Fund Charges and Costs

The charges you pay are used to pay the costs of running the fund, including the costs of marketing and distributing it. These charges reduce the potential growth of your investment. In accordance with our corporate values, Franklin Templeton Investments promotes the understanding of the nature of charges, costs and transparency, which is in line with Investment Association (IA) recommended practice.

The notes below explain what these charges may be and the table on the following pages lists the charges applicable to our funds. For more detailed information about charges, please refer to the “Fees and Charges” section of the current prospectus of Franklin Templeton Funds or Franklin Templeton Investment Funds.

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  • Entry charge / Initial Charge

    At present there is no entry charge for class Z, W or I shares.

    If charges were to be introduced the company would give investors appropriate notice. More details can be found in the Franklin Templeton Funds’ or Franklin Templeton Investment Funds’ Prospectus and Supplementary Information Document.

    Exit charge

    There is no exit charge for these funds.

    Performance charge

    There is no performance charge for these funds.

    Ongoing charges

    There are regular charges for investing in a fund. These “ongoing charges” are used to pay for the running of the fund and it covers all aspects of operating a fund during the year, including fees paid for investment management, administration and the independent oversight functions. The fee is shown as a percentage of the Fund’s average net assets during the year.

    When previously incurred expense would not be a fair representation of the future costs of investing in the fund, or where 12 months of information is unavailable we calculate an estimated charge. The calculations for the charges displayed in the table are as at 31 March 2017.

    A full breakdown of charges is available below:

  • Franklin Templeton Funds OEIC

    We operate a single pricing methodology for this Fund. Using the single pricing method, no provision is made in the price of a unit for any spread between the buying and selling prices of the underlying investments, any dealing costs, stamp duty or any other foreign taxes.

    There are circumstances where dealing in a Fund may have an adverse effect on its value and therefore on the interests of continuing shareholders, known as 'dilution'. These are when there are large volumes of deals or where a Fund is in continual growth or decline. To protect the interests of continuing shareholders, we may apply a 'dilution adjustment' (which is applied to the price of shares on a given day).

    The dilution adjustment for each Fund will be calculated by reference to the estimated costs of dealing in the underlying investments of that Fund, including any dealing spreads, commissions and transfer taxes.

    It is not possible to predict accurately whether dilution will occur at any point in time. Consequently, it is also not possible to accurately predict how frequently we will be required to make a dilution adjustment. However, we estimate that the rate of dilution will typically fall in the range from 0.01% to 1% when buying or selling Shares.

    Franklin Templeton Investment Funds SICAV

    We operate a single pricing methodology for this fund and reserve the right to adjust the fund’s price to protect your investment from the costs of buying or selling investments that result from other investors joining or leaving the fund.

    As this adjustment is related to the inflows and outflows of money from the fund, which it is not possible to predict, it is also not possible to predict how frequently the Company will need to make such adjustments.

    Such adjustments are termed swing pricing and may be applied across all Funds of the Company. The extent of the price adjustment will be reset by the Company on a periodic basis to reflect an approximation of current dealing and other costs. Such adjustments may vary from fund to fund and will not exceed 2% of the original Net Asset Value per Share.

  • The purchase and sale of shares for a fund incurs broker commissions, transfer taxes and stamp duty which are paid by the fund on each transaction. In addition, there is a dealing spread between the buying and selling prices of the underlying investments. Unlike shares, other types of investments (such as bonds, money market instruments, derivatives) have no separately identifiable transaction costs; these costs form part of the dealing spread. Dealing spreads may vary considerably depending on the transaction value and market sentiment.

    Comparing portfolio transaction costs for a range of funds may give a false impression of the relative cost of investing in them for the following reasons:

    • Transaction costs do not necessarily reduce returns. The net impact of dealing is the combination of the effectiveness of the manager’s investment decisions in improving returns and the associated cost of investment.
    • Historic transactions costs are not an effective indicator of the future impact on performance.
    • Transaction costs for buying and selling investments due to other investors joining or leaving the fund may be recovered from those investors. For further information please refer to the Pricing policies note above.
    • Transaction costs vary from country to country.
    • Transaction costs vary depending on the types of investment in which a fund invests.
    • As the manager’s investment decisions are not predictable, transaction costs are also not predictable.

    Please see the below table for average portfolio transactions costs over the last three financial years for Franklin Templeton Funds OEIC:

    Fund NamePortfolio Transaction CostsStamp Duty Reserve Tax
    Commissions TaxesTaxes
    Franklin Diversified Growth Fund 0.21% 0.01% 0.00%
    Franklin Diversified Income Fund 0.16% 0.00% 0.00%
    Franklin European Opportunities Fund 0.13% 0.03% 0.00%
    Franklin Mutual Shares Fund 0.02% 0.00% 0.00%
    Franklin Strategic Bond Fund 0.00% 0.00% 0.00%
    Franklin UK Corporate Bond Fund 0.00% 0.00% 0.00%
    Franklin UK Equity Income Fund 0.12% 0.25% 0.00%
    Franklin UK Gilt Fund 0.00% 0.00% 0.00%
    Franklin UK Managers’ Focus Fund 0.19% 0.33% 0.00%
    Franklin UK Mid Cap Fund 0.14% 0.15% 0.00%
    Franklin UK Opportunities Fund 0.11% 0.07% 0.00%
    Franklin UK Rising Dividends Fund 0.17% 0.29% 0.00%
    Franklin UK Smaller Companies Fund 0.09% 0.10% 0.00%
    Franklin US Opportunities Fund 0.04% 0.00% 0.00%
    Templeton Global Emerging Markets Fund 0.16% 0.03% 0.00%
    Templeton Global Total Return Bond Fund 0.00% 0.00% 0.00%
    Templeton Growth Fund 0.05% 0.02% 0.00%

    Average Portfolio Costs and SDRT are for the period 1 April 2014 to 31 March 2017

  • For further information on these disclosures and a guide to charges and costs, please visit the IA’s website.