Matthew J. Moberg

Senior Vice President,Portfolio Manager,Franklin Equity Group

INVESTING IN INNOVATIONAugust 2020 INNOVATION IS ACCELERATING

I looked at my iPhone after a run in Central Park. Good. 57 minutes, and for 33 my heart rate was over 160 beats per minute. I had achieved my daily fi tness goal. I pressed “save” on my app so I can monitor my fi tness levels over time. I had a small headache and had just bought a blood sugar monitor, so I checked my app and saw that my blood sugar was normal. Also good. My headache was probably from thirst, and I know that sugar headaches take me much longer to recover from than dehydration headaches. My hotel was downtown, so I grabbed an Uber. Getting into the car, my phone alerted me I could check in to tomorrow’s fl ight to San Francisco. The fl ight was on time. I checked in. In the cab, I watched a few stories from friends in social feeds. I was reminded to text my friend to see what time we’d have dinner. I made a quick reservation at a Mexican restaurant in SoHo recommended by a location-based app. Traffi c wasn’t great, so I absently looked at e-mail and saw that the maker of the cement bookends I really liked was willing to make me three more. I bought them. Arriving at the hotel, I quickly hopped out of my Uber, having already paid the driver through the app. I recalled reading that the average US adult spends 5 hours on their phone. I thought that sounded high, but wondered if it were true…

Over the last decade, smartphones have revolutionized our lives in ways that go well beyond mere audio communication. In addition to Facetime video chats, texting and emailing, billions of people globally use smartphones to shop online, check the weather, hail taxis, navigate, monitor their health, invest, play games, date, fi nd friends, watch movies, listen to music, take pictures and participate in social media.

This is quite remarkable when you think about it—an innovation impacting the world so pervasively that it has transformed our lives in such a short time. Recall it was just thirteen years ago that Steve Jobs—wearing his iconic black turtleneck on the stage of the Moscone Convention Center—introduced the world to the smartphone.

Smartphones are only one example of the many new products and technologies exploding into the economy in recent years. We’ve seen signifi cant breakthroughs in biotechnology, robotics, artifi cial intelligence, genomics, wireless data speeds, 3D printing, autonomous

Perspective fromFranklin Equity Group

2 Investing in Innovation

vehicles, cloud computing, e-commerce and more. Innovation is everywhere. As investment managers we’ve witnessed many concepts surge in popularity, and we’ve learned from many that have failed. Industry and technology continue to evolve, creating a rich backdrop for investors.

Three Takeaways• Innovation drives long-term wealth creation and is accelerating

• We believe investing in innovation requires active management

• Innovation is everywhere: five platforms of growth

THE FOURTH INDUSTRIAL REVOLUTION IS JUST BEGINNINGInnovation has persisted throughout the course of history; but it has not always progressed in a predictable or linear fashion. Innovation is episodic. Periods when we have seen increases in new ideas and technologies typically coincide with sustained and accelerating economic growth. Consider: Growth in the Western world from AD 1 to AD 1820 was approximately 6% per century.3 By comparison, Americans enjoyed a doubling of real output every 32 years throughout the 20th century.4 Before then, real output required 12 centuries to double. Economists define these periods as industrial revolutions. Typical of their creativity, they refer to them as the First, Second, Third and Fourth, the First beginning in 1760.

We believe we are living through the Fourth Industrial Revolution today and that it is driving the current pace of innovation in the marketplace. Building on the Third, a digital revolution occurring since the mid-20th century, the Fourth reflects many technologies—blurring the lines between physical, digital and biological spheres.

In what has become legend among industry insiders, when Steve Jobs unleashed his creation upon the world in September 2007, he introduced the iPhone as “the best iPod we’ve ever made… it has a phone.” He didn’t talk about the device’s internet capabilities or potential for third-party application development until 30 minutes into the speech.1 When the App Store was introduced with his famous “just one more thing” aphorism,

it wasn’t what reviewers focused on. They were more intrigued by the iPod and phone integration and wondered whether the touchscreen keyboard would work. However, it was the App Store that went on to create over a trillion dollars in wealth—including over US$519 billion in 2019, alone.2 New businesses, business models and entire industries were built using the platform.

First: 1760–1840

Railroads, canals, steam engine, cotton gin, textile mills, iron

Second: Late-19th to Early-20th Centuries

Combustible engine, flight, assembly lines, electricity, photography, telegraph/telephone, antibiotics, anesthesia

Third: 1960–Present

Digital media, personal computers, semicon-ductors, internet, chemical compounds

An iPod with a Phone?

The First Three Industrial Revolutions

3 Investing in Innovation

INCREASED PRODUCTIVITY INCREASES WEALTH CREATIONAs investors in innovation, the transformational impact of the Fourth Industrial Revolution supports the five platforms of growth we discuss later in this piece. Technological and industrial advancements increase economic productivity, which is foundational to wealth creation. Paul Krugman, Nobel Prize winner in economics, noted: “Productivity isn’t everything, but in the long run it is almost everything, as a country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”5 Today, the average American only needs to work 11 hours per week to match the productivity of a 40-hour work week in the 1950s.6

Real World Examples of Increased Productivity• When I started my career, I was a small-cap bank auditor. In a bank, only the most

senior members approved loans. It was typically done in group settings, with highly paid individuals sitting in conference rooms, reviewing files, crunching numbers and deliber-ating for hours. Today, with FICO (individual credit) scores, virtually no human being looks at any credit request below US$50,000. A computer does it all.7

• In the days depicted in the popular TV show Mad Men, which took place in the 1960s and 1970s, advertising was sold based on the number of pages in a magazine or sold as a 30-second television slot. Sales were high touch and it was understood that much of advertising spending was “wasted.” In the current US$600 billion annual advertising market, Google, Facebook and others use algorithms to not only maximize revenue, but to also maximize return on investment (ROI) for their customers. Today, internet ad buying is not only the most automated advertising medium, it’s also the most effective. It can be effective as a branding or a direct response event.

• One of the most important aspects of any business is the pricing of products. Pricing is usually done with sales, finance and senior management working together to maximize profit. Historically, it was a very labor-intensive research exercise. Today, the pricing of enormous markets is entirely automated. Airlines, e-commerce companies (e.g., Wal-Mart and Amazon.com) and hotels, just to name a few, allow machines to price their offerings. These are some of the biggest revenue pools in our economy, all completely automated. Pricing can change based on real-time inventory availability, minute-to-minute demand, and even the weather. Algorithms attempt to maximize elasticity of demand across hundreds of thousands of products in real time.

For the first time in history, we can manipulate life, material and data in their base forms: Gene. Atom. Byte.8 We believe our mastery of the micro will allow us to change the macro at an accelerating rate. With these advancements, it’s possible to produce new goods and new materials, and design new elements to fit specific needs. We may start to grow rather than build materials, and design rather than discover new drugs. Genetic engineering, for example, is allowing the development of new diagnostics, new cures, and the design of new drugs to help us live longer and healthier lives. Advancements in microchip

design and low-cost data storage may lead to further development in artificial intelligence and virtual reality. And electrons are being manipulated at the sub-atomic level in the quest to create enormously powerful quantum super computers. The potential outcomes and innovations associated with all these technologies are only limited by imagination. Some ideas may be science fiction, but some concepts once considered science fiction are now mainstream. We have begun to close the gap between art and science—where the former tests the limits of human imagination and the latter tests the limits of nature.

Mastering the Micro to Change the Macro: Gene, Atom, Byte

4 Investing in Innovation

This trend toward increasing productivity, a result of the Fourth Industrial Revolution, is only beginning, in our view. Over the next decade, we believe we will see major technology- driven efficiencies or product improvements in many areas. These will include insurance, medical diagnosis, automotive distribution, industrial design, the pricing and exchange of capital, and the analysis of data.

INVESTING IN INNOVATION DEMANDS ACTIVE MANAGEMENT We invest in some of the most covered companies in the world—from a media and public awareness perspective, they are often also some of the most misunderstood. In our view, innovation has been, and continues to be, one of the most misunderstood parts of the market. This disconnect between public perception and fundamental reality creates oppor-tunities for active management.

Some examples of where we find opportunities are highlighted below:

1. Selecting the Right Innovation at the Right Time Innovation is an inherently difficult space in which to invest; change is constant. Many new technologies or industries, while clearly promising conceptually, may not be developed enough to be investable yet. Space exploration or quantum computing are examples. Alternatively, some innovations may present what appears to be an immediate investment opportunity, but ultimately the business models they are attached to are not profitable. Blockchain and cannabis are good examples of this. Still, other innovations that seem promising at first, like fuel cells, never fully materialize, or they may get leapfrogged along the way.

Although the environment for investing in innovation is rich, not all innovations are good investments. We believe experience is necessary to identify ideas and technologies that have true lasting power and meaningful impact. Business model, commercial viability and timing are all key.

Take 3D printing as an example. Early on, we were often asked how or where we were investing in this promising new technology. The answer, initially, was we’re not. 3D printers were suffering from pricing pressures and commoditization. Instead of investing in the 3D printing companies themselves, we looked for companies that could use 3D printing to potentially drive innovation in their own business models. Examples include Nike using the technology to create highly profitable custom shoes, or medical technology companies creating custom prosthetics, on-demand eyewear, or orthodontics. The potential applica-tions are truly endless. The key is investing in the “right” innovation at the right time. We seek companies that have distinct growth drivers, solid business models and the capacity to build revenues and earnings by addressing secular shifts.

2. Understanding the Pace of Growth Innovation is often mispriced, as investors underestimate how quickly something will be adopted in an increasingly global marketplace. New product adoption may accelerate rapidly. However, growth patterns often resemble “s-curves,” rather than straight lines, as seen in Exhibit 1 on the next page. It may feel counterintuitive to suggest that—all things being equal—a successful company exhibiting a high growth rate will grow even faster the following year. In fact, it happens all the time.

We have begun to close the gap between art and science—where the former tests the limits of human imagination and the latter tests the limits of nature.

5 Investing in Innovation

Facebook is a good case study for this phenomenon. In 1Q 2012, Facebook had ZERO revenue from mobile sales. The company launched mobile ads in 2Q 2012, and generated US$13 million in revenue, or 1.3% of total revenues. From 2012 to 2013, Facebook’s total company revenue growth accelerated from 37% to 55%, driven almost exclusively by mobile ads.9 Fast forward to today: as seen in Exhibit 2, in the most recent comparable quarter, mobile ads were 94% of Facebook’s revenue.

Facebook is a mobile story. Mobile is better for advertisements as compared to desktop as there is limited inventory and very good targeting. Content costs, after all, are near zero for Facebook. Instead of an expensive, high-production cost TV ad, it’s a photo and ad copy. At Facebook, operating margins are about 50%, because the content is given to them—the content is YOU.

GROWTH RATE OF INNOVATIVE TECHNOLOGIES OFTEN UNDERESTIMATED

Exhibit 1: The S-Curve of New Technology Adoption

FACEBOOK GROWTH FUELED BY MOBILE ADS

Exhibit 2: Facebook’s Quarterly Revenue by Segment

June 30, 2012– September 30, 2019

Technology Adoption Rate EARLY ADOPTERS EARLY MAJORITY LATE MAJORITY LAGGARDS

New ideas follow an S-curve, where growth accelerates

INNOVATORS

PACE

Source: Franklin Templeton. For illustrative purposes only. Rogers, E. M. (2003). Diffusion of innovations (5th ed.). New York, NY: Free Press.

Revenue (USD Billions)

Source: Franklin Templeton Capital Market Insights Group; Bloomberg. Facebook Inc. did not separately attribute advertising revenue to the desktop and mobile segments in their 4Q 2019 or 1Q 2020 earnings releases.

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q3 2019

Desktop Advertising Mobile Advertising Payments & Other Fees Revenue

6 Investing in Innovation

3. Recognizing the DURATION of Growth In addition to mispricing the pace of innovation, we find the market often underestimates the longevity, or duration, of a company’s growth. We define duration as the length of time a company grows significantly more than gross domestic product (GDP). We have found that many innovative companies may grow revenues or sales for significantly longer periods than average market participants might expect, in many cases decades, due to the creation and utilization of new technologies or business models. We seek companies with durable growth that we believe the rest of the market has not yet recognized. This is where active management plays an important role in investing in innovation.

We consider Salesforce.com (Salesforce) to be a good case study for duration in innovation. Salesforce went public in 2004. From 2005–2018, the company’s revenues grew at a 37% compound annual growth rate (CAGR). Including the great financial crisis, sales never grew less than 20% during that time.10 If one were to have just read the company’s annual reports during that period (instead of, perhaps, media coverage) they would likely never guess investors questioned Salesforce’s growth prospects. However, the stock collapsed more than 50% on five occasions in its first 10 years. Volatility aside, if you simply held the stock since the initial public offering (IPO), you would have made 15 times your investment.11

INNOVATION IS EVERYWHERE: FIVE PLATFORMS FOR GROWTHSince the DynaTech strategy launched in 1968, we have believed innovation can be found in any part of the economy. We seek to invest wherever innovation occurs, regardless of sector classification, market capitalization or geographical location. There have been significant breakthroughs in many sectors of the economy. To organize the change occurring in the economy, we have outlined five major evolving platforms of growth. These are not intended to be completely inclusive, in fact, we hope they are not. We expect these five platforms of growth to generate considerable economic value over the next five to ten years.

Global E-commerce We believe global e-commerce is an arena of tremendous opportunity. Per estimates, global sales were only 14% penetrated by e-commerce pre-COVID.12 Today, with the new reality of COVID, we have seen estimates of between 22%–25% penetration.13 Even in the US, so-called “highly” penetrated industries, like travel, books, office supplies and media are, on average, only 41% penetrated.14 And, there are many more industries—like groceries and global transportation—that are only modestly penetrated by e-commerce.

Within global e-commerce, beyond companies like Amazon and Alibaba, we see significant opportunity in industries like fashion, automobiles, travel, ride sharing, restaurant delivery and even textbooks. We also see opportunity in payment companies that significantly remove friction, both in terms of ease of use, security and safety from the system. Other opportunities include business-to-business (B2B) procurement, and software that enables brick-and-mortar companies to have an online presence. Drone manufacturers and other new ways to deliver packages and products could also become potential investments.

The common perception may be that global e-commerce is late stage. In our view, there is so much further to go.

7 Investing in Innovation

Genetics Breakthroughs The sequencing—or decoding—of the gene is one of the greatest accomplishments of our era. The gene was discovered in 1953,15 but first sequenced during the Human Genome Project in 2003, at a cost of US$2.7 billion.16 The cost of gene sequencing—or mapping DNA for diagnostic and curative purposes—has fallen rapidly in recent years. We believe the industry is on the cusp of creating meaningful diagnostics and therapeutics—and, as a result, wealth creation. We are particularly interested in companies within the diagnostics, gene editing and gene silencing arenas that will likely benefit from this dynamic. Today, mapping a genome costs roughly US$1,000; at this price, we believe there should be an explosion of possibilities. These opportunities may go beyond human gene therapeutics, to agricultural and even artificial intelligence applications.

Intelligent Machines Artificial intelligence or machine learning is permeating every layer of product development. From using simulation tools, to advanced graphics, to designing products and getting immediate feedback as to points of weakness in a structure, or real-time intelligence on wear and tear that can feed back into new designs—smart machines are involved.

If the last thirty years were spent organizing data with mainframes, personal computers and mobile phones, we believe the next thirty years could be set up to take that data and change our lives in the physical world. We expect to see opportunities in companies that intelligently design, manufacture, transport and maintain physical machines, in addition to investing, of course, in the machines themselves. We view this as a virtuous cycle, which will have shorter and shorter feedback loops, making improvements to physical goods much faster.

The future of production will include individualized products designed specific to the needs of the customer. Efficiencies created in the design and manufacturing process, employing massive amounts of data, will enable that level of specificity and customization.

New Finance We believe access to capital is one of the fundamental differences between developed and developing countries—the grease that allows efficient transfer of value. We believe there are three vectors that drive access to capital.

The first is our concept of what constitutes money. In the past, people bartered for goods and services, which can be very inefficient. We have moved from barter, to precious metals—backed by their own innate scarcity—to fiat currency backed by the full faith and credit of a government. Today, we are talking about currencies backed by algorithms.

Similarly, the other two vectors, efficient pricing and methods of exchange, have also significantly evolved. In the past, the better barterer determined the price of your goods and services; then it was a loan officer at a bank with all his/her intrinsic biases. Today, we are increasingly using data to appropriately price risk, allowing us to allocate capital in more efficient ways. Methods of exchange are also evolving with the trends in e-commerce, allowing mobile payments and digital wallets to gain traction.

Exponential Data Underlying virtually all our investment themes is the constant of data. Without data, none of these platforms can be successful. But data isn’t virtual—there is a physical component to data that is often ignored. We need to clean the collected data, then store and deliver the same data. That requires massive amounts of datacenters, fiber-optic cable, and

8 Investing in Innovation

cell towers—among other supporting infrastructure. To use data for something like artificial intelligence, computing power and memory are crucial. Graphics processing units, central processing units and field programmable gate arrays represent some of the many components necessary to process that data more efficiently.

The creation, cleaning, storage and delivery of data will lead to new applications like augmented and virtual reality, artificial intelligence & machine learning, software as a service, and the sharing economy. There are many investment opportunities in companies that play critical roles all along this value chain. Some have postulated data is becoming the oil or gold of the new economy. We agree.

ANY SECTOR. ANY MARKET CAP. ANYWHERE. RIGHT IN SILICON VALLEY FOR OVER HALF A CENTURY.As active managers we recognize the importance of having the flexibility to invest in any sector, any market capitalization, and anywhere—because innovation is everywhere. Outperforming the market is hard and we have designed our process and product to be as flexible as possible. Being in the heart of Silicon Valley allows us to work side-by-side with some of the world’s leading innovators. Our team is constantly talking with thought leaders across industries; reading up on the latest developments; and meeting with compa-nies, public and private, to understand the technologies and ideas that could have transformative potential. Change is happening rapidly, only through active management is it possible to identify and capitalize upon significant inflection points.

Innovation-Driven Philosophy Our team’s investment philosophy is centered on the belief that innovation drives wealth creation. The three key tenets of the philosophy are:

• Innovation drives long-term wealth creation in the economy and therefore should be at the center of investments that seek to outperform market benchmarks;

• Investing in innovation demands active management in our view: innovation is often mispriced, as it frequently lasts longer and is adopted faster than expected; and

• Innovation is everywhere, occurring in all parts of the economy and every industry.

Located in Silicon Valley Franklin Equity Group’s presence in the heart of Silicon Valley allows better access to leading technology companies, venture capital firms and research universities, and offers a distinct advantage over remote asset managers. The portfolio management team draws on a deep bench of 30 equity research analysts. The analysts scour the market capitalization spectrum for compa-nies on the forefront of innovation and offer focused industry coverage within sector-based teams. The team’s knowledge of innovation can offer an edge in spotting emerging leaders.

Innovation Theme Complements Core Equity Holdings Our approach to investing is differentiated, focused on identifying companies whose growth prospects are poised to benefit from “innovation.” We aim to provide exposure to pockets of growth and dynamic technolo-gies that other funds and the index may not. Our strategies may offer a compelling addition or complement core equity in a client’s portfolio.

Franklin Templeton Innovation Strategy

9 Investing in Innovation

WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market condi-tions. Special risks are associated with foreign investing, 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. Investments in fast-growing industries like the technology sector (which historically has been volatile) could result in increased price fluctuation, especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments. The companies and case studies shown herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton Investments. The opinions are intended solely to provide insight into how securities are analyzed. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio. This is not a complete analysis of every material fact regarding any industry, security or investment and should not be viewed as an investment recommendation. This is intended to provide insight into the portfolio selection and research process. Factual statements are taken from sources considered reliable but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or as an offer for any particular security. Past performance does not guarantee future results.

Endnotes1. Source: Newport, C. “Steve Jobs Never Wanted Us to Use Our iPhones Like This,” New York Times, January 25, 2019.2. Source: Apple Inc. “Apple’s App Store ecosystem facilitated over half a trillion dollars in commerce in 2019,” News Release, June 15, 2020.3. Source: Maddison, A. “Poor until 1820,” The Wall Street Journal, January 11, 1999.4. Source: Gordon, R. 2016. The rise and fall of American growth: The U.S. standard of living since the Civil War, Princeton: Princeton University Press.5. Source: Krugman, P. 1990. The Age of Diminished Expectations: U.S. Economic Policy in the 1990s, Cambridge: MIT Press.6. Source: Brynjolfsson, E. and A. McAfee. 2014. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, New York: W. W. Norton & Company.7. Source: Bayston, et al., “Digital innovations—pinpointing fixed income credit risks,” Franklin Templeton Thinks: Fixed Income Markets, September 6, 2019.8. Source: Mukherjee, S. 2016. The Gene: An Intimate History. New York: Scribner.9. Source: Facebook, Inc. Form 10-K, 2012-2019 and 2013-2020. As of April 30, 2020.10. Source: Bloomberg. Annual revenue for Salesforce.com 12/31/05 to 12/31/18. As of July 1, 2020.11. Source: Bloomberg. Stock prices for Salesforce.com 12/31/04 to 12/31/19. As of July 1, 2020.12. Source: Lipsman, A. “Global Ecommerce 2019: Ecommerce Continues Strong Gains Amid Global Economic Uncertainty,” eMarketer, June 2019.13. Source: MoffettNathanson. Payments: From Tidal Wave to Tsunami—Our Proprietary eCommerce Forecast, Updated for COVID-19. As of May 22, 2020.14. Source: Lipsman, A, “US Ecommerce 2019: Mobile and Social Commerce Fuel Ongoing Ecommerce Channel Shift,” eMarketer, June 27, 2019.15. Source: Heather, J. M., and B. Chain. 2016. The sequence of sequencers: The history of sequencing DNA. Genomics, 107(1), 1–8.16. Source: Singh, S. 2018. The hundred-dollar genome: a health care cart before the genomic horse. CMAJ: Canadian Medical Association journal = journal de l’Association medicale

Canadienne, 190(16), E514.

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All investments involve risks, including possible loss of principal.

Data from third party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verifi ed, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments opinions and analyses in the material is at the sole discretion of the user.

Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affi liates and/or their distributors as local laws and regulation permits. Please consult your own fi nancial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction.

Issued in the U.S. by Franklin Templeton Distributors, Inc., One Franklin Parkway, San Mateo, California 94403-1906, (800) DIAL BEN/342-5236, franklintempleton.com—Franklin Templeton Distributors, Inc. is the principal distributor of Franklin Templeton U.S. registered products, which are not FDIC insured; may lose value; and are not bank guaranteed and are available only in jurisdictions where an offer or solicitation of such products is permitted under applicable laws and regulation.

Australia: Issued by Franklin Templeton Investments Australia Limited (ABN 87 006 972 247) (Australian Financial Services License Holder No. 225328), Level 19, 101 Collins Street, Melbourne, Victoria, 3000 / Austria/Germany: Issued by Franklin Templeton Investment Services GmbH, Frankfurt, Mainzer Landstr. 16, 60325 Frankfurt/Main, Tel 08 00/0 73 80 01 (Germany), 08 00/29 59 11 (Austria), Fax +49(0)69/2 72 23-120, info@franklintempleton.de, info@franklintempleton.at / Canada: Issued by Franklin Templeton Ivestments Corp., 200 King Street West, Suite 1500 Toronto, ON, M5H3T4, Fax (416) 364-1163, (800) 387-0830, www.franklintempleton.ca / Netherlands: Franklin Templeton International Services S.à r.l., Dutch Branch, World Trade Center Amsterdam, H-Toren, 5e verdieping, Zuidplein 36, 1077 XV Amsterdam, Netherlands. Tel +31 (0) 20 575 2890 / United Arab Emirates: Issued by Franklin Templeton Investments (ME) Limited, authorized and regulated by the Dubai Financial Services Authority. Dubai office: Franklin Templeton, The Gate, East Wing, Level 2, Dubai International Financial Centre, P.O. Box 506613, Dubai, U.A.E., Tel +9714-4284100, Fax +9714-4284140 / France: Issued by Franklin Templeton France S.A., 20 rue de la Paix, 75002 Paris France / Hong Kong: Issued by Franklin Templeton Investments (Asia) Limited, 17/F, Chater House, 8 Connaught Road Central, Hong Kong / Italy: Issued by Franklin Templeton International Services S.à.r.l.—Italian Branch, Corso Italia, 1—Milan, 20122, Italy / Japan: Issued by Franklin Templeton Investments Japan Limited / Korea: Issued by Franklin Templeton Investment Trust Management Co., Ltd., 3rd fl., CCMM Building, 12 Youido-Dong, Youngdungpo-Gu, Seoul, Korea 150-968 / Luxembourg/Benelux: Issued by Franklin Templeton International Services S.à r.l.—Supervised by the Commission de Surveillance du Secteur Financier–8A, rue Albert Borschette, L-1246 Luxembourg, Tel +352-46 66 67-1, Fax +352-46 66 76 / Malaysia: Issued by Franklin Templeton Asset Management (Malaysia) Sdn. Bhd. & Franklin Templeton GSC Asset Management Sdn. Bhd / Poland: Issued by Templeton Asset Management (Poland) TFI S.A.; Rondo ONZ 1; 00-124 Warsaw / Romania: Issued by Bucharest branch of Franklin Templeton Investment Management Limited (“FTIML”) registered with the Romania Financial Supervisory Authority under no. PJM01SFIM/400005/14.09.2009, and authorized and regulated in the UK by the Financial Conduct Authority / Singapore: Issued by Templeton Asset Management Ltd. Registration No. (UEN) 199205211E. 7 Temasek Boulevard, #38-03 Suntec Tower One, 038987, Singapore / Spain: Issued by Franklin Templeton International Services S.à r.l.—Spanish Branch, Professional of the Financial Sector under the Supervision of CNMV, José Ortega y Gasset 29, Madrid, Spain. Tel +34 91 426 3600, Fax +34 91 577 1857 / South Africa: Issued by Franklin Templeton Investments SA (PTY) Ltd which is an authorised Financial Services Provider. Tel +27 (21) 831 7400, Fax +27 (21) 831 7422 / Switzerland: Issued by Franklin Templeton Switzerland Ltd, Stockerstrasse 38, CH-8002 Zurich / UK: Issued by Franklin Templeton Investment Management Limited (FTIML), registered office: Cannon Place, 78 Cannon Street, London EC4N 6HL, Tel +44 (0)20 7073 8500. Authorized and regulated in the United Kingdom by the Financial Conduct Authority / Nordic regions: Issued by Franklin Templeton International Services S.à r.l., Contact details: Franklin Templeton International Services S.à r.l., Swedish Branch, filial, Nybrokajen 5, SE-111 48, Stockholm, Sweden. Tel +46 (0)8 545 012 30, nordicinfo@franklintempleton.com, authorised in the Luxembourg by the Commission de Surveillance du Secteur Financier to conduct certain financial activities in Denmark, in Sweden, in Norway, in Iceland and in Finland. Franklin Templeton International Services S.à r.l., Swedish Branch, filial conducts activities under supervision of Finansinspektionen in Sweden / Offshore Americas: In the U.S., this publication is made available only to financial intermediaries by Templeton/Franklin Investment Services, 100 Fountain Parkway, St. Petersburg, Florida 33716. Tel (800) 239-3894 (USA Toll-Free), (877) 389-0076 (Canada Toll-Free), and Fax (727) 299-8736. Investments are not FDIC insured; may lose value; and are not bank guaranteed. Distribution outside the U.S. may be made by Templeton Global Advisors Limited or other sub-distributors, intermediaries, dealers or professional investors that have been engaged by Templeton Global Advisors Limited to distribute shares of Franklin Templeton funds in certain jurisdictions. This is not an offer to sell or a solicitation of an offer to purchase securities in any jurisdiction where it would be illegal to do so.

Please visit www.franklinresources.com to be directed to your local Franklin Templeton website.

© 2020 Franklin Templeton Investments. All rights reserved. INNOV_TPA4_1020