Franklin Green Target Income 2024 Fund

Franklin Templeton Opportunities Funds

Summary of Fund Objective

The Fund seeks to offer regular income by investing primarily in corporate bonds with a pre-determined yield at the time of investments until the end of its maturity in November 2024.

Why Consider this Fund

  • Distribution share classes target a yearly average distribution of up to 2.5% (after fees and buffer have been deducted)
  • Seeks to return 100% of the initial investment at the end of the principal investment period (in November 2024)
  • No currency risk for Euro investors by investing in Euro- denominated bonds
  • Direct engagement with companies across the portfolio to improve their carbon emissions, water and wastewater strategies for a more responsible portfolio
  • Up to 70% of the Fund is invested in high yield bonds that are low-rated, non-investment grade bonds with a higher risk of default but typically pay higher yields than better quality bonds

There is no guarantee that the Fund will achieve its return objective, nor that it will remain within the aimed yearly average distribution target.  While the Fund seeks to return 100% of the initial investment, the portfolio value at the end of the principal investment period may be higher or lower than the initial investment due to the Fund’s distribution policy, the Fund’s costs or market movements. Dividend distributions cannot be guaranteed. Any distribution of the Fund lowers the value of the shares in the Fund by the amount of the distribution. The Fund is subject to key risks, including default risk, which are described further on the "What Are the Key Risks" section.

The distribution is based on the lowest potential yield an investor can expect of the portfolio without any of the bond issuers actually defaulting (Yield to Worst) at the end of the subscription period under normal market conditions (after fees and buffer have been deducted).

For distribution share classes, the Fund aims to retain yearly buffers of up to 0.2% that portfolio management is expecting to accumulate during the distribution periods and pay out at the end of the principal investment period, unless needed to maintain stability of the yearly average distributions.

FUND MANAGERS

David Zahn

  • London, United Kingdom
  • Years With Firm: 14
  • Years Of Experience: 26

Rod MacPhee

  • London, United Kingdom
  • Years With Firm: 7
  • Years Of Experience: 13

What are the Key Risks?

The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments.

  • The Fund invests principally in higher yielding euro-denominated debt securities issued by corporations globally, including those located in emerging markets. Such investments have historically been subject to price movements, generally due to changes in the creditworthiness of corporate issuers, interest rates or movements in the bond market. As a result, the performance of the Fund can fluctuate moderately over time and may also result in capital loss.
  • Other significant risks include:
    Counterparty risk: the risk of failure of financial institutions or agents (when serving as a counterparty to financial contracts) to perform their obligations, whether due to insolvency, bankruptcy or other causes.
    Credit risk: the risk of loss arising from default that may occur if an issuer fails to make principal or interest payments when due. This risk is higher if the Fund holds low-rated, sub-investment-grade securities.
    Emerging markets risk: the risk related to investing in countries that have less developed political, economic, legal and regulatory systems, and that may be impacted by political/economic instability, lack of liquidity or transparency, or safekeeping issues.
    Liquidity risk: the risk that arises when an asset cannot be sold on a timely basis due to security-specific factors or adverse market conditions, which may impact the Fund’s ability to meet redemption requests, particularly if they are increasing.
  • In particular, the Fund is exposed to credit risks, the risk of loss arising from default that may occur if an issuer fails to make principal and interest payments when due. This risk is higher if the Fund holds low-rated, sub-investment-grade securities. Default rates may change until the maturity of the fund in Nov. 2024. A default of a bond issuer could have a material loss impact on capital invested.

For full details of all of the risks applicable to this Fund, please refer to the “Risk Considerations” section of the Fund in the current prospectus of Franklin Templeton Opportunities Funds.