Franklin Low Duration Total Return Fund Q3 2024 Commentary (FLDZX)

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Details

Inception Date

11/17/2004

Benchmark

Bloomberg US Government & Credit

(1-3 Year) Index

Fund Description

The fund seeks to provide a high level of current income consistent with prudent investing, while seeking preservation of capital. The fund primarily invests in debt securities, which may be represented by derivatives that provide exposure to debt securities. The fund focuses on government and corporate debt securities and mortgage- and asset-backed securities. The fund targets an estimated average portfolio duration of three years or less. a

Investment Team

Kent Burns, CFA Years with Firm 30 Years Experience 31

Patrick A. Klein, Ph.D. Years with Firm 19 Years Experience 19

Michael V Salm Years with Firm 26 Years Experience 35

Tina Chou

Years with Firm 19 Years Experience 21

Sameer Kackar, CFA Years with Firm 4 Years Experience 16

Periods shorter than one year are shown as cumulative total returns. The fund’s 30-Day SEC Yield is calculated using the net income (interest and dividends) per share earned over a trailing 30-day period (annualized), divided by the fund’s share price at the end of that period. It may not equal the fund’s actual income distribution rate, which reflects the fund’s past dividends paid to shareholders.

What Are The Risks?

All investments involve risks, including possible loss of principal. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. As set-backed, mortgage-backed or mortgage- related securities are subject to prepayment and extension risks. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. These and other risks are discussed in the fund’s prospectus.

Important Information

The information provided is not a complete analysis of every material fact regarding any country, market, industry, security or fund. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this material and may change without notice. A portfolio manager’s assessment of a particular security, investment or strategy is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy; it is intended only to provide insight into the fund’s portfolio selection process. Holdings are subject to change.

Before investing, carefully consider a fund’s investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at www.franklintempleton.com. Please read it carefully.

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Source: FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com.

Although US government-sponsored entities may be chartered or sponsored by Acts of Congress, their securities are neither issued nor guaranteed by the US government. Please see the fund’s prospectus for a detailed discussion regarding various levels of credit support for government agency or instrumentality securities. The fund’s yield and share price are not guaranteed and will vary with market conditions. Gross expenses are the fund’s total annual operating expenses as of the fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns. Net expenses reflect contractual fee waivers, expense caps and/or reimbursements, which cannot be terminated prior to 02/28/2025 without Board consent. Additional amounts may be voluntarily waived and/or reimbursed and may be modified or discontinued at any time without notice. Performance quotations for this class reflect the following methods of calculation: a) For periods prior to the fund’s Advisor Class inception date, a restated figure is used based on the fund’s oldest share class, Class A performance, excluding the effect of Class A’s maximum initial sales charge but reflecting the effect of the Class A Rule 12b-1 fees; and b) for periods after the fund’s Advisor Class inception date, actual Advisor Class performance is used, reflecting all charges and fees applicable to that class.

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