UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-03143
Templeton Global Smaller Companies Fund
(Exact name of registrant as specified in charter)
300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923
(Address of principal executive offices) (Zip code)
Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant's telephone number, including area code: (954) 527-7500_
Date of fiscal year end: _8/31__
Date of reporting period: 2/28/21_
Item 1. Reports to Stockholders.
a.)
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)
b.)
A copy of the notice transmitted to shareholders in reliance on Rule 30e-3 under the 1940 Act that contains disclosures specified by paragraph (c)(3) of that rule is included in the Annual Report. Not Applicable.
Semiannual
Report
and
Shareholder
letter
Templeton
Global
Smaller
Companies
Fund
February
28,
2021
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up
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report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
February
28,
2021,
the
global
economic
recovery
was
hindered
by
a
surge
of
novel
coronavirus
(COVID-19)
cases
in
certain
regions.
Despite
this,
global
equities
advanced
over
the
period
amid
successful
trials
of
COVID-19
vaccines,
the
start
of
vaccination
programs
in
some
countries
and
expectations
for
fiscal
stimulus
from
the
new
U.S.
presidential
administration.
Investor
sentiment
was
further
boosted
by
encouraging
economic
data
from
China
and
signals
that
the
U.S.
Federal
Reserve
would
continue
to
support
low
interest
rates.
Global
equities
trimmed
some
gains
near
period-end
due
to
investor
concerns
that
rising
inflation
could
lead
some
central
banks
to
raise
interest
rates.
In
this
environment,
small
capitalization
stocks
in
global
developed
and
emerging
markets
posted
positive
total
returns,
as
measured
by
the
MSCI
All
Country
World
Index
Small
Cap
Index.
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
Global
Smaller
Companies
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Alan
Bartlett
Chief
Investment
Officer
Templeton
Global
Equity
Group
This
letter
reflects
our
analysis
and
opinions
as
of
February
28,
2021,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
Global
Smaller
Companies
Fund
3
Performance
Summary
6
Your
Fund’s
Expenses
8
Financial
Highlights
and
Statement
of
Investments
9
Financial
Statements
17
Notes
to
Financial
Statements
21
Tax
Information
32
Shareholder
Information
33
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
Global
Smaller
Companies
Fund
This
semiannual
report
for
Templeton
Global
Smaller
Companies
Fund
covers
the
period
ended
February
28,
2021.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
to
achieve
long-term
capital
growth.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
equity
securities
of
smaller
companies
located
anywhere
in
the
world.
For
this
Fund,
smaller
companies
are
companies
with
market
capitalizations
not
exceeding
the
lesser
of
the
highest
float-adjusted
market
capitalization
in
the
Fund's
benchmark,
the
MSCI
All
Country
World
Index
(ACWI)
Small
Cap
Index,
or
$10
billion,
at
the
time
of
purchase.
The
Fund
may
invest
a
significant
amount
of
its
assets
in
the
securities
of
companies
located
in
emerging
markets,
will
invest
its
assets
in
issuers
located
in
at
least
three
different
countries
(including
the
U.S.)
and
will
invest
at
least
40%
of
its
net
assets
in
foreign
securities.
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
+27.12%
cumulative
total
return.
In
comparison,
the
Fund’s
new
benchmark,
the
MSCI
ACWI
Small
Cap
Index-
NR,
which
measures
performance
of
small
capitalization
companies
in
global
developed
and
emerging
markets,
posted
a
+29.59%
cumulative
total
return
for
the
same
period.
1
The
Fund’s
prior
benchmark,
the
MSCI
ACWI
Small
Cap
Index,
posted
a
+29.81%
return.
1
The
investment
manager
believes
the
MSCI
ACWI
Small
Cap
Index-NR
provides
a
more
consistent
basis
for
comparison
relative
to
the
Fund’s
peers.
Please
note
index
performance
information
is
provided
for
reference
and
we
do
not
attempt
to
track
the
index
but
rather
undertake
investments
on
the
basis
of
fundamental
research.
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
6
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Economic
and
Market
Overview
Global
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
ACWI,
advanced
during
the
six
months
ended
February
28,
2021.
Equities
in
all
major
regions
of
the
world
posted
positive
returns
for
the
period
despite
the
global
surge
of
the
novel
coronavirus
(COVID-19).
Following
stock
market
declines
in
September
and
October
2020
due
to
geopolitical
tensions
and
rising
infection
rates,
equities
began
to
rebound
in
November,
as
successful
trials
of
COVID-19
vaccines
the
start
of
vaccination
programs
in
some
countries
and
expectations
for
fiscal
stimulus
from
the
new
U.S.
administration
led
many
equity
markets
to
reach
new
highs.
Some
indications
of
economic
revival,
most
notably
in
China,
also
helped
drive
stocks
higher.
However,
global
equity
markets
pared
some
gains
in
late
February
2021
amid
investor
concerns
that
rising
inflation
could
lead
some
central
banks
to
raise
interest
rates.
In
the
U.S.,
equities
posted
solid
gains
for
the
period
amid
the
government’s
fiscal
and
monetary
stimulus
measures,
the
approval
of
several
highly
effective
COVID-19
vaccines
and
the
onset
of
vaccinations.
Stocks
came
under
pressure
in
the
first
half
of
the
period
amid
uncertainties
about
the
U.S.
presidential
election
and
additional
fiscal
stimulus
measures.
Consumer
spending
slowed
during
the
fourth
quarter
of
2020
as
surging
COVID-19
infections
led
to
new
restrictions
in
some
states.
Nevertheless,
growth
in
residential
and
corporate
investment,
solid
corporate
earnings
results
and
the
outcome
of
the
U.S.
presidential
election
bolstered
investor
sentiment,
and
equities
began
to
rally
in
November.
The
start
of
COVID-19
vaccination
programs,
higher
retail
spending
and
progress
on
additional
stimulus
legislation
under
the
new
U.S.
administration
further
Geographic
Composition
2/28/21
%
of
Total
Net
Assets
North
America
45.0%
Europe
26.5%
Asia
20.2%
Latin
America
&
Caribbean
2.8%
Short-Term
Investments
&
Other
Net
Assets
5.5%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
13
.
Templeton
Global
Smaller
Companies
Fund
4
franklintempleton.com
Semiannual
Report
supported
stocks.
The
unemployment
rate
declined
from
8.4%
in
August
2020
to
6.2%
in
February
2021.
2
Despite
a
selloff
near
period-end
due
to
investor
concerns
about
rising
bond
yields
amid
the
economic
recovery
and
potential
for
higher
inflation,
U.S.
equities
posted
strong
overall
gains.
The
U.S.
Federal
Reserve
(Fed)
maintained
the
federal
funds
target
rate
at
a
range
of
0.00%–0.25%
and
continued
its
program
of
open-ended
bond
purchases
to
help
keep
markets
functioning.
Furthermore,
the
Fed
signaled
that
interest
rates
would
potentially
remain
low,
even
if
inflation
moderately
exceeded
the
Fed’s
2%
target
for
some
time.
In
the
eurozone,
the
economy
contracted
in
the
fourth
quarter
of
2020.
Gross
domestic
product
(GDP)
growth
rates
varied
widely
among
the
region’s
largest
economies
amid
renewed
lockdowns
and
delays
in
COVID-19
vaccine
distribution.
Germany’s
and
Spain’s
GDP
expanded
modestly
in
the
fourth
quarter,
while
France’s
contracted.
Despite
investor
concerns
about
rising
infection
rates,
optimism
about
successful
vaccine
development
and
a
Brexit
resolution
contributed
to
a
positive
performance
for
European
developed
market
equities,
as
measured
by
the
MSCI
Europe
Index.
Asian
developed
and
emerging
market
equities,
as
measured
by
the
MSCI
All
Country
Asia
Index,
rose
significantly
for
the
period.
China,
a
key
driver
of
regional
economies,
maintained
its
economic
recovery
and
was
the
only
major
global
economy
to
post
positive
GDP
growth
for
calendar-year
2020.
Asian
equity
markets
were
also
aided
by
optimism
that
economic
revitalization
would
be
further
spurred
by
COVID-19
vaccines.
Global
emerging
market
stocks,
as
measured
by
the
MSCI
Emerging
Markets
Index,
also
posted
sizable
gains
for
the
period.
Improving
economic
activity,
stabilizing
oil
prices
and
U.S.
dollar
weakness
supported
emerging
market
equities.
In
spite
of
higher
COVID-19
cases
in
some
countries,
emerging
market
stocks
rallied
amid
easing
political
uncertainty,
commencement
of
COVID-19
vaccinations
and
rising
commodity
prices.
Investment
Strategy
When
choosing
equity
investments
for
the
Fund,
we
apply
a
bottom-up,
value-oriented,
long-term
approach,
focusing
on
the
market
price
of
a
company’s
securities
relative
to
our
evaluation
of
the
company’s
long-term
earnings,
asset
value
and
cash
flow
potential.
This
includes
an
assessment
by
the
investment
manager
of
the
potential
impacts
of
material
environmental,
social
and
governance
(ESG)
factors
on
the
long-term
risk
and
return
profile
of
a
company.
We
also
consider
the
company’s
price/earnings
ratio,
profit
margins
and
liquidation
value.
We
may
consider
selling
a
security
when
we
believe
the
security
has
become
overvalued
due
to
either
its
price
appreciation
or
changes
in
the
company’s
fundamentals,
when
we
believe
that
the
market
capitalization
of
a
security
has
become
too
large,
or
when
we
believe
another
security
is
a
more
attractive
investment
opportunity.
Manager’s
Discussion
Several
holdings
contributed
to
absolute
performance
during
the
period
under
review.
U.S.-based
Sonos
introduced
the
world’s
first
wireless
multi-room
home
sound
system
in
2005.
Since
then,
the
company
has
continued
to
evolve
through
significant
technological
changes
such
as
the
introduction
of
the
iPhone,
the
app-driven
economy,
and,
most
recently,
voice
technology.
We
believe
Sonos
is
attractively
positioned
to
benefit
from
secular
growth
in
global
streaming
music
and
smart
speaker
adoption
trends.
We
also
believe
that
multiple
top-line
growth
drivers,
a
stable
gross
margin
and
a
focus
on
improving
the
operating
structure
should
lead
to
meaningful
earnings
growth
over
our
investment
horizon.
Argentina-based
Livent
is
a
leading
lithium
producer
with
a
focus
on
lithium
hydroxide,
butyllithium
and
high
purity
lithium
metal.
Livent
is
one
of
the
lowest-cost
producers
Top
10
Holdings
2/28/21
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Sonos
,
Inc.
2.2%
Household
Durables,
United
States
Thule
Group
AB
2.0%
Leisure
Products,
Sweden
Freshpet
,
Inc.
2.0%
Food
Products,
United
States
Alamo
Group,
Inc.
2.0%
Machinery,
United
States
AllianceBernstein
Holding
LP
1.9%
Capital
Markets,
United
States
Hillenbrand,
Inc.
1.8%
Machinery,
United
States
Columbia
Sportswear
Co.
1.8%
Textiles,
Apparel
&
Luxury
Goods,
United
States
Dometic
Group
AB
1.8%
Auto
Components,
Sweden
Huntington
Bancshares,
Inc.
1.8%
Banks,
United
States
Crown
Holdings,
Inc.
1.7%
Containers
&
Packaging,
United
States
2.
U.S.
Bureau
of
Labor
Statistics.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Templeton
Global
Smaller
Companies
Fund
5
franklintempleton.com
Semiannual
Report
globally
of
high-performance
battery-grade
lithium
for
electric
vehicles
(EVs)
and
has
benefited
from
the
growth
in
EV
adoption.
Shares
rose
during
the
period,
and
the
Fund
liquidated
its
position
to
realize
gains.
Jones
Lang
La
Salle
is
a
U.S.-domiciled
company
with
a
global
footprint
in
real
estate
services
and
investment
management.
Shares
rose
on
a
rebound
in
the
commercial
real
estate
market
after
it
was
adversely
impacted
by
the
coronavirus
pandemic.
We
believe
the
company
will
continue
to
grow
its
earnings
above
industry
levels
due
to
its
unique
extensive
global
service
platform.
The
Fund
had
some
companies
that
detracted
from
absolute
performance
during
the
period
under
review.
France-based
Solutions
30
(S30)
is
a
European
leader
in
digital
outsourced
support
services.
We
believe
S30’s
canny
response
to
COVID-19
can
pave
the
way
for
market
share
gains.
The
disruption
created
by
the
pandemic
saw
significant
drops
in
volumes
in
the
spring,
which
caused
S30’s
share
price
to
decline,
but
did
not
prevent
the
company
from
remaining
profitable
due
to
the
flexibility
of
its
cost
structure.
This
was
mostly
due
to
S30’s
ability
to
subcontract
a
large
part
of
its
order
flows,
as
it
is
easy
for
the
company
to
“plug
and
play”
in
its
IT
platforms
serving
small
companies.
A
provider
of
essential
activities,
we
believe
S30’s
prospects
are
bright
and
boosted
by
global
stimulus
plans.
Based
in
Germany,
Gerresheimer
is
a
leading
medical
packaging
firm.
A
lack
of
top-line
growth
for
the
group
over
the
last
several
years
has
been
disappointing
and
a
root
cause
of
stagnant
margins
and
deteriorating
balance
sheet
returns.
However,
a
new
chief
executive
officer
has
sharpened
the
company’s
focus
on
efficiencies,
quality
and
innovation
while
at
the
same
time
making
necessary
capital
investments
to
support
a
growth
turnaround.
The
fruits
of
these
efforts
have
started
to
materialize
but
should,
in
our
view,
contribute
more
meaningfully
in
2021
and
beyond.
We
believe
the
business
remains
resilient
in
the
current
environment
and
that
margins
and
revenues
should
accelerate
over
the
longer
term.
Ultimately,
we
view
Gerresheimer
as
a
defensive
growth
stock
trading
at
reasonably
inexpensive
valuations.
Giant
Manufacturing
is
a
Taiwan-based
bicycle
manufacturer.
The
combination
of
temporary
component
shortages
and
seasonal
winter
sales
weakness
weighed
on
shares
during
the
review
period.
We
believe
Giant
remains
well-positioned
over
the
longer
term
given
the
elevated
demand
for
recreational
biking
and
the
company’s
strategic
investments
in
electric
bikes,
where
penetration
remains
low
in
the
key
North
American
market.
Thank
you
for
your
continued
participation
in
Templeton
Global
Smaller
Companies
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Harlan
B.
Hodes
Lead
Portfolio
Manager
David
A.
Tuttle,
CFA
Heather
Waddell,CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
February
28,
2021,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Countries
2/28/21
a
%
of
Total
Net
Assets
a
a
United
States
42.5%
Taiwan
7.9%
Japan
7.2%
Switzerland
5.0%
Sweden
4.6%
Italy
4.6%
Germany
3.8%
Hong
Kong
2.9%
Canada
2.5%
United
Kingdom
2.5%
CFA
®
is
a
trademark
owned
by
CFA
Institute.
Performance
Summary
as
of
February
28,
2021
Templeton
Global
Smaller
Companies
Fund
6
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
2/28/21
Cumulative
total
returns
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A
:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
1
Average
Annual
Total
Return
2
–
A
3
6-Month
+27.12%
+20.17%
1-Year
+37.48%
+29.96%
5-Year
+80.95%
+11.32%
10-Year
+89.77%
+6.01%
Advisor
6-Month
+27.22%
+27.22%
1-Year
+37.83%
+37.83%
5-Year
+83.01%
+12.85%
10-Year
+94.61%
+6.89%
See
page
7
for
Performance
Summary
footnotes.
Templeton
Global
Smaller
Companies
Fund
Performance
Summary
7
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Smaller,
midsized
and
relatively
new
or
unseasoned
companies
can
be
particularly
sensitive
to
changing
economic
conditions,
and
their
prospects
for
growth
are
less
certain
than
those
of
larger,
more
established
companies.
In
addition,
smaller
company
stocks
have
historically
exhibited
greater
price
volatility
than
larger
company
stocks,
particularly
over
the
short
term.
The
markets
for
particular
securities
or
types
of
securities
are
or
may
become
relatively
illiquid.
Reduced
liquidity
will
have
an
adverse
impact
on
the
security’s
value
and
on
the
Fund’s
ability
to
sell
such
securities
when
necessary
to
meet
the
Fund’s
liquidity
needs
or
in
response
to
a
specific
market
event.
Special
risks
are
associated
with
foreign
invest-
ing,
including
currency
fluctuations,
economic
instability
and
political
developments.
Investments
in
emerging
markets
involve
heightened
risks
related
to
the
same
factors,
in
addition
to
those
associated
with
these
markets’
smaller
size
and
lesser
liquidity.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance. The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
1.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
2.
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.
3.
Prior
to
9/10/18
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
4.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(9/1/20–2/28/21)
Share
Class
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
A
$0.0819
$0.0211
$0.1719
$0.2749
C
$0.0018
$0.0211
$0.1719
$0.1948
R6
$0.1175
$0.0211
$0.1719
$0.3105
Advisor
$0.1050
$0.0211
$0.1719
$0.2980
Total
Annual
Operating
Expenses
4
Share
Class
A
1.38%
Advisor
1.13%
Your
Fund’s
Expenses
Templeton
Global
Smaller
Companies
Fund
8
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.
50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
9/1/20
Ending
Account
Value
2/28/21
Expenses
Paid
During
Period
9/1/20–2/28/21
1,2
Ending
Account
Value
2/28/21
Expenses
Paid
During
Period
9/1/20–2/28/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,271.25
$7.43
$1,018.25
$6.61
1.31%
C
$1,000
$1,266.10
$11.63
$1,014.53
$10.34
2.06%
R6
$1,000
$1,272.82
$5.55
$1,019.91
$4.93
0.97%
Advisor
$1,000
$1,272.16
$6.03
$1,019.49
$5.36
1.06
%
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
9
a
Six
Months
Ended
February
28,
2021
(unaudited)
Year
Ended
August
31,
2020
2019
2018
2017
2016
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$9.16
$8.66
$10.39
$9.92
$8.63
$8.32
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
........
(—)
c
0.04
0.08
0.07
0.06
0.04
Net
realized
and
unrealized
gains
(losses)
2.46
0.67
(1.09)
0.86
1.29
0.29
Total
from
investment
operations
........
2.46
0.71
(1.01)
0.93
1.35
0.33
Less
distributions
from:
Net
investment
income
..............
(0.08)
(0.09)
(0.07)
(0.07)
(0.03)
(0.02)
Net
realized
gains
.................
(0.19)
(0.12)
(0.65)
(0.39)
(0.03)
—
Total
distributions
...................
(0.27)
(0.21)
(0.72)
(0.46)
(0.06)
(0.02)
Net
asset
value,
end
of
period
..........
$11.35
$9.16
$8.66
$10.39
$9.92
$8.63
Total
return
d
.......................
27.12%
8.08%
(8.86)%
9.23%
15.73%
3.95%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
1.31%
1.38%
1.33%
1.33%
1.40%
1.42%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.31%
f
1.38%
f
1.33%
f
1.33%
f,g
1.39%
g
1.41%
Net
investment
income
(loss)
..........
(0.05)%
0.45%
0.87%
0.72%
0.65%
0.47%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$1,099,207
$921,018
$998,891
$1,177,880
$1,049,481
$1,020,120
Portfolio
turnover
rate
................
13.21%
16.81%
18.87%
32.61%
23.49%
28.73%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
February
28,
2021
(unaudited)
Year
Ended
August
31,
2020
2019
2018
2017
2016
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.60
$8.15
$9.82
$9.41
$8.22
$7.97
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
........
(0.04)
(0.03)
0.01
(—)
c
(0.01)
(0.02)
Net
realized
and
unrealized
gains
(losses)
2.31
0.63
(1.03)
0.80
1.23
0.27
Total
from
investment
operations
........
2.27
0.60
(1.02)
0.80
1.22
0.25
Less
distributions
from:
Net
investment
income
..............
(—)
c
(0.03)
—
—
—
—
Net
realized
gains
.................
(0.19)
(0.12)
(0.65)
(0.39)
(0.03)
—
Total
distributions
...................
(0.19)
(0.15)
(0.65)
(0.39)
(0.03)
—
Net
asset
value,
end
of
period
..........
$10.68
$8.60
$8.15
$9.82
$9.41
$8.22
Total
return
d
.......................
26.61%
7.25%
(9.60)%
8.39%
14.88%
3.14%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
2.06%
2.13%
2.08%
2.08%
2.15%
2.17%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
2.06%
f
2.13%
f
2.08%
f
2.08%
f,g
2.14%
g
2.16%
Net
investment
income
(loss)
..........
(0.80)%
(0.32)%
0.12%
(0.03)%
(0.10)%
(0.28)%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$12,970
$11,509
$17,373
$38,345
$30,579
$33,802
Portfolio
turnover
rate
................
13.21%
16.81%
18.87%
32.61%
23.49%
28.73%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
February
28,
2021
(unaudited)
Year
Ended
August
31,
2020
2019
2018
2017
2016
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$9.22
$8.69
$10.44
$9.97
$8.68
$8.37
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.01
0.07
0.11
0.13
0.10
0.08
Net
realized
and
unrealized
gains
(losses)
2.47
0.69
(1.10)
0.84
1.29
0.28
Total
from
investment
operations
........
2.48
0.76
(0.99)
0.97
1.39
0.36
Less
distributions
from:
Net
investment
income
..............
(0.12)
(0.11)
(0.11)
(0.11)
(0.07)
(0.05)
Net
realized
gains
.................
(0.19)
(0.12)
(0.65)
(0.39)
(0.03)
—
Total
distributions
...................
(0.31)
(0.23)
(0.76)
(0.50)
(0.10)
(0.05)
Net
asset
value,
end
of
period
..........
$11.39
$9.22
$8.69
$10.44
$9.97
$8.68
Total
return
c
.......................
27.28%
8.55%
(8.57)%
9.65%
16.18%
4.42%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
0.98%
1.00%
0.97%
0.95%
0.96%
0.95%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.97%
0.98%
0.96%
0.94%
e
0.93%
e
0.94%
Net
investment
income
...............
0.29%
0.84%
1.24%
1.11%
1.11%
0.94%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$91,611
$78,551
$85,377
$101,384
$22,318
$20,690
Portfolio
turnover
rate
................
13.21%
16.81%
18.87%
32.61%
23.49%
28.73%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Global
Smaller
Companies
Fund
Financial
Highlights
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
February
28,
2021
(unaudited)
Year
Ended
August
31,
2020
2019
2018
2017
2016
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$9.23
$8.71
$10.45
$9.97
$8.67
$8.36
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.01
0.06
0.10
0.09
0.09
0.06
Net
realized
and
unrealized
gains
(losses)
2.47
0.68
(1.09)
0.85
1.30
0.29
Total
from
investment
operations
........
2.48
0.74
(0.99)
0.94
1.39
0.35
Less
distributions
from:
Net
investment
income
..............
(0.11)
(0.10)
(0.10)
(0.07)
(0.06)
(0.04)
Net
realized
gains
.................
(0.19)
(0.12)
(0.65)
(0.39)
(0.03)
—
Total
distributions
...................
(0.30)
(0.22)
(0.75)
(0.46)
(0.09)
(0.04)
Net
asset
value,
end
of
period
..........
$11.41
$9.23
$8.71
$10.45
$9.97
$8.67
Total
return
c
.......................
27.22%
8.32%
(8.60)%
9.50%
16.02%
4.18%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
1.06%
1.13%
1.08%
1.08%
1.15%
1.17%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.06
%
e
1.13%
e
1.08%
e
1.08%
e,f
1.14%
f
1.16%
Net
investment
income
...............
0.19%
0.68%
1.12%
0.97%
0.90%
0.72%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$60,220
$47,466
$57,452
$81,450
$108,279
$50,213
Portfolio
turnover
rate
................
13.21%
16.81%
18.87%
32.61%
23.49%
28.73%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Global
Smaller
Companies
Fund
Statement
of
Investments
(unaudited),
February
28,
2021
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
a
Industry
Shares
a
Value
a
Common
Stocks
92.1%
Bahamas
1.3%
a
OneSpaWorld
Holdings
Ltd.
........
Diversified
Consumer
Services
1,478,293
$
16,128,177
a
Belgium
1.5%
Barco
NV
......................
Electronic
Equipment,
Instruments
&
Components
471,324
11,568,401
Fagron
........................
Health
Care
Providers
&
Services
310,815
7,413,347
18,981,748
Brazil
1.0%
a
Camil
Alimentos
SA
...............
Food
Products
4,891,600
9,106,784
a
M
Dias
Branco
SA
................
Food
Products
794,100
4,058,133
13,164,917
Canada
2.5%
Canaccord
Genuity
Group,
Inc.
......
Capital
Markets
753,100
6,757,604
a
Canada
Goose
Holdings,
Inc.
.......
Textiles,
Apparel
&
Luxury
Goods
209,400
9,384,911
Canadian
Western
Bank
...........
Banks
418,512
10,999,628
North
West
Co.,
Inc.
(The)
..........
Food
&
Staples
Retailing
198,400
4,852,826
31,994,969
Denmark
0.4%
a
Matas
A/S
......................
Specialty
Retail
414,264
5,498,113
a
Finland
1.5%
Huhtamaki
OYJ
..................
Containers
&
Packaging
411,460
18,488,097
France
0.6%
a,b
Solutions
30
SE
.................
IT
Services
662,771
7,767,048
a
Germany
3.8%
Gerresheimer
AG
................
Life
Sciences
Tools
&
Services
110,867
11,449,944
Grand
City
Properties
SA
..........
Real
Estate
Management
&
Development
420,824
10,308,052
Jenoptik
AG
....................
Electronic
Equipment,
Instruments
&
Components
368,495
11,850,302
b
Rational
AG
....................
Machinery
16,473
14,091,144
47,699,442
Hong
Kong
2.9%
Johnson
Electric
Holdings
Ltd.
......
Auto
Components
4,398,432
12,692,985
Techtronic
Industries
Co.
Ltd.
.......
Machinery
1,150,790
17,514,941
VTech
Holdings
Ltd.
..............
Communications
Equipment
775,800
6,501,037
36,708,963
Indonesia
0.0%
†
a,c,d
Sakari
Resources
Ltd.
.............
Oil,
Gas
&
Consumable
Fuels
1,342,000
697,040
a
Italy
4.6%
a
Brunello
Cucinelli
SpA
.............
Textiles,
Apparel
&
Luxury
Goods
243,755
10,029,796
a
Freni
Brembo
SpA
................
Auto
Components
436,393
5,664,695
Interpump
Group
SpA
.............
Machinery
477,106
21,860,555
a,e
Technogym
SpA
,
144A,
Reg
S
......
Leisure
Products
1,872,324
20,381,382
57,936,428
Japan
7.2%
Asics
Corp.
.....................
Textiles,
Apparel
&
Luxury
Goods
932,400
15,372,627
Bunka
Shutter
Co.
Ltd.
............
Building
Products
685,600
6,433,087
en
-japan,
Inc.
...................
Professional
Services
201,800
6,085,474
Idec
Corp.
......................
Electrical
Equipment
335,200
5,520,713
IDOM,
Inc.
.....................
Specialty
Retail
1,813,600
10,617,805
Templeton
Global
Smaller
Companies
Fund
Statement
of
Investments
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Shares
a
Value
a
Common
Stocks
(continued)
Japan
(continued)
Meitec
Corp.
....................
Professional
Services
165,300
$
8,643,683
Nihon
Parkerizing
Co.
Ltd.
..........
Chemicals
529,300
5,359,674
TechnoPro
Holdings,
Inc.
..........
Professional
Services
110,900
8,098,201
Tsumura
&
Co.
..................
Pharmaceuticals
644,700
20,293,545
Zojirushi
Corp.
..................
Household
Durables
308,800
4,995,218
91,420,027
Netherlands
2.0%
Aalberts
NV
....................
Machinery
148,409
6,930,168
Arcadis
NV
.....................
Construction
&
Engineering
256,076
8,732,848
e
Flow
Traders,
144A,
Reg
S
.........
Capital
Markets
222,759
9,078,670
24,741,686
Singapore
1.0%
a,c,d,f
Aspirational
Consumer
Lifestyle
Corp.
.
Capital
Markets
1,229,000
12,893,215
a
South
Korea
1.2%
BNK
Financial
Group,
Inc.
..........
Banks
1,415,028
7,386,504
DGB
Financial
Group,
Inc.
..........
Banks
1,178,608
7,368,162
14,754,666
Sweden
4.6%
BillerudKorsnas
AB
...............
Containers
&
Packaging
315,734
5,797,766
Cloetta
AB,
B
...................
Food
Products
1,638,654
4,506,657
a,e
Dometic
Group
AB,
144A
..........
Auto
Components
1,649,518
22,712,585
a,e
Thule
Group
AB,
144A,
Reg
S
.......
Leisure
Products
602,179
25,142,869
58,159,877
Switzerland
5.0%
Bucher
Industries
AG
.............
Machinery
42,624
20,583,601
a
Landis+Gyr
Group
AG
.............
Electronic
Equipment,
Instruments
&
Components
120,862
8,382,701
b
Logitech
International
SA
..........
Technology
Hardware,
Storage
&
Peripherals
170,170
18,385,167
a
Siegfried
Holding
AG
..............
Life
Sciences
Tools
&
Services
20,321
15,844,007
63,195,476
Taiwan
7.9%
Catcher
Technology
Co.
Ltd.
........
Technology
Hardware,
Storage
&
Peripherals
1,089,000
7,493,464
Chicony
Electronics
Co.
Ltd.
........
Technology
Hardware,
Storage
&
Peripherals
5,455,432
18,345,716
Giant
Manufacturing
Co.
Ltd.
........
Leisure
Products
1,590,311
16,031,880
King
Yuan
Electronics
Co.
Ltd.
......
Semiconductors
&
Semiconductor
Equipment
11,061,000
15,797,353
Merida
Industry
Co.
Ltd.
...........
Leisure
Products
1,652,000
16,902,832
Nien
Made
Enterprise
Co.
Ltd.
......
Household
Durables
764,000
10,689,128
Tripod
Technology
Corp.
...........
Electronic
Equipment,
Instruments
&
Components
3,011,000
14,959,233
100,219,606
United
Kingdom
2.5%
a
Greggs
plc
.....................
Hotels,
Restaurants
&
Leisure
336,674
9,786,423
Man
Group
plc
..................
Capital
Markets
6,323,155
13,253,234
a
Oxford
Instruments
plc
............
Electronic
Equipment,
Instruments
&
Components
339,145
8,498,478
31,538,135
United
States
40.6%
a
Acadia
Healthcare
Co.,
Inc.
.........
Health
Care
Providers
&
Services
115,500
6,380,220
Alamo
Group,
Inc.
................
Machinery
162,210
24,758,112
Templeton
Global
Smaller
Companies
Fund
Statement
of
Investments
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
a
Industry
Shares
a
Value
a
Common
Stocks
(continued)
United
States
(continued)
Avnet,
Inc.
.....................
Electronic
Equipment,
Instruments
&
Components
161,800
$
6,159,726
a
BrightView
Holdings,
Inc.
...........
Commercial
Services
&
Supplies
579,900
9,226,209
Columbia
Sportswear
Co.
..........
Textiles,
Apparel
&
Luxury
Goods
223,250
23,010,377
a
Crown
Holdings,
Inc.
..............
Containers
&
Packaging
230,800
22,055,248
Deluxe
Corp.
....................
Commercial
Services
&
Supplies
182,900
7,230,037
a
Ferro
Corp.
.....................
Chemicals
1,109,840
17,613,161
a
Freshpet
,
Inc.
...................
Food
Products
161,100
25,112,268
Hillenbrand,
Inc.
.................
Machinery
500,410
23,249,049
Huntington
Bancshares,
Inc.
........
Banks
1,466,399
22,494,561
a
Integer
Holdings
Corp.
............
Health
Care
Equipment
&
Supplies
115,200
10,159,488
Janus
Henderson
Group
plc
........
Capital
Markets
355,733
10,398,076
a
Jones
Lang
LaSalle,
Inc.
...........
Real
Estate
Management
&
Development
86,500
15,049,270
a
Knowles
Corp.
..................
Electronic
Equipment,
Instruments
&
Components
896,610
18,640,522
LCI
Industries
...................
Auto
Components
85,380
12,033,457
Lear
Corp.
.....................
Auto
Components
74,800
12,423,532
Levi
Strauss
&
Co.,
A
.............
Textiles,
Apparel
&
Luxury
Goods
868,100
20,192,006
a
LivaNova
plc
....................
Health
Care
Equipment
&
Supplies
153,400
11,894,636
ManpowerGroup
,
Inc.
.............
Professional
Services
92,100
8,697,924
MGP
Ingredients,
Inc.
.............
Beverages
320,100
20,447,988
a
Middleby
Corp.
(The)
.............
Machinery
47,600
6,969,116
NCR
Corp.
.....................
Technology
Hardware,
Storage
&
Peripherals
365,500
12,704,780
Patrick
Industries,
Inc.
.............
Auto
Components
110,235
8,700,849
a
PRA
Health
Sciences,
Inc.
..........
Life
Sciences
Tools
&
Services
147,700
21,772,457
Sabre
Corp.
....................
IT
Services
1,104,100
16,219,229
Sealed
Air
Corp.
.................
Containers
&
Packaging
260,500
10,914,950
a
Skechers
USA,
Inc.,
A
.............
Textiles,
Apparel
&
Luxury
Goods
241,400
8,835,240
a
Sonos
,
Inc.
.....................
Household
Durables
709,700
27,635,718
a
Texas
Capital
Bancshares,
Inc.
......
Banks
153,070
11,663,934
a
TriMas
Corp.
....................
Machinery
646,250
21,707,537
TrustCo
Bank
Corp.
..............
Thrifts
&
Mortgage
Finance
1,742,000
11,984,960
a
US
Ecology,
Inc.
.................
Commercial
Services
&
Supplies
152,500
5,827,025
Voya
Financial,
Inc.
...............
Diversified
Financial
Services
175,800
10,597,224
Winnebago
Industries,
Inc.
.........
Automobiles
147,910
10,294,536
513,053,422
Total
Common
Stocks
(Cost
$742,967,024)
.....................................
1,165,041,052
Preferred
Stocks
0.4%
Brazil
0.4%
a,g
Alpargatas
SA,
0.16%
.............
Textiles,
Apparel
&
Luxury
Goods
759,387
4,734,689
a
Total
Preferred
Stocks
(Cost
$2,101,134)
.......................................
4,734,689
Warrants
a
a
a
a
a
Warrants
0.1%
Bahamas
0.1%
a
OneSpaWorld
Holdings
Ltd.
,
3/19/24
..
Diversified
Consumer
Services
314,014
1,023,686
Total
Warrants
(Cost
$–)
......................................................
1,023,686
Templeton
Global
Smaller
Companies
Fund
Statement
of
Investments
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Units
a
Value
a
a
a
a
a
a
Private
Limited
Partnership
Funds
1.9%
United
States
1.9%
AllianceBernstein
Holding
LP
.......
Capital
Markets
657,065
$
24,022,296
Total
Private
Limited
Partnership
Funds
(Cost
$8,653,606)
.......................
24,022,296
Total
Long
Term
Investments
(Cost
$753,721,764)
...............................
1,194,821,723
Short
Term
Investments
5.4%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
U.S.
Government
and
Agency
Securities
4.4%
United
States
4.4%
h
FHLB,
3/01/21
..................
55,300,000
55,300,000
Total
U.S.
Government
and
Agency
Securities
(Cost
$55,300,000)
.................
55,300,000
Industry
Shares
i
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
1.0%
Money
Market
Funds
1.0%
j,k
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.............
13,497,428
13,497,428
Total
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
(Cost
$13,497,428)
................................................................
13,497,428
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$68,797,428
)
................................
68,797,428
a
a
a
a
Total
Investments
(Cost
$822,519,192)
99.9%
...................................
$1,263,619,151
Other
Assets,
less
Liabilities
0.1%
.............................................
389,793
Net
Assets
100.0%
...........................................................
$1,264,008,944
a
a
a
See
Abbreviations
on
page
31
.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Non-income
producing.
b
A
portion
or
all
of
the
security
is
on
loan
at
February
28,
2021.
See
Note
1(c).
c
Fair
valued
using
significant
unobservable
inputs.
See
Note
11
regarding
fair
value
measurements.
d
See
Note
8
regarding
restricted
securities.
e
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
February
28,
2021,
the
aggregate
value
of
these
securities
was
$77,315,506,
representing
6.1%
of
net
assets.
f
See
Note
9
regarding
holdings
of
5%
voting
securities.
g
Variable
rate
security.
The
rate
shown
represents
the
yield
at
period
end.
h
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
i
See
Note
1(c)
regarding
securities
on
loan.
j
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
k
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statement
of
Assets
and
Liabilities
February
28,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
Templeton
Global
Smaller
Companies
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$796,731,764
Cost
-
Non-controlled
affiliates
(Note
3
f
and
9
)
....................................................
25,787,428
Value
-
Unaffiliated
issuers
(Includes
securities
loaned
of
$18,989,848)
................................
$1,237,228,508
Value
-
Non-controlled
affiliates
(Note
3
f
and
9
)
...................................................
26,390,643
Cash
....................................................................................
18,625,834
Receivables:
Investment
securities
sold
...................................................................
5,855,933
Capital
shares
sold
........................................................................
797,070
Dividends
...............................................................................
3,076,980
European
Union
tax
reclaims
(Note
1
d
)
.........................................................
979,503
Other
assets
..............................................................................
293
Total
assets
..........................................................................
1,292,954,764
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
12,290,000
Capital
shares
redeemed
...................................................................
1,225,580
Management
fees
.........................................................................
837,985
Distribution
fees
..........................................................................
220,371
Transfer
agent
fees
........................................................................
283,753
Trustees'
fees
and
expenses
.................................................................
15,794
Payable
upon
return
of
securities
loaned
(Note
1
c
)
..................................................
13,497,428
Accrued
expenses
and
other
liabilities
...........................................................
574,909
Total
liabilities
.........................................................................
28,945,820
Net
assets,
at
value
.................................................................
$1,264,008,944
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$772,746,548
Total
distributable
earnings
(losses)
.............................................................
491,262,396
Net
assets,
at
value
.................................................................
$1,264,008,944
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
February
28,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Templeton
Global
Smaller
Companies
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$1,099,207,029
Shares
outstanding
........................................................................
96,882,521
Net
asset
value
per
share
a
..................................................................
$11.35
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
................................
$12.01
Class
C:
Net
assets,
at
value
.......................................................................
$12,970,397
Shares
outstanding
........................................................................
1,214,305
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$10.68
Class
R6:
Net
assets,
at
value
.......................................................................
$91,611,358
Shares
outstanding
........................................................................
8,040,630
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$11.39
Advisor
Class:
Net
assets,
at
value
.......................................................................
$60,220,160
Shares
outstanding
........................................................................
5,275,932
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$11.41
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
February
28,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
Templeton
Global
Smaller
Companies
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$496,289)
Unaffiliated
issuers
........................................................................
$7,118,530
Interest:
Unaffiliated
issuers
........................................................................
6,276
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
.....................................................
120,916
Other
income
(Note
1
d
)
......................................................................
32,225
Total
investment
income
...................................................................
7,277,947
Expenses:
Management
fees
(Note
3
a
)
...................................................................
4,984,163
Distribution
fees:
(Note
3c
)
Class
A
................................................................................
1,244,366
Class
C
................................................................................
60,012
Transfer
agent
fees:
(Note
3e
)
Class
A
................................................................................
577,052
Class
C
................................................................................
6,953
Class
R6
...............................................................................
16,379
Advisor
Class
............................................................................
30,514
Custodian
fees
.............................................................................
56,076
Reports
to
shareholders
......................................................................
68,675
Registration
and
filing
fees
....................................................................
50,930
Professional
fees
...........................................................................
86,492
Trustees'
fees
and
expenses
..................................................................
87,887
Other
....................................................................................
139,146
Total
expenses
.........................................................................
7,408,645
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(10,726)
Net
expenses
.........................................................................
7,397,919
Net
investment
income
(loss)
............................................................
(119,972)
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
78,081,666
Foreign
currency
transactions
................................................................
(13,385)
Net
realized
gain
(loss)
..................................................................
78,068,281
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
197,628,742
Non-controlled
affiliates
(Note
3
f
and
9
)
.......................................................
603,215
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
37,490
Net
change
in
unrealized
appreciation
(depreciation)
............................................
198,269,447
Net
realized
and
unrealized
gain
(loss)
............................................................
276,337,728
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$276,217,756
Templeton
Global
Smaller
Companies
Fund
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
Templeton
Global
Smaller
Companies
Fund
Six
Months
Ended
February
28,
2021
(unaudited)
Year
Ended
August
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
(loss)
............................................
$(119,972)
$5,165,910
Net
realized
gain
(loss)
.................................................
78,068,281
1,290,106
Net
change
in
unrealized
appreciation
(depreciation)
...........................
198,269,447
69,399,104
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
276,217,756
75,855,120
Distributions
to
shareholders:
Class
A
.............................................................
(26,537,916)
(23,103,289)
Class
C
.............................................................
(239,297)
(280,630)
Class
R6
............................................................
(2,496,084)
(2,186,975)
Advisor
Class
........................................................
(1,498,643)
(1,429,751)
Total
distributions
to
shareholders
..........................................
(30,771,940)
(27,000,645)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(35,526,813)
(121,241,132)
Class
C
.............................................................
(1,149,590)
(6,403,465)
Class
R6
............................................................
(4,850,278)
(11,124,349)
Advisor
Class
........................................................
1,546,634
(10,634,036)
Total
capital
share
transactions
............................................
(39,980,047)
(149,402,982)
Net
increase
(decrease)
in
net
assets
...................................
205,465,769
(100,548,507)
Net
assets:
Beginning
of
period
.....................................................
1,058,543,175
1,159,091,682
End
of
period
..........................................................
$1,264,008,944
$1,058,543,175
Templeton
Global
Smaller
Companies
Fund
21
franklintempleton.com
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
1.
Organization
and
Significant
Accounting
Policies
Templeton
Global
Smaller
Companies
Fund (Fund)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
The
Fund
offers
four
classes
of
shares:
Class
A,
Class
C,
Class
R6
and
Advisor
Class.
Class
C
shares
automatically
convert
to
Class
A
shares
after
they
have
been
held
for
10
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees.
The
following
summarizes
the
Fund’s
significant
accounting
policies.
a.
Financial
Instrument
Valuation
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Fund's
Board
of
Trustees
(the
Board),
the Fund's
administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value.
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities.
Debt
securities
generally
trade
in
the
OTC
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Investments
in
open-end
mutual
funds
are
valued
at
the
closing
NAV.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
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
Fund's
business
day. Events
can occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
22
franklintempleton.com
Semiannual
Report
4
p.m.
Eastern
time. In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund's
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
February
28,
2021,
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
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the
Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
The
Fund
does
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Securities
Lending
The
Fund
participates
in
an
agency
based
securities
lending
program
to
earn
additional
income.
The
Fund
receives
collateral
in
the
form
of
cash
and/or
U.S.
Government
and
Agency
securities
against
the
loaned
securities
in
an
amount
equal
to
at
least
102%
of
the
fair
value
of
the
loaned
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
100%
of
the
fair
value
of
loaned
securities,
as
determined
at
the
close
of
Fund
business
each
day;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
Fund
on
the
next
business
day.
Any
cash
collateral
received
is
deposited
into
a
joint
cash
account
with
other
funds
and
is
used
to
invest
in
a
money
market
fund
managed
by
Franklin
Advisers,
Inc.,
an
affiliate
of
the Fund.
Additionally,
the
Fund
received
$6,472,634
in
U.S.
Government
and
Agency
securities
as
collateral.
The
Fund
may
receive
income
from
the
investment
of
cash
collateral,
in
addition
to
lending
fees
and
rebates
paid
by
the
borrower.
Income
from
securities
loaned,
net
of
fees
paid
to
the
securities
lending
agent
and/
or
third-party
vendor,
is
reported
separately
in
the
Statement
of
Operations.
The
Fund
bears
the
market
risk
with
respect
to any
cash collateral
investment,
securities
loaned,
and
the
risk
that
the
agent
may
default
on
its
obligations
to
the
Fund.
If
the
borrower
defaults
on
its
obligation
to
return
the
securities
loaned,
the
Fund
has
the
right
to
repurchase
the
securities
in
the
open
market
using
the
collateral
received.
The
securities
lending
agent
has
agreed
to
indemnify
the
Fund
in
the
event
of
default
by
a
third
party
borrower.
d.
Income
and
Deferred
Taxes
It
is the
Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The
Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
23
franklintempleton.com
Semiannual
Report
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The
Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
As
a
result
of
several
court
cases,
in
certain
countries
across
the
European
Union, the
Fund
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims).
These
additional
filings
are
subject
to
various
administrative
proceedings
by
the
local
jurisdictions’
tax
authorities
within
the
European
Union,
as
well
as
a
number
of
related
judicial
proceedings.
Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
Statement
of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statement
of
Assets
and
Liabilities.
When
uncertainty
exists
as
to
the
ultimate
resolution
of
these
proceedings,
the
likelihood
of
receipt
of
these
EU
reclaims,
and
the
potential
timing
of
payment,
no
amounts
are
reflected
in
the
financial
statements.
For
U.S.
income
tax
purposes,
EU
reclaims
received
by
the
Fund,
if
any,
reduce
the
amounts
of
foreign
taxes
Fund
shareholders
can
use
as
tax
credits
in
their
individual
income
tax
returns.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
February
28,
2021,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests.
e.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
f.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
g.
Guarantees
and
Indemnifications
Under
the
Fund's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Fund
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
Additionally,
in
the
normal
course
of
business,
the
Fund
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Fund's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund
that
have
not
yet
occurred.
Currently,
the
Fund
expects
the
risk
of
loss
to
be
remote.
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Income
and
Deferred
Taxes
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
24
franklintempleton.com
Semiannual
Report
2.
Shares
of
Beneficial
Interest
At
February
28,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
Six
Months
Ended
February
28,
2021
Year
Ended
August
31,
2020
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
2,385,365
$24,827,931
6,088,095
$52,042,147
Shares
issued
in
reinvestment
of
distributions
..........
2,397,388
25,388,343
2,313,315
22,161,559
Shares
redeemed
...............................
(8,411,644)
(85,743,087)
(23,248,452)
(195,444,838)
Net
increase
(decrease)
..........................
(3,628,891)
$(35,526,813)
(14,847,042)
$(121,241,132)
Class
C
Shares:
Shares
sold
...................................
150,052
$1,498,622
236,110
$1,815,035
Shares
issued
in
reinvestment
of
distributions
..........
23,870
238,225
30,579
276,433
Shares
redeemed
a
..............................
(297,186)
(2,886,437)
(1,060,929)
(8,494,933)
Net
increase
(decrease)
..........................
(123,264)
$(1,149,590)
(794,240)
$(6,403,465)
Class
R6
Shares:
Shares
sold
...................................
560,204
$5,821,243
1,685,316
$14,029,055
Shares
issued
in
reinvestment
of
distributions
..........
182,145
1,936,198
177,856
1,709,193
Shares
redeemed
...............................
(1,225,294)
(12,607,719)
(3,158,936)
(26,862,597)
Net
increase
(decrease)
..........................
(482,945)
$(4,850,278)
(1,295,764)
$(11,124,349)
Advisor
Class
Shares:
Shares
sold
...................................
476,824
$5,022,357
1,190,434
$10,385,794
Shares
issued
in
reinvestment
of
distributions
..........
134,084
1,427,997
132,310
1,274,145
Shares
redeemed
...............................
(480,195)
(4,903,720)
(2,774,444)
(22,293,975)
Net
increase
(decrease)
..........................
130,713
$1,546,634
(1,451,700)
$(10,634,036)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Templeton
Investment
Counsel,
LLC
(TIC)
Investment
manager
Franklin
Templeton
Investments
Corp.
(FTIC)
Subadvisor
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Templeton
Distributors,
Inc.
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
25
franklintempleton.com
Semiannual
Report
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
TIC
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
February
28,
2021,
the
annualized
gross
effective
investment
management
fee
rate
was
0.870%
of
the
Fund’s
average
daily
net
assets.
Under
a
subadvisory
agreement,
FTIC,
an
affiliate
of
TIC,
provides
subadvisory
services
to
the
Fund.
The
subadvisory
fee
is
paid
by
TIC
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
b.
Administrative
Fees
Under
an
agreement
with
TIC,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
TIC
based
on
the
Fund’s
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
compensation
distribution
plan,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
Annualized
Fee
Rate
Net
Assets
0.900%
Up
to
and
including
$200
million
0.885%
Over
$200
million,
up
to
and
including
$700
million
0.850%
Over
$700
million,
up
to
and
including
$1
billion
0.830%
Over
$1
billion,
up
to
and
including
$1.2
billion
0.805%
Over
$1.2
billion,
up
to
and
including
$5
billion
0.785%
Over
$5
billion,
up
to
and
including
$10
billion
0.765%
Over
$10
billion,
up
to
and
including
$15
billion
0.745%
Over
$15
billion,
up
to
and
including
$20
billion
0.725%
In
excess
of
$20
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
3.
Transactions
with
Affiliates
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
February
28,
2021,
the
Fund
paid
transfer
agent
fees
of
$630,898,
of
which $269,025
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies
for
purposes
other
than
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
February
28,
2021,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
December
31,
2021.
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$22,332
CDSC
retained
..............................................................................
$1,553
aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a
a
a
a
a
a
a
a
Templeton
Global
Smaller
Companies
Fund
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.........
$13,747,178
$67,015,073
$(67,264,823)
$
—
$
—
$13,497,428
13,497,428
$—
Total
Affiliated
Securities
....
$13,747,178
$67,015,073
$(67,264,823)
$—
$—
$13,497,428
$—
3.
Transactions
with
Affiliates
(continued)
d.
Sales
Charges/Underwriting
Agreements
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
4.
Income
Taxes
At
February
28,
2021,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
EU
reclaims,
passive
foreign
investment
company
shares,
pass-through
entity
income
and
corporate
actions.
5.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
February
28,
2021,
aggregated
$142,812,042
and
$239,550,459,
respectively.
At
February
28,
2021,
in
connection
with
securities
lending
transactions,
the
Fund
loaned
equity
investments
and
received
$13,497,428
of
cash
collateral.
The
gross
amount
of
recognized
liability
for
such
transactions
is
included
in
payable
upon
return
of
securities
loaned
in
the
Statement
of
Assets
and
Liabilities.
The
agreements
can
be
terminated
at
any
time.
6.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Current
political
and
financial
uncertainty
surrounding
the
European
Union
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
Europe.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
7. Novel
Coronavirus
Pandemic
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
8.
Restricted
Securities
The
Fund
invests
in
securities
that
are
restricted
under
the
Securities
Act
of
1933
(1933
Act).
Restricted
securities
are
often
purchased
in
private
placement
transactions,
and
cannot
be
sold
without
prior
registration
unless
the
sale
is
pursuant
to
an
exemption
under
the
1933
Act.
Disposal
of
these
securities
may
require
greater
effort
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult.
The Fund
may
have
registration
rights
for
restricted
securities.
The
issuer
generally
incurs
all
registration
costs.
At
February
28,
2021,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
Cost
of
investments
..........................................................................
$829,219,049
Unrealized
appreciation
........................................................................
$471,028,124
Unrealized
depreciation
........................................................................
(36,628,022)
Net
unrealized
appreciation
(depreciation)
..........................................................
$434,400,102
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
9.
Holdings
of
5%
Voting
Securities
of
Portfolio
Companies
The
1940
Act
defines
"affiliated
companies"
to
include
investments
in
portfolio
companies
in
which
a
fund
owns
5%
or
more
of
the
outstanding
voting
securities.
During
the
period
ended
February
28,
2021,
investments
in
“affiliated
companies”
were
as
follows:
10.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
4,
2022.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
period
ended
February
28,
2021,
the Fund
did
not
use
the
Global
Credit
Facility.
11.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Shares
Issuer
Acquisition
Date
Cost
Value
Templeton
Global
Smaller
Companies
Fund
1,229,000
Aspirational
Consumer
Lifestyle
Corp.
............
2/01/21
$
12,290,000
$
12,893,215
1,342,000
Sakari
Resources
Ltd.
........................
1/18/12-2/23/12
2,478,736
697,040
Total
Restricted
Securities
(Value
is
1.08%
of
Net
Assets)
.............
$14,768,736
$13,590,255
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
Templeton
Global
Smaller
Companies
Fund
Non-Controlled
Affiliates
Dividends
Aspirational
Consumer
Lifestyle
Corp.
...............
$
—
$
12,290,000
$
—
$
—
$
603,215
$
12,893,215
1,229,000
$
—
Total
Affiliated
Securities
(Value
is
1.0%
of
Net
Assets)
$—
$12,290,000
$—
$—
$
603,215
$12,893,215
$—
8.
Restricted
Securities
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
29
franklintempleton.com
Semiannual
Report
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
February
28,
2021,
in
valuing
the
Fund's
assets
carried
at
fair
value,
is
as
follows:
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
period
.
Level
1
Level
2
Level
3
Total
Templeton
Global
Smaller
Companies
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Bahamas
............................
$
16,128,177
$
—
$
—
$
16,128,177
Belgium
.............................
—
18,981,748
—
18,981,748
Brazil
...............................
13,164,917
—
—
13,164,917
Canada
.............................
31,994,969
—
—
31,994,969
Denmark
............................
5,498,113
—
—
5,498,113
Finland
..............................
—
18,488,097
—
18,488,097
France
..............................
—
7,767,048
—
7,767,048
Germany
............................
25,541,088
22,158,354
—
47,699,442
Hong
Kong
...........................
—
36,708,963
—
36,708,963
Indonesia
............................
—
—
697,040
697,040
Italy
................................
—
57,936,428
—
57,936,428
Japan
...............................
—
91,420,027
—
91,420,027
Netherlands
..........................
9,078,670
15,663,016
—
24,741,686
Singapore
............................
—
—
12,893,215
12,893,215
South
Korea
..........................
—
14,754,666
—
14,754,666
Sweden
.............................
—
58,159,877
—
58,159,877
Switzerland
...........................
18,385,167
44,810,309
—
63,195,476
Taiwan
..............................
—
100,219,606
—
100,219,606
United
Kingdom
.......................
—
31,538,135
—
31,538,135
United
States
.........................
513,053,422
—
—
513,053,422
Preferred
Stocks
........................
4,734,689
—
—
4,734,689
Warrants
..............................
1,023,686
—
—
1,023,686
Private
Limited
Partnership
Funds
............
24,022,296
—
—
24,022,296
Short
Term
Investments
...................
13,497,428
55,300,000
—
68,797,428
Total
Investments
in
Securities
...........
$676,122,622
$573,906,274
a
$13,590,255
$1,263,619,151
a
Includes
foreign
securities
valued
at
$518,606,274,
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.
Balance
at
Beginning
of
Period
Purchases
Sales
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Cost
Basis
Adjust-
ments
a
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Global
Smaller
Companies
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Indonesia
.........
$
556,199
$
—
$
—
$
—
$
—
$
—
$
—
$
140,841
$
697,040
$
140,841
11.
Fair
Value
Measurements
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
30
franklintempleton.com
Semiannual
Report
Significant
unobservable
valuation
inputs
for
material
Level
3 assets
and/or
liabilities and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
February
28,
2021,
are
as
follows:
12.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
The
amendments
in
the
ASU
provides
optional
temporary
financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021.
The
ASU
is
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022. Management
has
reviewed
the
requirements
and
believes
the
adoption
of
this
ASU
will
not
have
a
material
impact
on
the
financial
statements.
13.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Balance
at
Beginning
of
Period
Purchases
Sales
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Cost
Basis
Adjust-
ments
a
Net
Realized
Gain
(Loss)
Net
Unrealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Global
Smaller
Companies
Fund
(continued)
Assets:
Investments
in
Securities:
Common
Stocks:
Singapore
.........
$
—
$
12,290,000
$
—
$
—
$
—
$
—
$
—
$
603,215
$
12,893,215
$
603,215
Total
Investments
in
Securities
.
$556,199
$12,290,000
$—
$—
$—
$
—
$
—
$
744,056
$13,590,255
$744,056
a
May
include
accretion,
amortization,
partnership
adjustments,
and/or
other
cost
basis
adjustments.
Description
Fair
Value
at
End
of
Period
Valuation
Technique
Unobservable
Inputs
Amount
Impact
to
Fair
Value
if
Input
Increases
a
Assets:
Investments
in
Securities:
Common
Stock:
Singapore
..................
$12,893,215
Market
comparables
Discount
rate
4.0%
Decrease
All
other
investments
...........
697,040
b
Total
.......................
$13,590,255
a
Represents
the
directional
change
in
the
fair
value
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
impacts,
if
any,
to
fair
value
and/or
net
assets
have
been
indicated.
b
Includes
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
May
also
include
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
11.
Fair
Value
Measurements
(continued)
Templeton
Global
Smaller
Companies
Fund
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Abbreviations
Selected
Portfolio
FHLB
Federal
Home
Loan
Banks
Templeton
Global
Smaller
Companies
Fund
Tax
Information
(unaudited)
32
franklintempleton.com
Semiannual
Report
1.
Qualified
dividends
are
taxed
at
reduced
long
term
capital
gains
tax
rates.
In
determining
the
amount
of
foreign
tax
credit
that
may
be
applied
against
the
U.S.
tax
liability
of
individuals
receiving
foreign
source
qualified
dividends,
adjustments
may
be
required
to
the
foreign
tax
credit
limitation
calculation
to
reflect
the
rate
differential
applicable
to
such
dividend
income.
The
rules
however
permit
certain
individuals
to
elect
not
to
apply
the
rate
differential
adjustments
for
capital
gains
and/or
dividends
for
any
taxable
year.
Please
consult
your
tax
advisor
and
the
instructions
to
Form
1116
for
more
information.
At
August
31,
2020,
more
than
50%
of
the
Fund’s
total
assets
were
invested
in
securities
of
foreign
issuers.
In
most
instances,
foreign
taxes
were
withheld
from
income
paid
to
the
Fund
on
these
investments.
As
shown
in
the
table
below,
the
Fund
hereby
reports
to
shareholders
the
foreign
source
income
and
foreign
taxes
paid,
pursuant
to
Section
853
of
the
Internal
Revenue
Code.
This
written
statement
will
allow
shareholders
of
record
on
December
17,
2020,
to
treat
their
proportionate
share
of
foreign
taxes
paid
by
the
Fund
as
having
been
paid
directly
by
them.
The
shareholder
shall
consider
these
amounts
as
foreign
taxes
paid
in
the
tax
year
in
which
they
receive
the
Fund
distribution.
The
following
table
provides
a
detailed
analysis
of
foreign
tax
paid,
foreign
source
income,
and
foreign
source
qualified
dividends
as
reported
by
the
Fund,
to
shareholders
of
record.
Foreign
Tax
Paid
Per
Share
is
the
amount
per
share
available
to
you,
as
a
tax
credit
(assuming
you
held
your
shares
in
the
Fund
for
a
minimum
of
16
days
during
the
31-day
period
beginning
15
days
before
the
ex-dividend
date
of
the
Fund’s
distribution
to
which
the
foreign
taxes
relate),
or,
as
a
tax
deduction.
Foreign
Source
Income
Per
Share
is
the
amount
per
share
of
income
dividends
attributable
to
foreign
securities
held
by
the
Fund,
plus
any
foreign
taxes
withheld
on
these
dividends.
The
amounts
reported
include
foreign
source
qualified
dividends
that
have
not
been
adjusted
for
the
rate
differential
applicable
to
such
dividend
income.
1
Foreign
Source
Qualified
Dividends
Per
Share
is
the
amount
per
share
of
foreign
source
qualified
dividends
plus
any
foreign
taxes
withheld
on
these
dividends.
These
amounts
represent
the
portion
of
the
Foreign
Source
Income
Per
Share
that
were
derived
from
qualified
foreign
securities
held
by
the
Fund.
1
At
the
beginning
of
each
calendar
year,
shareholders
will
receive
Form
1099-DIV
which
will
include
their
share
of
taxes
paid
during
the
prior
calendar
year. Shareholders
are
advised
to
check
with
their
tax
advisors
for
information
on
the
treatment
of
these
amounts
on
their
income
tax
returns.
Class
Foreign
Tax
Paid
Per
Share
Foreign
Source
Income
Per
Share
Foreign
Source
Qualified
Dividends
Per
Share
Templeton
Global
Smaller
Companies
Fund
Class
A
...........................................
$0.0166
$0.0670
$0.0321
Class
C
...........................................
$0.0166
$0.0221
$0.0106
Class
R6
..........................................
$0.0166
$0.0870
$0.0417
Advisor
Class
......................................
$0.0166
$0.0800
$0.0383
Templeton
Global
Smaller
Companies
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Information
33
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Board
Approval
of
Investment
Management
Agreements
TEMPLETON
GLOBAL
SMALLER
COMPANIES
FUND
(Fund)
At
a
meeting
held
on
February
23,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
the
Fund,
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
Templeton
Investment
Counsel,
LLC
(TICL)
and
the
Fund
and
the
investment
sub-
advisory
agreement
between
TICL
and
Franklin
Templeton
Investments
Corp.
(Sub-Adviser),
an
affiliate
of
TICL,
on
behalf
of
the
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.
TICL
and
the
Sub-Adviser
are
each
referred
to
herein
as
a
Manager.
In
considering
the
continuation
of
each
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
each
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
each
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
telephonic
contract
renewal
meeting
at
which
the
Independent
Trustees
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters
and,
in
some
cases,
requested
additional
information
from
each
Manager
relating
to
the
contract.
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
each
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
each
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
each
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
each
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
each
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
each
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
each
Manager
and
its
affiliates;
and
management
fees
charged
by
each
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
in
the
current
work-from-home
environment
and
liquidity
risk
management.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
Templeton
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and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
and
growth
opportunities,
as
evidenced
by
its
recent
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
each
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2020.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
a
customized
peer
group
(Performance
Customized
Peer
Group)
selected
by
the
Manager.
The
Board
further
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
global
small-/mid-cap
funds.
The
Performance
Customized
Peer
Group
also
provided
for
the
Board’s
consideration
included
funds
that
are
value
style
and
invest
only
in
stocks
that
have
total
market
cap
not
exceeding
the
lesser
of:
(1)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark
(MSCI
All
Country
World
Small
Cap
Index-NR),
or
(2)
$10
billion,
at
the
time
of
purchase.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
median
of
its
Performance
Universe,
however,
was
above
the
median
of
its
Performance
Customized
Peer
Group
for
the
same
periods.
The
Board
further
noted
the
small
size
of
the
Fund’s
Performance
Customized
Peer
Group
for
the
five
and
10-year
periods
and
that
therefore
no
quintile
information
was
provided
for
the
Fund
for
that
period.
The
Board
discussed
the
performance
of
the
Fund
with
management
and
management
explained
that
the
Performance
Universe
for
the
Fund
was
not
directly
comparable
to
the
Fund
as
the
Performance
Universe
is
not
comprised
solely
of
small-capitalization
funds,
but
also
includes
mid-capitalization
funds.
Management
also
explained
that
the
Fund
is
limited
to
purchasing
securities
with
market
capitalizations
that
do
not
exceed
the
lesser
of
(i)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark,
or
(2)
$10
billion,
at
the
time
of
purchase,
whereas
other
funds
in
the
Performance
Universe
can
purchase
securities
with
higher
market
capitalizations.
Management
also
explained
that
the
foregoing
are
the
reasons
management
asked
Broadridge
to
include
the
Performance
Customized
Peer
Group
which
is
comprised
of
value
style
funds
that
invest
only
in
stocks
that
have
total
market
capitalizations
that
do
not
exceed
the
lesser
of
(i)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark,
or
(2)
$10
billion,
at
the
time
of
purchase,
which
is
consistent
with
the
Fund’s
strategy.
Management
further
explained
that
particular
sectors
(such
as
consumer
discretionary,
health
care,
industrials
and
information
technology)
and
overall
stock
selection
contributed
to
the
Fund’s
relative
longer-term
underperformance.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period.
In
doing
so,
the
Board
noted
the
Fund’s
strong
performance
compared
to
that
of
its
Performance
Customized
Peer
Group.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
as
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
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ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund,
one
other
global
small-/mid-cap
fund,
one
global
large-cap
core
fund,
three
global
multi-cap
value
funds,
one
global
large-
cap
value
fund,
five
global
multi-cap
core
funds,
three
global
multi-cap
growth
funds,
and
three
global
large-cap
growth
funds.
The
Board
noted
that
the
Management
Rate
was
approximately
five
basis
points
above
the
median
and
in
the
fourth
quintile
of
its
Expense
Group.
The
Board
also
noted
that
the
actual
total
expense
ratio
for
the
Fund
was
above
the
median
and
in
the
fifth
quintile
(most
expensive)
of
its
Expense
Group.
The
Board
discussed
with
management
the
composition
of
the
Fund’s
Expense
Group
and
management
explained
that
the
Expense
Group
is
not
directly
comparable
to
the
Fund,
given
the
inclusion
of
multi-cap
and
large-
cap
funds,
as
opposed
to
small-
and
mid-cap
only
funds.
Management
also
explained
that
the
Fund’s
quintile
rankings
improved
to
the
first
quintile
for
the
Management
Rate
and
the
second
quintile
for
the
actual
total
expense
ratio
when
the
Fund’s
expenses
are
compared
to
those
of
its
customized
expense
group,
which
is
comprised
of
funds
that
are
value
style
funds
that
invest
only
in
stocks
that
have
total
market
capitalizations
that
do
not
exceed
the
lesser
of
(i)
the
highest
float-adjusted
market
capitalization
in
the
Fund’s
benchmark,
or
(2)
$10
billion,
at
the
time
of
purchase.
The
Board
noted
that
the
Fund’s
Sub-Adviser
is
paid
by
TICL
out
of
the
management
fee
TICL
receives
from
the
Fund.
After
consideration
of
the
above,
the
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
each
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2020,
being
the
most
recent
fiscal
year-end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
further
noted
management’s
representation
that
the
profitability
analysis
excluded
the
impact
of
the
recent
acquisition
of
the
Legg
Mason
companies
and
that
management
expects
to
incorporate
the
legacy
Legg
Mason
companies
into
the
profitability
analysis
beginning
next
year.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
each
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
each
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
each
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
each
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
management’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
each
Manager
incurs
across
Templeton
Global
Smaller
Companies
Fund
Shareholder
Information
36
franklintempleton.com
Semiannual
Report
the
FT
family
of
funds
as
a
whole.
The
Board
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
each
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
The
Board
recognized
that,
given
the
decline
in
assets
for
the
Fund,
the
Fund
is
not
expected
to
experience
additional
economies
of
scale
in
the
foreseeable
future.
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.
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Statement
of
Investments
The
Fund
files
a
complete
statement
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.
gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
as
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
103
S
04/21
©
2021
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
monitored
and/or
recorded.
Semiannual
Report
and
Shareholder
Letter
Templeton
Global
Smaller
Companies
Fund
Investment
Manager
Distributor
Shareholder
Services
Templeton
Investment
Counsel,
LLC
Franklin
Templeton
Distributors,
Inc.
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
Item 3. Audit Committee Financial Expert.
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
(2) The audit committee financial experts are Ann Torre Bates andDavid W. Niemiec and they are "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. Principal Accountant Fees and Services. N/A
Item 5. Audit Committee
of Listed Registrants.
N/AItem 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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TEMPLETON GLOBAL SMALLER COMPANIES FUND
By __S\Matthew T. Hinkle ________
Matthew T. Hinkle
Chief Executive Officer – Finance and Administration
Date: April 23, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By __S\Matthew T. Hinkle _________
Matthew T. Hinkle
Chief Executive Officer – Finance and Administration
Date: April 23, 2021
By S\Robert G. Kubilis _______
Robert G. Kubilis
Chief Financial Officer
and
Chief Accounting Officer
Date: April 23, 2021