templeton shariah global equity fund

Franklin Templeton Shariah Funds

Templeton Shariah Global Equity Fund - A (acc) USD

Templeton Global Equity Group

Data as of 30 June 2019

For professional investor use only. Not for distribution to retail investors.

Templeton Shariah Global Equity Fund

2


Table of Contents

Investment Capabilities Overview............................................................................................4

Franklin Templeton—A Trusted, Long-Term Partner in Investment Management.......................5

Franklin Templeton—ESG and Corporate Sustainability Franklin Templeton—ESG

and Corporate Sustainability

.................6

Exceptional Asset Management Combined with Customised Shariah Compliant

Investment Solutions

......................7

Extensive Shariah Compliance Resources...............................................................................8

Why Invest in a Shariah Global Equity Fund?..........................................................................9

Basic Building Block of a Shariah-Compliant Asset Allocation................................................ 10

Amanie International Shariah Supervisory Board....................................................................11

Templeton Global Equity Group—Focus on Core Competencies............................................12

Templeton Global Equity Group—Value Investors Focused on Seeking Long-Term

Capital Growth for Our Clients

............... 13

The Templeton Investment Philosophy.................................................................................. 14

Templeton Global Equity Group Organisational Structure.......................................................15

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover Investment Opportunities

Across Regions

............ 16

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover the Best Opportunities

Across Sectors and Geographies

................ 17

Templeton’s Valuation-Driven Investment Process.....................................18

Templeton’s Valuation-Driven Investment Process.................................................................19

Performance and Characteristics...................................................................24

Summary..............................................................................................................................25

What are the Key Risks?......................................................................................................26

Sector Allocation...................................................................................................................27

Geographic Allocation...........................................................................................................28

Top Ten Holdings..................................................................................................................29

Portfolio Characteristics........................................................................................................30

Discrete Performance........................................................................................................... 31

Historical Performance..........................................................................................................32

Calendar Year Returns......................................................................................................... 33

Performance Risk Statistics.................................................................................................. 34

Supplemental Information......................................................................................................35



............... 38

Management Profiles.......................................................................................39

Management Profile..............................................................................................................40

Appendix............................................................................................................42

Collaboration with Financial Experts Across Franklin Templeton.............................................43

Risk Management—Templeton Global Equity Group..............................................................44


3

Table of Contents (continued)


An Integrated Global Trading Platform...................................................................................45

Important Information......................................................................................46

Glossary...............................................................................................................................47

Important Information............................................................................................................48

Important Disclosures...........................................................................................................50

GIPS Performance Presentation............................................................................................51

Source: Franklin Templeton Investments (FTI), as of 30 June 2019, based on latest available data. Total combined Assets Under Management (Total AUM) combines U.S. and non-U.S. AUM of the investment management subsidiaries of the parent

company, Franklin Resources, Inc. (FRI) [NYSE: BEN], a global investment management organisation operating as FTI. Only selected business entities within FTI claim compliance with the GIPS standards as described in the table of contents if

applicable. Total and platform AUM includes discretionary and non-discretionary accounts, including pooled investment vehicles, separate accounts and other vehicles. Total and platform AUM may also include advisory accounts with or without trading

authority. In addition, assets for which certain FTI advisers provide limited asset allocation advisory services, and assets that are not allocated to FTI products are not included in the AUM figures shown. Franklin Templeton Multi-Asset Solutions may

invest in various investment platforms advised by a number of investment advisory entities within FTI. Platform AUM reported for FT Multi-Asset Solutions therefore may include certain AUM separately reported under each utilised investment platform.

Total AUM also includes assets managed by certain FTI advisers that do not form part of the selected investment platforms shown. As a result, the combined platform AUMs may not equal Total AUM and may be calculated and reported separately for

regulatory or other purposes under each investment adviser. Each local asset manager may be considered as an entity affiliated with or associated to FTI by virtue of being a direct or indirect wholly-owned subsidiary of FRI, an entity or joint venture in

which FRI owns a partial interest, which may be a minority interest, or a third party asset management company to which investment advisory services have been delegated by an FTI adviser.


4


Investment Capabilities Overview

FRANKLIN TEMPLETON

Total Combined Assets Under Management: US$715.2 Billion

2

Equity

5

Fixed Income

8

Multi-Asset Solutions

11

Alternatives

AUM

US$289.2 Billion US$269.8 Billion US$116.0 Billion US$42.2 Billion

CAPABILITIES

•

Value

•

Government

•

Multi-Asset Income

•

Commodities

•

Deep Value

•

Municipals

•

Diversified Outcome-Oriented

•

Infrastructure

•

Core Value

•

Corporate Credit

•

Risk Premia

•

Real Estate

•

Blend

•

Bank Loans

•

Smart Beta

•

Hedge Funds

•

GARP

•

Securitised

•

Balanced Allocation

•

Private Equity

•

Growth

•

Multi-Sector

•

Target Date/Risk

•

Private Debt

•

Convertibles

•

Currencies

•

Model Portfolios

•

Sector

•

Sukuk

•

Inflation Protection

•

Shariah

•

Managed Volatility

•

Smart Beta

INVESTMENT

•

Templeton Global Equity Group (1940)

•

Franklin Templeton Fixed Income Group (1970)

•

Franklin Templeton Multi-Asset Solutions (1948)

•

Franklin Real Asset Advisors (1984)

TEAMS

•

Franklin Equity Group (1947)

•

Templeton Global Macro (1986)

•

Franklin Systematic (2011)

•

Darby Overseas Investments (1994)

•

Franklin Mutual Series (1949)

•

Franklin LAM-Fixed Income (1993)

•

K2 Advisors (1994)

• Franklin Templeton Emerging Markets Equity (1987) •

Pelagos (2005)

•

Franklin LAM-Developed Markets Equity (1993)

•

Benefit Street Partners (2008)

•

Edinburgh Partners (2003)

Franklin Templeton—A Trusted, Long-Term Partner in Investment Management

Investment excellence• Diverse investment solutions across multiple asset classes• Time-tested investment disciplines plus exceptional research enables strong long-term performance

potential• Integrated, comprehensive and proven approach to investment risk management• Committed to environmental, social and governance (ESG) investment integration

Global perspective, local expertise• Pioneer in global investing, with track record of innovation • Unmatched breadth and depth of global presence• Deep experience and long-term commitment to the markets we enter

Strength and experience• Over 70 years of navigating well through all market cycles• Global business diversified by investment objective, geography and client type• Values-driven culture guides how we work

5889


5


Franklin Templeton—A Trusted, Long-Term Partner in Investment Management

Guides How We Work• Our primary objective is to deliver exceptional investment management through an active fundamental

approach…while always acting in the best interests of our clients and shareholders • As a fiduciary, we recognise that ESG considerations are a driver of long-term investment performance and

thus affect our business and the companies we invest in• Our approach to ESG is one of the many strengths of our organisation

ESG considerations at the corporate level that impact our business:

Environmental ImpactEnergy usage

Greenhouse gases

Waste/recycling

Water consumption

Social FactorsDiversity and inclusion

Talent management(attracting, retaining top talent)

Charitable giving

Customer privacy and data security

Employee volunteering

GovernanceAnti-money laundering

Code of ethics/conduct

Compliance

Executive compensation

Enterprise risk management

ESG investment integration

5888


6


Franklin Templeton—ESG and Corporate Sustainability Franklin Templeton—ESG

and Corporate Sustainability

• As the world’s largest cross-border fund manager, Franklin Templeton has offices in over 30 countries and manages over US$3.24 billion in Shariah-compliant assets1

• Franklin Templeton combines the breadth and depth of our global asset management capabilities with the expertise of focused investment management teams which operate independently

• For clients who seek adherence to the investment principles of Islamic law, we apply our management expertise in combination with the knowledge and advice of Shariah scholars to offer our clients customised Shariah-compliant portfolios across a wide range of asset classes and strategies, including global, regional and local equities, and fixed income (sukuk)

• Named “Best Islamic Asset Management House (Institutional)” in Malaysia by The Asset Triple A Islamic Finance Awards in 2017, 2018 and 2019

• Won “The Most Outstanding Islamic Fund Manager,” 14th KLIFF Islamic Finance Awards 2017

• Received first-ever Failaka Islamic Award for “The Best Sukuk Fund (1-Year)”2

1. As of 30 June 2019.2. This award was given in 2010 to “The Sukuk Fund” as of 31 January 2011.

Exceptional Asset Management Combined with Customised Shariah-Compliant Investment Solutions

1641

0


7


Exceptional Asset Management Combined with Customised Shariah Compliant

Investment Solutions

Independent Endorsement from Esteemed Board of Scholars• Our portfolios are independently reviewed and endorsed by the Amanie International Shariah Supervisory Board

• The Amanie scholars provide initial approval on investment objectives and strategy of the funds, as well as ongoing supervisory and monitoring services to ensure continuous adherence and validation to internationally accepted Shariah principles and standards

World-Class Screening Technology• To ensure Shariah compliance, we leverage best-in-class technology utilising criteria established by our screening

provider to:

– Screen approximately 40,000 global securities– Examine the business activities of each company– Evaluate selected financial ratios according to prescribed algorithms– Identify and cleanse non-compliant income in a manner consistent with Shariah law

Comprehensive, Integrated Risk Management• Each portfolio team employs a highly disciplined investment philosophy and process designed to comprehensively measure and

manage risk

• The teams also leverage analysis and insight from a worldwide network of locally-based risk management specialists

Extensive Shariah Compliance Resources

1642


8


Extensive Shariah Compliance Resources

Basic Building Block of a Shariah-Compliant Asset Allocation• A diversified Shariah Global Equity fund is a great complement for Shariah-compliant portfolios as it can

increase returns compared to an all-global sukuk portfolio

Opportunity to Capitalise on Shariah-Compliant Investment Ideas Worldwide• Investing in a Shariah Global Equity fund provides easy access to Shariah-compliant global investment

opportunities

Shariah Compliance with a Strong Governance Framework• A UCITS-compliant Shariah Global Equity fund provides international “passportability” and a strong

governance framework1

1. “Undertaking for the collective investment of transferable securities – UCITS” coordinates the distribution and management of unit trusts amongst countries within the European Union.

Why Invest in a Shariah Global Equity Fund?

2999


9


Why Invest in a Shariah Global Equity Fund?

Growth of US$10,000 Over the Last 5 YearsAs of 31 March 2019

© 2019 FactSet Research Systems Inc. All rights reserved. The information contained herein: (1) is proprietary to FactSet Research Systems Inc. and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither FactSet Research Systems Inc. nor its content providers are responsible for any damages or losses arising from any use of this information.Source: S&P and MSCI as of 31 March 2019. Global Sukuk as represented by the Dow Jones Sukuk Index; Shariah Global Equities as represented by the MSCI AC World Islamic Index. Returns are in USD.MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.Past performance is not an indicator or a guarantee of future performance.

Basic Building Block of a Shariah-Compliant Asset Allocation

3000

$8,000

$10,000

$12,000

$14,000

100% Global Sukuk3.51% p.a.

Apr-14 Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18 Nov-18 Mar-19

50% Global Shariah Equity/50% Global Sukuk4.45% p.a.

100% Global Shariah Equity5.20% p.a.

Shariah Global Equities Can Provide Diversification BenefitsA 50% allocation to Global Shariah equities would have increased returns of an all-global sukuk portfolio.


10


Basic Building Block of a Shariah-Compliant Asset Allocation

Amanie International Shariah Supervisory Board

1643

DR. OSAMA AL DEREAI

Qatar

DR. MOHD DAUD BAKAR

Malaysia

SHEIKH DR. MOHAMED ALI ELGARICHAIRMAN

Kingdom of Saudi Arabia

Dr. Mohamed Ali Elgari is a Professor of Islamic Economics and the former Director of the Centre for Research in Islamic Economics at King Abdul Aziz University in Saudi Arabia. He is an advisor to many Islamic financial institutions throughout the world and is also on the Shariah board of the Dow Jones Islamic index. He is also a member of the Islamic Fiqh Academy as well as the Islamic Accounting and Auditing Organisation for Islamic Financial Institution (AAOIFI). Dr. Elgari has written several books on Islamic banking. He graduated from the University of California with a Ph.D. in Economics.

DR. MUHAMMAD AMIN ALI QATTAN

Kuwait

Dr. Muhammad Amin Ali Qattan has a Ph.D. in Islamic Banking from Birmingham University and is himself a lecturer as well as a prolific author of texts and articles on Islamic economics and finance. He currently is the Director of Islamic Economics Unit, Centre of Excellence in Management at Kuwait University. Dr. Qattan also serves as the Shariah adviser to many reputable institutions such as Ratings Intelligence, Standard & Poor’s Shariah indices, Al Fajer Retakaful, amongst others. He is a highly regarded Shariah scholar and is based in Kuwait.

Dr. Mohd Daud Bakar is the founder and group chairman of Amanie Advisors, a global boutique Shariah advisory firm with offices located in Kuala Lumpur, Dubai, Luxembourg, Cairo, Kazakhstan, Oman, Australia, South Korea and Dublin. He is also the founder and chairman of Amanie Nexus Sdn Bhd (Kuala Lumpur). Prior to this, he was the deputy vice-chancellor at the International Islamic University Malaysia. He received his first degree in Shariah from University of Kuwait in 1988 and obtained his Ph.D. from University of St. Andrews, United Kingdom in 1993. In 2002, he went on to complete his external Bachelor of Jurisprudence at University of Malaya. He has published a number of articles in various academic journals and has made many presentations in various conferences both local and overseas. Dr. Mohd Daud is currently the chairman of the ShariahAdvisory Council of the Central Bank of Malaysia, the SACSC and the Shariah Supervisory Council of Labuan Financial Services Authority. He is also a member of the Shariah Board of Dow Jones Islamic Market Index (New York), Oasis Asset Management (Cape Town, South Africa), The National Bank of Oman, Financial Guidance (USA), BNP Paribas (Bahrain), Morgan Stanley (Dubai), Jadwa-Russell Islamic Fund (Kingdom of Saudi Arabia), Bank of London and Middle East (London), Noor Islamic Bank (Dubai), Islamic Bank of Asia (Singapore), and in other financial institutions both local and abroad. Apart from that, Dr. Mohd Daud is also actively advising, locally and overseas, on capital markets product structuring such as sukuk.

Dr. Osama Al Dereai is a Shariah scholar from Qatar. He has extensive experience in teaching, consulting and research in the field of Islamic finance. He received his bachelor’s degree specialising in the Science of Hadeth Al Sharef from the prestigious Islamic University of Madinah(Saudi Arabia). He obtained his master’s degree from the International Islamic University Malaysiaand was later conferred his Doctorate in Islamic Transactions from the University of Malaya. Dr. Al Dereai is a Shariah board member of various financial institutions which include the First Leasing Company, Barwa Bank, First Investment Company and Ghanim Al Saad Group of Companies amongst others.


11


Amanie International Shariah Supervisory Board

Total AUM by MandateAs of 30 June 2019

Total AUM by Distribution ChannelAs of 30 June 2019

• Templeton’s investment approach is highly disciplined and maintains a keen focus on core competencies

• Since the founding of the firm in the 1940s, we have adhered to our long-term investment philosophy of finding the best bargains

• We offer strategies where the universe is large enough that we can offer an unconstrained portfolio:

– Global Equity– Non-U.S. Equity– Regional Equity– Small Cap Equity– Balanced

1. Global includes global balanced mandates.2. Other includes regional and single country mandates and global and international small cap.

Templeton Global Equity Group—Focus on Core Competencies

2878

Non-U.S.US$24 billion

Global1US$41 billion

Other2

US$7 billion

InstitutionalUS$29 billion

RetailUS$43 billion

0


12


Templeton Global Equity Group—Focus on Core Competencies

Templeton Global Equity Group—Value Investors Focused on Seeking Long-Term Capital Growth for Our Clients

2879

RIGOROUS BOTTOM-UP STOCK SELECTIONeveryone is an analyst in a broadly experienced research team, identifying undervalued stocks across global sectors and regions

FORTITUDE TO BE DIFFERENTconviction to purchase out-of-favoursecurities and patience to wait for value recognition

LONG-TERMPERSPECTIVEfive-year horizon takes advantageof short-term price volatility to reveal long-term investment opportunities

DISCIPLINED, REPEATABLE PROCESSadherence to valuation-driven philosophy and process that have navigated every market cycle over seven decades

TEMPLETON GLOBAL EQUITY GROUP

What Sets Us Apart


13




We Utilise a Disciplined, Consistent ApproachBased on Three Timeless Principles of Investing

Value• Uncover bargains—seeking companies trading at large discounts to their

business value

• Business value—based on normalised earnings, cash flow or asset value potential

• Flexible approach in a disciplined framework

Patience• Rolling five-year time horizon focused on normalised business value

• Long-term focus takes advantage of short-term price volatility to reveal investment opportunities

• Patience allows time for value recognition and has historically resulted in low turnover

Bottom-up stock picking• Build portfolios with undervalued securities identified through research process

• Portfolio structure reflects where we are finding value across sectors and regions

• Portfolio management process seeks to buy pessimism and sell optimism

The Templeton Investment Philosophy

2880

“The best bargains are those stocks having the lowest prices in relation to possible earning power of future years.”

—Sir John TempletonOctober 1957

“The best bargains are those stocks having the lowest prices in relation to possible earning power of future years.”

—Sir John TempletonOctober 1957


14


The Templeton Investment Philosophy

Investment team information is as of 1 July 2019.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Templeton Global Equity Group Organisational Structure

2881

CHAIRMANDr. Sandy Nairn, CFA34 Years Industry ExperienceEDINBURGH, UNITED KINGDOM

CHIEF INVESTMENT OFFICERNorman Boersma, CFA33 Years Industry ExperienceNASSAU, BAHAMAS

DIRECTOR OF RESEARCH

Heather Arnold, CFA35 Years Industry ExperienceNASSAU, BAHAMAS

33 Portfolio Managers & Research Analysts

Average 16 Years with TempletonSpeak 13 Languages

Average 21 Years of Industry Experience

Stable Team/Historically Low Turnover

North America16 PM/Analysts

4 Analysts

Europe2 PM/Analysts

2 AnalystsAsia

3 PM/Analysts3 Analysts

Australia2 PM/Analysts

1 Analyst

DIRECTOR OF PORTFOLIO MANAGEMENT

Antonio T. Docal, CFA40 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES

DIRECTOR OF BUSINESS DEVELOPMENT

C. Reed Hutchens, CFA31 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES

0


15


Templeton Global Equity Group Organisational Structure

As of 30 June 2019.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover Investment Opportunities Across Regions

6579

Heather Arnold, CFA Director of Research

REGIONAL RESEARCH TEAMS

Peter NoriResearch Coordinator

GLOBAL

Tian QiuResearch Coordinator

Paul de JosselinResearch Coordinator

Matthew NagleResearch Coordinator

EUROPE AMERICAS

Harlan Hodes Research Coordinator

SMALL CAP

ESG

Maarten BloemenResearch Coordinator

ASIA

Smal

l Cap

s (<

$2B)

Mid

Cap

s ($

2B -

$10B

)La

rge

Cap

s (>

$10B

)

Mar

ket C

apita

lisat

ion

0


16


Bottom-Up Stock Pickers: Global Focus Seeks to Uncover Investment Opportunities

Across Regions

As of 30 June 2019. Note: Sector team leaders in blue boldface.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Bottom-Up Stock Pickers: Global Focus Seeks to Uncover the Best Opportunities Across Sectors and Geographies

2906

0

Matthew Nagle Americas BanksEuropean Banks

Warren Pustam Global InsuranceGlobal Diversified Financials

Maggie Wong Global Real Estate

Dylan Ball European Financials

Paul de Josselin Asian BanksHsung Khoo Asian Financials

Warren Pustam Americas Financials

David Tuttle Small Cap FinancialsMaggie Wong Small Cap Real Estate

Director of Research: Heather Arnold, CFAGLOBAL SECTOR TEAMS

Japan

India

Katherine Owen Global Consumer Discretionary

Alan Chua Global Autos & Components

Joanne Wong Global Consumer Staples

James Windsor European Consumers

Warren Pustam Americas Consumers

Harlan Hodes Small Cap Consumers

Ferdinand Cheuk Asian Autos

CONSUMERS

Tian Qiu Global Health CareCraig Cameron Global Health Care

Roman Aliev Asian Heath Care

Derek Taner Americas Health Care

HEALTH CARE

FINANCIALSTina Sadler Global Materials

Dylan Ball European Materials

Clara Lee Asian Materials

Tony Docal Americas Materials

David Tuttle Small Cap Materials

MATERIALSINDUSTRIALS

ENERGY COMMUNICATION SERVICES INFORMATION TECHNOLOGYPeter Nori Global Semiconductors

& Semiconductor Equipment

Peter Wilmshurst Global Software & ServicesGlobal Technology Hardware & Equipment

James Windsor European Information Technology

Ferdinand Cheuk Asian Information Technology

Derek Taner Americas Information Technology

Katie Ylijoki Small Cap Information Technology

ADDITIONAL RESOURCESResearchTechnology Group

Global Research Library

Junior Research Analysts

Investment Risk Management Group

ESG Resources

GlobalTrading Platform

Product ManagementGroup

Franklin Templeton Emerging Markets Equity & Templeton Global Macro

Chris Peel Global Energy

Hsung Khoo Asian Energy

Bhavesh Bombaywala Small Cap EnergyDavid Tuttle Small Cap Energy

Herbert Arnett Global Communication Services

Hsung Khoo Asian Communication Services

Heather Waddell Small Cap Communication Services

Peter Moeschter Global IndustrialsAlan Chua Global Machinery

James Windsor European Industrials

Tony Docal Americas IndustrialsDerek Taner Americas IndustrialsHeather Waddell Americas Industrials

Harlan Hodes Small Cap IndustrialsHeather Waddell Small Cap Industrials


17


Bottom-Up Stock Pickers: Global Focus Seeks to Uncover the Best Opportunities

Across Sectors and Geographies

18

Templeton’s Valuation-Driven Investment Process



The above chart is for illustrative and discussion purposes only.1. Historical turnover is based on Templeton Global Equity Group’s overall experience, over a five-year period ended 30 June 2019, and is not intended to reflect the historical turnover of the strategy. The turnover is a byproduct of Templeton’s long-term approach to managing portfolios, but various factors, such as a portfolio’s specific investment parameters and market or economic conditions may cause actual portfolio turnover to vary. For more information regarding an individual strategy’s or fund’s historical turnover ratio please contact your Franklin Templeton representative.


2940

Identify Potential Bargains

In-Depth Fundamental Analysis

Research Team Evaluation

Bottom-Up Portfolio Construction

Portfolio Monitoringand Risk Management

Detailed industry analysis

Regional influences

Quantitative and qualitative assessment

Identify material ESG issues

Five-year financial forecasts

Management/supplier/competitive evaluation

Risk/Reward modelling

Recommendation of Bargain List candidates

Presentation of investment thesis

Investment debate and critique

ESG debate and critique

Research approval

Investment parameters

Industry and sector framework

Build and diversify portfolio

Long-term approach: 20% historical turnover1

Ongoing valuation analysis

Ongoing ESG monitoring

Disciplined sell methodology

Ongoing peer review and risk analytics

54321

TEMPLETON’S BOTTOM-UP STOCK SELECTION PROCESS


19



The above chart is for illustrative and discussion purposes only.

A Bottom-Up Research Process Leverages Global Capabilities Across Market Cap Spectrum

2940

Bargain List

1. Identify Potential Bargains

• Analysts aligned by sectors, regions and market capitalisation

• Unconstrained investable universe

• Fundamental and quantitative assessment– Price/Earnings– Price/Book Value– Price/Cash Flow

• Identify material ESG issues– Environmental– Social– Governance

• Most attractively valued companies based on valuation

2. In-Depth Fundamental Analysis

• Develop research models– Revenue drivers; growth

potential– Assessment of ESG factors

on long-term risk/return– Operating costs– Capital expenditures– Capital allocation– Retained capital– Competitor analysis

• Five-year financial forecasts– Emphasis on future earnings

potential– Cash flow potential

• Risk/Reward modelling– Central, best and worst case

• Recommendation of Bargain List candidates

3. Research Team Evaluation

• Presentation of investment thesis– Valuation history– Business outlook relative to

global industry– Why we believe business

is undervalued– Opportunities and risks– Capital strength appraisal

• Rigorous investment team debate– Team vetting generates our

best thinking– ESG debate and critique

• Research approval


20


Templeton’s research platform is designed to track securities through their valuation lifecycle. The above chart is intended solely to illustrate the ideal interplay between the Bargain List, Core List and Source of Funds List over an anticipated holding period but there is no guarantee any Templeton stock will follow this lifecycle. The chart is hypothetical and is not intended to represent an actual Templeton portfolio, or any stock purchased or sold by Templeton.

Lifecycle of a Templeton Stock

SOURCE OF FUNDS LISTFully valued stocks recommended for sale

CORE LISTAttractively priced stocks with potential

for significant price upside

BARGAIN LISTStocks priced at a significant discount to our estimation of their future business value

VALU

ATI

ON

TIME

2940


21


The above chart is for illustrative and discussion purposes only.The turnover is a byproduct of Templeton’s long-term approach to managing portfolios, but various factors, such as a portfolio’s specific investment parameters and market or economic conditions may cause actual portfolio turnover to vary. For more information regarding an individual strategy’s historical turnover ratio please contact your Franklin Templeton representative.Portfolio managers purchase securities from the approved Templeton database of 300–500 securities which was derived from the investable universe of approximately 10,000 equity securities. 1. Although the typical Templeton Global or Non-U.S. equity portfolio holds approximately 80 securities, individual portfolios may vary, depending on various factors, such as portfolio size or investment strategy.

Bottom-Up Portfolio Construction—Step 4

2940

Portfolio Manager Stock Selection Decisions & Oversight

Analysts’highest-conviction holdings per sector

Historically low turnover, which may result in lower transaction costs

TEMPLETON GLOBAL OR

NON-U.S. PORTFOLIOApproximately 80 Securities1

SELL DISCIPLINE

300–500Securities

on Proprietary Database

Approved Database

Sector Analyst Portfolios

Portfolio-SpecificFeatures

Mandate parameters

Geographic/sector constraints

Portfoliocash flow

Source of Funds List

Core List

Bargain List


22


The above chart is for illustrative and discussion purposes only.

Portfolio Monitoring and Risk Management—Step 5

Ongoing Valuation Analysis Disciplined Sell Methodology Integrated Risk Approach

Research team closely monitorsinvestment thesis including ESG factors and updates forecasts and recommendations:

• Sector Team Meetings—Meet monthly to review main holdings, best ideas and sector analyst portfolios, discuss sector drivers and trends, and vet potential new bargains

• Industry Reviews—Industry analysis reports and stock holdings formally reviewed twice a year by each analyst to the full investment team

• Analyst Database Reviews—All stocks under analysts’ coverage also formally reviewed on a rotating weekly schedule

Stocks placed on the Source of Funds List and sold if:

• Price meets/exceeds our estimation of full value, or

• Greater value exists in another similar security, or

• Fundamental change in our investment thesis occurs

• Stock-specific risk is addressed primarily through our research discipline and team vetting process

• Ongoing assessment of material ESG issues provides another way to quantify potential downside risk

• Portfolio risk is managed through sector and geographic diversification and ongoing peer review process

• Investment Risk Management Group—an independent team of risk specialists reporting directly to the CEO—performs a risk oversight function and can consult with the portfolio managers to provide unbiased risk insights


2940


23


24

Performance and Characteristics




25

Fund Identifiers

ISIN Code LU0792757196

SEDOL Code B7W8SW8

Bloomberg Code TSGEAAU LX


As of 30 June 2019

Summary

Portfolio Manager(s)

Alan Chua, CFA Singapore

Peter Wilmshurst, CFA Australia

Fund Ratings (30 June 2019)

Overall Morningstar Rating™

««

Summary of Investment Objective

The Fund seeks long-term capital growth by investing primarily in Shariah compliant

equity securities of companies of any nation, including Emerging Markets. The

Fund’s managers believe that greater value can be found by looking at companies

globally rather than by limiting oneself to a single market.

Morningstar Category™ Islamic Global Equity

Investment Style Value

Fund Inception Date 10 September 2012

Share Class Inception Date 10 September 2012

Benchmark MSCI AC World Islamic Index

Base Currency for Fund USD

Base Currency for Share Class USD

Total Net Assets (USD) 80,769,733.72

Portfolio Turnover 28.29%

Asset Allocation Equity: 96.94%

Cash & Cash Equivalents: 3.06%

Number of Issuers 66

Total Expense Ratio 1.90%

The Portfolio Turnover is calculated over a 12-month period as at the end of the fiscal year (31 October 2018).

Holdings of the same issuer have been combined.

© Morningstar, Inc. 2019. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither

Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Percentage may not total 100% due to rounding.

Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details.

Past performance is not an indicator or a guarantee of future performance.



26

The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested.

Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments.

The Fund invests mainly in Shariah-compliant equity and equity-related securities of companies around the world. Such securities have historically been subject to

significant price movements that may occur suddenly due to market or company-specific factors. As a result, the performance of the Fund can fluctuate considerably

over time.

Other significant risks include: emerging markets risk, currency risk, liquidity risk, Shariah compliance risk.

For full details of all of the risks applicable to this Fund, please refer to the “Risk Considerations” section of the Fund in the current prospectus of Franklin Templeton

Investment Funds.

What are the Key Risks?



27

Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.


Cash & Cash Equivalents

Financials

Real Estate

Utilities

Consumer Discretionary

Consumer Staples

Communication Services

Information Technology

Industrials

Materials

Health Care

Energy

0% 6% 12% 18% 24% 30%

Sector Allocation


MSCI AC World Islamic Index

Portfolio % Index % Over/Under %

Energy 24.13 16.73 7.40

Health Care 23.82 19.38 4.44

Pharmaceuticals, Biotechnology & Life Sciences

22.10 13.80 8.30

Health Care Equipment & Services

1.72 5.58 -3.86

Materials 11.42 10.89 0.54

Industrials 10.40 9.97 0.43

Capital Goods

7.84 7.09 0.75

Transportation

2.56 2.10 0.47

Commercial & Professional Services

0.00 0.79 -0.79

Information Technology 6.64 15.14 -8.50

Technology Hardware & Equipment

5.71 4.48 1.23

Software & Services

0.93 5.60 -4.68

Semiconductors & Semiconductor Equipment

0.00 5.05 -5.05

Communication Services 6.39 2.21 4.18

Telecommunication Services

6.39 1.50 4.89

Media & Entertainment

0.00 0.71 -0.71

Consumer Staples 5.61 9.55 -3.93

Food, Beverage & Tobacco

3.03 4.91 -1.88

Food & Staples Retailing

2.58 0.63 1.95

Household & Personal Products

0.00 4.00 -4.00

Consumer Discretionary 4.99 10.96 -5.97

Automobiles & Components

2.11 1.99 0.13

Retailing

1.64 5.17 -3.53

Consumer Durables & Apparel

1.24 3.59 -2.35

Consumer Services

0.00 0.21 -0.21

Utilities 3.53 2.65 0.88

Real Estate 0.00 2.13 -2.13

Financials 0.00 0.40 -0.40

Banks

0.00 0.20 -0.20

Diversified Financials

0.00 0.19 -0.19

Insurance

0.00 0.01 -0.01

Cash & Cash Equivalents 3.06 0.00 3.06


vs. MSCI AC World Islamic Index

As of 30 June 2019


MSCI AC World Islamic Index

Cash & Cash Equivalents

Mid-East / Africa

Latin America / Caribbean

Australia / New Zealand

North America

Asia

Europe

0% 10% 20% 30% 40% 50%

28


Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

Emerging markets exposure is based on the countries included in the MSCI Emerging Markets Index.




As of 30 June 2019

Geographic Allocation

Portfolio % Index % Over/Under %

Europe 45.26 28.36 16.90

Germany 11.61

4.61

7.00

United Kingdom 9.46

5.93

3.53

France 7.54

4.73

2.81

Switzerland 4.90

6.66

-1.76

Italy 4.18

0.53

3.66

Denmark 3.06

0.33

2.73

Ireland 1.58

0.26

1.32

Norway 1.19

0.41

0.77

Belgium 1.07

0.26

0.81

Netherlands 0.67

1.22

-0.55

Others 0.00 3.43 -3.43

Asia 33.82 19.75 14.07

Japan 12.96

8.04

4.92

China 9.37

4.24

5.13

South Korea 6.42

3.24

3.18

Hong Kong 2.73

1.00

1.73

Singapore 2.35

0.34

2.00

India 0.00

1.16

-1.16

Others 0.00 1.74 -1.74

North America 17.87 47.51 -29.64

United States 14.84

44.47

-29.63

Canada 3.03

3.04

-0.01

Australia / New Zealand 0.00 2.56 -2.56

Australia 0.00

2.39

-2.39

New Zealand 0.00

0.17

-0.17

Latin America / Caribbean 0.00 0.94 -0.94

Others 0.00 0.94 -0.94

Mid-East / Africa 0.00 0.88 -0.88

Others 0.00 0.88 -0.88

Cash & Cash Equivalents 3.06 0.00 3.06

Emerging Markets Exposure 15.78 13.41 2.38


29

The Ten Largest Holdings represent the ten largest holdings of the fund as of the date indicated. These securities do not represent all of the securities purchased, sold or recommended for advisory clients, and the reader should not assume that

investment in the securities listed was or will be profitable. All portfolio holdings are subject to change.

Holdings of the same issuer have been combined.

The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the top 10 holdings list.


Name of Issuer Country Industry % of Total

EXXON MOBIL CORP United States Energy 5.66

ROYAL DUTCH SHELL PLC United Kingdom Energy 4.48

BP PLC United Kingdom Energy 4.05

SAMSUNG ELECTRONICS CO LTD South Korea Technology Hardware & Equipment 3.52

ALLERGAN PLC United States Pharmaceuticals, Biotechnology & Life Sciences 3.26

ROCHE HOLDING AG Switzerland Pharmaceuticals, Biotechnology & Life Sciences 2.57

TOTAL SA France Energy 2.52

ENI SPA Italy Energy 2.46

SANOFI France Pharmaceuticals, Biotechnology & Life Sciences 2.31

E.ON SE Germany Utilities 2.12

Total 32.95

Top Ten Holdings


As of 30 June 2019



As of 30 June 2019


30

Portfolio Characteristics

Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

The portfolio characteristics listed are based on the Fund’s underlying holdings, and do not necessarily reflect the Fund’s characteristics. Due to data limitations all equity holdings are assumed to be the primary equity issue (usually the ordinary or

common shares) of each security’s issuing company. This methodology may cause small differences between the portfolio’s reported characteristics and the portfolio’s actual characteristics. In practice, Franklin Templeton’s portfolio managers

invest in the class or type of security which they believe is most appropriate at the time of purchase. The dividend yield quoted here is the yield on securities within the Fund’s portfolio and should not be used as an indication of the

income received from this portfolio. The market capitalisation figures for both the portfolio and the benchmark are the security level, not aggregated up to the main issuer.

Source: FactSet. Price Ratio calculations for the weighted average use harmonic means. Any exceptions to this are noted. Market capitalisation statistics are indicated in the base currency for the portfolio presented.



Portfolio Index

Price to Earnings (12-mo Trailing) 13.95x 16.18x

Price to Cash Flow 7.86x 9.75x

Price to Book 1.34x 2.14x

Dividend Yield 3.46% 2.69%

Market Capitalisation (Millions USD) 91,132 95,162

Market Capitalisation Breakdown in USD Portfolio %

<2.0 Billion 3.92

2.0-5.0 Billion 7.26

5.0-10.0 Billion 10.10

10.0-25.0 Billion 19.70

25.0-50.0 Billion 14.96

>50.0 Billion 44.06


31

Discrete Performance

Discrete Annual Performance (%)

Inception

Date

06/18

06/19

06/17

06/18

06/16

06/17

06/15

06/16

06/14

06/15

Templeton Shariah Global Equity Fund - A (acc) USD—Net of Fees 10.9.2012 -6.80 9.76 15.75 -8.27 -10.72

MSCI AC World Islamic Index 3.80 10.94 13.53 -0.95 -3.83

All performance data shown is in the Fund currency stated and net of management fees. Sales charges and other commissions, taxes and other relevant costs paid by the investor are not included in the calculations.

Performance data may represent blended share class performance, e.g., hybrid created from an A (dis) share class which was converted to A (acc).


When performance for either the portfolio or its benchmark has been converted, different foreign exchange closing rates may be used between the portfolio and its benchmark.

The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance is not an indicator

or a guarantee of future performance. Current performance may differ from figures shown. Currency fluctuations may affect the value of overseas investments. When investing in a fund

denominated in a foreign currency, performance may also be affected by currency fluctuations. Please visit www.franklinresources.com/countries for current performance.



As of 30 June 2019

Annualised Total Returns (%)

Inception

Date 1 Yr 3 Yrs 5 Yrs

Since

Incept

Templeton Shariah Global Equity Fund - A (acc) USD—Net of Fees 10.9.2012 -6.80 5.80 -0.61 3.31

MSCI AC World Islamic Index 3.80 9.35 4.49 7.62


Historical Performance


As of 30 June 2019









32

Cumulative Performance (%)

Inception

Date 1 Mth 3 Mths YTD 1 Yr 3 Yrs 5 Yrs

Since

Incept

Templeton Shariah Global Equity Fund - A (acc) USD—Net of Fees 10.9.2012 6.94 -0.95 7.96 -6.80 18.41 -3.03 24.80

MSCI AC World Islamic Index 7.52 2.24 14.64 3.80 30.75 24.54 64.81


33









Calendar Year Returns


As of 30 June 2019

YTD 2019 2018 2017 2016 2015 2014 2013

-15%

-5%

5%

15%

25%

7.96

14.64

-13.92 -9.58

18.54

22.31

7.19

8.47

-6.21 -5.01 -6.00

2.78

18.48

19.60

MSCI AC World Islamic IndexTempleton Shariah Global Equity Fund - A (acc) USD—Net of Fees


34

The base currency of a fund determines the risk-free rate index used in calculating certain risk statistics on this page. A fund that is based in USD uses the US T-Bill Index as the risk free rate return, a EUR-based fund uses the Euro 3-Month T-Bill

Index, a GBP-based fund uses the UK Treasury Bills 3 Month Index, a JPY-based fund uses the Japan Financing Bill 3 Month Index, and an AUD-based fund uses the Australia T-Note 3 Month Index.


^^Measured against the MSCI AC World Islamic Index.

*Annualised.



As of 30 June 2019

Performance Risk Statistics

1 Yr 3 Yrs* 5 Yrs*

Standard Deviation (%):

Templeton Shariah Global Equity Fund - A (acc) USD 16.11 10.92 11.74

MSCI AC World Islamic Index 16.57 11.19 11.62

Tracking Error (%)^^ 1.43 2.90 3.20

Information Ratio^^ -7.40 -1.23 -1.59

Beta^^ 0.97 0.95 0.97

Sharpe Ratio -0.56 0.41 -0.13


Performance Risk Statistics

Templeton Shariah Global Equity Fund is a new product and, accordingly, only has a short performance history. Returns for the Templeton Shariah Global Equity Composite are shown to provide historical information that Templeton believes is relevant to an investor considering Templeton Shariah Global Equity Fund and are provided as supplemental information. The composite consists of all discretionary institutional separate accounts with similar investment objectives of the Fund. Performance is shown gross and net of investmentmanagement fees. Mutual fund performance would be lower if fund expenses and sales charges were reflected.

The historical performance of the composite is not the performance of the Fund, and should not be viewed as a substitute for the Fund’s own performance. Nor is the historical performance of the composite necessarily indicative of how the Fund would have performed in the past or will perform in the future. The Fund’s actual performance may vary significantly from the past performance of the composite.

Supplemental Information

2942


35


Supplemental Information

Please see accompanying full performance presentation prepared in accordance with the Global Investment Performance Standards (GIPS®). Please also see the Important Information page in the Appendix.Templeton Shariah Global Equity Fund is a new product and, accordingly, only has a short performance history. Returns for the Templeton Shariah Global Equity Composite are shown to provide historical information that Templeton believes is relevant to an investor considering Templeton Shariah Global Equity Fund and are provided as supplemental information. The composite consists of all discretionary institutional separate accounts with similar investment objectives of the Fund. Performance is shown gross and net of investment management fees. Mutual fund performance would be lower if fund expenses and sales charges were reflected.The historical performance of the composite is not the performance of the Fund, and should not be viewed as a substitute for the Fund’s own performance. Nor is the historical performance of the composite necessarily indicative of how the Fund would have performed in the past or will perform in the future. The Fund’s actual performance may vary significantly from the past performance of the composite.Performance data is shown rounded to the nearest hundredth. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.Past performance is not an indicator or a guarantee of future performance.

Historical Performance

2942

Templeton Shariah Global Equity CompositeAs of 31 March 2019

Inception Date 1 Yr 3 Yr 5 YrSince

Incept

Templeton Shariah Global Equity Composite—Gross of Fees (USD) 30.11.2010 -0.26 8.30 3.19 8.61

Templeton Shariah Global Equity Composite—Net of Fees (USD) -0.66 7.84 2.74 8.15

MSCI AC World Islamic Index (USD) 3.30 9.85 5.20 7.30

Annualised Total Returns (%)

Inception Date 1 Mth Qtr 1 Yr 3 Yr 5 YrSince

Incept

Templeton Shariah Global Equity Composite—Gross of Fees (USD) 30.11.2010 0.76 9.86 -0.26 27.01 16.97 99.06

Templeton Shariah Global Equity Composite—Net of Fees (USD) 0.72 9.75 -0.66 25.38 14.44 92.05

MSCI AC World Islamic Index (USD) 1.29 12.13 3.30 32.54 28.86 79.84

Cumulative Total Returns (%)


36


Please see accompanying full performance presentation prepared in accordance with the Global Investment Performance Standards (GIPS®). Please also see the Important Information page in the Appendix.Templeton Shariah Global Equity Fund is a new product and, accordingly, only has a short performance history. Returns for the Templeton Shariah Global Equity Composite are shown to provide historical information that Templeton believes is relevant to an investor considering Templeton Shariah Global Equity Fund and are provided as supplemental information. The composite consists of all discretionary institutional separate accounts with similar investment objectives of the Fund. Performance is shown gross and net of investment management fees. Mutual fund performance would be lower if fund expenses and sales charges were reflected.The historical performance of the composite is not the performance of the Fund, and should not be viewed as a substitute for the Fund’s own performance. Nor is the historical performance of the composite necessarily indicative of how the Fund would have performed in the past or will perform in the future. The Fund’s actual performance may vary significantly from the past performance of the composite.Performance data is shown rounded to the nearest hundredth. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.Past performance is not an indicator or a guarantee of future performance.

Templeton Shariah Global Equity CompositeAs of 31 March 2019

Calendar Year Returns

2942

9.86

-10.07

16.21

10.12

-5.51 1.58

34.04

15.08

-1.69

12.13

-9.58

22.31

8.47

-5.012.78

19.60

11.49

-4.91

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

YTD 2019 2018 2017 2016 2015 2014 2013 2012 2011Templeton Shariah Global Equity Composite—Gross of Fees (USD) MSCI AC World Islamic Index (USD)


37


Templeton Global Equity Group—Value Investors Focused on Seeking Long-Term Capital Growth for Our Clients

2879

RIGOROUS BOTTOM-UP STOCK SELECTIONeveryone is an analyst in a broadly experienced research team, identifying undervalued stocks across global sectors and regions

FORTITUDE TO BE DIFFERENTconviction to purchase out-of-favoursecurities and patience to wait for value recognition

LONG-TERMPERSPECTIVEfive-year horizon takes advantageof short-term price volatility to reveal long-term investment opportunities

DISCIPLINED, REPEATABLE PROCESSadherence to valuation-driven philosophy and process that have navigated every market cycle over seven decades


What Sets Us Apart


38




39

Management Profiles



ALAN CHUA, CFAExecutive Vice PresidentPortfolio Manager/Research AnalystTempleton Global Equity GroupSingapore, Singapore

Alan Chua is an executive vice president and research analyst for the Templeton Global Equity Group, as well as a portfolio manager for a number of institutional and retail clients based in and outside Singapore. He has global research responsibilities for the machinery industry, as well as country research coverage of Japan.

Prior to joining Franklin Templeton in 2000, Mr. Chua was an associate director with UBS Asset Management and a senior corporate relationship officer for Deutsche Bank. He entered the financial services industry in 1989.

Mr. Chua holds a B.Sc. in economics from the University of Oregon and an M.B.A. from the London Business School. He is a Chartered Financial Analyst (CFA) charterholder.



40

Management Profile

PETER WILMSHURST, CFAExecutive Vice PresidentPortfolio Manager, Research AnalystTempleton Global Equity GroupFranklin Templeton Investments Australia LimitedMelbourne, Victoria, Australia

Peter Wilmshurst is an executive vice president in the Templeton Global Equity Group with research responsibility for global technology companies. He is also the portfolio manager of a number of Templeton's global portfolios.

Prior to joining Franklin Templeton in 1998, Mr. Wilmshurst was an equity portfolio manager and analyst with Norwich Investment Management in Australia andan actuary at MLC Life Company. He entered the financial services industry in 1993.

Mr. Wilmshurst holds a bachelor of economics degree and a master of economics degree from Macquarie University (Australia). He qualified as a Fellow of theInstitute of the Actuaries of Australia and as a Fellow of the Financial Services Institute of Australia. Mr. Wilmshurst is a Chartered Financial Analyst (CFA) charterholder and a past president of the CFA Society of Melbourne.


Management Profile


41

42

Appendix



As of 30 June 2019.Templeton Global Equity leverages expertise and resources throughout the broader global organisation, Franklin Templeton Investments. Templeton Global Equity is part of the Templeton firm definition and Templeton Global Macro, Franklin Fixed Income and Franklin Templeton Emerging Markets Equity are part of the Franklin firm definition for purposes of compliance with the Global Investment Performance Standards (GIPS®).Franklin and Templeton claim compliance with GIPS®. LAM firms, Franklin Templeton Investment Trust Management Co., Ltd. (Korea) and Bissett Investment Management (Canada) also claim compliance with GIPS®; all other LAM firms do not claim compliance with GIPS®. Franklin Europe has been integrated into the Templeton firm definition as of December 1, 2017.

Collaboration with Financial Experts Across Franklin Templeton

2883

Analysts and Portfolio Managers in 16 Locations

Analysts and Portfolio Managers in over 20 Locations

TEMPLETON GLOBAL EQUITY33 Analysts, Portfolio Managers

Consultants and Analysts in 19 Locations

Expertise on Macroeconomic and Currency Trends

Generates Accurate, Relevant and Timely Performance and Investment Risk Analytics

Perspective and Insights on Local Business Conditions and Economic and Political Risks

0


43


Collaboration with Financial Experts Across Franklin Templeton

Risk Management—Templeton Global Equity Group

2887

Templeton maintains a robust, multi-faceted risk management process throughout its organisational structure.

Levels of Risk Management:Templeton Philosophy and Process

Templeton applies a long-term, bottom-up, value investment philosophy• Long-term view allows us to use volatility to our advantage over a secular

investment horizon• Rigorous, bottom-up analysis determines normalised business value• Search for significant valuation discount to help reduce downside risk

Equally important is the process by which Templeton’s philosophy is implemented• Analysts bring their best ideas to our global investment team• Investment debate & critique attempts to identify potential flaws in the thesis

• Portfolios are diversified in an effort to help reduce stock-specific risk• Frequent communication ensures portfolios reflect convictions

Core: Templeton Global Equity Group (GEG)

Dedicated Risk Review Corporate Risk CommitteesInvestment Risk Management Group• A team of specialised risk professionals reporting directly

to Franklin Templeton’s CEO• Generates accurate, relevant and timely performance and

investment risk analytics• Oversees the strategy’s performance against guidelines,

company policies and industry standards

• The Complex Securities Review Committee helps PMs understand the risks associated with more esoteric securities

• The Counterparty Credit Committee (CCC) assesses risks posed by banks and brokers that act as our trading partners

• These two Franklin Templeton committees that assess and manage portfolio risk have been in place since before the most recent Global Financial Crisis

Complementary: Investment Risk Management Group Complementary: Franklin Templeton (FT)

CorporateRisk

Committees (FT)Investment

Risk Management

GroupTempleton

Philosophy & Process (GEG)


44


Risk Management—Templeton Global Equity Group

Trade Execution and Implementation• Integrating trading and overlaying informed execution on top of investment decisions may provide opportunities for increased investment

performance by maximising market insight, relationships, trading strategies and technologies

An Integrated Global Trading Platform

2888

GLOBAL TRADINGPLATFORM

IMPLEMENTATION

AND

EXECUTION

Present trading ideas and strategies

Suggest timing and manage liquidity

Filter and present potentially opportunistic information

Actively seek to reduce trading costs

Seek to decrease impact and opportunity costs of trading

Coordinate and foster collaboration

Manage and seek to optimise commissions

Understand the daily market dynamics


45


An Integrated Global Trading Platform

46

Important Information



Glossary


47


Beta: A measure of the magnitude of a portfolio's past share-price fluctuations in relation to the ups and downs of the overall market (or appropriate market index). The market (or index)

is assigned a beta of 1.00, so a portfolio with a beta of 1.20 would have seen its share price rise or fall by 12% when the overall market rose or fell by 10%.

Dividend Yield: The annual dividend received on an equity security as a percentage of the price. For a portfolio, the value represents a weighted average of the stocks it holds. It should

not be used as an indication of the income received from this portfolio.

Information Ratio: In investing terminology, the ratio of expected return to risk. Usually, this statistical technique is used to measure a manager's performance against a benchmark.

This measure explicitly relates the degree by which an investment has beaten the benchmark to the consistency by which the investment has beaten the benchmark.

Market Capitalisation: A determination of a company's value, calculated by multiplying the total number of company stock shares outstanding by the price per share.

Price to Book: The price per share of a stock divided by its book value (i.e., net worth) per share. For a portfolio, the value represents a weighted average of the stocks it holds.

Price to Cash Flow: Supplements price/earnings ratio as a measure of relative value for a stock. For a portfolio, the value represents a weighted average of the stocks it holds.

Price to Earnings (12-mo Trailing): The share price of a stock, divided by its per-share earnings over the past year. For a portfolio, the value represents a weighted average of the

stocks it holds.

Sharpe Ratio: To calculate a Sharpe ratio, an asset's excess returns (its return in excess of the return generated by risk-free assets such as Treasury bills) are divided by the asset's

standard deviation.

Standard Deviation: A measure of the degree to which a fund's return varies from the average of its previous returns. The larger the standard deviation, the greater the likelihood (and

risk) that a fund's performance will fluctuate from the average return.

Tracking Error: Measure of the deviation of the return of a fund compared to the return of a benchmark over a fixed period of time. Expressed as a percentage. The more passively the

investment fund is managed, the smaller the tracking error.



48

Important Information

Firm Definition: Templeton (or the “firm”) as defined encompasses the wholly-owned investment management subsidiaries of Templeton Worldwide, Inc. with global, international, single country

or regional, and emerging market equity investment objectives, serving both retail and institutional clients. The firm definition for Templeton does not include the foreign-domiciled investment

advisory subsidiaries of Templeton Worldwide, Inc. that primarily offer only locally registered investment mandates or funds and the wrap-fee and non wrap-fee accounts managed by Templeton

Separately Managed Accounts (formerly Templeton Portfolio Advisers).

Performance is that of Templeton, rather than the individual investment advisor subsidiaries which comprise Templeton, some of which may have existed for less than the full period reported or

have limited or no accounts included in the composite. Templeton believes that the performance shown is representative of its management style and relevant for consideration in selecting any

individual investment advisor subsidiary comprising Templeton.

Templeton has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®).

Composite Description: Templeton Shariah Global Equity Composite consist of all discretionary portfolios subject to Shariah investment principles which seeks capital appreciation by investing

primarily in Shariah approved equity securities of any country, including developed and emerging markets. Past performance is not an indicator or a guarantee of future performance.

Benchmark: MSCI All Country World Islamic Index, the primary benchmark for this composite, is based on the traditional MSCI All Country World Index but excludes securities not in

compliance with Shariah investment principles.

Additional information regarding the firm’s policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. As a firm with many mutual

funds with unique investment objectives that are subject to varying regulatory requirements based on domicile of jurisdiction, the firm considers many of its mutual funds to be single account

composites, for which the objective is as stated in each respective fund’s prospectus. To receive a complete list and description of the firm’s composites (including any single account mutual

fund composite) contact your Franklin Templeton representative.

Explanatory Notes:

All Morgan Stanley Capital International (MSCI) data is provided “as is”. The composite described herein is not sponsored or endorsed by MSCI. In no event shall MSCI, its affiliates or any MSCI

data provider have any liability of any kind in connection with the MSCI data or the composite described herein. Copying or redistributing the MSCI data is strictly prohibited.

Please note this document represents preliminary analysis and suggestions of an investment advisor affiliated with Templeton Worldwide, Inc., with respect to this prospective client’s

investment. The advisor has not yet been engaged as investment manager on behalf of this prospective client, and these preliminary comments should not be construed or relied upon as

investment advice.

Effective with the third quarter of 2008, composite returns in base currency are translated to other currencies using London FX rates instead of New York rates for all time periods presented,



49

Important Information (continued)

which may result in revisions to multi-currency returns compared to what was previously reported for prior periods.

Important Disclosures



50

© 2019 Franklin Templeton Investments. All rights reserved. This document/marketing material is directed at Professional Clients. Franklin Templeton Shariah Funds (the “Fund”) is a

Luxembourg registered SICAV. Source for data and information provided by Franklin Templeton Investments, is as of the date of this document, unless otherwise noted. Benchmark related data

provided by FactSet, is as of the date of this document, unless otherwise noted. This document does not constitute a legal or tax advice nor an investment advice or an offer for shares of the

Fund. Subscriptions to shares of the Fund can only be made on the basis of the current prospectus, accompanied by the latest available audited annual report and semi-annual report accessible

on our website at www.franklintempletongem.com or which can be obtained, free of charge, from Franklin Templeton Investments, Gate Building, East Wing, 2nd Floor, Dubai International

Financial Centre, P.O. Box 506613, Dubai, U.A.E. No shares of the Fund may be directly or indirectly offered or sold to residents of the United States of America. Shares of the Fund are not

available for distribution in all jurisdictions and prospective investors should confirm availability with their local Franklin Templeton Investments representative before making any plans to invest.

An investment in the Fund entails risks, which are described in the Fund’s prospectus. Special risks may be associated with a Fund’s investment in certain types of securities, asset classes,

sectors, markets, currencies or countries and in the Fund’s possible use of derivatives. In emerging markets, the risks can be greater than developed markets. These risks are more fully

described in the Fund’s prospectus and should be read closely before investing. The value of shares in the Fund and income received from it can go down as well as up, and investors may not

get back the full amount invested. Past performance is not an indicator or a guarantee of future performance. When investing in a fund denominated in a foreign currency, the performance

may also be affected by currency fluctuations. All investments involve risk and there can be no guarantee against loss resulting from an investment in the Fund, nor can there be any assurance

that the Fund’s investment objective(s) will be attained.

The investment activities will be undertaken in accordance with the Shariah Guidelines. As a consequence, the performance of a Fund may possibly be lower than other investment funds that do

not seek to strictly adhere to the Islamic investment criteria. The requirement to “purify” cash holdings or dividend income will likely result in payments being made to charities. The return to

investors will be reduced by the amount of such payments. The International Shariah Supervisory Board of Amanie Advisors Sdn Bhd has certified that the Fund is in compliance with the

requirements of the Shariah principles. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

Issued by Franklin Templeton Investments (ME) Limited, authorized and regulated by the Dubai Financial Services Authority.

© 2019 Franklin Templeton Investments. All rights reserved.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.

All MSCI data is provided “as is.” The Fund described herein is not sponsored or endorsed by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind

in connection with the MSCI data or the Fund described herein. Copying or redistributing the MSCI data is strictly prohibited.

Total Firm Assets

(Millions)

No of Portfolios (End of Period)

Equal-Wtd Dispersion

Calendar Year

Composite Total Return

Gross

Primary Benchmark

Return

Composite Gross

Annualized 3-Yr St Dev

Primary Benchmark Annualized 3-Yr St Dev

Composite Assets

(Millions)

All Returns and Asset Figures in USD

Composite Total Return

Net

Templeton Shariah Global Equity Composite

9.86% 9.75% 95,524.44 ≤5 ≤512.13% 9.09% 9.81% 290.87YTD*

-10.07% -10.44% 92,495.21 ≤5 ≤5-9.58% 9.94% 10.23% 264.282018

16.21% 15.70% 129,511.89 ≤5 ≤522.31% 10.56% 10.29% 296.532017

10.12% 9.63% 120,384.51 ≤5 ≤58.47% 11.69% 11.15% 259.352016

-5.51% -5.92% 131,152.60 ≤5 ≤5-5.01% 11.52% 10.85% 248.952015

1.57% 1.13% 161,674.05 ≤5 ≤52.78% 11.19% 10.44% 264.752014

34.04% 33.53% 173,603.96 ≤5 ≤519.60% 14.09% 13.90% 861.922013

15.08% 14.58% 152,823.67 ≤5 ≤511.49% < 3 Years < 3 Years 292.292012

-1.69% -2.09% 134,424.30 ≤5 ≤5-4.91% < 3 Years < 3 Years 279.622011

8.19% 8.09% 162,992.41 ≤5 ≤58.01% < 3 Years < 3 Years 101.352010**

1 Templeton claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS® standards. Templeton has been independently verified for the periods 1 January 1994 to 31 December 2017. The verification report is available upon request.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS® standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS® standards. Verification does not ensure the accuracy of any specific composite presentation.

2 Past performance is not an indicator or a guarantee of future results.

3 Benchmark returns and the benchmark annualized three year standard deviation for all periods are not covered by the Independent Accountant's Verification Report. In addition, the composite gross annualized three year standard deviation for periods before 2011 is not covered by the Independent Accountant's Verification Report.

N/A = Not Available

* Year to Date reflects performance through 3/31/2019 and composite composition as of 3/31/2019

** Partial period represents data from 11/30/2010

Primary Benchmark: MSCI All Country World Islamic Index.

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GIPS Performance Presentation

Disclosures:

a Firm Definition - Templeton (or the "firm") as defined encompasses the wholly owned investment management subsidiaries of Templeton Worldwide, Inc. with global, international, single country or regional, and emerging market equity investment objectives serving both retail and institutional clients. The firm definition for Templeton does not include the foreign-domiciled investment advisory subsidiaries of Templeton Worldwide, Inc. that primarily offer only locally registered investment mandates or funds and the wrap-fee and non wrap-fee accounts managed by Templeton Separately Managed Accounts. Each investment advisory subsidiary within Templeton employs the same bottom-up, value-oriented investment style whether managing global equity, non-U.S. equity, single country or regional equity, or emerging market equity mandates. Portfolio managers pursuing similar investment mandates share research, have equivalent access to Templeton’s bargain and source of funds lists, and are subject to the same peer review process. Templeton believes that the performance shown is representative of its management style and relevant for consideration in selecting any individual investment advisory subsidiary comprising Templeton. Some of the individual investment advisory subsidiaries which comprise Templeton, however, may have limited or no accounts included in the composite. Effective 1 December 2017, the equity accounts previously defined as Franklin Europe are included in Templeton's firm definition.

b Composite Description - The Templeton Shariah Global Equity Composite consist of all discretionary portfolios subject to Shariah investment principles which seeks capital appreciation by investing primarily in Shariah approved equity securities of any country, including developed and emerging markets. Mutual funds (including private label mutual funds), commingled trusts, and other unitized funds are defined as single account composites due to variations in diversification rules, more frequent cash flows related to redemptions and subscriptions, and tax considerations. As a result, such accounts are not included in this composite, which consists of only separately managed institutional accounts. No account(s) in the composite use leverage or derivatives other than the use of forward foreign currency contracts in conjunction with the normal settlement of security trades in currencies other than the base currency of each account. As a result, leverage or derivatives do not have a material effect on returns. Foreign investing, especially in developing countries, has risks such as currency, market volatility and political or social instability. The strategy is managed in accordance with Shariah investment principles. The base currency of the composite is US Dollars (USD). The inception date of the composite is 30 November 2010. The composite was created December 2012. The firm claims compliance with GIPS® since January 1994. Eligible new accounts and eligible accounts that have changed to this mandate are added to the composite after two full calendar months of performance, excluding any first partial month following inception or notification of mandate change. Accounts are removed from the composite if there is a change in mandate, if notification of termination is received, or if accounts become non-discretionary due to client-directed restrictions according to the firm's definition of what constitutes discretion. Removal occurs as of the month-end prior to the date of notification of the change or termination.

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c Basis of Presentation and Calculation Methodology - Gross Total Returns are presented gross of investment advisory fees and Net Total Returns are presented net of investment advisory fees. Gross and Net Total Returns are calculated net of brokerage commissions and other expenses a client would have paid and assume reinvestment of any dividends, interest income, capital gains or other earnings. Dividends, interest income, and capital gains are net of any applicable withholding and/or capital gains taxes. Both gross and net performance results are time-weighted rates of return, including realized and unrealized gains and losses. For separate accounts, net performance reflects actual investment management fees charged, assessed quarterly in arrears, and actual performance fees if applicable. Monthly composite returns are calculated by weighting each account’s monthly return by its beginning market value as a percent of the total composite beginning market value. Quarterly and annual returns are calculated by linking the monthly returns through compounded multiplication. Returns for periods of less than one year are not annualized.

All portfolios are valued daily at fair market value, with separate accounts valued on a trade date basis. Market values include accrued income for fixed income securities and accrued dividends for equity securities based on ex-dividend date and are adjusted for all cash flows. Where market quotations are readily available, securities are valued thereon (using closing quotations when available), provided such quotations adequately reflect, in the judgment of the firm, the fair value of the securities. Positions for which no quotation is readily available are valued at fair market value using quotations from brokers or using Templeton's own assessment of fair market value based on fundamental analysis (earnings multiples, price to cash flow analysis), discounts from market prices of similar securities, or matrix pricing, among other methods.

Securities not in the base currency of composite portfolios are valued based on closing foreign exchange (FX) rates obtained through Reuters depending upon the stated client preference. Generally, portfolios are valued using New York Close FX rates or London Close FX rates, though other FX rates may be selected by the client. For accounts and benchmarks not in the base currency of the composite, London Close FX rate is used to translate the accounts and benchmarks to the composite base currency. Past performance is not an indicator or a guarantee of future performance.

d Description of Index - The primary benchmark for this composite is MSCI All Country World Islamic Index, which is based on the traditional MSCI All Country World Index but excludes securities not in compliance with Sharia investment principles. Returns for the benchmark include dividends and interest income (if applicable) not adjusted for foreign withholding taxes (the "gross of dividends" series of MSCI) and are based on London Close foreign exchange (FX) rates. FX rates used by index providers are obtained from their respective FX vendors and may differ slightly from the FX rates used by Templeton. The benchmark is used for comparative purposes only and is provided to represent the investment environment existing during the periods shown. Additionally, the benchmark does not reflect any fees, expenses or sales charges.

All MSCI data is provided “as is”. The composite described herein is not sponsored or endorsed by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind in connection with the MSCI data or the composite described herein. Copying or redistributing MSCI data is strictly prohibited.

e Minimum Account Size - There is no minimum account size required to be included in this composite.

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f Standard Fee Schedule - The standard investment management fee schedule has breakpoints depending on asset size, with the result that accounts with higher asset levels will typically pay a lower fee. The actual investment management fees for any separate account will be set forth in a written investment management agreement between the client and the investment manager. The methodology for calculating returns gross and net of fees for separate accounts is described in the Basis of Presentation footnote above. The fees used in calculating the net performance in the composite may be different than the current investment management fee schedule for separate accounts. The current standard fee schedule for investment management fees applicable to separate accounts for this investment strategy is presented below in USD and is subject to change.

Breakpoints Separate AccountsFirst $50 million 0.70%Next $50 million 0.55%Next $50 million 0.50%Next $150million 0.40%Over $300 million 0.35%

g Measure of Dispersion - Dispersion represents the consistency of Templeton’s results with respect to individual portfolio returns within the composite. The dispersion of annual returns is measured by the standard deviation of equal-weighted returns for those accounts that were in the composite for each full calendar year, or partial year for the most recent year-to-date. Dispersion is not meaningful when there are five or fewer accounts in a given year or time period, so is not presented for this composite for periods when this is applicable, in accordance with GIPS guidelines.

h 3 Year Standard Deviation - The annualized three year standard deviation measures the variability of the composite and benchmark returns over the preceding 36 month period as of each period end.

i Additional Information - The firm’s policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Templeton manages many portfolios with unique investment objectives and considers these accounts to be single account composites for which the objective is stated in the prospectus, private placement memorandum or investment management agreement. To receive a complete list and description of Templeton composites (including a list of single account composites) contact your Franklin Templeton representative at 1.800.321.8563.

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templeton shariah global equity fund

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