November 30, 2020

Class A Franklin DynaTech Fund Advisor Class United States - Retail November 30, 2020

Fund Commentary

Performance Review • Global equity markets bounced back sharply during November 2020. Many investors turned bullish as the month progressed as uncertainty around the US elections lessened and progress on potential COVID-19 vaccines was reported. The vaccine news helped broaden the bull market to include some of the most pandemic-challenged businesses (including airlines and oil producers), despite concerns rising coronavirus infection rates could lead to renewed lockdowns that would stall economic recoveries. • For the month, the fund’s Advisor Class shares returned 11.19%, and its benchmarks, the Russell 1000 Growth Index and the S&P 500 Index, returned 10.24% and 10.95%, respectively. Past performance is not an indicator or a guarantee of future performance. ONE-MONTH KEY PERFORMANCE DRIVERS

Stocks Sectors MercadoLibre (Off-Benchmark Exposure) Information Technology, or IT (Stock Selection) HELPED Microsoft (Significant Underweight) Consumer Staples (Lack of Exposure) Inspire Medical Systems (Off-Benchmark Exposure) Communication Services (Stock Selection) Alibaba Group Holding (Off-Benchmark Exposure) Health Care (Stock Selection, Overweight) HURT Tesla (Underweight) Real Estate (Overweight, Stock Selection) Tencent Holdings (Off-Benchmark Exposure) Utilities (Overweight)

• Our holdings in internet and specialty retailers had a very strong month. Top contributor MercadoLibre, the largest e-commerce platform serving Latin America, reported another solid set of quarterly results with continued acceleration across the board. Net revenues were US$1.1 billion in 2020’s third quarter, up 85% (in US dollars) on a year-ago basis and well above consensus estimates. On the logistics side, MercadoLibre continued to improve delivery times and propel market penetration through its managed network, which we believe should help drive better customer satisfaction as well as stickiness (customer loyalty). • Software and IT services industry holdings were behind much of our outperformance in the IT sector. Aside from the benefits of strategically underweighting Microsoft (which appreciated only about half as much as the overall benchmark index), our overweighted or off-index positions in software developers HubSpot (marketing, sales and customer service platform), Cerence (intuitive automotive voice assistants) and many others surged well beyond the benchmark return. In the health care sector, Inspire Medical Systems, which develops medical devices, released a blowout third-quarter earnings report based in part on rapidly expanding sales of a minimally invasive implant that reduces the complications associated with CPAP (continuous positive airway pressure) machine therapy. • The fund’s 1.8% average cash position had a larger negative impact on relative returns than all sector-level detractors except health care (which essentially matched the modest negative impact from cash). Among individual securities, our position in Chinese tech and e-commerce giant Alibaba did not surpass analysts’ expectations with its 3Q20 results, and shed equity value due to some major regulatory concerns: Chinese regulators suspended the IPO of its fintech affiliate Ant Group on November 3, and also drafted new antitrust rules to prevent dominant companies like Alibaba from using monopolistic tactics. Elsewhere in the portfolio, an exceptional rally in electric vehicle manufacturer Tesla had the second-largest positive impact on our absolute returns (after MercadoLibre), but we held only about half the index’s overall exposure to the company. Tesla had a banner month as it was added to the S&P 500 Index (and other major indexes), thereby increasing the bullish momentum that has pushed the shares up about 600% year to date.

Outlook & Strategy • While the global community was still contending with the evolving new reality under the COVID-19 pandemic heading into December, we are encouraged by the latest vaccine breakthroughs and the strengthening economic reboot that appears to be underway in many parts of the world. • Going forward, we still see innovation as the main driver of value creation across industries and the global economy. We continue to think about what’s going to happen over the next three, five, seven and 10 years, while in the shorter term we will be listening to what companies have learned from their operations under the pandemic, and how they might apply that to their businesses over the longer term. • We see a number of structural impediments to strong global GDP growth, including the potentially prolonged impact of COVID-19 in the near term as well as other, longer-term headwinds such as high levels of debt across major economies, adverse demographics in developed markets, a lack of political will for serious structural reform, and elevated geopolitical and trade risk, just to name a few. In this environment, we believe many investors will place a premium on companies that can grow revenues and earnings—regardless of GDP growth—by addressing secular shifts in the way we interact with friends and family, shop and pay for goods and services, treat our illnesses, and spend our leisure time. Overall, we seek to tactically anticipate the ongoing convergence of technology with other sectors driving innovation. • We believe we are living through the Fourth Industrial Revolution today, and that it is driving the current pace of innovation in the marketplace. Building on the Third, a digital revolution occurring since the mid-20th century, the Fourth reflects many technologies—blurring the lines between physical, digital and biological spheres. As investors in innovation, the transformational impact of the Fourth Industrial Revolution supports five platforms of growth: global e-commerce, genetic breakthroughs, intelligent machines, new finance, and exponential data.

For Financial Professional Use Only / Not For Public Distribution Not FDIC Insured | May Lose Value | No Bank Guarantee Franklin DynaTech Fund November 30, 2020

• In times of crisis, businesses tend to adapt accordingly, and can embrace technology much more quickly. This is what we have witnessed in recent months, with many businesses moving from offline to online. Schools have embraced the use of online technologies to provide a learning platform for students. E-commerce, internet and software companies are also benefitting from an increase in online activities. Acceleration in internet usage and penetration should continue driving growth in cloud and other network architecture, increasing demand for servers and other memory-intensive devices. A separate-but-linked reality centers on the notion of emerging markets (EMs) “leapfrogging” the developed world in terms of innovative infrastructure and business models. We have seen this unfold in areas such as mobile telecoms, broadband, e-commerce, and e-payments and more recently in new areas such as education and health care amidst lockdowns. Such business models are highly suited to the structures of EMs, and benefit from the availability of superior data coverage at substantially lower cost in countries such as China and India. • We believe COVID-19 is likely to cause a permanent or semi-permanent change in behavior in favor of certain products such as web conferencing, cloud, vaccine development, disease screening, genetic sequencing, streaming media, video gaming, online selling and more. The past nine months have been a real test of the limits of online connectivity. While digital workplace options were available in a certain sliver of industries prior to this crisis, we should expect that sliver to wax in the wake of the pandemic. For example, teleconferencing is no longer a novelty; it has proven it can be a norm. Meanwhile, brick-and-mortar retailers were in trouble before the pandemic with the seismic consumer shift to online shopping along with rising costs and overexpansion, especially in the United States, where many retailers were forced to adapt or close their stores. The arrival of COVID-19 intensified the struggle to stay in business and accelerated changes in how and where consumers spend their money. • We have developed a specific process that we employed during this year’s bear market and subsequent reversal to new all-time highs. This underscored that we have established and continue to refine our portfolio-construction techniques after decades of investing in the world’s most innovative companies. Our process tends to move slowly, methodically and incrementally, and we generally eschew large portfolio changes. Equally importantly, we believe it removes bias and encourages rational thought during security selection or divestment. • The benefit of our approach to active management is that we allocate based on our level of conviction regarding the pace of innovation at each company and the sustainability of the growth it creates. Our view may be very different from that of the market, as selecting securities for an innovation-based portfolio requires an unorthodox approach. For example, the team is likely to conduct additional research on companies that are trading above historical multiples rather than below, as the strategy seeks positive inflections, such as acceleration in earnings or price momentum.

Fund Details Fund Description

Inception Date 01/01/1968 The fund seeks capital appreciation by investing primarily in companies which management believes are leaders in innovation, take advantage of Benchmark Russell 1000 Growth Index, S&P 500 Index new technologies, have superior management, and benefit from new industry conditions in the dynamically changing global economy.

Performance Data Average Annual Total Returns1 (%) at NAV As Of 11/30/2020 As Of 09/30/2020 Since 1 Mth 3 Mths 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception Date Class A2 11.16 6.42 47.47 26.45 24.08 18.57 10.18 01/01/1968 Advisor Class2,3 11.19 6.49 47.83 26.78 24.39 18.87 10.24 01/01/1968 Russell 1000 Growth Index4 10.24 1.48 37.53 21.67 20.09 17.25 - - S&P 500 Index4 10.95 3.89 15.15 12.28 14.14 13.74 10.16 -

Past performance is not an indicator or a guarantee of future performance. Current performance may differ from figures shown. Periods greater than one year are shown as average annual total returns. The fund’s investment return and principal value will change with market conditions, and an investor may have a gain or a loss when they sell their shares. Please call Franklin Templeton Sales and Marketing Services at (800) 223-2141 or visit franklintempleton.com for the fund’s most recent month-end performance.

Investment Team

Matthew Moberg Rupert Johnson Jr. Years with Firm 21 Years with Firm 55 Years Experience 22 Years Experience 55

1. Periods shorter than one year are shown as cumulative total returns.

For Financial Professional Use Only / Not For Public Distribution franklintempleton.com 2 Franklin DynaTech Fund November 30, 2020

What Are The Risks? All investments involve risks, including possible loss of principal. Stocks historically have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term. Investments in fast-growing industries like the technology and healthcare sectors (which have historically been volatile) could result in increased price fluctuation, especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments. The fund may also invest in small- and mid-capitalization companies, which can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. These and other risks are described more fully in the fund’s prospectus.

Important Legal Information Class A shares are offered at net asset value (NAV) to certain eligible investors, such as qualifying employee benefit plans and institutional investors exercising exclusive or shared discretionary investment authority for funds held in fiduciary, agency, advisory, custodial or similar capacity. Purchases made outside of the qualified class will be subject to the applicable sales charge. The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details. Advisor Class shares are offered only to certain eligible investors as stated in the prospectus. They are offered without sales charges or Rule 12b-1 fees. The information provided is not a complete analysis of every material fact regarding any country, market, industry, security or fund. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this material and may change without notice. A portfolio manager’s assessment of a particular security, investment or strategy is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy; it is intended only to provide insight into the fund’s portfolio selection process. Holdings are subject to change. Your clients should carefully consider a fund’s investment goals, risks, charges and expenses before investing. They should read the summary prospectus and/or prospectus carefully before they invest or send money. To obtain a prospectus, which contains this and other information, please call Franklin Templeton at (800) DIAL BEN/(800) 342-5236. Source: FTSE. Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC. Important data provider notices and terms available at www.franklintempletondatasources.com. 2. The fund has a fee waiver associated with any investment it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through 01/31/2021. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower. 3. Performance quotations for this class reflect the following methods of calculation: a) For periods prior to the fund’s Advisor Class inception date, a restated figure is used based on the fund’s oldest share class, Class A performance, excluding the effect of Class A’s maximum initial sales charge but reflecting the effect of the Class A Rule 12b-1 fees; and b) for periods after the fund’s Advisor Class inception date, actual Advisor Class performance is used, reflecting all charges and fees applicable to that class. 4. © 2020 Morningstar. 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.

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For Financial Professional Use Only / Not For Public Distribution