2. Franklin Templeton Investments
Franklin Templeton Investments is a global leader in asset management serving clients in over 150 countries
65+
$763.9B+
650+
Years of Asset Management Experience
(USD) Total Assets Under Management
Investment Professionals1 35
Countries with Offices
Franklin Templeton Investments brings together multiple, world-class investment teams in a single firm.
Franklin Templeton Investments is able to offer specialized expertise across styles and asset classes, all supported by the strength and resources of one of the world’s largest asset managers.
This is important because…
As of 12/31/15.
1.Investment professionals include portfolio managers, portfolio managers/analysts, research analysts and traders of Franklin, Templeton, Franklin Mutual Series, and subsidiary investment management groups.

3. The Simple Way to Invest
Franklin Templeton Investment Funds | Franklin NextStep Funds™
People work hard for their money.
The next step is getting that money to work for them. Franklin NextStep Funds are a suite of multi-asset funds designed to be the simple way to invest.
“Franklin NextStep Funds” is a collective term for these three funds used: Franklin NextStep Conservative Fund, Franklin NextStep Moderate Fund and Franklin NextStep Growth Fund. These funds are sub-funds of Franklin Templeton Investment Funds (FTIF), a Luxembourg-domiciled SICAV.

4. Franklin NextStep Funds
Simplicity
All-in-one portfolios matched to three levels of risk
Diversification
A broad mix of funds invested across fund managers, asset classes and countries
Expertise
Professionally managed to navigate the ups and downs of the market
Franklin NextStep Funds offer investors:
Simplicity
The funds are designed as all-in-one portfolios that can be easily matched to investors based on their goals and risk tolerance.
[Click] Diversification
The funds invest in mutual funds and exchange traded funds to create a portfolio with access to top tier investment managers and a broad mix of asset classes (like stocks, bonds and alternative investments) and countries.
[Click] Expertise
The portfolio management team has flexibility to adjust fund holdings and take advantage of potential market opportunities, while trying to avoid unnecessary risks. The funds are managed to stay aligned with the funds’ target risk goals.
Diversification does not guarantee a profit or protect against a loss.

5. Simplicity All-In-One Portfolios Matched to the Client
Potential Return
HIGHER
Stock Funds
Bond Funds
Alternative Investments Funds¹
Franklin NextStep Growth Fund
Franklin NextStep Moderate Fund
Franklin Templeton Investments has created three multi-asset funds aligned to different risk levels: conservative, moderate and growth.
Each fund, seeks the highest level of long-term total return consistent with an acceptable level of risk.
These funds are rebalanced to ensure they stay matched to the appropriate risk tolerance.
Franklin NextStep Conservative Fund
Relative Risk
HIGHER
LOWER
1. Alternative investments include less traditional asset classes such as real estate, commodities and hedge strategies. Performance and market movement of alternative investments do not typically follow stocks and bonds.
Fund allocations are provided for illustrative purposes only. There is no guarantee that the Franklin NextStep Funds will be allocated in a similar manner.

6. Diversification One Fund—Many Fund Managers, Asset Classes & Countries
Franklin Templeton Mutual Funds and Exchange Traded Funds
Non-Franklin Templeton Mutual Funds and Exchange Traded Funds
FUND
FUND
FUND
Bonds
FUND
FUND
FUND MANAGERS
ASSET CLASSES
COUNTRIES
North America
Europe
FUND
Stocks
FUND
FUND
FUND
Emerging Markets
Asia
Alternative Investments1
Each Franklin NextStep Fund is one fund…
[Click] …with access to top tier investment managers.
The funds will typically invest no more than 50% in Franklin Templeton funds.
The remaining underlying funds are comprised of mutual funds and exchange traded funds managed by other fund companies.
[Speaker to discuss current holdings.]
[Click] Through this multi-asset fund approach, Franklin NextStep Funds offer a simple way to remain diversified across major asset classes, such as stocks and bonds.
Franklin NextStep Moderate Fund and Franklin NextStep Growth Fund may also allocate a relatively small percentage to alternative investments to further diversify, as these investments do not typically follow the market movements of stocks and bonds.
[Click] In addition, these funds are invested globally as other markets may provide global growth opportunities and may also help to reduce the risk of investing in only one country.
[Click] Franklin NextStep Funds offer fully diversified portfolios through the purchase of a single product.
That’s why Franklin NextStep Funds are the simple way to invest.
Broadly Diversified
Invested Globally
One Fund
Access to Top Tier Investment Managers
Diversification does not guarantee a profit or protect against a loss.
1. Alternative Investment Funds are included in the Franklin NextStep Moderate Fund and the Franklin NextStep Growth Fund.

7. Expertise Continuously Managed for Opportunities and Risks
Conservative
Moderate
Growth
Franklin NextStep Funds
Allocation Ranges
Stock Funds
10–30%
45–65%
60–80%
Bond Funds
70–90%
35–55%
20–40%
Alternative Investment Funds —
0-5%
0-10%
Target Allocations
Stock Funds
25%
60%
75%
Bond Funds
40%
Alternative Investment Funds —
Bear Market: Risks in the Market
Stock Funds
10%
45%
60%
Bond Funds
90%
55%
40%
Alternative Investment Funds —
0-5%
0-10%
Bull Market: Opportunities in the Market
Stock Funds
30%
65%
80%
Bond Funds
70%
35%
20%
Alternative Investment Funds —
0-5%
0-10%
As we saw earlier, each of the three Franklin NextStep Funds is allocated to a different risk/return level. What you see here is the long-term target allocation for each of the funds.
[Click] For example, the funds can increase their stock fund investments to help capitalize on opportunities in the market.
In addition, Franklin NextStep Moderate Fund and Franklin NextStep Growth Fund may add alternative investment funds to the portfolio in an attempt to increase growth potential.
Franklin NextStep Conservative Fund has a long-term target allocation to stock funds of 25% and to bond funds of 75%.
Investors in Franklin NextStep Moderate Fund should have a higher risk tolerance than those in Franklin NextStep Conservative Fund so the amount invested in stock funds is higher to increase the return potential.
[Click] If the portfolio managers anticipate significant risks in the market, they can decrease the amount invested in stock funds from the target allocation in an attempt to decrease volatility.
The fund allocates 60% of the portfolio to stock funds and 40% to bond funds.
Portfolio managers may also increase the amount invested in bond funds if they see that as a more attractive risk/return tradeoff.
Finally, Franklin NextStep Growth Fund offers the greatest risk/return potential for those looking for strong, long-term growth.
The portfolio managers can also use alternative investment funds in an attempt to reduce risk in the portfolio. Derivatives may also be used to assist the portfolio.
It allocates 75% to stock funds and 25% to bond funds.
One of the defining characteristics of these funds is the portfolio managers’ flexibility to adjust the amount invested in stock funds and bond funds.
[Click] In summary, the funds are able to adjust within these ranges to continuously stay aligned to objectives, while seeking to take advantage of opportunities and striving to avoid unnecessary risks.

8. Benefits to the Investor
World-Class Investment Management
An All-In-One Portfolio
Broadly Diversified with Access to Top Tier Managers
Matched to Investors Based on Risk and Goals
Investing with Franklin NextStep Funds is the easy way to invest. Why? Let’s summarize the benefits:
[Click] Franklin NextStep funds are managed by Franklin Templeton, a world- class investment manager and one of the largest asset managers in the world.
[Click] Franklin NextStep Funds offer an all-in-one portfolio through the purchase of a single product that invests in multiple underlying funds.
[Click] These funds are broadly diversified across fund managers, asset classes and countries. Franklin Templeton invests in a blend of mutual funds and exchange traded funds managed by Franklin Templeton and other fund groups.
[Click] Each Franklin NextStep Fund is aligned to a risk/return level that can be matched to investors based on their goals and risk tolerance.
[Click] Each fund is rebalanced and portfolio adjustments are made as managers seek to take advantage of opportunities and avoid unnecessary risks.
Continuously Managed to Align with Fund Objectives

9. Benefits to the Investor
Choose the Simple Way to Invest with
Franklin NextStep Funds

10. A Few More Words About Asset Allocation
While an asset allocation plan can be a valuable tool to help reduce overall volatility, all investments involve risks, including possible loss of principal. Because these funds invest in underlying funds, which may engage in a variety of investment strategies involving certain risks, the Franklin NextStep Funds are subject to those same risks. In addition, shareholders of the NextStep Funds will indirectly bear the fees and expenses of the underlying funds. The risks described herein are the principal risks of the Franklin NextStep Funds and the underlying funds. Typically, the more aggressive the investment, or the greater the potential return, the more risk involved. Generally, investors should be comfortable with some fluctuation in the value of their investments, especially over the short term. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in a fund adjust to a rise in interest rates, that fund’s share price may decline. Foreign investing carries additional risks such as currency and market volatility and political or social instability; risks which are heightened in developing countries. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the funds to participate in losses (as well as gains) that significantly exceed the funds’ initial investment. These risks are described in the funds’ prospectus. Investors should consult their financial advisor for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives and risk tolerance.

11. Franklin Templeton Investment Funds Offshore 100 Fountain Parkway
St. Petersburg, FL 33716
nextstepfunds.com
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.
The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All investments involve risks, including possible loss of principal.
Data from third party sources may have been used in the preparation of this material and Franklin Templeton Investments (“FTI”) has not independently verified, validated or audited such data. FTI accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments opinions and analyses in the material is at the sole discretion of the user.
Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FTI affiliates and/or their distributors as local laws and regulation permits. Please consult your own professional adviser for further information on availability of products and services in your jurisdiction.
In the U.S., this publication is made available only to financial intermediaries by Templeton/Franklin Investment Services, 100 Fountain Parkway, St. Petersburg, Florida Tel: (800) (USA Toll-Free), (877) (Canada Toll-Free), and Fax: (727) Investments are not FDIC insured; may lose value; and are not bank guaranteed.
Distribution outside the U.S. may be made by Templeton Global Advisors Limited or other sub-distributors, intermediaries, dealers or professional investors that have been engaged by Templeton Global Advisors Limited to distribute shares of Franklin Templeton funds in certain jurisdictions. This is not an offer to sell or a solicitation of an offer to purchase securities in any jurisdiction where it would be illegal to do so.
Please visit to be directed to your local Franklin Templeton website.
NSOA PPT 02/16