advisormonthly - Franklin Templeton Investments

Global Fixed Income January 31, 2014Franklin Strategic Income FundFranklinINVESTMENT OBJECTIVE & STRATEGYThe Fund seeks high current income and some longtermcapital appreciation by investing primarily in fixedincome securities issued in the United States andthroughout the world.MORNINGSTAR CATEGORYHigh Yield Fixed IncomeRATINGMorningstar Rating OverallPORTFOLIO MANAGERSChris MolumphyEric Takaha27 Years, California, United States24 Years, California, United StatesFUND FACTSPrice per Unit $6.81Yield to Maturity 1 5.77%Weighted Average Maturity 14.4 YearsDuration3.2 YearsYield to Worst 1 5.41%Duration to Worst 22.9 YearsAssets of the Fund $526,783,257 10Distributions Interest income paid monthly 1,3Inception Date 02/17/2003Positions 651Portfolio Turnover Rate (06/30/2013) 10.43%MER (06/30/2013 incl. HST) 2.02%BenchmarkBarclays Capital US Aggregate - (100% Hedgedinto CAD) Index1 Please see detailed definitions at www.franklintempleton.ca/define.2 Uses effective duration for mortgages/asset-backed securities, uses 90 days average resetperiod assumed for all bank loans and for duration of bank loans; and excludes duration forcertain convertible/preferred stock. Duration for certain hybrid securities calculated to thefirst call and/ or fixed to floating coupon date.3 The Fund may also pay capital gains in December if required.4 Includes issues in default as well as issues which have missed payments but may not be intechnical default. May not include other issues for which interest receivables have beenreversed but have not yet missed coupon/principal payments or filed for bankruptcy.Securities shown for Charter Communications are pre-bankruptcy exchange.5 First call/fixed-to-floating date used as maturity date for certain perpetual hybrid securities.6 US Government & Agency sector includes agency preferred stock.7 Includes gains/losses on forward currency contracts.8 May include currency forwards and common/ warrants.9 Excludes holdings in short-term securities.10 Inclusive of trust and corporate class versions where applicable.RISK CLASSIFICATIONLowLow toMediumMediumMedium toHighHighFUND CODESSERIES CDN$ US$Series A Front 387 388Series A DSC 389 390Series A Low Load 391 393Series F 229 263Series I 3382 3383Series O 173 174REASONS TO INVEST IN THIS FUND:• Diversification creates opportunities. The Fund offers the potential for more consistent returns by takingadvantage of the performances of many different bond categories in the United States and throughout theworld.• Breadth of research. The Fund is supported by more than 100 investment professionals from the FranklinTempleton Fixed Income Group.Calendar Year Returns in Canadian Dollars (%)2013 2012 2011 2010 2009 2008 2007 2006 2005 2004Series A 2.44 11.71 1.76 9.89 22.31 -12.95 -6.06 6.69 -3.34 0.64Category Average Return 4.75 11.23 2.66 10.50 27.60 -15.46 -1.70 7.55 1.04 6.07Source: Morningstar Research Inc.30.00%20.00%10.00%0.00%-10.00%-20.00%2013 2012 2011 2010 2009 2008 2007 2006 2005 2004• Series ACompounded Returns and Category Returns in Canadian Dollars (%)• Category Average ReturnYTD 1 Mo 3 Mo 6 Mo 1 Year 3 Years 5 Years 10 years Since Inc^Series A 0.40 0.40 0.41 2.68 2.27 5.14 8.90 2.52 2.65Category Average Return 1.71 1.71 2.58 5.01 5.58 6.23 10.95 4.85 5.55Source: Morningstar Research Inc.HOLDINGSTop Country Weightings (% of Total)^ Fund inception dateUnited States 59.33South Korea 3.50Mexico 2.49Malaysia 2.32Canada 2.18Poland 2.18Sweden 2.02Hungary 1.92Others 13.68Cash & Cash Equivalents 10.39Top Holdings (%) 9Government of Sweden, 6.75%, 5/05/14 1.93Government of Poland, 5.75%, 4/25/14 1.27Government of Uruguay, Senior Bond, Index Linked,4.375%, 12/15/28 1.05FNMA, 4.00%, 2/01/41 0.96FNMA, 3.00%, 10/01/27 0.89U.S. Treasury Note, 3.75%, 11/15/18 0.83Korea Treasury Bond, Senior Note, 3.00%, 12/10/16 0.82Government of Hungary, 5.50%, 2/12/16 0.72Korea Monetary Stabilization Bond, Senior Note,2.78%, 10/02/14 0.69Citigroup Commercial Mortgage Trust, 2007-C6, AM,FRN, 5.88532%, 6/10/17 0.66Top Sector Weightings (% Total)High Yield Corporates & Preferred 4 28.93International Government/Agency Bonds (ForeignCurrency) 23.55Floating-Rate Loans 12.83Investment Grade Corporates & Preferred 5 6.23Cash & Cash Equivalents 7 6.08Municipal 6.01Mortgage-Backed Securities 4.81International Government/Agency Bonds (USD) 4.24Commercial Mortgage-Backed Securities 3.87U.S. Treasuries 6 2.07Asset-Backed Securities 0.98Others 0.28Equity 0.08Convertibles 0.04Series A Distribution HistoryDate Price Distr. Date Price Distr.02/28/2013 $6.99 $0.03 08/30/2013 $6.69 $0.0303/28/2013 $6.99 $0.03 09/30/2013 $6.75 $0.0304/30/2013 $7.05 $0.03 10/31/2013 $6.86 $0.0205/31/2013 $6.94 $0.03 11/29/2013 $6.83 $0.0206/28/2013 $6.76 $0.03 12/19/2013 $6.81 $0.0307/31/2013 $6.79 $0.03 01/31/2014 $6.81 $0.03Bond Ratings (%)AAA 11.28 CCC 11.72AA 8.22 CC 0.12A 12.10 C 0.15BBB 11.64 D 0.00BB 19.55 NR 0.23B 24.91 Other 8 0.08387 FFE 011424 advisormonthly FRANKLIN TEMPLETON INVESTMENTS For Dealer Use Only. Not For Distribution to the Public.