Fixed Income
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  • 1. Your clients should carefully consider a fund’s investment goals, risks, charges and expenses before investing. They should carefully read the prospectus before they invest or send money. To obtain a prospectus, which contains this and other information please call Franklin Templeton Sales and Marketing Services at 1-800/223-2141.
  • 2. Three World-Class Investment Groups One World-Class Organization F R A N K L I N T E M P L E T O N I N V E S T M E N T S G L O B A L FRANKLIN TEMPLETON MUTUAL SERIES
  • 3.  
  • 4. Do Your Clients Have All the Right Pieces for a Well-Diversified Portfolio? U.S. Equities Foreign Equities U.S. Equities U.S. Bonds Foreign Equities U.S. Equities U.S. Bonds U.S. Equities Foreign Equities Foreign Bonds? G L O B A L
  • 5. Foreign Markets Provide Opportunity 10-Year Period Ended December 31, 2007 1
    • Source: Citigroup World Government Bond Index. Based on U.S. dollar terms (unhedged).
    • Past performance does not guarantee future results.
    37.35% Australia 2003 40.90% Norway 2002 30.38% Poland 2001 13.48% United States 2000 15.53% Japan 1999 21.25% France 1998 2007 2006 2005 2004 Year 23.83% Canada 17.96% Poland Unhedged USD Return Country 35.96% Poland 21.29% Mexico G L O B A L
  • 6. Historically Low Correlation of Returns
    • Source: © 2008 Morningstar. Global bonds are represented by the Citigroup World Government Bond Index, Domestic U.S. stocks are represented by the S&P 500 Index, domestic U.S. bonds are represented by the Lehman Brothers U.S. Aggregate Index and global stocks are represented by the MSCI World index.
    10-Year Period Ended June 30, 2008 1 1.00 Global Bonds Global Bond Correlations -0.11 U.S. Stocks 0.62 U.S. Bonds -0.03 Global Stocks G L O B A L
  • 7. T E M P L E T O N G L O B A L B O N D F U N D
  • 8. Agenda
    • The Strategy
    • The Benefits
    • The Results
    G L O B A L
  • 9. T H E S T R A T E G Y
  • 10. Templeton Global Bond Fund Investment Strategy
          • Global Economic Overview
          • We view the world as our opportunity set
        • Hands-on research is essential to our investment process
      • Local Market Research
        • Our investment decisions are ultimately based on valuation
    Portfolio Construction G L O B A L T H E S T R A T E G Y
  • 11. Franklin Templeton Fixed Income Group ® Global Presence 1
    • Data as of 12/31/07.
    SAN MATEO NEW YORK SÃO PAULO LONDON MUMBAI SEOUL SHANGHAI Franklin Templeton Fixed Income Group Offices Local Asset Management Offices DUBAI G L O B A L T H E S T R A T E G Y
  • 12. Not Driven by Benchmarks… Templeton Global Bond Fund Geographic Deviation from Benchmark Index
    • The fund’s benchmark is the Citigroup World Government Bond Index. Portfolio holdings are subject to change and may not represent current or future portfolio composition. For the most current month-end information, call Franklin Templeton Sales and Marketing Services at 1-800/223-2141 or visit franklintempleton.com.
    As of June 30, 2008 1 G L O B A L T H E S T R A T E G Y
  • 13. T H E B E N E F I T S
  • 14. Professional and Dynamic Asset Allocation Country Allocations Change as Opportunities Arise
      • Portfolio holdings are subject to change and may not represent current or future portfolio composition. For the most current month-end information, call Franklin Templeton Sales and Marketing Services at 1-800/223-2141 or visit franklintempleton.com. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. These and other risk considerations are discussed in the fund’s prospectus.
    As of June 30, 2008 1 12.2% 3.0% 5.9% 2.9% 9.8% 0.2% 4.4% 9.9% 0.2% 0.0% 4.6% 0.0% 1.4% June 2008 4.8% 5.3% 0.0% Indonesia 2007 2003 2000 Country 1.7% 0.0% 0.7% Argentina 0.0% 2.1% 9.6% Italy 0.0% 6.5% 8.5% France 0.4% 0.0% 10.9% United States 22.7% 8.0% 3.3% Cash 3.7% 0.0% 0.0% Poland 11.3% 4.9% 2.3% South Korea 0.2% 7.7% 2.6% New Zealand 5.6% 0.0% 3.2% Brazil 12.7% 8.2% 5.0% Sweden 3.2% 1.6% 6.4% Canada 0.0% 2.7% 7.6% Spain G L O B A L T H E B E N E F I T S
  • 15. Templeton Global Bond Fund Portfolio Highlights, as of June 30, 2008 1
      • Portfolio holdings are subject to change and may not represent current or future portfolio composition. Assets, average credit quality, diversification, average duration and average maturity are based on all share classes. Distribution rate and 12-month yield at NAV are calculated using the last twelve months of dividends. For the most current month-end information, call Franklin Templeton Sales and Marketing Services at 1-800/223-2141 or visit franklintempleton.com.
      • Duration shown is the option-adjusted duration. Duration is an indication of a fund’s sensitivity to changes in interest rates. The option-adjusted duration formula takes into account embedded call options and redemption features that impact a bond’s expected cash flows, and thus its interest rate sensitivity.
      • Based on an annualization of the Class A dividend and maximum offering price per share on 6/30/08.
    6.93% 12-Month Yield at NAV 4.57% 3 Distribution Rate 6.50 Years Average Weighted Maturity 3.97 Years 2 Average Duration 119 Positions Diversification AA- Average Credit Quality $10.6 Billion Assets G L O B A L T H E B E N E F I T S
  • 16. Templeton Global Bond Fund–Class A The Strategy in Action
    • Portfolio holdings are subject to change and may not represent current or future portfolio composition. For the most current month-end information, call Franklin Templeton Sales and Marketing Services at 1-800/223-2141 or visit franklintempleton.com.
    Portfolio Breakdown, as of June 30, 2008 1 G L O B A L T H E B E N E F I T S
  • 17. A History of Positive Returns in Years That the U.S. Stock Market Declined 1 Templeton Global Bond Fund–Class A vs. S&P 500 Index (Without 4.25% Sales Charge)
    • Source: Standard & Poor’s Micropal (S&P 500 Index).
    • Past performance does not guarantee future results.
    1987 – 2007 G L O B A L T H E B E N E F I T S
  • 18. Quality Fund Management 1
    • Templeton Global Bond Fund received a “Best Fund Managers” award for the Global Funds category in the 2007 Excellence in Fund Management Awards given by Standard & Poor’s and BusinessWeek . The award was based primarily on risk-adjusted total returns for the five-year period ended December 31, 2006. Most recent data available, the award is given out annually.
    Michael Hasenstab, Ph.D. Vice President Co-Director / Portfolio Manager Franklin Advisers, Inc. G L O B A L T H E B E N E F I T S
  • 19. T H E R E S U L T S
  • 20. Templeton Global Bond Fund–Class A Fund Performance
    • Performance data represent past performance, which does not guarantee future results. Current performance may differ from the figures shown. 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 Sales and Marketing Services at 1-800/223-2141 or visit franklintempleton.com for more information .
      • Average annual total returns assume reinvestment of dividends and capital gains at net asset value.
      • Indexes are unmanaged, and one cannot invest directly in an index.
      • Source: Lipper, Inc. Performance and rankings do not include sales charges. Rankings pertain only to Templeton Global Bond Fund Class A shares; other shares classes may differ. There were 113, 96, 86 and 54 funds in the Lipper Global Income Funds Classification for the 1-, 3-, 5- and 10-year periods ended 6/30/08.
      • Class A: Prior to 7/1/94, fund shares were offered at a higher initial sales charge. On 1/1/93, the fund implemented a Rule 12b-1 plan, which affects subsequent performance.
      • Yield, calculated as required by the Securities and Exchange Commission (SEC), is based on earnings of the fund’s portfolio during the 30 day period ended 6/30/08.
    As of June 30, 2008 Top 6% 5.41% 6.54% 8.12% 10-Year N/A N/A 7.67% 8.00% Since Inception Top 4% Top 3% Top 66% Lipper Percentile Ranking 5.03% 4.13% 6.83% Lipper Global Income Funds Classification Average 3 6.39% 6.24% 17.00% Citigroup World Government Bond Index 2 8.59% 8.71% 6.57% Templeton Global Bond Fund 1 5-Year 3-Year 1-Year Average Annual Total Returns (Without Sales Charge) 30-Day Standardized Yield: 4.43% 5 7.65% 10-Year 7.79% Since Inception 7.65% 7.14% 2.00% Templeton Global Bond Fund 1, 4 5-Year 3-Year 1-Year (With Maximum 4.25% Sales Charge) G L O B A L T H E R E S U L T S
  • 21. The Value of Active Management Strong Performance Over the Long Term
        • Source: © 2008 Morningstar. Indexes are unmanaged and one cannot invest directly in an index.
        • Source: Lipper, Inc. The Lipper Global Income Funds classification for this time period included 5 funds and does not include sales charges.
    • Past performance does not guarantee future results.
    20-Year Period Ended June 30, 2008 Without Sales Charges Templeton Global Bond Fund–Class A Citigroup World Government Bond Index 1 Lipper Global Income Funds Classification Average 2 G L O B A L T H E R E S U L T S
  • 22. Returns Matter, But So Does Volatility Risk vs. Return Comparison (Without Sales Charges)
      • Data represents average annual total returns and assumes reinvestment of dividends. Risk is measured by the annualized standard deviation of monthly returns. Indexes are unmanaged, and one cannot invest directly in an index.
        • Source: Thomson Financial. The fund’s performance shown in this chart assumes reinvestment of dividends and capital gains at net asset value.
        • Source: © 2008 Morningstar (Citigroup World Government Bond Index). Data represents average annual total returns and assumes reinvestment of dividends. Risk is measured by the annualized standard deviation of monthly returns. Indexes are unmanaged, and one cannot invest directly in an index.
        • Source: Lipper, Inc. There were 5 funds in the Lipper Global Income Funds Classification from 6/30/88 to 6/30/08.
    • Past performance does not guarantee future results.
    20-Year Period Ended June 30, 2008 G L O B A L T H E R E S U L T S
  • 23. Impressive Industry Accolades
    • Morningstar awarded Templeton Global Bond Fund’s Class–A shares a five-star overall rating, measuring risk-adjusted returns against U.S.-Domiciled World Bond funds over the 3-, 5- and 10-year periods, respectively. 1
    As of June 30, 2008
      • Source: Morningstar ® 6/30/08. For each fund with at least a 3-year history, Morningstar calculates a risk-adjusted return measure that accounts for variation in a funds’ monthly performance (including the effects of all sales charges), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive a Morningstar Rating™ of 5 stars, the next 22.5% receive 4 stars, the next 22.5% receive 3 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund and rated separately.) A fund’s overall rating is derived from a weighted average of the 3-, 5- and 10-year (if applicable) rating metrics. Templeton Global Bond Fund received Morningstar Ratings of 5, 5 and 5 stars for the 3-, 5- and 10-year periods, respectively. For the 3-, 5- and 10-year periods there were 181, 149 and 105 funds, respectively. Past performance does not guarantee future results. © 2008 Morningstar, Inc. 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.
      • Source: Lipper, Inc., 6/30/08. These awards are subject to change every month and are based on an equal-weighted average of percentile rankings over the last 3-, 5- and 10-year periods. Lipper Leader status is calculated monthly using data available at time of calculation; Lipper undertakes no responsibility for updating the calculations more frequently than monthly to incorporate more current data. Lipper ratings for Total Return reflect funds’ historical total return performance relative to peers. Lipper ratings for Consistent Return reflect funds’ historical risk-adjusted returns, adjusted for volatility, relative to peers. Twenty percent of funds in classification are named Lipper Leaders, the next 20% receive a score of 2, the next 20% are scored 3, the next 20% are scored 4, the next 20% are scored 5. Under no circumstances does information about Lipper Leader funds constitute a recommendation to buy or sell funds, nor does it necessarily imply that a fund named as a Lipper Leader had the best performance within its category. Lipper Leader ratings are based on past fund performance.
      • Past performance does not guarantee future results.
    G L O B A L T H E R E S U L T S CLASSIFICATION: Mixed-Asset Target Allocation Moderate NUMBER OF FUNDS: 649 CLASSIFICATION: Multi-Cap Core NUMBER OF FUNDS: 664 Overall Morningstar Rating™ 1
  • 24. Review
    • The Strategy
      • – Find fixed income values around the world
    • The Benefits
      • – An actively managed fund that provides global diversification
    • The Results
      • – Over 20 years of solid performance and low volatility
    G L O B A L
  • 25. The Next Steps
    • Review your client base for those who are underweighted in global and fixed income investments
    • Tell the Templeton Global Bond Fund story to your clients using the fund’s Investor guide
    • NASDAQ Symbols:
      • Class A: TPINX
      • Class C: TEGBX
    Diversify for a World of Opportunity 406 XINV FI B G L O B A L
  • 26. A Strategic Combination Growth of a $100,000 Investment (Without Sales Charges)
    • Source: © 2008 Morningstar (MSCI World Index, Citigroup World Government Bond Index). Returns include reinvestment of interest and dividends. This combination index assumes a hypothetical 60%/40% split among MSCI World Index and Citigroup World Government Bond Index. These are the respective benchmark indexes of Templeton Global Bond Fund and Mutual Discovery Fund. Indexes are unmanaged, and one cannot invest directly in an index.
    • Assumes a hypothetical 60%/40% investment split among Class A shares of Mutual Discovery Fund and Templeton Global Bond Fund. Figures include annual rebalancing.
    • Past performance does not guarantee future results.
    January 1, 2000–June 30, 2008 1, 2 G L O B A L 40% Citigroup World Government Bond Index / 60% MSCI World Index MSCI World Index $117,703 $143,271 $228,476 40% Templeton Global Bond Fund–Class A / 60% Mutual Discovery Fund–Class A
  • 27. Build Your Fixed Income Business FixedIncomeLeader.com
  • 28. Fixed Income Solutions for Your Clients
  • 29. 406 PPT 08/08