To seek to maximise income and growth of capital (total return), while contributing to social goals  . The Fund invests a minimum of 75% of assets in corporate and government social bonds denominated in, or hedged back to, EUR. These bonds support projects in economically disadvantaged communities, such as social housing, professional training, microcredit and access to affordable healthcare, education and basic infrastructure.  These investments may be from anywhere in the world, including emerging markets, although the Fund may invest significantly in Europe. Some of these investments may be below investment grade.

The Fund has a sustainable investment objective in accordance with Article 9 of the Sustainable Finance Disclosure Regulation (the “SFDR”). 

In its implementation of the Fund’s environmental, social, governance (“ESG”) strategy, the Investment Manager pursues a social objective and invests in bonds that are labelled as being social or in bonds deemed to be supportive of a positive social outcome. In addition, the Fund applies specific ESG exclusions. 

The Fund measures the attainment of the sustainable investment objective by means of indicators and of its proprietary ESG ratings system, and its research process further described in the Website disclosure’s dedicated sections. The Fund also ensures that its sustainable investments do not cause significant harm to any environmental or social sustainable investment objective. As part of its investment decision making process, the Fund’s ESG strategy uses binding criteria for the selection of underlying assets.

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Considering the investment objectives, the Fund may appeal to investors looking to:

• Invest in a Fund compliant with Article 9 of the SFDR
• Achieve positive social contribution through investment in European social bonds while maximising total returns
• Invest for the medium to long term

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 mainly in European social bonds. Such securities have historically proven to present some stability over time and have benefitted from limited exposure to interest rates or movements in the bond market. As a result, the performance of the Fund can fluctuate moderately over time.
• Other significant risks include:
  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.
  Derivative Instruments risk: the risk of loss in an instrument where a small change in the value of the underlying investment may have a larger impact on the value of such instrument. Derivatives may involve additional liquidity, credit and counterparty risks.
  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.
  Sustainability: The fund's integration of sustainability risks in the investment decision process may have the effect of excluding profitable investments from the investment universe of the fund and may also cause the fund to sell investments that will continue to perform well. A sustainability risk could materialise due to an environmental, social or governance event or condition which may impact the fund's investments and negatively affect the returns of the fund.

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