Franklin Growth Fund Advisor Class United States - Retail December 31, 2019
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Class A Franklin Growth Fund Advisor Class United States - Retail December 31, 2019 Fund Commentary Performance Review • Broad gauges of US equities marked a string of new record highs as the nation’s economy continued exhibiting some positive fundamentals throughout 2019’s fourth quarter, while financial market activity reflected investors’ generally rising optimism about trade and the economy. • For the quarter, the fund’s Advisor Class shares returned 8.15%, and its benchmark, the S&P 500 Index, returned 9.07%. Past performance is not an indicator or a guarantee of future performance. QUARTERLY KEY PERFORMANCE DRIVERS Stocks Sectors Amgen Inc. Consumer Discretionary (Stock Selection) Helped ASML Holding NV ADR Consumer Staples (Underweight) Apple Inc. Utilities (Underweight) Boeing Company Industrials (Overweight) Hurt Northrop Grumman Corporation Health Care (Stock Selection) Verisk Analytics Inc Materials (Stock Selection, Overweight) • In the industrials sector, aerospace contractor Northrop Grumman underperformed after issuing weak third-quarter earnings and disappointing guidance due, in part, to its aerospace business. • Weaker-than-expected margins offset positive revenue growth for data analytics provider Verisk Analytics in the industrials sector. Verisk invests substantially in new product innovation across its businesses, and we have been encouraged by the company’s realigned strategy that focuses on services with sustainable recurring revenue. • Conversely, increased demand for 5G chips and an improved outlook for trade helped the shares of semiconductor equipment company ASML Holding in the information technology sector. ONE-MONTH KEY PERFORMANCE DRIVERS Stocks Sectors Mettler-Toledo International Inc. Consumer Discretionary (Stock Selection) Helped ASML Holding NV ADR Real Estate (Stock Selection) Catalent Inc Consumer Staples (Stock Selection) Boeing Company Industrials (Overweight) Hurt Northrop Grumman Corporation Financials (Stock Selection) Alaska Air Group, Inc. Materials • A position in Boeing weighed on industrials sector performance. Safety issues with its best-selling aircraft forced the resignation of the company’s chief executive officer and resulted in the stock price drop. • Boeing’s troubles pressured the airlines industry, with the shares of Alaska Air Group declining. • Conversely, in the health care sector, precision instruments supplier Mettler-Toledo International has been benefiting from improved market conditions. The company has continued to be a dominant player in its industry with product breadth, service offerings and competitive leadership that set it apart, in our view. Outlook & Strategy • The United States has been in one of the longest periods of economic expansion in history. Even with a reasonably constructive view of the economic backdrop, we recognize that at this point in the cycle, the likelihood of significant market advances may decline going forward. We also anticipate those advances may be paired with higher levels of volatility. For these reasons, we believe selectivity and active management are important elements for investors to consider. • We continue to focus on key investment themes that we believe will be more relevant in the longer term. These include artificial intelligence and machine learning; cloud computing; cybersecurity; digital payments and fintech (financial technology); and the growth of our connected world. • As part of our investment management process, we interact with some of the world’s leading innovators. Our research team constantly reaches out to thought leaders across industries and meets with trailblazing firms to understand cutting-edge technologies and ideas that could have transformative potential. • We believe it remains an exciting time for growth investors, and are encouraged by our focus on the intersection of great ideas and sound investments. For Financial Professional Use Only / Not For Public Distribution Not FDIC Insured | May Lose Value | No Bank Guarantee Franklin Growth Fund December 31, 2019 Fund Details Fund Description Inception Date 03/31/1948 The fund seeks long-term capital appreciation by investing substantially in the equity securities of companies that are leaders in their industries, and Benchmark S&P 500 Index which the managers believe are suitable for a buy-and-hold strategy. Performance Data Average Annual Total Returns1 (%) at NAV Since 1 Mth 3 Mths 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception Date Class A 2.50 8.08 32.17 17.43 12.35 13.33 10.42 03/31/1948 Advisor Class2 2.53 8.15 32.52 17.73 12.63 13.62 10.52 03/31/1948 S&P 500 Index3 3.02 9.07 31.49 15.28 11.70 13.56 - - Past performance is not an indicator or a guarantee of future performance. Current performance may differ from figures shown. Periods greater than one year are shown as average annual total returns. The fund’s investment return and principal value will change with market conditions, and an investor may have a gain or a loss when they sell their shares. Please call Franklin Templeton (800) 223-2141 Sales and Marketing Services at or visit franklintempleton.com for the fund’s most recent month-end performance. Investment Team Serena Perin Vinton, CFA John Anderson Robert Rendler, CFA Years with Firm 28 Years with Firm 5 Years with Firm 14 Years Experience 28 Years Experience 13 Years Experience 14 1. Periods shorter than one year are shown as cumulative total returns. For Financial Professional Use Only / Not For Public Distribution franklintempleton.com 2 Franklin Growth Fund December 31, 2019 What Are The Risks? All investments involve risks, including possible loss of principal. Historically, the fund has focused on larger companies. The fund may also invest in small, relatively new and/or unseasoned companies, which involves additional risks, as the price of these securities can be volatile, particularly over the short term. The fund may focus on particular sectors of the market from time to time, which can carry greater risks of adverse developments in such sectors. In addition, the fund may invest up to 40% of its net assets in stocks of foreign companies, which involve special risks, including currency fluctuations and economic as well as political uncertainty. These and other risks are described more fully in the fund’s prospectus. Important Legal Information Class A shares are offered at net asset value (NAV) to certain eligible investors, such as qualifying employee benefit plans and institutional investors exercising exclusive or shared discretionary investment authority for funds held in fiduciary, agency, advisory, custodial or similar capacity. Purchases made outside of the qualified class will be subject to the applicable sales charge. The fund offers other share classes subject to different fees and expenses, which will affect their performance. Please see the prospectus for details. Advisor Class shares are offered only to certain eligible investors as stated in the prospectus. They are offered without sales charges or Rule 12b-1 fees. The information provided is not a complete analysis of every material fact regarding any country, market, industry, security or fund. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this material and may change without notice. A portfolio manager’s assessment of a particular security, investment or strategy is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy; it is intended only to provide insight into the fund’s portfolio selection process. Holdings are subject to change. Your clients should carefully consider a fund’s investment goals, risks, charges and expenses before investing. They should read the summary prospectus and/or prospectus carefully before they invest or send money. To obtain a prospectus, which contains this and other information, please call Franklin Templeton at (800) DIAL BEN/(800) 342-5236. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC. Important data provider notices and terms available at www.franklintempletondatasources.com. 2. Performance quotations for this class reflect the following methods of calculation: a) For periods prior to the fund’s Advisor Class inception date, a restated figure is used based on the fund’s oldest share class, Class A performance, excluding the effect of Class A’s maximum initial sales charge but reflecting the effect of the Class A Rule 12b-1 fees; and b) for periods after the fund’s Advisor Class inception date, actual Advisor Class performance is used, reflecting all charges and fees applicable to that class. 3. © 2020 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, CA 94403-1906 (800) 223-2141 franklintempleton.com For Financial Professional Use Only / Not For Public Distribution © 2020 Franklin Templeton. All rights reserved. 106 QCPLT 12/19.