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)
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: 10/31/21
Item 1. Reports to Stockholders.
a.)
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)
b.)
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
ANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Franklin
Value
Investors
Trust
October
31,
2021
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Annual
Report
1
Shareholder
Letter
Dear
Franklin
Fund
Shareholder:
After
a
difficult
period
of
lockdowns,
the
end
of
2020
brought
much
needed
optimism
during
the
12-month
period
ended
October
31,
2021.
In
November
2020,
scientists
announced
several
viable
vaccine
candidates.
By
the
end
of
December
2020,
authorities
in
the
U.S.
and
Europe
had
approved
the
first
vaccines
for
emergency
use.
The
U.S.
also
passed
an
additional
stimulus
package,
delivering
financial
assistance
to
many
people
in
need.
Ten-year
U.S.
Treasury
yields
rose
as
investors
began
to
anticipate
a
possible
economic
recovery.
This
economic
optimism
sparked
a
rotation
out
of
growth
stocks
and
into
value
stocks
over
the
first
half
of
2021.
The
rotation
into
many
“reopening”
positions
meant
that
companies
which
had
benefited
from
consumer
behavior
shifts
during
the
lockdown,
such
as
online
payment
processors,
online
retailers,
and
remote
worker
infrastructure
providers,
fell
out
of
favor.
Instead,
companies
that
stood
to
benefit
from
economic
reopening,
such
as
hotels,
casinos,
restaurants,
and
other
leisure
companies,
got
a
boost.
Smaller
capitalization
companies,
which
tend
to
be
more
sensitive
to
the
economic
cycle,
outperformed
their
larger-
capitalization
counterparts
the
first
half
of
the
period.
The
new
Biden
administration,
and
its
focus
on
overhauling
America’s
infrastructure,
also
supported
a
rally
in
building
products
companies
and
other
potential
beneficiaries
of
greater
stimulus
spending.
The
U.S.
government
proposed
another
stimulus
bill
in
March
2021.
By
the
late
spring
of
2021,
massive
amounts
of
fiscal
and
monetary
stimulus,
combined
with
increased
consumer
spending
and
supply
chain
difficulties,
led
to
building
inflationary
pressure
and
rising
interest
rates.
While
this
propelled
some
areas
of
global
markets
upward,
such
as
the
financials
and
energy
sectors,
growing
investor
concern
stoked
pockets
of
volatility.
Furthermore,
differences
in
regional
vaccination
rates
constrained
a
widespread
economic
reopening
as
the
highly
contagious
COVID-19
Delta
variant
forced
some
countries
to
reinstate
business
and
travel
restrictions.
The
reopening
trade
stalled,
and
growth
stocks
generally
outperformed
value
stocks
during
the
second
half
of
the
review
period.
Volatility
increased
in
September
2021
and
markets
fell
over
the
final
weeks
of
the
calendar
quarter,
as
continued
supply
chain
disruptions,
inflationary
pressures
and
hawkish
central
bank
commentary
stoked
investor
anxiety.
Markets
rebounded
in
October
2021,
however,
with
some
indices
reaching
new
records.
Not
all
progress
is
evidenced
by
a
steady
march
forward.
Strong
consumer
demand,
combined
with
increasingly
tight
supplies
of
components
and
logistical
difficulties,
could
push
up
prices
over
the
coming
months.
Global
vaccine
distribution
and
ongoing
uncertainties
surrounding
COVID-19
continue
to
affect
financial
markets.
As
these
elements
influence
investor
behavior,
pockets
of
volatility
may
continue
to
crop
up.
However,
market
volatility
can
often
present
opportunities.
As
an
organization,
we
remain
dedicated
to
using
fundamental
research,
coupled
with
a
long-term
approach,
to
identify
attractively
valued
companies
that
can
offer
both
meaningful
upside
potential
and
a
degree
of
downside
protection
in
periods
of
financial
market
turbulence.
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,
Christian
Correa,
CFA
President
and
Chief
Investment
Officer
Franklin
Value
Investors
Trust
This
letter
reflects
our
analysis
and
opinions
as
of
October
31,
2021,
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.
CFA
®
is
a
trademark
owned
by
CFA
Institute.
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
17
Financial
Highlights
and
Statements
of
Investments
24
Financial
Statements
48
Notes
to
Financial
Statements
53
Report
of
Independent
Registered
Public
Accounting
Firm
68
Tax
Information
69
Board
Members
and
Officers
70
Shareholder
Information
75
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
a
+42.91%
total
return
for
the
12
months
ended
October
31,
2021.
1
Stocks
benefited
from
the
continued
economic
recovery,
monetary
and
fiscal
stimulus
measures,
development
of
highly
effective
COVID-19
vaccines,
implementation
of
vaccination
programs
and
easing
pandemic
restrictions.
As
many
businesses
reopened,
stimulus
payments
and
generally
high
household
savings
contributed
to
increased
consumer
spending.
A
rebound
in
corporate
earnings
and
the
U.S.
Senate’s
passage
of
a
bipartisan
infrastructure
bill
further
bolstered
investor
sentiment,
helping
equities
to
reach
new
all-time
price
highs
late
in
the
12-month
period.
Gross
domestic
product
growth
was
robust
during
most
of
the
period,
as
the
lifting
of
many
COVID-19
restrictions
and
strong
consumer
spending
continued
to
support
the
economy.
Both
exports
and
imports
increased
significantly
in
an
environment
of
high
business
confidence
and
recovering
industrial
production.
The
continued
growth
of
the
economy
led
the
U.S.
to
surpass
its
pre-pandemic
output
in
2021’s
second
quarter.
The
inflation
rate
was
elevated
during
the
12-month
period
amid
increased
demand,
supply-chain
bottlenecks
and
wage
growth.
U.S.
consumer
spending
on
goods
remained
strong,
adding
to
pressure
on
the
prices
of
many
products.
Consequently,
the
personal
consumption
expenditures
index,
a
measure
of
inflation,
rose
dramatically
during
the
period,
representing
the
highest
12-month
increase
in
decades.
The
unemployment
rate
declined
from
6.9%
in
October
2020
to
4.6%
in
October
2021
as
job
openings
increased,
but
a
relative
lack
of
available
workers
fueled
wage
growth,
adding
to
some
investors’
inflation
concerns.
In
an
effort
to
support
the
economy,
the
U.S.
Federal
Reserve
(Fed)
kept
the
federal
funds
target
rate
at
a
record-low
range
of
0.00%–0.25%.
The
Fed
also
maintained
quantitative
easing
measures
aimed
at
ensuring
credit
flows
to
borrowers
and
supporting
credit
markets
with
open-
ended
U.S.
Treasury,
mortgage
bond
and
corporate
bond
purchasing.
In
its
September
2021
meeting
statement,
the
Fed
indicated
that
it
soon
plans
to
reduce
its
purchases
of
U.S.
Treasury
and
mortgage-backed
securities.
The
Fed
also
noted
that
it
views
inflation
as
partially
transitory,
and
that
further
employment
progress
was
needed
before
the
Fed
would
consider
raising
the
range
for
the
federal
funds
target
rate.
The
foregoing
information
reflects
our
analysis
and
opinions
as
of
October
31,
2021.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information
4
franklintempleton.com
Annual
Report
Franklin
MicroCap
Value
Fund
This
annual
report
for
Franklin
MicroCap
Value
Fund
covers
the
fiscal
year
ended
October
31,
2021.
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
of
$1
billion
or
less,
or
a
total
market
capitalization
within
the
bottom
40%
of
the
Russell
2000
Value
Index,
whichever
is
higher
at
the
time
of
purchase,
that
we
believe
are
undervalued
in
the
marketplace
and
have
the
potential
for
capital
appreciation.
1
The
Fund
invests
predominantly
in
common
stocks.
The
Fund
may
invest
up
to
25%
of
its
total
assets
in
foreign
securities.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
+57.97%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
2000
®
Value
Index,
which
measures
the
performance
of
those
Russell
2000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates,
posted
a
+64.30%
cumulative
total
return
for
the
same
period.
2
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
companies
that
we
believe
are
undervalued
at
the
time
of
purchase
and
have
the
potential
for
capital
appreciation.
This
includes,
among
other
things,
those
that
may
be
considered
out
of
favor
due
to
actual
or
perceived
cyclical
or
secular
challenges,
or
are
experiencing
temporary
setbacks,
diminished
expectations,
mismanagement
or
undermanagement,
or
are
financially
stressed.
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.
*Categories
within
the
Other
category
are
listed
in
full
in
the
Fund’s
Statement
of
Investments
(SOI),
which
can
be
found
later
in
this
report.
Manager’s
Discussion
For
the
12-month
period,
the
consumer
discretionary,
utilities
and
financials
sectors
were
the
largest
contributors
to
relative
performance.
Within
consumer
discretionary,
stock
selection
and
a
relative
overweighting
to
the
sector
bolstered
returns.
Within
utilities,
an
underweighting
to
the
sector
provided
the
largest
benefit,
and
stock
selection
was
moderately
additive.
Stock
selection
provided
the
main
benefit
within
the
financials
sector.
Conversely,
positioning
within
the
energy,
industrials
and
information
technology
sectors
detracted
from
relative
returns.
Stock
selection
across
all
three
sectors
curbed
relative
performance.
Within
the
energy
sector,
an
underweighted
position
was
also
a
hindrance.
Portfolio
Composition
10/31/21
%
of
Total
Net
Assets
Banks
20.3%
Machinery
7.9%
Thrifts
&
Mortgage
Finance
5.9%
Equity
Real
Estate
Investment
Trusts
(REITs)
4.7%
Health
Care
Equipment
&
Supplies
4.3%
Textiles,
Apparel
&
Luxury
Goods
4.2%
Hotels,
Restaurants
&
Leisure
3.9%
Specialty
Retail
3.7%
Construction
&
Engineering
3.3%
Electronic
Equipment,
Instruments
&
Components
3.0%
Electrical
Equipment
2.9%
Health
Care
Technology
2.6%
Communications
Equipment
2.6%
Water
Utilities
2.3%
Other*
25.1%
Short-Term
Investments
&
Other
Net
Assets
3.3%
1.
The
Russell
2000
Value
Index
is
market
capitalization
weighted
and
measures
the
performance
of
those
Russell
2000
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates.
2.
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
27
.
Franklin
MicroCap
Value
Fund
5
franklintempleton.com
Annual
Report
On
an
absolute
basis,
Shyft
Group,
Genesco
and
First
Internet
Bancorp
were
the
largest
contributors
to
portfolio
results
during
the
12
months
under
review.
First
Internet
Bancorp
is
listed
among
the
Fund’s
largest
positions
in
the
Top
10
Holdings
table
on
this
page.
We
believe
Shyft
Group,
a
specialty
manufacturer
of
commercial
delivery
vehicles,
is
a
long-term
beneficiary
of
the
growth
in
e-commerce,
and
that
the
pandemic
has
accelerated
adoption
of
online
purchasing
by
consumers
and
businesses
alike.
As
a
result,
the
company’s
backlog
of
orders
continues
to
grow.
Furthermore,
management
is
making
prudent
investments
in
the
areas
of
electric
vehicles
and
refrigerated
vehicles
to
expand
the
company’s
portfolio
of
products
and
services.
Debt
on
the
balance
sheet
from
prior
acquisitions
has
declined
significantly
as
a
result
of
healthy
cash
flow
generated
from
operations
and
puts
the
company
in
a
strong
position
to
weather
any
industry
volatility
or
pursue
further
acquisitions,
in
our
view.
Genesco
appreciated
throughout
the
12-month
period.
The
footwear
retailer
operates
Journey’s
and
Johnston
&
Murphy
stores.
The
business
faired
relatively
well
throughout
the
pandemic
due
to
healthy
sales
trends
in
its
teen
and
family
footwear
business
lines,
offered
primarily
through
its
Journey’s
stores.
However,
its
dress
footwear
line,
operated
primarily
through
Johnston
&
Murphy,
was
challenged
since
people
were
not
going
into
the
office.
As
part
of
economic
reopening,
people
are
starting
to
go
back
into
the
office,
and
we
believe
this
will
drive
a
recovery
for
the
Johnston
&
Murphy
business.
First
Internet
Bancorp
is
an
online
bank
headquartered
in
Indiana.
Prior
to
the
start
of
the
12-month
period,
the
stock
came
under
pressure
due
to
concerns
about
potential
credit
losses
attributable
to
COVID-19
shutdowns,
particularly
with
its
concentration
in
single
tenant
lease
financing,
which
includes
restaurant
chains
Red
Lobster
and
Bob
Evans
(not
Fund
holdings).
However,
the
anticipated
credit
issues
were
not
realized,
and
the
stock
price
recovered
throughout
the
12-month
reporting
period.
In
addition,
the
bank
has
been
able
to
protect
and
improve
margins
by
significantly
reducing
its
cost
of
funds,
which
is
a
positive
side
effect
of
the
Fed’s
low
interest
rate
regime.
We
believe
the
bank’s
fundamental
operations
could
continue
to
improve
throughout
2022.
Holdings
that
detracted
from
absolute
Fund
performance
during
the
period
included
Invacare,
Daktronics
and
Graham.
Medical
equipment
manufacturer
Invacare
detracted
from
returns
over
the
period.
The
company
has
seen
strong
demand
and
orders
for
its
products
during
its
latest
quarter,
but
parts
and
labor
shortages
have
made
fulfilling
orders
more
difficult.
As
a
result,
the
company
reduced
its
full-year
outlook.
However,
the
company
does
expect
the
labor
and
parts
shortages
to
ease
over
time,
which
could
result
in
a
recovery
in
order
fulfillment.
Graham,
an
industrial
manufacturer
of
specialized
vacuum
and
heat
transfer
equipment,
reported
decent
results
that
exhibited
management’s
strategy
to
diversify
the
business
away
from
significant
energy
exposure
and
more
towards
defense.
Despite
this,
the
stock
reacted
poorly
in
the
period
as
its
energy
division
has
yet
to
recover
to
pre-COVID-19
levels.
Although
the
majority
of
the
firm’s
order
backlog
relates
to
the
defense
industry
(mostly
long-duration
Navy
contracts)
and
gives
management
good
visibility
into
near-
term
business
trends,
we
believe
it
will
take
time
for
the
market
to
appreciate
these
benefits
before
eventually
being
recognized
in
the
stock
price.
Daktronics
is
a
supplier
of
large-scale
display
solutions,
such
as
scoreboards
for
stadiums,
convention
centers
and
other
outdoor
venues
such
as
Times
Square.
The
business
was
severely
hit
by
the
pandemic
due
to
its
reliance
on
large
public
gatherings.
Despite
the
prospect
of
economic
reopening,
the
stock’s
recovery
has
thus
far
been
muted,
but
we
believe
we
could
see
a
gradual
improvement
as
more
people
get
vaccinated
and
restrictions
are
eased
at
large
public
venues.
In
the
meantime,
the
company
carries
no
debt
and
is
in
what
we
consider
strong
financial
shape,
which
gives
us
comfort
that
the
company
can
weather
near-term
volatility.
Top
10
Holdings
10/31/21
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
First
Internet
Bancorp
2.0%
Banks,
United
States
Indus
Realty
Trust,
Inc.
2.0%
Equity
Real
Estate
Investment
Trusts
(REITs),
United
States
Southern
Missouri
Bancorp,
Inc.
2.0%
Thrifts
&
Mortgage
Finance,
United
States
First
Business
Financial
Services,
Inc.
1.9%
Banks,
United
States
Northeast
Bank
1.8%
Banks,
United
States
Premier
Financial
Corp.
1.8%
Thrifts
&
Mortgage
Finance,
United
States
Resources
Connection,
Inc.
1.8%
Professional
Services,
United
States
Peapack
-Gladstone
Financial
Corp.
1.8%
Banks,
United
States
Utah
Medical
Products,
Inc.
1.8%
Health
Care
Equipment
&
Supplies,
United
States
Ardmore
Shipping
Corp.
1.8%
Oil,
Gas
&
Consumable
Fuels,
Ireland
Franklin
MicroCap
Value
Fund
6
franklintempleton.com
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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,
2021,
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,
2021
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
/3
1
/21
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
+57.97%
+49.26%
5-Year
+62.97%
+9.02%
10-Year
+155.59%
+9.22%
Advisor
1-Year
+58.40%
+58.40%
5-Year
+64.94%
+10.53%
10-Year
+161.79%
+10.10%
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
(11/1/11–10/31/21)
Advisor
Class
(11/1/11–10/31/21)
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.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
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
2/28/22.
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
the
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
(11/1/20–10/31/21)
Share
Class
Net
Investment
Income
Long-Term
Capital
Gain
Total
A
$0.1069
$1.3383
$1.4452
R6
$0.1997
$1.3383
$1.5380
Advisor
$0.1773
$1.3383
$1.5156
Total
Annual
Operating
Expenses
6
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.28%
1.29%
Advisor
1.03%
1.04%
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
184/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
5/1/21
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,011.80
$6.39
$1,018.86
$6.41
1.26%
R6
$1,000
$1,013.70
$4.52
$1,020.71
$4.54
0.89%
Advisor
$1,000
$1,013.20
$5.10
$1,020.14
$5.12
1.01%
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,
2021.
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
+51.14%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
3000
®
Value
Index,
which
measures
the
performance
of
those
Russell
3000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates,
posted
a
+44.97%
cumulative
total
return
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
13
.
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
cash
flow
potential,
balance
sheet
strength,
long-term
earnings,
and
multiples
of
earnings
and
book
value.
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,
or
are
experiencing
temporary
setbacks,
diminished
expectations,
mismanagement
or
undermanagement,
or
are
financially
stressed.
*Categories
within
the
Other
category
are
listed
in
full
in
the
Fund’s
Statement
of
Investments
(SOI),
which
can
be
found
later
in
this
report.
Manager’s
Discussion
For
the
12-month
period,
the
consumer
discretionary,
industrials
and
financials
sectors
were
the
largest
contributors
to
relative
performance.
Stock
selection
helped
results
across
all
three
sectors.
Within
financials,
an
underweighted
position
in
the
sector
also
benefited
results.
Conversely,
positioning
within
the
energy
and
information
technology
sectors
detracted
from
relative
returns.
Stock
selection
across
both
sectors
curbed
relative
performance,
as
did
an
underweighting
in
the
energy
sector.
On
an
absolute
basis,
Bank
of
America,
Capital
One
Financial
and
The
Hartford
Financial
Services
Group
were
the
largest
contributors
to
portfolio
results
during
the
12-month
period.
Bank
of
America
and
The
Hartford
Financial
Services
Group
are
listed
among
the
Fund’s
largest
positions
in
the
Top
10
Holdings
table
on
page
12.
Portfolio
Composition
10/31/21
%
of
Total
Net
Assets
Banks
9.8%
Insurance
7.4%
Pharmaceuticals
6.9%
Equity
Real
Estate
Investment
Trusts
(REITs)
6.4%
IT
Services
5.9%
Food
Products
4.8%
Health
Care
Providers
&
Services
4.6%
Chemicals
4.5%
Electric
Utilities
3.5%
Aerospace
&
Defense
3.1%
Specialty
Retail
3.0%
Diversified
Financial
Services
2.5%
Machinery
2.5%
Building
Products
2.5%
Other*
27.8%
Short-Term
Investments
&
Other
Net
Assets
4.8%
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
36
.
Franklin
Mutual
U.S.
Value
Fund
12
franklintempleton.com
Annual
Report
Shares
of
Bank
of
America
benefited
from
a
rotation
into
cyclical,
value-oriented
stocks
near
the
beginning
of
the
reporting
period.
Later
in
the
period,
investor
optimism
around
normalization
of
the
economy
as
it
continues
to
emerge
from
the
COVID-19
pandemic,
along
with
rising
long-term
interest
rates,
supported
the
stock
price.
The
U.S.
bank
expects
business
to
continue
to
rebound
as
the
economy
further
reopens
over
the
coming
months.
Capital
One
Financial
boosted
performance,
amid
a
strong
period
for
financial
stocks
in
general.
We
believe
Capital
One
is
one
of
the
best-managed
and
best-positioned
consumer
banks
in
the
U.S.,
with
a
good
brand
and
strong
franchises
in
credit
card
and
auto
lending.
Furthermore,
the
bank
has
invested
heavily
in
technology
as
evidenced
by
being
the
first
U.S.
bank
to
migrate
its
technology
to
the
cloud.
That
said,
we
eliminated
the
position
and
deployed
the
proceeds
into
positions
with
a
more
attractive
risk-reward
profile.
Shares
of
Hartford
Financial
Services
rose
based
on
a
positive
general
environment
for
financials
stocks
and
after
the
company
posted
several
positive
earnings
updates
during
the
reporting
period.
Events
such
as
Hurricane
Ida
and
prescribed
charges
related
to
a
legal
settlement
are
likely
to
impact
future
earnings,
but
we
believe
risk
management
initiatives
from
reinsurance
could
blunt
the
impact.
During
the
12-month
period,
Fiserv,
HeidelbergCement
and
Global
Payments
were
among
the
leading
detractors
from
absolute
performance.
Fiserv,
a
global
payment
and
financial
services
technology
company,
was
a
detractor.
The
payments
space
has
come
under
pressure
in
2021
as
investors
have
worried
about
financial
technology
companies
such
as
Square
(not
owned
in
the
portfolio)
taking
market
share.
However,
we
believe
Fiserv’s
payment
volumes
are
poised
to
increase
as
in-store
spending
picks
up
and
Fiserv’s
cloud-based,
point-of-sale
technology
Clover
business
gives
it
an
underappreciated
presence
in
new
payment
technology.
Germany-based
cement
construction
materials
manufacturer
HeidelbergCement
weighed
on
performance.
The
company
faces
higher
energy
costs
that
could
limit
earnings
growth
over
the
near
term.
In
our
view,
HeidelbergCement’s
new
management
team
is
focusing
on
value
accretion
and
improving
the
company’s
return
on
invested
capital,
which
should
drive
shareholder
value
creation.
Payments
firm
Global
Payments
was
a
detractor,
as
the
payments
space
has
come
under
pressure
in
2021
as
concerns
about
market
share
losses
to
the
digital
players
and
a
slew
of
new
listings
leading
to
rotation
of
capital
in
the
space.
Nonetheless,
we
see
what
we
consider
an
opportunity
for
Global
Payments
over
the
longer
term,
as
it
is
well-positioned
to
benefit
from
the
continued
shift
from
cash
to
card/digital
payments
and
has
good
exposure
to
the
high-
yielding
smaller
and
medium-sized
businesses
segment
and
the
e-commerce
market.
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,
2021,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
10/31/21
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
GlaxoSmithKline
plc
3.6%
Pharmaceuticals,
United
Kingdom
Kraft
Heinz
Co.
(The)
3.5%
Food
Products,
United
States
Bank
of
America
Corp.
2.9%
Banks,
United
States
Everest
Re
Group
Ltd.
2.6%
Insurance,
United
States
ING
Groep
NV
2.6%
Banks,
Netherlands
Hartford
Financial
Services
Group,
Inc.
(The)
2.6%
Insurance,
United
States
Voya
Financial,
Inc.
2.5%
Diversified
Financial
Services,
United
States
Johnson
Controls
International
plc
2.5%
Building
Products,
United
States
CVS
Health
Corp.
2.4%
Health
Care
Providers
&
Services,
United
States
NortonLifeLock
,
Inc.
2.3%
Software,
United
States
Performance
Summary
as
of
October
31,
2021
Franklin
Mutual
U.S.
Value
Fund
13
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
10/31/21
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
+51.14%
+42.81%
5-Year
+70.55%
+10.02%
10-Year
+161.68%
+9.48%
Advisor
1-Year
+51.57%
+51.57%
5-Year
+72.77%
+11.56%
10-Year
+168.31%
+10.37%
See
page
15
for
Performance
Summary
footnotes.
Franklin
Mutual
U.S.
Value
Fund
Performance
Summary
14
franklintempleton.com
Annual
Report
See
page
15
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
(11/1/11–10/31/21)
Advisor
Class
(11/1/11–10/31/21)
Franklin
Mutual
U.S.
Value
Fund
Performance
Summary
15
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.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
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
2/28/22.
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
the
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
(11/1/20–10/31/21)
Share
Class
Net
Investment
Income
A
$1.1865
C
$0.9325
R
$1.1054
R6
$1.3023
Advisor
$1.2618
Total
Annual
Operating
Expenses
6
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
0.96%
0.98%
Advisor
0.71%
0.73%
Your
Fund’s
Expenses
Franklin
Mutual
U.S.
Value
Fund
16
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
184/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
5/1/21
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,044.40
$4.72
$1,020.58
$4.67
0.92%
C
$1,000
$1,040.60
$8.57
$1,016.81
$8.47
1.67%
R
$1,000
$1,043.70
$6.01
$1,019.32
$5.94
1.17%
R6
$1,000
$1,046.70
$2.84
$1,022.43
$2.81
0.55%
Advisor
$1,000
$1,046.00
$3.43
$1,021.85
$3.39
0.67%
17
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,
2021.
The
Fund
closed
to
new
investors
on
May
27,
2021.
Existing
investors
who
had
an
open
and
funded
account
on
May
27,
2021,
can
continue
to
invest
through
exchanges
and
additional
purchases.
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.
The
Fund
may
invest
up
to
25%
of
its
total
assets
in
foreign
securities.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
+49.59%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
2000
®
Value
Index,
which
measures
the
performance
of
those
Russell
2000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates,
posted
a
+64.30%
cumulative
total
return
for
the
same
period.
2
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
20
.
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).
*Categories
within
the
Other
category
are
listed
in
full
in
the
Fund’s
Statement
of
Investments
(SOI),
which
can
be
found
later
in
this
report.
Manager’s
Discussion
For
the
12-month
period,
the
health
care,
consumer
staples
and
utilities
sectors
were
the
largest
contributors
to
relative
performance.
Within
health
care
and
utilities,
relative
underweightings
versus
the
benchmark
helped
results.
Stock
Portfolio
Composition
10/31/21
%
of
Total
Net
Assets
Insurance
9.9%
Machinery
9.7%
Banks
9.1%
Hotels,
Restaurants
&
Leisure
7.6%
Chemicals
7.4%
Building
Products
5.7%
Construction
&
Engineering
4.4%
Electronic
Equipment,
Instruments
&
Components
4.3%
Oil,
Gas
&
Consumable
Fuels
4.1%
Specialty
Retail
4.0%
Equity
Real
Estate
Investment
Trusts
(REITs)
3.5%
Trading
Companies
&
Distributors
3.4%
Software
3.3%
Energy
Equipment
&
Services
2.4%
Other*
20.3%
Short-Term
Investments
&
Other
Net
Assets
0.9%
1.
The
Russell
2000
Index
is
market
capitalization
weighted
and
measures
the
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
44
.
Franklin
Small
Cap
Value
Fund
18
franklintempleton.com
Annual
Report
selection
within
the
consumer
staples
sector
also
boosted
relative
returns.
Conversely,
positioning
within
the
consumer
discretionary,
financials
and
materials
sectors
detracted
from
relative
returns.
Stock
selection
across
all
three
sectors
curbed
relative
performance,
as
did
an
overweighted
position
in
consumer
discretionary
and
an
underweighting
in
financials.
On
an
absolute
basis,
Crescent
Point
Energy,
Avient
and
First
Horizon
were
the
largest
contributors
to
portfolio
results
during
the
12-month
period.
Crescent
Point
Energy
and
Avient
are
listed
among
the
Fund’s
largest
positions
in
the
Top
10
Holdings
table
on
this
page.
Shares
of
Crescent
Point
Energy,
a
Canada-based
exploration
and
production
company,
rose
along
with
the
price
of
oil
as
an
increase
in
demand
was
met
by
a
muted
domestic
supply
response
and
modest
Organization
of
the
Petroleum
Exporting
Countries
output
growth.
The
market
also
reacted
favorably
to
an
announcement
in
February
2021
that
Crescent
Point
was
acquiring
certain
Canadian
assets
from
Royal
Dutch
Shell
(not
a
Fund
holding)
for
approximately
$900
million,
a
surprise
dividend
boost
in
September
2021,
a
reduction
in
debt
and
a
positive
free
cash
flow
outlook.
Shares
of
Avient,
a
higher
value-add
chemicals
company,
rose
due
to
stronger-than-expected
earnings
results
driven
by
sequential
improvement
in
demand
across
all
regions
and
end
markets
including
health
care,
consumer
discretionary
and
automobiles.
The
company
also
completed
the
acquisition
of
Clariant’s
Masterbatch
business
on
July
1,
2020,
which
further
improved
Avient’s
exposure
to
specialty
applications
and
broadened
its
business
mix,
with
the
company
now
deriving
much
of
its
revenues
from
the
consumer,
packaging
and
health
care
end
markets.
Additionally,
management
guided
for
higher
cost
synergies
from
the
transaction
compared
to
initial
estimates
and
remains
committed
to
returning
cash
to
shareholders
and
deleveraging
the
balance
sheet.
Shares
of
First
Horizon,
a
regional
bank
with
a
southeastern
U.S.
footprint,
rose
during
the
period
as
the
economy
recovered
from
COVID-19-related
dislocations.
While
interest
rates
and
spread-based
income
remained
low
relative
to
historical
periods,
First
Horizon’s
diversified
fee-
based
revenue
lines,
including
fixed
income
capital
markets
and
mortgage
banking,
performed
well.
Additionally,
asset
quality
trends
benefited
from
the
reopening
of
the
economy,
resulting
in
the
bank
experiencing
very
low
credit
losses
relative
to
fears
early
in
the
pandemic.
On
an
absolute
basis,
Bed
Bath
&
Beyond,
Dufry
and
ACI
Worldwide
were
the
largest
detractors
from
portfolio
results
during
the
12
months
under
review.
Bed
Bath
&
Beyond,
a
home
goods
retailer,
underperformed
after
reporting
a
disappointing
August
2021
financial
quarter
that
included
weaker-than-expected
same-store
sales
and
a
declining
gross
margin.
The
same-store
sales
miss
was
attributed
to
self-inflicted
execution
and
marketing
mistakes
during
the
quarter,
which
hurt
store
traffic.
This
was
compounded
by
margin
weakness
from
significantly
higher-
than-expected
shipping
and
logistics
costs
due
to
freight
shortages
that
are
impacting
the
broader
industry.
We
exited
the
position
by
period-end.
Shares
of
Dufry,
a
global
travel
retail
operator,
declined
as
the
company's
operations
continue
to
be
negatively
impacted
by
the
slower-than-expected
easing
of
international
travel
restrictions
due
to
the
increase
in
COVID-19
Delta
variant
cases
during
the
reporting
period.
With
nearly
half
of
its
stores
still
closed
due
to
travel
restrictions,
Dufry
sales
remain
well
below
pre-coronavirus
levels.
Longer
term,
we
believe
sales
will
improve
as
there
is
continued
progress
on
vaccinations
and
international
travel
restrictions
begin
to
ease.
Shares
of
ACI
Worldwide,
a
provider
of
software
products
and
solutions
that
facilitate
electronic
payments,
detracted
from
results
for
the
period.
While
the
company
met
expectations
for
its
latest
quarter,
near-term
guidance
was
light
due
to
the
timing
of
license
renewals.
Management
expects
growth
to
accelerate
in
the
fourth
quarter
of
2021,
however,
and
introduced
its
revenue
guidance
while
Top
10
Holdings
10/31/21
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Hanover
Insurance
Group,
Inc.
(The)
2.9%
Insurance,
United
States
Knowles
Corp.
2.7%
Electronic
Equipment,
Instruments
&
Components,
United
States
Timken
Co.
(The)
2.6%
Machinery,
United
States
WillScot
Mobile
Mini
Holdings
Corp.
2.6%
Construction
&
Engineering,
United
States
Hilton
Grand
Vacations,
Inc.
2.5%
Hotels,
Restaurants
&
Leisure,
United
States
Ashland
Global
Holdings,
Inc.
2.5%
Chemicals,
United
States
Avient
Corp.
2.4%
Chemicals,
United
States
Crescent
Point
Energy
Corp.
2.3%
Oil,
Gas
&
Consumable
Fuels,
Canada
UFP
Industries,
Inc.
2.3%
Building
Products,
United
States
Jack
in
the
Box,
Inc.
2.3%
Hotels,
Restaurants
&
Leisure,
United
States
Franklin
Small
Cap
Value
Fund
19
franklintempleton.com
Annual
Report
maintaining
its
earnings
before
interest,
taxes,
depreciation,
and
amortization
(a
measure
of
a
company's
overall
financial
performance)
guidance
for
the
year.
Thank
you
for
your
participation
in
Franklin
Small
Cap
Value
Fund.
We
look
forward
to
continuing
to
serve
your
investment
needs.
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,
2021,
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,
2021
Franklin
Small
Cap
Value
Fund
20
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
10/31/21
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
+49.59%
+41.35%
5-Year
+75.11%
+10.60%
10-Year
+202.38%
+11.07%
Advisor
1-Year
+49.98%
+49.98%
5-Year
+77.32%
+12.14%
10-Year
+210.61%
+12.00%
See
page
22
for
Performance
Summary
footnotes.
Franklin
Small
Cap
Value
Fund
Performance
Summary
21
franklintempleton.com
Annual
Report
See
page
22
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
(11/1/11–10/31/21)
Advisor
Class
(11/1/11–10/31/21)
Franklin
Small
Cap
Value
Fund
Performance
Summary
22
franklintempleton.com
Annual
Report
5
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.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
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
2/28/22.
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
the
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
(11/1/20–10/31/21)
Share
Class
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
A
$0.3539
$0.6479
$0.1058
$1.1076
C
$0.0886
$0.6479
$0.1058
$0.8423
R
$0.2443
$0.6479
$0.1058
$0.9980
R6
$0.5514
$0.6479
$0.1058
$1.3051
Advisor
$0.4896
$0.6479
$0.1058
$1.2433
Total
Annual
Operating
Expenses
6
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.08%
1.09%
Advisor
0.83%
0.84%
Your
Fund’s
Expenses
Franklin
Small
Cap
Value
Fund
23
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
184/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
5/1/21
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$983.80
$5.10
$1,020.07
$5.19
1.02%
C
$1,000
$979.90
$8.84
$1,016.28
$9.00
1.77%
R
$1,000
$982.40
$6.35
$1,018.80
$6.47
1.27%
R6
$1,000
$985.80
$2.96
$1,022.22
$3.02
0.59%
Advisor
$1,000
$985.00
$3.82
$1,021.36
$3.89
0.76%
Franklin
Value
Investors
Trust
Financial
Highlights
Franklin
MicroCap
Value
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$21.77
$29.32
$31.06
$36.43
$31.33
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.11
c
0.11
0.06
(0.04)
0.01
Net
realized
and
unrealized
gains
(losses)
...........
12.15
(2.89)
(0.03)
(2.70)
8.20
Total
from
investment
operations
....................
12.26
(2.78)
0.03
(2.74)
8.21
Less
distributions
from:
Net
investment
income
..........................
(0.11)
(0.06)
—
(—)
d
(0.11)
Net
realized
gains
.............................
(1.34)
(4.71)
(1.77)
(2.63)
(3.00)
Total
distributions
...............................
(1.45)
(4.77)
(1.77)
(2.63)
(3.11)
Net
asset
value,
end
of
year
.......................
$32.58
$21.77
$29.32
$31.06
$36.43
Total
return
e
...................................
57.97%
(12.10)%
0.58%
(8.11)%
26.98%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.23%
1.28%
1.22%
1.17%
1.16%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
1.23%
f
1.27%
g
1.21%
g
1.16%
g
1.15%
g
Net
investment
income
(loss)
......................
0.37%
c
0.50%
0.23%
(0.11)%
0.03%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$161,200
$94,015
$145,897
$184,613
$238,337
Portfolio
turnover
rate
............................
31.98%
31.04%
7.04%
4.08%
8.82%
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
$0.05
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
0.20%.
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
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
g
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
25
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$22.17
$29.80
$31.43
$36.85
$31.66
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.22
c
0.20
0.16
0.08
0.12
Net
realized
and
unrealized
gains
(losses)
...........
12.36
(2.94)
(0.02)
(2.74)
8.30
Total
from
investment
operations
....................
12.58
(2.74)
0.14
(2.66)
8.42
Less
distributions
from:
Net
investment
income
..........................
(0.20)
(0.18)
—
(0.13)
(0.23)
Net
realized
gains
.............................
(1.34)
(4.71)
(1.77)
(2.63)
(3.00)
Total
distributions
...............................
(1.54)
(4.89)
(1.77)
(2.76)
(3.23)
Net
asset
value,
end
of
year
.......................
$33.21
$22.17
$29.80
$31.43
$36.85
Total
return
....................................
58.51%
(11.80)%
0.97%
(7.83)%
27.46%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.91%
0.95%
0.89%
0.85%
0.80%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.88%
0.91%
d
0.86%
d
0.82%
d
0.79%
d
Net
investment
income
...........................
0.72%
c
0.86%
0.58%
0.23%
0.39%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$23,137
$12,299
$19,266
$21,070
$27,107
Portfolio
turnover
rate
............................
31.98%
31.04%
7.04%
4.08%
8.82%
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
$0.05
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%.
d
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,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$22.01
$29.62
$31.28
$36.67
$31.52
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.19
c
0.17
0.15
0.05
0.09
Net
realized
and
unrealized
gains
(losses)
...........
12.28
(2.94)
(0.04)
(2.72)
8.25
Total
from
investment
operations
....................
12.47
(2.77)
0.11
(2.67)
8.34
Less
distributions
from:
Net
investment
income
..........................
(0.18)
(0.13)
—
(0.09)
(0.19)
Net
realized
gains
.............................
(1.34)
(4.71)
(1.77)
(2.63)
(3.00)
Total
distributions
...............................
(1.52)
(4.84)
(1.77)
(2.72)
(3.19)
Net
asset
value,
end
of
year
.......................
$32.96
$22.01
$29.62
$31.28
$36.67
Total
return
....................................
58.40%
(11.95)%
0.87%
(7.90)%
27.29%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.98%
1.03%
0.97%
0.92%
0.92%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.98%
d
1.02%
e
0.96%
e
0.91%
e
0.91%
e
Net
investment
income
...........................
0.60%
c
0.73%
0.48%
0.14%
0.27%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$38,829
$22,429
$29,687
$53,329
$76,228
Portfolio
turnover
rate
............................
31.98%
31.04%
7.04%
4.08%
8.82%
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
$0.05
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
0.43%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Statement
of
Investments,
October
31,
2021
Franklin
MicroCap
Value
Fund
franklintempleton.com
Annual
Report
27
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
96.7%
Aerospace
&
Defense
1.7%
a
Ducommun,
Inc.
......................................
United
States
38,600
$
1,867,854
Magellan
Aerospace
Corp.
..............................
Canada
213,900
1,831,602
3,699,456
Banks
20.3%
American
National
Bankshares
,
Inc.
.......................
United
States
94,823
3,517,933
Arrow
Financial
Corp.
..................................
United
States
98,824
3,542,840
Bar
Harbor
Bankshares
.................................
United
States
121,700
3,614,490
First
Business
Financial
Services,
Inc.
......................
United
States
145,900
4,260,280
First
Internet
Bancorp
..................................
United
States
133,575
4,546,893
a
First
Western
Financial,
Inc.
.............................
United
States
110,706
3,212,688
Investar
Holding
Corp.
.................................
United
States
202,455
3,785,908
Northeast
Bank
.......................................
United
States
124,375
4,116,813
Northrim
BanCorp
,
Inc.
.................................
United
States
65,600
2,913,952
Orrstown
Financial
Services,
Inc.
.........................
United
States
110,325
2,615,806
Peapack
-Gladstone
Financial
Corp.
.......................
United
States
120,885
4,055,692
Peoples
Financial
Services
Corp.
.........................
United
States
82,013
3,754,555
WesBanco
,
Inc.
.......................................
United
States
42,357
1,472,753
45,410,603
Biotechnology
0.9%
a
Anika
Therapeutics,
Inc.
................................
United
States
47,392
1,973,877
Chemicals
1.5%
a
Trecora
Resources
....................................
United
States
429,318
3,340,094
Commercial
Services
&
Supplies
1.2%
a
Heritage-Crystal
Clean,
Inc.
.............................
United
States
76,900
2,666,123
Communications
Equipment
2.6%
a
Digi
International,
Inc.
..................................
United
States
113,801
2,452,411
a
PCTEL,
Inc.
.........................................
United
States
341,431
1,966,643
a
Sierra
Wireless,
Inc.
...................................
Canada
78,100
1,307,394
5,726,448
Construction
&
Engineering
3.3%
a
Matrix
Service
Co.
.....................................
United
States
229,741
2,350,250
a
Northwest
Pipe
Co.
....................................
United
States
65,700
1,561,032
a
Sterling
Construction
Co.,
Inc.
............................
United
States
143,851
3,458,178
7,369,460
Containers
&
Packaging
0.8%
a
UFP
Technologies,
Inc.
.................................
United
States
27,200
1,683,408
Diversified
Telecommunication
Services
0.5%
ATN
International,
Inc.
..................................
United
States
29,000
1,182,620
Electrical
Equipment
2.9%
LSI
Industries,
Inc.
....................................
United
States
309,318
2,301,326
Powell
Industries,
Inc.
..................................
United
States
71,900
1,859,334
Preformed
Line
Products
Co.
............................
United
States
32,700
2,269,380
6,430,040
Electronic
Equipment,
Instruments
&
Components
3.0%
a
Daktronics,
Inc.
.......................................
United
States
630,758
3,500,707
a
Kimball
Electronics,
Inc.
................................
United
States
108,100
3,107,875
6,608,582
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
MicroCap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
28
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Energy
Equipment
&
Services
1.2%
a
Geospace
Technologies
Corp.
............................
United
States
290,312
$
2,760,867
Equity
Real
Estate
Investment
Trusts
(REITs)
4.7%
Alpine
Income
Property
Trust,
Inc.
.........................
United
States
157,721
2,908,375
CTO
Realty
Growth,
Inc.
................................
United
States
59,099
3,168,297
Indus
Realty
Trust,
Inc.
.................................
United
States
64,378
4,487,147
10,563,819
Food
&
Staples
Retailing
1.5%
Village
Super
Market,
Inc.,
A
.............................
United
States
148,898
3,315,958
Food
Products
0.9%
a
Seneca
Foods
Corp.,
A
.................................
United
States
38,840
2,005,309
Health
Care
Equipment
&
Supplies
4.3%
a
IntriCon
Corp.
........................................
United
States
205,677
3,496,509
a
Invacare
Corp.
.......................................
United
States
426,735
2,108,071
Utah
Medical
Products,
Inc.
..............................
United
States
41,696
4,037,424
9,642,004
Health
Care
Technology
2.6%
a
CareCloud
,
Inc.
.......................................
United
States
390,791
3,020,814
a
Computer
Programs
and
Systems,
Inc.
.....................
United
States
79,600
2,873,560
5,894,374
Hotels,
Restaurants
&
Leisure
3.9%
a
Century
Casinos,
Inc.
..................................
United
States
234,162
3,465,598
a
Chuy's
Holdings,
Inc.
..................................
United
States
81,100
2,364,876
a
Ruth's
Hospitality
Group,
Inc.
............................
United
States
147,000
2,842,980
8,673,454
Household
Durables
1.4%
Hooker
Furnishings
Corp.
...............................
United
States
79,000
1,991,590
a
Purple
Innovation,
Inc.
.................................
United
States
61,900
1,194,670
3,186,260
Independent
Power
and
Renewable
Electricity
Producers
1.2%
Polaris
Infrastructure,
Inc.
...............................
Canada
177,300
2,638,231
Interactive
Media
&
Services
1.7%
a
DHI
Group,
Inc.
.......................................
United
States
830,765
3,904,596
IT
Services
1.4%
Hackett
Group,
Inc.
(The)
...............................
United
States
152,200
3,217,508
Machinery
7.9%
Alamo
Group,
Inc.
.....................................
United
States
18,100
2,736,720
Graham
Corp.
........................................
United
States
246,397
3,131,706
Hurco
Cos.,
Inc.
......................................
United
States
95,500
3,098,975
a
L
B
Foster
Co.,
A
......................................
United
States
160,143
2,551,078
Miller
Industries,
Inc.
...................................
United
States
65,300
2,359,942
Shyft
Group,
Inc.
(The)
.................................
United
States
90,017
3,709,600
17,588,021
Metals
&
Mining
1.5%
Haynes
International,
Inc.
...............................
United
States
30,620
1,228,781
Schnitzer
Steel
Industries,
Inc.,
A
.........................
United
States
37,400
2,012,120
3,240,901
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)
Oil,
Gas
&
Consumable
Fuels
1.8%
a
Ardmore
Shipping
Corp.
................................
Ireland
998,200
$
3,962,854
Paper
&
Forest
Products
0.9%
Mercer
International,
Inc.
................................
Germany
192,300
2,071,071
Professional
Services
1.8%
Resources
Connection,
Inc.
.............................
United
States
233,100
4,058,271
Semiconductors
&
Semiconductor
Equipment
2.2%
a
AXT,
Inc.
............................................
United
States
254,300
2,077,631
a
Photronics
,
Inc.
.......................................
United
States
220,700
2,866,893
4,944,524
Specialty
Retail
3.7%
a
Children's
Place,
Inc.
(The)
..............................
United
States
30,300
2,511,567
a
Genesco,
Inc.
........................................
United
States
59,200
3,586,928
Hibbett,
Inc.
.........................................
United
States
28,100
2,176,064
8,274,559
Textiles,
Apparel
&
Luxury
Goods
4.2%
a
Delta
Apparel,
Inc.
.....................................
United
States
94,000
2,523,900
Rocky
Brands,
Inc.
....................................
United
States
66,620
3,634,121
a
Vera
Bradley,
Inc.
.....................................
United
States
321,100
3,149,991
9,308,012
Thrifts
&
Mortgage
Finance
5.9%
Premier
Financial
Corp.
.................................
United
States
127,500
4,064,700
Southern
Missouri
Bancorp,
Inc.
..........................
United
States
80,900
4,400,960
Territorial
Bancorp,
Inc.
.................................
United
States
112,239
2,816,077
WSFS
Financial
Corp.
..................................
United
States
34,300
1,777,083
13,058,820
Water
Utilities
2.3%
Consolidated
Water
Co.
Ltd.
.............................
United
States
216,067
2,400,504
a
Pure
Cycle
Corp.
.....................................
United
States
178,887
2,806,737
5,207,241
Wireless
Telecommunication
Services
1.0%
Spok
Holdings,
Inc.
....................................
United
States
215,800
2,220,582
Total
Common
Stocks
(Cost
$139,211,113)
.....................................
215,827,947
Short
Term
Investments
3.6%
a
a
Country
Shares
a
Value
a
Money
Market
Funds
3.6%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.....
United
States
7,943,014
7,943,014
Total
Money
Market
Funds
(Cost
$7,943,014)
...................................
7,943,014
Total
Short
Term
Investments
(Cost
$7,943,014
)
.................................
7,943,014
a
Total
Investments
(Cost
$147,154,127)
100.3%
..................................
$223,770,961
Other
Assets,
less
Liabilities
(0.3)%
...........................................
(603,732)
Net
Assets
100.0%
...........................................................
$223,167,229
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
MicroCap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
30
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
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
31
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$27.59
$34.61
$37.93
$41.08
$35.40
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.43
1.14
c
0.52
0.45
0.38
d
Net
realized
and
unrealized
gains
(losses)
...........
13.37
(5.47)
1.13
(0.43)
7.79
Total
from
investment
operations
....................
13.80
(4.33)
1.65
0.02
8.17
Less
distributions
from:
Net
investment
income
..........................
(1.19)
(0.54)
(0.46)
(0.46)
(0.18)
Net
realized
gains
.............................
—
(2.15)
(4.51)
(2.71)
(2.31)
Total
distributions
...............................
(1.19)
(2.69)
(4.97)
(3.17)
(2.49)
Net
asset
value,
end
of
year
.......................
$40.20
$27.59
$34.61
$37.93
$41.08
Total
return
e
...................................
51.14%
(13.94)%
6.22%
(0.15)%
23.63%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.91%
0.95%
0.93%
0.91%
0.92%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
0.91%
g
0.93%
0.89%
0.86%
0.87%
Net
investment
income
...........................
1.18%
3.94%
c
1.55%
1.13%
0.97%
d
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$790,329
$538,538
$735,919
$772,976
$841,367
Portfolio
turnover
rate
............................
60.45%
57.78%
44.31%
29.85%
24.68%
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%.
g
Benefit
of
waiver
and
payments
by
affiliates
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.
32
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$26.21
$32.97
$36.13
$39.27
$34.01
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.15
0.93
c
0.26
0.15
0.08
d
Net
realized
and
unrealized
gains
(losses)
...........
12.72
(5.28)
1.09
(0.41)
7.49
Total
from
investment
operations
....................
12.87
(4.35)
1.35
(0.26)
7.57
Less
distributions
from:
Net
investment
income
..........................
(0.93)
(0.26)
—
(0.17)
—
Net
realized
gains
.............................
—
(2.15)
(4.51)
(2.71)
(2.31)
Total
distributions
...............................
(0.93)
(2.41)
(4.51)
(2.88)
(2.31)
Net
asset
value,
end
of
year
.......................
$38.15
$26.21
$32.97
$36.13
$39.27
Total
return
e
...................................
50.06%
(14.57)%
5.41%
(0.91)%
22.73%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.66%
1.70%
1.68%
1.66%
1.67%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
1.66%
g
1.68%
1.64%
1.61%
1.62%
Net
investment
income
...........................
0.42%
3.36%
c
0.80%
0.38%
0.22%
d
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$20,132
$15,881
$27,443
$33,854
$65,586
Portfolio
turnover
rate
............................
60.45%
57.78%
44.31%
29.85%
24.68%
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%.
g
Benefit
of
waiver
and
payments
by
affiliates
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,
2021
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$27.67
$34.70
$37.99
$41.10
$35.42
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.34
1.11
c
0.44
0.35
0.29
d
Net
realized
and
unrealized
gains
(losses)
...........
13.44
(5.55)
1.14
(0.42)
7.80
Total
from
investment
operations
....................
13.78
(4.44)
1.58
(0.07)
8.09
Less
distributions
from:
Net
investment
income
..........................
(1.11)
(0.44)
(0.36)
(0.33)
(0.10)
Net
realized
gains
.............................
—
(2.15)
(4.51)
(2.71)
(2.31)
Total
distributions
...............................
(1.11)
(2.59)
(4.87)
(3.04)
(2.41)
Net
asset
value,
end
of
year
.......................
$40.34
$27.67
$34.70
$37.99
$41.10
Total
return
....................................
50.87%
(14.16)%
5.94%
(0.39)%
23.33%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.16%
1.20%
1.18%
1.16%
1.17%
Expenses
net
of
waiver
and
payments
by
affiliates
e
......
1.16%
f
1.18%
1.14%
1.11%
1.12%
Net
investment
income
...........................
0.93%
3.80%
c
1.30%
0.88%
0.72%
d
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$6,362
$4,465
$6,764
$7,280
$7,884
Portfolio
turnover
rate
............................
60.45%
57.78%
44.31%
29.85%
24.68%
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%.
f
Benefit
of
waiver
and
payments
by
affiliates
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,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$28.73
$35.93
$39.20
$42.38
$36.40
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.59
1.27
c
0.67
0.61
0.75
d
Net
realized
and
unrealized
gains
(losses)
...........
13.91
(5.65)
1.18
(0.45)
7.83
Total
from
investment
operations
....................
14.50
(4.38)
1.85
0.16
8.58
Less
distributions
from:
Net
investment
income
..........................
(1.30)
(0.67)
(0.61)
(0.63)
(0.29)
Net
realized
gains
.............................
—
(2.15)
(4.51)
(2.71)
(2.31)
Total
distributions
...............................
(1.30)
(2.82)
(5.12)
(3.34)
(2.60)
Net
asset
value,
end
of
year
.......................
$41.93
$28.73
$35.93
$39.20
$42.38
Total
return
....................................
51.74%
(13.61)%
6.61%
0.19%
24.10%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.59%
0.61%
0.59%
0.57%
0.57%
Expenses
net
of
waiver
and
payments
by
affiliates
e
......
0.55%
0.55%
0.52%
0.50%
0.47%
Net
investment
income
...........................
1.54%
4.24%
c
1.92%
1.49%
1.37%
d
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$39,290
$27,952
$36,398
$36,580
$34,673
Portfolio
turnover
rate
............................
60.45%
57.78%
44.31%
29.85%
24.68%
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
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
35
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$28.80
$36.01
$39.26
$42.39
$36.45
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.55
1.28
c
0.63
0.57
0.49
d
Net
realized
and
unrealized
gains
(losses)
...........
13.95
(5.72)
1.19
(0.46)
8.04
Total
from
investment
operations
....................
14.50
(4.44)
1.82
0.11
8.53
Less
distributions
from:
Net
investment
income
..........................
(1.26)
(0.62)
(0.56)
(0.53)
(0.28)
Net
realized
gains
.............................
—
(2.15)
(4.51)
(2.71)
(2.31)
Total
distributions
...............................
(1.26)
(2.77)
(5.07)
(3.24)
(2.59)
Net
asset
value,
end
of
year
.......................
$42.04
$28.80
$36.01
$39.26
$42.39
Total
return
....................................
51.57%
(13.71)%
6.48%
0.07%
23.98%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.66%
0.70%
0.68%
0.66%
0.67%
Expenses
net
of
waiver
and
payments
by
affiliates
e
......
0.66%
f
0.68%
0.64%
0.61%
0.62%
Net
investment
income
...........................
1.43%
4.22%
c
1.80%
1.38%
1.22%
d
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$56,787
$34,029
$47,427
$48,616
$57,402
Portfolio
turnover
rate
............................
60.45%
57.78%
44.31%
29.85%
24.68%
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%.
f
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Statement
of
Investments,
October
31,
2021
Franklin
Mutual
U.S.
Value
Fund
franklintempleton.com
Annual
Report
36
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
95.2%
Aerospace
&
Defense
3.1%
a
Airbus
SE
...........................................
France
88,110
$
11,301,952
Huntington
Ingalls
Industries,
Inc.
.........................
United
States
83,900
17,009,047
28,310,999
Automobiles
1.9%
a
General
Motors
Co.
....................................
United
States
309,976
16,871,994
Banks
9.8%
Bank
of
America
Corp.
.................................
United
States
556,714
26,599,795
Citizens
Financial
Group,
Inc.
............................
United
States
400,511
18,976,211
ING
Groep
NV
.......................................
Netherlands
1,582,825
24,007,648
PNC
Financial
Services
Group,
Inc.
(The)
...................
United
States
93,000
19,625,790
89,209,444
Building
Products
2.5%
Johnson
Controls
International
plc
.........................
United
States
304,966
22,375,355
Chemicals
4.5%
Ashland
Global
Holdings,
Inc.
............................
United
States
218,459
20,974,249
Avient
Corp.
.........................................
United
States
193,446
10,422,870
Huntsman
Corp.
......................................
United
States
301,250
9,814,725
41,211,844
Commercial
Services
&
Supplies
1.4%
Tetra
Tech,
Inc.
.......................................
United
States
73,200
12,858,312
Construction
Materials
1.1%
HeidelbergCement
AG
.................................
Germany
133,884
10,081,255
Diversified
Financial
Services
2.5%
Voya
Financial,
Inc.
....................................
United
States
328,100
22,891,537
Electric
Utilities
3.5%
Entergy
Corp.
........................................
United
States
119,509
12,311,817
Evergy
,
Inc.
..........................................
United
States
173,117
11,036,209
Pinnacle
West
Capital
Corp.
.............................
United
States
135,100
8,712,599
32,060,625
Electrical
Equipment
1.1%
Regal
Rexnord
Corp.
..................................
United
States
68,765
10,474,972
Electronic
Equipment,
Instruments
&
Components
1.2%
Corning,
Inc.
.........................................
United
States
312,271
11,107,479
Energy
Equipment
&
Services
1.9%
Schlumberger
NV
.....................................
United
States
549,841
17,737,871
Equity
Real
Estate
Investment
Trusts
(REITs)
6.4%
Brixmor
Property
Group,
Inc.
.............................
United
States
862,100
20,207,624
Healthcare
Realty
Trust,
Inc.
.............................
United
States
566,752
18,736,821
Vornado
Realty
Trust
...................................
United
States
466,443
19,884,465
58,828,910
Food
Products
4.8%
Archer-Daniels-Midland
Co.
.............................
United
States
185,700
11,929,368
Kraft
Heinz
Co.
(The)
..................................
United
States
881,132
31,623,827
43,553,195
Health
Care
Equipment
&
Supplies
1.5%
Medtronic
plc
........................................
United
States
112,789
13,518,890
Health
Care
Providers
&
Services
4.6%
Anthem,
Inc.
.........................................
United
States
45,393
19,751,856
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
Annual
Report
37
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Health
Care
Providers
&
Services
(continued)
CVS
Health
Corp.
.....................................
United
States
244,125
$
21,795,480
41,547,336
Household
Durables
1.8%
DR
Horton,
Inc.
.......................................
United
States
188,806
16,854,712
Independent
Power
and
Renewable
Electricity
Producers
1.9%
AES
Corp.
(The)
......................................
United
States
704,762
17,710,669
Industrial
Conglomerates
2.0%
General
Electric
Co.
...................................
United
States
176,564
18,516,267
Insurance
7.4%
Everest
Re
Group
Ltd.
.................................
United
States
92,335
24,145,603
Hartford
Financial
Services
Group,
Inc.
(The)
................
United
States
322,500
23,519,925
Willis
Towers
Watson
plc
................................
United
States
82,219
19,920,019
67,585,547
IT
Services
5.9%
Alliance
Data
Systems
Corp.
.............................
United
States
132,501
11,295,710
Cognizant
Technology
Solutions
Corp.,
A
....................
United
States
256,208
20,007,283
a
Fiserv,
Inc.
..........................................
United
States
142,400
14,024,976
Global
Payments,
Inc.
..................................
United
States
62,097
8,879,250
54,207,219
Machinery
2.5%
Oshkosh
Corp.
.......................................
United
States
99,900
10,689,300
Timken
Co.
(The)
.....................................
United
States
171,038
12,135,146
22,824,446
Media
2.1%
a
Charter
Communications,
Inc.,
A
..........................
United
States
13,979
9,434,287
Comcast
Corp.,
A
.....................................
United
States
187,471
9,641,634
19,075,921
Oil,
Gas
&
Consumable
Fuels
1.5%
Chevron
Corp.
.......................................
United
States
118,735
13,593,970
Pharmaceuticals
6.9%
a
Elanco
Animal
Health,
Inc.
...............................
United
States
292,815
9,627,757
GlaxoSmithKline
plc
...................................
United
Kingdom
1,577,300
32,744,860
Merck
&
Co.,
Inc.
.....................................
United
States
230,307
20,278,532
62,651,149
Professional
Services
1.7%
KBR,
Inc.
...........................................
United
States
369,013
15,660,912
Software
2.3%
NortonLifeLock
,
Inc.
...................................
United
States
825,138
20,999,762
Specialty
Retail
3.0%
Best
Buy
Co.,
Inc.
.....................................
United
States
156,087
19,080,075
Dick's
Sporting
Goods,
Inc.
..............................
United
States
66,522
8,262,698
27,342,773
Technology
Hardware,
Storage
&
Peripherals
2.1%
a
Western
Digital
Corp.
..................................
United
States
372,325
19,468,874
Textiles,
Apparel
&
Luxury
Goods
2.1%
Tapestry,
Inc.
........................................
United
States
480,477
18,728,993
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Mutual
U.S.
Value
Fund
(continued)
franklintempleton.com
Annual
Report
38
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Trading
Companies
&
Distributors
0.2%
a
AerCap
Holdings
NV
...................................
Ireland
28,194
$
1,664,574
Total
Common
Stocks
(Cost
$685,531,745)
.....................................
869,525,806
Short
Term
Investments
5.2%
a
a
Country
Shares
a
Value
a
Money
Market
Funds
5.2%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.....
United
States
47,616,094
47,616,094
Total
Money
Market
Funds
(Cost
$47,616,094)
..................................
47,616,094
Total
Short
Term
Investments
(Cost
$47,616,094
)
................................
47,616,094
a
Total
Investments
(Cost
$733,147,839)
100.4%
..................................
$917,141,900
Other
Assets,
less
Liabilities
(0.4)%
...........................................
(4,242,823)
Net
Assets
100.0%
...........................................................
$912,899,077
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
Small
Cap
Value
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
39
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$41.84
$49.48
$52.59
$59.07
$51.45
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.47
c
0.45
0.51
d
0.39
e
0.31
f
Net
realized
and
unrealized
gains
(losses)
...........
20.03
(5.01)
4.00
(1.95)
10.04
Total
from
investment
operations
....................
20.50
(4.56)
4.51
(1.56)
10.35
Less
distributions
from:
Net
investment
income
..........................
(0.35)
(0.58)
(0.44)
(0.42)
(0.12)
Net
realized
gains
.............................
(0.75)
(2.50)
(7.18)
(4.50)
(2.61)
Total
distributions
...............................
(1.10)
(3.08)
(7.62)
(4.92)
(2.73)
Net
asset
value,
end
of
year
.......................
$61.24
$41.84
$49.48
$52.59
$59.07
Total
return
g
...................................
49.59%
(10.04)%
11.35%
(3.04)%
20.53%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.00%
1.08%
1.06%
1.05%
1.05%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
1.00%
h
1.07%
i
1.05%
i
1.03%
i
1.03%
i
Net
investment
income
...........................
0.81%
c
1.08%
1.10%
d
0.69%
e
0.58%
f
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,577,561
$1,123,039
$1,334,235
$1,366,866
$1,364,629
Portfolio
turnover
rate
............................
52.76%
67.46%
57.84%
53.26%
33.38%
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
$0.15
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
0.56%.
d
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%.
e
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%.
f
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%.
g
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
h
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
i
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.
40
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$35.87
$42.84
$46.45
$52.75
$46.42
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.02
c
0.12
0.15
d
(0.02)
e
(0.09)
f
Net
realized
and
unrealized
gains
(losses)
...........
17.20
(4.33)
3.42
(1.72)
9.03
Total
from
investment
operations
....................
17.22
(4.21)
3.57
(1.74)
8.94
Less
distributions
from:
Net
investment
income
..........................
(0.09)
(0.26)
—
(0.06)
—
Net
realized
gains
.............................
(0.75)
(2.50)
(7.18)
(4.50)
(2.61)
Total
distributions
...............................
(0.84)
(2.76)
(7.18)
(4.56)
(2.61)
Net
asset
value,
end
of
year
.......................
$52.25
$35.87
$42.84
$46.45
$52.75
Total
return
g
...................................
48.51%
(10.73)%
10.52%
(3.77)%
19.62%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.75%
1.83%
1.81%
1.80%
1.80%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
1.75%
h
1.82%
i
1.80%
i
1.78%
i
1.78%
i
Net
investment
income
(loss)
......................
0.05%
c
0.34%
0.35%
d
(0.06)%
e
(0.17)%
f
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$99,994
$77,586
$111,639
$138,188
$225,228
Portfolio
turnover
rate
............................
52.76%
67.46%
57.84%
53.26%
33.38%
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
$0.15
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
(0.20)%.
d
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%.
e
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)%.
f
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)%.
g
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
h
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
i
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,
2021
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$41.31
$48.88
$51.98
$58.37
$50.87
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.32
c
0.35
0.40
d
0.25
e
0.18
f
Net
realized
and
unrealized
gains
(losses)
...........
19.79
(4.97)
3.94
(1.93)
9.93
Total
from
investment
operations
....................
20.11
(4.62)
4.34
(1.68)
10.11
Less
distributions
from:
Net
investment
income
..........................
(0.24)
(0.45)
(0.26)
(0.21)
—
Net
realized
gains
.............................
(0.75)
(2.50)
(7.18)
(4.50)
(2.61)
Total
distributions
...............................
(0.99)
(2.95)
(7.44)
(4.71)
(2.61)
Net
asset
value,
end
of
year
.......................
$60.43
$41.31
$48.88
$51.98
$58.37
Total
return
....................................
49.22%
(10.27)%
11.06%
(3.28)%
20.23%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.25%
1.33%
1.31%
1.30%
1.30%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
1.25%
g
1.32%
h
1.30%
h
1.28%
h
1.28%
h
Net
investment
income
...........................
0.56%
c
0.84%
0.85%
d
0.44%
e
0.33%
f
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$150,288
$106,201
$143,634
$158,678
$209,627
Portfolio
turnover
rate
............................
52.76%
67.46%
57.84%
53.26%
33.38%
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
$0.15
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
0.32%.
d
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%.
e
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%.
f
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%.
g
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
h
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
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,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$44.37
$52.29
$55.17
$61.71
$53.60
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.71
c
0.65
0.75
d
0.66
e
0.58
f
Net
realized
and
unrealized
gains
(losses)
...........
21.27
(5.27)
4.23
(2.05)
10.49
Total
from
investment
operations
....................
21.98
(4.62)
4.98
(1.39)
11.07
Less
distributions
from:
Net
investment
income
..........................
(0.55)
(0.80)
(0.68)
(0.65)
(0.35)
Net
realized
gains
.............................
(0.75)
(2.50)
(7.18)
(4.50)
(2.61)
Total
distributions
...............................
(1.30)
(3.30)
(7.86)
(5.15)
(2.96)
Net
asset
value,
end
of
year
.......................
$65.05
$44.37
$52.29
$55.17
$61.71
Total
return
....................................
50.21%
(9.65)%
11.82%
(2.63)%
21.07%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.62%
0.68%
0.66%
0.66%
0.60%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.59%
0.64%
g
0.61%
g
0.60%
g
0.58%
g
Net
investment
income
...........................
1.15%
c
1.47%
1.54%
d
1.12%
e
1.03%
f
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,336,020
$510,946
$362,397
$270,426
$221,246
Portfolio
turnover
rate
............................
52.76%
67.46%
57.84%
53.26%
33.38%
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
$0.15
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
0.90%.
d
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%.
e
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%.
f
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%.
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
43
a
Year
Ended
October
31,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$44.44
$52.36
$55.19
$61.66
$53.58
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.63
c
0.58
0.67
d
0.56
e
0.48
f
Net
realized
and
unrealized
gains
(losses)
...........
21.30
(5.29)
4.24
(2.06)
10.48
Total
from
investment
operations
....................
21.93
(4.71)
4.91
(1.50)
10.96
Less
distributions
from:
Net
investment
income
..........................
(0.49)
(0.71)
(0.56)
(0.47)
(0.27)
Net
realized
gains
.............................
(0.75)
(2.50)
(7.18)
(4.50)
(2.61)
Total
distributions
...............................
(1.24)
(3.21)
(7.74)
(4.97)
(2.88)
Net
asset
value,
end
of
year
.......................
$65.13
$44.44
$52.36
$55.19
$61.66
Total
return
....................................
49.98%
(9.81)%
11.61%
(2.81)%
20.84%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.75%
0.83%
0.81%
0.80%
0.80%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.75%
g
0.82%
h
0.80%
h
0.78%
h
0.78%
h
Net
investment
income
...........................
1.01%
c
1.30%
1.35%
d
0.94%
e
0.83%
f
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,687,270
$646,240
$522,329
$544,792
$583,364
Portfolio
turnover
rate
............................
52.76%
67.46%
57.84%
53.26%
33.38%
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
$0.15
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
0.76%.
d
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%.
e
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%.
f
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%.
g
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
h
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Value
Investors
Trust
Statement
of
Investments,
October
31,
2021
Franklin
Small
Cap
Value
Fund
franklintempleton.com
Annual
Report
44
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
99.1%
Auto
Components
1.9%
a
Adient
plc
...........................................
United
States
1,472,962
$
61,304,679
LCI
Industries
........................................
United
States
217,546
30,378,123
91,682,802
Banks
9.1%
Atlantic
Union
Bankshares
Corp.
..........................
United
States
1,153,814
41,387,308
Bryn
Mawr
Bank
Corp.
.................................
United
States
988,052
45,786,330
Camden
National
Corp.
.................................
United
States
314,399
14,965,392
Columbia
Banking
System,
Inc.
...........................
United
States
1,655,576
56,504,809
First
Horizon
Corp.
....................................
United
States
2,995,863
50,839,795
First
Interstate
BancSystem
,
Inc.,
A
........................
United
States
162,736
6,764,936
b
First
of
Long
Island
Corp.
(The)
...........................
United
States
1,230,606
24,772,099
German
American
Bancorp,
Inc.
..........................
United
States
571,608
22,532,787
Peoples
Bancorp,
Inc.
..................................
United
States
617,140
19,723,794
SouthState
Corp.
.....................................
United
States
1,063,502
83,048,871
TriCo
Bancshares
.....................................
United
States
908,962
39,839,805
Washington
Trust
Bancorp,
Inc.
...........................
United
States
616,609
33,703,848
439,869,774
Biotechnology
0.2%
a
Mirum
Pharmaceuticals,
Inc.
.............................
United
States
159,163
2,527,509
a
Rhythm
Pharmaceuticals,
Inc.
............................
United
States
808,479
9,305,593
11,833,102
Building
Products
5.7%
b
Apogee
Enterprises,
Inc.
................................
United
States
1,535,111
64,367,204
Insteel
Industries,
Inc.
..................................
United
States
422,236
17,172,338
a
Masonite
International
Corp.
.............................
United
States
442,544
53,109,706
UFP
Industries,
Inc.
....................................
United
States
1,379,175
112,857,890
Zurn
Water
Solutions
Corp.
..............................
United
States
769,080
27,902,222
275,409,360
Chemicals
7.4%
Ashland
Global
Holdings,
Inc.
............................
United
States
1,250,955
120,104,189
Avient
Corp.
.........................................
United
States
2,131,616
114,851,470
a
Elementis
plc
........................................
United
Kingdom
22,200,006
42,381,088
Minerals
Technologies,
Inc.
..............................
United
States
1,126,413
79,907,738
357,244,485
Communications
Equipment
1.7%
a
NetScout
Systems,
Inc.
.................................
United
States
3,138,981
84,940,826
Construction
&
Engineering
4.4%
Argan
,
Inc.
..........................................
United
States
586,192
24,186,282
a,b
Great
Lakes
Dredge
&
Dock
Corp.
........................
United
States
4,091,750
62,276,435
a
WillScot
Mobile
Mini
Holdings
Corp.
.......................
United
States
3,604,622
125,260,614
211,723,331
Construction
Materials
2.2%
a
Summit
Materials,
Inc.,
A
................................
United
States
3,008,434
107,250,672
Electric
Utilities
0.8%
IDACORP,
Inc.
.......................................
United
States
364,837
38,059,796
Electrical
Equipment
1.9%
Regal
Rexnord
Corp.
..................................
United
States
592,924
90,320,113
Electronic
Equipment,
Instruments
&
Components
4.3%
b
Benchmark
Electronics,
Inc.
.............................
United
States
2,564,535
59,779,311
CTS
Corp.
..........................................
United
States
159,272
5,673,269
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
45
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Electronic
Equipment,
Instruments
&
Components
(continued)
a
II-VI,
Inc.
............................................
United
States
176,983
$
10,709,241
a,b
Knowles
Corp.
.......................................
United
States
6,274,688
130,764,498
206,926,319
Energy
Equipment
&
Services
2.4%
Hunting
plc
..........................................
United
Kingdom
4,813,093
11,157,900
a
Natural
Gas
Services
Group,
Inc.
.........................
United
States
531,000
6,037,470
a
NexTier
Oilfield
Solutions,
Inc.
............................
United
States
4,790,885
21,367,347
a
TechnipFMC
plc
......................................
United
Kingdom
10,649,964
78,490,235
117,052,952
Equity
Real
Estate
Investment
Trusts
(REITs)
3.5%
Alexander
&
Baldwin,
Inc.
...............................
United
States
1,390,506
34,109,112
Healthcare
Realty
Trust,
Inc.
.............................
United
States
1,565,354
51,750,603
Highwoods
Properties,
Inc.
..............................
United
States
910,267
40,816,372
Kimco
Realty
Corp.
....................................
United
States
34,636
782,774
a
Sunstone
Hotel
Investors,
Inc.
............................
United
States
3,459,017
42,684,270
170,143,131
Food
&
Staples
Retailing
0.2%
a
BJ's
Wholesale
Club
Holdings,
Inc.
........................
United
States
201,565
11,779,459
Food
Products
1.7%
Glanbia
plc
..........................................
Ireland
5,155,886
84,194,036
Gas
Utilities
0.1%
Spire,
Inc.
...........................................
United
States
76,415
4,795,805
Health
Care
Equipment
&
Supplies
2.3%
a
Envista
Holdings
Corp.
.................................
United
States
1,470,995
57,515,905
a
Integer
Holdings
Corp.
.................................
United
States
625,374
56,296,167
113,812,072
Hotels,
Restaurants
&
Leisure
7.6%
a,b
Dalata
Hotel
Group
plc
.................................
Ireland
11,474,366
49,073,911
a,b
Denny's
Corp.
........................................
United
States
5,238,722
83,295,680
a
Hilton
Grand
Vacations,
Inc.
.............................
United
States
2,420,911
121,723,405
b
Jack
in
the
Box,
Inc.
...................................
United
States
1,139,195
112,723,345
366,816,341
Household
Durables
0.1%
a
M/I
Homes,
Inc.
.......................................
United
States
72,295
4,139,612
Insurance
9.9%
Argo
Group
International
Holdings
Ltd.
.....................
United
States
435,707
24,007,456
CNO
Financial
Group,
Inc.
..............................
United
States
3,578,579
86,386,897
Hanover
Insurance
Group,
Inc.
(The)
.......................
United
States
1,110,912
139,974,913
Horace
Mann
Educators
Corp.
...........................
United
States
2,031,284
79,585,707
Old
Republic
International
Corp.
..........................
United
States
2,907,251
75,094,293
Selective
Insurance
Group,
Inc.
...........................
United
States
958,808
75,141,783
480,191,049
IT
Services
1.4%
Alliance
Data
Systems
Corp.
.............................
United
States
787,191
67,108,033
Leisure
Products
1.4%
Brunswick
Corp.
......................................
United
States
714,832
66,543,711
Machinery
9.7%
Astec
Industries,
Inc.
...................................
United
States
230,038
12,279,428
Columbus
McKinnon
Corp.
..............................
United
States
292,721
13,836,922
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)
Machinery
(continued)
Flowserve
Corp.
......................................
United
States
1,774,702
$
59,665,481
b
Greenbrier
Cos.,
Inc.
(The)
..............................
United
States
2,638,829
108,244,766
Mueller
Industries,
Inc.
.................................
United
States
536,425
28,237,412
Mueller
Water
Products,
Inc.,
A
...........................
United
States
3,891,727
63,863,240
REV
Group,
Inc.
......................................
United
States
2,273,579
34,353,779
Terex
Corp.
..........................................
United
States
535,689
23,998,867
Timken
Co.
(The)
.....................................
United
States
1,772,598
125,765,828
470,245,723
Metals
&
Mining
0.3%
Kaiser
Aluminum
Corp.
.................................
United
States
156,230
15,176,182
Multi-Utilities
1.5%
Black
Hills
Corp.
......................................
United
States
1,065,010
70,695,364
Oil,
Gas
&
Consumable
Fuels
4.1%
Crescent
Point
Energy
Corp.
.............................
Canada
22,628,136
113,698,203
a
Green
Plains,
Inc.
.....................................
United
States
2,231,429
84,682,731
198,380,934
Professional
Services
1.8%
ICF
International,
Inc.
..................................
United
States
308,855
31,036,839
Stantec
,
Inc.
.........................................
Canada
998,269
55,159,221
86,196,060
Semiconductors
&
Semiconductor
Equipment
0.0%
†
a
Cohu
,
Inc.
...........................................
United
States
38,544
1,234,950
Software
3.3%
a
ACI
Worldwide,
Inc.
....................................
United
States
3,337,303
102,388,456
Software
AG
.........................................
Germany
1,469,946
60,451,420
162,839,876
Specialty
Retail
4.0%
a
Children's
Place,
Inc.
(The)
..............................
United
States
470,537
39,002,812
a
Dufry
AG
............................................
Switzerland
1,401,946
74,211,633
Group
1
Automotive,
Inc.
................................
United
States
461,305
82,942,639
196,157,084
Textiles,
Apparel
&
Luxury
Goods
0.4%
Carter's,
Inc.
.........................................
United
States
219,540
21,629,081
Thrifts
&
Mortgage
Finance
0.4%
a
Enact
Holdings,
Inc.
...................................
United
States
822,145
18,892,892
Trading
Companies
&
Distributors
3.4%
Herc
Holdings,
Inc.
....................................
United
States
333,957
60,793,532
b
McGrath
RentCorp
....................................
United
States
1,415,929
102,145,118
162,938,650
Total
Common
Stocks
(Cost
$3,971,670,533)
....................................
4,806,223,577
Franklin
Value
Investors
Trust
Statement
of
Investments
Franklin
Small
Cap
Value
Fund
(continued)
franklintempleton.com
Annual
Report
47
Short
Term
Investments
1.0%
a
a
Country
Shares
a
Value
a
Money
Market
Funds
1.0%
c,d
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.....
United
States
50,903,498
$
50,903,498
Total
Money
Market
Funds
(Cost
$50,903,498)
..................................
50,903,498
Total
Short
Term
Investments
(Cost
$50,903,498
)
................................
50,903,498
a
Total
Investments
(Cost
$4,022,574,031)
100.1%
................................
$4,857,127,075
Other
Assets,
less
Liabilities
(0.1)%
...........................................
(5,995,092)
Net
Assets
100.0%
...........................................................
$4,851,131,983
†
Rounds
to
less
than
0.1%
of
net
assets.
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,
2021
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
48
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
.................................
$139,211,113
$685,531,745
$3,252,502,964
Cost
-
Non-controlled
affiliates
(Note
3
f
and
8
)
..................
7,943,014
47,616,094
770,071,067
Value
-
Unaffiliated
issuers
................................
$215,827,947
$869,525,806
$4,008,781,210
Value
-
Non-controlled
affiliates
(Note
3
f
and
8
)
.................
7,943,014
47,616,094
848,345,865
Cash
..................................................
—
—
23
Foreign
currency,
at
value
(cost
$–,
$–
and
$61,178
,
respectively)
....
—
—
61,178
Receivables:
Investment
securities
sold
.................................
—
925,158
18,927,518
Capital
shares
sold
......................................
319,339
454,716
5,164,107
Dividends
and
interest
...................................
21,879
400,398
1,037,009
Other
assets
............................................
—
1,196
—
Total
assets
........................................
224,112,179
918,923,368
4,882,316,910
Liabilities:
Payables:
Investment
securities
purchased
............................
417,033
4,479,767
21,320,255
Capital
shares
redeemed
.................................
239,422
650,503
5,764,101
Management
fees
.......................................
139,868
362,309
2,222,271
Distribution
fees
........................................
34,024
186,186
486,947
Transfer
agent
fees
......................................
43,752
197,028
1,222,688
Professional
fees
.......................................
51,378
55,512
61,146
Accrued
expenses
and
other
liabilities
.........................
19,473
92,986
107,519
Total
liabilities
.......................................
944,950
6,024,291
31,184,927
Net
assets,
at
value
...............................
$223,167,229
$912,899,077
$4,851,131,983
Net
assets
consist
of:
Paid-in
capital
...........................................
$116,847,782
$621,367,307
$3,604,117,535
Total
distributable
earnings
(losses)
...........................
106,319,447
291,531,770
1,247,014,448
Net
assets,
at
value
...............................
$223,167,229
$912,899,077
$4,851,131,983
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Assets
and
Liabilities
(continued)
October
31,
2021
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
Class
A:
Net
assets,
at
value
.....................................
$161,200,470
$790,328,840
$1,577,560,505
Shares
outstanding
......................................
4,948,469
19,662,208
25,762,053
Net
asset
value
per
share
a
................................
$32.58
$40.20
$61.24
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
..............................................
$34.48
$42.54
$64.80
Class
C:
Net
assets,
at
value
.....................................
$—
$20,131,529
$99,993,940
Shares
outstanding
......................................
—
527,736
1,913,851
Net
asset
value
and
maximum
offering
price
per
share
a
...........
$—
$38.15
$52.25
Class
R:
Net
assets,
at
value
.....................................
$—
$6,361,617
$150,287,780
Shares
outstanding
......................................
—
157,709
2,486,939
Net
asset
value
and
maximum
offering
price
per
share
...........
$—
$40.34
$60.43
Class
R6:
Net
assets,
at
value
.....................................
$23,137,415
$39,290,193
$1,336,019,606
Shares
outstanding
......................................
696,797
937,100
20,537,044
Net
asset
value
and
maximum
offering
price
per
share
...........
$33.21
$41.93
$65.05
Advisor
Class:
Net
assets,
at
value
.....................................
$38,829,344
$56,786,898
$1,687,270,152
Shares
outstanding
......................................
1,178,186
1,350,884
25,906,126
Net
asset
value
and
maximum
offering
price
per
share
...........
$32.96
$42.04
$65.13
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,
2021
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
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$14,269,
$341,262
and
$225,383,
respectively)
Unaffiliated
issuers
......................................
$3,240,585
$16,780,129
$66,064,850
Non-controlled
affiliates
(Note
3
f
and
8
)
.......................
542
2,345
8,538,703
Interest:
Unaffiliated
issuers
......................................
—
513,300
49,852
Total
investment
income
.................................
3,241,127
17,295,774
74,653,405
Expenses:
Management
fees
(Note
3
a
)
.................................
1,516,453
3,967,921
22,864,111
Distribution
fees:
(Note
3c
)
Class
A
..............................................
360,471
1,782,086
3,823,183
Class
C
..............................................
—
210,581
1,119,242
Class
R
..............................................
—
29,278
737,210
Transfer
agent
fees:
(Note
3e
)
Class
A
..............................................
186,130
958,859
2,819,279
Class
C
..............................................
—
28,310
206,367
Class
R
..............................................
—
7,897
272,483
Class
R6
.............................................
11,182
24,053
609,556
Advisor
Class
..........................................
49,654
67,676
2,462,563
Custodian
fees
(Note
4
)
....................................
869
4,447
22,002
Reports
to
shareholders
fees
................................
28,121
106,796
264,367
Registration
and
filing
fees
..................................
56,853
98,805
234,111
Professional
fees
.........................................
107,060
105,982
130,590
Trustees'
fees
and
expenses
................................
12,370
50,260
236,133
Other
..................................................
9,137
22,830
64,659
Total
expenses
.......................................
2,338,300
7,465,781
35,865,856
Expense
reductions
(Note
4
)
.............................
—
(6)
—
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
............
(10,095)
(37,518)
(341,032)
Net
expenses
.......................................
2,328,205
7,428,257
35,524,824
Net
investment
income
..............................
912,922
9,867,517
39,128,581
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
....................................
32,607,209
156,901,654
431,391,179
Non-controlled
affiliates
(Note
3
f
and
8
)
.....................
—
—
13,402,303
Foreign
currency
transactions
..............................
901
(8,020)
156,548
Net
realized
gain
(loss)
................................
32,608,110
156,893,634
444,950,030
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
....................................
40,148,742
140,358,993
736,301,397
Non-controlled
affiliates
(Note
3
f
and
8
)
.....................
—
—
62,196,304
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
...........................................
—
—
(10,798)
Net
change
in
unrealized
appreciation
(depreciation)
..........
40,148,742
140,358,993
798,486,903
Net
realized
and
unrealized
gain
(loss)
..........................
72,756,852
297,252,627
1,243,436,933
Net
increase
(decrease)
in
net
assets
resulting
from
operations
........
$73,669,774
$307,120,144
$1,282,565,514
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
51
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Year
Ended
October
31,
2021
Year
Ended
October
31,
2020
Year
Ended
October
31,
2021
Year
Ended
October
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
............
$912,922
$826,718
$9,867,517
$27,754,071
Net
realized
gain
(loss)
............
32,608,110
8,450,976
156,893,634
(51,050,450)
Net
change
in
unrealized
appreciation
(depreciation)
.................
40,148,742
(31,579,004)
140,358,993
(91,259,740)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
73,669,774
(22,301,310)
307,120,144
(114,556,119)
Distributions
to
shareholders:
Class
A
........................
(6,083,695)
(22,379,215)
(22,744,402)
(55,980,118)
Class
C
........................
—
—
(552,317)
(1,950,834)
Class
R
........................
—
—
(173,376)
(484,796)
Class
R6
.......................
(884,169)
(3,108,432)
(1,236,499)
(2,794,097)
Advisor
Class
...................
(1,530,858)
(4,396,451)
(1,479,012)
(3,607,514)
Total
distributions
to
shareholders
.....
(8,498,722)
(29,884,098)
(26,185,606)
(64,817,359)
Capital
share
transactions:
(Note
2
)
Class
A
........................
20,172,380
(12,239,692)
8,798,321
(42,590,380)
Class
C
........................
—
—
(2,860,901)
(5,609,273)
Class
R
........................
���
—
(135,103)
(990,297)
Class
R6
.......................
4,300,636
(1,373,665)
(1,292,605)
(1,026,422)
Advisor
Class
...................
4,780,407
(308,576)
6,589,376
(3,496,139)
Total
capital
share
transactions
.......
29,253,423
(13,921,933)
11,099,088
(53,712,511)
Net
increase
(decrease)
in
net
assets
.....................
94,424,475
(66,107,341)
292,033,626
(233,085,989)
Net
assets:
Beginning
of
year
..................
128,742,754
194,850,095
620,865,451
853,951,440
End
of
year
......................
$223,167,229
$128,742,754
$912,899,077
$620,865,451
Franklin
Value
Investors
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
52
Franklin
Small
Cap
Value
Fund
Year
Ended
October
31,
2021
Year
Ended
October
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$39,128,581
$26,297,458
Net
realized
gain
(loss)
.................................................
444,950,030
47,855,032
Net
change
in
unrealized
appreciation
(depreciation)
...........................
798,486,903
(292,809,144)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
1,282,565,514
(218,656,654)
Distributions
to
shareholders:
Class
A
.............................................................
(27,860,860)
(82,154,393)
Class
C
.............................................................
(1,853,782)
(7,034,679)
Class
R
.............................................................
(2,516,577)
(8,475,708)
Class
R6
............................................................
(16,086,898)
(23,812,714)
Advisor
Class
........................................................
(20,153,588)
(32,065,484)
Total
distributions
to
shareholders
..........................................
(68,471,705)
(153,542,978)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(46,025,652)
1,190,848
Class
C
.............................................................
(13,872,001)
(14,696,868)
Class
R
.............................................................
(4,495,364)
(14,716,760)
Class
R6
............................................................
552,286,445
194,123,939
Advisor
Class
........................................................
685,131,851
196,078,056
Total
capital
share
transactions
............................................
1,173,025,279
361,979,215
Net
increase
(decrease)
in
net
assets
...................................
2,387,119,088
(10,220,417)
Net
assets:
Beginning
of
year
.......................................................
2,464,012,895
2,474,233,312
End
of
year
...........................................................
$4,851,131,983
$2,464,012,895
Franklin
Value
Investors
Trust
53
franklintempleton.com
Annual
Report
Notes
to
Financial
Statements
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.
Effective
August
2,
2021,
Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Prior
to
August
2,
2021,
Class
C
shares
converted
to
Class
A
shares
after
a
10-year
holding
period.
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
Class
A,
Class
C,
Class
R
,
Class
R6
&
Advisor
Class
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
a
a
Effective
May
27,
2021,
the
Franklin
Small
Cap
Value
Fund
was
closed
to
new
investors
with
limited
exceptions.
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
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
54
franklintempleton.com
Annual
Report
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
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,
2021,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
inputs
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
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). Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
55
franklintempleton.com
Annual
Report
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
amount
of
foreign
taxes
Fund
shareholders
can
use
as
tax
deductions
or
credits
on
their
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,
2021, 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
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
e.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
f.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
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
56
franklintempleton.com
Annual
Report
2.
Shares
of
Beneficial
Interest
At
October
31,
2021,
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,
2021
Shares
sold
a
...................................
1,462,945
$46,213,507
4,681,925
$175,735,473
Shares
issued
in
reinvestment
of
distributions
..........
226,581
5,893,373
660,772
20,853,982
Shares
redeemed
...............................
(1,059,767)
(31,934,500)
(5,202,212)
(187,791,134)
Net
increase
(decrease)
..........................
629,759
$20,172,380
140,485
$8,798,321
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)
Class
C
Class
C
Shares:
Year
ended
October
31,
2021
Shares
sold
...................................
—
$—
256,950
$9,200,910
Shares
issued
in
reinvestment
of
distributions
..........
—
—
18,229
549,596
Shares
redeemed
a
..............................
—
—
(353,358)
(12,611,407)
Net
increase
(decrease)
..........................
—
$—
(78,179)
$(2,860,901)
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)
Class
R
Class
R
Shares:
Year
ended
October
31,
2021
Shares
sold
...................................
—
$—
25,435
$959,623
Shares
issued
in
reinvestment
of
distributions
..........
—
—
5,464
173,376
Shares
redeemed
...............................
—
—
(34,551)
(1,268,102)
Net
increase
(decrease)
..........................
—
$—
(3,652)
$(135,103)
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)
Class
R6
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
57
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,
2021
Shares
sold
...................................
383,411
$11,842,262
248,335
$9,612,236
Shares
issued
in
reinvestment
of
distributions
..........
4,821
127,434
37,469
1,229,343
Shares
redeemed
...............................
(246,239)
(7,669,060)
(321,570)
(12,134,184)
Net
increase
(decrease)
..........................
141,993
$4,300,636
(35,766)
$(1,292,605)
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)
Advisor
Class
Advisor
Class
Shares:
Year
ended
October
31,
2021
Shares
sold
...................................
969,102
$31,340,755
533,163
$20,901,972
Shares
issued
in
reinvestment
of
distributions
..........
56,508
1,483,316
44,043
1,450,354
Shares
redeemed
...............................
(866,250)
(28,043,664)
(407,969)
(15,762,950)
Net
increase
(decrease)
..........................
159,360
$4,780,407
169,237
$6,589,376
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)
Franklin
Small
Cap
Value
Fund
Shares
Amount
Class
A
Class
A
Shares:
Year
ended
October
31,
2021
Shares
sold
a
...................................
6,789,553
$391,493,645
Shares
issued
in
reinvestment
of
distributions
..........
511,688
25,702,130
Shares
redeemed
...............................
(8,383,289)
(463,221,427)
Net
increase
(decrease)
..........................
(1,082,048)
$(46,025,652)
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
Class
C
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
58
franklintempleton.com
Annual
Report
Franklin
Small
Cap
Value
Fund
Shares
Amount
Class
C
Shares:
Year
ended
October
31,
2021
Shares
sold
...................................
748,913
$36,643,555
Shares
issued
in
reinvestment
of
distributions
..........
41,812
1,803,779
Shares
redeemed
a
..............................
(1,039,615)
(52,319,335)
Net
increase
(decrease)
..........................
(248,890)
$(13,872,001)
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)
Class
R
Class
R
Shares:
Year
ended
October
31,
2021
Shares
sold
...................................
820,094
$47,246,697
Shares
issued
in
reinvestment
of
distributions
..........
50,187
2,493,272
Shares
redeemed
...............................
(954,221)
(54,235,333)
Net
increase
(decrease)
..........................
(83,940)
$(4,495,364)
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)
Class
R6
Class
R6
Shares:
Year
ended
October
31,
2021
Shares
sold
...................................
14,413,112
$885,847,704
Shares
issued
in
reinvestment
of
distributions
..........
263,119
13,990,043
Shares
redeemed
...............................
(5,653,897)
(347,551,303)
Net
increase
(decrease)
..........................
9,022,334
$552,286,444
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
Advisor
Class
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
59
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
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
Shares
Amount
Advisor
Class
Shares:
Year
ended
October
31,
2021
Shares
sold
...................................
18,326,262
$1,123,861,942
Shares
issued
in
reinvestment
of
distributions
..........
308,116
16,422,595
Shares
redeemed
...............................
(7,270,843)
(455,152,686)
Net
increase
(decrease)
..........................
11,363,535
$685,131,851
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
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
Distributors,
LLC
(Distributors)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
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
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
60
franklintempleton.com
Annual
Report
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,
2021,
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:
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.
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%
0.480%
0.544%
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%
3.
Transactions
with
Affiliates
(continued)
a.
Management
Fees
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
61
franklintempleton.com
Annual
Report
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,
2021,
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.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Funds
do
not
invest
for
purposes
of
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,
2021,
investments
in
affiliated
management
investment
companies
were
as
follows:
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
..................
$45,361
$81,164
$172,417
CDSC
retained
...........................
$27
$2,413
$17,533
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Transfer
agent
fees
........................
$116,276
$479,331
$2,619,285
aa
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
Franklin
MicroCap
Value
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.
$2,721,839
$74,840,300
$(69,619,125)
$—
$—
$7,943,014
7,943,014
$542
Total
Affiliated
Securities
...
$2,721,839
$74,840,300
$(69,619,125)
$—
$—
$7,943,014
$542
3.
Transactions
with
Affiliates
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
62
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,
2022.
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,
2021, the
custodian
fees
were
reduced
as
noted
in
the
Statements
of
Operations.
5.
Income
Taxes
During
the
year
ended
October
31,
2021,
Franklin
Mutual
U.S.
Value
Fund
utilized
$51,110,257
of
capital
loss
carryforwards.
The
tax
character
of
distributions
paid
during
the
years
ended
October
31,
2021
and
2020,
was
as
follows:
aa
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
Mutual
U.S.
Value
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.
$21,438,515
$218,652,370
$(192,474,791)
$—
$—
$47,616,094
47,616,094
$2,345
Total
Affiliated
Securities
...
$21,438,515
$218,652,370
$(192,474,791)
$—
$—
$47,616,094
$2,345
Franklin
Small
Cap
Value
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.
$67,492,583
$1,081,527,872
$(1,098,116,957)
$—
$—
$50,903,498
50,903,498
$4,078
Total
Affiliated
Securities
...
$67,492,583
$1,081,527,872
$(1,098,116,957)
$—
$—
$50,903,498
$4,078
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
2021
2020
2021
2020
Distributions
paid
from:
Ordinary
income
........................
$743,894
$775,806
$26,185,606
$12,937,860
Long
term
capital
gain
....................
7,754,828
29,108,292
—
51,879,499
$8,498,722
$29,884,098
$26,185,606
$64,817,359
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
63
franklintempleton.com
Annual
Report
At
October
31,
2021,
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
treatment
of
wash
sales.
The
Funds
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.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
year
ended
October
31,
2021,
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.
Franklin
Small
Cap
Value
Fund
2021
2020
Distributions
paid
from:
Ordinary
income
........................
$62,291,644
$30,344,654
Long
term
capital
gain
....................
6,180,061
123,198,324
$68,471,705
$153,542,978
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
a
a
a
a
Cost
of
investments
.......................
$147,262,891
$734,328,492
$4,043,536,029
Unrealized
appreciation
.....................
$83,719,503
$194,845,778
$925,162,721
Unrealized
depreciation
.....................
(7,211,433)
(12,032,370)
(111,571,675)
Net
unrealized
appreciation
(depreciation)
.......
$76,5
08,070
$182,813,408
$813,591,046
Distributable
earnings:
Undistributed
ordinary
income
................
$3,689,006
$7,733,915
$227,434,766
Undistributed
long
term
capital
gains
...........
26,122,376
100,984,451
205,990,845
Total
distributable
earnings
..................
$29,811,382
$108,718,366
$433,425,611
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Purchases
..............................
$78,219,675
$472,921,799
$3,316,720,464
Sales
..................................
$61,322,860
$498,205,815
$2,140,902,759
5.
Income
Taxes
(continued)
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
64
franklintempleton.com
Annual
Report
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.
Additionally,
as
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
companies’
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
company.
During
the
year
ended
October
31,
2021,
investments
in
“affiliated
companies”
were
as
follows:
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
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
4,
2022.
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,
2021,
the
Funds
did
not
use
the
Global
Credit
Facility.
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
Small
Cap
Value
Fund
Non-Controlled
Affiliates
Dividends
Apogee
Enterprises,
Inc.
$
11,870,152
$
35,563,797
$
—
$
—
$
16,933,255
$
64,367,204
1,535,111
$
1,069,201
Benchmark
Electronics,
Inc.
............
17,701,417
47,645,006
—
—
(5,567,112)
59,779,311
2,564,535
1,120,286
Dalata
Hotel
Group
plc
.
6,404,704
44,484,582
—
—
(1,815,375)
49,073,911
11,474,366
—
Denny's
Corp
.......
10,968,662
63,605,456
(4,630,788)
(1,126,462)
14,478,812
83,295,680
5,238,722
—
First
of
Long
Island
Corp.
(The)
...........
18,988,250
—
—
—
5,783,849
24,772,099
1,230,606
947,567
Great
Lakes
Dredge
&
Dock
Corp.
.......
—
59,808,436
—
—
2,467,999
62,276,435
4,091,750
—
Greenbrier
Cos.,
Inc.
(The)
48,148,697
49,223,422
(10,528,034)
(1,791,928)
23,192,609
108,244,766
2,638,829
2,434,249
Jack
in
the
Box,
Inc.
...
52,897,964
69,586,847
(15,279,899)
(660,004)
6,178,437
112,723,345
1,139,195
1,184,906
Knowles
Corp
.......
—
128,129,092
—
—
2,635,406
130,764,498
6,274,688
—
McGrath
RentCorp
....
34,616,737
62,185,646
(1,149,082)
127,094
6,364,723
102,145,118
1,415,929
1,623,851
Wabash
National
Corp.
.
39,682,215
—
(48,079,519)
16,853,603
(8,456,299)
—
a
—
154,565
Total
Affiliated
Securities
(Value
is
16.4%
of
Net
Assets)
..........
$241,278,798
$560,232,284
$(79,667,322)
$
13,402,303
$
62,196,304
$797,442,367
$8,534,625
a
As
of
October
31,
2021,
no
longer
held
by
the
fund.
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
65
franklintempleton.com
Annual
Report
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,
2021,
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
........................
$
215,827,947
$
—
$
—
$
215,827,947
Short
Term
Investments
...................
7,943,014
—
—
7,943,014
Total
Investments
in
Securities
...........
$223,770,961
$—
$—
$223,770,961
Franklin
Mutual
U.S.
Value
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Aerospace
&
Defense
...................
17,009,047
11,301,952
—
28,310,999
Automobiles
..........................
16,871,994
—
—
16,871,994
Banks
...............................
65,201,796
24,007,648
—
89,209,444
Building
Products
......................
22,375,355
—
—
22,375,355
Chemicals
...........................
41,211,844
—
—
41,211,844
Commercial
Services
&
Supplies
...........
12,858,312
—
—
12,858,312
Construction
Materials
..................
—
10,081,255
—
10,081,255
Diversified
Financial
Services
.............
22,891,537
—
—
22,891,537
Electric
Utilities
........................
32,060,625
—
—
32,060,625
Electrical
Equipment
....................
10,474,972
—
—
10,474,972
Electronic
Equipment,
Instruments
&
Components
........................
11,107,479
—
—
11,107,479
Energy
Equipment
&
Services
.............
17,737,871
—
—
17,737,871
Equity
Real
Estate
Investment
Trusts
(REITs)
.
58,828,910
—
—
58,828,910
Food
Products
........................
43,553,195
—
—
43,553,195
Health
Care
Equipment
&
Supplies
.........
13,518,890
—
—
13,518,890
Health
Care
Providers
&
Services
..........
41,547,336
—
—
41,547,336
Household
Durables
....................
16,854,712
—
—
16,854,712
Independent
Power
and
Renewable
Electricity
Producers
..........................
17,710,669
—
—
17,710,669
Industrial
Conglomerates
................
18,516,267
—
—
18,516,267
Insurance
............................
67,585,547
—
—
67,585,547
IT
Services
...........................
54,207,219
—
—
54,207,219
Machinery
............................
22,824,446
—
—
22,824,446
Media
...............................
19,075,921
—
—
19,075,921
Oil,
Gas
&
Consumable
Fuels
.............
13,593,970
—
—
13,593,970
Pharmaceuticals
.......................
29,906,289
32,744,860
—
62,651,149
Professional
Services
...................
15,660,912
—
—
15,660,912
Software
.............................
20,999,762
—
—
20,999,762
Franklin
Value
Investors
Trust
Notes
to
Financial
Statements
66
franklintempleton.com
Annual
Report
Level
1
Level
2
Level
3
Total
Franklin
Mutual
U.S.
Value
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Common
Stocks:
Specialty
Retail
........................
$
27,342,773
$
—
$
—
$
27,342,773
Technology
Hardware,
Storage
&
Peripherals
.
19,468,874
—
—
19,468,874
Textiles,
Apparel
&
Luxury
Goods
..........
18,728,993
—
—
18,728,993
Trading
Companies
&
Distributors
..........
1,664,574
—
—
1,664,574
Short
Term
Investments
...................
47,616,094
—
—
47,616,094
Total
Investments
in
Securities
...........
$839,006,185
$78,135,715
b
$—
$917,141,900
Franklin
Small
Cap
Value
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Auto
Components
......................
91,682,802
—
—
91,682,802
Banks
...............................
439,869,774
—
—
439,869,774
Biotechnology
.........................
11,833,102
—
—
11,833,102
Building
Products
......................
275,409,360
—
—
275,409,360
Chemicals
...........................
357,244,485
—
—
357,244,485
Communications
Equipment
..............
84,940,826
—
—
84,940,826
Construction
&
Engineering
...............
211,723,331
—
—
211,723,331
Construction
Materials
..................
107,250,672
—
—
107,250,672
Electric
Utilities
........................
38,059,796
—
—
38,059,796
Electrical
Equipment
....................
90,320,113
—
—
90,320,113
Electronic
Equipment,
Instruments
&
Components
........................
206,926,319
—
—
206,926,319
Energy
Equipment
&
Services
.............
117,052,952
—
—
117,052,952
Equity
Real
Estate
Investment
Trusts
(REITs)
.
170,143,131
—
—
170,143,131
Food
&
Staples
Retailing
.................
11,779,459
—
—
11,779,459
Food
Products
........................
—
84,194,036
—
84,194,036
Gas
Utilities
..........................
4,795,805
—
—
4,795,805
Health
Care
Equipment
&
Supplies
.........
113,812,072
—
—
113,812,072
Hotels,
Restaurants
&
Leisure
.............
366,816,341
—
—
366,816,341
Household
Durables
....................
4,139,612
—
—
4,139,612
Insurance
............................
480,191,049
—
—
480,191,049
IT
Services
...........................
67,108,033
—
—
67,108,033
Leisure
Products
.......................
66,543,711
—
—
66,543,711
Machinery
............................
470,245,723
—
—
470,245,723
Metals
&
Mining
.......................
15,176,182
—
—
15,176,182
Multi-Utilities
..........................
70,695,364
—
—
70,695,364
Oil,
Gas
&
Consumable
Fuels
.............
198,380,934
—
—
198,380,934
Professional
Services
...................
86,196,060
—
—
86,196,060
Semiconductors
&
Semiconductor
Equipment
.
1,234,950
—
—
1,234,950
Software
.............................
102,388,456
60,451,420
—
162,839,876
Specialty
Retail
........................
121,945,451
74,211,633
—
196,157,084
Textiles,
Apparel
&
Luxury
Goods
..........
21,629,081
—
—
21,629,081
Thrifts
&
Mortgage
Finance
...............
18,892,892
—
—
18,892,892
Trading
Companies
&
Distributors
..........
162,938,650
—
—
162,938,650
Short
Term
Investments
...................
50,903,498
—
—
50,903,498
Total
Investments
in
Securities
...........
$4,638,269,986
$218,857,089
c
$—
$4,857,127,075
a
For
detailed
categories,
see
the
accompanying
Statement
of
Investments.
b
Includes
foreign
securities
valued
at
$78,135,715,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
c
Includes
foreign
securities
valued
at
$218,857,089,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
10.
Fair
Value
Measurements
(continued)
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
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
for
certain
LIBOR
settings
and
2023
for
the
remainder. The
ASUs
are
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
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements.
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.
Franklin
Value
Investors
Trust
Report
of
Independent
Registered
Public
Accounting
Firm
68
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,
2021,
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
four
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,
2021,
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
four
years
in
the
period
then
ended,
in
conformity
with
U.S.
generally
accepted
accounting
principles.
The
financial
highlights
for
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,
2021,
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.
Boston,
Massachusetts
December
20,
2021
Franklin
Value
Investors
Trust
Tax
Information
(unaudited)
69
franklintempleton.com
Annual
Report
By
mid-February,
tax
information
related
to
a
shareholder's
proportionate
share
of
distributions
paid
during
the
preceding
calendar
year
will
be
received,
if
applicable.
Please
also
refer
to
www.franklintempleton.com
for
per
share
tax
information
related
to
any
distributions
paid
during
the
preceding
calendar
year.
Shareholders
are
advised
to
consult
with
their
tax
advisors
for
further
information
on
the
treatment
of
these
amounts
on
their
tax
returns.
The
following
tax
information
for
the
Funds
is
required
to
be
furnished
to
shareholders
with
respect
to
income
earned
and
distributions
paid
during
their
fiscal
year.
The
Funds
below
hereby
report
the
following
amounts,
or
if
subsequently
determined
to
be
different,
the
maximum
allowable
amounts,
for
the
fiscal
year
ended
October
31,
2021:
Pursuant
to:
Franklin
MicroCap
Value
Fund
Franklin
Mutual
U.S.
Value
Fund
Franklin
Small
Cap
Value
Fund
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
$10,865,270
$4,628,838
$30,506,497
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
$2,057,988
$12,197,581
$69,622,547
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
$2,191,863
$15,855,757
$73,151,618
Short-Term
Capital
Gain
Dividends
Distributed
§871(k)(2)(C)
$327,727
—
$60,218,010
Franklin
Value
Investors
Trust
Board
Members
and
Officers
70
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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/Legg
Mason
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
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
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
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.
Franklin
Value
Investors
Trust
71
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
Jan
Hopkins
Trachtman
(1947)
Trustee
Since
2015
11
FTAC
Olympus
Acquisition
Corp.
(special
purpose
fintech
acquisition
company)
(2020-present)
and
FTAC
Parnassus
Acquisition
Corp.
(special
purpose
fintech
acquisition
company)
(February
2021-present);
and
formerly
,
FinTech
Acquisition
Corp.
III
(special
purpose
fintech
acquisition
company)
(2018-2021).
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.
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.
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).
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).
Independent
Board
Members
(continued)
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
**Gregory
E.
Johnson
(1961)
Trustee
Since
2015
135
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
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015)
Franklin
Resources,
Inc.
**Jennifer
M.
Johnson
(1964)
Trustee
Since
2015
70
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
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
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
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
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
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Christian
K.
Correa
(1973)
President,
and
Chief
Executive
Officer
–
Investment
Management
Since
March
2021
Not
Applicable
Not
Applicable
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:
President,
Franklin
Mutual
Advisers,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
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,
FASA,
LLC;
Assistant
Secretary,
Franklin
Distributors,
LLC;
and
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
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
Matthew
T.
Hinkle
(1971)
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
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
124
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
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Susan
Kerr
(1949)
Vice
President
–
AML
Compliance
Since
July
2021
Not
Applicable
Not
Applicable
620
Eighth
Avenue
New
York,
NY
10018
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Compliance
Analyst,
Franklin
Templeton;
Chief
Anti-Money
Laundering
Compliance
Officer,
Legg
Mason
&
Co.,
or
its
affiliates;
Anti
Money
Laundering
Compliance
Officer;
Senior
Compliance
Officer,
LMIS;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
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,
Franklin
Templeton;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
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
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
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
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Ryan
R.
Wheeler
(1985)
Interim
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
October
2021
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director,
Fund
Administration
&
Reporting;
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
and
formerly
,
Director,
Senior
Manager
and
Manager
PricewaterhouseCoopers,
LLC
(2014-January
2021).
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/Legg
Mason
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
and
director
of
Resources.
Note
1:
Gregory
E.
Johnson
and
Jennifer
M.
Johnson
are
siblings.
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson
and
Jennifer
M.
Johnson.
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.
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
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
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
75
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
19,
2021,
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
(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
reviewed
and
considered
an
annual
report
on
payments
made
by
FT
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
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
derivatives
and
other
complex
instruments
that
are
held
and
expected
to
be
held
by
the
Fund
and
how
such
instruments
Franklin
Value
Investors
Trust
Shareholder
Information
76
franklintempleton.com
Annual
Report
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
in
the
current
work-from-home
environment
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-
based
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
77
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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,
2020.
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.
As
part
of
these
discussions,
the
Board
had
extensive
discussions
with
senior
management
of
FT
regarding
the
retirement
of
the
Chief
Investment
Officer
of
the
investment
manager
and
the
appointment
of
the
new
Chief
Investment
Officer
effective
November
2,
2020,
as
well
as
other
personnel
matters.
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.
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
lowest
performing
quintile
for
the
one-year
period
ended
December
31,
2020,
and
had
annualized
total
returns
for
the
three-
and
five-year
periods
also
in
the
lowest
performing
quintile.
The
trustees
noted
that
the
Fund’s
total
return
on
an
annualized
basis
for
the
10-year
period
ended
December
31,
2020
was
also
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
one-,
three-,
five-
and
10-year
periods
ended
December
31,
2020.
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
since
the
recent
personnel
changes
had
taken
effect
on
November
2,
2020
and
the
enhancements
to
the
investment
manager’s
personnel
and
investment
process
continue
to
be
implemented.
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
middle
performing
quintile
for
the
one-year
period
ended
December
31,
2020,
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,
2020
was
also
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
Board
noted
that
on
a
risk-adjusted
basis,
the
Fund’s
relative
performance
was
more
favorable.
The
trustees
discussed
with
management
the
reasons
for
the
relative
underperformance
for
the
three-,
five-,
and
10-year
periods
ended
December
31,
2020.
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
since
the
recent
personnel
changes
had
taken
effect
on
November
2,
2020
and
the
enhancements
to
the
investment
manager’s
personnel
and
investment
process
continue
to
be
implemented.
The
Board
noted
that
it
would
continue
to
monitor
future
performance.
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
second-best
performing
quintile
for
the
one-
year
period
ended
December
31,
2020,
and
had
annualized
total
returns
for
the
three-
and
five-year
periods
in
the
best
performing
quintile.
The
trustees
noted
that
the
Fund’s
total
return
on
an
annualized
basis
for
the
10-year
period
ended
December
31,
2020
was
also
in
the
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
78
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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
second-least
expensive
quintile
of
its
Lipper
expense
group
and
its
total
expenses
were
in
the
middle
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
Fund’s
investment
manager
and
its
affiliates,
from
providing
investment
management
and
other
services
to
the
Fund
during
the
12-month
period
ended
September
30,
2020,
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
Fund,
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
79
franklintempleton.com
Annual
Report
ECONOMIES
OF
SCALE.
The
Board
considered
economies
of
scale
realized
by
the
investment
manager
and
its
affiliates
as
the
Fund
grows
larger
and
the
extent
to
which
they
are
shared
with
Fund
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
Fund
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
$210
million
as
of
March
31,
2021,
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
that
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
Fund
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
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
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,
Product
Management
and
Global
Product
Strategy.
Franklin
Value
Investors
Trust
Shareholder
Information
80
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
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
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.
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,
or
receive
notice
of
the
availability
of,
each
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
FVIT
A
12/21
©
2021
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
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
Item 3. Audit Committee Financial Expert.
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
(2) The audit committee financial experts are Ann Torre Bates 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, 2021 and $88,366 for the fiscal year ended October 31, 2020.
(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 $188 for the fiscal year ended October 31, 2021 and $147 for the fiscal year ended October 31, 2020. 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 $0 for the fiscal year ended October 31, 2021 and $91,000 for the fiscal year ended October 31, 2020. 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 $188 for the fiscal year ended October 31, 2021 and $91,147 for the fiscal year ended October 31, 2020.
(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. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A
Item 13. Exhibits.
(a) (1) Code of Ethics
(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 Ryan R. Wheeler, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Matthew T. Hinkle
, Chief Executive Officer - Finance and Administration, and Ryan R. Wheeler, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
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 23, 2021
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 23, 2021
By S\Ryan R. Wheeler________________________
Ryan R. Wheeler
Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
Date December 23, 2021