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 811-04706
 
Templeton Income Trust
(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)
 
Craig S. Tyle, 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: 12/31
 
Date of reporting period: 6/30/21
 
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
Global
Total
Return
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2021
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Not
part
of
the
semiannual
report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
June
30,
2021,
many
global
economies
improved
as
coronavirus
vaccines
were
distributed
and
people
reengaged
with
the
world.
However,
inflation
surged
in
many
countries
in
the
period's
second
half,
driven
by
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Many
central
banks
signaled
the
end
of
rate-cutting,
and
some
began
to
move
toward
policy
normalization,
but
the
U.S.
Federal
Reserve,
the
European
Central
Bank
and
the
Bank
of
Japan
kept
their
policy
rates
unchanged.
Rising
yields
during
2021's
first
quarter
strained
valuations
across
global
fixed
income
markets,
creating
headwinds
for
the
asset
class
during
the
six-month
period.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
-4.75%
and
-2.49%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
broadly
appreciated
against
most
foreign
currencies
during
the
period.
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
their
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
Global
Total
Return
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,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2021,
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
Global
Total
Return
Fund
3
Performance
Summary
8
Your
Fund’s
Expenses
10
Financial
Highlights
and
Statement
of
Investments
11
Financial
Statements
28
Notes
to
Financial
Statements
32
Tax
Information
48
Shareholder
Information
49
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
Global
Total
Return
Fund
This
semiannual
report
for
Templeton
Global
Total
Return
Fund
covers
the
period
ended
June
30,
2021
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
total
investment
return
consisting
of
a
combination
of
interest
income,
capital
appreciation
and
currency
gains.
Under
normal
market
conditions,
the
Fund
invests
primarily
in
fixed
and
floating
rate
debt
securities
and
debt
obligations
(including
convertible
bonds)
of
governments,
government
agencies
and
government-related
or
corporate
issuers
worldwide
(collectively,
“bonds”).
Bonds
may
be
denominated
and
issued
in
the
local
currency
or
in
another
currency.
Bonds
include
debt
securities
of
any
maturity,
such
as
bonds,
notes,
bills
and
debentures.
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-1.42%
cumulative
total
return.
In
comparison,
the
global
fixed
income
market,
as
measured
by
the
Fund’s
benchmark,
the
Bloomberg
Barclays
Multiverse
Index,
posted
a
-2.95%
cumulative
total
return
for
the
same
period.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
8
.
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
Sovereign
bond
yields
rose
across
much
of
the
world
during
the
first
three
months
of
the
six-month
period
ended
June
30,
2021,
as
vaccine
distributions,
ongoing
stimulus
measures
and
optimism
for
improving
economic
conditions
appeared
to
fuel
reflation
expectations
across
financial
markets.
In
April,
sovereign
bond
yields
in
much
of
Asia
and
the
Americas
pulled
back
from
their
March
peaks,
while
many
areas
of
Europe
saw
yields
continue
to
rise.
In
June,
sovereign
bond
*Includes
U.S.
and
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
yields
declined
across
developed
markets
but
shifted
in
varying
directions
in
emerging
markets.
On
the
whole,
most
countries
around
the
world
saw
yields
rise
significantly
over
the
six-month
period,
despite
the
general
trend
of
declining
yields
over
the
final
months
of
the
period.
The
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
six-month
period
55
basis
points
(bps)
higher
at
1.47%.
It
reached
an
intra-period
peak
of
1.74%
on
March
31,
its
highest
level
since
January
2020.
In
Europe,
the
yield
on
the
10-year
German
Bund
finished
the
six-month
period
36
bps
higher
at
-0.21%.
In
Asia,
the
yield
on
the
10-year
Japanese
government
bond
rose
three
bps
to
0.05%.
Sovereign
bond
yields
also
notably
rose
in
the
U.K.,
Canada,
Australia,
Sweden
and
Norway.
In
emerging
markets,
yields
rose
in
India,
Indonesia,
Thailand,
Brazil,
Mexico,
Chile,
Colombia
and
Peru.
Rising
yields
strained
valuations
across
many
areas
of
the
global
fixed
income
markets
during
2021’s
first
quarter.
U.S.
dollar
(USD)-denominated
sovereign
credit
sectors
broadly
saw
negative
returns
in
January,
February
and
March,
before
sharply
reversing
to
generate
offsetting
positive
returns
in
April,
May
and
June
as
yields
declined.
Conditions
were
somewhat
different
in
corporate
credit
sectors
as
U.S.
investment-grade
credit
tiers
initially
saw
negative
returns
on
rate
pressures,
while
high-yield
credit
tiers
performed
better,
benefiting
from
greater
spread
cushioning.
Investment-grade
corporate
credits
returned
to
positive
performance
in
April,
May
and
June,
modestly
outpacing
similar
positive
returns
in
the
high-yield
credit
tiers.
Portfolio
Composition
6/30/21
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
55.8%
U.S.
Government
and
Agency
Securities
7.2%
Short-Term
Investments
&
Other
Net
Assets
*
37.0%
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.
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Templeton
Global
Total
Return
Fund
4
franklintempleton.com
Semiannual
Report
In
currency
markets,
the
USD
broadly
strengthened
against
a
number
of
major
developed
market
and
emerging
market
currencies
in
the
first
quarter,
with
a
few
notable
exceptions.
That
trend
reversed
in
April
and
May
as
the
USD
broadly
depreciated,
before
returning
to
a
strengthening
pattern
in
June.
On
the
whole,
the
USD
finished
the
six-month
period
broadly
stronger
against
most
currencies,
with
some
exceptions.
In
Asia,
the
Chinese
yuan
appreciated
1.08%
against
the
USD
in
the
six-month
period,
while
the
Indonesian
rupiah
depreciated
3.10%,
the
Indian
rupee
1.76%,
the
Singapore
dollar
1.78%,
the
South
Korean
won
3.71%
and
the
Japanese
yen
7.05%.
In
Europe,
the
euro
depreciated
2.93%
against
the
USD.
The
Norwegian
krone
appreciated
2.60%
against
the
euro,
and
the
Canadian
dollar
appreciated
5.71%.
The
Swedish
krona
depreciated
0.96%
against
the
euro.
In
Latin
America,
the
Brazilian
real
appreciated
4.38%
against
the
USD,
while
the
Mexican
peso
depreciated
0.25%,
the
Colombian
peso
8.79%
and
the
Chilean
peso
3.25%.
Vaccine
distributions
progressively
accelerated
in
many
countries
during
the
period,
though
supply
setbacks
affected
areas
of
Europe
in
March
and
April.
Novel
coronavirus
(COVID-19)
infection
levels
peaked
in
January
in
the
U.S.
and
Europe
before
declining
in
February
and
plateauing
in
March.
Cases
continued
to
trend
lower
in
April,
May
and
June.
Governments
continued
to
struggle
with
balancing
the
needs
of
their
economies
with
the
health
of
their
citizens
during
much
of
the
first
half
of
the
period
before
higher
vaccination
rates
and
lower
case
levels
enabled
many
regions
to
progressively
reopen
their
economies
in
the
second
quarter.
Business
and
consumer
confidence
surveys
strengthened
in
multiple
regions
during
the
period,
particularly
in
the
second
quarter,
despite
some
growing
concerns
over
the
proliferation
of
the
COVID-19
delta
variant
in
several
parts
of
the
world
in
June,
notably
in
the
U.K.
and
Australia.
Economic
activity
continued
to
broadly
expand
in
many
countries
during
the
second
half
of
the
period,
largely
driven
by
strength
in
goods
sectors
and
manufacturing.
Historically
high
savings
rates
in
many
countries
also
fueled
resurgent
growth
in
the
spring
and
summer
months.
Labor
market
conditions
generally
continued
to
improve
in
many
countries
during
the
period,
though
unemployment
broadly
remained
above
pre-pandemic
levels.
Inflation
figures
surged
higher
in
many
countries
in
April,
May
and
June,
driven
by
a
combination
of
factors
that
included
cyclical
upswings
associated
with
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Headline
Consumer
Price
Index
(CPI)
inflation
in
the
U.S.
rose
from
2.6%
year-over-year
in
March
to
4.2%
in
April
and
5.0%
in
May,
its
highest
level
since
2008.
In
Europe,
euro
area
(EA)
inflation
rose
from
0.9%
in
February
to
1.3%
in
March,
1.6%
in
April
and
2.0%
in
May,
before
levelling
off
at
1.9%
(estimated)
in
June;
the
EA
had
previously
endured
deflationary
pressures
through
the
third
and
fourth
quarters
of
2020.
Areas
of
non-core
Europe,
such
as
Hungary
and
Russia,
experienced
above-target
levels
of
inflation
in
May
and
June.
Globally,
areas
of
Latin
America,
such
as
Brazil
and
Mexico,
also
experienced
above-target
inflation
during
the
period,
while
inflation
levels
remained
relatively
more
contained
in
areas
of
Asia,
such
as
China,
South
Korea,
Indonesia
and
Thailand.
Pent-up
demand
outpaced
supply
recoveries
in
certain
sectors
during
the
spring
and
summer
months,
adding
to
pricing
pressures.
Supply
bottlenecks
have
intermittently
surfaced
across
a
myriad
of
industries
due
to
accelerating
demand,
as
well
as
logistical
disruptions
and
ongoing
uncertainties
(economic,
health
and
policy)
that
make
it
difficult
to
accurately
schedule
production.
Most
central
banks
around
the
world
signaled
during
the
middle
of
the
six-month
period
that
they
had
reached
the
end
of
their
rate-cutting
cycles,
with
several
banks
beginning
to
pivot
towards
plans
for
policy
normalization.
The
Bank
of
Canada
began
tapering
its
asset
purchases
in
April
and
indicated
that
interest
rates
could
be
raised
in
the
second
half
of
2022.
The
Bank
of
England
headed
towards
concluding
its
quantitative
easing
program
by
the
end
of
2021.
Norges
Bank
(Norway)
indicated
that
a
rate
hike
could
arrive
in
the
second
half
of
2021.
Riksbank
(Sweden)
was
on
pace
to
wind
down
its
asset
purchase
program
in
2021
but
intended
to
keep
rates
on
hold
at
0%
for
the
foreseeable
future.
The
Reserve
Bank
of
New
Zealand
intended
to
end
its
asset
purchases
by
September
and
begin
hiking
rates
by
mid-2022.
Other
developed
market
central
banks—including
the
U.S.
Federal
Reserve
(Fed),
the
European
Central
Bank
(ECB)
and
the
Bank
of
Japan
(BOJ)—had
not
yet
signaled
a
normalization
schedule
as
of
the
end
of
June.
In
emerging
markets,
several
countries
faced
persistent
inflation
pressures
that
may
force
a
faster
tightening
response
from
their
central
banks.
Notably,
Brazil’s
central
bank
hiked
rates
75
bps
three
times
during
the
period
(March,
May
and
June)
to
4.25%,
and
Mexico’s
central
bank
hiked
its
policy
rate
25
bps
in
June
to
4.25%,
its
first
rate
hike
since
December
2018.
Other
countries
indicated
they
may
begin
pursuing
tightening
policies
in
the
second
half
of
2021.
Templeton
Global
Total
Return
Fund
5
franklintempleton.com
Semiannual
Report
The
Fed
kept
the
federal
funds
target
rate
unchanged
at
0.00%–0.25%,
at
each
of
its
policy
meetings
during
the
period.
In
March,
the
Fed
notably
upgraded
its
growth
forecast
for
2021
to
6.5%
from
its
prior
estimate
of
4.2%
in
December.
The
core
inflation
forecast
was
upgraded
to
2.2%
for
2021,
from
the
prior
estimate
of
1.8%.
However,
Fed
Chair
Jay
Powell
cautioned
that
a
full
recovery
was
still
distant
and
that
economic
conditions
continued
to
warrant
extraordinary
monetary
accommodation,
citing
the
uncertainty
related
to
the
course
of
the
pandemic.
In
June,
the
overall
policy
tone
shifted
in
a
hawkish
direction
as
the
Fed
raised
its
2021
growth
forecast
for
the
U.S.
economy
to
7.0%
and
increased
its
inflation
forecast
to
3.4%.
Powell
commented
that
“the
economy
has
clearly
made
progress,”
and
a
majority
of
Fed
officials
brought
forward
their
projected
expectations
for
rate
hikes.
The
Fed’s
dot
plot
survey
had
previously
indicated
expectations
for
no
hikes
until
2024
at
the
March
meeting.
In
June,
13
of
18
Fed
officials
indicated
expectations
for
a
rate
hike
by
the
end
of
2023,
with
11
indicating
expectations
for
two
hikes.
Seven
officials
indicated
expectations
for
at
least
one
hike
by
the
end
of
2022.
Powell
cautioned
that
the
dot
surveys
do
not
reflect
forward
guidance
from
the
committee
and
that
any
discussion
about
raising
rates
is
still
“highly
premature.”
Powell
also
indicated
in
June
that
discussions
of
when
to
begin
tapering
its
asset
purchase
program
had
begun,
but
that
the
timeline
is
yet
to
be
determined.
The
Fed
continued
to
purchase
“at
least
$80
billion
per
month”
in
USTs
and
“at
least
$40
billion
per
month
in
agency
mortgage-backed
securities”
during
the
reporting
period.
The
Fed’s
balance
sheet
reached
US$8.1
trillion
at
the
end
of
June.
Despite
higher
U.S.
inflation
figures
during
the
period,
Powell
continued
to
dispel
the
notion
that
higher
inflation
figures
in
2021
would
necessitate
near-term
rate
hikes,
reiterating
the
Fed’s
view
that
the
figures
largely
reflect
“transitory
factors”
that
would
not
affect
the
course
of
monetary
policy.
Core
personal
consumption
expenditures
(PCE)
inflation
surged
to
3.4%
year-over-year
in
May,
its
highest
level
since
1992,
up
from
3.1%
in
April
and
1.9%
in
March.
The
Fed
continued
to
indicate
it
will
let
inflation
run
above
2.0%
for
periods
of
time
to
counterbalance
prior
periods
of
prolonged
below-target
inflation,
implying
that
the
Fed
will
allow
the
U.S.
economy
to
run
hot
in
upcoming
years.
However,
Powell
directly
addressed
Fed
credibility
concerns,
stating
that
“if
we
see
inflation
moving
materially
above
2%
in
a
persistent
way
that
risks
inflation
expectations
drifting
up,
then
we
will
use
our
tools
to
guide
inflation
expectations
back
down.”
As
of
the
June
meeting,
the
Fed
projected
core
PCE
will
be
3.0%
in
2021,
and
2.1%
in
2022
and
2023.
The
ECB
kept
monetary
policy
unchanged
at
each
of
its
policy
meetings
during
the
period,
leaving
the
main
refinancing
operations
rate
at
0.0%,
and
the
main
deposit
facility
rate
at
-0.5%.
In
March,
the
ECB
announced
that
it
would
accelerate
the
pace
of
its
bond
purchases
under
the
Pandemic
Emergency
Purchase
Programme
(PEPP).
In
June,
it
recommitted
to
those
levels,
stating
that
the
pace
and
volume
of
bond
purchases
under
the
PEPP
would
“continue
to
be
conducted
at
a
significantly
higher
pace
than
during
the
first
months
of
the
year.”
The
PEPP
is
currently
scheduled
to
run
through
March
2022
and
has
around
€700
billion
in
capacity
remaining
of
its
total
€1.85
trillion
size.
The
ECB
raised
its
2021
growth
forecast
for
the
EA
to
4.6%
at
its
June
meeting,
describing
conditions
as
“balanced”
and
removing
prior
comments
that
risks
were
“titled
to
the
downside.”
The
ECB
also
increased
its
2021
inflation
forecast
for
the
EA
to
1.9%
(harmonized
index
of
consumer
prices)
from
1.5%.
ECB
President
Christine
Lagarde
commented
in
June
that
inflation
remained
distant
from
the
ECB’s
target
and
is
expected
to
diminish
in
2022.
Lagarde
warned
that
monetary
tightening
would
jeopardize
the
economic
recovery
and
the
inflation
outlook.
The
BOJ
kept
monetary
policy
unchanged
at
each
of
its
policy
meetings
during
the
period,
leaving
the
overnight
interest
rate
at
-0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
at
0.0%.
The
BOJ
published
the
results
of
its
monetary
framework
review
in
March,
the
first
of
its
kind
since
2016.
The
findings
indicated
a
shift
of
emphasis
from
aggressive
stimulus
towards
more
“sustainable”
policy.
The
BOJ
said
it
plans
to
intervene
as
needed
during
events
that
require
financial
market
support,
but
will
shift
away
from
continuous
balance
sheet
expansion
solely
to
stimulate
economic
activity.
Japan
continued
to
struggle
against
deflationary
pressures
that
have
persisted
since
April
2020.
Core
inflation
(National
CPI
ex-fresh
food)
rose
to
0.1%
year-over-year
in
May,
from
-0.1%
in
April
and
March,
-0.4%
in
February
and
-0.6%
in
January.
Investment
Strategy
We
invest
selectively
in
bonds
around
the
world
based
upon
our
assessment
of
changing
market,
political
and
economic
conditions.
While
seeking
opportunities,
we
consider
various
factors
including
evaluation
of
interest
rates,
currency
exchange
rate
changes
and
credit
risks.
For
purposes
of
pursuing
its
investment
goals,
the
Fund
regularly
enters
into
various
currency
related
transactions
involving
derivative
instruments,
principally
currency
and
cross
currency
forwards,
but
it
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
Templeton
Global
Total
Return
Fund
6
franklintempleton.com
Semiannual
Report
Manager’s
Discussion
The
successful
development
of
vaccines
against
COVID-19
in
the
final
months
of
2020
substantially
changed
our
outlook
and
positioning
for
2021.
In
the
weeks
before
the
six-month
reporting
period
began,
we
significantly
shifted
the
emphasis
of
the
Fund’s
strategic
positioning
from
a
safe-haven
stance
toward
an
increasing
allocation
in
risk
assets.
We
expected
a
rebound
in
global
economic
activity
and
improving
economic
conditions
in
the
spring
and
summer
months
of
2021
as
vaccines
were
progressively
distributed
and
people
increasingly
reengaged
with
the
world.
We
were
actively
constructive
in
a
number
of
regions
throughout
the
period,
particularly
in
areas
of
Asia
that
appeared
to
be
at
the
forefront
of
the
global
economic
recovery.
The
Fund
was
focused
on
three
core
themes
during
the
six-month
period:
(1)
weakness
in
the
euro
and
USD,
on
excessive
fiscal
and
monetary
policies
in
Europe
and
the
U.S.,
against
currencies
in
countries
with
strong
trade
dynamics,
current
account
surpluses,
better
fiscal
management
and
stronger
growth
potential,
notably
in
Asia;
(2)
avoiding
interest-rate
risks
in
low-yielding
developed
markets;
and
(3)
pursuing
sovereign
bonds
with
relatively
higher
yields
in
a
select
set
of
resilient
emerging
markets.
At
the
beginning
of
the
period,
the
Fund
held
overweighted
positions
in
specific
currencies
that
showed
medium-term
value
against
the
USD
and
the
euro.
We
held
notable
exposures
to
the
Chinese
yuan,
the
South
Korean
won,
the
Indian
rupee
and
the
Indonesian
rupiah
against
the
USD.
We
added
exposure
to
the
Singapore
dollar
in
April
and
the
New
Zealand
dollar
in
June.
In
Europe,
we
held
exposures
in
the
Norwegian
krone
and
Swedish
krona
against
the
euro.
In
the
Americas,
we
held
long
exposure
to
the
Canadian
dollar
against
the
euro,
and
long
exposures
to
the
Colombian
peso
and
Brazilian
real
against
the
USD.
In
May,
we
added
exposure
to
the
Chilean
peso
against
the
USD.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
We
also
continued
to
focus
on
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets,
specifically
in
countries
with
resilient
economies
and
strong
trade
dynamics.
We
continued
to
largely
avoid
developed
market
duration
exposures
in
preference
for
higher
yields
available
in
select
emerging
markets,
notably
including
Indonesia,
India,
Mexico,
Colombia,
Brazil
and
Ghana,
among
others.
We
saw
pockets
of
value
in
certain
USD-denominated
sovereign
credits,
but
we
continued
to
largely
prefer
specific
valuations
in
the
local-currency
markets
over
the
more
fully
valued
credit
markets.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
contributed
to
absolute
results
as
did
overall
credit
exposures.
Among
currencies,
the
Fund’s
net-positive
position
in
the
Japanese
yen
detracted
from
absolute
performance,
as
did
currency
positions
in
Latin
America
and
Asia
ex-Japan.
However,
the
Fund’s
position
in
the
Canadian
dollar
against
the
euro
contributed
to
absolute
results.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Argentina)
and
Africa
(Ghana)
contributed
to
absolute
performance.
Among
credit
exposures,
subinvestment-grade
sovereign
credits
contributed
to
absolute
return.
On
a
relative
basis,
the
Fund’s
performance
fared
better
than
that
of
its
benchmark
index
primarily
due
to
interest-
rate
strategies,
followed
by
overall
credit
exposures.
Currency
positions
detracted
from
relative
results.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
overweighted
duration
exposures
in
Latin
America
(Argentina)
and
Africa
(Ghana)
contributed
to
relative
performance,
as
did
select
underweighted
duration
exposures
in
Europe.
Among
credit
exposures,
overweighted
exposure
to
subinvestment-
grade
sovereign
credits
contributed
to
relative
return.
Among
currencies,
the
Fund’s
overweighted
position
in
the
Japanese
yen
during
most
of
the
period
detracted
from
relative
results,
as
did
overweighted
currency
positions
in
Latin
America
and
Asia
ex-Japan.
However,
the
Fund’s
underweighted
exposure
to
the
euro
contributed
to
relative
performance.
Thank
you
for
your
continued
participation
in
Templeton
Global
Total
Return
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Geographic
Composition
6/30/21
%
of
Total
Net
Assets
Americas
29.6%
Asia
Pacific
20.0%
Other
Europe
7.9%
Middle
East
&
Africa
5.5%
Short-Term
Investments
&
Other
Net
Assets
37.0%
Templeton
Global
Total
Return
Fund
7
franklintempleton.com
Semiannual
Report
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2021,
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.
Performance
Summary
as
of
June
30,
2021
Templeton
Global
Total
Return
Fund
8
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
6/30/21
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
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
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
-1.42%
-5.13%
1-Year
-1.24%
-4.98%
5-Year
+6.58%
+0.52%
10-Year
+18.01%
+1.28%
Advisor
6-Month
-1.29%
-1.29%
1-Year
-0.99%
-0.99%
5-Year
+7.91%
+1.53%
10-Year
+21.08%
+1.93%
See
page
9
for
Performance
Summary
footnotes.
Templeton
Global
Total
Return
Fund
Performance
Summary
9
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.
Foreign
securities
involve
special
risks,
including
currency
fluctuations
(which
may
be
sig-
nificant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
developing
markets
involve
heightened
risks
related
to
the
same
factors.
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
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.
The
markets
for
particular
securities
or
types
of
securities
are
or
may
become
relatively
illiquid.
Reduced
liquidity
will
have
an
adverse
impact
on
the
security’s
value
and
on
the
Fund’s
ability
to
sell
such
securities
when
necessary
to
meet
the
Fund’s
liquidity
needs
or
in
response
to
a
specific
market
event.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
relating
to
debt
securities
and
foreign
securities
generally,
including
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
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.
1.
The
Fund
has
a
fee
waiver
associated
with
any
investment
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
4/30/22.
Fund
investment
results
reflect
the
fee
waiver;
without
this
waiver,
the
results
would
have
been
lower.
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
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
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
3.75%.
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
(1/1/21–6/30/21)
Share
Class
Net
Investment
Income
A
$0.3404
C
$0.3202
R
$0.3285
R6
$0.3593
Advisor
$0.3524
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.05%
1.10%
Advisor
0.80%
0.85%
Your
Fund’s
Expenses
Templeton
Global
Total
Return
Fund
10
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
1/1/21
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$985.80
$5.66
$1,019.09
$5.76
1.15%
C
$1,000
$984.80
$7.64
$1,017.10
$7.76
1.55%
R
$1,000
$985.60
$6.89
$1,017.85
$7.00
1.40%
R6
$1,000
$988.70
$3.72
$1,021.06
$3.78
0.75%
Advisor
$1,000
$987.10
$4.43
$1,020.33
$4.51
0.90%
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.98
$11.02
$11.62
$12.04
$12.09
$11.38
$11.63
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.31
0.43
0.60
0.67
0.63
0.21
0.58
Net
realized
and
unrealized
gains
(losses)
(0.45)
(1.01)
(0.46)
(0.47)
(0.28)
0.60
(0.47)
Total
from
investment
operations
.............
(0.14)
(0.58)
0.14
0.20
0.35
0.81
0.11
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.34)
(0.02)
(0.74)
(0.62)
(0.16)
—
(0.13)
Tax
return
of
capital
....
—
(0.44)
—
—
(0.24)
(0.10)
(0.23)
Total
distributions
.......
(0.34)
(0.46)
(0.74)
(0.62)
(0.40)
(0.10)
(0.36)
Net
asset
value,
end
of
period
................
$9.50
$9.98
$11.02
$11.62
$12.04
$12.09
$11.38
Total
return
d
...........
(1.42)%
(5.32)%
1.21%
1.69%
2.83%
7.08%
1.08%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.16%
1.08%
1.04%
1.09%
1.07%
1.10%
1.07%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.15%
1.06%
0.96%
1.01%
1.02%
1.09%
1.06%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.15%
f
1.04%
0.93%
1.01%
f
1.02%
f
1.07%
1.06%
f
Net
investment
income
...
6.41%
4.19%
5.27%
5.62%
5.15%
5.22%
5.14%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$435,476
$482,575
$769,018
$811,990
$921,181
$1,197,319
$1,227,550
Portfolio
turnover
rate
....
12.46%
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.96
$11.01
$11.61
$12.02
$12.07
$11.38
$11.61
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.29
0.39
0.56
0.62
0.58
0.19
0.54
Net
realized
and
unrealized
gains
(losses)
(0.44)
(1.02)
(0.46)
(0.46)
(0.28)
0.59
(0.46)
Total
from
investment
operations
.............
(0.15)
(0.63)
0.10
0.16
0.30
0.78
0.08
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.32)
(0.01)
(0.70)
(0.57)
(0.14)
—
(0.12)
Tax
return
of
capital
....
—
(0.41)
—
—
(0.21)
(0.09)
(0.19)
Total
distributions
.......
(0.32)
(0.42)
(0.70)
(0.57)
(0.35)
(0.09)
(0.31)
Net
asset
value,
end
of
period
................
$9.49
$9.96
$11.01
$11.61
$12.02
$12.07
$11.38
Total
return
d
...........
(1.52)%
(5.80)%
0.81%
1.37%
2.43%
6.85%
0.76%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.56%
1.48%
1.44%
1.49%
1.47%
1.50%
1.47%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.55%
1.46%
1.36%
1.41%
1.42%
1.49%
1.46%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.55%
f
1.44%
1.33%
1.41%
f
1.42%
f
1.47%
1.46%
f
Net
investment
income
...
5.97%
3.79%
4.87%
5.22%
4.75%
4.82%
4.74%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$81,969
$113,438
$237,215
$310,561
$398,445
$481,915
$517,428
Portfolio
turnover
rate
....
12.46%
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.98
$11.03
$11.63
$12.04
$12.09
$11.40
$11.63
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.30
0.40
0.58
0.64
0.60
0.19
0.56
Net
realized
and
unrealized
gains
(losses)
(0.44)
(1.02)
(0.47)
(0.46)
(0.28)
0.59
(0.46)
Total
from
investment
operations
.............
(0.14)
(0.62)
0.11
0.18
0.32
0.78
0.10
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.33)
(0.02)
(0.71)
(0.59)
(0.15)
—
(0.12)
Tax
return
of
capital
....
—
(0.41)
—
—
(0.22)
(0.09)
(0.21)
Total
distributions
.......
(0.33)
(0.43)
(0.71)
(0.59)
(0.37)
(0.09)
(0.33)
Net
asset
value,
end
of
period
................
$9.51
$9.98
$11.03
$11.63
$12.04
$12.09
$11.40
Total
return
d
...........
(1.44)%
(5.65)%
0.95%
1.52%
2.58%
6.89%
0.91%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.41%
1.32%
1.29%
1.34%
1.32%
1.35%
1.32%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.40%
1.30%
1.21%
1.26%
1.27%
1.34%
1.31%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.40%
f
1.28%
1.18%
1.26%
f
1.27%
f
1.32%
1.31%
f
Net
investment
income
...
6.20%
3.89%
5.02%
5.37%
4.90%
4.97%
4.89%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$7,776
$7,741
$7,377
$7,957
$8,788
$9,782
$9,692
Portfolio
turnover
rate
....
12.46%
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.98
$11.03
$11.63
$12.05
$12.10
$11.41
$11.64
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.33
0.47
0.65
0.71
0.68
0.22
0.64
Net
realized
and
unrealized
gains
(losses)
(0.44)
(1.02)
(0.47)
(0.47)
(0.29)
0.59
(0.47)
Total
from
investment
operations
.............
(0.11)
(0.55)
0.18
0.24
0.39
0.81
0.17
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.36)
(0.02)
(0.78)
(0.66)
(0.17)
—
(0.15)
Tax
return
of
capital
....
—
(0.48)
—
—
(0.27)
(0.12)
(0.25)
Total
distributions
.......
(0.36)
(0.50)
(0.78)
(0.66)
(0.44)
(0.12)
(0.40)
Net
asset
value,
end
of
period
................
$9.51
$9.98
$11.03
$11.63
$12.05
$12.10
$11.41
Total
return
d
...........
(1.13)%
(5.05)%
1.57%
2.06%
3.22%
7.21%
1.47%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.77%
0.71%
0.69%
0.73%
0.69%
0.72%
0.69%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.75%
0.69%
0.60%
0.65%
0.64%
0.71%
0.68%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.75%
f
0.67%
0.57%
0.65%
f
0.64%
f
0.69%
0.68%
f
Net
investment
income
...
6.77%
4.57%
5.63%
5.98%
5.53%
5.60%
5.52%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$240,088
$294,519
$876,665
$986,689
$1,058,884
$904,147
$882,402
Portfolio
turnover
rate
....
12.46%
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$10.00
$11.04
$11.64
$12.05
$12.10
$11.41
$11.64
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.32
0.46
0.63
0.70
0.66
0.21
0.61
Net
realized
and
unrealized
gains
(losses)
(0.45)
(1.02)
(0.46)
(0.46)
(0.28)
0.59
(0.45)
Total
from
investment
operations
.............
(0.13)
(0.56)
0.17
0.24
0.38
0.80
0.16
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.35)
(0.02)
(0.77)
(0.65)
(0.17)
—
(0.14)
Tax
return
of
capital
....
—
(0.46)
—
—
(0.26)
(0.11)
(0.25)
Total
distributions
.......
(0.35)
(0.48)
(0.77)
(0.65)
(0.43)
(0.11)
(0.39)
Net
asset
value,
end
of
period
................
$9.52
$10.00
$11.04
$11.64
$12.05
$12.10
$11.41
Total
return
d
...........
(1.29)%
(5.07)%
1.46%
2.03%
3.08%
7.06%
1.42%
Ratios
to
average
net
assets
e
Expenses
before
waiver
a
nd
payments
by
affiliates
and
expense
reduction
.......
0.91%
0.83%
0.79%
0.84%
0.82%
0.85%
0.82%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.90%
0.81%
0.71%
0.76%
0.77%
0.84%
0.81%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.90%
f
0.78%
0.68%
0.76%
f
0.77%
f
0.82%
0.81%
f
Net
investment
income
...
6.58%
4.48%
5.52%
5.87%
5.40%
5.47%
5.39%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$713,743
$1,104,754
$2,684,044
$2,992,808
$3,117,593
$2,729,232
$2,497,162
Portfolio
turnover
rate
....
12.46%
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Statement
of
Investments
(unaudited),
June
30,
2021
Templeton
Global
Total
Return
Fund
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
0.0%
South
Africa
0.0%
a,b,c
K2016470219
South
Africa
Ltd.,
A
....
Multiline
Retail
434,200,485
$
—
a,b,c
K2016470219
South
Africa
Ltd.,
B
....
Multiline
Retail
50,014,925
—
—
Total
Common
Stocks
(Cost
$1,645,359)
.......................................
—
Principal
Amount
*
a
a
a
a
a
Corporate
Bonds
0.0%
South
Africa
0.0%
a,d,e
K2016470219
South
Africa
Ltd.
,
Senior
Secured
Note,
144A,
PIK,
3%,
12/31/22
.....................
Multiline
Retail
36,523,770
—
Senior
Secured
Note,
144A,
PIK,
8%,
12/31/22
.....................
Multiline
Retail
13,432,767
EUR
—
a,d,e
K2016470260
South
Africa
Ltd.,
Senior
Secured
Note,
144A,
PIK,
25%,
12/31/22
.....................
Multiline
Retail
15,159,679
—
—
Total
Corporate
Bonds
(Cost
$46,947,976)
......................................
—
a
a
Industry
Principal
Amount
*
a
Value
Foreign
Government
and
Agency
Securities
55.8%
Argentina
6.4%
f,g
Argentina
BONCER
,
Index
Linked,
1%,
8/05/21
........
419,635,496
ARS
2,504,535
Index
Linked,
1.2%,
3/18/22
.......
5,318,598,037
ARS
31,562,955
Index
Linked,
1.3%,
9/20/22
.......
35,915,356
ARS
210,474
Index
Linked,
1.4%,
3/25/23
.......
3,770,897,674
ARS
21,529,969
Index
Linked,
1.5%,
3/25/24
.......
3,491,252,026
ARS
18,926,552
g,h
Argentina
Bonos
del
Tesoro
Nacional
en
Pesos
Badlar
,
FRN,
36.104%,
(ARS
BADLAR
+
2%),
4/03/22
.........
9,178,000
ARS
52,591
g
Argentina
Government
Bond
,
18.2%,
10/03/21
................
1,518,433,000
ARS
8,514,499
16%,
10/17/23
.................
1,528,949,200
ARS
5,560,694
15.5%,
10/17/26
................
2,527,300,600
ARS
6,002,955
94,865,224
Bosnia
and
Herzegovina
0.0%
†
e,h
Bosnia
and
Herzegovina
Government
Bond,
B,
Senior
Bond,
Reg
S,
FRN,
0.25%,
(6-month
EUR
LIBOR
+
0.813%),
12/20/21
..............
7,456
DEM
8,703
Brazil
1.6%
Brazil
Notas
do
Tesouro
Nacional
,
10%,
1/01/25
..................
43,020,000
BRL
9,164,369
10%,
1/01/27
..................
18,550,000
BRL
3,973,710
10%,
1/01/29
..................
18,580,000
BRL
3,992,816
10%,
1/01/31
..................
29,620,000
BRL
6,318,442
23,449,337
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Colombia
5.5%
Colombia
Government
Bond
,
Senior
Bond,
4.375%,
3/21/23
.....
1,916,000,000
COP
$
523,027
Senior
Bond,
9.85%,
6/28/27
......
3,053,000,000
COP
972,495
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
20,636,000,000
COP
5,683,941
B,
10%,
7/24/24
................
59,139,000,000
COP
17,974,834
B,
7.5%,
8/26/26
...............
187,518,000,000
COP
52,962,989
B,
7%,
6/30/32
.................
11,774,000,000
COP
3,063,043
81,180,329
Ecuador
3.5%
e
Ecuador
Government
Bond
,
Senior
Note,
144A,
0.5%,
7/31/30
..
19,217,000
16,526,812
Senior
Bond,
144A,
0.5%,
7/31/35
..
47,876,000
33,034,440
Senior
Bond,
144A,
0.5%,
7/31/40
..
2,727,000
1,700,966
51,262,218
Ghana
5.5%
Ghana
Government
Bond
,
24.75%,
7/19/21
................
32,520,000
GHS
5,557,967
19.5%,
10/18/21
................
71,467,000
GHS
12,302,319
18.75%,
1/24/22
................
42,240,000
GHS
7,314,834
18.25%,
7/25/22
................
22,820,000
GHS
3,969,013
17.6%,
11/28/22
................
1,250,000
GHS
216,731
16.5%,
2/06/23
................
5,210,000
GHS
891,273
Senior
Note,
17.6%,
2/20/23
......
480,000
GHS
83,343
19.75%,
3/25/24
................
36,690,000
GHS
6,645,505
Senior
Note,
18.3%,
3/02/26
......
990,000
GHS
170,612
19%,
11/02/26
.................
134,400,000
GHS
23,521,388
19.75%,
3/15/32
................
117,734,000
GHS
20,750,545
81,423,530
India
4.4%
India
Government
Bond
,
Senior
Note,
5.22%,
6/15/25
......
285,000,000
INR
3,787,178
7.59%,
1/11/26
.................
1,915,100,000
INR
27,487,487
7.27%,
4/08/26
................
2,423,700,000
INR
34,430,131
65,704,796
Indonesia
11.1%
Indonesia
Government
Bond
,
FR53,
8.25%,
7/15/21
...........
241,323,000,000
IDR
16,669,686
FR61,
7%,
5/15/22
..............
167,591,000,000
IDR
11,920,574
FR35,
Senior
Bond,
12.9%,
6/15/22
.
95,624,000,000
IDR
7,177,208
FR43,
10.25%,
7/15/22
..........
3,593,000,000
IDR
264,373
FR63,
5.625%,
5/15/23
..........
183,131,000,000
IDR
12,936,626
FR46,
9.5%,
7/15/23
............
651,100,000,000
IDR
49,283,780
FR39,
11.75%,
8/15/23
..........
20,613,000,000
IDR
1,628,697
FR70,
8.375%,
3/15/24
..........
418,021,000,000
IDR
31,532,333
FR44,
10%,
9/15/24
.............
15,790,000,000
IDR
1,241,411
FR81,
6.5%,
6/15/25
............
14,790,000,000
IDR
1,071,877
FR86,
5.5%,
4/15/26
............
430,293,000,000
IDR
29,820,789
163,547,354
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Mexico
5.4%
Mexican
Bonos
Desarr
Fixed
Rate
,
M,
Senior
Note,
6.75%,
3/09/23
....
545,370,000
MXN
$
27,874,549
M,
Senior
Bond,
8%,
12/07/23
.....
1,003,545,000
MXN
52,789,622
80,664,171
Norway
6.0%
e
Norway
Government
Bond
,
144A,
Reg
S,
2%,
5/24/23
........
518,911,000
NOK
61,821,331
144A,
Reg
S,
3%,
3/14/24
........
224,500,000
NOK
27,567,124
89,388,455
South
Korea
4.1%
Korea
Treasury
Bond
,
1.375%,
9/10/24
................
46,986,900,000
KRW
41,359,506
3%,
9/10/24
...................
20,810,000,000
KRW
19,245,639
60,605,145
Sri
Lanka
0.4%
e
Sri
Lanka
Government
Bond
,
Senior
Note,
144A,
5.75%,
4/18/23
..
200,000
149,750
Senior
Note,
144A,
6.35%,
6/28/24
..
620,000
427,800
Senior
Bond,
144A,
6.85%,
11/03/25
2,100,000
1,412,250
Senior
Bond,
144A,
6.2%,
5/11/27
..
5,300,000
3,284,993
Senior
Bond,
144A,
6.75%,
4/18/28
.
460,000
289,464
Senior
Bond,
144A,
7.85%,
3/14/29
.
659,000
421,760
5,986,017
Turkey
1.9%
Turkey
Government
Bond
,
13.9%,
11/09/22
................
124,600,000
TRY
13,723,697
12.2%,
1/18/23
................
8,390,000
TRY
897,097
7.1%,
3/08/23
.................
35,770,000
TRY
3,505,315
16.2%,
6/14/23
................
44,310,000
TRY
4,980,955
8.8%,
9/27/23
.................
23,020,000
TRY
2,226,679
10.4%,
3/20/24
................
1,950,000
TRY
191,473
12.6%,
10/01/25
................
21,490,000
TRY
2,111,366
27,636,582
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,157,127,899)
...........
825,721,861
U.S.
Government
and
Agency
Securities
7.2%
United
States
7.2%
U.S.
Treasury
Notes
,
1.75%,
12/31/24
................
5,789,400
6,025,725
2.125%,
5/15/25
................
4,060,000
4,288,058
2.875%,
5/31/25
................
50,610,000
54,953,366
2.625%,
12/31/25
...............
16,863,000
18,233,119
1.625%,
2/15/26
................
9,110,000
9,445,575
2.125%,
5/31/26
................
4,164,000
4,417,093
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
U.S.
Government
and
Agency
Securities
(continued)
United
States
(continued)
U.S.
Treasury
Notes,
(continued)
1.625%,
10/31/26
...............
9,120,000
$
9,448,106
106,811,042
Total
U.S.
Government
and
Agency
Securities
(Cost
$104,805,124)
................
106,811,042
Total
Long
Term
Investments
(Cost
$1,310,526,358)
.............................
932,532,903
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
0.6%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
86.50
JPY,
Expires
12/20/21
..
1
19,166,000
AUD
122,488
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.45
JPY,
Expires
2/23/22
..
1
21,381,000
834,889
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
115.95
JPY,
Expires
8/11/21
.......
1
63,132,000
15,505
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
September
Strike
Price
21.57
MXN,
Expires
9/15/21
......................
1
7,121,000
31,618
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.65
MXN,
Expires
8/20/21
.......
1
21,008,000
44,821
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
22.02
MXN,
Expires
6/09/22
..
1
21,009,000
535,600
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
22.26
MXN,
Expires
8/02/21
.......
1
34,360,000
17,062
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
22.36
MXN,
Expires
12/28/21
.
1
47,270,000
416,145
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
38,722,000
604,333
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
38,722,000
604,333
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
7,827,000
218,304
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
14,622,000
407,825
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
7,827,000
218,305
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
29,878,000
$
850,767
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
29,880,000
759,161
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
29.73
MXN,
Expires
12/07/21
.
1
51,060,000
17,684
5,698,840
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
71.10
JPY,
Expires
7/15/21
.......
1
5,327,000
AUD
2
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
75.00
JPY,
Expires
12/20/21
..
1
38,332,000
AUD
102,663
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
78.50
JPY,
Expires
7/15/21
.......
1
21,308,000
AUD
1,266
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
80.55
JPY,
Expires
9/14/21
...
1
32,279,000
AUD
129,127
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
82.66
JPY,
Expires
9/14/21
...
1
72,701,000
AUD
654,070
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
102.65
JPY,
Expires
8/11/21
.......
1
94,755,000
2,965
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
18.70
MXN,
Expires
6/09/22
..
1
10,505,000
51,310
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
18.76
MXN,
Expires
10/27/21
.
1
47,722,000
94,011
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
19.04
MXN,
Expires
6/09/22
..
1
10,505,000
76,254
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.23
MXN,
Expires
8/20/21
.......
1
15,756,000
31,806
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.35
MXN,
Expires
8/02/21
.......
1
12,026,000
19,738
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.43
MXN,
Expires
8/30/21
..
1
22,409,000
97,780
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.58
MXN,
Expires
10/07/21
.
1
49,959,000
419,785
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
3,914,000
$
51,692
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
7,311,000
96,555
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
3,914,000
51,692
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.88
MXN,
Expires
8/11/21
..
1
22,410,000
232,416
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.15
MXN,
Expires
8/20/21
.......
1
20,200,000
1,167,254
3,280,386
Total
Options
Purchased
(Cost
$21,952,296)
....................................
8,979,226
Short
Term
Investments
33.3%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
14.9%
Argentina
0.6%
f,g,i
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
Index
Linked,
9/13/21
............
233,095,213
ARS
1,380,297
Index
Linked,
2/28/22
............
341,294,246
ARS
2,000,644
Index
Linked,
4/18/22
............
981,220,827
ARS
5,730,333
9,111,274
Brazil
3.6%
i
Brazil
Letras
do
Tesouro
Nacional
,
1/01/24
......................
74,600,000
BRL
12,392,446
7/01/24
......................
260,590,000
BRL
41,479,050
53,871,496
Egypt
2.1%
i
Egypt
Treasury
Bills
,
7/13/21
......................
63,000,000
EGP
4,013,203
8/10/21
......................
25,700,000
EGP
1,623,406
8/31/21
......................
6,300,000
EGP
394,885
9/07/21
......................
46,100,000
EGP
2,881,341
9/28/21
......................
3,500,000
EGP
216,699
12/07/21
.....................
12,600,000
EGP
761,076
12/14/21
.....................
57,800,000
EGP
3,480,838
12/21/21
.....................
157,600,000
EGP
9,471,912
1/11/22
......................
36,700,000
EGP
2,194,106
2/15/22
......................
40,900,000
EGP
2,413,199
3/01/22
......................
18,900,000
EGP
1,109,330
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Short
Term
Investments
(continued)
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Egypt
(continued)
i
Egypt
Treasury
Bills,
(continued)
3/22/22
......................
42,800,000
EGP
$
2,496,576
31,056,571
Japan
4.1%
i
Japan
Treasury
Bills
,
8/10/21
......................
1,161,600,000
JPY
10,458,029
11/22/21
.....................
3,064,700,000
JPY
27,600,873
12/20/21
.....................
2,432,200,000
JPY
21,906,816
59,965,718
Singapore
4.5%
i
Singapore
Treasury
Bills
,
7/16/21
......................
26,650,000
SGD
19,815,853
8/13/21
......................
4,560,000
SGD
3,389,967
8/20/21
......................
30,370,000
SGD
22,576,330
8/24/21
......................
28,570,000
SGD
21,237,625
67,019,775
Total
Foreign
Government
and
Agency
Securities
(Cost
$222,799,490)
............
221,024,834
Industry
Shares
Money
Market
Funds
18.4%
United
States
18.4%
j,k
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
..........
271,635,234
271,635,234
Total
Money
Market
Funds
(Cost
$271,635,234)
.................................
271,635,234
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$494,434,724
)
...............................
492,660,068
a
a
a
a
Total
Investments
(Cost
$1,826,913,378)
96.9%
..................................
$1,434,172,197
Options
Written
(0.6)%
.......................................................
(9,608,441)
Other
Assets,
less
Liabilities
3.7%
.............................................
54,487,669
Net
Assets
100.0%
...........................................................
$1,479,051,425
a
a
a
a
Number
of
Contracts
Notional
Amount
#
l
Options
Written
(0.6)%
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.20
JPY,
Expires
12/20/21
..
1
19,166,000
AUD
(563,084)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
85.74
JPY,
Expires
9/14/21
...
1
48,467,000
AUD
(152,455)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
109.90
JPY,
Expires
8/11/21
.......
1
94,755,000
(1,319,431)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.15
MXN,
Expires
8/20/21
.......
1
20,200,000
(78,260)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
23
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
l
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
11,616,000
$
(415,724)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
11,616,000
(415,725)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
23.43
MXN,
Expires
8/20/21
.......
1
21,008,000
(7,736)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
September
Strike
Price
24.20
MXN,
Expires
9/15/21
......................
1
4,302,000
(2,389)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
24.62
MXN,
Expires
8/02/21
.......
1
8,590,000
(426)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
25.33
MXN,
Expires
12/28/21
.
1
30,270,000
(63,919)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
25.41
MXN,
Expires
6/09/22
..
1
14,005,000
(102,866)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
26.61
MXN,
Expires
8/30/21
..
1
22,409,000
(1,395)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
27.38
MXN,
Expires
8/11/21
..
1
22,410,000
(427)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
27.93
MXN,
Expires
12/07/21
.
1
17,020,000
(10,286)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
3,914,000
(29,144)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
3,914,000
(29,144)
(3,192,411)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
68.40
JPY,
Expires
12/20/21
..
1
19,166,000
AUD
(12,794)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
75.90
JPY,
Expires
7/15/21
.......
1
21,308,000
AUD
(175)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
80.56
JPY,
Expires
9/14/21
...
1
36,350,000
AUD
(145,974)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
82.09
JPY,
Expires
9/14/21
...
1
16,140,000
AUD
(116,920)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
l
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
95.85
JPY,
Expires
2/23/22
...
1
21,381,000
$
(14,684)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
98.00
JPY,
Expires
8/11/21
........
1
31,622,000
(94)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.05
MXN,
Expires
10/07/21
.
1
49,959,000
(144,015)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.71
MXN,
Expires
10/27/21
.
1
47,722,000
(556,386)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
19.84
MXN,
Expires
6/09/22
..
1
21,009,000
(354,029)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.86
MXN,
Expires
8/20/21
.......
1
31,512,000
(335,258)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
11,616,000
(190,396)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
11,616,000
(190,396)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
September
Strike
Price
20.21
MXN,
Expires
9/15/21
......................
1
2,151,000
(46,613)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.94
MXN,
Expires
8/30/21
..
1
22,409,000
(1,086,910)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
21.43
MXN,
Expires
8/11/21
..
1
22,410,000
(1,602,178)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
7,827,000
(418,600)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
7,827,000
(418,600)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
14,622,000
(782,008)
(6,416,030)
Total
Options
Written
(Premiums
received
$13,390,072)
..........................
$
(9,608,441)
#
Notional
amount
is
the
number
of
units
specified
in
the
contract,
and
can
include
currency
units,
bushels,
shares,
pounds,
barrels
or
other
units.
Currency
units
are
stated
in
U.S.
dollars
unless
otherwise
indicated.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Fair
valued
using
significant
unobservable
inputs.
See
Note
13
regarding
fair
value
measurements.
b
Non-income
producing.
c
See
Note
10
regarding
restricted
securities.
d
Income
may
be
received
in
additional
securities
and/or
cash.
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
25
At
June
30,
2021,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
e
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
June
30,
2021,
the
aggregate
value
of
these
securities
was
$146,645,393,
representing
9.9%
of
net
assets.
f
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
g
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
13
regarding
fair
value
measurements.
h
The
coupon
rate
shown
represents
the
rate
at
period
end.
i
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
j
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
k
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
l
See
Note
1(c)
regarding
written
options.
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Chilean
Peso
......
JPHQ
Buy
999,760,000
1,376,132
7/01/21
$
—
$
(14,766)
Chilean
Peso
......
JPHQ
Sell
999,760,000
1,348,276
7/01/21
—
(13,090)
Chilean
Peso
......
GSCO
Buy
1,224,830,000
1,689,421
7/02/21
—
(21,578)
Chilean
Peso
......
GSCO
Sell
1,224,830,000
1,664,171
7/02/21
—
(3,671)
Chilean
Peso
......
JPHQ
Buy
1,969,150,000
2,715,095
7/02/21
—
(33,718)
Chilean
Peso
......
JPHQ
Sell
1,969,150,000
2,655,559
7/02/21
—
(25,819)
Chilean
Peso
......
JPHQ
Buy
3,436,820,000
4,784,825
7/06/21
—
(105,440)
Chilean
Peso
......
JPHQ
Sell
3,436,820,000
4,666,422
7/06/21
—
(12,963)
Euro
.............
JPHQ
Sell
47,840,399
478,636,972
NOK
7/07/21
—
(1,142,442)
Norwegian
Krone
...
JPHQ
Sell
478,636,972
46,990,704
EUR
7/07/21
134,717
—
Indian
Rupee
......
HSBK
Buy
999,725,100
13,341,230
7/12/21
86,437
—
Chinese
Yuan
......
CITI
Buy
169,481,510
25,970,994
7/14/21
209,085
—
Chilean
Peso
......
GSCO
Buy
2,530,950,000
3,504,840
7/15/21
—
(59,683)
Euro
.............
DBAB
Sell
16,223,497
165,827,663
SEK
7/15/21
136,338
—
Indian
Rupee
......
HSBK
Buy
609,733,408
8,041,855
7/15/21
144,799
—
Indian
Rupee
......
HSBK
Buy
609,733,409
8,225,413
7/19/21
—
(42,619)
South
Korean
Won
..
CITI
Buy
22,686,600,000
20,297,575
7/21/21
—
(221,500)
Singapore
Dollar
....
MSCO
Buy
3,270,000
2,462,294
7/22/21
—
(30,675)
South
Korean
Won
..
JPHQ
Buy
22,871,500,000
20,509,898
7/22/21
—
(270,313)
South
Korean
Won
..
JPHQ
Buy
22,407,000,000
20,087,137
7/26/21
—
(259,070)
South
Korean
Won
..
CITI
Buy
26,325,900,000
23,627,837
8/02/21
—
(332,891)
Euro
.............
CITI
Sell
592,851
925,380
CAD
8/03/21
42,846
—
Euro
.............
HSBK
Sell
97,144,038
151,155,792
CAD
8/03/21
6,636,771
—
South
Korean
Won
..
BNDP
Buy
26,013,700,000
23,371,757
8/03/21
—
(353,196)
Chilean
Peso
......
GSCO
Buy
7,610,315,964
10,609,114
8/06/21
—
(256,024)
Euro
.............
CITI
Sell
18,645,156
2,454,541,562
JPY
8/06/21
—
(24,994)
Japanese
Yen
......
CITI
Sell
2,471,285,422
18,645,156
EUR
8/06/21
—
(125,781)
Chilean
Peso
......
GSCO
Buy
1,224,830,000
1,663,312
8/09/21
2,818
—
Euro
.............
HSBK
Sell
43,700,000
52,566,730
8/10/21
700,402
—
Japanese
Yen
......
CITI
Buy
2,703,540,000
25,879,393
8/13/21
—
(1,533,159)
Japanese
Yen
......
CITI
Sell
2,703,540,000
25,787,295
8/13/21
1,441,060
—
Mexican
Peso
......
CITI
Buy
379,663,500
18,529,209
8/13/21
412,285
—
Mexican
Peso
......
CITI
Sell
379,663,500
18,717,010
8/13/21
20,418
(244,902)
Australian
Dollar
....
MSCO
Sell
27,013,000
21,034,213
8/16/21
775,746
—
Chilean
Peso
......
GSCO
Buy
4,748,107,280
6,724,031
8/16/21
—
(266,396)
Chilean
Peso
......
GSCO
Buy
4,545,115,082
6,424,556
8/17/21
—
(243,159)
Chilean
Peso
......
JPHQ
Buy
9,053,000,000
12,701,384
8/17/21
—
(389,222)
Euro
.............
CITI
Sell
46,372,115
5,950,516,184
JPY
8/24/21
—
(1,462,236)
Japanese
Yen
......
CITI
Sell
2,154,733,750
16,250,000
EUR
8/24/21
—
(113,679)
Chilean
Peso
......
GSCO
Buy
5,821,458,857
7,999,138
9/01/21
—
(85,068)
South
Korean
Won
..
CITI
Buy
48,080,000,000
42,842,695
9/03/21
—
(306,175)
Indian
Rupee
......
JPHQ
Buy
852,824,500
11,337,887
9/07/21
37,060
—
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
South
Korean
Won
..
CITI
Buy
18,190,000,000
16,238,897
9/07/21
$
—
$
(146,204)
Indian
Rupee
......
CITI
Buy
828,586,800
11,019,174
9/08/21
31,059
—
Indian
Rupee
......
JPHQ
Buy
1,103,130,100
14,761,148
9/08/21
—
(49,539)
Russian
Ruble
.....
JPHQ
Buy
189,344,300
2,491,635
9/08/21
70,152
—
Russian
Ruble
.....
MSCO
Buy
1,224,720,700
16,116,655
9/08/21
453,545
—
Indian
Rupee
......
CITI
Buy
998,784,000
13,476,138
9/09/21
—
(157,840)
Russian
Ruble
.....
JPHQ
Buy
265,673,500
3,530,160
9/09/21
63,732
—
Chinese
Yuan
......
BOFA
Buy
112,347,670
17,490,783
9/10/21
—
(209,077)
Chinese
Yuan
......
CITI
Buy
173,666,340
27,034,503
9/10/21
—
(320,549)
Chinese
Yuan
......
BOFA
Buy
134,698,690
20,938,705
9/13/21
—
(223,490)
Indian
Rupee
......
HSBK
Buy
1,002,522,050
13,576,583
9/13/21
—
(215,369)
Russian
Ruble
.....
DBAB
Buy
1,246,919,900
16,550,921
9/13/21
305,294
—
Russian
Ruble
.....
DBAB
Buy
799,087,600
10,617,411
9/14/21
183,043
—
Chilean
Peso
......
GSCO
Buy
8,227,346,581
11,337,337
9/15/21
—
(157,508)
Euro
.............
DBAB
Sell
6,335,779
65,201,500
SEK
9/15/21
99,323
—
Euro
.............
DBAB
Sell
6,904,098
74,330,900
NOK
9/15/21
438,497
—
Indian
Rupee
......
CITI
Buy
821,108,979
11,153,522
9/15/21
—
(212,946)
Indian
Rupee
......
HSBK
Buy
429,692,325
5,828,708
9/15/21
—
(103,425)
Mexican
Peso
......
MSCO
Buy
959,546,400
46,658,063
9/15/21
1,005,008
—
Mexican
Peso
......
MSCO
Sell
959,546,400
48,308,231
9/15/21
645,160
—
Euro
.............
DBAB
Sell
32,527,614
330,584,645
SEK
9/16/21
23,325
—
New
Zealand
Dollar
.
BOFA
Buy
7,120,000
5,048,169
9/21/21
—
(73,304)
Singapore
Dollar
....
CITI
Buy
5,200,000
3,873,226
9/22/21
—
(6,530)
South
Korean
Won
..
DBAB
Buy
73,000,000,000
64,485,354
9/23/21
96,797
—
Chilean
Peso
......
JPHQ
Buy
3,974,970,000
5,355,514
9/24/21
44,379
—
Australian
Dollar
....
CITI
Sell
13,867,000
10,508,759
9/28/21
107,354
—
Japanese
Yen
......
CITI
Buy
1,163,416,560
10,514,384
9/28/21
—
(32,981)
Chilean
Peso
......
GSCO
Buy
1,028,850,000
1,402,467
9/29/21
—
(5,022)
Chilean
Peso
......
JPHQ
Buy
7,468,900,000
10,435,670
9/30/21
—
(291,292)
Euro
.............
JPHQ
Sell
46,923,169
478,636,972
NOK
10/01/21
—
(123,302)
Chilean
Peso
......
JPHQ
Buy
3,436,820,000
4,660,158
10/04/21
7,105
—
Chinese
Yuan
......
HSBK
Buy
183,508,820
27,608,389
10/15/21
549,443
—
Euro
.............
DBAB
Sell
2,991,106
30,350,750
SEK
10/18/21
—
(4,840)
Euro
.............
DBAB
Sell
2,990,192
30,350,750
SEK
10/19/21
—
(3,795)
Euro
.............
CITI
Buy
8,540,000
10,218,110
10/21/21
—
(65,875)
Euro
.............
CITI
Sell
14,160,000
16,995,398
10/21/21
162,184
—
Singapore
Dollar
....
MSCO
Buy
4,130,000
3,093,992
10/21/21
—
(22,963)
Euro
.............
CITI
Buy
14,160,000
16,942,822
10/22/21
—
(109,196)
Euro
.............
CITI
Sell
14,160,000
17,114,342
10/22/21
280,716
—
Euro
.............
HSBK
Sell
48,576,693
6,128,192,671
JPY
10/25/21
—
(2,521,837)
Euro
.............
CITI
Sell
14,070,000
17,002,751
10/26/21
274,479
—
Singapore
Dollar
....
CITI
Buy
3,280,000
2,468,950
10/26/21
—
(29,975)
Euro
.............
HSBK
Sell
50,699,943
75,780,952
CAD
11/03/21
836,467
—
Indian
Rupee
......
CITI
Buy
619,835,000
8,137,521
11/10/21
63,483
—
Euro
.............
DBAB
Sell
6,549,012
66,685,319
SEK
11/17/21
13,976
—
Chinese
Yuan
......
JPHQ
Buy
127,500,470
19,543,717
11/22/21
—
(29,742)
Russian
Ruble
.....
JPHQ
Buy
143,649,800
1,908,587
12/06/21
2,564
—
Russian
Ruble
.....
MSCO
Buy
1,977,888,300
26,306,954
12/06/21
7,337
—
South
Korean
Won
..
GSCO
Buy
30,270,000,000
27,095,735
12/06/21
—
(327,883)
Russian
Ruble
.....
JPHQ
Buy
265,673,400
3,542,784
12/07/21
—
(8,897)
Chinese
Yuan
......
JPHQ
Buy
66,647,640
10,308,674
12/10/21
—
(120,585)
Chinese
Yuan
......
JPHQ
Buy
255,369,010
39,484,697
12/13/21
—
(455,607)
Euro
.............
DBAB
Sell
6,479,174
65,335,344
SEK
12/13/21
—
(63,217)
Chinese
Yuan
......
HSBK
Buy
184,710,190
28,544,745
12/15/21
—
(318,533)
Russian
Ruble
.....
DBAB
Buy
1,193,258,200
15,725,347
12/15/21
121,997
—
Euro
.............
DBAB
Sell
24,732,988
250,243,429
SEK
12/16/21
—
(144,155)
Euro
.............
JPHQ
Sell
2,402,278
24,300,000
SEK
12/17/21
—
(14,709)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
27
See
Note 11 regarding
other
derivative
information.
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
New
Zealand
Dollar
.
JPHQ
Buy
23,430,000
16,714,048
12/20/21
$
—
$
(350,912)
New
Zealand
Dollar
.
CITI
Buy
8,370,000
5,931,401
12/21/21
—
(85,958)
New
Zealand
Dollar
.
JPHQ
Buy
8,370,000
5,917,515
12/21/21
—
(72,072)
Chilean
Peso
......
GSCO
Buy
4,137,040,000
5,591,359
12/23/21
21,870
(11,417)
Indian
Rupee
......
JPHQ
Buy
850,416,900
11,017,190
1/27/22
122,621
—
Russian
Ruble
.....
DBAB
Buy
791,496,100
10,519,702
3/11/22
—
(158,651)
Indian
Rupee
......
SCNY
Buy
556,800,000
7,262,293
3/22/22
—
(21,833)
Euro
.............
DBAB
Sell
6,440,736
65,125,500
SEK
6/15/22
—
(61,011)
Euro
.............
CITI
Sell
22,221,186
228,796,000
NOK
6/21/22
—
(61,803)
Total
Forward
Exchange
Contracts
...................................................
$16,811,692
$(15,388,073)
Net
unrealized
appreciation
(depreciation)
............................................
$1,423,619
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
See
Abbreviations
on
page
47.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$1,555,278,144
Cost
-
Non-controlled
affiliates
(Note
3f)
........................................................
271,635,234
Value
-
Unaffiliated
issuers
..................................................................
$1,162,536,963
Value
-
Non-controlled
affiliates
(Note
3f)
........................................................
271,635,234
Cash
....................................................................................
2,579,685
Restricted
currency,
at
value
(cost
$5,590)
(Note
1d)
................................................
5,590
Foreign
currency,
at
value
(cost
$40,040,199)
......................................................
39,962,778
Receivables:
Capital
shares
sold
........................................................................
2,873,308
Interest
.................................................................................
18,678,081
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
8,690,000
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
16,811,692
Total
assets
..........................................................................
1,523,773,331
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
8,156,399
Capital
shares
redeemed
...................................................................
5,907,535
Management
fees
.........................................................................
790,525
Distribution
fees
..........................................................................
139,974
Transfer
agent
fees
........................................................................
768,473
Deposits
from
brokers
for:
OTC
derivative
contracts
..................................................................
2,240,000
Options
written,
at
value
(premiums
received
$13,390,072)
............................................
9,608,441
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
15,388,073
Deferred
tax
...............................................................................
1,002,137
Accrued
expenses
and
other
liabilities
...........................................................
720,349
Total
liabilities
.........................................................................
44,721,906
Net
assets,
at
value
.................................................................
$1,479,051,425
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$2,556,485,238
Total
distributable
earnings
(losses)
.............................................................
(1,077,433,813)
Net
assets,
at
value
.................................................................
$1,479,051,425
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
29
Templeton
Global
Total
Return
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$435,476,081
Shares
outstanding
........................................................................
45,838,490
Net
asset
value
per
share
a
..................................................................
$9.50
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$9.87
Class
C:
Net
assets,
at
value
.......................................................................
$81,968,619
Shares
outstanding
........................................................................
8,640,785
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$9.49
Class
R:
Net
assets,
at
value
.......................................................................
$7,775,888
Shares
outstanding
........................................................................
818,004
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.51
Class
R6:
Net
assets,
at
value
.......................................................................
$240,087,500
Shares
outstanding
........................................................................
25,254,071
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.51
Advisor
Class:
Net
assets,
at
value
.......................................................................
$713,743,337
Shares
outstanding
........................................................................
74,984,044
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.52
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
30
Templeton
Global
Total
Return
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3f)
.............................................................
$7,448
Interest:
(net
of
foreign
taxes
of
$1,585,407)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
19,066,593
Paid
in
cash
a
...........................................................................
44,199,634
Total
investment
income
...................................................................
63,273,675
Expenses:
Management
fees
(Note
3a)
...................................................................
5,439,837
Distribution
fees:
(Note
3c)
    Class
A
................................................................................
567,043
    Class
C
................................................................................
310,775
    Class
R
................................................................................
19,417
Transfer
agent
fees:
(Note
3e)
    Class
A
................................................................................
399,109
    Class
C
................................................................................
84,114
    Class
R
................................................................................
6,834
    Class
R6
...............................................................................
52,548
    Advisor
Class
............................................................................
765,564
Custodian
fees
(Note
4)
......................................................................
440,313
Reports
to
shareholders
......................................................................
68,562
Registration
and
filing
fees
....................................................................
70,322
Professional
fees
...........................................................................
60,745
Trustees'
fees
and
expenses
..................................................................
41,766
Other
....................................................................................
50,956
Total
expenses
.........................................................................
8,377,905
Expense
reductions
(Note
4)
...............................................................
(6,608)
Expenses
waived/paid
by
affiliates
(N
ote
3f
and
3g)
..............................................
(85,227)
Net
expenses
.........................................................................
8,286,070
Net
investment
income
................................................................
54,987,605
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
(40,870,098)
Written
options
...........................................................................
(785,055)
Foreign
currency
transactions
................................................................
987,779
Forward
exchange
contracts
.................................................................
(49,227,883)
Net
realized
gain
(loss)
..................................................................
(89,895,257)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(48,105,915)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(1,025,721)
Written
options
...........................................................................
6,495,095
Forward
exchange
contracts
.................................................................
50,568,167
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
651,423
Net
change
in
unrealized
appreciation
(depreciation)
............................................
8,583,049
Net
realized
and
unrealized
gain
(loss)
............................................................
(81,312,208)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(26,324,603)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
{Footer
Text}
Semiannual
Report
31
Templeton
Global
Total
Return
Fund
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$54,987,605
$133,933,600
Net
realized
gain
(loss)
.................................................
(89,895,257)
(521,409,279)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
8,583,049
170,125,768
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(26,324,603)
(217,349,911)
Distributions
to
shareholders:
Class
A
.............................................................
(15,979,787)
(992,841)
Class
C
.............................................................
(3,128,007)
(241,971)
Class
R
.............................................................
(265,047)
(11,071)
Class
R6
............................................................
(9,698,815)
(953,591)
Advisor
Class
........................................................
(31,238,340)
(2,811,103)
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(27,465,171)
Class
C
.............................................................
—
(6,693,699)
Class
R
.............................................................
—
(306,249)
Class
R6
............................................................
—
(26,379,395)
Advisor
Class
........................................................
—
(77,764,112)
Total
distributions
to
shareholders
..........................................
(60,309,996)
(143,619,203)
Capital
share
transactions:
(Note
2)
Class
A
.............................................................
(24,604,998)
(217,260,963)
Class
C
.............................................................
(26,683,031)
(104,199,862)
Class
R
.............................................................
410,655
1,086,048
Class
R6
............................................................
(40,750,602)
(510,743,871)
Advisor
Class
........................................................
(345,713,024)
(1,379,205,858)
Total
capital
share
transactions
............................................
(437,341,000)
(2,210,324,506)
Net
increase
(decrease)
in
net
assets
...................................
(523,975,599)
(2,571,293,620)
Net
assets:
Beginning
of
period
.....................................................
2,003,027,024
4,574,320,644
End
of
period
..........................................................
$1,479,051,425
$2,003,027,024
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
Templeton
Global
Total
Return
Fund
32
franklintempleton.com
Semiannual
Report
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
Global
Total
Return
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
after
they
have
been
held
for
10
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 Fund's
administrator
has
responsibility
for
oversight
of
valuation,
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. 
Debt
securities
generally
trade
in
the OTC
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
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,
book
values,
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
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
33
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
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.
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.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
34
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
terms
are
contract
specific
for
OTC
derivatives.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of
the
agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund,
if
any,
is
held
in
segregated
accounts
with
the
Fund’s
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
The
Fund
purchased
or
wrote
OTC
option
contracts
primarily
to
manage
and/or
gain
exposure
to
foreign
exchange
rate
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.
See
Note
11 regarding
other
derivative
information.
d.
Restricted
Currency
At
June
30,
2021,
the
Fund
held
currencies
in
certain
markets
in
which
the
ability
to
repatriate
such
currency
is
limited.
As
a
result
of
such
limitations
on
repatriation,
the
Fund
may
incur
substantial
delays
in
gaining
access
to
these
assets
and
may
be
exposed
to
potential
adverse
movements
in
currency
value.
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.
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
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
35
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
based
on
its
technical
merits.
As
of
June
30,
2021,
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
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
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.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
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.
1.
Organization
and
Significant
Accounting
Policies
(continued)
e.
Income
and
Deferred
Taxes
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
36
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
June
30,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
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:
Six
Months
Ended
June
30,
2021
Year
Ended
December
31,
2020
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
5,105,537
$49,553,824
18,417,702
$189,471,069
Shares
issued
in
reinvestment
of
distributions
..........
1,250,490
12,127,223
2,048,612
21,146,454
Shares
redeemed
...............................
(8,886,974)
(86,286,045)
(41,849,275)
(427,878,486)
Net
increase
(decrease)
..........................
(2,530,947)
$(24,604,998)
(21,382,961)
$(217,260,963)
Class
C
Shares:
Shares
sold
...................................
240,828
$2,346,275
1,324,479
$13,677,606
Shares
issued
in
reinvestment
of
distributions
..........
312,316
3,025,504
600,638
6,200,018
Shares
redeemed
a
..............................
(3,299,945)
(32,054,810)
(12,084,491)
(124,077,486)
Net
increase
(decrease)
..........................
(2,746,801)
$(26,683,031)
(10,159,374)
$(104,199,862)
Class
R
Shares:
Shares
sold
...................................
129,605
$1,260,555
693,427
$7,104,295
Shares
issued
in
reinvestment
of
distributions
..........
26,846
260,346
30,150
309,106
Shares
redeemed
...............................
(113,889)
(1,110,246)
(616,867)
(6,327,353)
Net
increase
(decrease)
..........................
42,562
$410,655
106,710
$1,086,048
Class
R6
Shares:
Shares
sold
...................................
2,787,401
$26,930,009
10,273,374
$109,626,734
Shares
issued
in
reinvestment
of
distributions
..........
645,434
6,270,237
2,177,213
22,631,186
Shares
redeemed
...............................
(7,681,790)
(73,950,848)
(62,403,556)
(643,001,791)
Net
increase
(decrease)
..........................
(4,248,955)
$(40,750,602)
(49,952,969)
$(510,743,871)
Advisor
Class
Shares:
Shares
sold
...................................
12,995,746
$126,757,018
56,929,039
$591,194,306
Shares
issued
in
reinvestment
of
distributions
..........
2,830,117
27,521,579
6,796,675
70,563,584
Shares
redeemed
...............................
(51,370,350)
(499,991,621)
(196,224,056)
(2,040,963,748)
Net
increase
(decrease)
..........................
(35,544,487)
$(345,713,024)
(132,498,342)
$(1,379,205,858)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
37
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
June
30,
2021,
the
annualized
gross
effective
investment
management
fee
rate
was
0.646%
of
the
Fund’s
average
daily
net
assets. 
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
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
0.700%
Up
to
and
including
$200
million
0.650%
Over
$200
million,
up
to
and
including
$1.3
billion
0.600%
Over
$1.3
billion,
up
to
and
including
$2.5
billion
0.585%
Over
$2.5
billion,
up
to
and
including
$5
billion
0.575%
Over
$5
billion,
up
to
and
including
$10
billion
0.565%
In
excess
of
$10
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$2,106
CDSC
retained
..............................................................................
$5,686
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
38
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
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
June
30,
2021,
the
Fund
paid
transfer
agent
fees
of
$1,308,169,
of
which $414,706
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
June
30,
2021,
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
April
30,
2022.
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
June
30,
2021,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations.
    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
Global
Total
Return
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.......
$189,612,936
$799,084,243
$(717,061,945)
$—
$—
$271,635,234
271,635,234
$7,448
Total
Affiliated
Securities
....
$189,612,936
$799,084,243
$(717,061,945)
$—
$—
$271,635,234
$7,448
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
39
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2020,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$63,904,938.
At
June
30,
2021,
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,
foreign
capital
gains
tax,
payments-in-kind,
bond
discounts
and
premiums,
tax
straddles
and
inflation
related
adjustments
on
foreign
securities.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2021,
aggregated
$156,111,376
and
$698,552,084,
respectively.
7.
Credit
Risk
At
June
30,
2021,
the
Fund
had
27.0%
of
its
portfolio
invested
in
high
yield
or
other
securities
rated
below
investment
grade
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
8.
Concentration
of
Risk
Investments
in
issuers
domiciled
or
with
significant
operations
in
developing
or
emerging
market
countries
may
be
subject
to
higher
risks
than
investments
in
developed
countries.
These
risks
include
fluctuating
currency
values,
underdeveloped
legal
or
business
systems,
and
changing
local
and
regional
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Currencies
of
developing
or
emerging
market
countries
may
be
subject
to
significantly
greater
risks
than
currencies
of
developed
countries,
including
the
potential
inability
to
repatriate
those
currencies
into
U.S.
dollars.
At
June
30,
2021,
the
Fund
had
7.1%
of
its
net
assets
denominated
in
Argentine
Pesos. Argentina
has
restricted
currency
repatriation
since
September
2019,
and
had
restructured
certain
issues
of
its
debt.
Political
and
economic
conditions
in
Argentina
could
continue
to
affect
the
value
of
the
Fund's
holdings.
Capital
loss
carryforwards
not
subject
to
expiration:
Long
term
................................................................................
$518,875,717
Cost
of
investments
..........................................................................
$1,822,738,959
Unrealized
appreciation
........................................................................
$119,680,083
Unrealized
depreciation
........................................................................
(523,994,929)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(404,314,846)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
40
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
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.
Restricted
Securities
The
Fund
invests
in
securities
that
are
restricted
under
the
Securities
Act
of
1933
(1933
Act).
Restricted
securities
are
often
purchased
in
private
placement
transactions,
and
cannot
be
sold
without
prior
registration
unless
the
sale
is
pursuant
to
an
exemption
under
the
1933
Act.
Disposal
of
these
securities
may
require
greater
effort
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult.
The Fund
may
have
registration
rights
for
restricted
securities.
The
issuer
generally
incurs
all
registration
costs.
At
June
30,
2021,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
11.
Other
Derivative
Information
At
June
30,
2021,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
Shares
Issuer
Acquisition
Date
Cost
Value
Templeton
Global
Total
Return
Fund
434,200,485
a
K2016470219
South
Africa
Ltd.,
A
...............
2/22/11-2/01/17
$
1,608,225
$
—
50,014,925
a
K2016470219
South
Africa
Ltd.,
B
...............
2/01/17
37,134
—
Total
Restricted
Securities
(Value
is
—%
of
Net
Assets)
..............
$1,645,359
$—
a
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$0
as
of
June
30,
2021.
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
Global
Total
Return
Fund
Foreign
exchange
contracts
..
Investments
in
securities,
at
value
$
8,979,226
a
Options
written,
at
value
$
9,608,441
Unrealized
appreciation
on
OTC
forward
exchange
contracts
16,
811,692
Unrealized
depreciation
on
OTC
forward
exchange
contracts
15,3
88,073
Total
....................
$25,790,918
$24,996,514
a
Purchased
option
contracts
are
included
in
investments
in
securities,
at
value
in
the
Statement
of
Assets
and
Liabilities.
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
41
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
For
the
period
ended
June
30,
2021,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
June
30,
2021,
the
average
month
end
notional
amount
of
options
represented
$2,231,835,374.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$2,699,825,829.
At
June
30,
2021,
OTC
derivative
assets
and
liabilities
are
as
follows:
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
Global
Total
Return
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Foreign
exchange
contracts
.....
Investments
$(24,043,854)
a
Investments
$8,797,696
a
Written
options
(785,055)
Written
options
6,495,095
Forward
exchange
contracts
(49,227,883)
Forward
exchange
contracts
50,568,167
Total
.......................
$(74,056,792)
$65,860,958
a
Purchased
option
contracts
are
included
in
net
realized
gain
(loss)
from
investments
and
net
change
in
unrealized
appreciation
(depreciation)
on
investments
in
the
Statement
of
Operations.
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
Global
Total
Return
Fund
Derivatives
Forward
exchange
contracts
.............................
$
16,
811,692
$
15,3
88,073
Options
purchased
.....................................
8,979,226
—
Options
written
........................................
—
9,608,441
Total
.............................................
$25,790,918
$24,996,514
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
42
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
At
June
30,
2021,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
At
June
30,
2021,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
a,b
Cash
Collateral
Received
b
Net
Amount
(Not
less
than
zero)
Templeton
Global
Total
Return
Fund
Counterparty
BNDP
...................
$—
$—
$—
$—
$—
BOFA
....................
—
—
—
—
—
CITI
.....................
8,180,623
(8,180,623)
—
—
—
DBAB
...................
1,418,590
(435,669)
(982,921)
—
—
GSCO
...................
24,688
(24,688)
—
—
—
HSBK
...................
8,954,319
(3,201,783)
(5,533,830)
—
218,706
JPHQ
...................
482,330
(482,330)
—
—
—
MSCO
...................
6,730,368
(4,462,686)
—
(2,240,000)
27,682
SCNY
...................
—
—
—
—
—
Total
...................
$25,790,918
$(16,787,779)
$
(6,516,751)
$(2,240,000)
$246,388
$
1
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
Cash
Collateral
Pledged
b
Net
Amount
(Not
less
than
zero)
Templeton
Global
Total
Return
Fund
Counterparty
BNDP
...................
$353,196
$—
$—
$(353,196)
$—
BOFA
....................
505,871
—
—
(420,000)
85,871
CITI
.....................
10,794,567
(8,180,623)
—
(2,613,944)
—
DBAB
...................
435,669
(435,669)
—
—
—
GSCO
...................
1,437,409
(24,688)
—
(970,000)
442,721
HSBK
...................
3,201,783
(3,201,783)
—
—
—
JPHQ
...................
3,783,500
(482,330)
—
(2,850,000)
451,170
MSCO
...................
4,462,686
(4,462,686)
—
—
—
SCNY
...................
21,833
—
—
—
21,833
Total
...................
$24,996,514
$(16,787,779)
$—
$(7,207,140)
$1,001,595
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
43
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
47
.
12.
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
4,
2022.
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
June
30,
2021,
the Fund
did
not
use
the
Global
Credit
Facility.
13.
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
June
30,
2021,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
a
At
June
30,
2021,
the
Fund
received
U.S.
Treasury
Bills,
Bonds
and
Notes
and
U.K
Inflation-Linked
Gilt
Bonds
as
collateral
for
derivatives.
b
In
some
instances,
the
collateral
amounts
disclosed
in
the
table
above
were
adjusted
due
to
the
requirement
to
limit
collateral
amounts
to
avoid
the
effect
of
overcollateralization.
Actual
collateral
received
and/or
pledged
may
be
more
than
the
amounts
disclosed
herein.
Level
1
Level
2
Level
3
Total
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
Securities:
Common
Stocks
........................
$
—
$
—
$
—
a
$
—
Corporate
Bonds
........................
—
—
—
a
—
Foreign
Government
and
Agency
Securities
:
Argentina
............................
—
—
94,865,224
94,865,224
Bosnia
and
Herzegovina
.................
—
8,703
—
8,703
Brazil
...............................
—
23,449,337
—
23,449,337
Colombia
............................
—
81,180,329
—
81,180,329
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
44
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
period.
At
June
30,
2021,
the
reconciliation
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Global
Total
Return
Fund
(continued)
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Ecuador
.............................
$
—
$
51,262,218
$
—
$
51,262,218
Ghana
..............................
—
81,423,530
—
81,423,530
India
................................
—
65,704,796
—
65,704,796
Indonesia
............................
—
163,547,354
—
163,547,354
Mexico
..............................
—
80,664,171
—
80,664,171
Norway
..............................
—
89,388,455
—
89,388,455
South
Korea
..........................
—
60,605,145
—
60,605,145
Sri
Lanka
............................
—
5,986,017
—
5,986,017
Turkey
..............................
—
27,636,582
—
27,636,582
U.S.
Government
and
Agency
Securities
.......
—
106,811,042
—
106,811,042
Options
purchased
.......................
—
8,979,226
—
8,979,226
Short
Term
Investments
...................
271,635,234
211,913,560
9,111,274
492,660,068
Total
Investments
in
Securities
...........
$271,635,234
$1,058,560,465
$103,976,498
$1,434,172,197
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
16,811,692
$
—
$
16,811,692
Restricted
Currency
(ARS)
.................
—
—
5,590
5,590
Total
Other
Financial
Instruments
.........
$—
$16,811,692
$5,590
$16,817,282
Receivables:
Interest
(ARS)
...........................
$—
$—
$1,570,719
$1,570,719
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
9,608,441
$
—
$
9,608,441
Forward
exchange
contracts
................
—
15,388,073
—
15,388,073
Total
Other
Financial
Instruments
.........
$—
$24,996,514
$—
$24,996,514
Payables:
Deferred
Tax(ARS)
.......................
$—
$—
$3,554
$3,554
a
Includes
securities
determined
to
have
no
value
at
June
30,
2021.
Balance
at
Beginning
of
Period
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(
Amortiza
-
tion
)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
South
Africa
...
$
—
c
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
c
$
—
Corporate
Bonds
:
South
Africa
...
74,652
c
7,441
—
—
—
1,429,324
—
(1,511,417)
—
c
(1,511,417)
Foreign
Government
and
Agency
Securities
:
Argentina
.....
88,185,397
21,593,357
(4,660,868)
—
—
4,186,309
(1,234,691)
(13,204,280)
94,865,224
(10,784,951)
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
45
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
Significant
unobservable
valuation
inputs
for
material
Level
3 assets
and/or
liabilities and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
June
30,
2021,
are
as
follows:
Balance
at
Beginning
of
Period
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(Amortiza-
tion)
Net
Realized
Gain
(Loss)
Net
Unrealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Global
Total
Return
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Short
Term
Investments
...
$
4,977,605
$
9,305,855
$
(3,747,044)
$
—
$
—
$
55,837
$
(346,512)
$
(1,134,467)
$
9,111,274
$
(1,058,907)
Total
Investments
in
Securities
........
$93,237,654
$30,906,653
$(8,407,912)
$—
$—
$5,671,470
$(1,581,203)
$(15,850,164)
$103,976,498
$(13,355,275)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
.......
$5,195
$38,551,342
$(38,243,586)
$—
$—
$—
$(307,430)
$69
$5,590
$—
Receivables:
Interest
(ARS)
..
$1,629,514
$22,705,292
$(22,594,438)
$—
$—
$—
$(23,299)
$(146,350)
$1,570,719
$(66,728)
Liabilities:
Payables:
Deferred
Tax
(ARS)
$4,195
$—
$—
$—
$—
$—
$—
$(641)
$3,554
$(641)
Investment
Securities
Purchased
(ARS)
$763,524
$—
$(769,919)
$—
$—
$—
$6,395
$—
$—
$—
a
Purchases
include
all
purchases
of
securities
and
securities
received
in
corporate
actions.
b
Sales
include
all
sales
of
securities,
maturities,
paydowns
and
securities
tendered
in
corporate
actions.
c
Includes
securities
determined
to
have
no
value.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
46
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
14.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
and
2023. The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements. 
15.
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,
except
for
the
following:
Description
Fair
Value
at
End
of
Period
Valuation
Technique
Unobservable
Inputs
Amount/Range
(Weighted
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Argentina
...........
$94,865,224
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
b
Short
Term
Investments:
Argentina
...........
9,111,274
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
b
Receivables:
Interest
(
ARS
)
.........
1,570,719
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
c
All
Other
............
5,590
d,e
Liabilities:
All
Other
............
3,554
e
Total
...............
$105,549,253
a
Represents
the
directional
change
in
the
fair
value
of
the
Level
3
financial
instruments
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
impacts,
if
any,
to
fair
value
and/or
net
assets
have
been
indicated.
b
Represents
a
significant
impact
to
fair
value
and
net
assets.
c
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
d
Includes
securities
determined
to
have
no
value
at
June
30,
2021.
e
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
47
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
On
July
14,
2021,
the
Board
approved
a
change
to
the
automatic
conversion
feature
for
Class
C
that
will
convert
shareholders’
Class
C
shares
into
Class
A
shares
after
they
have
been
held
for
8
years.
The
change
will
become
effective
August
2,
2021.
Further
details
are
disclosed
in
the
Fund’s
Prospectus.
Abbreviations
Counterparty
BNDP
BNP
Paribas
SA
BOFA
Bank
of
America
Corp.
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
SCNY
Standard
Chartered
Bank
Selected
Portfolio
BADLAR
Argentina
Deposit
Rates
Badlar
Private
Banks
ARS
CER
Reference
Stabilization
Coefficient
FRN
Floating
Rate
Note
LIBOR
London
Inter-Bank
Offered
Rate
PIK
Payment-In-Kind
Cu
r
rency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
COP
Colombian
Peso
DEM
Deutsche
Mark
EGP
Egyptian
Pound
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
SGD
Singapore
Dollar
TRY
Turkish
Lira
USD
United
States
Dollar
15.
Subsequent
Events
(continued)
Templeton
Income
Trust
Tax
Information
(unaudited)
48
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
Under
Section
853
of
the
Internal
Revenue
Code,
the
Fund
intends
to
elect
to
pass
through
to
its
shareholders
$
5,200,888
of
foreign
taxes
paid
and
$
118,640,128
of
foreign
source
income
earned
by
the
fund,
or
amounts
as
finally
determined,
during
the
fiscal
year
ended
December
31,
202
0
.
Templeton
Income
Trust
Shareholder
Information
49
franklintempleton.com
Semiannual
Report
Board
Approval
of
Investment
Management
Agreements
TEMPLETON
INCOME
TRUST
Templeton
Global
Total
Return
Fund
(Fund)
At
a
meeting
held
on
February
23,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Trust,
on
behalf
of
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
telephonic
contract
renewal
meeting
at
which
the
Independent
Trustees
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters
and,
in
some
cases,
requested
additional
information
from
the
Manager
relating
to
the
contract.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
in
the
current
work-from-home
environment
and
liquidity
risk
management.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
and
growth
opportunities,
Templeton
Income
Trust
Shareholder
Information
50
franklintempleton.com
Semiannual
Report
as
evidenced
by
its
recent
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2020.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
a
customized
peer
group
(Performance
Customized
Peer
Group)
selected
by
the
Manager.
The
Board
further
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
international
income
funds.
The
Performance
Customized
Peer
Group
for
the
Fund
also
provided
for
the
Board’s
consideration
included
the
Fund
and
all
retail
and
institutional
global
income
funds.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-,
five-
and
10-year
periods
was
above
the
medians
and
in
the
first
(best)
and
second
quintiles
of
its
Performance
Universe
and
Performance
Customized
Peer
Group.
The
Board
also
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
medians
of
its
Performance
Universe
and
Performance
Customized
Peer
Group,
except
that
the
annualized
total
return
for
the
ten-year
period
was
above
the
median
and
in
the
second
quintile
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
during
the
three-
and
five-
year
periods,
management
largely
positioned
the
Fund’s
strategies
for
potential
rising
interest
rates
by
maintaining
low
portfolio
duration
and
aiming
at
a
negative
correlation
with
US
Treasury
returns.
Management
further
explained
that
the
interest-rate
strategies
detracted
from
the
Fund’s
relative
return,
as
did
the
underweighting
of
developed
market
duration
exposures
as
compared
to
peers.
Management
also
explained
that
the
Performance
Universe
was
comprised
of
funds
that
invest
in
debt
securities
of
issuers
located
in
at
least
three
countries,
excluding
the
US,
whereas
the
Performance
Customized
Peer
Group
was
comprised
of
funds
that,
like
the
Fund,
invest
in
debt
securities
of
issuers
located
in
at
least
three
countries,
one
of
which
may
be
the
US.
Management
further
explained
that
the
peers
in
the
Performance
Customized
Peer
Group
with
long
duration
US
exposure
likely
benefitted
from
declining
interest
rates.
Management
also
explained
that
the
Fund
is
managed,
and
marketed,
as
a
benchmark-agnostic
strategy
and,
as
such,
can
be
difficult
to
compare
to
other
fixed
income
funds.
Management
noted,
however,
that
the
Fund’s
defensive
positioning
served
to
protect
the
Fund
during
recent
short-term
periods
of
market
stress.
Management
then
discussed
with
the
Board
recent
adjustments
that
have
been
made
to
the
Fund’s
portfolio
positions
in
light
of
current
market
conditions,
and
that
management
has
continued
to
add
resources
to
the
portfolio
management
team
as
needed
and
that
the
sources
of
analysis
and
input
have
continued
to
expand.
The
Board
then
noted
the
Fund’s
first
(best)
and
second
quintile
annualized
income
return
compared
to
that
of
its
Performance
Universe
and
Performance
Customized
Peer
Group
for
each
period.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
Templeton
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Trust
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51
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the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
eight
other
international
income
funds.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
the
Fund
were
below
the
medians
of
its
Expense
Group.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2020,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
further
noted
management’s
representation
that
the
profitability
analysis
excluded
the
impact
of
the
recent
acquisition
of
the
Legg
Mason
companies
and
that
management
expects
to
incorporate
the
legacy
Legg
Mason
companies
into
the
profitability
analysis
beginning
next
year.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
noted
that
the
Fund
had
experienced
a
decrease
in
assets
and
would
not
be
expected
to
demonstrate
additional
economies
of
scale
in
the
near
term,
but
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
the
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Templeton
Income
Trust
Shareholder
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52
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Semiannual
Report
Liquidity
Risk
Management
Program-
Funds
no
HLIM
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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.
Templeton
Income
Trust
Shareholder
Information
53
franklintempleton.com
Semiannual
Report
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
as
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.
407
S
08/21
©
2021
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
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SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
Emerging
Markets
Bond
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2021
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up
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report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
June
30,
2021,
many
global
economies
improved
as
coronavirus
vaccines
were
distributed
and
people
reengaged
with
the
world.
However,
inflation
surged
in
many
countries
in
the
period's
second
half,
driven
by
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Many
central
banks
signaled
the
end
of
rate-cutting,
and
some
began
to
move
toward
policy
normalization,
but
the
U.S.
Federal
Reserve,
the
European
Central
Bank
and
the
Bank
of
Japan
kept
their
policy
rates
unchanged.
Rising
yields
during
2021's
first
quarter
strained
valuations
across
global
fixed
income
markets,
creating
headwinds
for
the
asset
class
during
the
six-month
period.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
-4.75%
and
-2.49%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
broadly
appreciated
against
most
foreign
currencies
during
the
period.
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
their
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
Emerging
Markets
Bond
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,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2021,
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
Emerging
Markets
Bond
Fund
3
Performance
Summary
7
Your
Fund’s
Expenses
9
Financial
Highlights
and
Statement
of
Investments
10
Financial
Statements
21
Notes
to
Financial
Statements
25
Tax
Information
41
Shareholder
Information
42
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
Emerging
Markets
Bond
Fund
This
semiannual
report
for
Templeton
Emerging
Markets
Bond
Fund
covers
the
period
ended
June
30,
2021
.
As
previously
communicated,
effective
September
30,
2021,
the
Fund
will
change
its
name
to
Templeton
Sustainable
Emerging
Markets
Bond
Fund.
Additionally,
the
Fund
will
change
its
goal
and
investment
strategy.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
current
income
with
capital
appreciation
as
a
secondary
goal.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
a
non-
diversified
portfolio
of
bonds
issued
by
governments
or
government-related
entities
that
are
located
in
emerging
market
countries,
as
well
as
bonds
issued
by
emerging
market
corporate
entities.
For
purposes
of
the
Fund’s
80%
policy,
bonds
issued
by
entities
located
in
emerging
markets
countries
include
derivative
instruments
and
other
investments
that
have
economic
characteristics
similar
to
such
securities.
*Includes
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-0.66%
cumulative
total
return.
In
comparison,
U.S.
dollar-denominated
emerging
market
bonds,
as
measured
by
the
Fund’s
benchmark,
the
J.P.
Morgan
(JPM)
Emerging
Markets
Bond
Index
(EMBI)
Global,
posted
a
-1.00%
cumulative
total
return
in
U.S.
dollar
terms
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
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
Sovereign
bond
yields
rose
across
much
of
the
world
during
the
first
half
of
the
six-month
period
ended
June
30,
2021,
as
vaccine
distributions,
ongoing
stimulus
measures
and
optimism
for
improving
economic
conditions
appeared
to
fuel
reflation
expectations
across
financial
markets.
In
April,
sovereign
bond
yields
in
much
of
Asia
and
the
Americas
pulled
back
from
their
March
peaks,
while
many
areas
of
Europe
saw
yields
continue
to
rise.
In
June,
sovereign
bond
yields
declined
across
developed
markets
but
shifted
in
varying
directions
in
emerging
markets.
On
the
whole,
most
countries
around
the
world
saw
yields
rise
significantly
over
the
six-month
period,
despite
the
general
trend
of
declining
yields
over
the
final
months
of
the
period.
The
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
six-month
period
55
basis
points
(bps)
higher
at
1.47%.
It
reached
an
intra-period
peak
of
1.74%
on
March
31,
its
highest
level
since
January
2020.
In
Europe,
the
yield
on
the
10-year
German
Bund
finished
the
six-month
period
36
bps
higher
at
-0.21%.
In
Asia,
the
yield
on
the
10-year
Japanese
government
bond
rose
three
bps
to
0.05%.
In
emerging
markets,
sovereign
bond
yields
rose
in
India,
Indonesia,
Thailand,
Brazil,
Mexico,
Chile,
Colombia
and
Peru.
Rising
yields
strained
valuations
across
many
areas
of
the
global
fixed
income
markets
during
2021’s
first
quarter.
U.S.
dollar
(USD)-denominated
sovereign
credit
sectors
broadly
saw
negative
returns
in
January,
February
and
March,
before
sharply
reversing
to
generate
offsetting
positive
returns
in
April,
May
and
June
as
yields
declined.
In
currency
markets,
the
USD
broadly
strengthened
against
a
number
of
major
developed
market
and
emerging
market
currencies
in
the
first
quarter,
with
a
few
notable
exceptions.
That
trend
reversed
in
April
and
May
as
the
USD
broadly
depreciated,
before
returning
to
a
strengthening
pattern
Portfolio
Composition
6/30/21
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
74.7%
Corporate
Bonds
2.2%
Short-Term
Investments
&
Other
Net
Assets
*
23.1%
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.
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
15
.
Templeton
Emerging
Markets
Bond
Fund
4
franklintempleton.com
Semiannual
Report
in
June.
On
the
whole,
the
USD
finished
the
six-month
period
broadly
stronger
against
most
currencies,
with
some
exceptions.
In
Asia,
the
Chinese
yuan
appreciated
1.08%
against
the
USD
in
the
six-month
period,
while
the
Indonesian
rupiah
depreciated
3.10%,
the
Indian
rupee
1.76%,
the
South
Korean
won
3.71%
and
the
Japanese
yen
7.05%.
In
Latin
America,
the
Brazilian
real
appreciated
4.38%
against
the
USD,
while
the
Colombian
peso
depreciated
8.79%
and
the
Chilean
peso
3.25%.
Vaccine
distributions
progressively
accelerated
in
many
countries
during
the
period,
though
supply
setbacks
affected
areas
of
Europe
in
March
and
April.
Novel
coronavirus
(COVID-19)
infection
levels
peaked
in
January
in
the
U.S.
and
Europe
before
declining
in
February
and
plateauing
in
March.
Cases
continued
to
trend
lower
in
April,
May
and
June.
Governments
continued
to
struggle
with
balancing
the
needs
of
their
economies
with
the
health
of
their
citizens
during
much
of
the
first
half
of
the
period
before
higher
vaccination
rates
and
lower
case
levels
enabled
many
regions
to
progressively
reopen
their
economies
in
the
second
quarter.
Business
and
consumer
confidence
surveys
strengthened
in
multiple
regions
during
the
period,
particularly
in
the
second
quarter,
despite
some
growing
concerns
over
the
proliferation
of
the
COVID-19
delta
variant
in
several
parts
of
the
world
in
June,
notably
in
the
U.K.
and
Australia.
Economic
activity
continued
to
broadly
expand
in
many
countries
during
the
second
half
of
the
period,
largely
driven
by
strength
in
goods
sectors
and
manufacturing.
Historically
high
savings
rates
in
many
countries
also
fueled
resurgent
growth
in
the
spring
and
summer
months.
Labor
market
conditions
generally
continued
to
improve
in
many
countries
during
the
period,
though
unemployment
broadly
remained
above
pre-pandemic
levels.
Inflation
figures
surged
higher
in
many
countries
in
April,
May
and
June,
driven
by
a
combination
of
factors
that
included
cyclical
upswings
associated
with
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Headline
Consumer
Price
Index
(CPI)
inflation
in
the
U.S.
rose
from
2.6%
year-over-year
in
March
to
4.2%
in
April
and
5.0%
in
May,
its
highest
level
since
2008.
In
Europe,
euro
area
(EA)
inflation
rose
from
0.9%
in
February
to
1.3%
in
March,
1.6%
in
April
and
2.0%
in
May,
before
levelling
off
at
1.9%
(estimated)
in
June;
the
EA
had
previously
endured
deflationary
pressures
through
the
third
and
fourth
quarters
of
2020.
Areas
of
non-core
Europe,
such
as
Hungary
and
Russia,
experienced
above-target
levels
of
inflation
in
May
and
June.
Globally,
areas
of
Latin
America,
such
as
Brazil
and
Mexico,
also
experienced
above-target
inflation
during
the
period,
while
inflation
levels
remained
relatively
more
contained
in
areas
of
Asia,
such
as
China,
South
Korea,
Indonesia
and
Thailand.
Pent-up
demand
outpaced
supply
recoveries
in
certain
sectors
during
the
spring
and
summer
months,
adding
to
pricing
pressures.
Supply
bottlenecks
have
intermittently
surfaced
across
a
myriad
of
industries
due
to
accelerating
demand,
as
well
as
logistical
disruptions
and
ongoing
uncertainties
(economic,
health
and
policy)
that
make
it
difficult
to
accurately
schedule
production.
Most
central
banks
around
the
world
signaled
during
the
middle
of
the
six-month
period
that
they
had
reached
the
end
of
their
rate-cutting
cycles,
with
several
banks
beginning
to
pivot
towards
plans
for
policy
normalization.
In
emerging
markets,
several
countries
faced
persistent
inflation
pressures
that
may
force
a
faster
tightening
response
from
their
central
banks.
Notably,
Brazil’s
central
bank
hiked
rates
75
bps
three
times
during
the
period
(March,
May
and
June)
to
4.25%,
and
Mexico’s
central
bank
hiked
its
policy
rate
25
bps
in
June
to
4.25%,
its
first
rate
hike
since
December
2018.
Other
countries
indicated
they
may
begin
pursuing
tightening
policies
in
the
second
half
of
2021.
The
Fed
kept
the
federal
funds
target
rate
unchanged
at
0.00%–0.25%,
at
each
of
its
policy
meetings
during
the
period.
In
March,
the
Fed
notably
upgraded
its
growth
forecast
for
2021
to
6.5%
from
its
prior
estimate
of
4.2%
in
December.
The
core
inflation
forecast
was
upgraded
to
2.2%
for
2021,
from
the
prior
estimate
of
1.8%.
However,
Fed
Chair
Jay
Powell
cautioned
that
a
full
recovery
was
still
distant
and
that
economic
conditions
continued
to
warrant
extraordinary
monetary
accommodation,
citing
the
uncertainty
related
to
the
course
of
the
pandemic.
In
June,
the
overall
policy
tone
shifted
in
a
hawkish
direction
as
the
Fed
raised
its
2021
growth
forecast
for
the
U.S.
economy
to
7.0%
and
increased
its
inflation
forecast
to
3.4%.
Powell
commented
that
“the
economy
has
clearly
made
progress,”
and
a
majority
of
Fed
officials
brought
forward
their
projected
expectations
for
rate
hikes.
The
Fed’s
dot
plot
survey
had
previously
indicated
expectations
for
no
hikes
until
2024
at
the
March
meeting.
In
June,
13
of
18
Fed
officials
indicated
expectations
for
a
rate
hike
by
the
end
of
2023,
with
11
indicating
expectations
for
two
hikes.
Powell
cautioned
that
the
dot
surveys
do
not
reflect
forward
guidance
from
the
committee
and
that
any
discussion
about
raising
rates
is
still
“highly
premature.”
Powell
also
indicated
in
June
that
discussions
of
when
to
begin
tapering
its
asset
purchase
program
had
begun,
but
that
the
timeline
is
yet
to
be
determined.
The
Fed
continued
Templeton
Emerging
Markets
Bond
Fund
5
franklintempleton.com
Semiannual
Report
to
purchase
“at
least
$80
billion
per
month”
in
USTs
and
“at
least
$40
billion
per
month
in
agency
mortgage-backed
securities”
during
the
reporting
period.
The
Fed’s
balance
sheet
reached
US$8.1
trillion
at
the
end
of
June.
Despite
higher
U.S.
inflation
figures
during
the
period,
Powell
continued
to
dispel
the
notion
that
higher
inflation
figures
in
2021
would
necessitate
near-term
rate
hikes,
reiterating
the
Fed’s
view
that
the
figures
largely
reflect
“transitory
factors”
that
would
not
affect
the
course
of
monetary
policy.
Core
personal
consumption
expenditures
(PCE)
inflation
surged
to
3.4%
year-over-year
in
May,
its
highest
level
since
1992,
up
from
3.1%
in
April
and
1.9%
in
March.
The
Fed
continued
to
indicate
it
will
let
inflation
run
above
2.0%
for
periods
of
time
to
counterbalance
prior
periods
of
prolonged
below-target
inflation,
implying
that
the
Fed
will
allow
the
U.S.
economy
to
run
hot
in
upcoming
years.
However,
Powell
directly
addressed
Fed
credibility
concerns,
stating
that
“if
we
see
inflation
moving
materially
above
2%
in
a
persistent
way
that
risks
inflation
expectations
drifting
up,
then
we
will
use
our
tools
to
guide
inflation
expectations
back
down.”
As
of
the
June
meeting,
the
Fed
projected
core
PCE
will
be
3.0%
in
2021,
and
2.1%
in
2022
and
2023.
The
BOJ
kept
monetary
policy
unchanged
at
each
of
its
policy
meetings
during
the
period,
leaving
the
overnight
interest
rate
at
-0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
at
0.0%.
The
BOJ
published
the
results
of
its
monetary
framework
review
in
March,
the
first
of
its
kind
since
2016.
The
findings
indicated
a
shift
of
emphasis
from
aggressive
stimulus
towards
more
“sustainable”
policy.
The
BOJ
said
it
plans
to
intervene
as
needed
during
events
that
require
financial
market
support,
but
will
shift
away
from
continuous
balance
sheet
expansion
solely
to
stimulate
economic
activity.
Japan
continued
to
struggle
against
deflationary
pressures
that
have
persisted
since
April
2020.
Core
inflation
(National
CPI
ex-fresh
food)
rose
to
0.1%
year-over-year
in
May,
from
-0.1%
in
April
and
March,
-0.4%
in
February
and
-0.6%
in
January.
Investment
Strategy
We
invest
selectively
in
bonds
from
emerging
markets
around
the
world
to
seek
to
generate
income
for
the
Fund,
pursuing
opportunities
while
monitoring
changes
in
interest
rates,
currency
exchange
rates
and
credit
risks.
We
manage
the
Fund’s
exposure
to
and
regularly
use
currency
and
contracts
and
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
We
may
also
use
other
derivative
instruments,
such
as
interest
rate/bond
futures
contracts
and
swap
agreements.
Manager’s
Discussion
The
successful
development
of
vaccines
against
COVID-19
in
the
final
months
of
2020
substantially
changed
our
outlook
and
positioning
for
2021.
In
the
weeks
before
the
six-month
reporting
period
began,
we
significantly
shifted
the
emphasis
of
the
Fund’s
strategic
positioning
from
a
risk-reduced
stance
toward
an
increasing
allocation
in
risk
assets.
We
expected
a
rebound
in
global
economic
activity
and
improving
economic
conditions
in
the
spring
and
summer
months
of
2021
as
vaccines
were
progressively
distributed
and
people
increasingly
reengaged
with
the
world.
We
were
actively
constructive
in
a
number
of
regions
throughout
the
period,
with
a
particular
focus
on
areas
of
Asia
that
have
robust
growth
drivers
and
strong
trade
dynamics,
as
well
as
areas
of
Latin
America
that
are
poised
to
benefit
from
surging
demand
for
commodities.
However,
it
remains
crucial
to
be
highly
selective
as
there
is
wide
variance
in
not
only
how
well
countries
are
containing
COVID-19
and
distributing
vaccines,
but
also
how
well
countries
have
handled
fiscal
and
monetary
policy
and
supported
their
economies.
The
Fund
was
focused
on
two
core
areas
of
value
for
the
upcoming
year:
(1)
weakness
in
the
USD
on
excessive
fiscal
and
monetary
policies,
against
currencies
in
countries
with
strong
trade
dynamics,
current
account
surpluses,
better
fiscal
management
and
stronger
growth
potential,
notably
in
Asia;
and
(2)
attractive
risk-
adjusted
yields
in
a
select
set
of
resilient
emerging
markets.
At
the
beginning
of
the
period,
the
Fund
held
overweighted
positions
in
specific
currencies
that
showed
medium-term
value
against
the
USD.
We
held
notable
exposures
to
the
Chinese
yuan,
the
South
Korean
won,
the
Indian
rupee,
the
Indonesian
rupiah,
the
Japanese
yen,
the
Chilean
peso
and
the
Colombian
peso
against
the
USD.
We
also
held
a
net-negative
position
in
the
Australian
dollar
to
partially
hedge
emerging
market
beta
risks.
During
the
period,
we
significantly
increased
our
exposures
to
the
Chinese
yuan
and
the
Indonesian
rupiah,
and
we
reduced
our
exposure
to
the
South
Korean
won.
We
closed
our
exposure
in
the
Japanese
yen
and
reduced
our
net-negative
position
in
the
Australian
dollar
to
increase
the
risk
profile
of
the
Fund.
We
Geographic
Composition
6/30/21
%
of
Total
Net
Assets
Americas
34.5%
Asia
Pacific
32.1%
Middle
East
&
Africa
8.6%
Other
Europe
1.7%
Short-Term
Investments
&
Other
Net
Assets
23.1%
Templeton
Emerging
Markets
Bond
Fund
6
franklintempleton.com
Semiannual
Report
also
significantly
increased
our
exposures
to
the
Chilean
peso
and
the
Colombian
peso,
and
moderately
increased
our
exposure
to
the
Egyptian
pound.
We
added
new
exposure
to
the
Peruvian
sol,
and
we
unhedged
our
local-
currency
positions
in
Brazil
to
gain
exposure
to
the
Brazilian
real.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
We
also
continued
to
focus
on
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets,
specifically
in
countries
with
resilient
economies
and
strong
trade
dynamics.
We
continued
to
prefer
the
higher
yields
available
in
a
select
set
of
emerging
markets,
notably
including
Indonesia,
India,
Colombia,
Brazil
and
Ghana,
among
others.
We
also
saw
pockets
of
value
in
certain
USD-
denominated
sovereign
credits.
We
added
to
our
existing
USD-denominated
positions
in
Ecuador
and
Ethiopia,
and
we
added
new
USD-denominated
sovereign
credit
positions
in
Egypt
and
Sri
Lanka.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
and
overall
credit
exposures
contributed
to
absolute
results.
Among
currencies,
positions
in
Latin
America
detracted
from
absolute
performance
(the
Argentine
peso,
Colombian
peso
and
Chilean
peso
detracted,
while
the
Brazilian
real
contributed).
Currency
positions
in
Asia
ex-Japan
(the
Indonesian
rupiah)
also
detracted
from
absolute
results,
as
did
the
Fund’s
net-positive
position
in
the
Japanese
yen
during
part
of
the
period.
The
Fund
maintained
low
overall
portfolio
duration
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Argentina)
and
Africa
(Ghana)
and
Asia
ex-Japan
(Indonesia)
contributed
to
absolute
performance.
Among
credit
exposures,
positions
in
Latin
America
contributed
to
absolute
return.
Thank
you
for
your
participation
in
Templeton
Emerging
Markets
Bond
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2021,
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.
Performance
Summary
as
of
June
30,
2021
Templeton
Emerging
Markets
Bond
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
6/30/21
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
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
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
-0.66%
-4.37%
1-Year
-0.35%
-4.12%
5-Year
+4.91%
+0.20%
Since
Inception
(4/1/13)
+3.65%
-0.03%
Advisor
6-Month
-0.55%
-0.55%
1-Year
-0.16%
-0.16%
5-Year
+6.16%
+1.20%
Since
Inception
(4/1/13)
+5.68%
+0.67%
See
page
8
for
Performance
Summary
footnotes.
Templeton
Emerging
Markets
Bond
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.
Foreign
securities
involve
special
risks,
including
currency
rate
fluctuations
(which
may
be
significant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
emerging
markets
involve
heightened
risks
related
to
the
same
factors,
in
addition
to
those
associated
with
their
relatively
small
size
and
lesser
liquidity.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
re-
lating
to
debt
securities
and
foreign
securities
generally,
including,
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio
that
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
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.
Bonds
are
subject
to
liquidity
risk,
which
may
have
an
adverse
impact
on
the
security’s
value
or
a
fund’s
ability
to
sell
such
securities.
Changes
in
interest
rates
will
affect
the
value
of
the
Fund’s
portfolio,
share
price
and
yield.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
Investments
in
lower
rated
securities
include
higher
risks
of
default
and
loss
of
principal.
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.
1.
The
Fund
has
an
expense
reduction
and
a
fee
waiver
associated
with
any
investments
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
4/30/22.
Fund
investment
results
reflect
the
expense
reduction
and
fee
waiver;
without
these
reductions,
the
results
would
have
been
lower.
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
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
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
3.75%.
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
Consolidated
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
(1/1/21–6/30/21)
Share
Class
Net
Investment
Income
A
$0.2760
C
$0.2615
R
$0.2751
R6
$0.2873
Advisor
$0.2833
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.19%
2.09%
Advisor
0.94%
1.84%
Your
Fund’s
Expenses
Templeton
Emerging
Markets
Bond
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
1/1/21
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$993.40
$5.56
$1,019.22
$5.63
1.12%
C
$1,000
$991.10
$7.60
$1,017.16
$7.70
1.54%
R
$1,000
$993.30
$5.63
$1,019.15
$5.70
1.14%
R6
$1,000
$995.10
$3.82
$1,020.97
$3.87
0.77%
Advisor
$1,000
$994.50
$4.40
$1,020.38
$4.46
0.89%
Templeton
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$6.70
$7.73
$8.13
$9.16
$8.84
$8.75
$8.33
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.26
0.48
0.62
0.68
0.70
0.21
0.55
Net
realized
and
unrealized
gains
(losses)
(0.30)
(1.00)
(0.51)
(0.99)
0.20
0.04
0.06
Total
from
investment
operations
.............
(0.04)
(0.52)
0.11
(0.31)
0.90
0.25
0.61
Less
distributions
from:
Net
investment
income
..
(0.28)
(0.01)
(0.51)
(0.52)
(0.57)
(0.16)
(0.19)
Net
realized
gains
.....
—
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
....
—
(0.50)
—
(0.19)
—
—
—
Total
distributions
.......
(0.28)
(0.51)
(0.51)
(0.72)
(0.58)
(0.16)
(0.19)
Net
asset
value,
end
of
period
................
$6.38
$6.70
$7.73
$8.13
$9.16
$8.84
$8.75
Total
return
d
...........
(0.66)%
(6.80)%
1.33%
(3.30)%
10.21%
2.89%
7.47%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
....
2.38%
2.10%
2.16%
2.15%
2.46%
3.22%
2.45%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.12%
1.07%
1.13%
1.14%
1.22%
1.11%
1.15%
Net
investment
income
...
7.89%
6.84%
7.75%
8.03%
7.51%
7.16%
6.56%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$16,616
$16,004
$21,984
$20,728
$19,042
$14,214
$13,643
Portfolio
turnover
rate
....
31.55%
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$6.69
$7.72
$8.12
$9.15
$8.84
$8.73
$8.31
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.24
0.44
0.59
0.65
0.67
0.20
0.51
Net
realized
and
unrealized
gains
(losses)
(0.30)
(0.99)
(0.52)
(1.00)
0.19
0.03
0.07
Total
from
investment
operations
.............
(0.06)
(0.55)
0.07
(0.35)
0.86
0.23
0.58
Less
distributions
from:
Net
investment
income
..
(0.26)
(0.01)
(0.47)
(0.49)
(0.54)
(0.12)
(0.16)
Net
realized
gains
.....
—
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
....
—
(0.47)
—
(0.18)
—
—
—
Total
distributions
.......
(0.26)
(0.48)
(0.47)
(0.68)
(0.55)
(0.12)
(0.16)
Net
asset
value,
end
of
period
................
$6.37
$6.69
$7.72
$8.12
$9.15
$8.84
$8.73
Total
return
d
...........
(0.89)%
(7.22)%
0.89%
(3.69)%
9.75%
2.67%
6.98%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
....
2.80%
2.54%
2.56%
2.54%
2.89%
3.74%
2.94%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.54%
1.51%
1.53%
1.53%
1.65%
1.63%
1.64%
Net
investment
income
...
7.46%
6.33%
7.35%
7.64%
7.08%
6.64%
6.07%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$1,618
$1,821
$2,276
$2,799
$2,553
$548
$464
Portfolio
turnover
rate
....
31.55%
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$6.71
$7.73
$8.14
$9.17
$8.85
$8.71
$8.30
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.26
0.47
0.62
0.68
0.70
0.21
0.51
Net
realized
and
unrealized
gains
(losses)
(0.30)
(0.98)
(0.52)
(1.00)
0.20
0.05
0.07
Total
from
investment
operations
.............
(0.04)
(0.51)
0.10
(0.32)
0.90
0.26
0.58
Less
distributions
from:
Net
investment
income
..
(0.28)
(0.01)
(0.51)
(0.51)
(0.57)
(0.12)
(0.17)
Net
realized
gains
.....
—
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
....
—
(0.50)
—
(0.19)
—
—
—
Total
distributions
.......
(0.28)
(0.51)
(0.51)
(0.71)
(0.58)
(0.12)
(0.17)
Net
asset
value,
end
of
period
................
$6.39
$6.71
$7.73
$8.14
$9.17
$8.85
$8.71
Total
return
d
...........
(0.67)%
(6.81)%
1.32%
(3.40)%
10.13%
2.96%
7.15%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
....
2.40%
2.13%
2.18%
2.18%
2.50%
3.12%
2.77%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.14%
1.10%
1.15%
1.22%
1.26%
1.01%
1.47%
Net
investment
income
...
7.87%
6.67%
7.73%
7.95%
7.47%
7.26%
6.24%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$12
$12
$13
$12
$14
$10
$9
Portfolio
turnover
rate
....
31.55%
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$6.71
$7.74
$8.14
$9.17
$8.85
$8.77
$8.34
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.27
0.52
0.66
0.74
0.74
0.22
0.57
Net
realized
and
unrealized
gains
(losses)
(0.30)
(1.02)
(0.52)
(1.02)
0.19
0.04
0.06
Total
from
investment
operations
.............
(0.03)
(0.50)
0.14
(0.28)
0.93
0.26
0.63
Less
distributions
from:
Net
investment
income
..
(0.29)
(0.01)
(0.54)
(0.54)
(0.60)
(0.18)
(0.20)
Net
realized
gains
.....
—
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
....
—
(0.52)
—
(0.20)
—
—
—
Total
distributions
.......
(0.29)
(0.53)
(0.54)
(0.75)
(0.61)
(0.18)
(0.20)
Net
asset
value,
end
of
period
................
$6.39
$6.71
$7.74
$8.14
$9.17
$8.85
$8.77
Total
return
d
...........
(0.49)%
(6.47)%
1.69%
(2.95)%
10.50%
2.90%
7.84%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
....
2.24%
2.04%
1.94%
1.91%
2.87%
5.59%
6.58%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.77%
0.75%
0.75%
0.78%
0.92%
0.91%
0.93%
Net
investment
income
...
8.27%
7.37%
8.13%
8.39%
7.81%
7.36%
6.77%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$1,536
$598
$1,057
$831
$281
$4
$4
Portfolio
turnover
rate
....
31.55%
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$6.73
$7.75
$8.16
$9.19
$8.86
$8.78
$8.35
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.26
0.51
0.63
0.76
0.74
0.21
0.55
Net
realized
and
unrealized
gains
(losses)
(0.30)
(1.01)
(0.51)
(1.05)
0.19
0.04
0.07
Total
from
investment
operations
.............
(0.04)
(0.50)
0.12
(0.29)
0.93
0.25
0.62
Less
distributions
from:
Net
investment
income
..
(0.28)
(0.01)
(0.53)
(0.53)
(0.59)
(0.17)
(0.19)
Net
realized
gains
.....
—
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
....
—
(0.51)
—
(0.20)
—
—
—
Total
distributions
.......
(0.28)
(0.52)
(0.53)
(0.74)
(0.60)
(0.17)
(0.19)
Net
asset
value,
end
of
period
................
$6.41
$6.73
$7.75
$8.16
$9.19
$8.86
$8.78
Total
return
d
...........
(0.55)%
(6.46)%
1.45%
(3.01)%
10.53%
2.90%
7.65%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
....
2.15%
1.91%
1.91%
1.89%
2.24%
3.09%
2.30%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.89%
0.86%
0.88%
0.88%
1.00%
0.98%
1.00%
Net
investment
income
...
8.11%
7.20%
8.00%
8.29%
7.73%
7.29%
6.71%
Supplemental
data
Net
ass
ets,
end
of
period
(000’s)
...............
$3,441
$3,950
$14,504
$10,797
$1,585
$312
$353
Portfolio
turnover
rate
....
31.55%
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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
Income
Trust
Statement
of
Investments
(unaudited),
June
30,
2021
Templeton
Emerging
Markets
Bond
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
0.0%
South
Africa
0.0%
a,b,c
K2016470219
South
Africa
Ltd.,
A
....
Multiline
Retail
2,171,539
$
—
a,b,c
K2016470219
South
Africa
Ltd.,
B
....
Multiline
Retail
619,903
—
—
Total
Common
Stocks
(Cost
$14,998)
..........................................
—
Principal
Amount
*
a
a
a
a
a
Corporate
Bonds
2.2%
Costa
Rica
2.2%
a,c
Reventazon
Finance
Trust,
Senior
Secured
Bond,
144A,
8%,
11/15/33
.
Diversified
Financial
Services
514,620
517,262
South
Africa
0.0%
a,d,e
K2016470219
South
Africa
Ltd.
,
Senior
Secured
Note,
144A,
PIK,
3%,
12/31/22
.....................
Multiline
Retail
182,668
—
Senior
Secured
Note,
144A,
PIK,
8%,
12/31/22
.....................
Multiline
Retail
51,234
EUR
—
a,d,e
K2016470260
South
Africa
Ltd.,
Senior
Secured
Note,
144A,
PIK,
25%,
12/31/22
.....................
Multiline
Retail
187,894
—
—
Total
Corporate
Bonds
(Cost
$815,723)
........................................
517,262
a
a
Industry
Principal
Amount
*
a
Value
Foreign
Government
and
Agency
Securities
74.7%
Argentina
6.6%
f,g
Argentina
BONCER
,
Index
Linked,
1%,
8/05/21
........
5,383,988
ARS
32,134
Index
Linked,
1.2%,
3/18/22
.......
121,967,538
ARS
723,810
Index
Linked,
1.3%,
9/20/22
.......
196,793
ARS
1,153
Index
Linked,
1.4%,
3/25/23
.......
90,879,498
ARS
518,877
Index
Linked,
1.5%,
3/25/24
.......
38,065,221
ARS
206,357
g
Argentina
Government
Bond,
16%,
10/17/23
.....................
11,171,500
ARS
40,630
1,522,961
Brazil
1.4%
Brazil
Notas
do
Tesouro
Nacional
,
10%,
1/01/25
..................
590,000
BRL
125,685
10%,
1/01/27
..................
270,000
BRL
57,838
10%,
1/01/29
..................
280,000
BRL
60,172
10%,
1/01/31
..................
430,000
BRL
91,726
335,421
Chile
8.5%
Chile
Bonos
Tesoreria
Pesos
,
e
144A,
Reg
S,
4%,
3/01/23
........
1,090,000,000
CLP
1,529,861
2.5%,
3/01/25
.................
335,000,000
CLP
445,646
1,975,507
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
China
3.9%
China
Government
Bond,
2.64%,
8/13/22
......................
5,900,000
CNY
$
912,431
Colombia
8.1%
Colombia
Government
Bond,
Senior
Bond,
9.85%,
6/28/27
............
13,000,000
COP
4,141
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
178,900,000
COP
49,276
B,
10%,
7/24/24
................
3,202,000,000
COP
973,223
B,
7.5%,
8/26/26
...............
1,249,800,000
COP
352,996
B,
6%,
4/28/28
.................
428,400,000
COP
109,740
B,
7.75%,
9/18/30
..............
1,267,800,000
COP
352,602
B,
7%,
6/30/32
.................
107,000,000
COP
27,836
1,869,814
Ecuador
5.5%
e
Ecuador
Government
Bond
,
Senior
Note,
144A,
0.5%,
7/31/30
..
146,000
125,561
Senior
Bond,
144A,
0.5%,
7/31/35
..
1,199,500
827,655
Senior
Bond,
144A,
0.5%,
7/31/40
..
534,000
333,083
1,286,299
Egypt
1.9%
e
Egypt
Government
Bond,
Senior
Note,
144A,
5.25%,
10/06/25
...........
420,000
443,793
Ethiopia
1.6%
e
Ethiopia
Government
Bond,
Senior
Note
,
144A,
6.625%,
12/11/24
.........
400,000
371,000
Ghana
4.1%
Ghana
Government
Bond
,
24.75%,
7/19/21
................
540,000
GHS
92,291
19.5%,
10/18/21
................
885,000
GHS
152,344
18.75%,
1/24/22
................
320,000
GHS
55,415
18.25%,
7/25/22
................
247,000
GHS
42,960
17.6%,
11/28/22
................
150,000
GHS
26,008
16.5%,
2/06/23
................
340,000
GHS
58,164
Senior
Note,
17.6%,
2/20/23
......
1,270,000
GHS
220,512
18.85%,
9/28/23
................
703,000
GHS
125,455
19.25%,
11/27/23
...............
260,000
GHS
46,721
19.25%,
12/18/23
...............
193,000
GHS
34,686
Senior
Note,
17.7%,
3/18/24
......
170,000
GHS
29,546
19.75%,
3/25/24
................
270,000
GHS
48,904
Senior
Note,
18.3%,
3/02/26
......
100,000
GHS
17,234
950,240
India
4.4%
India
Government
Bond
,
7.26%,
1/14/29
................
38,400,000
INR
543,327
Senior
Note
,
5.77%,
8/03/30
......
37,000,000
INR
480,836
1,024,163
Indonesia
11.7%
Indonesia
Government
Bond
,
FR61,
7%,
5/15/22
..............
16,436,000,000
IDR
1,169,076
FR63,
5.625%,
5/15/23
..........
308,000,000
IDR
21,758
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Indonesia
(continued)
Indonesia
Government
Bond,
(continued)
FR70,
8.375%,
3/15/24
..........
174,000,000
IDR
$
13,125
FR81,
6.5%,
6/15/25
............
13,129,000,000
IDR
951,499
FR86,
5.5%,
4/15/26
............
8,020,000,000
IDR
555,814
2,711,272
Peru
2.2%
Peru
Bonos
de
la
Tesoreria
,
5.2%,
9/12/23
......................
1,800,000
PEN
511,643
Senegal
1.0%
e
Senegal
Government
Bond,
Senior
Note
,
144A,
6.25%,
7/30/24
...........
200,000
222,703
South
Korea
4.2%
Korea
Monetary
Stabilization
Bond,
Senior
Note
,
0.905%,
4/02/23
.....
560,000,000
KRW
492,358
Korea
Treasury
Bond
,
0.875%,
12/10/23
...............
446,000,000
KRW
389,933
1.875%,
6/10/26
................
96,500,000
KRW
85,779
968,070
Sri
Lanka
3.8%
e
Sri
Lanka
Government
Bond
,
Senior
Bond,
144A,
6.85%,
11/03/25
200,000
134,500
Senior
Bond,
144A,
6.2%,
5/11/27
..
800,000
495,848
Senior
Bond,
144A,
6.75%,
4/18/28
.
200,000
125,854
Senior
Bond,
144A,
7.85%,
3/14/29
.
200,000
128,000
884,202
Thailand
4.1%
Bank
of
Thailand
,
1.43%,
8/26/21
................
810,000
THB
25,319
Senior
Note,
1.32%,
11/25/21
......
2,660,000
THB
83,300
0.9%,
2/24/22
.................
25,068,000
THB
784,615
Thailand
Government
Bond,
Senior
Bond,
3.65%,
12/17/21
...........
1,760,000
THB
55,777
949,011
Turkey
1.7%
Turkey
Government
Bond
,
13.9%,
11/09/22
................
1,770,000
TRY
194,951
12.2%,
1/18/23
................
120,000
TRY
12,831
7.1%,
3/08/23
.................
510,000
TRY
49,978
16.2%,
6/14/23
................
630,000
TRY
70,819
8.8%,
9/27/23
.................
330,000
TRY
31,920
10.4%,
3/20/24
................
30,000
TRY
2,946
12.6%,
10/01/25
................
300,000
TRY
29,475
392,920
Total
Foreign
Government
and
Agency
Securities
(Cost
$17,890,195)
..............
17,331,450
Total
Long
Term
Investments
(Cost
$18,720,916)
................................
17,848,712
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Short
Term
Investments
20.7%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
7.3%
Argentina
0.4%
f,g,h
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
Index
Linked,
9/13/21
............
8,937,747
ARS
$
52,926
Index
Linked,
2/28/22
............
8,260,161
ARS
48,420
101,346
Brazil
3.3%
h
Brazil
Letras
do
Tesouro
Nacional
,
1/01/24
......................
1,070,000
BRL
177,747
7/01/24
......................
3,690,000
BRL
587,350
765,097
Egypt
3.6%
h
Egypt
Treasury
Bills
,
7/13/21
......................
1,300,000
EGP
82,812
8/10/21
......................
500,000
EGP
31,584
9/07/21
......................
1,000,000
EGP
62,502
11/23/21
.....................
4,800,000
EGP
291,369
12/07/21
.....................
300,000
EGP
18,121
12/14/21
.....................
700,000
EGP
42,155
12/21/21
.....................
3,200,000
EGP
192,323
1/11/22
......................
400,000
EGP
23,914
2/15/22
......................
800,000
EGP
47,202
3/01/22
......................
400,000
EGP
23,478
3/22/22
......................
500,000
EGP
29,166
844,626
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,661,809)
...............
1,711,069
Industry
Shares
Money
Market
Funds
13.4%
United
States
13.4%
i,j
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
..........
3,107,000
3,107,000
Total
Money
Market
Funds
(Cost
$3,107,000)
...................................
3,107,000
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$4,768,809
)
.................................
4,818,069
a
a
a
a
Total
Investments
(Cost
$23,489,725)
97.6%
....................................
$22,666,781
Other
Assets,
less
Liabilities
2.4%
.............................................
556,311
Net
Assets
100.0%
...........................................................
$23,223,092
a
a
a
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Fair
valued
using
significant
unobservable
inputs.
See
Note
12
regarding
fair
value
measurements.
b
Non-income
producing.
c
See
Note
9
regarding
restricted
securities.
d
Income
may
be
received
in
additional
securities
and/or
cash.
e
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
June
30,
2021,
the
aggregate
value
of
these
securities
was
$4,737,858,
representing
20.4%
of
net
assets.
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
At
June
30,
2021,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c)
. 
f
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
g
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
12
regarding
fair
value
measurements.
h
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
i
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
j
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Chilean
Peso
......
JPHQ
Buy
2,580,000
3,551
7/01/21
$
—
$
(38)
Chilean
Peso
......
JPHQ
Sell
2,580,000
3,479
7/01/21
—
(34)
Chilean
Peso
......
GSCO
Buy
3,160,000
4,359
7/02/21
—
(56)
Chilean
Peso
......
GSCO
Sell
3,160,000
4,293
7/02/21
—
(9)
Chilean
Peso
......
JPHQ
Buy
5,080,000
7,004
7/02/21
—
(87)
Chilean
Peso
......
JPHQ
Sell
5,080,000
6,851
7/02/21
—
(67)
Chilean
Peso
......
JPHQ
Buy
8,870,000
12,349
7/06/21
—
(272)
Chilean
Peso
......
JPHQ
Sell
8,870,000
12,043
7/06/21
—
(33)
Mexican
Peso
......
CITI
Buy
4,005,000
193,122
7/08/21
7,626
—
Mexican
Peso
......
CITI
Sell
4,005,000
187,227
7/08/21
—
(13,522)
Indian
Rupee
......
HSBK
Buy
12,826,900
171,174
7/12/21
1,109
—
Australian
Dollar
....
JPHQ
Sell
79,166
6,023,433
JPY
7/13/21
—
(5,133)
Japanese
Yen
......
JPHQ
Sell
6,305,142
79,166
AUD
7/13/21
2,597
—
Chinese
Yuan
......
CITI
Buy
1,612,760
247,136
7/14/21
1,990
—
Chilean
Peso
......
GSCO
Buy
158,650,000
219,697
7/15/21
—
(3,741)
Indian
Rupee
......
HSBK
Buy
9,986,332
131,711
7/15/21
2,372
—
Indian
Rupee
......
HSBK
Buy
9,986,333
134,717
7/19/21
—
(698)
Brazilian
Real
......
MSCO
Buy
3,700,000
698,205
8/03/21
42,798
—
Chilean
Peso
......
GSCO
Buy
117,142,037
165,639
8/06/21
—
(6,278)
Chilean
Peso
......
GSCO
Buy
3,160,000
4,291
8/09/21
7
—
Australian
Dollar
....
MSCO
Sell
322,000
250,732
8/16/21
9,247
—
Chilean
Peso
......
GSCO
Buy
137,072,267
194,115
8/16/21
—
(7,691)
Chilean
Peso
......
GSCO
Buy
131,212,121
185,469
8/17/21
—
(7,020)
Columbian
Peso
....
MSCO
Buy
807,000,000
220,236
8/20/21
—
(5,905)
Japanese
Yen
......
CITI
Buy
24,780,000
235,204
8/24/21
—
(12,031)
Japanese
Yen
......
CITI
Sell
24,780,000
227,689
8/24/21
4,517
—
Mexican
Peso
......
JPHQ
Buy
12,490,000
596,281
8/31/21
25,423
—
Mexican
Peso
......
JPHQ
Sell
12,490,000
589,137
8/31/21
—
(32,567)
Chilean
Peso
......
GSCO
Buy
113,871,936
156,907
9/01/21
—
(2,103)
Indian
Rupee
......
JPHQ
Buy
10,942,000
145,469
9/07/21
476
—
Indian
Rupee
......
CITI
Buy
10,631,000
141,379
9/08/21
399
—
Indian
Rupee
......
JPHQ
Buy
14,153,500
189,390
9/08/21
—
(636)
Russian
Ruble
.....
JPHQ
Buy
3,991,800
52,529
9/08/21
1,479
—
Russian
Ruble
.....
MSCO
Buy
25,819,800
339,774
9/08/21
9,562
—
Indian
Rupee
......
CITI
Buy
12,814,700
172,903
9/09/21
—
(2,026)
Russian
Ruble
.....
JPHQ
Buy
5,601,000
74,424
9/09/21
1,344
—
Chinese
Yuan
......
BOFA
Buy
1,637,910
254,997
9/10/21
—
(3,048)
Chinese
Yuan
......
CITI
Buy
2,531,870
394,135
9/10/21
—
(4,673)
Chinese
Yuan
......
BOFA
Buy
1,963,760
305,264
9/13/21
—
(3,258)
Indian
Rupee
......
HSBK
Buy
12,862,690
174,192
9/13/21
—
(2,763)
Russian
Ruble
.....
DBAB
Buy
12,603,700
167,295
9/13/21
3,086
—
Russian
Ruble
.....
DBAB
Buy
8,077,100
107,320
9/14/21
1,850
—
Chilean
Peso
......
GSCO
Buy
323,098,262
445,156
9/15/21
—
(6,111)
Indian
Rupee
......
CITI
Buy
13,448,283
182,675
9/15/21
—
(3,488)
Indian
Rupee
......
HSBK
Buy
7,037,585
95,464
9/15/21
—
(1,694)
Chilean
Peso
......
JPHQ
Buy
10,260,000
13,823
9/24/21
115
—
Australian
Dollar
....
CITI
Sell
741,205
562,445
9/28/21
6,479
—
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
At
June
30,
2021,
the
Fund
had
the
following
interest
rate
swap
contracts
outstanding.
See
Note
1(c). 
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
Chilean
Peso
......
GSCO
Buy
2,650,000
3,612
9/29/21
$
—
$
(13)
Chilean
Peso
......
JPHQ
Buy
8,870,000
12,027
10/04/21
18
—
Chinese
Yuan
......
HSBK
Buy
4,746,240
724,078
10/15/21
5,228
(1,037)
Indian
Rupee
......
CITI
Buy
7,952,700
104,407
11/10/21
815
—
Columbian
Peso
....
MSCO
Buy
3,319,000,000
888,867
11/18/21
—
(12,664)
Chinese
Yuan
......
JPHQ
Buy
1,213,270
185,974
11/22/21
—
(283)
Russian
Ruble
.....
JPHQ
Buy
3,028,400
40,237
12/06/21
54
—
Russian
Ruble
.....
MSCO
Buy
41,698,100
554,607
12/06/21
155
—
Russian
Ruble
.....
JPHQ
Buy
5,600,900
74,689
12/07/21
—
(188)
Chinese
Yuan
......
JPHQ
Buy
971,650
150,289
12/10/21
—
(1,758)
Chinese
Yuan
......
JPHQ
Buy
2,430,050
375,730
12/13/21
—
(4,335)
Chinese
Yuan
......
HSBK
Buy
1,757,680
271,628
12/15/21
—
(3,031)
Russian
Ruble
.....
DBAB
Buy
12,061,300
158,950
12/15/21
1,233
—
Indian
Rupee
......
JPHQ
Buy
56,300,000
750,027
12/20/21
—
(8,820)
Chilean
Peso
......
GSCO
Buy
10,670,000
14,421
12/23/21
56
(29)
Egyptian
Pound
....
HSBK
Buy
1,450,000
88,183
12/27/21
—
(229)
Indian
Rupee
......
JPHQ
Buy
10,911,100
141,354
1/27/22
1,573
—
Russian
Ruble
.....
DBAB
Buy
8,000,300
106,331
3/11/22
—
(1,604)
Indian
Rupee
......
SCNY
Buy
39,600,000
516,499
3/22/22
—
(1,553)
Columbian
Peso
....
GSCO
Buy
370,000,000
100,489
6/13/22
—
(4,678)
Total
Forward
Exchange
Contracts
...................................................
$131,608
$(165,204)
Net
unrealized
appreciation
(depreciation)
............................................
$(33,596)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
Interest
Rate
Swap
Contracts
Description
Payment
Frequency
Counter-
party
Maturity
Date
Notional
Amount
*
Value
Unamortized
Upfront
Payments
(Receipts)
Unrealized
Appreciation
(Depreciation)
aa
aa
aa
aa
Centrally
Cleared
Swap
Contracts
Receive
Fixed
1.18%
..
Semi-Annual
Pay
Floating
1-day
Sinacofi
Chile
Interbank
Rate
Average
(CAMARA)
........
Semi-Annual
3/17/23
200,000
CLP
$
(5)
$
—
$
(5)
Receive
Fixed
1.36%
..
Semi-Annual
Pay
Floating
1-day
Sinacofi
Chile
Interbank
Rate
Average
(CAMARA)
........
Semi-Annual
3/29/23
200,000
CLP
(4)
—
(4)
Total
Interest
Rate
Swap
Contracts
...............................
$(9)
$
—
$(9)
*
In
U.S.
dollars
unless
otherwise
indicated.
See
Abbreviations
on
page
40
.
See
Note
10
regarding
other
derivative
information.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$20,382,725
Cost
-
Non-controlled
affiliates
(Note
3f)
........................................................
3,107,000
Value
-
Unaffiliated
issuers
..................................................................
$19,559,781
Value
-
Non-controlled
affiliates
(Note
3f)
........................................................
3,107,000
Restricted
currency,
at
value
(cost
$167)
(Note
1d)
..................................................
167
Foreign
currency,
at
value
(cost
$226,819)
........................................................
207,085
Receivables:
Capital
shares
sold
........................................................................
159,831
Interest
.................................................................................
340,029
Affiliates
................................................................................
64,071
Deposits
with
brokers
for:
Centrally
cleared
swap
contracts
............................................................
6
Variation
margin
on
centrally
cleared
swap
contracts
...............................................
3
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
131,608
Prepaid
expenses
..........................................................................
41,322
Total
assets
..........................................................................
23,610,903
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
95,062
Capital
shares
redeemed
...................................................................
32,554
Management
fees
.........................................................................
16,287
Distribution
fees
..........................................................................
4,331
Transfer
agent
fees
........................................................................
4,328
Reports
to
shareholders
....................................................................
29,633
Trustees'
fees
and
expenses
.................................................................
2,575
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
165,204
Deferred
tax
...............................................................................
7,036
Accrued
expenses
and
other
liabilities
...........................................................
30,801
Total
liabilities
.........................................................................
387,811
Net
assets,
at
value
.................................................................
$23,223,092
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$28,605,881
Total
distributable
earnings
(losses)
.............................................................
(5,382,789)
Net
assets,
at
value
.................................................................
$23,223,092
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Templeton
Emerging
Markets
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$16,616,011
Shares
outstanding
........................................................................
2,605,815
Net
asset
value
per
share
a
..................................................................
$6.38
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$6.63
Class
C:
Net
assets,
at
value
.......................................................................
$1,617,778
Shares
outstanding
........................................................................
254,021
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$6.37
Class
R:
Net
assets,
at
value
.......................................................................
$12,408
Shares
outstanding
........................................................................
1,944
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$6.39
Class
R6:
Net
assets,
at
value
.......................................................................
$1,535,804
Shares
outstanding
........................................................................
240,482
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$6.39
Advisor
Class:
Net
assets,
at
value
.......................................................................
$3,441,091
Shares
outstanding
........................................................................
537,165
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$6.41
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
23
Templeton
Emerging
Markets
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3f)
.............................................................
$83
Interest:
(net
of
foreign
taxes
of
$15,130)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
393,682
Paid
in
cash
a
...........................................................................
618,882
Total
investment
income
...................................................................
1,012,647
Expenses:
Management
fees
(Note
3a)
...................................................................
95,533
Distribution
fees:
(Note
3c)
    Class
A
................................................................................
18,898
    Class
C
................................................................................
5,579
    Class
R
................................................................................
16
Transfer
agent
fees:
(Note
3e)
    Class
A
................................................................................
12,037
    Class
C
................................................................................
1,285
    Class
R
................................................................................
9
    Class
R6
...............................................................................
1,221
    Advisor
Class
............................................................................
2,688
Custodian
fees
.............................................................................
3,942
Reports
to
shareholders
......................................................................
19,360
Registration
and
filing
fees
....................................................................
38,473
Professional
fees
...........................................................................
49,901
Trustees'
fees
and
expenses
..................................................................
4,463
Other
....................................................................................
13,213
Total
expenses
.........................................................................
266,618
Expenses
waived/paid
by
affiliates
(Note
3f
and
3g)
..............................................
(142,735)
Net
expenses
.........................................................................
123,883
Net
investment
income
................................................................
888,764
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
(690,070)
Written
options
...........................................................................
(101,303)
Foreign
currency
transactions
................................................................
3,983
Forward
exchange
contracts
.................................................................
(471,079)
Net
realized
gain
(loss)
..................................................................
(1,258,469)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(247,878)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(28,441)
Written
options
...........................................................................
83,349
Forward
exchange
contracts
.................................................................
389,986
Swap
contracts
...........................................................................
(9)
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
1,238
Net
change
in
unrealized
appreciation
(depreciation)
............................................
198,245
Net
realized
and
unrealized
gain
(loss)
............................................................
(1,060,224)
Net
increase
(decrease)
in
net
a
ssets
resulting
from
operations
..........................................
$(171,460)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
Templeton
Emerging
Markets
Bond
Fund
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$888,764
$1,909,367
Net
realized
gain
(loss)
.................................................
(1,258,469)
(9,770,016)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
198,245
5,628,744
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(171,460)
(2,231,905)
Distributions
to
shareholders:
Class
A
.............................................................
(696,065)
(26,203)
Class
C
.............................................................
(67,343)
(2,760)
Class
R
.............................................................
(522)
(18)
Class
R6
............................................................
(52,515)
(1,003)
Advisor
Class
........................................................
(152,854)
(10,061)
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(1,266,497)
Class
C
.............................................................
—
(133,396)
Class
R
.............................................................
—
(882)
Class
R6
............................................................
—
(48,460)
Advisor
Class
........................................................
—
(486,289)
Total
distributions
to
shareholders
..........................................
(969,299)
(1,975,569)
Capital
share
transactions:
(Note
2)
Class
A
.............................................................
1,434,300
(3,251,397)
Class
C
.............................................................
(119,899)
(154,051)
Class
R
.............................................................
536
968
Class
R6
............................................................
994,160
(349,326)
Advisor
Class
........................................................
(330,423)
(9,487,320)
Total
capital
share
transactions
............................................
1,978,674
(13,241,126)
Net
increase
(decrease)
in
net
assets
...................................
837,915
(17,448,600)
Net
assets:
Beginning
of
period
.....................................................
22,385,177
39,833,777
End
of
period
..........................................................
$23,223,092
$22,385,177
Templeton
Income
Trust
25
franklintempleton.com
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
Templeton
Emerging
Markets
Bond
Fund
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
Emerging
Markets
Bond
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
after
they
have
been
held
for
10
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. 
On
July
14,
2021,
the
Trust's
Board
of
Trustees
(the
Board)
approved
a
proposal
to
change
the
name
of
the
Fund
to
Templeton
Sustainable
Emerging
Markets
Bond
Fund,
effective
on
or
about
September
30,
2021.
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
Board,
the Fund's
administrator
has
responsibility
for
oversight
of
valuation,
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. 
Debt
securities
generally
trade
in
the OTC
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
are
centrally
cleared
or
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
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,
book
values,
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
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
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. 
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.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
or
initial
margin
requirements
are
set
by
the
broker
or
exchange
clearing
house
for
exchange
traded
and
centrally
cleared
derivatives.
Initial
margin
deposited
is
held
at
the
exchange
and
can
be
in
the
form
of
cash
and/or
securities.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of
the
agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund
for
OTC
derivatives,
if
any,
is
held
in
segregated
accounts
with
the
Fund's
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
The
Fund
entered
into
interest
rate
swap
contracts
primarily
to
manage
interest
rate
risk.
An
interest
rate
swap
is
an
agreement
between
the
Fund
and
a
counterparty
to
exchange
cash
flows
based
on
the
difference
between
two
interest
rates,
applied
to
a
notional
amount.
These
agreements
may
be
privately
negotiated
in
the
over-the-
counter
market
(OTC
interest
rate
swaps)
or
may
be
executed
on
a
registered
exchange
(centrally
cleared
interest
rate
swaps).
For
centrally
cleared
interest
rate
swaps,
required
initial
margins
are
pledged
by
the
Fund,
and
the
daily
change
in
fair
value
is
accounted
for
as
a
variation
margin
payable
or
receivable
in
the
Statement
of
Assets
and
Liabilities.
Over
the
term
of
the
contract,
contractually
required
payments
to
be
paid
and
to
be
received
are
accrued
daily
and
recorded
as
unrealized
depreciation
and
appreciation
until
the
payments
are
made,
at
which
time
they
are
realized.
The
Fund
purchased
or
wrote
OTC
option
contracts
primarily
to
manage
and/or
gain
exposure
to
foreign
exchange
rate
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.
See
Note
10 regarding
other
derivative
information.
d.
Restricted
Currency
At
June
30,
2021,
the
Fund
held
currencies
in
certain
markets
in
which
the
ability
to
repatriate
such
currency
is
limited.
As
a
result
of
such
limitations
on
repatriation,
the
Fund
may
incur
substantial
delays
in
gaining
access
to
these
assets
and
may
be
exposed
to
potential
adverse
movements
in
currency
value.
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
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.
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
June
30,
2021,
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
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
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.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
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.
1.
Organization
and
Significant
Accounting
Policies
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
29
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
June
30,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
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:
Six
Months
Ended
June
30,
2021
Year
Ended
December
31,
2020
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
468,270
$3,071,657
498,364
$3,493,684
Shares
issued
in
reinvestment
of
distributions
..........
72,163
465,895
120,598
838,933
Shares
redeemed
...............................
(322,278)
(2,103,252)
(1,077,053)
(7,584,014)
Net
increase
(decrease)
..........................
218,155
$1,434,300
(458,091)
$(3,251,397)
Class
C
Shares:
Shares
sold
...................................
17,549
$114,896
59,073
$421,140
Shares
issued
in
reinvestment
of
distributions
..........
10,291
66,414
19,355
134,492
Shares
redeemed
a
..............................
(45,866)
(301,209)
(101,273)
(709,683)
Net
increase
(decrease)
..........................
(18,026)
$(119,899)
(22,845)
$(154,051)
Class
R
Shares:
Shares
sold
...................................
45
$289
88
$610
Shares
issued
in
reinvestment
of
distributions
..........
38
247
57
393
Shares
redeemed
...............................
—
—
(5)
(35)
Net
increase
(decrease)
..........................
83
$536
140
$968
Class
R6
Shares:
Shares
sold
...................................
177,653
$1,162,881
50,785
$349,186
Shares
issued
in
reinvestment
of
distributions
..........
8,118
52,515
7,069
49,462
Shares
redeemed
...............................
(34,313)
(221,236)
(105,405)
(747,974)
Net
increase
(decrease)
..........................
151,458
$994,160
(47,551)
$(349,326)
Advisor
Class
Shares:
Shares
sold
...................................
105,537
$692,311
335,564
$2,375,582
Shares
issued
in
reinvestment
of
distributions
..........
22,979
149,005
64,721
453,263
Shares
redeemed
...............................
(178,022)
(1,171,739)
(1,684,325)
(12,316,165)
Net
increase
(decrease)
..........................
(49,506)
$(330,423)
(1,284,040)
$(9,487,320)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
30
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
average
daily
net
assets of
the
Fund
as
follows:
For
the
period
ended
June
30,
2021,
the
annualized
gross
effective
management
fee
rate
was
0.850%
of
the
Fund’s
average
daily
net
assets.
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
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:
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
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.
Annualized
Fee
Rate
Net
Assets
0.850%
Up
to
and
including
$500
million
0.800%
Over
$500
million,
up
to
and
including
$1
billion
0.750%
Over
$1
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$1,199
CDSC
retained
..............................................................................
$33
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
For
the
period
ended
June
30,
2021,
the
Fund
paid
transfer
agent
fees
of
$17,240,
of
which $10,915
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
June
30,
2021,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Advisers
and
Investor
Services
have
contractually
agreed
in
advance
to
waive
or
limit
their
respective
fees
and
to
assume
as
their
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)
for
each
class
of
the
Fund
do
not
exceed
0.89%
based
on
the
average
net
assets
of
each
class
until
April
30,
2022.
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
April
30,
2022. 
h.
Other
Affiliated
Transactions
At
June
30,
2021,
Advisers
owned
21.6%
of
the
Fund's
outstanding
shares.
    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
Emerging
Markets
Bond
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.......
$5,134,983
$6,650,787
$(8,678,770)
$—
$—
$3,107,000
3,107,000
$83
Total
Affiliated
Securities
....
$5,134,983
$6,650,787
$(8,678,770)
$—
$—
$3,107,000
$83
3.
Transactions
with
Affiliates
(continued)
e.
Transfer
Agent
Fees
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2020,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$657,513.
At
June
30,
2021,
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,
foreign
capital
gains
tax,
payments-in-kind,
bond
discounts
and
premiums,
tax
straddles,
inflation
related
adjustments
on
foreign
securities
and
wash
sales.
5.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2021,
aggregated
$8,381,265
and
$5,850,161,
respectively.
6.
Credit
Risk
At
June
30,
2021,
the
Fund
had
44.9%
of
its
portfolio
invested
in
high
yield
or
other
securities
rated
below
investment
grade
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
7.
Concentration
of
Risk
Investments
in
issuers
domiciled
or
with
significant
operations
in
developing
or
emerging
market
countries
may
be
subject
to
higher
risks
than
investments
in
developed
countries.
These
risks
include
fluctuating
currency
values,
underdeveloped
legal
or
business
systems,
and
changing
local
and
regional
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Currencies
of
developing
or
emerging
market
countries
may
be
subject
to
significantly
greater
risks
than
currencies
of
developed
countries,
including
the
potential
inability
to
repatriate
those
currencies
into
U.S.
dollars.
At
June
30,
2021,
the
Fund
had
7.0%
of
its
net
assets
denominated
in
Argentine
Pesos. Argentina
has
restricted
currency
repatriation
since
September
2019,
and
had
restructured
certain
issues
of
its
debt.
Political
and
economic
conditions
in
Argentina
could
continue
to
affect
the
value
of
the
Fund's
holdings.
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$669,959
Long
term
................................................................................
1,646,306
Total
capital
loss
carryforwards
...............................................................
$2,316,265
Cost
of
investments
..........................................................................
$23,726,338
Unrealized
appreciation
........................................................................
$1,272,010
Unrealized
depreciation
........................................................................
(2,365,175)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(1,093,165)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
33
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
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.
Restricted
Securities
The
Fund
invests
in
securities
that
are
restricted
under
the
Securities
Act
of
1933
(1933
Act).
Restricted
securities
are
often
purchased
in
private
placement
transactions,
and
cannot
be
sold
without
prior
registration
unless
the
sale
is
pursuant
to
an
exemption
under
the
1933
Act.
Disposal
of
these
securities
may
require
greater
effort
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult.
The Fund
may
have
registration
rights
for
restricted
securities.
The
issuer
generally
incurs
all
registration
costs.
At
June
30,
2021,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
10.
Other
Derivative
Information 
At
June
30
2021
,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
Principal
Amount
*
/
Shares
Issuer
Acquisition
Date
Cost
Value
Templeton
Emerging
Markets
Bond
Fund
2,171,539
a
K2016470219
South
Africa
Ltd.,
A
...............
5/16/13-2/01/17
$
14,538
$
—
619,903
a
K2016470219
South
Africa
Ltd.,
B
...............
2/01/17
460
—
514,620
Reventazon
Finance
Trust,
Senior
Secured
Bond,
144A,
8%,
11/15/33
.............
12/18/13
514,620
517,262
Total
Restricted
Securities
(Value
is
2.23%
of
Net
Assets)
.............
$529,618
$517,262
a
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$0
as
of
June
30,
2021.
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
Emerging
Markets
Bond
Fund
Interest
rate
contracts
.......
Variation
margin
on
centrally
cleared
swap
contracts
$
—
Variation
margin
on
centrally
cleared
swap
contracts
$
9
a
Foreign
exchange
contracts
..
Unrealized
appreciation
on
OTC
forward
exchange
contracts
13
1,608
Unrealized
depreciation
on
OTC
forward
exchange
contracts
16
5,204
Total
....................
$131,608
$165,213
a
This
amount
reflects
the
cumulative
appreciation
(depreciation)
of
centrally
cleared
swap
contracts
as
reported
in
the
Statement
of
Investments.
Only
the
variation
margin
receivable/payable
at
period
end
is
separately
reported
within
the
Statement
of
Assets
and
Liabilities.
Prior
variation
margin
movements
were
recorded
to
cash
upon
receipt
or
payment.
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
34
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
For
the
period
ended
June
30,
2021,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
June
30,
2021,
the
average
month
end
notional
amount
of
swap
contracts
and
options
represented
$316
and
$8,637,068,
respectively.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$21,988,850.
At
June
30,
2021,
OTC
derivative
assets
and
liabilities
are
as
follows:
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
Emerging
Markets
Bond
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Interest
rate
contracts
..........
Swap
contracts
$—
Swap
contracts
$(9)
Foreign
exchange
contracts
.....
Investments
(179,406)
a
Investments
134,558
a
Written
options
(101,303)
Written
options
83,349
Forward
exchange
contracts
(471,079)
Forward
exchange
contracts
389,986
Total
.......................
$(751,788)
$607,884
a
Purchased
option
contracts
are
included
in
net
realized
gain
(loss)
from
investments
and
net
change
in
unrealized
appreciation
(depreciation)
on
investments
in
the
Statement
of
Operations.
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
Emerging
Markets
Bond
Fund
Derivatives
Forward
exchange
contracts
.............................
$
13
1,608
$
16
5,204
Total
.............................................
$131,608
$165,204
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
10.
Other
Derivative
Information 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
35
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
At
June
30,
2021,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
At
June
30,
2021,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
40
.
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
Cash
Collateral
Received
Net
Amount
(Not
less
than
zero)
Templeton
Emerging
Markets
Bond
Fund
Counterparty
BOFA
....................
$—
$—
$—
$—
$—
CITI
.....................
21,826
(21,826)
—
—
—
DBAB
...................
6,169
(1,604)
—
—
4,565
GSCO
...................
63
(63)
—
—
—
HSBK
...................
8,709
(8,709)
—
—
—
JPHQ
...................
33,079
(33,079)
—
—
—
MSCO
...................
61,762
(18,569)
—
—
43,193
SCNY
...................
—
—
—
—
—
Total
...................
$131,608
$(83,850)
$
—
$—
$47,758
$
1
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
Cash
Collateral
Pledged
Net
Amount
(Not
less
than
zero)
Templeton
Emerging
Markets
Bond
Fund
Counterparty
BOFA
....................
$6,306
$—
$—
$—
$6,306
CITI
.....................
35,740
(21,826)
—
—
13,914
DBAB
...................
1,604
(1,604)
—
—
—
GSCO
...................
37,729
(63)
—
—
37,666
HSBK
...................
9,452
(8,709)
—
—
743
JPHQ
...................
54,251
(33,079)
—
—
21,172
MSCO
...................
18,569
(18,569)
—
—
—
SCNY
...................
1,553
—
—
—
1,553
Total
...................
$165,204
$(83,850)
$—
$—
$81,354
10.
Other
Derivative
Information 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
36
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
11.
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
4,
2022.
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
June
30,
2021,
the Fund
did
not
use
the
Global
Credit
Facility.
12.
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
June
30,
2021,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Common
Stocks
........................
$
—
$
—
$
—
a
$
—
Corporate
Bonds
........................
—
—
517,262
a
517,262
Foreign
Government
and
Agency
Securities
:
Argentina
............................
—
—
1,522,961
1,522,961
Brazil
...............................
—
335,421
—
335,421
Chile
................................
—
1,975,507
—
1,975,507
China
...............................
—
912,431
—
912,431
Colombia
............................
—
1,869,814
—
1,869,814
Ecuador
.............................
—
1,286,299
—
1,286,299
Egypt
...............................
—
443,793
—
443,793
Ethiopia
.............................
—
371,000
—
371,000
Ghana
..............................
—
950,240
—
950,240
India
................................
—
1,024,163
—
1,024,163
Indonesia
............................
—
2,711,272
—
2,711,272
Peru
................................
—
511,643
—
511,643
Senegal
.............................
—
222,703
—
222,703
South
Korea
..........................
—
968,070
—
968,070
Sri
Lanka
............................
—
884,202
—
884,202
Thailand
.............................
—
949,011
—
949,011
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
37
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
period.
At
June
30,
2021,
the
reconciliation
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Emerging
Markets
Bond
Fund
(continued)
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Turkey
..............................
$
—
$
392,920
$
—
$
392,920
Short
Term
Investments
...................
3,107,000
1,609,723
101,346
4,818,069
Total
Investments
in
Securities
...........
$3,107,000
$17,418,212
$2,141,569
$22,666,781
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
131,608
$
—
$
131,608
Restricted
Currency
(ARS)
.................
—
—
167
167
Swap
contracts
.........................
—
—
—
—
Total
Other
Financial
Instruments
.........
$—
$131,608
$167
$131,775
Receivables:
Interest
(ARS)
...........................
$—
$—
$9,936
$9,936
Liabilities:
Other
Financial
Instruments:
Forward
exchange
contracts
................
$—
$165,204
$—
$165,204
Swap
contracts
..........................
—
9
—
9
Total
Other
Financial
Instruments
.........
$—
$165,213
$—
$165,213
Payables:
Deferred
Tax(ARS)
.......................
$—
$—
$73
$73
a
Includes
securities
determined
to
have
no
value
at
June
30,
2021.
Balance
at
Beginning
of
Period
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(
Amortiza
-
tion
)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
South
Africa
...
$
—
c
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
c
$
—
Corporate
Bonds
:
Costa
Rica
....
507,166
—
(11,220)
—
—
—
—
21,316
517,262
20,918
South
Africa
...
791
c
68
—
—
—
721
—
(1,580)
—
c
(1,580)
Foreign
Government
and
Agency
Securities
:
Argentina
.....
1,671,576
537,732
(476,792)
—
—
106,053
(179,936)
(135,672)
1,522,961
(228,743)
Short
Term
Investments
...
168,276
78,827
(119,817)
—
—
2,053
(14,581)
(13,412)
101,346
(12,235)
Total
Investments
in
Securities
........
$2,347,809
$616,627
$(607,829)
$—
$—
$108,827
$(194,517)
$(129,348)
$2,141,569
$(221,640)
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
38
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
Balance
at
Beginning
of
Period
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(Amortiza-
tion)
Net
Realized
Gain
(Loss)
Net
Unrealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Emerging
Markets
Bond
Fund
(continued)
Assets:
(continued)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
.......
$641
$1,041,517
$(1,038,430)
$—
$—
$—
$(3,569)
$8
$167
$—
Receivables:
Interest
(ARS)
..
$9,213
$414,331
$(407,676)
$—
$—
$—
$(795)
$(5,137)
$9,936
$(139)
Liabilities:
Payables:
Investment
Securities
Purchased
(ARS)
$29,286
$—
$(29,532)
$—
$—
$—
$246
$—
$—
$—
Deferred
Tax
(ARS)
$86
$—
$—
$—
$—
$—
$—
$(13)
$73
$(13)
a
Purchases
include
all
purchases
of
securities
and
securities
received
in
corporate
actions.
b
Sales
include
all
sales
of
securities,
maturities,
paydowns
and
securities
tendered
in
corporate
actions.
c
Includes
securities
determined
to
have
no
value.
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
39
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
Significant
unobservable
valuation
inputs
for
material
Level
3 assets
and/or
liabilities and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
June
30,
2021,
are
as
follows:
13.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
and
2023. The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements. 
14.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the
financial
statements
and
determined
that
in
addition
to
those
events
previously
disclosed,
the
following
subsequent
event
requires
disclosure:
Description
Fair
Value
at
End
of
Period
Valuation
Technique
Unobservable
Inputs
Amount/Range
(Weighted
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Corporate
Bonds:
Costa
Rica
..........
$517,262
Discounted
cash
flow
Discount
rate
(
b
)
7.9%
Decrease
c
Foreign
Government
and
Agency
Securities:
Argentina
...........
1,522,961
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
c
Short
Term
Investments:
Argentina
...........
101,346
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
d
All
Other
............
10,103
e,f
Liabilities:
All
Other
............
73
f
Total
...............
$2,151,599
a
Represents
the
directional
change
in
the
fair
value
of
the
Level
3
financial
instruments
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
impacts,
if
any,
to
fair
value
and/or
net
assets
have
been
indicated.
b
The
discount
rate
is
comprised
of
the
risk-free
rate,
the
10-year
Costa
Rican
CDS
curve,
and
an
incremental
credit
spread
that
combines
with
the
first
two
components
to
arrive
at
an
8%
yield
on
issue
date
for
an
8%
coupon
bond
issued
at
par.
c
Represents
a
significant
impact
to
fair
value
and
net
assets.
d
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
e
Includes
securities
determined
to
have
no
value
at
June
30,
2021.
f
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
40
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
On
July
14,
2021,
the
Board
approved
a
change
to
the
automatic
conversion
feature
for
Class
C
that
will
convert
shareholders’
Class
C
shares
into
Class
A
shares
after
they
have
been
held
for
8
years.
The
change
will
become
effective
August
2,
2021.
Further
details
are
disclosed
in
the
Fund’s
Prospectus.
Abbreviations
Counterparty
BOFA
Bank
of
America
Corp.
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
SCNY
Standard
Chartered
Bank
Selected
Portfolio
CER
Reference
Stabilization
Coefficient
PIK
Payment-In-Kind
Cu
r
rency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
CLP
Chilean
Peso
CNY
Chinese
Yuan
COP
Colombian
Peso
EGP
Egyptian
Pound
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
PEN
Peruvian
Nuevo
Sol
THB
Thai
Baht
TRY
Turkish
Lira
USD
United
States
Dollar
14.
Subsequent
Events
(continued)
Templeton
Income
Trust
Tax
Information
(unaudited)
41
franklintempleton.com
Semiannual
Report
Templeton
Emerging
Markets
Bond
Fund
Under
Section
853
of
the
Internal
Revenue
Code,
the
Fund
intends
to
elect
to
pass
through
to
its
shareholders
$
36,014
of
foreign
taxes
paid
and
$
1,770,147
of
foreign
source
income
earned
by
the
fund,
or
amounts
as
finally
determined,
during
the
fiscal
year
ended
December
31,
202
0
.
Templeton
Income
Trust
Shareholder
Information
42
franklintempleton.com
Semiannual
Report
Board
Approval
of
Investment
Management
Agreements
TEMPLETON
INCOME
TRUST
Templeton
Emerging
Markets
Bond
Fund
(Fund)
At
a
meeting
held
on
February
23,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Trust,
on
behalf
of
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
telephonic
contract
renewal
meeting
at
which
the
Independent
Trustees
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters
and,
in
some
cases,
requested
additional
information
from
the
Manager
relating
to
the
contract.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
in
the
current
work-from-home
environment
and
liquidity
risk
management.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
and
growth
opportunities,
Templeton
Income
Trust
Shareholder
Information
43
franklintempleton.com
Semiannual
Report
as
evidenced
by
its
recent
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2020.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
emerging
markets
local
currency
debt
funds.
The
Fund
commenced
operations
on
April
1,
2013,
and
thus
has
been
in
operation
for
less
than
10
years.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-
and
five-year
periods
was
above
the
median
of
its
Performance
Universe.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-
and
five-year
periods
was
below
the
median
and
in
the
fifth
quintile
(worst)
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
during
significant
portions
of
the
reporting
periods,
management
largely
positioned
the
Fund’s
strategies
for
potential
rising
interest
rates
by
maintaining
low
portfolio
duration
in
the
US,
Europe
and,
at
times,
Japan,
and
aiming
at
a
negative
correlation
with
US
Treasury
returns.
Management
further
explained
that
the
Fund’s
underweight
position
of
developed
market
duration
exposures
was
a
headwind
to
performance
against
peers.
Management
also
explained
that
the
Fund’s
over-
weighted
currency
exposures
in
Latin
America,
exposure
to
Argentina
and,
in
2020,
underweight
position
in
the
Australian
dollar
were
also
sources
of
underperformance.
Management
further
explained
that
the
Fund
is
managed,
and
marketed,
as
a
benchmark-agnostic
strategy
and,
as
such,
can
be
difficult
to
compare
to
other
fixed
income
funds.
Management
noted,
however,
that
the
Fund’s
defensive
positioning
served
to
protect
the
Fund
during
recent
short-
term
periods
of
market
stress.
Management
discussed
with
the
Board
recent
adjustments
being
made
to
the
Fund’s
portfolio
positions
in
light
of
current
market
conditions.
The
Board
noted
management’s
continued
confidence
in
the
Fund’s
portfolio
management
team,
investment
process
and
long-term
prospects
for
the
Fund.
The
Board
also
noted
the
Fund’s
first
(best)
and
second
quintile
annualized
income
return
compared
to
that
of
its
Performance
Universe.
The
Board
further
noted
that
management
has
continued
to
add
resources
to
the
portfolio
management
team
as
needed
and
that
the
sources
of
analysis
and
input
have
continued
to
expand.
Based
on
the
foregoing,
the
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
Templeton
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The
Expense
Group
for
the
Fund
included
the
Fund
and
seven
other
emerging
markets
local
currency
debt
funds.
The
Board
noted
that
the
Management
Rate
for
the
Fund
was
above
the
median
and
in
the
fifth
quintile
(most
expensive)
of
its
Expense
Group,
but
its
actual
total
expense
ratio
was
below
the
median
and
in
the
first
quintile
(least
expensive)
of
its
Expense
Group.
The
Board
recalled
that
management
had
reduced
the
Fund’s
Management
Rate
effective
June
1,
2020.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
In
doing
so,
the
Board
noted
the
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2020,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
further
noted
management’s
representation
that
the
profitability
analysis
excluded
the
impact
of
the
recent
acquisition
of
the
Legg
Mason
companies
and
that
management
expects
to
incorporate
the
legacy
Legg
Mason
companies
into
the
profitability
analysis
beginning
next
year.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
noted
that
the
Fund
has
not
yet
reached
an
asset
size
that
would
likely
enable
the
Fund
to
achieve
economies
of
scale.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program-
Funds
no
HLIM
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
Templeton
Income
Trust
Shareholder
Information
45
franklintempleton.com
Semiannual
Report
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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.
Templeton
Income
Trust
Shareholder
Information
46
franklintempleton.com
Semiannual
Report
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.
072
S
08/21
©
2021
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
Emerging
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Fund
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Manager
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Services
Franklin
Advisers,
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LLC
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SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
Global
Bond
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2021
Sign
up
for
electronic
delivery
at
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franklintempleton.com
Not
part
of
the
semiannual
report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
June
30,
2021,
many
global
economies
improved
as
coronavirus
vaccines
were
distributed
and
people
reengaged
with
the
world.
However,
inflation
surged
in
many
countries
in
the
period's
second
half,
driven
by
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Many
central
banks
signaled
the
end
of
rate-cutting,
and
some
began
to
move
toward
policy
normalization,
but
the
U.S.
Federal
Reserve,
the
European
Central
Bank
and
the
Bank
of
Japan
kept
their
policy
rates
unchanged.
Rising
yields
during
2021's
first
quarter
strained
valuations
across
global
fixed
income
markets,
creating
headwinds
for
the
asset
class
during
the
six-month
period.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
-4.75%
and
-2.49%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
increased
broadly
appreciated
most
foreign
currencies
during
the
period.
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
their
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
Global
Bond
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,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2021,
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
Global
Bond
Fund
3
Performance
Summary
8
Your
Fund’s
Expenses
10
Financial
Highlights
and
Statement
of
Investments
11
Financial
Statements
27
Notes
to
Financial
Statements
31
Tax
Information
46
Shareholder
Information
47
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIA
NNUAL
REPORT
Templeton
Global
Bond
Fund
This
semi
annual
report
for
Templeton
Global
Bond
Fund
covers
the
period
ended
June
3
0
,
202
1
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
current
income
with
capital
appreciation
and
growth
of
income.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
bonds,
predominantly
those
issued
by
governments,
government-related
entities
and
government
agencies
located
around
the
world.
Bonds
include
debt
obligations
of
any
maturity,
such
as
bonds,
notes,
bills
and
debentures.
*Includes
U.S.
and
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-2.69%
cumulative
total
return.
In
comparison,
global
government
bonds,
as
measured
by
the
Fund’s
benchmark,
the
FTSE
World
Government
Bond
Index
(WGBI),
had
a
cumulative
total
return
of
-4.75%
in
U.S.
dollar
terms
for
the
same
period.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
8
.
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
Sovereign
bond
yields
rose
across
much
of
the
world
during
the
first
three
months
of
the
six-month
period
ended
June
30,
2021,
as
vaccine
distributions,
ongoing
stimulus
measures
and
optimism
for
improving
economic
conditions
appeared
to
fuel
reflation
expectations
across
financial
markets.
In
April,
sovereign
bond
yields
in
much
of
Asia
and
the
Americas
pulled
back
from
their
March
peaks,
while
many
areas
of
Europe
saw
yields
continue
to
rise.
In
June,
sovereign
bond
yields
declined
across
developed
markets
but
shifted
in
varying
directions
in
emerging
markets.
On
the
whole,
most
countries
around
the
world
saw
yields
rise
significantly
over
the
six-month
period,
despite
the
general
trend
of
declining
yields
over
the
final
months
of
the
period.
The
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
six-month
period
55
basis
points
(bps)
higher
at
1.47%.
It
reached
an
intra-period
peak
of
1.74%
on
March
31,
its
highest
level
since
January
2020.
In
Europe,
the
yield
on
the
10-year
German
Bund
finished
the
six-month
period
36
bps
higher
at
-0.21%.
In
Asia,
the
yield
on
the
10-year
Japanese
government
bond
rose
three
bps
to
0.05%.
Sovereign
bond
yields
also
notably
rose
in
the
U.K.,
Canada,
Australia,
Sweden
and
Norway.
In
emerging
markets,
yields
rose
in
India,
Indonesia,
Thailand,
Brazil,
Mexico,
Chile,
Colombia
and
Peru.
Rising
yields
strained
valuations
across
many
areas
of
the
global
fixed
income
markets
during
2021’s
first
quarter.
U.S.
dollar
(USD)-denominated
sovereign
credit
sectors
broadly
saw
negative
returns
in
January,
February
and
March,
before
sharply
reversing
to
generate
offsetting
positive
returns
in
April,
May
and
June
as
yields
declined.
Conditions
were
somewhat
different
in
corporate
credit
sectors
as
U.S.
investment-grade
credit
tiers
initially
saw
negative
returns
on
rate
pressures,
while
high-yield
credit
tiers
performed
better,
benefiting
from
greater
spread
cushioning.
Investment-grade
corporate
credits
returned
to
positive
performance
in
April,
May
and
June,
modestly
outpacing
similar
positive
returns
in
the
high-yield
credit
tiers.
In
currency
markets,
the
USD
broadly
strengthened
against
a
number
of
major
developed
market
and
emerging
market
currencies
in
the
first
quarter,
with
a
few
notable
exceptions.
That
trend
reversed
in
April
and
May
as
the
USD
broadly
Portfolio
Composition
6/30/21
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
64.8%
U.S.
Government
and
Agency
Securities
16.4%
Short-Term
Investments
&
Other
Net
Assets*
18.8%
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.
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Templeton
Global
Bond
Fund
4
franklintempleton.com
Semiannual
Report
depreciated,
before
returning
to
a
strengthening
pattern
in
June.
On
the
whole,
the
USD
finished
the
six-month
period
broadly
stronger
against
most
currencies,
with
some
exceptions.
In
Asia,
the
Chinese
yuan
appreciated
1.08%
against
the
USD
in
the
six-month
period,
while
the
Indonesian
rupiah
depreciated
3.10%,
the
Indian
rupee
1.76%,
the
Singapore
dollar
1.78%,
the
South
Korean
won
3.71%
and
the
Japanese
yen
7.05%.
In
Europe,
the
euro
depreciated
2.93%
against
the
USD.
The
Norwegian
krone
appreciated
2.60%
against
the
euro,
and
the
Canadian
dollar
appreciated
5.71%.
The
Swedish
krona
depreciated
0.96%
against
the
euro.
In
Latin
America,
the
Brazilian
real
appreciated
4.38%
against
the
USD,
while
the
Mexican
peso
depreciated
0.25%,
the
Colombian
peso
8.79%
and
the
Chilean
peso
3.25%.
Vaccine
distributions
progressively
accelerated
in
many
countries
during
the
period,
though
supply
setbacks
affected
areas
of
Europe
in
March
and
April.
Novel
coronavirus
(COVID-19)
infection
levels
peaked
in
January
in
the
U.S.
and
Europe
before
declining
in
February
and
plateauing
in
March.
Cases
continued
to
trend
lower
in
April,
May
and
June.
Governments
continued
to
struggle
with
balancing
the
needs
of
their
economies
with
the
health
of
their
citizens
during
much
of
the
first
half
of
the
period
before
higher
vaccination
rates
and
lower
case
levels
enabled
many
regions
to
progressively
reopen
their
economies
in
the
second
quarter.
Business
and
consumer
confidence
surveys
strengthened
in
multiple
regions
during
the
period,
particularly
in
the
second
quarter,
despite
some
growing
concerns
over
the
proliferation
of
the
COVID-19
delta
variant
in
several
parts
of
the
world
in
June,
notably
in
the
U.K.
and
Australia.
Economic
activity
continued
to
broadly
expand
in
many
countries
during
the
second
half
of
the
period,
largely
driven
by
strength
in
goods
sectors
and
manufacturing.
Historically
high
savings
rates
in
many
countries
also
fueled
resurgent
growth
in
the
spring
and
summer
months.
Labor
market
conditions
generally
continued
to
improve
in
many
countries
during
the
period,
though
unemployment
broadly
remained
above
pre-pandemic
levels.
Inflation
figures
surged
higher
in
many
countries
in
April,
May
and
June,
driven
by
a
combination
of
factors
that
included
cyclical
upswings
associated
with
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Headline
Consumer
Price
Index
(CPI)
inflation
in
the
U.S.
rose
from
2.6%
year-over-year
in
March
to
4.2%
in
April
and
5.0%
in
May,
its
highest
level
since
2008.
In
Europe,
euro
area
(EA)
inflation
rose
from
0.9%
in
February
to
1.3%
in
March,
1.6%
in
April
and
2.0%
in
May,
before
levelling
off
at
1.9%
(estimated)
in
June;
the
EA
had
previously
endured
deflationary
pressures
through
the
third
and
fourth
quarters
of
2020.
Areas
of
non-core
Europe,
such
as
Hungary
and
Russia,
experienced
above-target
levels
of
inflation
in
May
and
June.
Globally,
areas
of
Latin
America,
such
as
Brazil
and
Mexico,
also
experienced
above-target
inflation
during
the
period,
while
inflation
levels
remained
relatively
more
contained
in
areas
of
Asia,
such
as
China,
South
Korea,
Indonesia
and
Thailand.
Pent-up
demand
outpaced
supply
recoveries
in
certain
sectors
during
the
spring
and
summer
months,
adding
to
pricing
pressures.
Supply
bottlenecks
have
intermittently
surfaced
across
a
myriad
of
industries
due
to
accelerating
demand,
as
well
as
logistical
disruptions
and
ongoing
uncertainties
(economic,
health
and
policy)
that
make
it
difficult
to
accurately
schedule
production.
Most
central
banks
around
the
world
signaled
during
the
middle
of
the
six-month
period
that
they
had
reached
the
end
of
their
rate-cutting
cycles,
with
several
banks
beginning
to
pivot
towards
plans
for
policy
normalization.
The
Bank
of
Canada
began
tapering
its
asset
purchases
in
April
and
indicated
that
interest
rates
could
be
raised
in
the
second
half
of
2022.
The
Bank
of
England
headed
towards
concluding
its
quantitative
easing
program
by
the
end
of
2021.
Norges
Bank
(Norway)
indicated
that
a
rate
hike
could
arrive
in
the
second
half
of
2021.
Riksbank
(Sweden)
was
on
pace
to
wind
down
its
asset
purchase
program
in
2021
but
intended
to
keep
rates
on
hold
at
0%
for
the
foreseeable
future.
The
Reserve
Bank
of
New
Zealand
intended
to
end
its
asset
purchases
by
September
and
begin
hiking
rates
by
mid-2022.
Other
developed
market
central
banks—including
the
U.S.
Federal
Reserve
(Fed),
the
European
Central
Bank
(ECB)
and
the
Bank
of
Japan
(BOJ)—had
not
yet
signaled
a
normalization
schedule
as
of
the
end
of
June.
In
emerging
markets,
several
countries
faced
persistent
inflation
pressures
that
may
force
a
faster
tightening
response
from
their
central
banks.
Notably,
Brazil’s
central
bank
hiked
rates
75
bps
three
times
during
the
period
(March,
May
and
June)
to
4.25%,
and
Mexico’s
central
bank
hiked
its
policy
rate
25
bps
in
June
to
4.25%,
its
first
rate
hike
since
December
2018.
Other
countries
indicated
they
may
begin
pursuing
tightening
policies
in
the
second
half
of
2021.
The
Fed
kept
the
federal
funds
target
rate
unchanged
at
0.00%–0.25%,
at
each
of
its
policy
meetings
during
the
period.
In
March,
the
Fed
notably
upgraded
its
growth
forecast
for
2021
to
6.5%
from
its
prior
estimate
of
4.2%
in
December.
The
core
inflation
forecast
was
upgraded
to
2.2%
for
2021,
from
the
prior
estimate
of
1.8%.
However,
Templeton
Global
Bond
Fund
5
franklintempleton.com
Semiannual
Report
Fed
Chair
Jay
Powell
cautioned
that
a
full
recovery
was
still
distant
and
that
economic
conditions
continued
to
warrant
extraordinary
monetary
accommodation,
citing
the
uncertainty
related
to
the
course
of
the
pandemic.
In
June,
the
overall
policy
tone
shifted
in
a
hawkish
direction
as
the
Fed
raised
its
2021
growth
forecast
for
the
U.S.
economy
to
7.0%
and
increased
its
inflation
forecast
to
3.4%.
Powell
commented
that
“the
economy
has
clearly
made
progress,”
and
a
majority
of
Fed
officials
brought
forward
their
projected
expectations
for
rate
hikes.
The
Fed’s
dot
plot
survey
had
previously
indicated
expectations
for
no
hikes
until
2024
at
the
March
meeting.
In
June,
13
of
18
Fed
officials
indicated
expectations
for
a
rate
hike
by
the
end
of
2023,
with
11
indicating
expectations
for
two
hikes.
Seven
officials
indicated
expectations
for
at
least
one
hike
by
the
end
of
2022.
Powell
cautioned
that
the
dot
surveys
do
not
reflect
forward
guidance
from
the
committee
and
that
any
discussion
about
raising
rates
is
still
“highly
premature.”
Powell
also
indicated
in
June
that
discussions
of
when
to
begin
tapering
its
asset
purchase
program
had
begun,
but
that
the
timeline
is
yet
to
be
determined.
The
Fed
continued
to
purchase
“at
least
$80
billion
per
month”
in
USTs
and
“at
least
$40
billion
per
month
in
agency
mortgage-backed
securities”
during
the
reporting
period.
The
Fed’s
balance
sheet
reached
US$8.1
trillion
at
the
end
of
June.
Despite
higher
U.S.
inflation
figures
during
the
period,
Powell
continued
to
dispel
the
notion
that
higher
inflation
figures
in
2021
would
necessitate
near-term
rate
hikes,
reiterating
the
Fed’s
view
that
the
figures
largely
reflect
“transitory
factors”
that
would
not
affect
the
course
of
monetary
policy.
Core
personal
consumption
expenditures
(PCE)
inflation
surged
to
3.4%
year-over-year
in
May,
its
highest
level
since
1992,
up
from
3.1%
in
April
and
1.9%
in
March.
The
Fed
continued
to
indicate
it
will
let
inflation
run
above
2.0%
for
periods
of
time
to
counterbalance
prior
periods
of
prolonged
below-target
inflation,
implying
that
the
Fed
will
allow
the
U.S.
economy
to
run
hot
in
upcoming
years.
However,
Powell
directly
addressed
Fed
credibility
concerns,
stating
that
“if
we
see
inflation
moving
materially
above
2%
in
a
persistent
way
that
risks
inflation
expectations
drifting
up,
then
we
will
use
our
tools
to
guide
inflation
expectations
back
down.”
As
of
the
June
meeting,
the
Fed
projected
core
PCE
will
be
3.0%
in
2021,
and
2.1%
in
2022
and
2023.
The
ECB
kept
monetary
policy
unchanged
at
each
of
its
policy
meetings
during
the
period,
leaving
the
main
refinancing
operations
rate
at
0.0%,
and
the
main
deposit
facility
rate
at
-0.5%.
In
March,
the
ECB
announced
that
it
would
accelerate
the
pace
of
its
bond
purchases
under
the
Pandemic
Emergency
Purchase
Programme
(PEPP).
In
June,
it
recommitted
to
those
levels,
stating
that
the
pace
and
volume
of
bond
purchases
under
the
PEPP
would
“continue
to
be
conducted
at
a
significantly
higher
pace
than
during
the
first
months
of
the
year.”
The
PEPP
is
currently
scheduled
to
run
through
March
2022
and
has
around
€700
billion
in
capacity
remaining
of
its
total
€1.85
trillion
size.
The
ECB
raised
its
2021
growth
forecast
for
the
EA
to
4.6%
at
its
June
meeting,
describing
conditions
as
“balanced”
and
removing
prior
comments
that
risks
were
“titled
to
the
downside.”
The
ECB
also
increased
its
2021
inflation
forecast
for
the
EA
to
1.9%
(harmonized
index
of
consumer
prices)
from
1.5%.
ECB
President
Christine
Lagarde
commented
in
June
that
inflation
remained
distant
from
the
ECB’s
target
and
is
expected
to
diminish
in
2022.
Lagarde
warned
that
monetary
tightening
would
jeopardize
the
economic
recovery
and
the
inflation
outlook.
The
BOJ
kept
monetary
policy
unchanged
at
each
of
its
policy
meetings
during
the
period,
leaving
the
overnight
interest
rate
at
0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
at
0.0%.
The
BOJ
published
the
results
of
its
monetary
framework
review
in
March,
the
first
of
its
kind
since
2016.
The
findings
indicated
a
shift
of
emphasis
from
aggressive
stimulus
towards
more
“sustainable”
policy.
The
BOJ
said
it
plans
to
intervene
as
needed
during
events
that
require
financial
market
support,
but
will
shift
away
from
continuous
balance
sheet
expansion
solely
to
stimulate
economic
activity.
Japan
continued
to
struggle
against
deflationary
pressures
that
have
persisted
since
April
2020.
Core
inflation
(National
CPI
ex-fresh
food)
rose
to
0.1%
year-over-year
in
May,
from
-0.1%
in
April
and
March,
-0.4%
in
February
and
-0.6%
in
January.
Investment
Strategy
We
invest
selectively
in
bonds
around
the
world
based
upon
our
assessment
of
changing
market,
political
and
economic
conditions.
While
seeking
opportunities,
we
monitor
various
factors
including
changes
in
interest
rates,
Geographic
Composition
6/30/21
%
of
Total
Net
Assets
Americas
36.6%
Asia
Pacific
33.3%
Other
Europe
6.7%
Middle
East
&
Africa
3.5%
Supranational
1.1%
Short-Term
Investments
&
Other
Net
Assets
18.8%
Templeton
Global
Bond
Fund
6
franklintempleton.com
Semiannual
Report
currency
exchange
rates
and
credit
risks.
For
purposes
of
pursuing
its
investment
goals,
the
Fund
regularly
enters
into
various
currency-related
transactions
involving
derivative
instruments,
principally
currency
and
cross
currency
forwards,
but
it
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
Manager’s
Discussion
The
successful
development
of
vaccines
against
COVID-19
in
the
final
months
of
2020
substantially
changed
our
outlook
and
positioning
for
2021.
In
the
weeks
before
the
six-month
reporting
period
began,
we
significantly
shifted
the
emphasis
of
the
Fund’s
strategic
positioning
from
a
safe-haven
stance
toward
an
increasing
allocation
in
risk
assets.
We
expected
a
rebound
in
global
economic
activity
and
improving
economic
conditions
in
the
spring
and
summer
months
of
2021
as
vaccines
were
progressively
distributed
and
people
increasingly
reengaged
with
the
world.
We
were
actively
constructive
in
a
number
of
regions
throughout
the
period,
particularly
in
areas
of
Asia
that
appeared
to
be
at
the
forefront
of
the
global
economic
recovery.
The
Fund
was
focused
on
three
core
themes
during
the
six-month
period:
(1)
weakness
in
the
euro
and
USD,
on
excessive
fiscal
and
monetary
policies
in
Europe
and
the
U.S.,
against
currencies
in
countries
with
strong
trade
dynamics,
current
account
surpluses,
better
fiscal
management
and
stronger
growth
potential,
notably
in
Asia;
(2)
avoiding
interest-rate
risks
in
low-yielding
developed
markets;
and
(3)
pursuing
sovereign
bonds
with
relatively
higher
yields
in
a
select
set
of
resilient
emerging
markets.
At
the
beginning
of
the
period,
the
Fund
held
overweighted
positions
in
specific
currencies
that
showed
medium-term
value
against
the
USD
and
the
euro.
We
held
notable
exposures
to
the
Chinese
yuan,
the
South
Korean
won,
the
Indian
rupee
and
the
Indonesian
rupiah
against
the
USD.
We
added
exposure
to
the
Singapore
dollar
in
April
and
the
New
Zealand
dollar
in
June.
In
Europe,
we
held
exposures
in
the
Norwegian
krone
and
Swedish
krona
against
the
euro.
In
the
Americas,
we
held
long
exposure
to
the
Canadian
dollar
against
the
euro,
and
long
exposures
to
the
Colombian
peso
and
Brazilian
real
against
the
USD.
In
May,
we
added
exposure
to
the
Chilean
peso
against
the
USD.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
We
also
continued
to
focus
on
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets,
specifically
in
countries
with
resilient
economies
and
strong
trade
dynamics.
We
continued
to
largely
avoid
developed
market
duration
exposures
in
preference
for
higher
yields
available
in
select
emerging
markets,
notably
including
Indonesia,
India,
Mexico,
Colombia,
Brazil
and
Ghana,
among
others.
We
saw
pockets
of
value
in
certain
USD-denominated
sovereign
credits,
but
we
continued
to
largely
prefer
specific
valuations
in
the
local-currency
markets
over
the
more
fully
valued
credit
markets.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
contributed
to
absolute
results,
while
sovereign
credit
exposures
had
a
largely
neutral
effect.
Among
currencies,
the
Fund’s
net-positive
position
in
the
Japanese
yen
detracted
from
absolute
performance,
as
did
currency
positions
in
Latin
America
and
Asia
ex-Japan.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Argentina)
and
Africa
(Ghana)
contributed
to
absolute
results.
On
a
relative
basis,
the
Fund’s
performance
fared
better
than
that
of
its
benchmark
index
primarily
due
to
interest-rate
strategies.
Currency
positions
detracted
from
relative
results,
while
sovereign
credit
exposures
had
a
largely
neutral
effect.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
underweighted
duration
exposures
in
Europe
contributed
to
relative
performance,
as
did
underweighted
duration
exposure
in
the
U.S.
Select
overweighted
duration
exposures
in
Latin
America
(Argentina)
and
Africa
(Ghana)
also
contributed
to
relative
results.
Among
currencies,
the
Fund’s
overweighted
position
in
the
Japanese
yen
during
most
of
the
period
detracted
from
relative
performance,
as
did
overweighted
currency
positions
in
Latin
America
and
Asia
ex-Japan.
However,
the
Fund’s
underweighted
exposure
to
the
euro
contributed
to
relative
results.
Thank
you
for
your
continued
participation
in
Templeton
Global
Bond
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2021,
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
Templeton
Global
Bond
Fund
7
franklintempleton.com
Semiannual
Report
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.
Performance
Summary
as
of
June
30,
2021
Templeton
Global
Bond
Fund
8
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
6/30/21
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
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
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
-2.69%
-6.32%
1-Year
-2.67%
-6.32%
5-Year
+3.47%
-0.08%
10-Year
+10.72%
+0.64%
Advisor
6-Month
-2.48%
-2.48%
1-Year
-2.33%
-2.33%
5-Year
+4.90%
+0.96%
10-Year
+13.59%
+1.28%
See
page
9
for
Performance
Summary
footnotes.
Templeton
Global
Bond
Fund
Performance
Summary
9
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.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio
that
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
In
losses
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.
The
markets
for
particular
securities
or
types
of
securities
are
or
may
become
relatively
illiquid.
Reduced
liquidity
will
have
an
adverse
impact
on
the
security’s
value
and
on
the
Fund’s
ability
to
sell
such
securities
when
necessary
to
meet
the
Fund’s
liquidity
needs
or
in
response
to
a
specific
market
event.
Foreign
securities
involve
special
risks,
including
currency
fluctuations
(which
may
be
significant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
emerging
markets
involve
heightened
risks
related
to
the
same
factors.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
relating
to
debt
securities
and
foreign
securities
generally,
including,
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Investments
in
lower
rated
bonds
include
higher
risk
of
default
and
loss
of
principal.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
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.
1.
The
Fund
has
a
fee
waiver
associated
with
any
investment
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
4/30/22.
Fund
investment
results
reflect
the
fee
waiver;
without
this
waiver,
the
results
would
have
been
lower.
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
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
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
3.75%.
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
(1/1/21–6/30/21)
Share
Class
Net
Investment
Income
A
$0.2390
C
$0.2185
R
$0.2270
R6
$0.2576
Advisor
$0.2508
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
0.92%
0.94%
Advisor
0.67%
0.69%
Your
Fund’s
Expenses
Templeton
Global
Bond
Fund
10
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
1/1/21
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$973.10
$4.76
$1,019.97
$4.87
0.97%
C
$1,000
$972.10
$6.71
$1,017.99
$6.87
1.37%
R
$1,000
$971.90
$5.98
$1,018.73
$6.12
1.22%
R6
$1,000
$975.90
$2.82
$1,021.94
$2.88
0.57%
Advisor
$1,000
$975.20
$3.53
$1,021.22
$3.62
0.72%
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.80
$10.69
$11.30
$11.89
$12.00
$11.32
$11.66
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.21
0.41
0.59
0.59
0.56
0.16
0.42
Net
realized
and
unrealized
gains
(losses)
(0.47)
(0.85)
(0.54)
(0.44)
(0.27)
0.60
(0.44)
Total
from
investment
operations
.............
(0.26)
(0.44)
0.05
0.15
0.29
0.76
(0.02)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.24)
(0.01)
(0.66)
(0.74)
(0.40)
—
(0.12)
Tax
return
of
capital
....
—
(0.44)
—
—
—
(0.08)
(0.20)
Total
distributions
.......
(0.24)
(0.45)
(0.66)
(0.74)
(0.40)
(0.08)
(0.32)
Net
asset
value,
end
of
period
................
$9.30
$9.80
$10.69
$11.30
$11.89
$12.00
$11.32
Total
return
d
...........
(2.69)%
(4.14)%
0.35%
1.27%
2.35%
6.75%
(0.15)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.98%
0.93%
0.92%
0.94%
0.97%
0.96%
0.93%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.97%
0.91%
0.85%
0.86%
0.90%
0.91%
0.90%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.97%
0.91%
0.85%
0.86%
f
0.89%
0.90%
0.90%
f
Net
investment
income
...
4.47%
4.03%
5.27%
4.99%
4.60%
4.22%
3.66%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$4,054,993
$4,749,790
$6,514,630
$8,375,227
$9,656,645
$12,703,966
$13,759,572
Portfolio
turnover
rate
....
18.33%
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.83
$10.72
$11.33
$11.92
$12.03
$11.35
$11.69
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.19
0.37
0.55
0.54
0.51
0.15
0.37
Net
realized
and
unrealized
gains
(losses)
(0.46)
(0.85)
(0.55)
(0.44)
(0.27)
0.59
(0.44)
Total
from
investment
operations
.............
(0.27)
(0.48)
—
0.10
0.24
0.74
(0.07)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.22)
(0.01)
(0.61)
(0.69)
(0.35)
—
(0.10)
Tax
return
of
capital
....
—
(0.40)
—
—
—
(0.06)
(0.17)
Total
distributions
.......
(0.22)
(0.41)
(0.61)
(0.69)
(0.35)
(0.06)
(0.27)
Net
asset
value,
end
of
period
................
$9.34
$9.83
$10.72
$11.33
$11.92
$12.03
$11.35
Total
return
d
...........
(2.79)%
(4.52)%
0.06%
0.86%
1.94%
6.59%
(0.55)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.38%
1.33%
1.32%
1.34%
1.37%
1.35%
1.33%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.37%
1.31%
1.25%
1.26%
1.30%
1.30%
1.30%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.37%
1.31%
1.25%
1.26%
f
1.29%
1.29%
1.30%
f
Net
investment
income
...
4.05%
3.65%
4.87%
4.59%
4.20%
3.83%
3.26%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$480,118
$682,582
$1,392,223
$2,218,852
$3,232,023
$4,072,562
$4,430,727
Portfolio
turnover
rate
....
18.33%
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.80
$10.69
$11.30
$11.89
$12.00
$11.32
$11.66
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.20
0.38
0.56
0.56
0.53
0.15
0.39
Net
realized
and
unrealized
gains
(losses)
(0.47)
(0.84)
(0.54)
(0.44)
(0.27)
0.60
(0.44)
Total
from
investment
operations
.............
(0.27)
(0.46)
0.02
0.12
0.26
0.75
(0.05)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.23)
(0.01)
(0.63)
(0.71)
(0.37)
—
(0.11)
Tax
return
of
capital
....
—
(0.42)
—
—
—
(0.07)
(0.18)
Total
distributions
.......
(0.23)
(0.43)
(0.63)
(0.71)
(0.37)
(0.07)
(0.29)
Net
asset
value,
end
of
period
................
$9.30
$9.80
$10.69
$11.30
$11.89
$12.00
$11.32
Total
return
d
...........
(2.81)%
(4.38)%
0.10%
1.02%
2.10%
6.66%
(0.40)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.23%
1.18%
1.17%
1.19%
1.22%
1.21%
1.18%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.22%
1.16%
1.10%
1.11%
1.15%
1.16%
1.15%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.22%
1.16%
1.10%
1.11%
f
1.14%
1.15%
1.15%
f
Net
investment
income
...
4.23%
3.79%
5.02%
4.74%
4.35%
3.97%
3.41%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$156,132
$170,554
$208,853
$239,671
$274,295
$306,907
$319,155
Portfolio
turnover
rate
....
18.33%
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.75
$10.64
$11.25
$11.85
$11.96
$11.28
$11.62
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.23
0.45
0.62
0.63
0.61
0.18
0.47
Net
realized
and
unrealized
gains
(losses)
(0.46)
(0.85)
(0.53)
(0.45)
(0.27)
0.60
(0.44)
Total
from
investment
operations
.............
(0.23)
(0.40)
0.09
0.18
0.34
0.78
0.03
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.26)
(0.01)
(0.70)
(0.78)
(0.45)
—
(0.14)
Tax
return
of
capital
....
—
(0.48)
—
—
—
(0.10)
(0.23)
Total
distributions
.......
(0.26)
(0.49)
(0.70)
(0.78)
(0.45)
(0.10)
(0.37)
Net
asset
value,
end
of
period
................
$9.26
$9.75
$10.64
$11.25
$11.85
$11.96
$11.28
Total
return
d
...........
(2.41)%
(3.79)%
0.73%
1.57%
2.79%
6.92%
0.25%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.61%
0.58%
0.57%
0.59%
0.55%
0.55%
0.53%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.57%
0.54%
0.48%
0.49%
0.48%
0.50%
0.50%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.57%
0.54%
0.48%
0.49%
f
0.47%
0.49%
0.50%
f
Net
investment
income
...
4.83%
4.42%
5.64%
5.36%
5.02%
4.63%
4.06%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$1,322,491
$2,273,175
$4,407,299
$4,084,816
$3,870,342
$2,924,394
$3,096,051
Portfolio
turnover
rate
....
18.33%
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.75
$10.64
$11.25
$11.85
$11.96
$11.28
$11.62
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.22
0.43
0.61
0.61
0.59
0.17
0.44
Net
realized
and
unrealized
gains
(losses)
(0.46)
(0.84)
(0.54)
(0.44)
(0.27)
0.60
(0.43)
Total
from
investment
operations
.............
(0.24)
(0.41)
0.07
0.17
0.32
0.77
0.01
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.25)
(0.01)
(0.68)
(0.77)
(0.43)
—
(0.13)
Tax
return
of
capital
....
—
(0.47)
—
—
—
(0.09)
(0.22)
Total
distributions
.......
(0.25)
(0.48)
(0.68)
(0.77)
(0.43)
(0.09)
(0.35)
Net
asset
value,
end
of
period
................
$9.26
$9.75
$10.64
$11.25
$11.85
$11.96
$11.28
Total
return
d
...........
(2.48)%
(3.92)%
0.60%
1.44%
2.62%
6.86%
0.10%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.73%
0.69%
0.67%
0.69%
0.72%
0.71%
0.68%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.72%
0.66%
0.60%
0.61%
0.65%
0.66%
0.65%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.72%
0.66%
0.60%
0.61%
f
0.64%
0.65%
0.65%
f
Net
investment
income
...
4.71%
4.31%
5.52%
5.24%
4.85%
4.47%
3.91%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$5,458,163
$7,050,610
$14,244,707
$18,506,219
$20,808,794
$20,838,200
$22,169,948
Portfolio
turnover
rate
....
18.33%
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
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.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Statement
of
Investments
(unaudited),
June
30,
2021
Templeton
Global
Bond
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
64.8%
Argentina
4.1%
a,b
Argentina
BONCER
,
Index
Linked,
1.2%,
3/18/22
.......
26,900,612,636
ARS
$
159,640,344
Index
Linked,
1.3%,
9/20/22
.......
265,918,817
ARS
1,558,363
Index
Linked,
1.4%,
3/25/23
.......
18,024,104,189
ARS
102,908,761
Index
Linked,
1.5%,
3/25/24
.......
15,002,225,972
ARS
81,329,107
b
Argentina
Government
Bond
,
18.2%,
10/03/21
................
8,062,394,000
ARS
45,209,266
16%,
10/17/23
.................
8,956,326,700
ARS
32,573,609
15.5%,
10/17/26
................
18,801,412,000
ARS
44,657,938
467,877,388
Brazil
1.1%
Brazil
Notas
do
Tesouro
Nacional
,
10%,
1/01/25
..................
230,020,000
BRL
49,000,187
10%,
1/01/27
..................
99,150,000
BRL
21,239,535
10%,
1/01/29
..................
99,190,000
BRL
21,315,791
10%,
1/01/31
..................
158,250,000
BRL
33,757,377
125,312,890
Colombia
3.8%
Colombia
Government
Bond
,
Senior
Bond,
4.375%,
3/21/23
.....
6,831,000,000
COP
1,864,719
Senior
Bond,
9.85%,
6/28/27
......
10,884,000,000
COP
3,466,961
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
249,235,700,000
COP
68,649,016
B,
10%,
7/24/24
................
518,579,000,000
COP
157,618,013
B,
6.25%,
11/26/25
..............
15,492,000,000
COP
4,189,268
B,
7.5%,
8/26/26
...............
309,760,200,000
COP
87,489,341
B,
5.75%,
11/03/27
..............
10,656,000,000
COP
2,721,330
B,
6%,
4/28/28
.................
236,008,100,000
COP
60,456,313
B,
7.75%,
9/18/30
..............
175,388,800,000
COP
48,779,269
435,234,230
Ghana
3.5%
Ghana
Government
Bond
,
24.75%,
7/19/21
................
10,770,000
GHS
1,840,692
18.75%,
1/24/22
................
243,080,000
GHS
42,094,931
17.6%,
11/28/22
................
3,220,000
GHS
558,300
Senior
Note,
17.6%,
2/20/23
......
14,885,000
GHS
2,584,509
19.75%,
3/25/24
................
306,980,000
GHS
55,601,994
Senior
Note,
18.3%,
3/02/26
......
6,300,000
GHS
1,085,710
19%,
11/02/26
.................
890,765,000
GHS
155,893,072
19.75%,
3/15/32
................
840,925,000
GHS
148,212,514
407,871,722
India
3.4%
India
Government
Bond
,
8.79%,
11/08/21
................
7,315,000,000
INR
100,109,611
Senior
Note,
5.22%,
6/15/25
......
2,124,000,000
INR
28,224,446
8.2%,
9/24/25
.................
320,200,000
INR
4,696,238
Senior
Note
,
5.15%,
11/09/25
......
622,300,000
INR
8,220,647
7.59%,
1/11/26
.................
7,001,000,000
INR
100,485,560
7.27%,
4/08/26
................
1,448,000,000
INR
20,569,720
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
India
(continued)
India
Government
Bond,
(continued)
8.33%,
7/09/26
................
8,401,000,000
INR
$
124,259,258
386,565,480
Indonesia
10.9%
Indonesia
Government
Bond
,
FR53,
8.25%,
7/15/21
...........
803,921,000,000
IDR
55,531,841
FR61,
7%,
5/15/22
..............
423,493,000,000
IDR
30,122,619
FR35,
Senior
Bond,
12.9%,
6/15/22
.
1,172,669,000,000
IDR
88,016,491
FR43,
10.25%,
7/15/22
..........
377,390,000,000
IDR
27,768,356
FR63,
5.625%,
5/15/23
..........
1,657,468,000,000
IDR
117,085,826
FR46,
9.5%,
7/15/23
............
6,667,220,000,000
IDR
504,662,573
FR39,
11.75%,
8/15/23
..........
641,965,000,000
IDR
50,723,647
FR70,
8.375%,
3/15/24
..........
2,703,357,000,000
IDR
203,920,744
FR44,
10%,
9/15/24
.............
248,790,000,000
IDR
19,559,882
FR81,
6.5%,
6/15/25
............
162,429,000,000
IDR
11,771,734
FR40,
11%,
9/15/25
.............
532,795,000,000
IDR
44,194,794
FR86,
5.5%,
4/15/26
............
1,433,452,000,000
IDR
99,343,167
1,252,701,674
Mexico
11.2%
Mexican
Bonos
Desarr
Fixed
Rate
,
M,
6.5%,
6/09/22
...............
6,846,650,000
MXN
346,853,926
M,
Senior
Note,
6.75%,
3/09/23
....
9,506,535,300
MXN
485,891,012
M,
Senior
Bond,
8%,
12/07/23
.....
8,497,572,000
MXN
446,999,002
1,279,743,940
Norway
6.7%
c
Norway
Government
Bond
,
144A,
Reg
S,
2%,
5/24/23
........
2,535,983,000
NOK
302,128,582
144A,
Reg
S,
3%,
3/14/24
........
2,921,308,000
NOK
358,717,417
144A,
Reg
S,
1.75%,
3/13/25
......
890,910,000
NOK
106,303,325
767,149,324
South
Korea
19.0%
Korea
Monetary
Stabilization
Bond
,
1.285%,
2/02/22
................
138,640,000,000
KRW
122,986,030
Senior
Note,
0.87%,
2/02/23
......
408,050,000,000
KRW
359,094,827
Senior
Note
,
0.905%,
4/02/23
......
449,400,000,000
KRW
395,117,684
Korea
Treasury
Bond
,
1.25%,
12/10/22
................
440,550,000,000
KRW
390,568,445
2.25%,
9/10/23
................
13,848,000,000
KRW
12,483,116
0.875%,
12/10/23
...............
247,523,000,000
KRW
216,406,715
1.875%,
3/10/24
................
239,662,000,000
KRW
214,457,195
1.375%,
9/10/24
................
385,853,010,000
KRW
339,641,257
3%,
9/10/24
...................
146,030,000,000
KRW
135,052,413
2,185,807,682
Supranational
1.1%
d
Inter-American
Development
Bank,
Senior
Bond,
7.5%,
12/05/24
......
2,473,000,000
MXN
127,301,277
Total
Foreign
Government
and
Agency
Securities
(Cost
$9,534,482,309)
...........
7,435,565,607
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
U.S.
Government
and
Agency
Securities
16.4%
United
States
16.4%
U.S.
Treasury
Notes
,
1.75%,
12/31/24
................
168,125,000
$
174,987,915
2.125%,
5/15/25
................
343,230,000
362,509,874
2.875%,
5/31/25
................
287,950,000
312,661,958
2.625%,
12/31/25
...............
418,885,000
452,919,406
1.625%,
2/15/26
................
226,420,000
234,760,394
2.125%,
5/31/26
................
103,431,000
109,717,665
1.625%,
10/31/26
...............
226,430,000
234,576,173
1,882,133,385
Total
U.S.
Government
and
Agency
Securities
(Cost
$1,851,817,677)
..............
1,882,133,385
Total
Long
Term
Investments
(Cost
$11,386,299,986)
............................
9,317,698,992
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
0.8%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
86.50
JPY,
Expires
12/20/21
..
1
174,655,000
AUD
1,116,206
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.45
JPY,
Expires
2/23/22
..
1
109,126,000
4,261,172
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
115.95
JPY,
Expires
8/11/21
.......
1
322,233,000
79,141
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
20.98
MXN,
Expires
10/07/21
.
1
629,040,000
6,718,337
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
September
Strike
Price
21.57
MXN,
Expires
9/15/21
......................
1
101,678,000
451,455
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.65
MXN,
Expires
8/20/21
.......
1
154,676,000
330,003
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
22.02
MXN,
Expires
6/09/22
..
1
551,592,000
14,062,210
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
22.26
MXN,
Expires
8/02/21
.......
1
249,525,000
123,905
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
22.36
MXN,
Expires
12/28/21
.
1
348,060,000
3,064,171
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
276,403,000
4,313,812
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
276,403,000
4,313,812
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
104,398,000
$
2,911,787
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
104,398,000
2,911,787
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
195,030,000
5,439,624
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
220,019,000
6,264,974
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
220,016,000
5,589,945
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
29.73
MXN,
Expires
12/07/21
.
1
364,445,000
126,221
62,078,562
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
71.10
JPY,
Expires
7/15/21
.......
1
48,543,000
AUD
19
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
75.00
JPY,
Expires
12/20/21
..
1
349,306,000
AUD
935,533
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
77.45
JPY,
Expires
9/14/21
...
1
154,570,000
AUD
193,195
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
78.50
JPY,
Expires
7/15/21
.......
1
194,173,000
AUD
11,537
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
80.55
JPY,
Expires
9/14/21
...
1
294,155,000
AUD
1,176,718
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.61
JPY,
Expires
12/14/21
..
1
309,141,000
AUD
3,723,544
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
82.66
JPY,
Expires
9/14/21
...
1
662,521,000
AUD
5,960,515
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
102.65
JPY,
Expires
8/11/21
.......
1
483,634,000
15,135
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
18.70
MXN,
Expires
6/09/22
..
1
275,795,000
1,347,074
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
18.76
MXN,
Expires
10/27/21
.
1
351,363,000
692,176
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
19.04
MXN,
Expires
6/09/22
..
1
275,795,000
$
2,001,941
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.23
MXN,
Expires
8/20/21
.......
1
116,007,000
234,176
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.35
MXN,
Expires
8/02/21
.......
1
87,334,000
143,343
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.43
MXN,
Expires
8/30/21
..
1
165,014,000
720,024
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.58
MXN,
Expires
10/07/21
.
1
137,000,000
1,151,156
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
19.59
MXN,
Expires
9/03/21
..
1
318,547,000
2,115,875
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
52,200,000
689,397
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
97,515,000
1,287,865
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
52,200,000
689,397
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.88
MXN,
Expires
8/11/21
..
1
165,013,000
1,711,364
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.15
MXN,
Expires
8/20/21
.......
1
148,728,000
8,594,222
33,394,206
Total
Options
Purchased
(Cost
$212,840,526)
...................................
95,472,768
Short
Term
Investments
17.0%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
11.6%
Argentina
0.4%
a,b,e
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
Index
Linked,
2/28/22
............
958,794,673
ARS
5,620,389
Index
Linked,
4/18/22
............
7,271,348,035
ARS
42,464,699
48,085,088
Brazil
2.5%
e
Brazil
Letras
do
Tesouro
Nacional
,
1/01/24
......................
398,720,000
BRL
66,234,801
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
Short
Term
Investments
(continued)
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Brazil
(continued)
e
Brazil
Letras
do
Tesouro
Nacional,
(continued)
7/01/24
......................
1,392,970,000
BRL
$
221,724,055
287,958,856
Japan
4.1%
e
Japan
Treasury
Bills
,
7/19/21
......................
3,286,600,000
JPY
29,587,827
8/25/21
......................
22,812,600,000
JPY
205,393,364
9/13/21
......................
10,025,600,000
JPY
90,270,505
9/27/21
......................
15,711,000,000
JPY
141,467,691
466,719,387
Singapore
4.6%
e
Singapore
Treasury
Bills
,
7/16/21
......................
199,850,000
SGD
148,600,307
8/13/21
......................
36,540,000
SGD
27,164,347
8/20/21
......................
243,750,000
SGD
181,197,906
8/24/21
......................
229,240,000
SGD
170,406,481
527,369,041
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,328,996,072)
...........
1,330,132,372
Industry
Shares
Money
Market
Funds
5.4%
United
States
5.4%
f,g
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
..........
619,893,656
619,893,656
Total
Money
Market
Funds
(Cost
$619,893,656)
.................................
619,893,656
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$1,948,889,728
)
.............................
1,950,026,028
a
a
a
a
Total
Investments
(Cost
$13,548,030,240)
99.0%
................................
$11,363,197,788
Options
Written
(0.8)%
.......................................................
(95,660,315)
Other
Assets,
less
Liabilities
1.8%
.............................................
204,359,527
Net
Assets
100.0%
...........................................................
$11,471,897,000
a
a
a
a
Number
of
Contracts
Notional
Amount
#
h
Options
Written
(0.8)%
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.20
JPY,
Expires
12/20/21
..
1
174,655,000
AUD
(5,131,246)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
85.74
JPY,
Expires
9/14/21
...
1
441,682,000
AUD
(1,389,326)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
109.90
JPY,
Expires
8/11/21
.......
1
483,634,000
(6,734,438)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
h
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
21.10
MXN,
Expires
9/03/21
..
1
318,547,000
$
(1,801,314)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.15
MXN,
Expires
8/20/21
.......
1
148,728,000
(576,207)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.61
MXN,
Expires
10/07/21
.
1
314,520,000
(907,889)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
82,922,000
(2,967,692)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
82,922,000
(2,967,692)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
23.43
MXN,
Expires
8/20/21
.......
1
154,676,000
(56,961)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
September
Strike
Price
24.20
MXN,
Expires
9/15/21
......................
1
61,426,000
(34,113)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
24.62
MXN,
Expires
8/02/21
.......
1
62,382,000
(3,092)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
25.33
MXN,
Expires
12/28/21
.
1
222,890,000
(470,664)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
25.41
MXN,
Expires
6/09/22
..
1
367,702,000
(2,700,745)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
26.61
MXN,
Expires
8/30/21
..
1
165,014,000
(10,276)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
27.38
MXN,
Expires
8/11/21
..
1
165,013,000
(3,143)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
27.93
MXN,
Expires
12/07/21
.
1
121,484,000
(73,421)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
52,200,000
(388,680)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
52,200,000
(388,680)
(26,605,579)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
68.40
JPY,
Expires
12/20/21
..
1
174,655,000
AUD
(116,589)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
23
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
h
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
75.90
JPY,
Expires
7/15/21
.......
1
194,173,000
AUD
$
(1,599)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
78.33
JPY,
Expires
12/14/21
..
1
464,175,000
AUD
(2,537,388)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
80.56
JPY,
Expires
9/14/21
...
1
331,261,000
AUD
(1,330,272)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
82.09
JPY,
Expires
9/14/21
...
1
147,077,000
AUD
(1,065,444)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
95.85
JPY,
Expires
2/23/22
...
1
109,126,000
(74,946)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
98.00
JPY,
Expires
8/11/21
........
1
161,401,000
(478)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.05
MXN,
Expires
10/07/21
.
1
137,000,000
(394,925)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.32
MXN,
Expires
10/07/21
.
1
565,803,000
(2,890,865)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.71
MXN,
Expires
10/27/21
.
1
351,363,000
(4,096,509)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
June
Strike
Price
19.84
MXN,
Expires
6/09/22
..
1
551,592,000
(9,295,031)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.86
MXN,
Expires
8/20/21
.......
1
232,014,000
(2,468,407)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
82,922,000
(1,359,161)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
82,922,000
(1,359,161)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
September
Strike
Price
20.21
MXN,
Expires
9/15/21
......................
1
30,713,000
(665,560)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.94
MXN,
Expires
8/30/21
..
1
165,014,000
(8,003,721)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
21.43
MXN,
Expires
8/11/21
..
1
165,013,000
(11,797,431)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
104,398,000
(5,583,369)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
195,030,000
(10,430,511)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
h
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
104,398,000
$
(5,583,369)
(69,054,736)
Total
Options
Written
(Premiums
received
$134,879,287)
.........................
$
(95,660,315)
#
Notional
amount
is
the
number
of
units
specified
in
the
contract,
and
can
include
currency
units,
bushels,
shares,
pounds,
barrels
or
other
units.
Currency
units
are
stated
in
U.S.
dollars
unless
otherwise
indicated.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
b
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
11
regarding
fair
value
measurements.
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
June
30,
2021,
the
aggregate
value
of
these
securities
was
$767,149,324,
representing
6.7%
of
net
assets.
d
A
supranational
organization
is
an
entity
formed
by
two
or
more
central
governments
through
international
treaties.
e
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
f
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
g
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
h
See
Note
1(c)
regarding
written
options.
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
25
At
June
30,
2021,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Chilean
Peso
......
JPHQ
Buy
4,523,830,500
6,226,883
7/01/21
$
—
$
(66,815)
Chilean
Peso
......
JPHQ
Sell
4,523,830,500
6,100,835
7/01/21
—
(59,232)
Chilean
Peso
......
GSCO
Buy
5,542,140,000
7,644,331
7/02/21
—
(97,639)
Chilean
Peso
......
GSCO
Sell
5,542,140,000
7,530,082
7/02/21
—
(16,611)
Chilean
Peso
......
JPHQ
Buy
8,910,139,700
12,285,442
7/02/21
—
(152,568)
Chilean
Peso
......
JPHQ
Sell
8,910,139,700
12,016,048
7/02/21
—
(116,826)
Chilean
Peso
......
JPHQ
Buy
15,551,018,000
21,650,507
7/06/21
—
(477,096)
Chilean
Peso
......
JPHQ
Sell
15,551,018,000
21,114,756
7/06/21
—
(58,655)
Mexican
Peso
......
CITI
Buy
1,037,061,000
52,291,778
7/08/21
—
(309,526)
Mexican
Peso
......
CITI
Sell
1,037,061,000
48,166,170
7/08/21
—
(3,816,081)
Indian
Rupee
......
HSBK
Buy
2,559,257,100
34,153,027
7/12/21
221,276
—
Australian
Dollar
....
JPHQ
Sell
123,055,692
9,362,815,399
JPY
7/13/21
—
(7,979,330)
Japanese
Yen
......
JPHQ
Sell
10,170,148,198
123,055,692
AUD
7/13/21
1,609,357
(898,408)
Chinese
Yuan
......
CITI
Buy
856,161,690
131,196,434
7/14/21
1,056,223
—
Chilean
Peso
......
GSCO
Buy
9,397,650,000
13,013,793
7/15/21
—
(221,608)
Euro
.............
DBAB
Sell
148,111,462
1,513,913,899
SEK
7/15/21
1,244,694
—
South
Korean
Won
..
CITI
Buy
47,947,800,000
42,898,631
7/21/21
—
(468,137)
Singapore
Dollar
....
MSCO
Buy
26,250,000
19,766,120
7/22/21
—
(246,247)
South
Korean
Won
..
JPHQ
Buy
48,338,500,000
43,347,297
7/22/21
—
(571,302)
South
Korean
Won
..
JPHQ
Buy
47,357,300,000
42,454,258
7/26/21
—
(547,546)
South
Korean
Won
..
CITI
Buy
116,554,900,000
104,609,537
8/02/21
—
(1,473,836)
Euro
.............
HSBK
Sell
397,725,072
619,041,917
CAD
8/03/21
27,319,778
—
South
Korean
Won
..
BNDP
Buy
115,172,700,000
103,475,796
8/03/21
—
(1,563,735)
Chilean
Peso
......
GSCO
Buy
32,633,671,336
45,449,567
8/06/21
—
(1,054,655)
Euro
.............
CITI
Sell
33,949,451
4,469,275,520
JPY
8/06/21
—
(45,510)
Japanese
Yen
......
CITI
Sell
4,500,746,661
33,949,451
EUR
8/06/21
—
(237,881)
Chilean
Peso
......
GSCO
Buy
5,542,140,000
7,526,196
8/09/21
12,750
—
Euro
.............
HSBK
Sell
26,400,000
31,756,560
8/10/21
423,126
—
Japanese
Yen
......
CITI
Buy
18,398,773,800
176,120,607
8/13/21
—
(10,433,816)
Japanese
Yen
......
CITI
Sell
18,398,773,800
177,774,519
8/13/21
12,087,728
—
Mexican
Peso
......
CITI
Sell
1,300,123,500
65,338,018
8/13/21
536,082
(61,507)
Australian
Dollar
....
CITI
Sell
69,000,000
54,004,920
8/16/21
2,258,199
—
Australian
Dollar
....
MSCO
Sell
133,184,000
103,706,385
8/16/21
3,824,714
—
Chilean
Peso
......
GSCO
Buy
19,040,583,935
26,964,319
8/16/21
—
(1,068,287)
Euro
.............
CITI
Sell
226,000,000
274,884,930
8/16/21
6,618,977
—
Chilean
Peso
......
GSCO
Buy
18,226,556,423
25,763,381
8/17/21
—
(975,101)
Chilean
Peso
......
JPHQ
Buy
35,742,600,000
50,146,965
8/17/21
—
(1,536,707)
Euro
.............
HSBK
Sell
227,266,283
29,199,331,166
JPY
8/18/21
—
(6,819,738)
Mexican
Peso
......
CITI
Sell
1,427,555,800
65,970,212
8/23/21
—
(5,160,377)
Euro
.............
CITI
Sell
264,788,375
33,977,909,078
JPY
8/24/21
—
(8,349,479)
Japanese
Yen
......
CITI
Buy
26,872,360,000
255,063,907
8/24/21
—
(13,047,402)
Japanese
Yen
......
CITI
Sell
26,872,360,000
248,665,405
8/24/21
6,648,900
—
Chilean
Peso
......
GSCO
Buy
24,514,422,714
33,676,625
9/01/21
—
(350,126)
Indian
Rupee
......
JPHQ
Buy
4,628,008,500
61,527,121
9/07/21
201,113
—
Indian
Rupee
......
CITI
Buy
4,496,477,800
59,797,564
9/08/21
168,548
—
Indian
Rupee
......
JPHQ
Buy
2,823,969,900
37,787,961
9/08/21
—
(126,818)
Indian
Rupee
......
CITI
Buy
4,358,906,500
58,812,744
9/09/21
—
(688,848)
Chinese
Yuan
......
BOFA
Buy
991,455,720
154,354,216
9/10/21
—
(1,845,081)
Chinese
Yuan
......
CITI
Buy
1,532,586,140
238,576,488
9/10/21
—
(2,828,805)
Chinese
Yuan
......
BOFA
Buy
1,188,701,030
184,781,755
9/13/21
—
(1,972,278)
Indian
Rupee
......
HSBK
Buy
2,566,417,190
34,755,521
9/13/21
—
(551,337)
Chilean
Peso
......
GSCO
Buy
32,405,456,859
44,655,657
9/15/21
—
(621,113)
Euro
.............
DBAB
Sell
25,295,229
260,313,200
SEK
9/15/21
396,542
—
Euro
.............
DBAB
Sell
29,875,081
321,641,100
NOK
9/15/21
1,897,444
—
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
See
Note 
9
 regarding
other
derivative
information.
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
Mexican
Peso
......
MSCO
Sell
1,409,269,100
70,949,459
9/15/21
$
947,535
$
—
Norwegian
Krone
...
DBAB
Sell
321,641,100
31,963,301
EUR
9/15/21
582,896
—
Euro
.............
DBAB
Sell
186,200,482
1,892,392,746
SEK
9/16/21
133,523
—
Euro
.............
JPHQ
Sell
76,360,969
814,107,200
NOK
9/20/21
3,910,193
—
Norwegian
Krone
...
JPHQ
Sell
620,904,900
62,013,903
EUR
9/20/21
1,501,850
—
New
Zealand
Dollar
.
BOFA
Buy
56,380,000
39,974,125
9/21/21
—
(580,462)
Chilean
Peso
......
JPHQ
Buy
17,986,259,800
24,233,057
9/24/21
200,809
—
Chilean
Peso
......
GSCO
Buy
4,655,410,000
6,345,979
9/29/21
—
(22,726)
Euro
.............
JPHQ
Sell
149,016,523
1,521,905,753
NOK
9/29/21
—
(164,500)
Norwegian
Krone
...
JPHQ
Sell
1,521,905,753
151,972,495
EUR
9/29/21
3,676,633
—
Chilean
Peso
......
JPHQ
Buy
29,488,000,000
41,201,120
9/30/21
—
(1,150,051)
Euro
.............
CITI
Sell
136,685,041
1,389,500,000
NOK
9/30/21
—
(905,368)
Euro
.............
JPHQ
Sell
7,954,529
80,334,375
NOK
9/30/21
—
(114,177)
Mexican
Peso
......
CITI
Sell
518,530,500
25,867,031
10/01/21
167,675
—
Chilean
Peso
......
JPHQ
Buy
15,551,018,000
21,086,412
10/04/21
32,150
—
Chinese
Yuan
......
HSBK
Buy
927,022,870
139,467,999
10/15/21
2,775,595
—
Euro
.............
DBAB
Sell
111,898,594
1,135,435,030
SEK
10/18/21
—
(181,080)
Euro
.............
DBAB
Sell
111,864,418
1,135,435,030
SEK
10/19/21
—
(141,955)
Euro
.............
DBAB
Sell
204,390,448
2,060,194,402
NOK
10/19/21
—
(3,555,878)
Euro
.............
JPHQ
Sell
163,635,626
1,649,025,750
NOK
10/19/21
—
(2,890,108)
Euro
.............
CITI
Sell
115,420,000
138,531,701
10/21/21
1,321,984
—
Singapore
Dollar
....
MSCO
Buy
33,100,000
24,796,887
10/21/21
—
(184,034)
Euro
.............
CITI
Sell
115,420,000
139,501,229
10/22/21
2,288,152
—
Euro
.............
HSBK
Sell
256,577,245
32,368,502,297
JPY
10/25/21
—
(13,320,093)
Euro
.............
CITI
Sell
114,670,000
138,571,815
10/26/21
2,236,997
—
Singapore
Dollar
....
CITI
Buy
26,320,000
19,811,818
10/26/21
—
(240,531)
Mexican
Peso
......
CITI
Sell
518,530,500
25,756,532
11/01/21
169,310
—
Euro
.............
HSBK
Sell
147,802,427
220,919,549
CAD
11/03/21
2,438,500
—
Indian
Rupee
......
CITI
Buy
3,363,647,800
44,159,745
11/10/21
344,500
—
Australian
Dollar
....
HSBK
Sell
68,959,000
53,343,234
11/17/21
1,606,011
—
Euro
.............
HSBK
Sell
225,999,999
274,088,279
11/17/21
5,244,936
—
Australian
Dollar
....
JPHQ
Sell
62,696,000
48,428,459
11/18/21
1,389,895
—
Euro
.............
CITI
Sell
225,955,000
273,831,475
11/18/21
5,035,084
—
Chinese
Yuan
......
JPHQ
Buy
644,088,108
98,728,070
11/22/21
—
(150,246)
Chinese
Yuan
......
JPHQ
Buy
588,157,946
90,972,893
12/10/21
—
(1,064,148)
Chinese
Yuan
......
JPHQ
Buy
1,290,035,552
199,462,979
12/13/21
—
(2,301,567)
Euro
.............
DBAB
Sell
134,100,784
1,352,258,895
SEK
12/13/21
—
(1,308,409)
Chinese
Yuan
......
HSBK
Buy
933,091,780
144,198,146
12/15/21
—
(1,609,117)
Euro
.............
DBAB
Sell
41,070,596
415,544,078
SEK
12/16/21
—
(239,378)
New
Zealand
Dollar
.
JPHQ
Buy
185,570,000
132,378,401
12/20/21
—
(2,779,288)
New
Zealand
Dollar
.
CITI
Buy
66,290,000
46,976,408
12/21/21
—
(680,786)
New
Zealand
Dollar
.
JPHQ
Buy
66,310,000
46,880,573
12/21/21
—
(570,983)
Chilean
Peso
......
GSCO
Buy
18,719,530,000
25,300,123
12/23/21
98,960
(51,660)
Indian
Rupee
......
JPHQ
Buy
4,614,943,200
59,786,801
1/27/22
665,424
—
Euro
.............
DBAB
Sell
25,714,286
260,010,000
SEK
6/15/22
—
(243,585)
Total
Forward
Exchange
Contracts
...................................................
$103,294,063
$(111,366,194)
Net
unrealized
appreciation
(depreciation)
............................................
$(8,072,131)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
See
Abbreviations
on
page
45
.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
27
Templeton
Global
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$12,928,136,584
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
619,893,656
Value
-
Unaffiliated
issuers
..................................................................
$10,743,304,132
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
619,893,656
Cash
....................................................................................
7,780,000
Restricted
currency,
at
value
(cost
$1,662)
(Note
1d)
................................................
1,662
Foreign
currency,
at
value
(cost
$89,279,359)
......................................................
89,753,149
Receivables:
Capital
shares
sold
........................................................................
17,922,757
Interest
.................................................................................
125,416,139
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
52,151,115
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
103,294,063
Total
assets
..........................................................................
11,759,516,673
Liabilities:
Payables:
Capital
shares
redeemed
...................................................................
51,123,214
Management
fees
.........................................................................
4,678,052
Distribution
fees
..........................................................................
1,180,276
Transfer
agent
fees
........................................................................
5,778,463
Deposits
from
brokers
for:
OTC
derivative
contracts
..................................................................
850,000
Options
written,
at
value
(premiums
received
$134,879,287)
...........................................
95,660,315
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
111,366,194
Deferred
tax
...............................................................................
12,772,755
Accrued
expenses
and
other
liabilities
...........................................................
4,210,404
Total
liabilities
.........................................................................
287,619,673
Net
assets,
at
value
.................................................................
$11,471,897,000
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$17,545,710,377
Total
distributable
earnings
(losses)
.............................................................
(6,073,813,377)
Net
assets,
at
value
.................................................................
$11,471,897,000
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
Templeton
Global
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$4,054,993,304
Shares
outstanding
........................................................................
435,850,220
Net
asset
value
per
share
a
..................................................................
$9.30
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$9.66
Class
C:
Net
assets,
at
value
.......................................................................
$480,117,870
Shares
outstanding
........................................................................
51,430,587
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$9.34
Class
R:
Net
assets,
at
value
.......................................................................
$156,131,715
Shares
outstanding
........................................................................
16,781,117
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.30
Class
R6:
Net
assets,
at
value
.......................................................................
$1,322,490,798
Shares
outstanding
........................................................................
142,861,086
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.26
Advisor
Class:
Net
assets,
at
value
.......................................................................
$5,458,163,313
Shares
outstanding
........................................................................
589,482,833
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.26
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
29
Templeton
Global
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$30,050
Interest:
(net
of
foreign
taxes
of
$13,875,282)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
98,827,467
Paid
in
cash
a
...........................................................................
256,971,948
Total
investment
income
...................................................................
355,829,465
Expenses:
Management
fees
(Note
3
a
)
...................................................................
31,846,023
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
5,455,779
    Class
C
................................................................................
1,841,867
    Class
R
................................................................................
403,820
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
3,836,158
    Class
C
................................................................................
497,283
    Class
R
................................................................................
142,086
    Class
R6
...............................................................................
535,918
    Advisor
Class
............................................................................
5,438,274
Custodian
fees
.............................................................................
2,470,312
Reports
to
shareholders
......................................................................
1,016,465
Registration
and
filing
fees
....................................................................
204,669
Professional
fees
...........................................................................
156,119
Trustees'
fees
and
expenses
..................................................................
266,252
Other
....................................................................................
240,638
Total
expenses
.........................................................................
54,351,663
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(710,567)
Net
expenses
.........................................................................
53,641,096
Net
investment
income
................................................................
302,188,369
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$935,348)
Unaffiliated
issuers
......................................................................
(852,984,840)
Written
options
...........................................................................
2,549,614
Foreign
currency
transactions
................................................................
2,178,122
Forward
exchange
contracts
.................................................................
(445,319,851)
Net
realized
gain
(loss)
..................................................................
(1,293,576,955)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
197,013,798
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(6,899,497)
Written
options
...........................................................................
54,535,754
Forward
exchange
contracts
.................................................................
385,020,916
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
5,812,888
Net
change
in
unrealized
appreciation
(depreciation)
............................................
635,483,859
Net
realized
and
unrealized
gain
(loss)
............................................................
(658,093,096)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(355,904,727)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
consolidated
financial
statements.
30
Templeton
Global
Bond
Fund
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$302,188,369
$886,702,807
Net
realized
gain
(loss)
.................................................
(1,293,576,955)
(2,805,697,849)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
635,483,859
889,421,207
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(355,904,727)
(1,029,573,835)
Distributions
to
shareholders:
Class
A
.............................................................
(110,018,695)
(6,612,491)
Class
C
.............................................................
(12,862,580)
(1,078,750)
Class
R
.............................................................
(3,861,583)
(206,391)
Class
R6
............................................................
(50,391,793)
(4,369,772)
Advisor
Class
........................................................
(164,106,975)
(13,136,851)
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(242,434,431)
Class
C
.............................................................
—
(39,550,308)
Class
R
.............................................................
—
(7,566,931)
Class
R6
............................................................
—
(160,209,371)
Advisor
Class
........................................................
—
(481,637,650)
Total
distributions
to
shareholders
..........................................
(341,241,626)
(956,802,946)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(463,828,942)
(1,254,552,693)
Class
C
.............................................................
(172,617,433)
(611,685,910)
Class
R
.............................................................
(5,913,508)
(21,561,017)
Class
R6
............................................................
(852,184,075)
(1,802,048,802)
Advisor
Class
........................................................
(1,263,124,179)
(6,164,776,063)
Total
capital
share
transactions
............................................
(2,757,668,137)
(9,854,624,485)
Net
increase
(decrease)
in
net
assets
...................................
(3,454,814,490)
(11,841,001,266)
Net
assets:
Beginning
of
period
.....................................................
14,926,711,490
26,767,712,756
End
of
period
..........................................................
$11,471,897,000
$14,926,711,490
Templeton
Income
Trust
31
franklintempleton.com
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
Templeton
Global
Bond
Fund
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds,
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
Global
Bond
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
after
they
have
been
held
for
10
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 Fund's
administrator
has
responsibility
for
oversight
of
valuation,
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. 
Debt
securities
generally
trade
in
the over-the-counter
(OTC)
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
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,
book
values,
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.
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
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
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.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
terms
are
contract
specific
for
OTC
derivatives.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of
the
agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund,
if
any,
is
held
in
segregated
accounts
with
the
Fund’s
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
1.
Organization
and
Significant
Accounting
Policies
(continued)
b.
Foreign
Currency
Translation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
33
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
The
Fund
purchased
or
wrote
OTC
option
contracts
primarily
to
manage
and/or
gain
exposure
to
foreign
exchange
rate
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.
See
Note
9
regarding
other
derivative
information.
d.
Restricted
Currency
At
June
30
2021,
the
Fund
held
currencies
in
certain
markets
in
which
the
ability
to
repatriate
such
currency
is
limited.
As
a
result
of
such
limitations
on
repatriation,
the
Fund
may
incur
substantial
delays
in
gaining
access
to
these
assets
and
may
be
exposed
to
potential
adverse
movements
in
currency
value.
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.
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
June
30,
2021,
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
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date.
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
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
34
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
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
June
30,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Six
Months
Ended
June
30,
2021
Year
Ended
December
31,
2020
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
27,154,449
$259,791,184
80,792,449
$816,587,860
Shares
issued
in
reinvestment
of
distributions
..........
10,724,634
102,005,371
23,054,024
232,611,154
Shares
redeemed
...............................
(86,724,434)
(825,625,497)
(228,757,398)
(2,303,751,707)
Net
increase
(decrease)
..........................
(48,845,351)
$(463,828,942)
(124,910,925)
$(1,254,552,693)
Class
C
Shares:
Shares
sold
...................................
1,164,609
$11,168,458
4,477,787
$45,842,838
Shares
issued
in
reinvestment
of
distributions
..........
1,317,431
12,580,509
3,663,000
37,176,208
Shares
redeemed
a
..............................
(20,488,102)
(196,366,400)
(68,613,100)
(694,704,956)
Net
increase
(decrease)
..........................
(18,006,062)
$(172,617,433)
(60,472,313)
$(611,685,910)
Class
R
Shares:
Shares
sold
...................................
2,074,914
$19,827,051
4,274,406
$43,070,893
Shares
issued
in
reinvestment
of
distributions
..........
402,538
3,827,283
758,709
7,649,988
Shares
redeemed
...............................
(3,100,149)
(29,567,842)
(7,172,655)
(72,281,898)
Net
increase
(decrease)
..........................
(622,697)
$(5,913,508)
(2,139,540)
$(21,561,017)
1.
Organization
and
Significant
Accounting
Policies
(continued)
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
35
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
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
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
June
30,
2021,
the
annualized
gross
effective
investment
management
fee
rate
was
0.486%
of
the
Fund’s
average
daily
net
assets. 
Six
Months
Ended
June
30,
2021
Year
Ended
December
31,
2020
Shares
Amount
Shares
Amount
Class
R6
Shares:
Shares
sold
...................................
30,443,691
$290,968,174
75,175,247
$760,067,332
Shares
issued
in
reinvestment
of
distributions
..........
4,787,770
45,371,799
14,541,119
146,434,916
Shares
redeemed
...............................
(125,469,968)
(1,188,524,048)
(270,886,633)
(2,708,551,050)
Net
increase
(decrease)
..........................
(90,238,507)
$(852,184,075)
(181,170,267)
$(1,802,048,802)
Advisor
Class
Shares:
Shares
sold
...................................
86,201,468
$821,080,684
254,268,866
$2,575,004,566
Shares
issued
in
reinvestment
of
distributions
..........
15,850,777
150,061,574
44,737,624
450,779,593
Shares
redeemed
...............................
(235,416,166)
(2,234,266,437)
(915,126,570)
(9,190,560,222)
Net
increase
(decrease)
..........................
(133,363,921)
$(1,263,124,179)
(616,120,080)
$(6,164,776,063)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.650%
Up
to
and
including
$200
million
0.585%
Over
$200
million,
up
to
and
including
$700
million
0.550%
Over
$700
million,
up
to
and
including
$1.2
billion
0.525%
Over
$1.2
billion,
up
to
and
including
$1.3
billion
0.475%
Over
$1.3
billion,
up
to
and
including
$35
billion
0.470%
Over
$35
billion,
up
to
and
including
$50
billion
0.465%
Over
$50
billion,
up
to
and
including
$65
billion
0.460%
Over
$65
billion,
up
to
and
including
$80
billion
0.455%
In
excess
of
$80
billion
2.
Shares
of
Beneficial
Interest
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
36
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
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:
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
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
June
30,
2021,
the
Fund
paid
transfer
agent
fees
of
$10,449,719,
of
which $3,319,466
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
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$29,333
CDSC
retained
..............................................................................
$39,621
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
37
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
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
June
30,
2021,
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
April
30,
2022.
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
 At
December
31,
2020,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$396,875,278.
At
June
30,
2021,
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,
foreign
capital
gains
tax,
swaps,
options
sold,
bond
discounts
and
premiums,
tax
straddles
and
inflation
related
adjustments
on
foreign
securities.
    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
Global
Bond
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.......
$1,730,879,789
$3,520,198,642
$(4,631,184,775)
$—
$—
$619,893,656
619,893,656
$30,050
Total
Affiliated
Securities
....
$1,730,879,789
$3,520,198,642
$(4,631,184,775)
$—
$—
$619,893,656
$30,050
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$7,393,297
Long
term
................................................................................
2,157,815,968
Total
capital
loss
carryforwards
...............................................................
$2,165,209,265
Cost
of
investments
..........................................................................
$13,422,267,166
Unrealized
appreciation
........................................................................
$937,439,402
Unrealized
depreciation
........................................................................
(3,100,241,227)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(2,162,801,825)
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
38
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
5.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2021,
aggregated
$1,976,081,856
and
$4,112,650,674,
respectively.
6.
Credit
Risk
At
June
30,
2021,
the
Fund
had
12.6%
of
its
portfolio
invested
in
high
yield
securities
or
other
securities
rated
below
investment
grade
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
7.
Concentration
of
Risk
Investments
in
issuers
domiciled
or
with
significant
operations
in
developing
or
emerging
market
countries
may
be
subject
to
higher
risks
than
investments
in
developed
countries.
These
risks
include
fluctuating
currency
values,
underdeveloped
legal
or
business
systems,
and
changing
local
and
regional
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Currencies
of
developing
or
emerging
market
countries
may
be
subject
to
significantly
greater
risks
than
currencies
of
developed
countries,
including
the
potential
inability
to
repatriate
those
currencies
into
U.S.
dollars.
At
June
30,
2021,
the
Fund
had
4.6%
of
its
net
assets
denominated
in
Argentine
Pesos. Argentina
has
restricted
currency
repatriation
since
September
2019,
and
had
restructured
certain
issues
of
its
debt.
Political
and
economic
conditions
in
Argentina
could
continue
to
affect
the
value
of
the
Fund's
holdings.
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
At
June
30,
2021,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
Global
Bond
Fund
Foreign
exchange
contracts
..
Investments
in
securities,
at
value
$
95,472,768
a
Options
written,
at
value
$
95,660,315
Unrealized
appreciation
on
OTC
forward
exchange
contracts
103,294,063
Unrealized
depreciation
on
OTC
forward
exchange
contracts
111,366,194
Total
....................
$198,766,831
$207,026,509
a
Purchased
option
contracts
are
included
in
investments
in
securities,
at
value
in
the
Statement
of
Assets
and
Liabilities.
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
39
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
For
the
period
ended
June
30,
2021,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
June
30,
2021,
the
average
month
end
notional
amount
of
options
represented
$19,865,579,509.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$16,509,138,538.
At
June
30,
2021,
OTC
derivative
assets
and
liabilities
are
as
follows:
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
Global
Bond
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Foreign
exchange
contracts
.....
Investments
$(196,098,207)
a
Investments
$63,347,586
a
Written
options
2,549,614
Written
options
54,535,754
Forward
exchange
contracts
(445,319,851)
Forward
exchange
contracts
385,020,916
Total
.......................
$(638,868,444)
$502,904,256
a
Purchased
option
contracts
are
included
in
net
realized
gain
(loss)
from
investments
and
net
change
in
unrealized
appreciation
(depreciation)
on
investments
in
the
Statement
of
Operations.
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
Global
Bond
Fund
Derivatives
Forward
exchange
contracts
.............................
$
103,294,063
$
111,366,194
Options
purchased
.....................................
95,472,768
—
Options
written
........................................
—
95,660,315
Total
.............................................
$198,766,831
$207,026,509
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
9.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
40
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
At
June
30,
2021,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
At
June
30,
2021,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
a
Cash
Collateral
Received
b
Net
Amount
(Not
less
than
zero)
Templeton
Global
Bond
Fund
Counterparty
BNDP
...................
$—
$—
$—
$—
$—
BOFA
....................
—
—
—
—
—
CITI
.....................
95,634,516
(95,634,516)
—
—
—
DBAB
...................
4,255,099
(4,255,099)
—
—
—
GSCO
...................
111,710
(111,710)
—
—
—
HSBK
...................
40,029,222
(22,300,285)
(16,816,016)
—
912,921
JPHQ
...................
13,187,424
(13,187,424)
—
—
—
MSCO
...................
45,548,860
(41,594,007)
—
(850,000)
3,104,853
Total
...................
$198,766,831
$(177,083,041)
$
(16,816,016)
$(850,000)
$4,017,774
$
1
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
Cash
Collateral
Pledged
b
Net
Amount
(Not
less
than
zero)
Templeton
Global
Bond
Fund
Counterparty
BNDP
...................
$1,563,735
$—
$—
$(1,370,000)
$193,735
BOFA
....................
4,397,821
—
—
(4,290,000)
107,821
CITI
.....................
103,244,479
(95,634,516)
—
(7,609,963)
—
DBAB
...................
5,670,285
(4,255,099)
—
(401,289)
1,013,897
GSCO
...................
4,479,526
(111,710)
—
(2,330,000)
2,037,816
HSBK
...................
22,300,285
(22,300,285)
—
—
—
JPHQ
...................
23,776,371
(13,187,424)
—
(8,869,827)
1,719,120
MSCO
...................
41,594,007
(41,594,007)
—
—
—
Total
...................
$207,026,509
$(177,083,041)
$—
$(24,871,079)
$5,072,389
a
At
June
30,
2021,
the
Fund
received
U.S.
Treasury
Bonds
and
Notes
and
U.K
Treasury
Inflation-Linked
Gilt
Bonds
as
collateral
for
derivatives.
b
In
some
instances,
the
collateral
amounts
disclosed
in
the
table
above
were
adjusted
due
to
the
requirement
to
limit
collateral
amounts
to
avoid
the
effect
of
over
collateralization.
Actual
collateral
received
and/or
pledged
may
be
more
than
the
amounts
disclosed
herein.
9.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
41
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
45
.
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
4,
2022.
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
June
30,
2021,
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)
9.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
42
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
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
June
30,
2021,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Global
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
............................
$
—
$
—
$
467,877,388
$
467,877,388
Brazil
...............................
—
125,312,890
—
125,312,890
Colombia
............................
—
435,234,230
—
435,234,230
Ghana
..............................
—
407,871,722
—
407,871,722
India
................................
—
386,565,480
—
386,565,480
Indonesia
............................
—
1,252,701,674
—
1,252,701,674
Mexico
..............................
—
1,279,743,940
—
1,279,743,940
Norway
..............................
—
767,149,324
—
767,149,324
South
Korea
..........................
—
2,185,807,682
—
2,185,807,682
Supranational
.........................
—
127,301,277
—
127,301,277
U.S.
Government
and
Agency
Securities
.......
—
1,882,133,385
—
1,882,133,385
Options
purchased
.......................
—
95,472,768
—
95,472,768
Short
Term
Investments
...................
619,893,656
1,282,047,284
48,085,088
1,950,026,028
Total
Investments
in
Securities
...........
$619,893,656
$10,227,341,656
$515,962,476
$11,363,197,788
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
103,294,063
$
—
$
103,294,063
Restricted
Currency
(ARS)
.................
—
—
1,662
1,662
Total
Other
Financial
Instruments
.........
$—
$103,294,063
$1,662
$103,295,725
Receivables:
Interest
(ARS)
...........................
$—
$—
$9,219,313
$9,219,313
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
95,660,315
$
—
$
95,660,315
Forward
exchange
contracts
................
—
111,366,194
—
111,366,194
Total
Other
Financial
Instruments
.........
$—
$207,026,509
$—
$207,026,509
Payables:
Deferred
Tax(ARS)
.......................
$—
$—
$25,586
$25,586
11.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
43
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
period.
At
June
30,
2021,
the
reconciliation
is
as
follows:
Significant
unobservable
valuation
inputs
for
material
Level
3 assets
and/or
liabilities and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
June
30,
2021,
are
as
follows:
Balance
at
Beginning
of
Period
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(
Amortiza
-
tion
)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Global
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
.....
$
506,006,278
$
125,148,879
$
(113,095,468)
$
—
$
—
$
21,097,986
$
(417,798,003)
$
346,517,716
$
467,877,388
$
(48,721,823)
Short
Term
Investments
...
32,820,953
58,401,811
(33,774,123)
—
—
343,602
(3,254,709)
(6,452,446)
48,085,088
(5,490,640)
Total
Investments
in
Securities
........
$538,827,231
$183,550,690
$(146,869,591)
$—
$—
$21,441,588
$(421,052,712)
$340,065,270
$515,962,476
$(54,212,463)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
.......
$106,650
$326,889,464
$(324,572,728)
$—
$—
$—
$(2,423,132)
$1,408
$1,662
$—
Receivables:
Interest
(ARS)
..
$11,892,277
$124,349,333
$(124,684,899)
$—
$—
$—
$(90,572)
$(2,246,826)
$9,219,313
$(412,708)
Liabilities:
Payables:
Deferred
Tax
(ARS)
$30,205
$—
$—
$—
$—
$—
$—
$(4,619)
$25,586
$(4,619)
Investment
Securities
Purchased
(ARS)
$4,882,607
$—
$(4,923,501)
$—
$—
$—
$40,894
$—
$—
$—
a
Purchases
include
all
purchases
of
securities
and
securities
received
in
corporate
actions.
b
Sales
include
all
sales
of
securities,
maturities,
paydowns
and
securities
tendered
in
corporate
actions.
11.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
44
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
12.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
and
2023. The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
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,
except
for
the
following:
On
July
14,
2021,
the
Board
approved
a
change
to
the
automatic
conversion
feature
for
Class
C
that
will
convert
shareholders’
Class
C
shares
into
Class
A
shares
after
they
have
been
held
for
8
years.
The
change
will
become
effective
August
2,
2021.
Further
details
are
disclosed
in
the
Fund’s
Prospectus.
Description
Fair
Value
at
End
of
Period
Valuation
Technique
Unobservable
Inputs
Amount
/
Range
(Weighted
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
Global
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Argentina
.........
$467,877,388
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
b
Short
Term
Investments:
Argentina
.........
48,085,088
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
c
All
Other
............
9,220,975
d
Liabilities:
All
Other
...........
25,586
d
Total
...............
$525,157,865
a
Represents
the
directional
change
in
the
fair
value
of
the
Level
3
financial
instruments
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
impacts,
if
any,
to
fair
value
and/or
net
assets
have
been
indicated.
b
Represents
a
significant
impact
to
fair
value
and
net
assets.
c
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
d
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
11.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
45
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
Abbreviations
Counterparty
BNDP
BNP
Paribas
SA
BOFA
Bank
of
America
Corp.
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
Selected
Portfolio
CER
Reference
Stabilization
Coefficient
Cu
r
rency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
CAD
Canadian
Dollar
COP
Colombian
Peso
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
SGD
Singapore
Dollar
USD
United
States
Dollar
Templeton
Income
Trust
Tax
Information
(unaudited)
46
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
Under
Section
853
of
the
Internal
Revenue
Code,
the
Fund
intends
to
elect
to
pass
through
to
its
shareholders
$42,005,156
of
foreign
taxes
paid
and
$756,819,772
of
foreign
source
income
earned
by
the
fund,
or
amounts
as
finally
determined,
during
the
fiscal
year
ended
December
31,
202
0
.
Templeton
Income
Trust
Shareholder
Information
47
franklintempleton.com
Semiannual
Report
Board
Approval
of
Investment
Management
Agreements
TEMPLETON
INCOME
TRUST
Templeton
Global
Bond
Fund
(Fund)
At
a
meeting
held
on
February
23,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Trust,
on
behalf
of
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
telephonic
contract
renewal
meeting
at
which
the
Independent
Trustees
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters
and,
in
some
cases,
requested
additional
information
from
the
Manager
relating
to
the
contract.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
in
the
current
work-from-home
environment
and
liquidity
risk
management.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
and
growth
opportunities,
Templeton
Income
Trust
Shareholder
Information
48
franklintempleton.com
Semiannual
Report
as
evidenced
by
its
recent
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2020.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
a
customized
peer
group
(Performance
Customized
Peer
Group)
selected
by
the
Manager.
The
Board
further
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
international
income
funds.
The
Performance
Customized
Peer
Group
for
the
Fund
also
provided
for
the
Board’s
consideration
included
the
Fund
and
all
retail
and
institutional
global
income
funds.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-,
five-
and
10-year
periods
was
above
the
medians
and
in
the
first
quintile
(best)
of
its
Performance
Universe
and
Performance
Customized
Peer
Group.
The
Board
also
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
medians
and
primarily
in
the
fifth
quintile
(worst)
of
its
Performance
Universe
and
Performance
Customized
Peer
Group.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
relative
underperformance
of
the
Fund,
including
for
longer
periods,
is
largely
(though
not
exclusively)
due
to
the
Fund’s
underperformance
in
2019
and
2020.
Management
further
explained
that
during
these
two
years
the
Fund’s
underperformance
was
due,
in
part,
to
the
Fund’s
strategies
for
potential
rising
interest
rates
by
maintaining
low
portfolio
duration
in
the
US,
Europe
and,
in
2019,
Japan.
Management
also
explained
that
the
Fund’s
exposure
to
Argentina
in
2019,
to
a
lesser
extent,
contributed
to
the
underperformance.
Management
further
explained
that,
in
2020,
the
Fund’s
underweight
currency
positions
in
the
Euro
and
the
Australian
dollar,
as
well
as
certain
currency
positions
in
Latin
America,
also
contributed
to
the
underperformance.
The
Board,
however,
noted
that
the
Fund
was
in
the
first
or
second
quintile
in
terms
of
total
return
performance
relative
to
the
Fund’s
Customized
Peer
Group
in
6
out
of
7
years
from
2012
through
2018
and
that
management
has
continued
to
add
resources
to
the
portfolio
management
team
as
needed
and
that
the
sources
of
analysis
and
input
have
continued
to
expand.
Management
also
explained
that
the
Performance
Universe
was
comprised
of
funds
that
invest
in
debt
securities
of
issuers
located
in
at
least
three
countries,
excluding
the
US,
whereas
the
Performance
Customized
Peer
Group
was
comprised
of
funds
that,
like
the
Fund,
invest
in
debt
securities
of
issuers
located
in
at
least
three
countries,
one
of
which
may
be
the
US.
Management
then
discussed
with
the
Board
recent
adjustments
that
have
been
made
to
the
Fund’s
portfolio
positions
in
light
of
current
market
conditions.
The
Board
also
noted
the
Fund’s
first
(best)
and
second
quintile
annualized
income
return
compared
to
that
of
its
Performance
Universe
and
Performance
Customized
Peer
Group
for
all
periods.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Templeton
Income
Trust
Shareholder
Information
49
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Semiannual
Report
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
eight
other
international
income
funds.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
the
Fund
were
below
the
medians
and
in
the
first
quintile
(least
expensive)
of
its
Expense
Group.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2020,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
further
noted
management’s
representation
that
the
profitability
analysis
excluded
the
impact
of
the
recent
acquisition
of
the
Legg
Mason
companies
and
that
management
expects
to
incorporate
the
legacy
Legg
Mason
companies
into
the
profitability
analysis
beginning
next
year.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
noted
that
the
Fund
had
experienced
a
decrease
in
assets
and
would
not
be
expected
to
demonstrate
additional
economies
of
scale
in
the
near
term,
but
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
a
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Templeton
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Liquidity
Risk
Management
Program-
Funds
no
HLIM
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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
Templeton
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51
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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
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reports
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you
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may
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406
S
08/21
©
2021
Franklin
Templeton
Investments.
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Semiannual
Report
and
Shareholder
Letter
Templeton
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Bond
Fund
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Manager
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SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
International
Bond
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2021
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the
semiannual
report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
June
30,
2021,
many
global
economies
improved
as
coronavirus
vaccines
were
distributed
and
people
reengaged
with
the
world.
However,
inflation
surged
in
many
countries
in
the
period's
second
half,
driven
by
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Many
central
banks
signaled
the
end
of
rate-cutting,
and
some
began
to
move
toward
policy
normalization,
but
the
U.S.
Federal
Reserve,
the
European
Central
Bank
and
the
Bank
of
Japan
kept
their
policy
rates
unchanged.
Rising
yields
during
2021's
first
quarter
strained
valuations
across
global
fixed
income
markets,
creating
headwinds
for
the
asset
class
during
the
six-month
period.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
-4.75%
and
-2.49%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
broadly
appreciated
against
most
foreign
currencies
during
the
period.
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
their
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
Bond
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,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2021,
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
Bond
Fund
3
Performance
Summary
8
Your
Fund’s
Expenses
10
Financial
Highlights
and
Statement
of
Investments
11
Financial
Statements
26
Notes
to
Financial
Statements
30
Tax
Information
45
Shareholder
Information
46
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
Bond
Fund
This
semi
annual
report
for
Templeton
International
Bond
Fund
covers
the
period
ended
June
30
,
2021
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
current
income
with
capital
appreciation
and
growth
of
income.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
bonds.
For
purposes
of
the
Fund’s
80%
policy,
bonds
include
derivative
instruments
or
other
investments
that
have
economic
characteristics
similar
to
bonds.
Bonds
include
debt
obligations
of
any
maturity,
such
as
bonds,
notes,
bills
and
debentures.
The
Fund
invests
predominantly
in
bonds
issued
by
governments,
government-related
entities
and
government
agencies
located
outside
of
the
U.S.
*Includes
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
less
liabilities
(including
derivatives).
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-3.13%
cumulative
total
return.
In
comparison,
the
Fund’s
benchmark,
the
FTSE
Non-USD
World
Government
Bond
Index
(WGBI),
which
measures
performance
of
investment-grade,
non-U.S.
world
government
bond
markets,
posted
a
cumulative
total
return
of
-6.00%
in
U.S.
dollar
terms
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
8
.
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
Sovereign
bond
yields
rose
across
much
of
the
world
during
the
first
three
months
of
the
six-month
period
ended
June
30,
2021,
as
vaccine
distributions,
ongoing
stimulus
measures
and
optimism
for
improving
economic
conditions
appeared
to
fuel
reflation
expectations
across
financial
markets.
In
April,
sovereign
bond
yields
in
much
of
Asia
and
the
Americas
pulled
back
from
their
March
peaks,
while
many
areas
of
Europe
saw
yields
continue
to
rise.
In
June,
sovereign
bond
yields
declined
across
developed
markets
but
shifted
in
varying
directions
in
emerging
markets.
On
the
whole,
most
countries
around
the
world
saw
yields
rise
significantly
over
the
six-month
period,
despite
the
general
trend
of
declining
yields
over
the
final
months
of
the
period.
The
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
six-month
period
55
basis
points
(bps)
higher
at
1.47%.
It
reached
an
intra-period
peak
of
1.74%
on
March
31,
its
highest
level
since
January
2020.
In
Europe,
the
yield
on
the
10-year
German
Bund
finished
the
six-month
period
36
bps
higher
at
-0.21%.
In
Asia,
the
yield
on
the
10-year
Japanese
government
bond
rose
three
bps
to
0.05%.
Sovereign
bond
yields
also
notably
rose
in
the
U.K.,
Canada,
Australia,
Sweden
and
Norway.
In
emerging
markets,
yields
rose
in
India,
Indonesia,
Thailand,
Brazil,
Mexico,
Chile,
Colombia
and
Peru.
Rising
yields
strained
valuations
across
many
areas
of
the
global
fixed
income
markets
during
2021’s
first
quarter.
U.S.
dollar
(USD)-denominated
sovereign
credit
sectors
broadly
saw
negative
returns
in
January,
February
and
March,
before
sharply
reversing
to
generate
offsetting
positive
returns
in
April,
May
and
June
as
yields
declined.
Conditions
were
somewhat
different
in
corporate
credit
sectors
as
U.S.
investment-grade
credit
tiers
initially
saw
negative
returns
on
rate
pressures,
while
high-yield
credit
tiers
performed
better,
benefiting
from
greater
spread
cushioning.
Investment-grade
corporate
credits
returned
to
positive
performance
in
April,
May
and
June,
modestly
outpacing
similar
positive
returns
in
the
high-yield
credit
tiers.
In
currency
markets,
the
USD
broadly
strengthened
against
a
number
of
major
developed
market
and
emerging
market
currencies
in
the
first
quarter,
with
a
few
notable
exceptions.
Portfolio
Composition
6/30/21
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
69.8%
Short-Term
Investments
&
Other
Net
Assets*
30.2%
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.
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Templeton
International
Bond
Fund
4
franklintempleton.com
Semiannual
Report
That
trend
reversed
in
April
and
May
as
the
USD
broadly
depreciated,
before
returning
to
a
strengthening
pattern
in
June.
On
the
whole,
the
USD
finished
the
six-month
period
broadly
stronger
against
most
currencies,
with
some
exceptions.
In
Asia,
the
Chinese
yuan
appreciated
1.08%
against
the
USD
in
the
six-month
period,
while
the
Indonesian
rupiah
depreciated
3.10%,
the
Indian
rupee
1.76%,
the
Singapore
dollar
1.78%,
the
South
Korean
won
3.71%
and
the
Japanese
yen
7.05%.
In
Europe,
the
euro
depreciated
2.93%
against
the
USD.
The
Norwegian
krone
appreciated
2.60%
against
the
euro,
and
the
Canadian
dollar
appreciated
5.71%.
The
Swedish
krona
depreciated
0.96%
against
the
euro.
In
Latin
America,
the
Brazilian
real
appreciated
4.38%
against
the
USD,
while
the
Mexican
peso
depreciated
0.25%,
the
Colombian
peso
8.79%
and
the
Chilean
peso
3.25%.
Vaccine
distributions
progressively
accelerated
in
many
countries
during
the
period,
though
supply
setbacks
affected
areas
of
Europe
in
March
and
April.
Novel
coronavirus
(COVID-19)
infection
levels
peaked
in
January
in
the
U.S.
and
Europe
before
declining
in
February
and
plateauing
in
March.
Cases
continued
to
trend
lower
in
April,
May
and
June.
Governments
continued
to
struggle
with
balancing
the
needs
of
their
economies
with
the
health
of
their
citizens
during
much
of
the
first
half
of
the
period
before
higher
vaccination
rates
and
lower
case
levels
enabled
many
regions
to
progressively
reopen
their
economies
in
the
second
quarter.
Business
and
consumer
confidence
surveys
strengthened
in
multiple
regions
during
the
period,
particularly
in
the
second
quarter,
despite
some
growing
concerns
over
the
proliferation
of
the
COVID-19
delta
variant
in
several
parts
of
the
world
in
June,
notably
in
the
U.K.
and
Australia.
Economic
activity
continued
to
broadly
expand
in
many
countries
during
the
second
half
of
the
period,
largely
driven
by
strength
in
goods
sectors
and
manufacturing.
Historically
high
savings
rates
in
many
countries
also
fueled
resurgent
growth
in
the
spring
and
summer
months.
Labor
market
conditions
generally
continued
to
improve
in
many
countries
during
the
period,
though
unemployment
broadly
remained
above
pre-pandemic
levels.
Inflation
figures
surged
higher
in
many
countries
in
April,
May
and
June,
driven
by
a
combination
of
factors
that
included
cyclical
upswings
associated
with
resurgent
economic
activity,
supply
bottlenecks
in
certain
sectors
and
base
effects
off
of
the
pandemic
shocks
in
2020.
Headline
Consumer
Price
Index
(CPI)
inflation
in
the
U.S.
rose
from
2.6%
year-over-year
in
March
to
4.2%
in
April
and
5.0%
in
May,
its
highest
level
since
2008.
In
Europe,
euro
area
(EA)
inflation
rose
from
0.9%
in
February
to
1.3%
in
March,
1.6%
in
April
and
2.0%
in
May,
before
levelling
off
at
1.9%
(estimated)
in
June;
the
EA
had
previously
endured
deflationary
pressures
through
the
third
and
fourth
quarters
of
2020.
Areas
of
non-core
Europe,
such
as
Hungary
and
Russia,
experienced
above-target
levels
of
inflation
in
May
and
June.
Globally,
areas
of
Latin
America,
such
as
Brazil
and
Mexico,
also
experienced
above-target
inflation
during
the
period,
while
inflation
levels
remained
relatively
more
contained
in
areas
of
Asia,
such
as
China,
South
Korea,
Indonesia
and
Thailand.
Pent-up
demand
outpaced
supply
recoveries
in
certain
sectors
during
the
spring
and
summer
months,
adding
to
pricing
pressures.
Supply
bottlenecks
have
intermittently
surfaced
across
a
myriad
of
industries
due
to
accelerating
demand,
as
well
as
logistical
disruptions
and
ongoing
uncertainties
(economic,
health
and
policy)
that
make
it
difficult
to
accurately
schedule
production.
Most
central
banks
around
the
world
signaled
during
the
middle
of
the
six-month
period
that
they
had
reached
the
end
of
their
rate-cutting
cycles,
with
several
banks
beginning
to
pivot
towards
plans
for
policy
normalization.
The
Bank
of
Canada
began
tapering
its
asset
purchases
in
April
and
indicated
that
interest
rates
could
be
raised
in
the
second
half
of
2022.
The
Bank
of
England
headed
towards
concluding
its
quantitative
easing
program
by
the
end
of
2021.
Norges
Bank
(Norway)
indicated
that
a
rate
hike
could
arrive
in
the
second
half
of
2021.
Riksbank
(Sweden)
was
on
pace
to
wind
down
its
asset
purchase
program
in
2021
but
intended
to
keep
rates
on
hold
at
0%
for
the
foreseeable
future.
The
Reserve
Bank
of
New
Zealand
intended
to
end
its
asset
purchases
by
September
and
begin
hiking
rates
by
mid-2022.
Other
developed
market
central
banks—including
the
U.S.
Federal
Reserve
(Fed),
the
European
Central
Bank
(ECB)
and
the
Bank
of
Japan
(BOJ)—had
not
yet
signaled
a
normalization
schedule
as
of
the
end
of
June.
In
emerging
markets,
several
countries
faced
persistent
inflation
pressures
that
may
force
a
faster
tightening
response
from
their
central
banks.
Notably,
Brazil’s
central
bank
hiked
rates
75
bps
three
times
during
the
period
(March,
May
and
June)
to
4.25%,
and
Mexico’s
central
bank
hiked
its
policy
rate
25
bps
in
June
to
4.25%,
its
first
rate
hike
since
December
2018.
Other
countries
indicated
they
may
begin
pursuing
tightening
policies
in
the
second
half
of
2021.
The
Fed
kept
the
federal
funds
target
rate
unchanged
at
0.00%–0.25%,
at
each
of
its
policy
meetings
during
the
period.
In
March,
the
Fed
notably
upgraded
its
growth
forecast
for
2021
to
6.5%
from
its
prior
estimate
of
4.2%
in
December.
The
core
inflation
forecast
was
upgraded
to
Templeton
International
Bond
Fund
5
franklintempleton.com
Semiannual
Report
2.2%
for
2021,
from
the
prior
estimate
of
1.8%.
However,
Fed
Chair
Jay
Powell
cautioned
that
a
full
recovery
was
still
distant
and
that
economic
conditions
continued
to
warrant
extraordinary
monetary
accommodation,
citing
the
uncertainty
related
to
the
course
of
the
pandemic.
In
June,
the
overall
policy
tone
shifted
in
a
hawkish
direction
as
the
Fed
raised
its
2021
growth
forecast
for
the
U.S.
economy
to
7.0%
and
increased
its
inflation
forecast
to
3.4%.
Powell
commented
that
“the
economy
has
clearly
made
progress,”
and
a
majority
of
Fed
officials
brought
forward
their
projected
expectations
for
rate
hikes.
The
Fed’s
dot
plot
survey
had
previously
indicated
expectations
for
no
hikes
until
2024
at
the
March
meeting.
In
June,
13
of
18
Fed
officials
indicated
expectations
for
a
rate
hike
by
the
end
of
2023,
with
11
indicating
expectations
for
two
hikes.
Seven
officials
indicated
expectations
for
at
least
one
hike
by
the
end
of
2022.
Powell
cautioned
that
the
dot
surveys
do
not
reflect
forward
guidance
from
the
committee
and
that
any
discussion
about
raising
rates
is
still
“highly
premature.”
Powell
also
indicated
in
June
that
discussions
of
when
to
begin
tapering
its
asset
purchase
program
had
begun,
but
that
the
timeline
is
yet
to
be
determined.
The
Fed
continued
to
purchase
“at
least
$80
billion
per
month”
in
USTs
and
“at
least
$40
billion
per
month
in
agency
mortgage-backed
securities”
during
the
reporting
period.
The
Fed’s
balance
sheet
reached
US$8.1
trillion
at
the
end
of
June.
Despite
higher
U.S.
inflation
figures
during
the
period,
Powell
continued
to
dispel
the
notion
that
higher
inflation
figures
in
2021
would
necessitate
near-term
rate
hikes,
reiterating
the
Fed’s
view
that
the
figures
largely
reflect
“transitory
factors”
that
would
not
affect
the
course
of
monetary
policy.
Core
personal
consumption
expenditures
(PCE)
inflation
surged
to
3.4%
year-over-year
in
May,
its
highest
level
since
1992,
up
from
3.1%
in
April
and
1.9%
in
March.
The
Fed
continued
to
indicate
it
will
let
inflation
run
above
2.0%
for
periods
of
time
to
counterbalance
prior
periods
of
prolonged
below-target
inflation,
implying
that
the
Fed
will
allow
the
U.S.
economy
to
run
hot
in
upcoming
years.
However,
Powell
directly
addressed
Fed
credibility
concerns,
stating
that
“if
we
see
inflation
moving
materially
above
2%
in
a
persistent
way
that
risks
inflation
expectations
drifting
up,
then
we
will
use
our
tools
to
guide
inflation
expectations
back
down.”
As
of
the
June
meeting,
the
Fed
projected
core
PCE
will
be
3.0%
in
2021,
and
2.1%
in
2022
and
2023.
The
ECB
kept
monetary
policy
unchanged
at
each
of
its
policy
meetings
during
the
period,
leaving
the
main
refinancing
operations
rate
at
0.0%,
and
the
main
deposit
facility
rate
at
-0.5%.
In
March,
the
ECB
announced
that
it
would
accelerate
the
pace
of
its
bond
purchases
under
the
Pandemic
Emergency
Purchase
Programme
(PEPP).
In
June,
it
recommitted
to
those
levels,
stating
that
the
pace
and
volume
of
bond
purchases
under
the
PEPP
would
“continue
to
be
conducted
at
a
significantly
higher
pace
than
during
the
first
months
of
the
year.”
The
PEPP
is
currently
scheduled
to
run
through
March
2022
and
has
around
€700
billion
in
capacity
remaining
of
its
total
€1.85
trillion
size.
The
ECB
raised
its
2021
growth
forecast
for
the
EA
to
4.6%
at
its
June
meeting,
describing
conditions
as
“balanced”
and
removing
prior
comments
that
risks
were
“titled
to
the
downside.”
The
ECB
also
increased
its
2021
inflation
forecast
for
the
EA
to
1.9%
(harmonized
index
of
consumer
prices)
from
1.5%.
ECB
President
Christine
Lagarde
commented
in
June
that
inflation
remained
distant
from
the
ECB’s
target
and
is
expected
to
diminish
in
2022.
Lagarde
warned
that
monetary
tightening
would
jeopardize
the
economic
recovery
and
the
inflation
outlook.
The
BOJ
kept
monetary
policy
unchanged
at
each
of
its
policy
meetings
during
the
period,
leaving
the
overnight
interest
rate
at
-0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
at
0.0%.
The
BOJ
published
the
results
of
its
monetary
framework
review
in
March,
the
first
of
its
kind
since
2016.
The
findings
indicated
a
shift
of
emphasis
from
aggressive
stimulus
towards
more
“sustainable”
policy.
The
BOJ
said
it
plans
to
intervene
as
needed
during
events
that
require
financial
market
support,
but
will
shift
away
from
continuous
balance
sheet
expansion
solely
to
stimulate
economic
activity.
Japan
continued
to
struggle
against
deflationary
pressures
that
have
persisted
since
April
2020.
Core
inflation
(National
CPI
ex-fresh
food)
rose
to
0.1%
year-over-year
in
May,
from
-0.1%
in
April
and
March,
-0.4%
in
February
and
-0.6%
in
January.
Investment
Strategy
We
invest
selectively
in
non-U.S.
bonds
around
the
world
based
upon
our
assessment
of
changing
market,
political
and
economic
conditions.
While
seeking
opportunities,
we
monitor
various
factors
including
changes
in
interest
rates,
currency
exchange
rates
and
credit
risks.
For
purposes
of
pursuing
its
investment
goals,
the
Fund
regularly
enters
into
various
currency-related
transactions
involving
derivative
instruments,
principally
currency
and
cross
currency
forwards,
but
it
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
The
Fund
may
also
enter
into
various
other
transactions
involving
derivatives,
including
interest-rate/bond
futures
and
swap
agreements
(which
may
include
interest
rate
and
credit
default
swaps).
Templeton
International
Bond
Fund
6
franklintempleton.com
Semiannual
Report
Manager’s
Discussion
The
successful
development
of
vaccines
against
COVID-19
in
the
final
months
of
2020
substantially
changed
our
outlook
and
positioning
for
2021.
In
the
weeks
before
the
six-month
reporting
period
began,
we
significantly
shifted
the
emphasis
of
the
Fund’s
strategic
positioning
from
a
safe-haven
stance
toward
an
increasing
allocation
in
risk
assets.
We
expected
a
rebound
in
global
economic
activity
and
improving
economic
conditions
in
the
spring
and
summer
months
of
2021
as
vaccines
were
progressively
distributed
and
people
increasingly
reengaged
with
the
world.
We
were
actively
constructive
in
a
number
of
regions
throughout
the
period,
particularly
in
areas
of
Asia
that
appeared
to
be
at
the
forefront
of
the
global
economic
recovery.
The
Fund
was
focused
on
three
core
themes
during
the
six-month
period:
(1)
weakness
in
the
euro
and
USD,
on
excessive
fiscal
and
monetary
policies
in
Europe
and
the
U.S.,
against
currencies
in
countries
with
strong
trade
dynamics,
current
account
surpluses,
better
fiscal
management
and
stronger
growth
potential,
notably
in
Asia;
(2)
avoiding
interest-rate
risks
in
low-yielding
developed
markets;
and
(3)
pursuing
sovereign
bonds
with
relatively
higher
yields
in
a
select
set
of
resilient
emerging
markets.
At
the
beginning
of
the
period,
the
Fund
held
overweighted
positions
in
specific
currencies
that
showed
medium-term
value
against
the
USD
and
the
euro.
We
held
notable
exposures
to
the
Chinese
yuan,
the
South
Korean
won,
the
Indian
rupee
and
the
Indonesian
rupiah
against
the
USD.
We
added
exposure
to
the
Singapore
dollar
in
April
and
the
New
Zealand
dollar
in
June.
In
Europe,
we
held
exposures
in
the
Norwegian
krone
and
Swedish
krona
against
the
euro.
In
the
Americas,
we
held
long
exposure
to
the
Canadian
dollar
against
the
euro,
and
long
exposures
to
the
Colombian
peso
and
Brazilian
real
against
the
USD.
In
May,
we
added
exposure
to
the
Chilean
peso
against
the
USD.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
We
also
continued
to
focus
on
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets,
specifically
in
countries
with
resilient
economies
and
strong
trade
dynamics.
We
continued
to
largely
avoid
developed
market
duration
exposures
in
preference
for
higher
yields
available
in
select
emerging
markets,
notably
including
Indonesia,
India,
Mexico,
Colombia,
Brazil
and
Ghana,
among
others.
We
saw
pockets
of
value
in
certain
USD-denominated
sovereign
credits,
but
we
continued
to
largely
prefer
specific
valuations
in
the
local-currency
markets
over
the
more
fully
valued
credit
markets.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
contributed
to
absolute
results.
Among
currencies,
the
Fund’s
net-positive
position
in
the
Japanese
yen
detracted
from
absolute
performance,
as
did
currency
positions
in
Latin
America
and
Asia
ex-Japan.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Argentina)
and
Africa
(Ghana)
contributed
to
absolute
results.
On
a
relative
basis,
the
Fund’s
performance
fared
better
than
that
of
its
benchmark
index
primarily
due
to
interest-
rate
strategies.
Currency
positions
had
a
largely
neutral
effect
on
relative
performance.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
underweighted
duration
exposures
in
Europe
contributed
to
relative
performance.
Select
overweighted
duration
exposures
in
Latin
America
(Argentina)
and
Africa
(Ghana)
also
contributed
to
relative
results.
Among
currencies,
the
Fund’s
overweighted
position
in
the
Japanese
yen
during
most
of
the
period
detracted
from
relative
performance,
as
did
overweighted
currency
positions
in
Latin
America
and
Asia
ex-Japan.
However,
the
Fund’s
underweighted
exposure
to
the
euro
contributed
to
relative
results.
Thank
you
for
your
continued
participation
in
Templeton
International
Bond
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho
Portfolio
Manager
Geographic
Composition
6/30/21
%
of
Total
Net
Assets
Asia
39.6%
Latin
America
&
Caribbean
17.8%
Australia
&
New
Zealand
4.3%
Middle East & Africa
4.3%
Europe
3.8%
Short-Term
Investments
&
Other
Net
Assets
30.2%
Templeton
International
Bond
Fund
7
franklintempleton.com
Semiannual
Report
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2021,
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.
Performance
Summary
as
of
June
30,
2021
Templeton
International
Bond
Fund
8
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
6/30/21
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
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
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
-3.13%
-6.75%
1-Year
-3.57%
-7.23%
5-Year
+2.36%
-0.29%
10-Year
+1.36%
-0.25%
Advisor
6-Month
-3.01%
-3.01%
1-Year
-3.33%
-3.33%
5-Year
+3.63%
+0.71%
10-Year
+4.10%
+0.40%
See
page
for
9
Performance
Summary
footnotes.
Templeton
International
Bond
Fund
Performance
Summary
9
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.
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
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.
The
markets
for
particular
securities
or
types
of
securities
are
or
may
become
relatively
illiquid.
Reduced
liquidity
will
have
an
adverse
impact
on
the
security’s
value
and
on
the
Fund’s
ability
to
sell
such
securities
when
necessary
to
meet
the
Fund’s
liquidity
needs
or
in
response
to
a
specific
market
event.
Foreign
securities
involve
special
risks,
including
currency
fluctuations
(which
may
be
significant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
emerging
markets
involve
heightened
risks
related
to
the
same
factors.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
relating
to
debt
securities
and
foreign
securities
generally,
including,
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Investments
in
lower
rated
bonds
include
higher
risk
of
default
and
loss
of
principal.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
the
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
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.
1.
The
Fund
has
an
expense
reduction
and
a
fee
waiver
associated
with
any
investments
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
4/30/22.
Fund
investment
results
reflect
the
expense
reduction
and
fee
waiver;
without
these
reductions,
the
results
would
have
been
lower.
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
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
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
3.75%.
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
(1/1/21–6/30/21)
Share
Class
Net
Investment
Income
A
$0.1294
C
$0.1111
R
$0.1170
R6
$0.1461
Advisor
$0.1403
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.03%
1.25%
Advisor
0.78%
1.00%
Your
Fund’s
Expenses
Templeton
International
Bond
Fund
10
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
1/1/21
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
Ending
Account
Value
6/30/21
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$968.70
$4.79
$1,019.93
$4.92
0.98%
C
$1,000
$967.80
$6.78
$1,017.91
$6.95
1.39%
R
$1,000
$967.30
$5.95
$1,018.74
$6.11
1.22%
R6
$1,000
$971.70
$3.00
$1,021.76
$3.07
0.61%
Advisor
$1,000
$969.90
$3.63
$1,021.11
$3.73
0.74%
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.01
$9.77
$10.14
$10.57
$10.61
$10.07
$10.03
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.11
0.20
0.42
0.40
0.42
0.12
0.34
Net
realized
and
unrealized
gains
(losses)
(0.39)
(0.75)
(0.23)
(0.22)
(0.18)
0.44
(0.17)
Total
from
investment
operations
.............
(0.28)
(0.55)
0.19
0.18
0.24
0.56
0.17
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.13)
(—)
d
(0.56)
(0.59)
(0.28)
—
(0.04)
Net
realized
gains
.....
—
—
—
(0.01)
—
—
—
Tax
return
of
capital
....
—
(0.21)
—
(0.01)
—
(0.02)
(0.09)
Total
distributions
.......
(0.13)
(0.21)
(0.56)
(0.61)
(0.28)
(0.02)
(0.13)
Net
asset
value,
end
of
period
................
$8.60
$9.01
$9.77
$10.14
$10.57
$10.61
$10.07
Total
return
e
...........
(3.13)%
(5.66)%
1.86%
1.82%
2.25%
5.54%
1.70%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.23%
1.21%
1.20%
1.26%
1.44%
1.58%
1.27%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.98%
1.00%
1.00%
0.99%
0.99%
1.00%
0.99%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.98%
g
0.99%
0.98%
0.98%
0.99%
g
0.99%
0.99%
g
Net
investment
income
...
2.50%
2.12%
4.18%
3.93%
3.87%
3.48%
3.28%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$19,870
$22,455
$39,532
$38,856
$71,262
$84,766
$92,981
Portfolio
turnover
rate
....
39.72%
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Amount
rounds
to
less
than
$0.01
per
share.
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
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.02
$9.78
$10.16
$10.58
$10.62
$10.08
$10.04
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.09
0.16
0.39
0.36
0.38
0.11
0.29
Net
realized
and
unrealized
gains
(losses)
(0.38)
(0.75)
(0.25)
(0.21)
(0.18)
0.43
(0.16)
Total
from
investment
operations
.............
(0.29)
(0.59)
0.14
0.15
0.20
0.54
0.13
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.11)
(—)
d
(0.52)
(0.55)
(0.24)
—
(0.03)
Net
realized
gains
.....
—
—
—
(0.01)
—
—
—
Tax
return
of
capital
....
—
(0.17)
—
(0.01)
—
(—)
d
(0.06)
Total
distributions
.......
(0.11)
(0.17)
(0.52)
(0.57)
(0.24)
—
(0.09)
Net
asset
value,
end
of
period
................
$8.62
$9.02
$9.78
$10.16
$10.58
$10.62
$10.08
Total
return
e
...........
(3.22)%
(6.03)%
1.35%
1.52%
1.84%
5.36%
1.30%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.63%
1.61%
1.60%
1.66%
1.84%
1.98%
1.66%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.39%
1.40%
1.40%
1.39%
1.39%
1.40%
1.38%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.39%
g
1.39%
1.38%
1.38%
1.39%
g
1.39%
1.38%
g
Net
investment
income
...
2.07%
1.70%
3.78%
3.53%
3.47%
3.08%
2.89%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$2,777
$3,541
$6,694
$8,654
$9,733
$11,563
$11,906
Portfolio
turnover
rate
....
39.72%
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Amount
rounds
to
less
than
$0.01
per
share.
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
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.01
$9.76
$10.14
$10.56
$10.61
$10.08
$10.03
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.10
0.17
0.41
0.39
0.40
0.11
0.30
Net
realized
and
unrealized
gains
(losses)
(0.39)
(0.73)
(0.25)
(0.22)
(0.19)
0.43
(0.15)
Total
from
investment
operations
.............
(0.29)
(0.56)
0.16
0.17
0.21
0.54
0.15
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.12)
(—)
d
(0.54)
(0.57)
(0.26)
—
(0.03)
Net
realized
gains
.....
—
—
—
(0.01)
—
—
—
Tax
return
of
capital
....
—
(0.19)
—
(0.01)
—
(0.01)
(0.07)
Total
distributions
.......
(0.12)
(0.19)
(0.54)
(0.59)
(0.26)
(0.01)
(0.10)
Net
asset
value,
end
of
period
................
$8.60
$9.01
$9.76
$10.14
$10.56
$10.61
$10.08
Total
return
e
...........
(3.27)%
(5.83)%
1.52%
1.67%
1.92%
5.44%
1.44%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.48%
1.46%
1.45%
1.51%
1.69%
1.83%
1.52%
Expenses
net
of
waiver
and
payments
by
affiliates
....
1.22%
1.25%
1.25%
1.24%
1.24%
1.25%
1.24%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
1.22%
g
1.24%
1.23%
1.23%
1.24%
g
1.24%
1.24%
g
Net
investment
income
...
2.20%
1.82%
3.93%
3.68%
3.62%
3.23%
3.03%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$103
$138
$254
$300
$286
$1,010
$1,005
Portfolio
turnover
rate
....
39.72%
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Amount
rounds
to
less
than
$0.01
per
share.
e
Total
return
is
not
annualized
for
periods
less
than
one
year.
f
Ratios
are
annualized
for
periods
less
than
one
year.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
Year
Ended
December
31,
2017
a
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.................
$9.01
$9.77
$10.15
$10.57
$10.78
Income
from
investment
operations
b
:
Net
investment
income
c
.........................
0.11
0.19
0.45
0.45
0.18
Net
realized
and
unrealized
gains
(losses)
...........
(0.36)
(0.70)
(0.23)
(0.22)
(0.24)
Total
from
investment
operations
....................
(0.25)
(0.51)
0.22
0.23
(0.06)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
..
(0.15)
(—)
d
(0.60)
(0.63)
(0.15)
Net
realized
gains
.............................
—
—
—
(0.01)
—
Tax
return
of
capital
............................
—
(0.25)
—
(0.01)
—
Total
distributions
...............................
(0.15)
(0.25)
(0.60)
(0.65)
(0.15)
Net
asset
value,
end
of
period
......................
$8.61
$9.01
$9.77
$10.15
$10.57
Total
return
e
...................................
(2.83)%
(5.29)%
2.14%
2.28%
(0.61)%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
...............................
0.81%
0.80%
1.24%
1.09%
0.99%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.61%
0.61%
0.62%
0.66%
0.68%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
...............................
0.61%
g
0.60%
0.60%
0.65%
0.68%
g
Net
investment
income
...........................
2.41%
2.14%
4.56%
4.26%
4.39%
Supplemental
data
Net
assets,
end
of
period
(000’s)
....................
$999
$47,663
$3,878
$904
$414
Portfolio
turnover
rate
............................
39.72%
86.26%
24.26%
43.13%
88.62%
a
For
the
period
August
1,
2017
(effective
date)
to
December
31,
2017.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Amount
rounds
to
less
than
$0.01
per
share.
e
Total
return
is
not
annualized
for
periods
less
than
one
year.
f
Ratios
are
annualized
for
periods
less
than
one
year.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
..............
$9.02
$9.78
$10.15
$10.58
$10.62
$10.08
$10.04
Income
from
investment
operations
b
:
Net
investment
income
c
.
0.12
0.21
0.45
0.44
0.45
0.13
0.35
Net
realized
and
unrealized
gains
(losses)
(0.39)
(0.73)
(0.23)
(0.23)
(0.18)
0.43
(0.16)
Total
from
investment
operations
.............
(0.27)
(0.52)
0.22
0.21
0.27
0.56
0.19
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(0.14)
(—)
d
(0.59)
(0.62)
(0.31)
—
(0.04)
Net
realized
gains
.....
—
—
—
(0.01)
—
—
—
Tax
return
of
capital
....
—
(0.24)
—
(0.01)
—
(0.02)
(0.11)
Total
distributions
.......
(0.14)
(0.24)
(0.59)
(0.64)
(0.31)
(0.02)
(0.15)
Net
asset
value,
end
of
period
................
$8.61
$9.02
$9.78
$10.15
$10.58
$10.62
$10.08
Total
return
e
...........
(3.01)%
(5.41)%
2.12%
2.07%
2.51%
5.59%
1.95%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.98%
0.96%
0.95%
1.01%
1.19%
1.33%
1.02%
Expenses
net
of
waiver
and
payments
by
affiliates
....
0.74
%
0.75%
0.75%
0.74%
0.74%
0.75%
0.74%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
.......
0.74%
g
0.74%
0.73%
0.73%
0.74%
g
0.74%
0.74%
g
Net
investment
income
...
2.75%
2.30%
4.43%
4.18%
4.12%
3.73%
3.53%
Supplemental
data
Net
assets,
end
of
period
(000’s)
...............
$282,552
$284,611
$393,873
$346,303
$276,074
$249,190
$248,750
Portfolio
turnover
rate
....
39.72%
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Amount
rounds
to
less
than
$0.01
per
share.
e
Total
return
is
not
annualized
for
periods
less
than
one
year.
f
Ratios
are
annualized
for
periods
less
than
one
year.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Statement
of
Investments
(unaudited),
June
30,
2021
Templeton
International
Bond
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
69.8%
Argentina
1.8%
a,b
Argentina
BONCER
,
Index
Linked,
1%,
8/05/21
........
30,548,271
ARS
$
182,323
Index
Linked,
1.2%,
3/18/22
.......
285,652,683
ARS
1,695,192
Index
Linked,
1.3%,
9/20/22
.......
2,556,204
ARS
14,980
Index
Linked,
1.4%,
3/25/23
.......
214,269,156
ARS
1,223,371
Index
Linked,
1.5%,
3/25/24
.......
192,737,078
ARS
1,044,854
b,c
Argentina
Bonos
del
Tesoro
Nacional
en
Pesos
Badlar,
FRN,
36.104%,
(ARS
BADLAR
+
2%),
4/03/22
.........
5,808,000
ARS
33,281
b
Argentina
Government
Bond
,
18.2%,
10/03/21
................
73,832,000
ARS
414,007
16%,
10/17/23
.................
176,341,700
ARS
641,344
15.5%,
10/17/26
................
153,089,000
ARS
363,624
5,612,976
Australia
4.3%
d
Australia
Government
Bond,
Senior
Note,
Reg
S,
2%,
12/21/21
........
17,530,000
AUD
13,268,381
Brazil
1.0%
Brazil
Notas
do
Tesouro
Nacional
,
10%,
1/01/25
..................
5,490,000
BRL
1,169,512
10%,
1/01/27
..................
2,370,000
BRL
507,692
10%,
1/01/29
..................
2,370,000
BRL
509,310
10%,
1/01/31
..................
3,780,000
BRL
806,337
2,992,851
Colombia
3.9%
Colombia
Government
Bond
,
Senior
Bond,
4.375%,
3/21/23
.....
57,000,000
COP
15,560
Senior
Bond,
9.85%,
6/28/27
......
91,000,000
COP
28,987
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
11,789,100,000
COP
3,247,168
B,
10%,
7/24/24
................
10,360,000,000
COP
3,148,841
B,
6.25%,
11/26/25
..............
4,876,000,000
COP
1,318,543
B,
7.5%,
8/26/26
...............
9,689,000,000
COP
2,736,582
B,
5.75%,
11/03/27
..............
3,355,000,000
COP
856,800
B,
7.75%,
9/18/30
..............
1,840,000,000
COP
511,742
11,864,223
Ghana
4.2%
Ghana
Government
Bond
,
24.75%,
7/19/21
................
280,000
GHS
47,855
18.75%,
1/24/22
................
2,960,000
GHS
512,593
17.6%,
11/28/22
................
130,000
GHS
22,540
Senior
Note,
17.6%,
2/20/23
......
5,150,000
GHS
894,204
19%,
9/18/23
..................
50,000
GHS
8,920
18.85%,
9/28/23
................
6,840,000
GHS
1,220,641
19.25%,
11/27/23
...............
280,000
GHS
50,315
Senior
Note,
17.7%,
3/18/24
......
23,130,000
GHS
4,019,994
19.75%,
3/25/24
................
2,910,000
GHS
527,076
21.7%,
3/17/25
................
5,880,000
GHS
1,108,290
19.25%,
6/23/25
................
3,560,000
GHS
633,751
Senior
Note,
18.3%,
3/02/26
......
5,530,000
GHS
953,012
19%,
11/02/26
.................
8,740,000
GHS
1,529,590
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Ghana
(continued)
Ghana
Government
Bond,
(continued)
19.75%,
3/15/32
................
8,740,000
GHS
$
1,540,420
13,069,201
India
4.4%
India
Government
Bond
,
8.2%,
2/15/22
.................
19,000,000
INR
262,334
8.15%,
6/11/22
.................
18,000,000
INR
251,195
8.13%,
9/21/22
................
51,000,000
INR
718,039
6.84%,
12/19/22
................
12,000,000
INR
167,353
7.16%,
5/20/23
................
19,100,000
INR
268,662
8.83%,
11/25/23
................
156,700,000
INR
2,291,410
7.68%,
12/15/23
................
43,400,000
INR
621,803
9.15%,
11/14/24
................
82,200,000
INR
1,234,817
Senior
Note,
5.22%,
6/15/25
......
48,000,000
INR
637,840
8.2%,
9/24/25
.................
104,400,000
INR
1,531,191
Senior
Note
,
5.15%,
11/09/25
......
202,800,000
INR
2,679,009
7.59%,
1/11/26
.................
157,000,000
INR
2,253,426
7.27%,
4/08/26
................
33,000,000
INR
468,785
13,385,864
Indonesia
10.1%
Indonesia
Government
Bond
,
FR81,
6.5%,
6/15/25
............
268,090,000,000
IDR
19,429,315
FR86,
5.5%,
4/15/26
............
164,800,000,000
IDR
11,421,208
30,850,523
Mexico
11.1%
Mexican
Bonos
Desarr
Fixed
Rate
,
M,
Senior
Note,
7.25%,
12/09/21
...
166,920,000
MXN
8,453,635
M,
6.5%,
6/09/22
...............
119,018,000
MXN
6,029,498
M,
Senior
Note,
6.75%,
3/09/23
....
266,398,000
MXN
13,615,938
M,
Senior
Bond,
8%,
12/07/23
.....
113,932,000
MXN
5,993,181
34,092,252
Norway
3.8%
d
Norway
Government
Bond
,
144A,
Reg
S,
2%,
5/24/23
........
44,234,000
NOK
5,269,892
144A,
Reg
S,
3%,
3/14/24
........
37,171,000
NOK
4,564,354
144A,
Reg
S,
1.75%,
3/13/25
......
12,526,000
NOK
1,494,601
144A,
Reg
S,
1.5%,
2/19/26
.......
2,424,000
NOK
286,927
11,615,774
Singapore
4.4%
Singapore
Government
Bond
,
3.125%,
9/01/22
................
2,600,000
SGD
1,995,895
2.375%,
6/01/25
................
14,460,000
SGD
11,435,739
13,431,634
South
Korea
20.8%
Korea
Monetary
Stabilization
Bond,
Senior
Note,
0.905%,
4/02/23
......
23,840,000,000
KRW
20,960,404
Korea
Treasury
Bond
,
2%,
12/10/21
..................
3,665,000,000
KRW
3,262,464
0.875%,
12/10/23
...............
24,791,000,000
KRW
21,674,507
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
South
Korea
(continued)
Korea
Treasury
Bond,
(continued)
1.375%,
9/10/24
................
1,485,100,000
KRW
$
1,307,237
1.875%,
6/10/26
................
18,495,000,000
KRW
16,440,152
63,644,764
Total
Foreign
Government
and
Agency
Securities
(Cost
$234,086,248)
............
213,828,443
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
0.3%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
86.50
JPY,
Expires
12/20/21
..
1
3,229,000
AUD
20,636
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.45
JPY,
Expires
2/23/22
..
1
2,642,000
103,165
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
115.95
JPY,
Expires
8/11/21
.......
1
7,804,000
1,917
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
20.98
MXN,
Expires
10/07/21
.
1
4,957,000
52,942
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.65
MXN,
Expires
8/20/21
.......
1
1,220,000
2,603
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
22.26
MXN,
Expires
8/02/21
.......
1
2,421,000
1,202
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
22.36
MXN,
Expires
12/28/21
.
1
2,740,000
24,122
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
1,257,000
35,059
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
2,349,000
65,517
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
1,257,000
35,059
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
1,734,000
49,375
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
1,735,000
44,081
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
29.73
MXN,
Expires
12/07/21
.
1
4,390,000
1,520
437,198
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
71.10
JPY,
Expires
7/15/21
.......
1
898,000
AUD
$
—
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
75.00
JPY,
Expires
12/20/21
..
1
6,459,000
AUD
17,299
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
77.45
JPY,
Expires
9/14/21
...
1
2,858,000
AUD
3,572
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
78.50
JPY,
Expires
7/15/21
.......
1
3,592,000
AUD
214
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
80.55
JPY,
Expires
9/14/21
...
1
5,439,000
AUD
21,758
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.61
JPY,
Expires
12/14/21
..
1
5,715,000
AUD
68,836
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
82.66
JPY,
Expires
9/14/21
...
1
12,247,000
AUD
110,183
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
102.65
JPY,
Expires
8/11/21
.......
1
11,712,000
367
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
18.76
MXN,
Expires
10/27/21
.
1
2,770,000
5,457
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.23
MXN,
Expires
8/20/21
.......
1
915,000
1,847
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.35
MXN,
Expires
8/02/21
.......
1
847,000
1,390
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.43
MXN,
Expires
8/30/21
..
1
1,300,000
5,672
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.58
MXN,
Expires
10/07/21
.
1
4,297,000
36,106
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
19.59
MXN,
Expires
9/03/21
..
1
2,510,000
16,672
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
1,174,000
15,505
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
628,000
8,294
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
628,000
8,294
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.88
MXN,
Expires
8/11/21
..
1
1,301,000
13,493
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.15
MXN,
Expires
8/20/21
.......
1
1,173,000
$
67,782
402,741
Total
Options
Purchased
(Cost
$1,959,455)
.....................................
839,939
Short
Term
Investments
27.5%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
7.4%
Argentina
0.2%
a,b,e
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
Index
Linked,
9/13/21
............
18,296,425
ARS
108,344
Index
Linked,
2/28/22
............
25,843,346
ARS
151,492
Index
Linked,
4/18/22
............
71,154,215
ARS
415,541
675,377
Brazil
2.2%
e
Brazil
Letras
do
Tesouro
Nacional
,
1/01/24
......................
9,510,000
BRL
1,579,788
7/01/24
......................
33,200,000
BRL
5,284,563
6,864,351
Japan
4.0%
e
Japan
Treasury
Bills
,
9/13/21
......................
710,400,000
JPY
6,396,442
12/10/21
.....................
637,600,000
JPY
5,742,643
12,139,085
Mexico
1.0%
e
Mexico
Cetes
,
BI
,
1/13/22
..........
62,063,500
MXN
3,039,121
Total
Foreign
Government
and
Agency
Securities
(Cost
$22,300,029)
..............
22,717,934
Industry
Shares
Money
Market
Funds
20.1%
United
States
20.1%
f,g
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
..........
61,639,248
61,639,248
Total
Money
Market
Funds
(Cost
$61,639,248)
..................................
61,639,248
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$83,939,277
)
................................
84,357,182
a
a
a
a
Total
Investments
(Cost
$319,984,980)
97.6%
...................................
$299,025,564
Options
Written
(0.3)%
.......................................................
(922,346)
Other
Assets,
less
Liabilities
2.7%
.............................................
8,197,397
Net
Assets
100.0%
...........................................................
$306,300,615
a
a
a
a
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
h
Options
Written
(0.3)%
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.20
JPY,
Expires
12/20/21
..
1
3,229,000
AUD
$
(94,866)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
85.74
JPY,
Expires
9/14/21
...
1
8,165,000
AUD
(25,683)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
109.90
JPY,
Expires
8/11/21
.......
1
11,712,000
(163,086)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
21.10
MXN,
Expires
9/03/21
..
1
2,510,000
(14,194)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
21.15
MXN,
Expires
8/20/21
.......
1
1,173,000
(4,545)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.61
MXN,
Expires
10/07/21
.
1
2,478,000
(7,153)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
23.43
MXN,
Expires
8/20/21
.......
1
1,220,000
(449)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
24.62
MXN,
Expires
8/02/21
.......
1
605,000
(30)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
25.33
MXN,
Expires
12/28/21
.
1
1,760,000
(3,717)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
26.61
MXN,
Expires
8/30/21
..
1
1,300,000
(81)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
27.38
MXN,
Expires
8/11/21
..
1
1,301,000
(25)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
27.93
MXN,
Expires
12/07/21
.
1
1,463,000
(884)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
628,000
(4,676)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
628,000
(4,676)
(324,065)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
68.40
JPY,
Expires
12/20/21
..
1
3,229,000
AUD
(2,155)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
July
Strike
Price
75.90
JPY,
Expires
7/15/21
.......
1
3,592,000
AUD
(30)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
78.33
JPY,
Expires
12/14/21
..
1
8,581,000
AUD
(46,908)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
h
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
80.56
JPY,
Expires
9/14/21
...
1
6,124,000
AUD
$
(24,593)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
September
Strike
Price
82.09
JPY,
Expires
9/14/21
...
1
2,720,000
AUD
(19,704)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
95.85
JPY,
Expires
2/23/22
...
1
2,642,000
(1,814)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
98.00
JPY,
Expires
8/11/21
........
1
3,909,000
(11)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.05
MXN,
Expires
10/07/21
.
1
4,297,000
(12,387)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.32
MXN,
Expires
10/07/21
.
1
4,458,000
(22,777)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.71
MXN,
Expires
10/27/21
.
1
2,770,000
(32,295)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
August
Strike
Price
19.86
MXN,
Expires
8/20/21
.......
1
1,829,000
(19,459)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.94
MXN,
Expires
8/30/21
..
1
1,300,000
(63,054)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
21.43
MXN,
Expires
8/11/21
..
1
1,301,000
(93,014)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
2,349,000
(125,628)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
1,257,000
(67,226)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
1,257,000
(67,226)
(598,281)
Total
Options
Written
(Premiums
received
$1,245,948)
...........................
$
(922,346)
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
23
At
June
30,
2021,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Chilean
Peso
......
JPHQ
Buy
114,890,000
158,142
7/01/21
$
—
$
(1,697)
Chilean
Peso
......
JPHQ
Sell
114,890,000
154,941
7/01/21
—
(1,504)
Chilean
Peso
......
GSCO
Buy
140,760,000
194,152
7/02/21
—
(2,480)
Chilean
Peso
......
GSCO
Sell
140,760,000
191,250
7/02/21
—
(422)
Chilean
Peso
......
JPHQ
Buy
226,290,000
312,012
7/02/21
—
(3,875)
Chilean
Peso
......
JPHQ
Sell
226,290,000
305,170
7/02/21
—
(2,967)
Chilean
Peso
......
JPHQ
Buy
394,960,000
549,873
7/06/21
—
(12,117)
Chilean
Peso
......
JPHQ
Sell
394,960,000
536,266
7/06/21
—
(1,490)
Euro
.............
JPHQ
Sell
4,307,285
559,883,302
JPY
7/06/21
—
(67,951)
Japanese
Yen
......
JPHQ
Sell
566,937,773
4,307,285
EUR
7/06/21
4,444
—
Euro
.............
JPHQ
Sell
7,443,875
74,475,000
NOK
7/07/21
—
(177,762)
Norwegian
Krone
...
JPHQ
Sell
74,475,000
7,311,664
EUR
7/07/21
20,962
—
Mexican
Peso
......
CITI
Buy
119,730,000
6,037,152
7/08/21
—
(35,736)
Mexican
Peso
......
CITI
Sell
119,730,000
5,577,070
7/08/21
—
(424,346)
Australian
Dollar
....
HSBK
Sell
1,739,995
145,037,283
JPY
7/12/21
1,038
—
Indian
Rupee
......
HSBK
Buy
53,040,300
707,817
7/12/21
4,586
—
Japanese
Yen
......
HSBK
Sell
148,155,702
1,739,995
AUD
7/12/21
—
(29,113)
Australian
Dollar
....
JPHQ
Sell
4,436,726
364,603,922
JPY
7/13/21
13,432
(57,764)
Japanese
Yen
......
JPHQ
Sell
376,596,985
4,436,726
AUD
7/13/21
—
(63,642)
Chinese
Yuan
......
CITI
Buy
19,192,940
2,941,086
7/14/21
23,678
—
Chilean
Peso
......
GSCO
Buy
260,850,000
361,223
7/15/21
—
(6,151)
Euro
.............
DBAB
Sell
1,911,470
19,538,000
SEK
7/15/21
16,064
—
South
Korean
Won
..
CITI
Buy
1,940,300,000
1,735,976
7/21/21
—
(18,944)
Euro
.............
CITI
Sell
51,283
80,000
CAD
8/03/21
3,668
—
Euro
.............
DBAB
Sell
5,332,389
8,286,000
CAD
8/03/21
355,285
—
Euro
.............
HSBK
Sell
856,770
1,334,500
CAD
8/03/21
59,638
—
Chilean
Peso
......
GSCO
Buy
807,181,557
1,123,630
8/06/21
—
(25,539)
Chilean
Peso
......
GSCO
Buy
140,760,000
191,151
8/09/21
324
—
Australian
Dollar
....
CITI
Sell
336,000
28,380,240
JPY
8/10/21
3,588
—
Japanese
Yen
......
CITI
Sell
28,481,040
336,000
AUD
8/10/21
—
(4,495)
Mexican
Peso
......
CITI
Sell
37,068,500
1,822,121
8/13/21
—
(27,235)
#
Notional
amount
is
the
number
of
units
specified
in
the
contract,
and
can
include
currency
units,
bushels,
shares,
pounds,
barrels
or
other
units.
Currency
units
are
stated
in
U.S.
dollars
unless
otherwise
indicated.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
b
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
13
regarding
fair
value
measurements.
c
The
coupon
rate
shown
represents
the
rate
at
period
end.
d
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
June
30,
2021,
the
aggregate
value
of
these
securities
was
$24,884,155,
representing
8.1%
of
net
assets.
e
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
f
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
g
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
h
See
Note
1(c)
regarding
written
options.
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
Australian
Dollar
....
CITI
Sell
8,607,000
6,736,527
8/16/21
$
281,686
$
—
Australian
Dollar
....
MSCO
Buy
1,500,000
1,134,188
8/16/21
—
(9,259)
Australian
Dollar
....
MSCO
Sell
2,725,000
2,121,876
8/16/21
78,255
—
Chilean
Peso
......
GSCO
Buy
459,371,617
650,539
8/16/21
—
(25,773)
Euro
.............
CITI
Sell
760,000
924,392
8/16/21
22,259
—
Chilean
Peso
......
GSCO
Buy
439,732,455
621,565
8/17/21
—
(23,525)
Chilean
Peso
......
JPHQ
Buy
892,000,000
1,251,478
8/17/21
—
(38,350)
Euro
.............
HSBK
Sell
8,960,904
1,151,306,870
JPY
8/18/21
—
(268,863)
Australian
Dollar
....
CITI
Sell
14,066,090
1,166,092,926
JPY
8/23/21
—
(47,226)
Japanese
Yen
......
CITI
Sell
1,191,777,599
14,066,090
AUD
8/23/21
—
(184,092)
Mexican
Peso
......
CITI
Sell
170,044,000
8,047,621
8/23/21
—
(425,132)
Euro
.............
CITI
Sell
2,449,810
314,362,011
JPY
8/24/21
—
(77,249)
Euro
.............
MSCO
Sell
937,963
1,386,400
CAD
8/25/21
4,638
—
Mexican
Peso
......
JPHQ
Sell
61,493,000
2,900,511
8/31/21
—
(160,373)
Chilean
Peso
......
GSCO
Buy
600,671,157
825,066
9/01/21
—
(8,475)
Mexican
Peso
......
CITI
Sell
68,408,000
3,391,370
9/01/21
—
(13,243)
Indian
Rupee
......
JPHQ
Buy
45,246,500
601,530
9/07/21
1,966
—
Singapore
Dollar
....
SCNY
Buy
17,800,000
13,391,786
9/07/21
—
(155,738)
Singapore
Dollar
....
SCNY
Sell
17,800,000
13,383,761
9/07/21
147,713
—
Indian
Rupee
......
CITI
Buy
43,960,600
584,621
9/08/21
1,648
—
Indian
Rupee
......
JPHQ
Buy
58,526,500
783,152
9/08/21
—
(2,628)
Singapore
Dollar
....
HSBK
Buy
1,617,000
1,216,311
9/08/21
—
(13,913)
Singapore
Dollar
....
HSBK
Sell
1,617,000
1,215,378
9/08/21
12,980
—
Indian
Rupee
......
CITI
Buy
52,990,400
714,976
9/09/21
—
(8,375)
Chinese
Yuan
......
BOFA
Buy
3,535,710
550,455
9/10/21
—
(6,580)
Chinese
Yuan
......
CITI
Buy
42,610,910
6,633,207
9/10/21
—
(78,650)
Chinese
Yuan
......
BOFA
Buy
33,049,780
5,137,538
9/13/21
—
(54,836)
Indian
Rupee
......
HSBK
Buy
53,188,700
720,304
9/13/21
—
(11,426)
Chilean
Peso
......
GSCO
Buy
811,967,057
1,118,882
9/15/21
—
(15,530)
Euro
.............
DBAB
Sell
1,053,299
10,839,500
SEK
9/15/21
16,512
—
Euro
.............
DBAB
Sell
1,057,244
11,382,500
NOK
9/15/21
67,148
—
Mexican
Peso
......
MSCO
Sell
76,047,100
3,828,581
9/15/21
51,131
—
Euro
.............
DBAB
Sell
2,403,033
24,422,505
SEK
9/16/21
1,723
—
New
Zealand
Dollar
.
BOFA
Buy
1,420,000
1,006,798
9/21/21
—
(14,620)
Singapore
Dollar
....
CITI
Buy
3,100,000
2,309,039
9/22/21
—
(3,893)
Chilean
Peso
......
JPHQ
Buy
456,800,000
615,451
9/24/21
5,100
—
Chilean
Peso
......
GSCO
Buy
118,230,000
161,164
9/29/21
—
(577)
Euro
.............
CITI
Sell
1,389,251
183,924,321
JPY
9/29/21
6,383
—
Chilean
Peso
......
JPHQ
Buy
735,900,000
1,028,212
9/30/21
—
(28,701)
Euro
.............
JPHQ
Sell
7,374,347
74,475,000
NOK
9/30/21
—
(105,849)
Euro
.............
JPHQ
Sell
4,307,285
567,506,335
JPY
10/01/21
—
(5,005)
Euro
.............
JPHQ
Sell
7,301,156
74,475,000
NOK
10/01/21
—
(19,186)
Mexican
Peso
......
CITI
Sell
59,865,000
2,986,381
10/01/21
19,358
—
Chilean
Peso
......
JPHQ
Buy
394,960,000
535,546
10/04/21
817
—
Chinese
Yuan
......
HSBK
Buy
20,781,470
3,126,514
10/15/21
62,222
—
Euro
.............
DBAB
Sell
1,444,121
14,653,500
SEK
10/18/21
—
(2,337)
Euro
.............
DBAB
Sell
1,443,680
14,653,500
SEK
10/19/21
—
(1,832)
Euro
.............
CITI
Sell
1,550,000
1,860,372
10/21/21
17,753
—
Euro
.............
CITI
Buy
1,410,000
1,687,103
10/22/21
—
(10,873)
Euro
.............
CITI
Sell
6,330,000
7,650,691
10/22/21
125,490
—
Euro
.............
HSBK
Sell
3,273,700
412,993,682
JPY
10/25/21
—
(169,953)
Euro
.............
CITI
Sell
3,275,000
3,957,641
10/26/21
63,889
—
Mexican
Peso
......
CITI
Sell
59,865,000
2,973,624
11/01/21
19,547
—
Euro
.............
BOFA
Sell
3,170,020
4,951,000
CAD
11/02/21
224,022
—
Euro
.............
HSBK
Sell
1,199,072
1,871,500
CAD
11/02/21
83,741
—
Indian
Rupee
......
CITI
Buy
32,885,300
431,736
11/10/21
3,368
—
Australian
Dollar
....
HSBK
Sell
8,612,726
6,662,374
11/17/21
200,585
—
Templeton
Income
Trust
Statement
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
25
See
Note 
11
 regarding
other
derivative
information.
See
Abbreviations
on
page
44
.
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
Euro
.............
DBAB
Sell
727,326
7,405,998
SEK
11/17/21
$
1,552
$
—
Euro
.............
HSBK
Sell
760,000
921,713
11/17/21
17,638
—
Australian
Dollar
....
JPHQ
Sell
8,596,000
6,639,834
11/18/21
190,563
—
Euro
.............
CITI
Sell
760,000
921,033
11/18/21
16,936
—
Chinese
Yuan
......
JPHQ
Buy
14,438,800
2,213,230
11/22/21
—
(3,368)
Euro
.............
GSCO
Sell
745,929
1,100,600
CAD
11/22/21
374
—
Chinese
Yuan
......
JPHQ
Buy
16,352,720
2,529,345
12/10/21
—
(29,587)
Chinese
Yuan
......
JPHQ
Buy
28,919,280
4,471,447
12/13/21
—
(51,595)
Euro
.............
DBAB
Sell
3,875,088
39,076,002
SEK
12/13/21
—
(37,809)
Mexican
Peso
......
BAST
Sell
55,890,511
2,772,484
12/14/21
31,296
—
Chinese
Yuan
......
HSBK
Buy
20,917,510
3,232,550
12/15/21
—
(36,072)
Euro
.............
DBAB
Sell
5,139,724
52,002,696
SEK
12/16/21
—
(29,957)
Euro
.............
JPHQ
Sell
414,220
4,190,000
SEK
12/17/21
—
(2,536)
Indian
Rupee
......
JPHQ
Buy
26,300,000
350,368
12/20/21
—
(4,120)
New
Zealand
Dollar
.
JPHQ
Buy
4,670,000
3,331,396
12/20/21
—
(69,943)
New
Zealand
Dollar
.
CITI
Buy
1,670,000
1,183,446
12/21/21
—
(17,151)
New
Zealand
Dollar
.
JPHQ
Buy
1,670,000
1,180,675
12/21/21
—
(14,380)
Chilean
Peso
......
GSCO
Buy
475,420,000
642,547
12/23/21
2,513
(1,312)
Indian
Rupee
......
JPHQ
Buy
45,118,800
584,516
1/27/22
6,506
—
Indian
Rupee
......
SCNY
Buy
180,900,000
2,359,463
3/22/22
—
(7,093)
Euro
.............
DBAB
Sell
1,070,751
10,826,900
SEK
6/15/22
—
(10,143)
Euro
.............
DBAB
Sell
265,293
2,701,400
NOK
6/16/22
—
(4,165)
Euro
.............
DBAB
Sell
1,532,338
15,689,000
NOK
6/20/22
—
(14,428)
Euro
.............
CITI
Sell
1,377,485
14,183,000
NOK
6/21/22
—
(3,831)
Total
Forward
Exchange
Contracts
...................................................
$2,294,019
$(3,294,782)
Net
unrealized
appreciation
(depreciation)
............................................
$(1,000,763)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
Templeton
International
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$258,345,732
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
61,639,248
Value
-
Unaffiliated
issuers
..................................................................
$237,386,316
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
61,639,248
Cash
....................................................................................
59,978
Restricted
currency,
at
value
(cost
$434)
(Note
1d)
..................................................
434
Foreign
currency,
at
value
(cost
$4,769,538)
......................................................
4,771,033
Receivables:
Capital
shares
sold
........................................................................
552,258
Interest
.................................................................................
2,374,686
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
2,220,000
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
2,294,019
Total
assets
..........................................................................
311,297,972
Liabilities:
Payables:
Capital
shares
redeemed
...................................................................
186,279
Management
fees
.........................................................................
115,145
Distribution
fees
..........................................................................
5,704
Transfer
agent
fees
........................................................................
286,758
Deposits
from
brokers
for:
OTC
derivative
contracts
..................................................................
50,000
Options
written,
at
value
(premiums
received
$1,245,948)
............................................
922,346
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
3,294,782
Deferred
tax
...............................................................................
47,169
Accrued
expenses
and
other
liabilities
...........................................................
89,174
Total
liabilities
.........................................................................
4,997,357
Net
assets,
at
value
.................................................................
$306,300,615
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$370,717,094
Total
distributable
earnings
(losses)
.............................................................
(64,416,479)
Net
assets,
at
value
.................................................................
$306,300,615
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
27
Templeton
International
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$19,869,549
Shares
outstanding
........................................................................
2,309,250
Net
asset
value
per
share
a
..................................................................
$8.60
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$8.94
Class
C:
Net
assets,
at
value
.......................................................................
$2,777,402
Shares
outstanding
........................................................................
322,334
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$8.62
Class
R:
Net
assets,
at
value
.......................................................................
$102,870
Shares
outstanding
........................................................................
11,958
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$8.60
Class
R6:
Net
assets,
at
value
.......................................................................
$999,238
Shares
outstanding
........................................................................
116,094
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$8.61
Advisor
Class:
Net
assets,
at
value
.......................................................................
$282,551,556
Shares
outstanding
........................................................................
32,805,552
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$8.61
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
Templeton
International
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$2,049
Interest:
(net
of
foreign
taxes
of
$118,779)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
1,091,029
Paid
in
cash
a
...........................................................................
4,615,381
Total
investment
income
...................................................................
5,708,459
Expenses:
Management
fees
(Note
3
a
)
...................................................................
1,125,932
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
25,527
    Class
C
................................................................................
10,164
    Class
R
................................................................................
294
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
19,917
    Class
C
................................................................................
3,044
    Class
R
................................................................................
114
    Class
R6
...............................................................................
5,061
    Advisor
Class
............................................................................
272,128
Custodian
fees
(Note
4
)
......................................................................
39,409
Reports
to
shareholders
......................................................................
25,067
Registration
and
filing
fees
....................................................................
38,809
Professional
fees
...........................................................................
46,604
Trustees'
fees
and
expenses
..................................................................
4,796
Other
....................................................................................
15,317
Total
expenses
.........................................................................
1,632,183
Expense
reductions
(Note
4
)
...............................................................
(2,794)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(384,206)
Net
expenses
.........................................................................
1,245,183
Net
investment
income
................................................................
4,463,276
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$9,145)
Unaffiliated
issuers
......................................................................
(4,938,311)
Written
options
...........................................................................
(128,674)
Foreign
currency
transactions
................................................................
306,772
Forward
exchange
contracts
.................................................................
(12,581,901)
Net
realized
gain
(loss)
..................................................................
(17,342,114)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(8,653,250)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(83,190)
Written
options
...........................................................................
315,123
Forward
exchange
contracts
.................................................................
10,803,940
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
31,770
Net
change
in
unrealized
appreciation
(depreciation)
............................................
2,414,393
Net
realized
and
unrealized
gain
(loss)
............................................................
(14,927,721)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(10,464,445)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
29
Templeton
International
Bond
Fund
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$4,463,276
$8,936,077
Net
realized
gain
(loss)
.................................................
(17,342,114)
(40,317,273)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
2,414,393
8,387,387
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(10,464,445)
(22,993,809)
Distributions
to
shareholders:
Class
A
.............................................................
(303,026)
(7,709)
Class
C
.............................................................
(38,996)
(1,269)
Class
R
.............................................................
(1,521)
(55)
Class
R6
............................................................
(470,780)
(6,250)
Advisor
Class
........................................................
(4,492,741)
(115,519)
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(584,021)
Class
C
.............................................................
—
(96,112)
Class
R
.............................................................
—
(4,195)
Class
R6
............................................................
—
(473,513)
Advisor
Class
........................................................
—
(8,751,774)
Total
distributions
to
shareholders
..........................................
(5,307,064)
(10,040,417)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(1,626,614)
(14,984,775)
Class
C
.............................................................
(616,756)
(2,707,500)
Class
R
.............................................................
(29,514)
(96,363)
Class
R6
............................................................
(44,879,485)
44,431,591
Advisor
Class
........................................................
10,816,387
(79,432,266)
Total
capital
share
transactions
............................................
(36,335,982)
(52,789,313)
Net
increase
(decrease)
in
net
assets
...................................
(52,107,491)
(85,823,539)
Net
assets:
Beginning
of
period
.....................................................
358,408,106
444,231,645
End
of
period
..........................................................
$306,300,615
$358,408,106
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
Templeton
International
Bond
Fund
30
franklintempleton.com
Semiannual
Report
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds,
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
International
Bond
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
after
they
have
been
held
for
10
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 Fund's
administrator
has
responsibility
for
oversight
of
valuation,
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. 
Debt
securities
generally
trade
in
the over-the-counter
(OTC)
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
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,
book
values,
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.
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
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
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.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
terms
are
contract
specific
for
OTC
derivatives.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of
the
agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund,
if
any,
is
held
in
segregated
accounts
with
the
Fund’s
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
1.
Organization
and
Significant
Accounting
Policies
(continued)
b.
Foreign
Currency
Translation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
The
Fund
purchased
or
wrote
OTC
option
contracts
primarily
to
manage
and/or
gain
exposure
to
foreign
exchange
rate
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.
See
Note
11
regarding
other
derivative
information.
d.
Restricted
Currency
At
June
30,
2021,
the
Fund
held
currencies
in
certain
markets
in
which
the
ability
to
repatriate
such
currency
is
limited.
As
a
result
of
such
limitations
on
repatriation,
the
Fund
may
incur
substantial
delays
in
gaining
access
to
these
assets
and
may
be
exposed
to
potential
adverse
movements
in
currency
value.
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.
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
June
30,
2021,
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
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date.
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
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
33
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
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
June
30,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Six
Months
Ended
June
30,
2021
Year
Ended
December
31,
2020
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
237,414
$2,085,010
623,127
$5,709,090
Shares
issued
in
reinvestment
of
distributions
..........
33,022
288,860
60,786
568,481
Shares
redeemed
...............................
(453,259)
(4,000,484)
(2,237,883)
(21,262,346)
Net
increase
(decrease)
..........................
(182,823)
$(1,626,614)
(1,553,970)
$(14,984,775)
Class
C
Shares:
Shares
sold
...................................
8,658
$75,477
51,910
$486,685
Shares
issued
in
reinvestment
of
distributions
..........
4,247
37,209
9,259
86,820
Shares
redeemed
a
..............................
(83,045)
(729,442)
(353,148)
(3,281,005)
Net
increase
(decrease)
..........................
(70,140)
$(616,756)
(291,979)
$(2,707,500)
Class
R
Shares:
Shares
sold
...................................
1,305
$11,490
7,870
$73,492
Shares
issued
in
reinvestment
of
distributions
..........
174
1,521
455
4,250
Shares
redeemed
...............................
(4,872)
(42,525)
(18,954)
(174,105)
Net
increase
(decrease)
..........................
(3,393)
$(29,514)
(10,629)
$(96,363)
1.
Organization
and
Significant
Accounting
Policies
(continued)
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
34
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
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
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
June
30,
2021,
the
annualized
gross
effective
investment
management
fee
rate
was
0.682%
of
the
Fund’s
average
daily
net
assets. 
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
Six
Months
Ended
June
30,
2021
Year
Ended
December
31,
2020
Shares
Amount
Shares
Amount
Class
R6
Shares:
Shares
sold
...................................
389,525
$3,432,315
5,280,144
$48,122,104
Shares
issued
in
reinvestment
of
distributions
..........
53,102
466,990
51,999
471,073
Shares
redeemed
...............................
(5,614,550)
(48,778,790)
(440,933)
(4,161,586)
Net
increase
(decrease)
..........................
(5,171,923)
$(44,879,485)
4,891,210
$44,431,591
Advisor
Class
Shares:
Shares
sold
...................................
3,496,495
$30,661,612
10,498,840
$97,278,176
Shares
issued
in
reinvestment
of
distributions
..........
507,334
4,439,774
867,079
8,090,374
Shares
redeemed
...............................
(2,754,264)
(24,284,999)
(20,086,196)
(184,800,816)
Net
increase
(decrease)
..........................
1,249,565
$10,816,387
(8,720,277)
$(79,432,266)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.700%
Up
to
and
including
$200
million
0.650%
Over
$200
million,
up
to
and
including
$1.3
billion
0.600%
In
excess
of
$1.3
billion
2.
Shares
of
Beneficial
Interest
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
35
franklintempleton.com
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Report
Templeton
International
Bond
Fund
(continued)
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:
The
Board
has
set
the
current
rate
at
0.25%
per
year
for
Class
A
shares
until
further
notice
and
approval
by
the
Board.
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.
The
fees
are
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
June
30,
2021,
the
Fund
paid
transfer
agent
fees
of
$300,264,
of
which $59,729
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
June
30,
2021,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
Class
A
....................................................................................
0.35%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$276
CDSC
retained
..............................................................................
$52
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
36
franklintempleton.com
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Report
Templeton
International
Bond
Fund
(continued)
g.
Waiver
and
Expense
Reimbursements
Advisers
and
Investor
Services
have
contractually
agreed
in
advance
to
waive
or
limit
their
respective
fees
and
to
assume
as
their
own
expense
certain
expenses
otherwise
payable
by
the
Fund
so
that
the
operating expenses
(excluding
distribution
fees,
and
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
0.74%
based
on
the
average
net
assets
of
each
class
until
April
30,
2022.
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
April
30,
2022.
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
June
30,
2021,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations. 
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2020,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$8,234,818.
    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
Bond
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.......
$110,460,274
$92,287,757
$(141,108,783)
$—
$—
$61,639,248
61,639,248
$2,049
Total
Affiliated
Securities
....
$110,460,274
$92,287,757
$(141,108,783)
$—
$—
$61,639,248
$2,049
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$873,814
Long
term
................................................................................
16,517,393
Total
capital
loss
carryforwards
...............................................................
$17,391,207
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
37
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
At
June
30,
2021,
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,
foreign
capital
gains
tax,
bond
discounts
and
premiums,
tax
straddles,
inflation
related
adjustments
on
foreign
securities
and
options.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2021,
aggregated
$98,143,308
and
$88,737,759,
respectively.
7.
Shareholder
Concentrations
The
Fund
has
a
concentration
of
a
shareholder
holding
a
significant
percentage
of
shares
outstanding.
Investment
activities
of
the
shareholder
could
have
a
material
impact
on
the
Fund.
At
June
30,
2021,
there
was
one
unaffiliated
shareholder
holding
76.9%
of
the
Fund's
outstanding
shares.
8.
Credit
Risk
At
June
30,
2021,
the
Fund
had
10.1%
of
its
portfolio
invested
in
high
yield
or
other
securities
rated
below
investment
grade
and
unrated
securities,
if
any.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
9.
Concentration
of
Risk
Investments
in
issuers
domiciled
or
with
significant
operations
in
developing
or
emerging
market
countries
may
be
subject
to
higher
risks
than
investments
in
developed
countries.
These
risks
include
fluctuating
currency
values,
underdeveloped
legal
or
business
systems,
and
changing
local
and
regional
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Currencies
of
developing
or
emerging
market
countries
may
be
subject
to
significantly
greater
risks
than
currencies
of
developed
countries,
including
the
potential
inability
to
repatriate
those
currencies
into
U.S.
dollars.
At
June
30,
2021,
the
Fund
had
2.1%
of
its
net
assets
denominated
in
Argentine
Pesos. Argentina
has
restricted
currency
repatriation
since
September
2019,
and
had
restructured
certain
issues
of
its
debt.
Political
and
economic
conditions
in
Argentina
could
continue
to
affect
the
value
of
the
Fund's
holdings.
Cost
of
investments
..........................................................................
$318,020,242
Unrealized
appreciation
........................................................................
$22,034,494
Unrealized
depreciation
........................................................................
(42,952,282)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(20,917,788)
5.
Income
Taxes
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
38
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
10.
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.
11.
Other
Derivative
Information
At
June
30,
2021,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
For
the
period
ended
June
30,
2021,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
June
30,
2021,
the
average
month
end
notional
amount
of
options
represented
$251,777,973.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$458,549,740.
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
International
Bond
Fund
Foreign
exchange
contracts
..
Investments
in
securities,
at
value
$
839,939
a
Options
written,
at
value
$
922,346
Unrealized
appreciation
on
OTC
forward
exchange
contracts
2,294,019
Unrealized
depreciation
on
OTC
forward
exchange
contracts
3,294,782
Total
....................
$3,133,958
$4,217,128
a
Purchased
option
contracts
are
included
in
investments
in
securities,
at
value
in
the
Statement
of
Assets
and
Liabilities.
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
International
Bond
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Foreign
exchange
contracts
.....
Investments
$(1,886,029)
a
Investments
$514,857
a
Written
options
(128,674)
Written
options
315,123
Forward
exchange
contracts
(12,581,901)
Forward
exchange
contracts
10,803,940
Total
.......................
$(14,596,604)
$11,633,920
a
Purchased
option
contracts
are
included
in
net
realized
gain
(loss)
from
investments
and
net
change
in
unrealized
appreciation
(depreciation)
on
investments
in
the
Statement
of
Operations.
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
39
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
At
June
30,
2021,
the
Fund's
OTC
derivative
assets
and
liabilities
are
as
follows:
At
June
30,
2021,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
International
Bond
Fund
Derivatives
Forward
exchange
contracts
.............................
$
2,294,019
$
3,294,782
Options
purchased
.....................................
839,939
—
Options
written
........................................
—
922,346
Total
.............................................
$3,133,958
$4,217,128
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
a,b
Cash
Collateral
Received
Net
Amount
(Not
less
than
zero)
Templeton
International
Bond
Fund
Counterparty
BAST
....................
$31,296
$—
$—
$—
$31,296
BOFA
....................
224,022
(76,036)
(147,986)
—
—
CITI
.....................
1,336,569
(1,336,569)
—
—
—
DBAB
...................
458,284
(100,671)
(357,613)
—
—
GSCO
...................
3,211
(3,211)
—
—
—
HSBK
...................
442,428
(442,428)
—
—
—
JPHQ
...................
243,790
(243,790)
—
—
—
MSCO
...................
246,645
(165,433)
—
(50,000)
31,212
SCNY
...................
147,713
(147,713)
—
—
—
Total
...................
$3,133,958
$(2,515,851)
$
(505,599)
$(50,000)
$62,508
$
1
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
40
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
At
June
30,
2021,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
44
.
12.
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
4,
2022.
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
June
30,
2021,
the Fund
did
not
use
the
Global
Credit
Facility.
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
Cash
Collateral
Pledged
b
Net
Amount
(Not
less
than
zero)
Templeton
International
Bond
Fund
Counterparty
BAST
....................
$—
$—
$—
$—
$—
BOFA
....................
76,036
(76,036)
—
—
—
CITI
.....................
2,146,643
(1,336,569)
—
(810,074)
—
DBAB
...................
100,671
(100,671)
—
—
—
GSCO
...................
109,784
(3,211)
—
—
106,573
HSBK
...................
529,340
(442,428)
—
—
86,912
JPHQ
...................
926,390
(243,790)
—
(682,600)
—
MSCO
...................
165,433
(165,433)
—
—
—
SCNY
...................
162,831
(147,713)
—
—
15,118
Total
...................
$4,217,128
$(2,515,851)
$—
$(1,492,674)
$208,603
a
At
June
30,
2021
the
Fund
received
U.S.
Treasury
Bills,
Bonds
and
Notes
as
collateral
for
derivatives.
b
In
some
instances,
the
collateral
amounts
disclosed
in
the
table
above
were
adjusted
due
to
the
requirement
to
limit
collateral
amounts
to
avoid
the
effect
of
overcollateralization.
Actual
collateral
received
and/or
pledged
may
be
more
than
the
amounts
disclosed
herein.
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
41
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
13.
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
June
30,
2021,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
period.
At
June
30,
2021,
the
reconciliation
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
International
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
............................
$
—
$
—
$
5,612,976
$
5,612,976
Australia
.............................
—
13,268,381
—
13,268,381
Brazil
...............................
—
2,992,851
—
2,992,851
Colombia
............................
—
11,864,223
—
11,864,223
Ghana
..............................
—
13,069,201
—
13,069,201
India
................................
—
13,385,864
—
13,385,864
Indonesia
............................
—
30,850,523
—
30,850,523
Mexico
..............................
—
34,092,252
—
34,092,252
Norway
..............................
—
11,615,774
—
11,615,774
Singapore
............................
—
13,431,634
—
13,431,634
South
Korea
..........................
—
63,644,764
—
63,644,764
Options
purchased
.......................
—
839,939
—
839,939
Short
Term
Investments
...................
61,639,248
22,042,557
675,377
84,357,182
Total
Investments
in
Securities
...........
$61,639,248
$231,097,963
$6,288,353
$299,025,564
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
2,294,019
$
—
$
2,294,019
Restricted
Currency
(ARS)
.................
—
—
434
434
Total
Other
Financial
Instruments
.........
$—
$2,294,019
$434
$2,294,453
Receivables:
Interest
(ARS)
...........................
$—
$—
$107,288
$107,288
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
922,346
$
—
$
922,346
Forward
exchange
contracts
................
—
3,294,782
—
3,294,782
Total
Other
Financial
Instruments
.........
$—
$4,217,128
$—
$4,217,128
Payables:
Deferred
Tax(ARS)
.......................
$—
$—
$98
$98
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
42
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
Significant
unobservable
valuation
inputs
for
material
Level
3 assets
and/or
liabilities and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
June
30,
2021,
are
as
follows:
Balance
at
Beginning
of
Period
Purchases
a
Sales
b
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(
Amortiza
-
tion
)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
International
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
.....
$
5,206,443
$
1,274,702
$
(337,849)
$
—
$
—
$
224,975
$
(89,188)
$
(666,107)
$
5,612,976
$
(562,467)
Short
Term
Investments
...
385,343
685,599
(288,490)
—
—
4,388
(27,436)
(84,027)
675,377
(78,485)
Total
Investments
in
Securities
........
$5,591,786
$1,960,301
$(626,339)
$—
$—
$229,363
$(116,624)
$(750,134)
$6,288,353
$(640,952)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
.......
$408
$2,516,199
$(2,494,522)
$—
$—
$—
$(21,656)
$5
$434
$—
Receivables:
Interest
(ARS)
..
$113,485
$1,346,893
$(1,340,726)
$—
$—
$—
$(1,865)
$(10,499)
$107,288
$(4,727)
Liabilities:
Payables:
Deferred
Tax
(ARS)
$116
$—
$—
$—
$—
$—
$—
$(18)
$98
$(18)
Investment
Securities
Purchased
(ARS)
$59,932
$—
$(60,434)
$—
$—
$—
$502
$—
$—
$—
a
Purchases
include
all
purchases
of
securities
and
securities
received
in
corporate
actions.
b
Sales
include
all
sales
of
securities,
maturities,
paydowns
and
securities
tendered
in
corporate
actions.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
43
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
14.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
and
2023. The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements. 
15.
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,
except
for
the
following:
On
July
14,
2021,
the
Board
approved
a
change
to
the
automatic
conversion
feature
for
Class
C
that
will
convert
shareholders’
Class
C
shares
into
Class
A
shares
after
they
have
been
held
for
8
years.
The
change
will
become
effective
August
2,
2021.
Further
details
are
disclosed
in
the
Fund’s
Prospectus.
Description
Fair
Value
at
End
of
Period
Valuation
Technique
Unobservable
Inputs
Amount/Range
(Weighted
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
International
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Argentina
...........
$5,612,976
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
b
Short
Term
Investments:
Argentina
...........
675,377
Market
comparables
Implied
foreign
exchange
rate
169.8
ARS/USD
Decrease
c
All
Other
............
107,722
d
Liabilities:
All
Other
............
98
d
Total
...............
$6,395,977
a
Represents
the
directional
change
in
the
fair
value
of
the
Level
3
financial
instruments
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
impacts,
if
any,
to
fair
value
and/or
net
assets
have
been
indicated.
b
Represents
a
significant
impact
to
fair
value
and
net
assets.
c
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
d
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
44
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
Abbreviations
Counterparty
BAST
Banco
Santander
SA
BOFA
Bank
of
America
Corp.
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
SCNY
Standard
Chartered
Bank
Selected
Portfolio
BADLAR
Argentina
Deposit
Rates
Badlar
Private
Banks
ARS
CER
Reference
Stabilization
Coefficient
FRN
Floating
Rate
Note
Cu
r
rency
ARS
Argentine
Peso
AUD
Australian
Dollar
CAD
Canadian
Dollar
BRL
Brazilian
Real
COP
Colombian
Peso
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
SGD
Singapore
Dollar
USD
United
States
Dollar
Templeton
Income
Trust
Tax
Information
(unaudited)
45
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
Under
Section
853
of
the
Internal
Revenue
Code,
the
Fund
intends
to
elect
to
pass
through
to
its
shareholders
$531,243
of
foreign
taxes
paid
and
$8,952,760
of
foreign
source
income
earned
by
the
fund,
or
amounts
as
finally
determined,
during
the
fis
cal
year
ended
December
31,
202
0
.
Templeton
Income
Trust
Shareholder
Information
46
franklintempleton.com
Semiannual
Report
Board
Approval
of
Investment
Management
Agreements
TEMPLETON
INCOME
TRUST
Templeton
International
Bond
Fund
(Fund)
At
a
meeting
held
on
February
23,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Trust,
on
behalf
of
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
telephonic
contract
renewal
meeting
at
which
the
Independent
Trustees
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters
and,
in
some
cases,
requested
additional
information
from
the
Manager
relating
to
the
contract.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
in
the
current
work-from-home
environment
and
liquidity
risk
management.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
and
growth
opportunities,
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as
evidenced
by
its
recent
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2020.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
international
income
funds.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-,
five-
and
10-year
periods
was
above
the
median
of
its
Performance
Universe.
The
Board
further
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
median
and
in
the
fifth
quintile
(worst)
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
during
the
reporting
periods,
management
largely
positioned
the
Fund’s
strategies
for
rising
rates
by
maintaining
low
portfolio
duration
in
the
US,
Europe
and,
at
times,
Japan,
and
aiming
at
a
negative
correlation
with
US
Treasury
returns.
Management
further
explained
that
the
Fund’s
underweight
position
of
developed
market
duration
exposures
was
a
headwind
to
performance
against
peers.
Management
also
explained
that
the
Fund’s
over-weighted
currency
exposures
in
Latin
America,
exposure
to
Argentina
and
underweight
positions
in
the
Australian
dollar
(and,
in
2020,
the
Euro)
were
also
sources
of
underperformance.
Management
further
explained
that
the
Fund
is
managed,
and
marketed,
as
a
benchmark-
agnostic
strategy
and,
as
such,
can
be
difficult
to
compare
to
other
fixed
income
funds.
Management
noted,
however,
that
the
Fund’s
defensive
positioning
served
to
protect
the
Fund
during
recent
short-term
periods
of
market
stress.
Management
discussed
with
the
Board
recent
adjustments
being
made
to
the
Fund’s
portfolio
positions
in
light
of
current
market
conditions.
The
Board
noted
management’s
continued
confidence
in
the
Fund’s
portfolio
management
team,
investment
process
and
long-term
prospects
for
the
Fund,
and
that
management
has
continued
to
add
resources
to
the
portfolio
management
team
as
needed
and
that
the
sources
of
analysis
and
input
have
continued
to
expand.
The
Board
also
noted
the
Fund’s
first
(best)
and
second
annualized
income
return
compared
to
that
of
its
Performance
Universe
for
each
period.
Based
on
the
foregoing,
the
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
eight
other
international
income
funds.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
the
Fund
were
below
the
medians
of
its
Expense
Group.
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Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
In
doing
so,
the
Board
noted
that
the
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2020,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
further
noted
management’s
representation
that
the
profitability
analysis
excluded
the
impact
of
the
recent
acquisition
of
the
Legg
Mason
companies
and
that
management
expects
to
incorporate
the
legacy
Legg
Mason
companies
into
the
profitability
analysis
beginning
next
year.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
the
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program-
Funds
no
HLIM
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
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(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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
as
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
Templeton
Income
Trust
Shareholder
Information
50
franklintempleton.com
Semiannual
Report
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.
447
S
08/21
©
2021
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
Bond
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
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-CSRS, 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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
 
 
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
 
 
 
 
 
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 INCOME TRUST
 
 
 
By S\Matthew T. Hinkle__________________________
     Matthew T. Hinkle
     Chief Executive Officer - Finance and Administration
Date August 25, 2021
 
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 August 25, 2021
 
 
By S\Robert G. Kubilis_______________________________
     Robert G. Kubilis
     Chief Financial Officer and Chief Accounting Officer
Date August 25, 2021