Equity

FTDZX Franklin Biotechnology Discovery Fund

Participate in trends moving markets. Invest in innovative sectors—technology, medicine, global communications—we believe are poised for long-term growth.
Diversification. By adding investments from different sectors to your portfolio, you may take advantage of expanding and contracting economic cycles.
Experienced management. Same lead portfolio manager since the fund's inception in 1997.

Overview

See the risks and other important information.

Fund Facts

Fund description

The fund seeks capital appreciation by investing at least 80% of its net assets in securities of biotechnology companies and discovery research firms including those involved in fields such as genomics, genetic engineering, and gene therapy, as well as health care, pharmaceuticals and agriculture.

Benchmark: NASDAQ Biotechnology Index
Additional Benchmark: S&P 500 Index
Fund Inception Date: 09/15/1997
Dividend Frequency, if any: Annually
Portfolio Turnover: 22%

Sales Charges, Expenses & Fees

As of 09/01/2025

Gross Expense Ratio⁴: 0.78%
Net Expense Ratio^4,5: 0.77%
Maximum Initial Charge: —
CDSC: N/A
12b-1 Fee: —

Identifiers

Ticker: FTDZX
Fund Number: 042
CUSIP Code: 354713398

Average Annual Total Returns As of 12/31/2025

View performance section for additional info As of 12/31/2025

Advisor Class

With Sales Charge (POP)

Without Sales Charge (NAV)

52.68%1 Year
23.63%3 Years
6.42%5 Years
7.22%10 Years
11.01%Since Inception
09/15/1997

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.

Top Sectors

View portfolio section for additional info

As of 12/31/2025 % of Total (Updated Monthly)

Top Sectors
Biotechnology76.97%
Pharmaceuticals17.66%
Health Care Services2.48%
Life Sciences Tools & Services0.99%
Managed Health Care0.25%

Additional Fund Info

Share Class Inception Date: 09/01/2009
Investment Style: Sector
Lipper Classification: Health/Biotechnology Funds
Morningstar Category⁶: Health

Manager and Commentary

About the Team

Franklin Equity

Franklin Equity understands innovation from every angle—our decades of experience investing in complex change fuels a differentiated perspective on how public and private companies accelerate growth and unlock value. Leveraging fundamental depth and quantitative precision, we identify catalysts for transformation that reshape companies and industries. Our expertise, spanning from growth to value, brings together diverse perspectives that help us spot opportunities ahead of the market.

Commentary Highlights

12/31/2025

Markets: During the fourth quarter of 2025 (4Q25), most equity sectors advanced globally (per MSCI index data in US-dollar terms), led by health care amid rallies in the biotechnology and pharmaceutical industries. With technology- and artificial intelligence-related stocks pulling back in November and December, many investors rotated into non-cyclical sectors. Health care—given its relatively stable demand and earnings durability— was a key beneficiary. Declining interest rates also appeared to boost investor confidence in biotech and pharma. Lower interest rates make it cheaper for such companies to fund expensive long-cycle research and drug development, clinical trials or merger-and-acquisition (M&A) deals. Investor optimism was also evident around incoming clinical data, ongoing strides in innovation (i.e., cell/gene therapies and specialty drugs addressing rare diseases) and improving M&A activity, especially in biotech, which appeared to be rising from a multiyear slump as regulatory uncertainty and policy headwinds showed signs of diminishing. Drug-pricing and tariff overhangs were still there, but many investors seemed to believe that worst-case outcomes might be avoided heading into 2026. Various industry analysts pointed to tailwinds for biotech, including strong scientific pipelines, an increase in promising clinical-trial results and rising investor sentiment.
Contributors: Effective stock selection in the pharmaceuticals and biotechnology industries, overweighting in health care services, and a significant underweighting in lagging life sciences tools and services industry stocks.
Detractors: Individual outliers to the downside in biotech and pharma, as well as the fund’s 3.1% average cash position.
Outlook: Heading into January 2026, we were seeing progress across biotech and the broader health care sector, with advances spanning improved treatments in obesity, oncology, cardiovascular disease, neurology and psychiatry, as well as platform developments in T-cell engagers, antibody-drug conjugates, radioligand antibodies, RNA-based gene silencing, and cell and gene therapies.

For complete information, please see the full commentary:

Franklin Equity

Managed Fund Since 1997

Managed Fund Since 2020

Latest Insights

February 5, 2026

New world order: Security spending enters a super cycle

January 27, 2026

Innovation Insights Quarterly: Q1 2026

December 18, 2025

Global equity outlook 2026: Renewed tailwinds for quality growth

December 17, 2025

The Goldilocks risk: What if things go right in 2026?

Performance

Average Annual Total Returns

⁸

As of 12/31/2025

Month End

Quarter End

As of

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

Month End

As of 12/31/2025

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

Month End

As of 12/31/2025

NASDAQ Biotechnology Index (%)

Month End

As of 12/31/2025

S&P 500 Index (%)

Month End

As of 12/31/2025

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 01/31/2026

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

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

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

Rating Category: Health

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 01/31/2026

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 of12/31/2025 (Updated Monthly)

Total Net Assets: $1.02 Billion

Positions

As of 12/31/2025 (Updated Monthly)

Number of Issuers

Fund: 80

Portfolio Statistics

As of 12/31/2025 (Updated Monthly)

Price to Earnings (12-Month Forward)

Fund: 19.81x
Benchmark: 17.90x

Weighted Average Market Capitalization (USD)

Fund: $58.59 Billion
Benchmark: $62.57 Billion

Price to Cash Flow

Fund: 12.39x
Benchmark: 19.95x

Price to Book

Fund: 5.61x
Benchmark: 5.05x

Asset Allocation

As of 12/31/2025 % of Total (Updated Monthly)

Asset Allocation
Holdings	Fund
Equity	98.35%
Cash & Cash Equivalents	1.65%

Holdings
As of 12/31/2025 (Updated Monthly)

Gilead Sciences Inc COM USD0.001

Jazz Pharmaceuticals PLC ORD USD.0001

Regeneron Pharmaceuticals Inc COM USD.001

Amgen Inc COM USD.0001

Vertex Pharmaceuticals Inc COM USD.01

Argenx SE SPONSORED ADR

Praxis Precision Medicines Inc COM USD 0.0001

Insmed Inc COM USD.01

Terns Pharmaceuticals Inc COM USD 0.0001

Alnylam Pharmaceuticals Inc COM USD.01

Portfolio holdings are based on the total portfolio and are subject to change at any time. Holdings are provided for informational purposes only and should not be construed as a recommendation to purchase or sell any security.

Distributions & Tax

Distribution Frequency
Ex-Dividend Fund: This type of fund declares periodic dividends, which are paid to shareholders who own the fund as of a certain date - known as the "record date". After the record date, the fund is said to be trading "ex-dividend"(literally, without the dividend). An investor who buys shares during the interval between the record date and the payment of the dividend does not receive the dividend. A fund that's in the ex-dividend period is marked with an "x" in newspaper listings.

Daily Accrual Fund: This type of fund typically declares income dividends each day that its net asset value is calculated. These dividends remain in the fund until the designated reinvestment or payment date and are distributed to the shareholders, generally once a month, as additional shares or cash, respectively.: AnnuallyThis fund is an ex-Dividend fund
Capital Gain Distributions: December

Proposed 2026 distribution dates for Franklin, Templeton and Mutual Series funds (excluding ETFs).

Final composition of the current year’s distribution—income, capital gains and/or return of capital—are based on US tax rules and will be determined by February of the following year. For tax characterization of a distribution, such as return of capital and tax-exempt income, click on the “Tax Information” tab above.

Distributions Per Share
Distributions with future dates are estimates and those figures are not final

12/19/2025

Annually, a fund must distribute all realized capital gains net of realized losses, so the fund will not be subject to an entity level income tax. A fund’s capital gain distribution in a particular year may be a result of the disposition of holdings that appreciated in value during prior years. Thus, while the fund may gain or lose value over the course of a year, a capital gain distribution paid by the fund may not be indicative of current performance of the fund.

The distributable amount of net capital gains are paid on a per-share basis to all investors who hold shares of the fund on the record date of the distribution and are recognized by the shareholder for tax purposes as of the ex-date of the distribution, regardless of when the gains or losses arose in the fund. Net gains on holdings held long term by the fund would be distributed to shareholders as a long-term capital gain distribution no matter how long the shareholder has owned shares in the fund.

Refer to the fund’s annual report or statement of additional information for specific information regarding distributions.

Pricing

Pricing History

As of 02/06/2026 (Updated Daily)

Time Period

From

From Date

To Date

Daily Fund Prices

As of 02/06/2026

Share Prices

As of 02/06/2026

NAV ¹(Net Asset Value): $177.88
NAV Change ¹: $5.45
NAV Change (%) ¹: 3.16%
POP ⁷(Public Offering Price): $177.88

52-Week Range

Highest NAV As of 11/28/2025: $196.91
Lowest NAV As of 04/08/2025: $104.73

Documents

Fund Literature

Fund Literature
Checkbox	Name	Download	Add to Cart
Checkbox	Factsheet - Franklin Biotechnology Discovery Fund	Download Document
Checkbox	Product Commentary - Franklin Biotechnology Discovery Fund	Download Document

Regulatory Documents

Regulatory Documents
Checkbox	Name	Download
Checkbox	Annual Report - Franklin Biotechnology Discovery Fund Advisor Class	Download Document
Checkbox	Annual Financial Statements and Other Information - Franklin Strategic Series	Download Document
Checkbox	Semi-Annual Report - Franklin Biotechnology Discovery Fund - Advisor Class	Download Document
Checkbox	Semiannual Financial Statements And Other Information - Franklin Strategic Series	Download Document
Checkbox	Prospectus - Franklin Strategic Series 2	Download Document
Checkbox	Summary Prospectus - Franklin Biotechnology Discovery Fund	Download Document
Checkbox	Statement of Additional Information - Franklin Strategic Series 2Mailed hardcopies unavailable.	Download Document
Checkbox	Fiscal Q1 Holdings - Franklin Strategic SeriesMailed hardcopies unavailable.	Download Document
Checkbox	Fiscal Q3 Holdings - Franklin Strategic SeriesMailed hardcopies unavailable.	Download Document

View Proxy Voting Records and Proxy Voting Policies

Risks

All investments involve risks, including possible loss of principal. The portfolio is non-diversified and may invest in a relatively small number of issuers, which may negatively impact the fund's performance and result in greater fluctuation in the value of the fund's shares. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. 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. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. These and other risks are discussed in the fund’s prospectus.

Important Information

Click here for funds sales charge and breakpoint information.

Total Returns include change in share price, assume reinvestment of all distributions, and reflect the deduction of fund expenses and applicable fees. Total returns, distribution rate, and yields reflect any applicable expense reductions and fee waivers; without these reductions, the results would have been lower.

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.

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.

The NASDAQ Biotechnology Index is a modified capitalization-weighted index designed to measure performance of all NASDAQ stocks in the biotechnology sector.
Source: Nasdaq OMX.

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.
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.
©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.
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.
Effective 9/1/09, the fund began offering Advisor Class shares. For periods prior to the fund's Advisor Class inception date, a restated figure is used based on the fund's oldest share class, Class A performance, excluding the effect of Class A's maximum initial sales charge but reflecting the effect of the Class A Rule 12b-1 fees; and for periods after the fund's Advisor Class inception date, actual Advisor Class performance is used, reflecting all charges and fees applicable to that class.
Capitalization Rate is calculated without the deduction of fees and expenses.

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FTDZX Franklin Biotechnology Discovery Fund

Popular Documents

Overview

Fund description

Sales Charges, Expenses & Fees

Identifiers

Advisor Class

Top Sectors

Additional Fund Info

Manager and Commentary

About the Team

Latest Insights

Performance

Average Annual Total Returns

Ratings 3

Portfolio

Asset Allocation

Distributions & Tax

Pricing

Chart

Daily Fund Prices

Documents

Risks

Important Information

Footnotes

Ratings ³