Legg Mason Partners Investment Trust
Prospectus May 31,
2023
FRANKLIN MULTI-ASSET ALLOCATION FUNDS
FRANKLIN MULTI-ASSET GROWTH FUND
Share class
(Symbol): A (SCHAX), C
(SCHCX), R (LLLRX), I (LANIX), IS (LLISX)
FRANKLIN MULTI-ASSET MODERATE GROWTH FUND
Share class
(Symbol): A (SCGRX), C
(SCGCX), R (LLMRX), I (LLAIX), IS (LLMSX)
FRANKLIN MULTI-ASSET CONSERVATIVE GROWTH FUND
Share class
(Symbol): A (SBBAX), C
(SCBCX), R (LLARX), I (LMEIX), IS (LCGSX)
FRANKLIN MULTI-ASSET DEFENSIVE GROWTH FUND
Share class
(Symbol): A (SBCPX), C
(LWLAX), C1 (SBCLX), R (LMLRX), I (LMGIX), IS (LMGSX)
The
Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this Prospectus is accurate or complete. Any
statement to the contrary is a crime.
|
INVESTMENT
PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE
VALUE |
|
| |
2 |
|
Franklin
Multi-Asset Allocation Funds |
Franklin Multi-Asset
Growth Fund
Investment objective
The
fund seeks capital appreciation.
Fees and expenses of the
fund
The
accompanying table describes the fees and expenses that you may pay if you buy,
hold and sell shares of the fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
You may qualify for sales charge discounts
if you and your family invest, or agree to invest in the future, at least
$25,000 in funds distributed through
Franklin Distributors, LLC (“Franklin Distributors” or the “Distributor”), the
fund’s distributor. More information about these and other
discounts is available from your Service Agent, in the fund’s Prospectus on page
66 under the heading “Additional information about each share class,” in the
appendix titled “Appendix: Waivers and Discounts Available from Certain Service
Agents” on page A‑1 of the fund’s Prospectus and in the fund’s Statement of
Additional Information (“SAI”) on page 88 under the heading “Sales Charge
Waivers and Reductions for Class A Shares.” “Service Agents” include banks,
brokers, dealers, insurance companies, investment advisers, financial
consultants or advisers, mutual fund supermarkets and other financial
intermediaries that have entered into an agreement with the Distributor to sell
shares of the fund.
If
you purchase Class I shares or Class IS shares through a Service Agent
acting solely as an agent on behalf of its customers, that Service Agent may
charge you a commission. Such commissions, if any, are not charged by the fund
and are not reflected in the fee table or expense example
below.
|
| |
| |
| |
| |
| |
Shareholder
fees |
(fees paid directly
from your investment) |
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
Class C |
|
Class R |
|
Class I |
|
Class IS |
Maximum sales charge (load) imposed on
purchases (as a % of offering price) |
|
5.501,2 |
|
None |
|
None |
|
None |
|
None |
Maximum deferred sales charge (load) (as a % of
the lower of net asset value at purchase or redemption)3 |
|
None4 |
|
1.00 |
|
None |
|
None |
|
None |
Small account fee5 |
|
$15 |
|
$15 |
|
None |
|
None |
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
Annual fund
operating expenses (%) |
|
|
|
|
|
|
|
|
|
|
(expenses that you pay
each year as a percentage of the value of your
investment) |
|
|
Class A |
|
Class C |
|
Class R |
|
Class I |
|
Class IS |
Management fees |
|
None |
|
None |
|
None |
|
None |
|
None |
Distribution and/or service (12b‑1)
fees |
|
0.25 |
|
1.00 |
|
0.50 |
|
None |
|
None |
Other expenses |
|
0.19 |
|
0.17 |
|
0.27 |
|
0.15 |
|
0.046 |
Acquired fund fees and expenses |
|
0.76 |
|
0.76 |
|
0.76 |
|
0.76 |
|
0.76 |
Total annual fund operating expenses7 |
|
1.20 |
|
1.93 |
|
1.53 |
|
0.91 |
|
0.80 |
1 |
The
sales charge is waived for shareholders purchasing Class A shares
through accounts where Franklin Distributors is the broker-dealer of
record (“Distributor Accounts”). |
2 |
Shareholders purchasing Class A
shares through certain Service Agents or in certain types of accounts may
be eligible for a waiver of the sales charge. For additional information,
see “Additional information about each share class — Sales charges” in the
Prospectus. |
3 |
Maximum
deferred sales charge (load) may be reduced over
time. |
4 |
You may buy
Class A shares in amounts of $1,000,000 or more at net asset value
(without an initial sales charge), but if you redeem those shares within
18 months of their purchase, you will pay a contingent deferred sales
charge of 1.00%. |
|
|
|
|
|
| |
Franklin Multi-Asset Growth
Fund |
|
| |
|
3 |
|
5 |
If
the value of your account is below $1,000 ($250 for retirement plans that
are not employer-sponsored), the fund may charge you a fee of $3.75 per
account that is determined and assessed quarterly by the fund or your
Service Agent (with an annual maximum of $15.00 per account). Please
contact your Service Agent or the fund for more
information. |
6 |
Other expenses for
Class IS shares are estimated for the current fiscal year. Actual
expenses may differ from
estimates. |
7 |
Total annual
fund operating expenses do not correlate with the ratios of expenses to
average net assets reported in the financial highlights tables in the
fund’s Prospectus and in the fund’s shareholder reports, which reflect the
fund’s operating expenses and do not include acquired fund fees and
expenses. |
Example
This
example is intended to help you compare the cost of investing in the fund with
the cost of investing in other mutual funds. The example assumes:
• |
|
You
invest $10,000 in the fund for the time periods
indicated |
• |
|
Your
investment has a 5% return each year and the fund’s operating expenses
remain the same (except that any applicable fee waiver or expense
reimbursement is reflected only through its expiration
date) |
• |
|
You
reinvest all distributions and dividends without a sales
charge |
Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
|
|
|
|
|
|
|
| |
Number of years you own
your shares ($) |
|
|
1 year |
|
3 years |
|
5 years |
|
10 years |
Class A
(with or without redemption at end of period) |
|
666 |
|
911 |
|
1,174 |
|
1,926 |
Class C
(with redemption at end of period) |
|
296 |
|
606 |
|
1,042 |
|
2,065 |
Class C
(without redemption at end of period) |
|
196 |
|
606 |
|
1,042 |
|
2,065 |
Class R
(with or without redemption at end of period) |
|
156 |
|
484 |
|
834 |
|
1,824 |
Class I
(with or without redemption at end of period) |
|
93 |
|
291 |
|
505 |
|
1,120 |
Class IS
(with or without redemption at end of period) |
|
82 |
|
256 |
|
444 |
|
990 |
Portfolio
turnover. The fund pays
transaction costs, such as commissions, when it buys and sells securities (or
“turns over” its portfolio). A higher portfolio turnover rate may indicate
higher transaction costs and may result in higher taxes when shares are held in
a taxable account. These costs, which are not reflected in annual fund operating
expenses or in the example, affect the fund’s performance. During the most
recent fiscal year, the fund’s portfolio turnover rate was 52% of the average value of its
portfolio.
Principal investment
strategies
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market conditions, the portfolio
managers will allocate between 70% to 100% of the fund’s assets to underlying
funds that invest in equity and equity-like strategies and between 0% to 30% of
the fund’s assets to underlying funds that invest in fixed income strategies.
The portfolio managers may, however, allocate fund assets to any underlying
funds in varying amounts in a manner consistent with the fund’s investment
objective. The fund’s allocation to each class will be measured at the time of
purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark as defined under “Performance”
below.
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative investments (such as
commodities, real estate assets and infrastructure assets). The underlying
equity funds may employ strategies similar to those used by hedge funds, which
may have a low correlation to broad stock market movements or take both long and
short positions in equity securities. The underlying fixed income funds include
funds investing in any sector, region or style, including foreign fixed income
strategies, currency strategies, inflation-indexed securities, structured credit
and distressed debt. The underlying fixed income funds may take both long and
short positions in fixed income securities. Such funds may also seek to profit
from changes in global financial markets and take positions to take advantage of
changes in interest rates, exchange rates, liquidity and other macroeconomic
factors. The underlying fixed income funds may also invest in securities having
maturities of any length and any credit quality, including securities rated
below investment grade (commonly known as “junk bonds”). The portfolio managers
may invest the fund’s assets in underlying funds that have a limited performance
history.
|
| |
4 |
|
Franklin
Multi-Asset Growth Fund |
Principal risks
Risk
is inherent in all investing. The value of your investment in the fund, as well
as the amount of return you receive on your investment, may fluctuate
significantly. You may lose part or all
of your investment in the fund or your investment may not perform as well as
other similar investments. An investment in the fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or by any
bank or government agency. The following is a list of the
principal risks of investing in the fund. The descriptions appear in
alphabetical order, not order of importance.
The
fund invests in underlying funds and is exposed to the risks to which the
underlying funds are exposed, as well as the risk that the underlying funds will
not perform as expected. Unless otherwise noted, the principal risks summarized
below include both direct and indirect risks, and references in this section to
the fund include the risks of investing in the underlying funds.
Affiliated funds
risk. The fund’s manager, subadviser or
an affiliate serves as manager or subadviser of certain Legg Mason and Franklin
Templeton affiliated underlying funds (“Affiliated Funds”). As a result, the
manager and the subadviser have financial incentives to allocate the fund’s
assets to Affiliated Funds that pay fees to the manager, the subadviser or an
affiliate. For example, the manager and the subadviser have an incentive to
select Affiliated Funds that will result in the greatest revenue to the manager
and its affiliates, even if that results in increased expenses for the fund.
Similarly, the manager and the subadviser have an incentive to delay or decide
against the sale of interests held by a fund in Affiliated Funds. This gives
rise to a conflict of interest.
Allocation
risk. The fund’s ability to achieve its
investment goal depends upon the portfolio managers’ skill in determining the
fund’s strategic asset class allocation and in selecting the mix of underlying
funds. The value of your investment may decrease if the portfolio managers’
judgment about the attractiveness, value or market trends affecting a particular
asset class, investment style, underlying fund or other issuer is incorrect.
Asset class
variation risk. An underlying fund that
invests principally in securities constituting one or more asset classes (i.e.,
equity or fixed income) may vary the percentage of its assets in these asset
classes (subject to any applicable regulatory requirements).
Credit
risk. If an issuer or guarantor of
a security held by the fund or a counterparty to a financial contract with the
fund defaults or its credit is downgraded, or is perceived to be less
creditworthy, or if the value of the assets underlying a security declines, the
value of your investment will typically decline. Changes in actual or perceived
creditworthiness may occur quickly. The fund could be delayed or hindered in its
enforcement of rights against an issuer, guarantor or counterparty. Subordinated
securities (meaning securities that rank below other securities with respect to
claims on the issuer’s assets) are more likely to suffer a credit loss than
non‑subordinated securities of the same issuer and will be disproportionately
affected by a default, downgrade or perceived decline in creditworthiness.
Cybersecurity
risk. Cybersecurity incidents, whether
intentionally caused by third parties or otherwise, may allow an unauthorized
party to gain access to fund assets, fund or customer data (including private
shareholder information) or proprietary information, cause the fund, the
manager, the subadvisers and/or their service providers (including, but not
limited to, fund accountants, custodians, sub‑custodians, transfer agents and
financial intermediaries) to suffer data breaches, data corruption or loss of
operational functionality, or prevent fund investors from purchasing, redeeming
or exchanging shares, receiving distributions or receiving timely information
regarding the fund or their investment in the fund. The fund, the manager, and
the subadvisers have limited ability to prevent or mitigate cybersecurity
incidents affecting third party service providers, and such third party service
providers may have limited indemnification obligations to the fund, the manager,
and/or the subadvisers. Cybersecurity incidents may result in financial losses
to the fund and its shareholders, and substantial costs may be incurred in order
to prevent or mitigate any future cybersecurity incidents. Issuers of securities
in which the fund invests are also subject to cybersecurity risks, and the value
of these securities could decline if the issuers experience cybersecurity
incidents.
Because
technology is frequently changing, new ways to carry out cyber attacks are
always developing. Therefore, there is a chance that some risks have not been
identified or prepared for, or that an attack may not be detected, which puts
limitations on the fund’s ability to plan for or respond to a cyber attack. Like
other funds and business enterprises, the fund, the manager, the subadvisers and
their service providers are subject to the risk of cyber incidents occurring
from time to time.
Derivatives
risk. Using derivatives can increase
fund losses and reduce opportunities for gains, such as when market prices,
interest rates, currencies, or the derivatives themselves behave in a way not
anticipated by the fund. Using derivatives also can have a leveraging
effect and increase fund volatility. Certain derivatives have the potential for
unlimited loss, regardless of the size of the initial investment. Derivatives
may not be available at the time or price desired, may be difficult to sell,
unwind or value, and the counterparty may default on its obligations to the
fund. Derivatives are generally subject to the risks applicable to the assets,
rates, indices or other indicators underlying the derivative. The value of a
derivative may fluctuate more than the underlying assets, rates, indices or
other indicators to which it relates. Use of derivatives may have different tax
consequences for the fund than an investment in the underlying asset, and those
differences may affect the amount, timing and character of income distributed to
shareholders. The U.S. government and foreign governments have adopted and
implemented or are in the process of adopting and implementing regulations
governing derivatives markets, including mandatory clearing of certain
derivatives, margin and reporting requirements. The ultimate impact of the
regulations remains unclear. Additional regulation of derivatives may make
derivatives more costly, limit their availability or utility, otherwise
adversely affect their performance or disrupt markets.
Credit
default swap contracts involve heightened risks and may result in losses to the
fund. Credit default swaps may be illiquid and difficult to value. When the fund
sells credit protection via a credit default swap, credit risk increases since
the fund has exposure to both the issuer whose credit is the subject of the swap
and the counterparty to the swap.
|
|
|
|
|
| |
Franklin Multi-Asset Growth
Fund |
|
| |
|
5 |
|
Extension
risk. When interest rates rise,
repayments of fixed income securities may occur more slowly than anticipated,
extending the effective duration of these fixed income securities at below
market interest rates and causing their market prices to decline more than they
would have declined due to the rise in interest rates alone. This may cause the
fund’s share price to be more volatile.
Fixed income
securities risk. Fixed income securities
are subject to a number of risks, including credit, market and interest rate
risks. Credit risk is the risk that the issuer or obligor will not make timely
payments of principal and interest. Changes in an issuer’s or obligor’s credit
rating or the market’s perception of an issuer’s or obligor’s creditworthiness
may also affect the value of the fund’s investment in that issuer. The fund is
subject to greater levels of credit risk to the extent it holds below investment
grade debt securities, or “junk” bonds. Market risk is the risk that the fixed
income markets may become volatile and have lower liquidity or behave in
unexpected ways, and the market value of an investment may decrease, sometimes
quickly or unpredictably. Interest rate risk is the risk that the value of a
fixed income security will fall when interest rates rise. A rise in interest
rates tends to have a greater impact on the prices of longer term or duration
securities. A general rise in interest rates may cause investors to move out of
fixed income securities on a large scale, which could adversely affect the price
and liquidity of fixed income securities.
Foreign investments
and emerging markets risk. The fund’s investments in securities of
foreign issuers or issuers with significant exposure to foreign markets involve
additional risk as compared to investments in U.S. securities or issuers with
predominantly domestic exposure, such as less liquid, less transparent, less
regulated and more volatile markets. The value of the fund’s investments may
decline because of factors affecting the particular issuer as well as foreign
markets and issuers generally, such as unfavorable or unsuccessful government
actions, reduction of government or central bank support, inadequate accounting
standards and auditing and financial recordkeeping requirements, lack of
information, political, economic, financial or social instability, terrorism,
armed conflicts and other geopolitical events, and the impact of tariffs and
other restrictions on trade or economic sanctions. Geopolitical or other events
such as nationalization or expropriation could even cause the loss of the fund’s
entire investment in one or more countries.
In
addition, there may be significant obstacles to obtaining information necessary
for investigations into or litigation against issuers located in or operating in
certain foreign markets, particularly emerging market countries, and
shareholders may have limited legal remedies. To the extent the fund focuses its
investments in a single country or only a few countries in a particular
geographic region, economic, political, regulatory or other conditions affecting
such country or region may have a greater impact on fund performance relative to
a more geographically diversified fund.
The
value of investments in securities denominated in foreign currencies increases
or decreases as the rates of exchange between those currencies and the U.S.
dollar change. Currency conversion costs and currency fluctuations could
erase investment gains or add to investment losses. Currency exchange rates can
be volatile, and are affected by factors such as general economic and political
conditions, the actions of the U.S. and foreign governments or central banks,
the imposition of currency controls and speculation. The fund may be unable or
may choose not to hedge its foreign currency
exposure.
Less
developed markets are more likely to experience problems with the clearing and
settling of trades and the holding of securities by local banks, agents and
depositories. Settlement of trades in these markets can take longer than in
other markets and the fund may not receive its proceeds from the sale of certain
securities for an extended period (possibly several weeks or even
longer).
The
risks of foreign investments are heightened when investing in issuers in
emerging market countries. Emerging market countries tend to have economic,
political and legal systems that are less developed and are less stable than
those of more developed countries. Their economies tend to be less diversified
than those of more developed countries. They typically have fewer medical and
economic resources than more developed countries, and thus they may be less able
to control or mitigate the effects of a pandemic or a natural disaster. They are
often particularly sensitive to market movements because their market prices
tend to reflect speculative expectations. Low trading volumes may result in
a lack of liquidity and in extreme price
volatility.
Growth and value
investing risk. Growth or value
securities as a group may be out of favor and underperform the overall equity
market while the market favors other types of securities. Growth securities
typically are very sensitive to market movements because their market prices
tend to reflect future expectations. When it appears those expectations will not
be met, the prices of growth securities typically fall. Growth securities may
also be more volatile than other investments because they often do not pay
dividends. The values of growth securities tend to go down when interest rates
rise because the rise in interest rates reduces the current value of future cash
flows. The value approach to investing involves the risk that stocks may remain
undervalued, undervaluation may become more severe, or perceived undervaluation
may actually represent intrinsic value. A value stock may not increase in price
as anticipated by the subadviser if other investors fail to recognize the
company’s value and bid up the price or the factors that the subadviser believes
will increase the price of the security do not occur or do not have the
anticipated effect.
Hedge fund
strategies risk. The fund, through the
underlying funds, may employ investment strategies that involve greater risks
than the strategies used by typical mutual funds, including increased use of
short sales, leverage and derivative transactions and hedging strategies. The
fund may invest in underlying funds employing proprietary investment strategies
that are not fully disclosed, which may involve risks that are not anticipated.
Hedge fund strategies may be narrowly focused on a particular market, security
type or activity, and thus are exposed to greater risk of loss if the investment
thesis underlying the strategy does not occur as anticipated. Hedge fund
strategies that are intended to reduce the fund’s volatility may fail to do so
effectively. The use of leverage by a hedge fund strategy (e.g., through
options) will magnify any losses incurred by the strategy.
High yield (“junk”)
bonds risk. High yield bonds are
generally subject to greater credit risks than higher-grade bonds, including the
risk of default on the payment of interest or principal. High yield bonds
are considered speculative, typically have lower liquidity and are more
difficult to value than
|
| |
6 |
|
Franklin
Multi-Asset Growth Fund |
higher
grade bonds. High yield bonds tend to be volatile and more susceptible to
adverse events, credit downgrades and negative sentiments and may be difficult
to sell at a desired price, or at all, during periods of uncertainty or market
turmoil.
Illiquidity
risk. Some assets held by the fund may
be or become impossible or difficult to sell and some assets that the fund wants
to invest in may be impossible or difficult to purchase, particularly during
times of market turmoil or due to adverse changes in the conditions of a
particular issuer. These illiquid assets may also be volatile and difficult to
value. Markets may become illiquid when, for instance, there are few, if any,
interested buyers or sellers or when dealers are unwilling or unable to make a
market for certain securities. As a general matter, dealers have been less
willing to make markets for fixed income securities. Federal banking regulations
may also cause certain dealers to reduce their inventories of certain
securities, which may further decrease the fund’s ability to buy or sell such
securities. During times of market turmoil, there have been, and may be, no
buyers or sellers for securities in entire asset classes. If the fund is forced
to sell an illiquid asset to meet redemption requests or other cash needs, or to
try to limit losses, the fund may be forced to sell at a substantial loss or may
not be able to sell at all. The fund may not receive its proceeds from the sale
of certain securities for an extended period (for example, several weeks or even
longer). The liquidity of certain assets, particularly of privately-issued and
non‑investment grade mortgage-backed securities, asset-backed securities and
collateralized debt securities, may be difficult to ascertain and may change
over time.
Investing in a fund
of funds risk. Your cost of investing in
the fund, as a fund of funds, may be higher than the cost of investing in a
mutual fund that only invests directly in individual equity and fixed income
securities. Because the fund will indirectly bear its pro rata share of the fees
and expenses incurred by an underlying fund in which it invests, including
advisory fees, an increase in fees and expenses of an underlying fund or a
reallocation of the fund’s investments to underlying funds with higher fees or
expenses will increase the fund’s total expenses. These expenses are in addition
to other expenses that the fund bears directly in connection with its own
operations. An underlying fund may change its investment objective or policies
without the fund’s approval, which could cause the fund to withdraw its
investment from such underlying fund at a time that is unfavorable to the fund.
In addition, one underlying fund may buy the same securities that another
underlying fund sells. Therefore, the fund would indirectly bear the costs of
these trades without accomplishing any investment purpose. If underlying funds
invest in the same or similar securities, the fund may indirectly bear
concentration risk with respect to those investments. If the fund invests in an
underlying fund that has recently commenced operations, there can be no
assurance that such underlying fund will grow to or maintain an economically
viable size, in which case the underlying fund’s board or adviser may determine
to liquidate the underlying fund or the fund may indirectly bear higher
expenses.
Investing in ETFs
risk. Unlike shares of typical mutual
funds or unit investment trusts, shares of ETFs are traded on an exchange and
may trade throughout a trading day. ETFs are bought and sold based on market
values and not at net asset value, and therefore may trade at either a premium
or discount to net asset value and may experience volatility in certain market
conditions. The fund will pay brokerage commissions in connection with the
purchase and sales of shares of ETFs. In addition, the fund will indirectly bear
its pro rata share of fees and expenses incurred by an ETF in which it invests,
including advisory fees. These expenses are in addition to expenses that the
fund bears directly in connection with its own operations. Certain ETFs are also
subject to portfolio management risk. Investments in ETFs are subject to the
risk that the listing exchange may halt trading of an ETF’s shares, in which
case the fund would be unable to sell its ETF shares unless and until trading is
resumed.
Issuer
risk. The market price of a security can
go up or down more than the market as a whole and can perform differently from
the value of the market as a whole, due to factors specifically relating to the
security’s issuer, such as disappointing earnings reports by the issuer,
unsuccessful products or services, loss of major customers, changes in
management, corporate actions, negative perception in the marketplace, or major
litigation or changes in government regulations affecting the issuer or the
competitive environment. An individual security may also be affected by factors
relating to the industry or sector of the issuer. The fund may experience a
substantial or complete loss on an individual security. A change in financial
condition or other event affecting a single issuer may adversely impact the
industry or sector of the issuer or securities markets as a whole.
Large capitalization
company risk. Large capitalization
companies may fall out of favor with investors based on market and economic
conditions. In addition, larger companies may not be able to attain the high
growth rates of successful smaller companies and may be less capable of
responding quickly to competitive challenges and industry changes. As a result,
the fund’s value may not rise as much as, or may fall more than, the value of
funds that focus on companies with smaller market capitalizations.
Long/short strategy
risk. While the fund may invest in long
positions and short positions, there is the risk that the investments will not
perform as expected. The fund’s long/short strategy may result in greater losses
than if the fund held only long positions, as losses on one type of position
could more than offset gains on the other or a fund could lose money on both
positions. The fund’s short positions could result in unlimited losses if the
fund does not own the asset sold short and it is unable to close out of the
short sale or short position.
Market events
risk. The market values of securities or
other assets will fluctuate, sometimes sharply and unpredictably, due to changes
in general market conditions, overall economic trends or events, governmental
actions or intervention, actions taken by the U.S. Federal Reserve or foreign
central banks, market disruptions caused by trade disputes or other factors,
political developments, armed conflicts, economic sanctions and countermeasures
in response to sanctions, major cybersecurity events, investor sentiment, the
global and domestic effects of a pandemic, and other factors that may or may not
be related to the issuer of the security or other asset. Economies and financial
markets throughout the world are increasingly interconnected. Economic,
financial or political events, trading and tariff arrangements, public health
events, terrorism, wars, natural disasters and other circumstances in one
country or region could have profound impacts on global economies or markets. As
a result, whether or not the fund invests in securities of issuers located in or
with significant exposure to the countries or markets directly affected, the
value and liquidity of the fund’s investments may be negatively affected.
Following Russia’s invasion of Ukraine, Russian stocks lost all, or nearly all,
of their market value. Other securities or markets could be similarly affected
by past or future geopolitical or other events or conditions. Furthermore,
events involving
|
|
|
|
|
| |
Franklin Multi-Asset Growth
Fund |
|
| |
|
7 |
|
limited
liquidity, defaults, non‑performance or other adverse developments that affect
one industry, such as the financial services industry, or concerns or rumors
about any events of these kinds, have in the past and may in the future lead to
market-wide liquidity problems, may spread to other industries, and could
negatively affect the value and liquidity of the fund’s
investments.
The
fallout from the COVID‑19 pandemic and its subsequent variants, and the
long-term impact on economies, markets, industries and individual issuers, are
not known. Some sectors of the economy and individual issuers have experienced
or may experience particularly large losses. Periods of extreme volatility in
the financial markets; reduced liquidity of many instruments; and disruptions to
supply chains, consumer demand and employee availability, may continue for some
time.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Recently, inflation and interest rates have increased and may rise further.
These circumstances could adversely affect the value and liquidity of the fund’s
investments, impair the fund’s ability to satisfy redemption requests, and
negatively impact the fund’s
performance.
The
United States and other countries are periodically involved in disputes over
trade and other matters, which may result in tariffs, investment restrictions
and adverse impacts on affected companies and securities. For example, the
United States has imposed tariffs and other trade barriers on Chinese exports,
has restricted sales of certain categories of goods to China, and has
established barriers to investments in China. Trade disputes may adversely
affect the economies of the United States and its trading partners, as well as
companies directly or indirectly affected and financial markets
generally. In addition, the Chinese government is involved in a
longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the United States and China does not improve or
continues to deteriorate, if China were to attempt unification of Taiwan by
force, or if other geopolitical conflicts develop or get worse, economies,
markets and individual securities may be severely affected both regionally and
globally, and the value of the fund’s assets may go
down.
Portfolio management
risk. The value of your investment may
decrease if the judgment of the fund’s adviser about the attractiveness, value
of, or market trends affecting, a particular security, industry, sector or
region, or about market movements, is incorrect or does not produce the desired
results, or if there are imperfections, errors or limitations in the models,
tools and data used by the portfolio managers. In addition, the fund’s
investment strategies or policies may change from time to time. Those changes
may not lead to the results intended by the portfolio managers and could have an
adverse effect on the value or performance of the fund.
Prepayment or call
risk. Many issuers have a right to
prepay their fixed income securities. Issuers may be more likely to prepay their
securities if interest rates fall. If this happens, the fund may not benefit
from the rise in the market price of the securities that normally accompanies a
decline in interest rates, and will be forced to reinvest prepayment proceeds at
a time when yields on securities available in the market are lower than the
yield on prepaid securities. The fund may also lose any premium it paid to
purchase the securities.
Real assets
risk. Investments in the real estate,
natural resources and commodities sectors involve a high degree of risk,
including significant financial, operating, and competitive risks. Investments
in royalty trusts, real estate investment trusts and master limited partnerships
expose the fund to adverse macroeconomic conditions, such as changes and
volatility in commodity prices, a rise in interest rates or a downturn in the
economy in which the asset is located, elevating the risk of loss.
Small and
mid‑capitalization company risk. The
fund will be exposed to additional risks as a result of its investments in the
securities of small and mid‑capitalization companies. Small and
mid‑capitalization companies may fall out of favor with investors; may have
limited product lines, operating histories, markets or financial resources; or
may be dependent upon a limited management group. The prices of securities of
small and mid‑capitalization companies generally are more volatile than those of
large capitalization companies and are more likely to be adversely affected than
large capitalization companies by changes in earnings results and investor
expectations or poor economic or market conditions, including those experienced
during a recession. Securities of small and mid‑capitalization companies may
underperform large capitalization companies, may be harder to sell at times and
at prices the portfolio managers believe appropriate and may have greater
potential for losses.
Stock market and
equity securities risk. The stock
markets are volatile and the market prices of the fund’s equity securities may
decline generally. Equity securities may include warrants, rights,
exchange-traded and over‑the‑counter common stocks, preferred stock, depositary
receipts, trust certificates, limited partnership interests and shares of other
investment companies, including exchange-traded funds and real estate investment
trusts. Equity securities may have greater price volatility than other asset
classes, such as fixed income securities, and may fluctuate in price based on
actual or perceived changes in a company’s financial condition and overall
market and economic conditions and perceptions. If the market prices of the
equity securities owned by the fund fall, the value of your investment in the
fund will decline.
Valuation
risk. The sales price the fund could
receive for any particular portfolio investment may differ from the fund’s
valuation of the investment, particularly for securities that trade in thin or
volatile markets or that are valued using a fair value methodology. These
differences may increase significantly and affect fund investments more broadly
during periods of market volatility. Investors who purchase or redeem fund
shares on days when the fund is holding fair-valued securities may receive fewer
or more shares or lower or higher redemption proceeds than they would have
received if the fund had not fair-valued securities or had used a different
valuation methodology. The fund’s ability to value its investments may be
impacted by technological issues and/or errors by pricing services or other
third party service providers. The valuation of the fund’s investments involves
subjective judgment, which may prove to be incorrect.
These
and other risks are discussed in more detail in the Prospectus or in the
Statement of Additional Information.
|
|
|
| |
8 |
|
| |
Franklin
Multi-Asset Growth Fund |
Performance
The
accompanying bar chart and table provide some indication of the risks of
investing in the fund. The bar chart
shows changes in the fund’s performance from year to year for Class A
shares. The table shows the average annual total returns of each class of
the fund that has been in operation for at least one full calendar year and also
compares the fund’s performance with the average annual total returns of an
index or other benchmark. The fund also compares its
performance to the Bloomberg U.S. Aggregate Index (an index of fixed income
securities) and a composite benchmark, which is a hypothetical representation of
the performance of the fund’s major asset classes, consisting of 45% Russell
1000 Index, 20% Russell 2000 Index, 20% MSCI EAFE Index, 10% Bloomberg U.S.
Aggregate Index and 5% Bloomberg U.S. High Yield—2% Issuer Cap Index (an index
where issuer exposure is limited to 2% of the market value of the Bloomberg U.S.
Corporate High Yield Index). Performance for classes other
than those shown may vary from the performance shown to the extent the expenses
for those classes differ. The fund makes updated performance information,
including its current net asset value, available at www.franklintempleton.com/mutualfunds
(select fund and share class), or by calling the fund at
877‑6LM‑FUND/656‑3863.
The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the
future.
Sales charges are not reflected in
the accompanying bar chart, and if those charges were included, returns would be
less than those shown.
Best Quarter (06/30/2020): 15.73 Worst
Quarter (03/31/2020): (22.45)
The
year‑to‑date return as of the
most recent calendar quarter, which ended March 31, 2023, was
5.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average annual total returns
(%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(for periods ended
December 31, 2022) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A |
|
|
1 year |
|
|
|
5 years |
|
|
|
10 years |
|
|
|
Since inception |
|
|
|
Inception date |
|
Return
before taxes |
|
|
(19.00) |
|
|
|
2.62 |
|
|
|
6.23 |
|
|
|
|
|
|
|
|
|
Return
after taxes on distributions |
|
|
(20.59) |
|
|
|
0.91 |
|
|
|
4.55 |
|
|
|
|
|
|
|
|
|
Return
after taxes on distributions and sale of fund shares |
|
|
(10.12) |
|
|
|
1.83 |
|
|
|
4.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other Classes
(Return before taxes only) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C |
|
|
(15.50) |
|
|
|
3.13 |
|
|
|
6.13 |
|
|
|
|
|
|
|
|
|
Class R |
|
|
(14.32) |
|
|
|
3.48 |
|
|
|
N/A |
|
|
|
4.50 |
|
|
|
06/02/2014 |
|
Class I |
|
|
(13.88) |
|
|
|
4.12 |
|
|
|
7.16 |
|
|
|
|
|
|
|
|
|
Bloomberg
U.S. Aggregate Index (reflects no deduction for fees, expenses or
taxes)1 |
|
|
(13.01) |
|
|
|
0.02 |
|
|
|
1.06 |
|
|
|
|
|
|
|
|
|
Russell
3000 Index (reflects no deduction for fees, expenses or taxes)2 |
|
|
(19.21) |
|
|
|
8.79 |
|
|
|
12.13 |
|
|
|
|
|
|
|
|
|
Composite
Benchmark (reflects no deduction for fees, expenses or taxes)3 |
|
|
(17.25) |
|
|
|
5.62 |
|
|
|
8.79 |
|
|
|
|
|
|
|
|
|
1 |
For
Class R shares, for the period from the class’ inception date to
December 31, 2022, the average annual total return of the Bloomberg
U.S. Aggregate Index was 1.06%. |
2 |
For
Class R shares, for the period from the class’ inception date to
December 31, 2022, the average annual total return of the Russell
3000 Index was 9.93%. |
3 |
For Class R shares, for the period
from the class’ inception date to December 31, 2022, the average
annual total return of the Composite Benchmark was
6.90%. |
Prior
to June 1, 2015, the fund followed different investment policies and
strategies.
The after‑tax returns are shown
only for Class A shares, are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after‑tax returns
depend on an investor’s tax situation and may differ from those shown, and the
after‑tax returns shown are not relevant to investors who hold their fund shares
through tax‑deferred arrangements, such as 401(k) plans or individual retirement
accounts. After‑tax returns
for classes other than Class A will vary from returns shown for
Class A. Returns after taxes on
distributions and sale of fund shares are higher than returns before taxes for
certain periods shown because they reflect the tax benefit of capital losses
realized on the redemption of fund
shares.
|
|
|
|
|
| |
Franklin Multi-Asset Growth
Fund |
|
| |
|
9 |
|
Management
Investment manager:
Legg Mason Partners Fund Advisor, LLC
(“LMPFA”)
Subadviser: Franklin Advisers, Inc. (“Franklin Advisers”)
Portfolio managers:
Primary responsibility for the
day‑to‑day management of the fund lies with the following portfolio managers. At
Franklin Advisers, all portfolios are managed on a collaborative basis using a
systematic, rules based approach.
|
|
|
| |
Portfolio
manager |
|
Title |
|
Portfolio manager of the fund since |
Laura Green, CFA |
|
Portfolio Manager |
|
2021 |
Jacqueline Kenney, CFA |
|
Portfolio Manager |
|
2021 |
Purchase and sale of fund
shares
You
may purchase, redeem or exchange shares of the fund each day the New York Stock
Exchange is open, at the fund’s net asset value determined after receipt of your
request in good order, subject to any applicable sales charge.
The
fund’s initial and subsequent investment minimums generally are set forth in the
accompanying table:
|
|
|
|
|
|
|
|
|
| |
Investment minimum initial/additional investment
($) |
|
|
Class A |
|
Class C1 |
|
Class R |
|
Class I |
|
Class IS |
General |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/ None2 |
|
N/A |
Uniform
Gifts or Transfers to Minor Accounts |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/ None2 |
|
N/A |
IRAs |
|
250/50 |
|
250/50 |
|
N/A |
|
1 million/ None2,3 |
|
N/A3 |
SIMPLE
IRAs |
|
None/
None |
|
None/
None |
|
N/A |
|
1 million/ None2 |
|
N/A |
Systematic
Investment Plans |
|
25/25 |
|
25/25 |
|
N/A |
|
1 million/ None2,4 |
|
N/A4 |
Clients
of Eligible Financial Intermediaries |
|
None/
None |
|
N/A |
|
None/ None |
|
None/ None5 |
|
None/ None5 |
Eligible
Investment Programs |
|
None/
None |
|
N/A |
|
None/ None |
|
None/ None |
|
None/ None |
Omnibus
Retirement Plans |
|
None/
None |
|
None/
None |
|
None/ None |
|
None/ None |
|
None/ None |
Individual
Retirement Plans except as noted |
|
None/
None |
|
None/
None |
|
N/A |
|
1 million/ None2 |
|
N/A |
Institutional
Investors |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/ None |
|
1 million/ None |
1 |
Class
C shares are not available for purchase through Distributor Accounts.
|
2 |
Available
to investors investing directly with the fund. |
3 |
IRA
accountholders who purchase Class I or Class IS shares through a
Service Agent acting as agent on behalf of its customers are subject to
the initial and subsequent minimums of $250/$50. If a Service Agent does
not have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
4 |
Investors
investing through a Systematic Investment Plan who purchase Class I
or Class IS shares through a Service Agent acting as agent on behalf
of its customers are subject to the initial and subsequent minimums of
$25/$25. If a Service Agent does not have this arrangement in place with
the Distributor, the initial and subsequent minimums listed in the table
apply. Please contact your Service Agent for more information.
|
5 |
Individual
investors who purchase Class I shares or Class IS shares through
a Service Agent acting as agent on behalf of its customers are subject to
the initial and subsequent minimums of $1,000/$50. If a Service Agent does
not have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
Your
Service Agent may impose higher or lower investment minimums, or may impose no
minimum investment requirement.
For
more information about how to purchase, redeem or exchange shares, and to learn
which classes of shares are available to you, you should contact your Service
Agent, or, if you hold your shares or plan to purchase shares through the fund,
you should contact the fund by phone at 877‑6LM‑FUND/656‑3863, by regular mail
at Legg Mason Funds, P.O. Box 33030, St. Petersburg, FL 33733-8030 or by
express, certified or registered mail at Legg Mason Funds, 100 Fountain Parkway,
St. Petersburg, FL 33716-1205.
Tax information
The
fund’s distributions are generally taxable as ordinary income or capital gains.
|
|
|
| |
10 |
|
| |
Franklin
Multi-Asset Growth Fund |
Payments to
broker/dealers and other financial intermediaries
The
fund’s related companies pay Service Agents for the sale of fund shares,
shareholder services and other purposes. These payments create a conflict of
interest by influencing your Service Agent or its employees or associated
persons to recommend the fund over another investment. Ask your financial
adviser or salesperson or visit your Service Agent’s or salesperson’s website
for more information.
|
|
|
|
|
| |
Franklin Multi-Asset Growth
Fund |
|
| |
|
11 |
|
Franklin Multi-Asset
Moderate Growth Fund
Investment objective
The
fund seeks long-term growth of capital.
Fees and expenses of the
fund
The
accompanying table describes the fees and expenses that you may pay if you buy,
hold and sell shares of the fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
You may qualify for sales charge discounts
if you and your family invest, or agree to invest in the future, at least
$25,000 in funds distributed through
Franklin Distributors, LLC (“Franklin Distributors” or the “Distributor”), the
fund’s distributor. More information about these and other
discounts is available from your Service Agent, in the fund’s Prospectus on page
66 under the heading “Additional information about each share class,” in the
appendix titled “Appendix: Waivers and Discounts Available from Certain Service
Agents” on page A‑1 of the fund’s Prospectus and in the fund’s Statement of
Additional Information (“SAI”) on page 88 under the heading “Sales Charge
Waivers and Reductions for Class A Shares.” “Service Agents” include banks,
brokers, dealers, insurance companies, investment advisers, financial
consultants or advisers, mutual fund supermarkets and other financial
intermediaries that have entered into an agreement with the Distributor to sell
shares of the fund.
If
you purchase Class I shares or Class IS shares through a Service Agent
acting solely as an agent on behalf of its customers, that Service Agent may
charge you a commission. Such commissions, if any, are not charged by the fund
and are not reflected in the fee table or expense example
below.
|
| |
| |
| |
| |
| |
Shareholder fees
|
(fees paid directly from
your investment) |
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
Class C |
|
Class R |
|
Class I |
|
Class IS |
Maximum sales charge (load) imposed on
purchases (as a % of offering price) |
|
5.501,2 |
|
None |
|
None |
|
None |
|
None |
Maximum deferred sales charge (load) (as a % of
the lower of net asset value at purchase or redemption)3 |
|
None4 |
|
1.00 |
|
None |
|
None |
|
None |
Small account fee5 |
|
$15 |
|
$15 |
|
None |
|
None |
|
None |
|
|
Annual fund
operating expenses (%) |
|
|
|
|
|
|
|
|
|
|
(expenses that you pay each
year as a percentage of the value of your
investment) |
|
|
Class A |
|
Class C |
|
Class R |
|
Class I |
|
Class IS |
Management fees |
|
None |
|
None |
|
None |
|
None |
|
None |
Distribution and/or service (12b‑1)
fees |
|
0.25 |
|
1.00 |
|
0.50 |
|
None |
|
None |
Other expenses |
|
0.20 |
|
0.19 |
|
0.79 |
|
0.11 |
|
0.066 |
Acquired fund fees and expenses |
|
0.75 |
|
0.75 |
|
0.75 |
|
0.75 |
|
0.75 |
Total annual fund operating expenses7 |
|
1.20 |
|
1.94 |
|
2.04 |
|
0.86 |
|
0.81 |
Fees waived and/or expenses reimbursed8 |
|
— |
|
— |
|
(0.49) |
|
— |
|
— |
Total annual fund operating expenses after
waiving fees and/or reimbursing expenses9 |
|
1.20 |
|
1.94 |
|
1.55 |
|
0.86 |
|
0.81 |
1 |
The
sales charge is waived for shareholders purchasing Class A shares
through accounts where Franklin Distributors is the broker-dealer of
record (“Distributor Accounts”). |
2 |
Shareholders purchasing Class A
shares through certain Service Agents or in certain types of accounts may
be eligible for a waiver of the sales charge. For additional information,
see “Additional information about each share class — Sales charges” in the
Prospectus. |
3 |
Maximum
deferred sales charge (load) may be reduced over
time. |
4 |
You may buy Class A shares in amounts of $1,000,000 or
more at net asset value (without an initial sales charge), but if you
redeem those shares within 18 months of their purchase, you will pay a
contingent deferred sales charge of
1.00%. |
|
|
|
| |
12 |
|
| |
Franklin
Multi-Asset Moderate Growth Fund |
5 |
If
the value of your account is below $1,000 ($250 for retirement plans that
are not employer-sponsored), the fund may charge you a fee of $3.75 per
account that is determined and assessed quarterly by the fund or your
Service Agent (with an annual maximum of $15.00 per account). Please
contact your Service Agent or the fund for more
information. |
6 |
Other expenses for
Class IS shares are estimated for the current fiscal year. Actual
expenses may differ from
estimates. |
7 |
Total annual
fund operating expenses do not correlate with the ratios of expenses to
average net assets reported in the financial highlights tables in the
fund’s Prospectus and in the fund’s shareholder reports, which reflect the
fund’s operating expenses and do not include acquired fund fees and
expenses. |
8 |
The
manager has agreed to waive fees and/or reimburse operating expenses
(other than interest, brokerage, taxes, extraordinary expenses and
acquired fund fees and expenses) so that the ratio of total annual fund
operating expenses will not exceed 0.80% for Class A shares, 1.55%
for Class C shares, 0.80% for Class R shares, 0.25% for
Class I shares and 0.15% for Class IS shares, subject to
recapture as described below. In addition, the ratio of total annual fund
operating expenses for Class IS shares will not exceed the ratio of
total annual fund operating expenses for Class I shares, subject to
recapture as described below. These arrangements cannot be terminated
prior to December 31,
2024 without the Board of Trustees’ consent. The manager
is permitted to recapture amounts waived and/or reimbursed to a class
during the same fiscal year in which the manager earned the fee or
incurred the expense if the class’ total annual fund operating expenses
have fallen to a level below the limits described above. In no case will
the manager recapture any amount that would result, on any particular
business day of the fund, in the class’ total annual fund operating
expenses exceeding the applicable limits described above or any other
lower limit then in effect. |
9 |
Total
annual fund operating expenses (after waiving fees and/or reimbursing
expenses, as applicable) are higher than the expense cap amounts for each
class as a result of acquired fund fees and
expenses. |
Example
This
example is intended to help you compare the cost of investing in the fund with
the cost of investing in other mutual funds. The example assumes:
• |
|
You
invest $10,000 in the fund for the time periods
indicated |
• |
|
Your
investment has a 5% return each year and the fund’s operating expenses
remain the same (except that any applicable fee waiver or expense
reimbursement is reflected only through its expiration
date) |
• |
|
You
reinvest all distributions and dividends without a sales
charge |
Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
|
|
|
|
|
|
|
| |
Number of years you own
your shares ($) |
|
|
1 year |
|
3 years |
|
5 years |
|
10 years |
Class A
(with or without redemption at end of period) |
|
666 |
|
911 |
|
1,174 |
|
1,926 |
Class C
(with redemption at end of period) |
|
297 |
|
609 |
|
1,047 |
|
2,073 |
Class C
(without redemption at end of period) |
|
197 |
|
609 |
|
1,047 |
|
2,073 |
Class R
(with or without redemption at end of period) |
|
158 |
|
593 |
|
1,054 |
|
2,331 |
Class I
(with or without redemption at end of period) |
|
88 |
|
274 |
|
476 |
|
1,060 |
Class IS
(with or without redemption at end of period) |
|
83 |
|
259 |
|
450 |
|
1,003 |
Portfolio turnover.
The fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when shares are held in a taxable account.
These costs, which are not reflected in annual fund operating expenses or in the
example, affect the fund’s performance. During the most recent fiscal year,
the fund’s portfolio turnover rate was 51% of the average value of its
portfolio.
Principal investment
strategies
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market conditions, the portfolio
managers will allocate between 55% to 85% of the fund’s assets to underlying
funds that invest in equity and equity-like strategies and between 15% to 45% of
the fund’s assets to underlying funds that invest in fixed income strategies.
The portfolio managers may, however, allocate fund assets to any underlying
funds in varying amounts in a manner consistent with the fund’s investment
objective. The fund’s allocation to each class will be measured at the time of
purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark as defined under “Performance”
below.
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative
|
|
|
|
|
| |
Franklin Multi-Asset Moderate
Growth Fund |
|
| |
|
13 |
|
investments
(such as commodities, real estate assets and infrastructure assets). The
underlying equity funds may employ strategies similar to those used by hedge
funds, which may have a low correlation to broad stock market movements or take
both long and short positions in equity securities. The underlying fixed income
funds include funds investing in any sector, region or style, including foreign
fixed income strategies, currency strategies, inflation-indexed securities,
structured credit and distressed debt. The underlying fixed income funds may
take both long and short positions in fixed income securities. Such funds may
also seek to profit from changes in global financial markets and take positions
to take advantage of changes in interest rates, exchange rates, liquidity and
other macroeconomic factors. The underlying fixed income funds may also invest
in securities having maturities of any length and any credit quality, including
securities rated below investment grade (commonly known as “junk bonds”). The
portfolio managers may invest the fund’s assets in underlying funds that have a
limited performance history.
Principal risks
Risk
is inherent in all investing. The value of your investment in the fund, as well
as the amount of return you receive on your investment, may fluctuate
significantly. You may lose part or all
of your investment in the fund or your investment may not perform as well as
other similar investments. An investment in the fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or by any
bank or government agency. The following is a list of the
principal risks of investing in the fund. The descriptions appear in
alphabetical order, not order of importance.
The
fund invests in underlying funds and is exposed to the risks to which the
underlying funds are exposed, as well as the risk that the underlying funds will
not perform as expected. Unless otherwise noted, the principal risks summarized
below include both direct and indirect risks, and references in this section to
the fund include the risks of investing in the underlying funds.
Affiliated funds
risk. The fund’s manager, subadviser or
an affiliate serves as manager or subadviser of certain Legg Mason and Franklin
Templeton affiliated underlying funds (“Affiliated Funds”). As a result, the
manager and the subadviser have financial incentives to allocate the fund’s
assets to Affiliated Funds that pay fees to the manager, the subadviser or an
affiliate. For example, the manager and the subadviser have an incentive to
select Affiliated Funds that will result in the greatest revenue to the manager
and its affiliates, even if that results in increased expenses for the fund.
Similarly, the manager and the subadviser have an incentive to delay or decide
against the sale of interests held by a fund in Affiliated Funds. This gives
rise to a conflict of interest.
Allocation
risk. The fund’s ability to achieve its
investment goal depends upon the portfolio managers’ skill in determining the
fund’s strategic asset class allocation and in selecting the mix of underlying
funds. The value of your investment may decrease if the portfolio managers’
judgment about the attractiveness, value or market trends affecting a particular
asset class, investment style, underlying fund or other issuer is incorrect.
Asset class
variation risk. An underlying fund that
invests principally in securities constituting one or more asset classes (i.e.,
equity or fixed income) may vary the percentage of its assets in these asset
classes (subject to any applicable regulatory requirements).
Credit
risk. If an issuer or guarantor of
a security held by the fund or a counterparty to a financial contract with the
fund defaults or its credit is downgraded, or is perceived to be less
creditworthy, or if the value of the assets underlying a security declines, the
value of your investment will typically decline. Changes in actual or perceived
creditworthiness may occur quickly. The fund could be delayed or hindered in its
enforcement of rights against an issuer, guarantor or counterparty. Subordinated
securities (meaning securities that rank below other securities with respect to
claims on the issuer’s assets) are more likely to suffer a credit loss than
non‑subordinated securities of the same issuer and will be disproportionately
affected by a default, downgrade or perceived decline in creditworthiness.
Cybersecurity
risk. Cybersecurity incidents, whether
intentionally caused by third parties or otherwise, may allow an unauthorized
party to gain access to fund assets, fund or customer data (including private
shareholder information) or proprietary information, cause the fund, the
manager, the subadvisers and/or their service providers (including, but not
limited to, fund accountants, custodians, sub‑custodians, transfer agents and
financial intermediaries) to suffer data breaches, data corruption or loss of
operational functionality, or prevent fund investors from purchasing, redeeming
or exchanging shares, receiving distributions or receiving timely information
regarding the fund or their investment in the fund. The fund, the manager, and
the subadvisers have limited ability to prevent or mitigate cybersecurity
incidents affecting third party service providers, and such third party service
providers may have limited indemnification obligations to the fund, the manager,
and/or the subadvisers. Cybersecurity incidents may result in financial losses
to the fund and its shareholders, and substantial costs may be incurred in order
to prevent or mitigate any future cybersecurity incidents. Issuers of securities
in which the fund invests are also subject to cybersecurity risks, and the value
of these securities could decline if the issuers experience cybersecurity
incidents.
Because
technology is frequently changing, new ways to carry out cyber attacks are
always developing. Therefore, there is a chance that some risks have not been
identified or prepared for, or that an attack may not be detected, which puts
limitations on the fund’s ability to plan for or respond to a cyber attack. Like
other funds and business enterprises, the fund, the manager, the subadvisers and
their service providers are subject to the risk of cyber incidents occurring
from time to time.
Derivatives
risk. Using derivatives can increase
fund losses and reduce opportunities for gains, such as when market prices,
interest rates, currencies, or the derivatives themselves behave in a way not
anticipated by the fund. Using derivatives also can have a leveraging
effect and increase fund volatility. Certain derivatives have the potential for
unlimited loss, regardless of the size of the initial investment. Derivatives
may not be available at the time or price desired, may be difficult to sell,
unwind or value, and the counterparty may default on its obligations to the
fund. Derivatives are generally subject to the risks applicable to the assets,
rates, indices or other indicators underlying the derivative. The value of a
derivative may fluctuate more than the underlying assets, rates, indices or
other indicators to which it relates. Use of derivatives may have different
|
| |
14 |
|
Franklin
Multi-Asset Moderate Growth Fund |
tax
consequences for the fund than an investment in the underlying asset, and those
differences may affect the amount, timing and character of income distributed to
shareholders. The U.S. government and foreign governments have adopted and
implemented or are in the process of adopting and implementing regulations
governing derivatives markets, including mandatory clearing of certain
derivatives, margin and reporting requirements. The ultimate impact of the
regulations remains unclear. Additional regulation of derivatives may make
derivatives more costly, limit their availability or utility, otherwise
adversely affect their performance or disrupt
markets.
Credit
default swap contracts involve heightened risks and may result in losses to the
fund. Credit default swaps may be illiquid and difficult to value. When the fund
sells credit protection via a credit default swap, credit risk increases since
the fund has exposure to both the issuer whose credit is the subject of the swap
and the counterparty to the swap.
Extension
risk. When interest rates rise,
repayments of fixed income securities may occur more slowly than anticipated,
extending the effective duration of these fixed income securities at below
market interest rates and causing their market prices to decline more than they
would have declined due to the rise in interest rates alone. This may cause the
fund’s share price to be more volatile.
Fixed income
securities risk. Fixed income securities
are subject to a number of risks, including credit, market and interest rate
risks. Credit risk is the risk that the issuer or obligor will not make timely
payments of principal and interest. Changes in an issuer’s or obligor’s credit
rating or the market’s perception of an issuer’s or obligor’s creditworthiness
may also affect the value of the fund’s investment in that issuer. The fund is
subject to greater levels of credit risk to the extent it holds below investment
grade debt securities, or “junk” bonds. Market risk is the risk that the fixed
income markets may become volatile and have lower liquidity or behave in
unexpected ways, and the market value of an investment may decrease, sometimes
quickly or unpredictably. Interest rate risk is the risk that the value of a
fixed income security will fall when interest rates rise. A rise in interest
rates tends to have a greater impact on the prices of longer term or duration
securities. A general rise in interest rates may cause investors to move out of
fixed income securities on a large scale, which could adversely affect the price
and liquidity of fixed income securities.
Foreign investments
and emerging markets risk. The fund’s investments in securities of
foreign issuers or issuers with significant exposure to foreign markets involve
additional risk as compared to investments in U.S. securities or issuers with
predominantly domestic exposure, such as less liquid, less transparent, less
regulated and more volatile markets. The value of the fund’s investments may
decline because of factors affecting the particular issuer as well as foreign
markets and issuers generally, such as unfavorable or unsuccessful government
actions, reduction of government or central bank support, inadequate accounting
standards and auditing and financial recordkeeping requirements, lack of
information, political, economic, financial or social instability, terrorism,
armed conflicts and other geopolitical events, and the impact of tariffs and
other restrictions on trade or economic sanctions. Geopolitical or other events
such as nationalization or expropriation could even cause the loss of the fund’s
entire investment in one or more countries.
In
addition, there may be significant obstacles to obtaining information necessary
for investigations into or litigation against issuers located in or operating in
certain foreign markets, particularly emerging market countries, and
shareholders may have limited legal remedies. To the extent the fund focuses its
investments in a single country or only a few countries in a particular
geographic region, economic, political, regulatory or other conditions affecting
such country or region may have a greater impact on fund performance relative to
a more geographically diversified fund.
The
value of investments in securities denominated in foreign currencies increases
or decreases as the rates of exchange between those currencies and the U.S.
dollar change. Currency conversion costs and currency fluctuations could
erase investment gains or add to investment losses. Currency exchange rates can
be volatile, and are affected by factors such as general economic and political
conditions, the actions of the U.S. and foreign governments or central banks,
the imposition of currency controls and speculation. The fund may be unable or
may choose not to hedge its foreign currency
exposure.
Less
developed markets are more likely to experience problems with the clearing and
settling of trades and the holding of securities by local banks, agents and
depositories. Settlement of trades in these markets can take longer than in
other markets and the fund may not receive its proceeds from the sale of certain
securities for an extended period (possibly several weeks or even
longer).
The
risks of foreign investments are heightened when investing in issuers in
emerging market countries. Emerging market countries tend to have economic,
political and legal systems that are less developed and are less stable than
those of more developed countries. Their economies tend to be less diversified
than those of more developed countries. They typically have fewer medical and
economic resources than more developed countries, and thus they may be less able
to control or mitigate the effects of a pandemic or a natural disaster. They are
often particularly sensitive to market movements because their market prices
tend to reflect speculative expectations. Low trading volumes may result in
a lack of liquidity and in extreme price
volatility.
Growth and value
investing risk. Growth or value
securities as a group may be out of favor and underperform the overall equity
market while the market favors other types of securities. Growth securities
typically are very sensitive to market movements because their market prices
tend to reflect future expectations. When it appears those expectations will not
be met, the prices of growth securities typically fall. Growth securities may
also be more volatile than other investments because they often do not pay
dividends. The values of growth securities tend to go down when interest rates
rise because the rise in interest rates reduces the current value of future cash
flows. The value approach to investing involves the risk that stocks may remain
undervalued, undervaluation may become more severe, or perceived undervaluation
may actually represent intrinsic value. A value stock may not increase in price
as anticipated by the subadviser if other investors fail to recognize the
company’s value and bid up the price or the factors that the subadviser believes
will increase the price of the security do not occur or do not have the
anticipated effect.
|
|
|
|
|
| |
Franklin Multi-Asset Moderate
Growth Fund |
|
| |
|
15 |
|
Hedge fund
strategies risk. The fund, through the
underlying funds, may employ investment strategies that involve greater risks
than the strategies used by typical mutual funds, including increased use of
short sales, leverage and derivative transactions and hedging strategies. The
fund may invest in underlying funds employing proprietary investment strategies
that are not fully disclosed, which may involve risks that are not anticipated.
Hedge fund strategies may be narrowly focused on a particular market, security
type or activity, and thus are exposed to greater risk of loss if the investment
thesis underlying the strategy does not occur as anticipated. Hedge fund
strategies that are intended to reduce the fund’s volatility may fail to do so
effectively. The use of leverage by a hedge fund strategy (e.g., through
options) will magnify any losses incurred by the strategy.
High yield (“junk”)
bonds risk. High yield bonds are
generally subject to greater credit risks than higher-grade bonds, including the
risk of default on the payment of interest or principal. High yield bonds
are considered speculative, typically have lower liquidity and are more
difficult to value than higher grade bonds. High yield bonds tend to be volatile
and more susceptible to adverse events, credit downgrades and negative
sentiments and may be difficult to sell at a desired price, or at all, during
periods of uncertainty or market turmoil.
Illiquidity
risk. Some assets held by the fund may
be or become impossible or difficult to sell and some assets that the fund wants
to invest in may be impossible or difficult to purchase, particularly during
times of market turmoil or due to adverse changes in the conditions of a
particular issuer. These illiquid assets may also be volatile and difficult to
value. Markets may become illiquid when, for instance, there are few, if any,
interested buyers or sellers or when dealers are unwilling or unable to make a
market for certain securities. As a general matter, dealers have been less
willing to make markets for fixed income securities. Federal banking regulations
may also cause certain dealers to reduce their inventories of certain
securities, which may further decrease the fund’s ability to buy or sell such
securities. During times of market turmoil, there have been, and may be, no
buyers or sellers for securities in entire asset classes. If the fund is forced
to sell an illiquid asset to meet redemption requests or other cash needs, or to
try to limit losses, the fund may be forced to sell at a substantial loss or may
not be able to sell at all. The fund may not receive its proceeds from the sale
of certain securities for an extended period (for example, several weeks or even
longer). The liquidity of certain assets, particularly of privately-issued and
non‑investment grade mortgage-backed securities, asset-backed securities and
collateralized debt securities, may be difficult to ascertain and may change
over time.
Investing in a fund
of funds risk. Your cost of investing in
the fund, as a fund of funds, may be higher than the cost of investing in a
mutual fund that only invests directly in individual equity and fixed income
securities. Because the fund will indirectly bear its pro rata share of the fees
and expenses incurred by an underlying fund in which it invests, including
advisory fees, an increase in fees and expenses of an underlying fund or a
reallocation of the fund’s investments to underlying funds with higher fees or
expenses will increase the fund’s total expenses. These expenses are in addition
to other expenses that the fund bears directly in connection with its own
operations. An underlying fund may change its investment objective or policies
without the fund’s approval, which could cause the fund to withdraw its
investment from such underlying fund at a time that is unfavorable to the fund.
In addition, one underlying fund may buy the same securities that another
underlying fund sells. Therefore, the fund would indirectly bear the costs of
these trades without accomplishing any investment purpose. If underlying funds
invest in the same or similar securities, the fund may indirectly bear
concentration risk with respect to those investments. If the fund invests in an
underlying fund that has recently commenced operations, there can be no
assurance that such underlying fund will grow to or maintain an economically
viable size, in which case the underlying fund’s board or adviser may determine
to liquidate the underlying fund or the fund may indirectly bear higher
expenses.
Investing in ETFs
risk. Unlike shares of typical mutual
funds or unit investment trusts, shares of ETFs are traded on an exchange and
may trade throughout a trading day. ETFs are bought and sold based on market
values and not at net asset value, and therefore may trade at either a premium
or discount to net asset value and may experience volatility in certain market
conditions. The fund will pay brokerage commissions in connection with the
purchase and sales of shares of ETFs. In addition, the fund will indirectly bear
its pro rata share of fees and expenses incurred by an ETF in which it invests,
including advisory fees. These expenses are in addition to expenses that the
fund bears directly in connection with its own operations. Certain ETFs are also
subject to portfolio management risk. Investments in ETFs are subject to the
risk that the listing exchange may halt trading of an ETF’s shares, in which
case the fund would be unable to sell its ETF shares unless and until trading is
resumed.
Issuer
risk. The market price of a security can
go up or down more than the market as a whole and can perform differently from
the value of the market as a whole, due to factors specifically relating to the
security’s issuer, such as disappointing earnings reports by the issuer,
unsuccessful products or services, loss of major customers, changes in
management, corporate actions, negative perception in the marketplace, or major
litigation or changes in government regulations affecting the issuer or the
competitive environment. An individual security may also be affected by factors
relating to the industry or sector of the issuer. The fund may experience a
substantial or complete loss on an individual security. A change in financial
condition or other event affecting a single issuer may adversely impact the
industry or sector of the issuer or securities markets as a whole.
Large capitalization
company risk. Large capitalization
companies may fall out of favor with investors based on market and economic
conditions. In addition, larger companies may not be able to attain the high
growth rates of successful smaller companies and may be less capable of
responding quickly to competitive challenges and industry changes. As a result,
the fund’s value may not rise as much as, or may fall more than, the value of
funds that focus on companies with smaller market capitalizations.
Long/short strategy
risk. While the fund may invest in long
positions and short positions, there is the risk that the investments will not
perform as expected. The fund’s long/short strategy may result in greater losses
than if the fund held only long positions, as losses on one type of position
could more than offset gains on the other or a fund could lose money on both
positions. The fund’s short positions could result in unlimited losses if the
fund does not own the asset sold short and it is unable to close out of the
short sale or short position.
|
| |
16 |
|
Franklin
Multi-Asset Moderate Growth Fund |
Market events
risk. The market values of securities or
other assets will fluctuate, sometimes sharply and unpredictably, due to changes
in general market conditions, overall economic trends or events, governmental
actions or intervention, actions taken by the U.S. Federal Reserve or foreign
central banks, market disruptions caused by trade disputes or other factors,
political developments, armed conflicts, economic sanctions and countermeasures
in response to sanctions, major cybersecurity events, investor sentiment, the
global and domestic effects of a pandemic, and other factors that may or may not
be related to the issuer of the security or other asset. Economies and financial
markets throughout the world are increasingly interconnected. Economic,
financial or political events, trading and tariff arrangements, public health
events, terrorism, wars, natural disasters and other circumstances in one
country or region could have profound impacts on global economies or markets. As
a result, whether or not the fund invests in securities of issuers located in or
with significant exposure to the countries or markets directly affected, the
value and liquidity of the fund’s investments may be negatively affected.
Following Russia’s invasion of Ukraine, Russian stocks lost all, or nearly all,
of their market value. Other securities or markets could be similarly affected
by past or future geopolitical or other events or conditions. Furthermore,
events involving limited liquidity, defaults, non‑performance or other adverse
developments that affect one industry, such as the financial services industry,
or concerns or rumors about any events of these kinds, have in the past and may
in the future lead to market-wide liquidity problems, may spread to other
industries, and could negatively affect the value and liquidity of the fund’s
investments.
The
fallout from the COVID‑19 pandemic and its subsequent variants, and the
long-term impact on economies, markets, industries and individual issuers, are
not known. Some sectors of the economy and individual issuers have experienced
or may experience particularly large losses. Periods of extreme volatility in
the financial markets; reduced liquidity of many instruments; and disruptions to
supply chains, consumer demand and employee availability, may continue for some
time.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Recently, inflation and interest rates have increased and may rise further.
These circumstances could adversely affect the value and liquidity of the fund’s
investments, impair the fund’s ability to satisfy redemption requests, and
negatively impact the fund’s
performance.
The
United States and other countries are periodically involved in disputes over
trade and other matters, which may result in tariffs, investment restrictions
and adverse impacts on affected companies and securities. For example, the
United States has imposed tariffs and other trade barriers on Chinese exports,
has restricted sales of certain categories of goods to China, and has
established barriers to investments in China. Trade disputes may adversely
affect the economies of the United States and its trading partners, as well as
companies directly or indirectly affected and financial markets
generally. In addition, the Chinese government is involved in a
longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the United States and China does not improve or
continues to deteriorate, if China were to attempt unification of Taiwan by
force, or if other geopolitical conflicts develop or get worse, economies,
markets and individual securities may be severely affected both regionally and
globally, and the value of the fund’s assets may go
down.
Portfolio management
risk. The value of your investment may
decrease if the judgment of the fund’s adviser about the attractiveness, value
of, or market trends affecting, a particular security, industry, sector or
region, or about market movements, is incorrect or does not produce the desired
results, or if there are imperfections, errors or limitations in the models,
tools and data used by the portfolio managers. In addition, the fund’s
investment strategies or policies may change from time to time. Those changes
may not lead to the results intended by the portfolio managers and could have an
adverse effect on the value or performance of the fund.
Prepayment or call
risk. Many issuers have a right to
prepay their fixed income securities. Issuers may be more likely to prepay their
securities if interest rates fall. If this happens, the fund may not benefit
from the rise in the market price of the securities that normally accompanies a
decline in interest rates, and will be forced to reinvest prepayment proceeds at
a time when yields on securities available in the market are lower than the
yield on prepaid securities. The fund may also lose any premium it paid to
purchase the securities.
Real assets
risk. Investments in the real estate,
natural resources and commodities sectors involve a high degree of risk,
including significant financial, operating, and competitive risks. Investments
in royalty trusts, real estate investment trusts and master limited partnerships
expose the fund to adverse macroeconomic conditions, such as changes and
volatility in commodity prices, a rise in interest rates or a downturn in the
economy in which the asset is located, elevating the risk of loss.
Small and
mid‑capitalization company risk. The
fund will be exposed to additional risks as a result of its investments in the
securities of small and mid‑capitalization companies. Small and
mid‑capitalization companies may fall out of favor with investors; may have
limited product lines, operating histories, markets or financial resources; or
may be dependent upon a limited management group. The prices of securities of
small and mid‑capitalization companies generally are more volatile than those of
large capitalization companies and are more likely to be adversely affected than
large capitalization companies by changes in earnings results and investor
expectations or poor economic or market conditions, including those experienced
during a recession. Securities of small and mid‑capitalization companies may
underperform large capitalization companies, may be harder to sell at times and
at prices the portfolio managers believe appropriate and may have greater
potential for losses.
Stock market and
equity securities risk. The stock
markets are volatile and the market prices of the fund’s equity securities may
decline generally. Equity securities may include warrants, rights,
exchange-traded and over‑the‑counter common stocks, preferred stock, depositary
receipts, trust certificates, limited partnership interests and shares of other
investment companies, including exchange-traded funds and real estate investment
trusts. Equity securities may have greater price volatility than other asset
classes, such as fixed income securities, and may fluctuate in
|
|
|
|
|
| |
Franklin Multi-Asset Moderate
Growth Fund |
|
| |
|
17 |
|
price
based on actual or perceived changes in a company’s financial condition and
overall market and economic conditions and perceptions. If the market prices of
the equity securities owned by the fund fall, the value of your investment in
the fund will decline.
Valuation
risk. The sales price the fund could
receive for any particular portfolio investment may differ from the fund’s
valuation of the investment, particularly for securities that trade in thin or
volatile markets or that are valued using a fair value methodology. These
differences may increase significantly and affect fund investments more broadly
during periods of market volatility. Investors who purchase or redeem fund
shares on days when the fund is holding fair-valued securities may receive fewer
or more shares or lower or higher redemption proceeds than they would have
received if the fund had not fair-valued securities or had used a different
valuation methodology. The fund’s ability to value its investments may be
impacted by technological issues and/or errors by pricing services or other
third party service providers. The valuation of the fund’s investments involves
subjective judgment, which may prove to be incorrect.
These
and other risks are discussed in more detail in the Prospectus or in the
Statement of Additional Information.
|
|
|
| |
18 |
|
| |
Franklin
Multi-Asset Moderate Growth Fund |
Performance
The
accompanying bar chart and table provide some indication of the risks of
investing in the fund. The bar chart
shows changes in the fund’s performance from year to year for Class A
shares. The table shows the average annual total returns of each class of
the fund that has been in operation for at least one full calendar year and also
compares the fund’s performance with the average annual total returns of an
index or other benchmark. The fund also compares its
performance to the Bloomberg U.S. Aggregate Index (an index of fixed income
securities) and a composite benchmark, which is a hypothetical representation of
the performance of the fund’s major asset classes, consisting of 40% Russell
1000 Index, 15% Russell 2000 Index, 15% MSCI EAFE Index, 25% Bloomberg U.S.
Aggregate Index and 5% Bloomberg U.S. High Yield—2% Issuer Cap Index (an index
where issuer exposure is limited to 2% of the market value of the Bloomberg U.S.
Corporate High Yield Index). Performance for classes other
than those shown may vary from the performance shown to the extent the expenses
for those classes differ. The fund makes updated performance information,
including its current net asset value, available at www.franklintempleton.com/mutualfunds
(select fund and share class), or by calling the fund at
877‑6LM‑FUND/656‑3863.
The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the
future.
Sales charges are not reflected in
the accompanying bar chart, and if those charges were included, returns would be
less than those shown.
Best Quarter (06/30/2020): 14.02 Worst
Quarter (03/31/2020): (19.02)
The
year‑to‑date return as of the
most recent calendar quarter, which ended March 31, 2023, was
4.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average annual
total returns (%) |
|
(for periods ended
December 31, 2022) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A |
|
|
1 year |
|
|
|
5 years |
|
|
|
10 years |
|
|
|
Since inception |
|
|
|
Inception date |
|
Return
before taxes |
|
|
(18.52) |
|
|
|
2.33 |
|
|
|
5.64 |
|
|
|
|
|
|
|
|
|
Return
after taxes on distributions |
|
|
(19.98) |
|
|
|
0.59 |
|
|
|
4.02 |
|
|
|
|
|
|
|
|
|
Return
after taxes on distributions and sale of fund shares |
|
|
(9.93) |
|
|
|
1.57 |
|
|
|
4.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other Classes
(Return before taxes only) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C |
|
|
(14.99) |
|
|
|
2.82 |
|
|
|
5.53 |
|
|
|
|
|
|
|
|
|
Class R |
|
|
(13.84) |
|
|
|
3.19 |
|
|
|
N/A |
|
|
|
4.19 |
|
|
|
06/02/2014 |
|
Class I |
|
|
(13.28) |
|
|
|
3.85 |
|
|
|
6.56 |
|
|
|
|
|
|
|
|
|
Bloomberg
U.S. Aggregate Index (reflects no deduction for fees, expenses or
taxes)1 |
|
|
(13.01) |
|
|
|
0.02 |
|
|
|
1.06 |
|
|
|
|
|
|
|
|
|
Russell
3000 Index (reflects no deduction for fees, expenses or taxes)2 |
|
|
(19.21) |
|
|
|
8.79 |
|
|
|
12.13 |
|
|
|
|
|
|
|
|
|
Composite
Benchmark (reflects no deduction for fees, expenses or taxes)3 |
|
|
(16.42) |
|
|
|
4.99 |
|
|
|
7.69 |
|
|
|
|
|
|
|
|
|
1 |
For Class R shares, for the period
from the class’ inception date to December 31, 2022, the average
annual total return of the Bloomberg U.S. Aggregate Index was
1.06%. |
2 |
For Class R shares, for the period
from the class’ inception date to December 31, 2022, the average
annual total return of the Russell 3000 Index was
9.93%. |
3 |
For Class R shares, for the period
from the class’ inception date to December 31, 2022, the average
annual total return of the Composite Benchmark was
6.16%. |
Prior
to June 1, 2015, the fund followed different investment policies and
strategies.
The after‑tax returns are shown
only for Class A shares, are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after‑tax returns
depend on an investor’s tax situation and may differ from those shown, and the
after‑tax returns shown are not relevant to investors who hold their fund shares
through tax‑deferred arrangements, such as 401(k) plans or individual retirement
accounts. After‑tax returns for classes other than Class A
will vary from returns shown for Class A. Returns after taxes on
distributions and sale of fund shares are higher than returns before taxes for
certain periods shown because they reflect the tax benefit of capital losses
realized on the redemption of fund
shares.
|
|
|
|
|
| |
Franklin Multi-Asset Moderate
Growth Fund |
|
| |
|
19 |
|
Management
Investment
manager: Legg Mason Partners Fund
Advisor, LLC (“LMPFA”)
Subadviser: Franklin Advisers, Inc. (“Franklin Advisers”)
Portfolio
managers: Primary responsibility for the
day‑to‑day management of the fund lies with the following portfolio managers. At
Franklin Advisers, all portfolios are managed on a collaborative basis using a
systematic, rules based approach.
|
|
|
| |
Portfolio
manager |
|
Title |
|
Portfolio manager of the fund since |
| |
|
Laura
Green, CFA |
|
Portfolio
Manager |
|
2021 |
| |
|
Jacqueline
Kenney, CFA |
|
Portfolio
Manager |
|
2021 |
Purchase and sale of fund
shares
You
may purchase, redeem or exchange shares of the fund each day the New York Stock
Exchange is open, at the fund’s net asset value determined after receipt of your
request in good order, subject to any applicable sales charge.
The
fund’s initial and subsequent investment minimums generally are set forth in the
accompanying table:
|
|
|
|
|
|
|
|
|
| |
Investment minimum initial/additional investment
($) |
|
|
|
|
Class A |
|
Class C1 |
|
Class R |
|
Class I |
|
Class IS |
General |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/None2 |
|
N/A |
Uniform
Gifts or Transfers to Minor Accounts |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/None2 |
|
N/A |
IRAs |
|
250/50 |
|
250/50 |
|
N/A |
|
1 million/None2,3 |
|
N/A3 |
SIMPLE
IRAs |
|
None/None |
|
None/None |
|
N/A |
|
1 million/None2 |
|
N/A |
Systematic
Investment Plans |
|
25/25 |
|
25/25 |
|
N/A |
|
1 million/None2,4 |
|
N/A4 |
Clients
of Eligible Financial Intermediaries |
|
None/None |
|
N/A |
|
None/None |
|
None/
None5 |
|
None/None 5 |
Eligible
Investment Programs |
|
None/None |
|
N/A |
|
None/None |
|
None/
None |
|
None/None |
Omnibus
Retirement Plans |
|
None/None |
|
None/None |
|
None/None |
|
None/
None |
|
None/None |
Individual
Retirement Plans except as noted |
|
None/None |
|
None/None |
|
N/A |
|
1 million/None2 |
|
N/A |
Institutional
Investors |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1
million/None |
|
1 million/None |
1 |
Class
C shares are not available for purchase through Distributor Accounts.
|
2 |
Available
to investors investing directly with the fund. |
3 |
IRA
accountholders who purchase Class I or Class IS shares through a Service
Agent acting as agent on behalf of its customers are subject to the
initial and subsequent minimums of $250/$50. If a Service Agent does not
have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
4 |
Investors
investing through a Systematic Investment Plan who purchase Class I or
Class IS shares through a Service Agent acting as agent on behalf of its
customers are subject to the initial and subsequent minimums of $25/$25.
If a Service Agent does not have this arrangement in place with the
Distributor, the initial and subsequent minimums listed in the table
apply. Please contact your Service Agent for more information.
|
5 |
Individual
investors who purchase Class I shares or Class IS shares through a Service
Agent acting as agent on behalf of its customers are subject to the
initial and subsequent minimums of $1,000/$50. If a Service Agent does not
have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
Your
Service Agent may impose higher or lower investment minimums, or may impose no
minimum investment requirement.
For
more information about how to purchase, redeem or exchange shares, and to learn
which classes of shares are available to you, you should contact your Service
Agent, or, if you hold your shares or plan to purchase shares through the fund,
you should contact the fund by phone at 877‑6LM‑FUND/656‑3863, by regular mail
at Legg Mason Funds, P.O. Box 33030, St. Petersburg, FL 33733-8030 or by
express, certified or registered mail at Legg Mason Funds, 100 Fountain Parkway,
St. Petersburg, FL 33716-1205.
Tax information
The
fund’s distributions are generally taxable as ordinary income or capital gains.
|
| |
20 |
|
Franklin
Multi-Asset Moderate Growth Fund |
Payments to
broker/dealers and other financial intermediaries
The
fund’s related companies pay Service Agents for the sale of fund shares,
shareholder services and other purposes. These payments create a conflict of
interest by influencing your Service Agent or its employees or associated
persons to recommend the fund over another investment. Ask your financial
adviser or salesperson or visit your Service Agent’s or salesperson’s website
for more information.
|
|
|
|
|
| |
Franklin Multi-Asset Moderate
Growth Fund |
|
| |
|
21 |
|
Franklin Multi-Asset
Conservative Growth Fund
Investment objective
The
fund seeks balance of growth of capital and
income.
Fees and expenses of the
fund
The
accompanying table describes the fees and expenses that you may pay if you buy,
hold and sell shares of the fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
You may qualify for sales charge discounts
if you and your family invest, or agree to invest in the future, at least
$25,000 in funds distributed through
Franklin Distributors, LLC (“Franklin Distributors” or the “Distributor”), the
fund’s distributor. More information about these and other
discounts is available from your Service Agent, in the fund’s Prospectus on page
66 under the heading “Additional information about each share class,” in the
appendix titled “Appendix: Waivers and Discounts Available from Certain Service
Agents” on page A‑1 of the fund’s Prospectus and in the fund’s Statement of
Additional Information (“SAI”) on page 88 under the heading “Sales Charge
Waivers and Reductions for Class A Shares.” “Service Agents” include banks,
brokers, dealers, insurance companies, investment advisers, financial
consultants or advisers, mutual fund supermarkets and other financial
intermediaries that have entered into an agreement with the Distributor to sell
shares of the fund.
If
you purchase Class I shares or Class IS shares through a Service Agent
acting solely as an agent on behalf of its customers, that Service Agent may
charge you a commission. Such commissions, if any, are not charged by the fund
and are not reflected in the fee table or expense example
below.
|
| |
| |
| |
| |
| |
Shareholder fees
|
(fees paid directly from
your investment) |
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
Class C |
|
Class R |
|
Class I |
|
Class IS |
Maximum sales charge (load) imposed on
purchases (as a % of offering price) |
|
5.501,2 |
|
None |
|
None |
|
None |
|
None |
Maximum deferred sales charge (load) (as a % of
the lower of net asset value at purchase or redemption)3 |
|
None4 |
|
1.00 |
|
None |
|
None |
|
None |
Small account fee5 |
|
$15 |
|
$15 |
|
None |
|
None |
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
Annual fund
operating expenses (%) |
|
|
|
|
|
|
|
|
|
|
(expenses that you pay each
year as a percentage of the value of your
investment) |
|
|
Class A |
|
Class C |
|
Class R |
|
Class I |
|
Class IS |
Management fees |
|
None |
|
None |
|
None |
|
None |
|
None |
Distribution and/or service (12b‑1)
fees |
|
0.25 |
|
1.00 |
|
0.50 |
|
None |
|
None |
Other expenses |
|
0.21 |
|
0.26 |
|
0.36 |
|
0.15 |
|
0.086 |
Acquired fund fees and expenses |
|
0.72 |
|
0.72 |
|
0.72 |
|
0.72 |
|
0.72 |
Total annual fund operating expenses7 |
|
1.18 |
|
1.98 |
|
1.58 |
|
0.87 |
|
0.80 |
Fees waived and/or expenses reimbursed8 |
|
— |
|
— |
|
(0.06) |
|
— |
|
— |
Total annual fund operating expenses after
waiving fees and/or reimbursing expenses9 |
|
1.18 |
|
1.98 |
|
1.52 |
|
0.87 |
|
0.80 |
1 |
The
sales charge is waived for shareholders purchasing Class A shares
through accounts where Franklin Distributors is the broker-dealer of
record (“Distributor Accounts”). |
2 |
Shareholders purchasing Class A
shares through certain Service Agents or in certain types of accounts may
be eligible for a waiver of the sales charge. For additional information,
see “Additional information about each share class — Sales charges” in the
Prospectus. |
3 |
Maximum
deferred sales charge (load) may be reduced over
time. |
4 |
You may buy Class A shares in amounts of $1,000,000 or
more at net asset value (without an initial sales charge), but if you
redeem those shares within 18 months of their purchase, you will pay a
contingent deferred sales charge of
1.00%. |
|
|
|
| |
22 |
|
| |
Franklin
Multi-Asset Conservative Growth Fund |
5 |
If
the value of your account is below $1,000 ($250 for retirement plans that
are not employer-sponsored), the fund may charge you a fee of $3.75 per
account that is determined and assessed quarterly by the fund or your
Service Agent (with an annual maximum of $15.00 per account). Please
contact your Service Agent or the fund for more
information. |
6 |
Other expenses for
Class IS shares are estimated for the current fiscal year. Actual
expenses may differ from
estimates. |
7 |
Total annual
fund operating expenses do not correlate with the ratios of expenses to
average net assets reported in the financial highlights tables in the
fund’s Prospectus and in the fund’s shareholder reports, which reflect the
fund’s operating expenses and do not include acquired fund fees and
expenses. |
8 |
The
manager has agreed to waive fees and/or reimburse operating expenses
(other than interest, brokerage, taxes, extraordinary expenses and
acquired fund fees and expenses) so that the ratio of total annual fund
operating expenses will not exceed 0.80% for Class A shares, 1.55%
for Class C shares, 0.80% for Class R shares, 0.25% for
Class I shares and 0.15% for Class IS shares, subject to
recapture as described below. In addition, the ratio of total annual fund
operating expenses for Class IS shares will not exceed the ratio of
total annual fund operating expenses for Class I shares, subject to
recapture as described below. These arrangements cannot be terminated
prior to December 31,
2024 without the Board of Trustees’ consent. The manager
is permitted to recapture amounts waived and/or reimbursed to a class
during the same fiscal year in which the manager earned the fee or
incurred the expense if the class’ total annual fund operating expenses
have fallen to a level below the limits described above. In no case will
the manager recapture any amount that would result, on any particular
business day of the fund, in the class’ total annual fund operating
expenses exceeding the applicable limits described above or any other
lower limit then in effect. |
9 |
Total
annual fund operating expenses (after waiving fees and/or reimbursing
expenses, as applicable) are higher than the expense cap amounts for each
class as a result of acquired fund fees and
expenses. |
Example
This
example is intended to help you compare the cost of investing in the fund with
the cost of investing in other mutual funds. The example assumes:
• |
|
You
invest $10,000 in the fund for the time periods
indicated |
• |
|
Your
investment has a 5% return each year and the fund’s operating expenses
remain the same (except that any applicable fee waiver or expense
reimbursement is reflected only through its expiration
date) |
• |
|
You
reinvest all distributions and dividends without a sales
charge |
Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
|
|
|
|
|
|
|
| |
Number of years you own
your shares ($) |
|
|
1 year |
|
3 years |
|
5 years |
|
10 years |
Class A
(with or without redemption at end of period) |
|
664 |
|
904 |
|
1,163 |
|
1,902 |
Class C
(with redemption at end of period) |
|
301 |
|
621 |
|
1,067 |
|
2,099 |
Class C
(without redemption at end of period) |
|
201 |
|
621 |
|
1,067 |
|
2,099 |
Class R
(with or without redemption at end of period) |
|
155 |
|
493 |
|
855 |
|
1,873 |
Class I
(with or without redemption at end of period) |
|
89 |
|
277 |
|
481 |
|
1,072 |
Class IS
(with or without redemption at end of period) |
|
82 |
|
256 |
|
444 |
|
990 |
Portfolio turnover. The fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when shares are held in a taxable account.
These costs, which are not reflected in annual fund operating expenses or in the
example, affect the fund’s performance. During the most recent fiscal year,
the fund’s portfolio turnover rate was 43% of the average value of its
portfolio.
Principal investment
strategies
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market conditions, the portfolio
managers will allocate between 35% to 65% of the fund’s assets to underlying
funds that invest in equity and equity-like strategies and between 35% to 65% of
the fund’s assets to underlying funds that invest in fixed income strategies.
The portfolio managers may, however, allocate fund assets to any underlying
funds in varying amounts in a manner consistent with the fund’s investment
objective. The fund’s allocation to each class will be measured at the time of
purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark as defined under “Performance”
below.
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative
|
|
|
|
|
| |
Franklin Multi-Asset Conservative
Growth Fund |
|
| |
|
23 |
|
investments
(such as commodities, real estate assets and infrastructure assets). The
underlying equity funds may employ strategies similar to those used by hedge
funds, which may have a low correlation to broad stock market movements or take
both long and short positions in equity securities. The underlying fixed income
funds include funds investing in any sector, region or style, including foreign
fixed income strategies, currency strategies, inflation-indexed securities,
structured credit and distressed debt. The underlying fixed income funds may
take both long and short positions in fixed income securities. Such funds may
also seek to profit from changes in global financial markets and take positions
to take advantage of changes in interest rates, exchange rates, liquidity and
other macroeconomic factors. The underlying fixed income funds may also invest
in securities having maturities of any length and any credit quality, including
securities rated below investment grade (commonly known as “junk bonds”). The
portfolio managers may invest the fund’s assets in underlying funds that have a
limited performance history.
Principal risks
Risk
is inherent in all investing. The value of your investment in the fund, as well
as the amount of return you receive on your investment, may fluctuate
significantly. You may lose part or all
of your investment in the fund or your investment may not perform as well as
other similar investments. An investment in the fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or by any
bank or government agency. The following is a list of the
principal risks of investing in the fund. The descriptions appear in
alphabetical order, not order of importance.
The
fund invests in underlying funds and is exposed to the risks to which the
underlying funds are exposed, as well as the risk that the underlying funds will
not perform as expected. Unless otherwise noted, the principal risks summarized
below include both direct and indirect risks, and references in this section to
the fund include the risks of investing in the underlying funds.
Affiliated funds
risk. The fund’s manager, subadviser or
an affiliate serves as manager or subadviser of certain Legg Mason and Franklin
Templeton affiliated underlying funds (“Affiliated Funds”). As a result, the
manager and the subadviser have financial incentives to allocate the fund’s
assets to Affiliated Funds that pay fees to the manager, the subadviser or an
affiliate. For example, the manager and the subadviser have an incentive to
select Affiliated Funds that will result in the greatest revenue to the manager
and its affiliates, even if that results in increased expenses for the fund.
Similarly, the manager and the subadviser have an incentive to delay or decide
against the sale of interests held by a fund in Affiliated Funds. This gives
rise to a conflict of interest.
Allocation
risk. The fund’s ability to achieve its
investment goal depends upon the portfolio managers’ skill in determining the
fund’s strategic asset class allocation and in selecting the mix of underlying
funds. The value of your investment may decrease if the portfolio managers’
judgment about the attractiveness, value or market trends affecting a particular
asset class, investment style, underlying fund or other issuer is incorrect.
Asset class
variation risk. An underlying fund that
invests principally in securities constituting one or more asset classes (i.e.,
equity or fixed income) may vary the percentage of its assets in these asset
classes (subject to any applicable regulatory requirements).
Credit
risk. If an issuer or guarantor of
a security held by the fund or a counterparty to a financial contract with the
fund defaults or its credit is downgraded, or is perceived to be less
creditworthy, or if the value of the assets underlying a security declines, the
value of your investment will typically decline. Changes in actual or perceived
creditworthiness may occur quickly. The fund could be delayed or hindered in its
enforcement of rights against an issuer, guarantor or counterparty. Subordinated
securities (meaning securities that rank below other securities with respect to
claims on the issuer’s assets) are more likely to suffer a credit loss than
non‑subordinated securities of the same issuer and will be disproportionately
affected by a default, downgrade or perceived decline in creditworthiness.
Cybersecurity
risk. Cybersecurity incidents, whether
intentionally caused by third parties or otherwise, may allow an unauthorized
party to gain access to fund assets, fund or customer data (including private
shareholder information) or proprietary information, cause the fund, the
manager, the subadvisers and/or their service providers (including, but not
limited to, fund accountants, custodians, sub‑custodians, transfer agents and
financial intermediaries) to suffer data breaches, data corruption or loss of
operational functionality, or prevent fund investors from purchasing, redeeming
or exchanging shares, receiving distributions or receiving timely information
regarding the fund or their investment in the fund. The fund, the manager, and
the subadvisers have limited ability to prevent or mitigate cybersecurity
incidents affecting third party service providers, and such third party service
providers may have limited indemnification obligations to the fund, the manager,
and/or the subadvisers. Cybersecurity incidents may result in financial losses
to the fund and its shareholders, and substantial costs may be incurred in order
to prevent or mitigate any future cybersecurity incidents. Issuers of securities
in which the fund invests are also subject to cybersecurity risks, and the value
of these securities could decline if the issuers experience cybersecurity
incidents.
Because
technology is frequently changing, new ways to carry out cyber attacks are
always developing. Therefore, there is a chance that some risks have not been
identified or prepared for, or that an attack may not be detected, which puts
limitations on the fund’s ability to plan for or respond to a cyber attack. Like
other funds and business enterprises, the fund, the manager, the subadvisers and
their service providers are subject to the risk of cyber incidents occurring
from time to time.
Derivatives
risk. Using derivatives can increase
fund losses and reduce opportunities for gains, such as when market prices,
interest rates, currencies, or the derivatives themselves behave in a way not
anticipated by the fund. Using derivatives also can have a leveraging
effect and increase fund volatility. Certain derivatives have the potential for
unlimited loss, regardless of the size of the initial investment. Derivatives
may not be available at the time or price desired, may be difficult to sell,
unwind or value, and the counterparty may default on its obligations to the
fund. Derivatives are generally subject to the risks applicable to the assets,
rates, indices or other indicators underlying the derivative. The value of a
derivative may fluctuate more than the underlying assets, rates, indices or
other indicators to which it relates. Use of derivatives may have different
|
|
|
| |
24 |
|
| |
Franklin
Multi-Asset Conservative Growth Fund |
tax
consequences for the fund than an investment in the underlying asset, and those
differences may affect the amount, timing and character of income distributed to
shareholders. The U.S. government and foreign governments have adopted and
implemented or are in the process of adopting and implementing regulations
governing derivatives markets, including mandatory clearing of certain
derivatives, margin and reporting requirements. The ultimate impact of the
regulations remains unclear. Additional regulation of derivatives may make
derivatives more costly, limit their availability or utility, otherwise
adversely affect their performance or disrupt
markets.
Credit
default swap contracts involve heightened risks and may result in losses to the
fund. Credit default swaps may be illiquid and difficult to value. When the fund
sells credit protection via a credit default swap, credit risk increases since
the fund has exposure to both the issuer whose credit is the subject of the swap
and the counterparty to the swap.
Extension
risk. When interest rates rise, repayments of fixed
income securities may occur more slowly than anticipated, extending the
effective duration of these fixed income securities at below market interest
rates and causing their market prices to decline more than they would have
declined due to the rise in interest rates alone. This may cause the fund’s
share price to be more volatile.
Fixed income
securities risk. Fixed income securities
are subject to a number of risks, including credit, market and interest rate
risks. Credit risk is the risk that the issuer or obligor will not make timely
payments of principal and interest. Changes in an issuer’s or obligor’s credit
rating or the market’s perception of an issuer’s or obligor’s creditworthiness
may also affect the value of the fund’s investment in that issuer. The fund is
subject to greater levels of credit risk to the extent it holds below investment
grade debt securities, or “junk” bonds. Market risk is the risk that the fixed
income markets may become volatile and have lower liquidity or behave in
unexpected ways, and the market value of an investment may decrease, sometimes
quickly or unpredictably. Interest rate risk is the risk that the value of a
fixed income security will fall when interest rates rise. A rise in interest
rates tends to have a greater impact on the prices of longer term or duration
securities. A general rise in interest rates may cause investors to move out of
fixed income securities on a large scale, which could adversely affect the price
and liquidity of fixed income securities.
Foreign investments
and emerging markets risk. The fund’s investments in securities of foreign
issuers or issuers with significant exposure to foreign markets involve
additional risk as compared to investments in U.S. securities or issuers with
predominantly domestic exposure, such as less liquid, less transparent, less
regulated and more volatile markets. The value of the fund’s investments may
decline because of factors affecting the particular issuer as well as foreign
markets and issuers generally, such as unfavorable or unsuccessful government
actions, reduction of government or central bank support, inadequate accounting
standards and auditing and financial recordkeeping requirements, lack of
information, political, economic, financial or social instability, terrorism,
armed conflicts and other geopolitical events, and the impact of tariffs and
other restrictions on trade or economic sanctions. Geopolitical or other events
such as nationalization or expropriation could even cause the loss of the fund’s
entire investment in one or more countries.
In
addition, there may be significant obstacles to obtaining information necessary
for investigations into or litigation against issuers located in or operating in
certain foreign markets, particularly emerging market countries, and
shareholders may have limited legal remedies. To the extent the fund focuses its
investments in a single country or only a few countries in a particular
geographic region, economic, political, regulatory or other conditions affecting
such country or region may have a greater impact on fund performance relative to
a more geographically diversified fund.
The
value of investments in securities denominated in foreign currencies increases
or decreases as the rates of exchange between those currencies and the U.S.
dollar change. Currency conversion costs and currency fluctuations could
erase investment gains or add to investment losses. Currency exchange rates can
be volatile, and are affected by factors such as general economic and political
conditions, the actions of the U.S. and foreign governments or central banks,
the imposition of currency controls and speculation. The fund may be unable or
may choose not to hedge its foreign currency
exposure.
Less
developed markets are more likely to experience problems with the clearing and
settling of trades and the holding of securities by local banks, agents and
depositories. Settlement of trades in these markets can take longer than in
other markets and the fund may not receive its proceeds from the sale of certain
securities for an extended period (possibly several weeks or even
longer).
The
risks of foreign investments are heightened when investing in issuers in
emerging market countries. Emerging market countries tend to have economic,
political and legal systems that are less developed and are less stable than
those of more developed countries. Their economies tend to be less diversified
than those of more developed countries. They typically have fewer medical and
economic resources than more developed countries, and thus they may be less able
to control or mitigate the effects of a pandemic or a natural disaster. They are
often particularly sensitive to market movements because their market prices
tend to reflect speculative expectations. Low trading volumes may result in
a lack of liquidity and in extreme price
volatility.
Growth and value
investing risk. Growth or value
securities as a group may be out of favor and underperform the overall equity
market while the market favors other types of securities. Growth securities
typically are very sensitive to market movements because their market prices
tend to reflect future expectations. When it appears those expectations will not
be met, the prices of growth securities typically fall. Growth securities may
also be more volatile than other investments because they often do not pay
dividends. The values of growth securities tend to go down when interest rates
rise because the rise in interest rates reduces the current value of future cash
flows. The value approach to investing involves the risk that stocks may remain
undervalued, undervaluation may become more severe, or perceived undervaluation
may actually represent intrinsic value. A value stock may not increase in price
as anticipated by the subadviser if other investors fail to recognize the
company’s value and bid up the price or the factors that the subadviser believes
will increase the price of the security do not occur or do not have the
anticipated effect.
|
|
|
|
|
| |
Franklin Multi-Asset Conservative
Growth Fund |
|
| |
|
25 |
|
Hedge fund
strategies risk. The fund, through the
underlying funds, may employ investment strategies that involve greater risks
than the strategies used by typical mutual funds, including increased use of
short sales, leverage and derivative transactions and hedging strategies. The
fund may invest in underlying funds employing proprietary investment strategies
that are not fully disclosed, which may involve risks that are not anticipated.
Hedge fund strategies may be narrowly focused on a particular market, security
type or activity, and thus are exposed to greater risk of loss if the investment
thesis underlying the strategy does not occur as anticipated. Hedge fund
strategies that are intended to reduce the fund’s volatility may fail to do so
effectively. The use of leverage by a hedge fund strategy (e.g., through
options) will magnify any losses incurred by the strategy.
High yield (“junk”)
bonds risk. High yield bonds are
generally subject to greater credit risks than higher-grade bonds, including the
risk of default on the payment of interest or principal. High yield bonds
are considered speculative, typically have lower liquidity and are more
difficult to value than higher grade bonds. High yield bonds tend to be volatile
and more susceptible to adverse events, credit downgrades and negative
sentiments and may be difficult to sell at a desired price, or at all, during
periods of uncertainty or market turmoil.
Illiquidity
risk. Some assets held by the fund may
be or become impossible or difficult to sell and some assets that the fund wants
to invest in may be impossible or difficult to purchase, particularly during
times of market turmoil or due to adverse changes in the conditions of a
particular issuer. These illiquid assets may also be volatile and difficult to
value. Markets may become illiquid when, for instance, there are few, if any,
interested buyers or sellers or when dealers are unwilling or unable to make a
market for certain securities. As a general matter, dealers have been less
willing to make markets for fixed income securities. Federal banking regulations
may also cause certain dealers to reduce their inventories of certain
securities, which may further decrease the fund’s ability to buy or sell such
securities. During times of market turmoil, there have been, and may be, no
buyers or sellers for securities in entire asset classes. If the fund is forced
to sell an illiquid asset to meet redemption requests or other cash needs, or to
try to limit losses, the fund may be forced to sell at a substantial loss or may
not be able to sell at all. The fund may not receive its proceeds from the sale
of certain securities for an extended period (for example, several weeks or even
longer). The liquidity of certain assets, particularly of privately-issued and
non‑investment grade mortgage-backed securities, asset-backed securities and
collateralized debt securities, may be difficult to ascertain and may change
over time.
Investing in a fund
of funds risk. Your cost of investing in
the fund, as a fund of funds, may be higher than the cost of investing in a
mutual fund that only invests directly in individual equity and fixed income
securities. Because the fund will indirectly bear its pro rata share of the fees
and expenses incurred by an underlying fund in which it invests, including
advisory fees, an increase in fees and expenses of an underlying fund or a
reallocation of the fund’s investments to underlying funds with higher fees or
expenses will increase the fund’s total expenses. These expenses are in addition
to other expenses that the fund bears directly in connection with its own
operations. An underlying fund may change its investment objective or policies
without the fund’s approval, which could cause the fund to withdraw its
investment from such underlying fund at a time that is unfavorable to the fund.
In addition, one underlying fund may buy the same securities that another
underlying fund sells. Therefore, the fund would indirectly bear the costs of
these trades without accomplishing any investment purpose. If underlying funds
invest in the same or similar securities, the fund may indirectly bear
concentration risk with respect to those investments. If the fund invests in an
underlying fund that has recently commenced operations, there can be no
assurance that such underlying fund will grow to or maintain an economically
viable size, in which case the underlying fund’s board or adviser may determine
to liquidate the underlying fund or the fund may indirectly bear higher
expenses.
Investing in ETFs
risk. Unlike shares of typical mutual
funds or unit investment trusts, shares of ETFs are traded on an exchange and
may trade throughout a trading day. ETFs are bought and sold based on market
values and not at net asset value, and therefore may trade at either a premium
or discount to net asset value and may experience volatility in certain market
conditions. The fund will pay brokerage commissions in connection with the
purchase and sales of shares of ETFs. In addition, the fund will indirectly bear
its pro rata share of fees and expenses incurred by an ETF in which it invests,
including advisory fees. These expenses are in addition to expenses that the
fund bears directly in connection with its own operations. Certain ETFs are also
subject to portfolio management risk. Investments in ETFs are subject to the
risk that the listing exchange may halt trading of an ETF’s shares, in which
case the fund would be unable to sell its ETF shares unless and until trading is
resumed.
Issuer
risk. The market price of a security can go up or down
more than the market as a whole and can perform differently from the value of
the market as a whole, due to factors specifically relating to the security’s
issuer, such as disappointing earnings reports by the issuer, unsuccessful
products or services, loss of major customers, changes in management, corporate
actions, negative perception in the marketplace, or major litigation or changes
in government regulations affecting the issuer or the competitive environment.
An individual security may also be affected by factors relating to the industry
or sector of the issuer. The fund may experience a substantial or complete loss
on an individual security. A change in financial condition or other event
affecting a single issuer may adversely impact the industry or sector of the
issuer or securities markets as a whole.
Large capitalization
company risk. Large capitalization
companies may fall out of favor with investors based on market and economic
conditions. In addition, larger companies may not be able to attain the high
growth rates of successful smaller companies and may be less capable of
responding quickly to competitive challenges and industry changes. As a result,
the fund’s value may not rise as much as, or may fall more than, the value of
funds that focus on companies with smaller market capitalizations.
LIBOR
risk. The fund’s investments, payment
obligations, and financing terms may be based on floating rates, such as the
London Interbank Offered Rate, or “LIBOR,” which is the offered rate for
short-term Eurodollar deposits between major international banks. In 2017, the
U.K. Financial Conduct Authority (“FCA”) announced its intention to cease
compelling banks to provide the quotations needed to sustain LIBOR after 2021.
ICE Benchmark Administration, the administrator of LIBOR, ceased publication of
most LIBOR settings on a representative basis at the end of 2021 and is expected
to cease publication of the remaining U.S. dollar LIBOR settings on a
representative basis after June 30, 2023. In addition, global regulators
have announced that, with limited exceptions, no new LIBOR-based contracts
should be entered into after 2021. Actions by regulators have resulted in the
|
| |
26 |
|
Franklin
Multi-Asset Conservative Growth Fund |
establishment
of alternative reference rates to LIBOR in most major currencies. In March 2022,
the U.S. federal government enacted legislation to establish a process for
replacing LIBOR in certain existing contracts that do not already provide for
the use of a clearly defined or practicable replacement benchmark rate as
described in the legislation. Generally speaking, for contracts that do not
contain a fallback provision as described in the legislation, a benchmark
replacement recommended by the Federal Reserve Board will effectively
automatically replace the USD LIBOR benchmark in the contract after
June 30, 2023. The recommended benchmark replacement will be based on the
Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of
New York, including certain spread adjustments and benchmark replacement
conforming changes. Various financial industry groups have been planning for the
transition away from LIBOR, but there remains uncertainty regarding the impact
of the transition from LIBOR on the fund’s transactions and the financial
markets generally. The transition away from LIBOR may lead to increased
volatility and illiquidity in markets that rely on LIBOR and may adversely
affect the fund’s performance. The transition may also result in a reduction in
the value of certain LIBOR-based investments held by the fund or reduce the
effectiveness of related transactions such as hedges. Any such effects of the
transition away from LIBOR, as well as other unforeseen effects, could result in
losses for the fund. Since the usefulness of LIBOR as a benchmark could also
deteriorate during the transition period, effects could occur at any
time.
Long/short strategy
risk. While the fund may invest in long
positions and short positions, there is the risk that the investments will not
perform as expected. The fund’s long/short strategy may result in greater losses
than if the fund held only long positions, as losses on one type of position
could more than offset gains on the other or a fund could lose money on both
positions. The fund’s short positions could result in unlimited losses if the
fund does not own the asset sold short and it is unable to close out of the
short sale or short position.
Market events
risk. The market values of securities or
other assets will fluctuate, sometimes sharply and unpredictably, due to changes
in general market conditions, overall economic trends or events, governmental
actions or intervention, actions taken by the U.S. Federal Reserve or foreign
central banks, market disruptions caused by trade disputes or other factors,
political developments, armed conflicts, economic sanctions and countermeasures
in response to sanctions, major cybersecurity events, investor sentiment, the
global and domestic effects of a pandemic, and other factors that may or may not
be related to the issuer of the security or other asset. Economies and financial
markets throughout the world are increasingly interconnected. Economic,
financial or political events, trading and tariff arrangements, public health
events, terrorism, wars, natural disasters and other circumstances in one
country or region could have profound impacts on global economies or markets. As
a result, whether or not the fund invests in securities of issuers located in or
with significant exposure to the countries or markets directly affected, the
value and liquidity of the fund’s investments may be negatively affected.
Following Russia’s invasion of Ukraine, Russian stocks lost all, or nearly all,
of their market value. Other securities or markets could be similarly affected
by past or future geopolitical or other events or conditions. Furthermore,
events involving limited liquidity, defaults, non‑performance or other adverse
developments that affect one industry, such as the financial services industry,
or concerns or rumors about any events of these kinds, have in the past and may
in the future lead to market-wide liquidity problems, may spread to other
industries, and could negatively affect the value and liquidity of the fund’s
investments.
The
fallout from the COVID‑19 pandemic and its subsequent variants, and the
long-term impact on economies, markets, industries and individual issuers, are
not known. Some sectors of the economy and individual issuers have experienced
or may experience particularly large losses. Periods of extreme volatility in
the financial markets; reduced liquidity of many instruments; and disruptions to
supply chains, consumer demand and employee availability, may continue for some
time.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Recently, inflation and interest rates have increased and may rise further.
These circumstances could adversely affect the value and liquidity of the fund’s
investments, impair the fund’s ability to satisfy redemption requests, and
negatively impact the fund’s
performance.
The
United States and other countries are periodically involved in disputes over
trade and other matters, which may result in tariffs, investment restrictions
and adverse impacts on affected companies and securities. For example, the
United States has imposed tariffs and other trade barriers on Chinese exports,
has restricted sales of certain categories of goods to China, and has
established barriers to investments in China. Trade disputes may adversely
affect the economies of the United States and its trading partners, as well as
companies directly or indirectly affected and financial markets
generally. In addition, the Chinese government is involved in a
longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the United States and China does not improve or
continues to deteriorate, if China were to attempt unification of Taiwan by
force, or if other geopolitical conflicts develop or get worse, economies,
markets and individual securities may be severely affected both regionally and
globally, and the value of the fund’s assets may go
down.
Portfolio management
risk. The value of your investment may
decrease if the judgment of the fund’s adviser about the attractiveness, value
of, or market trends affecting, a particular security, industry, sector or
region, or about market movements, is incorrect or does not produce the desired
results, or if there are imperfections, errors or limitations in the models,
tools and data used by the portfolio managers. In addition, the fund’s
investment strategies or policies may change from time to time. Those changes
may not lead to the results intended by the portfolio managers and could have an
adverse effect on the value or performance of the fund.
Prepayment or call
risk. Many issuers have a right to
prepay their fixed income securities. Issuers may be more likely to prepay their
securities if interest rates fall. If this happens, the fund may not benefit
from the rise in the market price of the securities that normally accompanies a
decline in interest rates, and will be forced to reinvest prepayment proceeds at
a time when yields on securities available in the market are lower than the
yield on prepaid securities. The fund may also lose any premium it paid to
purchase the securities.
|
|
|
|
|
| |
Franklin Multi-Asset Conservative
Growth Fund |
|
| |
|
27 |
|
Real assets
risk. Investments in the real estate,
natural resources and commodities sectors involve a high degree of risk,
including significant financial, operating, and competitive risks. Investments
in royalty trusts, real estate investment trusts and master limited partnerships
expose the fund to adverse macroeconomic conditions, such as changes and
volatility in commodity prices, a rise in interest rates or a downturn in the
economy in which the asset is located, elevating the risk of loss.
Small and
mid‑capitalization company risk. The
fund will be exposed to additional risks as a result of its investments in the
securities of small and mid‑capitalization companies. Small and
mid‑capitalization companies may fall out of favor with investors; may have
limited product lines, operating histories, markets or financial resources; or
may be dependent upon a limited management group. The prices of securities of
small and mid‑capitalization companies generally are more volatile than those of
large capitalization companies and are more likely to be adversely affected than
large capitalization companies by changes in earnings results and investor
expectations or poor economic or market conditions, including those experienced
during a recession. Securities of small and mid‑capitalization companies may
underperform large capitalization companies, may be harder to sell at times and
at prices the portfolio managers believe appropriate and may have greater
potential for losses.
Stock market and
equity securities risk. The stock
markets are volatile and the market prices of the fund’s equity securities may
decline generally. Equity securities may include warrants, rights,
exchange-traded and over‑the‑counter common stocks, preferred stock, depositary
receipts, trust certificates, limited partnership interests and shares of other
investment companies, including exchange-traded funds and real estate investment
trusts. Equity securities may have greater price volatility than other asset
classes, such as fixed income securities, and may fluctuate in price based on
actual or perceived changes in a company’s financial condition and overall
market and economic conditions and perceptions. If the market prices of the
equity securities owned by the fund fall, the value of your investment in the
fund will decline.
Valuation
risk. The sales price the fund could
receive for any particular portfolio investment may differ from the fund’s
valuation of the investment, particularly for securities that trade in thin or
volatile markets or that are valued using a fair value methodology. These
differences may increase significantly and affect fund investments more broadly
during periods of market volatility. Investors who purchase or redeem fund
shares on days when the fund is holding fair-valued securities may receive fewer
or more shares or lower or higher redemption proceeds than they would have
received if the fund had not fair-valued securities or had used a different
valuation methodology. The fund’s ability to value its investments may be
impacted by technological issues and/or errors by pricing services or other
third party service providers. The valuation of the fund’s investments involves
subjective judgment, which may prove to be incorrect.
These
and other risks are discussed in more detail in the Prospectus or in the
Statement of Additional Information.
|
| |
28 |
|
Franklin
Multi-Asset Conservative Growth Fund |
Performance
The
accompanying bar chart and table provide some indication of the risks of
investing in the fund. The bar chart
shows changes in the fund’s performance from year to year for Class A
shares. The table shows the average annual total returns of each class of
the fund that has been in operation for at least one full calendar year and also
compares the fund’s performance with the average annual total returns of an
index or other benchmark. The fund also compares its
performance to the Bloomberg U.S. Aggregate Index (an index of fixed income
securities) and a composite benchmark, which is a hypothetical representation of
the performance of the fund’s major asset classes, consisting of 28% Russell
1000 Index, 12% Russell 2000 Index, 10% MSCI EAFE Index, 43% Bloomberg U.S.
Aggregate Index and 7% Bloomberg U.S. High Yield—2% Issuer Cap Index (an index
where issuer exposure is limited to 2% of the market value of the Bloomberg U.S.
Corporate High Yield Index). Performance for classes other
than those shown may vary from the performance shown to the extent the expenses
for those classes differ. The fund makes updated performance information,
including its current net asset value, available at www.franklintempleton.com/mutualfunds
(select fund and share class), or by calling the fund at
877‑6LM‑FUND/656‑3863.
The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the
future.
Sales charges are not reflected in
the accompanying bar chart, and if those charges were included, returns would be
less than those shown.
Best Quarter (06/30/2020): 12.04 Worst
Quarter (03/31/2020): (14.20)
The
year‑to‑date return as of the
most recent calendar quarter, which ended March 31, 2023, was
4.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Average annual
total returns (%) |
|
(for periods ended
December 31, 2022) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A |
|
|
1 year |
|
|
|
5 years |
|
|
|
10 years |
|
|
|
Since
inception |
|
|
|
Inception
date |
|
Return
before taxes |
|
|
(18.60) |
|
|
|
1.72 |
|
|
|
4.49 |
|
|
|
|
|
|
|
|
|
Return
after taxes on distributions |
|
|
(19.95) |
|
|
|
0.06 |
|
|
|
2.94 |
|
|
|
|
|
|
|
|
|
Return
after taxes on distributions and sale of fund shares |
|
|
(10.04) |
|
|
|
1.05 |
|
|
|
3.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other Classes
(Return before taxes only) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C |
|
|
(15.17) |
|
|
|
2.17 |
|
|
|
4.35 |
|
|
|
|
|
|
|
|
|
Class R |
|
|
(13.95) |
|
|
|
2.57 |
|
|
|
N/A |
|
|
|
3.53 |
|
|
|
06/02/2014 |
|
Class I |
|
|
(13.43) |
|
|
|
3.22 |
|
|
|
N/A |
|
|
|
4.03 |
|
|
|
07/25/2014 |
|
Bloomberg
U.S. Aggregate Index (reflects no deduction for fees, expenses or
taxes)1 |
|
|
(13.01) |
|
|
|
0.02 |
|
|
|
1.06 |
|
|
|
|
|
|
|
|
|
Russell
1000 Index (reflects no deduction for fees, expenses or taxes)2 |
|
|
(19.13) |
|
|
|
9.13 |
|
|
|
12.37 |
|
|
|
|
|
|
|
|
|
Composite
Benchmark (reflects no deduction for fees, expenses or taxes)3 |
|
|
(15.32) |
|
|
|
3.79 |
|
|
|
5.99 |
|
|
|
|
|
|
|
|
|
1 |
For Class R and Class I
shares, for the period from the class’ inception date to December 31,
2022, the average annual total return of the Bloomberg U.S. Aggregate
Index was 1.06% and 1.02%,
respectively. |
2 |
For Class R and Class I
shares, for the period from the class’ inception date to December 31,
2022, the average annual total return of the Russell 1000 Index was 10.17%
and 9.98%, respectively. |
3 |
For Class R and Class I
shares, for the period from the class’ inception date to December 31,
2022, the average annual total return of the Composite Benchmark was 4.90%
and 4.82%,
respectively. |
Prior
to June 1, 2015, the fund followed different investment policies and
strategies.
The after‑tax returns are shown
only for Class A shares, are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after‑tax returns
depend on an investor’s tax situation and may differ from those shown, and the
after‑tax returns shown are not relevant to investors who hold their fund shares
through tax‑deferred arrangements, such as 401(k) plans or individual retirement
accounts. After‑tax returns for classes other than Class A
will vary from returns shown for Class A. Returns after taxes on
distributions and sale of fund shares are higher than returns before taxes for
certain periods shown because they reflect the tax benefit of capital losses
realized on the redemption of fund
shares.
|
|
|
|
|
| |
Franklin Multi-Asset Conservative
Growth Fund |
|
| |
|
29 |
|
Management
Investment
manager: Legg Mason Partners Fund
Advisor, LLC (“LMPFA”)
Subadviser: Franklin Advisers, Inc. (“Franklin Advisers”)
Portfolio
managers: Primary responsibility for the
day‑to‑day management of the fund lies with the following portfolio managers. At
Franklin Advisers, all portfolios are managed on a collaborative basis using a
systematic, rules based approach.
|
|
|
| |
Portfolio
manager |
|
Title |
|
Portfolio manager
of the fund since |
|
|
|
Laura
Green, CFA
|
|
Portfolio
Manager
|
|
2021
|
| |
|
Jacqueline
Kenney, CFA
|
|
Portfolio
Manager
|
|
2021
|
Purchase and sale of fund
shares
You
may purchase, redeem or exchange shares of the fund each day the New York Stock
Exchange is open, at the fund’s net asset value determined after receipt of your
request in good order, subject to any applicable sales charge.
The
fund’s initial and subsequent investment minimums generally are set forth in the
accompanying table:
|
|
|
|
|
|
|
|
|
| |
Investment minimum initial/additional investment
($) |
|
|
|
|
Class A |
|
Class C1 |
|
Class R |
|
Class I |
|
Class IS |
General |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/None2 |
|
N/A |
Uniform
Gifts or Transfers to Minor Accounts |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/None2 |
|
N/A |
IRAs |
|
250/50 |
|
250/50 |
|
N/A |
|
1 million/None2,3 |
|
N/A3 |
SIMPLE
IRAs |
|
None/None |
|
None/None |
|
N/A |
|
1 million/None2 |
|
N/A |
Systematic
Investment Plans |
|
25/25 |
|
25/25 |
|
N/A |
|
1 million/None2,4 |
|
N/A4 |
Clients
of Eligible Financial Intermediaries |
|
None/None |
|
N/A |
|
None/ None |
|
None/
None5 |
|
None/
None5 |
Eligible
Investment Programs |
|
None/None |
|
N/A |
|
None/ None |
|
None/None |
|
None/
None |
Omnibus
Retirement Plans |
|
None/None |
|
None/None |
|
None/ None |
|
None/
None |
|
None/None |
Individual
Retirement Plans except as noted |
|
None/None |
|
None/None |
|
N/A |
|
1 million/None2 |
|
N/A |
Institutional
Investors |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/None |
|
1 million/None |
1 |
Class
C shares are not available for purchase through Distributor Accounts.
|
2 |
Available
to investors investing directly with the fund. |
3 |
IRA
accountholders who purchase Class I or Class IS shares through a
Service Agent acting as agent on behalf of its customers are subject to
the initial and subsequent minimums of $250/$50. If a Service Agent does
not have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
4 |
Investors
investing through a Systematic Investment Plan who purchase Class I
or Class IS shares through a Service Agent acting as agent on behalf
of its customers are subject to the initial and subsequent minimums of
$25/$25. If a Service Agent does not have this arrangement in place with
the Distributor, the initial and subsequent minimums listed in the table
apply. Please contact your Service Agent for more information.
|
5 |
Individual
investors who purchase Class I shares or Class IS shares through
a Service Agent acting as agent on behalf of its customers are subject to
the initial and subsequent minimums of $1,000/$50. If a Service Agent does
not have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
Your
Service Agent may impose higher or lower investment minimums, or may impose no
minimum investment requirement.
For
more information about how to purchase, redeem or exchange shares, and to learn
which classes of shares are available to you, you should contact your Service
Agent, or, if you hold your shares or plan to purchase shares through the fund,
you should contact the fund by phone at 877‑6LM‑FUND/656‑3863, by regular mail
at Legg Mason Funds, P.O. Box 33030, St. Petersburg, FL 33733-8030 or by
express, certified or registered mail at Legg Mason Funds, 100 Fountain Parkway,
St. Petersburg, FL 33716-1205.
Tax information
The
fund’s distributions are generally taxable as ordinary income or capital gains.
|
| |
30 |
|
Franklin
Multi-Asset Conservative Growth Fund |
Payments to
broker/dealers and other financial intermediaries
The
fund’s related companies pay Service Agents for the sale of fund shares,
shareholder services and other purposes. These payments create a conflict of
interest by influencing your Service Agent or its employees or associated
persons to recommend the fund over another investment. Ask your financial
adviser or salesperson or visit your Service Agent’s or salesperson’s website
for more information.
|
|
|
|
|
| |
Franklin Multi-Asset Conservative
Growth Fund |
|
| |
|
31 |
|
Franklin Multi-Asset
Defensive Growth Fund
Investment objective
The fund seeks income as a
primary objective and long-term growth of
capital as a secondary objective.
Fees and expenses of the
fund
The
accompanying table describes the fees and expenses that you may pay if you buy,
hold and sell shares of the fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
You may qualify for sales charge discounts
if you and your family invest, or agree to invest in the future, at least
$100,000 in funds distributed through
Franklin Distributors, LLC (“Franklin Distributors” or the “Distributor”), the
fund’s distributor. More information about these and other
discounts is available from your Service Agent, in the fund’s Prospectus on page
66 under the heading “Additional information about each share class,” in the
appendix titled “Appendix: Waivers and Discounts Available from Certain Service
Agents” on page A‑1 of the fund’s Prospectus and in the fund’s Statement of
Additional Information (“SAI”) on page 88 under the heading “Sales Charge
Waivers and Reductions for Class A Shares.” “Service Agents” include banks,
brokers, dealers, insurance companies, investment advisers, financial
consultants or advisers, mutual fund supermarkets and other financial
intermediaries that have entered into an agreement with the Distributor to sell
shares of the fund.
If
you purchase Class I shares or Class IS shares through a Service Agent
acting solely as an agent on behalf of its customers, that Service Agent may
charge you a commission. Such commissions, if any, are not charged by the fund
and are not reflected in the fee table or expense example
below.
|
| |
| |
| |
| |
| |
| |
Shareholder
fees |
(fees paid directly
from your investment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
Class C |
|
Class C1 |
|
Class R |
|
Class I |
|
Class IS |
Maximum sales charge (load) imposed on
purchases (as a % of offering price) |
|
3.751,2 |
|
None |
|
None |
|
None |
|
None |
|
None |
Maximum deferred sales charge (load) (as a % of
the lower of net asset value at purchase or redemption)3 |
|
None4 |
|
1.00 |
|
1.00 |
|
None |
|
None |
|
None |
Small account fee5 |
|
$15 |
|
$15 |
|
$15 |
|
None |
|
None |
|
None |
|
|
Annual fund
operating expenses (%) |
|
|
|
|
|
|
|
|
|
|
|
|
(expenses that you
pay each year as a percentage of the value of your
investment) |
|
|
|
|
Class A |
|
Class C |
|
Class C1 |
|
Class R |
|
Class I |
|
Class IS |
Management fees |
|
None |
|
None |
|
None |
|
None |
|
None |
|
None |
Distribution and/or service (12b‑1)
fees |
|
0.25 |
|
1.00 |
|
0.70 |
|
0.50 |
|
None |
|
None |
Other expenses |
|
0.31 |
|
0.30 |
|
1.35 |
|
0.37 |
|
0.27 |
|
0.186 |
Acquired fund fees and expenses |
|
0.70 |
|
0.70 |
|
0.70 |
|
0.70 |
|
0.70 |
|
0.70 |
Total annual fund operating expenses7 |
|
1.26 |
|
2.00 |
|
2.75 |
|
1.57 |
|
0.97 |
|
0.88 |
Fees waived and/or expenses reimbursed8 |
|
— |
|
— |
|
(0.80) |
|
(0.07) |
|
(0.02) |
|
(0.03) |
Total annual fund operating expenses after
waiving fees and/or reimbursing expenses9 |
|
1.26 |
|
2.00 |
|
1.95 |
|
1.50 |
|
0.95 |
|
0.85 |
1 |
The
sales charge is waived for shareholders purchasing Class A shares
through accounts where Franklin Distributors is the broker-dealer of
record (“Distributor Accounts”). |
2 |
Shareholders purchasing Class A
shares through certain Service Agents or in certain types of accounts may
be eligible for a waiver of the sales charge. For additional information,
see “Additional information about each share class — Sales charges” in the
Prospectus. |
3 |
Maximum
deferred sales charge (load) may be reduced over
time. |
4 |
You may buy Class A shares in amounts of $500,000 or
more at net asset value (without an initial sales charge), but if you
redeem those shares within 18 months of their purchase, you will pay a
contingent deferred sales charge of
1.00%. |
|
| |
32 |
|
Franklin
Multi-Asset Defensive Growth Fund |
5 |
If
the value of your account is below $1,000 ($250 for retirement plans that
are not employer-sponsored), the fund may charge you a fee of $3.75 per
account that is determined and assessed quarterly by the fund or your
Service Agent (with an annual maximum of $15.00 per account). Please
contact your Service Agent or the fund for more
information. |
6 |
Other expenses for
Class IS shares are estimated for the current fiscal year. Actual
expenses may differ from
estimates. |
7 |
Total annual
fund operating expenses do not correlate with the ratios of expenses to
average net assets reported in the financial highlights tables in the
fund’s Prospectus and in the fund’s shareholder reports, which reflect the
fund’s operating expenses and do not include acquired fund fees and
expenses. |
8 |
The
manager has agreed to waive fees and/or reimburse operating expenses
(other than interest, brokerage, taxes, extraordinary expenses and
acquired fund fees and expenses) so that the ratio of total annual fund
operating expenses will not exceed 0.80% for Class A shares, 1.55%
for Class C shares, 1.25% for Class C1 shares, 0.80% for
Class R shares, 0.25% for Class I shares and 0.15% for
Class IS shares, subject to recapture as described below. In
addition, the ratio of total annual fund operating expenses for
Class IS shares will not exceed the ratio of total annual fund
operating expenses for Class I shares, subject to recapture as
described below. These arrangements cannot be terminated prior to
December 31,
2024 without the Board of Trustees’ consent. The manager
is permitted to recapture amounts waived and/or reimbursed to a class
during the same fiscal year in which the manager earned the fee or
incurred the expense if the class’ total annual fund operating expenses
have fallen to a level below the limits described above. In no case will
the manager recapture any amount that would result, on any particular
business day of the fund, in the class’ total annual fund operating
expenses exceeding the applicable limits described above or any other
lower limit then in effect. |
9 |
Total
annual fund operating expenses (after waiving fees and/or reimbursing
expenses, as applicable) are higher than the expense cap amounts for each
class as a result of acquired fund fees and
expenses. |
Example
This
example is intended to help you compare the cost of investing in the fund with
the cost of investing in other mutual funds. The example assumes:
• |
|
You
invest $10,000 in the fund for the time periods
indicated |
• |
|
Your
investment has a 5% return each year and the fund’s operating expenses
remain the same (except that any applicable fee waiver or expense
reimbursement is reflected only through its expiration
date) |
• |
|
You
reinvest all distributions and dividends without a sales
charge |
Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
|
|
|
|
|
|
|
| |
Number of years you own
your shares ($) |
|
|
|
|
|
|
|
|
|
|
1 year |
|
3 years |
|
5 years |
|
10 years |
Class A
(with or without redemption at end of period) |
|
499 |
|
760 |
|
1,041 |
|
1,841 |
Class C
(with redemption at end of period) |
|
303 |
|
627 |
|
1,077 |
|
2,136 |
Class C
(without redemption at end of period) |
|
203 |
|
627 |
|
1,077 |
|
2,136 |
Class C1
(with redemption at end of period) |
|
298 |
|
778 |
|
1,384 |
|
2,660 |
Class C1
(without redemption at end of period) |
|
198 |
|
778 |
|
1,384 |
|
2,660 |
Class R
(with or without redemption at end of period) |
|
153 |
|
489 |
|
849 |
|
1,861 |
Class I
(with or without redemption at end of period) |
|
97 |
|
307 |
|
534 |
|
1,188 |
Class IS
(with or without redemption at end of period) |
|
87 |
|
278 |
|
485 |
|
1,081 |
Portfolio
turnover. The fund pays
transaction costs, such as commissions, when it buys and sells securities (or
“turns over” its portfolio). A higher portfolio turnover rate may indicate
higher transaction costs and may result in higher taxes when shares are held in
a taxable account. These costs, which are not reflected in annual fund operating
expenses or in the example, affect the fund’s performance. During the most
recent fiscal year, the fund’s portfolio turnover rate was 36% of the average value of its
portfolio.
Principal investment
strategies
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market conditions, the portfolio
managers will allocate between 15% to 45% of the fund’s assets to underlying
funds that invest in equity and equity-like strategies and between 55% to 85% of
the fund’s assets to underlying funds that invest in fixed income strategies.
The portfolio managers may, however, allocate fund assets to any underlying
funds in varying amounts in a manner consistent with the fund’s investment
objective. The fund’s allocation to each class will be measured at the time of
purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark as defined under “Performance”
below.
|
|
|
|
|
| |
Franklin Multi-Asset Defensive
Growth Fund |
|
| |
|
33 |
|
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative investments (such as
commodities, real estate assets and infrastructure assets). The underlying
equity funds may employ strategies similar to those used by hedge funds, which
may have a low correlation to broad stock market movements or take both long and
short positions in equity securities. The underlying fixed income funds include
funds investing in any sector, region or style, including foreign fixed income
strategies, currency strategies, inflation-indexed securities, structured credit
and distressed debt. The underlying fixed income funds may take both long and
short positions in fixed income securities. Such funds may also seek to profit
from changes in global financial markets and take positions to take advantage of
changes in interest rates, exchange rates, liquidity and other macroeconomic
factors. The underlying fixed income funds may also invest in securities having
maturities of any length and any credit quality, including securities rated
below investment grade (commonly known as “junk bonds”). The portfolio managers
may invest the fund’s assets in underlying funds that have a limited performance
history.
Principal risks
Risk
is inherent in all investing. The value of your investment in the fund, as well
as the amount of return you receive on your investment, may fluctuate
significantly. You may lose part or all
of your investment in the fund or your investment may not perform as well as
other similar investments. An investment in the fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or by any
bank or government agency. The following is a list of the
principal risks of investing in the fund. The descriptions appear in
alphabetical order, not order of importance.
The
fund invests in underlying funds and is exposed to the risks to which the
underlying funds are exposed, as well as the risk that the underlying funds will
not perform as expected. Unless otherwise noted, the principal risks summarized
below include both direct and indirect risks, and references in this section to
the fund include the risks of investing in the underlying funds.
Affiliated funds
risk. The fund’s manager, subadviser or
an affiliate serves as manager or subadviser of certain Legg Mason and Franklin
Templeton affiliated underlying funds (“Affiliated Funds”). As a result, the
manager and the subadviser have financial incentives to allocate the fund’s
assets to Affiliated Funds that pay fees to the manager, the subadviser or an
affiliate. For example, the manager and the subadviser have an incentive to
select Affiliated Funds that will result in the greatest revenue to the manager
and its affiliates, even if that results in increased expenses for the fund.
Similarly, the manager and the subadviser have an incentive to delay or decide
against the sale of interests held by a fund in Affiliated Funds. This gives
rise to a conflict of interest.
Allocation
risk. The fund’s ability to achieve its
investment goal depends upon the portfolio managers’ skill in determining the
fund’s strategic asset class allocation and in selecting the mix of underlying
funds. The value of your investment may decrease if the portfolio managers’
judgment about the attractiveness, value or market trends affecting a particular
asset class, investment style, underlying fund or other issuer is incorrect.
Asset class
variation risk. An underlying fund that
invests principally in securities constituting one or more asset classes (i.e.,
equity or fixed income) may vary the percentage of its assets in these asset
classes (subject to any applicable regulatory requirements).
Credit
risk. If an issuer or guarantor of
a security held by the fund or a counterparty to a financial contract with the
fund defaults or its credit is downgraded, or is perceived to be less
creditworthy, or if the value of the assets underlying a security declines, the
value of your investment will typically decline. Changes in actual or perceived
creditworthiness may occur quickly. The fund could be delayed or hindered in its
enforcement of rights against an issuer, guarantor or counterparty. Subordinated
securities (meaning securities that rank below other securities with respect to
claims on the issuer’s assets) are more likely to suffer a credit loss than
non‑subordinated securities of the same issuer and will be disproportionately
affected by a default, downgrade or perceived decline in creditworthiness.
Cybersecurity
risk. Cybersecurity incidents, whether
intentionally caused by third parties or otherwise, may allow an unauthorized
party to gain access to fund assets, fund or customer data (including private
shareholder information) or proprietary information, cause the fund, the
manager, the subadvisers and/or their service providers (including, but not
limited to, fund accountants, custodians, sub‑custodians, transfer agents and
financial intermediaries) to suffer data breaches, data corruption or loss of
operational functionality, or prevent fund investors from purchasing, redeeming
or exchanging shares, receiving distributions or receiving timely information
regarding the fund or their investment in the fund. The fund, the manager, and
the subadvisers have limited ability to prevent or mitigate cybersecurity
incidents affecting third party service providers, and such third party service
providers may have limited indemnification obligations to the fund, the manager,
and/or the subadvisers. Cybersecurity incidents may result in financial losses
to the fund and its shareholders, and substantial costs may be incurred in order
to prevent or mitigate any future cybersecurity incidents. Issuers of securities
in which the fund invests are also subject to cybersecurity risks, and the value
of these securities could decline if the issuers experience cybersecurity
incidents.
Because
technology is frequently changing, new ways to carry out cyber attacks are
always developing. Therefore, there is a chance that some risks have not been
identified or prepared for, or that an attack may not be detected, which puts
limitations on the fund’s ability to plan for or respond to a cyber attack. Like
other funds and business enterprises, the fund, the manager, the subadvisers and
their service providers are subject to the risk of cyber incidents occurring
from time to time.
Derivatives
risk. Using derivatives can increase
fund losses and reduce opportunities for gains, such as when market prices,
interest rates, currencies, or the derivatives themselves behave in a way not
anticipated by the fund. Using derivatives also can have a leveraging
effect and increase fund volatility. Certain derivatives have the potential for
unlimited loss, regardless of the size of the initial investment. Derivatives
may not be available at the time or price desired, may be difficult to sell,
unwind or value, and the counterparty may default on its obligations to the
fund.
|
| |
34 |
|
Franklin
Multi-Asset Defensive Growth Fund |
Derivatives
are generally subject to the risks applicable to the assets, rates, indices or
other indicators underlying the derivative. The value of a derivative may
fluctuate more than the underlying assets, rates, indices or other indicators to
which it relates. Use of derivatives may have different tax consequences for the
fund than an investment in the underlying asset, and those differences may
affect the amount, timing and character of income distributed to shareholders.
The U.S. government and foreign governments have adopted and implemented or are
in the process of adopting and implementing regulations governing derivatives
markets, including mandatory clearing of certain derivatives, margin and
reporting requirements. The ultimate impact of the regulations remains unclear.
Additional regulation of derivatives may make derivatives more costly, limit
their availability or utility, otherwise adversely affect their performance or
disrupt markets.
Credit
default swap contracts involve heightened risks and may result in losses to the
fund. Credit default swaps may be illiquid and difficult to value. When the fund
sells credit protection via a credit default swap, credit risk increases since
the fund has exposure to both the issuer whose credit is the subject of the swap
and the counterparty to the swap.
Extension
risk. When interest rates rise,
repayments of fixed income securities may occur more slowly than anticipated,
extending the effective duration of these fixed income securities at below
market interest rates and causing their market prices to decline more than they
would have declined due to the rise in interest rates alone. This may cause the
fund’s share price to be more volatile.
Fixed income
securities risk. Fixed income securities
are subject to a number of risks, including credit, market and interest rate
risks. Credit risk is the risk that the issuer or obligor will not make timely
payments of principal and interest. Changes in an issuer’s or obligor’s credit
rating or the market’s perception of an issuer’s or obligor’s creditworthiness
may also affect the value of the fund’s investment in that issuer. The fund is
subject to greater levels of credit risk to the extent it holds below investment
grade debt securities, or “junk” bonds. Market risk is the risk that the fixed
income markets may become volatile and have lower liquidity or behave in
unexpected ways, and the market value of an investment may decrease, sometimes
quickly or unpredictably. Interest rate risk is the risk that the value of a
fixed income security will fall when interest rates rise. A rise in interest
rates tends to have a greater impact on the prices of longer term or duration
securities. A general rise in interest rates may cause investors to move out of
fixed income securities on a large scale, which could adversely affect the price
and liquidity of fixed income securities.
Foreign investments
and emerging markets risk. The fund’s investments in securities of
foreign issuers or issuers with significant exposure to foreign markets involve
additional risk as compared to investments in U.S. securities or issuers with
predominantly domestic exposure, such as less liquid, less transparent, less
regulated and more volatile markets. The value of the fund’s investments may
decline because of factors affecting the particular issuer as well as foreign
markets and issuers generally, such as unfavorable or unsuccessful government
actions, reduction of government or central bank support, inadequate accounting
standards and auditing and financial recordkeeping requirements, lack of
information, political, economic, financial or social instability, terrorism,
armed conflicts and other geopolitical events, and the impact of tariffs and
other restrictions on trade or economic sanctions. Geopolitical or other events
such as nationalization or expropriation could even cause the loss of the fund’s
entire investment in one or more countries.
In
addition, there may be significant obstacles to obtaining information necessary
for investigations into or litigation against issuers located in or operating in
certain foreign markets, particularly emerging market countries, and
shareholders may have limited legal remedies. To the extent the fund focuses its
investments in a single country or only a few countries in a particular
geographic region, economic, political, regulatory or other conditions affecting
such country or region may have a greater impact on fund performance relative to
a more geographically diversified
fund.
The
value of investments in securities denominated in foreign currencies increases
or decreases as the rates of exchange between those currencies and the U.S.
dollar change. Currency conversion costs and currency fluctuations could
erase investment gains or add to investment losses. Currency exchange rates can
be volatile, and are affected by factors such as general economic and political
conditions, the actions of the U.S. and foreign governments or central banks,
the imposition of currency controls and speculation. The fund may be unable or
may choose not to hedge its foreign currency
exposure.
Less
developed markets are more likely to experience problems with the clearing and
settling of trades and the holding of securities by local banks, agents and
depositories. Settlement of trades in these markets can take longer than in
other markets and the fund may not receive its proceeds from the sale of certain
securities for an extended period (possibly several weeks or even
longer).
The
risks of foreign investments are heightened when investing in issuers in
emerging market countries. Emerging market countries tend to have economic,
political and legal systems that are less developed and are less stable than
those of more developed countries. Their economies tend to be less diversified
than those of more developed countries. They typically have fewer medical and
economic resources than more developed countries, and thus they may be less able
to control or mitigate the effects of a pandemic or a natural disaster. They are
often particularly sensitive to market movements because their market prices
tend to reflect speculative expectations. Low trading volumes may result in
a lack of liquidity and in extreme price
volatility.
Growth and value
investing risk. Growth or value
securities as a group may be out of favor and underperform the overall equity
market while the market favors other types of securities. Growth securities
typically are very sensitive to market movements because their market prices
tend to reflect future expectations. When it appears those expectations will not
be met, the prices of growth securities typically fall. Growth securities may
also be more volatile than other investments because they often do not pay
dividends. The values of growth securities tend to go down when interest rates
rise because the rise in interest rates reduces the current value of future cash
flows. The value approach to investing involves the risk that stocks may remain
undervalued, undervaluation may become more severe, or perceived undervaluation
may actually represent intrinsic value. A
|
|
|
|
|
| |
Franklin Multi-Asset Defensive
Growth Fund |
|
| |
|
35 |
|
value
stock may not increase in price as anticipated by the subadviser if other
investors fail to recognize the company’s value and bid up the price or the
factors that the subadviser believes will increase the price of the security do
not occur or do not have the anticipated
effect.
Hedge fund
strategies risk. The fund, through the
underlying funds, may employ investment strategies that involve greater risks
than the strategies used by typical mutual funds, including increased use of
short sales, leverage and derivative transactions and hedging strategies. The
fund may invest in underlying funds employing proprietary investment strategies
that are not fully disclosed, which may involve risks that are not anticipated.
Hedge fund strategies may be narrowly focused on a particular market, security
type or activity, and thus are exposed to greater risk of loss if the investment
thesis underlying the strategy does not occur as anticipated. Hedge fund
strategies that are intended to reduce the fund’s volatility may fail to do so
effectively. The use of leverage by a hedge fund strategy (e.g., through
options) will magnify any losses incurred by the strategy.
High yield (“junk”)
bonds risk. High yield bonds are
generally subject to greater credit risks than higher-grade bonds, including the
risk of default on the payment of interest or principal. High yield bonds
are considered speculative, typically have lower liquidity and are more
difficult to value than higher grade bonds. High yield bonds tend to be volatile
and more susceptible to adverse events, credit downgrades and negative
sentiments and may be difficult to sell at a desired price, or at all, during
periods of uncertainty or market turmoil.
Illiquidity
risk. Some assets held by the fund may
be or become impossible or difficult to sell and some assets that the fund wants
to invest in may be impossible or difficult to purchase, particularly during
times of market turmoil or due to adverse changes in the conditions of a
particular issuer. These illiquid assets may also be volatile and difficult to
value. Markets may become illiquid when, for instance, there are few, if any,
interested buyers or sellers or when dealers are unwilling or unable to make a
market for certain securities. As a general matter, dealers have been less
willing to make markets for fixed income securities. Federal banking regulations
may also cause certain dealers to reduce their inventories of certain
securities, which may further decrease the fund’s ability to buy or sell such
securities. During times of market turmoil, there have been, and may be, no
buyers or sellers for securities in entire asset classes. If the fund is forced
to sell an illiquid asset to meet redemption requests or other cash needs, or to
try to limit losses, the fund may be forced to sell at a substantial loss or may
not be able to sell at all. The fund may not receive its proceeds from the sale
of certain securities for an extended period (for example, several weeks or even
longer). The liquidity of certain assets, particularly of privately-issued and
non‑investment grade mortgage-backed securities, asset-backed securities and
collateralized debt securities, may be difficult to ascertain and may change
over time.
Investing in a fund
of funds risk. Your cost of investing in
the fund, as a fund of funds, may be higher than the cost of investing in a
mutual fund that only invests directly in individual equity and fixed income
securities. Because the fund will indirectly bear its pro rata share of the fees
and expenses incurred by an underlying fund in which it invests, including
advisory fees, an increase in fees and expenses of an underlying fund or a
reallocation of the fund’s investments to underlying funds with higher fees or
expenses will increase the fund’s total expenses. These expenses are in addition
to other expenses that the fund bears directly in connection with its own
operations. An underlying fund may change its investment objective or policies
without the fund’s approval, which could cause the fund to withdraw its
investment from such underlying fund at a time that is unfavorable to the fund.
In addition, one underlying fund may buy the same securities that another
underlying fund sells. Therefore, the fund would indirectly bear the costs of
these trades without accomplishing any investment purpose. If underlying funds
invest in the same or similar securities, the fund may indirectly bear
concentration risk with respect to those investments. If the fund invests in an
underlying fund that has recently commenced operations, there can be no
assurance that such underlying fund will grow to or maintain an economically
viable size, in which case the underlying fund’s board or adviser may determine
to liquidate the underlying fund or the fund may indirectly bear higher
expenses.
Investing in ETFs
risk. Unlike shares of typical mutual
funds or unit investment trusts, shares of ETFs are traded on an exchange and
may trade throughout a trading day. ETFs are bought and sold based on market
values and not at net asset value, and therefore may trade at either a premium
or discount to net asset value and may experience volatility in certain market
conditions. The fund will pay brokerage commissions in connection with the
purchase and sales of shares of ETFs. In addition, the fund will indirectly bear
its pro rata share of fees and expenses incurred by an ETF in which it invests,
including advisory fees. These expenses are in addition to expenses that the
fund bears directly in connection with its own operations. Certain ETFs are also
subject to portfolio management risk. Investments in ETFs are subject to the
risk that the listing exchange may halt trading of an ETF’s shares, in which
case the fund would be unable to sell its ETF shares unless and until trading is
resumed.
Issuer
risk. The market price of a security can
go up or down more than the market as a whole and can perform differently from
the value of the market as a whole, due to factors specifically relating to the
security’s issuer, such as disappointing earnings reports by the issuer,
unsuccessful products or services, loss of major customers, changes in
management, corporate actions, negative perception in the marketplace, or major
litigation or changes in government regulations affecting the issuer or the
competitive environment. An individual security may also be affected by factors
relating to the industry or sector of the issuer. The fund may experience a
substantial or complete loss on an individual security. A change in financial
condition or other event affecting a single issuer may adversely impact the
industry or sector of the issuer or securities markets as a whole.
Large capitalization
company risk. Large capitalization
companies may fall out of favor with investors based on market and economic
conditions. In addition, larger companies may not be able to attain the high
growth rates of successful smaller companies and may be less capable of
responding quickly to competitive challenges and industry changes. As a result,
the fund’s value may not rise as much as, or may fall more than, the value of
funds that focus on companies with smaller market capitalizations.
LIBOR
risk. The fund’s investments, payment
obligations, and financing terms may be based on floating rates, such as the
London Interbank Offered Rate, or “LIBOR,” which is the offered rate for
short-term Eurodollar deposits between major international banks. In 2017, the
U.K. Financial Conduct Authority (“FCA”) announced its intention to cease
compelling banks to provide the quotations needed to sustain LIBOR after 2021.
ICE Benchmark
|
| |
36 |
|
Franklin
Multi-Asset Defensive Growth Fund |
Administration,
the administrator of LIBOR, ceased publication of most LIBOR settings on a
representative basis at the end of 2021 and is expected to cease publication of
the remaining U.S. dollar LIBOR settings on a representative basis after
June 30, 2023. In addition, global regulators have announced that, with
limited exceptions, no new LIBOR-based contracts should be entered into after
2021. Actions by regulators have resulted in the establishment of alternative
reference rates to LIBOR in most major currencies. In March 2022, the U.S.
federal government enacted legislation to establish a process for replacing
LIBOR in certain existing contracts that do not already provide for the use of a
clearly defined or practicable replacement benchmark rate as described in the
legislation. Generally speaking, for contracts that do not contain a fallback
provision as described in the legislation, a benchmark replacement recommended
by the Federal Reserve Board will effectively automatically replace the USD
LIBOR benchmark in the contract after June 30, 2023. The recommended
benchmark replacement will be based on the Secured Overnight Financing Rate
(SOFR) published by the Federal Reserve Bank of New York, including certain
spread adjustments and benchmark replacement conforming changes. Various
financial industry groups have been planning for the transition away from LIBOR,
but there remains uncertainty regarding the impact of the transition from LIBOR
on the fund’s transactions and the financial markets generally. The transition
away from LIBOR may lead to increased volatility and illiquidity in markets that
rely on LIBOR and may adversely affect the fund’s performance. The transition
may also result in a reduction in the value of certain LIBOR-based investments
held by the fund or reduce the effectiveness of related transactions such as
hedges. Any such effects of the transition away from LIBOR, as well as other
unforeseen effects, could result in losses for the fund. Since the usefulness of
LIBOR as a benchmark could also deteriorate during the transition period,
effects could occur at any time.
Long/short strategy
risk. While the fund may invest in long
positions and short positions, there is the risk that the investments will not
perform as expected. The fund’s long/short strategy may result in greater losses
than if the fund held only long positions, as losses on one type of position
could more than offset gains on the other or a fund could lose money on both
positions. The fund’s short positions could result in unlimited losses if the
fund does not own the asset sold short and it is unable to close out of the
short sale or short position.
Market events
risk. The market values of securities or
other assets will fluctuate, sometimes sharply and unpredictably, due to changes
in general market conditions, overall economic trends or events, governmental
actions or intervention, actions taken by the U.S. Federal Reserve or foreign
central banks, market disruptions caused by trade disputes or other factors,
political developments, armed conflicts, economic sanctions and countermeasures
in response to sanctions, major cybersecurity events, investor sentiment, the
global and domestic effects of a pandemic, and other factors that may or may not
be related to the issuer of the security or other asset. Economies and financial
markets throughout the world are increasingly interconnected. Economic,
financial or political events, trading and tariff arrangements, public health
events, terrorism, wars, natural disasters and other circumstances in one
country or region could have profound impacts on global economies or markets. As
a result, whether or not the fund invests in securities of issuers located in or
with significant exposure to the countries or markets directly affected, the
value and liquidity of the fund’s investments may be negatively affected.
Following Russia’s invasion of Ukraine, Russian stocks lost all, or nearly all,
of their market value. Other securities or markets could be similarly affected
by past or future geopolitical or other events or conditions. Furthermore,
events involving limited liquidity, defaults, non‑performance or other adverse
developments that affect one industry, such as the financial services industry,
or concerns or rumors about any events of these kinds, have in the past and may
in the future lead to market-wide liquidity problems, may spread to other
industries, and could negatively affect the value and liquidity of the fund’s
investments.
The
fallout from the COVID‑19 pandemic and its subsequent variants, and the
long-term impact on economies, markets, industries and individual issuers, are
not known. Some sectors of the economy and individual issuers have experienced
or may experience particularly large losses. Periods of extreme volatility in
the financial markets; reduced liquidity of many instruments; and disruptions to
supply chains, consumer demand and employee availability, may continue for some
time.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Recently, inflation and interest rates have increased and may rise further.
These circumstances could adversely affect the value and liquidity of the fund’s
investments, impair the fund’s ability to satisfy redemption requests, and
negatively impact the fund’s
performance.
The
United States and other countries are periodically involved in disputes over
trade and other matters, which may result in tariffs, investment restrictions
and adverse impacts on affected companies and securities. For example, the
United States has imposed tariffs and other trade barriers on Chinese exports,
has restricted sales of certain categories of goods to China, and has
established barriers to investments in China. Trade disputes may adversely
affect the economies of the United States and its trading partners, as well as
companies directly or indirectly affected and financial markets
generally. In addition, the Chinese government is involved in a
longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the United States and China does not improve or
continues to deteriorate, if China were to attempt unification of Taiwan by
force, or if other geopolitical conflicts develop or get worse, economies,
markets and individual securities may be severely affected both regionally and
globally, and the value of the fund’s assets may go
down.
Portfolio management
risk. The value of your investment may
decrease if the judgment of the fund’s adviser about the attractiveness, value
of, or market trends affecting, a particular security, industry, sector or
region, or about market movements, is incorrect or does not produce the desired
results, or if there are imperfections, errors or limitations in the models,
tools and data used by the portfolio managers. In addition, the fund’s
investment strategies or policies may change from time to time. Those changes
may not lead to the results intended by the portfolio managers and could have an
adverse effect on the value or performance of the fund.
Prepayment or call
risk. Many issuers have a right to
prepay their fixed income securities. Issuers may be more likely to prepay their
securities if interest rates fall. If this happens, the fund may not benefit
from the rise in the market price of the securities that normally accompanies a
decline in
|
|
|
|
|
| |
Franklin Multi-Asset Defensive
Growth Fund |
|
| |
|
37 |
|
interest
rates, and will be forced to reinvest prepayment proceeds at a time when yields
on securities available in the market are lower than the yield on prepaid
securities. The fund may also lose any premium it paid to purchase the
securities.
Real assets
risk. Investments in the real estate,
natural resources and commodities sectors involve a high degree of risk,
including significant financial, operating, and competitive risks. Investments
in royalty trusts, real estate investment trusts and master limited partnerships
expose the fund to adverse macroeconomic conditions, such as changes and
volatility in commodity prices, a rise in interest rates or a downturn in the
economy in which the asset is located, elevating the risk of loss.
Small and
mid‑capitalization company risk. The
fund will be exposed to additional risks as a result of its investments in the
securities of small and mid‑capitalization companies. Small and
mid‑capitalization companies may fall out of favor with investors; may have
limited product lines, operating histories, markets or financial resources; or
may be dependent upon a limited management group. The prices of securities of
small and mid‑capitalization companies generally are more volatile than those of
large capitalization companies and are more likely to be adversely affected than
large capitalization companies by changes in earnings results and investor
expectations or poor economic or market conditions, including those experienced
during a recession. Securities of small and mid‑capitalization companies may
underperform large capitalization companies, may be harder to sell at times and
at prices the portfolio managers believe appropriate and may have greater
potential for losses.
Stock market and
equity securities risk. The stock
markets are volatile and the market prices of the fund’s equity securities may
decline generally. Equity securities may include warrants, rights,
exchange-traded and over‑the‑counter common stocks, preferred stock, depositary
receipts, trust certificates, limited partnership interests and shares of other
investment companies, including exchange-traded funds and real estate investment
trusts. Equity securities may have greater price volatility than other asset
classes, such as fixed income securities, and may fluctuate in price based on
actual or perceived changes in a company’s financial condition and overall
market and economic conditions and perceptions. If the market prices of the
equity securities owned by the fund fall, the value of your investment in the
fund will decline.
Valuation
risk. The sales price the fund could
receive for any particular portfolio investment may differ from the fund’s
valuation of the investment, particularly for securities that trade in thin or
volatile markets or that are valued using a fair value methodology. These
differences may increase significantly and affect fund investments more broadly
during periods of market volatility. Investors who purchase or redeem fund
shares on days when the fund is holding fair-valued securities may receive fewer
or more shares or lower or higher redemption proceeds than they would have
received if the fund had not fair-valued securities or had used a different
valuation methodology. The fund’s ability to value its investments may be
impacted by technological issues and/or errors by pricing services or other
third party service providers. The valuation of the fund’s investments involves
subjective judgment, which may prove to be incorrect.
These
and other risks are discussed in more detail in the Prospectus or in the
Statement of Additional Information.
|
| |
38 |
|
Franklin
Multi-Asset Defensive Growth Fund |
Performance
The
accompanying bar chart and table provide some indication of the risks of
investing in the fund. The bar chart
shows changes in the fund’s performance from year to year for Class A
shares. The table shows the average annual total returns of each class of
the fund that has been in operation for at least one full calendar year and also
compares the fund’s performance with the average annual total returns of an
index or other benchmark. The fund also compares its
performance to the Bloomberg U.S. Aggregate Index (an index of fixed income
securities) and a composite benchmark, which is a hypothetical representation of
the performance of the fund’s major asset classes, consisting of 17% Russell
1000 Index, 7% Russell 2000 Index, 6% MSCI EAFE Index, 60% Bloomberg U.S.
Aggregate Index and 10% Bloomberg U.S. High Yield—2% Issuer Cap Index (an index
where issuer exposure is limited to 2% of the market value of the Bloomberg U.S.
Corporate High Yield Index). Performance for classes other
than those shown may vary from the performance shown to the extent the expenses
for those classes differ. The fund makes updated performance information,
including its current net asset value, available at www.franklintempleton.com/mutualfunds
(select fund and share class), or by calling the fund at
877‑6LM‑FUND/656‑3863.
The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the
future.
Sales charges are not reflected in
the accompanying bar chart, and if those charges were included, returns would be
less than those shown.
Best Quarter (06/30/2020): 9.47 Worst
Quarter (03/31/2020): (9.26)
The
year‑to‑date return as of the
most recent calendar quarter, which ended March 31, 2023, was
3.77
|
|
|
|
|
|
|
|
|
| |
Average annual total returns
(%) |
(for periods ended
December 31, 2022) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A |
|
1 year |
|
5 years |
|
10 years |
|
Since
inception |
|
Inception
date |
Return
before taxes |
|
(17.48) |
|
0.85 |
|
3.11 |
|
|
|
|
Return
after taxes on distributions |
|
(18.73) |
|
(0.57) |
|
1.73 |
|
|
|
|
Return
after taxes on distributions and sale of fund shares |
|
(9.65) |
|
0.33 |
|
2.02 |
|
|
|
|
Other
Classes (Return before taxes only) |
|
|
|
|
|
|
|
|
|
|
Class C |
|
(15.23) |
|
1.01 |
|
2.80 |
|
|
|
|
Class C1 |
|
(14.83) |
|
1.45 |
|
3.15 |
|
|
|
|
Class R |
|
(14.02) |
|
1.47 |
|
N/A |
|
2.46 |
|
06/02/2014 |
Class I |
|
(13.58) |
|
2.02 |
|
3.82 |
|
|
|
|
Bloomberg
U.S. Aggregate Index (reflects no deduction for fees, expenses or
taxes)1 |
|
(13.01) |
|
0.02 |
|
1.06 |
|
|
|
|
Russell
1000 Index (reflects no deduction for fees, expenses or taxes)2 |
|
(19.13) |
|
9.13 |
|
12.37 |
|
|
|
|
Composite
Benchmark (reflects no deduction for fees, expenses or taxes)3 |
|
(14.22) |
|
2.52 |
|
4.24 |
|
|
|
|
1 |
For
Class R shares, for the period from the class’ inception date to December
31, 2022, the average annual total return of the Bloomberg U.S. Aggregate
Index was 1.06%. |
2 |
For
Class R shares, for the period from the class’ inception date to
December 31, 2022, the average annual total return of the Russell
1000 Index was 10.17%. |
3 |
For
Class R shares, for the period from the class’ inception date to
December 31, 2022, the average annual total return of the Composite
Benchmark was
3.56%. |
Prior
to June 1, 2015, the fund followed different investment policies and
strategies.
The after‑tax returns are shown
only for Class A shares, are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after‑tax returns
depend on an investor’s tax situation and may differ from those shown, and the
after‑tax returns shown are not relevant to investors who hold their fund shares
through tax‑deferred arrangements, such as 401(k) plans or individual retirement
accounts. After‑tax returns
for classes other than Class A will vary from returns shown for
Class A. Returns after taxes on
distributions and sale of fund shares are higher than returns before taxes for
certain periods shown because they reflect the tax benefit of capital losses
realized on the redemption of fund
shares.
|
|
|
|
|
| |
Franklin Multi-Asset Defensive
Growth Fund |
|
| |
|
39 |
|
Management
Investment
manager: Legg Mason Partners Fund
Advisor, LLC (“LMPFA”)
Subadviser: Franklin Advisers, Inc. (“Franklin Advisers”)
Portfolio
managers: Primary responsibility for the
day‑to‑day management of the fund lies with the following portfolio managers. At
Franklin Advisers, all portfolios are managed on a collaborative basis using a
systematic, rules based approach.
|
|
|
| |
Portfolio
manager |
|
Title |
|
Portfolio manager
of the fund since |
|
|
|
Laura
Green, CFA |
|
Portfolio
Manager
|
|
2021 |
| |
|
Jacqueline
Kenney, CFA |
|
Portfolio
Manager
|
|
2021 |
Purchase and sale of fund
shares
You
may purchase, redeem or exchange shares of the fund each day the New York Stock
Exchange is open, at the fund’s net asset value determined after receipt of your
request in good order, subject to any applicable sales charge.
The
fund’s initial and subsequent investment minimums generally are set forth in the
accompanying table:
|
|
|
|
|
|
|
|
|
|
|
| |
Investment minimum initial/additional investment
($) |
|
|
|
|
Class A |
|
Class C1 |
|
Class C12 |
|
Class R |
|
Class I |
|
Class IS |
General |
|
1,000/50 |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/None3 |
|
N/A |
Uniform
Gifts or Transfers to Minor Accounts |
|
1,000/50 |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1 million/None3 |
|
N/A |
IRAs |
|
250/50 |
|
250/50 |
|
250/50 |
|
N/A |
|
1 million/None3,4 |
|
N/A4 |
SIMPLE
IRAs |
|
None/None |
|
None/None |
|
None/None |
|
N/A |
|
1 million/None3 |
|
N/A |
Systematic
Investment Plans |
|
25/25 |
|
25/25 |
|
25/25 |
|
N/A |
|
1 million/None3,5 |
|
N/A5 |
Clients
of Eligible Financial Intermediaries |
|
None/None |
|
N/A |
|
N/A |
|
None/None |
|
None/None6 |
|
None/None6 |
Eligible
Investment Programs |
|
None/None |
|
N/A |
|
N/A |
|
None/None |
|
None/None |
|
None/None |
Omnibus
Retirement Plans |
|
None/None |
|
None/None |
|
N/A |
|
None/None |
|
None/None |
|
None/None |
Individual
Retirement Plans except as noted |
|
None/None |
|
None/None |
|
N/A |
|
N/A |
|
1 million/None3 |
|
N/A |
Institutional
Investors |
|
1,000/50 |
|
1,000/50 |
|
1,000/50 |
|
N/A |
|
1
million/None |
|
1 million/None |
1 |
Initial
investments in Class C shares may be combined with existing
investment amounts in Class C1 shares for the purposes of satisfying
the initial investment minimums of Class C shares. Class C
shares are not available for purchase through Distributor Accounts.
|
2 |
Class
C1 shares are not available for purchase by new or existing investors
(except for certain retirement plan programs authorized by the Distributor
prior to August 1, 2012). Class C1 shares will continue to be
available for dividend reinvestment and incoming exchanges.
|
3 |
Available
to investors investing directly with the fund. |
4 |
IRA
accountholders who purchase Class I or Class IS shares through a
Service Agent acting as agent on behalf of its customers are subject to
the initial and subsequent minimums of $250/$50. If a Service Agent does
not have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
5 |
Investors
investing through a Systematic Investment Plan who purchase Class I
or Class IS shares through a Service Agent acting as agent on behalf
of its customers are subject to the initial and subsequent minimums of
$25/$25. If a Service Agent does not have this arrangement in place with
the Distributor, the initial and subsequent minimums listed in the table
apply. Please contact your Service Agent for more information.
|
6 |
Individual
investors who purchase Class I shares or Class IS shares through
a Service Agent acting as agent on behalf of its customers are subject to
the initial and subsequent minimums of $1,000/$50. If a Service Agent does
not have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
Your
Service Agent may impose higher or lower investment minimums, or may impose no
minimum investment requirement.
For
more information about how to purchase, redeem or exchange shares, and to learn
which classes of shares are available to you, you should contact your Service
Agent, or, if you hold your shares or plan to purchase shares through the fund,
you should contact the fund by phone at 877‑6LM‑FUND/656‑3863, by regular mail
at Legg Mason Funds, P.O. Box 33030, St. Petersburg, FL 33733-8030 or by
express, certified or registered mail at Legg Mason Funds, 100 Fountain Parkway,
St. Petersburg, FL 33716-1205.
|
| |
40 |
|
Franklin
Multi-Asset Defensive Growth Fund |
Tax information
The
fund’s distributions are generally taxable as ordinary income or capital gains.
Payments to
broker/dealers and other financial intermediaries
The
fund’s related companies pay Service Agents for the sale of fund shares,
shareholder services and other purposes. These payments create a conflict of
interest by influencing your Service Agent or its employees or associated
persons to recommend the fund over another investment. Ask your financial
adviser or salesperson or visit your Service Agent’s or salesperson’s website
for more information.
|
|
|
|
|
| |
Franklin Multi-Asset Defensive
Growth Fund |
|
| |
|
41 |
|
More on the funds’
investment strategies, investments and risks
Franklin Multi-Asset
Growth Fund
Important information
The
fund seeks capital appreciation.
The
fund’s investment objective may be changed by the Board of Trustees (the
“Board”) without shareholder approval and on notice to shareholders.
There
is no assurance that the fund will meet its investment objective.
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market conditions, the portfolio
managers will allocate between 70% to 100% of the fund’s assets to underlying
funds that invest in equity and equity-like strategies and between 0% to 30% of
the fund’s assets to underlying funds that invest in fixed income strategies.
The portfolio managers may, however, allocate fund assets to any underlying
funds in varying amounts in a manner consistent with the fund’s investment
objective. The fund’s allocation to each class will be measured at the time of
purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark.
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative investments (such as
commodities, real estate assets and infrastructure assets). The underlying
equity funds may employ strategies similar to those used by hedge funds, which
may have a low correlation to broad stock market movements or take both long and
short positions in equity securities. The underlying fixed income funds include
funds investing in any sector, region or style, including foreign fixed income
strategies, currency strategies, inflation-indexed securities, structured credit
and distressed debt. The underlying fixed income funds may take both long and
short positions in fixed income securities. Such funds may also seek to profit
from changes in global financial markets and take positions to take advantage of
changes in interest rates, exchange rates, liquidity and other macroeconomic
factors. The underlying fixed income funds may also invest in securities having
maturities of any length and any credit quality, including securities rated
below investment grade (commonly known as “junk bonds”). The portfolio managers
may invest the fund’s assets in underlying funds that have a limited performance
history.
When
investing in underlying funds that are mutual funds, the fund invests in classes
of shares that are offered only to institutional and other eligible investors,
such as the fund, at net asset value with no initial or contingent deferred
sales charges and with generally lower expenses than other share classes.
The
fund’s investment strategies and policies may be changed from time to time
without shareholder approval, unless specifically stated otherwise in this
Prospectus or in the Statement of Additional Information (“SAI”).
Franklin Multi-Asset
Moderate Growth Fund
Important information
The
fund seeks long-term growth of capital.
The
fund’s investment objective may be changed by the Board of Trustees (the
“Board”) without shareholder approval and on notice to shareholders.
There
is no assurance that the fund will meet its investment objective.
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market
|
| |
42 |
|
Franklin
Multi-Asset Allocation Funds |
conditions,
the portfolio managers will allocate between 55% to 85% of the fund’s assets to
underlying funds that invest in equity and equity-like strategies and between
15% to 45% of the fund’s assets to underlying funds that invest in fixed income
strategies. The portfolio managers may, however, allocate fund assets to any
underlying funds in varying amounts in a manner consistent with the fund’s
investment objective. The fund’s allocation to each class will be measured at
the time of purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark.
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative investments (such as
commodities, real estate assets and infrastructure assets). The underlying
equity funds may employ strategies similar to those used by hedge funds, which
may have a low correlation to broad stock market movements or take both long and
short positions in equity securities. The underlying fixed income funds include
funds investing in any sector, region or style, including foreign fixed income
strategies, currency strategies, inflation-indexed securities, structured credit
and distressed debt. The underlying fixed income funds may take both long and
short positions in fixed income securities. Such funds may also seek to profit
from changes in global financial markets and take positions to take advantage of
changes in interest rates, exchange rates, liquidity and other macroeconomic
factors. The underlying fixed income funds may also invest in securities having
maturities of any length and any credit quality, including securities rated
below investment grade (commonly known as “junk bonds”). The portfolio managers
may invest the fund’s assets in underlying funds that have a limited performance
history.
When
investing in underlying funds that are mutual funds, the fund invests in classes
of shares that are offered only to institutional and other eligible investors,
such as the fund, at net asset value with no initial or contingent deferred
sales charges and with generally lower expenses than other share classes.
The
fund’s investment strategies and policies may be changed from time to time
without shareholder approval, unless specifically stated otherwise in this
Prospectus or in the Statement of Additional Information (“SAI”).
Franklin Multi-Asset
Conservative Growth Fund
Important information
The
fund seeks balance of growth of capital and income.
The
fund’s investment objective may be changed by the Board of Trustees (the
“Board”) without shareholder approval and on notice to shareholders.
There
is no assurance that the fund will meet its investment objective.
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market conditions, the portfolio
managers will allocate between 35% to 65% of the fund’s assets to underlying
funds that invest in equity and equity-like strategies and between 35% to 65% of
the fund’s assets to underlying funds that invest in fixed income strategies.
The portfolio managers may, however, allocate fund assets to any underlying
funds in varying amounts in a manner consistent with the fund’s investment
objective. The fund’s allocation to each class will be measured at the time of
purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark.
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative investments (such as
commodities, real estate assets and infrastructure assets). The underlying
equity funds may employ strategies similar to those used by hedge funds, which
may have a low correlation to broad stock market movements or take both long and
short positions in equity securities. The underlying fixed income funds include
funds investing in any sector, region or style, including foreign fixed income
strategies, currency strategies, inflation-indexed securities, structured credit
and distressed debt. The fixed income underlying funds may take both long and
short positions in fixed income securities. Such funds may also seek to profit
from changes in global financial markets and take positions to take advantage of
changes in interest rates, exchange rates, liquidity and other macroeconomic
factors. The underlying fixed income funds may also invest in securities having
maturities of any length and any credit quality, including securities rated
below investment grade (commonly known as “junk bonds”). The portfolio managers
may invest the fund’s assets in underlying funds that have a limited performance
history.
When
investing in underlying funds that are mutual funds, the fund invests in classes
of shares that are offered only to institutional and other eligible investors,
such as the fund, at net asset value with no initial or contingent deferred
sales charges and with generally lower expenses than other share classes.
|
| |
Franklin Multi-Asset Allocation
Funds |
|
43 |
The
fund’s investment strategies and policies may be changed from time to time
without shareholder approval, unless specifically stated otherwise in this
Prospectus or in the Statement of Additional Information (“SAI”).
Franklin Multi-Asset
Defensive Growth Fund
Important information
The
fund seeks income as a primary objective and long-term growth of capital as a
secondary objective.
The
fund’s investment objective may be changed by the Board of Trustees (the
“Board”) without shareholder approval and on notice to shareholders.
There
is no assurance that the fund will meet its investment objective.
The
fund is a fund of funds—it invests in other mutual funds and may also invest in
exchange-traded funds (“ETFs”) (such mutual funds and ETFs collectively referred
to as “underlying funds”). The fund is managed as an asset allocation program
and allocates its assets among mutual funds managed by the manager and its
affiliates, including other Legg Mason and Franklin Templeton investment
managers. The fund may also invest in ETFs managed by the manager and its
affiliates or unaffiliated investment advisers. When selecting underlying funds
to fulfill a desired asset class exposure, the portfolio managers expect to
allocate to Legg Mason and Franklin Templeton affiliated underlying funds,
provided that appropriate products are available.
The
fund organizes its investments in underlying funds into two main asset classes:
the equity class (equity securities of all types) and the fixed income class
(fixed income securities of all types). The portfolio managers may invest across
all asset classes and strategies. Under normal market conditions, the portfolio
managers will allocate between 15% to 45% of the fund’s assets to underlying
funds that invest in equity and equity-like strategies and between 55% to 85% of
the fund’s assets to underlying funds that invest in fixed income strategies.
The portfolio managers may, however, allocate fund assets to any underlying
funds in varying amounts in a manner consistent with the fund’s investment
objective. The fund’s allocation to each class will be measured at the time of
purchase and may vary thereafter as a result of market movements.
The
portfolio managers will seek to maintain a level of risk in the fund similar to
that of the fund’s composite benchmark.
The
underlying funds have a range of investment styles and focuses. The underlying
funds may invest in foreign and emerging markets and engage in derivative
transactions. The underlying equity funds may include exposure to any market
capitalization or investment style including alternative investments (such as
commodities, real estate assets and infrastructure assets). The underlying
equity funds may employ strategies similar to those used by hedge funds, which
may have a low correlation to broad stock market movements or take both long and
short positions in equity securities. The underlying fixed income funds include
funds investing in any sector, region or style, including foreign fixed income
strategies, currency strategies, inflation-indexed securities, structured credit
and distressed debt. The underlying fixed income funds may take both long and
short positions in fixed income securities. Such funds may also seek to profit
from changes in global financial markets and take positions to take advantage of
changes in interest rates, exchange rates, liquidity and other macroeconomic
factors. The underlying fixed income funds may also invest in securities having
maturities of any length and any credit quality, including securities rated
below investment grade (commonly known as “junk bonds”). The portfolio managers
may invest the fund’s assets in underlying funds that have a limited performance
history.
When
investing in underlying funds that are mutual funds, the fund invests in classes
of shares that are offered only to institutional and other eligible investors,
such as the fund, at net asset value with no initial or contingent deferred
sales charges and with generally lower expenses than other share classes.
The
fund’s investment strategies and policies may be changed from time to time
without shareholder approval, unless specifically stated otherwise in this
Prospectus or in the Statement of Additional Information (“SAI”).
More on the investments
of the underlying funds
By
owning shares of underlying funds, each fund invests indirectly, in varying
degrees, in equity and fixed income securities of U.S. and non‑U.S. issuers. The
following summarizes the principal types of securities and instruments in which
the underlying funds may invest and techniques they may pursue in seeking to
achieve their investment objectives. References to the “fund” include the
investments and techniques used by the underlying funds, as applicable.
Equity investments
Equity
securities include exchange-traded and over‑the‑counter (“OTC”) common and
preferred stocks, warrants and rights, securities convertible into equity
securities and securities of other investment companies and of real estate
investment trusts (“REITs”).
Fixed income securities
Fixed
income securities represent obligations of corporations, governments and other
entities to repay money borrowed. Fixed income securities are commonly referred
to as “debt,” “debt obligations,” “bonds” or “notes.” The issuer of the fixed
income security usually pays a fixed, variable or floating rate of interest, and
repays the amount borrowed, usually at the maturity of the security. Some fixed
income securities, however, do not pay current interest but are sold at a
discount from their face values. Other fixed income securities may make periodic
payments of interest and/or principal. Some fixed income securities are
partially or fully secured by collateral supporting the payment of interest and
principal.
|
| |
44 |
|
Franklin
Multi-Asset Allocation Funds |
Foreign investments
Each
fund may invest in foreign securities, either directly or through depositary
receipts. A depositary receipt is a type of negotiable (transferable) financial
security that demonstrates ownership of shares of a foreign issuer and is an
alternative to directly purchasing the underlying foreign security.
Sovereign debt
Each
fund may invest in sovereign debt, including emerging market sovereign debt.
Sovereign debt securities may include:
• |
|
Fixed
income securities issued or guaranteed by governments, governmental
agencies or instrumentalities and their political subdivisions
|
• |
|
Fixed
income securities issued by government-owned, controlled or sponsored
entities |
• |
|
Interests
issued for the purpose of restructuring the investment characteristics of
instruments issued by any of the above issuers |
• |
|
Brady
Bonds, which are debt securities issued under the framework of the Brady
Plan as a means for debtor nations to restructure their outstanding
external indebtedness |
• |
|
Participations
in loans between governments and financial institutions
|
• |
|
Fixed
income securities issued by supranational entities such as the World Bank.
A supranational entity is a bank, commission or company established or
financially supported by the national governments of one or more countries
to promote reconstruction or development |
Sovereign
government and supranational debt involve many of the risks of foreign and
emerging markets investments as well as the risk of debt moratorium, repudiation
or renegotiation and the fund may be unable to enforce its rights against the
issuers.
Equity-linked notes
(ELNs)
ELNs
are securities that are valued based upon the performance of one or more equity
securities traded in a foreign market, such as a stock index, a group of stocks
or a single stock. ELNs offer investors the opportunity to participate in the
appreciation of the underlying local equity securities where the fund may not
have established local access to that market.
High yield, lower quality
securities
Each
fund may invest in debt securities rated below investment grade by a recognized
rating agency or unrated securities determined by a fund’s adviser to be of
equivalent quality. These securities are commonly referred to as “junk” bonds.
Exchange-traded funds
(ETFs)
Each
fund may invest in shares of open‑end investment management companies or unit
investment trusts that are traded on a stock exchange, called exchange-traded
funds. Typically, an index-based ETF seeks to track (positively or negatively)
the performance of an index by holding in its portfolio either the same
securities that comprise the index or a representative sample of the index.
Investing in an index-based ETF gives the fund exposure to the securities
comprising the index on which the ETF is based and the fund will gain or lose
value depending on the performance of the index. Certain ETFs in which the fund
may invest seek to track (positively or negatively) a multiple of index
performance on any given day. The performance of ETFs that are actively managed
may show greater deviation from the ETF’s benchmark due to changes in sector
allocations or other decisions by the ETF’s investment adviser.
Exchange-traded notes
(ETNs)
Each
fund may invest in ETNs, which are debt securities that combine certain aspects
of ETFs and bonds. ETNs, like ETFs, may be traded on stock exchanges and their
value depends on the performance of the underlying index and the credit rating
of the issuer. ETNs may be held to maturity, but unlike bonds there are no
periodic interest payments and principal is not protected.
Mortgage-backed and
asset-backed securities
Mortgage-backed
securities may be issued by private issuers, by U.S. government-sponsored
entities such as Fannie Mae or Freddie Mac or by agencies of the U.S.
government, such as Ginnie Mae. Mortgage-backed securities represent direct or
indirect participations in, or are collateralized by and payable from, mortgage
loans secured by real property.
Unlike
mortgage-backed securities issued or guaranteed by agencies of the U.S.
government or government-sponsored entities, mortgage-backed securities issued
by private issuers do not have a government or government-sponsored entity
guarantee (but may have other credit enhancement), and may, and frequently do,
have less favorable collateral, credit risk or other underwriting
characteristics.
Residential
mortgage-backed securities (“RMBS”) are comprised of a pool of mortgage loans
created by banks and other financial institutions. Commercial mortgage-backed
securities (“CMBS”) are a type of mortgage-backed security backed by commercial
mortgages rather than residential real estate.
Asset-backed
securities represent participations in, or are secured by and payable from,
assets such as installment sales or loan contracts, leases, credit card
receivables and other categories of receivables.
Collateralized
mortgage obligations (“CMOs”) are debt obligations collateralized by mortgage
loans or mortgage pass-through securities. CMOs are a type of mortgage-backed
security. Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or
Freddie Mac Certificates, but may also be
|
| |
Franklin Multi-Asset Allocation
Funds |
|
45 |
collateralized
by whole loans or private pass-throughs (referred to as “Mortgage Assets”).
Payments of principal and of interest on the Mortgage Assets, and any
reinvestment income thereon, provide the issuer with income to pay debt service
on the CMOs. In a CMO, a series of bonds or certificates is issued in multiple
classes. Each class of CMOs, often referred to as a “tranche,” is issued at a
specified fixed or floating coupon rate and has a stated maturity or final
distribution date. Principal prepayments on the Mortgage Assets may cause the
CMOs to be retired substantially earlier than their stated maturities or final
distribution dates. Interest is paid or accrues on all classes of the CMOs on a
monthly, quarterly or semi-annual basis. The principal of and interest on the
Mortgage Assets may be allocated among the several classes of a series of a CMO
in innumerable ways. As market conditions change, and particularly during
periods of rapid or unanticipated changes in market interest rates, the
attractiveness of the CMO classes and the ability of the structure to provide
the anticipated investment characteristics may be significantly reduced. Such
changes can result in volatility in the market value, and in some instances
reduced liquidity, of the CMO class.
Collateralized
debt obligations (“CDOs”) are a type of asset-backed security. CDOs include
collateralized bond obligations (“CBOs”), collateralized loan obligations
(“CLOs”) and other similarly structured securities. A CBO is a trust or other
special purpose entity which is typically backed by a diversified pool of fixed
income securities (which may include high risk, below investment grade
securities). A CLO is a trust or other special purpose entity that is typically
collateralized by a pool of loans, which may also include, among others,
domestic and non‑U.S. senior secured loans, senior unsecured loans, and
subordinated corporate loans, including loans that may be rated below investment
grade or equivalent unrated loans. Like CMOs, CDOs generally issue separate
series or “tranches” which vary with respect to risk and yield. These tranches
can experience substantial losses due to actual defaults, increased sensitivity
to defaults due to collateral default and disappearance of subordinate tranches,
market anticipation of defaults, as well as investor aversion to CDO securities
as a class. Interest on certain tranches of a CDO may be paid in kind (paid in
the form of obligations of the same type rather than cash), which involves
continued exposure to default risk with respect to such payments.
Inflation-indexed,
inflation-protected and related securities
Inflation-indexed
and inflation-protected securities are fixed income securities that are
structured to provide protection against inflation and whose principal value or
coupon (interest payment) is periodically adjusted according to the rate of
inflation. If the index measuring inflation falls, the principal value or coupon
of these securities will be adjusted downward. Consequently, the interest
payable on these securities will be reduced. Also, if the principal value of
these securities is adjusted according to the rate of inflation, the adjusted
principal value repaid at maturity may be less than the original principal.
Inflation-protected
securities denominated in the U.S. dollar include U.S. Treasury Inflation
Protected Securities (“U.S. TIPS”), as well as other bonds issued by U.S. and
non‑U.S. government agencies and instrumentalities or corporations and
derivatives related to these securities. U.S. TIPS are inflation-protected
securities issued by the U.S. Department of the Treasury the principal amounts
of which are adjusted daily based upon changes in the rate of inflation (as
currently represented by the non‑seasonally adjusted Consumer Price Index for
All Urban Consumers, calculated with a three-month lag). U.S. TIPS pay interest
semiannually, equal to a fixed percentage of the inflation-adjusted principal
amount. The interest rate on these bonds is fixed at issuance, but over the life
of the bond, this interest may be paid on an increasing or decreasing principal
amount that has been adjusted for inflation. The current market value of U.S.
TIPS is not guaranteed and will fluctuate.
The
value of inflation-indexed and inflation-protected securities held by a fund
fluctuates in response to changes in real interest rates. In addition, if
nominal interest rates increase at a faster rate than inflation, causing real
interest rates to rise, it will lead to a decrease in the value of
inflation-indexed or inflation-protected securities.
Each
fund may invest in other fixed-income securities that, in the belief of the
fund’s subadvisers, will provide protection against inflation, including
floating rate and other short duration securities. Floating rate securities bear
interest at rates that are not fixed but vary with changes in specified market
rates or indices, such as the prime rate, and at specified intervals.
Repurchase agreements
In
a repurchase agreement, a fund purchases securities from a counterparty, upon
the agreement of the counterparty to repurchase the securities from the fund at
a later date, and at a specified price, which is typically higher than the
purchase price paid by the fund. The securities purchased serve as the fund’s
collateral for the obligation of the counterparty to repurchase the securities.
If the counterparty does not repurchase the securities, the fund is entitled to
sell the securities, but the fund may not be able to sell them for the price at
which they were purchased, thus causing a loss. Additionally, if the
counterparty becomes insolvent, there is some risk that the fund will not have a
right to the securities, or the immediate right to sell the securities.
Reverse repurchase
agreements and other borrowings
Each
fund may borrow money as a means of raising money to satisfy redemption requests
or for other temporary or emergency purposes by entering into reverse repurchase
agreements or other borrowing transactions. In a reverse repurchase agreement, a
fund sells securities to a counterparty, in return for cash, and the fund agrees
to repurchase the securities at a later date and for a higher price,
representing the cost to the fund for the money borrowed. Although the funds do
not intend to use these transactions for leveraging purposes, reverse repurchase
agreements and other borrowing transactions may make the value of an investment
in a fund more volatile and increase the fund’s overall investment exposure.
|
| |
46 |
|
Franklin
Multi-Asset Allocation Funds |
Cash management
Each
fund may hold cash pending investment, may invest in money market instruments
and may enter into repurchase agreements and reverse repurchase agreements
(which have characteristics like borrowings) for cash management purposes. The
fund may invest in money market funds, which may or may not be affiliated with
the fund’s manager or the subadvisers. The amount of assets a fund may hold for
cash management purposes will depend on market conditions and the need to meet
expected redemption requests.
Defensive investing
Each
fund and the underlying funds may depart from their principal investment
strategies in response to adverse market, economic or political conditions by
taking temporary defensive positions, including by investing in any type of
money market instruments and short-term debt securities or holding cash without
regard to any percentage limitations. If a significant amount of a fund’s
assets is used for defensive investing purposes, the fund will be less likely to
achieve its investment objective. Although the subadviser and advisers of the
underlying funds have the ability to take defensive positions, they may choose
not to do so for a variety of reasons, even during volatile market conditions.
Derivatives
Each
fund may, but need not, use derivative contracts. Derivatives are financial
instruments whose value depends upon, or is derived from, the value of something
else, such as one or more underlying investments, indexes or currencies.
Derivatives may be used by a fund for any of the following purposes:
• |
|
As
a hedging technique in an attempt to manage risk in a fund’s portfolio
|
• |
|
As
a substitute for buying or selling securities |
• |
|
As
a means of changing investment characteristics of a fund’s portfolio
|
• |
|
As
a cash flow management technique |
• |
|
As
a means of attempting to enhance returns |
• |
|
As
a means of providing additional exposure to types of investments or market
factors |
A
fund from time to time may sell protection on debt securities by entering into
credit default swaps. In these transactions, a fund is generally required to pay
the par (or other agreed-upon) value of a referenced debt security to the
counterparty in the event of a default on or downgrade of the debt security
and/or a similar credit event. In return, the fund receives from the
counterparty a periodic stream of payments over the term of the contract. If no
default occurs, the fund keeps the stream of payments and has no payment
obligations. As the seller, the fund would effectively add leverage to its
portfolio because, in addition to its net assets, the fund would be subject to
loss on the par (or other agreed-upon) value it had undertaken to pay. Credit
default swaps may also be structured based on an index or the debt of a basket
of issuers, rather than a single issuer, and may be customized with respect to
the default event that triggers purchase or other factors (for example, a
particular number of defaults within a basket, or defaults by a particular
combination of issuers within the basket, may trigger a payment obligation).
A
fund may buy credit default swaps to hedge against the risk of default of debt
securities held in its portfolio or for other reasons. As the buyer of a
credit default swap, the fund would make the stream of payments described in the
preceding paragraph to the seller of the credit default swap and would expect to
receive from the seller a payment in the event of a default on the underlying
debt security or other specified event.
Using
derivatives, especially for non‑hedging purposes, may involve greater risks to a
fund than investing directly in securities, particularly as these instruments
may be very complex and may not behave in the manner anticipated by a fund.
Certain derivative transactions may have a leveraging effect on a fund.
Use
of derivatives or similar instruments may have different tax consequences for a
fund than an investment in the underlying asset, and those differences may
affect the amount, timing and character of income distributed to shareholders.
Instead
of, and/or in addition to, investing directly in particular securities, a fund
may use derivatives and other synthetic instruments that are intended to provide
economic exposure to securities, issuers or other measures of market or economic
value. A fund may use one or more types of these instruments.
Rule
18f‑4 under the Investment Company Act of 1940, as amended, which became
effective August 19, 2022, governs the use of derivative investments and
certain financing transactions (e.g. reverse repurchase agreements) by
registered investment companies. Among other things, Rule 18f‑4 requires funds
that invest in derivative instruments beyond a specified limited amount to apply
a value‑at‑risk based limit to their use of certain derivative instruments and
financing transactions and to adopt and implement a derivatives risk management
program. A fund that uses derivative instruments in a limited amount is not
subject to the full requirements of Rule 18f‑4. Compliance with Rule 18f‑4 by
the fund could, among other things, make derivatives more costly, limit their
availability or utility, or otherwise adversely affect their performance. Rule
18f‑4 may limit the fund’s ability to use derivatives as part of its investment
strategy.
A
fund’s subadvisers may choose not to make use of derivatives.
|
| |
Franklin Multi-Asset Allocation
Funds |
|
47 |
Commodity-linked
instruments
Each
fund may invest in a combination of commodity-linked instruments that provide
exposure to the investment returns of the commodities markets, without investing
directly in physical commodities. These instruments include MLPs, structured
notes, bonds, debentures and derivatives, including swaps, forwards, futures and
options. Commodities are assets that have tangible properties, such as oil,
metals and agricultural products.
Real estate investment
trusts (REITs)
REITs
are pooled investment vehicles that invest primarily in income producing real
estate or real estate related loans or interests. REITs are generally classified
as equity REITs, mortgage REITs or a combination of equity and mortgage REITs.
Unlike corporations, entities that qualify as REITs for U.S. federal income tax
purposes are not taxed on income distributed to their shareholders, provided
they comply with the applicable requirements of the Internal Revenue Code of
1986, as amended (the “Code”). Each fund will indirectly bear its proportionate
share of any management and other expenses that may be charged by the REITs in
which it invests, in addition to the expenses paid by a fund.
Master limited
partnerships (MLPs)
MLPs
are limited partnerships whose interests (limited partnership units) are traded
on securities exchanges like shares of corporate stock. Currently, most MLPs
operate in the energy, natural resources or real estate sectors. MLPs are
generally treated as partnerships for U.S. federal income tax purposes. A U.S.
entity that is treated as a partnership for federal income tax purposes is not
itself subject to federal income tax. Instead, the entity’s partners are
required to report on their federal income tax returns their shares of each item
of the entity’s income, gain, loss and deduction for each taxable year of the
entity ending with or within the partner’s taxable year. A cash distribution
from a partnership is not itself taxable to the extent it does not exceed the
distributee partner’s basis in its partnership interest, and is treated as
capital gain to the extent any cash distributed to a partner exceeds the
partner’s basis in the partnership. If a fund invests in the equity securities
of an MLP, the fund will be a partner in that MLP. Thus, the fund will be
required to take into account the fund’s allocable share of the income, gains,
losses, deductions, expenses and credits recognized by each such MLP, regardless
of whether the MLP distributes cash to the fund. The cash distributions that a
fund may receive with respect to its investments in equity securities of MLPs
may exceed the net taxable income allocated to the fund from such MLPs because
of tax deductions such as depreciation, amortization and depletion that will be
allocated to the fund from the MLPs.
Depreciation
or other cost recovery deductions passed through to a fund from investments in
MLPs in a given year will generally reduce the fund’s taxable income, but those
deductions may be recaptured in the fund’s income in one or more subsequent
years. When recognized and distributed, recapture income will generally be
taxable to shareholders at the time of the distribution at ordinary income tax
rates, even though those shareholders might not have held shares in the fund at
the time the deductions were taken by the fund, and even though those
shareholders will not have corresponding economic gain on their shares at the
time of the recapture. In order to distribute recapture income or to fund
redemption requests, a fund may need to liquidate investments, which may lead to
additional recapture income.
Certain
limited partnership units have restrictions that limit or restrict the
acquisition of such units by regulated investment companies such as a
fund. Such limits or restrictions, if enforced, could limit the
availability of such units to a fund or result in a forced sale at a below
market price and/or loss of rights to receive MLP distributions.
Maturity and duration
Each
fund may invest in securities of any maturity. The maturity of a fixed income
security is a measure of the time remaining until the final payment on the
security is due.
Effective
duration seeks to measure the expected sensitivity of market price to changes in
interest rates, taking into account the anticipated effects of particular
features of a security (for example, some bonds can be prepaid by the issuer).
The assumptions that are made about a security’s features and options when
calculating effective duration may prove to be incorrect. As a result, investors
should be aware that effective duration is not an exact measurement and may not
reliably predict a security’s price sensitivity to changes in yield or interest
rates.
Generally,
the longer a fund’s effective duration, the more sensitive it will be to changes
in interest rates. For example, if interest rates rise by 1%, a fund with a
two‑year effective duration would expect the value of its portfolio to decrease
by 2% and a fund with a ten‑year effective duration would expect the value of
its portfolio to decrease by 10%, all other factors being equal.
The
maturity of a security may be significantly longer than its effective duration.
A security’s maturity may be more relevant than its effective duration in
determining the security’s sensitivity to other factors such as changes in
credit quality or in the difference in yield between U.S. Treasuries and certain
other types of securities.
Structured notes
Structured
notes are specially-designed derivative debt instruments. The terms of the
instrument may be “structured” by the purchaser and the issuer of the note.
Payments of principal or interest on these notes may be linked to the value of
an index (such as a currency or securities index), an individual security or a
commodity. The value of these notes will normally rise or fall in response to
the changes in the performance of the underlying security, index or commodity.
|
| |
48 |
|
Franklin
Multi-Asset Allocation Funds |
Short sales
A
short sale is a transaction in which a fund sells securities it does not own in
anticipation of a decline in the market price of the securities.
Securities lending
Consistent
with applicable regulatory requirements, certain underlying funds may lend
portfolio securities to brokers, dealers and other financial organizations
meeting capital and other credit requirements in order to earn income. The loans
are required to be continuously secured by cash or liquid securities equal to no
less than the market value, determined daily, of the securities loaned.
Portfolio turnover
Each
fund may engage in active and frequent trading to achieve its investment
objective, resulting in high portfolio turnover.
Portfolio rebalancing
Underlying
funds may experience relatively large redemptions or investments due to a
rebalancing of the fund’s investments. The impact of rebalancing is likely to be
greater when a fund owns, redeems or invests in a substantial portion of an
underlying fund. The fund’s subadviser will seek to cooperate with the advisers
of the underlying funds to minimize any adverse impact on the underlying funds.
Non‑publicly traded and
illiquid securities
Each
fund may invest in non‑publicly traded and illiquid securities, including
securities subject to legal or contractual restrictions on resale or lacking
readily available markets.
Other investments
Each
fund reserves the right in certain circumstances to invest directly in the types
of investments held by the underlying funds, including equity securities and
fixed income securities. These investments may include securities of non‑U.S.
issuers.
Each
fund may also enter into futures contracts or related options on futures
contracts that are traded on a domestic or foreign exchange or in the OTC
market, and may also engage in transactions in options on securities, which may
include the writing of covered put options and covered call options, the
purchase of put and call options and the entry into closing transactions.
To
the extent a fund invests directly in these instruments, it is subject to the
same risks as an underlying fund when it invests in these instruments.
Each
fund may also use other strategies and invest (through the underlying funds) in
other investments that are described, along with their risks, in the SAI.
However, a fund might not use all of the strategies and techniques or invest
(through the underlying funds) in all of the types of securities described in
this Prospectus or in the SAI.
Percentage and other
limitations
Each
fund’s compliance with its investment limitations and requirements described in
this Prospectus is usually determined at the time of investment. If such a
percentage limitation is complied with at the time of an investment, any
subsequent change resulting from a change in asset values or characteristics
will not constitute a violation of that limitation.
Selection process
The
portfolio managers periodically adjust the allocation of each fund’s assets
among different Legg Mason and Franklin Templeton affiliated mutual funds and
ETFs depending upon the portfolio managers’ outlook for the equity and bond
markets in general, particular sectors of such markets and the performance
outlook for the underlying funds.
The
portfolio managers have the option to allocate each fund’s assets among
different Legg Mason and Franklin Templeton affiliated mutual funds and ETFs and
ETFs that are managed by unaffiliated investment advisers. Affiliated funds in
which a fund may invest include Franklin Templeton funds, Legg Mason funds,
BrandywineGLOBAL funds, Clarion Partners funds, ClearBridge Investments funds,
Martin Currie funds, Royce & Associates funds and Western Asset funds.
The portfolio managers may allocate each fund’s assets to underlying Legg Mason
and Franklin Templeton affiliated mutual funds and ETFs that have a limited
performance history and to underlying ETFs that are managed by unaffiliated
investment advisers that have a limited performance history. In assessing the
equity and bond markets, the portfolio managers consider a broad range of market
and economic trends and quantitative factors.
More on risks of
investing in the funds
Following
is more information on the principal risks summarized above and additional risks
of investing in the funds.
Each
fund invests in underlying funds and is exposed to the risks to which the
underlying funds are exposed, as well as the risk that the underlying funds will
not perform as expected. Unless otherwise noted, the principal risks summarized
below include both direct and indirect risks, and references in this section to
each fund include the risks of investing in the underlying funds.
Below
are descriptions of the main factors that may play a role in shaping the fund’s
overall risk profile. The descriptions appear in alphabetical order, not in
order of importance.
|
| |
Franklin Multi-Asset Allocation
Funds |
|
49 |
Affiliated funds
risk. Each fund’s manager, subadviser or
an affiliate serves as manager or subadviser of certain Legg Mason and Franklin
Templeton affiliated underlying funds (“Affiliated Funds”). As a result, the
manager and the subadviser have financial incentives to allocate each fund’s
assets to Affiliated Funds that pay fees to the manager, the subadviser or an
affiliate. For example, the manager and the subadviser have an incentive to
select Affiliated Funds that will result in the greatest revenue to the manager
and its affiliates, even if that results in increased expenses for the fund.
Similarly, the manager and the subadviser have an incentive to delay or decide
against the sale of interests held by a fund in Affiliated Funds. This gives
rise to a conflict of interest.
Asset class
variation risk. An underlying fund that
invests principally in securities constituting one or more asset classes (i.e.,
equity or fixed income) may vary the percentage of its assets in these asset
classes (subject to any applicable regulatory requirements).
Borrowing
risk. Certain borrowings may create an
opportunity for increased return but, at the same time, will create additional
risks. For example, if the fund invests the proceeds of the borrowing, it will
have a leveraging effect on its portfolio, the value of the fund will be more
volatile and all other risks tend to be compounded. This is because leverage
generally magnifies the effect of any increase or decrease in the value of the
fund’s underlying assets or creates investment risk with respect to a larger
pool of assets than the fund would otherwise have. The fund may be required to
liquidate fund securities at a time when it would be disadvantageous to do so in
order to make payments with respect to any borrowing. Interest on any borrowing
will be a fund expense and will reduce the value of a fund’s shares.
Cash management and
defensive investing risk. The value of
the investments held by each fund for cash management or defensive investing
purposes can fluctuate. Like other fixed income securities, they are subject to
risk, including market, interest rate and credit risk. If a fund holds cash
uninvested, the cash will be subject to the credit risk of the depository
institution holding the cash and the fund will not earn income on the cash. If a
significant amount of a fund’s assets is used for cash management or defensive
investing purposes, the fund will be less likely to achieve its investment
objective. Defensive investing may not work as intended and the value of an
investment in a fund may still decline.
Commodities
risk. Commodity prices can be extremely
volatile and are affected by many factors. Exposure to commodities can cause the
value of the fund’s shares to decline or fluctuate in a rapid and unpredictable
manner. Investments in commodity-linked instruments may subject the fund to
greater volatility than investments in traditional securities or the commodity,
commodities or commodity index to which they relate. The value of commodities
and commodity-linked instruments may be affected, for example, by changes in
overall market movements, real or perceived inflationary trends, commodity index
volatility, prolonged or intense speculation by investors, changes in interest
rates or factors affecting a particular industry or commodity, such as drought,
floods, other weather phenomena, livestock disease, embargoes, tariffs, economic
sanctions, armed conflicts and international economic, political and regulatory
developments. The prices of commodities can also fluctuate widely due to supply
and demand disruptions in major producing or consuming regions. The fund’s
ability to gain exposure to commodities using derivatives or other means may be
limited by tax considerations. If a fund has taken a long or short position in a
commodity using futures contracts or other derivatives, it might be required to
take or make delivery of the underlying commodity under undesirable
circumstances. This would cause the fund to incur a number of costs. To the
extent the fund focuses its investments in a particular commodity, the fund will
be more susceptible to risks associated with the particular commodity. No active
trading market may exist for certain commodities investments.
Convertible
securities risk. Convertible securities
are subject to stock market and other risks associated with equity securities,
as well as the credit, interest rate and other risks associated with fixed
income securities. Credit risk is the risk that the issuer or obligor will not
make timely payments of principal or interest or that its credit may be
downgraded or perceived to be less creditworthy. Interest rate risk is the risk
that the value of a fixed income security will fall when interest rates rise. A
rise in rates tends to have a greater impact on the prices of longer term or
duration securities. A general rise in interest rates may cause investors to
move out of fixed income securities on a large scale, which could adversely
affect the price and liquidity of fixed income securities. As the market price
of the equity security underlying a convertible security falls, the convertible
security tends to trade on the basis of its yield and other fixed income
characteristics. As the market price of the equity security underlying a
convertible security rises, the convertible security tends to trade on the basis
of its equity conversion features.
Counterparty
risk. An underlying fund may enter into
transactions with counterparties that become unable or unwilling to fulfill
their contractual obligations. There can be no assurance that a counterparty
will not default on its obligations to an underlying fund. In the event of a
counterparty default, the underlying fund may be hindered or delayed in
exercising rights against a counterparty and may experience significant losses.
To the extent that the underlying fund enters into multiple transactions with a
single or small set of counterparties, the underlying fund will be subject to
increased counterparty risk.
Credit
risk. The value of your investment
in a fund could decline if the issuer of a security held by the fund or another
obligor for that security (such as a party offering credit enhancement) fails to
pay, otherwise defaults, is perceived to be less creditworthy, becomes insolvent
or files for bankruptcy. The value of your investment in a fund could also
decline if the credit rating of a security held by the fund is downgraded or the
credit quality or value of any assets underlying the security declines. Changes
in actual or perceived creditworthiness may occur quickly. If the fund enters
into financial contracts (such as certain derivatives, repurchase agreements,
reverse repurchase agreements, and when-issued, delayed delivery and forward
commitment transactions), the fund will be subject to the credit risk presented
by the counterparty. In addition, the fund may incur expenses in an effort
to protect the fund’s interests or to enforce its rights against an issuer,
guarantor or counterparty or may be hindered or delayed in exercising those
rights. Credit risk is broadly gauged by the credit ratings of the
securities in which the fund invests. However, ratings are only the opinions of
the companies issuing them and are not guarantees as to quality. Securities
rated in the lowest category of investment grade (Baa/BBB) may possess certain
speculative characteristics. Credit risk is typically greatest for the
fund’s high yield debt securities (“junk” bonds), which are rated below the
Baa/BBB categories or unrated securities of comparable quality.
|
| |
50 |
|
Franklin
Multi-Asset Allocation Funds |
Each
fund may invest in subordinated securities, which are securities that rank below
other securities with respect to claims on an issuer’s assets, or securities
which represent interests in pools of such subordinated securities. A fund is
more likely to suffer a credit loss on subordinated securities than on
non‑subordinated securities of the same issuer. If there is a default,
bankruptcy or liquidation of the issuer, most subordinated securities are paid
only if sufficient assets remain after payment of the issuer’s non‑subordinated
securities. In addition, any recovery of interest or principal may take more
time. As a result, even a perceived decline in creditworthiness of the issuer is
likely to have a greater adverse impact on subordinated securities.
Cybersecurity
risk. Cybersecurity incidents, whether
intentionally caused by third parties or otherwise, may allow an unauthorized
party to gain access to fund assets, fund or customer data (including private
shareholder information) or proprietary information, cause a fund, the manager,
the subadvisers and/or their service providers (including, but not limited to,
fund accountants, custodians, sub‑custodians, transfer agents and financial
intermediaries) to suffer data breaches, data corruption or loss of operational
functionality, or prevent fund investors from purchasing, redeeming or
exchanging shares, receiving distributions or receiving timely information
regarding a fund or their investment in the fund. A fund, the manager, and the
subadvisers have limited ability to prevent or mitigate cybersecurity incidents
affecting third party service providers, and such third party service providers
may have limited indemnification obligations to the fund, the manager, and/or
the subadvisers. Cybersecurity incidents may result in financial losses to a
fund and its shareholders, and substantial costs may be incurred in order to
prevent or mitigate any future cybersecurity incidents. Issuers of securities in
which a fund invests are also subject to cybersecurity risks, and the value of
these securities could decline if the issuers experience cybersecurity
incidents.
Because
technology is frequently changing, new ways to carry out cyber attacks are
always developing. Therefore, there is a chance that some risks have not been
identified or prepared for, or that an attack may not be detected, which puts
limitations on a fund’s ability to plan for or respond to a cyber attack. Like
other funds and business enterprises, a fund, the manager, the subadvisers and
their service providers are subject to the risk of cyber incidents occurring
from time to time.
Derivatives
risk. Derivatives involve special risks
and costs and may result in losses to a fund, even when used for hedging
purposes. Using derivatives can increase losses and reduce opportunities for
gains, such as when market prices, interest rates, currencies, or the
derivatives themselves behave in a way not anticipated by a fund, especially in
abnormal market conditions. Using derivatives also can have a leveraging effect
which may increase investment losses and increase a fund’s volatility, which is
the degree to which the fund’s share price may fluctuate within a short time
period. Certain derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. The other parties to certain derivatives
transactions present the same types of credit risk as issuers of fixed income
securities.
The
fund’s counterparty to a derivative transaction may not honor its obligations in
respect to the transaction. In certain cases, the fund may be hindered or
delayed in exercising remedies against or closing out derivative instruments
with a counterparty, which may result in additional losses.
Derivatives
also tend to involve greater illiquidity risk and they may be difficult to
value. A fund may be unable to terminate or sell its derivative positions. In
fact, many over‑the‑counter derivatives will not have liquidity except through
the counterparty to the instrument. Derivatives are generally subject to the
risks applicable to the assets, rates, indices or other indicators underlying
the derivative. The value of a derivative may fluctuate more than the underlying
assets, rates, indices or other indicators to which it relates. Use of
derivatives or similar instruments may have different tax consequences for a
fund than an investment in the underlying asset, and those differences may
affect the amount, timing and character of income distributed to shareholders.
Each fund’s use of derivatives may also increase the amount of taxes payable by
shareholders. The U.S. government and foreign governments have adopted and
implemented or are in the process of adopting and implementing regulations
governing derivatives markets, including mandatory clearing of certain
derivatives, margin, and reporting requirements. The ultimate impact of the
regulations remains unclear. Additional regulation of derivatives may make
derivatives more costly, limit their availability or utility, otherwise
adversely affect their performance or disrupt markets. Each fund may be exposed
to additional risks as a result of the additional regulations. The extent and
impact of the additional regulations are not yet fully known and may not be for
some time.
Swap
agreements tend to shift a fund’s investment exposure from one type of
investment to another. For example, a fund may enter into interest rate swaps,
which involve the exchange of interest payments by the fund with another party,
such as an exchange of floating rate payments for fixed interest rate payments
with respect to a notional amount of principal. If an interest rate swap
intended to be used as a hedge negates a favorable interest rate movement, the
investment performance of the underlying fund would be less than what it would
have been if the underlying fund had not entered into the interest rate swap.
Credit
default swap contracts involve heightened risks and may result in losses to the
fund. Credit default swaps may be illiquid and difficult to value. If the fund
buys a credit default swap, it will be subject to the risk that the credit
default swap may expire worthless, as the credit default swap would only
generate income in the event of a default on the underlying debt security or
other specified event. As a buyer, the fund would also be subject to credit risk
relating to the seller’s payment of its obligations in the event of a default
(or similar event). If the fund sells a credit default swap, it will be exposed
to the credit risk of the issuer of the obligation to which the credit default
swap relates. As a seller, the fund would also be subject to leverage risk,
because it would be liable for the full notional amount of the swap in the event
of a default (or similar event).
The
absence of a central exchange or market for over‑the‑counter swap transactions
may lead, in some instances, to difficulties in trading and valuation,
especially in the event of market disruptions. Relatively recent
legislation requires certain swaps to be executed through a centralized exchange
or regulated facility and be cleared through a regulated clearinghouse. Although
this clearing mechanism is generally expected to reduce counterparty credit
risk, it may disrupt or limit the swap market and may not result in swaps being
easier to trade or value. As swaps become more
|
| |
Franklin Multi-Asset Allocation
Funds |
|
51 |
standardized,
each fund may not be able to enter into swaps that meet its investment needs.
Each fund also may not be able to find a clearinghouse willing to accept a swap
for clearing. In a cleared swap, a central clearing organization will be the
counterparty to the transaction. Each fund will assume the risk that the
clearinghouse and/or the broker through which it holds its position may be
unable to perform its obligations.
Each
fund will be required to maintain its positions with a clearing organization
through one or more clearing brokers. The clearing organization will require the
fund to post margin and the broker may require the fund to post additional
margin to secure the fund’s obligations. The amount of margin required may
change from time to time. In addition, cleared transactions may be more
expensive to maintain than over‑the‑counter transactions and may require the
fund to deposit larger amounts of margin. The fund may not be able to recover
margin amounts if the broker has financial difficulties. Also, the broker may
require the fund to terminate a derivatives position under certain
circumstances. This may cause a fund to lose money.
Futures
are standardized, exchange-traded contracts that obligate a purchaser to buy,
and a seller to sell, a specific amount of an asset on a specified future date
at a specified price. The primary risks associated with the use of futures
contracts are: (a) the imperfect correlation between the change in market
value of the instruments held by the fund and the price of the futures contract;
(b) the possible lack of a liquid secondary market for a futures contract
and the resulting inability to close a futures contract when desired;
(c) losses caused by unanticipated market movements, which are potentially
unlimited; (d) the subadviser’s inability to predict correctly the
direction of securities prices, interest rates, currency exchange rates and
other economic factors; and (e) the possibility that the counterparty will
default in the performance of its obligations.
An
option is an agreement that, for a premium payment or fee, gives the option
holder (the purchaser) the right but not the obligation to buy (a “call option”)
or sell (a “put option”) the underlying asset (or settle for cash in an amount
based on an underlying asset, rate, or index) at a specified price (the
“exercise price”) during a period of time or on a specified date. The fund may
write a call or put option where it (i) owns or is short the underlying
security in the case of a call or put option, respectively (sometimes referred
to as a “covered option”), or (ii) does not own or is not short such
security (sometimes referred to as a “naked option”). When the fund purchases an
option, it may lose the total premium paid for it if the price of the underlying
security or other assets decreased, remained the same or failed to increase to a
level at or beyond the exercise price (in the case of a call option) or
increased, remained the same or failed to decrease to a level at or below the
exercise price (in the case of a put option). If a put or call option purchased
by the fund were permitted to expire without being sold or exercised, its
premium would represent a loss to the fund. To the extent that the fund writes
or sells an option, in particular a naked option, if the decline or increase in
the underlying asset is significantly below or above the exercise price of the
written option, the fund could experience a substantial loss.
Risks
associated with the use of derivatives are magnified to the extent that an
increased portion of a fund’s assets is committed to derivatives in general or
is invested in just one or a few types of derivatives.
Dividend-paying
stock risk. There is no guarantee that
the issuers of the stocks held by a fund will pay dividends in the future or
that, if dividends are paid, they will remain at their current levels or
increase over time. A fund’s emphasis on dividend-paying stocks could cause the
fund to underperform similar funds that invest without consideration of a
company’s track record of paying dividends or ability to pay dividends in the
future. Dividend-paying stocks may not participate in a broad market advance to
the same degree as other stocks, and a sharp rise in interest rates or economic
downturn or other market or company-specific developments could cause a company
to reduce or eliminate its dividend.
Equity-linked notes
(“ELNs”) risk. ELNs are generally
subject to the same risks as the foreign equity securities or the basket of
foreign securities to which they are linked. If the linked securities decline in
value, the ELN may return a lower amount at maturity.
ELNs
involve further risks associated with purchases and sales of notes, including
the exchange rate fluctuations and a decline in the credit quality of the note’s
issuer.
ELNs
are frequently secured by collateral. If an issuer defaults, a fund would look
to any underlying collateral to recover its losses, but there can be no
assurance that the collateral will be sufficient to cover a fund’s losses.
Ratings of issuers of ELNs refer only to the issuers’ creditworthiness and the
related collateral. They provide no indication of the potential risks of the
linked securities.
Exchange-traded
notes (“ETNs”) risk. ETNs are not
structured as investment companies and thus are not regulated under the
Investment Company Act of 1940. ETNs may be traded on stock exchanges and
generally track specified market indexes, and their value depends on the
performance of the underlying index and the credit rating of the issuer.
However, there may be substantial differences between the price at which the ETN
is traded and the value of the underlying index. ETNs are not collateralized by
securities in underlying indexes. The issuer of an ETN is responsible for
payments of principal and interest under the ETN. ETNs may be held to maturity,
but there are no periodic interest payments and principal is not protected. Each
fund is exposed to the risk that an ETN’s issuer will not have sufficient assets
to make interest or principal payments. Unlike ETFs, ETNs are not investments in
a dedicated pool of the issuer’s assets and operate more like unsecured debt.
Each fund could lose some or the entire amount invested in an ETN.
Extension
risk. When interest rates rise,
repayments of fixed income securities may occur more slowly than anticipated,
extending the effective duration of these fixed income securities at below
market interest rates and causing their market prices to decline more than they
would have declined due to the rise in interest rates alone. This may cause the
fund’s share price to be more volatile.
Foreign investments
and emerging markets risk. Each fund’s
investments in securities of foreign issuers or issuers with significant
exposure to foreign markets involve additional risk as compared to investments
in U.S. securities or issuers with predominantly domestic exposure, such as less
liquid, less regulated, less transparent and more volatile markets. The markets
for some foreign securities are relatively new, and the rules and policies
relating to these markets are not fully developed and may change. The value of
the fund’s investments may decline because of factors
|
| |
52 |
|
Franklin
Multi-Asset Allocation Funds |
affecting
the particular issuer as well as foreign markets and issuers generally, such as
unfavorable or unsuccessful government actions, tariffs and trade disputes,
economic sanctions, reduction of government or central bank support, inadequate
accounting standards and auditing and financial recordkeeping requirements, lack
of information, political, economic, financial or social instability, terrorism,
armed conflicts and other geopolitical events. Geopolitical or other events such
as nationalization or expropriation could even cause the loss of the fund’s
entire investment in one or more countries.
The
Public Company Accounting Oversight Board, which regulates auditors of U.S.
public companies, is unable to inspect audit work papers in certain foreign or
emerging market countries. Investors in foreign countries often have limited
rights and few practical remedies to pursue shareholder claims, including class
actions or fraud claims, and the ability of the Securities and Exchange
Commission, the U.S. Department of Justice and other authorities to bring and
enforce actions against foreign issuers or foreign persons is limited. Foreign
investments may also be adversely affected by U.S. government or international
interventions, restrictions or economic sanctions, which could negatively affect
the value of an investment or result in the fund selling an investment at a
disadvantageous time. To the extent the fund focuses its investments in a single
country or only a few countries in a particular geographic region, economic,
political, regulatory or other conditions affecting such country or region may
have a greater impact on fund performance relative to a more geographically
diversified fund.
The
value of a fund’s foreign investments may also be affected by foreign tax laws,
special U.S. tax considerations and restrictions on receiving the investment
proceeds from a foreign country. Dividends or interest on, or proceeds from the
sale or disposition of, foreign securities may be subject to non‑U.S.
withholding or other taxes.
It
may be difficult for the fund to pursue claims against a foreign issuer or other
parties in the courts of a foreign country. Some securities issued by non‑U.S.
governments or their subdivisions, agencies and instrumentalities may not be
backed by the full faith and credit of such governments. Even where a security
is backed by the full faith and credit of a government, it may be difficult for
the fund to pursue its rights against the government. In the past, some non‑U.S.
governments have defaulted on principal and interest payments.
If
the fund buys securities denominated in a foreign currency, receives income in
foreign currencies, or holds foreign currencies from time to time, the value of
the fund’s assets, as measured in U.S. dollars, can be affected unfavorably by
changes in exchange rates relative to the U.S. dollar or other foreign
currencies. Currency exchange rates can be volatile, and are affected by factors
such as general economic and political conditions, the actions of the U.S. and
foreign governments or central banks, the imposition of currency controls and
speculation. A fund may be unable or may choose not to hedge its foreign
currency exposure.
In
certain foreign markets, settlement and clearance of trades may experience
delays in payment for or delivery of securities not typically associated with
settlement and clearance of U.S. investments. Settlement of trades in these
markets can take longer than in other markets and the fund may not receive its
proceeds from the sale of certain securities for an extended period (possibly
several weeks or even longer) due to, among other factors, low trading volumes
and volatile prices. The custody or holding of securities, cash and other assets
by local banks, agents and depositories in securities markets outside the United
States may entail additional risks. Governments or trade groups may compel local
agents to hold securities in designated depositories that may not be subject to
independent evaluation. Local agents are held only to the standards of care of
their local markets, and thus may be subject to limited or no government
oversight. In extreme cases, the fund’s securities may be misappropriated or the
fund may be unable to sell its securities. In general, the less developed a
country’s securities market is, the greater the likelihood of custody problems.
The
risks of foreign investments are heightened when investing in issuers in
emerging market countries. Emerging market countries tend to have economic,
political and legal systems that are less developed and are less stable than
those of more developed countries. Their economies tend to be less diversified
than those of more developed countries. They typically have fewer medical and
economic resources than more developed countries, and thus they may be less able
to control or mitigate the effects of a pandemic or a natural disaster. They are
often particularly sensitive to market movements because their market prices
tend to reflect speculative expectations. Low trading volumes may result in
a lack of liquidity and in extreme price volatility. Investors should be able to
tolerate sudden, sometimes substantial, fluctuations in the value of investments
in emerging markets. Emerging market countries may have policies that
restrict investment by foreigners or that prevent foreign investors from
withdrawing their money at will.
Fund rebalancing
risk. Underlying funds may experience
relatively large redemptions or investments due to a rebalancing of a fund’s
investments. In such event, an underlying fund may be required to sell
securities or to invest cash at a time when it is not advantageous to do so.
Rebalancing may increase brokerage and/or other transaction costs of an
underlying fund, increase each fund’s expenses or result in the underlying
fund’s becoming too small to be economically viable. Rebalancing may also
adversely affect an underlying fund’s performance and thus such fund’s
performance. The impact of rebalancing is likely to be greater when the fund
owns, redeems or invests in a substantial portion of an underlying fund.
Each
fund’s subadviser will seek to cooperate with the advisers of the underlying
funds to minimize any adverse impact on the underlying funds. Actions that may
be taken by the advisers of underlying funds in an effort to minimize any
adverse impact of rebalancing may delay the rebalancing of each fund’s
investments in the event of significant market or other events that may require
more rapid action.
Growth and value
investing risk. Growth or value
securities as a group may be out of favor and underperform the overall equity
market while the market favors other types of securities. Growth securities
typically are very sensitive to market movements because their market prices
tend to reflect future expectations. When it appears those expectations will not
be met, the prices of growth securities typically fall. Growth securities may
also be more volatile than other investments because they often do not pay
dividends. The values of growth securities tend to go down when interest rates
rise because the rise in interest rates reduces the current value of future cash
flows. The value approach to investing involves the risk that
|
| |
Franklin Multi-Asset Allocation
Funds |
|
53 |
stocks
may remain undervalued, undervaluation may become more severe, or perceived
undervaluation may actually represent intrinsic value. A value stock may not
increase in price as anticipated by the subadviser if other investors fail to
recognize the company’s value and bid up the price or the factors that the
subadviser believes will increase the price of the security do not occur or do
not have the anticipated effect.
Hedge fund
strategies risk. The fund, through the
underlying funds, may employ investment strategies that involve greater risks
than the strategies used by typical mutual funds, including increased use of
short sales, leverage and derivative transactions and hedging strategies. The
fund may invest in underlying funds employing proprietary investment strategies
that are not fully disclosed, which may involve risks that are not anticipated.
Hedge fund strategies may be narrowly focused on a particular market, security
type or activity, and thus are exposed to greater risk of loss if the investment
thesis underlying the strategy does not occur as anticipated. Hedge fund
strategies that are intended to reduce the fund’s volatility may fail to do so
effectively. The use of leverage by a hedge fund strategy (e.g., through
options) will magnify any losses incurred by the strategy.
Hedging
risk. The decision as to whether
and to what extent the fund will engage in hedging transactions to hedge against
risks such as currency risk, credit risk, and interest rate risk will depend on
a number of factors, including prevailing market conditions, the composition of
the fund, the availability of suitable transactions and regulatory restrictions.
The fund may not engage in hedging transactions even when it would have been
advantageous to do so. Hedges are sometimes subject to imperfect matching
between the derivative and the underlying asset or index, so the fund could lose
money on both a hedging transaction and the transaction being hedged;
accordingly, there can be no assurance that hedging strategies, if used, will be
successful. Hedging transactions involve costs and may reduce gains or result in
losses.
High yield (“junk”)
bonds risk. High yield bonds, often
called “junk” bonds, have a higher risk of issuer default or may be in default
and are considered speculative. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of such securities to make principal and interest payments
than is the case for higher grade debt securities. The value of lower-quality
debt securities often fluctuates in response to company, political, or economic
developments and can decline significantly over short as well as long periods of
time or during periods of general or regional economic difficulty. High yield
bonds may also have lower liquidity as compared to higher-rated securities,
which means a fund may have difficulty selling them at times, and it may have to
apply a greater degree of judgment in establishing a price for purposes of
valuing fund shares. High yield bonds generally are issued by less creditworthy
issuers. Issuers of high yield bonds may have a larger amount of outstanding
debt relative to their assets than issuers of investment grade bonds. In the
event of an issuer’s bankruptcy, claims of other creditors may have priority
over the claims of high yield bond holders, leaving few or no assets available
to repay high yield bond holders. The fund may incur expenses to the extent
necessary to seek recovery upon default or to negotiate new terms with a
defaulting issuer. High yield bonds frequently have redemption features
that permit an issuer to repurchase the security from the fund before it
matures. If the issuer redeems high yield bonds, a fund may have to invest the
proceeds in bonds with lower yields and may lose income.
Illiquidity
risk. Illiquidity risk exists when
particular investments are or may become impossible or difficult to sell and
some assets that the fund wants to invest in may be impossible or difficult to
purchase. Although most of the fund’s investments must be liquid at the time of
investment, investments may be or become illiquid after purchase by the fund,
particularly during periods of market turmoil or due to adverse changes in the
conditions of a particular issuer. Markets may become illiquid when, for
instance, there are few, if any, interested buyers or sellers or when dealers
are unwilling or unable to make a market for certain securities. As a general
matter, dealers have been less willing to make markets for fixed income
securities. Federal banking regulations may also cause certain dealers to reduce
their inventories of certain securities, which may further decrease the ability
to buy or sell such securities. When the fund holds illiquid investments, the
portfolio may be harder to value, especially in changing markets, and if the
fund is forced to sell these investments to meet redemption requests or for
other cash needs, or to try to limit losses, the fund may be forced to sell at a
loss or may not be able to sell at all. The fund may experience heavy
redemptions that could cause the fund to liquidate its assets at inopportune
times or at a loss or depressed value, which could cause the value of your
investment to decline. In addition, when there is illiquidity in the market for
certain investments, the fund, due to limitations on illiquid investments, may
be unable to achieve its desired level of exposure to a certain sector, industry
or issuer. The liquidity of certain assets, particularly of privately-issued and
non‑investment grade mortgage-backed securities and asset-backed securities, may
be difficult to ascertain and may change over time. Transactions in less liquid
or illiquid securities may entail transaction costs that are higher than those
for transactions in liquid securities. Further, such securities, once sold, may
not settle for an extended period (for example, several weeks or even longer).
The fund will not receive its sales proceeds until that time, which may
constrain the fund’s ability to meet its obligations (including obligations to
redeeming shareholders).
Industry or sector
focus risk. A fund may be susceptible to
an increased risk of loss, including losses due to events that adversely affect
a fund’s investments more than the market as a whole, to the extent that the
fund may, from time to time, have greater exposure to the securities of a
particular issuer or issuers within the same industry or sector.
Investing in a fund
of funds risk. Your cost of investing in
the fund, as a fund of funds, may be higher than the cost of investing in a
mutual fund that only invests directly in individual equity and fixed income
securities. Because the fund will indirectly bear its pro rata share of the fees
and expenses incurred by an underlying fund in which it invests, including
advisory fees, an increase in fees and expenses of an underlying fund or a
reallocation of the fund’s investments to underlying funds with higher fees or
expenses will increase the fund’s total expenses. These expenses are in addition
to other expenses that the fund bears directly in connection with its own
operations. An underlying fund may change its investment objective or policies
without the fund’s approval, which could cause the fund to withdraw its
investment from such underlying fund at a time that is unfavorable to the fund.
In addition, one underlying fund may buy the same securities that another
underlying fund sells. Therefore, the fund would indirectly bear the costs of
these trades without accomplishing any investment purpose. If underlying funds
invest in the same or similar securities, the fund may indirectly bear
concentration risk with respect to those investments. If the fund invests in an
underlying fund that has recently
|
| |
54 |
|
Franklin
Multi-Asset Allocation Funds |
commenced
operations, there can be no assurance that such underlying fund will grow to or
maintain an economically viable size, in which case the underlying fund’s board
or adviser may determine to liquidate the underlying fund or the fund may
indirectly bear higher expenses.
Investing in ETFs
risk. An investment in an ETF is subject
to the risks of investing in other investment companies. Investing in securities
issued by ETFs also involves risks similar to those of investing directly in the
securities and other assets held by the ETF. Unlike shares of typical mutual
funds, shares of ETFs are generally traded on an exchange throughout a trading
day and bought and sold based on market values and not at net asset value. For
this reason, shares could trade at either a premium or discount to net asset
value, which may be substantial during periods of market stress. An ETF will
generally gain or lose value consistent with the performance of its portfolio
securities. The fund will pay brokerage commissions in connection with the
purchase and sale of shares of ETFs. In addition, the fund will indirectly bear
its pro rata share of the fees and expenses incurred by an ETF in which it
invests, including advisory fees. These expenses are in addition to expenses
that the fund bears directly in connection with its own operations. Certain ETFs
are also subject to portfolio management risk. An index-based ETF may not
replicate exactly the performance of the benchmark index it seeks to track for a
number of reasons, including transaction costs incurred by the ETF, the
temporary unavailability of certain index securities in the secondary market or
discrepancies between the ETF and the index with respect to the weighting of
securities or the number of securities held. Investments in ETFs are subject to
the risk that the listing exchange may halt trading of an ETF’s shares, in which
case the fund would be unable to sell its ETF shares unless and until trading is
resumed.
Issuer
risk. The market price of a security can
go up or down more than the market as a whole and can perform differently from
the value of the market as a whole, due to factors specifically relating to the
security’s issuer, such as disappointing earnings reports by the issuer,
unsuccessful products or services, loss of major customers, changes in
management, corporate actions, negative perception in the marketplace, or major
litigation or changes in government regulations affecting the issuer or the
competitive environment. An individual security may also be affected by factors
relating to the industry or sector of the issuer. Each fund may experience a
substantial or complete loss on an individual security. A change in financial
condition or other event affecting a single issuer may adversely impact the
industry or sector of the issuer or securities markets as a whole.
Large capitalization
company risk. Large capitalization
companies may fall out of favor with investors based on market and economic
conditions. In addition, larger companies may not be able to attain the high
growth rates of successful smaller companies and may be less capable of
responding quickly to competitive challenges and industry changes. As a result,
each fund’s value may not rise as much as, or may fall more than, the value of
funds that focus on companies with smaller market capitalizations.
Leverage
risk. The use of traditional borrowing
(including to meet redemption requests), reverse repurchase agreements and
derivatives creates leverage (i.e., a fund’s investment exposures exceed its net
asset value). Leverage increases a fund’s losses when the value of its
investments (including derivatives) declines. Because many derivatives have a
leverage component (i.e., a notional value in excess of the assets needed to
establish or maintain the derivative position), adverse changes in the value or
level of the underlying asset, rate, or index may result in a loss substantially
greater than the amount invested in the derivative itself. In the case of swaps,
the risk of loss generally is related to a notional principal amount, even if
the parties have not made any initial investment. Some derivatives, similar to
short sales, have the potential for unlimited loss, regardless of the size of
the initial investment. Similarly, a fund’s portfolio will be leveraged and can
incur losses if the value of a fund’s assets declines between the time a
redemption request is received or deemed to be received by a fund (which in some
cases may be the business day prior to actual receipt of the transaction
activity by a fund) and the time at which a fund liquidates assets to meet
redemption requests. In the case of redemptions representing a significant
portion of a fund’s portfolio, the leverage effects described above can be
significant and could expose a fund and non‑redeeming shareholders to material
losses.
A
fund may manage some of its derivative positions by offsetting derivative
positions against one another or against other assets. To the extent offsetting
positions do not behave in relation to one another as expected, a fund may
perform as if it were leveraged.
To
the extent a fund purchases securities on margin or sells securities short, it
will create leverage in the fund’s portfolio. To the extent the market prices of
securities pledged to counterparties to secure a fund’s margin account or short
sale decline, a fund may be required to deposit additional funds with the
counterparty to avoid having the pledged securities liquidated to compensate for
the decline.
New
derivatives regulations require a fund, to the extent it uses derivatives beyond
a specified limited amount, to, among other things, comply with certain overall
limits on leverage. These regulations may limit the ability of a fund to pursue
its investment strategies and may not be effective to mitigate a fund’s risk of
loss from derivatives.
LIBOR
risk. A fund’s investments, payment
obligations, and financing terms may be based on floating rates, such as the
London Interbank Offered Rate, or “LIBOR,” which is the offered rate for
short-term Eurodollar deposits between major international banks. In 2017, the
U.K. Financial Conduct Authority (“FCA”) announced its intention to cease
compelling banks to provide the quotations needed to sustain LIBOR after 2021.
ICE Benchmark Administration, the administrator of LIBOR, ceased publication of
most LIBOR settings on a representative basis at the end of 2021 and is expected
to cease publication of the remaining U.S. dollar LIBOR settings on a
representative basis after June 30, 2023. In addition, global regulators
have announced that, with limited exceptions, no new LIBOR-based contracts
should be entered into after 2021. Actions by regulators have resulted in the
establishment of alternative reference rates to LIBOR in most major currencies.
In March 2022, the U.S. federal government enacted legislation to establish a
process for replacing LIBOR in certain existing contracts that do not already
provide for the use of a clearly defined or practicable replacement benchmark
rate as described in the legislation. Generally speaking, for contracts that do
not contain a fallback provision as described in the legislation, a benchmark
replacement recommended by the Federal Reserve Board will effectively
automatically replace the USD LIBOR benchmark in the contract after
June 30, 2023. The recommended benchmark replacement will be based on the
Secured Overnight Financing Rate
|
| |
Franklin Multi-Asset Allocation
Funds |
|
55 |
(SOFR)
published by the Federal Reserve Bank of New York, including certain spread
adjustments and benchmark replacement conforming changes. Various financial
industry groups have been planning for the transition away from LIBOR, but there
remains uncertainty regarding the impact of the transition from LIBOR on a
fund’s transactions and the financial markets generally. The transition away
from LIBOR may lead to increased volatility and illiquidity in markets that rely
on LIBOR and may adversely affect a fund’s performance. The transition may also
result in a reduction in the value of certain LIBOR-based investments held by
the fund or reduce the effectiveness of related transactions such as hedges. Any
such effects of the transition away from LIBOR, as well as other unforeseen
effects, could result in losses for the fund. Since the usefulness of LIBOR as a
benchmark could also deteriorate during the transition period, effects could
occur at any time.
Long/short strategy
risk. While the fund may invest in long
positions and short positions, there is the risk that the investments will not
perform as expected. The fund’s long/short strategy may result in greater losses
than if the fund held only long positions, as losses on one type of position
could more than offset gains on the other or a fund could lose money on both
positions. The fund’s short positions could result in unlimited losses if the
fund does not own the asset sold short and it is unable to close out of the
short sale or short position.
Market events
risk. The market values of securities or
other assets will fluctuate, sometimes sharply and unpredictably, due to changes
in general market conditions, overall economic trends or events, governmental
actions or intervention, actions taken by the U.S. Federal Reserve or foreign
central banks, market disruptions caused by trade disputes or other factors,
political developments, armed conflicts, economic sanctions and countermeasures
in response to sanctions, major cybersecurity events, investor sentiment, the
global and domestic effects of a pandemic, and other factors that may or may not
be related to the issuer of the security or other asset. Economies and financial
markets throughout the world are increasingly interconnected. Economic,
financial or political events, trading and tariff arrangements, public health
events, terrorism, wars, natural disasters and other circumstances in one
country or region could have profound impacts on global economies or markets. As
a result, whether or not a fund invests in securities of issuers located in or
with significant exposure to the countries or markets directly affected, the
value and liquidity of a fund’s investments may be negatively affected.
Following Russia’s invasion of Ukraine, Russian stocks lost all, or nearly all,
of their market value. Other securities or markets could be similarly affected
by past or future geopolitical or other events or conditions. Furthermore,
events involving limited liquidity, defaults, non‑performance or other adverse
developments that affect one industry, such as the financial services industry,
or concerns or rumors about any events of these kinds, have in the past and may
in the future lead to market-wide liquidity problems, may spread to other
industries, and could negatively affect the value and liquidity of a fund’s
investments.
The
fallout from the COVID‑19 pandemic and its subsequent variants, and the
long-term impact on economies, markets, industries and individual issuers, are
not known. Some sectors of the economy and individual issuers have experienced
or may experience particularly large losses. Periods of extreme volatility in
the financial markets; reduced liquidity of many instruments; and disruptions to
supply chains, consumer demand and employee availability, may continue for some
time. The U.S. government and the Federal Reserve, as well as certain foreign
governments and central banks, have taken extraordinary actions to support local
and global economies and the financial markets in response to the COVID‑19
pandemic. This and other government intervention into the economy and financial
markets may not work as intended, and have resulted in a large expansion of
government deficits and debt, the long term consequences of which are not known.
In addition, the COVID‑19 pandemic, and measures taken to mitigate its effects,
could result in disruptions to the services provided to a fund by its service
providers.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Recently, inflation and interest rates have increased and may rise further.
These circumstances could adversely affect the value and liquidity of a fund’s
investments, impair a fund’s ability to satisfy redemption requests, and
negatively impact a fund’s performance.
The
United States and other countries are periodically involved in disputes over
trade and other matters, which may result in tariffs, investment restrictions
and adverse impacts on affected companies and securities. For example, the
United States has imposed tariffs and other trade barriers on Chinese exports,
has restricted sales of certain categories of goods to China, and has
established barriers to investments in China. Trade disputes may adversely
affect the economies of the United States and its trading partners, as well as
companies directly or indirectly affected and financial markets generally. The
United States government has prohibited U.S. persons from investing in Chinese
companies designated as related to the Chinese military. These and possible
future restrictions could limit a fund’s opportunities for investment and
require the sale of securities at a loss or make them illiquid. Moreover, the
Chinese government is involved in a longstanding dispute with Taiwan that has
included threats of invasion. If the political climate between the United States
and China does not improve or continues to deteriorate, if China were to attempt
unification of Taiwan by force, or if other geopolitical conflicts develop or
get worse, economies, markets and individual securities may be severely affected
both regionally and globally, and the value of a fund’s assets may go down.
Market and interest
rate risk. The market prices of the
fund’s securities may go up or down, sometimes rapidly or unpredictably. If the
market prices of the fund’s securities fall, the value of your investment in the
fund will decline. The market price of a security may fall due to general market
conditions, such as real or perceived adverse economic or political conditions,
tariffs and trade disruptions, inflation, substantial economic downturn or
recession, changes in interest or currency rates, lack of liquidity in the bond
markets or adverse investor sentiment. Changes in market conditions will not
typically have the same impact on all types of securities. The market price of a
security may also fall due to specific conditions that affect a particular
sector of the securities market or a particular issuer. Your fund shares at any
point in time may be worth less than what you invested, even after taking into
account the reinvestment of fund dividends and distributions.
The
market prices of securities may fluctuate significantly when interest rates
change. When interest rates rise, the value of fixed income securities, and
therefore the value of your investment in the fund, generally goes down.
Generally, the longer the maturity or duration of a fixed income security,
|
| |
56 |
|
Franklin
Multi-Asset Allocation Funds |
the
greater the impact of a rise in interest rates on the security’s market price.
However, calculations of duration and maturity may be based on estimates and may
not reliably predict a security’s price sensitivity to changes in interest
rates. Recently, there have been inflationary price movements. As such, fixed
income securities markets may experience heightened levels of interest rate
volatility and liquidity risk. Recently, the U.S. Federal Reserve has been
raising interest rates from historically low levels. It may continue to raise
interest rates. Any additional interest rate increases in the future could cause
the value of the fund’s holdings to decrease. Moreover, securities can change in
value in response to other factors, such as credit risk. In addition, different
interest rate measures (such as short- and long-term interest rates and U.S. and
non‑U.S. interest rates), or interest rates on different types of securities or
securities of different issuers, may not necessarily change in the same amount
or in the same direction. When interest rates go down, the fund’s yield will
decline. Also, when interest rates decline, investments made by the fund may pay
a lower interest rate, which would reduce the income received by the fund.
MLP
risk. An investment in MLP units
involves certain risks which differ from an investment in the securities of a
corporation. Holders of MLP units are limited partners in a limited partnership
and typically have more limited voting and other rights than stockholders of a
corporation. Additionally, conflicts of interest may exist between common unit
holders and the general partner of an MLP; for example, a conflict may arise as
a result of incentive distribution payments. The amount of cash that any MLP has
available to pay its unit holders in the form of distributions/dividends depends
on the amount of cash flow generated from such company’s operations. Cash flow
from operations will vary from quarter to quarter and is largely dependent on
factors affecting the MLP’s operations and factors affecting the energy, natural
resources or real estate sectors in general. Investing in MLPs involves certain
risks related to investing in the underlying assets of the MLPs. MLPs may be
adversely affected by fluctuations in the prices of commodities and may be
impacted by the levels of supply and demand for commodities. The performance of
MLPs operating in the real estate sector may be linked to the performance of the
real estate markets, including the risk of falling property values and declining
rents, and from changes in interest rates or inflation. Much of the benefit a
fund derives from its investment in equity securities of MLPs is a result of
MLPs generally being treated as partnerships for U.S. federal income tax
purposes. A change in current tax law, or a change in the business of a given
MLP, could result in an MLP being treated as a corporation for U.S. federal
income tax purposes and subject to corporate-level tax on its income, and could
reduce the amount of cash available for distribution by the MLP to its unit
holders, such as the fund.
Model
risk. Investment models may not
adequately take into account certain factors and may result in the fund having a
lower return than if the fund were managed using another model or investment
strategy. In addition, investment models used by the adviser to evaluate
securities or securities markets are based on certain assumptions concerning the
interplay of market factors. The markets or the prices of individual securities
may be affected by factors not foreseen in developing the models. When a model
or data used in managing the fund contains an error, or is incorrect or
incomplete, any investment decision made in reliance on the model or data may
not produce the desired results and the fund may realize losses.
Non‑diversification
risk. Certain underlying funds are
classified as “non‑diversified,” which means that they may invest a larger
percentage of their assets in a smaller number of issuers than a diversified
fund. To the extent an underlying fund invests its assets in a smaller number of
issuers, the fund will be more susceptible to negative events affecting those
issuers than a diversified fund.
Operational
risk. Your ability to transact with
a fund or the valuation of your investment may be negatively impacted because of
the operational risks arising from factors such as processing errors and human
errors, inadequate or failed internal or external processes, failures in systems
and technology (including those due to cybersecurity incidents), changes in
personnel, and errors caused by third party service providers or trading
counterparties. It is not possible to identify all of the operational risks that
may affect a fund or to develop processes and controls that eliminate or
mitigate the occurrence of such failures. A fund and its shareholders could be
negatively impacted as a result.
Portfolio management
risk. The value of your investment may
decrease if the judgment of a fund’s adviser about the attractiveness, value of,
or market trends affecting, a particular security, industry, sector or region,
or about market movements, is incorrect or does not produce the desired results,
or if there are imperfections, errors or limitations in the models, tools and
data used by the portfolio managers. In addition, the fund’s investment
strategies or policies may change from time to time. Those changes may not lead
to the results intended by the portfolio managers and could have an adverse
effect on the value or performance of each fund.
Portfolio turnover
risk. Active and frequent trading will
increase a shareholder’s tax liability and the fund’s transaction costs, which
could detract from fund performance.
Prepayment or call
risk. Many fixed income securities give
the issuer the option to repay or call the security prior to its maturity date.
Issuers often exercise this right when interest rates fall. Accordingly, if the
fund holds a fixed income security subject to prepayment or call risk, it may
not benefit fully from the increase in value that other fixed income securities
generally experience when interest rates fall. Upon prepayment of the
security, the fund would also be forced to reinvest the proceeds at then current
yields, which would be lower than the yield of the security that was paid off.
In addition, if a fund purchases a fixed income security at a premium (at a
price that exceeds its stated par or principal value), the fund may lose the
amount of the premium paid in the event of prepayment. Prepayment further tends
to reduce the yield to maturity and the average life of the security.
REITs
risk. Investments in REITs expose a fund
to risks similar to investing directly in real estate. The value of these
underlying investments may be affected by changes in the value of the underlying
real estate, the quality of the property management, the creditworthiness of the
issuers of the investments, demand for rental properties, and changes in
property taxes, interest rates and the real estate regulatory environment.
Investments in REITs are also affected by general economic conditions. REITs are
also subject to heavy cash flow dependency on the property interests they hold,
defaults by borrowers, poor performance by the REIT’s manager and
self-liquidation. REITs usually charge management fees, which may result in
layering the fees paid by the fund. REITs may be leveraged, which increases
risk. In addition, REITs could possibly fail to (i) qualify for favorable
tax
|
| |
Franklin Multi-Asset Allocation
Funds |
|
57 |
treatment
under applicable tax law, or (ii) maintain their exemptions from
registration under the Investment Company Act of 1940, as amended. The above
factors may also adversely affect a borrower’s or a lessee’s ability to meet its
obligations to the REIT. In the event of a default by a borrower or lessee, the
REIT may experience delays in enforcing its rights as a mortgagee or lessor and
may incur substantial costs associated with protecting its investments.
Repurchase
agreements risk. Repurchase agreements
could involve certain risks in the event of default or insolvency of the seller,
including losses and possible delays or restrictions upon the fund’s ability to
dispose of the underlying securities. To the extent that, in the meantime, the
value of the securities that the fund has purchased has decreased, the fund
could experience a loss.
Risk of increase in
expenses. Your actual costs of investing
in a fund may be higher than the expenses shown in “Annual fund operating
expenses” for a variety of reasons. For example, expenses may be higher if a
fund’s average net assets decrease, as a result of redemptions or otherwise, or
if a fee limitation is changed or terminated. Net assets are more likely to
decrease and fund expense ratios are more likely to increase when markets are
volatile.
Risks relating to
inflation-indexed securities. The value
of inflation-indexed fixed income securities generally fluctuates in response to
changes in real interest rates, which are in turn tied to the relationship
between nominal interest rates and the rate of inflation. Therefore, if
inflation were to rise at a faster rate than nominal interest rates, real
interest rates might decline, leading to an increase in value of
inflation-indexed securities. In contrast, if nominal interest rates increase at
a faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed securities. The principal value of
inflation-indexed securities declines in periods of deflation, and holders of
such securities may experience a loss. Although the holders of U.S. TIPS
receive no less than the par value of the security at maturity, if a fund
purchases U.S. TIPS in the secondary market whose principal values have been
adjusted upward due to inflation since issuance, it may experience a loss if
there is a subsequent period of deflation. If inflation is lower than expected
during the period a fund holds an inflation-indexed security, the fund may earn
less on the security than on a conventional bond.
Any
increase in principal value caused by an increase in the index the
inflation-indexed securities are tied to is taxable in the year the increase
occurs, even though a fund will not receive cash representing the increase at
that time. As a result, a fund could be required at times to liquidate other
investments, including when it is not advantageous to do so, in order to satisfy
the distribution requirements applicable to regulated investment companies under
the Internal Revenue Code of 1986, as amended. See “Taxes” in the SAI.
If
real interest rates rise (i.e., if interest rates rise for reasons other than
inflation, for example, due to changes in currency exchange rates), the value of
inflation-indexed securities held by a fund will decline. Moreover, because the
principal amount of inflation-indexed securities would be adjusted downward
during a period of deflation, a fund will be subject to deflation risk with
respect to its investments in these securities. Inflation-indexed securities are
tied to indices that are calculated based on rates of inflation for prior
periods. There can be no assurance that such indices will accurately measure the
actual rate of inflation in the prices of goods and services.
Securities lending
risk. Lending securities involves the
risk of delay in receiving or the failure to receive additional collateral and
the risk of delay in recovering or the failure to recover securities when the
loan is called should the borrower fail financially. A fund could also lose
money if its short-term investment of the cash collateral declines in value over
the period of the loan.
Short sales
risk. If the price of the security sold
short increases between the time of the short sale and the time a fund replaces
the borrowed security, the fund will realize a loss, which may be substantial. A
fund that engages in a short sale or short position may lose more money than the
actual cost of the short sale or short position and its potential losses may be
unlimited if the fund does not own the security sold short or the reference
instrument and it is unable to close out of the short sale or short position.
Small and
mid‑capitalization company risk. Each
fund will be exposed to additional risks as a result of its investments in the
securities of small and mid‑capitalization companies. Small and
mid‑capitalization companies may fall out of favor with investors; may have
limited product lines, operating histories, markets or financial resources; or
may be dependent upon a limited management group. The prices of securities of
small and mid‑capitalization companies generally are more volatile than those of
large capitalization companies and are more likely to be adversely affected than
large capitalization companies by changes in earnings results and investor
expectations or poor economic or market conditions, including those experienced
during a recession. Securities of small and mid‑capitalization companies may
underperform large capitalization companies, may be harder to sell at times and
at prices the portfolio managers believe appropriate and may have greater
potential for losses.
Sovereign debt
risk. Sovereign government and
supranational debt involve many of the risks of foreign and emerging markets
investments as well as the risk of debt moratorium, repudiation or
renegotiation, and a fund may be unable to enforce its rights against the
issuers. Sovereign debt risk is increased for emerging market issuers.
Stock market and
equity securities risk. The stock
markets are volatile and the market prices of a fund’s equity securities may
decline generally. Equity securities may include warrants, rights,
exchange-traded and over‑the‑counter common stocks, preferred stock, depositary
receipts, trust certificates, limited partnership interests and shares of other
investment companies, including exchange-traded funds and real estate investment
trusts. Equity securities may have greater price volatility than other asset
classes, such as fixed income securities, and may fluctuate in price based on
actual or perceived changes in a company’s financial condition and overall
market and economic conditions and perceptions. If the market prices of the
equity securities owned by a fund fall, the value of your investment in the fund
will decline.
|
| |
58 |
|
Franklin
Multi-Asset Allocation Funds |
Undervalued
securities risk. Each underlying fund
may invest in securities that its adviser believes are undervalued. These
investments involve a high degree of financial risk and can result in
substantial losses. Returns generated from an underlying fund’s investments may
not adequately compensate for the business and financial risks assumed. An
underlying fund may make certain speculative investments in securities which its
adviser believes to be undervalued. An underlying fund may be required to hold
such securities for a substantial period of time before realizing their
anticipated value. However, there can be no assurance that the securities
purchased are in fact undervalued. In addition, such securities may remain
undervalued or the undervaluations may become more severe.
Valuation
risk. Many factors may influence
the price at which a fund could sell any particular portfolio investment. The
sales price may well differ—higher or lower—from a fund’s last valuation, and
such differences could be significant, particularly for illiquid securities and
securities that trade in relatively thin markets and/or markets that experience
extreme volatility. If market conditions make it difficult to value some
investments, a fund may value these investments using more subjective methods,
such as fair value methodologies. These differences may increase significantly
and affect fund investments more broadly during periods of market volatility.
Investors who purchase or redeem fund shares on days when the fund is holding
fair-valued securities may receive fewer or more shares, or lower or higher
redemption proceeds, than they would have received if the fund had not
fair-valued securities or had used a different valuation methodology. The value
of non‑U.S. securities, certain fixed income securities and currencies, as
applicable, may be materially affected by events after the close of the markets
in which they are traded, but before the fund determines its net asset
value. A fund’s ability to value its investments may also be impacted by
technological issues and/or errors by pricing services or other third party
service providers. The valuation of a fund’s investments involves subjective
judgment, which may prove to be incorrect.
Volatility
risk. The value of the securities or
other assets in a fund’s portfolio may fluctuate, sometimes rapidly and
unpredictably. The value of a security or other asset may fluctuate due to
factors affecting markets generally or particular industries. The value of a
security may also be more volatile than the market as a whole. This volatility
may affect the fund’s net asset value. Although the advisers of certain
underlying funds employ models that were created to invest in stocks that
exhibit low volatility characteristics, there is no guarantee that these models
and strategies will be successful. Securities or other assets in the fund’s
portfolio may be subject to price volatility and the prices may not be any less
volatile than the market as a whole and could be more volatile. Events or
financial circumstances affecting individual securities or sectors may increase
the volatility of the fund.
Portfolio holdings
A
description of each fund’s policies and procedures with respect to the
disclosure of its portfolio holdings is available in the SAI. Each fund posts
its complete portfolio holdings at www.franklintempleton.com/mutualfunds (click
on the name of the fund) on a quarterly basis. Each fund intends to post its
complete portfolio holdings 14 calendar days following the quarter‑end. Each
fund intends to post partial information concerning the fund’s portfolio
holdings (such as top 10 holdings or sector breakdowns, for example) on the
fund’s website on a monthly basis. Each fund intends to post this partial
information 10 business days following each month‑end. Such information will
remain available until the next month’s or quarter’s holdings are posted.
|
| |
Franklin Multi-Asset Allocation
Funds |
|
59 |
More on fund management
Legg
Mason Partners Fund Advisor, LLC (“LMPFA” or the “manager”) is each fund’s
investment manager. LMPFA, with offices at 280 Park Avenue, New York,
New York 10017, also serves as the investment manager of other Legg
Mason-sponsored funds. LMPFA provides administrative and certain oversight
services to the funds. As of March 31, 2023, LMPFA’s total assets
under management were approximately $190.69 billion.
Franklin
Advisers, Inc. (“Franklin Advisers” or the “subadviser”) provides the day‑to‑day
portfolio management of each fund, except for any portion of each fund’s cash
and short-term instruments that is allocated to Western Asset Management
Company, LLC (“Western Asset”). Franklin Advisers has offices at One Franklin
Parkway, San Mateo, CA 94403-1906. Franklin Advisers provides asset management
services to numerous other investment companies and accounts.
Western
Asset manages the portion of each fund’s cash and short-term instruments
allocated to it. Western Asset, established in 1971, has offices at 385 East
Colorado Boulevard, Pasadena, California 91101 and 620 Eighth Avenue, New York,
New York 10018. Western Asset acts as investment adviser to institutional
accounts, such as corporate pension plans, mutual funds and endowment funds. As
of March 31, 2023, the total assets under management of Western Asset and
its supervised affiliates were approximately $397.45 billion.
LMPFA,
Franklin Advisers and Western Asset are indirect, wholly-owned subsidiaries of
Franklin Resources, Inc. (“Franklin Resources”). Franklin Resources, whose
principal executive offices are at One Franklin Parkway, San Mateo, California
94403, is a global investment management organization operating, together with
its subsidiaries, as Franklin Templeton. As of March 31, 2023, Franklin
Templeton’s asset management operations had aggregate assets under management of
approximately $1.42 trillion.
Portfolio managers
Primary
responsibility for the day‑to‑day management of each fund lies with the
following portfolio managers. Each is responsible for the strategic oversight of
the fund’s investments. The portfolio managers focus on portfolio implementation
and are primarily responsible for ensuring that the fund complies with its
investment objective, guidelines and restrictions and Franklin Advisers’ current
investment strategies.
|
|
|
| |
| |
|
Portfolio
manager |
|
Title and recent
biography |
|
Portfolio manager
of the fund since |
Laura
Green, CFA |
|
Vice
President, Portfolio Manager for Franklin Templeton Investment
Solutions (“FTIS”). Ms. Green was formerly a member of the
Portfolio Management group at QS Investors, a quantitative multi-asset and
equity manager. QS Investors combined with Franklin Templeton Multi-Asset
Solutions in October 2020 to create FTIS. Before joining QS Investors in
2010, Ms. Green was a portfolio manager and a portfolio assistant for
Deutsche Asset Management Quantitative Strategies group . She
received her B.A. from University of Pennsylvania.
|
|
2021 |
Jacqueline
Kenney, CFA |
|
Vice
President, Portfolio Manager for Franklin Templeton Investment Solutions
(“FTIS”). Ms. Kenney was formerly a member of the Portfolio
Management group at QS Investors, a quantitative multi-asset and equity
manager. QS Investors combined with Franklin Templeton Multi-Asset
Solutions in October 2020 to create FTIS. Before joining QS Investors in
2010, Ms. Kenney was employed at Deutsche Asset Management.
Previously, she was a consultant at Bearing Point and Accenture.
Ms. Kenney received her B.A. from Colgate University and her M.B.A.
from the Ross School of Business at the University of Michigan.
|
|
2021 |
The
SAI provides information about the compensation of the portfolio managers, other
accounts managed by the portfolio managers and any fund shares held by the
portfolio managers.
Management fee
The
funds do not pay a management fee.
|
|
|
| |
60 |
|
| |
Franklin
Multi-Asset Allocation Funds |
A
discussion regarding the basis for the Board’s approval of each fund’s
management agreement and subadvisory agreements is available in each fund’s
Semi-Annual Report for the period ended July 31, 2022.
Expense limitation
The
manager has agreed to waive fees and/or reimburse operating expenses (other than
interest, brokerage, taxes, extraordinary expenses and acquired fund fees and
expenses) for each fund so that the ratio of total annual fund operating
expenses will not exceed 0.80% for Class A shares, 1.55% for Class C
shares (formerly Class R1 shares for Defensive Growth Fund), 1.25% for
Class C1 shares of Defensive Growth Fund, 0.80% for Class R shares,
0.25% for Class I shares and 0.15% for Class IS shares, subject to
recapture as described below. In addition, the ratio of total annual fund
operating expenses for Class IS shares will not exceed the ratio of total
annual fund operating expenses for Class I shares, subject to recapture as
described below. These arrangements are expected to continue until
December 31, 2024, may be terminated prior to that date by agreement of the
manager and the Board, and may be terminated at any time after that date by the
manager. These arrangements, however, may be modified by the manager to decrease
total annual fund operating expenses at any time. The manager is also permitted
to recapture amounts waived and/or reimbursed to a class during the same fiscal
year in which the manager earned the fee or incurred the expense if the class’
total annual fund operating expenses have fallen to a level below the limits
described above. In no case will the manager recapture any amount that would
result, on any particular business day of the fund, in the class’ total annual
fund operating expenses exceeding the applicable limits described above or any
other lower limit then in effect.
Additional information
Each
fund enters into contractual arrangements with various parties, including, among
others, each fund’s manager and the subadvisers, who provide services to the
funds. Shareholders are not parties to, or intended (or “third-party”)
beneficiaries of, those contractual arrangements.
This
Prospectus and the SAI provide information concerning each fund that you should
consider in determining whether to purchase shares of a fund. A fund may make
changes to this information from time to time. Neither this Prospectus nor the
SAI is intended to give rise to any contract rights or other rights in any
shareholder, other than rights conferred by federal or state securities laws.
Distribution
Franklin
Distributors, LLC (“Franklin Distributors” or the “Distributor”), an indirect,
wholly-owned broker/dealer subsidiary of Franklin Resources, serves as each
fund’s sole and exclusive distributor.
Each
fund has adopted a shareholder services and distribution plan pursuant to Rule
12b‑1 under the Investment Company Act of 1940, as amended. Under the plan, each
fund pays distribution and/or service fees based on an annualized percentage of
average daily net assets of up to 0.25% for Class A shares; up to 1.00% for
Class C shares; and up to 0.50% for Class R shares. Defensive Growth
Fund pays distribution and/or service fees based on annualized percentages of
average daily net assets of up to 0.70% for Class C1 (formerly
Class C) shares. Payments by each fund under its plan go to the
Distributor, financial intermediaries and other parties that provide services in
connection with or are otherwise involved in the distribution of its shares or
administration of plans or programs that use its shares as their funding medium,
and to reimburse certain other expenses and payments. From time to time, the
Distributor and/or financial intermediaries may agree to a reduction or waiver
of these fees. These fees are an ongoing expense and, over time, will
increase the cost of your investment and may cost you more than other types of
sales charges. Class I shares and Class IS shares are not subject to
distribution and/or service fees under the plan.
Additional payments
In
addition to payments made to intermediaries under a fund’s shareholder services
and distribution plan and other payments made by the fund for shareholder
services and/or recordkeeping, the Distributor, the manager and/or their
affiliates make payments for distribution, shareholder servicing, marketing and
promotional activities and related expenses out of their profits and other
available sources, including profits from their relationships with the funds.
These payments are not reflected as additional expenses in the fee tables
contained in this Prospectus. The recipients of these payments may include the
Distributor and affiliates of the manager, as well as Service Agents through
which investors may purchase shares of a fund, including your Service Agent. The
total amount of these payments is substantial, may be substantial to any given
recipient and may exceed the costs and expenses incurred by the recipient for
any fund-related marketing or shareholder servicing activities. The payments
described in this paragraph are often referred to as “revenue sharing payments.”
Revenue sharing arrangements are separately negotiated between the Distributor,
the manager and/or their affiliates, and the recipients of these payments.
Revenue
sharing payments create an incentive for an intermediary or its employees or
associated persons to recommend or sell shares of a fund to you. Contact your
Service Agent for details about revenue sharing payments it receives or may
receive. Additional information about revenue sharing payments is available in
the SAI. Revenue sharing payments, as well as payments by the funds under the
shareholder services and distribution plan (where applicable), or for
recordkeeping and/or shareholder services, also benefit the manager, the
Distributor and their affiliates to the extent the payments result in more
assets being invested in a fund on which fees are being charged.
Conflicts of interest
Each
fund’s manager or an affiliate serves as manager of the Legg Mason and Franklin
Templeton affiliated underlying funds (“Affiliated Funds”), and the funds invest
in Affiliated Funds for which the fund’s subadviser or an affiliate serves as
adviser or subadviser. As a result, the manager and the
|
| |
Franklin Multi-Asset Allocation
Funds |
|
61 |
subadviser
may have financial incentives that could give rise to potential conflicts of
interest. For example, the subadviser allocates each fund’s assets to Affiliated
Funds generally (rather than to unaffiliated funds), and in particular the
subadviser has incentives to allocate each fund’s assets to those Affiliated
Funds for which the fees paid to the manager or subadviser are higher than the
fees paid by other potential unaffiliated underlying funds or to other
Affiliated Funds. In addition, each fund’s Board and officers also serve in
similar positions with certain of the Affiliated Funds. Each fund believes that
the manager and the subadviser have taken steps to mitigate these concerns.
|
|
|
| |
62 |
|
| |
Franklin
Multi-Asset Allocation Funds |
Choosing a share class
The
funds offer multiple share classes. Each share class represents an investment in
the same portfolio of securities, but each has different availability (for
example, not all Service Agents offer all share classes), eligibility criteria,
expense structures and arrangements for shareholder services or distribution,
allowing you to choose the class that best meets your needs. You should read
this section carefully and speak with your Service Agent (if applicable) to
determine which share class is most appropriate for you. When choosing the
appropriate share class, you should consider the following factors:
• |
|
the
amount you plan to invest; |
• |
|
the
length of time you expect to own the shares; |
• |
|
the
total costs associated with your investment, including any sales charges
that you pay when you buy or sell fund shares and expenses that are paid
out of fund assets over time; |
• |
|
whether
you qualify for any reduction or waiver of the sales charge;
|
• |
|
the
availability of the share class; |
• |
|
the
services that will be available to you and whether you meet any
eligibility criteria; and |
• |
|
the
amount of compensation that your Service Agent will receive.
|
For
example, when choosing between Class A or Class C shares, you should
be aware that, generally speaking, the larger the size of your investment and
the longer your investment horizon, the more likely it will be that Class C
shares will not be as advantageous as Class A shares. The annual
distribution and/or service fees on Class C shares may cost you more over
the longer term than the front‑end sales charge and service fees you would pay
for larger purchases of Class A shares. If you are eligible to purchase
Class I shares, you should be aware that Class I shares are not
subject to a front‑end sales charge or distribution or service fees and
generally have lower annual expenses than Class A or Class C shares.
Generally
speaking, Class A shares have lower annual operating expenses than
Class C/Class C1 shares but not as low as Class I/Class IS shares.
Overall, Class IS shares generally have the lowest annual expenses of all
share classes.
More
information about a fund’s classes of shares is available through the fund’s
website. You’ll find detailed information, free of charge and in a clear and
prominent format, about sales charges and ways you can qualify for reduced or
waived sales charges.
The
funds’ shares are distributed by Franklin Distributors.
Share class features
summary
The
following table summarizes key features of the funds’ share classes. In
addition, you should read carefully this Prospectus, including the fee table and
the expense example at the front of this Prospectus before choosing your share
class. If you are not purchasing shares directly from a fund, you should contact
your Service Agent for help choosing a share class that may be appropriate for
you. Capitalized terms used in the table have the definition given to them in
this Prospectus.
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Minimum initial investments1 |
|
Initial sales charge |
|
Contingent deferred
sales charge |
|
Annual distribution
and/or service (12b‑1) fees |
|
Exchange privilege2 |
|
Conversion to Class A shares |
|
|
|
|
|
| |
Class A |
|
Generally,
$1,000 for all accounts except:
(i) $25
if establishing a Systematic Investment Plan;
(ii) $250
for IRAs; and
(iii) none
for certain fee‑based programs and retirement plans |
|
Up
to 5.50% (for Growth Fund, Moderate Growth Fund and Conservative Growth
Fund);
up
to 3.75% (for Defensive Growth Fund); reduced or
waived
for large purchases and certain investors. No charge for purchases of
$1 million or more ($500,000 or more for Defensive Growth
Fund) |
|
1.00%
on purchases of $1 million or more ($500,000 or more for
Defensive Growth Fund) if you
redeem
within 18 months of purchase; waived for certain investors |
|
0.25%
of average daily
net
assets |
|
Class A
shares of funds sold by the Distributor |
|
N/A |
|
|
|
|
|
| |
Class C |
|
Generally,
$1,000 for all accounts except:
(i) $25
if establishing a Systematic Investment Plan;
(ii) $250
for IRAs; and
(iii) none
for certain fee‑based programs and retirement plans |
|
None |
|
1.00%
if you redeem within 1 year of
purchase;
waived for certain investors |
|
1.00%
of average daily
net
assets |
|
Class C
shares of funds sold by the Distributor |
|
Yes;
generally converts to Class A in the month of, or the month
following, the 8 year anniversary of the Class C share purchase date
(conversion date occurs typically on a Friday in the middle of the month);
please consult |
|
| |
Franklin Multi-Asset Allocation
Funds |
|
63 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
your
Service Agent for more information |
|
|
|
|
|
| |
Class C1 |
|
• Class C1
shares are not available for purchase by new or existing investors (except
for investors previously authorized prior to the closure of such share
class)
• Class C1
shares will continue to be available for dividend reinvestment and
incoming exchanges |
|
None |
|
1.00%
if you redeem within 1 year of
purchase;
waived for certain investors |
|
0.70%
of average daily
net
assets |
|
Class C1
shares of funds sold by the Distributor
or
if a fund does not
offer
Class C1 shares, Class C shares |
|
Yes;
generally converts to Class A in the month of, or the month
following, the 8 year anniversary of the Class C1 share purchase date
(conversion date occurs typically on a Friday in the middle of the month);
please consult your Service Agent for more information |
|
|
|
|
|
| |
Class R |
|
None |
|
None |
|
None |
|
0.50%
of average daily
net
assets |
|
Class R
shares of funds sold by the Distributor* |
|
No |
|
|
|
|
|
| |
Class I |
|
• $1,000,000;
• Waived for
certain Service Agents with arrangements with the Distributor, Omnibus
Retirement Plans and certain individuals affiliated with Franklin
Templeton;
• However,
investors investing through a Service Agent acting as agent on behalf of
its customers will be subject to the following minimums:
(i) if
investing through a Systematic Investment Plan, $25;
(ii) if
an individual investor, $1,000; and
(iii) none
for certain fee‑based programs |
|
None |
|
None |
|
None |
|
Class I
shares of funds sold by the Distributor* |
|
No |
|
|
|
|
|
| |
Class IS |
|
• $1,000,000;
• Waived for
certain Service Agents with arrangements with the Distributor and Omnibus
Retirement Plans
• However,
investors investing through a Service Agent acting as agent on behalf of
its customers will be subject to the following minimums:
(i) if
investing through a Systematic Investment Plan, $25;
(ii) if
an individual investor $1,000; and
(iii) none
for certain fee‑based programs |
|
None |
|
None |
|
None |
|
Class IS
shares of funds sold by the Distributor* |
|
No |
1 Please note that the minimum
initial investment amount must be met on a per class basis. However, initial
investments in Class C shares may be combined with existing investment
amounts in Class C1 shares for the purposes of satisfying the initial
investment minimums of Class C shares. In addition, your Service Agent may
impose higher or lower investment minimums, or may impose no minimum investment
requirement.
|
|
|
| |
64 |
|
| |
Franklin
Multi-Asset Allocation Funds |
2 You or your Service Agent
may instruct the fund to exchange shares of any class for shares of the same
class of any other fund sold by the Distributor, provided that the fund shares
to be acquired in the exchange are available to new investors in such other fund
and that you are eligible to invest in such shares. For investors investing
through retirement and benefit plans or fee‑based programs, you should contact
your Service Agent that administers your plan or sponsors the fee‑based program
to request an exchange. Certain retirement plan programs with exchange features
in effect prior to November 20, 2006, as approved by the Distributor,
remain eligible for exchange from Class C shares to Class A shares in
accordance with the program terms. Please see the SAI for more details. In
addition, you may exchange shares of the fund for another share class of the
same fund if you meet the eligibility requirements of that particular class.
Please contact your Service Agent or the fund about funds available for
exchange.
* If this share class is not
available, you may be eligible to exchange into a different share class of such
fund; see “Exchanging shares — Exchangeability between funds without the same
share class” below.
Share class availability
You
may buy shares of a fund either directly from the fund or through a Service
Agent. Please note that your Service Agent may not offer all classes of shares
since each Service Agent determines which share class(es) to make available to
its clients. Your Service Agent may receive different compensation for selling
one class of shares than for selling another class, which may depend on, among
other things, the type of investor account and the practices adopted by your
Service Agent. Each class of shares, except Class IS shares, is authorized
to pay fees for recordkeeping services, account servicing, networking, or
similar services to Service Agents. As a result, operating expenses of classes
that incur new or additional recordkeeping fees may increase over time. Certain
Service Agents may impose their own investment fees and maintain their own
practices for purchasing and selling fund shares, including higher or lower
investment minimums or none at all; these practices are not described in this
Prospectus or the SAI and will depend on the policies, procedures and trading
platforms of the Service Agent. Your Service Agent may provide shareholder
services that differ from the services provided by other Service Agents.
Services provided by your Service Agent may vary by class.
Plan
sponsors, plan fiduciaries and other Service Agents may choose to impose
qualification requirements that differ from a fund’s share class eligibility
standards as stated in this Prospectus. In certain cases, this could result in
the selection of a share class with higher distribution and/or service fees than
otherwise would have been incurred. A fund is not responsible for, and has no
control over, the decision of any plan sponsor, plan fiduciary or Service Agent
to impose such differing requirements. Please consult with your plan sponsor,
plan fiduciary or Service Agent for more information about available share
classes.
Please
contact your Service Agent about the availability of fund shares, the
shareholder services it provides for each class, the compensation it receives in
connection with the sale of each share class and the Service Agent’s practices
and other information.
The
following table provides information on the availability of each share class
based on investor type, subject to the share class’ eligibility requirements.
Your Service Agent can help you determine which share class is appropriate for
you. Each fund reserves the right to modify or
waive the eligibility policies for share class availability at any time.
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
A |
|
C1 |
|
C1 |
|
R |
|
I |
|
IS |
Individual
Investors |
|
✓ |
|
✓ |
|
|
|
|
|
✓2, 3 |
|
✓2 |
Omnibus
Retirement Plans |
|
✓ |
|
✓ |
|
✓4 |
|
✓1 |
|
✓ |
|
✓ |
Individual
Retirement Plans |
|
✓ |
|
✓ |
|
✓ |
|
|
|
✓ |
|
|
Clients
of Eligible Financial Intermediaries |
|
✓ |
|
✓ |
|
|
|
✓ |
|
✓5 |
|
✓5 |
Institutional
Investors |
|
✓ |
|
✓ |
|
|
|
|
|
✓ |
|
✓ |
1 |
Shares
are not available for purchase through accounts where the Distributor is
the broker-dealer of record (“Distributor Accounts”).
|
2 |
Individual
investors investing through a Service Agent may be eligible to invest in
Class I or Class IS shares, if such Service Agent is acting
solely as an agent on behalf of its customers pursuant to an agreement
with the Distributor and such investor’s shares are held in an omnibus
account on the books of the fund. Please contact your Service Agent for
more information. |
3 |
Class
I shares may be purchased directly from the fund by the following persons:
(i) current employees of the manager and its affiliates;
(ii) former employees of the manager and its affiliates with existing
accounts; (iii) current and former board members of investment
companies managed by affiliates of Franklin Resources; (iv) current
and former board members of Franklin Resources; and (v) the
“immediate families” of such persons. “Immediate families” are such
person’s spouse (including the surviving spouse of a deceased board
member), parents, grandparents, and children and grandchildren (including
step-relationships). For such investors, the minimum initial investment is
$1,000 and the minimum for each purchase of additional shares is $50.
Current employees may purchase additional Class I shares through a
systematic investment plan. |
4 |
Class
C1 shares are not available for purchase by new or existing investors
(except for certain retirement plan programs authorized by the Distributor
prior to August 1, 2012). Class C1 shares will continue to be
available for dividend reinvestment and incoming exchanges.
|
5 |
Investors
who qualify as Clients of Eligible Financial Intermediaries or who
participate in Eligible Investment Programs made available through their
Service Agents (such as investors in fee‑based advisory or mutual fund
“wrap” programs) are eligible to purchase, directly or via exchange,
Class I or Class IS shares, among other share classes. In such
cases your ability to hold Class I or Class IS shares may be
premised on your continuing participation in a fee‑based advisory or
mutual fund wrap program. Your Service Agent may reserve the right to
redeem your Class I or Class IS shares or exchange your
Class I or Class IS shares or exchange them for Class A
shares of the same fund, as applicable, if you terminate your fee‑based
advisory or mutual fund wrap program and are no longer eligible for
Class I or Class IS shares. You may be subject to an initial
sales charge in connection with such exchange, and you will be subject to
the annual distribution and/or service fee applicable to Class A
shares. Any redemption may generate a taxable gain or loss and
significantly change the asset allocation of your account.
|
|
|
Omnibus Retirement Plans are retirement plans
held on the books of the fund in a plan level or omnibus level account and
include: (i) 401(k) plans; (ii) 457 plans; (iii) employer-sponsored
403(b) plans; (iv) profit-sharing plans; (v) non‑qualified
deferred compensation plans; (vi) employer-sponsored benefit plans
(including health savings accounts); (vii) defined benefit plans;
(viii) other similar employer-sponsored |
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
65 |
|
|
|
retirement and benefit plans;
(ix) individual retirement accounts that are administered on the same
IRA recordkeeping platform and that invest in the fund through a single
omnibus account pursuant to a special contractual arrangement with the
fund or the Distributor; and (x) investors who rollover fund shares
from a retirement plan into an individual retirement account administered
on the same retirement plan platform. SIMPLE IRAs are considered Omnibus
Retirement Plans if they are employer-sponsored and held at the plan
level. |
|
Individual Retirement Plans include: (i) retirement plans investing through
brokerage accounts; (ii) certain retirement plans with direct
relationships to the fund that are not Institutional Investors nor
investing through omnibus accounts; and (iii) individual retirement
vehicles not held through an omnibus account, such as:
(a) traditional and Roth IRAs; (b) Coverdell education savings
accounts; (c) individual 403(b)(7) custodial accounts; (d) Keogh
plans; (e) SEPs; (f) SARSEPs; and (g) SIMPLE IRAs or similar
accounts. Individual Retirement Plans include plans held at the individual
participant level. Individual Retirement Plans are treated like individual
investors for purposes of determining sales charges and any applicable
sales charge reductions or waivers. |
|
Clients
of Eligible Financial Intermediaries include: investors who invest in the fund through
Service Agents that (a) charge such investors an ongoing fee for
advisory, investment, consulting or similar services, or (b) have
entered into an agreement with the Distributor to offer Class A,
Class C, Class R, Class I or Class IS shares through a
no‑load network or platform (including college savings vehicles)
(“Eligible Investment Programs”). These investors may include
(i) investors who invest in the fund through the program of a Service
Agent where the investor typically invests $10 million or more in
assets under management in accounts with the Service Agent (“Management
Accounts”); (ii) pension and profit sharing plans; (iii) other
employee benefit trusts; (iv) endowments; (v) foundations;
(vi) corporations; (vii) college savings vehicles such as
Section 529 plans; and (viii) direct retail investment platforms
through mutual fund “supermarkets,” where the sponsor links its client’s
account (including IRA accounts on such platforms) to a master account in
the sponsor’s name. |
|
Institutional Investors may include: (i) corporations; (ii) banks;
(iii) trust companies; (iv) insurance companies;
(v) investment companies; (vi) foundations; (vii) endowments;
and (viii) other similar entities. The Distributor or the Service
Agent may impose additional eligibility requirements or criteria to
determine if an investor, including the types of investors listed above,
qualifies as an Institutional Investor. |
To visit the website, go
to www.franklintempleton.com/mutualfunds, and click on the name of a fund. On
the selected fund’s page, scroll to the bottom of the page and click on the
disclosure labeled “Click here for funds sales charge and breakpoint
information.”
Additional information
about each share class
Class A shares
The
public offering price of Class A shares is the net asset value per share
plus the applicable sales charge, unless you qualify for a sales charge waiver.
Sales charges
The
following table shows the front‑end sales charge that you may pay, depending on
the amount you purchase. You pay a lower rate as the size of your investment
increases to certain levels called breakpoints. You do not pay a sales charge on
a fund’s distributions or dividends that you reinvest in additional Class A
shares.
It
also shows the amount of compensation that will be paid to your Service Agent
out of the sales charge if you buy shares from a Service Agent. As shown below,
the sales charge may be allocated between your Service Agent and the
Distributor. Service Agents will receive a distribution and/or service fee
payable on Class A shares at an annual rate of up to 0.25% of the average
daily net assets represented by the Class A shares serviced by them.
The
Distributor may not pay Service Agents selling Class A shares to Omnibus
Retirement Plans a commission on the purchase price of Class A shares sold
by them. However, for Omnibus Retirement Plans that are permitted to purchase
shares at net asset value, the Distributor may pay Service Agents commissions of
up to 1.00% of the purchase price of the Class A shares that are purchased
with regular ongoing plan contributions. Please contact your Service Agent for
more information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Growth Fund,
Moderate Growth Fund
and Conservative
Growth Fund |
|
|
Defensive Growth
Fund |
|
|
|
|
Amount of investment |
|
Sales charge as a %
of offering price |
|
|
Sales charge as a % of net amount invested |
|
|
Service
Agent commission as a % of offering price |
|
|
Sales charge as a %
of offering price |
|
|
Sales charge as a % of net amount invested |
|
|
Service
Agent commission as a % of offering price |
|
Less
than $25,000 |
|
|
5.50 |
|
|
|
5.82 |
|
|
|
5.00 |
|
|
|
3.75 |
|
|
|
3.90 |
|
|
|
3.50 |
|
$25,000
but less than $50,000 |
|
|
5.25 |
|
|
|
5.54 |
|
|
|
4.75 |
|
|
|
3.75 |
|
|
|
3.90 |
|
|
|
3.50 |
|
$50,000
but less than $100,000 |
|
|
4.50 |
|
|
|
4.71 |
|
|
|
4.00 |
|
|
|
3.75 |
|
|
|
3.90 |
|
|
|
3.50 |
|
$100,000
but less than $250,000 |
|
|
3.50 |
|
|
|
3.63 |
|
|
|
3.00 |
|
|
|
3.25 |
|
|
|
3.36 |
|
|
|
3.00 |
|
$250,000
but less than $500,000 |
|
|
2.50 |
|
|
|
2.56 |
|
|
|
2.25 |
|
|
|
2.25 |
|
|
|
2.30 |
|
|
|
2.25 |
|
$500,000
but less than $750,000 |
|
|
2.00 |
|
|
|
2.04 |
|
|
|
1.75 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
up to 1.00 |
2 |
|
| |
66 |
|
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Growth Fund,
Moderate Growth Fund
and Conservative
Growth Fund |
|
|
Defensive Growth
Fund |
|
|
|
|
Amount of investment |
|
Sales charge as a %
of offering price |
|
|
Sales charge as a % of net amount invested |
|
|
Service
Agent commission as a % of offering price |
|
|
Sales charge as a %
of offering price |
|
|
Sales charge as a % of net amount invested |
|
|
Service
Agent commission as a % of offering price |
|
$750,000
but less than $1 million |
|
|
1.50 |
|
|
|
1.52 |
|
|
|
1.25 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
up to 1.00 |
2 |
$1 million
or more |
|
|
-0- |
|
|
|
-0- |
|
|
|
up to 1.00 |
1 |
|
|
-0- |
|
|
|
-0- |
|
|
|
up to 1.00 |
2 |
1 |
The
Distributor may pay a commission of up to 1.00% to a Service Agent for
purchase amounts of $1 million or more. In such cases, starting
in the thirteenth month after purchase, the Service Agent will also
receive an annual distribution and/or service fee of up to 0.25% of the
average daily net assets represented by the Class A shares held by
its clients. Prior to the thirteenth month, the Distributor will
retain this fee. Where the Service Agent does not receive the payment
of this commission, the Service Agent will instead receive the annual
distribution and/or service fee starting immediately after
purchase. Please contact your Service Agent for more information.
|
2 |
Defensive
Growth Fund: The Distributor may pay a commission of up to 1.00% to a
Service Agent for purchase amounts of $500,000 or more. In such
cases, starting in the thirteenth month after purchase, the Service Agent
will also receive an annual distribution and/or service fee of up to 0.25%
of the average daily net assets represented by the Class A shares
held by its clients. Prior to the thirteenth month, the Distributor
will retain this fee. Where the Service Agent does not receive the
payment of this commission, the Service Agent will instead receive the
annual distribution and/or service fee starting immediately after
purchase. Please contact your Service Agent for more information.
|
Reductions, waivers or
elimination of sales charges for Class A shares
Larger purchases
You
may reduce or eliminate your Class A front‑end sales charge by purchasing
greater quantities. You pay a lower rate as the size of your investment
increases to the breakpoint levels indicated in the chart above. You do not pay
an initial sales charge when you buy $1 million ($500,000 for Defensive
Growth Fund) or more of Class A shares. However, if you redeem these
Class A shares within 18 months of purchase, you will pay a contingent
deferred sales charge of 1.00%. Please see “Contingent deferred sales
charges—Class A, Class C and Class C1 shares” below.
Letter of intent and
accumulation privilege
There
are several ways you can combine Eligible Purchases (as defined below) within
Eligible Accounts (as defined below) to take advantage of the breakpoints in the
Class A sales charge schedule. In order to take advantage of
reductions in sales charges that may be available to you when you purchase fund
shares, you must inform your Service Agent or the fund if you believe you are
eligible for a letter of intent or a right of accumulation. Whether you made
Eligible Purchases through one or more Service Agents, directly from the fund or
through a combination of the foregoing, it is your responsibility to inform your
Service Agent or the fund if you own Eligible Purchases that you believe are
eligible to be aggregated with your purchases. If you do not do so, you may not receive all sales
charge reductions for which you are eligible. Account statements may be
necessary in order to verify your eligibility for a reduced sales charge.
Eligible
Purchases include: (i) any class of shares of any other Legg Mason or
Franklin Templeton fund other than shares of such funds offered through
separately managed accounts that are managed by Legg Mason or Franklin
Templeton; and (ii) units of a Section 529 Plan managed by Legg Mason
or Franklin Templeton. For purposes of a letter of intent and the accumulation
privilege, Legg Mason and Franklin Templeton funds include BrandywineGLOBAL
funds, ClearBridge Investments funds, Martin Currie funds, and Western Asset
funds. They do not include the funds in the Franklin Templeton Variable
Insurance Products Trust, Legg Mason Partners Variable Equity Trust, Legg Mason
Partners Variable Income Trust or Legg Mason Partners Money Market Trust (except
for shares held in Distributor Accounts). Please contact your Service Agent or
the fund for more information.
Eligible
Accounts include shares of Legg Mason and Franklin Templeton funds registered to
(or held by a financial intermediary for):
• |
|
Your
“family member,” defined as your spouse or domestic partner, as recognized
by applicable state law, or your children; |
• |
|
You
jointly with one or more family members; |
• |
|
You
jointly with one or more persons who are not family members if that other
person has not included the value of the jointly-owned shares for purposes
of the accumulation privilege (as described below) for that person’s
separate investments in Legg Mason or Franklin Templeton fund shares;
|
• |
|
A
Coverdell Education Savings account for which you or a family member is
the identified responsible person; |
• |
|
A
trustee/custodian of an IRA (which includes a Roth IRA and an employer
sponsored IRA such as a SIMPLE IRA) or your non‑ERISA covered 403(b) plan
account, if the shares are registered/recorded under your or a family
member’s Social Security number; |
• |
|
A
529 college savings plan over which you or a family member has investment
discretion and control; |
• |
|
Any
entity over which you or a family member has individual or shared
authority, as principal, has investment discretion and control (for
example, an UGMA/UTMA account for a child on which you or a family member
is the custodian, a trust on which you or a family member is the trustee,
a business account (not to include retirement plans) for your solely owned
business (or the solely owned business of a family member) on which you or
a family member is the authorized signer); or |
• |
|
A
trust established by you or a family member as grantor.
|
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
67 |
|
Legg
Mason and Franklin Templeton fund shares held through an administrator or
trustee/custodian of an Employer Sponsored Retirement Plan (see definition
below) such as a 401(k) plan do not qualify for the accumulation privilege.
Legg
Mason and Franklin Templeton fund assets held in multiple Employer Sponsored
Retirement Plans (as defined below) may be combined in order to qualify for
sales charge breakpoints at the plan level if the plans are sponsored by the
same employer.
An
“Employer Sponsored Retirement Plan” is a Qualified Retirement Plan (as defined
below), ERISA covered 403(b) plan or certain non‑qualified deferred compensation
arrangements that operate in a similar manner to a Qualified Retirement Plan,
such as 457 plans and executive deferred compensation arrangements, but not
including employer sponsored IRAs. A “Qualified Retirement Plan” is an employer
sponsored pension or profit sharing plan that qualifies under section 401(a) of
the Internal Revenue Code, including 401(k), money purchase pension, profit
sharing and defined benefit plans.
Letter of intent. You
may qualify for a reduced front‑end sales charge by signing a “Letter of
Intent”. A Letter of Intent allows you to combine the current or cost value,
whichever is higher, of Eligible Purchases in Eligible Accounts with the value
that you intend to purchase within the next 13 months, which would, if bought
all at once, qualify you for a reduced sales charge. In addition, current
holdings under the accumulation privilege may be included in the Letter of
Intent. Shares or units redeemed or sold prior to reaching the threshold for a
reduced sales charge will not be counted for these purposes. The 13‑month period
begins when the Letter of Intent is received by a fund or your Service Agent and
you must inform your Service Agent or the fund that later purchases are subject
to a Letter of Intent. Account statements may be necessary in order to verify
your eligibility. If you hold Eligible Purchases in accounts at two or more
Service Agents, please contact your Service Agent to determine which
shares/units may be credited toward the Letter of Intent. Certain directors,
trustees and fiduciaries may be entitled to combine accounts in determining
their sales charge.
During
the term of the Letter of Intent, the fund will hold Class A shares
representing up to 5% of the indicated amount in an escrow account for payment
of the sales charge due if you do not meet the intended asset level goal during
the 13‑month term of the Letter of Intent. If the full amount is not purchased
during the 13‑month period, shares in the amount of any sales charge due, based
on the amount of actual purchases will be redeemed from your account.
Accumulation privilege.
The accumulation privilege allows you to combine the current or cost value,
whichever is higher, of Eligible Purchases in Eligible Accounts with the dollar
amount of your next purchase of Class A shares in determining whether you
qualify for a breakpoint and a reduced front‑end sales charge. The current value
of shares is determined by multiplying the number of shares as of the day prior
to your current purchase by their public offering price. The cost value of
shares is determined by aggregating the amount of Eligible Purchases in Eligible
Accounts (including reinvested dividends and capital gains, but excluding
capital appreciation), less any withdrawals, as of the date prior to your
current purchase. The cost value of Eligible Purchases in Eligible Accounts,
however, may only be aggregated for share purchases that took place within 18
months of your current purchase or your letter of intent start date, if
applicable. You must inform your Service Agent or the fund if you are eligible
for the accumulation privilege and of the other Eligible Purchases you own that
are eligible to be aggregated with your purchases. Account statements may be
necessary in order to verify your eligibility. If you hold Eligible Purchases in
accounts at two or more Service Agents, please contact your Service Agent to
determine which Eligible Purchases may be credited toward the accumulation
privilege.
Waivers for certain
Class A investors
Class A
initial sales charges are waived for certain types of investors, including:
• |
|
Shareholders
investing in Class A shares through Distributor Accounts
|
• |
|
Investors
who redeemed at least the same amount of Class A shares of a fund
sold by the Distributor in the past 90 days, if the investor’s Service
Agent is notified |
• |
|
Directors
and officers of any Legg Mason or Franklin Templeton fund
|
• |
|
Employees
of Franklin Resources and its subsidiaries |
• |
|
Investors
investing through certain retirement plans |
• |
|
Investors
who rollover fund shares from an employer-sponsored retirement plan into
an individual retirement account administered on the same retirement plan
platform |
If
you qualify for a waiver of the Class A initial sales charge, you must
notify your Service Agent or the fund at 877‑6LM‑FUND/656‑3863 at the time of
purchase and provide sufficient information at the time of purchase to permit
verification that the purchase qualifies for the initial sales charge waiver.
Different
Service Agents may impose different sales loads or offer different ways to
reduce sales loads. These variations are described at the end of this Prospectus
in the appendix titled “Appendix: Waivers and Discounts Available from Certain
Service Agents.”
For additional
information regarding waivers of Class A initial sales charges, contact
your Service Agent or a fund, consult the SAI or visit
www.franklintempleton.com/mutualfunds and click on the name of the fund. On the
selected fund’s page, scroll to the bottom of the page and click on the
disclosure labeled “Click here for funds sales charge and breakpoint
information.”
|
|
|
| |
68 |
|
| |
Franklin
Multi-Asset Allocation Funds |
Class C shares
You
buy Class C shares at net asset value with no initial sales charge.
However, if you redeem your Class C shares within one year of purchase, you
will pay a contingent deferred sales charge of 1.00%. Omnibus Retirement Plans
may not be subject to a contingent deferred sales charge.
Except
as noted below, the Distributor generally will pay Service Agents selling
Class C shares a commission of up to 1.00% of the purchase price of the
Class C shares they sell. The Distributor will retain the contingent
deferred sales charges and an annual distribution and/or service fee of up to
1.00% of the average daily net assets represented by the Class C shares
serviced by these Service Agents until the thirteenth month after purchase.
Starting in the thirteenth month after purchase, these Service Agents will
receive an annual distribution and/or service fee of up to 1.00% of the average
daily net assets represented by the Class C shares serviced by them.
The
Distributor may not pay Service Agents selling Class C shares to Omnibus
Retirement Plans a commission on the purchase price of Class C shares sold
by them. Instead, immediately after purchase, the Distributor may pay these
Service Agents an annual distribution and/or service fee of up to 1.00% of the
average daily net assets represented by the Class C shares serviced by
them.
Class C1 shares
Class C1
shares are not available for purchase by new or existing investors (except for
certain retirement plan programs authorized by the Distributor prior to
August 1, 2012). Class C1 shares are available for dividend
reinvestment and incoming exchanges of Class C1 shares from other funds
sold by the Distributor. You buy Class C1 shares at net asset value with no
initial sales charge. However, if you redeem your Class C1 shares within
one year of purchase, you will pay a contingent deferred sales charge of 1.00%.
However, if you exchange Class C1 shares that were not subject to a
contingent deferred sales charge when initially purchased for Class C1
shares of a fund that imposes a contingent deferred sales charge, your
contingent deferred sales charge will be measured from the date of your
exchange.
The
Distributor will retain the contingent deferred sales charges and an annual
distribution and/or service fee of up to 0.70% of the average daily net assets
represented by the Class C1 shares serviced by these Service Agents until
the thirteenth month after purchase. Starting in the thirteenth month after
purchase, these Service Agents will receive an annual distribution and/or
service fee of up to 0.70% of the average daily net assets represented by the
Class C1 shares serviced by them.
Class C and
Class C1 share conversion
Except
as noted below, Class C and Class C1 shares automatically convert to
Class A shares after the shares have been held for 8 years from the
purchase date; the shares will be converted in the month of, or the month
following, the 8‑year anniversary of purchase. The monthly conversion processing
date typically occurs around the middle of every month and generally falls on a
Friday. It is the responsibility of your Service Agent and not the fund or the
Distributor to ensure that you are credited with the proper holding period. If
your Service Agent does not have records verifying that your shares have been
held for at least 8 years, your Service Agent may not convert your Class C
or Class C1 shares to Class A shares. Group retirement plans held in
an omnibus recordkeeping platform through a Service Agent that does not track
participant-level share lot aging may not convert Class C or Class C1
shares to Class A shares. Customers of certain Service Agents may be
subject to different terms or conditions, as set by their Service Agent, in
connection with such conversions. Please refer to the appendix titled “Appendix:
Waivers and Discounts Available from Certain Service Agents” on page A‑1 of this
Prospectus or contact your Service Agent for more information.
For
Class C and Class C1 shares that have been acquired through an
exchange from another fund sold by the Distributor, the purchase date is
calculated from the date the shares were originally acquired in the other fund.
When Class C and Class C1 shares that a shareholder acquired through a
purchase or exchange convert, any other Class C and Class C1 shares
that the shareholder acquired as reinvested dividends and distributions related
to those shares also will convert into Class A shares on a pro rata basis.
All
conversions from Class C or Class C1 shares to Class A shares
will be based on the per share net asset value without the imposition of any
sales load, fee or other charge. The conversion from Class C or
Class C1 shares to Class A shares is not considered a taxable event
for federal income tax purposes.
Contingent deferred sales
charges – Class A, Class C and Class C1 shares
The
contingent deferred sales charge is based on the net asset value at the time of
purchase or redemption, whichever is less, and therefore you do not pay a sales
charge on amounts representing appreciation or depreciation.
In
addition, you do not pay a contingent deferred sales charge:
• |
|
When
you exchange shares for shares of the same share class of another fund
sold by the Distributor |
• |
|
On
shares representing reinvested distributions and dividends
|
• |
|
On
shares no longer subject to the contingent deferred sales charge
|
Each
time you place a request to redeem shares, a fund will first redeem any shares
in your account that are not subject to a contingent deferred sales charge and
then redeem the shares in your account that have been held the longest.
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
69 |
|
If
you redeem shares of a fund sold by the Distributor and pay a contingent
deferred sales charge, you may, under certain circumstances, reinvest all or
part of the redemption proceeds within 90 days in any other fund sold by the
Distributor and receive pro rata credit for any contingent deferred sales charge
imposed on the prior redemption. Please contact your Service Agent or the fund
for additional information.
The
Distributor receives contingent deferred sales charges as partial compensation
for its expenses in selling shares, including the payment of compensation to
your Service Agent.
Contingent deferred sales
charge waivers
The
contingent deferred sales charge for each share class will generally be waived:
• |
|
On
payments made through certain systematic withdrawal plans
|
• |
|
On
certain distributions from a retirement plan |
• |
|
For
certain Omnibus Retirement Plans |
• |
|
For
involuntary redemptions of small account balances
|
• |
|
For
12 months following the death or disability of a shareholder
|
• |
|
On
redemptions with respect to investors where the Distributor did not pay
the Service Agent a commission |
To
have your contingent deferred sales charge waived, you or your Service Agent
must let the fund know at the time you redeem shares that you qualify for such a
waiver.
Different
Service Agents may offer different contingent deferred sales charge waivers.
These variations are described at the end of this Prospectus in the appendix
titled “Appendix: Waivers and Discounts Available from Certain Service Agents.”
For additional
information regarding waivers of contingent deferred sales charges, contact your
Service Agent or the fund, consult the SAI or visit the fund’s website,
www.franklintempleton.com/mutualfunds, and click on the name of a fund. On the
selected fund’s page, scroll to the bottom of the page and click on the
disclosure labeled “Click here for funds sales charge and breakpoint
information.”
Class R shares
You
buy Class R shares at net asset value with no initial sales charge and no
contingent deferred sales charge when redeemed.
Service
Agents receive an annual distribution and/or service fee of up to 0.50% of the
average daily net assets represented by the Class R shares serviced by
them.
Class I and
Class IS shares
You
buy Class I or Class IS shares at net asset value with no initial
sales charge, no contingent deferred sales charge when redeemed and no
asset-based fee for sales or distribution. However, if you purchase Class I
or Class IS shares through a Service Agent acting solely as an agent on
behalf of its customers pursuant to an agreement with the Distributor, that
Service Agent may charge you a commission in an amount determined and separately
disclosed to you by the Service Agent.
Because
the funds are not a party to any commission arrangement between you and your
Service Agent, any purchases and redemptions of Class I or Class IS
shares will be made by the fund at the applicable net asset value (before
imposition of the sales commission). Any commissions charged by a Service Agent
are not reflected in the fees and expenses listed in the fee table or expense
example in this Prospectus nor are they reflected in the performance in the bar
chart and table in this Prospectus because these commissions are not charged by
the fund.
|
| |
70 |
|
Franklin
Multi-Asset Allocation Funds |
Buying shares
|
| |
|
|
Generally |
|
You
may buy shares at their net asset value next determined after receipt by
your Service Agent or the transfer agent of your purchase request in good
order, plus any applicable sales charge.
The
funds may not be available for sale in certain states. Prospective
investors should inquire as to whether a fund is available for sale in
their state of residence.
You
must provide the following information for your order to be
processed:
• Name of
fund being bought
• Class of
shares being bought
• Dollar
amount or number of shares being bought (as applicable)
• Account
number (if existing account) |
| |
Through a Service
Agent |
|
You
should contact your Service Agent to open an account and make arrangements
to buy shares.
Your
Service Agent may charge an annual account maintenance fee. |
| |
Through a
fund |
|
Investors
should contact a fund at 877‑6LM‑FUND/656‑3863 to open an account and make
arrangements to buy shares.
For
initial purchases, complete and send your account application to a fund at
one of the following addresses:
Regular
Mail:
Legg
Mason Funds
P.O.
Box 33030
St.
Petersburg, FL 33733-8030
Express,
Certified or Registered Mail:
Legg
Mason Funds
100
Fountain Parkway
St.
Petersburg, FL 33716-1205
Subsequent
purchases should be sent to the same address. Enclose a check to pay for
the shares. The fund will accept checks from other fund families and
investment companies as long as the registration name on your fund account
is the same as that listed on the check. |
| |
Through a
systematic investment plan |
|
You
may authorize your Service Agent or the fund transfer agent to transfer
funds automatically from (i) a regular bank account, (ii) cash
held in a brokerage account with a Service Agent, (iii) another fund
sold by the Distributor or (iv) certain money market funds, in order
to buy shares on a regular basis.
• Amounts
transferred must meet the applicable minimums (see “Purchase and sale of
fund shares”)
• If you do
not have sufficient funds in your account on a transfer date, you may be
charged a fee
• For
amounts transferred from other funds sold by the Distributor, please see
the section titled “Exchanging shares—Through a systematic exchange plan”
in such fund’s prospectus
For more
information, please contact your Service Agent or a fund, or consult the
SAI. |
| |
Franklin
Templeton
VIP Services® |
|
You
may be eligible for Franklin Templeton VIP Services® if you currently have
$500,000 or more invested in Franklin Templeton affiliated funds based
solely on shares registered directly with the fund and excluding shares
held indirectly through brokerage accounts. Franklin Templeton VIP
Services®
shareholders enjoy enhanced services and transaction capabilities. Please
contact Shareholder Services at (800) 632‑2301 for additional information
on this program. |
Additional information
about purchases
If
you pay with a check or electronic transfer (ACH) that does not clear or if your
payment is not received in a timely manner, your purchase may be cancelled and
you may be liable for any loss to a fund. Please note that a fund will not
accept cash, third-party checks, credit card convenience
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
71 |
|
checks,
pre‑paid debit cards, non‑bank money orders, traveler’s checks or checks drawn
on foreign banks for purchase of fund shares. Each fund and its agents have the
right to reject or cancel any purchase due to nonpayment.
Account registration
changes
Changes
in registration or certain account options for accounts held directly with a
fund must be made in writing. Medallion signature guarantees may be required.
(See “Other things to know about transactions—Medallion signature guarantees”
below.) All correspondence must include the account number and must be sent to
one of the following addresses:
Regular
Mail:
Legg
Mason Funds
P.O.
Box 33030
St.
Petersburg, FL 33733-8030
Express,
Certified or Registered Mail:
Legg
Mason Funds
100
Fountain Parkway
St.
Petersburg, FL 33716-1205
|
| |
72 |
|
Franklin
Multi-Asset Allocation Funds |
Exchanging shares
|
|
|
|
|
| |
|
|
Generally |
|
You
or your Service Agent may instruct a fund to exchange shares of any class
for shares of the same class of any other fund sold by the Distributor,
provided that a fund shares to be acquired in the exchange are available
to new investors in such other fund and you are eligible to invest in such
shares. Additionally, if the fund into which you wish to exchange your
shares does not offer the class of shares in which you are currently
invested, you may be able to exchange for a different share class (see
“Exchangeability between funds without the same share class” below).
In
addition, you may exchange shares of a fund for a different share class of
the same fund provided you meet the eligibility requirements of the share
class into which you are exchanging. You may exchange shares of a fund for
the same class of shares (or a different share class, if permitted) of
other funds sold by the Distributor on any day that both the fund and the
fund into which you are exchanging are open for business. Please contact
your Service Agent or the fund about funds available for exchange.
If
you hold Class C1 shares, you may exchange those shares for
Class C1 shares of other funds sold by the Distributor, or if a fund
does not offer Class C1 shares, for Class C shares. However,
once you exchange Class C1 shares for Class C shares, you would
not be permitted to exchange from Class C shares back to
Class C1 shares.
An
exchange of shares of one fund for shares of another fund is considered a
sale and generally results in a capital gain or loss for federal income
tax purposes, unless you are investing through an IRA, 401(k) or other
tax‑advantaged account. An exchange of shares of one class directly for
shares of another class of the same fund normally should not be taxable
for federal income tax purposes. You should talk to your tax professional
before making an exchange.
The
exchange privilege is not intended as a vehicle for short-term trading.
Each fund may suspend or terminate your exchange privilege if you engage
in a pattern of excessive exchanges. |
| |
Exchangeability
between funds without the same share class |
|
If
the fund you are exchanging into does not offer your share class, you may
be able to exchange your shares for a different share class.
|
|
Exchange from share class |
|
Exchangeable for |
|
|
|
Class I |
|
Class A
shares of Franklin U.S. Government Money Fund, Advisor Class or
Class Z |
|
|
|
Class IS |
|
Advisor
Class, Class Z or Class R6 |
|
|
|
Class R |
|
Class FI |
|
|
|
|
|
|
|
|
|
| |
Franklin Templeton
offers a distinctive family of funds tailored to help meet the varying
needs of large and small investors |
|
You
may exchange shares at their net asset value next determined after receipt
by your Service Agent or the transfer agent of your exchange request in
good order.
• If you
bought shares through a Service Agent, contact your Service Agent to learn
which funds your Service Agent makes available to you for exchanges
• If you
bought shares directly from a fund, contact the fund at
877‑6LM‑FUND/656‑3863 to learn which funds are available to you for
exchanges
• Generally,
exchanges may be made only between accounts that have identical
registrations, unless you send written instructions with a signature
guarantee
• Not all
funds offer all classes
• Some funds
are offered only in a limited number of states. Your Service Agent or a
fund will provide information about the funds offered in your state
Always
be sure to read the prospectus of the fund into which you are exchanging
shares. |
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
73 |
|
|
| |
|
|
Investment
minimums, sales charges and other requirements |
|
• In most
instances, your shares will not be subject to an initial sales charge or a
contingent deferred sales charge at the time of the exchange. You may be
charged an initial or contingent deferred sales charge if the shares being
exchanged were not subject to a sales charge
• Except as
noted above, your contingent deferred sales charge (if any) will continue
to be measured from the date of your original purchase of shares subject
to a contingent deferred sales charge, and you will be subject to the
contingent deferred sales charge of the fund that you originally
purchased
• You will
generally be required to meet the minimum investment requirement for the
class of shares of the fund or share class into which your exchange is
made (except in the case of systematic exchange plans or in exchanges of
an entire account balance)
• Your
exchange will also be subject to any other requirements of the fund or
share class into which you are exchanging shares
• Each fund
may suspend or terminate your exchange privilege if you engage in a
pattern of excessive exchanges |
| |
By
telephone |
|
Contact
your Service Agent or, if you hold shares directly with a fund, call the
fund at 877‑6LM‑FUND/656‑3863 for information. Exchanges are priced at the
net asset value next determined. Telephone exchanges may be made only
between accounts that have identical registrations and may be made on any
day the New York Stock Exchange (“NYSE”) is open. |
| |
By
mail |
|
Contact
your Service Agent or, if you hold shares directly with a fund, write to
the fund at one of the following addresses:
Regular
Mail:
Legg
Mason Funds
P.O.
Box 33030
St.
Petersburg, FL 33733-8030
Express,
Certified or Registered Mail:
Legg
Mason Funds
100
Fountain Parkway
St.
Petersburg, FL 33716-1205 |
| |
Through a
systematic exchange plan |
|
You
may be permitted to schedule automatic exchanges of shares of a fund for
shares of other funds available for exchange. All requirements for
exchanging shares described above apply to these exchanges. In
addition:
• Exchanges
may be made monthly, every alternate month, quarterly, semi-annually
or annually
• Each
exchange must meet the applicable investment minimums for systematic
investment plans (see “Purchase and sale of fund shares”)
For more
information, please contact your Service Agent or a fund or consult the
SAI. |
|
| |
74 |
|
Franklin
Multi-Asset Allocation Funds |
Redeeming shares
|
| |
|
|
Generally |
|
You
may redeem shares at their net asset value next determined after receipt
by your Service Agent or the fund transfer agent of your redemption
request in good order, less any applicable contingent deferred sales
charge. Redemptions made through your Service Agent may be subject to
transaction fees or other conditions as set by your Service Agent.
If
the shares are held by a fiduciary or corporation, partnership or similar
entity, other documents may be required. |
| |
Redemption
proceeds |
|
Your
redemption proceeds normally will be sent within 2 business days after
your request is received in good order, but in any event within 7 days,
regardless of the method a fund uses to make such payment (e.g., check,
wire or electronic transfer (ACH)). If you make a redemption request
before the fund has collected payment for the purchase of shares, the fund
may delay your proceeds until payment is collected, for up to 10
days.
Your
redemption proceeds may be delayed, or your right to receive redemption
proceeds suspended beyond 7 days, if the NYSE is closed (other than on
weekends or holidays) or trading is restricted, if an emergency exists, or
otherwise as permitted by order of the Securities and Exchange
Commission.
If
you have a brokerage account with a Service Agent, your redemption
proceeds may be sent to your Service Agent. Your redemption proceeds can
be sent by check to your address of record or by wire or electronic
transfer (ACH) to a bank account designated by you. To change the bank
account designated to receive wire or electronic transfers, you will be
required to deliver a new written authorization and may be asked to
provide other documents. You may be charged a fee by your bank on a
wire or an electronic transfer (ACH).
In
other cases, unless you direct otherwise, your proceeds will be paid by
check mailed to your address of record.
Under
normal circumstances, each fund expects to meet redemption requests by
using cash or cash equivalents in its portfolio and/or selling portfolio
assets to generate cash. Each fund also may pay redemption proceeds using
cash obtained through borrowing arrangements that may be available from
time to time.
Each
fund may pay all or a portion of your redemption proceeds by giving you
shares of underlying funds (for example, if the fund reasonably believes
that a cash redemption may have a substantial impact on the fund and the
remaining separate accounts or qualified plans). The shares that you
receive will be valued at the net asset value per share of the class of
the underlying fund held by a fund on the day of the redemption. If you
later decide to redeem the underlying fund shares, those shares will be
redeemed at the next-determined net asset value per share of the class of
the underlying fund that you hold, which may be more or less than the
value on the date of your redemption from the fund. You may pay
transaction costs to dispose of the fund shares.
Each
fund has available an unsecured revolving credit facility (the “Global
Credit Facility”) that may be used as an additional source of liquidity to
fund redemptions of shares. There can be no assurance that the Global
Credit Facility will remain available to the fund generally or that any
available credit under the Global Credit Facility will be available to the
fund when the fund seeks to draw on the Global Credit Facility.
During
periods of deteriorating or stressed market conditions or during
extraordinary or emergency circumstances, a fund may be more likely to pay
redemption proceeds with cash obtained through short-term borrowing
arrangements (if available) or by giving you shares of underlying
funds.
|
| |
By mail |
|
Contact
your Service Agent or, if you hold shares directly with a fund, write to
such fund at one of the following addresses:
Regular
Mail:
Legg Mason
Funds
P.O. Box
33030
St. Petersburg, FL
33733-8030
Express,
Certified or Registered Mail:
Legg Mason
Funds
100 Fountain
Parkway
St. Petersburg, FL
33716-1205
Your
written request must provide the following:
• The fund
name, the class of shares being redeemed and your account number
• The dollar
amount or number of shares being redeemed |
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
75 |
|
|
| |
| |
|
|
• Signature
of each owner exactly as the account is registered
• Medallion
signature guarantees, as applicable (see “Other things to know about
transactions”) |
| |
By
telephone |
|
If
your account application permits, you may be eligible to redeem shares by
telephone. Contact your Service Agent or, if you hold shares directly with
a fund, call 877‑6LM‑FUND/656‑3863 for more information. Please have the
following information ready when you call:
• Name of
fund being redeemed
• Class of
shares being redeemed
• The dollar
amount or number of shares being redeemed
• Account
number |
| |
Systematic
withdrawal plans |
|
You
may be permitted to schedule automatic redemptions of a portion of your
shares. To qualify, you must own shares of the fund with a value of at
least $5,000 and each automatic redemption must be at least $50 per
transaction per month and $150 quarterly per fund.
The
following conditions apply:
• Redemptions
may be made monthly, quarterly, semi-annually or annually
• If your
shares are subject to a contingent deferred sales charge, the charge will
be required to be paid upon redemption. However, the charge will be waived
if your automatic redemptions do not exceed 1% monthly, 3% quarterly, 6%
semiannually or 12% annually of your account’s net asset value, depending
on the frequency of your plan.
• You must
elect to have all dividends and distributions reinvested
• Your
Service Agent may impose a lower minimum amount for each automatic
redemption on a monthly and quarterly a basis.
For more
information, please contact your Service Agent or a fund or consult the
SAI. |
|
| |
76 |
|
Franklin
Multi-Asset Allocation Funds |
Other things to know
about transactions
When
you buy, exchange or redeem shares, your request must be in good order. This
means you have provided the following information, without which your request
may not be processed:
• |
|
In
the case of a purchase (including a purchase as part of an exchange
transaction), the class of shares being bought |
• |
|
In
the case of an exchange or redemption, the class of shares being exchanged
or redeemed (if you own more than one class) |
• |
|
Dollar
amount or number of shares being bought, exchanged or redeemed
|
• |
|
In
certain circumstances, the signature of each owner exactly as the account
is registered (see “Redeeming shares”) |
In
certain circumstances, such as during periods of market volatility, severe
weather and emergencies, shareholders may experience difficulties placing
exchange or redemption orders by telephone. In that case, shareholders should
consider using a fund’s other exchange and redemption procedures described under
“Exchanging shares” and “Redeeming shares.”
The
transfer agent or the funds will employ reasonable procedures to confirm that
any telephone, electronic or other exchange or redemption request is genuine,
which may include recording calls, asking the caller to provide certain personal
identification information, employing identification numbers, sending you a
written confirmation or requiring other confirmation procedures from time to
time. If these procedures are followed, neither a fund nor its agents will bear
any liability for these transactions, subject to applicable law.
Each
fund does not consider the U.S. Postal Service or private delivery services to
be its agents. Therefore, deposits in the mail or with such delivery services,
or receipt at a fund’s post office box, of purchase requests or redemption
orders, do not constitute receipt by a fund or its transfer agent.
Each
fund has the right to:
• |
|
Suspend
the offering of shares permanently or for a period of time
|
• |
|
Waive
or change minimum initial and additional investment amounts
|
• |
|
Reject
any purchase or exchange order |
• |
|
Change,
revoke or suspend the exchange privilege |
• |
|
Suspend
telephone transactions |
• |
|
Suspend
or postpone redemptions of shares on any day when trading on the NYSE is
restricted or as otherwise permitted by the SEC |
• |
|
Redeem
shares if information provided in the application should prove to be
incorrect in any manner judged by the fund to be material (e.g., in a
manner such as to render the shareholder ineligible to purchase shares of
that class) |
• |
|
Delay
sending out redemption proceeds for up to seven days if, in the judgment
of the subadviser, the fund could be adversely affected by immediate
payment. The fund may delay redemptions beyond seven days, or suspend
redemptions, only as permitted by the SEC or the Investment Company Act of
1940, as amended |
• |
|
Close
your account after a period of inactivity, as determined by state law, and
transfer your shares to the appropriate state |
For
your protection, the funds or your Service Agent may request additional
information in connection with large redemptions, unusual activity in your
account, or otherwise to ensure your redemption request is in good order. Please
contact your Service Agent or the funds for more information.
Medallion signature
guarantees
To
be in good order, you may be asked to include a Medallion signature guarantee
with your redemption request if you:
• |
|
are
redeeming shares and sending the proceeds to an address or bank account
not currently on file or to an account in another fund sold by the
Distributor with a different account registration
|
• |
|
are
redeeming more than $250,000 worth of shares |
• |
|
changed
your account registration or your address within 15 calendar days
|
• |
|
want
the check paid to someone other than the account owner(s)
|
• |
|
are
transferring the redemption proceeds to an account with a different
registration |
For
other types of transactions involving changes to your account registration
information, please contact the fund or your Service Agent.
When
a Medallion signature guarantee is called for, the shareholder should have a
Medallion signature guarantee stamped under his or her signature. You can obtain
a signature guarantee from most banks, dealers, brokers, credit unions and
federal savings and loan institutions, national securities exchanges, registered
securities associations and clearing agencies (each an “Eligible Guarantor
Institution”), but not from a notary public.
Each
fund and its agents reserve the right to reject any Medallion signature
guarantee pursuant to written signature guarantee standards or procedures, which
may be revised in the future to permit them to reject Medallion signature
guarantees from Eligible Guarantor Institutions. A fund may change the signature
guarantee requirements from time to time without prior notice to shareholders.
Restrictions on the
availability of the funds outside the United States
The
distribution of this Prospectus and the offering of shares of the funds are
restricted in certain jurisdictions. This Prospectus is not an offer or
solicitation in any jurisdiction where such offer or solicitation is unlawful,
where the person making an offer or solicitation is not authorized to make
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
77 |
|
it
or a person receiving an offer or solicitation may not lawfully receive it or
may not lawfully invest in the funds. Investors should inform themselves as to
the legal requirements within their own country before investing in the funds.
This
Prospectus, and the offer of shares hereunder, are not directed at persons
outside the United States. In particular, a fund is not intended to be marketed
to prospective investors in any member state of the European Union, Iceland,
Liechtenstein or Norway (collectively, the “European Economic Area” or “EEA”).
No notification or application has been made to the competent authority of any
member state of the EEA under the Alternative Investment Fund Managers Directive
(or any applicable legislation or regulations made thereunder) to market a fund
to investors in the EEA and it is not intended that any such notification or
application shall be made.
U.S.
citizens with addresses in the United States, and non‑U.S. citizens who reside
in the United States and have U.S. addresses, are permitted to establish
accounts with a fund. For these purposes, the “United States” and “U.S.” include
U.S. territories.
A
fund generally does not permit persons who do not reside in the United States or
who do not have U.S. addresses to establish accounts. Therefore, U.S. citizens
residing in foreign countries, as well as non‑U.S. citizens residing in foreign
countries, generally will not be permitted to establish accounts with a fund.
For
further information, you or your Service Agent may contact the funds at
877‑6LM‑FUND/656‑3863.
Anti-money laundering
Federal
anti-money laundering regulations require all financial institutions to obtain,
verify and record information that identifies each person who opens an account.
When you sign your account application, you may be asked to provide additional
information in order for a fund to verify your identity in accordance with these
regulations. If you are opening the account in the name of a legal entity (e.g.
partnership, limited liability company, business trust, corporation, etc.), you
may also be required to supply the identity of the beneficial owners and a
control individual with management authority, prior to the opening of your
account. Accounts may be restricted and/or closed, and the monies withheld,
pending verification of this information or as otherwise required under these
and other federal regulations.
Small account
fees/Mandatory redemptions
Small
accounts may be subject to a small account fee or to mandatory redemption, as
described below. Please contact your Service Agent or the fund for information
on the policy applicable to your account.
Small account fees
To
offset the relatively higher impact on fund expenses of servicing smaller
accounts, the fund may charge you a fee of $3.75 per account that is determined
and assessed quarterly by your Service Agent or by the Distributor for
Distributor Accounts on the next‑to‑last business day of the quarter (with an
annual maximum of $15.00 per account) if the value of your account is below
$1,000 (if applicable, $250 for retirement plans that are not
employer-sponsored) for any reason (including declines in net asset value). The
small account fee will be charged by redeeming shares in your account. If the
value of your account is $3.75 or less, the amount in the account may be
exhausted to pay the small account fee. If your Service Agent or the Distributor
assesses a small account fee, the small account fee will not be assessed on
systematic investment plans until the end of the first quarter after the account
has been established for 21 months. Payment of the small account fee through a
redemption of fund shares may result in tax consequences to you (see “Taxes” for
more information).
The
small account fee will not be charged on, if applicable: (i) retirement
plans (but will be charged on other plans that are not employer-sponsored such
as traditional and Roth individual retirement accounts, Coverdell education
savings accounts, individual 403(b)(7) custodial accounts, Keogh plans, SEPs,
SARSEPs, SIMPLE IRAs or similar accounts); (ii) Legg Mason funds that have been
closed to subsequent purchases for all classes; (iii) accounts that do not
have a valid address as evidenced by mail being returned to a fund or its
agents; (iv) Class R, Class I and Class IS shares; and
(v) for new accounts (except for new accounts opened by way of an
exchange), a small account fee will not be charged during the calendar quarter
in which you open your account.
If
your share class is no longer offered, you may not be able to bring your account
up to the minimum investment amount (although you may exchange into existing
accounts of other funds sold by the Distributor in which you hold the same share
class, to the extent otherwise permitted by those funds and subject to any
applicable sales charges).
The
small account fee is calculated on a fund‑by‑fund basis. If you have accounts in
multiple funds, they will not be aggregated for the purpose of calculating the
small account fee.
Some
shareholders who hold accounts in Classes A, C and C1 of the same fund, may have
those accounts aggregated for the purposes of these calculations. Please contact
the fund or your Service Agent for more information.
Small account balance
liquidations
Each
fund reserves the right to ask you to bring your account up to a minimum
investment amount determined by your Service Agent if your account has been open
for more than one year and the aggregate value of the fund shares in your
account is less than $500. You will be notified in writing and will have 30 days
to make an additional investment to bring your account value up to the required
level. If you choose not to do so within this 30‑day period, the fund may close
your account and send you the redemption proceeds. You will not be charged a
contingent deferred sales charge, if
|
| |
78 |
|
Franklin
Multi-Asset Allocation Funds |
applicable,
if your account is closed for this reason. If your share class is no longer
offered, you may not be able to bring your account up to the minimum investment
amount.
If
your account is closed, you will not be eligible to have your account reinstated
without imposition of any sales charges that may apply to your new purchase.
Please contact your Service Agent for more information. Any redemption of fund
shares may result in tax consequences to you (see “Taxes” for more information).
This
policy does not apply to: (i) certain broker-controlled accounts
established through the National Securities Clearing Corporation’s Networking
system; (ii) Class A accounts established pursuant to a conversion
from Class C or C1, and any remaining Class C or C1 accounts involved
in the conversion with a low balance due to the conversion;
(iii) tax‑deferred retirement plan accounts; (iv) accounts with an
active systematic investment plan; (v) accounts held through a 529 college
saving program; (vi) accounts that do not have a valid address as evidenced
by mail being returned to the fund or its agents, (vii) Coverdell Education
Saving Plan accounts; and (viii) accounts identified to us by the
applicable Service Agent as being fee‑based accounts.
General
A
fund may, with prior notice, change the minimum size of accounts subject to
mandatory redemption, which may vary by class, implement fees for other small
accounts or change the amount of the fee for small direct accounts.
Subject
to applicable law, a fund may, with prior notice, adopt other policies from time
to time requiring mandatory redemption of shares in certain circumstances.
For more information,
please contact your Service Agent or the funds or consult the SAI.
Frequent trading of fund
shares
The
Board has adopted the following policies and procedures with respect to frequent
trading in fund shares (“Frequent Trading Policy”).
Each
fund does not intend to accommodate short-term or frequent purchases and
redemptions of fund shares that may be detrimental to the fund. For example,
this type of trading activity could interfere with the efficient management of
each fund’s portfolio or materially increase the fund’s transaction costs,
administrative costs or taxes.
In
addition, since each fund may invest in foreign securities, they may be
vulnerable to a form of short-term trading that is sometimes referred to as
“time-zone arbitrage.” Time-zone arbitrage occurs when an investor seeks to take
advantage of delays between changes in the value of a mutual fund’s portfolio
holdings and the reflection of those changes in the fund’s net asset value per
share. These delays are more likely to occur in the case of foreign investments,
due to differences between the times during which a fund’s international
portfolio securities trade on foreign markets and the time as of which the
fund’s net asset value is calculated (generally as of the close of the NYSE).
Time-zone arbitrage traders seek to purchase or redeem shares of a fund based on
events occurring after foreign market closing prices are established, but before
calculation of a fund’s net asset value. This can result in the value of a
fund’s shares being diluted. One of the objectives of a fund’s fair value
pricing procedures is to minimize the possibility of this type of arbitrage;
however, there can be no assurance that a fund’s valuation procedures will be
successful in eliminating it.
Since
each fund may invest in securities that are, or may be, restricted, unlisted,
traded infrequently, thinly traded, or relatively illiquid (“relatively illiquid
securities”), they may be particularly vulnerable to arbitrage short-term
trading. Such arbitrage traders may seek to take advantage of a possible
differential between the last available market prices for one or more of those
relatively illiquid securities that are used to calculate each fund’s net asset
value and the latest indications of market values for those securities. One of
the objectives of each fund’s fair value pricing procedures is to minimize the
possibilities of this type of arbitrage; however, there can be no assurance that
the fund’s valuation procedures will be successful in eliminating it.
Through
its transfer agent, each fund performs ongoing monitoring of shareholder trading
in shares of the fund and other Franklin Templeton affiliated funds in order to
try and identify shareholder trading patterns that suggest an ongoing short-term
trading strategy. If shareholder trading patterns identified by the transfer
agent through monitoring or from other information regarding the shareholder’s
trading activity in non‑Franklin Templeton affiliated funds leads the transfer
agent to reasonably conclude that such trading may be detrimental to a fund as
described in this Frequent Trading Policy, the transfer agent, on behalf of the
fund, may temporarily or permanently bar future purchases into the fund or,
alternatively, may limit the amount, number or frequency of any future purchases
and/or the method by which you may request future purchases and redemptions
(including purchases and/or redemptions by an exchange or transfer between a
fund and any other mutual fund).
In
considering an investor’s trading patterns, each fund may consider, among other
factors, the investor’s trading history both directly and, if known, through
financial intermediaries, in the fund, in other Franklin Templeton affiliated
funds, in non‑Franklin Templeton affiliated mutual funds, or in accounts under
common control or ownership. The transfer agent may also reject any purchase
request, whether or not it represents part of any ongoing trading pattern, if
the manager or a fund’s transfer agent reasonably concludes that the amount of
the requested transaction may disrupt or otherwise interfere with the efficient
management of the fund’s portfolio. In determining what actions should be taken,
a fund’s transfer agent may consider a variety of factors, including the
potential impact of such remedial actions on the fund and its shareholders. If a
fund is a “fund of funds,” the fund’s transfer agent may consider the impact of
the trading activity and of any proposed remedial action on both the fund and
the affiliated underlying funds in which the fund invests.
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
79 |
|
Frequent trading
through financial intermediaries. You
are an investor subject to this Frequent Trading Policy whether you are a direct
shareholder of a fund or you are investing indirectly in the fund through a
financial intermediary, such as a broker-dealer, bank, trust company, insurance
company product such as an annuity contract, investment advisor, or an
administrator or trustee of an IRS‑recognized tax‑deferred savings plan such as
a 401(k) retirement plan and a 529 college savings plan.
Some
financial intermediaries maintain master accounts with a fund on behalf of their
customers (“omnibus accounts”). The fund has entered into “information sharing
agreements” with these financial intermediaries, which permit the fund to
obtain, upon request, information about the trading activity of the
intermediary’s customers that invest in the fund. If a fund’s transfer agent
identifies omnibus account level trading patterns that have the potential to be
detrimental to the fund, the transfer agent may, in its sole discretion, request
from the financial intermediary information concerning the trading activity of
its customers. Based upon its review of the information, if the transfer agent
determines that the trading activity of any customer may be detrimental to a
fund, it may, in its sole discretion, request the financial intermediary to
restrict or limit further trading in the fund by that customer. There can be no
assurance that the transfer agent’s monitoring of omnibus account level trading
patterns will enable it to identify all short-term trading by a financial
intermediary’s customers.
Record ownership
If
you hold shares through a Service Agent, your Service Agent may establish and
maintain your account and be the shareholder of record. In the event that a fund
holds a shareholder meeting, your Service Agent, as record holder, will be
entitled to vote your shares and may seek voting instructions from you. If you
do not give your Service Agent voting instructions, your Service Agent, under
certain circumstances, may nonetheless be entitled to vote your shares.
Confirmations and account
statements
If
you bought shares directly from a fund, you will receive a confirmation from the
fund after each transaction (except a reinvestment of dividends or capital gain
distributions, an investment made through the Systematic Investment Plan,
exchanges made through a systematic exchange plan and withdrawals made through
the Systematic Withdrawal Plan). Shareholders will receive periodic account
statements.
To
assist you in the management of your account you may direct the transfer agent
to send copies of your confirmations and/or periodic statements to another party
whom you designate, at no charge.
|
| |
80 |
|
Franklin
Multi-Asset Allocation Funds |
Dividends, other
distributions and taxes
Dividends and other
distributions
Each
fund generally distributes long-term capital gain, if any, once in December and
at such other times as are necessary.
Each
fund generally pays dividends, if any, as follows:
|
| |
Fund |
|
Income dividend distributions |
Growth
Fund |
|
Annually |
Moderate
Growth Fund |
|
Annually |
Conservative
Growth Fund |
|
Quarterly |
Defensive
Growth Fund |
|
Quarterly |
Shares
will generally begin to earn dividends on the settlement date of purchase. Each
fund may pay additional distributions and dividends in order to avoid a federal
tax.
You
can elect to receive dividends and/or other distributions in cash.
Unless
you elect to receive dividends and/or other distributions in cash, your
dividends and capital gain distributions will be automatically reinvested in
shares of the same class you hold, at the net asset value determined on the
reinvestment date. You do not pay a sales charge on reinvested distributions or
dividends.
If
you hold shares directly with a fund and you elect to receive dividends and/or
distributions in cash, you have the option to receive such dividends and/or
distributions via a direct deposit to your bank account or by check.
If
you hold Class A, Class C1 or Class C shares directly with a
fund, you may instruct the fund to have your dividends and/or distributions
invested in the corresponding class of shares (or if Class C1 shares are
not available, Class C) of another fund sold by the Distributor (excluding
Western Asset Government Reserves), subject to the following conditions:
• |
|
You
meet the minimum initial investment requirement of the other fund; and
|
• |
|
The
other fund is available for sale in your state. |
To
change those instructions, you must notify your Service Agent or the fund at
least three days before the next distribution is to be paid.
Please
contact your Service Agent or the fund to discuss what options are available to
you for receiving your dividends and other distributions.
The
Board reserves the right to revise the dividend policy or postpone the payment
of dividends, if warranted in the Board’s judgment, due to unusual
circumstances.
Taxes
The
following discussion is very general, applies only to shareholders who are U.S.
persons, and does not address shareholders subject to special rules, such as
those who hold fund shares through an IRA, 401(k) plan or other tax‑advantaged
account. Except as specifically noted, the discussion is limited to federal
income tax matters, and does not address state, local, foreign or non‑income
taxes. Further information regarding taxes, including certain federal income tax
considerations relevant to non‑U.S. persons, is included in the SAI. Because
each shareholder’s circumstances are different and special tax rules may apply,
you should consult your tax professional about federal, state, local and/or
foreign tax considerations that may be relevant to your particular situation.
In
general, redeeming shares, exchanging shares and receiving dividends and
distributions (whether received in cash or reinvested in additional shares or
shares of another fund) are all taxable events. An exchange between classes of
shares of the same fund normally is not taxable for federal income tax purposes,
whether or not the shares are held in a taxable account.
The
following table summarizes the tax status of certain transactions related to
each fund.
|
| |
Transaction |
|
Federal income tax status |
Redemption
or exchange of shares |
|
Usually
capital gain or loss; long-term only if shares are owned more than one
year |
Dividends
of investment income and distributions of net short-term capital gain |
|
Ordinary
income, or in certain cases qualified dividend income |
Distributions
of net capital gain (excess of net long-term capital gain over net
short-term
capital loss) |
|
Long-term
capital gain if reported as capital gain dividends by the
fund |
Distributions
of investment income that a fund reports as “qualified dividend income” may be
eligible to be taxed to noncorporate shareholders at the reduced rates
applicable to long-term capital gain if certain requirements are satisfied.
Distributions of net capital gain reported by a fund as capital gain dividends
are taxable to you as long-term capital gain regardless of how long you have
owned your shares. Noncorporate shareholders ordinarily pay tax at reduced rates
on long-term capital gain.
|
| |
Franklin Multi-Asset Allocation
Funds |
|
81 |
If
a fund realizes capital gains in excess of realized capital losses in any fiscal
year, it generally expects to make capital gain distributions to shareholders.
You may receive distributions that are attributable to appreciation of portfolio
securities that happened before you made your investment but had not been
realized at the time you made your investment, or that are attributable to
capital gains or other income that, although realized by a fund, had not yet
been distributed at the time you made your investment. Unless you purchase
shares through a tax‑advantaged account, these distributions will be taxable to
you even though they economically represent a return of a portion of your
investment. You may want to avoid buying shares when a fund is about to declare
a dividend or capital gain distribution. You should consult your tax
professional before buying shares no matter when you are investing.
A
Medicare contribution tax is imposed at the rate of 3.8% on all or a portion of
net investment income of U.S. individuals if their income exceeds specified
thresholds and on all or a portion of undistributed net investment income of
certain estates and trusts. Net investment income generally includes for this
purpose dividends and capital gain distributions paid by a fund and gain on the
redemption or exchange of fund shares.
A
dividend declared by a fund in October, November or December and paid during
January of the following year will, in certain circumstances, be treated as paid
in December for tax purposes.
If
a fund meets certain requirements with respect to its holdings, it may elect to
“pass through” to shareholders foreign taxes that it pays (or, in certain cases,
that underlying funds pay), in which case each shareholder will include the
amount of such taxes in computing gross income, but will be eligible to claim a
credit or deduction for such taxes, subject to generally applicable limitations
on such deductions and credits. If the fund does not so elect, the foreign taxes
paid or withheld will nonetheless reduce the fund’s taxable income. In addition,
a fund’s investment in certain foreign securities, foreign currencies or foreign
currency derivatives may affect the amount, timing, and character of fund
distributions to shareholders.
After
the end of each year, your Service Agent or a fund will provide you with
information about the distributions and dividends you received and any
redemptions of shares during the previous year. Because each shareholder’s
circumstances are different and special tax rules may apply, you should consult
your tax professional about your investment in a fund.
|
|
|
| |
82 |
|
| |
Franklin
Multi-Asset Allocation Funds |
Share price
You
may buy, exchange or redeem shares at their net asset value next determined
after receipt of your request in good order, adjusted for any applicable sales
charge. Each fund’s net asset value per share is the value of its assets minus
its liabilities divided by the number of shares outstanding. Net asset value is
calculated separately for each class of shares.
Each
fund calculates its net asset value every day the NYSE is open. Each fund
generally values its securities and other assets and calculates its net asset
value as of the scheduled close of regular trading on the NYSE, normally at 4:00
p.m. (Eastern time). If the NYSE closes at a time other than the scheduled
closing time, a fund will calculate its net asset value as of the scheduled
closing time. The NYSE is closed on certain holidays listed in the SAI.
In
order to buy, redeem or exchange shares at a certain day’s price, you must place
your order with your Service Agent or the fund transfer agent before the
scheduled close of regular trading on the NYSE on that day to receive that day’s
price. If the NYSE closes early on that day, you must place your order prior to
the scheduled closing time. It is the responsibility of the Service Agent to
transmit all orders to buy, exchange or redeem shares to the fund transfer agent
on a timely basis.
Valuation
of each fund’s securities and other assets is performed in accordance with the
valuation policy approved by the Board. As of the date of this Prospectus, the
fund’s manager serves as the fund’s valuation designee for purposes of
compliance with Rule 2a‑5 under the Investment Company Act of 1940, as amended.
Under the valuation policy, assets are valued as follows:
Investments
in underlying funds (except for ETFs) are valued at the net asset value per
share of the class of the underlying fund held by each fund as determined on
each business day. The prospectuses for the underlying funds describe how an
underlying fund values its securities, the circumstances under which the
underlying funds will use fair value pricing and the effects of fair value
pricing, The following generally describes how the fund and the underlying funds
in the Legg Mason funds complex value their securities:
• |
|
Equity
securities and certain derivative instruments that are traded on an
exchange are valued at the closing price (which may be reported at a
different time than the time at which a fund’s net asset value is
calculated) or, if that price is unavailable or deemed by the manager not
representative of market value, the last sale price. Where a security is
traded on more than one exchange (as is often the case overseas), the
security is generally valued at the price on the exchange considered by
the manager to be the primary exchange. In the case of securities not
traded on an exchange, or if exchange prices are not otherwise available,
the prices are typically determined by independent third party pricing
services that use a variety of techniques and methodologies. Investments
in mutual funds are valued at the net asset value per share of the class
of the underlying fund held by the fund as determined on each business
day. |
• |
|
The
valuations for fixed income securities and certain derivative instruments
are typically the prices supplied by independent third party pricing
services, which may use market prices or broker/dealer quotations or a
variety of fair valuation techniques and methodologies.
|
• |
|
The
valuations of securities traded on foreign markets and certain fixed
income securities will generally be based on prices determined as of the
earlier closing time of the markets in which they primarily trade. The
prices of foreign equity securities typically are adjusted using a fair
value model developed by an independent third party pricing service to
estimate the value of those securities at the time of closing of the NYSE.
When a fund holds securities or other assets that are denominated in a
foreign currency, a fund will normally use the currency exchange rates as
of 4:00 p.m. (Eastern time). Foreign markets are open for trading on
weekends and other days when a fund does not price its shares. Therefore,
the value of a fund’s shares may change on days when you will not be able
to purchase or redeem the fund’s shares. |
• |
|
If
independent third party pricing services are unable to supply prices for a
portfolio investment, or if the prices supplied are deemed by the manager
to be unreliable, the market price may be determined by the manager using
quotations from one or more broker/dealers. When such prices or quotations
are not available, or when the manager believes that they are unreliable,
the manager may price securities in accordance with the valuation policy.
The valuation policy permits, among other things, the use of a formula or
other method that takes into consideration market indices, yield curves
and other specific adjustments to determine fair value. These
determinations are subject to the Board’s oversight. Fair value of a
security is the amount, as determined by the manager in good faith, that a
fund might reasonably expect to receive upon a current sale of the
security. Each fund may also use fair value procedures if the manager
determines that a significant event has occurred between the time at which
a market price is determined and the time at which a fund’s net asset
value is calculated. |
Many
factors may influence the price at which a fund could sell any particular
portfolio investment. The sales price may well differ—higher or lower—from a
fund’s last valuation, and such differences could be significant, particularly
for securities that trade in relatively thin markets and/or markets that
experience extreme volatility. Moreover, valuing securities using fair value
methodologies involves greater reliance on judgment than valuing securities
based on market quotations. A fund that uses fair value methodologies may value
those securities higher or lower than another fund using market quotations or
its own fair value methodologies to price the same securities. There can be no
assurance that a fund could obtain the value assigned to a security if it were
to sell the security at approximately the time at which the fund determines its
net asset value. Investors who purchase or redeem fund shares on days when a
fund is holding fair-valued securities may receive a greater or lesser number of
shares, or higher or lower redemption proceeds, than they would have received if
the fund had not fair-valued the security or had used a different methodology.
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
83 |
|
Financial highlights
The
financial highlights tables are intended to help you understand the performance
of each fund’s classes for the past five years, unless otherwise noted. No
financial highlights are presented for Class IS shares because no
Class IS shares were outstanding for the periods shown. The returns of
Class IS shares will differ from those of the other classes to the extent
that their expenses differ. Certain information reflects financial results for a
single fund share. Total return represents the rate that an investor would have
earned (or lost) on an investment in the fund, assuming reinvestment of all
dividends and other distributions. Unless otherwise noted, this information has
been audited by the fund’s independent registered public accounting firm,
PricewaterhouseCoopers LLP, whose report, along with the fund’s financial
statements, is incorporated by reference into the fund’s SAI (see back cover)
and is included in the fund’s annual report. Each fund’s annual report is
available upon request by calling toll-free 877‑6LM‑FUND/656‑3863 or via the
following hyperlink: (
https://www.sec.gov/Archives/edgar/data/880366/000119312523081739/d420197dncsr.htm).
Franklin Multi-Asset Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class A Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$17.70 |
|
|
|
$16.79 |
|
|
|
$15.85 |
|
|
|
$15.28 |
|
|
|
$17.34 |
|
| |
Income (loss) from operations: |
|
|
| |
Net
investment income |
|
|
0.19 |
|
|
|
0.28 |
|
|
|
0.15 |
|
|
|
0.23 |
|
|
|
0.21 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.40) |
|
|
|
1.97 |
|
|
|
1.62 |
|
|
|
1.28 |
|
|
|
(1.37) |
|
Total income (loss) from
operations |
|
|
(1.21) |
|
|
|
2.25 |
|
|
|
1.77 |
|
|
|
1.51 |
|
|
|
(1.16) |
|
| |
Less distributions from: |
|
|
| |
Net
investment income |
|
|
(0.26) |
|
|
|
(0.66) |
|
|
|
(0.17) |
|
|
|
(0.23) |
|
|
|
(0.29) |
|
Net
realized gains |
|
|
(1.01) |
|
|
|
(0.68) |
|
|
|
(0.66) |
|
|
|
(0.71) |
|
|
|
(0.61) |
|
Total
distributions |
|
|
(1.27) |
|
|
|
(1.34) |
|
|
|
(0.83) |
|
|
|
(0.94) |
|
|
|
(0.90) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$15.22 |
|
|
|
$17.70 |
|
|
|
$16.79 |
|
|
|
$15.85 |
|
|
|
$15.28 |
|
Total return2
|
|
|
(6.19) |
% |
|
|
13.27 |
% |
|
|
11.84 |
% |
|
|
10.09 |
% |
|
|
(6.53) |
% |
|
|
|
|
| |
Net assets, end of
year (millions) |
|
|
$737 |
|
|
|
$821 |
|
|
|
$767 |
|
|
|
$729 |
|
|
|
$700 |
|
| |
Ratios to average net assets: |
|
|
| |
Gross
expenses3 |
|
|
0.44 |
% |
|
|
0.43 |
% |
|
|
0.48 |
% |
|
|
0.46 |
% |
|
|
0.47 |
% |
Net
expenses3,4
|
|
|
0.44 |
|
|
|
0.43 |
|
|
|
0.48 |
5 |
|
|
0.46 |
5 |
|
|
0.47 |
|
Net
investment income |
|
|
1.25 |
|
|
|
1.49 |
|
|
|
0.98 |
|
|
|
1.46 |
|
|
|
1.33 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
52 |
% |
|
|
21 |
% |
|
|
10 |
% |
|
|
25 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of sales charges, may reflect compensating balance
arrangements, fee waivers and/or expense reimbursements. In the absence of
compensating balance arrangements, fee waivers and/or expense
reimbursements, the total return would have been lower. Past performance
is no guarantee of future results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class A shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
| |
84 |
|
| |
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended
January 31: |
|
Class C Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$16.35 |
|
|
|
$15.53 |
|
|
|
$14.74 |
|
|
|
$14.24 |
|
|
|
$16.20 |
|
| |
Income (loss) from operations: |
|
|
| |
Net
investment income |
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.03 |
|
|
|
0.06 |
|
|
|
0.09 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.30) |
|
|
|
1.90 |
|
|
|
1.50 |
|
|
|
1.23 |
|
|
|
(1.26) |
|
Total income (loss) from
operations |
|
|
(1.23) |
|
|
|
1.97 |
|
|
|
1.53 |
|
|
|
1.29 |
|
|
|
(1.17) |
|
| |
Less distributions from: |
|
|
| |
Net
investment income |
|
|
(0.17) |
|
|
|
(0.47) |
|
|
|
(0.08) |
|
|
|
(0.08) |
|
|
|
(0.18) |
|
Net
realized gains |
|
|
(1.01) |
|
|
|
(0.68) |
|
|
|
(0.66) |
|
|
|
(0.71) |
|
|
|
(0.61) |
|
Total
distributions |
|
|
(1.18) |
|
|
|
(1.15) |
|
|
|
(0.74) |
|
|
|
(0.79) |
|
|
|
(0.79) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$13.94 |
|
|
|
$16.35 |
|
|
|
$15.53 |
|
|
|
$14.74 |
|
|
|
$14.24 |
|
Total return2
|
|
|
(6.90) |
% |
|
|
12.54 |
% |
|
|
11.07 |
% |
|
|
9.29 |
% |
|
|
(7.11) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$2,090 |
|
|
|
$2,626 |
|
|
|
$5,242 |
|
|
|
$6,547 |
|
|
|
$14,674 |
|
| |
Ratios to average net assets: |
|
|
| |
Gross
expenses3 |
|
|
1.17 |
% |
|
|
1.15 |
% |
|
|
1.16 |
% |
|
|
1.14 |
% |
|
|
1.15 |
% |
Net
expenses3,4
|
|
|
1.17 |
|
|
|
1.15 |
|
|
|
1.16 |
5 |
|
|
1.14 |
|
|
|
1.15 |
|
Net
investment income |
|
|
0.47 |
|
|
|
0.43 |
|
|
|
0.24 |
|
|
|
0.44 |
|
|
|
0.61 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
52 |
% |
|
|
21 |
% |
|
|
10 |
% |
|
|
25 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of CDSC, may reflect compensating balance arrangements,
fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total
return would have been lower. Past performance is no
|
guarantee |
of
future results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class C shares did not exceed 1.55%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements. |
|
| |
Franklin Multi-Asset Allocation
Funds |
|
85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended
January 31: |
|
Class R Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$17.52 |
|
|
|
$16.64 |
|
|
|
$15.73 |
|
|
|
$15.20 |
|
|
|
$17.23 |
|
| |
Income (loss) from operations: |
|
|
| |
Net
investment income |
|
|
0.14 |
|
|
|
0.21 |
|
|
|
0.10 |
|
|
|
0.21 |
|
|
|
0.18 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.39) |
|
|
|
1.95 |
|
|
|
1.60 |
|
|
|
1.23 |
|
|
|
(1.37) |
|
Total income (loss) from
operations |
|
|
(1.25) |
|
|
|
2.16 |
|
|
|
1.70 |
|
|
|
1.44 |
|
|
|
(1.19) |
|
| |
Less distributions from: |
|
|
| |
Net
investment income |
|
|
(0.22) |
|
|
|
(0.60) |
|
|
|
(0.13) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
Net
realized gains |
|
|
(1.01) |
|
|
|
(0.68) |
|
|
|
(0.66) |
|
|
|
(0.71) |
|
|
|
(0.61) |
|
Total
distributions |
|
|
(1.23) |
|
|
|
(1.28) |
|
|
|
(0.79) |
|
|
|
(0.91) |
|
|
|
(0.84) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$15.04 |
|
|
|
$17.52 |
|
|
|
$16.64 |
|
|
|
$15.73 |
|
|
|
$15.20 |
|
Total return2
|
|
|
(6.45) |
% |
|
|
12.83 |
% |
|
|
11.49 |
% |
|
|
9.68 |
% |
|
|
(6.81) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$88 |
|
|
|
$116 |
|
|
|
$111 |
|
|
|
$89 |
|
|
|
$71 |
|
| |
Ratios to average net assets: |
|
|
| |
Gross
expenses3 |
|
|
0.77 |
% |
|
|
1.27 |
% |
|
|
1.24 |
% |
|
|
1.32 |
% |
|
|
1.37 |
% |
Net
expenses3,4 |
|
|
0.77 |
|
|
|
0.80 |
5 |
|
|
0.80 |
5 |
|
|
0.80 |
5 |
|
|
0.80 |
5 |
Net
investment income |
|
|
0.91 |
|
|
|
1.13 |
|
|
|
0.70 |
|
|
|
1.35 |
|
|
|
1.13 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
52 |
% |
|
|
21 |
% |
|
|
10 |
% |
|
|
25 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class R shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
| |
86 |
|
| |
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended
January 31: |
|
Class I Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$17.61 |
|
|
|
$16.71 |
|
|
|
$15.77 |
|
|
|
$15.21 |
|
|
|
$17.27 |
|
| |
Income (loss) from operations: |
|
|
| |
Net
investment income |
|
|
0.28 |
|
|
|
0.35 |
|
|
|
0.20 |
|
|
|
0.28 |
|
|
|
0.27 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.44) |
|
|
|
1.94 |
|
|
|
1.61 |
|
|
|
1.27 |
|
|
|
(1.38) |
|
Total income (loss) from
operations |
|
|
(1.16) |
|
|
|
2.29 |
|
|
|
1.81 |
|
|
|
1.55 |
|
|
|
(1.11) |
|
| |
Less distributions from: |
|
|
| |
Net
investment income |
|
|
(0.31) |
|
|
|
(0.71) |
|
|
|
(0.21) |
|
|
|
(0.28) |
|
|
|
(0.34) |
|
Net
realized gains |
|
|
(1.01) |
|
|
|
(0.68) |
|
|
|
(0.66) |
|
|
|
(0.71) |
|
|
|
(0.61) |
|
Total
distributions |
|
|
(1.32) |
|
|
|
(1.39) |
|
|
|
(0.87) |
|
|
|
(0.99) |
|
|
|
(0.95) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$15.13 |
|
|
|
$17.61 |
|
|
|
$16.71 |
|
|
|
$15.77 |
|
|
|
$15.21 |
|
Total return2
|
|
|
(5.94) |
% |
|
|
13.56 |
% |
|
|
12.18 |
% |
|
|
10.36 |
% |
|
|
(6.24) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$4,534 |
|
|
|
$3,033 |
|
|
|
$2,315 |
|
|
|
$2,062 |
|
|
|
$1,733 |
|
| |
Ratios to average net assets: |
|
|
| |
Gross
expenses3 |
|
|
0.15 |
% |
|
|
0.16 |
% |
|
|
0.19 |
% |
|
|
0.18 |
% |
|
|
0.18 |
% |
Net
expenses3,4
|
|
|
0.15 |
|
|
|
0.16 |
|
|
|
0.19 |
5 |
|
|
0.18 |
|
|
|
0.18 |
|
Net
investment income |
|
|
1.82 |
|
|
|
1.90 |
|
|
|
1.32 |
|
|
|
1.81 |
|
|
|
1.71 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
52 |
% |
|
|
21 |
% |
|
|
10 |
% |
|
|
25 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class I shares did not exceed 0.25%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
87 |
Franklin Multi-Asset
Moderate Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended
January 31: |
|
Class A Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$16.99 |
|
|
|
$16.51 |
|
|
|
$15.75 |
|
|
|
$15.17 |
|
|
|
$16.93 |
|
| |
Income (loss) from operations: |
|
|
| |
Net
investment income |
|
|
0.23 |
|
|
|
0.30 |
|
|
|
0.18 |
|
|
|
0.26 |
|
|
|
0.28 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.35) |
|
|
|
1.47 |
|
|
|
1.45 |
|
|
|
1.26 |
|
|
|
(1.11) |
|
Total income (loss) from
operations |
|
|
(1.12) |
|
|
|
1.77 |
|
|
|
1.63 |
|
|
|
1.52 |
|
|
|
(0.83) |
|
| |
Less distributions from: |
|
|
| |
Net
investment income |
|
|
(0.25) |
|
|
|
(0.64) |
|
|
|
(0.20) |
|
|
|
(0.30) |
|
|
|
(0.34) |
|
Net
realized gains |
|
|
(0.86) |
|
|
|
(0.65) |
|
|
|
(0.67) |
|
|
|
(0.64) |
|
|
|
(0.59) |
|
Total
distributions |
|
|
(1.11) |
|
|
|
(1.29) |
|
|
|
(0.87) |
|
|
|
(0.94) |
|
|
|
(0.93) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$14.76 |
|
|
|
$16.99 |
|
|
|
$16.51 |
|
|
|
$15.75 |
|
|
|
$15.17 |
|
Total return2
|
|
|
(5.99) |
% |
|
|
10.58 |
% |
|
|
10.97 |
% |
|
|
10.12 |
% |
|
|
(4.70) |
% |
|
|
|
|
| |
Net assets, end of
year (millions) |
|
|
$449 |
|
|
|
$503 |
|
|
|
$477 |
|
|
|
$456 |
|
|
|
$438 |
|
| |
Ratios to average net assets: |
|
|
| |
Gross
expenses3 |
|
|
0.45 |
% |
|
|
0.43 |
% |
|
|
0.47 |
% |
|
|
0.45 |
% |
|
|
0.46 |
% |
Net
expenses3,4
|
|
|
0. |
45 |
|
|
0. |
435 |
|
|
0.47 |
5 |
|
|
0.45 |
|
|
|
0. |
46 |
Net
investment income |
|
|
1.52 |
|
|
|
1.70 |
|
|
|
1.21 |
|
|
|
1.69 |
|
|
|
1.77 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
51 |
% |
|
|
24 |
% |
|
|
16 |
% |
|
|
24 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of sales charges, may reflect compensating balance
arrangements, fee waivers and/or expense reimbursements. In the absence of
compensating balance arrangements, fee waivers and/or expense
reimbursements, the total return would have been lower. Past performance
is no guarantee of future results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class A shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
| |
88 |
|
| |
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class C Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$17.57 |
|
|
|
$16.99 |
|
|
|
$16.18 |
|
|
|
$15.51 |
|
|
|
$17.25 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.09 |
|
|
|
0.13 |
|
|
|
0.07 |
|
|
|
0.11 |
|
|
|
0.16 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.35) |
|
|
|
1.56 |
|
|
|
1.49 |
|
|
|
1.32 |
|
|
|
(1.09) |
|
Total income (loss) from
operations |
|
|
(1.26) |
|
|
|
1.69 |
|
|
|
1.56 |
|
|
|
1.43 |
|
|
|
(0.93) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.12) |
|
|
|
(0.46) |
|
|
|
(0.08) |
|
|
|
(0.12) |
|
|
|
(0.22) |
|
Net
realized gains |
|
|
(0.86) |
|
|
|
(0.65) |
|
|
|
(0.67) |
|
|
|
(0.64) |
|
|
|
(0.59) |
|
Total
distributions |
|
|
(0.98) |
|
|
|
(1.11) |
|
|
|
(0.75) |
|
|
|
(0.76) |
|
|
|
(0.81) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$15.33 |
|
|
|
$17.57 |
|
|
|
$16.99 |
|
|
|
$16.18 |
|
|
|
$15.51 |
|
Total return2
|
|
|
(6.70) |
% |
|
|
9.80 |
% |
|
|
10.22 |
% |
|
|
9.32 |
% |
|
|
(5.29) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$1,870 |
|
|
|
$2,909 |
|
|
|
$4,394 |
|
|
|
$6,253 |
|
|
|
$15,563 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
1.19 |
% |
|
|
1.17 |
% |
|
|
1.18 |
% |
|
|
1.15 |
% |
|
|
1.14 |
% |
Net
expenses3,4
|
|
|
1.19 |
|
|
|
1.17 |
5 |
|
|
1.18 |
5 |
|
|
1.15 |
5 |
|
|
1.14 |
5 |
Net
investment income |
|
|
0.59 |
|
|
|
0.72 |
|
|
|
0.44 |
|
|
|
0.69 |
|
|
|
0.99 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
51 |
% |
|
|
24 |
% |
|
|
16 |
% |
|
|
24 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of CDSC, may reflect compensating balance arrangements,
fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total
return would have been lower. Past performance is no guarantee of future
results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class C shares did not exceed 1.55%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class R Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$16.73 |
|
|
|
$16.28 |
|
|
|
$15.55 |
|
|
|
$15.00 |
|
|
|
$16.73 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.17 |
|
|
|
0.22 |
|
|
|
0.13 |
|
|
|
0.21 |
|
|
|
0.24 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.32) |
|
|
|
1.45 |
|
|
|
1.43 |
|
|
|
1.24 |
|
|
|
(1.10) |
|
Total income (loss) from
operations |
|
|
(1.15) |
|
|
|
1.67 |
|
|
|
1.56 |
|
|
|
1.45 |
|
|
|
(0.86) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.21) |
|
|
|
(0.57) |
|
|
|
(0.16) |
|
|
|
(0.26) |
|
|
|
(0.28) |
|
Net
realized gains |
|
|
(0.86) |
|
|
|
(0.65) |
|
|
|
(0.67) |
|
|
|
(0.64) |
|
|
|
(0.59) |
|
Total
distributions |
|
|
(1.07) |
|
|
|
(1.22) |
|
|
|
(0.83) |
|
|
|
(0.90) |
|
|
|
(0.87) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$14.51 |
|
|
|
$16.73 |
|
|
|
$16.28 |
|
|
|
$15.55 |
|
|
|
$15.00 |
|
Total return2
|
|
|
(6.34) |
% |
|
|
10.14 |
% |
|
|
10.63 |
% |
|
|
9.76 |
% |
|
|
(4.97) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$130 |
|
|
|
$141 |
|
|
|
$138 |
|
|
|
$132 |
|
|
|
$107 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
1.29 |
% |
|
|
1.15 |
% |
|
|
1.11 |
% |
|
|
1.17 |
% |
|
|
1.13 |
% |
Net
expenses3,4,5
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
Net
investment income |
|
|
1.17 |
|
|
|
1.28 |
|
|
|
0.89 |
|
|
|
1.37 |
|
|
|
1.53 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
51 |
% |
|
|
24 |
% |
|
|
16 |
% |
|
|
24 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future results.
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class R shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
| |
90 |
|
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class I Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$16.82 |
|
|
|
$16.35 |
|
|
|
$15.60 |
|
|
|
$15.03 |
|
|
|
$16.78 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.30 |
|
|
|
0.36 |
|
|
|
0.23 |
|
|
|
0.31 |
|
|
|
0.34 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.36) |
|
|
|
1.45 |
|
|
|
1.44 |
|
|
|
1.24 |
|
|
|
(1.11) |
|
Total income (loss) from
operations |
|
|
(1.06) |
|
|
|
1.81 |
|
|
|
1.67 |
|
|
|
1.55 |
|
|
|
(0.77) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.30) |
|
|
|
(0.69) |
|
|
|
(0.25) |
|
|
|
(0.34) |
|
|
|
(0.39) |
|
Net
realized gains |
|
|
(0.86) |
|
|
|
(0.65) |
|
|
|
(0.67) |
|
|
|
(0.64) |
|
|
|
(0.59) |
|
Total
distributions |
|
|
(1.16) |
|
|
|
(1.34) |
|
|
|
(0.92) |
|
|
|
(0.98) |
|
|
|
(0.98) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$14.60 |
|
|
|
$16.82 |
|
|
|
$16.35 |
|
|
|
$15.60 |
|
|
|
$15.03 |
|
Total return2
|
|
|
(5.68) |
% |
|
|
10.93 |
% |
|
|
11.32 |
% |
|
|
10.45 |
% |
|
|
(4.38) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$4,898 |
|
|
|
$4,084 |
|
|
|
$3,712 |
|
|
|
$3,372 |
|
|
|
$2,861 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
0.11 |
% |
|
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
|
|
0.18 |
% |
Net
expenses3,4
|
|
|
0.11 |
|
|
|
0.13 |
|
|
|
0.135 |
|
|
|
0.14 |
|
|
|
0.18 |
|
Net
investment income |
|
|
2.06 |
|
|
|
2.02 |
|
|
|
1.56 |
|
|
|
2.00 |
|
|
|
2.14 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
51 |
% |
|
|
24 |
% |
|
|
16 |
% |
|
|
24 |
% |
|
|
15 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future results.
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class I shares did not exceed 0.25%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
91 |
|
Franklin Multi-Asset
Conservative Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class A Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$15.12 |
|
|
|
$15.03 |
|
|
|
$14.33 |
|
|
|
$13.74 |
|
|
|
$14.94 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.26 |
|
|
|
0.29 |
|
|
|
0.22 |
|
|
|
0.26 |
|
|
|
0.30 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.31) |
|
|
|
0.79 |
|
|
|
1.16 |
|
|
|
1.10 |
|
|
|
(0.68) |
|
Total income (loss) from
operations |
|
|
(1.05) |
|
|
|
1.08 |
|
|
|
1.38 |
|
|
|
1.36 |
|
|
|
(0.38) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.27) |
|
|
|
(0.52) |
|
|
|
(0.26) |
|
|
|
(0.30) |
|
|
|
(0.35) |
|
Net
realized gains |
|
|
(0.66) |
|
|
|
(0.47) |
|
|
|
(0.42) |
|
|
|
(0.47) |
|
|
|
(0.47) |
|
Total
distributions |
|
|
(0.93) |
|
|
|
(0.99) |
|
|
|
(0.68) |
|
|
|
(0.77) |
|
|
|
(0.82) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$13.14 |
|
|
|
$15.12 |
|
|
|
$15.03 |
|
|
|
$14.33 |
|
|
|
$13.74 |
|
Total return2
|
|
|
(6.63) |
% |
|
|
7.10 |
% |
|
|
10.05 |
% |
|
|
10.11 |
% |
|
|
(2.39) |
% |
|
|
|
|
| |
Net assets, end of
year (millions) |
|
|
$279 |
|
|
|
$319 |
|
|
|
$302 |
|
|
|
$287 |
|
|
|
$271 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
0.46 |
% |
|
|
0.44 |
% |
|
|
0.47 |
% |
|
|
0.46 |
% |
|
|
0.47 |
% |
Net
expenses3,4
|
|
|
0.46 |
|
|
|
0.44 |
|
|
|
0.475 |
|
|
|
0.46 |
|
|
|
0.47 |
|
Net
investment income |
|
|
1.93 |
|
|
|
1.84 |
|
|
|
1.56 |
|
|
|
1.87 |
|
|
|
2.14 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
43 |
% |
|
|
20 |
% |
|
|
16 |
% |
|
|
25 |
% |
|
|
12 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of sales charges, may reflect compensating balance
arrangements, fee waivers and/or expense reimbursements. In the absence of
compensating balance arrangements, fee waivers and/or expense
reimbursements, the total return would have been lower. Past performance
is no guarantee of future results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class A shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
| |
92 |
|
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class C Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$15.97 |
|
|
|
$15.79 |
|
|
|
$15.02 |
|
|
|
$14.35 |
|
|
|
$15.55 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.14 |
|
|
|
0.13 |
|
|
|
0.09 |
|
|
|
0.18 |
|
|
|
0.19 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.36) |
|
|
|
0.90 |
|
|
|
1.25 |
|
|
|
1.14 |
|
|
|
(0.70) |
|
Total income (loss) from
operations |
|
|
(1.22) |
|
|
|
1.03 |
|
|
|
1.34 |
|
|
|
1.32 |
|
|
|
(0.51) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.14) |
|
|
|
(0.38) |
|
|
|
(0.15) |
|
|
|
(0.18) |
|
|
|
(0.22) |
|
Net
realized gains |
|
|
(0.66) |
|
|
|
(0.47) |
|
|
|
(0.42) |
|
|
|
(0.47) |
|
|
|
(0.47) |
|
Total
distributions |
|
|
(0.80) |
|
|
|
(0.85) |
|
|
|
(0.57) |
|
|
|
(0.65) |
|
|
|
(0.69) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$13.95 |
|
|
|
$15.97 |
|
|
|
$15.79 |
|
|
|
$15.02 |
|
|
|
$14.35 |
|
Total return2
|
|
|
(7.39) |
% |
|
|
6.39 |
% |
|
|
9.21 |
% |
|
|
9.37 |
% |
|
|
(3.11) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$1,348 |
|
|
|
$2,119 |
|
|
|
$4,780 |
|
|
|
$10,880 |
|
|
|
$12,191 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
1.26 |
% |
|
|
1.20 |
% |
|
|
1.21 |
% |
|
|
1.19 |
% |
|
|
1.20 |
% |
Net
expenses3,4
|
|
|
1.26 |
|
|
|
1.20 |
|
|
|
1.215 |
|
|
|
1.19 |
|
|
|
1.20 |
|
Net
investment income |
|
|
0.99 |
|
|
|
0.78 |
|
|
|
0.64 |
|
|
|
1.25 |
|
|
|
1.29 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
43 |
% |
|
|
20 |
% |
|
|
16 |
% |
|
|
25 |
% |
|
|
12 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of CDSC, may reflect compensating balance arrangements,
fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total
return would have been lower. Past performance is no guarantee of future
results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class C shares did not exceed 1.55%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class R Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$15.16 |
|
|
|
$15.06 |
|
|
|
$14.36 |
|
|
|
$13.77 |
|
|
|
$14.90 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.31 |
|
|
|
0.19 |
|
|
|
0.18 |
|
|
|
0.22 |
|
|
|
0.21 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.41) |
|
|
|
0.83 |
|
|
|
1.15 |
|
|
|
1.09 |
|
|
|
(0.63) |
|
Total income (loss) from
operations |
|
|
(1.10) |
|
|
|
1.02 |
|
|
|
1.33 |
|
|
|
1.31 |
|
|
|
(0.42) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.23) |
|
|
|
(0.45) |
|
|
|
(0.21) |
|
|
|
(0.25) |
|
|
|
(0.24) |
|
Net
realized gains |
|
|
(0.66) |
|
|
|
(0.47) |
|
|
|
(0.42) |
|
|
|
(0.47) |
|
|
|
(0.47) |
|
Total
distributions |
|
|
(0.89) |
|
|
|
(0.92) |
|
|
|
(0.63) |
|
|
|
(0.72) |
|
|
|
(0.71) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$13.17 |
|
|
|
$15.16 |
|
|
|
$15.06 |
|
|
|
$14.36 |
|
|
|
$13.77 |
|
Total return2
|
|
|
(6.93) |
% |
|
|
6.69 |
% |
|
|
9.66 |
% |
|
|
9.74 |
% |
|
|
(2.67) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$84 |
|
|
|
$45 |
|
|
|
$70 |
|
|
|
$60 |
|
|
|
$48 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
0.86 |
% |
|
|
1.59 |
% |
|
|
1.25 |
% |
|
|
1.34 |
% |
|
|
1.30 |
% |
Net
expenses3,4,5
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
Net
investment income |
|
|
2.36 |
|
|
|
1.21 |
|
|
|
1.26 |
|
|
|
1.58 |
|
|
|
1.48 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
43 |
% |
|
|
20 |
% |
|
|
16 |
% |
|
|
25 |
% |
|
|
12 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future results.
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class R shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
| |
94 |
|
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class I Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$15.11 |
|
|
|
$15.02 |
|
|
|
$14.33 |
|
|
|
$13.73 |
|
|
|
$14.93 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.30 |
|
|
|
0.34 |
|
|
|
0.27 |
|
|
|
0.30 |
|
|
|
0.32 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.31) |
|
|
|
0.79 |
|
|
|
1.14 |
|
|
|
1.10 |
|
|
|
(0.67) |
|
Total income (loss) from
operations |
|
|
(1.01) |
|
|
|
1.13 |
|
|
|
1.41 |
|
|
|
1.40 |
|
|
|
(0.35) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.31) |
|
|
|
(0.57) |
|
|
|
(0.30) |
|
|
|
(0.33) |
|
|
|
(0.38) |
|
Net
realized gains |
|
|
(0.66) |
|
|
|
(0.47) |
|
|
|
(0.42) |
|
|
|
(0.47) |
|
|
|
(0.47) |
|
Total
distributions |
|
|
(0.97) |
|
|
|
(1.04) |
|
|
|
(0.72) |
|
|
|
(0.80) |
|
|
|
(0.85) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$13.13 |
|
|
|
$15.11 |
|
|
|
$15.02 |
|
|
|
$14.33 |
|
|
|
$13.73 |
|
Total return2
|
|
|
(6.32) |
% |
|
|
7.42 |
% |
|
|
10.35 |
% |
|
|
10.48 |
% |
|
|
(2.15) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$2,533 |
|
|
|
$2,745 |
|
|
|
$2,463 |
|
|
|
$1,982 |
|
|
|
$1,721 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
0.15 |
% |
|
|
0.15 |
% |
|
|
0.15 |
% |
|
|
0.14 |
% |
|
|
0.24 |
% |
Net
expenses3,4
|
|
|
0.15 |
|
|
|
0.15 |
|
|
|
0.155 |
|
|
|
0.14 |
|
|
|
0.24 |
|
Net
investment income |
|
|
2.28 |
|
|
|
2.16 |
|
|
|
1.92 |
|
|
|
2.16 |
|
|
|
2.24 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
43 |
% |
|
|
20 |
% |
|
|
16 |
% |
|
|
25 |
% |
|
|
12 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future results.
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class I shares did not exceed 0.25%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements. |
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
95 |
|
Franklin Multi-Asset
Defensive Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class A Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$13.81 |
|
|
|
$14.02 |
|
|
|
$13.42 |
|
|
|
$12.76 |
|
|
|
$13.50 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.28 |
|
|
|
0.30 |
|
|
|
0.27 |
|
|
|
0.29 |
|
|
|
0.33 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.36) |
|
|
|
0.21 |
|
|
|
0.78 |
|
|
|
0.91 |
|
|
|
(0.49) |
|
Total income (loss) from
operations |
|
|
(1.08) |
|
|
|
0.51 |
|
|
|
1.05 |
|
|
|
1.20 |
|
|
|
(0.16) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.28) |
|
|
|
(0.42) |
|
|
|
(0.32) |
|
|
|
(0.34) |
|
|
|
(0.35) |
|
Net
realized gains |
|
|
(0.42) |
|
|
|
(0.30) |
|
|
|
(0.13) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
Total
distributions |
|
|
(0.70) |
|
|
|
(0.72) |
|
|
|
(0.45) |
|
|
|
(0.54) |
|
|
|
(0.58) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$12.03 |
|
|
|
$13.81 |
|
|
|
$14.02 |
|
|
|
$13.42 |
|
|
|
$12.76 |
|
Total return2
|
|
|
(7.63) |
% |
|
|
3.63 |
% |
|
|
8.08 |
% |
|
|
9.60 |
% |
|
|
(1.11) |
% |
|
|
|
|
| |
Net assets, end of
year (millions) |
|
|
$109 |
|
|
|
$130 |
|
|
|
$130 |
|
|
|
$124 |
|
|
|
$116 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
0.56 |
% |
|
|
0.52 |
% |
|
|
0.54 |
% |
|
|
0.55 |
% |
|
|
0.56 |
% |
Net
expenses3,4
|
|
|
0.56 |
|
|
|
0.52 |
|
|
|
0.54 |
5 |
|
|
0.55 |
|
|
|
0.56 |
|
Net
investment income |
|
|
2.26 |
|
|
|
2.08 |
|
|
|
2.03 |
|
|
|
2.20 |
|
|
|
2.54 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
36 |
% |
|
|
8 |
% |
|
|
10 |
% |
|
|
19 |
% |
|
|
9 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of sales charges, may reflect compensating balance
arrangements, fee waivers and/or expense reimbursements. In the absence of
compensating balance arrangements, fee waivers and/or expense
reimbursements, the total return would have been lower. Past performance
is no guarantee of future results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class A shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements. |
|
| |
96 |
|
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class C Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$13.75 |
|
|
|
$13.94 |
|
|
|
$13.36 |
|
|
|
$12.70 |
|
|
|
$13.43 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.16 |
|
|
|
0.18 |
|
|
|
0.17 |
|
|
|
0.19 |
|
|
|
0.22 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.32) |
|
|
|
0.23 |
|
|
|
0.77 |
|
|
|
0.92 |
|
|
|
(0.48) |
|
Total income (loss) from
operations |
|
|
(1.16) |
|
|
|
0.41 |
|
|
|
0.94 |
|
|
|
1.11 |
|
|
|
(0.26) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.18) |
|
|
|
(0.30) |
|
|
|
(0.23) |
|
|
|
(0.25) |
|
|
|
(0.24) |
|
Net
realized gains |
|
|
(0.42) |
|
|
|
(0.30) |
|
|
|
(0.13) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
Total
distributions |
|
|
(0.60) |
|
|
|
(0.60) |
|
|
|
(0.36) |
|
|
|
(0.45) |
|
|
|
(0.47) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$11.99 |
|
|
|
$13.75 |
|
|
|
$13.94 |
|
|
|
$13.36 |
|
|
|
$12.70 |
|
Total return2
|
|
|
(8.34) |
% |
|
|
2.98 |
% |
|
|
7.18 |
% |
|
|
8.85 |
% |
|
|
(1.85) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$545 |
|
|
|
$792 |
|
|
|
$964 |
|
|
|
$1,348 |
|
|
|
$1,694 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses3 |
|
|
1.30 |
% |
|
|
1.29 |
% |
|
|
1.27 |
% |
|
|
1.26 |
% |
|
|
1.28 |
% |
Net
expenses3,4
|
|
|
1.30 |
|
|
|
1.29 |
|
|
|
1.275 |
|
|
|
1.26 |
|
|
|
1.28 |
|
Net
investment income |
|
|
1.30 |
|
|
|
1.28 |
|
|
|
1.32 |
|
|
|
1.47 |
|
|
|
1.67 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
36 |
% |
|
|
8 |
% |
|
|
10 |
% |
|
|
19 |
% |
|
|
9 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of CDSC, may reflect compensating balance arrangements,
fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total
return would have been lower. Past performance is no guarantee of future
results. |
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class C shares did not exceed 1.55%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class C1 Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$14.41 |
|
|
|
$14.41 |
|
|
|
$13.78 |
|
|
|
$13.07 |
|
|
|
$13.81 |
|
|
|
|
|
| |
Income (loss) from operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.09 |
|
|
|
0.15 |
|
|
|
0.19 |
|
|
|
0.21 |
|
|
|
0.25 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.43) |
|
|
|
0.44 |
|
|
|
0.81 |
|
|
|
0.95 |
|
|
|
(0.48) |
|
Total income (loss) from
operations |
|
|
(1.34) |
|
|
|
0.59 |
|
|
|
1.00 |
|
|
|
1.16 |
|
|
|
(0.23) |
|
|
|
|
|
| |
Less distributions from: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
(0.03) |
|
|
|
(0.29) |
|
|
|
(0.24) |
|
|
|
(0.25) |
|
|
|
(0.28) |
|
Net
realized gains |
|
|
(0.42) |
|
|
|
(0.30) |
|
|
|
(0.13) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
Total
distributions |
|
|
(0.45) |
|
|
|
(0.59) |
|
|
|
(0.37) |
|
|
|
(0.45) |
|
|
|
(0.51) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$12.62 |
|
|
|
$14.41 |
|
|
|
$14.41 |
|
|
|
$13.78 |
|
|
|
$13.07 |
|
Total return2
|
|
|
(9.21) |
% |
|
|
4.03 |
%3 |
|
|
7.43 |
% |
|
|
9.04 |
% |
|
|
(1.53) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$2 |
|
|
|
$69 |
|
|
|
$227 |
|
|
|
$596 |
|
|
|
$2,005 |
|
|
|
|
|
| |
Ratios to average net assets: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Gross
expenses4 |
|
|
2.05 |
% |
|
|
1.53 |
% |
|
|
1.12 |
% |
|
|
1.05 |
% |
|
|
1.03 |
% |
Net
expenses4,5
|
|
|
1.25 |
6 |
|
|
1.25 |
6 |
|
|
1.12 |
6 |
|
|
1.05 |
|
|
|
1.03 |
|
Net
investment income |
|
|
0.66 |
|
|
|
1.00 |
|
|
|
1.36 |
|
|
|
1.54 |
|
|
|
1.91 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
36 |
% |
|
|
8 |
% |
|
|
10 |
% |
|
|
19 |
% |
|
|
9 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures, exclusive of CDSC, may reflect compensating balance arrangements,
fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total
return would have been lower. Past performance is no guarantee of future
results. |
3 |
The
total return includes a payment by an affiliate to reimburse for an error.
Absent this payment, total return would have been 2.88% for the year ended
December 31, 2021. |
4 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
5 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class C1 shares did not exceed 1.25%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
6 |
Reflects
fee waivers and/or expense reimbursements.
|
|
| |
98 |
|
Franklin
Multi-Asset Allocation Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class R Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$13.79 |
|
|
|
$14.00 |
|
|
|
$13.41 |
|
|
|
$12.75 |
|
|
|
$13.47 |
|
| |
Income (loss) from operations: |
|
|
| |
Net
investment income |
|
|
0.22 |
|
|
|
0.29 |
|
|
|
0.24 |
|
|
|
0.26 |
|
|
|
0.30 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.33) |
|
|
|
0.19 |
|
|
|
0.77 |
|
|
|
0.91 |
|
|
|
(0.50) |
|
Total income (loss) from
operations |
|
|
(1.11) |
|
|
|
0.48 |
|
|
|
1.01 |
|
|
|
1.17 |
|
|
|
(0.20) |
|
| |
Less distributions from: |
|
|
| |
Net
investment income |
|
|
(0.25) |
|
|
|
(0.39) |
|
|
|
(0.29) |
|
|
|
(0.31) |
|
|
|
(0.29) |
|
Net
realized gains |
|
|
(0.42) |
|
|
|
(0.30) |
|
|
|
(0.13) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
Total
distributions |
|
|
(0.67) |
|
|
|
(0.69) |
|
|
|
(0.42) |
|
|
|
(0.51) |
|
|
|
(0.52) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$12.01 |
|
|
|
$13.79 |
|
|
|
$14.00 |
|
|
|
$13.41 |
|
|
|
$12.75 |
|
Total return2
|
|
|
(7.77) |
% |
|
|
3.37 |
% |
|
|
7.74 |
% |
|
|
9.36 |
% |
|
|
(1.39) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$95 |
|
|
|
$141 |
|
|
|
$95 |
|
|
|
$84 |
|
|
|
$60 |
|
| |
Ratios to average net assets: |
|
|
| |
Gross
expenses3 |
|
|
0.87 |
% |
|
|
1.32 |
% |
|
|
1.27 |
% |
|
|
1.34 |
% |
|
|
1.39 |
% |
Net
expenses3,4,5
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
|
|
0.80 |
|
Net
investment income |
|
|
1.79 |
|
|
|
2.06 |
|
|
|
1.79 |
|
|
|
2.00 |
|
|
|
2.34 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
36 |
% |
|
|
8 |
% |
|
|
10 |
% |
|
|
19 |
% |
|
|
9 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future results.
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class R shares did not exceed 0.80%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For a share of each class of beneficial interest
outstanding throughout each year ended January 31: |
|
Class I Shares1 |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
| |
Net asset value,
beginning of year |
|
|
$13.78 |
|
|
|
$13.98 |
|
|
|
$13.39 |
|
|
|
$12.74 |
|
|
|
$13.47 |
|
| |
Income (loss) from operations: |
|
|
| |
Net
investment income |
|
|
0.31 |
|
|
|
0.33 |
|
|
|
0.31 |
|
|
|
0.33 |
|
|
|
0.36 |
|
Net
realized and unrealized gain (loss) |
|
|
(1.35) |
|
|
|
0.23 |
|
|
|
0.77 |
|
|
|
0.90 |
|
|
|
(0.48) |
|
Total income (loss) from
operations |
|
|
(1.04) |
|
|
|
0.56 |
|
|
|
1.08 |
|
|
|
1.23 |
|
|
|
(0.12) |
|
| |
Less distributions from: |
|
|
| |
Net
investment income |
|
|
(0.32) |
|
|
|
(0.46) |
|
|
|
(0.36) |
|
|
|
(0.38) |
|
|
|
(0.38) |
|
Net
realized gains |
|
|
(0.42) |
|
|
|
(0.30) |
|
|
|
(0.13) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
Total
distributions |
|
|
(0.74) |
|
|
|
(0.76) |
|
|
|
(0.49) |
|
|
|
(0.58) |
|
|
|
(0.61) |
|
|
|
|
|
| |
Net asset value,
end of year |
|
|
$12.00 |
|
|
|
$13.78 |
|
|
|
$13.98 |
|
|
|
$13.39 |
|
|
|
$12.74 |
|
Total return2
|
|
|
(7.35) |
% |
|
|
3.99 |
% |
|
|
8.35 |
% |
|
|
9.86 |
% |
|
|
(0.74) |
% |
|
|
|
|
| |
Net assets, end of
year (000s) |
|
|
$1,234 |
|
|
|
$1,820 |
|
|
|
$1,974 |
|
|
|
$1,360 |
|
|
|
$1,263 |
|
| |
Ratios to average net assets: |
|
|
| |
Gross
expenses3 |
|
|
0.27 |
% |
|
|
0.26 |
% |
|
|
0.27 |
% |
|
|
0.30 |
% |
|
|
0.32 |
% |
Net
expenses3,4,5
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
Net
investment income |
|
|
2.48 |
|
|
|
2.30 |
|
|
|
2.34 |
|
|
|
2.50 |
|
|
|
2.80 |
|
|
|
|
|
| |
Portfolio turnover
rate |
|
|
36 |
% |
|
|
8 |
% |
|
|
10 |
% |
|
|
19 |
% |
|
|
9 |
% |
1 |
Per
share amounts have been calculated using the average shares method.
|
2 |
Performance
figures may reflect compensating balance arrangements, fee waivers and/or
expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return
would have been lower. Past performance is no guarantee of future results.
|
3 |
Does
not include fees and expenses of the Underlying Funds in which the Fund
invests. |
4 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class I shares did not exceed 0.25%. This expense
limitation arrangement cannot be terminated prior to December 31,
2024 without the Board of Trustees’ consent. |
5 |
Reflects
fee waivers and/or expense reimbursements.
|
|
| |
100 |
|
Franklin
Multi-Asset Allocation Funds |
[This
page intentionally left blank.]
Appendix: Waivers and Discounts Available from Certain
Service Agents
The
availability of certain sales charge waivers and discounts will depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Financial intermediaries may have different policies and
procedures regarding the availability of front‑end sales load waivers or
contingent deferred (back‑end) sales load waivers, which are discussed below. In
all instances, it is the purchaser’s responsibility to notify the fund or the
purchaser’s financial intermediary at the time of purchase of any relationship
or other facts qualifying the purchaser for sales charge waivers or discounts.
For waivers and discounts not available through a particular financial
intermediary, shareholders will have to purchase fund shares directly from the
fund or through another financial intermediary to receive these waivers or
discounts.
The
information below has been provided by the named financial intermediaries.
Please contact the applicable financial intermediary with any questions
regarding how it applies the policies described below and for assistance in
determining whether you may qualify for a particular sales charge waiver or
discount.
MERRILL LYNCH
Effective
June 30, 2020, shareholders purchasing fund shares through a Merrill Lynch
platform or account will be eligible only for the following load waivers
(front‑end sales charge waivers and contingent deferred, or back‑end, sales
charge waivers) and discounts, which may differ from those disclosed elsewhere
in this fund’s Prospectus or SAI.
Front‑end Sales Load
Waivers on Class A Shares available at Merrill Lynch
• |
|
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the plan |
• |
|
Shares
purchased by a 529 Plan (does not include 529 Plan units or 529‑specific
share classes or equivalents) |
• |
|
Shares
purchased through a Merrill Lynch affiliated investment advisory program
|
• |
|
Shares
exchanged due to the holdings moving from a Merrill Lynch affiliated
investment advisory program to a Merrill Lynch brokerage (non‑advisory)
account pursuant to Merrill Lynch’s policies relating to sales load
discounts and waivers |
• |
|
Shares
purchased by third party investment advisors on behalf of their advisory
clients through Merrill Lynch’s platform |
• |
|
Shares
of funds purchased through the Merrill Edge Self-Directed platform (if
applicable) |
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
• |
|
Shares
exchanged from Class C (i.e. level-load) shares of the same fund
pursuant to Merrill Lynch’s policies relating to sales load discounts and
waivers |
• |
|
Employees
and registered representatives of Merrill Lynch or its affiliates and
their family members |
• |
|
Directors
or Trustees of the fund, and employees of the fund’s investment adviser or
any of its affiliates, as described in this Prospectus
|
• |
|
Eligible
shares purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within 90 days following
the redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front‑end or
deferred sales load (known as Rights of Reinstatement). Automated
transactions (i.e. systematic purchases and withdrawals) and purchases
made after shares are automatically sold to pay Merrill Lynch’s account
maintenance fees are not eligible for reinstatement
|
CDSC Waivers on A, B and
C Shares available at Merrill Lynch
• |
|
Death
or disability of the shareholder |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus |
• |
|
Return
of excess contributions from an IRA Account |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts pursuant to the Internal Revenue Code |
• |
|
Shares
sold to pay Merrill Lynch fees but only if the transaction is initiated by
Merrill Lynch |
• |
|
Shares
acquired through a right of reinstatement |
• |
|
Shares
held in retirement brokerage accounts, that are exchanged for a lower cost
share class due to transfer to certain fee based accounts or platforms
(applicable to A and C shares only) |
• |
|
Shares
received through an exchange due to the holdings moving from a Merrill
Lynch affiliated investment advisory program to a Merrill Lynch brokerage
(non‑advisory) account pursuant to Merrill Lynch’s policies relating to
sales load discounts and waivers |
Front‑end load Discounts
Available at Merrill Lynch: Breakpoints, Rights of Accumulation &
Letters of Intent
• |
|
Breakpoints
as described in this Prospectus. |
• |
|
Rights
of Accumulation (ROA) which entitle shareholders to breakpoint discounts
as described in the fund’s Prospectus will be automatically calculated
based on the aggregated holding of fund family assets held by accounts
(including 529 program holdings, where applicable) within the
|
|
|
|
| |
A‑1 |
|
| |
Franklin
Multi-Asset Allocation Funds |
|
purchaser’s household at Merrill Lynch.
Eligible fund family assets not held at Merrill Lynch may be included in
the ROA calculation only if the shareholder notifies his or her financial
advisor about such assets |
• |
|
Letters
of Intent (LOI) which allow for breakpoint discounts based on anticipated
purchases within a fund family, through Merrill Lynch, over a 13‑month
period of time (if applicable) |
AMERIPRISE FINANCIAL
Class A Shares
Front‑End Sales Charge Waivers Available at Ameriprise Financial:
The
following information applies to Class A share purchases if you have an
account with or otherwise purchase fund shares through Ameriprise Financial:
Effective
January 15, 2021, shareholders purchasing fund shares through an Ameriprise
Financial retail brokerage account are eligible for the following front‑end
sales charge waivers, which may differ from those disclosed elsewhere in this
fund’s Prospectus or SAI:
• |
|
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs or SAR‑SEPs.
|
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the same fund family). |
• |
|
Shares
exchanged from Class C shares of the same fund in the month of or
following the 7‑year anniversary of the purchase date. To the extent that
this Prospectus elsewhere provides for a waiver with respect to exchanges
of Class C shares or conversions of Class C shares following a
shorter holding period, that waiver will apply. |
• |
|
Employees
and registered representatives of Ameriprise Financial or its affiliates
and their immediate family members. |
• |
|
Shares
purchased by or through qualified accounts (including IRAs, Coverdell
Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and
defined benefit plans) that are held by a covered family member, defined
as an Ameriprise Financial advisor and/or the advisor’s spouse, advisor’s
lineal ascendant (mother, father, grandmother, grandfather, great
grandmother, great grandfather), advisor’s lineal descendant (son,
step‑son, daughter, step-daughter, grandson, granddaughter, great
grandson, great granddaughter) or any spouse of a covered family member
who is a lineal descendant. |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front‑end or
deferred sales load (i.e. Rights of Reinstatement).
|
MORGAN STANLEY WEALTH
MANAGEMENT
Front‑end Sales Charge
Waivers on Class A Shares available at Morgan Stanley Wealth Management:
Shareholders
purchasing Fund shares through a Morgan Stanley Wealth Management brokerage
account will be eligible only for the following front‑end sales charge waivers
with respect to Class A shares, which may differ from and may be more
limited than those disclosed elsewhere in this Fund’s Prospectus or SAI.
• |
|
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR‑SEPs or Keogh plans
|
• |
|
Morgan
Stanley employee and employee-related accounts according to Morgan
Stanley’s account linking rules |
• |
|
Shares
purchased through reinvestment of dividends and capital gains
distributions when purchasing shares of the same fund
|
• |
|
Shares
purchased through a Morgan Stanley self-directed brokerage account
|
• |
|
Class C
(i.e., level-load) and Class C2 shares, as applicable, that are no
longer subject to a contingent deferred sales charge and are converted to
Class A shares of the same fund pursuant to Morgan Stanley Wealth
Management’s share class conversion program |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (i) the repurchase occurs within 90 days’ following the
redemption, (ii) the redemption and purchase occur in the same
account, and (iii) redeemed shares were subject to a front‑end or
deferred sales charge. |
• |
|
Morgan
Stanley, on your behalf, can convert Class P shares, as applicable,
to Class A shares, generally on a tax‑free basis, without clients
being subject to a front‑end sales charge. |
In
addition, effective November 12, 2021, for the purpose of calculating
rights of accumulation and letters of intent with respect to purchases made in a
Morgan Stanley Wealth Management brokerage account, the following definition for
“Eligible Purchases” applies. This definition may be more limited than the one
contained in this Fund’s Prospectus or SAI. It is the shareholder’s
responsibility to inform Morgan Stanley at the time of purchase of any
relationship, holdings, or other facts qualifying the purchaser for a discount.
Morgan Stanley can ask for documentation of such circumstance. Shareholders
should contact Morgan Stanley if they have questions.
|
|
|
|
|
| |
Franklin Multi-Asset Allocation
Funds |
|
| |
|
A‑2 |
|
Eligible Purchases
include:
• |
|
Any
class of shares of any Franklin Templeton or Legg Mason fund that is
registered in the U.S.; and |
• |
|
Units
of a Section 529 Plan where Franklin Templeton or Legg Mason is the
program manager. |
For
purposes of this section, Franklin Templeton and Legg Mason funds also include
BrandywineGLOBAL funds, ClearBridge Investments funds, Martin Currie funds,
Western Asset funds and certain other funds managed by affiliated investment
advisers. They do not include the funds in the Franklin Templeton Variable
Insurance Products Trust, Legg Mason Partners Variable Equity Trust or Legg
Mason Partners Variable Income Trust.
RAYMOND JAMES &
ASSOCIATES, INC., RAYMOND JAMES FINANCIAL SERVICES, INC. AND EACH ENTITY’S
AFFILIATES (“RAYMOND JAMES”)
Effective
March 1, 2019, shareholders purchasing fund shares through a Raymond James
platform or account, or through an introducing broker-dealer or independent
registered investment adviser for which Raymond James provides trade execution,
clearance, and/or custody services, are eligible only for the following load
waivers (front‑end sales charge waivers and contingent deferred, or back‑end,
sales charge waivers) and discounts, which may differ from those disclosed
elsewhere in this fund’s Prospectus or SAI.
Front‑End Sales Charge
Waivers on Class A Shares Available at Raymond James
• |
|
Shares
purchased in an investment advisory program. |
• |
|
Shares
purchased within the same fund family through a systematic reinvestment of
capital gains distributions and dividend reinvestment when purchasing
shares of the same fund (but not any other fund within the fund family).
|
• |
|
Employees
and registered representatives of Raymond James or its affiliates and
their family members as designated by Raymond James.
|
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs with 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front‑end or
deferred sales load (known as Rights of Reinstatement).
|
• |
|
A
shareholder in the fund’s Class C shares will have their shares
converted at net asset value to Class A shares (or the appropriate
share class) of the fund if the shares are no longer subject to a
contingent deferred sales charge and the conversion is in line with the
policies and procedures of Raymond James. |
Contingent Deferred Sales
Charge Waivers on Class A and Class C Shares Available at Raymond
James
• |
|
Death
or disability of the shareholder. |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus. |
• |
|
Return
of excess contributions from an IRA Account. |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on
applicable IRS regulations as described in the fund’s Prospectus.
|
• |
|
Shares
sold to pay Raymond James fees but only if the transaction is initiated by
Raymond James. |
• |
|
Shares
acquired through a right of reinstatement. |
Front‑End Load Discounts
Available at Raymond James: Breakpoints, Rights of Accumulation, and/or Letters
of Intent
• |
|
Breakpoints
as described in the fund’s Prospectus. |
• |
|
Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated
holding of the fund family assets held by accounts within the purchaser’s
household at Raymond James. Eligible fund family assets not held at
Raymond James may be included in the calculation of rights of accumulation
only if the shareholder notifies his or her financial advisor about such
assets. |
• |
|
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family over a 13‑month time period. Eligible fund
family assets not held at Raymond James may be included in the calculation
of letters of intent only if the shareholder notifies his or her financial
advisor about such assets. |
EDWARD JONES
Policies Regarding
Transactions Through Edward Jones:
Effective
on or after January 1, 2021, the following information supersedes prior
information with respect to transactions and positions held in fund shares
through an Edward Jones system. Clients of Edward Jones (also referred to as
“shareholders”) purchasing fund shares on the Edward Jones commission and
fee‑based platforms are eligible only for the following sales charge discounts
(also referred to as “breakpoints”) and waivers, which can differ from discounts
and waivers described elsewhere in the mutual fund Prospectus or statement of
additional information (“SAI”) or through another broker-dealer. In all
instances, it is the shareholder’s responsibility to inform Edward Jones at the
time of purchase of any relationship, holdings of the Franklin Templeton and
Legg Mason Funds (including holdings of 529 Plans where Franklin Templeton or
Legg Mason serve as the primary distributor), or other facts qualifying the
purchaser for discounts or waivers. Edward Jones can ask for documentation of
such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
|
|
|
| |
A‑3 |
|
| |
Franklin
Multi-Asset Allocation Funds |
Breakpoints
• |
|
Breakpoint
pricing, otherwise known as volume pricing, at dollar thresholds as
described in the Prospectus. |
Rights of Accumulation
(ROA)
• |
|
The
applicable sales charge on a purchase of Class A shares is determined
by taking into account all share classes (except certain money market
funds and any assets held in group retirement plans) of the Franklin
Templeton and Legg Mason Funds held by the shareholder or in an account
grouped by Edward Jones with other accounts for the purpose of providing
certain pricing considerations (“pricing groups”). If grouping assets as a
shareholder, this includes all share classes held on the Edward Jones
platform and/or held on another platform. The inclusion of eligible fund
family assets in the ROA calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Money
market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares
purchased with a sales charge. |
• |
|
The
employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to
establish or change ROA for the IRA accounts associated with the plan to a
plan-level grouping as opposed to including all share classes at a
shareholder or pricing group level. |
• |
|
ROA
is determined by calculating the higher of cost minus redemptions or
market value (current shares x NAV). |
Letter of Intent (LOI)
• |
|
Through
a LOI, shareholders can receive the sales charge and breakpoint discounts
for purchases shareholders intend to make over a 13‑month period from the
date Edward Jones receives the LOI. The LOI is determined by calculating
the higher of cost or market value of qualifying holdings at LOI
initiation in combination with the value that the shareholder intends to
buy over a 13‑month period to calculate the front‑end sales charge and any
breakpoint discounts. Each purchase the shareholder makes during that
13‑month period will receive the sales charge and breakpoint discount that
applies to the total amount. The inclusion of eligible fund family assets
in the LOI calculation is dependent on the shareholder notifying Edward
Jones of such assets at the time of calculation. Purchases made before the
LOI is received by Edward Jones are not adjusted under the LOI and will
not reduce the sales charge previously paid. Sales charges will be
adjusted if LOI is not met. |
• |
|
If
the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected
to establish or change ROA for the IRA accounts associated with the plan
to a plan-level grouping, LOIs will also be at the plan-level and may only
be established by the employer. |
Sales Charge Waivers
Sales
charges are waived for the following shareholders and in the following
situations:
• |
|
Associates
of Edward Jones and its affiliates and their family members who are in the
same pricing group (as determined by Edward Jones under its policies and
procedures) as the associate. This waiver will continue for the remainder
of the associate’s life if the associate retires from Edward Jones in
good-standing and remains in good standing pursuant to Edward Jones’
policies and procedures. |
• |
|
Shares
purchased in an Edward Jones fee‑based program. |
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment. |
• |
|
Shares
purchased from the proceeds of redeemed shares of the same fund family so
long as the following conditions are met: 1) the proceeds are from
the sale of shares within 60 days of the purchase, and 2) the sale
and purchase are made in the same share class and the same account or the
purchase is made in an individual retirement account with proceeds from
liquidations in a non‑retirement account. |
• |
|
Shares
exchanged into Class A shares from another share class so long as the
exchange is into the same fund and was initiated at the discretion of
Edward Jones. Edward Jones is responsible for any remaining CDSC due to
the fund company, if applicable. Any future purchases are subject to the
applicable sales charge as disclosed in the Prospectus.
|
• |
|
Exchanges
from Class C shares to Class A shares of the same fund,
generally, in the 84th month following the anniversary of the purchase
date or earlier at the discretion of Edward Jones.
|
Contingent Deferred Sales
Charge (CDSC) Waivers
If
the shareholder purchases shares that are subject to a CDSC and those shares are
redeemed before the CDSC is expired, the shareholder is responsible to pay the
CDSC except in the following conditions:
• |
|
The
death or disability of the shareholder. |
• |
|
Systematic
withdrawals with up to 10% per year of the account value.
|
• |
|
Return
of excess contributions from an Individual Retirement Account (IRA).
|
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts if the redemption is taken in or after the year the shareholder
reaches qualified age based on applicable IRS regulations.
|
• |
|
Shares
sold to pay Edward Jones fees or costs in such cases where the transaction
is initiated by Edward Jones. |
• |
|
Shares
exchanged in an Edward Jones fee‑based program. |
• |
|
Shares
acquired through NAV reinstatement. |
• |
|
Shares
redeemed at the discretion of Edward Jones for Minimum Balances, as
described below. |
|
| |
Franklin Multi-Asset Allocation
Funds |
|
A‑4 |
Other Important
Information Regarding Transactions Through Edward Jones
1.1 Minimum Purchase
Amounts
• |
|
Initial
purchase minimum: $250 |
• |
|
Subsequent
purchase minimum: none |
1.2 Minimum Balances
• |
|
Edward
Jones has the right to redeem at its discretion fund holdings with a
balance of $250 or less. The following are examples of accounts that are
not included in this policy: |
o A
fee‑based account held on an Edward Jones platform
o A
529 account held on an Edward Jones platform
o An
account with an active systematic investment plan or letter of intent (LOI)
1.3 Exchanging Share
Classes
• |
|
At
any time it deems necessary, Edward Jones has the authority to exchange at
NAV a shareholder’s holdings in a fund to Class A shares of the same
fund. |
JANNEY MONTGOMERY SCOTT
LLC (“JANNEY”)
Effective
May 1, 2020, if you purchase fund shares through a Janney brokerage
account, you will be eligible for the following load waivers (front‑end sales
charge waivers and contingent deferred sales charge (“CDSC”), or back‑end sales
charge, waivers) and discounts, which may differ from those disclosed elsewhere
in this fund’s Prospectus or SAI.
Front‑end sales charge*
waivers on Class A shares available at Janney
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family). |
• |
|
Shares
purchased by employees and registered representatives of Janney or its
affiliates and their family members as designated by Janney.
|
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within ninety (90) days
following the redemption, (2) the redemption and purchase occur in
the same account, and (3) redeemed shares were subject to a front‑end
or deferred sales load (i.e., right of reinstatement).
|
• |
|
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR‑SEPs or Keogh plans.
|
• |
|
Shares
acquired through a right of reinstatement. |
• |
|
Class C
shares that are no longer subject to a contingent deferred sales charge
and are converted to Class A shares of the same fund pursuant to
Janney’s policies and procedures. |
CDSC waivers on
Class A and C shares available at Janney
• |
|
Shares
sold upon the death or disability of the shareholder.
|
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus. |
• |
|
Shares
purchased in connection with a return of excess contributions from an IRA
account. |
• |
|
Shares
sold as part of a required minimum distribution for IRA and other
retirement accounts due to the shareholder reaching age 701⁄2 as described in the fund’s
Prospectus. |
• |
|
Shares
sold to pay Janney fees but only if the transaction is initiated by
Janney. |
• |
|
Shares
acquired through a right of reinstatement. |
• |
|
Shares
exchanged into the same share class of a different fund.
|
Front‑end sales charge*
discounts available at Janney: breakpoints, rights of accumulation, and/or
letters of intent
• |
|
Breakpoints
as described in the fund’s Prospectus. |
• |
|
Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated
holding of fund family assets held by accounts within the purchaser’s
household at Janney. Eligible fund family assets not held at Janney may be
included in the ROA calculation only if the shareholder notifies his or
her financial advisor about such assets. |
• |
|
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13‑month time period. Eligible fund
family assets not held at Janney Montgomery Scott may be included in the
calculation of letters of intent only if the shareholder notifies his or
her financial advisor about such assets. |
*Also
referred to as an “initial sales charge.”
|
|
|
| |
A‑5 |
|
| |
Franklin
Multi-Asset Allocation Funds |
OPPENHEIMER &
CO. INC.
Effective
May 15, 2020, shareholders purchasing fund shares through an
Oppenheimer & Co. Inc. (“OPCO”) platform or account are eligible only
for the following load waivers (front‑end sales charge waivers and contingent
deferred, or back‑end, sales charge waivers) and discounts, which may differ
from those disclosed elsewhere in this fund’s Prospectus or SAI.
Front‑end Sales Load
Waivers on Class A Shares available at OPCO
• |
|
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the plan |
• |
|
Shares
purchased by or through a 529 Plan |
• |
|
Shares
purchased through a OPCO affiliated investment advisory program
|
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front‑end or
deferred sales load (known as Rights of Restatement).
|
• |
|
A
shareholder in the fund’s Class C shares will have their shares
converted at net asset value to Class A shares (or the appropriate
share class) of the fund if the shares are no longer subject to a CDSC and
the conversion is in line with the policies and procedures of OPCO
|
• |
|
Employees
and registered representatives of OPCO or its affiliates and their family
members |
• |
|
Directors
or Trustees of the fund, and employees of the fund’s investment adviser or
any of its affiliates, as described in this Prospectus
|
CDSC Waivers on A, B and
C Shares available at OPCO
• |
|
Death
or disability of the shareholder |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus |
• |
|
Return
of excess contributions from an IRA Account |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on
applicable IRS regulations as described in the Prospectus
|
• |
|
Shares
sold to pay OPCO fees but only if the transaction is initiated by OPCO
|
• |
|
Shares
acquired through a right of reinstatement |
Front‑end load Discounts
Available at OPCO: Breakpoints, Rights of Accumulation & Letters of
Intent
• |
|
Breakpoints
as described in this Prospectus. |
• |
|
Rights
of Accumulation (ROA) which entitle shareholders to breakpoint discounts
will be automatically calculated based on the aggregated holding of fund
family assets held by accounts within the purchaser’s household at OPCO.
Eligible fund family assets not held at OPCO may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor
about such assets. |
BAIRD
Effective
June 15, 2020, shareholders purchasing fund shares through a Baird platform
or account will only be eligible for the following sales charge waivers
(front‑end sales charge waivers and CDSC waivers) and discounts, which may
differ from those disclosed elsewhere in this Prospectus or the SAI
Front‑End Sales Charge
Waivers on Class A‑shares Available at Baird
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund
|
• |
|
Shares
purchased by employees and registered representatives of Baird or its
affiliate and their family members as designated by Baird
|
• |
|
Shares
purchased from the proceeds of redemptions from another Legg
Mason-sponsored fund, provided (1) the repurchase occurs within 90
days following the redemption, (2) the redemption and purchase occur
in the same accounts, and (3) redeemed shares were subject to a
front‑end or deferred sales charge (known as rights of reinstatement)
|
• |
|
A
shareholder in the funds’ Class C Shares will have their share
converted at net asset value to Class A shares of the fund if the
shares are no longer subject to CDSC and the conversion is in line with
the policies and procedures of Baird |
• |
|
Employer-sponsored
retirement plans or charitable accounts in a transactional brokerage
account at Baird, including 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans. For purposes of this provision, employer-sponsored
retirement plans do not include SEP IRAs, Simple IRAs or SAR‑SEPs
|
CDSC Waivers on
Class A and C shares Available at Baird
• |
|
Shares
sold due to death or disability of the shareholder
|
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus |
|
| |
Franklin Multi-Asset Allocation
Funds |
|
A‑6 |
• |
|
Shares
bought due to returns of excess contributions from an IRA Account
|
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on
applicable Internal Revenue Service regulations as described in the Fund’s
Prospectus |
• |
|
Shares
sold to pay Baird fees but only if the transaction is initiated by Baird
|
• |
|
Shares
acquired through a right of reinstatement |
Front‑End Sales Charge
Discounts Available at Baird: Breakpoints and/or Rights of Accumulations
• |
|
Breakpoints
as described in this Prospectus |
• |
|
Rights
of accumulations which entitles shareholders to breakpoint discounts will
be automatically calculated based on the aggregated holding of Legg
Mason-sponsored fund assets held by accounts within the purchaser’s
household at Baird. Eligible Legg Mason-sponsored fund assets not held at
Baird may be included in the rights of accumulations calculation only if
the shareholder notifies his or her financial advisor about such assets
|
• |
|
Letters
of Intent (LOI) allow for breakpoint discounts based on anticipated
purchases of Legg Mason-sponsored funds through Baird, over a 13‑month
period of time |
WAIVERS SPECIFIC TO
STIFEL, NICOLAUS & COMPANY, INCORPORATED (“STIFEL”)
Effective
July 1, 2020, shareholders purchasing fund shares through a Stifel platform
or account or who own shares for which Stifel or an affiliate is the
broker-dealer of record are eligible for the following additional sales charge
waiver.
Front‑end Sales Load
Waiver on Class A Shares
• |
|
Class C
shares that have been held for more than seven (7) years will be
converted to Class A shares of the same fund pursuant to Stifel’s
policies and procedures. All other sales charge waivers and reductions
described elsewhere in the fund’s Prospectus or Statement of Additional
Information (“SAI”) still apply. |
PFS INVESTMENTS INC.
(“PFSI”)
Policies Regarding Fund
Purchases on the PSS Platform
The
following information supersedes all prior information with respect to
transactions and positions held in fund shares purchased through PFSI and held
on the mutual fund platform of its affiliate, Primerica Shareholder Services
(“PSS”). Clients of PFSI (also referred to as “shareholders”) purchasing fund
shares on the PSS platform are eligible only for the following share classes,
sales charge discounts (also referred to as “breakpoints”) and waivers, which
can differ from share classes, discounts and waivers described elsewhere in this
prospectus or the related statement of additional information (“SAI”) or through
another broker-dealer. In all instances, it is the shareholder’s responsibility
to inform PFSI at the time of a purchase of all holdings of the Franklin
Templeton and Legg Mason Funds on the PSS platform, or other facts qualifying
the purchaser for discounts or waivers. PFSI may request reasonable
documentation of such facts and condition the granting of any discount or waiver
on the timely receipt of such documents. Shareholders should contact PSS if they
have questions regarding their eligibility for these discounts and waivers.
Share Classes
Shareholders
purchasing fund shares on the PSS platform are eligible only for the following
share classes:
• |
|
Class A
shares are available in non‑retirement accounts, individual retirement
accounts (IRA), SEP IRAs, SIMPLE IRAs, Keogh Plans, and all other account
types. |
• |
|
Class A1
and Class C shares are available only in accounts that already hold
such shares. |
Breakpoints
• |
|
Breakpoint
pricing at dollar thresholds as described in the prospectus of the fund
you are purchasing. |
Rights of Accumulation
(“ROA”)
• |
|
The
applicable sales charge on a purchase of Class A or Class A1
shares is determined by taking into account all share classes (except any
assets held in group retirement plans) of the Franklin Templeton and Legg
Mason Funds held by the shareholder on the PSS platform. The inclusion of
eligible fund family assets in the ROA calculation is dependent on the
shareholder notifying PFSI of such assets at the time of calculation.
Shares of money market funds are included only if such shares were
acquired in exchange for shares of another Franklin Templeton or Legg
Mason Fund purchased with a sales charge. No shares of the Franklin
Templeton and Legg Mason Funds held by the shareholder away from the PSS
platform, will be granted ROA with shares of any Franklin Templeton or
Legg Mason Fund purchased on the PSS platform. |
• |
|
Any
SEP IRA plan, any SIMPLE IRA plan or any Payroll Deduction Plan (“PDP”) on
the PSS platform will be defaulted to plan-level grouping for purposes of
ROA, which allows each participating employee ROA with all other eligible
shares held in plan accounts on the PSS platform. At any time, a
participating employee may elect to exercise a one‑time option to change
grouping for purposes of ROA to shareholder- level grouping, which allows
the plan account of the electing employee ROA with her other eligible
holdings on the PSS platform, but not with all other eligible
|
|
|
|
| |
A‑7 |
|
| |
Franklin
Multi-Asset Allocation Funds |
participant
holdings in the plan. Eligible shares held in plan accounts electing
shareholder-level grouping will not be available for purposes of ROA to plan
accounts electing plan-level grouping.
• |
|
ROA
is determined by calculating the higher of cost minus redemptions or
current market value (current shares x NAV). |
Letter of Intent (“LOI”)
• |
|
By
executing a LOI, shareholders can receive the sales charge and breakpoint
discounts for purchases shareholders intend to make over a 13‑month period
through PFSI, from the date PSS receives the LOI. The purchase price of
the LOI is determined by calculating the higher of cost or market value of
qualifying holdings at LOI initiation in combination with the dollar
amount the shareholder intends to invest over a 13‑month period to arrive
at total investment for purposes of determining any breakpoint discount
and the applicable front‑end sales charge. Each purchase the shareholder
makes during that 13‑month period will receive the sales charge and
breakpoint discount that applies to the projected total investment.
|
• |
|
Only
holdings of Franklin Templeton and Legg Mason Funds on the PSS platform
are eligible for inclusion in the LOI calculation and the shareholder must
notify PFSI of all eligible assets at the time of calculation.
|
• |
|
Purchases
made before the LOI is received by PSS are not adjusted under the LOI, and
the LOI will not reduce any sales charge previously paid. Sales charges
will be automatically adjusted if the total purchases required by the LOI
are not met. |
• |
|
If
an employer maintaining a SEP IRA plan, SIMPLE IRA or non‑IRA PDP plan on
the PSS platform has elected to establish or change ROA for the IRA
accounts associated with the plan to a plan-level grouping, LOIs will also
be at the plan-level and may only be established by the employer. LOIs are
not available to PDP IRA plans on the PSS platform with plan-level
grouping for purposes of ROA, but are available to any participating
employee that elects shareholder-level grouping for purposes of ROA.
|
Sales Charge Waivers
Sales
charges are waived for the following shareholders and in the following
situations:
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment. |
• |
|
Shares
purchased with the proceeds of redeemed shares of either the Franklin
Templeton or Legg Mason fund families so long as the following conditions
are met: 1) the proceeds are from the sale of shares within 90 days of the
purchase, 2) the sale and purchase are made in the same share class and
the same account or the purchase is made in an individual retirement
account with proceeds from liquidations in a non‑retirement account, and
3) the redeemed shares were subject to a front‑end or deferred sales load.
Automated transactions (i.e., systematic purchases and withdrawals), full
or partial transfers or rollovers of retirement accounts, and purchases
made after shares are automatically sold to pay account maintenance fees
are not eligible for this sales charge waiver. |
• |
|
Shares
exchanged into Class A or Class A1 shares from another share
class so long as the exchange is into the same fund and was initiated at
the discretion of PFSI. PFSI is responsible for any remaining CDSC due to
the fund company, if applicable. Any future purchases are subject to the
applicable sales charge as disclosed in the prospectus.
|
Policies Regarding Fund
Purchases That Are Not Held on the PSS Platform
Class R
shares are available through PFSI only in 401(k) plans covering a business owner
with no employees, commonly referred to as a one‑participant 401(k) plan or solo
401(k) and which are not held on the PSS platform.
D.A. DAVIDSON
Effective
September 1, 2021, shareholders purchasing Fund shares including existing
Fund shareholders through a D.A. Davidson &. Co. (“D.A. Davidson”)
platform or account, or through an introducing broker-dealer or independent
registered investment advisor for which D.A. Davidson provides trade execution,
clearance, and/or custody services, will be eligible for the following sales
charge waivers (front‑end sales charge waivers and contingent deferred, or
back‑end, sales charge waivers) and discounts, which may differ from those
disclosed elsewhere in this Prospectus or the Fund’s SAI.
Front‑End Sales Charge
Waivers on Class A Shares available at D.A. Davidson
• |
|
Shares
purchased within the same fund family through a systematic reinvestment of
capital gains and dividend distributions. |
• |
|
Employees
and registered representatives of D.A. Davidson or its affiliates and
their family members as designated by D.A. Davidson.
|
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front‑end or
deferred sales charge (known as Rights of Reinstatement).
|
• |
|
A
shareholder in the Fund’s Class C Shares will have their shares
converted at net asset value to Class A Shares (or the appropriate
share class) of the Fund if the shares are no longer subject to a CDSC and
the conversion is consistent with D.A. Davidson’s policies and procedures.
|
CDSC Waivers on
Class A and Class C Shares available at D.A. Davidson
• |
|
Death
or disability of the shareholder. |
|
| |
Franklin Multi-Asset Allocation
Funds |
|
A‑8 |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the Fund’s
prospectus. |
• |
|
Return
of excess contributions from an IRA account. |
• |
|
Shares
sold as part of a required minimum distribution for IRA or other
qualifying retirement accounts pursuant to the Internal Revenue Code.
|
• |
|
Shares
acquired through a right of reinstatement. |
Front‑end sales charge
discounts available at D.A. Davidson: breakpoints, rights of accumulation and/or
letters of intent
• |
|
Breakpoints
as described in this Prospectus. |
• |
|
Rights
of accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at D.A. Davidson.
Eligible fund family assets not held at D.A. Davidson may be included in
the calculation of rights of accumulation only if the shareholder notifies
his or her financial advisor about such assets. |
• |
|
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13‑month time period. Eligible fund
family assets not held at D.A. Davidson may be included in the calculation
of letters of intent only if the shareholder notifies his or her financial
advisor about such assets. |
|
|
|
| |
A‑9 |
|
| |
Franklin
Multi-Asset Allocation Funds |
Legg Mason Funds Privacy and Security Notice
Your Privacy Is Our
Priority
Franklin
Templeton* is committed to safeguarding your personal information . This notice
is designed to provide you with a summary of the non‑public personal information
Franklin Templeton may collect and maintain about current or former individual
investors; our policy regarding the use of that information; and the measures we
take to safeguard the information. We do not sell individual investors’
non‑public personal information to anyone and only share it as described in this
notice.
Information We Collect
When
you invest with us, you provide us with your non‑public personal information. We
collect and use this information to service your accounts and respond to your
requests. The non‑public personal information we may collect falls into the
following categories:
• |
|
Information
we receive from you or your financial intermediary on applications or
other forms, whether we receive the form in writing or electronically. For
example, this information may include your name, address, tax
identification number, birth date, investment selection, beneficiary
information, and your personal bank account information and/or email
address if you have provided that information. |
• |
|
Information
about your transactions and account history with us, or with other
companies that are part of Franklin Templeton, including transactions you
request on our website or in our app. This category also includes your
communications to us concerning your investments.
|
• |
|
Information
we receive from third parties (for example, to update your address if you
move, obtain or verify your email address or obtain additional information
to verify your identity). |
• |
|
Information
collected from you online, such as your IP address or device ID and data
gathered from your browsing activity and location. (For example, we may
use cookies to collect device and browser information so our website
recognizes your online preferences and device information.) Our website
contains more information about cookies and similar technologies and ways
you may limit them. |
• |
|
Other
general information that we may obtain about you such as demographic
information. |
Disclosure Policy
To
better service your accounts and process transactions or services you requested,
we may share non‑public personal information with other Franklin Templeton
companies. From time to time we may also send you information about
products/services offered by other Franklin Templeton companies although we will
not share your non‑public personal information with these companies without
first offering you the opportunity to prevent that sharing.
We
will only share non‑public personal information with outside parties in the
limited circumstances permitted by law. For example, this includes situations
where we need to share information with companies who work on our behalf to
service or maintain your account or process transactions you requested, when the
disclosure is to companies assisting us with our own marketing efforts, when the
disclosure is to a party representing you, or when required by law (for example,
in response to legal process). Additionally, we will ensure that any outside
companies working on our behalf, or with whom we have joint marketing
agreements, are under contractual obligations to protect the confidentiality of
your information, and to use it only to provide the services we asked them to
perform.
Confidentiality and
Security
Our
employees are required to follow procedures with respect to maintaining the
confidentiality of our investors’ non‑public personal information. Additionally,
we maintain physical, electronic and procedural safeguards
to
protect the information. This includes performing ongoing evaluations of our
systems containing investor information and making changes when appropriate.
At
all times, you may view our current privacy notice on our website at
franklintempleton.com or contact us for a copy at (800) 632‑2301.
* |
For
purposes of this privacy notice Franklin Templeton shall refer to the
following entities: |
Fiduciary
Trust International of the South (FTIOS), as custodian for individual retirement
plans
Franklin
Advisers, Inc.
Franklin
Distributors, LLC, including as program manager of the Franklin Templeton 529
College Savings Plan and the NJBEST 529 College Savings Plan
Franklin
Mutual Advisers, LLC
Franklin,
Templeton and Mutual Series Funds
Franklin
Templeton Institutional, LLC
Franklin
Templeton Investments Corp., Canada
Franklin
Templeton Investments Management, Limited UK
Franklin
Templeton Portfolio Advisors, Inc.
Legg
Mason Funds serviced by Franklin Templeton Investor Services, LLC
Templeton
Asset Management, Limited
Templeton
Global Advisors, Limited
Templeton
Investment Counsel, LLC
If
you are a customer of other Franklin Templeton affiliates and you receive
notices from them, you will need to read those notices separately.
|
THIS PAGE IS
NOT PART OF THE PROSPECTUS |
Franklin Multi-Asset Allocation Funds
Franklin Multi-Asset
Growth Fund
Franklin Multi-Asset
Moderate Growth Fund
Franklin Multi-Asset
Conservative Growth Fund
Franklin Multi-Asset
Defensive Growth Fund
You
may visit www.franklintempleton.com/mutualfundsliterature for a free copy of a
Prospectus, Statement of Additional Information (“SAI”) or an Annual or
Semi-Annual Report.
Shareholder
reports Additional information about a
fund’s investments is available in the fund’s Annual and Semi-Annual Reports to
shareholders. In the fund’s Annual Report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund’s performance during its last fiscal year. The independent registered
public accounting firm’s report and financial statements in the fund’s Annual
Report are incorporated by reference into (are legally a part of) this
Prospectus.
Each
fund sends only one report to a household if more than one account has the same
last name and same address. Contact your Service Agent or the fund if you do not
want this policy to apply to you.
Statement of
additional information The SAI provides
more detailed information about the funds and is incorporated by reference into
(is legally a part of) this Prospectus.
You
can make inquiries about the funds or obtain shareholder reports or the SAI
(without charge) by contacting your Service Agent, by calling the funds at
877‑6LM‑FUND/656‑3863, or by writing to the funds at Legg Mason Funds, P.O. Box
33030, St. Petersburg, FL 33733-8030.
Reports
and other information about the funds are available on the EDGAR Database on the
Securities and Exchange Commission’s Internet site at
http://www.sec.gov. Copies of this information may be obtained for a
duplicating fee by electronic request at the following E‑mail address:
[email protected].
If
someone makes a statement about the funds that is not in this Prospectus, you
should not rely upon that information. Neither the funds nor the Distributor is
offering to sell shares of a fund to any person to whom the fund may not
lawfully sell its shares.
(Investment
Company Act
file
no. 811‑06444)