N-CSRS 1 primary-document.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 
FORM N-CSRS
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
 
Investment Company Act file number 811-02781
 
Templeton Funds
(Exact name of registrant as specified in charter)
 
300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923

(Address of principal executive offices) (Zip code)
 
Alison Baur, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
 
Registrant's telephone number, including area code: 954 527-7500
 
Date of fiscal year end: 8/31
 
Date of reporting period: 2/28/23
 
Item 1. Reports to Stockholders.
 
a.)
 
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)


b.)
 
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
 
 
SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
Foreign
Fund
A
Series
of
Templeton
Funds
February
28,
2023
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Semiannual
Report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
February
28,
2023,
global
equities
rose
despite
continued
challenges
resulting
from
elevated
inflation
and
higher
interest
rates.
The
price
of
oil
fell,
and
several
other
commodities
that
were
disrupted
by
Russia’s
invasion
of
Ukraine
stabilized
at
or
near
their
pre-war
prices,
easing
inflationary
pressure.
China
ended
its
restrictive
zero-COVID
policy,
prompting
investor
optimism
that
a
return
to
normal
conditions
would
benefit
global
growth.
In
this
environment,
stocks
in
global
developed
and
emerging
markets
excluding
the
U.S.,
as
measured
by
the
MSCI
All
Country
World
Index
ex
USA
Index-NR
(net
of
tax
withholding
when
dividends
are
paid),
posted
a
+7.30%
total
return
for
the
period.
1
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
Foreign
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Alan
Bartlett
Chief
Investment
Officer
Templeton
Global
Equity
Group
This
letter
reflects
our
analysis
and
opinions
as
of
February
28,
2023,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
Foreign
Fund
3
Performance
Summary
7
Your
Fund’s
Expenses
9
Financial
Highlights
and
Schedule
of
Investments
10
Financial
Statements
18
Notes
to
Financial
Statements
22
Shareholder
Information
33
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
Foreign
Fund
This
semiannual
report
for
Templeton
Foreign
Fund
covers
the
period
ended
February
28,
2023
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
long-term
capital
growth.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
foreign
securities.
These
securities
are
predominantly
equity
securities
of
companies
located
outside
the
U.S.,
including
developing
markets.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
+20.09%
cumulative
total
return
for
the
six
months
under
review.
In
comparison,
the
MSCI
All
Country
World
Index
(ACWI)
ex
USA
Index-
NR,
which
measures
stock
performance
in
global
developed
and
emerging
markets
excluding
the
U.S.,
posted
a
+7.30%
cumulative
total
return.
1
Please
note
index
performance
information
is
provided
for
reference
and
we
do
not
attempt
to
track
the
index
but
rather
undertake
investments
on
the
basis
of
fundamental
research.
You
can
find
more
performance
data
in
the
Performance
Summary
beginning
on
page
7
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Economic
and
Market
Overview
Global
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
ACWI-NR,
posted
a
+3.32%
total
return
for
the
six
months
ended
February
28,
2023.
1
Despite
continued
challenges
from
elevated
inflation
and
higher
interest
rates,
stocks
gained
amid
signs
of
resilience
in
the
global
economy.
The
price
of
oil
fell,
and
several
other
commodities
that
were
disrupted
by
Russia’s
invasion
of
Ukraine
stabilized
at
or
near
their
pre-war
prices,
easing
inflationary
pressure.
China
ended
its
restrictive
zero-COVID
policy,
prompting
investor
optimism
that
a
return
to
normal
conditions
would
benefit
global
growth.
In
the
U.S.,
gross
domestic
product
growth
resumed
in
the
second
half
of
2022,
rebounding
from
contractions
in
the
first
two
quarters
of
the
year.
Increasing
consumer
and
government
spending,
rising
inventories
and
strong
nonresidential
fixed
investment
boosted
economic
growth.
Meanwhile,
inflation,
which
remained
heightened
relative
to
recent
decades,
showed
signs
of
easing.
The
annual
inflation
rate,
as
measured
by
the
consumer
price
index,
declined
each
month
from
September
2022
through
January
2023.
In
an
effort
to
control
inflation,
the
U.S.
Federal
Reserve
(Fed)
raised
the
federal
funds
target
rate
four
times
during
the
period
to
end
at
a
range
of
4.50%–4.75%.
The
Fed
slowed
the
pace
of
its
interest
rate
increases
from
75
basis
points
(bps)
at
its
September
and
November
2022
meetings
to
50
bps
in
December
and
25
bps
in
February
2023.
At
its
February
meeting,
the
Fed
noted
that
although
inflation
has
eased
somewhat,
it
remained
elevated,
and
job
growth
was
robust
while
the
unemployment
rate
continued
to
be
low.
Furthermore,
the
Fed
maintained
its
policy
of
reducing
its
accumulated
bond
holdings
and
decreasing
the
size
of
its
balance
sheet.
Economies
in
the
eurozone
maintained
a
slow
growth
rate
in
2022’s
third
and
fourth
quarters.
The
European
Central
Bank
continued
to
raise
interest
rates
during
the
six-month
period,
opting
to
increase
its
benchmark
rate
at
each
of
its
four
meetings
to
fight
growing
inflation.
While
the
ongoing
war
in
Ukraine
and
subsequent
sanctions
against
Russia
disrupted
the
supply
of
natural
gas
to
Europe,
alternate
supplies
and
reduced
industrial
consumption
helped
maintain
gas
inventories
at
historically
high
levels.
In
this
environment,
Geographic
Composition
2/28/23
%
of
Total
Net
Assets
Europe
56.8%
Asia
35.9%
North
America
2.4%
Short-Term
Investments
&
Other
Net
Assets
4.9%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
15
.
Templeton
Foreign
Fund
4
franklintempleton.com
Semiannual
Report
European
developed
market
equities,
as
measured
by
the
MSCI
Europe
Index-NR,
posted
a
+17.69%
total
return
for
the
six
months
under
review.
1
Asian
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
Asia
Index-NR,
posted
a
-0.05%
total
return
for
the
six-month
period.
1
China’s
economy
grew
on
an
annual
basis
in
the
third
and
fourth
quarters
of
2022.
In
December
2022,
China
loosened
its
strict
zero-COVID
policy,
lifting
a
potential
barrier
to
continued
growth
and
driving
gains
in
China’s
equity
market.
Japan’s
economy
weakened
in
2022’s
third
quarter
before
returning
to
modest
growth
in
the
fourth
quarter,
driven
by
rising
private
consumption
amid
loosened
border
controls.
Global
emerging
market
stocks,
as
measured
by
the
MSCI
Emerging
Markets
Index-NR,
posted
a
-2.29%
total
return
for
the
six
months
under
review.
1
Concerns
that
continued
strength
in
the
U.S.
economy
could
keep
Fed
monetary
policy
tight
negatively
impacted
stocks
in
developing
nations.
Stocks
in
these
countries
are
negatively
impacted
by
high
interest
rates
in
the
U.S.,
which
increase
the
yield
of
some
U.S.-based
assets,
making
them
relatively
more
attractive
to
investors.
Investment
Strategy
Our
investment
strategy
employs
a
bottom-up,
value-
oriented,
long-term
approach.
We
focus
on
the
market
price
of
a
company’s
securities
relative
to
our
evaluation
of
the
company’s
long-term
earnings,
asset
value
and
cash
flow
potential.
We
also
consider
the
company’s
price/earnings
ratio,
price/cash
flow
ratio,
profit
margins
and
liquidation
value.
The
Fund
may,
from
time
to
time,
engage
in
currency-related
derivatives,
such
as
currency
and
cross-currency
forwards
and
currency
futures
contracts,
to
seek
to
hedge
(protect)
against
currency
risks.
Manager’s
Discussion
In
a
six-month
period
characterized
by
elevated
uncertainty
and
shifting
market
trends,
Templeton
Foreign
Fund
delivered
double-digit
absolute
gains
and
outperformed
its
benchmark
MSCI
ACWI
ex-USA
Index-NR
by
the
largest
margin
in
more
than
20
years.
Outperformance
was
primarily
attributable
to
stock
selection,
which
was
encouraging
given
the
volatility
in
factor
trends
during
the
period.
In
our
view,
outperformance
absent
a
strong
style
regime
is
a
good
sign,
as
it
highlights
the
portfolio’s
idiosyncratic
return
potential
and
the
positive
impact
of
stock
selection.
Templeton
Foreign
Fund
adheres
to
a
robust
long-term
value
discipline
that
looks
for
“pockets
of
pessimism,”
meaning
stocks
that
have,
in
our
view,
been
excessively
discounted
by
negative
sentiment.
Our
forward-looking
fundamental
valuation
work
drives
the
Fund’s
positioning,
and
while
we
did
not
make
major
strategic
changes
during
the
review
period,
there
was
some
repositioning
on
the
margins.
We
had
increased
cyclical
exposures
prior
to
the
period
as
a
darkening
macroeconomic
outlook
created
opportunities
among
economically-sensitive
stocks.
While
many
of
these
stocks
remain
core
holdings,
we
trimmed
some
of
our
cyclical
exposures
during
the
review
period
as
optimism
returned
and
economically-sensitive
stocks
were
positively
re-rated.
Tactically,
that
was
the
correct
move,
in
our
assessment,
as
evidenced
by
strong
recent
performance
results.
Top
10
Industries
2/28/23
%
of
Total
Net
Assets
a
Banks
15.4%
Oil,
Gas
&
Consumable
Fuels
11.2%
Semiconductors
&
Semiconductor
Equipment
6.3%
Auto
Components
6.2%
Internet
&
Direct
Marketing
Retail
4.9%
Automobiles
4.8%
Technology
Hardware,
Storage
&
Peripherals
4.4%
Insurance
3.9%
Aerospace
&
Defense
3.8%
Pharmaceuticals
3.7%
Top
10
Countries
2/28/23
a
%
of
Total
Net
Assets
a
a
United
Kingdom
21.7%
Germany
13.7%
Japan
10.9%
Netherlands
10.3%
South
Korea
8.0%
China
7.3%
France
5.7%
Hong
Kong
3.9%
Taiwan
2.5%
United
States
2.4%
Templeton
Foreign
Fund
5
franklintempleton.com
Semiannual
Report
Market
leadership
during
the
period
was
initially
dominated
by
large-capitalization
defensive
value
stocks
at
a
time
when
policy
tightening
and
slowing
economic
indicators
raised
expectations
of
a
global
recession.
As
the
period
progressed,
investors
began
to
focus
on
early
signs
that
inflation
could
be
peaking.
Consequently,
entering
2023,
rising
expectations
of
a
dovish
policy
pivot
from
the
Fed
led
to
a
revival
in
risk
appetite,
a
pull-back
in
the
U.S.
dollar,
and
a
resurgence
in
international
cyclical
growth
stocks.
However,
renewed
signs
of
more
persistent
inflation
late
in
the
period
led
to
increased
hawkishness
from
central
bankers,
causing
a
rotation
out
of
rate-sensitive
emerging
market
stocks
and
back
into
developed
market
equities,
particularly
in
Europe.
European
outperformance
was
the
most
consistent
market
trend
during
a
period
otherwise
characterized
by
ongoing
leadership
rotations.
In
fact,
it
was
the
best
six-month
period
for
European
equities
(relative
to
the
rest
of
the
world)
in
at
least
two
decades
as
mild
winter
weather
quelled
fears
of
an
energy
crisis
on
the
continent
and
investors
gravitated
to
the
region’s
relatively
inexpensive
valuations.
The
Fund’s
European
holdings
were
the
primary
regional
contributors,
led
by
a
favorable
overweighted
allocation
and
stock
selection
in
the
U.K.
Our
European
overweight
also
had
a
meaningfully
positive
currency
impact
during
the
period
given
the
strength
of
both
the
British
pound
and
the
euro
versus
the
U.S.
dollar.
The
Fund’s
Asian
holdings
also
outperformed,
led
by
stock
selection
and
favorable
underweighted
allocations
in
China
and
Japan.
All
sector
allocations
outperformed
the
benchmark
during
the
review
period.
Consumer
discretionary
was
the
biggest
relative
contributor,
benefiting
from
stock
selection,
primarily
in
the
automotive
industry.
German
automaker
Bayerische
Motoren
Werke
(more
commonly
known
as
BMW)
and
auto
parts
firm
Faurecia
were
the
Fund’s
top
sector
holdings.
BMW
is
one
example
of
a
“pocket
of
pessimism.”
Concerns
around
German
geopolitical
and
energy
supply
risks
in
addition
to
broader
economic
anxiety
pressured
the
stock
to
levels
that
we
believe
offer
significant
value.
During
the
period,
BMW
traded
on
a
low
single-digit
price-to-earnings
multiple
with
a
greater
than
20%
free
cash
flow
yield,
which
management
is
using
to
pay
a
healthy
dividend
and
buy
back
€2
billion
of
stock.
A
net
cash
balance
sheet
further
reinforces
the
company’s
attractive
risk-return
profile,
in
our
view,
and
should
help
BMW
weather
any
potential
macroeconomic
adversity
and
continue
to
reward
shareholders
with
a
generous
payout
policy.
Faurecia
also
rallied
after
reporting
solid
earnings
and
announcing
an
asset
disposal
that
will
help
strengthen
the
firm’s
balance
sheet.
Stock
selection
in
financials
also
notably
outperformed,
led
by
European
lenders
ING
Groep
and
Standard
Chartered.
ING
was
the
biggest
sector
contributor,
advancing
after
beating
earnings
estimates
and
increasing
its
capital
return
commitment
to
shareholders.
Improving
earnings
and
growing
confidence
in
a
new
management
team
have
begun
to
bolster
sentiment
on
the
stock.
In
our
view,
the
real
value
to
be
unlocked
at
ING
in
the
intermediate
term
is
embedded
in
capital
returns.
The
bank
has
€7bn
of
excess
capital;
at
its
current
common
equity
tier
1
(CET1)
target
of
12.5%,
that
means
ING
must
distribute
20%
of
its
market
cap
in
the
next
couple
years
over
and
above
the
annual
50%
dividend
payout.
In
the
earnings
reported
during
the
review
period,
management
confirmed
the
need
to
return
in
excess
of
100%
of
earnings
over
the
coming
years.
With
shares
still
trading
at
a
material
discount
to
book
value,
earnings
coming
in
better
than
expected
and
the
capital
return
story
still
not
fully
appreciated
by
the
market,
we
continue
to
believe
that
ING
represents
asymmetric
risk-reward
prospects
over
the
next
few
years.
Energy
stocks
also
meaningfully
contributed,
with
U.K.-
based
integrated
oil
major
BP
finishing
as
the
Fund’s
top
individual
contributor.
Shares
rallied
after
the
firm
reported
strong
results,
with
a
larger-than-expected
share
buyback
and
10%
dividend
increase.
We
were
encouraged
to
see
BP
increase
long-term
profit
and
production
guidance,
especially
given
analyst
concerns
about
declining
volumes.
Overall,
we
are
confident
in
management’s
ability
to
strategically
allocate
BP’s
prodigious
cash
flows
to
balance
shareholder
returns,
Top
10
Holdings
2/28/23
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
BP
plc
5.3%
Oil,
Gas
&
Consumable
Fuels,
United
Kingdom
Shell
plc
4.6%
Oil,
Gas
&
Consumable
Fuels,
Netherlands
Samsung
Electronics
Co.
Ltd.
4.1%
Technology
Hardware,
Storage
&
Peripherals,
South
Korea
Standard
Chartered
plc
3.3%
Banks,
United
Kingdom
Bayerische
Motoren
Werke
AG
2.9%
Automobiles,
Germany
Faurecia
SE
2.5%
Auto
Components,
France
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.
2.5%
Semiconductors
&
Semiconductor
Equipment,
Taiwan
Sumitomo
Mitsui
Financial
Group,
Inc.
2.4%
Banks,
Japan
Imperial
Brands
plc
2.4%
Tobacco,
United
Kingdom
Infineon
Technologies
AG
2.4%
Semiconductors
&
Semiconductor
Equipment,
Germany
Templeton
Foreign
Fund
6
franklintempleton.com
Semiannual
Report
production
growth
and
capital
efficiency.
With
cash
flow
yields
in
the
high
teens
at
current
oil
prices,
we
continue
to
believe
BP
is
undervalued,
and
it
represents
a
core
holding
in
the
portfolio.
While
there
were
no
sector-level
detractors,
there
were
a
handful
of
individual
stock
laggards.
Weakness
was
primarily
concentrated
in
Asia,
among
technology
stocks
like
e-commerce
firm
Alibaba
Group
Holding
and
internet
search
giant
Baidu.
While
concerns
about
geopolitical
tensions
and
regulatory
interference
in
the
Chinese
technology
sector
persist,
we
continue
to
like
these
companies
over
the
long-
term
given
their
attractive
valuations
and
strong
growth
profiles.
At
Templeton,
we
think
creatively
about
the
many
ways
that
value
gets
created
over
time.
The
result
is
a
process
that
combines
analytical
rigor
with
a
dynamic
approach
to
value
that
covers
a
range
of
different
investment
profiles.
One
of
the
objectives
underpinning
our
use
of
the
full
spectrum
of
value
is
the
independence
it
creates
from
the
large
momentum
shifts
that
so
often
buffet
markets.
We
seek
to
build
portfolios
that
we
believe
will
not
be
whipsawed
by
the
whims
of
the
equity
market
as
investors
rotate
between
narratives.
If
we
can
successfully
manage
the
volatility
associated
with
these
swings,
we
can
then
focus
on
pursuing
alpha
over
time
through
stock
picking—that
is,
through
the
evaluation
of
long-term
business
fundamentals
and
buying
shares
at
a
discount
to
their
intrinsic
worth.
Despite
recent
strength,
Templeton
Foreign
Fund
continues
to
trade
at
single-digit
price-to-earnings
multiples,
a
significant
discount
to
its
benchmark
and
in
the
bottom
quartile
of
historic
valuations.
We
believe
the
Fund’s
attractive
valuation
and
fundamental
profile
has
the
potential
to
support
performance
over
time,
particularly
if
the
market
continues
to
move
away
from
macroeconomic
themes
and
towards
a
more
discriminate
assessment
of
bottom-up
value.
Thank
you
for
your
continued
participation
in
Templeton
Foreign
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Christopher
James
Peel,
CFA
Lead
Portfolio
Manager
Herbert
J.
Arnett,
Jr.
Peter
M.
Moeschter,
CFA
Warren
Pustam,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
February
28,
2023,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
CFA
®
is
a
trademark
owned
by
CFA
Institute.
Performance
Summary
as
of
February
28,
2023
Templeton
Foreign
Fund
7
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
2/28/23
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A
:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
6-Month
+20.09%
+13.45%
1-Year
+4.54%
-1.18%
5-Year
+7.08%
+0.24%
10-Year
+42.63%
+3.03%
Advisor
6-Month
+20.10%
+20.10%
1-Year
+4.75%
+4.75%
5-Year
+8.23%
+1.59%
10-Year
+46.00%
+3.86%
See
page
8
for
Performance
Summary
footnotes.
Templeton
Foreign
Fund
Performance
Summary
8
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Special
risks
are
associated
with
foreign
investing,
including
currency
fluctuations,
economic
instability
and
political
developments;
investments
in
developing
markets
involve
heightened
risks
related
to
the
same
factors.
Currency
rates
may
fluctuate
significantly
over
short
periods
of
time,
and
can
reduce
returns.
Because
the
Fund
may
invest
its
assets
in
companies
in
a
specific
region,
including
Europe,
it
is
subject
to
greater
risks
of
adverse
developments
in
that
region
and/or
the
surrounding
regions
than
a
fund
that
is
more
broadly
diversified
geographically.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio
which
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
(as
well
as
enable
gains)
on
an
amount
that
exceeds
the
Fund’s
initial
investment.
The
Fund
may
not
achieve
the
anticipated
benefits,
and
may
realize
losses
when
a
counterparty
fails
to
perform
as
promised.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
Gross
expenses
are
the
Fund’s
total
annual
operating
expenses
as
of
the
Fund's
prospectus
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
Net
expenses
reflect
contractual
fee
waivers,
expense
caps
and/or
reimbursements,
which
cannot
be
terminated
prior
to
12/31/23
without
Board
consent.
Additional
amounts
may
be
voluntarily
waived
and/or
reimbursed
and
may
be
modified
or
discontinued
at
any
time
without
notice.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(9/1/22–2/28/23)
Share
Class
Net
Investment
Income
A
$0.0814
C
$0.0156
R
$0.0660
R6
$0.1060
Advisor
$0.0985
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.10%
1.16%
Advisor
0.85%
0.91%
Your
Fund’s
Expenses
Templeton
Foreign
Fund
9
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
9/1/22
Ending
Account
Value
2/28/23
Expenses
Paid
During
Period
9/1/22–2/28/23
1,2
Ending
Account
Value
2/28/23
Expenses
Paid
During
Period
9/1/22–2/28/23
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,200.90
$5.99
$1,019.35
$5.50
1.10%
C
$1,000
$1,196.70
$10.06
$1,015.64
$9.23
1.85%
R
$1,000
$1,200.10
$7.35
$1,018.11
$6.74
1.35%
R6
$1,000
$1,202.70
$4.03
$1,021.14
$3.70
0.74%
Advisor
$1,000
$1,201.00
$4.62
$1,020.59
$4.24
0.85%
Templeton
Funds
Financial
Highlights
Templeton
Foreign
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$6.32
$7.77
$6.22
$6.61
$7.69
$7.81
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.03
0.13
0.18
c
0.10
0.19
0.12
Net
realized
and
unrealized
gains
(losses)
1.23
(1.28)
1.46
(0.25)
(1.09)
(0.13)
Total
from
investment
operations
........
1.26
(1.15)
1.64
(0.15)
(0.90)
(0.01)
Less
distributions
from:
Net
investment
income
..............
(0.08)
(0.30)
(0.09)
(0.24)
(0.18)
(0.11)
Net
asset
value,
end
of
period
..........
$7.50
$6.32
$7.77
$6.22
$6.61
$7.69
Total
return
d
.......................
20.09%
(15.25)%
26.57%
(2.76)%
(11.73)%
(0.15)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
1.15%
1.16%
1.15%
1.19%
1.15%
1.16%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.10%
1.10%
1.07%
1.10%
1.08%
1.11%
f
Net
investment
income
...............
0.93%
1.80%
2.45%
c
1.55%
2.69%
1.54%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$1,621,340
$1,418,293
$1,990,939
$1,766,365
$2,395,260
$2,929,181
Portfolio
turnover
rate
................
7.20%
29.07%
37.85%
g
42.37%
g
30.81%
23.01%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.23%.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
Templeton
Funds
Financial
Highlights
Templeton
Foreign
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$6.29
$7.70
$6.17
$6.54
$7.49
$7.60
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.01
0.07
0.13
c
0.05
0.12
0.06
Net
realized
and
unrealized
gains
(losses)
1.23
(1.27)
1.43
(0.25)
(1.05)
(0.12)
Total
from
investment
operations
........
1.24
(1.20)
1.56
(0.20)
(0.93)
(0.06)
Less
distributions
from:
Net
investment
income
..............
(0.02)
(0.21)
(0.03)
(0.17)
(0.02)
(0.05)
Net
asset
value,
end
of
period
..........
$7.51
$6.29
$7.70
$6.17
$6.54
$7.49
Total
return
d
.......................
19.67%
(15.95)%
25.55%
(3.42)%
(12.40)%
(0.79)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
1.90%
1.91%
1.90%
1.94%
1.90%
1.91%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.85%
1.85%
1.82%
1.85%
1.83%
1.86%
f
Net
investment
income
...............
0.18%
1.03%
1.81%
c
0.81%
1.94%
0.79%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$23,822
$23,962
$39,083
$54,093
$87,160
$281,640
Portfolio
turnover
rate
................
7.20%
29.07%
37.85%
g
42.37%
g
30.81%
23.01%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.58%.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
Templeton
Funds
Financial
Highlights
Templeton
Foreign
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$6.16
$7.58
$6.08
$6.47
$7.53
$7.65
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.02
0.11
0.16
c
0.08
0.17
0.10
Net
realized
and
unrealized
gains
(losses)
1.21
(1.25)
1.42
(0.24)
(1.07)
(0.12)
Total
from
investment
operations
........
1.23
(1.14)
1.58
(0.16)
(0.90)
(0.02)
Less
distributions
from:
Net
investment
income
..............
(0.07)
(0.28)
(0.08)
(0.23)
(0.16)
(0.10)
Net
asset
value,
end
of
period
..........
$7.32
$6.16
$7.58
$6.08
$6.47
$7.53
Total
return
d
.......................
20.01%
(15.54)%
26.29%
(3.03)%
(11.96)%
(0.32)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
1.40%
1.41%
1.40%
1.44%
1.40%
1.41%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.35%
1.35%
1.32%
1.35%
1.33%
1.36%
f
Net
investment
income
...............
0.68%
1.57%
2.21%
c
1.33%
2.44%
1.29%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$118,982
$103,984
$123,744
$109,187
$127,546
$148,638
Portfolio
turnover
rate
................
7.20%
29.07%
37.85%
g
42.37%
g
30.81%
23.01%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.98%.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
Templeton
Funds
Financial
Highlights
Templeton
Foreign
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$6.20
$7.64
$6.12
$6.51
$7.58
$7.70
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.04
0.15
0.21
c
0.12
0.22
0.15
Net
realized
and
unrealized
gains
(losses)
1.21
(1.26)
1.43
(0.24)
(1.08)
(0.12)
Total
from
investment
operations
........
1.25
(1.11)
1.64
(0.12)
(0.86)
0.03
Less
distributions
from:
Net
investment
income
..............
(0.11)
(0.33)
(0.12)
(0.27)
(0.21)
(0.15)
Net
asset
value,
end
of
period
..........
$7.34
$6.20
$7.64
$6.12
$6.51
$7.58
Total
return
d
.......................
20.27%
(14.98)%
27.02%
(2.38)%
(11.34)%
0.24%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
0.81%
0.81%
0.79%
0.79%
0.77%
0.73%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.74%
0.73%
0.69%
0.70%
0.68%
0.68%
f
Net
investment
income
...............
1.29%
2.13%
2.86%
c
1.96%
3.09%
1.97%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$335,868
$290,974
$531,344
$594,452
$906,474
$1,496,328
Portfolio
turnover
rate
................
7.20%
29.07%
37.85%
g
42.37%
g
30.81%
23.01%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.63%.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
Templeton
Funds
Financial
Highlights
Templeton
Foreign
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$6.21
$7.64
$6.12
$6.51
$7.58
$7.70
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.04
0.15
0.20
c
0.11
0.20
0.14
Net
realized
and
unrealized
gains
(losses)
1.20
(1.26)
1.43
(0.24)
(1.07)
(0.12)
Total
from
investment
operations
........
1.24
(1.11)
1.63
(0.13)
(0.87)
0.02
Less
distributions
from:
Net
investment
income
..............
(0.10)
(0.32)
(0.11)
(0.26)
(0.20)
(0.14)
Net
asset
value,
end
of
period
..........
$7.35
$6.21
$7.64
$6.12
$6.51
$7.58
Total
return
d
.......................
20.10%
(14.99)%
26.88%
(2.57)%
(11.53)%
0.16%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
0.91%
0.92%
0.90%
0.94%
0.90%
0.91%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.85%
0.85%
0.82%
0.85%
0.83%
0.86%
f
Net
investment
income
...............
1.19%
2.06%
2.80%
c
1.79%
2.94%
1.79%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$638,528
$602,921
$620,885
$857,179
$857,482
$1,627,827
Portfolio
turnover
rate
................
7.20%
29.07%
37.85%
g
42.37%
g
30.81%
23.01%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.57%.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
Templeton
Funds
Schedule
of
Investments
(unaudited),
February
28,
2023
Templeton
Foreign
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
a
Industry
Shares
a
Value
a
Common
Stocks
95.1%
China
7.3%
a
Alibaba
Group
Holding
Ltd.
.........
Internet
&
Direct
Marketing
Retail
5,372,770
$
59,052,621
a,b
Baidu,
Inc.,
ADR
.................
Interactive
Media
&
Services
124,789
17,182,197
Gree
Electric
Appliances,
Inc.
of
Zhuhai,
A
...........................
Household
Durables
3,965,000
20,284,844
NXP
Semiconductors
NV
..........
Semiconductors
&
Semiconductor
Equipment
228,703
40,818,912
Prosus
NV
.....................
Internet
&
Direct
Marketing
Retail
887,750
63,642,110
200,980,684
France
5.7%
Dassault
Aviation
SA
..............
Aerospace
&
Defense
252,260
43,366,212
a
Faurecia
SE
....................
Auto
Components
3,109,869
67,828,850
Valeo
.........................
Auto
Components
2,188,453
45,464,556
156,659,618
Germany
13.7%
Bayer
AG
......................
Pharmaceuticals
1,072,957
63,713,529
Bayerische
Motoren
Werke
AG
......
Automobiles
764,267
78,845,951
Continental
AG
..................
Auto
Components
777,879
55,845,572
c
Covestro
AG,
144A,
Reg
S
.........
Chemicals
870,065
38,248,449
E.ON
SE
.......................
Multi-Utilities
3,568,387
38,934,220
b
Fresenius
Medical
Care
AG
&
Co.
KGaA
Health
Care
Providers
&
Services
896,999
35,050,742
Infineon
Technologies
AG
..........
Semiconductors
&
Semiconductor
Equipment
1,843,683
65,222,905
375,861,368
Hong
Kong
3.9%
AIA
Group
Ltd.
..................
Insurance
5,430,543
57,714,067
Prudential
plc,
(GBP
Traded)
........
Insurance
2,588,841
39,561,838
b
Prudential
plc,
(HKD
Traded)
........
Insurance
589,500
8,863,224
106,139,129
India
2.0%
Housing
Development
Finance
Corp.
Ltd.
.........................
Diversified
Financial
Services
1,769,747
55,805,251
Ireland
1.6%
CRH
plc
.......................
Construction
Materials
914,999
42,980,710
Japan
10.9%
Elecom
Co.
Ltd.
.................
Technology
Hardware,
Storage
&
Peripherals
1,035,960
10,128,578
Hitachi
Ltd.
.....................
Industrial
Conglomerates
843,209
42,684,639
Honda
Motor
Co.
Ltd.
.............
Automobiles
2,033,895
52,891,619
Seria
Co.
Ltd.
...................
Multiline
Retail
1,029,807
19,981,575
Sony
Group
Corp.
................
Household
Durables
315,984
26,423,412
Sumitomo
Metal
Mining
Co.
Ltd.
.....
Metals
&
Mining
1,214,093
45,198,255
Sumitomo
Mitsui
Financial
Group,
Inc.
.
Banks
1,531,623
66,896,806
Sundrug
Co.
Ltd.
.................
Food
&
Staples
Retailing
1,275,419
34,534,157
298,739,041
Netherlands
10.3%
a
EXOR
NV
......................
Diversified
Financial
Services
477,513
39,401,703
ING
Groep
NV
..................
Banks
4,217,208
59,020,333
SBM
Offshore
NV
................
Energy
Equipment
&
Services
3,903,594
57,123,744
Shell
plc
.......................
Oil,
Gas
&
Consumable
Fuels
4,181,677
126,645,697
282,191,477
Portugal
1.3%
Galp
Energia
SGPS
SA,
B
.........
Oil,
Gas
&
Consumable
Fuels
2,809,055
34,269,144
Templeton
Funds
Schedule
of
Investments
(unaudited)
Templeton
Foreign
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Shares
a
Value
a
Common
Stocks
(continued)
South
Korea
8.0%
KB
Financial
Group,
Inc.
...........
Banks
1,428,246
$
55,402,797
Samsung
Electronics
Co.
Ltd.
.......
Technology
Hardware,
Storage
&
Peripherals
2,425,301
111,146,277
Shinhan
Financial
Group
Co.
Ltd.
....
Banks
1,744,881
51,320,107
217,869,181
Spain
0.6%
a,b
Tecnicas
Reunidas
SA
............
Energy
Equipment
&
Services
1,424,712
16,323,482
Switzerland
1.9%
Adecco
Group
AG
................
Professional
Services
1,491,853
53,196,754
Taiwan
2.5%
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.
......................
Semiconductors
&
Semiconductor
Equipment
4,127,044
67,714,019
Thailand
1.3%
Kasikornbank
PCL
...............
Banks
9,025,777
35,099,728
United
Kingdom
21.7%
AstraZeneca
plc
.................
Pharmaceuticals
293,868
38,281,379
Barratt
Developments
plc
..........
Household
Durables
4,457,370
25,059,383
BP
plc
.........................
Oil,
Gas
&
Consumable
Fuels
22,252,522
146,221,016
CK
Hutchison
Holdings
Ltd.
.........
Industrial
Conglomerates
7,143,676
42,655,333
Imperial
Brands
plc
...............
Tobacco
2,760,256
66,492,570
a,c
Just
Eat
Takeaway.com
NV,
144A,
Reg
S
...........................
Internet
&
Direct
Marketing
Retail
531,490
11,560,075
Lloyds
Banking
Group
plc
..........
Banks
101,127,790
63,859,992
Persimmon
plc
..................
Household
Durables
1,612,660
28,120,320
a
Rolls-Royce
Holdings
plc
..........
Aerospace
&
Defense
34,093,285
59,395,770
a
S4
Capital
plc
...................
Media
9,188,850
22,648,428
Standard
Chartered
plc
............
Banks
9,428,705
89,208,925
593,503,191
United
States
2.4%
a
DXC
Technology
Co.
..............
IT
Services
1,813,490
50,306,212
Freeport-McMoRan,
Inc.
...........
Metals
&
Mining
374,840
15,357,195
65,663,407
Total
Common
Stocks
(Cost
$2,386,880,232)
....................................
2,602,996,184
Short
Term
Investments
6.0%
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Time
Deposits
5.9%
Canada
4.8%
National
Bank
of
Canada,
4.56%,
3/01/23
......................
36,000,000
36,000,000
Royal
Bank
of
Canada,
4.55%,
3/01/23
81,700,000
81,700,000
Toronto-Dominion
Bank
(The),
4.55%,
3/01/23
......................
14,500,000
14,500,000
132,200,000
Templeton
Funds
Schedule
of
Investments
(unaudited)
Templeton
Foreign
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
Short
Term
Investments
(continued)
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Time
Deposits
(continued)
France
1.1%
Credit
Agricole
Corporate
and
Investment
Bank
SA,
4.55%,
3/01/23
29,000,000
$
29,000,000
Total
Time
Deposits
(Cost
$161,200,000)
.......................................
161,200,000
Shares
d
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
0.1%
Money
Market
Funds
0.1%
e,f
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
4.204%
.........
3,087,500
3,087,500
Total
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
(Cost
$3,087,500)
.................................................................
3,087,500
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$164,287,500
)
...............................
164,287,500
a
a
a
Total
Investments
(Cost
$2,551,167,732)
101.1%
................................
$2,767,283,684
Other
Assets,
less
Liabilities
(1.1)%
...........................................
(28,743,385)
Net
Assets
100.0%
...........................................................
$2,738,540,299
a
a
a
See
Abbreviations
on
page
32
.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Non-income
producing.
b
A
portion
or
all
of
the
security
is
on
loan
at
February
28,
2023.
See
Note
1(d).
c
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
February
28,
2023,
the
aggregate
value
of
these
securities
was
$49,808,524,
representing
1.8%
of
net
assets.
d
See
Note
1(d)
regarding
securities
on
loan.
e
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
f
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Templeton
Funds
Financial
Statements
Statement
of
Assets
and
Liabilities
February
28,
2023
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Templeton
Foreign
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$2,548,080,232
Cost
-
Non-controlled
affiliates
(Note
3f)
........................................................
3,087,500
Value
-
Unaffiliated
issuers
(Includes
securities
loaned
of
$26,352,173)
.................................
$2,764,196,184
Value
-
Non-controlled
affiliates
(Note
3f)
........................................................
3,087,500
Cash
....................................................................................
40,491
Receivables:
Investment
securities
sold
...................................................................
14,795
Capital
shares
sold
........................................................................
1,427,437
Dividends
and
interest
.....................................................................
13,862,518
European
Union
tax
reclaims
(Note
1
e
)
.........................................................
117,666
Total
assets
..........................................................................
2,782,746,591
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
10,979,699
Capital
shares
redeemed
...................................................................
2,390,959
Management
fees
.........................................................................
1,412,260
Distribution
fees
..........................................................................
383,363
Transfer
agent
fees
........................................................................
1,771,406
Trustees'
fees
and
expenses
.................................................................
42
IRS
closing
agreement
payments
for
European
Union
tax
reclaims
(Note
1
e
)
.............................
21,287,961
Payable
upon
return
of
securities
loaned
(Note
1
d
)
..................................................
3,087,500
Deferred
tax
...............................................................................
2,020,600
Accrued
expenses
and
other
liabilities
...........................................................
872,502
Total
liabilities
.........................................................................
44,206,292
Net
assets,
at
value
.................................................................
$2,738,540,299
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$2,867,089,345
Total
distributable
earnings
(losses)
.............................................................
(128,549,046)
Net
assets,
at
value
.................................................................
$2,738,540,299
Templeton
Funds
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
February
28,
2023
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
Templeton
Foreign
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$1,621,340,383
Shares
outstanding
........................................................................
216,258,715
Net
asset
value
per
share
a
..................................................................
$7.50
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
................................
$7.94
Class
C:
Net
assets,
at
value
.......................................................................
$23,822,442
Shares
outstanding
........................................................................
3,172,530
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$7.51
Class
R:
Net
assets,
at
value
.......................................................................
$118,982,308
Shares
outstanding
........................................................................
16,256,751
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.32
Class
R6:
Net
assets,
at
value
.......................................................................
$335,867,591
Shares
outstanding
........................................................................
45,741,222
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.34
Advisor
Class:
Net
assets,
at
value
.......................................................................
$638,527,575
Shares
outstanding
........................................................................
86,839,433
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.35
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Funds
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
February
28,
2023
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
Templeton
Foreign
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$1,173,615)
Unaffiliated
issuers
........................................................................
$23,728,530
Interest:
Unaffiliated
issuers
........................................................................
1,498,754
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
.....................................................
217,058
Non-controlled
affiliates
(Note
3
f
)
.............................................................
150,899
Other
income
(Note
1
e
)
......................................................................
11,096
Less:
IRS
closing
agreement
payments
for
European
Union
tax
reclaims
(Note
1
e
)
..........................
(330,866)
Total
investment
income
...................................................................
25,275,471
Expenses:
Management
fees
(Note
3
a
)
...................................................................
8,679,234
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
1,830,415
    Class
C
................................................................................
113,549
    Class
R
................................................................................
271,605
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
1,268,115
    Class
C
................................................................................
19,712
    Class
R
................................................................................
94,091
    Class
R6
...............................................................................
112,865
    Advisor
Class
............................................................................
517,954
Custodian
fee
s
.............................................................................
118,649
Registration
and
filing
fees
....................................................................
56,148
Professional
fees
...........................................................................
25,242
Trustees'
fees
and
expenses
..................................................................
131,594
Other
....................................................................................
109,018
Total
expenses
.........................................................................
13,348,191
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(730,880)
Net
expenses
.........................................................................
12,617,311
Net
investment
income
................................................................
12,658,160
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
55,773,133
Written
options
...........................................................................
128,973
Foreign
currency
transactions
................................................................
175,328
Net
realized
gain
(loss)
..................................................................
56,077,434
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
397,238,803
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
440,099
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
(447,770)
Net
change
in
unrealized
appreciation
(depreciation)
............................................
397,231,132
Net
realized
and
unrealized
gain
(loss)
............................................................
453,308,566
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$465,966,726
Templeton
Funds
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
Templeton
Foreign
Fund
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$12,658,160
$56,742,134
Net
realized
gain
(loss)
.................................................
56,077,434
158,736,046
Net
change
in
unrealized
appreciation
(depreciation)
...........................
397,231,132
(681,581,753)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
465,966,726
(466,103,573)
Distributions
to
shareholders:
Class
A
.............................................................
(17,674,304)
(68,477,455)
Class
C
.............................................................
(51,405)
(999,549)
Class
R
.............................................................
(1,094,380)
(4,571,272)
Class
R6
............................................................
(4,832,491)
(20,850,055)
Advisor
Class
........................................................
(8,718,598)
(34,087,582)
Total
distributions
to
shareholders
..........................................
(32,371,178)
(128,985,913)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(52,960,620)
(240,351,269)
Class
C
.............................................................
(4,025,937)
(9,046,243)
Class
R
.............................................................
(4,282,273)
3,756,831
Class
R6
............................................................
(7,375,063)
(158,973,250)
Advisor
Class
........................................................
(66,544,586)
133,841,510
Total
capital
share
transactions
............................................
(135,188,479)
(270,772,421)
Net
increase
(decrease)
in
net
assets
...................................
298,407,069
(865,861,907)
Net
assets:
Beginning
of
period
.....................................................
2,440,133,230
3,305,995,137
End
of
period
..........................................................
$2,738,540,299
$2,440,133,230
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
Templeton
Foreign
Fund
22
franklintempleton.com
Semiannual
Report
1.
Organization
and
Significant
Accounting
Policies
Templeton
Funds (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of three separate
funds.
The
Trust
follows
the
accounting
and
reporting
guidance
in
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946,
Financial
Services
–
Investment
Companies
(ASC
946)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP),
including,
but
not
limited
to,
ASC
946.
Templeton
Foreign
Fund
(Fund)
is
included
in
this
report.
The
Fund
offers five
classes
of
shares:
Class
A,
Class
C,
Class
R,
Class
R6
and
Advisor
Class.
Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years. Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees. 
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
Board),
the
Board
has
designated
the
Fund’s
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Fund’s
administrator
in
performing
this
responsibility,
including
leading
the
cross-
functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-
counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Investments
in
open-end
mutual
funds
are
valued
at
the
closing
NAV.
Investments
in
time
deposits
are
valued
at
cost,
which
approximates
fair
value.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day.
Events
can
occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund’s
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
February
28,
2023,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
23
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
were
categorized
as
Level
2
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the
Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
The
Fund
does
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Derivative
Financial
Instruments
The
Fund invested
in
derivative
financial
instruments
in
order
to
manage
risk
or
gain
exposure
to
various
other
investments
or
markets.
Derivatives
are
financial
contracts
based
on
an
underlying
or
notional
amount,
require
no
initial
investment
or
an
initial
net
investment
that
is
smaller
than
would
normally
be
required
to
have
a
similar
response
to
changes
in
market
factors,
and
require
or
permit
net
settlement.
Derivatives
contain
various
risks
including
the
potential
inability
of
the
counterparty
to
fulfill
their
obligations
under
the
terms
of
the
contract,
the
potential
for
an
illiquid
secondary
market,
and/or
the
potential
for
market
movements
which
expose
the
Fund
to
gains
or
losses
in
excess
of
the
amounts
shown
in
the
Statement
of
Assets
and
Liabilities.
Realized
gain
and
loss
and
unrealized
appreciation
and
depreciation
on
these
contracts
for
the
period
are
included
in
the
Statement
of
Operations.
The
Fund
purchased
or
wrote
exchange
traded
option
contracts
primarily
to
manage
and/or
gain
exposure
to
equity
price
risk.
An
option
is
a
contract
entitling
the
holder
to
purchase
or
sell
a
specific
amount
of
shares
or
units
of
an
asset
or
notional
amount
of
a
swap
(swaption),
at
a
specified
price.
When
an
option
is
purchased
or
written,
an
amount
equal
to
the
premium
paid
or
received
is
recorded
as
an
asset
or
liability,
respectively.
Upon
exercise
of
an
option,
the
acquisition
cost
or
sales
proceeds
of
the
underlying
investment
is
adjusted
by
any
premium
received
or
paid.
Upon
expiration
of
an
option,
any
premium
received
or
paid
is
recorded
as
a
realized
gain
or
loss.
Upon
closing
an
option
other
than
through
expiration
or
exercise,
the
difference
between
the
premium
received
or
paid
and
the
cost
to
close
the
position
is
recorded
as
a
realized
gain
or
loss.
At
February
28,
2023,
the
Fund
had
no
options.
See
Note 9
regarding
other
derivative
information.
d.
Securities
Lending
The
Fund
participates
in
an
agency
based
securities
lending
program
to
earn
additional
income.
The
Fund
receives
collateral
in
the
form
of
cash
and/or
U.S.
Government
and
Agency
securities
against
the
loaned
securities
in
an
amount
equal
to
at
least
102%
of
the
fair
value
of
the
loaned
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
24
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
100%
of
the
fair
value
of
loaned
securities,
as
determined
at
the
close
of
Fund
business
each
day;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
Fund
on
the
next
business
day.
Any
cash
collateral
received
is
deposited
into
a
joint
cash
account
with
other
funds
and
is
used
to
invest
in
a
money
market
fund
managed
by
Franklin
Advisers,
Inc.,
an
affiliate
of
the Fund.
Additionally, the
Fund
held $25,417,392
in
U.S.
Government
and
Agency
securities
as
collateral.
These
securities
are
held as
collateral
in
segregated
accounts
with
the
Fund’s
custodian.
The
Fund
cannot
repledge
or
resell
these
securities
held
as
collateral.
As
such,
the
non-cash
collateral
is
excluded
from
the
Statement
of
Assets
and
Liabilities.
The
Fund
may
receive
income
from
the
investment
of
cash
collateral,
in
addition
to
lending
fees
and
rebates
paid
by
the
borrower.
Income
from
securities
loaned,
net
of
fees
paid
to
the
securities
lending
agent
and/
or
third-party
vendor,
is
reported
separately
in
the
Statement
of
Operations.
The
Fund
bears
the
market
risk
with
respect
to any
cash collateral
investment,
securities
loaned,
and
the
risk
that
the
agent
may
default
on
its
obligations
to
the
Fund.
If
the
borrower
defaults
on
its
obligation
to
return
the
securities
loaned,
the
Fund
has
the
right
to
repurchase
the
securities
in
the
open
market
using
the
collateral
received.
The
securities
lending
agent
has
agreed
to
indemnify
the
Fund
in
the
event
of
default
by
a
third
party
borrower.
e.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The
Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
As
a
result
of
several
court
cases,
in
certain
countries
across
the
European
Union, the
Fund
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims). Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
Statement
of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statement
of
Assets
and
Liabilities.
Any
fees
associated
with
these
filings
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
When
uncertainty
exists
as
to
the
ultimate
resolution
of
these
proceedings,
the
likelihood
of
receipt
of
these
EU
reclaims,
and
the
potential
timing
of
payment,
no
amounts
are
reflected
in
the
financial
statements.
For
U.S.
income
tax
purposes,
EU
reclaims
received
by
the
Fund,
if
any,
reduce
the
amount
of
foreign
taxes
Fund
shareholders
can
use
as
tax
deductions
or credits
on
their
income
tax
returns.
In
the
event
that
EU
reclaims
received
by
the Fund
during a
fiscal
year
exceed
foreign
withholding
taxes
paid
by
the
Fund,
and
the
Fund previously
passed
through to
its
shareholders
foreign
taxes
incurred
by
the
Fund
to
be
used
as
a
credit
or
deduction
on
a
shareholder’s
income
tax
return,
the Fund
will enter
into
a
closing
agreement
with
the
Internal
Revenue
Service
(IRS)
in
order
to
pay
the
associated
tax
liability
on
behalf
of
the Fund's
shareholders.
The
Fund
determined
to
enter
into
a
closing
agreement
with
the
IRS
and
recorded
the
estimated payments
as
a
reduction
to
income,
as
reflected
in
the
Statement
of
Operations.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
February
28,
2023,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests.
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Securities
Lending
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
25
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
and
estimated
expenses
are
accrued
daily.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
g.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
h.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Fund,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust’s
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
February
28,
2023,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Six
Months
Ended
February
28,
2023
Year
Ended
August
31,
2022
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
8,040,652
$55,799,882
15,055,350
$108,801,684
Shares
issued
in
reinvestment
of
distributions
..........
2,451,682
16,720,474
9,189,754
64,695,870
Shares
redeemed
...............................
(18,691,952)
(125,480,976)
(56,182,941)
(413,848,823)
Net
increase
(decrease)
..........................
(8,199,618)
$(52,960,620)
(31,937,837)
$(240,351,269)
Class
C
Shares:
Shares
sold
...................................
207,240
$1,404,073
417,818
$3,009,157
Shares
issued
in
reinvestment
of
distributions
..........
7,483
51,187
139,410
982,841
Shares
redeemed
a
..............................
(850,604)
(5,481,197)
(1,823,590)
(13,038,241)
Net
increase
(decrease)
..........................
(635,881)
$(4,025,937)
(1,266,362)
$(9,046,243)
1.
Organization
and
Significant
Accounting
Policies
(continued)
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Trust
are
also
officers
and/or
directors
of
the
following
subsidiaries:
Six
Months
Ended
February
28,
2023
Year
Ended
August
31,
2022
Shares
Amount
Shares
Amount
Class
R
Shares:
Shares
sold
...................................
891,907
$5,809,744
2,580,769
$18,083,292
Shares
issued
in
reinvestment
of
distributions
..........
163,984
1,092,131
662,175
4,555,764
Shares
redeemed
...............................
(1,669,154)
(11,184,148)
(2,688,708)
(18,882,225)
Net
increase
(decrease)
..........................
(613,263)
$(4,282,273)
554,236
$3,756,831
Class
R6
Shares:
Shares
sold
...................................
5,611,314
$37,817,733
10,791,025
$76,072,674
Shares
issued
in
reinvestment
of
distributions
..........
634,986
4,241,705
2,743,028
18,899,459
Shares
redeemed
...............................
(7,425,099)
(49,434,501)
(36,204,674)
(253,945,383)
Net
increase
(decrease)
..........................
(1,178,799)
$(7,375,063)
(22,670,621)
$(158,973,250)
Advisor
Class
Shares:
Shares
sold
...................................
9,714,355
$63,063,108
54,602,589
$402,173,464
Shares
issued
in
reinvestment
of
distributions
..........
1,223,343
8,184,167
4,600,357
31,742,463
Shares
redeemed
...............................
(21,235,552)
(137,791,861)
(43,367,478)
(300,074,417)
Net
increase
(decrease)
..........................
(10,297,854)
$(66,544,586)
15,835,468
$133,841,510
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Templeton
Global
Advisors
Limited
(Global
Advisors)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
2.
Shares
of
Beneficial
Interest
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Global
Advisors
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
February
28,
2023,
the
annualized
gross
effective
investment
management
fee
rate
was
0.696%
of
the
Fund’s
average
daily
net
assets. 
b.
Administrative
Fees
Under
an
agreement
with
Global
Advisors,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Global
Advisors
based
on
the
Fund’s
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
and
R
compensation
distribution
plans,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
Annualized
Fee
Rate
Net
Assets
0.705%
Up
to
and
including
$1
billion
0.690%
Over
$1
billion,
up
to
and
including
$5
billion
0.675%
Over
$5
billion,
up
to
and
including
$10
billion
0.655%
Over
$10
billion,
up
to
and
including
$15
billion
0.635%
Over
$15
billion,
up
to
and
including
$20
billion
0.615%
Over
$20
billion,
up
to
and
including
$25
billion
0.605%
Over
$25
billion,
up
to
and
including
$30
billion
0.595%
Over
$30
billion,
up
to
and
including
$35
billion
0.585%
In
excess
of
$35
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
Class
R
....................................................................................
0.50%
3.
Transactions
with
Affiliates
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
Effective
October
1,
2022,
the
fees
are
based
on
an
annualized
asset
based
fee
of
0.016%
plus
a
reduced
transaction
based
fee.
Prior
to
October
1,
2022,
the
fees
were
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6, reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
February
28,
2023,
the
Fund
paid
transfer
agent
fees
of
$2,012,737,
of
which
$619,858
was retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
February
28,
2023,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Global
Advisors
has
contractually
agreed
in
advance
to
waive
or
limit
its
respective
fees
and
to
assume
as
its
own
expense
certain
expenses
otherwise
payable
by
the
Fund
so
that
the
operating
expenses
(excluding
interest
expense,
distribution
fees,
acquired
fund
fees
and
expenses,
and
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations)
for
each
class
of
the
Fund
do
not
exceed
0.85%,
based
on
the
average
net
assets
of
each
class
until
December
31,
2023.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Fund's
fiscal
year
end.
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$23,172
CDSC
retained
..............................................................................
$1,943
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
Foreign
Fund
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
4.204%
$23,064,789
$22,545,194
$(42,522,483)
$—
$—
$3,087,500
3,087,500
$150,899
Total
Affiliated
Securities
...
$23,064,789
$22,545,194
$(42,522,483)
$—
$—
$3,087,500
$150,899
3.
Transactions
with
Affiliates
(continued)
d.
Sales
Charges/Underwriting
Agreements
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
29
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
December
31,
2023.
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
August
31,
2022,
the
capital
loss
carryforwards
were
as
follows:
At
February
28,
2023,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
foreign
currency
transactions,
passive
foreign
investment
company
shares
and
wash
sales.
5.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
February
28,
2023,
aggregated
$175,562,551
and
$425,840,753,
respectively.
At
February
28,
2023,
in
connection
with
securities
lending
transactions,
the
Fund
loaned
equity
investments
and
received
$3,087,500
of
cash
collateral.
The
gross
amount
of
recognized
liability
for
such
transactions
is
included
in
payable
upon
return
of
securities
loaned
in
the
Statement
of
Assets
and
Liabilities.
The
agreements
can
be
terminated
at
any
time.
6.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Political
and
financial
uncertainty
in
many
foreign
regions
may
increase
market
volatility
and
the
economic
risk
of
investing
in
foreign
securities.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Templeton
Foreign
Fund
Capital
loss
carryforwards
not
subject
to
expiration:
Long
term
................................................................................
$370,153,566
Cost
of
investments
..........................................................................
$2,584,069,295
Unrealized
appreciation
........................................................................
$516,857,594
Unrealized
depreciation
........................................................................
(333,643,205)
Net
unrealized
appreciation
(depreciation)
..........................................................
$183,214,389
3.
Transactions
with
Affiliates
(continued)
g.
Waiver
and
Expense
Reimbursements
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
30
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
7.
Geopolitical
Risk 
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
8.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
9.
Other
Derivative
Information
For
the
period
ended
February
28,
2023,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
February
28,
2023,
the
average
month
end
notional
amount
of
options
represented
26,714
shares.
See
Note
1(c) regarding
derivative
financial
instruments. 
10.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
2,
2024.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the Statement
of
Operations.
During
the
period
ended
February
28,
2023,
the Fund
did
not
use
the
Global
Credit
Facility.
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Period
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Period
Templeton
Foreign
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Equity
Contracts
..............
Written
options
$128,973
Written
options
$—
Total
.......................
$128,973
$–
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
11.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
February
28,
2023,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
12.
New
Accounting
Pronouncements
In June
2022,
the FASB
issued
Accounting
Standards
Update
(ASU)
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
has
reviewed
the
requirements
and
believes
that
the
adoption
of
the
ASU
will
not
have
a
material
impact
on
the
financial
statements.
Level
1
Level
2
Level
3
Total
Templeton
Foreign
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
China
...............................
$
58,001,109
$
142,979,575
$
—
$
200,980,684
France
...............................
—
156,659,618
—
156,659,618
Germany
.............................
—
375,861,368
—
375,861,368
Hong
Kong
...........................
—
106,139,129
—
106,139,129
India
................................
—
55,805,251
—
55,805,251
Ireland
...............................
—
42,980,710
—
42,980,710
Japan
...............................
—
298,739,041
—
298,739,041
Netherlands
...........................
—
282,191,477
—
282,191,477
Portugal
..............................
—
34,269,144
—
34,269,144
South
Korea
..........................
—
217,869,181
—
217,869,181
Spain
................................
—
16,323,482
—
16,323,482
Switzerland
...........................
—
53,196,754
—
53,196,754
Taiwan
...............................
—
67,714,019
—
67,714,019
Thailand
.............................
—
35,099,728
—
35,099,728
United
Kingdom
........................
—
593,503,191
—
593,503,191
United
States
..........................
65,663,407
—
—
65,663,407
Short
Term
Investments
...................
3,087,500
161,200,000
—
164,287,500
Total
Investments
in
Securities
...........
$126,752,016
$2,640,531,668
a
$—
$2,767,283,684
a
Includes
foreign
securities
valued
at
$2,479,331,668,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
Foreign
Fund
(continued)
13.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Selected
Portfolio
ADR
American
Depositary
Receipt
Currency
GBP
British
Pound
HKD
Hong
Kong
Dollar
Templeton
Funds
Shareholder
Information
33
franklintempleton.com
Semiannual
Report
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
104
S
04/23
©
2023
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Semiannual
Report
and
Shareholder
Letter
Templeton
Foreign
Fund
Investment
Manager
Distributor
Shareholder
Services
Templeton
Global
Advisors
Limited
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
International
Climate
Change
Fund
A
Series
of
Templeton
Funds
February
28,
2023
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Semiannual
Report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
February
28,
2023,
global
equities
rose
despite
continued
challenges
resulting
from
elevated
inflation
and
higher
interest
rates.
The
price
of
oil
fell,
and
several
other
commodities
that
were
disrupted
by
Russia’s
invasion
of
Ukraine
stabilized
at
or
near
their
pre-war
prices,
easing
inflationary
pressure.
China
ended
its
restrictive
zero-COVID
policy,
prompting
investor
optimism
that
a
return
to
normal
conditions
would
benefit
global
growth.
In
this
environment,
stocks
in
global
developed
and
emerging
markets
excluding
the
U.S.,
as
measured
by
the
MSCI
All
Country
World
Index
ex
USA
Index-NR
(net
of
tax
withholding
when
dividends
are
paid),
posted
a
+7.30%
total
return
for
the
period.
1
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
International
Climate
Change
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Alan
Bartlett
Chief
Investment
Officer
Templeton
Global
Equity
Group
This
letter
reflects
our
analysis
and
opinions
as
of
February
28,
2023,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
International
Climate
Change
Fund
3
Performance
Summary
6
Your
Fund’s
Expenses
8
Financial
Highlights
and
Schedule
of
Investments
9
Financial
Statements
15
Notes
to
Financial
Statements
19
Shareholder
Information
28
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
International
Climate
Change
Fund
This
semiannual
report
for
Templeton
International
Climate
Change
Fund
covers
the
period
ended
February
28,
2023.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
total
return
over
the
longer
term.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
“non-U.S.
securities,”
as
defined
in
the
prospectus.
These
securities
are
predominantly
equity
securities
of
companies
located
outside
the
U.S.,
including
developing
markets.
Under
normal
market
conditions,
the
Fund
invests
predominantly
in
companies
that
we
determined
to
exhibit
superior
practices
in
identifying,
adapting
and
providing
solutions
to
the
consequences
of
climate
change
(i.e.,
companies
that,
based
on
our
fundamental
analysis
and
research,
are
able
to
successfully
transition
to
a
lower
carbon
economy).
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
+22.89%
cumulative
total
return
for
the
six
months
under
review.
In
comparison,
the
MSCI
All
Country
World
Index
(ACWI)
ex
USA
Index-
NR,
which
measures
stock
performance
in
global
developed
and
emerging
markets
excluding
the
U.S.,
posted
a
+7.30%
cumulative
total
return.
1
Please
note
index
performance
information
is
provided
for
reference
and
we
do
not
attempt
to
track
the
index
but
rather
undertake
investments
on
the
basis
of
fundamental
research.
You
can
find
more
performance
data
in
the
Performance
Summary
beginning
on
page
6
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Economic
and
Market
Overview
Global
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
ACWI-NR,
posted
a
+3.32%
total
return
for
the
six
months
ended
February
28,
2023.
1
Despite
continued
challenges
from
elevated
inflation
and
higher
interest
rates,
stocks
gained
amid
signs
of
resilience
in
the
global
economy.
The
price
of
oil
fell,
and
several
other
commodities
that
were
disrupted
by
Russia’s
invasion
of
Ukraine
stabilized
at
or
near
their
pre-war
prices,
easing
inflationary
pressure.
China
ended
its
restrictive
zero-COVID
policy,
prompting
investor
optimism
that
a
return
to
normal
conditions
would
benefit
global
growth.
In
the
U.S.,
gross
domestic
product
growth
resumed
in
the
second
half
of
2022,
rebounding
from
contractions
in
the
first
two
quarters
of
the
year.
Increasing
consumer
and
government
spending,
rising
inventories
and
strong
nonresidential
fixed
investment
boosted
economic
growth.
Meanwhile,
inflation,
which
remained
heightened
relative
to
recent
decades,
showed
signs
of
easing.
The
annual
inflation
rate,
as
measured
by
the
consumer
price
index,
declined
each
month
from
September
2022
through
January
2023.
In
an
effort
to
control
inflation,
the
U.S.
Federal
Reserve
(Fed)
raised
the
federal
funds
target
rate
four
times
during
the
period
to
end
at
a
range
of
4.50%–4.75%.
The
Fed
slowed
the
pace
of
its
interest
rate
increases
from
75
basis
points
(bps)
at
its
September
and
November
2022
meetings
to
50
bps
in
December
and
25
bps
in
February
2023.
At
its
February
meeting,
the
Fed
noted
that
although
inflation
has
eased
somewhat,
it
remained
elevated,
and
job
growth
was
robust
while
the
unemployment
rate
continued
to
be
low.
Furthermore,
the
Fed
maintained
its
policy
of
reducing
its
accumulated
bond
holdings
and
decreasing
the
size
of
its
balance
sheet.
Geographic
Composition
2/28/23
%
of
Total
Net
Assets
Europe
61.2%
Asia
24.2%
North
America
7.2%
Latin
America
&
Caribbean
1.1%
Short-Term
Investments
&
Other
Net
Assets
6.3%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
13
.
Templeton
International
Climate
Change
Fund
4
franklintempleton.com
Semiannual
Report
Economies
in
the
eurozone
maintained
a
slow
growth
rate
in
2022’s
third
and
fourth
quarters.
The
European
Central
Bank
continued
to
raise
interest
rates
during
the
six-month
period,
opting
to
increase
its
benchmark
rate
at
each
of
its
four
meetings
to
fight
growing
inflation.
While
the
ongoing
war
in
Ukraine
and
subsequent
sanctions
against
Russia
disrupted
the
supply
of
natural
gas
to
Europe,
alternate
supplies
and
reduced
industrial
consumption
helped
maintain
gas
inventories
at
historically
high
levels.
In
this
environment,
European
developed
market
equities,
as
measured
by
the
MSCI
Europe
Index-NR,
posted
a
+17.69%
total
return
for
the
six
months
under
review.
1
Asian
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
Asia
Index-NR,
posted
a
-0.05%
total
return
for
the
six-month
period.
1
China’s
economy
grew
on
an
annual
basis
in
the
third
and
fourth
quarters
of
2022.
In
December
2022,
China
loosened
its
strict
zero-COVID
policy,
lifting
a
potential
barrier
to
continued
growth
and
driving
gains
in
China’s
equity
market.
Japan’s
economy
weakened
in
2022’s
third
quarter
before
returning
to
modest
growth
in
the
fourth
quarter,
driven
by
rising
private
consumption
amid
loosened
border
controls.
Global
emerging
market
stocks,
as
measured
by
the
MSCI
Emerging
Markets
Index-NR,
posted
a
-2.29%
total
return
for
the
six
months
under
review.
1
Concerns
that
continued
strength
in
the
U.S.
economy
could
keep
Fed
monetary
policy
tight
negatively
impacted
stocks
in
developing
nations.
Stocks
in
these
countries
are
negatively
impacted
by
high
interest
rates
in
the
U.S.,
which
increase
the
yield
of
some
U.S.-based
assets,
making
them
relatively
more
attractive
to
investors.
Investment
Strategy
When
choosing
equity
investments
for
the
Fund,
we
apply
a
bottom-up,
value-oriented,
long-term
approach
to
select
securities
of
companies
we
believe
are
both
undervalued
and
meet
our
standards
for
transitioning
to
a
lower
carbon
economy.
We
focus
on
the
market
price
of
the
company’s
securities
relative
to
our
evaluation
of
the
company’s
long-
term
earnings,
asset
value
and
cash
flow
potential.
Our
analysis
includes
an
assessment
of
the
potential
impacts
of
material
environmental,
social
and
governance
(ESG)
factors
on
the
long-term
risk
and
return
profile
of
a
company.
We
also
consider
a
company’s
price/earnings
ratio,
price/cash
flow
ratio,
profit
margins
and
liquidation
value.
Manager’s
Discussion
Templeton
International
Climate
Change
Fund
significantly
outperformed
its
benchmark
index
during
the
six-month
period
ending
February
28,
2023.
Relative
performance
was
led
higher
during
the
six
months
by
stock
selection
in
the
industrials
sector.
Some
of
the
more
cyclical
European
holdings
in
this
sector
fared
well
on
the
back
of
a
mild
winter
in
Europe
and
an
easing
of
recessionary
fears.
The
most
significant
contributor
in
the
sector
was
French
building
materials
leader
Cie
de
Saint-
Gobain.
The
company’s
share
price
continued
to
rally
during
the
first
two
months
of
2023
due
to
a
strong
set
of
annual
results,
with
2022
earnings
and
its
guidance
for
full-year
2023
both
coming
in
ahead
of
consensus
expectations.
Saint-Gobain
was
our
largest
position
in
the
Fund
at
period-end
and
we
see
a
potential
for
significant
valuation
opportunity
as
other
investors
recognize
both
its
positive
environmental
contribution
through
sustainable
building
renovations
and
its
increasingly
resilient
business
structure.
Stock
selection
in
the
information
technology
sector
was
another
key
driver
of
outperformance
during
the
six-month
period,
mostly
due
to
holdings
in
the
semiconductors
&
semiconductor
equipment
industry.
The
industry
struggled
for
much
of
2022
due
to
a
combination
of
recessionary
fears
and
supply
concerns,
but
began
to
rebound
in
the
fourth
quarter.
The
reporting
of
strong
earnings
in
early
2023
from
the
likes
of
STMicroelectronics,
Taiwan
Semiconductor
Manufacturing
Co.
and
Infineon
Technologies
helped
the
industry
continue
its
recovery.
We
like
these
companies
as
high-quality
long-term
plays
on
several
trends
linked
to
decarbonization,
including
the
adoption
of
electric
vehicles,
the
“internet
of
things”
and
digitalization.
Top
10
Industries
2/28/23
%
of
Total
Net
Assets
a
Electrical
Equipment
18.0%
Semiconductors
&
Semiconductor
Equipment
11.8%
Banks
10.8%
Automobiles
10.1%
Multi-Utilities
8.6%
Metals
&
Mining
8.5%
Building
Products
5.8%
Electric
Utilities
5.3%
Auto
Components
3.8%
Containers
&
Packaging
3.8%
Templeton
International
Climate
Change
Fund
5
franklintempleton.com
Semiannual
Report
In
the
financials
sector,
stock
selection
also
made
a
substantial
contribution
to
relative
performance,
led
higher
by
banks
holdings,
with
both
ING
Groep
and
Standard
Chartered
outperforming
strongly
as
higher
net
interest
margins
started
to
feed
through
into
earnings
expectations.
U.K.-headquartered
bank
Standard
Chartered
was
the
leading
performer
during
the
final
month
of
the
reporting
window,
making
a
favorable
contribution
to
Fund
performance
due
to
a
combination
of
strong
earnings
momentum
and
rumors
of
a
potential
takeover.
We
continue
to
believe
many
investors
are
underestimating
the
potential
earnings
the
company
could
generate
from
higher
normalized
interest
rates
globally.
Not
many
holdings
hurt
relative
returns
during
the
reporting
period,
but
the
two
most
significant
detractors
were
both
Japan-based
automotive
manufacturers:
Honda
Motor
and
Toyota
Motor.
Both
companies
underperformed
after
the
Bank
of
Japan
relaxed
its
zero-interest
rate
policy,
which
caused
the
yen
to
appreciate.
With
a
substantial
share
of
profits
located
outside
of
Japan,
the
market
feared
earnings
downgrades
in
both
instances.
Honda,
however,
is
unlikely
to
materially
change
its
guidance
given
its
yen
assumptions
are
still
within
range
of
the
spot
market.
In
any
event,
Honda
is
naturally
hedged,
with
production
based
mostly
in
the
same
locale
as
sales.
From
a
geographic
perspective,
Netherlands,
Germany,
France,
the
U.K.
and
Switzerland
were
the
top
contributors
to
relative
performance,
while
a
lack
of
exposure
to
China
also
proved
beneficial.
Few
countries
detracted
from
relative
returns,
though
stock
selection
in
Spain
and
a
lack
of
exposure
to
Sweden
made
small
negative
contributions.
Thank
you
for
your
continued
participation
in
Templeton
International
Climate
Change
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Craig
Cameron,
CFA
Tina
Sadler,
CFA
Herbert
J.
Arnett,
Jr.
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
February
28,
2023,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
2/28/23
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Cie
de
Saint-Gobain
5.8%
Building
Products,
France
ING
Groep
NV
5.4%
Banks,
Netherlands
Standard
Chartered
plc
5.3%
Banks,
United
Kingdom
SSE
plc
4.4%
Electric
Utilities,
United
Kingdom
E.ON
SE
4.3%
Multi-Utilities,
Germany
Veolia
Environnement
SA
4.3%
Multi-Utilities,
France
Prysmian
SpA
4.2%
Electrical
Equipment,
Italy
Signify
NV
4.2%
Electrical
Equipment,
United
States
Sumitomo
Metal
Mining
Co.
Ltd.
4.1%
Metals
&
Mining,
Japan
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.
4.1%
Semiconductors
&
Semiconductor
Equipment,
Taiwan
Top
10
Countries
2/28/23
a
%
of
Total
Net
Assets
a
a
France
13.8%
Germany
12.1%
United
Kingdom
11.0%
Japan
10.5%
United
States
7.2%
Netherlands
5.4%
Italy
4.2%
Taiwan
4.1%
Denmark
3.8%
Ireland
3.8%
CFA
®
is
a
trademark
owned
by
CFA
Institute.
Performance
Summary
as
of
February
28,
2023
Templeton
International
Climate
Change
Fund
6
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
2/28/23
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
6-Month
+22.89%
+16.13%
1-Year
-2.31%
-7.69%
3-Year
+37.94%
+9.24%
Since
Inception
(6/1/18)
+30.73%
+4.56%
Advisor
6-Month
+23.06%
+23.06%
1-Year
-2.01%
-2.01%
3-Year
+39.06%
+11.62%
Since
Inception
(6/1/18)
+32.41%
+6.09%
See
page
7
for
Performance
Summary
footnotes.
Templeton
International
Climate
Change
Fund
Performance
Summary
7
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Equity
securities
are
subject
to
price
fluctuation
and
possible
loss
of
principal.
Diversification
does
not
guarantee
a
profit
or
protect
against
loss.
Special
risks
are
associated
with
foreign
investing,
including
currency
fluctuations,
economic
instability
and
political
developments;
investments
in
developing
markets
involve
heightened
risks
related
to
the
same
factors.
Currency
rates
may
fluctuate
significantly
over
short
periods
of
time,
and
can
reduce
returns.
Investing
in
companies
in
a
specific
region,
including
Europe,
is
subject
to
greater
risks
of
adverse
developments
in
that
region
and/or
the
surrounding
regions
than
an
investment
vehicle
that
is
more
broadly
diversified
geographically.
Investments
in
developing
markets,
of
which
frontier
markets
are
a
subset,
involve
heightened
risks
related
to
the
same
factors,
in
addition
to
those
associated
with
these
markets'
smaller
size,
lesser
liquidity
and
lack
of
established
legal,
political,
business
and
social
frameworks
to
support
securities
markets.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio,
which
may
result
in
significant
volatility
and
cause
losses
(as
well
as
enable
gains)
on
an
amount
that
exceeds
the
initial
investment.
The
managers’
environmental,
social
and
governance
(ESG)
strategies
may
limit
the
types
and
number
of
investments
available
and,
as
a
result,
may
forego
favorable
market
opportunities
or
underperform
strategies
that
are
not
subject
to
such
criteria.
ESG
factors
or
criteria
are
subjective
and
qualitative,
and
the
analysis
by
the
manager
may
not
always
accurately
assess
ESG
practices
of
a
security
or
issuer,
or
reflect
the
opinions
of
other
investors
or
advisors.
There
is
no
guarantee
that
the
strategy's
ESG
directives
will
be
successful
or
will
result
in
better
performance
and
may
not
work
as
intended.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
Gross
expenses
are
the
Fund’s
total
annual
operating
expenses
as
of
the
Fund's
prospectus
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
Net
expenses
reflect
contractual
fee
waivers,
expense
caps
and/or
reimbursements,
which
cannot
be
terminated
prior
to
12/31/23
without
Board
consent.
Additional
amounts
may
be
voluntarily
waived
and/or
reimbursed
and
may
be
modified
or
discontinued
at
any
time
without
notice.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Effective
6/3/22,
the
Fund
began
offering
Class
A
shares.
Class
A
performance
shown
has
been
calculated
as
follows:
(a)
for
periods
prior
to
6/3/22,
a
restated
figure
is
used
based
on
the
Fund’s
Advisor
Class
performance
that
includes
any
Rule
12b-1
rate
differential
that
exists
between
Class
A
and
Advisor
Class;
and
(b)
for
periods
after
6/3/22,
actual
Class
A
performance
is
used,
reflecting
all
charges
and
fees
applicable
to
that
class.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(9/1/22–2/28/23)
Share
Class
Net
Investment
Income
Long-Term
Capital
Gain
Total
A
$0.1532
$0.4095
$0.5627
C
$0.1272
$0.4095
$0.5367
R6
$0.1528
$0.4095
$0.5623
Advisor
$0.1520
$0.4095
$0.5615
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.22%
18.81%
Advisor
0.97%
9.16%
Your
Fund’s
Expenses
Templeton
International
Climate
Change
Fund
8
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
9/1/22
Ending
Account
Value
2/28/23
Expenses
Paid
During
Period
9/1/22–2/28/23
1,2
Ending
Account
Value
2/28/23
Expenses
Paid
During
Period
9/1/22–2/28/23
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,228.90
$6.48
$1,018.98
$5.87
1.17%
C
$1,000
$1,229.30
$5.91
$1,019.49
$5.35
1.07%
R6
$1,000
$1,230.70
$5.20
$1,020.13
$4.71
0.94%
Advisor
$1,000
$1,230.60
$5.15
$1,020.18
$4.66
0.93%
Templeton
Funds
Financial
Highlights
Templeton
International
Climate
Change
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
9
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
a
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
......................................................
$9.73
$11.44
Income
from
investment
operations
b
:
Net
investment
income
c
..............................................................
0.02
0.03
Net
realized
and
unrealized
gains
(losses)
................................................
2.13
(1.74)
Total
from
investment
operations
.........................................................
2.15
(1.71)
Less
distributions
from:
Net
investment
income
...............................................................
(0.15)
—
Net
realized
gains
..................................................................
(0.41)
—
Total
distributions
....................................................................
(0.56)
—
Net
asset
value,
end
of
period
...........................................................
$11.32
$9.73
Total
return
d
........................................................................
22.89%
(15.03)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.........................
9.11%
18.81%
Expenses
net
of
waiver
and
payments
by
affiliates
............................................
1.17%
1.23%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
..........................
1.17%
1.22%
Net
investment
income
................................................................
0.33%
1.41%
Supplemental
data
Net
assets,
end
of
period
(000’s)
.........................................................
$201
$4
Portfolio
turnover
rate
.................................................................
15.
58%
35.15%
a
For
the
period
June
3,
2022
(effective
date)
to
August
31,
2022.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Funds
Financial
Highlights
Templeton
International
Climate
Change
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
a
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
......................................................
$9.71
$11.44
Income
from
investment
operations
b
:
Net
investment
income
c
..............................................................
0.02
0.01
Net
realized
and
unrealized
gains
(losses)
................................................
2.15
(1.74)
Total
from
investment
operations
.........................................................
2.17
(1.73)
Less
distributions
from:
Net
investment
income
...............................................................
(0.13)
—
Net
realized
gains
..................................................................
(0.41)
—
Total
distributions
....................................................................
(0.54)
—
Net
asset
value,
end
of
period
...........................................................
$11.34
$9.71
Total
return
d
........................................................................
22.93%
(15.12)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.........................
8.95%
18.95%
Expenses
net
of
waiver
and
payments
by
affiliates
............................................
1.07%
1.98%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
..........................
1.07%
1.97%
Net
investment
income
................................................................
0.33%
0.57%
Supplemental
data
Net
assets,
end
of
period
(000’s)
.........................................................
$5
$4
Portfolio
turnover
rate
.................................................................
15.58%
35.15%
a
For
the
period
June
3,
2022
(effective
date)
to
August
31,
2022.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Funds
Financial
Highlights
Templeton
International
Climate
Change
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
a
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
......................................................
$9.73
$11.44
Income
from
investment
operations
b
:
Net
investment
income
c
..............................................................
0.02
0.04
Net
realized
and
unrealized
gains
(losses)
................................................
2.16
(1.75)
Total
from
investment
operations
.........................................................
2.18
(1.71)
Less
distributions
from:
Net
investment
income
...............................................................
(0.15)
—
Net
realized
gains
..................................................................
(0.41)
—
Total
distributions
....................................................................
(0.56)
—
Net
asset
value,
end
of
period
...........................................................
$11.35
$9.73
Total
return
d
........................................................................
23.07%
(14.95)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.........................
9.81%
20.46%
Expenses
net
of
waiver
and
payments
by
affiliates
............................................
0.94%
0.98%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
..........................
0.94%
0.97%
Net
investment
income
................................................................
0.45%
1.57%
Supplemental
data
Net
assets,
end
of
period
(000’s)
.........................................................
$5
$4
Portfolio
turnover
rate
.................................................................
15.58%
35.15%
a
For
the
period
June
3,
2022
(effective
date)
to
August
31,
2022.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Funds
Financial
Highlights
Templeton
International
Climate
Change
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
Year
Ended
August
31,
2018
a
2022
2021
2020
2019
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$9.74
$14.68
$10.71
$8.91
$9.64
$10.00
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.02
0.18
0.10
0.07
0.27
0.04
Net
realized
and
unrealized
gains
(losses)
2.16
(4.39)
3.96
2.03
(0.93)
(0.40)
Total
from
investment
operations
........
2.18
(4.21)
4.06
2.10
(0.66)
(0.36)
Less
distributions
from:
Net
investment
income
..............
(0.15)
(0.13)
(0.09)
(0.30)
(0.05)
—
Net
realized
gains
.................
(0.41)
(0.60)
—
—
(0.02)
—
Total
distributions
...................
(0.56)
(0.73)
(0.09)
(0.30)
(0.07)
—
Net
asset
value,
end
of
period
..........
$11.36
$9.74
$14.68
$10.71
$8.91
$9.64
Total
return
d
.......................
23.06%
(29.83)%
37.89%
23.70%
(6.75)%
(3.60)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
8.84%
9.16%
8.16%
6.48%
9.65%
13.30%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.93%
0.98%
0.97%
0.97%
0.97%
0.97%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.93%
0.97%
0.97%
f
0.97%
0.97%
0.97%
Net
investment
income
...............
0.47%
1.47%
0.80%
0.74%
2.94%
1.51%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$2,341
$1,968
$2,935
$2,142
$1,783
$1,929
Portfolio
turnover
rate
................
15.58%
35.15%
53.37%
39.99%
9.55%
7.95%
a
For
the
period
June
1,
2018
(commencement
of
operations)
to
August
31,
2018.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Funds
Schedule
of
Investments
(unaudited),
February
28,
2023
Templeton
International
Climate
Change
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
a
Industry
Shares
a
Value
a
Common
Stocks
93.7%
Chile
1.1%
Antofagasta
plc
..................
Metals
&
Mining
1,451
$
27,369
Denmark
3.8%
Vestas
Wind
Systems
A/S
..........
Electrical
Equipment
3,429
97,844
France
13.8%
Cie
de
Saint-Gobain
..............
Building
Products
2,497
148,379
Valeo
.........................
Auto
Components
4,644
96,478
Veolia
Environnement
SA
..........
Multi-Utilities
3,634
108,454
353,311
Germany
12.1%
Bayerische
Motoren
Werke
AG
......
Automobiles
930
95,944
E.ON
SE
.......................
Multi-Utilities
10,078
109,960
Infineon
Technologies
AG
..........
Semiconductors
&
Semiconductor
Equipment
2,876
101,742
307,646
Hong
Kong
1.0%
a
Cadeler
A/S
....................
Construction
&
Engineering
5,443
24,631
India
2.4%
Kaveri
Seed
Co.
Ltd.
..............
Food
Products
3,124
19,500
NHPC
Ltd.
.....................
Independent
Power
and
Renewable
Electricity
Producers
90,016
42,636
62,136
Ireland
3.8%
Smurfit
Kappa
Group
plc
...........
Containers
&
Packaging
2,577
96,139
Italy
4.2%
Prysmian
SpA
...................
Electrical
Equipment
2,802
107,723
Japan
10.5%
Honda
Motor
Co.
Ltd.
.............
Automobiles
3,465
90,108
Sumitomo
Metal
Mining
Co.
Ltd.
.....
Metals
&
Mining
2,842
105,802
Toyota
Motor
Corp.
...............
Automobiles
5,200
70,879
266,789
Netherlands
5.4%
ING
Groep
NV
..................
Banks
9,919
138,818
Norway
3.3%
Norsk
Hydro
ASA
................
Metals
&
Mining
11,604
84,471
Singapore
3.7%
STMicroelectronics
NV
............
Semiconductors
&
Semiconductor
Equipment
1,973
94,510
South
Korea
2.6%
Samsung
SDI
Co.
Ltd.
............
Electronic
Equipment,
Instruments
&
Components
125
65,777
Spain
3.7%
Red
Electrica
Corp.
SA
............
Electric
Utilities
1,371
22,743
a
Soltec
Power
Holdings
SA
..........
Electrical
Equipment
11,567
71,036
93,779
Taiwan
4.1%
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.,
ADR
..................
Semiconductors
&
Semiconductor
Equipment
1,200
104,484
Templeton
Funds
Schedule
of
Investments
(unaudited)
Templeton
International
Climate
Change
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Shares
a
Value
a
Common
Stocks
(continued)
United
Kingdom
11.0%
AstraZeneca
plc
.................
Pharmaceuticals
262
$
34,130
SSE
plc
.......................
Electric
Utilities
5,351
111,982
Standard
Chartered
plc
............
Banks
14,335
135,629
281,741
United
States
7.2%
Schneider
Electric
SE
.............
Electrical
Equipment
475
76,217
b
Signify
NV,
144A,
Reg
S
...........
Electrical
Equipment
3,085
106,896
183,113
Total
Common
Stocks
(Cost
$2,061,667)
.......................................
2,390,281
Short
Term
Investments
8.2%
a
a
Industry
Shares
a
Value
a
a
a
a
a
a
Money
Market
Funds
8.2%
United
States
8.2%
c,d
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
4.204%
.........
208,212
208,212
Total
Money
Market
Funds
(Cost
$208,212)
.....................................
208,212
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$208,212
)
..................................
208,212
a
a
a
Total
Investments
(Cost
$2,269,879)
101.9%
....................................
$2,598,493
Other
Assets,
less
Liabilities
(1.9)%
...........................................
(46,770)
Net
Assets
100.0%
...........................................................
$2,551,723
a
a
a
See
Abbreviations
on
page
27
.
a
Non-income
producing.
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
February
28,
2023,
the
value
of
this
security
was
$106,896,
representing
4.2%
of
net
assets.
c
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
d
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Templeton
Funds
Financial
Statements
Statement
of
Assets
and
Liabilities
February
28,
2023
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
Templeton
International
Climate
Change
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$2,061,667
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
208,212
Value
-
Unaffiliated
issuers
..................................................................
$2,390,281
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
208,212
Cash
....................................................................................
6
Receivables:
Dividends
...............................................................................
5,175
Affiliates
................................................................................
19,869
Total
assets
..........................................................................
2,623,543
Liabilities:
Payables:
Distribution
fees
..........................................................................
40
Professional
fees
.........................................................................
56,010
Deferred
tax
...............................................................................
1,339
Accrued
expenses
and
other
liabilities
...........................................................
14,431
Total
liabilities
.........................................................................
71,820
Net
assets,
at
value
.................................................................
$2,551,723
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$2,256,397
Total
distributable
earnings
(losses)
.............................................................
295,326
Net
assets,
at
value
.................................................................
$2,551,723
Templeton
Funds
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
February
28,
2023
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
Templeton
International
Climate
Change
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$200,612
Shares
outstanding
........................................................................
17,719
Net
asset
value
per
share
a
..................................................................
$11.32
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
................................
$11.98
Class
C:
Net
assets,
at
value
.......................................................................
$4,958
Shares
outstanding
........................................................................
437
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$11.34
Class
R6:
Net
assets,
at
value
.......................................................................
$4,961
Shares
outstanding
........................................................................
437
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$11.35
Advisor
Class:
Net
assets,
at
value
.......................................................................
$2,341,192
Shares
outstanding
........................................................................
206,174
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$11.36
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Funds
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
February
28,
2023
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
Templeton
International
Climate
Change
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$1,943)
Unaffiliated
issuers
........................................................................
$13,423
Non-controlled
affiliates
(Note
3
f
)
.............................................................
1,802
Total
investment
income
...................................................................
15,225
Expenses:
Management
fees
(Note
3
a
)
...................................................................
7,632
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
113
    Class
C
................................................................................
3
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
7
    Class
R6
...............................................................................
24
    Advisor
Class
............................................................................
212
Registration
and
filing
fees
....................................................................
36,937
Professional
fees
...........................................................................
50,450
Trustees'
fees
and
expenses
..................................................................
117
Other
....................................................................................
380
Total
expenses
.........................................................................
95,875
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(85,685)
Net
expenses
.........................................................................
10,190
Net
investment
income
................................................................
5,035
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
(24,847)
Foreign
currency
transactions
................................................................
(8)
Net
realized
gain
(loss)
..................................................................
(24,855)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
486,467
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
267
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
(180)
Net
change
in
unrealized
appreciation
(depreciation)
............................................
486,554
Net
realized
and
unrealized
gain
(loss)
............................................................
461,699
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$466,734
Templeton
Funds
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Templeton
International
Climate
Change
Fund
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$5,035
$36,354
Net
realized
gain
(loss)
.................................................
(24,855)
93,086
Net
change
in
unrealized
appreciation
(depreciation)
...........................
486,554
(978,202)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
466,734
(848,762)
Distributions
to
shareholders:
Class
A
.............................................................
(6,003)
—
Class
C
.............................................................
(235)
—
Class
R6
............................................................
(246)
—
Advisor
Class
........................................................
(113,512)
(147,060)
Total
distributions
to
shareholders
..........................................
(119,996)
(147,060)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
177,766
5,009
Class
C
.............................................................
—
5,000
Class
R6
............................................................
—
5,000
Advisor
Class
........................................................
46,899
25,871
Total
capital
share
transactions
............................................
224,665
40,880
Net
increase
(decrease)
in
net
assets
...................................
571,403
(954,942)
Net
assets:
Beginning
of
period
.....................................................
1,980,320
2,935,262
End
of
period
..........................................................
$2,551,723
$1,980,320
Templeton
Funds
19
franklintempleton.com
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
Templeton
International
Climate
Change
Fund
1.
Organization
and
Significant
Accounting
Policies
Templeton
Funds (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of three separate
funds.
The
Trust
follows
the
accounting
and
reporting
guidance
in
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946,
Financial
Services
–
Investment
Companies
(ASC
946)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP),
including,
but
not
limited
to,
ASC
946.
Templeton
International
Climate
Change
Fund
(Fund)
is
included
in
this
report.
The
Fund
has
five
classes
of
shares:
Class
A,
Class
C,
Class
R,
Class
R6
and
Advisor
Class.
Class
C
shares
automatically
convert
to
Class
A
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees. 
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund’s
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
Board),
the
Board
has
designated
the
Fund’s
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Fund’s
administrator
in
performing
this
responsibility,
including
leading
the
cross-
functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Investments
in
open-end
mutual
funds
are
valued
at
the
closing
NAV.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day. Events
can occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time. In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund's
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
February
28,
2023,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
20
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
were
categorized
as
Level
2
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the
Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
The
Fund
does
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
February
28,
2023,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
d.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Estimated
expenses
are
accrued
daily.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
21
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods. 
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
e.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
f.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust, on
behalf
of
the
Fund,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
February
28,
2023,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Six
Months
Ended
February
28,
2023
Year
Ended
August
31,
2022
a
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
...................................
16,727
$172,073
630
$6,959
Shares
issued
in
reinvestment
of
distributions
..........
559
5,757
—
—
Shares
redeemed
...............................
(4)
(64)
(193)
(1,950)
Net
increase
(decrease)
..........................
17,282
$177,766
437
$5,009
Class
C
Shares:
Shares
sold
...................................
—
$—
437
$5,000
Net
increase
(decrease)
..........................
—
$—
437
$5,000
Class
R6
Shares:
Shares
sold
...................................
—
$—
437
$5,000
Net
increase
(decrease)
..........................
—
$—
437
$5,000
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
22
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
FTIC
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
Six
Months
Ended
February
28,
2023
Year
Ended
August
31,
2022
a
Shares
Amount
Shares
Amount
Advisor
Class
Shares:
Shares
sold
...................................
5,151
$59,387
2,098
$25,871
Shares
issued
in
reinvestment
of
distributions
..........
117
1,212
—
—
Shares
redeemed
...............................
(1,192)
(13,700)
—
—
Net
increase
(decrease)
..........................
4,076
$46,899
2,098
$25,871
a
For
the
period
June
3,
2022
(effective
date)
to
August
31,
2022
for
Classes
A,
C
and
R6.
Subsidiary
Affiliation
Franklin
Templeton
Investments
Corp.
(FTIC)
Investment
manager
Franklin
Templeton
Investment
Management
Ltd.
(FTIML)
Investment
manager
Templeton
Global
Advisors
Ltd.
(Global
Advisors)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.705%
Up
to
and
including
$1
billion
0.690%
Over
$1
billion,
up
to
and
including
$5
billion
0.675%
Over
$5
billion,
up
to
and
including
$10
billion
0.655%
Over
$10
billion,
up
to
and
including
$15
billion
0.635%
Over
$15
billion,
up
to
and
including
$20
billion
0.615%
Over
$20
billion,
up
to
and
including
$25
billion
0.605%
Over
$25
billion,
up
to
and
including
$30
billion
0.595%
Over
$30
billion,
up
to
and
including
$35
billion
0.585%
In
excess
of
$35
billion
2.
Shares
of
Beneficial
Interest
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
23
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
Effective
May
1,
2023,
the
Fund
will
pay
fees,
calculated
daily
and
paid
monthly,
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
February
28,
2023,
the
annualized
gross
effective
investment
management
fee
rate
was 0.705%
of
the
Fund’s
average daily
net
assets. 
Under
a
subadvisory
agreement,
FTIML
and
Global
Advisors,
affiliates
of
FTIC,
provide
subadvisory
services
to
the
Fund.
The
subadvisory
fee
is
paid
by
FTIC
based
on
the
Fund’s
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
b.
Administrative
Fees
Under
an
agreement
with
FTIC,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
FTIC
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class
A
reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class
C
and
R
compensation
distribution
plans,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
Annualized
Fee
Rate
Net
Assets
0.705%
Up
to
and
including
$500
million
0.690%
Over
$500
million,
up
to
and
including
$1
billion
0.675%
Over
$1
billion,
up
to
and
including
$5
billion
0.655%
Over
$5
billion,
up
to
and
including
$10
billion
0.635%
Over
$10
billion,
up
to
and
including
$15
billion
0.615%
Over
$15
billion,
up
to
and
including
$20
billion
0.605%
Over
$20
billion,
up
to
and
including
$25
billion
0.595%
Over
$25
billion,
up
to
and
including
$30
billion
0.585%
In
excess
of
$30
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
Class
R
....................................................................................
0.50%
3.
Transactions
with
Affiliates
(continued)
a.
Management
Fees
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
24
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
Effective
October
1,
2022,
the
fees
are
based
on
an
annualized
asset
based
fee
of
0.016%
plus
a
reduced
transaction
based
fee.
Prior
to
October
1,
2022,
the
fees
were
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6, reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
February
28,
2023,
the
Fund
paid
transfer
agent
fees
of
$243,
which
were
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
February
28,
2023,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
FTIC
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
and
to
assume
as
its
own
expense
certain
expenses
otherwise
payable
by
the
Fund
so
that
the
operating expenses
(excluding
distribution
fees,
acquired
fund
fees
and
expenses
and
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations)
of
the
Fund
does
not
exceed
0.97%
based
on
the
average
net
assets
of
each
class
until
December
31,
2023.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Fund's
fiscal
year
end.
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
December
31,
2023.
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$103
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
International
Climate
Change
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
4.204%
$
81,707
$
542,082
$
(415,577)
$
—
$
—
$
208,212
208,212
$
1,802
Total
Affiliated
Securities
...
$81,707
$542,082
$(415,577)
$—
$—
$208,212
$1,802
3.
Transactions
with
Affiliates
(continued)
d.
Sales
Charges/Underwriting
Agreements
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
25
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
h.
Other
Affiliated
Transactions
At
February
28,
2023,
Franklin
Resources,
Inc.
owned
89.0%
of
the
Fund's
outstanding
shares.
Investment
activities
of
this
shareholder
could
have
a
material
impact
on
the
Fund.
4.
Expense
Offset
Arrangement
The Fund has
entered
into
an
arrangement
with
its
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Fund's
custodian
expenses.
During
the
period
ended
February
28,
2023,
there
were
no
credits
earned. 
5.
Income
Taxes
At
February
28,
2023,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
foreign
currency
transactions,
wash
sales,
foreign
capital
gains
tax
and
corporate
actions.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
February
28,
2023,
aggregated
$335,957
and
$328,385,
respectively.
7.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Political
and
financial
uncertainty
in
many
foreign
regions
may
increase
market
volatility
and
the
economic
risk
of
investing
in
foreign
securities.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
8.
Geopolitical
Risk 
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
Cost
of
investments
..........................................................................
$2,281,676
Unrealized
appreciation
........................................................................
$431,648
Unrealized
depreciation
........................................................................
(114,831)
Net
unrealized
appreciation
(depreciation)
..........................................................
$316,817
3.
Transactions
with
Affiliates
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
9.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
10.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
2,
2024.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the Statement
of
Operations.
During
the
period
ended
February
28,
2023,
the Fund
did
not
use
the
Global
Credit
Facility.
11.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
February
28,
2023,
in
valuing
the
Fund's
assets
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
International
Climate
Change
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Chile
................................
$
—
$
27,369
$
—
$
27,369
Denmark
.............................
—
97,844
—
97,844
France
...............................
—
353,311
—
353,311
Germany
.............................
—
307,646
—
307,646
Hong
Kong
...........................
—
24,631
—
24,631
India
................................
—
62,136
—
62,136
Ireland
...............................
—
96,139
—
96,139
Italy
.................................
—
107,723
—
107,723
Japan
...............................
—
266,789
—
266,789
Netherlands
...........................
—
138,818
—
138,818
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
Templeton
International
Climate
Change
Fund
(continued)
12.
New
Accounting
Pronouncements
In June
2022,
the
FASB
issued
Accounting
Standards
Update
(ASU)
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
has
reviewed
the
requirements
and
believes
that
the
adoption
of
the
ASU
will
not
have
a
material
impact
on
the
financial
statements.
13.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure
other
than
those
already
disclosed
in
the
financial
statements.
Abbreviations
Level
1
Level
2
Level
3
Total
Templeton
International
Climate
Change
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Common
Stocks:
Norway
..............................
$
—
$
84,471
$
—
$
84,471
Singapore
............................
—
94,510
—
94,510
South
Korea
..........................
—
65,777
—
65,777
Spain
................................
—
93,779
—
93,779
Taiwan
...............................
104,484
—
—
104,484
United
Kingdom
........................
—
281,741
—
281,741
United
States
..........................
—
183,113
—
183,113
Short
Term
Investments
...................
208,212
—
—
208,212
Total
Investments
in
Securities
...........
$312,696
$2,285,797
a
$—
$2,598,493
a
Includes
foreign
securities
valued
at
$2,285,797,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
Selected
Portfolio
ADR
American
Depositary
Receipt
11.
Fair
Value
Measurements
(continued)
Templeton
Funds
Shareholder
Information
28
franklintempleton.com
Semiannual
Report
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund's
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
"householding,"
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
6316
S
04/23
©
2023
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Semiannual
Report
and
Shareholder
Letter
Templeton
International
Climate
Change
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Templeton
Investments
Corp.
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
World
Fund
A
Series
of
Templeton
Funds
February
28,
2023
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Semiannual
Report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
February
28,
2023,
global
equities
rose
despite
continued
challenges
resulting
from
elevated
inflation
and
higher
interest
rates.
The
price
of
oil
fell,
and
several
other
commodities
that
were
disrupted
by
Russia’s
invasion
of
Ukraine
stabilized
at
or
near
their
pre-war
prices,
easing
inflationary
pressure.
China
ended
its
restrictive
zero-COVID
policy,
prompting
investor
optimism
that
a
return
to
normal
conditions
would
benefit
global
growth.
In
this
environment,
global
developed
and
emerging
market
stocks,
as
measured
by
the
MSCI
All
Country
World
Index-NR
(net
of
tax
withholding
when
dividends
are
paid),
posted
a
+3.32%
total
return
for
the
period.
1
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
World
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Alan
Bartlett
Chief
Investment
Officer
Templeton
Global
Equity
Group
This
letter
reflects
our
analysis
and
opinions
as
of
February
28,
2023,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
World
Fund
3
Performance
Summary
7
Your
Fund’s
Expenses
9
Financial
Highlights
and
Schedule
of
Investments
10
Financial
Statements
16
Notes
to
Financial
Statements
20
Shareholder
Information
29
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
World
Fund
This
semiannual
report
for
Templeton
World
Fund
covers
the
period
ended
February
28,
2023.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
long-term
capital
growth.
Under
normal
market
conditions,
the
Fund
invests
primarily
in
the
equity
securities
of
companies
located
anywhere
in
the
world,
including
developing
markets.
Under
normal
circumstances,
the
Fund
will
invest
in
issuers
located
in
at
least
three
different
countries
(including
the
U.S.).
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
+5.78%
cumulative
total
return
for
the
six
months
under
review.
In
comparison,
the
Fund’s
benchmark,
the
MSCI
All
Country
World
Index
(ACWI)-NR,
which
measures
stock
performance
in
global
developed
and
emerging
markets,
posted
a
+3.32%
cumulative
total
return.
1
Please
note
index
performance
information
is
provided
for
reference
and
we
do
not
attempt
to
track
the
index
but
rather
undertake
investments
on
the
basis
of
fundamental
research.
You
can
find
more
performance
data
in
the
Performance
Summary
beginning
on
page
7
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Economic
and
Market
Overview
Global
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
ACWI-NR,
posted
a
+3.32%
total
return
for
the
six
months
ended
February
28,
2023.
1
Despite
continued
challenges
from
elevated
inflation
and
higher
interest
rates,
stocks
gained
amid
signs
of
resilience
in
the
global
economy.
The
price
of
oil
fell,
and
several
other
commodities
that
were
disrupted
by
Russia’s
invasion
of
Ukraine
stabilized
at
or
near
their
pre-war
prices,
easing
inflationary
pressure.
China
ended
its
restrictive
zero-COVID
policy,
prompting
investor
optimism
that
a
return
to
normal
conditions
would
benefit
global
growth.
In
the
U.S.,
gross
domestic
product
growth
resumed
in
the
second
half
of
2022,
rebounding
from
contractions
in
the
first
two
quarters
of
the
year.
Increasing
consumer
and
government
spending,
rising
inventories
and
strong
nonresidential
fixed
investment
boosted
economic
growth.
Meanwhile,
inflation,
which
remained
heightened
relative
to
recent
decades,
showed
signs
of
easing.
The
annual
inflation
rate,
as
measured
by
the
consumer
price
index,
declined
each
month
from
September
2022
through
January
2023.
In
an
effort
to
control
inflation,
the
U.S.
Federal
Reserve
(Fed)
raised
the
federal
funds
target
rate
four
times
during
the
period
to
end
at
a
range
of
4.50%–4.75%.
The
Fed
slowed
the
pace
of
its
interest
rate
increases
from
75
basis
points
(bps)
at
its
September
and
November
2022
meetings
to
50
bps
in
December
and
25
bps
in
February
2023.
At
its
February
meeting,
the
Fed
noted
that
although
inflation
has
eased
somewhat,
it
remained
elevated,
and
job
growth
was
robust
while
the
unemployment
rate
continued
to
be
low.
Furthermore,
the
Fed
maintained
its
policy
of
reducing
its
accumulated
bond
holdings
and
decreasing
the
size
of
its
balance
sheet.
Economies
in
the
eurozone
maintained
a
slow
growth
rate
in
2022’s
third
and
fourth
quarters.
The
European
Central
Bank
continued
to
raise
interest
rates
during
the
six-month
period,
opting
to
increase
its
benchmark
rate
at
each
of
its
four
meetings
to
fight
growing
inflation.
While
the
ongoing
war
in
Ukraine
and
subsequent
sanctions
against
Russia
disrupted
the
supply
of
natural
gas
to
Europe,
alternate
supplies
Geographic
Composition
2/28/23
%
of
Total
Net
Assets
North
America
61.9%
Europe
24.1%
Asia
10.9%
Short-Term
Investments
&
Other
Net
Assets
3.1%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
14
.
Templeton
World
Fund
4
franklintempleton.com
Semiannual
Report
and
reduced
industrial
consumption
helped
maintain
gas
inventories
at
historically
high
levels.
In
this
environment,
European
developed
market
equities,
as
measured
by
the
MSCI
Europe
Index-NR,
posted
a
+17.69%
total
return
for
the
six
months
under
review.
1
Asian
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
Asia
Index-NR,
posted
a
-0.05%
total
return
for
the
six-month
period.
1
China’s
economy
grew
on
an
annual
basis
in
the
third
and
fourth
quarters
of
2022.
In
December
2022,
China
loosened
its
strict
zero-COVID
policy,
lifting
a
potential
barrier
to
continued
growth
and
driving
gains
in
China’s
equity
market.
Japan’s
economy
weakened
in
2022’s
third
quarter
before
returning
to
modest
growth
in
the
fourth
quarter,
driven
by
rising
private
consumption
amid
loosened
border
controls.
Global
emerging
market
stocks,
as
measured
by
the
MSCI
Emerging
Markets
Index-NR,
posted
a
-2.29%
total
return
for
the
six
months
under
review.
1
Concerns
that
continued
strength
in
the
U.S.
economy
could
keep
Fed
monetary
policy
tight
negatively
impacted
stocks
in
developing
nations.
Stocks
in
these
countries
are
negatively
impacted
by
high
interest
rates
in
the
U.S.,
which
increase
the
yield
of
some
U.S.-based
assets,
making
them
relatively
more
attractive
to
investors.
Investment
Strategy
Our
investment
strategy
employs
a
bottom-up,
value-
oriented,
long-term
approach.
We
focus
on
the
market
price
of
a
company’s
securities
relative
to
our
evaluation
of
the
company’s
long-term
earnings,
asset
value
and
cash
flow
potential.
We
also
consider
the
company’s
price/earnings
ratio,
price/cash
flow
ratio,
profit
margins
and
liquidation
value.
The
Fund
may
use
a
variety
of
equity-related
derivatives,
which
may
include
equity
futures
and
equity
index
futures,
for
various
purposes
including
enhancing
Fund
returns,
increasing
liquidity
and
gaining
exposure
to
particular
markets
in
more
efficient
or
less
expensive
ways.
The
Fund
also
may
from
time
to
time
engage
in
currency-related
derivatives,
such
as
currency
and
cross-currency
forwards
and
currency
futures
contracts,
to
hedge
some
of
its
foreign
currency
exposure.
Manager’s
Discussion
In
a
six-month
period
characterized
by
elevated
uncertainty
and
shifting
market
trends,
Templeton
World
Fund
delivered
absolute
gains
and
outperformed
its
benchmark
MSCI
ACWI-NR
by
the
largest
margin
in
six
years.
Outperformance
during
the
period
was
primarily
attributable
to
stock
selection,
which
was
encouraging
given
the
volatility
in
factor
trends
during
the
period.
In
our
view,
outperformance
absent
a
strong
style
regime
is
a
good
sign
as
it
highlights
the
portfolio’s
idiosyncratic
return
potential
and
the
positive
impact
of
stock
selection.
Templeton
World
Fund’s
portfolio
has
a
“quality
value”
bias
that
favors
what
we
view
as
reasonably
valued
companies
with
strong
fundamentals,
good
competitive
positions
and
attractive
growth
prospects.
We
refer
to
the
types
of
companies
that
we
own
as
“leaders”
because,
in
our
assessment,
they
are
either
currently
among
the
best-in-
class
in
their
respective
business
segments
or
they
are
moving
in
that
direction
over
our
investment
horizon.
While
we
like
these
companies
for
their
quality
characteristics,
our
long-term
horizon
and
focus
on
fundamental
valuations
means
that
the
Fund’s
holdings
often
look
quite
different
than
those
found
in
a
simple
quality
factor
index.
To
this
end,
we
were
particularly
pleased
to
outperform
during
a
period
when
the
global
quality
factor
remained
largely
out
of
favor.
Market
leadership
during
the
semiannual
review
period
was
initially
dominated
by
large-capitalization
defensive
U.S.
value
stocks
at
a
time
when
policy
tightening,
U.S.
dollar
strength
and
slowing
economic
indicators
raised
expectations
of
a
global
recession.
As
the
period
progressed,
investors
began
to
focus
on
early
signs
that
inflation
could
be
peaking.
Consequently,
entering
2023,
rising
expectations
of
a
dovish
policy
pivot
from
the
Fed
led
to
a
revival
in
risk
appetite,
a
pull-back
in
the
U.S.
dollar,
and
a
resurgence
in
international
cyclical
growth
stocks.
However,
renewed
signs
of
more
persistent
inflation
late
in
the
period
led
to
increased
hawkishness
from
central
bankers,
causing
a
rotation
out
of
rate-sensitive
emerging
market
stocks
and
back
into
developed
market
equities,
particularly
in
Europe.
Top
10
Industries
2/28/23
%
of
Total
Net
Assets
a
Semiconductors
&
Semiconductor
Equipment
11.6%
Software
11.5%
Oil,
Gas
&
Consumable
Fuels
7.5%
Internet
&
Direct
Marketing
Retail
7.2%
Interactive
Media
&
Services
6.1%
Wireless
Telecommunication
Services
4.9%
Health
Care
Providers
&
Services
4.6%
Beverages
4.2%
Pharmaceuticals
4.0%
Media
3.4%
Templeton
World
Fund
5
franklintempleton.com
Semiannual
Report
European
outperformance
was
the
most
consistent
market
trend
during
a
period
otherwise
characterized
by
ongoing
leadership
rotations.
In
fact,
it
was
the
best
six-month
period
for
European
equities
(relative
to
the
rest
of
the
world)
in
at
least
two
decades
as
mild
winter
weather
quelled
fears
of
an
energy
crisis
on
the
continent
and
investors
gravitated
to
the
region’s
relatively
inexpensive
valuations.
The
Fund’s
European
holdings
were
the
primary
regional
contributors,
led
by
a
favorable
overweighted
allocation
and
stock
selection
in
the
U.K.
Our
European
overweight
also
had
a
meaningfully
positive
currency
impact
given
the
strength
of
both
the
British
pound
and
the
euro
versus
the
U.S.
dollar.
Asian
holdings
also
outperformed,
led
by
stock
selection
and
favorable
allocations
in
Hong
Kong
(overweight)
and
Japan
(underweight).
North
American
holdings
were
the
primary
detractors,
pressured
by
stock
selection
in
the
U.S.
Large-capitalization
technology-adjacent
stocks
in
the
U.S.
were
out
of
favor
during
the
period,
and
our
positions
in
companies
like
e-commerce
retailer
Amazon.com,
internet
search
firm
Alphabet,
media
giant
and
theme
park
operator
Walt
Disney
and
software
developer
Microsoft—all
of
which
we
consider
to
be
reasonably
valued
“leaders”—negatively
impacted
performance.
Of
the
four
aforementioned
stocks,
only
Microsoft
is
an
information
technology
(IT)
sector
constituent
(Amazon
is
consumer
discretionary,
and
Alphabet
and
Disney
hail
from
communication
services).
Thus,
despite
the
pressure
on
technology-adjacent
stocks,
the
Fund’s
IT
holdings
were
actually
the
top
contributors
during
the
period.
Stock
selection
also
contributed.
Absolute
and
relative
returns
were
significantly
supported
by
our
avoidance
of
what
we
viewed
as
expensive
technology
stocks
with
uncertain
paths
to
profitability,
and
focused
instead
on
established
leaders
like
German
enterprise
software
firm
SAP
and
a
handful
of
cyclically
depressed
semiconductor
stocks
(Germany’s
Infineon
Technologies
and
U.S.-based
Microchip
Technology
and
Applied
Materials
were
all
among
the
top
10
contributors).
Industrials
was
the
other
major
sector
contributor
during
the
period,
led
by
U.K.
aerospace
and
defense
firm
Rolls-
Royce
Holdings,
which
rallied
on
strong
earnings
results.
The
company
is
in
the
midst
of
a
strategic
review,
with
new
medium-term
financial
targets
expected
to
be
released
in
the
latter
half
of
2023.
Overall,
the
firm’s
balance
sheet
is
improving,
with
positive
cash
flow
dynamics
and
a
healthy
industry
demand
profile.
Furthermore,
the
ongoing
recovery
in
international
long-haul
travel
significantly
benefits
Rolls-Royce
given
its
long-term
service
contracts,
which
tie
revenues
to
engine
flight
hours.
More
generally,
we
increased
exposure
to
cyclicals
(like
Rolls-Royce)
early
last
year
when
policy
tightening
and
higher
interest
rates
increased
concerns
about
a
possible
global
recession,
creating
select
opportunities
among
economically
sensitive
stocks.
We
trimmed
some
of
these
exposures
during
the
review
period
as
pockets
of
optimism
returned
and
cyclical
stocks
were
re-rated
higher.
Turning
to
detractors,
communication
services
was
the
biggest
laggard,
pressured
by
the
previously
mentioned
Alphabet
and
Disney.
Shares
of
Disney
were
volatile
during
the
period
given
well-known
industry
and
company
challenges,
including
a
leadership
rotation
that
saw
the
replacement
of
the
firm’s
beleaguered
CEO,
Bob
Chapek,
with
former
long-time
Disney
boss
Bob
Iger.
We
have
been
encouraged
by
Iger’s
early
efforts
to
communicate
a
strategy
that
transitions
Disney
out
of
its
expensive
Top
10
Holdings
2/28/23
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Amazon.com,
Inc.
5.4%
Internet
&
Direct
Marketing
Retail,
United
States
Microsoft
Corp.
4.8%
Software,
United
States
Alphabet,
Inc.
4.1%
Interactive
Media
&
Services,
United
States
T-Mobile
US,
Inc.
3.9%
Wireless
Telecommunication
Services,
United
States
SAP
SE
3.5%
Software,
Germany
Salesforce,
Inc.
3.2%
Software,
United
States
UnitedHealth
Group,
Inc.
3.2%
Health
Care
Providers
&
Services,
United
States
LVMH
Moet
Hennessy
Louis
Vuitton
SE
3.0%
Textiles,
Apparel
&
Luxury
Goods,
France
Rolls-Royce
Holdings
plc
3.0%
Aerospace
&
Defense,
United
Kingdom
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.
2.9%
Semiconductors
&
Semiconductor
Equipment,
Taiwan
Top
10
Countries
2/28/23
a
%
of
Total
Net
Assets
a
a
United
States
61.9%
United
Kingdom
9.3%
Germany
7.6%
Japan
3.6%
France
3.0%
Taiwan
2.9%
India
2.3%
Belgium
2.1%
Hong
Kong
2.1%
Netherlands
2.1%
Templeton
World
Fund
6
franklintempleton.com
Semiannual
Report
pursuit
of
streaming
market
share
and
towards
a
path
of
greater
efficiency.
Near-term
pressures
aside,
we
believe
the
changes
underway
at
Disney
have
the
potential
to
significantly
unlock
additional
value
for
shareholders.
Management
plans
to
significantly
cut
costs
and
reinstate
the
company’s
dividend
by
the
end
of
the
year.
Furthermore,
an
activist
investor
remains
involved
and
is
likely
to
keep
pressure
on
management
to
execute
a
strategy
that
we
largely
support.
At
current
valuations,
the
stock
remains
a
core
portfolio
holding.
Financials
was
the
other
notable
sector
laggard
during
the
period,
though
there
were
no
financials
holdings
among
the
Fund’s
10
biggest
detractors.
The
Fund’s
financials
holdings
delivered
high
single-digit
gains,
but
were
pressured
by
a
significant
underweighted
allocation
to
the
market-
leading
sector,
which
benefited
from
rising
interest
rates
and
earnings
expectations.
Our
exposures
to
the
sector
remain
highly
selective.
We’ve
entirely
avoided
banks
in
low-returning,
over-regulated
markets
with
elevated
credit
risk,
and
focused
instead
on
companies
in
the
diversified
financials
and
insurance
industries
operating
in
attractive
end-markets
and
featuring
unique
business
models
and
profit
drivers.
At
Templeton,
we
think
creatively
about
the
many
ways
that
value
gets
created
over
time.
The
result
is
a
process
that
combines
analytical
rigor
with
a
dynamic
approach
to
value
that
covers
a
range
of
different
investment
profiles.
One
of
the
objectives
underpinning
our
use
of
the
full
spectrum
of
value
is
the
independence
it
creates
from
the
large
momentum
shifts
that
so
often
buffet
markets.
We
seek
to
build
portfolios
that
will
not
be
whipsawed
by
the
whims
of
the
equity
market
as
investors
rotate
between
narratives.
If
we
can
successfully
manage
the
volatility
associated
with
these
swings,
we
can
then
focus
on
pursuing
alpha
over
time
through
stock
picking—that
is,
through
the
evaluation
of
long-term
business
fundamentals
and
buying
shares
at
a
discount
to
their
intrinsic
worth.
Templeton
World
Fund
is
full
of
companies
that
we
view
as
attractively
valued
and
high
quality
with
idiosyncratic
risk-return
characteristics.
We
believe
the
portfolio
is
well
positioned
to
support
performance
over
time,
particularly
if
the
market
continues
to
move
away
from
macroeconomic
themes
and
towards
a
more
discriminate
assessment
of
bottom-up
value.
Thank
you
for
your
continued
participation
in
Templeton
World
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Peter
M.
Moeschter,
CFA
Lead
Portfolio
Manager
Herbert
J.
Arnett,
Jr.
Christopher
James
Peel,
CFA
Warren
Pustam,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
February
28,
2023,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
CFA
®
is
a
trademark
owned
by
CFA
Institute.
Performance
Summary
as
of
February
28,
2023
Templeton
World
Fund
7
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
2/28/23
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A
:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
6-Month
+5.78%
-0.05%
1-Year
-11.61%
-16.49%
5-Year
-3.48%
-1.83%
10-Year
+37.31%
+2.64%
Advisor
6-Month
+5.88%
+5.88%
1-Year
-11.44%
-11.44%
5-Year
-2.30%
-0.46%
10-Year
+40.65%
+3.47%
See
page
8
for
Performance
Summary
footnotes.
Templeton
World
Fund
Performance
Summary
8
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Special
risks
are
associated
with
foreign
investing,
including
currency
fluctuations,
economic
instability
and
political
developments;
investments
in
developing
markets
involve
heightened
risks
related
to
the
same
factors.
Currency
rates
may
fluctuate
significantly
over
short
periods
of
time,
and
can
reduce
returns.
Because
the
Fund
may
invest
its
assets
in
companies
in
a
specific
region,
including
Europe,
it
is
subject
to
greater
risks
of
adverse
developments
in
that
region
and/or
the
surrounding
regions
than
a
fund
that
is
more
broadly
diversified
geographically.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio
which
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
(as
well
as
enable
gains)
on
an
amount
that
exceeds
the
Fund’s
initial
investment.
The
Fund
may
not
achieve
the
anticipated
benefits,
and
may
realize
losses
when
a
counterparty
fails
to
perform
as
promised.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
total
annual
operating
expenses
are
as
of
the
Fund's
prospectus
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(9/1/22–2/28/23)
Share
Class
Net
Investment
Income
Long-Term
Capital
Gain
Total
A
$0.0466
$0.1356
$0.1822
C
–
$0.1356
$0.1356
R6
$0.0736
$0.1356
$0.2092
Advisor
$0.0680
$0.1356
$0.2036
Total
Annual
Operating
Expenses
5
Share
Class
A
1.05%
Advisor
0.81%
Your
Fund’s
Expenses
Templeton
World
Fund
9
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursem
ents.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
9/1/22
Ending
Account
Value
2/28/23
Expenses
Paid
During
Period
9/1/22–2/28/23
1,2
Ending
Account
Value
2/28/23
Expenses
Paid
During
Period
9/1/22–2/28/23
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,057.80
$5.38
$1,019.57
$5.28
1.05%
C
$1,000
$1,053.40
$9.21
$1,015.82
$9.04
1.81%
R6
$1,000
$1,058.50
$3.88
$1,021.03
$3.81
0.76%
Advisor
$1,000
$1,058.80
$4.13
$1,020.78
$4.05
0.81%
Templeton
Funds
Financial
Highlights
Templeton
World
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$11.85
$15.52
$12.71
$12.76
$17.24
$16.94
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
........
(—)
c
(—)
c
0.20
d
0.16
0.29
0.28
Net
realized
and
unrealized
gains
(losses)
0.68
(3.44)
2.61
0.45
(2.17)
1.03
Total
from
investment
operations
........
0.68
(3.44)
2.81
0.61
(1.88)
1.31
Less
distributions
from:
Net
investment
income
..............
(0.05)
(0.23)
—
(0.50)
(0.67)
(0.02)
Net
realized
gains
.................
(0.14)
—
—
(0.16)
(1.93)
(0.99)
Total
distributions
...................
(0.19)
(0.23)
—
(0.66)
(2.60)
(1.01)
Net
asset
value,
end
of
period
..........
$12.34
$11.85
$15.52
$12.71
$12.76
$17.24
Total
return
e
.......................
5.78%
(22.39)%
22.11%
4.47%
(10.22)%
7.81%
Ratios
to
average
net
assets
f
Expenses
.........................
1.05%
g
1.04%
1.03%
g
1.05%
1.05%
g
1.04%
h
Net
investment
income
(loss)
..........
(0.03)%
(—)%
i
1.42%
d
1.29%
2.06%
1.64%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$2,120,966
$2,138,297
$3,060,714
$2,831,844
$3,150,057
$3,973,648
Portfolio
turnover
rate
................
23.41%
81.20%
41.83%
52.25%
25.16%
28.39%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Net
investment
income
per
share
includes
approximately
$0.13
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.48%.
e
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
f
Ratios
are
annualized
for
periods
less
than
one
year.
g
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
h
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
i
Rounds
to
less
than
0.01%.
Templeton
Funds
Financial
Highlights
Templeton
World
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$11.30
$14.76
$12.18
$12.26
$16.35
$16.21
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
........
(0.04)
(0.10)
0.10
c
0.07
0.13
0.14
Net
realized
and
unrealized
gains
(losses)
0.64
(3.29)
2.48
0.42
(2.01)
0.99
Total
from
investment
operations
........
0.60
(3.39)
2.58
0.49
(1.88)
1.13
Less
distributions
from:
Net
investment
income
..............
—
(0.07)
—
(0.41)
(0.28)
—
Net
realized
gains
.................
(0.14)
—
—
(0.16)
(1.93)
(0.99)
Total
distributions
...................
(0.14)
(0.07)
—
(0.57)
(2.21)
(0.99)
Net
asset
value,
end
of
period
..........
$11.76
$11.30
$14.76
$12.18
$12.26
$16.35
Total
return
d
.......................
5.34%
(23.01)%
21.18%
3.61%
(10.94)%
7.01%
Ratios
to
average
net
assets
e
Expenses
.........................
1.81%
f
1.81%
1.80%
f
1.82%
1.80%
f
1.80%
g
Net
investment
income
(loss)
..........
(0.79)%
(0.77)%
0.70%
c
0.54%
1.31%
0.88%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$6,415
$7,348
$12,585
$18,630
$28,850
$117,879
Portfolio
turnover
rate
................
23.41%
81.20%
41.83%
52.25%
25.16%
28.39%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.13
per
share
related
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
(0.24)%.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Funds
Financial
Highlights
Templeton
World
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$11.86
$15.53
$12.69
$12.73
$17.21
$16.92
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.02
0.04
0.24
c
0.20
0.34
0.33
Net
realized
and
unrealized
gains
(losses)
0.66
(3.43)
2.60
0.45
(2.17)
1.03
Total
from
investment
operations
........
0.68
(3.39)
2.84
0.65
(1.83)
1.36
Less
distributions
from:
Net
investment
income
..............
(0.07)
(0.28)
—
(0.53)
(0.72)
(0.08)
Net
realized
gains
.................
(0.14)
—
—
(0.16)
(1.93)
(0.99)
Total
distributions
...................
(0.21)
(0.28)
—
(0.69)
(2.65)
(1.07)
Net
asset
value,
end
of
period
..........
$12.33
$11.86
$15.53
$12.69
$12.73
$17.21
Total
return
d
.......................
5.85%
(22.14)%
22.38%
4.71%
(9.88)%
8.13%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
0.78%
0.78%
0.78%
0.79%
0.77%
0.74%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.76%
0.76%
0.76%
0.76%
0.75%
0.72%
f
Net
investment
income
...............
0.26%
0.29%
1.68%
c
1.59%
2.36%
1.96%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$35,645
$34,238
$42,010
$38,885
$43,595
$51,431
Portfolio
turnover
rate
................
23.41%
81.20%
41.83%
52.25%
25.16%
28.39%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.13
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.74%.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Funds
Financial
Highlights
Templeton
World
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$11.86
$15.54
$12.70
$12.74
$17.23
$16.93
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.01
0.03
0.24
c
0.19
0.33
0.32
Net
realized
and
unrealized
gains
(losses)
0.68
(3.44)
2.60
0.45
(2.17)
1.03
Total
from
investment
operations
........
0.69
(3.41)
2.84
0.64
(1.84)
1.35
Less
distributions
from:
Net
investment
income
..............
(0.07)
(0.27)
—
(0.52)
(0.72)
(0.06)
Net
realized
gains
.................
(0.14)
—
—
(0.16)
(1.93)
(0.99)
Total
distributions
...................
(0.21)
(0.27)
—
(0.68)
(2.65)
(1.05)
Net
asset
value,
end
of
period
..........
$12.34
$11.86
$15.54
$12.70
$12.74
$17.23
Total
return
d
.......................
5.88%
(22.22)%
22.36%
4.66%
(9.99)%
8.09%
Ratios
to
average
net
assets
e
Expenses
.........................
0.81%
f
0.81%
0.80%
f
0.81%
0.80%
f
0.80%
g
Net
investment
income
...............
0.21%
0.24%
1.64%
c
1.53%
2.31%
1.88%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$71,079
$86,424
$115,823
$99,546
$112,891
$146,883
Portfolio
turnover
rate
................
23.41%
81.20%
41.83%
52.25%
25.16%
28.39%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Net
investment
income
per
share
includes
approximately
$0.13
per
share
related
to
an
adjustment
for
EU
reclaims
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.70%.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Funds
Schedule
of
Investments
(unaudited),
February
28,
2023
Templeton
World
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Shares
a
Value
a
Common
Stocks
96.9%
Belgium
2.1%
Anheuser-Busch
InBev
SA/NV
......
Beverages
786,720
$
47,721,345
France
3.0%
LVMH
Moet
Hennessy
Louis
Vuitton
SE
Textiles,
Apparel
&
Luxury
Goods
81,820
68,019,192
Germany
7.6%
Deutsche
Boerse
AG
..............
Capital
Markets
334,180
58,272,315
Infineon
Technologies
AG
..........
Semiconductors
&
Semiconductor
Equipment
890,349
31,497,361
SAP
SE
.......................
Software
696,150
79,090,287
168,859,963
Hong
Kong
2.1%
AIA
Group
Ltd.
..................
Insurance
4,460,034
47,399,809
India
2.3%
Housing
Development
Finance
Corp.
Ltd.
.........................
Diversified
Financial
Services
689,200
21,732,473
Reliance
Industries
Ltd.
............
Oil,
Gas
&
Consumable
Fuels
1,041,340
29,215,594
50,948,067
Japan
3.6%
KDDI
Corp.
.....................
Wireless
Telecommunication
Services
768,800
22,495,109
Tokyo
Electron
Ltd.
...............
Semiconductors
&
Semiconductor
Equipment
122,450
42,015,931
Toyota
Industries
Corp.
............
Machinery
287,590
16,874,195
81,385,235
Netherlands
2.1%
Shell
plc
.......................
Oil,
Gas
&
Consumable
Fuels
1,509,990
45,888,471
Taiwan
2.9%
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.
......................
Semiconductors
&
Semiconductor
Equipment
3,923,559
64,375,361
United
Kingdom
9.3%
AstraZeneca
plc
.................
Pharmaceuticals
325,559
42,409,678
BP
plc
.........................
Oil,
Gas
&
Consumable
Fuels
5,743,824
37,742,589
a,b
Just
Eat
Takeaway.com
NV,
144A,
Reg
S
...........................
Internet
&
Direct
Marketing
Retail
1,869,322
40,658,343
a
Rolls-Royce
Holdings
plc
..........
Aerospace
&
Defense
37,885,475
66,002,351
a
S4
Capital
plc
...................
Media
8,235,350
20,298,267
207,111,228
United
States
61.9%
a
Alphabet,
Inc.,
A
.................
Interactive
Media
&
Services
1,026,770
92,470,906
a
Amazon.com,
Inc.
................
Internet
&
Direct
Marketing
Retail
1,278,900
120,510,747
American
Express
Co.
............
Consumer
Finance
97,031
16,882,424
Applied
Materials,
Inc.
.............
Semiconductors
&
Semiconductor
Equipment
396,690
46,075,543
a
Booking
Holdings,
Inc.
............
Hotels,
Restaurants
&
Leisure
11,269
28,442,956
Comcast
Corp.,
A
................
Media
1,498,129
55,685,455
a
DXC
Technology
Co.
..............
IT
Services
1,601,152
44,415,956
Exxon
Mobil
Corp.
................
Oil,
Gas
&
Consumable
Fuels
489,950
53,850,404
a
F5,
Inc.
........................
Communications
Equipment
187,910
26,867,372
Freeport-McMoRan,
Inc.
...........
Metals
&
Mining
358,207
14,675,741
HCA
Healthcare,
Inc.
..............
Health
Care
Providers
&
Services
130,730
31,826,218
a
ICON
plc
.......................
Life
Sciences
Tools
&
Services
256,060
57,774,818
Keurig
Dr
Pepper,
Inc.
.............
Beverages
1,301,562
44,968,967
a
Meta
Platforms,
Inc.,
A
............
Interactive
Media
&
Services
252,579
44,186,170
Microchip
Technology,
Inc.
.........
Semiconductors
&
Semiconductor
Equipment
649,288
52,611,807
Micron
Technology,
Inc.
............
Semiconductors
&
Semiconductor
Equipment
406,086
23,479,893
Templeton
Funds
Schedule
of
Investments
(unaudited)
Templeton
World
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
a
Industry
Shares
a
Value
a
Common
Stocks
(continued)
United
States
(continued)
Microsoft
Corp.
..................
Software
428,341
$
106,836,812
Roche
Holding
AG
...............
Pharmaceuticals
164,681
47,486,473
a
Salesforce,
Inc.
..................
Software
439,880
71,968,767
Schneider
Electric
SE
.............
Electrical
Equipment
226,650
36,367,610
Target
Corp.
....................
Multiline
Retail
268,250
45,200,125
a
T-Mobile
US,
Inc.
................
Wireless
Telecommunication
Services
616,289
87,623,970
a
Uber
Technologies,
Inc.
............
Road
&
Rail
633,930
21,084,512
UnitedHealth
Group,
Inc.
...........
Health
Care
Providers
&
Services
150,742
71,744,147
a
Walt
Disney
Co.
(The)
.............
Entertainment
629,864
62,740,753
Westinghouse
Air
Brake
Technologies
Corp.
........................
Machinery
197,320
20,586,396
Zimmer
Biomet
Holdings,
Inc.
.......
Health
Care
Equipment
&
Supplies
459,817
56,957,532
1,383,322,474
Total
Common
Stocks
(Cost
$2,206,613,248)
....................................
2,165,031,145
Short
Term
Investments
5.2%
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Time
Deposits
5.2%
Canada
3.8%
National
Bank
of
Canada,
4.56%,
3/01/23
......................
29,000,000
29,000,000
Royal
Bank
of
Canada,
4.55%,
3/01/23
42,300,000
42,300,000
Toronto-Dominion
Bank
(The),
4.55%,
3/01/23
......................
14,000,000
14,000,000
85,300,000
France
1.4%
Credit
Agricole
Corporate
and
Investment
Bank
SA,
4.55%,
3/01/23
31,000,000
31,000,000
Total
Time
Deposits
(Cost
$116,300,000)
.......................................
116,300,000
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$116,300,000
)
...............................
116,300,000
a
a
a
Total
Investments
(Cost
$2,322,913,248)
102.1%
................................
$2,281,331,145
Other
Assets,
less
Liabilities
(2.1)%
...........................................
(47,226,028)
Net
Assets
100.0%
...........................................................
$2,234,105,117
a
a
a
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Non-income
producing.
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
February
28,
2023,
the
value
of
this
security
was
$40,658,343,
representing
1.8%
of
net
assets.
Templeton
Funds
Financial
Statements
Statement
of
Assets
and
Liabilities
February
28,
2023
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
Templeton
World
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$2,322,913,248
Value
-
Unaffiliated
issuers
..................................................................
$2,281,331,145
Cash
....................................................................................
53,820
Receivables:
Investment
securities
sold
...................................................................
30,977
Capital
shares
sold
........................................................................
204,813
Dividends
and
interest
.....................................................................
5,793,660
European
Union
tax
reclaims
(Note
1
d
)
.........................................................
623,946
Total
assets
..........................................................................
2,288,038,361
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
36,562,739
Capital
shares
redeemed
...................................................................
881,217
Management
fees
.........................................................................
1,231,308
Distribution
fees
..........................................................................
424,567
Transfer
agent
fees
........................................................................
442,151
Trustees'
fees
and
expenses
.................................................................
59
IRS
closing
agreement
payments
for
European
Union
tax
reclaims
(Note
1
d
)
.............................
13,944,332
Accrued
expenses
and
other
liabilities
...........................................................
446,871
Total
liabilities
.........................................................................
53,933,244
Net
assets,
at
value
.................................................................
$2,234,105,117
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$2,323,011,313
Total
distributable
earnings
(losses)
.............................................................
(88,906,196)
Net
assets,
at
value
.................................................................
$2,234,105,117
Templeton
Funds
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
February
28,
2023
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
Templeton
World
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$2,120,965,923
Shares
outstanding
........................................................................
171,869,592
Net
asset
value
per
share
a
..................................................................
$12.34
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
................................
$13.06
Class
C:
Net
assets,
at
value
.......................................................................
$6,415,261
Shares
outstanding
........................................................................
545,303
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$11.76
Class
R6:
Net
assets,
at
value
.......................................................................
$35,644,879
Shares
outstanding
........................................................................
2,890,192
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$12.33
Advisor
Class:
Net
assets,
at
value
.......................................................................
$71,079,054
Shares
outstanding
........................................................................
5,758,696
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$12.34
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Funds
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
February
28,
2023
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Templeton
World
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$374,904)
Unaffiliated
issuers
........................................................................
$10,211,142
Interest:
Unaffiliated
issuers
........................................................................
1,086,134
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
.....................................................
10,518
Non-controlled
affiliates
(Note
3
f
)
.............................................................
108
Less:
IRS
closing
agreement
payments
for
European
Union
tax
reclaims
(Note
1
d
)
..........................
(207,883)
Total
investment
income
...................................................................
11,100,019
Expenses:
Management
fees
(Note
3
a
)
...................................................................
7,573,001
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
2,522,115
    Class
C
................................................................................
33,437
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
814,742
    Class
C
................................................................................
2,650
    Class
R6
...............................................................................
9,238
    Advisor
Class
............................................................................
30,802
Custodian
fees
.............................................................................
47,708
Reports
to
shareholders
fees
..................................................................
6,163
Registration
and
filing
fees
....................................................................
45,181
Professional
fees
...........................................................................
35,654
Trustees'
fees
and
expenses
..................................................................
121,343
Other
....................................................................................
103,574
Total
expenses
.........................................................................
11,345,608
Expenses
waived/paid
by
affiliates
(Note
3f
and
3g)
..............................................
(4,178)
Net
expenses
.........................................................................
11,341,430
Net
investment
income
(loss)
............................................................
(241,411)
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
(21,469,958)
Foreign
currency
transactions
................................................................
522,607
Net
realized
gain
(loss)
..................................................................
(20,947,351)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
141,968,584
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
237,774
Net
change
in
unrealized
appreciation
(depreciation)
............................................
142,206,358
Net
realized
and
unrealized
gain
(loss)
............................................................
121,259,007
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$121,017,596
Templeton
Funds
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
Templeton
World
Fund
Six
Months
Ended
February
28,
2023
(unaudited)
Year
Ended
August
31,
2022
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
(loss)
............................................
$(241,411)
$166,419
Net
realized
gain
(loss)
.................................................
(20,947,351)
219,790,750
Net
change
in
unrealized
appreciation
(depreciation)
...........................
142,206,358
(902,487,259)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
121,017,596
(682,530,090)
Distributions
to
shareholders:
Class
A
.............................................................
(31,728,587)
(44,013,452)
Class
C
.............................................................
(79,288)
(55,139)
Class
R6
............................................................
(605,219)
(780,101)
Advisor
Class
........................................................
(1,357,839)
(1,988,799)
Total
distributions
to
shareholders
..........................................
(33,770,933)
(46,837,491)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(100,192,715)
(233,613,207)
Class
C
.............................................................
(1,200,294)
(2,686,637)
Class
R6
............................................................
(9,934)
2,778,432
Advisor
Class
........................................................
(18,046,313)
(1,935,608)
Total
capital
share
transactions
............................................
(119,449,256)
(235,457,020)
Net
increase
(decrease)
in
net
assets
...................................
(32,202,593)
(964,824,601)
Net
assets:
Beginning
of
period
.....................................................
2,266,307,710
3,231,132,311
End
of
period
..........................................................
$2,234,105,117
$2,266,307,710
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
Templeton
World
Fund
20
franklintempleton.com
Semiannual
Report
1.
Organization
and
Significant
Accounting
Policies
Templeton
Funds (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of three separate
funds.
The
Trust
follows
the
accounting
and
reporting
guidance
in
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946,
Financial
Services
–
Investment
Companies
(ASC
946)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP),
including,
but
not
limited
to,
ASC
946.
Templeton
World
Fund
(Fund)
is
included
in
this
report.
The
Fund
offers four
classes
of
shares:
Class
A,
Class
C,
Class
R6
and
Advisor
Class. Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees. 
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
Board),
the
Board
has
designated
the
Fund’s
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Fund’s
administrator
in
performing
this
responsibility,
including
leading
the
cross-
functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Investments
in
open-end
mutual
funds
are
valued
at
the
closing
NAV.
Investments
in
time
deposits
are
valued
at
cost,
which
approximates
fair
value.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day.
Events
can
occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund's
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
February
28,
2023,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
21
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
were
categorized
as
Level
2
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the
Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
The
Fund
does
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Securities
Lending
The
Fund
participates
in
an
agency
based
securities
lending
program
to
earn
additional
income.
The
Fund
receives
collateral
in
the
form
of
cash
and/or
U.S.
Government
and
Agency
securities
against
the
loaned
securities
in
an
amount
equal
to
at
least
102%
of
the
fair
value
of
the
loaned
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
100%
of
the
fair
value
of
loaned
securities,
as
determined
at
the
close
of
Fund
business
each
day;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
Fund
on
the
next
business
day.
Any
cash
collateral
received
is
deposited
into
a
joint
cash
account
with
other
funds
and
is
used
to
invest
in
a
money
market
fund
managed
by
Franklin
Advisers,
Inc.,
an
affiliate
of
the Fund.
The
Fund
may
receive
income
from
the
investment
of
cash
collateral,
in
addition
to
lending
fees
and
rebates
paid
by
the
borrower.
Income
from
securities
loaned,
net
of
fees
paid
to
the
securities
lending
agent
and/
or
third-party
vendor,
is
reported
separately
in
the
Statement
of
Operations.
The
Fund
bears
the
market
risk
with
respect
to any
cash collateral
investment,
securities
loaned,
and
the
risk
that
the
agent
may
default
on
its
obligations
to
the
Fund.
If
the
borrower
defaults
on
its
obligation
to
return
the
securities
loaned,
the
Fund
has
the
right
to
repurchase
the
securities
in
the
open
market
using
the
collateral
received.
The
securities
lending
agent
has
agreed
to
indemnify
the
Fund
in
the
event
of
default
by
a
third
party
borrower.
At
February
28,
2023,
the
Fund
had
no
securities
on
loan.
d.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The
Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
22
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
As
a
result
of
several
court
cases,
in
certain
countries
across
the
European
Union, the
Fund
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims). Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
Statement
of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statement
of
Assets
and
Liabilities.
Any
fees
associated
with
these
filings
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
When
uncertainty
exists
as
to
the
ultimate
resolution
of
these
proceedings,
the
likelihood
of
receipt
of
these
EU
reclaims,
and
the
potential
timing
of
payment,
no
amounts
are
reflected
in
the
financial
statements.
For
U.S.
income
tax
purposes,
EU
reclaims
received
by
the
Fund,
if
any,
reduce
the
amount
of
foreign
taxes
Fund
shareholders
can
use
as
tax
deductions
or credits
on
their
income
tax
returns.
In
the
event
that
EU
reclaims
received
by
the Fund
during a
fiscal
year
exceed
foreign
withholding
taxes
paid
by
the
Fund,
and
the
Fund previously
passed
through to
its
shareholders
foreign
taxes
incurred
by
the
Fund
to
be
used
as
a
credit
or
deduction
on
a
shareholder’s
income
tax
return,
the Fund
will enter
into
a
closing
agreement
with
the
Internal
Revenue
Service
(IRS)
in
order
to
pay
the
associated
tax
liability
on
behalf
of
the Fund's
shareholders.
The
Fund
determined
to
enter
into
a
closing
agreement
with
the
IRS
and
recorded
the
estimated
payments
as
a
reduction
to
income,
as
reflected
in
the
Statement
of
Operations.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
February
28,
2023,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
e.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Certain
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
f.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
g.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Income
and
Deferred
Taxes
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
23
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Fund,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
February
28,
2023,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Six
Months
Ended
February
28,
2023
Year
Ended
August
31,
2022
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
3,199,961
$37,639,342
7,163,158
$100,026,779
Shares
issued
in
reinvestment
of
distributions
..........
2,535,772
29,423,758
2,756,371
40,243,011
Shares
redeemed
...............................
(14,271,187)
(167,255,815)
(26,739,266)
(373,882,997)
Net
increase
(decrease)
..........................
(8,535,454)
$(100,192,715)
(16,819,737)
$(233,613,207)
Class
C
Shares:
Shares
sold
...................................
24,175
$271,698
59,313
$799,919
Shares
issued
in
reinvestment
of
distributions
..........
7,104
78,786
3,910
54,747
Shares
redeemed
a
..............................
(136,075)
(1,550,778)
(265,836)
(3,541,303)
Net
increase
(decrease)
..........................
(104,796)
$(1,200,294)
(202,613)
$(2,686,637)
Class
R6
Shares:
Shares
sold
...................................
190,419
$2,223,310
591,711
$8,400,647
Shares
issued
in
reinvestment
of
distributions
..........
27,678
320,528
28,589
416,823
Shares
redeemed
...............................
(215,709)
(2,553,772)
(438,321)
(6,039,038)
Net
increase
(decrease)
..........................
2,388
$(9,934)
181,979
$2,778,432
Advisor
Class
Shares:
Shares
sold
...................................
590,135
$6,925,843
1,574,879
$22,222,607
Shares
issued
in
reinvestment
of
distributions
..........
109,395
1,268,495
125,855
1,836,223
Shares
redeemed
...............................
(2,226,380)
(26,240,651)
(1,870,594)
(25,994,438)
Net
increase
(decrease)
..........................
(1,526,850)
$(18,046,313)
(169,860)
$(1,935,608)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
1.
Organization
and
Significant
Accounting
Policies
(continued)
g.
Guarantees
and
Indemnifications
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
24
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Trust
are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Global
Advisors
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
February
28,
2023,
the
annualized
gross
effective
investment
management
fee
rate
was 0.697%
of
the
Fund’s
average daily
net
assets. 
b.
Administrative
Fees
Under
an
agreement
with
Global
Advisors,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Global
Advisors
based
on
the
Fund’s
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
compensation
distribution
plan,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
Subsidiary
Affiliation
Templeton
Global
Advisors
Limited
(Global
Advisors)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.705%
Up
to
and
including
$1
billion
0.690%
Over
$1
billion,
up
to
and
including
$5
billion
0.675%
Over
$5
billion,
up
to
and
including
$10
billion
0.655%
Over
$10
billion,
up
to
and
including
$15
billion
0.635%
Over
$15
billion,
up
to
and
including
$20
billion
0.615%
In
excess
of
$20
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
25
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
Effective
October
1,
2022,
the
fees
are
based
on
an
annualized
asset
based
fee
of
0.016%
plus
a
reduced
transaction
based
fee.
Prior
to
October
1,
2022,
the
fees
were
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
February
28,
2023,
the
Fund
paid
transfer
agent
fees
of
$857,432,
of
which
$441,764 was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
February
28,
2023,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
December
31,
2023.
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$9,390
CDSC
retained
..............................................................................
$511
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
World
Fund
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
4.204%
$—
$707,451
$(707,451)
$—
$—
$—
—
$108
Total
Affiliated
Securities
...
$—
$707,451
$(707,451)
$—
$—
$—
$108
3.
Transactions
with
Affiliates
(continued)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains. 
At
August
31,
2022,
the
capital
loss
carryforwards
were
as
follows:
At
February
28,
2023
,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatment
s
of
foreign
currency
transactions,
EU
reclaims
and
corporate
actions.
5.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
February
28,
2023,
aggregated
$504,392,466
and
$725,208,719,
respectively.
6.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Political
and
financial
uncertainty
in
many
foreign
regions
may
increase
market
volatility
and
the
economic
risk
of
investing
in
foreign
securities.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
7.
Geopolitical
Risk
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
8.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$1,596,246
Cost
of
investments
..........................................................................
$2,322,914,557
Unrealized
appreciation
........................................................................
$214,120,588
Unrealized
depreciation
........................................................................
(255,704,000)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(41,583,412)
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
9.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
2,
2024.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the Statement
of
Operations.
During
the
period
ended
February
28,
2023,
the Fund
did
not
use
the
Global
Credit
Facility.
10.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
February
28,
2023,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
World
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Belgium
..............................
$
—
$
47,721,345
$
—
$
47,721,345
France
...............................
—
68,019,192
—
68,019,192
Germany
.............................
—
168,859,963
—
168,859,963
Hong
Kong
...........................
—
47,399,809
—
47,399,809
India
................................
—
50,948,067
—
50,948,067
Japan
...............................
—
81,385,235
—
81,385,235
Netherlands
...........................
—
45,888,471
—
45,888,471
Taiwan
...............................
—
64,375,361
—
64,375,361
United
Kingdom
........................
—
207,111,228
—
207,111,228
United
States
..........................
1,299,468,391
83,854,083
—
1,383,322,474
Short
Term
Investments
...................
—
116,300,000
—
116,300,000
Total
Investments
in
Securities
...........
$1,299,468,391
$981,862,754
a
$—
$2,281,331,145
\
a
Includes
foreign
securities
valued
at
$865,562,754,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
Templeton
Funds
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
Templeton
World
Fund
(continued)
11.
New
Accounting
Pronouncements
In June
2022,
the
FASB
issued
Accounting
Standards
Update
(ASU)
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
has
reviewed
the
requirements
and
believes
that
the
adoption
of
the
ASU
will
not
have
a
material
impact
on
the
financial
statements.
12.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Templeton
Funds
Shareholder
Information
29
franklintempleton.com
Semiannual
Report
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund's
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
102
S
04/23
©
2023
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Semiannual
Report
and
Shareholder
Letter
Templeton
World
Fund
Investment
Manager
Distributor
Shareholder
Services
Templeton
Global
Advisors
Limited
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Item 2. Code of Ethics.
 
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
(c) N/A
 
(d) N/A
 
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
 
Item 3. Audit Committee Financial Expert.
 
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
 
(2) The audit committee financial experts are Ann Torre Bates and
David W. Niemiec and they are "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
 
 
Item 4.
Principal Accountant Fees and Services.             N/A
 
 
Item 5. Audit Committee
of Listed Registrants.             
N/A
 
 
Item 6. Schedule of Investments.
                            N/A
 
 
Item 7
. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.                           N/A
 
 
Item 8. Portfolio Managers of Closed-End Management Investment Companies.  N/A
 
 
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.                          N/A
 
 
Item 10. Submission of Matters to a Vote of Security Holders.
 
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
 
Item 11. Controls and Procedures.
 
(a)
 Evaluation of Disclosure Controls and Procedures.  The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
 
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
 
(b)
 Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
 
 
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                             N/A
 
 
Item 13. Exhibits.
 
(a)(1) Code of Ethics
 
 
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
 
(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
 
 
 
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
TEMPLETON FUNDS
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date 
April 26, 2023
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date 
April 26, 2023
 
 
By S\CHRISTOPHER KINGS______________________
      Christopher Kings
      Chief Financial Officer, Chief Accounting Officer and Treasurer
Date 
April 26, 2023