1. Franklin Quotential Fixed INCOME PORTFOLIO
November 4, 2016
For Internal Use Only / Not for Distribution to the Public

2. Agenda Product Overview Portfolio Composition & Investment Outlook
Marketing Support
Q&A

3. Product Overview

4. Why Consider a Multi-Sector Fixed Income Portfolio?
9/15/2018 9:30 PM
In An Uncertain Rate Environment, Fixed Income Portfolios Can Benefit From Diversity And Active Management
Diversification can be a way to manage the risk return profile
Two asset classes – like a 60/40 portfolio with Canadian equity and Canadian fixed income – has a much higher risk profile than a 60/40 portfolio with additional sub-asset classes.
In general, the standard deviation of a 60/40 portfolio decreases with greater diversification. – 4 asset classes, 5 asset classes, 6 asset classes…and so on….
The chart shows that even though you might still have a 60/40 portfolio, the breakdown of fixed income and equity can have quite an impact on the risk return profile.
The much tougher question – is what is the right combination of sub asset classes that will generate an overall comfortable risk return profile for each individual investor. Choosing asset classes is not easy.
Source: Morningstar Research as of September 30, Indexes used: Canadian Equity: S&P/TSX Composite TR; US Equity: S&P 500 TR; Global Equity: MSCI World; Canadian Bond: FTSE TMX Canada Universe Bond; US Fixed Income: Bloomberg Barclays US Aggregate Fixed Income; Global Fixed Income: Citi WBGI. Important data provider notices and terms available at Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The information presented herein is considered reliable at the present time; however, we do not represent that it is accurate or complete, or that it should be relied upon as such. The information presented herein is not a recommendation or solicitation to buy or sell securities
QT_BPPT_0915

5. Continuing the Evolution of Franklin Quotential
9/15/2018 9:30 PM
Not Standing Still: More Resources. More Tools.
2004
2008
2002
2006
2010
2012
2014
2016
2009
Offshore Funds & ETFs introduced
Currency hedging implemented
Franklin Quotential Portfolios introduced to retail investors
Additional Risk Management Tools introduced through K2 Advisors
2013
FT Multi-Asset team combined with K2 Advisers to form FT Solutions
Benchmark changes to reduce domestic bias
Third Party sub- advised Funds added
2007
Global Solutions team created
Strategic Allocation team established
Manager Research team established
Launch of Franklin Quotential Fixed Income Portfolio
FT Solutions began creating multi asset portfolios in 1996 for high net worth clientele… and in 2002, the company introduced Franklin Quotential portfolios to retail investors.
The program took off and since then we’ve continued to evolve and fine-tune the concept of diversification from a Canadian perspective as we look for new sources of alpha, new sources of uncorrelated returns, new sources for risk management and potentially risk reduction
Fund
Third party sub-funds introduced
Offshore funds (SICAVs) and ETFs allow us to target exposure to specific markets – 10% to SICAVs and 20% to ETFs allowed.
Currency forwards. To manage the currency exposures in the fund
Benchmarks adjusted to reduce Cdn bias to take advantage of global market opportunities.
Team
Deepen and strengthen the team. Creation of a global team in uniting PMs from around the globe. Manager research team created. SAA team established to look ahead and created capital market expectations. In 2013 joined with K2 to form FT Solutions.
The items along the top refer to the portfolio tools and structure.
The items along the bottom represent changes to the team
FTI INSTIT PPT 4:3 01/14

6. Introducing: Franklin Quotential Fixed Income Portfolio
Objective: To provide investors current Income and some long-term capital appreciation by investing in a diversified mix of Canadian and foreign fixed income
Portfolio Structure:
A core fixed income portfolio – can help to de-risk portfolios
Neutral Weighting: 50% domestic fixed income, 50% foreign fixed income
Allocation Range: 25%-75% domestic fixed income and 25%-75% foreign fixed income
Average Canadian currency bias of 75%, with an anticipated foreign currency exposure range of 10-40%
Investment Tools:
Franklin Templeton Canadian Domiciled Mutual Funds
Third party mutual funds up to 15%
Currency hedging up to 50%
ETFs up to 20%
SICAV (Offshore) Funds up to 10%
Benchmark: 50% FTSE TMX Canada Universe Bond Index, 50% Barclays Multiverse Bond Index (Hedged to CAD)
Distribution Frequency: Monthly
Morningstar Category: Global Fixed Income

7. Investor and Advisor Benefits
Franklin Quotential Fixed Income Portfolio may appeal to:
Investors looking for:
A conservative fixed income investment that provides income with low volatility
A core fixed income portfolio that manages its foreign currency exposure from a Canadian perspective
Advisors looking for:
A simple, all-in-one core fixed income portfolio

8. SIMPLICITY PRICING FUND CODES
Franklin Quotential Fixed Income Portfolio Fund Codes and Fees
SERIES 
Series A
Series F
Series PF FE
NO LOAD
(a)
Management Fee
0.70%
0.65%
(b)
Trailer Fee
0.50% -
(c)
Fixed Admin
0.15%
0.10%
(d)
Management & Admin Fee
(a +b + c)
1.35%
0.85%
0.75%
(e)
HST [13% x (d)]
0.18%
0.11%
(f)
Other Fees
TBD
(g)
Sub-Total (c + d + e)
1.53%
0.96%
(h)
12/31/2016 (g + f)
SERIES O
C$200K to $2.5M
Next
C$2.5M
> C$5M
Management & Admin Fee
0.75%
0.65%
0.60%
FUND CODES
SIMPLICITY PRICING FUND CODES
Series
Series A
Series F
Series PF
Series O
Load
Front End
Low Load
Deferred Sales Charge
NO LOAD
N/A
Currency
CAD
USD
Fund Code
3926
3938
3927
3939
3928
3940
3929
3941
3931
3949
3930
3942
Series O investors do not pay any of the management fees within the fund but instead pay a separate management and administration fee that they negotiate directly with Franklin Templeton Investments Corp. To qualify to purchase or hold Series O units an investor must meet minimum investment requirements as set out in the fund’s current prospectus. For more details on the management and administration fee, please read the prospectus. Performance is presented in Canadian dollars and is gross of fees (before management and custodial fees) of Series O units of the Fund. Taking into account such fees would result in lower rates of return.

9. Simplicity Pricing

10. Portfolio Composition

11. Franklin Quotential Fixed Income Portfolio
Diversified across 11 different funds and ETFs
Anticipated Allocation
Domestic
Foreign
Total
Government
26%
15%
41%
Credit
28%
21%
49%
Emerging Market Debt 7%
Cash 3%
57%
43%
100%
* Pending fund launch
Opinions and beliefs expressed are those of FT Solutions and are subject to change without notice. Past performance is not an indicator nor a guarantee of future results.

12. Franklin Quotential Fixed Income Portfolio¹
Expected Key Attributes
Franklin Quotential Fixed Income Portfolio¹
Blended Benchmark
Difference
Coupon (%)
3.88
3.19
0.69
Yield (%)
2.91
1.93
0.97
Duration to Maturity (Yr)
5.72
7.22
-1.50
Portfolio Beta
0.95
Credit Quality A+
Opinions and beliefs expressed are those of FT Solutions and are subject to change without notice. Past performance is not an indicator nor a guarantee of future results.
t. These values are calcualted by creating a proposed portfolios of the individual securities identified on slide 10.

13. Forward-Looking Market Expectations
9/15/2018 9:30 PM
Baseline Projections Before Tactical Allocation and Strategy Selection
Diversified Equity
Return 7.5+% / Risk 11-12%
-16-17%*
Growth
Return % / Risk 9-10%
-12-13%*
Expected Return
Balanced Growth
Return % / Risk 7-8%
-10-11%*
Balanced Income
Return % / Risk 6-7%
-7-8%*
Return calculations are Gross of fees
First step is Strategic Asset Allocaiton
Strategic Asset Allocation (SSA) team prepares capital market expectations every year that look ahead for 7 years.
If the expectations show a big shift from prior year, the benchmarks and composition of portfolio will be reassessed to make sure that the portfolios are properly positioned for what’s ahead
So for example, based on the capital market expectations, our team has set out projections of risk and return – what will be added strictly form the strategic asset allocation calls over the next 7 years – before Tactical Asset Allocation and Before Manager Selection.
There may be a point where there may be negative performance. The number in grey reflects the worst-one-year expected SAA results at any point over the next 7 years.
Portfolios are built for the long term. Short term results will of course vary.
Strategic Asset Allocation is reviewed every January based on the Capital market expectations.
Diversified Income
Return % / Risk 4-5%
-5-6%*
Equity %
Fixed Income %
Fixed Income
Return 2.5%-3.5% / Risk 3-4%
-3-4%*
*Expected Worst 1-Year Loss Over 7 Years
Expected Risk
For illustration purposes only. Returns listed do not represent the performance of any Franklin Templeton Product. Source: Based on FT Solutions Forward-looking Capital Market Expectations as of June 1, 2016.
FTI INSTIT PPT 4:3 01/14

14. Marketing Support

15. Marketing Support November 14, 2016 February 15, 2017 QFIP Materials
Print
Introductory Flyer
Online
Dedicated FQFIP page
FQFIP Materials
Print
Product Profile
Investment Policy Statement
Quarterly Commentary
Program Materials
Print
Investor Guide
Bestfit Questionnaire (pdf)
Dealer Kit
Online
Website landing page
Program Materials
Online
Bestfit Questionnaire

16. Questions?

17. Disclosure
The information presented herein is considered reliable at the present time, however, we do not represent that it is accurate or complete, or that it should be relied upon as such. Speculation or stated beliefs about future events, such as market and economic conditions, company or security performance, or other projections represent the beliefs of the speaker and do not necessarily represent the views of Franklin Templeton Investments Corp. General business, market, economic and political conditions could differ materially from what the author presently anticipates or projects. The information presented is not a recommendation or solicitation buy or sell any securities. FT Solutions is a world-wide team dedicated to global portfolio based solutions and draws on the expertise of a number of Franklin Templeton affiliates. In Canada, the advisor to the Canadian FT Solutions mandates is Fiduciary Trust Company of Canada. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus or fund facts document before investing. The indicated rates of return are historical annual compounded urns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The portfolio manager for a Fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the complete list of holdings.