Alternatives

FABZX K2 Alternative Strategies Fund

Diversified. Invests across multiple hedge strategies, including long short equity, event drive, relative value, and global macro.
Flexible. Allocates tactically to enhance diversification as market opportunities evolve.
Curated. Uses a rigorous due diligence process for reviewing and selecting underlying managers.

Overview

See the risks and other important information.

Fund Facts

Fund description

The fund's principal investment goal is capital appreciation with lower volatility relative to the broad equity markets. The fund seeks to achieve its investment goal by allocating its assets across multiple alternative strategies, primarily including Long Short Equity, Relative Value, Event Driven and Global Macro.

Benchmark: HFRX Global Hedge Fund Index
Additional Benchmark ⁴: ICE BofA US 3-Month Treasury Bill Index
Fund Inception Date: 10/11/2013
Dividend Frequency, if any: Annually
VAR As of 09/30/2025 (Updated Monthly): -1.30%

Sales Charges, Expenses & Fees

As of 10/01/2025

Gross Expense Ratio⁵: 2.47%
Net Expense Ratio^5,6: 2.18%
Maximum Initial Charge: N/A
CDSC: N/A
12b-1 Fee: N/A
Management Charge: 1.70%
Dividend Expense and Borrowing Fees for Securities Sold Short⁷: 0.45%
Additional Expenses⁸: 0.32%

Identifiers

Ticker: FABZX
Fund Number: 010
CUSIP Code: 35241W500

Average Annual Total Returns As of 09/30/2025

View performance section for additional info As of 09/30/2025

Advisor Class

With Sales Charge (POP)

Without Sales Charge (NAV)

9.11%1 Year
7.48%3 Years
4.17%5 Years
3.65%10 Years
3.82%Since Inception
10/11/2013

Performance data quoted represents past performance, which does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the figures shown.

Asset Exposure

View portfolio section for additional info

As of 09/30/2025 % of Net Exposure (Updated Monthly)

Fixed Income37.33%

Equity18.70%

Commodities0.04%

Currency-3.66%

Additional Fund Info

Share Class Inception Date: 10/11/2013
Investment Style: Multi Strategy
Lipper Classification: Alternative Multi-Strategy Funds
Morningstar Category: Multistrategy

Manager and Commentary

About the Team

Franklin Templeton Investment Solutions

Franklin Templeton Investment Solutions (FTIS) is a leader in multi-asset, quantitative, and hedged solutions, leveraging a global network of investment teams to offer innovative and diversified strategies. With a focus on long-term investing, we combine deep research, active management, and data-driven insights to create solutions which seek to meet the evolving needs of investors worldwide.

Commentary Highlights

June 30, 2025

Markets: Global stocks advanced during the quarter, despite an April pullback after US President Donald Trump’s announcement of “reciprocal” tariffs proved more sweeping and severe than many had expected. leading to significant financial market volatility. However, global trade tensions eased during the rest of the quarter as the United States delayed planned tariff hikes, reducing investor fears of a global recession. Credit markets broadly witnessed positive absolute returns over the period, as spreads tightened. Higher-rated credits generally underperformed their lower-rated counterparts. The global commodities market reflected a complex interplay of supply-demand dynamics, war and geopolitical shifts, and macroeconomic factors, and the Refinitiv CoreCommodity CRB Index (CRB) declined over the period.
Contributors: The Long Short Equity and Global Macro strategy relative drove the portfolio’s quarterly advance, led by Long Short Equity subadvisors Electron and ActusRay, as well as Global Macro subadvisors BlueBay and CFM. Overall, all four primary strategies and eight of 10 underlying managers contributed, along with the Strategic Overlay. At the asset-class level, long fixed income positioning made the largest contribution, followed by equity positioning, which was long overall. Cash positioning, credit and private equity also contributed, though more modestly.
Detractors: Subadvisors Graham (Global Macro) and Athena (Relative Value) posted negative returns and were the only two subadvisors to weighed on performance during the period. For Graham, commodity positioning drove detraction, largely due to crude oil longs, with additional weakness in currency positioning. Athena’s equity positioning, which was long overall, was the key driver, with the largest detraction coming from short positioning in the IT sector.
Outlook: Amid market uncertainty, geopolitical tensions, and U.S. President Donald Trump’s transactional orientation and propensity to change his goals, we believe the outlook for hedge fund strategies remains constructive. Heightened dispersion and constrained liquidity are creating compelling opportunities for dynamic, market-neutral, and nimble investment approaches.

For complete information, please see the full commentary

Franklin Templeton Investment Solutions

Managed Fund Since 2024

Managed Fund Since 2014

Latest Insights

October 13, 2025

Hedge Fund Strategy Outlook: Fourth quarter 2025

October 10, 2025

Allocation Views: Responsibly bullish

July 17, 2025

Hedge Fund Strategy Outlook: Third quarter 2025

July 10, 2025

The “Big Beautiful Bill:” Beauty is in the eye of the bondholder

Performance

Average Annual Total Returns

As of 09/30/2025

Month End

Quarter End

As of

Advisor Class - With Sales Charge (POP) (%)

Month End

As of 09/30/2025

Advisor Class - Without Sales Charge (NAV) (%)

Month End

As of 09/30/2025

HFRX Global Hedge Fund Index (%)

Month End

As of 09/30/2025

ICE BofA US 3-Month Treasury Bill Index (%) ⁴

Month End

As of 09/30/2025

Performance data quoted represents past performance, which does not guarantee future results. Current performance may be lower or higher than the figures shown. Principal value and investment returns will fluctuate, and investors' shares, when redeemed, may be worth more or less than the original cost. Performance would have been lower if fees had not been waived in various periods. Total returns assume the reinvestment of all distributions and the deduction of all Fund expenses. Returns with sales charge reflect a deduction of the stated maximum sales charge. Returns without sales charge would have been lower had sales charges been reflected. An investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. Returns for periods of less than one year are not annualized.

See the risks and other important information.

Overall Morningstar Rating: Overall Morningstar Rating: 3 out of 5 stars
As of 09/30/2025

3 Years: 3 Years: 3 out of 5 stars
104 Funds in category

5 Years: 5 Years: 3 out of 5 stars
103 Funds in category

10 Years: 10 Years: 3 out of 5 stars
66 Funds in category

Rating Category: Multistrategy

The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Morningstar Style Box

As of 09/30/2025

Current Historical
			Large
			Medium
			Small
Value	Blend	Growth
Style

Size

Source: Morningstar®. The style box reveals a fund's investment style. For equity funds, the vertical axis shows the market capitalization of the long stocks owned, and the horizontal axis shows the investment style (value, blend, or growth). For fixed income funds, the vertical axis shows the credit quality based on credit ratings and the horizontal axis shows interest-rate sensitivity as measured by effective duration. Placement is determined by fund portfolio holding figures most recently entered into Morningstar's database and corresponding market conditions. Shaded areas show the past 3 years of quarterly data. Past performance does not guarantee future results.

©2025 Morningstar, Inc. 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.

Portfolio

Assets

As of09/30/2025 (Updated Monthly)

Total Net Assets: $531.48 Million

Portfolio Statistics

As of 09/30/2025 (Updated Monthly)

Value at Risk

Fund: -1.30%

Security Exposure ^10,11

As of 09/30/2025 (Updated Monthly)

Security Exposure
Sector	Gross Exposure	Net Exposure
Single Security Derivatives	151.96%	-3.15%
Direct Securities	76.74%	36.32%
Index/Multi-Security Derivatives	28.65%	19.24%

Distributions & Tax

Federal ID Number 46-2936899

For information on tax years prior to 2008, please contact us

These amounts represent distributions paid by the fund, foreign taxes passed through (if any), and other distribution characteristics for the calendar year selected. These amounts are reported to shareholders on Form 1099-DIV.

Distributions per Share ($)

Year

Tax Information
Record Date	Ordinary Dividends Dividends paid by a fund that are derived from interest, dividends, net short-term capital gains and other types of ordinary income earned by the fund. For a fund that elects to pass through its foreign taxes paid (a non-cash item), a shareholder's allotted share of foreign taxes has been added to the “Ordinary Dividends” cash distributions received by the shareholder. If the fund passed through foreign taxes paid and later is refunded any portion of those taxes by a foreign tax authority, any interest paid to the fund on that refund is also required to be included in “Ordinary Dividends”.	Qualified Dividends The portion of a fund’s “Ordinary Dividends” that may be eligible for a reduced capital gain tax rate. To be eligible for the lower tax rates, certain holding periods apply and shareholders should consult their tax advisor to determine the amount eligible for the reduced rate. This amount represents both cash distributions and non-cash amounts, such as foreign taxes paid, that have been allocated to shareholders.	Capital Gain Distributions	Unrecaptured Section 1250 Gain	Non-Taxable Return Of Capital	Section 199a Dividends The portion of a fund’s “Ordinary Dividends” generated by a real estate investment trust or earned by a fund from its investments in real estate investment trusts, subject to limitations. Individual (non-corporate) shareholders may be entitled to a special deduction from gross income for “Section 199A Dividends” received from a fund. To qualify for this deduction certain holding periods apply and shareholders should consult their tax advisor.	Foreign Tax Paid	Exempt Interest Dividends	Interest on Tax Reclaim Refunds
Dec 27	1.2949	0.026027	—	—	—	—	—	—	—
	1.2949	0.026027	—	—	—	—	—	—	—

Dec 27

Supplemental Tax Information

Foreign Source Income: —
Foreign Source Qualified Dividends: —
Direct U.S. Government Obligations The portion of “Ordinary Dividends” attributable to earnings from US Treasury and certain other government securities may be categorized as a fund containing US government obligations. This income may be exempt from state personal income taxes. The percentage for direct US government obligation interests available for tax-exempt treatment may be limited in states that require the fund to meet certain minimum thresholds. Shareholders should consult their tax advisor to determine the availability of exemptions in their state.: 0.40%
Specified Private Activity Bond Interest: —
Dividends Received Deduction: 2.37%
Section 163(j): —
Indiana Resident Taxable Income: —
Utah Resident Taxable Income The portion of “Exempt-Interest Dividends” subject to Utah income tax. Subject to certain exceptions, the state of Utah provides that income earned from non-federal government entities outside of Utah (non-Utah municipal bonds) is taxable to Utah resident shareholders. Income earned from states that do not tax Utah obligations are also exempt. Shareholders should consult their tax advisor about applicability.: —

Franklin Templeton and its specialized investment managers and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Each investor’s tax situation is different, and is based on an individual’s tax bracket, type of account used for investment and other factors. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

Pricing

Pricing History

As of 10/31/2025 (Updated Daily)

Time Period

From

From Date

To Date

Daily Fund Prices

As of 10/31/2025

Share Prices

As of 10/31/2025

NAV ¹(Net Asset Value): $11.87
NAV Change ¹: $0.01
NAV Change (%) ¹: 0.08%
POP ⁹(Public Offering Price): $11.87

52-Week Range

Highest NAV As of 12/26/2024: $12.28
Lowest NAV As of 04/08/2025: $10.75

Documents

Fund Literature

Fund Literature
Checkbox	Name	Download	Add to Cart
Checkbox	Factsheet - K2 Alternative Strategies Fund	Download Document
Checkbox	Product Commentary - K2 Alternative Strategies Fund	Download Document

Regulatory Documents

Regulatory Documents
Checkbox	Name	Download
Checkbox	Annual Report - K2 Alternative Strategies Fund - Advisor Class	Download Document
Checkbox	Annual Financial Statements and Other Information - K2 Alternative Strategies Fund	Download Document
Checkbox	Semi-Annual Report - K2 Alternative Strategies Fund - Advisor Class	Download Document
Checkbox	Semi-Annual Financial Statements and Other Information - K2 Alternative Strategies Fund	Download Document
Checkbox	Prospectus - K2 Alternative Strategies Fund	Download Document
Checkbox	Summary Prospectus - K2 Alternative Strategies Fund	Download Document
Checkbox	Statement of Additional Information - K2 Alternative Strategies FundMailed hardcopies unavailable.	Download Document
Checkbox	Fiscal Q1 Holdings - K2 FundMailed hardcopies unavailable.	Download Document
Checkbox	Fiscal Q3 Holdings - K2 FundMailed hardcopies unavailable.	Download Document

View Proxy Voting Records and Proxy Voting Policies

Risks

All investments involve risks, including possible loss of principal. The fund is actively managed and could experience losses if the investment manager's and subadvisors' judgment about particular investments made for the fund's portfolio prove to be incorrect. The allocation of assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Some subadvisors may have little or no experience managing the assets of a registered investment company. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Currency management strategies could result in losses to the fund if currencies do not perform as expected. Short selling is a speculative strategy. Unlike the possible loss on a security that is purchased, there is no limit on the amount of loss on an appreciating security that is sold short. Investments in companies engaged in mergers, reorganizations or liquidations also involve special risks as pending deals may not be completed on time or on favorable terms. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. These and other risks are discussed in the fund’s prospectus.

Important Information

Click here for funds sales charge and breakpoint information.

Most funds offer multiple share classes. Share classes are subject to different fees and expenses, which will affect their performance.

Certain share classes are only offered to eligible investors as stated in the prospectus. Different minimums may apply to clients of certain service agents. All classes of shares are not available through all distribution channels. See the Fund's prospectus for additional information.

Franklin Distributors, LLC. Member FINRA, SIPC. All entities mentioned are Franklin Templeton affiliated companies. Investment Products: NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE.
Reports and other information about the funds are available on the EDGAR Database on the SEC's Internet site at www.sec.gov.

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Important data provider notices and terms available at www.franklintempletondatasources.com.

Performance data quoted represents past performance, which does not guarantee future results.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.

Monthly reporting HFRX Index constituents are comprised of private hedge funds. The HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible hedge fund strategies, including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage. The strategies are asset weighted based on the distribution of assets in the hedge fund industry.
Source: Hedge Fund Research, Inc. The HFR indices are being used under license from Hedge Fund Research, Inc., which does not endorse or approve of any of the contents of this report. Unlike most asset class indexes, the HFR Index reflect fees and expenses.

The ICE BofA 3-Month U.S. Treasury Bill Index is an unmanaged index that comprises a single U.S. Treasury issue with approximately three months to final maturity, purchased at the beginning of each month and held for one full month.
Source: The index data referenced herein is the property of Intercontinental Exchange ("ICE") and/or its licensors and has been licensed for use by Franklin Templeton. ICE and its licensors accept no liability in connection with this use.

Investors should carefully consider a fund's investment goals, risks, sales charges and expenses before investing. The prospectus contains this and other information. Please read the prospectus carefully before investing or sending money.

Footnotes

Net Asset Value - the amount per share you would receive if you sold shares that day. NAV Change indicates a change in the Net Asset Value from the previous business day.
Figures are aggregate total return figures, have not been annualized and represent the change in value of an investment over the period indicated.
The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products with at least a three-year history, and subject to change monthly. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total return, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total return. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads. Morningstar Rating is for the specified share class(es) only; other classes may have different performance characteristics.
©2025 Morningstar, Inc. 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.
The index data referenced herein is the property of Intercontinental Exchange ("ICE") and/or its licensors and has been licensed for use by Franklin Templeton. ICE and its licensors accept no liability in connection with this use. See www.franklintempletondatasources.com for a full copy of the Disclaimer.
Gross Expense Ratio reflects the total annual operating expenses for the share class shown, prior to the deduction of any waiver or reimbursement. Actual expenses may be higher and may impact portfolio returns. Net Expense Ratio reflects total expenses after any fee waivers, implemented expense caps or reimbursements. If a fund has contractual fee waivers, expense caps and/or reimbursements, the expiration date can be found by clicking on the information button next to the net expense ratio. Additional amounts may be voluntarily waived and/or reimbursed and may be modified or discontinued at any time without notice. Expense ratios are as of the most recent prospectus or annual report.
Net Expense Ratio represents the expense ratio applicable to investors.
Costs associated with the fund's short positions. The fund's manager and sub-advisors use short positions in an attempt to either protect against losses or provide an additional source of returns versus long-only strategies. There is no guarantee that these positions will perform as the fund's manager or sub-advisors intended, and losses may occur.
Includes operating and other expenses.
Public Offering Price – the purchase price for each share of the fund on a given day. It includes the maximum initial sales charge, if any.
Net Exposure: Net exposure is the sum of the total value of all exposures, directly or through derivatives, as a percentage of total assets. The percentage value of the long positions less the percentage value of the short positions.
Gross Exposure: Gross exposure is the sum of the absolute value of all exposures, directly or through derivatives, as a percentage of total assets. The sum of the percentage of long positions and short (in absolute terms) positions.
Source: Hedgemark. Actual Allocation is a percentage of invested capital into fund managers (sub-advisors or co-managers) as of the end of the period. Percentage may not total 100% due to rounding. Target Allocations reflect end of period target allocations. The Fund may shift allocations among strategies at any time. Further, K2 may determine in its sole discretion not to allocate to one or more of the strategies and or to add new strategies. Accordingly the above target allocations are presented for illustrative purposes only, and should not be viewed as predictive of the ongoing composition of the fund's portfolio (and its managers), which may change at any time.
Long Exposure: Sum of the long exposures, directly or through derivatives, as a percentage of the total assets.
Source: Hedgemark. The Top Ten Long and Short Exposures represent the ten largest long and short equity issuer exposures of Franklin K2 Alternative Strategies Fund as of the date indicated. Issuer exposures include actual security holdings and single security exposures obtained through the use of derivatives. Direct security holdings and derivatives exposures are combined for calculation purposes. The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the top 10 holdings list. The information provided is not a recommendation to purchase, sell, or hold any particular security. Information is historical and may not reflect current or future portfolio characteristics.
Short Exposure: Sum of the short exposures, directly or through derivatives, as a percentage of total assets.

FABZX K2 Alternative Strategies Fund

Popular Documents

Upcoming fund name change

Overview

Fund Facts

Fund description

Sales Charges, Expenses & Fees

Identifiers

Average Annual Total Returns As of 09/30/2025

Advisor Class

Asset Exposure

Additional Fund Info

Manager and Commentary

About the Team

Commentary Highlights

Latest Insights

Performance

Average Annual Total Returns

Ratings ³

Portfolio

Assets

Portfolio Statistics

Security Exposure ^10,11

Distributions & Tax

Federal ID Number 46-2936899

Distributions per Share ($)

Supplemental Tax Information

Pricing

Pricing History

November 2025

November 2025

Daily Fund Prices

Share Prices

52-Week Range

Documents

Risks

Important Information

Footnotes

Sunday	Monday	Tuesday	Wednesday	Thursday	Friday	Saturday

Sunday	Monday	Tuesday	Wednesday	Thursday	Friday	Saturday

Individual Investor

Financial Professional

Institutional Investor

FABZX K2 Alternative Strategies Fund

Popular Documents

Upcoming fund name change

Overview

Fund description

Sales Charges, Expenses & Fees

Identifiers

Advisor Class

Asset Exposure

Additional Fund Info

Manager and Commentary

About the Team

Latest Insights

Performance

Average Annual Total Returns

Ratings 3

Portfolio

Security Exposure 10,11

Distributions & Tax

Federal ID Number 46-2936899

Pricing

Chart

Daily Fund Prices

Documents

Risks

Important Information

Footnotes

Ratings ³

Security Exposure ^10,11