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Franklin Templeton Fixed Income Group

Data as of 30 November 2014

Franklin Templeton Investment Funds

Templeton Global Total Return Fund - I(acc) EUR

Source for data and information provided by Franklin Templeton Investments, as of the date of this presentation, unless otherwise noted. Benchmark related data provided by FactSet, as of the date of this presentation, unless otherwise noted.
For professional investor use only. Not for distribution to retail investors.

Templeton Global Total Return Fund

Table of Contents

Topics for Discussion..............................................................................................................4

Case Study: Ireland..............................................................................................................26

Investment Platform Overview.................................................................................................5

Executive Summary.............................................................................................................. 27

Fund Description....................................................................................................................6

Portfolio Characteristics........................................................................................................28

Fund Overview....................................................................................................................... 7

Geographic Allocation...........................................................................................................29

W hy Consider This Fund?...................................................................................................... 8

Currency Allocation...............................................................................................................30

A Record of Strong Performance.............................................................................................9

Sector Allocation...................................................................................................................31

Relatively Low to Moderate Correlations Historically to Other Asset Classes..........................10

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

Prolonged Advances vs. Moderate Declines..........................................................................11

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

Distinguishing VolatilityFundamental vs. Market Risks........................................................12

Summary of Advantages.......................................................................................................34

Historically Attractive Risk/Return Profile Compared to Other Asset Classes..........................13

Glossary...............................................................................................................................35

A Different Perspective..........................................................................................................14

Important Disclosures...........................................................................................................36

Expanding Opportunity Set....................................................................................................15


On-the-Ground Research......................................................................................................16

Appendix............................................................................................................38

Insight and Information Sharing Around the Globe................................................................. 17

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

A Team of Global Fixed Income Experts................................................................................ 18

Global Bond Group Management Profiles.............................................................................. 40

Investment Philosophy..........................................................................................................19
Investment Process.............................................................................................................. 20
Global ResearchMultiple Perspectives/Lenses................................................................... 21
Country Research Can Help to Identify Potential Alpha Sources............................................ 22
Portfolio ConstructionGlobal Position Sizing....................................................................... 23
Risk Management Integral to the Process............................................................................. 24
Portfolio Positioning.............................................................................................................. 25

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

Module: Additional Resources........................................................................44


Global Aggregate/EMD Team (New York, London).................................................................45
A Specialised Local Asset Management (LAM) Team............................................................ 46
Fixed Income Policy Committee (FIPC)..................................................................................47

Module: Performance Attribution...................................................................48


Three Sources of Potential Alpha Over Time..........................................................................49

Templeton Global Total Return Fund

Table of Contents (continued)

Module: Process Implementation Examples.................................................50


Navigating Global Divergence............................................................................................... 51
Active Duration Management................................................................................................ 52

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

2958S

Templeton Global Total Return Fund

Topics for Discussion

Firm and Investment Platform Overview

Tab 1

Description, Overview and Why Consider This Fund?

Tab 2

A Different Perspective

Tab 3

An Unconstrained Worldview
A Truly Global Research Platform
A High-Conviction Process

Portfolio Positioning, Ireland Case Study and Executive Summary

Tab 4

Characteristics and Performance

Tab 5

Summary of Advantages

Tab 6

Appendix

Tab 7

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

Templeton Global Total Return Fund

Investment Platform Overview

FRANKLIN TEMPLETON INVESTMENTS


Total Combined Assets Under Management (Total AUM) : 711.0 Billion
Franklin Equity
Group
Established
Focus

1947
U.S. Equity

Templeton
Emerging Markets
Group
1987
Emerging Markets Equity

Global Equity

Templeton Global
Equity Group
1940

Franklin Mutual
Series
1949

Franklin Templeton
Fixed Income
Group

Franklin Local
Asset Management

1970

1993

Global Equity

Global Equity

Global Fixed Income

International Equity

International Equity

Regional Fixed Income

U.S. Equity

Emerging Market Debt

International Equity

Distressed Debt & Merger


Arbitrage

Franklin Real Asset Franklin Templeton


Advisors
Solutions
1984

Global Equity & Fixed


Income

Global Private Real


Estate

Regional Equity & Fixed


Income

Global Listed Real Estate


Securities

Single-Country Equity &


Fixed Income

Global Listed
Infrastructure

1994
Multi-Asset Strategy
Global Tactical Asset
Allocation
Custom / Advisory
Solutions - Alternative &
Traditional
Hedge Fund Portfolios
(Multi- & Single Strategy)
& Replication

Style

Growth, Value,
Core/Hybrid

Core Value

Core Value

Deep Value

Single Sector,
Multi-Sector

Multi-Sector, Single- or
Multi-Region

Multi-Sector, Multi-Region Multi-Style, Multi-Region,


Hedged

AUM

160.5 Billion

36.2 Billion

99.5 Billion

59.5 Billion

281.0 Billion

45.4 Billion

3.8 Billion

33.3 Billion

Source: Franklin Templeton Investments (FTI), as of 30 September 2014 unless otherwise noted, based on latest available data. Total combined Assets Under Management (Total AUM) combines the 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 organisation operating as FTI. Total and platform AUM includes discretionary and advisory accounts, including pooled investment
vehicles, separate accounts and other vehicles, as well as some accounts that may not be eligible for inclusion in composites as defined by the firms policies. 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 Solutions (FT Solutions) invests in various investment platforms advised by a number of investment advisory entities within FTI. Platform AUM reported for FT Solutions therefore includes 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.
As at 30 June 2014, Mutual Series, Franklin Templeton Local Asset Management and Franklin Templeton Real Asset Advisors were renamed Franklin Mutual Series, Franklin Local Asset Management and Franklin Real Asset
Advisors, respectively. Please refer to the Important Disclosures slide for additional information.
For professional investor use only. Not for distribution to retail investors.

2947S

Templeton Global Total Return Fund

Fund Description

Seeks to:

Maximise, consistent with prudent investment management, total investment return consisting
of a combination of interest income, capital appreciation and currency gains

Capitalise on the large, expanding opportunity set in global bonds


Capture potential alpha opportunities in global fixed income and currencies
Achieve solid, long-term, risk-adjusted returns in diverse market conditions

All investments involve risks, including possible loss of principal. Currency rates may fluctuate significantly over short periods of time, and can reduce
returns. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in
significant volatility and cause the fund to participate in losses (as well as enable gains) on an amount that exceeds the funds initial investment. The fund
may not achieve the anticipated benefits, and may realise losses when a counterparty fails to perform as promised. Foreign securities involve special risks,
including currency fluctuations and economic and political uncertainties. Investments in emerging markets involve heightened risks related to the same
factors, in addition to those associated with these markets smaller size and lesser liquidity. Investments in lower-rated bonds include higher risk of default
and loss of principal. Changes in interest rates will affect the value of the funds portfolio and its share price and yield. Bond prices generally move in the
opposite direction of interest rates. As the prices of bonds in the fund adjust to a rise in interest rates, the funds share price may decline. The fund is nondiversified, which involves the risk of greater price fluctuation than a more diversified portfolio. Changes in the financial strength of a bond issuer or in
a bonds credit rating may affect its value. These and other risk considerations are discussed in the funds prospectus.

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

2948S

Templeton Global Total Return Fund

Fund Overview

Investment Objectives1

Seek to maximise, consistent with prudent investment management, total investment return consisting of a combination of interest
income, capital appreciation and currency gains

Take advantage of an unconstrained worldview independent from its benchmarkthe Barclays Multiverse Index
Seek to maintain a portfolio risk profile commensurate with the volatility of the benchmark
Investment Focus

Invest in global debt securities and global currencies across all sectors and utilises active currency management
Limit below-investment grade securities exposure
May include allocations to both developed and emerging markets
Potential Sources of Value Added

May utilise three independent sources of alpha potential:


Yield Curve
Currencies
Credit

1. There is no assurance that the strategy will achieve its investment objectives. As stated above, the strategy is managed in a benchmark unconstrained manner.
For professional investor use only. Not for distribution to retail investors.

Templeton Global Total Return Fund

Why Consider This Fund?

Global financial markets continued to be more broadly influenced by the pickup in growth in the United States and by economic stabilization in

China, in our assessment, rather than escalating geopolitical tensions.

During the third quarter, the funds negative absolute performance was primarily attributable to currency positions followed by overall credit
exposures. Interest-rate strategies contributed to absolute return.
The funds relative performance benefited from currency positions, while overall credit exposures and interest-rate strategies had a neutral effect.

The information is not a complete analysis of every aspect of any market, country, industry, security or portfolio. Statements of fact are from sources considered to be reliable, but no representation or warranty is made as to their completeness or
accuracy. Because market and economic conditions are subject to rapid change, opinions provided are valid only as of the date indicated. The views expressed may not be relied upon as investment advice and are not share class specific. An
investment in the Fund entails risks, which are described in the Funds prospectus and where available, in the relevant Key Investor Information Document. Special risks may be associated with a Funds investment in certain types of securities, asset
classes, sectors, markets, currencies or countries and in the Funds possible use of derivatives. These risks are more fully described in the Funds prospectus and should be read closely before investing.
For professional investor use only. Not for distribution to retail investors.

Templeton Global Total Return Fund

A Record of Strong Performance

Templeton Global Total Return Fund - I(acc) EUR


vs. Barclays Multiverse Index
Annualised Total Returns (%)
As of 30 November 2014

Monthly Rolling 3-Year Annualised Returns


30 September 2009 to 30 November 2014
Templeton Global Total Return Fund - I(acc) EURNet of Fees

24%

Inception
Date

OUTPERFORMED
Templeton Global Total Return Fund - I(acc)
EURNet of Fees

18%

Barclays Multiverse Index

3 Yrs

Since
5 Yrs Incept

1.9.2006 11.86 12.81 11.08


4.11

6.15

4.96

Templeton Global Total Return Fund - I(acc) EUR outperformed the Barclays
Multiverse Index 63 out of the 63 monthly rolling 3-year periods shown above

12%

6%

0%

UNDERPERFORMED
0%

6%

12%

18%

24%

Barclays Multiverse Index

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.
Annualized rolling periods are plotted on a monthly or quarterly basis as indicated. The leading diagonal line links points of return for the index (lower axis). For every point of return along this line there is a corresponding return for the fund represented by
the blue square (left axis). Any point above the line represents outperformance relative to the index for that period. Any point below the line represents underperformance relative to the index for that period.
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 does not guarantee future results. 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 franklintempleton.lu for current
performance.
Performance data may represent blended share class performance, e.g., hybrid created from an A(dis) share class which was converted to A(acc).
The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details.
For professional investor use only. Not for distribution to retail investors.

2949S

Templeton Global Total Return Fund

Relatively Low to Moderate Correlations Historically to Other Asset Classes

Templeton Global Total Return Fund - A(Mdis) USD


5-Year Rolling Correlations
Period Ending 30 September 2014

5 Years Ending 30/09/2014

1.00

U.S. Bonds

0.05

High Yield Bonds

0.78

Emerging Markets Sovereign Debt

0.75

U.S. Stocks

0.74

World Stocks1

0.82

FX Carry

0.86

Hedge Funds

0.81

Commodities

0.63

0.75

0.50

0.25

U.S. Bonds
U.S. Stocks
Hedge Funds

High Yield Bonds


World Stocks
Commodities

Correlation: 1 = perfect positive correlation

0 = no correlation

Sep-14

Jun-14

Mar-14

Dec-13

Sep-13

Jun-13

Mar-13

Dec-12

Sep-12

Jun-12

Mar-12

Dec-11

Sep-11

Jun-11

Mar-11

Dec-10

Sep-10

Jun-10

Mar-10

Dec-09

Sep-09

Jun-09

Mar-09

Dec-08

Sep-08

0.00

Emerging Markets Sovereign Debt


FX Carry

-1 = perfect negative correlation

1. Source: Morgan Stanley Capital International (MSCI). All MSCI data is provided as is. 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 information described herein.
Copying or redistributing the MSCI data is strictly prohibited.
Sources: Barclays, Citigroup, JP Morgan, Standard & Poors, Deutsche Bank, Hedge Fund Research, Inc. STANDARD & POORS, S&P and S&P 500 are registered trademarks of Standard & Poors Financial Services LLC.
Standard & Poors does not sponsor, endorse, sell or promote any S&P index-based product. The above chart is for illustrative and discussion purposes only. U.S. Bonds are represented by the Barclays U.S. Aggregate Index; U.S. Stocks are
represented by the S&P 500 Index; Hedge Funds are represented by the HFRI Fund Weighted Composite Index; High Yield Bonds are represented by the Citigroup High Yield Market Local Currency Index; World Stocks are represented by the MSCI
World Index; Commodities are represented by the S&P GSCI Official Close Index; Emerging Markets Sovereign Debt are represented by the JP Morgan Emerging Markets Bond Index EMBI Global Composite; FX Carry are represented by the Deutsche
Bank G10 Currency Future Harvest Index. The information is historical over the indicated time period and may vary significantly over other past time periods.
Indexes are unmanaged, and one cannot invest directly in an index.
Past performance is not an indicator or a guarantee of future performance. Charts are for illustrative and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

10

2950S

Templeton Global Total Return Fund

Prolonged Advances vs. Moderate Declines

The chart below illustrates the performance of Templeton Global Total Return Fund-A(Mdis) USD. The chart below is supplemental
information to be considered in addition to, and not in lieu of, the Templeton Global Total Return Fund-A(Mdis) USD historical
performance information.

Cumulative Daily Returns for Each Period


As of 30 September 2014
60%

Average Advance:
20.52%; 8.9 months

50%
40%

An advance (decline) is any


period of a month or longer when
cumulative daily returns exceed (fall
more than) twice the standard
deviation of rolling monthly returns of
the entire sample period.

30%
20%
10%
0%
-10%
-20%
Dec-03 Aug-04 May-05 Jan-06

Average Decline:
-8.88%; 3.4 months
Oct-06

Jul-07

Mar-08 Dec-08 Sep-09 May-10 Feb-11 Nov-11

Jul-12

Apr-13

Dec-13 Sep-14

Performance for the Templeton Global Total Return Fund-A(Mdis) USD is historical and may not reflect current or future performance. The performance information above is net of management fees and other expenses, assumes reinvestment of any
dividends and is in the fund currency stated. Sales charges and other commissions, taxes and other relevant costs paid by the investor are not included in the calculations. If they were included, the returns would have been lower. The performance
shown relates to the Class A(Mdis) shares and the performance of other share classes may vary depending on their respective commissions and fees. Results may differ over other historical time periods.
Past performance is not an indicator or a guarantee of future performance.?Charts are for illustrative and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

11

2951S

Templeton Global Total Return Fund

Distinguishing VolatilityFundamental vs. Market Risks


Risk
Annualised Rolling 3-Month Volatility
As of 31 December 2014
80%

70%

60%

50%

40%

30%

20%

10%

Templeton Global Total Return FundNet of Fees (USD)

U.S. Equity

Dec-14

Sep-14

Jun-14

Mar-14

Dec-13

Jun-13

Sep-13

Mar-13

Dec-12

Jun-12

Sep-12

Mar-12

Dec-11

Sep-11

Jun-11

Mar-11

Dec-10

Jun-10

Sep-10

Mar-10

Dec-09

Sep-09

Jun-09

Mar-09

Dec-08

Jun-08

Sep-08

Mar-08

Dec-07

Sep-07

Jun-07

Mar-07

Dec-06

Jun-06

Sep-06

Mar-06

Dec-05

Jun-05

Sep-05

Mar-05

Dec-04

Sep-04

Jun-04

Mar-04

Dec-03

0%

U.S. Government Bonds

Source: Franklin Templeton Investments, Bloomberg, as of 31 December 2014. Indexes represent U.S. Equity (S&P 500 Index), and U.S. Government Bonds (Citigroup 10-Year U.S. Treasury Index). Indexes are unmanaged, and one cannot invest
directly in an index.
Past performance is not an indicator or a guarantee of future performance.?Charts are for illustrative and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

12

2952S

Templeton Global Total Return Fund

Historically Attractive Risk/Return Profile Compared to Other Asset Classes

Templeton Global Total Return Fund - A(Mdis) USD has provided a relatively strong risk/return profile
compared to other asset classes over the long term

10-Year Period
As of 30 September 2014
14

Templeton Global Total Return Fund


- A(Mdis) USDNet of Fees

12
10

Emerging Market Bonds

Return %

High Yield Bonds

Hedge Funds

U.S. Bonds

U.S. Stocks

World Stocks

REITs

U.S. TIPS
Global Bonds

Cash
Commodities

0
-2
0

10

15

20

25

Standard Deviation %

Source: 2013 Morningstar, as of 30 September 2014. Global Bonds are represented by the Barclays Multiverse Index; U.S. Bonds are represented by the Barclays U.S. Aggregate Bond Index; U.S. TIPS are represented by the Barclays U.S. Treasury
TIPS Index; Emerging Market Bonds are represented by the JP Morgan Emerging Markets Bond Index Global; High Yield Bonds are represented by the Credit Suisse High Yield Index; Commodities are represented by the DJ UBS Commodity Index;
REITs are represented by the FTSE NAREIT All REITs Index; World Stocks are represented by the MSCI World Index; U.S. Stocks are represented by the S&P 500 Index; Hedge Funds are represented by the DJ Credit Suisse Tremont Hedge Fund
Index; Cash is represented by the P&R 90-Day U.S. Treasury Index. Indexes are unmanaged, and one cannot invest directly in an index.
All Morgan Stanley Capital International (MSCI) data is provided as is. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any kind in connection with the MSCI data described herein. Copying or redistributing the MSCI
data is strictly prohibited.
STANDARD & POORS, S&P and S&P 500 are registered trademarks of Standard & Poors Financial Services LLC. Standard & Poors does not sponsor, endorse, sell or promote any S&P index-based product. Volatility as measured by
annualised standard deviation.
Past performance is not an indicator or a guarantee of future performance. Charts are for illustrative and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

13

2245M

Templeton Global Total Return Fund

A Different Perspective

An Unconstrained Worldview

Focuses only on potential long-term value without reference to traditional benchmarks


Actively manages three independent potential sources of alpha
A Truly Global Research Platform

One of the largest, most well-established global fixed income teams, drawing on/leveraging
other fixed income teams across the platform

A High-Conviction Process

Alignment among multiple research lensesin-depth country analysis, macroeconomic


modelling and local perspectivecan lead to high-conviction opportunities

Research seeks to identify economic imbalances and isolate only desired risk exposure

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

14

2241M

Templeton Global Total Return Fund

Expanding Opportunity
Opportunity Set
Set

Total Debt Outstanding of Governments and Corporations: US$98.9 trillion*

140

140

120

120

100

100

80

80

US$70.4 tn

60

60

40

40

US$12.7 tn
US$17.6 tn

20

0
'89

'91

'92

Developing

'93

'94

'95

Developed ex-G3

'96

'97
G3

'99

'00

'01

'02

'03

'04

'06

'07

'08

'09

'10

'11

'12

20

Number of Countries Available for Investment

Debt Outstanding (trillions of U.S. dollars)

As of June 2014

0
'14

Number of Countries

*Note: Excludes international organisations and offshore financial centres. Total is equal to US$100.8 trillion, as of March 2014.
Source: Bank for International Settlements, Securities Statistics and Syndicated Loans, June 2014.
Charts are for illustrative and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

15

0540M

Templeton Global Total Return Fund

On-the-Ground Research
One of the Worlds Largest Global Fixed Income and Equity Platforms

Edinburgh

Calgary

Warsaw

Toronto

London

San Mateo
Fort Lauderdale

Moscow
Bucharest

Seoul

Vienna

New York

Istanbul

Dubai

Hong Kong

Shanghai1

Bangkok

Nassau

Mumbai

Mexico City

Ho Chi Minh City

Kuala Lumpur
Singapore
170 Global Fixed Income Professionals:
Global Fixed Income Offices

Fixed Income Local Asset


Management (LAM) Offices2

90 Global Equity Professionals:

Rio de Janeiro

Buenos Aires

So Paulo

Cape Town

Melbourne

Global Equity Offices3

1. Includes individuals that are not employees of Franklin Resources, Inc. (FRI) or wholly owned subsidiaries of FRI. However, these individuals are part of our joint venture or strategic partnership relationships worldwide and are an integral component
of our overall fixed income research efforts.
2. This unit is comprised of investment professionals located in affiliates of and joint venture partners with Franklin Templeton Investments. The Local Asset Management Group is not part of, but does share research with, Franklin Templeton Fixed
Income Group.
3. Includes the Templeton Global Equity Group and the Templeton Emerging Markets Equity Group.
As of 30 September 2014.
For professional investor use only. Not for distribution to retail investors.

16

0539M

Templeton Global Total Return Fund

Insight and Information Sharing


Sharing Around
Around the
the Globe
Globe

170 global fixed income and 90 global equity investment professionals.

WEEKLY

Local Asset Management1


AVERAGE EXPERIENCE: 13 YEARS*

WEEKLY

Global
Bond Group
(SAN MATEO, SINGAPORE)

Franklin Templeton
Fixed Income Group
AVERAGE EXPERIENCE: 16 YEARS*

MONTHLY

17 Investment Professionals

Templeton Emerging
Markets Equity
Research Team
AVERAGE EXPERIENCE: 14 YEARS*

AVERAGE EXPERIENCE: 11 YEARS*


MONTHLY

Templeton Global Equity


Research Team

Corporate Credit
Mortgage

AVERAGE EXPERIENCE: 18 YEARS*

Bank Loans
Municipals
Quantitative

Global
Bond Group

1. This unit is comprised of investment professionals located in affiliates of and joint venture partners with Franklin Templeton Investments. The Local Asset Management Group is not a part of, but does share research with, Franklin Templeton Fixed
Income Group.
Investment professionals include portfolio managers, analysts and traders. *Represents number of years of industry experience.
As of 30 September 2014.
For professional investor use only. Not for distribution to retail investors.

17

1808M

Templeton Global Total Return Fund

A Team of Global Fixed Income Experts

Michael Hasenstab, Ph.D.

Global Bond Group

Executive Vice President, Portfolio Manager, Chief Investment Officer, Global Bonds

(SAN MATEO, SINGAPORE)

1 9 YE A R S *

Sonal Desai, Ph.D.

Christine Zhu

Calvin Ho, Ph.D.

Hyung C. Shin, Ph.D.

Kang Tan, Ph.D.

Senior Vice President, Portfolio Manager

Quantitative Research Analyst,

Senior Global Macro & Research Analyst

Senior Global Macro & Research Analyst

Senior Global Macro & Research Analyst

Director of Research, Global Bonds

Portfolio Manager

20 YEARS*

11 YEARS*

9 YEARS*

22 YEARS*

14 YEARS*

Diego Valderrama, Ph.D.

Vivek Ahuja

Laura Burakreis

Attila Korpos, Ph.D.

Charlie Liu

Senior Global Macro & Research Analyst

Portfolio Manager, Research Analyst

Research Analyst, Portfolio Manager

Research Analyst

Research Associate

12 YEARS*

18 YEARS*

27 YEARS*

13 YEARS*

3 YEARS*

Hye Mi Ahn

Paolo Barbone

Michael Messmer

Matthew Henry

Andrew Mesic

Research Associate

Research Associate

Senior Trader

Trader

Trader

1 YEAR*

1 YEAR*

13 YEARS*

7 YEARS*

8 YEARS*

Elsa Goldberg

Brian Henry, CFA

Susan Wong, CFA

Christopher Kennedy

Richard Herbert

Vice President, Director, Product

Institutional Portfolio Manager

Vice President, Product Manager

Senior Associate Product Manager

Product Manager

18 YEARS*

25 YEARS*

9 YEARS*

14 YEARS*

3 YEARS*

Ryan Ferster, CFA

Dennis Lui

Pawel Chodorowski

Senior Risk Analyst

Senior Risk Analyst

Risk Analyst

9 YEARS*

11 YEARS*

6 YEARS*

Christopher Myers
Assistant Trader
10 YEARS*

AD D I T I O N AL R E S O U R C E S

Management

*Represents number of years of industry experience.

As of 30 September 2014.
CFA and Chartered Financial Analyst are trademarks owned by CFA Institute.
For professional investor use only. Not for distribution to retail investors.

18

1810M

Templeton Global Total Return Fund

Investment
Investment Philosophy
Philosophy

Beliefs and Guiding Principles

An unconstrained approach to global fixed income investing can lead to long-term value
potential

Integrating global macroeconomic analysis with in-depth country research can help identify
long-term economic imbalances

Actively allocating risk across three potential independent sources of alpha can deliver
diversification benefits and the potential for more consistent returns in diverse markets

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

19

2573M

Templeton Global Total Return Fund

Investment
Process
Three Sources
of Potential Alpha Over Time

Multiple Research Lenses Can Lead to High-Conviction


Global Research
Lenses

Three Potential
Sources of Alpha

Portfolio Construction and


Implementation

Yield Curve
Ideas

Risk Modelling
VaR Analysis
Correlation Analysis
Scenario/Stress
Testing

Currency
Ideas

Management Team
Potential Return vs.
Expected Risk
Global Allocations

Macro
Models/Analysis

In-Depth
Country Analysis

Local Asset
Management
Perspective
Credit Ideas

FIPC
Recommendations

Identification
of High-Conviction
Opportunities

PORTFOLIO

Trading
Trade Structuring
Market Flows
Local Execution/
Settlement
Liquidity Analysis

Review/
Performance Attribution
1. This unit is comprised of investment professionals located in affiliates of and joint venture partners with Franklin Templeton Investments. The Local Asset Management Group is not a part of, but does share research with, Franklin Templeton Fixed
Income Group.
2. Fixed Income Policy Committee.
The above chart is for illustration and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

20

0537M

Templeton Global Total Return Fund

Global ResearchMultiple Perspectives/Lenses

COUNTRY ANALYSIS

MACRO MODELLING

LOCAL PERSPECTIVE1

Currency and interest rate valuation


Currency models

Local/regional perspectives

Fundamentals
Monetary and fiscal policy
Macroeconomic disequilibria
Capacity for change and
policy implementation

Country visits
Meetings with policy-makers

Purchasing Power Parity (PPP),


equilibrium exchange rates,
interest rate differentials

Interest rate models


Econometric analysis, Taylor
Rule, yield curve analysis

Trading
Short-term technicals and flows

Ad hoc thematic research

Australia
Brazil
Canada
China2
India
Korea
Malaysia
Mexico
United Arab Emirates

Scenario, shock and theme/trend


analysis

1. This unit is comprised of investment professionals located in affiliates of and joint venture partners with Franklin Templeton Investments. The Local Asset Management Group is not a part of, but does share research with, Franklin Templeton Fixed
Income Group.
2. Includes individuals that are not employees of Franklin Resources, Inc. (FRI) or wholly owned subsidiaries of FRI. However, these individuals are part of our joint venture or strategic partnership relationships worldwide and are an integral component
of our overall fixed income research efforts.
For professional investor use only. Not for distribution to retail investors.

21

2583M

Templeton Global Total Return Fund

Country Research Can


Can Help
Help to Identify Potential Alpha Sources

Goal of Isolating Desired Risks


Hypothetical Examples
YIELD CURVE

MEXICO

CREDIT

SOUTH KOREA

CURRENCY

AUSTRALIA

Hypothetical Situation and Country Analysis

Hypothetical Situation and Country Analysis

Hypothetical Situation and Country Analysis

If economic activity in Mexico slowed down, that


could eventually force the central bank to cut
interest rates and the Mexican peso to depreciate.

We would see a potential opportunity if Korean


sovereign credit appeared to be priced at
distressed levels while our analysis did not reveal
any solvency issues.

If Australia were to tighten their monetary policy,


we could expect the Australian economy to
recover at a faster pace and the currency to
strengthen.

Proposed Course of Action

Proposed Course of Action

Proposed Course of Action

Take advantage of attractive interest rates in


Mexico but without exposure to the Mexican peso.

Take advantage of attractive yield and spread


compression opportunities in Korean sovereign
credits.

Take advantage of the appreciation of the


Australian dollar.

Hypothetical Portfolio Decision

Hypothetical Portfolio Decision

Hypothetical Portfolio Decision

Purchase peso-denominated 20-year Mexican bond


Hedge out peso risk by purchasing forex forward

Purchase Korean sovereign credit

Purchase short-term government bonds


denominated in Australian dollars

These hypothetical examples are for illustrative purposes only to demonstrate our investment process. They are not intended to reflect any past, current or future holdings of the portfolio and should not be considered as
investment advice or an investment recommendation.
For professional investor use only. Not for distribution to retail investors.

22

2953S

Templeton Global Total Return Fund

Portfolio ConstructionGlobal Position Sizing

Conceptually, the portfolio is continually re-evaluated starting from


a clean slate all-cash portfolio

Position sizes are based on fundamental attractiveness, legal


diversification requirements under the UCITS framework, valuation and
potential expected return weighted against risk and volatility. As you can
see in the illustration on this slide:

Max
(10%+)
Up to about 5 positions

StandardMost positions may be 1% to 5% in size to maximise


diversification
CoreHigher-conviction positions may be scaled up to 5% or more
MaxHighest-conviction view may be scaled up to 10% or more.
Position size will rarely exceed 15%. Typically no more than
a handful of positions reach this level

Core (5%+)
Around 5 to 10 positions

Individual position sizes may be adjusted up or down based on


correlations with other positions and/or portfolio level risk objectives

Standard (15%)
Majority of positions

Note: Duration, currency and sovereign credit views are counted separately in position sizing.
The portfolio composition, characteristics and the number of exposures held by the fund will vary due to a variety of factors, such as, but not limited to, market conditions, asset size, interest rates, currency fluctuations, economic instability and
political developments.
For professional investor use only. Not for distribution to retail investors.

23

1854M

Templeton Global Total Return Fund

Risk Management Integral to the Process

Responsibility Begins and Ends with Our Portfolio Managers

Time-tested strategies and experienced managers and teams


Integrated within our investment process
Performance Analysis and Investment Risk (PAIR) Team

40 dedicated fixed income risk specialists


Scenario analyses, risk modelling, stress-testing, position scaling, risk budgeting and performance attribution
Goal is that risks should be recognised, rational and rewarded

Recognised
Risks should be recognised and
understood at the security,
portfolio and operational level

Rational
Risk decisions should be an
intended and rational part of each
portfolios strategy

As of 30 September 2014.
For professional investor use only. Not for distribution to retail investors.

Rewarded
Every risk should be a potential
opportunity for a commensurate
long-term reward

24

2679M

Templeton Global Total Return Fund

Portfolio Positioning
As of 30 September 2014

Potential Alpha Sources

Current Positioning

Favourable Opportunities in Select Currencies

Continued to position for value in currencies across many developed- and emerging-market economies that we
believe have robust growth fundamentals
Focused on countries that have stayed ahead of the curve regarding fiscal, monetary and financial policy
CURRENCIES

Defensive Stance Due to Concerns about Rising Interest Rates

Continued to position defensively with regard to duration while actively seeking opportunities that can potentially offer
positive real yields without taking undue interest-rate risk
Maintained exposures to a select number of countries that we believe have favourable conditions for yields to remain
even or shift lower
YIELD CURVE

Selectively Finding Credit Opportunities

Continued to selectively invest in credit opportunities across emerging markets, with a particular focus on credit
exposures in economies with strong growth indicators
CREDIT
The foregoing information reflects our analysis, opinions and portfolio information as of 30 September 2014. The views expressed are those of the individual portfolio managers only and may vary from the views expressed by portfolio managers
representing other investment platforms or strategies within Franklin Templeton Investments. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic
conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or portfolio. Statements of fact are from
sources considered to be reliable, but no representation or warranty is made as to their completeness or accuracy. Because market and economic conditions are subject to rapid change, opinions provided are valid only as of the date indicated.
References to particular securities are only for the limited purpose of illustrating general market or economic conditions, and are not recommendations to buy or sell a security or an indication of any actual portfolios holdings.
For professional investor use only. Not for distribution to retail investors.

25

2954S

Templeton Global Total Return Fund

Case Study: Ireland

Investing in Ireland when others feared the worst was a contrarian strategy that required us to have a steady hand.

Irish Government Bond Index Yield to Maturity

CONTRARIAN STRATEGY

16

Entry
Opportunity

IRELAND
Third Quarter 2011

14

Country Analysis

In the second half of 2011, markets around the world began to panic in response to
fears of an Armageddon scenario in Europe.

We believed Irish government bonds were being sold indiscriminately and felt Ireland
did not face the crisis level of risk implied by its borrowing costs at the time.

Yield to Maturity (%)

12
10
8
6

Proposed Course of Action

Based on our fundamental research approach and contrarian views, look to take
advantage of indiscriminate selling of Irish government bonds.

4
2
0
Dec-09

Portfolio Decision
Position in Irish Government Debt

Apr-10

Aug-10

Dec-10

Apr-11

Aug-11

Dec-11

Apr-12

Aug-12

Dec-12

Irish Government Bond Index YTM

Note: this chart shows the yield to maturity of the J.P. Morgan Government Bond Index (GBI) Broad Ireland sub-index starting 31 December 2009. Templeton Global Total Return - A(Mdis) Fund entered the initial position of Irish government bonds
during July 2011. As of 30 September 2014, Templeton Global Total Return Fund had 5.89% of its total net assets invested in Irish sovereign debt. Holdings are subject to change. This information is for general information only as it is based
solely on Templeton Global Total Return Fund. The information is historical and may vary depending on a variety of factors such as portfolio size, market conditions and currency fluctuations just to name a few.
Source: J.P. Morgan Chase & Co., as of 10 January 2013. Franklin Templeton Investments, as of 30 September 2014.
Indexes are unmanaged, and one cannot invest directly in an index.
The chart above is intended solely to show the yield to maturity of the J.P. Morgan Government Bond Index (GBI) Broad Ireland sub-index and general market conditions and does not represent the performance of any holdings of
Templeton Global Total Return Fund.
Templeton Global Total Return Fund is a sub-fund of the Luxembourg-domiciled SICAV, Franklin Templeton Investment Funds.
Past performance is not an indicator or a guarantee of future performance. Charts are for illustrative and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

26

Templeton Global Total Return Fund

Executive Summary

Templeton Global Total Return Fund - I(acc) EUR


As of 30 November 2014
Portfolio Manager(s)
Morningstar Category

Global Bond

Michael Hasenstab, PhD

United States

Investment Manager

Franklin Advisers, Inc.

Sonal Desai, PhD

United States

Fund Inception Date

29 August 2003

Share Class Inception Date

1 September 2006

Fund Identifiers

Primary Benchmark

Barclays Multiverse Index

ISIN Code

LU0260871040

Base Currency for Fund

USD

SEDOL Code

B19VR87

Base Currency for Share Class

EUR

Bloomberg Code

TGTIAEU LX

Total Net Assets (USD)

35,523,038,650.93

Asset Allocation

Fixed Income: 87.57%


Cash & Cash Equivalents: 12.41%
Equity: 0.02%

Number of Holdings

556

Total Expense Ratio

0.86%

Average Duration

1.22 Yrs

Average Weighted Maturity

3.31 Yrs

Fund Ratings (30 November 2014)


Overall Morningstar Rating

Summary of Investment Objective


The Fund aims to maximise total investment return consisting of a combination of
interest income, capital appreciation, and currency gains by investing principally in a
portfolio of fixed and/or floating rate debt securities and debt obligations issued by
government and government-related issuers or corporate entities worldwide. The fixed
and/or floating-rate debt securities and debt obligations in which the Fund may invest
include investment grade and non-investment grade securities. On an ancillary basis,
the Fund may gain exposure to debt market indexes by investing in index-based
financial derivatives and credit default swaps.

Morningstar, Inc. 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.
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Percentage may not equal 100% due to rounding.
Past performance does not guarantee future results.
For professional investor use only. Not for distribution to retail investors.

27

Templeton Global Total Return Fund

Portfolio Characteristics

Templeton Global Total Return Fund


vs. Barclays Multiverse Index
As of 30 November 2014
Portfolio

Index

1.22 Yrs

6.32 Yrs

Yield to Maturity

4.99%

1.93%

Yield to W orst

4.94%

1.91%

Current Yield

5.51%

3.11%

Average Duration

Portfolio Quality Allocation


20%

17.27
12.85

14.63

12.70

10.90

8.16

10%
4.50
0%

0.84

0.26
AAA AA-

A+

2.81

A- BBB+ BBB BBB- BB+

2.97 3.77

1.86 1.40
BB

BB-

B+

1.38

2.77

0.76 0.02 0.01 0.13

B- CCC+ CCC CCC-

N/A

Investment
Grade

Non-Investment
Grade

64.08%

35.92%

NR

Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Yield figures quoted should not be used as an indication of the income that has or will be received. Yield figures are based on the portfolio's underlying holdings and do not represent a payout of the portfolio.
Ratings shown are assigned by one or more Nationally Recognized Statistical Rating Organizations ('NRSRO'), such as Standard & Poor's, Moody's and Fitch. The ratings are an indication of an issuer's creditworthiness and typically range from AAA or
Aaa (highest) to D (lowest). When ratings from all three agencies are available, the middle rating is used; when two are available, the lowest rating is used; and when only one is available, that rating is used. Foreign government bonds without a specific
rating are assigned the country rating provided by an NRSRO, if available. If listed, the NR category consists of rateable securities that have not been rated by an NRSRO; the N/A category consists of nonrateable securities (e.g., equities). Cash and
equivalents (defined as bonds with stated maturities, or that can be redeemed at intervals, of seven days or less) as well as derivatives are excluded from this breakdown. As a result, the chart does not reflect the fund's total net assets.
Weightings as percent of total. Percentage may not equal 100% due to rounding.
For professional investor use only. Not for distribution to retail investors.

28

Templeton Global Total Return Fund

Geographic Allocation

Templeton Global Total Return Fund


As of 30 November 2014
Geographic Allocation

Active Allocations vs. Barclays Multiverse Index

EUROPE/AFRICA
NON-EMU EUROPE/AFRICA
Hungary
Poland
Republic of Serbia
Ukraine
Ghana
Sweden
Russia
United Kingdom
Kenya
South Africa
United Arab Emirates
Croatia
Switzerland
Denmark
Norway
EMU
Ireland
Portugal
Slovenia
Luxembourg
Netherlands
Italy
Germany
France
Spain
Austria
Belgium
Euro Community
AMERICAS
NON-USA AMER.
Mexico
Uruguay
Brazil
Canada
Ecuador
Bermuda
Peru
Chile
USA
United States
ASIA
ASIA, NON-JAPAN
South Korea
Malaysia
India
Philippines
Sri Lanka
Indonesia
Singapore
Australia
Kazakhstan
JAPAN
SUPRANATIONAL
OTHER
ST CASH AND CASH EQUIVALENTS

-1%

2.50
0.75
0.27
0.27
0.17
0.16
0.10
0.10
0.00
0.00
-0.08

1.24
1.23
1.18
0.91
0.45
0.14
0.09
0.08
0.13

9.91

5.69

3.75
1.76
0.66
0.12
0.04
0.03

25.12

7.32

4.35
3.70
2.63
2.41
2.25
1.18
0.45
0.25
0.25
0.14
0.13
0.07
0.00
0.00

6.55
6.55
11.33

5.37

7%

30.39

23.84

9.65
7.79

4.55

35.03

22.04
21.96

7.85

15%

23%

31%

39%

EUROPE/AFRICA
NON-EMU EUROPE/AFRICA
Hungary
Poland
Republic of Serbia
Ukraine
Ghana
Sweden
Russia
United Kingdom
Kenya
South Africa
United Arab Emirates
Croatia
Switzerland
Denmark
Norway
EMU
Ireland
Portugal
Slovenia
Luxembourg
Netherlands
Italy
Germany
France
Spain
Austria
Belgium
Euro Community
AMERICAS
NON-USA AMER.
Mexico
Uruguay
Brazil
Canada
Ecuador
Bermuda
Peru
Chile
USA
United States
ASIA
ASIA, NON-JAPAN
South Korea
Malaysia
India
Philippines
Sri Lanka
Indonesia
Singapore
Australia
Kazakhstan
JAPAN
SUPRANATIONAL
OTHER
ST CASH AND CASH EQUIVALENTS

-31%

-0.78

13.64

7.17
3.98
3.69
2.60
2.41
1.32
0.76
-5.82
0.24
-0.03
-0.02
0.09
-0.81
-0.41
-0.40
-14.41
5.30
2.17
0.68
0.12
-1.67
-4.22
-5.46
-6.01
-2.75
-0.81
-1.10
-0.08
-12.03
8.88
7.77

2.81
-1.62
0.65
0.11
-0.05
-0.07
-30.10
-30.10
2.48
1.13
1.02
1.17
0.61
0.25
-1.45
0.05
-14.52
-2.08

-21%

-11%

-1%

10.04

5.15

4.55

18.07

17.00

7.85

9%

Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Percentage may not equal 100% due to
rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
For professional investor use only. Not for distribution to retail investors.

19%

29

Templeton Global Total Return Fund

Currency Allocation

Templeton Global Total Return Fund


As of 30 November 2014
Currency Allocation

Active Allocations vs. Barclays Multiverse Index

AMERICAS
US DOLLAR
NON-USA AMER.
Mexican Peso
Uruguayan Peso
Brazilian Real
Canadian Dollar
Chilean Peso
Peru Nuevo Sol
Colombian Peso
ASIA
ASIA, NON-JAPAN
South Korean Won
Malaysian Ringgit
Singapore Dollar
Indian Rupee
Philippine Peso
Sri Lanka Rupee
Indonesian Rupiah
Australian Dollar
Hong Kong Dollar
New Zealand Dollar
Thailand Baht
JAPANESE YEN
EUROPE/AFRICA
PERIPHERY EUROPE/E. EUROPE
Polish Zloty
Hungarian Forint
Swedish Krona
Serbian Dinar
Ukraine Hryvna
Swiss Franc
Czech Koruna
Danish Krone
Israeli Shekel
Norwegian Krone
Romania Leu
Russian Ruble
Turkish Lira
British Pound
AFRICA
Ghanaian Cedi
Nigerian Naira
South Africa Rand
EURO
-32%

12.07
8.13
4.18
1.23
1.13
0.04
0.00
19.17

5.35
3.31
2.58
1.18
0.91
0.00
0.00
0.00
0.00
-22.40
-10.43

-7%

41.57

14.69
13.55

7.75
5.35
3.29
2.33
0.07
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.01
1.99
1.99
0.00
0.00
-31.20
18%

91.26

64.48

26.78

18.78

43%

68%

93%

AMERICAS
US DOLLAR
NON-USA AMER.
Mexican Peso
Uruguayan Peso
Brazilian Real
Canadian Dollar
Chilean Peso
Peru Nuevo Sol
Colombian Peso
ASIA
ASIA, NON-JAPAN
South Korean Won
Malaysian Ringgit
Singapore Dollar
Indian Rupee
Philippine Peso
Sri Lanka Rupee
Indonesian Rupiah
Australian Dollar
Hong Kong Dollar
New Zealand Dollar
Thailand Baht
JAPANESE YEN
EUROPE/AFRICA
PERIPHERY EUROPE/E. EUROPE
Polish Zloty
Hungarian Forint
Swedish Krona
Serbian Dinar
Ukraine Hryvna
Swiss Franc
Czech Koruna
Danish Krone
Israeli Shekel
Norwegian Krone
Romania Leu
Russian Ruble
Turkish Lira
British Pound
AFRICA
Ghanaian Cedi
Nigerian Naira
South Africa Rand
EURO
-58%

11.68
8.13
3.67
-1.40
1.12
0.00
-0.14
1.40

20.73
23.07

13.59
13.37

43.80

38.16

5.19
3.31
2.45
1.18
0.73
-1.28
-0.02
-0.13
-0.24
-36.76
-45.19
10.28
7.53
5.27
2.80
2.33
0.07
-0.74
-0.10
-0.29
-0.13
-0.13
-0.05
-0.09
-0.19
-6.02
1.71
1.99
-0.05
-0.23
-57.18
-37%

-16%

Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
For professional investor use only. Not for distribution to retail investors.

5%

26%

47%

30

Templeton Global Total Return Fund

Sector Allocation

Templeton Global Total Return Fund


As of 30 November 2014
Sector Allocation

Active Allocations vs. Barclays Multiverse Index

Intl Govt/Agency Bonds

65.84

Investment Grade
Non-Investment Grade

Intl Govt/Agency Bonds

Corporate Bonds

11.69

Corporate Bonds

10.98

Non-Investment Grade

Sovereign Bonds
Investment Grade

10.41
-8.81
6.83

Investment Grade

0.71

-15.63

Sovereign Bonds

10.87

Non-Investment Grade

11.64

Non-Investment Grade

10.88

Non-Investment Grade
Investment Grade

22.05

Investment Grade

54.96

6.74

Non-Investment Grade

10.05

9.60

Investment Grade

0.82

-2.86

Convertibles

0.03

Convertibles

0.03

Municipal

0.00

Municipal

-0.28

Securitised

0.00

Securitised

-14.59

CMBS / ABS

0.00

CMBS / ABS

MBS

0.00

MBS

-10.84

N/A

0.00

N/A

-3.04

US Treasuries/Agencies

0.00

US Treasuries/Agencies

Derivatives

-1.00

Derivatives

-1.00

Supranational

0.13

Supranational

-2.08

Others

0.04

Others

0.03

Equity

0.02

Equity

0.02

Others

0.02

Others

0.01

Cash & Cash Equivalents


-2%

-14.51

Cash & Cash Equivalents

12.41
12%

-0.70

26%

40%

54%

68%

-16%

12.41
-8%

0%

Weightings as percent of total. Percentage may not equal 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
For professional investor use only. Not for distribution to retail investors.

7%

15%

23%

31

Templeton Global Total Return Fund

Historical Performance

Templeton Global Total Return Fund - I(acc) EUR


As of 30 November 2014
Cumulative Performance (%)

Templeton Global Total Return Fund - I(acc) EURNet of Fees

Inception
Date

3 Mths

YTD

1 Yr

3 Yrs

5 Yrs

7 Yrs

Since
Incept

1.9.2006

5.08

13.40

13.23

39.97

82.68

129.92

137.93

2.30

11.97

10.05

12.86

34.74

52.82

49.03

Inception
Date

1 Yr

3 Yrs

5 Yrs

7 Yrs

Since
Incept

1.9.2006

13.23

11.86

12.81

12.63

11.08

10.05

4.11

6.15

6.25

4.96

Barclays Multiverse Index

Annualised Total Returns (%)

Templeton Global Total Return Fund - I(acc) EURNet of Fees


Barclays Multiverse Index

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.
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 does not guarantee future results. 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 franklintempleton.lu for current
performance.
Performance data may represent blended share class performance, e.g., hybrid created from an A(dis) share class which was converted to A(acc).
The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details.
For professional investor use only. Not for distribution to retail investors.

32

Templeton Global Total Return Fund

Calendar Year Returns

Templeton Global Total Return Fund - I(acc) EUR


As of 30 November 2014
31.07

32%

24.16
22%
18.11
13.40
12%

13.20

11.97

3.23
2%

-8%

9.13

9.08

-0.10

YTD 2014

4.67
2.79

2.01
0.20

-6.42

2013

Templeton Global Total Return Fund - I(acc) EURNet of Fees

2012

2011

2010

2009

2008

-1.49

2007

Barclays Multiverse Index

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.
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 does not guarantee future results. 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 franklintempleton.lu for current
performance.
Performance data may represent blended share class performance, e.g., hybrid created from an A(dis) share class which was converted to A(acc).
For professional investor use only. Not for distribution to retail investors.

33

1828M

Templeton Global Total Return Fund

Summary
Summary of
of Advantages
Advantages

The Foundation of Our Long-Term Track Record

An Unconstrained Worldview
A Truly Global Research Platform
A High-Conviction Process

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

34

Templeton Global Total Return Fund

Glossary

Average Duration: Also known as 'effective' or 'Macaulay' duration it is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in
interest rates. Duration is expressed as a number of years. It's an indication of an issue's coupon relative to its maturity. Rising interest rates mean falling bond prices; declining interest
rates mean rising bond prices. The bigger the duration number, the greater the interest-rate risk; (or reward for bond prices). The weighted average duration of a fund reflects the
effective duration of the underlying issues, based on the size of each holding. This value differs with 'Modified Duration' which is modified for the market (dirty) price of an issue.
Current Yield: In general, yield is the annual rate of return for any investment and is expressed as a percentage. With bonds, yield is the effective rate of interest paid on a bond,
calculated by the coupon rate divided by the bond's market price. Bonds are typically issued with fixed coupon payments (regular cash payments of a fixed amount). Bonds are typically
valued in terms of the their yield - what dollar amount as coupon payments is received as compared to the bond's current market price. For a bond fund the current yield may be the
disclosed yield paid out to investors.
Yield to Maturity: Yield to Maturity ('YTM') also known as the 'Gross Redemption Yield' or 'Redemption Yield'. The rate of return anticipated on a bond if it is held until the maturity date.
YTM is considered a long-term bond yield expressed as an annual rate. The calculation of YTM takes into account the current market price, par value, coupon interest rate and time to
maturity. It is also assumed that all coupons are reinvested at the same rate.
Yield to Worst: The yield to maturity if the worst possible bond repayment takes place. If market yields are higher than the coupon, the yield to worst would assume no prepayment. If
market yields are below the coupon, the yield to worst would assume prepayment. In other words, yield to worst assumes that market yields are unchanged. Normally this value is not
aggregated since it varies but if a weighted average value is used for a Fund then the figure will reflect the values of the underlying issues, based on the size of each holding.

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

35

Templeton Global Total Return Fund

Important Disclosures

This document is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares of the Luxembourg-domiciled SICAV Franklin
Templeton Investment Funds (the Fund). Nothing in this document should be construed as investment advice. Given the rapidly changing market environment, Franklin Templeton Investments disclaims
responsibility for updating this material.
Opinions expressed are the authors at publication date and they are subject to change without prior notice.
Subscriptions to shares of the Fund can only be made on the basis of the current prospectus and, where available, the relevant Key Investor Information Document, accompanied by the latest available
audited annual report and the latest semi-annual report if published thereafter.
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 nor a guarantee
of future performance. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, your performance may also be affected by
currency fluctuations.
An investment in the Fund entails risks which are described in the Funds prospectus and, where available, in the relevant Key Investor Information Document.
In emerging markets, the risks can be greater than in developed markets. Investments in derivative instruments entail specific risks that may increase the risk profile of the fund and are more fully described
in the Funds prospectus and, where available, in the relevant Key Investor Information Document.
No shares of the Fund may be directly or indirectly offered or sold to nationals or 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.
Any research and analysis contained in this document has been procured by Franklin Templeton Investments for its own purposes and is provided to you only incidentally.
References to particular industries, sectors or companies are for general information and are not necessarily indicative of a funds holding at any one time.
Please consult your financial advisor before deciding to invest. A copy of the latest prospectus, the relevant Key Investor Information Document, the annual report and semi-annual report, if published
thereafter can be found on our website www.franklintempleton.lu or can be obtained, free of charge, from Franklin Templeton International Services, S. r.l. - Supervised by the Commission de Surveillance
du Secteur Financier 8A, rue Albert Borschette, L-1246 Luxembourg - Tel: +352-46 66 67-1 - Fax: +352-46 66 76.

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

36

Templeton Global Total Return Fund

Important Disclosures (continued)

Issued by Franklin Templeton International Services, S. r.l.


2014 Franklin Templeton Investments. All rights reserved.
Indexes are unmanaged and one cannot invest directly in an index.
CFA and Chartered Financial Analyst are trademarks owned by CFA Institute.
Additional Information for Investment Platform Overview Slide:
Franklin Equity Group, a unit of Franklin, combines the expertise of the Franklin Advisers, Inc., and Fiduciary Global Advisors equity teams (with origin dating back to 1947 and 1931, respectively). Franklin
Templeton Fixed Income Group, a unit of Franklin, combines the expertise of the Franklin Advisers, Inc., and Fiduciary Trust Company International fixed income teams (originating in 1970 and 1973,
respectively). Franklin Real Asset Advisors originated in 1984 as the global real estate team of Fiduciary Trust Company International. Franklin Templeton Solutions (formerly Franklin Templeton Multi-Asset
Strategies prior to 31 December 2013) is a global investment management group dedicated to multi-strategy solutions and is comprised of individuals representing various registered investment advisory
entity subsidiaries of Franklin Resources, Inc., a global investment organisation operating as Franklin Templeton Investments (FTI). Certain individuals advise Franklin Templeton Solutions (FT Solutions)
mandates through K2 Advisors L.L.C. (K2), an FTI adviser that forms part of an investment group founded in 1994 through existing advisory entities or their predecessors. FT Solutions originated in 2007 to
combine the research and oversight of the multi-strategy investment solutions offered by FTI. Franklin Templeton Investments acquired a majority interest in K2 Advisors Holdings, LLC on 1 November
2012. As at 30 June 2014, Mutual Series, Franklin Templeton Local Asset Management and Franklin Templeton Real Asset Advisors were renamed Franklin Mutual Series, Franklin Local Asset
Management and Franklin Real Asset Advisors, respectively.

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

37

Templeton Global Total Return Fund

Appendix

38

Templeton Global Total Return Fund

Management Profiles

39

1834M

Templeton Global Total Return Fund

Global Bond Group Management Profiles


MICHAEL HASENSTAB, Ph.D.
Executive Vice President, Portfolio
Manager, Chief Investment Officer,
Global Bonds
Franklin Templeton Fixed Income Group

Dr. Hasenstab is a member of the Fixed Income Policy Committee and is a portfolio manager for a number of Franklin
Templeton fixed income and hybrid funds and strategies.
Dr. Hasenstab holds a Ph.D. in economics from the Asia Pacific School of Economics and Management at Australian National
University, a masters degree in economics of development from the Australian National University and a B.A. in international
relations/political economy from Carleton College in the United States.

Franklin Advisers, Inc.


San Mateo, California, United States

SONAL DESAI, Ph.D.


Senior Vice President, Portfolio Manager
Director of Research, Global Bonds
Franklin Templeton Fixed Income Group
Franklin Advisers, Inc.
San Mateo, California, United States

CHRISTINE ZHU
Quantitative Research Analyst,
Portfolio Manager
Franklin Templeton Fixed Income Group
Franklin Advisers, Inc.
San Mateo, California, United States

CALVIN HO, Ph.D.


Senior Global Macro & Research Analyst
Global Bonds
Franklin Templeton Fixed Income Group
Franklin Advisers, Inc.
San Mateo, California, United States

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

Dr. Desai is responsible for shaping the research agenda of the global bond group, and providing macroeconomic analysis to the
fixed income team. Dr. Desai acts as a key resource for the firms Fixed Income Policy Committee, which provides policy views
on sectors, markets and currencies.
Dr. Desai holds a Ph.D. in economics from Northwestern University and earned a B.A. with honours from Delhi University in
New Delhi.

Ms. Zhu is a quantitative research analyst and portfolio manager in the global bond group of the Franklin Templeton Fixed
Income Group. She focuses on portfolio construction, derivatives/quantitative strategies in global market, performance attribution
and risk management. Ms. Zhu joined Franklin Templeton in 2007.
Ms. Zhu received an M.B.A. with investment focus from the University of California, Berkeley, and earned her M.S. in computer
science and engineering from the University of Notre Dame. She is fluent in Mandarin.

Dr. Ho joined Franklin Templeton Investments in 2005. Currently, he is a senior global macro & research analyst for the Franklin
Templeton Investments global bond group. In this position, he specialises in global macroeconomic analysis and global
exchange rate modelling.
Dr. Ho earned both B.A. and Ph.D. in economics from the University of California, Berkeley. His prior research analysed
international monetary arrangements. He is also fluent in Mandarin and Cantonese.

40

1834M

Templeton Global Total Return Fund

Global Bond Group Management Profiles (continued)


HYUNG C. SHIN, Ph.D.
Senior Global Macro & Research Analyst
Franklin Templeton Fixed Income Group
Franklin Advisers, Inc.
San Mateo, California, United States

KANG TAN, Ph.D.

Dr. Shin joined Franklin Templeton in 2005 as a research analyst and moved to senior global macro & research analyst for
Franklin Templeton Investments global bond group. In this position, he analyses global macroeconomic trends and up-to-date
developments in emerging market economies. Dr. Shin is an expert of Asian economies, with a focus on Southeast Asia. He
also specialises in monetary and global macroeconomic analysis with a focus on world real-interest-rate modelling.
Dr. Shin holds a Ph.D. in economics from the University of California, Davis and a B.A. in business administration from Seoul
National University in South Korea. Dr. Shins prior research analysed optimal choice of monetary policy regimes. He is also
fluent in Korean.

Senior Global Macro & Research Analyst


Franklin Templeton Fixed Income Group

Dr. Tan is a senior global macro & research analyst in the global bond group. In this position, he specialises in global
macroeconomic modelling. In addition, he has a regional research focus on Asia and Scandinavia. He joined Franklin Templeton
Investments in January 2008 as a research analyst.

Franklin Advisers, Inc.


Singapore

Dr. Tan holds a Ph.D. in economics from the Australian National University and a B.Sc. (First Class Honors) in economics from
the London School of Economics. He is also fluent in Mandarin and Cantonese.

DIEGO VALDERRAMA, Ph.D.


Senior Global Macro & Research Analyst
Franklin Templeton Fixed Income Group

Dr. Valderrama joined Franklin Templeton Investments in 2009 as research analyst and moved to senior global macro
& research analyst in the global bond group. In this position, Dr. Valderrama specialises in global macroeconomics. In addition,
he has a regional focus on the United States, Canada, Latin America, Australia, New Zealand and the United Kingdom.

Franklin Advisers, Inc.


San Mateo, California, United States

Dr. Valderrama holds a Ph.D. and an M.A. in economics from Duke University and a B.A. in economics from Cornell University.
He is also fluent in Spanish.

VIVEK AHUJA

Mr. Ahuja joined Franklin Templeton Investments in 2006 and has over 17 years of investment and research experience in fixed
income markets. Prior to joining Franklin Templeton, Mr. Ahuja has worked in various financial institutions in India in the areas of
fixed income investments and macro research.

Portfolio Manager, Research Analyst


Franklin Templeton Fixed Income Group
Templeton Asset Management Ltd.
Singapore, Singapore

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

Mr. Ahuja earned his bachelor of commerce and masters degree in finance from Mumbai University.

41

1834M

Templeton Global Total Return Fund

Global Bond Group Management Profiles (continued)


LAURA BURAKREIS
Research Analyst, Portfolio Manager
Franklin Templeton Fixed Income Group
Franklin Advisers, Inc.
San Mateo, California, United States

ATTILA KORPOS, Ph.D.


Research Analyst
Franklin Templeton Fixed Income Group
Franklin Advisers, Inc.
San Mateo, California, United States

MICHAEL MESSMER
Senior Trader
Global Bonds
Franklin Templeton Fixed Income Group

Prior to joining Franklin Templeton, Ms. Burakreis worked in various parts of the World Bank in Washington, D.C. At the World
Bank, she assisted governments in the Middle East and North Africa design and implement financial sector reforms. Ms.
Burakreis also negotiated the terms of debt issued by the International Bank of Reconstruction and Development in emerging
and developed markets.
Ms. Burakreis holds a M.B.A. in finance from the University of Chicago, Graduate School of Business (1987) and an M.A. from
the University of Chicago, Center for Middle Eastern Studies (1990). She earned her B.A. in economics from The College at the
University of Chicago (1984).
Dr. Korpos joined Franklin Templeton Investments in 2011 as a research analyst in the global bond group. He is an international
fixed income research analyst with a regional focus on Central and Eastern European countries.
Dr. Korpos received a Ph.D. in economics from Tilburg University in the Netherlands, where he investigated monetary regimes in
open economies. He holds a B.A. in finance and banking from Babes-Bolyai University in Romania, and an M.A. in economics
from the Central European University in Hungary.

Mr. Messmer is the lead trader for Franklin Templeton Investments global bond group. Mr. Messmer is responsible for trading
investment grade and sub-investment grade global government treasuries, currencies and sovereign bonds. Mr. Messmer also
provides relative value, yield curve and technical analysis. He joined Franklin Templeton in 2001 and participated in the Futures
Associates Program.

Franklin Advisers, Inc.


San Mateo, California, United States

Mr. Messmer earned his B.S. in economics with an emphasis in finance from Southern Methodist University.

MATTHEW HENRY

Mr. Henry is a trader for the Franklin Templeton global bond group. Mr. Henry trades investment grade and sub-investment
grade global bonds and currencies. Mr. Henry joined Franklin Templeton in 2006 and participated in the Futures Associate
Program.

Trader
Global Bonds
Franklin Templeton Fixed Income Group

Mr. Henry holds B.S. in management science and engineering from Stanford University.

Franklin Advisers, Inc.


San Mateo, California, United States

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

42

1834M

Templeton Global Total Return Fund

Global Bond Group Management Profiles (continued)


ANDREW MESIC
Trader
Global Bonds
Franklin Templeton Fixed Income Group

Mr. Mesic is a trader for the Franklin Templeton global bond group, supporting foreign exchange and investment grade global
bond traders. Mr. Mesic joined Franklin Templeton in 2007 and participated in the Futures Associate Program.
Mr. Mesic holds a B.A. in economics and international relations from the University of California, San Diego.

Franklin Advisers, Inc.


San Mateo, California, United States

The Global Bond Group also includes 3 experienced research associates and 1 assistant trader.

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

43

Templeton Global Total Return Fund

Module: Additional Resources

44

1782M

Templeton Global Total Return Fund

Global Aggregate/EMD Team (New York, London)

Insight and Information Sharing

Name

Title

Years
Experience

John Beck

Director of Fixed Income, London

27

David Zahn, CFA, FRM

Portfolio Manager

20

Michael Materasso

Portfolio Manager

42

Warren Keyser

Portfolio Manager

29

Vi-Minh Tran, CFA

Portfolio Manager, Research Analyst

19

William Ledward, Ph.D.

Portfolio Manager, Emerging Market Debt

29

Nicholas Hardingham, CFA

Portfolio Manager, Research Analyst,


Emerging Market Debt

14

Fatma Charlwood

Research Analyst, Emerging Market Debt

11

Philip Spires

Senior Trader

19

Roderick MacPhee, CFA

Portfolio Manager, Research Analyst

CFA and Chartered Financial Analyst are trademarks owned by CFA Institute.
As of 30 September 2014.
For professional investor use only. Not for distribution to retail investors.

45

1785M

Templeton Global Total Return Fund

A Specialised Local Asset Management (LAM) Team

On the Ground Worldwide


Years
Experience

Name

Title

Years
Experience

International CIO/Portfolio Manager,


Local Asset Management

31

David Diao1,2

Portfolio Manager, China

20

Tracy Liu, CFA1,2

Portfolio Manager, China

11

Denis Ferrari1

Portfolio Manager, Brazil

18

Marco Freire1

Hanifah Hashim1

Portfolio Manager, Malaysia

20

Portfolio Manager, Brazil

10

Guilherme Mendonca Paris, CFA

Portfolio Manager, Brazil

Ivy Choo1

Research Analyst, Malaysia

Carlos Thadeu Gomes Filho1

Andrew Canobi, CFA

Portfolio Manager, Australia

Research Analyst, Brazil

16

20

Vagner Alves1

Research Analyst, Brazil

Chris Siniakov

Portfolio Manager, Australia

20

Leandro Teixeira

Trader, Brazil

Adrienne Young, CFA

Research Analyst, Australia

19

Mohieddine Kronfol1,2

Portfolio Manager, Middle East/North Africa

18

Joshua Rout

Research Analyst/Trader, Australia

Sharif Eid

Portfolio Manager, Middle East/North Africa

Timothy Heyman, CBE

CIO LAM Mexico, Mexico

36

Franck Nowak

Research Analyst, Middle East/North Africa

Ramse Gutierrez, CFA

Head of Investment Operations, Mexico

12

Santosh Kamath1

Portfolio Manager, India

21

Luis Gonzali Saucedo, CFA

Portfolio Manager, Mexico

Sachin Desai1

Portfolio Manager, India

14

Jorge Marmolejo Hernandez, CFA

Portfolio Manager, Mexico

Umesh Sharma, CFA1

Portfolio Manager, India

14

Nadia Montes de Oca Vargas

Investment Analyst, Mexico

Pallab Roy1

Research Analyst, India

13

Maria Vigil Martinez

Investment Analyst, Mexico

Sumit Gupta

Research Analyst, India

10

Thomas OGorman, CFA

Portfolio Manager, Canada

24

Dong-il Kim, CFA1

Portfolio Manager, Korea

27

Darcy Briggs, CFA

Portfolio Manager, Canada

20

Jeong Suk Kim1

Name

Title

Stephen Dover, CFA1

Portfolio Manager, Korea

20

Heather McOuatt, CFA

Portfolio Manager, Canada

19

Min Geun Joo,

CFA1

Research Analyst, Korea

Jeffrey Johnson, CFA

Portfolio Manager, Canada

18

Ki Ram Moon,

CFA1

Research Analyst, Korea

Brian Calder

Trader, Canada

15

Research Analyst, Korea

Sevrika Fisher

Trader, Canada

Kangho Kim

Local Asset Management is comprised of investment professionals located in affiliates of and joint venture partners with Franklin Templeton Investments. The Local Asset Management Group is not a part of, but does share research with, Franklin
Templeton Fixed Income Group.
1. Local Asset Management professional.
2. Individual is not an employee of Franklin Resources, Inc. (FRI). However, this individual is part of our joint venture acquisitions worldwide and is an integral component of our overall fixed income research efforts.
CFA and Chartered Financial Analyst are trademarks owned by CFA Institute.
As of 30 September 2014.
For professional investor use only. Not for distribution to retail investors.

46

0312M

Templeton Global Total Return Fund

Fixed Income Policy Committee (FIPC)


Years of Investment
Experience

Years
with Firm

Chief Investment Officer,


Co-Chair of FIPC

27

26

B.A., Stanford University; M.B.A.,


University of Chicago

Michael J. Materasso

Co-Chair of FIPC, U.S. Multisector

42

26

B.B.A., Baruch College

Sheila Amoroso

Municipals

28

28

M.B.A., College of Notre Dame

Roger Bayston, CFA

Mortgages & U.S. Multisector

28

23

B.S., University of Virginia;


M.B.A., University of California, Los Angeles

John W. Beck

Global & European

27

24

M.A., Oxford University

Sonal Desai, Ph.D.

Global & Asian

20

Ph.D., Northwestern University

Michael Hasenstab, Ph.D.

Global & Asian

19

15

Ph.D., Asia-Pacific School of Economics and Management


at Australian National University

Richard Hsu, CFA

Bank Loans

18

18

M.A., Stanford University

Warren A. Keyser

U.S. Multisector & U.S. Low Duration

29

28

B.S., Philadelphia University

Marc Kremer, CFA

IG Credit

26

11

A.B., Vassar College; M.B.A., Duke University

William F. Ledward

Emerging Markets

29

17

M.A., D.Phil., Oxford University

Shawn Lyons, CFA

Money Markets & IG Credit

18

18

B.A., University of California, Berkeley

Ronald J. Sanchez, CFA

Municipals

27

21

B.S., C.W. Post College

Eric Takaha, CFA

High Yield & IG Credit

23

23

B.S., University of California, Berkeley;


M.B.A., Stanford University

David Yuen, CFA, FRM

Quantitative

26

18

B.S., California Institute of Technology;


M.B.A., University of California, Los Angeles

David Zahn, CFA, FRM

Global & European

20

B.S., University of Maine; M.B.A., University of Connecticut

26

19

Name

Responsibility

Christopher Molumphy, CFA

Average Years

Education

FIPC Contains Both Strategy Leaders and Sector Specialists


CFA and Chartered Financial Analyst are trademarks owned by CFA Institute.
As of 30 September 2014.
For professional investor use only. Not for distribution to retail investors.

47

Templeton Global Total Return Fund

Module: Performance Attribution

48

Templeton Global Total Return Fund

Three Sources of Potential Alpha Over Time

Diverse Return Sources in Diverse Markets


Performance Attribution Summary (Calendar Year)
Templeton Global Total Return Fund - A(Mdis) vs. Cash (20092013)
2009

2010

2011

2012

2013

Interest Rates (Duration)

Currencies2

Credit

Greatest Contribution to Performance


Second Greatest Contribution to Performance
Least Contribution to Performance

Ranked by Contribution to Alpha

The information is historical and may not reflect current or future portfolio characteristics.
1. Performance attribution may change depending on factors such as market and economic conditions.
2. Currencies can be overstated because they can be used to hedge out certain market risks, such as interest rate risk, due to the negative correlation between the exchange rate and the factor that the team is attempting to hedge.
A particular factor might also affect positions that are attributed to one or both of the other categories. Therefore, decomposing the attribution into these three categories, without regard to hedging, could lead currencies to be overstated.
Past performance is not an indicator or a guarantee of future performance. Charts are for illustrative and discussion purposes only.
For professional investor use only. Not for distribution to retail investors.

49

Templeton Global Total Return Fund

Module: Process Implementation Examples

50

2956M

Templeton Global Total Return Fund

Navigating Global Divergence

Potential Alpha Sources Can Vary from Country to Country with the Economic Cycle
Strong Growth Environment

Weak Growth Environment

Yield Curve

Yield Curve

Currencies

Currencies

Credit Quality

Credit Quality

Hypothetical
Exposure
EXTEND Duration
HEDGED Currency

Hypothetical

REDUCE Credit

Exposure
REDUCE

Duration

UNHEDGED Currency
EXTEND

Credit

Yield Curve Seeking to position the portfolio to

Currencies Seeking to position the portfolio in

Credit Seeking to capture opportunities for strong

benefit from declining interest rates or to help


mitigate the potential impact to the portfolio during
periods of rising rates.

currencies we view as the most attractive and hedge


currency risks.

growth and improving credit quality in select


countries, which may occur during periods of rising
inflation and growth.

This is a hypothetical example intended solely to illustrate our investment process. It is for illustrative purposes only and is not intended to reflect any actual positioning of the portfolio and does not constitute investment advice.
For professional investor use only. Not for distribution to retail investors.

51

2957S

Templeton Global Total Return Fund

Active Duration Management


Management

Managing Duration While Still Seeking Attractive Yields


Templeton Global Total Return Fund

Templeton Global Total Return Fund - A(Mdis) USDYield to Maturity

The information is historical, may not reflect current or future portfolio characteristics.
For professional investor use only. Not for distribution to retail investors.

Average Duration (Years)

Sep-14

Jun-14

Mar-14

Dec-13

Sep-13

0
Jun-13

0
Mar-13

Dec-12

Sep-12

Jun-12

Mar-12

Dec-11

Sep-11

Jun-11

Mar-11

Dec-10

Sep-10

Jun-10

Mar-10

Dec-09

Sep-09

Jun-09

Mar-09

Dec-08

Sep-08

10

Jun-08

10

Mar-08

11

Dec-07

11

Sep-07

Yield to Maturity (%)

September 2007September 2014

Templeton Global Total Return Fund - A(Mdis) USDAverage Duration

52