not fdic insured may lose value no bank guarantee investors should carefully consider a fund’s...
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Not FDIC Insured • May Lose Value • No Bank Guarantee
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information for any of the Franklin, Templeton or Mutual Series funds listed in this seminar, talk to your financial advisor, call (800) DIAL BEN/342-5236 or visit franklintempleton.com. Please read a prospectus carefully before you invest or send money.
VALUE BLEND GROWTH SECTOR GLOBAL INTERNATIONAL FIXED INCOME TAX-FREE INCOMEHYBRID ASSET ALLOCATION
Asset AllocationA STRATEGY FOR REAL-LIFE INVESTING
Agenda
• What Is Asset Allocation and How Can It Help You?
• Selecting the Right Allocation Plan
• Staying on Track
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Asset Allocation
WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU?
• Diversifies Your Investments
• Is a Common-SenseInvestment Strategy
• Tailored to Your Needsand Goals
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Benefits of Asset Allocation
Diversification does not eliminate the risk of loss.
WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU?
• May Reduce Overall Risk
• May Improve Your Chancesto Earn More ConsistentReturns over Time
• Helps Keep You Focusedon Your Goals
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Stocks and Bonds Are Just the Beginning
WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU?
Stocks
Growth Stocks
Value Stocks
Large-Cap Stocks
Small-Cap Stocks
Foreign Stocks
Bonds
U.S. Gov’t Bonds
Municipal Bonds
Corporate Bonds
Foreign Bonds
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Three Popular Strategies for Investing
This chart is for illustrative purposes only. It is important to note that an asset allocation strategy does not ensure results superior to other investment strategies and also does not guarantee a profit or protect against a loss. The chart does not represent the performance of any Franklin, Templeton or Mutual Series fund.
1. Source: © 2013 Morningstar. Large-cap stocks are represented by the S&P 500 Index; large-cap growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and S&P 500 Growth Index thereafter; large-cap value stocks are represented by the S&P 500/Barra Value Index until 1995 and S&P 500 Value Index thereafter; Small-cap stocks are represented by the Russell 2000® Index; small-cap growth stocks are represented by the Russell 2000 Growth Index; small-cap value stocks are represented by the Russell 2000 Value Index, foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays U.S. Aggregate Index.2. Each year’s new investments are made into the best-performing asset class index for the previous calendar year.3. Each year’s new investments are made into the worst-performing asset class index for the previous calendar year.4. Annual investments are distributed evenly among all eight asset class indices each calendar year and the portfolio is rebalanced annually.Past performance does not guarantee future results.Indexes are unmanaged and one cannot invest directly in an index.
Total Investment
Value of Portfolio
Average AnnualTotal Return
WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU?
For the 20-Year Period Ended December 31, 2012
2. Investing with the LoserInvesting in last year’s worst1,3
performing asset class$200,000 $425,008 6.73%
3. Asset AllocationInvesting consistently acrossseveral asset classes1,4
$200,000 $433,432 6.90%
1. Chasing the WinnersInvesting in last year’s best1,2 performing asset class
$200,000 $395,523 6.12%
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Source: © 2013 Morningstar. Large-cap stocks are represented by the S&P 500 Index; large-cap growth stocks are represented by the S&P 500/ Barra Growth Index until 1995 and S&P 500 Growth Index thereafter; large-cap value stocks are represented by the S&P 500/Barra Value Index until 1995 and S&P 500 Value Index thereafter; small-cap stocks are represented by the Russell 2000 Index; small-cap growth stocks are represented by the Russell 2000 Growth Index; small-cap value stocks are represented by the Russell 2000 Value Index, foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays U.S. Aggregate Index.Past performance does not guarantee future results.Indexes are unmanaged and one cannot invest directly in an index.
WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU?
Why Diversify? Because Winners RotateAnnual Returns of Key Asset Classes 1993–2012
Diversification does not guarantee a profit or protect against a loss.
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Why Diversify? Because Winners Rotate
WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU?
Annual Returns of Key Asset Classes 1993–2012
Diversification does not guarantee a profit or protect against a loss.
Source: © 2013 Morningstar. Large-cap stocks are represented by the S&P 500 Index; large-cap growth stocks are represented by the S&P 500/ Barra Growth Index until 1995 and S&P 500 Growth Index thereafter; large-cap value stocks are represented by the S&P 500/Barra Value Index until 1995 and S&P 500 Value Index thereafter; small-cap stocks are represented by the Russell 2000 Index; small-cap growth stocks are represented by the Russell 2000 Growth Index; small-cap value stocks are represented by the Russell 2000 Value Index, foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays U.S. Aggregate Index.Past performance does not guarantee future results.Indexes are unmanaged and one cannot invest directly in an index.
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Source: © 2013 Morningstar. Stock investments are represented by equal investments in the S&P 500 Index, Russell 2000 Index and MSCI EAFE Index, representing large U.S. stocks, small U.S. stocks and foreign stocks, respectively. Bonds are represented by the Barclays U.S. Aggregate Index. Cash equivalents are represented by the Payden & Rygel 90-Day U.S. Treasury Bill Index. Portfolios are rebalanced annually. Indexes are unmanaged, and one cannot invest directly in an index.These sample portfolios offer a general idea of what various asset allocation plans look like and how they have performed over time. Franklin Templeton recommends consulting a professional financial advisor to help you determine if certain adjustments are needed to keep your asset allocation plan balanced and on target.Past performance does not guarantee future results.
SELECTING THE RIGHT ALLOCATION PLAN
What Kind of Allocation Is Right for Me?Asset-Allocated Sample Portfolios: 12/31/92–12/31/12
100% Stocks
20-Year Average Annual Return 7.93%
Best One-Year Return 38.37%
Worst One-Year Return -37.95%
80% Stocks • 20% Bonds
20-Year Average Annual Return 7.94%
Best One-Year Return 31.52%
Worst One-Year Return -29.31%
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Source: © 2013 Morningstar. Stock investments are represented by equal investments in the S&P 500 Index, Russell 2000 Index and MSCI EAFE Index, representing large U.S. stocks, small U.S. stocks and foreign stocks, respectively. Bonds are represented by the Barclays U.S. Aggregate Index. Cash equivalents are represented by the Payden & Rygel 90-Day U.S. Treasury Bill Index. Portfolios are rebalanced annually. Indexes are unmanaged, and one cannot invest directly in an index.These sample portfolios offer a general idea of what various asset allocation plans look like and how they have performed over time. Past performance does not guarantee future results.
What Kind of Allocation Is Right for Me?Asset-Allocated Sample Portfolios: 12/31/92–12/31/12
SELECTING THE RIGHT ALLOCATION PLAN
60% Stocks • 40% Bonds
20-Year Average Annual Return 7.76%
Best One-Year Return 24.66%
Worst One-Year Return -20.67%
40% Stocks • 40% Bonds • 20% Cash Equivalents
20-Year Average Annual Return 6.79%
Best One-Year Return 18.92%
Worst One-Year Return -12.66%
20% Stocks • 60% Bonds • 20% Cash Equivalents
20-Year Average Annual Return 6.32%
Best One-Year Return 17.44%
Worst One-Year Return -4.03%
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0% 5% 10% 15% 20% 25%0%
5%
10%
15%
20%
Asset Allocation Portfolio
Bonds Foreign Stocks
Small Value Stocks
Large Value Stocks
Small Growth Stocks
Large Growth Stocks
Risk
Return
Source: © 2013 Morningstar. 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. Risk is measured by annualized standard deviation of monthly total returns. Indexes are unmanaged and one cannot invest directly in an index. The asset-allocated portfolio is rebalanced annually.Past performance does not guarantee future results.
Based on an 80% Stock; 20% Bond Allocation For the 20-Year Period Ended December 31, 2012
SELECTING THE RIGHT ALLOCATION PLAN
Put Risk and Reward in PerspectiveThis Asset-Allocated Portfolio Would Have Given You Comparable Returns with Less Risk
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Source: © 2012 Morningstar.
STAYING ON TRACK
Staying on TrackOriginal Allocation: 80% Stocks, 20% BondsDecember 31, 2007
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Large Growth Stocks16%
Small Growth Stocks16%
Large Value Stocks16%
Small Value Stocks16%
Foreign Stocks16%
Bonds20%
STAYING ON TRACK
Staying on TrackAllocation 5 Years Later: 74% Stocks, 26% BondsDecember 31, 2012
Source: © 2013 Morningstar.
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Large Growth Stocks 17%
Small Growth Stocks17%
Large Value Stocks14%Small Value Stocks
17%
Foreign Stocks 12%
Bonds24%
1. The fund is closed to new investors, with the exception of select retirement plans. Existing shareholders may continue adding to their accounts.
Large Stocks Large Value Stocks Foreign Stocks
Franklin Focused Core Equity Fund Franklin Equity Income Fund Mutual Global Discovery Fund
Franklin Rising Dividends Fund Franklin Large Cap Value Fund Templeton Foreign Fund
Large Growth Stocks Mutual Beacon Fund Templeton Growth Fund
Franklin Flex Cap Growth Fund Mutual Quest Fund Bonds
Franklin Growth Fund Mutual Shares Fund Franklin Strategic Income Fund
Franklin Growth Opportunities Fund Small Value Stocks Franklin Total Return Fund
Small Growth Stocks Franklin Balance Sheet Investment Fund Franklin U.S. Government Securities Fund
Franklin Small Cap Growth Fund Franklin MicroCap Value Fund1 Templeton Global Bond Fund
Franklin Small-Mid Cap Growth Fund Franklin Small Cap Value Fund 32 Municipal Bond Funds
Diversification does not assure a profit or protect against a loss.Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com. Please carefully read a prospectus before investing.
STAYING ON TRACK
Franklin Templeton Helps You Diversify
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Actively Managed Target Date Portfolios1
• Franklin LifeSmart™ 2015 Retirement Target Fund• Franklin LifeSmart™ 2025 Retirement Target Fund• Franklin LifeSmart™ 2035 Retirement Target Fund • Franklin LifeSmart™ 2045 Retirement Target Fund
Actively Managed Target Risk Portfolios• Franklin Templeton Conservative Allocation Fund• Franklin Templeton Moderate Allocation Fund• Franklin Templeton Growth Allocation Fund
Static Allocation Portfolios• Franklin Templeton Corefolio® Allocation Fund • Franklin Templeton Founding Funds Allocation Fund
• Franklin LifeSmart™ 2020 Retirement Target Fund• Franklin LifeSmart™ 2030 Retirement Target Fund• Franklin LifeSmart™ 2040 Retirement Target Fund• Franklin LifeSmart™ 2050 Retirement Target Fund
STAYING ON TRACK
Combination Funds Can Make Asset Allocation Easier
Diversification does not assure a profit or protect against a loss.Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com. Please carefully read a prospectus before investing.1. Investors generally choose the fund that has the stated target date most closely approximating their retirement date. It’s important to note that the principal value of the fund will fluctuate and is not guaranteed at any time, including at or after the stated target date for the fund; nor is there any guarantee that the fund will provide sufficient income, at or through the investor’s retirement.
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Review
• What Is Asset Allocationand How Can It Help You?
• Selecting the RightAllocation Plan
• Staying on Track
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What Do I Do Now?
• Determine YourFinancial Goals
• Schedule a Meeting with Your Financial Advisor
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