Templeton Growth Fund Investor Guide

Transcription

Global
Templeton Growth Fund
A P IO N E E R I N G L O BA L I N V E ST I N G
Franklin Templeton Investments
Gain From Our Perspective®
At Franklin Templeton Investments, we’re dedicated to one goal: delivering exceptional asset
management for our clients. By bringing together multiple, world-class investment teams in a single
firm, we’re able to offer specialized expertise across styles and asset classes, all supported by the
strength and resources of one of the world’s largest asset managers. This has helped us to become
a trusted partner to individual and institutional investors across the globe.
Focus on Investment Excellence
Global Perspective Shaped by Local Expertise
At the core of our firm, you’ll find multiple independent
investment teams—each with a focused area of expertise—
from traditional to alternative strategies and multi-asset
solutions. And because our portfolio groups operate
autonomously, their strategies can be combined to deliver
true style and asset class diversification.
In today’s complex and interconnected world, smart
investing demands a global perspective. Franklin Templeton
pioneered international investing over 60 years ago, and
our expertise in emerging markets spans more than
a quarter of a century. Today, our investment professionals
are on the ground across the globe, spotting investment
ideas and potential risks firsthand. These locally based
teams bring in-depth understanding of local companies,
economies and cultural nuances, and share their best
thinking across our global research network.
All of our investment teams share a common commitment
to excellence grounded in rigorous, fundamental research
and robust, disciplined risk management. Decade after
decade, our consistent, research-driven processes have
helped Franklin Templeton earn an impressive record of
strong, long-term results.
* As of 12/31/15. Clients are represented by the total number of shareholder accounts.
|
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Not FDIC Insured May Lose Value No Bank Guarantee
Strength and Experience
Franklin Templeton is a global leader in asset
management serving clients in over 180 countries.*
We run our business with the same prudence we apply
to asset management, staying focused on delivering
relevant investment solutions, strong long-term results
and reliable, personal service. This approach, focused on
putting clients first, has helped us to become one of the
most trusted names in financial services.
Investing the Templeton Way
Global Expertise
The Templeton Timeline:
A History of Achievements
1940 John Templeton establishes
investment-counseling business,
Templeton, Dobbrow and
Vance, Inc.
1954 Templeton Growth Fund,
the longest-running global fund
in the U.S. today, is introduced.
1964 Templeton Growth Fund
begins investing in Japan, then
considered an emerging market.
1982 Templeton Foreign Fund
is introduced.
1992 Widely recognized for its
global expertise, Templeton joins
Franklin Resources.
“When Templeton began in 1940, very
few Americans were looking outside
America for investment opportunities.
I trained myself and formed an
organization to help Americans see that
they could get strong financial results if they would
look everywhere in the world. Surely, you’ll find more
opportunities if you look worldwide than if you look
in any single nation.”
– SIR JOHN TEMPLETON Founder, Templeton Funds
1995 Templeton Russia Fund
(closed-end fund), one of the first
funds to invest in Russia,
is launched.
2006
Templeton BRIC Fund and
Templeton Emerging Markets
Small Cap Fund are launched.
2008 Templeton Frontier Markets
Fund, the first actively managed
U.S.-registered frontier markets
fund, is launched.
2013 Templeton Emerging Markets
Bond Fund is introduced,
providing access to fixed-income
opportunities in developing
countries worldwide.
For more than 70 years, the Templeton organization has followed Sir John
Templeton’s fundamental investing approach of searching the globe for
undervalued securities offering strong investment opportunities. This
commitment remains the core of our philosophy today, keeping us at the
forefront of the global investing arena.
Introduced in 1954, Templeton Growth Fund is the U.S. mutual fund
industry’s global pioneer, boasting a longer track record than any other
global fund. Since inception, the fund’s portfolio managers have adhered
to Templeton’s disciplined value philosophy, believing the best investment
opportunities can be found by searching the world.
2014 Templeton Growth Fund
celebrates its 60th anniversary.
Investors should carefully consider
a fund’s investment goals, risks, charges
and expenses before investing. To obtain
a summary prospectus and/or prospectus
for the funds mentioned above, which
contains this and other information,
please talk to your financial advisor, call
us at (800) DIAL BEN/342-5236 or visit
franklintempleton.com. Please carefully
read a prospectus before you invest or
send money.
franklintempleton.com
1
Why Invest Globally?
Overseas Investments Can Offer Unparalleled Portfolio Diversification3
1
Foreign Markets Offer Over Half of the World’s Investment Opportunities
Foreign stocks continue to account for a growing share of total world market capitalization.
By December 31, 2012, this share had grown to nearly two-thirds, with emerging markets alone
constituting over one quarter of the total.
World Market Capitalization (Foreign vs. United States)
DECEMBER 31, 19851
DECEMBER 31, 20122
United States . . . . . . . . . . . . . . . . . . 49.80%
Emerging Markets . . . . . . . . . . . . . . 3.67%
Foreign (Excluding Emerging Markets) 46.53%
2
United States . . . . . . . . . . . . . . . . . . 35.11%
Emerging Markets . . . . . . . . . . . . . . 23.39%
Foreign (Excluding Emerging Markets) 41.49%
Global Revenue Streams
More and more, companies across the globe are deriving revenue not just from their domestic markets,
but from many countries in various markets throughout the world. Below you’ll find some well-known
companies which are domiciled in different countries that generate more than 50% of their revenues
outside their own borders.
Percentage of Revenue Generated Outside Company’s Home Country4
United States
71%
United States
56%
United Kingdom
78%
Switzerland
98%
Australia
95%
India
86%
Brazil
83%
Israel
100%
For illustrative purposes only; these companies are not necessarily representative of the fund’s past or future portfolio composition.
1. Standard & Poor’s–Emerging Stock Markets Fact Book–1995.
2. Standard & Poor’s–Global Stock Markets Fact Book–2012.
3. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.
4. Data is as of each company’s latest financial statements: December 31, 2014 (BP Plc, Vale SA), June 30, 2015 (BHP Billiton), December 31, 2015 (Exxon Mobil Corporation, Novartis, Pfizer Inc.,
TEVA), March 31, 2016 (Dr. Reddy’s). Foreign revenue is based on Total Revenue–Domestic Revenue. Logos are trademarks of their respective owners. Logos are used for illustrative purposes to
identify the respective companies and should not be construed as endorsement of, or affiliation with, Franklin Templeton Investments or Templeton Growth Fund.
2
3
Tap Into Global Stock Market Performance
The table below shows the top performing stock markets of developed countries over the past ten
calendar years. As you can see, the U.S. made it into the top three only four times.5
Rank
2007
2008
2009
2010
1
Spain
Finland
Japan
Norway
Sweden
2
Portugal
Hong Kong
Switzerland
Australia
Denmark
3
Ireland
Germany
USA
Singapore
Hong Kong
Rank
4
2006
2011
2012
2013
2014
2015
1
Ireland
Belgium
Finland
Israel
Denmark
2
New
Zealand
Germany
Ireland
USA
Ireland
3
USA
Denmark
USA
New
Zealand
Belgium
Some of the Largest Companies Are Overseas
Limiting your portfolio to just U.S. stocks means missing out on some of the largest companies
in the world, including:6
6 of the world’s 10 largest banks
7 of the world’s 10 largest
consumer durables and
apparel companies
telecommunication services
companies
automobiles and components
companies
5. Source: Morgan Stanley Capital International, Inc. MSCI All Country World Index, 12/31/15. The performance of countries and unmanaged indexes does not reflect expenses and may not
correspond to the performance of the fund, which is actively managed and incurs expenses.
6. MSCI Perspective, 6/30/16. Ranked in terms of market capitalization. Not all of these companies may meet Templeton Growth Fund’s investment criteria.
3
The Strategy
Based on Four Fundamental Cornerstones
1
Search Globally
2
Seek Value
Templeton has always believed that when searching for the best investment opportunities, bargains are borderless.
To find the most promising companies for our portfolios, we leverage the experience and resource infrastructure
developed over the last 70 years, including analysts and offices that span the globe, from Asia to Europe to the Americas.
As value-oriented investors, we search worldwide for stocks selling at prices we believe are low relative to their true
value. Stocks are typically mispriced for a reason, and our analysts must distinguish a “cheap” stock from a true bargain.
Fundamental Portfolio Characteristics from Stock Holdings in Templeton Growth Fund
vs. Various Indexes8 (as of 6/30/16)
Average P/CF Ratio9
Average P/E Ratio10
Average P/BV Ratio11
S&P 500 Index
11.03x
21.97x
2.80x
MSCI All Country World Index
10.86x
19.21x
1.99x
6.12x
13.91x
1.21x
3
Perform Fundamental, Bottom-Up Research
4
Practice Patient, Long-Term Investing
Our research begins with the company. We conduct in-person visits and perform extensive fundamental research
to model a company’s potential future earnings, cash flow and asset value relative to its stock price. Then we compare the results
to other companies in its industry and versus companies regionally and globally to determine if a stock is undervalued.
We have always believed it’s better to adhere to a sound investment plan than to jump in and out of the market. As
disciplined investors, we evaluate a company’s potential for earnings and growth over a five-year horizon. Buying
out-of-favor stocks can hurt short-term performance, but we believe this discipline is what drives more consistent
long-term results, in terms of both lower volatility and strong returns. In the words of Sir John, we prefer to buy
when others are “despondently selling” and sell when others are “avidly buying.”
“Templeton Growth Fund has stayed true to the same disciplined bottom-up,
value-oriented investment strategy for over 60 years. As long-term investors, we
use a five-year investment horizon to evaluate a stock’s future earnings and asset
growth potential.”
NORMAN BOERSMA, CFA7 Portfolio Manager, Templeton Growth Fund
7. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
8. Source: Standard & Poor’s, Inc. (S&P 500 Index) and MSCI, Inc. (MSCI All Country World 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. Fund holdings
are subject to change.
9. Price-to-cash flow (P/CF) ratio is calculated by taking a stock’s capitalization and dividing it by its cash flow.
10. Price-to-earnings (P/E) ratio is the ratio of a company’s share price to earnings per share.
11. Price-to-book value (P/BV) ratio is the ratio of a company’s share price to net asset value per share.
Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
4
How Templeton Selects Stocks
Our Bargain List Selection Process
Templeton’s bottom-up investment approach seeks to identify the best potential
investment opportunities available. To make Templeton’s Bargain List, a stock must
be priced low relative to the company’s potential for future earnings or assets, and
it must survive a critical peer review process. The funds’ portfolio managers then
select stocks from the Bargain List based on their own individual research and each
fund’s investment criteria.
Narrowing the Stock Universe
PORTFOLIO CONSTRUCTION
Portfolio managers decide which Bargain List stocks
they’ll select for the funds they manage.
BARGAIN LIST SELECTION
After extensive peer review, scrutiny and investment debate,
the most promising stocks are selected for the Bargain List.
IN-DEPTH FUNDAMENTAL ANALYSIS
Using a five-year investment horizon, analysts conduct rigorous fundamental
analysis to identify potential Bargain List stocks. Potential investment ideas
are narrowed down to a group of 80–150 Bargain List Candidates.
POTENTIAL BARGAINS IDENTIFIED
Experienced analysts worldwide screen the universe of over
10,000 stocks, seeking value opportunities across global industry sectors.
TEMPLETON’S BOTTOM-UP STOCK SELECTION PROCESS
5
The Beneﬁts
Distinct Beneﬁts to Investing with a Global Pioneer
1
Global Resources
Our global reach includes Templeton Global Equity Group offices around the world.
Edinburgh, UK
Toronto, Canada
Nassau,
Bahamas
Hong Kong,
China
Fort Lauderdale, USA
Singapore
Melbourne,
Australia
4
True Diversification
Templeton Growth Fund’s investment mix changes as opportunities arise around the world.12
APRIL 30, 1964
APRIL 30, 1974
U.S. Stocks . . . . . . . . . . . . . . . . . 3.5%
Canadian Stocks . . . . . . . . . . . . 58.6%
European Stocks . . . . . . . . . . . . . 31.4%
Other Stocks . . . . . . . . . . . . . . . . 2.0%
Fixed Income Securities &
Cash Equivalents . . . . . . . . . . . . 4.5%
6
U.S. Stocks . . . . . . . . . . . . . . . . . 11.3%
Canadian Stocks . . . . . . . . . . . . 9.6%
European Stocks . . . . . . . . . . . . . 6.2%
Japanese Stocks . . . . . . . . . . . . . 45.9%
Cash Equivalents . . . . . . . . . . . . 27.0%
2
Low Average Turnover Ratio13
Templeton Growth Fund’s long-term investing
approach has historically resulted in annual portfolio
turnover ratios that have been considerably lower
than the average for global funds—which can help
keep fund expenses low for investors.
TEMPLETON GROWTH FUND VS.
LIPPER GLOBAL FUNDS CATEGORY
Average Annual Portfolio Turnover (12/31/05–12/31/15)
18%
3
Local Expertise with Global Perspective
Templeton Global Equity Group analysts are
located around the world, providing on-the-ground,
in-depth research insights. The fund’s managers
are able to use the research to search worldwide
for investment ideas and compare companies on
a global basis. As of June 30, 2016, the group was
comprised of 36 total members with an average of
19 years industry experience.
70%
Lipper Global Funds Category
12. Fund holdings are subject to change. For current information on the fund’s portfolio, please call Franklin Templeton Investments at (800) DIAL BEN/342-5236. Due to rounding, the sum
of portfolio holdings may not equal 100%.
13. Source: Lipper, Inc. The turnover ratio represents the arithmetic mean of annual turnover ratios for the fund and the Lipper Global Funds peer group over the 10 years ended 12/31/15.
Over that period, the Lipper Global Funds peer group consisted of 362 to 914 funds. Turnover ratio is a measure of a fund’s trading activity, computed by dividing the lesser of purchases or
sales (excluding all securities with maturities of less than one year) by average assets, and is based on data derived from individual fund annual reports.
APRIL 30, 1984
JUNE 30, 2016
U.S. Stocks . . . . . . . . . . . . . . . .51.0%
Canadian Stocks . . . . . . . . . . .12.8%
European Stocks . . . . . . . . . . . . 9.4%
Japanese Stocks . . . . . . . . . . . . 4.0%
Other Stocks . . . . . . . . . . . . . . . 5.0%
Cash Equivalents . . . . . . . . . . .17.8%
European Stocks . . . . . . . . . . . . 44.9%
U.S. Stocks . . . . . . . . . . . . . . . . . 35.6%
Asian Stocks (Ex. Japan) . . . . . . . 12.5%
Japanese Stocks . . . . . . . . . . . . . 4.2%
Other Stocks . . . . . . . . . . . . . . . . 2.8%
7
The Results
Solid Long-Term Results
AVERAGE ANNUAL TOTAL RETURNS
GROWTH OF A $10,000 INVESTMENT
Periods Ended June 30, 2016
With Sales Charges14
Without Sales Charge (November 29, 1954–
June 30, 2016)
1-Year
5-Year
10-Year
25-Year
Since Inception (Date)
Class A
-15.42%
2.67%
1.43%
7.75%
11.78% (11/29/54)
Class C
-11.83%
3.11%
1.27%
—
5.99%
(5/1/95)
Sales Charges: Class A: Maximum 5.75% initial sales charge;
Class C: 1% contingent deferred sales charge (CDSC) in the first year only.
Total Annual Operating Expenses:15 Without waiver: Class A: 1.05%; Class C: 1.80%;
With waiver: Class A: 1.05%; Class C: 1.80%.
Without Sales Charges
1-Year
5-Year
10-Year
25-Year
Since Inception (Date)
Class A
-10.24%
3.90%
2.04%
8.01%
11.89% (11/29/54)
Class C
-10.94%
3.11%
1.27%
—
5.99%
(5/1/95)
Performance data represent past performance, which does not guarantee
future results. Current performance may differ from figures shown. The fund’s
investment return and principal value will change with market conditions, and
you may have a gain or a loss when you sell your shares. Please call
Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit
franklintempleton.com for the most recent month-end performance.
A Picture Is Worth a Thousand Words
As shown in this chart, from the fund’s
inception through June 30, 2016,
an investment doubled on average every
six years, ending with a value over
$10 million. This hypothetical scenario
does not include the 5.75% maximum
initial sales charge—and does not take
into account federal, state or municipal
taxes. If taxes had been included, the net
results would have been lower.
2x
= INVESTMENT DOUBLES
$80,000
$40,000
% ANNUAL TOTAL RETURNS–CLASS A
2x
Without Sales Charges (1955–2015)
Year
Total Return
Year
Total Return
Year
Total Return
Year
Total Return
1955
7.04%
1970
-6.44%
1985
27.79%
2000
1.74%
1956
4.64%
1971
21.93%
1986
21.24%
2001
0.54%
1957
-16.92%
1972
68.56%
1987
3.11%
2002
-9.48%
1958
48.81%
1973
-9.92%
1988
23.60%
2003
32.85%
1959
14.00%
1974
-12.07%
1989
22.56%
2004
17.00%
1960
13.84%
1975
37.60%
1990
-9.05%
2005
8.15%
1961
18.29%
1976
46.74%
1991
31.33%
2006
21.81%
1962
-13.52%
1977
20.37%
1992
4.21%
2007
2.19%
1963
5.14%
1978
19.21%
1993
32.70%
2008
-43.47%
1964
28.59%
1979
26.84%
1994
0.82%
2009
30.81%
1965
22.14%
1980
25.89%
1995
19.83%
2010
7.54%
1966
-5.30%
1981
-0.24%
1996
20.55%
2011
-6.38%
1967
13.74%
1982
10.81%
1997
16.18%
2012
21.54%
1968
37.76%
1983
32.91%
1998
-2.48%
2013
30.15%
1969
19.66%
1984
2.17%
1999
30.44%
2014
-1.91%
2015
-6.46%
$20,000
2x
$10,000
11/54
14. On 1/1/93, the fund implemented a Rule 12b-1 plan, which affects subsequent performance.
15. The fund has a fee waiver associated with its investments in a Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results
eflect the fee waiver; without this reduction, the results would have been lower.
8
2x
$10,097,350
$10,240,000
$5,120,000
2x
Templeton Growth
Fund–Class A
$7,082,165
2x
MSCI All Country
World Index17
$2,560,000
$4,191,981
S&P 500 Index16
2x
$1,280,000
2x
$640,000
2x
$320,000
2x
$160,000
2x
Facts At A Glance
Templeton Growth Fund–Class A
11/29/54–12/31/15
Without Sales Charge
Average time to double investment
6.09 years
Double-digit calendar year returns
35
Positive calendar year returns
47
Negative calendar year returns
14
If the fund’s sales charge had been included, the returns would
have been lower.
6/16
The S&P 500 Index is considered representative of the U.S. stock market. Templeton Growth Fund’s benchmark, the MSCI All Country
World Index, is representative of global stock market performance. The MSCI All Country World Index comprises 23 developed and 23
emerging market country indices.
16. Source: © 2016 Morningstar. All rights reserved. Performance of the S&P 500 Index cited here is provided for comparative purposes only. The inception date of the S&P 500 Index is 1957.
For periods prior to the inception of the S&P 500 Index, performance has been reconstituted from information published in Standard and Poor’s Trade and Securities Statistics. Indexes are unmanaged
and include reinvested dividends.
17. Source: © 2016 Morningstar. All rights reserved. The inception date of the MSCI All Country World Index is December 31, 1987. Prior to that date, for comparative purposes, this index is assumed
to have mirrored the fund’s performance.
9
Over 50 Years of Strong Total Returns
Templeton Growth Fund, Class A, has had a positive total return in each rolling ten calendar-year period and all but
five rolling five calendar-year periods, since 1955.18 The following hypothetical scenario includes the 5.75% sales charge
applicable to the initial fund investment but does not take into account federal, state or municipal taxes. If taxes were taken
into account, the hypothetical values shown would be reduced. Past performance does not guarantee future results.
GROWTH OF A $10,000 INVESTMENT OVER 5- AND 10-YEAR PERIODS
Templeton Growth Fund–Class A (With Sales Charge)
5-YEAR
PERIODS
BEST
WORST
10
Period Covered
Dec.31–Dec.31
1954–1959
1955–1960
1956–1961
1957–1962
1958–1963
1959–1964
1960–1965
1961–1966
1962–1967
1963–1968
1964–1969
1965–1970
1966–1971
1967–1972
1968–1973
1969–1974
1970–1975
1971–1976
1972–1977
1973–1978
1974–1979
1975–1980
1976–1981
1977–1982
1978–1983
1979–1984
1980–1985
1981–1986
1982–1987
1983–1988
1984–1989
1985–1990
1986–1991
1987–1992
1988–1993
1989–1994
1990–1995
1991–1996
1992–1997
1993–1998
1994–1999
1995–2000
1996–2001
1997–2002
1998–2003
1999–2004
2000–2005
2001–2006
2002–2007
2003–2008
2004–2009
2005–2010
2006–2011
2007–2012
2008–2013
2009–2014
2010–2015
Value at
End of Period
$14,879
$15,823
$17,888
$18,624
$13,155
$14,838
$15,917
$12,745
$16,763
$21,963
$20,442
$15,654
$20,155
$29,874
$19,538
$14,352
$21,114
$25,424
$18,137
$24,003
$34,637
$31,696
$21,550
$19,834
$22,107
$17,802
$18,085
$21,979
$20,444
$19,011
$22,808
$16,235
$17,575
$17,764
$19,078
$15,696
$20,678
$18,984
$21,159
$15,557
$20,121
$17,082
$14,249
$11,103
$15,122
$13,563
$14,421
$17,468
$19,723
$8,392
$9,380
$9,329
$7,168
$8,527
$19,628
$14,718
$12,803
Average Annual
Total Return
8.27%
9.61%
12.33%
13.24%
5.64%
8.21%
9.74%
4.97%
10.88%
17.04%
15.37%
9.38%
15.05%
24.47%
14.33%
7.49%
16.12%
20.52%
12.64%
19.14%
28.21%
25.95%
16.60%
14.68%
17.19%
12.23%
12.58%
17.06%
15.38%
13.71%
17.93%
10.18%
11.94%
12.18%
13.79%
9.44%
15.64%
13.68%
16.17%
9.24%
15.01%
11.30%
7.34%
2.11%
8.62%
6.29%
7.60%
11.80%
14.55%
-3.45%
-1.27%
-1.38%
-6.44%
-3.14%
14.44%
8.04%
5.07%
10-YEAR
PERIODS
BEST
WORST
Period Covered
Dec.31–Dec.31
1954–1964
1955–1965
1956–1966
1957–1967
1958–1968
1959–1969
1960–1970
1961–1971
1962–1972
1963–1973
1964–1974
1965–1975
1966–1976
1967–1977
1968–1978
1969–1979
1970–1980
1971–1981
1972–1982
1973–1983
1974–1984
1975–1985
1976–1986
1977–1987
1978–1988
1979–1989
1980–1990
1981–1991
1982–1992
1983–1993
1984–1994
1985–1995
1986–1996
1987–1997
1988–1998
1989–1999
1990–2000
1991–2001
1992–2002
1993–2003
1994–2004
1995–2005
1996–2006
1997–2007
1998–2008
1999–2009
2000–2010
2001–2011
2002–2012
2003–2013
2004–2014
2005–2015
Value at
End of Period
$23,427
$26,730
$24,192
$33,125
$30,657
$32,180
$26,442
$27,260
$53,137
$45,523
$31,134
$35,063
$54,333
$57,511
$49,777
$52,744
$70,990
$58,113
$38,161
$56,308
$65,450
$60,795
$50,234
$43,019
$44,590
$43,075
$31,143
$41,000
$38,547
$38,485
$37,980
$35,621
$35,398
$39,887
$31,480
$33,509
$37,480
$28,697
$24,921
$24,962
$28,960
$26,133
$26,411
$23,231
$13,463
$13,501
$14,273
$13,288
$17,844
$17,481
$14,652
$12,675
Average Annual
Total Return
8.89%
10.33%
9.24%
12.72%
11.85%
12.40%
10.21%
10.55%
18.18%
16.37%
12.03%
13.37%
18.44%
19.12%
17.41%
18.09%
21.65%
19.24%
14.33%
18.87%
20.67%
19.78%
17.52%
15.71%
16.12%
15.72%
12.03%
15.15%
14.45%
14.43%
14.28%
13.55%
13.47%
14.84%
12.15%
12.85%
14.12%
11.12%
9.56%
9.58%
11.22%
10.08%
10.20%
8.79%
3.02%
3.05%
3.62%
2.88%
5.96%
5.74%
3.89%
2.40%
The performance data shown pertains only to the fund’s
Class A shares. The fund offers other share classes
subject to different fees and expenses, which affect
their performance. Please see the prospectus for details.
Up, Down and Sideways Market Performance
See How Templeton Growth Fund Performed in Various Market Environments
Historically, the stock market has exhibited various periods of up, down and sideways movement. As shown in the tables
below, Templeton Growth Fund has been relatively competitive in various market environments, compared to the major
U.S. and global stock indexes.19 In addition, when looking at the entire ten-year period (1999–2009), the fund has outpaced
all three major indexes.
U.S. MARKET PERFORMANCE
Dow Jones Industrial Average (12/31/99–12/31/09)
Sideways Market
12,000
11,497.12
10,428.05
8,000
Down
Market
4,000
Up
Market
Down
Market
0
12/99
Average Annual Total Returns
S&P 500 Index
19
MSCI EAFE Index
19
Dow Jones Industrial Average
19
Without Sales Charge17
Average Annual Total Returns
12/01
12/03
12/05
12/07
12/09
In a Down Market
In an Up Market
In a Down Market
-14.36%
16.13%
-41.39%
-17.97%
28.19%
-46.34%
-8.97%
15.44%
-38.03%
-4.65%
20.80%
-46.73%
12/31/99–3/31/03
3/31/03–10/31/07
10/31/07–2/28/09
In a Sideways Market
S&P 500 Index
12/31/99–12/31/09
-0.95%
19
MSCI EAFE Index
1.58%
Dow Jones Industrial Average19
1.30%
19
Without Sales Charge18
3.66%
If the sales charge had been included, returns would have been lower.
18. Average annual total return represents the average annual change in value of an investment over the periods indicated and assumes reinvestment of all dividends and capital gains at net asset value.
19. Source: © 2016 Morningstar. All Rights Reserved.
Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
11
A Plan That Would Have Allowed
You to Receive Income Later
The hypothetical illustration below shows what would have happened if,
over a five-year period, an individual made annual investments of $20,000
each, followed by a 20-year period of monthly withdrawals amounting to
$12,000 annually.20
Let’s assume the investor purchased shares at the beginning of the period at
a cost of $20,000 and then, five years after investments began, withdrew $1,000
each month.
“I am looking for an
investment plan that
will provide an income
stream.”
Past performance does not guarantee future results. Investors participating in
a systematic withdrawal program should review the results being obtained and
the value of remaining shares every year with their financial advisor. Please see
the fund’s standardized performance information on page 8 of this brochure.
Year Ended
Dec. 31
The following hypothetical illustrations
include the maximum initial sales
charges applicable to the initial
fund investment but do not take into
account federal, state or municipal
taxes. If taxes were taken into
account, the hypothetical values
shown would be reduced.
12
COST
Initial Investment
AMOUNT WITHDRAWN
Annual Total
Cumulative Total
VALUE
At End of Period20
1991
$20,000
—
—
$29,337
1992
$20,000
—
—
$50,850
1993
$20,000
—
—
$98,740
1994
$20,000
—
—
$117,932
1995
$20,000
1996
—
—
—
$164,454
$12,000
$12,000
$184,996
1997
—
$12,000
$24,000
$202,404
1998
—
$12,000
$36,000
$185,711
1999
—
$12,000
$48,000
$228,494
2000
—
$12,000
$60,000
$219,764
2001
—
$12,000
$72,000
$208,629
2002
—
$12,000
$84,000
$177,593
2003
—
$12,000
$96,000
$221,416
2004
—
$12,000
$108,000
$245,687
2005
—
$12,000
$120,000
$252,975
2006
—
$12,000
$132,000
$294,851
2007
—
$12,000
$144,000
$289,461
2008
—
$12,000
$156,000
$154,697
2009
—
$12,000
$168,000
$187,547
2010
—
$12,000
$180,000
$188,395
2011
—
$12,000
$192,000
$165,265
2012
—
$12,000
$204,000
$187,627
2013
—
$12,000
$216,000
$230,579
2014
—
$12,000
$228,000
$214,588
—
$12,000
2015
$100,000
Total of Annual
Investments
$240,000
$189,350
$240,000
$189,350
Total Withdrawn
Value Remaining
A Plan for Income Needed Today
A systematic withdrawal plan can offer investors the ability to receive
inflation-adjusted income starting immediately.
The hypothetical illustration below shows the results of a program in which an
individual invested $100,000 in Templeton Growth Fund, Class A, and initially
began withdrawing $500 a month, with the withdrawal amount increased by
3% annually to adjust for the rising cost of living, over a 20-year period.20
Past performance does not guarantee future results. Investors participating in
a systematic withdrawal program should review the results being obtained and
the value of remaining shares every year with their financial advisor. Please see
the fund’s standardized performance information on page 8 of this brochure.
SYSTEMATIC WITHDRAWAL PLAN
“I want to invest my
husband’s life insurance
proceeds to generate
income.”
Year Ended
Dec. 31
AMOUNT WITHDRAWN
Annual Total
Cumulative Total
VALUE
At End of Period20
1996
$6,000
$6,000
$109,700
1997
$6,180
$12,180
$120,999
1998
$6,365
$18,545
$111,806
1999
$6,556
$25,101
$138,329
2000
$6,753
$31,854
$133,586
2001
$6,956
$38,810
$127,164
2002
$7,164
$45,974
$108,388
2003
$7,379
$53,353
$135,067
2004
$7,601
$60,954
$149,560
2005
$7,829
$68,783
$153,442
2006
$8,063
$76,846
$177,971
2007
$8,305
$85,151
$173,670
2008
$8,555
$93,706
$91,806
2009
$8,811
$102,517
$109,216
2010
$9,076
$111,593
$107,399
2011
$9,348
$120,941
$91,894
2012
$9,628
$130,569
$101,067
2013
$9,917
$140,486
$120,282
2014
$10,215
$150,701
$108,125
2015
$10,521
$161,222
$91,166
Based on an annual review, the individual can increase or decrease the monthly withdrawals if that seems appropriate. The results of such a program vary substantially depending on the fund’s
investment performance during the period the program is in effect. The rate or amount chosen for withdrawal determines the value remaining at the end of the period. In a period of declining market
values, continued withdrawals could eventually exhaust the principal.
An investor should not begin a systematic withdrawal program until about six months following the initial investment, which most likely has not yet appreciated sufficiently to offset the sales
charges incurred.
20. Cumulative total return calculations show the change in the value of an investment over the periods indicated. This illustration assumes a 3.5% sales charge (for initial purchases of $100,000
but less than $250,000). It’s important to note that the amounts withdrawn do not represent dividends or income, but rather the proceeds from the sale of shares. Sufficient shares are sold from the
shareholder’s account at the time of each withdrawal to provide for such payments.
13
The Power of Dollar-Cost Averaging
Making regular monthly investments can be one of the best ways to reach your
long-term goals. This proven investment technique, also known as dollar-cost
averaging, may help lower the average cost of the shares you purchase. By
investing a fixed dollar amount at regular intervals, you buy more shares of
the fund when the price is low, and fewer shares when the price is high. This
investment method can help reduce the average cost of the shares you buy, giving
you an important tool in planning for your family’s long-term financial goals.
“We’d like to plan for
future expenses of our
growing family.”21
Dollar-cost averaging involves a continuous investment in securities, regardless
of fluctuating price levels. As an investor, you should consider your financial
ability to continue purchases through periods of low price levels or changing
economic conditions. Such a plan does not assure a profit and does not protect
against loss in a declining market.
The hypothetical illustration below shows the total value of your investment if
you’d invested $100 in Templeton Growth Fund, Class A, each month for the
number of years shown in each row.21
Please remember that past performance does not guarantee future results. Please
see the fund’s standardized performance information on page 8 of this brochure.
A CLOSER LOOK AT DOLLAR-COST AVERAGING
Total Cost
of Annual
Investments
Value of
Investment
12/31/1522
If You
Had Started...
Total Cost
of Annual
Investments
Value of
Investment
12/31/1522
1 Year Ago
$1,200
$1,066
14 Years Ago
$16,800
$23,276
2 Years Ago
$2,400
$2,141
15 Years Ago
$18,000
$25,571
3 Years Ago
$3,600
$3,439
16 Years Ago
$19,200
$28,118
4 Years Ago
$4,800
$5,011
17 Years Ago
$20,400
$31,289
5 Years Ago
$6,000
$6,491
18 Years Ago
$21,600
$34,289
6 Years Ago
$7,200
$8,227
19 Years Ago
$22,800
$37,746
7 Years Ago
$8,400
$10,689
20 Years Ago
$24,000
$41,878
8 Years Ago
$9,600
$11,934
21 Years Ago
$25,200
$47,050
9 Years Ago
$10,800
$13,172
22 Years Ago
$26,400
$51,902
10 Years Ago
$12,000
$14,662
23 Years Ago
$27,600
$58,732
11 Years Ago
$13,200
$16,359
24 Years Ago
$28,800
$65,739
12 Years Ago
$14,400
$18,267
25 Years Ago
$30,000
$74,759
13 Years Ago
$15,600
$20,929
If You
Had Started...
The following hypothetical illustrations include the 5.75% sales charge applicable to the initial fund investment, but do not take
into account federal, state or municipal taxes. If taxes were taken into account, the hypothetical values shown would be reduced.
21. An investment in Templeton Growth Fund does not guarantee that your expenses will be met.
22. Represents the value of an investment at the end of the period indicated. Cumulative total returns assume reinvestment of all dividends and capital gains at net asset value.
14
Putting Time on Your Side
While every investor strives to buy when prices are low, a disciplined, long-term
investment program can produce impressive results—even when an investor
buys at the worst possible time.
The tables below illustrate this point. Both assume an individual invested $5,000
in Templeton Growth Fund, Class A, with sales charge, every year for the past
20 years. The table on the left shows what would have happened if the purchases
were made when the fund hit its yearly high, while the one on the right shows
the results of purchases made at the fund’s yearly low.23
Past performance does not guarantee future results. Please see the fund’s
standardized performance information on page 8 of this brochure.
“I would like to invest in
the stock market, but
I’m not sure if now is
a good time.”
THE WORST CASE
THE BEST CASE
Investing Each Year at the High for Share Prices
Investing Each Year at the Low for Share Prices
Date of
Fund High
Cumulative
Investment
Value of Account
on Dec. 3123
Date of
Fund Low
Cumulative
Investment
Value of Account
on Dec. 3123
10/18/96
$5,000
$5,042
1/10/96
$5,000
$5,659
10/7/97
$5,000
$10,268
12/23/97
$5,000
$11,386
4/15/98
$5,000
$14,089
10/26/98
$5,000
$16,029
7/15/99
$5,000
$23,378
2/17/99
$5,000
$27,187
8/17/00
$5,000
$28,542
10/23/00
$5,000
$32,819
5/21/01
$5,000
$33,296
9/21/01
$5,000
$38,647
5/24/02
$5,000
$34,136
10/9/02
$5,000
$40,241
12/31/03
$5,000
$50,127
3/12/03
$5,000
$60,506
12/5/04
$5,000
$63,503
5/17/04
$5,000
$76,470
9/11/05
$5,000
$73,519
10/21/05
$5,000
$87,814
10/19/06
$5,000
$94,599
6/13/06
$5,000
$112,728
7/15/07
$5,000
$101,162
12/19/07
$5,000
$120,104
1/1/08
$5,000
$59,915
11/20/08
$5,000
$73,750
11/16/09
$5,000
$83,158
3/9/09
$5,000
$104,947
11/4/10
$5,000
$94,196
7/2/10
$5,000
$118,790
5/2/11
$5,000
$92,191
9/22/11
$5,000
$116,575
12/20/12
$5,000
$116,932
6/1/12
$5,000
$147,793
12/1/13
$5,000
$157,070
1/1/13
$5,000
$198,640
7/6/14
$5,000
$158,497
12/15/14
$5,000
$199,979
5/14/15
$5,000
$152,479
9/29/15
$5,000
$192,202
Average Annual Total Return: 4.09%
Average Annual Total Return: 6.17%
23. Value of account represents the change in value of an investment.
15
As of June 30, 2016
FUND GOAL
BEST & WORST 5-YEAR & 10-YEAR PERIOD RETURNS24
The Fund seeks long-term capital growth by
investing primarily in the equity securities
of companies located anywhere in the world,
including emerging markets.
FUND DATA
Inception date. . . . . . . . . . . . . . . . . . . . . 11/29/54
Net assets. . . . . . . . . . . . . . . . . . . . $12.94 billion
Number of long-term positions. . . . . . . . . . . . . 86
Number of shareholder accounts. . . . . . 179,904
Standard deviation (10-year)26. . . . . . . .
18.32
Symbol
Class C
Class R
Class R6
Advisor
Class
TEPLX TEGTX
TEGRX
FTGFX
TGADX
Class A
MORNINGSTAR STYLE BOXTM 27
STYLE
ValueBlendGrowth
5
SIZE
Large
28.21%
-6.44%
5
Best (12/31/74–12/31/79)
Worst (12/31/06–12/31/11)
Number of Negative 5-Yr Periods
21.65%
2.40%
0
Best (12/31/70–12/31/80)
Worst (12/31/05–12/31/15)
Number of Negative 10-Yr Periods
Performance data represent past performance, which does not guarantee future results.
TOP 10 HOLDINGS25
Samsung Electronics Co., Ltd.
4.15%
Discovers, develops, manufactures and
markets human therapeutics based on
cellular and molecular biology.
Royal Dutch Shell PLC
Oracle Corp.
2.79%
PORTFOLIO MANAGERS28
Norman Boersma, CFA
Since 2011; joined Franklin Templeton in 1991
Tucker Scott, CFA
James Harper, CFA
Heather Arnold, CFA
Christopher James Peel, CFA
Herbert Arnett, Jr.
1.96%
Explores for and extracts crude oil, natural
gas, and natural gas liquids.
Develops, manufactures, markets, sells,
hosts, and supports database and middleware
software, application software, cloud
infrastructure, hardware systems, and related
services worldwide.
Teva Pharmaceutical Industries, Ltd.
Comcast Corp.
Historical
Small
2.09%
Develops and manufactures consumer devices
ranging from electronics to appliances.
5 Current
Medium
Amgen Inc.
2.35%
Citigroup Inc.
1.77%
Provides cable services in the United States.
Develops, manufactures, markets and
distributes generic, specialty and other
pharmaceutical products worldwide.
2.33%
Allergan PLC
1.75%
Provides various financial products and
services, including consumer and investment
banking, wealth management and transaction
services.
Develops, manufactures, markets, and
distributes medical aesthetics, generic,
branded generic, biosimilar, and over-thecounter pharmaceutical products worldwide.
Microsoft Corp.
BP PLC
2.30%
Develops, manufactures, licenses, sells and
supports software products.
1.72%
Operates as an integrated oil and gas
company worldwide.
A FEW WORDS ABOUT RISK
All investments involve risks, including possible loss of principal. Special risks are associated
with foreign investing, including currency fluctuations, economic instability and political
developments; investments in emerging markets involve heightened risks related to the same
factors. In addition, smaller-company stocks have historically experienced more price volatility
than larger-company stocks, especially over the short term. To the extent the Fund focuses on
particular countries, regions, industries, sectors or types of investment from time to time, it
may be subject to greater risks of adverse developments in such areas of focus than a fund that
invests in a wider variety of countries, regions, industries, sectors or investments. The fund’s
risk considerations are discussed in the prospectus.
24. Assumes reinvestment of dividends and capital gains and includes current sales charges (see page 8 for standardized performance figures).
25. As of 6/30/16. Holdings of the same issuer have been combined. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included. For updated information, please call Franklin
Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com.
26. Standard deviation is a statistical measurement of the range of a fund’s total returns over a 10-year period. In general, higher standard deviation means greater volatility.
27. Source: Morningstar® 6/30/16. The style box reveals a fund’s investment style. The vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style
(value, blend, or growth). Placement is determined by fund portfolio holding figures most recently entered into Morningstar’s database and corresponding market conditions. Shaded areas show the past
3 years of quarterly data. Past performance does not guarantee future results.
28. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
16
Franklin Templeton Distributors, Inc.
One Franklin Parkway
San Mateo, CA 94403-1906
(800) DIAL BEN® / 342-5236
Franklin Templeton Investments
Your Source for:
• Mutual Funds
•Retirement
• 529 College Savings Plans
• Separately Managed Accounts
Templeton Growth Fund Symbols:
Class A: TEPLX
Class C: TEGTX
Class R: TEGRX
Class R6: FTGFX
Advisor Class: TGADX
This brochure must be preceded or accompanied by a Templeton Growth Fund summary prospectus and/or prospectus. Please
read a prospectus carefully before you invest or send money. Investors should carefully consider a fund’s investment goals, risks,
charges and expenses before investing. The fund’s performance will be updated each quarter with standardized figures and
ranking information, if quoted.
© 2016 Franklin Templeton Investments. All rights reserved.
UPD 11/16 101 XINV 08/16

Templeton Growth Fund Investor Guide

Transcription

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