Franklin Global Sukuk Fund - a (Acc) USD

Franklin Templeton Fixed Income Group

Data as of 30 June 2019

Franklin Templeton Shariah Funds Franklin Global Sukuk Fund - A (acc) USD

For professional investor use only. Not for distribution to retail investors. Franklin Global Sukuk Fund

Table of Contents

Franklin Templeton...... 4 Trailing Allocations...... 22

Investment Capabilities Overview...... 5 Strategy Overview...... 24 Franklin Templeton—A Trusted, Long-Term Partner in Investment Management...... 6 Sukuk Investing with a Global Asset Management Leader...... 25 Franklin Templeton Fixed Income Management...... 7 Access to a Well-Established, Integrated Platform...... 26 Who Is Franklin Templeton?...... 8 Global Sukuk Specialists on the Ground...... 27 Financial Strength That Our Clients and Partners Can Trust...... 9 An Experienced, Tenured Team...... 28 Local Insights from a Global Leader...... 10 Amanie International Shariah Supervisory Board...... 29 Extensive Shariah-Compliant Resources...... 11 Fatwa...... 30 Investment Philosophy...... 31 Global Sukuk...... 12 Sukuk Investment Process...... 32 Basic Building Block of a Shariah-Compliant Asset Allocation...... 13 Broad Exposure to Global Sukuk Market Opportunities...... 33 Global Sukuk Bonds Have Low Correlation to Oil and Other Major Asset Classes...... 14 Integrated Risk Management Has Three Different Layers...... 34 Strong Outperformance of Global Sukuk with Less Volatility than Conventional Bonds...... 15 Global Sukuk | Risk Framework...... 35 Global Sukuk Index Returns Have a Strong Risk/Return Profile Compared to ...... 16 Emerging Markets Bonds and Global Bonds Fund Characteristics...... 36

Global Sukuk Have Provided Downside Protection...... 17 Summary...... 37 Exponential Growth in Annual Global Sukuk Issuance...... 18 What are the Key Risks?...... 38 The Global Sukuk Market Has Grown in Size and Diversity...... 19 Portfolio Characteristics...... 39 Global Sukuk Issues Are Increasingly Larger, Listed and Liquid...... 20 Geographic Allocation...... 40 Portfolio Themes: Global Sukuk Q2 2019...... 21 Currency Allocation...... 41

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Table of Contents (continued)

Sector Allocation...... 42 Credit Quality Allocation...... 43 Maturity Allocation...... 44 Top Ten Holdings...... 45 Discrete Performance...... 46 Historical Performance...... 47 Calendar Year Returns...... 48 Performance Risk Statistics...... 49 Supplemental Information...... 50

Appendix...... 52

Most Common Sukuk Instruments...... 53 Growing Global Sukuk Market Increasingly Diversified...... 54 Franklin Templeton—ESG and Corporate Sustainability...... 55 Franklin Templeton—ESG Investment Philosophy...... 56 Franklin Templeton Is Committed to ESG...... 57 Glossary...... 58 Important Disclosures...... 59 Additional Disclosures...... 60 GIPS Performance Presentation...... 61

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Franklin Templeton

For professional investor use only. Not for distribution to retail investors. 4 Franklin Global Sukuk Fund

Investment Capabilities Overview

FRANKLIN TEMPLETON Total Combined Assets Under Management: US$715.2 Billion

2 Equity 5 Fixed Income 8 Multi-Asset Solutions 11 Alternatives

AUM US$289.2 Billion US$269.8 Billion US$116.0 Billion US$42.2 Billion CAPABILITIES • Value • Government • Multi-Asset Income • Commodities • Deep Value • Municipals • Diversified Outcome-Oriented • Infrastructure • Core Value • Corporate Credit • Risk Premia • Real Estate • Blend • Bank Loans • Smart Beta • Hedge Funds • GARP • Securitised • Balanced Allocation • Private Equity • Growth • Multi-Sector • Target Date/Risk • Private Debt • Convertibles • Currencies • Model Portfolios • Sector • Sukuk • Inflation Protection • Shariah • Managed Volatility • Smart Beta INVESTMENT • Templeton Global Equity Group (1940) • Franklin Templeton Fixed Income Group (1970) • Franklin Templeton Multi-Asset Solutions (1948) • Franklin Real Asset Advisors (1984) TEAMS • Franklin Equity Group (1947) • Templeton Global Macro (1986) • Franklin Systematic (2011) • Darby Overseas Investments (1994) • Franklin Mutual Series (1949) • Franklin LAM-Fixed Income (1993) • K2 Advisors (1994) • Franklin Templeton Emerging Markets Equity (1987) • Pelagos (2005) • Franklin LAM-Developed Markets Equity (1993) • Benefit Street Partners (2008) • Edinburgh Partners (2003)

Source: Franklin Templeton Investments (FTI), as of 30 June 2019, based on latest available data. Total combined Assets Under Management (Total AUM) combines U.S. and non-U.S. AUM of the investment management subsidiaries of the parent company, Franklin Resources, Inc. (FRI) [NYSE: BEN], a global investment management organisation operating as FTI. Only selected business entities within FTI claim compliance with the GIPS standards as described in the table of contents if applicable. Total and platform AUM includes discretionary and non-discretionary accounts, including pooled investment vehicles, separate accounts and other vehicles. Total and platform AUM may also include advisory accounts with or without trading authority. In addition, assets for which certain FTI advisers provide limited asset allocation advisory services, and assets that are not allocated to FTI products are not included in the AUM figures shown. Franklin Templeton Multi-Asset Solutions may invest in various investment platforms advised by a number of investment advisory entities within FTI. Platform AUM reported for FT Multi-Asset Solutions therefore may include certain AUM separately reported under each utilised investment platform. Total AUM also includes assets managed by certain FTI advisers that do not form part of the selected investment platforms shown. As a result, the combined platform AUMs may not equal Total AUM and may be calculated and reported separately for regulatory or other purposes under each investment adviser. Each local asset manager may be considered as an entity affiliated with or associated to FTI by virtue of being a direct or indirect wholly-owned subsidiary of FRI, an entity or joint venture in which FRI owns a partial interest, which may be a minority interest, or a third party asset management company to which investment advisory services have been delegated by an FTI adviser. For professional investor use only. Not for distribution to retail investors. 5 5889

Franklin Global Sukuk Fund Franklin Templeton— FranklAin Trusted,Templeton Long-Term—A Trusted, LPartnerong-Ter minP Investmentartner in Inve sManagementtment Management

Investment excellence • Diverse investment solutions across multiple asset classes • Time-tested investment disciplines plus exceptional research enables strong long-term performance potential • Integrated, comprehensive and proven approach to investment risk management • Committed to environmental, social and governance (ESG) investment integration

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

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

For professional investor use only. Not for distribution to retail investors. 6 0301

Franklin Global Sukuk Fund

FFranklinranklin TTempletonempleton FFixedixed IncomeIncome Management

Michael Hasenstab, Ph.D. Sonal Desai, Ph.D. Chief Investment Officer Chief Investment Officer

Global Corporate Global Sovereign/ Mortgages Bank Loans Municipals Local Asset Macro Credit Emerging Markets Management1

Glenn Voyles, CFA John Beck Roger Bayston, CFA Reema Agarwal, CFA Sheila Amoroso Argentina, Australia, Global Sovereign Matt Fey, CFA William Ledward, Ph.D. Brazil, Canada, China,2 Local Emerging Market Debt India, Malaysia, Mexico, Poland, South Korea and UAE

32 Investment 14 Investment 9 Investment 13 Investment 30 Investment 39 Investment 20 Investment Professionals Professionals Professionals Professionals Professionals Professionals Professionals

Quantitative: David Yuen, CFA, FRM, 6 Professionals

Fixed Income Policy Committee | Co-Chairs: Sonal Desai and Michael Materasso

170+ 62 13 Ph.D.s Dedicated Fixed CFA Charterholders Income Investment 57 M.B.A.s Professionals3

1. This unit is comprised of investment professionals located in affiliates of and joint venture partners with Franklin Templeton Investments. Reference to Local Asset Management is in relation to fixed income teams (excluding equity). 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. 3. Investment professionals include portfolio managers, analysts and traders. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. As of 30 June 2019. For professional investor use only. Not for distribution to retail investors. 7 1648

Franklin Global Sukuk Fund

WWhoho IIss FFranklinranklin TTempleton?empleton?

An Investment Management Organisation • Focusing on research and investment management with over 620 investment professionals covering all major asset classes Franklin Templeton total firm assets 2019 • Serving the needs of investors worldwide with a dedicated team of US$715.2 billion as of 30 June 2019 investment professionals Fiduciary Trust Company International joins 2001 • Providing the resources, expertise, experience and commitment to ensure Franklin Templeton outstanding service to our clients 2000 Bissett Investment Management joins Franklin Templeton • Offering a broad range of investment strategies and vehicles

Franklin Resources, Inc. (BEN), stock is added 1998 Shariah-Compliant Investment Solutions Provider to S&P 500 Index

1 • Managing over US$2.24 billion in Shariah-compliant assets 1996 Mutual Series joins Franklin Templeton • Offering Shariah-compliant strategies across a wide range of asset classes, including global, regional and local equities, and fixed 1992 Templeton joins Franklin Templeton income (sukuk)

Applying our management expertise in combination with the knowledge Franklin Resources, Inc., stock listed and begins • 1986 and advice of Shariah scholars trading on New York Stock Exchange

Franklin Resources, Inc., moves offices from 1973 New York to California

Franklin Resources, Inc., formed as a holding 1971 company going public as BEN

Franklin Distributors, Inc., introduces its first 1947 mutual funds

Investment professionals include portfolio managers, analysts and traders. 1. As of 30 June 2019. For professional investor use only. Not for distribution to retail investors. 8 1650

Franklin Global Sukuk Fund

FFinancialinancial SStrengthtrength TThathat OOurur CClientslients aandnd PPartnersartners CCanan TTrustrust

Diversified Business • Franklin Templeton manages over US$712.3 billion assets in total • Continue to benefit from the global diversification of our assets under management by investment objective, client type and geographic region • A significant portion of our business is generated from outside the United States

Strong Balance Sheet • Franklin Resources, Inc. is well capitalised with over US$6.7 billion in total cash and investments*

Excellent Credit Ratings • Standard & Poor’s long-term and short-term ratings are AA- and A-1+, respectively • Moody’s long-term and short-term ratings are A2 and P-1, respectively

*Cash and investments, net of debt and the tax liability related to the Tax Act, was US$6.7 billion. Source: Franklin Resources, Inc. as of 31 March 2019. For professional investor use only. Not for distribution to retail investors. 9 3016

Franklin Global Sukuk Fund Local Insights from a Global Leader Local Insights from a Global Leader

What Sets Us Apart

Access to Locally Broad Research Strength of a Global Sourced Ideas & Insights Capabilities Worldwide Asset Management Leader

• Local investment professionals who • Extensive on-the-ground asset • Franklin Templeton was established are based in the country or region management capabilities in 35 in 1947 where assets are managed countries1 to identify the best • Manages US$715 billion of assets1 investment opportunities in each • Specialisation and focus on a single country or region • Credit ratings among the highest of region to develop deep knowledge any asset management company and unique insights • In-depth research across all markets—developed, emerging and • Large research platform that operates • First-hand knowledge of local market frontier—and market capitalisation for seamlessly across the globe dynamics as investment teams are unparalleled insights into the markets embedded in their region’s local • Comprehensive 24/7 coverage we invest in business practices and support of key operations such as • Access to investment opportunities trading, risk analysis, legal, • Real-time response to local beyond the mainstream and often technology, operations, client market events before they are recognised by the service and other key business • Networks of local business contacts broader market services

1. Source: Franklin Templeton Investments as of 30 June 2019.

For professional investor use only. Not for distribution to retail investors. 10 1651

Franklin Global Sukuk Fund

EExtensivextensive SShariah-Complianthariah-Compliant RResourcesesources

Independent Endorsement from Esteemed Board of Scholars • Our portfolios are independently reviewed and endorsed by the Amanie International Shariah Supervisory Board • The Amanie scholars provide initial approval on investment objectives and strategy, as well as ongoing supervisory and monitoring services to ensure continuous adherence and validation to internationally accepted Shariah principles and standards • A fatwa was issued for Franklin Global Sukuk Fund on 30 September 2011

Comprehensive, Integrated Risk Management • Each portfolio team employs a highly disciplined investment philosophy and process designed to comprehensively measure and manage risk • The teams also leverage analysis and insight from a worldwide network of locally based risk management specialists

For professional investor use only. Not for distribution to retail investors. 11 Franklin Global Sukuk Fund

Global Sukuk

For professional investor use only. Not for distribution to retail investors. 12 1653

Franklin Global Sukuk Fund

BBasicasic BBuildinguilding BBlocklock ooff a Shariah-CompliantShariah-Compliant AssetAsset AllocationAllocation

Global Sukuk Can Provide Diversification Benefits • A 40% allocation to global sukuk would have reduced risk by 52%, while still achieving 78% of the return of the all-equity Shariah portfolio

5-Year Period Ended 30 June 2019

100% Shariah Equity 20%/80% 5% 40%/60% 60%/40%

80%/20% 4%

100% Global Sukuk 3% Annualised Return

1% 2% 4% 6% 8% 10% 12%

Risk (Annualised Standard Deviation)

FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com. (Global Sukuk is represented by the S&P Dow Jones Sukuk (USD) Index; Shariah Equities are represented by the MSCI AC World Islamic Index). See Important Disclosures slide for additional information. Past performance is not an indicator or a guarantee of future performance. For professional investor use only. Not for distribution to retail investors. 13 4267

Franklin Global Sukuk Fund

GGloballobal SSukukukuk B Bondsonds HHaveave LLowow CorrelationCorrelation toto OilOil andand OtherOther MajorMajor Assetsset ClassesClasses

Index Weight in Oil Sensitive Sectors as of 31 March 20191 3-Year Correlation of Daily Returns in US$ as of 31 March 20192

Sukuk Bonds Global Bonds 0.51

Global Government Bond 0.50

GCC Bonds Emerging Markets Bond 0.61 Emerging Markets Government Bond 0.35

Emerging Markets Equity 0.26 Emerging Market Corporates Developed Markets Equity 0.06

Crude Oil 0.04

Global HY Corporates

Global IG Corporates

0% 7% 14% 21% 28% 35%

Energy Exposure Materials Exposure

1. Source: FactSet. Indices are represented as follows: Global IG Corporates (Bloomberg Global IG Corporate Bond Index), Global HY Corporates (Bloomberg Global HY Corporate Bond Index), Emerging Market Corporates (Bloomberg USD EM Corporate Bond Index), GCC Bonds (FTSE MENA Broad Bond GCC Issuers Index), Sukuk Bonds (Dow Jones Sukuk Index). 2. Source: FactSet. Indices are represented as follows: Crude Oil (Bloomberg Composite Crude Oil Index), Developed Markets Equity (MSCI The World Index), Global Government Bond (JP Morgan GBI Global Index), Emerging Markets Equity (MSCI Emerging Markets Index), Global Bonds (Bloomberg Barclays Global Aggregate Index), Emerging Markets Government Bond (JP Morgan GBI-EM Global Composite Index) and Emerging Markets Bond (JP Morgan EMBI Global Index). MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This report is not prepared or endorsed by MSCI. Important data provider notices and terms available at www.franklintempletondatasources.com. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. For professional investor use only. Not for distribution to retail investors. 14 1655

Franklin Global Sukuk Fund Strong Outperformance of Global Sukuk with Less Volatility than Conventional BStrongonds Outperformance of Global Sukuk with Less Volatility than Conventional Bonds

Global Sukuk vs. Global Bonds 3-Year Period Ended 30 June 2019

12,000

11,000

US$ 10,000

9,000

8,000 Jun-16 Oct-16 Feb-17 May-17 Sep-17 Dec-17 Apr-18 Jul-18 Nov-18 Feb-19 Jun-19

Global Sukuk Global Bonds

FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com. Source: S&P and J.P. Morgan as of 30 June 2019. Global Sukuk are represented by the Dow Jones Sukuk Index. Global Bonds are represented by the J.P. Morgan GBI Broad Index. Returns are in USD. See Important Disclosures slide for additional information. Past performance is not an indicator or a guarantee of future performance. For professional investor use only. Not for distribution to retail investors. 15 4266

Franklin Global Sukuk Fund GGloballobal SSukukukuk I Indexndex RReturnseturns HHaveave aa SStrongtrong RRisk/Returnisk/Return PProfilerofile Compared to EComparedmerging M toa rEmergingkets Bond Marketss and G loBondsbal Bo andnds Global Bonds

Global Sukuk Index vs. Emerging Markets Bond and Global Bond Indexes, Risk vs. Return 3-Year Period Ended 31 March 2019

Emerging Markets Bond Index 4% Global Sukuk Index Global Bond Index 2% Average Annual Total Return Total Annual Average

-2% 1% 2% 3% 4% 5% 6% 7% 8% 9%

Annualised Standard Deviation (Risk)

Source: © 2019 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. Sukuk Bonds are represented by the Dow Jones Sukuk Index; Emerging Markets Bonds are represented by the JP Morgan EMBI Plus Index; Global Bonds are represented by the JP Morgan Global Government Bond Index. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. Important data provider notices and terms available at www.franklintempletondatasources.com. Past performance is not an indicator or a guarantee of future performance. For professional investor use only. Not for distribution to retail investors. 16 5990

Franklin Global Sukuk Fund

GGloballobal SSukukukuk H Haveave PProvidedrovided DDownsideownside PProtectionrotection

Apart from the Global Financial Crisis, Global Sukuk Have Experienced Less Downside Risk Compared to Major Global Fixed Income Benchmarks Over the Past 10 Years

Drawdown 4/2009 to 3/2019

0.0

-2.0

-4.0

-6.0

-8.0

-10.0

-12.0

-14.0

-16.0

-18.0

-20.0 Jul-14 Apr-16 Apr-09 Oct-12 Jun-10 Jan-11 Jun-17 Jan-18 Feb-15 Mar-12 Mar-19 Sep-15 Nov-16 Nov-09 Aug-11 Dec-13 Aug-18 May-13

Bloomberg Barclays Global Aggregate Bloomberg Barclays US Aggregate Bloomberg Barclays Euro Aggregate JP Morgan EMBI + Dow Jones Sukuk

For professional investor use only. Not for distribution to retail investors. 17 1656

Franklin Global Sukuk Fund

EExponentialxponential GGrowthrowth iinn AAnnualnnual GGloballobal SSukukukuk I Issuancessuance

Over US$477 Billion to Date

Annual Global Sukuk Issuance As of 31 December 2018 $60,000

$50,000

$40,000

$30,000 US$ Million

$20,000

$10,000

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

GCC Asia Other

Source: Bloomberg LP as of 31 December 2018. Data excludes short-term issuance. For professional investor use only. Not for distribution to retail investors. 18 2913

Franklin Global Sukuk Fund

TThehe GGloballobal SukukSukuk M Marketarket HHasas GGrownrown iinn SSizeize aandnd DiversityDiversity

2000 2005 2010 2018

 Environmental Control 45.62%  Electric 14.46%  Sovereign 24.16%  Sovereign 24.37%  Commercial Services 13.85%  Diversified Financial Services 11.66%  Banks 13.00%  Diversified Financial Services 16.34%  Water 12.00%  Commercial Services 11.36%  Diversified Financial Services 12.84%  Banks 12.50%  Electric 11.33%  Multi-National 9.71%  Engineering & Construction 12.33%  Electric 8.46%  Transportation 10.67%  Sovereign 8.32%  Electric 11.83%  Multi-National 7.97%  Real Estate 4.41%  Leisure Time 7.63%  Telecommunication Services 8.12%  Real Estate 6.46%  Engineering & Construction 2.12%  Engineering & Construction 6.79%  Multi-National 6.05%  Commercial Services 3.52%  Water 3.79%  Real Estate 3.49%  Transportation 3.19%  Banks 3.67%  Commercial Services 3.17%  Holding Companies-Divers 2.94%  Private Equity 2.92%  Transportation 2.28%  Investment Companies 2.59%  Commodity Fund 2.77%  Gas 1.18%  Chemicals 1.93%  Auto Manufacturers 2.52%  Agriculture 0.96%  Airlines 1.24%  Real Estate 1.95%  Auto Manufacturers 0.23%  REITS 1.15%  Telecommunication Services 1.92%  Oil & Gas Services 0.14%  Water 1.09%  Iron/Steel 1.84%  Chemicals 0.13%  Engineering & Construction 1.07%  Holding Companies—Diversified 1.84%  REITs 0.06%  Telecommunications 0.95%  Oil & Gas 1.64%  Software 0.02%  Oil & Gas 0.94%  Agriculture 1.56%  Healthcare-Services 0.93%  Computers 1.18%  Auto Manufacturers 0.89%  Oil & Gas Services 0.92%  Energy-Alternate Sources 0.59%  Auto Parts & Equipment 0.47%  Forest Products&Paper 0.35%  Apparel 0.36%  Retail 0.20%  Miscellaneous Manufacturers 0.26%  Oil & Gas Services 0.13%  Lodging 0.18%  Computers 0.12%  Electrical Compo & Equipment 0.11%  Iron/Steel 0.06%  Pharmaceuticals 0.09%  Agriculture 0.02%  Retail 0.07%  Environmental Control 0.01% US$1.5 billion US$39.5 billion US$134.0 billion US$490.6 billion New Issuances: 107 New Issuances: 262 New Issuances: 189 New Issuances: 506 Source: Bloomberg LP as of 31 December 2018. For professional investor use only. Not for distribution to retail investors. 19 1657

Franklin Global Sukuk Fund

GGloballobal SSukukukuk I Issuesssues AArere IIncreasinglyncreasingly LLarger,arger, LListedisted aandnd LLiquidiquid

Annual Global Sukuk Issuance Annual Global Sukuk Issuance Number of Issues over US$500 Million Number of Issues over US$1 Billion As of 31 December 2018 As of 31 December 2018

30 14

12 25

10 20

10 4

5 2

0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

GCC Asia Other GCC Asia Other

Source: Bloomberg LP as of 31 December 2018. Data excludes short-term issuance. For professional investor use only. Not for distribution to retail investors. 20 5096

Franklin Global Sukuk Fund

PPortfolioortfolio TThemes:hemes: GlobalGlobal SukukSukuk Q2Q2 20192019

Benchmark Rates Currencies Neutral, Long Non-Dollar Duration The US Dollar Looks Expensive • Relative positioning more neutral after Fed pivot and yield curve shift lower. • Dollar strength in Q1 2019 is somewhat perplexing given the strength of risk • Expectations remain for broadly stable rates with risks tilted slightly to the assets generally. downside if inflation and structural reform in the US disappoint. Consumer • Disconnect between rates and foreign currency markets. The former has priced spending is expected to remain robust. in the end of the US Fed’s rate hike cycle while the latter seems to be more • The US and developed markets still have to contend with structural issues focused on risk aversion. including massive debt stock, low labour productivity, aging populations and • We continue to find value in some EM currencies. We also expect the euro to modest growth. benefit from recoveries in China and global trade. Fund maintains • We are still constructive on emerging market local rates, including Malaysia, approximately 10% in non-USD currencies. Indonesia and Nigeria, with high real rates and accommodative policy frameworks.

Credit Oil Price Valuations Less Attractive OPEC Under Increasing Pressure • Geopolitical risks remain elevated in the Gulf Cooperation Council (GCC), with a • Technical backdrop deteriorating with shorts being built and inventories more pronounced downside to country risk. increasing. Tactical outlook more cautious. • Sukuk valuations less attractive after recent rally. • Prices should be supported by OPEC cuts, geopolitical risks and rising cost • GCC and Asian corporates have maintained solid credit quality, highlighted by a structure in tight oil. continued trend in stable or upgraded ratings. • We see the OPEC deal between members and non-members persisting with • We anticipate banks to benefit from improving liquidity conditions into 2019, with compliance remaining robust, even if deteriorating from 135% compliance in solid profitability and capitalisation to remain key strengths. Turkey the March 2019. exception. • Fiscal consolidation and reform-oriented agendas may be at risk with higher oil • Portfolio risk on a declining trend. Shift to higher yielding corporate issuers in prices and pressure to stimulate growth. the GCC and emerging market sovereigns subject to relative value discipline.

Opinions expressed are as of 30 April 2019, and are subject to change without prior notice. This is not investment advice, and is not a complete analysis of every material fact regarding any security, sector, portfolio, strategy or market. Source: Franklin Templeton Investments. For professional investor use only. Not for distribution to retail investors. 21 5101

Franklin Global Sukuk Fund

TTrailingrailing AAllocationsllocations

Franklin Global Sukuk Fund

Geographic Allocations Sector Allocations As of 31 March 2019 As of 31 March 2019 100% 100%

90% 90%

80% 80%

70% 70%

60% 60%

50% 50%

40% PortfolioPercent of 40% Percent of PortfolioPercent of

30% 30%

20% 20%

10% 10%

0% 0% 2012 2013 2014 2015 2016 2017 2018YTD 2019 2012 2014 2015 2016 2017YTD 2019 Hong Kong Indonesia Malaysia Pakistan Cash & Cash Equivalents Corporate Bonds Turkey United Kingdom Cayman Islands Bahrain Kuwait Oman Qatar Saudi Arabia Government-Related Agencies Government-Related Sovereign and Others United Arab Emirates United States Others

The 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. 22 5101

Franklin Global Sukuk Fund

Trailing Allocations (continued)

Franklin Global Sukuk Fund

Currency Allocations Portfolio Duration vs. Benchmark As of 31 March 2019 As of 31 March 2019 100% 6.00

90%

5.50 80%

70% 5.00

60%

50% 4.50

Percent of PortfolioPercent of 40%

4.00 30%

20% 3.50 10%

0% 3.00 2012 2014 2015 2016 2017YTD 2019 2012 2014 2015 2016 2017YTD 2019 Chinese Yuan Indonesian Rupiah Malaysian Ringgit Singapore Dollar Euro Fund Benchmark British Pound Nigerian Naira Emirati Dirham US Dollar

Franklin Global Sukuk Fund

SStrategytrategy OOverviewverview

Investment Objectives1 • To maximise total investment return, consisting of a combination of profit income and capital appreciation, consistent with prudent investment management

Investment Universe • Focuses on fixed- and floating-rate Shariah-compliant securities issued by government, government-related and corporate entities • May include non-investment grade securities and allocations to both developed and emerging markets • Can invest up to 40% of its net assets in short-term instruments including Murabaha placements

Anticipated Sources of Value Added • May utilise three independent sources of alpha: – Profit rates – Currencies – Sovereign and corporate credit

1. The expected risk and return profile is provided solely to illustrate the manager’s expectations with respect to fund characteristics, based on the fund’s historical experience during normal market conditions. Thus, the characteristics do not take into account future market risks or changing economic conditions and are not a prediction or guarantee of future performance. An investor in the fund may experience significantly different risk and return characteristics, including greater volatility and lower returns than expected with the potential for loss of principal amounts invested. There is no assurance that the fund will achieve its investment objectives. As stated above, the fund is managed in a benchmark unconstrained manner. Past performance is not an indicator or a guarantee of future performance. For professional investor use only. Not for distribution to retail investors. 24 1659

Franklin Global Sukuk Fund

SSukukukuk I Investingnvesting wwithith aa GGloballobal AAssetsset MManagementanagement LLeadereader

Recognised Expertise in Managing Global Sukuk • Manages over US$2.24 billion in Shariah-compliant strategies • Named “Best Global Sukuk Fund Manager” – 2018 Award by Employees Provident Fund (EPF Malaysia) • Named “Best Islamic Asset Management House (Institutional) in Malaysia” by the Asset Triple A Islamic Finance Awards in 2017, 2018 and 2019 • Won “The Most Outstanding Islamic Fund Manager,” 14th KLIFF Islamic Finance Awards 2017

Access to a Well-Established, Integrated Platform • Global Sukuk Team is supported by the analysis and insight of a worldwide network of over 200 investment, trading and risk professionals

Extensive Shariah-Compliant Resources • Independent endorsement and regular monitoring by the Amanie International Shariah Supervisory Board

Broad Exposure to Global Sukuk Market Opportunities • Strong research coverage across global sukuk issuing markets conducted by sukuk specialists on the ground

As of 30 June 2019. For professional investor use only. Not for distribution to retail investors. 25 1661

Franklin Global Sukuk Fund

AAccessccess ttoo a WWell-Established,ell-Established, IntegratedIntegrated PlatformPlatform

A Worldwide Network of over 200 Fixed Income, Trading and Risk Professionals

 Calgary Fort Lauderdale  Edinburgh  Chennai  Dublin New York  Frankfurt  Hong Kong  Rancho Cordova Short Hills  London  Hyderabad  San Mateo Stamford  Luxembourg  Kuala Lumpur  Poznan  Mumbai  Seoul  Dubai  Singapore  Mexico City

 São Paulo

 Melbourne

 Fixed Income Research Offices  Trading Platforms  Risk Management Specialists

As of 31 March 2019. For professional investor use only. Not for distribution to retail investors. 26 1662

Franklin Global Sukuk Fund

GGloballobal SSukukukuk S Specialistspecialists oonn thethe GroundGround

TOP-DOWN RESEARCH

Franklin Templeton Fixed Income Policy Committee Franklin Templeton 17 Investment Professionals – Average Experience: 29 Years Investments well-established, integrated global platform

Global Sukuk Team Global Trading Franklin Templeton (Dubai, Kuala Lumpur, San Mateo, Hyderabad) Fixed Income 8 Investment Professionals – Average Experience: 14 Years Risk Management Resources Over 160 Fixed Income

Professionals Compliance Templeton Franklin Templeton Fixed Income Group Global Sukuk Global Macro Team Technology Global Corporate Local Asset Bank Loans Municipals Quantitative Global Sovereign Sovereign/ Credit Management 14 30 Analysis Local Emerging Emerging 32 39 Professionals Professionals Team Market Debt Markets Professionals Professionals 6 18 Professionals Product 14 Professionals Management Professionals

Access to global insights and expertise of investment professionals in different fixed income sector teams and supported by a well-established, integrated global platform. BOTTOM-UP RESEARCH

As of 30 June 2019. Please note that investment professionals mentioned on this page may participate in different functions. For professional investor use only. Not for distribution to retail investors. 27 1663

Franklin Global Sukuk Fund

AAnn EExperienced,xperienced, TTenuredenured TTeameam

Franklin Templeton Global Sukuk Fund Team

Dino Kronfol Sharif Eid Chief Investment Officer, Global Sukuk and Portfolio Manager—Fixed Income MENA Fixed Income, Portfolio Manager Years with Firm: 10 Years with Firm: 12 Years of Experience: 12 Years of Experience: 23 Franck Nowak Hanifah Hashim Ivy Choo Vice President Executive Director, Head Malaysian Fixed Research Analyst—Fixed Income Research Analyst—Fixed Income Income & Sukuk Portfolio Manager Years with Firm: 8 Years with Firm: 6 Years with Firm: 7 Years of Experience: 14 Years of Experience: 14 Years of Experience: 25

Daniel Koh Amit Jain Rakesh Tripathi Research Analyst—Fixed Income Research Analyst—Fixed Income Research Analyst—Fixed Income Years with Firm: 4 Years with Firm: 5 Years with Firm: 2 Years of Experience: 11 Years of Experience: 11 Years of Experience: 2

ADDITIONAL RESOURCES Bank Loans Corporates—High Yield Corporates—Investment Grade Global Fixed Income Members: 14 Members: 19 Members: 14 Members: 32 Local Asset Management1 MBS Municipals Quantitative Members: 39 Members: 9 Members: 30 Members: 6 PRODUCT MANAGERS Stuart Lingard Alberto Landi Years of Experience: 21 Years of Experience: 11

1. 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 part of, but does share research with, Franklin Templeton Fixed Income Group. As of 30 June 2019. For professional investor use only. Not for distribution to retail investors. 28 1643

Franklin Global Sukuk Fund Amanie International Shariah Supervisory Board Amanie International Shariah Supervisory Board

SHEIKH DR. MOHAMED ALI ELGARI DR. MUHAMMAD AMIN ALI QATTAN CHAIRMAN Kuwait Kingdom of Saudi Arabia

Dr. Mohamed Ali Elgari is a Professor of Islamic Economics and the former Director of the Centre for Dr. Muhammad Amin Ali Qattan has a Ph.D. in Islamic Banking from Birmingham University and is Research in Islamic Economics at King Abdul Aziz University in Saudi Arabia. He is an advisor to himself a lecturer as well as a prolific author of texts and articles on Islamic economics and finance. many Islamic financial institutions throughout the world and is also on the Shariah board of the Dow He currently is the Director of Islamic Economics Unit, Centre of Excellence in Management at Jones Islamic index. He is also a member of the Islamic Fiqh Academy as well as the Islamic Kuwait University. Dr. Qattan also serves as the Shariah adviser to many reputable institutions Accounting and Auditing Organisation for Islamic Financial Institution (AAOIFI). Dr. Elgari has written such as Ratings Intelligence, Standard & Poor’s Shariah indices, Al Fajer Retakaful, amongst several books on Islamic banking. He graduated from the University of California with a Ph.D. in others. He is a highly regarded Shariah scholar and is based in Kuwait. Economics.

DR. MOHD DAUD BAKAR DR. OSAMA AL DEREAI Malaysia Qatar

Dr. Mohd Daud Bakar is the founder and group chairman of Amanie Advisors, a global boutique Dr. Osama Al Dereai is a Shariah scholar from Qatar. He has extensive experience in teaching, Shariah advisory firm with offices located in Kuala Lumpur, Dubai, Luxembourg, Cairo, Kazakhstan, consulting and research in the field of Islamic finance. He received his bachelor’s degree Oman, Australia, South Korea and Dublin. He is also the founder and chairman of Amanie Nexus specialising in the Science of Hadeth Al Sharef from the prestigious Islamic University of Madinah Sdn Bhd (Kuala Lumpur). Prior to this, he was the deputy vice-chancellor at the International Islamic (Saudi Arabia). He obtained his master’s degree from the International Islamic University Malaysia University Malaysia. He received his first degree in Shariah from University of Kuwait in 1988 and and was later conferred his Doctorate in Islamic Transactions from the University of Malaya. Dr. Al obtained his Ph.D. from University of St. Andrews, United Kingdom in 1993. In 2002, he went on to Dereai is a Shariah board member of various financial institutions which include the First Leasing complete his external Bachelor of Jurisprudence at University of Malaya. He has published a Company, Barwa Bank, First Investment Company and Ghanim Al Saad Group of Companies number of articles in various academic journals and has made many presentations in various amongst others. conferences both local and overseas. Dr. Mohd Daud is currently the chairman of the Shariah Advisory Council of the Central Bank of Malaysia, the SACSC and the Shariah Supervisory Council of Labuan Financial Services Authority. He is also a member of the Shariah Board of Dow Jones Islamic Market Index (New York), Oasis Asset Management (Cape Town, South Africa), The National Bank of Oman, Financial Guidance (USA), BNP Paribas (Bahrain), Morgan Stanley (Dubai), Jadwa-Russell Islamic Fund (Kingdom of Saudi Arabia), Bank of London and Middle East (London), Noor Islamic Bank (Dubai), Islamic Bank of Asia (Singapore), and in other financial institutions both local and abroad. Apart from that, Dr. Mohd Daud is also actively advising, locally and overseas, on capital markets product structuring such as sukuk.

For professional investor use only. Not for distribution to retail investors. 29 1664

Franklin Global Sukuk Fund

FFatwaatwa

Issued on the Franklin Global Sukuk Fund on 30 September 2011 and issued quarterly thereafter

For professional investor use only. Not for distribution to retail investors. 30 1665

Franklin Global Sukuk Fund

IInvestmentnvestment PPhilosophyhilosophy

We believe: • The Global Sukuk team uses a fundamental research-driven investment approach. • That while various factors can cause markets and securities to trade independently of their underlying fundamentals for periods of time, markets are efficient in the longer-term. We assign significant resources to identify and exploit these inefficiencies. • An actively managed portfolio of lowly-correlated positions, selected on the basis of intensive bottom-up research, and guided by top-down macroeconomic analysis, has the potential to deliver above-benchmark returns over a full market cycle. We aim to manage volatility and downside risk by ensuring that no single position or risk factor dominates the portfolio. • Our approach benefits from Franklin Templeton’s global asset management platform, with institutional-quality capabilities supporting portfolio management, trading, and risk management.

For professional investor use only. Not for distribution to retail investors. 31 1666

Franklin Global Sukuk Fund

SSukukukuk I Investmentnvestment PProcessrocess

Multiple Research Perspectives Can Lead to High-Conviction Sukuk Opportunities

Three Research Three Potential Portfolio Construction & Perspectives Alpha Sources Implementation

Macroeconomic Country Analysis Risk • Currency and Profit Rate Models Management • Identifies Market Inefficiencies Profit Rates Ideas Bottom-Up Credit Analysis Portfolio Identification of Management GLOBAL SUKUK • Fundamental Credit Research Credit Ideas High-Conviction • Proprietary Credit Models Sukuk Opportunities Portfolio Optimisation PORTFOLIO

Currency Ideas Quantitative Analysis • Risk Mapping of Sukuk Universe Trading • Quantitative Risk Analyses

Full Integration of Amanie Int’l Shariah Supervisory Board Ongoing Portfolio Monitoring by Risk Management and Compliance

For professional investor use only. Not for distribution to retail investors. 32 1668

Franklin Global Sukuk Fund

BBroadroad EExposurexposure ttoo GGloballobal SukukSukuk MarketMarket OpportunitiesOpportunities

Broad Research Coverage across Sukuk Issuing Markets • Regular analysis of 130 credits with the ability to expand the research along with the rapid market growth

Non-Financials Corporates/  56 Industrial/Holdings/Real Estate  Financials 48  Sovereigns 26

• Extensive resources of a global asset management leader allow research of rated and unrated securities within the sukuk universe worldwide with the goal to identify alpha-generating sukuk opportunities • The result is a diversified portfolio with over 52 sukuk securities from 12 countries and supranational entities

Strong Relationships with Sukuk Issuers • Only global asset manager with Islamic investment specialists on the ground in major sukuk issuing markets, such as Dubai and Kuala Lumpur, with great insight into issuances • First and only global asset manager with a dedicated MENA trading desk in Dubai

First Global Sukuk Fund Available for European Retail Investors

As of 31 March 2019. For professional investor use only. Not for distribution to retail investors. 33 5098

Franklin Global Sukuk Fund

IIntegratedntegrated RRiskisk MManagementanagement HHasas TThreehree DDifferentifferent LLayersayers

Multiple Teams Review the Portfolio Seeking to Ensure Consistency and Compliance with Prospectus and Objectives

In-Depth Research and Quantitative Risk Analysis Investment Risk Management Group1 Portfolio Compliance

• Provides risk data related to country, currency, • Examines and assesses portfolio risk relative to • Performs pre-trade compliance for all trades sector, industry, yield curve and issuer positions a benchmark entered into the Charles River IMS on a daily basis • Generates potential trade ideas for portfolio • Estimates risk and correlation impact on portfolio when positions are added or removed • Utilises ex-post trading tools to ensure the • Generates monthly security-specific and portfolio compliance with stated Prospectus, performance attributions • Generates risk reports used by portfolio objectives and restrictions on a daily and managers and analysts across the fixed income • Creates historical return summaries for all asset monthly basis platform classes • Utilises Shariah compliance protocol for existing • Oversees the maintenance and reliability of and new issues with Amanie advisors firm-wide fixed income investment risk reporting tools • Employs Sukuk screening technology from Ideal Ratings for customised Sukuk structure • Maps Sukuk to appropriate risk factors to governance and compliance generate reports • Develops and monitors strategy specific risk framework

6 Investment Professionals 47 Risk Consultants and Analysts 57 Investment Professionals 16 Average Years of Experience 13 Average Years of Experience 10 Average Years of Experience 1 Location 12 Locations 12 Locations

As of 30 June 2019. 1. Investment Risk Management Group—an independent team of risk specialists reporting directly to the CEO—performs a risk oversight function and can consult with the portfolio manager to provide unbiased risk insights. For professional investor use only. Not for distribution to retail investors. 34 5467

Franklin Global Sukuk Fund

GGloballobal SSukukukuk | RRiskisk FFrameworkramework

Risk Framework Philosophy: Customised Set of Internal Risk Guidelines: As the market developed, we have adopted a set of specific risk guidelines • Not hard limits or constraints for the strategy which were designed collaboratively to enhance oversight • May be breached during abnormal market conditions and information sharing. The risk guidelines include risk measurements across three dimensions: • Common metrics for the portfolio management and risk 1. Absolute and relative volatility limits. management teams to monitor exposures 2. Risk budget limits for five risk factors. • Used as a discussion tool to ensure that the strategy’s risk exposures align with our conviction 3. Expected exposure ranges to various asset types. • Used as a management reporting tool

Risk Estimates: Min Sample Max Warning Bar Check 38% TEV in bps/year 140 201 300 • TEV is the strategy’s risk budget for the year VaR 99% in bps/month 0 160 300 53% • Value at Risk is used to approximate downside risk ES 99% in bps/month 0 207 350 59% • Estimated shortfall is used to measure tail risk (in excess of VaR) Risk Budget by Factor: Contribution to Total Volatility Range Spread Credit 14% 60% 14% Curve 5% 40% 13% We budget risk among the different risk factors. The Foreign Exchange 19% 40% 48% strategy is geared towards credit risk with constraints Idiosyncratic & Credit Default 61% 50% 122% for FX and duration risk.

Exposures/Sensitivities: Exposure Range DTS, or duration times spread, is a more accurate DTS ratio (Portfolio/Benchmark) 0.75 1.22 1.75 47% measure of risk that takes into account the maturity as Non-USD unhedged exposure per currency (MV%) 5% 5% 94% well as the credit spread of each issue or issuer. Non-USD unhedged exposure cumulative (MV%) 8% 20% 41% Portfolio overall DTS % contribution from sector (unit is %) 39% 35% 113% Portfolio overall DTS % contribution from High Yield Sukuk (unit is %) 13% 40% 33% Risk guideline levels are not hard limits, but are used Market Value % of High Yield Sukuk 13% 25% 52% internally to ensure that risks are recognized and Net Option Adjusted Duration (with respect to BM in years) -2 0% 2% 54% intentional. Market Value of illiquid positions 2% 4% 50% These are only a partial sample of the risk exposures tracked on a daily basis. For illustrative and discussion purposes only. This screenshot is not representative of the fund.

For professional investor use only. Not for distribution to retail investors. 35 Franklin Global Sukuk Fund

Fund Characteristics

For professional investor use only. Not for distribution to retail investors. 36 Franklin Global Sukuk Fund

Summary

Franklin Global Sukuk Fund - A (acc) USD As of 30 June 2019 Summary of Investment Objective Morningstar Category™ Islamic Global Bond To maximise, consistent with prudent investment management, total investment Investment Style Fixed Income return, consisting of a combination of profit income and capital appreciation. The Fund seeks to achieve this objective by investing principally in a portfolio of fixed- and Fund Inception Date 10 September 2012 floating-rate Shariah-compliant securities (including non-investment grade securities), Share Class Inception Date 10 September 2012 including Sukuk, Murabaha and Wakala placements and other short-term instruments Benchmark Dow Jones Sukuk Index issued by government, government-related and corporate entities located in developed and developing countries. Base Currency for Fund USD Base Currency for Share Class USD Portfolio Manager(s) Total Net Assets (USD) 136,133,181.22 Mohieddine (Dino) Kronfol U. Arab Emir. Asset Allocation Fixed Income: 98.40% Sharif Eid U. Arab Emir.

Cash & Cash Equivalents: 1.60% Fund Identifiers Number of Holdings 50 ISIN Code LU0792756115 Total Expense Ratio 1.50% SEDOL Code B7PXZP2 Bloomberg Code FTGSAAU LX

Fund Ratings (30 June 2019) Overall Morningstar Rating™ ««

© Morningstar, Inc. 2019. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details. Past performance is not an indicator or a guarantee of future performance. For professional investor use only. Not for distribution to retail investors. 37 Franklin Global Sukuk Fund

What are the Key Risks?

The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments. The Fund invests mainly in Shariah-compliant debt securities, including Sukuk and short-term instruments of any quality issued by entities located in developed and emerging markets. Such securities have historically been subject to price movements, generally due to the supply and demand for financing, other market factors or movements in the Sukuk market. As a result, the performance of the Fund can fluctuate moderately over time. Other significant risks include: emerging markets risk, derivatives risk, counterparty risk, liquidity risk, Sukuk risk, Shariah compliance risk. For full details of all of the risks applicable to this Fund, please refer to the “Risk Considerations” section of the Fund in the current prospectus of Franklin Templeton Investment Funds.

For professional investor use only. Not for distribution to retail investors. 38 Franklin Global Sukuk Fund

Portfolio Characteristics

Franklin Global Sukuk Fund vs. Dow Jones Sukuk Index As of 30 June 2019 Portfolio Index Average Credit Quality BBB+ A Average Duration 5.53 Yrs 4.95 Yrs Average Weighted Maturity 7.16 Yrs 5.99 Yrs Yield to Maturity 4.64% 3.15% Yield to Worst 4.64% 3.14%

Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. The average credit quality (ACQ) rating may change over time. The portfolio itself has not been rated by an independent rating agency. The letter rating, which may be based on bond ratings from different agencies (or internal ratings for unrated bonds, cash and equivalents), is provided to indicate the average credit rating of the portfolio's underlying investments and generally ranges from AAA (highest) to D (lowest). For unrated bonds, cash and equivalents, ratings may be assigned based on the ratings of the issuer, the ratings of the underlying holdings of a pooled investment vehicle, or other relevant factors. The ACQ is determined by assigning a sequential integer to all credit ratings AAA to D, taking a simple, asset-weighted average of investments by market value and rounding to the nearest rating. The risk of default increases as a bond's rating decreases, so the ACQ provided is not a statistical measurement of the portfolio’s default risk because a simple, weighted average does not measure the increasing level of risk from lower-rated bonds. The ACQ may be lower if cash and equivalents are excluded from the calculation. The ACQ is provided for informational purposes only. Derivative positions are not reflected in the ACQ. 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. For professional investor use only. Not for distribution to retail investors. 39 Franklin Global Sukuk Fund

Geographic Allocation

Franklin Global Sukuk Fund vs. Dow Jones Sukuk Index As of 30 June 2019

Portfolio % Index % Over/Under % MIDDLE EAST / AFRICA 67.18 57.61 9.57 United Arab Emirates 33.80 24.82 8.99 Saudi Arabia 14.43 26.22 -11.78 Middle East / Africa Qatar 8.21 5.95 2.26 Kuwait 4.11 0.63 3.48 Nigeria 3.51 0.00 3.51 Bahrain 1.78 0.00 1.78 Oman 1.34 0.00 1.34 Asia ex-Japan ASIA 26.33 28.73 -2.40 ASIA EX-JAPAN 26.33 28.73 -2.40 Indonesia 17.74 19.31 -1.57 Malaysia 4.14 8.14 -4.00 Hong Kong 2.65 1.27 1.38 Non-EMU Europe Pakistan 1.79 0.00 1.79 EUROPE 1.11 0.00 1.11 NON-EMU EUROPE 1.11 0.00 1.11 Turkey 0.71 0.00 0.71 Supranational United Kingdom 0.40 0.00 0.40 SUPRANATIONAL 3.78 13.66 -9.88 CASH & CASH EQUIVALENTS 1.60 0.00 1.60

Cash & Cash Equivalents

0% 35% 70%

Franklin Global Sukuk Fund Dow Jones Sukuk Index

Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. For professional investor use only. Not for distribution to retail investors. 40 Franklin Global Sukuk Fund

Currency Allocation

Franklin Global Sukuk Fund vs. Dow Jones Sukuk Index As of 30 June 2019

Portfolio % Index % Over/Under % NORTH AMERICA 91.78 100.00 -8.22 U.S. DOLLAR 91.78 100.00 -8.22 MIDEAST/AFRICA 3.51 0.00 3.51 Nigerian Naira 3.51 0.00 3.51 U.S. Dollar EUROPE 2.57 0.00 2.57 EURO 2.57 0.00 2.57 ASIA 2.14 0.00 2.14 ASIA EX-JAPAN 2.14 0.00 2.14 Indonesian Rupiah 2.14 0.00 2.14

Nigerian Naira

Euro

Indonesian Rupiah

0% 20% 40% 60% 80% 100% Franklin Global Sukuk Fund Dow Jones Sukuk Index

Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. For professional investor use only. Not for distribution to retail investors. 41 Franklin Global Sukuk Fund

Sector Allocation

Franklin Global Sukuk Fund vs. Dow Jones Sukuk Index As of 30 June 2019

Portfolio % Index % Over/Under % Government-Related Sovereign 33.93 47.36 -13.43 Government-Related Agencies 22.66 22.05 0.61 Government-Related Sovereign Corporate Industrials 17.57 3.81 13.76 Corporate Financial Institutions 14.81 13.13 1.68 Treasury 5.65 0.00 5.65 Government-Related Agencies Government-Related Supranational 3.78 13.66 -9.88 Cash & Cash Equivalents 1.60 0.00 1.60

Corporate Industrials

Corporate Financial Institutions

Treasury

Government-Related Supranational

Cash & Cash Equivalents

0% 10% 20% 30% 40% 50% Franklin Global Sukuk Fund Dow Jones Sukuk Index

Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. For professional investor use only. Not for distribution to retail investors. 42 Franklin Global Sukuk Fund

Credit Quality Allocation

Franklin Global Sukuk Fund vs. Dow Jones Sukuk Index As of 30 June 2019 Portfolio % Index % Over/Under % AAA 2.57 12.07 -9.50 AAA AA 3.05 7.50 -4.44 A 31.07 50.33 -19.25 AA BBB 34.95 30.11 4.84 BB 4.12 0.00 4.12 A B 11.24 0.00 11.24 D 0.71 0.00 0.71 NR 10.69 0.00 10.69 BBB Cash 1.60 0.00 1.60 Investment Grade 71.65 100.00 -28.35 BB Non-Investment Grade 26.75 0.00 26.75 Cash 1.60 0.00 1.60 B

Cash

0% 15% 30% 45% 60% Franklin Global Sukuk Fund Dow Jones Sukuk Index

Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. Ratings shown are assigned by one or more Nationally Recognised Statistical Rating Organisations (‘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. The NR category consists of rateable securities that have not been rated by an NRSRO. Cash includes equivalents, which may be rated. For professional investor use only. Not for distribution to retail investors. 43 Franklin Global Sukuk Fund

Maturity Allocation

Franklin Global Sukuk Fund vs. Dow Jones Sukuk Index As of 30 June 2019

Portfolio % Index % Over/Under % 0 to 1 Year 5.31 0.00 5.31 1 to 2 Years 9.04 7.49 1.54 0 to 1 Year 2 to 3 Years 5.70 17.72 -12.02 3 to 5 Years 19.29 27.34 -8.05 5 to 7 Years 24.21 17.60 6.61 1 to 2 Years 7 to 10 Years 27.98 25.78 2.21 20 to 30 Years 8.47 4.07 4.41 2 to 3 Years

3 to 5 Years

5 to 7 Years

7 to 10 Years

20 to 30 Years

0% 8% 16% 24% 32%

Franklin Global Sukuk Fund Dow Jones Sukuk Index

Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change. For professional investor use only. Not for distribution to retail investors. 44 Franklin Global Sukuk Fund

Top Ten Holdings

Franklin Global Sukuk Fund As of 30 June 2019

Security Name % of Total Perusahaan Penerbit SBSN Indonesia III, senior note, Reg S, 4.40%, 3/01/28 6.79 Perusahaan Penerbit SBSN Indonesia III, Reg S, 4.55%, 3/29/26 4.03 KSA Sukuk Ltd., senior bond, Reg S, 3.628%, 4/20/27 3.68 Nile Delta Sukuk Ltd., secured note, Reg S, 4.00%, 10/31/20 3.55 FGN Roads Sukuk Co. 1 PLC, senior note, 16.47%, 9/26/24 3.51 Perusahaan Penerbit SBSN Indonesia III, senior note, Reg S, 4.325%, 5/28/25 3.43 Equate Sukuk SPC Ltd., senior note, Reg S, 3.944%, 2/21/24 3.41 Aldar Sukuk Ltd., senior note, Reg S, 4.75%, 9/29/25 3.14 Malaysia Sukuk Global Bhd., Reg S, 4.08%, 4/27/46 2.97 Saudi Electricity Global Sukuk Co. 3, senior bond, Reg S, 5.50%, 4/08/44 2.79 Total 37.28

The Ten Largest Holdings represent the ten largest holdings of the fund as of the date indicated. These securities do not represent all of the securities purchased, sold or recommended for advisory clients, and the reader should not assume that investment in the securities listed was or will be profitable. All portfolio holdings are subject to change. The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the top 10 holdings list. For professional investor use only. Not for distribution to retail investors. 45 Franklin Global Sukuk Fund

Discrete Performance

Franklin Global Sukuk Fund - A (acc) USD As of 30 June 2019 Discrete Annual Performance (%)

Inception 06/18 06/17 06/16 06/15 06/14 Date 06/19 06/18 06/17 06/16 06/15 Franklin Global Sukuk Fund - A (acc) USD—Net of Fees 10.9.2012 7.82 -1.24 1.17 1.64 0.36

Dow Jones Sukuk Index 8.77 -0.17 2.91 4.36 3.35

All performance data shown is in the Fund currency stated and net of management fees. Sales charges and other commissions, taxes and other relevant costs paid by the investor are not included in the calculations. Performance data may represent blended share class performance, e.g., hybrid created from an A (dis) share class which was converted to A (acc). The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details. When performance for either the portfolio or its benchmark has been converted, different foreign exchange closing rates may be used between the portfolio and its benchmark. The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance is not an indicator or a guarantee of future performance. Current performance may differ from figures shown. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, performance may also be affected by currency fluctuations. Please visit www.franklinresources.com/countries for current performance. For professional investor use only. Not for distribution to retail investors. 46 Franklin Global Sukuk Fund

Historical Performance

Franklin Global Sukuk Fund - A (acc) USD As of 30 June 2019 Annualised Total Returns (%)

Inception Since Date 1 Yr 3 Yrs 5 Yrs Incept Franklin Global Sukuk Fund - A (acc) USD—Net of Fees 10.9.2012 7.82 2.51 1.91 2.70

Dow Jones Sukuk Index 8.77 3.77 3.80 3.70

Cumulative Performance (%)

Inception Since Date 1 Mth 3 Mths YTD 1 Yr 3 Yrs 5 Yrs Incept Franklin Global Sukuk Fund - A (acc) USD—Net of Fees 10.9.2012 1.70 3.10 7.44 7.82 7.73 9.90 19.90

Dow Jones Sukuk Index 1.54 3.17 7.03 8.77 11.74 20.52 28.05

Calendar Year Returns

Franklin Global Sukuk Fund - A (acc) USD As of 30 June 2019

7.72 8% 7.44 7.03 6.37

5% 4.47 4.35 3.76

2% 1.24 1.37

-2.53 0.12 -1.12 -0.19 0.22

-1%

-4% YTD 2019 2018 2017 2016 2015 2014 2013

Franklin Global Sukuk Fund - A (acc) USD—Net of Fees Dow Jones Sukuk Index

Performance Risk Statistics

Franklin Global Sukuk Fund - A (acc) USD As of 30 June 2019 Performance Risk Statistics 1 Yr 3 Yrs* 5 Yrs* Standard Deviation (%): Franklin Global Sukuk Fund - A (acc) USD 3.01 3.41 3.16 Dow Jones Sukuk Index 2.20 2.38 2.38 Tracking Error (%)^^ 1.19 2.04 1.97 Information Ratio^^ -0.79 -0.62 -0.96 Beta^^ 1.30 1.16 1.03 Sharpe Ratio 1.85 0.33 0.33

The base currency of a fund determines the risk-free rate index used in calculating certain risk statistics on this page. A fund that is based in USD uses the US T-Bill Index as the risk free rate return, a EUR-based fund uses the Euro 3-Month T-Bill Index, a GBP-based fund uses the UK Treasury Bills 3 Month Index, a JPY-based fund uses the Japan Financing Bill 3 Month Index, and an AUD-based fund uses the Australia T-Note 3 Month Index. When performance for either the portfolio or its benchmark has been converted, different foreign exchange closing rates may be used between the portfolio and its benchmark. ^^Measured against the Dow Jones Sukuk Index. *Annualised. Past performance is not an indicator or a guarantee of future performance. For professional investor use only. Not for distribution to retail investors. 49 1669

Franklin Global Sukuk Fund

SSupplementalupplemental IInformationnformation

Franklin Global Sukuk Fund (the “Fund”) is a relatively new fund that has a short performance history. The following section reflects the historical performance of the Franklin Global Sukuk Composite (the “composite”) and is intended for supplemental information. From the composite inception to the present, the Franklin Global Sukuk Composite may include accounts that are managed by Franklin affiliates and sub-advised by Franklin Templeton Investments Middle East (ME), Limited (FTIME). FTIME provides non-binding, non-discretionary advice in connection with the Fund to Franklin Advisers, Inc., the investment manager of the Fund. FTIME is a separate firm which does not claim GIPS® compliance. Although the composite reflects a similarly managed strategy as the Fund, it reflects the performance of discretionary constituent separate account(s) and pooled investment vehicle(s) with daily, as well as, less frequent cash flows. Separate accounts and pooled investment vehicles are managed in accordance with an account’s specific guidelines and due to the regulatory and fee/expense structure differences between private accounts and funds, composite returns and fund returns will differ, sometimes significantly.

For additional information regarding the Fund or composite, please see the Important Disclosures and Composite Disclosures page.

For professional investor use only. Not for distribution to retail investors. 50 1669

Franklin Global Sukuk Fund

Supplemental Information Historical Performance

Franklin Global Sukuk Composite As of 31 March 2019 Annualised Total Returns (%) Since Inception Quarter 1 Year 3 Years 5 Years (30.09.2008)

Franklin Global Sukuk Composite—Gross of Fees (USD) 4.49 4.97 3.26 3.12 5.02

Franklin Global Sukuk Composite—Net of Fees (USD) 4.40 4.61 2.91 2.66 3.63

Dow Jones Sukuk Index (USD) 3.74 5.09 3.41 3.51 4.88

From the composite inception to the present, the Franklin Global Sukuk Composite may include accounts that are managed by Franklin affiliates and sub-advised by Franklin Templeton Investments Middle East (ME), Limited (FTIME). FTIME provides non-binding, non-discretionary advice in connection with Franklin Global Sukuk Fund (the “Fund”) to Franklin Advisers Inc., the investment manager of the Fund. FTIME is a separate firm which does not claim GIPS® compliance. Performance data is shown rounded to the nearest hundredth. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. When performance for either the portfolio or its benchmark has been converted, different foreign exchange closing rates may be used between the portfolio and its benchmark. Past performance is not an indicator or a guarantee of future performance. For professional investor use only. Not for distribution to retail investors. 51 Franklin Global Sukuk Fund

Appendix

For professional investor use only. Not for distribution to retail investors. 52 1672

Franklin Global Sukuk Fund

MMostost CCommonommon SSukukukuk I Instrumentsnstruments

Sukuk Type Nature of Product Uses Issues

Sukuk al-ijara Sale and leaseback Seen as “gold standard” Requires availability of fixed assets to the required value available for the life of the Sukuk

Sukuk al-wakala Agency basis, investor share fixed Used when portfolio of assets is used to Few objections, becoming more popular where support the Sukuk ijara not practical

Sukuk al-mudaraba Agency basis with profit share on agreed Used where originator does not own an Some issues where purchase undertakings exist ratio actual tangible asset caused decline in popularity

Sukuk al-musharaka Partnership agreement Buy back arrangements without which capital return cannot be guaranteed are problematic, leading to decline in popularity for this product

Sukuk al-istithmar Investment agency using a package of Elements of the package must not be debt products, at least 30% being asset instruments backed

Sukuk al-manafa’a Can be used where underlying assets are Airtime for telecoms companies or intangible passenger revenues of airlines

Sukuk al-istisna’a Contractual agreement for the sale of Good for infrastructure projects Underlying assets must be capable of goods to be produced in the future transformation by manufacture, with price and features agreed in advance

Sukuk al-murabaha Deferred payment agreement Used if originator lacks tangible Cannot be traded at a premium underlying assets. Quite often used as element in hybrid Sukuk

Ijara, hybrid wakala-mudaraba and murabaha are the most common Sukuk forms at present, with murabaha used mainly by banks as a buy-and-hold product

Source: Latham & Watkins | The Sukuk Handbook: A Guide To Structuring Sukuk June 2015 For professional investor use only. Not for distribution to retail investors. 53 1905

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GGrowingrowing GGloballobal SSukukukuk MMarketarket IIncreasinglyncreasingly DDiversified…iversified

As of 31 December 2018 …by Country (USD Millions) …by Structure (USD Millions) Kazakhstan 76 Guernsey 88 Sukuk Al Istisna'a Japan 100 2,484 Jordan 120 Ireland 151 China 171 Sukuk Al Mudarabah 29,098 France 222 Côte d'Ivoire 250 Luxembourg 268 Nigeria 277 Sukuk Al Musharakah 52,092 South Africa 500 United States of America 1,000 Kuwait 1,864 Singapore 2,166 Other 55,181 United Kingdom 2,197 Hong Kong 3,694 Pakistan 4,717 Oman 5,739 Sukuk Al-Wakala Bel-Istithma 76,807 Bahrain 6,146 Qatar 12,277 Turkey 14,374 Sukuk Al Ijara 85,288 Indonesia 19,613 Supranational 22,294 United Arab Emirates 57,215 Saudi Arabia 63,012 Sukuk Al Murabaha 102,528 Malaysia 184,945 0 30,000 60,000 90,000 120,000 150,000 180,000 0 20,000 40,000 60,000 80,000 100,000 120,000 …by Sector (USD Millions) …by Currency (USD Millions)

Technology 64 Australian Dollar 16 Japanese Yen 18 Diversified 6,071 Hong Kong Dollar 52 Jordanian Dinar 120 Basic Materials 6,741 Chinese Yuan Renminbi 236 Energy 10,372 West African CFA 250 Nigerian Nara 277 Communications 11,306 British Pound 540 Oman Rial 1,051 Consumer, Cyclical 17,508 Pakistani Rupee 1,717 Consumer, Non-cyclical 25,532 Indonesian Rupiah 2,651 Singaporean Dollar 2,679 Industrial 40,170 Turkey Lira 2,713 Utilities 46,918 Euro 3,058 UAE Dirham 5,691 Government 109,475 Saudi Riyal 40,071 U.S. Dollar 170,192 Financial 129,319 Malaysian Ringgit 172,145 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 0 40,000 80,000 120,000 160,000 200,000 Source: Bloomberg as of 31 December 2018. For professional investor use only. Not for distribution to retail investors. 54 5888

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Franklin Templeton—ESG and Corporate Sustainability

Guides How We Work • Our primary objective is to deliver exceptional investment management through an active fundamental approach…while always acting in the best interests of our clients and shareholders • As a fiduciary, we recognise that ESG considerations are a driver of long-term investment performance and thus affect our business and the companies we invest in • Our approach to ESG is one of the many strengths of our organisation ESG considerations at the corporate level that impact our business:

Environmental Impact Social Factors Governance Energy usage Diversity and inclusion Anti-money laundering Greenhouse gases Talent management Code of ethics/conduct (attracting, retaining top talent) Waste/recycling Compliance Charitable giving Water consumption Executive compensation Customer privacy and data security Enterprise risk management Employee volunteering ESG investment integration

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FFranklinranklin TTempletonempleton— Investments—ESGESG Investment P Investmenthilosophy Philosophy

Fully-Integrated, Economic-Based Approach

We embed ESG best practices and analytics in our investment processes, enhancing our traditional financial analysis—to open new investment opportunities, help mitigate risk and seek to enhance returns over the long term • Led by investment research teams to understand the long-term economic impact on securities • Supported by dedicated ESG team • Leveraging our robust investment risk management team

Investment Research & Analysis ESG considerations embedded in security evaluation processes Dedicated ESG Team Independent Risk Track trends and share Management industry best practices with Portfolio Construction & Management Integrate ESG analytics investment teams into fund reviews and risk reports

Investment Portfolios

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Franklin Global Sukuk Fund

FFranklinranklin TTempletonempleton IInvestmentss Committed Isto CommittedESG to ESG

Our dedicated specialist ESG team collaborates with the investment teams

Educate and engage to Evaluate ESG-related Enhance analysis by understand the impact and research practices and incorporating independent, scope of ESG considerations identify opportunities to unbiased ESG research and consult on emerging refine and deepen insights and analytics ESG issues

We are a signatory and an active participant

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Franklin Global Sukuk Fund

GGlossarylossary

Average Credit Quality: The credit rating of an Islamic bond is an assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities. The average credit quality of a fund reflects the holdings of the underlying issues, based on the size of each holding. Usually we quote the average credit quality as per Standard & Poor’s or Moody’s credit rating agencies. Average Duration: Also known as “effective” or “McCauley” duration, it is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in income. Duration is expressed as a number of years. It’s an indication of an issue’s coupon relative to its maturity. Rising income means falling Islamic bond prices; declining income means rising Islamic bond prices. The bigger the duration number, the greater the income risk (or reward for Islamic 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. Average Weighted Maturity: An estimate of the number of terms to maturity, taking the possibility of early payments into account, for the underlying holdings. Average life is calculated using the weighted average time to the receipt of all future cash flows for all holdings. Sometimes also known as “average maturity” for fixed-term products. The weighted average life of a fund reflects the maturity of the underlying issues, based on the size of each holding.

Current Yield: In general, yield is the annual rate of return for any investment and is expressed as a percentage. With Islamic bonds, yield is the effective rate of income paid on an Islamic bond, calculated by the coupon rate divided by the Islamic bond’s market price. Islamic bonds are typically issued with fixed coupon payments (regular cash payments of a fixed amount). Islamic bonds are typically valued in terms of the their yield—what dollar amount as coupon payments is received as compared to the Islamic bond’s current market price. For an Islamic 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 an Islamic bond if it is held until the maturity date. YTM is considered a long-term Islamic bond yield expressed as an annual rate. The calculation of YTM takes into account the current market price, par value, coupon income 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 Islamic 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.

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Important Disclosures

© 2019 Franklin Templeton Investments. All rights reserved. This document/marketing material is directed at Professional Clients. Franklin Templeton Shariah Funds (the “Fund”) is a Luxembourg registered SICAV. Source for data and information provided by Franklin Templeton Investments, is as of the date of this document, unless otherwise noted. Benchmark related data provided by FactSet, is as of the date of this document, unless otherwise noted. This document does not constitute a legal or tax advice nor an investment advice or an offer for shares of the Fund. Subscriptions to shares of the Fund can only be made on the basis of the current prospectus, accompanied by the latest available audited annual report and semi-annual report accessible on our website at www.franklintempletongem.com or which can be obtained, free of charge, from Franklin Templeton Investments, Gate Building, East Wing, 2nd Floor, Dubai International Financial Centre, P.O. Box 506613, Dubai, U.A.E. No shares of the Fund may be directly or indirectly offered or sold to residents of the United States of America. Shares of the Fund are not available for distribution in all jurisdictions and prospective investors should confirm availability with their local Franklin Templeton Investments representative before making any plans to invest. An investment in the Fund entails risks, which are described in the Fund’s prospectus. Special risks may be associated with a Fund’s investment in certain types of securities, asset classes, sectors, markets, currencies or countries and in the Fund’s possible use of derivatives. In emerging markets, the risks can be greater than developed markets. These risks are more fully described in the Fund’s prospectus and should be read closely before investing. The value of shares in the Fund and income received from it can go down as well as up, and investors may not get back the full amount invested. Past performance is not an indicator or a guarantee of future performance. When investing in a fund denominated in a foreign currency, the performance may also be affected by currency fluctuations. All investments involve risk and there can be no guarantee against loss resulting from an investment in the Fund, nor can there be any assurance that the Fund’s investment objective(s) will be attained.

The investment activities will be undertaken in accordance with the Shariah Guidelines. As a consequence, the performance of a Fund may possibly be lower than other investment funds that do not seek to strictly adhere to the Islamic investment criteria. The requirement to “purify” cash holdings or dividend income will likely result in payments being made to charities. The return to investors will be reduced by the amount of such payments. The International Shariah Supervisory Board of Amanie Advisors Sdn Bhd has certified that the Fund is in compliance with the requirements of the Shariah principles. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

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

© 2019 Franklin Templeton Investments. All rights reserved. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.

“Dow Jones®” and “Dow Jones Sukuk Index” are trademarks of Dow Jones Trademark Holdings LLC (“Dow Jones”) or its affiliates and have been licensed for use for certain purposes by S&P Dow Jones Indices LLC and its affiliates (“S&P Dow Jones Indices”) and sublicensed to Franklin Templeton Companies, LLC for use with the Franklin Global Sukuk Fund. Franklin Global Sukuk Fund, which is benchmarkcd to the Dow Jones Sukuk Index, is not sponsored, endorsed, sold or promoted by Dow Jones, S&P Dow Jones Indices or their respective affiliates, and none of S&P Dow Jones Indices, Dow Jones or any of their respective affiliates makes any representation regarding the advisability of trading in such product(s).

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AAdditionaldditional DDisclosuresisclosures

Reproduction of the S&P Dow Jones Indices in any form is prohibited except with the prior written permission of Standard and Poor’s (“S&P”). S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of the S&P Dow Jones Indices.

Source: J.P. Morgan. Copyright 2019. JPMorgan Chase & Co. All rights reserved. J.P. Morgan is the marketing name for JPMorgan Chase & Co., and its subsidiaries and affiliates worldwide. The Franklin Global Sukuk Fund is not sponsored, endorsed, sold or promoted by J.P. Morgan. THE J.P. MORGAN GBI BROAD INDEX is created based on stated, established rules. The creation or use of THE J.P. MORGAN GBI BROAD INDEX does not constitute a recommendation by J.P. Morgan of the Franklin Global Sukuk Fund or a trade recommendation by J.P. Morgan. J.P. Morgan makes no representation or warranty, express or implied, with respect to the Franklin Global Sukuk Fund, or the advisability of investing in securities generally, or in the Franklin Global Sukuk Fund particularly, or the ability of THE J.P. MORGAN GBI BROAD INDEX to track bond market performance. J.P. Morgan has no obligation to take the needs of the prospective purchasers or owners of the Franklin Global Sukuk Fund into consideration in determining, composing or calculating THE J.P. MORGAN GBI BROAD INDEX. J.P. Morgan is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the Franklin Global Sukuk Fund. J.P. Morgan has no obligation or liability in connection with the administration, marketing or trading of the Franklin Global Sukuk Fund. THE J.P. MORGAN GBI BROAD INDEX IS PROVIDED “AS IS” WITH ANY AND ALL FAULTS. J.P. MORGAN DOES NOT GUARANTEE THE AVAILABILITY, SEQUENCE, TIMELINESS, QUALITY, ACCURACY AND/OR THE COMPLETENESS OF THE J.P. MORGAN GBI BROAD INDEX AND/OR ANY DATA INCLUDED THEREIN, OR FROM ANY USE OF THE J.P. MORGAN GBI BROAD INDEX. J.P. MORGAN MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE J.P. MORGAN GBI BROAD INDEX OR ANY DATA INCLUDED THEREIN, OR FROM ANY USE OF THE J.P. MORGAN GBI BROAD INDEX. THERE ARE NO REPRESENTATIONS OR WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE OF THIS DOCUMENT, IF ANY. ALL WARRANTIES AND REPRESENTATIONS OF ANY KIND WITH REGARD TO THE J.P. MORGAN GBI BROAD INDEX, ARE DISCLAIMED INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, QUALITY, ACCURACY, FITNESS FOR A PARTICULAR PURPOSE AND/OR AGAINST INFRINGEMENT THE J.P. MORGAN GBI BROAD INDEX AND/OR WARRANTIES AS TO ANY RESULTS TO BE OBTAINED BY AND/OR FROM THE USE OF THE J.P. MORGAN GBI BROAD INDEX WITHOUT LIMITING ANY OF THE FOREGOING, TO THE FULLEST EXTENT PERMITTED BY LAW, IN NO EVENT SHALL J.P. MORGAN HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PRINCIPAL AND/OR LOST PROFITS, IN CONNECTION WITH THE J.P. MORGAN GBI BROAD INDEX. THE J.P. MORGAN GBI BROAD INDEX AND/OR THE FRANKLIN GLOBAL SUKUK FUND EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

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GIPS Performance Presentation

Franklin Global Sukuk Composite All Returns and Asset Figures in USD

Composite Primary No of Composite Composite Primary Gross Benchmark Composite Total Firm Portfolios Calendar Total Return Total Return Benchmark Annualized Annualized Assets Assets (End of Equal-Wtd Year Gross Net Return 3-Yr St Dev 3-Yr St Dev (Millions) (Millions) Period) Dispersion

YTD* 4.49% 4.39% 3.74% 3.25% 2.35% 484.96 3,051.76 ≤5 ≤5 2018 -0.66% -0.99% 0.12% 3.13% 2.23% 468.43 2,931.25 ≤5 ≤5 2017 8.60% 8.25% 4.47% 3.11% 2.31% 495.10 1,886.37 ≤5 ≤5 2016 0.23% -0.14% 4.35% 3.27% 2.58% 249.90 1,258.76 ≤5 ≤5 2015 1.52% 1.06% 1.24% 3.88% 2.83% 215.86 1,146.08 ≤5 ≤5 2014 5.42% 4.54% 6.37% 3.89% 2.65% 84.33 1,121.75 ≤5 ≤5 2013 2.96% 1.94% 0.22% 4.11% 2.86% 49.09 588.77 ≤5 ≤5 2012 12.76% 10.56% 8.00% 3.61% 2.33% 29.92 508.83 ≤5 ≤5 2011 8.93% 5.95% 5.46% 8.77% 9.76% 9.97 365.78 ≤5 ≤5 2010 10.81% 6.99% 9.40% < 3 Years < 3 Years 7.92 180.94 ≤5 ≤5 2009 13.27% 11.09% 27.13% < 3 Years < 3 Years 27.02 61.39 ≤5 ≤5 N/A = Not Available * Year to Date reflects performance through 3/31/2019 and composite composition as of 3/31/2019 Primary Benchmark: Dow Jones Sukuk TR Index. 1 See important notes to this performance presentation beginning on the next page.

2 Past performance does not guarantee future results and results may differ over future time periods.

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Disclosures:

a Firm Description - Franklin Templeton Investments (ME) Limited is a wholly-owned subsidiary of Franklin Resources, Inc. managing equity, fixed income and global Sukuk-Shariah compliant fixed income securities serving retail and institutional clients. The equity process applies a bottom-up fundamental research approach to invest in equity securities located in the Middle East and North Africa (MENA), as well as a top-down process to country allocation selection. The fixed income process applies a mix of bottom up, top down and quantitative approaches to invest in fixed income securities located in the Middle East, North Africa, Emerging Asia and Sukuk markets.

b Composite Description - The Franklin Global Sukuk Composite consists of all portfolios managed on a fully discretionary basis with an investment objective that seeks to maximize total return by investing in fixed and floating-rate Shariah-compliant securities (including non-investment grade securities), including Sukuk Wakala and Murabaha placements and other short-term instruments issued by government, government-related and corporate entities located in developed and developing countries. The portfolios may utilize investments in securities, financial derivative instruments or structured products in which the underlying security is linked to or derives its value from a distinct security, asset, commodity or currency of any nation. Composite constituents may invest in Islamic derivatives, specifically Islamic FX and Islamic profit-rate swaps; Shariah-compliant asset-backed and exchangeable securities. Use of financial derivatives instruments may result in negative exposures in a specific yield curve/duration, currency or credit. Derivative instruments have the risk of counterparty default. Foreign investing, especially in developing countries, has additional risks such as currency and market volatility and political or social instability. The base currency of the composite is USD. The inception date of the composite is 30 September 2008. The composite creation date is December 2012. Eligible new accounts and eligible accounts that have changed to this mandate are added to the composite after one full month of performance, excluding any first partial month following inception or notification of mandate change. Accounts are removed the month prior to notification of termination or notification of client directed restrictions that result in the account becoming non- discretionary.

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c Basis of Presentation and Calculation Methodology -Total returns are both gross and net of investment advisory fees, are inclusive of commissions and transaction costs, and assume reinvestment of any dividends, profit rate, capital gains or other earnings. Dividends, profit rate , and capital gains are net of any applicable withholding taxes. Both gross and net performance results are time-weighted rates of return, including realized and unrealized gains and losses. Gross of fee returns for pooled investment vehicles are calculated by adding back 1/12 of the pooled investment vehicle’s total annual expense ratio to the monthly returns which are based on the net asset values for the primary share class. The total expense ratio reflects the investment management fees, administrative fees and all other pooled vehicle-related expenses for the primary share class but do not include any sales charges. Monthly composite returns are calculated by weighting each account’s monthly return by its beginning market value as a percent of the total composite beginning market value. Quarterly and annual returns are calculated by linking the monthly returns through compounded multiplication. Returns for periods of less than one year are not annualized. For separate accounts, net performance reflects actual investment management fees charged, assessed quarterly in arrears, and actual performance fees as applicable. For all pooled investment vehicles (including commingled trust accounts), third party administered accounts, including accounts that use custodian market values where actual fees are not available, or accounts which are otherwise not charged a fee or benefit from fee waivers, net performance is reduced by performance fees if applicable and investment management fees by applying the highest breakpoint from the standard institutional fee schedule to the gross monthly returns regardless of asset size. Portfolios are valued on the last business day of the month or the last business day within the region. The last business day within the region may be a non-calendar month end. Portfolios may be valued at fair market value on a trade date basis and market values include accrued income for fixed income securities and accrued dividends for equity securities based on ex-dividend date. In addition, some portfolios may be valued at fair market value with adjustment for cash flows based on the regional business day which may be monthly, weekly or daily. Where market quotations are readily available, securities are valued thereon (using closing quotations when available), provided such quotations adequately reflect, in the judgment of the firm, the fair value of the securities. Positions for which no quotation is readily available are valued at fair market value using quotations from brokers, Bloomberg or using Franklin ‘s own assessment of fair market value based on fundamental analysis (earnings multiples, price to cash flow analysis), discounts from market prices of similar securities, or matrix pricing, among other methods. Securities not in the base currency of the portfolio are generally valued using foreign exchange rates obtained through Reuters, using 4:00 PM (New York time) foreign exchange (FX) rates. Some composite constituents, due to requests from clients or approval by respective mutual fund boards, may utilize London Close FX rates. Franklin uses London Close FX rates for converting non-base currency accounts to the base currency of the composite. Past performance does not guarantee future results and may differ for future time periods.

d Description of Index - The primary benchmark is Dow Jones Sukuk TR Index. This index is a market cap weighted index comprised of issues from global U.S. dollar-denominated investment-grade bonds that are Shariah-compliant based on an explicit or implicit rating of at least BBB-/Baa3 by S&P, Moody’s or a leading rating agency. Total return components for the benchmark include price change, coupon payments excluding reinvestment and accrued profit rate not adjusted for foreign withholding taxes and are based on foreign exchange rates established at the London close (or mid-day New York time). As of 12/31/12 Dow Jones Sukuk TR Index with coupon reinvested was discontinued. FX rates used by index vendors are obtained from their respective FX vendors and may differ slightly from the FX rates used by Franklin. The benchmark, which is not managed, is used for comparative purposes only and is provided to represent the investment environment existing during the time periods shown. Additionally, the benchmark does not reflect any fees, expenses or sales charges.

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

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f Standard Fee Schedule - The standard investment management fee schedule has breakpoints depending on asset size, with the result that accounts with higher assets levels will pay a lower fee. Investment management fees are negotiable, so some clients may be able to negotiate a fee that is less than the standard fee schedule at a given breakpoint. For pooled investment vehicles such as mutual funds that may be in the composite, the total expense ratio may be higher than the standard fee schedule for separate accounts, depending on the total expenses for that vehicle which includes management fees, administrative fees, and the other expenses. The fee schedule is presented in USD.

Breakpoints Separate Accounts First $100,000,000 0.425% Next $150,000,000 0.350% Over $250,000,000 0.300%

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

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

i Additional Information - For additional information, please contact Franklin Templeton International Services S.A. - Professional of the Financial Sector under the supervision of the Commission de Surveillance du Secteur Financier - 8A rue Albert Borschette L - 1246 Luxembourg - Tel: +352-46 66 67-1.

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