To seek to maximise income and growth of capital (total return). The Fund mainly invests in Shariah-compliant corporate and government bonds, such as sukuks, denominated in any currency. These investments may be from anywhere in the world, including emerging markets, and some of them may be below investment grade.

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: 
  Counterparty risk: the risk of failure of financial institutions or agents (when serving as a counterparty to financial contracts) to perform their obligations, whether due to insolvency, bankruptcy or other causes.
  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.
  Foreign Currency risk: the risk of loss arising from exchange-rate fluctuations or due to exchange control regulations.
  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.
  Emerging markets risk: the risk related to investing in countries that have less developed political, economic, legal and regulatory systems, and that may be impacted by political/economic instability, lack of liquidity or transparency, or safekeeping issues.
  Liquidity risk: the risk that arises when adverse market conditions affect the ability to sell assets when necessary. Such risk may be triggered by (but not limited to) unexpected events such as environmental disasters or pandemics. Reduced liquidity may have a negative impact on the price of the assets.
  Shariah compliance risk: the risk that the restriction to invest only in Shariah-compliant securities may place the Fund at a comparative disadvantage vs. funds that do not have this restriction. Returns to shareholders may also be reduced due to payments to Shariah approved charities to “purify” dividends.
  Sukuk risk: the risk of loss arising from investing in sukuk instruments, which may fluctuate in value due to the impact of macro-economic factors on the supply and demand for financing or the willingness or ability of the counterparty (sovereign, sovereign-related, or corporate) to make payments according to the terms of the Sukuk.

For full details of all of the risks applicable to this Fund, please refer to the section “Risk Considerations” of the Fund in the current prospectus of Franklin Templeton Shariah Funds.