UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number_811-05878
__Franklin Value Investors Trust
(Exact name of registrant as specified in charter)
(Exact name of registrant as specified in charter)
One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant's telephone number, including area code: _650 312-2000
Date of fiscal year end: 10/31
Date of reporting period: _10/31/20
Item 1. Reports to Stockholders.
ANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Franklin
Value
Investors
Trust
October
31,
2020
Sign
up
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MicroCap
Value
Fund
Franklin
Mutual
U.S.
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Fund
Franklin
Small
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Value
Fund
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:
Effective
January
1,
2021,
as
permitted
by
the
SEC,
paper
copies
of
the
Fund’s
shareholder
reports
will
no
longer
be
sent
by
mail,
unless
you
specifically
request
them
from
the
Fund
or
your
financial
intermediary.
Instead,
the
reports
will
be
made
available
on
a
website,
and
you
will
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notified
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mail
each
time
a
report
is
posted
and
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link
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franklintempleton.com
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part
of
the
annual
report
1
Shareholder
Letter
Dear
Franklin
Fund
Shareholder:
During
the
12
months
ended
October
31,
2020,
U.S.
equity
markets
were
volatile
and
initially
declined
beginning
in
March
as
lockdown
measures
to
slow
the
novel
coronavirus
(COVID-19)
pandemic
disrupted
global
economic
activity,
ending
both
the
longest
expansion
and
bull
market
in
U.S.
history.
In
response,
the
U.S.
Federal
Reserve
and
Congress
undertook
unprecedented
monetary
and
fiscal
measures,
respectively,
to
restore
confidence
in
the
economy.
Share
prices
rose
off
the
market
bottom
in
March
and
approached
February
all-time
highs.
A
spike
in
COVID-19
diagnoses
and
uncertainty
about
presidential
and
congressional
elections
would
later
lead
to
negative
investor
sentiment.
The
period
opened
with
stocks
rallying,
lifted
by
the
successful
completion
of
a
phase-one
trade
agreement
between
the
U.S.
and
China
and
accommodative
monetary
policy
to
keep
consumer
spending
at
supportive
levels.
Then,
COVID-19
emerged.
As
the
pandemic
evolved
into
a
global
public
health
crisis,
countries
around
the
world
closed
borders
and
restricted
residents’
movements
in
efforts
to
“flatten
the
curve”
of
the
contagion.
The
ensuing
financial
downturn
was
severe.
The
second
quarter
of
calendar
year
2020
laid
bare
the
extent
of
the
damage
as
gross
domestic
product
(GDP)
fell
at
a
record
annualized
rate,
and
corporate
earnings
retreated
by
a
significant
amount
as
business
and
consumer
spending
evaporated.
Despite
the
dire
economic
environment,
stocks
rallied
as
the
monetary
and
political
response
provided
significant
amounts
of
liquidity,
much
of
which
flowed
into
risk
assets.
Investors
bid
up
shares
of
technology
companies
that
benefited
from
remote
working,
cloud
software
and
other
technology
trends.
Calendar
year
third-quarter
GDP
surged
at
a
record
pace,
recovering
much
lost
ground.
Corporate
earnings
also
began
to
improve,
with
a
majority
of
companies
reporting
results
above
consensus
expectations,
albeit
from
a
reduced
base.
However,
stocks
sold
off
in
October,
due
to
heightened
U.S.
fiscal
policy
uncertainty,
resurgent
COVID-19
cases
and
fears
of
a
disputed
U.S.
presidential
election
outcome.
We
believe
stock
market
volatility
is
likely
to
remain
elevated
for
the
remainder
of
2020.
Democrats
and
Republicans
have
proposed
substantially
different
economic
policy
plans,
and
depending
on
which
party
controls
the
Senate,
the
tax
and
regulatory
environment
could
be
substantially
different
for
the
overall
economy
and
specific
key
sectors
like
energy,
health
care,
financials
and
information
technology.
Amid
these
elevated
risks,
we
remain
focused
on
identifying
opportunities
to
improve
the
quality
of
our
portfolios
at
relatively
attractive
valuations.
Our
process
of
finding
underappreciated
and
misunderstood
companies
with
identifiable
catalysts
to
unlock
shareholder
value
may
provide
meaningful
upside
potential,
and
a
degree
of
downside
protection
during
turbulent
periods.
While
volatility
is
unnerving,
it
is
important
to
remember
that
it
is
inherent
to
investing
in
risk
assets,
and
that
the
market
historically
rewards
investors
who
take
a
long-term
perspective.
On
a
closing
note,
this
is
my
final
letter
to
you
as
Chief
Investment/Executive
Officer.
Christian
Correa,
who
has
served
as
Director
of
Research
and
Co-Portfolio
Manager
of
our
Mutual
Discovery
and
Mutual
Beacon
funds,
will
succeed
me
on
November
2,
2020.
I
have
worked
closely
with
Christian
since
he
joined
us
in
2003,
and
I
am
confident
in
his
leadership
of
our
fund
group.
I
will
continue
to
serve
as
Chairman
of
Mutual
Series
through
early
2021
to
assist
with
the
transition.
On
the
following
pages,
the
portfolio
management
team
of
each
Fund
reviews
investment
decisions
made
during
this
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
continuing
to
serve
your
investment
needs
in
the
years
ahead.
Sincerely,
Peter
A.
Langerman
Chief
Executive
Officer
–
Investment
Management
Franklin
Value
Investors
Trust
This
letter
reflects
our
analysis
and
opinions
as
of
October
31,
2020
,
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.
franklintempleton.com
Annual
Report
2
Contents
Annual
Report
Economic
and
Market
Overview
3
Franklin
MicroCap
Value
Fund
4
Franklin
Mutual
U.S.
Value
Fund
11
Franklin
Small
Cap
Value
Fund
18
Financial
Highlights
and
Statements
of
Investments
25
Financial
Statements
49
Notes
to
Financial
Statements
54
Report
of
Independent
Registered
Public
Accounting
Firm
69
Tax
Information
70
Board
Members
and
Officers
71
Shareholder
Information
76
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Economic
and
Market
Overview
U.S.
equities,
as
measured
by
the
Standard
&
Poor’s
®
500
Index
(S&P
500
®
),
posted
solid
gains
during
the
12
months
ended
October
31,
2020.
Equities
advanced
near
the
end
of
2019,
aided
by
relatively
steady
economic
growth,
easing
trade
tensions
and
the
U.S.
Federal
Reserve’s
(Fed’s)
supportive
monetary
policy.
However,
a
sharp
selloff
began
in
late
February
2020
amid
investor
fears
of
a
global
economic
slowdown
due
to
the
novel
coronavirus
(COVID-19)
pandemic.
Such
fears
drove
many
investors
to
sell
equities
and
buy
government
bonds,
cash
and
other
investments
perceived
as
safe.
Nevertheless,
equities
began
to
advance
in
late
March,
as
monetary
and
fiscal
stimulus
drove
stocks,
as
measured
by
the
S&P
500,
to
all-time
price
highs
in
early
September,
before
retreating
in
the
period’s
final
months.
Pandemic-related
restrictions
severely
curtailed
economic
activity,
resulting
in
mass
layoffs
that
drove
the
unemployment
rate
to
14.7%
in
April
2020.
1
The
longest
U.S.
economic
expansion
in
history
ended
in
February,
according
to
the
National
Bureau
of
Economic
Research,
and
the
country
slipped
into
a
deep
recession
with
second-
quarter
2020
gross
domestic
product
(GDP)
posting
a
record
annualized
decline.
In
an
effort
to
support
the
economy,
the
Fed
lowered
the
federal
funds
target
rate
to
a
range
of
0.00%–0.25%
in
March
2020.
The
Fed
also
enacted
quantitative
easing
measures
aimed
at
ensuring
credit
flows
to
borrowers
and
supporting
credit
markets
with
unlimited
amounts
of
bond
purchasing.
Furthermore,
the
Fed
signaled
that
interest
rates
would
potentially
remain
low,
even
if
inflation
persistently
exceeded
the
Fed’s
2%
target.
Equities
began
to
rebound
in
late
March
2020,
benefiting
from
fiscal
and
monetary
stimulus
and
a
gradual
lifting
of
restrictions.
Optimism
about
potential
COVID-19
vaccines,
rising
retail
sales
and
rebounding
economic
activity
led
the
third-quarter
GDP
to
expand
at
a
record
annualized
pace.
Despite
surging
summer
infection
rates,
stocks
reversed
earlier
losses
and
posted
sharp
gains.
However,
stocks
declined
in
the
period’s
last
two
months
amid
investor
concerns
that
the
economic
recovery
was
stalling,
as
new
job
growth
slowed
and
unemployment
claims
remained
high.
The
unemployment
rate,
however,
declined
to
6.9%
at
period-end.
1
Concerns
about
possible
new
restrictions
due
to
rising
COVID-19
infection
rates,
the
government’s
lack
of
consensus
about
additional
fiscal
stimulus
and
uncertainties
surrounding
the
upcoming
presidential
election
also
tempered
investor
enthusiasm.
The
foregoing
information
reflects
our
analysis
and
opinions
as
of
October
31,
2020.
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:
Bureau
of
Labor
Statistics
See
www.franklintempletondatasources.com
for
additional
data
provider
information
4
franklintempleton.com
Annual
Report
Franklin
MicroCap
Value
Fund
This
annual
report
for
Franklin
MicroCap
Value
Fund
covers
the
fiscal
year
ended
October
31,
2020
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
high
total
return,
of
which
capital
appreciation
and
income
are
components.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
securities
of
microcap
companies
with
market
capitalizations
under
$500
million
at
the
time
of
purchase
that
we
believe
are
undervalued
in
the
marketplace
and
have
the
potential
for
capital
appreciation.
The
Fund
invests
predominantly
in
common
stocks.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-12.10%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
2000
®
Value
Index,
which
measures
performance
of
those
Russell
2000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates,
posted
a
-13.92%
total
return
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
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
.
Investment
Strategy
Our
strategy
is
to
buy
shares
of
financially
sound,
well-
established
companies
at
a
low
price-to-book
value.
In
the
case
of
financial
companies,
we
look
for
consistently
increasing
book
value
over
time.
Book
value
per
share
is
a
company’s
net
worth
or
shareholders’
equity
on
an
accounting
or
book
basis,
divided
by
shares
outstanding.
This
strategy
is
not
aimed
at
short-term
trading
gains,
nor
do
we
consider
the
composition
of
any
index.
Rather,
we
try
to
identify
individual
companies
that
meet
our
investment
criteria
and
we
assume
at
purchase
that
we
will
hold
the
positions
for
several
years.
The
Fund
may
invest
up
to
25%
of
its
total
assets
in
foreign
securities.
Manager’s
Discussion
The
Fund
had
a
negative
return
during
the
12-month
period
but
performed
better
than
the
benchmark
index.
Stock
selection
and
an
overweighted
position
in
the
industrials
sector,
and
stock
selection
and
an
underweighted
position
in
real
estate,
contributed
to
relative
return.
Stock
selection
in
communication
services
was
also
beneficial
to
relative
results.
Conversely,
stock
selection
in
both
the
materials
Portfolio
Composition
10/31/20
%
of
Total
Net
Assets
Banks
16.7%
Machinery
9.2%
Thrifts
&
Mortgage
Finance
6.5%
Construction
&
Engineering
6.2%
Specialty
Retail
5.0%
Hotels,
Restaurants
&
Leisure
5.0%
Textiles,
Apparel
&
Luxury
Goods
4.7%
Electrical
Equipment
4.0%
Real
Estate
Management
&
Development
3.8%
Electronic
Equipment,
Instruments
&
Components
3.4%
Semiconductors
&
Semiconductor
Equipment
3.1%
Household
Durables
2.9%
Health
Care
Equipment
&
Supplies
2.7%
Communications
Equipment
2.2%
Metals
&
Mining
2.1%
Building
Products
2.1%
Diversified
Telecommunication
Services
2.1%
Health
Care
Technology
2.0%
Mortgage
Real
Estate
Investment
Trusts
(REITs)
1.8%
Oil,
Gas
&
Consumable
Fuels
1.2%
Food
&
Staples
Retailing
1.2%
Equity
Real
Estate
Investment
Trusts
(REITs)
1.1%
Aerospace
&
Defense
1.1%
Other
7.9%
Short-Term
Investments
&
Other
Net
Assets
2.0%
1.
Source:
Morningstar.
Frank
Russell
Company
is
the
source
and
owner
of
the
trademarks,
service
marks
and
copyrights
related
to
the
Russell
Indexes.
Russell
®
is
a
trademark
of
Frank
Russell
Company.
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.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
28
.
Franklin
MicroCap
Value
Fund
5
franklintempleton.com
Annual
Report
and
consumer
discretionary
sectors
detracted
from
relative
performance,
as
did
underweighted
positions
and
stock
selection
in
both
health
care
and
information
technology.
Holdings
that
detracted
from
Fund
performance
during
the
period
included
Investar
Holding,
Caleres
and
Southern
Missouri
Bancorp.
Shares
of
Investar
Holdings,
a
community
bank
based
in
Louisiana,
performed
poorly.
Investor
sentiment
for
financials
stocks
turned
negative
following
emergency
Federal
Reserve
Board
interest
rate
cuts,
which
are
detrimental
to
banks’
net
interest
income.
Also,
banks
in
the
southern
U.S.
are
feeling
additional
pressure
as
oil
and
gas
markets
have
weakened
significantly,
thereby
increasing
the
odds
that
the
energy
loans
carried
by
these
banks
are
increasingly
risky.
Despite
these
headwinds,
Investar’s
management
team
has
continued
to
execute
their
prudent
expansion
plan,
including
the
acquisition
of
two
bank
branches
across
state
lines
in
Texas.
Caleres,
a
designer
and
retailer
of
women’s
and
family
footwear,
suffered
earlier
this
calendar
year
when
the
pandemic
forced
the
company
to
temporarily
shutter
its
chain
of
Famous
Footwear
retail
stores
and
halt
distribution
of
its
products
to
third-party
footwear
retailers.
Furthermore,
significant
debt
on
its
balance
sheet
led
to
heightened
investor
concerns
about
the
company’s
liquidity
and
ability
to
weather
protracted
weakness
in
the
economy.
Given
the
elevated
financial
risk
profile,
as
well
as
management’s
inconsistent
historical
performance,
we
exited
the
position
and
redeployed
the
funds
into
what
we
considered
more
attractive
opportunities.
Southern
Missouri
Bancorp’s
stock
price
was
punished
following
Fed
interest
rates
cuts
to
support
the
economy
in
response
to
novel
coronavirus
lockdowns.
Concerns
about
the
loan
book
risk
also
contributed
to
negative
investor
sentiment.
However,
the
community
bank’s
conservative
management
culture
and
track
record
of
weathering
prior
downturns
will
help
it
navigate
any
near-term
headwinds,
in
our
view.
Contributors
to
Fund
performance
during
the
period
included
Ameresco,
Shyft
Group
and
LSI
Industries.
All
these
holdings
are
listed
among
the
Fund's
largest
positions
in
the
Top
10
Holdings
table
on
this
page.
Ameresco,
a
designer
and
operator
of
renewable
energy
solutions,
has
emerged
largely
unscathed
from
the
pandemic,
due
to
the
long-term,
contractual
nature
of
its
business.
Management
believes
its
near-term
outlook
is
positive
as
customers
look
to
deploy
the
company’s
energy
savings
solutions
to
reduce
operating
costs.
Growth
in
alternative
energy
is
a
potential
longer-term
advantage.
In
our
opinion,
Ameresco
will
benefit
from
both
structural
advantages
and
a
cyclical
recovery
in
the
short
to
medium
term.
Shyft
Group,
a
specialty
manufacturer
of
commercial
delivery
vehicles,
is
a
beneficiary
of
the
secular
growth
in
e-commerce,
which
has
accelerated
as
consumers
and
businesses
increasingly
turn
to
online
purchasing
during
the
pandemic.
The
company’s
backlog
of
orders
continues
to
grow,
and
management
is
making
prudent
investments
in
electric
and
refrigerated
vehicles
to
expand
the
portfolio
of
products
and
services.
Debt
on
the
balance
sheet
used
to
fund
acquisitions
has
declined
significantly,
due
to
healthy
cash
flow,
and
we
believe
Shyft
is
in
a
strong
position
to
weather
industry
volatility
or
pursue
other
corporate
targets.
Graphics
and
lighting
solutions
provider
LSI
Industries
has
performed
well
during
the
period
as
the
strategic
plan
implemented
by
Chief
Executive
Officer
Jim
Clark
to
improve
the
business
has
been
on
target.
A
$100
million
contract
to
supply
a
large
restaurant
customer
with
new
outdoor
digital
menus
was
a
positive
surprise
and
was
confirmation
of
the
company’s
direction.
In
addition,
management
expects
minimal
disruption
among
their
oil/petroleum
customers,
despite
the
volatility
in
oil
prices
this
calendar
year.
Top
10
Holdings
10/31/20
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Ameresco
,
Inc.
2.8%
Construction
&
Engineering,
United
States
Griffin
Industrial
Realty,
Inc.
2.8%
Real
Estate
Management
&
Development,
United
States
First
Internet
Bancorp
2.6%
Banks,
United
States
Shyft
Group,
Inc.
(The)
2.6%
Machinery,
United
States
Hurco
Cos.,
Inc.
2.4%
Machinery,
United
States
Northeast
Bank
2.2%
Banks,
United
States
Rocky
Brands,
Inc.
2.1%
Textiles,
Apparel
&
Luxury
Goods,
United
States
Alamo
Group,
Inc.
2.1%
Machinery,
United
States
Gibraltar
Industries,
Inc.
2.1%
Building
Products,
United
States
LSI
Industries,
Inc.
2.1%
Electrical
Equipment,
United
States
Franklin
MicroCap
Value
Fund
6
franklintempleton.com
Annual
Report
Thank
you
for
your
participation
in
Franklin
MicroCap
Value
Fund.
We
look
forward
to
continuing
to
serve
your
investment
needs.
Oliver
Wong,
CFA
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
October
31,
2020
,
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
October
31,
2020
Franklin
MicroCap
Value
Fund
7
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
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
10/31/20
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
1-Year
-12.10%
-16.94%
5-Year
+11.68%
+1.09%
10-Year
+84.71%
+5.73%
Advisor
1-Year
-11.95%
-11.95%
5-Year
+13.01%
+2.48%
10-Year
+89.14%
+6.58%
See
page
9
for
Performance
Summary
footnotes.
Franklin
MicroCap
Value
Fund
Performance
Summary
8
franklintempleton.com
Annual
Report
See
page
9
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(11/1/10–10/31/20)
Advisor
Class
(11/1/10–10/31/20)
Franklin
MicroCap
Value
Fund
Performance
Summary
9
franklintempleton.com
Annual
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.
The
Fund’s
ability
to
invest
in
smaller
company
securities
that
may
have
limited
liquidity
involves
additional
risks,
such
as
relatively
small
revenues,
limited
product
lines
and
small
market
share.
Historically,
these
stocks
have
exhibited
greater
price
volatility
than
larger-company
stocks,
especially
over
the
short
term.
In
addition,
the
Fund
may
invest
up
to
25%
of
its
total
assets
in
foreign
securities,
which
involve
special
risks,
including
currency
fluctuations
and
economic
and
political
uncertainty.
Value
securities
may
not
increase
in
price
as
anticipated
or
may
decline
further
in
value.
Unexpected
events
and
their
aftermaths,
such
as
the
spread
of
deadly
diseases;
natural,
environmental
or
man-made
disasters;
financial,
political
or
social
disruptions;
terrorism
and
war;
and
other
tragedies
or
catastrophes,
can
cause
investor
fear
and
panic,
which
can
adversely
affect
the
econo-
mies
of
many
companies,
sectors,
nations,
regions
and
the
market
in
general,
in
ways
that
cannot
necessarily
be
foreseen.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
1.
The
Fund
has
a
fee
waiver
associated
with
any
investment
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
2/28/21.
Fund
investment
results
reflect
the
fee
waiver;
without
this
waiver,
the
results
would
have
been
lower.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Source:
Morningstar.
The
Russell
2000
Value
Index
is
market
capitalization
weighted
and
measures
performance
of
those
Russell
2000
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates.
6.
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
(11/1/19–10/31/20)
Share
Class
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
A
$0.0586
$0.0433
$4.6709
$4.7728
R6
$0.1766
$0.0433
$4.6709
$4.8908
Advisor
$0.1311
$0.0433
$4.6709
$4.8453
Total
Annual
Operating
Expenses
6
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.22%
1.23%
Advisor
0.97%
0.98%
Your
Fund’s
Expenses
Franklin
MicroCap
Value
Fund
10
franklintempleton.com
Annual
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
184/366
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
5/1/20
Ending
Account
Value
10/31/20
Expenses
Paid
During
Period
5/1/20–10/31/20
1,
2
Ending
Account
Value
10/31/20
Expenses
Paid
During
Period
5/1/20–10/31/20
1,
2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,132.09
$7.02
$1,018.55
$6.65
1.31%
R6
$1,000
$1,134.02
$5.15
$1,020.31
$4.88
0.96%
Advisor
$1,000
$1,132.78
$5.68
$1,019.81
$5.38
1.06%
11
franklintempleton.com
Annual
Report
Franklin
Mutual
U.S.
Value
Fund
This
annual
report
for
Franklin
Mutual
U.S.
Value
Fund
covers
the
fiscal
year
ended
October
31,
2020
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
high
total
return,
of
which
capital
appreciation
and
income
are
components.
Under
normal
market
conditions,
the
Fund
invests
in
equity
securities
of
mid-
and
large-cap
U.S.
companies
with
the
remaining
portion
in
smaller
companies
that
we
believe
are
available
at
market
prices
less
than
their
intrinsic
value.
The
Fund
is
not
limited
to
pre-set
maximums
or
minimums
governing
the
size
of
the
companies
in
which
it
may
invest.
The
Fund
invests
predominantly
in
equity
securities
(including
securities
convertible
into,
or
that
we
expect
to
be
exchanged
for,
common
or
preferred
stock).
The
Fund
currently
does
not
expect
to
invest
more
than
10%
of
its
net
assets
in
non-U.S.
securities.
The
income
the
Fund
receives
from
investments
in
dividend
paying
stocks,
preferred
stocks
and
convertible
securities
varies
depending
upon
current
market
and
economic
conditions.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-13.94%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
3000
®
Value
Index,
which
measures
performance
of
those
Russell
3000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates,
posted
a
-8.00%
total
return
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
14
.
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
.
Investment
Strategy
We
employ
a
research
driven,
fundamental
value
strategy
for
the
Fund
that
focuses
on
the
market
price
of
a
company’s
securities
relative
to
our
own
evaluation
of
the
company’s
asset
value,
including
an
analysis
of
book
value,
cash
flow
potential,
balance
sheet
strength,
long-term
earnings,
and
multiples
of
earnings.
The
types
of
companies
the
Fund
may
invest
in
include
those
that
may
be
considered
out
of
favor
due
to
actual
or
perceived
cyclical
or
secular
challenges,
Portfolio
Composition
10/31/20
%
of
Total
Net
Assets
Banks
11.2%
Pharmaceuticals
6.9%
Food
Products
5.9%
Software
5.0%
Insurance
4.7%
Equity
Real
Estate
Investment
Trusts
(REITs)
4.0%
Media
3.9%
Chemicals
3.6%
Health
Care
Equipment
&
Supplies
3.1%
Oil,
Gas
&
Consumable
Fuels
2.7%
Building
Products
2.7%
Automobiles
2.7%
Health
Care
Providers
&
Services
2.6%
Consumer
Finance
2.5%
Textiles,
Apparel
&
Luxury
Goods
2.4%
Electric
Utilities
2.3%
Electronic
Equipment,
Instruments
&
Components
2.2%
Machinery
2.2%
Diversified
Financial
Services
2.1%
Household
Durables
2.0%
Technology
Hardware,
Storage
&
Peripherals
2.0%
Industrial
Conglomerates
1.9%
Independent
Power
and
Renewable
Electricity
Producers
1.8%
Metals
&
Mining
1.8%
Specialty
Retail
1.7%
Entertainment
1.6%
IT
Services
1.6%
Aerospace
&
Defense
1.6%
Commercial
Services
&
Supplies
1.4%
Electrical
Equipment
1.3%
Energy
Equipment
&
Services
1.3%
Wireless
Telecommunication
Services
1.2%
Life
Sciences
Tools
&
Services
1.2%
Semiconductors
&
Semiconductor
Equipment
1.2%
Short-Term
Investments
&
Other
Net
Assets
3.7%
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.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
37.
Franklin
Mutual
U.S.
Value
Fund
12
franklintempleton.com
Annual
Report
or
are
experiencing
temporary
setbacks,
diminished
expectations,
mismanagement
or
undermanagement,
or
are
financially
stressed.
Manager’s
Discussion
The
Fund
had
a
negative
return
during
the
12-month
period
and
underperformed
the
benchmark
index.
Stock
selection
in
both
the
financials
and
the
real
estate
sectors
detracted
from
relative
performance,
as
did
underweighted
positions
and
stock
selection
in
industrials
and
health
care.
Conversely,
stock
selection
and
an
overweighted
position
in
the
information
technology
sector
as
well
as
stock
selection
and
an
underweighted
position
in
materials
contributed
positively
to
relative
return.
Stock
selection
among
utilities
and
consumer
discretionary
companies
were
also
beneficial
to
relative
results.
During
the
period,
detractors
from
Fund
performance
included
Brixmor
Property
Group,
American
International
Group
(AIG)
and
Schlumberger.
Shares
of
Brixmor
were
sluggish
and
trended
down,
amid
a
challenging
environment
for
real
estate
investment
trusts
(REIT).
A
shopping
center
REIT,
Brixmor’s
second-quarter
results,
released
in
August,
were
in
line
with
expectations:
rent
collections
trended
up
during
the
period,
albeit
with
deferred
rent
income
concessions;
and
leasing
volume,
while
down
quarter-over
quarter,
was
relatively
healthy.
The
board
suspended
the
third-quarter
dividend
as
part
of
its
efforts
to
preserve
liquidity.
Despite
share
price
weakness,
we
remain
attracted
to
Brixmor
due
to
its
inexpensive
valuation,
its
ability
to
deliver
healthy
forward
leasing
spreads,
a
nearly
50%
exposure
to
an
essential
tenant
base
including
supermarkets
and
drugstores
as
well
its
portfolio
repositioning
that
should
could
enable
it
to
capture
greater
market
share
from
tenants
migrating
away
from
enclosed
malls
to
open-air
shopping
centers,
in
our
analysis.
Shares
of
insurer
AIG
retreated
as
novel
coronavirus
(COVID-19)
concerns
and
a
lack
of
progress
on
improving
return
on
equity
contributed
to
negative
investor
sentiment.
The
insurer’s
stock
price
rallied
late
in
the
period
after
management
announced
that
it
would
divest
the
life
insurance
and
retirement
business
and
focus
on
property
casualty
insurance.
Company
President
Peter
Zaffino
will
succeed
Brian
Duperrault
as
CEO.
We
exited
the
position.
Energy-related
companies,
including
shares
of
Schlumberger,
slumped
when
oil
and
gas
activity
collapsed
in
March
as
COVID-19-related
lockdowns
and
a
brief
price
war
led
to
a
steep
drop
in
the
price
of
oil.
Calendar
year
third-quarter
revenues
(released
in
October)
for
the
oil
services
company
fell
short
of
expectations,
due
to
continuing
softness
across
the
oilfield
value
chain.
Management
is
restructuring
its
operations,
and
in
September
contributed
its
North
America
hydraulic
fracturing,
or
fracking,
unit
to
Liberty
Oilfield
Services,
in
exchange
for
a
37%
stake,
estimated
at
$450
million.
The
company
has
also
embarked
on
an
aggressive
$1.5
billion
cost
reduction
program.
Despite
share
price
weakness,
it
is
our
opinion
that
Schlumberger
is
inexpensive
in
a
recovery
scenario.
Holdings
that
contributed
to
Fund
performance
during
the
period
included
NortonLifeLock,
D.R.
Horton
and
Cognizant
Technology
Solutions.
Shares
of
cybersecurity
solutions
provider
NortonLifeLock
outperformed
during
the
period
as
work-from-home
requirements
attributable
to
the
COVID-19
pandemic
led
to
increased
consumer
purchases
of
the
company’s
cybersecurity
subscriptions.
NortonLifeLock’s
stock
was
rallying
entering
the
calendar
year
and
surged
after
management
announced
in
early
January
the
payment
of
a
one-time,
$12
per
share
cash
dividend
funded
by
the
2019
sale
of
the
enterprise
security
business
to
Broadcom.
Symantec,
the
precursor
to
NortonLifeLock,
sold
the
business
as
part
of
its
transition
to
a
pure-play
consumer-focused
cybersecurity
company,
and
management
subsequently
adopted
the
NortonLifeLock
brand.
Homebuilders,
including
D.R.
Horton,
have
benefited
from
the
low
interest-rate
environment
and
an
exodus
from
larger
cities
to
suburbs
in
the
aftermath
of
the
COVID-19
pandemic.
We
initiated
a
position
amid
the
rally
off
the
March
market
bottom,
purchasing
shares
at
close
to
tangible
book
Top
10
Holdings
10/31/20
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Kraft
Heinz
Co.
(The)
3.9%
Food
Products,
United
States
Bank
of
America
Corp.
3.3%
Banks,
United
States
JPMorgan
Chase
&
Co.
3.2%
Banks,
United
States
Comcast
Corp.
3.0%
Media,
United
States
Merck
&
Co.,
Inc.
2.9%
Pharmaceuticals,
United
States
Oracle
Corp.
2.8%
Software,
United
States
Johnson
Controls
International
plc
2.7%
Building
Products,
United
States
General
Motors
Co.
2.7%
Automobiles,
United
States
Anthem,
Inc.
2.6%
Health
Care
Providers
&
Services,
United
States
Capital
One
Financial
Corp.
2.5%
Consumer
Finance,
United
States
Franklin
Mutual
U.S.
Value
Fund
13
franklintempleton.com
Annual
Report
value,
which
offered
what
we
consider
an
attractive
margin
of
safety.
The
company’s
returns-focused
business
model
minimizing
the
duration
of
land
held
on
the
balance
sheet
was
a
key
factor.
D.R.
Horton
is
the
largest
U.S.
homebuilder
as
measured
by
number
of
homes
closed;
is
geographically
diverse
with
significant
scale
in
what
we
consider
attractive
markets;
and
its
product
offering
skews
to
an
entry
level,
first
move-up
buyer.
Shares
of
Cognizant
rallied
as
management’s
turnaround
initiatives
contributed
to
positive
investor
sentiment.
The
COVID-19
pandemic
has
accelerated
digital
transformation
across
industries,
and
the
company’s
digital
practice
drove
growth
during
the
period.
Cognizant’s
third-quarter
results,
released
in
late
October,
surpassed
consensus
expectations
and
were
highlighted
by
strong
cash
flow
conversion
and
reinstatement
of
stock
buybacks.
Management
advised
that
full-year
revenue
is
expected
to
be
at
the
high
end
of
guidance,
led
by
the
digital
and
the
health
care
segments,
which
could
offset
weakness
in
banking.
During
the
period,
Jan
Siegmund
was
appointed
Chief
Financial
Officer,
succeeding
Karen
McLoughlin.
Cognizant
also
acquired
New
Signature,
an
independent
Microsoft
public
cloud
transformation
specialist.
Thank
you
for
your
participation
in
Franklin
Mutual
U.S.
Value
Fund.
We
look
forward
to
continuing
to
serve
your
investment
needs.
Grace
Hoefig
Lead
Portfolio
Manager
Srini
Vijay,
CFA
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
October
31,
2020
,
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.
Performance
Summary
as
of
October
31,
2020
Franklin
Mutual
U.S.
Value
Fund
14
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
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
10/30/20
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
1-Year
-13.94%
-18.67%
5-Year
+17.85%
+2.18%
10-Year
+77.89%
+5.33%
Advisor
1-Year
-13.71%
-13.71%
5-Year
+19.34%
+
3.60%
10-Year
+82.36%
+6.19%
See
page
16
for
Performance
Summary
footnotes.
Franklin
Mutual
U.S.
Value
Fund
Performance
Summary
15
franklintempleton.com
Annual
Report
See
page
16
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(11/1/10–10/31//20)
Advisor
Class
(11/1/10–10/31/20)
Franklin
Mutual
U.S.
Value
Fund
Performance
Summary
16
franklintempleton.com
Annual
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.
Value
securities
may
not
increase
in
price
as
anticipated
or
may
decline
further
in
value.
While
smaller
and
midsize
companies
may
offer
substantial
opportunities
for
capital
growth,
they
also
involve
heightened
risks
and
should
be
considered
speculative.
Historically,
smaller-
and
midsize-company
securities
have
been
more
volatile
in
price
than
larger-company
securities,
especially
over
the
short
term.
The
Fund
may
invest
in
foreign
securities,
which
may
involve
special
risks,
including
currency
fluctuations
and
economic
and
political
uncertainty.
Unexpected
events
and
their
aftermaths,
such
as
the
spread
of
deadly
diseases;
natural,
environmental
or
man-made
disasters;
financial,
political
or
social
disruptions;
terrorism
and
war;
and
other
tragedies
or
catastrophes,
can
cause
investor
fear
and
panic,
which
can
adversely
affect
the
economies
of
many
companies,
sectors,
nations,
regions
and
the
market
in
general,
in
ways
that
cannot
necessarily
be
foreseen.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
1.
The
Fund
has
a
fee
waiver
associated
with
any
investment
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
2/28/21.
Fund
investment
results
reflect
the
fee
waiver;
without
this
waiver,
the
results
would
have
been
lower.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Source:
Morningstar.
The
Russell
3000
Value
Index
is
market
capitalization
weighted
and
measures
performance
of
those
Russell
3000
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates.
6.
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
(11/1/19–10/31/20)
Share
Class
Net
Investment
Income
Long-Term
Capital
Gain
Total
A
$0.5352
$2.1469
$2.6821
C
$0.2606
$2.1469
$2.4075
R
$0.4449
$2.1469
$2.5918
R6
$0.6653
$2.1469
$2.8122
Advisor
$0.6235
$2.1469
$2.7704
Total
Annual
Operating
Expenses
6
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
0.93%
0.97%
Advisor
0.68%
0.72%
Your
Fund’s
Expenses
Franklin
Mutual
U.S.
Value
Fund
17
franklintempleton.com
Annual
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
184/366
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
5/1/20
Ending
Account
Value
10/31/20
Expenses
Paid
During
Period
5/1/20–10/31/20
1,
2
Ending
Account
Value
10/31/20
Expenses
Paid
During
Period
5/1/20–10/31/20
1,
2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,109.82
$5.14
$1,020.26
$4.93
0.97%
C
$1,000
$1,105.44
$9.10
$1,016.49
$8.72
1.72%
R
$1,000
$1,108.13
$6.46
$1,019.00
$6.19
1.22%
R6
$1,000
$1,111.84
$3.13
$1,022.17
$3.00
0.59%
Advisor
$1,000
$1,111.11
$3.82
$1,021.52
$3.66
0.72%
18
franklintempleton.com
Annual
Report
Franklin
Small
Cap
Value
Fund
This
annual
report
for
Franklin
Small
Cap
Value
Fund
covers
the
fiscal
year
ended
October
31,
2020
.
Your
Fund’s
Goals
and
Main
Investments
The
Fund
seeks
long-term
total
return.
The
Fund
generally
invests
in
equity
securities
that
the
Fund’s
investment
manager
believes
are
undervalued
at
the
time
of
purchase
and
have
the
potential
for
capital
appreciation.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
investments
of
small-capitalization
(small-cap)
companies.
We
define
small-cap
companies
as
those
with
market
capitalizations
not
exceeding
either:
the
highest
market
capitalization
in
the
Russell
2000
®
Index;
1
or
the
12-month
average
of
the
highest
market
capitalization
in
the
Russell
2000
®
Index,
whichever
is
greater,
at
the
time
of
purchase.
The
Fund
invests
predominantly
in
common
stocks.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-10.04%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
2000
®
Value
Index,
which
measures
performance
of
those
Russell
2000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates,
posted
a
-13.92%
total
return
for
the
same
period.
2
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
21
.
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
.
Investment
Strategy
Our
strategy
is
to
invest
in
small-cap
companies
that
we
believe
are
undervalued
at
the
time
of
purchase
and
have
the
potential
for
capital
appreciation.
A
stock
is
undervalued
when
it
trades
at
less
than
the
price
at
which
we
believe
it
would
trade
if
the
market
reflected
all
factors
relating
to
the
company’s
worth.
Following
this
strategy,
the
Fund
invests
in
companies
that
we
believe
have,
for
example:
stock
prices
that
are
low
relative
to
current,
or
historical
or
future
earnings,
book
value,
cash
flow
or
sales;
recent
sharp
price
declines
but
the
potential
for
good
long-term
earnings
prospects;
and
valuable
intangibles
not
reflected
in
the
stock
price.
The
Fund
also
may
invest
in
equity
real
estate
investment
trusts
(REITs).
The
Fund
may
invest
up
to
25%
of
its
total
assets
in
foreign
securities.
Manager’s
Discussion
The
Fund
had
a
negative
absolute
return
during
the
12-month
period
but
performed
better
than
the
benchmark
index.
Stock
selection
and
an
overweighted
position
in
the
industrials
sector
and
stock
selection
in
financials
contributed
to
the
Fund’s
favorable
relative
return.
An
underweighted
position
in
the
energy
sector,
one
of
the
Portfolio
Composition
10/31/20
%
of
Total
Net
Assets
Machinery
18.5%
Banks
13.7%
Insurance
12.9%
Chemicals
7.5%
Building
Products
4.0%
Specialty
Retail
3.7%
Hotels,
Restaurants
&
Leisure
3.0%
Health
Care
Equipment
&
Supplies
2.9%
Equity
Real
Estate
Investment
Trusts
(REITs)
2.5%
Automobiles
2.3%
Textiles,
Apparel
&
Luxury
Goods
2.0%
Multi-Utilities
2.0%
Leisure
Products
1.9%
Food
Products
1.8%
Electronic
Equipment,
Instruments
&
Components
1.8%
Electric
Utilities
1.7%
Metals
&
Mining
1.5%
Paper
&
Forest
Products
1.4%
Commercial
Services
&
Supplies
1.4%
Electrical
Equipment
1.3%
Communications
Equipment
1.3%
Other
7.8%
Short-Term
Investments
&
Other
Net
Assets
3.1%
1.
The
Russell
2000
Index
is
market
capitalization
weighted
and
measures
performance
of
the
approximately
2,000
smallest
companies
in
the
Russell
3000
Index,
which
represent
a
small
amount
of
the
total
market
capitalization
of
the
Russell
3000
Index.
2.
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.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
45
.
Franklin
Small
Cap
Value
Fund
19
franklintempleton.com
Annual
Report
poorest
performers,
was
also
beneficial
to
relative
results.
Conversely,
underweighted
positions
and
stock
selection
in
both
the
health
care
and
utilities
sectors
detracted
from
relative
performance,
as
did
stock
selection
in
the
consumer
discretionary
sector.
Holdings
that
detracted
from
Fund
performance
during
the
period
included
Retail
Properties
of
America,
Old
Republic
International
and
First
Horizon
National.
Retail
Properties
of
America’s
stock
trended
down
as
stay-at-
home
and
closure
guidelines
issued
to
prevent
the
spread
of
the
novel
coronavirus
(COVID-19)
exacerbated
a
challenging
environment
for
the
shopping
center
operator’s
brick-and-
mortar
retail
tenants.
The
company
collected
just
52%
of
April
rent
as
many
non-essential
retailers
were
shuttered
during
the
height
of
the
lockdown.
Although
mandatory
closure
orders
were
later
rescinded,
some
watch-list
tenants
were
not
expected
to
reopen.
Also,
previously
stable
sectors
such
as
fitness
and
casual
dining
may
face
new
pressures
as
consumer
behavior
shifts
in
response
to
new
social
distancing
and
spacing
regulations.
As
a
result,
we
exited
the
position.
Shares
of
insurer
Old
Republic
declined
during
the
period
amid
declining
economic
activity
and
concerns
about
potential
liability
related
to
COVID-19
loss
claims.
Old
Republic
does
have
modest
exposure
to
economically
sensitive
lines,
such
as
surety,
workers
compensation
and
mortgage
insurance,
which
could
result
in
lower
near-term
earnings
power.
However,
it
has
very
limited
exposure
to
COVID-19
commercial
property
and
business
interruption
claims.
Shares
of
First
Horizon,
a
regional
bank
with
a
southeastern
U.S.
footprint,
declined
as
the
economic
outlook
deteriorated
amid
rising
COVID-19
cases
in
the
lender’s
operating
regions.
We
believe
this
trend
increases
the
likelihood
of
rising
credit
losses
for
the
bank’s
borrowers
in
several
sectors,
including
hospitality
and
energy,
which
have
experienced
a
significant
decline
in
demand
due
to
the
COVID-19
pandemic.
First
Horizon
completed
its
acquisition
of
IberiaBank
in
July,
and
social
distancing
requirements
may
negatively
impact
its
ability
to
successfully
integrate
the
lender
and
achieve
targeted,
merger-related
cost
savings.
Contributors
to
Fund
performance
during
the
period
included
BJ’s
Wholesale
Club,
Thor
Industries
and
Regal
Beloit.
Thor
Industries
is
listed
among
the
Fund’s
largest
positions
in
the
Top
10
Holdings
table
on
this
page.
Shares
of
BJ’s
Wholesale
Club
Holdings,
a
warehouse
club
retailer,
benefited
from
higher
rates
of
eating-at-home
as
the
COVID-19
pandemic
limited
dining-out
options.
Management
reported
strong
membership
growth
and
material
market-
share
gains
as
customers
consolidated
shopping
trips
and
increasingly
focused
on
value.
In
our
opinion,
the
company’s
membership
model
may
provide
it
with
an
earnings
advantage
as
a
larger
membership
base
potentially
increases
future
sales.
However,
we
reduced
our
holdings
as
the
stock
approached
our
price
target.
Investors
bid
up
shares
of
recreational
vehicle
manufacturer
Thor
Industries
on
expectations
of
increased
consumer
spending
on
domestic
travel.
International
tourism
declined
significantly
during
the
period
as
countries
closed
borders
to
limit
the
spread
of
COVID-19.
The
company
also
benefited
from
an
anticipated
acceleration
in
consumer
discretionary
spending
tied
to
Congress
passing
a
fiscal
stimulus
package
earlier
in
the
year.
Thor’s
stock
price
retreated
later
in
the
period
as
some
investors
likely
took
profits,
given
the
significant
year-to-date
outperformance.
Shares
of
Regal
Beloit,
a
manufacturer
of
electric
motors
for
residential
and
commercial
heating,
ventilation
and
air
conditioning
systems,
rose
steadily
off
the
March
23
market
bottom,
lifted
by
better-than-expected
financial
results
and
profit
margins.
Sales
declines
related
to
COVID-19
were
mitigated
by
management’s
decisions
to
lower
fixed
costs
by
eliminating
both
underutilized
plants
and
slower
moving
inventory
in
late
2019
and
early
2020.
In
our
view,
these
cost
reductions
may
lead
to
improved
earnings
power
during
the
next
upcycle.
Thank
you
for
your
participation
in
Franklin
Small
Cap
Value
Fund.
We
look
forward
to
continuing
to
serve
your
investment
needs.
Top
10
Holdings
10/31/20
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Old
Republic
International
Corp.
3.3%
Insurance,
United
States
Hanover
Insurance
Group,
Inc.
(The)
3.0%
Insurance,
United
States
Avient
Corp.
3.0%
Chemicals,
United
States
First
Horizon
National
Corp.
2.9%
Banks,
United
States
Horace
Mann
Educators
Corp.
2.8%
Insurance,
United
States
Minerals
Technologies,
Inc.
2.7%
Chemicals,
United
States
CNO
Financial
Group,
Inc.
2.5%
Insurance,
United
States
Thor
Industries,
Inc.
2.2%
Automobiles,
United
States
Group
1
Automotive,
Inc.
2.2%
Specialty
Retail,
United
States
Hillenbrand,
Inc.
2.2%
Machinery,
United
States
Franklin
Small
Cap
Value
Fund
20
franklintempleton.com
Annual
Report
Steven
B.
Raineri
Lead
Portfolio
Manager
Nicholas
Karzon,
CFA
Christopher
Meeker,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
October
31,
2020
,
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.
Performance
Summary
as
of
October
31,
2020
Franklin
Small
Cap
Value
Fund
21
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
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
10/31/20
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
1-Year
-10.04%
-14.99%
5-Year
+30.11%
+4.22%
10-Year
+115.74%
+7.38%
Advisor
1-Year
-9.81%
-9.81%
5-Year
+31.75%
+5.67%
10-Year
+121.70%
+8.29%
See
page
23
for
Performance
Summary
footnotes.
Franklin
Small
Cap
Value
Fund
Performance
Summary
22
franklintempleton.com
Annual
Report
See
page
23
for
Performance
Summary
footnotes
.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(11/1/10–10/31/20)
Advisor
Class
(11/1/10–10/31/20)
Franklin
Small
Cap
Value
Fund
Performance
Summary
23
franklintempleton.com
Annual
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.
The
Fund’s
investments
in
smaller
company
stocks
carry
special
risks
as
such
stocks
have
historically
exhibited
greater
price
volatility
than
larger-company
stocks,
particularly
over
the
short
term.
Value
securities
may
not
increase
in
price
as
anticipat-
ed
or
may
decline
further
in
value.
Additionally,
smaller
companies
often
have
relatively
small
revenues,
limited
product
lines
and
small
market
share.
In
addition,
the
Fund
may
invest
up
to
25%
of
its
total
assets
in
foreign
securities,
which
involve
special
risks,
including
currency
fluctuations
and
economic
and
political
uncertainty.
REITS
may
be
affected
by
any
change
in
the
value
of
the
properties
owned
and
other
factors,
and
their
prices
tend
to
go
up
and
down.
Unexpected
events
and
their
aftermaths,
such
as
the
spread
of
deadly
diseases;
natural,
environmental
or
man-made
disasters;
financial,
political
or
social
disruptions;
terrorism
and
war;
and
other
tragedies
or
catastrophes,
can
cause
investor
fear
and
panic,
which
can
adversely
affect
the
economies
of
many
companies,
sectors,
nations,
regions
and
the
market
in
general,
in
ways
that
cannot
necessarily
be
foreseen.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
1.
The
Fund
has
a
fee
waiver
associated
with
any
investment
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
2/28/21.
Fund
investment
results
reflect
the
fee
waiver;
without
this
waiver,
the
results
would
have
been
lower.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Source:
Morningstar.
The
Russell
2000
Value
Index
is
market
capitalization
weighted
and
measures
performance
of
those
Russell
2000
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates.
6.
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
(11/1/19–10/31/20)
Share
Class
Net
Investment
Income
Long-Term
Capital
Gain
Total
A
$0.5831
$2.4969
$3.0800
C
$0.2550
$2.4969
$2.7519
R
$0.4500
$2.4969
$2.9469
R6
$0.8004
$2.4969
$3.2973
Advisor
$0.7056
$2.4969
$3.2025
Total
Annual
Operating
Expenses
6
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.06%
1.07%
Advisor
0.81%
0.82%
Your
Fund’s
Expenses
Franklin
Small
Cap
Value
Fund
24
franklintempleton.com
Annual
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
184/366
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
5/1/20
Ending
Account
Value
10/31/20
Expenses
Paid
During
Period
5/1/20–10/31/20
1,
2
Ending
Account
Value
10/31/20
Expenses
Paid
During
Period
5/1/20–10/31/20
1,
2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,149.14
$5.94
$1,019.61
$5.58
1.10%
C
$1,000
$1,144.18
$9.97
$1,015.84
$9.37
1.85%
R
$1,000
$1,147.50
$7.29
$1,018.35
$6.85
1.35%
R6
$1,000
$1,151.27
$3.62
$1,021.77
$3.40
0.67
%
Advisor
$1,000
$1,150.40
$4.59
$1,020.86
$4.32
0.85%
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
MicroCap
Value
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
25
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$29.32
$31.06
$36.43
$31.33
$32.90
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.11
0.06
(0.04)
0.01
0.11
c
Net
realized
and
unrealized
gains
(losses)
...........
(2.89)
(0.03)
(2.70)
8.20
2.22
Total
from
investment
operations
....................
(2.78)
0.03
(2.74)
8.21
2.33
Less
distributions
from:
Net
investment
income
..........................
(0.06)
—
(—)
d
(0.11)
—
Net
realized
gains
.............................
(4.71)
(1.77)
(2.63)
(3.00)
(3.90)
Total
distributions
...............................
(4.77)
(1.77)
(2.63)
(3.11)
(3.90)
Net
asset
value,
end
of
year
.......................
$21.77
$29.32
$31.06
$36.43
$31.33
Total
return
e
...................................
(12.10)%
0.58%
(8.11)%
26.98%
8.25%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.28%
1.22%
1.17%
1.16%
1.19%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
1.27%
1.21%
1.16%
1.15%
1.18%
Net
investment
income
(loss)
......................
0.50%
0.23%
(0.11)%
0.03%
0.36%
c
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$94,015
$145,897
$184,613
$238,337
$232,964
Portfolio
turnover
rate
............................
31.04%
7.04%
4.08%
8.82%
11.72%
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
$0.07
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.13%.
d
Amount
rounds
to
less
than
$0.01
per
share.
e
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
MicroCap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$29.80
$31.43
$36.85
$31.66
$33.09
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.20
0.16
0.08
0.12
0.22
c
Net
realized
and
unrealized
gains
(losses)
...........
(2.94)
(0.02)
(2.74)
8.30
2.25
Total
from
investment
operations
....................
(2.74)
0.14
(2.66)
8.42
2.47
Less
distributions
from:
Net
investment
income
..........................
(0.18)
—
(0.13)
(0.23)
—
Net
realized
gains
.............................
(4.71)
(1.77)
(2.63)
(3.00)
(3.90)
Total
distributions
...............................
(4.89)
(1.77)
(2.76)
(3.23)
(3.90)
Net
asset
value,
end
of
year
.......................
$22.17
$29.80
$31.43
$36.85
$31.66
Total
return
....................................
(11.80)%
0.97%
(7.83)%
27.46%
8.67%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.95%
0.89%
0.85%
0.80%
0.81%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
0.91%
0.86%
0.82%
0.79%
0.80%
Net
investment
income
...........................
0.86%
0.58%
0.23%
0.39%
0.74%
c
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$12,299
$19,266
$21,070
$27,107
$18,288
Portfolio
turnover
rate
............................
31.04%
7.04%
4.08%
8.82%
11.72%
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
$0.07
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.51%.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
MicroCap
Value
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
27
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$29.62
$31.28
$36.67
$31.52
$33.00
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.17
0.15
0.05
0.09
0.18
c
Net
realized
and
unrealized
gains
(losses)
...........
(2.94)
(0.04)
(2.72)
8.25
2.24
Total
from
investment
operations
....................
(2.77)
0.11
(2.67)
8.34
2.42
Less
distributions
from:
Net
investment
income
..........................
(0.13)
—
(0.09)
(0.19)
—
Net
realized
gains
.............................
(4.71)
(1.77)
(2.63)
(3.00)
(3.90)
Total
distributions
...............................
(4.84)
(1.77)
(2.72)
(3.19)
(3.90)
Net
asset
value,
end
of
year
.......................
$22.01
$29.62
$31.28
$36.67
$31.52
Total
return
....................................
(11.95)%
0.87%
(7.90)%
27.29%
8.53%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.03%
0.97%
0.92%
0.92%
0.95%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
1.02%
0.96%
0.91%
0.91%
0.94%
Net
investment
income
...........................
0.73%
0.48%
0.14%
0.27%
0.60%
c
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$22,429
$29,687
$53,329
$76,228
$63,410
Portfolio
turnover
rate
............................
31.04%
7.04%
4.08%
8.82%
11.72%
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
$0.07
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.37%.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Statement
of
Investments,
October
31,
2020
Franklin
MicroCap
Value
Fund
franklintempleton.com
Annual
Report
28
I
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
98.0%
Aerospace
&
Defense
1.1%
a
Ducommun,
Inc.
......................................
United
States
41,500
$
1,365,350
a
Banks
16.7%
American
National
Bankshares
,
Inc.
.......................
United
States
30,504
695,491
Arrow
Financial
Corp.
..................................
United
States
35,844
981,050
Bar
Harbor
Bankshares
.................................
United
States
121,700
2,485,114
First
Business
Financial
Services,
Inc.
......................
United
States
37,400
641,410
First
Financial
Corp.
...................................
United
States
31,900
1,107,568
First
Internet
Bancorp
..................................
United
States
157,800
3,395,856
First
Mid
Bancshares,
Inc.
...............................
United
States
19,748
548,204
a
First
Western
Financial,
Inc.
.............................
United
States
24,529
348,312
Investar
Holding
Corp.
.................................
United
States
175,181
2,442,023
Northeast
Bank
.......................................
United
States
148,135
2,842,711
Northrim
BanCorp
,
Inc.
.................................
United
States
41,100
1,173,816
Orrstown
Financial
Services,
Inc.
.........................
United
States
43,700
610,926
Peapack
-Gladstone
Financial
Corp.
.......................
United
States
71,376
1,204,827
Peoples
Financial
Services
Corp.
.........................
United
States
56,751
2,034,523
WesBanco
,
Inc.
.......................................
United
States
42,357
1,028,852
21,540,683
Biotechnology
0.9%
a
Anika
Therapeutics,
Inc.
................................
United
States
37,000
1,206,940
a
Building
Products
2.1%
a
Gibraltar
Industries,
Inc.
................................
United
States
47,096
2,705,665
a
Commercial
Services
&
Supplies
1.0%
a
Heritage-Crystal
Clean,
Inc.
.............................
United
States
76,900
1,267,312
a
Communications
Equipment
2.2%
a
Digi
International,
Inc.
..................................
United
States
113,801
1,676,289
a
PCTEL,
Inc.
.........................................
United
States
47,500
242,250
a
Sierra
Wireless,
Inc.
...................................
Canada
78,100
866,910
2,785,449
Construction
&
Engineering
6.2%
a
Ameresco
,
Inc.,
A
.....................................
United
States
95,100
3,650,889
a
Northwest
Pipe
Co.
....................................
United
States
65,700
1,760,760
a
Sterling
Construction
Co.,
Inc.
............................
United
States
176,751
2,598,240
8,009,889
Construction
Materials
0.7%
United
States
Lime
&
Minerals,
Inc.
........................
United
States
9,000
834,300
Containers
&
Packaging
0.4%
a
UFP
Technologies,
Inc.
.................................
United
States
14,500
537,370
a
Diversified
Telecommunication
Services
2.1%
ATN
International,
Inc.
..................................
United
States
29,000
1,296,300
a
ORBCOMM,
Inc.
......................................
United
States
317,500
1,365,250
2,661,550
Electrical
Equipment
4.0%
LSI
Industries,
Inc.
....................................
United
States
390,518
2,671,143
Preformed
Line
Products
Co.
............................
United
States
23,400
1,287,702
a
Ultralife
Corp.
........................................
United
States
239,202
1,234,282
5,193,127
Electronic
Equipment,
Instruments
&
Components
3.4%
a
Key
Tronic
Corp.
......................................
United
States
231,400
1,767,896
a
Kimball
Electronics,
Inc.
................................
United
States
108,100
1,310,172
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
MicroCap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
29
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Electronic
Equipment,
Instruments
&
Components
(continued)
Richardson
Electronics
Ltd.
..............................
United
States
316,013
$
1,333,575
4,411,643
Energy
Equipment
&
Services
0.9%
a
Geospace
Technologies
Corp.
............................
United
States
100,800
517,104
a
Natural
Gas
Services
Group,
Inc.
.........................
United
States
71,710
623,877
1,140,981
Equity
Real
Estate
Investment
Trusts
(REITs)
1.1%
Alpine
Income
Property
Trust,
Inc.
.........................
United
States
99,300
1,385,235
Food
&
Staples
Retailing
1.2%
Village
Super
Market,
Inc.,
A
.............................
United
States
65,300
1,479,045
Food
Products
1.0%
a
Seneca
Foods
Corp.,
A
.................................
United
States
35,715
1,316,098
a
Health
Care
Equipment
&
Supplies
2.7%
a
IntriCon
Corp.
........................................
United
States
80,300
1,003,750
Invacare
Corp.
.......................................
United
States
244,800
1,985,328
a
Surgalign
Holdings,
Inc.
................................
United
States
241,200
419,688
3,408,766
Health
Care
Technology
2.0%
Computer
Programs
and
Systems,
Inc.
.....................
United
States
52,800
1,472,592
a
MTBC,
Inc.
..........................................
United
States
149,500
1,146,665
2,619,257
Hotels,
Restaurants
&
Leisure
5.0%
a
Century
Casinos,
Inc.
..................................
United
States
304,262
1,433,074
a
Chuy's
Holdings,
Inc.
..................................
United
States
81,100
1,702,289
a
Full
House
Resorts,
Inc.
................................
United
States
531,064
1,248,000
a
Lindblad
Expeditions
Holdings,
Inc.
........................
United
States
29,400
244,608
Ruth's
Hospitality
Group,
Inc.
............................
United
States
156,500
1,749,670
6,377,641
Household
Durables
2.9%
Hooker
Furniture
Corp.
.................................
United
States
70,000
1,925,000
a
Purple
Innovation,
Inc.
.................................
United
States
61,900
1,756,103
3,681,103
Independent
Power
and
Renewable
Electricity
Producers
0.5%
Polaris
Infrastructure,
Inc.
...............................
Canada
61,100
582,473
Interactive
Media
&
Services
0.4%
a
DHI
Group,
Inc.
.......................................
United
States
304,800
515,112
a
IT
Services
0.3%
Hackett
Group,
Inc.
(The)
...............................
United
States
27,300
352,716
Machinery
9.2%
Alamo
Group,
Inc.
.....................................
United
States
22,500
2,707,425
Graham
Corp.
........................................
United
States
9,530
125,796
Hurco
Cos.,
Inc.
......................................
United
States
105,200
3,139,168
Miller
Industries,
Inc.
...................................
United
States
86,200
2,580,828
Shyft
Group,
Inc.
(The)
.................................
United
States
170,800
3,298,148
11,851,365
Metals
&
Mining
2.1%
Olympic
Steel,
Inc.
....................................
United
States
98,100
1,119,321
Schnitzer
Steel
Industries,
Inc.,
A
.........................
United
States
63,200
1,327,200
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
MicroCap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
30
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Metals
&
Mining
(continued)
a
Universal
Stainless
&
Alloy
Products,
Inc.
...................
United
States
57,707
$
313,349
2,759,870
Mortgage
Real
Estate
Investment
Trusts
(REITs)
1.8%
Arbor
Realty
Trust,
Inc.
.................................
United
States
200,513
2,370,064
Oil,
Gas
&
Consumable
Fuels
1.2%
Adams
Resources
&
Energy,
Inc.
.........................
United
States
30,000
572,400
Ardmore
Shipping
Corp.
................................
Ireland
364,400
1,020,320
1,592,720
Paper
&
Forest
Products
0.9%
Mercer
International,
Inc.
................................
Germany
192,300
1,209,567
Professional
Services
0.6%
a
GP
Strategies
Corp.
...................................
United
States
25,700
248,005
Resources
Connection,
Inc.
.............................
United
States
52,100
559,554
807,559
Real
Estate
Management
&
Development
3.8%
CTO
Realty
Growth,
Inc.
................................
United
States
29,900
1,319,487
Griffin
Industrial
Realty,
Inc.
..............................
United
States
67,100
3,559,655
4,879,142
Semiconductors
&
Semiconductor
Equipment
3.1%
a
AXT,
Inc.
............................................
United
States
254,300
1,513,085
NVE
Corp.
..........................................
United
States
5,400
249,102
a
Photronics
,
Inc.
.......................................
United
States
233,500
2,276,625
4,038,812
Specialty
Retail
5.0%
Children's
Place,
Inc.
(The)
..............................
United
States
33,400
844,018
a
Genesco,
Inc.
........................................
United
States
66,500
1,178,380
Haverty
Furniture
Cos.,
Inc.
..............................
United
States
56,000
1,401,120
a
Hibbett
Sports,
Inc.
....................................
United
States
48,800
1,845,128
Shoe
Carnival,
Inc.
....................................
United
States
39,000
1,208,220
6,476,866
Textiles,
Apparel
&
Luxury
Goods
4.7%
Crown
Crafts,
Inc.
.....................................
United
States
14,133
81,547
a
Delta
Apparel,
Inc.
.....................................
United
States
101,100
1,683,315
Rocky
Brands,
Inc.
....................................
United
States
101,720
2,736,268
a
Vera
Bradley,
Inc.
.....................................
United
States
240,000
1,521,600
6,022,730
Thrifts
&
Mortgage
Finance
6.5%
Premier
Financial
Corp.
.................................
United
States
134,000
2,410,660
Southern
Missouri
Bancorp,
Inc.
..........................
United
States
85,900
2,188,732
Territorial
Bancorp,
Inc.
.................................
United
States
43,800
928,998
Western
New
England
Bancorp,
Inc.
.......................
United
States
92,700
533,952
WSFS
Financial
Corp.
..................................
United
States
73,800
2,338,722
8,401,064
Water
Utilities
0.3%
Consolidated
Water
Co.
Ltd.
.............................
United
States
38,900
391,334
Total
Common
Stocks
(Cost
$89,710,706)
......................................
126,178,798
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
MicroCap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
31
Short
Term
Investments
2.1%
a
a
Country
Shares
a
Value
a
Money
Market
Funds
2.1%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
........
United
States
2,721,839
$
2,721,839
Total
Money
Market
Funds
(Cost
$2,721,839)
...................................
2,721,839
Total
Short
Term
Investments
(Cost
$2,721,839
)
.................................
2,721,839
a
Total
Investments
(Cost
$92,432,545)
100.1%
...................................
$128,900,637
Other
Assets,
less
Liabilities
(0.1)%
...........................................
(157,883)
Net
Assets
100.0%
...........................................................
$128,742,754
a
Non
-income
producing.
b
See
Note
3
(
f
)
regarding
investments
in
affiliated
management
investment
companies.
c
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Mutual
U.S.
Value
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
32
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$34.61
$37.93
$41.08
$35.40
$40.06
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
1.14
c
0.52
0.45
0.38
d
0.22
Net
realized
and
unrealized
gains
(losses)
...........
(5.47)
1.13
(0.43)
7.79
1.17
Total
from
investment
operations
....................
(4.33)
1.65
0.02
8.17
1.39
Less
distributions
from:
Net
investment
income
..........................
(0.54)
(0.46)
(0.46)
(0.18)
(0.28)
Net
realized
gains
.............................
(2.15)
(4.51)
(2.71)
(2.31)
(5.77)
Total
distributions
...............................
(2.69)
(4.97)
(3.17)
(2.49)
(6.05)
Net
asset
value,
end
of
year
.......................
$27.59
$34.61
$37.93
$41.08
$35.40
Total
return
e
...................................
(13.94)%
6.22%
(0.15)%
23.63%
4.44%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.95%
0.93%
0.91%
0.92%
0.94%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
0.93%
0.89%
0.86%
0.87%
0.91%
Net
investment
income
...........................
3.94%
c
1.55%
1.13%
0.97%
d
0.62%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$538,538
$735,919
$772,976
$841,367
$795,663
Portfolio
turnover
rate
............................
57.78%
44.31%
29.85%
24.68%
30.25%
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
$0.69
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.55%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.73%.
e
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
33
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$32.97
$36.13
$39.27
$34.01
$38.70
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.93
c
0.26
0.15
0.08
d
(0.04)
Net
realized
and
unrealized
gains
(losses)
...........
(5.28)
1.09
(0.41)
7.49
1.12
Total
from
investment
operations
....................
(4.35)
1.35
(0.26)
7.57
1.08
Less
distributions
from:
Net
investment
income
..........................
(0.26)
—
(0.17)
—
—
Net
realized
gains
.............................
(2.15)
(4.51)
(2.71)
(2.31)
(5.77)
Total
distributions
...............................
(2.41)
(4.51)
(2.88)
(2.31)
(5.77)
Net
asset
value,
end
of
year
.......................
$26.21
$32.97
$36.13
$39.27
$34.01
Total
return
e
...................................
(14.57)%
5.41%
(0.91)%
22.73%
3.65%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.70%
1.68%
1.66%
1.67%
1.69%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
1.68%
1.64%
1.61%
1.62%
1.66%
Net
investment
income
(loss)
......................
3.36%
c
0.80%
0.38%
0.22%
d
(0.13)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$15,881
$27,443
$33,854
$65,586
$61,567
Portfolio
turnover
rate
............................
57.78%
44.31%
29.85%
24.68%
30.25%
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
$0.66
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.97
%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
(0.02)%.
e
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
34
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$34.70
$37.99
$41.10
$35.42
$40.06
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
1.11
c
0.44
0.35
0.29
d
0.13
Net
realized
and
unrealized
gains
(losses)
...........
(5.55)
1.14
(0.42)
7.80
1.17
Total
from
investment
operations
....................
(4.44)
1.58
(0.07)
8.09
1.30
Less
distributions
from:
Net
investment
income
..........................
(0.44)
(0.36)
(0.33)
(0.10)
(0.17)
Net
realized
gains
.............................
(2.15)
(4.51)
(2.71)
(2.31)
(5.77)
Total
distributions
...............................
(2.59)
(4.87)
(3.04)
(2.41)
(5.94)
Net
asset
value,
end
of
year
.......................
$27.67
$34.70
$37.99
$41.10
$35.42
Total
return
....................................
(14.16)%
5.94%
(0.39)%
23.33%
4.17%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.20%
1.18%
1.16%
1.17%
1.19%
Expenses
net
of
waiver
and
payments
by
affiliates
e
......
1.18%
1.14%
1.11%
1.12%
1.16%
Net
investment
income
...........................
3.80%
c
1.30%
0.88%
0.72%
d
0.37%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$4,465
$6,764
$7,280
$7,884
$8,486
Portfolio
turnover
rate
............................
57.78%
44.31%
29.85%
24.68%
30.25%
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
$0.70
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.41%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
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
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
35
In
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$35.93
$39.20
$42.38
$36.40
$41.10
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
1.27
c
0.67
0.61
0.75
d
0.35
Net
realized
and
unrealized
gains
(losses)
...........
(5.65)
1.18
(0.45)
7.83
1.20
Total
from
investment
operations
....................
(4.38)
1.85
0.16
8.58
1.55
Less
distributions
from:
Net
investment
income
..........................
(0.67)
(0.61)
(0.63)
(0.29)
(0.48)
Net
realized
gains
.............................
(2.15)
(4.51)
(2.71)
(2.31)
(5.77)
Total
distributions
...............................
(2.82)
(5.12)
(3.34)
(2.60)
(6.25)
Net
asset
value,
end
of
year
.......................
$28.73
$35.93
$39.20
$42.38
$36.40
Total
return
....................................
(13.61)%
6.61%
0.19%
24.10%
4.86%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.61%
0.59%
0.57%
0.57%
0.53%
Expenses
net
of
waiver
and
payments
by
affiliates
e
......
0.55%
0.52%
0.50%
0.47%
0.50%
Net
investment
income
...........................
4.24%
c
1.92%
1.49%
1.37%
d
1.03%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$27,952
$36,398
$36,580
$34,673
$157
Portfolio
turnover
rate
............................
57.78%
44.31%
29.85%
24.68%
30.25%
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
$0.72
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.85%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.13%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
36
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$36.01
$39.26
$42.39
$36.45
$41.08
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
1.28
c
0.63
0.57
0.49
d
0.31
Net
realized
and
unrealized
gains
(losses)
...........
(5.72)
1.19
(0.46)
8.04
1.20
Total
from
investment
operations
....................
(4.44)
1.82
0.11
8.53
1.51
Less
distributions
from:
Net
investment
income
..........................
(0.62)
(0.56)
(0.53)
(0.28)
(0.37)
Net
realized
gains
.............................
(2.15)
(4.51)
(2.71)
(2.31)
(5.77)
Total
distributions
...............................
(2.77)
(5.07)
(3.24)
(2.59)
(6.14)
Net
asset
value,
end
of
year
.......................
$28.80
$36.01
$39.26
$42.39
$36.45
Total
return
....................................
(13.71)%
6.48%
0.07%
23.98%
4.69%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.70%
0.68%
0.66%
0.67%
0.69%
Expenses
net
of
waiver
and
payments
by
affiliates
e
......
0.68%
0.64%
0.61%
0.62%
0.66%
Net
investment
income
...........................
4.22%
c
1.80%
1.38%
1.22%
d
0.87%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$34,029
$47,427
$48,616
$57,402
$75,573
Portfolio
turnover
rate
............................
57.78%
44.31%
29.85%
24.68%
30.25%
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
$0.72
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.83%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.98%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Statement
of
Investments,
October
31,
2020
Franklin
Mutual
U.S.
Value
Fund
franklintempleton.com
Annual
Report
37
a
a
Shares
a
Value
a
Common
Stocks
95.4%
Aerospace
&
Defense
1.6%
Huntington
Ingalls
Industries,
Inc.
.......................................
65,900
$
9,718,932
Automobiles
2.7%
General
Motors
Co.
..................................................
479,800
16,567,494
Banks
11.2%
Bank
of
America
Corp.
...............................................
875,500
20,749,350
Citizens
Financial
Group,
Inc.
..........................................
386,100
10,521,225
Farmers
&
Merchants
Bank
of
Long
Beach
................................
1,475
9,034,375
JPMorgan
Chase
&
Co.
...............................................
200,800
19,686,432
PNC
Financial
Services
Group,
Inc.
(The)
.................................
86,200
9,644,056
69,635,438
Building
Products
2.7%
Johnson
Controls
International
plc
.......................................
393,600
16,613,856
Chemicals
3.6%
Huntsman
Corp.
....................................................
489,300
11,885,097
Westlake
Chemical
Corp.
.............................................
155,100
10,487,862
22,372,959
Commercial
Services
&
Supplies
1.4%
Tetra
Tech,
Inc.
.....................................................
85,400
8,617,714
Consumer
Finance
2.5%
Capital
One
Financial
Corp.
...........................................
215,700
15,763,356
Diversified
Financial
Services
2.1%
Voya
Financial,
Inc.
..................................................
275,200
13,190,336
Electric
Utilities
2.3%
Entergy
Corp.
......................................................
73,400
7,429,548
Pinnacle
West
Capital
Corp.
...........................................
81,900
6,680,583
14,110,131
Electrical
Equipment
1.3%
Regal
Beloit
Corp.
...................................................
80,640
7,955,136
Electronic
Equipment,
Instruments
&
Components
2.2%
Corning,
Inc.
.......................................................
435,800
13,932,526
Energy
Equipment
&
Services
1.3%
Schlumberger
NV
...................................................
531,900
7,946,586
Entertainment
1.6%
Walt
Disney
Co.
(The)
................................................
81,600
9,894,000
Equity
Real
Estate
Investment
Trusts
(REITs)
4.0%
Brixmor
Property
Group,
Inc.
...........................................
1,322,100
14,490,216
Mid-America
Apartment
Communities,
Inc.
................................
38,300
4,466,929
Vornado
Realty
Trust
.................................................
199,800
6,139,854
25,096,999
Food
Products
5.9%
Archer-Daniels-Midland
Co.
...........................................
268,100
12,396,944
Kraft
Heinz
Co.
(The)
................................................
796,900
24,377,170
36,774,114
Health
Care
Equipment
&
Supplies
3.1%
a
Envista
Holdings
Corp.
...............................................
335,600
8,866,552
Medtronic
plc
......................................................
104,800
10,539,736
19,406,288
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
Annual
Report
38
a
a
Shares
a
Value
a
Health
Care
Providers
&
Services
2.6%
Anthem,
Inc.
.......................................................
58,600
$
15,986,080
Household
Durables
2.0%
DR
Horton,
Inc.
.....................................................
131,300
8,772,153
Lennar
Corp.,
A
.....................................................
52,900
3,715,167
12,487,320
Independent
Power
and
Renewable
Electricity
Producers
1.8%
AES
Corp.
(The)
....................................................
589,000
11,485,500
Industrial
Conglomerates
1.9%
General
Electric
Co.
.................................................
1,623,800
12,048,596
Insurance
4.7%
Everest
Re
Group
Ltd.
...............................................
76,700
15,116,036
Hartford
Financial
Services
Group,
Inc.
(The)
..............................
360,100
13,871,052
28,987,088
IT
Services
1.6%
Cognizant
Technology
Solutions
Corp.,
A
..................................
136,800
9,770,256
Life
Sciences
Tools
&
Services
1.2%
a
Bio-Rad
Laboratories,
Inc.,
A
...........................................
12,795
7,503,244
a
Machinery
2.0%
Oshkosh
Corp.
.....................................................
128,000
8,622,080
PACCAR,
Inc.
......................................................
42,600
3,637,188
12,259,268
Media
3.9%
Comcast
Corp.,
A
...................................................
435,280
18,386,227
a
Discovery,
Inc.,
C
...................................................
326,637
5,983,990
24,370,217
Metals
&
Mining
1.8%
Reliance
Steel
&
Aluminum
Co.
.........................................
103,190
11,246,678
Oil,
Gas
&
Consumable
Fuels
2.7%
Chevron
Corp.
.....................................................
142,200
9,882,900
Kinder
Morgan,
Inc.
..................................................
586,300
6,976,970
16,859,870
Pharmaceuticals
6.9%
Merck
&
Co.,
Inc.
...................................................
243,000
18,276,030
Novartis
AG,
ADR
...................................................
170,500
13,312,640
Perrigo
Co.
plc
.....................................................
249,600
10,949,952
42,538,622
Semiconductors
&
Semiconductor
Equipment
1.2%
MKS
Instruments,
Inc.
................................................
67,300
7,294,647
Software
4.3%
NortonLifeLock
,
Inc.
.................................................
470,300
9,674,071
Oracle
Corp.
.......................................................
305,600
17,147,216
26,821,287
Specialty
Retail
1.7%
Dick's
Sporting
Goods,
Inc.
............................................
181,200
10,264,980
Technology
Hardware,
Storage
&
Peripherals
2.0%
Western
Digital
Corp.
................................................
323,032
12,187,998
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
Annual
Report
39
See
Abbreviations
on
page
68
.
a
a
Shares
a
Value
a
Textiles,
Apparel
&
Luxury
Goods
2.4%
Tapestry,
Inc.
......................................................
660,700
$
14,687,361
Wireless
Telecommunication
Services
1.2%
a
T-Mobile
US,
Inc.
...................................................
70,700
7,746,599
a
Total
Common
Stocks
(Cost
$548,701,017)
.....................................
592,141,476
Principal
Amount
a
a
a
a
Corporate
Bonds
0.9%
Machinery
0.2%
Mueller
Industries,
Inc.
,
Sub.
Note
,
6
%
,
3/01/27
.............................
$
1,490,000
1,525,104
Software
0.7%
b
Veritas
US,
Inc.
/
Veritas
Bermuda
Ltd.
,
Senior
Note
,
144A,
10.5
%
,
2/01/24
........
4,661,000
4,340,067
Total
Corporate
Bonds
(Cost
$5,670,562)
.......................................
5,865,171
Total
Long
Term
Investments
(Cost
$554,371,579)
...............................
598,006,647
a
a
a
a
a
Short
Term
Investments
3.5%
Shares
a
Money
Market
Funds
3.5%
c,d
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
......................
21,438,515
21,438,515
Total
Money
Market
Funds
(Cost
$21,438,515)
..................................
21,438,515
Total
Short
Term
Investments
(Cost
$21,438,515
)
................................
21,438,515
a
Total
Investments
(Cost
$575,810,094)
99.8%
...................................
$619,445,162
Other
Assets,
less
Liabilities
0.2%
.............................................
1,420,289
Net
Assets
100.0%
...........................................................
$620,865,451
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
October
31,
2020,
the
value
of
this
security
was
$4,340,067,
representing
0.7%
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.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Small
Cap
Value
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
40
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$49.48
$52.59
$59.07
$51.45
$51.72
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.45
0.51
c
0.39
d
0.31
e
0.20
Net
realized
and
unrealized
gains
(losses)
...........
(5.01)
4.00
(1.95)
10.04
4.74
Total
from
investment
operations
....................
(4.56)
4.51
(1.56)
10.35
4.94
Less
distributions
from:
Net
investment
income
..........................
(0.58)
(0.44)
(0.42)
(0.12)
(0.29)
Net
realized
gains
.............................
(2.50)
(7.18)
(4.50)
(2.61)
(4.92)
Total
distributions
...............................
(3.08)
(7.62)
(4.92)
(2.73)
(5.21)
Net
asset
value,
end
of
year
.......................
$41.84
$49.48
$52.59
$59.07
$51.45
Total
return
f
....................................
(10.04)%
11.35%
(3.04)%
20.53%
11.15%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.08%
1.06%
1.05%
1.05%
1.11%
Expenses
net
of
waiver
and
payments
by
affiliates
g
......
1.07%
1.05%
1.03%
1.03%
1.09%
Net
investment
income
...........................
1.08%
1.10%
c
0.69%
d
0.58%
e
0.40%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,123,039
$1,334,235
$1,366,866
$1,364,629
$1,125,268
Portfolio
turnover
rate
............................
67.46%
57.84%
53.26%
33.38%
41.89%
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
$0.14
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.80%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.52%.
e
Net
investment
income
per
share
includes
approximately
$0.16
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.29%.
f
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
41
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$42.84
$46.45
$52.75
$46.42
$47.22
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.12
0.15
c
(0.02)
d
(0.09)
e
(0.14)
Net
realized
and
unrealized
gains
(losses)
...........
(4.33)
3.42
(1.72)
9.03
4.26
Total
from
investment
operations
....................
(4.21)
3.57
(1.74)
8.94
4.12
Less
distributions
from:
Net
investment
income
..........................
(0.26)
—
(0.06)
—
—
Net
realized
gains
.............................
(2.50)
(7.18)
(4.50)
(2.61)
(4.92)
Total
distributions
...............................
(2.76)
(7.18)
(4.56)
(2.61)
(4.92)
Net
asset
value,
end
of
year
.......................
$35.87
$42.84
$46.45
$52.75
$46.42
Total
return
f
....................................
(10.73)%
10.52%
(3.77)%
19.62%
10.35%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.83%
1.81%
1.80%
1.80%
1.86%
Expenses
net
of
waiver
and
payments
by
affiliates
g
......
1.82%
1.80%
1.78%
1.78%
1.84%
Net
investment
income
(loss)
......................
0.34%
0.35%
c
(0.06)%
d
(0.17)%
e
(0.35)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$77,586
$111,639
$138,188
$225,228
$219,150
Portfolio
turnover
rate
............................
67.46%
57.84%
53.26%
33.38%
41.89%
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
$0.14
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.05%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
(0.23)%.
e
Net
investment
income
per
share
includes
approximately
$0.16
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
(0.46)%.
f
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
42
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$48.88
$51.98
$58.37
$50.87
$51.18
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.35
0.40
c
0.25
d
0.18
e
0.08
Net
realized
and
unrealized
gains
(losses)
...........
(4.97)
3.94
(1.93)
9.93
4.69
Total
from
investment
operations
....................
(4.62)
4.34
(1.68)
10.11
4.77
Less
distributions
from:
Net
investment
income
..........................
(0.45)
(0.26)
(0.21)
—
(0.16)
Net
realized
gains
.............................
(2.50)
(7.18)
(4.50)
(2.61)
(4.92)
Total
distributions
...............................
(2.95)
(7.44)
(4.71)
(2.61)
(5.08)
Net
asset
value,
end
of
year
.......................
$41.31
$48.88
$51.98
$58.37
$50.87
Total
return
....................................
(10.27)%
11.06%
(3.28)%
20.23%
10.90%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.33%
1.31%
1.30%
1.30%
1.36%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
1.32%
1.30%
1.28%
1.28%
1.34%
Net
investment
income
...........................
0.84%
0.85%
c
0.44%
d
0.33%
e
0.15%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$106,201
$143,634
$158,678
$209,627
$212,194
Portfolio
turnover
rate
............................
67.46%
57.84%
53.26%
33.38%
41.89%
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
$0.14
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.55%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.27%.
e
Net
investment
income
per
share
includes
approximately
$0.16
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.04%.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
43
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$52.29
$55.17
$61.71
$53.60
$53.75
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.65
0.75
c
0.66
d
0.58
e
0.43
Net
realized
and
unrealized
gains
(losses)
...........
(5.27)
4.23
(2.05)
10.49
4.93
Total
from
investment
operations
....................
(4.62)
4.98
(1.39)
11.07
5.36
Less
distributions
from:
Net
investment
income
..........................
(0.80)
(0.68)
(0.65)
(0.35)
(0.59)
Net
realized
gains
.............................
(2.50)
(7.18)
(4.50)
(2.61)
(4.92)
Total
distributions
...............................
(3.30)
(7.86)
(5.15)
(2.96)
(5.51)
Net
asset
value,
end
of
year
.......................
$44.37
$52.29
$55.17
$61.71
$53.60
Total
return
....................................
(9.65)%
11.82%
(2.63)%
21.07%
11.69%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.68%
0.66%
0.66%
0.60%
0.64%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
0.64%
0.61%
0.60%
0.58%
0.62%
Net
investment
income
...........................
1.47%
1.54%
c
1.12%
d
1.03%
e
0.87%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$510,946
$362,397
$270,426
$221,246
$100,101
Portfolio
turnover
rate
............................
67.46%
57.84%
53.26%
33.38%
41.89%
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
$0.14
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.24%.
d
Net
investment
income
per
share
includes
approximately
$0.09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.95%.
e
Net
investment
income
per
share
includes
approximately
$0.16
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.74%.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
44
a
Year
Ended
October
31,
2020
2019
2018
2017
2016
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$52.36
$55.19
$61.66
$53.58
$53.67
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.58
0.67
c
0.56
d
0.48
e
0.32
Net
realized
and
unrealized
gains
(losses)
...........
(5.29)
4.24
(2.06)
10.48
4.94
Total
from
investment
operations
....................
(4.71)
4.91
(1.50)
10.96
5.26
Less
distributions
from:
Net
investment
income
..........................
(0.71)
(0.56)
(0.47)
(0.27)
(0.43)
Net
realized
gains
.............................
(2.50)
(7.18)
(4.50)
(2.61)
(4.92)
Total
distributions
...............................
(3.21)
(7.74)
(4.97)
(2.88)
(5.35)
Net
asset
value,
end
of
year
.......................
$44.44
$52.36
$55.19
$61.66
$53.58
Total
return
....................................
(9.81)%
11.61%
(2.81)%
20.84%
11.43%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.83%
0.81%
0.80%
0.80%
0.86%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
0.82%
0.80%
0.78%
0.78%
0.84%
Net
investment
income
...........................
1.30%
1.35%
c
0.94%
d
0.83%
e
0.65%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$646,240
$522,329
$544,792
$583,364
$893,324
Portfolio
turnover
rate
............................
67.46%
57.84%
53.26%
33.38%
41.89%
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
$0.14
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
1.05%.
d
Net
investment
income
per
share
includes
approximately
$0.
09
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.77%.
e
Net
investment
income
per
share
includes
approximately
$0.16
per
share
related
to
income
received
in
the
form
of
special
dividends
in
connection
with
certain
Fund
holdings.
Excluding
this
amount,
the
ratio
of
net
investment
income
to
average
net
assets
would
have
been
0.54%.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Statement
of
Investments,
October
31,
2020
Franklin
Small
Cap
Value
Fund
franklintempleton.com
Annual
Report
45
I
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
96.7%
Aerospace
&
Defense
0.2%
a
Meggitt
plc
..........................................
United
Kingdom
1,343,750
$
4,761,019
a
Auto
Components
0.1%
LCI
Industries
........................................
United
States
18,940
2,076,960
Automobiles
2.3%
Thor
Industries,
Inc.
...................................
United
States
654,689
55,373,596
Banks
13.7%
Atlantic
Union
Bankshares
Corp.
..........................
United
States
917,254
23,197,354
Bryn
Mawr
Bank
Corp.
.................................
United
States
988,052
26,539,077
Columbia
Banking
System,
Inc.
...........................
United
States
1,620,603
46,041,331
First
Horizon
National
Corp.
.............................
United
States
6,800,305
70,791,175
b
First
of
Long
Island
Corp.
(The)
...........................
United
States
1,230,606
18,988,250
German
American
Bancorp,
Inc.
..........................
United
States
376,500
11,359,005
Glacier
Bancorp,
Inc.
...................................
United
States
337,616
12,086,653
Lakeland
Financial
Corp.
................................
United
States
789,294
40,356,602
Peoples
Bancorp,
Inc.
..................................
United
States
540,026
12,204,588
South
State
Corp.
.....................................
United
States
782,675
48,056,245
TriCo
Bancshares
.....................................
United
States
443,501
12,830,484
Washington
Trust
Bancorp,
Inc.
...........................
United
States
473,341
15,984,725
338,435,489
Building
Products
4.0%
Apogee
Enterprises,
Inc.
................................
United
States
496,867
11,870,152
a
Gibraltar
Industries,
Inc.
................................
United
States
192,717
11,071,592
Griffon
Corp.
.........................................
United
States
528,568
11,332,498
Insteel
Industries,
Inc.
..................................
United
States
896,697
19,512,127
a
Masonite
International
Corp.
.............................
United
States
184,456
16,232,128
UFP
Industries,
Inc.
....................................
United
States
585,002
29,197,450
99,215,947
Capital
Markets
1.0%
Houlihan
Lokey,
Inc.
...................................
United
States
402,637
25,245,340
Chemicals
7.5%
Avient
Corp.
.........................................
United
States
2,380,819
73,972,046
Cabot
Corp.
.........................................
United
States
1,164,972
44,280,586
Minerals
Technologies,
Inc.
..............................
United
States
1,223,357
66,905,394
185,158,026
Commercial
Services
&
Supplies
1.4%
McGrath
RentCorp
....................................
United
States
606,460
34,616,737
Communications
Equipment
1.3%
a
NetScout
Systems,
Inc.
.................................
United
States
1,508,897
30,962,566
a
Construction
&
Engineering
1.0%
Argan,
Inc.
..........................................
United
States
281,493
11,594,697
a
WillScot
Mobile
Mini
Holdings
Corp.
.......................
United
States
686,941
12,763,364
24,358,061
Construction
Materials
0.5%
Eagle
Materials,
Inc.
...................................
United
States
143,809
12,259,717
Electric
Utilities
1.7%
IDACORP,
Inc.
.......................................
United
States
481,553
42,246,645
Electrical
Equipment
1.3%
Regal
Beloit
Corp.
.....................................
United
States
317,969
31,367,642
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
46
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Electronic
Equipment,
Instruments
&
Components
1.8%
Benchmark
Electronics,
Inc.
.............................
United
States
849,804
$
17,701,417
a
Coherent,
Inc.
........................................
United
States
10,774
1,348,258
a
FARO
Technologies,
Inc.
................................
United
States
7,199
433,668
a
II-VI,
Inc.
............................................
United
States
412,418
18,752,647
a
Plexus
Corp.
.........................................
United
States
82,539
5,739,762
43,975,752
Energy
Equipment
&
Services
0.4%
Hunting
plc
..........................................
United
Kingdom
3,325,755
6,009,683
a
Natural
Gas
Services
Group,
Inc.
.........................
United
States
531,000
4,619,700
10,629,383
Equity
Real
Estate
Investment
Trusts
(REITs)
2.5%
Healthcare
Realty
Trust,
Inc.
.............................
United
States
623,979
17,346,616
Highwoods
Properties,
Inc.
..............................
United
States
670,628
19,964,596
Sunstone
Hotel
Investors,
Inc.
............................
United
States
3,170,665
23,526,334
Weingarten
Realty
Investors
.............................
United
States
24,600
390,156
61,227,702
Food
&
Staples
Retailing
0.5%
a
BJ's
Wholesale
Club
Holdings,
Inc.
........................
United
States
307,617
11,778,655
a
Food
Products
1.8%
Glanbia
plc
..........................................
Ireland
4,510,289
42,898,216
Maple
Leaf
Foods,
Inc.
.................................
Canada
114,258
2,080,693
44,978,909
Gas
Utilities
0.1%
Spire,
Inc.
...........................................
United
States
50,658
2,838,874
Health
Care
Equipment
&
Supplies
2.9%
a
Envista
Holdings
Corp.
.................................
United
States
1,417,273
37,444,353
a
Integer
Holdings
Corp.
.................................
United
States
592,752
34,646,354
72,090,707
Hotels,
Restaurants
&
Leisure
3.0%
a
Dalata
Hotel
Group
plc
.................................
Ireland
2,273,463
6,404,704
a
Denny's
Corp.
........................................
United
States
1,224,181
10,968,662
Jack
in
the
Box,
Inc.
...................................
United
States
660,729
52,897,964
Wyndham
Hotels
&
Resorts,
Inc.
..........................
United
States
49,306
2,293,222
72,564,552
Household
Durables
0.6%
a
M/I
Homes,
Inc.
.......................................
United
States
380,200
15,557,784
a
Insurance
12.9%
CNO
Financial
Group,
Inc.
..............................
United
States
3,518,695
62,456,836
Hanover
Insurance
Group,
Inc.
(The)
.......................
United
States
773,483
73,991,384
Horace
Mann
Educators
Corp.
...........................
United
States
2,031,284
68,880,841
Old
Republic
International
Corp.
..........................
United
States
4,936,429
80,365,063
Selective
Insurance
Group,
Inc.
...........................
United
States
638,183
33,223,807
318,917,931
Leisure
Products
1.9%
BRP,
Inc.
............................................
United
States
223,809
12,089,248
Brunswick
Corp.
......................................
United
States
506,852
32,291,541
Callaway
Golf
Co.
.....................................
United
States
126,862
1,965,092
46,345,881
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
47
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Machinery
18.3%
Astec
Industries,
Inc.
...................................
United
States
460,614
$
23,399,191
Columbus
McKinnon
Corp.
..............................
United
States
857,755
29,069,317
b
Greenbrier
Cos.,
Inc.
(The)
..............................
United
States
1,784,607
48,148,697
Hillenbrand,
Inc.
......................................
United
States
1,824,025
53,352,731
John
Bean
Technologies
Corp.
...........................
United
States
27,032
2,269,877
a
Meritor,
Inc.
..........................................
United
States
1,001,932
24,387,025
Mueller
Industries,
Inc.
.................................
United
States
758,835
21,953,096
Mueller
Water
Products,
Inc.,
A
...........................
United
States
4,266,170
44,197,521
Oshkosh
Corp.
.......................................
United
States
718,048
48,367,713
REV
Group,
Inc.
......................................
United
States
448,282
3,519,014
Rexnord
Corp.
.......................................
United
States
1,556,250
49,924,500
a
SPX
FLOW,
Inc.
......................................
United
States
563,242
23,853,299
Timken
Co.
(The)
.....................................
United
States
637,997
38,088,421
b
Wabash
National
Corp.
.................................
United
States
2,782,764
39,682,215
450,212,617
Metals
&
Mining
1.5%
Reliance
Steel
&
Aluminum
Co.
...........................
United
States
342,790
37,360,682
Multi-Utilities
2.0%
Black
Hills
Corp.
......................................
United
States
875,108
49,583,619
Oil,
Gas
&
Consumable
Fuels
0.9%
Crescent
Point
Energy
Corp.
.............................
Canada
17,117,321
21,329,195
Paper
&
Forest
Products
1.4%
Glatfelter
Corp.
.......................................
United
States
2,196,680
31,346,624
Louisiana-Pacific
Corp.
.................................
United
States
121,716
3,478,643
34,825,267
Professional
Services
0.9%
a
Huron
Consulting
Group,
Inc.
............................
United
States
68,850
2,606,661
Kforce,
Inc.
..........................................
United
States
594,840
20,640,948
23,247,609
Road
&
Rail
0.3%
Heartland
Express,
Inc.
.................................
United
States
427,879
7,834,465
Semiconductors
&
Semiconductor
Equipment
0.2%
a
Advanced
Energy
Industries,
Inc.
.........................
United
States
37,951
2,560,554
MKS
Instruments,
Inc.
..................................
United
States
21,348
2,313,910
4,874,464
Software
0.7%
a
ACI
Worldwide,
Inc.
....................................
United
States
543,898
15,865,505
a
Specialty
Retail
3.7%
a
Boot
Barn
Holdings,
Inc.
................................
United
States
1,197,166
38,333,255
Group
1
Automotive,
Inc.
................................
United
States
503,698
53,432,284
91,765,539
Textiles,
Apparel
&
Luxury
Goods
2.0%
Carter's,
Inc.
.........................................
United
States
404,000
32,905,800
Wolverine
World
Wide,
Inc.
..............................
United
States
653,669
17,433,352
50,339,152
Thrifts
&
Mortgage
Finance
0.4%
TrustCo
Bank
Corp.
...................................
United
States
1,639,400
9,008,503
Total
Common
Stocks
(Cost
$2,347,281,923)
....................................
2,383,230,492
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
48
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
a
Corporate
Bonds
0.2%
Machinery
0.2%
Mueller
Industries,
Inc.
,
Sub.
Note
,
6
%
,
3/01/27
...............
United
States
4,532,000
$
4,638,774
Total
Corporate
Bonds
(Cost
$4,532,000)
.......................................
4,638,774
Total
Long
Term
Investments
(Cost
$2,351,813,923)
.............................
2,387,869,266
a
Short
Term
Investments
2.7%
a
a
Country
Shares
a
Value
a
Money
Market
Funds
2.7%
c,d
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
........
United
States
67,492,583
67,492,583
Total
Money
Market
Funds
(Cost
$67,492,583)
..................................
67,492,583
Total
Short
Term
Investments
(Cost
$67,492,583
)
................................
67,492,583
a
Total
Investments
(Cost
$2,419,306,506)
99.6%
..................................
$2,455,361,849
Other
Assets,
less
Liabilities
0.4%
.............................................
8,651,046
Net
Assets
100.0%
...........................................................
$2,464,012,895
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Non-income
producing.
b
See
Note
8
regarding
holdings
of
5%
voting
securities.
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.
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Assets
and
Liabilities
October
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
49
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
.................................
$89,710,706
$554,371,579
$2,240,812,143
Cost
-
Non-controlled
affiliates
(Note
3
f
and
8
)
..................
2,721,839
21,438,515
178,494,363
Value
-
Unaffiliated
issuers
................................
$126,178,798
$598,006,647
$2,281,050,104
Value
-
Non-controlled
affiliates
(Note
3
f
and
8
)
.................
2,721,839
21,438,515
174,311,745
Cash
..................................................
11,387
180,720
—
Receivables:
Investment
securities
sold
.................................
137,885
4,303,293
8,804,909
Capital
shares
sold
......................................
59,155
500,604
17,246,513
Dividends
and
interest
...................................
30,850
704,437
1,771,588
Other
assets
............................................
58
291
849
Total
assets
........................................
129,139,972
625,134,507
2,483,185,708
Liabilities:
Payables:
Investment
securities
purchased
............................
391
2,794,305
10,400,973
Capital
shares
redeemed
.................................
195,676
787,972
6,415,993
Management
fees
.......................................
84,685
263,510
1,210,296
Distribution
fees
........................................
20,816
134,171
361
,614
Transfer
agent
fees
......................................
30,318
175,833
617,241
Professional
fees
.......................................
53,448
53,706
60,051
Accrued
expenses
and
other
liabilities
.........................
11,884
59,559
106,645
Total
liabilities
.......................................
397,218
4,269,056
19,172,813
Net
assets,
at
value
...............................
$128,742,754
$620,865,451
$2,464,012,895
Net
assets
consist
of:
Paid-in
capital
...........................................
$84,068,306
$604,609,837
$2,380,299,159
Total
distributable
earnings
(losses)
...........................
44,674,448
16,255,614
83,713,736
Net
assets,
at
value
...............................
$128,742,754
$620,865,451
$2,464,012,895
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Assets
and
Liabilities
(continued)
October
31,
2020
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
50
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Class
A:
Net
assets,
at
value
.....................................
$94,015,372
$538,538,177
$1,123,038,970
Shares
outstanding
......................................
4,318,710
19,521,723
26,844,101
Net
asset
value
per
share
a
................................
$21.77
$27.59
$41.84
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
..............................................
$23.04
$29.20
$44.28
Class
C:
Net
assets,
at
value
.....................................
$—
$15,881,126
$77,586,001
Shares
outstanding
......................................
—
605,915
2,162,741
Net
asset
value
and
maximum
offering
price
per
share
a
...........
$—
$26.21
$35.87
Class
R:
Net
assets,
at
value
.....................................
$—
$4,465,463
$106,201,316
Shares
outstanding
......................................
—
161,361
2,570,879
Net
asset
value
and
maximum
offering
price
per
share
...........
$—
$27.67
$41.31
Class
R6:
Net
assets,
at
value
.....................................
$12,298,646
$27,951,959
$510,946,235
Shares
outstanding
......................................
554,804
972,866
11,514,710
Net
asset
value
and
maximum
offering
price
per
share
...........
$22.17
$28.73
$44.37
Advisor
Class:
Net
assets,
at
value
.....................................
$22,428,736
$34,028,726
$646,240,373
Shares
outstanding
......................................
1,018,826
1,181,647
14,542,591
Net
asset
value
and
maximum
offering
price
per
share
...........
$22.01
$28.80
$44.44
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Operations
for
the
year
ended
October
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
51
7
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$3,960,
$74,081
and
$75,623,
respectively)
Unaffiliated
issuers
......................................
$2,531,349
$33,366,867
$46,115,738
Non-controlled
affiliates
(Note
3
f
and
8
)
.......................
29,876
378,772
2,238,467
Interest:
Unaffiliated
issuers
......................................
—
477,636
272,676
Total
investment
income
.................................
2,561,225
34,223,275
48,626,881
Expenses:
Management
fees
(Note
3
a
)
.................................
1,086,780
3,412,962
13,267,719
Distribution
fees:
(Note
3c
)
Class
A
..............................................
271,558
1,520,529
2,890,045
Class
C
..............................................
—
210,172
898,660
Class
R
..............................................
—
25,901
583,365
Transfer
agent
fees:
(Note
3e
)
Class
A
..............................................
151,777
960,965
2,474,936
Class
C
..............................................
—
32,898
192,532
Class
R
..............................................
—
8,213
251,326
Class
R6
.............................................
8,457
21,585
275,649
Advisor
Class
..........................................
30,399
60,075
1,101,799
Custodian
fees
(Note
4
)
....................................
935
4,136
14,909
Reports
to
shareholders
....................................
24,287
99,955
206,079
Registration
and
filing
fees
..................................
53,782
98,835
168,358
Professional
fees
.........................................
102,184
113,723
126,096
Trustees'
fees
and
expenses
................................
11,699
53,587
161,062
Other
..................................................
9,915
19,037
39,908
Total
expenses
.......................................
1,751,773
6,642,573
22,652,443
Expense
reductions
(Note
4
)
.............................
(205)
(105)
(1,802)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
............
(17,061)
(173,264)
(321,218)
Net
expenses
.......................................
1,734,507
6,469,204
22,329,423
Net
investment
income
..............................
826,718
27,754,071
26,297,458
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
....................................
8,104,616
(51,050,450)
55,880,881
Non-controlled
affiliates
(Note
3
f
and
8
)
.....................
345,794
—
(7,912,991)
Foreign
currency
transactions
..............................
566
—
(112,858)
Net
realized
gain
(loss)
................................
8,450,976
(51,050,450)
47,855,032
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
....................................
(31,408,004)
(91,259,740)
(294,059,259)
Non-controlled
affiliates
(Note
3
f
and
8
)
.....................
(171,000)
—
1,231,405
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
...........................................
—
—
18,710
Net
change
in
unrealized
appreciation
(depreciation)
..........
(31,579,004)
(91,259,740)
(292,809,144)
Net
realized
and
unrealized
gain
(loss)
..........................
(23,128,028)
(142,310,190)
(244,954,112)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
........
$(22,301,310)
$(114,556,119)
$(218,656,654)
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
52
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Year
Ended
October
31,
2020
Year
Ended
October
31,
2019
Year
Ended
October
31,
2020
Year
Ended
October
31,
2019
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
............
$826,718
$680,528
$27,754,071
$13,333,162
Net
realized
gain
(loss)
............
8,450,976
33,575,342
(51,050,450)
55,189,114
Net
change
in
unrealized
appreciation
(depreciation)
.................
(31,579,004)
(36,020,949)
(91,259,740)
(18,288,428)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
(22,301,310)
(1,765,079)
(114,556,119)
50,233,848
Distributions
to
shareholders:
Class
A
........................
(22,379,215)
(10,280,977)
(55,980,118)
(100,460,949)
Class
C
........................
—
—
(1,950,834)
(4,087,821)
Class
R
........................
—
—
(484,796)
(947,271)
Class
R6
.......................
(3,108,432)
(1,173,990)
(2,794,097)
(4,747,031)
Advisor
Class
...................
(4,396,451)
(2,743,931)
(3,607,514)
(6,158,856)
Total
distributions
to
shareholders
.....
(29,884,098)
(14,198,898)
(64,817,359)
(116,401,928)
Capital
share
transactions:
(Note
2
)
Class
A
........................
(12,239,692)
(27,468,769)
(42,590,380)
20,208,235
Class
C
........................
—
—
(5,609,273)
(3,857,048)
Class
R
........................
—
—
(990,297)
101,885
Class
R6
.......................
(1,373,665)
(722,873)
(1,026,422)
2,172,372
Advisor
Class
...................
(308,576)
(20,006,350)
(3,496,139)
2,188,459
Total
capital
share
transactions
.......
(13,921,933)
(48,197,992)
(53,712,511)
20,813,903
Net
increase
(decrease)
in
net
assets
.....................
(66,107,341)
(64,161,969)
(233,085,989)
(45,354,177)
Net
assets:
Beginning
of
year
..................
194,850,095
259,012,064
853,951,440
899,305,617
End
of
year
......................
$128,742,754
$194,850,095
$620,865,451
$853,951,440
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
53
Franklin
Small
Cap
Value
Fund
Year
Ended
October
31,
2020
Year
Ended
October
31,
2019
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$26,297,458
$27,746,004
Net
realized
gain
(loss)
.................................................
47,855,032
134,722,504
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(292,809,144)
92,316,108
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(218,656,654)
254,784,616
Distributions
to
shareholders:
Class
A
.............................................................
(82,154,393)
(194,970,871)
Class
C
.............................................................
(7,034,679)
(20,745,341)
Class
R
.............................................................
(8,475,708)
(22,140,136)
Class
R6
............................................................
(23,812,714)
(38,887,793)
Advisor
Class
........................................................
(32,065,484)
(74,272,104)
Total
distributions
to
shareholders
..........................................
(153,542,978)
(351,016,245)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
1,190,848
22,980,976
Class
C
.............................................................
(14,696,868)
(17,085,201)
Class
R
.............................................................
(14,716,760)
(8,153,164)
Class
R6
............................................................
194,123,939
94,971,019
Advisor
Class
........................................................
196,078,056
(1,200,427)
Total
capital
share
transactions
............................................
361,979,215
91,513,203
Net
increase
(decrease)
in
net
assets
...................................
(10,220,417)
(4,718,426)
Net
assets:
Beginning
of
year
.......................................................
2,474,233,312
2,478,951,738
End
of
year
...........................................................
$2,464,012,895
$2,474,233,312
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
54
franklintempleton.com
Annual
Report
1.
Organization
and
Significant
Accounting
Policies
Franklin
Value
Investors
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of
three
separate
funds
(Funds)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
The
classes
of
shares
offered
within
each
of
the
Funds
are
indicated
below.
Class
C
shares
automatically
convert
to
Class
A
shares
after
they
have
been
held
for
10
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.
Class
A,
Class
R6
&
Advisor
Class
Franklin
MicroCap
Value
Fund
a
Class
A,
Class
C,
Class
R
,
Class
R6
&
Advisor
Class
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
a
Effective
September
19,
2019,
the
Franklin
MicroCap
Value
Fund
reopened
to
new
investors.
The
following
summarizes
the Funds'
significant
accounting
policies.
a.
Financial
Instrument
Valuation
The Funds'
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 Funds calculate 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
Funds' administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Funds
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.
Debt
securities
generally
trade
in
the
OTC
market
rather
than
on
a
securities
exchange.
The
Funds'
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
The
Funds
have
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the
Funds
primarily
employ
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
55
franklintempleton.com
Annual
Report
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
Funds'
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
Funds'
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
Funds'
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
October
31,
2020,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
inputs
within
the
fair
value
hierarchy.
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
Funds'
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Funds'
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
Funds
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
Funds
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
Funds
do
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
Statements
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 each
Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. Each
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
Funds
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
the
Funds
invest.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Funds
invest.
When
a
capital
gain
tax
is
determined
to
apply,
certain
or
all
Funds
record
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,
certain
or
all
Funds
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims).
These
additional
filings
are
subject
to
various
administrative
proceedings
by
the
local
jurisdictions’
tax
authorities
within
the
European
Union,
as
well
as
a
number
of
related
judicial
proceedings.
Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
56
franklintempleton.com
Annual
Report
other
income
in
the
Statements of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statements
of
Assets
and
Liabilities.
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
Funds,
if
any,
reduce
the
amounts
of
foreign
taxes
Fund
shareholders
can
use
as
tax
credits
in
their
individual
income
tax
returns.
Each
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
October
31,
2020, each
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.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
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
Funds.
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
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
Funds,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Income
and
Deferred
Taxes
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
57
franklintempleton.com
Annual
Report
2.
Shares
of
Beneficial
Interest
At
October
31,
2020,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Funds'
shares
were
as
follows:
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Shares
Amount
Shares
Amount
Class
A
Class
A
Shares:
Year
ended
October
31,
2020
Shares
sold
a
...................................
428,347
$9,501,219
2,819,939
$79,041,978
Shares
issued
in
reinvestment
of
distributions
..........
830,982
21,572,312
1,561,575
52,656,311
Shares
redeemed
...............................
(1,916,035)
(43,313,223)
(6,123,604)
(174,288,669)
Net
increase
(decrease)
..........................
(656,706)
$(12,239,692)
(1,742,090)
$(42,590,380)
Year
ended
October
31,
2019
Shares
sold
a
...................................
199,866
$5,669,153
2,456,235
$81,453,635
Shares
issued
in
reinvestment
of
distributions
..........
366,598
9,861,501
3,113,138
94,452,616
Shares
redeemed
...............................
(1,533,936)
(42,999,423)
(4,686,315)
(155,698,016)
Net
increase
(decrease)
..........................
(967,472)
$(27,468,769)
883,058
$20,208,235
Class
C
Class
C
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
—
$—
96,058
$2,582,107
Shares
issued
in
reinvestment
of
distributions
..........
—
—
59,874
1,930,328
Shares
redeemed
a
..............................
—
—
(382,275)
(10,121,708)
Net
increase
(decrease)
..........................
—
$—
(226,343)
$(5,609,273)
Year
ended
October
31,
2019
Shares
sold
...................................
—
$—
133,716
$4,182,307
Shares
issued
in
reinvestment
of
distributions
..........
—
—
139,445
4,057,855
Shares
redeemed
a
..............................
—
—
(377,860)
(12,097,210)
Net
increase
(decrease)
..........................
—
$—
(104,699)
$(3,857,048)
Class
R
Class
R
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
—
$—
22,465
$639,551
Shares
issued
in
reinvestment
of
distributions
..........
—
—
14,301
484,796
Shares
redeemed
...............................
—
—
(70,324)
(2,114,644)
Net
increase
(decrease)
..........................
—
$—
(33,558)
$(990,297)
Year
ended
October
31,
2019
Shares
sold
...................................
—
$—
38,248
$1,294,081
Shares
issued
in
reinvestment
of
distributions
..........
—
—
31,068
947,271
Shares
redeemed
...............................
—
—
(66,057)
(2,139,467)
Net
increase
(decrease)
..........................
—
$—
3,259
$101,885
Class
R6
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
58
franklintempleton.com
Annual
Report
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Shares
Amount
Shares
Amount
Class
R6
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
283,278
$6,707,316
249,050
$7,046,896
Shares
issued
in
reinvestment
of
distributions
..........
14,928
393,344
79,333
2,776,662
Shares
redeemed
...............................
(390,000)
(8,474,325)
(368,427)
(10,849,980)
Net
increase
(decrease)
..........................
(91,794)
$(1,373,665)
(40,044)
$(1,026,422)
Year
ended
October
31,
2019
Shares
sold
...................................
122,240
$3,463,495
217,691
$7,414,167
Shares
issued
in
reinvestment
of
distributions
..........
7,071
192,673
150,326
4,720,226
Shares
redeemed
...............................
(153,068)
(4,379,041)
(288,252)
(9,962,021)
Net
increase
(decrease)
..........................
(23,757)
$(722,873)
79,765
$2,172,372
Advisor
Class
Advisor
Class
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
386,269
$8,110,912
322,101
$9,451,208
Shares
issued
in
reinvestment
of
distributions
..........
148,499
3,890,674
99,129
3,481,418
Shares
redeemed
...............................
(518,374)
(12,310,162)
(556,465)
(16,428,765)
Net
increase
(decrease)
..........................
16,394
$(308,576)
(135,235)
$(3,496,139)
Year
ended
October
31,
2019
Shares
sold
...................................
153,813
$4,352,666
237,124
$8,238,997
Shares
issued
in
reinvestment
of
distributions
..........
98,529
2,671,125
188,703
5,946,008
Shares
redeemed
...............................
(954,794)
(27,030,141)
(347,114)
(11,996,546)
Net
increase
(decrease)
..........................
(702,452)
$(20,006,350)
78,713
$2,188,459
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
59
franklintempleton.com
Annual
Report
Franklin
Small
Cap
Value
Fund
Shares
Amount
Class
A
Class
A
Shares:
Year
ended
October
31,
2020
Shares
sold
a
...................................
6,402,049
$258,927,519
Shares
issued
in
reinvestment
of
distributions
..........
1,479,423
71,322,933
Shares
redeemed
...............................
(8,004,098)
(329,059,604)
Net
increase
(decrease)
..........................
(122,626)
$1,190,848
Year
ended
October
31,
2019
Shares
sold
a
...................................
4,761,258
$216,540,419
Shares
issued
in
reinvestment
of
distributions
..........
4,014,584
166,645,403
Shares
redeemed
...............................
(7,800,346)
(360,204,846)
Net
increase
(decrease)
..........................
975,496
$22,980,976
Class
C
Class
C
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
494,796
$17,484,715
Shares
issued
in
reinvestment
of
distributions
..........
161,132
6,706,295
Shares
redeemed
a
..............................
(1,099,019)
(38,887,878)
Net
increase
(decrease)
..........................
(443,091)
$(14,696,868)
Year
ended
October
31,
2019
Shares
sold
...................................
379,552
$15,084,656
Shares
issued
in
reinvestment
of
distributions
..........
545,732
19,744,598
Shares
redeemed
a
..............................
(1,294,499)
(51,914,455)
Net
increase
(decrease)
..........................
(369,215)
$(17,085,201)
Class
R
Class
R
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
620,441
$24,909,293
Shares
issued
in
reinvestment
of
distributions
..........
174,103
8,306,474
Shares
redeemed
...............................
(1,162,316)
(47,932,527)
Net
increase
(decrease)
..........................
(367,772)
$(14,716,760)
Year
ended
October
31,
2019
Shares
sold
...................................
478,896
$21,682,882
Shares
issued
in
reinvestment
of
distributions
..........
518,689
21,312,926
Shares
redeemed
...............................
(1,111,892)
(51,148,972)
Net
increase
(decrease)
..........................
(114,307)
$(8,153,164)
Class
R6
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
60
franklintempleton.com
Annual
Report
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
Franklin
MicroCap
Value
Fund pays
an
investment
management
fee
to Franklin
Mutual of
0.75%
per
year
of
the
average
daily
net
assets
of
the
Fund.
Franklin
Small
Cap
Value
Fund
Shares
Amount
Class
R6
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
7,493,033
$317,962,776
Shares
issued
in
reinvestment
of
distributions
..........
404,768
20,618,886
Shares
redeemed
...............................
(3,313,426)
(144,457,723)
Net
increase
(decrease)
..........................
4,584,375
$194,123,939
Year
ended
October
31,
2019
Shares
sold
...................................
2,794,831
$136,033,244
Shares
issued
in
reinvestment
of
distributions
..........
762,923
33,339,721
Shares
redeemed
...............................
(1,529,314)
(74,401,946)
Net
increase
(decrease)
..........................
2,028,440
$94,971,019
Advisor
Class
Advisor
Class
Shares:
Year
ended
October
31,
2020
Shares
sold
...................................
8,573,228
$364,499,694
Shares
issued
in
reinvestment
of
distributions
..........
492,792
25,181,684
Shares
redeemed
...............................
(4,498,423)
(193,603,322)
Net
increase
(decrease)
..........................
4,567,597
$196,078,056
Year
ended
October
31,
2019
Shares
sold
...................................
2,698,938
$130,964,534
Shares
issued
in
reinvestment
of
distributions
..........
1,544,286
67,686,043
Shares
redeemed
...............................
(4,139,054)
(199,851,004)
Net
increase
(decrease)
..........................
104,170
$(1,200,427)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Mutual
Advisers,
LLC
(Franklin
Mutual)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Templeton
Distributors,
Inc.
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
61
franklintempleton.com
Annual
Report
Franklin
Mutual
U.S.
Value
Fund
pays
an
investment
management
fee
to
Franklin
Mutual
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
Franklin
Small
Cap
Value
Fund
pays
an
investment
management
fee
to
Franklin
Mutual
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
year
ended
October
31,
2020,
each
Fund's
gross
effective
investment
management
fee
rate
based
on
average
daily
net
assets
was
as
follows:
b.
Administrative
Fees
Under
an
agreement
with
Franklin
Mutual,
FT
Services
provides
administrative
services
to
the
Funds.
The
fee
is
paid
by
Franklin
Mutual
based
on
each
of
the
Funds'
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Funds.
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
Funds’
Class
A
reimbursement
distribution
plans,
the
Funds
reimburse
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of each
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plans,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Funds’
Class
C
and
R
compensation
distribution
plans,
the
Funds
pay
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
each
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
for
each
Fund.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
Annualized
Fee
Rate
Net
Assets
0.625%
Up
to
and
including
$100
million
0.500%
Over
$100
million,
up
to
and
including
$250
million
0.450%
Over
$250
million,
up
to
and
including
$7.5
billion
0.440%
Over
$7.5
billion,
up
to
and
including
$10
billion
0.430%
Over
$10
billion,
up
to
and
including
$12.5
billion
0.420%
Over
$12.5
billion,
up
to
and
including
$15
billion
0.400%
In
excess
of
$15
billion
Annualized
Fee
Rate
Net
Assets
0.750%
Up
to
and
including
$500
million
0.625%
Over
$500
million,
up
to
and
including
$1
billion
0.500%
Over
$1
billion,
up
to
and
including
$5
billion
0.490%
In
excess
of
$5
billion
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Gross
effective
investment
management
fee
rate
........
0.750%
0.486%
0.582%
3.
Transactions
with
Affiliates
(continued)
a.
Management
Fees
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
62
franklintempleton.com
Annual
Report
For
Franklin
Small
Cap
Value
Fund,
the
Board
has
set
the
current
rate
at
0.25%
per
year
for
Class
A
shares
until
further
notice
and
approval
by
the
Board.
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Funds.
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
Funds
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Funds'
shares
for
the
year:
e.
Transfer
Agent
Fees
Each
class
of
shares
pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class
reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
year
ended
October
31,
2020,
the
Funds
paid
transfer
agent
fees
as
noted
in
the
Statements
of
Operations
of
which
the
following
amounts
were
retained
by
Investor
Services:
f.
Investments
in
Affiliated
Management
Investment
Companies
Certain
or
all
Funds
invest
in
one
or
more
affiliated
management
investment
companies
for
purposes
other
than
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Funds
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statements
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
year
ended
October
31,
2020,
investments
in
affiliated
management
investment
companies
were
as
follows:
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Reimbursement
Plans:
Class
A
...............................
0.25%
0.25%
0.35%
Compensation
Plans:
Class
C
...............................
—
1.00%
1.00%
Class
R
...............................
—
0.50%
0.50%
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..................
$5,606
$48,122
$114,899
CDSC
retained
...........................
$51
$1,860
$22,727
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Transfer
agent
fees
........................
$76,715
$425,196
$1,737,284
3.
Transactions
with
Affiliates
(continued)
c.
Distribution
Fees
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
63
franklintempleton.com
Annual
Report
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
February
28,
2021.
Prior
to
March
1,
2020,
the
Class
R6
transfer
agent
fees
for
Franklin
MicroCap
Value
Fund
and
Franklin
Small
Cap
Value
Fund
were
limited
to
0.02%.
4.
Expense
Offset
Arrangement
The
Funds
have entered
into
an
arrangement
with
their
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Funds'
custodian
expenses. During
the year
ended
October
31,
2020, the
custodian
fees
were
reduced
as
noted
in
the
Statements
of
Operations.
a
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a
a
a
a
a
a
a
a
a
Franklin
MicroCap
Value
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.........
$
7,075,299
$
38,317,684
$
(42,671,144)
$
—
$
—
$
2,721,839
2,721,839
$
2
9,
8
7
6
Total
Affiliated
Securities
....
$7,075,299
$38,317,684
$(42,671,144)
$—
$—
$2,721,839
$29,876
Franklin
Mutual
U.S.
Value
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.........
85,446,583
178,082,339
(242,090,407)
—
—
21,438,515
21,438,515
378,772
Total
Affiliated
Securities
....
$85,446,583
$178,082,339
$(242,090,407)
$—
$—
$21,438,515
$378,772
Franklin
Small
Cap
Value
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.........
$
59,956,984
$
571,329,542
$
(563,793,943)
$
—
$
—
$
67,492,583
67,492,583
$
319,694
Total
Affiliated
Securities
....
$59,956,984
$571,329,542
$(563,793,943)
$—
$—
$67,492,583
$319,694
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
64
franklintempleton.com
Annual
Report
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
October
31,
2020,
the
capital
loss
carryforwards
were
as
follows:
The
tax
character
of
distributions
paid
during
the
years
ended
October
31,
2020
and
2019,
was
as
follows:
At
October
31,
2020,
the
cost
of
investments,
net
unrealized
appreciation
(depreciation),
undistributed
ordinary
income
and
undistributed
long
term
capital
gains
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
defaulted
securities
and
wash
sales.
Franklin
MicroCap
Value
Fund
and
Franklin
Small
Cap
Value
Fund
utilized
a
tax
accounting
practice
to
treat
a
portion
of
the
proceeds
from
capital
shares
redeemed
as
a
distribution
from
net
investment
income
and
realized
capital
gains.
Franklin
Mutual
U.S.
Value
Fund
1
1
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
.............................
$
33,039,100
Long
term
.............................
18,056,763
Total
capital
loss
carryforwards
............
$51,095,863
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
2020
2019
2020
2019
Distributions
paid
from:
Ordinary
income
........................
$775,806
$904,179
$12,937,860
$14,688,247
Long
term
capital
gain
....................
29,108,292
13,294,719
51,879,499
101,713,681
$29,884,098
$14,198,898
$64,817,359
$116,401,928
Franklin
Small
Cap
Value
Fund
2020
2019
Distributions
paid
from:
Ordinary
income
........................
$30,344,654
$52,977,100
Long
term
capital
gain
....................
123,198,324
298,039,145
$153,542,978
$351,016,245
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
a
a
a
a
Cost
of
investments
.......................
$92,724,188
$577,044,188
$2,431,312,024
Unrealized
appreciation
.....................
$47,775,245
$93,788,475
$246,782,822
Unrealized
depreciation
.....................
(11,598,796)
(51,387,501)
(222,732,997)
Net
unrealized
appreciation
(depreciation)
.......
$36,176,449
$42,400,974
$24,049,825
Distributable
earnings:
Undistributed
ordinary
income
................
$743,474
$24,950,507
$53,475,345
Undistributed
long
term
capital
gains
...........
7,754,530
—
6,179,976
Total
distributable
earnings
..................
$8,498,004
$24,950,507
$59,655,321
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
65
franklintempleton.com
Annual
Report
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
year
ended
October
31,
2020,
were
as
follows:
7.
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
Funds, their ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and their ability
to
achieve their investment
objectives.
8.
Holdings
of
5%
Voting
Securities
of
Portfolio
Companies
The
1940
Act
defines
"affiliated
companies"
to
include
investments
in
portfolio
companies
in
which
a
fund
owns
5%
or
more
of
the
outstanding
voting
securities.
During
the
year
ended
October
31,
2020,
investments
in
“affiliated
companies”
were
as
follows:
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Purchases
..............................
$43,929,217
$373,130,975
$1,712,476,961
Sales
..................................
$82,663,070
$391,701,504
$1,495,644,076
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
Franklin
MicroCap
Value
Fund
Non-Controlled
Affiliates
Dividends
Full
House
Resorts,
Inc.
....
$
4,249,282
$
—
$
(2,177,928)
$
115,894
$
—
a
$
—
a
—
a
$
—
Origen
Financial,
Inc.
......
171,000
—
(229,900)
b
229,900
(171,000)
—
c
—
—
Total
Affiliated
Securities
(Value
is
—%
of
Net
Assets)
$4,420,282
$—
$(2,407,828)
345,794
(171,000)
$—
$—
Franklin
Small
Cap
Value
Fund
Non-Controlled
Affiliates
Dividends
First
of
Long
Island
Corp.
(The)
$
28,845,405
$
—
$
—
$
—
$
(9,857,155)
$
18,988,250
1,230,606
$
898,342
Greenbrier
Cos.,
Inc.
(The)
..
12,899,902
47,049,649
(6,520,124)
(7,912,991)
2,632,26
1
48,148,697
1,784,607
712,149
Wabash
National
Corp
.
.....
—
31,225,916
—
—
8,456,299
39,682,215
2,782,764
308,28
2
Total
Affiliated
Securities
(Value
is
4.3%
of
Net
Assets)
$41,745,307
$78,275,565
$(6,520,124)
$
(7,912,991)
$
1,231,40
5
$106,819,162
$1,918,773
a
As
of
October
31,
2020,
no
longer
an
affiliate.
b
May
include
accretion,
amortization,
partnership
adjustments,
and/or
corporate
actions.
c
As
of
October
31,
2020,
no
longer
held
by
the
fund.
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
66
franklintempleton.com
Annual
Report
9.
Credit
Facility
The
Funds,
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
billion
(Global
Credit
Facility)
which
matures
on
February
5,
2021.
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
Funds
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Funds
and
other
costs
incurred
by
the
Funds,
pay
their
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
their
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
Statements
of
Operations.
During
the
year
ended
October
31,
2020,
the Funds
did
not
use
the
Global
Credit
Facility.
10.
Fair
Value
Measurements
The Funds
follow
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Funds'
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the Funds' 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 Funds'
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
October
31,
2020,
in
valuing
the
Funds’
assets
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Franklin
MicroCap
Value
Fund
Assets:
Investments
in
Securities:
a
Common
Stocks
........................
$
126,178,798
$
—
$
—
$
126,178,798
Short
Term
Investments
...................
2,721,839
—
—
2,721,839
Total
Investments
in
Securities
...........
$128,900,637
$—
$—
$128,900,637
Franklin
Mutual
U.S.
Value
Fund
Assets:
Investments
in
Securities:
a
Common
Stocks
........................
592,141,476
—
—
592,141,476
Corporate
Bonds
........................
—
5,865,171
—
5,865,171
Short
Term
Investments
...................
21,438,515
—
—
21,438,515
Total
Investments
in
Securities
...........
$613,579,991
$5,865,171
$—
$619,445,162
Franklin
Small
Cap
Value
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Aerospace
&
Defense
...................
—
4,761,019
—
4,761,019
Auto
Components
......................
2,076,960
—
—
2,076,960
Automobiles
..........................
55,373,596
—
—
55,373,596
Banks
...............................
338,435,489
—
—
338,435,489
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
67
franklintempleton.com
Annual
Report
11.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
The
amendments
in
the
ASU
provides
optional
temporary
financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021.
The
ASU
is
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022. Management
has
reviewed
the
requirements
and
believes
the
adoption
of
this
ASU
will
not
have
a
material
impact
on
the
financial
statements.
Level
1
Level
2
Level
3
Total
Franklin
Small
Cap
Value
Fund
(continued)
Assets:
Investments
in
Securities:
Common
Stocks:
Building
Products
......................
$
99,215,947
$
—
$
—
$
99,215,947
Capital
Markets
........................
25,245,340
—
—
25,245,340
Chemicals
...........................
185,158,026
—
—
185,158,026
Commercial
Services
&
Supplies
...........
34,616,737
—
—
34,616,737
Communications
Equipment
..............
30,962,566
—
—
30,962,566
Construction
&
Engineering
...............
24,358,061
—
—
24,358,061
Construction
Materials
..................
12,259,717
—
—
12,259,717
Electric
Utilities
........................
42,246,645
—
—
42,246,645
Electrical
Equipment
....................
31,367,642
—
—
31,367,642
Electronic
Equipment,
Instruments
&
Components
........................
43,975,752
—
—
43,975,752
Energy
Equipment
&
Services
.............
10,629,383
—
—
10,629,383
Equity
Real
Estate
Investment
Trusts
(REITs)
.
61,227,702
—
—
61,227,702
Food
&
Staples
Retailing
.................
11,778,655
—
—
11,778,655
Food
Products
........................
2,080,693
42,898,216
—
44,978,909
Gas
Utilities
..........................
2,838,874
—
—
2,838,874
Health
Care
Equipment
&
Supplies
.........
72,090,707
—
—
72,090,707
Hotels,
Restaurants
&
Leisure
.............
66,159,848
6,404,704
—
72,564,552
Household
Durables
....................
15,557,784
—
—
15,557,784
Insurance
............................
318,917,931
—
—
318,917,931
Leisure
Products
.......................
46,345,881
—
—
46,345,881
Machinery
............................
450,212,617
—
—
450,212,617
Metals
&
Mining
.......................
37,360,682
—
—
37,360,682
Multi-Utilities
..........................
49,583,619
—
—
49,583,619
Oil,
Gas
&
Consumable
Fuels
.............
21,329,195
—
—
21,329,195
Paper
&
Forest
Products
.................
34,825,267
—
—
34,825,267
Professional
Services
...................
23,247,609
—
—
23,247,609
Road
&
Rail
..........................
7,834,465
—
—
7,834,465
Semiconductors
&
Semiconductor
Equipment
.
4,874,464
—
—
4,874,464
Software
.............................
15,865,505
—
—
15,865,505
Specialty
Retail
........................
91,765,539
—
—
91,765,539
Textiles,
Apparel
&
Luxury
Goods
..........
50,339,152
—
—
50,339,152
Thrifts
&
Mortgage
Finance
...............
9,008,503
—
—
9,008,503
Corporate
Bonds
........................
—
4,638,774
—
4,638,774
Short
Term
Investments
...................
67,492,583
—
—
67,492,583
Total
Investments
in
Securities
...........
$2,396,659,136
$58,702,713
$—
$2,455,361,849
a
For
detailed
categories,
see
the
accompanying
Statement
of
Investments.
10.
Fair
Value
Measurements
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
68
franklintempleton.com
Annual
Report
12.
Subsequent
Events
The
Funds
have
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
Selected
Portfolio
ADR
American
Depositary
Receipt
10.
Fair
Value
Measurements
(continued)
Franklin
Value
Investors
Trust
Report
of
Independent
Registered
Public
Accounting
Firm
69
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Franklin
Value
Investors
Trust
and
Shareholders
of
Franklin
MicroCap
Value
Fund,
Franklin
Mutual
U.S.
Value
Fund,
and
Franklin
Small
Cap
Value
Fund:
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statements
of
assets
and
liabilities
of
Franklin
Value
Investors
Trust
(the
“Trust”)
(comprising
Franklin
MicroCap
Value
Fund,
Franklin
Mutual
U.S.
Value
Fund
(formerly,
Franklin
Balance
Sheet
Investment
Fund),
and
Franklin
Small
Cap
Value
Fund
(collectively
referred
to
as
the
“Funds”),
including
the
statements
of
investments,
as
of
October
31,
2020,
and
the
related
statements
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
then
ended,
and
the
financial
highlights
for
each
of
the
three
years
in
the
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
each
of
the
Funds
comprising
Franklin
Value
Investors
Trust
at
October
31,
2020,
the
results
of
its
operations
for
the
year
then
ended,
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
then
ended,
and
its
financial
highlights
for
each
of
the
three
years
in
the
period
then
ended,
in
conformity
with
U.S.
generally
accepted
accounting
principles.
The
financial
highlights
for
each
of
the
two
years
in
the
period
then
ended
October
31,
2017
for
each
of
the
Funds
were
audited
by
another
auditor,
who
expressed
an
unqualified
opinion
in
their
report,
dated
December
18,
2017.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Funds’
management.
Our
responsibility
is
to
express
an
opinion
on
the
Funds’
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
("PCAOB")
and
are
required
to
be
independent
with
respect
to
the
Funds
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Funds
are
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
the
Funds’
internal
control
over
financial
reporting.
As
part
of
our
audits,
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting,
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Funds’
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation of
securities
owned
as
of
October
31,
2020,
by
correspondence
with
the
custodian
and
brokers,
or
by
other
appropriate
auditing
procedures
where
replies
from
brokers
were
not
received.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
We
have
served
as
the
auditor
of
one
or
more
Franklin
investment
companies
since
1987.
Massachusetts
December
18,
2020
Franklin
Value
Investors
Trust
Tax
Information
(unaudited)
70
franklintempleton.com
Annual
Report
Under
Section
852(b)(3)(C)
of
the
Internal
Revenue
Code,
the
Funds
hereby
report
the
maximum
amount
allowable
but
no
less
than
the
following
amounts
as
long
term
capital
gain
dividends
for
the
fiscal
year
ended
October
31,
2020:
Under
Section
871(k)(2)(C)
of
the
Internal
Revenue
Code,
the
Funds
hereby
report
the
maximum
amount
allowable
but
no
less
than
the
following
amounts
as
short
term
capital
gain
dividends
for
purposes
of
the
tax
imposed
under
Section
871(a)(1)
(A)
of
the
Internal
Revenue
Code
for
the
fiscal
year
ended
October
31,
2020:
Under
Section
854(b)(1)(A)
of
the
Internal
Revenue
Code,
the
Funds
hereby
report
the
following
percentage
amounts
of
the
ordinary
income
dividends
as
income
qualifying
for
the
dividends
received
deduction
for
the
fiscal
year
ended
October
31,
2020:
Under
Section
854(b)(1)(B)
of
the
Internal
Revenue
Code,
the
Funds
hereby
report
the
maximum
amount
allowable
but
no
less
than
the
following
amounts
as
qualified
dividends
for
purposes
of
the
maximum
rate
under
Section
1(h)(11)
of
the
Internal
Revenue
Code
for
the
fiscal
year
ended
October
31,
2020:
Distributions,
including
qualified
dividend
income,
paid
during
calendar
year
2020
will
be
reported
to
on
Form
1099-DIV
by
mid-February
2021.
Shareholders
are
advised
to
check
with
their
tax
advisors
for
information
on
the
treatment
of
these
amounts
on
their
individual
income
tax
returns.
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
$30,095,347
$51,879,499
$123,980,817
Franklin
MicroCap
Value
Fund
Franklin
Small
Cap
Value
Fund
$269,332
$4,204,979
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
100.00%
100.00%
100.00%
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
$2,109,045
$32,299,065
$43,228,002
Franklin
Value
Investors
Trust
Board
Members
and
Officers
71
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edward
I.
Altman,
Ph.D.
(1941)
Trustee
Since
2015
11
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Max
L.
Heine
Professor
of
Finance,
Emeritus
and
Director
of
The
Credit
and
Debt
Markets
Research
Program,
Salomon
Center,
Stern
School
of
Business,
New
York
University;
editor
and
author
of
numerous
financial
publications;
financial
consultant;
an
adviser
to
numerous
financial
and
publishing
organizations;
and
formerly
,
Vice
Director,
Salomon
Center,
Stern
School
of
Business,
New
York
University.
Ann
Torre
Bates
(1958)
Chairperson
and
Trustee
Chairperson
since
January
2020
and
Trustee
since
2015
30
Ares
Capital
Corporation
(specialty
finance
company)
(2010-present),
United
Natural
Foods,
Inc.
(distributor
of
natural,
organic
and
specialty
foods)
(2013-present),
formerly
,
Allied
Capital
Corporation
(financial
services)
(2003-
2010),
SLM
Corporation
(Sallie
Mae)
(1997-2014)
and
Navient
Corporation
(loan
management,
servicing
and
asset
recovery)
(2014-2016).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Executive
Vice
President
and
Chief
Financial
Officer,
NHP
Incorporated
(manager
of
multifamily
housing)
(1995-1997);
and
Vice
President
and
Treasurer,
US
Airways,
Inc.
(until
1995).
Burton
J.
Greenwald
(1929)
Trustee
Since
2001
11
Franklin
Templeton
Emerging
Markets
Debt
Opportunities
Fund
PLC
(1999-present)
and
formerly
,
Fiduciary
International
Ireland
Limited
(1999-2015).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Managing
Director,
B.J.
Greenwald
Associates
(management
consultants
to
the
financial
services
industry);
and
formerly
,
Chairman,
Fiduciary
Trust
International
Funds;
Executive
Vice
President,
L.F.
Rothschild
Fund
Management,
Inc.;
President
and
Director,
Merit
Mutual
Funds;
President,
Underwriting
Division
and
Director,
National
Securities
&
Research
Corporation;
Governor,
Investment
Company
Institute;
and
Chairman,
ICI
Public
Information
Committee.
Keith
E.
Mitchell
(1954)
Trustee
Since
2015
11
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
boards
of
asset
management
firms;
and
formerly
,
Managing
Member,
Mitchell,
Hartley
&
Bechtel
Advisers,
LLC
(
formerly
,
Mitchell
Advisers,
LLC)
(advisory
firm)
(2003-2015)
and
Managing
Director,
Putman
Lovell
NBF.
Franklin
Value
Investors
Trust
72
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
David
W.
Niemiec
(1949)
Trustee
Since
2011
30
Hess
Midstream
LP
(oil
and
gas
midstream
infrastructure)
(2017-present).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Advisor,
Saratoga
Partners
(private
equity
fund);
and
formerly
,
Managing
Director,
Saratoga
Partners
(1998-2001)
and
SBC
Warburg
Dillon
Read
(investment
banking)
(1997-1998);
Vice
Chairman,
Dillon,
Read
&
Co.
Inc.
(investment
banking)
(1991-1997);
and
Chief
Financial
Officer,
Dillon,
Read
&
Co.
Inc.
(1982-1997).
Jan
Hopkins
Trachtman
(1947)
Trustee
Since
2015
11
FinTech
Acquisition
Corp.
III
(special
purpose
fintech
acquisition
company)
(2018-present)
and
FTAC
Olympus
Acquisition
Corp.
(special
purpose
fintech
acquisition
company)
(August
2020-present).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
President
and
Founder,
The
Jan
Hopkins
Group
(communications
consulting
firm);
serves
on
Alumni
Advisory
Board
of
Knight
Bagehot
Fellowship;
and
formerly
,
President,
Economic
Club
of
New
York
(2007-2015);
Anchor/Correspondent,
CNN
Financial
News
(until
2003);
Managing
Director
and
Head
of
Client
Communications,
Citigroup
Private
Bank
(until
2005);
Off-Air
Reporter,
ABC
News'
World
News
Tonight;
and
Editor,
CBS
Network
News.
Robert
E.
Wade
(1946)
Trustee
Since
2004
30
El
Oro
Ltd
(investments)
(2003-
2019).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Attorney
at
law
engaged
in
private
practice
as
a
sole
practitioner
(1972-2008)
and
member
of
various
boards.
Gregory
H.
Williams
(1943)
Trustee
Since
2008
11
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Private
investor;
Consultant;
and
formerly
,
President,
University
of
Cincinnati
(2009-2012);
President,
The
City
College
of
New
York
(2001-
2009);
Dean,
College
of
Law,
Ohio
State
University
(1993-2001);
and
Associate
Vice
President,
Academic
Affairs
and
Professor
of
Law,
University
of
Iowa
(1977-1993).
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2015
137
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
39
of
the
investment
companies
in
Franklin
Templeton;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015),
Franklin
Resources,
Inc.
Independent
Board
Members
(continued)
Franklin
Value
Investors
Trust
73
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Jennifer
M.
Johnson
(1964)
Trustee
Since
2015
52
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Executive
Officer,
President
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
four
of
the
investment
companies
in
Franklin
Templeton;
and
formerly
,
Chief
Operating
Officer
and
Executive
Vice
President,
Franklin
Resources,
Inc.
(1994-2015);
Executive
Vice
President
of
Operations
and
Technology,
Franklin
Resources,
Inc.
(2005-2010);
and
Senior
Vice
President,
Franklin
Resources,
Inc.
(2003-2005).
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
October
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Advisory
Services,
LLC,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Steven
J.
Gray
(1955)
Secretary
and
Vice
President
Secretary
since
2005
and
Vice
President
since
2009
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Vice
President,
Franklin
Templeton
Distributors,
Inc.
and
FASA,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
41
of
the
investment
companies
in
Franklin
Templeton;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Rupert
H.
Johnson,
Jr.
(1940)
Vice
President
Since
1989
126
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
37
of
the
investment
companies
in
Franklin
Templeton.
Robert
G.
Kubilis
(1973)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
2012
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting
and
officer
of
15
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Franklin
Value
Investors
Trust
74
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Jennifer
M.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
her
position
as
an
officer
of
Resources.
Note
1:
Gregory
E.
Johnson
and
Jennifer
M.
Johnson
are
siblings.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
Note
3:
Effective
October
17,
2020,
Charles
Rubens,
II
ceased
to
be
a
trustee
of
the
Trust.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
U.S.
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
each
of
Ann
Torre
Bates
and
David
W.
Niemiec
as
an
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
qualify
as
such
an
expert
in
view
of
their
extensive
business
background
and
experience.
Ms.
Bates
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2015.
She
currently
serves
as
a
director
of
Ares
Capital
Corporation
(2010-present)
and
United
Natural
Foods,
Inc.
(2013-present)
and
was
formerly
a
director
of
Navient
Corporation
from
2014
to
2016,
SLM
Corporation
from
1997
to
2014
and
Allied
Capital
Corporation
from
2003
to
2010,
Executive
Vice
President
and
Chief
Financial
Officer
of
NHP
Incorporated
from
1995
to
1997
and
Vice
President
and
Treasurer
of
US
Airways,
Inc.
until
1995.
Mr.
Niemiec
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2011,
currently
serves
as
an
Advisor
to
Saratoga
Partners
and
was
formerly
its
Managing
Director
from
1998
to
2001
and
serves
as
a
director
of
Hess
Midstream
Partners
LP
(2017-present).
Mr.
Niemiec
was
formerly
a
director
of
Emeritus
Corporation
from
1999
to
2010
and
OSI
Pharmaceuticals,
Inc.
from
2006
to
2010,
Managing
Director
of
SBC
Warburg
Dillon
Read
from
1997
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Peter
A.
Langerman
(1955)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2017
6
None
c/o
Franklin
Mutual
Advisers,
LLC
101
John
F.
Kennedy
Parkway
Short
Hills,
NJ
07078-2716
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chairman
of
the
Board,
Chief
Executive
Officer
and
Executive
Vice
President,
Franklin
Mutual
Advisers,
LLC;
and
officer
and/or
director,
as
the
case
may
be,
of
three
of
the
investment
companies
in
Franklin
Templeton.
Robert
Lim
(1948)
Vice
President
–
AML
Compliance
Since
2016
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Templeton
Companies,
LLC;
Chief
Compliance
Officer,
Franklin
Templeton
Distributors,
Inc.
and
Franklin
Templeton
Investor
Services,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Associate
General
Counsel
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Craig
S.
Tyle
(1960)
Vice
President
Since
2005
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
General
Counsel
and
Executive
Vice
President,
Franklin
Resources,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Lori
A.
Weber
(1964)
Vice
President
Since
2011
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Franklin
Value
Investors
Trust
75
franklintempleton.com
Annual
Report
to
1998,
and
was
Vice
Chairman
from
1991
to
1997
and
Chief
Financial
Officer
from
1982
to
1997
of
Dillon,
Read
&
Co.
Inc.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
have
each
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Bates
and
Mr.
Niemiec
and
are
independent
Board
members
as
that
term
is
defined
under
the
applicable
U.S.
Securities
and
Exchange
Commission
Rules
and
Releases.
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Interested
Board
Members
and
Officers
(continued)
Franklin
Value
Investors
Trust
Shareholder
Information
76
franklintempleton.com
Annual
Report
Board
Review
of
Investment
Management
Agreements
FRANKLIN
VALUE
INVESTORS
TRUST
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
(each
a
Fund)
The
Board
of
Trustees
(Board),
including
a
majority
of
trustees
that
are
not
“interested
persons”
as
such
term
is
defined
in
section
2(a)(19)
of
the
Investment
Company
Act
of
1940
(hereinafter
referred
to
as
“independent
trustees”),
at
a
meeting
held
on
May
14,
2020,
unanimously
approved
the
renewal
of
the
Fund’s
investment
management
agreement.
Prior
to
a
meeting
of
all
of
the
trustees
for
the
purpose
of
considering
such
renewal,
the
independent
trustees
participated
in
two
other
meetings
held
in
connection
with
the
renewal
process.
Throughout
the
process,
the
independent
trustees
received
assistance
and
advice
from
and
met
separately
with
independent
counsel.
The
independent
trustees
met
with
and
interviewed
officers
of
the
investment
manager
(including
portfolio
managers),
the
transfer
agent
and
shareholder
services
group
and
the
distributor.
In
approving
the
renewal
of
the
investment
management
agreement
for
the
Fund,
the
Board,
including
the
independent
trustees,
determined
that
the
investment
management
fee
structure
was
fair
and
reasonable
and
that
continuance
of
the
agreement
was
in
the
best
interests
of
the
Fund
and
its
shareholders.
In
reaching
their
decision
on
the
investment
management
agreement,
the
trustees
took
into
account
information
furnished
throughout
the
year
at
regular
Board
meetings,
as
well
as
information
specifically
requested
and
furnished
for
the
renewal
process,
which
culminated
in
the
meetings
referred
to
above
for
the
specific
purpose
of
considering
such
agreement.
Information
furnished
throughout
the
year
included,
among
others,
reports
on
the
Fund’s
investment
performance,
expenses,
portfolio
composition,
portfolio
brokerage
execution,
client
commission
arrangements,
derivatives,
securities
lending,
asset
segregation,
portfolio
turnover,
Rule
12b-1
plan,
distribution,
shareholder
servicing,
legal
and
compliance
matters,
pricing
of
securities,
sales
and
redemptions,
and
marketing
support
payments
made
to
financial
intermediaries,
as
well
as
a
third-party
survey
of
transfer
agent
fees
charged
to
funds
within
the
Franklin
Templeton
Investments
(FT)
complex
in
comparison
with
those
charged
to
other
fund
complexes
deemed
comparable.
Also,
related
financial
statements
and
other
information
about
the
scope
and
quality
of
services
provided
by
the
investment
manager
and
its
affiliates
and
enhancements
to
such
services
over
the
past
year
were
provided.
In
addition,
the
trustees
received
periodic
reports
throughout
the
year
and
during
the
renewal
process
relating
to
compliance
with
the
Fund’s
investment
policies
and
restrictions.
During
the
renewal
process,
the
independent
trustees
considered
the
investment
manager’s
methods
of
operation
within
the
Franklin
Templeton
group
and
its
activities
on
behalf
of
other
clients.
The
Board
also
noted
that
it
received
an
annual
report
on
all
payments
made
by
FT
or
the
Fund
to
financial
intermediaries
engaged
in
the
sale
of
Fund
shares,
as
well
as
a
memorandum
relating
to
third-party
servicing
arrangements
in
response
to
a
Guidance
Update
from
the
U.S.
Securities
and
Exchange
Commission
(SEC)
relating
to
mutual
fund
distribution
and
sub-accounting
fees.
The
information
obtained
by
the
trustees
during
the
renewal
process
also
included
a
special
report
prepared
by
Broadridge
Financial
Solutions,
Inc.,
an
independent
third-party
analyst
that
utilizes
data
from
Lipper,
Inc.
(“Lipper”),
comparing
the
Fund’s
investment
performance
and
expenses
with
those
of
other
mutual
funds
deemed
comparable
to
the
Fund
as
selected
by
Lipper
(Broadridge
Section
15(c)
Report).
The
trustees
reviewed
the
Broadridge
Section
15(c)
Report
and
its
usefulness
in
the
renewal
process
with
respect
to
matters
such
as
comparative
fees,
expenses,
expense
ratios,
performance
and
volatility.
They
concluded
that
the
report
continues
to
be
a
reliable
resource
in
the
performance
of
their
duties.
In
addition,
the
trustees
received
a
Profitability
Study
(Profitability
Study)
prepared
by
management
discussing
the
profitability
to
FT
from
its
overall
U.S.
fund
operations,
as
well
as
on
an
individual
fund-by-fund
basis.
Over
the
past
year,
the
Board
and
counsel
to
the
independent
trustees
continued
to
receive
reports
on
management’s
handling
of
recent
regulatory
inquiries
and
pending
legal
actions
against
the
investment
manager
and
its
affiliates.
The
independent
trustees
were
satisfied
with
the
actions
taken
to
date
by
management
in
response
to
such
regulatory
and
legal
matters.
The
trustees
reviewed
the
personnel,
operations,
financial
condition,
and
investment
management
capabilities,
methodologies
and
resources
of
the
investment
manager.
As
part
of
this
review,
particular
attention
was
given
to
management’s
diligent
risk
management
program,
including
continual
monitoring
and
management
of
cybersecurity,
liquidity
and
counterparty
credit
risk,
and
attention
given
to
Franklin
Value
Investors
Trust
Shareholder
Information
77
franklintempleton.com
Annual
Report
derivatives
and
other
complex
instruments
that
are
held
and
expected
to
be
held
by
the
Fund
and
how
such
instruments
are
used
to
carry
out
the
Fund’s
investment
goal(s).
The
Board
also
took
into
account,
among
other
things,
management’s
efforts
in
establishing
a
global
credit
facility
for
the
benefit
of
the
Fund
and
other
accounts
managed
by
FT
to
provide
a
source
of
cash
for
temporary
and
emergency
purposes
or
to
meet
unusual
redemption
requests
as
well
as
the
strong
financial
position
of
the
investment
manager’s
parent
company
and
its
commitment
to
the
mutual
fund
business.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
and
liquidity
risk
management.
The
Board
also
recognized
management’s
commitment
to
facilitating
Board
oversight
of
particular
areas,
including
derivatives
and
payments
to
intermediaries,
by
enhanced
reporting.
In
addition
to
the
above
and
other
matters
considered
by
the
trustees
throughout
the
course
of
the
year,
the
following
discussion
relates
to
certain
primary
factors
relevant
to
the
Board’s
decision.
This
discussion
of
the
information
and
factors
considered
by
the
Board
(including
the
information
and
factors
discussed
above)
is
not
intended
to
be
exhaustive,
but
rather
summarizes
certain
factors
considered
by
the
Board.
In
view
of
the
wide
variety
of
factors
considered,
the
Board
did
not,
unless
otherwise
noted,
find
it
practicable
to
quantify
or
otherwise
assign
relative
weights
to
the
foregoing
factors.
In
addition,
individual
trustees
may
have
assigned
different
weights
to
various
factors.
Nature,
Extent
and
Quality
of
Services
The
trustees
reviewed
the
nature,
extent
and
quality
of
the
services
provided,
and
to
be
provided,
by
the
investment
manager.
The
trustees
cited
the
investment
manager’s
ability
to
implement
the
Fund’s
disciplined
value
investment
approach
and
its
long-term
relationship
with
the
Fund
as
reasons
that
shareholders
choose
to
invest,
and
remain
invested,
in
the
Fund.
The
trustees
reviewed
the
Fund’s
portfolio
management
team,
including
its
performance,
staffing,
skills
and
compensation
program.
With
respect
to
portfolio
manager
compensation,
management
assured
the
trustees
that
the
Fund’s
long-term
performance
is
a
significant
component
of
incentive-based
compensation
and
noted
that
a
portion
of
a
portfolio
manager’s
incentive-
compensation
is
paid
in
shares
of
pre-
designated
funds
from
the
portfolio
manager’s
fund
management
area.
The
trustees
noted
that
the
portfolio
manager
compensation
program
aligned
the
interests
of
the
portfolio
managers
with
that
of
shareholders
of
the
Fund.
The
trustees
discussed
with
management
various
other
products,
portfolios
and
entities
that
are
advised
by
the
investment
manager
and
the
allocation
of
assets
and
expenses
among
and
within
them,
as
well
as
their
relative
fees
and
reasons
for
differences
with
respect
thereto
and
any
potential
conflicts.
During
regular
Board
meetings
and
the
aforementioned
meetings
of
the
independent
trustees,
the
trustees
received
reports
and
presentations
on
the
investment
manager’s
best
execution
trading
policies.
The
trustees
considered
periodic
reports
provided
to
them
showing
that
the
investment
manager
complied
with
the
investment
policies
and
restrictions
of
the
Fund
as
well
as
other
reports
periodically
furnished
to
the
Board
covering
matters
such
as
the
compliance
of
portfolio
managers
and
other
management
personnel
with
the
code
of
ethics
covering
the
investment
management
personnel,
the
adherence
to
fair
value
pricing
procedures
established
by
the
Board
and
the
accuracy
of
net
asset
value
calculations.
The
Board
noted
the
extent
of
the
benefits
provided
to
Fund
shareholders
from
being
part
of
the
Franklin
Templeton
group
of
funds,
including
the
right
to
exchange
investments
between
funds
(same
class)
without
a
sales
charge,
the
ability
to
reinvest
Fund
dividends
into
other
funds
and
the
right
to
combine
holdings
of
other
funds
to
obtain
reduced
sales
charges.
The
Board
considered
the
investment
manager’s
significant
efforts
in
developing
and
implementing
compliance
procedures
established
in
accordance
with
SEC
and
other
requirements.
The
Board
considered
the
nature,
extent
and
quality
of
the
services
to
be
provided
under
the
Fund’s
other
service
agreements
to
determine
that,
on
an
overall
basis,
Fund
shareholders
were
well
served.
In
this
connection,
the
Board
also
took
into
account
transfer
agent
and
shareholder
services
provided
to
Fund
shareholders
by
an
affiliate
of
the
investment
manager,
noting
continuing
expenditures
by
management
to
increase
and
improve
the
scope
of
such
services
and
favorable
periodic
reports
on
shareholder
services
conducted
by
independent
third
parties.
While
such
considerations
directly
affected
the
trustees’
decision
in
renewing
the
Fund’s
transfer
agent
and
shareholder
services
agreement,
the
Board
also
considered
these
commitments
as
incidental
benefits
to
Fund
shareholders
deriving
from
the
investment
management
relationship.
Based
on
their
review,
the
trustees
were
satisfied
with
the
nature
and
quality
of
the
overall
services
provided,
and
to
be
provided,
by
the
investment
manager
and
its
affiliates
to
the
Fund
and
its
shareholders
and
were
confident
in
the
abilities
of
the
management
team
to
continue
the
disciplined
value
investment
approach
of
the
Fund
and
to
provide
quality
services
to
the
Fund
and
its
shareholders.
Franklin
Value
Investors
Trust
Shareholder
Information
78
franklintempleton.com
Annual
Report
Investment
Performance
The
trustees
reviewed
and
placed
significant
emphasis
on
the
investment
performance
of
the
Fund
over
the
one-,
three-,
five-
and
10-year
periods
ended
December
31,
2019.
They
considered
the
history
of
performance
of
the
Fund
relative
to
various
benchmarks.
As
part
of
their
review,
they
inquired
of
management
regarding
benchmarks,
style
drift
and
restrictions
on
permitted
investments.
Consideration
was
also
given
to
performance
in
the
context
of
available
levels
of
cash
during
the
periods.
The
trustees
had
meetings
during
the
year,
including
the
meetings
referred
to
above
held
in
connection
with
the
renewal
process,
with
the
Fund’s
portfolio
managers
to
discuss
performance
and
the
management
of
the
Fund.
In
addition
to
the
materials
provided
by
management
in
connection
with
the
renewal
process,
the
independent
trustees
requested
throughout
the
year
(and
received)
additional
presentations
from
the
investment
manager
and
senior
management
of
FT
regarding
the
performance
of
the
investment
manager
and
the
Fund.
As
part
of
these
presentations,
the
investment
manager
and
senior
management
of
FT
reviewed
enhancements
that
have
been
made,
and
are
being
made,
to
the
investment
manager’s
investment
process.
In
addition,
it
was
noted
that
senior
management
of
FT
is
conducting
a
review
of
the
investment
manager
and
the
Fund
and
will
report
the
results
thereof
to
the
independent
trustees
when
completed.
Particular
attention
in
assessing
performance
was
given
to
the
Broadridge
Section
15(c)
Report.
That
report
showed
the
investment
performance
of
the
Fund
(Class
A
shares)
in
comparison
to
other
funds
determined
comparable
by
Lipper.
Franklin
Mutual
U.S.
Value
Fund
–
The
comparable
funds
to
the
Fund,
as
chosen
by
Lipper,
included
all
retail
and
institutional
multi-cap
value
funds.
The
Fund
had
total
returns
in
the
middle
performing
quintile
for
the
one-year
period
ended
December
31,
2019,
and
had
annualized
total
returns
for
the
three-
and
five-year
periods
in
the
second-lowest
performing
quintiles.
The
trustees
noted
that
the
Fund’s
total
return
on
an
annualized
basis
for
the
10-year
period
ended
December
31,
2019
was
in
the
lowest
performing
quintile.
The
trustees
also
compared
Fund
performance
to
other
industry
benchmarks,
including
measures
of
risk-adjusted
performance
of
a
fund,
as
part
of
their
evaluation
of
investment
performance.
The
trustees
discussed
with
management
the
reasons
for
the
relative
underperformance
for
the
three-,
five-
and
10-year
periods
ended
December
31,
2019.
While
disappointed
with
the
relative
underperformance
of
the
Fund,
the
Board
did
not
believe
that
any
changes
with
respect
to
the
Fund
were
warranted
at
the
time,
particularly
as
the
enhancements
to
the
investment
manager’s
investment
process
continue
to
be
implemented
and
as
the
review
being
conducted
by
senior
management
of
FT
is
in
process.
The
Board
noted
that
it
would
continue
to
monitor
future
performance.
Franklin
MicroCap
Value
Fund
–
The
comparable
funds
to
the
Fund,
as
chosen
by
Lipper,
included
all
retail
and
institutional
small-cap
value
funds.
The
Fund
had
total
returns
in
the
lowest
performing
quintile
for
the
one-year
period
ended
December
31,
2019,
and
had
annualized
total
returns
for
the
three-
and
five-year
periods
in
the
second-
lowest
performing
quintile.
The
trustees
noted
that
the
Fund’s
total
return
on
an
annualized
basis
for
the
10-year
period
ended
December
31,
2019
was
in
the
second-
lowest
performing
quintile.
The
trustees
also
compared
Fund
performance
to
other
industry
benchmarks,
including
measures
of
risk-adjusted
performance
of
a
fund,
as
part
of
their
evaluation
of
investment
performance.
The
trustees
discussed
with
management
the
reasons
for
the
relative
underperformance
for
the
one-,
three-,
five-,
and
10-year
periods
ended
December
31,
2019.
While
disappointed
with
the
relative
underperformance
of
the
Fund,
the
Board
did
not
believe
that
any
changes
with
respect
to
the
Fund
were
warranted
at
the
time,
particularly
given
the
recent
appointment
of
a
new
lead
portfolio
manager
in
July,
2019
and
as
the
enhancements
to
the
investment
manager’s
investment
process
continue
to
be
implemented.
The
Board
noted
that
it
would
continue
to
monitor
future
performance
and,
when
available,
would
evaluate
the
results
of
the
review
being
conducted
by
senior
management
of
FT.
Franklin
Small
Cap
Value
Fund
–
The
comparable
funds
to
the
Fund,
as
chosen
by
Lipper,
included
all
retail
and
institutional
small-cap
value
funds.
The
Fund
had
total
returns
in
the
best
performing
quintile
for
the
one-year
period
ended
December
31,
2019,
and
had
annualized
total
returns
for
the
three-
and
five-year
periods
in
the
best
performing
quintiles.
The
trustees
noted
that
the
Fund’s
total
return
on
an
annualized
basis
for
the
10-year
period
ended
December
31,
2019
was
in
the
second-best
performing
quintile.
The
Board
was
satisfied
with
such
comparative
performance.
The
trustees
also
compared
Fund
performance
to
other
industry
benchmarks,
including
measures
of
risk-adjusted
performance
of
a
fund,
as
part
of
their
evaluation
of
investment
performance.
The
trustees
concluded
that
the
Fund
had
continued
to
perform
well
in
comparison
to
its
various
benchmarks
and
in
the
context
of
the
Fund’s
goal.
Franklin
Value
Investors
Trust
Shareholder
Information
79
franklintempleton.com
Annual
Report
Comparative
Expenses
and
Management
Profitability
The
trustees
considered
the
cost
of
the
services
provided
and
to
be
provided
and
the
profits
realized
by
the
investment
manager
and
its
affiliates
from
their
respective
relationships
with
the
Fund.
As
part
of
the
renewal
process,
the
trustees
explored
with
management
the
trends
in
expense
ratios
over
the
past
three
fiscal
years
and
the
reasons
for
any
increases
in
the
Fund’s
expense
ratios
(or
components
thereof).
In
considering
the
appropriateness
of
the
management
fee
and
other
expenses
charged
to
the
Fund,
the
Board
took
into
account
various
factors
including
investment
performance
and
matters
relating
to
Fund
operations,
including,
but
not
limited
to,
the
quality
and
experience
of
its
portfolio
managers
and
research
staff.
Consideration
was
also
given
to
a
comparative
analysis
in
the
Broadridge
Section
15(c)
Report
of
the
investment
management
fee
and
total
expense
ratio
of
the
Fund
in
comparison
with
those
of
a
group
of
other
funds
selected
by
Lipper
as
its
appropriate
Lipper
expense
group.
Lipper
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Lipper
to
be
an
appropriate
measure
of
comparative
expenses.
In
reviewing
comparative
costs,
emphasis
was
given
to
the
Fund’s
contractual
management
fee
in
comparison
with
the
contractual
management
fee
that
would
have
been
charged
by
other
funds
within
its
Lipper
expense
group
assuming
they
were
similar
in
size
to
the
Fund,
as
well
as
the
actual
total
expenses
of
the
Fund
in
comparison
with
those
of
its
Lipper
expense
group.
The
Lipper
contractual
management
fee
analysis
includes
administrative
charges
as
being
part
of
the
management
fee,
and
total
expenses,
for
comparative
consistency,
are
shown
by
Lipper
for
Fund
Class
A
shares.
Franklin
Mutual
U.S.
Value
Fund
–
The
Fund’s
contractual
management
fee
rate
was
in
the
least
expensive
quintile
of
its
Lipper
expense
group
and
its
total
expenses
were
in
the
second-least
expensive
quintile
of
such
group.
The
Board
was
satisfied
with
such
comparative
fees
and
expenses.
Franklin
MicroCap
Value
Fund
–
The
Fund’s
contractual
management
fee
rate
was
in
the
least
expensive
quintile
of
its
Lipper
expense
group
and
its
total
expenses
were
also
in
the
least
expensive
quintile
of
such
group.
The
Board
was
satisfied
with
such
comparative
fees
and
expenses.
Franklin
Small
Cap
Value
Fund
–
The
Fund’s
contractual
management
fee
rate
was
in
the
least
expensive
quintile
of
its
Lipper
expense
group
and
its
total
expenses
were
also
in
the
least
expensive
quintile
of
such
group.
The
Board
was
satisfied
with
such
comparative
fees
and
expenses.
The
trustees
also
reviewed
the
Profitability
Study
addressing
profitability
of
Franklin
Resources,
Inc.,
from
its
overall
U.S.
fund
business,
as
well
as
profitability
to
the
Funds'
investment
manager
and
its
affiliates,
from
providing
investment
management
and
other
services
to
the
Fund
during
the
12-month
period
ended
September
30,
2019,
the
most
recent
fiscal
year-end
of
Franklin
Resources,
Inc.
The
trustees
reviewed
the
basis
on
which
such
reports
are
prepared
and
the
cost
allocation
methodology
utilized
in
the
Profitability
Study,
it
being
recognized
that
allocation
methodologies
may
each
be
reasonable
while
producing
different
results.
In
this
respect,
the
Board
noted
that
the
reasonableness
of
the
cost
allocation
methodologies
was
reviewed
by
independent
accountants
on
an
every
other
year
basis.
The
independent
trustees
met
with
management
to
discuss
the
Profitability
Study.
This
included,
among
other
things,
a
comparison
of
investment
management
income
with
investment
management
expenses
of
the
Fund;
comparison
of
underwriting
revenues
and
expenses;
the
relative
relationship
of
investment
management
and
underwriting
expenses;
shareholder
servicing
profitability;
economies
of
scale;
and
the
relative
contribution
of
the
Fund
to
the
profitability
of
the
investment
manager
and
its
parent.
In
discussing
the
Profitability
Study
with
the
Board,
the
investment
manager
stated
its
belief
that
the
costs
incurred
in
establishing
the
infrastructure
necessary
to
operate
the
type
of
mutual
fund
operations
conducted
by
it
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability.
The
Board
also
took
into
account
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Funds,
as
well
as
the
need
to
meet
additional
regulatory
and
compliance
requirements.
The
trustees
also
considered
the
extent
to
which
the
investment
manager
may
derive
ancillary
benefits
from
Fund
operations,
including
those
derived
from
economies
of
scale,
discussed
below,
the
allocation
of
Fund
brokerage
and
the
use
of
commission
dollars
to
pay
for
research
and
other
similar
services.
Based
upon
their
consideration
of
all
these
factors,
the
trustees
determined
that
the
level
of
profits
realized
by
the
investment
manager
and
its
affiliates
in
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
quality
and
extent
of
services
provided.
Franklin
Value
Investors
Trust
Shareholder
Information
80
franklintempleton.com
Annual
Report
Economies
of
Scale
The
Board
considered
economies
of
scale
realized
by
the
investment
manager
and
its
affiliates
as
the
Funds
grow
larger
and
the
extent
to
which
they
are
shared
with
Funds
shareholders,
as
for
example,
in
the
level
of
the
investment
management
fee
charged,
in
the
quality
and
efficiency
of
services
rendered
and
in
increased
capital
commitments
benefiting
the
Funds
directly
or
indirectly.
While
recognizing
that
any
precise
determination
is
inherently
subjective,
the
trustees
noted
that,
based
upon
the
Profitability
Study,
as
some
funds
increase
in
size,
at
some
point
economies
of
scale
may
result
in
the
investment
manager
realizing
a
larger
profit
margin
on
investment
management
services
provided
to
such
a
fund.
With
respect
to
all
Funds
other
than
the
Franklin
MicroCap
Value
Fund,
the
trustees
also
noted
that
benefits
of
economies
of
scale
will
be
shared
with
Fund
shareholders
due
to
the
decline
in
the
effective
investment
management
fee
rate
as
breakpoints
are
achieved
by
the
Fund.
With
respect
to
the
Franklin
MicroCap
Value
Fund,
the
fee
structure
under
the
investment
management
agreement
for
the
Fund
provides
a
flat
fee
of
0.75%
at
all
asset
levels.
It
was
noted
the
Fund
primarily
invests
in
domestic
and
foreign
securities
with
a
market
capitalization
of
less
than
$500
million
that
are
believed
to
be
undervalued
at
the
time
of
purchase.
Management
stated
its
belief
that
such
limited
investment
options
curtail
the
potential
size
of
the
Fund,
thus
preventing
the
type
of
economies
of
scale
that
might
benefit
other
funds
from
increases
in
size
and
also
pointed
out
that
the
Fund,
whose
asset
size
was
approximately
$115
million
as
of
March
31,
2020,
had
been
closed
to
new
investors,
with
limited
exceptions,
since
January
14,
2004,
and
reopened
to
new
investors
effective
September
19,
2019.
Management
also
expressed
its
view
that
this
fee
was
relatively
low
for
this
type
of
a
fund
and
pointed
out
the
favorable
comparison
of
fees
and
expenses
within
its
Lipper
expense
group.
The
independent
trustees
acknowledged
that
management’s
explanation
provided
a
reasonable
basis
for
believing
the
existing
fee
rate
under
the
investment
management
agreement
was
fair
and
that,
in
view
of
the
Fund’s
current
modest
size,
management
was
not
benefiting
from
any
meaningful
economies
of
scale
in
its
management
of
the
Fund,
but
would
continue
to
monitor
such
matters.
With
respect
to
all
of
the
other
Funds,
the
trustees
noted
breakpoints
had
been
instituted
as
part
of
the
Fund’s
investment
management
fee
and
that
the
Board
regularly
evaluates
whether
additional
breakpoints
are
appropriate.
The
trustees
assessed
the
savings
to
shareholders
resulting
from
such
breakpoints
and
believed
they
were,
and
continue
to
be,
appropriate
and
they
agreed
to
continue
to
monitor
the
appropriateness
of
the
breakpoints.
The
trustees
also
considered
the
effects
an
increase
in
assets
under
management
would
have
on
the
investment
management
fee
and
expense
ratio
of
the
Fund.
To
the
extent
further
economies
of
scale
may
be
realized
by
the
investment
manager
and
its
affiliates,
the
Board
believed
the
investment
management
fees
provide
a
sharing
of
benefits
with
the
Fund
and
its
shareholders.
Liquidity
Risk
Management
Program
–
Funds
no
HLIM
Each
of
the
Funds
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Funds’
Board
of
Trustees
approved
the
appointment
of
the
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
as
the
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee
and
Product
Management
groups.
Franklin
Value
Investors
Trust
Shareholder
Information
81
franklintempleton.com
Annual
Report
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2020,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
during
the
period
December
1,
2018
to
December
31,
2019.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
At
the
same
time,
the
Program
Administrator
also
presented
the
Fund
Board
of
Trustees
an
update
on
liquidity
during
the
first
quarter
of
2020
in
relation
to
the
COVID-19
pandemic.
Proxy
Voting
Policies
and
Procedures
The
Trust’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Trust
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Trust’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
Trust’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Statement
of
Investments
The
Trust
files
a
complete
statement
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.
gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive
each
Fund’s
financial
reports
every
six
months
as
well
as
an
annual
updated
summary
prospectus
(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
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.
FVIT
A
12/20
©
2020
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.
Annual
Report
and
Shareholder
Letter
Franklin
Value
Investors
Trust
Investment
Manager
Distributor
Shareholder
Services
Franklin
Mutual
Advisers,
LLC
Franklin
Templeton
Distributors,
Inc.
(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 Edward I. Altman,
Ph.D., Ann Torre Bates and David 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
.
(a) Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $85,366 for the fiscal year ended October 31, 2020 and $94,000 for the fiscal year ended October 31, 2019.
(b) Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph
(a) of Item 4.
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.
(c) Tax Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning were $147 for the fiscal year ended October 31, 2020 and $402 for the fiscal year ended October 31, 2019. The services for which these fees were paid included identifying passive foreign investment companies to manage exposure to tax liabilities.
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $91,000 for the fiscal year ended October 31, 2020 and $89,484 for the fiscal year ended October 31, 2019. The services for which these fees were paid included technical tax consultation for withholding tax report to foreign governments, application of local country tax laws and tax advice and India tax compliance services.
(d) All Other Fees
There were no fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant, other than the services reported in paragraphs (a)-(c) of Item 4.
There were no fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant, other than the services reported in paragraphs (a)-(c) of Item 4.
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
(f) No disclosures are required by this Item 4(f).
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $91,147 for the fiscal year ended October 31, 2020 and $89,866 for the fiscal year ended October 31, 2019.
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
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. During the period covered by this report, a third-party service provider commenced performing certain accounting and administrative services for the Registrant that are subject to Franklin Templeton’s oversight.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A
Item 13. Exhibits.
(a) (1) Code of Ethics
(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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Matthew T. Hinkle
, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
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.
FRANKLIN VALUE INVESTORS TRUST
By S\MATTHEW T. HINKLE________________________
Matthew T. Hinkle
Chief Executive Officer – Finance and Administration
Date December 28, 2020
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 December 28, 2020
By S\ROBERT G. KUBILIS_________________________
Robert G. Kubilis
Chief Financial Officer and Chief Accounting Officer
Date December 28, 2020