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Not FDIC Insured May Lose Value No Bank Guarantee Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing.

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Presentation on theme: "Not FDIC Insured May Lose Value No Bank Guarantee Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing."— Presentation transcript:

1 Not FDIC Insured May Lose Value No Bank Guarantee Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information for any of the Franklin, Templeton or Mutual Series funds listed in this seminar, talk to your financial advisor, call (800) DIAL BEN/ or visit franklintempleton.com. Please read a prospectus carefully before you invest or send money.

2 VALUE BLENDGROWTHSECTORGLOBALINTERNATIONALFIXED INCOME TAX-FREE INCOME HYBRIDASSET ALLOCATION Asset Allocation A STRATEGY FOR REAL-LIFE INVESTING

3 Agenda What Is Asset Allocation and How Can It Help You? Selecting the Right Allocation Plan Staying on Track 2

4 What Is Asset Allocation and How Can It Help You?

5 Asset Allocation WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU? Diversifies Your Investments Is a Common-Sense Investment Strategy Tailored to Your Needs and Goals 4

6 Benefits of Asset Allocation Diversification does not eliminate the risk of loss. WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU? May Reduce Overall Risk May Improve Your Chances to Earn More Consistent Returns over Time Helps Keep You Focused on Your Goals 5

7 Stocks and Bonds Are Just the Beginning WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU? Stocks Growth Stocks Value Stocks Large-Cap Stocks Small-Cap Stocks Foreign Stocks Bonds U.S. Gov’t Bonds Municipal Bonds Corporate Bonds Foreign Bonds 6

8 Three Popular Strategies for Investing This chart is for illustrative purposes only. It is important to note that an asset allocation strategy does not ensure results superior to other investment strategies and also does not guarantee a profit or protect against a loss. The chart does not represent the performance of any Franklin, Templeton or Mutual Series fund. 1. Source: © 2013 Morningstar. Large-cap stocks are represented by the S&P 500 Index; large-cap growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and S&P 500 Growth Index thereafter; large-cap value stocks are represented by the S&P 500/Barra Value Index until 1995 and S&P 500 Value Index thereafter; Small-cap stocks are represented by the Russell 2000 ® Index; small-cap growth stocks are represented by the Russell 2000 Growth Index; small-cap value stocks are represented by the Russell 2000 Value Index, foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays U.S. Aggregate Index. 2. Each year’s new investments are made into the best-performing asset class index for the previous calendar year. 3. Each year’s new investments are made into the worst-performing asset class index for the previous calendar year. 4. Annual investments are distributed evenly among all eight asset class indices each calendar year and the portfolio is rebalanced annually. Past performance does not guarantee future results. Indexes are unmanaged and one cannot invest directly in an index. Total Investment Value of Portfolio Average Annual Total Return WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU? For the 20-Year Period Ended December 31, Investing with the Loser Investing in last year’s worst 1,3 performing asset class $200,000$425, % 3.Asset Allocation Investing consistently across several asset classes 1,4 $200,000$433, % 1. Chasing the Winners Investing in last year’s best 1,2 performing asset class $200,000$395, % 7

9 Source: © 2013 Morningstar. Large-cap stocks are represented by the S&P 500 Index; large-cap growth stocks are represented by the S&P 500/ Barra Growth Index until 1995 and S&P 500 Growth Index thereafter; large-cap value stocks are represented by the S&P 500/Barra Value Index until 1995 and S&P 500 Value Index thereafter; small-cap stocks are represented by the Russell 2000 Index; small-cap growth stocks are represented by the Russell 2000 Growth Index; small-cap value stocks are represented by the Russell 2000 Value Index, foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays U.S. Aggregate Index. Past performance does not guarantee future results. Indexes are unmanaged and one cannot invest directly in an index. WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU? Why Diversify? Because Winners Rotate Annual Returns of Key Asset Classes 1993–2012 Diversification does not guarantee a profit or protect against a loss. 8

10 Why Diversify? Because Winners Rotate WHAT IS ASSET ALLOCATION AND HOW CAN IT HELP YOU? Annual Returns of Key Asset Classes 1993–2012 Diversification does not guarantee a profit or protect against a loss. Source: © 2013 Morningstar. Large-cap stocks are represented by the S&P 500 Index; large-cap growth stocks are represented by the S&P 500/ Barra Growth Index until 1995 and S&P 500 Growth Index thereafter; large-cap value stocks are represented by the S&P 500/Barra Value Index until 1995 and S&P 500 Value Index thereafter; small-cap stocks are represented by the Russell 2000 Index; small-cap growth stocks are represented by the Russell 2000 Growth Index; small-cap value stocks are represented by the Russell 2000 Value Index, foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays U.S. Aggregate Index. Past performance does not guarantee future results. Indexes are unmanaged and one cannot invest directly in an index. 9

11 Selecting the Right Allocation Plan

12 Source: © 2013 Morningstar. Stock investments are represented by equal investments in the S&P 500 Index, Russell 2000 Index and MSCI EAFE Index, representing large U.S. stocks, small U.S. stocks and foreign stocks, respectively. Bonds are represented by the Barclays U.S. Aggregate Index. Cash equivalents are represented by the Payden & Rygel 90-Day U.S. Treasury Bill Index. Portfolios are rebalanced annually. Indexes are unmanaged, and one cannot invest directly in an index. These sample portfolios offer a general idea of what various asset allocation plans look like and how they have performed over time. Franklin Templeton recommends consulting a professional financial advisor to help you determine if certain adjustments are needed to keep your asset allocation plan balanced and on target. Past performance does not guarantee future results. SELECTING THE RIGHT ALLOCATION PLAN What Kind of Allocation Is Right for Me? Asset-Allocated Sample Portfolios: 12/31/92–12/31/12 100% Stocks 20-Year Average Annual Return7.93% Best One-Year Return38.37% Worst One-Year Return-37.95% 80% Stocks 20% Bonds 20-Year Average Annual Return7.94% Best One-Year Return31.52% Worst One-Year Return-29.31% 11

13 Source: © 2013 Morningstar. Stock investments are represented by equal investments in the S&P 500 Index, Russell 2000 Index and MSCI EAFE Index, representing large U.S. stocks, small U.S. stocks and foreign stocks, respectively. Bonds are represented by the Barclays U.S. Aggregate Index. Cash equivalents are represented by the Payden & Rygel 90-Day U.S. Treasury Bill Index. Portfolios are rebalanced annually. Indexes are unmanaged, and one cannot invest directly in an index. These sample portfolios offer a general idea of what various asset allocation plans look like and how they have performed over time. Past performance does not guarantee future results. What Kind of Allocation Is Right for Me? Asset-Allocated Sample Portfolios: 12/31/92–12/31/12 SELECTING THE RIGHT ALLOCATION PLAN 60% Stocks 40% Bonds 20-Year Average Annual Return7.76% Best One-Year Return24.66% Worst One-Year Return-20.67% 40% Stocks 40% Bonds 20% Cash Equivalents 20-Year Average Annual Return6.79% Best One-Year Return18.92% Worst One-Year Return-12.66% 20% Stocks 60% Bonds 20% Cash Equivalents 20-Year Average Annual Return6.32% Best One-Year Return17.44% Worst One-Year Return-4.03% 12

14 Source: © 2013 Morningstar. All Rights Reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Risk is measured by annualized standard deviation of monthly total returns. Indexes are unmanaged and one cannot invest directly in an index. The asset-allocated portfolio is rebalanced annually. Past performance does not guarantee future results. Based on an 80% Stock; 20% Bond Allocation For the 20-Year Period Ended December 31, 2012 SELECTING THE RIGHT ALLOCATION PLAN Put Risk and Reward in Perspective This Asset-Allocated Portfolio Would Have Given You Comparable Returns with Less Risk 13

15 Staying on Track

16 Source: © 2012 Morningstar. STAYING ON TRACK Staying on Track Original Allocation: 80% Stocks, 20% Bonds December 31,

17 STAYING ON TRACK Staying on Track Allocation 5 Years Later: 74% Stocks, 26% Bonds December 31, 2012 Source: © 2013 Morningstar. 16

18 1. The fund is closed to new investors, with the exception of select retirement plans. Existing shareholders may continue adding to their accounts. Large StocksLarge Value StocksForeign Stocks Franklin Focused Core Equity FundFranklin Equity Income FundMutual Global Discovery Fund Franklin Rising Dividends FundFranklin Large Cap Value FundTempleton Foreign Fund Large Growth StocksMutual Beacon FundTempleton Growth Fund Franklin Flex Cap Growth FundMutual Quest FundBonds Franklin Growth FundMutual Shares FundFranklin Strategic Income Fund Franklin Growth Opportunities FundSmall Value StocksFranklin Total Return Fund Small Growth StocksFranklin Balance Sheet Investment FundFranklin U.S. Government Securities Fund Franklin Small Cap Growth FundFranklin MicroCap Value Fund 1 Templeton Global Bond Fund Franklin Small-Mid Cap Growth FundFranklin Small Cap Value Fund32 Municipal Bond Funds Diversification does not assure a profit or protect against a loss. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call Franklin Templeton Investments at (800) DIAL BEN/ or visit franklintempleton.com. Please carefully read a prospectus before investing. STAYING ON TRACK Franklin Templeton Helps You Diversify 17

19 Actively Managed Target Date Portfolios 1 Franklin LifeSmart™ 2015 Retirement Target Fund Franklin LifeSmart™ 2025 Retirement Target Fund Franklin LifeSmart™ 2035 Retirement Target Fund Franklin LifeSmart™ 2045 Retirement Target Fund Actively Managed Target Risk Portfolios Franklin Templeton Conservative Allocation Fund Franklin Templeton Moderate Allocation Fund Franklin Templeton Growth Allocation Fund Static Allocation Portfolios Franklin Templeton Corefolio ® Allocation Fund Franklin Templeton Founding Funds Allocation Fund Franklin LifeSmart™ 2020 Retirement Target Fund Franklin LifeSmart™ 2030 Retirement Target Fund Franklin LifeSmart™ 2040 Retirement Target Fund Franklin LifeSmart™ 2050 Retirement Target Fund STAYING ON TRACK Combination Funds Can Make Asset Allocation Easier Diversification does not assure a profit or protect against a loss. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call Franklin Templeton Investments at (800) DIAL BEN/ or visit franklintempleton.com. Please carefully read a prospectus before investing. 1. Investors generally choose the fund that has the stated target date most closely approximating their retirement date. It’s important to note that the principal value of the fund will fluctuate and is not guaranteed at any time, including at or after the stated target date for the fund; nor is there any guarantee that the fund will provide sufficient income, at or through the investor’s retirement. 18

20 STAYING ON TRACK 19 ®

21 Review What Is Asset Allocation and How Can It Help You? Selecting the Right Allocation Plan Staying on Track 20

22 What Do I Do Now? Determine Your Financial Goals Schedule a Meeting with Your Financial Advisor 21

23 © 2013 Franklin Templeton Investments. All rights reserved. Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, California (800) DIAL BEN ® / franklintempleton.com AA SEM 07/13


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