Franklin European Corporate Bond Fund

Summary of Fund Objective

The Fund seeks to maximise total investment returns through a combination of interest income and capital appreciation by investing principally in investment-grade fixed or floating-rate debt securities of European corporate issuers and/or euro-denominated debt securities of non-European corporate issuers. Most investments will be either denominated in euros or hedged back into euros.

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 higher-quality debt securities of corporations located in or doing significant business in European countries. Such securities have historically proven to present some stability over time and have benefitted from a limited exposure to interest rates and movements in the bond market but the performance can fluctuate moderately over time.
• The Fund may distribute income gross of expenses. Whilst this might allow more income to be distributed, it may also have the effect of reducing capital.
• Other significant risks include:
  Credit risk: the risk of loss arising from default that may occur if an issuer fails to make principal or interest payments when due. This risk is higher if the Fund holds low-rated, sub-investment-grade securities.
  Derivative Instruments risk: the risk of loss in an instrument where a small change in the value of the underlying investment may have a larger impact on the value of such instrument. Derivatives may involve additional liquidity, credit and counterparty risks.
  Liquidity risk: the risk that arises when an asset cannot be sold on a timely basis due to security-specific factors or adverse market conditions, which may impact the Fund’s ability to meet redemption requests, particularly if they are increasing.

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.