CANADA

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Mergers – August 2016

On August 12, 2016, Franklin Templeton Investments merged the following funds:

Terminating Funds Continuing Funds
Franklin Bissett Strategic Income Corporate Class Franklin Bissett Monthly Income and Growth Fund
Franklin Bissett Strategic Income Fund
Templeton BRIC Corporate Class Templeton Emerging Markets Fund

Rationale for these mergers

We believe the mergers will be beneficial to investors in the Terminating Funds for the following reasons:

  • Each Continuing Fund is more diversified than the corresponding Terminating Fund, providing investors with broader opportunities within the same asset class; and
  • Each Continuing Fund has an MER that is the same or lower than the corresponding Terminating Fund.

Franklin Bissett Strategic Income Corporate Class and Franklin Bissett Strategic Income Fund

Franklin Bissett Strategic Income Corporate Class and Franklin Bissett Strategic Income Fund invested their entire equity component (currently ~55%) into shares of Canadian high dividend-paying companies. There aren't as many high dividend-paying equities to choose from today as there were a few years ago and the options that are available are comprised mostly of energy and financial companies.

This narrowed opportunity set contributed to increased volatility in the two funds and made it difficult to maintain sustainable monthly distributions.

Franklin Bissett Monthly Income and Growth Fund is more flexible and diversified than the terminated funds, providing investors with less volatility and a broader opportunity set to reach the investment objectives of income and capital appreciation.

Templeton BRIC Corporate Class

Templeton BRIC Corporate Class wasa specialized investment strategy which invested in companies in the "BRIC" countries – Brazil, Russia, India and China and in companies expected to benefit from developments in those countries. In the early 2000s, the BRIC countries were the largest and most visible emerging economies over the previous decade—and Templeton BRIC Corporate Class provided investors with a short-cut to investing in emerging markets.

More recently, however, the BRIC economies have underperformed the emerging market asset class. We believe a broad-based approach that includes the larger universe of emerging market countries may provide a more balanced and comprehensive approach to emerging market investing.

Questions? Call Client Services at 1 (800) 387-0830