UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
811-07851
Franklin Fund Allocator Series
(Exact name of registrant as specified in charter)
One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
Alison Baur, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant's telephone number, including area code:(650)312-2000
Date of fiscal year end: 7/31
Date of reporting period: 7/31/22
Explanatory Note:
The Registrant is filing this amendment to its Form N-CSR for the period ended July 31, 2022, originally filed with the Securities and Exchange Commission on September 28, 2022 (Accession Number 0001868420-22-000179), for the purpose of refiling certifications required by Item 13(a)(2) to clarify that they relate to the period covered by the report. Except as set forth above, no other changes have been made to the Form N-CSR, and this amended filing does not amend, update or change any other items or disclosure found in the Form N-CSR.
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
.
1
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Economic
and
Market
Overview
Global
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
World
Index-NR
(net
of
tax
withholding
when
dividends
are
paid),
posted
a
-10.48%
total
return
for
the
12
months
ended
July
31,
2022.
1
Although
global
equities
benefited
earlier
in
the
period
from
ongoing
COVID-19
vaccination
programs
and
some
easing
of
restrictions,
the
combination
of
resilient
consumer
demand
and
persistent
supply
chain
disruptions
contributed
to
higher
inflation
in
many
countries.
This
inflationary
pressure
led
many
of
the
world’s
central
banks
to
adopt
less
accommodative
stances
regarding
monetary
policy
in
2022,
hindering
stocks.
The
Chinese
government’s
imposition
of
new
lockdowns
to
quell
the
spread
of
the
Omicron
variant
of
COVID-19
also
pressured
emerging
market
stocks,
especially
in
Asia.
Russia’s
invasion
of
Ukraine
also
increased
investor
uncertainty,
as
international
sanctions
on
Russia
disrupted
global
trade
and
commodity
markets.
In
the
U.S.,
after
robust
growth
earlier
in
the
period,
gross
domestic
product
(GDP)
slightly
contracted
in
the
first
two
quarters
of
2022
as
high
inflation,
supply
constraints
and
record
trade
deficits
weighed
on
economic
output.
Rising
prices
precipitated
a
notable
decline
in
consumer
confidence,
despite
high
spending
levels,
robust
job
growth
and
low
unemployment.
In
an
effort
to
control
inflation,
the
U.S.
Federal
Reserve
(Fed)
raised
the
federal
funds
target
rate
in
March
2022
for
the
first
time
since
2018.
The
Fed
raised
the
federal
funds
rate
again
at
its
subsequent
three
meetings
to
end
the
period
at
a
range
of
2.25%–2.50%.
Furthermore,
the
Fed
said
it
would
continue
to
reduce
its
bond
holdings
and
anticipated
additional
interest-rate
increases
at
future
meetings
to
curtail
inflation.
Economies
in
the
eurozone
decelerated
to
a
slightly
positive
growth
rate
during
the
year.
The
lifting
of
COVID-related
restrictions
in
some
European
countries
and
the
summer
tourism
season
strengthened
economies.
However,
the
war
in
Ukraine
disrupted
supply
chains,
weakened
the
economic
outlook
and
contributed
to
record
high
inflation
across
the
eurozone,
as
energy
prices
soared.
Electricity
prices
hit
record
highs
in
Germany
and
France
as
coal
futures
and
natural
gas
prices
climbed.
Consequently,
the
European
Central
Bank
raised
interest
rates
in
July
2022
for
the
first
time
in
11
years
to
curtail
growing
inflation.
In
this
environment,
European
developed
market
equities,
as
measured
by
the
MSCI
Europe
Index-NR,
posted
a
-15.10%
total
return
for
the
12
months
under
review.
1
Asian
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
Asia
Index-NR,
posted
a
-17.94%
total
return
for
the
12-month
period.
1
Growth
in
Japan
remained
slow,
alternating
between
positive
quarterly
GDP
growth
and
contraction.
China’s
economy
contracted
sharply
in
2022’s
second
quarter
as
COVID-
related
restrictions
in
many
major
cities,
including
Shanghai,
weakened
consumer
demand.
Unexpected
regulatory
changes
by
the
Chinese
government,
which
negatively
impacted
education-
and
technology-related
businesses,
and
investor
concerns
about
the
solvency
of
several
large
Chinese
property
developers
further
pressured
Chinese
stocks.
Global
emerging
market
stocks,
as
measured
by
the
MSCI
Emerging
Markets
Index-NR,
posted
a
-20.09%
total
return
for
the
12
months
under
review.
1
The
index
declined
for
four
straight
quarters,
the
longest
downturn
since
2008,
weakened
by
central
bank
tightening
and
the
threat
of
recession.
Following
Russia’s
invasion
of
Ukraine,
climbing
food
and
energy
prices
kindled
inflationary
pressures
and
raised
concerns
over
the
possibility
of
government
debt
defaults
in
some
countries.
However,
some
countries,
particularly
in
Latin
America,
as
well
as
South
Africa
and
Saudi
Arabia,
benefited
from
rising
commodity
prices.
The
foregoing
information
reflects
our
analysis
and
opinions
as
of
July
31,
2022.
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.
2
franklintempleton.com
Annual
Report
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
This
annual
report
for
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
covers
the
fiscal
year
ended
July
31,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
capital
appreciation.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
equity
securities
of
issuers
located
in
“emerging
market
countries,”
as
defined
in
the
Fund’s
prospectus.
The
Fund
may
invest
in
equity
securities
of
any
capitalization
and
primarily
invests
in
common
stock
but
may
also
invest
in
depositary
receipts.
The
Fund's
investable
universe
typically
includes
equity
securities
of
companies
in
the
MSCI
Emerging
Markets
(EM)
Index.
Performance
Overview
The
Fund
posted
a
-19.15%
cumulative
total
return
for
the
12
months
ended
July
31,
2022.
In
comparison,
the
MSCI
EM
Index,
which
measures
the
performance
of
global
emerging
market
stocks,
posted
a
-19.77%
cumulative
total
return
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
4
.
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.
Investment
Strategy
The
Fund
invests
in
both
growth
and
value
stocks,
or
in
stocks
with
characteristics
of
both
(“core”
style
of
investing).
We
employ
a
multi-factor
selection
process
that
includes
using
a
proprietary
model
to
assign
a
quantitative
factor
score
for
each
issuer
in
the
Fund’s
investible
universe
based
on
that
issuer’s
exposure
to
quality,
value
and
momentum.
We
further
analyze
each
security
based
on
the
assigned
factor
scores
but
taking
into
account
certain
sector
weight
limits
and
security
weight
limit
constraints.
Manager’s
Discussion
During
the
period
under
review,
the
Fund
fared
better
than
its
investable
universe,
as
represented
by
the
MSCI
EM
Index.
Outperformance
was
largely
due
to
stock
selection,
notably
among
energy,
communication
services,
information
technology,
health
care
and
consumer
staples
stocks.
In
contrast,
stock
selection
within
the
utilities
and
materials
sectors
detracted,
offsetting
performance
slightly.
Allocation
effects
were
also
positive
for
relative
results,
particularly
an
overweighted
allocation
to
the
financials
sector
and
an
underweighted
position
in
consumer
discretionary
stocks,
alongside
cash
holdings.
Regionally,
stock
selection
in
Europe
and
Asia
benefited
relative
results,
although
this
was
offset
somewhat
by
an
overweighting
to
the
EM
Europe
region.
Geographic
Composition
7/31/22
%
of
Total
Net
Assets
Asia
71.0%
Middle East & Africa
11.6%
Latin
America
&
Caribbean
8.9%
Europe
3.6%
Other
0.9%
Short-Term
Investments
&
Other
Net
Assets
4.0%
Portfolio
Composition
7/31/22
%
of
Total
Net
Assets
Banks
16.2%
Semiconductors
&
Semiconductor
Equipment
9.5%
Oil,
Gas
&
Consumable
Fuels
4.8%
Internet
&
Direct
Marketing
Retail
4.5%
Technology
Hardware,
Storage
&
Peripherals
4.5%
Interactive
Media
&
Services
4.3%
Metals
&
Mining
4.2%
Chemicals
3.7%
Food
Products
3.5%
IT
Services
3.3%
Automobiles
3.1%
Real
Estate
Management
&
Development
3.0%
Pharmaceuticals
2.4%
Wireless
Telecommunication
Services
2.2%
Other*
26.8%
Short-Term
Investments
&
Other
Net
Assets
4.0%
*
Categories
within
the
Other
category
are
listed
in
full
in
the
Fund's
Schedule
of
Investments
(SOI),
which
can
be
found
later
in
this
report.
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sale
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
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
21
.
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
3
franklintempleton.com
Annual
Report
For
the
12
months
ended
July
31,
2022,
the
U.S.
dollar
rose
in
value
relative
to
most
currencies.
As
a
result,
the
Fund’s
performance
was
negatively
affected
by
the
portfolio’s
investment
in
securities
with
non-U.S.
currency
exposure.
Thank
you
for
your
participation
in
Franklin
Emerging
Market
Core
Equity
(IU)
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Chandra
Seethamraju,
Ph.D.
Sundaram
Chettiappan,
CFA
Todd
Brighton,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
July
31,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
7/31/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.
6.8%
Semiconductors
&
Semiconductor
Equipment,
Taiwan
Tencent
Holdings
Ltd.
3.4%
Interactive
Media
&
Services,
China
Samsung
Electronics
Co.
Ltd.
3.3%
Technology
Hardware,
Storage
&
Peripherals,
South
Korea
Alibaba
Group
Holding
Ltd.
2.2%
Internet
&
Direct
Marketing
Retail,
China
Itau
Unibanco
Holding
SA
2.1%
Banks,
Brazil
Tata
Consultancy
Services
Ltd.
2.0%
IT
Services,
India
BYD
Co.
Ltd.
1.6%
Automobiles,
China
Chunghwa
Telecom
Co.
Ltd.
1.5%
Diversified
Telecommunication
Services,
Taiwan
Hana
Financial
Group,
Inc.
1.5%
Banks,
South
Korea
Meituan
Dianping
1.4%
Internet
&
Direct
Marketing
Retail,
China
Top
10
Countries
7/31/22
a
%
of
Total
Net
Assets
a
a
China
29.1%
Taiwan
13.1%
South
Korea
11.4%
India
10.3%
Brazil
5.1%
Saudi
Arabia
4.5%
South
Africa
3.8%
United
Arab
Emirates
3.2%
Indonesia
2.6%
Thailand
2.3%
CFA
®
is
a
trademark
owned
by
CFA
Institute.
Performance
Summary
as
of
July
31,
2022
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
4
franklintempleton.com
Annual
Report
The
performance
table
and
graph
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
7/31/22
1
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.
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
1-Year
-19.15%
-19.15%
Since
Inception
(9/30/19)
4
+0.88%
+0.31%
See
page
6
for
Performance
Summary
footnotes.
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Performance
Summary
5
franklintempleton.com
Annual
Report
See
page
6
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
9/30/19–7/31/22
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Performance
Summary
6
franklintempleton.com
Annual
Report
All
investments
involve
risks,
including
possible
loss
of
principal.
Stock
prices
fluctuate,
sometimes
rapidly
and
dramatically,
due
to
factors
affecting
individual
companies,
particular
industries
or
sectors,
or
general
market
conditions.
Investing
in
foreign
securities
typically
involves
more
risks
than
investing
in
U.S.
securities,
and
includes
risks
associated
with
internal
and
external
political
and
economic
developments,
trading
practices,
availability
of
information,
limited
markets,
and
currency
exchange
rate
fluctuations
and
policies.
Investments
in
emerging
markets
are
subject
to
all
of
the
risks
of
foreign
investing
generally,
and
have
additional
heightened
risks
due
to
a
lack
of
established
legal,
political,
business
and
social
frameworks
to
support
securities
markets.
To
the
extent
that
the
Fund
invests
a
significant
portion
of
its
assets
in
a
specific
geographic
region
or
a
particular
country,
the
Fund
will
generally
have
more
exposure
to
the
specific
regional
or
country
economic
risks.
There
can
be
no
assurance
that
the
Fund’s
multi-factor
stock
selection
process
will
enhance
performance.
Exposure
to
such
investment
factors
may
detract
from
performance
in
some
market
environments,
perhaps
for
extended
periods.
The
Fund
may
have
investments
in
both
growth
and
value
stocks,
or
in
stocks
with
characteristics
of
both.
Growth
stock
prices
reflect
projections
of
future
earnings
or
revenues,
and
can,
therefore,
fall
dramatically
if
the
company
fails
to
meet
those
projections.
A
value
stock
may
not
increase
in
price
as
anticipated
by
the
investment
manager
if
other
investors
fail
to
recognize
the
company’s
value
and
bid
up
the
price,
the
markets
favor
faster-growing
companies,
or
the
factors
that
the
investment
manager
believes
will
increase
the
price
of
the
security
do
not
occur.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
height-
en
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
To
the
extent
that
the
Fund
has
exposure
to
Russian
investments
or
investments
in
countries
affected
by
the
invasion,
the
Fund’s
ability
to
price,
buy,
sell,
receive
or
deliver
such
investments
may
be
impaired.
The
Fund
could
determine
at
any
time
that
certain
of
the
most
affected
securities
have
zero
value.
In
addition,
any
exposure
that
the
Fund
may
have
to
counterparties
in
Russia
or
in
countries
affected
by
the
invasion
could
negatively
impact
the
Fund’s
portfolio.
The
extent
and
duration
of
Russia’s
military
actions
and
the
repercussions
of
such
actions
(including
any
retaliatory
actions
or
countermeasures
that
may
be
taken
by
those
subject
to
sanctions)
are
impos-
sible
to
predict,
but
could
result
in
significant
market
disruptions,
including
in
the
oil
and
natural
gas
markets,
and
may
negatively
affect
global
supply
chains,
inflation
and
global
growth.
These
and
any
related
events
could
significantly
impact
the
Fund’s
performance
and
the
value
of
an
investment
in
the
Fund,
even
beyond
any
direct
exposure
the
Fund
may
have
to
Russian
issuers
or
issuers
in
other
countries
affected
by
the
invasion.
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
11/30/22.
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.
Since
Inception
returns
are
based
on
the
performance
inception
date
of
9/30/19.
5.
Source:
Morningstar.
The
MSCI
EM
Index
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
global
emerging
markets.
6.
Figures
are
as
stated
in
the
Fund’s
current
prospectus,
including
the
effect
of
acquired
fund
fees
and
expenses,
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
(8/1/21–7/31/22)
Net
Investment
Income
$0.3697
Total
Annual
Operating
Expenses
6
With
Fee
Waiver
Without
Fee
Waiver
0.00%
0.14%
Your
Fund’s
Expenses
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
7
franklintempleton.com
Annual
Report
Shareholders
of
mutual
funds
incur
ongoing
costs,
such
as
management
fees
(if
any),
custodian
fees
and
other
Fund
expenses,
which
are
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
the
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.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
Fund
costs
only
and
do
not
reflect
any
program
fees
that
you
may
pay.
Therefore,
the
table
is
useful
in
comparing
ongoing
costs
of
investing
in
the
Fund
only,
and
will
not
help
you
determine
the
relative
total
costs
of
participating
in
any
one
investment
program.
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.”
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
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)
Beginning
Account
Value
2/1/22
Ending
Account
Value
7/31/22
Expenses
Paid
During
Period
2/1/22–7/31/22
1,2
Ending
Account
Value
7/31/22
Expenses
Paid
During
Period
2/1/22–7/31/22
1,2
a
Annualized
Expense
Ratio
2
$1,000
$841.90
$0.00
$1,024.73
$0.00
0.00%
8
franklintempleton.com
Annual
Report
Franklin
International
Core
Equity
(IU)
Fund
This
annual
report
for
Franklin
International
Core
Equity
(IU)
Fund
covers
the
fiscal
year
ended
July
31,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
capital
appreciation.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
equity
securities.
The
Fund
intends
to
invest
predominantly
in
non-U.S.
issuers.
The
Fund
may
invest
in
equity
securities
of
any
capitalization
and
primarily
invests
in
common
stock
but
may
also
invest
in
depositary
receipts.
The
Fund's
investable
universe
typically
includes
equity
securities
of
companies
in
the
MSCI
Europe,
Australasia,
Far
East
(EAFE)
index.
Performance
Overview
The
Fund
posted
a
-15.56%
cumulative
total
return
for
the
12
months
ended
July
31,
2022.
In
comparison,
the
MSCI
EAFE
Index,
which
measures
equity
market
performance
of
developed
markets,
excluding
the
U.S.
and
Canada,
posted
a
-13.86%
cumulative
total
return
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
10
.
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.
Investment
Strategy
The
Fund
invests
in
both
growth
and
value
stocks,
or
in
stocks
with
characteristics
of
both
(“core”
style
of
investing).
We
employ
a
multi-factor
selection
process
that
includes
using
a
proprietary
model
to
assign
a
quantitative
factor
score
for
each
issuer
in
the
Fund’s
investible
universe
based
on
that
issuer’s
exposure
to
quality,
value
and
momentum.
We
further
analyze
each
security
based
on
the
assigned
factor
scores,
but
taking
into
account
certain
sector
weight
limits
and
security
weight
limit
constraints.
Manager’s
Discussion
During
the
period
under
review,
the
Fund
underperformed
its
investable
universe,
as
represented
by
the
MSCI
EAFE
Index.
Underperformance
was
largely
due
to
stock
selection,
notably
among
materials
and
financials
stocks,
although
stock
selection
within
the
communication
services
and
information
technology
(IT)
sectors
proved
positive.
In
contrast,
allocation
effects
contributed
to
relative
returns,
particularly
underweighted
allocations
to
the
IT
and
consumer
discretionary
sectors,
alongside
cash
holdings.
Regionally,
stock
selection
in
Asia
and
the
U.S.
contributed,
while
stock
selection
in
Europe
and
Australasia
detracted.
Geographic
Composition
7/31/22
%
of
Total
Net
Assets
Europe
50.4%
Asia
29.7%
North
America
9.8%
Australia
&
New
Zealand
6.2%
Middle East & Africa
2.9%
Other
0.1%
Short-Term
Investments
&
Other
Net
Assets
0.9%
Portfolio
Composition
7/31/22
%
of
Total
Net
Assets
Pharmaceuticals
9.8%
Banks
7.7%
Oil,
Gas
&
Consumable
Fuels
5.2%
Metals
&
Mining
4.7%
Insurance
4.4%
Food
Products
4.1%
Automobiles
3.5%
Capital
Markets
3.3%
Semiconductors
&
Semiconductor
Equipment
3.3%
Chemicals
2.9%
Personal
Products
2.6%
Textiles,
Apparel
&
Luxury
Goods
2.5%
Diversified
Telecommunication
Services
2.4%
Machinery
2.3%
Other*
40.4%
Short-Term
Investments
&
Other
Net
Assets
0.9%
*Categories
within
the
Other
category
are
listed
in
full
in
the
Fund's
Schedule
of
Investments
(SOI),
which
can
be
found
later
in
this
report.
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
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
29
.
Franklin
International
Core
Equity
(IU)
Fund
9
franklintempleton.com
Annual
Report
For
the
12
months
ended
July
31,
2022,
the
U.S.
dollar
rose
in
value
relative
to
most
currencies.
As
a
result,
the
Fund’s
performance
was
negatively
affected
by
the
portfolio’s
investment
in
securities
with
non-U.S.
currency
exposure.
Thank
you
for
your
participation
in
Franklin
International
Core
Equity
(IU)
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Chandra
Seethamraju,
Ph.D.
Sundaram
Chettiappan,
CFA
Todd
Brighton,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
July
31,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
7/31/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Novo
Nordisk
A/S
2.9%
Pharmaceuticals,
Denmark
Roche
Holding
AG
2.7%
Pharmaceuticals,
United
States
Nestle
SA
2.7%
Food
Products,
United
States
Stellantis
NV
2.3%
Automobiles,
United
States
L'Oreal
SA
2.2%
Personal
Products,
France
Nippon
Telegraph
&
Telephone
Corp.
2.1%
Diversified
Telecommunication
Services,
Japan
GSK
plc
2.0%
Pharmaceuticals,
United
States
Mitsubishi
Corp.
1.9%
Trading
Companies
&
Distributors,
Japan
DBS
Group
Holdings
Ltd.
1.7%
Banks,
Singapore
Zurich
Insurance
Group
AG
1.7%
Insurance,
Switzerland
Top
10
Countries
7/31/22
a
%
of
Total
Net
Assets
a
a
Japan
23.7%
United
Kingdom
10.8%
France
10.8%
United
States
9.8%
Australia
6.2%
Germany
6.1%
Switzerland
4.9%
Netherlands
4.5%
Denmark
4.4%
Singapore
3.5%
Performance
Summary
as
of
July
31,
2022
Franklin
International
Core
Equity
(IU)
Fund
10
franklintempleton.com
Annual
Report
The
performance
table
and
graph
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
7/31/22
1
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.
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
1-Year
-15.56%
-15.56%
Since
Inception
(8/19/19)
4
+16.80%
+5.40%
See
page
12
for
Performance
Summary
footnotes.
Franklin
International
Core
Equity
(IU)
Fund
Performance
Summary
11
franklintempleton.com
Annual
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See
page
12
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
8/19/19–7/31/22
Franklin
International
Core
Equity
(IU)
Fund
Performance
Summary
12
franklintempleton.com
Annual
Report
All
investments
involve
risks,
including
possible
loss
of
principal.
Stock
prices
fluctuate,
sometimes
rapidly
and
dramatically,
due
to
factors
affecting
individual
companies,
particular
industries
or
sectors,
or
general
market
conditions.
Investing
in
foreign
securities
typically
involves
more
risks
than
investing
in
U.S.
securities,
and
includes
risks
associated
with
internal
and
external
political
and
economic
developments,
trading
practices,
availability
of
information,
limited
markets,
and
currency
exchange
rate
fluctuations
and
policies.
To
the
extent
that
the
Fund
invests
a
significant
portion
of
its
assets
in
a
specific
geographic
region
or
a
particular
country,
the
Fund
will
generally
have
more
exposure
to
the
specific
regional
or
country
economic
risks.
There
can
be
no
assurance
that
the
Fund’s
multi-factor
stock
selection
process
will
enhance
performance.
Exposure
to
such
investment
factors
may
detract
from
performance
in
some
market
environments,
perhaps
for
extended
periods.
The
Fund
may
have
investments
in
both
growth
and
value
stocks,
or
in
stocks
with
characteristics
of
both.
Growth
stock
prices
reflect
projections
of
future
earnings
or
revenues,
and
can,
therefore,
fall
dramatically
if
the
company
fails
to
meet
those
projections.
A
value
stock
may
not
increase
in
price
as
anticipated
by
the
investment
manager
if
other
investors
fail
to
recognize
the
company’s
value
and
bid
up
the
price,
the
markets
favor
faster-growing
companies,
or
the
factors
that
the
investment
manager
believes
will
increase
the
price
of
the
security
do
not
occur.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
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
11/30/22.
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.
Since
Inception
returns
are
based
on
the
performance
inception
date
of
8/19/19.
5.
Source:
Morningstar.
The
MSCI
EAFE
Index
is
a
free
float-adjusted
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
developed
markets
excluding
the
U.S.
and
Canada.
6.
Figures
are
as
stated
in
the
Fund’s
current
prospectus,
including
the
effect
of
acquired
fund
fees
and
expenses,
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
(8/1/21–7/31/22)
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
$0.4177
$0.1688
$0.4045
$0.9910
Total
Annual
Operating
Expenses
6
With
Fee
Waiver
Without
Fee
Waiver
0.00%
0.04%
Your
Fund’s
Expenses
Franklin
International
Core
Equity
(IU)
Fund
13
franklintempleton.com
Annual
Report
Shareholders
of
mutual
funds
incur
ongoing
costs,
such
as
management
fees
(if
any),
custodian
fees
and
other
Fund
expenses,
which
are
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
the
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.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
Fund
costs
only
and
do
not
reflect
any
program
fees
that
you
may
pay.
Therefore,
the
table
is
useful
in
comparing
ongoing
costs
of
investing
in
the
Fund
only,
and
will
not
help
you
determine
the
relative
total
costs
of
participating
in
any
one
investment
program.
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.”
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
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)
Beginning
Account
Value
2/1/22
Ending
Account
Value
7/31/22
Expenses
Paid
During
Period
2/1/22–7/31/22
1,2
Ending
Account
Value
7/31/22
Expenses
Paid
During
Period
2/1/22–7/31/22
1,2
a
Annualized
Expense
Ratio
2
$1,000
$864.70
$0.00
$1,024.73
$0.00
0.00%
14
franklintempleton.com
Annual
Report
Franklin
U.S.
Core
Equity
(IU)
Fund
This
annual
report
for
Franklin
U.S.
Core
Equity
(IU)
Fund
covers
the
fiscal
year
ended
July
31,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
capital
appreciation.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
U.S.
equity
securities.
The
Fund
may
invest
in
equity
securities
of
any
capitalization
and
primarily
invests
in
common
stock.
The
Fund's
investable
universe
typically
includes
equity
securities
of
companies
in
the
Russell
1000
®
Index.
1
Performance
Overview
The
Fund
posted
a
-4.42%
cumulative
total
return
for
the
12
months
ended
July
31,
2022.
In
comparison,
the
Standard
&
Poor’s
®
500
Index
(S&P
500
®
),
which
is
designed
to
measure
total
U.S.
equity
market
performance,
posted
a
-4.64%
cumulative
total
return
for
the
same
period.
2
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
16
.
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.
Investment
Strategy
The
Fund
invests
in
both
growth
and
value
stocks,
or
in
stocks
with
characteristics
of
both
(“core”
style
of
investing).
We
employ
a
multi-factor
selection
process
that
includes
using
a
proprietary
model
to
assign
a
quantitative
factor
score
for
each
issuer
in
the
Fund’s
investible
universe
based
on
that
issuer’s
exposure
to
quality,
value
and
momentum.
We
further
analyze
each
security
based
on
the
assigned
factor
scores,
but
taking
into
account
certain
sector
weight
limits
and
security
weight
limit
constraints.
Manager’s
Discussion
During
the
period
under
review,
the
Fund
fared
better
than
its
investable
universe,
as
represented
by
the
S&P
500.
Portfolio
Composition
7/31/22
%
of
Total
Net
Assets
Software
11.2%
Interactive
Media
&
Services
6.2%
Technology
Hardware,
Storage
&
Peripherals
6.0%
Semiconductors
&
Semiconductor
Equipment
5.0%
Oil,
Gas
&
Consumable
Fuels
4.8%
Health
Care
Providers
&
Services
3.9%
IT
Services
3.7%
Pharmaceuticals
3.5%
Equity
Real
Estate
Investment
Trusts
(REITs)
3.1%
Banks
2.9%
Biotechnology
2.5%
Specialty
Retail
2.5%
Food
Products
2.5%
Health
Care
Equipment
&
Supplies
2.2%
Other*
39.0%
Short-Term
Investments
&
Other
Net
Assets
1.0%
*Categories
within
the
Other
category
are
listed
in
full
in
the
Fund's
Schedule
of
Investments
(SOI),
which
can
be
found
later
in
this
report.
Top
10
Holdings
7/31/22
Company
Industry
%
of
Total
Net
Assets
a
a
Microsoft
Corp.
7.4%
Software
Apple,
Inc.
5.5%
Technology
Hardware,
Storage
&
Peripherals
Alphabet,
Inc.
4.9%
Interactive
Media
&
Services
ConocoPhillips
2.0%
Oil,
Gas
&
Consumable
Fuels
Public
Storage
1.9%
Equity
Real
Estate
Investment
Trusts
(REITs)
Amazon.com,
Inc.
1.9%
Internet
&
Direct
Marketing
Retail
Tesla,
Inc.
1.8%
Automobiles
Berkshire
Hathaway,
Inc.
1.7%
Diversified
Financial
Services
Micron
Technology,
Inc.
1.6%
Semiconductors
&
Semiconductor
Equipment
PepsiCo,
Inc.
1.6%
Beverages
1.
Frank
Russell
Company
is
the
source
and
owner
of
the
trademarks,
service
marks
and
copyrights
related
to
the
Russell
Indexes.
Russell
®
is
a
trademark
of
Frank
Russell
Company.
2.
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
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
36
.
Franklin
U.S.
Core
Equity
(IU)
Fund
15
franklintempleton.com
Annual
Report
Outperformance
was
largely
due
to
allocation
effects,
notably
overweighted
allocations
to
consumer
staples
and
energy
stocks.
Underweighted
positions
in
the
consumer
discretionary
and
financials
sectors
also
proved
positive
for
performance.
In
contrast,
stock
selection
detracted
in
aggregate,
particularly
among
financials
and
health
care
stocks,
although
stock
selection
among
materials
and
communication
services
stocks
proved
positive.
Thank
you
for
your
participation
in
Franklin
U.S.
Core
Equity
(IU)
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Chandra
Seethamraju,
Ph.D.
Sundaram
Chettiappan,
CFA
Todd
Brighton,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
July
31,
2022,
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
July
31,
2022
Franklin
U.S.
Core
Equity
(IU)
Fund
16
franklintempleton.com
Annual
Report
The
performance
table
and
graph
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
7/31/22
1
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.
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
1-Year
-4.42%
-4.42%
Since
Inception
(8/19/19)
4
+48.94%
+14.46%
See
page
18
for
Performance
Summary
footnotes.
Franklin
U.S.
Core
Equity
(IU)
Fund
Performance
Summary
17
franklintempleton.com
Annual
Report
See
page
18
for
Performance
Summary
footnotes
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
8/19/19–7/31/22
Franklin
U.S.
Core
Equity
(IU)
Fund
Performance
Summary
18
franklintempleton.com
Annual
Report
All
investments
involve
risks,
including
possible
loss
of
principal.
Stock
prices
fluctuate,
sometimes
rapidly
and
dramatically,
due
to
factors
affecting
individual
companies,
particular
industries
or
sectors,
or
general
market
conditions.
To
the
extent
the
Fund
focuses
on
particular
countries,
regions,
industries,
sectors
or
types
of
investment
from
time
to
time,
the
Fund
may
be
subject
to
greater
risks
of
adverse
developments
in
such
areas
of
focus
than
a
fund
that
invests
in
a
wider
variety
of
countries,
regions,
industries,
sectors
or
investments.
There
can
be
no
assurance
that
the
Fund’s
multi-factor
stock
selection
process
will
enhance
performance.
Exposure
to
such
investment
factors
may
detract
from
performance
in
some
market
environments,
perhaps
for
extended
periods.
The
Fund
may
have
investments
in
both
growth
and
value
stocks,
or
in
stocks
with
characteristics
of
both.
Growth
stock
prices
reflect
projections
of
future
earnings
or
revenues,
and
can,
therefore,
fall
dramatically
if
the
company
fails
to
meet
those
projections.
A
value
stock
may
not
increase
in
price
as
anticipated
by
the
investment
manager
if
other
investors
fail
to
recognize
the
company’s
value
and
bid
up
the
price,
the
markets
favor
faster-growing
companies,
or
the
factors
that
the
investment
manager
believes
will
increase
the
price
of
the
security
do
not
occur.
U.S.
securities
can
be
volatile
in
response
to
various
forces
including
political
and
economic
events,
federal
and
state
budget
deficits;
unpredictability
of
U.S.
legislation
on
financial
reform,
health
care,
tax
reform
and
infrastructure;
risks
of
trade
wars;
and
persistently
low
interest
rates.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
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
11/30/22.
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.
Since
Inception
returns
are
based
on
the
performance
inception
date
of
8/19/19.
5.
Source:
Morningstar.
The
S&P
500
is
a
market
capitalization-weighted
index
of
500
stocks
designed
to
measure
total
U.S.
equity
market
performance.
6.
Figures
are
as
stated
in
the
Fund’s
current
prospectus,
including
the
effect
of
acquired
fund
fees
and
expenses,
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
(8/1/21–7/31/22)
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
$0.2002
$0.6620
$0.4357
$1.2979
Total
Annual
Operating
Expenses
6
With
Fee
Waiver
Without
Fee
Waiver
0.00%
0.01%
Your
Fund’s
Expenses
Franklin
U.S.
Core
Equity
(IU)
Fund
19
franklintempleton.com
Annual
Report
Shareholders
of
mutual
funds
incur
ongoing
costs,
such
as
management
fees
(if
any),
custodian
fees
and
other
Fund
expenses,
which
are
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
the
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.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
Fund
costs
only
and
do
not
reflect
any
program
fees
that
you
may
pay.
Therefore,
the
table
is
useful
in
comparing
ongoing
costs
of
investing
in
the
Fund
only,
and
will
not
help
you
determine
the
relative
total
costs
of
participating
in
any
one
investment
program.
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.”
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
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)
Beginning
Account
Value
2/1/22
Ending
Account
Value
7/31/22
Expenses
Paid
During
Period
2/1/22–7/31/22
1,2
Ending
Account
Value
7/31/22
Expenses
Paid
During
Period
2/1/22–7/31/22
1,2
a
Annualized
Expense
Ratio
2
$1,000
$930.50
$0.00
$1,024.73
$0.00
0.00%
Franklin
Fund
Allocator
Series
Financial
Highlights
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
Year
Ended
July
31,
Year
Ended
July
31,
2020
a
2022
2021
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
............................................
$11.83
$10.57
$10.00
Income
from
investment
operations
b
:
Net
investment
income
c
..................................................
0.35
0.28
0.33
Net
realized
and
unrealized
gains
(losses)
....................................
(2.58)
1.34
0.45
Total
from
investment
operations
.............................................
(2.23)
1.62
0.78
Less
distributions
from:
Net
investment
income
...................................................
(0.37)
(0.36)
(0.21)
Net
realized
gains
......................................................
—
—
(—)
d
Total
distributions
........................................................
(0.37)
(0.36)
(0.21)
Net
asset
value,
end
of
year
................................................
$9.23
$11.83
$10.57
Total
return
e
............................................................
(19.15)%
15.57%
7.96%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.............
0.17%
0.14%
0.17%
Expenses
net
of
waiver
and
payments
by
affiliates
................................
—%
—%
0.01%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
..............
—%
g
—%
g
—%
Net
investment
income
....................................................
3.27
%
2.41%
3.44%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..............................................
$109,129
$116,643
$138,590
Portfolio
turnover
rate
.....................................................
125.41%
108.13%
102.39%
a
For
the
period
August
19,
2019
(effective
date)
to
July
31,
2020.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
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,
except
for
non-recurring
expenses,
if
any.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Fund
Allocator
Series
Schedule
of
Investments,
July
31,
2022
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
90.9%
Air
Freight
&
Logistics
0.4%
ZTO
Express
Cayman,
Inc.,
ADR
.........................
China
15,200
$
388,968
Airlines
0.2%
a
Eva
Airways
Corp.
.....................................
Taiwan
212,000
242,682
Auto
Components
0.3%
b
Fuyao
Glass
Industry
Group
Co.
Ltd.,
H,
144A,
Reg
S
..........
China
62,000
300,758
Automobiles
3.1%
Astra
International
Tbk.
PT
..............................
Indonesia
832,100
355,388
BYD
Co.
Ltd.,
H
......................................
China
48,000
1,756,116
Kia
Corp.
...........................................
South
Korea
11,742
732,615
b
Yadea
Group
Holdings
Ltd.,
144A,
Reg
S
...................
China
254,000
547,782
3,391,901
Banks
13.2%
Abu
Dhabi
Islamic
Bank
PJSC
...........................
United
Arab
Emirates
344,019
852,557
Akbank
TAS
.........................................
Turkey
804,167
387,340
Alinma
Bank
.........................................
Saudi
Arabia
147,032
1,500,061
Arab
National
Bank
....................................
Saudi
Arabia
39,650
327,925
Bank
Central
Asia
Tbk.
PT
..............................
Indonesia
1,041,700
517,996
Bank
of
Beijing
Co.
Ltd.,
A
...............................
China
285,095
176,415
Bank
of
Chengdu
Co.
Ltd.,
A
.............................
China
50,900
116,426
Bank
of
Nanjing
Co.
Ltd.,
A
..............................
China
119,900
183,935
Bank
Polska
Kasa
Opieki
SA
.............................
Poland
7,016
111,116
Banque
Saudi
Fransi
...................................
Saudi
Arabia
9,481
129,965
BDO
Unibank,
Inc.
....................................
Philippines
114,450
247,405
First
Abu
Dhabi
Bank
PJSC
..............................
United
Arab
Emirates
59,378
314,258
a
Grupo
Financiero
Inbursa
SAB
de
CV,
O
....................
Mexico
149,700
275,677
Haci
Omer
Sabanci
Holding
AS
...........................
Turkey
263,962
292,735
Hana
Financial
Group,
Inc.
..............................
South
Korea
56,392
1,610,456
Huaxia
Bank
Co.
Ltd.,
A
................................
China
179,700
136,521
a
ICICI
Bank
Ltd.
.......................................
India
85,893
892,341
Industrial
Bank
Co.
Ltd.,
A
...............................
China
263,806
696,175
KB
Financial
Group,
Inc.
................................
South
Korea
37,117
1,375,719
Riyad
Bank
..........................................
Saudi
Arabia
113,666
1,106,817
Shinhan
Financial
Group
Co.
Ltd.
.........................
South
Korea
56,604
1,553,484
Taiwan
Cooperative
Financial
Holding
Co.
Ltd.
...............
Taiwan
561,000
513,146
a,b,c,d
TCS
Group
Holding
plc,
GDR,
Reg
S
......................
Russia
2,334
—
Woori
Financial
Group,
Inc.
..............................
South
Korea
124,094
1,134,867
14,453,337
Beverages
2.0%
Arca
Continental
SAB
de
CV
.............................
Mexico
92,200
638,676
Cia
Cervecerias
Unidas
SA
..............................
Chile
31,624
182,493
b
Nongfu
Spring
Co.
Ltd.,
H,
144A,
Reg
S
....................
China
205,200
1,229,794
a
United
Spirits
Ltd.
.....................................
India
11,864
116,786
2,167,749
Biotechnology
0.4%
b
3SBio,
Inc.,
144A,
Reg
S
................................
China
360,500
239,957
Chongqing
Zhifei
Biological
Products
Co.
Ltd.,
A
..............
China
11,200
165,329
405,286
Capital
Markets
1.1%
CITIC
Securities
Co.
Ltd.,
A
..............................
China
85,900
250,243
GF
Securities
Co.
Ltd.,
A
................................
China
74,600
176,565
Guotai
Junan
Securities
Co.
Ltd.,
A
........................
China
98,900
212,356
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Capital
Markets
(continued)
Hithink
RoyalFlush
Information
Network
Co.
Ltd.,
A
............
China
7,500
$
95,923
Huatai
Securities
Co.
Ltd.,
A
.............................
China
96,300
189,752
Korea
Investment
Holdings
Co.
Ltd.
.......................
South
Korea
3,358
162,835
Meritz
Securities
Co.
Ltd.
...............................
South
Korea
42,301
157,342
1,245,016
Chemicals
2.7%
Dongyue
Group
Ltd.
...................................
China
286,000
311,062
Hubei
Xingfa
Chemicals
Group
Co.
Ltd.,
A
...................
China
15,700
86,909
Kumho
Petrochemical
Co.
Ltd.
...........................
South
Korea
3,162
314,783
a,b,c,d
PhosAgro
PJSC,
GDR,
Reg
S
............................
Russia
32,310
—
Sahara
International
Petrochemical
Co.
.....................
Saudi
Arabia
92,660
1,182,619
a
Sasol
Ltd.
...........................................
South
Africa
15,839
332,731
Shandong
Hualu
Hengsheng
Chemical
Co.
Ltd.,
A
.............
China
29,040
123,074
SRF
Ltd.
............................................
India
7,851
241,431
Wanhua
Chemical
Group
Co.
Ltd.,
A
.......................
China
29,000
360,502
2,953,111
Commercial
Services
&
Supplies
0.1%
China
Everbright
Environment
Group
Ltd.
...................
China
190,000
101,125
Communications
Equipment
0.2%
ZTE
Corp.,
A
.........................................
China
52,200
189,345
Construction
Materials
0.3%
ACC
Ltd.
............................................
India
11,033
310,836
Consumer
Finance
0.1%
Krungthai
Card
PCL
...................................
Thailand
94,100
150,140
Diversified
Financial
Services
0.6%
FirstRand
Ltd.
........................................
South
Africa
167,973
664,473
Diversified
Telecommunication
Services
2.0%
Chunghwa
Telecom
Co.
Ltd.
.............................
Taiwan
401,000
1,623,312
Hellenic
Telecommunications
Organization
SA
................
Greece
19,238
331,255
Indus
Towers
Ltd.
.....................................
India
79,952
224,970
2,179,537
Electric
Utilities
0.0%
c,d
Inter
RAO
UES
PJSC
..................................
Russia
8,656,700
—
Electrical
Equipment
1.2%
a
Contemporary
Amperex
Technology
Co.
Ltd.,
A
...............
China
4,500
341,565
Havells
India
Ltd.
.....................................
India
43,970
694,962
Ming
Yang
Smart
Energy
Group
Ltd.,
A
.....................
China
20,400
90,747
TBEA
Co.
Ltd.,
A
......................................
China
49,100
182,178
1,309,452
Electronic
Equipment,
Instruments
&
Components
2.2%
Avary
Holding
Shenzhen
Co.
Ltd.,
A
.......................
China
29,300
133,804
China
Zhenhua
Group
Science
&
Technology
Co.
Ltd.,
A
........
China
7,300
128,324
E
Ink
Holdings,
Inc.
....................................
Taiwan
103,000
676,035
a
Foxconn
Industrial
Internet
Co.
Ltd.,
A
......................
China
117,000
174,550
Kingboard
Holdings
Ltd.
................................
China
166,500
487,127
Synnex
Technology
International
Corp.
.....................
Taiwan
319,000
590,419
Unimicron
Technology
Corp.
.............................
Taiwan
34,000
180,957
2,371,216
Entertainment
1.0%
NetEase,
Inc.
........................................
China
57,300
1,071,891
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
23
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Food
&
Staples
Retailing
1.5%
Cencosud
SA
........................................
Chile
352,857
$
482,041
Shoprite
Holdings
Ltd.
..................................
South
Africa
55,888
756,176
Wal-Mart
de
Mexico
SAB
de
CV
..........................
Mexico
108,800
394,098
1,632,315
Food
Products
3.5%
b
China
Feihe
Ltd.,
144A,
Reg
S
...........................
China
325,000
285,373
b
Dali
Foods
Group
Co.
Ltd.,
144A,
Reg
S
....................
China
439,500
209,260
Grupo
Bimbo
SAB
de
CV,
A
..............................
Mexico
149,100
526,909
Henan
Shuanghui
Investment
&
Development
Co.
Ltd.,
A
.......
China
38,400
152,905
JBS
SA
.............................................
United
States
171,400
1,058,419
Nestle
Malaysia
Bhd.
..................................
Malaysia
14,100
426,754
Uni-President
China
Holdings
Ltd.
.........................
China
279,000
255,217
Want
Want
China
Holdings
Ltd.
...........................
China
1,133,000
922,075
3,836,912
Gas
Utilities
0.7%
Adani
Total
Gas
Ltd.
...................................
India
13,731
542,565
Indraprastha
Gas
Ltd.
..................................
India
60,736
265,896
808,461
Health
Care
Equipment
&
Supplies
0.1%
Shandong
Weigao
Group
Medical
Polymer
Co.
Ltd.,
H
.........
China
88,400
110,575
Health
Care
Providers
&
Services
0.9%
Apollo
Hospitals
Enterprise
Ltd.
...........................
India
2,147
114,459
Dr.
Sulaiman
Al
Habib
Medical
Services
Group
Co.
............
Saudi
Arabia
12,545
688,310
Sinopharm
Group
Co.
Ltd.,
H
............................
China
75,200
172,296
975,065
Hotels,
Restaurants
&
Leisure
0.9%
b
Jiumaojiu
International
Holdings
Ltd.,
144A,
Reg
S
............
China
101,000
219,762
OPAP
SA
...........................................
Greece
8,147
112,877
a
Trip.com
Group
Ltd.,
ADR
...............................
China
10,200
262,956
Yum
China
Holdings,
Inc.
...............................
China
7,100
345,841
941,436
Household
Durables
0.2%
Haier
Smart
Home
Co.
Ltd.,
A
............................
China
72,800
267,967
Household
Products
0.3%
Unilever
Indonesia
Tbk.
PT
..............................
Indonesia
1,140,600
347,312
Independent
Power
and
Renewable
Electricity
Producers
1.0%
a
Adani
Power
Ltd.
.....................................
India
185,965
740,937
Energy
Absolute
PCL
..................................
Thailand
108,500
244,369
Ratch
Group
PCL
.....................................
Thailand
107,300
113,321
1,098,627
Industrial
Conglomerates
1.0%
GS
Holdings
Corp.
....................................
South
Korea
11,205
357,939
KOC
Holding
A/S
.....................................
Turkey
191,184
395,165
Turkiye
Sise
ve
Cam
Fabrikalari
A/S
.......................
Turkey
244,385
297,622
1,050,726
Insurance
0.7%
DB
Insurance
Co.
Ltd.
..................................
South
Korea
11,418
529,574
Meritz
Fire
&
Marine
Insurance
Co.
Ltd.
.....................
South
Korea
8,475
224,519
754,093
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Interactive
Media
&
Services
4.3%
Autohome,
Inc.,
ADR
...................................
China
5,100
$
182,019
a
Baidu,
Inc.,
A
.........................................
China
29,850
515,936
a,b
Kuaishou
Technology,
144A,
Reg
S
........................
China
30,500
306,659
Tencent
Holdings
Ltd.
..................................
China
95,200
3,679,343
4,683,957
Internet
&
Direct
Marketing
Retail
4.5%
a
Alibaba
Group
Holding
Ltd.
..............................
China
217,000
2,439,817
a,b
Meituan
Dianping,
B,
144A,
Reg
S
........................
China
70,200
1,574,812
a
Pinduoduo,
Inc.,
ADR
..................................
China
14,700
720,447
a
Vipshop
Holdings
Ltd.,
ADR
.............................
China
24,800
227,168
4,962,244
IT
Services
3.3%
HCL
Technologies
Ltd.
.................................
India
32,545
390,944
Infosys
Ltd.
..........................................
India
33,691
660,143
Mindtree
Ltd.
.........................................
India
8,709
376,858
Tata
Consultancy
Services
Ltd.
...........................
India
51,765
2,162,819
3,590,764
Life
Sciences
Tools
&
Services
0.8%
Divi's
Laboratories
Ltd.
.................................
India
3,333
161,500
b
Hangzhou
Tigermed
Consulting
Co.
Ltd.,
H,
144A,
Reg
S
.......
China
21,100
219,155
b
WuXi
AppTec
Co.
Ltd.,
H,
144A,
Reg
S
.....................
China
29,740
360,274
a,b
Wuxi
Biologics
Cayman,
Inc.,
144A,
Reg
S
..................
China
16,000
153,153
894,082
Machinery
0.4%
Doosan
Bobcat,
Inc.
...................................
South
Korea
12,042
288,253
Haitian
International
Holdings
Ltd.
.........................
China
43,000
102,904
391,157
Marine
2.0%
Evergreen
Marine
Corp.
Taiwan
Ltd.
.......................
Taiwan
222,000
711,706
HMM
Co.
Ltd.
........................................
South
Korea
21,111
403,949
Orient
Overseas
International
Ltd.
.........................
Hong
Kong
17,500
609,884
Yang
Ming
Marine
Transport
Corp.
........................
Taiwan
159,000
478,392
2,203,931
Metals
&
Mining
3.5%
African
Rainbow
Minerals
Ltd.
............................
South
Africa
28,584
402,126
China
Hongqiao
Group
Ltd.
..............................
China
527,000
549,170
Ganfeng
Lithium
Co.
Ltd.,
A
..............................
China
18,780
248,821
Impala
Platinum
Holdings
Ltd.
............................
South
Africa
10,884
120,678
Kumba
Iron
Ore
Ltd.
...................................
South
Africa
15,372
458,103
c,d
MMC
Norilsk
Nickel
PJSC
...............................
Russia
3,164
—
c,d
Novolipetsk
Steel
PJSC
................................
Russia
347,890
—
c,d
Severstal
PAO
.......................................
Russia
48,409
—
Sibanye
Stillwater
Ltd.
..................................
South
Africa
85,941
211,121
Tata
Steel
Ltd.
........................................
India
459,640
624,893
Vale
SA
.............................................
Brazil
60,000
809,110
Zijin
Mining
Group
Co.
Ltd.,
H
............................
China
328,000
384,352
3,808,374
Oil,
Gas
&
Consumable
Fuels
4.8%
Adaro
Energy
Indonesia
Tbk.
PT
..........................
Indonesia
3,272,100
718,482
Exxaro
Resources
Ltd.
.................................
South
Africa
61,570
748,409
MOL
Hungarian
Oil
&
Gas
plc
............................
Hungary
103,084
758,815
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
25
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Oil,
Gas
&
Consumable
Fuels
(continued)
a
Petro
Rio
SA
.........................................
Brazil
53,000
$
248,177
Polski
Koncern
Naftowy
ORLEN
SA
.......................
Poland
54,452
889,442
a
Reliance
Industries
Ltd.
.................................
India
37,378
1,187,438
United
Tractors
Tbk.
PT
................................
Indonesia
299,900
655,405
5,206,168
Pharmaceuticals
2.4%
China
Medical
System
Holdings
Ltd.
.......................
China
275,000
437,167
China
Traditional
Chinese
Medicine
Holdings
Co.
Ltd.
..........
China
244,000
103,582
CSPC
Pharmaceutical
Group
Ltd.
.........................
China
1,193,600
1,306,929
Kalbe
Farma
Tbk.
PT
..................................
Indonesia
2,373,400
259,348
Sino
Biopharmaceutical
Ltd.
.............................
Hong
Kong
786,000
455,675
2,562,701
Real
Estate
Management
&
Development
3.0%
Aldar
Properties
PJSC
.................................
United
Arab
Emirates
967,308
1,292,243
Emaar
Properties
PJSC
................................
United
Arab
Emirates
715,964
1,074,442
Greentown
China
Holdings
Ltd.
...........................
China
193,500
382,481
Land
&
Houses
PCL
...................................
Thailand
2,093,400
492,253
b
Longfor
Group
Holdings
Ltd.,
144A
........................
China
25,000
83,534
3,324,953
Semiconductors
&
Semiconductor
Equipment
9.5%
a
Daqo
New
Energy
Corp.,
ADR
...........................
China
9,800
634,060
Gigadevice
Semiconductor
Beijing,
Inc.,
A
...................
China
5,900
103,903
a,b
Hua
Hong
Semiconductor
Ltd.,
144A,
Reg
S
.................
China
124,000
371,402
MediaTek,
Inc.
.......................................
Taiwan
17,000
390,768
Novatek
Microelectronics
Corp.
...........................
Taiwan
52,000
462,177
Realtek
Semiconductor
Corp.
............................
Taiwan
33,000
378,606
SG
Micro
Corp.,
A
.....................................
China
5,100
121,859
Taiwan
Semiconductor
Manufacturing
Co.
Ltd.
...............
Taiwan
436,000
7,459,771
TCL
Zhonghuan
Renewable
Energy
Technology
Co.
Ltd.,
A
......
China
26,100
197,133
a
Unigroup
Guoxin
Microelectronics
Co.
Ltd.,
A
................
China
3,300
103,331
Zhejiang
Jingsheng
Mechanical
&
Electrical
Co.
Ltd.,
A
.........
China
13,300
144,482
10,367,492
Software
0.1%
Tata
Elxsi
Ltd.
........................................
India
1,373
151,176
Specialty
Retail
0.9%
JUMBO
SA
..........................................
Greece
22,562
349,836
Mr
Price
Group
Ltd.
....................................
South
Africa
11,457
124,746
b
Topsports
International
Holdings
Ltd.,
144A,
Reg
S
............
China
290,000
241,891
Zhongsheng
Group
Holdings
Ltd.
.........................
China
45,000
257,620
974,093
Technology
Hardware,
Storage
&
Peripherals
4.5%
Lenovo
Group
Ltd.
....................................
China
1,210,000
1,173,444
Ninestar
Corp.,
A
......................................
China
20,600
153,504
Samsung
Electronics
Co.
Ltd.
............................
South
Korea
75,665
3,569,334
4,896,282
Textiles,
Apparel
&
Luxury
Goods
1.2%
ANTA
Sports
Products
Ltd.
..............................
China
8,400
92,491
Li
Ning
Co.
Ltd.
.......................................
China
33,500
271,738
Page
Industries
Ltd.
...................................
India
1,346
831,471
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Textiles,
Apparel
&
Luxury
Goods
(continued)
Xtep
International
Holdings
Ltd.
...........................
China
56,000
$
91,071
1,286,771
Thrifts
&
Mortgage
Finance
0.5%
Housing
Development
Finance
Corp.
Ltd.
...................
India
18,271
550,755
Transportation
Infrastructure
1.1%
Grupo
Aeroportuario
del
Pacifico
SAB
de
CV,
B
...............
Mexico
16,600
225,076
Grupo
Aeroportuario
del
Sureste
SAB
de
CV,
B
...............
Mexico
18,110
341,141
International
Container
Terminal
Services,
Inc.
................
Philippines
181,690
637,429
1,203,646
Wireless
Telecommunication
Services
2.2%
Advanced
Info
Service
PCL
..............................
Thailand
265,500
1,479,451
Far
EasTone
Telecommunications
Co.
Ltd.
..................
Taiwan
242,000
608,725
c,d
Mobile
TeleSystems
PJSC,
ADR
..........................
Russia
31,600
—
MTN
Group
Ltd.
......................................
South
Africa
39,526
331,739
2,419,915
Total
Common
Stocks
(Cost
$103,261,078)
.....................................
99,198,773
Preferred
Stocks
5.1%
Banks
3.0%
e
Itau
Unibanco
Holding
SA,
3.83%
.........................
Brazil
508,800
2,323,481
e
Itausa
SA,
5.99%
.....................................
Brazil
553,100
922,840
3,246,321
Chemicals
1.0%
e
Sociedad
Quimica
y
Minera
de
Chile
SA,
B,
0.01%
............
Chile
10,777
1,070,393
Electric
Utilities
0.4%
e
Cia
Energetica
de
Minas
Gerais,
10.36%
....................
Brazil
228,700
496,986
Metals
&
Mining
0.7%
e
Gerdau
SA,
13.53%
...................................
Brazil
159,700
755,220
Total
Preferred
Stocks
(Cost
$5,380,131)
.......................................
5,568,920
Total
Long
Term
Investments
(Cost
$108,641,209)
...............................
104,767,693
a
Short
Term
Investments
1.9%
a
a
Country
Shares
a
Value
a
a
a
Money
Market
Funds
1.9%
f,g
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
1.445%
....
United
States
2,085,742
2,085,742
Total
Money
Market
Funds
(Cost
$2,085,742)
...................................
2,085,742
Total
Short
Term
Investments
(Cost
$2,085,742
)
.................................
2,085,742
a
Total
Investments
(Cost
$110,726,951)
97.9%
...................................
$106,853,435
Other
Assets,
less
Liabilities
2.1%
.............................................
2,275,401
Net
Assets
100.0%
...........................................................
$109,128,836
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
27
See
Abbreviations
on
page
58
.
a
Non-income
producing.
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
July
31,
2022,
the
aggregate
value
of
these
securities
was
$6,343,566,
representing
5.8%
of
net
assets.
c
Fair
valued
using
significant
unobservable
inputs.
See
Note
9
regarding
fair
value
measurements.
d
See
Note
7
regarding
investments
in
Russian
securities.
e
Variable
rate
security.
The
rate
shown
represents
the
yield
at
period
end.
f
See
Note
3(d)
regarding
investments
in
affiliated
management
investment
companies.
g
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Fund
Allocator
Series
Financial
Highlights
Franklin
International
Core
Equity
(IU)
Fund
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Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
a
Year
Ended
July
31,
Year
Ended
July
31,
2020
a
2022
2021
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
............................................
$13.09
$10.31
$10.00
Income
from
investment
operations
b
:
Net
investment
income
c
..................................................
0.34
0.35
0.25
Net
realized
and
unrealized
gains
(losses)
....................................
(2.26)
2.80
0.30
Total
from
investment
operations
.............................................
(1.92)
3.15
0.55
Less
distributions
from:
Net
investment
income
...................................................
(0.42)
(0.37)
(0.24)
Net
realized
gains
......................................................
(0.57)
—
—
Total
distributions
........................................................
(0.99)
(0.37)
(0.24)
Net
asset
value,
end
of
year
................................................
$10.18
$13.09
$10.31
Total
return
d
............................................................
(15.56)%
31.00%
5.58%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.............
0.04%
0.04%
0.08%
Expenses
net
of
waiver
and
payments
by
affiliates
................................
—%
—%
0.01%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
..............
—%
—%
f
—%
Net
investment
income
....................................................
2.94%
2.93%
2.57%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..............................................
$800,757
$360,375
$281,150
Portfolio
turnover
rate
.....................................................
125.21%
103.80%
94.98%
a
For
the
period
August
19,
2019
(effective
date)
to
July
31,
2020.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Fund
Allocator
Series
Schedule
of
Investments,
July
31,
2022
Franklin
International
Core
Equity
(IU)
Fund
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The
accompanying
notes
are
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financial
statements.
Annual
Report
29
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
99.1%
Aerospace
&
Defense
1.5%
BAE
Systems
plc
.....................................
United
Kingdom
1,005,634
$
9,451,698
Dassault
Aviation
SA
...................................
France
15,269
2,183,920
11,635,618
Air
Freight
&
Logistics
0.5%
DSV
A/S
............................................
Denmark
24,086
4,058,571
Auto
Components
0.5%
Bridgestone
Corp.
.....................................
Japan
71,200
2,777,114
Continental
AG
.......................................
Germany
20,451
1,457,026
4,234,140
Automobiles
3.5%
Bayerische
Motoren
Werke
AG
...........................
Germany
119,797
9,789,501
Stellantis
NV
.........................................
United
States
1,283,293
18,429,325
28,218,826
Banks
7.7%
Commonwealth
Bank
of
Australia
.........................
Australia
142,453
10,116,639
DBS
Group
Holdings
Ltd.
...............................
Singapore
595,800
13,594,680
FinecoBank
Banca
Fineco
SpA
...........................
Italy
302,577
3,760,602
ING
Groep
NV
.......................................
Netherlands
713,900
6,935,045
Mitsubishi
UFJ
Financial
Group,
Inc.
.......................
Japan
671,100
3,781,166
Mizrahi
Tefahot
Bank
Ltd.
...............................
Israel
37,998
1,410,500
Standard
Chartered
plc
.................................
United
Kingdom
1,311,555
9,040,145
Sumitomo
Mitsui
Financial
Group,
Inc.
......................
Japan
401,700
12,601,701
61,240,478
Beverages
2.2%
Anheuser-Busch
InBev
SA/NV
...........................
Belgium
48,067
2,574,971
a
Budweiser
Brewing
Co.
APAC
Ltd.,
144A,
Reg
S
..............
China
971,800
2,690,834
Pernod
Ricard
SA
.....................................
France
54,032
10,614,809
Suntory
Beverage
&
Food
Ltd.
...........................
Japan
40,800
1,609,805
17,490,419
Biotechnology
1.1%
CSL
Ltd.
............................................
Australia
33,405
6,801,824
b
Swedish
Orphan
Biovitrum
AB
............................
Sweden
93,283
2,049,030
8,850,854
Building
Products
1.3%
Cie
de
Saint-Gobain
...................................
France
230,394
10,743,762
Capital
Markets
3.3%
3i
Group
plc
.........................................
United
Kingdom
344,636
5,354,869
Deutsche
Boerse
AG
...................................
Germany
37,162
6,487,515
SBI
Holdings,
Inc.
.....................................
Japan
75,600
1,533,674
Singapore
Exchange
Ltd.
...............................
Singapore
174,200
1,248,724
UBS
Group
AG
.......................................
Switzerland
728,249
11,896,699
26,521,481
Chemicals
2.9%
BASF
SE
...........................................
Germany
35,832
1,596,939
a
Covestro
AG,
144A,
Reg
S
..............................
Germany
113,421
3,825,355
ICL
Group
Ltd.
.......................................
Israel
411,191
3,741,332
Nissan
Chemical
Corp.
.................................
Japan
28,700
1,467,466
Nitto
Denko
Corp.
.....................................
Japan
78,900
5,080,599
OCI
NV
.............................................
Netherlands
63,587
2,207,636
Shin-Etsu
Chemical
Co.
Ltd.
.............................
Japan
20,100
2,574,599
Franklin
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Fund
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The
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part
of
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financial
statements.
30
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Chemicals
(continued)
Tosoh
Corp.
.........................................
Japan
143,900
$
1,875,696
Yara
International
ASA
.................................
Brazil
20,667
880,655
23,250,277
Commercial
Services
&
Supplies
0.3%
Dai
Nippon
Printing
Co.
Ltd.
.............................
Japan
100,700
2,222,098
Construction
Materials
0.4%
CRH
plc
............................................
Ireland
86,654
3,325,437
Diversified
Financial
Services
0.8%
Eurazeo
SE
.........................................
France
23,972
1,712,345
ORIX
Corp.
..........................................
Japan
70,100
1,249,263
Sofina
SA
...........................................
Belgium
8,429
1,974,079
Wendel
SE
..........................................
France
15,113
1,391,064
6,326,751
Diversified
Telecommunication
Services
2.4%
Deutsche
Telekom
AG
..................................
Germany
86,231
1,638,382
Nippon
Telegraph
&
Telephone
Corp.
......................
Japan
592,600
16,927,177
Orange
SA
..........................................
France
66,735
681,961
19,247,520
Electric
Utilities
2.3%
Acciona
SA
..........................................
Spain
13,719
2,823,104
Elia
Group
SA/NV
.....................................
Belgium
18,357
2,786,945
Power
Assets
Holdings
Ltd.
..............................
Hong
Kong
759,500
4,972,982
Red
Electrica
Corp.
SA
.................................
Spain
229,834
4,518,848
b
Tokyo
Electric
Power
Co.
Holdings,
Inc.
.....................
Japan
795,700
3,131,254
18,233,133
Electrical
Equipment
0.4%
Fuji
Electric
Co.
Ltd.
...................................
Japan
70,600
3,188,594
Electronic
Equipment,
Instruments
&
Components
1.2%
Keyence
Corp.
.......................................
Japan
7,000
2,774,291
Murata
Manufacturing
Co.
Ltd.
...........................
Japan
83,900
4,900,475
Yokogawa
Electric
Corp.
................................
Japan
128,500
2,278,642
9,953,408
Entertainment
0.9%
Capcom
Co.
Ltd.
......................................
Japan
27,400
761,624
Nintendo
Co.
Ltd.
.....................................
Japan
13,200
5,902,468
Square
Enix
Holdings
Co.
Ltd.
............................
Japan
18,800
872,283
7,536,375
Equity
Real
Estate
Investment
Trusts
(REITs)
1.7%
Dexus
..............................................
Australia
162,698
1,093,332
Goodman
Group
......................................
Australia
201,549
2,949,681
b
Klepierre
SA
.........................................
France
121,225
2,693,757
Segro
plc
...........................................
United
Kingdom
503,446
6,735,097
13,471,867
Food
&
Staples
Retailing
1.6%
Coles
Group
Ltd.
......................................
Australia
201,581
2,654,890
Jeronimo
Martins
SGPS
SA
.............................
Portugal
78,561
1,818,537
Koninklijke
Ahold
Delhaize
NV
............................
Netherlands
309,799
8,531,889
13,005,316
Franklin
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Core
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financial
statements.
Annual
Report
31
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Food
Products
4.1%
Danone
SA
..........................................
France
64,178
$
3,538,896
Nestle
SA
...........................................
United
States
176,353
21,602,383
a
WH
Group
Ltd.,
144A,
Reg
S
............................
Hong
Kong
4,764,500
3,608,311
Yakult
Honsha
Co.
Ltd.
.................................
Japan
71,300
4,341,971
33,091,561
Gas
Utilities
0.5%
Osaka
Gas
Co.
Ltd.
...................................
Japan
214,200
3,850,766
Health
Care
Equipment
&
Supplies
2.1%
Alcon,
Inc.
...........................................
Switzerland
11,038
868,508
BioMerieux
..........................................
France
21,552
2,332,847
Getinge
AB,
B
........................................
Sweden
77,092
1,740,029
Hoya
Corp.
..........................................
Japan
32,900
3,296,182
Sonova
Holding
AG
....................................
Switzerland
23,694
8,531,910
16,769,476
Health
Care
Providers
&
Services
0.4%
Sonic
Healthcare
Ltd.
..................................
Australia
132,386
3,188,056
Hotels,
Restaurants
&
Leisure
1.2%
Compass
Group
plc
...................................
United
Kingdom
306,594
7,185,478
a
La
Francaise
des
Jeux
SAEM,
144A,
Reg
S
.................
France
59,586
2,128,399
9,313,877
Household
Durables
1.0%
Barratt
Developments
plc
...............................
United
Kingdom
486,564
2,983,464
Persimmon
plc
.......................................
United
Kingdom
33,405
770,527
Sekisui
House
Ltd.
....................................
Japan
173,600
3,074,583
Taylor
Wimpey
plc
.....................................
United
Kingdom
803,590
1,250,772
8,079,346
Independent
Power
and
Renewable
Electricity
Producers
0.3%
RWE
AG
............................................
Germany
67,102
2,760,576
Industrial
Conglomerates
1.7%
CK
Hutchison
Holdings
Ltd.
..............................
United
Kingdom
1,229,500
8,155,565
Siemens
AG
.........................................
Germany
50,880
5,675,641
13,831,206
Insurance
4.4%
Baloise
Holding
AG
....................................
Switzerland
26,531
4,226,050
Japan
Post
Holdings
Co.
Ltd.
............................
Japan
1,009,900
7,270,843
Japan
Post
Insurance
Co.
Ltd.
...........................
Japan
110,700
1,789,715
Medibank
Pvt
Ltd.
.....................................
Australia
1,480,023
3,558,764
Tokio
Marine
Holdings,
Inc.
..............................
Japan
85,900
5,028,392
Zurich
Insurance
Group
AG
..............................
Switzerland
30,751
13,420,159
35,293,923
Interactive
Media
&
Services
0.3%
a
Auto
Trader
Group
plc,
144A,
Reg
S
.......................
United
Kingdom
288,804
2,226,539
Internet
&
Direct
Marketing
Retail
0.4%
a,b
Delivery
Hero
SE,
144A,
Reg
S
...........................
South
Korea
30,466
1,469,946
ZOZO,
Inc.
..........................................
Japan
61,700
1,332,774
2,802,720
IT
Services
1.2%
b
Amadeus
IT
Group
SA
.................................
Spain
36,734
2,142,073
Franklin
Fund
Allocator
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Schedule
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Franklin
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Core
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Fund
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The
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an
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part
of
these
financial
statements.
32
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
IT
Services
(continued)
Fujitsu
Ltd.
..........................................
Japan
54,900
$
7,359,747
9,501,820
Leisure
Products
0.3%
Bandai
Namco
Holdings,
Inc.
............................
Japan
28,700
2,242,030
Life
Sciences
Tools
&
Services
0.5%
Eurofins
Scientific
SE
..................................
Luxembourg
15,287
1,191,809
Sartorius
Stedim
Biotech
................................
France
5,986
2,394,755
3,586,564
Machinery
2.3%
Komatsu
Ltd.
........................................
Japan
312,500
7,224,227
Mitsubishi
Heavy
Industries
Ltd.
..........................
Japan
184,600
6,854,396
NGK
Insulators
Ltd.
....................................
Japan
131,600
1,924,740
Techtronic
Industries
Co.
Ltd.
............................
Hong
Kong
234,000
2,596,595
18,599,958
Marine
1.2%
AP
Moller
-
Maersk
A/S,
A
...............................
Denmark
1,394
3,734,543
Nippon
Yusen
KK
.....................................
Japan
14,500
1,138,951
SITC
International
Holdings
Co.
Ltd.
.......................
China
727,000
2,475,367
ZIM
Integrated
Shipping
Services
Ltd.
......................
Israel
47,300
2,356,486
9,705,347
Media
0.4%
CyberAgent,
Inc.
......................................
Japan
75,300
751,346
b
Informa
plc
..........................................
United
Kingdom
279,261
2,030,966
2,782,312
Metals
&
Mining
4.7%
Anglo
American
plc
....................................
South
Africa
304,988
11,023,755
ArcelorMittal
SA
......................................
Luxembourg
312,971
7,722,607
BHP
Group
Ltd.
......................................
Australia
65,617
1,795,632
Fortescue
Metals
Group
Ltd.
.............................
Australia
317,474
4,085,432
Rio
Tinto
Ltd.
........................................
Australia
114,265
7,916,798
South32
Ltd.
.........................................
Australia
1,948,340
5,310,426
37,854,650
Multiline
Retail
0.3%
Next
plc
............................................
United
Kingdom
29,729
2,474,993
Multi-Utilities
0.7%
E.ON
SE
............................................
Germany
482,548
4,337,888
National
Grid
plc
......................................
United
Kingdom
101,836
1,402,242
5,740,130
Oil,
Gas
&
Consumable
Fuels
5.2%
Aker
BP
ASA
.........................................
Norway
73,756
2,562,408
BP
plc
..............................................
United
Kingdom
1,548,709
7,579,791
Eni
SpA
............................................
Italy
134,197
1,613,206
Equinor
ASA
.........................................
Norway
227,976
8,776,788
OMV
AG
............................................
Austria
26,995
1,149,772
Repsol
SA
...........................................
Spain
549,213
6,842,572
Shell
plc
............................................
Netherlands
122,632
3,271,372
TotalEnergies
SE
.....................................
France
196,386
10,031,372
41,827,281
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
International
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
33
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Personal
Products
2.6%
b
Haleon
plc
..........................................
United
Kingdom
966,763
$
3,435,431
L'Oreal
SA
..........................................
France
46,615
17,624,009
21,059,440
Pharmaceuticals
9.8%
Astellas
Pharma,
Inc.
..................................
Japan
152,100
2,382,009
Bayer
AG
...........................................
Germany
77,510
4,521,399
GSK
plc
............................................
United
States
773,409
16,249,485
Ipsen
SA
............................................
France
21,274
2,152,124
Novo
Nordisk
A/S,
B
...................................
Denmark
200,081
23,304,526
Orion
OYJ,
B
........................................
Finland
58,865
2,810,208
Roche
Holding
AG
....................................
United
States
59,074
19,607,685
Roche
Holding
AG,
BR
.................................
United
States
5,865
2,390,325
Sanofi
SA
...........................................
France
48,491
4,818,958
78,236,719
Professional
Services
1.6%
Randstad
NV
........................................
Netherlands
66,897
3,381,343
Wolters
Kluwer
NV
....................................
Netherlands
85,539
9,290,188
12,671,531
Real
Estate
Management
&
Development
1.3%
b
Fastighets
AB
Balder,
B
.................................
Sweden
354,417
2,264,533
LEG
Immobilien
SE
....................................
Germany
40,833
3,709,669
Nomura
Real
Estate
Holdings,
Inc.
........................
Japan
68,200
1,654,428
Sino
Land
Co.
Ltd.
....................................
Hong
Kong
1,716,000
2,549,681
10,178,311
Road
&
Rail
0.3%
Nippon
Express
Holdings,
Inc.
............................
Japan
44,000
2,629,140
Semiconductors
&
Semiconductor
Equipment
3.3%
ASML
Holding
NV
.....................................
Netherlands
3,711
2,133,033
Disco
Corp.
..........................................
Japan
4,000
977,282
STMicroelectronics
NV
.................................
Singapore
340,352
12,880,758
Tokyo
Electron
Ltd.
....................................
Japan
30,000
10,325,419
26,316,492
Software
1.6%
b
Check
Point
Software
Technologies
Ltd.
....................
Israel
35,500
4,423,300
Nemetschek
SE
......................................
Germany
30,806
2,062,459
Sage
Group
plc
(The)
..................................
United
Kingdom
540,763
4,660,361
SAP
SE
............................................
Germany
11,009
1,026,890
Trend
Micro,
Inc.
......................................
Japan
15,500
900,736
13,073,746
Specialty
Retail
0.7%
JD
Sports
Fashion
plc
..................................
United
Kingdom
526,383
836,087
Kingfisher
plc
........................................
United
Kingdom
1,144,154
3,619,959
USS
Co.
Ltd.
.........................................
Japan
58,900
1,155,724
5,611,770
Technology
Hardware,
Storage
&
Peripherals
0.6%
Canon,
Inc.
..........................................
Japan
121,300
2,869,587
Seiko
Epson
Corp.
....................................
Japan
106,900
1,605,864
4,475,451
Textiles,
Apparel
&
Luxury
Goods
2.5%
Burberry
Group
plc
....................................
United
Kingdom
219,338
4,821,833
Franklin
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of
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financial
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34
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Textiles,
Apparel
&
Luxury
Goods
(continued)
LVMH
Moet
Hennessy
Louis
Vuitton
SE
....................
France
16,813
$
11,674,758
Pandora
A/S
.........................................
Denmark
52,415
3,894,056
20,390,647
Tobacco
1.3%
Imperial
Brands
plc
....................................
United
Kingdom
128,646
2,824,594
Swedish
Match
AB
....................................
Sweden
701,673
7,347,071
10,171,665
Trading
Companies
&
Distributors
2.3%
Marubeni
Corp.
.......................................
Japan
317,000
2,948,710
Mitsubishi
Corp.
......................................
Japan
521,400
15,495,051
18,443,761
Wireless
Telecommunication
Services
1.5%
KDDI
Corp.
..........................................
Japan
370,700
11,885,065
Total
Common
Stocks
(Cost
$759,535,553)
.....................................
793,421,794
Short
Term
Investments
0.9%
a
a
Country
Shares
a
Value
a
a
a
Money
Market
Funds
0.9%
c,d
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
1.445%
....
United
States
7,114,441
7,114,441
Total
Money
Market
Funds
(Cost
$7,114,441)
...................................
7,114,441
Total
Short
Term
Investments
(Cost
$7,114,441
)
.................................
7,114,441
a
Total
Investments
(Cost
$766,649,994)
100.0%
..................................
$800,536,235
Other
Assets,
less
Liabilities
0.0%
†
............................................
221,232
Net
Assets
100.0%
...........................................................
$800,757,467
See
Abbreviations
on
page
58
.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
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
July
31,
2022,
the
aggregate
value
of
these
securities
was
$15,949,384,
representing
2.0%
of
net
assets.
b
Non-income
producing.
c
See
Note
3(d)
regarding
investments
in
affiliated
management
investment
companies.
d
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Fund
Allocator
Series
Financial
Highlights
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U.S.
Core
Equity
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35
a
Year
Ended
July
31,
Year
Ended
July
31,
2020
a
2022
2021
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
............................................
$14.99
$11.31
$10.00
Income
from
investment
operations
b
:
Net
investment
income
c
..................................................
0.24
0.21
0.21
Net
realized
and
unrealized
gains
(losses)
....................................
(0.81)
3.74
1.27
Total
from
investment
operations
.............................................
(0.57)
3.95
1.48
Less
distributions
from:
Net
investment
income
...................................................
(0.20)
(0.20)
(0.17)
Net
realized
gains
......................................................
(1.10)
(0.07)
—
Total
distributions
........................................................
(1.30)
(0.27)
(0.17)
Net
asset
value,
end
of
year
................................................
$13.12
$14.99
$11.31
Total
return
d
............................................................
(4.42)%
35.39%
15.09%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.............
0.01%
0.01%
0.03%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
f
.............
—%
—%
—%
Net
investment
income
....................................................
1.73%
1.60%
2.12%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..............................................
$2,053,864
$1,316,677
$722,523
Portfolio
turnover
rate
.....................................................
128.24%
98.39%
60.94%
a
For
the
period
August
19,
2019
(effective
date)
to
July
31,
2020.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
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36
a
a
Shares
a
Value
a
Common
Stocks
99.0%
Aerospace
&
Defense
1.8%
General
Dynamics
Corp.
..............................................
39,407
$
8,932,385
Lockheed
Martin
Corp.
...............................................
69,859
28,908,353
37,840,738
Air
Freight
&
Logistics
0.8%
United
Parcel
Service,
Inc.,
B
..........................................
83,600
16,292,804
Airlines
0.2%
a
Delta
Air
Lines,
Inc.
..................................................
103,895
3,303,861
a
Auto
Components
0.1%
a
Aptiv
plc
..........................................................
20,110
2,109,338
a
Automobiles
2.0%
a
Tesla,
Inc.
.........................................................
42,609
37,983,793
Thor
Industries,
Inc.
.................................................
42,113
3,551,389
41,535,182
Banks
2.9%
Bank
of
America
Corp.
...............................................
800,982
27,081,201
Bank
OZK
.........................................................
51,940
2,082,794
Comerica,
Inc.
.....................................................
83,462
6,490,840
FNB
Corp.
........................................................
269,784
3,226,617
JPMorgan
Chase
&
Co.
...............................................
49,887
5,754,964
KeyCorp
..........................................................
182,402
3,337,957
Pinnacle
Financial
Partners,
Inc.
........................................
26,477
2,094,331
Popular,
Inc.
.......................................................
58,924
4,576,627
Truist
Financial
Corp.
................................................
41,982
2,118,831
Wintrust
Financial
Corp.
..............................................
23,580
2,028,823
58,792,985
Beverages
1.6%
PepsiCo,
Inc.
......................................................
191,129
33,439,930
Biotechnology
2.5%
AbbVie,
Inc.
.......................................................
132,536
19,020,241
a
Moderna,
Inc.
......................................................
42,343
6,948,063
a
Regeneron
Pharmaceuticals,
Inc.
.......................................
37,873
22,030,345
a
Vertex
Pharmaceuticals,
Inc.
...........................................
12,209
3,423,526
51,422,175
Building
Products
0.8%
a
Builders
FirstSource,
Inc.
.............................................
137,354
9,340,072
Owens
Corning
.....................................................
76,956
7,136,900
16,476,972
Capital
Markets
2.1%
Bank
of
New
York
Mellon
Corp.
(The)
....................................
48,140
2,092,164
Carlyle
Group,
Inc.
(The)
..............................................
118,384
4,606,321
CME
Group,
Inc.
....................................................
35,205
7,022,693
Evercore,
Inc.,
A
....................................................
28,769
2,876,037
FactSet
Research
Systems,
Inc.
........................................
31,079
13,354,025
Morgan
Stanley
.....................................................
73,375
6,185,513
MSCI,
Inc.
.........................................................
6,636
3,194,172
SEI
Investments
Co.
.................................................
83,146
4,602,963
43,933,888
Chemicals
2.1%
CF
Industries
Holdings,
Inc.
...........................................
162,017
15,471,003
Franklin
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U.S.
Core
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a
a
Shares
a
Value
a
Common
Stocks
(continued)
Chemicals
(continued)
Huntsman
Corp.
....................................................
66,726
$
1,932,385
LyondellBasell
Industries
NV,
A
.........................................
199,941
17,818,742
Mosaic
Co.
(The)
...................................................
94,610
4,982,163
Westlake
Corp.
.....................................................
25,989
2,529,769
42,734,062
Commercial
Services
&
Supplies
0.6%
Cintas
Corp.
.......................................................
7,160
3,046,508
Republic
Services,
Inc.
...............................................
60,766
8,425,814
11,472,322
Communications
Equipment
0.6%
a
Arista
Networks,
Inc.
.................................................
21,348
2,489,817
Cisco
Systems,
Inc.
.................................................
179,707
8,153,307
Juniper
Networks,
Inc.
................................................
81,048
2,271,775
12,914,899
Consumer
Finance
0.5%
a
Credit
Acceptance
Corp.
..............................................
5,518
3,177,872
Synchrony
Financial
.................................................
186,232
6,235,047
9,412,919
Containers
&
Packaging
0.3%
Packaging
Corp.
of
America
...........................................
40,530
5,698,923
Distributors
0.2%
Genuine
Parts
Co.
..................................................
21,523
3,290,221
Diversified
Financial
Services
1.7%
a
Berkshire
Hathaway,
Inc.,
B
............................................
114,171
34,319,803
a
Diversified
Telecommunication
Services
0.8%
AT&T,
Inc.
.........................................................
844,890
15,867,034
Electric
Utilities
1.9%
American
Electric
Power
Co.,
Inc.
.......................................
155,313
15,307,649
Exelon
Corp.
.......................................................
344,315
16,007,205
NRG
Energy,
Inc.
...................................................
189,624
7,158,306
38,473,160
Electrical
Equipment
0.6%
Acuity
Brands,
Inc.
..................................................
27,062
4,936,109
Emerson
Electric
Co.
................................................
90,361
8,138,815
13,074,924
Electronic
Equipment,
Instruments
&
Components
0.8%
a
Arrow
Electronics,
Inc.
...............................................
52,894
6,779,424
Jabil,
Inc.
.........................................................
108,752
6,453,344
a
Keysight
Technologies,
Inc.
............................................
14,739
2,396,561
15,629,329
Entertainment
0.1%
World
Wrestling
Entertainment,
Inc.,
A
....................................
33,798
2,342,539
Equity
Real
Estate
Investment
Trusts
(REITs)
3.1%
Apartment
Income
REIT
Corp.
..........................................
61,698
2,797,387
Extra
Space
Storage,
Inc.
.............................................
13,403
2,540,137
Medical
Properties
Trust,
Inc.
..........................................
216,911
3,739,546
Public
Storage
.....................................................
121,226
39,569,379
Franklin
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a
a
Shares
a
Value
a
Common
Stocks
(continued)
Equity
Real
Estate
Investment
Trusts
(REITs)
(continued)
Simon
Property
Group,
Inc.
............................................
19,307
$
2,097,512
Weyerhaeuser
Co.
..................................................
375,416
13,635,109
64,379,070
Food
&
Staples
Retailing
1.5%
Albertsons
Cos.,
Inc.,
A
...............................................
69,841
1,875,231
Costco
Wholesale
Corp.
..............................................
4,670
2,527,871
Kroger
Co.
(The)
....................................................
519,165
24,110,022
Walmart,
Inc.
......................................................
20,176
2,664,241
31,177,365
Food
Products
2.5%
Archer-Daniels-Midland
Co.
...........................................
117,685
9,740,788
Hershey
Co.
(The)
..................................................
113,241
25,814,418
Tyson
Foods,
Inc.,
A
.................................................
168,632
14,841,302
50,396,508
Gas
Utilities
0.1%
National
Fuel
Gas
Co.
................................................
40,027
2,895,553
Health
Care
Equipment
&
Supplies
2.2%
Becton
Dickinson
and
Co.
.............................................
8,065
1,970,360
a
Edwards
Lifesciences
Corp.
...........................................
46,201
4,645,049
a
Hologic,
Inc.
.......................................................
198,285
14,153,583
a
IDEXX
Laboratories,
Inc.
..............................................
50,169
20,026,462
a
QuidelOrtho
Corp.
...................................................
39,103
3,990,070
44,785,524
Health
Care
Providers
&
Services
3.9%
a
Centene
Corp.
.....................................................
27,954
2,598,883
Cigna
Corp.
.......................................................
9,034
2,487,602
CVS
Health
Corp.
...................................................
230,418
22,046,394
Elevance
Health,
Inc.
................................................
42,645
20,345,930
McKesson
Corp.
....................................................
83,801
28,624,746
a
Molina
Healthcare,
Inc.
...............................................
7,300
2,392,356
UnitedHealth
Group,
Inc.
..............................................
4,341
2,354,298
80,850,209
Health
Care
Technology
0.1%
a
Veeva
Systems,
Inc.,
A
...............................................
12,414
2,775,522
a
Hotels,
Restaurants
&
Leisure
1.8%
a
Booking
Holdings,
Inc.
...............................................
3,276
6,341,321
Choice
Hotels
International,
Inc.
........................................
26,797
3,238,953
Domino's
Pizza,
Inc.
.................................................
18,657
7,315,596
McDonald's
Corp.
...................................................
54,923
14,465,071
Yum!
Brands,
Inc.
...................................................
37,191
4,557,385
35,918,326
Household
Durables
0.2%
a
NVR,
Inc.
.........................................................
492
2,161,405
PulteGroup,
Inc.
....................................................
48,065
2,096,596
4,258,001
Household
Products
1.7%
Colgate-Palmolive
Co.
...............................................
257,880
20,305,471
Franklin
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a
a
Shares
a
Value
a
Common
Stocks
(continued)
Household
Products
(continued)
Procter
&
Gamble
Co.
(The)
...........................................
101,381
$
14,082,835
34,388,306
Independent
Power
and
Renewable
Electricity
Producers
0.4%
Vistra
Corp.
........................................................
333,881
8,630,824
Industrial
Conglomerates
0.5%
3M
Co.
...........................................................
66,485
9,523,311
Insurance
2.1%
American
Financial
Group,
Inc.
.........................................
51,866
6,933,447
Assured
Guaranty
Ltd.
...............................................
48,313
2,820,996
Chubb
Ltd.
........................................................
68,638
12,947,872
Marsh
&
McLennan
Cos.,
Inc.
..........................................
23,553
3,861,750
MetLife,
Inc.
.......................................................
116,024
7,338,518
Travelers
Cos.,
Inc.
(The)
.............................................
12,026
1,908,526
Unum
Group
.......................................................
82,262
2,648,014
W
R
Berkley
Corp.
..................................................
85,720
5,360,072
43,819,195
Interactive
Media
&
Services
6.2%
a
Alphabet,
Inc.,
A
....................................................
560,157
65,157,462
a
Alphabet,
Inc.,
C
....................................................
298,666
34,836,402
a
Meta
Platforms,
Inc.,
A
...............................................
174,358
27,740,358
127,734,222
Internet
&
Direct
Marketing
Retail
1.9%
a
Amazon.com,
Inc.
...................................................
287,802
38,838,880
a
IT
Services
3.7%
Accenture
plc,
A
....................................................
22,792
6,980,278
Amdocs
Ltd.
.......................................................
98,024
8,533,969
Automatic
Data
Processing,
Inc.
........................................
9,581
2,310,171
Cognizant
Technology
Solutions
Corp.,
A
..................................
60,271
4,096,017
a
Gartner,
Inc.
.......................................................
24,275
6,444,527
Genpact
Ltd.
.......................................................
144,611
6,952,897
Jack
Henry
&
Associates,
Inc.
..........................................
57,962
12,042,765
Mastercard,
Inc.,
A
..................................................
19,735
6,982,045
Paychex,
Inc.
......................................................
162,092
20,793,162
75,135,831
Life
Sciences
Tools
&
Services
2.0%
a
Mettler-Toledo
International,
Inc.
........................................
17,825
24,058,937
a
Waters
Corp.
......................................................
47,262
17,204,786
41,263,723
Machinery
1.3%
AGCO
Corp.
.......................................................
18,712
2,038,111
Allison
Transmission
Holdings,
Inc.
......................................
76,479
3,202,175
Deere
&
Co.
.......................................................
6,199
2,127,373
Lincoln
Electric
Holdings,
Inc.
..........................................
34,854
4,929,750
Oshkosh
Corp.
.....................................................
51,638
4,446,032
Snap-on,
Inc.
......................................................
41,902
9,388,143
26,131,584
Media
0.5%
Comcast
Corp.,
A
...................................................
287,107
10,772,255
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
U.S.
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
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Report
The
accompanying
notes
are
an
integral
part
of
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financial
statements.
40
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Metals
&
Mining
0.7%
Nucor
Corp.
.......................................................
102,843
$
13,966,080
Multiline
Retail
0.3%
a
Dollar
Tree,
Inc.
....................................................
12,488
2,065,016
Macy's,
Inc.
........................................................
217,443
3,837,869
5,902,885
Multi-Utilities
1.1%
DTE
Energy
Co.
....................................................
147,195
19,179,508
Sempra
Energy
.....................................................
18,437
3,056,855
22,236,363
Oil,
Gas
&
Consumable
Fuels
4.8%
APA
Corp.
.........................................................
129,570
4,816,117
Chevron
Corp.
.....................................................
106,760
17,485,153
ConocoPhillips
.....................................................
415,847
40,515,973
Continental
Resources,
Inc.
...........................................
28,202
1,942,836
Devon
Energy
Corp.
.................................................
32,231
2,025,718
EOG
Resources,
Inc.
................................................
73,115
8,131,850
Exxon
Mobil
Corp.
...................................................
190,852
18,499,284
Valero
Energy
Corp.
.................................................
54,294
6,014,147
99,431,078
Paper
&
Forest
Products
0.1%
Louisiana-Pacific
Corp.
...............................................
37,599
2,392,424
Pharmaceuticals
3.5%
Johnson
&
Johnson
.................................................
45,907
8,011,690
Merck
&
Co.,
Inc.
...................................................
341,483
30,508,091
Pfizer,
Inc.
.........................................................
657,842
33,227,599
71,747,380
Professional
Services
0.3%
Robert
Half
International,
Inc.
..........................................
86,737
6,864,366
Real
Estate
Management
&
Development
0.3%
a
CBRE
Group,
Inc.,
A
.................................................
32,670
2,797,205
a
Jones
Lang
LaSalle,
Inc.
..............................................
21,671
4,132,010
6,929,215
Road
&
Rail
0.8%
a
Avis
Budget
Group,
Inc.
..............................................
17,958
3,268,895
Landstar
System,
Inc.
................................................
13,798
2,160,491
Old
Dominion
Freight
Line,
Inc.
.........................................
28,243
8,572,033
Ryder
System,
Inc.
..................................................
39,014
3,055,576
17,056,995
Semiconductors
&
Semiconductor
Equipment
5.0%
Broadcom,
Inc.
.....................................................
9,363
5,013,699
Intel
Corp.
.........................................................
241,302
8,761,676
KLA
Corp.
.........................................................
6,424
2,463,861
Micron
Technology,
Inc.
...............................................
542,123
33,535,729
QUALCOMM,
Inc.
...................................................
180,726
26,216,113
Texas
Instruments,
Inc.
...............................................
150,155
26,861,228
102,852,306
Software
11.2%
a
Adobe,
Inc.
........................................................
5,235
2,146,978
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
U.S.
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
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accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
41
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Software
(continued)
a
Cadence
Design
Systems,
Inc.
.........................................
159,633
$
29,704,509
a
Dropbox,
Inc.,
A
....................................................
93,407
2,124,075
a
Fair
Isaac
Corp.
....................................................
20,510
9,476,235
a
Fortinet,
Inc.
.......................................................
247,797
14,781,091
a
Manhattan
Associates,
Inc.
............................................
50,660
7,126,342
Microsoft
Corp.
.....................................................
539,038
151,329,528
a
Synopsys,
Inc.
.....................................................
23,455
8,619,713
a
Teradata
Corp.
.....................................................
77,568
2,970,079
a
Zoom
Video
Communications,
Inc.,
A
....................................
16,941
1,759,492
230,038,042
Specialty
Retail
2.5%
a
AutoNation,
Inc.
....................................................
31,526
3,743,397
a
AutoZone,
Inc.
.....................................................
9,573
20,461,234
Best
Buy
Co.,
Inc.
...................................................
27,834
2,142,940
Home
Depot,
Inc.
(The)
...............................................
33,602
10,112,186
Lithia
Motors,
Inc.,
A
.................................................
7,889
2,092,794
Penske
Automotive
Group,
Inc.
.........................................
21,693
2,483,632
a
Ulta
Beauty,
Inc.
....................................................
9,229
3,589,250
Williams-Sonoma,
Inc.
...............................................
43,162
6,233,456
50,858,889
Technology
Hardware,
Storage
&
Peripherals
6.0%
Apple,
Inc.
........................................................
690,866
112,272,634
HP,
Inc.
...........................................................
328,328
10,962,872
123,235,506
Textiles,
Apparel
&
Luxury
Goods
0.4%
a
Lululemon
Athletica,
Inc.
..............................................
12,654
3,929,194
NIKE,
Inc.,
B
.......................................................
43,885
5,043,264
8,972,458
Tobacco
0.6%
Altria
Group,
Inc.
....................................................
256,440
11,247,458
Trading
Companies
&
Distributors
0.5%
Fastenal
Co.
.......................................................
42,441
2,179,770
WW
Grainger,
Inc.
...................................................
16,314
8,867,148
11,046,918
Wireless
Telecommunication
Services
0.2%
a
T-Mobile
US,
Inc.
...................................................
28,206
4,035,150
a
Total
Common
Stocks
(Cost
$1,853,092,960)
....................................
2,032,865,730
a
a
a
a
Franklin
Fund
Allocator
Series
Schedule
of
Investments
Franklin
U.S.
Core
Equity
(IU)
Fund
(continued)
franklintempleton.com
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The
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statements.
42
See
Abbreviations
on
page
58
.
Short
Term
Investments
1.0%
a
a
Shares
a
Value
a
Money
Market
Funds
1.0%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
1.445%
..................
19,849,812
$
19,849,812
Total
Money
Market
Funds
(Cost
$19,849,812)
..................................
19,849,812
Total
Short
Term
Investments
(Cost
$19,849,812
)
................................
19,849,812
a
Total
Investments
(Cost
$1,872,942,772)
100.0%
................................
$2,052,715,542
Other
Assets,
less
Liabilities
0.0%
†
............................................
1,148,042
Net
Assets
100.0%
...........................................................
$2,053,863,584
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Non-income
producing.
b
See
Note
3(d)
regarding
investments
in
affiliated
management
investment
companies.
c
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Fund
Allocator
Series
Financial
Statements
Statements
of
Assets
and
Liabilities
July
31,
2022
franklintempleton.com
The
accompanying
notes
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integral
part
of
these
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statements.
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43
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
.................................
$108,641,209
$759,535,553
$1,853,092,960
Cost
-
Non-controlled
affiliates
(Note
3
d
)
......................
2,085,742
7,114,441
19,849,812
Value
-
Unaffiliated
issuers
................................
$104,767,693
$793,421,794
$2,032,865,730
Value
-
Non-controlled
affiliates
(Note
3
d
)
.....................
2,085,742
7,114,441
19,849,812
Cash
..................................................
—
5,251
40,500
Foreign
currency,
at
value
(cost
$617,056,
$2,209
and
$–
respectively)
460,763
2,214
—
Receivables:
Investment
securities
sold
.................................
235,100
30,290,076
78,755,579
Capital
shares
sold
......................................
3,223,143
818,970
—
Dividends
.............................................
458,170
1,090,991
3,080,646
European
Union
tax
reclaims
(Note
1
c
)
.......................
—
81,946
—
Affiliates
..............................................
28,363
37,918
35,947
Total
assets
........................................
111,258,974
832,863,601
2,134,628,214
Liabilities:
Payables:
Investment
securities
purchased
............................
1,137
31,379
—
Capital
shares
redeemed
.................................
1,945,242
31,989,183
80,705,289
Reports
to
shareholders
fees
..............................
3,919
3,758
3,770
Professional
fees
.......................................
59,939
66,181
53,753
Trustees'
fees
and
expenses
...............................
1,067
777
552
Deferred
tax
.............................................
67,164
—
—
Accrued
expenses
and
other
liabilities
.........................
51,670
14,856
1,266
Total
liabilities
.......................................
2,130,138
32,106,134
80,764,630
Net
assets,
at
value
...............................
$109,128,836
$800,757,467
$2,053,863,584
Net
assets
consist
of:
Paid-in
capital
...........................................
$120,210,127
$797,149,055
$1,846,134,135
Total
distributable
earnings
(losses)
...........................
(11,081,291)
3,608,412
207,729,449
Net
assets,
at
value
...............................
$109,128,836
$800,757,467
$2,053,863,584
Shares
outstanding
.......................................
11,822,787
78,668,419
156,546,454
Net
asset
value
per
share
..................................
$9.23
$10.18
$13.12
Franklin
Fund
Allocator
Series
Financial
Statements
Statements
of
Operations
for
the
year
ended
July
31,
2022
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
44
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$540,267,
$1,354,276
and
$4,106,
respectively)
Unaffiliated
issuers:
Paid
in
cash
..........................................
$3,675,327
$11,891,140
$23,095,584
Non-controlled
affiliates
(Note
3
d
)
...........................
1,716
38,217
65,991
Other
income
a
...........................................
1,428
7,943
23,470
Total
investment
income
.................................
3,678,471
11,937,300
23,185,045
Expenses:
Custodian
fees
(Note
4
)
....................................
67,589
23,139
4,303
Reports
to
shareholders
fees
................................
1,555
(881)
(6,138)
Registration
and
filing
fees
..................................
4,726
4,888
4,881
Professional
fees
.........................................
86,449
81,736
66,197
Trustees'
fees
and
expenses
................................
2,119
4,295
12,760
Pricing
fees
.............................................
1,276
1,591
6,036
Interest
expense
(Note
3e
)
..................................
3,416
9,180
—
Other
..................................................
29,370
31,076
26,410
Total
expenses
.......................................
196,500
155,024
114,449
Expense
reductions
(Note
4
)
.............................
(1)
—
(2,228)
Expenses
waived/paid
by
affiliates
(Note
3
d
and
3
e
)
............
(196,499)
(155,024)
(112,221)
Net
expenses
.......................................
—
—
��
Net
investment
income
..............................
3,678,471
11,937,300
23,185,045
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$172,275,
$–
and
$–
respectively)
Unaffiliated
issuers
....................................
(5,652,827)
(24,023,401)
51,240,154
Foreign
currency
transactions
..............................
(118,250)
691,460
—
Net
realized
gain
(loss)
................................
(5,771,077)
(23,331,941)
51,240,154
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
....................................
(21,421,211)
(27,932,073)
(65,826,833)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
...........................................
(69,526)
(91,835)
—
Change
in
deferred
taxes
on
unrealized
appreciation
.............
376,207
—
—
Net
change
in
unrealized
appreciation
(depreciation)
..........
(21,114,530)
(28,023,908)
(65,826,833)
Net
realized
and
unrealized
gain
(loss)
..........................
(26,885,607)
(51,355,849)
(14,586,679)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
........
$(23,207,136)
$(39,418,549)
$8,598,366
a
Other
income
includes
payments
by
Advisers
for
acquired
fund
fees
and
expenses
(See
Note
3e).
Franklin
Fund
Allocator
Series
Financial
Statements
Statements
of
Changes
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Net
Assets
franklintempleton.com
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45
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Year
Ended
July
31,
2022
Year
Ended
July
31,
2021
Year
Ended
July
31,
2022
Year
Ended
July
31,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
............
$3,678,471
$3,319,305
$11,937,300
$9,329,418
Net
realized
gain
(loss)
............
(5,771,077)
12,103,612
(23,331,941)
24,003,767
Net
change
in
unrealized
appreciation
(depreciation)
.................
(21,114,530)
5,860,767
(28,023,908)
50,825,451
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
(23,207,136)
21,283,684
(39,418,549)
84,158,636
Distributions
to
shareholders
.........
(3,917,204)
(4,129,235)
(33,759,067)
(9,874,237)
Capital
share
transactions
(Note
2
)
.....
19,610,017
(39,101,774)
513,559,733
4,940,723
Net
increase
(decrease)
in
net
assets
.....................
(7,514,323)
(21,947,325)
440,382,117
79,225,122
Net
assets:
Beginning
of
year
..................
116,643,159
138,590,484
360,375,350
281,150,228
End
of
year
......................
$109,128,836
$116,643,159
$800,757,467
$360,375,350
Franklin
Fund
Allocator
Series
Financial
Statements
Statements
of
Changes
in
Net
Assets
(continued)
franklintempleton.com
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Report
The
accompanying
notes
are
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integral
part
of
these
financial
statements.
46
Franklin
U.S.
Core
Equity
(IU)
Fund
Year
Ended
July
31,
2022
Year
Ended
July
31,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$23,185,045
$13,449,131
Net
realized
gain
(loss)
.................................................
51,240,154
87,253,053
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(65,826,833)
156,834,679
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
8,598,366
257,536,863
Distributions
to
shareholders
..............................................
(118,026,381)
(17,301,985)
Capital
share
transactions
(Note
2
)
..........................................
846,614,494
353,919,187
Net
increase
(decrease)
in
net
assets
...................................
737,186,479
594,154,065
Net
assets:
Beginning
of
year
.......................................................
1,316,677,105
722,523,040
End
of
year
...........................................................
$2,053,863,584
$1,316,677,105
Franklin
Fund
Allocator
Series
47
franklintempleton.com
Annual
Report
Notes
to
Financial
Statements
1.
Organization
and
Significant
Accounting
Policies
Franklin
Fund
Allocator
Series (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of
eighteen
separate
funds,
three
of
which
are
included
in
this
report
(Funds)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
The
following
summarizes
the
Funds’
significant
accounting
policies.
a.
Financial
Instrument
Valuation
The
Funds'
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
Funds
calculate
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
Funds'
administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Funds
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value.
Equity
securities
and
exchange
traded
funds
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities.
Investments
in
open-end
mutual
funds
are
valued
at
the
closing
NAV.
The
Funds
have
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the
Funds
primarily
employ
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.
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
Funds'
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 Funds'
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
Funds'
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
July
31,
2022,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
inputs
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Funds'
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Funds'
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
Funds
for
financial
reporting
purposes.
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
48
franklintempleton.com
Annual
Report
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
Funds
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
Funds
do
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
Statements
of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Income
and
Deferred
Taxes
It
is each
Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. Each
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
Funds
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
the
Funds
invest.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Funds
invest.
When
a
capital
gain
tax
is
determined
to
apply,
certain
or
all
Funds
record
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
As
a
result
of
several
court
cases,
in
certain
countries
across
the
European
Union,
certain
or
all
Funds
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims). Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
Statements of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statements
of
Assets
and
Liabilities.
Any
fees
associated
with
these
filings
are
reflected
in
other
expenses
in
the
Statements
of
Operations.
When
uncertainty
exists
as
to
the
ultimate
resolution
of
these
proceedings,
the
likelihood
of
receipt
of
these
EU
reclaims,
and
the
potential
timing
of
payment,
no
amounts
are
reflected
in
the
financial
statements.
For
U.S.
income
tax
purposes,
EU
reclaims
received
by
the
Funds,
if
any,
reduce
the
amount
of
foreign
taxes
Fund
shareholders
can
use
as
tax
deductions
or credits
on
their income
tax
returns.
Each
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
July
31,
2022,
each
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).
d.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
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
Funds.
Distributions
to
shareholders
are
recorded
on
the
ex-
dividend
date. Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
1.
Organization
and
Significant
Accounting
Policies
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
49
franklintempleton.com
Annual
Report
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.
e.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
f.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Funds,
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
July
31,
2022,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Funds’
shares
were
as
follows:
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Shares
Amount
Shares
Amount
Class
A
Year
ended
July
31,
2022
Shares
sold
...................................
3,389,370
$35,059,730
60,523,652
$614,058,141
Shares
issued
in
reinvestment
of
distributions
..........
381,790
3,917,204
2,902,155
33,759,067
Shares
redeemed
...............................
(1,809,754)
(19,366,917)
(12,298,376)
(134,257,475)
Net
increase
(decrease)
..........................
1,961,406
$19,610,017
51,127,431
$513,559,733
Year
ended
July
31,
2021
Shares
sold
...................................
427,047
$4,782,057
1,596,753
$20,522,251
Shares
issued
in
reinvestment
of
distributions
..........
364,815
4,129,235
838,534
9,874,237
Shares
redeemed
...............................
(4,048,308)
(48,013,066)
(2,169,981)
(25,455,765)
Net
increase
(decrease)
..........................
(3,256,446)
$(39,101,774)
265,306
$4,940,723
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
50
franklintempleton.com
Annual
Report
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
Funds
are
also
officers
and/or
trustees
of
the
following
subsidiaries:
a.
Management
Fees
Advisers
provides
investment
management
services
to
the
Funds.
The
Funds
do
not
pay
a
fee
for
these
services.
Advisers
and
its
affiliates,
receive
compensation
from
the
investment
companies
that
invest
in
the
Funds.
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Funds
and
is
not
paid
by
the
Funds
for
the
services.
c.
Transfer
Agent
Fees
Investor
Services
provides
shareholder
services
to
the
Funds.
The
Funds
do
not
pay
a
fee
for
these
services.
d.
Investments
in
Affiliated
Management
Investment
Companies
Certain
or
all
Funds
invest
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
Funds
do
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Advisers
has
contractually
agreed
to
reimburse
expenses
of
the
Funds
in
an
amount
equal
to
fees
indirectly
borne
by
the
Funds
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statements
of
Operations.
During
the
year
ended
July
31,
2022,
investments
in
affiliated
management
investment
companies
were
as
follows:
Franklin
U.S.
Core
Equity
(IU)
Fund
Shares
Amount
Class
A
Year
ended
July
31,
2022
Shares
sold
...................................
80,697,663
$1,013,215,277
Shares
issued
in
reinvestment
of
distributions
..........
8,310,364
118,026,381
Shares
redeemed
...............................
(20,294,121)
(284,627,164)
Net
increase
(decrease)
..........................
68,713,906
$846,614,494
Year
ended
July
31,
2021
Shares
sold
...................................
27,745,453
$401,283,967
Shares
issued
in
reinvestment
of
distributions
..........
1,368,212
17,301,985
Shares
redeemed
...............................
(5,164,118)
(64,666,765)
Net
increase
(decrease)
..........................
23,949,547
$353,919,187
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
51
franklintempleton.com
Annual
Report
e.
Waiver
and
Expense
Reimbursements
Advisers
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
and
to
assume
as
its
own
expense
certain
expenses
otherwise
payable
by
the
Funds
so
the
operating expenses
(excluding
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations),
interest
expense
and
acquired
fund
fees
and
expenses
of
the
Funds
do not
exceed
0.00%
based
on
the
average
net
assets
of
each
class
until
November
30,
2022.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Funds’
fiscal
year
end.
Acquired
fund
fees
and
expenses
are
indirect
expenses,
and
therefore
Advisers
may
make
payments,
if
necessary,
to
the
Funds
to
offset
these
estimated
indirect
expenses.
Payments
by
Advisers
for
the
year
ended
July
31,
2022,
are
reflected
as
other
income
in
the
Statements
of
Operations.
aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a
a
a
a
a
a
a
a
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
1.445%
$
1,279,965
$
41,396,360
$
(40,590,583)
$
—
$
—
$
2,085,742
2,085,742
$
1,716
Total
Affiliated
Securities
...
$1,279,965
$41,396,360
$(40,590,583)
$—
$—
$2,085,742
$1,716
Franklin
International
Core
Equity
(IU)
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
1.445%
$
5,932,836
$
542,519,704
$
(541,338,099)
$
—
$
—
$
7,114,441
7,114,441
$
38,217
Total
Affiliated
Securities
...
$5,932,836
$542,519,704
$(541,338,099)
$—
$—
$7,114,441
$38,217
Franklin
U.S.
Core
Equity
(IU)
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
1.445%
$
14,712,778
$
1,082,796,661
$
(1,077,659,627)
$
—
$
—
$
19,849,812
19,849,812
$
65,991
Total
Affiliated
Securities
...
$14,712,778
$1,082,796,661
$(1,077,659,627)
$—
$—
$19,849,812
$65,991
3.
Transactions
with
Affiliates
(continued)
d.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
52
franklintempleton.com
Annual
Report
f.
Other
Affiliated
Transactions
At
July
31,
2022,
Franklin
Fund
Allocator
Series
owned
a
percentage
of
the
Funds’
outstanding
shares
as
follows:
4.
Expense
Offset
Arrangement
The
Funds
have entered
into
an
arrangement
with
their
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Funds'
custodian
expenses.
During
the year
ended
July
31,
2022,
the
custodian
fees
were
reduced
as
noted
in
the
Statements
of
Operations.
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
July
31,
2022,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Funds
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
July
31,
2022,
the
deferred
losses
were
as
follows:
Shares
Percentage
of
Outstanding
Shares
a
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
Conservative
Allocation
Fund
1,334,621
11.3%
Franklin
Moderate
Allocation
Fund
3,299,139
28.0%
Franklin
Growth
Allocation
Fund
3,128,719
26.5%
Franklin
International
Core
Equity
(IU)
Fund
Franklin
Moderate
Allocation
Fund
9,705,147
12.3%
Franklin
Growth
Allocation
Fund
9,193,489
11.7%
Franklin
Growth
Allocation
529
Portfolio
4,816,020
6.1%
Franklin
Aggressive
Growth
Allocation
529
Portfolio
4,507,510
5.7%
Franklin
Growth
Allocation
Age
15-16
Years
529
Portfolio
4,365,050
5.6%
Franklin
Growth
Allocation
Age
13-14
Years
529
Portfolio
4,197,273
5.3%
Franklin
U.S.
Core
Equity
(IU)
Fund
Franklin
Conservative
Allocation
Fund
12,935,124
8.3%
Franklin
Moderate
Allocation
Fund
31,719,468
20.3%
Franklin
Growth
Allocation
Fund
27,511,661
17.6%
a
Investment
activities
of
significant
shareholders
could
have
a
material
impact
on
the
Fund.
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
1
1
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
.............................
$
4,105,315
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
Post-October
capital
loss
...................
$20,633,740
$13,775,565
3.
Transactions
with
Affiliates
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
53
franklintempleton.com
Annual
Report
The
tax
character
of
distributions
paid
during
the
years
ended
July
31,
2022
and
2021,
was
as
follows:
At
July
31,
2022,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatment
of
foreign
currency
transactions,
passive
foreign
investment
company
shares,
foreign
capital
gains
tax,
corporate
actions,
and
wash
sales.
Franklin
U.S.
Core
Equity
(IU)
Fund
utilized
a
tax
accounting
practice
to
treat
a
portion
of
the
proceeds
from
capital
shares
redeemed
as
a
distribution
from
net
investment
income
and
realized
capital
gains.
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
2022
2021
2022
2021
Distributions
paid
from:
Ordinary
income
........................
$3,917,204
$4,129,235
$20,770,073
$9,874,237
Long
term
capital
gain
....................
—
—
12,988,994
—
$3,917,204
$4,129,235
$33,759,067
$9,874,237
Franklin
U.S.
Core
Equity
(IU)
Fund
2022
2021
Distributions
paid
from:
Ordinary
income
........................
$79,116,191
$17,301,985
Long
term
capital
gain
....................
38,910,190
—
$118,026,381
$17,301,985
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
a
a
a
a
Cost
of
investments
.......................
$114,079,202
$777,628,527
$1,892,189,835
Unrealized
appreciation
.....................
$8,295,336
$43,819,286
$214,308,363
Unrealized
depreciation
.....................
(15,521,103)
(20,911,578)
(53,782,656)
Net
unrealized
appreciation
(depreciation)
.......
$(7,225,767)
$22,907,708
$160,525,707
Distributable
earnings:
Undistributed
ordinary
income
................
$433,313
$1,311,796
$—
Undistributed
long
term
capital
gains
...........
—
—
60,979,307
Total
distributable
earnings
..................
$433,313
$1,311,796
$60,979,307
5.
Income
Taxes
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
54
franklintempleton.com
Annual
Report
6.
Investment
Transactions
Purchases
and
sales
of
investments
for
the
year
ended
July
31,
2022,
were
as
follows:
7.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Political
and
financial
uncertainty
in
many
foreign
regions
may
increase
market
volatility
and
the
economic
risk
of
investing
in
foreign
securities.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Investing
in
China
A
shares
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities.
In
general,
A
shares
are
issued
by
companies
incorporated
in
the
People’s
Republic
of
China
(PRC)
and
listed
on
the
Shanghai
and
Shenzhen
Stock
Exchanges
and
available
for
investment
by
domestic
(Chinese)
investors
and
holders
of
a
QFII
license
and,
in
the
case
of
certain
eligible
A
shares,
through
the
Shanghai
and
Shenzhen
Stock
Connect
programs.
The
Shanghai
and
Shenzhen
Stock
Exchanges
are,
however,
substantially
smaller,
less
liquid
and
more
volatile
than
the
major
securities
markets
in
the
United
States.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
imposed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
To
the
extent
that
the
Funds
have
exposure
to
Russian
investments
or
investments
in
countries
affected
by
the
invasion,
the
Funds’
ability
to
price,
buy,
sell,
receive
or
deliver
such
investments was
impaired.
The
Funds
could
determine
at
any
time
that
certain
of
the
most
affected
securities
have
little
or
no
value.
In
addition,
any
exposure
that
the
Funds
may
have
to
counterparties
in
Russia
or
in
countries
affected
by
the
invasion
could
negatively
impact
the
Funds’
portfolio.
The
extent
and
duration
of
Russia’s
military
actions
and
the
repercussions
of
such
actions
(including
any
retaliatory
actions
or
countermeasures
that
may
be
taken
by
those
subject
to
sanctions)
are
impossible
to
predict,
but
could
result
in
significant
market
disruptions,
including
in
the
oil
and
natural
gas
markets,
and
may
negatively
affect
global
supply
chains,
inflation
and
global
growth.
These
and
any
related
events
could
significantly
impact
the
Funds’
performance
and
the
value
of
an
investment
in
the
Funds,
even
beyond
any
direct
exposure
the
Funds
may
have
to
Russian
issuers
or
issuers
in
other
countries
affected
by
the
invasion.
The
Valuation
Committee
determined
that
based
on
their
analysis
of
the
market
and
access
to
market
participants,
the
Russian
equity
securities
held
by
the
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
had
little
or
no
value
at
July
31,
2022.
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
Purchases
..............................
$156,143,613
$1,007,168,998
$2,488,246,059
Sales
..................................
$139,528,655
$514,725,038
$1,741,501,807
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
55
franklintempleton.com
Annual
Report
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
Funds, their ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and their ability
to
achieve their investment
objectives.
9.
Fair
Value
Measurements
The Funds
follow
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Funds'
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the Funds' 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 Funds'
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
July
31,
2022,
in
valuing
the
Funds’
assets
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Air
Freight
&
Logistics
...................
$
388,968
$
—
$
—
$
388,968
Airlines
..............................
—
242,682
—
242,682
Auto
Components
......................
—
300,758
—
300,758
Automobiles
..........................
—
3,391,901
—
3,391,901
Banks
...............................
955,752
13,497,585
—
a
14,453,337
Beverages
...........................
821,169
1,346,580
—
2,167,749
Biotechnology
.........................
—
405,286
—
405,286
Capital
Markets
........................
—
1,245,016
—
1,245,016
Chemicals
...........................
—
2,953,111
—
a
2,953,111
Commercial
Services
&
Supplies
...........
—
101,125
—
101,125
Communications
Equipment
..............
—
189,345
—
189,345
Construction
Materials
..................
—
310,836
—
310,836
Consumer
Finance
.....................
—
150,140
—
150,140
Diversified
Financial
Services
.............
—
664,473
—
664,473
Diversified
Telecommunication
Services
.....
—
2,179,537
—
2,179,537
Electric
Utilities
........................
—
—
—
a
—
Electrical
Equipment
....................
—
1,309,452
—
1,309,452
Electronic
Equipment,
Instruments
&
Components
........................
—
2,371,216
—
2,371,216
Entertainment
.........................
—
1,071,891
—
1,071,891
Food
&
Staples
Retailing
.................
876,139
756,176
—
1,632,315
Food
Products
........................
2,012,082
1,824,830
—
3,836,912
Gas
Utilities
..........................
—
808,461
—
808,461
Health
Care
Equipment
&
Supplies
.........
—
110,575
—
110,575
Health
Care
Providers
&
Services
..........
—
975,065
—
975,065
Hotels,
Restaurants
&
Leisure
.............
608,797
332,639
—
941,436
Household
Durables
....................
—
267,967
—
267,967
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
56
franklintempleton.com
Annual
Report
Level
1
Level
2
Level
3
Total
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Common
Stocks:
Household
Products
....................
$
—
$
347,312
$
—
$
347,312
Independent
Power
and
Renewable
Electricity
Producers
..........................
—
1,098,627
—
1,098,627
Industrial
Conglomerates
................
297,622
753,104
—
1,050,726
Insurance
............................
—
754,093
—
754,093
Interactive
Media
&
Services
..............
182,019
4,501,938
—
4,683,957
Internet
&
Direct
Marketing
Retail
..........
947,615
4,014,629
—
4,962,244
IT
Services
...........................
—
3,590,764
—
3,590,764
Life
Sciences
Tools
&
Services
............
—
894,082
—
894,082
Machinery
............................
—
391,157
—
391,157
Marine
..............................
—
2,203,931
—
2,203,931
Metals
&
Mining
.......................
1,211,236
2,597,138
—
a
3,808,374
Oil,
Gas
&
Consumable
Fuels
.............
248,177
4,957,991
—
5,206,168
Pharmaceuticals
.......................
—
2,562,701
—
2,562,701
Real
Estate
Management
&
Development
....
—
3,324,953
—
3,324,953
Semiconductors
&
Semiconductor
Equipment
.
634,060
9,733,432
—
10,367,492
Software
.............................
—
151,176
—
151,176
Specialty
Retail
........................
—
974,093
—
974,093
Technology
Hardware,
Storage
&
Peripherals
.
—
4,896,282
—
4,896,282
Textiles,
Apparel
&
Luxury
Goods
..........
—
1,286,771
—
1,286,771
Thrifts
&
Mortgage
Finance
...............
—
550,755
—
550,755
Transportation
Infrastructure
..............
566,217
637,429
—
1,203,646
Wireless
Telecommunication
Services
.......
—
2,419,915
—
a
2,419,915
Preferred
Stocks
........................
5,568,920
—
—
5,568,920
Short
Term
Investments
...................
2,085,742
—
—
2,085,742
Total
Investments
in
Securities
...........
$17,404,515
$89,448,920
b
$—
$106,853,435
Franklin
International
Core
Equity
(IU)
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Aerospace
&
Defense
...................
—
11,635,618
—
11,635,618
Air
Freight
&
Logistics
...................
—
4,058,571
—
4,058,571
Auto
Components
......................
—
4,234,140
—
4,234,140
Automobiles
..........................
—
28,218,826
—
28,218,826
Banks
...............................
—
61,240,478
—
61,240,478
Beverages
...........................
—
17,490,419
—
17,490,419
Biotechnology
.........................
—
8,850,854
—
8,850,854
Building
Products
......................
—
10,743,762
—
10,743,762
Capital
Markets
........................
—
26,521,481
—
26,521,481
Chemicals
...........................
—
23,250,277
—
23,250,277
Commercial
Services
&
Supplies
...........
—
2,222,098
—
2,222,098
Construction
Materials
..................
—
3,325,437
—
3,325,437
Diversified
Financial
Services
.............
—
6,326,751
—
6,326,751
Diversified
Telecommunication
Services
.....
—
19,247,520
—
19,247,520
Electric
Utilities
........................
—
18,233,133
—
18,233,133
Electrical
Equipment
....................
—
3,188,594
—
3,188,594
Electronic
Equipment,
Instruments
&
Components
........................
—
9,953,408
—
9,953,408
Entertainment
.........................
—
7,536,375
—
7,536,375
Equity
Real
Estate
Investment
Trusts
(REITs)
.
—
13,471,867
—
13,471,867
Food
&
Staples
Retailing
.................
—
13,005,316
—
13,005,316
Food
Products
........................
—
33,091,561
—
33,091,561
Gas
Utilities
..........................
—
3,850,766
—
3,850,766
9.
Fair
Value
Measurements
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
57
franklintempleton.com
Annual
Report
Level
1
Level
2
Level
3
Total
Franklin
International
Core
Equity
(IU)
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Common
Stocks:
Health
Care
Equipment
&
Supplies
.........
$
—
$
16,769,476
$
—
$
16,769,476
Health
Care
Providers
&
Services
..........
—
3,188,056
—
3,188,056
Hotels,
Restaurants
&
Leisure
.............
—
9,313,877
—
9,313,877
Household
Durables
....................
—
8,079,346
—
8,079,346
Independent
Power
and
Renewable
Electricity
Producers
..........................
—
2,760,576
—
2,760,576
Industrial
Conglomerates
................
—
13,831,206
—
13,831,206
Insurance
............................
—
35,293,923
—
35,293,923
Interactive
Media
&
Services
..............
—
2,226,539
—
2,226,539
Internet
&
Direct
Marketing
Retail
..........
—
2,802,720
—
2,802,720
IT
Services
...........................
—
9,501,820
—
9,501,820
Leisure
Products
.......................
—
2,242,030
—
2,242,030
Life
Sciences
Tools
&
Services
............
—
3,586,564
—
3,586,564
Machinery
............................
—
18,599,958
—
18,599,958
Marine
..............................
2,356,486
7,348,861
—
9,705,347
Media
...............................
—
2,782,312
—
2,782,312
Metals
&
Mining
.......................
—
37,854,650
—
37,854,650
Multiline
Retail
........................
—
2,474,993
—
2,474,993
Multi-Utilities
..........................
—
5,740,130
—
5,740,130
Oil,
Gas
&
Consumable
Fuels
.............
—
41,827,281
—
41,827,281
Personal
Products
.....................
3,435,431
17,624,009
—
21,059,440
Pharmaceuticals
.......................
—
78,236,719
—
78,236,719
Professional
Services
...................
—
12,671,531
—
12,671,531
Real
Estate
Management
&
Development
....
—
10,178,311
—
10,178,311
Road
&
Rail
..........................
—
2,629,140
—
2,629,140
Semiconductors
&
Semiconductor
Equipment
.
—
26,316,492
—
26,316,492
Software
.............................
4,423,300
8,650,446
—
13,073,746
Specialty
Retail
........................
—
5,611,770
—
5,611,770
Technology
Hardware,
Storage
&
Peripherals
.
—
4,475,451
—
4,475,451
Textiles,
Apparel
&
Luxury
Goods
..........
—
20,390,647
—
20,390,647
Tobacco
.............................
—
10,171,665
—
10,171,665
Trading
Companies
&
Distributors
..........
—
18,443,761
—
18,443,761
Wireless
Telecommunication
Services
.......
—
11,885,065
—
11,885,065
Short
Term
Investments
...................
7,114,441
—
—
7,114,441
Total
Investments
in
Securities
...........
$17,329,658
$783,206,577
c
$—
$800,536,235
Franklin
U.S.
Core
Equity
(IU)
Fund
Assets:
Investments
in
Securities:
d
Common
Stocks
........................
2,032,865,730
—
—
2,032,865,730
Short
Term
Investments
...................
19,849,812
—
—
19,849,812
Total
Investments
in
Securities
...........
$2,052,715,542
$—
$—
$2,052,715,542
a
Includes
securities
determined
to
have
no
value
at
July
31,
2022.
b
Includes
foreign
securities
valued
at
$89,448,920,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
c
Includes
foreign
securities
valued
at
$783,206,577,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
d
For
detailed
categories,
see
the
accompanying
schedule
of
investments.
9.
Fair
Value
Measurements
(continued)
Franklin
Fund
Allocator
Series
Notes
to
Financial
Statements
58
franklintempleton.com
Annual
Report
10.
New
Accounting
Pronouncements
In June
2022,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
is
currently
evaluating
the
impact,
if
any,
of
applying
this
ASU.
11.
Subsequent
Events
The
Funds
have
evaluated
subsequent
events
through
the
issuance
of
the
financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Selected
Portfolio
ADR
American
Depositary
Receipt
GDR
Global
Depositary
Receipt
REIT
Real
Estate
Investment
Trust
Franklin
Fund
Allocator
Series
Report
of
Independent
Registered
Public
Accounting
Firm
59
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Franklin
Fund
Allocator
Series
and
Shareholders
of
Franklin
Emerging
Market
Core
Equity
(IU)
Fund,
Franklin
International
Core
Equity
(IU)
Fund,
and
Franklin
U.S.
Core
Equity
(IU)
Fund
Opinions
on
the
Financial
Statements
We
have
audited
the
accompanying
statements
of
assets
and
liabilities,
including
the
schedule
of
investments,
of
Franklin
Emerging
Market
Core
Equity
(IU)
Fund,
Franklin
International
Core
Equity
(IU)
Fund,
and
Franklin
U.S.
Core
Equity
(IU)
Fund
(three
of
the
funds
constituting
Franklin
Fund
Allocator
Series,
hereafter
collectively
referred
to
as
the
"Funds")
as
of
July
31,
2022,
the
related
statements
of
operations
for
the
year
ended
July
31,
2022,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
July
31,
2022,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
each
of
the
Funds
as
of
July
31,
2022,
the
results
of
each
of
their
operations
for
the
year
then
ended,
the
changes
in
each
of
their
net
assets
for
each
of
the
two
years
in
the
period
ended
July
31,
2022,
and
each
of
the
financial
highlights
for
each
of
the
periods
indicated
therein
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinions
These
financial
statements
are
the
responsibility
of
the
Funds’
management.
Our
responsibility
is
to
express
an
opinion
on
the
Funds’
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Funds
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
July
31,
2022
by
correspondence
with
the
custodian,
transfer
agent,
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinions.
PricewaterhouseCoopers
LLP
San
Francisco,
California
September
20,
2022
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Franklin
Fund
Allocator
Series
Tax
Information
(unaudited)
60
franklintempleton.com
Annual
Report
By
mid-February,
tax
information
related
to
a
shareholder's
proportionate
share
of
distributions
paid
during
the
preceding
calendar
year
will
be
received,
if
applicable.
Please
also
refer
to
www.franklintempleton.com
for
per
share
tax
information
related
to
any
distributions
paid
during
the
preceding
calendar
year.
Shareholders
are
advised
to
consult
with
their
tax
advisors
for
further
information
on
the
treatment
of
these
amounts
on
their
tax
returns.
The
following
tax
information
for
the
Funds
is
required
to
be
furnished
to
shareholders
with
respect
to
income
earned
and
distributions
paid
during
its
fiscal
year.
The
Funds
hereby
report
the
following
amounts,
or
if
subsequently
determined
to
be
different,
the
maximum
allowable
amounts,
for
the
fiscal
year
ended
July
31,
2022:
Under
Section
853
of
the
Internal
Revenue
Code,
the
Funds
below
intend
to
elect
to
pass
through
to
their
shareholders
the
following
amounts,
or
amounts
as
finally
determined,
of
foreign
taxes
paid
and
foreign
source
income
earned
by
the
Funds
during
the
fiscal
year
ended
July
31,
2022
:
Pursuant
to:
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
—
$13,033,806
$42,942,790
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
$5,844
—
$18,419,640
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
$2,636,958
$11,728,590
$19,488,510
Short-Term
Capital
Gain
Dividends
Distributed
§871(k)(2)(C)
—
$5,418,313
—
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
Foreign
Taxes
Paid
$781,215
$1,001,972
—
Foreign
Source
Income
Earned
$4,663,227
$15,029,499
—
Franklin
Fund
Allocator
Series
Board
Members
and
Officers
61
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton/Legg
Mason
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1995
119
Bar-S
Foods
(meat
packing
company)
(1981-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Terrence
J.
Checki
(1945)
Trustee
Since
2017
100
Hess
Corporation
(exploration
of
oil
and
gas)
(2014-present).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Member
of
the
Council
on
Foreign
Relations
(1996-present);
Member
of
the
National
Committee
on
U.S.-China
Relations
(1999-present);
member
of
the
board
of
trustees
of
the
Economic
Club
of
New
York
(2013-present);
member
of
the
board
of
trustees
of
the
Foreign
Policy
Association
(2005-present);
member
of
the
board
of
directors
of
Council
of
the
Americas
(2007-present)
and
the
Tallberg
Foundation
(2018-present);
and
formerly
,
Executive
Vice
President
of
the
Federal
Reserve
Bank
of
New
York
and
Head
of
its
Emerging
Markets
and
Internal
Affairs
Group
and
Member
of
Management
Committee
(1995-2014);
and
Visiting
Fellow
at
the
Council
on
Foreign
Relations
(2014).
Mary
C.
Choksi
(1950)
Trustee
Since
2014
120
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-2020).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Franklin
Fund
Allocator
Series
62
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
1998
and
Lead
Independent
Trustee
since
2019
120
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
Canadian
National
Railway
(railroad)
(2001-2021),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-
2021),
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
120
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Counselor
and
Special
Advisor
to
the
CEO
and
Board
of
Directors
of
the
Coca-Cola
Company
(beverage
company)
(2021-present);
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(2019-2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
Larry
D.
Thompson
(1945)
Trustee
Since
2007
120
Graham
Holdings
Company
(education
and
media
organization)
(2011-2021);
The
Southern
Company
(energy
company)
(2014-2020;
previously
2010-
2012)
and
Cbeyond,
Inc.
(business
communications
provider)
(2010-
2012).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Franklin
Fund
Allocator
Series
63
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Valerie
M.
Williams
(1956)
Trustee
Since
2021
100
Omnicom
Group,
Inc.
(advertising
and
marketing
communications
services)
(2016-present),
DTE
Energy
Co.
(gas
and
electric
utility)
(2018-present),
Devon
Energy
Corporation
(exploration
and
production
of
oil
and
gas)
(2021-present);
and
formerly
,
WPX
Energy,
Inc.
(exploration
and
production
of
oil
and
gas)
(2018-
2021).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Regional
Assurance
Managing
Partner,
Ernst
&
Young
LLP
(public
accounting)
(2005-2016),
various
roles
of
increasing
responsibility
at
Ernst
&
Young
(1981-2005).
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2007
131
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015)
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Chairman
of
the
Board
and
Trustee
Since
2013
120
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Independent
Board
Members
(continued)
Franklin
Fund
Allocator
Series
64
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Steven
J.
Gray
(1955)
Vice
President
and
Co-Secretary
Vice
President
since
2009
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Distributors,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Susan
Kerr
(1949)
Vice
President
–
AML
Compliance
Since
2021
Not
Applicable
Not
Applicable
620
Eighth
Avenue
New
York,
NY
10018
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Compliance
Analyst,
Franklin
Templeton;
Chief
Anti-Money
Laundering
Compliance
Officer,
Legg
Mason
&
Co.,
or
its
affiliates;
Anti
Money
Laundering
Compliance
Officer;
Senior
Compliance
Officer,
LMIS;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Christopher
Kings
(1974)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
January
2022
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Edward
D.
Perks
(1970)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
President
and
Director,
Franklin
Advisers,
Inc.
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Interested
Board
Members
and
Officers
(continued)
Franklin
Fund
Allocator
Series
65
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton/Legg
Mason
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
major
shareholder
of
Resources.
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
Mary
C.
Choksi
as
its
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Choksi
qualifies
as
such
an
expert
in
view
of
her
extensive
business
background
and
experience.
She
served
as
a
director
of
Avis
Budget
Group,
Inc.
(2007-2020)
and
formerly,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(1987
to
2017).
Ms.
Choksi
has
been
a
Member
of
the
Fund’s
Audit
Committee
since
2014.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Choksi
has
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Choksi
is
an
independent
Board
member
as
that
term
is
defined
under
the
relevant
Securities
and
Exchange
Commission
Rules
and
Releases.
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Lori
A.
Weber
(1964)
Vice
President
and
Co-Secretary
Vice
President
since
2011
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Interested
Board
Members
and
Officers
(continued)
Franklin
Fund
Allocator
Series
Shareholder
Information
66
franklintempleton.com
Annual
Report
Board
Approval
of
Investment
Management
Agreements
FRANKLIN
FUND
ALLOCATOR
SERIES
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
Franklin
International
Core
Equity
(IU)
Fund
Franklin
U.S.
Core
Equity
(IU)
Fund
(each
a
Fund)
At
an
in-person
meeting
held
on
February
28,
2022
(Meeting),
the
Board
of
Trustees
(Board)
of
Franklin
Fund
Allocator
Series
(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
each
Fund
(each
a
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
each
Management
Agreement.
Although
the
Management
Agreements
for
the
Funds
were
considered
at
the
same
Board
meeting,
the
Board
considered
the
information
provided
to
it
about
the
Funds
together
and
with
respect
to
each
Fund
separately
as
the
Board
deemed
appropriate.
In
considering
the
continuation
of
each
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
virtual
contract
renewal
meeting
at
which
the
Independent
Trustees
first
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters;
and
then
met
with
management
to
request
additional
information
that
the
Independent
Trustees
reviewed
and
considered
at
the
Meeting.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
each
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
each
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
each
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
each
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
each
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
applicable
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
Funds
and
their
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
each
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
Funds
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Funds.
The
Board
acknowledged
the
ongoing
integration
of
the
Legg
Mason
family
of
funds
into
the
FT
family
of
funds
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
including
various
regulatory
initiatives
and
recent
geopolitical
concerns.
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
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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
being
a
global
leader
in
stewardship
and
sustainability
and
the
recent
addition
of
a
senior
executive
focused
on
environmental,
social
and
governance
and
climate
control
initiatives.
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
Funds
and
their
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
each
Fund
for
the
one-year
period
ended
November
30,
2021.
In
doing
so,
the
Board
noted
that
each
Fund
has
been
in
operation
for
less
than
three
years.
The
Board
considered
the
performance
returns
for
each
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
each
Fund’s
performance
results
is
below.
Franklin
Emerging
Market
Core
Equity
(IU)
Fund
–
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
emerging
markets
funds.
The
Fund
commenced
operations
on
September
30,
2019,
and
thus
has
been
in
operation
for
less
than
three
years.
The
Board
noted
that,
while
the
Fund’s
annualized
total
return
for
the
one-year
period
was
below
the
median
of
its
Performance
Universe,
the
return
was
2.77%.
Given
the
Fund’s
short-
operating
history
and
positive
one-year
return,
the
Board
concluded
that
the
Fund’s
performance
was
satisfactory.
Franklin
International
Core
Equity
(IU)
Fund
and
Franklin
U.S.
Core
Equity
(IU)
Fund
–
The
Performance
Universe
for
the
Franklin
International
Core
Equity
(IU)
Fund
included
the
Fund
and
all
retail
and
institutional
international
large-cap
core
funds.
The
Performance
Universe
for
the
Franklin
U.S.
Core
Equity
(IU)
Fund
included
the
Fund
and
all
retail
and
institutional
large-cap
core
funds.
The
Funds
commenced
operations
on
August
19,
2019,
and
thus
have
been
in
operation
for
less
than
three
years.
The
Board
noted
that
each
Fund’s
annualized
total
return
for
the
one-year
period
was
above
the
median
and
in
the
first
quintile
(best)
of
its
respective
Performance
Universe.
The
Board
concluded
that
each
Fund’s
performance
was
satisfactory.
Comparative
Fees
and
Expenses
The
Board
noted
that,
pursuant
to
each
Management
Agreement,
the
Manager
provides
general
investment
management
and
administrative
services
to
each
Fund
for
a
zero
management
fee.
The
Board
also
noted
that
the
Manager
assumes
all
expenses
incurred
by
each
Fund
(including
acquired
fund
fees
and
expenses),
excluding
certain
non-routine
expenses,
such
as
those
relating
to
litigation,
indemnification,
reorganizations
and
liquidations,
incurred
by
each
Fund.
The
Board
further
noted
that
comparative
fee
data
for
the
Funds
customarily
prepared
by
Broadridge
was
not
provided
because
the
Funds
have
a
zero
management
fee.
The
Board
concluded
that
the
management
fee
for
each
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
each
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,
2021,
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
Funds’
profitability
report
presentations
from
prior
years.
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
Funds’
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
each
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
Franklin
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in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Funds,
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
each
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
each
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
each
Fund
grows
larger
and
whether
each
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
In
connection
with
this
review,
the
Board
noted
that
because
each
Fund
pays
a
zero
management
fee,
the
consideration
of
possible
economies
of
scale
in
the
future
was
not
relevant.
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
each
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program
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
for
the
Franklin
Templeton
and
Legg
Mason
Funds
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
Franklin
Templeton
and
Legg
Mason
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Legal,
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.
Franklin
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Allocator
Series
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Information
69
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Annual
Report
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2022,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2021.
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
Trust’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Trust
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Trust’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
Trust’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
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 expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. Principal Accountant Fees and Services
.
(a) Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $109,106 for the fiscal year ended July 31, 2022 and $108,296 for the fiscal year ended July 31, 2021.
(b) Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.
(c) Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning.
(d) All Other Fees
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $857 for the fiscal year ended July 31, 2022 and $0 for the fiscal year ended July 31, 2021. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $244,938 for the fiscal year ended July 31, 2022 and $29,000 for the fiscal year ended July 31, 2021. The services for which these fees were paid included professional fees in connection with determining the feasibility of a U.S. direct lending structure, asset under management certification, benchmarking services in connection with the ICI TA Survey, professional fees in connection with SOC 1 Reports, professional services relating to the readiness assessment over Greenhouse Gas Emissions and Energy, fees in connection with license for employee development tool ProEdge, and fees in connection with license for accounting and business knowledge platform Viewpoint.
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
(f) No disclosures are required by this Item 4(f).
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $245,795 for the fiscal year ended July 31, 2022 and $29,000 for the fiscal year ended July 31, 2021.
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
(i) N/A
(j) N/A
Item 5. Audit Committee of Listed Registrants. N/A
Item 6. Schedule of Investments. N/A
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-
End Management Investment Companies. N/A
Item 8. Portfolio Managers of Closed-End Management Investment
Companies. N/A
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and
Affiliated Purchasers. N/A
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures.
(a)
Evaluation of Disclosure Controls and Procedures
.
The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
(b)
Changes in Internal Controls
.
There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A
Item 13. Exhibits.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FRANKLIN FUND ALLOCATOR SERIES
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
Chief Executive Officer - Finance and Administration
Date September 27, 2022
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 September 27, 2022
By S\CHRISTOPHER KINGS______________________
Christopher Kings
Chief Financial Officer, Chief Accounting Officer and Treasurer
Date September 27, 2022