We hope you find this Investor Handbook helpful, and look forward to serving your investment needs in the years to come.

Transcription

1 Investor Handbook

2 We hope you find this Investor Handbook helpful, and look forward to serving your investment needs in the years to come. C Not FDIC Insured May Lose Value No Bank Guarantee Investor Handbook

3 TABLE OF CONTENTS Contact Us 2 Account Statements & Correspondence 6 Account Administration 9 Shareholder Privileges & Services 11 Glossary of Mutual Fund Terms 13 Investors should carefully consider a fund s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN/ or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.

4 Contact Us Online Services at franklintempleton.com By registering at franklintempleton.com, you ll have access to all your Franklin Templeton accounts, 24 hours a day, seven days a week. 1 On our website you can: Purchase, sell and exchange shares View current and historical account statements and tax documents Access account values, transaction history, fund prices and performance Update various account options including dividend payment methods and address changes Here s what else you can do on our website: View account statements and documents as soon as they become available by signing up for edelivery Access educational materials about investing and retirement planning, including fund commentary and economic analysis from our fund managers Utilize our online planning tools such as our retirement savings calculator, college savings planner and major purchases calculator when it comes time to invest for life s important milestones View, print and download forms and literature 1. Account access is limited to accounts registered under a Social Security number or trust. Accounts registered under an Employee Identification Number are not eligible for online access, except for those designated as trusts. 2 Investor Handbook

5 CONTACT US How to register 1 You ll need your Social Security number, fund number and account number 2 Go to franklintempleton.com 3 Click the Register Now link on the right side of the page and follow the step-by-step instructions If you need website assistance, please contact Shareholder Services at (800) franklintempleton.com 3

6 CONTACT US Automated Telephone Service Our automated telephone service offers you around-the- clock access to informa tion about your Franklin Templeton account or any Franklin Templeton fund. Please have your Social Security number (or Customer Identification Number), Personal Identification Number (PIN), fund number and account number on hand. By following the step- by-step instructions provided when you call, you can: Obtain account information such as current or previous year-end share balance(s), account value(s) and recent account transactions Access fund price and performance figures Get important tax-reporting information Purchase shares with your pre-established bank account information Exchange shares (within the same class) between existing, identically registered accounts Redeem shares to the address listed on your account or to a pre-established bank account Order fund deposit slips, money fund checks, previous year-end statements or copies of current account statements 4 Investor Handbook

7 CONTACT US Important Telephone Numbers and Addresses All times listed are Pacific Time. Online Services franklintempleton.com Shareholder Services (800) For assistance with your Franklin Templeton accounts, our website and/or fund and performance information Monday Friday: 5:30 a.m. 5:00 p.m. Automated telephone service is available 24 hours a day, seven days a week Retirement Services (800) For information on Traditional and Roth IRAs, SEP IRAs, SIMPLE IRAs, Coverdell Education Savings Plans, 403(b) and Business Retirement Plans, including 401(k)s Monday Friday: 5:30 a.m. 5:00 p.m. Automated telephone service is available 24 hours a day, seven days a week Mailing Addresses WEST COAST Franklin Templeton Investments 3344 Quality Drive P.O. Box 2258 Rancho Cordova, CA EAST COAST Franklin Templeton Investments 100 Fountain Parkway P.O. Box St. Petersburg, FL franklintempleton.com 5

8 Account Statements & Correspondence Throughout the year, we ll keep you informed about the status of your account(s) via quarterly Asset Summary Statements and transaction confirmation statements. You will also receive an updated fund prospectus once a year in addition to an annual and semiannual shareholder report for your fund(s). Quarterly Asset Summary Statements Your Asset Summary Statement automatically combines all your Franklin, Templeton and Mutual Series account statements that share the same Social Security number and ZIP code into one quarterly account package. You ll receive an Asset Summary Statement quarterly in April, July, October and January, summarizing all your transactions since the beginning of the year. The January statement serves as your Year-End Asset Summary Statement for the prior year and should be kept as a historical record of your account transactions for that year. Quarterly Asset Summary Statements may also be viewed online at franklintempleton.com by clicking the Access Statements/Tax Documents link under the I AM HERE TO section. Shareholders with the same address can consolidate accounts into one Asset Summary Statement package regardless of the Social Security number listed on the account. Additionally, any registered owner on the account can opt out of receiving consolidated statements. Please contact Shareholder Services at (800) for more details. Transaction Confirmation Statements When you purchase, exchange, transfer and redeem shares, you will receive individual confirmation statements. However, money 6 Investor Handbook

9 ACCOUNT STATEMENTS & CORRESPONDENCE fund transactions and transactions occurring on a regular basis, such as reinvestment of dividends, automatic investments, systematic withdrawals or similar recurring automatic transactions, will not generate confirmation statements. Confirmation statements produced on the same day, that have matching Social Security numbers and ZIP codes, as well as accounts of other household members that have been linked together by request, will be mailed in a single envelope. Prospectuses Once a year you ll receive an updated fund prospectus, which includes a fund s investment goals, risks, sales charges and expenses, as well as a summary of a fund s financial history for the past five years or since inception. We suggest you retain your prospectus; it s a valuable reference detailing fund policies and procedures. Prospectuses may also be viewed online at franklintempleton.com under the Forms & Literature tab at the top of the page. Shareholder Reports You will receive an annual and a semiannual shareholder report for each fund in which you are invested. These reports address how developments in the economy and financial markets affected your fund. They also offer insights into the portfolio manager s investment decisions and reveal the strategy for managing the fund during the period under review. In addition, a list of the portfolio s securities and the fund s complete financial statements will appear in every report. These reports are also available online at franklintempleton.com. franklintempleton.com 7

10 ACCOUNT STATEMENTS & CORRESPONDENCE Important Documents to Keep for Your Records It is important that you retain your Year-End Asset Summary Statements in addition to any tax documents you may receive as historical records of your account transactions throughout the entire period that you own the fund. You can also access historical Year-End Asset Summary Statements and tax documents online at franklintempleton.com. Householding of Shareholder Reports and Prospectuses In an effort to reduce fund expenses and limit the amount of mail our shareholders receive, we have a process in place to identify shareholders who are members of the same family with the same last name, share the same address and have multiple accounts covered by the same shareholder report or prospectus so the household will receive only one copy of that prospectus or shareholder report. This process is called householding and is a common industry practice. If you would prefer these documents not be householded, please contact Shareholder Services at (800) Proxy Statement From time to time, you may be asked to vote on certain business matters regarding the fund(s) in which you are invested. If your fund requires a proxy vote, the request, along with an explanation of what matter is being voted on, will be sent to you by mail. Once you have made a decision regarding the matter, you may vote your proxy either online, by phone or by mail. edelivery If you d like to reduce the amount of mail you receive and help the environment, you can choose to receive notifications when your account and fund documents are available to be viewed online. If you are registered on franklintempleton.com, sign up for this service by clicking the Sign Up for Electronic Delivery (edelivery) link under the I AM HERE TO section. 8 Investor Handbook

11 * # Account Administration Address Changes You can complete address changes for most accounts online, 2 by mail or over the phone. Distribution Option Changes 3 You can change your dividend or capital gain distributions option online, 2 by mail or over the phone. How to Buy Additional Shares Online. :Shareholders registered on franklintempleton.com can make additional investments (limit of $100,000 per day) to existing accounts on our website. You must first provide us with your bank account information by completing and forwarding to us the Account Options Form. This form may be downloaded from franklintempleton.com or you may request that it be mailed to you by contacting Shareholder Services. By Mail. Please make any checks or bank money orders payable to the fund in which you are currently invested and include your account number on the check. If you reinvest dividends, a deposit slip is located at the bottom of your Asset Summary Statement for your convenience. If you re using one check for multiple investments, please send an accompanying letter to indicate all account numbers and how your investment is to be allocated. Make your check payable to Franklin Templeton Investments. By Phone. If you accepted the telephone purchase privilege when you established your account and provided us with bank account information, you and your financial advisor can purchase shares (limit of $100,000 per day) by phone via electronic funds transfer. 4 Please notify us in writing if you no longer want this option. If you declined this privilege and later decide you would like this option, please call Shareholder Services for an authorization form. 2. You must be a registered shareholder on our website. 3. Certain Franklin Templeton Bank & Trust, F.S.B. (FTB&T) retirement plans require special forms for distributions. Please call (800) for additional information. 4. Certain retirement plans excepted. franklintempleton.com 9

12 * # ACCOUNT ADMINISTRATION How to Exchange Shares You can exchange shares between most Franklin Templeton funds within the same share class in accordance with the terms of each fund s prospectus, usually without paying any additional fees. You or your financial advisor may call or write us to make an exchange. Shareholders registered on franklintempleton.com can also make exchanges on our website. You will receive a fund prospectus for the fund that you are exchanging into with your transaction confirmation statement. An exchange is considered a redemption and a purchase of shares, and you could realize a capital gain or loss for income tax purposes. For additional information, please refer to the Cost Basis section of the glossary on page 13. How to Sell Shares Online. : Shareholders registered on franklintempleton.com can make redemption requests on our website for $100,000 or less if: a) no certificates were issued for the shares you want to sell; b) the address on your account was not changed online or by phone within the last 15 calendar days; and c) the check is to be sent to the address of record, made payable to all registered owners, or sent electronically to your preauthorized bank account. By Mail. Please send written instructions signed by all registered owners, return all outstanding certificates (if any) and reference the account number(s). Signatures must be guaranteed (not notarized) if: a) the redemption exceeds $100,000; b) the check is to be sent to an address or payee not registered on the account; or c) you are returning share certificates valued at $100,000 or more. By Phone. If you accepted the telephone redemption privilege when you established your account, we can accept phone redemption requests for $100,000 or less, if: a) no certificates were issued for the shares you want to sell; b) the address on your account was not changed online or by phone within the last 15 calendar days; and c) the check is to be sent to the address of record, made payable to all registered owners, or sent electronically to your preauthorized bank account. Please notify us if you no longer want this option. If you declined this privilege and later decide you would like this option, please call Shareholder Services. You should always contact your financial advisor before purchasing, exchanging or redeeming shares. 10 Investor Handbook

13 * # * # * # * # * # Shareholder Privileges & Services We offer many investment programs and services. If you have questions or would like more details, please call Shareholder Services at (800) Automatic Investment Plan : Regular investments of $50 or more can be transferred automatically from your bank account to most Franklin Templeton fund accounts on a monthly, quarterly or annual basis. Automatic Payroll Deduction You may direct money from your paycheck to your Franklin Templeton fund account via electronic funds transfer. Distribution Options : 5,6 Dividend and capital gain distributions can be mailed to you or automatically reinvested in your account at net asset value. You may also direct your distributions to another person, address, bank account (via electronic funds transfer), or Franklin Templeton fund account within the same class. Systematic Withdrawal Plan : 5,6 You or anyone you name can receive regular fixed amount payments of $50 or more via check or electronic funds transfer to a bank account from your Franklin Templeton fund account on a monthly, quarterly, or annual basis. Exchanges between Franklin Templeton Funds : You can exchange shares between most Franklin Templeton funds within the same class in accordance with the terms of each fund s prospectus, usually without paying any additional fees. : Indicates that registered shareholders may transact all or a portion of the account service described on our website. I ndicates that shareholders may transact all or a portion of the account service described by telephone. 5. Certain FTB&T retirement plans require special forms. Please call (800) for additional information. 6. Certain exceptions may apply. Please see a fund prospectus for details. franklintempleton.com 11

14 * # SHAREHOLDER PRIVILEGES AND SERVICES Telephone Exchange Privilege You can exchange shares by telephone among identically registered Franklin Templeton accounts. 7 To complete an exchange, please call your financial advisor or Share holder Services to access our automated telephone service or to speak to an associate. Volume Discounts Shareholders who use a Letter of Intent or the combined purchase privilege based on Cumulative Quantity Discounts may be eligible for sales charge discounts on Class A shares. Please consult your financial advisor or see the appropriate fund prospectus for details. Net Asset Value (NAV) Purchases Investments of $1 million or more, either in one purchase or through our Cumulative Quantity Discounts program, are made at NAV, but may be subject to a 1% contingent deferred sales charge. Please see the appropriate fund prospectus for details. Check-Writing Privileges Franklin Templeton money funds offer free, unlimited check-writing privileges. Each check must be written for $500 or more. Please see the appropriate fund prospectus for details. 7 Reinstatement Privilege You can generally reinvest all or any portion of your redemption proceeds in most Franklin Templeton funds within the same class, free of an initial sales charge for a period of 90 days. 8 Please include a written statement explaining that this is a reinvestment of redemption proceeds with your purchase request and your purchase will be made at the net asset value per share Does not include Franklin Templeton Money Fund Class B and C shares or FTB&T retirement plans. 8. Reinvestment of a money fund redemption may be subject to a sales charge. 9. A contingent deferred sales charge may apply if the redeemed shares were subject to such a charge; see the prospectus for details. 12 Investor Handbook

15 Glossary of Mutual Fund Terms Bond: A long-term debt security, or IOU, issued by a government or corporation that generally pays a stated rate of interest and plans to return the face value on the maturity date. Bonds do not represent equity ownership. Breakpoint: The dollar levels of Franklin Templeton fund Class A share investments that qualify for reduced sales charges. Capital gain or loss: The difference between an asset s purchase price and its selling price. Capital gain distributions: Paid out to mutual fund shareholders from net gains (gains minus losses) realized when portfolio securities are sold. Class A, Class C, Class R, Class Z and Advisor Class shares: Funds may offer more than one share class. The principal differences are the sales charges and expenses associated with each class. Investors should read the applicable prospectus for details. Cost Basis: Whenever you sell or exchange mutual fund shares, you generally have a taxable capital gain or loss transaction that must be reported to the IRS. As a service to shareholders, Franklin Templeton will provide a Cost Basis Statement to eligible shareholders. 10 Franklin Templeton determines cost basis using the average basis single category method, one of four methods approved by the IRS. 11 Distribution: A payout to shareholders resulting from a mutual fund s realized capital gains and interest or dividend income. Distribution rate: The percentage rate at which a mutual fund distri butes income to its shareholders. It is calculated by dividing a fund s annualized dividend amount by its current offering price. Dividend: An income distribution to mutual fund shareholders that generally comes from the fund s net investment income. 10. To determine if your account will generate a Cost Basis Statement upon a sale of shares, contact Shareholder Services at (800) Please consult your tax advisor to determine if the Average Basis Single Category method is available to you and, if so, whether it is appropriate for your income tax purposes. franklintempleton.com 13

16 GLOSSARY OF MUTUAL FUND TERMS Dollar-cost averaging: A mutual fund investment strategy that involves investing equal amounts at regular intervals, regardless of fluctuating price levels. Because more shares are bought at lower prices and fewer shares at higher prices, the average cost of your shares may be lower than the average price you paid. Dollar-cost averaging cannot guarantee a profit nor does it protect against loss in a declining market. Investors should consider their financial ability to continue purchases through periods of low price levels or changing economic conditions. Equity security: A type of security representing proportional ownership in a corporation. Common stock, preferred stock and convertible stock are types of equity securities. (Debt securities such as bonds do not represent equity ownership.) Ex-dividend: Literally, trading without the dividend. It is the interval between the record date and payment of the next dividend. An investor who buys shares during that interval is not entitled to the dividend. A fund that has gone ex-dividend is marked with an x in newspaper listings. Municipal bond: A debt security issued by a state or local government. The interest these securities pay is generally free from regular federal income tax and may be free from state and local income taxes as well. The two major types of municipal securities are general obligation bonds and revenue bonds. Net asset value (NAV) per share: The NAV is calculated each day by taking the closing market value of all securities owned by a mutual fund, plus all other assets (e.g., cash) and subtracting liabilities. The remainder is then divided by the total number of fund shares outstanding for each class to reach the NAV per share. Unlike the offering price, the NAV per share does not include any sales charges. This is the share price at which mutual fund shares are redeemed. Offering price: The share price at which mutual fund shares are offered for sale to the public. The public offering price represents the NAV plus any applicable initial sales charges. 14 Investor Handbook

17 GLOSSARY OF MUTUAL FUND TERMS Payable date: The date on which a declared dividend is scheduled to be paid. Record date: The date on which a fund determines which shareholders are entitled to a distribution. After the record date, shares are sold ex-dividend, or without the dividend. Total return: The return on an investment for a specific period of time, which includes share price appreciation, reinvested dividends or interest, and any capital gains. Yield: In general, yield represents the income return on an investment. A mutual fund s yield, calculated as required by the SEC, is based on the earnings of the fund s portfolio during a 30-day period, divided by the offering price per share at the end of the period. franklintempleton.com 15

18 Gain From Our Perspective Franklin Templeton combines the specialized expertise of three world-class investment management groups Franklin, Templeton and Mutual Series each with an independent perspective backed by over 60 years experience. Franklin. Founded in 1947, Franklin is a leader in tax-free investing and a driving force in fixed income investing. They also bring expertise in growth- and value-style U.S. equity investing. Templeton. Founded in 1940, Templeton pioneered international investing and, in 1954, launched what has become the industry s oldest global fund. Today, with research offices in over 25 countries, they offer investors the broadest global reach in the industry. Mutual Series. Founded in 1949, Mutual Series is dedicated to a unique style of value investing, searching for opportunity among undervalued stocks, arbitrage situations and distressed securities. True Diversification Because our management groups work independently and adhere to distinctly different investment approaches, Franklin, Templeton and Mutual Series funds typically have distinct portfolios. That s why our funds can be used to build truly diversified allocation plans covering every major asset class. MUTUAL FUNDS RETIREMENT PLANS 529 COLLEGE SAVINGS PLANS SEPARATE ACCOUNTS

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20 WE BELIEVE IN THE VALUE OF ADVICE Our mutual funds are available through financial advisors because we believe investors can benefit from ongoing professional advice. The expertise of a financial advisor can prove invaluable in helping you define your needs and identifying investments suitable to your unique financial objectives. To invest in Franklin Templeton funds or to learn more about our products and services, please contact your financial advisor. < GAIN FROM OUR PERSPECTIVE > Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, CA franklintempleton.com Franklin Templeton Investments Your Source For: Mutual Funds Retirement Plans 529 College Savings Plans Separate Accounts 2011 Franklin Templeton Investments. All rights reserved. GOF GINV 11/