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)

Alison Baur, 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: 2/28/23

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.)

Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

Not Applicable

.

SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Templeton

Foreign

Fund

A

Series

of

Templeton

Funds

February

28,

2023

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,

2023,

global

equities

rose

despite

continued

challenges

resulting

from

elevated

inflation

and

higher

interest

rates.

The

price

of

oil

fell,

and

several

other

commodities

that

were

disrupted

by

Russia’s

invasion

of

Ukraine

stabilized

at

or

near

their

pre-war

prices,

easing

inflationary

pressure.

China

ended

its

restrictive

zero-COVID

policy,

prompting

investor

optimism

that

a

return

to

normal

conditions

would

benefit

global

growth.

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

+7.30%

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,

2023,

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

7

Your

Fund’s

Expenses

9

Financial

Highlights

and

Schedule

of

Investments

10

Financial

Statements

18

Notes

to

Financial

Statements

22

Shareholder

Information

33

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,

2023

.

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

+20.09%

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

+7.30%

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

+3.32%

total

return

for

the

six

months

ended

February

28,

2023.

1

Despite

continued

challenges

from

elevated

inflation

and

higher

interest

rates,

stocks

gained

amid

signs

of

resilience

in

the

global

economy.

The

price

of

oil

fell,

and

several

other

commodities

that

were

disrupted

by

Russia’s

invasion

of

Ukraine

stabilized

at

or

near

their

pre-war

prices,

easing

inflationary

pressure.

China

ended

its

restrictive

zero-COVID

policy,

prompting

investor

optimism

that

a

return

to

normal

conditions

would

benefit

global

growth.

In

the

U.S.,

gross

domestic

product

growth

resumed

in

the

second

half

of

2022,

rebounding

from

contractions

in

the

first

two

quarters

of

the

year.

Increasing

consumer

and

government

spending,

rising

inventories

and

strong

nonresidential

fixed

investment

boosted

economic

growth.

Meanwhile,

inflation,

which

remained

heightened

relative

to

recent

decades,

showed

signs

of

easing.

The

annual

inflation

rate,

as

measured

by

the

consumer

price

index,

declined

each

month

from

September

2022

through

January

2023.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

target

rate

four

times

during

the

period

to

end

at

a

range

of

4.50%–4.75%.

The

Fed

slowed

the

pace

of

its

interest

rate

increases

from

75

basis

points

(bps)

at

its

September

and

November

2022

meetings

to

50

bps

in

December

and

25

bps

in

February

2023.

At

its

February

meeting,

the

Fed

noted

that

although

inflation

has

eased

somewhat,

it

remained

elevated,

and

job

growth

was

robust

while

the

unemployment

rate

continued

to

be

low.

Furthermore,

the

Fed

maintained

its

policy

of

reducing

its

accumulated

bond

holdings

and

decreasing

the

size

of

its

balance

sheet.

Economies

in

the

eurozone

maintained

a

slow

growth

rate

in

2022’s

third

and

fourth

quarters.

The

European

Central

Bank

continued

to

raise

interest

rates

during

the

six-month

period,

opting

to

increase

its

benchmark

rate

at

each

of

its

four

meetings

to

fight

growing

inflation.

While

the

ongoing

war

in

Ukraine

and

subsequent

sanctions

against

Russia

disrupted

the

supply

of

natural

gas

to

Europe,

alternate

supplies

and

reduced

industrial

consumption

helped

maintain

gas

inventories

at

historically

high

levels.

In

this

environment,

Geographic

Composition

2/28/23

%

of

Total

Net

Assets

Europe

56.8%

Asia

35.9%

North

America

2.4%

Short-Term

Investments

&

Other

Net

Assets

4.9%

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

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

15

.

Templeton

Foreign

Fund

4

franklintempleton.com

Semiannual

Report

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

+17.69%

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

-0.05%

total

return

for

the

six-month

period.

1

China’s

economy

grew

on

an

annual

basis

in

the

third

and

fourth

quarters

of

2022.

In

December

2022,

China

loosened

its

strict

zero-COVID

policy,

lifting

a

potential

barrier

to

continued

growth

and

driving

gains

in

China’s

equity

market.

Japan’s

economy

weakened

in

2022’s

third

quarter

before

returning

to

modest

growth

in

the

fourth

quarter,

driven

by

rising

private

consumption

amid

loosened

border

controls.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-2.29%

total

return

for

the

six

months

under

review.

1

Concerns

that

continued

strength

in

the

U.S.

economy

could

keep

Fed

monetary

policy

tight

negatively

impacted

stocks

in

developing

nations.

Stocks

in

these

countries

are

negatively

impacted

by

high

interest

rates

in

the

U.S.,

which

increase

the

yield

of

some

U.S.-based

assets,

making

them

relatively

more

attractive

to

investors.

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.

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

In

a

six-month

period

characterized

by

elevated

uncertainty

and

shifting

market

trends,

Templeton

Foreign

Fund

delivered

double-digit

absolute

gains

and

outperformed

its

benchmark

MSCI

ACWI

ex-USA

Index-NR

by

the

largest

margin

in

more

than

20

years.

Outperformance

was

primarily

attributable

to

stock

selection,

which

was

encouraging

given

the

volatility

in

factor

trends

during

the

period.

In

our

view,

outperformance

absent

a

strong

style

regime

is

a

good

sign,

as

it

highlights

the

portfolio’s

idiosyncratic

return

potential

and

the

positive

impact

of

stock

selection.

Templeton

Foreign

Fund

adheres

to

a

robust

long-term

value

discipline

that

looks

for

“pockets

of

pessimism,”

meaning

stocks

that

have,

in

our

view,

been

excessively

discounted

by

negative

sentiment.

Our

forward-looking

fundamental

valuation

work

drives

the

Fund’s

positioning,

and

while

we

did

not

make

major

strategic

changes

during

the

review

period,

there

was

some

repositioning

on

the

margins.

We

had

increased

cyclical

exposures

prior

to

the

period

as

a

darkening

macroeconomic

outlook

created

opportunities

among

economically-sensitive

stocks.

While

many

of

these

stocks

remain

core

holdings,

we

trimmed

some

of

our

cyclical

exposures

during

the

review

period

as

optimism

returned

and

economically-sensitive

stocks

were

positively

re-rated.

Tactically,

that

was

the

correct

move,

in

our

assessment,

as

evidenced

by

strong

recent

performance

results.

Top

10

Industries

2/28/23

%

of

Total

Net

Assets

a

Banks

15.4%

Oil,

Gas

&

Consumable

Fuels

11.2%

Semiconductors

&

Semiconductor

Equipment

6.3%

Auto

Components

6.2%

Internet

&

Direct

Marketing

Retail

4.9%

Automobiles

4.8%

Technology

Hardware,

Storage

&

Peripherals

4.4%

Insurance

3.9%

Aerospace

&

Defense

3.8%

Pharmaceuticals

3.7%

Top

10

Countries

2/28/23

a

%

of

Total

Net

Assets

a

a

United

Kingdom

21.7%

Germany

13.7%

Japan

10.9%

Netherlands

10.3%

South

Korea

8.0%

China

7.3%

France

5.7%

Hong

Kong

3.9%

Taiwan

2.5%

United

States

2.4%

Templeton

Foreign

Fund

5

franklintempleton.com

Semiannual

Report

Market

leadership

during

the

period

was

initially

dominated

by

large-capitalization

defensive

value

stocks

at

a

time

when

policy

tightening

and

slowing

economic

indicators

raised

expectations

of

a

global

recession.

As

the

period

progressed,

investors

began

to

focus

on

early

signs

that

inflation

could

be

peaking.

Consequently,

entering

2023,

rising

expectations

of

a

dovish

policy

pivot

from

the

Fed

led

to

a

revival

in

risk

appetite,

a

pull-back

in

the

U.S.

dollar,

and

a

resurgence

in

international

cyclical

growth

stocks.

However,

renewed

signs

of

more

persistent

inflation

late

in

the

period

led

to

increased

hawkishness

from

central

bankers,

causing

a

rotation

out

of

rate-sensitive

emerging

market

stocks

and

back

into

developed

market

equities,

particularly

in

Europe.

European

outperformance

was

the

most

consistent

market

trend

during

a

period

otherwise

characterized

by

ongoing

leadership

rotations.

In

fact,

it

was

the

best

six-month

period

for

European

equities

(relative

to

the

rest

of

the

world)

in

at

least

two

decades

as

mild

winter

weather

quelled

fears

of

an

energy

crisis

on

the

continent

and

investors

gravitated

to

the

region’s

relatively

inexpensive

valuations.

The

Fund’s

European

holdings

were

the

primary

regional

contributors,

led

by

a

favorable

overweighted

allocation

and

stock

selection

in

the

U.K.

Our

European

overweight

also

had

a

meaningfully

positive

currency

impact

during

the

period

given

the

strength

of

both

the

British

pound

and

the

euro

versus

the

U.S.

dollar.

The

Fund’s

Asian

holdings

also

outperformed,

led

by

stock

selection

and

favorable

underweighted

allocations

in

China

and

Japan.

All

sector

allocations

outperformed

the

benchmark

during

the

review

period.

Consumer

discretionary

was

the

biggest

relative

contributor,

benefiting

from

stock

selection,

primarily

in

the

automotive

industry.

German

automaker

Bayerische

Motoren

Werke

(more

commonly

known

as

BMW)

and

auto

parts

firm

Faurecia

were

the

Fund’s

top

sector

holdings.

BMW

is

one

example

of

a

“pocket

of

pessimism.”

Concerns

around

German

geopolitical

and

energy

supply

risks

in

addition

to

broader

economic

anxiety

pressured

the

stock

to

levels

that

we

believe

offer

significant

value.

During

the

period,

BMW

traded

on

a

low

single-digit

price-to-earnings

multiple

with

a

greater

than

20%

free

cash

flow

yield,

which

management

is

using

to

pay

a

healthy

dividend

and

buy

back

€2

billion

of

stock.

A

net

cash

balance

sheet

further

reinforces

the

company’s

attractive

risk-return

profile,

in

our

view,

and

should

help

BMW

weather

any

potential

macroeconomic

adversity

and

continue

to

reward

shareholders

with

a

generous

payout

policy.

Faurecia

also

rallied

after

reporting

solid

earnings

and

announcing

an

asset

disposal

that

will

help

strengthen

the

firm’s

balance

sheet.

Stock

selection

in

financials

also

notably

outperformed,

led

by

European

lenders

ING

Groep

and

Standard

Chartered.

ING

was

the

biggest

sector

contributor,

advancing

after

beating

earnings

estimates

and

increasing

its

capital

return

commitment

to

shareholders.

Improving

earnings

and

growing

confidence

in

a

new

management

team

have

begun

to

bolster

sentiment

on

the

stock.

In

our

view,

the

real

value

to

be

unlocked

at

ING

in

the

intermediate

term

is

embedded

in

capital

returns.

The

bank

has

€7bn

of

excess

capital;

at

its

current

common

equity

tier

1

(CET1)

target

of

12.5%,

that

means

ING

must

distribute

20%

of

its

market

cap

in

the

next

couple

years

over

and

above

the

annual

50%

dividend

payout.

In

the

earnings

reported

during

the

review

period,

management

confirmed

the

need

to

return

in

excess

of

100%

of

earnings

over

the

coming

years.

With

shares

still

trading

at

a

material

discount

to

book

value,

earnings

coming

in

better

than

expected

and

the

capital

return

story

still

not

fully

appreciated

by

the

market,

we

continue

to

believe

that

ING

represents

asymmetric

risk-reward

prospects

over

the

next

few

years.

Energy

stocks

also

meaningfully

contributed,

with

U.K.-

based

integrated

oil

major

BP

finishing

as

the

Fund’s

top

individual

contributor.

Shares

rallied

after

the

firm

reported

strong

results,

with

a

larger-than-expected

share

buyback

and

10%

dividend

increase.

We

were

encouraged

to

see

BP

increase

long-term

profit

and

production

guidance,

especially

given

analyst

concerns

about

declining

volumes.

Overall,

we

are

confident

in

management’s

ability

to

strategically

allocate

BP’s

prodigious

cash

flows

to

balance

shareholder

returns,

Top

10

Holdings

2/28/23

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

BP

plc

5.3%

Oil,

Gas

&

Consumable

Fuels,

United

Kingdom

Shell

plc

4.6%

Oil,

Gas

&

Consumable

Fuels,

Netherlands

Samsung

Electronics

Co.

Ltd.

4.1%

Technology

Hardware,

Storage

&

Peripherals,

South

Korea

Standard

Chartered

plc

3.3%

Banks,

United

Kingdom

Bayerische

Motoren

Werke

AG

2.9%

Automobiles,

Germany

Faurecia

SE

2.5%

Auto

Components,

France

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

2.5%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Sumitomo

Mitsui

Financial

Group,

Inc.

2.4%

Banks,

Japan

Imperial

Brands

plc

2.4%

Tobacco,

United

Kingdom

Infineon

Technologies

AG

2.4%

Semiconductors

&

Semiconductor

Equipment,

Germany

Templeton

Foreign

Fund

6

franklintempleton.com

Semiannual

Report

production

growth

and

capital

efficiency.

With

cash

flow

yields

in

the

high

teens

at

current

oil

prices,

we

continue

to

believe

BP

is

undervalued,

and

it

represents

a

core

holding

in

the

portfolio.

While

there

were

no

sector-level

detractors,

there

were

a

handful

of

individual

stock

laggards.

Weakness

was

primarily

concentrated

in

Asia,

among

technology

stocks

like

e-commerce

firm

Alibaba

Group

Holding

and

internet

search

giant

Baidu.

While

concerns

about

geopolitical

tensions

and

regulatory

interference

in

the

Chinese

technology

sector

persist,

we

continue

to

like

these

companies

over

the

long-

term

given

their

attractive

valuations

and

strong

growth

profiles.

At

Templeton,

we

think

creatively

about

the

many

ways

that

value

gets

created

over

time.

The

result

is

a

process

that

combines

analytical

rigor

with

a

dynamic

approach

to

value

that

covers

a

range

of

different

investment

profiles.

One

of

the

objectives

underpinning

our

use

of

the

full

spectrum

of

value

is

the

independence

it

creates

from

the

large

momentum

shifts

that

so

often

buffet

markets.

We

seek

to

build

portfolios

that

we

believe

will

not

be

whipsawed

by

the

whims

of

the

equity

market

as

investors

rotate

between

narratives.

If

we

can

successfully

manage

the

volatility

associated

with

these

swings,

we

can

then

focus

on

pursuing

alpha

over

time

through

stock

picking—that

is,

through

the

evaluation

of

long-term

business

fundamentals

and

buying

shares

at

a

discount

to

their

intrinsic

worth.

Despite

recent

strength,

Templeton

Foreign

Fund

continues

to

trade

at

single-digit

price-to-earnings

multiples,

a

significant

discount

to

its

benchmark

and

in

the

bottom

quartile

of

historic

valuations.

We

believe

the

Fund’s

attractive

valuation

and

fundamental

profile

has

the

potential

to

support

performance

over

time,

particularly

if

the

market

continues

to

move

away

from

macroeconomic

themes

and

towards

a

more

discriminate

assessment

of

bottom-up

value.

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,

2023,

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,

2023

Templeton

Foreign

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

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

2/28/23

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

+20.09%

+13.45%

1-Year

+4.54%

-1.18%

5-Year

+7.08%

+0.24%

10-Year

+42.63%

+3.03%

Advisor

6-Month

+20.10%

+20.10%

1-Year

+4.75%

+4.75%

5-Year

+8.23%

+1.59%

10-Year

+46.00%

+3.86%

See

page

8

for

Performance

Summary

footnotes.

Templeton

Foreign

Fund

Performance

Summary

8

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.

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.

Gross

expenses

are

the

Fund’s

total

annual

operating

expenses

as

of

the

Fund's

prospectus

available

at

the

time

of

publication.

Actual

expenses

may

be

higher

and

may

impact

portfolio

returns.

Net

expenses

reflect

contractual

fee

waivers,

expense

caps

and/or

reimbursements,

which

cannot

be

terminated

prior

to

12/31/23

without

Board

consent.

Additional

amounts

may

be

voluntarily

waived

and/or

reimbursed

and

may

be

modified

or

discontinued

at

any

time

without

notice.

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

(9/1/22–2/28/23)

Share

Class

Net

Investment

Income

A

$0.0814

C

$0.0156

R

$0.0660

R6

$0.1060

Advisor

$0.0985

Total

Annual

Operating

Expenses

5

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

1.10%

1.16%

Advisor

0.85%

0.91%

Your

Fund’s

Expenses

Templeton

Foreign

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”

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

9/1/22

Ending

Account

Value

2/28/23

Expenses

Paid

During

Period

9/1/22–2/28/23

1,2

Ending

Account

Value

2/28/23

Expenses

Paid

During

Period

9/1/22–2/28/23

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,200.90

$5.99

$1,019.35

$5.50

1.10%

C

$1,000

$1,196.70

$10.06

$1,015.64

$9.23

1.85%

R

$1,000

$1,200.10

$7.35

$1,018.11

$6.74

1.35%

R6

$1,000

$1,202.70

$4.03

$1,021.14

$3.70

0.74%

Advisor

$1,000

$1,201.00

$4.62

$1,020.59

$4.24

0.85%

Templeton

Funds

Financial

Highlights

Templeton

Foreign

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

10

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$6.32

$7.77

$6.22

$6.61

$7.69

$7.81

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.03

0.13

0.18

c

0.10

0.19

0.12

Net

realized

and

unrealized

gains

(losses)

1.23

(1.28)

1.46

(0.25)

(1.09)

(0.13)

Total

from

investment

operations

........

1.26

(1.15)

1.64

(0.15)

(0.90)

(0.01)

Less

distributions

from:

Net

investment

income

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

(0.08)

(0.30)

(0.09)

(0.24)

(0.18)

(0.11)

Net

asset

value,

end

of

period

..........

$7.50

$6.32

$7.77

$6.22

$6.61

$7.69

Total

return

d

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

20.09%

(15.25)%

26.57%

(2.76)%

(11.73)%

(0.15)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

1.15%

1.16%

1.15%

1.19%

1.15%

1.16%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.10%

1.10%

1.07%

1.10%

1.08%

1.11%

f

Net

investment

income

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

0.93%

1.80%

2.45%

c

1.55%

2.69%

1.54%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$1,621,340

$1,418,293

$1,990,939

$1,766,365

$2,395,260

$2,929,181

Portfolio

turnover

rate

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

7.20%

29.07%

37.85%

g

42.37%

g

30.81%

23.01%

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.

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.

Templeton

Funds

Financial

Highlights

Templeton

Foreign

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

11

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$6.29

$7.70

$6.17

$6.54

$7.49

$7.60

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.01

0.07

0.13

c

0.05

0.12

0.06

Net

realized

and

unrealized

gains

(losses)

1.23

(1.27)

1.43

(0.25)

(1.05)

(0.12)

Total

from

investment

operations

........

1.24

(1.20)

1.56

(0.20)

(0.93)

(0.06)

Less

distributions

from:

Net

investment

income

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

(0.02)

(0.21)

(0.03)

(0.17)

(0.02)

(0.05)

Net

asset

value,

end

of

period

..........

$7.51

$6.29

$7.70

$6.17

$6.54

$7.49

Total

return

d

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

19.67%

(15.95)%

25.55%

(3.42)%

(12.40)%

(0.79)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

1.90%

1.91%

1.90%

1.94%

1.90%

1.91%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.85%

1.85%

1.82%

1.85%

1.83%

1.86%

f

Net

investment

income

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

0.18%

1.03%

1.81%

c

0.81%

1.94%

0.79%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$23,822

$23,962

$39,083

$54,093

$87,160

$281,640

Portfolio

turnover

rate

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

7.20%

29.07%

37.85%

g

42.37%

g

30.81%

23.01%

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.

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.

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,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Class

R

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$6.16

$7.58

$6.08

$6.47

$7.53

$7.65

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.02

0.11

0.16

c

0.08

0.17

0.10

Net

realized

and

unrealized

gains

(losses)

1.21

(1.25)

1.42

(0.24)

(1.07)

(0.12)

Total

from

investment

operations

........

1.23

(1.14)

1.58

(0.16)

(0.90)

(0.02)

Less

distributions

from:

Net

investment

income

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

(0.07)

(0.28)

(0.08)

(0.23)

(0.16)

(0.10)

Net

asset

value,

end

of

period

..........

$7.32

$6.16

$7.58

$6.08

$6.47

$7.53

Total

return

d

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

20.01%

(15.54)%

26.29%

(3.03)%

(11.96)%

(0.32)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

1.40%

1.41%

1.40%

1.44%

1.40%

1.41%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.35%

1.35%

1.32%

1.35%

1.33%

1.36%

f

Net

investment

income

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

0.68%

1.57%

2.21%

c

1.33%

2.44%

1.29%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$118,982

$103,984

$123,744

$109,187

$127,546

$148,638

Portfolio

turnover

rate

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

7.20%

29.07%

37.85%

g

42.37%

g

30.81%

23.01%

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.

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.

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,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$6.20

$7.64

$6.12

$6.51

$7.58

$7.70

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.04

0.15

0.21

c

0.12

0.22

0.15

Net

realized

and

unrealized

gains

(losses)

1.21

(1.26)

1.43

(0.24)

(1.08)

(0.12)

Total

from

investment

operations

........

1.25

(1.11)

1.64

(0.12)

(0.86)

0.03

Less

distributions

from:

Net

investment

income

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

(0.11)

(0.33)

(0.12)

(0.27)

(0.21)

(0.15)

Net

asset

value,

end

of

period

..........

$7.34

$6.20

$7.64

$6.12

$6.51

$7.58

Total

return

d

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

20.27%

(14.98)%

27.02%

(2.38)%

(11.34)%

0.24%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

0.81%

0.81%

0.79%

0.79%

0.77%

0.73%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.74%

0.73%

0.69%

0.70%

0.68%

0.68%

f

Net

investment

income

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

1.29%

2.13%

2.86%

c

1.96%

3.09%

1.97%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$335,868

$290,974

$531,344

$594,452

$906,474

$1,496,328

Portfolio

turnover

rate

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

7.20%

29.07%

37.85%

g

42.37%

g

30.81%

23.01%

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.

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.

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,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$6.21

$7.64

$6.12

$6.51

$7.58

$7.70

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.04

0.15

0.20

c

0.11

0.20

0.14

Net

realized

and

unrealized

gains

(losses)

1.20

(1.26)

1.43

(0.24)

(1.07)

(0.12)

Total

from

investment

operations

........

1.24

(1.11)

1.63

(0.13)

(0.87)

0.02

Less

distributions

from:

Net

investment

income

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

(0.10)

(0.32)

(0.11)

(0.26)

(0.20)

(0.14)

Net

asset

value,

end

of

period

..........

$7.35

$6.21

$7.64

$6.12

$6.51

$7.58

Total

return

d

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

20.10%

(14.99)%

26.88%

(2.57)%

(11.53)%

0.16%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

0.91%

0.92%

0.90%

0.94%

0.90%

0.91%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.85%

0.85%

0.82%

0.85%

0.83%

0.86%

f

Net

investment

income

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

1.19%

2.06%

2.80%

c

1.79%

2.94%

1.79%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$638,528

$602,921

$620,885

$857,179

$857,482

$1,627,827

Portfolio

turnover

rate

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

7.20%

29.07%

37.85%

g

42.37%

g

30.81%

23.01%

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.

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.

Templeton

Funds

Schedule

of

Investments

(unaudited),

February

28,

2023

Templeton

Foreign

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

95.1%

China

7.3%

a

Alibaba

Group

Holding

Ltd.

.........

Internet

&

Direct

Marketing

Retail

5,372,770

$

59,052,621

a,b

Baidu,

Inc.,

ADR

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

Interactive

Media

&

Services

124,789

17,182,197

Gree

Electric

Appliances,

Inc.

of

Zhuhai,

A

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

Household

Durables

3,965,000

20,284,844

NXP

Semiconductors

NV

..........

Semiconductors

&

Semiconductor

Equipment

228,703

40,818,912

Prosus

NV

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

Internet

&

Direct

Marketing

Retail

887,750

63,642,110

200,980,684

France

5.7%

Dassault

Aviation

SA

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

Aerospace

&

Defense

252,260

43,366,212

a

Faurecia

SE

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

Auto

Components

3,109,869

67,828,850

Valeo

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

Auto

Components

2,188,453

45,464,556

156,659,618

Germany

13.7%

Bayer

AG

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

Pharmaceuticals

1,072,957

63,713,529

Bayerische

Motoren

Werke

AG

......

Automobiles

764,267

78,845,951

Continental

AG

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

Auto

Components

777,879

55,845,572

c

Covestro

AG,

144A,

Reg

S

.........

Chemicals

870,065

38,248,449

E.ON

SE

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

Multi-Utilities

3,568,387

38,934,220

b

Fresenius

Medical

Care

AG

&

Co.

KGaA

Health

Care

Providers

&

Services

896,999

35,050,742

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

1,843,683

65,222,905

375,861,368

Hong

Kong

3.9%

AIA

Group

Ltd.

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

Insurance

5,430,543

57,714,067

Prudential

plc,

(GBP

Traded)

........

Insurance

2,588,841

39,561,838

b

Prudential

plc,

(HKD

Traded)

........

Insurance

589,500

8,863,224

106,139,129

India

2.0%

Housing

Development

Finance

Corp.

Ltd.

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

Diversified

Financial

Services

1,769,747

55,805,251

Ireland

1.6%

CRH

plc

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

Construction

Materials

914,999

42,980,710

Japan

10.9%

Elecom

Co.

Ltd.

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

Technology

Hardware,

Storage

&

Peripherals

1,035,960

10,128,578

Hitachi

Ltd.

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

Industrial

Conglomerates

843,209

42,684,639

Honda

Motor

Co.

Ltd.

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

Automobiles

2,033,895

52,891,619

Seria

Co.

Ltd.

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

Multiline

Retail

1,029,807

19,981,575

Sony

Group

Corp.

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

Household

Durables

315,984

26,423,412

Sumitomo

Metal

Mining

Co.

Ltd.

.....

Metals

&

Mining

1,214,093

45,198,255

Sumitomo

Mitsui

Financial

Group,

Inc.

.

Banks

1,531,623

66,896,806

Sundrug

Co.

Ltd.

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

Food

&

Staples

Retailing

1,275,419

34,534,157

298,739,041

Netherlands

10.3%

a

EXOR

NV

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

Diversified

Financial

Services

477,513

39,401,703

ING

Groep

NV

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

Banks

4,217,208

59,020,333

SBM

Offshore

NV

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

Energy

Equipment

&

Services

3,903,594

57,123,744

Shell

plc

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

Oil,

Gas

&

Consumable

Fuels

4,181,677

126,645,697

282,191,477

Portugal

1.3%

Galp

Energia

SGPS

SA,

B

.........

Oil,

Gas

&

Consumable

Fuels

2,809,055

34,269,144

Templeton

Funds

Schedule

of

Investments

(unaudited)

Templeton

Foreign

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)

South

Korea

8.0%

KB

Financial

Group,

Inc.

...........

Banks

1,428,246

$

55,402,797

Samsung

Electronics

Co.

Ltd.

.......

Technology

Hardware,

Storage

&

Peripherals

2,425,301

111,146,277

Shinhan

Financial

Group

Co.

Ltd.

....

Banks

1,744,881

51,320,107

217,869,181

Spain

0.6%

a,b

Tecnicas

Reunidas

SA

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

Energy

Equipment

&

Services

1,424,712

16,323,482

Switzerland

1.9%

Adecco

Group

AG

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

Professional

Services

1,491,853

53,196,754

Taiwan

2.5%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

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

Semiconductors

&

Semiconductor

Equipment

4,127,044

67,714,019

Thailand

1.3%

Kasikornbank

PCL

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

Banks

9,025,777

35,099,728

United

Kingdom

21.7%

AstraZeneca

plc

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

Pharmaceuticals

293,868

38,281,379

Barratt

Developments

plc

..........

Household

Durables

4,457,370

25,059,383

BP

plc

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

Oil,

Gas

&

Consumable

Fuels

22,252,522

146,221,016

CK

Hutchison

Holdings

Ltd.

.........

Industrial

Conglomerates

7,143,676

42,655,333

Imperial

Brands

plc

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

Tobacco

2,760,256

66,492,570

a,c

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

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

Internet

&

Direct

Marketing

Retail

531,490

11,560,075

Lloyds

Banking

Group

plc

..........

Banks

101,127,790

63,859,992

Persimmon

plc

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

Household

Durables

1,612,660

28,120,320

a

Rolls-Royce

Holdings

plc

..........

Aerospace

&

Defense

34,093,285

59,395,770

a

S4

Capital

plc

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

Media

9,188,850

22,648,428

Standard

Chartered

plc

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

Banks

9,428,705

89,208,925

593,503,191

United

States

2.4%

a

DXC

Technology

Co.

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

IT

Services

1,813,490

50,306,212

Freeport-McMoRan,

Inc.

...........

Metals

&

Mining

374,840

15,357,195

65,663,407

Total

Common

Stocks

(Cost

$2,386,880,232)

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

2,602,996,184

Short

Term

Investments

6.0%

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Time

Deposits

5.9%

Canada

4.8%

National

Bank

of

Canada,

4.56%,

3/01/23

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

36,000,000

36,000,000

Royal

Bank

of

Canada,

4.55%,

3/01/23

81,700,000

81,700,000

Toronto-Dominion

Bank

(The),

4.55%,

3/01/23

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

14,500,000

14,500,000

132,200,000

Templeton

Funds

Schedule

of

Investments

(unaudited)

Templeton

Foreign

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

Short

Term

Investments

(continued)

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Time

Deposits

(continued)

France

1.1%

Credit

Agricole

Corporate

and

Investment

Bank

SA,

4.55%,

3/01/23

29,000,000

$

29,000,000

Total

Time

Deposits

(Cost

$161,200,000)

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

161,200,000

Shares

d

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

0.1%

Money

Market

Funds

0.1%

e,f

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

4.204%

.........

3,087,500

3,087,500

Total

Investments

from

Cash

Collateral

Received

for

Loaned

Securities

(Cost

$3,087,500)

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

3,087,500

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$164,287,500

)

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

164,287,500

a

a

a

Total

Investments

(Cost

$2,551,167,732)

101.1%

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

$2,767,283,684

Other

Assets,

less

Liabilities

(1.1)%

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

(28,743,385)

Net

Assets

100.0%

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

$2,738,540,299

a

a

a

See

Abbreviations

on

page

32

.

*

The

principal

amount

is

stated

in

U.S.

dollars

unless

otherwise

indicated.

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

February

28,

2023.

See

Note

1(d).

c

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,

2023,

the

aggregate

value

of

these

securities

was

$49,808,524,

representing

1.8%

of

net

assets.

d

See

Note

1(d)

regarding

securities

on

loan.

e

See

Note

3(f)

regarding

investments

in

affiliated

management

investment

companies.

f

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

February

28,

2023

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

Templeton

Foreign

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$2,548,080,232

Cost

-

Non-controlled

affiliates

(Note

3f)

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

3,087,500

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$26,352,173)

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

$2,764,196,184

Value

-

Non-controlled

affiliates

(Note

3f)

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

3,087,500

Cash

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

40,491

Receivables:

Investment

securities

sold

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

14,795

Capital

shares

sold

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

1,427,437

Dividends

and

interest

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

13,862,518

European

Union

tax

reclaims

(Note

1

e

)

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

117,666

Total

assets

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

2,782,746,591

Liabilities:

Payables:

Investment

securities

purchased

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

10,979,699

Capital

shares

redeemed

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

2,390,959

Management

fees

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

1,412,260

Distribution

fees

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

383,363

Transfer

agent

fees

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

1,771,406

Trustees'

fees

and

expenses

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

42

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

e

)

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

21,287,961

Payable

upon

return

of

securities

loaned

(Note

1

d

)

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

3,087,500

Deferred

tax

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

2,020,600

Accrued

expenses

and

other

liabilities

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

872,502

Total

liabilities

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

44,206,292

Net

assets,

at

value

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

$2,738,540,299

Net

assets

consist

of:

Paid-in

capital

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

$2,867,089,345

Total

distributable

earnings

(losses)

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

(128,549,046)

Net

assets,

at

value

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

$2,738,540,299

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

February

28,

2023

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

19

Templeton

Foreign

Fund

Class

A:

Net

assets,

at

value

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

$1,621,340,383

Shares

outstanding

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

216,258,715

Net

asset

value

per

share

a

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

$7.50

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

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

$7.94

Class

C:

Net

assets,

at

value

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

$23,822,442

Shares

outstanding

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

3,172,530

Net

asset

value

and

maximum

offering

price

per

share

a

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

$7.51

Class

R:

Net

assets,

at

value

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

$118,982,308

Shares

outstanding

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

16,256,751

Net

asset

value

and

maximum

offering

price

per

share

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

$7.32

Class

R6:

Net

assets,

at

value

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

$335,867,591

Shares

outstanding

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

45,741,222

Net

asset

value

and

maximum

offering

price

per

share

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

$7.34

Advisor

Class:

Net

assets,

at

value

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

$638,527,575

Shares

outstanding

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

86,839,433

Net

asset

value

and

maximum

offering

price

per

share

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

$7.35

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,

2023

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

Templeton

Foreign

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,173,615)

Unaffiliated

issuers

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

$23,728,530

Interest:

Unaffiliated

issuers

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

1,498,754

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

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

217,058

Non-controlled

affiliates

(Note

3

f

)

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

150,899

Other

income

(Note

1

e

)

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

11,096

Less:

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

e

)

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

(330,866)

Total

investment

income

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

25,275,471

Expenses:

Management

fees

(Note

3

a

)

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

8,679,234

Distribution

fees:

(Note

3c

)

    Class

A

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

1,830,415

    Class

C

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

113,549

    Class

R

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

271,605

Transfer

agent

fees:

(Note

3e

)

    Class

A

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

1,268,115

    Class

C

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

19,712

    Class

R

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

94,091

    Class

R6

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

112,865

    Advisor

Class

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

517,954

Custodian

fee

s

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

118,649

Registration

and

filing

fees

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

56,148

Professional

fees

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

25,242

Trustees'

fees

and

expenses

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

131,594

Other

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

109,018

Total

expenses

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

13,348,191

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

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

(730,880)

Net

expenses

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

12,617,311

Net

investment

income

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

12,658,160

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

55,773,133

Written

options

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

128,973

Foreign

currency

transactions

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

175,328

Net

realized

gain

(loss)

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

56,077,434

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

397,238,803

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

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

440,099

Change

in

deferred

taxes

on

unrealized

appreciation

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

(447,770)

Net

change

in

unrealized

appreciation

(depreciation)

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

397,231,132

Net

realized

and

unrealized

gain

(loss)

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

453,308,566

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

$465,966,726

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

21

Templeton

Foreign

Fund

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$12,658,160

$56,742,134

Net

realized

gain

(loss)

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

56,077,434

158,736,046

Net

change

in

unrealized

appreciation

(depreciation)

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

397,231,132

(681,581,753)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

465,966,726

(466,103,573)

Distributions

to

shareholders:

Class

A

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

(17,674,304)

(68,477,455)

Class

C

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

(51,405)

(999,549)

Class

R

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

(1,094,380)

(4,571,272)

Class

R6

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

(4,832,491)

(20,850,055)

Advisor

Class

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

(8,718,598)

(34,087,582)

Total

distributions

to

shareholders

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

(32,371,178)

(128,985,913)

Capital

share

transactions:

(Note

2

)

Class

A

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

(52,960,620)

(240,351,269)

Class

C

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

(4,025,937)

(9,046,243)

Class

R

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

(4,282,273)

3,756,831

Class

R6

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

(7,375,063)

(158,973,250)

Advisor

Class

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

(66,544,586)

133,841,510

Total

capital

share

transactions

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

(135,188,479)

(270,772,421)

Net

increase

(decrease)

in

net

assets

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

298,407,069

(865,861,907)

Net

assets:

Beginning

of

period

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

2,440,133,230

3,305,995,137

End

of

period

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

$2,738,540,299

$2,440,133,230

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

Templeton

Foreign

Fund

22

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.

The

Trust

follows

the

accounting

and

reporting

guidance

in

Financial

Accounting

Standards

Board

(FASB)

Accounting

Standards

Codification

Topic

946,

Financial

Services

–

Investment

Companies

(ASC

946)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP),

including,

but

not

limited

to,

ASC

946.

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

Board

has

designated

the

Fund’s

investment

manager

as

the

valuation

designee

and

has

responsibility

for

oversight

of

valuation.

The

investment

manager

is

assisted

by

the

Fund’s

administrator

in

performing

this

responsibility,

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,

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,

2023,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

23

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

were

categorized

as

Level

2

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.

The

Fund

purchased

or

wrote

exchange

traded

option

contracts

primarily

to

manage

and/or

gain

exposure

to

equity

price

risk.

An

option

is

a

contract

entitling

the

holder

to

purchase

or

sell

a

specific

amount

of

shares

or

units

of

an

asset

or

notional

amount

of

a

swap

(swaption),

at

a

specified

price.

When

an

option

is

purchased

or

written,

an

amount

equal

to

the

premium

paid

or

received

is

recorded

as

an

asset

or

liability,

respectively.

Upon

exercise

of

an

option,

the

acquisition

cost

or

sales

proceeds

of

the

underlying

investment

is

adjusted

by

any

premium

received

or

paid.

Upon

expiration

of

an

option,

any

premium

received

or

paid

is

recorded

as

a

realized

gain

or

loss.

Upon

closing

an

option

other

than

through

expiration

or

exercise,

the

difference

between

the

premium

received

or

paid

and

the

cost

to

close

the

position

is

recorded

as

a

realized

gain

or

loss.

At

February

28,

2023,

the

Fund

had

no

options.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

24

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

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 $25,417,392

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.

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

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,

2023,

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Securities

Lending

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

25

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

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.

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.

2.

Shares

of

Beneficial

Interest

At

February

28,

2023,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund’s

shares

were

as

follows:

Six

Months

Ended

February

28,

2023

Year

Ended

August

31,

2022

Shares

Amount

Shares

Amount

Class

A

Shares:

Shares

sold

a

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

8,040,652

$55,799,882

15,055,350

$108,801,684

Shares

issued

in

reinvestment

of

distributions

..........

2,451,682

16,720,474

9,189,754

64,695,870

Shares

redeemed

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

(18,691,952)

(125,480,976)

(56,182,941)

(413,848,823)

Net

increase

(decrease)

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

(8,199,618)

$(52,960,620)

(31,937,837)

$(240,351,269)

Class

C

Shares:

Shares

sold

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

207,240

$1,404,073

417,818

$3,009,157

Shares

issued

in

reinvestment

of

distributions

..........

7,483

51,187

139,410

982,841

Shares

redeemed

a

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

(850,604)

(5,481,197)

(1,823,590)

(13,038,241)

Net

increase

(decrease)

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

(635,881)

$(4,025,937)

(1,266,362)

$(9,046,243)

1.

Organization

and

Significant

Accounting

Policies

(continued)

f.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

26

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:

Six

Months

Ended

February

28,

2023

Year

Ended

August

31,

2022

Shares

Amount

Shares

Amount

Class

R

Shares:

Shares

sold

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

891,907

$5,809,744

2,580,769

$18,083,292

Shares

issued

in

reinvestment

of

distributions

..........

163,984

1,092,131

662,175

4,555,764

Shares

redeemed

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

(1,669,154)

(11,184,148)

(2,688,708)

(18,882,225)

Net

increase

(decrease)

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

(613,263)

$(4,282,273)

554,236

$3,756,831

Class

R6

Shares:

Shares

sold

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

5,611,314

$37,817,733

10,791,025

$76,072,674

Shares

issued

in

reinvestment

of

distributions

..........

634,986

4,241,705

2,743,028

18,899,459

Shares

redeemed

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

(7,425,099)

(49,434,501)

(36,204,674)

(253,945,383)

Net

increase

(decrease)

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

(1,178,799)

$(7,375,063)

(22,670,621)

$(158,973,250)

Advisor

Class

Shares:

Shares

sold

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

9,714,355

$63,063,108

54,602,589

$402,173,464

Shares

issued

in

reinvestment

of

distributions

..........

1,223,343

8,184,167

4,600,357

31,742,463

Shares

redeemed

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

(21,235,552)

(137,791,861)

(43,367,478)

(300,074,417)

Net

increase

(decrease)

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

(10,297,854)

$(66,544,586)

15,835,468

$133,841,510

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

2.

Shares

of

Beneficial

Interest

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

27

franklintempleton.com

Semiannual

Report

Templeton

Foreign

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,

2023,

the

annualized

gross

effective

investment

management

fee

rate

was

0.696%

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:

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%

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)

28

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

e.

Transfer

Agent

Fees

Each

class

of

shares pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

Effective

October

1,

2022,

the

fees

are

based

on

an

annualized

asset

based

fee

of

0.016%

plus

a

reduced

transaction

based

fee.

Prior

to

October

1,

2022,

the

fees

were

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,

2023,

the

Fund

paid

transfer

agent

fees

of

$2,012,737,

of

which

$619,858

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,

2023,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

g.

Waiver

and

Expense

Reimbursements

Global

Advisors

has

contractually

agreed

in

advance

to

waive

or

limit

its

respective

fees

and

to

assume

as

its

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,

2023.

Total

expenses

waived

or

paid

are

not

subject

to

recapture

subsequent

to

the

Fund's

fiscal

year

end.

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

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

$23,172

CDSC

retained

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

$1,943

    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,

4.204%

$23,064,789

$22,545,194

$(42,522,483)

$—

$—

$3,087,500

3,087,500

$150,899

Total

Affiliated

Securities

...

$23,064,789

$22,545,194

$(42,522,483)

$—

$—

$3,087,500

$150,899

3.

Transactions

with

Affiliates

(continued)

d.

Sales

Charges/Underwriting

Agreements

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

29

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

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,

2023.

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

August

31,

2022,

the

capital

loss

carryforwards

were

as

follows:

At

February

28,

2023,

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,

passive

foreign

investment

company

shares

and

wash

sales.

5.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

February

28,

2023,

aggregated

$175,562,551

and

$425,840,753,

respectively.

At

February

28,

2023,

in

connection

with

securities

lending

transactions,

the

Fund

loaned

equity

investments

and

received

$3,087,500

of

cash

collateral.

The

gross

amount

of

recognized

liability

for

such

transactions

is

included

in

payable

upon

return

of

securities

loaned

in

the

Statement

of

Assets

and

Liabilities.

The

agreements

can

be

terminated

at

any

time.

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.

Templeton

Foreign

Fund

Capital

loss

carryforwards

not

subject

to

expiration:

Long

term

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

$370,153,566

Cost

of

investments

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

$2,584,069,295

Unrealized

appreciation

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

$516,857,594

Unrealized

depreciation

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

(333,643,205)

Net

unrealized

appreciation

(depreciation)

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

$183,214,389

3.

Transactions

with

Affiliates

(continued)

g.

Waiver

and

Expense

Reimbursements

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

30

franklintempleton.com

Semiannual

Report

Templeton

Foreign

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,

2023,

the

effect

of

derivative

contracts

in

the

Statement

of

Operations

was

as

follows:

For

the

period

ended

February

28,

2023,

the

average

month

end

notional

amount

of

options

represented

26,714

shares.

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

2,

2024.

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,

2023,

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

Foreign

Fund

Net

realized

gain

(loss)

from:

Net

change

in

unrealized

  appreciation

(depreciation)

on:

Equity

Contracts

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

Written

options

$128,973

Written

options

$—

Total

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

$128,973

$–

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

31

franklintempleton.com

Semiannual

Report

Templeton

Foreign

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,

2023,

in

valuing

the

Fund's

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

12.

New

Accounting

Pronouncements

In June

2022,

the FASB

issued

Accounting

Standards

Update

(ASU)

No.

2022-03,

Fair

Value

Measurement

(Topic

820)

–

Fair

Value

Measurement

of

Equity

Securities

Subject

to

Contractual

Sale

Restrictions.

The

amendments

in

the

ASU

clarify

that

a

contractual

restriction

on

the

sale

of

an

equity

security

is

not

considered

part

of

the

unit

of

account

of

the

equity

security

and,

therefore,

should

not

be

considered

in

measuring

fair

value.

The

ASU

is

effective

for

interim

and

annual

reporting

periods

beginning

after

December

15,

2023,

with

the

option

of

early

adoption.

Management

has

reviewed

the

requirements

and

believes

that

the

adoption

of

the

ASU

will

not

have

a

material

impact

on

the

financial

statements.

Level

1

Level

2

Level

3

Total

Templeton

Foreign

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

China

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

$

58,001,109

$

142,979,575

$

—

$

200,980,684

France

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

—

156,659,618

—

156,659,618

Germany

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

—

375,861,368

—

375,861,368

Hong

Kong

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

—

106,139,129

—

106,139,129

India

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

—

55,805,251

—

55,805,251

Ireland

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

—

42,980,710

—

42,980,710

Japan

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

—

298,739,041

—

298,739,041

Netherlands

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

—

282,191,477

—

282,191,477

Portugal

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

—

34,269,144

—

34,269,144

South

Korea

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

—

217,869,181

—

217,869,181

Spain

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

—

16,323,482

—

16,323,482

Switzerland

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

—

53,196,754

—

53,196,754

Taiwan

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

—

67,714,019

—

67,714,019

Thailand

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

—

35,099,728

—

35,099,728

United

Kingdom

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

—

593,503,191

—

593,503,191

United

States

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

65,663,407

—

—

65,663,407

Short

Term

Investments

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

3,087,500

161,200,000

—

164,287,500

Total

Investments

in

Securities

...........

$126,752,016

$2,640,531,668

a

$—

$2,767,283,684

a

Includes

foreign

securities

valued

at

$2,479,331,668,

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

Notes

to

Financial

Statements

(unaudited)

32

franklintempleton.com

Semiannual

Report

Templeton

Foreign

Fund

(continued)

13.

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

Selected

Portfolio

ADR

American

Depositary

Receipt

Currency

GBP

British

Pound

HKD

Hong

Kong

Dollar

Templeton

Funds

Shareholder

Information

33

franklintempleton.com

Semiannual

Report

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

Schedule

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

schedule

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

04/23

©

2023

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

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areas

are

monitored

and/or

recorded.

Semiannual

Report

and

Shareholder

Letter

Templeton

Foreign

Fund

Investment

Manager

Distributor

Shareholder

Services

Templeton

Global

Advisors

Limited

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DIAL

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franklintempleton.com

(800)

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SEMIANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Templeton

International

Climate

Change

Fund

A

Series

of

Templeton

Funds

February

28,

2023

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

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Insured

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Value

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Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

February

28,

2023,

global

equities

rose

despite

continued

challenges

resulting

from

elevated

inflation

and

higher

interest

rates.

The

price

of

oil

fell,

and

several

other

commodities

that

were

disrupted

by

Russia’s

invasion

of

Ukraine

stabilized

at

or

near

their

pre-war

prices,

easing

inflationary

pressure.

China

ended

its

restrictive

zero-COVID

policy,

prompting

investor

optimism

that

a

return

to

normal

conditions

would

benefit

global

growth.

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

+7.30%

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,

2023,

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

6

Your

Fund’s

Expenses

8

Financial

Highlights

and

Schedule

of

Investments

9

Financial

Statements

15

Notes

to

Financial

Statements

19

Shareholder

Information

28

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,

2023.

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

Class

A

shares

posted

a

+22.89%

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

+7.30%

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

6

.

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

+3.32%

total

return

for

the

six

months

ended

February

28,

2023.

1

Despite

continued

challenges

from

elevated

inflation

and

higher

interest

rates,

stocks

gained

amid

signs

of

resilience

in

the

global

economy.

The

price

of

oil

fell,

and

several

other

commodities

that

were

disrupted

by

Russia’s

invasion

of

Ukraine

stabilized

at

or

near

their

pre-war

prices,

easing

inflationary

pressure.

China

ended

its

restrictive

zero-COVID

policy,

prompting

investor

optimism

that

a

return

to

normal

conditions

would

benefit

global

growth.

In

the

U.S.,

gross

domestic

product

growth

resumed

in

the

second

half

of

2022,

rebounding

from

contractions

in

the

first

two

quarters

of

the

year.

Increasing

consumer

and

government

spending,

rising

inventories

and

strong

nonresidential

fixed

investment

boosted

economic

growth.

Meanwhile,

inflation,

which

remained

heightened

relative

to

recent

decades,

showed

signs

of

easing.

The

annual

inflation

rate,

as

measured

by

the

consumer

price

index,

declined

each

month

from

September

2022

through

January

2023.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

target

rate

four

times

during

the

period

to

end

at

a

range

of

4.50%–4.75%.

The

Fed

slowed

the

pace

of

its

interest

rate

increases

from

75

basis

points

(bps)

at

its

September

and

November

2022

meetings

to

50

bps

in

December

and

25

bps

in

February

2023.

At

its

February

meeting,

the

Fed

noted

that

although

inflation

has

eased

somewhat,

it

remained

elevated,

and

job

growth

was

robust

while

the

unemployment

rate

continued

to

be

low.

Furthermore,

the

Fed

maintained

its

policy

of

reducing

its

accumulated

bond

holdings

and

decreasing

the

size

of

its

balance

sheet.

Geographic

Composition

2/28/23

%

of

Total

Net

Assets

Europe

61.2%

Asia

24.2%

North

America

7.2%

Latin

America

&

Caribbean

1.1%

Short-Term

Investments

&

Other

Net

Assets

6.3%

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

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

13

.

Templeton

International

Climate

Change

Fund

4

franklintempleton.com

Semiannual

Report

Economies

in

the

eurozone

maintained

a

slow

growth

rate

in

2022’s

third

and

fourth

quarters.

The

European

Central

Bank

continued

to

raise

interest

rates

during

the

six-month

period,

opting

to

increase

its

benchmark

rate

at

each

of

its

four

meetings

to

fight

growing

inflation.

While

the

ongoing

war

in

Ukraine

and

subsequent

sanctions

against

Russia

disrupted

the

supply

of

natural

gas

to

Europe,

alternate

supplies

and

reduced

industrial

consumption

helped

maintain

gas

inventories

at

historically

high

levels.

In

this

environment,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

+17.69%

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

-0.05%

total

return

for

the

six-month

period.

1

China’s

economy

grew

on

an

annual

basis

in

the

third

and

fourth

quarters

of

2022.

In

December

2022,

China

loosened

its

strict

zero-COVID

policy,

lifting

a

potential

barrier

to

continued

growth

and

driving

gains

in

China’s

equity

market.

Japan’s

economy

weakened

in

2022’s

third

quarter

before

returning

to

modest

growth

in

the

fourth

quarter,

driven

by

rising

private

consumption

amid

loosened

border

controls.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-2.29%

total

return

for

the

six

months

under

review.

1

Concerns

that

continued

strength

in

the

U.S.

economy

could

keep

Fed

monetary

policy

tight

negatively

impacted

stocks

in

developing

nations.

Stocks

in

these

countries

are

negatively

impacted

by

high

interest

rates

in

the

U.S.,

which

increase

the

yield

of

some

U.S.-based

assets,

making

them

relatively

more

attractive

to

investors.

Investment

Strategy

When

choosing

equity

investments

for

the

Fund,

we

apply

a

bottom-up,

value-oriented,

long-term

approach

to

select

securities

of

companies

we

believe

are

both

undervalued

and

meet

our

standards

for

transitioning

to

a

lower

carbon

economy.

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

significantly

outperformed

its

benchmark

index

during

the

six-month

period

ending

February

28,

2023.

Relative

performance

was

led

higher

during

the

six

months

by

stock

selection

in

the

industrials

sector.

Some

of

the

more

cyclical

European

holdings

in

this

sector

fared

well

on

the

back

of

a

mild

winter

in

Europe

and

an

easing

of

recessionary

fears.

The

most

significant

contributor

in

the

sector

was

French

building

materials

leader

Cie

de

Saint-

Gobain.

The

company’s

share

price

continued

to

rally

during

the

first

two

months

of

2023

due

to

a

strong

set

of

annual

results,

with

2022

earnings

and

its

guidance

for

full-year

2023

both

coming

in

ahead

of

consensus

expectations.

Saint-Gobain

was

our

largest

position

in

the

Fund

at

period-end

and

we

see

a

potential

for

significant

valuation

opportunity

as

other

investors

recognize

both

its

positive

environmental

contribution

through

sustainable

building

renovations

and

its

increasingly

resilient

business

structure.

Stock

selection

in

the

information

technology

sector

was

another

key

driver

of

outperformance

during

the

six-month

period,

mostly

due

to

holdings

in

the

semiconductors

&

semiconductor

equipment

industry.

The

industry

struggled

for

much

of

2022

due

to

a

combination

of

recessionary

fears

and

supply

concerns,

but

began

to

rebound

in

the

fourth

quarter.

The

reporting

of

strong

earnings

in

early

2023

from

the

likes

of

STMicroelectronics,

Taiwan

Semiconductor

Manufacturing

Co.

and

Infineon

Technologies

helped

the

industry

continue

its

recovery.

We

like

these

companies

as

high-quality

long-term

plays

on

several

trends

linked

to

decarbonization,

including

the

adoption

of

electric

vehicles,

the

“internet

of

things”

and

digitalization.

Top

10

Industries

2/28/23

%

of

Total

Net

Assets

a

Electrical

Equipment

18.0%

Semiconductors

&

Semiconductor

Equipment

11.8%

Banks

10.8%

Automobiles

10.1%

Multi-Utilities

8.6%

Metals

&

Mining

8.5%

Building

Products

5.8%

Electric

Utilities

5.3%

Auto

Components

3.8%

Containers

&

Packaging

3.8%

Templeton

International

Climate

Change

Fund

5

franklintempleton.com

Semiannual

Report

In

the

financials

sector,

stock

selection

also

made

a

substantial

contribution

to

relative

performance,

led

higher

by

banks

holdings,

with

both

ING

Groep

and

Standard

Chartered

outperforming

strongly

as

higher

net

interest

margins

started

to

feed

through

into

earnings

expectations.

U.K.-headquartered

bank

Standard

Chartered

was

the

leading

performer

during

the

final

month

of

the

reporting

window,

making

a

favorable

contribution

to

Fund

performance

due

to

a

combination

of

strong

earnings

momentum

and

rumors

of

a

potential

takeover.

We

continue

to

believe

many

investors

are

underestimating

the

potential

earnings

the

company

could

generate

from

higher

normalized

interest

rates

globally.

Not

many

holdings

hurt

relative

returns

during

the

reporting

period,

but

the

two

most

significant

detractors

were

both

Japan-based

automotive

manufacturers:

Honda

Motor

and

Toyota

Motor.

Both

companies

underperformed

after

the

Bank

of

Japan

relaxed

its

zero-interest

rate

policy,

which

caused

the

yen

to

appreciate.

With

a

substantial

share

of

profits

located

outside

of

Japan,

the

market

feared

earnings

downgrades

in

both

instances.

Honda,

however,

is

unlikely

to

materially

change

its

guidance

given

its

yen

assumptions

are

still

within

range

of

the

spot

market.

In

any

event,

Honda

is

naturally

hedged,

with

production

based

mostly

in

the

same

locale

as

sales.

From

a

geographic

perspective,

Netherlands,

Germany,

France,

the

U.K.

and

Switzerland

were

the

top

contributors

to

relative

performance,

while

a

lack

of

exposure

to

China

also

proved

beneficial.

Few

countries

detracted

from

relative

returns,

though

stock

selection

in

Spain

and

a

lack

of

exposure

to

Sweden

made

small

negative

contributions.

Thank

you

for

your

continued

participation

in

Templeton

International

Climate

Change

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Craig

Cameron,

CFA

Tina

Sadler,

CFA

Herbert

J.

Arnett,

Jr.

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

February

28,

2023,

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.

Top

10

Holdings

2/28/23

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Cie

de

Saint-Gobain

5.8%

Building

Products,

France

ING

Groep

NV

5.4%

Banks,

Netherlands

Standard

Chartered

plc

5.3%

Banks,

United

Kingdom

SSE

plc

4.4%

Electric

Utilities,

United

Kingdom

E.ON

SE

4.3%

Multi-Utilities,

Germany

Veolia

Environnement

SA

4.3%

Multi-Utilities,

France

Prysmian

SpA

4.2%

Electrical

Equipment,

Italy

Signify

NV

4.2%

Electrical

Equipment,

United

States

Sumitomo

Metal

Mining

Co.

Ltd.

4.1%

Metals

&

Mining,

Japan

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

4.1%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Top

10

Countries

2/28/23

a

%

of

Total

Net

Assets

a

a

France

13.8%

Germany

12.1%

United

Kingdom

11.0%

Japan

10.5%

United

States

7.2%

Netherlands

5.4%

Italy

4.2%

Taiwan

4.1%

Denmark

3.8%

Ireland

3.8%

CFA

®

is

a

trademark

owned

by

CFA

Institute.

Performance

Summary

as

of

February

28,

2023

Templeton

International

Climate

Change

Fund

6

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

2/28/23

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

+22.89%

+16.13%

1-Year

-2.31%

-7.69%

3-Year

+37.94%

+9.24%

Since

Inception

(6/1/18)

+30.73%

+4.56%

Advisor

6-Month

+23.06%

+23.06%

1-Year

-2.01%

-2.01%

3-Year

+39.06%

+11.62%

Since

Inception

(6/1/18)

+32.41%

+6.09%

See

page

7

for

Performance

Summary

footnotes.

Templeton

International

Climate

Change

Fund

Performance

Summary

7

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.

Equity

securities

are

subject

to

price

fluctuation

and

possible

loss

of

principal.

Diversification

does

not

guarantee

a

profit

or

protect

against

loss.

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.

Investing

in

companies

in

a

specific

region,

including

Europe,

is

subject

to

greater

risks

of

adverse

developments

in

that

region

and/or

the

surrounding

regions

than

an

investment

vehicle

that

is

more

broadly

diversified

geographically.

Investments

in

developing

markets,

of

which

frontier

markets

are

a

subset,

involve

heightened

risks

related

to

the

same

factors,

in

addition

to

those

associated

with

these

markets'

smaller

size,

lesser

liquidity

and

lack

of

established

legal,

political,

business

and

social

frameworks

to

support

securities

markets.

Derivatives,

including

currency

management

strategies,

involve

costs

and

can

create

economic

leverage

in

the

portfolio,

which

may

result

in

significant

volatility

and

cause

losses

(as

well

as

enable

gains)

on

an

amount

that

exceeds

the

initial

investment.

The

managers’

environmental,

social

and

governance

(ESG)

strategies

may

limit

the

types

and

number

of

investments

available

and,

as

a

result,

may

forego

favorable

market

opportunities

or

underperform

strategies

that

are

not

subject

to

such

criteria.

ESG

factors

or

criteria

are

subjective

and

qualitative,

and

the

analysis

by

the

manager

may

not

always

accurately

assess

ESG

practices

of

a

security

or

issuer,

or

reflect

the

opinions

of

other

investors

or

advisors.

There

is

no

guarantee

that

the

strategy's

ESG

directives

will

be

successful

or

will

result

in

better

performance

and

may

not

work

as

intended.

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.

Gross

expenses

are

the

Fund’s

total

annual

operating

expenses

as

of

the

Fund's

prospectus

available

at

the

time

of

publication.

Actual

expenses

may

be

higher

and

may

impact

portfolio

returns.

Net

expenses

reflect

contractual

fee

waivers,

expense

caps

and/or

reimbursements,

which

cannot

be

terminated

prior

to

12/31/23

without

Board

consent.

Additional

amounts

may

be

voluntarily

waived

and/or

reimbursed

and

may

be

modified

or

discontinued

at

any

time

without

notice.

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.

Effective

6/3/22,

the

Fund

began

offering

Class

A

shares.

Class

A

performance

shown

has

been

calculated

as

follows:

(a)

for

periods

prior

to

6/3/22,

a

restated

figure

is

used

based

on

the

Fund’s

Advisor

Class

performance

that

includes

any

Rule

12b-1

rate

differential

that

exists

between

Class

A

and

Advisor

Class;

and

(b)

for

periods

after

6/3/22,

actual

Class

A

performance

is

used,

reflecting

all

charges

and

fees

applicable

to

that

class.

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

(9/1/22–2/28/23)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

A

$0.1532

$0.4095

$0.5627

C

$0.1272

$0.4095

$0.5367

R6

$0.1528

$0.4095

$0.5623

Advisor

$0.1520

$0.4095

$0.5615

Total

Annual

Operating

Expenses

5

Share

Class

With

Fee

Waiver

Without

Fee

Waiver

A

1.22%

18.81%

Advisor

0.97%

9.16%

Your

Fund’s

Expenses

Templeton

International

Climate

Change

Fund

8

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

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

9/1/22

Ending

Account

Value

2/28/23

Expenses

Paid

During

Period

9/1/22–2/28/23

1,2

Ending

Account

Value

2/28/23

Expenses

Paid

During

Period

9/1/22–2/28/23

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,228.90

$6.48

$1,018.98

$5.87

1.17%

C

$1,000

$1,229.30

$5.91

$1,019.49

$5.35

1.07%

R6

$1,000

$1,230.70

$5.20

$1,020.13

$4.71

0.94%

Advisor

$1,000

$1,230.60

$5.15

$1,020.18

$4.66

0.93%

Templeton

Funds

Financial

Highlights

Templeton

International

Climate

Change

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

9

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

a

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

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

$9.73

$11.44

Income

from

investment

operations

b

:

Net

investment

income

c

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

0.02

0.03

Net

realized

and

unrealized

gains

(losses)

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

2.13

(1.74)

Total

from

investment

operations

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

2.15

(1.71)

Less

distributions

from:

Net

investment

income

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

(0.15)

—

Net

realized

gains

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

(0.41)

—

Total

distributions

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

(0.56)

—

Net

asset

value,

end

of

period

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

$11.32

$9.73

Total

return

d

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

22.89%

(15.03)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

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

9.11%

18.81%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.17%

1.23%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

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

1.17%

1.22%

Net

investment

income

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

0.33%

1.41%

Supplemental

data

Net

assets,

end

of

period

(000’s)

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

$201

$4

Portfolio

turnover

rate

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

15.

58%

35.15%

a

For

the

period

June

3,

2022

(effective

date)

to

August

31,

2022.

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

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.

Templeton

Funds

Financial

Highlights

Templeton

International

Climate

Change

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

10

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

a

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

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

$9.71

$11.44

Income

from

investment

operations

b

:

Net

investment

income

c

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

0.02

0.01

Net

realized

and

unrealized

gains

(losses)

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

2.15

(1.74)

Total

from

investment

operations

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

2.17

(1.73)

Less

distributions

from:

Net

investment

income

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

(0.13)

—

Net

realized

gains

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

(0.41)

—

Total

distributions

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

(0.54)

—

Net

asset

value,

end

of

period

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

$11.34

$9.71

Total

return

d

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

22.93%

(15.12)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

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

8.95%

18.95%

Expenses

net

of

waiver

and

payments

by

affiliates

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

1.07%

1.98%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

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

1.07%

1.97%

Net

investment

income

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

0.33%

0.57%

Supplemental

data

Net

assets,

end

of

period

(000’s)

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

$5

$4

Portfolio

turnover

rate

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

15.58%

35.15%

a

For

the

period

June

3,

2022

(effective

date)

to

August

31,

2022.

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

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.

Templeton

Funds

Financial

Highlights

Templeton

International

Climate

Change

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

11

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

a

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

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

$9.73

$11.44

Income

from

investment

operations

b

:

Net

investment

income

c

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

0.02

0.04

Net

realized

and

unrealized

gains

(losses)

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

2.16

(1.75)

Total

from

investment

operations

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

2.18

(1.71)

Less

distributions

from:

Net

investment

income

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

(0.15)

—

Net

realized

gains

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

(0.41)

—

Total

distributions

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

(0.56)

—

Net

asset

value,

end

of

period

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

$11.35

$9.73

Total

return

d

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

23.07%

(14.95)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

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

9.81%

20.46%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.94%

0.98%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

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

0.94%

0.97%

Net

investment

income

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

0.45%

1.57%

Supplemental

data

Net

assets,

end

of

period

(000’s)

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

$5

$4

Portfolio

turnover

rate

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

15.58%

35.15%

a

For

the

period

June

3,

2022

(effective

date)

to

August

31,

2022.

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.

Templeton

Funds

Financial

Highlights

Templeton

International

Climate

Change

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

12

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

Year

Ended

August

31,

2018

a

2022

2021

2020

2019

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$9.74

$14.68

$10.71

$8.91

$9.64

$10.00

Income

from

investment

operations

b

:

Net

investment

income

c

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

0.02

0.18

0.10

0.07

0.27

0.04

Net

realized

and

unrealized

gains

(losses)

2.16

(4.39)

3.96

2.03

(0.93)

(0.40)

Total

from

investment

operations

........

2.18

(4.21)

4.06

2.10

(0.66)

(0.36)

Less

distributions

from:

Net

investment

income

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

(0.15)

(0.13)

(0.09)

(0.30)

(0.05)

—

Net

realized

gains

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

(0.41)

(0.60)

—

—

(0.02)

—

Total

distributions

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

(0.56)

(0.73)

(0.09)

(0.30)

(0.07)

—

Net

asset

value,

end

of

period

..........

$11.36

$9.74

$14.68

$10.71

$8.91

$9.64

Total

return

d

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

23.06%

(29.83)%

37.89%

23.70%

(6.75)%

(3.60)%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

and

expense

reduction

........

8.84%

9.16%

8.16%

6.48%

9.65%

13.30%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.93%

0.98%

0.97%

0.97%

0.97%

0.97%

Expenses

net

of

waiver

and

payments

by

affiliates

and

expense

reduction

........

0.93%

0.97%

0.97%

f

0.97%

0.97%

0.97%

Net

investment

income

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

0.47%

1.47%

0.80%

0.74%

2.94%

1.51%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,341

$1,968

$2,935

$2,142

$1,783

$1,929

Portfolio

turnover

rate

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

15.58%

35.15%

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

Schedule

of

Investments

(unaudited),

February

28,

2023

Templeton

International

Climate

Change

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

13

a

a

Industry

Shares

a

Value

a

Common

Stocks

93.7%

Chile

1.1%

Antofagasta

plc

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

Metals

&

Mining

1,451

$

27,369

Denmark

3.8%

Vestas

Wind

Systems

A/S

..........

Electrical

Equipment

3,429

97,844

France

13.8%

Cie

de

Saint-Gobain

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

Building

Products

2,497

148,379

Valeo

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

Auto

Components

4,644

96,478

Veolia

Environnement

SA

..........

Multi-Utilities

3,634

108,454

353,311

Germany

12.1%

Bayerische

Motoren

Werke

AG

......

Automobiles

930

95,944

E.ON

SE

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

Multi-Utilities

10,078

109,960

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

2,876

101,742

307,646

Hong

Kong

1.0%

a

Cadeler

A/S

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

Construction

&

Engineering

5,443

24,631

India

2.4%

Kaveri

Seed

Co.

Ltd.

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

Food

Products

3,124

19,500

NHPC

Ltd.

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

Independent

Power

and

Renewable

Electricity

Producers

90,016

42,636

62,136

Ireland

3.8%

Smurfit

Kappa

Group

plc

...........

Containers

&

Packaging

2,577

96,139

Italy

4.2%

Prysmian

SpA

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

Electrical

Equipment

2,802

107,723

Japan

10.5%

Honda

Motor

Co.

Ltd.

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

Automobiles

3,465

90,108

Sumitomo

Metal

Mining

Co.

Ltd.

.....

Metals

&

Mining

2,842

105,802

Toyota

Motor

Corp.

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

Automobiles

5,200

70,879

266,789

Netherlands

5.4%

ING

Groep

NV

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

Banks

9,919

138,818

Norway

3.3%

Norsk

Hydro

ASA

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

Metals

&

Mining

11,604

84,471

Singapore

3.7%

STMicroelectronics

NV

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

Semiconductors

&

Semiconductor

Equipment

1,973

94,510

South

Korea

2.6%

Samsung

SDI

Co.

Ltd.

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

Electronic

Equipment,

Instruments

&

Components

125

65,777

Spain

3.7%

Red

Electrica

Corp.

SA

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

Electric

Utilities

1,371

22,743

a

Soltec

Power

Holdings

SA

..........

Electrical

Equipment

11,567

71,036

93,779

Taiwan

4.1%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.,

ADR

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

Semiconductors

&

Semiconductor

Equipment

1,200

104,484

Templeton

Funds

Schedule

of

Investments

(unaudited)

Templeton

International

Climate

Change

Fund

(continued)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

14

a

a

Industry

Shares

a

Value

a

Common

Stocks

(continued)

United

Kingdom

11.0%

AstraZeneca

plc

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

Pharmaceuticals

262

$

34,130

SSE

plc

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

Electric

Utilities

5,351

111,982

Standard

Chartered

plc

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

Banks

14,335

135,629

281,741

United

States

7.2%

Schneider

Electric

SE

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

Electrical

Equipment

475

76,217

b

Signify

NV,

144A,

Reg

S

...........

Electrical

Equipment

3,085

106,896

183,113

Total

Common

Stocks

(Cost

$2,061,667)

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

2,390,281

Short

Term

Investments

8.2%

a

a

Industry

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

8.2%

United

States

8.2%

c,d

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

4.204%

.........

208,212

208,212

Total

Money

Market

Funds

(Cost

$208,212)

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

208,212

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$208,212

)

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

208,212

a

a

a

Total

Investments

(Cost

$2,269,879)

101.9%

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

$2,598,493

Other

Assets,

less

Liabilities

(1.9)%

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

(46,770)

Net

Assets

100.0%

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

$2,551,723

a

a

a

See

Abbreviations

on

page

27

.

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,

2023,

the

value

of

this

security

was

$106,896,

representing

4.2%

of

net

assets.

c

See

Note

3(f)

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,

2023

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

15

Templeton

International

Climate

Change

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$2,061,667

Cost

-

Non-controlled

affiliates

(Note

3

f

)

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

208,212

Value

-

Unaffiliated

issuers

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

$2,390,281

Value

-

Non-controlled

affiliates

(Note

3

f

)

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

208,212

Cash

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

6

Receivables:

Dividends

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

5,175

Affiliates

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

19,869

Total

assets

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

2,623,543

Liabilities:

Payables:

Distribution

fees

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

40

Professional

fees

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

56,010

Deferred

tax

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

1,339

Accrued

expenses

and

other

liabilities

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

14,431

Total

liabilities

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

71,820

Net

assets,

at

value

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

$2,551,723

Net

assets

consist

of:

Paid-in

capital

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

$2,256,397

Total

distributable

earnings

(losses)

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

295,326

Net

assets,

at

value

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

$2,551,723

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

February

28,

2023

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

Templeton

International

Climate

Change

Fund

Class

A:

Net

assets,

at

value

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

$200,612

Shares

outstanding

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

17,719

Net

asset

value

per

share

a

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

$11.32

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

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

$11.98

Class

C:

Net

assets,

at

value

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

$4,958

Shares

outstanding

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

437

Net

asset

value

and

maximum

offering

price

per

share

a

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

$11.34

Class

R6:

Net

assets,

at

value

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

$4,961

Shares

outstanding

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

437

Net

asset

value

and

maximum

offering

price

per

share

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

$11.35

Advisor

Class:

Net

assets,

at

value

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

$2,341,192

Shares

outstanding

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

206,174

Net

asset

value

and

maximum

offering

price

per

share

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

$11.36

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,

2023

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

Templeton

International

Climate

Change

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$1,943)

Unaffiliated

issuers

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

$13,423

Non-controlled

affiliates

(Note

3

f

)

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

1,802

Total

investment

income

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

15,225

Expenses:

Management

fees

(Note

3

a

)

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

7,632

Distribution

fees:

(Note

3c

)

    Class

A

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

113

    Class

C

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

3

Transfer

agent

fees:

(Note

3e

)

    Class

A

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

7

    Class

R6

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

24

    Advisor

Class

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

212

Registration

and

filing

fees

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

36,937

Professional

fees

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

50,450

Trustees'

fees

and

expenses

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

117

Other

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

380

Total

expenses

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

95,875

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

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

(85,685)

Net

expenses

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

10,190

Net

investment

income

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

5,035

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

(24,847)

Foreign

currency

transactions

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

(8)

Net

realized

gain

(loss)

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

(24,855)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

486,467

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

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

267

Change

in

deferred

taxes

on

unrealized

appreciation

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

(180)

Net

change

in

unrealized

appreciation

(depreciation)

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

486,554

Net

realized

and

unrealized

gain

(loss)

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

461,699

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

$466,734

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.

18

Templeton

International

Climate

Change

Fund

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$5,035

$36,354

Net

realized

gain

(loss)

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

(24,855)

93,086

Net

change

in

unrealized

appreciation

(depreciation)

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

486,554

(978,202)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

466,734

(848,762)

Distributions

to

shareholders:

Class

A

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

(6,003)

—

Class

C

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

(235)

—

Class

R6

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

(246)

—

Advisor

Class

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

(113,512)

(147,060)

Total

distributions

to

shareholders

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

(119,996)

(147,060)

Capital

share

transactions:

(Note

2

)

Class

A

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

177,766

5,009

Class

C

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

—

5,000

Class

R6

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

—

5,000

Advisor

Class

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

46,899

25,871

Total

capital

share

transactions

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

224,665

40,880

Net

increase

(decrease)

in

net

assets

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

571,403

(954,942)

Net

assets:

Beginning

of

period

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

1,980,320

2,935,262

End

of

period

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

$2,551,723

$1,980,320

Templeton

Funds

19

franklintempleton.com

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

Templeton

International

Climate

Change

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.

The

Trust

follows

the

accounting

and

reporting

guidance

in

Financial

Accounting

Standards

Board

(FASB)

Accounting

Standards

Codification

Topic

946,

Financial

Services

–

Investment

Companies

(ASC

946)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP),

including,

but

not

limited

to,

ASC

946.

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.

Class

C

shares

automatically

convert

to

Class

A

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

Board

has

designated

the

Fund’s

investment

manager

as

the

valuation

designee

and

has

responsibility

for

oversight

of

valuation.

The

investment

manager

is

assisted

by

the

Fund’s

administrator

in

performing

this

responsibility,

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,

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,

2023,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

20

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

were

categorized

as

Level

2

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.

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,

2023,

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

a.

Financial

Instrument

Valuation 

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

21

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

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.

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,

2023,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund’s

shares

were

as

follows:

Six

Months

Ended

February

28,

2023

Year

Ended

August

31,

2022

a

Shares

Amount

Shares

Amount

Class

A

Shares:

Shares

sold

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

16,727

$172,073

630

$6,959

Shares

issued

in

reinvestment

of

distributions

..........

559

5,757

—

—

Shares

redeemed

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

(4)

(64)

(193)

(1,950)

Net

increase

(decrease)

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

17,282

$177,766

437

$5,009

Class

C

Shares:

Shares

sold

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

—

$—

437

$5,000

Net

increase

(decrease)

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

—

$—

437

$5,000

Class

R6

Shares:

Shares

sold

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

—

$—

437

$5,000

Net

increase

(decrease)

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

—

$—

437

$5,000

1.

Organization

and

Significant

Accounting

Policies

(continued)

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

22

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

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

Fund

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

FTIC

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

Six

Months

Ended

February

28,

2023

Year

Ended

August

31,

2022

a

Shares

Amount

Shares

Amount

Advisor

Class

Shares:

Shares

sold

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

5,151

$59,387

2,098

$25,871

Shares

issued

in

reinvestment

of

distributions

..........

117

1,212

—

—

Shares

redeemed

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

(1,192)

(13,700)

—

—

Net

increase

(decrease)

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

4,076

$46,899

2,098

$25,871

a

For

the

period

June

3,

2022

(effective

date)

to

August

31,

2022

for

Classes

A,

C

and

R6.

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

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

2.

Shares

of

Beneficial

Interest

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

23

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

Effective

May

1,

2023,

the

Fund

will

pay

fees,

calculated

daily

and

paid

monthly,

based

on

the

average

daily

net

assets

of

the

Fund

as

follows:

For

the

period

ended

February

28,

2023,

the

annualized

gross

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:

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

$500

million

0.690%

Over

$500

million,

up

to

and

including

$1

billion

0.675%

Over

$1

billion,

up

to

and

including

$5

billion

0.655%

Over

$5

billion,

up

to

and

including

$10

billion

0.635%

Over

$10

billion,

up

to

and

including

$15

billion

0.615%

Over

$15

billion,

up

to

and

including

$20

billion

0.605%

Over

$20

billion,

up

to

and

including

$25

billion

0.595%

Over

$25

billion,

up

to

and

including

$30

billion

0.585%

In

excess

of

$30

billion

Class

A

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

0.25%

Class

C

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

1.00%

Class

R

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

0.50%

3.

Transactions

with

Affiliates

(continued)

a.

Management

Fees

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

24

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

e.

Transfer

Agent

Fees

Each

class

of

shares pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

Effective

October

1,

2022,

the

fees

are

based

on

an

annualized

asset

based

fee

of

0.016%

plus

a

reduced

transaction

based

fee.

Prior

to

October

1,

2022,

the

fees

were

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,

2023,

the

Fund

paid

transfer

agent

fees

of

$243,

which

were

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,

2023,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

g.

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,

2023.

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,

2023.

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

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

$103

    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,

4.204%

$

81,707

$

542,082

$

(415,577)

$

—

$

—

$

208,212

208,212

$

1,802

Total

Affiliated

Securities

...

$81,707

$542,082

$(415,577)

$—

$—

$208,212

$1,802

3.

Transactions

with

Affiliates

(continued)

d.

Sales

Charges/Underwriting

Agreements

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

25

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

h.

Other

Affiliated

Transactions

At

February

28,

2023,

Franklin

Resources,

Inc.

owned

89.0%

of

the

Fund's

outstanding

shares.

Investment

activities

of

this

shareholder

could

have

a

material

impact

on

the

Fund.

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,

2023,

there

were

no

credits

earned. 

5.

Income

Taxes

At

February

28,

2023,

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,

wash

sales,

foreign

capital

gains

tax

and

corporate

actions.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

period

ended

February

28,

2023,

aggregated

$335,957

and

$328,385,

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.

Cost

of

investments

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

$2,281,676

Unrealized

appreciation

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

$431,648

Unrealized

depreciation

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

(114,831)

Net

unrealized

appreciation

(depreciation)

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

$316,817

3.

Transactions

with

Affiliates

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

26

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

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.

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

2,

2024.

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,

2023,

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,

2023,

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

:

Chile

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

$

—

$

27,369

$

—

$

27,369

Denmark

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

—

97,844

—

97,844

France

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

—

353,311

—

353,311

Germany

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

—

307,646

—

307,646

Hong

Kong

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

—

24,631

—

24,631

India

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

—

62,136

—

62,136

Ireland

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

—

96,139

—

96,139

Italy

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

—

107,723

—

107,723

Japan

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

—

266,789

—

266,789

Netherlands

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

—

138,818

—

138,818

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

27

franklintempleton.com

Semiannual

Report

Templeton

International

Climate

Change

Fund

(continued)

12.

New

Accounting

Pronouncements

In June

2022,

the

FASB

issued

Accounting

Standards

Update

(ASU)

No.

2022-03,

Fair

Value

Measurement

(Topic

820)

–

Fair

Value

Measurement

of

Equity

Securities

Subject

to

Contractual

Sale

Restrictions.

The

amendments

in

the

ASU

clarify

that

a

contractual

restriction

on

the

sale

of

an

equity

security

is

not

considered

part

of

the

unit

of

account

of

the

equity

security

and,

therefore,

should

not

be

considered

in

measuring

fair

value.

The

ASU

is

effective

for

interim

and

annual

reporting

periods

beginning

after

December

15,

2023,

with

the

option

of

early

adoption.

Management

has

reviewed

the

requirements

and

believes

that

the

adoption

of

the

ASU

will

not

have

a

material

impact

on

the

financial

statements.

13.

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

other

than

those

already

disclosed

in

the

financial

statements.

Abbreviations

Level

1

Level

2

Level

3

Total

Templeton

International

Climate

Change

Fund

(continued)

Assets:

(continued)

Investments

in

Securities:

Common

Stocks:

Norway

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

$

—

$

84,471

$

—

$

84,471

Singapore

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

—

94,510

—

94,510

South

Korea

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

—

65,777

—

65,777

Spain

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

—

93,779

—

93,779

Taiwan

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

104,484

—

—

104,484

United

Kingdom

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

—

281,741

—

281,741

United

States

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

—

183,113

—

183,113

Short

Term

Investments

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

208,212

—

—

208,212

Total

Investments

in

Securities

...........

$312,696

$2,285,797

a

$—

$2,598,493

a

Includes

foreign

securities

valued

at

$2,285,797,

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

11.

Fair

Value

Measurements

(continued)

Templeton

Funds

Shareholder

Information

28

franklintempleton.com

Semiannual

Report

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

Schedule

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

schedule

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.

6316

S

04/23

©

2023

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

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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,

2023

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Not

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Insured

May

Lose

Value

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Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

February

28,

2023,

global

equities

rose

despite

continued

challenges

resulting

from

elevated

inflation

and

higher

interest

rates.

The

price

of

oil

fell,

and

several

other

commodities

that

were

disrupted

by

Russia’s

invasion

of

Ukraine

stabilized

at

or

near

their

pre-war

prices,

easing

inflationary

pressure.

China

ended

its

restrictive

zero-COVID

policy,

prompting

investor

optimism

that

a

return

to

normal

conditions

would

benefit

global

growth.

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

+3.32%

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,

2023,

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

7

Your

Fund’s

Expenses

9

Financial

Highlights

and

Schedule

of

Investments

10

Financial

Statements

16

Notes

to

Financial

Statements

20

Shareholder

Information

29

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,

2023.

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

+5.78%

cumulative

total

return

for

the

six

months

under

review.

In

comparison,

the

Fund’s

benchmark,

the

MSCI

All

Country

World

Index

(ACWI)-NR,

which

measures

stock

performance

in

global

developed

and

emerging

markets,

posted

a

+3.32%

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

+3.32%

total

return

for

the

six

months

ended

February

28,

2023.

1

Despite

continued

challenges

from

elevated

inflation

and

higher

interest

rates,

stocks

gained

amid

signs

of

resilience

in

the

global

economy.

The

price

of

oil

fell,

and

several

other

commodities

that

were

disrupted

by

Russia’s

invasion

of

Ukraine

stabilized

at

or

near

their

pre-war

prices,

easing

inflationary

pressure.

China

ended

its

restrictive

zero-COVID

policy,

prompting

investor

optimism

that

a

return

to

normal

conditions

would

benefit

global

growth.

In

the

U.S.,

gross

domestic

product

growth

resumed

in

the

second

half

of

2022,

rebounding

from

contractions

in

the

first

two

quarters

of

the

year.

Increasing

consumer

and

government

spending,

rising

inventories

and

strong

nonresidential

fixed

investment

boosted

economic

growth.

Meanwhile,

inflation,

which

remained

heightened

relative

to

recent

decades,

showed

signs

of

easing.

The

annual

inflation

rate,

as

measured

by

the

consumer

price

index,

declined

each

month

from

September

2022

through

January

2023.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

target

rate

four

times

during

the

period

to

end

at

a

range

of

4.50%–4.75%.

The

Fed

slowed

the

pace

of

its

interest

rate

increases

from

75

basis

points

(bps)

at

its

September

and

November

2022

meetings

to

50

bps

in

December

and

25

bps

in

February

2023.

At

its

February

meeting,

the

Fed

noted

that

although

inflation

has

eased

somewhat,

it

remained

elevated,

and

job

growth

was

robust

while

the

unemployment

rate

continued

to

be

low.

Furthermore,

the

Fed

maintained

its

policy

of

reducing

its

accumulated

bond

holdings

and

decreasing

the

size

of

its

balance

sheet.

Economies

in

the

eurozone

maintained

a

slow

growth

rate

in

2022’s

third

and

fourth

quarters.

The

European

Central

Bank

continued

to

raise

interest

rates

during

the

six-month

period,

opting

to

increase

its

benchmark

rate

at

each

of

its

four

meetings

to

fight

growing

inflation.

While

the

ongoing

war

in

Ukraine

and

subsequent

sanctions

against

Russia

disrupted

the

supply

of

natural

gas

to

Europe,

alternate

supplies

Geographic

Composition

2/28/23

%

of

Total

Net

Assets

North

America

61.9%

Europe

24.1%

Asia

10.9%

Short-Term

Investments

&

Other

Net

Assets

3.1%

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

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

14

.

Templeton

World

Fund

4

franklintempleton.com

Semiannual

Report

and

reduced

industrial

consumption

helped

maintain

gas

inventories

at

historically

high

levels.

In

this

environment,

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

posted

a

+17.69%

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

-0.05%

total

return

for

the

six-month

period.

1

China’s

economy

grew

on

an

annual

basis

in

the

third

and

fourth

quarters

of

2022.

In

December

2022,

China

loosened

its

strict

zero-COVID

policy,

lifting

a

potential

barrier

to

continued

growth

and

driving

gains

in

China’s

equity

market.

Japan’s

economy

weakened

in

2022’s

third

quarter

before

returning

to

modest

growth

in

the

fourth

quarter,

driven

by

rising

private

consumption

amid

loosened

border

controls.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-2.29%

total

return

for

the

six

months

under

review.

1

Concerns

that

continued

strength

in

the

U.S.

economy

could

keep

Fed

monetary

policy

tight

negatively

impacted

stocks

in

developing

nations.

Stocks

in

these

countries

are

negatively

impacted

by

high

interest

rates

in

the

U.S.,

which

increase

the

yield

of

some

U.S.-based

assets,

making

them

relatively

more

attractive

to

investors.

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.

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

In

a

six-month

period

characterized

by

elevated

uncertainty

and

shifting

market

trends,

Templeton

World

Fund

delivered

absolute

gains

and

outperformed

its

benchmark

MSCI

ACWI-NR

by

the

largest

margin

in

six

years.

Outperformance

during

the

period

was

primarily

attributable

to

stock

selection,

which

was

encouraging

given

the

volatility

in

factor

trends

during

the

period.

In

our

view,

outperformance

absent

a

strong

style

regime

is

a

good

sign

as

it

highlights

the

portfolio’s

idiosyncratic

return

potential

and

the

positive

impact

of

stock

selection.

Templeton

World

Fund’s

portfolio

has

a

“quality

value”

bias

that

favors

what

we

view

as

reasonably

valued

companies

with

strong

fundamentals,

good

competitive

positions

and

attractive

growth

prospects.

We

refer

to

the

types

of

companies

that

we

own

as

“leaders”

because,

in

our

assessment,

they

are

either

currently

among

the

best-in-

class

in

their

respective

business

segments

or

they

are

moving

in

that

direction

over

our

investment

horizon.

While

we

like

these

companies

for

their

quality

characteristics,

our

long-term

horizon

and

focus

on

fundamental

valuations

means

that

the

Fund’s

holdings

often

look

quite

different

than

those

found

in

a

simple

quality

factor

index.

To

this

end,

we

were

particularly

pleased

to

outperform

during

a

period

when

the

global

quality

factor

remained

largely

out

of

favor.

Market

leadership

during

the

semiannual

review

period

was

initially

dominated

by

large-capitalization

defensive

U.S.

value

stocks

at

a

time

when

policy

tightening,

U.S.

dollar

strength

and

slowing

economic

indicators

raised

expectations

of

a

global

recession.

As

the

period

progressed,

investors

began

to

focus

on

early

signs

that

inflation

could

be

peaking.

Consequently,

entering

2023,

rising

expectations

of

a

dovish

policy

pivot

from

the

Fed

led

to

a

revival

in

risk

appetite,

a

pull-back

in

the

U.S.

dollar,

and

a

resurgence

in

international

cyclical

growth

stocks.

However,

renewed

signs

of

more

persistent

inflation

late

in

the

period

led

to

increased

hawkishness

from

central

bankers,

causing

a

rotation

out

of

rate-sensitive

emerging

market

stocks

and

back

into

developed

market

equities,

particularly

in

Europe.

Top

10

Industries

2/28/23

%

of

Total

Net

Assets

a

Semiconductors

&

Semiconductor

Equipment

11.6%

Software

11.5%

Oil,

Gas

&

Consumable

Fuels

7.5%

Internet

&

Direct

Marketing

Retail

7.2%

Interactive

Media

&

Services

6.1%

Wireless

Telecommunication

Services

4.9%

Health

Care

Providers

&

Services

4.6%

Beverages

4.2%

Pharmaceuticals

4.0%

Media

3.4%

Templeton

World

Fund

5

franklintempleton.com

Semiannual

Report

European

outperformance

was

the

most

consistent

market

trend

during

a

period

otherwise

characterized

by

ongoing

leadership

rotations.

In

fact,

it

was

the

best

six-month

period

for

European

equities

(relative

to

the

rest

of

the

world)

in

at

least

two

decades

as

mild

winter

weather

quelled

fears

of

an

energy

crisis

on

the

continent

and

investors

gravitated

to

the

region’s

relatively

inexpensive

valuations.

The

Fund’s

European

holdings

were

the

primary

regional

contributors,

led

by

a

favorable

overweighted

allocation

and

stock

selection

in

the

U.K.

Our

European

overweight

also

had

a

meaningfully

positive

currency

impact

given

the

strength

of

both

the

British

pound

and

the

euro

versus

the

U.S.

dollar.

Asian

holdings

also

outperformed,

led

by

stock

selection

and

favorable

allocations

in

Hong

Kong

(overweight)

and

Japan

(underweight).

North

American

holdings

were

the

primary

detractors,

pressured

by

stock

selection

in

the

U.S.

Large-capitalization

technology-adjacent

stocks

in

the

U.S.

were

out

of

favor

during

the

period,

and

our

positions

in

companies

like

e-commerce

retailer

Amazon.com,

internet

search

firm

Alphabet,

media

giant

and

theme

park

operator

Walt

Disney

and

software

developer

Microsoft—all

of

which

we

consider

to

be

reasonably

valued

“leaders”—negatively

impacted

performance.

Of

the

four

aforementioned

stocks,

only

Microsoft

is

an

information

technology

(IT)

sector

constituent

(Amazon

is

consumer

discretionary,

and

Alphabet

and

Disney

hail

from

communication

services).

Thus,

despite

the

pressure

on

technology-adjacent

stocks,

the

Fund’s

IT

holdings

were

actually

the

top

contributors

during

the

period.

Stock

selection

also

contributed.

Absolute

and

relative

returns

were

significantly

supported

by

our

avoidance

of

what

we

viewed

as

expensive

technology

stocks

with

uncertain

paths

to

profitability,

and

focused

instead

on

established

leaders

like

German

enterprise

software

firm

SAP

and

a

handful

of

cyclically

depressed

semiconductor

stocks

(Germany’s

Infineon

Technologies

and

U.S.-based

Microchip

Technology

and

Applied

Materials

were

all

among

the

top

10

contributors).

Industrials

was

the

other

major

sector

contributor

during

the

period,

led

by

U.K.

aerospace

and

defense

firm

Rolls-

Royce

Holdings,

which

rallied

on

strong

earnings

results.

The

company

is

in

the

midst

of

a

strategic

review,

with

new

medium-term

financial

targets

expected

to

be

released

in

the

latter

half

of

2023.

Overall,

the

firm’s

balance

sheet

is

improving,

with

positive

cash

flow

dynamics

and

a

healthy

industry

demand

profile.

Furthermore,

the

ongoing

recovery

in

international

long-haul

travel

significantly

benefits

Rolls-Royce

given

its

long-term

service

contracts,

which

tie

revenues

to

engine

flight

hours.

More

generally,

we

increased

exposure

to

cyclicals

(like

Rolls-Royce)

early

last

year

when

policy

tightening

and

higher

interest

rates

increased

concerns

about

a

possible

global

recession,

creating

select

opportunities

among

economically

sensitive

stocks.

We

trimmed

some

of

these

exposures

during

the

review

period

as

pockets

of

optimism

returned

and

cyclical

stocks

were

re-rated

higher.

Turning

to

detractors,

communication

services

was

the

biggest

laggard,

pressured

by

the

previously

mentioned

Alphabet

and

Disney.

Shares

of

Disney

were

volatile

during

the

period

given

well-known

industry

and

company

challenges,

including

a

leadership

rotation

that

saw

the

replacement

of

the

firm’s

beleaguered

CEO,

Bob

Chapek,

with

former

long-time

Disney

boss

Bob

Iger.

We

have

been

encouraged

by

Iger’s

early

efforts

to

communicate

a

strategy

that

transitions

Disney

out

of

its

expensive

Top

10

Holdings

2/28/23

Company

Industry

,

Country

%

of

Total

Net

Assets

a

a

Amazon.com,

Inc.

5.4%

Internet

&

Direct

Marketing

Retail,

United

States

Microsoft

Corp.

4.8%

Software,

United

States

Alphabet,

Inc.

4.1%

Interactive

Media

&

Services,

United

States

T-Mobile

US,

Inc.

3.9%

Wireless

Telecommunication

Services,

United

States

SAP

SE

3.5%

Software,

Germany

Salesforce,

Inc.

3.2%

Software,

United

States

UnitedHealth

Group,

Inc.

3.2%

Health

Care

Providers

&

Services,

United

States

LVMH

Moet

Hennessy

Louis

Vuitton

SE

3.0%

Textiles,

Apparel

&

Luxury

Goods,

France

Rolls-Royce

Holdings

plc

3.0%

Aerospace

&

Defense,

United

Kingdom

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

2.9%

Semiconductors

&

Semiconductor

Equipment,

Taiwan

Top

10

Countries

2/28/23

a

%

of

Total

Net

Assets

a

a

United

States

61.9%

United

Kingdom

9.3%

Germany

7.6%

Japan

3.6%

France

3.0%

Taiwan

2.9%

India

2.3%

Belgium

2.1%

Hong

Kong

2.1%

Netherlands

2.1%

Templeton

World

Fund

6

franklintempleton.com

Semiannual

Report

pursuit

of

streaming

market

share

and

towards

a

path

of

greater

efficiency.

Near-term

pressures

aside,

we

believe

the

changes

underway

at

Disney

have

the

potential

to

significantly

unlock

additional

value

for

shareholders.

Management

plans

to

significantly

cut

costs

and

reinstate

the

company’s

dividend

by

the

end

of

the

year.

Furthermore,

an

activist

investor

remains

involved

and

is

likely

to

keep

pressure

on

management

to

execute

a

strategy

that

we

largely

support.

At

current

valuations,

the

stock

remains

a

core

portfolio

holding.

Financials

was

the

other

notable

sector

laggard

during

the

period,

though

there

were

no

financials

holdings

among

the

Fund’s

10

biggest

detractors.

The

Fund’s

financials

holdings

delivered

high

single-digit

gains,

but

were

pressured

by

a

significant

underweighted

allocation

to

the

market-

leading

sector,

which

benefited

from

rising

interest

rates

and

earnings

expectations.

Our

exposures

to

the

sector

remain

highly

selective.

We’ve

entirely

avoided

banks

in

low-returning,

over-regulated

markets

with

elevated

credit

risk,

and

focused

instead

on

companies

in

the

diversified

financials

and

insurance

industries

operating

in

attractive

end-markets

and

featuring

unique

business

models

and

profit

drivers.

At

Templeton,

we

think

creatively

about

the

many

ways

that

value

gets

created

over

time.

The

result

is

a

process

that

combines

analytical

rigor

with

a

dynamic

approach

to

value

that

covers

a

range

of

different

investment

profiles.

One

of

the

objectives

underpinning

our

use

of

the

full

spectrum

of

value

is

the

independence

it

creates

from

the

large

momentum

shifts

that

so

often

buffet

markets.

We

seek

to

build

portfolios

that

will

not

be

whipsawed

by

the

whims

of

the

equity

market

as

investors

rotate

between

narratives.

If

we

can

successfully

manage

the

volatility

associated

with

these

swings,

we

can

then

focus

on

pursuing

alpha

over

time

through

stock

picking—that

is,

through

the

evaluation

of

long-term

business

fundamentals

and

buying

shares

at

a

discount

to

their

intrinsic

worth.

Templeton

World

Fund

is

full

of

companies

that

we

view

as

attractively

valued

and

high

quality

with

idiosyncratic

risk-return

characteristics.

We

believe

the

portfolio

is

well

positioned

to

support

performance

over

time,

particularly

if

the

market

continues

to

move

away

from

macroeconomic

themes

and

towards

a

more

discriminate

assessment

of

bottom-up

value.

Thank

you

for

your

continued

participation

in

Templeton

World

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Peter

M.

Moeschter,

CFA

Lead

Portfolio

Manager

Herbert

J.

Arnett,

Jr.

Christopher

James

Peel,

CFA

Warren

Pustam,

CFA

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

February

28,

2023,

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,

2023

Templeton

World

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

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

2/28/23

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

+5.78%

-0.05%

1-Year

-11.61%

-16.49%

5-Year

-3.48%

-1.83%

10-Year

+37.31%

+2.64%

Advisor

6-Month

+5.88%

+5.88%

1-Year

-11.44%

-11.44%

5-Year

-2.30%

-0.46%

10-Year

+40.65%

+3.47%

See

page

8

for

Performance

Summary

footnotes.

Templeton

World

Fund

Performance

Summary

8

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.

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

total

annual

operating

expenses

are

as

of

the

Fund's

prospectus

available

at

the

time

of

publication.

Actual

expenses

may

be

higher

and

may

impact

portfolio

returns.

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

(9/1/22–2/28/23)

Share

Class

Net

Investment

Income

Long-Term

Capital

Gain

Total

A

$0.0466

$0.1356

$0.1822

C

–

$0.1356

$0.1356

R6

$0.0736

$0.1356

$0.2092

Advisor

$0.0680

$0.1356

$0.2036

Total

Annual

Operating

Expenses

5

Share

Class

A

1.05%

Advisor

0.81%

Your

Fund’s

Expenses

Templeton

World

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”

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

reimbursem

ents.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

9/1/22

Ending

Account

Value

2/28/23

Expenses

Paid

During

Period

9/1/22–2/28/23

1,2

Ending

Account

Value

2/28/23

Expenses

Paid

During

Period

9/1/22–2/28/23

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,057.80

$5.38

$1,019.57

$5.28

1.05%

C

$1,000

$1,053.40

$9.21

$1,015.82

$9.04

1.81%

R6

$1,000

$1,058.50

$3.88

$1,021.03

$3.81

0.76%

Advisor

$1,000

$1,058.80

$4.13

$1,020.78

$4.05

0.81%

Templeton

Funds

Financial

Highlights

Templeton

World

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

10

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.85

$15.52

$12.71

$12.76

$17.24

$16.94

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(—)

c

(—)

c

0.20

d

0.16

0.29

0.28

Net

realized

and

unrealized

gains

(losses)

0.68

(3.44)

2.61

0.45

(2.17)

1.03

Total

from

investment

operations

........

0.68

(3.44)

2.81

0.61

(1.88)

1.31

Less

distributions

from:

Net

investment

income

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

(0.05)

(0.23)

—

(0.50)

(0.67)

(0.02)

Net

realized

gains

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

(0.14)

—

—

(0.16)

(1.93)

(0.99)

Total

distributions

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

(0.19)

(0.23)

—

(0.66)

(2.60)

(1.01)

Net

asset

value,

end

of

period

..........

$12.34

$11.85

$15.52

$12.71

$12.76

$17.24

Total

return

e

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

5.78%

(22.39)%

22.11%

4.47%

(10.22)%

7.81%

Ratios

to

average

net

assets

f

Expenses

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

1.05%

g

1.04%

1.03%

g

1.05%

1.05%

g

1.04%

h

Net

investment

income

(loss)

..........

(0.03)%

(—)%

i

1.42%

d

1.29%

2.06%

1.64%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$2,120,966

$2,138,297

$3,060,714

$2,831,844

$3,150,057

$3,973,648

Portfolio

turnover

rate

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

23.41%

81.20%

41.83%

52.25%

25.16%

28.39%

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

0.48%.

e

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

f

Ratios

are

annualized

for

periods

less

than

one

year.

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%.

i

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

11

a

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.30

$14.76

$12.18

$12.26

$16.35

$16.21

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

(0.04)

(0.10)

0.10

c

0.07

0.13

0.14

Net

realized

and

unrealized

gains

(losses)

0.64

(3.29)

2.48

0.42

(2.01)

0.99

Total

from

investment

operations

........

0.60

(3.39)

2.58

0.49

(1.88)

1.13

Less

distributions

from:

Net

investment

income

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

—

(0.07)

—

(0.41)

(0.28)

—

Net

realized

gains

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

(0.14)

—

—

(0.16)

(1.93)

(0.99)

Total

distributions

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

(0.14)

(0.07)

—

(0.57)

(2.21)

(0.99)

Net

asset

value,

end

of

period

..........

$11.76

$11.30

$14.76

$12.18

$12.26

$16.35

Total

return

d

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

5.34%

(23.01)%

21.18%

3.61%

(10.94)%

7.01%

Ratios

to

average

net

assets

e

Expenses

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

1.81%

f

1.81%

1.80%

f

1.82%

1.80%

f

1.80%

g

Net

investment

income

(loss)

..........

(0.79)%

(0.77)%

0.70%

c

0.54%

1.31%

0.88%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$6,415

$7,348

$12,585

$18,630

$28,850

$117,879

Portfolio

turnover

rate

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

23.41%

81.20%

41.83%

52.25%

25.16%

28.39%

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

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.

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,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.86

$15.53

$12.69

$12.73

$17.21

$16.92

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.02

0.04

0.24

c

0.20

0.34

0.33

Net

realized

and

unrealized

gains

(losses)

0.66

(3.43)

2.60

0.45

(2.17)

1.03

Total

from

investment

operations

........

0.68

(3.39)

2.84

0.65

(1.83)

1.36

Less

distributions

from:

Net

investment

income

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

(0.07)

(0.28)

—

(0.53)

(0.72)

(0.08)

Net

realized

gains

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

(0.14)

—

—

(0.16)

(1.93)

(0.99)

Total

distributions

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

(0.21)

(0.28)

—

(0.69)

(2.65)

(1.07)

Net

asset

value,

end

of

period

..........

$12.33

$11.86

$15.53

$12.69

$12.73

$17.21

Total

return

d

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

5.85%

(22.14)%

22.38%

4.71%

(9.88)%

8.13%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

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

0.78%

0.78%

0.78%

0.79%

0.77%

0.74%

Expenses

net

of

waiver

and

payments

by

affiliates

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

0.76%

0.76%

0.76%

0.76%

0.75%

0.72%

f

Net

investment

income

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

0.26%

0.29%

1.68%

c

1.59%

2.36%

1.96%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$35,645

$34,238

$42,010

$38,885

$43,595

$51,431

Portfolio

turnover

rate

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

23.41%

81.20%

41.83%

52.25%

25.16%

28.39%

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

0.74%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

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,

2023

(unaudited)

Year

Ended

August

31,

2022

2021

2020

2019

2018

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$11.86

$15.54

$12.70

$12.74

$17.23

$16.93

Income

from

investment

operations

a

:

Net

investment

income

b

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

0.01

0.03

0.24

c

0.19

0.33

0.32

Net

realized

and

unrealized

gains

(losses)

0.68

(3.44)

2.60

0.45

(2.17)

1.03

Total

from

investment

operations

........

0.69

(3.41)

2.84

0.64

(1.84)

1.35

Less

distributions

from:

Net

investment

income

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

(0.07)

(0.27)

—

(0.52)

(0.72)

(0.06)

Net

realized

gains

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

(0.14)

—

—

(0.16)

(1.93)

(0.99)

Total

distributions

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

(0.21)

(0.27)

—

(0.68)

(2.65)

(1.05)

Net

asset

value,

end

of

period

..........

$12.34

$11.86

$15.54

$12.70

$12.74

$17.23

Total

return

d

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

5.88%

(22.22)%

22.36%

4.66%

(9.99)%

8.09%

Ratios

to

average

net

assets

e

Expenses

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

0.81%

f

0.81%

0.80%

f

0.81%

0.80%

f

0.80%

g

Net

investment

income

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

0.21%

0.24%

1.64%

c

1.53%

2.31%

1.88%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$71,079

$86,424

$115,823

$99,546

$112,891

$146,883

Portfolio

turnover

rate

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

23.41%

81.20%

41.83%

52.25%

25.16%

28.39%

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

0.70%.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

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

Schedule

of

Investments

(unaudited),

February

28,

2023

Templeton

World

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

14

a

a

Industry

Shares

a

Value

a

Common

Stocks

96.9%

Belgium

2.1%

Anheuser-Busch

InBev

SA/NV

......

Beverages

786,720

$

47,721,345

France

3.0%

LVMH

Moet

Hennessy

Louis

Vuitton

SE

Textiles,

Apparel

&

Luxury

Goods

81,820

68,019,192

Germany

7.6%

Deutsche

Boerse

AG

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

Capital

Markets

334,180

58,272,315

Infineon

Technologies

AG

..........

Semiconductors

&

Semiconductor

Equipment

890,349

31,497,361

SAP

SE

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

Software

696,150

79,090,287

168,859,963

Hong

Kong

2.1%

AIA

Group

Ltd.

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

Insurance

4,460,034

47,399,809

India

2.3%

Housing

Development

Finance

Corp.

Ltd.

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

Diversified

Financial

Services

689,200

21,732,473

Reliance

Industries

Ltd.

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

Oil,

Gas

&

Consumable

Fuels

1,041,340

29,215,594

50,948,067

Japan

3.6%

KDDI

Corp.

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

Wireless

Telecommunication

Services

768,800

22,495,109

Tokyo

Electron

Ltd.

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

Semiconductors

&

Semiconductor

Equipment

122,450

42,015,931

Toyota

Industries

Corp.

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

Machinery

287,590

16,874,195

81,385,235

Netherlands

2.1%

Shell

plc

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

Oil,

Gas

&

Consumable

Fuels

1,509,990

45,888,471

Taiwan

2.9%

Taiwan

Semiconductor

Manufacturing

Co.

Ltd.

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

Semiconductors

&

Semiconductor

Equipment

3,923,559

64,375,361

United

Kingdom

9.3%

AstraZeneca

plc

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

Pharmaceuticals

325,559

42,409,678

BP

plc

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

Oil,

Gas

&

Consumable

Fuels

5,743,824

37,742,589

a,b

Just

Eat

Takeaway.com

NV,

144A,

Reg

S

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

Internet

&

Direct

Marketing

Retail

1,869,322

40,658,343

a

Rolls-Royce

Holdings

plc

..........

Aerospace

&

Defense

37,885,475

66,002,351

a

S4

Capital

plc

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

Media

8,235,350

20,298,267

207,111,228

United

States

61.9%

a

Alphabet,

Inc.,

A

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

Interactive

Media

&

Services

1,026,770

92,470,906

a

Amazon.com,

Inc.

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

Internet

&

Direct

Marketing

Retail

1,278,900

120,510,747

American

Express

Co.

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

Consumer

Finance

97,031

16,882,424

Applied

Materials,

Inc.

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

Semiconductors

&

Semiconductor

Equipment

396,690

46,075,543

a

Booking

Holdings,

Inc.

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

Hotels,

Restaurants

&

Leisure

11,269

28,442,956

Comcast

Corp.,

A

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

Media

1,498,129

55,685,455

a

DXC

Technology

Co.

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

IT

Services

1,601,152

44,415,956

Exxon

Mobil

Corp.

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

Oil,

Gas

&

Consumable

Fuels

489,950

53,850,404

a

F5,

Inc.

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

Communications

Equipment

187,910

26,867,372

Freeport-McMoRan,

Inc.

...........

Metals

&

Mining

358,207

14,675,741

HCA

Healthcare,

Inc.

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

Health

Care

Providers

&

Services

130,730

31,826,218

a

ICON

plc

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

Life

Sciences

Tools

&

Services

256,060

57,774,818

Keurig

Dr

Pepper,

Inc.

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

Beverages

1,301,562

44,968,967

a

Meta

Platforms,

Inc.,

A

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

Interactive

Media

&

Services

252,579

44,186,170

Microchip

Technology,

Inc.

.........

Semiconductors

&

Semiconductor

Equipment

649,288

52,611,807

Micron

Technology,

Inc.

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

Semiconductors

&

Semiconductor

Equipment

406,086

23,479,893

Templeton

Funds

Schedule

of

Investments

(unaudited)

Templeton

World

Fund

(continued)

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

(continued)

United

States

(continued)

Microsoft

Corp.

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

Software

428,341

$

106,836,812

Roche

Holding

AG

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

Pharmaceuticals

164,681

47,486,473

a

Salesforce,

Inc.

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

Software

439,880

71,968,767

Schneider

Electric

SE

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

Electrical

Equipment

226,650

36,367,610

Target

Corp.

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

Multiline

Retail

268,250

45,200,125

a

T-Mobile

US,

Inc.

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

Wireless

Telecommunication

Services

616,289

87,623,970

a

Uber

Technologies,

Inc.

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

Road

&

Rail

633,930

21,084,512

UnitedHealth

Group,

Inc.

...........

Health

Care

Providers

&

Services

150,742

71,744,147

a

Walt

Disney

Co.

(The)

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

Entertainment

629,864

62,740,753

Westinghouse

Air

Brake

Technologies

Corp.

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

Machinery

197,320

20,586,396

Zimmer

Biomet

Holdings,

Inc.

.......

Health

Care

Equipment

&

Supplies

459,817

56,957,532

1,383,322,474

Total

Common

Stocks

(Cost

$2,206,613,248)

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

2,165,031,145

Short

Term

Investments

5.2%

a

a

Industry

Principal

Amount

*

a

Value

a

a

a

a

a

a

Time

Deposits

5.2%

Canada

3.8%

National

Bank

of

Canada,

4.56%,

3/01/23

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

29,000,000

29,000,000

Royal

Bank

of

Canada,

4.55%,

3/01/23

42,300,000

42,300,000

Toronto-Dominion

Bank

(The),

4.55%,

3/01/23

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

14,000,000

14,000,000

85,300,000

France

1.4%

Credit

Agricole

Corporate

and

Investment

Bank

SA,

4.55%,

3/01/23

31,000,000

31,000,000

Total

Time

Deposits

(Cost

$116,300,000)

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

116,300,000

a

a

a

a

a

Total

Short

Term

Investments

(Cost

$116,300,000

)

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

116,300,000

a

a

a

Total

Investments

(Cost

$2,322,913,248)

102.1%

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

$2,281,331,145

Other

Assets,

less

Liabilities

(2.1)%

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

(47,226,028)

Net

Assets

100.0%

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

$2,234,105,117

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,

2023,

the

value

of

this

security

was

$40,658,343,

representing

1.8%

of

net

assets.

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

February

28,

2023

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

Templeton

World

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$2,322,913,248

Value

-

Unaffiliated

issuers

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

$2,281,331,145

Cash

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

53,820

Receivables:

Investment

securities

sold

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

30,977

Capital

shares

sold

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

204,813

Dividends

and

interest

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

5,793,660

European

Union

tax

reclaims

(Note

1

d

)

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

623,946

Total

assets

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

2,288,038,361

Liabilities:

Payables:

Investment

securities

purchased

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

36,562,739

Capital

shares

redeemed

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

881,217

Management

fees

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

1,231,308

Distribution

fees

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

424,567

Transfer

agent

fees

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

442,151

Trustees'

fees

and

expenses

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

59

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

d

)

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

13,944,332

Accrued

expenses

and

other

liabilities

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

446,871

Total

liabilities

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

53,933,244

Net

assets,

at

value

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

$2,234,105,117

Net

assets

consist

of:

Paid-in

capital

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

$2,323,011,313

Total

distributable

earnings

(losses)

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

(88,906,196)

Net

assets,

at

value

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

$2,234,105,117

Templeton

Funds

Financial

Statements

Statement

of

Assets

and

Liabilities

(continued)

February

28,

2023

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

Templeton

World

Fund

Class

A:

Net

assets,

at

value

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

$2,120,965,923

Shares

outstanding

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

171,869,592

Net

asset

value

per

share

a

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

$12.34

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

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

$13.06

Class

C:

Net

assets,

at

value

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

$6,415,261

Shares

outstanding

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

545,303

Net

asset

value

and

maximum

offering

price

per

share

a

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

$11.76

Class

R6:

Net

assets,

at

value

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

$35,644,879

Shares

outstanding

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

2,890,192

Net

asset

value

and

maximum

offering

price

per

share

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

$12.33

Advisor

Class:

Net

assets,

at

value

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

$71,079,054

Shares

outstanding

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

5,758,696

Net

asset

value

and

maximum

offering

price

per

share

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

$12.34

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,

2023

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

Templeton

World

Fund

Investment

income:

Dividends:

(net

of

foreign

taxes

of

$374,904)

Unaffiliated

issuers

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

$10,211,142

Interest:

Unaffiliated

issuers

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

1,086,134

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

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

10,518

Non-controlled

affiliates

(Note

3

f

)

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

108

Less:

IRS

closing

agreement

payments

for

European

Union

tax

reclaims

(Note

1

d

)

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

(207,883)

Total

investment

income

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

11,100,019

Expenses:

Management

fees

(Note

3

a

)

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

7,573,001

Distribution

fees:

(Note

3c

)

    Class

A

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

2,522,115

    Class

C

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

33,437

Transfer

agent

fees:

(Note

3e

)

    Class

A

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

814,742

    Class

C

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

2,650

    Class

R6

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

9,238

    Advisor

Class

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

30,802

Custodian

fees

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

47,708

Reports

to

shareholders

fees

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

6,163

Registration

and

filing

fees

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

45,181

Professional

fees

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

35,654

Trustees'

fees

and

expenses

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

121,343

Other

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

103,574

Total

expenses

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

11,345,608

Expenses

waived/paid

by

affiliates

(Note

3f

and

3g)

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

(4,178)

Net

expenses

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

11,341,430

Net

investment

income

(loss)

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

(241,411)

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

(21,469,958)

Foreign

currency

transactions

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

522,607

Net

realized

gain

(loss)

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

(20,947,351)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

141,968,584

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

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

237,774

Net

change

in

unrealized

appreciation

(depreciation)

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

142,206,358

Net

realized

and

unrealized

gain

(loss)

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

121,259,007

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

$121,017,596

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

19

Templeton

World

Fund

Six

Months

Ended

February

28,

2023

(unaudited)

Year

Ended

August

31,

2022

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

(loss)

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

$(241,411)

$166,419

Net

realized

gain

(loss)

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

(20,947,351)

219,790,750

Net

change

in

unrealized

appreciation

(depreciation)

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

142,206,358

(902,487,259)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

121,017,596

(682,530,090)

Distributions

to

shareholders:

Class

A

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

(31,728,587)

(44,013,452)

Class

C

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

(79,288)

(55,139)

Class

R6

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

(605,219)

(780,101)

Advisor

Class

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

(1,357,839)

(1,988,799)

Total

distributions

to

shareholders

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

(33,770,933)

(46,837,491)

Capital

share

transactions:

(Note

2

)

Class

A

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

(100,192,715)

(233,613,207)

Class

C

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

(1,200,294)

(2,686,637)

Class

R6

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

(9,934)

2,778,432

Advisor

Class

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

(18,046,313)

(1,935,608)

Total

capital

share

transactions

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

(119,449,256)

(235,457,020)

Net

increase

(decrease)

in

net

assets

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

(32,202,593)

(964,824,601)

Net

assets:

Beginning

of

period

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

2,266,307,710

3,231,132,311

End

of

period

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

$2,234,105,117

$2,266,307,710

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

Templeton

World

Fund

20

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.

The

Trust

follows

the

accounting

and

reporting

guidance

in

Financial

Accounting

Standards

Board

(FASB)

Accounting

Standards

Codification

Topic

946,

Financial

Services

–

Investment

Companies

(ASC

946)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP),

including,

but

not

limited

to,

ASC

946.

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

Board

has

designated

the

Fund’s

investment

manager

as

the

valuation

designee

and

has

responsibility

for

oversight

of

valuation.

The

investment

manager

is

assisted

by

the

Fund’s

administrator

in

performing

this

responsibility,

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,

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,

2023,

certain

securities

may

have

been

fair

valued

using

these

procedures,

in

which

case

the

securities

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

21

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

were

categorized

as

Level

2

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.

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,

2023,

the

Fund

had

no

securities

on

loan.

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)

22

franklintempleton.com

Semiannual

Report

Templeton

World

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,

2023,

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.

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.

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)

23

franklintempleton.com

Semiannual

Report

Templeton

World

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,

2023,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund’s

shares

were

as

follows:

Six

Months

Ended

February

28,

2023

Year

Ended

August

31,

2022

Shares

Amount

Shares

Amount

Class

A

Shares:

Shares

sold

a

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

3,199,961

$37,639,342

7,163,158

$100,026,779

Shares

issued

in

reinvestment

of

distributions

..........

2,535,772

29,423,758

2,756,371

40,243,011

Shares

redeemed

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

(14,271,187)

(167,255,815)

(26,739,266)

(373,882,997)

Net

increase

(decrease)

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

(8,535,454)

$(100,192,715)

(16,819,737)

$(233,613,207)

Class

C

Shares:

Shares

sold

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

24,175

$271,698

59,313

$799,919

Shares

issued

in

reinvestment

of

distributions

..........

7,104

78,786

3,910

54,747

Shares

redeemed

a

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

(136,075)

(1,550,778)

(265,836)

(3,541,303)

Net

increase

(decrease)

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

(104,796)

$(1,200,294)

(202,613)

$(2,686,637)

Class

R6

Shares:

Shares

sold

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

190,419

$2,223,310

591,711

$8,400,647

Shares

issued

in

reinvestment

of

distributions

..........

27,678

320,528

28,589

416,823

Shares

redeemed

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

(215,709)

(2,553,772)

(438,321)

(6,039,038)

Net

increase

(decrease)

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

2,388

$(9,934)

181,979

$2,778,432

Advisor

Class

Shares:

Shares

sold

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

590,135

$6,925,843

1,574,879

$22,222,607

Shares

issued

in

reinvestment

of

distributions

..........

109,395

1,268,495

125,855

1,836,223

Shares

redeemed

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

(2,226,380)

(26,240,651)

(1,870,594)

(25,994,438)

Net

increase

(decrease)

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

(1,526,850)

$(18,046,313)

(169,860)

$(1,935,608)

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)

24

franklintempleton.com

Semiannual

Report

Templeton

World

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,

2023,

the

annualized

gross

effective

investment

management

fee

rate

was 0.697%

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:

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%

In

excess

of

$20

billion

Class

A

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

0.25%

Class

C

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

1.00%

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

25

franklintempleton.com

Semiannual

Report

Templeton

World

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.

Effective

October

1,

2022,

the

fees

are

based

on

an

annualized

asset

based

fee

of

0.016%

plus

a

reduced

transaction

based

fee.

Prior

to

October

1,

2022,

the

fees

were

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,

2023,

the

Fund

paid

transfer

agent

fees

of

$857,432,

of

which

$441,764 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,

2023,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

g.

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,

2023.

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

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

$9,390

CDSC

retained

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

$511

    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

World

Fund

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

4.204%

$—

$707,451

$(707,451)

$—

$—

$—

—

$108

Total

Affiliated

Securities

...

$—

$707,451

$(707,451)

$—

$—

$—

$108

3.

Transactions

with

Affiliates

(continued)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

26

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

August

31,

2022,

the

capital

loss

carryforwards

were

as

follows:

At

February

28,

2023

,

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

s

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,

2023,

aggregated

$504,392,466

and

$725,208,719,

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.

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.

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

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

$1,596,246

Cost

of

investments

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

$2,322,914,557

Unrealized

appreciation

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

$214,120,588

Unrealized

depreciation

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

(255,704,000)

Net

unrealized

appreciation

(depreciation)

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

$(41,583,412)

Templeton

Funds

Notes

to

Financial

Statements

(unaudited)

27

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

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

2,

2024.

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,

2023,

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)

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,

2023,

in

valuing

the

Fund's

assets

and

liabilities

carried

at

fair

value,

is

as

follows:

Level

1

Level

2

Level

3

Total

Templeton

World

Fund

Assets:

Investments

in

Securities:

Common

Stocks

:

Belgium

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

$

—

$

47,721,345

$

—

$

47,721,345

France

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

—

68,019,192

—

68,019,192

Germany

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

—

168,859,963

—

168,859,963

Hong

Kong

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

—

47,399,809

—

47,399,809

India

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

—

50,948,067

—

50,948,067

Japan

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

—

81,385,235

—

81,385,235

Netherlands

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

—

45,888,471

—

45,888,471

Taiwan

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

—

64,375,361

—

64,375,361

United

Kingdom

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

—

207,111,228

—

207,111,228

United

States

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

1,299,468,391

83,854,083

—

1,383,322,474

Short

Term

Investments

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

—

116,300,000

—

116,300,000

Total

Investments

in

Securities

...........

$1,299,468,391

$981,862,754

a

$—

$2,281,331,145

\

a

Includes

foreign

securities

valued

at

$865,562,754,

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

Notes

to

Financial

Statements

(unaudited)

28

franklintempleton.com

Semiannual

Report

Templeton

World

Fund

(continued)

11.

New

Accounting

Pronouncements

In June

2022,

the

FASB

issued

Accounting

Standards

Update

(ASU)

No.

2022-03,

Fair

Value

Measurement

(Topic

820)

–

Fair

Value

Measurement

of

Equity

Securities

Subject

to

Contractual

Sale

Restrictions.

The

amendments

in

the

ASU

clarify

that

a

contractual

restriction

on

the

sale

of

an

equity

security

is

not

considered

part

of

the

unit

of

account

of

the

equity

security

and,

therefore,

should

not

be

considered

in

measuring

fair

value.

The

ASU

is

effective

for

interim

and

annual

reporting

periods

beginning

after

December

15,

2023,

with

the

option

of

early

adoption.

Management

has

reviewed

the

requirements

and

believes

that

the

adoption

of

the

ASU

will

not

have

a

material

impact

on

the

financial

statements.

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.

Templeton

Funds

Shareholder

Information

29

franklintempleton.com

Semiannual

Report

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

Schedule

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

schedule

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.

102

S

04/23

©

2023

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

(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.

(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.

(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, 2023

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, 2023

By S\CHRISTOPHER KINGS______________________

      Christopher Kings

      Chief Financial Officer, Chief Accounting Officer and Treasurer

Date 

April 26, 2023