Rising Rates? Been There, Done That.

The current low interest rate environment may have your clients concerned about the specter of rising interest rates and how their portfolios might be impacted.

With a flexible and dynamic investment approach, Franklin Income Fund has a track record of strong historical performance, whether interest rates were rising or falling.

FRANKLIN INCOME FUND–ADVISOR CLASS1

A Record of Strong Long-Term Returns in Rising and Declining Interest Rate Environments

August 31, 1948–September 30, 2017

Treasuries, if held to maturity, offer a fixed rate of return and fixed principal value; their interest payments and principal are guaranteed.

Performance data represents past performance, which does not guarantee future results. Current performance may differ from the figures shown. A fund’s investment return and principal value will change with market conditions, and investors may have a gain or a loss when they sell their shares. Please view Franklin Income Fund’s most recent month-end performance and yield information.

Advisor Class shares are only offered to certain eligible investors as stated in the prospectus. They are offered without sales charges or Rule 12b-1 fees. The fund offers multiple share classes, which are subject to different fees and expenses that will affect their performance. Please see the prospectus for details.

Franklin Income Fund seeks to maximize income, while maintaining prospects for capital appreciation over the long term by:

Seeking undervalued securities unconstrained by asset classes or market cycles

Pursuing income across the capital structure of a company using stocks, convertible securities and bonds

Adjusting fund allocations without set proportions based on current market opportunities

”With over 69 years of uninterrupted dividends, Franklin Income Fund provides investors seeking income a time-tested strategy that has delivered strong results.”3

Edward D. Perks

Portfolio Manager, Franklin Income Fund

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Average Annual Total Returns (for the Periods Ended December 31, 2017)

1-year3-year5-year10-yearSince Inception
(8/31/48)
Advisor Class1 8.62% 5.32% 6.80% 5.71% 10.27%
Class A4          
Without Sales Charge 8.41% 5.14% 6.69% 5.52% 10.21%
With 4.25% Initial Sales Charge 3.91% 3.58% 5.76% 5.08% 10.14%
 
Expense Ratio
Advisor Class 0.46%
Class A 0.61%
30-Day Standardized Yield
As of DECEMBER 31, 20175
Advisor Class 4.05%
Class A 3.73%

Performance data represents past performance, which does not guarantee future results. Current performance may differ from the figures shown. A fund’s investment return and principal value will change with market conditions, and investors may have a gain or a loss when they sell their shares. Please view Franklin Income Fund’s most recent month-end performance and yield information.

Advisor Class shares are only offered to certain eligible investors as stated in the prospectus. They are offered without sales charges or Rule 12b-1 fees. The fund offers multiple share classes, which are subject to different fees and expenses that will affect their performance. Please see the prospectus for details.

Footnotes

  1. Effective 12/31/96, 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.
  2. Source: Federal Reserve. Important data provider notices and terms available at www.franklintempletondatasources.com.
  3. Dividends will vary depending on the fund’s income, and past distributions are not indicative of future trends.
  4. Effective 5/1/94, the fund implemented a Rule 12b-1 plan, which affects subsequent performance.
  5. The fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the fund’s actual income distribution rate, which reflects the fund’s past dividends paid to shareholders.

What Are the Risks?

All investments involve risks, including possible loss of principal. The fund's share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund's share price may decline. Changes in the financial strength of a bond issuer or in a bond's credit rating may affect its value. The fund's portfolio includes a substantial portion of higher-yielding, lower-rated corporate bonds because of the relatively higher yields they offer. Floating-rate loans are lower-rated, higher-yielding instruments, which are subject to increased risk of default and can potentially result in loss of principal. These securities carry a greater degree of credit risk relative to investment-grade securities. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. These and other risk considerations are discussed in the fund's prospectus.

Important Legal Information

Your clients should carefully consider a fund’s investment goals, risks, charges and expenses before investing. Download a prospectus, which contains this and other information. Your clients should read the prospectus carefully before they invest or send money.

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Franklin Templeton Distributors, Inc.