc. USA USD 152, ,200 Canfor Corp. CAN CAD 132, ,253 ThyssenKrupp AG DEU EUR 109, ,897 FMC Corp. USA USD 108, LyondellBasell Industries NV, A USA USD 40, ,559 Impala Platinum Holdings Ltd. ZAF ZAR 29, Crown Holdings Inc. USA USD 14, Vulcan Materials Co. USA USD 10, ,824 Thompson Creek Metals Co. USA CAD 9, Alcoa Inc., 5.375%, cvt. pfd. USA USD 9, Graphic Packaging Holding Co. USA USD 8, ,472 B2Gold Corp. CAN CAD 7, Stillwater Mining Co. USA USD 5, ArcelorMittal, 6.00%, cvt. pfd. LUX USD 5, Tronox Ltd., A USA USD 3, ,396, Telecommunication Services 8,256 T-Mobile U.S. Inc. USA USD 222, ,546 Koninklijke KPN NV NLD EUR 132, ,806 Level 3 Communications Inc. USA USD 89, ,156 Telecom Italia SpA ITA EUR 13, Zayo Group Holdings Inc. USA USD 7, , Utilities 155 Dominion Resources Inc., 6.375%, cvt. pfd., A USA USD 8, TOTAL SHARES 21,802, Unaudited Semi-Annual Report 249

252 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face RIGHTS Consumer Discretionary 125 Liberty Broadband Corp., rts., 01/09/15 USA USD 1, TOTAL RIGHTS 1, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 21,834, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Consumer Staples 500 Bunge Ltd., 4.875%, cvt. pfd. USA USD 56, Energy 585 SandRidge Energy Inc., 7.00%, cvt. pfd. USA USD 32, ,255 PetroQuest Energy Inc., 6.875%, cvt., pfd., B USA USD 30, Rex Energy Corp., 6.00%, cvt. pfd., A USA USD 25, Chesapeake Energy Corp., 5.75%, cvt. pfd., 144A USA USD 9, , Financials 20 Ally Financial Inc., 7.00%, pfd., 144A USA USD 20, TOTAL SHARES 173, BONDS Asset-Backed Securities 35,000 SNAAC Auto Receivables Trust, , 1A, 2.88%, 01/15/20 USA USD 35, ,000 Americredit Automobile Receiveables Trust, , 2.42%, 05/08/18 USA USD 30, ,000 CarMax Auto Owner Trust, , A4, 0.89%, 08/17/18 USA USD 29, ,000 Ford Credit Auto Lease Trust, 2013-B, A3, 0.76%, 09/15/16 USA USD 25, ,000 Nissan Auto Receivables 2014-B Owner Trust, 2014-B, 1.11%, 05/15/19 USA USD 24, ,000 BMW Vehicle Owner Trust, 2014-A, A3, 0.97%, 11/26/18 USA USD 19, ,000 First Investors Auto Owner Trust, A, D, 3.28%, 04/15/21 USA USD 19, ,000 Honda Auto Receivables Owner Trust, A3, 0.77%, 03/19/18 USA USD 14, ,000 Honda Auto Receivables Owner Trust, , 0.67%, 11/21/17 USA USD 14, ,954 GMACM Mortgage Loan Trust, 2003-J7, A-7, 5.00%, 11/25/33 USA USD 14, ,267 Credit Suisse First Boston Mortgage Securities, 5.50%, 11/25/35 USA USD 13, ,496 Wells Fargo Mortgage Backed Securities Trust, 2005-AR10, FRN, 2.614%, 06/25/35 USA USD 11, ,000 Americredit Automobile Receiveables Trust, , 1.66%, 09/10/18 USA USD 10, ,000 BMW Vehicle Owner Trust, 2013-A, A3, 0.67%, 11/27/17 USA USD 10, ,300 Wells Fargo Mortgage Backed Securities Trust, FRN, 2.615%, 12/25/33 USA USD 9, ,644 Structured ARM Loan Trust, FRN, 2.63%, 09/25/34 USA USD 8, ,132 GSR Mortgage Loan Trust, 2005-AR4, 4A1, FRN, 2.47%, 07/25/35 USA USD 8, ,000 CarMax Auto Owner Trust, , A3, 0.80%, 07/16/18 USA USD 6, ,777 Ford Credit Auto Owner Trust, 0.55%, 07/15/17 USA USD 5, ,000 Ford Credit Auto Owner Trust, 2014-C, A3, 1.06%, 05/15/19 USA USD 4, ,000 Honda Auto Receivables Owner Trust, , A3, 0.99%, 09/17/18 USA USD 4, , Corporate Bonds 356,000 DISH DBS Corp., senior note, 144A, 5.875%, 11/15/24 USA USD 358, ,000 Postmedia Network Inc., senior secured note, 12.50%, 07/15/18 CAN USD 323, ,000 CCOH Safari LLC, senior bond, 5.75%, 12/01/24 USA USD 309, ,000 ROC Finance LLC/ROC Finance 1 Corp., secured note, 144A, %, 09/01/18 USA USD 265, ,000 Intelsat Luxembourg SA, senior note, 7.75%, 06/01/21 LUX USD 226, ,000 Kindred Escrow Corp. II, senior note, 144A, 8.75%, 01/15/23 USA USD 216, ,000 Kindred Escrow Corp. II, senior secured note, 144A, 8.00%, 01/15/20 USA USD 168, ,000 Sprint Corp., senior bond, 7.875%, 09/15/23 USA USD 148, ,000 Avaya Inc., secured note, 144A, 9.00%, 04/01/19 USA USD 133, ,000 Dynegy Finance I Inc./Dynegy Finance II Inc., senior note, 144A, 7.375%, 11/01/22 USA USD 127, ,000 Windstream Corp., 7.50%, 06/01/22 USA USD 127, ,000 MGM Resorts International, senior note, 6.00%, 03/15/23 USA USD 126, ,000 MSCI Inc., senior note, 144A, 5.25%, 11/15/24 USA USD 124, ,000 SGH Escrow Corp., 10.00%, 01/15/19 USA USD 120, ,000 Visant Corp., senior note, 10.00%, 10/01/17 USA USD 116, ,000 Equinix Inc., senior note, 5.375%, 01/01/22 USA USD 111, ,000 The Mcclatchy Co., first lien, senior secured note, 9.00%, 12/15/22 USA USD 109, ,000 Neiman Marcus Group Ltd. LLC, senior note, 144A, 8.00%, 10/15/21 USA USD 106, ,000 Frontier Communications Corp., senior note, 7.125%, 01/15/23 USA USD 102, ,000 Frontier Communications Corp., senior bond, 6.875%, 01/15/25 USA USD 80, ,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 79, ,000 Te Healthcare Corp., 4.375%, 10/01/21 USA USD 79, ,000 R. R. Donnelley & Sons Co., senior bond, 6.00%, 04/01/24 USA USD 79, ,000 Cenveo Corp., cvt., 7.00%, 05/15/17 USA USD 78, ,000 Endo Finance LLC & Endo Finance Inc., 5.375%, 01/15/23 USA USD 78, ,000 Cowen Group Inc., cvt., senior note, 144A, 3.00%, 03/15/19 USA USD 75, Unaudited Semi-Annual Report

253 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 75,000 Cott Beverages Inc., senior note, 144A, 6.75%, 01/01/20 USA USD 75, ,000 Electronic Arts Inc., cvt., senior note, 0.75%, 07/15/16 USA USD 74, ,000 SunEdison Inc., cvt., senior note, 144A, 0.25%, 01/15/20 USA USD 73, ,000 NXP Semiconductors NV, 144A, 1.00%, 12/01/19 NLD USD 66, ,000 SUPERVALU Inc., 7.75%, 11/15/22 USA USD 64, ,000 Sequenom Inc., cvt., 5.00%, 10/01/17 USA USD 61, ,000 E*TRADE Financial Corp., senior note, 5.375%, 11/15/22 USA USD 61, ,000 RWT Holdings Inc., cvt., 5.625%, 11/15/19 USA USD 61, ,000 NCL Corp. Ltd., 5.25%, 11/15/19 BMU USD 60, ,000 Fomento de Construcciones y Contratas SA, 6.50%, 10/30/20 ESP EUR 60, ,000 Kennedy-Wilson Inc., 5.875%, 04/01/24 USA USD 60, ,000 CDW LLC/CDW Finance Corp., senior note, 5.50%, 12/01/24 USA USD 60, ,000 Carriage Services Inc., cvt., sub. note, 144A, 2.75%, 03/15/21 USA USD 59, ,000 IAS Operating Partnership LP, senior note, 144A, 5.00%, 03/15/18 USA USD 57, ,000 SM Energy Co., senior note, 144A, 6.125%, 11/15/22 USA USD 56, ,000 IHS Inc., senior note, 144A, 5.00%, 11/01/22 USA USD 54, ,000 Vector Group Ltd., cvt., FRN, 1.75%, 04/15/20 USA USD 53, ,000 Scientific Games International Inc., senior secured note, first lien, 144A, 7.00%, 01/01/22 USA USD 50, ,000 The ADT Corp., senior note, 5.25%, 03/15/20 USA USD 50, ,000 Dana Holding Corp., 5.50%, 12/15/24 USA USD 50, ,000 Navistar International Corp., cvt., 4.75%, 04/15/19 USA USD 48, ,000 TiVo Inc., cvt., 2.00%, 10/01/21 USA USD 48, ,000 Michaels Stores Inc., 5.875%, 12/15/20 USA USD 45, ,000 KLX Inc., senior note, 144A, 5.875%, 12/01/22 USA USD 45, ,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 43, ,000 Griffon Corp., senior note, 5.25%, 03/01/22 USA USD 42, ,000 ServiceMaster Co. of Tennesse, senior note, 7.00%, 08/15/20 USA USD 41, ,000 Red Hat Inc., cvt., 0.25%, 10/01/19 USA USD 41, ,000 HD Supply Inc., first lien, 144A, 5.25%, 12/15/21 USA USD 40, ,000 Sealed Air Corp., senior bond, 144A, 5.125%, 12/01/24 USA USD 40, ,000 Springleaf Finance Corp., 5.25%, 12/15/19 USA USD 39, ,000 Dynegy Finance I Inc./Dynegy Finance II Inc., senior secured bond, first lien, 144A, 7.625%, 11/01/24 USA USD 37, ,000 Akamai Technologies Inc., cvt., zero cpn., 02/15/19 USA USD 36, ,000 Rialto Holdings LLC/Rialto Corp., senior note, 144A, 7.00%, 12/01/18 USA USD 35, ,000 HCA Inc., senior secured note, first lien, 4.25%, 10/15/19 USA USD 35, ,000 Ally Financial Inc., senior note, 3.75%, 11/18/19 USA USD 34, ,000 Quidel Corp., cvt., 3.25%, 12/15/20 USA USD 33, ,000 Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22 GBR USD 32, ,000 Amyris Inc., cvt., senior note, 144A, 6.50%, 05/15/19 USA USD 32, ,000 General Motors Co., 5.20%, 04/01/45 USA USD 31, ,000 Essar Steel Algoma Inc., 9.50%, 11/15/19 CAN USD 30, ,000 Building Materials Corp. of America, senior bond, 144A, 5.375%, 11/15/24 USA USD 30, ,000 Isis Pharmaceuticals Inc., cvt., 1.00%, 11/15/21 USA USD 28, ,000 BioScrip Inc., 8.875%, 02/15/21 USA USD 27, ,000 Lee Enterprises Inc., senior secured note, first lien, 144A, 9.50%, 03/15/22 USA USD 25, ,000 CCOH Safari LLC, senior note, 5.50%, 12/01/22 USA USD 25, ,000 Petrobras Global Finance BV, 5.625%, 05/20/43 NLD USD 24, ,000 Oceaneering International Inc., senior note, 4.65%, 11/15/24 USA USD 24, ,000 Realogy Group LLC/Realogy Co-Issuer Corp., senior note, 144A, 5.25%, 12/01/21 USA USD 24, ,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 USA USD 24, ,000 AK Steel Corp., 7.625%, 10/01/21 USA USD 23, ,000 Solazyme Inc., cvt., senior sub. note, 5.00%, 10/01/19 USA USD 21, ,000 KLA-Tencor Corp., 4.65%, 11/01/24 USA USD 20, ,000 Owens-Brockway Glass Container Inc., senior note, 144A, 5.00%, 01/15/22 USA USD 20, ,000 Moog Inc., senior note, 144A, 5.25%, 12/01/22 USA USD 20, ,000 Micron Technology Inc., 5.50%, 02/01/25 USA USD 20, ,000 Owens-Brockway Glass Container Inc., senior bond, 144A, 5.375%, 01/15/25 USA USD 20, ,000 Concho Resources Inc., senior bond, 5.50%, 04/01/23 USA USD 20, ,000 Regency Energy Partners LP/Regency Energy Finance Corp., 5.75%, 09/01/20 USA USD 20, ,000 Becton Dickinson & Co., FRN, 0.691%, 06/15/16 USA USD 20, ,000 Chevron Corp., FRN, 0.402%, 11/15/17 USA USD 19, ,000 Diamondback Energy Inc., senior note, 7.625%, 10/01/21 USA USD 19, ,000 Chesapeake Energy Corp., senior note, 4.875%, 04/15/22 USA USD 19, ,000 Whiting Petroleum Corp., senior sub. note, 6.50%, 10/01/18 USA USD 19, ,000 Cimarex Energy Co., senior note, 4.375%, 06/01/24 USA USD 19, ,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 18, ,000 QEP Resources Inc., senior note, 5.25%, 05/01/23 USA USD 18, ,000 MEG Energy Corp., 6.375%, 01/30/23 CAN USD 17, ,000 Continental Resources Inc., 3.80%, 06/01/24 USA USD 17, ,000 SM Energy Co., 5.00%, 01/15/24 USA USD 17, ,000 Baytex Energy Corp., senior note, 144A, 5.625%, 06/01/24 CAN USD 17, ,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 17, ,000 Cobalt International Energy Inc., cvt., senior bond, 3.125%, 05/15/24 USA USD 16, ,000 Choice Hotels International Inc., senior note, 5.70%, 08/28/20 USA USD 16, ,000 DISH DBS Corp., senior note, 5.125%, 05/01/20 USA USD 16, ,000 Violin Memory Inc., cvt., 4.25%, 10/01/19 USA USD 15, ,000 Time Warner Cable Inc., 4.50%, 09/15/42 USA USD 15, Unaudited Semi-Annual Report 251

254 Franklin K2 Alternative Strategies Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 15,000 Omnicare Inc., senior bond, 5.00%, 12/01/24 USA USD 15, ,000 IGI Laboratories Inc., cvt., 3.75%, 12/15/19 USA USD 15, ,000 Morgan Stanley, senior sub. bond, 4.35%, 09/08/26 USA USD 15, ,000 Tesoro Logistics LP/Tesoro Finance Corp., 6.25%, 10/15/22 USA USD 15, ,000 Bank of America Corp., senior sub. bond, 4.25%, 10/22/26 USA USD 14, ,000 istar Financial Inc., 4.00%, 11/01/17 USA USD 14, ,000 Targa Resources Partners LP/Finance Corp., 4.125%, 11/15/19 USA USD 14, ,000 Lexicon Pharmaceuticals Inc., cvt., 5.25%, 12/01/21 USA USD 13, ,000 Targa Resources Partners LP/Finance Corp., 4.25%, 11/15/23 USA USD 13, ,000 Rosetta Resources Inc., 5.875%, 06/01/22 USA USD 13, ,000 Monster Worldwide Inc., 3.50%, 10/15/19 USA USD 12, ,000 Gilead Sciences Inc., cvt., senior note, 1.625%, 05/01/16 USA USD 12, ,000 Priceline Group Inc., cvt., 0.90%, 09/15/21 USA USD 11, ,000 Palo Alto Networks Inc., cvt., senior note, 144A, zero cpn., 07/01/19 USA USD 11, ,000 Choice Hotels International Inc., senior bond, 5.75%, 07/01/22 USA USD 10, ,000 Integra Lifesciences Holdings Corp., cvt., senior note, 1.625%, 12/15/16 USA USD 10, ,000 Photronics Inc., cvt., 3.25%, 04/01/16 USA USD 10, ,000 PROS Holdings Inc., cvt., 2.00%, 12/01/19 USA USD 10, ,000 Fresenius Medical Care U.S. Finance II Inc., senior note, 144A, 4.75%, 10/15/24 DEU USD 10, ,000 Sanmina Corp., senior note, 144A, 4.375%, 06/01/19 USA USD 9, ,000 istar Financial Inc., senior note, 5.00%, 07/01/19 USA USD 9, ,000 LGI Homes Inc., cvt., 4.25%, 11/15/19 USA USD 9, ,000 Lennar Corp., cvt., 144A, 3.25%, 11/15/21 USA USD 9, ,000 TTM Technologies Inc., cvt., 1.75%, 12/15/20 USA USD 9, ,000 Antero Resources Corp., senior note, 144A, 5.125%, 12/01/22 USA USD 9, ,000 RSP Permian Inc., senior note, 144A, 6.625%, 10/01/22 USA USD 9, ,000 Whiting Petroleum Corp., 5.75%, 03/15/21 USA USD 9, ,000 Rosetta Resources Inc., senior note, 5.625%, 05/01/21 USA USD 9, ,000 Ultra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 USA USD 8, ,000 Atrium Windows and Doors Inc., senior secured note, 144A, 7.75%, 05/01/19 USA USD 8, ,000 Bonanza Creek Energy Inc., senior note, 5.75%, 02/01/23 USA USD 7, ,000 Greenbrier Cos. Inc., cvt., 3.50%, 04/01/18 USA USD 7, ,000 Ciena Corp., senior note, 144A, 3.75%, 10/15/18 USA USD 7, ,000 MercadoLibre Inc., cvt., senior note, 144A, 2.25%, 07/01/19 ARG USD 7, ,000 Ally Financial Inc., senior note, 8.00%, 03/15/20 USA USD 5, ,000 Acorda Therapeutics Inc., cvt., 1.75%, 06/15/21 USA USD 5, ,000 Emergent Biosolutions Inc., cvt., senior note, 144A, 2.875%, 01/15/21 USA USD 5, ,000 Jarden Corp., cvt., sub. bond, 144A, 1.125%, 03/15/34 USA USD 5, ,000 ARC Properties Operating Partnership LP, 3.00%, 02/06/19 USA USD 5, ,000 CIT Group Inc., senior bond, 5.00%, 08/01/23 USA USD 5, ,000 DISH DBS Corp., senior note, 5.875%, 07/15/22 USA USD 5, ,000 L-3 Communications Inc., 5.75%, 12/01/22 USA USD 5, ,000 Synergy Pharmaceuticals Inc., cvt., 7.50%, 11/01/19 USA USD 5, ,000 Owens Corning, 4.20%, 12/01/24 USA USD 4, ,000 Redwood Trust Inc., cvt., 4.625%, 04/15/18 USA USD 4, ,000 Oasis Petroleum Inc., senior note, 7.25%, 02/01/19 USA USD 4, ,000 Finisar Corp., cvt., 0.50%, 12/15/33 USA USD 4, ,000 Renewable Energy Group Inc., cvt., 2.75%, 06/15/19 USA USD 4, ,000 Whiting Petroleum Corp., senior note, 5.00%, 03/15/19 USA USD 4, ,000 Oasis Petroleum Inc., senior note, 6.875%, 03/15/22 USA USD 4, ,000 Genworth Holdings Inc., 4.80%, 02/15/24 USA USD 4, ,112, Government and Municipal Bonds 1,050,000 Government of Mexico, 8.50%, 11/18/38 MEX MXN 88, ,000 Government of Mexico, M, 4.75%, 06/14/18 MEX MXN 56, , Securities Maturing Within One Year 1,195,400 U.S. Treasury Bill, 03/12/15 USA USD 1,195, ,000 FHLMC, 0.00%, 04/20/15 USA USD 232, ,000 U.S. Treasury Bill, 05/07/15 USA USD 127, ,000 U.S. Treasury Bill, 05/14/15 USA USD 127, ,000 U.S. Treasury Bill, 05/21/15 USA USD 127, ,000 U.S. Treasury Bill, 05/28/15 USA USD 127, ,000 U.S. Treasury Bill, 06/04/15 USA USD 127, ,000 Mylan Inc., cvt., senior note, 3.75%, 09/15/15 USA USD 33, ,000 U.S. Treasury Bill, 04/09/15 USA USD 14, ,117, TOTAL BONDS 9,699, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 9,872, TOTAL INVESTMENTS 31,707, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

255 Franklin MENA Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Airlines 17,650,000 Air Arabia PJSC ARE AED 7,207, Automobiles 854,761 Ghabbour Auto EGY EGP 3,705, Banks 1,663,392 Commercial International Bank Egypt SAE EGY EGP 11,422, ,893,077 First Gulf Bank PJSC ARE AED 8,761, ,248 Qatar National Bank QAT QAR 8,666, ,839 Deutsche Bank AG/London (CRTP Samba Financial Group, 144A) SAU USD 7,507, ,754,344 Bank Muscat SAOG OMN OMR 7,211, ,824,256 Union National Bank PJSC/Abu Dhabi ARE AED 6,038, ,063 HSBC Bank PLC (CRTP Banque Saudi Fransi) SAU USD 5,717, ,156,408 Merrill Lynch International & Co. CV (CRTP Emirates NBD PJSC) ARE USD 5,219, ,599 Merrill Lynch International & Co. CV (CRTP Samba Financial Group) SAU USD 3,894, ,000 Credit Suisse Nassau (CRTP Al Rajhi Bank) SAU USD 3,687, ,000 HSBC Bank PLC (CRTP Al Rajhi Bank) SAU USD 2,390, ,000 Credit Suisse Nassau (CRTP Banque Saudi Fransi, Reg S) SAU USD 1,846, ,000 Deutsche Bank AG/London (CRTP Al Rajhi Bank, 144A) SAU USD 1,775, ,000 Merrill Lynch International & Co. CV (CRTP Al Rajhi Bank) SAU USD 1,502, ,000 Credit Suisse Nassau (CRTP Banque Saudi Fransi) SAU USD 923, ,000 Emirates NBD PJSC ARE AED 605, ,170, Capital s 3,488,144 Egyptian Financial Group-Hermes Holding EGY EGP 7,517, ,831,320 Amanat Holdings PJSC ARE AED 2,631, ,149, Chemicals 260,000 Deutsche Bank AG/London (CRTP Saudi Basic Industries Corp., 144A) SAU USD 5,820, ,000 HSBC Bank PLC (CRTP Yanbu National Petrochemicals Co.) SAU USD 5,308, ,000 Morgan Stanley BV (CRTP Yanbu National Petrochemicals Co., Reg S) SAU USD 4,477, ,000 Credit Suisse Nassau (CRTP Saudi Basic Industries Corp.) SAU USD 4,365, ,120 HSBC Bank PLC (CRTP Saudi Basic Industries Corp., 144A) SAU USD 4,076, ,000 Credit Suisse Nassau (CRTP Yanbu National Petrochemicals Co., Reg S) SAU USD 1,215, ,800 Merrill Lynch International & Co. CV (CRTP Saudi Basic Industries Corp.) SAU USD 510, ,773, Construction Materials 134,327 Qatar National Cement Co. QAT QAR 4,868, Diversified Financial Services 4,151,611 Kuwait Projects Co. Holding KSC KWD KWD 9,923, Energy Equipment & Services 310,062 Gulf International Services QSC QAT QAR 8,267, ,174,516 Gulf Marine Services PLC ARE GBP 4,948, ,215, Hotels, Restaurants & Leisure 356,665 Merrill Lynch International & Co. CV (CRTP Al Tayyar Travel Group) SAU USD 11,310, Industrial Conglomerates 908,510 Deutsche Bank AG/London (CRTP National Industrialization Co., 144A) SAU USD 6,488, Real Estate Investment Trust (REIT) 4,572,640 Emirates REIT CEIC Ltd. ARE USD 5,944, Real Estate Management & Development 7,240,827 Emaar Properties PJSC ARE AED 14,311, ,285,000 Mabanee Co. SAKC KWD KWD 7,490, ,579,744 Talaat Moustafa Group EGY EGP 6,277, ,000,000 Aldar Properties PJSC ARE AED 4,328, ,614 Residences Dar Saada MAR MAD 3,716, ,686 Medi Nasr Housing EGY EGP 2,675, ,541 Douja Promotion Groupe Addoha SA MAR MAD 1,117, ,918, Tobacco 220,389 Eastern Tobacco EGY EGP 6,781, Companies & Distributors 2,773,790 ALAFCO Aviation Lease and Finance Co. KSCC KWD KWD 2,348, TOTAL SHARES 224,807, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 224,807, Unaudited Semi-Annual Report 253

256 Franklin MENA Fund Schedule of Investments as of December 31, 2014 (continued) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Real Estate Management & Development 2,834,970 Morgan Stanley BV (CRTP Dar Al Arkan Real Estate Development Co., Reg S) SAU USD 6,157, TOTAL SHARES 6,157, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 6,157, TOTAL INVESTMENTS 230,964, Unaudited Semi-Annual Report

257 Franklin Multi-Asset Income Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING INVESTMENTS FUNDS Financials 54,300 ishares MSCI Japan EUR Hedged UCITS ETF JPN EUR 2,235, ,900 ishares MSCI Europe UCITS ETF Dist IRL EUR 1,394, ,600 ishares MSCI World UCITS ETF DIST IRL EUR 438, ,068, TOTAL INVESTMENTS FUNDS 4,068, SHARES Consumer Discretionary 7,538 The Berkeley Group Holdings PLC GBR GBP 240, ,787 Takkt AG DEU EUR 174, ,400 BEC World PCL, fgn. THA THB 142, ,589 ITE Group PLC GBR GBP 110, ,000 UMW Holdings Bhd. MYS MYR 67, ,000 Victory City International Holdings Ltd. HKG HKD 66, ,600 MGM China Holdings Ltd. HKG HKD 49, ,300 Giordano International Ltd. HKG HKD 3, , Consumer Staples 9,291 British American Tobacco PLC GBR GBP 418, ,300 British American Tobacco Malaysia Bhd. MYS MYR 143, ,000 Thai Beverage PCL, fgn. THA SGD 110, ,000 Carlsberg Brewery Malaysia Bhd. MYS MYR 102, , Energy 79,334 BP PLC GBR GBP 420, ,226 Total SA, B FRA EUR 392, ,051 Eni SpA ITA EUR 276, ,060 Enbridge Inc. CAN CAD 130, ,049 TGS Nopec Geophysical Co. ASA NOR NOK 126, ,660 Cheniere Energy Inc. USA USD 96, ,968 Energy Transfer Equity LP USA USD 93, ,820 Altagas Ltd. CAN CAD 86, ,310 The Williams Cos. Inc. USA USD 85, ,500 China Shenhua Energy Co. Ltd., H CHN HKD 79, ,860 Veresen Inc. CAN CAD 76, ,000 PetroChina Co. Ltd., H CHN HKD 74, ,000 China Petroleum and Chemical Corp., H CHN HKD 71, ,340 Pembina Pipeline Corp. CAN CAD 70, ,316 Western Gas Equity Partners LP USA USD 65, ,580 Kinder Morgan Inc. USA USD 55, Magellan Midstream Partners LP USA USD 52, SemGroup Corp., A USA USD 37, ,844 Ultrapar Participacoes SA, ADR BRA USD 29, Cheniere Energy Partners LP USA USD 24, Enlink Midstream LLC USA USD 20, MarkWest Energy Partners LP USA USD 20, Spectra Energy Corp. USA USD 13, ,399, Financials 1,651 Zurich Insurance Group AG CHE CHF 427, ,379 Standard Chartered PLC GBR GBP 364, ,507 KBC GROEP NV BEL EUR 349, ,655 Banca Generali ITA EUR 337, ,458 Ashmore Group PLC GBR GBP 304, ,195 Allianz SE DEU EUR 301, ,255 Swedbank AB, A SWE SEK 253, ,499 Euler Hermes Group FRA EUR 214, ,968 Corporacion Mapfre SA ESP EUR 210, ,895 Hatton National Bank PLC LKA LKR 164, ,183 IG Group Holdings PLC GBR GBP 159, ,395 HSBC Holdings PLC GBR GBP 152, ,223 Hiscox Ltd. GBR GBP 150, ,885 United Bank Ltd. PAK PKR 150, ,000 China Construction Bank Corp., H CHN HKD 148, ,800 Sunway REIT MYS MYR 121, ,288 DBS Group Holdings Ltd. SGP SGD 119, ,343 Oversea-Chinese Banking Corp. Ltd. SGP SGD 106, ,500 Siam Commercial Bank PCL, fgn. THA THB 98, ,000 BOC Hong Kong (Holdings) Ltd. HKG HKD 96, ,200 Industrial and Commercial Bank of China Ltd., H CHN HKD 93, Unaudited Semi-Annual Report 255

258 Franklin Multi-Asset Income Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Financials (continued) 21,000 Public Bank Bhd. MYS MYR 90, ,200 KLCC Property Holdings Bhd. MYS MYR 89, ,000 CapitaMall Trust SGP SGD 81, ,000 Keppel REIT Management Ltd. SGP SGD 55, ,100 Land and Houses PCL, fgn. THA THB 55, ,300 Land and Houses PCL, NVDR THA THB 51, ,000 Quality Houses PCL, fgn. THA THB 18, ,766, Health Care 6,102 Sanofi FRA EUR 461, ,505 GlaxoSmithKline PLC GBR GBP 257, , Industrials 21,058 Atlantia SpA ITA EUR 407, ,105 bpost SA BEL EUR 251, ,695 Transurban Group AUS AUD 235, ,320 Groupe Eurotunnel SA FRA EUR 174, ,362 BAE Systems PLC GBR GBP 172, ,774 De La Rue PLC GBR GBP 166, ,547 Vinci SA FRA EUR 161, ,802 Veidekke ASA NOR NOK 137, ,482 Abertis Infraestructuras SA ESP EUR 122, ,000 Shin Zu Shing Co. Ltd. TWN TWD 120, ,600 Dynasty Ceramic PCL, fgn. THA THB 120, ,000 China Merchants Holdings International Co. Ltd. CHN HKD 119, ,090 Aeroports de Paris (ADP) FRA EUR 109, ,200 Japan Airport Terminal Co. Ltd. JPN JPY 105, Flughafen Zuerich AG CHE CHF 88, ,000 COSCO Pacific Ltd. CHN HKD 78, ,698 Sydney Airport AUS AUD 59, ,533 Auckland International Airport Ltd. NZL NZD 50, Grupo Aeroportuario del Sureste SAB de CV, ADR MEX USD 45, Grupo Aeroportuario del Pacifico SAB de CV, ADR MEX USD 43, ,700 Hexindo Adiperkasa Tbk PT IDN IDR 42, ,870 BBA Aviation PLC GBR GBP 41, ,000 Hutchison Port Holdings Trust SGP USD 32, ,000 Kamigumi Co. Ltd. JPN JPY 29, ,053 Qube Logistics Holdings Ltd. AUS AUD 26, ,000 SembCorp Marine Ltd. SGP SGD 20, ,839 Macquarie Atlas Roads Group AUS AUD 19, Mitsubishi Logistics Corp. JPN JPY 7, ,000 Rickmers Maritime SGP SGD 5, ,994, Information Technology 117,100 Delta Electronics (Thailand) PCL, fgn. THA THB 207, ,000 VTech Holdings Ltd. HKG HKD 106, ,000 Synnex Technology International Corp. TWN TWD 97, ,000 Asustek Computer Inc. TWN TWD 90, ,000 Simplo Technology Co. Ltd. TWN TWD 78, ,000 Novatek Microelectronics Corp. Ltd. TWN TWD 27, , Materials 7,338 Rio Tinto PLC GBR GBP 283, ,000 Fauji Fertilizer Co. Ltd. PAK PKR 262, ,882 BASF SE DEU EUR 201, ,920 CRH PLC IRL EUR 137, ,240 Tikkurila Oy FIN EUR 104, , Telecommunication Services 45,981 TDC AS DNK DKK 291, ,407 Deutsche Telekom AG DEU EUR 283, ,084 Vodafone Group PLC GBR GBP 223, ,444 Vivendi SA FRA EUR 154, ,000 Telekomunikasi Indonesia Persero Tbk PT, B IDN IDR 92, ,000 Singapore Telecommunications Ltd. SGP SGD 92, ,500 China Mobile Ltd. CHN HKD 62, ,500 Intouch Holdings PCL, NVDR THA THB 44, ,400 Grameenphone Ltd. BGD BDT 43, ,289, Unaudited Semi-Annual Report

259 Franklin Multi-Asset Income Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Utilities 34,455 National Grid PLC GBR GBP 407, ,614 GDF Suez FRA EUR 361, ,066 Centrica PLC GBR GBP 255, ,387 SSE PLC GBR GBP 237, ,953 Snam SpA ITA EUR 192, ,720 NextEra Energy Inc. USA USD 151, ,280 Dominion Resources Inc. USA USD 144, ,000 Cheung Kong Infrastructure Holdings Ltd. HKG HKD 110, ,825 Enel SpA ITA EUR 110, ,000 Power Assets Holdings Ltd. HKG HKD 104, ,500 Perusahaan Gas Negara (Persero) Tbk PT IDN IDR 101, ,970 ITC Holdings Corp. USA USD 99, ,780 Edison International USA USD 96, ,103 Iberdrola SA ESP EUR 95, ,530 Portland General Electric Co. USA USD 79, Sempra Energy USA USD 69, ,110 New Jersey Resources Corp. USA USD 56, ,690 Pattern Energy Group Inc. USA USD 54, ,580 Public Service Enterprise Group Inc. USA USD 54, ,110 Atmos Energy Corp. USA USD 51, ,000 Sound Global Ltd. CHN HKD 49, ,580 RWE AG DEU EUR 40, American Water Works Co. Inc. USA USD 40, ,040 UIL Holdings Corp. USA USD 37, ,150 Exelon Corp. USA USD 35, ,700 Boralex Inc., A CAN CAD 33, ,190 Suez Environnement Co. FRA EUR 31, ,290 NRG Energy Inc. USA USD 28, NorthWestern Corp. USA USD 25, Ameren Corp. USA USD 24, ,570 E.ON SE DEU EUR 22, ,267 Enersis SA, ADR CHL USD 16, ,351 Companhia Energetica de Minas Gerais, ADR, pfd. BRA USD 9, ,600 ENN Energy Holdings Ltd. CHN HKD 7, ,237, TOTAL SHARES 18,634, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 22,703, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 201,000 Morgan Stanley, senior note, 5.50%, 07/28/21 USA USD 188, ,000 Merrill Lynch & Co. Inc., senior note, 6.875%, 04/25/18 USA USD 185, ,000 Verizon Communications Inc., senior bond, 6.55%, 09/15/43 USA USD 174, ,000 Abbey National Treasury Services PLC, senior note, 1.375%, 03/13/17 GBR USD 173, ,000 Royal Bank of Scotland Group PLC, senior note, 1.875%, 03/31/17 GBR USD 165, ,000 General Electric Capital Corp., senior note, 5.625%, 09/15/17 USA USD 165, ,000 Citigroup Inc., senior note, 8.125%, 07/15/39 USA USD 165, ,000 Imperial Tobacco Finance PLC, Reg S, 7.75%, 06/24/19 GBR GBP 158, ,000 Svenska Handelsbanken AB, senior note, Reg S, 4.00%, 01/18/19 SWE GBP 141, ,000 Time Warner Inc., 7.625%, 04/15/31 USA USD 138, ,000 Bupa Finance PLC, sub. note, Reg S, 5.00%, 04/25/23 GBR GBP 135, ,000 WM Morrison Supermarkets PLC, Reg S, 4.625%, 12/08/23 GBR GBP 131, ,000 Walgreens Boots Alliance Inc., senior note, 3.80%, 11/18/24 USA USD 126, ,000 News America Inc., 6.40%, 12/15/35 USA USD 124, ,000 Barclays Bank PLC, senior sub. note, Reg S, 6.00%, 01/14/21 GBR EUR 122, ,000 Rabobank Nederland, senior note, Reg S, 4.125%, 01/12/21 NLD EUR 120, ,000 RWE Finance BV, senior bond, Reg S, 3.00%, 01/17/24 DEU EUR 116, ,000 Orange SA, senior bond, Reg S, 3.125%, 01/09/24 FRA EUR 115, ,000 Mondelez International Inc., senior note, 2.25%, 02/01/19 USA USD 115, ,000 WPP Finance 2013, senior note, Reg S, 3.00%, 11/20/23 GBR EUR 114, ,000 AXA SA, sub. bond, Reg S, 5.25% to 04/16/20, FRN thereafter, 04/16/40 FRA EUR 113, ,000 Standard Chartered PLC, senior note, Reg S, 4.125%, 01/18/19 GBR EUR 113, ,000 Rio Tinto Finance USA PLC, senior note, 1.625%, 08/21/17 GBR USD 113, ,000 Gas Natural Fenosa Finance BV, senior note, Reg S, 2.875%, 03/11/24 ESP EUR 112, ,000 Casino Guichard Perrachon SA, senior note, Reg S, 3.311%, 01/25/23 FRA EUR 112, ,000 Allianz SE, sub. note, Reg S, 4.75% to 10/24/23, FRN thereafter, Perpetual DEU EUR 111, ,000 Bacardi Ltd., senior note, Reg S, 2.75%, 07/03/23 BMU EUR 110, ,000 The Goldman Sachs Group Inc., senior note, 5.75%, 01/24/22 USA USD 110, ,000 Motability Operations Group PLC, senior note, Reg S, 3.75%, 11/29/17 GBR EUR 109, ,000 ABB Finance BV, senior note, Reg S, 2.625%, 03/26/19 CHE EUR 109, ,000 BPCE SA, senior note, Reg S, 2.125%, 03/17/21 FRA EUR 108, ,000 Becton Dickinson & Co., senior note, 1.80%, 12/15/17 USA USD 107, ,000 Daimler AG, senior note, Reg S, 4.125%, 01/19/17 DEU EUR 107, ,000 Danske Bank AS, senior note, Reg S, 3.875%, 02/28/17 DNK EUR 107, ,000 Freeport-McMoRan Copper & Gold Inc., senior note, 2.30%, 11/14/17 USA USD 107, Unaudited Semi-Annual Report 257

260 Franklin Multi-Asset Income Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Corporate Bonds (continued) 100,000 Syngenta Finance NV, senior note, Reg S, 1.875%, 11/02/21 CHE EUR 107, ,000 Compass Group PLC, senior note, Reg S, 1.875%, 01/27/23 GBR EUR 106, ,000 SPP-Distribucia AS, senior note, Reg S, 2.625%, 06/23/21 SSS EUR 105, ,000 Lloyds Bank PLC, senior note, Reg S, 1.875%, 10/10/18 GBR EUR 105, ,000 Yorkshire Building Society, senior note, Reg S, 2.125%, 03/18/19 GBR EUR 104, ,000 Carlsberg Breweries A/S, senior note, Reg S, 2.50%, 05/28/24 DNK EUR 103, ,000 Intesa Sanpaolo SpA, senior note, Reg S, 4.125%, 01/14/16 ITA EUR 103, ,000 Ford Motor Credit Co. LLC, senior note, 8.125%, 01/15/20 USA USD 102, ,000 Dollar General Corp., senior bond, 3.25%, 04/15/23 USA USD 101, ,000 Simon Property Group LP, senior bond, 3.375%, 10/01/24 USA USD 101, ,000 Delta Lloyd NV, junior sub. note, Reg S, 4.375% to 06/13/24, FRN thereafter, Perpetual NLD EUR 96, ,000 Viacom Inc., senior note, 2.50%, 09/01/18 USA USD 95, ,000 Altria Group Inc., senior note, 2.625%, 01/14/20 USA USD 95, ,000 Express Scripts Holding Co., senior bond, 3.50%, 06/15/24 USA USD 94, ,000 Heathrow Funding Ltd., senior secured bond, 144A, 4.875%, 07/15/23 GBR USD 92, ,000 HSBC USA Inc., sub. note, 5.00%, 09/27/20 USA USD 90, ,000 Sysco Corp., senior bond, 4.50%, 10/02/44 USA USD 90, ,000 American Tower Corp., senior note, 3.40%, 02/15/19 USA USD 85, ,000 LYB International Finance BV, senior note, 4.00%, 07/15/23 NLD USD 84, ,000 General Electric Capital Corp., junior sub. bond, C, 5.25% to 06/15/23, FRN thereafter, Perpetual USA USD 82, ,000 Anheuser-Busch InBev Worldwide Inc., senior note, 1.375%, 07/15/17 BEL USD 82, ,000 Ensco PLC, senior bond, 4.50%, 10/01/24 USA USD 79, ,000 Anthem Inc., senior bond, 3.30%, 01/15/23 USA USD 78, ,000 BNP Paribas SA, 2.375%, 09/14/17 FRA USD 75, ,000 Tesco PLC, senior note, 6.125%, 02/24/22 GBR GBP 70, ,000 Valero Energy Corp., 6.125%, 06/15/17 USA USD 68, ,000 Sydney Airport Finance Co. Pty. Ltd., 144A, 3.90%, 03/22/23 AUS USD 63, ,000 Weatherford International Ltd./Bermuda, 7.00%, 03/15/38 USA USD 63, ,000 Juniper Networks Inc., senior note, 3.10%, 03/15/16 USA USD 59, ,000 Kinder Morgan Energy Partners LP, senior note, 6.50%, 09/01/39 USA USD 55, ,000 CSC Holdings LLC, senior note, 6.75%, 11/15/21 USA USD 54, ,000 Ally Financial Inc., senior note, 7.50%, 09/15/20 USA USD 53, ,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 52, ,000 MetLife Inc., junior sub. note, 6.40% to 12/15/36, FRN thereafter, 12/15/66 USA USD 50, ,000 Enterprise Products Operating LLC, senior bond, 3.90%, 02/15/24 USA USD 50, ,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 49, ,000 Constellation Brands Inc., senior note, 4.25%, 05/01/23 USA USD 49, ,000 Mitsui Sumitomo Insurance Co. Ltd., junior sub. note, 144A, 7.00% to 03/15/22, FRN thereafter, 03/15/72 JPN USD 47, ,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 46, ,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 45, ,000 HCA Inc., senior secured note, first lien, 5.875%, 03/15/22 USA USD 45, ,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 44, ,000 Health Care REIT Inc., senior note, 6.50%, 03/15/41 USA USD 43, ,000 Aviation Capital Group Corp., 144A, 6.75%, 04/06/21 USA USD 42, ,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 42, ,000 NOVA Chemicals Corp., senior bond, 144A, 5.00%, 05/01/25 CAN USD 41, ,000 QEP Resources Inc., senior note, 5.375%, 10/01/22 USA USD 39, ,000 Gilead Sciences Inc., senior note, 4.40%, 12/01/21 USA USD 36, ,000 Neuberger Berman Group LLC/Finance Corp., senior note, 144A, 5.875%, 03/15/22 USA USD 34, ,000 ArcelorMittal, senior bond, 6.75%, 03/01/41 LUX USD 33, ,000 Sealed Air Corp., senior note, 144A, 6.50%, 12/01/20 USA USD 31, ,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 28, ,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 28, ,000 Intelsat Jackson Holdings SA, senior note, 7.50%, 04/01/21 LUX USD 26, ,778 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 13, ,215, Government and Municipal Bonds 200,000 Government of Russia, senior note, 144A, 3.50%, 01/16/19 RUS USD 149, ,000 Government of Mexico, senior note, 4.00%, 10/02/23 MEX USD 114, ,000 California State GO, Build America Bonds, Various Purpose, 7.55%, 04/01/39 USA USD 76, ,000 Florida Hurricane Catastrophe Fund Finance Corp. Revenue, Series A, 2.995%, 07/01/20 USA USD 62, ,000 Illinois State GO, 5.10%, 06/01/33 USA USD 61, , Securities Maturing Within One Year 157,000 JPMorgan Chase & Co., 5.15%, 10/01/15 USA USD 133, ,000 Statoil ASA, senior note, Reg S, 4.375%, 03/11/15 NOR EUR 100, ,000 Hyundai Capital America, senior note, 144A, 1.625%, 10/02/15 KOR USD 91, ,000 The Export-Import Bank of Korea, senior note, 5.875%, 01/14/15 KOR USD 82, Unaudited Semi-Annual Report

261 Franklin Multi-Asset Income Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Securities Maturing Within One Year (continued) 100,000 Telefonica Emisiones SAU, senior note, 4.949%, 01/15/15 ESP USD 82, ,000 Williams Partners LP, senior note, 3.80%, 02/15/15 USA USD 66, ,000 Duke Realty LP, senior note, 7.375%, 02/15/15 USA USD 58, ,000 AbbVie Inc., senior note, 1.20%, 11/06/15 USA USD 58, ,000 Government of Poland, senior note, 3.875%, 07/16/15 POL USD 42, ,000 Puerto Rico Commonwealth Government Development Bank Revenue, senior note, Series A, 3.448%, 02/01/15 USA USD 32, , TOTAL BONDS 9,428, INVESTMENTS FUNDS Financials 550,010 FTIF Franklin Income Fund, Class Z (Mdis) USD LUX USD 5,172, ,510 FTIF Templeton Global Bond Fund, Class I (Mdis) EUR LUX EUR 4,642, ,484 FTSIIF Franklin Emerging Corporate Debt Fund, Class I (acc) EUR LUX EUR 3,812, ,939 FTIF Templeton Euro Government Bond Fund, Class I (Qdis) EUR LUX EUR 1,443, ,760 FTIF Franklin U.S. Government Fund, Class I (Mdis) USD LUX USD 342, ,413, TOTAL INVESTMENTS FUNDS 15,413, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 24,842, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 125,000 GDF Suez, senior note, 144A, 1.625%, 10/10/17 FRA USD 103, ,000 Georgia-Pacific LLC, 144A, 3.734%, 07/15/23 USA USD 97, ,000 Asciano Finance Ltd., senior note, 144A, 5.00%, 04/07/18 AUS USD 88, ,000 EDF SA, sub. note, 144A, 5.25% to 01/29/23, FRN thereafter, Perpetual POL USD 84, ,000 Glencore Funding LLC, senior note, 144A, 2.50%, 01/15/19 CHE USD 77, ,000 Telstra Corp. Ltd., 144A, 4.80%, 10/12/21 AUS USD 46, , Securities Maturing Within One Year 80,000 Commonwealth Bank of Australia, senior note, 144A, 3.50%, 03/19/15 AUS USD 66, TOTAL BONDS 564, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 564, TOTAL INVESTMENTS 48,110, Unaudited Semi-Annual Report 259

262 Franklin Natural Resources Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Coal & Consumable Fuels 189,890 Peabody Energy Corp. USA USD 1,469, Commodity Chemicals 30,900 Axiall Corp. USA USD 1,312, ,600 LyondellBasell Industries NV, A USA USD 1,079, ,392, Construction Materials 10,000 Martin Marietta Materials Inc. USA USD 1,103, Diversified Metals & Mining 111,710 BHP Billiton PLC, ADR AUS USD 4,803, ,432 Glencore PLC CHE GBP 3,192, ,500 Freeport-McMoRan Inc., B USA USD 3,141, ,200 Rio Tinto PLC, ADR GBR USD 3,049, ,000 Teck Resources Ltd., B CAN USD 2,005, ,896 Sandfire Resources NL AUS AUD 1,221, ,200 First Quantum Minerals Ltd. ZMB CAD 1,126, ,981 PanAust Ltd. AUS AUD 962, ,800 Imperial Metals Corp. CAN CAD 849, ,551,600 MMG Ltd. AUS HKD 480, ,900 Nautilus Minerals Inc. CAN CAD 126, ,957, Fertilizers & Agricultural Chemicals 21,400 The Mosaic Co. USA USD 976, Gold 112,400 Goldcorp Inc. CAN USD 2,081, ,900 Randgold Resources Ltd., ADR JER USD 1,611, ,250 Barrick Gold Corp. CAN USD 1,066, ,982 B2Gold Corp. CAN CAD 1,043, ,900 Agnico Eagle Mines Ltd. CAN CAD 918, ,397 Newcrest Mining Ltd. AUS AUD 768, ,860 AngloGold Ashanti Ltd., ADR ZAF USD 694, ,535,824 G-Resources Group Ltd. HKG HKD 622, ,106,400 Romarco Minerals Inc. CAN CAD 466, ,275, Integrated Oil & Gas 83,280 Occidental Petroleum Corp. USA USD 6,713, ,600 Chevron Corp. USA USD 6,237, ,800 Exxon Mobil Corp. USA USD 3,679, ,760 Hess Corp. USA USD 3,378, ,690 Total SA, B, ADR FRA USD 2,492, ,800 BP PLC, ADR GBR USD 1,631, ,500 Royal Dutch Shell PLC, A, ADR GBR USD 1,573, ,000 Petroleo Brasileiro SA, ADR BRA USD 803, ,508, Oil & Gas Drilling 259,500 Pioneer Energy Services Corp. USA USD 1,437, ,980 Rowan Cos. PLC USA USD 1,422, ,033 Ensco PLC, A USA USD 809, ,600 Noble Corp. PLC USA USD 589, ,259, Oil & Gas Equipment & Services 74,861 Schlumberger Ltd. USA USD 6,393, ,211 Halliburton Co. USA USD 3,901, ,420 Oceaneering International Inc. USA USD 3,024, ,748 Baker Hughes Inc. USA USD 2,733, ,500 Cameron International Corp. USA USD 2,672, ,480 Superior Energy Services Inc. USA USD 2,266, ,340 FMC Technologies Inc. USA USD 2,076, ,060 Dril-Quip Inc. USA USD 1,692, ,800 RigNet Inc. USA USD 1,591, ,800 Hornbeck Offshore Services Inc. USA USD 1,368, ,700 C&J Energy Services Inc. USA USD 1,145, ,200 Weatherford International PLC USA USD 1,135, ,290 National Oilwell Varco Inc. USA USD 870, ,128 PHI Inc. USA USD 827, ,500 Forum Energy Technologies Inc. USA USD 652, ,160 Oil States International Inc. USA USD 545, ,100 Key Energy Services Inc. USA USD 422, ,400 RPC Inc. USA USD 357, ,680, Unaudited Semi-Annual Report

263 Franklin Natural Resources Fund Schedule of Investments as of December 31, 2014 (continued) face Oil & Gas Exploration & Production 83,166 Anadarko Petroleum Corp. USA USD 6,861, ,300 Cabot Oil & Gas Corp., A USA USD 4,243, ,120 Concho Resources Inc. USA USD 3,802, ,870 Marathon Oil Corp. USA USD 3,617, ,740 Southwestern Energy Co. USA USD 3,049, ,100 Pioneer Natural Resources Co. USA USD 2,843, ,100 EQT Corp. USA USD 2,808, ,500 Diamondback Energy Inc. USA USD 2,779, ,400 Noble Energy Inc. USA USD 2,485, ,918 Canadian Natural Resources Ltd. CAN CAD 2,472, ,200 Cimarex Energy Co. USA USD 2,353, ,700 SM Energy Co. USA USD 2,033, ,200 EnCana Corp. CAN USD 1,889, ,700 Devon Energy Corp. USA USD 1,879, ,600 Matador Resources Co. USA USD 1,792, ,700 EOG Resources Inc. USA USD 1,537, ,400 Oasis Petroleum Inc. USA USD 1,528, ,620 Gran Tierra Energy Inc. COL USD 1,461, ,100 Rex Energy Corp. USA USD 1,250, ,400 Callon Petroleum Co. USA USD 1,064, ,070 Cobalt International Energy Inc. USA USD 1,058, ,200 Tullow Oil PLC GBR GBP 910, ,000 Ophir Energy PLC GBR GBP 798, ,900 Eclipse Resources Corp. USA USD 660, ,800 MEG Energy Corp. CAN CAD 619, ,872 California Resources Corp. USA USD 192, ,991, Oil & Gas Refining & ing 39,605 Phillips 66 USA USD 2,839, ,500 HollyFrontier Corp. USA USD 2,042, ,600 Valero Energy Corp. USA USD 1,316, ,500 Marathon Petroleum Corp. USA USD 947, ,146, Silver 25,600 Tahoe Resources Inc. USA CAD 356, Specialty Chemicals 18,900 Celanese Corp., A USA USD 1,133, TOTAL SHARES 165,250, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 165,250, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Oil & Gas Exploration & Production 29,600 Sanchez Energy Corp., 4.875%, cvt. pfd. USA USD 953, ,400 Sanchez Energy Corp., 6.50%, cvt. pfd., B USA USD 594, ,547, TOTAL SHARES 1,547, BONDS Corporate Bonds 1,034,000 Cobalt International Energy Inc., cvt., senior bond, 3.125%, 05/15/24 USA USD 698, ,289,000 Molycorp Inc., cvt., senior note, 6.00%, 09/01/17 USA USD 399, ,098, TOTAL BONDS 1,098, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 2,646, TOTAL INVESTMENTS 167,896, Unaudited Semi-Annual Report 261

264 Franklin Real Return Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Energy 600 Exxon Mobil Corp. USA USD 55, Chevron Corp. USA USD 44, Schlumberger Ltd. USA USD 42, Anadarko Petroleum Corp. USA USD 41, Occidental Petroleum Corp. USA USD 32, ,000 Marathon Oil Corp. USA USD 28, Halliburton Co. USA USD 27, Devon Energy Corp. USA USD 21, Southwestern Energy Co. USA USD 16, ,400 Weatherford International PLC USA USD 16, Pioneer Natural Resources Co. USA USD 14, Noble Energy Inc. USA USD 14, ,400 Peabody Energy Corp. USA USD 10, California Resources Corp. USA USD , Materials 2,400 Goldcorp Inc. CAN USD 44, The Dow Chemical Co. USA USD 41, ,300 Freeport-McMoRan Inc., B USA USD 30, Nucor Corp. USA USD 29, Potash Corp. of Saskatchewan Inc. CAN USD 28, BHP Billiton Ltd., ADR AUS USD 18, Rio Tinto PLC, ADR GBR USD 18, , TOTAL SHARES 577, INVESTMENTS FUNDS Diversified Financial Services 28,200 ishares US Property Yield UCITS ETF USA GBP 799, TOTAL INVESTMENTS FUNDS 799, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,377, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 50,000 Ally Financial Inc., senior note, 7.50%, 09/15/20 USA USD 58, ,000 Energy Transfer Equity LP, senior note, first lien, 7.50%, 10/15/20 USA USD 55, ,000 MGM Resorts International, senior note, 7.75%, 03/15/22 USA USD 55, ,000 HCA Inc., senior secured note, first lien, 5.875%, 03/15/22 USA USD 54, ,000 Sprint Nextel Corp., senior note, 144A, 7.00%, 03/01/20 USA USD 54, ,000 ArcelorMittal, senior note, 6.25%, 02/25/22 LUX USD 53, ,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 53, ,000 CIT Group Inc., secured note, 144A, 5.50%, 02/15/19 USA USD 52, ,000 Reynolds Group Issuer Inc./LLC/SA, first lien, 5.75%, 10/15/20 USA USD 51, ,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 50, ,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 49, ,222 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 20, , Government and Municipal Bonds US Issued 1,161,821 U.S. Treasury Note, Index Linked, 0.125%, 04/15/16 USA USD 1,158, ,822 U.S. Treasury Note, Index Linked, 2.00%, 01/15/16 USA USD 728, ,449 U.S. Treasury Bond, Index Linked, 0.125%, 04/15/17 USA USD 470, ,431 U.S. Treasury Note, Index Linked, 2.50%, 07/15/16 USA USD 281, TOTAL US ISSUED 2,640, Non US Issued 660,000 Government of Malaysia, senior note, 3.172%, 07/15/16 MYS MYR 187, ,000,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 184, ,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 180, ,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 180, ,244 Mexican Udibonos, Index Linked, 5.00%, 06/16/16 MEX MXN 174, ,000,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 148, ,670,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 40, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 18, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 15, ,000,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 4, Government of Mexico, 7.25%, 12/15/16 MEX MXN 3, Government of Mexico, 6.25%, 06/16/16 MEX MXN 1, Unaudited Semi-Annual Report

265 Franklin Real Return Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds Non US Issued (continued) 110,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF ,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF ,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF ,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF TOTAL NON US ISSUED 1,141, ,781, Securities Maturing Within One Year 1,098,696 U.S. Treasury Note, Index Linked, 1.875%, 07/15/15 USA USD 1,102, ,316 U.S. Treasury Note, Index Linked, 1.625%, 01/15/15 USA USD 807, ,711 U.S. Treasury Note, Index Linked, 0.50%, 04/15/15 USA USD 324, ,820 Government of Mexico, 8.00%, 12/17/15 MEX MXN 154, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 100, ,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 94, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 47, ,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 42, ,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 41, ,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 17, Letra Tesouro Nacional, Strip, 01/01/15 BRA BRL 12, ,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 1, ,746, TOTAL BONDS 7,137, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 7,137, TOTAL INVESTMENTS 8,515, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report 263

266 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING INVESTMENTS FUNDS Diversified Financial Services 450,000 ishares $ High Yield Corporate Bond UCITS ETF USA USD 48,359, TOTAL INVESTMENTS FUNDS 48,359, SHARES Consumer Finance 15,400 GMAC Capital Trust I, 8.125%, pfd. USA USD 406, TOTAL SHARES 406, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 48,765, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Air Freight & Logistics 97 CEVA Holdings LLC, cvt. pfd., A-2 GBR USD 75, CEVA Holdings LLC GBR USD 34, , Paper & Forest Products 3,000 NewPage Holdings Inc. USA USD 272, TOTAL SHARES 382, BONDS Asset-Backed Securities 13,221,000 FNMA, 4.00%, 01/01/41 USA USD 14,111, ,374,000 FNMA, 3.00%, 01/01/43 USA USD 12,518, ,880,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-CB17, AM, 5.464%, 12/12/43 USA USD 6,099, ,495,000 Greenwich Capital Commercial Funding Corp., 2006-GG7, AJ, FRN, 5.82%, 07/10/38 USA USD 5,646, ,896,002 FNMA, 3.00%, 08/01/28 USA USD 5,098, ,500,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW12, AJ, FRN, 5.751%, 09/11/38 USA USD 4,635, ,370,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW13, AJ, 5.611%, 09/11/41 USA USD 4,490, ,000,000 Eaton Vance CDO Ltd., 144A, 1.685%, 07/15/26 CYM USD 3,971, ,808,000 Banc of America Commercial Mortgage Trust, , AJ, 5.695%, 07/10/46 USA USD 3,956, ,592,272 Bear Stearns Adjustable Rate Mortgage Trust, , A6, FRN, 3.517%, 06/25/34 USA USD 3,704, ,630,000 Atrium XI, 11A, C, 144A, FRN, 3.435%, 10/23/25 CYM USD 3,581, ,340,000 Citigroup/Deutsche Bank Commercial Mortgage Trust, 2006-CD3, AJ, FRN, 5.688%, 10/15/48 USA USD 3,257, ,760,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW11, AJ, FRN, 5.605%, 03/11/39 USA USD 2,850, ,693,000 GNMA, II, SF, 3.50%, 01/01/43 USA USD 2,827, ,481,000 Citigroup Commercial Mortgage Trust, 2007-C6, AM, FRN, 5.706%, 06/10/17 USA USD 2,653, ,475,000 Greenwich Capital Commercial Funding Corp., 2007-GG9, A4, 5.444%, 03/10/39 USA USD 2,642, ,360,000 Morgan Stanley Capital I Trust, 2007-IQ16, AMA, FRN, 6.094%, 12/12/49 USA USD 2,575, ,450,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-LDP7, AJ, FRN, 5.873%, 04/15/45 USA USD 2,464, ,170,000 Morgan Stanley Capital I Trust, 2007-IQ16, AM, FRN, 6.099%, 12/12/49 USA USD 2,388, ,430,000 Citigroup Commercial Mortgage Trust, 2006-C5, AJ, 5.482%, 10/15/49 USA USD 2,384, ,666,863 Talisman 6 Finance, Reg S, FRN, 0.262%, 10/22/16 DEU EUR 1,992, ,790,000 LB-UBS Commercial Mortgage Trust, 2006-C4, AM, FRN, 5.857%, 06/15/38 USA USD 1,901, ,880,000 BCAP LLC Trust, 2009-RR1, 2A2, 144A, FRN, 2.615%, 05/26/35 USA USD 1,866, ,860,000 Atrium CDO Corp., 10A, C, 144A, FRN, 2.829%, 07/16/25 USA USD 1,780, ,644,724 FNMA, 3.00%, 08/01/27 USA USD 1,714, ,530,000 Bear Stearns Commercial Mortgage Securities Inc., 2007-PW16, AM, FRN, 5.706%, 06/11/40 USA USD 1,669, ,646,534 Thornburg Mortgage Securities Trust, , A3, FRN, 2.234%, 04/25/45 USA USD 1,657, ,566,929 Opteum Mortgage Acceptance Corp. Trust, , 1APT, FRN, 0.48%, 11/25/35 USA USD 1,487, ,419,290 FNMA, 3.00%, 03/01/27 USA USD 1,479, ,461,964 CT CDO IV Ltd., A, A1, 144A, FRN, 0.475%, 10/20/43 USA USD 1,449, ,500,000 Catamaran CLO Ltd., A, C, 144A, FRN, 2.834%, 01/27/25 CYM USD 1,419, ,430,000 ING Investment Management CLO Ltd., A, B, 144A, FRN, 2.914%, 04/25/25 USA USD 1,375, ,408,723 Structured Asset Mortgage Investments Trust, 2003-AR2, A1, FRN, 0.904%, 12/19/33 USA USD 1,362, Unaudited Semi-Annual Report

267 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 1,300,000 Gleneagles CLO Ltd., A, A2, 144A, FRN, 0.632%, 11/01/17 USA USD 1,292, ,300,000 G-Force LLC, 2005-RRA, C, 144A, 5.20%, 08/22/36 USA USD 1,256, ,190,000 Greenwich Capital Commercial Funding Corp., 2007-GG9, AM, 5.475%, 03/10/39 USA USD 1,249, ,176,471 Cent CLO LP, A, D, 144A, FRN, 3.233%, 01/30/25 CYM USD 1,141, ,081,618 FNMA, 3.00%, 02/01/27 USA USD 1,127, ,065,818 MortgageIT Trust, , A2, 2.29%, 11/25/34 USA USD 1,035, ,086 FNMA, 5.00%, 08/01/40 USA USD 1,027, ,000,000 Mountain View CLO II Ltd., A, C, 144A, FRN, 0.93%, 01/12/21 USA USD 945, ,000 FHLMC, 3.50%, 01/01/42 USA USD 919, ,982 Structured Asset Securities Corp., XS, 2A2, 1.651%, 02/25/35 USA USD 910, ,000 FNMA, 3.50%, 01/01/42 USA USD 906, ,800 Eaton Vance CDO Ltd., A, B, 144A, FRN, 2.285%, 07/15/26 USA USD 888, ,000 Merrill Lynch Mortgage Investors Trust, 2005-A6, 2A3, FRN, 0.55%, 08/25/35 USA USD 835, ,000 Merrill Lynch Mortgage Trust, 2005-CKI1, AJ, FRN, 5.282%, 11/12/37 USA USD 822, ,693 Thornburg Mortgage Securities Trust, , A1, FRN, 2.135%, 07/25/45 USA USD 799, ,974 MortgageIT Trust, 05-5, A1, FRN, 0.43%, 12/25/35 USA USD 792, ,268 Impac Secured Assets Trust, , FRN, 0.42%, 04/25/37 USA USD 791, ,572 FNMA, 4.50%, 05/01/41 USA USD 786, ,747 FNMA, 2.50%, 06/01/27 USA USD 660, ,000 ING Investment Management CLO Ltd., A, C, 144A, FRN, 3.731%, 04/15/24 CYM USD 636, ,000 CIFC Funding Ltd., A, A1J, 144A, FRN, 0.634%, 07/26/21 USA USD 615, ,000 Morgan Stanley Capital I Trust, 2006-HQ8, AJ, FRN, 5.497%, 03/12/44 USA USD 580, ,116 Greenwich Capital Commercial Funding Corp., 2006-GG7, A4, FRN, 5.883%, 07/10/38 USA USD 569, ,379 Westchester CLO Ltd., A, A1A, 144A, FRN, 0.457%, 08/01/22 USA USD 374, ,000 ING Investment Management CLO Ltd., A, B, 144A, FRN, 3.131%, 04/15/24 CYM USD 367, ,779 FNMA, 5.50%, 07/01/38 USA USD 344, ,000 FHLMC, 4.00%, 01/01/41 USA USD 335, ,492 Newcastle CDO IV Ltd., A, 1, 144A, FRN, 0.595%, 12/24/39 USA USD 335, ,518 FNMA, 3.00%, 07/01/27 USA USD 334, ,300 Eaton Vance CDO Ltd., A, C, 144A, FRN, 3.235%, 07/15/26 USA USD 325, ,739 FNMA, 3.00%, 08/01/28 USA USD 272, ,102 FHLMC, 4.50%, 09/01/40 USA USD 255, ,174 FHLMC, 5.00%, 05/01/41 USA USD 253, ,767 FHLMC, 4.50%, 10/01/40 USA USD 222, ,631 FNMA, 6.00%, 02/01/37 USA USD 178, ,862 FNMA, 5.50%, 02/01/38 USA USD 149, ,660 Wells Fargo Mortgage Backed Securities Trust, 2004-W, A9, FRN, 2.616%, 11/25/34 USA USD 145, ,093 FHLMC, 5.00%, 03/01/28 USA USD 140, ,147 FNMA, 3.50%, 02/01/26 USA USD 135, ,928 FNMA, 5.00%, 02/01/40 USA USD 130, ,277 FNMA, 5.50%, 09/01/23 USA USD 129, ,000 ARES CLO Funds, A, B, 144A, FRN, 1.233%, 11/25/20 USA USD 128, ,720 FNMA, 6.00%, 05/01/38 USA USD 120, ,014 Cent CDO Ltd., A, A2B, 144A, FRN, 0.579%, 03/11/21 USA USD 82, ,632 FNMA, 5.50%, 02/01/38 USA USD 61, ,680 FNMA, 6.00%, 11/01/36 USA USD 60, ,994 Wells Fargo Mortgage Backed Securities Trust, , 3A1, 5.50%, 04/25/37 USA USD 58, ,000 ColumbusNova CLO Ltd., A, A2, 144A, FRN, 1.231%, 10/15/21 USA USD 58, ,951 FHLMC, 6.00%, 11/01/37 USA USD 45, ,096 FNMA, 6.00%, 11/01/37 USA USD 44, ,041 GNMA, SF, 5.50%, 06/15/38 USA USD 41, ,453 FNMA, 4.50%, 05/01/24 USA USD 39, ,142 FNMA, 5.50%, 12/01/37 USA USD 38, ,595 FNMA, 5.50%, 07/01/37 USA USD 37, ,690 FNMA, 5.00%, 07/01/40 USA USD 37, ,237 FNMA, 5.50%, 03/01/34 USA USD 37, ,470 FNMA, 6.00%, 12/01/37 USA USD 35, ,989 FHLMC, 5.50%, 11/01/37 USA USD 32, ,904 FHLMC, 6.00%, 08/01/37 USA USD 27, ,927 FHLMC, 6.00%, 01/01/38 USA USD 23, ,942 FNMA, 6.00%, 05/01/36 USA USD 20, ,670 FNMA, 6.50%, 08/01/36 USA USD 20, ,242 FNMA, 6.00%, 12/01/36 USA USD 18, ,702 FNMA, 5.00%, 05/01/28 USA USD 17, ,342 FHLMC, 5.50%, 11/01/38 USA USD 17, ,657 FNMA, 5.50%, 06/01/38 USA USD 16, ,984 FNMA, 6.50%, 10/01/37 USA USD 15, ,572 FNMA, 5.50%, 04/01/38 USA USD 15, ,231 FNMA, 5.50%, 06/01/37 USA USD 14, ,362 FNMA, 4.50%, 09/01/24 USA USD 14, Unaudited Semi-Annual Report 265

268 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 12,020 FNMA, 5.00%, 07/01/23 USA USD 12, ,479 FNMA, 5.00%, 02/01/27 USA USD 12, ,373 FHLMC, 5.50%, 05/01/22 USA USD 12, ,499 FNMA, 4.50%, 07/01/23 USA USD 12, ,953 FHLMC, 5.50%, 03/01/23 USA USD 11, ,909 FNMA, 6.50%, 11/01/36 USA USD 10, ,163 GNMA, SF, 5.00%, 06/15/37 USA USD 10, ,799 FHLMC, 5.50%, 05/01/37 USA USD 9, ,668 FNMA, 6.00%, 05/01/38 USA USD 8, ,511 FNMA, 6.50%, 11/01/35 USA USD 8, ,796 FHLMC, 5.00%, 02/01/23 USA USD 7, ,723 FNMA, 5.50%, 11/01/36 USA USD 6, ,062 FHLMC, 6.00%, 11/01/37 USA USD 5, ,088 FNMA, 5.00%, 01/01/24 USA USD 5, ,666 FHLMC, 6.00%, 02/01/39 USA USD 5, ,517 FNMA, 5.50%, 07/01/37 USA USD 5, ,595 FNMA, 5.00%, 12/01/23 USA USD 4, ,989 FNMA, 6.50%, 10/01/37 USA USD 3, ,691 FNMA, 5.50%, 10/01/17 USA USD 2, ,112 FNMA, 5.50%, 09/01/23 USA USD 2, ,793 FNMA, 5.00%, 11/01/22 USA USD 1, ,375, Corporate Bonds 6,000,000 Energy Transfer Equity LP, senior note, first lien, 7.50%, 10/15/20 USA USD 6,690, ,500,000 Deutsche Bank AG, sub. bond, 4.296% to 05/24/23, FRN thereafter, 05/24/28 DEU USD 6,324, ,000,000 Nippon Life Insurance Co., sub. bond, 144A, 5.10% to 10/16/24, FRN thereafter, 10/16/44 JPN USD 6,274, ,500,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 5,912, ,000,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 8.25%, 11/01/19 AUS USD 5,482, ,500,000 Freeport-McMoRan Inc., senior note, 4.55%, 11/14/24 USA USD 5,351, ,100,000 Wells Fargo & Co., junior sub. bond, S, 5.90% to 06/15/24, FRN thereafter, Perpetual USA USD 5,151, ,500,000 CSC Holdings LLC, senior note, 6.75%, 11/15/21 USA USD 4,989, ,000,000 LUKOIL International Finance BV, senior note, 144A, 4.563%, 04/24/23 RUS USD 4,800, ,900,000 Ally Financial Inc., senior note, 7.50%, 09/15/20 USA USD 4,582, ,100,000 Verizon Communications Inc., senior note, 5.15%, 09/15/23 USA USD 4,530, ,500,000 Zoetis Inc., senior bond, 3.25%, 02/01/23 USA USD 4,446, ,000,000 Bank of America Corp., junior sub. bond, M, 8.125% to 05/15/18, FRN thereafter, Perpetual USA USD 4,335, ,300,000 INVISTA Finance LLC, senior secured note, 144A, 4.25%, 10/15/19 USA USD 4,321, ,500,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 4,297, ,000,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 4,293, ,500,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 04/15/22 USA USD 4,276, ,500,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 4,252, ,000,000 Alcatel-Lucent USA Inc., senior note, 144A, 6.75%, 11/15/20 FRA USD 4,242, ,000,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 4,225, ,000,000 Chesapeake Energy Corp., senior note, 5.75%, 03/15/23 USA USD 4,140, ,000,000 CIT Group Inc., senior note, 5.00%, 08/15/22 USA USD 4,125, ,000,000 Jaguar Holding Co. I, senior note, 144A, PIK, 9.375%, 10/15/17 USA USD 4,098, ,500,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 4,072, ,900,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 3,836, ,500,000 Kinder Morgan Finance Co. LLC, senior secured note, 144A, 6.00%, 01/15/18 USA USD 3,810, ,500,000 The Goodyear Tire & Rubber Co., senior note, 6.50%, 03/01/21 USA USD 3,727, ,000,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 3,695, ,500,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 3,627, ,500, BC ULC/New Red Finance Inc., secured note, second lien, 144A, 6.00%, 04/01/22 CAN USD 3,605, ,500,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.25%, 02/15/21 USA USD 3,605, ,500,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 3,587, ,000,000 Wind Acquisition Finance SA, senior note, Reg S, 7.00%, 04/23/21 ITA EUR 3,566, ,500,000 T-Mobile USA Inc., senior bond, 6.375%, 03/01/25 USA USD 3,564, ,000,000 Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 * USA USD 3,562, ,500,000 PBF Holding Co. LLC, first lien, 8.25%, 02/15/20 USA USD 3,535, ,700,000 Ceramtec Group GmbH, senior note, Reg S, 8.25%, 08/15/21 DEU EUR 3,534, ,500,000 Equinix Inc., senior bond, 5.375%, 04/01/23 USA USD 3,517, ,300,000 Gant Co. Inc., senior bond, 6.375%, 10/15/23 USA USD 3,514, ,500,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 3,504, ,000,000 Mitsui Sumitomo Insurance Co. Ltd., junior sub. note, 144A, 7.00% to 03/15/22, FRN thereafter, 03/15/72 JPN USD 3,457, ,500,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 3,456, ,400,000 Hertz Corp., senior note, 6.25%, 10/15/22 USA USD 3,451, Unaudited Semi-Annual Report

269 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 4,000,000 Clayton Williams Energy Inc., senior note, 7.75%, 04/01/19 USA USD 3,420, ,000,000 Virgin Media Finance PLC, senior bond, Reg S, 6.375%, 10/15/24 GBR GBP 3,366, ,000,000 MetLife Inc., junior sub. note, 6.40% to 12/15/36, FRN thereafter, 12/15/66 USA USD 3,360, ,000,000 ArcelorMittal, senior note, 6.25%, 02/25/22 LUX USD 3,202, ,000,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 3,202, ,000,000 Xstrata Finance Canada Ltd., senior note, 144A, 4.95%, 11/15/21 CHE USD 3,169, ,000,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 3,146, ,000,000 Citigroup Inc., senior note, 3.875%, 10/25/23 USA USD 3,124, ,000,000 Unitymedia KabelBW GmbH, senior bond, 144A, 6.125%, 01/15/25 DEU USD 3,108, ,200,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 3,072, ,000,000 JPMorgan Chase & Co., sub. note, 3.875%, 09/10/24 USA USD 3,006, ,000,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 2,990, ,500,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 2,975, ,800,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 2,961, ,000,000 Cencosud SA, senior note, 144A, 4.875%, 01/20/23 CHL USD 2,958, ,000,000 Del Monte Corp., senior note, 7.625%, 02/15/19 USA USD 2,955, ,500,000 Financiere Gaillon 8 SAS, senior note, Reg S, 7.00%, 09/30/19 FRA EUR 2,949, ,100,000 Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 02/15/21 USA USD 2,929, ,500,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior note, 144A, 3.85%, 02/06/20 RUS USD 2,896, ,500,000 General Electric Capital Corp., sub. note, 5.30%, 02/11/21 USA USD 2,857, ,000,000 Digicel Group Ltd., senior note, 144A, 6.00%, 04/15/21 BMU USD 2,851, ,000,000 Stena International SA, secured bond, 144A, 5.75%, 03/01/24 SWE USD 2,835, ,900,000 DISH DBS Corp., senior bond, 5.00%, 03/15/23 USA USD 2,813, ,900,000 Abengoa Finance SAU, senior note, 144A, 8.875%, 11/01/17 ESP USD 2,809, ,700,000 Te Healthcare Corp., senior note, 144A, 5.50%, 03/01/19 USA USD 2,774, ,500,000 Citigroup Inc., sub. bond, 5.50%, 09/13/25 USA USD 2,771, ,000,000 W&T Offshore Inc., senior note, 8.50%, 06/15/19 USA USD 2,660, ,500,000 Intelsat Jackson Holdings SA, senior note, 7.25%, 10/15/20 LUX USD 2,646, ,500,000 MGM Resorts International, senior note, 6.625%, 12/15/21 USA USD 2,637, ,700,000 Post Holdings Inc., senior note, 144A, 6.75%, 12/01/21 USA USD 2,625, ,500,000 Virgin Media Secured Finance PLC, senior secured bond, first lien, 144A, 5.50%, 01/15/25 GBR USD 2,589, ,500,000 Frontier Communications Corp., senior bond, 7.625%, 04/15/24 USA USD 2,587, ,500,000 Millicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 LUX USD 2,570, ,500,000 Owens-Brockway Glass Container Inc., senior note, 144A, 5.00%, 01/15/22 USA USD 2,553, ,500,000 Cemex SAB de CV, secured note, 144A, 5.875%, 03/25/19 MEX USD 2,535, ,500,000 Nielsen Finance LLC/Co., senior note, 144A, 5.00%, 04/15/22 USA USD 2,515, ,400,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 2,466, ,000,000 Kerling PLC, senior secured note, first lien, Reg S, %, 02/01/17 GBR EUR 2,460, ,500,000 Energy XXI Gulf Coast Inc., senior note, 144A, 6.875%, 03/15/24 USA USD 2,441, ,500,000 Cemex SAB de CV, first lien, 144A, 5.70%, 01/11/25 MEX USD 2,415, ,300,000 Dynegy Finance I Inc./Dynegy Finance II Inc., senior secured bond, first lien, 144A, 7.625%, 11/01/24 USA USD 2,348, ,500,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 2,275, ,200,000 Terex Corp., senior note, 6.00%, 05/15/21 USA USD 2,255, ,500,000 Barminco Finance Pty. Ltd., senior note, 144A, 9.00%, 06/01/18 AUS USD 2,251, ,000,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 2,240, ,000,000 Bank of America Corp., senior note, 5.65%, 05/01/18 USA USD 2,223, ,100,000 KB Home, senior note, 7.00%, 12/15/21 USA USD 2,214, ,300,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 06/30/21 LUX USD 2,202, ,000,000 Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22 GBR USD 2,176, ,000,000 Energy Transfer Partners LP, senior note, 5.20%, 02/01/22 USA USD 2,142, ,500,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 2,137, ,000,000 CHS/Community Health Systems Inc., senior note, 5.125%, 08/01/21 USA USD 2,128, ,900,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 2,123, ,000,000 Neuberger Berman Group LLC/Finance Corp., senior note, 144A, 5.875%, 03/15/22 USA USD 2,115, ,500,000 Sanchez Energy Corp., senior note, 144A, 6.125%, 01/15/23 USA USD 2,106, ,000,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 2,096, ,000,000 Access Midstream Partner LP/ACMP Finance Corp., senior note, 5.875%, 04/15/21 USA USD 2,095, ,000,000 DaVita HealthCare Partners Inc., senior bond, 5.125%, 07/15/24 USA USD 2,043, ,000,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 2,027, ,000,000 Sealed Air Corp., senior bond, 144A, 5.125%, 12/01/24 USA USD 2,025, ,000,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 5.625%, 12/01/21 USA USD 2,020, ,070,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 2,018, ,000,000 Glencore Funding LLC, senior note, 144A, 4.625%, 04/29/24 CHE USD 2,017, ,000,000 DISH DBS Corp., senior note, 144A, 5.875%, 11/15/24 USA USD 2,015, ,500,000 Penn Virginia Corp., senior note, 8.50%, 05/01/20 USA USD 2,012, ,900,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 2,009, ,000,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 2,005, ,000,000 Sealed Air Corp., senior note, 144A, 4.875%, 12/01/22 USA USD 1,990, ,000,000 JPMorgan Chase & Co., sub. note, 3.375%, 05/01/23 USA USD 1,980, ,000,000 Sabine Pass Liquefaction LLC, senior secured, first lien, 5.75%, 05/15/24 USA USD 1,972, Unaudited Semi-Annual Report 267

270 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 1,200,000 New Look Bondco I PLC, secured note, first lien, Reg S, 8.75%, 05/14/18 GBR GBP 1,970, ,000,000 Navient Corp., senior note, 6.125%, 03/25/24 USA USD 1,970, ,100,000 Sanchez Energy Corp., senior note, 7.75%, 06/15/21 USA USD 1,963, ,100,000 Financiere Quick SAS, senior note, Reg S, FRN, 7.582%, 10/15/19 FRA EUR 1,953, ,000,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 1,951, ,900,000 Gant Co. Inc., senior note, 5.125%, 07/15/20 USA USD 1,947, ,100,000 Scientific Games International Inc., senior note, 144A, 10.00%, 12/01/22 USA USD 1,934, ,500,000 U.S. Coatings Acquisition Inc./Flash Dutch 2 BV, secured note, Reg S, 5.75%, 02/01/21 USA EUR 1,918, ,500,000 CGG SA, senior note, 6.50%, 06/01/21 FRA USD 1,912, ,800,000 Toll Brothers Finance Corp., senior bond, 5.625%, 01/15/24 USA USD 1,908, ,500,000 Halcon Resources Corp., senior note, 8.875%, 05/15/21 USA USD 1,893, ,500,000 Celanese US Holdings LLC, senior note, 3.25%, 10/15/19 USA EUR 1,883, ,800,000 AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, senior note, 144A, 5.00%, 10/01/21 NLD USD 1,875, ,000,000 CONSOL Energy Inc., senior note, 144A, 5.875%, 04/15/22 USA USD 1,870, ,500,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 11.25%, 06/01/17 USA USD 1,845, ,800,000 E*TRADE Financial Corp., senior note, 5.375%, 11/15/22 USA USD 1,845, ,700,000 E*TRADE Financial Corp., senior note, 6.375%, 11/15/19 USA USD 1,810, ,500,000 Offshore Group Investment Ltd., senior bond, first lien, 7.125%, 04/01/23 USA USD 1,800, ,500,000 Wind Acquisition Finance SA, senior secured note, Reg S, 4.00%, 07/15/20 ITA EUR 1,787, ,500,000 Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 06/01/21 USA USD 1,785, ,800,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 1,768, ,600,000 JPMorgan Chase & Co., senior note, 4.25%, 10/15/20 USA USD 1,721, ,000,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 1,695, ,700,000 Constellation Brands Inc., senior note, 4.25%, 05/01/23 USA USD 1,691, ,500,000 Merrill Lynch & Co. Inc., senior note, 6.40%, 08/28/17 USA USD 1,672, ,600,000 T-Mobile USA Inc., senior note, 6.542%, 04/28/20 USA USD 1,658, ,300,000 Avis Budget Finance PLC, senior note, Reg S, 6.00%, 03/01/21 USA EUR 1,657, ,500,000 Sealed Air Corp., senior note, 144A, 6.50%, 12/01/20 USA USD 1,650, ,600,000 Steel Dynamics Inc., senior bond, 144A, 5.50%, 10/01/24 USA USD 1,644, ,600,000 Steel Dynamics Inc., senior note, 144A, 5.125%, 10/01/21 USA USD 1,630, ,600,000 Scientific Games International Inc., senior secured note, first lien, 144A, 7.00%, 01/01/22 USA USD 1,628, ,500,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 1,625, ,600,000 Calpine Corp., senior note, 5.375%, 01/15/23 USA USD 1,618, ,500,000 CHS/Community Health Systems Inc., senior note, 8.00%, 11/15/19 USA USD 1,605, ,500,000 CHS/Community Health Systems Inc., senior note, 7.125%, 07/15/20 USA USD 1,601, ,500,000 DaVita HealthCare Partners Inc., senior note, 5.75%, 08/15/22 USA USD 1,595, ,600,000 KB Home, senior note, 4.75%, 05/15/19 USA USD 1,580, ,200,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.75%, 01/15/23 DEU EUR 1,579, ,500,000 eaccess Ltd., senior note, 144A, 8.25%, 04/01/18 JPN USD 1,577, ,500,000 Meritor Inc., senior note, 6.75%, 06/15/21 USA USD 1,575, ,500,000 CONSOL Energy Inc., senior note, 8.25%, 04/01/20 USA USD 1,561, ,500,000 Intelsat Jackson Holdings SA, senior bond, 6.625%, 12/15/22 LUX USD 1,548, ,170,000 KM Germany Holdings GmbH, senior secured note, first lien, Reg S, 8.75%, 12/15/20 DEU EUR 1,539, ,500,000 EnQuest PLC, senior note, 144A, 7.00%, 04/15/22 GBR USD 1,535, ,500,000 Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 05/15/23 USA USD 1,522, ,500,000 CCOH Safari LLC, senior bond, 5.75%, 12/01/24 USA USD 1,520, ,500,000 MGM Resorts International, senior note, 6.00%, 03/15/23 USA USD 1,515, ,500,000 JPMorgan Chase & Co., senior note, 3.25%, 09/23/22 USA USD 1,511, ,500,000 Kinder Morgan Inc., senior bond, 4.30%, 06/01/25 USA USD 1,508, ,500,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.875%, 03/01/22 USA USD 1,503, ,000,000 Offshore Group Investment Ltd., senior secured note, first lien, 7.50%, 11/01/19 USA USD 1,502, ,400,000 Sterling International Inc., senior note, 11.00%, 10/01/19 USA USD 1,494, ,500,000 JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 08/01/23, FRN thereafter, Perpetual USA USD 1,488, ,500,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 1,481, ,000,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 9.00%, 02/15/20 USA USD 1,480, ,500,000 Digicel Group Ltd., senior note, 144A, 8.25%, 09/30/20 BMU USD 1,468, ,500,000 Glencore Funding LLC, senior note, 144A, 4.125%, 05/30/23 CHE USD 1,466, ,400,000 DISH DBS Corp., senior note, 5.875%, 07/15/22 USA USD 1,438, ,400,000 Grifols Worldwide Operations Ltd., senior note, 144A, 5.25%, 04/01/22 USA USD 1,435, ,400,000 JBS USA LLC/Finance Inc., senior bond, 144A, 5.875%, 07/15/24 USA USD 1,389, ,400,000 Navistar International Corp., senior note, 8.25%, 11/01/21 USA USD 1,386, ,100,000 Play Finance 2 SA, secured note, first lien, Reg S, 5.25%, 02/01/19 LUX EUR 1,382, ,400,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 04/15/23 USA USD 1,375, ,500,000 Oasis Petroleum Inc., senior note, 6.875%, 03/15/22 USA USD 1,372, Unaudited Semi-Annual Report

271 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 1,200,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 1,367, ,300,000 Novelis Inc., senior note, 8.375%, 12/15/17 CAN USD 1,350, ,300,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.50%, 05/15/18 USA USD 1,332, ,300,000 VTR Finance BV, senior secured note, 144A, 6.875%, 01/15/24 LUX USD 1,329, ,300,000 Omnicare Inc., senior note, 4.75%, 12/01/22 USA USD 1,322, ,500,000 Visant Corp., senior note, 10.00%, 10/01/17 USA USD 1,320, ,200,000 Sprint Nextel Corp., senior note, 8.375%, 08/15/17 USA USD 1,299, ,300,000 Florida East Coast Holdings Corp., secured note, first lien, 144A, 6.75%, 05/01/19 USA USD 1,290, ,164,000 Calpine Corp., senior secured bond, 144A, 7.875%, 01/15/23 USA USD 1,289, ,200,000 Hertz Corp., senior note, 6.75%, 04/15/19 USA USD 1,242, ,100,000 General Electric Capital Corp., senior note, 4.65%, 10/17/21 USA USD 1,241, ,100,000 Frontier Communications Corp., senior note, 8.50%, 04/15/20 USA USD 1,232, ,400,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 1,204, ,300,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior bond, Reg S, 6.51%, 03/07/22 RUS USD 1,174, ,100,000 HCA Inc., senior secured bond, first lien, 5.25%, 04/15/25 USA USD 1,150, ,100,000 Videotron Ltd., senior bond, 144A, 5.375%, 06/15/24 CAN USD 1,124, ,500,000 Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 06/21/19 USA USD 1,121, ,200,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 1,101, ,000,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 1,098, ,000,000 CIT Group Inc., senior note, 144A, 6.625%, 04/01/18 USA USD 1,088, ,000,000 Ally Financial Inc., senior note, 6.25%, 12/01/17 USA USD 1,082, ,000,000 Novelis Inc., senior note, 8.75%, 12/15/20 CAN USD 1,065, ,000,000 CGG SA, senior note, Reg S, 5.875%, 05/15/20 FRA EUR 1,057, ,000,000 DISH DBS Corp., senior note, 7.125%, 02/01/16 USA USD 1,053, ,000,000 EDF SA, junior sub. bond, 144A, 5.625% to 01/22/24, FRN thereafter, Perpetual FRA USD 1,052, ,000,000 CenturyLink Inc., senior note, 5.80%, 03/15/22 USA USD 1,042, ,000,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 9.00%, 04/15/19 USA USD 1,040, ,000,000 Citigroup Inc., sub. note, 4.05%, 07/30/22 USA USD 1,036, ,500,000 Chaparral Energy Inc., senior note, 8.25%, 09/01/21 USA USD 1,035, ,000 HCA Inc., senior note, 7.50%, 02/15/22 USA USD 1,030, ,000,000 HCA Inc., senior secured note, first lien, 5.00%, 03/15/24 USA USD 1,030, ,000,000 Crown Castle International Corp., senior bond, 5.25%, 01/15/23 USA USD 1,025, ,000,000 Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp., senior note, 6.50%, 05/15/21 USA USD 1,015, ,000 Frontier Communications Corp., senior note, 8.75%, 04/15/22 USA USD 1,010, ,000,000 CONSOL Energy Inc., senior note, 6.375%, 03/01/21 USA USD 1,005, ,000,000 Te Healthcare Corp., senior note, 144A, 5.00%, 03/01/19 USA USD 1,003, ,000,000 JPMorgan Chase & Co., junior sub. note, X, 6.10% to 10/01/24, FRN thereafter, Perpetual USA USD 1,000, ,500,000 Energy XXI Gulf Coast Inc., senior note, 9.25%, 12/15/17 USA USD 997, ,000,000 Ineos Group Holdings SA, senior note, 144A, 6.125%, 08/15/18 CHE USD 965, ,000 Univision Communications Inc., senior secured note, first lien, 144A, 7.875%, 11/01/20 USA USD 963, ,000 Ardagh Packaging Finance PLC, senior note, 144A, 9.125%, 10/15/20 LUX USD 960, ,000,000 Ineos Group Holdings SA, senior note, 144A, 5.875%, 02/15/19 CHE USD 950, ,000 Unitymedia KabelBW GmbH, senior secured note, Reg S, 9.50%, 03/15/21 DEU EUR 949, ,000,000 Post Holdings Inc., senior note, 144A, 6.00%, 12/15/22 USA USD 941, ,000,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 935, ,000 CHC Helicopter SA, senior note, 9.375%, 06/01/21 CAN USD 921, ,000 Play Finance 1 SA, senior note, Reg S, 6.50%, 08/01/19 LUX EUR 899, ,000 Sprint Corp., senior bond, 7.875%, 09/15/23 USA USD 892, ,000 MGM Resorts International, senior note, 7.75%, 03/15/22 USA USD 888, ,000 JPMorgan Chase & Co., junior sub. bond, V, 5.00% to 07/30/19, FRN thereafter, Perpetual USA USD 885, ,000 Access Midstream Partner LP/ACMP Finance Corp., senior note, 6.125%, 07/15/22 USA USD 854, ,000 CenturyLink Inc., senior note, 6.00%, 04/01/17 USA USD 853, ,000 CIT Group Inc., senior note, 5.375%, 05/15/20 USA USD 848, ,000 Ineos Group Holdings SA, senior note, Reg S, 6.50%, 08/15/18 CHE EUR 838, ,000 Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp., senior note, 8.375%, 06/01/20 USA USD 836, ,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior note, 7.25%, 10/30/17 USA USD 833, ,000,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 09/15/21 USA USD 815, ,000 T-Mobile USA Inc., senior note, 6.125%, 01/15/22 USA USD 815, ,000 Ally Financial Inc., senior bond, 5.125%, 09/30/24 USA USD 814, ,000 Cemex Finance LLC, senior secured note, 144A, 9.375%, 10/12/22 MEX USD 784, ,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 774, ,000 HCA Inc., senior secured note, first lien, 5.875%, 03/15/22 USA USD 768, ,000 UPCB Finance II Ltd., senior secured note, Reg S, 6.375%, 07/01/20 NLD EUR 764, ,000,000 CGG SA, senior note, 6.875%, 01/15/22 FRA USD 761, ,000 Sprint Nextel Corp., senior note, 144A, 7.00%, 03/01/20 USA USD 759, ,000 Calpine Corp., senior secured bond, first lien, 144A, 5.875%, 01/15/24 USA USD 749, ,000 Barry Callebaut Services SA, senior note, 144A, 5.50%, 06/15/23 BEL USD 747, ,000 KB Home, senior bond, 7.50%, 09/15/22 USA USD 745, Unaudited Semi-Annual Report 269

272 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 649,000 First Data Corp., senior note, 11.25%, 01/15/21 USA USD 738, ,000 Univision Communications Inc., senior secured note, 144A, 6.875%, 05/15/19 USA USD 730, ,000 AmSurg Corp., senior note, 144A, 5.625%, 07/15/22 USA USD 721, ,000 Reynolds Group Issuer Inc./LLC/SA, first lien, 5.75%, 10/15/20 USA USD 721, ,000 Alere Inc., senior sub. note, 6.50%, 06/15/20 USA USD 708, ,000 TransDigm Inc., senior sub. bond, 6.50%, 07/15/24 USA USD 707, ,000 TransDigm Inc., senior sub. note, 6.00%, 07/15/22 USA USD 701, ,000 Halcon Resources Corp., senior note, 9.75%, 07/15/20 USA USD 679, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 9.00%, 02/15/20 USA USD 670, ,000,000 Chaparral Energy Inc., senior note, 7.625%, 11/15/22 USA USD 665, ,000 Kinder Morgan Inc., senior note, 7.00%, 06/15/17 USA USD 664, ,000 CenturyLink Inc., senior note, 6.45%, 06/15/21 USA USD 646, ,000 HCA Holdings Inc., senior note, 7.75%, 05/15/21 USA USD 642, ,000 Ineos Finance PLC, senior secured note, 144A, 7.50%, 05/01/20 CHE USD 631, ,000 Pinnacle Entertainment Inc., senior note, 6.375%, 08/01/21 USA USD 621, ,000 Mobile Challenger Intermediate Group SA, senior secured note, Reg S, PIK, 8.75%, 03/15/19 CHE EUR 615, ,000 AECOM Technology Corp., senior note, 144A, 5.75%, 10/15/22 USA USD 615, ,000 Smithfield Foods Inc., senior note, 144A, 5.875%, 08/01/21 USA USD 612, ,000 Florida East Coast Holdings Corp., senior note, 144A, 9.75%, 05/01/20 USA USD 600, ,000 Halcon Resources Corp., senior note, 9.25%, 02/15/22 USA USD 594, ,000 Ineos Group Holdings SA, senior note, Reg S, 5.75%, 02/15/19 CHE EUR 585, ,000 Univision Communications Inc., senior secured bond, first lien, 144A, 6.75%, 09/15/22 USA USD 583, ,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior note, Reg S, 3.85%, 02/06/20 RUS USD 579, ,000 Peabody Energy Corp., senior note, 6.00%, 11/15/18 USA USD 547, ,000 UPCB Finance VI Ltd., senior secured note, first lien, 144A, 6.875%, 01/15/22 NLD USD 544, ,000 Intelsat Jackson Holdings SA, senior note, 7.50%, 04/01/21 LUX USD 536, ,000 Kinder Morgan Inc., senior secured bond, first lien, 144A, 5.625%, 11/15/23 USA USD 536, ,000 UPC Holding BV, senior note, Reg S, 6.75%, 03/15/23 NLD EUR 530, ,000 Virgin Media Finance PLC, senior bond, 144A, 6.375%, 04/15/23 GBR USD 526, ,000 UPC Holding BV, senior note, Reg S, 6.375%, 09/15/22 NLD EUR 524, ,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 523, ,000 Pinnacle Entertainment Inc., senior sub. note, 7.75%, 04/01/22 USA USD 522, ,000 Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22 USA USD 517, ,000 CommScope Holdings Co. Inc., senior note, 144A, PIK, 6.625%, 06/01/20 USA USD 517, ,000 Peabody Energy Corp., senior note, 7.375%, 11/01/16 USA USD 516, ,000 T-Mobile USA Inc., senior bond, 6.50%, 01/15/24 USA USD 513, ,000 Frontier Communications Corp., senior note, 7.125%, 01/15/23 USA USD 511, ,000 Royal Bank of Scotland Group PLC, sub. note, 5.125%, 05/28/24 GBR USD 509, ,000 Freeport-McMoran Oil & Gas LLC/FCX Oil & Gas Inc., senior note, 6.875%, 02/15/23 USA USD 506, ,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.75%, 01/31/21 LUX USD 494, ,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.00%, 10/01/22 USA USD 475, ,000 Digicel Group Ltd., senior note, 144A, 7.125%, 04/01/22 BMU USD 472, ,000 Cablevision Systems Corp., senior note, 8.625%, 09/15/17 USA USD 446, ,000 Linn Energy LLC/Finance Corp., senior note, 8.625%, 04/15/20 USA USD 437, ,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior note, 8.125%, 04/30/20 USA USD 422, ,000 Neuberger Berman Group LLC/Finance Corp., senior note, 144A, 5.625%, 03/15/20 USA USD 420, ,000 M/I Homes Inc., senior note, 8.625%, 11/15/18 USA USD 417, ,000 CHS/Community Health Systems Inc., senior secured note, first lien, 5.125%, 08/15/18 USA USD 415, ,000 JBS USA LLC/Finance Inc., senior note, 144A, 7.25%, 06/01/21 USA USD 414, ,000 AECOM Technology Corp., senior bond, 144A, 5.875%, 10/15/24 USA USD 410, ,000 inventiv Health Inc., senior secured note, 144A, 9.00%, 01/15/18 USA USD 410, ,444 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 405, ,000 Gant Co. Inc., senior bond, 144A, 5.50%, 09/15/24 USA USD 402, ,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.625%, 04/15/23 DEU EUR 395, ,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.25%, 01/31/19 LUX USD 392, ,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.00%, 04/01/17 AUS USD 383, ,000 Abengoa Finance SAU, senior note, 144A, 7.75%, 02/01/20 ESP USD 357, ,400,000 Quicksilver Resources Inc., senior note, 9.125%, 08/15/19 USA USD 357, ,000 GMAC Inc., sub. note, 8.00%, 12/31/18 USA USD 341, ,000 CSC Holdings LLC, senior bond, 7.625%, 07/15/18 USA USD 338, ,000 Sealed Air Corp., senior note, 144A, 8.375%, 09/15/21 USA USD 336, ,000 Energy XXI Gulf Coast Inc., senior note, 7.50%, 12/15/21 USA USD 327, Unaudited Semi-Annual Report

273 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 400,000 Chaparral Energy Inc., senior note, 9.875%, 10/01/20 USA USD 274, ,000 Edcon Holdings Pty. Ltd., senior secured note, Reg S, %, 06/30/19 ZAF EUR 272, ,706 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 7.00%, 11/15/20 LUX USD 268, ,000 eaccess Ltd., senior note, Reg S, 8.375%, 04/01/18 JPN EUR 255, ,000 Algeco Scotsman Global Finance PLC, secured note, Reg S, 9.00%, 10/15/18 GBR EUR 246, ,000 First Data Corp., senior bond, %, 01/15/21 USA USD 238, ,000 CSC Holdings LLC, senior note, 8.625%, 02/15/19 USA USD 233, ,000 Kinder Morgan Inc., senior note, 6.50%, 09/15/20 USA USD 226, ,000 Calpine Corp., senior secured note, first lien, 144A, 6.00%, 01/15/22 USA USD 214, ,000 Ineos Finance PLC, senior secured note, 144A, 8.375%, 02/15/19 CHE USD 213, ,000 MGM Resorts International, senior note, 6.75%, 10/01/20 USA USD 210, ,000 UPCB Finance III Ltd., senior secured note, 144A, 6.625%, 07/01/20 NLD USD 210, ,000 Kinder Morgan Inc., senior secured note, 144A, 5.00%, 02/15/21 USA USD 208, ,000 Reynolds Group Issuer Inc./LLC/SA, senior secured note, first lien, 7.125%, 04/15/19 USA USD 207, ,000 Peabody Energy Corp., senior note, 6.50%, 09/15/20 USA USD 174, ,000 CGG SA, senior note, 7.75%, 05/15/17 FRA USD 172, ,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 05/15/19 USA USD 172, ,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 9.875%, 08/15/19 USA USD 106, ,000 Reynolds Group Issuer Inc./LLC/SA, senior secured note, 7.875%, 08/15/19 USA USD 105, ,000 CIT Group Inc., senior note, 5.25%, 03/15/18 USA USD 104, ,000 Chesapeake Energy Corp., senior note, 7.25%, 12/15/18 USA USD 55, ,000 HCA Inc., senior note, 6.50%, 02/15/16 USA USD 52, ,567, Government and Municipal Bonds 32,210,000 Government of Singapore, senior note, 1.125%, 04/01/16 SGP SGD 24,475, ,500,000 Government of Malaysia, senior note, 3.172%, 07/15/16 MYS MYR 21,474, ,368,083 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 14,187, ,500,000 Government of Portugal, Reg S, 5.125%, 10/15/24 PRT USD 13,180, ,564,000,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 12,614, ,000,000 Government of Poland, 4.75%, 10/25/16 POL PLN 11,297, ,000,000 U.S. Treasury Bond, 6.25%, 08/15/23 USA USD 10,655, ,274,200 Government of Mexico, 7.25%, 12/15/16 MEX MXN 9,229, ,216,090 Government of Mexico, 6.25%, 06/16/16 MEX MXN 8,563, ,000,000 U.S. Treasury Note, 3.75%, 11/15/18 USA USD 7,627, ,000 Nota Do Tesouro Nacional, senior note, 10.00%, 01/01/19 BRA BRL 7,277, ,370,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 7,195, ,400 Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 6,595, ,665,000 Government of Serbia, senior note, Reg S, 4.875%, 02/25/20 SER USD 5,685, ,714,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 5,627, ,500,000 New York State Urban Development Corp. Revenue, State Personal Income Tax, General Purpose, Series C, 5.00%, 03/15/29 USA USD 5,299, ,490 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 5,153, ,063,180,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 4,834, ,400,000 U.S. Treasury Note, 3.875%, 05/15/18 USA USD 4,782, ,440,000 Government of the Philippines, senior bond, 7.00%, 01/27/16 PHL PHP 4,737, ,440,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 4,393, ,980,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 4,320, ,840,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 4,316, ,750,000 Minnesota State GO, Various Purpose, Refunding, Series F, 4.00%, 10/01/24 USA USD 4,258, ,000,000 Florida Hurricane Catastrophe Fund Finance Corp. Revenue, Series A, 2.995%, 07/01/20 USA USD 4,051, ,565,000 New York City Municipal Water Finance Authority Water and Sewer System Revenue, Second General Resolution, Fiscal 2014, Refunding, Series BB, 5.00%, 06/15/46 USA USD 4,027, ,500,000 Government of Hungary, senior note, 6.25%, 01/29/20 HUN USD 3,940, ,140,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 3,781, ,515,000 Government of Poland, Strip, 01/25/16 POL PLN 3,747, ,180,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 3,576, ,200,000 Massachusetts State GO, Consolidated Loan of 2014, Series A, 4.50%, 12/01/43 USA USD 3,453, ,600,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 3,346, ,860,000 Government of Hungary, senior note, 6.375%, 03/29/21 HUN USD 3,273, ,900,000 Nassau County GO, General Improvement Bonds, Series B, 5.00%, 04/01/43 USA USD 3,197, ,700,000 Nassau County GO, General Improvement Bonds, Series B, 5.00%, 04/01/39 USA USD 3,014, ,850,000 Puerto Rico Electric Power Authority Power Revenue, Series A, 6.75%, 07/01/36 USA USD 2,961, ,316,811 Government of Uruguay, senior bond, Index Linked, 5.00%, 09/14/18 URY UYU 2,939, ,630,000 Illinois State GO, 5.877%, 03/01/19 USA USD 2,906, ,655,000 California State GO, Various Purpose, Refunding, 5.25%, 03/01/38 USA USD 2,888, Unaudited Semi-Annual Report 271

274 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 9,700,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 2,699, ,300,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 2,394, ,810,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, first subordinate, Series A, 6.50%, 08/01/44 USA USD 2,255, ,935,000 Arkansas State GO, Four-Lane Highway Construction and Improvement Bonds, 3.25%, 06/15/22 USA USD 2,096, ,900,000 U.S. Treasury Note, 3.625%, 02/15/21 USA USD 2,092, ,090,000 Government of Poland, 5.00%, 04/25/16 POL PLN 2,085, ,953,870 U.S. Treasury Note, Index Linked, 1.125%, 01/15/21 USA USD 2,034, ,900,000 U.S. Treasury Note, 2.375%, 03/31/16 USA USD 1,946, ,245,000 California State GO, Various Purpose, 7.60%, 11/01/40 USA USD 1,943, ,575,000 South Carolina State Public Service Authority Revenue, Refunding, Series B, 5.00%, 12/01/38 USA USD 1,769, ,160,000 Government of Ireland, 4.50%, 04/18/20 IRL EUR 1,692, ,000,000 Puerto Rico Electric Power Authority Power Revenue, Series XX, 5.25%, 07/01/40 USA USD 1,518, ,000 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 1,501, ,920,000,000 Government of Indonesia, FR61, 7.00%, 05/15/22 IDN IDR 1,318, ,100,000 Illinois State GO, Build America Bonds, 7.35%, 07/01/35 USA USD 1,294, ,980,000 Government of Ukraine, senior note, Reg S, 7.95%, 02/23/21 UKR USD 1,204, ,000,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 1,179, ,000 Government of Ireland, 5.90%, 10/18/19 IRL EUR 1,161, ,900,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 1,157, ,000,000 Evansville Local Public Improvement Bond Bank Revenue, Sewage Works Project, Series A, 5.00%, 07/01/36 USA USD 1,134, ,500,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, first subordinate, Series A, 5.75%, 08/01/37 USA USD 1,117, ,500,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Refunding, Series B, 6.05%, 08/01/38 USA USD 1,095, ,050,000 Government of Hungary, 4.125%, 02/19/18 HUN USD 1,090, ,000,000 U.S. Treasury Note, 3.125%, 05/15/19 USA USD 1,066, ,000 U.S. Treasury Note, 3.50%, 05/15/20 USA USD 981, ,000 California State GO, Build America Bonds, Various Purpose, 7.625%, 03/01/40 USA USD 921, ,800 Government of Mexico, 7.75%, 12/14/17 MEX MXN 910, ,220,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Refunding, Series B, 6.05%, 08/01/37 USA USD 892, ,000 New York City HDC Revenue, Series B1, 5.00%, 07/01/33 USA USD 858, ,000 New Jersey EDA Revenue, School Facilities Construction, Refunding, Series NN, 5.00%, 03/01/30 USA USD 844, ,062 U.S. Treasury Note, Index Linked, 0.125%, 04/15/16 USA USD 793, ,482 U.S. Treasury Note, Index Linked, 0.625%, 07/15/21 USA USD 748, ,470,000,000 Government of Indonesia, FR34, 12.80%, 06/15/21 IDN IDR 650, ,745,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Refunding, Series A, NATL RE, FGIC Insured, zero cpn., 08/01/45 USA USD 537, ,381,000,000 Government of Indonesia, FR40, 11.00%, 09/15/25 IDN IDR 525, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 485, ,760,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 477, ,800,000,000 Government of Indonesia, FR36, 11.50%, 09/15/19 IDN IDR 444, ,160,000 Government of Poland, 5.75%, 09/23/22 POL PLN 405, ,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Capital Appreciation, Series A, zero cpn., 08/01/25 USA USD 392, ,000 U.S. Treasury Bond, 9.00%, 11/15/18 USA USD 386, ,270,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 357, ,000 California State GO, Various Purpose, Refunding, 5.00%, 06/01/37 USA USD 324, ,000 U.S. Treasury Note, 3.125%, 10/31/16 USA USD 313, ,000 Government of Ireland, senior bond, 4.50%, 10/18/18 IRL EUR 313, ,000 Puerto Rico Sales Tax FICO Revenue, Capital Appreciation, Refunding, Series A, zero cpn., 08/01/26 USA USD 308, ,910,000 Uruguay Notas del Tesoro, 9.50%, 01/27/16 URY UYU 284, ,000 California State GO, Various Purpose, 5.25%, 11/01/40 USA USD 259, ,000 U.S. Treasury Bond, 8.125%, 08/15/19 USA USD 258, ,776,000,000 Government of Indonesia, FR47, 10.00%, 02/15/28 IDN IDR 257, ,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 195, ,126,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 194, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/17 BRA BRL 189, ,800,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 177, ,000 U.S. Treasury Note, 4.75%, 08/15/17 USA USD 142, ,330,000 Government of the Philippines, senior bond, 9.125%, 09/04/16 PHL PHP 128, ,000 California State GO, Various Purpose, Refunding, NATL Insured, 4.50%, 12/01/32 USA USD 125, ,000 California State GO, Various Purpose, Refunding, Series 1, AGMC Insured, 4.75%, 09/01/31 USA USD 118, ,278,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 118, ,132,000,000 Government of Indonesia, FR35, 12.90%, 06/15/22 IDN IDR 117, ,000 U.S. Treasury Bond, 7.25%, 08/15/22 USA USD 110, ,000,000,000 Government of Indonesia, FR37, 12.00%, 09/15/26 IDN IDR 104, Unaudited Semi-Annual Report

275 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 1,100,000,000 Government of Indonesia, FR46, 9.50%, 07/15/23 IDN IDR 97, ,000 California State GO, Various Purpose, 6.00%, 11/01/39 USA USD 78, ,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 08/01/46 USA USD 67, ,110,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 63, ,530,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 44, ,000,000 Government of Indonesia, FR39, 11.75%, 08/15/23 IDN IDR 23, ,210,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 17, ,100,000 Government of Sri Lanka, A, 6.40%, 08/01/16 LKA LKR 15, ,310,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 10, ,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 4, ,824, Securities Maturing Within One Year 16,945,220,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 15,590, ,177,180 Government of Mexico, 8.00%, 12/17/15 MEX MXN 15,423, ,212,700,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 9,346, ,000,000 Government of Sweden, 4.50%, 08/12/15 SWE SEK 8,818, ,107,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 7,828, ,580,000 Government of Canada, 1.00%, 05/01/15 CAN CAD 6,528, ,891,040,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 6,303, ,036,600,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 4,117, ,315,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 4,105, ,076,800,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 3,737, ,785,000 Government of Poland, 6.25%, 10/24/15 POL PLN 3,448, ,425,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 3,262, ,490,000 Uruguay Notas del Tesoro, 10.25%, 08/22/15 URY UYU 3,073, ,025,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 2,868, ,324,000 Uruguay Treasury Bill, Strip, 08/20/15 URY UYU 2,656, ,000,000 Government of Canada, 1.00%, 02/01/15 CAN CAD 2,583, ,710,900,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 2,488, ,531,000 Government of Poland, 5.50%, 04/25/15 POL PLN 2,153, ,400,000 MGM Resorts International, senior note, 6.625%, 07/15/15 USA USD 1,428, ,800,000 Government of Poland, Strip, 07/25/15 POL PLN 1,343, ,500,000 Government of Canada, 1.50%, 08/01/15 CAN CAD 1,295, ,288,280,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 1,183, ,010 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 964, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 891, ,336,442 Uruguay Notas del Tesoro, Index Linked, 4.00%, 06/14/15 URY UYU 834, ,610,000 Uruguay Notas del Tesoro, 10.50%, 03/21/15 URY UYU 513, ,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior note, Reg S, 5.092%, 11/29/15 RUS USD 491, ,000 U.S. Treasury Note, 4.125%, 05/15/15 USA USD 405, ,740,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 141, ,000,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 117, ,190 Government of Mexico, 6.00%, 06/18/15 MEX MXN 70, ,000 Uruguay Treasury Bill, Strip, 07/02/15 URY UYU 20, ,370,000 Government of Sri Lanka, A, 6.50%, 07/15/15 LKA LKR 18, ,000 Government of Sri Lanka, A, 11.75%, 03/15/15 LKA LKR ,056, TOTAL BONDS 1,139,824, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 1,140,206, Unaudited Semi-Annual Report 273

276 Franklin Strategic Income Fund Schedule of Investments as of December 31, 2014 (continued) face TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 5,000,000 EDF SA, sub. note, 144A, 5.25% to 01/29/23, FRN thereafter, Perpetual POL USD 5,128, ,500,000 NewPage Corp., Escrow Account ** USA USD ,128, Government and Municipal Bonds 12,150,000 U.S. Treasury Note, 2.00%, 05/31/21 USA USD 12,205, Securities Maturing Within One Year 150,000 Fontainebleau Las Vegas, senior secured note, first lien, 144A, 11.00%, 06/15/15 * USA USD 1, TOTAL BONDS 17,335, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 17,335, TOTAL INVESTMENTS 1,206,307, * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, 2014 Income may be received in additional securities and/or cash ** These securities are submitted to a Fair Valuation 274 Unaudited Semi-Annual Report

277 Franklin Technology Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 190,000 DigitalGlobe Inc. USA USD 5,884, Auto Components 125,000 BorgWarner Inc. USA USD 6,868, Communications Equipment 1,200,000 Ericsson, B, ADR SWE USD 14,520, ,000 Palo Alto Networks Inc. USA USD 14,095, ,000 QUALCOMM Inc. USA USD 11,149, ,000 JDS Uniphase Corp. USA USD 9,741, ,000 Cisco Systems Inc. USA USD 9,735, ,241, Diversified Financial Services 60,000 Intercontinental Exchange Inc. USA USD 13,157, Electrical Equipment 50,500 Acuity Brands Inc. USA USD 7,073, Health Care Equipment & Supplies 85,000 DexCom Inc. USA USD 4,679, Inter & Catalog Retail 67,000 Amazon.com Inc. USA USD 20,793, ,300 The Priceline Group Inc. USA USD 16,305, ,000 Netflix Inc. USA USD 9,223, ,006 Shutterfly Inc. USA USD 3,335, ,657, Inter Software & Services 252,000 Facebook Inc., A USA USD 19,661, ,000 Google Inc., C USA USD 18,424, ,723 Equinix Inc. USA USD 17,622, ,000 LinkedIn Corp., A USA USD 14,012, ,000 Alibaba Group Holding Ltd., ADR CHN USD 10,394, ,000 Yahoo! Inc. USA USD 10,203, ,000 Google Inc., A USA USD 7,959, ,000 Twitter Inc. USA USD 7,174, ,000 Demandware Inc. USA USD 5,293, ,000 HomeAway Inc. USA USD 5,211, ,500 Pandora Media Inc. USA USD 4,502, ,000 Baidu Inc., ADR CHN USD 2,507, ,965, IT Services 70,500 Visa Inc., A USA USD 18,485, ,000 MasterCard Inc., A USA USD 17,318, ,000 Cognizant Technology Solutions Corp., A USA USD 16,956, ,000 FleetCor Technologies Inc. USA USD 16,952, ,000 Fidelity National Information Services Inc. USA USD 16,358, ,500 Alliance Data Systems Corp. USA USD 16,161, ,233, Life Sciences Tools & Services 20,000 Illumina Inc. USA USD 3,691, Media 95,000 The Walt Disney Co. USA USD 8,948, ,000 Global Eagle Entertainment Inc. USA USD 2,041, ,989, Professional Services 116,000 IHS Inc., A USA USD 13,210, Real Estate Investment Trust (REIT) 172,000 American Tower Corp. USA USD 17,002, Semiconductors & Semiconductor Equipment 845,000 Applied Materials Inc. USA USD 21,057, ,000 Avago Technologies Ltd. SGP USD 16,094, ,000 Texas Instruments Inc. USA USD 15,825, ,000 NXP Semiconductors NV NLD USD 15,280, ,500 Lam Research Corp. USA USD 15,193, ,500 Maxim Integrated Products Inc. USA USD 13,624, ,000 Xilinx Inc. USA USD 13,073, ,000 Analog Devices Inc. USA USD 12,769, ,000 ARM Holdings PLC, ADR GBR USD 11,806, ,330 Semtech Corp. USA USD 10,320, Unaudited Semi-Annual Report 275

278 Franklin Technology Fund Schedule of Investments as of December 31, 2014 (continued) face Semiconductors & Semiconductor Equipment (continued) 340,000 Freescale Semiconductor Ltd. USA USD 8,578, ,630 Cavium Inc. USA USD 8,322, ,115,000 Lattice Semiconductor Corp. USA USD 7,682, ,000 Intersil Corp., A USA USD 6,511, ,000 Intel Corp. USA USD 4,572, ,712, Software 310,000 Salesforce.com Inc. USA USD 18,386, ,000 Electronic Arts Inc. USA USD 18,335, ,000 Red Hat Inc. USA USD 17,423, ,500 Adobe Systems Inc. USA USD 16,539, ,000 VMware Inc., A USA USD 14,853, ,000 ANSYS Inc. USA USD 13,612, ,500 Forti Inc. USA USD 13,567, ,000 Microsoft Corp. USA USD 12,773, ,000 Guidewire Software Inc. USA USD 12,151, ,000 NetSuite Inc. USA USD 9,825, ,000 Workday Inc. USA USD 9,140, ,000 Activision Blizzard Inc. USA USD 8,261, ,000 ServiceNow Inc. USA USD 6,852, ,000 BroadSoft Inc. USA USD 5,513, ,029 Bottomline Technologies Inc. USA USD 5,435, ,000 Mobileye NV USA USD 2,758, ,000 Splunk Inc. USA USD 2,063, ,000 Mobile Iron Inc. USA USD 1,992, ,000 A10 Networks Inc. USA USD 654, ,139, Technology Hardware, Storage & Peripherals 171,000 SanDisk Corp. USA USD 16,754, ,000 Western Digital Corp. USA USD 16,715, ,000 Apple Inc. USA USD 15,011, ,000 Stratasys Ltd. USA USD 11,552, ,000 EMC Corp. USA USD 8,922, ,956, Wireless Telecommunication Services 80,000 SBA Communications Corp. USA USD 8,860, TOTAL SHARES 865,323, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 865,323, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Securities Maturing Within One Year 15,000,000 U.S. Treasury Bill, 0.00%, 01/02/15 USA USD 15,000, TOTAL BONDS 15,000, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 15,000, TOTAL INVESTMENTS 880,323, Unaudited Semi-Annual Report

279 Franklin U.S. Dollar Liquid Reserve Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Securities Maturing Within One Year 26,700,000 FNMA, 0.00%, 02/17/15 USA USD 26,699, ,896,000 FNMA, 0.00%, 01/02/15 USA USD 25,896, ,000,000 FHLB, 0.00%, 01/02/15 USA USD 25,000, ,000,000 FHLB, 0.00%, 01/06/15 USA USD 19,999, ,000,000 International Finance Corp., 0.00%, 01/07/15 SP USD 19,999, ,000,000 Exxon Mobil Corp., zero cpn., 01/05/15 USA USD 19,999, ,000,000 Johnson & Johnson, zero cpn., 01/05/15 USA USD 14,999, ,000,000 Total Capital Canada Ltd., zero cpn., 01/15/15 CAN USD 14,999, ,960,000 International Finance Corp., 0.00%, 01/26/15 SP USD 14,940, ,000,000 Province of Ontario, zero cpn., 01/06/15 USA USD 9,999, ,000,000 Johnson & Johnson, zero cpn., 01/12/15 USA USD 9,999, ,500,000 KFW, zero cpn., 01/14/15 DEU USD 7,499, ,300,000 FHLB, 0.00%, 01/09/15 USA USD 7,299, ,300,000 Exxon Mobil Corp., zero cpn., 01/27/15 USA USD 5,299, ,018,000 Province of Ontario, zero cpn., 01/07/15 USA USD 5,017, ,000,000 International Bank for Reconstruction and Development, 0.00%, 01/08/15 SP USD 4,999, ,000,000 General Electric Capital Corp., zero cpn., 03/11/15 USA USD 4,998, ,000,000 FHLB, 0.00%, 01/30/15 USA USD 3,999, ,480,000 FNMA, 0.00%, 01/05/15 USA USD 3,479, ,785,000 FHLMC, 0.00%, 01/07/15 USA USD 2,784, ,750,000 FNMA, 0.00%, 01/20/15 USA USD 2,749, ,600,000 FHLB, 0.00%, 01/07/15 USA USD 2,599, ,500,000 FHLMC, 0.00%, 03/17/15 USA USD 2,499, ,346,000 Procter & Gamble Co., zero cpn., 01/29/15 USA USD 2,345, ,030,000 Microsoft Corp., zero cpn., 02/02/15 USA USD 2,029, ,000,000 International Finance Corp., 0.00%, 01/02/15 SP USD 1,999, ,700,000 FFCB, 0.00%, 03/31/15 USA USD 1,699, ,200,000 FNMA, 0.00%, 03/16/15 USA USD 1,199, ,000,000 FHLMC, 0.00%, 03/09/15 USA USD 999, ,000,000 FNMA, 0.00%, 04/27/15 USA USD 999, ,040, TOTAL BONDS 267,040, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 267,040, TOTAL INVESTMENTS 267,040, Unaudited Semi-Annual Report 277

280 Franklin U.S. Equity Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Discretionary 568,900 Twenty-First Century Fox Inc., B USA USD 20,986, ,872 The Walt Disney Co. USA USD 16,471, ,600 NIKE Inc., B USA USD 16,307, ,120 BorgWarner Inc. USA USD 10,062, ,400 Altice SA LUX EUR 8,401, ,500 Target Corp. USA USD 1,328, ,557, Consumer Staples 167,834 CVS Health Corp. USA USD 16,164, Energy 176,150 Schlumberger Ltd. USA USD 15,044, ,300 Anadarko Petroleum Corp. USA USD 12,977, ,200 Marathon Oil Corp. USA USD 10,727, ,100 Exxon Mobil Corp. USA USD 2,875, ,400 Halliburton Co. USA USD 2,375, ,500 Chevron Corp. USA USD 2,299, ,500 Oasis Petroleum Inc. USA USD 537, ,837, Financials 699,100 The Hartford Financial Services Group Inc. USA USD 29,145, ,700 The Charles Schwab Corp. USA USD 20,339, ,900 MetLife Inc. USA USD 18,060, ,300 LPL Financial Holdings Inc. USA USD 16,897, ,370 JPMorgan Chase & Co. USA USD 16,544, ,600 Discover Financial Services USA USD 15,625, ,810 Citigroup Inc. USA USD 14,869, ,600 CBRE Group Inc. USA USD 9,953, ,151 BlackRock Inc. USA USD 8,992, ,429, Health Care 270,200 Valeant Pharmaceuticals International Inc. CAN USD 38,668, ,211 Actavis PLC USA USD 28,884, ,300 Allergan Inc. USA USD 10,268, ,575 Zoetis Inc. USA USD 4,499, ,443 Pfizer Inc. USA USD 2,381, ,870 Johnson & Johnson USA USD 2,286, ,600 Express Scripts Holding Co. USA USD 2,082, ,071, Industrials 506,700 The ADT Corp. USA USD 18,357, ,400 Genesee & Wyoming Inc. USA USD 17,930, ,800 Precision Castparts Corp. USA USD 7,900, ,700 FedEx Corp. USA USD 7,762, ,920 United Technologies Corp. USA USD 4,360, ,700 The Boeing Co. USA USD 3,600, ,912, Information Technology 97,716 Equinix Inc. USA USD 22,155, ,300 Adobe Systems Inc. USA USD 20,595, ,592 QUALCOMM Inc. USA USD 20,113, ,395 Microsoft Corp. USA USD 19,666, ,100 MasterCard Inc., A USA USD 16,206, ,600 Motorola Solutions Inc. USA USD 15,804, ,700 Maxim Integrated Products Inc. USA USD 11,814, ,280 Google Inc., C USA USD 9,096, ,980 Google Inc., A USA USD 9,010, ,560 Visa Inc., A USA USD 6,964, ,100 Oracle Corp. USA USD 2,522, ,550 Apple Inc. USA USD 1,274, ,224, Unaudited Semi-Annual Report

281 Franklin U.S. Equity Fund Schedule of Investments as of December 31, 2014 (continued) face Materials 177,000 Agrium Inc. CAN USD 16,765, ,600 Axiall Corp. USA USD 13,828, ,400 LyondellBasell Industries NV, A USA USD 6,382, ,666 Cytec Industries Inc. USA USD 1,969, ,946, TOTAL SHARES 630,143, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 630,143, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Health Care 385,240 Roche Holding AG, ADR CHE USD 13,094, TOTAL SHARES 13,094, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 13,094, TOTAL INVESTMENTS 643,237, Unaudited Semi-Annual Report 279

282 Franklin U.S. Focus Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Discretionary 29,670 Twenty-First Century Fox Inc., B USA USD 1,094, ,015 The Walt Disney Co. USA USD 943, ,540 NIKE Inc., B USA USD 917, ,430 BorgWarner Inc. USA USD 737, ,580 Altice SA LUX EUR 440, ,133, Consumer Staples 9,910 CVS Health Corp. USA USD 954, Energy 10,200 Schlumberger Ltd. USA USD 871, ,510 Anadarko Petroleum Corp. USA USD 702, ,310 Marathon Oil Corp. USA USD 574, ,147, Financials 38,270 The Hartford Financial Services Group Inc. USA USD 1,595, ,620 The Charles Schwab Corp. USA USD 1,165, ,125 MetLife Inc. USA USD 1,034, ,760 LPL Financial Holdings Inc. USA USD 969, ,465 Citigroup Inc. USA USD 945, ,720 JPMorgan Chase & Co. USA USD 921, ,520 CBRE Group Inc. USA USD 874, ,755 Discover Financial Services USA USD 835, ,100 BlackRock Inc. USA USD 750, ,091, Health Care 13,055 Valeant Pharmaceuticals International Inc. CAN USD 1,868, ,565 Actavis PLC USA USD 1,432, ,420 Allergan Inc. USA USD 939, ,320 Roche Holding AG CHE CHF 629, ,870, Industrials 11,610 Genesee & Wyoming Inc. USA USD 1,043, ,520 The ADT Corp. USA USD 997, ,025 FedEx Corp. USA USD 525, ,780 Precision Castparts Corp. USA USD 428, ,995, Information Technology 5,061 Equinix Inc. USA USD 1,147, ,030 MasterCard Inc., A USA USD 1,122, ,390 Adobe Systems Inc. USA USD 1,118, ,665 QUALCOMM Inc. USA USD 1,090, ,150 Microsoft Corp. USA USD 1,028, ,855 Motorola Solutions Inc. USA USD 862, ,275 Maxim Integrated Products Inc. USA USD 646, ,030 Google Inc., C USA USD 542, ,020 Google Inc., A USA USD 541, ,099, Materials 9,390 Agrium Inc. CAN USD 889, ,232 Axiall Corp. USA USD 816, ,355 LyondellBasell Industries NV, A USA USD 583, ,290, TOTAL SHARES 34,583, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 34,583, TOTAL INVESTMENTS 34,583, Unaudited Semi-Annual Report

283 Franklin U.S. Government Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 218,490,403 GNMA, II, SF, 3.50%, 08/20/42-12/20/44 USA USD 229,696, ,616,893 GNMA, II, SF, 4.00%, 05/20/40-09/20/44 USA USD 199,527, ,492,273 GNMA, II, SF, 4.50%, 05/20/33-10/20/44 USA USD 156,254, ,701,474 GNMA, SF, 5.00%, 07/15/33-05/15/40 USA USD 138,417, ,303,209 GNMA, SF, 4.50%, 03/15/39-04/15/41 USA USD 84,083, ,826,767 GNMA, SF, 6.00%, 10/15/23-01/15/38 USA USD 52,769, ,841,139 GNMA, SF, 5.50%, 11/15/28-11/15/39 USA USD 52,679, ,295,510 GNMA, II, SF, 5.00%, 10/20/32-06/20/44 USA USD 49,347, ,619,394 GNMA, II, SF, 5.50%, 05/20/34-01/20/36 USA USD 30,059, ,031,965 GNMA, II, SF, 6.00%, 06/20/34-07/20/39 USA USD 27,268, ,846,509 GNMA, SF, 4.00%, 11/15/40-09/15/41 USA USD 24,664, ,429,616 GNMA, SF, 6.50%, 07/15/23-07/15/38 USA USD 22,475, ,000,000 GNMA, II, SF, 3.00%, 01/01/43 USA USD 15,340, ,870,488 GNMA, II, SF, 6.50%, 03/20/27-10/20/38 USA USD 10,213, ,638,286 GNMA, SF, 7.00%, 03/15/22-09/15/32 USA USD 7,376, ,118,888 GNMA, SF, 3.50%, 04/15/43-05/15/43 USA USD 5,414, ,875,543 GNMA, II, SF, 7.00%, 05/20/26-03/20/33 USA USD 4,616, ,079,620 GNMA, SF, 7.50%, 02/15/17-08/15/33 USA USD 3,594, ,388,896 GNMA, SF, 8.00%, 11/15/16-12/15/30 USA USD 2,667, ,876,544 GNMA, II, SF, 7.50%, 12/20/17-09/20/32 USA USD 2,272, ,723,952 GNMA, 6.00%, 11/15/28-05/20/34 USA USD 1,935, ,983 GNMA, II, SF, 8.00%, 06/20/22-07/20/31 USA USD 1,137, ,323 GNMA, SF, 8.50%, 06/15/16-06/15/28 USA USD 770, ,667 GNMA, SF, 9.00%, 08/15/16-03/15/25 USA USD 691, ,822 GNMA, 6.50%, 04/20/34 USA USD 619, ,889 GNMA, 7.50%, 04/15/31 USA USD 342, ,870 GNMA, SF, 10.00%, 02/15/16-03/15/25 USA USD 275, ,206 GNMA, II, SF, 8.50%, 11/20/21-05/20/29 USA USD 238, ,677 GNMA, 8.00%, 05/20/17-01/15/31 USA USD 98, ,340 GNMA, SF, 9.50%, 10/15/16-06/15/25 USA USD 93, ,786 GNMA, II, SF, 9.50%, 05/20/16-07/20/25 USA USD 80, ,847 GNMA, II, 8.00%, 03/20/17-03/20/27 USA USD 56, ,958 GNMA, SF, 8.625%, 10/15/18 USA USD 34, ,742 GNMA, 9.50%, 10/15/18-11/15/21 USA USD 25, ,412 GNMA, II, 9.00%, 05/20/16-06/20/17 USA USD 23, ,688 GNMA, SF, 7.95%, 01/15/21 USA USD 18, ,410 GNMA, SF, 7.80%, 02/15/20 USA USD 18, ,850 GNMA, SF, 10.50%, 12/15/17-04/15/25 USA USD 14, ,099 GNMA, II, SF, 9.00%, 10/20/16 USA USD 7, ,011 GNMA, SF, 7.75%, 03/15/27 USA USD 7, ,281 GNMA, SF, 8.30%, 07/15/17 USA USD 3, ,515 GNMA, SF, 11.00%, 08/15/17-04/15/21 USA USD 2, ,125,238, Securities Maturing Within One Year 40 GNMA, II, SF, 9.50%, 12/20/15 USA USD TOTAL BONDS 1,125,238, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 1,125,238, TOTAL INVESTMENTS 1,125,238, Unaudited Semi-Annual Report 281

284 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 9,240,000 American Express Credit Account Master Trust, , A, FRN, 0.431%, 01/15/20 USA USD 9,239, ,210,000 Discover Card Execution Note Trust, 2012-A5, A5, FRN, 0.361%, 01/16/18 USA USD 9,209, ,160,000 Chase Issuance Trust, 2014-A3, A3, FRN, 0.361%, 05/15/18 USA USD 9,158, ,850,000 Citibank Credit Card Issuance Trust, 2013-A1, A1, FRN, 0.267%, 04/24/17 USA USD 8,844, ,880,000 Capital One Multi-Asset Execution Trust, 2007-A2, A2, FRN, 0.241%, 12/16/19 USA USD 8,832, ,255,101 Colony MFM Trust, , A, 144A, %, 04/20/55 USA USD 8,230, ,130,000 Chase Issuance Trust, 2012-A6, A, FRN, 0.291%, 08/15/17 USA USD 8,126, ,500,000 Citibank Credit Card Issuance Trust, 2005-A9, A9, 5.10%, 11/20/17 USA USD 7,793, ,410,000 Capital One Multi-Asset Execution Trust, 2006-A6, A3, 5.05%, 12/17/18 USA USD 7,757, ,005,425 FNMA, ARM, 2.268%, 09/01/39 USA USD 7,472, ,834,101 Commercial Mortgage Trust, 2007-C9, A1A, FRN, 6.01%, 12/10/49 USA USD 7,404, ,370,000 Citibank Credit Card Issuance Trust, 2013-A11, A11, FRN, 0.397%, 02/07/18 USA USD 7,370, ,370,000 Bank of America Credit Card Trust, 2014-A2, A, FRN, 0.431%, 09/16/19 USA USD 7,360, ,270,000 Capital One Multi-Asset Execution Trust, 2007-A1, A1, FRN, 0.211%, 11/15/19 USA USD 7,239, ,000,000 Trade MAPS Ltd., A, A, 144A, FRN, 0.862%, 12/10/18 IRL USD 7,021, ,800,000 American Express Credit Account Master Trust, , A, FRN, 1.361%, 02/15/18 USA USD 6,836, ,900,000 Discover Card Execution Note Trust, 2014-A1, A1, FRN, 0.591%, 07/15/21 USA USD 5,918, ,259,690 WaMu Mortgage Pass-Through Certificates, 2005-AR13, A1A1, 0.456%, 10/25/45 USA USD 5,900, ,650,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-CB17, AM, 5.464%, 12/12/43 USA USD 5,860, ,830,000 Discover Card Execution Note Trust, 2010-A2, A2, FRN, 0.741%, 03/15/18 USA USD 5,842, ,780,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-LDP7, AJ, FRN, 5.873%, 04/15/45 USA USD 5,815, ,600,000 Chase Issuance Trust, 2014-A5, A5, FRN, 0.531%, 04/15/21 USA USD 5,587, ,100,000 Morgan Stanley Capital I Trust, 2006-HQ8, AJ, FRN, 5.497%, 03/12/44 USA USD 5,240, ,965,000 Banc of America Commercial Mortgage Trust, , AJ, 5.695%, 07/10/46 USA USD 5,158, ,000,482 ARCap REIT Inc., 2004-RR3, A2, 144A, FRN, 4.76%, 09/21/45 USA USD 5,130, ,960,000 Greenwich Capital Commercial Funding Corp., 2006-GG7, AJ, FRN, 5.82%, 07/10/38 USA USD 5,096, ,900,000 Citigroup Commercial Mortgage Trust, 2006-C5, AJ, 5.482%, 10/15/49 USA USD 4,808, ,800,000 Citibank Credit Card Issuance Trust, 2013-A12, A12, FRN, 0.462%, 11/07/18 USA USD 4,796, ,177,572 Merrill Lynch Mortgage Investors Trust, 2005-A10, A, FRN, 0.38%, 02/25/36 USA USD 4,781, ,520,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW12, AJ, FRN, 5.751%, 09/11/38 USA USD 4,656, ,700,000 Novastar Home Equity Loan, , M4, FRN, 1.82%, 03/25/35 USA USD 4,636, ,620,000 Chase Issuance Trust, 2013-A3, A3, FRN, 0.441%, 04/15/20 USA USD 4,608, ,740,000 ARES CLO Ltd., RA, B, 144A, FRN, 0.599%, 04/16/21 USA USD 4,555, ,600,000 West CLO Ltd., A, B, 144A, FRN, 3.083%, 07/18/26 USA USD 4,455, ,440,000 Discover Card Execution Note Trust, 2012-A3, A3, 0.86%, 11/15/17 USA USD 4,446, ,420,000 Citibank Credit Card Issuance Trust, 2008-A6, A6, FRN, 1.365%, 05/22/17 USA USD 4,437, ,290,000 Chase Issuance Trust, 2012-A9, A9, FRN, 0.311%, 10/16/17 USA USD 4,288, ,230,000 Discover Card Execution Note Trust, 2013-A6, A6, FRN, 0.611%, 04/15/21 USA USD 4,245, ,965,726 ML-CFC Commercial Mortgage Trust, , A1A, FRN, 5.409%, 07/12/46 USA USD 4,207, ,153,566 Babson CLO Inc., A, A1, 144A, FRN, 0.456%, 01/18/21 USA USD 4,129, ,437,904 Talisman 6 Finance, Reg S, FRN, 0.262%, 10/22/16 DEU EUR 4,109, ,061,961 Structured ARM Loan Trust, 04-12, 3A1, FRN, 2.414%, 09/25/34 USA USD 4,090, ,936,817 Structured Asset Investment Loan Trust, 2004-BNC2, A2, FRN, 1.21%, 12/25/34 USA USD 3,881, ,900,000 Chase Issuance Trust, 2007-B1, B1, FRN, 0.411%, 04/15/19 USA USD 3,877, ,858,868 Thornburg Mortgage Securities Trust, , 1A1, FRN, 2.341%, 09/25/37 USA USD 3,795, ,780,000 Ford Credit Auto Owner Trust, 2012-A, A4, 1.15%, 06/15/17 USA USD 3,792, ,800,000 American Residential Properties Trust, 2014-SFR1, B, 144A, FRN, 1.912%, 09/17/31 USA USD 3,783, ,437,354 FHLMC, ARM, 2.335%, 05/01/37 USA USD 3,702, ,701,702 Ford Credit Auto Owner Trust, 2012-D, A3, 0.51%, 04/15/17 USA USD 3,701, ,400,000 Wachovia Bank Commercial Mortgage Trust, 2006-C27, AM, FRN, 5.795%, 07/15/45 USA USD 3,621, ,619,107 CT CDO IV Ltd., A, A1, 144A, FRN, 0.465%, 10/20/43 USA USD 3,588, ,457,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW11, AJ, FRN, 5.605%, 03/11/39 USA USD 3,570, ,322,280 Bear Stearns Commercial Mortgage Securities Trust, 2006-PW13, A4, 5.54%, 09/11/41 USA USD 3,495, ,510,567 Colony American Homes, A, A, 144A, FRN, 1.40%, 05/17/31 USA USD 3,495, ,243,419 FHLMC, ARM, 2.354%, 11/01/37 USA USD 3,474, ,400,000 CT CDO III Ltd., A, C, 144A, 5.471%, 06/25/35 USA USD 3,390, ,230,000 Wachovia Bank Commercial Mortgage Trust, 2006-C23, AM, FRN, 5.466%, 01/15/45 USA USD 3,363, ,136,125 Greenwich Capital Commercial Funding Corp., 2007-GG9, A4, 5.444%, 03/10/39 USA USD 3,348, ,158,566 FNMA, 3.50%, 10/01/25 USA USD 3,341, ,265,000 Citibank Credit Card Issuance Trust, 2003-A7, A7, 4.15%, 07/07/17 USA USD 3,326, ,320,000 SWAY Residential Trust, , A, 144A, FRN, 1.457%, 01/17/20 USA USD 3,308, Unaudited Semi-Annual Report

285 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 3,000,000 Bear Stearns Commercial Mortgage Securities Inc., 2007-PW16, AM, FRN, 5.706%, 06/11/40 USA USD 3,273, ,149,437 Morgan Stanley Capital I Trust, 2006-HQ8, A4, FRN, 5.417%, 03/12/44 USA USD 3,230, ,348,900 Catamaran CLO Ltd., A, B, 144A, FRN, 3.233%, 10/18/26 USA USD 3,227, ,120,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW13, AJ, 5.611%, 09/11/41 USA USD 3,205, ,000,000 Wachovia Bank Commercial Mortgage Trust, 2006-C28, AM, FRN, 5.603%, 10/15/48 USA USD 3,198, ,250,736 ARES XI CLO Ltd., A, A1C, 144A, FRN, 0.50%, 10/11/21 USA USD 3,193, ,200,000 Chase Issuance Trust, 2007-C1, C1, FRN, 0.621%, 04/15/19 USA USD 3,182, ,073,693 Credit Suisse First Boston Mortgage Securities Corp., 2004-AR3, 5A1, FRN, 0.267%, 04/25/34 USA USD 3,144, ,000,000 LB-UBS Commercial Mortgage Trust, 2006-C4, AJ, FRN, 5.857%, 06/15/38 USA USD 3,133, ,139,342 First Franklin Mortgage Loan Asset-Backed Certificates, 2005-FF6, M1, FRN, 0.59%, 05/25/36 USA USD 3,104, ,110,000 Invitation Homes Trust, 2014-SFR2, B, 144A, FRN, 1.762%, 09/17/31 USA USD 3,086, ,137,376 Ace Securities Corp., 2005-HE1, M4, FRN, 1.25%, 02/25/35 USA USD 3,081, ,130,000 GSAA Home Equity Trust, 05-5, M3, FRN, 1.115%, 02/25/35 USA USD 2,955, ,800,000 LB-UBS Commercial Mortgage Trust, 2001-C3, E, 144A, FRN, 6.95%, 06/15/36 USA USD 2,834, ,645,933 Wells Fargo Mortgage Backed Securities Trust, 2004-V, 2A1, FRN, 2.632%, 10/25/34 USA USD 2,682, ,640,000 Citigroup/Deutsche Bank Commercial Mortgage Trust, 2005-CD1, E, FRN, 5.219%, 07/15/44 USA USD 2,652, ,695,256 First Horizon Alternative Mortgage Securities Trust, 04-AA5, 2A1, FRN, 2.092%, 12/25/34 USA USD 2,641, ,649,195 Crest Ltd., A, B1, 144A, FRN, 0.723%, 01/28/40 USA USD 2,625, ,612,471 American Homes 4 Rent, 2014-SFR1, A, 144A, FRN, 1.25%, 06/17/31 USA USD 2,584, ,430,000 Citibank Credit Card Issuance Trust, 2006-A3, A3, FRN, 5.30%, 03/15/18 USA USD 2,561, ,590,789 American Home Mortgage Investment Trust, , 4A, FRN, 1.833%, 10/25/34 USA USD 2,556, ,608,102 GSAMP Trust, 2005-HE3, M2, FRN, 1.175%, 06/25/35 USA USD 2,533, ,503,280 Park Place Securities Inc. Asset-Backed Pass-Through Certificates, 2004-WHQ2, M2, FRN, 1.115%, 02/25/35 USA USD 2,505, ,500,000 Resource Capital Corp. Ltd., 2014-CRE2, A, 144A, FRN, 1.212%, 06/15/17 CYM USD 2,479, ,409,481 ARCap Resecuritization Trust, 2004-A1, A, 144A, 4.73%, 04/21/24 USA USD 2,441, ,430,000 Apidos CDO, A, C2, 144A, 4.85%, 04/15/25 USA USD 2,358, ,200,000 CD Commercial Mortgage Trust, 2005-CD1, AJ, FRN, 5.219%, 07/15/44 USA USD 2,258, ,065,762 FNMA, 4.00%, 04/01/25 USA USD 2,207, ,000,000 Citigroup Commercial Mortgage Trust, 2007-C6, AM, FRN, 5.706%, 06/10/17 USA USD 2,138, ,000,000 Banc of America Commercial Mortgage Trust, , AM, 5.675%, 07/10/46 USA USD 2,131, ,151,879 Ownit Mortgage Loan Asset-Backed Certificates, , M4, FRN, 1.10%, 03/25/36 USA USD 2,121, ,025,000 Merrill Lynch Mortgage Trust, 2005-CKI1, AJ, FRN, 5.282%, 11/12/37 USA USD 2,080, ,000,950 Wells Fargo Mortgage Backed Securities Trust, 2005-AR, 1A1, FRN, 2.61%, 02/25/35 USA USD 2,015, ,988,000 Bear Stearns Commercial Mortgage Securities Trust, 2005-T20, E, FRN, 5.288%, 10/12/42 USA USD 1,993, ,980,000 Wachovia Bank Commercial Mortgage Trust, 2007-WHL8, A2, 144A, FRN, 0.301%, 06/15/20 USA USD 1,949, ,920,000 American Express Credit Account Master Trust, , A, FRN, 0.311%, 03/15/18 USA USD 1,919, ,875,303 G-Force LLC, 2005-RRA, B, 144A, 5.09%, 08/22/36 USA USD 1,910, ,856,976 LB-UBS Commercial Mortgage Trust, 2005-C3, A5, 4.739%, 07/15/30 USA USD 1,868, ,715,928 FNMA, ARM, 2.109%, 12/01/36 USA USD 1,815, ,660,000 Bear Stearns Commercial Mortgage Securities Trust, 2007-PW16, A4, FRN, 5.706%, 06/11/40 USA USD 1,793, ,812,492 Merrill Lynch Mortgage Investors Trust Inc., 2003-G, A2, FRN, 1.007%, 01/25/29 USA USD 1,767, ,799,583 G-Force LLC, 2005-RR2, A3FL, 144A, FRN, 0.47%, 12/25/39 USA USD 1,757, ,814,864 Fairfield Street Solar, A, A1, 144A, FRN, 0.586%, 11/28/39 CYM USD 1,746, ,804,197 Thornburg Mortgage Securities Trust, , A1, FRN, 0.81%, 09/25/43 USA USD 1,735, ,740,000 West CLO Ltd., A, A2, 144A, FRN, 2.333%, 07/18/26 USA USD 1,710, ,700,000 Citibank Credit Card Issuance Trust, 2014-A9, A9, FRN, 0.358%, 05/09/18 USA USD 1,700, ,625,344 Kildare Securities Ltd., A, A2, 144A, FRN, 0.358%, 12/10/43 IRL USD 1,622, ,603,689 N-Star Real Estate CDO Ltd., A, A1, 144A, FRN, 0.573%, 06/16/41 CYM USD 1,581, ,640,000 Cent CDO XI Ltd., A, B, 144A, FRN, 1.033%, 04/25/19 USA USD 1,565, ,583,008 MASTR Adjustable Rate Mortgages Trust, , I2A2, FRN, 0.33%, 01/25/47 USA USD 1,564, ,577,174 Residential Asset Securities Corp., 2006-KS7, A3, FRN, 0.32%, 09/25/36 USA USD 1,537, ,491,050 ABSC Manufactured Housing Contract Resecuritization Trust, K1, A4, 144A, 5.019%, 04/16/30 USA USD 1,509, ,509,744 Wells Fargo Mortgage Backed Securities Trust, 2005-AR10, 2A3, FRN, 2.616%, 06/25/35 USA USD 1,500, ,500,000 Chase Issuance Trust, 2007-A2, A2, FRN, 0.211%, 04/15/19 USA USD 1,492, ,480,559 Ameriquest Mortgage Securities Inc. Asset-Backed Pass-Through Certificates, 2004-R7, A1, FRN, 0.61%, 08/25/34 USA USD 1,481, ,450,000 Wells Fargo Home Equity Trust Mortgage Pass-Through Certificates, , A3, FRN, 0.54%, 04/25/34 USA USD 1,386, Unaudited Semi-Annual Report 283

286 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 1,470,634 WaMu Mortgage Pass-Through Certificates, 2005-AR8, 1A1A, FRN, 0.44%, 07/25/45 USA USD 1,373, ,365,043 Wells Fargo Mortgage Backed Securities Trust, 2004-I, 2A1, FRN, 2.654%, 06/25/34 USA USD 1,365, ,373,046 Ameriquest Mortgage Securities Inc. Asset-Backed Pass-Through Certificates, 2004-R4, M1, FRN, 0.995%, 06/25/34 USA USD 1,345, ,300,000 LB-UBS Commercial Mortgage Trust, 2006-C1, AJ, FRN, 5.276%, 02/15/41 USA USD 1,332, ,308,249 Granite Master Issuer PLC, , A4, FRN, 0.245%, 12/20/54 GBR USD 1,298, ,358,550 Sequoia Mortgage Trust, , 1A2, FRN, 0.987%, 07/20/33 USA USD 1,283, ,330,000 Landmark IX CDO Ltd., A, C, 144A, FRN, 0.931%, 04/15/21 USA USD 1,283, ,258,565 Newcastle CDO IV Ltd., A, 1, 144A, FRN, 0.576%, 12/24/39 USA USD 1,236, ,108,485 FNMA, 5.00%, 01/01/39 USA USD 1,223, ,174,114 Holmes Master Issuer PLC, A, A2, 144A, FRN, 1.781%, 10/15/54 GBR USD 1,174, ,057,759 FNMA, 5.00%, 04/01/38 USA USD 1,167, ,079,235 FNMA, 4.00%, 07/01/19 USA USD 1,143, ,077,374 FNMA, 3.00%, 03/01/27 USA USD 1,123, ,100,000 Wachovia Bank Commercial Mortgage Trust, 2003-C7, F, 144A, FRN, 5.004%, 10/15/35 USA USD 1,108, ,106,684 Long Beach Mortgage Loan Trust, 2005-WL2, M1, FRN, 0.64%, 08/25/35 USA USD 1,099, ,024,842 FHLMC, ARM, 2.378%, 10/01/36 USA USD 1,095, ,107,500 Eaton Vance CDO Ltd., A, B, 144A, FRN, 2.285%, 07/15/26 USA USD 1,078, ,083,014 Granite Master Issuer PLC, , A3, FRN, 0.245%, 12/20/54 GBR USD 1,075, ,078,220 Structured Asset Securities Corp., 2006-WF1, A5, FRN, 0.47%, 02/25/36 USA USD 1,062, ,040,321 wide Asset-Backed Certificates, , MV3, FRN, 1.22%, 12/25/34 USA USD 1,036, ,030,404 MASTR ARM Trust, , 12A2, FRN, 0.37%, 05/25/47 USA USD 1,016, ,237 FNMA, ARM, 2.278%, 02/01/37 USA USD 996, ,918 Silver Bay Realty Trust, , A, 144A, FRN, 1.165%, 09/17/31 USA USD 963, ,000 ColumbusNova CLO IV Ltd., A, B, 144A, 1.481%, 10/15/21 USA USD 954, ,531 Mach One A ULC, G, 144A, FRN, 6.82%, 05/28/40 USA USD 940, ,500 Eaton Vance CDO Ltd., A, C, 144A, FRN, 3.235%, 07/15/26 USA USD 922, ,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2005-LDP5, A, FRN, 5.393%, 12/15/44 USA USD 910, ,000 Argent Securities Inc., 2005-W2, A2C, FRN, 0.53%, 10/25/35 USA USD 905, ,000 American Express Credit Account Master Trust, , A, FRN, 0.261%, 10/16/17 USA USD 899, ,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-LDP7, A4, FRN, 5.873%, 04/15/45 USA USD 893, ,000 LB-UBS Commercial Mortgage Trust, 2004-C7, H, 144A, FRN, 5.239%, 10/15/36 USA USD 892, ,773 Seawall SPC, A, C1, 144A, FRN, 1.406%, 04/15/46 USA USD 892, ,164 Residential Funding Mortgage Securities II, 2004-HI3, A5, FRN, 5.48%, 06/25/34 USA USD 840, ,341 Bayview Financial Acquisition Trust, 2004-D, M1, FRN, 0.80%, 08/28/44 USA USD 827, ,000 Emerson Park CLO Ltd., A, C2, 144A, 5.64%, 07/15/25 USA USD 821, ,305 GSAA Home Equity Trust, FRN, 0.54%, 06/25/35 USA USD 819, ,927 Sequoia Mortgage Trust, , 1A1, FRN, 0.785%, 07/20/33 USA USD 813, ,794 FNMA, 4.00%, 07/01/25 USA USD 800, ,182 FHLMC, ARM, 2.158%, 08/01/35 USA USD 746, ,000 Highbridge Loan Management Ltd., A, B2, 144A, 5.80%, 10/20/24 USA USD 735, ,518 Structured Asset Mortgage Investments Trust, 2003-AR2, A1, FRN, 0.904%, 12/19/33 USA USD 709, ,000 Park Place Securities Inc., 2005-WCW1, M1, FRN, 0.62%, 09/25/35 USA USD 686, ,157 FNMA, 5.00%, 05/01/35 USA USD 676, ,000 Greenwich Capital Commercial Funding Corp., 2006-GG7, AM, FRN, 6.014%, 07/10/38 USA USD 659, ,225 FNMA, 3.00%, 12/01/27 USA USD 656, ,154 Wells Fargo Mortgage Backed Securities Trust, 2005-AR3, 2A1, FRN, 2.644%, 03/25/35 USA USD 625, ,449 WaMu Mortgage Pass-Through Certificates, 2005-AR8, 1A1A, FRN, 0.46%, 07/25/45 USA USD 608, ,000 Master Asset-Backed Securities Trust, 2004-HE1, M2, FRN, 1.265%, 09/25/34 USA USD 595, ,919 FHLMC, ARM, 2.425%, 06/01/34 USA USD 591, ,103 FHLMC, ARM, 2.37%, 02/01/36 USA USD 585, ,865 FHLMC, ARM, 2.266%, 06/01/35 USA USD 578, ,565 FNMA, ARM, 1.887%, 03/01/36 USA USD 563, ,635 wide Asset-Backed Certificates, , M1, FRN, 0.68%, 06/25/35 USA USD 563, ,518 FHLMC, ARM, 1.917%, 07/01/24 USA USD 561, ,444 MLCC Mortgage Investors Inc., , 2A2, FRN, 2.297%, 04/25/35 USA USD 560, ,202 FNMA, ARM, 1.945%, 11/01/35 USA USD 556, ,917 FNMA, ARM, 2.293%, 06/01/36 USA USD 517, ,715 MASTR Alternative Loan Trust, , 5A1, 5.50%, 04/25/19 USA USD 510, ,684 FNMA, ARM, 2.383%, 08/01/35 USA USD 507, ,552 FNMA, ARM, 2.087%, 08/01/33 USA USD 492, ,668 FNMA, ARM, 2.33%, 03/01/37 USA USD 490, ,114 FHLMC, ARM, 2.37%, 05/01/36 USA USD 487, ,199 MASTR Alternative Loan Trust, , 2A1, FRN, 5.561%, 11/25/19 USA USD 482, ,093 FNMA, ARM, 2.371%, 10/01/36 USA USD 472, Unaudited Semi-Annual Report

287 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 477,324 Merrill Lynch Mortgage Investors Trust, 2003-A, 1A, FRN, 0.91%, 03/25/28 USA USD 469, ,596 FNMA, 5.00%, 07/01/35 USA USD 468, ,219 FHLMC, ARM, 3.478%, 04/01/40 USA USD 458, ,830 FNMA, ARM, 2.445%, 04/01/36 USA USD 458, ,696 FNMA, , FN, FRN, 0.52%, 01/25/36 USA USD 437, ,000 Silver Bay Realty Trust, , B, 144A, FRN, 1.615%, 09/17/31 USA USD 433, ,981 MASTR Alternative Loan Trust, , 2A1, 5.00%, 08/25/18 USA USD 432, ,339 FNMA, ARM, 2.625%, 05/01/34 USA USD 428, ,267 FNMA, ARM, 5.089%, 08/01/35 USA USD 426, ,454 FNMA, ARM, 2.415%, 06/01/35 USA USD 426, ,893 FNMA, ARM, 2.413%, 02/01/37 USA USD 423, ,422 wide Asset-Backed Certificates, , M1, FRN, 0.92%, 03/25/34 USA USD 423, ,405 FNMA, ARM, 2.435%, 09/01/34 USA USD 422, ,478 FHLMC, ARM, 2.298%, 08/01/34 USA USD 417, ,563 FNMA, ARM, 2.329%, 03/01/36 USA USD 416, ,374 FHLMC, ARM, 2.255%, 11/01/35 USA USD 404, ,104 FHLMC, ARM, 2.606%, 09/01/35 USA USD 403, ,358 FHLMC, ARM, 4.592%, 01/01/35 USA USD 402, ,488 FNMA, ARM, 2.263%, 02/01/33 USA USD 401, ,933 FHLMC, ARM, 2.546%, 04/01/37 USA USD 394, ,008 FNMA, ARM, 1.835%, 01/01/33 USA USD 384, ,146 FNMA, ARM, 2.455%, 02/01/38 USA USD 379, ,644 Crest Ltd., A, C2, 144A, 5.709%, 12/28/38 USA USD 378, ,203 FNMA, ARM, 2.152%, 05/01/37 USA USD 377, ,573 FNMA, ARM, 2.166%, 11/01/39 USA USD 377, ,560 FHLMC, ARM, 1.917%, 04/01/25 USA USD 377, ,447 FNMA, ARM, 1.96%, 03/01/35 USA USD 371, ,000 Mercedes-Benz Auto Lease Trust, 2013-A, A4, 0.72%, 12/17/18 USA USD 370, ,559 FNMA, ARM, 1.951%, 09/01/34 USA USD 367, ,914 FNMA, ARM, 1.885%, 01/01/36 USA USD 366, ,419 FNMA, ARM, 2.28%, 07/01/35 USA USD 366, ,779 FNMA, ARM, 2.492%, 01/01/27 USA USD 364, ,840 MASTR Alternative Loan Trust, , 3A1, 5.00%, 02/25/18 USA USD 363, ,124 FHLMC, ARM, 4.754%, 05/01/38 USA USD 358, ,492 JPMorgan Mortgage Acquisition Corp., 2005-FLD1, M2, FRN, 0.905%, 07/25/35 USA USD 354, ,510 FNMA, ARM, 2.202%, 03/01/35 USA USD 346, ,180 FNMA, ARM, 2.30%, 01/01/36 USA USD 344, ,779 FNMA, ARM, 2.428%, 12/01/36 USA USD 342, ,056 Credit Suisse First Boston Mortgage Securities Corp., 2001-HE8, M1, FRN, 1.22%, 02/25/31 USA USD 340, ,745 MASTR Alternative Loan Trust, , 1A1, 5.50%, 12/25/18 USA USD 339, ,830 FNMA, ARM, 1.766%, 01/01/35 USA USD 332, ,657 FNMA, ARM, 2.274%, 03/01/33 USA USD 328, ,497 Aames Mortgage Investment Trust, , M1, FRN, 0.875%, 10/25/35 USA USD 323, ,716 FHLMC, ARM, 5.181%, 02/01/38 USA USD 320, ,153 FNMA, ARM, 2.371%, 10/01/33 USA USD 320, ,000 Chase Issuance Trust, 2007-A8, A, FRN, 0.181%, 03/15/17 USA USD 319, ,920 FHLMC, ARM, 2.348%, 03/01/33 USA USD 312, ,805 Anthracite Ltd., 2005-HY2A, A, 144A, FRN, 0.524%, 07/26/45 CYM USD 311, ,318 FNMA, ARM, 2.63%, 05/01/33 USA USD 309, ,768 FNMA, , FC, FRN, 0.42%, 07/25/35 USA USD 306, ,666 Citigroup Mortgage Loan Trust Inc., 2006-WFH3, A3, FRN, 0.32%, 10/25/36 USA USD 286, ,735 FHLMC, ARM, 3.317%, 09/01/40 USA USD 286, ,784 FHLMC, ARM, 2.375%, 07/01/36 USA USD 282, ,929 FHLMC, ARM, 2.233%, 07/01/36 USA USD 276, ,371 FNMA, ARM, 5.29%, 07/01/36 USA USD 271, ,556 FDIC Structured Sale Guaranteed Notes, 2010-S1, 1A, 144A, FRN, 0.704%, 02/25/48 USA USD 265, ,577 Park Place Securities Inc. Asset-Backed Pass-Through Certificates, 2004-MCW1, M1, FRN, 1.107%, 10/25/34 USA USD 265, ,110 FNMA, ARM, 1.986%, 05/01/35 USA USD 263, ,575 FNMA, ARM, 2.189%, 12/01/35 USA USD 262, ,415 FHLMC, ARM, 2.393%, 04/01/36 USA USD 253, ,249 FNMA, ARM, 1.917%, 11/01/32 USA USD 245, ,096 FHLMC, ARM, 2.00%, 08/01/36 USA USD 244, ,250 FHLMC, ARM, 2.37%, 05/01/36 USA USD 244, ,169 FNMA, ARM, 2.477%, 06/01/36 USA USD 238, ,423 FNMA, ARM, 2.376%, 06/01/33 USA USD 237, ,642 FHLMC, ARM, 2.25%, 10/01/35 USA USD 235, ,348 FNMA, ARM, 1.668%, 04/01/27 USA USD 229, ,225 FNMA, ARM, 2.308%, 11/01/35 USA USD 228, ,224 FNMA, ARM, 3.016%, 07/01/30 USA USD 228, ,775 FHLMC, ARM, 2.33%, 12/01/36 USA USD 226, ,827 First Franklin Mortgage Loan Asset-Backed Certificates, 2001-FF2, A1, FRN, 0.79%, 11/25/31 USA USD 221, ,041 FHLMC, ARM, 2.301%, 05/01/35 USA USD 221, ,654 FHLMC, ARM, 2.379%, 05/01/37 USA USD 215, Unaudited Semi-Annual Report 285

288 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 202,818 FHLMC, ARM, 2.318%, 03/01/39 USA USD 215, ,587 JPMorgan Mortgage Acquisition Corp., 2006-ACC1, A4, FRN, 0.32%, 05/25/36 USA USD 209, ,449 FHLMC, ARM, 2.406%, 02/01/37 USA USD 208, ,085 FHLMC, ARM, 4.173%, 03/01/38 USA USD 208, ,552 FNMA, ARM, 1.995%, 12/01/34 USA USD 206, ,097 FNMA, 5.00%, 06/01/38 USA USD 204, ,915 FHLMC, ARM, 3.408%, 06/01/25 USA USD 196, ,399 FHLMC, ARM, 2.25%, 08/01/29 USA USD 194, ,956 FHLMC, ARM, 2.146%, 12/01/35 USA USD 193, ,276 FNMA, ARM, 2.49%, 03/01/38 USA USD 192, ,169 FHLMC, ARM, 2.461%, 04/01/32 USA USD 189, ,371 JPMorgan Chase Commercial Mortgage Securities Trust, 2004-LN2, A2, 5.115%, 07/15/41 USA USD 189, ,089 FHLMC, ARM, 2.348%, 02/01/33 USA USD 185, ,300 FNMA, ARM, 2.397%, 06/01/36 USA USD 184, ,391 FHLMC, ARM, 4.997%, 03/01/38 USA USD 183, ,001 FHLMC, ARM, 2.37%, 03/01/36 USA USD 181, ,726 FNMA, ARM, 2.11%, 05/01/24 USA USD 180, ,270 FNMA, ARM, 2.02%, 04/01/36 USA USD 180, ,770 FNMA, ARM, 2.126%, 02/01/33 USA USD 176, ,837 FNMA, ARM, 2.49%, 02/01/35 USA USD 176, ,737 FNMA, ARM, 2.50%, 08/01/37 USA USD 176, ,496 FHLMC, ARM, 2.10%, 09/01/33 USA USD 174, ,909 FNMA, ARM, 1.137%, 12/01/37 USA USD 173, ,433 FNMA, ARM, 2.086%, 02/01/25 USA USD 172, ,431 FNMA, ARM, 2.29%, 01/01/33 USA USD 170, ,099 FNMA, ARM, 2.314%, 02/01/35 USA USD 168, ,249 FNMA, ARM, 2.408%, 03/01/38 USA USD 167, ,365 FHLMC, ARM, 2.455%, 02/01/37 USA USD 166, ,494 FNMA, ARM, 2.438%, 08/01/35 USA USD 161, ,992 FNMA, ARM, 2.50%, 02/01/30 USA USD 160, ,102 FNMA, ARM, 2.333%, 09/01/32 USA USD 159, ,486 FHLMC, ARM, 2.547%, 06/01/37 USA USD 157, ,398 FNMA, ARM, 1.787%, 06/01/35 USA USD 156, ,178 FNMA, ARM, 2.131%, 10/01/35 USA USD 156, ,226 FHLMC, ARM, 2.494%, 07/01/37 USA USD 153, ,280 FNMA, ARM, 2.348%, 07/01/35 USA USD 153, ,257 FHLMC, ARM, 2.712%, 03/01/35 USA USD 150, ,494 Vanderbilt Acquistion Loan Trust, , M1, 7.33%, 05/07/32 USA USD 149, ,860 FHLMC, ARM, 2.301%, 02/01/34 USA USD 146, ,461 FHLMC, ARM, 2.415%, 09/01/36 USA USD 146, ,774 FNMA, ARM, 2.385%, 10/01/33 USA USD 145, ,793 FNMA, ARM, 2.621%, 03/01/36 USA USD 145, ,240 FNMA, ARM, 2.25%, 07/01/33 USA USD 145, ,807 FHLMC, ARM, 2.376%, 02/01/36 USA USD 143, ,949 FHLMC, ARM, 2.285%, 12/01/37 USA USD 142, ,361 FNMA, ARM, 2.372%, 12/01/28 USA USD 142, ,144 FHLMC, ARM, 4.833%, 12/01/34 USA USD 140, ,129 Anthracite Ltd., A, BFL, 144A, FRN, 0.714%, 03/23/39 CYM USD 137, ,201 FNMA, ARM, 1.481%, 02/01/44 USA USD 137, ,689 FHLMC, ARM, 2.375%, 11/01/34 USA USD 137, ,628 FNMA, ARM, 2.708%, 03/01/39 USA USD 136, ,452 Structured Asset Investment Loan Trust, 2003-BC12, 3A, FRN, 0.91%, 11/25/33 USA USD 136, ,752 FNMA, ARM, 4.426%, 02/01/38 USA USD 135, ,151 FHLMC, ARM, 2.34%, 10/01/29 USA USD 134, ,897 FHLMC, ARM, 2.331%, 12/01/34 USA USD 134, ,873 FNMA, ARM, 2.14%, 10/01/34 USA USD 132, ,992 FNMA, ARM, 2.393%, 09/01/33 USA USD 132, ,125 FHLMC, ARM, 2.564%, 04/01/30 USA USD 131, ,055 FHLMC, ARM, 2.385%, 06/01/37 USA USD 130, ,331 FNMA, ARM, 1.93%, 07/01/33 USA USD 125, ,647 FHLMC, ARM, 1.825%, 07/01/37 USA USD 124, ,471 FHLMC, ARM, 2.346%, 09/01/37 USA USD 123, ,880 FHLMC, ARM, 2.502%, 01/01/32 USA USD 121, ,353 FHLMC, ARM, 2.649%, 06/01/23 USA USD 120, ,707 FHLMC, ARM, 4.021%, 08/01/23 USA USD 118, ,900 FNMA, ARM, 1.967%, 11/01/35 USA USD 118, ,525 FHLMC, ARM, 2.29%, 12/01/23 USA USD 116, ,770 FNMA, ARM, 2.395%, 03/01/31 USA USD 116, ,643 FHLMC, ARM, 2.348%, 12/01/32 USA USD 115, ,289 FNMA, ARM, 2.50%, 07/01/33 USA USD 115, ,688 FNMA, ARM, 2.03%, 11/01/33 USA USD 112, ,868 FNMA, ARM, 2.05%, 02/01/33 USA USD 109, ,441 FNMA, ARM, 1.917%, 10/01/32 USA USD 108, ,528 FNMA, ARM, 2.091%, 07/01/34 USA USD 106, ,358 FHLMC, ARM, 2.071%, 11/01/21 USA USD 105, Unaudited Semi-Annual Report

289 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 100,019 FNMA, ARM, 2.257%, 09/01/33 USA USD 105, ,452 FNMA, ARM, 2.26%, 10/01/43 USA USD 103, ,665 FNMA, ARM, 2.345%, 06/01/34 USA USD 101, ,419 FHLMC, ARM, 5.696%, 05/01/36 USA USD 99, ,375 FHLMC, ARM, 2.183%, 10/01/23 USA USD 99, ,303 FHLMC, ARM, 2.233%, 06/01/36 USA USD 97, ,769 FNMA, ARM, 1.46%, 04/01/32 USA USD 97, ,351 FHLMC, ARM, 2.464%, 12/01/30 USA USD 97, ,509 FHLMC, ARM, 2.678%, 02/01/37 USA USD 96, ,863 FNMA, ARM, 2.315%, 02/01/36 USA USD 95, ,909 FHLMC, ARM, 2.375%, 05/01/37 USA USD 94, ,935 FHLMC, ARM, 2.44%, 03/01/36 USA USD 94, ,729 GNMA, ARM, 1.625%, 08/20/29 USA USD 92, ,795 FHLMC, ARM, 4.87%, 04/01/38 USA USD 88, ,483 FNMA, ARM, 2.252%, 02/01/34 USA USD 88, ,936 place Manufactured Housing Contract Trust, 2005-A3, 144A, 4.80%, 12/15/35 USA USD 87, ,657 FHLMC, ARM, 2.375%, 06/01/37 USA USD 85, ,386 FHLMC, ARM, 2.35%, 10/01/33 USA USD 85, ,309 GNMA, ARM, 1.625%, 12/20/23 USA USD 84, ,311 FHLMC, ARM, 2.055%, 11/01/35 USA USD 83, ,617 FHLMC, ARM, 4.44%, 12/01/30 USA USD 81, ,022 GNMA, ARM, 1.625%, 11/20/24 USA USD 81, ,410 Chase Funding Mortgage Loan Asset-Backed Certificates, , 2A2, FRN, 0.67%, 02/25/35 USA USD 79, ,240 FNMA, ARM, 1.513%, 09/01/40 USA USD 78, ,542 FHLMC, ARM, 2.375%, 07/01/34 USA USD 78, ,960 FNMA, ARM, 2.325%, 04/01/47 USA USD 75, ,745 FNMA, ARM, 2.073%, 11/01/36 USA USD 73, ,654 FHLMC, ARM, 1.962%, 03/01/24 USA USD 73, ,072 FNMA, ARM, 2.383%, 01/01/35 USA USD 73, ,631 FNMA, ARM, 2.145%, 02/01/31 USA USD 70, ,472 FHLMC, ARM, 2.584%, 11/01/20 USA USD 70, ,041 FHLMC, ARM, 2.233%, 07/01/36 USA USD 69, ,713 FNMA, ARM, 2.279%, 02/01/34 USA USD 69, ,319 GNMA, ARM, 1.625%, 07/20/32 USA USD 68, ,135 GNMA, ARM, 1.625%, 11/20/29 USA USD 68, ,091 FHLMC, ARM, 2.375%, 11/01/31 USA USD 67, ,101 GNMA, ARM, 1.625%, 04/20/28 USA USD 67, ,742 FNMA, ARM, 2.037%, 04/01/37 USA USD 67, ,142 FNMA, ARM, 2.318%, 04/01/36 USA USD 66, ,706 FNMA, ARM, 2.458%, 08/01/32 USA USD 66, ,464 FNMA, ARM, 3.647%, 02/01/30 USA USD 65, ,756 Morgan Stanley ABS Capital I Inc. Trust, 2004-HE6, A2, FRN, 0.85%, 08/25/34 USA USD 63, ,733 FNMA, ARM, 2.094%, 05/01/36 USA USD 63, ,694 FHLMC, ARM, 1.945%, 04/01/37 USA USD 61, ,145 FNMA, ARM, 2.194%, 11/01/36 USA USD 61, ,640 FNMA, ARM, 1.947%, 03/01/19 USA USD 61, ,667 FNMA, ARM, 1.313%, 08/01/42 USA USD 61, ,714 FNMA, ARM, 2.123%, 10/01/32 USA USD 61, ,185 FNMA, ARM, 2.32%, 07/01/37 USA USD 60, ,987 FNMA, ARM, 2.63%, 04/01/33 USA USD 58, ,111 FNMA, ARM, 2.666%, 03/01/18 USA USD 57, ,739 FNMA, ARM, 2.323%, 09/01/34 USA USD 53, ,011 FNMA, ARM, 2.078%, 07/01/35 USA USD 53, ,415 FNMA, ARM, 2.105%, 12/01/32 USA USD 53, ,362 FNMA, ARM, 2.455%, 02/01/36 USA USD 53, ,315 FNMA, ARM, 2.288%, 07/01/31 USA USD 52, ,279 FHLMC, ARM, 2.322%, 09/01/24 USA USD 50, ,634 FNMA, ARM, 1.973%, 07/01/20 USA USD 49, ,267 FHLMC, ARM, 2.085%, 04/01/24 USA USD 48, ,615 FHLMC, ARM, 2.585%, 08/01/37 USA USD 48, ,817 GNMA, ARM, 1.625%, 12/20/24 USA USD 48, ,775 FNMA, ARM, 2.393%, 05/01/33 USA USD 44, ,927 FHLMC, ARM, 3.657%, 07/01/21 USA USD 43, ,530 FHLMC, ARM, 2.515%, 01/01/37 USA USD 42, ,010 FNMA, ARM, 2.253%, 04/01/36 USA USD 41, ,706 FNMA, ARM, 2.34%, 07/01/33 USA USD 40, ,639 FHLMC, ARM, 2.358%, 06/01/31 USA USD 39, ,820 FNMA, ARM, 2.449%, 08/01/37 USA USD 39, ,298 GNMA, ARM, 3.50%, 02/20/21 USA USD 39, ,407 FHLMC, ARM, 5.595%, 02/01/28 USA USD 38, ,569 FNMA, ARM, 2.325%, 04/01/38 USA USD 38, ,935 FNMA, ARM, 2.723%, 10/01/25 USA USD 37, ,615 FNMA, ARM, 2.162%, 12/01/39 USA USD 36, ,438 FNMA, ARM, 2.625%, 10/01/28 USA USD 34, ,885 FNMA, ARM, 2.388%, 09/01/32 USA USD 34, Unaudited Semi-Annual Report 287

290 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 33,053 FNMA, ARM, 4.477%, 09/01/25 USA USD 33, ,811 FNMA, ARM, 2.398%, 02/01/33 USA USD 32, ,591 FNMA, ARM, 2.42%, 08/01/34 USA USD 32, ,122 Green Tree Financial Corp., , A7, 6.74%, 02/01/31 USA USD 32, ,616 FNMA, ARM, 2.40%, 07/01/27 USA USD 32, ,336 FHLMC, ARM, 2.356%, 10/01/23 USA USD 31, ,442 FNMA, ARM, 2.393%, 01/01/36 USA USD 29, ,853 FHLMC, ARM, 2.095%, 07/01/37 USA USD 29, ,495 FNMA, ARM, 2.357%, 02/01/30 USA USD 29, ,993 FNMA, ARM, 2.352%, 01/01/21 USA USD 28, ,277 FNMA, ARM, 2.005%, 08/01/31 USA USD 26, ,823 FHLMC, ARM, 2.408%, 07/01/31 USA USD 26, ,725 FNMA, ARM, 2.075%, 09/01/31 USA USD 26, ,846 FHLMC, ARM, 2.25%, 01/01/37 USA USD 25, ,876 FHLMC, ARM, 2.388%, 02/01/36 USA USD 24, ,170 FNMA, ARM, 2.125%, 12/01/31 USA USD 24, ,997 FHLMC, ARM, 2.293%, 08/01/31 USA USD 23, ,116 FNMA, ARM, 1.513%, 08/01/40 USA USD 21, ,300 FNMA, ARM, 2.277%, 06/01/34 USA USD 20, ,399 FNMA, ARM, 2.436%, 04/01/24 USA USD 20, ,103 FNMA, ARM, 1.737%, 10/01/32 USA USD 20, ,770 First Plus Home Loan Trust, , M1, FRN, 7.42%, 12/10/24 * USA USD 19, ,343 FNMA, ARM, 2.415%, 08/01/32 USA USD 17, ,426 FNMA, ARM, 2.456%, 04/01/33 USA USD 17, ,263 FNMA, ARM, 4.22%, 04/01/18 USA USD 17, ,041 FNMA, ARM, 1.829%, 06/01/35 USA USD 17, ,865 FHLMC, ARM, 2.476%, 12/01/31 USA USD 16, ,542 FHLMC, ARM, 2.401%, 09/01/30 USA USD 16, ,082 Argent Securities Inc., 2004-W1, AV2, FRN, 0.81%, 03/25/34 USA USD 15, ,307 FNMA, ARM, 3.222%, 01/01/33 USA USD 15, ,179 FNMA, ARM, 5.383%, 02/01/38 USA USD 15, ,972 FNMA, ARM, 2.372%, 05/01/36 USA USD 14, ,705 FNMA, ARM, 1.731%, 05/01/32 USA USD 14, ,718 FHLMC, ARM, 2.097%, 08/01/25 USA USD 13, ,415 FNMA, ARM, 5.07%, 09/01/35 USA USD 13, ,175 FHLMC, ARM, 2.356%, 08/01/23 USA USD 12, ,585 FNMA, ARM, 2.305%, 12/01/27 USA USD 12, ,458 FNMA, ARM, 2.396%, 05/01/27 USA USD 11, ,165 FNMA, ARM, 2.249%, 04/01/33 USA USD 10, ,760 FNMA, ARM, 2.723%, 10/01/27 USA USD 10, ,138 FHLMC, ARM, 2.526%, 07/01/29 USA USD 10, ,231 FNMA, ARM, 2.597%, 12/01/29 USA USD 10, ,097 FHLMC, ARM, 2.563%, 02/01/31 USA USD 10, ,398 FNMA, ARM, 2.93%, 03/01/36 USA USD 8, ,295 FNMA, ARM, 2.435%, 08/01/33 USA USD 8, ,846 FHLMC, ARM, 2.349%, 11/01/29 USA USD 8, ,692 FNMA, ARM, 2.19%, 03/01/37 USA USD 7, ,827 First Plus Home Loan Trust, , M1, 6.95%, 01/10/24 * USA USD 7, ,377 FNMA, ARM, 2.318%, 11/01/34 USA USD 7, ,193 FHLMC, ARM, 2.348%, 04/01/33 USA USD 7, ,219 FNMA, ARM, 1.356%, 04/01/37 USA USD 7, ,182 FHLMC, ARM, 2.54%, 05/01/29 USA USD 7, ,186 FNMA, ARM, 2.122%, 11/01/32 USA USD 7, ,855 FHLMC, ARM, 5.961%, 12/01/36 USA USD 7, ,577 FHLMC, ARM, 2.042%, 03/01/18 USA USD 6, ,159 FNMA, ARM, 2.333%, 03/01/35 USA USD 6, ,770 FNMA, ARM, 2.249%, 09/01/27 USA USD 5, ,704 FHLMC, ARM, 2.357%, 07/01/31 USA USD 5, ,459 Structured Asset Investment Loan Trust, 2003-BC2, M3, FRN, 5.045%, 04/25/33 USA USD 5, ,214 FNMA, ARM, 2.63%, 10/01/32 USA USD 5, ,918 FNMA, ARM, 1.93%, 06/01/33 USA USD 5, ,389 FNMA, ARM, 2.258%, 06/01/36 USA USD 4, ,447 FNMA, ARM, 3.32%, 04/01/41 USA USD 4, ,679 Asset-Backed Securities Corp. Home Equity Loan Trust, 2004-HE7, A4, FRN, 1.17%, 10/25/34 USA USD 4, ,788 FNMA, ARM, 2.025%, 11/01/33 USA USD 3, ,625 FHLMC, ARM, 2.395%, 11/01/27 USA USD 3, ,456 Residential Asset Securities Corp., 2005-AHL2, A2, FRN, 0.43%, 10/25/35 USA USD 3, ,454 wide Asset-Backed Certificates, 2003-BC3, A2, FRN, 0.79%, 09/25/33 USA USD 3, ,721 FNMA, ARM, 2.351%, 05/01/36 USA USD 2, ,678 FNMA, ARM, 2.252%, 03/01/25 USA USD 2, ,140 FHLMC, ARM, 1.625%, 01/01/17 USA USD 2, ,348 Asset-Backed Securities Corp. Home Equity Loan Trust, 2004-HE7, A2, FRN, 0.93%, 10/25/34 USA USD 1, ,578, Unaudited Semi-Annual Report

291 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds 12,500,000 Australia & New Zealand Banking Group Ltd., senior note, 1.25%, 01/10/17 AUS USD 12,516, ,000,000 Morgan Stanley, senior note, FRN, 1.514%, 04/25/18 USA USD 11,184, ,000,000 Wachovia Corp., sub. note, FRN, 0.601%, 10/15/16 USA USD 10,960, ,000,000 Constellation Brands Inc., senior note, A, 7.25%, 09/01/16 USA USD 10,825, ,000,000 DISH DBS Corp., senior note, 7.125%, 02/01/16 USA USD 10,537, ,000,000 JPMorgan Chase & Co., senior note, 2.20%, 10/22/19 USA USD 9,924, ,600,000 Fifth Third Bank, senior note, FRN, 0.742%, 11/18/16 USA USD 9,624, ,300,000 CNOOC Nexen Finance 2014 ULC, senior note, 1.625%, 04/30/17 CHN USD 8,264, ,000,000 Oracle Corp., senior note, FRN, 0.811%, 01/15/19 USA USD 8,065, ,500,000 Prudential Financial Inc., senior note, FRN, 1.012%, 08/15/18 USA USD 7,552, ,500,000 Statoil ASA, senior note, FRN, 0.692%, 11/08/18 NOR USD 7,510, ,000,000 Hospitality Properties Trust, senior note, 5.625%, 03/15/17 USA USD 7,501, ,000,000 The Export-Import Bank of China, senior note, 144A, 2.50%, 07/31/19 CHN USD 6,987, ,500,000 Kinder Morgan Finance Co. LLC, senior bond, 5.70%, 01/05/16 USA USD 6,749, ,600,000 Bayer US Finance LLC, senior note, 144A, 2.375%, 10/08/19 DEU USD 6,633, ,400,000 Bank of America Corp., senior note, FRN, 1.271%, 01/15/19 USA USD 6,497, ,400,000 United Overseas Bank Ltd., senior note, Reg S, 2.50%, 03/18/20 SGP USD 6,438, ,200,000 Capital One Bank USA NA, senior note, 2.30%, 06/05/19 USA USD 6,158, ,000,000 Citigroup Inc., sub. note, FRN, 0.506%, 06/09/16 USA USD 5,944, ,600,000 Banco Popular Espanol SA, secured note, Reg S, 2.125%, 10/08/19 ESP EUR 5,927, ,800,000 Sysco Corp., senior note, 1.45%, 10/02/17 USA USD 5,797, ,500,000 HCP Inc., senior note, 3.75%, 02/01/19 USA USD 5,777, ,700,000 CNPC General Capital Ltd., senior note, 144A, FRN, 1.133%, 05/14/17 HKG USD 5,699, ,600,000 Maxim Integrated Products Inc., senior note, 2.50%, 11/15/18 USA USD 5,592, ,500,000 Coca-Cola Femsa SAB de CV, senior note, 2.375%, 11/26/18 MEX USD 5,522, ,200,000 Boston Properties LP, senior note, 3.70%, 11/15/18 USA USD 5,487, ,000,000 Centex Corp., senior note, 6.50%, 05/01/16 USA USD 5,333, ,000,000 New York Life Global Funding, secured note, 144A, 2.10%, 01/02/19 USA USD 5,022, ,000,000 Metlife Inc., senior note, 1.903%, 12/15/17 USA USD 5,013, ,000,000 New York Life Global Funding, secured note, 144A, 2.15%, 06/18/19 USA USD 4,995, ,100,000 UniCredit SpA, senior note, Reg S, FRN, 1.03%, 04/10/17 ITA EUR 4,984, ,000,000 Bank of America NA, sub. note, FRN, 0.521%, 06/15/16 USA USD 4,968, ,000,000 Korea Exchange Bank, senior note, Reg S, 2.00%, 04/02/18 KOR USD 4,958, ,800,000 American Tower Corp., senior note, 3.40%, 02/15/19 USA USD 4,890, ,900,000 Bankinter SA, senior note, Reg S, 1.75%, 06/10/19 ESP EUR 4,883, ,000,000 Beazer Homes USA Inc., senior note, 5.75%, 06/15/19 USA USD 4,812, ,300,000 Petrobras Global Finance BV, senior note, FRN, 3.123%, 03/17/20 BRA USD 4,807, ,700,000 Unione di Banche Italiane SCpA, senior note, Reg S, 2.875%, 02/18/19 ITA EUR 4,775, ,600,000 Kinder Morgan Inc., senior note, 3.05%, 12/01/19 USA USD 4,568, ,500,000 NBCUniversal Enterprise Inc., 144A, FRN, 0.916%, 04/15/18 USA USD 4,541, ,500,000 Svenska Handelsbanken AB, senior note, FRN, 0.733%, 06/17/19 SWE USD 4,511, ,300,000 Intesa Sanpaolo SpA, senior note, 3.875%, 01/16/18 ITA USD 4,478, ,500,000 Banco Popolare Societa Cooperativa, senior note, Reg S, 4.75%, 03/31/16 ITA EUR 4,460, ,500,000 Banco Santander Totta SA, secured note, 1.50%, 04/03/17 PRT EUR 4,331, ,300,000 Regions Financial Corp., senior note, 2.00%, 05/15/18 USA USD 4,261, ,100,000 Woori Bank, sub.note, 144A, 4.75%, 04/30/24 KOR USD 4,250, ,100,000 Becton Dickinson & Co., senior note, 2.675%, 12/15/19 USA USD 4,158, ,100,000 TIAA Asset Management Finance LLC, senior note, 144A, 2.95%, 11/01/19 USA USD 4,112, ,100,000 Credit Suisse New York, senior note, FRN, 0.724%, 05/26/17 CHE USD 4,097, ,100,000 Alibaba Group Holding Ltd., senior note, 144A, 2.50%, 11/28/19 CHN USD 4,045, ,000,000 Celgene Corp., senior note, 2.30%, 08/15/18 USA USD 4,036, ,000,000 Industrial & Commercial Bank of China Ltd./New York, 3.231%, 11/13/19 CHN USD 4,031, ,000,000 Citigroup Inc., senior note, FRN, 1.003%, 04/08/19 USA USD 4,019, ,000,000 Altria Group Inc., senior note, 2.625%, 01/14/20 USA USD 4,016, ,000,000 Walgreens Boots Alliance Inc., senior note, 1.75%, 11/17/17 USA USD 4,012, ,000,000 Royal Bank of Canada, senior note, FRN, 0.605%, 03/08/16 CAN USD 4,008, ,000,000 Freeport-McMoRan Copper & Gold Inc., senior note, 2.30%, 11/14/17 USA USD 4,007, ,800,000 Carnival Corp., senior note, 3.95%, 10/15/20 USA USD 3,986, ,619,000 The New York Times Co., senior note, 6.625%, 12/15/16 USA USD 3,917, ,800,000 BNP Paribas SA, senior note, 2.70%, 08/20/18 FRA USD 3,885, ,500,000 Tenneco Packaging Inc., senior note, 8.125%, 06/15/17 USA USD 3,806, ,750,000 Banco Comercial Portugues SA, 4.75%, 06/22/17 PRT EUR 3,635, ,600,000 Amgen Inc., senior note, FRN, 0.833%, 05/22/19 USA USD 3,603, ,500,000 Kraft Foods Group Inc., senior note, 2.25%, 06/05/17 USA USD 3,560, ,500,000 U.S. Bank NA, sub. note, 3.778% to 04/29/18, FRN thereafter, 04/29/20 USA USD 3,531, ,400,000 Telefonica Emisiones SAU, senior note, 3.192%, 04/27/18 ESP USD 3,514, ,500,000 American Express Credit Corp., senior note, 1.55%, 09/22/17 USA USD 3,509, ,500,000 JPMorgan Chase Bank NA, sub. note, FRN, 0.571%, 06/13/16 USA USD 3,486, ,500,000 AIA Group Ltd., senior note, Reg S, 1.75%, 03/13/18 HKG USD 3,455, ,800,000 Banca Monte dei Paschi di Siena SpA, senior note, Reg S, 3.625%, 04/01/19 ITA EUR 3,436, ,000,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 3,419, ,500,000 Banca Monte dei Paschi di Siena SpA, secured note, Reg S, 2.875%, 04/16/21 ITA EUR 3,299, ,300,000 Hutchison Whampoa International 14 Ltd., 144A, 1.625%, 10/31/17 HKG USD 3,275, ,000,000 Lennar Corp., senior note, B, 6.50%, 04/15/16 USA USD 3,172, ,000,000 Yorkshire Building Society, secured note, Reg S, FRN, 2.31%, 03/23/16 GBR GBP 3,172, ,000,000 USG Corp., senior note, 6.30%, 11/15/16 USA USD 3,165, ,000,000 Gilead Sciences Inc., senior note, 3.05%, 12/01/16 USA USD 3,115, ,000,000 Peabody Energy Corp., senior note, 7.375%, 11/01/16 USA USD 3,097, Unaudited Semi-Annual Report 289

292 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 3,000,000 Korea Western Power Co. Ltd., senior note, 144A, 3.125%, 05/10/17 KOR USD 3,089, ,000,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.50%, 05/15/18 USA USD 3,075, ,000,000 Amgen Inc., senior note, 2.125%, 05/15/17 USA USD 3,041, ,000,000 Laboratory Corp. of America Holdings, 2.20%, 08/23/17 USA USD 3,028, ,000,000 General Motors Financial Co. Inc., senior note, 2.625%, 07/10/17 USA USD 3,015, ,000,000 Glencore Funding LLC, 144A, 3.125%, 04/29/19 CHE USD 3,013, ,000,000 CBS Corp., 1.95%, 07/01/17 USA USD 3,011, ,000,000 Sinopec Group Overseas Development 2013 Ltd., senior note, 144A, 2.50%, 10/17/18 CHN USD 3,002, ,000,000 Aetna Inc., senior note, 1.50%, 11/15/17 USA USD 2,978, ,000,000 Chesapeake Energy Corp., senior note, FRN, 3.481%, 04/15/19 USA USD 2,947, ,000,000 State Grid Overseas Investment 2013 Ltd., senior note, 144A, 1.75%, 05/22/18 CHN USD 2,946, ,900,000 Tyson Foods Inc., senior note, 2.65%, 08/15/19 USA USD 2,929, ,400,000 LUKOIL International Finance BV, senior note, 144A, 3.416%, 04/24/18 RUS USD 2,927, ,000,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 2,793, ,700,000 Canadian Natural Resources Ltd., senior note, 1.75%, 01/15/18 CAN USD 2,686, ,700,000 Viacom Inc., senior note, 2.20%, 04/01/19 USA USD 2,664, ,600,000 Union Bank NA, senior note, FRN, 1.005%, 09/26/16 USA USD 2,614, ,500,000 Eastman Chemical Co., 2.40%, 06/01/17 USA USD 2,540, ,500,000 Alcatel-Lucent USA Inc., senior note, 144A, 4.625%, 07/01/17 FRA USD 2,537, ,400,000 Zoetis Inc., senior note, 1.15%, 02/01/16 USA USD 2,398, ,400,000 Sinopec Group Overseas Development 2014 Ltd., senior note, 144A, 1.75%, 04/10/17 CHN USD 2,393, ,200,000 ING Bank NV, senior note, 144A, FRN, 0.925%, 10/01/19 NLD USD 2,207, ,200,000 Ford Motor Credit Co. LLC, senior note, FRN, 0.755%, 09/08/17 USA USD 2,186, ,200,000 John Deere Capital Corp., senior note, 1.30%, 03/12/18 USA USD 2,178, ,000,000 Kinder Morgan Finance Co. LLC, senior secured note, 144A, 6.00%, 01/15/18 USA USD 2,177, ,200,000 EnLink Midstream Partners LP, senior note, 2.70%, 04/01/19 USA USD 2,168, ,000,000 CIT Group Inc., senior note, 5.25%, 03/15/18 USA USD 2,090, ,000,000 ArcelorMittal, senior note, 3.75%, 03/01/16 LUX USD 2,060, ,000,000 BG Energy Capital PLC, senior note, 144A, 2.875%, 10/15/16 GBR USD 2,050, ,000,000 Experian Finance PLC, 144A, 2.375%, 06/15/17 GBR USD 2,016, ,000,000 Lorillard Tobacco Co., senior note, 2.30%, 08/21/17 USA USD 2,014, ,000,000 Ford Motor Credit Co. LLC, senior note, 2.375%, 01/16/18 USA USD 2,013, ,000,000 Metropolitan Life Global Funding I, secured note, 144A, 1.30%, 04/10/17 USA USD 1,998, ,000,000 CNPC General Capital Ltd., senior note, 144A, 1.95%, 04/16/18 HKG USD 1,966, ,000,000 The Boeing Co., senior note, 0.95%, 05/15/18 USA USD 1,957, ,800,000 PNC Funding Corp., senior note, 2.70%, 09/19/16 USA USD 1,849, ,800,000 Constellation Brands Inc., senior note, 3.875%, 11/15/19 USA USD 1,818, ,200,000 Casino Guichard Perrachon SA, senior note, Reg S, 3.311%, 01/25/23 FRA EUR 1,631, ,600,000 Seven and Seven Ltd., senior note, 144A, FRN, 1.395%, 09/11/19 KOR USD 1,599, ,600,000 Zoetis Inc., senior note, 1.875%, 02/01/18 USA USD 1,586, ,500,000 Hyundai Capital America, senior note, Reg S, 4.00%, 06/08/17 KOR USD 1,572, ,500,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 1,569, ,500,000 Viacom Inc., 2.75%, 12/15/19 USA USD 1,504, ,500,000 Anthem Inc., senior note, 1.875%, 01/15/18 USA USD 1,500, ,500,000 Pricoa Global Funding I, secured note, 144A, 1.15%, 11/25/16 USA USD 1,498, ,500,000 Mondelez International Inc., senior note, FRN, 0.752%, 02/01/19 USA USD 1,484, ,500,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 1,463, ,172,000 UniCredit SpA, senior note, FRN, 2.088%, 10/31/17 ITA EUR 1,444, ,000,000 Depfa ACS Bank, secured bond, 1.65%, 12/20/16 IRL JPY 1,442, ,400,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 1,435, ,400,000 Enterprise Products Operating LLC, senior note, 2.55%, 10/15/19 USA USD 1,387, ,400,000 Petrofac Ltd., senior note, 144A, 3.40%, 10/10/18 GBR USD 1,357, ,300,000 Intesa Sanpaolo SpA, senior note, 2.375%, 01/13/17 ITA USD 1,310, ,500,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 1,290, ,500,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 1,282, ,200,000 The Export-Import Bank of Korea, senior note, FRN, 0.98%, 01/14/17 KOR USD 1,204, ,200,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.00%, 04/01/17 AUS USD 1,151, ,000,000 ArcelorMittal, senior note, 4.50%, 02/25/17 LUX USD 1,041, ,000,000 Aviation Capital Group Corp., senior note, 144A, 3.875%, 09/27/16 USA USD 1,025, ,000,000 The Southern Co., senior note, 2.45%, 09/01/18 USA USD 1,021, ,000,000 Edwards Lifesciences Corp., senior note, 2.875%, 10/15/18 USA USD 1,014, ,000,000 Ford Motor Credit Co. LLC, 2.50%, 01/15/16 USA USD 1,011, ,000,000 Duke Energy Corp., senior note, 2.10%, 06/15/18 USA USD 1,010, ,000,000 BB&T Corp., senior note, 2.05%, 06/19/18 USA USD 1,007, ,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 1,005, ,000,000 CVS Health Corp., senior note, 1.20%, 12/05/16 USA USD 1,003, ,000,000 Apple Inc., FRN, 0.482%, 05/03/18 USA USD 1,001, ,000,000 Time Warner Inc., senior note, 2.10%, 06/01/19 USA USD 986, ,000 Constellation Brands Inc., senior note, 7.25%, 05/15/17 USA USD 885, ,000,000 Clayton Williams Energy Inc., senior note, 7.75%, 04/01/19 USA USD 855, ,000 HCA Inc., senior secured note, first lien, 4.25%, 10/15/19 USA USD 813, ,889 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 811, ,000,000 Penn Virginia Corp., senior note, 8.50%, 05/01/20 USA USD 805, ,000 State Grid Overseas Investment 2014 Ltd., senior note, 144A, 2.75%, 05/07/19 CHN USD 804, ,000 Intesa Sanpaolo SpA, senior note, 3.875%, 01/15/19 ITA USD 726, ,000 Intesa Sanpaolo SpA, senior note, FRN, 0.229%, 05/18/17 ITA EUR 716, Unaudited Semi-Annual Report

293 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 700,000 CNPC HK Overseas Capital Ltd., senior note, 144A, 3.125%, 04/28/16 CHN USD 714, ,000 CIT Group Inc., 4.25%, 08/15/17 USA USD 613, ,000 Chesapeake Energy Corp., senior note, 6.50%, 08/15/17 USA USD 535, ,000 Hyundai Capital America, senior note, 144A, 4.00%, 06/08/17 KOR USD 524, ,000 Anheuser-Busch InBev NV, senior bond, Reg S, 2.875%, 09/25/24 BEL EUR 416, ,000 CIT Group Inc., senior note, 5.00%, 05/15/17 USA USD 416, ,000 Pernod Ricard SA, 2.125%, 09/27/24 FRA EUR 380, ,000 Veolia Environnement SA, senior bond, Reg S, 4.625%, 03/30/27 FRA EUR 317, ,000 Sanchez Energy Corp., senior note, 7.75%, 06/15/21 USA USD 280, ,975, Government and Municipal Bonds 12,300,000,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 11,438, ,454,560 U.S. Treasury Note, Index Linked, 0.125%, 04/15/16 USA USD 6,436, ,444,000 Government of Poland, Strip, 01/25/16 POL PLN 6,223, ,000,000 University of California Revenues, Series Y-1, Monthly VRDN and Put, 0.655%, 07/01/41 USA USD 6,011, ,000 Government of Mexico, 7.25%, 12/15/16 MEX MXN 4,287, ,000,000 Florida State Hurricane Catastrophe Fund Finance Corp. Revenue, Series A, 2.107%, 07/01/18 USA USD 4,041, ,250,000 Rhode Island State and Providence Plantations GO, Consolidated Capital Development Loan of 2012, Refunding, Series A, 5.00%, 08/01/19 USA USD 3,764, ,600,000 Government of Malaysia, senior note, 3.172%, 07/15/16 MYS MYR 3,299, ,720 Government of Mexico, 6.25%, 06/16/16 MEX MXN 2,695, ,250,000 Minnesota State GO, Series C, 2.50%, 08/01/18 USA USD 2,324, ,000,000 Government of Singapore, senior note, 1.125%, 04/01/16 SGP SGD 2,279, ,580,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 2,176, ,000,000 Acalanes UHSD, GO, Contra Costa County, Refunding, 1.427%, 08/01/18 USA USD 1,977, ,794,554 U.S. Treasury Note, Index Linked, 2.00%, 01/15/16 USA USD 1,821, ,380,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 1,670, ,600,000 Government of Serbia, senior note, 144A, 5.25%, 11/21/17 SER USD 1,644, ,390,000 Arkansas State GO, Four-Lane Highway Construction and Improvement Bonds, 3.25%, 06/15/22 USA USD 1,505, ,000,000 Texas State PFAR, Southern University Financing System, Refunding, BAM Insured, 5.00%, 11/01/20 USA USD 1,123, ,860,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Refunding, Series A, NATL RE, FGIC Insured, zero cpn., 08/01/45 USA USD 697, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 469, ,275,000 Government of Poland, 5.00%, 04/25/16 POL PLN 374, ,000 University of California Revenues, Series Y-2, Monthly VRDN and Put, 0.656%, 07/01/41 USA USD 310, ,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 08/01/46 USA USD 67, ,040,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 21, ,430,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 6, ,090,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 5, ,040,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 4, ,680, Securities Maturing Within One Year 50,000,000 U.S. Treasury Bill, 0.00%, 01/02/15 USA USD 50,000, ,700,000 U.S. Treasury Note, 4.00%, 02/15/15 USA USD 36,874, ,100,000 U.S. Treasury Note, 2.375%, 02/28/15 USA USD 36,232, ,000,000 U.S. Treasury Bill, 0.00%, 02/05/15 USA USD 24,999, ,000,000 U.S. Treasury Bill, 0.00%, 03/05/15 USA USD 24,999, ,000,000 U.S. Treasury Bill, 0.00%, 03/12/15 USA USD 24,999, ,000,000 U.S. Treasury Bill, 0.00%, 04/02/15 USA USD 19,998, ,000,000 U.S. Treasury Bill, 0.00%, 01/15/15 USA USD 14,999, ,600,000 FNMA, 0.50%, 07/02/15 USA USD 10,609, ,840,000 Prudential Covered Trust, secured note, 144A, 2.997%, 09/30/15 USA USD 9,979, ,000,000 Springleaf Finance Corp., senior note, I, 5.40%, 12/01/15 USA USD 8,220, ,000,000 International Lease Finance Corp., senior note, 8.625%, 09/15/15 USA USD 7,315, ,500,000 Ford Motor Credit Co. LLC, senior note, 7.00%, 04/15/15 USA USD 6,612, ,000,000 Government of Hungary, 4.75%, 02/03/15 HUN USD 6,020, ,400,000 Intesa Sanpaolo SpA, senior note, Reg S, FRN, 1.588%, 07/29/15 ITA EUR 5,356, ,000,000 Xstrata Finance Canada Ltd., secured note, 144A, 1.80%, 10/23/15 CHE USD 5,033, ,400,000 ING Bank NV, senior note, 144A, FRN, 1.895%, 09/25/15 NLD USD 4,445, ,200,000 UniCredit SpA, senior note, Reg S, FRN, 1.634%, 07/24/15 ITA EUR 3,894, ,690 Government of Mexico, 8.00%, 12/17/15 MEX MXN 3,787, ,500,000 Time Warner Inc., 3.15%, 07/15/15 USA USD 3,549, ,730,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 3,356, ,045,000 Toll Brothers Finance Corp., senior note, 5.15%, 05/15/15 USA USD 3,083, ,000,000,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 2,745, ,500,000 HCA Inc., senior bond, 7.19%, 11/15/15 USA USD 2,615, ,500,000 Anthem Inc., senior note, 1.25%, 09/10/15 USA USD 2,510, ,447,440,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 2,247, ,000,000 U.S. Treasury Note, 4.125%, 05/15/15 USA USD 2,029, Unaudited Semi-Annual Report 291

294 Franklin U.S. Low Duration Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 2,000,000 U.S. Treasury Note, 2.50%, 04/30/15 USA USD 2,015, ,000,000 U.S. Treasury Note, 2.50%, 03/31/15 USA USD 2,011, ,000,000 The Goldman Sachs Group Inc., 1.60%, 11/23/15 USA USD 2,011, ,000,000 U.S. Treasury Note, 0.375%, 04/15/15 USA USD 2,001, ,000,000 U.S. Treasury Note, 0.375%, 03/15/15 USA USD 2,001, ,030,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 1,729, ,300,000 Reynolds American Inc., senior note, 1.05%, 10/30/15 USA USD 1,301, ,243,563 U.S. Treasury Note, Index Linked, 1.625%, 01/15/15 USA USD 1,241, ,905,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 1,115, ,000,000 BB&T Corp., sub. note, 5.20%, 12/23/15 USA USD 1,040, ,540,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 1,022, ,000,000 Morgan Stanley, senior note, FRN, 0.711%, 10/15/15 USA USD 1,001, ,854,000 Government of Poland, 5.50%, 04/25/15 POL PLN 816, ,427,000 Government of Poland, 6.25%, 10/24/15 POL PLN 417, ,070,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 258, ,990,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 206, ,000 Government of Poland, Strip, 07/25/15 POL PLN 106, ,530,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 63, ,900 Government of Mexico, 6.00%, 06/18/15 MEX MXN 54, ,200,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 20, ,955, TOTAL BONDS 1,517,190, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 1,517,190, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 1,300,000 GDF Suez, senior note, 144A, 1.625%, 10/10/17 FRA USD 1,300, TOTAL BONDS 1,300, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 1,300, TOTAL INVESTMENTS 1,518,490, Floating Rates are indicated as at December 31, 2014 * These Corporate Bonds are currently in default 292 Unaudited Semi-Annual Report

295 Franklin U.S. Opportunities Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Banks 370,393 Signature Bank USA USD 46,654, Capital Goods 399,980 Precision Castparts Corp. USA USD 96,347, ,049,473 Flowserve Corp. USA USD 62,789, ,164 United Rentals Inc. USA USD 41,432, ,157,312 DigitalGlobe Inc. USA USD 35,841, ,903 Cummins Inc. USA USD 31,270, ,972 Hexcel Corp. USA USD 22,361, ,044, Commercial & Professional Service 403,164 IHS Inc., A USA USD 45,912, Consumer Durables & Apparel 970,424 Under Armour Inc., A USA USD 65,891, ,310 NIKE Inc., B USA USD 59,835, ,621 Harman International Industries Inc. USA USD 47,018, ,108 Michael Kors Holdings Ltd. USA USD 27,720, ,883 Kate Spade & Co. USA USD 24,483, ,949, Consumer Services 984,998 Starbucks Corp. USA USD 80,819, ,100,034 Las Vegas Sands Corp. USA USD 63,977, ,450 Chipotle Mexican Grill Inc. USA USD 56,437, ,802 Buffalo Wild Wings Inc. USA USD 33,875, ,110, Diversified Financials 1,806,353 The Charles Schwab Corp. USA USD 54,533, ,941 Affiliated Managers Group Inc. USA USD 51,561, ,030 BlackRock Inc. USA USD 38,627, ,722, Energy 723,521 Anadarko Petroleum Corp. USA USD 59,690, ,803 Diamondback Energy Inc. USA USD 45,241, ,918 Schlumberger Ltd. USA USD 34,925, ,857, Food, Beverage & Tobacco 421,045 Monster Beverage Corp. USA USD 45,620, ,390 Mead Johnson Nutrition Co., A USA USD 43,874, ,080 Boston Beer Inc., A USA USD 28,687, ,182, Health Care Equipment & Services 950,016 Envision Healthcare Holdings Inc. USA USD 32,956, ,326,022 HMS Holdings Corp. USA USD 28,032, ,988, Materials 548,662 LyondellBasell Industries NV, A USA USD 43,558, ,222 Martin Marietta Materials Inc. USA USD 34,003, ,871 Axalta Coating Systems Ltd. USA USD 23,518, ,080, Media 1,022,370 The Walt Disney Co. USA USD 96,297, ,640 DISH Network Corp., A USA USD 39,115, ,672 Liberty Broadband Corp., C USA USD 11,741, ,153, Pharmaceuticals, Biotechnology & Life Sciences 1,645,111 Celgene Corp. USA USD 184,022, ,633 Actavis PLC USA USD 162,073, ,134,688 Gilead Sciences Inc. USA USD 106,955, ,659 Biogen Idec Inc. USA USD 90,177, ,489 Perrigo Co. PLC USA USD 70,623, ,584 Valeant Pharmaceuticals International Inc. CAN USD 69,921, ,284 Medivation Inc. USA USD 67,364, ,963 Illumina Inc. USA USD 62,196, ,257 Jazz Pharmaceuticals PLC USA USD 56,856, ,395 Alnylam Pharmaceuticals Inc. USA USD 39,905, ,877 Allergan Inc. USA USD 36,539, Unaudited Semi-Annual Report 293

296 Franklin U.S. Opportunities Fund Schedule of Investments as of December 31, 2014 (continued) face Pharmaceuticals, Biotechnology & Life Sciences (continued) 1,353,100 VWR Corp. USA USD 35,004, ,328 Karyopharm Therapeutics Inc. USA USD 34,597, ,454 Incyte Corp. USA USD 28,984, ,014,606 Sagent Pharmaceuticals Inc. USA USD 25,476, ,311,345 Celldex Therapeutics Inc. USA USD 23,932, ,094,632, Real Estate 1,609,801 CBRE Group Inc. USA USD 55,135, ,444 American Tower Corp. USA USD 33,850, ,627 Outfront Media Inc. USA USD 23,877, ,863, Retailing 68,919 The Priceline Group Inc. USA USD 78,582, ,291 Amazon.com Inc. USA USD 74,263, ,501 Lowe s Cos. Inc. USA USD 48,469, ,871 Tile Shop Holdings Inc. USA USD 8,710, ,025, Semiconductors & Semiconductor Equipment 599,871 Avago Technologies Ltd. SGP USD 60,341, ,240 NXP Semiconductors NV NLD USD 55,408, ,467 Texas Instruments Inc. USA USD 23,014, ,406,893 ARM Holdings PLC GBR GBP 21,819, ,583, Software & Services 1,815,495 MasterCard Inc., A USA USD 156,423, ,739,178 Facebook Inc., A USA USD 135,690, ,467 Visa Inc., A USA USD 104,740, ,389 Google Inc., A USA USD 88,826, ,806 Google Inc., C USA USD 62,013, ,294 Salesforce.com Inc. USA USD 44,796, ,513 Alibaba Group Holding Ltd., ADR CHN USD 38,822, ,718 Adobe Systems Inc. USA USD 35,457, ,586 ServiceNow Inc. USA USD 34,032, ,942 NetSuite Inc. USA USD 33,181, ,924 LinkedIn Corp., A USA USD 29,385, ,776 BroadSoft Inc. USA USD 27,040, ,815 Mobileye NV USA USD 18,852, ,262, Technology Hardware & Equipment 1,209,693 Apple Inc. USA USD 133,525, ,402 Palo Alto Networks Inc. USA USD 37,187, ,829 ViaSat Inc. USA USD 32,701, ,050 QUALCOMM Inc. USA USD 22,971, ,247 Ubiquiti Networks Inc. USA USD 5,638, ,026, Telecommunication Services 1,286,558 SBA Communications Corp. USA USD 142,499, Transportation 1,222,664 American Airlines Group Inc. USA USD 65,571, ,441 Kansas City Southern USA USD 53,991, ,659 Allegiant Travel Co. USA USD 34,374, ,936, TOTAL SHARES 4,470,487, RIGHTS Media 47,134 Liberty Broadband Corp., rts., 01/09/15 USA USD 447, TOTAL RIGHTS 447, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 4,470,935, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Securities Maturing Within One Year 22,500,000 U.S. Treasury Bill, 0.00%, 01/02/15 USA USD 22,500, TOTAL BONDS 22,500, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 22,500, TOTAL INVESTMENTS 4,493,435, Unaudited Semi-Annual Report

297 Franklin U.S. Small-Mid Cap Growth Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Discretionary 67,525 Jarden Corp. USA USD 3,233, ,300 Chipotle Mexican Grill Inc. USA USD 2,943, ,100 Marriott International Inc., A USA USD 2,894, ,700 Buffalo Wild Wings Inc. USA USD 2,831, ,300 Harman International Industries Inc. USA USD 2,379, ,200 KB Home USA USD 2,336, ,500 Netflix Inc. USA USD 2,220, ,300 Dick s Sporting Goods Inc. USA USD 2,199, ,300 Tenneco Inc. USA USD 2,111, ,800 BorgWarner Inc. USA USD 2,077, ,000 Advance Auto Parts Inc. USA USD 1,911, ,100 Tractor Supply Co. USA USD 1,899, ,082 IMAX Corp. CAN USD 1,887, ,335 MGM Resorts International USA USD 1,803, ,300 Charter Communications Inc., A USA USD 1,716, ,300 Dollar Tree Inc. USA USD 1,710, ,200 Grand Canyon Education Inc. USA USD 1,689, ,800 L Brands Inc. USA USD 1,627, ,700 Wolverine World Wide Inc. USA USD 1,523, ,400 Under Armour Inc., A USA USD 1,520, ,900 Norwegian Cruise Line Holdings Ltd. USA USD 1,398, ,897 Wynn Resorts Ltd. USA USD 1,323, ,100 Nordstrom Inc. USA USD 1,278, ,900 Zoe s Kitchen Inc. USA USD 1,163, ,000 Shutterfly Inc. USA USD 1,125, ,300 Global Eagle Entertainment Inc. USA USD 847, ,900 Polaris Industries Inc. USA USD 741, ,200 Zulily Inc. USA USD 706, ,275 Liberty Broadband Corp., C USA USD 611, ,900 Wayfair Inc., A USA USD 454, ,167, Consumer Staples 9,100 Boston Beer Inc., A USA USD 2,634, ,406 TreeHouse Foods Inc. USA USD 2,172, ,200 Monster Beverage Corp. USA USD 1,863, ,000 Whole Foods Inc. USA USD 1,462, ,300 Freshpet Inc. USA USD 841, ,974, Energy 21,900 Concho Resources Inc. USA USD 2,184, ,090 Cabot Oil & Gas Corp., A USA USD 2,075, ,300 EQT Corp. USA USD 1,990, ,900 Diamondback Energy Inc. USA USD 1,548, ,400 Oceaneering International Inc. USA USD 964, ,400 Matador Resources Co. USA USD 756, ,500 Cheniere Energy Inc. USA USD 598, ,800 Pioneer Energy Services Corp. USA USD 458, ,800 Rex Energy Corp. USA USD 447, ,025, Financials 16,600 Affiliated Managers Group Inc. USA USD 3,523, ,800 Intercontinental Exchange Inc. USA USD 3,464, ,000 Signature Bank USA USD 2,897, ,900 T. Rowe Price Group Inc. USA USD 2,395, ,300 Lazard Ltd., A USA USD 1,866, ,700 LPL Financial Holdings Inc. USA USD 1,545, ,400 Brown & Brown Inc. USA USD 1,494, ,700 Jones Lang LaSalle Inc. USA USD 1,004, ,191, Health Care 18,691 Perrigo Co. PLC USA USD 3,124, ,300 HCA Holdings Inc. USA USD 3,031, ,800 Quintiles Transnational Holdings Inc. USA USD 2,990, ,000 The Cooper Cos. Inc. USA USD 2,593, ,852 Impax Laboratories Inc. USA USD 2,434, ,000 St. Jude Medical Inc. USA USD 2,341, ,700 DaVita HealthCare Partners Inc. USA USD 2,249, ,500 Catamaran Corp. USA USD 2,199, ,100 Cerner Corp. USA USD 2,140, ,100 DENTSPLY International Inc. USA USD 2,136, ,900 Mettler-Toledo International Inc. USA USD 2,086, Unaudited Semi-Annual Report 295

298 Franklin U.S. Small-Mid Cap Growth Fund Schedule of Investments as of December 31, 2014 (continued) face Health Care (continued) 55,900 Envision Healthcare Holdings Inc. USA USD 1,939, ,500 Illumina Inc. USA USD 1,938, ,600 Edwards Lifesciences Corp. USA USD 1,604, ,700 Alnylam Pharmaceuticals Inc. USA USD 1,522, ,300 Agilent Technologies Inc. USA USD 1,363, ,200 Medivation Inc. USA USD 1,314, ,300 Celldex Therapeutics Inc. USA USD 1,155, ,200 DexCom Inc. USA USD 1,056, ,600 Vertex Pharmaceuticals Inc. USA USD 1,021, ,500 HMS Holdings Corp. USA USD 919, ,000 BioMarin Pharmaceutical Inc. USA USD 904, ,600 Hologic Inc. USA USD 898, ,900 Insulet Corp. USA USD 824, ,206 Karyopharm Therapeutics Inc. USA USD 756, ,000 Revance Therapeutics Inc. USA USD 677, ,500 Sagent Pharmaceuticals Inc. USA USD 640, ,500 Incyte Corp. USA USD 621, ,600 Keryx Biopharmaceuticals Inc. USA USD 616, ,604 HeartWare International Inc. USA USD 558, ,600 Tandem Diabetes Care Inc. USA USD 515, ,200 Puma Biotechnology Inc. USA USD 416, ,200 Intercept Pharmaceuticals Inc. USA USD 343, ,700 Portola Pharmaceuticals Inc. USA USD 274, ,880 Nevro Corp. USA USD 227, ,439, Industrials 68,200 AMETEK Inc. USA USD 3,589, ,100 Robert Half International Inc. USA USD 3,099, ,000 IHS Inc., A USA USD 2,733, ,200 Roper Industries Inc. USA USD 2,689, ,600 DigitalGlobe Inc. USA USD 2,620, ,400 HD Supply Holdings Inc. USA USD 2,547, ,100 Spirit Airlines Inc. USA USD 2,501, ,300 Hexcel Corp. USA USD 1,920, ,700 L-3 Communications Holdings Inc. USA USD 1,855, ,000 Flowserve Corp. USA USD 1,854, ,000 Genesee & Wyoming Inc. USA USD 1,798, ,100 Proto Labs Inc. USA USD 1,752, ,600 WABCO Holdings Inc. USA USD 1,739, ,700 The Advisory Board Co. USA USD 1,356, ,899 Allegiant Travel Co. USA USD 1,337, ,300 Kansas City Southern USA USD 1,256, ,500 B/E Aerospace Inc. USA USD 1,247, ,800 J.B. Hunt Transport Services Inc. USA USD 1,246, ,400 Rockwell Automation Inc. USA USD 1,156, ,000 Towers Watson & Co. USA USD 905, ,210, Information Technology 45,900 NXP Semiconductors NV NLD USD 3,506, ,907 ViaSat Inc. USA USD 2,893, ,245 Applied Materials Inc. USA USD 2,647, ,800 Intersil Corp., A USA USD 2,529, ,100 Avago Technologies Ltd. SGP USD 2,524, ,602 FleetCor Technologies Inc. USA USD 2,320, ,700 Electronic Arts Inc. USA USD 2,289, ,400 Yelp Inc. USA USD 2,046, ,000 Red Hat Inc. USA USD 2,005, ,803 Equinix Inc. USA USD 1,995, ,500 Twitter Inc. USA USD 1,990, ,300 Stratasys Ltd. USA USD 1,936, ,200 LinkedIn Corp., A USA USD 1,883, ,800 CoStar Group Inc. USA USD 1,799, ,900 Cognex Corp. USA USD 1,731, ,300 Xilinx Inc. USA USD 1,614, ,700 JDS Uniphase Corp. USA USD 1,559, ,200 VeriFone Systems Inc. USA USD 1,421, ,700 NetSuite Inc. USA USD 1,277, ,300 Vantiv Inc., A USA USD 1,231, ,300 HomeAway Inc. USA USD 1,229, ,300 Lam Research Corp. USA USD 1,213, ,800 ANSYS Inc. USA USD 1,213, ,000 Freescale Semiconductor Ltd. USA USD 1,211, ,800 Pandora Media Inc. USA USD 1,119, ,000 Fidelity National Information Services Inc. USA USD 1,119, ,500 Alliance Data Systems Corp. USA USD 1,001, ,300 Demandware Inc. USA USD 995, Unaudited Semi-Annual Report

299 Franklin U.S. Small-Mid Cap Growth Fund Schedule of Investments as of December 31, 2014 (continued) face Information Technology (continued) 10,570 Workday Inc. USA USD 862, ,200 ServiceNow Inc. USA USD 827, ,900 Semtech Corp. USA USD 796, ,800 Trimble Navigation Ltd. USA USD 790, ,900 Bottomline Technologies Inc. USA USD 680, ,150 Mobileye NV USA USD 290, ,558, Materials 103,800 Axalta Coating Systems Ltd. USA USD 2,700, ,700 Cytec Industries Inc. USA USD 2,063, ,400 Martin Marietta Materials Inc. USA USD 2,029, ,200 H.B. Fuller Co. USA USD 1,656, ,451, Utilities 66,300 Calpine Corp. USA USD 1,467, TOTAL SHARES 243,485, RIGHTS Consumer Discretionary 2,455 Liberty Broadband Corp., rts., 01/09/15 USA USD 23, TOTAL RIGHTS 23, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 243,509, TOTAL INVESTMENTS 243,509, Unaudited Semi-Annual Report 297

300 Franklin U.S. Total Return Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobile Manufacturers 240 General Motors Co. USA USD 8, Banks 16,000 U.S. Bancorp, 6.00%, pfd., G USA USD 433, TOTAL SHARES 442, WARRANTS Automobile Manufacturers 217 General Motors Co., wts., 07/10/16 USA USD 5, General Motors Co., wts., 07/10/19 USA USD 3, , TOTAL WARRANTS 9, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 451, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Paper & Forest Products 100 NewPage Holdings Inc. USA USD 9, TOTAL SHARES 9, BONDS Asset-Backed Securities 8,200,000 FNMA, 4.00%, 01/01/41 USA USD 8,752, ,700,000 FNMA, 3.00%, 01/01/30 USA USD 6,964, ,750,000 FNMA, 3.00%, 01/01/43 USA USD 4,805, ,700,000 FHLMC, 4.00%, 01/01/41 USA USD 1,812, ,300,000 GNMA, II, SF, 3.50%, 01/01/43 USA USD 1,364, ,000 Capital One Multi-Asset Execution Trust, 2007-A2, A2, FRN, 0.241%, 12/16/19 USA USD 736, ,000 Chase Issuance Trust, 2014-A3, A3, FRN, 0.361%, 05/15/18 USA USD 719, ,925 Colony MFM Trust, , A, 144A, 2.543%, 04/20/55 USA USD 685, ,000 Bear Stearns Commercial Mortgage Securities Inc., 2007-PW16, AM, FRN, 5.706%, 06/11/40 USA USD 654, ,152 FHLMC, 5.00%, 02/01/39 USA USD 653, ,000 Greenwich Capital Commercial Funding Corp., 2007-GG9, A4, 5.444%, 03/10/39 USA USD 640, ,000 Morgan Stanley Capital I Trust, 2007-IQ16, AM, FRN, 6.099%, 12/12/49 USA USD 627, ,000 Banc of America Commercial Mortgage Trust, , AJ, 5.695%, 07/10/46 USA USD 594, ,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW11, AJ, FRN, 5.605%, 03/11/39 USA USD 571, ,000 LB-UBS Commercial Mortgage Trust, 2006-C4, AJ, FRN, 5.857%, 06/15/38 USA USD 553, ,000 Morgan Stanley Capital I Trust, 2007-IQ16, AMA, FRN, 6.094%, 12/12/49 USA USD 545, ,000 Wachovia Bank Commercial Mortgage Trust, 2006-C28, AM, FRN, 5.603%, 10/15/48 USA USD 543, ,000 FNMA, 3.50%, 01/01/42 USA USD 542, ,000 Greenwich Capital Commercial Funding Corp., 2006-GG7, AJ, FRN, 5.82%, 07/10/38 USA USD 534, ,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW13, AJ, 5.611%, 09/11/41 USA USD 518, ,000 Banc of America Commercial Mortgage Trust, , AM, FRN, 5.598%, 06/10/49 USA USD 508, ,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-LDP7, AJ, FRN, 5.873%, 04/15/45 USA USD 492, ,000 Chase Issuance Trust, 2013-A6, A6, FRN, 0.581%, 07/15/20 USA USD 481, ,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-CB17, AM, 5.464%, 12/12/43 USA USD 477, ,000 Citigroup Commercial Mortgage Trust, 2006-C5, AJ, 5.482%, 10/15/49 USA USD 467, ,317 FNMA, 6.00%, 02/01/37 USA USD 448, ,162 ARCap REIT Inc., 2004-RR3, A2, 144A, FRN, 4.76%, 09/21/45 USA USD 446, ,000 West CLO Ltd., A, B, 144A, FRN, 3.083%, 07/18/26 USA USD 435, ,000 American Express Credit Account Master Trust, , A, FRN, 1.421%, 09/15/20 USA USD 432, ,580 Greenpoint Manufactured Housing, , 1A7, 7.27%, 06/15/29 USA USD 428, ,000 ARES CLO Ltd., RA, B, 144A, FRN, 0.599%, 04/16/21 USA USD 422, ,368 Babson CLO Inc., A, A1, 144A, FRN, 0.456%, 01/18/21 USA USD 380, ,537 Talisman 6 Finance, Reg S, FRN, 0.262%, 10/22/16 DEU EUR 373, ,400 Catamaran CLO Ltd., A, B, 144A, FRN, 3.27%, 10/18/26 USA USD 320, ,000 American Express Credit Account Secured Note Trust, , A, FRN, 0.401%, 05/15/20 USA USD 319, ,000 Colony American Homes, A, A, 144A, FRN, 1.40%, 05/17/31 USA USD 314, ,000 Citibank Credit Card Issuance Trust, 2013-A7, A7, FRN, 0.592%, 09/10/20 USA USD 310, ,311 CT CDO IV Ltd., A, A1, 144A, FRN, 0.475%, 10/20/43 USA USD 304, ,000 Veritas CLO Ltd., A, A2, 144A, FRN, 0.56%, 07/11/21 USA USD 296, ,715 ARES XI CLO Ltd., A, A1C, 144A, FRN, 0.50%, 10/11/21 USA USD 296, Unaudited Semi-Annual Report

301 Franklin U.S. Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 292,464 FNMA, , FN, FRN, 0.52%, 01/25/36 USA USD 291, ,953 FNMA, ARM, 1.914%, 09/01/34 USA USD 280, ,000 Chase Issuance Trust, 2012-A8, A8, 0.54%, 10/16/17 USA USD 279, ,620 FNMA, 4.50%, 12/01/40 USA USD 272, ,000 GSAA Home Equity Trust, 05-5, M3, FRN, 1.115%, 02/25/35 USA USD 236, ,000 American Express Credit Account Master Trust, , A, FRN, 0.431%, 01/15/20 USA USD 229, ,000 Morgan Stanley Capital I Trust, 2006-HQ8, AJ, FRN, 5.497%, 03/12/44 USA USD 226, ,000 G-Force LLC, 2005-RRA, C, 144A, 5.20%, 08/22/36 USA USD 217, ,050 Ameriquest Mortgage Securities Inc. Asset-Backed Pass-Through Certificates, 2004-R4, M1, FRN, 0.995%, 06/25/34 USA USD 214, ,000 Apidos CDO, A, C2, 144A, 4.85%, 04/15/25 USA USD 213, ,000 Citibank Credit Card Issuance Trust, 2012-A1, A1, 0.55%, 10/10/17 USA USD 199, ,000 American Express Credit Account Master Trust, , A, FRN, 0.311%, 03/15/18 USA USD 199, ,000 Citibank Credit Card Issuance Trust, 2013-A12, A12, FRN, 0.462%, 11/07/18 USA USD 199, ,197 American Home Mortgage Investment Trust, , 4A, FRN, 1.833%, 10/25/34 USA USD 197, ,929 Structured Asset Securities Corp., 2006-WF1, A5, FRN, 0.47%, 02/25/36 USA USD 169, ,000 West CLO Ltd., A, A2, 144A, FRN, 2.333%, 07/18/26 USA USD 167, ,055 Citigroup Mortgage Loan Trust Inc., 2013-A, A, 144A, FRN, 3.00%, 05/25/42 USA USD 161, ,530 FHLMC, 5.50%, 09/01/35 USA USD 157, ,000 Citibank Credit Card Issuance Trust, 2014-A9, A9, FRN, 0.358%, 05/09/18 USA USD 150, ,071 Credit Suisse Mortgage Capital Certificates, R, 3A1, 144A, FRN, 5.333%, 03/26/36 USA USD 146, ,000 Argent Securities Inc., 2005-W2, A2C, FRN, 0.53%, 10/25/35 USA USD 144, ,048 Bayview Financial Acquisition Trust, 2004-D, M1, FRN, 0.80%, 08/28/44 USA USD 132, ,000 Greenwich Capital Commercial Funding Corp., 2006-GG7, AM, FRN, 6.014%, 07/10/38 USA USD 131, ,578 FNMA, ARM, 2.726%, 11/01/32 USA USD 131, ,731 Legacy Benefits Insurance Settlements LLC, , A, 144A, 5.35%, 02/10/39 USA USD 131, ,000 JPMorgan Chase Commercial Mortgage Securities Trust, 2006-CB16, B, FRN, 5.672%, 05/12/45 USA USD 123, ,000 Chase Issuance Trust, 2012-A3, A3, 0.79%, 06/15/17 USA USD 120, ,000 Capital One Multi-Asset Execution Trust, 2007-A1, A1, FRN, 0.211%, 11/15/19 USA USD 119, ,934 Wells Fargo Mortgage Backed Securities Trust, 2004-I, 2A1, FRN, 2.654%, 06/25/34 USA USD 107, ,500 Eaton Vance CDO Ltd., A, B, 144A, FRN, 2.285%, 07/15/26 USA USD 106, ,600 Credit Suisse First Boston Mortgage Securities Corp., , 3A1, 5.00%, 09/25/19 USA USD 105, ,000 Bear Stearns Commercial Mortgage Securities Inc., 2006-PW12, AJ, FRN, 5.751%, 09/11/38 USA USD 105, ,214 Green Tree Financial Corp., , M1, 7.63%, 08/15/27 USA USD 103, ,455 FNMA, 5.00%, 10/01/34 USA USD 101, ,000 American Express Credit Account Master Trust, , A, FRN, 1.361%, 02/15/18 USA USD 100, ,000 Chase Issuance Trust, 2012-A9, A9, FRN, 0.311%, 10/16/17 USA USD 99, ,000 Chase Issuance Trust, 2012-A6, A, FRN, 0.291%, 08/15/17 USA USD 99, ,107 American Homes 4 Rent, 2014-SFR1, A, 144A, FRN, 1.25%, 06/17/31 USA USD 98, ,900 Eaton Vance CDO Ltd., A, C, 144A, FRN, 3.235%, 07/15/26 USA USD 89, ,137 Peru Enhanced Pass-Through Finance Ltd., senior secured bond, A-1, Reg S, zero cpn., 05/31/18 PER USD 89, ,410 Chase Funding Mortgage Loan Asset-Backed Certificates, , 2A2, FRN, 0.67%, 02/25/35 USA USD 79, ,475 Morgan Stanley Capital I Trust, 2005-RR6, AJ, 144A, 5.233%, 05/24/43 USA USD 77, ,240 Morgan Stanley ABS Capital I Inc. Trust, 2003-HE1, M1, FRN, 1.37%, 05/25/33 USA USD 75, ,000 GMAC Commercial Mortgage Securities Inc., 2005-C1, B, 4.936%, 05/10/43 USA USD 75, ,065 FNMA, 6.00%, 02/01/36 USA USD 72, ,000 Emerson Park CLO Ltd., A, C2, 144A, 5.64%, 07/15/25 USA USD 71, ,000 Highbridge Loan Management Ltd., A, B2, 144A, 5.80%, 10/20/24 USA USD 70, ,095 Home Equity Mortgage Trust, , M3, FRN, 1.145%, 12/25/34 USA USD 68, ,067 wide Asset-Backed Certificates, , M1, FRN, 0.92%, 03/25/34 USA USD 67, ,126 Crest Ltd., A, C2, 144A, 5.709%, 12/28/38 USA USD 62, ,271 wide Asset-Backed Certificates, , 1A2, FRN, 0.91%, 12/25/34 USA USD 60, ,891 Morgan Stanley ABS Capital I Inc. Trust, 2005-WMC, M2, FRN, 0.905%, 01/25/35 USA USD 59, ,114 FNMA, 6.00%, 05/01/36 USA USD 56, ,317 FNMA, ARM, 2.304%, 02/01/34 USA USD 55, ,016 Aames Mortgage Investment Trust, , M1, FRN, 0.875%, 10/25/35 USA USD 52, ,327 Newcastle CDO IV Ltd., A, 1, 144A, FRN, 0.595%, 12/24/39 USA USD 48, ,898 Wells Fargo Mortgage Backed Securities Trust, 2004-W, A9, FRN, 2.616%, 11/25/34 USA USD 48, ,030 GNMA, SF, 5.00%, 05/15/34 USA USD 47, ,633 Long Beach Mortgage Loan Trust, 2005-WL2, M1, FRN, 0.64%, 08/25/35 USA USD 46, ,330 FNMA, 5.50%, 04/01/35 USA USD 36, ,072 FNMA, 7.50%, 02/01/30 USA USD 34, Unaudited Semi-Annual Report 299

302 Franklin U.S. Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Asset-Backed Securities (continued) 33,268 JPMorgan Mortgage Acquisition Corp., 2006-ACC1, A4, FRN, 0.32%, 05/25/36 USA USD 32, ,985 Bear Stearns Alt-A Trust, , A2, FRN, 1.05%, 11/25/34 USA USD 26, ,907 FNMA, 6.00%, 06/01/38 USA USD 22, ,143 FHLMC, 7.00%, 05/01/32 USA USD 20, ,696 FHLMC, 6.50%, 03/01/38 USA USD 20, ,511 Residential Asset Securities Corp., 2004-KS1, AI4, 4.213%, 04/25/32 USA USD 19, ,669 GNMA, ARM, 1.625%, 09/20/29 USA USD 19, ,764 FNMA, ARM, 2.30%, 12/01/34 USA USD 17, ,587 FHLMC, 5.50%, 08/01/33 USA USD 17, ,373 FHLMC, 4.50%, 04/01/20 USA USD 17, ,167 FNMA, ARM, 2.31%, 12/01/34 USA USD 16, ,068 FNMA, 6.00%, 10/01/34 USA USD 16, ,386 FNMA, 6.50%, 01/01/36 USA USD 14, ,377 GNMA, ARM, 3.50%, 08/20/20 USA USD 13, ,403 place Manufactured Housing Contract Trust, 2005-A3, 144A, 4.80%, 12/15/35 USA USD 13, ,334 FNMA, 5.50%, 04/01/36 USA USD 11, ,070 GNMA, SF, 5.50%, 06/15/34 USA USD 11, ,727 FNMA, 5.00%, 05/01/18 USA USD 11, ,329 FNMA, 5.00%, 04/01/20 USA USD 11, ,721 Wells Fargo Mortgage Backed Securities Trust, , 3A1, 5.50%, 04/25/37 USA USD 11, ,252 FNMA, 5.00%, 01/01/20 USA USD 10, ,288 FNMA, 5.50%, 09/01/19 USA USD 8, ,217 FHLMC, ARM, 2.287%, 09/01/32 USA USD 8, ,979 FNMA, 4.50%, 04/01/19 USA USD 8, ,658 FHLMC, 4.50%, 09/01/18 USA USD 8, ,944 GNMA, SF, 6.50%, 11/15/32 USA USD 7, ,885 GNMA, 6.50%, 09/15/32 USA USD 6, ,364 GNMA, SF, 6.00%, 03/15/33 USA USD 6, ,497 FNMA, 5.00%, 01/01/20 USA USD 5, ,084 FHLMC, 4.50%, 03/01/20 USA USD 5, ,466 GNMA, SF, 5.50%, 07/15/33 USA USD 3, ,244 GNMA, SF, 5.00%, 03/15/34 USA USD 3, ,071 FHLMC, 5.50%, 06/01/18 USA USD 3, ,305 FHLMC, 6.00%, 08/01/17 USA USD 2, ,996 FNMA, 4.50%, 04/01/19 USA USD 2, ,686 Chase Funding Mortgage Loan Asset-Backed Certificates, , 2A2, FRN, 0.77%, 07/25/33 USA USD 1, ,382 Residential Asset Securities Corp., 2005-AHL2, A2, FRN, 0.43%, 10/25/35 USA USD 1, FHLMC, 5.00%, 03/01/19 USA USD ,941, Corporate Bonds 2,000,000 DISH DBS Corp., senior note, 7.125%, 02/01/16 USA USD 2,107, ,000,000 Kinder Morgan Finance Co. LLC, senior bond, 5.70%, 01/05/16 USA USD 2,076, ,000,000 CIT Group Inc., senior note, 5.00%, 05/15/17 USA USD 1,040, ,000,000 Wachovia Capital Trust III, junior sub. bond, FRN, 5.570%, Perpetual USA USD 970, ,000 Constellation Brands Inc., senior note, 7.25%, 05/15/17 USA USD 885, ,000 Teachers Insurance & Annuity Assn. of America, sub. bond, 144A, 4.90%, 09/15/44 USA USD 671, ,000 Liberty Mutual Group Inc., senior note, 144A, 4.95%, 05/01/22 USA USD 650, ,000 The Kroger Co., senior note, 4.00%, 02/01/24 USA USD 631, ,000 Mondelez International Inc., senior bond, 4.00%, 02/01/24 USA USD 628, ,000 Altria Group Inc., senior bond, 4.00%, 01/31/24 USA USD 626, ,000 Viacom Inc., senior bond, 4.25%, 09/01/23 USA USD 619, ,000 Intesa Sanpaolo SpA, senior note, 2.375%, 01/13/17 ITA USD 605, ,000 United Overseas Bank Ltd., senior note, Reg S, 2.50%, 03/18/20 SGP USD 603, ,000 JPMorgan Chase & Co., junior sub. note, X, 6.10% to 10/01/24, FRN thereafter, Perpetual USA USD 600, ,000 News America Inc., 3.00%, 09/15/22 USA USD 596, ,000,000 Depfa ACS Bank, secured bond, 1.65%, 12/20/16 IRL JPY 594, ,000 Telefonica Emisiones SAU, senior note, 4.57%, 04/27/23 ESP USD 536, ,000 Georgia Power Co., senior note, 4.30%, 03/15/42 USA USD 527, ,000 Apache Corp., senior bond, 4.25%, 01/15/44 USA USD 526, ,000 DENTSPLY International Inc., senior note, 4.125%, 08/15/21 USA USD 524, ,000 Bed Bath & Beyond Inc, senior bond, 5.165%, 08/01/44 USA USD 522, ,000 Sydney Airport Finance Co. Pty. Ltd., 144A, 3.90%, 03/22/23 AUS USD 515, ,000 Banco Popular Espanol SA, secured note, Reg S, 2.125%, 10/08/19 ESP EUR 515, ,000 Aflac Inc., senior bond, 3.625%, 06/15/23 USA USD 513, ,000 Alcatel-Lucent USA Inc., senior note, 144A, 4.625%, 07/01/17 FRA USD 507, ,000 Alpek SA de CV, senior note, 144A, 4.50%, 11/20/22 MEX USD 505, ,000 JPMorgan Chase & Co., senior note, 3.25%, 09/23/22 USA USD 503, ,000 Kinder Morgan Energy Partners LP, senior note, 4.25%, 09/01/24 USA USD 501, ,000 Korea Exchange Bank, senior note, Reg S, 2.00%, 04/02/18 KOR USD 495, ,000 Zoetis Inc., senior bond, 3.25%, 02/01/23 USA USD 494, ,000 AIA Group Ltd., senior note, Reg S, 1.75%, 03/13/18 HKG USD 493, ,000 Maxim Integrated Products Inc., senior note, 3.375%, 03/15/23 USA USD 493, ,000 AbbVie Inc., senior note, 2.90%, 11/06/22 USA USD 493, Unaudited Semi-Annual Report

303 Franklin U.S. Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 500,000 Cencosud SA, senior note, 144A, 4.875%, 01/20/23 CHL USD 493, ,000 Banco do Brasil SA/Cayman, sub. note, 144A, 5.875%, 01/26/22 BRA USD 488, ,000 Glencore Funding LLC, senior note, 144A, 4.125%, 05/30/23 CHE USD 488, ,000 CVS Health Corp., 2.75%, 12/01/22 USA USD 487, ,000 Citigroup Inc., sub. note, 3.50%, 05/15/23 USA USD 487, ,000 Anheuser-Busch InBev Worldwide Inc., senior note, 2.50%, 07/15/22 BEL USD 486, ,000 Deutsche Bank AG, sub. bond, 4.296% to 05/24/23, FRN thereafter, 05/24/28 DEU USD 486, ,000 Beazer Homes USA Inc., senior note, 5.75%, 06/15/19 USA USD 481, ,000 CNOOC Finance 2013 Ltd., senior note, 3.00%, 05/09/23 CHN USD 474, ,000 Woori Bank, sub.note, 144A, 4.75%, 04/30/24 KOR USD 466, ,000 Petrobras Global Finance BV, senior note, FRN, 3.123%, 03/17/20 BRA USD 453, ,000 Bank of America Corp., senior note, 5.625%, 10/14/16 USA USD 428, ,000 Sinopec Group Overseas Development 2014 Ltd., senior note, 144A, 4.375%, 04/10/24 CHN USD 421, ,000 Realty Income Corp., senior bond, 4.125%, 10/15/26 USA USD 408, ,000 CNPC General Capital Ltd., senior bond, 144A, 3.95%, 04/19/22 HKG USD 408, ,000 Casino Guichard Perrachon SA, senior note, Reg S, 3.311%, 01/25/23 FRA EUR 407, ,000 HCP Inc., senior bond, 3.875%, 08/15/24 USA USD 407, ,000 Morgan Stanley, senior sub. bond, 4.35%, 09/08/26 USA USD 402, ,000 El Paso Pipeline Partners Operating Co. LLC, senior note, 4.30%, 05/01/24 USA USD 401, ,000 LUKOIL International Finance BV, senior note, 144A, 4.563%, 04/24/23 RUS USD 400, ,000 Alibaba Group Holding Ltd., senior note, 144A, 3.60%, 11/28/24 CHN USD 397, ,000 EnLink Midstream Partners LP, senior bond, 5.05%, 04/01/45 USA USD 387, ,000 Unione di Banche Italiane SCpA, senior note, Reg S, 2.875%, 02/18/19 ITA EUR 387, ,000 American Tower Corp., senior bond, 3.50%, 01/31/23 USA USD 387, ,000 Bankinter SA, senior note, Reg S, 1.75%, 06/10/19 ESP EUR 375, ,000 Time Warner Inc., 6.10%, 07/15/40 USA USD 366, ,000 United Technologies Corp., senior note, 3.10%, 06/01/22 USA USD 351, ,000 Lyondellbasell Industries NV, senior note, 5.75%, 04/15/24 USA USD 343, ,000 Verizon Communications Inc., senior bond, 6.40%, 09/15/33 USA USD 336, ,000 Banco Comercial Portugues SA, 4.75%, 06/22/17 PRT EUR 330, ,000 Energy Transfer Partners LP, senior note, 5.20%, 02/01/22 USA USD 321, ,000 Nippon Life Insurance Co., sub. bond, 144A, 5.10% to 10/16/24, FRN thereafter, 10/16/44 JPN USD 313, ,000 General Motors Financial Co. Inc., senior note, 4.375%, 09/25/21 USA USD 313, ,000 Wells Fargo & Co., sub. bond, 4.65%, 11/04/44 USA USD 310, ,000 Tyson Foods Inc., senior bond, 3.95%, 08/15/24 USA USD 310, ,000 Oversea-Chinese Banking Corp. Ltd., 144A, sub. bond, 4.00% to 10/14/19, FRN thereafter, 10/15/24 SGP USD 307, ,000 Sunoco Logistics Partners Operations LP, senior note, 4.25%, 04/01/24 USA USD 303, ,000 HSBC Holdings PLC, junior sub. bond, 5.625% to 01/17/20, FRN thereafter, Perpetual GBR USD 301, ,000 Ford Motor Credit Co. LLC, senior note, 1.684%, 09/08/17 USA USD 297, ,000 Barclays Bank PLC, senior sub. note, Reg S, 6.00%, 01/14/21 GBR EUR 297, ,000 Enterprise Products Operating LLC, senior note, 3.35%, 03/15/23 USA USD 297, ,000 State Grid Overseas Investment 2013 Ltd., senior note, 144A, 3.125%, 05/22/23 CHN USD 294, ,000 Oceaneering International Inc., senior note, 4.65%, 11/15/24 USA USD 294, ,000 BPCE SA, sub. bond, 144A, 4.50%, 03/15/25 FRA USD 293, ,000 Verizon Communications Inc., senior bond, Reg S, 4.862%, 08/21/46 USA USD 291, ,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior bond, 144A, 6.212%, 11/22/16 RUS USD 290, ,000 ERP Operating LP, 5.75%, 06/15/17 USA USD 275, ,000 Banca Monte dei Paschi di Siena SpA, secured note, Reg S, 2.875%, 04/16/21 ITA EUR 263, ,000 Intesa Sanpaolo SpA, senior note, 3.875%, 01/15/19 ITA USD 259, ,000 Banco Popolare Societa Cooperativa, senior note, Reg S, 4.75%, 03/31/16 ITA EUR 254, ,000 Ford Motor Credit Co. LLC, senior note, 8.125%, 01/15/20 USA USD 247, ,000 Banca Monte dei Paschi di Siena SpA, senior note, Reg S, 3.625%, 04/01/19 ITA EUR 245, ,000 Merrill Lynch & Co. Inc., senior note, 6.875%, 04/25/18 USA USD 229, ,000 SVB Financial Group, senior note, 5.375%, 09/15/20 USA USD 225, ,000 Morgan Stanley, senior note, 5.50%, 01/26/20 USA USD 225, ,000 Energy Transfer Equity LP, senior note, first lien, 7.50%, 10/15/20 USA USD 223, ,000 PerkinElmer Inc., senior note, 5.00%, 11/15/21 USA USD 217, ,000 Bank of America Corp., junior sub. bond, M, 8.125% to 05/15/18, FRN thereafter, Perpetual USA USD 216, ,000 Health Care REIT Inc., senior note, 4.125%, 04/01/19 USA USD 212, ,000 NBCUniversal Media LLC, senior bond, 4.45%, 01/15/43 USA USD 212, ,000 Prudential Financial Inc., junior sub. note, 5.875%, 09/15/42 USA USD 212, ,000 Xstrata Finance Canada Ltd., senior note, 144A, 4.95%, 11/15/21 CHE USD 211, ,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 211, ,000 Mizuho Financial Group Cayman 3 Ltd., sub. note, 144A, 4.60%, 03/27/24 JPN USD 208, ,000 Intesa Sanpaolo SpA, senior note, 3.875%, 01/16/18 ITA USD 208, ,000 Hutchison Whampoa International 11 Ltd., senior note, 144A, 3.50%, 01/13/17 HKG USD 207, ,000 CNOOC Nexen Finance 2014 ULC, senior note, 4.25%, 04/30/24 CHN USD 207, ,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 207, ,000 CIT Group Inc., senior note, 5.00%, 08/15/22 USA USD 206, ,000 Juniper Networks Inc., senior bond, 4.50%, 03/15/24 USA USD 202, Unaudited Semi-Annual Report 301

304 Franklin U.S. Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 200,000 DIRECTV Holdings LLC/DIRECTV Financing Co. Inc., senior bond, 3.95%, 01/15/25 USA USD 201, ,000 Tiffany & Co., senior bond, 144A, 3.80%, 10/01/24 USA USD 201, ,000 Lorillard Tobacco Co., senior note, 2.30%, 08/21/17 USA USD 201, ,000 General Electric Co., senior note, 2.70%, 10/09/22 USA USD 200, ,000 Ensco PLC, senior bond, 5.75%, 10/01/44 USA USD 198, ,000 Shinhan Bank, senior note, 144A, 1.875%, 07/30/18 KOR USD 197, ,000 Reliance Steel & Aluminum Co., senior note, 4.50%, 04/15/23 USA USD 196, ,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 195, ,000 Petrofac Ltd., senior note, 144A, 3.40%, 10/10/18 GBR USD 193, ,000 Enable Midstream Partners LP, senior note, 144A, 3.90%, 05/15/24 USA USD 193, ,000 Wind Acquisition Finance SA, senior note, second lien, 144A, 7.375%, 04/23/21 ITA USD 189, ,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 184, ,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 171, ,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 171, ,000 Aviation Capital Group Corp., 144A, 6.75%, 04/06/21 USA USD 170, ,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 170, ,000 Weatherford International Ltd., senior bond, 5.95%, 04/15/42 USA USD 169, ,000 Kinder Morgan Finance Co. LLC, senior secured note, 144A, 6.00%, 01/15/18 USA USD 163, ,000 Veolia Environnement SA, senior bond, Reg S, 4.625%, 03/30/27 FRA EUR 158, ,000 Chesapeake Energy Corp., senior note, 5.75%, 03/15/23 USA USD 155, ,000 Intelsat Jackson Holdings SA, senior bond, 6.625%, 12/15/22 LUX USD 154, ,000 Citigroup Inc., senior note, 8.125%, 07/15/39 USA USD 153, ,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 139, ,000 Anheuser-Busch InBev NV, senior bond, Reg S, 2.875%, 09/25/24 BEL EUR 138, ,000 HSBC Holdings PLC, sub. note, 6.50%, 09/15/37 GBR USD 128, ,000 Frontier Communications Corp., senior note, 7.125%, 01/15/23 USA USD 127, ,000 Pernod Ricard SA, 2.125%, 09/27/24 FRA EUR 126, ,000 Banco Santander Totta SA, secured note, 1.50%, 04/03/17 PRT EUR 123, ,000 Telefonica Europe BV, junior sub.bond, Reg S, FRN, Perpetual ESP EUR 122, ,000 Express Scripts Holding Co., senior note, 7.25%, 06/15/19 USA USD 120, ,000 Mitsui Sumitomo Insurance Co. Ltd., junior sub. note, 144A, 7.00% to 03/15/22, FRN thereafter, 03/15/72 JPN USD 115, ,000 Enogex LLC, senior note, 144A, 6.25%, 03/15/20 USA USD 114, ,000 DP World Ltd., Reg S, 6.85%, 07/02/37 ARE USD 113, ,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 111, ,000 Healthcare Realty Trust Inc., senior note, 6.50%, 01/17/17 USA USD 109, ,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 107, ,000 American Tower Corp., senior bond, 5.00%, 02/15/24 USA USD 106, ,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 104, ,000 HSBC Bank Brasil SA, senior note, 144A, 4.00%, 05/11/16 BRA USD 102, ,000 Constellation Brands Inc., senior note, 3.875%, 11/15/19 USA USD 101, ,000 Altria Group Inc., senior note, 2.625%, 01/14/20 USA USD 100, ,000 HSBK (Europe) BV, senior note, Reg S, 7.25%, 05/03/17 KAZ USD 100, ,000 Kinder Morgan Energy Partners LP, senior bond, 3.45%, 02/15/23 USA USD 95, ,000 Clayton Williams Energy Inc., senior note, 7.75%, 04/01/19 USA USD 85, ,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 04/01/22 AUS USD 83, ,000 Penn Virginia Corp., senior note, 8.50%, 05/01/20 USA USD 80, ,000 CVS Health Corp., senior note, 5.75%, 06/01/17 USA USD 67, ,000 Enterprise Products Operating LLC, junior sub. note, 7.034% to 01/15/18, FRN thereafter, 01/15/68 USA USD 54, ,000 Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22 GBR USD 54, ,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 53, ,000 CIT Group Inc., senior note, 5.375%, 05/15/20 USA USD 53, ,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 8.25%, 11/01/19 AUS USD 45, ,000 Frontier Communications Corp., senior note, 8.50%, 04/15/20 USA USD 28, Motors Liquidation Co., GUC Trust, Escrow Account USA USD 1, ,200 Motors Liquidation Co., Escrow Account, 6.25%, cvt. pfd., C USA USD ,470, Government and Municipal Bonds US Issued 1,000,000 U.S. Treasury Bond, 4.375%, 05/15/40 USA USD 1,316, ,075,760 U.S. Treasury Note, Index Linked, 0.125%, 04/15/16 USA USD 1,072, ,000 U.S. Treasury Bond, 3.50%, 02/15/39 USA USD 1,034, ,000,000 U.S. Treasury Bond, 2.875%, 05/15/43 USA USD 1,023, ,000 U.S. Treasury Bond, 5.00%, 05/15/37 USA USD 856, ,000 New York State Urban Development Corp. Revenue, State Personal Income Tax, General Purpose, Series C, 5.00%, 03/15/29 USA USD 647, ,000 U.S. Treasury Bond, 3.625%, 08/15/43 USA USD 470, ,000 U.S. Treasury Bond, 4.75%, 02/15/37 USA USD 414, ,000 Arkansas State GO, Four-Lane Highway Construction and Improvement Bonds, 3.25%, 06/15/22 USA USD 395, ,000 Florida Hurricane Catastrophe Fund Finance Corp. Revenue, Series A, 2.995%, 07/01/20 USA USD 303, Unaudited Semi-Annual Report

305 Franklin U.S. Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds US Issued (continued) 325,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, first subordinate, Series A, 6.50%, 08/01/44 USA USD 260, ,000 Minnesota State GO, Various Purpose, Refunding, Series F, 4.00%, 10/01/24 USA USD 227, ,000 Nassau County GO, General Improvement Bonds, Series B, 5.00%, 04/01/39 USA USD 223, ,000 Nassau County GO, General Improvement Bonds, Series B, 5.00%, 04/01/43 USA USD 220, ,000 Illinois State GO, 5.877%, 03/01/19 USA USD 198, ,000 New York City Municipal Water Finance Authority Water and Sewer System Revenue, Second General Resolution, Fiscal 2014, Refunding, Series BB, 5.00%, 06/15/46 USA USD 180, ,000 Massachusetts State GO, Consolidated Loan of 2014, Series A, 4.50%, 12/01/43 USA USD 172, ,000 Coachella Valley USD, GO, Riverside and Imperial Counties, Election of 2005, Series D, AGMC Insured, 5.00%, 08/01/37 USA USD 168, ,000 Puerto Rico Electric Power Authority Power Revenue, Series A, 6.75%, 07/01/36 USA USD 151, ,000 Colorado State ISD, GO, Mitchell and Scurry Counties, School Building, PSF Guarantee, 5.00%, 08/15/38 USA USD 144, ,000 U.S. Treasury Bond, 4.375%, 05/15/41 USA USD 132, ,000 South Carolina State Public Service Authority Revenue, Refunding, Series B, 5.00%, 12/01/38 USA USD 123, ,597 U.S. Treasury Note, Index Linked, 2.125%, 01/15/19 USA USD 119, ,000 Puerto Rico Sales Tax FICO Revenue, Capital Appreciation, Refunding, Series A, zero cpn., 08/01/26 USA USD 116, ,000 New Jersey EDA Revenue, School Facilities Construction, Refunding, Series NN, 5.00%, 03/01/30 USA USD 93, ,000 Puerto Rico Sales Tax FICO Sales Tax Revenue, Capital Appreciation, Series A, zero cpn., 08/01/25 USA USD 80, ,000 California State GO, Various Purpose, 6.00%, 11/01/39 USA USD 66, ,000 Evansville Local Public Improvement Bond Bank Revenue, Sewage Works Project, Series A, 5.00%, 07/01/36 USA USD 56, TOTAL US ISSUED 10,274, Non US Issued 931,300,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 866, ,200,000 Government of Malaysia, senior note, 3.172%, 07/15/16 MYS MYR 625, ,000 Government of Mexico, 7.25%, 12/15/16 MEX MXN 521, ,000 Government of Spain, senior bond, 144A, 2.75%, 10/31/24 ESP EUR 467, ,000 Government of Singapore, senior note, 1.125%, 04/01/16 SGP SGD 463, ,000 Italy Treasury Bond, 2.50%, 12/01/24 ITA EUR 447, ,200,000 Government of Poland, 4.75%, 10/25/16 POL PLN 356, ,040,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 351, ,000 Government of Portugal, 144A, 5.125%, 10/15/24 PRT USD 316, ,109,000 Government of Poland, Strip, 01/25/16 POL PLN 307, ,000 Government of Poland, 5.00%, 04/25/16 POL PLN 258, Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 218, ,000 Government of Serbia, senior note, 144A, 4.875%, 02/25/20 SER USD 200, ,210,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 160, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 150, ,070 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 138, ,000 Government of Russia, senior bond, Reg S, 7.50%, 03/31/30 RUS USD 136, ,080 Government of Mexico, 6.25%, 06/16/16 MEX MXN 134, ,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 125, ,000 Government of Iceland, senior note, Reg S, 2.50%, 07/15/20 ISL EUR 123, ,000 Government of Lithuania, Reg S, 7.375%, 02/11/20 LTU USD 120, ,000 Government of Vietnam, Reg S, 6.75%, 01/29/20 VND USD 112, ,000 The Export-Import Bank of Korea, senior note, 4.00%, 01/29/21 KOR USD 107, ,563,211 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 106, ,000,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 92, ,000 Government of Hungary, 6.00%, 01/11/19 HUN EUR 84, ,000 Government of Ireland, 4.50%, 04/18/20 IRL EUR 75, ,500,000 Government of the Philippines, senior bond, 7.00%, 01/27/16 PHL PHP 34, ,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 29, ,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 28, ,000 Government of Hungary, senior note, Reg S, 4.375%, 07/04/17 HUN EUR 19, ,000 Government of Hungary, senior note, Reg S, 5.75%, 06/11/18 HUN EUR 13, ,000 Government of Hungary, senior note, Reg S, 3.50%, 07/18/16 HUN EUR 12, ,000 Government of Hungary, senior note, Reg S, 3.875%, 02/24/20 HUN EUR 6, ,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 5, ,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 3, ,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 3, ,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 2, ,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 2, ,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF ,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF ,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF ,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR TOTAL NON US ISSUED 7,236, ,511, Unaudited Semi-Annual Report 303

306 Franklin U.S. Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year 4,200,000 U.S. Treasury Note, 4.00%, 02/15/15 USA USD 4,220, ,000,000 U.S. Treasury Note, 2.375%, 01/31/15 USA USD 2,003, ,500,000 HCA Inc., senior bond, 7.19%, 11/15/15 USA USD 1,569, ,241,500,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 1,138, ,000,000 Dell Inc., senior note, 2.30%, 09/10/15 USA USD 1,002, ,290,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 656, ,360 Government of Mexico, 8.00%, 12/17/15 MEX MXN 611, ,000 FHLMC, 4.50%, 01/15/15 USA USD 500, ,130,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 323, ,000 Prudential Covered Trust, secured note, 144A, 2.997%, 09/30/15 USA USD 228, ,200,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 228, ,670,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 189, ,330,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 160, ,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 151, ,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 105, ,000 Morgan Stanley, senior note, 6.00%, 04/28/15 USA USD 101, ,000 Government of Lithuania, Reg S, 6.75%, 01/15/15 LTU USD 100, ,000 Government of Poland, 6.25%, 10/24/15 POL PLN 96, ,080,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 66, ,000 Government of Poland, 5.50%, 04/25/15 POL PLN 63, ,560,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 41, ,000 Government of Poland, Strip, 07/25/15 POL PLN 21, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 21, ,000 California State Judgement Trust COP, FRN, 1.585%, 06/01/15 USA USD 19, ,820 Government of Mexico, 6.00%, 06/18/15 MEX MXN 12, ,400,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 10, ,210,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 8, ,000 Government of Sri Lanka, A, 6.50%, 07/15/15 LKA LKR 2, ,000 Government of Sri Lanka, A, 11.75%, 03/15/15 LKA LKR ,656, TOTAL BONDS 132,578, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 132,587, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 500,000 EDF SA, sub. note, 144A, 5.25% to 01/29/23, FRN thereafter, Perpetual POL USD 512, ,000 NewPage Corp., Escrow Account ** USA USD , TOTAL BONDS 512, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 512, TOTAL INVESTMENTS 133,552, Floating Rates are indicated as at December 31, 2014 ** These securities are submitted to a Fair Valuation 304 Unaudited Semi-Annual Report

307 Franklin World Perspectives Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 16,910 Precision Castparts Corp. USA USD 4,073, ,660 Honeywell International Inc. USA USD 2,364, ,520 The Boeing Co. USA USD 2,147, ,858 MacDonald Dettwiler and Associates Ltd. CAN CAD 560, ,000 Singapore Technologies Engineering Ltd. SGP SGD 384, ,530, Air Freight & Logistics 164,674 bpost SA BEL EUR 4,141, Hyundai Glovis Co. Ltd. KOR KRW 205, ,347, Airlines 22,267 Japan Airlines Co. Ltd. JPN JPY 668, Auto Components 20,000 BorgWarner Inc. USA USD 1,099, ,774 Bridgestone Corp. JPN JPY 798, ,624 Sumitomo Electric Industries Ltd. JPN JPY 512, ,718 Denso Corp. JPN JPY 458, ,555 Hyundai Wia Corp. KOR KRW 411, ,279, Automobiles 27,949 Toyota Motor Corp. JPN JPY 1,762, ,870 Tesla Motors Inc. USA USD 1,083, ,673 Mazda Motor Corp. JPN JPY 847, ,693 Fuji Heavy Industries Ltd. JPN JPY 778, ,785 Hyundai Motor Co. KOR KRW 739, ,714 Tata Motors Ltd. IND INR 335, ,000 Brilliance China Automotive Holdings Ltd. CHN HKD 300, ,000 Dongfeng Motor Group Co. Ltd., H CHN HKD 268, ,004 Kia Motors Corp. KOR KRW 239, ,300 Astra International Tbk PT IDN IDR 172, ,527, Banks 21,610 Signature Bank USA USD 2,721, ,780 SVB Financial Group USA USD 2,179, ,746 Mitsubishi UFJ Financial Group Inc. JPN JPY 985, ,150 Canadian Imperial Bank of Commerce CAN CAD 872, ,761 Sumitomo Mitsui Financial Group Inc. JPN JPY 831, ,200 Bank Central Asia Tbk PT IDN IDR 802, ,550 The Toronto-Dominion Bank CAN CAD 791, ,000 Royal Bank of Canada CAN CAD 760, ,275 Bank of Montreal CAN CAD 656, ,275 Bank of Nova Scotia CAN CAD 643, ,540 Siam Commercial Bank PCL, fgn. THA THB 584, ,426 DBS Group Holdings Ltd. SGP SGD 581, ,727 China Merchants Bank Co. Ltd., H CHN HKD 523, ,085 Itausa - Investimentos Itau SA, pfd. BRA BRL 519, ,653 Yes Bank Ltd. IND INR 510, ,947 ICICI Bank Ltd. IND INR 492, ,700 Kasikornbank PCL, fgn. THA THB 464, ,000 China Construction Bank Corp., H CHN HKD 420, ,200 Bank Mandiri Persero Tbk PT, ADR IDN IDR 409, ,053 Union Bank of India Ltd. IND INR 406, ,667 Commonwealth Bank of Australia AUS AUD 396, ,000 Public Bank Bhd. MYS MYR 366, ,305 Punjab National Bank Ltd. IND INR 327, ,700 Banco Bradesco SA, pfd. BRA BRL 312, ,667 Australia & New Zealand Banking Group Ltd. AUS AUD 174, ,800 Bangkok Bank PCL, fgn. THA THB 171, ,380 Commercial International Bank Egypt SAE EGY EGP 133, ,994 Qatar National Bank QAT QAR 116, ,609 First Gulf Bank PJSC ARE AED 113, ,355 HSBC Bank PLC (CRTP Banque Saudi Fransi) SAU USD 95, ,076 HSBC Bank PLC (CRTP Samba Financial Group, 144A) SAU USD 93, ,039 Bank Muscat SAOG OMN OMR 83, ,915 Credit Suisse Nassau (CRTP Al Rajhi Bank) SAU USD 80, ,625, Unaudited Semi-Annual Report 305

308 Franklin World Perspectives Fund Schedule of Investments as of December 31, 2014 (continued) face Beverages 32,773 Anheuser-Busch InBev NV BEL EUR 3,722, ,681 C&C Group PLC IRL EUR 3,213, ,410 Monster Beverage Corp. USA USD 2,211, ,400 Ambev SA BRA BRL 433, ,580, Biotechnology 65,000 Celgene Corp. USA USD 7,270, ,500 Biogen Idec Inc. USA USD 4,243, ,730 Regeneron Pharmaceuticals Inc. USA USD 1,940, ,281 CSL Ltd. AUS AUD 798, ,252, Capital s 161,981 Banca Generali ITA EUR 4,517, ,685 Ashmore Group PLC GBR GBP 3,813, ,270 T. Rowe Price Group Inc. USA USD 2,169, ,100 CETIP SA Mercados Organizados BRA BRL 437, ,375 IGM Financial Inc. CAN CAD 254, ,140 Motilal Oswal Financial Services Ltd. IND INR 87, ,390 Egyptian Financial Group-Hermes Holding EGY EGP 87, ,366, Chemicals 41,330 Ecolab Inc. USA USD 4,319, ,000 Cytec Industries Inc. USA USD 1,615, ,740 Praxair Inc. USA USD 1,521, ,456 Hitachi Chemical Co. Ltd. JPN JPY 884, ,503 Daicel Chemical Industries Ltd. JPN JPY 502, ,125 Potash Corp. of Saskatchewan Inc. CAN CAD 358, ,175 Agrium Inc. CAN CAD 300, ,442 Lotte Chemical Corp. KOR KRW 210, ,085 HSBC Bank PLC (CRTP Saudi Basic Industries Corp., 144A) SAU USD 91, ,072 HSBC Bank PLC (CRTP Yanbu National Petrochemicals Co.) SAU USD 90, ,151 DuluxGroup Ltd. AUS AUD 76, ,972, Commercial Services & Supplies 22,710 Stericycle Inc. USA USD 2,976, ,129 De La Rue PLC GBR GBP 2,735, ,963 Brambles Ltd. AUS AUD 928, ,872 Sohgo Security Services Co. Ltd. JPN JPY 436, ,100 Berendsen PLC GBR GBP 293, ,369, Communications Equipment 26,730 QUALCOMM Inc. USA USD 1,986, Construction & Engineering 568,709 Outotec OYJ FIN EUR 3,018, ,079 Koninklijke Boskalis Westminster NV NLD EUR 2,589, ,713 Taisei Corp. JPN JPY 783, ,550 SNC-Lavalin Group Inc., A CAN CAD 288, ,679, Construction Materials 43,000 Siam Cement PCL, fgn. THA THB 588, ,729 JK Lakshmi Cement Ltd. IND INR 307, , Consumer Finance 584,418 International Personal Finance PLC GBR GBP 4,095, ,270 FlexiGroup Ltd. AUS AUD 297, ,711 Mahindra & Mahindra Financial Services Ltd. IND INR 212, ,605, Containers & Packaging 101,383 Amcor Ltd. AUS AUD 1,124, Distributors 68,050 LKQ Corp. USA USD 1,913, Diversified Consumer Services 20,300 Estacio Participacoes SA BRA BRL 181, Unaudited Semi-Annual Report

309 Franklin World Perspectives Fund Schedule of Investments as of December 31, 2014 (continued) face Diversified Financial Services 7,670 Intercontinental Exchange Inc. USA USD 1,681, ,068 Hong Kong Exchanges & Clearing Ltd. HKG HKD 710, ,024 ORIX Corp. JPN JPY 559, ,504 Credit Analysis and Research Ltd. IND INR 505, ,375 Onex Corp. CAN CAD 370, ,000 Singapore Exchange Ltd. SGP SGD 159, ,384 Kuwait Projects Co. Holding KSC KWD KWD 122, ,109, Diversified Telecommunication Services 80,000 Singapore Telecommunications Ltd. SGP SGD 235, Electrical Equipment 224,310 Prysmian SpA ITA EUR 4,111, ,982 Legrand SA FRA EUR 4,003, ,300 AMETEK Inc. USA USD 1,278, ,729 Mitsubishi Electric Corp. JPN JPY 817, ,773 Nidec Corp. JPN JPY 705, ,917, Electronic Equipment, Instruments & Components 40,201 Alps Electric Co. Ltd. JPN JPY 774, ,975 Murata Manufacturing Co. Ltd. JPN JPY 771, ,000 Chroma Ate Inc. TWN TWD 425, ,100 GeoVision Inc. TWN TWD 341, ,000 E Ink Holdings Inc. TWN TWD 233, ,546, Energy Equipment & Services 120,696 TGS Nopec Geophysical Co. ASA NOR NOK 2,612, ,975 Calfrac Well Services Ltd. CAN CAD 206, ,825 Mullen Group Ltd. CAN CAD 143, ,820 Gulf International Services QSC QAT QAR 128, ,800 Savanna Energy Services Corp. CAN CAD 118, ,300 Canadian Energy Services & Technology Corp., A CAN CAD 100, ,800 CanElson Drilling Inc. CAN CAD 79, ,389, Food & Staples Retailing 19,462 Seven & I Holdings Co. Ltd. JPN JPY 707, ,300 Whole Foods Inc. USA USD 519, ,975 Metro Inc., A CAN CAD 480, ,324 Woolworths Ltd. AUS AUD 459, ,975 Alimentation Couche-Tard Inc., B CAN CAD 376, ,000 President Chain Store Corp. TWN TWD 332, ,900 Dairy Farm International Holdings Ltd. HKG USD 251, ,800 Companhia Brasileira de Distribuicao, pfd., A BRA BRL 215, ,800 CP ALL PCL, fgn. THA THB 205, ,000 7-Eleven Malaysia Holdings Bhd. MYS MYR 133, ,680, Food Products 12,150 Mead Johnson Nutrition Co., A USA USD 1,221, ,500 Nestle (Malaysia) Bhd. MYS MYR 342, ,028 Kaveri Seed Co. Ltd. IND INR 318, ,300 BRF SA BRA BRL 317, ,724 Nestle Lanka PLC LKA LKR 284, ,400 Saputo Inc. CAN CAD 252, ,000 China Huishan Dairy Holdings Co. Ltd. CHN HKD 161, ,300 Mayora Indah Tbk PT IDN IDR 132, ,030, Gas Utilities 110,183 Gujarat State Petro Ltd. IND INR 199, Health Care Equipment & Supplies 34,990 Insulet Corp. USA USD 1,611, ,300 Resmed Inc., CDI USA AUD 817, ,815 Asahi Intecc Co. Ltd. JPN JPY 435, ,864, Health Care Providers & Services 16,500 McKesson Corp. USA USD 3,425, ,000 Envision Healthcare Holdings Inc. USA USD 1,907, ,300 Bumrungrad Hospital PCL, fgn. THA THB 331, ,664, Unaudited Semi-Annual Report 307

310 Franklin World Perspectives Fund Schedule of Investments as of December 31, 2014 (continued) face Health Care Technology 30,000 Cerner Corp. USA USD 1,939, Hotels, Restaurants & Leisure 2,460 Chipotle Mexican Grill Inc. USA USD 1,683, ,470 Starbucks Corp. USA USD 1,515, ,211 Oriental Land Co. Ltd. JPN JPY 743, ,793 Indian Hotels Co. Ltd. IND INR 407, ,400 Sands China Ltd. HKG HKD 327, ,900 MK Restaurant Group PCL, fgn. THA THB 202, ,394 Flight Centre Travel Group Ltd. AUS AUD 90, ,753 Merrill Lynch International & Co. CV (CRTP Al Tayyar Travel Group) SAU USD 87, ,365 Chuy s Holdings Inc. USA USD 85, ,143, Household Durables 87,620 The Berkeley Group Holdings PLC GBR GBP 3,387, ,610 TRI Pointe Homes Inc. USA USD 1,259, ,500 Techtronic Industries Co. Ltd. HKG HKD 372, ,019, Household Products 25,888 Reckitt Benckiser Group PLC GBR GBP 2,102, Independent Power and Renewable Electricity Producers 479,160 Drax Group PLC GBR GBP 3,440, ,000 CGN Power Co. Ltd., Reg S, H CHN HKD 150, ,800 AES Tiete SA BRA BRL 143, ,733, Industrial Conglomerates 17,010 Roper Industries Inc. USA USD 2,659, ,900 Cheil Industries Inc., Reg S KOR KRW 707, ,763 HSBC Bank PLC (CRTP National Industrialization Co.) SAU USD 91, ,458, Insurance 38,396 Euler Hermes Group FRA EUR 3,978, ,600 AIA Group Ltd. HKG HKD 1,811, ,000 Ping An Insurance (Group) Co. of China Ltd. CHN HKD 794, ,825 Power Corp. of Canada CAN CAD 460, ,150 Cathay Financial Holding Co. Ltd. TWN TWD 455, ,525 Power Financial Corp. CAN CAD 452, ,952, Inter & Catalog Retail 3,250 The Priceline Group Inc. USA USD 3,705, ,474 Takkt AG DEU EUR 2,889, ,750 Amazon.com Inc. USA USD 2,715, ,684 Ctrip.com International Ltd., ADR CHN USD 304, ,615, Inter Software & Services 80,000 Facebook Inc., A USA USD 6,241, ,000 LinkedIn Corp., A USA USD 4,134, ,940 CoStar Group Inc. USA USD 1,825, ,809 Alibaba Group Holding Ltd., ADR CHN USD 1,227, ,283 Baidu Inc., ADR CHN USD 1,204, ,300 Tencent Holdings Ltd. CHN HKD 874, ,000 HC International Inc. CHN HKD 76, ,584, IT Services 66,260 MasterCard Inc., A USA USD 5,708, ,000 Visa Inc., A USA USD 5,244, ,150 Cognizant Technology Solutions Corp., A USA USD 2,904, ,090 FleetCor Technologies Inc. USA USD 2,095, ,254 SCSK Corp. JPN JPY 638, ,196 Computershare Ltd. AUS AUD 512, ,533 Samsung SDS Co. Ltd. KOR KRW 411, ,514, Life Sciences Tools & Services 22,000 Illumina Inc. USA USD 4,060, ,290 Quintiles Transnational Holdings Inc. USA USD 1,429, ,490, Unaudited Semi-Annual Report

311 Franklin World Perspectives Fund Schedule of Investments as of December 31, 2014 (continued) face Machinery 24,290 Pall Corp. USA USD 2,458, ,426 IMI PLC GBR GBP 2,311, ,843 SMC Corp. JPN JPY 758, ,771 Nachi-Fujikoshi Corp. JPN JPY 583, ,957 Eicher Motors Ltd. IND INR 468, ,192 Grindwell Norton Ltd. IND INR 236, ,359 Carborundum Universal Ltd. IND INR 228, ,044, Marine 656,000 Evergreen Marine Corp. Ltd. TWN TWD 464, Media 309,856 Mediaset Espana Comunicacion SA ESP EUR 3,916, ,205 Reed Elsevier NV GBR EUR 3,557, ,560 GFK AG DEU EUR 3,231, ,470 The Walt Disney Co. USA USD 2,964, ,850 Twenty-First Century Fox Inc., B USA USD 2,945, ,560 Charter Communications Inc., A USA USD 2,425, ,312 ITE Group PLC GBR GBP 2,220, ,875 Thomson Reuters Corp. CAN CAD 842, ,443,495 Surya Citra Media Tbk PT IDN IDR 407, ,916 Jagran Prakashan Ltd. IND INR 407, ,600 BEC World PCL, fgn. THA THB 405, ,400 Major Cineplex Group PCL, fgn. THA THB 329, ,654, Metals & Mining 15,152 Rio Tinto Ltd. GBR AUD 717, ,469 BHP Billiton Ltd. AUS AUD 610, ,579 POSCO KOR KRW 397, ,800 Franco-Nevada Corp. CAN CAD 285, ,898 Hindalco Industries Ltd. IND INR 264, ,675 Major Drilling Group International Inc. CAN CAD 101, ,378, Multi-Utilities 4,650 ATCO Ltd., I CAN CAD 190, Multiline Retail 9,159 Don Quijote Holdings Co. Ltd. JPN JPY 638, ,000 Poya Co. Ltd. TWN TWD 499, ,200 Mitra Adiperkasa Tbk PT IDN IDR 227, ,365, Oil, Gas & Consumable Fuels 318,500 China Shenhua Energy Co. Ltd., H CHN HKD 940, ,475 Enbridge Inc. CAN CAD 744, ,600 PTT PCL, fgn. THA THB 607, ,000 PetroChina Co. Ltd., H CHN HKD 604, ,830 Rice Energy Inc. USA USD 541, ,400 TransCanada Corp. CAN CAD 413, ,325 Canadian Natural Resources Ltd. CAN CAD 412, ,225 Nuvista Energy Ltd. CAN CAD 320, ,391 Origin Energy Ltd. AUS AUD 289, ,925 Cenovus Energy Inc. CAN CAD 287, ,075 Tourmaline Oil Corp. CAN CAD 235, ,782 Gujarat Mineral Development Corp. Ltd. IND INR 235, ,175 Bonavista Energy Corp. CAN CAD 202, ,000 Crew Energy Inc. CAN CAD 158, ,375 Peyto Exploration & Development Corp. CAN CAD 154, ,025 Keyera Corp. CAN CAD 141, ,575 Kelt Exploration Ltd. CAN CAD 99, ,800 Baytex Energy Corp. CAN CAD 96, ,475 ARC Resources Ltd. CAN CAD 75, ,560, Paper & Forest Products 67,400 Suzano Papel e Celulose SA, pfd., A BRA BRL 285, Pharmaceuticals 21,000 Actavis PLC USA USD 5,405, ,030 Sanofi FRA EUR 4,580, ,000 Perrigo Co. PLC USA USD 3,343, ,000 Bristol-Myers Squibb Co. USA USD 3,305, ,230 Jazz Pharmaceuticals PLC USA USD 1,511, ,171 Roche Holding AG CHE CHF 860, ,150 Astellas Pharma Inc. JPN JPY 804, Unaudited Semi-Annual Report 309

312 Franklin World Perspectives Fund Schedule of Investments as of December 31, 2014 (continued) face Pharmaceuticals (continued) 2,578,000 Kalbe Farma Tbk PT IDN IDR 380, ,173 Sun Pharmaceutical Industries Ltd. IND INR 185, ,377, Professional Services 25,370 IHS Inc., A USA USD 2,889, ,647 Experian PLC GBR GBP 2,639, ,528, Real Estate Investment Trusts (REITs) 31,700 American Tower Corp. USA USD 3,133, ,583 Emirates REIT CEIC Ltd. ARE USD 83, ,217, Real Estate Management & Development 342,000 China Overseas Land & Investment Ltd. CHN HKD 1,018, ,150 Brookfield Asset Management Inc., A CAN CAD 960, ,867 Mitsui Fudosan Co. Ltd. JPN JPY 566, ,000 Global Logistic Properties Ltd. SGP SGD 323, ,570 Emaar Properties PJSC ARE AED 139, ,000 China Resources Land Ltd. CHN HKD 131, ,330 AP Thailand PCL, fgn. THA THB 129, ,691 Mabanee Co. SAKC KWD KWD 87, ,120 HSBC Bank PLC (CRTP Dar Al Arkan Real Estate Development Co.) SAU USD 80, ,438, Road & Rail 25,270 Union Pacific Corp. USA USD 3,010, ,720 Kansas City Southern USA USD 1,186, ,825 Canadian National Railway Co. CAN CAD 1,159, ,600 Canadian Pacific Railway Ltd. CAN CAD 500, ,856, Semiconductors & Semiconductor Equipment 42,600 Cavium Inc. USA USD 2,633, ,430 Microchip Technology Inc. USA USD 2,455, ,650 Applied Materials Inc. USA USD 2,358, ,795 Taiwan Semiconductor Manufacturing Co. Ltd. TWN TWD 1,549, ,346 Rohm Co. Ltd. JPN JPY 696, ,232 Sanken Electric Co. Ltd. JPN JPY 260, ,000 Epistar Corp. TWN TWD 222, ,177, Software 47,330 Salesforce.com Inc. USA USD 2,807, ,840 Electronic Arts Inc. USA USD 2,672, ,930 NetSuite Inc. USA USD 2,066, ,690 ANSYS Inc. USA USD 876, ,680 Mobileye NV USA USD 595, ,018, Specialty Retail 27,450 Tractor Supply Co. USA USD 2,163, ,310 Advance Auto Parts Inc. USA USD 1,960, ,750 L Occitane International SA LUX HKD 310, ,439 Shinsegae International Co. Ltd. KOR KRW 254, ,000 OSIM International Ltd. SGP SGD 61, ,750, Technology Hardware, Storage & Peripherals 107,500 Apple Inc. USA USD 11,865, ,216 Samsung Electronics Co. Ltd. KOR KRW 1,475, ,107 Neopost SA FRA EUR 1,204, ,390 SanDisk Corp. USA USD 920, ,465 FUJIFILM Holdings Corp. JPN JPY 786, Samsung Electronics Co. Ltd., pfd. KOR KRW 749, ,944 NEC Corp. JPN JPY 536, ,537, Textiles, Apparel & Luxury Goods 28,180 NIKE Inc., B USA USD 2,709, ,290 Under Armour Inc., A USA USD 1,649, ,780 Michael Kors Holdings Ltd. USA USD 959, ,300 Samsonite International SA HKG HKD 374, ,000 Shenzhou International Group Holdings Ltd. CHN HKD 313, Unaudited Semi-Annual Report

313 Franklin World Perspectives Fund Schedule of Investments as of December 31, 2014 (continued) face Textiles, Apparel & Luxury Goods (continued) 40,875 Titan Co. Ltd. IND INR 247, ,600 Gildan Activewear Inc. CAN CAD 147, ,400, Thrifts & Mortgage Finance 4,200 Home Capital Group Inc. CAN CAD 173, Tobacco 65,030 Imperial Tobacco Group PLC GBR GBP 2,874, Companies & Distributors 100,000 HD Supply Holdings Inc. USA USD 2,949, ,087 Samsung C&T Corp. KOR KRW 173, ,122, Transportation Infrastructure 43,300 Arteris SA BRA BRL 202, ,900 Jasa Marga Persero Tbk PT IDN IDR 181, , Water Utilities 81,900 Cia de Saneamento do Parana, pfd. BRA BRL 178, Wireless Telecommunication Services 131,722 Bharti Airtel Ltd. IND INR 737, ,896 SoftBank Corp. JPN JPY 414, ,525 Rogers Communications Inc., B CAN CAD 214, ,366, TOTAL SHARES 363,450, INVESTMENTS FUNDS Diversified Financial Services 28,013 Source s PLC Financials S&P US Select Source ETF USA USD 3,796, ,284 Source Consumer Discretionary S&P U.S. Sector USA USD 2,778, ,088 db x-trackers MSCI Mexico TRN Index UCITS ETF dr MEX USD 2,042, ,482 db x-trackers MSCI Russia Capped Index ETF RUS USD 1,370, ,868 Lyxor ETF South Africa FTSE JSE Top 40 EUR ZAF GBP 1,060, ,467 ishares MSCI South Africa UCITS ETF ZAF USD 862, ,283 Lyxor UCITS ETF Eastern Europe (CECE NTR EUR) FC FRA EUR 802, ,656 Source Utilities S&P U.S. Sector UCITS ETF USA USD 695, ,947 db x-trackers MSCI Chile TRN Index UCITS ETF CHL USD 635, ,045, TOTAL INVESTMENTS FUNDS 14,045, BONDS Hotels, Restaurants & Leisure 30,777 Indian Hotels Co. Ltd., cvt., zero cpn., 03/01/16 IND INR 56, TOTAL BONDS 56, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 377,552, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Beverages 60,104 Anheuser-Busch InBev NV, VVPR Strip ** BEL EUR TOTAL SHARES TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET TOTAL INVESTMENTS 377,552, ** These securities are submitted to a Fair Valuation Unaudited Semi-Annual Report 311

314 Franklin Mutual Beacon Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 126,315 Huntington Ingalls Industries Inc. USA USD 14,205, ,797 B/E Aerospace Inc. USA USD 6,660, ,399 KLX Inc. USA USD 2,367, ,233, Automobiles 503,720 General Motors Co. USA USD 17,584, ,240 Volkswagen AG, pfd. DEU EUR 6,979, ,564, Banks 283,434 PNC Financial Services Group Inc. USA USD 25,857, ,380 JPMorgan Chase & Co. USA USD 18,171, ,804 Citigroup Inc. USA USD 14,923, ,675 SunTrust Banks Inc. USA USD 10,126, ,310 Wells Fargo & Co. USA USD 9,117, ,561,520 Barclays PLC GBR GBP 5,926, ,294 ING Groep NV, IDR NLD EUR 5,809, ,719 Citizens Financial Group Inc. USA USD 3,622, ,017 KB Financial Group Inc. KOR KRW 3,173, ,864 Societe Generale SA FRA EUR 1,984, ,306 Guaranty Bancorp USA USD 1,231, ,545 Columbia Banking System Inc. USA USD 760, ,704, Beverages 142,522 PepsiCo Inc. USA USD 13,476, ,894 Coca-Cola Enterprises Inc. USA USD 1,233, ,710, Capital s 198,156 Credit Suisse Group AG CHE CHF 4,998, Communications Equipment 667,607 Cisco Systems Inc. USA USD 18,569, Consumer Finance 270,770 Ally Financial Inc. USA USD 6,395, Containers & Packaging 274,927 MeadWestvaco Corp. USA USD 12,204, Diversified Financial Services 129,781 CIT Group Inc. USA USD 6,207, Diversified Telecommunication Services 2,126,690 Koninklijke KPN NV NLD EUR 6,762, Energy Equipment & Services 222,860 Baker Hughes Inc. USA USD 12,495, ,020 Transocean Ltd. USA USD 4,766, ,460 Ensco PLC, A USA USD 1,301, ,563, Food & Staples Retailing 304,985 The Kroger Co. USA USD 19,583, ,463 Walgreens Boots Alliance Inc. USA USD 14,284, ,266 CVS Health Corp. USA USD 12,642, ,509, Health Care Equipment & Supplies 560,606 Medtronic Inc. USA USD 40,475, ,382 Stryker Corp. USA USD 14,374, ,849, Health Care Providers & Services 145,853 Cigna Corp. USA USD 15,009, Household Products 15,478 Energizer Holdings Inc. USA USD 1,989, Independent Power and Renewable Electricity Producers 369,232 NRG Energy Inc. USA USD 9,950, Insurance 39,689 White Mountains Insurance Group Ltd. USA USD 25,008, ,753 American International Group Inc. USA USD 23,398, ,658 ACE Ltd. USA USD 18,341, ,515 Alleghany Corp. USA USD 14,607, Unaudited Semi-Annual Report

315 Franklin Mutual Beacon Fund Schedule of Investments as of December 31, 2014 (continued) face Insurance (continued) 188,252 The Allstate Corp. USA USD 13,224, ,500 MetLife Inc. USA USD 13,062, ,455 Zurich Insurance Group AG CHE CHF 7,667, ,310, IT Services 1,295,241 Xerox Corp. USA USD 17,952, Machinery 79,063 Caterpillar Inc. USA USD 7,236, ,511 CNH Industrial NV GBR EUR 5,557, ,794, Marine 7,190 A.P. Moeller-Maersk AS, B DNK DKK 14,450, Media 701,491 Twenty-First Century Fox Inc., B USA USD 25,878, ,362 Time Warner Cable Inc. USA USD 22,559, ,840 Reed Elsevier PLC GBR GBP 15,959, ,167 CBS Corp., B USA USD 15,283, ,870 Time Warner Inc. USA USD 9,983, ,142 Comcast Corp., Special A USA USD 4,210, ,874, Metals & Mining 482,033 Freeport-McMoRan Inc., B USA USD 11,260, ,994 ThyssenKrupp AG DEU EUR 8,154, ,650 Anglo American PLC GBR GBP 2,781, ,196, Multiline Retail 99,600 Kohl s Corp. USA USD 6,079, Oil, Gas & Consumable Fuels 541,243 Royal Dutch Shell PLC, A GBR EUR 18,114, ,180 Apache Corp. USA USD 14,613, ,278 Marathon Oil Corp. USA USD 14,096, ,094,793 BP PLC GBR GBP 7,013, ,772 CONSOL Energy Inc. USA USD 6,720, ,350 Murphy Oil Corp. USA USD 6,534, ,172 BG Group PLC GBR GBP 5,853, ,540 Anadarko Petroleum Corp. USA USD 5,572, ,352 Talisman Energy Inc. CAN USD 4,724, ,604 Talisman Energy Inc. CAN CAD 231, ,475, Paper & Forest Products 317,603 International Paper Co. USA USD 17,017, Personal Products 621,174 Avon Products Inc. USA USD 5,832, Pharmaceuticals 610,910 Merck & Co. Inc. USA USD 34,693, ,047 Teva Pharmaceutical Industries Ltd., ADR ISR USD 26,227, ,630 Eli Lilly & Co. USA USD 13,841, ,015 Hospira Inc. USA USD 13,169, ,931, Real Estate Management & Development 50,518 Forestar Group Inc. USA USD 777, Software 809,033 Microsoft Corp. USA USD 37,579, ,435 Symantec Corp. USA USD 21,433, ,601 CA Inc. USA USD 7,417, ,430, Technology Hardware, Storage & Peripherals 256,760 Apple Inc. USA USD 28,341, ,672 Hewlett-Packard Co. USA USD 11,985, ,559 Samsung Electronics Co. Ltd. KOR KRW 7,957, ,284, Tobacco 362,145 British American Tobacco PLC GBR GBP 19,756, ,281 Lorillard Inc. USA USD 19,466, ,614 Altria Group Inc. USA USD 15,353, Unaudited Semi-Annual Report 313

316 Franklin Mutual Beacon Fund Schedule of Investments as of December 31, 2014 (continued) face Tobacco (continued) 278,827 Imperial Tobacco Group PLC GBR GBP 12,325, ,910 Philip Morris International Inc. USA USD 6,345, ,247, Wireless Telecommunication Services 4,174,777 Vodafone Group PLC GBR GBP 14,488, TOTAL SHARES 1,045,367, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,045,367, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 10,382,000 iheartcommunications Inc., senior secured note, first lien, 9.00%, 12/15/19 USA USD 10,265, ,225,000 Avaya Inc., senior secured note, 144A, 7.00%, 04/01/19 USA USD 5,120, ,820,000 NGPL PipeCo LLC, senior secured note, 144A, 9.625%, 06/01/19 USA USD 3,848, ,326,000 Avaya Inc., senior note, 144A, 10.50%, 03/01/21 USA USD 3,720, ,551,000 Walter Energy Inc., first lien, 144A, 9.50%, 10/15/19 USA USD 3,481, ,658,000 First Data Corp., senior note, 11.75%, 08/15/21 USA USD 1,910, ,037,000 NGPL PipeCo LLC, secured note, 144A, 7.119%, 12/15/17 USA USD 1,024, ,227,000 Walter Energy Inc., second lien, 144A, PIK, 11.50%, 04/01/20 USA USD 411, ,876,106 Adelphia Recovery Trust, Escrow Account, ACC-1 USA USD 33, ,106,158 Adelphia Recovery Trust, Escrow Account, Arahova USA USD 11, ,826, Government and Municipal Bonds 2,921,000 Puerto Rico Commonwealth GO, Refunding, Series A, 8.00%, 07/01/35 USA USD 2,552, Securities Maturing Within One Year 15,400,000 U.S. Treasury Bill, 0.00%, 01/02/15 USA USD 15,400, ,000,000 U.S. Treasury Bill, 0.00%, 03/05/15 USA USD 9,999, ,798,000 U.S. Treasury Bill, 0.00%, 01/22/15 USA USD 8,797, ,000,000 U.S. Treasury Bill, 0.00%, 04/16/15 USA USD 4,999, ,000,000 U.S. Treasury Bill, 0.00%, 04/30/15 USA USD 4,999, ,000,000 U.S. Treasury Bill, 0.00%, 05/21/15 USA USD 4,999, ,000,000 U.S. Treasury Bill, 0.00%, 06/11/15 USA USD 4,998, ,000,000 U.S. Treasury Bill, 0.00%, 02/26/15 USA USD 3,999, ,000,000 U.S. Treasury Bill, 0.00%, 03/12/15 USA USD 2,999, ,000,000 U.S. Treasury Bill, 0.00%, 04/09/15 USA USD 2,999, ,000,000 U.S. Treasury Bill, 0.00%, 05/14/15 USA USD 2,999, ,500,000 U.S. Treasury Bill, 0.00%, 04/23/15 USA USD 2,499, ,693, TOTAL BONDS 102,072, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 102,072, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Auto Components 9,944,392 International Automotive Components Group North America LLC ** USA USD 7,529, ,806 International Automotive Components Group Brazil LLC ** BRA USD 86, ,616, Consumer Finance 5,757,459 CB FIM Coinvestors LLC ** USA USD ,202,506 FIM Coinvestor Holdings I LLC ** USA USD Insurance 2,600 Olympus Re Holdings Ltd. ** USA USD Real Estate Management & Development 1,181,766 Canary Wharf Group PLC ** GBR GBP 9,963, TOTAL SHARES 17,579, BONDS Corporate Bonds 60,000 Century Communications Corp., Escrow Account, 8.375%, 12/15/07 ** USA USD ,000 Century Communications Corp., Escrow Account, 8.75%, 10/01/07 ** USA USD ,000 Century Communications Corp., Escrow Account, 8.875%, 02/20/49 ** USA USD ,000 Century Communications Corp., Escrow Account, 9.50%, 03/01/05 ** USA USD ,000 Century Communications Corp., Escrow Account, zero cpn., 01/15/08 ** USA USD ,302,000 Century Communications Corp., Escrow Account, zero cpn., 02/20/49 ** USA USD ,000 Global Crossing Holdings Ltd., Escrow Account, 6.00%, 02/20/49 ** USA USD Unaudited Semi-Annual Report

317 Franklin Mutual Beacon Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 80,000 Global Crossing Holdings Ltd., Escrow Account, 7.25%, 02/20/49 ** USA USD ,000 Global Crossing Holdings Ltd., Escrow Account, 9.125%, 11/16/06 ** USA USD ,000 Global Crossing Holdings Ltd., Escrow Account, 9.50%, 11/15/09 ** USA USD ,000 Global Crossing Holdings Ltd., Escrow Account, 9.625%, 05/15/08 ** USA USD ,365,399 Global Crossing Holdings Ltd., Escrow Account, zero cpn., 02/20/49 ** USA USD ,988,000 Tropicana Entertainment LLC/Tropicana Finance Corp., senior sub. note, 9.625%, 12/15/14 **,* USA USD TOTAL BONDS TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 17,579, TOTAL INVESTMENTS 1,165,019, * These Corporate Bonds are currently in default ** These securities are submitted to a Fair Valuation Income may be received in additional securities and/or cash Unaudited Semi-Annual Report 315

318 Franklin Mutual Euroland Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Airlines 45,227 International Consolidated Airlines Group SA GBR EUR 279, Auto Components 4,780 Cie Generale des Etablissements Michelin, B FRA EUR 359, ,897 Pirelli & C. SpA ITA EUR 323, , Automobiles 2,411 Volkswagen AG, pfd. DEU EUR 445, ,844 Peugeot SA FRA EUR 437, , Banks 8,696 BNP Paribas SA FRA EUR 428, ,309 Intesa Sanpaolo SpA ITA EUR 427, ,299 UniCredit SpA ITA EUR 353, ,467 Societe Generale SA FRA EUR 331, ,518 National Bank of Greece SA GRC EUR 235, ,942 ING Groep NV, IDR NLD EUR 226, ,244 Commerzbank AG DEU EUR 90, ,093, Capital s 36,302 Anima Holding SpA, Reg S ITA EUR 151, Chemicals 4,294 Arkema FRA EUR 236, Construction Materials 4,133 SA des Ciments Vicat FRA EUR 246, Diversified Telecommunication Services 188,220 Koninklijke KPN NV NLD EUR 494, ,420 Hellenic Telecommunications Organization SA GRC EUR 386, ,522 Telecom Italia SpA ITA EUR 274, ,155, Electric Utilities 113,523 Enel SpA ITA EUR 419, Food & Staples Retailing 14,345 Metro AG DEU EUR 363, Hotels, Restaurants & Leisure 14,113 Accor SA FRA EUR 526, Industrial Conglomerates 3,751 Siemens AG DEU EUR 351, ,289 Koninklijke Philips NV NLD EUR 127, , Insurance 14,449 Ageas BEL EUR 426, ,066 NN Group NV NLD EUR 374, ,096 UNIQA Insurance Group AG AUT EUR 374, ,562 Assicurazioni Generali SpA ITA EUR 145, ,320, Machinery 43,550 CNH Industrial NV GBR EUR 291, ,964 Vossloh AG DEU EUR 265, , Marine 240 A.P. Moeller-Maersk AS, B DNK DKK 398, Media 4,055 RTL Group SA DEU EUR 320, ,989 Reed Elsevier NV GBR EUR 218, ,873 Liberty Global PLC, C GBR USD 154, , Metals & Mining 21,780 ThyssenKrupp AG DEU EUR 463, ,682 Voestalpine AG AUT EUR 153, ,374 Anglo American PLC GBR GBP 83, , Unaudited Semi-Annual Report

319 Franklin Mutual Euroland Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Oil, Gas & Consumable Fuels 12,694 Royal Dutch Shell PLC, A GBR EUR 351, ,419 BP PLC GBR GBP 108, ,404 Repsol SA ESP EUR 21, , Road & Rail 359 FirstGroup PLC GBR GBP Specialty Retail 71,966 Kingfisher PLC GBR GBP 315, ,991 Dufry AG CHE CHF 246, , Technology Hardware, Storage & Peripherals 1,493 Wincor Nixdorf AG DEU EUR 60, Companies & Distributors 40,180 Kloeckner & Co. SE DEU EUR 360, TOTAL SHARES 12,652, RIGHTS Oil, Gas & Consumable Fuels 1,404 Repsol SA, rts., 01/08/15 ESP EUR TOTAL RIGHTS TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 12,652, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 100,000 Baggot Securities Ltd., secured bond, Reg S, 10.24%, Perpetual IRL EUR 104, TOTAL BONDS 104, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 104, TOTAL INVESTMENTS 12,757, Unaudited Semi-Annual Report 317

320 Franklin Mutual European Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Airlines 10,856,575 International Consolidated Airlines Group SA GBR GBP 67,982, Auto Components 3,445,426 Pirelli & C. SpA ITA EUR 38,623, ,548 Cie Generale des Etablissements Michelin, B FRA EUR 25,482, ,105, Automobiles 379,346 Volkswagen AG, pfd. DEU EUR 70,046, ,591 Audi AG DEU EUR 25,732, ,778, Banks 25,791,025 Barclays PLC GBR GBP 80,899, ,465,300 BNP Paribas SA FRA EUR 72,180, ,809,814 ING Groep NV, IDR NLD EUR 52,090, ,691,304 UniCredit SpA ITA EUR 51,703, ,366,772 Societe Generale SA FRA EUR 47,823, ,426,475 Commerzbank AG DEU EUR 37,622, ,676,830 Intesa Sanpaolo SpA ITA EUR 33,125, ,749,459 National Bank of Greece SA GRC EUR 27,561, ,006, Capital s 1,668,217 Credit Suisse Group AG CHE CHF 34,779, ,954,430 UBS Group AG CHE CHF 27,765, ,544, Chemicals 735,788 Arkema FRA EUR 40,519, Commercial Services & Supplies 8,313,352 G4S PLC GBR GBP 29,760, Construction & Engineering 1,212,845 FLSmidth & Co. AS DNK DKK 44,345, ,778,460 Balfour Beatty PLC GBR GBP 10,318, ,663, Construction Materials 473,977 SA des Ciments Vicat FRA EUR 28,249, Containers & Packaging 6,223,366 Rexam PLC GBR GBP 36,380, Diversified Financial Services 622,000 Oslo Bors VPS Holding ASA NOR NOK 5,229, Diversified Telecommunication Services 31,946,480 Koninklijke KPN NV NLD EUR 83,955, ,017,553 TDC AS DNK DKK 44,503, ,386,582 Hellenic Telecommunications Organization SA GRC EUR 39,917, ,015,289 Telecom Italia SpA ITA EUR 32,647, ,913,441 Telenor ASA NOR NOK 32,067, ,091, Electric Utilities 16,153,475 Enel SpA ITA EUR 59,703, Food & Staples Retailing 2,820,389 Metro AG DEU EUR 71,384, Hotels, Restaurants & Leisure 2,486,856 Accor SA FRA EUR 92,859, Industrial Conglomerates 308,746 Siemens AG DEU EUR 28,944, ,174,481 Koninklijke Philips NV NLD EUR 28,363, ,308, Insurance 25,847,625 Direct Line Insurance Group PLC GBR GBP 96,992, ,987,561 Ageas BEL EUR 88,147, ,631,127 RSA Insurance Group PLC GBR GBP 76,383, ,417,734 NN Group NV NLD EUR 60,068, ,389,649 Storebrand ASA NOR NOK 52,940, ,014,895 Assicurazioni Generali SpA ITA EUR 51,253, ,987,274 Lancashire Holdings Ltd. GBR GBP 50,404, Unaudited Semi-Annual Report

321 Franklin Mutual European Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Insurance (continued) 5,360,429 UNIQA Insurance Group AG AUT EUR 41,688, ,909,246 Friends Life Group Ltd. GBR GBP 32,593, ,020 ACE Ltd. USA USD 23,262, ,734, Machinery 3,814,405 IMI PLC GBR GBP 62,059, ,910 Vossloh AG DEU EUR 26,852, ,244,291 CNH Industrial NV GBR EUR 15,036, ,948, Marine 58,830 A.P. Moeller-Maersk AS, B DNK DKK 97,715, Media 3,714,634 Reed Elsevier PLC GBR GBP 52,636, ,649 Liberty Global PLC, C GBR USD 37,476, ,646 RTL Group SA DEU EUR 25,923, ,035, Metals & Mining 3,429,148 ThyssenKrupp AG DEU EUR 72,903, ,069,210 Voestalpine AG AUT EUR 35,064, ,032,471 Anglo American PLC GBR GBP 15,966, ,935, Multiline Retail 6,426,395 Marks & Spencer Group PLC GBR GBP 39,636, Oil, Gas & Consumable Fuels 2,290,986 Royal Dutch Shell PLC, A GBR EUR 63,368, ,233,391 BG Group PLC GBR GBP 36,028, ,377,531 Cairn Energy PLC GBR GBP 33,059, ,419,713 BP PLC GBR GBP 28,694, ,514 Repsol SA ESP EUR 5,231, ,382, Pharmaceuticals 695,701 Novartis AG CHE CHF 53,407, Road & Rail 5,106,702 FirstGroup PLC GBR GBP 7,019, Specialty Retail 16,120,366 Kingfisher PLC GBR GBP 70,708, ,961 Dufry AG CHE CHF 67,498, ,206, Technology Hardware, Storage & Peripherals 484,934 Wincor Nixdorf AG DEU EUR 19,499, Companies & Distributors 3,414,370 Kloeckner & Co. SE DEU EUR 30,602, Wireless Telecommunication Services 30,870,442 Vodafone Group PLC GBR GBP 88,540, TOTAL SHARES 2,961,232, RIGHTS Oil, Gas & Consumable Fuels 336,514 Repsol SA, rts., 01/08/15 ESP EUR 153, TOTAL RIGHTS 153, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 2,961,386, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Energy Equipment & Services 1,439,424 DeepOcean Group Holding BV NLD USD 29,740, TOTAL SHARES 29,740, BONDS Corporate Bonds 6,933,000 Baggot Securities Ltd., secured bond, Reg S, 10.24%, Perpetual IRL EUR 7,262, TOTAL BONDS 7,262, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 37,002, Unaudited Semi-Annual Report 319

322 Franklin Mutual European Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Real Estate Management & Development 2,100 Canary Wharf Group PLC ** GBR GBP 14, Road & Rail 18,431,027 Euro Wagon LP ** JER EUR 17,500, TOTAL SHARES 17,515, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 17,515, TOTAL INVESTMENTS 3,015,904, ** These securities are submitted to a Fair Valuation 320 Unaudited Semi-Annual Report

323 Franklin Mutual Global Discovery Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 168,500 B/E Aerospace Inc. USA USD 9,776, ,250 KLX Inc. USA USD 3,475, ,251, Airlines 1,091,963 International Consolidated Airlines Group SA GBR GBP 8,273, Auto Components 114,380 Cie Generale des Etablissements Michelin, B FRA EUR 10,417, Automobiles 104,633 Volkswagen AG, pfd. DEU EUR 23,377, ,460 General Motors Co. USA USD 18,692, ,944 Hyundai Motor Co. KOR KRW 7,407, ,478, Banks 5,322,822 Barclays PLC GBR GBP 20,202, ,970 JPMorgan Chase & Co. USA USD 19,147, ,960 Wells Fargo & Co. USA USD 18,965, ,329,242 Commerzbank AG DEU EUR 17,660, ,000 BNP Paribas SA FRA EUR 17,642, ,650 Citigroup Inc. USA USD 17,350, ,080 PNC Financial Services Group Inc. USA USD 16,976, ,272,800 ING Groep NV, IDR NLD EUR 16,679, ,008,782 Industrial and Commercial Bank of China Ltd., H CHN HKD 15,335, ,175,620 HSBC Holdings PLC GBR GBP 11,152, ,060 Societe Generale SA FRA EUR 11,137, ,480 SunTrust Banks Inc. USA USD 10,914, ,430 Hana Financial Group Inc. KOR KRW 8,584, ,606 Citizens Financial Group Inc. USA USD 5,011, ,750 Seacoast Banking Corp. of Florida USA USD 684, ,444, Beverages 205,764 PepsiCo Inc. USA USD 19,457, Capital s 315,303 Credit Suisse Group AG CHE CHF 7,953, Communications Equipment 568,210 Cisco Systems Inc. USA USD 15,804, Construction & Engineering 24,871,500 Sinopec Engineering Group Co. Ltd. CHN HKD 16,839, ,040 FLSmidth & Co. AS DNK DKK 12,035, ,875, Construction Materials 29,216,000 Xinyi Glass Holdings Ltd. CHN HKD 14,732, Consumer Finance 432,300 Ally Financial Inc. USA USD 10,210, Diversified Financial Services 147,199 CIT Group Inc. USA USD 7,040, Diversified Telecommunication Services 7,561,950 Koninklijke KPN NV NLD EUR 24,046, ,467,529 TDC AS DNK DKK 11,261, ,307, Electric Utilities 3,467,891 Enel SpA ITA EUR 15,508, Energy Equipment & Services 256,290 Baker Hughes Inc. USA USD 14,370, ,144 Transocean Ltd. USA USD 4,071, ,333 Ensco PLC, A USA USD 2,016, ,458, Food & Staples Retailing 606,064 Metro AG DEU EUR 18,560, ,206 Walgreens Boots Alliance Inc. USA USD 12,969, ,530, Health Care Equipment & Supplies 447,987 Medtronic Inc. USA USD 32,344, ,355 Stryker Corp. USA USD 18,522, ,866, Unaudited Semi-Annual Report 321

324 Franklin Mutual Global Discovery Fund Schedule of Investments as of December 31, 2014 (continued) face Health Care Providers & Services 111,616 Cigna Corp. USA USD 11,486, Hotels, Restaurants & Leisure 534,140 Accor SA FRA EUR 24,133, Independent Power and Renewable Electricity Producers 348,937 NRG Energy Inc. USA USD 9,403, Industrial Conglomerates 301,740 Jardine Strategic Holdings Ltd. HKG USD 10,319, ,458 Koninklijke Philips NV NLD EUR 3,432, ,751, Insurance 5,102,574 RSA Insurance Group PLC GBR GBP 34,597, ,635,668 Direct Line Insurance Group PLC GBR GBP 30,129, ,608,912 China Pacific Insurance (Group) Co. Ltd., H CHN HKD 23,270, ,616 The Allstate Corp. USA USD 20,977, ,608,213 PICC Property and Casualty Co. Ltd., H CHN HKD 18,686, ,837 American International Group Inc. USA USD 17,970, ,074,045 Friends Life Group Ltd. GBR GBP 17,546, ,490 PartnerRe Ltd. USA USD 14,208, ,420 MetLife Inc. USA USD 12,625, ,560 ACE Ltd. USA USD 12,356, ,013,580 Storebrand ASA NOR NOK 11,778, ,251,030 Lancashire Holdings Ltd. GBR GBP 10,919, ,066, IT Services 877,274 Xerox Corp. USA USD 12,159, Machinery 816,920 CNH Industrial NV GBR EUR 6,622, ,593 Caterpillar Inc. USA USD 6,278, ,901, Marine 10,270 A.P. Moeller-Maersk AS, B DNK DKK 20,640, Media 351,478 CBS Corp., B USA USD 19,450, ,999 Time Warner Cable Inc. USA USD 14,293, ,570 Time Warner Inc. USA USD 13,545, ,560 Twenty-First Century Fox Inc., B USA USD 11,382, ,672, Metals & Mining 597,973 ThyssenKrupp AG DEU EUR 15,382, ,466 Anglo American PLC GBR GBP 9,140, ,868 Freeport-McMoRan Inc., B USA USD 4,014, ,537, Multiline Retail 1,752,967 Marks & Spencer Group PLC GBR GBP 13,082, ,306 Kohl s Corp. USA USD 5,268, ,350, Oil, Gas & Consumable Fuels 894,910 Royal Dutch Shell PLC, A GBR EUR 29,951, ,746,160 BP PLC GBR GBP 17,592, ,276 Apache Corp. USA USD 16,436, ,501,263 China Shenhua Energy Co. Ltd., H CHN HKD 13,293, ,820 Marathon Oil Corp. USA USD 9,613, ,074,230 Talisman Energy Inc. CAN USD 8,411, ,150 Anadarko Petroleum Corp. USA USD 7,767, ,660 BG Group PLC GBR GBP 7,141, ,940 Murphy Oil Corp. USA USD 6,109, ,943 Repsol SA ESP EUR 2,613, ,509 Talisman Energy Inc. CAN CAD 458, ,389, Paper & Forest Products 153,160 International Paper Co. USA USD 8,206, Personal Products 759,121 Avon Products Inc. USA USD 7,128, Unaudited Semi-Annual Report

325 Franklin Mutual Global Discovery Fund Schedule of Investments as of December 31, 2014 (continued) face Pharmaceuticals 613,380 Merck & Co. Inc. USA USD 34,833, ,927 Teva Pharmaceutical Industries Ltd., ADR ISR USD 32,776, ,751 Eli Lilly & Co. USA USD 19,162, ,641 Hospira Inc. USA USD 15,596, ,369, Real Estate Management & Development 1,028,700 Dalian Wanda Commercial Properties Co. Ltd., H CHN HKD 6,547, ,208,696 Dolphin Capital Investors Ltd. GRC GBP 522, ,069, Software 592,236 Microsoft Corp. USA USD 27,509, ,022 Symantec Corp. USA USD 19,267, ,776, Specialty Retail 3,937,374 Kingfisher PLC GBR GBP 20,897, ,224 Dufry AG CHE CHF 19,366, ,627,191 China ZhengTong Auto Services Holdings Ltd. CHN HKD 10,830, ,832,500 Baoxin Auto Group Ltd. CHN HKD 10,326, ,420, Technology Hardware, Storage & Peripherals 261,050 Apple Inc. USA USD 28,814, ,638 Samsung Electronics Co. Ltd. KOR KRW 15,333, ,894 Hewlett-Packard Co. USA USD 12,676, ,824, Tobacco 376,150 British American Tobacco PLC GBR GBP 20,520, ,932 Lorillard Inc. USA USD 15,164, ,571 Altria Group Inc. USA USD 6,383, ,960 Philip Morris International Inc. USA USD 6,105, ,174, Wireless Telecommunication Services 8,940,854 Vodafone Group PLC GBR GBP 31,028, TOTAL SHARES 1,470,103, RIGHTS Oil, Gas & Consumable Fuels 138,943 Repsol SA, rts., 01/08/15 ESP EUR 76, TOTAL RIGHTS 76, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,470,179, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Paper & Forest Products 41,680 NewPage Holdings Inc. USA USD 3,782, TOTAL SHARES 3,782, BONDS Corporate Bonds 11,450,000 iheartcommunications Inc., senior secured note, first lien, 9.00%, 12/15/19 USA USD 11,321, ,418,000 Avaya Inc., senior secured note, 144A, 7.00%, 04/01/19 USA USD 5,309, ,560,000 Walter Energy Inc., first lien, 144A, 9.50%, 10/15/19 USA USD 5,018, ,735,000 Avaya Inc., senior note, 144A, 10.50%, 03/01/21 USA USD 4,072, ,284,000 Baggot Securities Ltd., secured bond, Reg S, 10.24%, Perpetual IRL EUR 2,895, ,678,000 NGPL PipeCo LLC, secured note, 144A, 7.119%, 12/15/17 USA USD 1,657, ,739,000 Walter Energy Inc., second lien, 144A, PIK, 11.50%, 04/01/20 USA USD 582, ,856, Government and Municipal Bonds 6,378,000 Puerto Rico Commonwealth GO, Refunding, Series A, 8.00%, 07/01/35 USA USD 5,572, Securities Maturing Within One Year 5,000,000 U.S. Treasury Bill, 0.00%, 04/16/15 USA USD 4,999, ,000,000 U.S. Treasury Bill, 0.00%, 04/30/15 USA USD 4,999, ,000,000 U.S. Treasury Bill, 0.00%, 05/14/15 USA USD 3,999, Unaudited Semi-Annual Report 323

326 Franklin Mutual Global Discovery Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 2,500,000 U.S. Treasury Bill, 0.00%, 04/23/15 USA USD 2,499, ,000,000 U.S. Treasury Bill, 0.00%, 04/02/15 USA USD 999, ,000 U.S. Treasury Bill, 0.00%, 01/02/15 USA USD 100, ,598, TOTAL BONDS 54,026, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 57,809, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Auto Components 207,777 International Automotive Components Group North America LLC ** USA USD 157, Consumer Finance 172,544 FIM Coinvestor Holdings I LLC ** USA USD Diversified Financial Services 7,190,000 Hightower Holding LLC, pfd., A ** USA USD 7,775, ,552,000 Hightower Holding LLC, pfd., A, 2 ** USA USD 3,610, ,386, TOTAL SHARES 11,543, BONDS Corporate Bonds 10,420,000 NewPage Corp., Escrow Account ** USA USD TOTAL BONDS TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 11,543, TOTAL INVESTMENTS 1,539,533, ** These securities are submitted to a Fair Valuation Income may be received in additional securities and/or cash 324 Unaudited Semi-Annual Report

327 Templeton Africa Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Banks 48,452,690 Guaranty Trust Bank PLC NGA NGN 6,666, ,370,491 Zenith Bank PLC NGA NGN 5,670, ,938 Commercial International Bank Egypt SAE EGY EGP 5,177, ,100,024 FBN Holdings PLC NGA NGN 3,370, ,906,268 Kenya Commercial Bank Ltd. KEN KES 3,061, ,161,921 Access Bank Nigeria PLC NGA NGN 2,674, ,900 MCB Group Ltd. MUS MUR 2,088, ,600 Barclays Africa Group Ltd. ZAF ZAR 2,023, ,291,865 United Bank for Africa PLC NGA NGN 1,753, ,176,556 The Co-operative Bank of Kenya Ltd. KEN KES 1,343, ,899,412 Equity Bank Ltd. KEN KES 1,048, ,251 Ecobank Transnational Inc. NGA NGN 40, ,920, Beverages 7,584,811 Nigerian Breweries PLC NGA NGN 6,851, ,414,592 Delta Corp. Ltd. ZWE USD 4,502, ,045,892 East African Breweries Ltd. KEN KES 3,580, ,400 SABMiller PLC GBR ZAR 1,120, ,054, Chemicals 463,045 Alexandria Mineral Oils Co. EGY EGP 3,885, ,909 Paints & Chemical Industries Co. SAE EGY EGP 709, ,594, Diversified Financial Services 225,100 Remgro Ltd. ZAF ZAR 4,943, ,230 Poulina Group TUN TND 2,313, ,257, Diversified Telecommunication Services 99,146 Sonatel SEN XOF 4,172, ,474,921 Telecom Egypt EGY EGP 2,452, ,625, Food & Staples Retailing 355,000 Shoprite Holdings Ltd. ZAF ZAR 5,164, ,302 Massmart Holdings Ltd. ZAF ZAR 1,238, ,403, Food Products 2,078,081 Juhayna Food Industries EGY EGP 2,784, ,600 Zambeef Products PLC ZMB GBP 95, ,880, Hotels, Restaurants & Leisure 573,279 New Mauritius Hotels Ltd. MUS MUR 1,421, Industrial Conglomerates 100,818 Press Corp. Ltd., GDR, Reg S MWI USD 1,965, ,275,197 Innscor Africa Ltd. ZWE USD 1,421, ,426,706 UAC of Nigeria PLC NGA NGN 1,208, ,595, Metals & Mining 111,420 Anglo American PLC GBR ZAR 2,074, ,899 Kumba Iron Ore Ltd. ZAF ZAR 1,159, ,950 Impala Platinum Holdings Ltd. ZAF ZAR 923, ,157, Oil, Gas & Consumable Fuels 1,132,697 SEPLAT Petroleum Development Co. PLC, Reg S NGA GBP 2,542, ,800 Exxaro Resources Ltd. ZAF ZAR 1,519, ,062, Pharmaceuticals 632,619 Egyptian International Pharmaceutical Industries Co. EGY EGP 6,945, Specialty Retail 324,832 The Foschini Group Ltd. ZAF ZAR 3,742, ,428 Truworths International Ltd. ZAF ZAR 1,513, ,255, Unaudited Semi-Annual Report 325

328 Templeton Africa Fund Schedule of Investments as of December 31, 2014 (continued) face Tobacco 184,900 Eastern Tobacco EGY EGP 5,689, ,000 British American Tobacco Kenya Ltd. Corp. KEN KES 1,371, ,061, Wireless Telecommunication Services 305,086 MTN Group Ltd. ZAF ZAR 5,841, ,476,610 Eco Wireless Zimbabwe Ltd. ZWE USD 2,085, ,700 Global Telecom Holding, GDR, Reg S EGY USD 802, ,729, TOTAL SHARES 120,965, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 120,965, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Beverages 1,504,712 Sechaba Brewery Holding Ltd. BWA BWP 4,445, Consumer Finance 7,385,565 Letshego Holdings Ltd. BWA BWP 2,064, TOTAL SHARES 6,510, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 6,510, TOTAL INVESTMENTS 127,475, Unaudited Semi-Annual Report

329 Templeton ASEAN Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles 344,000 Astra International Tbk PT IDN IDR 206, Banks 15,000 DBS Group Holdings Ltd. SGP SGD 233, ,000 United Overseas Bank Ltd. SGP SGD 222, ,000 Oversea-Chinese Banking Corp. Ltd. SGP SGD 221, ,300 Kasikornbank PCL, fgn. THA THB 190, ,000 Bank Rakyat Indonesia Persero Tbk PT IDN IDR 154, ,400 Siam Commercial Bank PCL, fgn. THA THB 146, ,100 Bank Danamon Indonesia Tbk PT IDN IDR 113, ,500 Bank Mandiri Persero Tbk PT, ADR IDN IDR 99, ,900 Hong Leong Financial Group Bhd. MYS MYR 89, ,000 Malayan Banking Bhd. MYS MYR 68, ,300 Alliance Financial Group Bhd. MYS MYR 48, ,000 Public Bank Bhd. MYS MYR 47, ,633, Beverages 15,000 Carlsberg Brewery Malaysia Bhd. MYS MYR 50, ,000 Thai Beverage PCL, fgn. THA SGD 23, , Construction & Engineering 64,800 Gamuda Bhd. MYS MYR 92, Construction Materials 153,000 Semen Indonesia (Persero) Tbk PT IDN IDR 200, ,200 Siam Cement PCL, fgn. THA THB 98, , Diversified Financial Services 3,410 Ayala Corp. PHL PHP 52, Diversified Telecommunication Services 56,000 Singapore Telecommunications Ltd. SGP SGD 164, ,000 Telekomunikasi Indonesia Persero Tbk PT, B IDN IDR 77, ,400 TIME DotCom Bhd. MYS MYR 46, , Electric Utilities 24,000 Tenaga Nasional Bhd. MYS MYR 94, Electronic Equipment, Instruments & Component 255,400 Erajaya Swasembada Tbk PT IDN IDR 22, Food Products 19,000 Thai Union Frozen Products PCL, fgn. THA THB 52, ,000 Century Pacific Food Inc. PHL PHP 50, ,000 Super Group Ltd. SGP SGD 26, , Gas Utilities 199,000 Perusahaan Gas Negara (Persero) Tbk PT IDN IDR 96, Health Care Equipment & Supplies 24,200 Hartalega Holdings Bhd. MYS MYR 48, ,000 Biosensors International Group Ltd. SGP SGD 46, , Health Care Providers & Services 90,100 Bangkok Dusit Medical Services PCL, fgn. THA THB 47, ,500 Bangkok Chain Hospital PCL, fgn. THA THB 45, , Hotels, Restaurants & Leisure 249,700 Bloomberry Resorts Corp. PHL PHP 69, ,900 Melco Crown Philippines Resorts Corp. PHL PHP 51, ,900 The Erawan Group PCL, fgn. THA THB 49, , Independent Power and Renewable Electricity Producers 72,100 Energy Development Corp. PHL PHP 13, Industrial Conglomerates 7,000 Keppel Corp. Ltd. SGP SGD 46, ,000 SembCorp Industries Ltd. SGP SGD 36, , Unaudited Semi-Annual Report 327

330 Templeton ASEAN Fund Schedule of Investments as of December 31, 2014 (continued) face Insurance 2,126,500 Panin Financial Tbk PT IDN IDR 51, Machinery 32,000 United Tractors Tbk PT IDN IDR 44, ,000 SembCorp Marine Ltd. SGP SGD 39, , Media 66,000 Major Cineplex Group PCL, fgn. THA THB 55, Multiline Retail 2,113,500 Ramayana Lestari Sentosa Tbk PT IDN IDR 134, Pharmaceuticals 357,000 Kalbe Farma Tbk PT IDN IDR 52, Real Estate Investment Trust (REIT) 32,000 CapitaMall Trust SGP SGD 49, Real Estate Management & Development 492,000 Land and Houses PCL, NVDR THA THB 135, ,000 Robinsons Land Corp. PHL PHP 51, ,000 Supalai PCL, fgn. THA THB 46, ,000 City Developments Ltd. SGP SGD 46, , Transportation Infrastructure 3,000 Airports of Thailand PCL THA THB 25, Wireless Telecommunication Services 66,400 Intouch Holdings PCL, NVDR THA THB 159, ,700 Advanced Info Service PCL, fgn. THA THB 104, , TOTAL SHARES 4,442, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 4,442, TOTAL INVESTMENTS 4,442, Unaudited Semi-Annual Report

331 Templeton Asian Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 52,540,000 Sinochem Overseas Capital Co. Ltd., senior note, Reg S, 4.50%, 11/12/20 CHN USD 55,631, ,000,000 Bank of China Ltd./Singapore, senior note, Reg S, 3.30%, 03/04/16 CHN CNY 47,355, ,000,000 Bank of China Ltd./Sydney, senior note, Reg S, 3.25%, 04/17/16 CHN CNY 44,892, ,960,000 ICICI Bank Ltd., junior sub. notes, Reg S, 6.375% to 04/30/17, FRN thereafter, 04/30/22 IND USD 18,599, ,000,000,000 Export-Import Bank of India, senior note, 9.70%, 11/21/18 IND INR 16,482, ,800,000 HSBC Holdings PLC, sub. note, 6.50%, 09/15/37 GBR USD 4,898, ,000,000 Export-Import Bank of India, senior note, 8.76%, 01/10/18 IND INR 3,692, ,000 Hutchison Whampoa International Ltd., Reg S, 7.45%, 11/24/33 HKG USD 243, ,796, Government and Municipal Bonds 4,364,731,288 Government of Thailand, Index Linked, Reg S, 1.25%, 03/12/28 THA THB 118,539, ,500,000 Government of Mongolia, Reg S, 5.125%, 12/05/22 MNG USD 109,894, ,325,000 Government of Fiji, senior bond, 9.00%, 03/15/16 FJ USD 79,187, ,612,000,000 Korea Moary Stabilization Bond, senior note, 2.07%, 12/02/16 KOR KRW 68,196, ,000,000 Government of China, senior note, Reg S, 2.74%, 11/21/17 CHN CNY 58,340, ,430,000,000 Government of India, 7.99%, 07/09/17 IND INR 54,481, ,400,000,000 Government of India, senior bond, 7.02%, 08/17/16 IND INR 53,394, ,494,000,000 Government of Sri Lanka, B, 8.00%, 06/01/16 LKA LKR 42,778, ,047,000,000 Government of Indonesia, FR40, 11.00%, 09/15/25 IDN IDR 37,197, ,184,300,000 Korea Moary Stabilization Bond, senior note, 2.22%, 10/02/16 KOR KRW 34,076, ,721,800,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 31,927, ,997,820,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 31,722, ,620,000,000 Government of Indonesia, FR46, 9.50%, 07/15/23 IDN IDR 29,006, ,189,910,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 25,950, ,600,000,000 Government of India, senior note, 8.07%, 07/03/17 IND INR 25,518, ,600,000,000 Government of Indonesia, FR47, 10.00%, 02/15/28 IDN IDR 22,375, ,000,000 Government of the Philippines, senior note, 4.95%, 01/15/21 PHL PHP 20,723, ,408,000,000 Government of Indonesia, FR42, 10.25%, 07/15/27 IDN IDR 20,548, ,126,100,000 Government of Sri Lanka, A, 5.80%, 01/15/17 LKA LKR 15,934, ,890,000,000 Government of Indonesia, FR39, 11.75%, 08/15/23 IDN IDR 15,852, ,409,800,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 14,330, ,820,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 13,817, ,772,000,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 13,630, ,482,900,000 Government of Sri Lanka, B, 6.40%, 10/01/16 LKA LKR 11,263, ,070,000 Government of the Philippines, senior bond, 9.125%, 09/04/16 PHL PHP 10,020, ,000,000 Government of India, senior bond, 7.46%, 08/28/17 IND INR 9,398, ,121,000,000 Government of Sri Lanka, B, 5.80%, 07/15/17 LKA LKR 8,320, ,360,000 Government of Sri Lanka, B, 8.50%, 07/15/18 LKA LKR 6,473, ,400,000 Government of Sri Lanka, senior note, Reg S, 6.25%, 07/27/21 LKA USD 5,647, ,577,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 5,452, ,096,000,000 Government of Indonesia, 7.875%, 04/15/19 IDN IDR 5,403, ,040,000 Government of the Philippines, senior bond, 7.00%, 01/27/16 PHL PHP 5,330, ,900,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 3,052, ,300,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 2,322, ,215,000,000 Government of Indonesia, FR37, 12.00%, 09/15/26 IDN IDR 2,215, ,491,000,000 Government of Indonesia, senior bond, FR53, 8.25%, 07/15/21 IDN IDR 1,696, ,000,000 Government of India, senior note, 7.59%, 04/12/16 IND INR 1,581, ,400,000 Government of Sri Lanka, A, 6.40%, 08/01/16 LKA LKR 1,221, ,840,000 Financing of Infrastructure Projects State Enterprise, Reg S, 7.40%, 04/20/18 UKR USD 1,113, ,080,000 Government of Singapore, senior note, 1.125%, 04/01/16 SGP SGD 820, ,109,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 751, ,019,512, Securities Maturing Within One Year 451,437,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 130,368, ,499,100,000 Korea Moary Stabilization Bond, 0.00%, 01/13/15 KOR KRW 57,115, ,120,000,000 The Export-Import Bank of Korea, senior note, Reg S, 4.00%, 11/26/15 KOR PHP 48,033, ,906,300,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 46,836, ,010,000,000 Philippine Treasury Bill, 0.00%, 01/07/15 PHL PHP 44,873, ,381,100,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 41,608, ,402,100,000 Korea Moary Stabilization Bond, senior note, 2.13%, 10/08/15 KOR KRW 39,700, ,390,000,000 Government of India, 7.17%, 06/14/15 IND INR 37,755, ,600,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 33,731, ,540,100,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 27,757, ,058,100,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 20,187, ,105,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 17,773, ,380,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 14,672, ,477,100,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 9,627, ,960,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 6,529, ,970,000 Bank of Negara Moary Note, 0.00%, 05/05/15 MYS MYR 6,212, ,910,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 4,775, ,870,000 Philippine Treasury Bill, 0.00%, 09/02/15 PHL PHP 3,303, ,400,000 Government of Sri Lanka, B, 11.00%, 09/01/15 LKA LKR 2,977, ,510,000 Philippine Treasury Bill, 0.00%, 04/08/15 PHL PHP 1,655, Unaudited Semi-Annual Report 329

332 Templeton Asian Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 50,710,000 Philippine Treasury Bill, 0.00%, 10/07/15 PHL PHP 1,115, ,160,000 Philippine Treasury Bill, 0.00%, 12/02/15 PHL PHP 859, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/02/15 SGP SGD 649, ,790,000 Philippine Treasury Bill, 0.00%, 07/08/15 PHL PHP 503, ,710,000 Philippine Treasury Bill, 0.00%, 06/03/15 PHL PHP 458, ,810,000 Philippine Treasury Bill, 0.00%, 11/04/15 PHL PHP 347, ,650,000 Philippine Treasury Bill, 0.00%, 05/06/15 PHL PHP 302, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/09/15 SGP SGD 188, ,780,000 Philippine Treasury Bill, 0.00%, 08/05/15 PHL PHP 149, ,250,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 111, ,184, TOTAL BONDS 1,811,493, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 1,811,493, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 183,000,000 Industrial & Commercial Bank of China Ltd., senior note, Reg S, 3.20%, 04/24/16 CHN CNY 29,320, TOTAL BONDS 29,320, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 29,320, TOTAL INVESTMENTS 1,840,813, Unaudited Semi-Annual Report

333 Templeton Asian Dividend Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles 8,000 UMW Holdings Bhd. MYS MYR 25, Banks 229,662 Hatton National Bank PLC LKA LKR 267, ,600 China Construction Bank Corp., H CHN HKD 253, ,900 United Bank Ltd. PAK PKR 244, ,480 DBS Group Holdings Ltd. SGP SGD 240, ,200 Siam Commercial Bank PCL, fgn. THA THB 211, ,500 BOC Hong Kong (Holdings) Ltd. HKG HKD 195, ,000 Public Bank Bhd. MYS MYR 188, ,100 Industrial and Commercial Bank of China Ltd., H CHN HKD 150, ,678 Oversea-Chinese Banking Corp. Ltd. SGP SGD 147, ,899, Beverages 454,600 Thai Beverage PCL, fgn. THA SGD 236, ,000 Carlsberg Brewery Malaysia Bhd. MYS MYR 157, , Building Products 112,700 Dynasty Ceramic PCL, fgn. THA THB 193, Chemicals 384,000 Fauji Fertilizer Co. Ltd. PAK PKR 445, Communications Equipment 15,000 VTech Holdings Ltd. HKG HKD 215, Diversified Telecommunication Services 815,000 Telekomunikasi Indonesia Persero Tbk PT, B IDN IDR 188, ,000 Singapore Telecommunications Ltd. SGP SGD 158, , Electric Utilities 30,000 Cheung Kong Infrastructure Holdings Ltd. HKG HKD 222, ,500 Power Assets Holdings Ltd. HKG HKD 218, , Electronic Equipment, Instruments & Components 230,600 Delta Electronics (Thailand) PCL, fgn. THA THB 494, ,000 Synnex Technology International Corp. TWN TWD 167, ,000 Simplo Technology Co. Ltd. TWN TWD 134, , Gas Utilities 344,500 Perusahaan Gas Negara (Persero) Tbk PT IDN IDR 166, Hotels, Restaurants & Leisure 32,800 MGM China Holdings Ltd. HKG HKD 83, Machinery 89,000 Shin Zu Shing Co. Ltd. TWN TWD 202, ,000 SembCorp Marine Ltd. SGP SGD 34, , Media 151,600 BEC World PCL, fgn. THA THB 235, Oil, Gas & Consumable Fuels 154,000 China Petroleum and Chemical Corp., H CHN HKD 124, ,000 PetroChina Co. Ltd., H CHN HKD 81, ,000 China Shenhua Energy Co. Ltd., H CHN HKD 56, , Real Estate Investment Trusts (REITs) 456,700 Sunway REIT MYS MYR 198, ,000 CapitaMall Trust SGP SGD 177, ,500 KLCC Property Holdings Bhd. MYS MYR 150, ,000 Keppel REIT Management Ltd. SGP SGD 91, , Real Estate Management & Development 502,600 Land and Houses PCL, fgn. THA THB 138, ,900 Quality Houses PCL, fgn. THA THB 33, ,500 Land and Houses PCL, NVDR THA THB 22, , Unaudited Semi-Annual Report 331

334 Templeton Asian Dividend Fund Schedule of Investments as of December 31, 2014 (continued) face Semiconductors & Semiconductor Equipment 10,000 Novatek Microelectronics Corp. Ltd. TWN TWD 56, Specialty Retail 19,400 Giordano International Ltd. HKG HKD 8, Technology Hardware, Storage & Peripherals 13,000 Asustek Computer Inc. TWN TWD 142, Textiles, Apparel & Luxury Goods 802,000 Victory City International Holdings Ltd. HKG HKD 115, Tobacco 13,100 British American Tobacco Malaysia Bhd. MYS MYR 243, Companies & Distributors 249,400 Hexindo Adiperkasa Tbk PT IDN IDR 70, Wireless Telecommunication Services 11,000 China Mobile Ltd. CHN HKD 128, ,400 Intouch Holdings PCL, NVDR THA THB 77, ,800 Grameenphone Ltd. BGD BDT 72, , TOTAL SHARES 7,472, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 7,472, TOTAL INVESTMENTS 7,472, Unaudited Semi-Annual Report

335 Templeton Asian Growth Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles 496,698,000 Brilliance China Automotive Holdings Ltd. CHN HKD 794,311, ,201,786,000 Astra International Tbk PT IDN IDR 720,489, ,416,695 Guangzhou Automobile Group Co. Ltd., H CHN HKD 314,057, ,828,859, Banks 163,497,500 Siam Commercial Bank PCL, fgn. THA THB 905,004, ,031,700 Kasikornbank PCL, fgn. THA THB 752,410, ,038,010 China Merchants Bank Co. Ltd., H CHN HKD 419,213, ,359,500 Bank Rakyat Indonesia Persero Tbk PT IDN IDR 274,068, ,385,004 Bank Danamon Indonesia Tbk PT IDN IDR 222,645, ,612,089 MCB Bank Ltd. PAK PKR 166,075, ,133,889 Tisco Financial Group PCL, fgn. THA THB 53,168, ,974,200 Thanachart Capital PCL, fgn. THA THB 45,359, ,332,100 Kiatnakin Bank PCL, fgn. THA THB 37,640, ,875,587, Communications Equipment 23,185,300 VTech Holdings Ltd. HKG HKD 333,100, Construction & Engineering 3,324,843 Hyundai Development Co. KOR KRW 117,641, Construction Materials 32,046,486 Siam Cement PCL, fgn. THA THB 438,592, Food & Staples Retailing 34,181,734 Dairy Farm International Holdings Ltd. HKG USD 307,635, Health Care Equipment & Supplies 10,494,162 Microlife Corp. TWN TWD 22,446, Household Durables 129,778,602 Samson Holding Ltd. HKG HKD 18,076, IT Services 20,431,919 Tata Consultancy Services Ltd. IND INR 829,221, ,389,294 Infosys Ltd. IND INR 262,525, ,091,746, Machinery 83,363,310 China International Marine Containers (Group) Co. Ltd. CHN HKD 186,423, ,965,863 SembCorp Marine Ltd. SGP SGD 90,963, ,051,363 United Tractors Tbk PT IDN IDR 67,314, ,348,620 Daewoo Shipbuilding & Marine Engineering Co. Ltd. KOR KRW 22,995, ,697, Media 184,637,800 BEC World PCL, fgn. THA THB 286,390, Metals & Mining 780,092,000 Aluminum Corp. of China Ltd., H CHN HKD 359,162, ,906,539 Sesa Sterlite Ltd. IND INR 237,882, ,045, Oil, Gas & Consumable Fuels 326,969,423 Oil & Gas Development Co. Ltd. PAK PKR 668,837, ,765,371 PTT PCL, fgn. THA THB 510,096, ,557,580 Oil & Natural Gas Corp. Ltd. IND INR 387,501, ,833,500 Reliance Industries Ltd. IND INR 322,805, ,502,070 Coal India Ltd. IND INR 185,741, ,486,313 PTT Exploration and Production PCL, fgn. THA THB 175,379, ,950,600 PetroChina Co. Ltd., H CHN HKD 131,622, ,459,300 Yanzhou Coal Mining Co. Ltd., H CHN HKD 120,890, ,061,448 Inner Mongolia Yitai Coal Co. Ltd., B CHN USD 106,278, ,567,000 China Petroleum and Chemical Corp., H CHN HKD 97,181, ,170,200 CNOOC Ltd. CHN HKD 97,170, ,990 SK Innovation Co. Ltd. KOR KRW 58,975, ,862,483, Real Estate Management & Development 471,352,629 Land and Houses PCL, fgn. THA THB 129,736, ,693,734 Sansiri PCL, fgn. THA THB 10,893, ,709,266 Peninsula Land Ltd. IND INR 10,792, ,422, Unaudited Semi-Annual Report 333

336 Templeton Asian Growth Fund Schedule of Investments as of December 31, 2014 (continued) face Textiles, Apparel & Luxury Goods 3,070,426 Youngone Corp. KOR KRW 148,782, ,233 Youngone Holdings Co. Ltd. KOR KRW 71,300, ,948,328 Victory City International Holdings Ltd. HKG HKD 15,303, ,583,579 Win Hanverky Holdings Ltd. CHN HKD 14,414, ,801, Transportation Infrastructure 47,914,954 Shenzhen Chiwan Wharf Holdings Ltd., B CHN HKD 100,415, TOTAL SHARES 11,648,942, WARRANTS Real Estate Management & Development 94,270,526 Land and Houses PCL, wts., 5/05/17 THA THB 15,769, TOTAL WARRANTS 15,769, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 11,664,711, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET WARRANTS Real Estate Management & Development 52,673,434 Sansiri PCL, wts., 11/24/17 THA THB 496, TOTAL WARRANTS 496, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 496, TOTAL INVESTMENTS 11,665,208, Unaudited Semi-Annual Report

337 Templeton Asian Smaller Companies Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Auto Components 751,366 Global & Yuasa Battery Co. Ltd. KOR KRW 27,134, ,424,090 Danang Rubber JSC VND VND 3,728, ,863, Automobiles 192,129 Jiangling Motors Corp. Ltd., B CHN HKD 760, Banks 20,518,959 Federal Bank Ltd. IND INR 49,380, ,672,385 Tisco Financial Group PCL, fgn. THA THB 22,842, ,904,454 Commercial Bank of Ceylon PLC - voting shares LKA LKR 15,515, ,092,400 Bank Danamon Indonesia Tbk PT IDN IDR 10,629, ,255 ING Vysya Bank Ltd. IND INR 7,293, ,598,000 United Bank Ltd. PAK PKR 2,770, ,918,300 Bank Permata Tbk PT IDN IDR 2,055, ,488, Beverages 782,652 Hite Jinro Co. Ltd. KOR KRW 16,636, ,168,800 Pepsi-Cola Products Philippines Inc. PHL PHP 8,366, ,003, Biotechnology 79,744 Medy-tox Inc. KOR KRW 23,330, ,181,875 Biocon Ltd. IND INR 14,729, ,788 Cell Biotech Co. Ltd. KOR KRW 3,324, ,384, Capital s 410,885 Tata Investment Corp. Ltd. IND INR 3,710, Chemicals 9,490,449 Tata Chemicals Ltd. IND INR 65,575, Construction Materials 1,038,881 JK Cement Ltd. IND INR 10,527, ,313,957 Huaxin Cement Co. Ltd., B CHN USD 2,853, ,600 HA TIEN 1 Cement JSC VND VND 445, ,825, Consumer Finance 599,300 Sundaram Finance Ltd. IND INR 12,317, Containers & Packaging 10,500,546 Amvig Holdings Ltd. CHN HKD 4,536, Diversified Financial Services 3,967,600 Bajaj Holdings and Investment Ltd. IND INR 88,362, Electronic Equipment, Instruments & Components 51,480,600 Ju Teng International Holdings Ltd. CHN HKD 25,494, ,411,000 Flytech Technology Co. Ltd. TWN TWD 15,260, ,416,130 Simplo Technology Co. Ltd. TWN TWD 12,023, ,162,400 Delta Electronics (Thailand) PCL, fgn. THA THB 8,924, ,241,000 Digital China Holdings Ltd. CHN HKD 5,795, ,477,667 Redington India Ltd. IND INR 5,396, ,894, Energy Equipment & Services 89,315,800 Honghua Group Ltd. CHN HKD 11,403, Food & Staples Retailing 2,348,000 Beijing Jingkelong Co. Ltd., H CHN HKD 598, Food Products 26,270,396 Uni-President China Holdings Ltd. CHN HKD 24,325, ,486,800 Biostime International Holdings Ltd. CHN HKD 21,639, ,618 Binggrae Co. Ltd. KOR KRW 13,829, ,794, Health Care Equipment & Supplies 1,283,200 St. Shine Optical Co. Ltd. TWN TWD 21,163, ,060 Vieworks Co. Ltd. KOR KRW 19,946, ,239,800 Pacific Hospital Supply Co. Ltd. TWN TWD 13,800, ,300 Mindray Medical International Ltd., ADR CHN USD 9,089, ,999, Unaudited Semi-Annual Report 335

338 Templeton Asian Smaller Companies Fund Schedule of Investments as of December 31, 2014 (continued) face Health Care Providers & Services 7,346,000 Cordlife Group Ltd. SGP SGD 4,935, Household Durables 1,102,000 Yorkey Optical International Cayman Ltd. CHN HKD 123, Household Products 8,760,080 DSG International Thailand PCL, fgn. THA THB 2,064, Industrial Conglomerates 77,337,300 Chongqing Machinery and Electric Co. Ltd., H CHN HKD 11,968, ,730,000 Hemas Holdings PLC LKA LKR 7,209, ,177, Insurance 630,094,208 Panin Financial Tbk PT IDN IDR 15,211, Inter & Catalog Retail 203,094 GS Home Shopping Inc. KOR KRW 41,221, IT Services 29,067,000 Travelsky Technology Ltd., H CHN HKD 31,413, Leisure Products 1,679,700 Merida Industry Co. Ltd. TWN TWD 11,383, Machinery 6,878,000 Shin Zu Shing Co. Ltd. TWN TWD 15,646, ,086,000 Shanghai Prime Machinery Co. Ltd., H CHN HKD 1,745, ,391, Media 2,250,254 KT Skylife Co. Ltd. KOR KRW 37,752, ,769,690 Daekyo Co. Ltd. KOR KRW 17,827, ,893,500 Media Prima Bhd. MYS MYR 6,993, ,042,000 Hong Kong Economic Times Holdings Ltd. HKG HKD 2,484, ,057, Metals & Mining 918,991 Jordan Phosphate Mines JOR JOD 8,476, ,999 MOIL Ltd. IND INR 1,114, ,591, Oil, Gas & Consumable Fuels 470,697 Great Eastern Shipping Co. Ltd. IND INR 2,702, Personal Products 745,374 Neopharm Co. Ltd. KOR KRW 9,779, Pharmaceuticals 1,266,662 Bukwang Pharmaceutical Co. Ltd. KOR KRW 20,613, ,865,400 TTY Biopharm Co. Ltd. TWN TWD 8,548, ,160 Dr. Reddy s Laboratories Ltd. IND INR 523, ,685, Road & Rail 39,938,000 Express Transindo Utama Tbk PT IDN IDR 3,772, Semiconductors & Semiconductor Equipment 750,861 Silicon Works Co. Ltd. KOR KRW 17,162, ,161,000 Novatek Microelectronics Corp. Ltd. TWN TWD 6,529, ,816 Anapass Inc. KOR KRW 3,594, ,286, Specialty Retail 10,430,300 Luk Fook Holdings (International) Ltd. HKG HKD 39,211, ,209,800 Sa Sa International Holdings Ltd. HKG HKD 19,791, ,719,700 OSIM International Ltd. SGP SGD 10,043, ,582,200 Giordano International Ltd. HKG HKD 7,377, ,105,680 Bonjour Holdings Ltd. HKG HKD 6,150, ,574, Textiles, Apparel & Luxury Goods 1,721,128 LF Corp. KOR KRW 47,050, ,414 Fila Korea Ltd. KOR KRW 44,896, ,106,713 Vardhman Textiles Ltd. IND INR 15,251, ,058 Youngone Holdings Co. Ltd. KOR KRW 10,408, ,128,000 Win Hanverky Holdings Ltd. CHN HKD 129, ,736, Unaudited Semi-Annual Report

339 Templeton Asian Smaller Companies Fund Schedule of Investments as of December 31, 2014 (continued) face Tobacco 40,318,900 PT Wismilak Inti Makmur Tbk IDN IDR 2,034, Companies & Distributors 28,005,900 Hexindo Adiperkasa Tbk PT IDN IDR 7,925, Transportation Infrastructure 25,528,664 COSCO Pacific Ltd. CHN HKD 36,347, ,000 Sichuan Expressway Co. Ltd., H CHN HKD 320, ,667, TOTAL SHARES 1,143,259, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,143,259, TOTAL INVESTMENTS 1,143,259, Unaudited Semi-Annual Report 337

340 Templeton BRIC Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles 8,484,000 Dongfeng Motor Group Co. Ltd., H CHN HKD 11,991, ,615,000 BAIC Motor Corp. Ltd., H, Reg S CHN HKD 4,172, ,164, Banks 14,402,140 Itausa Investimentos Itau SA, pfd. BRA BRL 50,888, ,354,653 Banco Bradesco SA, ADR, pfd. BRA USD 44,851, ,674,000 China Construction Bank Corp., H CHN HKD 42,317, ,802,000 Industrial and Commercial Bank of China Ltd., H CHN HKD 42,192, ,435,884 Itau Unibanco Holding SA, ADR BRA USD 31,690, ,308,000 Bank of China Ltd., H CHN HKD 20,462, ,652,400 ICICI Bank Ltd. IND INR 9,256, ,660, Beverages 5,257,061 Ambev SA BRA BRL 32,343, Biotechnology 1,044,547 Biocon Ltd. IND INR 7,051, Commercial Services & Supplies 54,898,000 Integrated Waste Solutions Group Holdings Ltd. CHN HKD 2,230, Construction Materials 220,900 Grasim Industries Ltd. IND INR 11,862, Containers & Packaging 11,738,800 CPMC Holdings Ltd. CHN HKD 6,449, Diversified Consumer Services 53,863,800 Perfect Shape PRC Holdings Ltd. CHN HKD 13,441, Diversified Financial Services 1,071,749 Bajaj Holdings and Investment Ltd. IND INR 23,868, Food & Staples Retailing 17,286,600 Lianhua Supermarket Holdings Co. Ltd., H CHN HKD 8,716, Health Care Equipment & Supplies 315,500 Mindray Medical International Ltd., ADR CHN USD 8,329, Independent Power and Renewable Electricity Producers 1,678,700 AES Tiete SA BRA BRL 9,696, ,948,000 Huaneng Renewables Corp. Ltd., H CHN HKD 2,896, ,592, Inter & Catalog Retail 328,077 JD.com Inc., ADR CHN USD 7,591, Inter Software & Services 3,387,710 Tencent Holdings Ltd. CHN HKD 49,151, ,200 Baidu Inc., ADR CHN USD 12,811, ,725 Yandex NV, A RUS USD 10,519, ,701 Mail.ru Group Ltd., GDR, Reg S RUS USD 3,972, ,455, IT Services 28,140,100 Travelsky Technology Ltd., H CHN HKD 30,412, ,396 Infosys Ltd. IND INR 29,897, ,171,953 Mindtree Ltd. IND INR 23,857, ,970 Tata Consultancy Services Ltd. IND INR 14,000, ,788 Luxoft Holding Inc. USA USD 5,960, ,127, Marine 4,010,500 Sinotrans Shipping Ltd. CHN HKD 962, Media 1,465,794 CTC Media Inc. RUS USD 7,138, Metals & Mining 3,116,950 Vale SA, ADR, pfd., A BRA USD 22,629, ,825,657 Maharashtra Seamless Ltd. IND INR 18,522, ,153,200 Bradespar SA, pfd. BRA BRL 6,205, ,356, Oil, Gas & Consumable Fuels 35,685,800 China Petroleum and Chemical Corp., H CHN HKD 28,764, ,383,000 China Shenhua Energy Co. Ltd., H CHN HKD 21,804, ,509,400 Reliance Industries Ltd. IND INR 21,338, Unaudited Semi-Annual Report

341 Templeton BRIC Fund Schedule of Investments as of December 31, 2014 (continued) face Oil, Gas & Consumable Fuels (continued) 2,602,200 Petroleo Brasileiro SA, ADR, pfd. BRA USD 19,724, ,928,000 PetroChina Co. Ltd., H CHN HKD 16,518, ,382,258 Inner Mongolia Yitai Coal Co. Ltd., B CHN USD 9,158, ,000 LUKOIL Holdings, ADR RUS USD 5,850, ,159, Personal Products 1,509,081 Hypermarcas SA BRA BRL 9,454, Pharmaceuticals 312,595 Dr. Reddy s Laboratories Ltd. IND INR 16,098, Real Estate Management & Development 68,149,600 Beijing Capital Land Ltd., H CHN HKD 25,839, ,804,463 Soho China Ltd. CHN HKD 10,481, ,321, Specialty Retail 13,790,323 Luk Fook Holdings (International) Ltd. HKG HKD 51,842, ,981,084 Giordano International Ltd. HKG HKD 15,119, ,900 Cia Hering BRA BRL 4,738, ,578,700 I.T Ltd. HKG HKD 2,767, ,468, Transportation Infrastructure 1,592,000 COSCO Pacific Ltd. CHN HKD 2,266, Wireless Telecommunication Services 3,381,641 China Mobile Ltd. CHN HKD 39,555, TOTAL SHARES 929,669, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 929,669, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Oil, Gas & Consumable Fuels 445,000 LUKOIL Holdings, ADR RUS USD 17,711, ,422,251 Gazprom OAO, ADR RUS USD 15,913, ,624, TOTAL SHARES 33,624, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 33,624, TOTAL INVESTMENTS 963,293, Unaudited Semi-Annual Report 339

342 Templeton China Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles 23,568,000 Dongfeng Motor Group Co. Ltd., H CHN HKD 33,312, ,026,850 Jiangling Motors Corp. Ltd., B CHN HKD 23,846, ,408,579 Chongqing Changan Automobile Co. Ltd., B CHN HKD 9,983, ,810 Great Wall Motor Co. Ltd., H CHN HKD 4,119, ,262, Banks 65,507,851 China Construction Bank Corp., H CHN HKD 53,646, ,601,500 BOC Hong Kong (Holdings) Ltd. HKG HKD 18,710, ,644,375 Industrial and Commercial Bank of China Ltd., H CHN HKD 14,339, ,776,800 Bank of China Ltd., H CHN HKD 7,200, ,897, Beverages 3,479,242 Yantai Changyu Pioneer Wine Co. Ltd., B CHN HKD 11,486, Commercial Services & Supplies 25,895,844 Integrated Waste Solutions Group Holdings Ltd. CHN HKD 1,052, Construction Materials 8,022,500 Anhui Conch Cement Co. Ltd., H CHN HKD 30,107, ,744,000 China National Building Material Co. Ltd., H CHN HKD 24,029, ,963,647 BBMG Corp., H CHN HKD 10,883, ,261,700 Asia Cement China Holdings Corp. CHN HKD 10,668, ,120,619 Huaxin Cement Co. Ltd., B CHN USD 8,779, ,430,000 Xinyi Glass Holdings Ltd. CHN HKD 3,746, ,216, Distributors 24,668,760 Dah Chong Hong Holdings Ltd. CHN HKD 13,330, Diversified Telecommunication Services 4,050,000 China Telecom Corp. Ltd., H CHN HKD 2,350, Electric Utilities 1,703,000 Cheung Kong Infrastructure Holdings Ltd. HKG HKD 12,639, Electrical Equipment 6,519,292 Dongfang Electric Corp. Ltd., H CHN HKD 11,989, Electronic Equipment, Instruments & Components 2,314,453 Simplo Technology Co. Ltd. TWN TWD 11,517, ,063,179 Synnex Technology International Corp. TWN TWD 5,918, ,435, Food & Staples Retailing 8,101,772 Dairy Farm International Holdings Ltd. HKG USD 72,915, ,394,079 President Chain Store Corp. TWN TWD 26,218, ,754,760 China Resources Enterprise Ltd. CHN HKD 5,783, ,918, Food Products 18,423,240 Uni-President China Holdings Ltd. CHN HKD 17,059, ,000 Uni-President Enterprises Corp. TWN TWD 921, ,370,000 China Foods Ltd. CHN HKD 469, ,451, Gas Utilities 3,094,200 ENN Energy Holdings Ltd. CHN HKD 17,558, Health Care Providers & Services 5,798,000 Shanghai Pharmaceuticals Holding Co. Ltd., H CHN HKD 13,085, Hotels, Restaurants & Leisure 1,903,000 SJM Holdings Ltd. HKG HKD 3,018, Industrial Conglomerates 1,382,500 Hopewell Holdings Ltd. HKG HKD 5,054, Insurance 2,162,600 AIA Group Ltd. HKG HKD 11,992, Inter Software & Services 960,500 Tencent Holdings Ltd. CHN HKD 13,935, ,371 Baidu Inc., ADR CHN USD 12,166, ,300 Sohu.com Inc. CHN USD 2,621, ,724, Unaudited Semi-Annual Report

343 Templeton China Fund Schedule of Investments as of December 31, 2014 (continued) face IT Services 15,449,291 Travelsky Technology Ltd., H CHN HKD 16,696, Machinery 8,015,040 Zoomlion Heavy Industry Science and Technology Development Co. Ltd., H CHN HKD 6,098, Marine 10,762,000 China Shipping Development Co. Ltd., H CHN HKD 7,369, ,108,000 China Shipping Container Lines Co. Ltd., H CHN HKD 4,754, ,896,762 Sinotrans Shipping Ltd. CHN HKD 4,293, ,417, Media 403,600 Poly Culture Group Corp. Ltd., H, CHN HKD 1,244, Metals & Mining 2,936,000 China Vanadium Titano-Magite Mining Co. Ltd. CHN HKD 280, Oil, Gas & Consumable Fuels 64,637,600 China Petroleum and Chemical Corp., H CHN HKD 52,100, ,198,000 CNOOC Ltd. CHN HKD 25,848, ,202,000 PetroChina Co. Ltd., H CHN HKD 14,608, ,500 China Shenhua Energy Co. Ltd., H CHN HKD 2,116, ,673, Paper & Forest Products 53,936,000 Nine Dragons Paper Holdings Ltd. CHN HKD 47,300, Pharmaceuticals 1,068,000 Tong Ren Tang Technologies Co. Ltd., H CHN HKD 1,380, Real Estate Management & Development 332,338 China Vanke Co. Ltd., H CHN HKD 739, ,500 Soho China Ltd. CHN HKD 575, ,315, Semiconductors & Semiconductor Equipment 14,420,214 Taiwan Semiconductor Manufacturing Co. Ltd. TWN TWD 64,239, ,444,000 GCL-Poly Energy Holdings Ltd. CHN HKD 5,005, ,862 MediaTek Inc. TWN TWD 990, ,235, Technology Hardware, Storage & Peripherals 356,921 Advantech Co. Ltd. TWN TWD 2,644, Textiles, Apparel & Luxury Goods 17,539,406 Anta Sports Products Ltd. CHN HKD 30,989, Transportation Infrastructure 11,471,254 COSCO Pacific Ltd. CHN HKD 16,332, ,610,000 Sichuan Expressway Co. Ltd., H CHN HKD 7,090, ,423, Wireless Telecommunication Services 2,679,500 China Mobile Ltd. CHN HKD 31,342, TOTAL SHARES 870,504, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 870,504, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET INVESTMENTS FUNDS Diversified Financial Services 33,597 Templeton China A Shares Fund, Class X (acc) HKD CHN HKD 56,309, ,309, TOTAL INVESTMENTS FUNDS 56,309, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 56,309, TOTAL INVESTMENTS 926,814, Unaudited Semi-Annual Report 341

344 Templeton Constrained Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Government and Municipal Bonds 250,000 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 417, ,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 227, ,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 224, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 187, ,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 129, ,000 Government of Portugal, Reg S, 3.875%, 02/15/30 PRT EUR 76, ,300,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 67, ,930,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 54, ,000 Government of Portugal, Reg S, 5.125%, 10/15/24 PRT USD 52, ,125 Government of Russia, senior bond, Reg S, 7.50%, 03/31/30 RUS USD 51, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 42, ,500,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 41, ,860,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 41, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 37, ,790,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 36, ,120,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 34, ,800 Government of Mexico, 6.25%, 06/16/16 MEX MXN 33, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 28, Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 19, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 18, ,000,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 16, ,000,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 15, ,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 11, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 9, Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 6, ,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 4, ,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 4, Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 3, ,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 3, ,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 2, ,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 1, ,200 Government of Portugal, senior note, Reg S, 5.65%, 02/15/24 PRT EUR 1, ,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 1, Government of Portugal, senior bond, Reg S, 4.95%, 10/25/23 PRT EUR ,907, Securities Maturing Within One Year 1,030,000 Government of Canada, 1.00%, 05/01/15 CAN CAD 887, ,000 United Kingdom Treasury Note, Reg S, 2.75%, 01/22/15 GBR GBP 874, ,100,000 Government of New Zealand, senior bond, Reg S, 6.00%, 04/15/15 NZL NZD 863, ,755,000 Government of Norway, 5.00%, 05/15/15 NOR NOK 781, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 587, ,700,000 Government of Poland, Strip, 07/25/15 POL PLN 475, ,000 France Treasury Bill, 0.00%, 04/30/15 FRA EUR 453, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/30/15 SGP SGD 373, ,120,000 Government of Sweden, 4.50%, 08/12/15 SWE SEK 279, ,800 Government of Mexico, 8.00%, 12/17/15 MEX MXN 218, ,000 Government of Canada, 1.00%, 02/01/15 CAN CAD 185, ,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 145, ,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 122, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 92, ,000 Bank of Negara Moary Note, 0.00%, 08/04/15 MYS MYR 92, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 02/17/15 SGP SGD 47, ,400 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 39, ,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 28, ,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 25, ,700 Government of Mexico, 6.00%, 06/18/15 MEX MXN 25, ,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 19, ,030 Mexico Treasury Bill, 0.00%, 03/19/15 MEX MXN 18, ,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 17, ,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 17, ,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 17, ,000 Bank of Negara Moary Note, 0.00%, 06/04/15 MYS MYR 11, ,380 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 11, Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 10, ,850 Mexico Treasury Bill, 0.00%, 12/10/15 MEX MXN 9, ,000 Bank of Negara Moary Note, 0.00%, 02/10/15 MYS MYR 8, ,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 8, ,370 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 6, ,060 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 6, ,000 Sweden Treasury Bill, 0.00%, 03/18/15 SWE SEK 6, ,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 5, ,930 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 3, ,250 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 2, Unaudited Semi-Annual Report

345 Templeton Constrained Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 3,910 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 2, ,720 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 2, ,784, TOTAL BONDS 8,692, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 8,692, TOTAL INVESTMENTS 8,692, Unaudited Semi-Annual Report 343

346 Templeton Eastern Europe Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Banks 2,737,018 Turkiye Halk Bankasi AS TUR TRY 13,472, ,993,000 Sberbank of Russia RUS RUB 10,155, ,800,000 Turkiye Garanti Bankasi AS TUR TRY 9,340, ,550 TBC Bank JSC, GDR, Reg S GE USD 4,035, ,736 Bank of Georgia Holdings PLC GE GBP 3,121, ,126, Electronic Equipment, Instruments & Component 1,840,688 ABC Data SA POL PLN 1,461, Food & Staples Retailing 1,945,823 DIXY Group OJSC RUS RUB 9,964, ,011 Magnit PJSC RUS RUB 5,664, ,428,485 O Key Group SA, GDR, Reg S RUS USD 5,182, ,517 Jeronimo Martins SGPS SA POL EUR 4,746, ,543 X5 Retail Group NV, GDR, Reg S RUS USD 3,998, ,700 Bizim Toptan Satis Magazalari AS TUR TRY 1,330, ,887, Food Products 2,405,893 Pinar Sut Mamulleri Sanayii AS TUR TRY 18,190, ,588 Wawel SA POL PLN 5,910, ,885 MHP SA, GDR, Reg S UKR USD 2,014, ,114, Health Care Technology 852,060 Synektik SA POL PLN 4,077, Hotels, Restaurants & Leisure 180,222 DO & CO Restaurants & Catering AG TUR TRY 11,424, ,625,142 Fortuna Entertainment Group NV TUR CZK 11,411, ,388,884 Olympic Entertainment Group A.S. EST EUR 9,161, ,996, Inter Software & Services 724,936 Yandex NV, A RUS USD 10,760, ,501 Mail.ru Group Ltd., GDR, Reg S RUS USD 9,907, ,668, IT Services 266,015 QIWI PLC, ADR RUS USD 4,438, ,767 SMT SA POL PLN 2,837, ,276, Machinery 467,972 NEWAG SA POL PLN 2,612, ,426 Kopex SA POL PLN 1,991, ,604, Oil, Gas & Consumable Fuels 1,262,080 Societatea Nationala de Gaze Naturale ROMGAZ SA ROM RON 9,951, ,362,976 Dragon Oil PLC TKM GBP 9,437, ,630,385 Nostrum Oil & Gas LP KAZ GBP 8,820, ,287,200 OMV Petrom SA ROM RON 6,576, ,786, Professional Services 686,025 Work Service SA POL PLN 2,879, Road & Rail 1,461,033 Globaltrans Investment PLC, GDR, Reg S RUS USD 6,097, ,153 PKP Cargo SA POL PLN 1,698, ,796, Software 1,121,367 Asseco Poland SA POL PLN 13,351, Specialty Retail 1,884,776 Silvano Fashion Group AS, A EST EUR 2,224, ,990 M Video OJSC RUS RUB 411, ,635, Unaudited Semi-Annual Report

347 Templeton Eastern Europe Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Textiles, Apparel & Luxury Goods 568,039 Pegas Nonwovens SA CZE CZK 13,120, ,804 CCC SA POL PLN 11,868, ,988, TOTAL SHARES 253,650, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 253,650, TOTAL INVESTMENTS 253,650, Unaudited Semi-Annual Report 345

348 Templeton Emerging s Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Automobiles 2,614,614 Tata Motors Ltd. IND INR 20,554, ,544,600 Astra International Tbk PT IDN IDR 15,314, ,056,745 Brilliance China Automotive Holdings Ltd. CHN HKD 4,888, ,730,000 BAIC Motor Corp. Ltd., H, Reg S CHN HKD 3,151, ,908, Banks 5,605,100 Siam Commercial Bank PCL, fgn. THA THB 31,025, ,138,160 Itau Unibanco Holding SA, ADR BRA USD 27,817, ,262,800 China Construction Bank Corp., H CHN HKD 23,145, ,697,900 Industrial and Commercial Bank of China Ltd., H CHN HKD 9,998, ,259,500 Kasikornbank PCL, fgn. THA THB 8,772, ,244,000 Akbank TAS TUR TRY 8,327, ,872,500 United Bank Ltd. PAK PKR 4,979, ,349,256 Kenya Commercial Bank Ltd. KEN KES 3,961, ,884,500 Bank Danamon Indonesia Tbk PT IDN IDR 2,880, ,336,928 National Bank of Greece SA GRC EUR 2,377, ,848,164 Equity Bank Ltd. KEN KES 1,020, ,307, Beverages 261,580 Anheuser-Busch InBev NV BEL EUR 29,707, ,458,398 Thai Beverage PCL, fgn. THA SGD 15,342, ,653,373 Embotelladora Andina SA, pfd., A CHL CLP 6,435, ,486, Biotechnology 1,125,577 Biocon Ltd. IND INR 7,598, Chemicals 207,047 Deutsche Bank AG/London (CRTP Saudi Basic Industries Corp., 144A) SAU USD 4,634, Construction & Engineering 179,490 Hyundai Development Co. KOR KRW 6,350, Construction Materials 6,097,500 Semen Indonesia (Persero) Tbk PT IDN IDR 7,975, Diversified Financial Services 1,773,234 Remgro Ltd. ZAF ZAR 38,945, ,324 Ayala Corp. PHL PHP 8,125, ,070, Food & Staples Retailing 411,683 Dairy Farm International Holdings Ltd. HKG USD 3,705, ,287 O Key Group SA, GDR, Reg S RUS USD 5, ,710, Food Products 640,765 Unilever PLC GBR GBP 26,247, ,837 M Dias Branco SA BRA BRL 6,979, ,227, Hotels, Restaurants & Leisure 27,758,729 Bloomberry Resorts Corp. PHL PHP 7,685, ,781,360 Melco Crown Philippines Resorts Corp. PHL PHP 2,056, ,400 MGM China Holdings Ltd. HKG HKD 1,715, ,457, Industrial Conglomerates 353,602 Industries Qatar QSC QAT QAR 16,312, Insurance 3,103,000 China Life Insurance Co. Ltd., H CHN HKD 12,125, Inter Software & Services 508,000 Tencent Holdings Ltd. CHN HKD 7,370, ,487 NetEase Inc., ADR CHN USD 6,095, ,466, IT Services 856,390 Tata Consultancy Services Ltd. IND INR 34,756, ,064 Infosys Ltd. IND INR 8,232, ,988, Marine 15,508,277 China Shipping Development Co. Ltd., H CHN HKD 10,620, Unaudited Semi-Annual Report

349 Templeton Emerging s Fund Schedule of Investments as of December 31, 2014 (continued) face Media 250,754 Naspers Ltd., N ZAF ZAR 32,852, ,966 Grupo Clarin SA, B, GDR, Reg S ARG USD 1,386, ,239, Metals & Mining 1,377,350 Vale SA, ADR, pfd., A BRA USD 9,999, ,824,600 Aluminum Corp. of China Ltd., H CHN HKD 3,602, ,402 Kumba Iron Ore Ltd. ZAF ZAR 1,253, ,151 Compania de Minas Buenaventura SA, ADR PER USD 1,244, ,099, Oil, Gas & Consumable Fuels 16,472,800 PetroChina Co. Ltd., H CHN HKD 18,227, ,200,000 China Petroleum and Chemical Corp., H CHN HKD 12,251, ,167,400 PTT PCL, fgn. THA THB 11,503, ,185,370 Petroleo Brasileiro SA, ADR, pfd. BRA USD 8,985, ,367,900 Yanzhou Coal Mining Co. Ltd., H CHN HKD 8,798, ,609 SK Innovation Co. Ltd. KOR KRW 7,750, ,287,000 PTT Exploration and Production PCL, fgn. THA THB 4,383, ,880 Tupras-Turkiye Petrol Rafinerileri AS TUR TRY 4,262, ,900 Reliance Industries Ltd. IND INR 4,027, ,371 OMV AG AUT EUR 1,128, ,319, Personal Products 1,139,865 Avon Products Inc. USA USD 10,703, Pharmaceuticals 133,750 Dr. Reddy s Laboratories Ltd. IND INR 6,887, Real Estate Management & Development 23,508,000 Land and Houses PCL, NVDR THA THB 6,470, ,916,001 Emaar Properties PJSC ARE AED 3,787, ,767,400 Land and Houses PCL, fgn. THA THB 3,238, ,976,189 Quality Houses PCL, fgn. THA THB 1,110, ,606, Semiconductors & Semiconductor Equipment 5,224,952 Taiwan Semiconductor Manufacturing Co. Ltd. TWN TWD 23,276, Specialty Retail 288,021 Truworths International Ltd. ZAF ZAR 1,924, ,740 Giordano International Ltd. HKG HKD 262, ,187, Technology Hardware, Storage & Peripherals 7,204 Samsung Electronics Co. Ltd. KOR KRW 8,740, Textiles, Apparel & Luxury Goods 44,333 Compagnie Financiere Richemont SA CHE CHF 3,959, Tobacco 752,700 Souza Cruz SA BRA BRL 5,472, Wireless Telecommunication Services 771,257 MTN Group Ltd. ZAF ZAR 14,766, ,500 China Mobile Ltd. CHN HKD 10,509, ,419 HSBC Bank PLC (CRTP Etihad Etisalat Co., 144A) SAU USD 2,372, ,436 Deutsche Bank AG/London (CRTP Etihad Etisalat Co., 144A) SAU USD 1,607, ,255, TOTAL SHARES 673,987, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 673,987, TOTAL INVESTMENTS 673,987, Unaudited Semi-Annual Report 347

350 Templeton Emerging s Balanced Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Discretionary 1,810,000 Brilliance China Automotive Holdings Ltd. CHN HKD 2,894, ,308 Naspers Ltd., N ZAF ZAR 2,005, ,200 Tata Motors Ltd. IND INR 1,102, ,602,100 Astra International Tbk PT IDN IDR 960, ,703,500 Bloomberry Resorts Corp. PHL PHP 471, ,000 Melco Crown Philippines Resorts Corp. PHL PHP 235, ,200 MGM China Holdings Ltd. HKG HKD 104, ,100 Compagnie Financiere Richemont SA CHE CHF 98, ,550 Truworths International Ltd. ZAF ZAR 17, ,890, Consumer Staples 15,805 Anheuser-Busch InBev NV BEL EUR 1,794, ,878 Unilever PLC GBR GBP 1,633, ,041,500 Univanich Palm Oil PCL, fgn. THA THB 658, ,740 Avon Products Inc. USA USD 626, ,500 Dairy Farm International Holdings Ltd. HKG USD 202, ,438 O Key Group SA, GDR, Reg S RUS USD 6, ,922, Energy 857,000 CNOOC Ltd. CHN HKD 1,153, ,000 PetroChina Co. Ltd., H CHN HKD 963, ,000 China Petroleum and Chemical Corp., H CHN HKD 739, ,500 PTT PCL, fgn. THA THB 645, ,400 Petroleo Brasileiro SA, ADR, pfd. BRA USD 548, ,200 Yanzhou Coal Mining Co. Ltd., H CHN HKD 544, ,844 SK Innovation Co. Ltd. KOR KRW 454, ,300 Reliance Industries Ltd. IND INR 244, ,040 Tupras-Turkiye Petrol Rafinerileri AS TUR TRY 237, ,600 PTT Exploration and Production PCL, fgn. THA THB 230, ,490 OMV AG AUT EUR 66, ,830, Financials 2,373,500 United Bank Ltd. PAK PKR 4,114, ,800 Remgro Ltd. ZAF ZAR 2,367, ,500 Siam Commercial Bank PCL, fgn. THA THB 1,696, ,270 Itau Unibanco Holding SA, ADR BRA USD 1,551, ,288,900 Land and Houses PCL, fgn. THA THB 1,455, ,328,719 Bank Danamon Indonesia Tbk PT IDN IDR 1,216, ,079,500 China Construction Bank Corp., H CHN HKD 884, ,000 China Life Insurance Co. Ltd., H CHN HKD 750, ,000 Kasikornbank PCL, fgn. THA THB 543, ,000 Akbank TAS TUR TRY 508, ,140 Ayala Corp. PHL PHP 498, ,000 Industrial and Commercial Bank of China Ltd., H CHN HKD 416, ,038,200 Land and Houses PCL, NVDR THA THB 285, ,503 Emaar Properties PJSC ARE AED 230, ,195 National Bank of Greece SA GRC EUR 144, ,700 Quality Houses PCL, fgn. THA THB 60, ,723, Health Care 68,144 Biocon Ltd. IND INR 460, ,630 Dr. Reddy s Laboratories Ltd. IND INR 392, , Industrials 1,088,600 China Shipping Development Co. Ltd., H CHN HKD 745, ,764 Industries Qatar QSC QAT QAR 450, ,933 Hyundai Development Co. KOR KRW 386, ,582, Information Technology 314,500 Taiwan Semiconductor Manufacturing Co. Ltd. TWN TWD 1,401, ,840 Infosys Ltd., ADR IND USD 875, ,400 Infosys Ltd. IND INR 513, Samsung Electronics Co. Ltd. KOR KRW 509, ,500 Tencent Holdings Ltd. CHN HKD 457, ,690 NetEase Inc., ADR CHN USD 365, ,122, Unaudited Semi-Annual Report

351 Templeton Emerging s Balanced Fund Schedule of Investments as of December 31, 2014 (continued) face Materials 78,550 Vale SA, ADR, pfd., A BRA USD 570, ,500 Semen Indonesia (Persero) Tbk PT IDN IDR 499, ,952 Arab Potash Co. PLC JOR JOD 327, ,909 Deutsche Bank AG/London (CRTP Saudi Basic Industries Corp., 144A) SAU USD 288, ,981 Sociedad Quimica Y Minera de Chile SA Soquimich, ADR CHL USD 238, ,600 Aluminum Corp. of China Ltd., H CHN HKD 224, ,580 Compania de Minas Buenaventura SA, ADR PER USD 148, ,745 Kumba Iron Ore Ltd. ZAF ZAR 77, ,374, Telecommunication Services 47,047 MTN Group Ltd. ZAF ZAR 900, ,000 China Mobile Ltd. CHN HKD 655, ,500 HSBC Bank PLC (CRTP Etihad Etisalat Co., 144A) SAU USD 135, ,420 Deutsche Bank AG/London (CRTP Etihad Etisalat Co., 144A) SAU USD 75, ,766, TOTAL SHARES 46,066, WARRANTS Financials 925,360 Land and Houses PCL, wts., 5/05/17 THA THB 154, TOTAL WARRANTS 154, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 46,221, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 570,000 Tanzania Government International Bond, Reg S, FRN, 6.329%, 03/09/20 TZA USD 597, Corporate Bonds 650,000 SSB #1 PLC, (OJSC State Savings Bank of Ukraine), loan participation, senior note, Reg S, 8.875%, 03/20/18 UKR USD 370, ,000 Play Topco SA, senior note, 144A, PIK, 7.75%, 02/28/20 POL EUR 258, ,000 Access Bank PLC, sub. note, Reg S, 9.25% to 06/24/19, FRN thereafter, 06/24/21 NGA USD 252, ,000 Alfa Bond Issuance PLC, (Alfa Bank OJSC), loan participation, senior note, Reg S, 7.75%, 04/08/21 RUS USD 203, ,000 Turkiye Is Bankasi, Reg S, 6.00%, 10/24/22 TUR USD 201, ,000 Metinvest BV, Reg S, 8.75%, 02/14/18 UKR USD 128, ,000 Cable Communications Systems NV, senior secured note, Reg S, 7.50%, 11/01/20 ROM EUR 123, ,000 Edcon Pty. Ltd., senior secured note, first lien, Reg S, 9.50%, 03/01/18 ZAF USD 120, ,000 Edcon Pty. Ltd., senior secured note, first lien, Reg S, 9.50%, 03/01/18 ZAF EUR 97, ,000 Edcon Holdings Pty. Ltd., senior secured note, Reg S, %, 06/30/19 ZAF EUR 45, ,000 Corporacion GEO SAB de CV, senior note, Reg S, 8.875%, 03/27/22 * MEX USD 12, ,813, Government and Municipal Bonds 1,220,000 Government of Ecuador, senior note, Reg S, 7.95%, 06/20/24 ECU USD 1,049, ,000,000 Government of Nigeria, 15.10%, 04/27/17 NGA NGN 920, ,000,000 Serbia Treasury Note, 10.00%, 02/21/16 SER RSD 809, ,677,000 Government of Ghana, 23.00%, 08/21/17 GHA GHS 544, ,000 Government of Hungary, senior note, 6.375%, 03/29/21 HUN USD 537, ,000 Financing of Infrastructure Projects State Enterprise, senior note, Reg S, 9.00%, 12/07/17 UKR USD 512, ,277,780 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 508, ,300,000 Government of Sri Lanka, B, 8.00%, 06/01/16 LKA LKR 492, ,350,000 Uruguay Notas del Tesoro, 9.50%, 01/27/16 URY UYU 466, ,000 Government of Sri Lanka, senior note, Reg S, 5.875%, 07/25/22 LKA USD 437, ,500,000 Government of Nigeria, 13.05%, 08/16/16 NGA NGN 425, ,950,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 419, ,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 411, ,220,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 367, ,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 326, ,000 Government of Ghana, Reg S, 7.875%, 08/07/23 GHA USD 316, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 264, ,000 Government of Mongolia, Reg S, 5.125%, 12/05/22 MNG USD 262, ,000 Government of Serbia, senior note, Reg S, 4.875%, 02/25/20 SER USD 260, ,000 Government of Montenegro, Reg S, 5.375%, 05/20/19 MNE EUR 254, Nota Do Tesouro Nacional, %, 01/01/17 BRA BRL 250, ,000 Government of Kenya, senior note, Reg S, 6.875%, 06/24/24 KEN USD 244, ,400,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 240, ,346,000,000 Government of Indonesia, FR34, 12.80%, 06/15/21 IDN IDR 235, ,000 Government of Sri Lanka, senior note, Reg S, 6.25%, 10/04/20 LKA USD 235, ,807,872 Uruguay Notas del Tesoro, 18, Index Linked, 2.25%, 08/23/17 URY UYU 225, Unaudited Semi-Annual Report 349

352 Templeton Emerging s Balanced Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 200,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 224, ,000 Kyiv Finance PLC, (City of Kiev), loan participation, senior note, Reg S, 9.375%, 07/11/16 UKR USD 221, ,000 Government of Zambia, senior note, Reg S, 8.50%, 04/14/24 ZMB USD 219, ,680,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 211, ,110,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 209, ,000 Eastern & Southern African Trade and Development Bank, senior note, Reg S, 6.375%, 12/06/18 SP USD 202, ,410,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 185, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 185, ,000 Government of Ghana, 23.00%, 02/13/17 GHA GHS 183, ,000,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 174, ,320,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 172, ,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 162, ,600,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 158, ,000,000 Government of Sri Lanka, A, 5.80%, 01/15/17 LKA LKR 157, Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 123, ,518,000 Uruguay Treasury Bill, Strip, 04/21/16 URY UYU 122, ,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 119, ,000,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 100, ,500,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 99, ,310,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 97, ,000 Government of Romania, senior note, Reg S, 5.25%, 06/17/16 ROM EUR 97, ,800,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 91, ,600,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 86, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 84, ,946,822 Uruguay Notas del Tesoro, 13, Index Linked, 4.00%, 05/25/25 URY UYU 78, ,600,000 Government of Sri Lanka, B, 5.80%, 07/15/17 LKA LKR 78, ,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 71, ,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 70, ,910,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 70, ,300,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 68, ,780,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 66, ,280,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 66, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 65, ,100,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 64, ,000 Government of Ghana, 25.40%, 07/31/17 GHA GHS 47, ,710,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 47, Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 45, ,960 Uruguay Notas del Tesoro, 14, Index Linked, 4.00%, 06/10/20 URY UYU 36, ,030,000 Uruguay Treasury Bill, Strip, 11/03/16 URY UYU 33, ,923 Government of Uruguay, Index Linked, 4.25%, 04/05/27 URY UYU 32, ,000 Uruguay Treasury Bill, Strip, 01/14/16 URY UYU 29, ,900,000 Serbia Treasury Note, 10.00%, 12/19/16 SER RSD 29, ,700,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 27, ,700,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 27, ,000 Uruguay Treasury Bill, Strip, 09/15/16 URY UYU 26, ,781 Government of Uruguay, senior bond, Index Linked, 4.00%, 07/10/30 URY UYU 22, ,000,000 Government of Indonesia, senior bond, FR53, 8.25%, 07/15/21 IDN IDR 20, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 18, ,000 Uruguay Treasury Bill, Strip, 07/28/16 URY UYU 18, ,400,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 17, ,100,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 16, Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 15, ,000,000 Government of Indonesia, senior note, 8.50%, 10/15/16 IDN IDR 14, ,360,000 Serbia Treasury Note, 10.00%, 03/01/16 SER RSD 13, ,230,000 Serbia Treasury Note, 10.00%, 11/08/17 SER RSD 12, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 9, ,000 Uruguay Notas del Tesoro, 11.00%, 03/21/17 URY UYU 8, ,000,000 Government of Indonesia, FR36, 11.50%, 09/15/19 IDN IDR 8, ,000 Serbia Treasury Note, 10.00%, 01/30/16 SER RSD 6, ,755 Uruguay Notas del Tesoro, 19, Index Linked, 2.50%, 09/27/22 URY UYU 6, ,000,000 Government of Indonesia, FR35, 12.90%, 06/15/22 IDN IDR 4, ,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 4, ,000,000 Government of Indonesia, FR43, 10.25%, 07/15/22 IDN IDR 4, ,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 3, ,469 Government of Uruguay, senior bond, Index Linked, 5.00%, 09/14/18 URY UYU 1, ,027, Securities Maturing Within One Year 86,270,000 Nigeria Treasury Bill, 0.00%, 08/06/15 NGA NGN 437, ,540,000 Serbia Treasury Note, 10.00%, 04/27/15 SER RSD 406, ,600,000 Serbia Treasury Note, 10.00%, 09/14/15 SER RSD 369, ,800,000 Nigeria Treasury Bill, 02/19/15 NGA NGN 299, ,100,000 Korea Moary Stabilization Bond, senior note, 2.90%, 12/02/15 KOR KRW 274, ,347,000 Uruguay Notas del Tesoro, 10.25%, 08/22/15 URY UYU 258, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 190, ,370,000 Nigeria Treasury Bill, 0.00%, 03/05/15 NGA NGN 183, Unaudited Semi-Annual Report

353 Templeton Emerging s Balanced Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 35,360,000 Nigeria Treasury Bill, 0.00%, 06/04/15 NGA NGN 182, ,000 Government of Ghana, 14.99%, 02/23/15 GHA GHS 148, ,100,000 Government of Sri Lanka, A, 8.50%, 11/01/15 LKA LKR 140, ,500,000 Uruguay Treasury Bill, Strip, 05/14/15 URY UYU 137, ,800,000 Serbia Treasury Note, 10.00%, 10/18/15 SER RSD 129, ,292,000 Uruguay Treasury Bill, 0.00%, 05/04/15 URY UYU 129, ,122,000 Uruguay Treasury Bill, Strip, 08/20/15 URY UYU 117, ,600,000 Nigeria Treasury Bill, 0.00%, 04/23/15 NGA NGN 107, ,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 102, ,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 91, ,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 87, ,930,000 Uruguay Treasury Bill, Strip, 03/26/15 URY UYU 77, ,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 71, ,000 Bank of Negara Moary Note, 0.00%, 08/04/15 MYS MYR 67, ,000 Government of Ghana, 24.00%, 05/25/15 GHA GHS 65, ,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 65, ,611,900 Uruguay Treasury Bill, Strip, 07/02/15 URY UYU 61, ,190,000 Nigeria Treasury Bill, 0.00%, 04/09/15 NGA NGN 58, ,440,000 Uruguay Notas del Tesoro, 10.50%, 03/21/15 URY UYU 58, ,400,000 Government of Sri Lanka, B, 11.00%, 09/01/15 LKA LKR 58, ,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 53, Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 51, ,100,000 Serbia Treasury Note, 10.00%, 03/01/15 SER RSD 50, ,500,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 43, ,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 39, ,600,000 Philippine Treasury Bill, 0.00%, 09/02/15 PHL PHP 35, ,000 Bank of Negara Moary Note, 0.00%, 09/22/15 MYS MYR 30, ,380,000 Nigeria Treasury Bill, 0.00%, 02/05/15 NGA NGN 23, ,000 Bank of Negara Moary Note, 0.00%, 04/07/15 MYS MYR 22, ,000 Uruguay Treasury Bill, Strip, 11/26/15 URY UYU 17, ,320,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 16, ,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 13, ,240,000 Nigeria Treasury Bill, 0.00%, 05/07/15 NGA NGN 11, ,190,000 Nigeria Treasury Bill, 0.00%, 05/21/15 NGA NGN 11, ,000 Government of Ghana, 21.00%, 10/26/15 GHA GHS 6, ,400,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 5, ,000 Uruguay Treasury Bill, 0.00%, 10/23/15 URY UYU 4, ,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 2, ,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 2, ,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 2, ,000 Bank of Negara Moary Note, 0.00%, 08/18/15 MYS MYR 2, ,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 2, ,833, TOTAL BONDS 23,271, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 23,271, TOTAL INVESTMENTS 69,493, * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, 2014 Income may be received in additional securities and/or cash Unaudited Semi-Annual Report 351

354 Templeton Emerging s Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 72,830,000 Tanzania Government International Bond, Reg S, FRN, 6.329%, 03/09/20 TZA USD 76,310, ,940,000 Government of Iraq, Reg S, 5.80%, 01/15/28 IQ USD 44,533, ,026,667 Government of Bosnia & Herzegovina, senior bond, B, Reg S, FRN, 0.938%, 12/11/21 BIH DEM 4,165, ,694,459 Peru Enhanced Pass-Through Finance Ltd., senior secured bond, A-1, Reg S, zero cpn., 05/31/18 PER USD 1,606, ,417,000 Government of Ivory Coast, Reg S, 5.75%, 12/31/32 CI USD 1,365, ,000 Government of Iraq, 144A, 5.80%, 01/15/28 IQ USD 597, ,000 Government of Bosnia & Herzegovina, FRN, 0.938%, 12/11/17 BIH DEM 459, ,037, Corporate Bonds 66,550,000 Access Bank PLC, sub. note, Reg S, 9.25% to 06/24/19, FRN thereafter, 06/24/21 NGA USD 62,141, ,460,000 Alfa Bond Issuance PLC, (Alfa Bank OJSC), loan participation, senior note, Reg S, 7.75%, 04/28/21 RUS USD 55,199, ,350,000 SSB #1 PLC, (OJSC State Savings Bank of Ukraine), loan participation, senior note, Reg S, 8.875%, 03/20/18 UKR USD 48,596, ,000,000 State Export-Import Bank of Ukraine, (BIZ FIN), loan participation, Reg S, 8.75%, 01/22/18 UKR USD 29,187, ,600,000 Turkiye Is Bankasi, Reg S, 6.00%, 10/24/22 TUR USD 26,813, ,000,000 Metinvest BV, Reg S, 8.75%, 02/14/18 UKR USD 25,059, ,130,000 Edcon Holdings Pty. Ltd., senior secured note, Reg S, %, 06/30/19 ZAF EUR 18,662, ,640,000 Edcon Pty. Ltd., senior secured note, first lien, Reg S, 9.50%, 03/01/18 ZAF USD 16,615, ,000,000 General Electric Capital Corp., senior note, A, 8.50%, 04/06/18 USA MXN 14,503, ,801,000 Edcon Pty. Ltd., senior secured note, first lien, Reg S, 9.50%, 03/01/18 ZAF EUR 13,474, ,030,000 HSBK (Europe) BV, senior note, Reg S, 7.25%, 05/03/17 KAZ USD 12,047, ,340,000 Halyk Savings Bank of Kazakhstan JSC, senior note, Reg S, 7.25%, 01/28/21 KAZ USD 7,224, ,700,000 ICICI Bank Ltd., junior sub. notes, Reg S, 6.375% to 04/30/17, FRN thereafter, 04/30/22 IND USD 6,938, ,540,000 Corporacion GEO SAB de CV, senior note, Reg S, 8.875%, 03/27/22 * MEX USD 1,679, ,143, Government and Municipal Bonds 304,660,000 Government of Ecuador, senior note, Reg S, 7.95%, 06/20/24 ECU USD 262,007, ,781,520 Government of Mexico, 6.25%, 06/16/16 MEX MXN 259,022, ,802,508,876 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 199,016, ,201,120,000,000 Government of Indonesia, FR40, 11.00%, 09/15/25 IDN IDR 117,251, ,952,610,000 Government of Nigeria, 13.05%, 08/16/16 NGA NGN 115,993, ,002,000 Government of Poland, Strip, 01/25/16 POL PLN 101,204, ,104,120,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 91,420, ,170,730,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 90,875, ,238,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 84,225, ,972,000,000 Government of Nigeria, 15.10%, 04/27/17 NGA NGN 76,091, ,110,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 74,315, ,262,000,000 Serbia Treasury Note, 10.00%, 02/21/16 SER RSD 73,474, ,820,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 71,449, ,043,000 Financing of Infrastructure Projects State Enterprise, Reg S, 8.375%, 11/03/17 UKR USD 71,240, ,660,000 Financing of Infrastructure Projects State Enterprise, senior note, Reg S, 9.00%, 12/07/17 UKR USD 68,469, ,967,700,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 67,677, ,000,000 Republic of Senegal, senior note, Reg S, 6.25%, 07/30/24 SEN USD 67,593, ,915 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 67,533, ,190,000 Government of Kenya, senior note, Reg S, 6.875%, 06/24/24 KEN USD 65,017, ,400,000 Federal Democratic Republic of Ethiopia, Reg S, 6.625%, 12/11/24 ETH USD 64,688, ,479,416,122 Uruguay Notas del Tesoro, 14, Index Linked, 4.00%, 06/10/20 URY UYU 60,793, ,528 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 60,105, ,434,100,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 57,345, ,630,000 Government of Slovenia, senior note, Reg S, 5.85%, 05/10/23 SVN USD 52,148, ,500,000 Government of Ghana, 19.24%, 05/30/16 GHA GHS 51,551, ,430 Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 49,981, ,222,746,701 Uruguay Notas del Tesoro, 13, Index Linked, 4.00%, 05/25/25 URY UYU 49,449, ,365,205,504 Uruguay Notas del Tesoro, 19, Index Linked, 2.50%, 09/27/22 URY UYU 48,769, ,149,400,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 48,510, ,572,760 Government of Mexico, 7.25%, 12/15/16 MEX MXN 47,607, ,250,000 Government of Ghana, 19.04%, 09/24/18 GHA GHS 47,103, ,180,000 Government of Poland, 5.00%, 04/25/16 POL PLN 46,814, ,456,930,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 43,299, ,121,390,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 43,295, ,691,000 Government of Ghana, 23.00%, 08/21/17 GHA GHS 39,803, ,720,000 Government of Sri Lanka, senior note, Reg S, 5.875%, 07/25/22 LKA USD 37,360, ,599,600,000 Government of Sri Lanka, B, 8.00%, 06/01/16 LKA LKR 35,814, ,350,000,000 Government of Nigeria, 16.00%, 06/29/19 NGA NGN 35,422, ,910,000 Government of Ghana, 24.44%, 05/29/17 GHA GHS 34,164, ,930,000 Government of Poland, 4.75%, 10/25/16 POL PLN 33,574, ,364,083 Uruguay Notas del Tesoro, 10, Index Linked, 4.25%, 01/05/17 URY UYU 33,349, Unaudited Semi-Annual Report

355 Templeton Emerging s Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 34,861,008 Government of Ghana, Reg S, 7.875%, 08/07/23 GHA USD 32,406, ,857 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 31,754, ,690 Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 31,559, ,270,000 Government of Montenegro, Reg S, 5.375%, 05/20/19 MNE EUR 30,899, ,000,000 Eastern & Southern African Trade and Development Bank, senior note, Reg S, 6.375%, 12/06/18 SP USD 30,316, ,800,000 Kyiv Finance PLC, (City of Kiev), loan participation, senior note, Reg S, 9.375%, 07/11/16 UKR USD 28,167, ,733,630,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 26,701, ,428,000 Government of Fiji, senior bond, 9.00%, 03/15/16 FJ USD 26,026, ,512,217 Government of Uruguay, Index Linked, 4.25%, 04/05/27 URY UYU 25,666, ,050 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 25,391, ,800,000 Government of Zambia, senior note, Reg S, 8.50%, 04/14/24 ZMB USD 25,070, ,926,840,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 24,852, ,830,000 Government of Ghana, 23.00%, 02/13/17 GHA GHS 24,784, ,769,100,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 24,171, ,421,600,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 23,816, ,000,000 Inter-American Development Bank, senior note, 7.50%, 12/05/24 SP MXN 22,158, ,620,000 Government of the Philippines, senior bond, 9.125%, 09/04/16 PHL PHP 22,060, ,370,700,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 21,541, ,662,340,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 21,169, ,038,720,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 20,595, ,360,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 19,314, ,705 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 18,496, ,114,900,000 Government of Sri Lanka, 10.60%, 07/01/19 LKA LKR 18,174, ,871,000 Government of Ukraine, senior note, Reg S, 6.25%, 06/17/16 UKR USD 17,962, ,029,200,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 16,408, ,450 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 16,391, ,710,000 Uruguay Notas del Tesoro, 9.50%, 01/27/16 URY UYU 16,143, ,122,300,000 Government of Sri Lanka, A, 5.80%, 01/15/17 LKA LKR 15,905, ,066,000 Government of Peru, senior bond, 7.84%, 08/12/20 PER PEN 15,750, ,010,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 14,787, ,877,910,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 14,718, ,064,000 Uruguay Treasury Bill, Strip, 01/14/16 URY UYU 14,525, ,496,250,000 Government of Sri Lanka, 10.60%, 09/15/19 LKA LKR 12,915, ,540,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 11,677, ,110 Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 10,968, ,658,380,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 10,563, ,394,900,000 Government of Sri Lanka, B, 5.80%, 07/15/17 LKA LKR 10,353, ,151,420,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 10,114, ,330,000 Government of Ghana, 25.40%, 07/31/17 GHA GHS 9,361, ,559,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 8,919, ,015,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 8,908, ,200,000 Serbia Treasury Note, 10.00%, 12/19/16 SER RSD 7,453, ,661,700,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 7,382, ,610,000,000 Government of Indonesia, FR42, 10.25%, 07/15/27 IDN IDR 7,084, ,100,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 6,716, ,894,592 Uruguay Notas del Tesoro, 17, Index Linked, 2.75%, 06/16/16 URY UYU 6,572, ,400,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 6,539, ,860,000,000 Government of Indonesia, FR39, 11.75%, 08/15/23 IDN IDR 6,512, ,298,000,000 Government of Indonesia, 7.875%, 04/15/19 IDN IDR 6,401, ,840,000 Serbia Treasury Note, 10.00%, 03/01/16 SER RSD 6,342, ,340,000,000 Government of Indonesia, FR43, 10.25%, 07/15/22 IDN IDR 5,826, ,780,000 Serbia Treasury Note, 10.00%, 03/20/21 SER RSD 5,797, ,930,000 Government of Sri Lanka, B, 8.50%, 07/15/18 LKA LKR 5,786, ,957,000 Government of Ukraine, senior note, Reg S, 6.75%, 11/14/17 UKR USD 5,483, ,050,000,000 Government of Indonesia, FR46, 9.50%, 07/15/23 IDN IDR 5,438, ,130,000 Government of the Philippines, senior bond, 7.00%, 01/27/16 PHL PHP 5,309, ,600,000 Serbia Treasury Bond, 10.00%, 06/27/16 SER RSD 4,987, ,080,000 Serbia Treasury Bond, 10.00%, 09/11/21 SER RSD 4,937, ,360,000 Government of Slovenia, senior note, Reg S, 5.50%, 10/26/22 SVN USD 4,845, ,920,000 Uruguay Treasury Bill, Strip, 07/28/16 URY UYU 4,751, ,600,000 Government of Ukraine, senior note, Reg S, 7.95%, 02/23/21 UKR USD 4,624, ,140,000 Serbia Treasury Note, 10.00%, 05/22/16 SER RSD 4,278, ,100,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 4,219, ,250,000 Government of Sri Lanka, 11.20%, 07/01/22 LKA LKR 4,096, ,264,470 Government of Uruguay, senior bond, Index Linked, 4.00%, 07/10/30 URY UYU 3,902, ,300,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 3,826, ,130,000 Government of Sri Lanka, A, 7.50%, 08/15/18 LKA LKR 3,744, ,960,000 Financing of Infrastructure Projects State Enterprise, Reg S, 7.40%, 04/20/18 UKR USD 3,607, ,430 Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 3,583, ,660,000 Government of Ghana, 16.90%, 03/07/16 GHA GHS 3,423, ,170,000 Serbia Treasury Note, 10.00%, 11/08/17 SER RSD 3,252, ,473,344 Uruguay Notas del Tesoro, 18, Index Linked, 2.25%, 08/23/17 URY UYU 3,246, ,405,450 Government of Uruguay, senior bond, Index Linked, 5.00%, 09/14/18 URY UYU 3,197, ,360 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 3,151, ,620,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 2,930, ,033,000 Uruguay Treasury Bill, Strip, 04/21/16 URY UYU 2,820, Unaudited Semi-Annual Report 353

356 Templeton Emerging s Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 7,890,000 Government of Ghana, 26.00%, 06/05/17 GHA GHS 2,691, ,130,000 Serbia Treasury Note, 10.00%, 05/08/17 SER RSD 2,618, ,260,000 Uruguay Treasury Bill, Strip, 11/03/16 URY UYU 2,561, ,705,000 Government of Hungary, senior note, Reg S, 3.875%, 02/24/20 HUN EUR 2,243, ,050,000 Uruguay Notas del Tesoro, 11.00%, 03/21/17 URY UYU 2,095, ,200,000 Serbia Treasury Bond, 10.00%, 08/15/16 SER RSD 2,051, ,780,000 Government of El Salvador, senior bond, Reg S, 7.65%, 06/15/35 SVC USD 1,914, ,900,000 Government of Sri Lanka, A, 6.40%, 08/01/16 LKA LKR 1,880, ,000,000,000 Government of Indonesia, FR36, 11.50%, 09/15/19 IDN IDR 1,853, ,880,000,000 Government of Indonesia, FR48, 9.00%, 09/15/18 IDN IDR 1,757, ,585,000,000 Government of Indonesia, FR28, 10.00%, 07/15/17 IDN IDR 1,672, ,780 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 1,667, ,559,000 Government of Ghana, Reg S, 8.50%, 10/04/17 GHA USD 1,573, ,200,000 Government of Sri Lanka, B, 6.40%, 10/01/16 LKA LKR 1,338, ,770,000 Serbia Treasury Note, 10.00%, 10/17/16 SER RSD 1,147, ,570,000 Serbia Treasury Bond, 10.00%, 11/21/18 SER RSD 997, ,550,000 Uruguay Treasury Bill, Strip, 09/15/16 URY UYU 949, ,300,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 824, ,047,271 Government of Uruguay, senior bond, Index Linked, 3.70%, 06/26/37 URY UYU 669, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/17 BRA BRL 630, ,450,000 Government of Sri Lanka, 8.25%, 03/01/17 LKA LKR 591, ,600,000 Government of Ghana, 25.48%, 04/24/17 GHA GHS 547, ,000 Government of Hungary, senior note, 6.375%, 03/29/21 HUN USD 492, ,631,802 Uruguay Notas del Tesoro, 16, Index Linked, 3.25%, 01/27/19 URY UYU 340, ,000 The Export-Import Bank of Korea, senior note, 4.625%, 02/20/17 KOR EUR 315, ,063,806, Securities Maturing Within One Year 21,908,330,000 Nigeria Treasury Bill, 0.00%, 08/06/15 NGA NGN 110,986, ,588,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 94,025, ,831 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 90,528, ,063,356,000 Nigeria Treasury Bill, 0.00%, 06/04/15 NGA NGN 67,592, ,557,130,000 Nigeria Treasury Bill, 0.00%, 03/05/15 NGA NGN 67,012, ,673,400,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 60,167, ,774,240 Government of Mexico, 8.00%, 12/17/15 MEX MXN 55,074, ,950,000 Government of Ghana, 24.00%, 05/25/15 GHA GHS 49,849, ,850,360,000 Nigeria Treasury Bill, 0.00%, 04/23/15 NGA NGN 41,156, ,500,000,000 Government of India, 7.17%, 06/14/15 IND INR 39,493, ,317,000,000 Serbia Treasury Note, 10.00%, 04/27/15 SER RSD 33,280, ,523,110 Government of Mexico, 6.00%, 06/18/15 MEX MXN 31,078, ,679,232 Uruguay Notas del Tesoro, Index Linked, 4.00%, 06/14/15 URY UYU 29,232, ,379,900,000 Serbia Treasury Note, 10.00%, 03/01/15 SER RSD 23,796, ,390,000 Uruguay Notas del Tesoro, 10.25%, 08/22/15 URY UYU 23,428, ,410,700,000 Nigeria Treasury Bill, 0.00%, 04/09/15 NGA NGN 23,215, ,260,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 21,538, ,305,310 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 19,578, ,450,000 Uruguay Notas del Tesoro, 10.50%, 03/21/15 URY UYU 18,904, ,792,200,000 Serbia Treasury Note, 10.00%, 09/14/15 SER RSD 18,094, ,551,000 Government of Ghana, 21.00%, 10/26/15 GHA GHS 16,742, ,781,960 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 16,010, ,623,000 Government of Poland, 5.50%, 04/25/15 POL PLN 15,906, ,967,000 Uruguay Treasury Bill, 0.00%, 05/04/15 URY UYU 15,323, ,991,080 Mexico Treasury Bill, 0.00%, 07/23/15 MEX MXN 15,319, ,150,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 14,384, ,484,000 Government of Poland, 6.25%, 10/24/15 POL PLN 14,185, ,665,900,000 Government of Sri Lanka, B, 11.00%, 09/01/15 LKA LKR 13,108, ,000 Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 13,067, ,481,780 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 13,053, ,460,000 Uruguay Treasury Bill, Strip, 05/14/15 URY UYU 12,135, ,280,000 Government of Ghana, 14.99%, 02/23/15 GHA GHS 11,554, ,612,000 Government of Poland, Strip, 07/25/15 POL PLN 11,368, ,513,760,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 9,983, ,726,180,000 Nigeria Treasury Bill, 0.00%, 02/05/15 NGA NGN 9,313, ,086 Letra Tesouro Nacional, Strip, 01/01/15 BRA BRL 8,683, ,803,600 ING Americas Issuance BV, 5.50%, 08/24/15 UKR UAH 7,065, ,510,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 6,402, ,384,850 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 5,652, ,450,610 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 5,652, ,655,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 5,612, ,841,450 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 5,170, ,600,000 Government of Sri Lanka, A, 8.50%, 11/01/15 LKA LKR 4,964, ,120,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 4,798, ,850,000 Nigeria Treasury Bill, 0.00%, 05/07/15 NGA NGN 4,606, ,780,000 Nigeria Treasury Bill, 0.00%, 05/21/15 NGA NGN 4,485, ,844,000 ING Americas Issuance BV, Reg S, 5.50%, 08/25/15 UKR UAH 4,309, ,500,000 Government of Peru, 9.91%, 05/05/15 PER PEN 3,934, ,670,000 Government of Sri Lanka, A, 6.50%, 07/15/15 LKA LKR 3,538, ,970,000 Government of Ukraine, senior bond, Reg S, 4.95%, 10/13/15 UKR EUR 2,442, Unaudited Semi-Annual Report

357 Templeton Emerging s Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 63,214,000 Uruguay Treasury Bill, Strip, 08/20/15 URY UYU 2,388, ,150,000 Uruguay Treasury Bill, Strip, 11/26/15 URY UYU 1,832, ,570,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 1,814, ,740,000 Philippine Treasury Bill, 0.00%, 09/02/15 PHL PHP 1,493, ,143,000 Uruguay Treasury Bill, Strip, 03/26/15 URY UYU 1,402, ,200,000 Government of Ukraine, senior note, Reg S, 6.875%, 09/23/15 UKR USD 843, ,168,301 Government of Uruguay, Index Linked, zero cpn., 03/26/15 URY UYU 454, ,240,000 Uruguay Treasury Bill, Strip, 07/02/15 URY UYU 393, ,790,000 Uruguay Treasury Bill, 0.00%, 10/23/15 URY UYU 324, ,340,000 Philippine Treasury Bill, 0.00%, 07/08/15 PHL PHP 272, ,580,000 Government of Sri Lanka, A, 11.75%, 03/15/15 LKA LKR 220, ,600,000 Philippine Treasury Bill, 0.00%, 10/07/15 PHL PHP 145, ,100,000 Philippine Treasury Bill, 0.00%, 12/02/15 PHL PHP 111, ,690,000 Philippine Treasury Bill, 0.00%, 06/03/15 PHL PHP 59, ,060,000 Philippine Treasury Bill, 0.00%, 11/04/15 PHL PHP 45, ,770,000 Philippine Treasury Bill, 0.00%, 05/06/15 PHL PHP 39, ,000 Philippine Treasury Bill, 0.00%, 04/08/15 PHL PHP 18, ,208,672, TOTAL BONDS 5,739,660, RIGHTS Government and Municipal Bonds 1,000,000 Banco Central Del Uruguay, rts., 02/19/21 URY USD TOTAL RIGHTS TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 5,739,660, TOTAL INVESTMENTS 5,739,660, * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report 355

358 Templeton Emerging s Smaller Companies Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 7,345,359 Aramex Co. ARE AED 6,199, Auto Components 100,409 Global & Yuasa Battery Co. Ltd. KOR KRW 3,626, ,128 Balkrishna Industries Ltd. IND INR 2,976, ,600 Mahle-Metal Leve SA Industria e Comercio BRA BRL 509, ,112, Banks 4,203,234 Federal Bank Ltd. IND INR 10,115, ,065,500 Faysal Bank Ltd. PAK PKR 5,609, ,434,400 United Bank Ltd. PAK PKR 4,220, ,210 Intercorp Financial Services Inc., Reg S PER USD 3,107, ,402,300 Tisco Financial Group PCL, fgn. THA THB 3,105, ,479 ING Vysya Bank Ltd. IND INR 1,329, ,422,900 Bank Permata Tbk PT IDN IDR 415, ,903, Beverages 980,500 Embotelladora Andina SA, pfd., A CHL CLP 2,378, Biotechnology 28,296 Medy-tox Inc. KOR KRW 8,278, ,391 Biocon Ltd. IND INR 1,973, ,252, Building Products 2,459,000 Dynasty Ceramic PCL, fgn. THA THB 4,225, ,943 Trakya Cam Sanayii AS TUR TRY 735, ,960, Capital s 4,285,843 IS Yatirim Menkul Degerler AS TUR TRY 2,130, Chemicals 863,247 Tata Chemicals Ltd. IND INR 5,964, ,200 Paints & Chemical Industries Co. SAE EGY EGP 2,523, ,952 EID Parry India Ltd. IND INR 956, ,445, Commercial Services & Supplies 3,505,536 Depa Ltd. ARE USD 1,822, Containers & Packaging 3,902,000 Amvig Holdings Ltd. CHN HKD 1,685, Diversified Financial Services 640,661 Bajaj Holdings and Investment Ltd. IND INR 14,268, Electronic Equipment, Instruments & Components 8,984,622 Redington India Ltd. IND INR 19,569, ,207,400 Ju Teng International Holdings Ltd. CHN HKD 7,035, ,788,700 Delta Electronics (Thailand) PCL, fgn. THA THB 5,979, ,413 Simplo Technology Co. Ltd. TWN TWD 4,570, ,872,000 Digital China Holdings Ltd. CHN HKD 3,595, ,000 Flytech Technology Co. Ltd. TWN TWD 3,310, ,061, Energy Equipment & Services 20,535,000 Honghua Group Ltd. CHN HKD 2,621, ,126,000 Anhui Tianda Oil Pipe Co. Ltd., H CHN HKD 859, ,481, Food & Staples Retailing 242,795 Massmart Holdings Ltd. ZAF ZAR 2,998, ,260 Eurocash SA POL PLN 1,408, ,720 DIXY Group OJSC RUS RUB 896, ,303, Food Products 666,442 Pinar Sut Mamulleri Sanayii AS TUR TRY 6,096, ,835,440 Grupo Herdez SAB de CV MEX MXN 4,406, ,862,000 Agthia Group PJSC ARE AED 3,143, ,401,600 Biostime International Holdings Ltd. CHN HKD 2,892, ,655 Wawel SA POL PLN 2,808, ,024,000 Uni-President China Holdings Ltd. CHN HKD 2,800, ,138,900 Marfrig Global Foods SA BRA BRL 2,614, Unaudited Semi-Annual Report

359 Templeton Emerging s Smaller Companies Fund Schedule of Investments as of December 31, 2014 (continued) face Food Products (continued) 5,313,000 Oldtown Bhd. MYS MYR 2,279, ,674 Ulker Biskuvi Sanayi AS TUR TRY 1,921, ,299 MHP SA, GDR, Reg S UKR USD 1,051, ,348 Pinar Entegre Et ve Un Sanayi AS TUR TRY 779, ,791, Health Care Equipment & Supplies 210,000 St. Shine Optical Co. Ltd. TWN TWD 3,463, ,031,300 Hartalega Holdings Bhd. MYS MYR 2,073, ,536, Health Care Providers & Services 3,995,761 Selcuk Ecza Deposu Ticaret ve Sanayi AS TUR TRY 3,698, ,803 HSBC Bank PLC (CRTP Al Mouwasat Medical Services, 144A) SAU USD 1,910, ,608, Hotels, Restaurants & Leisure 35,180 DO & CO Restaurants & Catering AG TUR TRY 2,698, ,500 Fortuna Entertainment Group NV TUR CZK 28, ,727, Household Durables 101,458 Amica Wronki SA POL PLN 3,123, ,638,100 Yorkey Optical International Cayman Ltd. CHN HKD 1,530, ,654, Household Products 6,247,360 DSG International Thailand PCL, fgn. THA THB 1,472, Industrial Conglomerates 11,358,700 Hemas Holdings PLC LKA LKR 6,432, ,688,000 Chongqing Machinery and Electric Co. Ltd., H CHN HKD 1,499, ,931, Insurance 441,153,746 Panin Financial Tbk PT IDN IDR 10,650, Inter & Catalog Retail 14,000 GS Home Shopping Inc. KOR KRW 2,841, Inter Software & Services 83,700 Sohu.com Inc. CHN USD 4,451, ,350 Mail.ru Group Ltd., GDR, Reg S RUS USD 315, ,766, IT Services 7,117,500 Travelsky Technology Ltd., H CHN HKD 7,692, Leisure Products 848,300 Merida Industry Co. Ltd. TWN TWD 5,748, Machinery 2,580,000 Shanghai Prime Machinery Co. Ltd., H CHN HKD 372, Oil, Gas & Consumable Fuels 532,054 Great Eastern Shipping Co. Ltd. IND INR 3,054, Paper & Forest Products 783,000 Duratex SA BRA BRL 2,365, Personal Products 1,373,700 Mandom Indonesia Tbk PT IDN IDR 1,943, Pharmaceuticals 593,736 Egyptian International Pharmaceutical Industries Co. EGY EGP 6,518, ,515 Bukwang Pharmaceutical Co. Ltd. KOR KRW 1,765, ,600 TTY Biopharm Co. Ltd. TWN TWD 582, ,867, Real Estate Management & Development 14,172,000 Beijing Capital Land Ltd., H CHN HKD 5,373, Road & Rail 294,148 Globaltrans Investment PLC, GDR, Reg S RUS USD 1,485, Semiconductors & Semiconductor Equipment 213,503 Silicon Works Co. Ltd. KOR KRW 4,880, ,000 Novatek Microelectronics Corp. Ltd. TWN TWD 3,835, ,715, Unaudited Semi-Annual Report 357

360 Templeton Emerging s Smaller Companies Fund Schedule of Investments as of December 31, 2014 (continued) face Specialty Retail 3,246,200 Luk Fook Holdings (International) Ltd. HKG HKD 12,203, ,900 Cia Hering BRA BRL 4,159, ,640,800 Bonjour Holdings Ltd. HKG HKD 3,030, ,000 OSIM International Ltd. SGP SGD 103, ,496, Textiles, Apparel & Luxury Goods 115,296 Fila Korea Ltd. KOR KRW 11,753, ,162 LF Corp. KOR KRW 5,991, ,608 Vardhman Textiles Ltd. IND INR 5,434, ,630 Youngone Holdings Co. Ltd. KOR KRW 4,196, ,404 Grendene SA BRA BRL 3,456, ,831, Tobacco 116,394 Eastern Tobacco EGY EGP 3,581, Companies & Distributors 6,143,700 Hexindo Adiperkasa Tbk PT IDN IDR 1,738, Transportation Infrastructure 2,388,982 COSCO Pacific Ltd. CHN HKD 3,401, ,064,279 Shenzhen Chiwan Wharf Holdings Ltd., B CHN HKD 2,230, ,631, TOTAL SHARES 324,888, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 324,888, TOTAL INVESTMENTS 324,888, Unaudited Semi-Annual Report

361 Templeton Euroland Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 33,580 Thales SA FRA EUR 1,510, Air Freight & Logistics 400,900 TNT Express NV NLD EUR 2,221, ,230 CTT-Correios de Portugal SA PRT EUR 2,190, ,840 Deutsche Post AG DEU EUR 1,699, ,111, Airlines 266,710 Deutsche Lufthansa AG DEU EUR 3,688, Auto Components 26,784 Cie Generale des Etablissements Michelin, B FRA EUR 2,016, Banks 429,940 Credit Agricole SA FRA EUR 4,626, ,750 BNP Paribas SA FRA EUR 4,618, ,909 UniCredit SpA ITA EUR 3,808, ,582 ING Groep NV, IDR NLD EUR 2,908, ,510 Societe Generale SA FRA EUR 2,327, ,570 KBC GROEP NV BEL EUR 2,258, ,930 Commerzbank AG DEU EUR 1,075, ,622, Biotechnology 14,920 Basilea Pharmaceutica AG CHE CHF 1,142, Building Products 86,800 Compagnie de Saint-Gobain FRA EUR 3,057, Capital s 383,593 MLP AG DEU EUR 1,423, Chemicals 78,910 Akzo Nobel NV NLD EUR 4,549, Construction & Engineering 74,110 FLSmidth & Co. AS DNK DKK 2,709, ,830 Koninklijke BAM Groep NV NLD EUR 1,292, ,002, Construction Materials 64,890 HeidelbergCement AG DEU EUR 3,816, ,535 CRH PLC IRL EUR 2,577, ,050 Lafarge SA FRA EUR 2,500, ,894, Diversified Financial Services 38,050 Deutsche Boerse AG DEU EUR 2,253, Diversified Telecommunication Services 358,238 Telefonica SA ESP EUR 4,270, Energy Equipment & Services 125,468 SBM Offshore NV NLD EUR 1,227, ,220 Technip SA FRA EUR 1,147, ,223 Aker Solutions ASA, Reg S NOR NOK 603, ,611 Saipem SpA ITA EUR 338, ,316, Food & Staples Retailing 125,340 Metro AG DEU EUR 3,172, Health Care Equipment & Supplies 2,167,554 Sorin SpA ITA EUR 4,174, ,520 Getinge AB, B SWE SEK 2,722, ,897, Health Care Providers & Services 160,677 Amplifon SpA ITA EUR 787, Household Durables 33,410 SEB SA FRA EUR 2,057, Industrial Conglomerates 21,290 Siemens AG DEU EUR 1,995, Unaudited Semi-Annual Report 359

362 Templeton Euroland Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Insurance 702,710 Aegon NV NLD EUR 4,398, ,105 AXA SA FRA EUR 3,650, ,590 UNIQA Insurance Group AG AUT EUR 3,068, ,220 NN Group NV NLD EUR 2,241, ,480 Muenchener Rueckversicherungs-Gesellschaft AG DEU EUR 1,571, ,930, IT Services 83,002 Indra Sistemas SA ESP EUR 669, Life Sciences Tools & Services 104,800 QIAGEN NV NLD EUR 2,028, ,970 Gerresheimer AG DEU EUR 1,841, ,790 MorphoSys AG DEU EUR 1,209, ,640 Tecan Group AG CHE CHF 999, ,079, Machinery 100,025 DMG MORI SEIKI AG DEU EUR 2,350, ,248 GEA Group AG DEU EUR 1,180, ,380 Rational AG DEU EUR 1,137, ,100 Meyer Burger Technology AG CHE CHF 595, ,264, Media 278,651 Atresmedia Corporacion de Medios de Comunicacion SA ESP EUR 3,243, ,710 Ipsos FRA EUR 1,202, ,446, Oil, Gas & Consumable Fuels 294,399 Eni SpA ITA EUR 4,271, ,530 Total SA, B FRA EUR 3,976, ,850 Galp Energia SGPS SA, B PRT EUR 3,168, ,760 Royal Dutch Shell PLC, A GBR EUR 2,621, ,038, Personal Products 68,370 Ontex Group NV BEL EUR 1,621, Pharmaceuticals 73,386 Merck KGaA DEU EUR 5,754, ,505 Sanofi FRA EUR 5,334, ,410 Bayer AG DEU EUR 5,131, ,770 H. Lundbeck AS DNK DKK 4,646, ,090 Roche Holding AG CHE CHF 3,385, ,360 UCB SA BEL EUR 2,866, ,119, Semiconductors & Semiconductor Equipment 209,520 Infineon Technologies AG DEU EUR 1,853, Software 46,720 SAP SE DEU EUR 2,721, Wireless Telecommunication Services 29,340 Millicom International Cellular SA, IDR LUX SEK 1,811, TOTAL SHARES 163,325, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 163,325, TOTAL INVESTMENTS 163,325, Unaudited Semi-Annual Report

363 Templeton European Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 56,900 Thales SA FRA EUR 2,560, ,400 BAE Systems PLC GBR GBP 2,300, ,860, Air Freight & Logistics 521,300 TNT Express NV NLD EUR 2,888, Airlines 453,100 Deutsche Lufthansa AG DEU EUR 6,266, ,400 International Consolidated Airlines Group SA GBR GBP 2,382, ,648, Auto Components 58,896 Cie Generale des Etablissements Michelin, B FRA EUR 4,433, Banks 200,400 BNP Paribas SA FRA EUR 9,871, ,022,100 UniCredit SpA ITA EUR 5,452, ,000 Credit Agricole SA FRA EUR 5,369, ,574,000 Barclays PLC GBR GBP 4,937, ,718 ING Groep NV, IDR NLD EUR 4,090, ,300 HSBC Holdings PLC GBR GBP 3,483, ,600 KBC GROEP NV BEL EUR 2,492, ,200 Commerzbank AG DEU EUR 1,605, ,302, Biotechnology 50,200 Basilea Pharmaceutica AG CHE CHF 3,845, Building Products 145,700 Compagnie de Saint-Gobain FRA EUR 5,133, Capital s 647,300 Aberdeen Asset Management PLC GBR GBP 3,603, ,207 Credit Suisse Group AG CHE CHF 3,506, ,044 MLP AG DEU EUR 2,022, ,132, Chemicals 96,200 Akzo Nobel NV NLD EUR 5,545, Commercial Services & Supplies 670,960 Serco Group PLC GBR GBP 1,388, Construction & Engineering 91,000 FLSmidth & Co. AS DNK DKK 3,327, ,900 Koninklijke BAM Groep NV NLD EUR 2,377, ,704, Construction Materials 267,457 CRH PLC IRL EUR 5,322, ,000 HeidelbergCement AG DEU EUR 5,234, ,556, Diversified Financial Services 45,900 Deutsche Boerse AG DEU EUR 2,718, Diversified Telecommunication Services 491,001 Telefonica SA ESP EUR 5,852, ,817 Telenor ASA NOR NOK 3,616, ,469, Electrical Equipment 205,500 ABB Ltd. CHE CHF 3,611, Energy Equipment & Services 43,700 Technip SA FRA EUR 2,159, ,000 Petrofac Ltd. GBR GBP 1,267, ,800 SBM Offshore NV NLD EUR 937, ,800 Saipem SpA ITA EUR 559, ,923, Food & Staples Retailing 1,847,900 Tesco PLC GBR GBP 4,499, ,900 Metro AG DEU EUR 4,173, ,672, Unaudited Semi-Annual Report 361

364 Templeton European Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Health Care Equipment & Supplies 3,628,400 Sorin SpA ITA EUR 6,988, ,000 Getinge AB, B SWE SEK 4,597, ,585, Health Care Providers & Services 372,000 Amplifon SpA ITA EUR 1,824, Household Durables 73,300 SEB SA FRA EUR 4,513, Industrial Conglomerates 29,094 Siemens AG DEU EUR 2,727, Insurance 995,000 Aegon NV NLD EUR 6,227, ,265 AXA SA FRA EUR 4,537, ,200 UNIQA Insurance Group AG AUT EUR 4,092, ,966 Aviva PLC GBR GBP 3,557, ,800 NN Group NV NLD EUR 2,777, ,693 Swiss Re AG CHE CHF 2,690, ,882, IT Services 158,000 Indra Sistemas SA ESP EUR 1,275, Life Sciences Tools & Services 99,400 Gerresheimer AG DEU EUR 4,468, ,800 MorphoSys AG DEU EUR 4,122, ,000 QIAGEN NV NLD EUR 3,930, ,520, Machinery 353,200 Meyer Burger Technology AG CHE CHF 1,893, Media 189,100 Ipsos FRA EUR 4,484, ,180 Schibsted ASA NOR NOK 4,044, ,800 Sky PLC GBR GBP 3,182, ,000 Atresmedia Corporacion de Medios de Comunicacion SA ESP EUR 2,584, ,295, Multiline Retail 1,116,700 Marks & Spencer Group PLC GBR GBP 6,887, Oil, Gas & Consumable Fuels 475,600 Eni SpA ITA EUR 6,900, ,300 Total SA, B FRA EUR 5,880, ,300 Galp Energia SGPS SA, B PRT EUR 4,900, ,900 BG Group PLC GBR GBP 3,720, ,751 BP PLC GBR GBP 3,699, ,102, Personal Products 130,700 Ontex Group NV BEL EUR 3,099, Pharmaceuticals 430,400 H. Lundbeck AS DNK DKK 7,096, ,430 Merck KGaA DEU EUR 6,621, ,500 UCB SA BEL EUR 5,782, ,300 Roche Holding AG CHE CHF 5,003, ,447 Sanofi FRA EUR 4,800, ,100 Bayer AG DEU EUR 4,305, ,900 Novartis AG CHE CHF 3,523, ,988,000 Vectura Group PLC GBR GBP 3,297, ,300 GlaxoSmithKline PLC GBR GBP 2,930, ,360, Software 65,800 SAP SE DEU EUR 3,833, Specialty Retail 1,040,300 Kingfisher PLC GBR GBP 4,563, Wireless Telecommunication Services 2,547,661 Vodafone Group PLC GBR GBP 7,307, ,471 Turkcell Iletisim Hizmetleri AS, ADR TUR USD 3,304, ,611, TOTAL SHARES 300,812, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 300,812, TOTAL INVESTMENTS 300,812, Unaudited Semi-Annual Report

365 Templeton Frontier s Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 36,248,004 Aramex Co. ARE AED 30,592, Airlines 71,116,080 Kenya Airways Ltd. KEN KES 6,597, Automobiles 2,785,864 Indus Motor Co. Ltd. PAK PKR 24,560, Banks 37,494,335 United Bank Ltd. PAK PKR 64,997, ,080,093 Commercial Bank of Ceylon PLC - voting shares LKA LKR 47,025, ,991,490 Bank Muscat SAOG OMN OMR 45,491, ,752,713 Zenith Bank PLC NGA NGN 45,044, ,315,000 National Bank of Kuwait SAK KWD KWD 38,267, ,618,567 BBVA Banco Frances SA, ADR ARG USD 36,110, ,251,437 Deutsche Bank AG/London (CRTP Saudi British Bank, 144A) SAU USD 34,799, ,899,504 Guaranty Trust Bank PLC NGA NGN 31,633, ,907,834 HSBC Bank PLC (CRTP Samba Financial Group, 144A) SAU USD 29,911, ,114,494 FBN Holdings PLC NGA NGN 26,934, ,629,794 Kenya Commercial Bank Ltd. KEN KES 20,983, ,876,398 Hatton National Bank PLC LKA LKR 20,624, ,271,263 Islami Bank Bangladesh Ltd. BGD BDT 20,200, ,257,938 Banca Transilvania ROM RON 19,181, ,719,674 United Bank for Africa PLC NGA NGN 16,588, ,258,140 Brac Bank Ltd. BGD BDT 16,266, ,499,734 Deutsche Bank AG/London (CRTP Samba Financial Group, 144A) SAU USD 15,427, ,873,002 Merrill Lynch International & Co. CV (CRTP Arab National Bank) SAU USD 15,223, ,007,527 HSBC Bank PLC (CRTP Al Rajhi Bank) SAU USD 13,760, ,938,880 BRD-Groupe Societe Generale ROM RON 11,660, ,696 Banco Macro SA, ADR ARG USD 11,312, ,416 Bank of Georgia Holdings PLC GE GBP 10,724, ,625,980 Hatton National Bank PLC LKA LKR 8,893, ,770,288 Ecobank Transnational Inc. NGA NGN 8,302, ,114,017 The Co-operative Bank of Kenya Ltd. KEN KES 3,288, ,215,179 Commercial Bank of Ceylon PLC - non-voting shares LKA LKR 3,065, ,718, Beverages 47,848,118 Nigerian Breweries PLC NGA NGN 43,220, ,295,997 Delta Corp. Ltd. ZWE USD 30,901, ,721,900 East African Breweries Ltd. KEN KES 23,012, ,584,230 Guinness Nigeria PLC NGA NGN 13,400, ,535, Building Products 4,097,418 Binh Minh Plastics JSC VND VND 13,985, Chemicals 892,005 HSBC Bank PLC (CRTP Saudi Basic Industries Corp., 144A) SAU USD 19,967, ,639 Viet Nam Fumigation JSC VND VND 789, ,892 Arab Potash Co. PLC JOR JOD 134, ,891, Commercial Services & Supplies 1,550,500 Depa Ltd. ARE USD 806, Diversified Telecommunication Services 2,740,286 Telecom Argentina SA, B, ADR ARG USD 53,024, ,023,481 Sonatel SEN XOF 43,074, ,047,632 Ooredoo QSC QAT QAR 35,643, ,741, Energy Equipment & Services 9,871,500 PetroVietnam Technical Services Corp. VND VND 12,415, ,022,669 PetroVietnam Drilling and Well Services JSC VND VND 12,131, ,969,210 Renaissance Services SAOG OMN OMR 7,286, ,834, Food Products 931,601 Deutsche Bank AG/London (CRTP Saudi Dairy & Foodstuff Co., 144A) SAU USD 29,419, ,365,963 Deutsche Bank AG/London (CRTP Savola Al-Azizia United Co., 144A) SAU USD 28,848, ,277,200 Vietnam Dairy Products JSC VND VND 28,029, ,119,863 MHP SA, GDR, Reg S UKR USD 19,502, ,742,748 Nestle Nigeria PLC NGA NGN 9,635, ,150,071 Zambeef Products PLC ZMB GBP 2,107, ,943,000 Mriya Agro Holding PLC, GDR, Reg S UKR EUR 2,040, ,582, Unaudited Semi-Annual Report 363

366 Templeton Frontier s Fund Schedule of Investments as of December 31, 2014 (continued) face Health Care Providers & Services 740,330 HSBC Bank PLC (CRTP Al Mouwasat Medical Services, 144A) SAU USD 24,464, Hotels, Restaurants & Leisure 22,612,999 NagaCorp Ltd. KH HKD 18,489, ,364,879 Kuwait Foods Americana KWD KWD 13,049, ,539, Industrial Conglomerates 13,065,000 Hemas Holdings PLC LKA LKR 7,398, ,956,599 UAC of Nigeria PLC NGA NGN 6,947, ,345, Insurance 6,947,395 Vietnam National Reinsurance Corp. VND VND 8,218, Marine 1,754,568 Vietnam Container Shipping JSC VND VND 4,101, Metals & Mining 7,743,088 Hoa Phat Group JSC VND VND 19,188, ,249,584 Compania de Minas Buenaventura SA, ADR PER USD 11,946, ,453 Jordan Phosphate Mines JOR JOD 5,391, ,696,386 Ferrexpo PLC UKR GBP 1,401, ,926, Oil, Gas & Consumable Fuels 4,298,063 KazMunaiGas Exploration Production, GDR, Reg S KAZ USD 62,321, ,300,691 OMV Petrom SA ROM RON 18,968, ,292,088 Dragon Oil PLC TKM GBP 10,825, ,115, Pharmaceuticals 8,225,353 DHG Pharmaceutical JSC VND VND 36,920, ,837,149 Egyptian International Pharmaceutical Industries Co. EGY EGP 31,148, ,456,820 Imexpharm Pharmaceutical JSC VND VND 4,801, ,870, Textiles, Apparel & Luxury Goods 384,890 Youngone Corp. KOR KRW 18,650, ,909 Youngone Corp., GDR KOR USD 5,083, ,734, Wireless Telecommunication Services 23,718,214 Mobile Telecommunications Co. KWD KWD 42,925, ,466,489 Global Telecom Holding, GDR, Reg S EGY USD 35,529, ,282,100 Kcell JSC, GDR, Reg S KAZ USD 22,935, ,800 MTN Group Ltd. ZAF ZAR 18,337, ,939,400 Grameenphone Ltd. BGD BDT 13,579, ,014,033 HSBC Bank PLC (CRTP Etihad Etisalat Co., 144A) SAU USD 11,944, ,018,610 Eco Wireless Zimbabwe Ltd. ZWE USD 10,811, ,062, TOTAL SHARES 1,572,226, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,572,226, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Consumer Finance 94,541,720 Letshego Holdings Ltd. BWA BWP 26,430, Metals & Mining 4,016,256 African Minerals Ltd. ** SLE GBP TOTAL SHARES 26,430, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 26,430, TOTAL INVESTMENTS 1,598,656, ** These securities are submitted to a Fair Valuation 364 Unaudited Semi-Annual Report

367 Templeton Global Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 1,725,760 TNT Express NV NLD EUR 11,570, Airlines 7,971,552 Qantas Airways Ltd. AUS AUD 15,621, ,652 Deutsche Lufthansa AG DEU EUR 14,820, ,593,359 International Consolidated Airlines Group SA GBR GBP 12,072, ,514, Auto Components 828,300 Unipres Corp. JPN JPY 13,700, ,889 Cie Generale des Etablissements Michelin, B FRA EUR 12,831, ,591 Hyundai Mobis Co. Ltd. KOR KRW 11,347, ,879, Automobiles 3,028,200 Nissan Motor Co. Ltd. JPN JPY 26,712, ,138 Toyota Motor Corp. JPN JPY 15,651, ,170 General Motors Co. USA USD 8,838, ,201, Banks 2,703,370 HSBC Holdings PLC GBR GBP 25,644, ,000 BNP Paribas SA FRA EUR 24,795, ,021 Citigroup Inc. USA USD 20,562, ,820 JPMorgan Chase & Co. USA USD 19,200, ,591,016 UniCredit SpA ITA EUR 16,725, ,275,353 Credit Agricole SA FRA EUR 16,604, ,037,301 ING Groep NV, IDR NLD EUR 13,593, ,879,929 Lloyds Banking Group PLC GBR GBP 11,676, ,490 Hana Financial Group Inc. KOR KRW 10,634, ,639,800 Bangkok Bank PCL, fgn. THA THB 9,675, ,506,850 Barclays PLC GBR GBP 9,514, ,373 DBS Group Holdings Ltd. SGP SGD 8,604, ,232, Beverages 389,400 Suntory Beverage & Food Ltd. JPN JPY 13,551, Biotechnology 249,850 Amgen Inc. USA USD 39,798, ,510 Gilead Sciences Inc. USA USD 23,895, ,694, Building Products 248,720 Compagnie de Saint-Gobain FRA EUR 10,602, Capital s 363,570 Morgan Stanley USA USD 14,106, ,700 Credit Suisse Group AG CHE CHF 12,504, ,061,284 MLP AG DEU EUR 4,764, ,375, Chemicals 189,181 Akzo Nobel NV NLD EUR 13,196, ,630 Chemtura Corp. USA USD 8,473, ,260 The Dow Chemical Co. USA USD 7,491, ,161, Commercial Services & Supplies 237,620 The ADT Corp. USA USD 8,608, Construction Materials 529,790 CRH PLC IRL EUR 12,756, Consumer Finance 114,990 Capital One Financial Corp. USA USD 9,492, Diversified Financial Services 214,710 Voya Financial Inc. USA USD 9,099, Diversified Telecommunication Services 51,227,000 China Telecom Corp. Ltd., H CHN HKD 29,729, ,406,413 Telefonica SA ESP EUR 20,284, ,345 Telenor ASA NOR NOK 9,172, ,968,000 Singapore Telecommunications Ltd. SGP SGD 8,737, ,924, Unaudited Semi-Annual Report 365

368 Templeton Global Fund Schedule of Investments as of December 31, 2014 (continued) face Electronic Equipment, Instruments & Components 16,032,000 Digital China Holdings Ltd. CHN HKD 14,886, ,260 Knowles Corp. USA USD 8,107, ,993, Energy Equipment & Services 749,120 Noble Corp. PLC USA USD 12,412, ,280 Technip SA FRA EUR 8,985, ,130 Petrofac Ltd. GBR GBP 6,028, ,364 Saipem SpA ITA EUR 2,273, ,210 Halliburton Co. USA USD 1,502, ,202, Food & Staples Retailing 238,760 Walgreens Boots Alliance Inc. USA USD 18,193, ,608,410 Tesco PLC GBR GBP 10,630, ,250 Metro AG DEU EUR 9,991, ,815, Food Products 25,049,000 China Agri-Industries Holdings Ltd. CHN HKD 10,046, Health Care Equipment & Supplies 251,870 Medtronic Inc. USA USD 18,185, Household Durables 128,118 LG Electronics Inc. KOR KRW 6,922, Industrial Conglomerates 56,354 Siemens AG DEU EUR 6,392, Insurance 5,016,000 China Life Insurance Co. Ltd., H CHN HKD 19,600, ,860 American International Group Inc. USA USD 16,627, ,086,624 Aviva PLC GBR GBP 15,757, ,187 AXA SA FRA EUR 15,271, ,696,230 Aegon NV NLD EUR 12,846, ,080 The Hartford Financial Services Group Inc. USA USD 12,760, ,967 Swiss Re AG CHE CHF 9,673, ,250 NN Group NV NLD EUR 8,996, ,120 UNIQA Insurance Group AG AUT EUR 8,950, ,483, Life Sciences Tools & Services 339,600 QIAGEN NV NLD EUR 7,955, Machinery 170,920 Stanley Black & Decker Inc. USA USD 16,421, ,853,000 Weichai Power Co. Ltd., H CHN HKD 16,199, ,190 Navistar International Corp. USA USD 8,108, ,729, Media 474,220 Twenty-First Century Fox Inc., A USA USD 18,212, ,110,080 News Corp., A USA USD 17,417, ,630 Comcast Corp., Special A USA USD 14,197, ,230 Sky PLC GBR GBP 13,455, ,282, Metals & Mining 442,370 Allegheny Technologies Inc. USA USD 15,381, Multiline Retail 328,640 Macy s Inc. USA USD 21,608, ,804,060 Marks & Spencer Group PLC GBR GBP 13,463, ,071, Oil, Gas & Consumable Fuels 507,459 Total SA, B FRA EUR 26,108, ,031,260 Eni SpA ITA EUR 18,105, ,800 Suncor Energy Inc. CAN CAD 15,532, ,642,100 Talisman Energy Inc. CAN CAD 12,868, ,244,680 Galp Energia SGPS SA, B PRT EUR 12,697, ,704,000 Kunlun Energy Co. Ltd. CHN HKD 8,261, ,174 Petroleo Brasileiro SA, ADR, pfd. BRA USD 6,360, ,220 BP PLC GBR GBP 5,363, ,298, Unaudited Semi-Annual Report

369 Templeton Global Fund Schedule of Investments as of December 31, 2014 (continued) face Pharmaceuticals 549,287 Teva Pharmaceutical Industries Ltd., ADR ISR USD 31,589, ,550 Bayer AG DEU EUR 26,737, ,174 Actavis PLC USA USD 25,270, ,022 Roche Holding AG CHE CHF 23,081, ,703 Sanofi FRA EUR 19,381, ,830 Merck KGaA DEU EUR 16,019, ,440 H. Lundbeck AS DNK DKK 12,199, ,606 Ipsen SA FRA EUR 10,333, ,993 Perrigo Co. PLC USA USD 9,192, ,258 Pfizer Inc. USA USD 8,885, ,380 UCB SA BEL EUR 8,746, ,601 GlaxoSmithKline PLC GBR GBP 7,133, ,245 Merck & Co. Inc. USA USD 4,670, ,242, Software 958,534 Microsoft Corp. USA USD 44,523, ,903 SAP SE DEU EUR 18,885, ,409, Specialty Retail 336,690 Best Buy Co. Inc. USA USD 13,124, ,383,170 Kingfisher PLC GBR GBP 12,648, ,772, Technology Hardware, Storage & Peripherals 26,821 Samsung Electronics Co. Ltd. KOR KRW 32,540, ,750 Hewlett-Packard Co. USA USD 17,968, ,000 Konica Minolta Inc. JPN JPY 9,808, ,316, Wireless Telecommunication Services 5,618,022 Vodafone Group PLC GBR GBP 19,497, ,654 Turkcell Iletisim Hizmetleri AS, ADR TUR USD 10,185, ,500 China Mobile Ltd. CHN HKD 8,977, ,660, TOTAL SHARES 1,500,831, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,500,831, TOTAL INVESTMENTS 1,500,831, Unaudited Semi-Annual Report 367

370 Templeton Global (Euro) Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 787,950 TNT Express NV NLD EUR 4,366, ,951 Royal Mail PLC GBR GBP 2,486, ,852, Airlines 1,890,450 International Consolidated Airlines Group SA GBR GBP 11,837, ,190 Deutsche Lufthansa AG DEU EUR 8,494, ,331, Auto Components 102,360 Cie Generale des Etablissements Michelin, B FRA EUR 7,704, Automobiles 132,490 Toyota Motor Corp. JPN JPY 6,906, ,600 Mazda Motor Corp. JPN JPY 5,948, ,920 General Motors Co. USA USD 5,854, ,709, Banks 271,082 JPMorgan Chase & Co. USA USD 14,020, ,672 ING Groep NV, IDR NLD EUR 10,035, ,707,133 UniCredit SpA ITA EUR 9,107, ,080 Citigroup Inc. USA USD 8,455, ,212,440 Lloyds Banking Group PLC GBR GBP 7,044, ,718,760 Intesa Sanpaolo SpA ITA EUR 6,584, ,600 HSBC Holdings PLC GBR HKD 5,734, ,810 Credit Agricole SA FRA EUR 5,668, ,000 DBS Group Holdings Ltd. SGP SGD 5,435, ,087, Beverages 218,200 Suntory Beverage & Food Ltd. JPN JPY 6,275, Biotechnology 96,807 Amgen Inc. USA USD 12,744, ,872 Basilea Pharmaceutica AG CHE CHF 4,126, ,870, Building Products 77,010 Compagnie de Saint-Gobain FRA EUR 2,713, Capital s 180,280 Morgan Stanley USA USD 5,780, ,224 UBS Group AG CHE CHF 4,634, ,330 AllianceBernstein Holding LP USA USD 4,084, ,933 Credit Suisse Group AG CHE CHF 3,417, ,917, Chemicals 118,890 LyondellBasell Industries NV, A USA USD 7,800, ,340 Akzo Nobel NV NLD EUR 7,283, ,190 The Dow Chemical Co. USA USD 4,794, ,878, Commercial Services & Supplies 155,620 The ADT Corp. USA USD 4,659, Communications Equipment 196,404 Cisco Systems Inc. USA USD 4,514, Construction Materials 104,770 HeidelbergCement AG DEU EUR 6,161, ,460 CRH PLC IRL EUR 3,392, ,553, Consumer Finance 99,476 American Express Co. USA USD 7,648, ,950 Capital One Financial Corp. USA USD 4,226, ,875, Diversified Financial Services 315,150 Voya Financial Inc. USA USD 11,038, Unaudited Semi-Annual Report

371 Templeton Global (Euro) Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Diversified Telecommunication Services 3,463,882 Singapore Telecommunications Ltd. SGP SGD 8,427, ,452 Vivendi SA FRA EUR 7,726, ,437 Telefonica SA ESP EUR 7,669, ,548 Telenor ASA NOR NOK 6,427, ,056,000 China Telecom Corp. Ltd., H CHN HKD 4,823, ,828 Verizon Communications Inc. USA USD 2,506, ,581, Electric Utilities 588,000 Centrais Eletricas Brasileiras SA BRA BRL 1,060, Electrical Equipment 455,150 ABB Ltd. CHE CHF 7,998, ,100 Babcock & Wilcox Co. USA USD 3,282, ,557,998 Dongfang Electric Corp. Ltd., H CHN HKD 2,367, ,649, Energy Equipment & Services 404,790 Noble Corp. PLC USA USD 5,543, ,920 Baker Hughes Inc. USA USD 4,769, ,621 Halliburton Co. USA USD 3,693, ,350 Technip SA FRA EUR 2,636, ,805 Saipem SpA ITA EUR 874, ,516, Food & Staples Retailing 3,596,168 Tesco PLC GBR GBP 8,755, ,440 Metro AG DEU EUR 6,060, ,815, Health Care Equipment & Supplies 359,500 Medtronic Inc. USA USD 21,451, Household Durables 328,000 Nikon Corp. JPN JPY 3,628, Independent Power and Renewable Electricity Producers 2,634,000 China Resources Power Holdings Co. Ltd. CHN HKD 5,656, Industrial Conglomerates 86,322 Koninklijke Philips NV NLD EUR 2,084, Insurance 2,496,800 AIA Group Ltd. HKG HKD 11,443, ,251 AXA SA FRA EUR 10,702, ,687,000 China Life Insurance Co. Ltd., H CHN HKD 8,677, ,326,073 Aviva PLC GBR GBP 8,276, ,030 NN Group NV NLD EUR 8,100, ,530 Aegon NV NLD EUR 4,578, ,494 Swiss Re AG CHE CHF 4,345, ,000 UNIQA Insurance Group AG AUT EUR 2,286, ,409, Life Sciences Tools & Services 13,500 QIAGEN NV NLD EUR 261, Machinery 10,800,000 China CNR Corp. Ltd., H, Reg S CHN HKD 12,777, ,750 Navistar International Corp. USA USD 5,859, ,570 SPX Corp. USA USD 1,602, ,238, Media 119,195 Time Warner Cable Inc. USA USD 14,979, ,160 Sky PLC GBR GBP 7,436, ,568 Reed Elsevier NV GBR EUR 4,455, ,080 Comcast Corp., Special A USA USD 3,714, ,200 News Corp., A USA USD 3,438, ,024, Metals & Mining 19,311 POSCO KOR KRW 4,019, ,670 Allegheny Technologies Inc. USA USD 3,697, ,717, Multi-Utilities 151,675 E.ON SE DEU EUR 2,153, Unaudited Semi-Annual Report 369

372 Templeton Global (Euro) Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Multiline Retail 193,550 Macy s Inc. USA USD 10,517, ,070 Marks & Spencer Group PLC GBR GBP 5,631, ,148, Oil, Gas & Consumable Fuels 226,674 Total SA, B FRA EUR 9,638, ,234,332 BP PLC GBR GBP 6,535, ,246 Chesapeake Energy Corp. USA USD 5,454, ,081 Eni SpA ITA EUR 5,253, ,900 Suncor Energy Inc. CAN CAD 5,118, ,200 Talisman Energy Inc. CAN CAD 4,988, ,109 Petroleo Brasileiro SA, ADR, pfd. BRA USD 3,007, ,070 Galp Energia SGPS SA, B PRT EUR 2,184, ,240 Chevron Corp. USA USD 1,505, ,354,000 Kunlun Energy Co. Ltd. CHN HKD 1,062, ,900 Petroleo Brasileiro SA, pfd. BRA BRL 697, ,445, Pharmaceuticals 90,976 Actavis PLC USA USD 19,353, ,822 Roche Holding AG CHE CHF 12,748, ,839 Pfizer Inc. USA USD 11,451, ,918 Merck KGaA DEU EUR 10,972, ,623 Merck & Co. Inc. USA USD 9,979, ,260 Bayer AG DEU EUR 9,860, ,639 Sanofi FRA EUR 7,992, ,592 GlaxoSmithKline PLC GBR GBP 7,277, ,718 Perrigo Co. PLC USA USD 6,730, ,367, Semiconductors & Semiconductor Equipment 467,380 Applied Materials Inc. USA USD 9,625, ,942,000 GCL-Poly Energy Holdings Ltd. CHN HKD 6,355, ,980, Software 414,541 Microsoft Corp. USA USD 15,913, ,210 Software AG DEU EUR 4,508, ,965 SAP SE DEU EUR 3,260, ,682, Specialty Retail 869,510 Kingfisher PLC GBR GBP 3,813, ,930 Abercrombie & Fitch Co., A USA USD 1,323, ,137, Technology Hardware, Storage & Peripherals 10,029 Samsung Electronics Co. Ltd. KOR KRW 10,055, ,100 Konica Minolta Inc. JPN JPY 6,955, ,580 Hewlett-Packard Co. USA USD 6,585, ,597, Wireless Telecommunication Services 1,710,347 Sprint Corp. USA USD 5,866, ,344,518 Vodafone Group PLC GBR GBP 3,856, ,722, TOTAL SHARES 707,315, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 707,315, TOTAL INVESTMENTS 707,315, Unaudited Semi-Annual Report

373 Templeton Global Balanced Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 1,063,245 BAE Systems PLC GBR GBP 7,822, Air Freight & Logistics 1,390,980 TNT Express NV NLD EUR 9,325, Airlines 534,513 Deutsche Lufthansa AG DEU EUR 8,944, ,259,814 Qantas Airways Ltd. AUS AUD 8,347, ,292, Auto Components 91,914 Cie Generale des Etablissements Michelin, B FRA EUR 8,371, ,881 Hyundai Mobis Co. Ltd. KOR KRW 6,663, ,724 Unipres Corp. JPN JPY 5,768, ,400 Keihin Corp. JPN JPY 4,200, ,003, Automobiles 1,398,500 Nissan Motor Co. Ltd. JPN JPY 12,336, ,431 Toyota Motor Corp. JPN JPY 9,488, ,824, Banks 226,943 JPMorgan Chase & Co. USA USD 14,202, ,876 Citigroup Inc. USA USD 13,574, ,170,522 HSBC Holdings PLC GBR HKD 11,163, ,654 Credit Agricole SA FRA EUR 10,997, ,517,442 UniCredit SpA ITA EUR 9,795, ,745 BNP Paribas SA FRA EUR 9,342, ,469 United Overseas Bank Ltd. SGP SGD 9,248, ,405,545 Barclays PLC GBR GBP 9,130, ,784 ING Groep NV, IDR NLD EUR 7,440, ,483 KB Financial Group Inc. KOR KRW 6,460, ,447 KBC GROEP NV BEL EUR 5,876, ,655 Hana Financial Group Inc. KOR KRW 5,402, ,184,406 Lloyds Banking Group PLC GBR GBP 4,945, ,579, Beverages 334,122 Suntory Beverage & Food Ltd. JPN JPY 11,627, Biotechnology 123,095 Amgen Inc. USA USD 19,607, ,589 Gilead Sciences Inc. USA USD 10,801, ,093 Isis Pharmaceuticals Inc. USA USD 6,241, ,650, Building Products 196,609 Compagnie de Saint-Gobain FRA EUR 8,381, Capital s 287,341 Morgan Stanley USA USD 11,148, ,747 Credit Suisse Group AG CHE CHF 10,311, ,158 The Bank of New York Mellon Corp. USA USD 8,728, ,188, Chemicals 127,589 Akzo Nobel NV NLD EUR 8,900, Communications Equipment 411,697 Cisco Systems Inc. USA USD 11,451, Construction & Engineering 255,753 KBR Inc. USA USD 4,335, Construction Materials 397,720 CRH PLC IRL EUR 9,576, Consumer Finance 118,798 Capital One Financial Corp. USA USD 9,806, Diversified Financial Services 132,009 Deutsche Boerse AG DEU EUR 9,459, ,649 BM&F BOVESPA SA BRA BRL 3,386, ,845, Diversified Telecommunication Services 19,356,817 China Telecom Corp. Ltd., H CHN HKD 11,233, ,595,742 Singapore Telecommunications Ltd. SGP SGD 10,585, Unaudited Semi-Annual Report 371

374 Templeton Global Balanced Fund Schedule of Investments as of December 31, 2014 (continued) face Diversified Telecommunication Services (continued) 371,427 Telenor ASA NOR NOK 7,531, ,852 Orange SA FRA EUR 6,931, ,841 Telefonica SA ESP EUR 5,478, ,761, Electric Utilities 2,512,695 Power Grid Corp. of India Ltd. IND INR 5,500, Electronic Equipment, Instruments & Component 211,979 Knowles Corp. USA USD 4,992, Energy Equipment & Services 105,168 Technip SA FRA EUR 6,288, ,395 Noble Corp. PLC USA USD 6,286, ,973 Baker Hughes Inc. USA USD 5,773, ,041 Halliburton Co. USA USD 4,367, ,823 SBM Offshore NV NLD EUR 4,069, ,110 Petrofac Ltd. GBR GBP 3,617, ,849 Saipem SpA ITA EUR 1,249, ,833 Paragon Offshore PLC USA USD 290, ,942, Food & Staples Retailing 95,303 CVS Health Corp. USA USD 9,178, ,020,320 Tesco PLC GBR GBP 8,897, ,971 Walgreens Boots Alliance Inc. USA USD 6,322, ,398, Health Care Equipment & Supplies 150,309 Medtronic Inc. USA USD 10,852, ,666 Getinge AB, B SWE SEK 7,743, ,595, Household Durables 387,301 Nikon Corp. JPN JPY 5,184, Industrial Conglomerates 48,386 Siemens AG DEU EUR 5,488, ,481 General Electric Co. USA USD 4,459, ,948, Insurance 444,135 AXA SA FRA EUR 10,320, ,298,128 Aviva PLC GBR GBP 9,803, ,840 American International Group Inc. USA USD 7,776, ,977 Aegon NV NLD EUR 7,542, ,128 Swiss Re AG CHE CHF 3,712, ,600 NN Group NV NLD EUR 2,994, ,150, Life Sciences Tools & Services 183,113 QIAGEN NV NLD EUR 4,289, Machinery 249,742 Navistar International Corp. USA USD 8,361, ,482,800 CSR Corp. Ltd, H CHN HKD 3,342, ,704, Media 270,369 Comcast Corp., Special A USA USD 15,563, ,832 Twenty-First Century Fox Inc., A USA USD 8,097, ,938 Sky PLC GBR GBP 7,594, ,877 Reed Elsevier NV GBR EUR 6,670, ,647 News Corp., A USA USD 323, ,249, Metals & Mining 337,461 Allegheny Technologies Inc. USA USD 11,733, ,460 POSCO, ADR KOR USD 6,474, ,207, Multiline Retail 193,431 Macy s Inc. USA USD 12,718, ,066,960 Marks & Spencer Group PLC GBR GBP 7,962, ,680, Oil, Gas & Consumable Fuels 290,049 Suncor Energy Inc. CAN CAD 9,216, ,632 Eni SpA ITA EUR 8,894, ,544 Total SA, B FRA EUR 7,951, Unaudited Semi-Annual Report

375 Templeton Global Balanced Fund Schedule of Investments as of December 31, 2014 (continued) face Oil, Gas & Consumable Fuels (continued) 171,236 LUKOIL Holdings, ADR RUS USD 6,815, ,592,200 Kunlun Energy Co. Ltd. CHN HKD 5,308, ,617 BP PLC GBR GBP 5,096, ,069 Royal Dutch Shell PLC, B GBR GBP 4,457, ,480 Petroleo Brasileiro SA, ADR, pfd. BRA USD 4,180, ,417 Chesapeake Energy Corp. USA USD 2,884, ,805, Pharmaceuticals 689,088 GlaxoSmithKline PLC GBR GBP 14,779, ,878 Teva Pharmaceutical Industries Ltd., ADR ISR USD 14,140, ,343 Actavis PLC USA USD 13,216, ,355 Roche Holding AG CHE CHF 12,855, ,220 Sanofi FRA EUR 12,745, ,487 Pfizer Inc. USA USD 9,796, ,010 Merck KGaA DEU EUR 8,445, ,510 Merck & Co. Inc. USA USD 5,991, ,971, Software 345,000 Microsoft Corp. USA USD 16,025, ,267 SAP SE DEU EUR 6,363, ,153 Symantec Corp. USA USD 4,006, ,246 Oracle Corp. USA USD 3,428, ,823, Specialty Retail 1,795,749 Kingfisher PLC GBR GBP 9,530, Technology Hardware, Storage & Peripherals 14,117 Samsung Electronics Co. Ltd. KOR KRW 17,127, Companies & Distributors 452,086 ITOCHU Corp. JPN JPY 4,874, Transportation Infrastructure 1,860,205 China Merchants Holdings International Co. Ltd. CHN HKD 6,249, Wireless Telecommunication Services 1,424,852 Vodafone Group PLC GBR GBP 4,944, ,761 China Mobile Ltd. CHN HKD 2,500, ,443 Sprint Corp. USA USD 2,375, ,296 Mobile TeleSystems, ADR RUS USD 1,043, ,864, TOTAL SHARES 845,464, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 845,464, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Government and Municipal Bonds 2,582,300 Government of Mexico, 7.25%, 12/15/16 MEX MXN 18,704, ,343,290 Government of Mexico, 6.25%, 06/16/16 MEX MXN 16,501, ,900,000 Government of Poland, 5.75%, 09/23/22 POL PLN 11,856, ,200,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 11,492, ,000,000 Inter-American Development Bank, senior note, 7.50%, 12/05/24 SP MXN 7,280, ,710,000 Government of Malaysia, senior bond, 4.24%, 02/07/18 MYS MYR 7,178, ,580,000 Government of Portugal, Reg S, 3.875%, 02/15/30 PRT EUR 7,095, ,410,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 6,681, ,300,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 5,336, ,900,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 4,773, ,700,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 4,317, ,556,000,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 4,237, ,362,500,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 4,025, ,723,675 Government of Russia, senior bond, Reg S, 7.50%, 03/31/30 RUS USD 3,891, ,415,000 Government of Malaysia, senior bond, 3.814%, 02/15/17 MYS MYR 3,564, ,300,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 3,289, ,545,000 Government of Poland, 4.75%, 10/25/16 POL PLN 2,540, ,597,020,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 1,473, ,000 Government of Hungary, senior note, Reg S, 5.75%, 06/11/18 HUN EUR 1,361, ,000,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 1,346, ,000,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 1,309, ,105,000 Government of Poland, 5.00%, 04/25/16 POL PLN 913, ,978,000 Government of Poland, Strip, 01/25/16 POL PLN 825, ,000,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 767, ,000 Government of Hungary, senior note, Reg S, 4.375%, 07/04/17 HUN EUR 682, ,160,000 Korea Moary Stabilization Bond, senior note, 2.78%, 02/02/16 KOR KRW 653, ,000 Government of Hungary, senior note, Reg S, 3.875%, 02/24/20 HUN EUR 572, Unaudited Semi-Annual Report 373

376 Templeton Global Balanced Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 251,910 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 420, ,000 Government of Hungary, senior note, Reg S, 3.50%, 07/18/16 HUN EUR 170, ,700,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 165, ,700,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 161, ,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 154, ,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 154, ,600,000 Korea Moary Stabilization Bond, senior note, 2.79%, 06/02/16 KOR KRW 119, ,700,000 Korea Moary Stabilization Bond, senior note, 2.22%, 10/02/16 KOR KRW 118, ,700,000 Korea Moary Stabilization Bond, senior note, 2.07%, 12/02/16 KOR KRW 72, ,000 Government of Poland, 4.75%, 04/25/17 POL PLN 9, ,217, Securities Maturing Within One Year 25,000,000 FHLB, 0.00%, 01/07/15 USA USD 24,999, ,130,000 Government of Sweden, 4.50%, 08/12/15 SWE SEK 13,047, ,910,100,000 Korea Moary Stabilization Bond, senior note, 2.90%, 12/02/15 KOR KRW 11,891, ,204,980,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 8,420, ,827,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 3,126, ,190 Government of Mexico, 8.00%, 12/17/15 MEX MXN 2,941, ,500,000 FHLB, 0.00%, 01/02/15 USA USD 2,500, ,590,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 2,426, ,400,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 2,409, ,544,150 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 2,389, ,571,940 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 2,389, ,314,460 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 2,185, ,109,020 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 2,089, ,990 Government of Mexico, 6.00%, 06/18/15 MEX MXN 2,047, ,740,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 1,919, ,685,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 1,913, ,664,870 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 1,766, ,600,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 1,592, ,640,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 1,584, ,485,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 1,537, ,200,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 1,484, ,840,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 1,381, ,001,200 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 1,347, ,440,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 1,237, ,320,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 1,222, ,776,580 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 1,176, ,070,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 1,162, ,235,250,000 Korea Moary Stabilization Bond, senior note, 2.66%, 06/09/15 KOR KRW 1,132, ,560,000 Government of Poland, 6.25%, 10/24/15 POL PLN 1,041, ,640,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 1,027, ,582,000 Government of Poland, 5.50%, 04/25/15 POL PLN 1,024, ,038,990,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 953, ,120,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 891, ,200,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 823, ,460,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 699, ,140,000 Bank of Negara Moary Note, 0.00%, 05/05/15 MYS MYR 605, ,090,000 Bank of Negara Moary Note, 0.00%, 08/04/15 MYS MYR 586, ,800,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 510, ,560,000 Bank of Negara Moary Note, 0.00%, 06/30/15 MYS MYR 438, ,420,000 Bank of Negara Moary Note, 0.00%, 04/16/15 MYS MYR 402, ,130,000 Bank of Negara Moary Note, 0.00%, 06/16/15 MYS MYR 318, ,100,000 Bank of Negara Moary Note, 0.00%, 06/04/15 MYS MYR 310, ,080,000 Bank of Negara Moary Note, 0.00%, 03/12/15 MYS MYR 306, ,000 Bank of Negara Moary Note, 0.00%, 02/10/15 MYS MYR 270, ,000 Bank of Negara Moary Note, 0.00%, 08/18/15 MYS MYR 268, ,000 Bank of Negara Moary Note, 0.00%, 09/08/15 MYS MYR 265, ,000 Bank of Negara Moary Note, 0.00%, 09/22/15 MYS MYR 245, ,500,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 239, ,000 Government of Poland, Strip, 07/25/15 POL PLN 236, ,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 222, ,000 Bank of Negara Moary Note, 0.00%, 04/28/15 MYS MYR 178, ,000 Bank of Negara Moary Note, 0.00%, 04/07/15 MYS MYR 170, ,100,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 164, ,000 Bank of Negara Moary Note, 0.00%, 06/03/15 MYS MYR 160, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 133, ,000 Bank of Negara Moary Note, 0.00%, 10/27/15 MYS MYR 108, ,500,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 64, ,660 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 5, ,997, TOTAL BONDS 250,215, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 250,215, TOTAL INVESTMENTS 1,095,680, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report

377 Templeton Global Bond Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Government and Municipal Bonds 598,571,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 906,950, ,220,350 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 836,264, ,918,232,000 Government of Poland, Strip, 01/25/16 POL PLN 809,143, ,084,000 Government of Hungary, senior note, 6.375%, 03/29/21 HUN USD 784,030, ,112,400,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 609,739, ,649,780,000 Government of Poland, 4.75%, 10/25/16 POL PLN 490,490, ,472,082,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 416,061, ,493,365,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 415,525, ,016,660 Government of Russia, senior bond, Reg S, 7.50%, 03/31/30 RUS USD 408,671, ,690,000 Government of Portugal, Reg S, 5.125%, 10/15/24 PRT USD 387,692, ,795,000 Government of Hungary, senior note, 6.25%, 01/29/20 HUN USD 342,036, ,521,000 Government of Ireland, 5.90%, 10/18/19 IRL EUR 323,463, ,723,010,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 306,801, ,441,200,000 Korea Moary Stabilization Bond, senior note, 2.07%, 12/02/16 KOR KRW 295,628, ,905,220 Government of Mexico, 7.25%, 12/15/16 MEX MXN 274,555, ,710 Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 248,674, ,201,000 Government of Ireland, 4.50%, 04/18/20 IRL EUR 245,342, ,708,320,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 238,031, ,666,000,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 223,815, ,364,290,000 Korea Moary Stabilization Bond, senior note, 2.78%, 02/02/16 KOR KRW 216,784, ,400,000 Government of Ukraine, senior note, Reg S, 7.95%, 02/23/21 UKR USD 212,588, ,999,170 Government of Mexico, 6.25%, 06/16/16 MEX MXN 211,259, ,021,000 Government of Hungary, 6.00%, 01/11/19 HUN EUR 211,181, ,790,000 Government of Poland, 5.00%, 04/25/16 POL PLN 209,334, ,310,430,000,000 Government of Indonesia, FR46, 9.50%, 07/15/23 IDN IDR 205,811, ,147 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 195,042, ,458 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 191,763, ,890 Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 176,606, ,560 Nota Do Tesouro Nacional, 10.00%, 01/01/23 BRA BRL 173,679, ,010,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 169,131, ,535 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 163,832, ,180 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 162,251, ,658,000,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 161,277, ,646,800,000,000 Government of Indonesia, FR40, 11.00%, 09/15/25 IDN IDR 160,757, ,570,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 160,266, ,350 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 158,029, ,450,000 Government of Poland, 5.75%, 09/23/22 POL PLN 157,198, ,798,600,000 Korea Moary Stabilization Bond, senior note, 2.22%, 10/02/16 KOR KRW 152,857, ,410,000 Government of Slovenia, senior note, Reg S, 5.50%, 10/26/22 SVN USD 147,161, ,245,000 Government of Slovenia, senior note, Reg S, 5.85%, 05/10/23 SVN USD 146,566, ,589,090,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 144,919, ,350,400 Government of Mexico, 7.75%, 12/14/17 MEX MXN 143,550, ,750,000,000 Inter-American Development Bank, senior note, 7.50%, 12/05/24 SP MXN 138,492, ,530,000 Government of Serbia, senior note, Reg S, 4.875%, 02/25/20 SER USD 130,009, ,630,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 124,433, ,853,000 Government of Ukraine, senior note, Reg S, 6.25%, 06/17/16 UKR USD 117,205, ,840 Nota Do Tesouro Nacional, senior note, 10.00%, 01/01/19 BRA BRL 116,384, ,530,000 Government of Peru, senior bond, 7.84%, 08/12/20 PER PEN 112,197, ,430,000 Financing of Infrastructure Projects State Enterprise, Reg S, 7.40%, 04/20/18 UKR USD 111,635, ,340,000 Government of Poland, 4.75%, 04/25/17 POL PLN 109,003, ,750 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 104,034, ,485,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 101,095, ,585,360,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 101,081, ,620,000 Government of Singapore, senior note, 1.125%, 04/01/16 SGP SGD 95,455, ,386,170,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 92,929, ,033,000,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 91,868, ,383,990,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 86,428, ,076,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 79,345, ,577,370,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 75,382, ,388,000 Government of Hungary, senior note, Reg S, 4.375%, 07/04/17 HUN EUR 73,290, ,573,571 Mexican Udibonos, Index Linked, 5.00%, 06/16/16 MEX MXN 69,008, ,990,000 Government of Serbia, senior note, Reg S, 5.25%, 11/21/17 SER USD 68,857, ,998,000,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 66,980, ,090,000 Government of Hungary, 4.125%, 02/19/18 HUN USD 64,494, ,018,090,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 62,279, ,040 Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 61,372, ,990,000,000 Government of Indonesia, FR42, 10.25%, 07/15/27 IDN IDR 60,769, ,855,000,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 60,583, ,366,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 59,932, ,698,590,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 59,678, ,910,000,000 Government of Indonesia, FR34, 12.80%, 06/15/21 IDN IDR 57,921, ,642,000,000 Government of Indonesia, FR47, 10.00%, 02/15/28 IDN IDR 55,811, ,402,126 Mexican Udibonos, Index Linked, 3.50%, 12/14/17 MEX MXN 53,619, ,197,900,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 52,779, ,287,720,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 51,151, ,085,000 Government of Hungary, senior note, Reg S, 5.75%, 06/11/18 HUN EUR 49,864, Unaudited Semi-Annual Report 375

378 Templeton Global Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 11,547,270,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 48,420, ,894,600,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 46,149, ,515,000,000 Government of Indonesia, FR36, 11.50%, 09/15/19 IDN IDR 42,026, ,744,090,000 Government of Sri Lanka, 10.60%, 09/15/19 LKA LKR 40,949, ,223,360,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 40,939, ,961,760,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 40,717, ,945,160,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 39,239, ,825,000 Government of Ukraine, senior note, Reg S, 6.75%, 11/14/17 UKR USD 39,071, ,692,000,000 Government of Indonesia, 7.875%, 04/15/19 IDN IDR 37,989, ,618,890,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 36,727, ,708,000,000 Korea Treasury Bond, senior bond, 5.00%, 09/10/16 KOR KRW 34,219, ,849,300,000 Government of Sri Lanka, 10.60%, 07/01/19 LKA LKR 33,078, ,304,204 Mexican Udibonos, Index Linked, 4.00%, 06/13/19 MEX MXN 31,892, ,743,000,000 Government of Indonesia, FR35, 12.90%, 06/15/22 IDN IDR 28,752, ,515,000 Government of Hungary, senior note, Reg S, 3.875%, 02/24/20 HUN EUR 24,367, ,395,540 Mexican Udibonos, Index Linked, 2.50%, 12/10/20 MEX MXN 23,611, ,829,400,000 Korea Treasury Bond, senior bond, 4.00%, 03/10/16 KOR KRW 21,339, ,950,000,000 Government of Indonesia, FR48, 9.00%, 09/15/18 IDN IDR 21,043, ,120 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 20,748, ,900,000 Government of Ukraine, senior bond, Reg S, 6.58%, 11/21/16 UKR USD 20,643, ,980 Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 20,058, ,164,700,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 18,890, ,137,400,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 18,393, ,220 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 17,064, ,030,000,000 Government of Indonesia, senior bond, FR53, 8.25%, 07/15/21 IDN IDR 16,648, ,583,000,000 Government of Indonesia, FR43, 10.25%, 07/15/22 IDN IDR 15,507, ,927,820,000 Government of Sri Lanka, B, 8.50%, 07/15/18 LKA LKR 15,325, ,795,000,000 Government of Indonesia, FR39, 11.75%, 08/15/23 IDN IDR 13,333, ,828,660,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 13,173, ,260,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 11,555, ,450,500,000 Government of Sri Lanka, A, 6.40%, 08/01/16 LKA LKR 11,047, ,750,000,000 Government of Indonesia, FR30, 10.75%, 05/15/16 IDN IDR 10,955, ,100,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 10,760, ,450,000,000 Government of Indonesia, FR45, 9.75%, 05/15/37 IDN IDR 9,338, ,215,800,000 Government of Sri Lanka, B, 6.40%, 10/01/16 LKA LKR 9,235, ,300,000,000 Government of Indonesia, FR28, 10.00%, 07/15/17 IDN IDR 7,881, ,090,000 Government of Sri Lanka, 11.20%, 07/01/22 LKA LKR 7,365, ,000,000 Government of Sri Lanka, A, 5.80%, 01/15/17 LKA LKR 6,775, ,280,000 Government of Korea, senior bond, 5.625%, 11/03/25 KOR USD 6,662, ,440,000 Government of the Philippines, senior bond, 9.125%, 09/04/16 PHL PHP 5,963, ,700,000 Government of Sri Lanka, A, 7.50%, 08/15/18 LKA LKR 5,690, ,730,000,000 Government of Indonesia, senior note, 8.50%, 10/15/16 IDN IDR 5,640, ,640,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 5,321, ,560,000 Government of Hungary, senior note, Reg S, 3.50%, 07/18/16 HUN EUR 4,483, ,000,000 Government of Sri Lanka, B, 5.80%, 07/15/17 LKA LKR 4,379, ,320,000 Financing of Infrastructure Projects State Enterprise, Reg S, 8.375%, 11/03/17 UKR USD 3,210, ,045 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/17 BRA BRL 2,887, ,435,000 Government of Vietnam, Reg S, 6.75%, 01/29/20 VND USD 2,745, ,100,000 Government of Sri Lanka, 8.00%, 01/01/17 LKA LKR 2,707, ,850,000 Government of Sri Lanka, 8.25%, 03/01/17 LKA LKR 2,483, ,800,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 2,316, ,585,000 The Export-Import Bank of Korea, senior note, 4.625%, 02/20/17 KOR EUR 2,083, ,850,000,000 Government of Indonesia, FR32, 15.00%, 07/15/18 IDN IDR 182, ,372,142, Securities Maturing Within One Year 118,198,430 Government of Mexico, 8.00%, 12/17/15 MEX MXN 837,344, ,217,400,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 769,450, ,473,920,000 Government of Sweden, 4.50%, 08/12/15 SWE SEK 720,475, ,505,000 Government of Canada, 1.00%, 02/01/15 CAN CAD 623,900, ,832,372,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 529,163, ,739,670 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 501,383, ,613,640,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 497,268, ,629,600,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 491,887, ,916,280,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 428,241, ,201,070 Government of Mexico, 6.00%, 06/18/15 MEX MXN 420,515, ,434,000 Canada Treasury Bill, 0.00%, 03/12/15 CAN CAD 399,290, ,310,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/30/15 SGP SGD 396,323, ,552,000 Canada Treasury Bill, 0.00%, 02/12/15 CAN CAD 388,453, ,000,000 FHLB, 0.00%, 01/07/15 USA USD 351,999, ,189,659,000 Government of Poland, 6.25%, 10/24/15 POL PLN 348,071, ,327,670 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 344,623, ,147,483,000 Government of Poland, 5.50%, 04/25/15 POL PLN 328,141, ,123,190,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 307,678, ,040,425,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 297,752, ,970,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 276,747, ,295,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 275,441, Unaudited Semi-Annual Report

379 Templeton Global Bond Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 904,701,000 Government of Poland, Strip, 07/25/15 POL PLN 253,250, ,840 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 238,505, ,000,400,000 Korea Moary Stabilization Bond, 0.00%, 01/13/15 KOR KRW 221,155, ,007,800,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 191,137, ,160,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 183,632, ,280,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 170,292, ,680,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 163,383, ,334,250 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 161,925, ,653,550 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 156,176, ,470,360 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 156,166, ,055,800,000 Korea Moary Stabilization Bond, senior note, 2.13%, 10/08/15 KOR KRW 153,721, ,725,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 150,449, ,085,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 149,073, ,640,820 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 142,845, ,590,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 134,671, ,950,440 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 132,246, ,595,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 128,921, ,250,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 124,915, ,742,000,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 115,592, ,526,430 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 112,602, ,670,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 103,806, ,335,000 Moary Authority of Singapore Treasury Bill, 0.00%, 02/13/15 SGP SGD 94,538, ,020,000 Bank of Negara Moary Note, 0.00%, 06/30/15 MYS MYR 85,239, ,130,000 Bank of Negara Moary Note, 0.00%, 08/04/15 MYS MYR 76,043, ,335,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 75,559, ,910,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 74,711, ,620 Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 73,117, ,280,775,000 Government of Sri Lanka, B, 11.00%, 09/01/15 LKA LKR 73,027, ,200,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 65,296, ,440,000 Bank of Negara Moary Note, 0.00%, 03/12/15 MYS MYR 64,921, ,880,000 Bank of Negara Moary Note, 0.00%, 06/16/15 MYS MYR 63,629, ,729,230 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 63,370, ,450,200,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 63,302, ,580,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 58,577, ,489,000,000 Korea Treasury Bond, senior note, 4.00%, 09/10/15 KOR KRW 56,020, ,862,030,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 55,055, ,555,500 Mexico Treasury Bill, 0.00%, 07/23/15 MEX MXN 50,343, ,434 Letra Tesouro Nacional, Strip, 01/01/15 BRA BRL 46,803, ,680,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 39,369, ,535,000 Government of Canada, 1.50%, 08/01/15 CAN CAD 39,326, ,060,000 Bank of Negara Moary Note, 0.00%, 04/28/15 MYS MYR 35,387, ,190,000 Bank of Negara Moary Note, 0.00%, 06/03/15 MYS MYR 34,461, ,350,000 Government of Ukraine, senior bond, Reg S, 4.95%, 10/13/15 UKR EUR 33,186, ,485,000 Canada Treasury Bill, 0.00%, 04/23/15 CAN CAD 27,895, ,510,000 Bank of Negara Moary Note, 0.00%, 09/22/15 MYS MYR 27,204, ,760,000 Bank of Negara Moary Note, 0.00%, 04/16/15 MYS MYR 25,710, ,737,630,000 Government of Sri Lanka, A, 6.50%, 07/15/15 LKA LKR 20,937, ,280,000 Bank of Negara Moary Note, 0.00%, 10/27/15 MYS MYR 19,542, ,935,000 Bank of Negara Moary Note, 0.00%, 04/07/15 MYS MYR 18,693, ,190,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/20/15 SGP SGD 18,253, ,863,850,000 Government of Sri Lanka, A, 8.50%, 11/01/15 LKA LKR 14,467, ,414,700,000 Korea Treasury Bond, senior note, 4.50%, 03/10/15 KOR KRW 10,480, ,300,000 Government of the Philippines, 4.625%, 11/25/15 PHL PHP 10,051, ,610,000 Philippine Treasury Bill, 0.00%, 12/02/15 PHL PHP 7,911, ,180,000 Philippine Treasury Bill, 0.00%, 04/08/15 PHL PHP 7,469, ,920,000 Philippine Treasury Bill, 0.00%, 09/02/15 PHL PHP 6,765, ,730,000 Philippine Treasury Bill, 0.00%, 10/07/15 PHL PHP 6,705, ,300,000 Government of Ukraine, senior note, Reg S, 6.875%, 09/23/15 UKR USD 5,834, ,920,000 Philippine Treasury Bill, 0.00%, 08/05/15 PHL PHP 4,965, ,670,000 Philippine Treasury Bill, 0.00%, 06/03/15 PHL PHP 4,223, ,810,000 Bank of Negara Moary Note, 0.00%, 01/29/15 MYS MYR 3,369, ,545,000 The Export-Import Bank of Korea, senior bond, 5.125%, 03/16/15 KOR USD 2,567, ,010,000 Philippine Treasury Bill, 0.00%, 07/08/15 PHL PHP 2,432, ,010,000 Philippine Treasury Bill, 0.00%, 11/04/15 PHL PHP 2,087, ,750,000,000 Government of Indonesia, FR27, 9.50%, 06/15/15 IDN IDR 2,024, ,010,000 Philippine Treasury Bill, 0.00%, 05/06/15 PHL PHP 1,819, ,390,000 Government of Sri Lanka, A, 11.75%, 03/15/15 LKA LKR 1,498, ,452,831, TOTAL BONDS 30,824,974, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 30,824,974, TOTAL INVESTMENTS 30,824,974, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report 377

380 Templeton Global Bond (Euro) Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET BONDS Asset-Backed Securities 145,833 Government of Bosnia & Herzegovina, senior bond, B, Reg S, FRN, 0.938%, 12/11/21 BIH DEM 62, Government and Municipal Bonds 34,929,270 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 48,163, ,403,040,000 Korea Moary Stabilization Bond, senior note, 2.78%, 02/02/16 KOR KRW 31,516, ,200,000 Government of Hungary, senior note, Reg S, 5.75%, 06/11/18 HUN EUR 29,921, ,480,000 Government of Serbia, senior note, Reg S, 4.875%, 02/25/20 SER USD 21,135, ,730,000 Government of Poland, 5.75%, 09/23/22 POL PLN 18,710, ,000,000 Government of Slovenia, senior note, Reg S, 5.50%, 10/26/22 SVN USD 18,370, ,000,000,000 Government of Indonesia, FR40, 11.00%, 09/15/25 IDN IDR 12,827, ,000,000 Government of Portugal, Reg S, 3.875%, 02/15/30 PRT EUR 12,611, ,900,000 Government of Sri Lanka, senior note, Reg S, 5.875%, 07/25/22 LKA USD 12,528, ,830,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 12,129, ,730,865 Government of Russia, senior bond, Reg S, 7.50%, 03/31/30 RUS USD 9,268, ,022,220,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 7,599, ,000,000 Inter-American Development Bank, senior note, 7.50%, 12/05/24 SP MXN 6,867, ,000,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 5,451, ,580 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 5,104, ,364,680,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 4,907, ,350 Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 4,843, ,138,190,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 3,941, ,296,000,000 Government of Indonesia, FR34, 12.80%, 06/15/21 IDN IDR 3,931, ,360 Government of Mexico, 7.25%, 12/15/16 MEX MXN 3,911, ,520,000 Government of Slovenia, senior note, Reg S, 5.85%, 05/10/23 SVN USD 3,324, ,970,260,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 3,026, ,508,000,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 2,696, ,790,000 Government of Poland, 4.75%, 04/25/17 POL PLN 2,682, ,875,000 Government of Hungary, senior note, 6.25%, 01/29/20 HUN USD 2,675, ,790,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 2,591, ,230 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 2,472, ,840 Government of Mexico, 6.25%, 06/16/16 MEX MXN 2,356, ,590,000 Government of Poland, 5.00%, 04/25/16 POL PLN 2,330, ,600,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 2,265, ,600,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 2,046, ,560,000 Government of Hungary, 6.00%, 01/11/19 HUN EUR 1,814, ,520,000 Government of Poland, 4.75%, 10/25/16 POL PLN 1,602, ,400,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 1,560, ,973,000,000 Government of Indonesia, FR35, 12.90%, 06/15/22 IDN IDR 1,543, ,800,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 1,438, ,326,000 Government of Peru, senior bond, 7.84%, 08/12/20 PER PEN 1,371, ,800,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 1,364, ,717,500,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 1,309, ,618 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 1,265, ,335,000,000 Government of Indonesia, 7.875%, 04/15/19 IDN IDR 900, ,600,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 790, ,761,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 747, ,600,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 638, ,500,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 621, ,940,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 544, ,618,000,000 Government of Indonesia, senior bond, FR53, 8.25%, 07/15/21 IDN IDR 521, ,400,000,000 Government of Indonesia, FR28, 10.00%, 07/15/17 IDN IDR 451, ,611,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 376, ,634,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 375, ,200,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 363, ,000 Government of Hungary, senior note, Reg S, 3.875%, 02/24/20 HUN EUR 342, ,990,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 301, ,420,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 267, ,420,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 233, ,691,000,000 Government of Indonesia, senior note, 8.50%, 10/15/16 IDN IDR 182, ,350,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 170, ,000,000 Korea Treasury Bond, senior bond, 5.00%, 09/10/16 KOR KRW 128, ,346,000,000 Government of Indonesia, FR36, 11.50%, 09/15/19 IDN IDR 103, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 85, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 85, ,100,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 77, ,000,000 Government of Indonesia, FR43, 10.25%, 07/15/22 IDN IDR 51, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/17 BRA BRL 39, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 30, ,909, Securities Maturing Within One Year 140,000,000 Government of Poland, 5.50%, 04/25/15 POL PLN 33,087, ,561,700,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 29,923, ,220,000 Government of Ukraine, senior bond, Reg S, 4.95%, 10/13/15 UKR EUR 25,978, ,156,400 Government of Mexico, 8.00%, 12/17/15 MEX MXN 24,334, Unaudited Semi-Annual Report

381 Templeton Global Bond (Euro) Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Securities Maturing Within One Year (continued) 55,515,000 Bank of Negara Moary Note, 0.00%, 05/05/15 MYS MYR 12,974, ,175,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 8,910, ,086,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 7,180, ,643,100,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 5,033, ,088,200,000 Korea Moary Stabilization Bond, senior note, 2.90%, 12/02/15 KOR KRW 3,873, ,899,100 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 3,286, ,945,360 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 3,286, ,059,990,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 3,080, ,520,720 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 3,023, ,516,800 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 3,006, ,365,720 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 2,971, ,170,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 2,860, ,025,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 2,844, ,730,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 2,760, ,500 Government of Mexico, 6.00%, 06/18/15 MEX MXN 2,614, ,410,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 2,467, ,010,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 2,126, ,257,300 Mexico Treasury Bill, 0.00%, 07/23/15 MEX MXN 1,793, ,150,000 Bank of Negara Moary Note, 0.00%, 04/16/15 MYS MYR 1,673, ,840,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 1,366, ,205,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 1,228, ,154,910 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 1,189, ,320,000 Bank of Negara Moary Note, 0.00%, 06/16/15 MYS MYR 1,005, ,410,000 Bank of Negara Moary Note, 0.00%, 08/18/15 MYS MYR 789, ,370,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 785, ,373,890 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 763, ,000,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 708, ,950,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 684, ,890,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 663, ,750,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 645, ,073 Letra Tesouro Nacional, Strip, 01/01/15 BRA BRL 644, ,126,680 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 626, ,390,000 Bank of Negara Moary Note, 0.00%, 04/28/15 MYS MYR 558, ,900,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 501, ,160,000 Bank of Negara Moary Note, 0.00%, 09/22/15 MYS MYR 498, ,890,000 Bank of Negara Moary Note, 0.00%, 06/03/15 MYS MYR 440, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 433, ,080 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 429, ,610,000 Bank of Negara Moary Note, 0.00%, 03/12/15 MYS MYR 378, ,460,000 Bank of Negara Moary Note, 0.00%, 04/07/15 MYS MYR 342, ,430,000 Bank of Negara Moary Note, 0.00%, 10/27/15 MYS MYR 328, ,360,000 Bank of Negara Moary Note, 0.00%, 06/30/15 MYS MYR 316, ,060,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 249, ,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 231, ,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 227, ,000 Bank of Negara Moary Note, 0.00%, 09/08/15 MYS MYR 161, ,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 138, ,000,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 127, ,020,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 108, ,000 Bank of Negara Moary Note, 0.00%, 08/04/15 MYS MYR 104, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 78, ,000 Bank of Negara Moary Note, 0.00%, 01/29/15 MYS MYR 24, ,874, TOTAL BONDS 529,846, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 529,846, TOTAL INVESTMENTS 529,846, Floating Rates are indicated as at December 31, Unaudited Semi-Annual Report 379

382 Templeton Global Equity Income Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 706,887 BAE Systems PLC GBR GBP 5,200, Air Freight & Logistics 596,150 Royal Mail PLC GBR GBP 3,994, ,448 CTT-Correios de Portugal SA PRT EUR 3,515, ,510, Airlines 256,616 Deutsche Lufthansa AG DEU EUR 4,294, Automobiles 117,182 Toyota Motor Corp. JPN JPY 7,391, ,513 Nissan Motor Co. Ltd. JPN JPY 5,553, ,944, Banks 747,113 HSBC Holdings PLC GBR GBP 7,087, ,459 Citigroup Inc. USA USD 6,193, ,415 JPMorgan Chase & Co. USA USD 6,033, ,964 United Overseas Bank Ltd. SGP SGD 5,165, ,657 BNP Paribas SA FRA EUR 4,926, ,229,297 Barclays PLC GBR GBP 4,665, ,517 Credit Agricole SA FRA EUR 4,615, ,129 UniCredit SpA ITA EUR 3,867, ,006 DBS Group Holdings Ltd. SGP SGD 2,348, ,087 Hana Financial Group Inc. KOR KRW 2,284, ,086 ING Groep NV, IDR NLD EUR 1,442, ,630, Biotechnology 53,370 Amgen Inc. USA USD 8,501, Building Products 125,898 Compagnie de Saint-Gobain FRA EUR 5,366, Capital s 222,551 AllianceBernstein Holding LP USA USD 5,748, ,312 Credit Suisse Group AG CHE CHF 4,422, ,374 MLP AG DEU EUR 3,417, ,862 Morgan Stanley USA USD 2,788, ,615 The Bank of New York Mellon Corp. USA USD 2,053, ,430, Communications Equipment 131,075 Cisco Systems Inc. USA USD 3,645, Construction Materials 213,604 CRH PLC IRL EUR 5,143, Distributors 1,238,597 Pacific Brands Ltd. AUS AUD 546, Diversified Financial Services 77,019 Deutsche Boerse AG DEU EUR 5,518, ,312,800 True Telecommunication Growth Infrastructure Fund THA THB 3,681, ,068 BM&F BOVESPA SA BRA BRL 1,820, ,020, Diversified Telecommunication Services 1,828,130 Singapore Telecommunications Ltd. SGP SGD 5,381, ,226 Orange SA FRA EUR 3,376, ,828 Telenor ASA NOR NOK 3,058, ,436 Telefonica SA ESP EUR 2,314, ,483 Vivendi SA FRA EUR 2,089, ,221, Electric Utilities 2,034,261 Power Grid Corp. of India Ltd. IND INR 4,453, Electronic Equipment, Instruments & Component 1,895,443 Digital China Holdings Ltd. CHN HKD 1,760, Energy Equipment & Services 182,908 Noble Corp. PLC USA USD 3,030, ,641 Technip SA FRA EUR 2,728, ,000 Petrofac Ltd. GBR GBP 1,753, ,088 Fred. Olsen Energy ASA NOR NOK 1,515, ,864 Paragon Offshore PLC USA USD 894, ,922, Unaudited Semi-Annual Report

383 Templeton Global Equity Income Fund Schedule of Investments as of December 31, 2014 (continued) face Food & Staples Retailing 1,432,016 Tesco PLC GBR GBP 4,218, Household Products 33,179 The Procter & Gamble Co. USA USD 3,022, Industrial Conglomerates 23,902 Siemens AG DEU EUR 2,711, ,387 General Electric Co. USA USD 1,121, ,833, Insurance 266,275 AXA SA FRA EUR 6,187, ,940 Aegon NV NLD EUR 5,134, ,608 Aviva PLC GBR GBP 3,161, ,683 Muenchener Rueckversicherungs-Gesellschaft AG DEU EUR 1,540, ,400 NN Group NV NLD EUR 1,124, ,148, Media 292,232 Sky PLC GBR GBP 4,094, ,416 Reed Elsevier NV GBR EUR 2,794, ,889, Metals & Mining 26,198 POSCO, ADR KOR USD 1,671, POSCO KOR KRW 219, ,891, Multiline Retail 896,186 Marks & Spencer Group PLC GBR GBP 6,688, ,769 Macy s Inc. USA USD 4,258, ,946, Oil, Gas & Consumable Fuels 129,602 Total SA, B FRA EUR 6,667, ,733 Eni SpA ITA EUR 5,332, ,511,500 China Shenhua Energy Co. Ltd., H CHN HKD 4,463, ,591 Chevron Corp. USA USD 3,431, ,156 Royal Dutch Shell PLC, A GBR EUR 3,251, ,384 BP PLC GBR GBP 3,205, ,308 Petroleo Brasileiro SA, ADR, pfd. BRA USD 2,503, ,131 LUKOIL Holdings, ADR RUS USD 1,836, ,838 Statoil ASA NOR NOK 998, ,691, Pharmaceuticals 99,150 Sanofi FRA EUR 9,077, ,866 GlaxoSmithKline PLC GBR GBP 7,761, ,737 Teva Pharmaceutical Industries Ltd., ADR ISR USD 6,771, ,529 Pfizer Inc. USA USD 6,713, ,881 Roche Holding AG CHE CHF 5,940, ,915 Novartis AG CHE CHF 3,800, ,919 Merck & Co. Inc. USA USD 3,459, ,523, Real Estate Investment Trust (REIT) 504,075 Annaly Capital Management Inc. USA USD 5,449, Software 128,901 Microsoft Corp. USA USD 5,987, Specialty Retail 1,010,876 Kingfisher PLC GBR GBP 5,365, Technology Hardware, Storage & Peripherals 174,425 CANON Inc. JPN JPY 5,590, Companies & Distributors 199,502 ITOCHU Corp. JPN JPY 2,151, Transportation Infrastructure 1,061,249 China Merchants Holdings International Co. Ltd. CHN HKD 3,565, Wireless Telecommunication Services 1,913,322 Vodafone Group PLC GBR GBP 6,640, ,331 Turkcell Iletisim Hizmetleri AS, ADR TUR USD 4,873, ,036 China Mobile Ltd. CHN HKD 3,790, Unaudited Semi-Annual Report 381

384 Templeton Global Equity Income Fund Schedule of Investments as of December 31, 2014 (continued) face Wireless Telecommunication Services (continued) 184,231 Mobile TeleSystems, ADR RUS USD 1,322, ,626, TOTAL SHARES 331,492, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 331,492, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Air Freight & Logistics 494,053 Barclays Bank PLC into TNT Express NV, 4.00%, cvt. pfd., Reg S NLD USD 2,827, Biotechnology 50,635 Royal Bank of Canada into Isis Pharmaceuticals Inc., 7.70%, cvt. pfd., 144A USA USD 2,665, Capital s 83,150 The Goldman Sachs Inc. into Morgan Stanley, 4.00%, cvt. pfd., 144A USA USD 3,040, Electronic Equipment, Instruments & Component 128,440 Royal Bank of Canada into Knowles Corp., 3.50%, cvt. pfd., 144A USA USD 2,870, Energy Equipment & Services 44,952 Merrill Lynch International & Co. CV into Halliburton Co., 3.50%, cvt. pfd., 144A USA USD 1,789, Multiline Retail 32,128 Merrill Lynch International & Co. CV into Macy s Inc., 3.90%, cvt. pfd., 144A USA USD 2,078, Oil, Gas & Consumable Fuels 83,755 Royal Bank of Canada into Chesapeake Energy Corp., 3.50%, cvt. pfd., 144A USA USD 1,627, Software 70,765 Morgan Stanley into Microsoft Corp., 3.40%, cvt. pfd., 144A USA USD 3,309, TOTAL SHARES 20,209, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 20,209, TOTAL INVESTMENTS 351,701, Unaudited Semi-Annual Report

385 Templeton Global High Yield Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Finance 3,800 GMAC Capital Trust I, 8.125%, pfd. USA USD 100, TOTAL SHARES 100, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 100, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Paper & Forest Products 1,400 NewPage Holdings Inc. USA USD 127, TOTAL SHARES 127, BONDS Corporate Bonds 2,000,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 2,072, ,000,000 CIT Group Inc., senior note, 5.00%, 08/15/22 USA USD 2,062, ,400,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 1,955, ,800,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 1,935, ,800,000 HCA Inc., senior note, 5.875%, 05/01/23 USA USD 1,901, ,500,000 Ally Financial Inc., senior note, 7.50%, 09/15/20 USA USD 1,762, ,500,000 Energy Transfer Equity LP, senior note, first lien, 7.50%, 10/15/20 USA USD 1,672, ,500,000 CSC Holdings LLC, senior note, 6.75%, 11/15/21 USA USD 1,663, ,500,000 Bank of America Corp., junior sub. bond, M, 8.125% to 05/15/18, FRN thereafter, Perpetual USA USD 1,625, ,000,000 LUKOIL International Finance BV, senior note, 144A, 4.563%, 04/24/23 RUS USD 1,600, ,500,000 The Goodyear Tire & Rubber Co., senior note, 6.50%, 03/01/21 USA USD 1,597, ,500,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.25%, 02/15/21 USA USD 1,545, ,500,000 Equinix Inc., senior bond, 5.375%, 04/01/23 USA USD 1,507, ,500,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 1,501, ,500,000 JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 08/01/23, FRN thereafter, Perpetual USA USD 1,488, ,500,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 1,481, ,400,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 1,480, ,400,000 MGM Resorts International, senior note, 6.00%, 03/15/23 USA USD 1,414, ,400,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 1,382, ,500,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior bond, Reg S, 6.51%, 03/07/22 RUS USD 1,354, ,400,000 Wind Acquisition Finance SA, senior note, second lien, 144A, 7.375%, 04/23/21 ITA USD 1,323, ,000 New Look Bondco I PLC, secured note, first lien, Reg S, 8.75%, 05/14/18 GBR GBP 1,313, ,500,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 1,288, ,000,000 U.S. Coatings Acquisition Inc./Flash Dutch 2 BV, secured note, Reg S, 5.75%, 02/01/21 USA EUR 1,278, ,000,000 Avis Budget Finance PLC, senior note, Reg S, 6.00%, 03/01/21 USA EUR 1,275, ,200,000 Alcatel-Lucent USA Inc., senior note, 144A, 6.75%, 11/15/20 FRA USD 1,272, ,100,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 1,232, ,260,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 1,228, ,330,000 Alfa Bond Issuance PLC, (Alfa Bank OJSC), loan participation, senior note, Reg S, 7.75%, 04/28/21 RUS USD 1,175, ,200,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 1,146, ,100,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 1,127, ,000,000 HCA Inc., senior secured note, first lien, 5.875%, 03/15/22 USA USD 1,097, ,200,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 8.25%, 11/01/19 AUS USD 1,096, ,100,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 1,082, ,500,000 Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 * USA USD 1,068, ,000,000 KB Home, senior bond, 7.50%, 09/15/22 USA USD 1,065, ,000,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 1,057, ,000,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 1,048, ,000,000 Alere Inc., senior note, 7.25%, 07/01/18 USA USD 1,045, ,144,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 1,035, ,000,000 Chesapeake Energy Corp., senior note, 5.75%, 03/15/23 USA USD 1,035, ,000,000 Frontier Communications Corp., senior bond, 7.625%, 04/15/24 USA USD 1,035, ,000,000 Millicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 LUX USD 1,028, ,000,000 Jaguar Holding Co. I, senior note, 144A, PIK, 9.375%, 10/15/17 USA USD 1,024, ,000,000 Blackboard Inc., senior note, 144A, 7.75%, 11/15/19 USA USD 1,007, ,000,000 Post Holdings Inc., senior note, 7.375%, 02/15/22 USA USD 1,002, ,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, Reg S, 8.50%, 01/15/21 USA EUR 1,001, ,000,000 Digicel Group Ltd., senior note, 144A, 8.25%, 09/30/20 BMU USD 978, ,000,000 Edcon Pty. Ltd., senior secured note, Reg S, 9.50%, 03/01/18 ZAF EUR 975, ,000,000 Eldorado Gold Corp., senior note, 144A, 6.125%, 12/15/20 CAN USD 975, ,000,000 WMG Acquisition Corp., senior note, 144A, 5.625%, 04/15/22 USA USD 972, Unaudited Semi-Annual Report 383

386 Templeton Global High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 600,000 Virgin Media Secured Finance PLC, senior secured note, Reg S, 5.50%, 01/15/25 GBR GBP 969, ,000,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 945, ,000,000 Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%, 02/15/21 USA USD 945, ,000 Iglo Foods Bondco PLC, senior secured note, first lien, Reg S, FRN, 4.582%, 06/15/20 GBR EUR 938, ,000,000 CONSOL Energy Inc., senior note, 144A, 5.875%, 04/15/22 USA USD 935, , BC ULC/New Red Finance Inc., secured note, second lien, 144A, 6.00%, 04/01/22 CAN USD 927, ,000,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 923, ,000 Ceramtec Group GmbH, senior note, Reg S, 8.25%, 08/15/21 DEU EUR 916, ,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 911, ,000,000 Barminco Finance Pty. Ltd., senior note, 144A, 9.00%, 06/01/18 AUS USD 900, ,000,000 Ultra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 USA USD 865, ,000,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 855, ,000,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 850, ,000 DP World Ltd., Reg S, 6.85%, 07/02/37 ARE USD 837, ,000 Financiere Quick SAS, senior note, Reg S, FRN, 7.582%, 10/15/19 FRA EUR 837, ,000 T-Mobile USA Inc., senior note, 6.542%, 04/28/20 USA USD 829, ,000 Intelsat Jackson Holdings SA, senior bond, 6.625%, 12/15/22 LUX USD 826, ,000 OneMain Financial Holdings Inc., senior note, 144A, 7.25%, 12/15/21 USA USD 824, ,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 822, ,000 Ineos Group Holdings SA, senior note, Reg S, 5.75%, 02/15/19 CHE EUR 819, ,000 Hertz Corp., senior note, 6.25%, 10/15/22 USA USD 812, ,100,000 Ocean Rig UDW Inc., senior note, 144A, 7.25%, 04/01/19 USA USD 777, ,000,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 04/15/22 USA USD 777, ,000 DISH DBS Corp., senior bond, 5.00%, 03/15/23 USA USD 776, ,000,000 Halcon Resources Corp., senior note, 8.875%, 05/15/21 USA USD 757, ,000 Hertz Corp., senior note, 6.75%, 04/15/19 USA USD 724, ,000 Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp., senior note, 6.50%, 05/15/21 USA USD 710, ,000 Visant Corp., senior note, 10.00%, 10/01/17 USA USD 704, ,000 Dole Food Co. Inc., senior secured note, 144A, 7.25%, 05/01/19 USA USD 699, ,000 Polymer Group Inc., senior note, 144A, 6.875%, 06/01/19 USA USD 674, ,000 Sanchez Energy Corp., senior note, 144A, 6.125%, 01/15/23 USA USD 674, , Hour Holdings III LLC, senior note, 144A, 8.00%, 06/01/22 USA USD 644, ,000 Ardagh Packaging Finance PLC, senior note, 144A, 9.125%, 10/15/20 LUX USD 640, ,000 CHS/Community Health Systems Inc., senior note, 5.125%, 08/01/21 USA USD 638, ,000 Chesapeake Energy Corp., senior note, 6.125%, 02/15/21 USA USD 633, ,000 CGG SA, senior note, 6.50%, 06/01/21 FRA USD 612, ,000 Olin Corp., senior bond, 5.50%, 08/15/22 USA USD 610, ,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 580, ,000 Offshore Group Investment Ltd., senior bond, first lien, 7.125%, 04/01/23 USA USD 576, ,000 Stena International SA, secured bond, 144A, 5.75%, 03/01/24 SWE USD 567, ,000 Galapagos Holding SA, senior note, Reg S, 7.00%, 06/15/22 DEU EUR 564, ,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 558, ,000 UPCB Finance VI Ltd., senior secured note, first lien, 144A, 6.875%, 01/15/22 NLD USD 544, ,000,000 Energy XXI Gulf Coast Inc., senior note, 144A, 6.875%, 03/15/24 USA USD 542, ,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 541, ,000 CHS/Community Health Systems Inc., senior note, 7.125%, 07/15/20 USA USD 533, ,000 Intelsat Jackson Holdings SA, senior note, 7.25%, 10/15/20 LUX USD 529, ,000 Offshore Group Investment Ltd., senior secured note, first lien, 7.50%, 11/01/19 USA USD 525, ,000 AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, senior note, 144A, 5.00%, 10/01/21 NLD USD 520, ,000 DISH DBS Corp., senior note, 5.875%, 07/15/22 USA USD 513, ,000 E*TRADE Financial Corp., senior note, 5.375%, 11/15/22 USA USD 512, ,000 DaVita HealthCare Partners Inc., senior bond, 5.125%, 07/15/24 USA USD 510, ,000 Owens-Brockway Glass Container Inc., senior note, 144A, 5.00%, 01/15/22 USA USD 510, ,000,000 Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 06/01/21 USA USD 510, ,000 NRG Yield Operating LLC, senior bond, 144A, 5.375%, 08/15/24 USA USD 510, ,000 Constellation Brands Inc., senior bond, 4.75%, 11/15/24 USA USD 507, ,000 Cemex SAB de CV, secured note, 144A, 5.875%, 03/25/19 MEX USD 507, ,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 506, ,000 Cott Beverages Inc., senior note, 144A, 6.75%, 01/01/20 USA USD 501, ,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 498, ,000 Sprint Corp., senior bond, 7.875%, 09/15/23 USA USD 496, ,000,000 Goodrich Petroleum Corp., senior note, 8.875%, 03/15/19 USA USD 495, ,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A,5.25%, 04/15/21 USA USD 495, ,000 EnQuest PLC, senior note, 144A, 7.00%, 04/15/22 GBR USD 491, ,000 Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp., senior note, 8.375%, 06/01/20 USA USD 487, Unaudited Semi-Annual Report

387 Templeton Global High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 500,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A, 5.625%, 03/01/24 USA USD 485, ,000 Calpine Corp., senior secured bond, 144A, 7.875%, 01/15/23 USA USD 462, ,000 Scientific Games International Inc., senior note, 144A, 10.00%, 12/01/22 USA USD 460, ,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 458, ,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 455, ,000 Calpine Corp., senior secured bond, first lien, 144A, 5.875%, 01/15/24 USA USD 428, ,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 423, ,000,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 419, ,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior note, Reg S, 3.85%, 02/06/20 RUS USD 413, ,000 Scientific Games International Inc., senior secured note, first lien, 144A, 7.00%, 01/01/22 USA USD 407, ,000 DISH DBS Corp., senior note, 144A, 5.875%, 11/15/24 USA USD 403, ,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.75%, 01/15/23 DEU EUR 394, ,000 UPC Holding BV, senior note, Reg S, 6.375%, 09/15/22 NLD EUR 393, ,000 UPCB Finance II Ltd., senior secured note, Reg S, 6.375%, 07/01/20 NLD EUR 382, ,000 Digicel Group Ltd., senior note, 144A, 6.00%, 04/15/21 BMU USD 380, ,000 Halcon Resources Corp., senior note, 9.25%, 02/15/22 USA USD 371, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 9.00%, 02/15/20 USA USD 370, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 11.25%, 06/01/17 USA USD 369, ,000 Peabody Energy Corp., senior note, 6.00%, 11/15/18 USA USD 365, ,000 Memorial Resource Development Corp., senior note, 144A, 5.875%, 07/01/22 USA USD 363, ,000 Financiere Gaillon 8 SAS, senior note, Reg S, 7.00%, 09/30/19 FRA EUR 353, ,000 Triangle USA Petroleum Corp., senior note, 144A, 6.75%, 07/15/22 USA USD 332, ,000 Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22 GBR USD 326, ,000 Virgin Media Finance PLC, senior bond, 144A, 6.375%, 04/15/23 GBR USD 315, ,000 Rain CII Carbon LLC/CII Carbon Corp., second lien, 144A, 8.25%, 01/15/21 USA USD 308, ,000 Frontier Communications Corp., senior note, 7.125%, 01/15/23 USA USD 306, ,000 T-Mobile USA Inc., senior bond, 6.375%, 03/01/25 USA USD 305, ,000 CGG SA, senior note, 6.875%, 01/15/22 FRA USD 304, ,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 9.00%, 02/15/20 USA USD 298, ,000 Navient Corp., senior note, 5.00%, 10/26/20 USA USD 295, ,000 Post Holdings Inc., senior note, 144A, 6.75%, 12/01/21 USA USD 291, ,000 Cemex SAB de CV, first lien, 144A, 5.70%, 01/11/25 MEX USD 289, ,111 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 284, ,000 Energy XXI Gulf Coast Inc., senior note, 7.50%, 12/15/21 USA USD 272, ,000 UPC Holding BV, senior note, Reg S, 6.75%, 03/15/23 NLD EUR 265, ,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.625%, 04/15/23 DEU EUR 263, ,000 Linn Energy LLC/Finance Corp., senior note, 8.625%, 04/15/20 USA USD 262, ,000 Compressco Partners LP/Finance Corp., senior note, 144A, 7.25%, 08/15/22 USA USD 261, ,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 258, ,000 Galapagos SA, senior secured note, Reg S, 5.375%, 06/15/21 DEU EUR 240, ,000 Wind Acquisition Finance SA, senior secured note, Reg S, 4.00%, 07/15/20 ITA EUR 238, ,000 Sprint Nextel Corp., senior note, 144A, 7.00%, 03/01/20 USA USD 217, ,000 Cemex SAB de CV, senior secured note, 144A, 9.00%, 01/11/18 MEX USD 209, ,000 Aviv Healthcare Properties LP/Aviv Healthcare Capital Corp., senior note, 6.00%, 10/15/21 USA USD 208, ,000 T-Mobile USA Inc., senior bond, 6.50%, 01/15/24 USA USD 205, ,000 Te Healthcare Corp., senior note, 144A, 5.00%, 03/01/19 USA USD 200, ,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 200, ,000 IHS Inc., senior note, 144A, 5.00%, 11/01/22 USA USD 199, ,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.75%, 01/31/21 LUX USD 197, ,000 KB Home, senior note, 4.75%, 05/15/19 USA USD 197, ,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.25%, 01/31/19 LUX USD 196, ,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.00%, 06/30/21 LUX USD 191, ,000 CHC Helicopter SA, senior note, 9.375%, 06/01/21 CAN USD 184, ,000 Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 06/21/19 USA USD 149, ,000 Quicksilver Resources Inc., senior note, 9.125%, 08/15/19 USA USD 127, ,000 DISH DBS Corp., senior note, 6.75%, 06/01/21 USA USD 107, ,000 Calpine Corp., senior secured note, first lien, 144A, 6.00%, 01/15/22 USA USD 107, ,000 Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22 USA USD 103, ,000 AECOM Technology Corp., senior bond, 144A, 5.875%, 10/15/24 USA USD 102, ,000 AECOM Technology Corp., senior note, 144A, 5.75%, 10/15/22 USA USD 102, ,000 T-Mobile USA Inc., senior note, 6.125%, 01/15/22 USA USD 101, ,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 5.625%, 12/01/21 USA USD 101, ,000 CGG SA, senior note, 7.75%, 05/15/17 FRA USD 100, Unaudited Semi-Annual Report 385

388 Templeton Global High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 100,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 98, ,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.00%, 10/01/22 USA USD 95, ,000 Post Holdings Inc., senior note, 144A, 6.00%, 12/15/22 USA USD 94, ,000 Sprint Corp., senior bond, 7.125%, 06/15/24 USA USD 93, ,000 Edcon Holdings Pty. Ltd., senior secured note, Reg S, %, 06/30/19 ZAF EUR 90, ,235 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 7.00%, 11/15/20 LUX USD 89, ,000 Peabody Energy Corp., senior note, 6.50%, 09/15/20 USA USD 87, ,000 Halcon Resources Corp., senior note, 9.75%, 07/15/20 USA USD 75, ,998, Government and Municipal Bonds 8,400,000 Government of Ecuador, senior note, Reg S, 7.95%, 06/20/24 ECU USD 7,224, ,980 Government of Mexico, 7.25%, 12/15/16 MEX MXN 3,382, ,520,000 Government of Kenya, senior note, Reg S, 6.875%, 06/24/24 KEN USD 2,677, ,390,000 Government of Nigeria, 13.05%, 08/16/16 NGA NGN 2,659, ,945,000 Government of Poland, 4.75%, 10/25/16 POL PLN 2,659, ,300,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 2,534, ,390 Government of Mexico, 6.25%, 06/16/16 MEX MXN 2,368, ,800,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 2,270, ,500,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 2,132, ,339,227 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 1,588, ,620,000 Government of Ghana, 24.44%, 05/29/17 GHA GHS 1,201, ,113,280 Uruguay Notas del Tesoro, 18, Index Linked, 2.25%, 08/23/17 URY UYU 1,054, ,920,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 1,026, ,000,000 Government of Ghana, Reg S, 7.875%, 08/07/23 GHA USD 929, ,720,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 826, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 706, ,300,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 685, ,200,000,000 Government of Indonesia, FR47, 10.00%, 02/15/28 IDN IDR 666, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 648, ,010,000 Government of Ukraine, senior note, Reg S, 7.95%, 02/23/21 UKR USD 614, ,150,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 562, ,280,000,000 Government of Indonesia, FR34, 12.80%, 06/15/21 IDN IDR 531, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 502, ,850,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 469, ,000,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 458, ,400,000,000 Government of Indonesia, FR35, 12.90%, 06/15/22 IDN IDR 457, ,200 Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 430, ,330,000 Government of Ghana, 23.00%, 02/13/17 GHA GHS 429, ,810,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 380, ,185,920 Uruguay Notas del Tesoro, 13, Index Linked, 4.00%, 05/25/25 URY UYU 371, ,000,000 Korea Moary Stabilization Bond, senior note, 2.79%, 06/02/16 KOR KRW 335, ,800,000 Serbia Treasury Note, 10.00%, 12/19/16 SER RSD 320, ,900,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 314, ,200,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 311, ,348,736 Uruguay Notas del Tesoro, 14, Index Linked, 4.00%, 06/10/20 URY UYU 301, ,560,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 294, ,000 Government of Ghana, 23.00%, 08/21/17 GHA GHS 291, ,140,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 284, ,000 Government of Ghana, 19.24%, 05/30/16 GHA GHS 282, ,350,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 209, ,630,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 198, ,000 Government of Ghana, 25.40%, 07/31/17 GHA GHS 178, ,810,000,000 Government of Indonesia, FR42, 10.25%, 07/15/27 IDN IDR 171, ,010,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 155, ,400,000,000 Government of Indonesia, 7.875%, 04/15/19 IDN IDR 114, ,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 111, ,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 111, ,080,000 Serbia Treasury Note, 10.00%, 11/08/17 SER RSD 110, ,775,000 Uruguay Notas del Tesoro, 11.00%, 03/21/17 URY UYU 109, ,000 Government of Ghana, 19.04%, 09/24/18 GHA GHS 102, ,000,000 Government of Indonesia, FR40, 11.00%, 09/15/25 IDN IDR 87, ,000,000 Government of Indonesia, FR45, 9.75%, 05/15/37 IDN IDR 82, ,350,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 82, ,350,000 Serbia Treasury Note, 10.00%, 03/01/16 SER RSD 74, ,200,000 Serbia Treasury Note, 10.00%, 01/30/16 SER RSD 72, ,020,000 Serbia Treasury Bond, 10.00%, 06/27/16 SER RSD 70, ,000,000 Government of Indonesia, FR46, 9.50%, 07/15/23 IDN IDR 70, ,000 Government of Poland, 4.75%, 04/25/17 POL PLN 66, ,040,000 Serbia Treasury Bond, 10.00%, 09/11/21 SER RSD 64, ,210,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 64, ,600,128 Uruguay Notas del Tesoro, 17, Index Linked, 2.75%, 06/16/16 URY UYU 64, ,158,611 Uruguay Notas del Tesoro, 10, Index Linked, 4.25%, 01/05/17 URY UYU 47, ,000 Government of Ghana, 26.00%, 06/05/17 GHA GHS 39, ,940,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 39, Unaudited Semi-Annual Report

389 Templeton Global High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 40,400,000 Korea Moary Stabilization Bond, senior note, 2.78%, 02/02/16 KOR KRW 37, ,049 Government of Uruguay, senior bond, Index Linked, 4.00%, 07/10/30 URY UYU 30, ,800,000 Serbia Treasury Bond, 10.00%, 08/15/16 SER RSD 28, ,000 Uruguay Treasury Bill, Strip, 01/14/16 URY UYU 27, ,385 Government of Uruguay, Index Linked, 4.25%, 04/05/27 URY UYU 26, ,000,000 Government of Indonesia, senior bond, FR53, 8.25%, 07/15/21 IDN IDR 26, ,000 Government of Ghana, 16.90%, 03/07/16 GHA GHS 23, ,290,000 Serbia Treasury Note, 10.00%, 03/20/21 SER RSD 21, ,090,000 Serbia Treasury Note, 10.00%, 05/22/16 SER RSD 21, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 18, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 18, ,000 Uruguay Notas del Tesoro, 9.50%, 01/27/16 URY UYU 18, ,050,000 Government of Sri Lanka, 10.60%, 07/01/19 LKA LKR 17, ,610,000 Serbia Treasury Note, 10.00%, 10/17/16 SER RSD 16, ,000 Government of Panama, 9.375%, 04/01/29 PAN USD 15, ,217 Government of Uruguay, senior bond, Index Linked, 5.00%, 09/14/18 URY UYU 14, ,440,000 Serbia Treasury Bond, 10.00%, 11/21/18 SER RSD 14, ,000 Government of Ghana, 25.48%, 04/24/17 GHA GHS 13, ,700,000 Government of Sri Lanka, A, 6.40%, 08/01/16 LKA LKR 12, ,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 11, ,000 Uruguay Treasury Bill, Strip, 07/28/16 URY UYU 11, ,000 Serbia Treasury Note, 10.00%, 05/08/17 SER RSD 9, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 9, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/17 BRA BRL 8, ,000 Government of Sri Lanka, 11.20%, 07/01/22 LKA LKR 7, ,000 Government of Sri Lanka, A, 7.50%, 08/15/18 LKA LKR 5, ,110,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 4, ,000,000 Government of Indonesia, FR43, 10.25%, 07/15/22 IDN IDR 4, ,000 Government of Sri Lanka, 10.60%, 09/15/19 LKA LKR 3, ,000 Government of Sri Lanka, B, 6.40%, 10/01/16 LKA LKR 2, ,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR ,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR ,000 Government of Sri Lanka, 8.25%, 03/01/17 LKA LKR ,172, Securities Maturing Within One Year 637,770 Government of Mexico, 8.00%, 12/17/15 MEX MXN 4,518, ,860,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 3,401, ,542,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 3,044, ,710,000 Nigeria Treasury Bill, 0.00%, 06/04/15 NGA NGN 2,844, ,020,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 2,829, ,818,200,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 2,579, ,704,000 Government of Ghana, 21.00%, 10/26/15 GHA GHS 1,443, ,870,000 Nigeria Treasury Bill, 0.00%, 04/23/15 NGA NGN 1,378, ,250 Government of Mexico, 6.00%, 06/18/15 MEX MXN 1,197, ,013,600,000 Korea Moary Stabilization Bond, senior note, 2.90%, 12/02/15 KOR KRW 933, ,820,000 Government of Ghana, 14.99%, 02/23/15 GHA GHS 874, Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 829, ,450,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 688, ,018,790 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 680, ,600,000 Serbia Treasury Note, 10.00%, 04/27/15 SER RSD 658, ,200,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 613, ,600,000 Nigeria Treasury Bill, 0.00%, 04/09/15 NGA NGN 566, ,170 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 556, ,490,000 Uruguay Notas del Tesoro, 10.50%, 03/21/15 URY UYU 549, ,330,000 Nigeria Treasury Bill, 0.00%, 02/05/15 NGA NGN 460, ,460 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 431, ,480 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 431, ,120 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 420, ,020 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 394, ,650 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 381, ,035,000 Government of Ghana, 24.00%, 05/25/15 GHA GHS 324, ,400,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 305, ,500,000 Serbia Treasury Note, 10.00%, 03/01/15 SER RSD 274, ,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 271, ,800 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 227, ,670,000 Nigeria Treasury Bill, 0.00%, 05/21/15 NGA NGN 221, ,000,000 Government of Sri Lanka, B, 11.00%, 09/01/15 LKA LKR 165, ,674,368 Uruguay Notas del Tesoro, Index Linked, 4.00%, 06/14/15 URY UYU 150, ,500 Mexico Treasury Bill, 0.00%, 07/23/15 MEX MXN 142, ,030 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 127, ,200,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 126, ,920,000 Uruguay Notas del Tesoro, 10.25%, 08/22/15 URY UYU 118, ,400,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 112, ,520,000 Nigeria Treasury Bill, 0.00%, 05/07/15 NGA NGN 112, ,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 102, ,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 88, Unaudited Semi-Annual Report 387

390 Templeton Global High Yield Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 20,850,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 82, ,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 82, Letra Tesouro Nacional, Strip, 01/01/15 BRA BRL 79, ,300,000 Korea Moary Stabilization Bond, senior note, 2.66%, 06/09/15 KOR KRW 64, ,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 57, ,940,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 52, ,870,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 49, ,000 Bank of Negara Moary Note, 0.00%, 10/27/15 MYS MYR 47, ,140,000 Uruguay Treasury Bill, Strip, 11/26/15 URY UYU 41, ,000 Uruguay Treasury Bill, Strip, 08/20/15 URY UYU 32, ,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 19, ,090,000 Government of Sri Lanka, A, 6.50%, 07/15/15 LKA LKR 15, ,900,000 Government of Sri Lanka, A, 8.50%, 11/01/15 LKA LKR 14, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW 6, ,000 Uruguay Treasury Bill, Strip, 07/02/15 URY UYU 3, ,000 Government of Sri Lanka, A, 11.75%, 03/15/15 LKA LKR 2, ,231, TOTAL BONDS 214,402, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 214,529, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 700,000 NewPage Corp., Escrow Account ** USA USD TOTAL BONDS TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET TOTAL INVESTMENTS 214,629, Income may be received in additional securities and/or cash * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, 2014 ** These securities are submitted to a Fair Valuation 388 Unaudited Semi-Annual Report

391 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 1,038,261 CTT-Correios de Portugal SA PRT EUR 10,071, ,978 TNT Express NV NLD EUR 3,352, ,423, Airlines 485,690 Deutsche Lufthansa AG DEU EUR 8,127, Auto Components 154,181 Cie Generale des Etablissements Michelin, B FRA EUR 14,042, ,236 Hyundai Mobis Co. Ltd. KOR KRW 9,329, ,371, Automobiles 1,981,240 Nissan Motor Co. Ltd. JPN JPY 17,476, ,250 General Motors Co. USA USD 15,613, ,600 Toyota Motor Corp. JPN JPY 13,662, ,752, Banks 336,240 Citigroup Inc. USA USD 18,193, ,800 JPMorgan Chase & Co. USA USD 17,885, ,570 BNP Paribas SA FRA EUR 14,994, ,103,000 Bangkok Bank PCL, fgn. THA THB 12,536, ,266,678 HSBC Holdings PLC GBR HKD 12,080, ,000 United Overseas Bank Ltd. SGP SGD 11,553, ,660,561 UniCredit SpA ITA EUR 10,719, ,493,324 Barclays PLC GBR GBP 9,463, ,578 ING Groep NV, IDR NLD EUR 8,027, ,303,920 ICICI Bank Ltd. IND INR 7,304, ,302 Standard Chartered PLC GBR GBP 4,777, ,423 KB Financial Group Inc., ADR KOR USD 4,319, ,856, Beverages 281,600 Suntory Beverage & Food Ltd. JPN JPY 9,799, Biotechnology 132,720 Amgen Inc. USA USD 21,140, Building Products 269,800 Compagnie de Saint-Gobain FRA EUR 11,501, Capital s 468,270 Morgan Stanley USA USD 18,168, ,576 Credit Suisse Group AG CHE CHF 14,746, ,834 Vontobel Holding AG CHE CHF 3,124, ,039, Chemicals 249,979 Akzo Nobel NV NLD EUR 17,437, ,600 LyondellBasell Industries NV, A USA USD 5,128, ,566, Commercial Services & Supplies 10,105 The ADT Corp. USA USD 366, Communications Equipment 421,520 Cisco Systems Inc. USA USD 11,724, Construction & Engineering 458,514 Carillion PLC GBR GBP 2,399, Construction Materials 589,853 CRH PLC IRL EUR 14,203, ,230 HeidelbergCement AG DEU EUR 5,993, ,196, Consumer Finance 169,530 Capital One Financial Corp. USA USD 13,994, ,800 GMAC Capital Trust I, 8.125%, pfd. USA USD 100, ,094, Distributors 548,000 Jardine Cycle & Carriage Ltd. SGP SGD 17,621, Diversified Financial Services 171,680 Deutsche Boerse AG DEU EUR 12,301, Unaudited Semi-Annual Report 389

392 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 (continued) face Diversified Telecommunication Services 797,641 Telefonica SA ESP EUR 11,504, ,899 Verizon Communications Inc. USA USD 6,638, ,236,003 Singapore Telecommunications Ltd. SGP SGD 6,582, ,725, Electric Utilities 1,107,300 Centrais Eletricas Brasileiras SA BRA BRL 2,416, ,400 Centrais Eletricas Brasileiras SA, pfd., B BRA BRL 2,063, ,480, Electrical Equipment 465,850 ABB Ltd. CHE CHF 9,905, Electronic Equipment, Instruments & Component 3,834,000 Digital China Holdings Ltd. CHN HKD 3,560, Energy Equipment & Services 1,025,480 Petrofac Ltd. GBR GBP 11,236, ,360 Noble Corp. PLC USA USD 9,682, ,921 Baker Hughes Inc. USA USD 8,630, ,480 Technip SA FRA EUR 7,442, ,367 Halliburton Co. USA USD 6,110, ,103, Food & Staples Retailing 224,090 Walgreens Boots Alliance Inc. USA USD 17,075, ,790 CVS Health Corp. USA USD 16,352, ,690 Metro AG DEU EUR 4,461, ,889, Health Care Equipment & Supplies 167,180 Medtronic Inc. USA USD 12,070, ,900 Draegerwerk AG & Co. KGAA, pfd. DEU EUR 8,209, ,230 Getinge AB, B SWE SEK 7,801, ,082, Health Care Providers & Services 2,402,700 Shanghai Pharmaceuticals Holding Co. Ltd., H CHN HKD 5,422, Household Durables 5,249,000 Haier Electronics Group Co. Ltd. CHN HKD 12,564, ,960 SEB SA FRA EUR 6,999, ,155,000 Techtronic Industries Co. Ltd. HKG HKD 6,948, ,512, Industrial Conglomerates 102,870 Siemens AG DEU EUR 11,669, ,000 Hutchison Whampoa Ltd. HKG HKD 11,269, ,938, Insurance 697,204 AXA SA FRA EUR 16,201, ,720,483 Aviva PLC GBR GBP 12,992, ,290 Muenchener Rueckversicherungs-Gesellschaft AG DEU EUR 10,687, ,770,200 AIA Group Ltd. HKG HKD 9,816, ,124,000 China Life Insurance Co. Ltd., H CHN HKD 8,299, ,400 NN Group NV NLD EUR 4,852, ,940 UNIQA Insurance Group AG AUT EUR 3,198, ,049, IT Services 15,829,000 Travelsky Technology Ltd., H CHN HKD 17,107, ,010 Accenture PLC, A USA USD 2,858, ,965, Life Sciences Tools & Services 467,530 QIAGEN NV NLD EUR 10,952, ,610 Tecan Group AG CHE CHF 7,570, ,523, Machinery 43,300 Navistar International Corp. USA USD 1,449, ,849 Pentair PLC GBR USD 322, ,771, Unaudited Semi-Annual Report

393 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 (continued) face Media 466,090 Comcast Corp., Special A USA USD 26,830, ,131,386 Sky PLC GBR GBP 15,853, ,200 News Corp., A USA USD 14,077, ,761, Metals & Mining 750,517 Mining and Metallurgical Co. Norilsk Nickel OJSC, ADR RUS USD 10,672, ,330 Allegheny Technologies Inc. USA USD 10,025, ,990 POSCO KOR KRW 8,309, ,007, Multi-Utilities 193,620 PG&E Corp. USA USD 10,308, ,210 GDF Suez FRA EUR 4,236, ,545, Multiline Retail 342,240 Macy s Inc. USA USD 22,502, ,617,070 Marks & Spencer Group PLC GBR GBP 19,531, ,033, Oil, Gas & Consumable Fuels 307,470 Total SA, B FRA EUR 15,819, ,770 Eni SpA ITA EUR 11,021, ,020 Dragon Oil PLC TKM GBP 6,467, ,780 Galp Energia SGPS SA, B PRT EUR 6,404, ,220 Chevron Corp. USA USD 5,409, ,081 Royal Dutch Shell PLC, B GBR GBP 5,154, ,580 Chesapeake Energy Corp. USA USD 3,827, ,104, Pharmaceuticals 388,470 Teva Pharmaceutical Industries Ltd., ADR ISR USD 22,340, ,370 Sanofi FRA EUR 14,681, ,440 UCB SA BEL EUR 14,104, ,090 Bayer AG DEU EUR 13,001, ,960 Roche Holding AG CHE CHF 11,934, ,090 Pfizer Inc. USA USD 10,843, ,880 GlaxoSmithKline PLC GBR GBP 10,828, ,800 Novartis AG CHE CHF 10,756, ,430 H. Lundbeck AS DNK DKK 8,328, ,140 Ipsen SA FRA EUR 3,857, ,676, Real Estate Investment Trust (REIT) 5,025,983 Cambridge Industrial Trust SGP SGD 2,579, Real Estate Management & Development 173,000 Cheung Kong (Holdings) Ltd. HKG HKD 2,911, Semiconductors & Semiconductor Equipment 469,470 Applied Materials Inc. USA USD 11,699, ,813 Taiwan Semiconductor Manufacturing Co. Ltd. TWN TWD 3,638, ,337, Software 380,615 Microsoft Corp. USA USD 17,679, ,530 SAP SE DEU EUR 5,394, ,700 Oracle Corp. USA USD 1,650, ,724, Specialty Retail 411,290 Foot Locker Inc. USA USD 23,106, ,900 Best Buy Co. Inc. USA USD 20,733, ,946,090 Kingfisher PLC GBR GBP 15,635, ,570 Abercrombie & Fitch Co., A USA USD 4,340, ,816, Technology Hardware, Storage & Peripherals 23,530 Samsung Electronics Co. Ltd. KOR KRW 28,547, ,810 Hewlett-Packard Co. USA USD 16,044, ,000 CANON Inc. JPN JPY 7,916, ,508, Thrifts & Mortgage Finance 2,523,220 LIC Housing Finance Ltd. IND INR 17,452, ,637 Housing Development Finance Corp. Ltd. IND INR 14,896, ,348, Unaudited Semi-Annual Report 391

394 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 (continued) face Companies & Distributors 779,100 ITOCHU Corp. JPN JPY 8,400, Wireless Telecommunication Services 5,083,787 Vodafone Group PLC GBR GBP 17,643, ,223,000 China Mobile Ltd. CHN HKD 14,305, ,804 Mobile TeleSystems, ADR RUS USD 199, ,148, TOTAL SHARES 1,268,121, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,268,121, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Air Freight & Logistics 872,434 Barclays Bank PLC into TNT Express NV, 4.00%, cvt. pfd., Reg S NLD USD 4,992, CEVA Holdings LLC, cvt. pfd., A-2 GBR USD 150, CEVA Holdings LLC GBR USD 69, CEVA Holdings LLC, cvt. pfd., A-1 GBR USD 3, ,215, Biotechnology 169,627 Royal Bank of Canada into Isis Pharmaceuticals Inc., 7.70%, cvt. pfd., 144A USA USD 8,929, Electronic Equipment, Instruments & Component 324,163 Royal Bank of Canada into Knowles Corp., 3.50%, cvt. pfd., 144A USA USD 7,245, Energy Equipment & Services 88,147 Merrill Lynch International & Co. CV into Halliburton Co., 3.50%, cvt. pfd., 144A USA USD 3,510, Oil, Gas & Consumable Fuels 174,353 Royal Bank of Canada into Chesapeake Energy Corp., 3.50%, cvt. pfd., 144A USA USD 3,388, Paper & Forest Products 800 NewPage Holdings Inc. USA USD 72, Software 295,848 Morgan Stanley into Microsoft Corp., 3.40%, cvt. pfd., 144A USA USD 13,835, TOTAL SHARES 42,196, BONDS Corporate Bonds 1,200,000 Cable Communications Systems NV, senior secured note, Reg S, 7.50%, 11/01/20 ROM EUR 1,484, ,300,000 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., senior note, 144A, 6.75%, 01/31/21 LUX USD 1,286, ,200,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 1,281, ,040,000 State Export-Import Bank of Ukraine, (BIZ FIN), loan participation, Reg S, 8.75%, 01/22/18 UKR USD 1,190, ,000,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 1,098, ,100,000 Taylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A, 5.625%, 03/01/24 USA USD 1,067, ,000,000 Gant Co. Inc., senior bond, 6.375%, 10/15/23 USA USD 1,065, ,000,000 KB Home, senior bond, 7.50%, 09/15/22 USA USD 1,065, ,000 Ally Financial Inc., senior note, 7.50%, 09/15/20 USA USD 1,057, ,000,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 1,027, ,000,000 DaVita HealthCare Partners Inc., senior bond, 5.125%, 07/15/24 USA USD 1,021, ,000,000 Energy Transfer Equity LP, senior bond, first lien, 5.875%, 01/15/24 USA USD 1,020, ,000 Frontier Communications Corp., senior note, 8.50%, 04/15/20 USA USD 1,008, ,000,000 Equinix Inc., senior bond, 5.375%, 04/01/23 USA USD 1,005, ,000,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 1,001, ,000,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 987, ,100,000 Abengoa Finance SAU, senior note, 144A, 7.75%, 02/01/20 ESP USD 981, ,000,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 945, ,000 CIT Group Inc., senior note, 5.00%, 08/15/22 USA USD 928, ,000 First Data Corp., senior note, %, 06/15/21 USA USD 925, ,000 Grifols Worldwide Operations Ltd., senior note, 144A, 5.25%, 04/01/22 USA USD 922, ,000,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 905, ,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.875%, 03/01/22 USA USD 902, ,000 Sabine Pass Liquefaction LLC, senior secured, first lien, 5.75%, 05/15/24 USA USD 887, ,000 HCA Inc., senior secured note, first lien, 5.875%, 03/15/22 USA USD 878, ,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 871, Unaudited Semi-Annual Report

395 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 1,100,000 BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 04/15/22 USA USD 855, ,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 831, ,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 829, ,000 Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22 USA USD 828, ,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.25%, 02/15/21 USA USD 824, ,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 820, ,000 T-Mobile USA Inc., senior bond, 6.375%, 03/01/25 USA USD 814, ,000 Te Healthcare Corp., senior note, 144A, 5.00%, 03/01/19 USA USD 803, ,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 797, ,000 CHS/Community Health Systems Inc., senior note, 5.125%, 08/01/21 USA USD 745, ,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 734, ,600,000 Edcon Holdings Pty. Ltd., senior secured note, Reg S, %, 06/30/19 ZAF EUR 726, ,000 JBS Investments GmbH, senior note, 144A, 7.25%, 04/03/24 BRA USD 694, ,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 688, ,000 Wind Acquisition Finance SA, senior note, second lien, 144A, 7.375%, 04/23/21 ITA USD 661, ,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 614, ,000 Ocean Rig UDW Inc., senior note, 144A, 7.25%, 04/01/19 USA USD 565, ,000 Calpine Corp., senior secured bond, 144A, 7.875%, 01/15/23 USA USD 522, ,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 506, ,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 455, ,000 Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 06/21/19 USA USD 448, ,000 MGM Resorts International, senior note, 7.75%, 03/15/22 USA USD 444, ,000 Enterprise Products Operating LLC, junior sub. note, 7.034% to 01/15/18, FRN thereafter, 01/15/68 USA USD 439, ,000 Intelsat Jackson Holdings SA, senior note, 7.50%, 04/01/21 LUX USD 429, ,000 Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 * USA USD 427, ,000 HCA Inc., senior note, 6.50%, 02/15/16 USA USD 418, ,000 CHS/Community Health Systems Inc., senior secured note, first lien, 5.125%, 08/15/18 USA USD 415, ,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 393, ,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 377, ,000 Peabody Energy Corp., senior note, 6.25%, 11/15/21 USA USD 343, ,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 339, ,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 335, ,000,000 General Electric Capital Corp., senior note, A, 8.50%, 04/06/18 USA MXN 300, ,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 04/01/22 AUS USD 250, ,000 Ford Motor Credit Co. LLC, senior note, 8.125%, 01/15/20 USA USD 247, ,000 Linn Energy LLC/Finance Corp., senior note, 6.50%, 09/15/21 USA USD 244, ,667 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 243, ,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 224, ,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 216, ,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 211, ,000 Digicel Group Ltd., senior note, 144A, 8.25%, 09/30/20 BMU USD 195, ,000 Digicel Group Ltd., senior note, 144A, 6.00%, 04/15/21 BMU USD 190, ,268, Government and Municipal Bonds 20,390,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 22,920, ,843,190 Government of Mexico, 7.25%, 12/15/16 MEX MXN 20,593, ,350 Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 19,780, ,700,000 Government of Malaysia, senior note, 3.172%, 07/15/16 MYS MYR 17,833, ,600,000 Government of Sri Lanka, senior note, Reg S, 6.25%, 07/27/21 LKA USD 17,360, ,400,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 15,837, ,820,000 Government of Portugal, Reg S, 5.125%, 10/15/24 PRT USD 13,517, ,470,160 Government of Mexico, 6.25%, 06/16/16 MEX MXN 10,353, ,307,820,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 9,432, ,460,000 Government of Ecuador, senior note, Reg S, 7.95%, 06/20/24 ECU USD 8,995, ,240,000 Government of Slovenia, senior note, Reg S, 5.85%, 05/10/23 SVN USD 8,274, ,878,070,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 8,171, ,812,350,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 8,051, ,549 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 8,018, ,225,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 7,305, ,767,000,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 7,047, ,400,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 6,720, ,060 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 6,631, ,600,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 6,577, ,410 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 6,017, Unaudited Semi-Annual Report 393

396 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 378,600,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 5,949, ,470 Nota Do Tesouro Nacional, 10.00%, 01/01/17 BRA BRL 5,545, ,680,000 Government of Kenya, senior note, Reg S, 6.875%, 06/24/24 KEN USD 4,972, ,180,000 Government of Ghana, 23.00%, 08/21/17 GHA GHS 4,600, ,300,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 4,532, ,607,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 3,950, ,270,000 Serbia Treasury Note, 10.00%, 07/10/17 SER RSD 3,815, ,370,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 3,445, ,389,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 3,218, ,554,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 3,214, ,375 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 3,125, ,330,000,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 3,096, ,450,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 2,883, ,710 Letra Tesouro Nacional, Strip, 01/01/17 BRA BRL 2,867, ,300,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 2,496, ,390,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 2,479, ,140,000 Government of Poland, 4.75%, 10/25/16 POL PLN 2,420, ,464,000,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 2,265, ,760,000 Government of Montenegro, Reg S, 5.375%, 05/20/19 MNE EUR 2,240, ,122,700,000 Korea Moary Stabilization Bond, senior note, 2.22%, 10/02/16 KOR KRW 1,945, ,400,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 1,855, ,200,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 1,819, ,700,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 1,806, ,630,000 Government of Zambia, senior note, Reg S, 8.50%, 04/14/24 ZMB USD 1,792, ,260 Nota Do Tesouro Nacional, 10.00%, 01/01/23 BRA BRL 1,754, ,808,500,000 Korea Moary Stabilization Bond, senior note, 2.79%, 06/02/16 KOR KRW 1,669, ,600,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 1,601, ,778,000 Government of Peru, senior bond, 7.84%, 08/12/20 PER PEN 1,449, ,100 Nota Do Tesouro Nacional, senior note, 10.00%, 01/01/19 BRA BRL 1,420, ,280 Letra Tesouro Nacional, Strip, 01/01/18 BRA BRL 1,387, ,250,000 Government of Hungary, 4.125%, 02/19/18 HUN USD 1,298, ,351,300,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 1,246, ,600 Government of Portugal, senior note, Reg S, 5.65%, 02/15/24 PRT EUR 1,091, ,200,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 1,056, ,340 Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 1,014, ,626,397 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 979, ,410,000 Uruguay Notas del Tesoro, 9.50%, 01/27/16 URY UYU 880, ,700,000 Government of Malaysia, senior bond, 4.262%, 09/15/16 MYS MYR 780, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 778, ,000 Government of Ghana, Reg S, 7.875%, 08/07/23 GHA USD 743, ,600,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 742, ,100,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 676, ,060,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 656, ,920 Nota Do Tesouro Nacional, 10.00%, 01/01/21 BRA BRL 651, ,270,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 611, ,035,000 Government of Poland, 5.00%, 04/25/16 POL PLN 598, Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 544, ,810,000 Government of Poland, Strip, 01/25/16 POL PLN 501, ,500,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 494, ,580,000 Government of Ghana, 19.24%, 05/30/16 GHA GHS 472, ,560,000 Government of Ghana, 16.90%, 03/07/16 GHA GHS 458, ,000 Government of Slovenia, senior note, Reg S, 5.50%, 10/26/22 SVN USD 444, ,700 Government of Portugal, senior bond, Reg S, 4.95%, 10/25/23 PRT EUR 418, ,210,000 Government of Ghana, 19.04%, 09/24/18 GHA GHS 353, ,060 Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 332, ,370,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 295, ,540,323 Government of Uruguay, Index Linked, 4.25%, 04/05/27 URY UYU 271, ,000 Government of Ghana, 26.00%, 06/05/17 GHA GHS 269, ,970 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 248, ,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 243, ,700,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 227, ,274,496 Uruguay Notas del Tesoro, 14, Index Linked, 4.00%, 06/10/20 URY UYU 216, ,020,785 Government of Uruguay, senior bond, Index Linked, 5.00%, 09/14/18 URY UYU 212, ,444,800 Uruguay Notas del Tesoro, 13, Index Linked, 4.00%, 05/25/25 URY UYU 179, ,910,000 Uruguay Treasury Bill, Strip, 11/03/16 URY UYU 95, ,300,000 Korea Moary Stabilization Bond, senior note, 2.07%, 12/02/16 KOR KRW 79, ,777,920 Uruguay Notas del Tesoro, 18, Index Linked, 2.25%, 08/23/17 URY UYU 69, ,794,173 Government of Uruguay, senior bond, Index Linked, 3.70%, 06/26/37 URY UYU 66, ,000,000 Uruguay Treasury Bill, Strip, 04/21/16 URY UYU 34, ,030,000 Uruguay Treasury Bill, Strip, 09/15/16 URY UYU 34, ,010,000 Serbia Treasury Bond, 10.00%, 06/27/16 SER RSD 30, ,000 Government of El Salvador, senior bond, Reg S, 7.65%, 06/15/35 SVC USD 26, ,244 Government of Uruguay, senior bond, Index Linked, 4.00%, 07/10/30 URY UYU 19, ,200,000 Serbia Treasury Bond, 10.00%, 08/15/16 SER RSD 12, ,000 Uruguay Notas del Tesoro, 11.00%, 03/21/17 URY UYU 9, ,220,000 Korea Moary Stabilization Bond, senior note, 2.78%, 02/02/16 KOR KRW 7, ,000 Serbia Treasury Note, 10.00%, 12/19/16 SER RSD 7, ,000 Serbia Treasury Note, 10.00%, 10/17/16 SER RSD 6, Unaudited Semi-Annual Report

397 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 620,000 Serbia Treasury Bond, 10.00%, 11/21/18 SER RSD 6, ,000 Government of Poland, 4.75%, 04/25/17 POL PLN 6, ,000 Serbia Treasury Note, 10.00%, 01/30/16 SER RSD 2, ,000 Uruguay Treasury Bill, Strip, 07/28/16 URY UYU ,575, Securities Maturing Within One Year 5,036,280 Government of Mexico, 8.00%, 12/17/15 MEX MXN 35,678, ,664,200,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 33,616, ,184,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 9,583, ,100,000 Serbia Treasury Note, 10.00%, 11/08/15 SER RSD 6,506, ,323,400,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 5,787, ,148,000 Uruguay Treasury Bill, Strip, 08/20/15 URY UYU 5,672, ,530 Government of Mexico, 6.00%, 06/18/15 MEX MXN 5,026, ,002,500,000 Korea Moary Stabilization Bond, senior note, 2.90%, 12/02/15 KOR KRW 3,686, ,467,050,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 3,189, ,540,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 2,127, ,294,700,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 2,099, ,960,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 1,950, ,830,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 1,950, ,656,880 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 1,788, ,320,000 Moary Authority of Singapore Treasury Bill, 0.00%, 02/13/15 SGP SGD 1,749, ,719,000 Government of Poland, 5.50%, 04/25/15 POL PLN 1,635, ,950,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 1,414, ,640,000 Government of Sweden, 4.50%, 08/12/15 SWE SEK 1,400, ,880,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 1,389, ,860,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 1,375, ,670,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 1,339, ,470,000 Government of Poland, 6.25%, 10/24/15 POL PLN 1,307, ,510 Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 1,207, ,440,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 982, ,360,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 955, ,440,630 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 954, ,990,000 Uruguay Notas del Tesoro, 10.25%, 08/22/15 URY UYU 895, ,200,000 Uruguay Treasury Bill, Strip, 05/14/15 URY UYU 870, ,160,000 Serbia Treasury Bill, 0.00%, 07/24/15 SER RSD 830, ,750,000 Bank of Negara Moary Note, 0.00%, 06/04/15 MYS MYR 775, ,045,070 Mexico Treasury Bill, 0.00%, 07/23/15 MEX MXN 696, ,380,000 Bank of Negara Moary Note, 0.00%, 02/10/15 MYS MYR 678, ,109,000 Government of Ghana, 21.00%, 10/26/15 GHA GHS 647, ,600,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 640, ,080 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 620, ,300 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 620, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/02/15 SGP SGD 611, ,945,000 Government of Ghana, 24.00%, 05/25/15 GHA GHS 609, ,450 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 567, ,880 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 556, ,940,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 544, ,630 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 540, ,830,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 522, ,650,000,000 Government of Indonesia, FR27, 9.50%, 06/15/15 IDN IDR 380, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 02/23/15 SGP SGD 361, ,220 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 303, ,010,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 285, ,140,000 Uruguay Treasury Bill, 0.00%, 05/04/15 URY UYU 280, ,000 Bank of Negara Moary Note, 0.00%, 05/05/15 MYS MYR 265, ,000 Government of Peru, 9.91%, 05/05/15 PER PEN 248, ,750 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 246, ,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 244, ,020,000 Philippine Treasury Bill, 0.00%, 10/07/15 PHL PHP 220, ,000 Ford Motor Credit Co. LLC, senior note, 7.00%, 04/15/15 USA USD 203, ,000 Bank of Negara Moary Note, 0.00%, 04/16/15 MYS MYR 201, ,000 Bank of Negara Moary Note, 0.00%, 08/18/15 MYS MYR 190, ,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 184, ,530,000 Serbia Treasury Bill, 0.00%, 06/25/15 SER RSD 177, ,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/09/15 SGP SGD 173, ,740,000 Philippine Treasury Bill, 0.00%, 12/02/15 PHL PHP 169, ,472,000 Uruguay Treasury Bill, Strip, 03/26/15 URY UYU 138, ,000 Government of Poland, Strip, 07/25/15 POL PLN 129, ,090,000 Philippine Treasury Bill, 0.00%, 06/03/15 PHL PHP 90, ,000 Bank of Negara Moary Note, 0.00%, 06/16/15 MYS MYR 76, ,120,000 Philippine Treasury Bill, 0.00%, 11/04/15 PHL PHP 68, ,690,000 Philippine Treasury Bill, 0.00%, 05/06/15 PHL PHP 59, ,260,000 Uruguay Treasury Bill, Strip, 11/26/15 URY UYU 46, ,000 Bank of Negara Moary Note, 0.00%, 06/30/15 MYS MYR 45, ,105,274 Government of Uruguay, Index Linked, zero cpn., 03/26/15 URY UYU 44, ,140,000 Uruguay Treasury Bill, Strip, 07/02/15 URY UYU 43, ,000 Bank of Negara Moary Note, 0.00%, 04/28/15 MYS MYR 42, Unaudited Semi-Annual Report 395

398 Templeton Global Income Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 120,000 Bank of Negara Moary Note, 0.00%, 09/08/15 MYS MYR 33, ,000 Bank of Negara Moary Note, 0.00%, 06/03/15 MYS MYR 31, ,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 25, ,200,000 Korea Moary Stabilization Bond, senior note, 2.66%, 06/09/15 KOR KRW 13, ,000 Uruguay Treasury Bill, 0.00%, 10/23/15 URY UYU 11, ,040,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 10, ,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 8, ,000 Philippine Treasury Bill, 0.00%, 07/08/15 PHL PHP 7, ,000,000 Korea Moary Stabilization Bond, senior bond, 2.81%, 10/02/15 KOR KRW ,669, TOTAL BONDS 534,513, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 576,710, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Biotechnology 129,251 The Goldman Sachs Group Inc. into Gilead Sciences Inc., 3.50%, cvt. pfd., 144A USA USD 11,927, TOTAL SHARES 11,927, BONDS Corporate Bonds 400,000 NewPage Corp., Escrow Account ** USA USD Government and Municipal Bonds 280,000 Government of Ukraine, 144A, 9.25%, 07/24/17 UKR USD 172, Securities Maturing Within One Year 200,000 Fontainebleau Las Vegas, senior secured note, first lien, 144A, 11.00%, 06/15/15 * USA USD 2, TOTAL BONDS 174, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 12,102, TOTAL INVESTMENTS 1,856,935, Floating Rates are indicated as at December 31, 2014 * These Corporate Bonds are currently in default ** These securities are submitted to a Fair Valuation 396 Unaudited Semi-Annual Report

399 Templeton Global Smaller Companies Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Air Freight & Logistics 77,630 CTT-Correios de Portugal SA PRT EUR 753, ,350 Panalpina Welttransport Holding AG CHE CHF 718, ,471, Auto Components 1,028,000 Minth Group Ltd. CHN HKD 2,134, ,990 Leoni AG DEU EUR 1,254, ,290 Drew Industries Inc. USA USD 831, ,600 Keihin Corp. JPN JPY 817, ,038, Automobiles 23,696 Thor Industries Inc. USA USD 1,323, Banks 132,800 FirstMerit Corp. USA USD 2,508, ,928 BS Financial Group Inc. KOR KRW 2,146, ,300 Tisco Financial Group PCL, fgn. THA THB 686, ,040 TSB Banking Group PLC GBR GBP 373, ,715, Biotechnology 7,600 Basilea Pharmaceutica AG CHE CHF 704, Building Products 74,030 Simpson Manufacturing Co. Inc. USA USD 2,561, ,720 Wienerberger AG AUT EUR 965, ,526, Capital s 118,039 AllianceBernstein Holding LP USA USD 3,048, ,220 Janus Capital Group Inc. USA USD 2,794, ,340 Investment Technology Group Inc. USA USD 1,755, ,600 Canaccord Genuity Group Inc. CAN CAD 965, ,300 Value Partners Group Ltd. HKG HKD 772, ,889 Azimut Holding SpA ITA EUR 608, ,945, Chemicals 30,050 Chemtura Corp. USA USD 743, ,500 Yingde Gases Group Co. Ltd. CHN HKD 671, ,010 Rayonier Advanced Materials Inc. USA USD 624, ,039, Commercial Services & Supplies 136,290 HomeServe PLC GBR GBP 715, Communications Equipment 148,720 Brocade Communications Systems Inc. USA USD 1,760, Construction & Engineering 81,270 Tutor Perini Corp. USA USD 1,956, ,487 Arcadis NV NLD EUR 1,462, ,200 Badger Daylighting Inc. CAN CAD 665, ,083, Consumer Finance 63,820 Green Dot Corp. USA USD 1,307, ,990 Cash America International Inc. USA USD 768, ,076, Containers & Packaging 59,710 Huhtamaki OYJ FIN EUR 1,577, Diversified Consumer Services 40,269 Steiner Leisure Ltd. BHS USD 1,860, ,698 Dignity PLC GBR GBP 1,508, ,369, Diversified Financial Services 3,644,400 True Telecommunication Growth Infrastructure Fund THA THB 1,185, Unaudited Semi-Annual Report 397

400 Templeton Global Smaller Companies Fund Schedule of Investments as of December 31, 2014 (continued) face Electronic Equipment, Instruments & Components 318,599 Laird PLC GBR GBP 1,544, ,140 Knowles Corp. USA USD 1,369, ,828 TTM Technologies Inc. USA USD 1,060, ,000 Tripod Technology Corp. TWN TWD 945, ,919, Energy Equipment & Services 51,730 GulfMark Offshore Inc., A USA USD 1,263, ,800 Mullen Group Ltd. CAN CAD 693, ,124 Tecnicas Reunidas SA ESP EUR 620, ,720 Ezion Holdings Ltd. SGP SGD 532, ,400 Ensign Energy Services Inc. CAN CAD 267, ,376, Food & Staples Retailing 115,850 SpartanNash Co. USA USD 3,028, ,219 Marr SpA ITA EUR 912, ,190 X5 Retail Group NV, GDR, Reg S RUS USD 124, ,064, Food Products 194,390 Devro PLC GBR GBP 924, Gas Utilities 165,927 Aygaz AS TUR TRY 698, Health Care Equipment & Supplies 671,445 Sorin SpA ITA EUR 1,564, ,400 Draegerwerk AG & Co. KGAA, pfd. DEU EUR 852, ,417, Health Care Providers & Services 89,913 Amplifon SpA ITA EUR 533, Hotels, Restaurants & Leisure 48,151 Melia Hotels International SA ESP EUR 516, Household Durables 939,000 Techtronic Industries Co. Ltd. HKG HKD 3,027, ,782 Iida Group Holdings Co. Ltd. JPN JPY 1,921, ,000 Haier Electronics Group Co. Ltd. CHN HKD 1,318, ,300 Bellway PLC GBR GBP 764, ,170 Bovis Homes Group PLC GBR GBP 677, ,710, Leisure Products 116,520 Amer Sports OYJ FIN EUR 2,264, ,750 LeapFrog Enterprises Inc. USA USD 1,367, ,060 JAKKS Pacific Inc. USA USD 1,149, ,603 Callaway Golf Co. USA USD 589, ,371, Life Sciences Tools & Services 40,290 Gerresheimer AG DEU EUR 2,191, ,650 Tecan Group AG CHE CHF 528, ,719, Machinery 83,990 Hillenbrand Inc. USA USD 2,897, ,280 Aalberts Industries NV NLD EUR 2,412, ,145 DMG MORI SEIKI AG DEU EUR 1,653, ,580 Hyster-Yale Materials Handling Inc. USA USD 1,652, ,251 Construcciones y Auxiliar de Ferrocarriles SA ESP EUR 1,189, ,766 Turk Traktor ve Ziraat Makineleri AS TUR TRY 782, ,588, Media 123,390 UBM PLC GBR GBP 929, ,800 Ipsos FRA EUR 797, ,726, Metals & Mining 162,620 Stillwater Mining Co. USA USD 2,397, ,890 HudBay Minerals Inc. CAN CAD 2,142, ,539, Unaudited Semi-Annual Report

401 Templeton Global Smaller Companies Fund Schedule of Investments as of December 31, 2014 (continued) face Oil, Gas & Consumable Fuels 1,578,000 NewOcean Energy Holdings Ltd. HKG HKD 606, ,350 Swift Energy Co. USA USD 592, ,199, Personal Products 52,111 Kobayashi Pharmaceutical Co. Ltd. JPN JPY 3,061, ,490 Ontex Group NV BEL EUR 1,821, ,680 Oriflame Cosmetics SA, SDR SWE SEK 426, ,310, Pharmaceuticals 81,800 Tsumura & Co. JPN JPY 1,827, ,240 Vectura Group PLC GBR GBP 863, ,430 Orexo AB SWE SEK 719, ,000 China Medical System Holdings Ltd. CHN HKD 648, ,059, Professional Services 105,816 Heidrick & Struggles International Inc. USA USD 2,439, Real Estate Investment Trust (REIT) 42,200 Education Realty Trust Inc. USA USD 1,544, Real Estate Management & Development 91,180 Grand City Properties SA DEU EUR 1,342, ,231,450 Vista Land & Lifescapes Inc. PHL PHP 680, ,022, Road & Rail 58,470 ArcBest Corp. USA USD 2,711, Software 156,640 Glu Mobile Inc. USA USD 610, ,200 Capcom Co. Ltd. JPN JPY 594, ,204, Specialty Retail 53,890 Hibbett Sports Inc. USA USD 2,609, ,000 Luk Fook Holdings (International) Ltd. HKG HKD 1,466, ,380 The Finish Line Inc., A USA USD 835, ,188 West Marine Inc. USA USD 247, ,159, Technology Hardware, Storage & Peripherals 18,056 Sindoh Co. Ltd. KOR KRW 1,119, Textiles, Apparel & Luxury Goods 118,000 Asics Corp. JPN JPY 2,850, ,350 Columbia Sportswear Co. USA USD 2,687, ,500 Samsonite International SA HKG HKD 1,721, ,260 Deckers Outdoor Corp. USA USD 934, ,194, Thrifts & Mortgage Finance 216,757 LIC Housing Finance Ltd. IND INR 1,499, ,700 Genworth MI Canada Inc. CAN CAD 722, ,222, Companies & Distributors 83,210 Kloeckner & Co. SE DEU EUR 902, ,580 SIG PLC GBR GBP 743, ,645, Water Utilities 92,300 Companhia de Saneamento de Minas Gerais BRA BRL 874, TOTAL SHARES 134,351, INVESTMENTS FUNDS Diversified Financial Services 22,300 ishares Russell 2000 Value ETF USA USD 2,267, ,800 ishares Russell 2000 ETF USA USD 1,771, ,038, TOTAL INVESTMENTS FUNDS 4,038, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 138,389, Unaudited Semi-Annual Report 399

402 Templeton Global Smaller Companies Fund Schedule of Investments as of December 31, 2014 (continued) face TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET SHARES Metals & Mining 896,000 Sakari Resources Ltd. ** IDN SGD 1,133, Real Estate Management & Development 172 D Carnegie & Co. AB ** SWE SEK TOTAL SHARES 1,133, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 1,133, TOTAL INVESTMENTS 139,523, ** These securities are submitted to a Fair Valuation 400 Unaudited Semi-Annual Report

403 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Consumer Finance 230,800 GMAC Capital Trust I, 8.125%, pfd. USA USD 6,088, TOTAL SHARES 6,088, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 6,088, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Air Freight & Logistics 203 CEVA Holdings LLC, cvt. pfd., A-1 GBR USD 203, ,264 CEVA Holdings LLC, cvt. pfd., A-2 GBR USD 8,729, ,203 CEVA Holdings LLC GBR USD 4,032, ,965, Diversified Telecommunication Services 679 Centaur Funding Corp., 9.08%, pfd., 144A CYM USD 850, Paper & Forest Products 30,000 NewPage Holdings Inc. USA USD 2,722, TOTAL SHARES 16,537, BONDS Asset-Backed Securities 820,000 Government of Ivory Coast, Reg S, 5.75%, 12/31/32 CI USD 790, ,093 Peru Enhanced Pass-Through Finance Ltd., senior secured bond, A-1, Reg S, zero cpn., 05/31/18 PER USD 713, ,504, Corporate Bonds 225,640,000 Alfa Bond Issuance PLC, (Alfa Bank OJSC), loan participation, senior note, Reg S, 7.75%, 04/28/21 RUS USD 199,409, ,380,000 Alfa Bond Issuance PLC, (Alfa Bank OJSC), loan participation, senior note, Reg S, 7.875%, 09/25/17 RUS USD 111,573, ,000,000 General Electric Capital Corp., senior note, A, 8.50%, 04/06/18 USA MXN 74,320, ,400,000 Crown Castle International Corp., senior bond, 5.25%, 01/15/23 USA USD 60,885, ,500,000 Chesapeake Energy Corp., senior note, 6.625%, 08/15/20 USA USD 60,313, ,720,000 Edcon Pty. Ltd., senior secured note, first lien, Reg S, 9.50%, 03/01/18 ZAF USD 60,149, ,215,000 CHC Helicopter SA, senior secured note, first lien, 9.25%, 10/15/20 CAN USD 53,834, ,300,000 HCA Inc., senior secured note, first lien, 5.875%, 03/15/22 USA USD 47,521, ,100,000 Sirius XM Radio Inc., senior bond, 144A, 6.00%, 07/15/24 USA USD 47,367, ,690,000 DP World Ltd., Reg S, 6.85%, 07/02/37 ARE USD 46,045, ,800,000 Equinix Inc., senior bond, 5.375%, 04/01/23 USA USD 46,029, ,000,000 The Goodyear Tire & Rubber Co., senior note, 6.50%, 03/01/21 USA USD 45,795, ,000,000 Sprint Nextel Corp., senior note, 144A, 9.00%, 11/15/18 USA USD 43,316, ,500,000 DaVita HealthCare Partners Inc., senior note, 5.75%, 08/15/22 USA USD 43,081, ,000,000 First Data Corp., senior bond, %, 01/15/21 USA USD 42,840, ,874,000 Bank of America Corp., junior sub. bond, M, 8.125% to 05/15/18, FRN thereafter, Perpetual USA USD 42,129, ,700,000 CIT Group Inc., senior note, 5.00%, 08/15/22 USA USD 41,971, ,250,000 VPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 CAN USD 41,163, ,700,000 E*TRADE Financial Corp., senior note, 6.375%, 11/15/19 USA USD 40,150, ,300,000 Cemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 04/01/24 MEX USD 39,983, ,700,000 Intelsat Jackson Holdings SA, senior note, 7.50%, 04/01/21 LUX USD 39,406, ,400,000 Terex Corp., senior note, 6.00%, 05/15/21 USA USD 39,360, ,000,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 9.00%, 04/15/19 USA USD 37,440, ,800,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 02/01/21 USA USD 37,327, ,200,000 Penn Virginia Corp., senior note, 8.50%, 05/01/20 USA USD 37,191, ,300,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior note, 8.125%, 04/30/20 USA USD 36,186, ,000,000 Wind Acquisition Finance SA, senior note, second lien, 144A, 7.375%, 04/23/21 ITA USD 34,965, ,200,000 Citigroup Inc., junior sub. bond, M, 6.30% to 05/15/24, FRN thereafter, Perpetual USA USD 33,772, ,926,000 First Quantum Minerals Ltd., senior note, 144A, 6.75%, 02/15/20 CAN USD 33,602, ,000,000 Energy Transfer Equity LP, senior note, first lien, 7.50%, 10/15/20 USA USD 33,450, ,926,000 First Quantum Minerals Ltd., senior note, 144A, 7.00%, 02/15/21 CAN USD 33,418, ,000,000 Abengoa Finance SAU, senior note, 144A, 8.875%, 11/01/17 ESP USD 31,968, ,300,000 Jaguar Holding Co. I, senior note, 144A, PIK, 9.375%, 10/15/17 USA USD 31,042, ,000,000 Intelsat Jackson Holdings SA, senior bond, 5.50%, 08/01/23 LUX USD 29,906, ,000,000 MGM Resorts International, senior note, 6.625%, 12/15/21 USA USD 29,540, ,275,000 Halcon Resources Corp., senior note, 8.875%, 05/15/21 USA USD 28,993, ,828,000 LUKOIL International Finance BV, Reg S, 6.656%, 06/07/22 RUS USD 28,807, Unaudited Semi-Annual Report 401

404 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 31,820,000 LUKOIL International Finance BV, senior note, Reg S, 6.125%, 11/09/20 RUS USD 28,654, ,000,000 InterGen NV, secured bond, 144A, 7.00%, 06/30/23 NLD USD 28,650, ,550,000 Novelis Inc., senior note, 8.75%, 12/15/20 CAN USD 28,275, ,800,000 PBF Holding Co. LLC, first lien, 8.25%, 02/15/20 USA USD 28,078, ,000,000 First Data Corp., senior secured bond, second lien, 144A, 8.25%, 01/15/21 USA USD 27,950, ,000,000 JPMorgan Chase & Co., junior sub. bond, R, 6.00% to 08/01/23, FRN thereafter, Perpetual USA USD 27,790, ,000,000 T-Mobile USA Inc., senior bond, 6.375%, 03/01/25 USA USD 27,499, ,500,000 JBS USA LLC/Finance Inc., senior note, 144A, 8.25%, 02/01/20 USA USD 26,966, ,100,000 Navistar International Corp., senior note, 8.25%, 11/01/21 USA USD 26,829, ,000,000 CHS/Community Health Systems Inc., senior note, 7.125%, 07/15/20 USA USD 26,687, ,200,000 New Look Bondco I PLC, secured note, first lien, Reg S, 8.75%, 05/14/18 GBR GBP 26,596, ,000,000 Calpine Corp., senior bond, 5.75%, 01/15/25 USA USD 26,357, ,000,000 Meritor Inc., senior note, 6.75%, 06/15/21 USA USD 26,250, ,500,000 CHS/Community Health Systems Inc., senior note, 8.00%, 11/15/19 USA USD 26,215, ,500,000 Digicel Group Ltd., senior note, 144A, 6.00%, 04/15/21 BMU USD 26,142, ,000,000 Clayton Williams Energy Inc., senior note, 7.75%, 04/01/19 USA USD 25,650, ,400,000 Chaparral Energy Inc., senior note, 8.25%, 09/01/21 USA USD 25,116, ,400,000 Gant Co. Inc., senior note, 5.125%, 07/15/20 USA USD 25,010, ,000,000 Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 * USA USD 24,937, ,000,000 Kerling PLC, senior secured note, first lien, Reg S, %, 02/01/17 GBR EUR 24,603, ,000,000 Reynolds Group Issuer Inc./LLC/SA, senior note, 8.50%, 05/15/18 USA USD 24,600, ,000,000 iheartcommunications Inc., senior secured bond, first lien, 9.00%, 03/01/21 USA USD 24,593, ,500,000 BMC Software Finance Inc., senior note, 144A, 8.125%, 07/15/21 USA USD 24,097, ,400,000 Navient Corp., senior note, 8.45%, 06/15/18 USA USD 23,914, ,000,000 GMAC Inc., sub. note, 8.00%, 12/31/18 USA USD 23,887, ,000,000 Wind Acquisition Finance SA, senior secured note, first lien, 144A, 4.75%, 07/15/20 ITA USD 23,750, ,900,000 Visant Corp., senior note, 10.00%, 10/01/17 USA USD 23,672, ,000,000 DISH DBS Corp., senior note, 5.875%, 07/15/22 USA USD 23,632, ,500,000 ArcelorMittal, senior note, 5.50%, 03/01/21 LUX USD 22,281, ,000,000 Sprint Nextel Corp., senior note, 6.00%, 11/15/22 USA USD 22,170, ,800,000 The Royal Bank of Scotland PLC, sub. note, 6.934%, 04/09/18 GBR EUR 22,069, ,000,000 CGG SA, senior note, 6.50%, 06/01/21 FRA USD 21,420, ,700,000 HCA Inc., senior note, 7.50%, 02/15/22 USA USD 21,411, ,700,000 Hertz Corp., senior note, 5.875%, 10/15/20 USA USD 20,958, ,000, BC ULC/New Red Finance Inc., secured note, second lien, 144A, 6.00%, 04/01/22 CAN USD 20,600, ,000,000 Offshore Group Investment Ltd., senior secured note, first lien, 7.50%, 11/01/19 USA USD 20,283, ,210,000 HSBK (Europe) BV, senior note, Reg S, 7.25%, 05/03/17 KAZ USD 20,239, ,233,000 Calpine Corp., senior secured bond, 144A, 7.875%, 01/15/23 USA USD 20,193, ,400,000 Navient Corp., senior note, 5.50%, 01/15/19 USA USD 19,885, ,600,000 Caesars Entertainment Operating Co. Inc., senior secured note, first lien, 11.25%, 06/01/17 USA USD 19,630, ,700,000 Linn Energy LLC/Finance Corp., senior note, 6.25%, 11/01/19 USA USD 19,408, ,000,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior bond, 5.50%, 04/15/23 USA USD 19,400, ,500,000 Post Holdings Inc., senior note, 144A, 6.75%, 12/01/21 USA USD 18,963, ,400,000 Ceramtec Group GmbH, senior note, 144A, 8.25%, 08/15/21 DEU EUR 18,850, ,400,000 Linn Energy LLC/Finance Corp., senior note, 7.75%, 02/01/21 USA USD 18,136, ,000,000 Barminco Finance Pty. Ltd., senior note, 144A, 9.00%, 06/01/18 AUS USD 18,012, ,900,000 Samson Investment Co., senior note, 9.75%, 02/15/20 USA USD 17,991, ,300,000 CenturyLink Inc., senior bond, 6.75%, 12/01/23 USA USD 17,909, ,200,000 Ally Financial Inc., senior note, 7.50%, 09/15/20 USA USD 17,860, ,400,000 Frontier Communications Corp., senior note, 8.50%, 04/15/20 USA USD 17,248, ,000,000 Univision Communications Inc., senior secured note, first lien, 144A, 7.875%, 11/01/20 USA USD 17,120, ,169,000 HSBC Holdings PLC, sub. note, 6.50%, 09/15/37 GBR USD 16,976, ,800,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.75%, 01/15/23 DEU EUR 16,843, ,000,000 CONSOL Energy Inc., senior note, 144A, 5.875%, 04/15/22 USA USD 16,830, ,249,000 ICICI Bank Ltd., junior sub. notes, Reg S, 6.375% to 04/30/17, FRN thereafter, 04/30/22 IND USD 16,827, ,000,000 Kinder Morgan Finance Co. LLC, senior secured note, 144A, 6.00%, 01/15/18 USA USD 16,332, ,100,000 TransDigm Inc., senior sub. note, 6.00%, 07/15/22 USA USD 16,140, ,700,000 UPCB Finance VI Ltd., senior secured note, first lien, 144A, 6.875%, 01/15/22 NLD USD 16,013, ,300,000 Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 06/01/21 USA USD 15,963, ,422,222 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.875%, 02/01/18 AUS USD 15,908, ,600,000 Gant Co. Inc., senior bond, 144A, 5.50%, 09/15/24 USA USD 15,678, ,200,000 Sealed Air Corp., senior note, 144A, 6.50%, 12/01/20 USA USD 15,620, ,600,000 Linn Energy LLC/Finance Corp., senior note, 8.625%, 04/15/20 USA USD 15,400, Unaudited Semi-Annual Report

405 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 15,600,000 Digicel Group Ltd., senior note, 144A, 8.25%, 09/30/20 BMU USD 15,268, ,800,000 AmSurg Corp., senior note, 144A, 5.625%, 07/15/22 USA USD 15,244, ,500,000 Te Healthcare Corp., senior note, 8.125%, 04/01/22 USA USD 15,120, ,500,000 Frontier Communications Corp., senior note, 7.125%, 01/15/23 USA USD 14,826, ,700,000 Virgin Media Finance PLC, senior bond, Reg S, 6.375%, 10/15/24 GBR GBP 14,645, ,000,000 W&T Offshore Inc., senior note, 8.50%, 06/15/19 USA USD 14,630, ,000,000 Virgin Media Secured Finance PLC, senior secured bond, first lien, 144A, 5.50%, 01/15/25 GBR USD 14,498, ,500,000 Toll Brothers Finance Corp., senior bond, 5.625%, 01/15/24 USA USD 14,310, ,100,000 Stena International SA, secured bond, 144A, 5.75%, 03/01/24 SWE USD 14,269, ,000,000 FMG Resources (August 2006) Pty. Ltd., senior note, 144A, 6.00%, 04/01/17 AUS USD 13,431, ,000,000 Energy XXI Gulf Coast Inc., senior note, 9.25%, 12/15/17 USA USD 13,300, ,500,000 Play Finance 2 SA, secured note, first lien, Reg S, 5.25%, 02/01/19 LUX EUR 13,194, ,000,000 UPC Holding BV, senior note, Reg S, 6.375%, 09/15/22 NLD EUR 13,120, ,600,000 Dynegy Finance I Inc./Dynegy Finance II Inc., senior secured bond, first lien, 144A, 7.625%, 11/01/24 USA USD 12,867, ,400,000 Pinnacle Entertainment Inc., senior note, 6.375%, 08/01/21 USA USD 12,834, ,000,000 UPCB Finance II Ltd., senior secured note, Reg S, 6.375%, 07/01/20 NLD EUR 12,736, ,600,000 Ineos Group Holdings SA, senior note, Reg S, 6.50%, 08/15/18 CHE EUR 12,689, ,400,000 UPC Holding BV, senior note, Reg S, 6.75%, 03/15/23 NLD EUR 12,469, ,800,000 Pinnacle Entertainment Inc., senior sub. note, 7.75%, 04/01/22 USA USD 12,331, ,300,000 CCO Holdings LLC/CCO Holdings Capital Corp., senior bond, 5.25%, 09/30/22 USA USD 12,315, ,354,000 Petro Co. of Trinidad and Tobago Ltd., senior note, Reg S, 9.75%, 08/14/19 TTO USD 12,269, ,525,000 eaccess Ltd., senior note, 144A, 8.25%, 04/01/18 JPN USD 12,122, ,700,000 Alere Inc., senior sub. note, 6.50%, 06/15/20 USA USD 11,846, ,852,000 Univision Communications Inc., senior secured bond, first lien, 144A, 6.75%, 09/15/22 USA USD 11,665, ,900,000 HCA Holdings Inc., senior note, 6.25%, 02/15/21 USA USD 11,635, ,000,000 Unitymedia KabelBW GmbH, senior bond, 144A, 6.125%, 01/15/25 DEU USD 11,398, ,300,000 CONSOL Energy Inc., senior note, 6.375%, 03/01/21 USA USD 11,356, ,930,000 Toyota Motor Credit Corp., senior note, zero cpn., 02/15/17 JPN MXN 10,571, ,000,000 DISH DBS Corp., senior note, 7.125%, 02/01/16 USA USD 10,537, ,400,000 Stena AB, senior bond, 144A, 7.00%, 02/01/24 SWE USD 10,459, ,800,000 Ineos Group Holdings SA, senior note, Reg S, 5.75%, 02/15/19 CHE EUR 10,301, ,500,000 CIT Group Inc., senior note, 5.375%, 05/15/20 USA USD 10,076, ,825,000 inventiv Health Inc., senior secured note, 144A, 9.00%, 01/15/18 USA USD 10,070, ,900,000 Scientific Games International Inc., senior note, 144A, 10.00%, 12/01/22 USA USD 10,041, ,250,000 Edcon Pty. Ltd., senior secured note, first lien, Reg S, 9.50%, 03/01/18 ZAF EUR 10,007, ,800,000 Offshore Group Investment Ltd., senior bond, first lien, 7.125%, 04/01/23 USA USD 9,936, ,500,000 VTR Finance BV, senior secured note, 144A, 6.875%, 01/15/24 LUX USD 9,713, ,680,000 Halyk Savings Bank of Kazakhstan JSC, senior note, Reg S, 7.25%, 01/28/21 KAZ USD 9,528, ,100,000 Grifols Worldwide Operations Ltd., senior note, 144A, 5.25%, 04/01/22 USA USD 9,329, ,000,000 Te Healthcare Corp., senior note, 144A, 5.50%, 03/01/19 USA USD 9,247, ,500,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 8,988, ,000,000 Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 06/21/19 USA USD 8,970, ,393,000 Edcon Holdings Pty. Ltd., senior secured note, Reg S, %, 06/30/19 ZAF EUR 8,799, ,600,000 Energy Transfer Equity LP, senior bond, first lien, 5.875%, 01/15/24 USA USD 8,772, ,600,000 Scientific Games International Inc., senior secured note, first lien, 144A, 7.00%, 01/01/22 USA USD 8,750, ,000,000 California Resources Corp., senior bond, 144A, 6.00%, 11/15/24 USA USD 8,500, ,100,000 CHS/Community Health Systems Inc., senior secured note, first lien, 5.125%, 08/15/18 USA USD 8,403, ,700,000 Valeant Pharmaceuticals International Inc., senior note, 144A, 7.50%, 07/15/21 USA USD 8,344, ,600,000 Virgin Media Secured Finance PLC, senior secured note, first lien, 144A, 5.375%, 04/15/21 GBR USD 7,923, ,200,000 CONSOL Energy Inc., senior note, 8.25%, 04/01/20 USA USD 7,497, ,000,000 Sterling International Inc., senior note, 11.00%, 10/01/19 USA USD 7,472, ,700,000 Play Finance 1 SA, senior note, Reg S, 6.50%, 08/01/19 LUX EUR 7,328, ,400,000 California Resources Corp., senior note, 144A, 5.50%, 09/15/21 USA USD 7,224, ,300,000 iheartcommunications Inc., senior secured note, first lien, 144A, 9.00%, 09/15/22 USA USD 7,172, ,800,000 T-Mobile USA Inc., senior note, 6.542%, 04/28/20 USA USD 7,046, ,910,000 TNK-BP Finance SA, Reg S, 7.25%, 02/02/20 RUS USD 6,944, ,700,000 CommScope Holdings Co. Inc., senior note, 144A, PIK, 6.625%, 06/01/20 USA USD 6,934, ,000,000 JPMorgan Chase & Co., junior sub. bond, V, 5.00% to 07/30/19, FRN thereafter, Perpetual USA USD 6,884, ,800,000 TransDigm Inc., senior sub. bond, 6.50%, 07/15/24 USA USD 6,868, ,900,000 Frontier Communications Corp., senior note, 9.25%, 07/01/21 USA USD 6,836, ,600,000 Energy XXI Gulf Coast Inc., senior note, 144A, 6.875%, 03/15/24 USA USD 6,835, ,500,000 Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22 USA USD 6,727, ,500,000 JBS USA LLC/Finance Inc., senior note, 144A, 7.25%, 06/01/21 USA USD 6,727, Unaudited Semi-Annual Report 403

406 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Corporate Bonds (continued) 6,400,000 Te Healthcare Corp., senior note, 144A, 5.00%, 03/01/19 USA USD 6,424, ,253,000 CGG SA, senior note, 7.75%, 05/15/17 FRA USD 6,255, ,000,000 T-Mobile USA Inc., senior note, 6.731%, 04/28/22 USA USD 6,202, ,700,000 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, senior secured note, first lien, Reg S, 5.625%, 04/15/23 DEU EUR 6,188, ,000,000 T-Mobile USA Inc., senior note, 6.633%, 04/28/21 USA USD 6,180, ,000,000 Calpine Corp., senior note, 5.375%, 01/15/23 USA USD 6,067, ,200,000 Frontier Communications Corp., senior note, 8.75%, 04/15/22 USA USD 5,837, ,100,000 Royal Bank of Scotland Group PLC, sub. note, 6.125%, 12/15/22 GBR USD 5,549, ,900,000 Sprint Nextel Corp., senior note, 144A, 7.00%, 03/01/20 USA USD 5,316, ,700,000 Sealed Air Corp., senior note, 144A, 8.375%, 09/15/21 USA USD 5,275, ,000,000 Novelis Inc., senior note, 8.375%, 12/15/17 CAN USD 5,193, ,000,000 Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 05/15/23 USA USD 5,075, ,600,000 Smithfield Foods Inc., senior note, 144A, 5.25%, 08/01/18 USA USD 4,683, ,200,000 Halcon Resources Corp., senior note, 9.25%, 02/15/22 USA USD 4,603, ,600,000 eaccess Ltd., senior note, Reg S, 8.375%, 04/01/18 JPN EUR 4,590, ,300,000 T-Mobile USA Inc., senior bond, 6.50%, 01/15/24 USA USD 4,418, ,000,000 Te Healthcare Corp., first lien, 6.00%, 10/01/20 USA USD 4,305, ,452,000 Rabobank Nederland, senior note, 8.75%, 01/24/17 NLD MXN 3,965, ,600,000 Chaparral Energy Inc., senior note, 9.875%, 10/01/20 USA USD 3,836, ,700,000 Smithfield Foods Inc., senior note, 144A, 5.875%, 08/01/21 USA USD 3,776, ,500,000 Clear Channel Worldwide Holdings Inc., senior note, 6.50%, 11/15/22 USA USD 3,578, ,800,000 Post Holdings Inc., senior note, 144A, 6.00%, 12/15/22 USA USD 3,576, ,600,000 Sabine Pass Liquefaction LLC, first lien, 5.625%, 04/15/23 USA USD 3,537, ,300,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.875%, 03/01/22 USA USD 3,308, ,400,000 Regency Energy Partners LP/Regency Energy Finance Corp., senior note, 5.00%, 10/01/22 USA USD 3,230, ,552,000 LUKOIL International Finance BV, 144A, 6.656%, 06/07/22 RUS USD 3,143, ,500,000 Algeco Scotsman Global Finance PLC, secured note, Reg S, 9.00%, 10/15/18 GBR EUR 3,076, ,700,000 ICICI Bank Ltd., junior sub. bond, 144A, 6.375% to 04/30/17, FRN thereafter, 04/30/22 IND USD 2,787, ,600,000 Royal Bank of Scotland Group PLC, sub. note, 5.125%, 05/28/24 GBR USD 2,648, ,500,000 Intelsat Jackson Holdings SA, senior bond, 6.625%, 12/15/22 LUX USD 2,581, ,000,000 Quicksilver Resources Inc., senior note, 9.125%, 08/15/19 USA USD 2,550, ,500,000 T-Mobile USA Inc., senior note, 6.125%, 01/15/22 USA USD 2,546, ,000,000 Reynolds Group Issuer Inc./LLC/SA, senior secured note, first lien, 7.125%, 04/15/19 USA USD 2,072, ,900,000 MGM Resorts International, senior note, 6.75%, 10/01/20 USA USD 1,999, ,200,000 Abengoa Finance SAU, senior note, 144A, 7.75%, 02/01/20 ESP USD 1,963, ,500,000 Clear Channel Worldwide Holdings Inc., senior sub. note, 7.625%, 03/15/20 USA USD 1,563, ,000,000 Hutchison Whampoa International Ltd., Reg S, 7.45%, 11/24/33 HKG USD 1,475, ,050,000 Petro Co. of Trinidad and Tobago Ltd., senior note, 144A, 9.75%, 08/14/19 TTO USD 1,244, ,200,000 Frontier Communications Corp., senior bond, 7.625%, 04/15/24 USA USD 1,242, ,220,000 HSBK (Europe) BV, senior note, 144A, 7.25%, 05/03/17 KAZ USD 1,221, ,000,000 Woori Bank, junior sub. note, 144A, 6.208% to 05/02/17, FRN thereafter, 05/02/67 KOR USD 1,072, ,000 Virgin Media Finance PLC, senior bond, 144A, 6.375%, 04/15/23 GBR USD 947, ,000 Frontier Communications Corp., senior note, 7.875%, 01/15/27 USA USD 902, ,000 GE Capital Trust IV, sub. bond, Reg S, 4.625% to 09/15/16, FRN thereafter, 09/15/66 USA EUR 501, ,000 Gaz Capital SA, (OJSC Gazprom), loan participation, senior bond, Reg S, 5.136%, 03/22/17 RUS EUR 403, ,956,332, Government and Municipal Bonds 840,860,000 Government of Portugal, Reg S, 5.125%, 10/15/24 PRT USD 886,602, ,033,111,578 Government of Uruguay, senior bond, Index Linked, 4.375%, 12/15/28 URY UYU 747,293, ,810,740 Government of Ireland, senior bond, 5.40%, 03/13/25 IRL EUR 703,773, ,131,125,000 Government of Poland, 4.75%, 10/25/16 POL PLN 336,290, ,866,000 Government of Ireland, 5.00%, 10/18/20 IRL EUR 336,169, ,134,806,000 Government of Poland, Strip, 01/25/16 POL PLN 314,649, ,420,900,000 Korea Moary Stabilization Bond, senior note, 2.07%, 12/02/16 KOR KRW 308,405, ,636,620,000 Government of the Philippines, senior note, 1.625%, 04/25/16 PHL PHP 301,570, ,606,930,000 Government of Hungary, A, 6.75%, 11/24/17 HUN HUF 263,528, ,122,290 Government of Mexico, 6.25%, 06/16/16 MEX MXN 261,421, ,190,090,000 Government of Hungary, 6.50%, 06/24/19 HUN HUF 257,531, ,920,000 Government of Serbia, Reg S, 7.25%, 09/28/21 SER USD 255,086, ,890,000 Government of Serbia, senior note, Reg S, 4.875%, 02/25/20 SER USD 227,730, ,965,350,000 Government of Hungary, A, 6.00%, 11/24/23 HUN HUF 227,208, ,813,230,000 Government of Hungary, 5.50%, 02/12/16 HUN HUF 222,615, ,100,000 Government of Slovenia, senior note, Reg S, 5.85%, 05/10/23 SVN USD 208,114, ,520,000 Government of Ukraine, senior note, Reg S, 7.80%, 11/28/22 UKR USD 204,097, ,720,000 Government of Hungary, senior note, 6.375%, 03/29/21 HUN USD 201,099, Unaudited Semi-Annual Report

407 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 219,650,000 Government of Ecuador, senior note, Reg S, 7.95%, 06/20/24 ECU USD 188,899, ,994,330 Government of Mexico, 7.25%, 12/15/16 MEX MXN 188,282, ,229,000 Government of Ghana, 23.00%, 08/21/17 GHA GHS 185,966, ,792,600,000 Government of India, senior note, 8.83%, 11/25/23 IND INR 180,224, ,600,000 Government of Hungary, 6.00%, 01/11/19 HUN EUR 168,358, ,230,000 Government of Hungary, senior note, 6.25%, 01/29/20 HUN USD 165,763, ,822,000 Government of Ireland, 4.50%, 04/18/20 IRL EUR 164,564, ,841,100,000 Government of Hungary, B, 6.75%, 02/24/17 HUN HUF 162,734, ,660 Letra Tesouro Nacional, Strip, 01/01/16 BRA BRL 159,865, ,940,000 Government of Poland, 5.00%, 04/25/16 POL PLN 158,206, ,825,414,157 Uruguay Notas del Tesoro, 14, Index Linked, 4.00%, 06/10/20 URY UYU 157,196, ,658,400,000 Government of Hungary, 7.50%, 11/12/20 HUN HUF 147,435, ,170 Nota Do Tesouro Nacional, 10.00%, 01/01/23 BRA BRL 146,191, ,570,000 Government of Ukraine, Reg S, 7.75%, 09/23/20 UKR USD 144,746, ,989,200,000 Korea Treasury Bond, senior note, 3.00%, 12/10/16 KOR KRW 143,207, ,531,126,912 Uruguay Notas del Tesoro, 13, Index Linked, 4.00%, 05/25/25 URY UYU 142,803, ,225 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/23 BRA BRL 142,773, ,895,425 Government of Ghana, Reg S, 7.875%, 08/07/23 GHA USD 141,202, ,288,839,000 Uruguay Notas del Tesoro, 9.50%, 01/27/16 URY UYU 135,197, ,430,000 Financing of Infrastructure Projects State Enterprise, Reg S, 8.375%, 11/03/17 UKR USD 128,203, ,095 Nota Do Tesouro Nacional, %, 01/01/17 BRA BRL 120,121, ,835,560,000 Korea Moary Stabilization Bond, senior note, 2.80%, 04/02/16 KOR KRW 114,225, ,154,810,000 Government of Hungary, 4.00%, 04/25/18 HUN HUF 111,878, ,907,900,000 Korea Moary Stabilization Bond, senior note, 2.46%, 08/02/16 KOR KRW 110,256, ,390 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/19 BRA BRL 110,193, ,544,535,398 Uruguay Notas del Tesoro, 17, Index Linked, 2.75%, 06/16/16 URY UYU 102,034, ,690 Nota Do Tesouro Nacional, senior note, 10.00%, 01/01/19 BRA BRL 97,965, ,028,000 Government of Ireland, 5.90%, 10/18/19 IRL EUR 95,930, ,630,900,000 Korea Moary Stabilization Bond, senior note, 2.22%, 10/02/16 KOR KRW 94,053, ,650,000,000 Government of Indonesia, FR40, 11.00%, 09/15/25 IDN IDR 92,898, ,820,000 Government of Ghana, 19.04%, 09/24/18 GHA GHS 89,335, ,348,200,000 Government of Sri Lanka, B, 8.00%, 06/01/16 LKA LKR 88,361, ,170 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/45 BRA BRL 87,219, ,150,000 Government of Hungary, 5.375%, 02/21/23 HUN USD 84,833, ,390,000 Government of Kenya, senior note, Reg S, 6.875%, 06/24/24 KEN USD 84,356, ,170,000 Government of Ukraine, Reg S, 9.25%, 07/24/17 UKR USD 80,168, ,090,000 Government of Ghana, 24.44%, 05/29/17 GHA GHS 78,377, ,512,000 Government of Poland, FRN, 2.69%, 01/25/17 POL PLN 76,738, ,437,000 Government of Poland, FRN, 2.69%, 01/25/21 POL PLN 76,639, ,720 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/22 BRA BRL 75,825, ,100,799,000 Uruguay Treasury Bill, Strip, 01/14/16 URY UYU 75,521, ,388,580,000 Government of Hungary, B, 5.50%, 06/24/25 HUN HUF 72,811, ,811,996,800 Uruguay Notas del Tesoro, 18, Index Linked, 2.25%, 08/23/17 URY UYU 70,472, ,830,000,000 Government of Indonesia, FR46, 9.50%, 07/15/23 IDN IDR 68,932, ,204,520,000 Government of Hungary, A, 7.00%, 06/24/22 HUN HUF 66,779, ,900,000 Government of Poland, 5.75%, 09/23/22 POL PLN 63,271, ,507,625,787 Government of Uruguay, Index Linked, 4.25%, 04/05/27 URY UYU 62,561, ,876,080,000 Government of Hungary, A, 5.50%, 12/20/18 HUN HUF 62,378, ,631,500,000 Government of India, senior bond, 8.60%, 06/02/28 IND INR 60,840, ,876,040,000 Government of Hungary, 5.50%, 12/22/16 HUN HUF 60,803, ,330,000 Government of Ukraine, senior note, Reg S, 7.50%, 04/17/23 UKR USD 57,968, ,790,000 Government of Ukraine, senior note, Reg S, 7.95%, 02/23/21 UKR USD 55,848, ,890 Letra Tesouro Nacional, Strip, 10/01/16 BRA BRL 55,555, ,660,000 Government of Slovenia, senior note, Reg S, 5.50%, 10/26/22 SVN USD 55,192, ,501,600,000 Government of India, senior bond, 7.80%, 05/03/20 IND INR 55,029, ,320,363,398 Uruguay Notas del Tesoro, 10, Index Linked, 4.25%, 01/05/17 URY UYU 54,337, ,257,500,000 Serbia Treasury Bond, 10.00%, 10/23/24 SER RSD 51,696, ,112,340,000 Serbia Treasury Bond, 10.00%, 06/27/16 SER RSD 51,660, ,490,289,000 Uruguay Treasury Bill, Strip, 07/28/16 URY UYU 50,245, ,050,000 Government of Ghana, 23.00%, 02/13/17 GHA GHS 49,372, ,333,780,000 Serbia Treasury Bond, 10.00%, 09/11/21 SER RSD 48,848, ,358,601,000 Uruguay Treasury Bill, Strip, 04/21/16 URY UYU 47,289, ,655,790,000 Serbia Treasury Note, 10.00%, 07/10/17 SER RSD 46,594, ,041,300,000 Government of Sri Lanka, B, 5.80%, 07/15/17 LKA LKR 44,842, ,330,000 Government of Hungary, 4.125%, 02/19/18 HUN USD 43,969, ,595,690,000 Government of Sri Lanka, A, 8.00%, 11/15/18 LKA LKR 43,857, ,729,000 Government of Croatia, Reg S, 6.75%, 11/05/19 HRV USD 43,778, ,850,000 Financing of Infrastructure Projects State Enterprise, Reg S, 7.40%, 04/20/18 UKR USD 43,490, ,799,600,000 Government of India, senior note, 7.16%, 05/20/23 IND INR 42,126, ,629,300,000 Government of India, senior note, 8.12%, 12/10/20 IND INR 41,919, ,155,828,755 Uruguay Notas del Tesoro, 19, Index Linked, 2.50%, 09/27/22 URY UYU 41,289, ,328 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/16 BRA BRL 40,047, ,907,800,000 Serbia Treasury Note, 10.00%, 12/19/16 SER RSD 39,347, ,395,750 Mexican Udibonos, Index Linked, 5.00%, 06/16/16 MEX MXN 38,893, ,784,000 Inter-American Development Bank, senior note, 7.50%, 12/05/24 SP MXN 38,839, ,952 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/17 BRA BRL 35,046, Unaudited Semi-Annual Report 405

408 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Government and Municipal Bonds (continued) 35,159,900,000 Korea Treasury Bond, senior bond, 4.00%, 03/10/16 KOR KRW 32,865, ,480,000 Uruguay Notas del Tesoro, 11.00%, 03/21/17 URY UYU 31,888, ,116,300,000 Government of Sri Lanka, A, 5.80%, 01/15/17 LKA LKR 30,850, ,208,748 Government of Uruguay, senior bond, Index Linked, 5.00%, 09/14/18 URY UYU 30,501, ,950,000 Government of Poland, 4.75%, 04/25/17 POL PLN 30,368, ,180,087 Mexican Udibonos, Index Linked, 3.50%, 12/14/17 MEX MXN 30,279, ,960,242 Government of Uruguay, senior bond, Index Linked, 4.00%, 07/10/30 URY UYU 29,769, ,646,880,000 Government of Sri Lanka, A, 9.00%, 05/01/21 LKA LKR 29,667, ,220,000,000 Government of Indonesia, FR42, 10.25%, 07/15/27 IDN IDR 29,456, ,133,070,000 Serbia Treasury Note, 10.00%, 03/20/21 SER RSD 29,118, ,655,280,000 Government of Sri Lanka, C, 8.50%, 04/01/18 LKA LKR 29,004, ,155,000 Government of Ghana, 19.24%, 05/30/16 GHA GHS 27,839, ,540,000,000 Government of Indonesia, FR47, 10.00%, 02/15/28 IDN IDR 23,943, ,435 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/18 BRA BRL 23,875, ,370,000 Government of Ghana, 25.40%, 07/31/17 GHA GHS 23,075, ,274,240,000 Serbia Treasury Note, 10.00%, 03/01/16 SER RSD 23,012, ,000,000 Government of the Philippines, senior bond, 7.00%, 01/27/16 PHL PHP 22,477, ,107,430,000 Serbia Treasury Note, 10.00%, 05/22/16 SER RSD 21,311, ,678,950,000 Government of Sri Lanka, D, 8.50%, 06/01/18 LKA LKR 21,301, ,104,300,000 Serbia Treasury Bond, 10.00%, 08/15/16 SER RSD 21,246, ,409,690,000 Government of Sri Lanka, 10.60%, 07/01/19 LKA LKR 20,707, ,024,000,000 Government of Indonesia, FR43, 10.25%, 07/15/22 IDN IDR 19,319, ,920 Letra Tesouro Nacional, Strip, 07/01/16 BRA BRL 18,158, ,376,800,000 Government of Sri Lanka, B, 6.40%, 10/01/16 LKA LKR 18,053, ,436,438 Mexican Udibonos, Index Linked, 4.00%, 06/13/19 MEX MXN 18,053, ,057,900,000 Government of India, senior bond, 8.28%, 09/21/27 IND INR 17,158, ,033,200,000 Government of India, senior note, 8.35%, 05/14/22 IND INR 16,708, ,352,000,000 Government of Indonesia, FR34, 12.80%, 06/15/21 IDN IDR 15,221, ,699,680,000 Government of Sri Lanka, 10.60%, 09/15/19 LKA LKR 14,670, ,120 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/20 BRA BRL 14,182, ,921,155 Mexican Udibonos, Index Linked, 2.50%, 12/10/20 MEX MXN 13,359, ,311,560,000 Serbia Treasury Note, 10.00%, 05/08/17 SER RSD 13,152, ,424,000,000 Government of Indonesia, 7.875%, 04/15/19 IDN IDR 13,033, ,255,820,000 Serbia Treasury Note, 10.00%, 11/08/17 SER RSD 12,521, ,178,270,000 Serbia Treasury Note, 10.00%, 10/17/16 SER RSD 11,880, ,560,000 Government of Singapore, senior note, 1.125%, 04/01/16 SGP SGD 11,823, ,080,000 Uruguay Treasury Bill, Strip, 11/03/16 URY UYU 11,163, ,052,020,000 Serbia Treasury Bond, 10.00%, 11/21/18 SER RSD 10,336, ,005,710,000 Serbia Treasury Bond, 10.00%, 04/25/16 SER RSD 10,170, ,650,000 Government of the Philippines, senior bond, 9.125%, 09/04/16 PHL PHP 9,985, ,434,000,000 Government of Indonesia, FR31, 11.00%, 11/15/20 IDN IDR 9,957, ,438,000 Government of Peru, senior bond, 7.84%, 08/12/20 PER PEN 9,756, ,440,000,000 Government of Indonesia, FR48, 9.00%, 09/15/18 IDN IDR 9,719, ,970,000 Serbia Treasury Note, 10.00%, 01/30/16 SER RSD 9,270, ,050,000 Government of Ghana, 16.90%, 03/07/16 GHA GHS 7,649, ,180,000,000 Government of Indonesia, FR39, 11.75%, 08/15/23 IDN IDR 7,648, ,480,000 Uruguay Treasury Bill, Strip, 09/15/16 URY UYU 7,628, ,826,000,000 Government of Indonesia, senior bond, FR53, 8.25%, 07/15/21 IDN IDR 7,521, ,552,000 Government of Hungary, senior note, Reg S, 4.375%, 07/04/17 HUN EUR 7,216, ,506,200,000 Korea Treasury Bond, senior note, 2.75%, 06/10/16 KOR KRW 6,003, ,600,000 Government of Ghana, 26.00%, 06/05/17 GHA GHS 6,002, ,998,000,000 Government of Indonesia, FR36, 11.50%, 09/15/19 IDN IDR 5,930, ,021,906 Government of Uruguay, senior bond, Index Linked, 3.70%, 06/26/37 URY UYU 5,529, ,860,000 Government of Sri Lanka, 11.20%, 07/01/22 LKA LKR 5,225, ,790,000 Government of Sri Lanka, B, 8.50%, 07/15/18 LKA LKR 5,157, ,924,000,000 Government of Indonesia, FR35, 12.90%, 06/15/22 IDN IDR 5,082, ,640,000 Government of Sri Lanka, A, 7.50%, 08/15/18 LKA LKR 4,249, ,200,000 Government of Sri Lanka, A, 6.40%, 08/01/16 LKA LKR 4,243, ,850,000,000 Government of Indonesia, FR44, 10.00%, 09/15/24 IDN IDR 3,738, ,357,000 Government of Hungary, senior note, Reg S, 5.75%, 06/11/18 HUN EUR 3,257, ,325,000,000 Government of Indonesia, FR45, 9.75%, 05/15/37 IDN IDR 3,159, ,550,000,000 Government of Indonesia, FR28, 10.00%, 07/15/17 IDN IDR 2,693, ,897,000,000 Government of Indonesia, senior note, 8.50%, 10/15/16 IDN IDR 2,535, ,100,000 Government of India, senior note, 7.28%, 06/03/19 IND INR 2,104, ,000,000 Government of Ghana, 25.48%, 04/24/17 GHA GHS 2,054, ,920 Nota Do Tesouro Nacional, Index Linked, 6.00%, 08/15/24 BRA BRL 1,798, ,200,000 Government of Sri Lanka, 8.00%, 01/01/17 LKA LKR 1,374, ,130,000 Government of Sri Lanka, 8.25%, 03/01/17 LKA LKR 1,270, ,000 Government of Hungary, senior note, Reg S, 3.875%, 02/24/20 HUN EUR 1,259, ,143,000 Government of Ghana, Reg S, 8.50%, 10/04/17 GHA USD 1,153, ,000 Government of Hungary, senior note, Reg S, 3.50%, 07/18/16 HUN EUR 934, ,110,000 Uruguay Treasury Bill, Strip, 06/09/16 URY UYU 685, ,120,000 Government of Ukraine, senior note, Reg S, 6.75%, 11/14/17 UKR USD 685, ,000,000,000 Government of Indonesia, FR30, 10.75%, 05/15/16 IDN IDR 591, ,000 Government of Vietnam, Reg S, 6.75%, 01/29/20 VND USD 575, ,000 Government of El Salvador, senior bond, Reg S, 7.65%, 06/15/35 SVC USD 449, ,227,245 Uruguay Notas del Tesoro, 16, Index Linked, 3.25%, 01/27/19 URY UYU 285, ,153,813, Unaudited Semi-Annual Report

409 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year 944,447,280,000 Korea Treasury Bond, senior note, 2.75%, 12/10/15 KOR KRW 868,942, ,534,840 Government of Mexico, 8.00%, 12/17/15 MEX MXN 740,548, ,177,040,000 Korea Moary Stabilization Bond, senior bond, 2.47%, 04/02/15 KOR KRW 721,346, ,051,059,220 Mexico Treasury Bill, 0.00%, 04/01/15 MEX MXN 707,608, ,210,170,000 Korea Moary Stabilization Bond, senior note, 2.74%, 02/02/15 KOR KRW 664,297, ,814,000,000 Korea Moary Stabilization Bond, senior note, 2.76%, 06/02/15 KOR KRW 579,289, ,311,630,000 Government of Sweden, 4.50%, 08/12/15 SWE SEK 567,495, ,500,000 FHLB, 0.00%, 01/07/15 USA USD 405,499, ,534,490 Government of Mexico, 6.00%, 06/18/15 MEX MXN 381,580, ,186,080,000 Government of Malaysia, 3.741%, 02/27/15 MYS MYR 339,436, ,147,410 Mexico Treasury Bill, Strip, 05/28/15 MEX MXN 259,406, ,722,000 Government of Canada, 1.00%, 02/01/15 CAN CAD 233,990, ,144,000 Government of Malaysia, 4.72%, 09/30/15 MYS MYR 224,139, ,890,000 Government of Poland, 5.50%, 04/25/15 POL PLN 188,420, ,655,871,000 Uruguay Treasury Bill, Strip, 08/20/15 URY UYU 175,884, ,270,473,000 Uruguay Notas del Tesoro, 10.25%, 08/22/15 URY UYU 173,882, ,210,680,000 Korea Treasury Bond, senior note, 3.25%, 06/10/15 KOR KRW 161,919, ,286,000 Government of Ghana, 21.00%, 10/26/15 GHA GHS 154,159, ,505,000 Bank of Negara Moary Note, 0.00%, 01/20/15 MYS MYR 144,338, ,990,000 Bank of Negara Moary Note, 0.00%, 03/03/15 MYS MYR 114,340, ,758,659,194 Uruguay Notas del Tesoro, Index Linked, 4.00%, 06/14/15 URY UYU 113,152, ,011,080,000 Korea Moary Stabilization Bond, senior bond, 2.80%, 08/02/15 KOR KRW 112,937, ,649,000 Canada Treasury Bill, 0.00%, 02/12/15 CAN CAD 106,370, ,833,820 Mexico Treasury Bill, 0.00%, 06/25/15 MEX MXN 105,445, ,390,000 Government of Malaysia, 3.835%, 08/12/15 MYS MYR 102,796, ,450,000 Bank of Negara Moary Note, 0.00%, 03/05/15 MYS MYR 97,103, ,212,000 Government of Poland, 6.25%, 10/24/15 POL PLN 96,906, ,190,785,000 Uruguay Notas del Tesoro, 10.50%, 03/21/15 URY UYU 89,169, ,315,620 Mexico Treasury Bill, 0.00%, 09/17/15 MEX MXN 89,013, ,196,000 Canada Treasury Bill, 0.00%, 03/12/15 CAN CAD 87,001, ,135,000 Government of Poland, Strip, 07/25/15 POL PLN 86,535, ,166,000,000 Korea Treasury Bond, senior note, 4.00%, 09/10/15 KOR KRW 86,284, ,617,900,000 Serbia Treasury Note, 10.00%, 03/01/15 SER RSD 86,171, ,507,120 Mexico Treasury Bill, 0.00%, 07/23/15 MEX MXN 84,293, ,219,000 Moary Authority of Singapore Treasury Bill, 0.00%, 02/13/15 SGP SGD 79,365, ,889,064,000 Uruguay Treasury Bill, Strip, 03/26/15 URY UYU 75,395, ,237,170,000 Serbia Treasury Note, 10.00%, 04/27/15 SER RSD 72,612, ,595,250 Mexico Treasury Bill, 0.00%, 03/12/15 MEX MXN 72,538, ,439,100 Mexico Treasury Bill, 0.00%, 06/11/15 MEX MXN 72,534, ,295,000 Bank of Negara Moary Note, 0.00%, 01/08/15 MYS MYR 71,259, ,424,060,000 Government of Hungary, 7.75%, 08/24/15 HUN HUF 69,202, ,727,218,000 Uruguay Treasury Bill, 0.00%, 05/04/15 URY UYU 67,870, ,717,379,000 Uruguay Treasury Bill, Strip, 05/14/15 URY UYU 67,348, ,622,340 Mexico Treasury Bill, 0.00%, 11/12/15 MEX MXN 66,346, ,470 Letra Tesouro Nacional, Strip, 10/01/15 BRA BRL 66,188, ,150,000 Bank of Negara Moary Note, 0.00%, 08/11/15 MYS MYR 64,507, ,437,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/30/15 SGP SGD 62,195, ,939,000,000 Serbia Treasury Bond, 10.00%, 04/04/15 SER RSD 59,452, ,490,000 Bank of Negara Moary Note, 0.00%, 04/16/15 MYS MYR 58,210, ,260,000 Bank of Negara Moary Note, 0.00%, 01/22/15 MYS MYR 56,028, ,900,000 Bank of Negara Moary Note, 0.00%, 03/12/15 MYS MYR 55,105, ,310,000 Bank of Negara Moary Note, 0.00%, 07/16/15 MYS MYR 54,577, ,600 Nota Do Tesouro Nacional, Index Linked, 6.00%, 05/15/15 BRA BRL 53,077, ,000,000,000 Serbia Treasury Note, 10.00%, 03/21/15 SER RSD 50,019, ,043,850 Mexico Treasury Bill, 0.00%, 04/16/15 MEX MXN 47,752, ,260,000 Bank of Negara Moary Note, 0.00%, 03/24/15 MYS MYR 46,914, ,780,000 Bank of Negara Moary Note, 0.00%, 10/01/15 MYS MYR 46,211, ,920,000 Government of Malaysia, 3.197%, 10/15/15 MYS MYR 44,240, ,318,900,000 Serbia Treasury Note, 10.00%, 10/18/15 SER RSD 43,647, ,810,000 Bank of Negara Moary Note, 0.00%, 02/17/15 MYS MYR 41,811, ,440,000 Bank of Negara Moary Note, 0.00%, 06/30/15 MYS MYR 38,943, ,660,000 Government of Ghana, 14.99%, 02/23/15 GHA GHS 38,637, ,335,900 Uruguay Treasury Bill, Strip, 07/02/15 URY UYU 37,762, ,230,000 Bank of Negara Moary Note, 0.00%, 01/29/15 MYS MYR 37,439, ,620,000 Bank of Negara Moary Note, 0.00%, 06/16/15 MYS MYR 36,795, ,750,000 Bank of Negara Moary Note, 0.00%, 08/04/15 MYS MYR 35,549, ,833,600,000 Government of Sri Lanka, A, 11.00%, 08/01/15 LKA LKR 30,059, ,240,000,000 Government of the Philippines, senior bond, 8.375%, 05/22/15 PHL PHP 28,186, ,825,000 Government of Ghana, 24.00%, 05/25/15 GHA GHS 27,543, ,692,600,000 Serbia Treasury Note, 10.00%, 09/14/15 SER RSD 27,184, ,596,480 Mexico Treasury Bill, 0.00%, 10/01/15 MEX MXN 26,873, ,625,000 Bank of Negara Moary Note, 0.00%, 05/19/15 MYS MYR 25,594, ,529,600,000 Korea Moary Stabilization Bond, 0.00%, 01/13/15 KOR KRW 25,158, ,330,000 Bank of Negara Moary Note, 0.00%, 04/28/15 MYS MYR 20,466, ,550,000 Bank of Negara Moary Note, 0.00%, 04/23/15 MYS MYR 19,123, ,190,000 Philippine Treasury Bill, 0.00%, 09/02/15 PHL PHP 18,830, ,600,000 Bank of Negara Moary Note, 0.00%, 06/03/15 MYS MYR 18,783, ,000,000 Government of the Philippines, senior bond, 6.375%, 05/13/15 PHL PHP 17,814, Unaudited Semi-Annual Report 407

410 Templeton Global Total Return Fund Schedule of Investments as of December 31, 2014 (continued) face Securities Maturing Within One Year (continued) 19,117,800,000 Korea Moary Stabilization Bond, senior note, 2.13%, 10/08/15 KOR KRW 17,487, ,140,000 Bank of Negara Moary Note, 0.00%, 05/28/15 MYS MYR 17,253, ,580,000,000 Korea Treasury Bond, senior note, 4.50%, 03/10/15 KOR KRW 16,141, ,920,000 Philippine Treasury Bill, 0.00%, 07/08/15 PHL PHP 15,807, ,392 Letra Tesouro Nacional, Strip, 01/01/15 BRA BRL 15,568, ,415,000 Uruguay Treasury Bill, Strip, 10/08/15 URY UYU 14,688, ,685,000 ING Americas Issuance BV, 5.50%, 08/24/15 UKR UAH 14,256, ,160,000 Philippine Treasury Bill, 0.00%, 12/02/15 PHL PHP 13,737, ,370,000 Uruguay Treasury Bill, Strip, 11/26/15 URY UYU 13,497, ,560,000 Bank of Negara Moary Note, 0.00%, 11/03/15 MYS MYR 13,215, ,890,000 Philippine Treasury Bill, 0.00%, 10/07/15 PHL PHP 12,451, ,496,300,000 Government of Sri Lanka, B, 11.00%, 09/01/15 LKA LKR 11,773, ,077,100,000 Serbia Treasury Note, 10.00%, 09/28/15 SER RSD 10,879, ,020,000 Philippine Treasury Bill, 0.00%, 04/08/15 PHL PHP 8,688, ,249,460,000 Government of Hungary, A, 8.00%, 02/12/15 HUN HUF 8,656, ,800,000 Serbia Treasury Note, 10.00%, 12/06/15 SER RSD 7,706, ,260,000 Government of Sri Lanka, A, 6.50%, 07/15/15 LKA LKR 7,512, ,070,000 Philippine Treasury Bill, 0.00%, 06/03/15 PHL PHP 7,334, ,960,000 Bank of Negara Moary Note, 0.00%, 09/22/15 MYS MYR 6,963, ,560,000 Bank of Negara Moary Note, 0.00%, 10/27/15 MYS MYR 6,551, ,321,600 ING Americas Issuance BV, Reg S, 5.50%, 08/25/15 UKR UAH 5,777, ,560,000 Philippine Treasury Bill, 0.00%, 08/05/15 PHL PHP 5,487, ,830,000 Uruguay Treasury Bill, 0.00%, 07/10/15 URY UYU 5,319, ,820,000 Moary Authority of Singapore Treasury Bill, 0.00%, 01/20/15 SGP SGD 5,146, ,900,000 Serbia Treasury Note, 10.00%, 11/08/15 SER RSD 4,837, ,880,000 Bank of Negara Moary Note, 0.00%, 04/07/15 MYS MYR 4,785, ,480,000 Government of Sri Lanka, A, 8.50%, 11/01/15 LKA LKR 4,544, ,255,000 Rabobank Nederland, zero cpn., 10/05/15 NLD MXN 3,991, ,430,000 Philippine Treasury Bill, 0.00%, 11/04/15 PHL PHP 3,876, ,253,306 Government of Uruguay, Index Linked, zero cpn., 03/26/15 URY UYU 3,755, ,290,000 Philippine Treasury Bill, 0.00%, 05/06/15 PHL PHP 3,378, ,800,000 Government of Peru, 9.91%, 05/05/15 PER PEN 2,326, ,108,200 Citigroup Inc., Reg S, FRN, 5.50%, 09/01/15 UKR UAH 1,745, ,480,000 Uruguay Treasury Bill, 0.00%, 10/23/15 URY UYU 1,125, ,124,400 Citigroup Inc., FRN, 5.50%, 09/01/15 UKR UAH 1,087, ,132,400 Citigroup Inc., FRN, 5.50%, 09/01/15 UKR UAH 1,027, ,085,000 Government of Canada, 1.50%, 08/01/15 CAN CAD 937, ,150,000 Uruguay Treasury Bill, 0.00%, 06/05/15 URY UYU 704, ,000 Canada Treasury Bill, 0.00%, 04/23/15 CAN CAD 369, ,140,000 Government of Sri Lanka, A, 11.75%, 03/15/15 LKA LKR 355, ,657,000 ING Americas Issuance BV, Reg S, 5.50%, 08/21/15 UKR UAH 339, ,525,960, TOTAL BONDS 29,637,610, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 29,654,148, TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET BONDS Corporate Bonds 15,000,000 NewPage Corp., Escrow Account ** USA USD Securities Maturing Within One Year 2,429,500 Fontainebleau Las Vegas, senior secured note, first lien, 144A, 11.00%, 06/15/15 * USA USD 30, TOTAL BONDS 30, TOTAL TRANSFERABLE SECURITIES NOT ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING NOR DEALT IN ON ANOTHER REGULATED MARKET 30, TOTAL INVESTMENTS 29,660,267, Income may be received in additional securities and/or cash * These Corporate Bonds are currently in default Floating Rates are indicated as at December 31, 2014 ** These securities are submitted to a Fair Valuation 408 Unaudited Semi-Annual Report

411 Templeton Growth (Euro) Fund Schedule of Investments as of December 31, 2014 (Currency EUR) face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Aerospace & Defense 6,055,985 BAE Systems PLC GBR GBP 36,821, Air Freight & Logistics 1,092,860 United Parcel Service Inc., B USA USD 100,407, ,084,588 TNT Express NV NLD EUR 22,632, ,040, Airlines 7,637,330 Deutsche Lufthansa AG DEU EUR 105,624, ,811,600 International Consolidated Airlines Group SA GBR GBP 73,962, ,586, Auto Components 1,105,030 Cie Generale des Etablissements Michelin, B FRA EUR 83,175, Automobiles 9,484,600 Nissan Motor Co. Ltd. JPN JPY 69,145, ,217,000 Toyota Motor Corp. JPN JPY 63,440, ,585, Banks 3,324,010 Citigroup Inc. USA USD 148,646, ,933,579 HSBC Holdings PLC GBR HKD 101,940, ,684,156 ING Groep NV, IDR NLD EUR 94,049, ,874,850 BNP Paribas SA FRA EUR 92,355, ,640,160 JPMorgan Chase & Co. USA USD 84,827, ,308,930 SunTrust Banks Inc. USA USD 79,953, ,930,410 Credit Agricole SA FRA EUR 74,571, ,759,466 UniCredit SpA ITA EUR 73,406, ,636,792 DBS Group Holdings Ltd. SGP SGD 59,586, ,084,865 KB Financial Group Inc., ADR KOR USD 56,205, ,314,620 Commerzbank AG DEU EUR 25,414, ,862,500 Bangkok Bank PCL, fgn. THA THB 18,834, ,864 KB Financial Group Inc. KOR KRW 5,213, ,005, Biotechnology 1,020,640 Amgen Inc. USA USD 134,361, ,340 Gilead Sciences Inc. USA USD 17,943, ,305, Capital s 3,368,260 Morgan Stanley USA USD 108,007, ,705,218 Credit Suisse Group AG CHE CHF 77,247, ,254, Chemicals 1,323,566 Akzo Nobel NV NLD EUR 76,303, Commercial Services & Supplies 10,189,318 Serco Group PLC GBR GBP 21,092, Communications Equipment 5,096,820 Cisco Systems Inc. USA USD 117,163, ,866,822 Ericsson, B SWE SEK 58,656, ,820, Construction & Engineering 978,790 FLSmidth & Co. AS DNK DKK 35,787, Construction Materials 4,232,921 CRH PLC IRL EUR 84,235, ,424 CRH PLC IRL GBP 2,932, ,167, Consumer Finance 261,520 Capital One Financial Corp. USA USD 17,841, Diversified Telecommunication Services 8,172,794 Telefonica SA ESP EUR 97,419, ,699,000 Singapore Telecommunications Ltd. SGP SGD 67,389, ,389,500 Orange SA FRA EUR 62,111, ,538 Verizon Communications Inc. USA USD 37,483, ,362,912 Vivendi SA FRA EUR 28,198, ,602, Unaudited Semi-Annual Report 409

412 Templeton Growth (Euro) Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Electrical Equipment 6,953,260 Dongfang Electric Corp. Ltd., H CHN HKD 10,568, Electronic Equipment, Instruments & Component 5,575,080 Flextronics International Ltd. SGP USD 51,511, Energy Equipment & Services 4,133,920 Noble Corp. PLC USA USD 56,610, ,130 Baker Hughes Inc. USA USD 29,894, ,740 Technip SA FRA EUR 13,329, ,917 Saipem SpA ITA EUR 5,836, ,815 Paragon Offshore PLC USA USD 2,158, ,829, Food & Staples Retailing 1,116,507 CVS Health Corp. USA USD 88,868, ,997,980 Metro AG DEU EUR 75,878, ,197,970 Tesco PLC GBR GBP 54,044, ,791, Health Care Equipment & Supplies 1,638,990 Medtronic Inc. USA USD 97,797, ,801,170 Getinge AB, B SWE SEK 71,617, ,415, Industrial Conglomerates 703,950 Siemens AG DEU EUR 65,995, ,229,500 Koninklijke Philips NV NLD EUR 53,842, ,837, Insurance 2,457,470 American International Group Inc. USA USD 113,754, ,360,355 AXA SA FRA EUR 83,740, ,050,340 Swiss Re AG CHE CHF 73,035, ,069,274 Aviva PLC GBR GBP 69,086, ,240 Muenchener Rueckversicherungs-Gesellschaft AG DEU EUR 35,344, ,158,800 NN Group NV NLD EUR 28,790, ,751, Life Sciences Tools & Services 1,581,200 QIAGEN NV NLD EUR 30,612, Machinery 2,347,570 Navistar International Corp. USA USD 64,955, Media 3,065,080 Comcast Corp., Special A USA USD 145,819, ,630,360 Twenty-First Century Fox Inc., A USA USD 83,486, ,720 The Walt Disney Co. USA USD 69,414, ,040 Viacom Inc., B USA USD 42,042, ,171,263 Sky PLC GBR GBP 36,725, ,456,005 News Corp., A USA USD 31,846, ,335, Metals & Mining 4,574,784 Mining and Metallurgical Co. Norilsk Nickel OJSC, ADR RUS USD 53,763, ,002 POSCO KOR KRW 53,291, ,054, Multiline Retail 622,880 Target Corp. USA USD 39,076, Oil, Gas & Consumable Fuels 19,627,400 Talisman Energy Inc. CAN CAD 127,113, ,950,770 Total SA, B FRA EUR 82,946, ,205,026 Royal Dutch Shell PLC, B GBR GBP 63,427, ,175,868 Eni SpA ITA EUR 60,591, ,424,038 BP PLC GBR GBP 55,189, ,040,700 Kunlun Energy Co. Ltd. CHN HKD 54,159, ,461,500 China Shenhua Energy Co. Ltd., H CHN HKD 52,382, ,741,080 Galp Energia SGPS SA, B PRT EUR 48,403, ,290 Chevron Corp. USA USD 44,898, ,980,207 Petroleo Brasileiro SA, ADR, pfd. BRA USD 37,462, ,576, Pharmaceuticals 2,967,103 Teva Pharmaceutical Industries Ltd., ADR ISR USD 141,023, ,954,780 Pfizer Inc. USA USD 127,554, ,910 Roche Holding AG CHE CHF 123,826, Unaudited Semi-Annual Report

413 Templeton Growth (Euro) Fund Schedule of Investments as of December 31, 2014 (continued) (Currency EUR) face Pharmaceuticals (continued) 1,454,030 Sanofi FRA EUR 110,011, ,124,347 GlaxoSmithKline PLC GBR GBP 90,831, ,450 Merck KGaA DEU EUR 67,005, ,426,270 Merck & Co. Inc. USA USD 66,940, ,477 Actavis PLC USA USD 55,838, ,031, Software 5,565,730 Microsoft Corp. USA USD 213,659, ,149,580 Oracle Corp. USA USD 42,724, ,070 SAP SE DEU EUR 35,426, ,810, Specialty Retail 21,859,579 Kingfisher PLC GBR GBP 95,881, ,505,590 Best Buy Co. Inc. USA USD 48,502, ,384, Technology Hardware, Storage & Peripherals 194,840 Samsung Electronics Co. Ltd. KOR KRW 195,362, ,715,700 Hewlett-Packard Co. USA USD 123,232, ,326,339 Konica Minolta Inc. JPN JPY 39,536, ,131, Wireless Telecommunication Services 6,803,362 Turkcell Iletisim Hizmetleri AS, ADR TUR USD 85,013, ,107,934 Vodafone Group PLC GBR GBP 57,672, ,898,000 China Mobile Ltd. CHN HKD 18,348, ,724 Mobile TeleSystems, ADR RUS USD 2,971, ,005, TOTAL SHARES 6,615,072, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 6,615,072, TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET SHARES Diversified Financial Services 115,348 Templeton China Opportunities Fund, AT Class F2 (Acc) LUX USD 39,288, TOTAL SHARES 39,288, TOTAL TRANSFERABLE SECURITIES DEALT IN ON ANOTHER REGULATED MARKET 39,288, TOTAL INVESTMENTS 6,654,361, Unaudited Semi-Annual Report 411

414 Templeton Korea Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Auto Components 108,813 Hankook Tire Co. Ltd. KOR KRW 5,242, ,730 Hyundai Mobis Co. Ltd. KOR KRW 3,394, ,636, Automobiles 21,580 Hyundai Motor Co. KOR KRW 3,334, Banks 181,950 Shinhan Financial Group Co. Ltd. KOR KRW 7,394, ,590 Hana Financial Group Inc. KOR KRW 3,966, ,720 KB Financial Group Inc. KOR KRW 3,824, ,185, Chemicals 23,680 LG Chem Ltd. KOR KRW 3,918, Construction & Engineering 121,450 Hyundai Development Co. KOR KRW 4,297, ,283 Daelim Industrial Co. Ltd. KOR KRW 3,987, ,942 Samsung Engineering Co. Ltd. KOR KRW 3,532, ,817, Food Products 60,128 Binggrae Co. Ltd. KOR KRW 4,145, Machinery 463,350 Daewoo Shipbuilding & Marine Engineering Co. Ltd. KOR KRW 7,900, ,720 Samsung Heavy Industries Co. Ltd. KOR KRW 4,263, ,163, Multiline Retail 15,362 Lotte Shopping Co. Ltd. KOR KRW 3,834, Oil, Gas & Consumable Fuels 67,529 SK Innovation Co. Ltd. KOR KRW 5,254, Textiles, Apparel & Luxury Goods 77,180 Fila Korea Ltd. KOR KRW 7,867, ,464 Youngone Holdings Co. Ltd. KOR KRW 3,126, ,480 Youngone Corp. KOR KRW 2,300, ,294, TOTAL SHARES 81,585, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 81,585, TOTAL INVESTMENTS 81,585, Unaudited Semi-Annual Report

415 Templeton Latin America Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Airlines 142,457 Copa Holdings SA PAN USD 14,764, Banks 37,384,939 Itausa Investimentos Itau SA, pfd. BRA BRL 132,095, ,306,148 Itau Unibanco Holding SA, ADR BRA USD 95,052, ,247,500 Banco Bradesco SA, ADR, pfd. BRA USD 83,529, ,900 Credicorp Ltd. PER USD 40,829, ,557,368 Grupo Financiero Banorte SAB de CV MEX MXN 36,250, ,116,090 Intercorp Financial Services Inc., Reg S PER USD 33,929, ,902 Bancolombia SA, ADR COL USD 13,545, ,990 Banco Santander Chile, ADR CHL USD 9,761, ,994, Beverages 11,348,647 Ambev SA BRA BRL 69,821, ,771,824 Cia Cervecerias Unidas SA, ADR CHL USD 51,417, ,097,945 Embotelladora Andina SA, pfd., A CHL CLP 14,790, ,028, Chemicals 251,136 Sociedad Quimica Y Minera de Chile SA Soquimich, ADR CHL USD 5,997, Commercial Services & Supplies 530,400 Valid Solucoes E Servicos DE Seguranca EM Meios DE Pagamento E Identificacao SA BRA BRL 8,462, Consumer Finance 11,493,341 Credito Real SAB de CV MEX MXN 24,614, Diversified Consumer Services 733,400 Estacio Participacoes SA BRA BRL 6,573, ,700 Ser Educacional SA BRA BRL 1,767, ,340, Diversified Financial Services 13,503,000 BM&F BOVESPA SA BRA BRL 50,048, ,337,600 Bolsa Mexicana De Valores SA MEX MXN 24,167, ,216, Energy Equipment & Services 1,599,639 Tenaris SA, ADR ARG USD 48,325, Food & Staples Retailing 31,384,123 Wal-Mart de Mexico SAB de CV, V MEX MXN 67,531, Food Products 2,933,609 Grupo Herdez SAB de CV MEX MXN 7,042, Household Products 3,433,600 Kimberly Clark de Mexico SAB de CV, A MEX MXN 7,476, Independent Power and Renewable Electricity Producers 825,136 AES Tiete SA BRA BRL 4,766, IT Services 16,604,239 Sonda SA CHL CLP 39,380, Machinery 5,027,700 Marcopolo SA, pfd. BRA BRL 6,299, Metals & Mining 9,599,503 Bradespar SA, pfd. BRA BRL 51,654, ,629,574 Ternium SA, ADR ARG USD 46,385, ,635,600 Southern Copper Corp. PER USD 46,123, ,950,500 Grupo Mexico SA de CV, B MEX MXN 31,776, ,307,700 Vale SA, ADR, pfd., A BRA USD 24,013, ,636,170 Compania de Minas Buenaventura SA, ADR PER USD 15,641, ,596, Multiline Retail 7,233,175 Lojas Americanas SA BRA BRL 35,655, ,123,750 Lojas Americanas SA, pfd. BRA BRL 26,752, ,229,300 Grupo Sanborns SA de CV MEX MXN 8,156, ,563, Oil, Gas & Consumable Fuels 2,577,055 Pacific Rubiales Energy Corp. COL CAD 15,956, Unaudited Semi-Annual Report 413

416 Templeton Latin America Fund Schedule of Investments as of December 31, 2014 (continued) face Paper & Forest Products 6,233,561 Duratex SA BRA BRL 18,835, Personal Products 3,307,403 Natura Cosmeticos SA BRA BRL 39,639, Road & Rail 3,643,358 Localiza Rent a Car SA BRA BRL 48,957, ,652,880 JSL SA BRA BRL 22,323, ,280, Software 658,900 Totvs SA BRA BRL 8,677, Specialty Retail 1,811,800 Cia Hering BRA BRL 13,805, Water Utilities 10,087,095 Inversiones Aguas Metropolitanas SA CHL CLP 15,625, TOTAL SHARES 1,368,222, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 1,368,222, TOTAL INVESTMENTS 1,368,222, Unaudited Semi-Annual Report

417 Templeton Thailand Fund Schedule of Investments as of December 31, 2014 face TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING SHARES Banks 2,378,300 Siam Commercial Bank PCL, fgn. THA THB 13,164, ,839,400 Kasikornbank PCL, fgn. THA THB 12,810, ,360 Bangkok Bank PCL, fgn. THA THB 5,838, ,066,883 Tisco Financial Group PCL, fgn. THA THB 5,256, ,861,154 Krung Thai Bank PCL, fgn. THA THB 4,736, ,807, Beverages 13,130,000 Thai Beverage PCL, fgn. THA SGD 6,838, Building Products 1,192,600 Dynasty Ceramic PCL, fgn. THA THB 2,049, Chemicals 1,791,312 PTT Global Chemical PCL, fgn. THA THB 2,792, Construction & Engineering 9,979,200 Unique Engineering & Construction PCL, fgn. THA THB 3,490, Construction Materials 661,746 Siam Cement PCL, fgn. THA THB 9,056, Food & Staples Retailing 921,700 Big C Supercenter PCL, NVDR THA THB 6,643, ,100 Big C Supercenter PCL, fgn. THA THB 1,254, ,898, Food Products 1,830,000 Thai Union Frozen Products PCL, fgn. THA THB 5,036, ,200 Univanich Palm Oil PCL, fgn. THA THB 136, ,173, Health Care Providers & Services 37,831,525 Bangkok Chain Hospital PCL, fgn. THA THB 9,089, ,692,600 Bangkok Dusit Medical Services PCL, fgn. THA THB 4,547, ,636, Hotels, Restaurants & Leisure 58,749,300 The Erawan Group PCL, fgn. THA THB 8,290, ,983,254 Minor International PCL, fgn. THA THB 1,960, ,700 MK Restaurant Group PCL, fgn. THA THB 623, ,874, Insurance 385,000 Thaire Life Assurance PCL THA THB 162, Media 9,018,000 Major Cineplex Group PCL, fgn. THA THB 7,610, ,113,670 BEC World PCL, fgn. THA THB 6,380, ,137,272 VGI Global Media PCL, fgn. THA THB 1,125, ,117, Multiline Retail 576,400 Robinson Department Store PCL, fgn. THA THB 788, Oil, Gas & Consumable Fuels 911,930 PTT PCL, fgn. THA THB 8,986, ,639,252 PTT Exploration and Production PCL, fgn. THA THB 5,583, ,569, Real Estate Management & Development 24,853,000 Land and Houses PCL, NVDR THA THB 6,840, ,393,500 Quality Houses PCL, fgn. THA THB 6,722, ,048,096 Land and Houses PCL, fgn. THA THB 6,619, ,500,900 Amata Corp. PCL, fgn. THA THB 5,014, ,699,900 Supalai PCL, fgn. THA THB 4,177, ,908,666 Sansiri PCL, fgn. THA THB 874, ,427,800 Hemaraj Land and Development PCL, fgn. THA THB 324, ,573, Specialty Retail 5,258,000 Beauty Community PCL, fgn. THA THB 5,397, Wireless Telecommunication Services 4,293,750 Intouch Holdings PCL, fgn. THA THB 10,283, ,285,300 Advanced Info Service PCL, fgn. THA THB 9,811, ,095, TOTAL SHARES 190,322, Unaudited Semi-Annual Report 415

418 Templeton Thailand Fund Schedule of Investments as of December 31, 2014 (continued) face WARRANTS Hotels, Restaurants & Leisure 158,372 Minor International PCL, fgn., wts., 11/03/17 THA THB 23, Media 1,146,393 VGI Global Media PCL, fgn., wts., 05/01/18 THA THB 58, Real Estate Management & Development 3,452,320 Land and Houses PCL, NVDR., wts., 05/05/17 THA THB 577, ,357,299 Land and Houses PCL, wts., 5/05/17 THA THB 227, , TOTAL WARRANTS 886, TOTAL TRANSFERABLE SECURITIES ADMITTED TO AN OFFICIAL STOCK EXCHANGE LISTING 191,209, TOTAL INVESTMENTS 191,209, Unaudited Semi-Annual Report

419 Additional Additional Information Information Unaudited Collateral The following table reports the collateral held as at December 31, 2014 to reduce counterparty exposure on OTC derivatives. Fund Counterparty Cash held as collateral Sovereign Bonds held as collateral Franklin Brazil Opportunities Fund Deutsche Bank USD 1,820, Franklin European Growth Fund Bank of America USD 115, JPMorgan Chase Bank USD 2, Franklin Global Aggregate Bond Fund Morgan Stanley USD 145, Franklin Global Aggregate Investment Grade Bond Fund Barclays Bank USD 260, Citibank USD 270, Franklin Global Allocation Fund Deutsche Bank USD 220, Franklin Global Fundamental Strategies Fund Bank of America USD 930, Barclays Bank USD 1,710, ,565, Citibank USD 2,290, Deutsche Bank USD 8,200, Goldman Sachs USD HSBC Bank GBP 450, HSBC Bank USD 2,502, JPMorgan Chase Bank USD 6,110, Standard Chartered USD 1,280, Franklin Global Real Estate Fund Morgan Stanley USD 78, Franklin Gold and Precious Metals Fund Morgan Stanley USD 56, Franklin High Yield Fund Deutsche Bank USD 1,590, Franklin MENA Fund Morgan Stanley USD 78, Franklin Strategic Income Fund Barclays Bank USD 1,661, Credit Suisse USD 3,670, Deutsche Bank USD 17,630, Goldman Sachs USD 340, HSBC Bank GBP 148, JPMorgan Chase Bank USD 2,159, Morgan Stanley USD 260, Franklin U.S. Equity Fund Morgan Stanley USD 166, Franklin U.S. Focus Fund Morgan Stanley USD 67, Franklin U.S. Low Duration Fund Barclays Bank USD 690, Citibank USD 290, Credit Suisse USD 370, Deutsche Bank USD 15,140, Goldman Sachs USD 100, HSBC Bank USD 270, JPMorgan Chase Bank USD 1,358, Franklin U.S. Total Return Fund Barclays Bank USD 305, Deutsche Bank USD 540, ,256, Franklin World Perspectives Fund Deutsche Bank USD 60, Franklin Mutual Beacon Fund Bank of America USD 575, Credit Suisse USD 810, Deutsche Bank USD 224, , HSBC Bank EUR 430, HSBC Bank USD 290, Morgan Stanley USD 67, Standard Chartered USD 270, Templeton Africa Fund Morgan Stanley USD 100, Templeton Asian Bond Fund Barclays Bank USD 3,389, Citibank USD 10,425, Goldman Sachs USD 370, Standard Chartered USD 3,510, Templeton Constrained Bond Fund JPMorgan Chase Bank USD 110, Templeton Emerging s Fund Morgan Stanley USD 56, Unaudited Semi-Annual Report 417

420 Additional Information (continued) Collateral (continued) The following table reports the collateral held as at December 31, 2014 to reduce counterparty exposure on OTC derivatives. Fund Counterparty Cash held as collateral Sovereign Bonds held as collateral Templeton Emerging s Balanced Fund Deutsche Bank USD 220, Morgan Stanley USD 78, Templeton Emerging s Bond Fund Barclays Bank USD 34,431, Deutsche Bank USD 31,770, Goldman Sachs USD 12,790, HSBC Bank GBP 3,280, HSBC Bank USD 1,800, ,285, JPMorgan Chase Bank USD 10,238, Standard Chartered USD 24,430, Templeton Global Balanced Fund Barclays Bank USD 260, HSBC Bank USD 260, Templeton Global Bond Fund Bank of America EUR 98,005, Bank of America USD 4,468, Barclays Bank USD 486,725, Citibank USD 87,850, Deutsche Bank USD 148,080, Goldman Sachs USD 400,720, HSBC Bank GBP 24,310, HSBC Bank USD 690, ,305, JPMorgan Chase Bank USD 277,839, Morgan Stanley USD 69,885, Standard Chartered USD 278,600, Templeton Global High Yield Fund Deutsche Bank USD 2,970, JPMorgan Chase Bank USD 250, Morgan Stanley USD 56, Standard Chartered USD 260, Templeton Global Income Fund Bank of America USD 1,610, Barclays Bank USD 3,270, Citibank USD 1,810, Deutsche Bank USD 8,650, Goldman Sachs USD 1,040, HSBC Bank GBP 145, HSBC Bank USD 1,792, JPMorgan Chase Bank USD 3,617, Morgan Stanley USD 56, Standard Chartered USD 530, Templeton Global Total Return Fund Barclays Bank USD 466,428, ,627, Citibank USD 187,690, Deutsche Bank USD 132,149, Goldman Sachs USD 222,420, JPMorgan Chase Bank USD 315,338, Morgan Stanley USD 26,157, Standard Chartered USD 65,220, Unaudited Semi-Annual Report

421 Franklin Templeton Investments Office Directory Further information regarding Franklin Templeton Investment Funds is available from the following Franklin Templeton Investments offices: EUROPE BELGIUM FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.à r.l. Belgian Branch Office 28, avenue Marnix, 1000 Brussels Belgium Tél: Fax: FRANCE FRANKLIN TEMPLETON FRANCE S.A. 20, rue de la Paix F Paris, France Tel: +33 (0) Fax: +33 (0) GERMANY AND AUSTRIA FRANKLIN TEMPLETON INVESTMENT SERVICES GMBH Mainzer Landstr. 16 Postfach Frankfurt am Main, Germany Tel: +49 (0) Fax: +49 (0) Germany Freefone: Austria Freefone: ITALY FRANKLIN TEMPLETON ITALIA SIM Corso Italia n Milan, Italy Tel: Fax: Italy freefone: LUXEMBOURG FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.à r.l. 8A, rue Albert Borschette, L-1246 Luxembourg B.P. 169, L-2011 Luxembourg Grand Duchy of Luxembourg Tel: Fax: THE NETHERLANDS FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Netherlands Branch Office World Trade Center Amsterdam H-Toren 16e verdieping Zuidplein XV Amsterdam, The Netherlands Tel: +31 (0) Fax: +31 (0) Netherlands Freefone: POLAND FRANKLIN TEMPLETON INVESTMENT POLAND Sp. Z.o.o. Rondo ONZ 1, Floor 26 th Warsaw, Poland Tel: Fax: SPAIN AND PORTUGAL FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Sucursal en España José Ortega y Gasset, 29-6º Madrid, Spain Tel: Fax: SWEDEN FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Birger Jarlsgatan 4 SE Stockholm, Sweden Tel: Fax: SWITZERLAND FRANKLIN TEMPLETON SWITZERLAND LTD Stockerstrasse 38 CH-8002 Zurich, Switzerland Tel: +41 (0) Fax: +41 (0) UNITED KINGDOM London FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED The Adelphi, 1-11 John Adam Street London WC2N 6HT, UK Tel: +44 (0) Fax: +44 (0) UK Freefone: Edinburgh FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED 5 Morrison Street, Edinburgh EH3 8BH. Tel: +44 (0) Fax: +44 (0) UK Freefone: MIDDLE EAST AND AFRICA SOUTH AFRICA FRANKLIN TEMPLETON INVESTMENTS World Trade Centre, Green Park, 9 th Floor Corner West Road South & Lower Road Morningside, Sandton, 2196 South Africa Tel: Fax: UNITED ARAB EMIRATES FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED Gate Building East Wing, 2 nd Floor Dubai International Financial Centre P.O. Box Dubai, United Arab Emirates Tel: +971 (4) Fax: +971 (4) ASIA HONG KONG FRANKLIN TEMPLETON INVESTMENTS (ASIA) LIMITED 17/F Chater House, No. 8 Connaught Road Central Hong Kong Tel: Fax: SINGAPORE TEMPLETON ASSET MANAGEMENT LTD 7 Temasek Boulevard #38-03 Suntec Tower One Singapore Tel: (65) Fax: (65) TAIWAN FRANKLIN TEMPLETON SECURITIES INVESTMENT CONSULTING (SINOAM) INC.* 8 th Floor, #87, Sec. 4 Chung Hsiao East Road Taipei, Taiwan, R.O.C. Tel: Fax: NORTH AMERICA USA FRANKLIN TEMPLETON INVESTMENTS 100 Fountain Parkway St. Petersburg, FL Tel Fax: [email protected] SOUTH AMERICA ARGENTINA TEMPLETON ASSET MANAGEMENT LTD Ingeniero Butty 220, 11 th Floor (C1001 AFB) Buenos Aires, Argentina Tel: Fax: *Master agent appointed in Taiwan for FTIF to be offered and sold to the public in Taiwan. Please note that the websites mentioned above are directed at residents within the country stated on these websites. (Please refer to the website disclaimers). Unaudited Semi-Annual Report 419

422 Franklin Templeton International Services S.à r.l. 8A, rue Albert Borschette L-1246 Luxembourg tel +352 (46) fax +352 (46) FTIF SAR RGBR 12/14