Simplified Prospectus

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Templeton

Templeton Asian Growth Fund Templeton Asian Growth Corporate Class Templeton BRIC Corporate Class Templeton Canadian Balanced Fund Templeton Canadian Stock Fund Templeton Canadian Stock Corporate Class Templeton EAFE Developed Markets Fund Templeton Emerging Markets Fund Templeton Emerging Markets Corporate Class Templeton Frontier Markets Fund

Templeton Frontier Markets Corporate Class Templeton Global Balanced Fund Templeton Global Bond Fund Templeton Global Bond Fund (Hedged) Templeton Global Bond Hedged Yield Class Templeton Global Smaller Companies Fund Templeton Global Smaller Companies Corporate Class Templeton Growth Fund, Ltd.

Templeton Growth Corporate Class Templeton International Stock Fund Templeton International Stock Corporate Class Franklin

Franklin Flex Cap Growth Fund Franklin Flex Cap Growth Corporate Class Franklin High Income Fund

Franklin Income Fund Franklin Income Corporate Class Franklin Income Hedged Corporate Class Franklin Strategic Income Fund Franklin U.S. Core Equity Fund Franklin U.S. Rising Dividends Fund Franklin U.S. Rising Dividends Corporate Class Franklin U.S. Rising Dividends Hedged Corporate Class Franklin World Growth Fund

Franklin World Growth Corporate Class Franklin Bissett

Franklin Bissett All Canadian Focus Fund Franklin Bissett All Canadian Focus Corporate Class Franklin Bissett Bond Fund

Franklin Bissett Bond Corporate Class Franklin Bissett Bond Yield Class

Franklin Bissett Canadian All Cap Balanced Fund Franklin Bissett Canadian All Cap Balanced Corporate Class Franklin Bissett Canadian Balanced Fund

Franklin Bissett Canadian Balanced Corporate Class Franklin Bissett Canadian Dividend Fund

Franklin Bissett Canadian Dividend Corporate Class Franklin Bissett Canadian Equity Fund

Franklin Bissett Canadian Equity Corporate Class Franklin Bissett Canadian High Dividend Fund Franklin Bissett Canadian High Dividend Corporate Class Franklin Bissett Canadian Short Term Bond Fund Franklin Bissett Canadian Short Term Bond Yield Class Franklin Bissett Corporate Bond Fund

Franklin Bissett Corporate Bond Yield Class Franklin Bissett Dividend Income Fund Franklin Bissett Dividend Income Corporate Class Franklin Bissett Energy Corporate Class Franklin Bissett Microcap Fund Franklin Bissett Money Market Fund Franklin Bissett Money Market Corporate Class Franklin Bissett Money Market Yield Class Franklin Bissett Small Cap Fund Franklin Bissett Small Cap Corporate Class Franklin Bissett Strategic Income Fund Franklin Bissett Strategic Income Corporate Class Franklin Bissett Treasury Bill Fund

Franklin Bissett U.S. Focus Fund Franklin Bissett U.S. Focus Corporate Class Franklin Mutual Series

Franklin Mutual U.S. Shares Fund (formerly Franklin Mutual Beacon Fund)

Franklin Mutual U.S. Shares Corporate Class

(formerly Franklin Mutual Beacon Corporate Class)

Franklin Mutual Global Discovery Fund Franklin Mutual Global Discovery Corporate Class Franklin Templeton Solutions

Franklin Quotential Balanced Growth Portfolio Franklin Quotential Balanced Growth Corporate

Class Portfolio

Franklin Quotential Balanced Income Portfolio Franklin Quotential Balanced Income Corporate

Class Portfolio

Franklin Quotential Diversified Equity Portfolio (formerly Franklin Quotential Global Growth Portfolio)

Franklin Quotential Diversified Equity Corporate Class Portfolio (formerly Franklin Quotential Global Growth Corporate Class Portfolio)

Franklin Quotential Diversified Income Portfolio Franklin Quotential Diversified Income Corporate

Class Portfolio

Franklin Quotential Growth Portfolio

Franklin Quotential Growth Corporate Class Portfolio

Franklin Templeton Canadian Core Equity Fund Franklin Templeton Canadian Large Cap Fund Franklin Templeton Investments Corp.

5000 Yonge Street, Suite 900 Toronto, ON, M2N 0A7

Client Services: 416.364.4672 Fax: 416.364.1163

Client Services Toll-free: 1.800.387.0830 Toll-free Fax: 1.866.850.8241 www.franklintempleton.ca

Additional information about the Funds and Portfolios is available in the Funds’ and Portfolios’ annual information form, fund facts, management reports of fund performance and financial statements. These documents are incorporated by reference into this simplified prospectus, which means that they legally form part of this document just as if they were printed as sections of it.

You can get a free copy of any or all of these documents, from your dealer, by calling toll-free 1-800-387-0830 or by contacting us at [email protected].

These documents and other information about the Funds and Portfolios, such as information circulars and material contracts, are also available at www.franklintempleton.ca or at www.sedar.com.

Templeton

Templeton Asian Growth Fund (Series O units) Templeton Asian Growth Corporate Class

(Series A, F, I and O shares)

Templeton BRIC Corporate Class (Series A, F, I and O shares) Templeton Canadian Balanced Fund

(Series A, F, O and T units) Templeton Canadian Stock Fund Templeton Canadian Stock Corporate Class Templeton EAFE Developed Markets Fund

Templeton Emerging Markets Fund (Series A, F, I and O units) Templeton Emerging Markets Corporate Class

Templeton Frontier Markets Fund (Series O units) Templeton Frontier Markets Corporate Class Templeton Global Balanced Fund

(Series A, F, O, S, T and T-USD units)

Templeton Global Bond Fund (Series A, F, I and O units) Templeton Global Bond Fund (Hedged)

(Series A, F, I and O units)

Templeton Global Bond Hedged Yield Class (Series A, F, I, O, R, S and T shares) Templeton Global Smaller Companies Fund

Templeton Global Smaller Companies Corporate Class (Series A, F, I and O shares)

Templeton Growth Fund, Ltd. (Series A, A (Hedged), F, I and O shares) Templeton Growth Corporate Class

(Series A, F, I and O shares) Templeton International Stock Fund

(Series A, F, I, O and T units)

Templeton International Stock Corporate Class (Series A, F, I, O and T shares)

Franklin

Franklin Flex Cap Growth Fund Franklin Flex Cap Growth Corporate Class Franklin High Income Fund (Series A, F, I and O units) Franklin Income Fund (Series A, F, I, O, R, S, T and T-USD units) Franklin Income Corporate Class

(Series A, F, I, O, R, S, T and T-USD shares) Franklin Income Hedged Corporate Class

(Series A, F, I, O, R, S and T shares)

Franklin Strategic Income Fund (Series A, F, I and O units) Franklin U.S. Core Equity Fund

Franklin U.S. Rising Dividends Fund (Series A, F, O and T units)

Franklin U.S. Rising Dividends Corporate Class (Series A, F, O and T shares)

Franklin U.S. Rising Dividends Hedged Corporate Class (Series A, F, O and T shares)

Franklin World Growth Fund (Series A, F, O and T units) Franklin World Growth Corporate Class

(Series A, F, O and T shares)

Franklin Bissett

Franklin Bissett All Canadian Focus Fund (Series A, F, I and O units)

Franklin Bissett All Canadian Focus Corporate Class (Series A, F, I and O shares)

Franklin Bissett Bond Fund (Series A, F, I and O units)

Franklin Bissett Bond Corporate Class (Series A, F, I and O shares) Franklin Bissett Bond Yield Class (Series A, F, I and O shares) Franklin Bissett Canadian All Cap Balanced Fund

Franklin Bissett Canadian All Cap Balanced Corporate Class (Series A, F, I, O and T shares)

Franklin Bissett Canadian Balanced Fund (Series A, F, I, O and T units)

Franklin Bissett Canadian Balanced Corporate Class (Series A, F, O and T shares)

Franklin Bissett Canadian Dividend Fund Franklin Bissett Canadian Dividend Corporate Class

(Series A, F, I, O, R, S and T shares)

Franklin Bissett Canadian Equity Fund(Series A, F, I and O units) Franklin Bissett Canadian Equity Corporate Class

(Series A, F, I, O, R and T shares)

Franklin Bissett Canadian High Dividend Fund (Series A, F, I and O units)

Franklin Bissett Canadian High Dividend Corporate Class (Series A, F, I, O and T shares)

Franklin Bissett Canadian Short Term Bond Fund Franklin Bissett Canadian Short Term Bond Yield Class

Franklin Bissett Corporate Bond Fund (Series A, F, I and O units) Franklin Bissett Corporate Bond Yield Class

(Series A, F, I, O and T shares) Franklin Bissett Dividend Income Fund

Franklin Bissett Dividend Income Corporate Class (Series A, F, I, O and T shares)

Franklin Bissett Energy Corporate Class Franklin Bissett Microcap Fund

Franklin Bissett Money Market Fund(Series A, F, I and O units) Franklin Bissett Money Market Corporate Class

Franklin Bissett Money Market Yield Class (Series A, F, I and O shares)

Franklin Bissett Small Cap Fund Franklin Bissett Small Cap Corporate Class Franklin Bissett Strategic Income Fund

Franklin Bissett Strategic Income Corporate Class (Series A, F, I, O, R, S and T shares)

Franklin Bissett Treasury Bill Fund (Series A, F, I and O units) Franklin Bissett U.S. Focus Fund (Series O units) Franklin Bissett U.S. Focus Corporate Class

Franklin Mutual Series

Franklin Mutual U.S. Shares Fund (formerly Franklin Mutual Beacon Fund) (Series A, F, I, O and T units)

Franklin Mutual U.S. Shares Corporate Class (formerly Franklin Mutual Beacon Corporate Class) (Series A, F, I, O and T shares)

Franklin Mutual Global Discovery Fund (Series A, F, I, O, T and T-USD units)

Franklin Mutual Global Discovery Corporate Class (Series A, F, I, O, T and T-USD shares)

Franklin Templeton Solutions

Franklin Quotential Balanced Growth Portfolio (Series A, F, I, O, R, S and T units)

Franklin Quotential Balanced Growth Corporate Class Portfolio (Series A, F, I, O, R, S and T shares)

Franklin Quotential Balanced Income Portfolio (Series A, F, I, O, R, S and T units)

Franklin Quotential Balanced Income Corporate Class Portfolio (Series A, F, I, O, R, S and T shares)

Franklin Quotential Diversified Equity Portfolio (formerly Franklin Quotential Global Growth Portfolio) (Series A, F, I, O, R, T and T-USD units)

Franklin Quotential Diversified Equity Corporate Class Portfolio (formerly Franklin Quotential Global Growth Corporate Class Portfolio) (Series A, F, I, O, R, S, T and T-USD shares)

Franklin Quotential Diversified Income Portfolio (Series A, F, I, O, S and T units)

Franklin Quotential Diversified Income Corporate Class Portfolio (Series A, F, I, O, R, S, T and T-USD shares)

Franklin Quotential Growth Portfolio (Series A, F, I, O, R and T units)

Franklin Quotential Growth Corporate Class Portfolio (Series A, F, I, O, S and T shares)

Franklin Templeton Canadian Core Equity Fund (Series O units) Franklin Templeton Canadian Large Cap Fund (Series O units)

Offering Series A, F and O units or shares, except where indicated. No securities regulatory authority has expressed an opinion about these units and shares. It is an offence to claim otherwise. The Funds and the securities offered under this prospectus are not registered with the United States Securities and Exchange Commission and they are sold in the United States only in reliance on exemptions from registration.

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1 INTRODUCTION

2 WHAT IS A MUTUAL FUND AND WHAT ARE THE RISKS OF INVESTING IN A MUTUAL FUND? 2 What is a mutual fund?

2 The value of a mutual fund 2 The risks of investing in mutual funds

2 Different kinds of mutual funds have different kinds of risks 3 Equity risk

3 Foreign investment risk 3 Interest rate risk 3 Emerging markets risk 3 Smaller companies risk 3 Liquidity risk 3 Low-rated security risk 4 Regulatory risk 4 Credit risk 4 Reinvestment risk 4 Concentration risk 4 Capital depletion risk 4 Derivative risk

4 Repurchase/reverse repurchase agreements risk 4 Securities lending risk

5 Short selling risk 5 Underlying fund risk 5 Asset allocation risk 5 Portfolio management risk 5 Series risk

5 Corporate class fund risk 5 Large investor risk 5 Specialization risk 5 Tracking risk

6 Asset-backed and mortgage-backed securities risk 6 Tax risk

7 ORGANIZATION AND MANAGEMENT OF THE FRANKLIN TEMPLETON INVESTMENTS FUNDS AND PORTFOLIOS

8 Fund on Fund Structures

9 PURCHASES, SWITCHES AND REDEMPTIONS 9 Classes and Series

11 The price of a Fund or Portfolio

12 Opening a Franklin Templeton Investments Account 12 How to buy, switch or redeem Funds and Portfolios 12 Buying Funds and Portfolios

13 How to Switch to other Funds or Portfolios 13 How to Switch to another Series 14 Switch fees

14 Processing your switch order 14 Redeeming Funds or Portfolios

16 General information on processing purchases, switches and redemptions

17 OPTIONAL SERVICES 17 Systematic investment program 17 Systematic withdrawal program (SWP) 17 Automatic rebalancing service 18 Registered plans

19 FEES AND EXPENSES

19 Fees and expenses payable by the Fund or Portfolio 27 Fees and expenses payable directly by you 28 Impact of sales charges

29 DEALER COMPENSATION 29 Sales commissions 29 Trailing commissions 31 Inter-company service fee 31 Marketing support programs

32 DEALER COMPENSATION FROM MANAGEMENT FEES 32 INCOME TAX CONSIDERATIONS FOR INVESTORS 32 For Funds or Portfolios held in a registered plan 33 For Funds or Portfolios not held in a registered plan 34 Dispositions and Switches of Funds or Portfolios not held

in a registered plan

35 ADDITIONAL INFORMATION

35 Notice with respect to the Managed Yield Class Funds

40 Templeton Asian Growth Fund 42 Templeton Asian Growth Corporate Class 43 Templeton BRIC Corporate Class 44 Templeton Canadian Balanced Fund 45 Templeton Canadian Stock Fund 46 Templeton Canadian Stock Corporate Class 47 Templeton EAFE Developed Markets Fund 48 Templeton Emerging Markets Fund 49 Templeton Emerging Markets Corporate Class 50 Templeton Frontier Markets Fund 52 Templeton Frontier Markets Corporate Class 53 Templeton Global Balanced Fund 55 Templeton Global Bond Fund 56 Templeton Global Bond Fund (Hedged) 58 Templeton Global Bond Hedged Yield Class 60 Templeton Global Smaller Companies Fund 62 Templeton Global Smaller Companies Corporate Class 63 Templeton Growth Fund, Ltd.

65 Templeton Growth Corporate Class 66 Templeton International Stock Fund 68 Templeton International Stock Corporate Class FRANKLIN

71 Franklin Flex Cap Growth Fund 72 Franklin Flex Cap Growth Corporate Class 73 Franklin High Income Fund

75 Franklin Income Fund 77 Franklin Income Corporate Class 78 Franklin Income Hedged Corporate Class 80 Franklin Strategic Income Fund 82 Franklin U.S. Core Equity Fund 83 Franklin U.S. Rising Dividends Fund 85 Franklin U.S. Rising Dividends Corporate Class 86 Franklin U.S. Rising Dividends Hedged Corporate Class 87 Franklin World Growth Fund

89 Franklin World Growth Corporate Class

FRANKLIN BISSETT

91 Franklin Bissett All Canadian Focus Fund 92 Franklin Bissett All Canadian Focus Corporate Class 93 Franklin Bissett Bond Fund

95 Franklin Bissett Bond Corporate Class 96 Franklin Bissett Bond Yield Class

98 Franklin Bissett Canadian All Cap Balanced Fund 100 Franklin Bissett Canadian All Cap Balanced

Corporate Class

101 Franklin Bissett Canadian Balanced Fund 102 Franklin Bissett Canadian Balanced Corporate Class 103 Franklin Bissett Canadian Dividend Fund 104 Franklin Bissett Canadian Dividend Corporate Class 105 Franklin Bissett Canadian Equity Fund

106 Franklin Bissett Canadian Equity Corporate Class 107 Franklin Bissett Canadian High Dividend Fund 108 Franklin Bissett Canadian High Dividend

Corporate Class

109 Franklin Bissett Canadian Short Term Bond Fund 111 Franklin Bissett Canadian Short Term Bond Yield Class 113 Franklin Bissett Corporate Bond Fund

115 Franklin Bissett Corporate Bond Yield Class 117 Franklin Bissett Dividend Income Fund 118 Franklin Bissett Dividend Income Corporate Class 119 Franklin Bissett Energy Corporate Class 120 Franklin Bissett Microcap Fund 121 Franklin Bissett Money Market Fund 122 Franklin Bissett Money Market Corporate Class 123 Franklin Bissett Money Market Yield Class 125 Frankin Bissett Small Cap Fund 126 Franklin Bissett Small Cap Corporate Class 127 Franklin Bissett Strategic Income Fund 129 Franklin Bissett Strategic Income Corporate Class 131 Franklin Bissett Treasury Bill Fund

132 Franklin Bissett U.S. Focus Fund 133 Franklin Bissett U.S. Focus Corporate Class FRANKLIN MUTUAL SERIES

135 Franklin Mutual U.S. Shares Fund (formerly Franklin Mutual Beacon Fund)

137 Franklin Mutual U.S. Shares Corporate Class (formerly Franklin Mutual Beacon Corporate Class) 138 Franklin Mutual Global Discovery Fund 140 Franklin Mutual Global Discovery Corporate Class

FRANKLIN TEMPLETON SOLUTIONS

142 Franklin Quotential Balanced Growth Portfolio 144 Franklin Quotential Balanced Growth Corporate Class

Portfolio

146 Franklin Quotential Balanced Income Portfolio 148 Franklin Quotential Balanced Income Corporate

Class Portfolio

150 Franklin Quotential Diversified Equity Portfolio (formerly Franklin Quotential Global Growth Portfolio) 152 Franklin Quotential Diversified Equity Corporate Class Portfolio (formerly Franklin Quotential Global Growth Corporate Class Portfolio)

154 Franklin Quotential Diversified Income Portfolio 156 Franklin Quotential Diversified Income Corporate

Class Portfolio

158 Franklin Quotential Growth Portfolio

160 Franklin Quotential Growth Corporate Class Portfolio 162 Franklin Templeton Canadian Core Equity Fund 163 Franklin Templeton Canadian Large Cap Fund 164 GLOSSARY

164 Book value

164 Capping a Fund or Portfolio or series of a Fund or Portfolio

164 Class

164 Closing a Fund or Portfolio or series of a Fund or Portfolio 164 Corporate Class Funds

165 Deferred sales charge option 165 Dealers

165 Equities, stocks, or shares 165 Fixed income securities 165 Front-load option 165 Low-load option 165 Managed Yield Class Funds 165 Management expense ratio (MER) 165 Money market securities 165 Portfolio turnover rate

166 Franklin Quotential Portfolios or Portfolios 166 Series

166 Term

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Introduction

In this document, we, us, Manager and Franklin Templeton Investments each refers to Franklin Templeton Investments Corp., the manager of the Franklin Templeton Investments Funds and Franklin Quotential Portfolios (which we refer to generally as the “Funds” and “Portfolios”), and you refers to anyone who invests or is interested in investing in the Funds and Portfolios.

This prospectus contains selected important information to help you make informed decisions about investing in the Funds and Portfolios and to help you understand your rights as a mutual fund investor.

This document is divided into two parts. The first part, from page 1 to page 35, contains general information that applies to all Funds and Portfolios. The second part, from page 36 to page 163, provides specific information about each Fund and Portfolio described in this document.

Additional information about each Fund and Portfolio is available in the following documents:

the annual information form (“AIF”); the most recently filed Fund Facts;

the most recently filed annual financial statements;

any interim financial statements filed after the annual financial statements;

L O O K F O R T H E S E B O X E S

To make this document and our Funds and Portfolios even easier to understand, we have included educational material about the Funds and Portfolios. When you see a box like this one, look for supplementary details about the information in the main text.

the most recently filed annual management report of fund performance; and

any interim management report of fund performance filed after that annual management report of fund performance.

These documents are incorporated by reference into this prospectus, which means that they legally form part of this document, just as if they were printed as a part of this document.

You can request a free copy of any or all of these documents: from your Dealer

by calling toll-free 1-800-387-0830

by contacting us at [email protected]

These documents and other information about the Funds and Portfolios are also available on our website at www.franklintempleton.ca or at www.sedar.com.

T H E P R O S P E C T U S A N D T H E A I F

The prospectus provides you with information you will need to make an informed investment decision. The AIF provides additional information for investors, such as details about the manager of the Funds and Portfolios, the operations of the Funds and Portfolios, and the directors, officers and trustee of the Funds and Portfolios. Like our prospectus, the AIF is written in plain language. If you would like a copy, let us know.

Bowne of Toronto 708177-2. Eng Intro.qxp Revision 4 Tuesday, May 27, 2014 7:26 AM

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2 F r a n k l i n T e m p l e t o n i n v e s t m e n t s

What is a mutual fund and

what are the risks of

investing in a mutual fund?

The Funds and the Portfolios described in this prospectus are all mutual funds.

What is a mutual fund?

A mutual fund is a pool of money contributed by people with similar investment objectives. A fund is managed by investment professionals who select the securities that are held by the fund. Investors in a fund share the fund’s income, expenses, and any gains and losses the fund makes on its investments in proportion to the units they own.

By owning units of a mutual fund, investors can have the kind of diversification and professional investment management that is normally only available to institutional investors and wealthy individuals.

The value of a mutual fund

The value of a mutual fund is its net asset value (NAV). We calculate the NAV of each series of each Fund and Portfolio. The NAV of each series is determined by taking the series’ proportionate share of all of the assets of the Fund or the Portfolio (the cash and securities in its portfolio), subtracting the series’ liabilities and the series’ proportionate share of common liabilities, and dividing by the total number of units of that series that are outstanding.

The risks of investing in mutual funds

Mutual funds own different types of investments, depending on their investment objectives. The value of the investments a mutual fund owns will vary from day to day, reflecting changes in interest rates, economic conditions, and market and company news. As a result, the value of a mutual fund’s units may go up and down, and the value of your investment in a mutual fund may be more or less when you redeem it than when you purchased it.

The full amount of your investment in any Fund or Portfolio is not guaranteed. Unlike bank accounts or GICs, mutual fund units and shares are not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer.

In certain exceptional circumstances, a mutual fund may suspend redemptions. We describe these circumstances on page 14 under

Redeeming Funds or Portfolios.

Different kinds of mutual funds have

different kinds of risks

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What is a mutual fund and what are the risks of investing in a mutual fund?

We describe the most common risks associated with all of the Funds and Portfolios first. Risks that are specific to fewer Funds or Portfolios, or that affect only a small portion of investments held within a Fund or Portfolio, are described later.

E Q U I T Y R I S K

The value of Funds that invest in equity securities, also called stocks or shares, will be affected by changes in the market price of those securities. The value of Top Funds, whose underlying funds invest in equity securities, will also be affected.

The price of a share is influenced by the outlook for the company that issued it and by general economic, industry and market trends. When the economy is strong, the outlook for many companies will be good, and share prices will generally rise. So will the value of mutual funds that own these shares. On the other hand, share prices usually decline with a general economic or industry downturn.

F O R E I G N I N V E S T M E N T R I S K

Includes:

Fo re i g n e q u i t y r i s k

The value of foreign securities may be influenced by the policies of foreign governments and by political, economic or social instability. There may be less information about foreign companies than Canadian firms and there may be lower standards of government supervision and regulation in foreign financial markets. A Fund or Portfolio that holds these securities may have difficulty enforcing legal rights in jurisdictions outside Canada.

Fo re i g n c u r re n c y r i s k

The value of securities issued in foreign currencies, or of securities that pay income in foreign currencies, is affected by changes in the value of the Canadian dollar relative to those currencies. As a result, currency fluctuations may indirectly affect the value of a Fund’s investments and, in turn, may also adversely affect the value of Fund securities held by an investor. For example, if the U.S. dollar rises relative to the Canadian dollar, U.S. shares will be worth more in Canadian dollars. On the other hand, if the U.S. dollar falls, U.S. shares will be worth less in Canadian dollars.

Funds or series whose strategy includes currency hedging will seek to minimize this risk. To the extent that a Fund does not hedge its foreign currency risk, the value of that Fund’s assets and income could be adversely affected by currency exchange rate movements.

Fo re i g n c u r re n c y h e d g i n g r i s k

Certain Funds will invest in derivatives, such as forward contracts, to attempt to eliminate the effect of changes in exchange rates, however there is no guarantee that attempts to hedge currency risk will be successful and no hedging strategy can eliminate currency risk entirely. There may be an imperfect historical correlation between the behavior of the derivative instrument and the currency being hedged. Any historical correlation may not continue for the period during which the hedge is in place. In addition, the inability to close out derivative positions could prevent the Fund from investing in derivatives to effectively hedge its currency exposure. Should a hedging strategy be incomplete or unsuccessful, the value of that Fund’s assets and income can remain vulnerable to fluctuations in currency exchange rates. There may be circumstances in which a

hedging transaction may reduce currency gains that would otherwise arise in the valuation of the relevant Fund. The gains or losses on and the costs of such hedging transactions will accrue solely to the relevant series of the Funds.

I N T E R E S T R A T E R I S K

The interest rate on a bond is set when it is issued. When interest rates fall, the price of existing bonds will rise because existing bonds pay higher rates than new bonds, and are therefore worth more. On the other hand, when interest rates rise, the price of existing bonds will fall. The value of Funds that invest in bonds will be affected by changes in interest rates and so will the value of Top Funds whose underlying funds hold such bonds. The value of debt securities that pay a floating or variable rate of interest are generally less price sensitive to interest rate changes. Funds that invest in convertible securities also carry interest rate risk. These securities provide a fixed income stream, so their value varies inversely with interest rates, just like bond prices. However, because they can be converted into common shares, convertible securities are less affected by interest rate fluctuations than bonds.

E M E R G I N G M A R K E T S R I S K

In emerging market countries, securities markets may be smaller than in more developed countries, making it more difficult to sell securities in order to take profits or avoid losses. Companies in these markets may have limited product lines, markets or resources, making it difficult to measure the value of the company. Political instability and possible corruption, as well as lower standards of regulation for business practices increase the possibility of fraud and other legal problems. The value of Funds that buy these investments and of Top Funds holding underlying funds that buy such

investments may rise and fall substantially.

S M A L L E R C O M P A N I E S R I S K

The share price of smaller companies is usually more volatile than that of more established larger companies. Smaller companies may be developing new products which have not yet been tested in the marketplace or their products may quickly become obsolete. They may have limited resources, including limited access to funds or unproven management, and may trade less frequently and in smaller volume than shares of large companies. They may have few shares outstanding, so a sale or purchase of shares will have a greater impact on the share price. The value of Top Funds, whose underlying funds buy these investments, may rise and fall substantially.

L I Q U I D I T Y R I S K

Illiquid securities are securities with a limited trading market. They may be difficult to value accurately or to sell, and may trade at a price significantly lower than their value. The value of Top Funds, whose underlying funds buy these investments, may rise and fall substantially. To mitigate this risk, a mutual fund is restricted from purchasing additional illiquid securities if more than 10% of its assets based on market value are already invested in illiquid securities.

L O W - R A T E D S E C U R I T Y R I S K

Some investments offer a better return than others because they carry higher risk. They may have a credit rating below investment grade or be unrated. These investments may be hard to value because market quotations are unavailable, and they may be less

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liquid than higher-grade investments. They have the potential for substantial loss as well as gain, as will the Top Funds that hold Funds, which invest in low-rated securities.

R E G U L A T O R Y R I S K

Some industries, such as health care and telecommunications, are heavily-regulated and may receive government funding. Investments in these sectors may be substantially affected by changes in government policy, such as deregulation or reduced government funding. The value of Top Funds, whose underlying funds buy these investments, may rise and fall substantially.

C R E D I T R I S K

This is the risk that an issuer of a bond or other fixed income security will not be able to pay interest or repay the principal when it is due. This risk is generally lower if the issuer has a high credit rating from an independent credit rating agency while it is generally higher if the issuer has a low credit rating or no credit rating. The prices of securities with lower ratings tend to fluctuate more than prices of securities with higher ratings.

R E I N V E S T M E N T R I S K

A Fund that invests in bonds and other fixed income securities may carry the risk that interest income or principal repayments from the Fund’s investments will be reinvested at lower interest rates in the event of a declining rate environment.

C O N C E N T R A T I O N R I S K

A Fund that has invested a larger portion of its assets in a single issuer may be less diversified and may experience larger fluctuations in value as a result of the price volatility of that issuer. In addition, the Fund may not be able to sell its full investment in that issuer at current prices if there is a shortage of buyers willing to purchase those securities. Consequently, it could be more difficult for the Fund to obtain a reasonable price for that issuer’s securities. To mitigate this risk, subject to certain exceptions, a mutual fund is restricted from purchasing additional securities if more than 10% of its assets based on market value are already invested in an issuer. Certain of the Funds have received an exemption from this restriction.

C A P I T A L D E P L E T I O N R I S K

Certain Funds, as well as Series R, S, T and T-USD units of the Funds and Portfolios, may make distributions comprised in whole or in part, of return of capital. A return of capital distribution reduces the amount of your original investment and may result in the return to you of the entire amount of your original investment. This distribution should not be confused with “yield” or “income”. Return of capital distributions that are not reinvested will reduce the net asset value of the Fund or Portfolio, which could reduce the Fund’s or Portfolio’s ability to generate future distributions.

D E R I V A T I V E R I S K

Although derivatives are often used by mutual funds to avoid risk, they have their own kinds of risk. Any Fund or Portfolio that invests in derivatives, or that holds other Funds, which invest in derivatives would also be subject to these risks:

The use of derivatives for hedging may not be effective. Some derivatives may limit a Fund’s or Portfolio’s potential for

gain as well as loss.

The cost of entering and maintaining derivative contracts may reduce the Fund’s or Portfolio’s total return to investors.

The price of a derivative may not accurately reflect the value of the underlying currency or security. This could prevent the Fund or Portfolio from making a profit or limiting its losses.

When entering into a derivative contract, a Fund or Portfolio may be required to deposit funds or securities with the counterparty. If the counterparty goes bankrupt, the Fund or Portfolio could lose or be delayed in recovering these deposits. If a Fund or Portfolio gives a security interest to the counterparty, it may be enforced against the fund’s assets.

There is no guarantee a market will exist when a Fund or Portfolio wants to close its derivative contract. This could prevent the Fund or Portfolio from making a profit or limiting its losses. The exchanges on which the derivatives are traded may set daily trading limits, preventing a Fund or Portfolio from closing out a contract.

If derivatives are being traded on foreign markets, it may be more difficult and take longer to complete the transaction. Foreign derivatives can also be more risky than derivatives traded on North American markets.

If the other party to a derivative contract is unable to meet its obligations, the Fund or Portfolio may experience a loss. To minimize this risk, the Fund or Portfolio will select counterparties with a credit rating at least as high as the minimum credit rating required under securities legislation.

Where a market change is expected, a Fund or Portfolio may not be able to find a suitable counterparty against which to hedge the market risk

R E P U R C H A S E / R E V E R S E R E P U R C H A S E A G R E E M E N T S R I S K

A repurchase agreement involves selling a security at one price and simultaneously agreeing to buy it back at a fixed price. A reverse repurchase agreement involves buying a security at one price and simultaneously agreeing to sell it back at a higher price. A Fund or Portfolio may suffer a loss if the other party to the agreement becomes insolvent. The value of the purchased securities may drop or the value of the sold securities may rise between the time the other party becomes insolvent and the time the Fund or Portfolio recovers its investment. The Fund or Portfolio reduces this risk by holding enough of the other party’s securities or cash as collateral to cover its commitments in the agreements. This means the Fund or Portfolio will never have to borrow to meet its obligations under the agreements. To limit the risks associated with repurchase and reverse repurchase transactions, the Funds or Portfolios require the other party to put up collateral the value of which must be at least 102% of the market value of the security sold (for a repurchase transaction) or cash loaned (for a reverse repurchase transaction). The value of the collateral is confirmed and reset daily. A Fund or Portfolio cannot lend more than 50% of the total value of its assets through securities lending or repurchase transactions.

S E C U R I T I E S L E N D I N G R I S K

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What is a mutual fund and what are the risks of investing in a mutual fund?

daily to ensure this level is maintained, the collateral may only consist of cash, qualified securities or securities that can be immediately converted into identical securities to those that have been loaned, a Fund or Portfolio cannot lend more than 50% of the total value of its assets through securities lending or repurchase transactions and a Fund’s or Portfolio’s total exposure to any one borrower in securities, derivative transactions and securities lending must be less than 10% of the total value of the Fund’s or Portfolio’s assets.

S H O R T S E L L I N G R I S K

Certain Funds may engage in a limited amount of short selling. A short sale is where a Fund borrows securities from a lender and sells them in the open market (“short sale”). The Fund must repurchase the securities at a later date in order to return them to the lender. In the interim, the proceeds from the short sale are deposited with the lender and the Fund pays interest to the lender on the borrowed securities. If the value of the securities declines between the time of the initial short sale and the time it repurchases and returns the securities, the Fund makes a profit for the difference (less any interest paid by the Fund to the lender). If the price of the borrowed securities rises, however, a loss to the Fund results. There are risks associated with short selling, namely that the borrowed securities will rise in value or not decline enough to cover the Fund’s borrowing costs. The Fund may also experience difficulties in repurchasing the borrowed securities if a liquid market for the securities does not exist. In addition, the lender from whom the Fund has borrowed securities may become bankrupt, causing the borrowing Fund to lose the collateral it deposited with the lender. To limit the risks associated with short sale transactions, a Fund will adhere to controls and limits that are intended to offset these risks by short selling only securities of larger issuers for which a liquid market is expected to be maintained and by limiting the amount of exposure for short sales. A Fund will also deposit collateral only with lenders that meet certain criteria for creditworthiness and only up to certain limits. Although some Top Funds may not engage in short selling directly, they may be exposed to short selling because the Underlying Funds in which they invest, or the Fund’s whose returns they track, may be engaged in short selling.

U N D E R L Y I N G F U N D R I S K

Franklin Templeton Investments Corp. and unaffiliated third parties may offer investment products which use a “fund on fund” structure whereby a Top Fund invests all or a significant portion of its assets in a “bottom” or “underlying fund”. Depending on the size of the investment being made by a Top Fund in an underlying fund and the timing of the redemption of this investment, an underlying fund could be forced to alter its portfolio assets significantly to accommodate a large redemption order. This could negatively impact the

performance of an underlying fund as it may have to dispose prematurely of portfolio assets that have not yet reached a desired market value, resulting in a loss to the underlying fund.

A S S E T A L L O C A T I O N R I S K

Funds and Portfolios that use a “fund on fund” structure allocate their assets among “underlying funds” with the goal of ensuring that the asset class, investment style, geographic and market capitalization allocation for each Fund or Portfolio is optimal. There can be no guarantee that a Fund or Portfolio will allocate its assets successfully. Similarly, there can be no guarantee against losses resulting from the asset allocation.

P O R T F O L I O M A N A G E M E N T R I S K

All actively managed mutual funds are dependent on their portfolio advisor(s) to select individual securities or other investments and, therefore, are subject to the risk that poor security selection or market allocation will cause a mutual fund to underperform relative to its benchmark or other mutual funds with similar investment objectives.

S E R I E S R I S K

All of the Funds and Portfolios are available in more than one series of units. Each series has its own fees and expenses which each Fund and each Portfolio tracks separately. If a Fund or Portfolio cannot pay the expenses of one series using that series’ proportionate share of the Fund or Portfolio assets, it may have to pay those expenses out of the other series’ proportionate share of the assets, which could lower the investment return of those other series.

C O R P O R A T E C L A S S F U N D R I S K

While the assets and liabilities of each Corporate Class Fund are tracked separately, Franklin Templeton Corporate Class Ltd. as a whole is responsible for all of the financial obligations of the Corporate Class Funds combined. If a Corporate Class Fund cannot pay its expenses using its proportionate share of the assets, Franklin Templeton Corporate Class Ltd. may have to pay those expenses out of the other Corporate Class Funds’ assets which could lower the investment return of those other Corporate Class Funds. As well, the tax consequences of an investment in a Corporate Class Fund will depend in part on the tax position of Franklin Templeton Corporate Class Ltd. as a whole and will differ from an investment in a mutual fund that is not part of a multi-class structure. Please see the Glossary on page 164 and Corporate Class Funds on page 13 for more

information on the Corporate Class Funds.

L A R G E I N V E S T O R R I S K

Securities of the Funds or Portfolios may be purchased and redeemed by large investors, such as financial institutions or other mutual funds. These investors may purchase or redeem large numbers of securities of a Fund or Portfolio at one time. The purchase or redemption of a substantial number of securities of a Fund or Portfolio may require the portfolio advisor to change the composition of a portfolio significantly or may force the portfolio advisor to buy or sell investments at unfavourable prices, which can affect Fund or Portfolio performance and may increase realized capital gains of the Fund or Portfolio.

S P E C I A L I Z A T I O N R I S K

Some funds specialize in investing in a particular industry or region of the world. This allows the portfolio advisor to focus on the potential of that industry or geographic area, but it also means that the fund may be more volatile if there is a downturn in the industry or the geographic area since there are relatively few other investments to offset the downturn. These specialty funds must continue to invest in a particular industry or geographic area even if it is performing poorly.

T R A C K I N G R I S K

Certain mutual funds (the “Tracking Funds”) may seek to have all or a substantial portion of their returns linked to the performance of units of one or more mutual fund(s) (the “Reference Fund”) by either directly purchasing the appropriate securities or by entering into forward contracts and other derivative instruments. The return (performance) of a Tracking Fund may be lower than that of its respective Reference Fund because the Tracking Fund bears its own

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fees and expenses, including the costs of any forward contracts and other derivatives that it may use to achieve its investment objectives. Additionally, there may be a delay between the time an investor buys units of a Tracking Fund and the time the Tracking Fund gets additional exposure to the Reference Fund. During this delay, the Tracking Fund may be unable to track the performance of its corresponding Reference Fund. Such performance lags and tracking errors could result in the unit or share price of the Tracking Fund not precisely tracking the unit or share price of its Reference Fund.

A S S E T - B A C K E D A N D M O R T G A G E - B A C K E D S E C U R I T I E S R I S K

Asset-backed securities are debt obligations that are backed by pools of consumer or business loans. Some asset-backed securities are short-term debt obligations, called asset-backed commercial paper (“ABCP”). Mortgage-backed securities are debt obligations backed by pools of mortgages on commercial or residential real estate. If there are changes in the market perception of the issuers of these types of securities, or in the creditworthiness of the parties involved, then the value of the securities may be affected. In addition, for ABCP, there is a risk that there may be a mismatch in timing between the cash flow of the underlying assets backing the security and the repayment obligation of the security upon maturity. In the use of mortgage-backed securities, there is also a risk that there may be a drop in the interest rates charged on the mortgages, a mortgagor may default on its obligations under a mortgage or there may be a drop in the value of the property secured by the mortgage.

T A X R I S K

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Organization and

management

of the

Franklin Templeton Investments

Funds and Portfolios

P O R T F O L I O A D V I S O R S

Except in respect of Franklin Templeton Canadian Core Equity Fund and Franklin Templeton Canadian Large Cap Fund, all of the portfolio advisors or sub-advisors are affiliates or part of the Manager. Acuity Investment Management Inc., Toronto, Ontario, is the sub-advisor to Franklin Templeton Canadian Core Equity Fund and Foyston, Gordon & Payne Inc., Toronto, Ontario, is the sub-advisor to Franklin Templeton Canadian Large Cap Fund.

The portfolio advisors manage the investment portfolios of the Funds and Portfolios. Franklin Bissett Investment Management is part of the Manager.

Some of the Funds use sub-advisors appointed by us to provide advice for a portion or for the entire portfolio. If a sub-advisor has been appointed, they are named in the “Fund Details” section for the Fund in the Fund Specific Information section of the prospectus.

Under securities law, we are required to advise you that where portfolio management services are provided by an advisor or sub-advisor located outside of Canada, it may be difficult to enforce any legal rights against them because all or substantially all of their assets are located outside of Canada.

International sub-advisors are not fully subject to the requirements of Canadian securities legislation and we are responsible for the investment advice provided by the following entities in their capacity as sub-advisors to the Funds: Templeton Global Advisors Limited, Templeton Asset Management Ltd., Franklin Advisers, Inc., Franklin Advisory Services, LLC, Franklin Mutual Advisers, LLC and Franklin Templeton Institutional, LLC. Franklin Advisers, Inc., Franklin Mutual Advisers, LLC and Franklin Templeton Institutional, LLC have received an exemption from the Commodity Futures Act (Ontario) (the “CFA”) registration requirements in respect of any trades made by the Funds they advise in commodity futures contracts and commodity futures options traded on commodity futures exchanges outside of Canada and cleared through clearing corporations outside of Canada. Accordingly, they will not be CFA registrants and the protections available to CFA registered clients will not be available to investors in the Funds they advise.

M A N A G E R

Franklin Templeton Investments Corp. 5000 Yonge Street

Suite 900 Toronto, Ontario M2N 0A7

The manager is responsible for the business and operation of the Funds and Portfolios. We provide all general administrative and management services, such as:

calculating net asset values and preparing financial statements

calculating and arranging for payment of distributions to investors and commissions to Dealers making regulatory and tax filings

providing or coordinating all other services required by the Funds and Portfolios office space, facilities and administrative support.

These services are offered to Series O and Series R investors under agreements between the investor and the Manager.

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Fund on Fund Structures

Each of the Top Funds invests in other mutual funds, including mutual funds managed by the Manager. Shareholders or unitholders of a Top Fund have no rights of ownership in the securities of the underlying fund(s). Where the Manager is the manager of both the Top Fund and the underlying funds in which the Top Fund invests,

I N D E P E N D E N T R E V I E W C O M M I T T E E

In accordance with National Instrument 81-107– Independent Review Committee for Mutual Funds, the Manager has established an Independent Review Committee (“IRC”) to provide impartial judgment on conflicts of interest matters related to the operations of the Funds and Portfolios.

The IRC prepares at least annually, a report of its activities for unitholders which is available on our website at www.franklintempleton.ca or, at your request and at no cost, by calling toll-free 1-800-387-0830 or by email at [email protected].

Currently, the members of the IRC are D. George Kelly (Chair), Bruce Galloway and Gary Norton. Additional information about the IRC is available in the Annual Information Form.

In certain circumstances, your approval may not be required under securities legislation to effect a fund merger provided that the IRC has approved such change and unitholders receive notice 60 days in advance of any such fund merger.

A U D I T O R

PricewaterhouseCoopers LLP Chartered Professional Accountants Toronto, Ontario

The auditor audits the annual financial statements of the Funds and the Portfolios.

Unitholder approval will not be required for a change in the auditor of a Fund or Portfolio provided the Independent Review Committee has approved such change and unitholders receive notice 60 days in advance of any such change in auditor.

T R U S T E E

Franklin Templeton Investments Corp. Toronto, Ontario

For Funds and Portfolios that are organized as trusts, the trustee holds title to the securities owned by the Funds and Portfolios on behalf of unitholders.

R E G I S T R A R A N D T R A N S F E R A G E N T

The registrar and transfer agent:

maintains account records of the owners of Fund and Portfolio units carries out all purchase, redemption, conversion and switch orders provides reporting and statements to investors and Dealers

C U S T O D I A N

Templeton Growth Fund, Ltd. Templeton Global Bond Fund

JPMorgan Chase Bank New York, New York

All Franklin Mutual Series Funds, Franklin Funds (other than Franklin World Growth Fund and Franklin World Growth Corporate Class), Templeton Global Balanced Fund and each of their respective Corporate Class Funds (where applicable)

CIBC Mellon Trust Company Toronto, Ontario

All other Funds and Portfolios

J.P. Morgan Bank Canada Toronto, Ontario

The custodian, or any sub-custodian it may appoint, has physical custody of the investments made for the Funds and Portfolios.

P R I N C I P A L D I S T R I B U T O R S

FTC Investor Services Inc. (“FTC ISI”) Toronto, Ontario

(for Series F, O, R and S units)

As the principal distributors, we and FTC ISI market the Funds and Portfolios and arrange for sale of their units through Dealers across Canada. We may retain companies to assist in the sale of the Funds and Portfolios under the deferred sales charge options.

it will not vote the securities of the underlying funds. The Manager is permitted to arrange for these securities to be voted by the beneficial unitholders of the applicable Top Fund. However, given the complexity and costs associated with implementing a flow-through voting structure, it is unlikely that we will arrange for a flow-through of voting rights.

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Purchases, switches

and redemptions

Classes and Series

In this prospectus, we use the term series of “units” of mutual fund trusts in a general way which includes series of “shares” of mutual fund corporations.

All of the Funds and Portfolios (other than Templeton Growth Fund, Ltd. and the Corporate Class Funds) are organized as mutual fund trusts. Templeton Growth Fund, Ltd. and Franklin Templeton Corporate Class Ltd. are mutual fund corporations.

The Corporate Class Funds are actually different classes of shares of Franklin Templeton Corporate Class Ltd. The Corporate Class Funds are structured to provide some potential tax benefits to investors when switching between Corporate Class Funds. See

Corporate Class Funds on page 13 and Income tax considerations for investors on page 32 for more details.

The Funds or Portfolios in this prospectus offer up to nine series of units – Series A, A (Hedged), F, I, O, R, S, T and T-USD. The table below sets out the availability of Funds and Portfolios in each series:

Series Funds or Portfolios Available Series Funds or Portfolios Available A All Funds and Portfolios

A

(Hedged) Templeton Growth Fund, Ltd. F All Funds and Portfolios

I Templeton Asian Growth Corporate Class Templeton BRIC Corporate Class Templeton Emerging Markets Fund Templeton Global Bond Fund Templeton Global Bond Fund (Hedged) Templeton Global Bond Hedged Yield Class

Templeton Global Smaller Companies Fund and its respective Corporate Class Fund

Templeton Growth Fund, Ltd. and its respective Corporate Class Fund Templeton International Stock Fund and its respective Corporate Class Fund Franklin High Income Fund

Franklin Income Fund and its respective Corporate Class Fund Franklin Income Hedged Corporate Class

Franklin Strategic Income Fund

Franklin Bissett All Canadian Focus Fund and its respective Corporate Class Fund

Franklin Bissett Bond Fund and its respective Corporate Class Fund Franklin Bissett Bond Yield Class

Franklin Bissett Canadian All Cap Balanced Fund and its respective Corporate Class Fund

Franklin Bissett Canadian Balanced Fund Franklin Bissett Canadian Dividend Corporate Class

Franklin Bissett Canadian Equity Fund and its respective Corporate Class Fund Franklin Bissett Canadian High Dividend Fund and its respective

Corporate Class Fund

Franklin Bissett Canadian Short Term Bond Yield Class Franklin Bissett Corporate Bond Fund

Franklin Bissett Corporate Bond Yield Class

Franklin Bissett Dividend Income Fund and its respective Corporate Class Fund

Franklin Bissett Money Market Fund and its respective Corporate Class Fund Franklin Bissett Money Market Yield Class

Franklin Bissett Strategic Income Fund Franklin Bissett Strategic Income Corporate Class Franklin Bissett Treasury Bill Fund

Franklin Mutual Global Discovery Fund and its respective Corporate Class Fund Franklin Mutual U.S. Shares Fund and its respective Corporate Class Fund Franklin Quotential Balanced Growth Portfolio

Franklin Quotential Balanced Growth Corporate Class Portfolio Franklin Quotential Balanced Income Portfolio

Franklin Quotential Balanced Income Corporate Class Portfolio Franklin Quotential Diversified Equity Portfolio

Franklin Quotential Diversified Equity Corporate Class Portfolio Franklin Quotential Diversified Income Portfolio

Franklin Quotential Diversified Income Corporate Class Portfolio Franklin Quotential Growth Portfolio

Franklin Quotential Growth Corporate Class Portfolio O All Funds and Portfolios

R Templeton Global Bond Hedged Yield Class

Franklin Bissett Canadian Dividend Corporate Class Franklin Bissett Canadian Equity Corporate Class Franklin Bissett Strategic Income Corporate Class Franklin Quotential Balanced Growth Portfolio

Franklin Quotential Diversified Equity Corporate Class Portfolio Franklin Quotential Growth Portfolio

Franklin Quotential Diversified Income Corporate Class Portfolio Bowne of Toronto 708177-2. Eng Intro.qxp Revision 4 Tuesday, May 27, 2014 7:26 AM

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A B O U T S E R I E S A , A ( H E D G E D ) , F , I , O , R , S , T A N D T - U S D U N I T S

For minimum investments required to purchase Series A, A (Hedged), F, I, O, R, S, T and T-USD units of the Funds or the Portfolios, please see Buying Funds and Portfolios and Minimum investments on page 12 for details. To determine which particular series of Funds or Portfolios is right for you, please see below.

S E R I E S A U N I T S

Series A units are available to all investors, subject to certain minimum investment requirements.

S E R I E S A ( H E D G E D ) U N I T S

Series A (Hedged) units are available to all investors who are interested in investing in Templeton Growth Fund, Ltd., subject to certain minimum investment requirements. Templeton Growth Fund, Ltd. holds a significant portion of securities traded in currencies (“Currencies of Investment”) other than the Canadian dollar. The value of such securities may decrease if the Currencies of Investment fall relative to the Canadian dollar. Therefore, a hedging strategy is employed by the Fund that seeks to reduce, as far as possible, the influence of changes in the exchange rate between the Canadian dollar and the currencies of securities held by Templeton Growth Fund, Ltd. on the portion of the Fund’s net assets attributable to the Series A (Hedged) units outstanding.

S E R I E S F U N I T S

Series F units are available to investors who qualify as Series F investors as determined by the Manager in its discretion, including: investors who participate in dealer-sponsored “fee-for-service” or

wrap programs and who pay their advisor an hourly fee or annual asset-based fee rather than commissions on each transaction investors whose Dealer is FTC Investor Services Inc. investors who purchase, sell or hold their securities through a

discount brokerage account

any other groups of investors for whom we do not incur distribution costs.

Investors wishing to purchase Series F units must also meet the minimum investment requirements.

Series F units are designed for investors participating in programs that do not require us to incur distribution costs in the form of trailing commissions to Dealers. We are able to reduce our management fee on the Series F units because our costs to distribute these units are lower.

Participation in Series F units is only available with the consent of your Dealer.

S

T

Templeton Global Balanced Fund Templeton Global Bond Hedged Yield Class

Franklin Bissett Canadian Dividend Corporate Class Franklin Bissett Strategic Income Corporate Class Franklin Quotential Balanced Growth Portfolio

Franklin Quotential Balanced Income Corporate Class Portfolio Franklin Quotential Diversified Equity Corporate Class Portfolio Franklin Quotential Diversified Income Portfolio

Franklin Quotential Diversified Income Corporate Class Portfolio Franklin Quotential Growth Corporate Class Portfolio Templeton Canadian Balanced Fund

Templeton Global Balanced Fund Templeton Global Bond Hedged Yield Class

Templeton International Stock Fund and its respective Corporate Class Fund Franklin Bissett Canadian All Cap Balanced Fund and its respective Corporate Class Fund

Franklin Bissett Canadian Balanced Fund and its respective Corporate Class Fund

Franklin Bissett Canadian Dividend Corporate Class Franklin Bissett Canadian Equity Corporate Class Franklin Bissett Canadian High Dividend Corporate Class Franklin Bissett Corporate Bond Yield Class

T

T-USD

Franklin Bissett Dividend Income Fund and its respective Corporate Class Fund Franklin Bissett Strategic Income Corporate Class

Franklin U.S. Rising Dividends Fund and its respective Corporate Class Fund Franklin U.S. Rising Dividends Hedged Corporate Class

Franklin World Growth Fund and its respective Corporate Class Fund Franklin Mutual Global Discovery Fund and its respective Corporate Class Fund Franklin Mutual U.S. Shares Fund and its respective Corporate Class Fund Franklin Quotential Balanced Growth Portfolio

Franklin Quotential Diversified Equity Corporate Class Portfolio Franklin Quotential Growth Portfolio

Franklin Quotential Diversified Income Portfolio

Franklin Quotential Diversified Income Corporate Class Portfolio Franklin Quotential Growth Corporate Class Portfolio Templeton Global Balanced Fund

Franklin Income Fund and its respective Corporate Class Fund

Franklin Mutual Global Discovery Fund and its respective Corporate Class Fund Franklin Quotential Diversified Equity Portfolio

Franklin Quotential Diversified Equity Corporate Class Portfolio Franklin Quotential Diversified Income Corporate Class Portfolio Series Funds or Portfolios Available Series Funds or Portfolios Available

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Purchases, switches and redemptions

S E R I E S I U N I T S

Series I units are available to investors who have in total invested a minimum of $100,000 with the Manager. The Series I units are designed for certain investors who have made an arrangement with their Dealer to purchase a series of units with reduced management fees because of the lower trailing commissions paid to Dealers on Series I units.

S E R I E S O U N I T S

Series O units are available to certain investors at the Manager’s discretion, including:

certain investors who invest at least $500,000, within a period of six months from initial purchase of Series O units, with the Manager

any related Funds and certain other third party mutual funds that use a fund on fund structure and who meet the Series O guidelines established by the Manager

the Corporate Class Funds that purchase units in the Underlying Funds to the Corporate Class Funds

Franklin Bissett Canadian Balanced Fund and Franklin Bissett Strategic Income Fund that each purchases units in a number of Funds

the Franklin Quotential Portfolios that purchase units in a number of Underlying Funds to Franklin Quotential Portfolios the counterparties to derivatives contracts entered into by

the Funds

directors and employees of the Funds, the Portfolios, the Manager or its affiliates

other specific classes of investors who meet the Series O guidelines established by the Manager.

To qualify to purchase Series O units, you must also have entered into a Series O unit agreement with the Manager.

S E R I E S R U N I T S

Series R units are designed for investors seeking regular monthly cash flows from a Portfolio. Monthly distributions for each Portfolio will consist of net income and/or a return of capital, which can either be reinvested in additional units or paid in cash (except for units held in a Franklin Templeton Investments registered plan which must be invested in additional units of the Fund or Portfolio). Any net income not distributed during the year, as well as capital gains, will be distributed annually in December and must be reinvested in additional units of the Portfolio.

Series R units are available to certain investors at the Manager’s discretion, including:

certain investors who invest at least $500,000, within a period of six months from initial purchase of Series R units, with the Manager

directors and employees of the Funds, the Portfolios, the Manager or its affiliates

other specific classes of investors who meet the Series R guidelines established by the Manager.

To qualify to purchase Series R units, you must also have entered into a Series R agreement with the Manager.

S E R I E S S U N I T S

Series S units are available to all investors subject to certain minimum investment requirements. Series S units are designed for investors seeking regular monthly cash flows from a Fund or Portfolio. Monthly distributions for each Fund or Portfolio will consist of net income and/or a return of capital, which can either be reinvested in additional units or paid in cash (except for units held in a Franklin Templeton

Investments registered plan which must be invested in additional units of the Fund or Portfolio). Any net income not distributed during the year, as well as capital gains, will be distributed annually in December and must be reinvested in additional units of the Fund or Portfolio. Series S units are available to investors who qualify as Series S investors as determined by the Manager in its discretion, including: investors who participate in dealer-sponsored “fee-for-service” or

wrap programs and who pay their advisor an hourly fee or annual asset-based fee rather than commissions on each transaction investors whose Dealer is FTC Investor Services Inc. investors who purchase, sell or hold their securities through a

discount brokerage account

any other groups of investors for whom we do not incur distribution costs.

Series S units are designed for investors participating in programs that do not require us to incur distribution costs in the form of trailing commissions to Dealers. We are able to reduce our management fee on the Series S units because our costs to distribute these units are lower.

Participation in Series S units is only available with our prior consent and the consent of your Dealer organization.

S E R I E S T U N I T S ( I N C L U D I N G S E R I E S T - U S D U N I T S )

Series T units are available to all investors, subject to certain minimum investment requirements. Series T units are designed for investors seeking regular monthly cash flows from a Fund or Portfolio. Monthly distributions for each Fund or Portfolio will consist of net income and/or a return of capital, which can either be reinvested in additional units or paid in cash (except for units held in a Franklin Templeton Investments registered plan which must be invested in additional units of the Fund or Portfolio). With our Flexible Series T solution, you also have the option of choosing to have a portion of your dividends or distributions paid out as cash and the remainder reinvested. Please speak with your investment advisor for more information on Flexible Series T. Any net income not distributed during the year, as well as capital gains, will be distributed annually in December and must be reinvested in additional units of the Fund or Portfolio.

Monthly distributions for Series T-USD are an amount fixed in U.S. dollars and will therefore not fluctuate based on the exchange rate of the Canadian dollar. Accordingly, the distributions for Series T-USD units and the net asset value (“NAV”) will differ from that of the Canadian dollar Series T units.

The price of a Fund or Portfolio

We calculate the net asset value (“NAV”) for each series of units of each Fund or Portfolio at the close of trading on The Toronto Stock Exchange (“TSX”) every business day (usually 4 p.m. ET). For Funds and Portfolios available in U.S. dollars, we calculate the NAV in Canadian dollars and convert it into U.S. dollars using that day’s exchange rate. Although Series T-USD units are denominated in Canadian dollars, the monthly distributions for Series T-USD units are an amount fixed in U.S. dollars and will therefore not fluctuate based on the exchange rate of the Canadian dollar. The distributions for Series T-USD units (and the NAV) will therefore differ from that of the Canadian dollar Series T units.

If we receive your transaction request in good order by the close of trading on the TSX, we will process your order at the NAV (and the exchange rate, if applicable) on that date. Otherwise, we will process your order on the next business day.

Simplified Prospectus

Table of contents

Introduction

What is a mutual fund and

what are the risks of

investing in a mutual fund?

What is a mutual fund?

The value of a mutual fund

The risks of investing in mutual funds

Different kinds of mutual funds have

different kinds of risks

Organization and

management

of the

Franklin Templeton Investments

Funds and Portfolios

Fund on Fund Structures

Purchases, switches

and redemptions

Classes and Series

The price of a Fund or Portfolio