SEMIANNUAL REPORT AND SHAREHOLDER LETTER TEMPLETON CHINA WORLD FUND February 28, 2021 Sign up for electronic delivery at franklintempleton.com/edelivery SHAREHOLDER LETTER Dear Shareholder: China’s economy was the only major economy to grow Historically, patient investors have achieved rewarding in full calendar-year 2020, underpinned by a diversified results by evaluating their goals, diversifying their assets domestic economy driven by manufacturing, innovation and globally and maintaining a disciplined investment program, digitization. In our view, China has successfully navigated all hallmarks of the Templeton investment philosophy. the economic disruptions caused by the pandemic, and We continue to recommend investors consult financial the resulting V-shaped recovery bodes well for continued professionals and review their portfolios to design a strength in 2021. We continue to see the emergence of long-term strategy and portfolio allocation that meet their high-quality companies that, in our analysis, are well-placed individual needs, goals and risk tolerance. to benefit from ongoing market consolidation and booming domestic consumption. Templeton China World Fund’s semiannual report includes more detail about prevailing conditions and a discussion Geopolitical tension between China and the U.S. remains about investment decisions during the period. Please a key headwind likely to persist, despite some easing remember all securities markets fluctuate, as do mutual fund under the new U.S. administration. Although this tension share prices. is resulting in decoupling between the two countries with regard to technology-related companies, we have seen We thank you for investing with Franklin Templeton, welcome continued liberalization in China’s financial markets, driving your questions and comments, and look forward to serving increased foreign ownership. Investor interest in China’s your investment needs in the years ahead. domestic A-share markets is rising alongside increased Sincerely, bond market flows as China is added to international equity indexes. Manraj S. Sekhon, CFA Chief Investment Officer The Chinese equity market has presented diverse Franklin Templeton Emerging Markets Equity opportunities to investors, and the depth and breadth of the market has grown exponentially. Digitization, adoption This letter reflects our analysis and opinions as of February of technology and further consolidation across certain 28, 2021, unless otherwise indicated. The information is not industries should all feed into the long-term opportunities that a complete analysis of every aspect of any market, country, we have long been watching unfold in China. industry, security or fund. Statements of fact are from sources considered reliable. We are particularly interested in so-called “new economy” stocks. The trajectory of companies that have harnessed technology to create online platforms from traditional brick-and-mortar businesses has led to various Chinese government initiatives, from lower transaction costs to reaching segments of society that previously did not have that access to goods and services. The concept of digitization extends beyond the consumer section in light of fifth-generation (5G) technology, as we think it could become a tailwind for other sectors to capture this opportunity, particularly in the industrials sector. As we continue to keep an eye on quality businesses with sustainable business models, we also anticipate ongoing Chinese initiatives that could bring fertile investment opportunities. We are committed to our long-term perspective and disciplined investment approach as we conduct a rigorous, fundamental analysis of securities with a regular emphasis on investment risk management. CFA® is a trademark owned by CFA Institute. Not FDIC Insured May Lose Value No Bank Guarantee franklintempleton.com Not part of the semiannual report 1 Contents Semiannual Report Templeton China World Fund ������������������������������������������������3 Performance Summary..........................................................6 Your Fund’s Expenses ...........................................................8 Financial Highlights and Statement of Investments...............9 Financial Statements �����������������������������������������������������������16 Notes to Financial Statements.............................................20 Shareholder Information ......................................................29 Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools. 2 Semiannual Report franklintempleton.com SEMIANNUAL REPORT Templeton China World Fund This semiannual report for Templeton China World Fund Geographic Composition covers the period ended February 28, 2021. 2/28/21 % of Total Net Assets Your Fund’s Goals and Main Investments China 97.1% The Fund seeks long-term capital appreciation. Under Hong Kong 1.7% normal market conditions, the Fund invests at least 80% Short-Term Investments & Other Net Assets 1.2% of its net assets in securities of “China companies.” Such companies are those that are organized under the laws of, or with a principal office in, the People’s Republic of China Economic and Market Overview (China), Hong Kong or Taiwan; or for which the principal China’s economic recovery continued during the six- trading market is in China, Hong Kong or Taiwan; or that month period ended February 28, 2021. Year-on-year derive at least 50% of their revenues from goods or services gross domestic product growth rates accelerated in the sold or produced, or have at least 50% of their assets, in third and fourth quarters of 2020, driven by retail sales China. and government-stimulated industrial production, marking three consecutive quarters of expansion following the Performance Overview contraction caused by the novel coronavirus pandemic in the first quarter. As a net oil importer, generally low oil For the six months ended February 28, 2021, the Fund’s prices throughout the period also supported the economy. Class A shares posted a total return of +18.00%. For In late 2020, the government signaled its five-year annual comparison, the Fund’s new benchmark, the MSCI China growth targets would be on the lower end of prior forecasts, Index-NR, which measures stock market performance of reflecting continued uncertainty about the pandemic’s long- mid- and large-capitalization companies in China, posted a term economic impact. +14.93% cumulative total return for the same period.1 The Fund’s prior benchmark, the MSCI China Index, posted a During the six months under review, the People’s Bank of +14.94% return.1 The investment manager believes the China held its benchmark loan prime rate steady, though it MSCI China Index-NR provides a more consistent basis offered a record amount of medium-term lending facility in for comparison relative to the Fund’s peers. For the 10- December 2020 to further support liquidity. year period ended February 28, 2021, the Fund’s Class A shares posted a +96.81% cumulative total return, compared Chinese equities rose during the period, though they with the MSCI China Index-NR’s +126.51% and the MSCI generally lagged their emerging market peers. The China Index’s +131.38% cumulative total returns for the country’s continued economic recovery has been the most same period.1 Please note index performance information robust of any major economy and provided a foundation is provided for reference and we do not attempt to track for investor confidence. Gains were limited, however, by the index but rather undertake investments on the basis of investor concerns about increased Chinese government fundamental research. You can find more performance data regulation of internet companies, new U.S. Department in the Performance Summary beginning on page 6. of Defense-mandated restrictions on U.S. investment in Chinese companies (scheduled to take effect in late 2021), Performance data represent past performance, which does asset overvaluation and the possibility for monetary policy not guarantee future results. Investment return and principal tightening. In this environment, the MSCI China Index-NR value will fluctuate, and you may have a gain or loss when posted a +14.93% total return for the six months ended you sell your shares. Current performance may differ from February 28, 2021.1 figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. 1. Source: Morningstar. As of 2/28/21, the Fund’s Class A 10-year average annual total return not including sales charges was +7.00%, compared with the 10-year average annual total return of +8.52% for the MSCI China Index-NR and +8.75% for the MSCI China Index. The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund's portfolio. Net Returns (NR) include income net of tax withholding when dividends are paid. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 13. franklintempleton.com Semiannual Report 3 TEMPLETON CHINA WORLD FUND Investment Strategy Top 10 Holdings 2/28/21 Our investment strategy employs a fundamental research, Company % of Total value-oriented, long-term approach. We