Templeton Funds N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-02781

Templeton Funds

(Exact name of registrant as specified in charter)

300 S.E. 2^nd Street, Fort Lauderdale, FL 33301-1923

(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA  94403-1906

(Name and address of agent for service)

Registrant's telephone number, including area code: 954 527-7500

Date of fiscal year end: 8/31

Date of reporting period: 2/28/22

Item 1. Reports to Stockholders.

a.)

The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)

b.)

A copy of the notice transmitted to shareholders in reliance on Rule 30e-3 under the 1940 Act that contains disclosures specified by paragraph (c)(3) of that rule is included in the Annual Report.

Not Applicable

.

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Templeton

Foreign

Fund

A

Series

of

Templeton

Funds

February

28,

2022

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

February

28,

2022,

the

global

economic

recovery

was

hampered

by

renewed

outbreaks

of

COVID-19,

supply-chain

disruptions

and

geopolitical

tensions

and

conflict.

Rising

inflation

across

multiple

countries

caused

many

central

banks,

including

the

U.S.

Federal

Reserve,

to

adopt

less

accommodative

monetary

stances,

putting

pressure

on

global

equity

markets.

New

Chinese

government

regulations

on

some

businesses

further

dampened

investor

sentiment

in

Asian

and

emerging

market

stocks.

Near

period-end,

Russia’s

invasion

of

Ukraine

increased

investor

uncertainty,

as

international

sanctions

on

Russia

constrained

companies

that

do

business

with

Russia

and

threatened

to

disrupt

global

economic

activity

and

commodity

markets.

In

this

environment,

stocks

in

global

developed

and

emerging

markets

excluding

the

U.S.,

as

measured

by

the

MSCI

All

Country

World

Index

ex

USA

Index-NR

(net

of

tax

withholding

when

dividends

are

paid),

posted

a

-6.95%

total

return

for

the

period.

1

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

Historically,

patient

investors

have

achieved

rewarding

results

by

evaluating

their

goals,

diversifying

their

assets

globally

and

maintaining

a

disciplined

investment

program,

all

hallmarks

of

the

Templeton

investment

philosophy.

We

continue

to

recommend

investors

consult

financial

professionals

and

review

their

portfolios

to

design

a

long-term

strategy

and

portfolio

allocation

that

meet

their

individual

needs,

goals

and

risk

tolerance.

Templeton

Foreign

Fund’s

semiannual

report

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

Please

remember

all

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin

Templeton,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

investment

needs

in

the

years

ahead.

Sincerely,

Alan

Bartlett

Chief

Investment

Officer

Templeton

Global

Equity

Group

This

letter

reflects

our

analysis

and

opinions

as

of

February

28,

2022,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Semiannual

Report

2

Contents

Semiannual

Report

Templeton

Foreign

Fund

3

Performance

Summary

8

Your

Fund’s

Expenses

10

Financial

Highlights

and

Statement

of

Investments

11

Financial

Statements

19

Notes

to

Financial

Statements

23

Shareholder

Information

32

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Templeton

Foreign

Fund

This

semiannual

report

for

Templeton

Foreign

Fund

covers

the

period

ended

February

28,

2022

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

foreign

securities.

These

securities

are

predominantly

equity

securities

of

companies

located

outside

the

U.S.,

including

developing

markets.

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

-2.65%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index-NR,

which

measures

stock

performance

in

global

developed

and

emerging

markets

excluding

the

U.S.,

posted

a

-6.95%

cumulative

total

return.

1

Please

note

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

the

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

You

can

find

more

performance

data

in

the

Performance

Summary

beginning

on

page

8

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

ACWI-NR,

posted

a

-5.26%

total

return

for

the

six

months

ended

February

28,

2022.

1

The

combination

of

increased

consumer

demand

and

persistent

supply-chain

disruptions

contributed

to

higher

inflation

in

many

countries.

This

inflationary

pressure

led

many

of

the

world’s

central

banks

to

adopt

less

accommodative

stances

regarding

monetary

policy.

The

Chinese

government’s

imposition

of

new

restrictions

on

some

businesses

also

pressured

Asian

and

global

emerging

market

stocks.

Near

period-end,

Russia’s

invasion

of

Ukraine

increased

investor

uncertainty,

as

international

sanctions

on

Russia

constrained

companies

that

do

business

with

Russia

and

threatened

to

disrupt

global

economic

activity

and

commodity

markets.

In

the

U.S.,

the

economy

continued

to

recover

amid

declining

unemployment,

solid

wage

growth

and

strong

business

confidence.

Gross

domestic

product

(GDP)

growth

accelerated

in

the

fourth

quarter

of

2021,

as

strong

consumer

and

business

spending

supported

the

economy.

However,

investor

expectations

for

higher

interest

rates

and

geopolitical

uncertainty

late

in

the

reporting

period

negatively

impacted

U.S.

equities.

The

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

U.S.

Treasury

(UST)

and

mortgage

bond

purchases

to

help

keep

markets

functioning.

In

its

January

2022

meeting

statement,

however,

the

Fed

noted

that

due

to

employment

gains

and

elevated

inflation,

it

expected

conditions

would

soon

be

appropriate

for

raising

interest

rates.

Furthermore,

the

Fed

maintained

its

timetable

for

reducing

its

purchases

of

UST

and

mortgage-backed

securities.

Economic

growth

slowed

in

the

eurozone,

declining

notably

in

the

fourth

quarter

of

2021

as

the

spread

of

the

Omicron

variant

of

COVID-19

disrupted

labor

markets

and

led

to

renewed

restrictions.

Additionally,

in

February

2022,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

on

record,

and

the

prospect

of

energy

shortages

during

the

winter

tempered

investor

optimism.

The

European

Central

Bank

struck

a

less

accommodative

tone

at

its

February

meeting,

acknowledging

that

inflation

has

been

more

persistent

than

expected

and

opening

the

possibility

of

an

interest-rate

increase

in

2022.

Stocks

of

companies

Geographic

Composition

2/28/22

%

of

Total

Net

Assets

Europe

49.8%

Asia

40.4%

North

America

7.0%

Latin

America

&

Caribbean

1.9%

Short-Term

Investments

&

Other

Net

Assets

0.9%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

16

.

Templeton

Foreign

Fund

4

franklintempleton.com

Semiannual

Report

with

exposure

to

Russia,

particularly

banks,

endured

further

declines

late

in

the

reporting

period.

Consequently,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

-6.70%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-9.34%

total

return

for

the

six-month

period.

1

Although

China’s

economy

continued

to

grow,

it

was

pressured

by

COVID-19

restrictions

and

government

measures

to

limit

real

estate

speculation.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

investor

concerns

about

the

solvency

of

several

large

Chinese

property

developers

further

pressured

Asian

stocks

during

the

six-

month

period.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-9.81%

total

return

for

the

six

months

under

review.

1

Rising

interest

rates

and

elevated

inflation

dampened

investor

enthusiasm

in

global

emerging

market

equities.

Geopolitical

instability

drove

strength

in

the

U.S.

dollar,

further

pressuring

stocks

in

emerging

market

countries,

especially

Russia

as

the

ruble

plunged

against

the

U.S.

dollar.

Interest-rate

increases

to

curb

inflation

by

several

central

banks,

including

those

of

Brazil

and

Mexico,

as

well

as

the

international

sanctions

on

Russia,

raised

investor

concerns

about

a

slowdown

in

economic

growth.

Investment

Strategy

Our

investment

strategy

employs

a

bottom-up,

value-

oriented,

long-term

approach.

We

focus

on

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

Our

analysis

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

also

consider

the

company’s

price/

earnings

ratio,

price/cash

flow

ratio,

profit

margins

and

liquidation

value.

The

Fund

may,

from

time

to

time,

engage

in

currency-related

derivatives,

such

as

currency

and

cross-currency

forwards

and

currency

futures

contracts,

to

seek

to

hedge

(protect)

against

currency

risks.

Manager’s

Discussion

Templeton

Foreign

Fund

outperformed

its

benchmark,

the

MSCI

ACWI

ex-USA

Index-NR,

during

the

semiannual

review

period,

led

by

stock

selection

and

a

favorable

overweighted

allocation

in

energy.

Stock

selection

in

industrials,

information

technology

(IT),

health

care

and

several

other

sectors

also

contributed.

Consumer

discretionary

and,

to

lesser

extents,

consumer

staples

and

financials

were

the

only

sectors

that

detracted

from

relative

results.

From

a

geographical

standpoint,

an

overweighting

in

the

U.K.,

underweighting

in

China

and

stock

selection

in

Germany

and

Japan

all

aided

relative

returns.

Top

10

Industries

2/28/22

%

of

Total

Net

Assets

a

Banks

13.5%

Oil,

Gas

&

Consumable

Fuels

8.7%

Pharmaceuticals

7.6%

Industrial

Conglomerates

5.4%

Metals

&

Mining

4.5%

Automobiles

4.4%

Aerospace

&

Defense

4.3%

Semiconductors

&

Semiconductor

Equipment

4.1%

Internet

&

Direct

Marketing

Retail

3.7%

Insurance

3.3%

Top

10

Countries

2/28/22

A

%

of

Total

Net

Assets

A

a

United

Kingdom

22.8%

Japan

17.4%

Germany

10.2%

Netherlands

8.3%

South

Korea

7.0%

United

States

7.0%

China

6.6%

Switzerland

3.4%

France

3.4%

Hong

Kong

3.2%

Templeton

Foreign

Fund

5

franklintempleton.com

Semiannual

Report

The

period

under

review

encompassed

what

we

viewed

as

a

meaningful

inflection

point

in

markets.

After

several

months

of

more

persistent

and

higher-than-expected

inflation,

in

November

2021

the

Fed

signaled

a

more

hawkish

position,

including

likely

interest

rate

hikes

and

the

gradual

phasing

out

of

asset

purchases

known

as

quantitative

easing.

The

Fed’s

policy

pivot

was

echoed

by

other

major

central

banks,

pushing

bond

yields

higher,

steepening

key

yield

curves

and

benefiting

value-oriented

sectors

with

positive

interest-rate

exposure

(like

financials)

and

inflation

hedge

characteristics

(like

energy

and

materials).

At

the

same

time,

the

erstwhile

leaders

of

the

last

market

cycle—expensive,

growth-oriented

stocks

in

areas

like

technology,

consumer

discretionary,

and

media

and

entertainment—sold

off

sharply.

Overall,

investors

seemed

to

refocus

on

fundamental

and

quality

characteristics

and

de-emphasize

the

speculative

extrapolation

of

revenue

growth

trends,

an

about-face

that

benefited

Templeton’s

strategies

given

our

emphasis

on

rigorous

fundamental

analysis

and

valuation

discipline.

Indeed,

Templeton

Foreign

Fund

had

its

best

start

to

a

year

relative

to

its

benchmark

in

more

than

three

decades

during

the

first

two

months

of

2022,

and

was

comfortably

ahead

of

its

benchmark

on

a

trailing

one-year

basis.

The

energy

sector

was

the

biggest

relative

contributor

at

a

time

when

the

price

of

oil

soared

to

its

highest

levels

since

2014.

The

sector

accounted

for

three

of

the

Fund’s

top-five

contributors:

U.K.-based

oil

majors

Shell

and

BP

and

Canadian

energy

producer

Cenovus

Energy

(not

held

at

period-end).

We

have

been

adding

selectively

to

our

energy

position

over

the

past

year

given

growing

supply-and-demand

imbalances,

stemming

from

years

of

underinvestment

in

production

on

the

supply

side

and

a

likely

slower-than-expected

transition

to

renewables

supporting

hydrocarbon

demand.

Rising

inflationary

pressures

and

continued

supply

discipline

from

the

Organization

of

the

Petroleum

Exporting

Countries

kept

energy

prices

raised

during

the

period,

even

before

Russia’s

invasion

of

Ukraine

led

to

a

breakout

in

oil

prices

well

above

$100

per

barrel

in

the

early

days

of

March

2022.

While

we

expect

significant

volatility

in

oil

prices

given

current

geopolitical

events,

we

continue

to

believe

that

intermediate-term

supply-and-

demand

fundamentals

remain

supportive.

Against

this

backdrop,

high-quality

oil

and

gas

producers

remain,

in

our

view,

cheaply-valued

and

highly

cash-generative,

with

much

of

that

cash

being

returned

to

shareholders

in

the

form

of

buybacks

and

dividends.

Industrials

stocks

also

outperformed,

led

by

U.K.-based

defense

and

aerospace

specialist

BAE

Systems.

The

market’s

rotation

toward

value

in

the

latter

half

of

the

reporting

period

had

a

defensive

flavor

to

it,

which

benefited

BAE

as

a

lowly-valued,

capital-intensive

company

that

benefits

from

both

COVID-19

reopening

and

escalating

geopolitical

tensions.

In

our

view,

BAE

offers

an

attractive

revenue

profile

with

above-industry

growth

and

an

enviable

order

backlog

that

creates

high

visibility.

The

firm

has

strong

incumbent

positions

that

are

well-supported

by

government

spending

initiatives,

as

well

as

a

geographically

diversified

client

base

and

attractive

product

mix

between

production

and

after-market.

In

our

opinion,

valuations

remain

undemanding

and

dividend

and

free

cash-flow

yields

are

generous,

with

the

firm’s

new

chief

financial

officer

prioritizing

capital

return

to

shareholders.

IT

holdings

also

notably

outperformed.

While

there

were

no

IT

holdings

among

the

Fund’s

10

biggest

contributors,

our

reasonably-valued

sector

holdings

successfully

limited

losses

relative

to

their

more

expensive

benchmark

counterparts.

Our

underweighted

exposure

to

the

weak

sector

also

supported

relative

outperformance.

Health

care,

communication

services,

real

estate,

materials

and

utilities

all

also

outperformed

during

the

period,

while

our

slightly

elevated

cash

position

positively

impacted

relative

returns

in

a

weak

market

environment.

Turning

to

detractors,

consumer

discretionary

was

the

biggest

relative

laggard,

pressured

by

an

unfavorable

overweighting

and

weakness

at

European

food-delivery

firm

Just

Eat

Takeaway.com.

The

stock

remained

under

pressure

amid

concerns

about

competition

and

profitability,

and

this

remains

a

“show-me”

story

going

forward.

Investors

will

want

to

see

the

strategic

divestiture

of

certain

assets

Top

10

Holdings

2/28/22

Company

Industry

,

Country

%

of

Total

Net

Assets

A

a

Shell

plc

3.9%

Oil,

Gas

&

Consumable

Fuels,

Netherlands

BP

plc

3.7%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

Hitachi

Ltd.

3.1%

Industrial

Conglomerates,

Japan

Samsung

Electronics

Co.

Ltd.

2.8%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

2.7%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Standard

Chartered

plc

2.7%

Banks,

United

Kingdom

Sumitomo

Metal

Mining

Co.

Ltd.

2.6%

Metals

&

Mining,

Japan

Bayer

AG

2.6%

Pharmaceuticals,

Germany

KB

Financial

Group,

Inc.

2.4%

Banks,

South

Korea

AstraZeneca

plc

2.3%

Pharmaceuticals,

United

Kingdom

Templeton

Foreign

Fund

6

franklintempleton.com

Semiannual

Report

(which

management

is

exploring),

more

consistency

hitting

guidance

targets,

and

an

improving

competitive

environment

that

shifts

from

“growth

at

any

cost”

to

“profitable

growth.”

We

see

numerous

catalysts

that

should

help

Just

Eat

achieve

these

goals,

creating

considerable

upside

potential

from

current

depressed

valuation

levels.

Financials

and

consumer

staples

also

detracted

from

relative

results,

albeit

to

lesser

extents.

Asia-focused

life

insurers

Prudential

and

AIA

Group

were

among

the

financials

sector’s

biggest

laggards.

Shares

declined

as

regulatory

tightening

and

slowing

growth

in

China

led

to

decelerating

new

business

in

this

key

end-market.

However,

we

believe

that

current

growth

headwinds

in

China

are

likely

to

be

transient

and

that

long-term

growth

opportunities

in

this

attractive

market

remain

robust

for

industry

leaders

like

AIA

and

Prudential.

The

stocks

currently

trade

near

the

lower-end

of

their

historical

valuation

range

and

remain

core

holdings

that

we

expect

will

benefit

from

Asia’s

rising

middle-class

and

compound

value

over

time.

In

consumer

staples,

Japanese

pharmacy

Sundrug

slumped

after

reporting

slight

sales

weakness

in

its

most

recent

quarter.

We

remain

constructive

on

the

stock

given

management’s

continued

emphasis

on

returns

on

invested

capital

and

the

company’s

strong

platform

for

profitable

growth

in

a

consolidating

industry.

From

a

geographical

standpoint,

all

major

regions

outperformed,

led

by

favorable

allocations

in

the

U.K.

(overweighted)

and

China

(underweighted)

and

stock

selection

in

Germany,

Japan

and

South

Korea.

Market

volatility

spiked

at

the

end

of

the

reporting

period

after

Russia

invaded

Ukraine,

sparking

a

risk-off

event

across

asset

classes.

The

Fund

has

no

direct

exposure

(and

little

indirect

exposure)

to

Russia.

We

have

not

found

attractive

opportunities

in

Russian

equities

given

heightened

corporate

governance

concerns

and

geopolitical

risks.

Nevertheless,

the

impact

of

war

in

Europe

is

creating

volatility

in

all

risk

assets.

We

are

not

currently

making

any

major

changes

to

our

strategic

positioning,

though

the

portfolio

manager

continues

to

make

incremental

adjustments

designed

to

take

advantage

of

volatility

and

manage

evolving

risks.

This

has

included

slowly

reducing

exposure

to

certain

stocks

that

have

performed

positively

despite

the

selloff

and

appear

fully-valued,

and

rotating

into

high-quality

companies

with

strong

long-term

fundamentals

that

have

sold

off

on

the

back

of

recent

volatility.

Many

such

opportunities

are

emerging

in

Europe,

where

already-wide

valuation

spreads

have

expanded

further

amid

the

Russia-

Ukraine

conflict.

We

also

continue

to

find

select

opportunities

in

“away-from-home”

stocks,

which

should

benefit

as

economies

eventually

reopen

from

COVID-19

and

consumer

demand

shifts

from

goods

to

services.

While

the

near-term

impact

of

war

in

Europe

will

likely

be

negative

for

financial

markets

(and

is

a

tragic

humanitarian

crisis),

it

also

accelerates

the

move

away

from

the

low

interest

rate,

low

inflation,

benign

economic

environment

that

favored

expensive

growth

stocks

in

the

past

cycle.

We

have

continued

to

see

risks

in

both

tails

of

the

market’s

valuation

distribution:

valuation

risk

among

expensive

growth

stocks

and

credit

risk

among

lower

quality

value

stocks.

We

have

viewed

the

recent

leadership

of

these

market

extremes

as

unsustainable

and

have

tried

to

manage

the

portfolio

toward

a

better

balance

of

quality,

earnings

growth

and

valuation.

It

is

important

to

recognize

the

effect

of

currency

movements

on

the

Fund’s

performance.

In

general,

if

the

value

of

the

U.S.

dollar

goes

up

compared

with

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

go

down

in

value

because

it

will

be

worth

fewer

U.S.

dollars.

This

can

have

a

negative

effect

on

Fund

performance.

Conversely,

when

the

U.S.

dollar

weakens

in

relation

to

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

increase

in

value,

which

can

contribute

to

Fund

performance.

For

the

six

months

ended

February

28,

2022,

the

U.S.

dollar

rose

in

value

relative

to

most

currencies.

As

a

result,

the

Fund’s

performance

was

negatively

affected

by

the

portfolio’s

investment

predominantly

in

securities

with

non-

U.S.

currency

exposure.

Thank

you

for

your

continued

participation

in

Templeton

Foreign

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Christopher

James

Peel,

CFA

Lead

Portfolio

Manager

Herbert

J.

Arnett,

Jr.

Peter

M.

Moeschter,

CFA

Warren

Pustam,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

February

28,

2022,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

CFA

®

is

a

trademark

owned

by

CFA

Institute

Templeton

Foreign

Fund

7

franklintempleton.com

Semiannual

Report

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Performance

Summary

as

of

February

28,

2022

Templeton

Foreign

Fund

8

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

2/28/22

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A

:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

A

4

6-Month

-2.65%

-7.98%

1-Year

+1.40%

-4.13%

5-Year

+13.45%

+1.41%

10-Year

+46.07%

+3.27%

Advisor

6-Month

-2.53%

-2.53%

1-Year

+1.59%

+1.59%

5-Year

+14.82%

+2.80%

10-Year

+49.70%

+4.12%

See

page

9

for

Performance

Summary

footnotes.

Templeton

Foreign

Fund

Performance

Summary

9

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments;

investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors.

Currency

rates

may

fluctuate

significantly

over

short

periods

of

time,

and

can

reduce

returns.

Because

the

Fund

may

invest

its

assets

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographical-

ly.

Current

political

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

enable

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform

as

promised.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

The

Fund

has

an

expense

reduction

contractually

guaranteed

through

12/31/22.

Fund

investment

results

reflect

the

expense

reduction;

without

this

reduction,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Prior

to

9/10/18

these

shares

were

offered

at

a

higher

initial

sales

charge

of

5.75%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

5.50%.

5.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(9/1/21–2/28/22)

Share

Class

Net

Investment

Income

A

$0.2951

C

$0.2131

R

$0.2795

R6

$0.3281

Advisor

$0.3165

Total

Annual

Operating

Expenses

5

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

1.10%

1.15%

Advisor

0.85%

0.90%

Your

Fund’s

Expenses

Templeton

Foreign

Fund

10

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

9/1/21

Ending

Account

Value

2/28/22

Expenses

Paid

During

Period

9/1/21–2/28/22

1,2

Ending

Account

Value

2/28/22

Expenses

Paid

During

Period

9/1/21–2/28/22

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$973.50

$5.31

$1,019.41

$5.44

1.09%

C

$1,000

$970.10

$8.97

$1,015.69

$9.18

1.84%

R

$1,000

$972.10

$6.54

$1,018.17

$6.69

1.34%

R6

$1,000

$974.90

$3.37

$1,021.38

$3.45

0.69%

Advisor

$1,000

$974.70

$4.10

$1,020.64

$4.20

0.84%

Templeton

Funds

Financial

Highlights

Templeton

Foreign

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

11

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.77

$6.22

$6.61

$7.69

$7.81

$6.87

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.04

0.18

c

0.10

0.19

0.12

0.11

Net

realized

and

unrealized

gains

(losses)

(0.25)

1.46

(0.25)

(1.09)

(0.13)

0.96

Total

from

investment

operations

........

(0.21)

1.64

(0.15)

(0.90)

(0.01)

1.07

Less

distributions

from:

Net

investment

income

..............

(0.30)

(0.09)

(0.24)

(0.18)

(0.11)

(0.13)

Net

asset

value,

end

of

period

..........

$7.26

$7.77

$6.22

$6.61

$7.69

$7.81

Total

return

d

.......................

(2.65)%

26.57%

(2.76)%

(11.73)%

(0.15)%

15.83%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.17%

1.15%

1.19%

1.15%

1.16%

1.21%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.09%

1.07%

1.10%

1.08%

1.11%

f

1.21%

f,g

Net

investment

income

...............

0.98%

2.45%

c

1.55%

2.69%

1.54%

1.55%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,725,874

$1,990,939

$1,766,365

$2,395,260

$2,929,181

$3,287,394

Portfolio

turnover

rate

................

15.56%

37.85%

h

42.37%

h

30.81%

23.01%

42.56%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.09

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.23%.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

Templeton

Funds

Financial

Highlights

Templeton

Foreign

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

12

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.70

$6.17

$6.54

$7.49

$7.60

$6.69

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.01

0.13

c

0.05

0.12

0.06

0.05

Net

realized

and

unrealized

gains

(losses)

(0.24)

1.43

(0.25)

(1.05)

(0.12)

0.94

Total

from

investment

operations

........

(0.23)

1.56

(0.20)

(0.93)

(0.06)

0.99

Less

distributions

from:

Net

investment

income

..............

(0.21)

(0.03)

(0.17)

(0.02)

(0.05)

(0.08)

Net

asset

value,

end

of

period

..........

$7.26

$7.70

$6.17

$6.54

$7.49

$7.60

Total

return

d

.......................

(2.99)%

25.55%

(3.42)%

(12.40)%

(0.79)%

14.92%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.92%

1.90%

1.94%

1.90%

1.91%

1.96%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.84%

1.82%

1.85%

1.83%

1.86%

f

1.96%

f,g

Net

investment

income

...............

0.24%

1.81%

c

0.81%

1.94%

0.79%

0.80%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$32,681

$39,083

$54,093

$87,160

$281,640

$346,032

Portfolio

turnover

rate

................

15.56%

37.85%

h

42.37%

h

30.81%

23.01%

42.56%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.09

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.58%.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

Templeton

Funds

Financial

Highlights

Templeton

Foreign

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

13

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.58

$6.08

$6.47

$7.53

$7.65

$6.73

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.03

0.16

c

0.08

0.17

0.10

0.09

Net

realized

and

unrealized

gains

(losses)

(0.24)

1.42

(0.24)

(1.07)

(0.12)

0.94

Total

from

investment

operations

........

(0.21)

1.58

(0.16)

(0.90)

(0.02)

1.03

Less

distributions

from:

Net

investment

income

..............

(0.28)

(0.08)

(0.23)

(0.16)

(0.10)

(0.11)

Net

asset

value,

end

of

period

..........

$7.09

$7.58

$6.08

$6.47

$7.53

$7.65

Total

return

d

.......................

(2.79)%

26.29%

(3.03)%

(11.96)%

(0.32)%

15.57%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

1.42%

1.40%

1.44%

1.40%

1.41%

1.46%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

1.34%

1.32%

1.35%

1.33%

1.36%

f

1.46%

f,g

Net

investment

income

...............

0.73%

2.21%

c

1.33%

2.44%

1.29%

1.30%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$121,388

$123,744

$109,187

$127,546

$148,638

$153,516

Portfolio

turnover

rate

................

15.56%

37.85%

h

42.37%

h

30.81%

23.01%

42.56%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.09

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.98%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

Templeton

Funds

Financial

Highlights

Templeton

Foreign

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

14

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.64

$6.12

$6.51

$7.58

$7.70

$6.78

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.05

0.21

c

0.12

0.22

0.15

0.16

Net

realized

and

unrealized

gains

(losses)

(0.25)

1.43

(0.24)

(1.08)

(0.12)

0.93

Total

from

investment

operations

........

(0.20)

1.64

(0.12)

(0.86)

0.03

1.09

Less

distributions

from:

Net

investment

income

..............

(0.33)

(0.12)

(0.27)

(0.21)

(0.15)

(0.17)

Net

asset

value,

end

of

period

..........

$7.11

$7.64

$6.12

$6.51

$7.58

$7.70

Total

return

d

.......................

(2.51)%

27.02%

(2.38)%

(11.34)%

0.24%

16.52%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.80%

0.79%

0.79%

0.77%

0.73%

0.74%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.69%

0.69%

0.70%

0.68%

0.68%

f

0.73%

f

Net

investment

income

...............

1.40%

2.86%

c

1.96%

3.09%

1.97%

2.03%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$414,216

$531,344

$594,452

$906,474

$1,496,328

$1,757,902

Portfolio

turnover

rate

................

15.56%

37.85%

g

42.37%

g

30.81%

23.01%

42.56%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.09

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.63%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

Note

3(h).

Templeton

Funds

Financial

Highlights

Templeton

Foreign

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

15

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$7.64

$6.12

$6.51

$7.58

$7.70

$6.78

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.05

0.20

c

0.11

0.20

0.14

0.13

Net

realized

and

unrealized

gains

(losses)

(0.25)

1.43

(0.24)

(1.07)

(0.12)

0.94

Total

from

investment

operations

........

(0.20)

1.63

(0.13)

(0.87)

0.02

1.07

Less

distributions

from:

Net

investment

income

..............

(0.32)

(0.11)

(0.26)

(0.20)

(0.14)

(0.15)

Net

asset

value,

end

of

period

..........

$7.12

$7.64

$6.12

$6.51

$7.58

$7.70

Total

return

d

.......................

(2.53)%

26.88%

(2.57)%

(11.53)%

0.16%

16.10%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.92%

0.90%

0.94%

0.90%

0.91%

0.96%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.84%

0.82%

0.85%

0.83%

0.86%

f

0.96%

f,g

Net

investment

income

...............

1.24%

2.80%

c

1.79%

2.94%

1.79%

1.80%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$792,023

$620,885

$857,179

$857,482

$1,627,827

$1,717,937

Portfolio

turnover

rate

................

15.56%

37.85%

h

42.37%

h

30.81%

23.01%

42.56%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.09

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

1.57%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Excludes

the

value

of

portfolio

activity

as

a

result

of

in-kind

transactions.

See

N

ote

3(h).

Templeton

Funds

Statement

of

Investments

(unaudited),

February

28,

2022

Templeton

Foreign

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

a

a

Industry

Shares

a

Value

a

Common

Stocks

99.1%

Brazil

1.9%

Wheaton

Precious

Metals

Corp.

.....

Metals

&

Mining

1,343,006

$

58,841,599

China

6.6%

a

Alibaba

Group

Holding

Ltd.

.........

Internet

&

Direct

Marketing

Retail

3,672,870

48,349,516

a

Baidu,

Inc.,

ADR

.................

Interactive

Media

&

Services

148,719

22,670,724

China

Overseas

Land

&

Investment

Ltd.

Real

Estate

Management

&

Development

9,569,600

29,217,796

Gree

Electric

Appliances,

Inc.

of

Zhuhai,

A

...........................

Household

Durables

3,965,000

23,145,804

NXP

Semiconductors

NV

..........

Semiconductors

&

Semiconductor

Equipment

230,683

43,857,452

Sinopec

Engineering

Group

Co.

Ltd.,

H

Construction

&

Engineering

26,233,380

12,549,757

a

Vipshop

Holdings

Ltd.,

ADR

........

Internet

&

Direct

Marketing

Retail

2,626,112

22,768,391

202,559,440

France

3.4%

Dassault

Aviation

SA

..............

Aerospace

&

Defense

292,460

43,511,298

Faurecia

SE

....................

Auto

Components

561,720

21,146,314

Valeo

.........................

Auto

Components

1,790,043

39,468,999

104,126,611

Germany

10.2%

Bayer

AG

......................

Pharmaceuticals

1,364,167

78,780,795

Bayerische

Motoren

Werke

AG

......

Automobiles

507,607

48,875,337

a

Continental

AG

..................

Auto

Components

450,059

38,342,403

b

Covestro

AG,

144A,

Reg

S

.........

Chemicals

693,025

36,642,964

E.ON

SE

.......................

Multi-Utilities

4,215,997

57,331,311

Fresenius

Medical

Care

AG

&

Co.

KGaA

Health

Care

Providers

&

Services

864,099

55,427,107

315,399,917

Hong

Kong

3.2%

AIA

Group

Ltd.

..................

Insurance

5,316,653

55,207,653

CK

Asset

Holdings

Ltd.

............

Real

Estate

Management

&

Development

3,707,406

23,416,292

Swire

Pacific

Ltd.,

A

..............

Real

Estate

Management

&

Development

3,599,862

19,893,743

98,517,688

India

2.0%

Housing

Development

Finance

Corp.

Ltd.

.........................

Thrifts

&

Mortgage

Finance

1,952,237

61,560,691

Japan

17.4%

Elecom

Co.

Ltd.

.................

Technology

Hardware,

Storage

&

Peripherals

1,078,000

14,862,204

Hitachi

Ltd.

.....................

Industrial

Conglomerates

1,941,279

96,009,903

Honda

Motor

Co.

Ltd.

.............

Automobiles

2,116,405

64,303,903

Isuzu

Motors

Ltd.

................

Automobiles

1,666,816

22,544,995

Seria

Co.

Ltd.

...................

Multiline

Retail

1,071,607

27,494,457

Sony

Group

Corp.

................

Household

Durables

328,794

33,596,529

Sumitomo

Metal

Mining

Co.

Ltd.

.....

Metals

&

Mining

1,589,983

79,319,198

Sumitomo

Mitsui

Financial

Group,

Inc.

.

Banks

1,531,623

54,319,568

Sundrug

Co.

Ltd.

.................

Food

&

Staples

Retailing

1,809,559

49,263,961

Taisei

Corp.

....................

Construction

&

Engineering

1,256,330

41,778,444

Takeda

Pharmaceutical

Co.

Ltd.

.....

Pharmaceuticals

1,252,700

38,198,534

Toyota

Industries

Corp.

............

Machinery

196,134

14,919,466

536,611,162

Netherlands

8.3%

EXOR

NV

......................

Diversified

Financial

Services

437,163

33,114,558

ING

Groep

NV

..................

Banks

3,254,078

37,994,286

SBM

Offshore

NV

................

Energy

Equipment

&

Services

4,209,864

64,111,737

Templeton

Funds

Statement

of

Investments

(unaudited)

Templeton

Foreign

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Netherlands

(continued)

Shell

plc

.......................

Oil,

Gas

&

Consumable

Fuels

4,535,447

$

119,585,520

254,806,101

Portugal

1.0%

Galp

Energia

SGPS

SA,

B

.........

Oil,

Gas

&

Consumable

Fuels

2,899,995

32,093,797

South

Korea

7.0%

KB

Financial

Group,

Inc.

...........

Banks

1,474,406

72,742,963

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

1,421,831

85,674,784

Shinhan

Financial

Group

Co.

Ltd.

....

Banks

1,801,271

58,608,874

217,026,621

Spain

0.7%

a

Amadeus

IT

Group

SA

............

IT

Services

184,537

12,172,415

a,c

Tecnicas

Reunidas

SA

............

Energy

Equipment

&

Services

1,170,272

9,564,418

21,736,833

Switzerland

3.4%

Adecco

Group

AG

................

Professional

Services

1,227,413

57,962,740

Roche

Holding

AG

...............

Pharmaceuticals

128,083

48,504,050

106,466,790

Taiwan

2.7%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

......................

Semiconductors

&

Semiconductor

Equipment

3,876,044

83,383,797

Thailand

1.5%

Kasikornbank

PCL

...............

Banks

9,198,837

46,213,864

United

Kingdom

22.8%

AstraZeneca

plc

.................

Pharmaceuticals

579,288

70,399,846

BAE

Systems

plc

................

Aerospace

&

Defense

6,645,848

63,797,198

BP

plc

.........................

Oil,

Gas

&

Consumable

Fuels

23,710,950

115,552,678

CK

Hutchison

Holdings

Ltd.

.........

Industrial

Conglomerates

9,929,086

69,613,935

Imperial

Brands

plc

...............

Tobacco

2,696,656

58,956,982

a

Informa

plc

.....................

Media

4,416,503

34,963,962

a

International

Consolidated

Airlines

Group

SA

.....................

Airlines

14,579,294

28,613,364

a,b

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

...........................

Internet

&

Direct

Marketing

Retail

1,038,480

42,020,179

Lloyds

Banking

Group

plc

..........

Banks

96,964,280

62,484,705

c

Prudential

plc,

(HKD

Traded)

........

Insurance

589,500

8,814,444

Prudential

plc,

(GBP

Traded)

........

Insurance

2,518,531

38,070,666

a

Rolls-Royce

Holdings

plc

..........

Aerospace

&

Defense

19,383,025

26,734,162

Standard

Chartered

plc

............

Banks

11,699,705

83,366,666

703,388,787

United

States

7.0%

a

Array

Technologies,

Inc.

...........

Electrical

Equipment

2,664,300

29,946,732

a

Berkshire

Hathaway,

Inc.,

B

.........

Diversified

Financial

Services

148,063

47,594,851

a

Booking

Holdings,

Inc.

............

Hotels,

Restaurants

&

Leisure

20,484

44,496,369

a

DXC

Technology

Co.

..............

IT

Services

1,778,180

60,511,466

H&R

Block,

Inc.

..................

Diversified

Consumer

Services

1,314,157

32,604,235

215,153,653

Total

Common

Stocks

(Cost

$2,757,597,673)

....................................

3,057,887,351

Templeton

Funds

Statement

of

Investments

(unaudited)

Templeton

Foreign

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

Short

Term

Investments

0.7%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Time

Deposits

0.7%

France

0.7%

Credit

Agricole

Corporate

and

Investment

Bank

SA,

0.07%,

3/01/22

20,400,000

$

20,400,000

Total

Time

Deposits

(Cost

$20,400,000)

........................................

20,400,000

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$20,400,000

)

................................

20,400,000

a

a

a

Total

Investments

(Cost

$2,777,997,673)

99.8%

..................................

$3,078,287,351

Other

Assets,

less

Liabilities

0.2%

.............................................

7,894,197

Net

Assets

100.0%

...........................................................

$3,086,181,548

a

a

a

See

Abbreviations

on

page

31.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

February

28,

2022,

the

aggregate

value

of

these

securities

was

$78,663,143,

representing

2.5%

of

net

assets.

c

A

portion

or

all

of

the

security

is

on

loan

at

February

28,

2022.

See

Note

1(c).

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

February

28,

2022

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

19

Templeton

Foreign

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$2,777,997,673

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$3,281,183)

.................................

$3,078,287,351

Cash

....................................................................................

67,351

Receivables:

Investment

securities

sold

...................................................................

22,433,052

Capital

shares

sold

........................................................................

2,076,592

Dividends

and

interest

.....................................................................

17,412,655

European

Union

tax

reclaims

(Note

1

d

)

.........................................................

1,662,504

Total

assets

..........................................................................

3,121,939,505

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

2,641,935

Capital

shares

redeemed

...................................................................

6,285,016

Management

fees

.........................................................................

1,590,156

Distribution

fees

..........................................................................

418,459

Transfer

agent

fees

........................................................................

1,251,445

Trustees'

fees

and

expenses

.................................................................

5,236

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

d

)

.............................

20,788,322

Deferred

tax

...............................................................................

1,787,502

Accrued

expenses

and

other

liabilities

...........................................................

989,886

Total

liabilities

.........................................................................

35,757,957

Net

assets,

at

value

.................................................................

$3,086,181,548

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$3,267,633,348

Total

distributable

earnings

(losses)

.............................................................

(181,451,800)

Net

assets,

at

value

.................................................................

$3,086,181,548

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

February

28,

2022

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

Templeton

Foreign

Fund

Class

A:

Net

assets,

at

value

.......................................................................

$1,725,873,804

Shares

outstanding

........................................................................

237,746,377

Net

asset

value

per

share

a

..................................................................

$7.26

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

................................

$7.68

Class

C:

Net

assets,

at

value

.......................................................................

$32,681,299

Shares

outstanding

........................................................................

4,504,214

Net

asset

value

and

maximum

offering

price

per

share

a

.............................................

$7.26

Class

R:

Net

assets,

at

value

.......................................................................

$121,387,761

Shares

outstanding

........................................................................

17,120,114

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$7.09

Class

R6:

Net

assets,

at

value

.......................................................................

$414,216,124

Shares

outstanding

........................................................................

58,230,146

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$7.11

Advisor

Class:

Net

assets,

at

value

.......................................................................

$792,022,560

Shares

outstanding

........................................................................

111,207,971

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$7.12

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Templeton

Funds

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

Februaury

28,

2022

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

21

Templeton

Foreign

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$3,346,502)

Unaffiliated

issuers

........................................................................

$33,504,647

Interest:

Unaffiliated

issuers

........................................................................

30,827

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

25,534

Non-controlled

affiliates

(Note

3

f

)

.............................................................

5

Other

income

(Note

1

d

)

......................................................................

26,686

Less:

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

d

)

..........................

(49,253)

Total

investment

income

...................................................................

33,538,446

Expenses:

Management

fees

(Note

3

a

)

...................................................................

11,244,561

Distribution

fees:

(Note

3c

)

    Class

A

................................................................................

2,246,001

    Class

C

................................................................................

179,459

    Class

R

................................................................................

305,084

Transfer

agent

fees:

(Note

3e

)

    Class

A

................................................................................

1,581,873

    Class

C

................................................................................

31,604

    Class

R

................................................................................

107,523

    Class

R6

...............................................................................

136,151

    Advisor

Class

............................................................................

708,092

Custodian

fees

.............................................................................

148,129

Reports

to

shareholders

fees

..................................................................

229,905

Registration

and

filing

fees

....................................................................

68,283

Professional

fees

...........................................................................

11,826

Trustees'

fees

and

expenses

..................................................................

121,383

Other

....................................................................................

164,191

Total

expenses

.........................................................................

17,284,065

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

..............................................

(1,381,667)

Net

expenses

.........................................................................

15,902,398

Net

investment

income

................................................................

17,636,048

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

97,026,802

Foreign

currency

transactions

................................................................

(313,388)

Net

realized

gain

(loss)

..................................................................

96,713,414

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(200,260,969)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(515,435)

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

1,016,163

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(199,760,241)

Net

realized

and

unrealized

gain

(loss)

............................................................

(103,046,827)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(85,410,779)

Templeton

Funds

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

Templeton

Foreign

Fund

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$17,636,048

$92,940,813

Net

realized

gain

(loss)

.................................................

96,713,414

337,726,333

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(199,760,241)

398,219,453

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(85,410,779)

828,886,599

Distributions

to

shareholders:

Class

A

.............................................................

(68,477,455)

(25,789,554)

Class

C

.............................................................

(999,549)

(254,786)

Class

R

.............................................................

(4,571,272)

(1,399,512)

Class

R6

............................................................

(20,850,055)

(9,135,018)

Advisor

Class

........................................................

(34,087,582)

(14,872,436)

Total

distributions

to

shareholders

..........................................

(128,985,913)

(51,451,306)

Capital

share

transactions:

(Note

2

)

Class

A

.............................................................

(150,488,628)

(197,236,237)

Class

C

.............................................................

(4,372,202)

(27,080,860)

Class

R

.............................................................

5,496,434

(11,727,543)

Class

R6

............................................................

(83,795,484)

(176,375,993)

Advisor

Class

........................................................

227,742,983

(440,296,554)

Total

capital

share

transactions

............................................

(5,416,897)

(852,717,187)

Net

increase

(decrease)

in

net

assets

...................................

(219,813,589)

(75,281,894)

Net

assets:

Beginning

of

period

.....................................................

3,305,995,137

3,381,277,031

End

of

period

..........................................................

$3,086,181,548

$3,305,995,137

Templeton

Funds

23

franklintempleton.com

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Templeton

Foreign

Fund

1.

Organization

and

Significant

Accounting

Policies

Templeton

Funds (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of three separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Templeton

Foreign

Fund

(Fund)

is

included

in

this

report.

The

Fund

offers five

classes

of

shares:

Class

A,

Class

C,

Class

R,

Class

R6

and

Advisor

Class.

Class

C

shares

automatically

convert

to

Class

A

shares

on

a

monthly

basis,

after

they

have

been

held

for

8

years. Each

class

of

shares

may

differ

by

its

initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees. 

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust’s

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-

counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in

open-end

mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

time

deposits

are

valued

at

cost,

which

approximates

fair

value.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund’s

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

February

28,

2022,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

24

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund.

Additionally, the

Fund

held $3,460,591

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are

held as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

held

as

collateral.

As

such,

the

non-cash

collateral

is

excluded

from

the

Statement

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/

or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

d.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

25

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union, the

Fund

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims). Income

recognized,

if

any,

for

EU

reclaims

is

reflected

as

other

income

in

the

Statement

of

Operations

and

any

related

receivable,

if

any,

is

reflected

as

European

Union

tax

reclaims

in

the

Statement

of

Assets

and

Liabilities.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

When

uncertainty

exists

as

to

the

ultimate

resolution

of

these

proceedings,

the

likelihood

of

receipt

of

these

EU

reclaims,

and

the

potential

timing

of

payment,

no

amounts

are

reflected

in

the

financial

statements.

For

U.S.

income

tax

purposes,

EU

reclaims

received

by

the

Fund,

if

any,

reduce

the

amount

of

foreign

taxes

Fund

shareholders

can

use

as

tax

deductions

or credits

on

their

income

tax

returns.

In

the

event

that

EU

reclaims

received

by

the Fund

during a

fiscal

year

exceed

foreign

withholding

taxes

paid

by

the

Fund,

and

the

Fund previously

passed

through to

its

shareholders

foreign

taxes

incurred

by

the

Fund

to

be

used

as

a

credit

or

deduction

on

a

shareholder’s

income

tax

return,

the Fund

will enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the Fund's

shareholders.

The

Fund

determined

to

enter

into

a

closing

agreement

with

the

IRS

and

recorded

the

estimated

payments

as

a

reduction

to

income,

as

reflected

in

the

Statement

of

Operations.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

February

28,

2022,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

e.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

f.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

g.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Income

and

Deferred

Taxes

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

26

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust’s

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

February

28,

2022,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund’s

shares

were

Six

Months

Ended

February

28,

2022

Year

Ended

August

31,

2021

Shares

Amount

Shares

Amount

Class

A

Shares:

Shares

sold

a

...................................

8,957,437

$67,589,973

28,785,548

$209,553,273

Shares

issued

in

reinvestment

of

distributions

..........

9,189,756

64,695,879

3,171,878

22,520,330

Shares

redeemed

...............................

(36,796,986)

(282,774,480)

(59,457,247)

(429,309,840)

Net

increase

(decrease)

..........................

(18,649,793)

$(150,488,628)

(27,499,821)

$(197,236,237)

Class

C

Shares:

Shares

sold

...................................

233,005

$1,748,319

641,829

$4,680,418

Shares

issued

in

reinvestment

of

distributions

..........

139,410

982,841

35,520

251,483

Shares

redeemed

a

..............................

(942,974)

(7,103,362)

(4,376,336)

(32,012,761)

Net

increase

(decrease)

..........................

(570,559)

$(4,372,202)

(3,698,987)

$(27,080,860)

Class

R

Shares:

Shares

sold

...................................

1,404,246

$10,304,397

2,527,401

$18,072,742

Shares

issued

in

reinvestment

of

distributions

..........

662,175

4,555,764

200,428

1,392,973

Shares

redeemed

...............................

(1,262,085)

(9,363,727)

(4,363,676)

(31,193,258)

Net

increase

(decrease)

..........................

804,336

$5,496,434

(1,635,847)

$(11,727,543)

Class

R6

Shares:

Shares

sold

...................................

5,620,883

$41,718,276

22,666,025

$167,068,991

Shares

issued

in

reinvestment

of

distributions

..........

2,743,028

18,899,459

1,210,174

8,422,812

Shares

redeemed

...............................

(19,724,407)

(144,413,219)

(51,442,655)

(351,867,796)

Net

increase

(decrease)

..........................

(11,360,496)

$(83,795,484)

(27,566,456)

$(176,375,993)

Advisor

Class

Shares:

Shares

sold

...................................

42,660,852

$324,766,630

29,013,447

$207,655,897

Shares

issued

in

reinvestment

of

distributions

..........

4,600,357

31,742,463

2,047,132

14,268,511

Shares

redeemed

in-kind

(Note

3h)

..................

—

—

(48,183,921)

(363,822,338)

Shares

redeemed

...............................

(17,355,057)

(128,766,110)

(41,534,758)

(298,398,624)

Net

increase

(decrease)

..........................

29,906,152

$227,742,983

(58,658,100)

$(440,296,554)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

1.

Organization

and

Significant

Accounting

Policies

(continued)

g.

Guarantees

and

Indemnifications

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

27

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Management

Fees

The

Fund

pays

an

investment

management

fee,

calculated

daily

and

paid

monthly,

to

Global

Advisors

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

February

28,

2022,

the

annualized

gross

effective

investment

management

fee

rate

was

0.695%

of

the

Fund’s

average

daily

net

assets. 

b.

Administrative

Fees

Under

an

agreement

with

Global

Advisors,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Global

Advisors

based

on

the

Fund’s

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

each

share

class,

with

the

exception

of

Class

R6

and

Advisor

Class

shares,

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund’s

Class A reimbursement

distribution

plan,

the

Fund

reimburses

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

the

maximum

annual

plan

rate.

Under

the

Class

A

reimbursement

distribution

plan,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Fund’s

Class C

and

R

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

Subsidiary

Affiliation

Templeton

Global

Advisors

Limited

(Global

Advisors)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Annualized

Fee

Rate

Net

Assets

0.705%

Up

to

and

including

$1

billion

0.690%

Over

$1

billion,

up

to

and

including

$5

billion

0.675%

Over

$5

billion,

up

to

and

including

$10

billion

0.655%

Over

$10

billion,

up

to

and

including

$15

billion

0.635%

Over

$15

billion,

up

to

and

including

$20

billion

0.615%

Over

$20

billion,

up

to

and

including

$25

billion

0.605%

Over

$25

billion,

up

to

and

including

$30

billion

0.595%

Over

$30

billion,

up

to

and

including

$35

billion

0.585%

In

excess

of

$35

billion

Class

A

....................................................................................

0.25%

Class

C

....................................................................................

1.00%

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

28

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Fund.

These

charges

are

deducted

from

the

proceeds

of

sales

of

Fund

shares

prior

to

investment

or

from

redemption

proceeds

prior

to

remittance,

as

applicable.

Distributors

has

advised

the

Fund

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Fund's

shares

for

the

period:

e.

Transfer

Agent

Fees

Each

class

of

shares pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

period

ended

February

28,

2022,

the

Fund

paid

transfer

agent

fees

of

$2,565,243,

of

which

$878,653

was

retained

by

Investor

Services.

f.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Fund

does

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Fund

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statement

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

period

ended

February

28,

2022,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

Class

R

....................................................................................

0.50%

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..............................

$55,340

CDSC

retained

..............................................................................

$2,801

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Templeton

Foreign

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$—

$1,390,420

$(1,390,420)

$—

$—

$—

—

$5

Total

Affiliated

Securities

...

$—

$1,390,420

$(1,390,420)

$—

$—

$—

$5

3.

Transactions

with

Affiliates

(continued)

c.

Distribution

Fees

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

29

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

g.

Waiver

and

Expense

Reimbursements

Global

Advisors

and

Investor

Services

have

contractually

agreed

in

advance

to

waive

or

limit

their

respective

fees

and

to

assume

as

their

own

expense

certain

expenses

otherwise

payable

by

the

Fund

so

that

the

operating

expenses

(excluding

interest

expense,

distribution

fees,

acquired

fund

fees

and

expenses,

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

each

class

of

the

Fund

do

not

exceed

0.85%,

based

on

the

average

net

assets

of

each

class

until

December

31,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund's

fiscal

year

end.

Investor

Services

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

do

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class

until

December

31,

2022.

h.

Other

Affiliated

Transactions

During

the

year

ended

August

31,

2021,

CollegeInvest

(Colorado

529

Plans),

an

affiliated

shareholder

of

the

Fund,

fully

redeemed

out

of

the

Fund.

As

a

result,

on

July

16,

2021,

the

Fund

delivered

portfolio

securities

and

cash

that

were

transferred

in-kind

to

the

Colorado

529

Plans,

which

included

$32,278,642

of

net

realized

gains.

As

such

gains

are

not

taxable

to

the

Fund

and

are

not

distributed

to

remaining

shareholders,

they

are

reclassified

from

accumulated

net

realized

gains

to

paid-in

capital.

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

August

31,

2021,

the

capital

loss

carryforwards

were

as

follows:

At

February

28,

2022,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

EU

reclaims,

wash

sales,

passive

foreign

investment

company

shares

and

gains

realized

on

in-kind

shareholder

redemptions.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

February

28,

2022,

aggregated

$486,635,976

and

$534,906,623,

respectively.

Capital

loss

carryforwards

not

subject

to

expiration:

Long

term

................................................................................

$525,755,254

Cost

of

investments

..........................................................................

$2,807,601,432

Unrealized

appreciation

........................................................................

$618,977,393

Unrealized

depreciation

........................................................................

(348,291,474

)

Net

unrealized

appreciation

(depreciation)

..........................................................

$270,685,919

3.

Transactions

with

Affiliates

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

30

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

6.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

7.

Geopolitical

Risk 

On

February

24,

2022,

Russia

engaged

in

military

actions

in

the

sovereign

territory

of

Ukraine.

The

current

political

and

financial

uncertainty

surrounding

Russia

and

Ukraine

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

these

countries

and

may

also

cause

uncertainty

for

the

global

economy

and

broader

financial

markets.

The

ultimate

fallout

and

long-term

impact

from

these

events

are

not

known.

The

Fund

will

continue

to

assess

the

impact

on

valuations

and

liquidity

and

will

take

any

potential

actions

needed

in

accordance

with

procedures

approved

by

the

Board.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

9.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

3,

2023.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

Fund

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Fund

and

other

costs

incurred

by

the

Fund,

pay

its

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

its

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

During

the

period

ended

February

28,

2022,

the Fund

did

not

use

the

Global

Credit

Facility.

10.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

31

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

February

28,

2022,

in

valuing

the

Fund's

assets

carried

at

fair

value,

is

as

follows:

11.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

Level

1

Level

2

Level

3

Total

Templeton

Foreign

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Brazil

...............................

$

58,841,599

$

—

$

—

$

58,841,599

China

...............................

89,296,567

113,262,873

—

202,559,440

France

..............................

—

104,126,611

—

104,126,611

Germany

............................

—

315,399,917

—

315,399,917

Hong

Kong

...........................

—

98,517,688

—

98,517,688

India

................................

—

61,560,691

—

61,560,691

Japan

...............................

—

536,611,162

—

536,611,162

Netherlands

..........................

—

254,806,101

—

254,806,101

Portugal

.............................

—

32,093,797

—

32,093,797

South

Korea

..........................

—

217,026,621

—

217,026,621

Spain

...............................

—

21,736,833

—

21,736,833

Switzerland

...........................

—

106,466,790

—

106,466,790

Taiwan

..............................

—

83,383,797

—

83,383,797

Thailand

.............................

—

46,213,864

—

46,213,864

United

Kingdom

.......................

—

703,388,787

—

703,388,787

United

States

.........................

215,153,653

—

—

215,153,653

Short

Term

Investments

...................

—

20,400,000

—

20,400,000

Total

Investments

in

Securities

...........

$363,291,819

$2,714,995,532

a

$—

$3,078,287,351

a

Includes

foreign

securities

valued

at

$2,694,595,532,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

Selected

Portfolio

ADR

American

Depositary

Receipt

Cu

r

rency

GBP

British

Pound

HKD

Hong

Kong

Dollar

10.

Fair

Value

Measurements

(continued)

Templeton

Funds

Shareholder

Information

32

franklintempleton.com

Semiannual

Report

BOARD

APPROVAL

OF

INVESTMENT

MANAGEMENT

AGREEMENTS

TEMPLETON

FUNDS

Templeton

Foreign

Fund

(Fund)

At

an

in-person

meeting

held

on

February

28,

2022

(Meeting),

the

Board

of

Trustees

(Board)

of

Templeton

Funds

(Trust),

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the

investment

management

agreement

between

Templeton

Global

Advisors

Limited

(Manager)

and

the

Trust,

on

behalf

of

the

Fund

(Management

Agreement)

for

an

additional

one-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

the

Management

Agreement.

In

considering

the

continuation

of

the

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

the

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

the

Manager

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

virtual

contract

renewal

meeting

at

which

the

Independent

Trustees

first

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters;

then

met

with

senior

leadership

regarding

the

performance

of

the

global

equity

funds,

as

well

as

expected

enhancements

to

the

Templeton

Global

Equity

Group

leadership;

and

last

met

with

management

to

request

additional

information

that

the

Independent

Trustees

reviewed

and

considered

at

the

Meeting.

The

Board

later

had

an

opportunity

for

an

expanded

discussion

with

the

leadership

of

the

Templeton

Global

Equity

Group

to

hear

about

strategies

to

deliver

improved

investment

returns

to

shareholders.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

the

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

the

Manager;

(ii)

the

investment

performance

of

the

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

the

Manager

and

its

affiliates

from

the

relationship

with

the

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

the

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

In

approving

the

continuance

of

the

Management

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

terms

of

the

Management

Agreement

are

fair

and

reasonable

and

that

the

continuance

of

such

Management

Agreement

is

in

the

best

interests

of

the

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

the

Manager

and

its

affiliates

to

the

Fund

and

its

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

the

Manager,

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-party

service

providers;

investment

performance

reports

and

related

financial

information

for

the

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

the

Manager

and

its

affiliates;

and

management

fees

charged

by

the

Manager

and

its

affiliates

to

US

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Fund

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Fund.

The

Board

noted

management’s

continued

focus

on

enhancing

the

leadership

of

the

Templeton

Global

Equity

Group

and

commitment

to

providing

the

resources

important

to

delivering

sustainable

returns.

The

Board

also

acknowledged

the

ongoing

integration

of

the

Legg

Mason

family

of

funds

into

the

FT

family

of

funds

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

including

various

regulatory

initiatives

and

recent

geopolitical

concerns.

Templeton

Funds

Shareholder

Information

33

franklintempleton.com

Semiannual

Report

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Manager’s

parent,

and

its

commitment

to

the

mutual

fund

business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Fund

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

being

a

global

leader

in

stewardship

and

sustainability

and

the

recent

addition

of

a

senior

executive

focused

on

environmental,

social

and

governance

and

climate

control

initiatives.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

the

Manager

and

its

affiliates

to

the

Fund

and

its

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

the

Fund

over

various

time

periods

ended

November

30,

2021.

The

Board

considered

the

performance

returns

for

the

Fund

in

comparison

to

the

performance

returns

of

mutual

funds

deemed

comparable

to

the

Fund

included

in

a

universe

(Performance

Universe)

selected

by

Broadridge

Financial

Solutions,

Inc.

(Broadridge),

an

independent

provider

of

investment

company

data.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

a

Performance

Universe.

The

Board

also

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

the

Fund’s

performance

results

is

below.

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

international

multi-cap

value

funds.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe.

The

Board

discussed

this

performance

with

management

and

management

explained

that,

even

though

the

Fund’s

peer

group

is

comprised

of

multi-cap

value

funds,

some

funds

within

the

Performance

Universe

are

more

skewed

toward

the

growth

style,

which

has

negatively

impacted

the

Fund’s

relative

returns

during

longer-term

periods

of

outperformance

of

growth

investing

strategies

over

value

investing

strategies.

Management

also

explained

that

the

Fund

had

a

larger

allocation

to

the

energy

sector

in

comparison

to

the

Performance

Universe,

which

underperformed

for

the

three-

and

five-year

periods.

Management

further

explained

that

the

Fund

had

an

underweight

position

to

the

industrials

sector

during

the

one-,

three-

and

five-year

periods

compared

to

its

peer

group,

which

was

a

top

performing

sector

for

the

Fund’s

benchmark,

the

MSCI

All

Country

World

ex

U.S.

Index-NR,

in

each

of

these

periods.

Management

reported

that

the

Fund’s

performance

had

recently

improved,

ranking

in

the

12th

percentile

of

the

Performance

Universe

for

the

one-

month

period

ended

January

31,

2022.

Management

then

discussed

with

the

Board

the

actions

that

are

being

taken

in

an

effort

to

improve

the

performance

of

the

Fund

and

the

global

equity

funds

as

a

whole.

Management

specifically

highlighted

the

strategic

initiatives

being

undertaken

in

the

Templeton

Global

Equity

Group,

including

enhancements

to

the

leadership

of

the

group

and

the

commitment

of

additional

resources

important

to

delivering

sustainable

returns.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

while

management’s

efforts

continue

to

be

closely

monitored.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

the

Fund’s

actual

total

expense

ratio

and

its

various

components,

including,

as

applicable,

management

fees;

transfer

agent

expenses;

underlying

fund

expenses;

Rule

12b-1

and

non-Rule

12b-1

service

fees;

and

other

non-

management

fees.

The

Board

also

noted

the

quarterly

and

annual

reports

it

receives

on

all

marketing

support

payments

made

by

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

the

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

as

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

or

semi-annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges,

and

the

actual

total

expense

ratio,

for

comparative

consistency,

was

shown

for

Class

A

shares

for

the

Fund

and

for

each

of

the

other

funds

in

the

Expense

Group.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

Templeton

Funds

Shareholder

Information

34

franklintempleton.com

Semiannual

Report

The

Expense

Group

for

the

Fund

included

the

Fund,

two

other

international

multi-cap

value

funds,

four

international

multi-cap

growth

funds,

and

four

international

multi-cap

core

funds.

The

Board

noted

that

the

Management

Rate

and

actual

total

expense

ratio

for

the

Fund

were

below

the

medians

of

its

Expense

Group.

The

Board

also

noted

that

the

Fund’s

actual

total

expense

ratio

reflected

a

fee

waiver

from

management.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Profitability

The

Board

reviewed

and

considered

information

regarding

the

profits

realized

by

the

Manager

and

its

affiliates

in

connection

with

the

operation

of

the

Fund.

In

this

respect,

the

Board

considered

the

Fund

profitability

analysis

provided

by

the

Manager

that

addresses

the

overall

profitability

of

FT’s

US

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2021,

being

the

most

recent

fiscal

year-

end

for

FRI.

The

Board

noted

that

although

management

continually

makes

refinements

to

its

methodologies

used

in

calculating

profitability

in

response

to

organizational

and

product-related

changes,

the

overall

methodology

has

remained

consistent

with

that

used

in

the

Fund’s

profitability

report

presentations

from

prior

years.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

by

the

Manager

to

periodically

review

and

assess

the

allocation

methodologies

to

be

used

solely

by

the

Fund’s

Board

with

respect

to

the

profitability

analysis.

The

Board

noted

management’s

belief

that

costs

incurred

in

establishing

the

infrastructure

necessary

for

the

type

of

mutual

fund

operations

conducted

by

the

Manager

and

its

affiliates

may

not

be

fully

reflected

in

the

expenses

allocated

to

the

Fund

in

determining

its

profitability,

as

well

as

the

fact

that

the

level

of

profits,

to

a

certain

extent,

reflected

operational

cost

savings

and

efficiencies

initiated

by

management.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

which

effort

has

required

considerable

up-front

expenditures

by

the

Manager

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Fund,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

US

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

the

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

the

Manager

and

its

affiliates

from

providing

services

to

the

Fund

was

not

excessive

in

view

of

the

nature,

extent

and

quality

of

services

provided

to

the

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

the

Manager

may

realize

economies

of

scale,

if

any,

as

the

Fund

grows

larger

and

whether

the

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints,

which

operate

generally

to

share

any

economies

of

scale

with

the

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

the

Manager’s

view

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

the

Manager

incurs

across

the

FT

family

of

funds

as

a

whole.

The

Board

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

the

Manager

and

its

affiliates,

the

Fund’s

management

fee

structure

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

the

Management

Agreement

for

an

additional

one-year

period.

Proxy

Voting

Policies

and

Procedures

The

Fund’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Fund

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Fund’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Fund’s

Templeton

Funds

Shareholder

Information

35

franklintempleton.com

Semiannual

Report

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Statement

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

the

Fund's

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

104

S

04/22

©

2022

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Semiannual

Report

and

Shareholder

Letter

Templeton

Foreign

Fund

Investment

Manager

Distributor

Shareholder

Services

Templeton

Global

Advisors

Limited

Franklin

Distributors,

LLC

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Templeton

International

Climate

Change

Fund

A

Series

of

Templeton

Funds

February

28,

2022

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

February

28,

2022,

the

global

economic

recovery

was

hampered

by

renewed

outbreaks

of

COVID-19,

supply-chain

disruptions

and

geopolitical

tensions

and

conflict.

Rising

inflation

across

multiple

countries

caused

many

central

banks,

including

the

U.S.

Federal

Reserve,

to

adopt

less

accommodative

monetary

stances,

putting

pressure

on

global

equity

markets.

New

Chinese

government

regulations

on

some

businesses

further

dampened

investor

sentiment

in

Asian

and

emerging

market

stocks.

Near

period-end,

Russia’s

invasion

of

Ukraine

increased

investor

uncertainty,

as

international

sanctions

on

Russia

constrained

companies

that

do

business

with

Russia

and

threatened

to

disrupt

global

economic

activity

and

commodity

markets.

In

this

environment,

stocks

in

global

developed

and

emerging

markets

excluding

the

U.S.,

as

measured

by

the

MSCI

All

Country

World

Index

ex

USA

Index-NR

(net

of

tax

withholding

when

dividends

are

paid),

posted

a

-6.95%

total

return

for

the

period.

1

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

Historically,

patient

investors

have

achieved

rewarding

results

by

evaluating

their

goals,

diversifying

their

assets

globally

and

maintaining

a

disciplined

investment

program,

all

hallmarks

of

the

Templeton

investment

philosophy.

We

continue

to

recommend

investors

consult

financial

professionals

and

review

their

portfolios

to

design

a

long-term

strategy

and

portfolio

allocation

that

meet

their

individual

needs,

goals

and

risk

tolerance.

Templeton

International

Climate

Change

Fund’s

semiannual

report

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

Please

remember

all

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin

Templeton,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

investment

needs

in

the

years

ahead.

Sincerely,

Alan

Bartlett

Chief

Investment

Officer

Templeton

Global

Equity

Group

This

letter

reflects

our

analysis

and

opinions

as

of

February

28,

2022,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Semiannual

Report

2

Contents

Semiannual

Report

Templeton

International

Climate

Change

Fund

3

Performance

Summary

7

Your

Fund’s

Expenses

9

Financial

Highlights

and

Statement

of

Investments

10

Financial

Statements

13

Notes

to

Financial

Statements

16

Shareholder

Information

24

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Templeton

International

Climate

Change

Fund

This

semiannual

report

for

Templeton

International

Climate

Change

Fund

covers

the

period

ended

February

28,

2022.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

total

return

over

the

longer

term.

Under

normal

market

conditions,

the

Fund

invests

at

least

80%

of

its

net

assets

in

“non-U.S.

securities,”

as

defined

in

the

prospectus.

These

securities

are

predominantly

equity

securities

of

companies

located

outside

the

U.S.,

including

developing

markets.

Under

normal

market

conditions,

the

Fund

invests

predominantly

in

companies

that

we

determined

to

exhibit

superior

practices

in

identifying,

adapting

and

providing

solutions

to

the

consequences

of

climate

change

(i.e.,

companies

that,

based

on

our

fundamental

analysis

and

research,

are

able

to

successfully

transition

to

a

lower

carbon

economy).

Performance

Overview

The

Fund’s

Advisor

Class

shares

posted

a

-11.88%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

MSCI

All

Country

World

Index

(ACWI)

ex

USA

Index-NR,

which

measures

stock

performance

in

global

developed

and

emerging

markets

excluding

the

U.S.,

posted

a

-6.95%

cumulative

total

return.

1

Please

note

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

the

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

You

can

find

more

performance

data

in

the

Performance

Summary

beginning

on

page

7

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

ACWI-NR,

posted

a

-5.26%

total

return

for

the

six

months

ended

February

28,

2022.

1

The

combination

of

increased

consumer

demand

and

persistent

supply-chain

disruptions

contributed

to

higher

inflation

in

many

countries.

This

inflationary

pressure

led

many

of

the

world’s

central

banks

to

adopt

less

accommodative

stances

regarding

monetary

policy.

The

Chinese

government’s

imposition

of

new

restrictions

on

some

businesses

also

pressured

Asian

and

global

emerging

market

stocks.

Near

period-end,

Russia’s

invasion

of

Ukraine

increased

investor

uncertainty,

as

international

sanctions

on

Russia

constrained

companies

that

do

business

with

Russia

and

threatened

to

disrupt

global

economic

activity

and

commodity

markets.

In

the

U.S.,

the

economy

continued

to

recover

amid

declining

unemployment,

solid

wage

growth

and

strong

business

confidence.

Gross

domestic

product

(GDP)

growth

accelerated

in

the

fourth

quarter

of

2021,

as

strong

consumer

and

business

spending

supported

the

economy.

However,

investor

expectations

for

higher

interest

rates

and

geopolitical

uncertainty

late

in

the

reporting

period

negatively

impacted

U.S.

equities.

The

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

U.S.

Treasury

(UST)

and

mortgage

bond

purchases

to

help

keep

markets

functioning.

In

its

January

2022

meeting

statement,

however,

the

Fed

noted

that

due

to

employment

gains

and

elevated

inflation,

it

expected

conditions

would

soon

be

appropriate

for

raising

interest

rates.

Furthermore,

the

Fed

maintained

its

timetable

for

reducing

its

purchases

of

UST

and

mortgage-backed

securities.

Economic

growth

slowed

in

the

eurozone,

declining

notably

in

the

fourth

quarter

of

2021

as

the

spread

of

the

Omicron

variant

of

COVID-19

disrupted

labor

markets

and

led

to

renewed

restrictions.

Additionally,

in

February

2022,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

Geographic

Composition

2/28/22

%

of

Total

Net

Assets

Europe

69.4%

Asia

28.9%

North

America

2.2%

Short-Term

Investments

&

Other

Net

Assets

(0.5)%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

11

.

Templeton

International

Climate

Change

Fund

4

franklintempleton.com

Semiannual

Report

level

on

record,

and

the

prospect

of

energy

shortages

during

the

winter

tempered

investor

optimism.

The

European

Central

Bank

struck

a

less

accommodative

tone

at

its

February

meeting,

acknowledging

that

inflation

has

been

more

persistent

than

expected

and

opening

the

possibility

of

an

interest-rate

increase

in

2022.

Stocks

of

companies

with

exposure

to

Russia,

particularly

banks,

endured

further

declines

late

in

the

reporting

period.

Consequently,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

-6.70%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-9.34%

total

return

for

the

six-month

period.

1

Although

China’s

economy

continued

to

grow,

it

was

pressured

by

COVID-19

restrictions

and

government

measures

to

limit

real

estate

speculation.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

investor

concerns

about

the

solvency

of

several

large

Chinese

property

developers

further

pressured

Asian

stocks

during

the

six-

month

period.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-9.81%

total

return

for

the

six

months

under

review.

1

Rising

interest

rates

and

elevated

inflation

dampened

investor

enthusiasm

in

global

emerging

market

equities.

Geopolitical

instability

drove

strength

in

the

U.S.

dollar,

further

pressuring

stocks

in

emerging

market

countries,

especially

Russia

as

the

ruble

plunged

against

the

U.S.

dollar.

Interest-rate

increases

to

curb

inflation

by

several

central

banks,

including

those

of

Brazil

and

Mexico,

as

well

as

the

international

sanctions

on

Russia,

raised

investor

concerns

about

a

slowdown

in

economic

growth.

Investment

Strategy

When

choosing

equity

investments

for

the

Fund,

we

apply

a

bottom-up,

value-oriented,

long-term

approach

to

select

attractively

valued

companies

preparing

for

a

transition

to

a

lower

carbon

economy

and

that

meet

our

climate

change

criteria.

We

focus

on

the

market

price

of

the

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-

term

earnings,

asset

value

and

cash

flow

potential.

Our

analysis

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

also

consider

a

company’s

price/earnings

ratio,

price/cash

flow

ratio,

profit

margins

and

liquidation

value.

Manager’s

Discussion

Templeton

International

Climate

Change

Fund

underperformed

its

benchmark

index

during

the

six-month

period.

The

“risk-off”

sentiment

was

driven

by

a

growing

expectation

of

monetary

tightening

in

developed

markets,

as

central

banks

began

to

react

to

more

persistent

inflation

and

tightness

in

the

labor

market.

Toward

the

end

of

the

reporting

period,

however,

Russia’s

invasion

of

Ukraine

heightened

geopolitical

risk

and

weakened

expectations

of

monetary

tightening,

creating

headwinds

for

our

financials

and

automobile

supplier

holdings.

Relative

performance

was

hurt

by

stock

selection

and

an

overweighting

in

the

industrials

sector

and

an

underweighting

in

the

financials

sector.

In

industrials,

relative

performance

was

hurt

by

Spanish

solar

power

equipment

manufacturer

Soltec

Power

Holdings

and

by

Denmark’s

Vestas

Wind

Systems,

the

world’s

largest

manufacturer

of

onshore

wind

turbines.

Shares

of

Vestas

declined

following

the

company’s

second

cut

to

operating

margin

expectations

in

2021

due

to

rising

input

costs,

most

notably

steel

and

transportation

costs.

We

believe

this

remains

a

temporary

issue

and

that

the

case

for

long-

term

profitable

growth

in

the

wind

industry

has

continued

to

strengthen,

as

companies

and

countries

target

more

aggressive

decarbonization

plans.

Elsewhere,

relative

performance

was

hampered

primarily

by

our

investment

in

Umicore,

a

Belgian-based

specialty

chemicals

company

comprising

three

businesses.

Umicore

provides

metals

recycling

services,

vehicle

catalysts

and

cathode

materials

for

electric

vehicles.

Shares

underperformed

in

the

fourth

quarter

of

2021

after

the

company’s

new

CEO

announced

a

profit

warning

for

both

Top

10

Industries

2/28/22

%

of

Total

Net

Assets

a

Electrical

Equipment

20.5%

Banks

12.4%

Semiconductors

&

Semiconductor

Equipment

12.0%

Multi-Utilities

9.4%

Automobiles

7.1%

Independent

Power

and

Renewable

Electricity

Producers

5.2%

Food

Products

5.2%

Pharmaceuticals

5.1%

Building

Products

4.5%

Metals

&

Mining

3.9%

Templeton

International

Climate

Change

Fund

5

franklintempleton.com

Semiannual

Report

2022

and

2023,

driven

by

substantially

lower

volumes

in

its

cathode

materials

business,

dampening

earnings

growth

for

several

years.

While

this

business

has

experienced

operational

issues

in

the

past,

we

had

remained

constructive

given

the

long-term

opportunity

around

the

growth

of

electric

vehicles.

However,

we

are

concerned

that

the

latest,

more

meaningful

profit

warning

is

evidence

that

Umicore

has

lost

its

technology

leadership

position

and

calls

into

question

its

substantial

investments

in

cathode

materials

capacity

in

recent

years.

We

have

since

exited

our

position

in

the

stock.

In

contrast,

stock

selection

and

underweightings

in

the

consumer

discretionary

and

health

care

sectors

contributed

to

relative

performance.

Elsewhere,

relative

performance

in

the

utilities

sector

was

led

higher

by

our

investment

in

French

global

water

and

waste

utility

company

Veolia

Environnement.

The

company’s

shares

have

continued

to

benefit

from

investor

optimism

regarding

the

company’s

upcoming

merger

with

competitor

Suez

(not

a

Fund

holding).

Shares

outperformed

in

late

2021

after

the

company

reported

better-than-expected

third-quarter

results

and

reconfirmed

its

fiscal

2021

earnings

outlook.

In

the

longer

term,

the

company

should

benefit

from

a

multi-year

growth

trend

in

the

demand

for

waste,

water

and

recycling

services,

driven

by

increasing

consumer

awareness

and

regulation.

Also

from

the

utilities

sector,

shares

of

German

power

provider

E.ON

advanced

after

the

company

reported

third-quarter

2021

results

that

pointed

to

recoveries

in

key

business

segments

and

highlighted

encouraging

debt

reduction

progress.

We

continue

to

see

numerous

potential

value

catalysts

for

E.ON

over

time,

including

continued

balance

sheet

improvements,

lower

financing

costs

and

the

green

energy

transition,

which

would

spur

grid

investment

and

upgrades

in

Germany

that

ultimately

should

help

expand

E.ON’s

regulated

asset

base.

Regionally,

stock

selection

in

France,

Spain

and

Belgium

detracted

from

relative

performance

during

the

six-month

reporting

period.

Stock

selection

and

an

overweighting

in

Denmark

also

pressured

results,

as

did

a

lack

of

exposure

to

Canada.

In

contrast,

stock

selection

in

Japan

contributed

to

relative

performance,

as

did

a

lack

of

exposure

to

China.

Our

zero-weighting

to

Russian

equities

also

supported

relative

results.

It

is

important

to

recognize

the

effect

of

currency

movements

on

the

Fund’s

performance.

In

general,

if

the

value

of

the

U.S.

dollar

goes

up

compared

with

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

go

down

in

value

because

it

will

be

worth

fewer

U.S.

dollars.

This

can

have

a

negative

effect

on

Fund

performance.

Conversely,

when

the

U.S.

dollar

weakens

in

relation

to

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

increase

in

value,

which

can

contribute

to

Fund

performance.

For

the

six

months

ended

February

28,

2022,

the

U.S.

dollar

rose

in

value

relative

to

most

currencies.

As

a

result,

the

Fund’s

performance

was

negatively

affected

by

the

portfolio’s

investment

predominantly

in

securities

with

non-

U.S.

currency

exposure.

Thank

you

for

your

continued

participation

in

Templeton

International

Climate

Change

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Top

10

Holdings

2/28/22

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Prysmian

SpA

5.2%

Electrical

Equipment,

Italy

E.ON

SE

5.2%

Multi-Utilities,

Germany

AstraZeneca

plc

5.1%

Pharmaceuticals,

United

Kingdom

STMicroelectronics

NV

4.8%

Semiconductors

&

Semiconductor

Equipment,

Singapore

Standard

Chartered

plc

4.8%

Banks,

United

Kingdom

Signify

NV

4.7%

Electrical

Equipment,

Netherlands

Cie

de

Saint-Gobain

4.5%

Building

Products,

France

Danone

SA

4.3%

Food

Products,

France

Veolia

Environnement

SA

4.2%

Multi-Utilities,

France

Honda

Motor

Co.

Ltd.

3.9%

Automobiles,

Japan

Top

10

Countries

2/28/22

a

%

of

Total

Net

Assets

a

a

France

20.3%

Germany

11.8%

Japan

11.0%

United

Kingdom

10.9%

Netherlands

8.5%

Italy

6.2%

Denmark

6.2%

India

6.0%

Spain

5.6%

Singapore

4.8%

Templeton

International

Climate

Change

Fund

6

franklintempleton.com

Semiannual

Report

Craig

Cameron,

CFA

Tina

Sadler,

CFA

Herbert

J.

Arnett,

Jr.

Lauran

Halpin

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

February

28,

2022,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

February

28,

2022

Templeton

International

Climate

Change

Fund

7

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

2/28/2022

1

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

Advisor

Class

shares

are

offered

without

sales

charges.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

6-Month

-11.88%

-11.88%

1-Year

-3.02%

-3.02%

3-Year

+47.34%

+13.79%

Since

Inception

(6/1/18)

+35.13%

+8.37%

See

page

8

for

Performance

Summary

footnotes.

Templeton

International

Climate

Change

Fund

Performance

Summary

8

franklintempleton.com

Semiannual

Report

All

investments

involve

risks,

including

possible

loss

of

principal.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments;

investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors.

Currency

rates

may

fluctuate

significantly

over

short

periods

of

time,

and

can

reduce

returns.

Because

the

Fund

may

invest

its

assets

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographical-

ly.

Current

political

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio,

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

enable

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform

as

promised.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

The

Fund

has

an

expense

reduction

contractually

guaranteed

through

12/31/22.

Fund

investment

results

reflect

the

expense

reduction;

without

this

reduction,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(9/1/21–2/28/22)

Net

Investment

Income

Short-Term

Capital

Gain

Long-Term

Capital

Gain

Total

$0.1314

$0.1212

$0.4827

$0.7353

Total

Annual

Operating

Expenses

4

With

Fee

Waiver

Without

Fee

Waiver

0.97%

8.16%

Your

Fund’s

Expenses

Templeton

International

Climate

Change

Fund

9

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value.”

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Beginning

Account

Value

9/1/21

Ending

Account

Value

2/28/22

Expenses

Paid

During

Period

9/1/21–2/28/22

1,2

Ending

Account

Value

2/28/22

Expenses

Paid

During

Period

9/1/21–2/28/22

1,2

a

Annualized

Expense

Ratio

2

$1,000

$881.20

$4.53

$1,019.98

$4.87

0.97%

Templeton

Funds

Financial

Highlights

Templeton

International

Climate

Change

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

10

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

Year

Ended

August

31,

2018

a

2021

2020

2019

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.................

$14.68

$10.71

$8.91

$9.64

$10.00

Income

from

investment

operations

b

:

Net

investment

income

c

.........................

0.04

0.10

0.07

0.27

0.04

Net

realized

and

unrealized

gains

(losses)

...........

(1.77)

3.96

2.03

(0.93)

(0.40)

Total

from

investment

operations

....................

(1.73)

4.06

2.10

(0.66)

(0.36)

Less

distributions

from:

Net

investment

income

..........................

(0.13)

(0.09)

(0.30)

(0.05)

—

Net

realized

gains

.............................

(0.60)

—

—

(0.02)

—

Total

distributions

...............................

(0.73)

(0.09)

(0.30)

(0.07)

—

Net

asset

value,

end

of

period

......................

$12.22

$14.68

$10.71

$8.91

$9.64

Total

return

d

...................................

(11.88)%

37.89%

23.70%

(6.75)%

(3.60)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

......

7.92%

8.16%

6.48%

9.65%

13.30%

Expenses

net

of

waiver

and

payments

by

affiliates

.......

0.98%

0.97%

0.97%

0.97%

0.97%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

...............................

0.97%

0.97%

f

0.97%

0.97%

0.97%

Net

investment

income

...........................

0.55%

0.80%

0.74%

2.94%

1.51%

Supplemental

data

Net

assets,

end

of

period

(000’s)

....................

$2,463

$2,935

$2,142

$1,783

$1,929

Portfolio

turnover

rate

............................

17.15%

53.37%

39.99%

9.55%

7.95%

a

For

the

period

June

1,

2018

(commencement

of

operations)

to

August

31,

2018.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Templeton

Funds

Statement

of

Investments

(unaudited),

February

28,

2022

Templeton

International

Climate

Change

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

11

a

a

Industry

Shares

a

Value

a

Common

Stocks

100.5%

Denmark

6.2%

a

Orsted

A/S,

144A,

Reg

S

...........

Electric

Utilities

428

$

55,379

Vestas

Wind

Systems

A/S

..........

Electrical

Equipment

2,978

96,014

151,393

France

20.3%

BNP

Paribas

SA

.................

Banks

1,633

94,733

Cie

de

Saint-Gobain

..............

Building

Products

1,799

111,522

Danone

SA

.....................

Food

Products

1,754

106,688

Valeo

.........................

Auto

Components

3,758

82,861

Veolia

Environnement

SA

..........

Multi-Utilities

2,960

103,183

498,987

Germany

11.8%

E.ON

SE

.......................

Multi-Utilities

9,346

127,092

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

2,674

90,457

Siemens

AG

....................

Industrial

Conglomerates

510

71,834

289,383

Hong

Kong

0.8%

b

Cadeler

A/S

....................

Construction

&

Engineering

5,443

20,589

b

India

6.0%

b

Azure

Power

Global

Ltd.

...........

Independent

Power

and

Renewable

Electricity

Producers

4,300

71,165

Kaveri

Seed

Co.

Ltd.

..............

Food

Products

3,124

20,211

NHPC

Ltd.

.....................

Independent

Power

and

Renewable

Electricity

Producers

157,200

57,207

148,583

Italy

6.2%

Danieli

&

C

Officine

Meccaniche

SpA

.

Machinery

1,563

24,530

Prysmian

SpA

...................

Electrical

Equipment

3,873

127,468

151,998

Japan

11.0%

Honda

Motor

Co.

Ltd.

.............

Automobiles

3,190

96,924

Sumitomo

Metal

Mining

Co.

Ltd.

.....

Metals

&

Mining

1,923

95,932

Toyota

Motor

Corp.

...............

Automobiles

4,300

78,680

271,536

Netherlands

8.5%

ING

Groep

NV

..................

Banks

8,020

93,641

a

Signify

NV,

144A,

Reg

S

...........

Electrical

Equipment

2,284

116,809

210,450

Singapore

4.8%

STMicroelectronics

NV

............

Semiconductors

&

Semiconductor

Equipment

2,844

119,359

South

Korea

2.7%

a

Samsung

Electronics

Co.

Ltd.,

GDR,

144A,

Reg

S

..................

Technology

Hardware,

Storage

&

Peripherals

22

33,004

Samsung

SDI

Co.

Ltd.

............

Electronic

Equipment,

Instruments

&

Components

70

32,261

65,265

Spain

5.6%

Red

Electrica

Corp.

SA

............

Electric

Utilities

1,371

27,154

Templeton

Funds

Statement

of

Investments

(unaudited)

Templeton

International

Climate

Change

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

12

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

Spain

(continued)

b

Siemens

Gamesa

Renewable

Energy

SA

..........................

Electrical

Equipment

2,001

$

46,032

b

Soltec

Power

Holdings

SA

..........

Electrical

Equipment

11,567

63,516

136,702

Taiwan

3.5%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.,

ADR

..................

Semiconductors

&

Semiconductor

Equipment

800

85,608

United

Kingdom

10.9%

AstraZeneca

plc

.................

Pharmaceuticals

1,036

125,903

DS

Smith

plc

....................

Containers

&

Packaging

5,463

25,169

Standard

Chartered

plc

............

Banks

16,499

117,564

268,636

United

States

2.2%

Schneider

Electric

SE

.............

Electrical

Equipment

357

55,300

Total

Common

Stocks

(Cost

$2,106,150)

.......................................

2,473,789

Short

Term

Investments

1.0%

a

a

Industry

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

1.0%

United

States

1.0%

c,d

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

..........

24,951

24,951

Total

Money

Market

Funds

(Cost

$24,951)

......................................

24,951

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$24,951

)

...................................

24,951

a

a

a

Total

Investments

(Cost

$2,131,101)

101.5%

....................................

$2,498,740

Other

Assets,

less

Liabilities

(1.5)%

...........................................

(36,228)

Net

Assets

100.0%

...........................................................

$2,462,512

a

a

a

See

Abbreviations

on

page

23

.

a

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

February

28,

2022,

the

aggregate

value

of

these

securities

was

$205,192,

representing

8.3%

of

net

assets.

b

Non-income

producing.

c

See

Note

3(e)

regarding

investments

in

affiliated

management

investment

companies.

d

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

February

28,2022

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

13

Templeton

International

Climate

Change

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$2,106,150

Cost

-

Non-controlled

affiliates

(Note

3

e

)

........................................................

24,951

Value

-

Unaffiliated

issuers

..................................................................

$2,473,789

Value

-

Non-controlled

affiliates

(Note

3

e

)

.......................................................

24,951

Receivables:

Dividends

...............................................................................

7,234

Affiliates

................................................................................

45,931

Total

assets

..........................................................................

2,551,905

Liabilities:

Payables:

Transfer

agent

fees

........................................................................

367

Reports

to

shareholders

fees

................................................................

5,096

Professional

fees

.........................................................................

66,809

Trustees'

fees

and

expenses

.................................................................

509

Deferred

tax

...............................................................................

294

Accrued

expenses

and

other

liabilities

...........................................................

16,318

Total

liabilities

.........................................................................

89,393

Net

assets,

at

value

.................................................................

$2,462,512

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$2,009,800

Total

distributable

earnings

(losses)

.............................................................

452,712

Net

assets,

at

value

.................................................................

$2,462,512

Shares

outstanding

.........................................................................

201,474

Net

asset

value

and

maximum

offering

price

per

share

...............................................

$12.22

Templeton

Funds

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

February

28,

2022

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

14

Templeton

International

Climate

Change

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$3,114)

Unaffiliated

issuers

........................................................................

$20,709

Non-controlled

affiliates

(Note

3

e

)

.............................................................

5

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

35

Total

investment

income

...................................................................

20,749

Expenses:

Management

fees

(Note

3

a

)

...................................................................

9,629

Transfer

agent

fees

(Note

3

d

)

..................................................................

343

Custodian

fees

(Note

4

)

......................................................................

293

Reports

to

shareholders

fees

..................................................................

2,820

Registration

and

filing

fees

....................................................................

30,670

Professional

fees

...........................................................................

52,949

Trustees'

fees

and

expenses

..................................................................

603

Other

....................................................................................

10,611

Total

expenses

.........................................................................

107,918

Expense

reductions

(Note

4

)

...............................................................

(67)

Expenses

waived/paid

by

affiliates

(Note

3

e

and

3

f

)

..............................................

(94,600)

Net

expenses

.........................................................................

13,251

Net

investment

income

................................................................

7,498

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

(net

of

foreign

taxes

of

$821)

Unaffiliated

issuers

......................................................................

100,245

Foreign

currency

transactions

................................................................

(705)

Net

realized

gain

(loss)

..................................................................

99,540

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(453,026)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(116)

Change

in

deferred

taxes

on

unrealized

appreciation

...............................................

1,466

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(451,676)

Net

realized

and

unrealized

gain

(loss)

............................................................

(352,136)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(344,638)

Templeton

Funds

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

15

Templeton

International

Climate

Change

Fund

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$7,498

$20,990

Net

realized

gain

(loss)

.................................................

99,540

336,629

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(451,676)

453,276

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(344,638)

810,895

Distributions

to

shareholders

..............................................

(147,060)

(17,160)

Capital

share

transactions

(Note

2

)

..........................................

18,

948

—

Net

increase

(decrease)

in

net

assets

...................................

(472,750)

793,735

Net

assets:

Beginning

of

period

.....................................................

2,935,262

2,141,527

End

of

period

..........................................................

$2,462,512

$2,935,262

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

Templeton

International

Climate

Change

Fund

16

franklintempleton.com

Semiannual

Report

1.

Organization

and

Significant

Accounting

Policies

Templeton

Funds (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of three separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Templeton

International

Climate

Change

Fund

(Fund)

is

included

in

this

report.

The

Fund

has

five

classes

of

shares:

Class

A,

Class

C,

Class

R,

Class

R6

and

Advisor

Class.

Each

class

of

shares

may

differ

by

its

initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees. 

The

Fund

currently

operates

with

one

class

of

shares,

Advisor

Class.

The

Fund

began

publicly

offering

its

shares

on

December

15,

2021.

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund’s

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust’s

Board

of

Trustees

(the

Board),

the

Fund’s

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in

open-end

mutual

funds

are

valued

at

the

closing

NAV.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day. Events

can occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time. In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

February

28,

2022,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

17

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which

it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

February

28,

2022,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

18

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods. 

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

e.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

f.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust, on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

February

28,

2022,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund’s

shares

were

as

follows:.

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Fund

are

also

officers

and/or

directors

of

the

following

subsidiaries:

Six

Months

Ended

February

28,

2022

Year

Ended

August

31,

2021

Shares

Amount

Shares

Amount

Shares

sold

...................................

1,474

$18,948

—

$—

Net

increase

(decrease)

..........................

1,474

$18,948

—

$—

Subsidiary

Affiliation

Franklin

Templeton

Investments

Corp.

(FTIC)

Investment

manager

Franklin

Templeton

Investment

Management

Ltd.

(FTIML)

Investment

manager

Templeton

Global

Advisors

Ltd.

(Global

Advisors)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

19

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

a.

Management

Fees

The

Fund

pays

an

investment

management

fee,

calculated

daily

and

paid

monthly,

to

FTIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

February

28,

2022,

the

gross

annualized

effective

investment

management

fee

rate

was

0.705%

of

the

Fund’s

average

daily

net

assets. 

Under

a

subadvisory

agreement,

FTIML

and

Global

Advisors,

affiliates

of

FTIC,

provide

subadvisory

services

to

the

Fund.

The

subadvisory

fee

is

paid

by

FTIC

based

on

the

Fund’s

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

b.

Administrative

Fees

Under

an

agreement

with

FTIC,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

FTIC

based

on

the

Fund's

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

each

share

class,

with

the

exception

of

Class

R6

and

Advisor

Class

shares,

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund’s

Class

A

reimbursement

distribution

plan,

the

Fund

reimburses

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of the

Fund's

shares

up

to

the

maximum

annual

plan

rate.

Under

the

Class

A

reimbursement

distribution

plan,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Fund’s

Class

C

and

R

compensation

distribution

plans,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

the

maximum

annual

plan

rate

for

each

class.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

Annualized

Fee

Rate

Net

Assets

0.705%

Up

to

and

including

$1

billion

0.690%

Over

$1

billion,

up

to

and

including

$5

billion

0.675%

Over

$5

billion,

up

to

and

including

$10

billion

0.655%

Over

$10

billion,

up

to

and

including

$15

billion

0.635%

Over

$15

billion,

up

to

and

including

$20

billion

0.615%

Over

$20

billion,

up

to

and

including

$25

billion

0.605%

Over

$25

billion,

up

to

and

including

$30

billion

0.595%

Over

$30

billion,

up

to

and

including

$35

billion

0.585%

In

excess

of

$35

billion

Class

A

....................................................................................

0.25%

Class

C

....................................................................................

1.00%

Class

R

....................................................................................

0.50%

3.

Transactions

with

Affiliates

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

20

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

d.

Transfer

Agent

Fees

Each

class

of

shares pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes’

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

period

ended

February

28,

2022,

the

Fund

paid

transfer

agent

fees

of

$343,

of

which

$326

were

retained

by

Investor

Services.

e.

Investments

in

Affiliated

Management

Investment

Companies

The

Fund

invests

in

one

or

more

affiliated

management

investment

companies.

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

affiliated

fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

fund.

The

Fund

does

not

invest

for

purposes

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

fees

paid

by

the

Fund

are

waived

on

assets

invested

in

the

affiliated

management

investment

companies,

as

noted

in

the

Statement

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

each

affiliate.

During

the

period

ended

February

28,

2022,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

f.

Waiver

and

Expense

Reimbursements

FTIC

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

and

to

assume

as

its

own

expense

certain

expenses

otherwise

payable

by

the

Fund

so

that

the

operating expenses

(excluding

distribution

fees,

acquired

fund

fees

and

expenses

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

of

the

Fund

does

not

exceed

0.97%

based

on

the

average

net

assets

of

each

class

until

December

31,

2022.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund's

fiscal

year

end.

g.

Other

Affiliated

Transactions

At

February

28,

2022,

Franklin

Resources,

Inc.

owned

99.3%

of

the

Fund's

outstanding

shares.

Investment

activities

of

this

shareholder

could

have

a

material

impact

on

the

Fund.

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Investment

Income

a      

a  

a  

a  

a  

a  

a  

a  

Templeton

International

Climate

Change

Fund

Non-Controlled

Affiliates

Dividends

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$

158,272

$

282,151

$

(415,472)

$

—

$

—

$

24,951

24,951

$

5

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.

$—

$174,280

$(174,280)

$—

$—

$—

—

$—

Total

Affiliated

Securities

...

$158,272

$456,431

$(589,752)

$—

$—

$24,951

$5

3.

Transactions

with

Affiliates

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

21

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

4.

Expense

Offset

Arrangement

The Fund has

entered

into

an

arrangement

with

its

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Fund's

custodian

expenses.

During

the

period

ended

February

28,

2022,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

February

28,

2022,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatment

of

wash

sales

and

corporate

actions.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

February

28,

2022,

aggregated

$460,867

and

$501,640,

respectively.

7.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

8.

Geopolitical

Risk 

On

February

24,

2022,

Russia

engaged

in

military

actions

in

the

sovereign

territory

of

Ukraine.

The

current

political

and

financial

uncertainty

surrounding

Russia

and

Ukraine

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

these

countries

and

may

also

cause

uncertainty

for

the

global

economy

and

broader

financial

markets.

The

ultimate

fallout

and

long-term

impact

from

these

events

are

not

known.

The

Fund

will

continue

to

assess

the

impact

on

valuations

and

liquidity

and

will

take

any

potential

actions

needed

in

accordance

with

procedures

approved

by

the

Board.

9.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

Cost

of

investments

..........................................................................

$2,142,358

Unrealized

appreciation

........................................................................

$479,929

Unrealized

depreciation

........................................................................

(123,547)

Net

unrealized

appreciation

(depreciation)

..........................................................

$356,382

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

22

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

10.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

3,

2023.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

Fund

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Fund

and

other

costs

incurred

by

the

Fund,

pay

its

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

its

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

During

the

period

ended

February

28,

2022,

the Fund

did

not

use

the

Global

Credit

Facility.

11.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

February

28,

2022,

in

valuing

the

Fund's

assets

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

International

Climate

Change

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Denmark

............................

$

—

$

151,393

$

—

$

151,393

France

..............................

—

498,987

—

498,987

Germany

............................

—

289,383

—

289,383

Hong

Kong

...........................

—

20,589

—

20,589

India

................................

71,165

77,418

—

148,583

Italy

................................

—

151,998

—

151,998

Japan

...............................

—

271,536

—

271,536

Netherlands

..........................

—

210,450

—

210,450

Singapore

............................

—

119,359

—

119,359

South

Korea

..........................

—

65,265

—

65,265

Spain

...............................

—

136,702

—

136,702

Taiwan

..............................

85,608

—

—

85,608

United

Kingdom

.......................

—

268,636

—

268,636

United

States

.........................

—

55,300

—

55,300

Short

Term

Investments

...................

24,951

—

—

24,951

Total

Investments

in

Securities

...........

$181,724

$2,317,016

a

$—

$2,498,740

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

23

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

12.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Abbreviations

a

Includes

foreign

securities

valued

at

$2,317,016,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

Selected

Portfolio

ADR

American

Depositary

Receipt

GDR

Global

Depositary

Receipt

11.

Fair

Value

Measurements

(continued)

Templeton

Funds

Shareholder

Information

24

franklintempleton.com

Semiannual

Report

BOARD

APPROVAL

OF

INVESTMENT

MANAGEMENT

AGREEMENTS

TEMPLETON

FUNDS

Templeton

International

Climate

Change

Fund

(Fund)

At

an

in-person

meeting

held

on

February

28,

2022

(Meeting),

the

Board

of

Trustees

(Board)

of

the

Fund,

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the:

(i)

investment

management

agreement

between

Franklin

Templeton

Investments

Corp.

(FTIC)

and

the

Trust,

(ii)

investment

sub-advisory

agreement

between

FTIC

and

Franklin

Templeton

Investment

Management

Limited

(FTIML),

an

affiliate

of

FTIC,

and

(iii)

investment

sub-advisory

agreement

between

FTIC

and

Templeton

Global

Advisors

Limited

(TGAL,

and

collectively

with

FTIML,

the

Sub-Advisers),

an

affiliate

of

FTIC,

each

on

behalf

of

the

Fund

(each

a

Management

Agreement)

for

an

additional

one-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

each

Management

Agreement.

FTIC,

FTIML

and

TGAL

are

each

referred

to

herein

as

a

Manager.

In

considering

the

continuation

of

each

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

each

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

each

Manager

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

virtual

contract

renewal

meeting

at

which

the

Independent

Trustees

first

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters;

then

met

with

senior

leadership

regarding

the

performance

of

the

global

equity

funds,

as

well

as

expected

enhancements

to

the

Templeton

Global

Equity

Group

leadership;

and

last

met

with

management

to

request

additional

information

that

the

Independent

Trustees

reviewed

and

considered

at

the

Meeting.

The

Board

later

had

an

opportunity

for

an

expanded

discussion

with

the

leadership

of

the

Templeton

Global

Equity

Group

to

hear

about

strategies

to

deliver

improved

investment

returns

to

shareholders.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

each

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

each

Manager;

(ii)

the

investment

performance

of

the

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

each

Manager

and

its

affiliates

from

the

relationship

with

the

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

the

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

In

approving

the

continuance

of

each

Management

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

terms

of

the

Management

Agreement

are

fair

and

reasonable

and

that

the

continuance

of

such

Management

Agreement

is

in

the

best

interests

of

the

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

each

Manager

and

its

affiliates

to

the

Fund

and

its

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

each

Manager,

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-

party

service

providers;

investment

performance

reports

and

related

financial

information

for

the

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

each

Manager

and

its

affiliates;

and

management

fees

charged

by

each

Manager

and

its

affiliates

to

US

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Fund

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Fund.

The

Board

noted

management’s

continued

focus

on

enhancing

the

leadership

of

the

Templeton

Global

Equity

Group

and

commitment

to

providing

the

resources

important

to

delivering

sustainable

returns.

The

Board

also

acknowledged

the

ongoing

integration

of

the

Legg

Mason

Templeton

Funds

Shareholder

Information

25

franklintempleton.com

Semiannual

Report

family

of

funds

into

the

FT

family

of

funds

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

including

various

regulatory

initiatives

and

recent

geopolitical

concerns.

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Managers’

parent,

and

its

commitment

to

the

mutual

fund

business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Fund

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

being

a

global

leader

in

stewardship

and

sustainability

and

the

recent

addition

of

a

senior

executive

focused

on

environmental,

social

and

governance

and

climate

control

initiatives.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

each

Manager

and

its

affiliates

to

the

Fund

and

its

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

the

Fund

over

the

one-

and

three-year

periods

ended

November

30,

2021.

The

Board

noted

that

the

Fund

commenced

operations

on

June

1,

2018

and

was

100%

owned

by

FRI

until

December

15,

2021

when

the

Fund

became

publicly

available.

The

Board

considered

the

performance

return

for

the

Fund

in

comparison

to

the

performance

returns

of

mutual

funds

deemed

comparable

to

the

Fund

included

in

a

universe

(Performance

Universe)

selected

by

Broadridge

Financial

Solutions,

Inc.

(Broadridge),

an

independent

provider

of

investment

company

data.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

a

Performance

Universe.

The

Board

also

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

the

Fund’s

performance

results

is

below.

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

international

multi-cap

core

funds.

The

Board

noted

that

the

Fund’s

annualized

total

return

for

the

one-

and

three-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

the

Fund’s

actual

total

expense

ratio

and

its

various

components,

including,

as

applicable,

management

fees;

transfer

agent

expenses;

underlying

fund

expenses;

Rule

12b-1

and

non-Rule

12b-1

service

fees;

and

other

non-

management

fees.

The

Board

also

noted

the

quarterly

and

annual

reports

it

receives

on

all

marketing

support

payments

made

by

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

the

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

to

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

or

semi-annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges,

and

the

actual

total

expense

ratio,

for

comparative

consistency,

was

shown

for

Advisor

Class

shares

for

the

Fund

and

Class

I,

Class

IS,

Class

R5

and

Institutional

Class

shares

for

funds

in

the

Expense

Group

with

multiple

classes

of

shares.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

The

Expense

Group

for

the

Fund

included

the

Fund

and

11

other

international

multi-cap

core

funds.

The

Board

noted

that

the

Management

Rate

for

the

Fund

was

below

the

median

of

its

Expense

Group.

The

Board

also

noted

that

the

actual

total

expense

ratio

for

the

Fund

was

above

the

median

of

its

Expense

Group.

The

Board

further

noted

that

the

Fund’s

actual

total

expense

ratio

reflected

a

fee

waiver

from

management.

The

Board

also

noted

that

each

of

the

Fund’s

Sub-Advisers

is

paid

by

FTIC

out

of

the

management

fee

FTIC

receives

from

the

Fund

and

that

the

allocation

of

the

fee

between

FTIC

and

each

Sub-Adviser

reflected

the

services

provided

by

each

to

the

Fund.

After

consideration

of

the

above,

the

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

and

the

sub-advisory

fee

paid

to

each

Sub-Adviser

are

reasonable.

Templeton

Funds

Shareholder

Information

26

franklintempleton.com

Semiannual

Report

Profitability

The

Board

reviewed

and

considered

information

regarding

the

profits

realized

by

each

Manager

and

its

affiliates

in

connection

with

the

operation

of

the

Fund.

In

this

respect,

the

Board

considered

the

Fund

profitability

analysis

that

addresses

the

overall

profitability

of

FT’s

US

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2021,

being

the

most

recent

fiscal

year-end

for

FRI.

The

Board

noted

that

although

management

continually

makes

refinements

to

its

methodologies

used

in

calculating

profitability

in

response

to

organizational

and

product-related

changes,

the

overall

methodology

has

remained

consistent

with

that

used

in

the

Fund’s

profitability

report

presentations

from

prior

years.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

to

periodically

review

and

assess

the

allocation

methodologies

to

be

used

solely

by

the

Fund’s

Board

with

respect

to

the

profitability

analysis.

The

Board

noted

management’s

belief

that

costs

incurred

in

establishing

the

infrastructure

necessary

for

the

type

of

mutual

fund

operations

conducted

by

each

Manager

and

its

affiliates

may

not

be

fully

reflected

in

the

expenses

allocated

to

the

Fund

in

determining

its

profitability,

as

well

as

the

fact

that

the

level

of

profits,

to

a

certain

extent,

reflected

operational

cost

savings

and

efficiencies

initiated

by

management.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

which

effort

has

required

considerable

up-front

expenditures

by

each

Manager

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Fund,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

US

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

each

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

each

Manager

and

its

affiliates

from

providing

services

to

the

Fund

was

not

excessive

in

view

of

the

nature,

extent

and

quality

of

services

provided

to

the

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

each

Manager

may

realize

economies

of

scale,

if

any,

as

the

Fund

grows

larger

and

whether

the

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints,

which

operate

generally

to

share

any

economies

of

scale

with

the

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

management’s

view

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

each

Manager

incurs

across

the

FT

family

of

funds

as

a

whole.

The

Board

noted

that

the

Fund

does

not

currently

have

an

asset

size

that

would

likely

enable

the

Fund

to

achieve

economies

of

scale.

The

Board

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

each

Manager

and

its

affiliates,

the

Fund’s

management

fee

structure

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

each

Management

Agreement

for

an

additional

one-year

period.

Proxy

Voting

Policies

and

Procedures

The

Fund’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Fund

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Fund’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Fund’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Statement

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Templeton

Funds

Shareholder

Information

27

franklintempleton.com

Semiannual

Report

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

the

Fund's

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

"householding,"

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

6316

S

04/22

©

2022

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Semiannual

Report

and

Shareholder

Letter

Templeton

International

Climate

Change

Fund

Investment

Manager

Distributor

Shareholder

Services

Franklin

Templeton

Investments

Corp.

Franklin

Distributors,

LLC

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Templeton

World

Fund

A

Series

of

Templeton

Funds

February

28,

2022

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

February

28,

2022,

the

global

economic

recovery

was

hampered

by

renewed

outbreaks

of

COVID-19,

supply-chain

disruptions

and

geopolitical

tensions

and

conflict.

Rising

inflation

across

multiple

countries

caused

many

central

banks,

including

the

U.S.

Federal

Reserve,

to

adopt

less

accommodative

monetary

stances,

putting

pressure

on

global

equity

markets.

New

Chinese

government

regulations

on

some

businesses

further

dampened

investor

sentiment

in

Asian

and

emerging

market

stocks.

Near

period-end,

Russia’s

invasion

of

Ukraine

increased

investor

uncertainty,

as

international

sanctions

on

Russia

constrained

companies

that

do

business

with

Russia

and

threatened

to

disrupt

global

economic

activity

and

commodity

markets.

In

this

environment,

global

developed

and

emerging

market

stocks,

as

measured

by

the

MSCI

All

Country

World

Index-NR

(net

of

tax

withholding

when

dividends

are

paid),

posted

a

-5.26%

total

return

for

the

period.

1

We

are

committed

to

our

long-term

perspective

and

disciplined

investment

approach

as

we

conduct

a

rigorous,

fundamental

analysis

of

securities

with

a

regular

emphasis

on

investment

risk

management.

Historically,

patient

investors

have

achieved

rewarding

results

by

evaluating

their

goals,

diversifying

their

assets

globally

and

maintaining

a

disciplined

investment

program,

all

hallmarks

of

the

Templeton

investment

philosophy.

We

continue

to

recommend

investors

consult

financial

professionals

and

review

their

portfolios

to

design

a

long-term

strategy

and

portfolio

allocation

that

meet

their

individual

needs,

goals

and

risk

tolerance.

Templeton

World

Fund’s

semiannual

report

includes

more

detail

about

prevailing

conditions

and

a

discussion

about

investment

decisions

during

the

period.

Please

remember

all

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

We

thank

you

for

investing

with

Franklin

Templeton,

welcome

your

questions

and

comments,

and

look

forward

to

serving

your

investment

needs

in

the

years

ahead.

Sincerely,

Alan

Bartlett

Chief

Investment

Officer

Templeton

Global

Equity

Group

This

letter

reflects

our

analysis

and

opinions

as

of

February

28,

2022,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

1.

Source:

Morningstar.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

franklintempleton.com

Semiannual

Report

2

Contents

Semiannual

Report

Templeton

World

Fund

3

Performance

Summary

8

Your

Fund’s

Expenses

10

Financial

Highlights

and

Statement

of

Investments

11

Financial

Statements

17

Notes

to

Financial

Statements

21

Shareholder

Information

30

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Templeton

World

Fund

This

semiannual

report

for

Templeton

World

Fund

covers

the

period

ended

February

28,

2022.

Effective

September

30,

2021,

Templeton

World

Fund

repositioned

to

implement

a

more

focused

global

equity

strategy

with

a

greater

emphasis

on

quality

companies.

The

Fund

remains

diversified

but

may

hold

a

smaller

number

of

issuers.

Additionally,

the

Fund’s

primary

benchmark

changed

to

the

MSCI

All

Country

World

Index

(net

of

dividend

tax

withholdings).

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

long-term

capital

growth.

Under

normal

market

conditions,

the

Fund

invests

primarily

in

the

equity

securities

of

companies

located

anywhere

in

the

world,

including

developing

markets.

Under

normal

circumstances,

the

Fund

will

invest

in

issuers

located

in

at

least

three

different

countries

(including

the

U.S.).

Performance

Overview

The

Fund’s

Class

A

shares

posted

a

-7.13%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Fund’s

new

primary

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)-NR,

which

measures

stock

performance

in

global

developed

and

emerging

markets,

posted

a

-5.26%

cumulative

total

return,

while

the

Fund’s

former

primary

benchmark,

the

MSCI

ACWI

100%

Hedged

to

USD-NR,

posted

a

-4.04%

cumulative

total

return.

1

The

MSCI

ACWI-

NR

replaced

the

MSCI

ACWI

100%

Hedged

to

USD-NR

as

the

Fund’s

primary

benchmark

because

the

investment

manager

believes

the

MSCI

ACWI-NR

is

a

more

appropriate

index

of

the

Fund

due

to

the

fact

that,

as

of

September

30,

2021,

the

Fund

no

longer

regularly

engages

in

currency-

related

derivatives

to

hedge

all

or

substantially

all

of

its

foreign

currency

exposure

to

the

U.S.

dollar.

Please

note

index

performance

information

is

provided

for

reference

and

we

do

not

attempt

to

track

the

index

but

rather

undertake

investments

on

the

basis

of

fundamental

research.

You

can

find

more

performance

data

in

the

Performance

Summary

beginning

on

page

8

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

ACWI-NR,

posted

a

-5.26%

total

return

for

the

six

months

ended

February

28,

2022.

1

The

combination

of

increased

consumer

demand

and

persistent

supply-chain

disruptions

contributed

to

higher

inflation

in

many

countries.

This

inflationary

pressure

led

many

of

the

world’s

central

banks

to

adopt

less

accommodative

stances

regarding

monetary

policy.

The

Chinese

government’s

imposition

of

new

restrictions

on

some

businesses

also

pressured

Asian

and

global

emerging

market

stocks.

Near

period-end,

Russia’s

invasion

of

Ukraine

increased

investor

uncertainty,

as

international

sanctions

on

Russia

constrained

companies

that

do

business

with

Russia

and

threatened

to

disrupt

global

economic

activity

and

commodity

markets.

In

the

U.S.,

the

economy

continued

to

recover

amid

declining

unemployment,

solid

wage

growth

and

strong

business

confidence.

Gross

domestic

product

(GDP)

growth

accelerated

in

the

fourth

quarter

of

2021,

as

strong

consumer

and

business

spending

supported

the

economy.

However,

investor

expectations

for

higher

interest

rates

and

geopolitical

uncertainty

late

in

the

reporting

period

negatively

impacted

U.S.

equities.

The

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-ended

U.S.

Treasury

(UST)

and

mortgage

bond

purchases

to

help

keep

Geographic

Composition

2/28/22

%

of

Total

Net

Assets

North

America

54.8%

Europe

27.6%

Asia

15.8%

Short-Term

Investments

&

Other

Net

Assets

1.8%

1.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

15

.

Templeton

World

Fund

4

franklintempleton.com

Semiannual

Report

markets

functioning.

In

its

January

2022

meeting

statement,

however,

the

Fed

noted

that

due

to

employment

gains

and

elevated

inflation,

it

expected

conditions

would

soon

be

appropriate

for

raising

interest

rates.

Furthermore,

the

Fed

maintained

its

timetable

for

reducing

its

purchases

of

UST

and

mortgage-backed

securities.

Economic

growth

slowed

in

the

eurozone,

declining

notably

in

the

fourth

quarter

of

2021

as

the

spread

of

the

Omicron

variant

of

COVID-19

disrupted

labor

markets

and

led

to

renewed

restrictions.

Additionally,

in

February

2022,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

on

record,

and

the

prospect

of

energy

shortages

during

the

winter

tempered

investor

optimism.

The

European

Central

Bank

struck

a

less

accommodative

tone

at

its

February

meeting,

acknowledging

that

inflation

has

been

more

persistent

than

expected

and

opening

the

possibility

of

an

interest-rate

increase

in

2022.

Stocks

of

companies

with

exposure

to

Russia,

particularly

banks,

endured

further

declines

late

in

the

reporting

period.

Consequently,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

-6.70%

total

return

for

the

six

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-9.34%

total

return

for

the

six-month

period.

1

Although

China’s

economy

continued

to

grow,

it

was

pressured

by

COVID-19

restrictions

and

government

measures

to

limit

real

estate

speculation.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

investor

concerns

about

the

solvency

of

several

large

Chinese

property

developers

further

pressured

Asian

stocks

during

the

six-

month

period.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-9.81%

total

return

for

the

six

months

under

review.

1

Rising

interest

rates

and

elevated

inflation

dampened

investor

enthusiasm

in

global

emerging

market

equities.

Geopolitical

instability

drove

strength

in

the

U.S.

dollar,

further

pressuring

stocks

in

emerging

market

countries,

especially

Russia

as

the

ruble

plunged

against

the

U.S.

dollar.

Interest-rate

increases

to

curb

inflation

by

several

central

banks,

including

those

of

Brazil

and

Mexico,

as

well

as

the

international

sanctions

on

Russia,

raised

investor

concerns

about

a

slowdown

in

economic

growth.

Investment

Strategy

Our

investment

strategy

employs

a

bottom-up,

value-

oriented,

long-term

approach.

We

focus

on

the

market

price

of

a

company’s

securities

relative

to

our

evaluation

of

the

company’s

long-term

earnings,

asset

value

and

cash

flow

potential.

Our

analysis

includes

an

assessment

of

the

potential

impacts

of

material

environmental,

social

and

governance

(ESG)

factors

on

the

long-term

risk

and

return

profile

of

a

company.

We

also

consider

the

company’s

price/

earnings

ratio,

price/cash

flow

ratio,

profit

margins

and

liquidation

value.

The

Fund

may

use

a

variety

of

equity-related

derivatives,

which

may

include

equity

futures

and

equity

index

futures,

for

various

purposes

including

enhancing

Fund

returns,

increasing

liquidity

and

gaining

exposure

to

particular

markets

in

more

efficient

or

less

expensive

ways.

The

Fund

also

may

from

time

to

time

engage

in

currency-related

derivatives,

such

as

currency

and

cross-currency

forwards

and

currency

futures

contracts,

to

hedge

some

of

its

foreign

currency

exposure.

Manager’s

Discussion

Templeton

World

Fund

underperformed

its

benchmark,

the

MSCI

ACWI-NR,

during

the

semiannual

review

period,

pressured

primarily

by

stock-specific

weakness

in

the

consumer

discretionary

sector

and

in

Europe.

Stock-specific

issues

in

materials

and

an

unfavorable

underweighting

in

financials

also

negatively

impacted

performance.

On

the

other

hand,

the

Fund

benefited

from

an

overweighted

allocation

to

energy

at

a

time

when

oil

rallied

above

$100

per

barrel,

as

well

as

stock

selection

(i.e.,

the

avoidance

of

the

most

expensive

and

vulnerable

stocks)

in

information

Top

10

Industries

2/28/22

%

of

Total

Net

Assets

a

Internet

&

Direct

Marketing

Retail

8.5%

Semiconductors

&

Semiconductor

Equipment

7.4%

Beverages

6.8%

Pharmaceuticals

6.6%

Hotels,

Restaurants

&

Leisure

5.6%

Interactive

Media

&

Services

4.7%

Health

Care

Equipment

&

Supplies

4.7%

IT

Services

3.9%

Technology

Hardware,

Storage

&

Peripherals

3.4%

Health

Care

Providers

&

Services

3.2%

Templeton

World

Fund

5

franklintempleton.com

Semiannual

Report

technology

(IT)

and

communication

services,

formerly

well-

performing

sectors

that

sold

off

sharply

during

the

review

period.

Templeton

World

Fund

is

evolving

toward

a

more

focused

(40-50

stocks),

unhedged

global

equity

strategy

with

a

greater

emphasis

on

quality

stocks.

As

part

of

this

evolution,

the

Fund’s

primary

benchmark

changed

from

the

MSCI

ACWI

100%

Hedged

to

USD-NR

to

the

MSCI

ACWI-NR.

However,

no

other

investment

strategies

of

the

Fund

are

changing

and

the

Fund

will

retain

the

flexibility

to

invest

in

U.S.

and

foreign

(both

developed

and

emerging

markets)

companies

of

any

capitalization

range.

This

transition

has

been

underway

for

several

months

and

is

nearing

completion.

The

market

environment

during

the

review

period

was

quite

favorable

for

the

repositioning,

as

a

number

of

higher

quality

stocks

with

attractive

longer-term

growth

prospects

have

sold

off

indiscriminately,

creating

what

we

believe

are

buying

opportunities.

The

period

encompassed

what

we

viewed

as

a

meaningful

inflection

point

in

markets.

After

several

months

of

more

persistent

and

higher-than-expected

inflation,

in

November

2021

the

Fed

signaled

a

more

hawkish

position,

including

likely

interest

rate

hikes

and

the

gradual

phasing

out

of

asset

purchases

known

as

quantitative

easing.

The

policy

pivot

pushed

bond

yields

higher,

steepening

key

yield

curves

and

benefiting

value-oriented

sectors

with

positive

interest

rate

exposure

(like

financials)

and

inflation

hedge

characteristics

(like

energy

and

materials).

At

the

same

time,

the

erstwhile

leaders

of

the

last

market

cycle—expensive,

growth-oriented

stocks

in

areas

like

technology,

consumer

discretionary

and

media

and

entertainment—sold

off

sharply.

Overall,

investors

seemed

to

be

refocusing

on

fundamental

and

quality

characteristics

and

de-emphasizing

the

speculative

extrapolation

of

revenue

growth

trends,

an

about-face

that

began

to

benefit

Templeton’s

strategies

given

our

emphasis

on

rigorous

fundamental

analysis

and

valuation

discipline.

While

the

Fund

underperformed

during

the

six-month

period

overall,

relative

performance

began

to

improve

significantly

after

the

policy

pivot

in

late

November

2021.

In

fact,

the

first

two

months

of

2022

saw

Templeton

World

Fund’s

best

start

to

a

year

since

2004.

An

overweighted

allocation

and

stock-specific

issues

in

the

consumer

discretionary

sector

were

the

primary

drags

on

relative

performance

at

the

sector

level.

European

food-

delivery

platform

Just

Eat

Takeaway.com

was

the

Fund’s

biggest

individual

relative

detractor.

The

stock

remained

under

pressure

amid

concerns

about

competition

and

profitability,

and

this

remains

a

“show-me”

story

going

forward.

Investors

will

want

to

see

the

strategic

divestiture

of

certain

assets

(which

management

is

exploring),

more

consistency

hitting

guidance

targets,

and

an

improving

competitive

environment

that

shifts

from

“growth

at

any

cost”

to

“profitable

growth.”

We

see

numerous

catalysts

that

should

help

Just

Eat

achieve

these

goals,

creating

considerable

upside

potential

from

current

depressed

valuation

levels.

While

we

view

management’s

intentions

as

credible,

we

are

also

in

the

process

of

directly

expressing

our

views

on

how

the

company

can

unlock

value

to

Just

Eat’s

chairman

and

supervisory

board.

Offsetting

Just

Eat

within

the

consumer

discretionary

sector

was

U.S.-based

discount

grocer

Dollar

Tree.

Shares

were

up

more

than

50%

during

the

six-month

period

and

the

stock

finished

as

the

Fund’s

top

relative

performer.

Management

reported

inline

results,

successfully

raised

prices

and

engaged

with

activist

shareholders

seeking

to

unlock

value,

all

of

which

led

to

a

raft

of

analyst

upgrades.

Materials

stocks

were

led

lower

by

Belgian

specialty

chemicals

firm

Umicore.

The

company,

which

operates

a

scrap

recycling

business

and

makes

cathodes

for

batteries

as

well

as

catalysts

for

internal

combustion

engine

vehicles,

issued

two

consecutive

profit

warnings

at

the

end

of

2021.

These

unexpected

warnings

underscored

a

loss

of

technology

leadership

in

cathode

materials

(which

will

negatively

impact

growth

and

margins)

and

raised

questions

about

management’s

ability

to

execute.

Those

concerns,

combined

with

an

elevated

earnings

profile

in

the

cyclical

scrap

metals

recycling

business

given

high

Top

10

Holdings

2/28/22

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Amazon.com,

Inc.

4.4%

Internet

&

Direct

Marketing

Retail,

United

States

Samsung

Electronics

Co.

Ltd.

3.4%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

UnitedHealth

Group,

Inc.

3.2%

Health

Care

Providers

&

Services,

United

States

T-Mobile

US,

Inc.

3.2%

Wireless

Telecommunication

Services,

United

States

Walt

Disney

Co.

(The)

3.2%

Entertainment,

United

States

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

3.0%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Roche

Holding

AG

2.8%

Pharmaceuticals,

Switzerland

Keurig

Dr

Pepper,

Inc.

2.8%

Beverages,

United

States

Medtronic

plc

2.7%

Health

Care

Equipment

&

Supplies,

United

States

Alphabet,

Inc.

2.6%

Interactive

Media

&

Services,

United

States

Templeton

World

Fund

6

franklintempleton.com

Semiannual

Report

commodity

prices,

caused

us

to

reevaluate

our

investment

thesis.

We

exited

the

stock

in

November

2021,

and

the

company

went

on

to

significantly

underperform

the

market

in

the

subsequent

three-month

period.

Offsetting

Umicore’s

weakness

within

the

materials

sector

was

strength

at

Freeport-McMoRan,

the

world’s

largest

copper

producer

and

a

top-10

contributor

during

the

month.

We

have

been

encouraged

to

see

our

copper

thesis

come

to

fruition

as

structurally

constrained

global

supply

meets

elevated

demand

from

infrastructure

and

building

projects

as

well

as

“green”

applications

like

electric

vehicles

and

smart

power

grids.

Financials

holdings

also

detracted,

pressured

by

our

underweighted

allocation

to

a

sector

that

held

up

well

on

rising

expectations

for

higher

interest

rates.

We

have

long

been

underweighting

the

sector

given

concerns

about

credit

risk

and

poor

earnings

quality.

With

the

shift

in

the

Fund’s

strategy

towards

quality

companies

that

are

resilient

in

most

economic

cycles,

we

are

not

compelled

to

participate

in

the

financial

sector

given

the

sensitivity

of

the

stocks

to

macroeconomic

variables

that

are

hard

to

forecast.

Given

the

lack

of

structural

change

in

the

banking

industry,

we

believe

the

banks

carry

cycle

risk

without

a

commensurate

return

during

the

good

periods.

Our

light

positioning

negatively

impacted

relative

returns

during

the

semiannual

review

period.

Turning

to

contributors,

stock

selection

in

the

IT

sector

aided

relative

performance

during

the

period.

Shares

of

U.S.-based

semiconductor

specialist

Micron

Technology

rose

to

all-time

highs

as

the

combination

of

supply

shortages

and

capacity

discipline

created

a

favorable

pricing

environment

for

the

chipmaker.

Micron

remains

well-positioned

in

an

oligopolistic

memory

chip

market,

with

a

strong

operating

track

record

and

consistent

history

of

prodigious

positive

free

cash

flow

generation.

Energy

holdings

also

outperformed,

accounting

for

two

of

the

Fund’s

10

biggest

contributors.

The

sector

was

led

by

U.S.

refiner

Marathon

Petroleum,

which

rallied

after

beating

earnings

estimates,

buoyed

by

stronger-than-expected

refining

results

and

the

authorization

of

a

multibillion

U.S.

dollar

share

buyback.

U.K.-based

oil

and

gas

giant

BP

also

finished

among

the

Fund’s

top-10

contributors.

We

are

maintaining

our

energy

position

given

what

we

believe

are

multi-year

structural

changes

to

the

sector.

Supply-and-

demand

imbalances

continue

to

increase,

stemming

from

years

of

under-investment

in

production

on

the

supply

side

and

a

likely

slower-than-expected

transition

to

renewables

supporting

hydrocarbon

demand.

Communication

services

and

health

care

stocks

also

outperformed

slightly

during

the

period.

Furthermore,

the

Fund’s

elevated

cash

position

positively

contributed

in

a

broadly

weak

market.

From

a

regional

standpoint,

relative

weakness

was

concentrated

in

the

U.K.,

Japan

and

Canada,

while

Taiwan,

South

Korea,

Norway

and

the

Netherlands

were

all

notable

contributors.

The

catalyst

for

the

market

rotation

was,

first,

the

Fed’s

hawkish

policy

pivot,

and

second,

Russia’s

invasion

of

Ukraine

late

in

the

period,

which

sparked

a

risk-off

event

across

asset

classes.

The

Fund

has

no

direct

exposure

(and

little

indirect

exposure)

to

Russia.

We

have

not

found

attractive

opportunities

in

Russian

equities

given

heightened

corporate

governance

concerns

and

geopolitical

risks.

Nevertheless,

the

impact

of

war

in

Europe

is

creating

volatility

in

all

risk

assets.

While

the

near-term

impact

of

war

in

Europe

will

likely

be

negative

for

financial

markets

(as

well

as

a

tragic

humanitarian

crisis),

it

also

accelerates

the

move

away

from

the

low

interest

rate,

low

inflation,

benign

economic

environment

that

favored

expensive

growth

stocks

in

the

past

cycle.

We

have

continued

to

see

risks

in

both

tails

of

the

market’s

valuation

distribution:

valuation

risk

among

expensive

growth

stocks

and

credit

risk

among

lower

quality

value

stocks.

We

have

viewed

the

recent

leadership

off

these

market

extremes

as

unsustainable

and

have

tried

to

manage

the

portfolio

toward

a

better

balance

of

quality,

earnings

growth

and

valuation.

It

is

important

to

recognize

the

effect

of

currency

movements

on

the

Fund’s

performance.

In

general,

if

the

value

of

the

U.S.

dollar

goes

up

compared

with

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

go

down

in

value

because

it

will

be

worth

fewer

U.S.

dollars.

This

can

have

a

negative

effect

on

Fund

performance.

Conversely,

Top

10

Countries

2/28/22

a

%

of

Total

Net

Assets

a

a

United

States

54.8%

United

Kingdom

11.2%

Germany

5.7%

Japan

4.4%

France

3.5%

South

Korea

3.4%

Taiwan

3.0%

Switzerland

2.8%

Belgium

2.6%

Hong

Kong

2.5%

Templeton

World

Fund

7

franklintempleton.com

Semiannual

Report

when

the

U.S.

dollar

weakens

in

relation

to

a

foreign

currency,

an

investment

traded

in

that

foreign

currency

will

increase

in

value,

which

can

contribute

to

Fund

performance.

For

the

six

months

ended

February

28,

2022,

the

U.S.

dollar

rose

in

value

relative

to

most

currencies.

As

a

result,

the

Fund’s

performance

was

negatively

affected

by

the

portfolio’s

significant

investment

in

securities

with

non-U.S.

currency

exposure.

Thank

you

for

your

continued

participation

in

Templeton

World

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Warren

Pustam,

CFA

Lead

Portfolio

Manager

Herbert

J.

Arnett,

Jr.

Christopher

James

Peel,

CFA

Peter

M.

Moeschter,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

February

28,

2022,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

February

28,

2022

Templeton

World

Fund

8

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

2/28/22

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

5.50%

and

the

minimum

is

0%.

Class

A

:

5.50%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

1

Average

Annual

Total

Return

2

–

A

3

6-Month

-7.13%

-12.23%

1-Year

-0.80%

-6.29%

5-Year

+17.99%

+2.20%

10-Year

+73.40%

+5.06%

Advisor

6-Month

-7.01%

-7.01%

1-Year

-0.54%

-0.54%

5-Year

+19.53%

+3.63%

10-Year

+77.77%

+5.92%

See

page

9

for

Performance

Summary

footnotes.

Templeton

World

Fund

Performance

Summary

9

franklintempleton.com

Semiannual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

possible

loss

of

principal.

Special

risks

are

associated

with

foreign

investing,

including

currency

fluctuations,

economic

instability

and

political

developments;

investments

in

developing

markets

involve

heightened

risks

related

to

the

same

factors.

Currency

rates

may

fluctuate

significantly

over

short

periods

of

time,

and

can

reduce

returns.

Because

the

Fund

may

invest

its

assets

in

companies

in

a

specific

region,

including

Europe,

it

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

a

fund

that

is

more

broadly

diversified

geographically.

Current

political

and

financial

uncertainty

concerning

the

economic

consequences

of

the

departure

of

the

U.K.

from

the

European

Union

may

increase

market

volatility.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

enable

gains)

on

an

amount

that

exceeds

the

Fund’s

initial

investment.

The

Fund

may

not

achieve

the

anticipated

benefits,

and

may

realize

losses

when

a

counterparty

fails

to

perform

as

promised.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

3.

Prior

to

9/10/18

these

shares

were

offered

at

a

higher

initial

sales

charge

of

5.75%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

5.50%.

4.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(9/1/21–2/28/22)

Share

Class

Net

Investment

Income

A

$0.2303

C

$0.0702

R6

$0.2751

Advisor

$0.2690

Total

Annual

Operating

Expenses

4

Share

Class

A

1.05%

Advisor

0.80%

Your

Fund’s

Expenses

Templeton

World

Fund

10

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

181/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

9/1/21

Ending

Account

Value

2/28/22

Expenses

Paid

During

Period

9/1/21–2/28/22

1,2

Ending

Account

Value

2/28/22

Expenses

Paid

During

Period

9/1/21–2/28/22

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$928.70

$4.97

$1,019.64

$5.21

1.04%

C

$1,000

$925.30

$8.58

$1,015.88

$8.99

1.80%

R6

$1,000

$930.20

$3.63

$1,021.04

$3.80

0.76%

Advisor

$1,000

$929.90

$3.82

$1,020.84

$4.00

0.80%

Templeton

Funds

Financial

Highlights

Templeton

World

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

11

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$15.52

$12.71

$12.76

$17.24

$16.94

$15.47

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(0.02)

0.20

c

0.16

0.29

0.28

0.27

Net

realized

and

unrealized

gains

(losses)

(1.09)

2.61

0.45

(2.17)

1.03

2.21

Total

from

investment

operations

........

(1.11)

2.81

0.61

(1.88)

1.31

2.48

Less

distributions

from:

Net

investment

income

..............

(0.23)

—

(0.50)

(0.67)

(0.02)

(0.57)

Net

realized

gains

.................

—

—

(0.16)

(1.93)

(0.99)

(0.44)

Total

distributions

...................

(0.23)

—

(0.66)

(2.60)

(1.01)

(1.01)

Net

asset

value,

end

of

period

..........

$14.18

$15.52

$12.71

$12.76

$17.24

$16.94

Total

return

d

.......................

(7.13)%

22.11%

4.47%

(10.22)%

7.81%

16.45%

Ratios

to

average

net

assets

e

Expenses

.........................

1.04%

1.03%

f

1.05%

1.05%

f

1.04%

g

1.06%

f,g

Net

investment

income

(loss)

..........

(0.23)%

1.42%

c

1.29%

2.06%

1.64%

1.63%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,690,812

$3,060,714

$2,831,844

$3,150,057

$3,973,648

$4,240,117

Portfolio

turnover

rate

................

48.08%

41.83%

52.25%

25.16%

28.39%

31.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.48%.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Templeton

Funds

Financial

Highlights

Templeton

World

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

12

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$14.76

$12.18

$12.26

$16.35

$16.21

$14.84

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(0.07)

0.10

c

0.07

0.13

0.14

0.14

Net

realized

and

unrealized

gains

(losses)

(1.04)

2.48

0.42

(2.01)

0.99

2.12

Total

from

investment

operations

........

(1.11)

2.58

0.49

(1.88)

1.13

2.26

Less

distributions

from:

Net

investment

income

..............

(0.07)

—

(0.41)

(0.28)

—

(0.45)

Net

realized

gains

.................

—

—

(0.16)

(1.93)

(0.99)

(0.44)

Total

distributions

...................

(0.07)

—

(0.57)

(2.21)

(0.99)

(0.89)

Net

asset

value,

end

of

period

..........

$13.58

$14.76

$12.18

$12.26

$16.35

$16.21

Total

return

d

.......................

(7.47)%

21.18%

3.61%

(10.94)%

7.01%

15.59%

Ratios

to

average

net

assets

e

Expenses

.........................

1.80%

1.80%

f

1.82%

1.80%

f

1.80%

g

1.81%

f,g

Net

investment

income

(loss)

..........

(0.99)%

0.70%

c

0.54%

1.31%

0.88%

0.88%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$10,196

$12,585

$18,630

$28,850

$117,879

$138,534

Portfolio

turnover

rate

................

48.08%

41.83%

52.25%

25.16%

28.39%

31.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

(0.24)%.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

f

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Templeton

Funds

Financial

Highlights

Templeton

World

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

13

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$15.53

$12.69

$12.73

$17.21

$16.92

$15.45

Income

from

investment

operations

a

:

Net

investment

income

b

.............

—

c

0.24

d

0.20

0.34

0.33

0.32

Net

realized

and

unrealized

gains

(losses)

(1.08)

2.60

0.45

(2.17)

1.03

2.22

Total

from

investment

operations

........

(1.08)

2.84

0.65

(1.83)

1.36

2.54

Less

distributions

from:

Net

investment

income

..............

(0.28)

—

(0.53)

(0.72)

(0.08)

(0.63)

Net

realized

gains

.................

—

—

(0.16)

(1.93)

(0.99)

(0.44)

Total

distributions

...................

(0.28)

—

(0.69)

(2.65)

(1.07)

(1.07)

Net

asset

value,

end

of

period

..........

$14.17

$15.53

$12.69

$12.73

$17.21

$16.92

Total

return

e

.......................

(6.98)%

22.38%

4.71%

(9.88)%

8.13%

16.87%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.78%

0.78%

0.79%

0.77%

0.74%

0.73%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.76%

0.76%

0.76%

0.75%

0.72%

g

0.73%

g,h

Net

investment

income

...............

0.06%

1.68%

d

1.59%

2.36%

1.96%

1.96%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$41,228

$42,010

$38,885

$43,595

$51,431

$55,504

Portfolio

turnover

rate

................

48.08%

41.83%

52.25%

25.16%

28.39%

31.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.74%.

e

Total

return

is

not

annualized

for

periods

less

than

one

year.

f

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

g

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

h

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

Templeton

Funds

Financial

Highlights

Templeton

World

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

14

a

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$15.54

$12.70

$12.74

$17.23

$16.93

$15.46

Income

from

investment

operations

a

:

Net

investment

income

b

.............

—

c

0.24

d

0.19

0.33

0.32

0.32

Net

realized

and

unrealized

gains

(losses)

(1.09)

2.60

0.45

(2.17)

1.03

2.20

Total

from

investment

operations

........

(1.09)

2.84

0.64

(1.84)

1.35

2.52

Less

distributions

from:

Net

investment

income

..............

(0.27)

—

(0.52)

(0.72)

(0.06)

(0.61)

Net

realized

gains

.................

—

—

(0.16)

(1.93)

(0.99)

(0.44)

Total

distributions

...................

(0.27)

—

(0.68)

(2.65)

(1.05)

(1.05)

Net

asset

value,

end

of

period

..........

$14.18

$15.54

$12.70

$12.74

$17.23

$16.93

Total

return

e

.......................

(7.01)%

22.36%

4.66%

(9.99)%

8.09%

16.74%

Ratios

to

average

net

assets

f

Expenses

.........................

0.80%

0.80%

g

0.81%

0.80%

g

0.80%

h

0.81%

g,h

Net

investment

income

...............

0.02%

1.64%

d

1.53%

2.31%

1.88%

1.88%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$106,716

$115,823

$99,546

$112,891

$146,883

$157,237

Portfolio

turnover

rate

................

48.08%

41.83%

52.25%

25.16%

28.39%

31.46%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Amount

rounds

to

less

than

$0.01

per

share.

d

Net

investment

income

per

share

includes

approximately

$0.13

per

share

related

to

an

adjustment

for

EU

reclaims

in

connection

with

certain

Fund

holdings.

Excluding

this

amount,

the

ratio

of

net

investment

income

to

average

net

assets

would

have

been

0.70%.

e

Total

return

is

not

annualized

for

periods

less

than

one

year.

f

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

g

Benefit

of

waiver

and

payments

by

affiliates

rounds

to

less

than

0.01%.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Templeton

Funds

Statement

of

Investments

(unaudited),

February

28,

2022

Templeton

World

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

15

a

a

Industry

Shares

a

Value

a

Common

Stocks

98.2%

Belgium

2.6%

Anheuser-Busch

InBev

SA/NV

......

Beverages

1,180,760

$

72,845,933

China

2.4%

NXP

Semiconductors

NV

..........

Semiconductors

&

Semiconductor

Equipment

189,738

36,072,988

a

Prosus

NV

.....................

Internet

&

Direct

Marketing

Retail

540,765

33,564,090

69,637,078

France

3.5%

LVMH

Moet

Hennessy

Louis

Vuitton

SE

Textiles,

Apparel

&

Luxury

Goods

74,810

54,965,994

Pernod

Ricard

SA

................

Beverages

198,916

43,413,768

98,379,762

Germany

5.7%

Deutsche

Boerse

AG

..............

Capital

Markets

352,530

59,995,275

E.ON

SE

.......................

Multi-Utilities

3,031,820

41,228,259

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

855,659

28,945,560

Siemens

AG

....................

Industrial

Conglomerates

227,496

32,043,047

162,212,141

Hong

Kong

2.5%

AIA

Group

Ltd.

..................

Insurance

6,988,604

72,569,044

Ireland

1.9%

a

ICON

plc

.......................

Life

Sciences

Tools

&

Services

230,940

54,966,029

a

Japan

4.4%

Fujitsu

Ltd.

.....................

IT

Services

252,180

36,640,926

Honda

Motor

Co.

Ltd.

.............

Automobiles

1,428,555

43,404,576

Sony

Group

Corp.

................

Household

Durables

457,870

46,785,656

126,831,158

South

Korea

3.4%

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

1,608,660

96,932,476

Switzerland

2.8%

Roche

Holding

AG

...............

Pharmaceuticals

213,811

80,968,586

Taiwan

3.0%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

......................

Semiconductors

&

Semiconductor

Equipment

3,918,809

84,303,783

United

Kingdom

11.2%

AstraZeneca

plc

.................

Pharmaceuticals

518,949

63,066,954

BAE

Systems

plc

................

Aerospace

&

Defense

4,693,668

45,057,134

BP

plc

.........................

Oil,

Gas

&

Consumable

Fuels

8,255,226

40,230,926

Compass

Group

plc

..............

Hotels,

Restaurants

&

Leisure

1,808,196

40,864,666

a

Farfetch

Ltd.,

A

..................

Internet

&

Direct

Marketing

Retail

1,244,340

23,704,677

a,b

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

...........................

Internet

&

Direct

Marketing

Retail

1,430,592

57,886,268

a

Rolls-Royce

Holdings

plc

..........

Aerospace

&

Defense

19,190,798

26,469,032

Unilever

plc

.....................

Personal

Products

414,600

20,797,730

318,077,387

United

States

54.8%

Albemarle

Corp.

.................

Chemicals

152,445

29,862,451

a

Alphabet,

Inc.,

A

.................

Interactive

Media

&

Services

27,180

73,416,985

a

Amazon.com,

Inc.

................

Internet

&

Direct

Marketing

Retail

41,216

126,585,052

American

Express

Co.

............

Consumer

Finance

337,159

65,590,912

a

Booking

Holdings,

Inc.

............

Hotels,

Restaurants

&

Leisure

33,025

71,738,556

Comcast

Corp.,

A

................

Media

1,229,129

57,474,072

Templeton

Funds

Statement

of

Investments

(unaudited)

Templeton

World

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

United

States

(continued)

a

Dollar

Tree,

Inc.

.................

Multiline

Retail

283,624

$

40,297,298

DuPont

de

Nemours,

Inc.

..........

Chemicals

453,917

35,119,558

a

DXC

Technology

Co.

..............

IT

Services

1,460,902

49,714,495

a

F5,

Inc.

........................

Communications

Equipment

130,570

26,224,985

Freeport-McMoRan,

Inc.

...........

Metals

&

Mining

682,407

32,039,009

Honeywell

International,

Inc.

........

Industrial

Conglomerates

129,728

24,615,888

Johnson

&

Johnson

..............

Pharmaceuticals

265,801

43,742,871

Keurig

Dr

Pepper,

Inc.

.............

Beverages

2,030,350

78,513,635

Lear

Corp.

.....................

Auto

Components

245,812

38,676,060

Marathon

Petroleum

Corp.

.........

Oil,

Gas

&

Consumable

Fuels

490,313

38,180,673

Medtronic

plc

...................

Health

Care

Equipment

&

Supplies

732,733

76,929,638

a

Meta

Platforms,

Inc.,

A

............

Interactive

Media

&

Services

91,239

19,254,166

Micron

Technology,

Inc.

............

Semiconductors

&

Semiconductor

Equipment

682,436

60,641,263

a

Snap,

Inc.,

A

....................

Interactive

Media

&

Services

1,050,480

41,956,171

Starbucks

Corp.

.................

Hotels,

Restaurants

&

Leisure

495,700

45,500,303

TJX

Cos.,

Inc.

(The)

..............

Specialty

Retail

509,659

33,688,460

a

T-Mobile

US,

Inc.

................

Wireless

Telecommunication

Services

739,231

91,080,652

a

Twilio

,

Inc.,

A

....................

IT

Services

147,210

25,732,308

a

Uber

Technologies,

Inc.

............

Road

&

Rail

816,380

29,414,171

UnitedHealth

Group,

Inc.

...........

Health

Care

Providers

&

Services

193,782

92,215,040

a

Walt

Disney

Co.

(The)

.............

Entertainment

613,364

91,060,019

Westinghouse

Air

Brake

Technologies

Corp.

........................

Machinery

700,578

65,027,650

Zimmer

Biomet

Holdings,

Inc.

.......

Health

Care

Equipment

&

Supplies

440,817

56,067,514

1,560,359,855

Total

Common

Stocks

(Cost

$2,472,083,148)

....................................

2,798,083,232

Short

Term

Investments

2.2%

a

a

Principal

Amount

*

a

Value

a

a

a

a

a

a

Time

Deposits

2.2%

Canada

0.9%

National

Bank

of

Canada,

0.06%,

3/01/22

......................

26,400,000

26,400,000

France

1.3%

Credit

Agricole

Corporate

and

Investment

Bank

SA,

0.07%,

3/01/22

35,000,000

35,000,000

Total

Time

Deposits

(Cost

$61,400,000)

........................................

61,400,000

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$61,400,000

)

................................

61,400,000

a

a

a

Total

Investments

(Cost

$2,533,483,148)

100.4%

................................

$2,859,483,232

Other

Assets,

less

Liabilities

(0.4)%

...........................................

(10,531,379)

Net

Assets

100.0%

...........................................................

$2,848,951,853

a

a

a

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

February

28,

2022,

the

value

of

this

security

was

$57,886,268,

representing

2.0%

of

net

assets.

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

February

28,

2022

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

Templeton

World

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$2,533,483,148

Value

-

Unaffiliated

issuers

..................................................................

$2,859,483,232

Cash

....................................................................................

43,874

Foreign

currency,

at

value

(cost

$303,755)

........................................................

340,813

Receivables:

Investment

securities

sold

...................................................................

2,797,920

Capital

shares

sold

........................................................................

651,513

Dividends

and

interest

.....................................................................

6,184,542

European

Union

tax

reclaims

(Note

1

e

)

.........................................................

893,942

Total

assets

..........................................................................

2,870,395,836

Liabilities:

Payables:

Investment

securities

purchased

..............................................................

2,952,696

Capital

shares

redeemed

...................................................................

2,351,485

Management

fees

.........................................................................

1,551,606

Distribution

fees

..........................................................................

535,189

Transfer

agent

fees

........................................................................

237,359

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

e

)

.............................

13,245,674

Accrued

expenses

and

other

liabilities

...........................................................

569,974

Total

liabilities

.........................................................................

21,443,983

Net

assets,

at

value

.................................................................

$2,848,951,853

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$2,564,011,072

Total

distributable

earnings

(losses)

.............................................................

284,940,781

Net

assets,

at

value

.................................................................

$2,848,951,853

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

February

28,

2022

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

Templeton

World

Fund

Class

A:

Net

assets,

at

value

.......................................................................

$2,690,811,862

Shares

outstanding

........................................................................

189,722,672

Net

asset

value

per

share

a

..................................................................

$14.18

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

................................

$15.01

Class

C:

Net

assets,

at

value

.......................................................................

$10,195,901

Shares

outstanding

........................................................................

750,904

Net

asset

value

and

maximum

offering

price

per

share

a

.............................................

$13.58

Class

R6:

Net

assets,

at

value

.......................................................................

$41,228,008

Shares

outstanding

........................................................................

2,910,330

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$14.17

Advisor

Class:

Net

assets,

at

value

.......................................................................

$106,716,082

Shares

outstanding

........................................................................

7,526,862

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$14.18

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Templeton

Funds

Financial

Statements

Statement

of

Operations

for

the

six

months

ended

February

28,

2022

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

19

Templeton

World

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,142,979)

Unaffiliated

issuers

........................................................................

$15,517,389

Interest:

Unaffiliated

issuers

........................................................................

43,240

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

351

Other

income

(Note

1

e

)

......................................................................

193,097

Less:

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

e

)

..........................

(3,336,336)

Total

investment

income

...................................................................

12,417,741

Expenses:

Management

fees

(Note

3

a

)

...................................................................

10,608,159

Distribution

fees:

(Note

3c

)

    Class

A

................................................................................

3,483,812

    Class

C

................................................................................

57,168

Transfer

agent

fees:

(Note

3e

)

    Class

A

................................................................................

1,017,415

    Class

C

................................................................................

4,027

    Class

R6

...............................................................................

10,847

    Advisor

Class

............................................................................

39,427

Custodian

fees

.............................................................................

61,573

Reports

to

shareholders

fees

..................................................................

119,063

Registration

and

filing

fees

....................................................................

41,893

Professional

fees

...........................................................................

26,738

Trustees'

fees

and

expenses

..................................................................

106,768

Other

....................................................................................

135,990

Total

expenses

.........................................................................

15,712,880

Expenses

waived/paid

by

affiliates

(Note

3f)

....................................................

(4,512)

Net

expenses

.........................................................................

15,708,368

Net

investmen

t

income

(loss)

............................................................

(3,290,627)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

157,015,877

Foreign

currency

transactions

................................................................

(366,992)

Forward

exchange

contracts

.................................................................

15,752,137

Net

realized

gain

(loss)

..................................................................

172,401,022

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(393,619,102)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(560,233)

Forward

exchange

contracts

.................................................................

1,232,490

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(392,946,845)

Net

realized

and

unrealized

gain

(loss)

............................................................

(220,545,823)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(223,836,450)

Templeton

Funds

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

Templeton

World

Fund

Six

Months

Ended

February

28,

2022

(unaudited)

Year

Ended

August

31,

2021

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

............................................

$(3,290,627)

$45,221,882

Net

realized

gain

(loss)

.................................................

172,401,022

208,380,573

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(392,946,845)

372,038,154

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(223,836,450)

625,640,609

Distributions

to

shareholders:

Class

A

.............................................................

(44,013,452)

—

Class

C

.............................................................

(55,139)

—

Class

R6

............................................................

(780,101)

—

Advisor

Class

........................................................

(1,988,799)

—

Total

distributions

to

shareholders

..........................................

(46,837,491)

—

Capital

share

transactions:

(Note

2

)

Class

A

.............................................................

(114,243,148)

(364,041,894)

Class

C

.............................................................

(1,458,095)

(9,478,984)

Class

R6

............................................................

3,087,929

(4,859,427)

Advisor

Class

........................................................

1,106,797

(5,032,934)

Total

capital

share

transactions

............................................

(111,506,517)

(383,413,239)

Net

increase

(decrease)

in

net

assets

...................................

(382,180,458)

242,227,370

Net

assets:

Beginning

of

period

.....................................................

3,231,132,311

2,988,904,941

End

of

period

..........................................................

$2,848,951,853

$3,231,132,311

Templeton

Funds

21

franklintempleton.com

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Templeton

World

Fund

1.

Organization

and

Significant

Accounting

Policies

Templeton

Funds (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-end

management

investment

company,

consisting

of three separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

Templeton

World

Fund

(Fund)

is

included

in

this

report.

The

Fund

offers four

classes

of

shares:

Class

A,

Class

C,

Class

R6

and

Advisor

Class. Class

C

shares

automatically

convert

to

Class

A

shares

on

a

monthly

basis,

after

they

have

been

held

for

8

years.

Each

class

of

shares

may

differ

by

its

initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees. 

The

following

summarizes

the Fund's

significant

accounting

policies.

a.

Financial

Instrument

Valuation 

The

Fund's

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Fund

calculates

the

net

asset

value

(NAV)

per

share

each business

day as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the Fund's

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Fund

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Equity

securities

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price of

the

day,

respectively.

Foreign

equity

securities

are

valued

as

of

the

close

of

trading

on

the

foreign

stock

exchange

on

which

the

security

is

primarily

traded,

or

as

of

4

p.m.

Eastern

time.

The

value

is

then

converted

into

its

U.S.

dollar

equivalent

at

the

foreign

exchange

rate

in

effect

at

4

p.m.

Eastern

time

on

the

day

that

the

value

of

the

security

is

determined.

Over-the-counter

(OTC)

securities

are

valued

within

the

range

of

the

most

recent

quoted

bid

and

ask

prices.

Securities

that

trade

in

multiple

markets

or

on

multiple

exchanges

are

valued

according

to

the

broadest

and

most

representative

market.

Certain

equity

securities

are

valued

based

upon

fundamental

characteristics

or

relationships

to

similar

securities. 

Investments

in

open-end

mutual

funds

are

valued

at

the

closing

NAV.

Investments

in

time

deposits

are

valued

at

cost,

which

approximates

fair

value.

Certain

derivative

financial

instruments

trade

in

the

OTC

market.

The

Fund's

pricing

services

use

various

techniques

including

industry

standard

option

pricing

models

and

proprietary

discounted

cash

flow

models

to

determine

the

fair

value

of

those

instruments.

The

Fund's

net

benefit

or

obligation

under

the

derivative

contract,

as

measured

by

the

fair

value

of

the

contract,

is

included

in

net

assets.

The

Fund

has

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the Fund

primarily

employs

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

Trading

in

securities

on

foreign

securities

stock

exchanges

and

OTC

markets

may

be

completed

before

4

p.m.

Eastern

time.

In

addition,

trading

in

certain

foreign

markets

may

not

take

place

on

every

Fund's

business

day.

Events

can

occur

between

the

time

at

which

trading

in

a

foreign

security

is

completed

and

4

p.m.

Eastern

time

that

might

call

into

question

the

reliability

of

the

value

of

a

portfolio

security

held

by

the

Fund.

As

a

result,

differences

may

arise

between

the

value

of

the

Fund's

portfolio

securities

as

determined

at

the

foreign

market

close

and

the

latest

indications

of

value

at

4

p.m.

Eastern

time.

In

order

to

minimize

the

potential

for

these

differences,

an

independent

pricing

service

may

be

used

to

adjust

the

value

of

the

Fund's

portfolio

securities

to

the

latest

indications

of

fair

value

at

4

p.m.

Eastern

time.

At

February

28,

2022,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

22

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

were

categorized

as

Level

2

inputs

within

the

fair

value

hierarchy

(referred

to

as

“market

level

fair

value”).

See

the

Fair

Value

Measurements

note

for

more

information.

When

the

last

day

of

the

reporting

period

is

a

non-business

day,

certain

foreign

markets

may

be

open

on

those

days

that

the

Fund's

NAV

is

not

calculated,

which

could

result

in

differences

between

the

value

of

the

Fund's

portfolio

securities

on

the

last

business

day

and

the

last

calendar

day

of

the

reporting

period.

Any

security

valuation

changes

due

to

an

open

foreign

market

are

adjusted

and

reflected

by

the

Fund

for

financial

reporting

purposes.

b.

Foreign

Currency

Translation 

Portfolio

securities

and

other

assets

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

based

on

the

exchange

rate

of

such

currencies

against

U.S.

dollars

on

the

date

of

valuation.

The

Fund

may

enter

into

foreign

currency

exchange

contracts

to

facilitate

transactions

denominated

in

a

foreign

currency.

Purchases

and

sales

of

securities,

income

and

expense

items

denominated

in

foreign

currencies

are

translated

into

U.S.

dollars

at

the

exchange

rate

in

effect

on

the

transaction

date.

Portfolio

securities

and

assets

and

liabilities

denominated

in

foreign

currencies

contain

risks

that

those

currencies

will

decline

in

value

relative

to

the

U.S.

dollar.

Occasionally,

events

may

impact

the

availability

or

reliability

of

foreign

exchange

rates

used

to

convert

the

U.S.

dollar

equivalent

value.

If

such

an

event

occurs,

the

foreign

exchange

rate

will

be

valued

at

fair

value

using

procedures

established

and

approved

by

the

Board.

The

Fund

does

not

separately

report

the

effect

of

changes

in

foreign

exchange

rates

from

changes

in

market

prices

on

securities

held.

Such

changes

are

included

in

net

realized

and

unrealized

gain

or

loss

from

investments

in

the

Statement of

Operations.

Realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

the

trade

and

settlement

dates

on

securities

transactions

and

the

difference

between

the

recorded

amounts

of

dividends,

interest,

and

foreign

withholding

taxes

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

foreign

exchange

gains

and

losses

arise

from

changes

in

foreign

exchange

rates

on

foreign

denominated

assets

and

liabilities

other

than

investments

in

securities

held

at

the

end

of

the

reporting

period.

c.

Derivative

Financial

Instruments

The

Fund invested

in

derivative

financial

instruments

in

order

to

manage

risk

or

gain

exposure

to

various

other

investments

or

markets.

Derivatives

are

financial

contracts

based

on

an

underlying

or

notional

amount,

require

no

initial

investment

or

an

initial

net

investment

that

is

smaller

than

would

normally

be

required

to

have

a

similar

response

to

changes

in

market

factors,

and

require

or

permit

net

settlement.

Derivatives

contain

various

risks

including

the

potential

inability

of

the

counterparty

to

fulfill

their

obligations

under

the

terms

of

the

contract,

the

potential

for

an

illiquid

secondary

market,

and/or

the

potential

for

market

movements

which

expose

the

Fund

to

gains

or

losses

in

excess

of

the

amounts

shown

in

the

Statement

of

Assets

and

Liabilities.

Realized

gain

and

loss

and

unrealized

appreciation

and

depreciation

on

these

contracts

for

the

period

are

included

in

the

Statement

of

Operations.

Derivative

counterparty

credit

risk

is

managed

through

a

formal

evaluation

of

the

creditworthiness

of

all

potential

counterparties.

The

Fund

attempts

to

reduce its

exposure

to

counterparty

credit

risk

on

OTC

derivatives,

whenever

possible,

by

entering

into

International

Swaps

and

Derivatives

Association

(ISDA)

master

agreements

with

certain

counterparties.

These

agreements

contain

various

provisions,

including

but

not

limited

to

collateral

requirements,

events

of

default,

or

early

termination.

Termination

events

applicable

to

the

counterparty

include

certain

deteriorations

in

the

credit

quality

of

the

counterparty.

Termination

events

applicable

to

the Fund

include

failure

of

the

Fund

to

maintain

certain

net

asset

levels

and/or

limit

the

decline

in

net

assets

over

various

periods

of

time.

In

the

event

of

default

or

early

termination,

the

ISDA

master

agreement

gives

the

non-defaulting

party

the

right

to

net

and

close-out

all

transactions

traded,

whether

or

not

arising

under

the

ISDA

agreement,

to

one

net

amount

payable

by

one

counterparty

to

the

other.

However,

absent

an

event

of

default

or

early

termination,

OTC

derivative

assets

and

liabilities

are

presented

gross

and

not

offset

in

the

Statement

of

Assets

and

Liabilities.

Early

termination

by

the

counterparty

may

result

in

an

immediate

payment

by

the

Fund

of

any

net

liability

owed

to

that

counterparty

under

the

ISDA

agreement.

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

23

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

Collateral

requirements

differ

by

type

of

derivative.

Collateral

terms

are

contract

specific

for

OTC

derivatives.

For

OTC

derivatives

traded

under

an

ISDA

master

agreement,

posting

of

collateral

is

required

by

either

the

Fund

or

the

applicable

counterparty

if

the

total

net

exposure

of

all

OTC

derivatives

with

the

applicable

counterparty

exceeds

the

minimum

transfer

amount,

which

typically

ranges

from

$100,000

to

$250,000,

and

can

vary

depending

on

the

counterparty

and

the

type

of

agreement.

Generally,

collateral

is

determined

at

the

close

of

Fund

business

each

day

and

any

additional

collateral

required

due

to

changes

in

derivative

values

may

be

delivered

by

the

Fund

or

the

counterparty

the

next

business

day,

or

within

a

few

business

days.

Collateral

pledged

and/or

received

by

the

Fund,

if

any,

is

held

in

segregated

accounts

with

the

Fund’s

custodian/counterparty

broker

and

can

be

in

the

form

of

cash

and/or

securities.

Unrestricted

cash

may

be

invested

according

to

the

Fund's

investment

objectives.

To

the

extent

that

the

amounts

due

to

the

Fund

from

its

counterparties

are

not

subject

to

collateralization

or

are

not

fully

collateralized,

the

Fund

bears

the

risk

of

loss

from

counterparty

non-performance. 

The

Fund

entered

into

OTC

forward

exchange

contracts

primarily

to

manage

and/or

gain

exposure

to

certain

foreign

currencies.

A

forward

exchange

contract

is

an

agreement

between

the

Fund

and

a

counterparty

to

buy

or

sell

a

foreign

currency

at

a

specific

exchange

rate

on

a

future

date.

See

Note

9

regarding

other

derivative

information.

d.

Securities

Lending

The

Fund

participates

in

an

agency

based

securities

lending

program

to

earn

additional

income.

The

Fund

receives

collateral

in

the

form

of

cash

and/or

U.S.

Government

and

Agency

securities

against

the

loaned

securities

in

an

amount

equal

to

at

least

102%

of

the

fair

value

of

the

loaned

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

100%

of

the

fair

value

of

loaned

securities,

as

determined

at

the

close

of

Fund

business

each

day;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

Fund

on

the

next

business

day.

Any

cash

collateral

received

is

deposited

into

a

joint

cash

account

with

other

funds

and

is

used

to

invest

in

a

money

market

fund

managed

by

Franklin

Advisers,

Inc.,

an

affiliate

of

the Fund.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

paid

by

the

borrower.

Income

from

securities

loaned,

net

of

fees

paid

to

the

securities

lending

agent

and/

or

third-party

vendor,

is

reported

separately

in

the

Statement

of

Operations.

The

Fund

bears

the

market

risk

with

respect

to any

cash collateral

investment,

securities

loaned,

and

the

risk

that

the

agent

may

default

on

its

obligations

to

the

Fund.

If

the

borrower

defaults

on

its

obligation

to

return

the

securities

loaned,

the

Fund

has

the

right

to

repurchase

the

securities

in

the

open

market

using

the

collateral

received.

The

securities

lending

agent

has

agreed

to

indemnify

the

Fund

in

the

event

of

default

by

a

third

party

borrower.

At

February

28,

2022,

the

Fund

had

no

securities

on

loan.

e.

Income

and

Deferred

Taxes

It

is the Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. The Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

The

Fund

may

be

subject

to

foreign

taxation

related

to

income

received,

capital

gains

on

the

sale

of

securities

and

certain

foreign

currency

transactions

in

the

foreign

jurisdictions

in

which it

invests.

Foreign

taxes,

if

any,

are

recorded

based

on

the

tax

regulations

and

rates

that

exist

in

the

foreign

markets

in

which

the

Fund

invests.

When

a

capital

gain

tax

is

determined

to

apply,

the

Fund

records

an

estimated

deferred

tax

liability

in

an

amount

that

would

be

payable

if

the

securities

were

disposed

of

on

the

valuation

date.

As

a

result

of

several

court

cases,

in

certain

countries

across

the

European

Union, the

Fund

filed

additional

tax

reclaims

for

previously

withheld

taxes

on

dividends

earned

in

those

countries

(EU

reclaims). Income

recognized,

if

any,

for

EU

reclaims

is

reflected

as

other

income

in

the

Statement

of

Operations

and

any

related

receivable,

if

any,

is

reflected

as

European

Union

tax

reclaims

in

the

Statement

of

Assets

and

Liabilities.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

When

uncertainty

exists

as

to

the

ultimate

resolution

of

these

proceedings,

the

likelihood

of

receipt

of

these

EU

reclaims,

and

the

potential

timing

of

payment,

no

amounts

are

reflected

in

the

financial

statements.

For

U.S.

income

tax

purposes,

EU

reclaims

received

by

the

Fund,

if

any,

reduce

the

amount

of

foreign

taxes

Fund

shareholders

can

use

as

tax

deductions

or credits

on

their

income

tax

returns.

In

the

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Derivative

Financial

Instruments

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

24

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

event

that

EU

reclaims

received

by

the Fund

during a

fiscal

year

exceed

foreign

withholding

taxes

paid

by

the

Fund,

and

the

Fund previously

passed

through to

its

shareholders

foreign

taxes

incurred

by

the

Fund

to

be

used

as

a

credit

or

deduction

on

a

shareholder’s

income

tax

return,

the Fund

will enter

into

a

closing

agreement

with

the

Internal

Revenue

Service

(IRS)

in

order

to

pay

the

associated

tax

liability

on

behalf

of

the Fund's

shareholders.

The

Fund

determined

to

enter

into

a

closing

agreement

with

the

IRS

and

recorded

the

estimated

payments

as

a

reduction

to

income,

as

reflected

in

the

Statement

of

Operations.

The

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

February

28,

2022,

the

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Dividend

income

is

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Fund.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Certain

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

g.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

h.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Fund,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Income

and

Deferred

Taxes

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

25

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

2.

Shares

of

Beneficial

Interest

At

February

28,

2022,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund’s

shares

were

as

follows:

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

Six

Months

Ended

February

28,

2022

Year

Ended

August

31,

2021

Shares

Amount

Shares

Amount

Class

A

Shares:

Shares

sold

a

...................................

3,763,942

$56,629,243

9,217,073

$133,230,977

Shares

issued

in

reinvestment

of

distributions

..........

2,756,371

40,243,011

—

—

Shares

redeemed

...............................

(14,022,424)

(211,115,402)

(34,710,249)

(497,272,871)

Net

increase

(decrease)

..........................

(7,502,111)

$(114,243,148)

(25,493,176)

$(364,041,894)

Class

C

Shares:

Shares

sold

...................................

33,663

$483,046

111,842

$1,540,029

Shares

issued

in

reinvestment

of

distributions

..........

3,911

54,747

—

—

Shares

redeemed

a

..............................

(139,382)

(1,995,888)

(788,496)

(11,019,013)

Net

increase

(decrease)

..........................

(101,808)

$(1,458,095)

(676,654)

$(9,478,984)

Class

R6

Shares:

Shares

sold

...................................

374,157

$5,638,538

519,191

$7,465,031

Shares

issued

in

reinvestment

of

distributions

..........

28,589

416,823

—

—

Shares

redeemed

...............................

(198,241)

(2,967,432)

(878,650)

(12,324,458)

Net

increase

(decrease)

..........................

204,505

$3,087,929

(359,459)

$(4,859,427)

Advisor

Class

Shares:

Shares

sold

...................................

860,876

$13,039,299

1,575,746

$22,918,244

Shares

issued

in

reinvestment

of

distributions

..........

125,855

1,836,223

—

—

Shares

redeemed

...............................

(915,275)

(13,768,725)

(1,959,012)

(27,951,178)

Net

increase

(decrease)

..........................

71,456

$1,106,797

(383,266)

$(5,032,934)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

Subsidiary

Affiliation

Templeton

Global

Advisors

Limited

(Global

Advisors)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Distributors,

LLC

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

26

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

a.

Management

Fees

The

Fund

pays

an

investment

management

fee,

calculated

daily

and

paid

monthly,

to

Global

Advisors

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

February

28,

2022,

the

annualized

gross

effective

investment

management

fee

rate

was

0.695%

of

the

Fund’s

average

daily

net

assets. 

b.

Administrative

Fees

Under

an

agreement

with

Global

Advisors,

FT

Services

provides

administrative

services

to

the

Fund.

The

fee

is

paid

by

Global

Advisors

based

on

the

Fund’s

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Fund.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

each

share

class,

with

the

exception

of

Class

R6

and

Advisor

Class

shares,

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Fund’s

Class A reimbursement

distribution

plan,

the

Fund

reimburses

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

the

maximum

annual

plan

rate.

Under

the

Class

A

reimbursement

distribution

plan,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Fund’s

Class C

compensation

distribution

plan,

the

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

the

Fund's

shares

up

to

the

maximum

annual

plan

rate.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31.

The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Fund.

These

charges

are

deducted

from

the

proceeds

of

sales

of

Fund

shares

prior

to

investment

or

from

redemption

proceeds

prior

to

remittance,

as

applicable.

Distributors

has

advised

the

Fund

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Fund's

shares

for

the

period:

Annualized

Fee

Rate

Net

Assets

0.705%

Up

to

and

including

$1

billion

0.690%

Over

$1

billion,

up

to

and

including

$5

billion

0.675%

Over

$5

billion,

up

to

and

including

$10

billion

0.655%

Over

$10

billion,

up

to

and

including

$15

billion

0.635%

Over

$15

billion,

up

to

and

including

$20

billion

0.615%

In

excess

of

$20

billion

Class

A

....................................................................................

0.25%

Class

C

....................................................................................

1.00%

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..............................

$14,973

CDSC

retained

..............................................................................

$374

3.

Transactions

with

Affiliates

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

27

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

e.

Transfer

Agent

Fees

Each

class

of

shares pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

period

ended

February

28,

2022,

the

Fund

paid

transfer

agent

fees

of

$1,071,716,

of

which $575,406

was

retained

by

Investor

Services.

f.

Waiver

and

Expense

Reimbursements

Investor

Services

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

do

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class

until

December

31,

2022.

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

August

31,

2021,

the

capital

loss

carryforwards

were

as

follows:

At

February

28,

2022,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

foreign

currency

transactions,

EU

reclaims

and

corporate

actions.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

February

28,

2022,

aggregated

$1,427,651,063

and

$1,399,907,194,

respectively.

6.

Concentration

of

Risk

Investing

in

foreign

securities

may

include

certain

risks

and

considerations

not

typically

associated

with

investing

in

U.S.

securities,

such

as

fluctuating

currency

values

and

changing

local,

regional

and

global

economic,

political

and

social

conditions,

which

may

result

in

greater

market

volatility.

Political

and

financial

uncertainty

in

many

foreign

regions

may

increase

market

volatility

and

the

economic

risk

of

investing

in

foreign

securities.

In

addition,

certain

foreign

securities

may

not

be

as

liquid

as

U.S.

securities.

Capital

loss

carryforwards

not

subject

to

expiration:

Long

term

................................................................................

$203,817,446

Cost

of

investments

..........................................................................

$2,534,454,937

Unrealized

appreciation

........................................................................

$454,974,751

Unrealized

depreciation

........................................................................

(129,946,456)

Net

unrealized

appreciation

(depreciation)

..........................................................

$325,028,295

3.

Transactions

with

Affiliates

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

28

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

7.

Geopolitical

Risk

On

February

24,

2022,

Russia

engaged

in

military

actions

in

the

sovereign

territory

of

Ukraine.

The

current

political

and

financial

uncertainty

surrounding

Russia

and

Ukraine

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

these

countries

and

may

also

cause

uncertainty

for

the

global

economy

and

broader

financial

markets.

The

ultimate

fallout

and

long-term

impact

from

these

events

are

not

known.

The

Fund

will

continue

to

assess

the

impact

on

valuations

and

liquidity

and

will

take

any

potential

actions

needed

in

accordance

with

procedures

approved

by

the

Board.

8.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the Fund, its ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and its ability

to

achieve its investment

objectives.

9.

Other

Derivative

Information

For

the

period

ended

February

28,

2022,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

period

ended

February

28,

2022,

the

average

month

end

contract

value

of

forward

exchange

contracts

was

$229,173,380.

See

Note

1(c)

regarding

derivative

financial

instruments. 

10.

Credit

Facility

The

Fund,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

3,

2023.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

Fund

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Fund

and

other

costs

incurred

by

the

Fund,

pay

its

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

its

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

During

the

period

ended

February

28,

2022,

the Fund

did

not

use

the

Global

Credit

Facility.

Derivative

Contracts

Not

Accounted

for

as

Hedging

Instruments

Statement

of

Operations

Location

Net

Realized

Gain

(Loss)

for

the

Period

Statement

of

Operations

Location

Net

Change

in

Unrealized

Appreciation

(Depreciation)

for

the

Period

Templeton

World

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Foreign

exchange

contracts

.....

Forward

exchange

contracts

$15,752,137

Forward

exchange

contracts

$1,232,490

Total

.......................

$15,752,137

$1,232,490

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

29

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

11.

Fair

Value

Measurements

The

Fund

follows

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Fund's

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the

Fund's financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the

Fund's

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

A

summary

of

inputs

used

as

of

February

28,

2022,

in

valuing

the

Fund's

assets

carried

at

fair

value,

is

as

follows:

12.

Subsequent

Events

The

Fund

has

evaluated

subsequent

events

through

the

issuance

of

the financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Level

1

Level

2

Level

3

Total

Templeton

World

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Belgium

.............................

$

—

$

72,845,933

$

—

$

72,845,933

China

...............................

36,072,988

33,564,090

—

69,637,078

France

..............................

—

98,379,762

—

98,379,762

Germany

............................

—

162,212,141

—

162,212,141

Hong

Kong

...........................

—

72,569,044

—

72,569,044

Ireland

..............................

54,966,029

—

—

54,966,029

Japan

...............................

—

126,831,158

—

126,831,158

South

Korea

..........................

—

96,932,476

—

96,932,476

Switzerland

...........................

—

80,968,586

—

80,968,586

Taiwan

..............................

—

84,303,783

—

84,303,783

United

Kingdom

.......................

23,704,677

294,372,710

—

318,077,387

United

States

.........................

1,560,359,855

—

—

1,560,359,855

Short

Term

Investments

...................

—

61,400,000

—

61,400,000

Total

Investments

in

Securities

...........

$1,675,103,549

$1,184,379,683

a

$—

$2,859,483,232

a

Includes

foreign

securities

valued

at

$1,122,979,683,

which

were

categorized

as

Level

2

as

a

result

of

the

application

of

market

level

fair

value

procedures.

See

the

Financial

Instrument

Valuation

note

for

more

information.

Templeton

Funds

Shareholder

Information

30

franklintempleton.com

Semiannual

Report

BOARD

APPROVAL

OF

INVESTMENT

MANAGEMENT

AGREEMENTS

TEMPLETON

FUNDS

Templeton

World

Fund

(Fund)

At

an

in-person

meeting

held

on

February

28,

2022

(Meeting),

the

Board

of

Trustees

(Board)

of

Templeton

Funds

(Trust),

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the

investment

management

agreement

between

Templeton

Global

Advisors

Limited

(Manager)

and

the

Trust,

on

behalf

of

the

Fund

(Management

Agreement)

for

an

additional

one-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

the

Management

Agreement.

In

considering

the

continuation

of

the

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

the

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

the

Manager

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

virtual

contract

renewal

meeting

at

which

the

Independent

Trustees

first

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters;

then

met

with

senior

leadership

regarding

the

performance

of

the

global

equity

funds,

as

well

as

expected

enhancements

to

the

Templeton

Global

Equity

Group

leadership;

and

last

met

with

management

to

request

additional

information

that

the

Independent

Trustees

reviewed

and

considered

at

the

Meeting.

The

Board

later

had

an

opportunity

for

an

expanded

discussion

with

the

leadership

of

the

Templeton

Global

Equity

Group

to

hear

about

strategies

to

deliver

improved

investment

returns

to

shareholders.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

the

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

the

Manager;

(ii)

the

investment

performance

of

the

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

the

Manager

and

its

affiliates

from

the

relationship

with

the

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

the

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

In

approving

the

continuance

of

the

Management

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

terms

of

the

Management

Agreement

are

fair

and

reasonable

and

that

the

continuance

of

such

Management

Agreement

is

in

the

best

interests

of

the

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

the

Manager

and

its

affiliates

to

the

Fund

and

its

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

the

Manager,

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-party

service

providers;

investment

performance

reports

and

related

financial

information

for

the

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

the

Manager

and

its

affiliates;

and

management

fees

charged

by

the

Manager

and

its

affiliates

to

US

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Fund

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Fund.

The

Board

noted

management’s

continued

focus

on

enhancing

the

leadership

of

the

Templeton

Global

Equity

Group

and

commitment

to

providing

the

resources

important

to

delivering

sustainable

returns.

The

Board

also

acknowledged

the

ongoing

integration

of

the

Legg

Mason

family

of

funds

into

the

FT

family

of

funds

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

including

various

regulatory

initiatives

and

recent

geopolitical

concerns.

Templeton

Funds

Shareholder

Information

31

franklintempleton.com

Semiannual

Report

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Manager’s

parent,

and

its

commitment

to

the

mutual

fund

business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Fund

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

being

a

global

leader

in

stewardship

and

sustainability

and

the

recent

addition

of

a

senior

executive

focused

on

environmental,

social

and

governance

and

climate

control

initiatives.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

the

Manager

and

its

affiliates

to

the

Fund

and

its

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

the

Fund

over

various

time

periods

ended

November

30,

2021.

The

Board

considered

the

performance

returns

for

the

Fund

in

comparison

to

the

performance

returns

of

mutual

funds

deemed

comparable

to

the

Fund

included

in

a

universe

(Performance

Universe)

selected

by

Broadridge

Financial

Solutions,

Inc.

(Broadridge),

an

independent

provider

of

investment

company

data.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

a

Performance

Universe.

The

Board

also

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

the

Fund’s

performance

results

is

below.

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

global

multi-cap

value

funds.

The

Board

noted

that

the

Fund’s

annualized

total

return

was

below

the

median

of

its

Performance

Universe

for

the

one-,

three-,

five-

and

10-year

periods.

The

Board

discussed

this

performance

with

management

and

management

explained

that,

even

though

the

Fund’s

peer

group

is

comprised

of

multi-cap

value

funds,

some

funds

within

the

Performance

Universe

are

more

skewed

toward

the

growth

style,

which

negatively

impacted

the

Fund’s

relative

returns

during

periods

of

outperformance

of

growth

investing

strategies

over

value

investing

strategies.

Management

further

explained

that

the

Fund

had

underweight

positions

to

domestic

securities

and

the

information

technology

sector

during

the

one-,

three-

and

five-year

periods

compared

to

its

peer

group,

which

detracted

from

the

Fund’s

relative

performance.

Management

then

discussed

with

the

Board

the

actions

that

are

being

taken

in

an

effort

to

improve

the

performance

of

the

Fund

and

the

global

equity

funds

as

a

whole.

Management

specifically

highlighted

the

strategic

initiatives

being

undertaken

in

the

Templeton

Global

Equity

Group,

including

enhancements

to

the

leadership

of

the

group

and

the

commitment

of

additional

resources

important

to

delivering

sustainable

returns.

The

Board

concluded

that

the

Fund’s

Management

Agreement

should

be

continued

for

an

additional

one-year

period,

while

management’s

efforts

continue

to

be

closely

monitored.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

the

Fund’s

actual

total

expense

ratio

and

its

various

components,

including,

as

applicable,

management

fees;

transfer

agent

expenses;

underlying

fund

expenses;

Rule

12b-1

and

non-Rule

12b-1

service

fees;

and

other

non-

management

fees.

The

Board

also

noted

the

quarterly

and

annual

reports

it

receives

on

all

marketing

support

payments

made

by

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

the

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

to

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

or

semi-annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges,

and

the

actual

total

expense

ratio,

for

comparative

consistency,

was

shown

for

Class

A

shares

for

the

Fund

and

for

each

other

fund

in

the

Expense

Group.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

The

Expense

Group

for

the

Fund

included

the

Fund

and

eleven

other

global

multi-cap

value

funds.

The

Board

noted

that

the

Management

Rate

and

actual

total

expense

ratio

for

the

Fund

were

below

the

medians

of

its

Expense

Group.

The

Board

concluded

that

the

Management

Rate

charged

to

the

Fund

is

reasonable.

Templeton

Funds

Shareholder

Information

32

franklintempleton.com

Semiannual

Report

Profitability

The

Board

reviewed

and

considered

information

regarding

the

profits

realized

by

the

Manager

and

its

affiliates

in

connection

with

the

operation

of

the

Fund.

In

this

respect,

the

Board

considered

the

Fund

profitability

analysis

provided

by

the

Manager

that

addresses

the

overall

profitability

of

FT’s

US

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2021,

being

the

most

recent

fiscal

year-

end

for

FRI.

The

Board

noted

that

although

management

continually

makes

refinements

to

its

methodologies

used

in

calculating

profitability

in

response

to

organizational

and

product-related

changes,

the

overall

methodology

has

remained

consistent

with

that

used

in

the

Fund’s

profitability

report

presentations

from

prior

years.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

by

the

Manager

to

periodically

review

and

assess

the

allocation

methodologies

to

be

used

solely

by

the

Fund’s

Board

with

respect

to

the

profitability

analysis.

The

Board

noted

management’s

belief

that

costs

incurred

in

establishing

the

infrastructure

necessary

for

the

type

of

mutual

fund

operations

conducted

by

the

Manager

and

its

affiliates

may

not

be

fully

reflected

in

the

expenses

allocated

to

the

Fund

in

determining

its

profitability,

as

well

as

the

fact

that

the

level

of

profits,

to

a

certain

extent,

reflected

operational

cost

savings

and

efficiencies

initiated

by

management.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

which

effort

has

required

considerable

up-front

expenditures

by

the

Manager

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Fund,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

US

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

the

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

the

Manager

and

its

affiliates

from

providing

services

to

the

Fund

was

not

excessive

in

view

of

the

nature,

extent

and

quality

of

services

provided

to

the

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

the

Manager

may

realize

economies

of

scale,

if

any,

as

the

Fund

grows

larger

and

whether

the

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints,

which

operate

generally

to

share

any

economies

of

scale

with

the

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

the

Manager’s

view

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

the

Manager

incurs

across

the

FT

family

of

funds

as

a

whole.

The

Board

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

the

Manager

and

its

affiliates,

the

Fund’s

management

fee

structure

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

the

Management

Agreement

for

an

additional

one-year

period.

Proxy

Voting

Policies

and

Procedures

The

Fund’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Fund

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Fund’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Fund’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Statement

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.gov.

The

filed

form

may

Templeton

Funds

Shareholder

Information

33

franklintempleton.com

Semiannual

Report

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

the

Fund's

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

102

S

04/22

©

2022

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Semiannual

Report

and

Shareholder

Letter

Templeton

World

Fund

Investment

Manager

Distributor

Shareholder

Services

Templeton

Global

Advisors

Limited

Franklin

Distributors,

LLC

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

 Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial experts are Ann Torre Bates andDavid W. Niemiec and they are "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4.

Principal Accountant Fees and Services.           

N/A

Item 5. Audit Committee

of Listed Registrants.             

N/A

Item 6. Schedule of Investments.

                            N/A

Item 7

. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.                           N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies.  N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.                          N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a)

 Evaluation of Disclosure Controls and Procedures.  The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b)

  Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                             N/A

Item 13. Exhibits.

(a)(1)

Code of Ethics

codeofethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section302

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section906

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TEMPLETON FUNDS

By S\MATTHEW T. HINKLE______________________

      Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  April 26, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By S\MATTHEW T. HINKLE______________________

      Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  April 26, 2022

By S\CHRISTOPHER KINGS______________________

      Christopher Kings

      Chief Financial Officer, Chief Accounting Officer and Treasurer

Date  April 26, 2022