Franklin Templeton Shariah Funds

Value

Templeton Shariah Global Equity Fund Fund Profile

FUND OBJECTIVE

Fund Details Inception Date

10 September 2012

Investment Style

Value

Benchmark(s)

MSCI AC World Islamic Index

Templeton Shariah Global Equity Fund (the “Fund”) seeks long-term capital growth by investing primarily in Shariah compliant equity securities of companies located anywhere in the world, including Emerging Markets. The Fund managers believe that greater value can be found by looking at companies globally rather than by limiting oneself to a single market.

WHY CONSIDER THIS FUND

Sir John Templeton Founder, Templeton Funds

“It just stands to reason that if you’re looking all over the world, you will find better bargains than if you’re looking in only one nation.”

Commitment to Shariah investing principles. Templeton brings a premier global equity strategy, with a value investment style and a research process that has been tested over 70 years, to investors seeking Shariah-compliant investing. We apply our asset management expertise in combination with the knowledge and advice of Shariah scholars to offer investors a Shariah-compliant portfolio. The Fund is independently reviewed and endorsed by the Amanie International Shariah Supervisory Board, highly regarded for their extensive Shariah and technical understanding. The Amanie Scholars provide initial approval on investment objectives and strategy, as well as on going supervisory and monitoring services to ensure continuous adherence to internationally accepted Shariah principles and standards. A clear philosophy, consistently applied. For more than 70 years, Templeton has been synonymous with global investment management. We believe in a consistent, long-term strategy based on the three timeless principles of investing: value, patience and bottom-up. Capitalising on global investment opportunities. Templeton has always believed that when searching for the best investment opportunities, bargains are borderless. To find the most promising companies, the Fund managers leverage the experience and resource infrastructure developed over the last 70 years, including analysts and offices that span the globe, from Asia to Europe to the Americas. The Fund invests in both developed and emerging markets. Lower volatility through diversification. Individual markets outperform one another in varying time periods and therefore investing in different countries can help diversify market risk. The Fund invests in stocks across different geographies, sectors and market capitalisation. Practice patient, long-term investing. The Fund managers seek to identify companies that, in their view, are trading at the greatest discount to future intrinsic value, which over time may produce greater upside potential at lower risk.

For Professional Investor Use Only. Not for Distribution to Retail Investors.

Templeton Shariah Global Equity Fund INVESTMENT PHILOSOPHY & PROCESS Founded in 1940, Templeton’s investment philosophy is built upon a disciplined, yet flexible, long-term value-oriented approach. It is based on three tenets that we believe are critical to successful long-term investing: value, patience and bottom-up stock selection. Value. We seek to identify the underlying worth of a business and determine what that company’s assets can generate in earnings and cash flow. We put all of our research efforts into identifying stocks trading at a discount to what our research indicates the company is worth. As long-term valuation-driven investors, we focus on normalised earnings to seek out compelling opportunities in all sectors and markets around the globe. Patience. Stock markets are often short sighted and affected by sentiment, which creates short-term distortions in share prices. Templeton’s long-term focus allows us to look past short-term market noise and identify the fundamental value of a stock. Through our strong research, we determine what a company is worth and patiently wait for the opportunity to purchase it at bargain levels. The depth of our research also gives us the conviction to wait for the market to reflect the fair value of a stock once it is added to our portfolios. Bottom-Up. We conduct comprehensive fundamental analysis to assess a company’s long-term prospects and catalysts for value recognition. Templeton’s commitment to original research drives our process to uncover opportunities wherever they may exist. Templeton’s investment process consists of five steps: Step 1: Identify Potential Bargains Templeton’s unconstrained search for value allows us to identify bargains wherever they exist. Quantitative screening, qualitative assessment and the deep experience of our analysts narrows the investable universe of approved Shariah-compliant companies down to a group of securities that merits closer analysis. Our best screen is our experience: Templeton portfolio managers and analysts are industry experts with a comprehensive knowledge of every aspect of their industries. Step 2: In-Depth Fundamental Analysis At Templeton, in-depth fundamental analysis is the foundation of our investment process. Our analysts have been aligned by global industry, with secondary country coverage. This multi-faceted global approach to industry, sector and country research coverage offers a comprehensive perspective. Templeton analysts conduct rigorous fundamental security analysis on all potential investment ideas to determine if the

stock is trading at a substantial discount to what our research indicates the company is worth over a normalised five-year investment horizon. This focus on the long term ensures that our research is not biased by short-term cyclical considerations. Step 3: Research Team Evaluation Templeton’s collaborative culture ensures that each stock recommendation is thoroughly debated and critiqued. Research meetings, during which analysts present overviews of their stock recommendations to the team, are conducted twice-weekly, and a Devil’s Advocate is appointed to take the lead in the questioning of each potential investment idea. This ensures a focused discussion, with each investment idea subjected to the intense scrutiny and rigorous examination of the entire team. Stocks are approved for the Bargain List when the recommendation passes the Templeton Global Equity Group’s scrutiny, and the Director of Research determines that the analysis has met Templeton’s standards. • The Bargain List is comprised of companies that our analysts have determined are mispriced by the market and most undervalued relative to their business prospects based upon our five-year normalised earnings and/or cash flow forecasts. • The Core List consists of stocks that are still attractively valued but above Bargain List cut-offs. These undervalued stocks still have significant upside potential and are typically the main drivers of portfolio performance. • The Source of Funds List consists of companies that our analysts believe are fully valued, and are recommended for sale. Step 4: Bottom-Up Portfolio Construction At Templeton, we believe that the best investment decisions draw on the collective knowledge of the entire research team. Original research is the foundation of our approach, and the portfolio construction process leverages the insights of all our portfolio managers/analysts within a disciplined framework. All Templeton portfolios are built from the bottom up, on a stock-by-stock basis, with a consistent focus on long-term valuations. As we are concerned first and foremost with the pursuit of compelling valuations, we do not construct portfolios to match the characteristics of any specific benchmark. Our country and industry allocations are a result of the bottom-up stock selection process. When selecting stocks, the portfolio manager has discretion but must do so within a disciplined, structured framework of controls designed to ensure consistency and diversification for all clients as well as compliance to accepted Shariah principles and standards.

For Professional Investor Use Only. Not for Distribution to Retail Investors.

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Templeton Shariah Global Equity Fund

Step 5: Portfolio Monitoring and Risk Management Templeton actively manages our clients’ portfolios to ensure they continually reflect our best thinking. This is accomplished through a team commitment to ongoing fundamental research and risk management. Several internal groups work closely with our portfolio managers to monitor portfolios and manage risk, and their strong input and support is critical to the portfolio management process.

valued but above Bargain List cut-offs). Each stock has an established valuation or price target that is set by the analyst responsible for recommending the security, and stocks are purchased only when the price is within this pre-set price range. A stock is moved to the Source of Funds List (those stocks our analysts believe are fully valued) and sold if: • The security price exceeds our estimation of value,

PORTFOLIO CONSTRUCTION

• Greater value exists in another similar security, or

Templeton does not use model portfolios. All portfolios are built from the approved stock lists that comprise Templeton’s Global Research Database. Portfolio managers select stocks from the Bargain List, which is comprised of companies our analysts believe are most undervalued relative to their longer-term business prospects, and the more attractively valued end of the Core List (stocks that are still attractively

• A fundamental change occurs at a company to alter our forecasts. All holdings are regularly reviewed to ensure that analyst recommendations are up-to-date and accurately reflect any changes in company fundamentals. In this way, our ongoing fundamental research drives all buy and sell decisions.

A Disciplined, Repeatable Process, Tailored for Shariah Investors

For Professional Investor Use Only. Not for Distribution to Retail Investors.

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Templeton Shariah Global Equity Fund RISK MANAGEMENT The Fund has specific investment guidelines and requirements that are set forth by the board of directors of Franklin Templeton Investment Funds and reviewed on a quarterly basis to ensure that the risk management process is adhered to: Stock Selection Constraints Portfolio managers have discretion in selecting stocks for the portfolio, but they must be within the approved stock list and general guidelines. Asset Classes The Fund invests primarily in equities. Country/Regional and Sector Limits There are no limits. Min/Max Stock Positions Individual stock positions are limited, with a typical weighting of 1% to 3%.

Additionally, market, political and economic risks are taken into account and addressed primarily at the stock level. Analysts take all political, economic and currency factors into consideration when making financial forecasts and recommendations.

PORTFOLIO MANAGEMENT TEAM The Fund is managed by members of the Templeton Global Equity Group, which consists of 23 portfolio managers/analysts and 14 dedicated research analysts located in offices worldwide. All portfolio managers also have research analyst responsibilities. Team members are organised along global industry lines, allowing them to compare companies on a worldwide basis without country limitations. Alan Chua is the lead portfolio manager of the Templeton Shariah Global Equity Fund.

Cash Policy Portfolio managers intend to remain fully invested at all times with a maximum cash position of 5%. Currency Policy Portfolios are not actively hedged. Capitalisation Limits In general, there are no established minimum market-cap guidelines. However for reason of liquidity, the analysts only research companies with more than US$150 million in free float. Risk management is integrated into every aspect of the Fund’s investment process. We primarily focus on three types of risk: • Stock-specific risk is addressed primarily through the quality of Templeton’s research. A disciplined sell methodology also helps minimise stock-specific risk. • Portfolio risk is addressed by creating fund portfolios that are well-diversified and benefit from Templeton’s best thinking. Weekly peer reviews allow portfolio managers to review their positioning relative to their peers and internal guidelines, and to ensure that each portfolio continually reflects Templeton’s best investment practices. • Operational risk is minimised by the due diligence of the portfolio managers and the separation of all major investment and its related functions. A comprehensive system of checks and balances involving distinct and independent groups ensures that all investment guidelines and restrictions are strictly adhered to.

For Professional Investor Use Only. Not for Distribution to Retail Investors.

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Templeton Shariah Global Equity Fund

Peter Wilmshurst, CFA

Alan Chua, CFA

Executive Vice President Templeton Global Equity Group Franklin Templeton Investments Australia Limited

Executive Vice President, Portfolio Manager, Research Analyst

Templeton Global Equity Group

Melbourne, Victoria, Australia

Templeton Asset Management Limited Singapore

Alan Chua, Executive Vice President, joined the Templeton organisation in 2000. He is the lead manager of the Templeton Global Equity Group in Singapore for a number of institutional and retail clients based both in and outside Singapore. Mr. Chua has global research responsibilities for auto components (consumer discretionary) and machinery (industrials), as well as country research coverage of Japan, Singapore and Malaysia. Mr. Chua earned a B.Sc. in economics from the University of Oregon and an M.B.A. from the London Business School. Mr. Chua is a Chartered Financial Analyst (CFA) Charterholder

Peter Wilmshurst, executive vice president, joined the Templeton organisation in Fort Lauderdale in 1998. Mr. Wilmshurst has research responsibility for banks in Europe, Middle-East and Africa, and Asian telecommunications companies. He is also the portfolio manager of a number of Templeton's global portfolios. Mr. Wilmshurst earned a bachelor of economics degree and a master of economics degree from Macquarie University (Australia). He qualified as a Fellow of the Institute of the Actuaries of Australia and as a Fellow of the Financial Services Institute of Australia. Mr. Wilmshurst is a Chartered Financial Analyst (CFA) Charterholder and is a Past President of the CFA Society of Melbourne.

Simon Rudolph, ACA Executive Vice President, Portfolio Manager, Research Analyst Templeton Global Equity Group Franklin Templeton Investments (Asia) Ltd, Hong Kong

Simon Rudolph, executive vice president, joined the Templeton organisation in 1997 as a portfolio manager and research analyst. He has research responsibility for the Asian real estate and REIT sectors, as well as country research coverage of India, Taiwan, Korea, Philippines, Thailand, Indonesia and Vietnam. Previously, he researched global shipping as well as the food, personal care and household products industries, and had country coverage of Japan. He manages global, international and regional Asia Pacific and Asian portfolios. Mr. Rudolph holds a B.A. degree in economic history from Durham University, England. He is a Chartered Accountant (ACA) and a member of the Institute of Chartered Accountants of England and Wales.

For Professional Investor Use Only. Not for Distribution to Retail Investors.

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Templeton Shariah Global Equity Fund

AMANIE INTERNATIONAL SHARIAH SUPERVISORY BOARD

Sheikh Dr. Mohamed Ali Elgari, Chairman, Kingdom of Saudi Arabia Dr. Mohamed Ali Elgari is a Professor of Islamic Economics and the former Director of the Centre for Research in Islamic Economics at King Abdul Aziz University in Saudi Arabia. He is an advisor to many Islamic financial institutions throughout the world and is also on the Shariah board of the Dow Jones Islamic index. He is also a member of the Islamic Fiqh Academy as well as the Islamic Accounting & Auditing Organisation for Islamic Financial Institution (AAOIFI). Dr. Elgari has written several books on Islamic banking. He graduated from the University of California with a Ph.D in Economics.

Dr. Muhammad Amin Ali Qattan, Kuwait Dr. Muhammad Amin Ali Qattan is a prolific author of texts and articles on Islamic economics and finance. He is currently the Director of Islamic Economics Unit, Centre of Excellence in Management at Kuwait University. He also serves as the Shariah advisor to many reputable institutions such as Ratings Intelligence, Standard & Poors Shariah Indices, Al Fajer Retakaful amongst others. Dr. Qattan is a highly regarded Shariah Scholar and is based in Kuwait. He has a Ph.D. in Islamic Banking from Birmingham University (UK).

Dr. Mohd Daud Bakar, Malaysia Dr. Mohd Daud Bakar is currently the Chairman of the Shariah Advisory Council at the Central Bank of Malaysia, the Securities Commission of Malaysia and the Labuan Financial Services Authorities. He was previously the Deputy Vice-Chancellor at the International Islamic University (Malaysia). Dr. Bakar is a Shariah board member of various financial institutions, including the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) (Bahrain), Morgan Stanley (Dubai), Bank of London and Middle East (London), Noor Islamic Bank (Dubai), JadwaRussell Islamic Fund (Saudi Arabia), Salama Islamic Insurance, amongst many others.

Dr. Osama Al Dereai, Qatar Dr. Osama Al Dereai is a Shariah scholar from Qatar. He has extensive experience in teaching, consulting and research in the field of Islamic finance. He received his Bachelor's degree specialising in the Science of Hadeth Al Sharef from the prestigious Islamic University of Madinah (Saudi Arabia). He obtained his Masters degree from the International Islamic University (Malaysia) and was later conferred his Doctorate in Islamic Transactions from the University of Malaya. Dr Al Dereai is a Shariah board member of various financial institutions which include the First Leasing Company, Barwa Bank, First Investment Company and Ghanim Al Saad Group of Companies amongst others.

For Professional Investor Use Only. Not for Distribution to Retail Investors.

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Templeton Shariah Global Equity Fund

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. Templeton Shariah Global Equity Fund is a sub-fund of the Luxembourg-domiciled SICAV Franklin Templeton Shariah Funds. Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from Franklin Templeton International Services S.à r.l., 8A rue Albert Borschette, L-1246 Luxembourg. Commission and incentives may be paid and if so, would be included in the overall costs. Franklin Templeton Shariah Funds (“FTSF”) are priced on a forward basis and prices are calculated daily. FTSF does not provide any guarantee either with respect to the capital or the return of a portfolio. FTSF is regulated in Luxembourg and the FTSF sub-funds available for public sale in South Africa are approved by the Financial Services Board. Franklin Templeton Investments SA (PTY) Ltd (“FTISA”) is an authorised Financial Services Provider. FTISA is a Member of the Association for Savings & Investment SA (ASISA). Copies of the latest prospectus, Minimum Disclosure Document (MDD) and the latest annual and semi-annual reports of FTSF are available on the website www.franklintempleton.co.za or may be obtained free of charge from Franklin Templeton International Services S.à r.l., 8A rue Albert Borschette, L-1246 Luxembourg or your local FTI representative. Performance is quoted in USD or in the base currency of the fund and its respective share classes currencies. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, your performance may also be affected by currency fluctuations. In emerging markets, the risks can be greater than in developed markets. Investments in derivative instruments entail specific risks that may increase the risk profile of the fund and are more fully described in the Fund’s prospectus. The investment activities will be undertaken in accordance with the Shariah Guidelines. As a consequence, the performance of a Fund may possibly be lower than other investment funds that do not seek to strictly adhere to the Islamic investment criteria. The requirement to “purify” cash holdings or dividend income will likely result in payments being made to charities. The return to investors will be reduced by the amount of such payments. The International Shariah Supervisory Board of Amanie Advisors Sdn Bhd has certified that the Fund is in compliance with the requirements of the Shariah principles.

For Professional Investor Use Only. Not for Distribution to Retail Investors. DE © 2015 Franklin Templeton Investments. All rights reserved.

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